Tokuyama

CSR Report 2007
In Harmony with People, Society, and the Environment

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01 TOP MESSAGE
03 Summary of Business

TOP MESSAGE

Highlight
05 Integrated Manufacturing Site Utilizing Resources
to the Fullest Extent——Tokuyama Factory

Tokuyama’s CSR Activities
07 What are Tokuyama’s CSR Activities?
09 Objective of CSR Activities—Reliable Company
11 RC Promotion and Management Systems Operation
12 Fiscal 2006 RC Activities—Priority Issues and Performance

Based on Responsible Care (RC)Activities

In Harmony with Society

Tokuyama Group’s basic management policy is torealize a group that is highly evaluated bystakeholders, including shareholders, customers,
employees, and local communities, and which isconsistently the first choice of its customers. We
intend to achieve this aim by improving ourcorporate value and by promoting business
operations in harmony with people, society, andthe environment.
By acting on the principle of Responsible Care(RC), as followed by chemical industries aroundthe world, Tokuyama joined the Japan
Responsible Care Council (JRCC) when it was
founded in 1995. Since then, we have been
conducting voluntary activities for more than adecade to protect people’s health and theenvironment and to maintain safety throughout theentire life cycle of chemical products, frommanufacturing, logistics, and use, to final
consumption and disposal.

13 Relations with Customers
14 Relations with Shareholders
15 Relations with Local Communities and Society
16 Relations with Trading Partners
17 Relations with Employees
19 Process Safety and Disaster Prevention/
Occupational Health and Safety

In Harmony with the Environment
21 Results of Fiscal 2006 Activities
22 Environmental Accounting
23 Prevention of Global Warming
24 Reducing and Recycling Waste Materials
25 Development of Environmentally Friendly
Products and Environmental Technologies

27 Reduction of Air and Water Pollutants

Site Reports
28 Tokuyama Factory/Kashima Factory
29 Activities of Group Companies
30 Tokuyama RC Activities Historical Overview

Positioning Environmental Management
as the Core of Growth Strategies

Editorial Notes● CSR Report 2007 was prepared with the aim of bringing

Tokuyama’s activities concerning Corporate Social Responsibility
during fiscal 2006 to the attention of all concerned, including
shareholders, investors, trading partners, employees and theirfamilies, people living near our production sites, and the public atlarge. This CSR Report 2007 contains even more information on
our social contributions than our Responsible Care Report 2006.
● CSR Report 2007 is prepared based on the Environmental
Reporting Guidelines (Fiscal 2003 Edition; Ministry of theEnvironment).
● CSR Report 2007 is also available on our website.
http://www.tokuyama.co.jp

Scope of Report
Period:All performance data is for fiscal 2006 (from April 2006
to March 2007). Activities are for fiscal 2006 ingeneral, with some for fiscal 2007.
Companies: Tokuyama Corporation (environmental performancedata represents the total for Tokuyama Factory andKashima Factory). Certain performance data
representing the total for our eleven main production
subsidiaries (see page 29) is also included.
Region:Activities in Japan

Date of issue: October, 2007

Tokuyama Group aims at becoming
a “group that is consistently relied upon bycustomers” by promoting business operationsin harmony with people, society, and the environment.

Shigeaki Nakahara
President

We have positioned environmental management
as one of our core strategies, and included thetheme of “Environment and Energy” as one of theimportant growth strategies in our medium-termbusiness plan. Environmental management is abusiness philosophy that places a priority on theenvironment. We aim at enhancing corporate
value and achieving a sustainable society bytransforming all our business activities into
environmentally friendly ones.
In particular, we have concentrated our energy
on recycling waste and by-products by utilizing
our expertise in the manufacture of chemical
products and cement. In fiscal 2006, we received
waste and by-products totaling 1.9 million tons
from the outside to manufacture cement. We areproud of the fact that Tokuyama Group iscontributing to the “creation of an environmentallyfriendly country” through the development ofvarious eco-friendly products and environmental
technologies.

Accelerating Corporate Social
Responsibility (CSR) Activities
Based on the understanding of the importance of
CSR activities, Tokuyama Group is enhancing
efforts in environmental protection, energy saving,process safety, compliance, and social
contributions.
In May 2006, we began activities to establish
an internal control system to ensure that business
operations are properly undertaken. TokuyamaGroup named these activities as “Sunflower
Activities,” through which we aim at becoming agroup of companies that always fulfills its social
responsibilities as a corporate citizen. Throughthese “Sunflower Activities,” we are establishing asystem to ensure that business operations are
conducted legally, effectively, and efficiently andare strengthening risk management. Corporate
Social Responsibility Division, established in April
2007, will play a leading role in all our “Sunflower
Activities.”
Nowadays, all enterprises have to be fully
responsible for the impact that their businessactivities has on society and on the environment,
and to improve their corporate value throughresponsible action. Tokuyama, as a chemical
manufacturer boasting advanced technologicalexpertise, will ensure that it realizes theserequirements.
We sincerely hope that readers will be able togain a deeper understanding of our activities andgive us their frank opinions and comments.

July 2007(Next issue: Scheduled for September 2008)

01 Tokuyama Corporation

Corporate Social Responsibility Report 200702

Tokuyama’s Products Used in Daily Lives

Summary of Business◆Company Outline
Corporate name:
Established:
Capital:Registered address:
Headquarters:

Tokuyama Corporation
February 16, 1918
JPY 29,975 million (as of March 31, 2007)
1-1, Mikage-cho, Shunan City, Yamaguchi Prefecture
Shibuya Konno Bldg. 3-1, Shibuya
3-chome, Shibuya-ku, Tokyo 150-8383, Japan
Branches and offices:
Sendai, Nagoya, Osaka, Takamatsu, Hiroshima and Fukuoka
Production and Research Sites: Tokuyama Factory, Kashima Factory, Tsukuba ResearchLaboratory

Group companies
Shin Dai-ichi Vinyl Corporation/Sun Tox Co., Ltd./
Shanon Corporation/Tokuyama Logistics
Corporation/A&T Corporation/Shunan System
Sangyo Co., Ltd./Tokuyama Mtech
Corporation/Tokuyama Dental Corporation/Figaro
Engineering Inc./Tokuyama Siam Silica Co., Ltd.
and 84 other companies

Tokuyama, as an expert in many types of chemicals, has developed revolutionary
technologies. We meet the sophisticated needs of various industries and supply
quality products that make our daily lives more comfortable
Dental materials/equipmentby accumulating and integrating these technologies.
(Tokuyama Dental)

Resin composite
filling material,and ceramics
for tooth crowns

Soda ash● Sales● Ordinary Income
Consolidated

Non-consolidated

3,500(JPY 100 million)

Non-consolidated

350● Number of Employees
Consolidated(JPY 100 million)

2,927

3,000

316

2,255

258

2,193

214
1,926

1,554

1,450

1,711
153

150
100

500

50

2003

2004

2005

2006

0

92

Cement,Building
materials
andOthers897
31%

Chemicals

Total

2,927

1,125
38%

Specialty Products

905
31%

(JPY 100 million)

Pharmaceutical andagricultural chemical bulks
Food packaging forsandwiches andrice balls sold atconvenience stores

2,179

2,113

2,004

Pharmaceuticalbulks andintermediates,
and agriculturalchemical bulks

2,067

2,028

Clinical analyzers/
systems (A&T)

86

66

1,000

Clinicalinformation
systems,laboratory
automation
systems, etc.

40

2002

2003

2004

(Fiscal year)● Segmental Sales Breakdown

161

2005

0

2006

(Fiscal year)

2002

2003

2004

2005

2006

(Fiscal year)● Business Segments and Main Products (including group companies)

Microporous
films

Segment

Backing sheets for
disposable diapers,
and packaging for
disposable pocket
warmers

Main Products

Chemicals

Caustic soda, soda ash, calcium chloride, sodium silicate, vinyl chloride monomer,
polyvinyl chloride resin, propylene oxide, isopropyl alcohol, methylene chloride,biaxial-oriented polypropylene films, coextrusion multilayer film, cast polypropylene
films, microporous films

Specialty
products

Polycrystalline silicon, precipitated silica, fumed silica, aluminum nitride, dental
materials/equipment, pharmaceutical and agricultural chemical bulks, plastic lensmaterials, ion-exchange membranes/systems, solvents for washing metals, highpurity chemicals for electronics manufacturing, clinical equipment/systems, gassensors, gas-leak alarms

Cement,Building
materials,
and Others

Raw materials forwindow glass,glass bottles,
glass tableware,and detergentsand dams, and ready-mixed concrete

Polypropylene films (Sun Tox)

4,000

2,000

63

2002

4,614

3,000

200

1,000

0

4,568

250

2,375

2,000
1,514
1,500

4,615

300

2,633
2,500

Consolidated
4,852
4,630

Non-consolidated
5,000(Persons)

Cement Cement used in constructing bridges

Polycrystalline silicon
Vinyl chloride resin

Key material for solar
cells, solar panels,
semiconductor
substrates (IC chips), etc.

(Shin Dai-ichi Vinyl Corporation)

Medical equipment such as
IV bags, sewerage pipes,
cable coatings, etc.

Plastic lens materials
Plastic lenses forglasses and sun
glasses, and hardcoating liquid

Ordinary Portland cement, high-early-strength Portland cement, Portland blast
furnace slag cement, ready-mixed concrete, plastic window sashes, cement typestabilizer, waste treatment◆Tokuyama’s Global Network(Asia)
Hantok Chemicals Co., Ltd. [Korea]
Tianjin Figaro Electronic Co., Ltd. [China]
Tokuyama Trading (Shanghai) Co., Ltd. [China]
Shanghai Tokuyama Plastics Co., Ltd. [China]
Tokuyama Chemicals (Zhejiang) Co., Ltd. [China]
Tokuyama Electronic Materials (Suzhou) Co., Ltd. [China]
Taiwan Tokuyama Corporation [Taiwan]
Southern Cross Cement Corporation [Philippines]
Tokuyama Siam Silica Co., Ltd. [Thailand]
Tokuyama Electronic Chemicals Pte. Ltd. [Singapore]
Tokuyama Asia Pacific Pte. Ltd. [Singapore]

03 Tokuyama Corporation

Plastic window sashes (Shanon)
Aluminum nitride(Europe)(North America)

Tokuyama Europe GmbH [Germany]
Eurodia Industrie S.A. [France]

Tokuyama America Inc. [USA]
Figaro USA, Inc. [USA]

Precipitated silica
Bulking agent for tires

Used for state-ofthe-art devices,
including car
navigation systems,
PCs, and opticalcommunications

High performancesashes featuring
airtightness,sound insulation,and condensation
prevention

Corporate Social Responsibility Report 200704

Highlight

Integrated Manufacturing Site Utilizing Resources——Tokuyama Factory
to the Fullest Extent● Integrated Operations at Tokuyama Factory
Sun Tox Co., Ltd.
ShunanpetrochemicalcomplexFeaturing highly integrated manufacturing processes, the factory is Tokuyama’s largest manufacturing site, with one of the largest
private power generation plants in Japan. Tokuyama Factory has realized a highly efficient manufacturing system, and achieved azero emission rate of almost 100%. The factory is making every effort to realize a sustainable society, for example, through its
cement production business in which waste from the outside is accepted as a raw material.

Tokuyama Polypropylene Co., Ltd.

C 2’

C 3’

IPA

O2

N2

Aluminum nitride

Shunan petrochemical complex

PO
EDC

Shin Dai-ichi Vinyl
Corporation

VCM

Chloride

Cl2

Chloromethane
Tokuyama
Siltech Co., Ltd.

Sodiumsilicate

Electrolysis

NaOH

Metal
siliconPolycrystalline silicon
H2

Raw salt

Power generation plant

Waste

Higashi Plant

Fumed silica
Shunan petrochemical complex

Soda ash

Cement

Waste

Ganister

Yamaguchi Eco-tech Corporation

Limestone

Coal

Undersea tunnel

Recycling Outside Waste —— Active Receipt of Outside Waste

Tokuyama Plant
Nanyo Plant

Ceaseless Efforts for “Greater Integration”
Excellent Infrastructure Supporting Our
Largest Manufacturing Site

Highly Efficient Energy System Enabled by
In-House Power Generation

Tokuyama Factory is located in the Shunan Industrial Complex,
situated in the south-eastern part of Yamaguchi Prefecture facing
the Seto Inland Sea. This factory, which is one of the largest
factories in Japan in terms of area (1.65 million m2), is Tokuyama’score manufacturing site. Tokuyama Factory consists of Tokuyama
Plant (mainly manufacturing inorganic chemicals), Nanyo Plant(producing cement), and Higashi Plant (manufacturing
polycrystalline silicon and organic chemicals.) These three plants
are interconnected via our private undersea tunnel and a bridge.
Tokuyama Factory features an excellent port infrastructure,including 22 private berths (water depth: max. 12 m) and one publicpier (water depth: 14 m).

Our private power generation plant—which has one of the largest
generating capacities in Japan at 552,000 kW—plays a core role in
the integrated operation of Tokuyama Factory. Power and steam
generated here are supplied to various plants, including thechloralkali plant, via power transmission lines and piping. Tokuyama
Factory realizes high energy efficiency by effectively utilizing not
only electricity, but also steam.

Revolutionary Integration● Flow Diagram of the Waste and By-products
Recycling Process in Cement Manufacturing● Trend of unit consumption of waste and by-products● Volume of Material and Thermal Recycling (1,000 tons)(Figures represent those of fiscal 2006)

No
Ash after
residue combustion

Fuels (thermal recycle)
70,000 tons

Sludge/Waste Soils
Waste Incineration Ash 1)
Coal Ash/Waste Liquid
Slag

Waste Plastics 2)(Excluding Vinyl Chloride)
Heavy Fuel Oil Ash
Waste Tires/Animal Sludge
Wood Chips/Waste Liquid

381

400

401

406

420

430

2,000

1,819

1,962

1,550
1,500

277

80

2,004

2,143

200

1,000

100

500

0

91

02

03

04

05

06

0

* A cement kiln is a rotating furnace used to sinter the raw materials in the cement plant.
* Acute-angled waste means waste that becomes acute-angled when crushed, such as cement siding boards.

2,143
100

85

75

70

(fiscal year)

05 Tokuyama Corporation

125

2,500

(kg/t-cement)

300

Raw materials (material recycle)
2.14 mil. tons

1) We recycle incineration ash generated from municipal waste incineration facilities in Yamaguchi Prefecture after
the ash is pre-treated by Yamaguchi Eco-tech, a joint venture between Tokuyama and Ube Industries, Ltd.
2) We have developed a technology to inject quantities of crushed waste plastics into the top of the cement kiln ina stable manner. In response to increased requirements for this process, we have expanded our capacity toreceive, crush, and incinerate such waste each year.

500
Private power
generation
plant with oneof the largest
generating
capacities inJapan

Products

RecycleMaterial

Since the commencement of operations in 1918, efforts have been
made to develop Tokuyama Factory into a completely integrated
factory where various business operations are firmly connectedwith each other in terms of energy, materials, and technologies. In
this highly integrated infrastructure, an organic and inorganic
chemicals manufacturing plant, a cement production plant, and anelectronic materials manufacturing plant are all working side-byside, and their raw materials, products, by-products, waste, andutilities are being effectively utilized.
Exhaustive efforts are being made to recycle the by-products
and waste generated inside the factory. Tokuyama Factory
achieved an excellent waste recycling rate of 94.4% and a zero
emission rate of 99.9% in fiscal 2006.

The cement plant also plays a core role in the integrated operationsof Tokuyama Factory. The plant effectively utilizes by-products fromthe soda ash plant and coal ash from the power generation plant as
raw materials for making cement. The plant also accepts andrecycles a large quantity of waste and by-products from the outside.
Most waste and by-products contain the same elements as
those contained in limestone, clay, silica, etc. that are used as raw
materials for cement. Flammable waste can be used as an alternativefuel for coal. The internal temperature of the cement kiln* reaches ashigh as 1,000–1,800°C, high enough to allow complete combustion of
any flammable materials. Another feature is that the ash remaining
after combustion is also used as a constituent of cement, thereby
leaving no incineration residue.
We have made R&D efforts aimed at increasing the quantity ofoutside waste and by-products that we could process. In fiscal 2006,
in cooperation with the Japan Fiber Reinforced Cement Sidings
Manufacturers Association we succeeded in developing a method toutilize acute-angled waste* without the need for pre-treatment for the
first time in Japan (and began to accept acute-angled waste in April
2007.) The waste and by-products reutilized in our cement plant infiscal 2006 amounted to 2.21 million tons, including 300,000 tons ofwaste from inside the company. To contribute to the creation of arecycling-oriented society, Tokuyama Factory constantly strives totransform itself into a more sophisticated production site.

Thermal

JR Tokuyama Station

71

55

50

25

4
91

0
02

03

04

05

06
(fiscal year)

Corporate Social Responsibility Report 200706

All officers and employees of Tokuyama
practice CSR activities with a desire to makeTokuyama a company that can always fulfill
its social responsibilities as a corporate
citizen.

Tokuyama’s CSR
Activities

Tokuyama Code of Behavior
1 Fair Business Operations

Corporate Social Responsibility Division was established in April 2007. All divisions of Tokuyama are engaged in CSR
activities to improve corporate value and conduct business operations in harmony with people, society, and theenvironment, and make Tokuyama a company that is consistently relied on by its customers.

Concept of CSR

Harmony with people, society,and the environment

2 Compliance
We will comply with laws, regulations and rules. We will never
succumb to antisocial groups that will threaten the order or security ofcivil society.

6 Corporate Culture
We will make an effort to secure a safe, less inhibited and comfortable
work environment in which our employees can realize spiritual andphysical affluence and the personality and individuality of each
employee are respected.

3 Responsible Care
• We will develop and manufacture socially useful products by paying
attention to their safety and provide them to society in order tosecure the confidence of our consumers and customers.
• We will be voluntarily and actively engaged in activities to help
conserve the environment from broad viewpoints of the global
environment, resource recycling, etc.

7 Roles of Top Management

4 Communications
We will enhance communications with various stakeholders in society,including our shareholders, through proactive and fair disclosure of
information.

Top management must understand that their role is to comply with thephilosophy of this charter, take the initiative, make an effort to improve
the internal system to collect internal and external opinions and ensure
the strict observance of corporate ethics.
If a situation infringing any of the provisions of this charter takes place,
top management must immediately disclose information to society in aproper manner and perform accountability. In this case, top management
must investigate the causes of such a situation and take countermeasure
to avoid repetition, as well as take disciplinary actions against persons
involved, including themselves, after having identified responsible persons.

Basic Philosophy of Responsible Care

Improvement of corporate value

Basic Policy

ActionObjectives

Establishment of favorable
relations with stakeholders

In Harmony with the Environment

As a member of the Japan Responsible Care Council, Tokuyama Corporation carries out Responsible
Care activities that protect the environment and preserve safety and health throughout the entire chemical
substance life cycle, from development and manufacturing, to distribution, use, final consumption anddisposal.
Our social mission is to aggressively tackle and solve environmental issues in particular, which, in turn,will lead to sustainable corporate and social development. Based on this recognition, we are promoting“Environmental Management,” a management policy that emphasizes the environment, in all of ourbusiness activities, including development, manufacturing and sales.

Responsible Care (RC) is a self-management activity by acompany that either manufactures or handles chemical
substances, to implement and improve measures forprotecting the “Environment, Safety and Health” of society
and staff throughout the chemical substance handlingprocess—from inception in the research and development
through manufacture, distribution and use, to final
consumption and disposal. These activities also includes

1 Promote environmental protection.
● Implement ISO14001 based Environmental Management System and reduce environmental loads.

2 Observe laws and regulations.
● Observe international rules, local laws and regulations and industrial standards.
● Thoroughly practice internal export control rules.

3 Promote energy conservation and curb global warming.
● Achieve the lowest unit energy consumption in the industry for each of our products.

Medium-term business plan

4 Promote resource recycling and work towards the reduction andproper management of waste materials.

Enhancement of governance/compliance systems
Promotion of RC activities● Promote material recycling and thermal recycling of resources.

Globalenvironment

Site Reports

Employees• As a “good corporate citizen,” we will conduct social contributions ina positive manner.
• We will respect local cultures and customs in foreign countries andpromote business operations that may contribute to thedevelopment of local communities.

● Tokuyama’s CSR Activities

Responsible Care (RC) Activities

Customers

5 Social Contributions

We will compete with rival companies in a fair, transparent and liberalmanner. We will maintain sound and normal relationships with
politicians and administrative organizations.

In Harmony with Society

Since 1995, Tokuyama Group has been steadily conducting
Responsible Care (RC) activities to fully perform the social
responsibilities of a corporate citizen and to win theconfidence of our society. Based on the results of our RC
activities, we have enhanced our CSR activities.
Our three-year business plan, which commenced in fiscal
2005, places a priority on the enhancement of environmental
management, process safety, and energy saving as measures
to prevent global warming, together with a focus oncompliance. In May 2006, we began efforts to establish aninternal control system.
In April 2007, we established Corporate Social
Responsibility Division to further strengthen our CSR
activities.
In accordance with the “Tokuyama Code of Behavior,” wewill establish favorable relations with all types of stakeholders,and make an effort to realize a Tokuyama Group that will beconsistently relied on by customers and that can conduct its
business operations in harmony with people, society, and theenvironment.

public disclosure of company performance and social
dialogue.
Born in Canada in 1985, Responsible Care has spread to
52 countries. The Japan Responsible Care Council (JRCC)
was established in 1995 within the Japan Chemical Industry
Association and has 103 companies registered as of April
2007.
We became a member of JRCC when it was founded.
Since then, we have been energetically continuing RC
activities as the bases of environmental management andCSR activities.

Tokuyama’s CSR Activities

What are Tokuyama’s CSR Activities?

● Work towards the paperless office.

5 Promote process safety, disaster prevention and occupational healthand safety.
● Aim for zero accidents and disasters based on principles of safety self-management and self-

responsibility.

Tokuyama Code of Behavior

Trading
partners
Shareholders● Secure comfortable work environment and protect people’s safety and health.

Local
communities
society

6 Ensure strict product safety standards.
● Offer environmentally-oriented products that can be safely used.
● Provide clear information on how to use the product and what care to take.

7 Deepen trusting relationships with the society.
● Publicly disclose information on Company’s activities concerning environmental protection,

process safety, occupational health and safety and chemical product safety.
● Actively pursue dialogue with local communities.

07 Tokuyama Corporation

Corporate Social Responsibility Report 200708

Employees

Do my actions comply with laws, regulations, and theinternal rules?
Do my actions comply with the “Tokuyama Code of
Behavior” and the “Tokuyama Behavioral Guidelines?”

Trading
partners
Shareholders
Employees
Local
communities/society
OthersWhat will customers or trading partners think of my actions?

Socialresponsibilities
Corporate
activities

What will general consumers in society think of my actions?
Can I talk proudly to my family or colleagues about myactions?

“Tokuyama’s Five Conscience Clauses” printed on the back of
the ID cards carried by all employees

ComplianceOpen corporate culture

Transparent approaches(manuals, records)

Compliance and risk
management (foundation)

Personal Information Protection
Promotion System
Simultaneously with the enactment of the Personal Information
Protection Law in April 2005, we publicized our “Personal
Information Protection Policy” on our website, and establisheda “Personal Information Protection Promotion System.” Then,we created an inquiry desk that responds to internal andexternal inquiries. All officers and employees are required toparticipate in an awareness building program, including an
education program using the intranet, to ensure that they
always conduct business operations based on an awareness of
the importance of personal information. In addition, we
periodically conduct monitoring, audits, and so forth.

● Information Security Management Structure● Organization of the Information Security Committee
Information Security Committee

Chairperson

Instructions
Communications

Communications
Board of Auditors

09 Tokuyama Corporation

Compliance
Committee

Reports
Board ofDirectors
Instructions

System control
managerMember in chargeof affiliates

Member in chargeof finance

Reports

Member in chargeof manufacturing

Helpline

Member in chargeof R&D

Auditing Dept.

Member in chargeof general affairs
and personnel
management

Information, reports, etc.

On May 8, 2006, the Board of Directors made a resolution
on a “basic policy for the establishment of an internal
control system.” Since then, efforts to establish a “system
to ensure that business operations are properly
undertaken” have been made. On May 7, 2007, the Boardof Directors made a resolution on the “Fiscal 2007 Basic
Policy for Establishment of the Internal Control System”
based on the progress made over the past year.
Tokuyama Group formed a committee, headed by the
President, in charge of the promotion of activities toestablish and implement our internal control system. This
committee has been given the nickname of the “Sunflower
Committee.” This nickname was selected from among
many proposals made by employees of group companies,

Member in chargeof salesInformers/advice seekers

System control manager
Information Security Secretariat

Director in
charge ofBusiness
Division

Information Security Management Officer

General Manager

Information Security Manager

Information Security Staff

Site Reports● Compliance System

Information Security Audit Group

Information Security Secretariat

Progress of Establishment of
the Internal Control System

Company-wide
management

Shareholders

Trading partners,
includingcustomers

Customers

Reliablefinancial statements

In Harmony with the Environment

Tokuyama’s Five Conscience Clauses

Stakeholders
Localcommunities/society

Checkups
throughmonitoring

Tokuyama is promoting activities to ensure that all groupcompanies can effectively utilize our information assets, which
are referred to as our “fourth management resource,” and thatsuch information assets will never be used in an inappropriatemanner nor be leaked. These activities are led by members of
the Information Security Committee.
In January 2001, top management made a “Declaration on
Implementation of Information Security Measures,” with the aimof enhancing our information infrastructure as the basis ofcorporate business reforms. Since then, we have undertaken
activities to establish an effective information security system,and the Information Security Committee was formed. This
Committee has established integrated security measures for
information assets, and named these measures as our“Information Security Policies.” We are making efforts tostrengthen awareness of the importance of information security
among employees by periodically inspecting how each division
follows security measures concerning information assets basedon the “Information Security Policies,” and promoting active
utilization of information assets.
With the purpose of improving the value of Tokuyama Group
as a whole, Tokuyama encourages all group companies to adopt
regulations, etc. that are the same as, or similar to, those of
Tokuyama Corporation, depending on their actual conditions.

Departmental management● Tokuyama’s Compliance VisionInternal control system

Maintenance ofeffectiveness andefficiency ofbusiness operations

As one of our efforts to improve the compliance system, weestablished a helpline (consultation desk) in October 2003
to respond to reports or requests for consultation made by
officers and employees of the Tokuyama Group.
In fiscal 2006, we expanded the scope of users of thishelpline so that it may also respond to reports or requests
for consultation made by trading partners. In fiscal 2007,
the scope of users of the helpline has been further
expanded to include the family members of our employees.
In addition to the conventional helpline, we alsoestablished an external consultation desk to further
enhance our support system.

Preservation ofassetsCreation and Enhancement of the Helpline

Corporate governance

In July 2003, we revised the “Tokuyama Code of Behavior”(see page 8). Then, in March 2004, we established the“Tokuyama Behavioral Guidelines,” and distributed copies
to all employees. With the aim of raising awareness of theimportance of compliance, all employees are required tocarry a card showing “Tokuyama’s Five Conscience
Clauses,” as specified in the “Tokuyama Behavioral
Guidelines.”

Stable business
management

Promotion of Integrated Security
Measures for Information Assets

In Harmony with Society

Promotion of Compliance● Internal Control System

CSR-based management

As part of CSR activities, we continue efforts to establish
an internal control system. Since compliance is a coreelement of our internal control system, we believe that it isindispensable in making our CSR activities and the internal
control system truly effective.

The Compliance Committee, headed by the President, has
determined the basic concept and company-wide
compliance policies, the overall compliance system, and its
organization. The secretariat of the Compliance Committee
leads our compliance promotion activities.

Expectations

Basic Concept

Compliance Promotion System

Stakeholders

Improvement of the Compliance System

Maintenance and Improvementof Information Security
Tokuyama’s CSR Activities

As part of corporate social responsibility (CSR), our basic management policy places a priority oncompliance. In fiscal 2006, we expanded the scope of users of the helpline to enhance the compliancesystem.

Sense ofsecurity

Objective of CSR Activities — Reliable Company

and represents Tokuyama Group’s commitment that all
officers and employees will always carry out their business
operations “in the full light of the sun.”Tokuyama Group’s internal control system enables
sound business operations that can meet the expectationsof all kinds of stakeholders, through transparent
approaches and monitoring, based on compliance and risk
management. The objectives of our internal control system
are to preserve corporate assets, maintain theeffectiveness and efficiency of business operations, andprepare reliable financial statements, and to makeTokuyama a company that is relied upon by all its various
stakeholders.

Manager, AssistantManager
Person in Charge of Systems

Person in chargeof departmental
systems

Corporate Social Responsibility Report 200710

RC Promotion and Management Systems Operation

RC Promotion System

Evaluation and Management System
for RC Activities● RC Promotion System
RC Administration
Committee
Assessment
Function
Product Assessment
Committee(Labeling Assessment
Subcommittee)

Decision-making
Function
Environmental
MeasuresCommittee
Safety Measures
Committee

Safety andEnvironmental
Assessment
Subcommittee

Product Safety andQuality AssuranceCommittee

RC Research Laboratory(Support Organization)

RC Management Dept.
(Secretariat)

Checks safety of chemicals andassesses their environmental
impacts using simulations.
Environmental measurements,
work environment measurements
and ultra-trace analyses ofcontrolled substances andchemical pollutants are also
carried out.

Promotes RC activities throughout
the Company and its groupcompanies covering areas of theenvironment, safety and quality.

ISO 14001 Environmental Management System

To ensure product safety, our Product Assessment procedure isin operation at each stage, from initial R&D to the delivery of our
products to the market. In this assessment, conformity with legal
requirements is examined and risks are evaluated from a varietyof aspects, including the safety of chemicals used, environmental
impacts, effects on human health and so forth. Our Labeling
Assessment helps us ensure that the labels that we carry on our
products contain no defects in their instructions and/or warnings
and that they contain sufficient and easy-to-understandinformation.

Safety and Environmental Auditing
We conduct this type of auditing on a yearly basis to verify theappropriateness of our accident/disaster prevention measuresand management activities for environmental conservation. The
auditing team is headed by a Director, who is either the Chairman

Education and Training
Employee education and training on the Responsible Care
activities are provided on a hierarchical group basis.
For environmental management, safety management,
occupational health and safety and quality management,“On-the-Job-Training” is provided so that employees canlearn through actual management activities.

Environmental Load
Reduction Goals
Mid-term Environmental
Plan
Environmental
Management Plan
Environmental
Management Activities

Segment
ISO 14001 Environmental
Management System
Safety and Environment
Assessment System
RC Auditing System

Assessment of
Activities

Fiscal 2006 RC Activities—Priority Issues and Performance

Environmental Accounting
Environmental Performance

We have also acquired an ISO 9001 certification (Quality
Management System) for our main products. All
departments of our company, including sales anddevelopment departments, have implemented this systemsince fiscal 2002.

With the necessary assessment systems in place, we are working
towards lowering environment- and safety-related risk levels.

Health and Safety Management System

Safety and Environmental Assessment

Based on the “JCIA—New Occupational Health and Safety
Guidelines,” of the Japan Chemical Industry Association(JCIA), each factory has implemented a Safety and HealthManagement System. In fiscal 2005, Tokuyama Factory
upgraded this system to a Security Management System byadding a range of safety-related activities.

Before any facility is newly installed, expanded, or refurbished,
we require a safety and environmental assessment to be carriedout. This assessment is designed to check up the design safetyof equipment, the safety of the materials being handled,compliance with laws and regulations, and impacts on theenvironment. This helps us in making our facilities safe and easy

Assessment Systems

Priority Issues

Performance

Related pages

Management• Review by Senior Management• RC Administration Committee• Safety and Environmental Audit

P. 11

Environmental
preservation• Environmentalload reduction• Energy conservation• Waste recycling• Reduction in environmental burdens(air, water quality, etc.)• Reduction in the emission of PRTR
substances and hazardous air pollutants• Decrease in unit energy consumption• Promotion of zero-emission activities• Promotion of green purchase• Reduction in emissions of SOx, COD, phosphorus, and dioxins• Reduction of EDC and VCM• Promotion of energy conservation• Utilization of waste as raw materials and fuel for producing cement• Green Procurement of office supplies and lighting equipment• Faithful implementation of the Environmental Management System

P. 27
P. 27
P. 23
P. 5–6
P. 16
P. 11–12

Process safety• No accident• Promotion of risk management• Promotion of safety self-management• Proper implementation of the safety management system• Renewal of certification to operate boilers and Type-1 pressure
vessels for the second year in succession• Safety education and training for logistics companies and audit

P. 19–20
P. 19–20

Occupational
health and safety• No disaster• Further surpassing our zero-accident record• Promotion of risk assessment

P. 19–20

Chemical productsafety• Ensured product safety• Product assessment, labeling inspection• Improvement of MSDS, and investigation of new raw materials

P. 13–14

Trusting relationships
with local communities
and society at large• Participation in community activities• Harmonious coexistence with local
communities and society at large• Participation in community’s volunteer activities• Dialogue meetings on RC activities with local communities

Promotion of RC
program to groupcompanies• Dissemination of RC activities

ISO 9001 Quality Management System

11 Tokuyama Corporation

Renewal inspection for
ISO 9001(Tokuyama Factory, April
19, 2007)(on a regional basis, or on a factory basis)

Site Reports

Tokuyama and Kashima Factories have already acquired
ISO 14001 certification, an international standard forEnvironmental Management Systems.
In line with company-wide environmental policy, eachfactory sets itself an environmental policy and the specificgoals to be achieved in areas covering lowering
environmental loads, energy conservation, reducing wastematerial disposal and promoting resource recycling.
At the company headquarters, branch offices and researchlaboratories, activities are under way based on their respective
policies and goals in the areas of energy conservation,
reducing waste material disposal and resource recycling.

Reflected in next year’s goals and plans

Operation of Management Systems

Product Assessment and Labeling Assessment

Our Auditing Systems are in place to verify that activities
undertaken at each factory are in line with company-wide policies.

RC Activity Goals

Third Party Auditing
We are regularly audited by certification and registration bodies
regarding our ISO 9001 and ISO 14001 certification.

Auditing Systems● Evaluation and Management System for RC Activities(Environmental Preservation)

Our internal auditing is carried out periodically in accordance with
ISO 9001, ISO 14001, and the Safety and Health Management
System procedure. The progress status of planned actions andthe operational status are audited and nonconformities are
identified for corrective action.

In Harmony with the Environment

We have made a three-year plan starting from fiscal 2005. To
achieve the goals of this three-year plan, we set yearly
policies and related goals, based on which, each department
prepares a specific implementation plan. The activities
undertaken are assessed at the fiscal year end and theresults reflected in plans for the following year.

Internal Auditing
Safety andEnvironmental
Assessment(Tokuyama
Factory,
November 22,
2006)

In Harmony with Society

Our RC Administration Committee, which draws up thehighest-level policies on our RC activities, is chaired by the
President and comprises board members. The committee
discusses and approves company-wide RC policies andother environment, safety and quality-related measures.
Under this committee are various subordinate organizations:
the Environmental Measures Committee, the Safety
Measures Committee, the Products Safety and Quality
Assurance Committee and the Product Assessment
Committee. These subordinate organizations are responsiblefor discussing specific action plans and assessing productsafety. Each subcommittee is chaired by a director
responsible for company-wide issues concerning theenvironment, safety, or quality. Heads of related company
departments are appointed as subcommittee members.

of the Environmental Measures Committee or of the Safety
Measures Committee, and conducts an auditing for all factories
and offices, authorized organizations subject to inspection underthe High Pressure Gas Safety Law, logistics departments, and the
Health Management Center. A report is compiled based on theauditing results, and distributed to all departments concerned
and to the President.

Tokuyama’s CSR Activities

At Tokuyama, Responsible Care (RC) activities account for most of our CSR activities. To continuously improve
environmental protection activities, process safety, and product safety and quality, we have established acompany-wide promotion system and are steadily implementing each of these management systems.

to operate, easy to maintain and accident-free. The assessments
are made in three stages: Basic Plan Assessment, Design
Assessment, and Pre-Operational Assessment. These
assessments are made to ensure that facilities are of a safe andenvironment-oriented design, built to the design specifications,and ready for operation.

P. 14

P. 15–16• Factory tours for stake holders• Safety and environmental inspection• Acquisition of ISO certification• Sharing of RC-related information

P. 29–30

Corporate Social Responsibility Report 2007

12

In Harmony withSociety

Establishment of favorable relations with all
stakeholders is indispensable for Tokuyama
in improving our CSR activities.
Tokuyama grows with society.

We adopt customer-focused quality assurance based on the ISO 9001 quality management system. As forchemical substances, we implement strict safety management at all stages, from R&D to disposal, includingtransportation.

Investigation of All Chemical Substances
We assess the safety of chemical substances by acquiring
and analyzing safety-related data. In fiscal 2006, weestablished a system for investigating the hazards of newly
used raw materials. As a result, in addition to conducting
product assessment and waste investigation, we were able
to establish systems for investigating the hazards of all
chemical substances being newly used, manufactured anddisposed.

Risk Assessment and Management ofChemicals

Participation in HPV Program
The High Production Volume Chemicals (HPV) Program is aninternational program to conduct safety assessments ofchemicals that are manufactured in at least two countries
with a volume of 1,000 tons or more and specified as priority
chemicals (approximately 1,000 chemicals) from the list
produced by the Organization for Economic Co-operation

13

Tokuyama Corporation

Adoption of GHS
GHS* is a system promoted by the United Nations thatclassifies chemicals depending on the types and degrees of
their hazards in accordance with globally agreed rules, andindicates the hazards of chemicals using labels and safety
data sheets.
In fiscal 2006, we included “Adoption of GHS” as part ofour quality management policy, classified for products andprototypes containing chemical substances for whichlabeling is obligated by the Industrial Safety and Health Law,and prepared labels and MSDSs*.

Assessment of Products and Labeling
We appropriately assess the safety of both the chemicals
and equipment units that we manufacture, in stages fromresearch and development through commercialization. We
made 41 assessments of this kind in fiscal 2006.
We also carry out labeling assessments for our catalogues,
MSDSs,* and other technical documents. The appropriatenessand legality of representations on labeling and packaging ofproducts, prototypes and sample products are assessed andinappropriate representations are corrected. In fiscal 2006, weconducted about 300 labeling assessments.

● Assessment Flow Diagram for Ensuring Safety andEnvironmental Preservation
Safety andEnvironmental
assessment

Assessment
stages

Product
assessment

Researchcommenced

Development group leaders

Development
commenced

R&D department heads

Commercialization
under study

Product assessment
committee

Safety and Environment
Assessment Subcommittee

Labeling Assessment
Subcommittee(Tertiary assessment)(Basic Plan)(Products)

Product
equipment
being designed
Pre-marketing(pre-operation)

Post-operation

Waste materials are handled in the same way as our
products. We have prepared the necessary MSDSs for wastematerials and distribute them to waste handling contractors
and logistics companies to ensure the safe handling andtransportation of such materials. Each driver is required tocarry a “Yellow Card*” prepared for high-risk waste materials
in case of an accident during transportation. We have so far
prepared 73 MSDSs and 41 Yellow Cards for wastematerials.

Before hazardous materials are transported, we conduct a
risk assessment to verify the safety of the transportationmeans and trucking routes, and also the emergency
measures to be taken in the event of an accident. If a certain
risk is found to be high, we improve the transportationmeans, and so forth, as necessary. When a logistics facility
is newly constructed or expanded inside or outside ourfactory, a facility safety assessment is always conducted.
In addition, if a facility of a customer receiving products
transported by tanker trucks is found to be unsuitable, we
encourage the customer to make the necessary
improvements.

Labeling
assessment

Promoting Safety and Environmental
Management in the Distribution Process

Crisis Management System

Providing Our Logistics Companies with
Guidance and Education on Safety Management

To deal with potential crises in logistics operations, we haveestablished emergency response criteria and disasterprevention equipment and materials are always ready foruse. In the Shunan, Kanto, and Kansai districts, we haveestablished a mutual disaster assistance system incooperation with logistics companies.
We are encouraging each logistics company to introduce
a Global Positioning System (GPS) for their trucks.

We regularly hold local safety meetings with our nation-wide
logistics companies whom we commission to provide
transportation services. We conduct safety inspections to
help these logistics companies to improve their safety
management levels. At Tokuyama Factory, our safety
specialists regularly make an inspection of loading terminals
and worksites, visit
cargo carriers mooringat the piers, and provide
safety guidance asnecessary, incooperation withlogistics companies.
We also have arange of emergency
Drill simulating a truck accident(Shunan district, November 21, 2006)
measures in place. For

Environmental Preservation Measures and Energy
Conservation Associated with Transportation
We urge trucking companies to introduce vehicles fully
adapted to exhaust regulations, fuel-efficient vehicles, or
eco-driving support devices (for example, digitaltachographs). Following the revision of the Law concerning
the Rational Use of Energy (or the “Energy Saving Law”), we
have been actively implementing energy saving measures asa designated cargo owner.

Relations with Shareholders
Site Reports

We are conducting activities to prevent environmental
pollution by monitoring the concentration of chemicals in
effluents and gas emissions.
In addition, we simulate concentration distribution forchemicals and analyze their detailed behavior. Risks arecharacterized based on a combination of concentration dataand safety data. Characterized results are reflected in theenhancement of our equipment safety measures andhandling procedures, and in educating workers involved inhandling products and waste. These efforts eventually assist
us in improving our product safety and providing accurate
information to our customers.

Risk Assessment

In Harmony with the Environment

Comprehensive Safety
Management of Chemicals

Strict Safety Management of Waste Materials

In Harmony with Society

We aim at becoming an even more customer-focusedcompany that is consistently relied upon by our customers.
Therefore, we place a top priority on the provision of quality
products and services that can offer satisfaction and a senseof security to our customers.
Our company implements company-wide quality
management and quality assurance activities in accordancewith the ISO 9001 quality management system. By including
branches, sales departments, and the R&D division within
the system, we can rapidly and appropriately respond torequests or grievances from our customers. Each divisionpublicizes information on these requests and criticisms intheir respective portals of our “groupware” intranet, so thatdivision members are able to utilize this shared information.

and Development (OECD). We actively participate in the HPVProgram with regard to 17 chemical substances andconduct safety assessments of these substances.
Since 2005, we have been promoting activities as aleader of the international consortium for
Tetramethylammonium Hydroxide (TMAH) HPV. TMAH isused as liquid developer in the photolithography process forsemiconductors and liquid crystal panels. In April 2006, we
attended an international conference (SIAM22) held inFrance, where our TMAH-HPV Assessment Report wasapproved.

Tokuyama’s CSR Activities

Relations with Customers
Quality Assurance System Supports
Satisfaction and Sense of Security

We provide our customers and logistics companies withMSDSs for all our products and prototypes. An MSDS is
prepared for each of approximately 470 types of products.
Of these, MSDSs for 33 types of products that aretransported in large quantities and heavily used by ourcustomers are publicized on the company’s website for theconvenience of customers.

example, each truck driver is obligated to carry a Yellow
Card and appropriate emergency tools so that they can takesuitable and speedy action based on the emergency
measures specified on the card if an accident occurs during
land transportation.
An emergency network and related organizations also
form part of our emergency measures. In addition, disaster
drills are conducted to test the effectiveness of theemergency network and practice initial responses.

Provision of Information on Our Chemical Products

We aim to provide all relevant information properly and speedily to win the understanding and confidence ofshareholders and investors.

(Primary assessment)

Labeling Assessment
Subcommittee(Secondary assessment)(Prototypes)

Safety and Environment
Assessment Subcommittee(Designing)

Safety and Environment
Assessment Subcommittee(Pre-operation)

Report on actual conditions(Environmental)*GHS: Globally Harmonized System of Classification and Labelling of Chemicals*MSDS is the abbreviation for Material Safety Data Sheet. It is a document that contains information such as the name of the chemical material, appropriate safety and emergency
measures required, etc., related to that material and is intended to ensure safe handling by providing information about any hazards related with the specific material.

In 2007, we reformed our Corporate Communications
Dept. into the Corporate Communications & Investor
Relations Dept., and transferred this group from theGeneral & Personnel Affairs Division to the Corporate
Planning Division in response to the increased
importance of investor relations (IR) activities.
To provide our shareholders and investors withinformation, we have created an “IR” corner on our
website where stock information, consolidated financial
data, statements/reports (financial summaries,
electronic public notices, financial statements, annual
reports, financial briefings), and an IR calendar areavailable for our shareholders and investors.

● Composition of Shareholders(as of March 31, 2007)
Securities
companies

Other
domestic
companies

1.0%

11.9%
Individuals, etc.
Total number ofFinancial
institutions

13.1% outstanding shares 39.1%
Foreign companies
and individuals

34.9%*The “Yellow Card” is the common name for a special information card prepared for emergency use. The card explains to the truck driver,relevant persons, fire fighters and police officers what to do in the event of an accident during the transportation of chemicals.

Financial briefing (May 14, 2007)

Corporate Social Responsibility Report 2007

14

Relations with Local Communities and Society
Communications with Communities
and Society
Tokuyama Science Foundation

Donation of Previous Uniforms to Nepal

Practical Training for High School Students—the Japanese Version of the Dual System

I Gained Valuable Experience that I Cannot Get at
My School
Junka Sasai,then Third Grade, General Business Course,
Tokuyama Commercial High School

I would like to take up a clerical job after graduation. As I could
begin to understand what clerical work involves through my onthe-job training, I could gain a little
more confidence. At the same time, I
could really understand the weight of
responsibilities of working persons
because if I didn’t do my job well,other persons may be affected. I’msure that I can utilize what I
experienced here in my future job.

15 Tokuyama Corporation

Responsible Care Report and Web Site
Every year since 1997,we have issued our “Responsible
Care Report” (both Japanese and English editions) tocommunicate our stance on society, the environment andon safety and health issues and report on our activities
during the previous year.
Our Web site includes pages with information on ourefforts in making environmental and social contributions.

Experiment using large air guns

Experiment using balloons

Exchanges with Local Communities◆Each year, we actively participate in forest maintenance activities,
called “Activities for Community-Forest-Water Interaction,” organized
to help preserve the forests in the community area. In fiscal 2006 (thetenth year of these activities), 133 persons participated in this event,mowing grass, thinning out the woodland, and trimming the branchesof trees at Mt. Iinoyama in Shunan City.
We welcome factory tours. In
fiscal 2006, Tokuyama Factory wasagain included as one of the tour
sites for the “Factory andSightseeing Tours” organized by the
Chamber of Commerce and Industryin Shunan district. Thanks to this,“Activities for Community-Forestapproximately 3,400 visitors,
Water Interaction” (October 14, 2006)
including 144 school children, visitedthe cement plant where waste recycling facilities are in operation.
◆Kashima Factory designates May 30 as “Zero Refuse Day.” On thisday of every year, employees carry out coordinated cleaning workinside and outside the factory. As a member of the Hasaki District
Companies Network, we undertook offensive odor patrols andcoordinated cleaning work around the industrial complex.
◆In fiscal 2006, eight environmental complaints were raised against
Tokuyama Factory. Of these cases, Tokuyama Factory was found to
be responsible for three cases. Various countermeasures, including
the improvement of related facilities, were taken after having
undertaken investigations to determine the causes. There were also
three complaints against Kashima Factory, although the factory waslater found not to be responsible for any of these issues. The
General Affairs Section responded to all these complaints on behalfof the company.

Relations with Trading Partners
We conduct CSR activities in the area of purchasing by establishing reliable relations with our trading
partners based on fair transactions.
Through fair and favorable
partnerships with our
trading partners, we
conduct purchasing
activities in accordancewith our “Basic Purchasing
Policy,” which has been
established to help us
provide our customers withgood quality products
supported by excellent
technologies.

* This “Basic Purchasing Policy” neither
constitutes part of the conditions of acontract nor constitutes an offer of acontract.

● Tokuyama’s Basic Purchasing Policy

Appropriate Partners

Compliance with Laws and Regulations

Before commencing transactions, we select the mostappropriate trading partners by conducting an
integrated evaluation of a range of factors, including
quality, pricing, delivery times, technological capability,
reliability, safety, after-sales services, ease ofmaintenance or management, trouble shooting
capability, compatibility with existing facilities, stabilityof business operations, and so on.

In our purchasing activities, we comply with all
relevant laws and regulations. We urge our
trading partners to observe applicable laws
and regulations, and select only those trading
partners that can assure us of suchcompliance.

Partnerships

Promotion of Green Purchasing

Our company and trading partners aim at achieving thecommon goal of developing and manufacturing superior
products. To achieve this goal, our door is always open
to potential trading partners who can offer uniqueproposals. Thus, we create an environment where new
trading partners can find it easier to begin to dobusiness with us.

We conduct environment-conscious
purchasing activities while taking into
consideration the 3 R’s (Reduce, Reuse, andRecycle.)Corporate Social Responsibility Report 2007

Site Reports

In July 2006, two pupils of Tokuyama Commercial High School
received on-the-job training at our company for a period of 16days. This program was conducted as part of the “Japanese
Version of the Dual System,” which is jointly promoted by the
Ministry of Health, Labour and Welfare and the Ministry of
Education, Culture, Sports, Science and Technology. The
objective of this program is to help high school students todevelop a sense of professionalism and an appropriate attitude
towards work.

“Local RC Dialogue”
held by Tokuyama
Factory(August 21, 2006)◆Yamaguchi Iki-Iki Eco Fair
An environmental event titledthe “Yamaguchi Iki-Iki EcoFair” was organized by the
Yamaguchi prefectural
government (from October 15
to 16, 2006.) We opened abooth under the theme of“Eco Life with Tokuyama’s
Products.” We introduced thefact that Tokuyama
manufactures polycrystalline
silicon used as raw material forsolar cells to many prefecturalresidents. This is ourcontributions to help realize an
Our booth under the theme ofenergy-saving society and“Eco Life with Tokuyama’s Products”
prevent global warmingat the Yamaguchi Iki-Iki Eco Fair
through the increased
proliferation of solar cells.

In Harmony with the Environment

Since fiscal 2005, we have been donating no longer needed
uniforms of female employees to Nepalese children who areliving in rather harsh conditions. When their current uniforms
were replaced with new ones, some female employees made a
proposal of donating the old uniforms as a means of effectively
utilizing limited resources.
In fiscal 2006, the shortsleeved blouses andwaistcoats of female
employees working at theheadquarters andbranches were donated tochildren of Shree
Balwamiki Lower
Secondary School inChildren of Shree Balwamiki Lower
Bhaktapur in the eastern Secondary School (July 30, 2006)
part of Kathmandu, Nepal.

As part of our CSR activities, we have been operating the Mikage
Library (whereby book coupons are donated to elementary andjunior high schools in Shunan City, Yamaguchi Prefecture, where
our company is registered). The Mikage Library celebrated its 30th
anniversary in February 2007. The total amount of donations overthe past 30 years stands at 148,300,000 yen.
In April 2007, we organized the “Denjiro Yonemura Science Show”(at the Shunan City Culture Hall) as commemorative event for the
30th Anniversary. We hoped that many children would experience
the “fun,” “wonder,” and “pleasure” of science, begin to take aninterest in this subject, and perhaps even work in the chemicalindustry in the future. We invited elementary school children andtheir parents living in Shunan City (3,340 persons in total.)
At the “Denjiro Yonemura Science Show” (held twice a daywith morning and afternoon sessions), a variety of experiments
were conducted, including paper boomerangs and air guns madeof large paper boxes with a hole in one side. The hall was filledwith the loud cheering of the children.

Every year, we organize “local RC dialogues” where we
explain to local residents about our RC activities. In fiscal
2006, our “Local RC Dialogue in the Eastern Part of
Yamaguchi Prefecture” (Tokuyama Factory) and a “Local
RC Dialogue in Kashima District” (Kashima Factory) wereconducted in cooperation with other members of the
JRCC. Since fiscal 2004, Tokuyama Factory has also held
its own “Local RC Dialogue.” In fiscal 2006, 40 womenfrom local communities (community associations)participated in our RC dialogue, and exchanged opinionswith respect to “Our Efforts in Environmental Conservation
and Process Safety.”◆SEMICON Japan 2006
We exhibited our products at “SEMICON Japan 2006,” aninternational exhibition of semiconductor manufacturing
equipment and materials, held in Makuhari Messe from
December 6 to 8, 2006.
At our company’s booth,polycrystalline silicon for solar
cells, conductive fluid,
negative resist for electron
beam direct writing, monodisperse spherical silica
particles, etc. were
demonstrated using panels.
Many people visited ourbooth, and gave us valuable
Our company’s booth atopinions or made inquiries.
the “SEMICON Japan 2006”

In Harmony with Society

This foundation was established in 1988 with the aim of creating a
new field of science as part of the project for commemorating ourcompany’s 70th anniversary. Each year, the foundation grants
subsidies to young researchers in the study of new materials andconducts various fostering projects, including “International
Exchange Assistance,” “International Symposium Assistance,”
and “Science and Technology Awareness Building Assistance.”
A total of 268 studies have been granted subsidies, with the total
subsidies amounting to 520 million yen (as of March 2007.)

Commemorative Event for the 30th
Anniversary of the Mikage Library

Local RC Dialogues

Exhibition at Environmental Events
Tokuyama’s CSR Activities

We are making various social contributions, including assistance in the promotion of science and technology
and the sound growth of children. We are also strengthening communications with local residents through“local RC dialogues.”

Environmental Communications

16Personnel Management System to
Activate “Human Resources”

Relations with Employees

Efforts to Develop “Human Resources”
Creation of the Skills Education & Training Center

Staff of the Personnel
Dept. at thecommendation
ceremony(February 6, 2007)

This prize was given for corporate effort, from senior
management through to section managers.

● Number of Female Employees Who Took Childcare
Leave(person)
FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

3

13

9

13

3

1. Establishment of a Mental Health Consultation System
Creation of an in-house helpline, and conclusion of contracts withexternal expert physicians
2. Improvement of the Working Environment through the Implementationof Stress Self-Checkups and Work Environment Examinations
Implementation of a simple occupational stress examination(Implementation at Tokuyama Factory on a trial basis in March 2007,
and implementation at all sites and offices planned for fiscal 2008)
3. Establishment of a System to Support Employees’ Return to Work
4. Education, Training, and Provision of Information
5. Support for the Improvement of Internal Communications

Reason for Award
The reason that the company was awarded this prize wasthat the company began to see human resources as“human capital” and commenced efforts for corporate
reform by placing a top priority on “technology and humancapital” through capacity building/development of
employees” immediately after Mr. Shigeaki Nakahara
assumed the office of President.
The Personnel Dept. places priority on education byrank, whereby employees, their supervisors, and the
Personnel Dept. are all involved. A feedback system using
a “review sheet” issued to each employee functions as ameans to develop future leaders at the production site. The
Personnel Dept. “passion” and “strong will” for thedevelopment of human capital were highly appreciated as
an excellent role model for the staff of personnel
management departments of general companies.
(From the website of the Japan Management Association)

Promotion of Internal Recreational Activities

Diversified Work Styles◆ Employment of Physically-Challenged Individuals
The employment rate of physically-challenged persons at ourcompany in fiscal 2005 reached the legal employment rate of
1.8%. Regrettably, the employment rate of physicallychallenged persons at our company fell short of the legal
employment rate in fiscal 2006. We are therefore continuing
efforts to increase the number of physically-challenged
employees.

● Trend of Employment Rates of Physically-Challenged
Individuals(%)
FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

1.48

1.39

1.59

1.80

1.65

We are promoting recreational activities to activate
communications between employees, which tend to have been
reduced through increased IT usage, and thereby create a“cheerful and lively workplace.”
At Tokuyama Factory as a production site, recreational
activities have been traditionally held during lunchtimes. These
recreational activities are led by recreation staff at each
workplace based on an annual plan. Tokyo headquarters,
branches and offices also plan and implement their own activities.

Site Reports

17 Tokuyama Corporation

To help employees maintain a good work-life balance andcontribute to the creation of an environment where children cangrow up healthily, we have prepared an action plan (2005–2007)
under the Law for Measures to Support the Development of the
Next Generation. We are now promoting company-wide efforts.

● Activities under the “Declaration for a Vivid Tokuyama”

Promotion of, and support for, recreational activities by each workplace

Company Awarded the “Human Resource
Development Excellent Firm Prize”
In November 2006, our company was presented with an Encouragement
Award at the “19th Human Resource Development Excellent Firm Prize”
held by the Management Institute, Japan Management Association
The objective of this award is to “commend enterprises or offices withexcellent business performance whose nature has been improved orstrengthened due to intra-company capacity building efforts, and toaccelerate capacity building activities in enterprises and industries.” Forapplying enterprises, document screening and on-site examinations are
conducted by 11 examiners over a period of two months in terms of fiveaspects: strategic importance, systematic importance, effectiveness,
uniqueness, and cultural importance.
Our company’s theme in the application for the prize was “Howeffectively does the HRD system bring Off-JD learning into OJD—toaccelerate changes in persons and organization.” At the commendation
ceremony held in February 2007, the president of the board of
examiners, Professor Mitsuyo Hanada of Keio University, commented:“Tokuyama’s personnel development can really be appreciated in that a
priority is placed strictly on the workplace to support individuals,
coordination is made between different divisions, and the results of offthe-job development are tested and followed up at the workplace.”

Work-Life Balance

Pursuant to the “Guidelines of the Total Health Promotion
Plan (THP)” established by the Ministry of Health, Labour andWelfare, we created the THP Committee to carry out various
health promotion activities. The THP Committee implements avariety of activities, including lifestyle-related disease
prevention and mental health maintenance measures aspriority activities.
Lifestyle-related disease prevention measures include
individual guidance by an industrial physician or medical staff
based on the results of periodic medical examinations, and a“mini health class,” that is run by health management staff at
employees’ workplaces. This mini health class, which
periodically changes its focus themes, has enjoyed great
popularity since its establishment in fiscal 2005.
In the case of mental health maintenance measures, weannounced a “Declaration for a Vivid Tokuyama” in October
2006 to publicize our determination to address the issue ofmental health. We are positively promoting various activities
to protect the mental health of employees as most important
assets for Tokuyama.

In Harmony with the Environment

new technical employees and specially recruited employees(approximately 90 in total.)
In fiscal 2005, we resumed regular employment of highschool graduates. At the same time, we began to implement a“Junior Coaching System” under which coaching is provided toyounger employees. Junior coaches provide young people whohave completed a technical education and training program andhave been assigned to workplaces with advice and guidance on
their working life. Coaches also function as mediators between
young employees and their immediate superiors or seniorcolleagues.

On April 1, 2007, the conventional retirement allowance system(whereby retirement allowance was dependent on the basefigure for retirement allowance appraisal that applies to theretiring person) was changed to a point retirement allowancesystem (retirement allowance paid will be calculated based on
the service contribution of the retiring person).
Simultaneously, the retirement pension system was also revised.
Before the change, 65% of the retirement allowance was thecorporate defined benefit pension. This portion was replaced with acash balance plan (a corporate defined benefit pension plan withinterest rates fluctuating in tandem with yields of long-term
government bonds.) The amount accounting for the remaining 35%of the retirement allowance, which had been paid as a retirement
lump sum, was changed to a defined contribution pension or anadvance payment of retirement pension. At the same time, we willcontinue to enhance the education program that assists individual
employees in properly managing their retirement allowances.
The revision of the conventional retirement pension systemenables our company to maintain its long-term employment
practice, to respond to the diversification of lifestyles and araise in the age when eligible persons can begin to receive
welfare pension, and to make the new retirement pension
system sustainable in the future by stabilizing or reducing theamount of Projected Benefit Obligation (PBO).

Health Promotion under THP

In Harmony with Society

Amid the large-scale retirement of baby-boomers, it isincreasingly important for our company, just as for many others,
to transfer sophisticated skills to the younger generation atworksites. In April 2007, we established the Skills Education &Training Center with the objective of transferring advanced
production skills to the younger generation and to educate new
operators in a short period.
Today’s chemical plants are often highly automated in orderto achieve labor saving and safe operations. Therefore,
opportunities for operators to actually use some types ofequipment are gradually decreasing. Even at industrial highschools, opportunities for students to actually use equipment
are also reducing as many industries are becoming increasingly
IT-based.
At the Skills Education & Training Center, using a newly
constructed training plant, new operators learn about operations
to start or suspend machinery, assembly and disassembly ofmachines, how to handle dangerous situations such as
becoming trapped, objects falling from above, or exposure tohazardous liquids. New operators learn basic operational skills
and master risk avoidance measures through skills training andexperience that they cannot get at a real automated chemicalplant. In the first half of fiscal 2007, we are implementing an
educational program not only for new operators but also for bothTraining in progress at
the Skills Education &Training Center

Revision of Retirement Allowance andPension Systems

Tokuyama’s CSR Activities

We are making efforts to improve the working environment so that all employees will be able to fully utilize theirabilities and enjoy their daily work. In fiscal 2006, efforts were made to develop “human resources” through thecreation of a Skills Education & Training Center and improve the mental and physical soundness of our employees.

Promotion of Total Health
Promotion Plan (THP)◆ Retired Employees Reemployment Scheme
To respond to the gradual postponement of the pensionable
age for welfare benefits for the elderly and to help transfer theskills of retiring baby boomers to younger generations, wecreated a retired employees reemployment scheme in fiscal
2001, ahead of many other companies in our industry.
Although this scheme was temporarily suspended due to poor
financial performance, we restarted it in fiscal 2005. In fiscal
2006, 41 persons applied and 36 persons were reemployed invarious positions.

As part of recreational activities, Tokuyama Factory organizes a relay roadrace among workplaces at the end of each fiscal year. There are legs by
age-group, and legs for divisional managers and section managers. Thisrace really heats up! (March 16, 2007)

Corporate Social Responsibility Report 200718

Process Safety and Disaster Prevention/
Occupational Health and Safety

Self-Administrated Safety Management

Commitment to Safety andDisaster Prevention
Comprehensive Safety and Disaster Prevention Activities

Safety Audits

Expansion of the Safety Management System
Each facility has been implementing its own Occupational
Health and Safety Management System since fiscal 2003. In
fiscal 2005, Tokuyama Factory expanded this system into a full
Safety Management System by including process safety.
Tokuyama Factory conducts risk assessment not only for work
operations but also for processing and plant maintenance in aplanned manner, and makes continuous improvements to thissystem. In fiscal 2006, we invested approximately 100 million
yen in improving and enhancing occupational health andsafety activities.

● Accident Severity Rates
0.25
(%)

Total industries
Chemical industry
Tokuyama

0.2

0.15
0.1

0.05
0
97

Safety and environmental
audit (Kashima Factory,
November 13, 2006)

98

99

00

01

02

03

04

05

06

(Fiscal year)
Accident Severity Rate refers to the number of work days lost in 1000 cumulative
work hours and represents the severity of industrial accidents.

We are promoting activities to ensure “no-accident and nodisaster” operations in close coordination with contractors,
such as safety meetings for information sharing attended by
employees of Tokuyama and its contractors, management
improvements through safety patrols, safety education andseminars for improvement of knowledge of various themes
and drills for the improvement of skills.

Maintaining a Comfortable Work Environment
Aiming to prevent health hazards and create pleasant working
conditions, we continue to monitor the workplace environment
where specified chemicals, organic solvents etc. are handled
and continue to improve the work procedures and equipment
involved. Thanks to these efforts, all worksites of Tokuyama
Factory are rated as Control Category I.* Tokuyama Factory
has actually established even more stringent voluntarystandards to improve safety.
Although our environmental measurement data reveal thatasbestos-sprayed materials are not immediately dangerous topersons, asbestos removal work was completed in fiscal
2006.

5S Model Workplace Certification System
Tokuyama Factory has adopted a 5S Model Workplace
Certification System since fiscal 1991. Under the system, each
workplace files an application for certification. If a workplacesatisfies certain conditions, the workplace will be certified as a
“5S model workplace.” Every year, between 10 and 20
workplaces file applications for certification. As of the end of
March 2007, 202 workplaces have been certified as “5S model
workplaces.” Each of these workplaces has passed a renewal
inspection. Through these 5S activities, we aim to maintainsafe workplaces and enhance health and safety awarenessamong our employees.

Placement of Automated External Defibrillator (AED)
If the heart of an employee or anyone else stops beating for
any reason inside one of our plants, emergency treatment
must be provided as quickly as possible. In the past, ourcompany has provided opportunities for practical training ofcardio-pulmonary resuscitation (CPR). The use of AEDs* waslimited to medical personnel. Recently, however, ordinary staff
have been allowed to use AEDs. In fiscal 2006, we purchased
six AEDs and placed them at relevant workplace locations. In
preparation for an emergency, we provide employees with anopportunity to receive training in CPR and on the operation of
AEDs.

● Rates of Lost Work Time Injuries(%)

Total industries
Chemical industry
Tokuyama

1
Annual ceremony andcomprehensive disaster drill(Tokuyama Factory,
January 19, 2007)

Emergency vehicle that acts
as headquarters’ command
car in the event of an
emergency(Tokuyama Factory)

19 Tokuyama Corporation*

Safety and Environmental Assessment
Before any facility is newly installed, expanded or refurbished,
the Chief in Charge of Safety assembles internal experts, andthese experts conduct an assessment at each of the following
stages: planning, design, and pre-operation. The safety ofprocesses, facilities, and operations are ensured by these priorassessments of potential risks, thereby helping to prevent an
accident or disaster.

5S activities represent “tidiness,” “orderliness,” “cleaning,” “cleanliness,” and “making a habit of these actions.”

Site Reports

Training inemergency
treatment using
an AED to enable
many more
employees toutilize the AED inemergency(Tokuyama
Factory, January
19, 2007)

2

1.5

In Harmony with the Environment

We conduct inspections of all our facilities to identify the statusof Process Safety and Disaster Prevention/Occupational Healthand Safety. If the audit identifies any incidents ofnonconformance, these are pointed out and necessary
guidance is given for corrective action. The results of audits are
fed back to each division for improvements, and are reported
to the Safety Measures Committee and reflected in the action
policy for the following fiscal year.

Commitment to Occupational Healthand Safety

Safety Education and Training in Close
Coordination with Contractors

In Harmony with Society

Tokuyama Factory, which is our main production site, is located in
the vicinity of residential areas in Shunan City. Based on our
determination that safe operations are an absolute requirement, weare making exhaustive efforts to secure the safety of all our facilities
and operations. For example, we continue traditional activities,
including safety patrols, hazard prediction activities, avoidance of
dangerous carelessness, 5S activities,* and verbal safety checks(pointing at the item to be checked and voicing its name). Recently,
we are actively “securing safety in advance” by identifying potential
sources of danger and reducing and eliminating the risks involved.
In preparation for an emergency, in fiscal 2006 we enhanced
disaster prevention equipment and materials, and introduced an
emergency vehicle with surveillance cameras for gathering
information, which can also be used to transport equipment andmaterials. To test whether various disaster prevention equipment
and organizations can fully demonstrate their functions, ourcompany’s Self-Defense Disaster Prevention Unit conducts a rangeof drills. In addition, a comprehensive disaster drill is conducted incooperation with group companies, neighboring enterprises, andrelated ministries and agencies based on a simulation of a largescale accident or disaster.
These drills are open to, and observed by local residents sothat they can better understand and be reassured about theextensive safety activities of Tokuyama Factory.

For 12 facilities, Tokuyama Factory has obtained certificationsof “Certified Safety Inspector” and “Certified Completion
Inspector” in accordance with the High-Pressure Gas Safety
Law and obtained licenses for continuous operation of boilers,
etc. Tokuyama Factory is determined to comply with theconditions of these certifications (and laws, regulations, andguidance) and to prevent the occurrence of accidents ordisasters by conducting the “PDCA” cycle and by further
improving safety awareness of all persons engaged based on
the principles of self-administered safety management andself-responsibility.
We are committed to stable plant operations by promoting
the self-administered safety management of our operational
management division and by reinforcing the specialized
maintenance skills of our facilities management division.

In 2005, Tokuyama Factory’s total Zero-Accident hours set a
new record of 12.4 million hours, exceeding the Ministry of
Health, Labour and Welfare’s record of 12.2 million Category III
Zero-Accident hours. To our regret, a “disaster by which
operations are suspended for one day or longer” has occurredsince then. All employees of Tokuyama Factory have begun
efforts to achieve a new record that exceeds the record of 12.4
million hours.
Kashima Factory has continued zero-accident and zerodisaster operations for the past 21 years since its start-up.
Tsukuba Research Laboratory has also continued zerodisaster operations for the 17 years since its foundation.
In fiscal 2006, we invested approximately 400 million yen
on process safety, including disaster prevention equipment
and materials.

Tokuyama’s CSR Activities

We aim at continuing operations without accidents or disasters based on the concepts that safe operations
are a fundamental factor of business and that harmonious coexistence with local communities cannot berealized without the maintenance of safety. All manufacturing sites and offices are making efforts to maintainoccupational health and safety and a comfortable work environment.

New Zero-Accident Record

0.5

0
97

98

99

00

01

02

03

04

05

06

(Fiscal year)
Rate of Lost Work Time Injuries refers to the number of workers away from work
due to workplace injuries in 1 million cumulative work hours and represents thefrequency of industrial accidents.
Source: “Survey on Industrial Accidents” of the Ministry of Health, Labour and Welfare

Joint use of CPR and AED
is said to be most effective
if the heart of an employee
or other person stops
beating for any reason.

* Control Category I refers to a condition in which an atmospheric concentration of hazardous substances is below the control level in most part (over 95%) of the unit work area.
There are three classes of Control Category: Category I, II and III, of which I is the most desirable.
* An AED is a medical device used to give an electric shock to the heart of a person who has suffered ventricular fibrillation to help it to operate normally again.

Corporate Social Responsibility Report 200720

In Harmony with
the Environment

Environmental protection activities are part ofour important CSR work. Tokuyama promotes“environmental management” in which apriority is placed on environmental protection
in all processes of business operations.

Environmental Accounting

We are making an effort to reduce environmental impacts by accurately assessing and managing the input
and output of our manufacturing operations. In fiscal 2006, we continued to focus on energy saving. As aresult, unit energy consumption in fiscal 2006 was reduced by 19.1% compared with the level of fiscal 1990
(targeted reduction in fiscal 2010 compared with the 1990 level is 17.5%.)

Since fiscal 2000, we have adopted the Environmental Accounting System to assess the total cost of environmental
conservation activities and to utilize the data for effective environmental investment. The amount of environmental
investment in fiscal 2006 decreased by approximately 1.6 billion yen as compared with the previous fiscal year,
while total expenditure and economic benefits in fiscal 2006 remained almost unchanged from fiscal 2005.

Waste andby-products

1,910

Fuel

2,110

OUTPUT(54,200,000GJ)

Raw materials

7,510

Industrial water

45,900

About 70% of environmental investment is used for pollution
prevention, and about 10% each for conservation of the
global environment, resource recycling, and social activities.
In fiscal 2006, our main environmental investment included
the renewal of electric precipitators and NOx removal
equipment and the installation of waste recycling equipment.

Production
activities

Carbon dioxide (CO2)7,090

Waste materials(incinerated/landfill)

21

Environmental loadmaterials

15

Industrial wastewater

23,000Wastewater, such as
cooling water

Economic Benefits

300(JPY 100 million)

272

282

246

250

218

228

In Harmony with Society

INPUT● Trends of Accumulated Environmental Investments(cumulative since FY 1990)

Environmental Conservation Costs

Material Flow Balance in Our Production Activities

Tokuyama’s CSR Activities

Results of Fiscal 2006 Activities

200

150

Economic benefits are evaluated based only on actual
revenue figures, where any projected benefits are excluded,in areas of energy conservation, sales of relevant materials
and reutilization of waste materials, which helps minimize
processing for disposal and reduce consumption of raw
materials and fuel. In fiscal 2006, economic benefits in theamount of about 1.3 billion yen were generated. This amountremains almost unchanged from the previous year’s level.

100

50

0

02

03

05

06 (Fiscal year)

Amount Invested(JPY million)

Total Expenditure(JPY million)

04

Major Expenditure Items

Pollution
prevention

Renewal of electric precipitators and NOx removal equipment,
and construction of wastewater treatment facility

657

3,364

Global environment
conservation

Installation of waste recycling equipment

123

953

Resource recycling

Improvement of waste soil disposal facility

82

1,054

0

0

Installation of environmental analyzer

47

293

0

30

Costs of social activities

Development of technology to reduce the emission of
PRTR substances
Tree-planting at factories and preparation of
the Responsible Care Report

100

53

Costs of environmental damage

Levies and management of disused mines

0

193

1,009

5,940

Factorysite costs

Upstream/downstream costs

Products
7,190(unit: 1,000 tons)(All figures are for fiscal 2006 and relate toTokuyama Corporation only.)

Performance of Environmental Preservation Measures in
Fiscal 2006 (Tokuyama Factory)
Segment
Air

Reduction ofenvironmental
impactsBasefiscal year

Items

Water

PRTR

FY 2006 target

FY 2006
performance

Evaluation* FY 2007 target

Research and development costs

Total

Soot and Dust

2004

–11%

–2%

–11%

COD

2004

+7% or less

+5%+5% or less

N

2004

±0%

+16%

±0%

P

2004

±0%

–50%

±0%

PRTR
Hazardous air pollutants(vinyl chloride monomer (VCM), EDC)

2004

–18%

–4%

–15%

Benefits from energy conservation

—

143

2004

–35%

–35%

–35%

Revenues from salable materials

97

183

Benefits from lower waste materials
processing costs
Benefits from lower raw material and fuelconsumption realized by waste reutilization

232

594

234

428

Global environment
conservation

Energy conservation

Unit energy
consumption index

1990

Improved
by 15.5%

Improved
by 19.1%

Improved by 17.5%(fiscal 2010)

Reducedwaste materials

Recycling

Waste material effective
utilization rate—

94.4% or higher

94.4%

94.0% or higher

Zero emission

Zero emission rate—

99.8% or higher

99.9%

99.8% or higher*Evaluation (21 Tokuyama Corporation

Costs of management activities: almost achieved,: unsatisfactory)

Site Reports

Classification

In Harmony with the Environment● Environmental Conservation Costs● Economic Benefits
Item

Total

Material Benefits Economic Benefits(1,000 tons)(JPY million)

Remarks
Benefits from lower electricity and steam
consumptions
Revenues from selling metal scraps, waste oils,
waste acids and alkalis
Processing costs reduced by reutilization ofwaste materials

1,348* Costs were compiled according to “Environmental Accounting Guideline ’2002” of the Ministry of the Environment.

*Data is collected from all Tokuyama facilities and offices.

Corporate Social Responsibility Report 200722

Reducing and Recycling Waste Materials

Corporate citizens have an important obligation to contribute to the prevention of global warming. We arepromoting efforts to reduce CO2 emissions mainly through energy saving activities.

In fiscal 2006, we achieved an effective utilization rate of waste materials of 94.3% and a zero emission rate of
99.9% due to intensified efforts to reduce waste and enhance recycling activities. Tokuyama Factory wascertified as an accredited enterprise under the “System of Evaluation of Performances of Industrial Waste
Disposal Companies.”

–6
–8
–10
–12

–13.4

–14

–16.7

–16

–16.9

–18
–20

90

02

03

04

–18.1
05

–17.5(Target)
–19.1
06

10
(Fiscal year)● Energy Consumption
60,0001,800(1,000 GJ)

Group companies

Tokuyama alone

1,700

2,800

3,800

3,400

50,00040,00053,100 53,900 54,200
50,000 51,900

30,000● Breakdown Graph of Industrial Waste Handling in
Fiscal 2006

38,10010,000
0

90

02

03

04

05

06
(Fiscal year)

Ceremony forthe introduction ofa hydrogen fuel cellsystem(March 27, 2007)

Zero emission
rate

94.3%

99.9%

● CO2 Emissions

Incineration

Fuel sourced

Raw material sourced

8,000(1,000 tons)

100
6,000

4,000

2,000
Piping for households

Both Tokuyama and its group companies have contributed
to a reduction in CO2 emissions in the consumer andtransportation sectors, in which CO2 emissions havesignificantly increased, through the sales of particular
products, including a plastic window sash called the“Shanon Window” for energy saving houses, and silica forenergy saving tires. Furthermore, we are developing
technologies for the prevention of global warming, including
the construction of a demonstration plant for polycrystalline
silicon for solar cells and the development of electrolyte
membranes for fuel cells.

0

2,150

90
2,220

170
2,290

20.0

Group companies

200
2,350

230

Outsiderecycling

2,130

17.1
4.8 %

1,960
4,400

4,640

4,800

02

03

04

4,910

Landfills

5.5%

05

Disposal to landfill(inside company)
0 ton

Waste
generated

0.1%

361,000 tons

Total waste
generation

361

4,960

(Fiscal year)* Figures of group companies are included in and after fiscal 2001. As for Tokuyama Plant
of Sun Tox Co., Ltd., their actual figures have been included in the Tokuyama data until
fiscal 2004 and included in the group company data since fiscal 2005.

Disposal to landfill(outside company)
500 tons

Waste
discharged
outsideIncineration(outside company)
1,100 tons

18,800 ton

Recycled
internally

Recycled
outside323,000 tons

17,100 tons

→Outside company● Changes in Quantity of Landfill Disposal, Effective
Utilization Rate for Waste, etc.

Inside recycling(Raw materials and fuels)

06

Incineration(inside company)
18,900 tons

Inside company←(Unit: 1,000 tons)

50

99.7

99.8

99.8

99.8

99.9

94.8

94.3

93.9

94.3

100

323
89.6%

40

Efforts at Our Offices
We are participating in the “Cool Biz” campaign that started
as a national movement in the summer of 2005. In addition toconventional energy saving activities at our offices, we
encourage our employees to work in light clothing and thetemperature of air-conditioned rooms is strictly maintainedat specified levels. Thanks to these efforts, our Tokyo
headquarters could reduce power consumption in the fourmonths from June to September 2006 by 6% from the levelof the corresponding period in the previous fiscal year.

● Flowchart of Disposal of Waste Materials in Fiscal 2006

0.5

3,350
90

Tokuyama and its group companies have a total of 81
transformers, capacitors, etc. containing PCBs.* Since thisequipment is no longer in use, it is properly stored andmanaged in accordance with the requirements of the Special
Measures Law for the Proper Treatment of PolychlorinatedBiphenyl Waste.
Parties concerned are required to complete the disposalof PCB waste by July 2016 under the applicable law. Basedon a plan made by the central government, wide-area PCB
waste disposal facilities are being constructed, and put into
operation one after another. In December 2005, we placed anadvance order for PCB disposal with Japan Environmental
Safety Corporation by utilizing its early registration system. In
the future, we will appropriately dispose of all PCB-containing
waste according to a schedule agreed with the relevant widearea PCB waste disposal facility.

Effective utilization rate (%) =Recycled Volume(inside & outside)
Total Waste Generated

Zero emission rate (%) =1–

Disposal to Landfill(inside & outside)
Total Waste Generated

✕100

36.26

95

30

90

20

85

82.4
10

✕100

80

76.9
0

*

93.9

PCB is an abbreviation for Polychlorinated Biphenyl. This is a chlorinated organic compound and produces dioxins when burnt 90
at low temperatures. It is chemically stable, heat-resistant, chemical-resistant and provides excellent electrical characteristics
such as high insulation performance. It had many applications in electrical equipment, such as utility transformers, capacitors,
etc., until 1972 when its production and use were banned due to the fact that it is harmful to humans. The law requires thattransformers, capacitors and the like, that are already in the market be brought to safe storage at appropriate business units.

1.21

0.69

0.63

0.68

02

03

04

05

0.52

Site Reports

Contribution to Global Warming
Prevention Measures of Consumer
and Transportation Sectors

23 Tokuyama Corporation

Effective
utilization rate

Management and Disposalof PCB Waste

In Harmony with the Environment

20,000Waste materials generated from our facilities totaled 360,000
tons in fiscal 2006. We have actively promoted the recycling ofwaste materials generated both inside and outside ourcompany, such as the reutilization of waste materials as raw
materials and fuel for producing cement at Tokuyama Factory.
In the past, wood waste such as packaging materials andpallets was simply incinerated. Since fiscal 2006, however,these waste materials have been crushed and used as fuel for
power generation. In addition, an effort was made to reduceand recycle the waste that had been used for landfills. As thequantity of waste materials used as raw materials for cement
increased, the effective utilization rate of waste materials roseto 94.3%, a slight increase over the previous year.
Our efforts to reduce the quantity of landfill waste and to
maximize recycling of such waste resulted in the achievementof a 99.9% zero emission rate.
In November 2006, Tokuyama Factory was certified by
Yamaguchi Prefecture as an accredited enterprise under the
prefecture’s “System of Evaluation of Performances ofIndustrial Waste Disposal Companies.” This is because ourZero emission rate (%)

0

Effective utilization rate (%)

0

In Harmony with Society

We use a large amount of energy in the processes ofmanufacturing our core products, including caustic soda andcement. CO2 is one of the greenhouse gases mainly
generated by combusting fossil fuels. In the process of
producing cement, CO2 is also generated by thedecarboxylation of limestone as a raw material. Based on theunderstanding that it is an important task for our company tocontribute to the prevention of global warming, we arepromoting efforts to reduce CO2 emissions, mainly throughenergy saving activities.
Tokuyama Factory, which accounts for more than 99% of
the total energy consumption of our company, reduced unit
energy consumption in fiscal 2006 by 19.1% as comparedwith the level of fiscal 1990, due to efficiency improvements
as a result of the renewal of the chloralkali plant in fiscal
2006.
In the future, we will make efforts to increase the quantityof waste tires and wood biomass used at the No.7 unit of ourprivate power generation plant—renewal of this unit will becompleted in fiscal 2007—and other units.
We are cooperating with Yamaguchi Prefecture in their“Initiative on the Promotion of Hydrogen Frontier
Yamaguchi.” In the Hydrogen Town Model Project, ourcompany supplies hydrogen direct to households via piping.

(Reduction rate %)–2–4company’s positive efforts to treat and recycle wastematerials in an appropriate manner were highly appreciatedby Yamaguchi Prefecture.

Waste Management

Landfills (1,000 tons)

Promotion of Energy Saving Efforts● Unit Energy Consumption Index (Tokuyama Factory)

Tokuyama’s CSR Activities

Prevention of Global Warming

0
06 (Fiscal year)

Corporate Social Responsibility Report 200724

Development of Environmentally Friendly Products
and Environmental Technologies“Hydrocarbon-Based Electrolyte
Membranes” for Fuel Cells
Broad Lineup of Products, Including an Anion TypeThe prevention of global warming has become an urgent task
for the human race. Solar cells for photovoltaic generation
are manufactured in many countries to effectively utilize cleansolar energy in an effort to protect the global environment. In
2006, solar cells with a total generation capacity of 2,521 MW
were manufactured (please refer to “PV News”; March/April
2007 issue.) This is 6.3 times larger than the total generation
capacity of 400 MW of solar cells manufactured in 2001.
Approximately 90% of solar cells are manufactured using
polycrystalline silicon. We are contributing to efforts to prevent
global warming through supplying polycrystalline silicon foruse as a raw material in the manufacture of solar cells.
We are scheduled to increase the annual production ofpolycrystalline silicon for solar cells by 500 tons by 2009.
To further contribute to the prevention of global warming
through the increased usage of solar cells, it will be
indispensable to reduce the production costs ofpolycrystalline silicon. At present, we are promoting
demonstration tests using a plant (with a production capacityof 200 tons a year) using the VLD method, which can, in
principle, manufacture polycrystalline silicon more rapidly
and efficiently than other methods.

Verification
plant tomanufacture
polycrystalline
silicon forsolar cells

Undiluted liquid
developers

Dilutionadjustment
equipment

Photolithography
process
Used liquid
developers

Tokuyama(dedicated plant)
Used liquid
developers

Recyclingequipment

Sharp Corporation’s
Mie Plant

Ion Exchange Membranes (ASTOM Corporation)
Prevention of Environmental Pollution
through Clean Technology

Material Recycling of Used Liquid Developers

Eco-car of Offenburg
Technical College (Germany),
which uses fuel cell thatuses our company’s aniontype hydrocarbon-based
electrolyte membranes

25 Tokuyama Corporation* Fuel cell: A chemical battery to generate electricity via a chemical reaction between hydrogen inside the fuel cell and oxygen in the air incontrast with electrolysis of water.
* DMFCs: Direct methanol fuel cell that converts fuel methanol into hydrogen using a catalytic electrode in the fuel cell.
* Electrolyte membrane: Membrane to selectively conductions.

“Shanon Window”(Shanon Corporation
aims at establishinga material recycling
system for window
sashes in the future)● Shanon’s System to Recycle Sash Offcuts

Manufacturing of window frames

Closed System for Liquid Developers
Tokuyama and Sharp Corporation completed a process todevelop a “material-recycling technology for used liquid
developers at liquid crystal plants.” In April 2005, the commercial
operation of this closed system for liquid developers (collection,
recovery, and reuse) commenced, involving Sharp Corporation’s
Mie plant (in Taki-gun, Mie Prefecture) and our own dedicatedplant. Our dedicated plant speedily began operations on acommercial basis and continued operations satisfactorily for two
years. This is because we had conducted practical tests at a pilot
plant over a period of about three years to identify any problems

Crosssectionalview ofwindowsashesSite Reports

ASTOM Corporation, a Tokuyama Group company,
contributes to the solution of environmental problems with its
separation technology based on ion exchange membranes,“NEOSEPTA,” and high performance dialyzer, “ACILYZER.”
Ion exchange membranes enable selective permeation of
positive and negative ions dissociated in solutions.
Traditionally, ion exchange membranes have been used forsalt production, food, fresh water generation,
pharmaceuticals and the treatment of various waste liquids.
Recently, ion exchange membranes have been used toseparate and collect acid and alkaline in waste liquids, treat
leachate at waste disposal facilities and eliminate nitrate
nitrogen from groundwater as part of efforts to prevent theenvironmental pollution. Thus, ion exchange membranes asclean technology are attracting the attention of theinternational community. As a bio-refinery technology that
contributes to the creation of a recycle-oriented society, ion
exchange membranes will be utilized for separating andrefining organic acid used for biodegradable plastics andcleaning animal waste to make manure.

Shanon Corporation, one of our group companies,
manufactures and sells plastic window sashes named“Shanon Window,” which provide an excellent airtight quality,
heat and sound insulation, and prevention of condensation.
To help prevent global warming, all companies andcitizens are required to reduce greenhouse gas emissions.
Although reductions are being steadily achieved in theindustrial sector, household emissions are on the rise andneed to be addressed through more effective measures.
In this connection, plastic window sashes are receiving
attention due to their ability to conserve energy. A provisional
calculation made by the Plastic Window Sash Promotional
Committee indicates a significant improvement in insulation
efficiency, or some 40% reduction in terms of CO2 emissions,can be achieved per house if single-glazed aluminum
window sashes were all replaced with double-glazed plastic
window sashes fitted with a low emission glass. The
government of Japan actively encourages the diffusion of
double-glazed plastic window sashes. Shanon’s plastic
window sashes are a promising energy saving measure thatwill certainly contribute to the prevention of global warmingin the future.
Shanon Corporation has already begun to manufacture
window sashes by recycling discarded sash offcuts
generated at the manufacturing plant with the aim ofestablishing a material recycling system for window sashes
in the future.

In Harmony with the Environment“Hydrocarbonbased
electrolyte
membranes”
for fuel cells

Contribution to the Prevention of
Global Warming through Solar Cells● Closed System for Liquid Developers at Sharp
Corporation’s Mie Plant(Shanon Corporation)

High-Performance Sashes Contributeto Household Energy Conservation

In Harmony with Society

We are continuing efforts to develop “hydrocarbon-based
electrolyte membranes”* for direct methanol fuel cells*(DMFCs*) and for anionic fuel cells. We have alreadyestablished a system to supply these products in various
specifications to meet the diverse needs of users in theemerging DMFC market for portable terminals, including ahigh-output type and a highly concentrated methanol fueltype.
In 2005, we began to supply samples of anion-typehydrocarbon-based electrolyte membranes, developed byus as a world first. Anionic fuels cells have the advantagethat catalysts other than platinum and various fuels can beused. Eco-cars that have fitted fuel cell that uses ourcompany’s anion-type membranes are now being
developed. Thus, these fuel cells are increasingly regarded
as next generation fuel cells.

Polycrystalline Silicon for Solar Cells

Plastic Window Sash, “Shanon Window”

Tokuyama’s CSR Activities

In fiscal 2006, Tokuyama and its group companies conducted efforts to develop a variety of environment-conscious
products and recycling technologies, including the development of equipment to mass-produce polycrystalline silicon forsolar cells, demand for which has been increasing sharply, and the operation of a verification plant for production.

from various viewpoints and then taken appropriate
countermeasures.
From now on, we will make our utmost efforts to further
improve this technology and reduce costs so that the closed
system may be effectively utilized not only by crystal
manufacturers but also by other users of liquid developers. We
will continue efforts to develop technologies to manufacture anddispose of liquid developers that generate less environmental
impact throughout the supply chain (manufacture, use bycustomers, and disposal of used developers.)

PVC resinHighperformance
dialyzer“ACILYZER”
using ionexchangemembranes

Extrusion
Recycled
PVC resin

Assemblyof window
sashesSashoffcuts
Reprocessing

Collection

Corporate Social Responsibility Report 200726

Site Reports

Reduction of Air and Water Pollutants● Release and Transfer of PRTR Substances Sorted
by Item (FY 2006)*(in tons** except dioxins, in mg-TEQ)

We have long taken various measures to reduce air and water pollutants. In fiscal 2006, we reduced theemission of SOx and hazardous air pollutants, and reduced COD.

Location: 1-1, Mikage-cho, Shunan City,
Yamaguchi Prefecture
Employees: 1,583
Area of Factory: 1,650,000 m2 (total area)

Cresol67

Seiichi Shiraga

1,2-dichloroethane

116
77* For details, please refer to pages 5–6.

Release of Factory Wastewaterand Water Pollutants

Release of Air Pollutants● Changes in Emissions of SOx, NOx, and Soot/Dust
400

300

275
235

6,000
4,000

2,890

2,010

2,000

254

272

250

267

259

200

1,880 1,720

150

2,310 1,940

100
0

0

90

02

03

04

05

06 (Fiscal year)

Release of Substances Regulatedby the PRTR Law
In fiscal 2006, we submitted a report for 25 substances
under the PRTR* Law. Although we took measures toreduce the discharge of chloroethylene in fiscal 2006, thetotal discharge of these substances slightly increased as
the operating rate of the facilities remained high.

● Release of Substances Regulated by the PRTR Law
250(Tons)

237
Group companies

Tokuyama alone

200

120
90

100

98 110

100
68

50
0

100
60

100
65

02

03

04

05

06

134

30

157

145

135

10

0

21.2

19.8

02

Item

2004 Fiscal year

Waste incinerators, waste oil incinerators and part of thevinyl chloride monomer (VCM) production facilities are
regulated by the Special Measures Law forCountermeasures against Dioxins. The measured
concentrations of dioxin in emission gas and wastewater
are well below regulatory standards.

*

-

-

94

152
95

4

5

05

06 (Fiscal year)(kg/day)2005 Fiscal year

2006 Fiscal year

Chloroethylene (vinyl chloride)
1,2-dichloroethane
Chloroform

3

11

11

2
5

02

03

04

0.0
0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0
0.0
0.0

0.0
0.0
0.0

0.0

0.0

0.0

0.0
0.0
0.0
0.0

(0.4) (0.0) (52.6)
0.0

0.0
0.0
0.0
(0.0)
350.7

63.3

more than 1 ton per year and dioxins.

** While the PRTR Law says the amount of release shall be given in kilograms to two
significant figures, the amount in this report is given in tons, rounded to the nearest
1/10 ton (dioxins in mg-TEQ).

Kashima Factory
Location: 26 Sunayama, Kamisu City, Ibaraki Prefecture
Employees: 77
Kashima Factory
General Manager
Area of Factory: 101,000 m2● Performance Data (Total of Three Companies)
Unit

2002

2003

2004

2005

Industrial water
consumption

1,000 ton

106

96

91

112

110

Wastewater

1,000 ton

124

109

107

126

125
5

2006

COD

ton

5

4

4

5

■ Main Products

PRTR substances

ton

6

3

3

2

3

Tokuyama’s Kashima Factory
Bulk pharmaceuticals (x-ray contrast media, stomach and duodenal ulcer treatment
drugs,) optical materials (plastic lens monomers, light modulating materials, hardcoating liquid), raw materials for electronic materials, and metal washing solutions

Waste generation

ton

609

614

749

719

779

Final disposal of waste

ton

39

43

29

15

34

Osamu Iwamoto

Kashima Plant of Tokuyama Dental Corporation
Dental materials (restorative materials, adhesives, denture relining materials,
impression materials, dental stone, implant materials)
Kashima Works of A&T Corporation
Reagents for clinical analysis (electrolyte analysis reagents, glucose analysis reagents)● Tokuyama Dental has changed its processing solutions
from dichloromethane to aqueous solvent for certain
products. The company is continuing efforts to reduce therelease of dichloromethane by changing processing
solutions for other products.
● Kashima Factory began material recycling for waste
acetone and toluene in fiscal 2005. In fiscal 2006, theeffective utilization rate of waste increased by 5%, to 71%.

46

46

45

51

53

CO2 emissions

ton

2,110

2,170

2,180

2,130

2,170

Complaints

cases

0

0

0

0

0

Energy consumption 1,000 GJ(fossil fuel sourced)● Release and Transfer of PRTR Substances Sorted
by Item (FY 2006)*(Total of Three Companies)(in tons**)
Name of substanceDichloromethane (Methylene chloride)
Toluene
Chloroform
Acetonitrile
Methyl methacrylate
N,N-dimethylformamide
1,4-dioxane

2,3-epoxypropyl methacrylate

17

2.4
0.0
0.0

* Scope of survey includes PRTR-law specified substances with an amount handled of

11

8

0.6
0.2
0.0

33.7 29.6

2-vinylpyridine

9

0.0
0.0

0.6
0.2
0.0

Total

49
33

2.0
0.8

(52.3)

Nickel compounds

Ethylene glycol

19

0.0
0.0
0.0
0.0
0.0

179

4,960

5

0.0
0.0
0.0
0.0

0.8

Dioxins

150

3

4.4 194.5
0.0
3.2
0.0
2.2

480

Energy consumption 1,000 GJ 49,900 51,800 53,000 53,900 54,100
CO2 emissions
1,000 tons
4,390 4,640
4,910
Complaints

0.0
0.0
0.0

360

200

4,800

0.0
8.3
5.6 153.5

283
304

349

cases

Dichloromethane (Methylene chloride)
Chloroform

0.0
0.0

Hydrazine
Hydrogen fluoride and its watersoluble salt
Boron and its compounds

660(fossil fuel sourced)

Water soluble zinc compound

0.0
0.2

0.0 27.4
0.0 8.6

0.0 27.4
8.6 0.0
8.3 0.0
5.6 0.0
4.4 0.0
3.2 0.0
0.0 2.2
2.0 0.0

0.0
0.0
0.0
0.0

395

0

Legallyspecified
substance
number

145
227
95
12
320
172
113
43
256
316

Amount released

AmountTo
atmosphere

To public
water
systems

1.4
0.9
0.3

0.0
0.0
0.0

0.0
0.0
0.0

1.4
0.9
0.3

6.0
4.4
1.1

0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0

0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0

1.7
0.0
18.8
0.1

0.0
0.0

0.0
0.0

0.0
0.0

0.0
0.0

0.0
0.0
0.0
0.0

0.2
0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0
0.0

To soils Subtotal transferred

0.0
0.0

1.3

Formaldehyde

310

21

a-methylstyrene

335

12

8

9

9

Total
33.6
2.7 0.0 0.0
2.7* Scope of survey includes PRTR-law specified substances with an amount handled of

25

3 1

3 1

05

06

* PRTR Pollutant Releases and Transfer Register, is a system for the compilation and publication of data concerning harmful chemical substances with respect to
27 Tokuyama Corporation

tons

Nitrogen

141

610

103

95

110

43
232
253

131

383

100

0

13

Ethylene glycol

129

650

● Hazardous Air Pollutants Release

10

148

tons

COD

367

Of the 12 substances left to corporate self-management under the
Air Pollution Control Law, four substances, including
chloroethylene (vinyl chloride), are produced by our company.
Regarding these four substances, we have established a voluntary
program to reduce the amount of discharge, and in practical terms
discharge of these substances has been decreasing gradually.

28

299

2,2’-azobisisobutyronitrile

1,170

Hazardous Air Pollutants Release20

Benzene

tons

11

22

22.8

1,000 tons

11

7

21.3

Final disposal of waste

21

40

21.1

Waste generation

270

10

19.6

63

Phosphorus

53

21.0

3.9

300

47

mil. tons

57

Dichloromethane (Methylene chloride)

Dioxin Measures

Wastewater

4.0

260

60

112

10,400 10,900 11,500 11,400 12,300

66

260

80

Carbon tetrachloride

tons

7.8

5,280

(Fiscal year)

1,2-epoxypropane (Propylene oxide)

NOx

95

Nitrogen

21

267
45.8

1,940

-

● Release of Nitrogen and Phosphorus
Legal regulation
value

259
49.5

2006

2,310

23.0

21.4

04

272
50.1

2005

1,720

84

50

03

254
47.1

2004

1,880

-

14.3
90

235
48.1

2003

2,010

tons

100

21.1

tons
mil. tons

2002

tons

tons

153

20

(Tons)

98

180

Soot/dust
Industrial water
consumption

Unit
SOx

AmountTo soils Subtotal transferred

their sources, the amount of their environmental emissions and the amount released from factory in waste materials.
COD is the abbreviation for Chemical Oxygen Demand. It shows the amount of oxygen required to oxidize organic matter in the water and indicates the level ofwater contamination.

(Fiscal year)

Site Reports

150

40

1,2-dichloropropane
Chloromethane (Methyl chloride)

To public
water
systems

In Harmony with the Environment

Emissions (tons)

SOx

8,000

10,900350● Performance Data

227
135
96
1
145
95
56

PRTR substances

COD (tons)

10,00010,40010,00011,500 11,400

ToluenePhosphorus● Changes in Release of Factory Wastewater and COD
Release of factory wastewater (million tons)

12,00012,300

Soot/dust emissions (tons)

NOx

14,000Tokuyama Factory has a stringent monitoring system to ensurethat hydrogen-ion concentrations (pH) and suspended solids(SS) remain within their respective limits. Wastewater from
Kashima Factory is treated at the final treatment facilities.
To reduce COD,* we installed activated sludge processing
equipment, etc. for processing wastewater containing organic
matter. Since fiscal 2004, we have measured the discharge ofnitrogen and phosphorus to which the “restriction on total
volume” applies under the Water Pollution Control Law. In fiscal
2006, the amounts of discharge of nitrogen and phosphorus
slightly increased as the operating rate of the facilities remained
high, but levels are still far lower than the regulatory standards.

Chloroethylene (Vinyl chloride)■ Main Products Cement, inorganic and organic chemical products, polycrystalline
silicon, silica, vinyl chloride, etc.

Amount releasedTo
atmosphere

In Harmony with Society

To reduce SOx emissions, we installed flue gas
desulfurization equipment in each boiler system at our
private power generation plant. In fiscal 2006, SOxemissions were reduced as operations of our private power
generation plant were adjusted to decrease environmental
impact. To reduce NOx and soot/dust emissions, boilers
and cement kilns are equipped with NOx removal
equipment, low NOx burners and high performance dust
collectors. In fiscal 2006, NOx and soot/dust emissions
slightly increased as the operating rate of our power
generation plant increased.

Legallyspecified
substance
numberName of substance

General Manager ofTokuyama Factory,
and Managing Director

Tokuyama’s CSR Activities

Tokuyama Factory

more than 1 ton per year.

**While the PRTR Law says the amount of release shall be given in kilograms to two
significant figures, the amount in this report is given in tons, rounded to the nearest 1/10
ton.

Corporate Social Responsibility Report 2007

28

Activities of Group Companies

Established: February 1, 1999
Shareholders: Tokuyama Corporation (100%)
Head office: Kitahama-Chuo Bldg., 2-2-22, Kitahama, Chuo-ku,
Osaka City, 541-0041
Business:
Manufacture and sales of vinyl chloride compounds● ISO 9001 and ISO 14001 Acquisition Status for
11 Group Companies
Company name

ISO 9001

ISO 14001

Sun Tox Co., Ltd.

●●

Shanon Corporation●

Tohoku Shanon Corporation●●

A&T Corporation●●

Figaro Engineering Inc.

●●

Tokuyama Dental Corporation●●

Tokuyama Siltech Co., Ltd.

●

●

●

●

Tokuyama Polypropylene Co., Ltd.

Shimasu, Itako City,
Kanto Plant 3075-18,
Ibaraki Prefecture

Tokuyama Plant● Performance Data
Unit
Power consumption

2002

2003

2004

2005

2006

1,000 kWh 26,890 27,810 28,470 28,480 29,730

Heavy oil consumption kl/year

1,480

1,460

1,470

910

600

tons/year

2.2

2.0

2.0

0.7

0.6

NOx

tons/year

2.8

3.3

3.3

0.9

0.5

Soot particles
Industrial water
consumption
Waste generation

tons/year

0.1

0.3

0.3

0.04

0.03

tons/year

56

52

53

63

59

tons/year

100

27

90

22

Final disposal of waste tons/year

10

20

0

tons/year

0.02

0.02

0.02

SOx

COD

29 Tokuyama Corporation

Plant manager:
Toshiyuki Yamaoka
Employees: 143
2
Area: 24,100 m● Performance Data
2002

2003

2004

2005

2006

Power consumption

1,000 kWh 34,920 36,170 35,740 35,770 34,230
tons/year

52

Consumption of
0.3 MPa steamConsumption of
2.1 MPa steam

0

9

Waste generation

tons/year

270

100

80

160

180

0.02

0.01

Final disposal of waste

tons/year

18

4

2

0

1

2,450

3,080

2,610

2,930

● Performance Data

● Performance Data

Unit

2002

2003

2004

2005

2006

Unit

2002

2003

2004

2005

2006

1,000 kWh

2,570

2,790

3,020

3,210

3,540

1,000
Industrial water consumption tons/year

482

402

410

443

387

Consumption of
tons/year
0.3 MPa steam
tons/
Industrial water consumption 1,000
year

240

240

240

240

240

tons/year

66

106

134

85

161

65

65

65

65

65

Final disposal of waste tons/year

150

172

186

20*

0

25*

tons/year

1320

Waste generation

97

5*

Final disposal of waste tons/year

7.3

0.3

0.2

0.1

0

100

86

87

79

79

Power consumption

Tokuyama Plant is located within Higashi Plant of thecorporation’s Tokuyama Factory and manufactures about
23,000 tons a year of biaxially oriented PP films. Our plant
conducts environmental conservation activities in cooperation
with Tokuyama Factory and also maintains ISO 14001
requirements. In fiscal 2006, we made our utmost efforts to“drastically reduce manufacturing losses.” Thanks to these
efforts, we achieved a 1% reduction in unit raw material
consumption and a 2.5% decrease in unit energy consumption.
As for health and safety, one year has passed since webegan implementation of an Occupational Health and Safety
Management System. In fiscal 2006, we promoted various healthand safety activities, including risk assessments. In fiscal 2007,
we aim at acquiring a certification under the Occupational
Health and Safety Management System, and continue efforts
under the slogan of “Feel joy in production; Be stringent withquality; and Adhere to safety,” so that our plant can beconsistently relied upon by society and by our customers.
Unit

Our Tokuyama Plant is located within Higashi Plant of the corporation’s
Tokuyama Factory, and manufactures 200,000 tons a year ofpolypropylene resin and 5,000 tons a year of flexible polyolefin resin.
Our plant implements three management systems: safety management,
environmental management, and quality management, and conducts
RC activities in collaboration with the Tokuyama Factory.
As for process safety, we acquired the qualification of a “Certified
Safety Inspector” as specified in the High Pressure Gas Safety Law in2005. We are promoting safety management activities based on risk
assessment for “processes, facilities, and operations.” We have been
breaking “no-accident and no-disaster” records for the past 32 years,
including the era when our company was the Polypropylene Production
Department of Tokuyama Corporation. In fiscal 2007, we will continue
RC activities with targets such as, “continuance of no-accident and nodisaster operations,” “reduction in environmental impacts,” and “noquality-related complaints.”

4,220

tons/year 39,670 42,270 42,760 44,830 42,270

Waste generation

Unit energy consumption
index as comparedwith FY 2002%

*The year of the scheduled shutdown maintenanceTokuyama RC Activities—Historical Overview
July 1991
March 1993

April 1994
June
April 1995
May 1997
September
April 1998
DecemberJanuary 1999
June
DecemberAugust 2000
April 2001
April 2002
June

Established Global Environmental Issues Committee
Established RC Administration Committee,
Instituted voluntary plan for Total Management ofEnvironment, Safety and Quality
Acquired ISO 9002 certification for High-Purity Isopropyl
Alcohol
Establishment of product warranty systems, including
product and labeling assessments
Became a member of the Japan Responsible Care Council
Acquired ISO 9001 certification for Cement Manufacturing
Issued RC Report (First edition)
Acquired ISO 9001 certification for Dental Materials
Manufacturing
Acquired ISO 9001 and 9002 certifications for aluminum
nitride, functional powders, etc.; Tokuyama Factory acquired
ISO 14001 certification
Kashima Factory was certified to ISO 14001
Acquired ISO 9002 certification for Chemical
Products, Polypropylene, Films, etc.
Set up Ecological Management Initiative Department.
Acquired ISO 9002 certification for polycrystalline silicon,organic solutions, etc.
Created Recycling and Environmental Business Department
Established Yamaguchi Eco-Tech Corporation
Acquired ISO 9002 certification for vinyl chloride monomer
and polyvinyl chloride
Kashima Factory won the Ibaraki Prefecture award inrecognition of being an “Earth-Friendly Company”

March 2003

April
December

October 2004

February 2005

March
June

SeptemberAugust 2006
December
April 2007

Received the distinction award in “Resource Recycling
Technologies and Systems” from the Director-General ofIndustrial Science and Technology Policy and Environment
Bureau, the Ministry of Economy, Trade and Industry
Updated certification to ISO 9001: 2000; company’s sales
sector was newly certified
Underwent the Responsible Care verification process.
Tokuyama Factory achieved a Category II zero-accidents
record (8.1 million hours for the chemical industry) as
defined by the Ministry of Health, Labour and Welfare
Figaro Engineering Inc. acquired an ISO 14001 certification.
Kashima Factory was granted the Director-General ofLabor Bureau of the Ibaraki Prefectural Government Award
Tokuyama Factory was granted the Director-General of the
Agency of Natural Resources and Energy Award for
Excellent Energy Management Plant (Electricity Sector)
Tokuyama Factory acquired a certification of the
Yamaguchi Prefecture Eco Factory
Tokuyama Factory achieved the Ministry of Health, Labourand Welfare’s Category III Zero-Accident record (chemicalindustry: 12.2 million hours)
ASTOM Corporation acquired ISO 9001 certification
Shanghai Tokuyama Plastics Co., Ltd. acquired ISO 9001
certification
Kanto Plant of Sun Tox Co., Ltd. acquired ISO 14001
certification
Corporate Social Responsibility Division established

Corporate Social Responsibility Report 2007

Site Reports

Kanto Plant is located in the Itako Industrial Park in Ibaraki
Prefecture and manufactures approximately 25,000 tons ayear of biaxially oriented PP films and cast PP films. With theaim of saving energy and reducing CO2 emissions, we
introduced a cogeneration unit in fiscal 2004, and began to
fully operate the unit in fiscal 2005. Fuel oil consumption in
fiscal 2006 decreased by more than 50% from the level offiscal 2004 due to efficient operation of this cogeneration
unit.
In December 2006, we acquired ISO 14001 certification.
We promote the PDCA cycle aiming at running our plant inharmony with society through implementing ISO 9001 andour Occupational Health and Safety Management System aswell as ISO 14001. We designate the 30th day of each monthas “Zero Waste Day” and conduct cleaning operation inneighboring areas.

Our Tokuyama Plant is located within Higashi Plant of thecorporation’s Tokuyama Factory, and manufactures about
13,000 tons of vinyl chloride compounds a year.
Out of recognition that RC activities should be carried out
irrespective of the size of a company, our plant conducts suchactivities in collaboration with the Tokuyama Factory. In fiscal
2006, production hit a record high and the amount of waste
plastics also increased. However, we exhaustively sorted waste
plastics with a target of realizing 100% recycling. As a result,the amount of external final disposal of waste has become zero.
In fiscal 2007, we are continuing to undertake chemical
production activities with professionalism and safety in mind,
aim at continuing our no-accident and no-disaster records,
acting in compliance with laws and regulations, and carrying out
business operations in harmony with the global environment asa corporate citizen.

In Harmony with the Environment

Plant manager:
Hideki Tanaka
Employees: 173
2
Area: 55,800 m

Plant manager:
Hiroshi Horii
Employees: 63
Area: 71,000 m2

In Harmony with Society●=Included as a group site

Established: February 14, 1992
Shareholders: Tokuyama Corporation (100%)
Head office: Annex to Tokuyama Bldg. 1-4-5, Nishi-Shimbashi, Minato-ku,
Tokyo, 105-8429
Business:
Manufacture and sales of biaxially oriented polypropylene
films and cast polypropylene films (including multi-layer coextruded films)
7-7, Harumi-cho, Shunan City,
Yamaguchi Prefecture

Sun Tox Co., Ltd.

1-1, Harumi-cho, Shunan City,

Tokuyama Plant Yamaguchi Prefecture

Plant manager:
Shigefumi Kunihiro
Employees: 28
2
Area: 3,280 m●

Shin Dai-ichi Vinyl Corporation●=Certified

1-2, Harumi-cho, Shunan City,●●

ASTOM Corporation

Established: April 2, 2001
Shareholders: Tokuyama Corporation (50%), Prime Polymer Co., Ltd.
(50%)
Head office: 1-1, Harumi-cho, Shunan City, Yamaguchi Prefecture
Business:
Manufacture of polypropylene and flexible polyolefin

Tokuyama Plant Yamaguchi Prefecture●

Sun Arrow Chemical Co., Ltd.

Tokuyama Polypropylene Co., Ltd.

Tokuyama’s CSR Activities

We believe we should jointly address Responsible Care
activities with our group companies. To provide support for
their activities, we have exchanged a memorandum ofagreement on RC management with respective groupcompanies that are engaged in production activities at home
and abroad.
To strictly manage the RC activities of Tokuyama Group,
we assess RC activities of group companies by reviewing
data, including environmental impacts and safety
management indicators, and by conducting a safety andenvironmental assessment for several selected companies
on a yearly basis. We share information on regulatory
standards with our group companies.
We also help group companies to acquire ISO 14001 andISO 9001 certification. In fiscal 2006, Kanto Plant of Sun Tox
Co., Ltd. acquired ISO 14001 certification.

Sun Arrow Chemical Co., Ltd.

30

Tokuyama Corp.
Responsible Care Management Dept., Corporate Social Responsibility Division
Shibuya Konno Bldg., 3-1, Shibuya 3-chome
Shibuya-ku, Tokyo 150-8383
Phone: +81 3-3499-8478
Fax: +81 3-3499-8961
URL: http://www.tokuyama.co.jp

This report is printed on FSC-accredited paper with pure plant oil ink, which contains no volatile organic
compounds and in a dry printing process that uses no water, thus precluding release of any harmful effluents.

Date of issue: October, 2007
Next issue: Scheduled for September 2008