At a GlanceMaterial andEngineering Business
Segment

Industrial Machinery
Products Business
Segment

14.2%

Business
Segments

85.0%

New Businesses

0.8%

Industrial Machinery Products
Business Segment

Material and Engineering
Business Segment

New
Businesses

Our Industrial Machinery Products Business Segment comprises three sub-segments:(1) Plastic Production and Processing Machinery, (2) Molding Machines, and (3) Other
Machinery, and operates from three bases: the Hiroshima Plant, the Yokohama Plant, andthe Meiki Plant.
With a lineup of plastic production and processing machinery and plastic injection
molding machines for a variety of applications, we offer many products that command ahigh market share worldwide, such as our separator film manufacturing equipment forlithium-ion batteries, an essential element for the shift to electric vehicles. In this segment,
which accounts for 85% of JSW Group’s net sales, we are working to further expand thescale of our business, especially in the mainstay plastic processing machinery market, inorder to contribute to a decarbonized world through energy savings and lighter weight.

Our Material and Engineering Business Segment comprises two
sub-segments: (1) Steel Castings and Forgings and (2) Engineering
Services, and is operated by Japan Steel Works M&E, Inc. (Muroran
Plant), which was established as an operating subsidiary in April 2020.
In steel castings and forgings, we are either the world’s only
manufacturer or have a high market share for products such as large
shaft materials for power plants, pressure vessel components fornuclear power plants, and large components for pile-driving machines
used in the construction of offshore wind farms. With the shift toward
decarbonization, we are working to strengthen our earnings basethrough business structure reform.

We have narrowed down our
new businesses to the threefields of photonics,
composite materials, andmetallic materials.
We are working to achieve
profitability in each field
through the supply of
products: in photonics,
materials for semiconductors
and optical devices such assynthetic quartz and gallium
nitride (GaN); in composite
materials, lightweight andhigh-strength materials foraircraft such as carbon fiber
reinforced plastic (CFRP)
products; and in metallic
materials, materials forvarious electronic devices
such as titanium copper.

Hiroshima Plant

Yokohama Plant

Japan Steel Works M&E, Inc.
(Muroran Plant)

Meiki Plant

Production
Bases

Net Sales¥238.7billion
FY2022

Plastic Production and Processing Machinery

Molding Machines

Steel Castings and Forgings• Pelletizers• Film and sheet manufacturing equipment• Twin-screw extruders• After-sales services• Plastic injection
molding machines• Magnesium injection
molding machines• Blow molding machines• After-sales services• Parts for reactors(shells, heads, etc.)• Parts for steam generators• Clad steel plates

New Businesses• Rotor shafts• Turbine casings• Die steel• Steel rolls for steel manufacturing

Photonics
Composite materials• Metallic materials••

Semiconductors andElectronic Devices

Shell flanges for pressure vessels

Integrated rotor shaft for power generation

Clad steel plates

Steel rolls for steel manufacturing

Plastic injection molding machines

Other
Machinery

18.8%

Plastic Production
and Processing
Machinery

Pelletizers

Products

38.6%

Molding
MachinesTwin-screw extruders

Vacuum laminators

27.6%
Other Machinery• Excimer laser annealing systems• Defense equipment• Railway products• Hot press devices

Plastics

Mobility• Design and analysis• Welded structures• Inspection and survey• Hydrogen-related products, etc.

Mobility
Components
Design and analysis• Vacuum laminators• Deposition systems• After-sales services

Electronic Parts
Excimer laser annealing systems

Markets

High-Performance
Batteries

Aircraft Components

Engineering and Other Services
Magnesium injection
molding machines

Defense equipment

2 JSW Integrated Report 2023

Cameras andSensing Devices

Electronic
Devices

Defense

Welded structures

Power Generation
Equipment

Hydrogen pressure accumulator

Renewable Energy

Infrastructure

New Businesses

JSW Integrated Report 2023 3

Our History of Creating Value

1907

Founding (pre-war)

Post-war recovery

1970s

2000s

Rapid economic growth

Preparation for a new era

2023

•D
 ecarbonization-related demand• Development ofdefense industry• Transition tocommercial business• Increasing energy demand• Accelerating adoption ofelectronics in industry

Launch as anational project

Growth based on a
portfolio of technologies

Becoming a comprehensive company
in materials and mechatronics

Toward establishing a new
future vision for JSW

In 1907, The Japan Steel Works was established in
Muroran, Hokkaido, as a joint venture between threecompanies: Hokkaido Colliery Steamship Company andtwo U.K. firms: Sir W.G. Armstrong, Whitworth & Co.,
Ltd., and Vickers, Sons & Maxim, Ltd. By manufacturingarmaments as a national project, the Company
contributed to the development of the defense industry.
Purchasing Hiroshima Seisakusho Co., Ltd., in 1920,
JSW established a Hiroshima factory (now known as theHiroshima Plant) to expand the armaments business.

After the Second World War, the focus of our businessunderwent a major shift to commercial products. Utilizing thetechnology cultivated through the manufacture of armaments,
we began in earnest to produce large steel castings andforgings, such as rotor shafts for power generation and pressure
vessels for oil refineries, and plastic processing machinery,such as injection molding machines and plastic extruders.

We focused on creating new added value in response tomarket changes such as increasing energy demand and theaccelerating adoption of electronics. Among the actions taken
were the manufacture of ultra-large components (pressure
vessels and rotor shafts) for nuclear power plants, a switchfrom hydraulic to electric injection molding machines, and theintroduction of magnesium molding technology.

To contribute to a society that is demanding products thatare friendly to the global environment, we manufactureand supply separator film manufacturing equipment forlithium-ion batteries, molding machines for large plastic
parts for automobiles that excel in weight reduction, allmanner of resin processing machines adapted to serving
a plastic-resource-recycling society, and pressure vessels
for hydrogen storage to support the hydrogen economy.

Social issues
and needs

Phases in
our history1945(electric vehicles, use of hydrogen energy)• Increasing LCD demand with thegrowing use of smartphones•P roblem of marine plastic pollution

Meiki Co., Ltd.

Plastic injection molding machines
Expansion of materials

Magnesium injection molding machines

Mechatronics technology

Excimer laser annealing systems

Expansion of product range
Expansion to secondary
processing equipment

Separator film manufacturing equipment for lithium-ion batteries

Film and sheet manufacturing equipment

Plastic extruders
Barrel processing
technologies
Lineage oftechnologies
and their
provision tocustomers andmarkets

Extruders for material and chemical recycling

Artillery production technologies
Manufacturing
technologies

Material manufacturing
technologies

Rotor shafts for power generation

High-pressure cylinders, reaction towers(e.g., for fertilizer)

Pressure vessels for oil refining
Manufacturing
Pressure vessels for use in nuclear power generation
technologies
Pressure vessel manufacturing
Artificial crystals
and high-pressure technologies
Pressure vessel technologies

Pressure vessel manufacturingand high-pressure technologies
Hydrogen handling technologies

Research on hydrogen in steel

Gallium nitride (GaN)
single-crystal substrates
Hydrogenpressure vessels

Hydrogen storage alloys

Special steel technologies
Material manufacturing
technologies

Thick plate rolling

Clad steel plates and pipes

Net sales

4 JSW Integrated Report 2023

JSW Integrated Report 2023 5

Message from the President

Striving Forward with a Single Vector under a Corporate Philosophy
Starting with Purpose
Since our founding in 1907, The Japan Steel Works has
contributed to advancement around the world through ourdevelopment of various materials and their implementation
in society. On our founding, we contributed to the
manufacturing of the high-quality and cutting-edge steel
required for Japan’s modernization. After the Second
World War, starting with the development of plastic
extruders in 1950, we continued to develop technology
and equipment for pelletizers and injection molding
machines, supporting Japan’s post-war reconstruction andrapid economic growth through the social implementationof plastics. In 1994, we became the first company in theworld to commercialize an injection molding machine formagnesium, a lightweight and highly recyclable material.
In 1995, we developed the world’s first excimer laser
annealing (ELA) system, which is essential for the
manufacturing process of high-definition displays. Today,
we are advancing the development of new materials suchas gallium nitride (GaN), which significantly reduces thepower consumption of semiconductors.
In this way, we have developed and manufactured adiverse range of products. In April 2022, when I took office
as president, the thought occurred to me that we may beable to use a single key phrase, unique to The Japan SteelWorks, to express all of these diverse businesses.

In November of the same year, we established our new
corporate philosophy, starting with our Purpose defined as
the Material Revolution™. By using the term Material
Revolution™, I feel that all employees now share acommon understanding that we have created value
through the social implementation of new materials, suchas high-quality steel and plastic, and that we can now
work together along the same vector.
“Material Revolution™, making the world sustainable
and prosperous.” This is the Purpose that guides us in our
research and development activities to create new
business domains, enabling us to march forward withunerring direction. Going forward, we believe it is importantto support the development of a resource-recycling andlow-carbon society and contribute to the creation of asociety that is not only sustainable but also prosperous.
Plastic packaging, for example, preserves freshness andallows for long-term storage, which is essential for safe
and secure food. In addition, the lighter weight of the
packaging helps to reduce CO2 emissions during
distribution. In order to aid in the reduction of CO2
emissions without compromising this kind of richness inlifestyles, we will work to develop devices and materials
that excel in energy conservation and help solve theproblem of waste plastics.

Record-high Net Sales and Orders in Fiscal 2022;
Profit Improvement Remains an Issue to Tackle

Fiscal 2023: A year for new beginnings
toward greater growth.
A year for continued transformationand challenge.
Toshio Matsuo
Representative Director & President
The Japan Steel Works, Ltd.

6 JSW Integrated Report 2023

In fiscal 2022, the second year of the medium-term
management plan JGP2025 covering from fiscal 2021 to
fiscal 2025, both consolidated net sales and orders
received reached record highs, with the former increasing
11.7% year-on-year to ¥238.7 billion, mainly due toincreased sales of plastic production and processing
machinery, and the latter increasing 2.9% to ¥276 billion.
In the past 15 years, our net sales and orders haveremained steady around ¥200 billion. We consider it anepoch-making event to be able to break through thisbarrier with the expansion of sales in the Industrial
Machinery Products Business to a scale exceeding ¥200
billion with this business alone. The fact that we are on
track to achieve the final year net sales target of ¥270
billion under JGP2025 in fiscal 2023, two years ahead ofschedule, demonstrates significant fruits from our labors
to date.
As for profits, however, we revised our forecast
downward in February 2023, and our operating income fell
10.4% to ¥13.8 billion and net profit attributable toshareholders of the parent company fell 14.1% to ¥11.9
billion. We see declines in profit margins as a major issue

to be addressed. There were two factors that contributed
to the decrease in profit. One is the rise in variable
expenses such as procurement and subcontracting costs,
raw material costs, and fuel costs. Despite progress innegotiations with our customers regarding sales priceimprovement, these negotiations had not fully manifested
results as of the end of fiscal 2022. As we enter fiscal
2023, we have gained further understanding from ourcustomers and are making progress in improving
profitability. The second factor hindering profit margins
came from the impact of inappropriate conduct inmanufacturing inspections, which resulted in an operating
loss of ¥800 million (versus an operating income of ¥1.3
billion in the same period last year) in the Material andEngineering Business. In fiscal 2023, this business is
expected to return to profitability as a result of growing
sales thanks to greater customer understanding regarding
measures to prevent recurrence of similar issues. Givenconsiderations like these, we have already begun theprocess of formulating the new medium-term management
plan JGP2028, to begin from fiscal 2024 despite JGP2025
still being in progress.

JSW Integrated Report 2023 7

Ongoing Four-way Reform Efforts to Restore Trust
Four Perspectives on Measures to Prevent Recurrences
Quality assurance
system reform

Established a new Quality Management Office at the Head Office to monitor and supervise quality assurance
management at divisions and plants. Rectified overconcentrated authority at Japan Steel Works M&E’s product division.

Corporate culture
reformIn order to strengthen and improve awareness of quality compliance, messages from top management and executives
and dialogues with employees have been held on several occasions. As a result, we have worked to continuously update
our corporate culture to be one of openness and in which the act of taking on challenges is valued (employees can
openly report failures after taking on challenges and overcome them to achieve further growth) and in which employees
can call out things that do not make sense to them.

Process reform
Governancereform

We have been conducting reforms to make business processes less prone to inappropriate behavior. These include
establishing a digitalized inspection operation system, including automatic measurement to prevent falsified orerroneous entries in product inspection records.
We have strengthened our internal audit function and whistleblowing system. In addition, to strengthen the effectivenessof the Board of Directors, we increased the number of outside directors from three to four to raise the percentage ofoutside directors and appointed female officers for the first time at JSW to ensure diversity.

In May 2022, we announced that our subsidiary, Japan
Steel Works M&E, Inc. (“M&E”), had committed
inappropriate acts such as falsification, fabrication, andmisstatement of product inspection results. Subsequently,
in sincere response to the findings and recommendationsof the special investigation committee of outside attorneys,
JSW announced in November 2022 that it would be taking
initiatives to prevent recurrence of this issue. Since then,the Group as a whole has been engaged in reforms fromfour perspectives: quality assurance system reform,
corporate culture reform, process reform, and governancereform. First, as immediate measures, we have used thepast year to make steady reforms in the areas of quality
assurance system reform and process reform, as well as
to take some actions within governance reform.
As for corporate culture reform, we are working toreform awareness through video messages frommanagement to all employees, implementation of our own

training related to quality compliance. The fact that thisoccurred at our Muroran Plant means that we must
consider the possibility that problems like this may occur atother locations. By spreading the awareness change thatis underway at M&E to other places of business andensuring that all officers and employees maintainownership of the issues involved, we will establish a
corporate culture that will ensure that no further problems
like these shall ever happen again.
To this end, we believe it is necessary for management
to engage in two-way communication with as many
employees as possible to instill an awareness of the issues
and reform our corporate culture. I personally travel toseveral locations, including M&E, each month to hold town
hall meetings with front-line foreman-level employees andlunch meetings to talk with section-manager-level
employees. Since January 2023, these have been monthly
activities. At town hall meetings, I exchange opinions witheducational curriculum and tests, establishment of Quality
Compliance Month, and enhancement of education andattendees on issues faced on-site, discuss their thoughts
on improper conduct in manufacturing inspections, andtackle how we should address these issues in the future.
I have heard M&E employees say that they are facing theirwork and interacting with customers with a renewed spirit,and I feel that awareness is changing dramatically.
In addition, we launched the Organizational Culture
Reform Project Team in August 2023. This team brings
together about 30 young employees from all locations andbusiness domains via open recruitment, where they aretasked with expressing their opinions on what they think
about the Group’s culture and corporate culture, and whatneeds to be changed. Their opinions are taken seriously
and used as drivers for further reform. This information isthen double-checked through our employee engagement
survey as we run our PDCA cycle.
The key to preventing recurrence of any given issue is to
not allow the memory of that issue to fade away. There isan old proverb that says, “he who will travel a hundred
miles is only halfway done at ninety.” With this in mind, allof our officers and employees will work together to prevent
recurrence of the issues we have faced by remaining
vigilant toward reform.

8 JSW Integrated Report 2023

Our Growth Strategy to Achieve Net Sales of ¥500 Billion in 10 Years
Our group’s goal for fiscal 2033, 10 years from now, is toachieve net sales of ¥500 billion, approximately double thecurrent level. We believe that this level must be achieved inorder for our richly historic Group to continue tosustainably increase its corporate value. In basic approach
toward this goal is to increase corporate value by
expanding profits through sales growth. As for our
strategies to achieve this sales growth, we will focus on
increasing production capacity in growth areas, promoting
global expansion, creating new business domains throughinnovation, and investing in human resources.

Increasing Production Capacity in Growth
Areas
The areas that the Group considers particularly important for
growth are those that contribute to the realization of aplastic-resource-recycling society and a low-carbon society.
Global plastic production has increased approximately
20-fold in the past 50 years and is currently at 400 million
tons per year. Plastic offers superior functionality, including
light weight and heat insulation, contributing to energy
conservation. Furthermore, its gas barrier properties help
solve social issues such as reducing food loss. For thesereasons, plastic is considered one of the four major
materials essential to modern society, along with cement,
steel, and ammonia. Demand is expected to continue
increasing for plastic, driven by economic and population
growth. By 2040, the world is expected to require 800
million tons per year, and 1.2 billion tons per year by 2060.
Under such circumstances, demand is expected to growover the medium to long term for pelletizers and twinscrew extruders, necessary equipment the Group offers formass production of various plastic materials, as well as forfilm and sheet manufacturing equipment, which form
plastic materials into films and 3D shaped parts, andfurthermore for plastic injection molding machines. We
will strive to increase our production capacity to capture
this demand.
Today’s linear society based on mass production andmass consumption (disposal) is causing significant
problems such as waste generation, resource depletion,and destruction of the ecosystem. It is now necessary tosupport the pivot to a circular economy, and as amanufacturer of comprehensive plastics processing
machinery, we hope to contribute to the recycling of plastic
resources to realize a sustainable society. Currently, we
mainly provide equipment for production and molding ofplastics, but in the future we will also focus on providing
equipment for recycling. In addition to twin-screw
extruders directly involved in recycling plastic raw
materials, we will also expand our lineup of injection
molding machines and film and sheet manufacturing
equipment for molding recycled plastic raw materials.

Furthermore, we will focus on creating social value in thefield of recycling to contribute to solving problems such aswaste plastics, and to ensure the sustainable growth of theCompany.
For details, see p. 18-19.
Meanwhile, in order to realize a low-carbon society, we areworking on products that contribute to the spread ofelectric vehicles (EVs), for example, as well as those that
contribute to energy saving through weight reduction andinsulation from use of plastics, which we see as offering
great opportunity for growth. In particular, demand forseparator film manufacturing equipment for lithium-ion
batteries is expected to increase along with the mediumto long-term expansion of EVs, and we plan to increase
sales by approximately 3.5 times here in fiscal 2025
compared to fiscal 2021. Upgrading our production lines is
progressing as planned, and by March 31, 2024 we intend
to have completed the construction of a system capable ofhandling 60 lines per year. Furthermore, we will advanceR&D related to next-generation lithium-ion battery massproduction technology. In addition, the use of magnesium,
which is lightweight, heat resistant, and has properties toprevent electromagnetic radiation, is increasing as acomponent used in EVs. As a result, orders for magnesium
injection molding machines, an area dominated by our
proprietary technology, reached a record high in fiscal 2022
and are expected to exceed this level in fiscal 2023.
To meet this growing demand for plastics, to contribute to
the recycling of plastic resources, and to help realize a
low-carbon society, we will increase the production capacityof the Hiroshima Plant. Specifically, its 9th assembly plant
will begin operations in the second half of fiscal 2023, withthe 10th assembly plant to go online in the second half offiscal 2024. Furthermore, we plan to launch a new smart
factory machine plant in fiscal 2024. Product lines from theHiroshima Plant have a high in-house production rate,
leading to a high profit margin. By increasing production
capacity, we will respond to strong demand and improvevariable expenses.

Our Products and Businesses
Separator film manufacturing
equipment for lithium-ion batteries
Magnesium injection molding
machines
Replacement of hydraulic plastic
injection molding machines withelectric plastic injection molding
machines

Contributions to a
Low-Carbon Society

Spread of EVs

Reductionof powerconsumption andhydraulic oil use

JSW Integrated Report 2023 9

Promoting Global Expansion
In the Injection Molding Machinery Business, we arepromoting global expansion in parallel with increasing
production capacity in Japan, where we have a large
market share. In fact, we have already established local
production systems in China and North America. As partof our efforts to expand market share in the European
market, an area with enormous untapped potential, we
completed construction of a new plant in Poland in fiscal
2022. Though hydraulic injection molding machines arewidely used in the European market, demand is rising fortheir electric counterparts, which consume 60% lesselectricity (based on our calculations assuming large
machines) and use significantly less hydraulic fluid. Thishas come amid moves toward decarbonization andsoaring electricity prices, and companies are switching toelectric injection molding machines as a result. Production
at the new plant in Poland will enable us to shorten leadtimes, meet the diverse needs of our customers, andcapitalize on growing demand.
In the Plastics Machinery Business, we will further
expand the scale of our operations and strengthen ourbusiness not only in China but also in India. As part of thiseffort, we aim to strengthen our after-sales services andhave established a maintenance system, including
assignment of personnel to these countries. This will help
us provide a stable supply of products to our customers
around the world and a high-quality after-sales service that
responds promptly to their needs.
Market Share in Europe

Number of Molding Machinesfor Europe (index)
Domestic production
Production in Europe

JSW’s market share
2–3%
Market size of
10,000 units per year
in Europe as a whole

2.0

1.0

FY2023

FY2028Creating New Business Domains
through Innovation
Along with strengthening and expanding existing
businesses, it is also important to leverage the Group’s
core competencies to plant seeds for the creation ofbusinesses in areas that offer the potential of both growth
and addressing social issues going forward. Today, someof our core products, such as plastic extruders andinjection molding machines, have found their prime after aslong as 40 to 50 years from their initial stages. It is important
to conduct R&D mindful of the future in a way that is

10 JSW Integrated Report 2023

consistent with our Purpose based on our corecompetencies, without being obsessed with the need to
immediately commercialize. To strengthen these efforts, weestablished the Innovation Management (IM) Headquarters
in April 2023. In the past, research activities divided byplant tended to focus on innovation efforts that were an
extension of existing businesses. However, in myconversations with Group employees, I have relayed tothem that the primary mission of research at the IM
Headquarters is to create new things with open thinking.
As an example, we are conducting research anddevelopment so that our manufacturing equipment cantake advantage of our core competencies of melting,mixing, and solidifying and make contributions whennext-generation batteries such as solid-state batteries
reach the mass production stage. In addition, we are also
working with the Mitsubishi Chemical Group to
demonstrate crystal growth ahead of mass production ofgallium nitride (GaN) substrates. We are aiming to increase
productivity and reduce the cost of GaN substrates
through new manufacturing technologies where we areleveraging our core competencies. GaN’s qualities include
low power loss and low heat generation compared to thecurrent mainstream material of silicon. Furthermore, it
offers higher-speed operation. These qualities are
expected to be utilized in EV power converters, in-vehicle
chargers, and 5th generation mobile communication
systems (5G). These are all R&D efforts that will make theworld more sustainable and prosperous by contributing toa low-carbon and super-smart society.
Looking further into the future, we are encouraging freeresearch for young engineers who will be responsible forthat future. Listening directly to them and their comments
has generated many interesting ideas.
All technologies share common bonds, and research
for the future can surely offer benefits in the evolution ofcurrent products. While we will of course practiceresearch and development utilizing our current coretechnical competencies of melting, mixing, andsolidifying technologies and machine element andprecision control technologies, we will also generate
new innovative technologies. Furthermore, we willdevelop elemental technologies that apply the
aforementioned technologies, with the aim of creating
new customers and business domains.
For details, see p. 14-15.

Investing in Human Resources
In order to expand our scale to become a ¥500 billion
company, it is essential that we strengthen our humancapital in addition to our capital investment and R&D.
In conjunction with the next medium-term management
plan JGP2028, we will continue to develop a medium-termplan for our human resources strategy as well. In addition,in order to move to the next stage as a company, it isimportant to become an organization that continuously
generates innovation. To create a rewarding and attractive
work environment and to attract and develop a diverse
workforce and enable each individual to demonstrate theirmaximum potential, we will accelerate our investment in
human resources in a range of areas. These include
improvements to the working environment, including how it
provides psychological safety, work style reforms, andimproved compensation. In our factories, we are also
working to achieve automation and aiming to make newplants smart factories that place even greater emphasis onease of work.
Since we have a low percentage of female employees
and, as a result, a low percentage of female managers, we
believe that we need to work even harder than before toempower women. The percentage of women among new
graduate hires, which had been around 10%, has
increased to about 15% for new hires in fiscal 2023, but
we recognize that this is still not enough. We will focus on
recruiting female employees through active external
communication of our ongoing efforts to improve
environments so that women can play an active role in ourorganization.
With respect to our officers, in June 2023, the Company
appointed its first female outside director and Audit &Supervisory Board member. In town hall meetings withfemale employees, we successfully stimulated greater
motivation among them, and furthermore were able toidentify and capture new issues during various exchanges.
Going forward, we will continue to listen to our employees
and place further efforts in improving working
environments and systems.
In addition, within new business areas such as digitaltransformation (DX), intellectual property, and those related
to electronic devices, we are actively recruiting non-Japanesetalent and experienced mid-career personnel. By utilizing
their outside ways of thinking and approaches, they havebrought us a great deal of new insights. I feel that we, as acorporate organization, are changing from this fusion ofknowledge from a wide range of personnel and the creationof new ideas. Going forward, we will continue to encourage
diversity in our human resources and make The Japan
Steel Works a place where those who join us can realize
their dreams and feel truly happy to have joined us.

Fiscal 2023: A Fresh Start, Continuing Transformation and Challenge
to Become a Sustainable Company
I would like to take a moment to once again offer mysincere and heartfelt apologies to our customers and allother stakeholders for any inconvenience and concern wemay have caused in fiscal 2022 as a result of ourinappropriate actions regarding product inspections.
In fiscal 2023, under our new structure, we will continue
our efforts to prevent recurrence of such issues andaccelerate investment in facilities, R&D, and humanresources to achieve further growth. I feel that I, as well as

my colleagues at the officer and employee levels of theGroup, have a very strong desire to drive change. Looking
ahead, we intend to sustain our efforts to transform andtake on challenges in the interest of becoming asustainable company that delivers both social andeconomic value.
As we take these steps forward, I ask you, ourstakeholders, for your continued understanding and foryour support as we transform and grow JSW Group.

JSW Integrated Report 2023 11

JSW Group
Value Creation
Process

Material Revolution™

PurposeBenefiting all stakeholders by developing andVisionMaterial Revolution™,materials that solve social issues.

making the world sustainable and prosperous.

Capitalimplementing industrial machinery and newBusiness Model

Outputs

Outcomes

As of March 31, 2023

Financial capital

Ma
ter
ial
CompetenerceCoShareholders’ equity:¥154,108 million• 
R&I rating: A (stable)•

Melting, Mixing,
and Solidifying
Technologies

M a n ufact

Human capitalJ SW Group employees: 4,966• 
Non-consolidated JSW
employees: 1,758• Engineering career-track
employees (non-consolidated):817• 
Training facilities for skills
transfer: 2

uri•Machine Element
Technology
Precision Control
Technology

ng

T

ec

hn

olo

hnologyTec apital investment:C¥7,346 million (FY2022)• 
Plants: 3 locations• 
Test centers:
3 plastic machine locations,
6 molding machine locations• 
Sales locations and Group
companies covering major
market regions in Asia, North
America and Europe
•

ign
es
D

M
 anufactured
capitalResolution ofSocial Issues• Industrial Machinery• New Materials

Sustainable society ontribute to the expansion of ourCcustomers’ business opportunities•
Resolve issues faced byour customers•Contribute to reducing
environmental impact•(Particularly, realizing a plasticresource-recycling society andcontrolling plastic pollution)

Employees

Prosperous society work environment with job
Asatisfaction and excitement•Growth as a highly
skilled professional(Resolution of social issues such as
the health of people, medical care,food, and energy)•

Plastics
MachineryBusiness partners

Mitigating climatechange reat all business partners fairlyTand impartially, and always
conduct transactions in good faith•
Build partnerships to create
corporate value•

Injection Molding
Machines

Shareholders
and investorsgyMedium-to-long-term enhancementof corporate value•Stable shareholder returns•

Other
MachineryIntellectual capital esearch and development
R
expenses: ¥5,020 million (FY2022)• 
Patents held: 928 in Japan,
508 overseas

Customers

Creation ofsocial value•

Material andEngineering
Services

Realization of a plastic-resource-recycling society
Contribution to a low-carbon society• Contribution to a super-smart society• ong-term and stableL
relationships with customers• Good relationships with local
communities around plantsN atural capital (FY2022)

Human capital improvement and diversity and inclusion
Investment in the future with innovation management• Governance reinforcement of JSW GroupNew
Businesses••

The waste plastic problem
 evelopment of recycling and waste treatment businessesD• 
Reduction of fossil-fuel-derived plastics• 
Conversion to biodegradable plastics• 
Growing discussion about maintaining ecosystems andnatural capital•

Carbon neutrality by 2050
 dvancement of lithium-ion and otherA
storage batteries• 
Expansion of nature-derived energy• Expansion of hydrogen and ammonia businesses• Phase-out of fossil fuels• Renewed popularity of nuclear power generation•

 nergy and resource conservationEin production activities (reduction of
CO2 emissions)•
Reduction of CO2 emissions throughour products and businesses•

Bolstering JSW Group’s management foundation forsustainable growth nergy consumption: 2,728 TJ
E• 
Water intake: 16.16 million m3

 ontribution to the local
C
economy through employment
and procurement

Global environment••

12 JSW Integrated Report 2023•

Creating value and solving social issues through JSWGroup’s businesses•

The Environment
in Which JSW
Operates

Local communities

MaterialityS ocial relationshipcapitalSustainableenhancement ofcorporate value

Advancement toward digitaltransformation, AI, and IoT
 ransformation of our business models andTwork styles• 
Full-scale investment in related infrastructure• 
Economies emphasizing intangible assets
and human capital•

Low birthrates and aging populations
in developed countries•

Shrinking domestic market, shrinking workforce

Global population growthE xpansion and diversification of consumption,
especially in emerging countries• F ood supply problems•

JSW Integrated Report 2023 13

Special Feature: Innovation Strategy for Value Creation
JSW Group’s vision for the next 10 years is to grow into a ¥500 billion business group through theresolution of social issues. To achieve this, it is essential not only to strengthen thecompetitiveness of existing products, but also to develop new markets and innovate technologies,
capturing opportunities to help realize a plastic-resource-recycling society, a low-carbon society,and a super-smart society. Therefore, in April 2023, we established the Innovation Management(IM) Headquarters, an organization for creating group-wide innovations. This creation includes thediscovery and planning of new themes as well as research and development of fundamental
technologies in accordance with the corporate philosophy and Materiality of Japan Steel Works
Group. In addition, the R&D organizations of the Company and Japan Steel Works M&E, Inc.
were restructured, leading to the creation of the Advanced Technology Laboratory (Aki Ward,
Hiroshima City), the Material Technology Laboratory (Muroran City, Hokkaido), and the Device
Technology Laboratory (Kanazawa Ward, Yokohama City).

Shigeki Inoue
Director & Managing Executive Officer
CTO, in charge of Quality Management,in charge of Intellectual Property
Department, in charge of New Business
Promotion Headquarters, General
Manager of Quality Management Office,General Manager of Innovation
Management Headquarters

Organizational Structure and Main Duties
Materiality
Creating Value and Solving Social Issues through Businesses
Realization of a plastic-resource-recycling society
Contribution to a low-carbon society
Contribution to a super-smart society

ESG Promotion
OfficeQuality Management
OfficeHuman capital improvement and diversity and inclusion
Investment in the future with innovation management
Governance reinforcement of JSW Group

Business
Development Office• roup-wide management of technology, management of the IM
GHeadquarters, exploration and planning of new businesses

 &D related to materials systems for the entire Group, andR
support for quality assurance activities• Management of R&D at Japan Steel Works M&E, Inc.

Function

Details

R&D to create new technologies, products, and businesses based oncore competencies (RC)

Basic technology research:
Creating new technologies, products, and businesses(Medium- to long-term research)•Elemental technology development:
Strengthening competitiveness of existing products
and businesses(Short- to medium-term development)•

Evolution andstreamlining of
R&D

Strengthening investment in research facility
environments

Improving technology presence

14 JSW Integrated Report 2023

High-priority investment
businesses

New businesses/products
Existing businesses/products

4
3
3

Business to undergo
profit structure reform

1

Businesses to consider
renewed growth

Return on Invested Capital (ROIC)

Business Portfolio

Incorporation of R&D results into the business portfolio

R&D to create new technologies (innovative technologies) (RB)

•

men

Elemental technology development through application of newly created
innovative technologies (DB)•DB

Development with
Basic technology

Formulation of strategies based on intellectual property (IP) analysis andmarket research
Formulation and implementation of R&D plans in accordance with therelevant strategies
Creation of diversity environments facilitating innovation
Improvement of environments to evolve basic research (e.g.,strengthening collaboration with academia in Japan and overseas)
Systematic development of technical personnel (e.g., encouraging
degree acquisition and inter-departmental job rotation)•DC

Development with
Core technology

Core

Basic

•

•

IM HeadquarterstElemental technology development through application of corecompetence (DC)Innovativetechnologies•

Cultivating R&D engineers

Through these activities, this headquarters will, while
embodying JSW Group’s corporate philosophy, play a role incarrying out the Group’s management strategies.

Business Divisions•

Increasing R&D success rates

differentiating technologies in existing businesses,
products, and services

2

th R

 &D related to mechanical systems, including AI technology forR
the entire Group, and support for quality assurance activities• Management of R&D at the Hiroshima Plant and the Meiki Plant

 &D related to electronic devices for the entire Group, andR
support for quality assurance activities• Management of R&D at the Yokohama Plant

4 Improvement of profitability by strengthening

elop

Promotion of
R&D

Device Technology
Laboratory(Yokohama)or new products in line with market trends throughperformance improvements, new feature additions, etc.

Dev

Category•businesses and products in markets
3 Increasing sales growth potential by transforming existing

Businesses withgrowth potential

Technology
MapRB

Research of
Basic technologyRCchPromotion of R&D• Evolution/streamlining of R&D•

Material Technology
Laboratory(Muroran)

2 Improvement of profitability by permeating newCore Competence

Research ofCore technology

earGroup-wide innovation creation
function•

portfolio, making them candidates for new businesses
and products

ResIntellectual Property
Department

Advanced Technology
Laboratory(Hiroshima)

1 Incorporation of R&D products as-is into the businesswith a more unrestricted mindset. Through these activities, wewill create and nurture both hard aspects (device-related
equipment, additive manufacturing, robotics, etc.) and soft
aspects (AI, IoT, big data, design engineering, quality
engineering [service platforms], etc.) that have the potential tosolve issues posed in our Materiality and play a key role in therow

Personnel
Department•

researchers and reform our culture to one that encourages
them to take on new challenges.
The results of research and development will be used tocreate, nurture, and strengthen businesses and products incollaboration with the business divisions, with the following fourmain pillars for integration into the business portfolio.

es G

Innovation Planning
Department(Head Office)Innovation Management
Headquarters

future. In particular, we are working to foster young

development and evolving and streamlining R&D processes tocreate innovation. Research and development is divided into
two major categories: basic technology research, which is
conducted over the medium to long term with the main
objective of creating new technologies, products, andbusinesses, and elemental technology development, which is
conducted over the short to medium term to enhance thecompetitiveness of existing products and businesses.
In particular, we recognize that basic technology research isessential for the continued growth of the Group and for our
progress toward becoming a business group with net sales of¥500 billion. While research and development for new
products and businesses will mainly focus on our corecompetencies, we will also conduct basic technology
research to create innovative technologies not bound by thescope of our existing core competencies. Specifically, we
encourage and make use of exploratory research conductedSal

President

Bolstering Management Foundation for Sustainable Growth

The IM Headquarters focuses on advancing research andate

Corporate Planning
OfficeMechanisms for Creating and Cultivating New Businesses and Products

Enhancement and coordination of external activities, e.g., conference
presentations, paper submissions, and publication of technical reports•

JSW Integrated Report 2023 15

Materiality Management
In November 2022, the Company’s Board of Directors, inorder to make the world sustainable and prosperous,
identified six key issues (Materiality) defining actions for us totake in order to achieve our Purpose. These were identified
based on two priority themes: “Creating value and solvingsocial issues through JSW Group’s businesses” and“bolstering JSW Group’s management foundation forsustainable growth.”
Recognizing the importance of the identified Materiality,
JSW Group practices effective management and businessactivities in order to resolve the issues.
In conjunction with the next medium-term management
plan (JGP2028), which we have begun formulating, we arealso considering targets and indicators with respect to twoareas: “creating value and solving social issues” with respect
to our impact on both society and the environment andeffects on long-term corporate value, and “bolstering
management foundation” mindful of what capital we need tobolster to realize medium- to long-term growth.

Materiality

STEP 1After exhaustively identifying
potential social issues frommegatrends, internationalguidelines, etc., a short list
was compiled based on an
importance assessment.

STEP 2

STEP 3

Realization of
a Plastic ResourceRecycling Society

Discussion by management

Finalization

Using the short list, internal
discussions were held tonarrow down importantcandidates for Materiality.

Similar important Materiality
were grouped after being
broadly categorized as either“creating value and solvingsocial issues” or “bolstering
management foundation.”

Over a period of six months,
several discussions were heldat the upper management levelto check candidate issues’
importance to the Group’sbusinesses and managementfoundation.

Finalized the Materiality andreceived approval from theBoard of Directors.

Outsideexperts

Social needs

Degree of importance to stakeholders: Important materiality candidates

Affinity with our business

Degree of influence on management

Bolstering JSW Group’s
management foundation
for sustainable growth

Contribution to
a Low-Carbon
Society

Inside andoutside officers

ESG Promotion
OfficeCreating value andsolving social issues
through JSW Group’sbusinesses

Board ofDirectors

Contribution toa Super-Smart
Society

Outsideexperts

Assumed External Environment and Related Risks and Opportunities
Risks

Human Capital
Improvement andDiversity andInclusionDifficulty in making products more energy-efficient, rising product costs

Global plastic pollution
Worldwide climate change (CO2 emissions) egradation of trust and reputation among stakeholders due toDdelayed action

Investment in the
Future with
Innovation
Management

Japan’s 2025 digital cliff
J apan’s declining birthrate and aging
population

Opportunities conomic and population growth inE
emerging countries

Demands for recycling and lesser use of plastic resources

Evolution of governanceGlobal spread of electric vehicles (EVs)Spread of power generation from renewable energy
 igital infrastructure development for 5G and 6G communications,D
demand for energy-saving infrastructure overallActivation and diversification of markets

16 JSW Integrated Report 2023

The realization of a low-carbon society is one of themost important challenges faced worldwide. Products
created by JSW Group’s industrial machinery andproducts featuring its new materials have contributed
to the reduction of CO2 emissions. Demand for suchproducts is expected to increase in the future, whichmakes it a matter of high importance for the Group.
In addition, responsibilities of the Group include thereduction of energy consumption of its industrial
machinery products and the curbing of CO2 emissions
from the operations of its manufacturing sites.
The super-smart society is expected to resolve social
issues in all fields, including medical care, food, theenvironment, energy, and disaster preparedness. In
order to realize a super-smart society, it will beessential to build a 5G/6G-compatible digital
infrastructure capable of processing massive amountsof data at high speeds and with low energy
consumption.
The industrial machinery and new materials of JSW
Group are incorporated into the key components ofthe devices that make up the infrastructure, and could
potentially be indispensable to the realization of asuper-smart society. This is also considered to be ahighly important business expansion opportunity for
the Group.

Renewable• 
Contribution to the greater use of non-fossil-fuelderived plastics– Twin-screw extruder (TEX)
ReduceReduce the amount of plastic used– Plastics processing machinery for cellulose
nanofiber reinforced plastics– Injection molding machinery for foamed plastics• 
Contribution to the reduction of marine plasticwaste– All manner of plastics processing machinery forbiodegradable plastics•

Recycle• Contribution to the spread of recycling as a practice– TEX for material and chemical recycling– Injection and blow molding machines for recycledplastics
Zero CO2 emissions• 
Contributions to the popularization of electricvehicles (EVs)– Film manufacturing equipment for use inlithium-ion battery separators– Lightweight on-vehicle parts (e.g., magnesium
injection molding machines, etc.)
Reduction of CO2 emissions• 
Reduction of energy consumption by industrial
machinery products• 
Reduction of CO2 emissions resulting from businessactivities
Infrastructure equipment that is higher performanceand more energy saving• 
Higher performance and more energy-saving ofarithmetic and memory devices– Equipment involved in the manufacture ofelectronic devices– Gallium nitride (GaN) substrates
Input/output terminals that offer higher performance• 
Increased performance of smartphones, tablets,PCs, etc.
– Equipment involved in the manufacture of displays
and electronic components– Substrates for SAW devices

GovernanceReinforcement of
JSW Group romotion of the acquisition and development ofPdiverse human resources
Acquisition:
Proactive recruitment of core human resources,
including executive-level personnel
Improvement of compensation to acquire humanresources with strong expertise
Development:
Early identification and selection of young
high-performers•

The diversification and expansion of our humancapital, including the human resources capable ofdriving the Group’s growth, generating innovation,and creating value, is a matter of the highest priority
and importance for strengthening JSW Group’s
management foundation.

Decrease in the Group’s market competitiveness due to delayed actionDifficulty in maintaining and strengthening human capital

Related SDGs

Bolstering JSW Group’s Management Foundation for Sustainable Growth

Decline in demand for plastics

External environment

As JSW Group aims to be an unprecedented generalmanufacturer of plastic processing machinery in theworld, it is extremely important to supply society withall manner of plastics processing machinery that not
only makes plastics but also realizes 3Rs + Renewable,
a goal which is indispensable for resource recycling.
Since JSW Group can leverage its corecompetence to the maximum, it can demonstrate its
strengths in the development and creation of plastic
processing machinery that meets the demand ofsociety. This is also a high-priority business expansion
opportunity for JSW Group.

STEP 5

Grouping: Important materiality candidates

ESG Promotion
OfficeSTEP 4

Refining the candidate list

Examples of initiatives

Creating Value and Solving Social Issues through JSW Group’s Businesses

Identification Process
Identifying potential
issuesReasons why considered to be ofhigh importanceIn order for JSW Group to continue contributing tosociety in the future, it is essential to maintain andstrengthen its technological superiority by refining its
core competence and expanding its business.
Innovation is another essential factor forsustainable growth. It is important to promote digitaltransformation which supports data-based, rapid
decision-making, business model innovation, and thecreation of new value.
For the sustained growth of JSW Group, it isimportant not only to further strengthen complianceand governance, but also to engage in dialogue withcustomers and investors as well as employees,
business partners, and other stakeholders.
In addition, supplying society with industrial
machinery and new materials of high quality andsuperior reliability is the very foundation of JSW
Group’s business and important to the further
strengthening of its quality assurance structure andsystem.

 trengthen core competence by boosting R&D
S
systems
Increase production capacity and expand businessthrough M&A• Completion of goals of the digital transformation
promotion plan•• trengthening complianceS– Expansion of compliance lines in Japan andoverseas• Strengthening of Group governance– Review of reporting lines• 
Promotion of stakeholder engagement• 
Strengthening of quality assurance structure andsystems•

JSW Integrated Report 2023 17

Realization of a Plastic-Resource-Recycling Society
Plastics Supporting an Energy-efficient Society and Contributing to
CO2 Emissions Reduction
Plastic is known as an indispensable material for modern society because of its usefulness in solving social and environmental
problems, such as the reduction of CO2 emissions when its qualities are properly utilized. The amount of plastic used in theworld continues to increase and is forecast to reach 800 million tons by 2040, about double the current level, and then 1.2
billion tons by 2060.

Lightness

Gas barrier properties

Plastic is a considerably lighter material than paper, glass, or metal. It
contributes to lower fuel consumption of automobiles and reduces the weightof food packaging, and it takes up less space. It has been suggested that if
logistics were to not use plastic packaging, its CO2 emissions would beapproximately 50% higher.

Plastic food packaging shields foodfrom air and water vapor. This
maintains freshness, extends shelf life,and helps reduce food loss.
Reducing the amount of meat thatis discarded also contributes to the
reduction of CO2 emissions during
livestock production.

Plastics

Paper(1.5 times)

Glass(2.5 times)

Metal(7.8 times)

Efforts to Realize a Plastic-Resource-Recycling Society
At JSW Group, we recognize that achieving a circular

We believe that this action will contribute to maintaining higheconomy for plastic resources, that is, a society thatrecycles plastic resources, is both a responsibility and an
opportunity for the Group, which aims to be an
unprecedented general manufacturer of plastic processing
machinery in the world.
In the cycle of plastic-resource recycling, JSW Group
provides various types of plastic processing machinery at allstages, except for resource recovery.
In particular, we are going beyond simply manufacturing
and commercializing virgin plastics derived from fossil fuels,
working to realize a plastic-resource-recycling society bystrengthening our product lines that can contribute to therecycling (especially chemical recycling) stage for plastics.

value for marketed raw materials and products, and to their
ongoing circulation.
In addition, we offer products that contribute to reducing
the amount of plastic used itself, such as mixing biomass
filler with plastic, foaming, thinning material walls, anddevising smart equipment to reduce the amount of waste
plastic generated during plastic molding.
We are also working to provide products and services that
reduce waste generation and the depletion of natural
resources, such as the production of plastic materials
derived from biomass and other non-fossil fuels, andincluding technologies and equipment that make previously
unrecyclable films recyclable.

Maintaining high value of marketed raw materials and products and ensuring their ongoing circulation
Providing equipment that is capable of molding components utilizing recycled plastic raw materials
Providing equipment for material recycling of used plastic components back into plastic pellets• Providing equipment for chemical recycling of used plastic components back to the raw material level (monomers)••

Reducing plastic usage
 roviding equipment for production of raw materials with reduced plastic usage by blending non-plastic fillers such as woody biomassPProviding equipment capable of molding components with less plastic used through foaming• Providing equipment capable of molding components with less plastic used by thinning material walls• Providing equipment capable of reducing the amount of waste plastic generated during molding by devising smart equipment (IoT solutions)•

Moldable with low energy use

Thermal insulating properties

Plastic softens like syrup when heated. In
this state, it can be pulled or poured into a
metal mold, requiring little energy to moldit into a form. For example, estimatessuggest that replacing plastic in the fields
of automobiles, transportation, packaging,and construction with alternative materials
to plastic would increase CO2 emissions
during the component manufacturing
process by about 60%.

In our homes and buildings, plastics
protect us from the heat and cold. For
example, plastic window sashes are
effective in reducing the amount of heat
entering and exiting through windows,
with thermal insulation performance about
2.6 times better than their aluminum
counterparts.

Contribution to the spread of renewable energy

Insulation

Photovoltaic panels and wind turbine
blades cannot be made without plastic.
Thanks to an efficient production
rate for these panels and blades, thebenefits of renewable energy can be
rapidly captured.

Plastic acts as an electrical insulator. Plastic
film several tens of micrometers thick isused in lithium-ion batteries to insulate thepositive and negative electrodes. Plastics
are also essential for batteries, which are thebeating heart of EVs.

•

Reducing waste generation and depletion of natural resources roviding equipment for production of plastic raw materials derived from non-fossil fuels such as biomass and CO2 recovered fromP
power plants, etc.
• Providing equipment for production of mono-material films laminated with a single type of plastic to enable recycling•

Recovered plastic

Plastic pellets(virgin materials + recycled materials)

Recovered plastic

Twin screw
extruders(TEXαⅢ)

Twin screw extruders forchemical recycling

Recycle(chemical recycling)

Twin screw
extruders(TEXαR)

Plastic pellets with a single type of plastic(virgin materials + recycled materials)

Injector molding
Screws formachines
recycled materials Film and sheet manufacturing equipment

Recycle(material recycling)

Molding withrecycled plastic

Recyclable
mono-material film

RecyclersExportMaterial recycling (plastic pellets)
Chemical recycling (monomers)

Social and Environmental Issues Posed by Plastic
Continued use of fossil-fuel-derived plastics in a linear
economy based on mass production, mass consumption,and mass disposal presents a great deal of problems for ourworld. This process depletes natural resources (fossil fuels),
consumes large amounts of energy (from distillation,
cracking, polymerization, etc.) in producing these plastics
from fossil fuels (resulting in CO2 emissions), generates large
amounts of CO2 from incinerating used-up plastics, injures
and kills marine animals when plastics are dumped into theocean, infiltrates our bodies in the form of microplastics inthe food chain, and causes many other problems.
The transition to a circular economy promises a solution tothese issues. In a circular economy, the goal is to balance

18 JSW Integrated Report 2023

the enrichment of people’s lives (well-being) and reduction ofenvironmental impact with economic growth by designing
products and services that reduce waste generation anddepletion of natural resources, and by designing products
and services that reduce raw material usage, and bycontinuing to circulate raw materials and products in themarket while maintaining their value at the highest possiblelevel. Achieving this kind of economy would allow society to
avoid the aforementioned depletion of natural resources andhelp reduce society’s CO2 emissions (decarbonization). It isalso expected that as the circulation of marketed raw
materials and products takes root, there will be a significant
reduction in the amount of plastic dumped into the ocean.

Fossil fuels

Recovered
CO2

Chemicalcompanies

Biomass

Material recycling
Chemical recycling

Recoveringresources

Plastic pellet
production

Commercialization

Renewable
Creating plastics fromnon-fossil fuel materials

Pelletizers Twin screw Twin screw
extruders
extruders(TEXαⅢ)(TEXαR)
Biomass, recovered CO2

ReduceReducing plastic usageby adding filler

Twin screw
extruders(TEXαⅢ)

Twin screw
extruders(TEXαR)

Plastic pellets + filler

Corporations/consumers

Molding ofrecycled plastic

Biomass plastic, biodegradable plastic(plastic derived from non-fossil fuels)
Woody biomass high blend plastic

Heat recovery
Landfilling

Manufacturing
companies

ReduceReducing waste plastic throughmore efficient production

Mono-material films
and sheets
Foam injection
Thin-walled
Reducing
molded products molded products waste plastic

ReduceReducing plastic usage
through foaming

ReduceReducing plastic usage bythinning material walls

Physical foaming
Injection molding machines

Injection molding machines designed
for high load and high speed

Plastic pellets + foaming gas

Plastic pellets

IoT solutions
Plastic pellets(Japanese Trademark registration No. 6568917)

JSW Integrated Report 2023 19

Progress of the Medium-Term Management Plan JGP2025
rocky environment, our consolidated net sales for the fiscal
year reached record highs, at ¥238.7 billion. In particular,sales growth was driven by manufacturing equipment forlithium-ion battery separator films and sheets thanks toprogress in pivoting toward electric vehicles, as well as bylarge pelletizers, backed by growing demand for plastics in
China and India. The most pressing market trends include
growing demand for plastics in emerging countries andincreasing demand for resin raw materials for protective films
used in photovoltaic panels. By leveraging our corecompetencies, we are able to rapidly capture thesedemands and win orders for plastic processing machinery in

JGP2020

From April 2015 to March 2018

Basic Policy/Achievements [] and Issues [ ]Basic Policy/Achievements [(Billions of yen)

Operating income(Billions of yen)

Operating income ratio
ROE] and Issues [ ] stablishment of Japan Steel Works M&E, Inc. (spun off theE
Material and Engineering Business Division)
Began collaboration with Tsukishima Kikai Co., Ltd. and establisheda joint venture with JX Nippon Mining & Metals Corporation
Strengthening of after-sales services (stock-based business)Establishment of parts centers in Japan and Europe, constructionof dedicated service center
Start operation of remote maintenance system
Acceleration in exploration and development of new businesses
Commercialized hydrogen-related business and transferred toJapan Steel M&E, Inc.
Promoted early commercialization of profitable businesses byfocusing on photonics, composite materials, and metal materials
Yet to create new core businesses
Insufficient for further expansion of plastic processing machinerycomplex

JGP2017

FY2015FY2016FY2017

223.3

212.4

212.9

220.0

Net sales

14.4

12.3

21.3

13.0

Operating income

6.5%

5.8%

10.0%

6.0%

– 13.5%– 4.6%

9.6%

8.0%

FY2019FY2020

220.1

217.5

198.0

260.0

24.2

18.7

10.2

30.0

Operating income ratio

11.0%

8.6%

5.2%

11.5%

ROE

16.3%

7.2%

5.1%

14.0%

(Billions of yen)(Billions of yen)

Industrial Machinery Products Business(Billions of yen)

Material and Engineering Business

202.9

200

121.9
100
77.3

112.9
97.6

113.9
105.0

130.1

144.3
118.3

170.2

173.6

171.4

156.3

171.1

126.3

88.2
67.6

159.3

66.2

JGP2020

FY2018

Final year targets

Business Weighting (Net Sales by Segment)

150

Basic Policy/Status of Major Initiatives

merger of Meiki Co., Ltd.; acquired GM Engineering Co., Ltd. as a subsidiary)

Reinforce Group management and promote alliances
Although progress made in small-scale business acquisitions,further need to strengthen alliances

Net sales

Towards the unprecedented general manufacturer ofplastic processing machinery in the world

Optimization of management resources and strengthening of alliances
Expanded plastic processing machine complex (absorption type

Foster new products and businesses and make them competitive assoon as possible
Reorganized the Research and Development Headquarters
General delays in fostering new businesses

Final year targets

Towards the unprecedented general manufacturer of plastic
processing machinery in the world• Continuing to expand production capacity (60 lines/year) of film
and sheet production equipment for manufacturing separators forautomotive batteries in accordance with the advance of electricvehicles (EVs)• Expanding the target market for film and sheet production equipment
for capacitors (electronic components) and other applications• 
Opened the Recycling Technical Center at the Hiroshima Plant• 
Developed a world-standard twin-screw extruder launched in Chineseand Southeast Asian markets• Completed development of and launched large magnesium injection
molding machines (clamping force of 3,000 tons), for which demand is
expected to increase with rising demand for lighter weight automobiles• 
Established a production and service base for injection molding
machines in Europe
Make constant profit in Material and Engineering Business• 
Reviewing product portfolio for high profitability in cast and forgedsteel products
Create new core businesses• 
Further enhancing the product lineup in the electronic device-related
equipment business by developing and launching products such as
next-generation semiconductor-related equipment• 
Began operation of large-scale demonstration equipment for the mass
production of gallium nitride (GaN) substrates• 
Completed and started operation of one of the world’s most advanced
copper alloy material production facilities (currently in stable operation)
Promotion of ESG management• 
Announced endorsement of the TCFD (Task Force on Climate-related
Financial Disclosures)• 
Established the Human Rights Policy• Expanded and revised the Basic Procurement Policy• Established JSW Group corporate philosophy, starting with Purpose• 
Identified Materiality• 
Established the Basic Sustainability Policy• Strengthening governance related to quality assurance (newly
established the Quality Management Office at the Head Office)• 
Stimulating exchange of opinions on the supervisory side, such as atmeetings of the Board of Directors (introduction of the Liaison Councilof Outside Officers)74.8

FY2022 Results
51.2

50

40.8

41.2

42.8

38.5

40.0

Net sales

33.9

2011

2012

2013

2014

2015

2016

JGP2017

20 JSW Integrated Report 2023

2017

2018

2019

JGP2020

2020

2021

2022

JGP2025

(FY)

+24%

13.8

27.0

+44%

Operating income
ratio

5.8%

10.0%

+1.4PP

ROE

7.8%

10.0%

+2.8PP(Billions of yen)

Demand is expected to grow for electric injection molding machines, which excel
in energy efficiency, thanks to the shift toward a decarbonized and energy-efficientenvironment. Compared to their hydraulic counterparts, which are mainstream inEurope, electric injection molding machines offer significantly reduced power
consumption. We intend to capture growing demand by shortening lead times
through local production and responding to diverse needs.

European market share

Power consumption (kWh/h)60%
reduction

JSW share
2-3%
Market size of
10,000 units/year
in Europe as a whole(Calculated by JSW based on theassumption of large size injection molding
machine (850t in clamping force).)

Expected growth in demand for large cast and forgedsteel components for electric power and nuclear
power applications
Due to government policy changes toward energy security and decarbonization, we
expect nuclear power capacity to increase in the medium to long term.
In response, we will provide large cast and forged steel components by leveraging
our extensive development and manufacturing technologies for electric power andnuclear power applications and our knowledge of nuclear power standards in various
countries. Quality assurance requirements for nuclear-power-related products haveincreased dramatically. To address these, we will further strengthen our quality
assurance system and production management functions in contributing to therealization of a low-carbon society as a company that can provide a stable supply ofsafe and reliable products.

Power Generation System and JSW’s Products
Primary System(Steam Supply)
Steam generator

Secondary
System (Power
Generation)
Steam turbine
Generator

Steam
Water
JSW products(Components
provided by JSW)

Pressurizer

Reactor pressure vessel

Change from
FY2019270.0

Operating income
2010

FY2025 Plan

238.7

(Billions of yen)0
2009

In July 2022, we established JSW Plastics Machinery Europe Sp. Z o.o. in Poland,
completing this production facility in March 2023.

From April 2021 to March 2026

Building foundations for the solid growth of
JSW Group in the next ten years

Increase profitability of existing businessesImproved productivity and reduced cost of industrial machinery
products through capital investment
Advanced the Muroran Plant restructuring project

Completed a production facility for injection molding
machines in Europe

JGP2025

From April 2018 to March 2021

Advancing toward top global &niche corporate group

Highlights

Electric

JGP2017each of our business areas.
For fiscal 2023, we project that net sales will reach a levelputting us on track to achieve our goal of ¥270 billion in the
final year (fiscal 2025) of the current JGP2025 medium-term
management plan. In addition, JGP2025 calls for ¥300
billion beyond fiscal 2025, and we are seeking to elevate ournet sales even further to meet this aspiration.
In contrast, our profit levels are not in alignment with ourplan, requiring reassessment of our strategies. It is in thiscontext that we have begun formulating our next mediumterm management plan, JGP2028.

HydraulicWith our current medium-term management plan JGP2025
as a period for laying the foundation for “growing to abusiness scale of ¥300 billion” from fiscal 2026 onward, weare promoting activities that move us “towards theunprecedented general manufacturer of plastic processing
machinery in the world,” the first of our basic policies.
Fiscal 2022 was marked by a number of historic events,
including Russia’s invasion of Ukraine, accelerating inflation
on a global scale, economic sanctions against Russia, andan economic downturn in China, all amid ongoing impact
from the COVID-19 pandemic. On top of that, inappropriate
conduct was discovered at our subsidiary, M&E. Despite a

Reactor pressure vessel
components

Turbine rotor shaft

Generator rotor shaft

JSW Integrated Report 2023 21Strategy by Business

Plastics Machinery BusinessBusiness Overview

Sources of Our Strength

The Plastics Machinery Business Division manufactures, sells
and provides maintenance services for an array of plastic
production and processing machinery (pelletizers, twin-screw
extruders, and film and sheet manufacturing equipment,
spinning extruders, etc.) used in various upstream anddownstream processes in the manufacture of plastic
products. The plastic raw materials and film and sheet
products produced by these machines are used in a variety of
products supporting our daily lives: IT equipment including

smartphones, PCs, tablets, and keyboards; electronicmaterials such as capacitors and semiconductor products;
home appliances; lithium-ion batteries; automotive parts; foodpackaging films and containers; and medical devices such as
catheters; and more.
We aim to become the world’s leading manufacturer ofcomprehensive plastics processing machinery, and our
products account for a significant share of the global market.

Position of plastic manufacturing and processing equipment in the plastic supply chain
Twin-screw extruder (TEX)
for compounding
Global share 20%(Japan share 80%)

Global share 40%

Reactor(petroleum refinery plant)

Large pelletizer

Mixer
HopperFeederTwin-screw extruder (TEX)High performance

Film/sheet

Separator film
production
equipment
Global share
60%

Ultra-large pelletizer

Extrusion molding

Magnesium molding

Messagefrom the Head of the Division
TOP
Messageweight. Moreover, we believe demand for plastics will continue to increase due to a variety ofbackground factors, including global economic and population growth. The Plastics Machinery
Business Division deploys a broad equipment lineup globally. In addition, several products, such as
Seiji Umamotoseparator film production equipment, are in use by the world’s top companies. As such, we are able
Managing Executive Officer
Director of Plastics Machinery
to quickly identify market needs and collaborate with customers to develop products possessing
Business Division
enhanced functionality, productivity, and labor efficiency. Against this backdrop, in fiscal 2022, wereceived orders in excess of ¥100 billion, in line with the previous term, and expect even moreorders in fiscal 2023. We are also conducting aggressive capital investment in anticipation of further future demand growth.
At the same time, we believe that the ongoing shift away from mass production, mass consumption, and mass disposalof plastics, represents both a responsibility and an opportunity for our company. The realization of a plastic-resourcerecycling society is a priority Materiality. We have been working on this issue since the 1970s, earlier than our competitors,
and have been developing chemical as well as material recycling process technologies for decades. In 2022, we opened the
Recycling Technical Center (RTC) at our Hiroshima Plant, and continue to innovate our technology on a daily basis while
conducting testing requested by a large number of customers.

SWOT
Analysis

S

Strengths

downstream (molding and processing) plastics equipment, we can meet any
customer need• The Group possesses technologies ranging from production of special metalO

Opportunities

22 JSW Integrated Report 2023

population growth, particularly in emerging nations• Growing demand for EVs (lithium-ion batteries), plastics recycling,

5G/6G-compatible infrastructure• After-sales service market based on long track record of deliveries

Highlights

needed due to rising living standards and population growth,
especially in emerging nations. As such, promotion of a
resource-recycling society is indispensable. In response, byleveraging the capabilities of our lineup, we will promote theapplication, as required, of both chemical and material
recycling in the plastics recycling field. We believe that ourcore competence (melting, kneading, and molding control
technology) can be applied to the realization of a plasticresource-recycling society.

W

Weaknesses

quantity orders with a high emphasis on large
machines

collaboration with customers, we will expand the value of ourbusiness by restricting waste plastic generated whenequipment is started and stopped.
To cope with the increasing size machinery as well as
rising demand, we are making major capital investments at
our main Hiroshima Plant. We are also promoting a smart
factory shift to further improve the efficiency of our
production system.
Furthermore, to strengthen after-sales service following
delivery, we have been increasing the number of service
engineers in Europe and China since 2022. In 2022, wereceived an order for a twin-screw extruder for chemical
recycling. Going forward, we will continue working to reduce
our environmental impact and identify more business
opportunities.

Contributions of single-screw extruder to solar power generation

copolymer), used as a cell protector for• Long delivery times due to production of small-photovoltaic panels, is rising, and order

Photovoltaic Panel Structure andEncapsulation Film

EVA Demand for Photovoltaic Panels

Increase by approx. 80%

Glassvolume is showing marked growth. Our
single-screw extruders are used in EVA

materials to machining and assembly, and maintains production facilities
equipped for integrated production of large machines• Sustained growth in plastics demand, driven by rising living standards andIn our medium-term management plan JGP2025, we havepositioned the plastic machinery business as one that iscreating profit and driving growth. Specifically, we will further
strengthen the competitiveness of our equipment and expand
our business through aggressive capital investment ofapproximately ¥10 billion, and collaborations and alliances. At
present, we are also working to optimize sales prices.
To prepare for further demand growth, we are using ourhighly evaluated separator film production equipment in a keyrole and developing plastics processing equipment suitablefor production of liquid crystal polymer (LCP) film, which is
5G/6G-compatible, and for increasingly mono-materialized
packaging materials.
We are also working actively to reduce automobile weightwith plastics, and on chemical recycling for plastics. Through

Demand for EVA (ethylene-vinyl acetate• Unique melting, kneading, and molding control technologies accumulated at• W ith a globally unmatched lineup of upstream (raw material production) to

The accelerating shift to EVs, and the pursuit of the carbonneutral society, are driving demand for lithium-ion batteries.
This in turn is a tailwind for our separator film production
equipment. We maintain the largest market share of such
equipment in the world, and to expand that share even further,
we are planning to boost production capacity. We are alsoenhancing the energy efficiency of our production facilities, toreduce CO2 emissions generated during manufacturing.
At the same time, it is predicted that more plastics will be

Strategy and Measures for Growth

Plastics possess many excellent functions and are indispensable materials for addressing a wide
range of social issues, such as energy conservation (CO2 emission reduction) thanks to its lightdomestic and overseas technical centers equipped with one of the world’s
largest testing facilities

and reduce costs, among other benefits.
The ability to manufacture and process all main equipment
components in-house is another of our strengths.
In particular, we are working with Japan Steel Works M&E todevelop metal materials with excellent wear and corrosion
resistance to manufacture screws and cylinders, which arecore equipment components. This advantage is what drives
our high market share.
Furthermore, in addition to our world-first commercializationof machines equipped with plastics extrusion simulation
technology, out production management, operations support,
service and maintenance, and production automation systems,
based on AI and IoT technologies, are making significant
contributions to energy and labor saving as well as
production efficiency.

Operating Environment

PelletCompoundpelletBlow molding

We are proud to possess the world’s most advanced
melting, mixing, and solidifying technologies for plastics.
In addition, our lineup of machinery, with a global top market
share in the plastics product value chain, allows us to meetthe diverse needs of our customers and has earned theirtrust. By combining several of the products we offer, evenhigher-performance and higher-efficiency production lines
are possible.
Through our relationships with the biggest customers in theindustry, experts at our three technical centers around theworld quickly pinpoint the latest needs in plastics processing,and strive to meet them through product development.
We also maintain large processing facilities and specializedmachining equipment, making us able to carry out integrated
production of large equipment, which helps ensure quality

Encapsulation
films (EVA)

plants, and our share of the global market

T

Threats• T ighter global restrictions on plastics use

exceeds 70%.

2021

Back sheet
Cell

2022

2023

2024

2025

(In value terms, compiled by JSW from various materials)• Increasing use of solid-state and other new types ofstorage batteries that do not utilize separators• Growing decoupling of geopolitical risk

JSW Integrated Report 2023 23Strategy by Business

Injection Molding Machinery BusinessBusiness Overview
The Injection Molding Machinery Business Division
manufactures, sells, and provides maintenance services forplastic injection molding machines, magnesium injection
molding machines, and blow molding machines.
Our plastic injection molding machines cover mostinjection molding needs, and feature electrically poweredmachines with excellent environmental performance.
We offer a wide range of machine sizes, from 30 to 3,000
tons of clamping force, and an extensive lineup to meet thediverse needs of our customers, which include verticalinjection molding and special molding.

Sources of Our Strength
We are developing higher-power magnesium injection
machines to perform integrated molding for larger
magnesium parts, which are attracting attention for theireffectiveness in reducing EV weight.
We boast the No. 1 spot in term of shipment amount ofplastic injection molding machines in Japan and the thirdlargest market share in terms of number of units. We are the
top manufacturer with magnesium injection molding
machines that are one of kind and blow molding machinesthat maintain an over 80% share of the direct blow molding
machine market in Japan.

Messagefrom the Head of the Division
TOP
Message

In the march toward realizing our Purpose, we are prioritizing engagement in the Materiality ofWhile we already provide electric injection molding machines with low power consumption andinjection molding machines compatible with recycled and biodegradable plastics, we are expanding
the scope of our contributions. In addition, by stepping up our global reach, we will make the world

Shoji Nunoshitasustainable and prosperous.

Managing Executive Officer
In charge of Meiki Plant
Director of Injection Molding
Machinery Business Division

production facility for large machines, to shorten supply time. As for ultra-large machines, we
expanded our product lineup and started sales of new products. In technology development, we are working to achieve
Material Revolution™, our group Purpose, by commercializing the foam molding process on ultra-large machines andgrowing sales of large magnesium injection molding machines for large parts.
Going forward, we will maintain efforts to offer products in line with our Purpose. In a progressively maturing market,
we will leverage our broad product lineup and in-house component production to deploy energy-efficient products
globally. We will also leverage our environmentally friendly technologies, including weight and material reduction
technologies. Our aim is to further grow net sales, to at least ¥100 billion within 10 years, and become one of the top fiveglobal companies in our industry.

S

SWOT
AnalysisStrengths

O

Opportunities• Production system with in-house development and manufacturing of

numerous key components and materials• Ability to respond and offer recommendations with medium and large

machines, backed by extensive experience, especially in the automotive field• Well-developed domestic and international sales and service network• Increase in new capital investment with the shift to electric vehicles• Rising demand for energy-saving equipment due to soaring global

energy costs• Expansion of needs for eco-friendly technologies (bioplastics, plastic

reduction, effective use of electric power)W• Limited sales track record for small precision molding

and ultra-large machines

Weaknesses

T

Threats

Meiki plants and our overseas production locations, we haveestablished a production system to provide molding
machines that answer customer needs.
We were first in the world to commercialize American
Thixomolding technology for magnesium alloys using
magnesium injection molding machines. Then, to meet thedemand for larger magnesium automotive parts, including
for EVs, we were first to develop and commercialize amagnesium injection molding machine with a 3,000-ton
mold clamping force.
Our products are offered through a well-developed,
directly controlled sales network and through sales
companies at 22 locations (10 in Japan, 12 overseas).
After-sales service is provided through a global service
network, ensuring responsiveness to customer needs.

Operating Environment“realization of a plastic-resource-recycling society” and “contribution to a low-carbon society.”

In fiscal 2022, we established a domestic inventory facility for small machines and a European

Backed by the strength of our comprehensive productlineup, we also maintain a wide variety of equipment at our
technical centers. Our system solves customer problems
and promotes our technological development.
Our advantage in the equipment arena lies in our ability todevelop, design, and manufacture key components,
including wear- and corrosion-resistant metal materials,
highly responsive control devices, servo amps critical tomotor performance, and even special servomotors. Thisenhances the performance of the equipment while ensuring
safe and reliable machines.
We assume customization from the basic design, which isa design advantage. We also have extensive expertise inmedium and large machines for automotive manufacturers,
and our flexibility is a strength.
In addition, through collaboration with the Hiroshima andIn the middle-high to high-end market for plastic injection
molding machines, it is important to grasp market needs
accurately, since investments are made for customers
according to the components to be produced. Integration andscaling up of components, as typified by giga-press andmega-casting advocated by leading EV manufacturer Tesla, isa major trend. In response, we began selling our J-F series ofultra-large injection molding machines in 2021, and aredeveloping other products, including larger opposed twocolor molding machines. With respect to small machines, wehave positioned electronic devices as a priority field to securea rock-solid industry position in small injection molding

machines, since major demand for mass production is
expected. We are working to enhance performance andreinforce supply capabilities to expand market share.
Large automotive components are increasingly made bymagnesium injection molding machines. For this reason, we
are working to expand our lineup of large machines.
We are also expanding our J-WiSeTM AI/IoT solution, torealize smart factories with the aim of improving the efficiency,
not only of individual molding machines, but the entire
molding factory.
(Japanese Trademark Registration Number 6311727)

Strategy and Measures for Growth
We aim to expand the scale of our plastic injection molding
machine business by strengthening our lineup of small andultra-large machines, based on our industry-leading medium
and large machines. Following on our expansion of sales in
China, we have increased our small machine inventory at our
European bases, and established a structure for stable supply
of injection molding machines globally. In the ultra-large
machine category, we have expanded our lineup of spacesaving two-platen machines by launching a well-received
2,500-ton model, following our popular 3,000-ton and
1,800-ton machines. In conjunction, we have begun tomarket such options as foam injection molding, to facilitate
difficult molding tasks.

In the booming automotive field, demand is growing forlarger components and the ultra-large injection molding
machines required to make EVs. We will meet this demandwith equipment that has a small environmental impact.
At the same time, the use of magnesium for automotive
components is increasing, since it is highly suited forrecycling. Thixomolding, which is appropriate for large,
thin-walled casings when rigidity and light weight are required,and magnesium injection molding machines with low
environmental impact relative to die casting methods, areattracting particular attention. The 1,300-ton and 3,000-ton
machines we launched last year have been well received.

• T ightening global regulation of plastics use• Improving performance of Chinese manufacturers

with high production capacity

Highlights

Injection molding machine operation with renewable-power assist

This stabilizer stores power from natural sources and act as an assist in injection
molding machine operation. It is useful for reducing CO2 emissions. In addition,
operation can be maintained temporarily in the event of a sudden power outage,
allowing the system to transition safely to stop mode. Injection molding machines
may require large, transient increases in the power supplied to the servo motors.
The stabilizer batteries can also be used to offset peak requirements, reducing
peak power demand at the plant.
Dedicated molding machine power stabilizer

24 JSW Integrated Report 2023

JSW Integrated Report 2023 25Strategy by Business

Strategy by BusinessIndustrial Machinery Business

New Businesses

The Industrial Machinery Business Division manufactures,
sells, and provides maintenance services for industrial
machines that address social challenges in the fields ofelectronic devices, and infrastructure and lifestyle culture.
The electronic devices category, which accounts for about
90% of sales, includes excimer laser annealing (ELA)systems, vacuum hot presses, vacuum laminators, andelectron cyclotron resonance (ECR) deposition equipment,with demand driven by DX, AI, and EVs. Market demands
change rapidly in this field. As required, we can translate
customer ideas into equipment proposals quickly.
Industrial machinery in the infrastructure and lifestyleculture sector includes couplers and draft gear forpassenger and freight rolling stock, racetrack starting gates,
and food extruders that are also used in alternative meatproduction. Though notaccounting for a large
FY2022 Sales
percentage of sales, many
Infrastructure andlifestyle cultureof our products are leaders
category 12%
in their respective niches.
They are highly regarded by
ECR 10%
customers for quality,
Pressesand
ELA
performance, and service,laminators12%66%
and have consistently
produced stable earnings
over many years.

Messagefrom the Head of the Division
TOP
Message

Electronic device manufacturing equipment is used to produce key components for infrastructuredevices that contribute to realization of the super smart society, and business is projected to
expand. With respect to ELA equipment for manufacturing high-definition displays, our principal
product, we undertook to strengthen profitability by integrating equipment manufacture and salewith maintenance services. We are also expanding sales of new ELA models with new functions,with the aim of becoming the industry leader.
At the same time, our ELA core competence lies in the technology to use lasers to melt andsolidify (from the amorphous to the crystalline state) the surface of display substrates; operational
precision control technology; and machine element technology required to make the equipment
possible. We will also expand our business by applying our ELA core competences tomanufacturing other products, and by entering new markets through M&A.

Messagefrom the Head of the Division
TOP
Message
The New Business Promotion Headquarters willcontribute to realizing a low-carbon, super smart
society through early commercialization of threebusinesses: Photonics, whose core products are crystal
growth and processing of synthetic quartz, gallium
nitride, and lithium niobate; Composite Materials, which
includes lightweight, high-strength, carbon fiber
reinforced plastic (CFRP) products for aviation, defense,and space; and finally, Metallic Materials, which includes
copper alloy materials for advanced copper foil used inconnector and other components.

Growth Outlook for New Businesses
Inorganic growth (e.g. M&A)
New Businesses
Industrial Machinery Products Business
Material and Engineering Business
Net Sales

Business Overview

Takumi Hanamura

Now

2025

Specialist
Managing Senior Councilor
Director of New Business
Promotion Headquarters
General Manager, Photonics
Office, New Business
Promotion Headquarters(concurrently)

Photonics BusinessMiki Sawai
Specialist
Managing Senior Councilor
In charge of Yokohama Plant
Director of Industrial Machinery
Business Division

Business Overview

Operating Environment

Synthetic quartz and gallium nitride crystals are produced in the hightemperature, high-pressure environments created by our large pressure
vessels (autoclaves), using melting and solidifying technologies. In addition
to pressure vessel design technology we have accumulated over years,
our autoclaves for gallium nitride crystal manufacturing utilize proprietary,
Ni-Fe-based large-ingot superalloy manufacturing technology, which
confers excellent high-temperature strength.
In addition to these single-crystal production technologies, we areengaged in manufacture and sale of optical application products anddevice materials, based on our strength in high-precision processing
technologies that include cutting and polishing.

With the further propagation of 5G/6G
communications and IoT devices
offering high speed and capacity, lowlatency, and multiple connections,
there is a growing need for powersaving solutions in an expanding
communications infrastructure. As such, the related-device market is
expected to see annual growth of 10% or more. Applications for gallium
nitride in particular are expected to be found in various fields, including
high-brightness, high-power lasers for energy conservation, high-speed
switching devices, and high-energy-efficiency power semiconductors.

• Thanks to our track record of mass manufacturing, which has been proven

SWOT

S

Strengths• Equipment development and design capabilities to realize solutions todiverse customer needs through new equipment• Cutting-edge test facilities and process engineers with a wealth ofW

Weaknesses• Many niche-leading products, but proven markets arelimited in size

experience and expertise Support system based on the foregoing, andcapacity to solve customer issues

Analysis(Electronic Devices)

at major manufacturers globally, and the reputation of our after-sales
service, we maintain a high share in specific areas of electronic device
manufacturing equipment

O

Opportunities• Growth in demand for electronic device products to realize the supersmart society• Growth in demand for large, high-definition, lightweight displays

T

Threats

Business Overview
In the aircraft field, use of CFRP is increasingly preferred to reduce CO2 emissions by reducing weight andboosting fuel efficiency. To service this trend, our Composite Materials Business is developing molding andprocessing technology for CFRP products, acquiring material design technology, and upgrading its
systems including quality assurance.

• Market entry barriers due to national industry

protection policies• Price competition

Operating Environment

Strategy and Measures for Growth

Demand for electronic devices is growing as digital infrastructuredevelopment accelerates toward the super smart society.
Electronic device manufacturing equipment is expected tohandle increasingly advanced manufacturing processes.
Display manufacturing is driven by quality enhancement intandem with reduced manufacturing costs, while insemiconductors, manufacturing is demanded for the package
substrates that are indispensable for mounting high-end
CPUs. In this environment, our development and design
capabilities are an advantage.
Demand for electronic device manufacturing equipment has
shifted from Japan to China and other East Asian countries.
While the Chinese economic slowdown has had a negative
influence in the short term, we expect long-term demand
growth to be driven by DX, AI, and EVs. Investment inSoutheast Asia and India is also projected to grow.

With respect to ELA equipment for high-definition display
manufacturing, we will undertake to further expand ourmarket share and bolster our maintenance services.
We undertook to differentiate ourselves from the competition
by introducing new ELA equipment and verifying its
performance in mass production, simultaneously achieving
higher productivity, yields, and energy efficiency. Goingforward, we will pursue further development of larger
machines. With respect to maintenance services, we will
focus on China, where approximately 70% of ELA
equipment is in operation, and enhance the capabilities of
local service engineers. We will also pursue a customer
retention strategy built around servicing and maintenancecontracts.

26 JSW Integrated Report 2023

Composite Materials Business

Strategy and Measures for Realizing Profitability
Along with the capabilities relating to standards compliance and quality
control that we have developed through the production defense andrelated equipment, we will leverage the expertise in manufacturing windturbine blades, which are large composite products, that we havecultivated through our wind power generator business, in order to expand

our business as a supplier of composite structural parts for aircraft.
Our aim is to make commercialization profitable while realizing asustainable society by offering composite-material products that promoteweight and energy efficiency for a range of mobility categories.

Metallic Materials BusinessBusiness Overview
As communication speeds and capacities increase, there is a rising demand for titanium copper foils andother copper alloys used in various electronic devices to be thinner and more functional. In order to produce
copper alloy slabs of unprecedented cleanliness and quality, JX Nippon Mining & Metals Corporation and
JSW have jointly established Muroran Copper Alloy, Co., Ltd., and are engaged in business.

Strategy and Measures for Realizing Profitability
By applying our melting and solidifying technologies to copper alloy, we
can produce extremely pure, high-performance metal that remains free of
defects even when rolled as thin as copper foil. By manufacturing suchproducts as titanium copper foil of unsurpassed quality, we will contributeto realizing a super smart society in which high-speed, large-capacity
communications will be indispensable, and create a profitable business.

JSW Integrated Report 2023 27Strategy by Business

Material and Engineering BusinessBusiness Overview
In the material and engineering business, Japan Steel Works
M&E focuses on—and is the world’s sole manufacturerof—large cast and forged steel products for power plants.
The company also manufactures pressure vessels, thickplates, and clad steel plates for social infrastructure and awide range of facilities.
In response to major shifts in our operating environment
toward a low-carbon society, we are further expanding
our lineup of products related to nuclear power andoffshore wind power generation, and are exploring clad
product applications.

Sources of Our Strength
Furthermore, we will continue to reform our product portfolio
and offer a wide variety of materials, (M: materials) not only
steel, but also non-ferrous metals and composite materials.
Based on our welding, non-destructive testing, hydrogen,and composite material product technologies, ourengineering services business (E: engineering) will undertake
to expand sales of hydrogen tanks for large-building
construction and of other products.

As a principal means of realizing a low-carbon society, we will reinforce our materials business
manufacturing (facilities and personnel) and quality assurance systems to respond to new nuclear
power plant construction projects under way in Europe. We will also contribute to restarting
Japan’s nuclear power plants by providing needed replacement components. In the renewableenergy area, demand for offshore wind power is growing, with wind turbine size becoming
increasingly large. In response to this trend, we will boost production capacity for large forgings,

Kengo Takeya

which is one of our strengths. This will include forgings for monopile pile driver equipment forSpecialist
Managing Senior Councilor
Representative Director andPresident, Japan Steel Works
M&E, Inc.
General Plant Manager,
Muroran Plant (concurrently)

wind turbine tower foundations, and we will explore additional applications.
In our engineering services business, we will develop a system to enable us to flexibly adapt totrends in demand for large hydrogen tanks utilizing hydrogen storage alloys, and for pressure
vessels used in production of gallium nitride crystals, a next-generation semiconductor material.
To boost profitability, we are reviewing our product portfolio and restructuring our production
system. Specifically, by redeploying management resources to the large forgings business andreorganizing our manufacturing system for enhanced efficiency, we will secure a profit structure
under which we can continue to offer high-quality products.
We deeply regret the problems caused by inappropriate conduct in product quality inspections,disclosed in 2022, relating to product inspections. We are implementing measures to prevent
recurrence, engaging in ongoing education and training, and creating a system to ensure that suchconduct will not be repeated. All ISO and other certifications revoked in fiscal 2022 have been recertified. We will strive to regain the trust of our customers in particular and all stakeholders in general.

SWOT
Analysis

S

Strengths

thick-plate products• High quality and safety honed in electric power and nuclear power

products• Development technology for high temperature-, high pressure-, andhydrogen-embrittlement-resistant materials

W• Fluctuations in facility operation and operationalchangeovers (difficult to level) caused by our
individual-order production system

Global energy demand is projected to increase under all
climate change scenarios anticipated by the International
Energy Agency (IEA), including the Net Zero Emissions (NZE)
scenario. However, energy generation from fossil fuels (coal,oil, and LNG) is projected to decrease, with increased
reliance on renewable energy, such as wind power.
With respect to potential business impact, new construction
projects for large-scale, coal-fired power plants will decrease.
At the same time, we expect persistent demand growth forgas turbine and combined-cycle power generation, which isalso effective in load leveling for renewable energy
generation, as well as growth in replacement demand forservices. In addition, we project that we will secure a steadylevel of operation and sales of power generation products
amid the withdrawal of some competitors and a
restructuring trend in the industry.
Fossil fuel power generation will decline as we approach
NZE. At the same time, renewable and nuclear power
generation will grow significantly. As such, markets for JSW
Group products are projected to see continued growthunder either scenario.
In our engineering services business, we are installing andrenovating manufacturing equipment and renovating public
infrastructure facilities. As part of our activities to achieve aO

Opportunities

generation market in the direction of carbon neutrality• Changes in the external environment relating to nuclear power generation• Withdrawal/downsizing of competitors, industry reorganization trendhydrogen economy toward becoming carbon neutral, we
expect sales growth in products utilizing our hydrogenstorage technology.
Changing nuclear energy policy in Europe can be
regarded as one of the most pressing shifts in our businessenvironment. A production system is required that can meetthe demand for primary components in new nuclear power
plants.
With material and energy costs remaining high since2022, we are continuing efforts to optimize selling prices andboost productivity to realize a stable profit structure.

Source: Compiled by JSW using data from World Energy Outlook 2022, International
Energy Agency (IEA)

Strategy and Measures for Growth
We project strong demand for large components where
production involves ultra-large steel ingots, one of our areasof strength. Such components include those for nuclear
power generation, offshore wind power-related components,
and back up rolls for heavy plate mills. In response, we will
work to strengthen our production system.
Furthermore, we will expand niche product areas byresponding actively to market needs where our corecompetencies can be leveraged, without being limited byexisting materials or the size of existing products.
In our engineering services business, we will undertake tostrengthen our infrastructure-related product lineup forhydrogen, a promising next-generation energy source. We
will also work with The Japan Steel Works to reinforce our
defense-related production capabilities.

• Capacity to accommodate new demand for small

Weaknesses and medium-sized products and small lot production

Highlights• Expand the hydrogen economy as well as the renewable energy power

the thermal and nuclear power generation industries.
Furthermore, technology cultivated over many years
through design, manufacturing, construction, and inspection
services for pressure vessels such as oil refinery reaction
towers, is serving as a foundation for new product creation.
Examples include hydrogen-related businesses withexcellent growth potential, and pressure vessels to
manufacture gallium nitride crystals, a next-generation
semiconductor material.

Operating Environment

Messagefrom the Business Segment HeadTOP
Message• Facilities and technology to manufacture large steel castings, forgings, andWe combine core competences in melting, mixing, andsolidifying technologies with facilities capable of producing
steel ingots up to 670 tons in weight, which are the world’s
largest. Ingots of the correct size for the product being
produced are forged and heat-treated in a large, 14,000-ton
press, and final-finished by ultra-large machine tools with amaximum processing weight of 400 tons.
In recent years, we have responded to demand for larger
pile-driving equipment for offshore wind turbines by applying
technology developed to satisfy the stringent standards ofT

Threats• Securing personnel (especially at Muroran Plant) due

to decrease in the local population and falling birthrate• Shrinking market for oil- and gas-related products(rapid shift to renewable energy generation)

Nuclear product demand outlook

Changing energy security policies in Europe have stimulatedplanning and new construction of nuclear power plants in EU
nations. Customers expect us to provide principal components

EU Nuclear Energy Policy Trends
Country

realizing the timelines for new power plant construction.
To ensure we succeed, we will boost production capacity andreinforce our quality assurance and production control systems.

• Two European Pressurized Reactors (EPRs) under construction.
• Construction of two additional reactors planned.

for nuclear power plants in conformance with agreed-upondelivery schedules, and we are playing an important role in

Policy, new plant construction• Construction of up to eight large reactors planned.

UK• One EPR under construction.

France•C onstruction of six EPR2 (improved EPR) reactors received government approval.
• Eight additional reactors under consideration.
• Government approved construction of three AP1000 reactors, an advanced

Polandpressurized water design.
• The reactors are on course to enter service in 2030s.

Netherlands• Government plans two large reactors.

Czech
Republic• Up to four large reactors are planned.

(Source: internal company research)

28 JSW Integrated Report 2023

JSW Integrated Report 2023 29

Financial and Capital Strategy: Message from the CFO
We will increase our corporate value
through investment carried out withan eye to portfolio management andthe cost of capital
Hiroki Kikuchi
Director & Managing Executive Officer
CFO, in charge of Finance & Accounting Department,
General Manager of Corporate Planning Office,General Manager of Business Development Office

Perception of Business Environment
In fiscal 2022, the Company reported higher sales and lower
profits. Net sales amounted to ¥238.7 billion, up ¥25.0 billion
year-on-year. Operating income was ¥13.8 billion, down ¥1.6
billion year-on-year. Net profit attributable to shareholders of
the parent company was ¥11.9 billion, down ¥2.0 billion
year-on-year.
The Industrial Machinery Products Business Segment
posted higher sales and profit, mostly due to sales growth offilm and sheet equipment for separators. At the same time,
the Material and Engineering Business Segment reported
lower sales and profit, largely due to product inspection
delays stemming from inappropriate actions.
In fiscal 2022, the Company achieved record high net sales.
At the same time, the year-on-year decrease in profit
translated into an ROE of 7.8%, below the minimum 8%
expected by shareholders. This raised the challenge of closing
the operating income ratio gap through optimized selling
prices and other measures.
In fiscal 2023, we anticipate an increase in sales and profit
over the preceding term. Net sales are projected at ¥280
billion, up ¥41.3 billion year-on-year; operating income is
projected at ¥18.5 billion, up ¥4.7 billion year-on-year; and net
profit attributable to shareholders of the parent company is
expected to be ¥14 billion, up ¥2.1 billion year-on-year. We
also anticipate an ROE of 8.5%.
We expect an increase in sales and profits in the Industrial
Machinery Products Business Segment due to expanding
sales in each product lineup. In the Material and Engineering
Business Segment, we expect sales and profits to rise due tohigher sales of nuclear power products, etc., once we haveestablished a thoroughly revamped product inspection
system.
With respect to progress toward the goals of the JGP2025
medium-term management plan, we first of all expect toreach our fiscal 2025 net sales target of ¥270 billion two years
ahead of schedule, in fiscal 2023. However, our same-year
operating income forecast is ¥18.5 billion, which represents asignificant difference from the fiscal 2025 target, which is ¥27
billion.
JGP2025 was established with the long-term goal ofgrowing sales to ¥300 billion. However, we currently expect
30 JSW Integrated Report 2023

orders of ¥338 billion in fiscal 2023. We anticipate reaching
our long-term goal of ¥300 billion in sales in fiscal 2024.
As noted, while we are on track to achieve not only our
final-year sales goal of JGP2025, but also our long-term goal
for net sales, projected profit nevertheless remains far fromthe JGP2025 target. We therefore believe it is appropriate toreview our corporate value enhancement strategy from top tobottom. We are currently drawing up the next medium-term
management plan JGP2028 (fiscal 2024–2028) while JGP2025
is still in effect. In formulating JGP2028, we will set a net sales
target of ¥500 billion in fiscal 2033, which will be the final yearof the medium-term management plan that comes after
JGP2028. We will also clarify specific details during theformulation process, including efforts to address Materiality
and enhance business value sustainably through fiscal 2028.

Basic Financial Policy
JSW Group’s basic stance to enhancing corporate value is to
do so by increasing profits through sales growth. Sales
expansion involves aggressive investment, including thecapital investment required to increase production capacity.
However, we believe that in making such investments, it isincumbent upon us to direct careful attention to the cost ofcapital and our financial soundness. For this reason, JSW
Group’s basic financial policy is “based on the premise of
ensuring sound finances, to proactively invest for sustainablegrowth to realize the enhancement of corporate value while
always maintaining an awareness of the cost of capital.”
Based on this policy, our group uses sales, operating
income, and ROE as KPIs, and we strive to manage ourbusiness not only for quantitative expansion, but also with aneye to the cost of capital. In addition, to ensure our financial
soundness, we have set an equity ratio target of 40% or more
to maintain our current creditor rating (R&I) of A or higher.
To continue creating social value and enhance corporate
value sustainably to realize our Purpose and Vision, it isimportant to sustain the smooth functioning of the Value
Creation Process. Enhancement of various categories ofcapital is indispensable for this goal, and efforts to this end
are progressing in general in accordance with the cash
allocation plan. To cite an example, with regard to

manufactured capital, JGP2025 plans capital investment of¥45 billion, of which a cumulative total of ¥27.8 billion (62% of
the total investment target) is planned to be carried out
through fiscal 2023. With respect to R&D investment, we plan
to invest ¥30 billion under JGP2025, with a cumulative total of¥16.7 billion through fiscal 2023 (56% of target). In April 2023,
we undertook to strengthen our R&D structure by establishinga new Innovation Management Headquarters. Going forward,
we plan to further increase our overall R&D investment.
M&A remains a challenge, and though we have set aninvestment target of ¥30 billion, we have yet to make any useof these funds. We continuously seek opportunities to acquirecompanies and businesses that can drive further growth byutilizing our core competence of melting, mixing, andsolidifying technologies combined with machine element andprecision control technologies.
Income from business activities¥110 billion

Capital investment¥45 billion

R&D investment¥30 billion

Shareholder Interestbearing debt
returns
repayment¥20 billion ¥15 billion

Utilization of
low-profit assets¥30 billion

M&A
investment¥30 billion

Additional
investment (cashon hand and debt)
in promising M&A
opportunities

Mechanisms to Realize the Basic Financial Policy
Business portfolio management
The Board of Directors has reviewed and approved basic
policies relating to the business portfolio on an annual basis
since fiscal 2021.
After ascertaining the state of each business by plotting it
on a four-quadrant matrix encompassing return on invested
capital (ROIC-WACC spread) and sales growth rate, themarket potential and competitive advantage of each businessare factored in to bring its respective ten-year vision, as wellas the basic policies required to realize the vision, into focus.
In addition, beginning in fiscal 2022, we are deepening our
grasp of the current situation by formulating a risk-appropriate
WACC for each business.
Regarding businesses with large net sales, we arepositioning plastic production and processing machinery as
well as injection molding machinery as high-priority investment
businesses. Their markets are expected to grow, and weshould be able to secure competitive advantage. As such, wewill invest aggressively to maintain or increase the sales
growth rate and return on invested capital.
We are currently positioning the material business as aprofit structure reform business. However, because we
maintain competitive advantages backed by a strong
technological foundation—for example because demand forelectric power is projected to have limited downside due to a
global shortage of electric power, and because there are
numerous products that only our group is capable ofmanufacturing, among other factors—we are reviewing our
product portfolio and optimizing selling prices to enhance our
return on invested capital.

Investment adoption criteria formulated withawareness of the cost of capital
The Group is making capital investments aggressively to
expand sales. To consider carefully whether or not ourinvestments truly contribute to enhancing shareholder value,
we use the NPV method* to verify the true benefit of suchinvestments. The WACC specific to each business is also

used as the discount rate when using the NPV method.
Our business portfolio management and investment
adoption criteria function in tandem. We aim to improve theequity spread of the entire group by enhancing the return on
invested capital in each of our businesses.
* NPV (Net Present Value) method: an indicator for showing how much value canbe derived from a given investment.

Optimal level cash and deposits
To maintain financial soundness while engaged in aggressive
investment, the Group maintains a floor of cash and deposits.
Specifically, the level of cash and deposits will be maintainedat ¥60 billion, equivalent to two months of sales plus
additional funds to cover short-term peaks in capital demand.

Shareholder Return Policy
Our basic policy regarding the return of profits to shareholders
is to pay stable and continuous dividends and to improve thedividend payout ratio. In addition, in order to increase both
corporate value and shareholder value, we will continue toensure the stable profitability of our current businesses while
promoting capital investment and R&D investment for thegrowth of new businesses and products, while also striving to
improve the financial basics of the Company.
Under JGP2025, we will aim for a consolidated dividend
payout ratio of 30% or more and to pay consolidated
dividends based on a dividend on equity (DOE) ratio of 2% orhigher. In fiscal 2022, we paid an annual dividend of ¥58 pershare, and the dividend planned for fiscal 2023 is also ¥58.
In formulating JGP2028, we will ensure financial soundness
as we consider the optimal balance between investments for
growth on the one hand and shareholder returns on the other,from the perspective of whether it may be possible to boost
shareholder returns without impacting corporate growth.
(Yen)
100

Dividend per share (left axis)
Consolidated dividend payout ratio (right axis)

(%)
50

80

40

60

30

40

20

20

10

0

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)0

To Our Shareholders
The Group aims to realize its Purpose and Vision bycontinuing to create value for society and enhance sustainablecorporate value. To gain the understanding and support ofshareholders and investors with respect to our diverse efforts
to achieve these goals, it is essential that we provide
information in a timely and appropriate manner, and that weapply the input we receive through active dialogue to ourmanagement. We also believe that our active efforts todisclose information and engage in dialogue with shareholders
and investors will reduce our cost of capital and contribute toenhancing corporate value.
We will continue striving to realize our Purpose and Visionby undertaking to enhance the capital sources that permit the
Value Creation Process to function smoothly at all times under
our basic financial policy. As such, we look forward to thecontinued support of our shareholders.
JSW Integrated Report 2023 31

DX Strategy

D-Pro Implementation Plan

As Is vs. To Be
Based on its corporate philosophy—which includes our Visionand the Value Creation Process that starts with our Purpose—
JSW Group recognizes that to become a business group with
net sales in the ¥500 billion range, we must boost operational
efficiency and develop a system environment that enables
speedy, data-driven decision making. First, we must promote
digitization and digitalization while resolving the maintenanceand management challenges of increasingly complex andaging business support systems, and tie this to DX (Digital
Transformation) to bring about continuous business process
reform and to transform products, services, and businessmodels. To achieve this, the Digital Transformation Promotion
Project (D-Pro) is promoting a wide range of measures torealize the To-Be State.

To Be
Restructure information network into data lake, realize data-driven
management

Hire a fully sufficient number of DX personnel and enhanced IT literacy

• 

• 

Promote DX to help lay the foundation for a business group with net
sales in the ¥500 billion range, through corporate culture renewal,business process reform, and business model evolution

We are launching projects according to the roadmap, withcost and production control as well as quality assurance

activities according to the implementation plan for eachfunctions of production-related systems, and promote

project. The PDCA cycle is applied to each activity throughthe D-Pro Plenum.
The framework of implementation plans can be broken
down broadly in (1) sales-related systems, (2) productionrelated systems, and (3) information-related systems.
Consolidation and renewal of legacy systems in sales- andproduction-related systems to lower operating costs andpromote data collaboration. Eliminating the time and effort
required for data conversion will greatly enhance reporting
speed. Furthermore, strengthen such sales-related systems
functions as customer, competitor, and market information
management, and market forecasting. We will strengthen thestandardization of products and manufacturing.
To manage risk, we will launch these systems on a small
scale in selected business divisions, then roll out successfulmodels to the Company as a whole. We will promote thestructuring of a foundation for data-driven management byprocessing the data produced by these systems to makepossible its use in management decision making, andpresenting it through information-related systems. To advance
this action plan on a steady basis, we will maximize effective
use of internal resources. Where resources are insufficient, we
will collaborate with third parties to strengthen inter-businesssynergies and realize an All JSW structure.

• 

Encourage maintenance cost reduction and value-added investment
through core system integration and renewal• 

Enhance operational efficiency of routine work through digitization,
paperless work, and remote work

• 

Customer A

Salesrelated systems

Productionrelated systems

Board of Directors

Progress reports twice a year

Concept
To-Be stateSpecific measureexample2

 verall project management
OBudget management
Progress managementom
mitDigital transformation for
information linkaget e e s a nd t a skfExternal partnercompanies

PlantsManufacturing management
digital transformation

Consultancy,
IT vendor coordination

Ofﬁce of Information
Technology
Coordination andalignment of systemdevelopment,
infrastructuredevelopment, etc.

Value Added JSW

FY2028Phase(Digitalization)

3

New JSW Model(Digital Transformation)

Partial digitalization of operational flow
Enhanced value chain value-added

Overall digitalization of specific businessprocesses
New value creation

Digitalize the Company’s overall businessTransform business model and corporate
culture itself

From discrete optimization to overall
optimization

Strengthen individual businesses

Strengthen inter-business synergy(All JSW structure)• ppreciation of IT-ification merits by allA
employees
DX buy-inStrength promotion structure, accelerate
promotion

System consolidation and reformStandardization• 
Visualization Share value and challenges• 
IT education and awareness raising
Enhance employee productivity•

32 JSW Integrated Report 2023

“ Information-ize” existing products andservices
Strengthen profitability of products andservices• Realize data-driven management•

Adopt global web catalog• 
Adopt e-commerce system• 
Adopt digital marketing• 
Deploy services utilizing IoT/AI•

Business
Division C

Plant A

Plant B

Plant C

Salesrelated systems

Business
Division A

Business
Division B

Business
Division C

Productionrelated systems

Plant A

Plant B

Plant C•

Establish new business model
Jump to manufacturer-based service
businessStrengthen smart factory capabilities• 
Expand business through digital marketing• 
Develop new services that use IoT/AI• 
Deploy global DX•

Information System, Investment Plan and Personnel Plan
By promoting D-Pro, we aim to boost the ratio of Value Up (VU; value-added creation in the business) relative to Run the Business(RB; the investment in facilities required to maintain and manage existing data systems). In fiscal 2023-2024, we plan to boost theratio of VU information system investment to at least 43%, which exceeds the minimum ratio of 40% recommended by the
Ministry of Economy, Trade and Industry. We are also planning to expand investment in information systems to 0.8% of net sales.
Improving IT literacy for all employees is anotherimportant D-Pro theme. We will conduct basic IT education
Information Systems Investment Plan
to boost the level of IT literacy systematically. We are also
Value up (VU)
Run the business (RB)VU ratio
providing special reskilling training to employees who are
250
50
interested in, or otherwise have high potential to learn
44
43
digital technology, to expand the number of those using
200
40
and spreading the technology.
We must also expand the number of system developers
150
30
and security management engineers in the Information
100
20
Technology Division, and project managers in the Office ofDigital Transformation, through education and hiring.
50
108
We will shift our emphasis from RB to VU personnel
00through various types of training, internal recruitment,
2022
2023
2024
(FY)
rotation, and invitations to external collaborators.

VU ratio (%)

•

s

•

Affiliated companies,
overseas officesce•Sales and sales
management digitaltransformation

c
Su b

Phase

(Digitization)

Business
Division B

IT investment total (FY2022 as 100%)

D-Pro Ofﬁce

Ofﬁce of Digital
Transformation

Business management,
accounting, generalaffairs, HR digitaltransformation

orBusiness divisions

tees and ta
sk
mit
m

s
rce
fo

Alignment ofmanagement strategy
with digital transformationand strategy

FY2025One JSW

Business
Division A

Corporate divisions

Sub
coManagement

D-Pro/Roadmap

1

Customer B

D-Pro/Promotion Structure

FY2022Phase

Customer A
Informationrelated systems

Roadmap and Promotion Structure for Digital Transformation Promotion
Project (D-Pro)
To structure the overall D-Pro vision, we collaborated withthird-party consultants to characterize the As Is, formulate the
To Be, and create a promotion policy and roadmap to realize
it. First, in Phase 1: One JSW, we are undertaking to movefrom discrete optimization to overall optimization. We areaiming to strengthen individual businesses in Phase 2: Value
Added JSW. Furthermore, in Phase 3: New JSW Model, we
will coordinate to strengthen synergies between businesses(All JSW structure).
To promote D-Pro, the Office of Digital Transformation(diagram on the right) was launched in July 2022 as a dedicatedorganization to manage collaboration between all corporate
divisions. Further, a D-Pro Plenum was launched to confirm andpromote the implementation of each project based on a roadmap.
The plenum established committees and subcommittees foreach project. Members of business divisions benefitting fromsystem implementation were encouraged to participate as’committee owners and in other capacities, to achieve a
promotion system that can achieve highly effective results.

Customer B

D-Pro Progress Evaluation
Using the DX promotion index recommended by the Ministry of Economy, Trade and Industry, we will periodically and quantitatively
evaluate DX progress in comparison with global trends. As necessary, we will make corrections to appropriate activities to promote
the improvement of the DX level efficiently.

JSW Integrated Report 2023 33