Laboratory Tour (Kurita Innovation Hub)

January 16, 2023
Kurita Water Industries Ltd.

© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

Contents

1

Innovation at Kurita and the Role of the Kurita Innovation Hub

p 3 -122

Cutting Edge Water Treatment from the In-depth Pursuit and Fusion of Technologies

p13-233

Creating Business Models to Solve Social Issues

p24-31

4

Kurita’s DX Efforts

p32-37© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

2

Innovation at Kurita and the Role of the Kurita Innovation Hub

Yoshio Yamada
Managing Director, Executive General Manager of Innovation Division© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

3

Where Innovation Fits in Kurita’s Value Creation Story
Technology Development Capability serving as the starting point for diverse solutions
Major Trends Facing the Kurita Group
Damage to Social
Infrastructure
Caused by Climate
ChangeChanges in Work
Styles andLifestyles

Technology
Development
Capability

Diverse Pointsof Contact
with Sites

The Advance of
Globalization andIncreasing WealthInequality

Changing Energy
Policies

Advances in Digital
Technology andInnovation
Acceleration

etc.

Identifying
True Issues

Water knowledge
Operationof WideRanging
Businesses

Fresh Water
Scarcity andUneven Water
Distribution

DiverseSolutions

Changing Society
and Industries
with Water
knowledge

Maximizing
Customer
Value

High Profitability
and Sustainable
GrowthDiverseBusiness
ModelsWinning the trust ofcustomers and society
and building asustainable society© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

4

Innovation Promotion System
Consolidating marketing functions and development functions to produce innovation
Marketing Functions

Development using
Basic technologies as astarting point

IM

Creation of business plans
aimed at solving social issues(Innovation Marketing)IB(Innovation Basic Technology)
Development of innovation
leading to social and customer
value with technology as thestarting point

The fusion of marketing andinnovation, and the formulationand execution of IP strategies onthat basis

Kurita Innovation Hub

IC(Innovation Carbon Neutral)
Development of innovation
to help achieve carbon
neutrality and a circular
economyDX- Business- Management- Work styles

The core site for the creation of innovation© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

5

The Role of the Kurita Innovation Hub
A hub of technological innovation and social change where a diverse range of
people from inside and outside Kurita gather, learn and connect
Universities
and research
institutions
Corporate
customers

Full utilization of knowledge and expertise inside and outside the Group, open innovationGroupdevelopment
sites

Kurita Innovation Hub
Dissemination of technicalinformation contributing tosocial and customer value,
co-creation of solutions

Local
community

Technical education andtraining of Group humanresources

Disseminating information on technical competitiveness and development trends

Employees

Shareholders
and investors© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

6

Promoting Cooperation with Group Development Sites
Japan

Kurita Innovation Hub

Germany

Kurita Europe Technology Center

UnitedStates

Universities
and research
institutions
Avista Technologies,
Inc.

SingaporeGroupdevelopment
sites

Kurita R&D Asia Pte. Ltd.

Courtesy to JTC© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

7

Evolving R&D
Testing facilities also aimed atdeveloping into open innovation

Corporate
customers

Outstanding analysis capabilities
building a competitive advantage

Universities
Groupand research development
institutions
sites

Promotion of R&D utilizing actual
facilities© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

8

Development of the Group’s Human Resources
Technology transfer and the development of
human resources with technical expertise

Corporate
customersGroupdevelopment
sites

Employees

Information delivery functions© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

9

Deepening Understanding of Kurita
Corporate displays catering to various needs

Corporate
customers

Universities
Groupand research development
institutions
sites

Local
communitySocial studies tours, workplace experiences, etc.

© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

10Mechanisms to Promote Innovation
Activity Based Working (ABW), a new work style

Employees

Engaging in tasks while inconversation with those around you
Joint work among multiple people

Brainstorming
Information sharing, discussion
and workshops

Web conferencing and longtelephone conversations

Intensive individual work overshort periods
Data sorting and report preparation

Rest and restoring
concentration
Casual conversation© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

11

Innovation Creation Activities
The symbol representing the Kurita Group’s R&D activities
From One Drop, To Earth.
The symbol incorporates our R&D aspirations, where a small drop created through our R&D activities
expands into a massive solution on a global scale by connecting a diverse range of human resources andwide-ranging knowledge both internally and externally, in turn creating a brighter future for our planet.

© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

12

Cutting Edge Water Treatment from the In-depth Pursuit
and Fusion of Technologies

Katsunobu Kitami
Senior General Manager of Basic Technology R&D Group, Innovation Division© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

13

Technology-Driven Development Approach
Development of innovation leading to social and customer value
with technology as the starting point

Core Technologies

Analysis

Various products and services basedaround chemicals, equipment andmaintenanceContinually maintaining points ofcontact with entire plants in a various
industries

Corrosion
prevention
anddispersion

Fluid
process
analysis

Purification
andmodification

Water knowledge

Coagulation
andcondensation

Core Technologiesof the Kurita Group

Biologicalengineering

Deionization
andadsorption

Sterilization
andbacteriostasis

Membraneseparation

Diversifying and accumulatingknowledge in the Group through M&A
activities
External networks(Alliances, joint research)

Maximizing Customer Value

Solving Social Issues

Winning the trust ofcustomers and society andbuilding a sustainable
society

Diverse Points of Contact with Sites© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

14

Kurita’s Priority Research Themes
Kurita is concentrating our available resources on five themes to accelerate development
Project Acorn

Technological development and technical support advancing the rollout of RO
membrane solutions

Ultrapure water

Development of new technologies and new products for
microelectronics industries

Suppression andcontrol

Development of more in-depth technologies and new products for bacteriostasis,
dissolution, corrosion prevention and dispersion, etc.

ｲﾒｰｼﾞ
図

Separation anddecomposition

Development of more in-depth technologies and new products for bio - and physicalchemistry, membranes and ion exchange, adhesion, and so on

ｲﾒｰｼﾞ
図

Development of more in-depth technologies and new products for analysis
and measurement

ｲﾒｰｼﾞ
図

Analysis andsimulation© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

This will
be our
focus
today

15

History of the Evolution of the Electronics Industry
and Water Treatment
Providing high purity cleaning water, purification technologies, recovery and efficient
treatment of water and valuable resources to meet the needs of semiconductor
dimensional scaling, manufacturing process transition and reducing environmental impact2022
Launch of the ultrapure
water supply business[Current needs]
1971
Entry into the electronics industry
Delivery of ultrapure water production
systems

1992
Establishment of world-classtechnologies to micro-analyze theelements contained in water

Economic growth period

Semiconductor
dimensional scaling
Manufacturing processtransition

Information society development
Diversifying needs
Growing environmental
awareness
1985
Launched a precision toolcleaning business for thesemiconductor market

1988
Received orders for continuous
recycling-type ultrapure waterproduction systems© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

Reducing environmental
impact1998
Development of functional waterproduction equipment forelectronic material cleaning
processes
16

Water Treatment for the Electronics Industry© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

17

Responding to Semiconductor Dimensional Scaling(1) Ultrapure ion exchange resin (KR-FM) enable to treat metal and particle in water to the world top level lower concentration.
(2) Kurita’s piping cleaning method enables swift start-up of ultrapure water production system for new Fab operation.
(3) Pre-cleaned Ultra Filter (UF) enables minimum lead time operation after UF maintenance(replacement).

(1) KR-FM(3) Clean UF

写真準備中(2) Piping cleaning
全体像© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

18

Responding to Manufacturing process transition(1) Functional water production equipment and its cleaning technologies (Cu/Co dissolution control technologies, etc.) for cutting-edge
semiconductor manufacturing processes(2) Reducing of high concentrate sulfuric acid consumption and environmental loading impact by an electrolyzed sulfuric acid generator (Green
Sulfaceed KD)(1)Functional water production
equipment
Rinse

Conventional
UPW

Dissolution
control water

Co dissolved

Co preserved(2) Green Sulfaceed KD

Crosssection ofwire layer© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

19

Reducing Environmental Impact(1) The CORR system enables stable, cost-minimum operation with a compact system for water reclaiming.
(2) Enabled efficient wastewater reclamation through the source separation of wastewater in the customer’s manufacturing process(3) Responded to the need to eliminate waste and reduce the environmental impact by applying highly efficient functional materials and employing
operational management technologies based on AI with situational awareness(4) Employed technology to remove valuable resources from waste to reduce the amount of waste itself and promote reuse(3) Variable flow primary pure water
systemReduce power costs(CO2) due to theexcessive transportation of water, andenable water saving by optimizing waterproduction volume based on usage ofcustomer FAB(Under consideration at KIH)

(3) Extreme ultra-low pressure RO
membranes
Enable reduction of power costs (CO2)through RO membranes that can be
operated at around half the pressurecompared with conventional (ultra-low
pressure RO membranes) products(2) Process wastewater source separation
Enable efficient wastewater reclamation and treatment by ascertaining
the properties of process wastewater in detail and performing
wastewater separation based on subsequent water treatment© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

(1) CORR system(3) AI-driven operational management
technologies- Aeration volume control technologies
for bio-treatment- RO membrane operational
management technologies(4) Recovery of valuable materials technologies- Energy creation through methane fermentation
technologies- Recovery of valuable materials technologies (HF,
ammonia, etc.)

20

Kurita’s Competitiveness in the Provision of Solutions
Kurita’s Strengths
Data[Current needs]

Semiconductor
dimensional scaling

Technology
Operational management technologies© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

Joint venture with Fracta (AI, etc.)

Micro-analysis technologies
Ultrapure water technologies
Joint ventures with material manufacturers, etc.

Manufacturing processtransition

Reducing environmental
impactWater supply sites, water treatment sites not
limited to the electronics industry

Wastewater treatment andwastewater reclamation technologies

Synergy between technologies such as
membranes, chemicals and biotech

Mechanisms Supporting Innovation
Points of contact in the field of
cutting-edge semiconductor
development

Collaborative research with imec and dispatchof engineers

Facilities to Delve Deep into
Technologies and Support Products

KIH, high performance resin and membranecleaning plantCore Technologies of the Kurita Group

Various field data21

Points of Contact in the Field of Cutting-edge
Semiconductor Development
Collaborative research with imec and dispatch of engineers- Kurita has dispatched researchers to a cutting-edge semiconductor technology research site (imec). Since 2014,
we have been promoting an understanding of the next-generation semiconductor manufacturing process andconducting exchanges with the engineers of cutting-edge semiconductor manufacturers- We are promoting the early implementation and development of solutions including cleaning technologies,
improved ultrapure water production and a reduced environmental impact for next-generation semiconductor
manufacturing processes

imec research site (Belgium)© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

22

Facilities to Deep into Technologies
KIH (Kurita Innovation Hub)

- Performing wafer cleaning using various
types of functional water in clean rooms.
Through assessment of wafer surfaces andtechnologies to analyze the water quality of
the ultrapure water and functional water
used, we ascertain effects and evaluate theimpact on water quality, cleaning methods,
wafer cleanliness and processes.

© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

- We continue to develop technologies tomicro-analyze the content of ultrapure
water. By identifying issues forguaranteeing high-purity water quality
and producing high-purity water, we arecontinually producing and guaranteeing
ultrapure water of the highest purity.

- Data verification at actual scale utilizing
KIH’s water treatment facilities- We have set up open laboratories in clean
rooms and general-purpose labs toaccelerate co-development withcustomers and collaborative
manufactures23

Creating Business Models to Solve Social Issues

Hiroyuki Suzuki
Senior General Manager of Carbon Neutral Group, Innovation Division© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

24

Approach to Creating Business Models to Solve Social
IssuesConsidering draft business plansto address social issues from three starting points
Customer/market needs, technological seeds,
and cooperation between companies

Feasibility study and validation ofcandidate business models
Social value, competitive advantage, market feasibility, etc.

Refining proposed business models
Utilization of outside resources, internal and external
communication, verifying value with customers (PoV), etc.
© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

25

Axes of Business Model Creation
Contributing to carbon neutrality and the circular economy along the dual axesof water treatment and resource recycling

This will be
our focus
today

Contributions using water
treatment technologies andservices as a starting point

Contributions through resource
recycling technologies(1) Thorough energy savings in water
treatment and achievement ofcarbon neutrality(2) Recycling of waste liquids and otherwaste(3) Establishing energy creation
processes(4) CO2 recycling© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

26

Contributions Using Water Treatment Technologies
and Services as a Starting Point
The Kurita Group’s Solutions⚫ Water saving/effective use of water resources

Waste disposal⚫ Energy saving⚫ Waste reduction⚫ Improved production efficiency and productquality

Wastewater
treatment

Waste reduction

Wastewater
reclamation

Recycled water
Water saving

Water purification
Reclamation ofvaluable resources

Utility energy
savings

Cooling towers
Refrigeration systems
Water treatment
facilities
Reducing CO2 emissions throughKurita’s comprehensive
capabilities

Water
treatmentchemicals

Maintenanceservice© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

Boilers

Manufacturing
process
Yield increase
Reduced emissions per
production unit

Ultrapurewater
treatment
Reducing, reusing
and recycling
water

Water
treatment

27

Contributions Through Resource Recycling Technologies
To date, the Kurita Group has cultivated a wide range of water treatment technologies thatremove solid matter or dissolved foreign materials from water to enable its reuse.
If we use and further refine those technologies, we should be able to turn the foreignmaterials that have been removed into usable valuable resources.

Recycling Technologies

Waste liquid andother waste

(W)

to

Valuables(X)

Valuable resource (x) = water, methane, electricity, fuel, NH3, P, rare metals, plastics, fertilizer, feed, etc.

© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

28

Recycle of Used Diapers
Contribute reduction of CO2 emission through material recycle
Issues

Kurita’s Solutions

The amount of disposed adult diapers has
increased due to population ageing- Incineration cost of local municipalities has
increased
Used diapers contain a lot of moisture which makes themdifficult to burn. It requires higher temperature above 800
degrees, which is higher than usual. This introduces various
issues: maintenance of furnaces, rising fuel costs, andconcerns about an adverse impact on the environment.

- Disposal cost at elderly care facilities has
increased
Handling of diaper waste is hard work and burdens of staff.
Unpleasant odors at waste storage locations is anotherproblem.

© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

Used
Diapers

Plastics

Diaper Separation System(Kurita SAMS System)

Superabsorbent
polymer

Pulp

29

Wastewater Treatment System using Microbial Fuel Cell
Create energy and reduce CO2 emissions from wastewater treatment
Issues

Kurita’s Solutions
Anode

Industrial wastewaters are commonly treated byusing conventional activated sludge process toobey regulations for discharge to sewer system
or rivers and sea so to protect water
environment.

-Large amount of electricity is required for
aeration-CO2 emissions increase due to the treatment
and disposal of large amount of excess sludge.

Treatedwater
Powergenerating
bacteria

Wastewater

Oxygen reduction
catalyst

Exhaust air

Microbial Fuel Cell

Wastewater (organic matter)

Power generating bacteriaoxidize organic matter inthe water.
© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

Air

Separator

However,

CathodeGenerating electric power fromwastewater is realized

Oxygen is catalyticallyreduced in the air.
30

Future Direction
Leveraging the various points of contact we have in the field as a strength,
we will create innovations that help realize a decarbonized society.
Promoting biomass
utilization

Reducing the use of
petroleum
resources

Space station
Geothermal
power plant
Mine and smelter

Solar power

AirportSugar
production plant

Development of ahydrogen-basedsociety

Hot spring
inflow river(purification)

Forestry

Livestock

Reducing CO2
emissions

Sewagetreatment plant

Soil and groundwater
remediation

Culture farm
Urban methane
fermentation
Plant factory
Crop production and processing plant

Development of anelectrified society

Water purification plant
Dredging work (lake)

Housing
Waterside park
Office building

CO2
Negative
Emission

Production plant

Hotel

Electric vehicle
Hospital

Paper mill

Incineration facility
Biomass boiler

Water recovery plant

Shopping center

Water park
Iron steel mill

Sustainable foodproduction

Refrigerated
warehouse

Aquarium

Petrochemical complex

Innovative
wastewater
treatment

Restaurant
Fishing port

Sewage treatment plant
Thermal power
plant

Civil engineering
work

Shield method

Ship
Dredging work (port)
Seawater desalination plant

Encouraging theuse of renewableenergy© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

31

Kurita’s DX Efforts

Makoto Mizuno
Executive Officer, Executive General Manager of Digital Strategy Division© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

32

Areas Where DX is Being Introduced
FY2020~
Kurita’sDX
Efforts

Business

FY2017~This will be our focus today✓ Objectives: Maximize competitive advantage✓ Implement the following- Simultaneously create social value (reductions in CO2, waste and water usage) andeconomic value (reduced costs)- Achieve ultra-acceleration in the speed at which value is provided with EPCs, services,etc.
- Utilize information and data to identify customers’ potential issues and develop
improvement implementations at high speed

FY2018~
Management✓ Objectives: Maximize customer loyalty✓ Implement the following- Eliminate vertically-split management- Identify unique customer loyalty indicators, and set and visualize common KPIs in thevalue chain- Turn customer feedback into information and data, enabling highly precise demand andbusiness result forecasting

FY2022~Work Styles© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

✓ Objectives: Maximize the productivity of individual employees✓ Implement the following- Make it easier to share information and create opportunities for global collaboration- Offer work styles that are not impacted by life events through reskilling andimprovements to the work environment

33

Challenges in the Business Domain

Business Process Developing proposals

 Manufacturing

 Providing Services

Formulate value creation plans(What do we propose?)

Substantiate the creation plan
(How do we turn the proposal
into reality?)

Further expand customer value(How do we maximize value?)

Determine policies on value creation
methods such as the combination ofsolutions

Understand customer
requirements(What kinds of functions are
required?)〔Customer testimonials〕

Engage in procurement, design andconstruction based on the terms ofagreements with customers“We want information quickly!” “we want the product ASAP!"“What kind of high-added-value
can we produce?”“We want to choose from among
multiple options!”“Are there any better methods?”© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

Operational managementagreements such as water supply
projects, etc.

“We want to produce more value!”“We want to achieve improvements!
Secure! Stable! Safe!“

We identified and defined challenges thatmaximize competitive advantage
34

Case 1: Making the Proposal Development Super-Fast
By simply inputting the conditions, multiple proposals can be output immediately
 Equipment configuration:What functions does the equipment need to have, what size is required, and what kinds of optional configurations will beavailable?
 Equipment placement: How will the equipment be put in place and what is the most efficient method (minimizing the length of piping needed and land
required)?
 Process development: What process should be used for the construction work to complete it the fastest?
Large Projects

Person-days

Meta-Aqua Project

Past

Present

Future(Expected person-days until a proposal
is delivered to the customer)© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

35

Case 2: Making Operational Management Super-Fast
Through AI-based control, CO2 emissions from RO membrane equipment
can be reduced and costs can be lowered at the same time Energy savings:

We have demonstrated a 14% reduction over previous implementations in the amount of electricity required for RO
membrane operation (*Depending on operational conditions) Cost savings:
Cost reductions due to lower electricity costs and extended service life of RO membranes
 Improved environmental performance:
Effect of reduced CO2 emissions due to lower electricity use, effect of reduced waste from RO membranes

AI-Optimized Water Treatment Operation Initiative: Test Verification Results
Outline of water treatment line and issues
Raw water tankMeta-Aqua Project

Outline of results of RO membrane system verification
using an actual plant

Pretreatment
equipment

Fracta’s AI solution
Under normal operation,
power consumption for
RO membranes increases

Raw
water

AI-optimized operation

Received Environment Minister’s Award
as part of Japan Open Innovation Prize
RO membrane facility(Pump, RO membrane unit)

Pure
water

Power consumption
Before verification

Strongly pumping water is necessary formembrane treatment.
(About 60% of the line’s power consumption is used.)© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

Verification period

Advantages of AI-optimized operation⚫ Reduction in energy consumption (approx. 10%)
⚫ Reduction in operating cost due to lower maintenance frequency(approx. 40%)

Test verification at an actual plant was
carried out from December 2020.
In terms of the power consumptionreducing effects from AI-optimized
operation, when considering the reduced
frequency of maintenance, results
showed approximately 40% decrease inoperating costs compared with previous
implementations, and an expected
reduction in CO2 emissions ofapproximately 10%.
36

Case 3:Making Troubleshooting for Equipment
Operation Super-Fast
Have the best solution at hand whenever trouble occurs
 Search for cases of similar trouble:

Quickly provide information about past cases by having the user enter information about thetrouble that occurred Provide instructions on what items need to be confirmed: Provide instructions on the numbers that need to be confirmed using plant measurement
instruments, etc., to narrow down cases of similar trouble Provide instructions on recovery measures:
Provide instructions to on-site management personnel on measures to recovery from the type oftrouble that was narrowed down

© 2023 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

37

The trademarks (products, services, logos) contained in this presentation belong to
the Company or right holders that allow the Company to use the trademarks.