Corporate Report 2018

Mitsubishi Building 5-2, Marunouchi 2-chome Chiyoda-ku, Tokyo 100-8324
Corporate Communications Division Tel: +81-3-3283-5041 Fax: +81-3-3287-0833
https://www.mgc.co.jp/eng/

Corporate Report2018Contents

Philosophy for Being

MGC contributes to societal growth and harmony bycreating a wide range of value through chemistry.

3 Mitsubishi Gas Chemical at a Glance

24 Growth Strategy

5 A History of Creating Value

25 ● Natural Gas Chemicals Company
27 ● Aromatic Chemicals Company
29 ● Specialty Chemicals Company
31 ● Information & Advanced Materials Company
33 ● New Businesses
35 ● Research and Development

1970s
1980s1990s

2000s

Since1918

7 To Our Stakeholders
Toshikiyo Kurai
President andRepresentative Director

MGC Group Vision“Creating values to share with society”

37 Strengths Supporting Growth (CSR / ESG)Management Concept
●

●
●

●

●

MGC management is striving to create a place where there is job satisfaction anda dynamic group in which motivations and abilities are respected.
Marketing that watches the world to ascertain needs, and expands/creates markets
Creative research/development that deeply understands needs, and refines the seeds thatwill bring forth success
Production activities that work toward improved technology, environmental preservation,
ensure safety, and provide better products
An open corporate culture in which each person can share their goals and actively participate

11 New Medium-term Management Plan
Business areas

Fundamental objective 1

Fluctuating international conditions

Enhance the corporate valueof the MGC Group

Social issues

Biodiversity crisis

Information /communications

Strategy 2
Create anddevelop new
businesses

Strategy 3

MGC Group Vision

Implement
strategic
investment

Value provided

Creating values toshare with society

Global warming

Strategy 4

Strategy 5

Promote unified
MGC Group
management

Improve total
enterprise quality

Problems solved

Mobility

EnergyReducing environmental impact

Fundamental objective 2
Deepen the trust of
MGC Group stakeholders
Infrastructure

Promotion of diversity

As a Professional Group
1. Courage that does not shy away from change
2. Aim for lofty goals
3. Perseverance in achieving goals
4. Build team spirit with communication

Medical / food

Strategy 1
Strengthen theearning powerof existing
businesses

Changing demographics

Technological innovation

Principles of Conduct

38 Environment and Safety Management (Responsible Care)
40 Concern for the Environment
41 MGC Group Eco-Friendly Products
43 Initiatives Toward Safe, Stable Operations
44 Together with Stakeholders
49 Corporate Governance
53 Compliance and Risk Management

Corporate Governance

13 Five strategies for achieving the fundamental objectives
19 Five target fields of business: examples of initiatives

56 Financial Information
66 Shareholder Information
67 Corporate Data

Editorial Policy
Beginning this reporting period, Mitsubishi Gas Chemical has
decided to consolidate its CSR Report, Data Book, and Annual
Report and publish a single Corporate Report combining bothfinancial and non-financial information. To offer an easy-to-follow
description of the management strategies designed to achieve the
MGC Group Vision of “Creating values to share with society,”
it offers the perspective of an integrated report while bringing
together information on MGC’s Medium-term Management Plan,
growth strategy, and CSR/ESG information, as well as financial
information and other data. We hope that by reviewing this report,
our stakeholders will gain a deeper understanding of MGC Group.

1

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

Scope of This Report
Mitsubishi Gas Chemical Company, Inc. (MGC) and MGC Group(where the scope of reporting differs, it is noted in the data).

Reporting Period
April 1, 2017–March 31, 2018 (Some activities taking place in orafter April 2018 are also noted.)
Note that Responsible Care activities cover only the period
between January 1, 2017 and December 31, 2017 (Someactivities taking place in or after January 2018 are also noted.)

Published
September 2018

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 20182

At a Glance

Mitsubishi Gas Chemical at a Glance (As of End of March, 2018)

Launched as MGC

October 1, 1971

Capital62.7 billion yen
Ordinary income

41.97 billion yen
Number of employees(consolidated)

8,009

Number of employees(non-consolidated)

Net income attributable to owners of
the parent

60.5 billion yen
Approx.110

2,290
70

Number of equity-method subsidiaries

16
Number of stockholders

Customer companies(MGC Group in Japan)

Approx. 13,000

Net sales(MGC Group in Japan)

Approx. 2,500

18.9 billion yen
Cost of environmentally friendly R&D

635.9 billion yen
MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

Natural Gas Chemicals Company
Methanol Business, Organic Chemicals Businessand Life Science Business
The Methanol and Organic Chemicals businesshas an extensive lineup of products from basic
chemicals which are methanol, ammonia andtheir various derivatives to functional chemicals
for plastics, coating compounds, synthetic
fibers, adhesive agents, artificial leather,agricultural chemicals, pharmaceuticals andfoods. They support our daily life.

Aromatic Chemicals Company
Aromatic Chemicals BusinessThis unique product portfolio, which includes
aromatic aldehydes—primarily metaxylene
chains—and aromatic polycarbonates, provides
intermediates used in pharmaceuticals,
agricultural chemicals and aromatics, resin raw
materials, and additives. MX-Nylon helps toretain the freshness of food and beverages andreduce the weight of packaging.

Energy & Resources Business
The Energy & Resources business conducts
operations inside and outside of Japan insearch of energy for chemical manufacturing,
including exploration and development of
natural gas and oil in Niigata Prefecture. The
Energy & Resources business is undertaking
a project to develop clean, renewablegeothermal energy in Akita Prefecture as well
as new geothermal energy developments in
the Tohoku region.

Foamed Plastic Business
Our foamed plastic provides a range ofperformance benefits including light weight,
shock absorption, thermal and soundinsulation, and recyclability. It is widely used ineveryday life, for food containers, residential
insulation, industrial packaging materials, andautomotive components, contributing toenergy and resource saving andenvironmental protection.

Specialty Chemicals Company
Inorganic Chemicals Business
Our Inorganic Chemicals Business supplies
hydrogen peroxide for industrial use, chemicals
for use in the electronics industry, andenvironmental chemicals based on hydrogen
peroxide which have low environmental impact
and offer diverse functions such as bleaching,disinfecting, oxidizing, and metal polishing. We
also offer monomers for ultra-high refractive
index lenses and photoresist monomers.

Engineering Plastics BusinessEngineering plastics, such as polycarbonate
and polyacetal, have contributed to reducing
the weight of automobiles and machinerycomponents. Our Engineering Plastics
Business also offers special polycarbonates
for optical applications and polycarbonate
sheet (film) which has advantages for surface
processing technologies.

Information & Advanced Materials Company

Suppliers

R&D costs

20,0883

80.7 billion yen

Product varieties

Number of consolidated subsidiaries

To Our Stakeholders

Businesses and Main Products

Operating income

Originally founded 1918; Incorporated 1951

A History ofCreating Value

2.9 billion yen

Electronics Materials Business
The Electronics Material Business supplies
electronics materials including laminates forprinted circuit boards (PCBs) and drilling sheets
used in the PCB manufacturing process,products that meet the cutting-edge needs ofthe industry. In particular, BT laminates
expanded the possibility of plastics forsemiconductor packaging, and still contributeto advances in semiconductor density.

Oxygen Absorbers Business”Iron absorbs oxygen when it rusts.”“Prevent oxidation by eliminating oxygen.”
Just by implementing a combination of such
simple ideas, Mitsubishi Gas Chemical wasable to develop AGELESS® the world’s firstoxygen absorber.

New Businesses
MGC seeks to bring a consistentorganizational process to its goal of
creating and cultivating new businesses,
one that extends from the selection ofbusiness domains, to the drafting ofbusiness concept proposals, exploratory
research, market development, and finally,
commercialization.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 20184

At a Glance

A History of Creating Value

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

635.9

billion yen

1971(Fiscal year ended March 31, 2018)

Mitsubishi Gas Chemical Company, Inc.
launched

1951(Former) Japan Gas Chemical Co., Inc.
incorporated

Net sales

143.7

billion yen

127.9(Fiscal year ended March 31, 1978)

billion yen

25.3

billion yen(Fiscal year ended March 31, 1977)(Fiscal year ended September 30, 1971)

1918

Note: Consolidated accounting began with the fiscal year ended March 31, 1978.

(Former) Mitsubishi Edogawa Chemical Co., Ltd.
founded

1971

1975

1985

1971

1952

1927

1980

Polycarbonate “Iupilon”

Methanol

1990

1995

2000

2005

2010

1980

Plastic lens monomer

Nylon MXD6 Reny2015

OXYCAPT
plastic syringes and vials

First in Japan to
manufacture formalin.

Hydrogen peroxide

First in Japan to
manufacture methanolfrom natural gas.

1968

Developed transparent
resinous sheets as analternative to glass.

1976

BT materials

Xylene separation andisomerization apparatus

Laminated material for printed
circuit boards (PCBs)

Used as an engineering plastic
replacement for metal in automobiles,
allowing for lighter-weight vehicles.

1982

Developed thin, lightweightplastic lenses as areplacement for glass.

1991

Foamed polypropylene

Pyrroloquinoline quinone (PQQ)

World’s first use of
superacid “HF-BF3” inindustrial applications.

1969

Meta-xylenediamine

Used as replacement forthen-mainstream ceramics insemiconductor
packaging, contributing to the
popularization of personal
computers.

1977

Used in automobile bumpers. Highshock absorbency contributes toenhanced safety performance, andlight weight contributes tolighter-weight vehicles.

Expanded use of oxygen
absorbing technology to thedrug management andpathogen exam fields.

1984
MX Nylon

AGELESS oxygen absorbers

First in Japan to develop
the base materials for
PCBs.

5

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

Developed safe, reliable
plastic medical instruments.

“PharmaKeep” “AnaeroPack”

2015

First in Japan to
manufacture hydrogen
peroxide using theelectrolytic process.

1937

2018

1991

Formalin

1933

2015

Developed coating raw
material with excellent
curability and durability.

Enabled food to maintainits freshness.

Made it possible to replace
glass bottles with plastic for
carbonated beverages.

2006

Specialty polycarbonate resin“Iupizeta”

Full-scale roll-out in Japanof a food ingredient that
leads to healthy longevity.

Enabled the achievement of compact,
high-resolution cameras for smartphones
and other mobile devices.

Awarded the 49th Ichimura Prize in Industry in April 2017.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 20186

At a Glance

To Our Stakeholders

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

MGC Advance2020
A brighter future from bigger dreams!

The period from April 2018 to March 2021
Business areas

We are dedicated to fulfilling
the MGC Group Vision to“Create values to share with society”
and generate sustained
business growth.

Fundamental objective 1
Enhance the corporate valueof the MGC Group

Fluctuating international conditions

Medical / food

Strategy 1
Strengthen theearning powerof existing
businesses

Changing demographics

Technological innovation

Social issues

Global warming
Biodiversity crisis

Toshikiyo Kurai
President and Representative Director

Information /communications

Strategy 2
Create anddevelop new
businesses

Strategy 3

MGC Group Vision

Implement
strategic
investment

Value provided

Creating values toshare with society

Strategy 4

Strategy 5

Promote unified
MGC Group
management

Improve total
enterprise quality

Problems solved

Mobility

EnergyReducing environmental impact

Fundamental objective 2
Promotion of diversity

Deepen the trust of
MGC Group stakeholders

Corporate Governance

Q1
A1

prices for commodity products, and the tighter

Group and to further build stakeholder trust in ourenvironmental regulations in China. Internally, we steadily

enterprise.

advanced our structural reform and created a “muscular”

Corporate value is a complex matrix of attributes

operating structure. These elements combined to produce

starting with the quantitative elements of our sales, profits

growth that was clearly evident in our operating income. In

and assets and including the qualitative elements of ourpast years, assessments of the Group’s profit performance

management and technological capabilities, marketingwere mainly based on ordinary income because of theabilities, brand power, potential for future earnings growth,
contribution to society and preserving the environment.

Could you please describe
the Group Vision to “Create values
to share with society.”focus on the core businesses and also to create andlarge contribution from our overseas equity-method

develop new businesses. The objective was to clearly

affiliate companies, particularly group companies

identify the areas where we can best apply our capabilities

producing methanol. We plan to maintain consistentvalue is by investing in our personnel. To make the MGC

Our vision is to provide values thatsociety needs and that it can use
in a wide range of areas,
and through that to generatebusiness growth for our Group.

so we can clearly focus on the businesses where we cangrowth in both operating income and ordinary income.

Group even stronger, it is essential to bring out theprovide technologies and products that society needs.

We also achieved favorable results in the area of

Our efforts over the past three years have had asafety, as we had no serious accidents or troubles during

company where employees feel they can express

certain degree of success reconstructing underperforming

the period. I believe that the smooth operations also

themselves through their work and that they are motivatedbusinesses, and we are now focusing attention on

helped us take advantage of the favorable businessto work is fundamental to raising our corporate value.

creating and developing new businesses.

conditions. Our group-wide safety initiatives enabled us to

We are focusing our efforts on developing technologies
and products that contribute to resolving the issues
directly facing society. As the sales of these technologies

Q2

and products increase, our business also grows. This is
how we envision the MGC Group and is the essence of
our Group Vision to “Create values to share with society.”
This vision was set as the primary objective of the
MGC Advance2017 medium-term business plan, andthere were two reasons for this.

A2

Please review the Group performancein fiscal 2017, the final year of the
MGC Advance2017 medium-termbusiness plan.

We established a “muscular”
operating structure and generated
record-high sales and profits.

The first was related to the plan’s basic initiative to

Our performance during the three years of the MGC

reconstruct underperforming businesses and to reconsider

Advance2017 medium-term business plan was very

our loss-producing businesses by asking “Is society

strong. We boosted sales and profits to record levels andbenefitting from the products we are making and selling?”

achieved the plan’s profit targets ahead of schedule.

The second was related to the basic initiative tostrengthen the earning power of existing businesses with a7

Infrastructure

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

Several external factors worked in our favor, including
stable foreign exchange rates and crude oil prices, rising

One way we are seeking to increase our quantitative

potential in each of our employees. I believe that creating a

Our quantitative consolidated performance targets foradvance the development of our manufacturing

fiscal 2020 are sales of 750 billion yen, operating income

infrastructure and provided a foundation for our steadyof 65 billion yen, and ordinary income of 90 billion yen withgrowth during the period.

ROE of at least 12%. We plan to use the “muscular”

Q3
A3

operating structure formulated during the previous

Could you please introduce the new
MGC Advance2020 medium-termbusiness plan that the Grouplaunched this year.

medium-term business plan to leverage our safe and

The objectives of the new plan are
to enhance our corporate value anddeepen the trust of MGC Group
stakeholders

overseas, including those in Trinidad and Tobago and thestable production infrastructure to realize consistent
growth unaffected by changes in external conditions. We
will also firmly establish the investment businesses
United States, and extend the progress of the previous
plan by actively and tenaciously creating and developing
new businesses.

The new medium-term business plan has two core
objectives: to enhance the corporate value of the MGC

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 20188

At a Glance

To Our Stakeholders

business fields will you be
Q4 Whatfocusing on?
have set five fields as theA4 Webusiness domains we should be

advancing in: medical / food,information/communications,mobility, energy, and infrastructure.

When we think about how we can contribute to solving

step up our communications with the final product makers

To Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

responsibility to follow how the products we supply affectstakeholders.

society and the environment and to take an overall viewis the process for generating
Q5 Whatinnovation through R&D?
create innovation mainly throughA5 We
our R&D but also through all of ourbusiness segments.

we will find clues to how we can create new value.
It’s also important to reduce the environmental impact
from our business operations. We issue the MGC Group
Environmental Sustainability Declaration in April 2018, andmedical/food, information/communications, mobility, energy,

complexity of social issues in recent years has made it

take the approach that our environmental initiatives are notand infrastructure. We have designated these five fields as

essential to accelerate R&D and our business development.

a burden, but an opportunity. Saving energy lowers energy

the business domains we should be advancing in. Among

One of the distinguishing features and the strength of thecosts; preserving resources reduces our input costs.

these, we are particularly focused on the medical/food,

MGC Group is that we produce over 90% of our products

Creating new product, technologies, and operations that

information/communication, and mobility fields.

using our own technologies. Nevertheless, we must be

are environmentally sustainable is good for both society

In the medical/food domain, we established Cultivecs

careful not to become too self-reliant. Led by our new

and our company. I believe this is also furthers our visionin June 2016, a joint venture with Nippon Kayaku, to be abusiness development department, we are engaging into “create value to share with society.”

contract manufacturer of antibody drugs. Antibody drug

collaborative open innovation, investing in venture

production operations had been highly dependent oncompanies, and conducting M&A.
business development departments. Every employee must

costs made this a very meaningful development.

look for areas around them that could be improved and be

Our contributions in the medical/food domain are truly

proactive about proposing and implementing change. The

diverse, and include developing the multilayer plastic

small innovations add up to strengthening our overall

container OXYCAPT to provide plastic containers as aorganization.

solution for issues related to glass instruments as well asfactory agricultural farms enabling safe and secure
production and increased self-reliance for food production.

Development Goals for theQ6 Sustainableglobal society are becoming a forefront
issue. What is the MGC Group’s
approach to SDGs?

In the information/communications domain, wedeveloped the transparent polyimide film Neopulim andseveral other high-performance resins that are contributing
to increasing the technical functions of smartphones andother devices.
In the mobility domain, we supply a variety ofA6

We are deeply conscious of our
responsibility as a maker ofchemicals and seek to contribute tocreating a sustainable society.

Corporate Dataand increase the positive impact. As we do so, I believe

I believe that key to fulfilling our environmental objectives isoperations within Japan and help lower local medical

Shareholder
Information

product supply chains to decrease the negative impact

the MGC Group’s domains of strength, which are

Pursuing innovation is not limited to our R&D and new

Financial Information

across the complete upstream and downstream of our

The dramatic changes in the environment and increasing

overseas production, and creating the ability to expand

Strengths Supporting
GrowthAs a provider of chemicals, we have a social

and also seek to communicate more clearly with ourissues, we understand that we can best contribute throughQ7 How do you view shareholders return?
to shareholder return is
A7 Fundamental
maintaining stable dividends while

also taking into account our businessperformance. We are also consciousof the total return ratio.

do you have a message you
Q8 Lastly,
would like to communicate tostakeholders?

look forward to ongoing dialogue
A8 Iwithall stakeholders to help deepen
understanding of Mitsubishi Gas
Chemical.

The MGC Group’s basic policy is “building corporate value

I am looking forward to continuing our dialogue with allraises profits for shareholder and all stakeholders.” Basedstakeholders to deepen their understanding of the MGC

on this, we seek to maintain an optimal balance of internalGroup’s strengths, our growth strategies, and ourreserves and shareholder return.

contributions to protecting the environment. We updated

In fiscal 2017, progress with our structural reforms

our website in May 2018 to make more information about

helped us generate earnings surpassing our forecasts.

our activities available, and I hope everyone will take time to

Based on the strong result, we raised our dividend

look at it.

payment amount by 21 yen from the previous year* to a

Hearing the honest opinions of our stakeholders is

total dividend payment per share for the year to 59 yen.

invaluable to the company. I look forward to hearing fromstructural segments and parts, paint, and batteries that

The 17 Sustainable Development Goals and 169 targets of

The dividend distribution amount to shareholders is

you and making our company better.

lighten vehicle weights and help advance the development

the United Nations’ 2030 Agenda for Sustainable

determined based on our policy to maintain dividendof electric vehicles.

Development very clearly shows the path we need to takestability, in consideration of our business performance andas a corporation. For us, I believe Goal 12 to “ensure

future capital investment plans, and also with regard to our

conduct R&D geared toward creating value that societysustainable consumption and production patterns” is thedividend on equity ratio. In addition, we also aim toneeds while also more actively communicating. The MGC

most germane. Because the manufacture of chemicals ismaintain a certain level of total return ratio.

Group provides “materials,” and the full impact of the value

a materials industry, it is difficult to see how the final

these can provide to society cannot be realized without

products made from the materials we produce will be* The 21 yen increase is based on the share consolidation effected on
October 1, 2016

our engaging with the makers of the final products. We willused in society.

high-performance materials including key automobile

To further build on these successes, I believe we must

9

A History ofCreating ValueMITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

Toshikiyo Kurai
President and Representative Director

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201810

At a Glance

The New Medium-term Management Plan

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

MGC advances to the next stage of
growth after moving forward withrestructuring of underperforming businesses

MGC Advance2020
A brighter future from bigger dreams!

The period from April 2018 to March 2021

Business areas

Fundamental objective 1
Enhance the corporate valueof the MGC Group

Fluctuating international conditions

Consolidated earnings
targets for fiscal 2020 (JPY)

Medical / food

Strategy 1
Strengthen theearning powerof existing
businesses

Changing demographics

Technological innovation

Social issues

Information /communications

Strategy 2Strategy 3

Create anddevelop new
businesses

Implement
strategic
investment

MGC Group Vision

Value provided

Creating values toshare with society

Global warming
Biodiversity crisis

Strategy 4
Promote unified
MGC Group
management

Net sales

Operatingincome65

Ordinary
income90

Mobility

Strategy 5
Improve total
enterprise quality

Reducing environmental impact

EnergyROE

Fundamental objective 2
Deepen the trust of
MGC Group stakeholders

Promotion of diversity

750

billion yen

billion yen

Problems solved

billion yen

12%or higher

Infrastructure

Corporate Governance

Megatrends and important social issues
The business environment in which we operate is growing
increasingly complex, bringing to the fore many issues that

11

Five target fields of businesstechnological innovations.
Aiming for further growth, we are identifying theWe harness the power of chemicals and the individual

We continue to develop our wide range of diverse

efforts of each person in the Group to create products andproducts in the five business fields where we can makeneed resolving. These include global warming and thebusiness opportunities and risks these changes represent

technologies that are needed by and provide value tothe most profound contribution. While pursuing profit, ourbiodiversity crisis in the natural environment, demographic

while mobilizing our expertise to help resolve social issues,

society, to help resolve social issues, and help realize agreater objective is to create social and environmental

shifts, economic growth in emerging countries, andand help realize a sustainable society.

sustainable society.

value that helps realize a safer and more secure society.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201812

A History ofCreating ValueAt a Glance

To Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

The New Medium-term Management Plan

Five strategies for achieving
the fundamental objectives
Fundamental Objectives
Enhancing the corporate value of the MGC Group
The MGC Group will further enhance its corporate value through its management strategies andby expanding its existing businesses and advancing into new business areas whileconstantly pursuing safety, efficiency, productivity, and profitability.

1

Strategy

Focus management resources on the core businesses thatare the company’s strengths and enhance the profitability ofexisting businesses.
●

Deepening the trust of MGC Group stakeholders
The MGC Group will seek to deepen the trust of all stakeholders in its operations andfulfill its corporate social responsibility as we realize sustainable growth.

●

●

●

Five Strategies

1
2
3
4
5
13

Strengthening the earning power of existing businesses
with a focus on the core businesses
Creating and developing new businesses
Implementing investment strategies to form
an optimal business portfolio
Promoting unified MGC Group management
Improving total enterprise quality tosupport sustainable growth

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

Strengthening the earning power of existing businesses
with a focus on the core businesses

We will enhance the profitability of existing businesses by improving our technology,
maintaining our competitive advantage, and efficiently developing markets for our products.
For our existing products, we will develop new applications and markets while also developing
applications in new business areas.
We will conduct safe and stable production operations to enhance our profitability and strengthen
our business base.
We will work to expand and strengthen our business base, through solid execution of our Trinidad andTobago project, the smooth launch of our super-pure hydrogen peroxide plants in North America,and by boosting our capacity in special polycarbonate resins (2019), as well as considering domestic
plant expansion and plans for new plants (2022) for meta-xylene diamine (MXDA).

Examples of competitive performance products■ Methanol derivatives■ MXDA/MX-Nylon■ Electronic chemicals■ BT materials■ Life science products■ Aromatic aldehydes■ High-performance polycarbonates■ Oxygen absorbers

Upgrade the technologies, develop applications, markets and competitive new performance products
Perform safe and stable production operations● Verify business conditions and reevaluate business strategies●

Strategies●

Focus management resourcesCore businesses

Strengthen businessbase and earning
power

Natural gas chemicals

Aromatic chemicals

Specialty chemicals

Information andadvanced materials●

Maintain the competitive edge of existing products●

Efficiently develop product markets●

Develop products for new business areas●

Establish a stable earnings structure

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201814

A History ofCreating ValueAt a Glance

To Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

The New Medium-term Management Plan

Five strategies for achieving the fundamental objectives

2

Strategy3Creating and developing new businesses

Strategy

The MGC Group will ensure it continues flourishing by actively
developing new technologies and products and creating anddeveloping new businesses.
Specifically, we will aggressively invest in the fields of medical
and food, information and communications, and mobility.
●●●

We will develop and launch new technologies and products by increasing our sensitivity to market
changes influenced by megatrends and to the speed of those changes. We will also identify specifictarget markets and seek to launch products in a timely manner to ensure maximum success.

Implementing investment strategies to form
an optimal business portfolio

We will devise and implement an investment strategy forforming an optimal business portfolio to establish a stableearnings structure for the Group.
●●

We will devise and implement an investment strategy that diversifies revenue sources by constantly
generating new technologies, products, and businesses, and that supports a balance of commodity,
high-performance, specialty, and new products within the MGC Group.
We will formulate investment strategies that take into account how megatrends are changing themarkets for our products and how quickly the markets are changing. Investments will be geared to
growth with the aim of enhancing our corporate value.

We will generate new business by incorporating new management approaches, such as partnerships
and M&A, and by actively applying our management resources.
We are focusing on creating and developing new businesses in antibody drugs and bioproducts,
medical packaging materials, factory-produced vegetables, Neopulim, semiconductor-relatedmaterials (including 5G-compatible materials, semiconductor underlayer films, etc.), solid electrolytes
and CFRP curing agents.

Unstable earnings

Optimize the businessportfolio

Stable earnings

Business creation

Alliances,
M&A,
Open Innovation

Businessdevelopment

Energyinfrastructure
field
Mobilityfield

Businesscreation

Medical/Food field
Advance 2020
new business
investment planby target field

Prototypes,
final productFundamental
technology
Basic resarch

Activate management
resources and business/
product line synergies

15

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

Fluctuating international
conditions● Unpredictable energy prices● Difficult-to-predictcurrency values●

Devise and implement
strategic investment

Information /communications
field

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201816

A History ofCreating ValueAt a Glance

To Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

The New Medium-term Management Plan

Five strategies for achieving the fundamental objectives

4

Strategy

Promoting unified MGC Group management

We will share management strategies throughout ourorganization and conduct daily operations asa united groupof companies to enhance the overall corporate value ofthe MGC Group.
●●

We will accurately determine Group information and continue striving to improve the efficiency of ourGroup management by introducing business management units (BMU) to facilitate standardizing andintegrating the three trade houses of the MGC Group as well as sharing and unifying the accounting
systems within the Group.
We will make our investment management methods more sophisticated from the Group perspective,
including formulating an accurate performance evaluation system capable of appraising all of thevarious investmentactivities of the Group.

5

Strategy

Improving total enterprise quality to support
sustainable growth

We will constantly improve the qualities of management
resources, including personnel, capital, technology,
information, brand, and intellectual assets, and manage andapply these resources effectively.
●●

We will raise the level of our awareness and culture of safety in our operations and deepen its
application throughout the Group.
We will strive to operate an effective corporate governance system that we will continually reinforce.

●

We will develop human resources.
We will practice compliance while readying and strengthening systems for responding to any mannerof risk.

●

We will cultivate research and development capabilities that encourage innovation.

●

We will improve the efficiency of our information systems.

●

Roadmap to unified management

Sustained growth
Strategies●●

Standardize and integrate accounting systems
Properly utilize Group information

MGC Group

Raise our awareness and culture of safety

Build up qualities

Strive to operate an effective corporate governance systemthat we will continually reinforce●

Improve compliance and risk management●

Development of human resources●

Cultivate our R&D capabilities●

Improving information system efficiency

MGC Group

Share management strategies

MGC Group

17

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201818

At a Glance

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

The New Medium-term Management Plan

Five target fields of business:examples of initiatives

Medical /food

Information /communications

Antibody drugs

Drugs that target only antigens, with few
side effects and exceptional safety

Neopulim (Transparent polyimide resin)

Mobilizing our expertise in animal cell culture
technology and manufacturing process development,
we handle all processes from initial-stage
development of drug substances for antibody
pharmaceuticals to their manufacture, contributing tohigh-quality, reliable treatments.

Flexible, transparent resin film and varnish
Thin, light, and flexible, Neopulim offers high heat resistanceand excellent transparency. As an alternative to glass
substrates, Neopulim resin films and varnishes aid the
production of organic EL displays.

BioPQQ / ElionTM SA*1

Iupizeta EP(Special polycarbonate)

Food compounds that benefit human healthOXYCAPT

Material enabling smaller,higher resolution mobile cameras

We offer a variety of food compounds created withbiotechnology. These include functional ingredients such as
pyrroloquinoline quinone (PQQ) with anticipated brain healthbenefits, S-adenosylmethionine (SAMe), and spermidine(SPD), and functional dry yeast containing yeast culture.

Used in camera lenses for mobile devices,
Iuzipeta offers optical properties such as ahigh refractive index and low birefringence.
Applications are expected to expand to
on-board automotive cameras, surveillancecameras, and other devices.

*1 ElionTM SA:S-adenosylmethionine-containing yeast

Plastic syringes and vials thatblock both oxygen and water vapor
OXYCAPT is the only plastic syringe thatprovides a glass-like oxygen barrier. With lightweight and low inorganic extractables
compared to glass, these medical syringes andvials also eliminate the dangers associated withglass breaking.

Molding compounds

Oxygen absorbers / MX-Nylon

Functional materials thatabsorb / block oxygen
Oxygen absorber, AGELESS and
MX-Nylon, an oxygen blocker, prevent
foods and pharmaceuticals fromdeterioration caused by oxidation andare beneficial in maintaining quality andreducing product loss.

19

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

Semiconductor
integrated circuits

BT laminate

Chemicals for the electronics industry
Electronics innovations made possible withhigh-purity chemical agents
Our functional chemicals include ultra-pure hydrogen peroxide andammonium hydroxide used in cleaning semiconductor devices as well as
in the manufacturing of electronics such as liquid crystal displays andprinted circuit boards. These chemical agents support the global
electronics industry and contribute to technological innovations.

BT materials
Semiconductor packaging materials supporting electronic device innovations
MGC was the first supplier of these substrate materials in the world. Offering both high heat
resistance and excellent electrical properties, they contribute to making mobile devices, automobiles,
and home electronics smaller, thinner, lighter, higher performing, and more energy efficient.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201820

At a Glance

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

The New Medium-term Management Plan

Five target fields of business:examples of initiatives

Polycarbonate / Polyacetal

EnergyFoamed plastic

Engineering plastics with superior rigidity
and impact resistance
Because of its high impact resistance and transparency,
polycarbonate is used in headlamps and door handles, while
polyacetal, which is resistant to wear, abrasion, and chemicals,
is used in fuel pumps, interior parts, and other components.
Together, these engineering plastics contribute to improved
fuel efficiency, enhanced workability, and better design.

Meeting needs for lighter weight
Foamed plastics are widely used in bumpers as well as seats
and other automotive interior parts. Offering superior
cushioning, they help improve collision safety performance,
reduce vehicle weight, and enhance fuel efficiency.

Direct methanol fuel cell

Clean, quiet electricity generator
This fuel cell generates electricity frommethanol and air and can provide electricity forseveral days or more. Because electricity is
generated through a chemical reaction, the fuelcell is also quiet and does not pollute the air.

Mobility

Sun visors / Rearview mirror / On-board cameras
Rear seats
Headrests
Tool box
Fuel pumpmoduleTopcoatFront duct

Natural gas-fired power generation

Bumpers

Participating in new energy generation

Headlights

We are a partner in a gas-fired power plant at
Soma Port, Fukushima Prefecture, that is fueled bynatural gas with low environmental impact. The
project helps provide a stable supply of energy aspart of the New Energy Society initiative conductedunder Fukushima’s Innovation Coast Framework,
established by the Japanese government in 2014.

Sumikawa Geothermal
Power Plant

Rear window
Door handles

Generating steam to supply electricity since 1995
Power generation capacity of 50,000 kilowatts

Door pads / Door panels

Wasabizawa Geothermal
Power Plant

Seatbelt buckles

Scheduled to begin operations in May 2019
Power generation capacity of 42,000 kilowatts

Side-view mirror
Instrument panel

Ammonia

Appi Geothermal
Power Plant

Currently at the verification
stage by the operator
Generating capacity 14,900 kW

Bandai Geothermal
Power Plant

Currently at the verification stage

Denitration reducing agent forcoal-fired power generation
Meta-xylenediamine (MXDA) /1,3-Bis (Aminomethyl) cyclohexane (1,3-BAC)

Curing agent used in fiber-reinforced
plastic production
Used as an epoxy curing agent in carbon fiber reinforced
plastic (CFRP) and other products, meta-xylenediamine and1,3-BAC contributes to reducing vehicle weight and improving
fuel efficiency.

21

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

Glycidyl methacrylate (GMA)

Automotive topcoat paints
This material is used in paints to make them more resistant toacid rain and scratches, resulting in improved weather
resistance in automobiles.

Ammonia is used as a reducing agent
for denitration to eliminate nitrogenoxide and help prevent air pollution.

Geothermal power generation

Clean renewable energy
Geothermal energy is a renewable resource
unaffected by weather or seasonal changes.
As such, it contributes to power supply
stability while also minimizing CO2 emissions
from power generation.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

22

The New Medium-term Management Plan

Five target fields of business:examples of initiatives

Infrastructure
Growth Strategy

Hydrogen peroxide

Environmental chemical forsoil remediation
The Fenton method uses hydrogen peroxide and a catalyst
to clean up soil contaminated with volatile organic
compounds (VOCs).

Natural Gas Chemicals Company

25

Aromatic Chemicals Company

27

Meta-xylenediamine (MXDA)

Specialty Chemicals Company

29

Paint curing agent improves
corrosion protection

Information & Advanced Materials Company

31

New Businesses

33

Research and Development

35

Used in paints for bridges and otherstructures and in factory pipes and tanks,
this curing agent prevents metal deterioration.

23

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201824

At a Glance

Growth Strategy

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

Natural Gas Chemicals
Company
We are expanding our business areas morediversely and globally by taking advantage ofour value chain, from resource mining to basic
chemicals, derivatives and life science.

Business and Major products
Sales by segment

26.3%

Methanol, Organic Chemicals and Life Science

Energy & Resources

Methanol● Formalin● Dimethyl ether (DME)● Ammonia● Polyols●●

Review of Fiscal 2017 andthe Medium-term Management Plan
MGC’s mainstay methanol business has maintained steady
growth amid global growth in demand. In fiscal 2017, theJoint Venture Companies encountered unexpectedcircumstances, including trouble at a plant in Saudi Arabia
and a change in the foreign exchange control system in
Venezuela. Nevertheless, revenue increased substantially
due to in part to rising methanol prices. The organic
chemicals business achieved increases in revenue andearnings by strengthening its development ofAmine● Methyl methacrylate (MMA),
Methacrylic acid (MAA),
Methacrylate specialty esters● Health food ingredients (PQQ)

Mining and exploring
for natural gas● Developing geothermal energy●

high-value-added products such as MMA derivatives.
Although the shale gas project in Canada recorded an
extraordinary loss due to the cancellation of the LNG
project, the Energy and Resources Business has madesound strategic moves that will lead to future growth,
including its natural gas power plant in Soma, Fukushima
Prefecture and the geothermal power generation project inYuzawa, Akita Prefecture.
Since the life sciences business just started up in fiscal
2016, its contribution to performance was limited during theterm of the plan, but we hope it will be a future pillar of ourbusiness.

Outlook

Growth Initiatives

Planned figures for the Natural Gas Chemicals Company in
MGC Advance2020, the new medium-term management
plan that began in fiscal 2018, target a substantial increase
in revenue and earnings in fiscal 2020, despite an expected
decline in revenue in anticipation of a market decline in thefirst year.
The major driver of that increase is the start ofcommercial operation of the methanol plant in Trinidad andTobago and the growth of the life sciences businesscentered on antibody drugs and healthy food materials.
Regarding antibody drugs, the construction of the Niigata
Plant of Cultivecs Inc., a joint venture with Nippon Kayaku
Co., Ltd., was completed in February 2018. It has been
attracting attention as a socially significant business that
produces antibody drugs in Japan that had previously been
imported from overseas. Health food materials such as

The strength of the Natural Gas Chemicals Company is in
its integrated business system that starts with natural gas.
The business begins with the mining of natural gas,
proceeding to the development and production of basic
chemicals, such as methanol produced from natural gas asa raw material, and various organic chemicals that arederived from these. We believe that evolving and expanding
this value chain is essential for our future growth.
In the methanol business, in addition to considering
new locations to follow Trinidad and Tobago, we arefocused on natural gas dissolved in water. The gas fields of
the Niigata Plain, where that business is expected to becommercialized, are also one of the world’s rare iodine
production areas., and we will also look into thecommercialization of iodine derivatives. As a basic chemical
derived from natural gas, we will also venture into thehydrogen derivative business. In the energy field, we willcontribute to enhancing the competitiveness of the Groupby not only engaging in resource exploration, but also
power generation and supply to our corporate group.

SAMe (S-adenosylmethionine) yeast derived from natural
sake yeast and SPD (spermidine) yeast, which is effective inmaintaining and improving people’s health, as well as PQQ(Pyrroloquinoline quinone), which is attracting interest bothin and outside of Japan, are part of the successive
development of products for which markets are expected
to grow.

Focus
Methanol Plant in Trinidad and Tobago
Scheduled to Start Commercial Operation in
Spring of 2019

Fiscal 2017 Results and Fiscal 2020 Quantitative Targets
Net sales ■Operating income ■Ordinary income■(Billions of yen)
2,500
1,500

1,794

1,000

1,692

vs. fiscal 2017
+101

250

250

200
150

Masashi Fujii
Director and Managing Executive Officer
President, Natural Gas Chemicals Company

25

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

2,100

180

149

100

+10

50

60

0

Fiscal 2017
results

32

Fiscal 2018
forecast

70

Fiscal 2020
targets

The Republic of Trinidad and Tobago is a resource-rich country
with abundant reserves of oil and natural gas. MGC is
proceeding with a project to construct facilities for manufacturing
methanol and DME in cooperation with Mitsubishi Corporationand Mitsubishi Heavy Industries, Ltd. Construction of the plant
has proceeded since the final investment decision was made in
September 2015, with completion of the plant and the start ofcommercial operation scheduled for the spring of 2019.
The plant’s annual production capacity will be onlarge-scale, at one million tonsof methanol and 20,000 tonsof DME. We expect to meetglobal demand growth andTrinidad and Tobago
contribute substantially to theeconomic growth ofneighboring countries and theincreased businessperformance of our corporategroup.

Functional Food Material PQQ Obtained
the First Ever Anti-doping Certificationin the Japanese Market
TPQQ is a type of coenzyme that assists enzyme functioning,and has been confirmed to have the ability to improve brain
function, including enhancing memory and the ability todiscriminate. Although it is generally produced through chemical
synthesis, MGC produces it through biotechnology, and has
succeeded in manufacturing it via fermentative production. It
has been commercialized as the functional food material
BioPQQ.
BioPQQ is said to be effective in strengthening themitochondria, which produce energy in cells, and is used as araw material for energy supplements. In March 2018, MGC
obtained the first-ever anti-doping certification in the Japanesemarket. This will enable
athletes to take PQQ
without concern, andtherefore we can expect
to see it used more
widely in sports
supplements.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201826

At a Glance

Growth Strategy

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

Aromatic Chemicals
Company
We will achieve a business portfolio thatenables sustainable growth based onhigh-value-added specialty chemicals andcommodity chemicals as stable earnings bases.

Business and Major products
Sales by segment

33.3%

Aromatic Chemicals

Foamed Plastic● Purified isophthalic acid (PIA)
Meta-xylene● Meta-xylenediamine● Phthalic anhydride● MX Nylon (MXD6)● Plasticizers● Aromatic aldehydes● Aromatic polycarboxylic acids●●

Review of Fiscal 2017 andthe Medium-term Management Plan
Despite several years of declining profitability, after
implementing business structural reforms, we rebounded to
become a profit driver of the MGC Group.
In fiscal 2017, our mainstay commodity chemicals(Meta-xylene and PIA) achieved a significant increase inrevenue and earnings due to a sharp rise in PIA market
prices, which has increased demand for plastic bottles,

Expanded polypropylene
Expanded polyethylene● Molded products●

and the expansion of meta-xylene production. Sales
volumes for specialty chemicals such as MXDA, its
derivatives, and aromatic aldehydes have expanded,
mainly in markets outside Japan. As a result, revenue andearnings increased in 2017. In contrast, earnings of the
foamed plastics business developed by Group company
JSP declined due to rising raw material costs, despite
higher sales.

Outlook

Growth Initiatives

Commodity chemicals such as meta-xylene and PIA are
major sales drivers, but we see a risk that the spread
between market prices and raw material costs will affectearnings. This spread has been favorable in recent years,
but is expected to contract in fiscal 2018, leading to a
decline in earnings. In commodity chemicals, we will ensure
safe and stable operations at production sites and increase
its stability as a foundation business.
On the other hand, to raise the entire company’s
earnings, we seek to increase the proportion of specialty
chemicals such as MXDA, MX nylon, aromatic aldehyde,
and heat-resistant transparent polyimide through thedevelopment of new technologies and products, andthrough marketing in close cooperation with customers. In
particular, we will promote the development of applicationsfor MXDA, which has outstanding performance, and work
to raise productivity and expand production capacity.

To optimize our business portfolio, we take a “product-out”
approach and a “market-in” perspective.
Product-out is a product development method
designed to gain a superior competitive position in newmarkets by using core technologies and the connection
between existing products and the product being
developed. In contrast, “market-in” seeks to create newtechnologies and products while working with the customer
to determine the value they require and the issues theyneed to resolve.
To that end, we have set up a marketing team that
includes members of the development division to facilitate
proactive collaboration with both researchers and sales
representatives. We will also improve technical support togain an understanding of the functions and quality that
customers truly want, and to help them properly use our
products.

Focus
Heat-Resistant Transparent Polyimide
Neopulim Facilitates Display Evolution
Fiscal 2017 Results and Fiscal 2020 Quantitative Targets
Net sales ■Operating income ■Ordinary income■(Billions of yen)
2,500
2,000

2,154

2,152

300
225

262 2512,400

222 212vs. fiscal 2017
▲ 32 ▲ 31
230 220

Fiscal 2018
forecast

Fiscal 2020
targets150

27

Masato Inari75

Director and Managing Executive Officer
President, Aromatic Chemicals Company

0

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

Fiscal 2017
results

Neopulim is a high-performance material that is both highly
transparent and heat-resistant. It has attracted attention as aresin film substrate that is an alternative to glass, especially foruse in foldable OLED (organic light-emitting displays).
Flexible display panels are gaining momentum, even in theautomotive field where the introduction of automated driving isadvancing. Neopulim holds promise in the automobile industry
due to its various properties including light weight, workability,
chemical resistance, and low retardation.

Expansion of MXDA Production Capacity due
to Growth in Demand as a Product and
Raw Material
While MXDA has a certain market share as an epoxy resin
curing agent and corrosion-proof paint, it is one of thecompany’s core products that is also a raw material forderivatives such as MX nylon, whose gas barrier properties are
attracting much interest. In response to growing worldwide
demand for MXDA as a product and raw material, we areconsidering the possibility of expanding production capacity,
including at new production facilities outside of Japan.
At the same time, to expand sales to China, where demand
for water-based paint is
growing as environmental
regulations tighten, weare also working on
further application
development by sending
researchers to propose
new formulations for
MXDA and its derivative
products.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201828

At a Glance

Growth Strategy

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

Specialty Chemicals
Company
To further expand sales of high-value-added
products, especially in advanced fields such as
information-communications and mobility, we will
focus on investments to strengthen our production
system, including increased capacity andoptimization, and drive profit growth for the Group.
Business and Major products
Sales by segment

32.0%

Inorganic Chemicals

Engineering Plastics

Hydrogen peroxide● Persulfates● Electronic chemicals(Chemicals for use in the electronics industry)● Monomers for high refractive index
plastic lenses●

Iupilon (Polycarbonate),
Polycarbonate sheet, Polycarbonate film
● Iupizeta (Special polycarbonate)● Iupital (Polyacetal)● Reny (Polyamide MXD6 molding
compound)●Review of Fiscal 2017 andthe Medium-term Management Plan
With the booming semiconductor and automobile markets,
the Specialty Chemicals Company achieved significant
growth in both revenue and earnings over the three-year
period of the previous medium-term management plan,
helping the company reach its target profit.
In the inorganic chemicals business, electronic
chemicals (chemicals for use in the electronics industry) for

semiconductors and LCD manufacturing drove growth.
Strengthening relations with local customers led to increased
sales and higher revenue and earnings, especially in the
United States and bases in Asia.
In the engineering plastics business, revenue andearnings increased significantly due to continued strong
demand, mainly in China, resulting in rising polycarbonate
prices, as well as strong sales of special polycarbonate
resins and sheets.

Outlook

Growth Initiatives

Demand for the company’s products, both inorganic
chemical products and engineering plastics, is robust. To
maintain a strong competitive advantage, and further
increase performance, we will focus on investments toreinforce production capacity starting in 2018.
In inorganic chemicals, we are building new super-purehydrogen peroxide plants for cleaning semiconductor wafers
for electronic devices at two locations, Oregon and Texas, inthe United States. Both plants are scheduled to start
operation in 2019 and, along with the existing Arizona Plant,
will strengthen the supply system in the U.S. market.
For engineering plastics, the company is increasing
manufacturing capacity for its super polycarbonate resin,lupizeta EP, which is experiencing sharply rising demand in
the optical field for use in smartphone lenses and otherapplications. The plant is scheduled to begin operation in
mid-2019.
In 2018, in addition to these investments, and withcompetition intensifying for electronic chemicals and thenarrowing price spread for polycarbonate, we expect
earnings to decline. Nevertheless, the production system,
which will be significantly enhanced during the three years of
the new medium-term management plan, will ensure thestronger presence of the Group in advanced markets suchas information communications and mobility, and will serveas the basis for future growth.

To increase performance, we must strongly promotelocalization outside of Japan and shift to advanced fields.
We are expanding business outside of Japan in both
inorganic chemicals and engineering plastics, and will pursue
localization not only through production, but also raw material
procurement, R&D, technical support, and other functions.
We will ensure stable sales over the medium to long term byforging closer relationships with local customers.
In our shift to advanced fields, we will address
technological innovations in key markets such as information
communications and mobility. In the semiconductor field,
microminiaturization and higher precision are advancing
further, and electronic chemicals are also required to offer
greater functionality and better quality than before. The
company will differentiate itself from its industry peers by
exercising the unique technological capabilities it hasdeveloped to meet requirements for high quality, and will
support the evolution of semiconductors together with their
manufacturers.
In the automotive field, we will further raise our presence
by responding quickly to technological trends such as thegrowing demand for on-board devices accompanying theshift to electric vehicles (EVs), the evolution of in-vehicle
displays that support automated driving, and thereplacement of metal with resin to reduce weight.

Focus
Fiscal 2017 Results and Fiscal 2020 Quantitative Targets
Net sales ■Operating income ■Ordinary income■(Billions of yen)
2,500
2,000

2,400
2,051

400
300

Director and Managing Executive Officer
President, Specialty Chemicals Company

29

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

vs. fiscal 2017
▲ 16

386
302

200

Susumu Yoshida

2,133

306
250

▲2

370

300

100
0

Fiscal 2017
results

Fiscal 2018
forecast

Fiscal 2020
targets

Strengthen Product Development in the Optical
Field Centered on Special Polycarbonate

Promote Localization Outside Japan to Forge
Closer Relationships with Customers

Materials for camera lenses installed in smartphones and tablets
require a high refractive index, which contributes to thinnerlenses, and a low birefringence, which contributes to image
sharpness. Super polycarbonate resin, lupizeta EP, which makes
all of this possible, has the world’s highest market share. In 2017,
the Specialty Chemicals Company received the chemicalindustry’s first Ichimura Prize in Industry for Outstanding
Achievement for theDevelopment of Special
Polycarbonate Resin. With
the growing demand for
optical components,
including in-vehicle cameras
and surveillance cameras,
the company is focused on
product development that will
drive the growth of this field.
Pictures are images

In the electronics industry, the target of electronic chemicals,
the recent tightening of intellectual property controls has led toprohibitions against taking products or data overseas.
Therefore, localization isrequired not only for
manufacturing, but also for
R&D, technical support andother functions. Under thesecircumstances, we haveestablished a new R&D
building at our Taiwan
subsidiary to build closer
relationships with customers
outside Japan.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201830

At a Glance

Growth Strategy

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

Information & Advanced
Materials Company
We will implement a highly profitable businessmodel by accelerating the research anddevelopment cycle and continuing to produce
high-value-added technologies and products
while anticipating the value needed by achanging society.
Business and Major products
Sales by segment

8.3%

Electronics Materials

Oxygen Absorbers

Laminate materials
for printed circuit boards● LE SHEET(auxiliary material for drilling)●●

Review of Fiscal 2017 andthe Medium-term Management Plan
In the electronic materials business, we focused on
developing products for the high performance,
higher-priced high-end market. As a result, we achievedyearly sales growth and increased revenue and earnings infiscal 2017. Optimizing the business chain including Group
companies and withdrawing from low-profit and low-growthbusinesses, as well as improving the company’s earnings
structure contributed to the earnings increase.

AGELESSAGELESS OMAC (oxygen absorbing film)● PharmaKeep (for pharmaceuticals and medical equipment)● AGELESS DRY (desiccant)● Anaero Pack (anaerobic cultivation system)● RP System (for electronic and machinery components)●

The oxygen absorber business has continued toincrease revenue by expanding sales to the pharmaceuticaland overseas markets, as well as its mainstay domestic
food market.
In fiscal 2017, although earnings declined due to the
fixed cost burden of the new plant built in the QOL
Innovation Center Shirakawa, the oxygen absorberbusiness will be boosted by enhancing the production basein both Japan and Thailand.

Outlook

Growth Initiatives

The operating environment in the electronic materials
business will continue to be brisk for the semiconductor
market, especially memory chips. The spread of IoT, thecomputerization of automobiles, and other such trends are
expanding demand for semiconductor devices acrosssociety as a whole, and at the same time, greater
functionality is being required of those materials.
In materials that meet advanced requirements, we havealready begun to produce results in leading-edge areas,such as fingerprint authentication and virtual currency data
mining. Along with this sales expansion, we will speed up
the development of next-generation products including
collaboration with outside parties in areas such as open
innovation and M&A.
In the oxygen absorber business, while seeking toincrease our market share in the maturing domestic foodmarket, we will continue to expand sales in overseas
markets and develop new applications. We will also focus
on providing solutions to higher value-added fields such as
pharmaceuticals and the precision machinery industry.

As a company that provides high-performance productsthat are widely used in the electronics and medical fields,
the Information & Advanced Materials Company seeks to
be a high-profit R&D-centered company. With thesuccessive development of technological innovations that
produce major changes in society, such as IoT, AI,
self-driving vehicles, and next-generation communications
systems, the constant creation of new products is aprerequisite for sustained growth.
For example, in the electronic materials, demand for
substrate materials for data centers is rapidly expanding
business. Meeting the need for heat-resistant materials that
can accommodate an increase in the amount of heatgeneration proportional to the volume of information helps
curb air conditioning energy and offers a solution to bothcustomer and social issues.
Even the oxygen absorber business triggers new
demand both in and outside Japan by promoting
advantages other than food safety and security, such as theimpact of reducing food loss as a food resource
countermeasure, and the effects of reducing the use of foodadditives to accommodate the health-conscious.
In this way, we will work to create new value and at thesame time proactively take on new frontiers in collaboration
with the Advanced Business Development Division.

Focus
Fiscal 2017 Results and Fiscal 2020 Quantitative Targets
Net sales ■Operating income ■Ordinary income■(Billions of yen)
600

600
527

500

519

80

63

60
40

31

Masahiro Johno20

Director and Managing Executive Officer
President, Information & Advanced Materials Company

0

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

63

50

51

Fiscal 2017
results

Fiscal 2018
forecast

vs. fiscal 2017+7
+10 7060

Fiscal 2020
targets

Optimization of the Business Chain throughGroup Restructuring in the Electronic Materials
Business

Creation of the Shirakawa Plant of
MGC AGELESS Co., Ltd., a New Production
Base for the Oxygen Absorber Business,

In December 2017, the Information & Advanced Materials
Company reorganized its group subsidiaries to optimize theelectronic materials business chain. Yonezawa Dia Electronics
Co., Inc., which is responsible for manufacturing printed circuitboards and other items, was made a subsidiary of MGC
Electrotechno Co., Ltd., which is responsible for the manufactureof copper clad laminates. We will expand sales by integrating
both companies to raise effectiveness and efficiency. In addition,
MGC Electrotechno Co., Ltd. will focus on the technology
development functions of the Electronic Materials Division as awhole by effectively
leveraging the technicalresources of each groupcompany, including
production technology,
quality assurance
technology and technicalservice.

MGC opened the MGC Ageless Company Limited’s Shirakawa
Plant in its QOL Innovation Center Shirakawa and began
operation in April 2017. In addition to the stable production ofhigh-quality products, MGC will create a supply system that isable to quickly respond to the sophisticated needs of its
customers.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201832

At a Glance

Growth Strategy

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Strengths Supporting
GrowthGrowth Strategy

Financial Information

Shareholder
Information

Corporate Data

New Businesses
Taking advantage of MGC’s strengths, we will
make proactive use of outside resources torapidly establish new businesses that meetsociety’s needs.

Vision and Philosophy for Creating
New Business
When creating a new business, it is important to develop astory that offers a concrete vision for a future beyond initial
success, one that describes where and how thetechnology, products, and businesses that we create will be
used in society and what kind of value they will generate.
Even in collaborating with outside partners, communicatingsuch a story will allow us to quickly and clearly share asense of purpose and create a reliable partnership.

The Role of the Advanced Business
Development Division

Policies for New Business
Development

The Advanced Business Development Division wasestablished in April 2015. Comprising the Business Strategy
Group, Business Development Group, and Advanced
Business Research Center, it seeks to rapidly create anddevelop businesses in new domains by integratingprocesses up to commercialization, from selecting thetarget business domain to performing the necessary
technical R&D, as well as market development.
Given our responsibility for business development in
new domains, it is essential that we not think “what can we
do with our technology,” but rather “what does society
need,” and based on that, determine the fields that takeadvantage of our strengths. To do that, we will bring abroad, flexible approach and market perspective to creating
a concrete path to commercialization.

In addressing domains not currently part of the MGC
Group, we must not rely solely on skills developed within
the Group, but also introduce knowledge from outside. We
will recruit experts with knowledge in various specialized
fields, including medicine, pharmaceuticals,
telecommunications and agriculture. We will alsocollaborate through open innovation, invest in venturecompanies, and actively cooperate with outside firms andresearch institutions, all with an eye to potential mergers
and acquisitions.
Whatever the project, manufacturing requires
materials, and by taking advantage of the Group’s diverse
materials, we will work toward early commercialization while
maximizing synergies.

Target Domains for New Business
The Advanced Business Development Division targets thefive business domains of medical/food,information/communications, mobility, energy, andinfrastructure. We are placing particular focus on the
medical/food field.
The table at upper right presents areas where a certain
level of sales are already anticipated; the sales targets set
for new businesses in the medium-term management plan
are also based on these figures.

Business Development Group
Business Strategy Group

Business planning & development andmarket exploration based on thebusiness concept proposal

Advanced Business Research Center
Product and service researchand development

BusinessdomainYoshihiro Kayano
Executive Officer
General Manager, Advanced Business Development Division
Deputy General Manager, Business Strategy Division

33

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

Business
concept proposal

Explorative
Marketresearch development

Medical / food

Plastic vials andsyringes OXYCAPT
Nucleic acid
pharmaceuticals

Mobility

Information / Infrastructure /communications
EnergyAll-solid-statelithium-ion batteries
Complex hydride
solid electrolyte

Factory farming
business

Active optical cable

Sales Plan for New Businesses and Products
Net sales■(Billions of yen)
150

120

100

50

10
0

Fiscal 2017
results

20
Fiscal 2018
forecast

Fiscal 2020
targets

Focus

Advanced Business Development Division

New business strategy development andbusiness concept proposal

Target Domains for New Business

Commercialization

Medical / foodEntering the Factory Farming Business by
Leveraging Knowledge of Chemistry
The vegetable factory is a cultivation facility capable ofcontinuous and systematic production through the artificial
control of environmental conditions such as light, temperatureand humidity, carbon dioxide levels, moisture, and nutrientsrequired for the growth of plants in the facility. MGC has built alarge-scale vegetable factory with 100% artificial lighting using
LED as its light source. The factory produces safe, reliable leafy
vegetables in an optimal growth environment free from climatic
influences, with the goal of providing a stable supply. In thefactory-based vegetable production business, we seek to build
a sustainable agricultural model by using MGC’s wide-ranging
knowledge ofchemistry in the
pursuit of a more
efficient cultivation
environment, andto provide safer,more reliable
vegetables.

OXYCAPT Plastic Vials and Syringes
MGC has developed OXYCAPT, the world’s only multilayered
plastic container that is highly resistant to cracking while offeringhigh oxygen barrier properties similar to those of glass. In addition
to low extractables of inorganic substances and the light weight, italso has superior UV barrier properties, thereby enabling thelong-term storage of pharmaceuticals. The stability andeffectiveness of this product can also be enhanced during its
effective period of use.
These features
have also been
evaluated bypharmaceuticalcompanies that
handlebio-pharmaceuticals
and emergency
medicines such as
epinephrine anddopamine.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201834

A History ofCreating ValueAt a Glance

Growth Strategy

New Medium-termManagement Plan

To Our Stakeholders

Strengths Supporting
GrowthGrowth Strategy

Financial Information

Shareholder
Information

Corporate Data

Research andDevelopment
MGC has helped build a prosperous society
and achieved sustainable growth, quickly giving
shape to the value society seeks by maximizing
technological synergies in and outside the Group.

R&D goals and targets
Enhancing the profitability ofexisting businesses

Creating and developing
new businesses

Emphasizing R&D themes leading
to greater profitability● Continuously improving coretechnologies

Achieving profitability in new
businesses early on● Acquiring technologies with an eye
toward the future business portfolio●

R&D Policy
Of the five measures listed MGC Advance2020, themedium-term business plan, “Strengthening the earning
power of existing businesses with a focus on the corebusinesses” and “Creating and developing new businesses”
in particular are closely connected to R&D.
We will conduct research and development in existing
businesses that will help improve quality and enhance ourcost-competitiveness, so that we can continue to support
earnings as part of the backbone of the MGC Group.
At the same time, in the new businesses, it is required
to quickly find research themes that match social trends.
For example, one recent result of our development work
was a special polycarbonate that is used as a lens material
for cameras in smartphones and other devices; it
succeeded because it was developed at a time whensmartphones were coming into widespread use.

If we can quickly determine the kind of value societyneeds next and achieve that value in a timely manner, we
can take the lead in fields with strong future prospects. Thisis the kind of R&D we will pursue in helping to create anddevelop promising new businesses.

R&D Investment

Masamichi Mizukami
Director and Managing Executive Officer
In charge of Research & Development Division,
Advanced Business Development Division

35

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

To enhance the quality that supports sustainable growth,
we focus on hiring and training R&D personnel andimproving the research environment.
MGC also provides opportunities to not only gain
cutting-edge knowledge aligned with specific research
themes, but to learn skills that focus on thecommercialization process, such as marketing andintellectual property.
We also create an environment that encourages
dynamic, more efficient R&D, for example, by creating
search sites where users can conduct document searches
as well as market research, and by introducing researchsupport tools.

●

Strengthening ties with groupcompanies

Improving total enterprise quality
to support of sustainable growth
Hiring and developing humanresources● Providing an enhanced research
environment●

R&D strategy
Technology platform and main products
Catalyst

Synthesis

Superacid / Solid catalyst /High pressure

Air oxidization /Liquid-phase oxidization /Hydrogenation

Promoting Research andDevelopment
The third measure noted in the medium-term management
plan is “Improving Group-wide operational efficiency.” To
take full advantage of the Group’s technology and expertise,
we are deepening collaboration between companies andGroup companies in an effort to create synergies.
We emphasize sharing information and work on holding
discussion with each other, such as holding a poster
presentation that presents research results and discussing
ideas by utilizing the internal network. In addition, since it isimportant to receive objective third-party assessments, we
also give presentations at academic conferences, matchbusinesses with venture companies, and promoteexchanges with corporate customers.

●

Improving group-wide
operational efficiency

Polymerization

Condensation polymerization /Bulk polymerization /Oxidization polymerization /Film and sheets / Resin treatment

Functional productsLife science

Oxygen absorber-related /Varnish-related /EL chemical-related

Continuous cultivation /Breeding /Antibody drugs technology

Research and Development Organization

Company R&D

Corporate R&D

R&D Department

Natural Gas Chemicals
Company

Advanced Business
Development Division

Niigata Research Laboratory
R&D Department of Niigata Plant

Research andDevelopment Division

Hiratsuka Research Laboratory

Aromatic Chemicals
Company

Advanced Business Research Center
R&D Administration Department
Intellectual Property Department
MGC Chemical Analysis Center

R&D Department of Mizushima Plant
Tokyo Research Laboratory

Specialty Chemicals
Company

R&D Department of Yokkaichi Plant

The primary purpose of company research is to make businesses witha competitive advantage stronger and to develop new products thatare based on existing products and technologies. This work is mainly
carried out in each company’s research and development division.
Corporate R&D works with the Advanced Business
Development Division on R&D to create new core businesses inpromising fields from a long-term perspective.

R&D Department of Yamakita Plant
R&D Department of Kashima Plant

Information & Advanced
Materials Company

Research and Development Center

Results of R&D expenditures (consolidated)■R&D expenditures

250

3.0

3.2

200

150

161

Intellectual Property and Patents

Ration of R&D expenditures■(Billions of yen)
300

168

3.2

189

(%)
4.0

3.5
3.0

192

189

2.0

1.0

50

0

3.0

2013

2014

2015

2016

2017 (Fiscal)

0Intellectual property plays an important role as a source ofcorporate competitiveness. At MGC, the Research andDevelopment Division, the Business Division, and theIntellectual Property Group work together as one toformulate and pursue strategies for the effective use of
intellectual property. Specifically, these divisions perform
rigorous “technology clearance searches” to check forthird-party infringement on patent rights and “prior art
searches” to check whether research results can bepatented. In addition, MGC aggressively protects andacquires the rights to the achievements produced by all
core and new businesses.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201836

At a Glance

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

Environment and Safety Management (Responsible Care)
At MGC, sustainable development, building a recycling-based society, and safe operations are importantmanagement issues that determine how we conduct our business.
We promote Responsible Care (RC)*1 throughout MGC as a means to ensure we achieve ourenvironmental and safety goals.

The MGC Group Policies on Environment and Safety
As an important member of society, the MGC Group makes an effort to earn social trust by
acknowledging our responsibility to contribute to the community, to preserve the environment andensure safe working conditions, and to align our corporate activities with global environmental
protection under the principle of sustainable development.

Strengths Supporting
Growth (CSR/ESG)
Environment and Safety Management (Responsible Care) E

38

Concern for the Environment E

40

MGC Group Eco-Friendly Products E

41

Initiatives Toward Safe, Stable Operations S

43

Together with Stakeholders S

44

Corporate Governance G

49

Compliance and Risk Management G

53

Environmental and
Safety Targets
Zero Accidents,
Zero Occupational Injuries,
and Environmental
Preservation

Basic Policies
Maintain occupational health and safety processes across all operations
Ensure process safety and security at work sites● Reduce environmental impacts and contribute to the sustainable developmentof communities● Ensure the safe handling, usage, and disposal of chemical products● Ensure the safe transport and storage of chemicals and related products● Build the trust of stakeholders● Implement group-wide environmental and safety initiatives● Improve environmental and safety management systems on a regular basis●●

Message from the Director in Charge of Environment and Safety

Kenji Inamasa
Representative Director,
Senior Managing Executive Officer

Last year was the final year of our three-year Responsible Care (RC) Medium-term Plan 2017.
In the fall of 2015, a fire and explosion at one of our hydrogen peroxide plants caused great
public concern. Subsequently, we worked to thoroughly investigate and identify the cause of
the accident, implement sound safety measures, and improve safety awarenesscompany-wide. As a result of these activities, we succeeded in achieving zero lost time injuries
and zero serious accidents in the two years following the accident. I believe this demonstrates
that our efforts aimed at ensuring accident- and injury-free, safe and stable production havefinally begun to show some success.
This year, we have revised the MGC Group Policies on Environment and Safety as part ofthe start of our new three-year RC Medium-term Plan 2020. It represents a renewal of ourcommitment to nurturing a broad trust with our stakeholders through our environmental andsafety activities. Under the survey of CDP*2 Climate Change 2017, MGC again received a ratingof A-, as we did the previous year. In addition to introducing MGC Group eco-friendly productsthat help reduce society’s environmental impact, we have also announced the MGC Group
Declaration on Environmental Sustainability, which sets out some of the ways the MGC Groupis working to contribute to sustainable community growth.
Over the three years of our new medium-term plan, we seek to be an outstanding chemicalcompany with original technologies and a strong presence in society, as we continue to pursue
environmental and safety activities to ensure safety and security in our production operations.

*1 Responsible Care: The chemical industry’s,
including MGC, voluntary activities to harmonize
business activities with global environment
preservation through ensuring environment, safety
and health in all stages of chemical substance life
cycles from development, manufacture, distribution,
use and final consumption to disposal.

37

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

*2 CDP: A not-for-profit charity that runs the global disclosure system forinvestors, companies, cities, states and regions to manage theirenvironmental impacts.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201838

At a Glance

Environment and Safety Management (Responsible Care)

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

Concern for the Environment
Climate change and other global-scale environmental issues have gained much attention in recent years.
The MGC Group recognizes that environmental problems are an important issue with a significant
impact on its business activities and is engaged in a variety of initiatives to address them.

RC Promotion System

RC Audits in 2017

All of MGC’s divisions, at both the segment and corporate
level, follow the Policies on Environment and Safety that
promote Responsible Care. Every December, MGC holds
environment and safety meetings, which are chaired by the
President and comprise all directors, audit and supervisoryboard members, company presidents, directors of plants
and laboratories, and the general manager of the Production
Technology Division. MGC also takes steps to makecontinuous improvements in the PDCA cycle based on the
RC medium-term plan targets and annual activity targets.
President

The MGC Group Declaration on Environmental Sustainability

The director in charge of environment and safety, together
with an auditing team, conducts the RC audit. This audit
assesses the status of progress with RC action plans andpriority audit items for the year at each of our sites.
In 2017, audits focused on (1) electrical equipment
safety management; (2) progress in identifying machinerywith high concentrations of PCBs; (3) partner company
occupational injury prevention efforts; (4) maintenance ofand improvements to construction starting procedures; (5)efforts to assess safety competency; (6) injury prevention
efforts; and (7), management of records regarding
distribution of safety data sheets.

The Mitsubishi Gas Chemical Group shall help communities develop more sustainably in the future bytaking actions aimed at maintaining a healthy global environment going forward, including initiatives
for tackling climate change, promoting community-based recycling, and protecting biodiversity.
1. We shall strive to procure energy, raw materials, water, and other resources in a manner that minimizes environmental
impact, and promote the efficient use of such resources.
2. We shall implement measures to reduce the environmental impact of greenhouse gases and other environmental pollutants.
3. We shall reduce waste through recycling and other initiatives, and properly manage and dispose of the waste we produce.
4. We shall promote the development and widespread use of products and technology that reduce environmental impact orhelp restore damaged ecosystems.
5. We shall fully comply with international rules and the environmental regulations of countries in which we operate.
6. We shall promptly and properly disclose information regarding our environmental initiatives and proactively engage with ourcommunities.
7. We shall strive to raise awareness of environmental issues through education.

Director in charge of environment and safety● Auditees

Environment andsafety meeting

5 plants, 3 laboratories (including Tokyo Techno Park),
4 company business divisions,Purchasing & Logistics Center

Administrative divisions

MGC group environmentand safety council meeting

Companies

Business divisions

GHG task force

Planning anddevelopment divisions

Responsible care audit

PlantsEnvironment andsafety departments

Researchlaboratories

Environment andsafety departments

Audit of certified highpressure gas plants
Environment and safety
inspection
Environment and safety
manager meeting● Audit findings

Full conformity (25 cases)
Non-conformity (no cases)
Improvement orders (8 cases)
Comments (23 cases)

Corporate headquarters
Environment, Safety and Quality Assurance
Division(Administrative office of RC)

RC Medium-term Plan 2020 (2018-2020)
The descriptions in the Category of Activities concerning distribution safety, dialogue with society, and RC in general have been omitted.

MGC considers climate change and water use to be important areas of risk that impact both the global environment and its
business activities, and is working to reduce its environmental impact.
Details of the MGC Group’s environmental impacts, including those not listed below, can be found on the Mitsubishi Gas
Chemical website (information scheduled to be made available in November 2018).

Energy consumption

Water intake(ML as crude oil equivalent)
600(1,000m3)

562

500

Category of Activities

Basic Policy

Mid-term Plan

400

Occupational
Health and Safety

Maintain occupational health andsafety processes acrossall operations

Aim to eliminate occupational injuries at the worksites of MGC and its partner companies
・Implement regular safety activities and ensure all personnel are informed of them・Share and utilize information about cases of occupational injuries
・Maintain healthy workplace environments and make improvements when necessary

300

Process Safety
and Accident
Prevention

Ensure process safety and security
at work sites

Aim to eliminate accidents in the workplace
・Ensure proper management of equipment and facilities
・Share and utilize information about cases of workplace accidents
・Improve the ability of employees to ensure safety and manage workplaces through
MGC’s Bridge-II activities

Environmental
Conservation

Reduce environmental impacts andcontribute to the sustainable
development of communities

Aim to protect the natural environment and contribute positively to communities throughbusiness activities
・Fully comply with environmental regulatory requirements
・Work to achieve environmental impact reduction targets
・Contribute to improving MGC’s credibility and reputation in society with respect toenvironmental conservation

Chemical and
Product Safety

39

MGC’s Primary Environmental Impacts

Ensure the safe handling, usage,
and disposal of chemical products

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

Work to consistently maintain safety across the entire lifecycle of chemical products
・Stay updated on chemical-related safety information and distribute such information
when necessary
・Practice risk management of chemical products
・Comply with chemical management regulations in each country of operations andinternational rules and regulations

537

50,000

497

469

455

480

40,00038,91537,38230,00033,80029,90130,81130,919201520162017 (FY)27,58528,852

29,046201520162017 (FY)20,000200

10,000

100
0

2012

2013

2014

2015

2016

2017 (FY)02012

GHG emissions

Wastewater(1,000 tons CO2 equivalent)
1,500(1,000m3)

1,250

1,341

40,000

1,280

1,197

1,000

33,678
1,047

966

1,010

34,80330,0002014

33,39420,000750
500

10,000

250
0

2013

2012

2013

2014

2015

2016

2017 (FY)

0

2012

2013

2014

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201840

At a Glance

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

MGC Group Eco-Friendly Products

Dimethyl ether A clean fuels

MGC products can be useful in reducing environmental impact in various areas of society.
These kinds of products have been designated by MGC as “MGC Group Eco-Friendly Products.”

Emits comparatively low amounts of NOx and noSOx and PM matter during combustion
Benefits fortheenvironment

Ageless oxygen absorbers Preserves the freshness and taste of food for longer periods
Reducing food waste loss
Benefits fortheenvironment

Ageless can keep food tasting delicious
and fresh for relatively long times, whichleads to less food being thrown away due
to mold, discoloration, or loss of flavor. Thatalso helps reduce the amount of times foodneeds to be produced and delivered, which
ultimately means less CO2 emissions.

Strengths Supporting
GrowthFinancial Information

AGELESSMGC produces dimethyl ether as well as methanol fromnatural gas produced as a by-product of oil drilling,
thereby making effective use of resources from anenvironmental perspective. Dimethyl ether is also being
promoted as a clean fuel because it emits no sulfur
oxide (SOx) and particulate matter (PM), which are
emitted when burning diesel oil or kerosene.

Direct methanol fuel cells

Nitrogen gas
flushing

Corporate Data

As an alternative to chlorofluorocarbons(CFCs), MGC’s dimethyl ether is used inaerosol spray cans as a propellant.
MGC is aiming to commercialize dimethyl
ether as a greenhouse boiler fuel thatfacilitates cultivation since it emits CO2
needed for the growth of plants andproduce while also providing heating.
MGC’s dimethyl ether can be used as aclean diesel fuel for trucks.

No mold colonies
form even after
20 days.

Testing the ability ofAgeless to prevent moldShareholder
Information

Enabling quiet and clean power generation

Supplies power without emitting any NOx, SOx, particulate matter or other atmospheric pollutants(at least 99.9%)

In air
0

2

4

6

8

10

12

14

16

18

20（日）

Under experimental conditions, observations were made of blue moldcolorization on castella sponge cake, in packaging containing an Agelesssachet, in nitrogen-flushed packaging, and when exposed to the air.

Benefits fortheenvironment

Direct methanol fuel cells (DMFCs) produce
power through a chemical reaction, so they
operate quietly and emit no atmosphericpollutants. They can also continuously supply
electricity for several consecutive days andare becoming increasingly common as an
emergency power source.

Meta-xylenediamine An environmentally- and health-friendly paint component

How DMFCs work
OUTPUT

INPUT

Water
Air+CO2

Power
generation

Methanol
Air

DMFCs generate electricity by producing a chemical reaction
using methanol and air. DMFCs can continuously supply electricity
as long as they are filled with methanol.

Contains absolutely no organic solvents
Benefits fortheenvironment

MGC’s meta-xylenediamine (MXDA) epoxy
coating is comparatively friendlier to humanhealth and the environment than conventional
products because it is water-based andcontains no organic solvents, which are acause of atmospheric pollution. Comparedwith ordinary curing agents, about 20% lessvolume of MXDA is needed to achieve thesame hardening performance, which ultimately
contributes to conserving oil resources.

Comparing MXDA and an ordinary curing agent
by the amount of needed forthe same performance
20% cut
Metaxylenediamine

A renewable andGeothermal power clean source of energy
CO2 emissions over the lifecycle of a geothermal
power* are less than 2% of a coal-fired power plant*Refers to CO2 emission over the lifecycle of a power plant, from construction tooperation and dismantling.

Ordinary curing
agent

Benefits fortheenvironment

Geothermal power is generated by using heatfrom the Earth’s core to produce steam. It is arenewable source of energy that can stably
generate power without being affected byseasonal weather changes. In addition,
geothermal power plants emit very little CO2,and contribute to preventing global warming.

How geothermal power generation works
The separator
separates the hot

Separator water and steam thatare drawn up.

The production
well draws up
subterranean
hot water andsteam.

Generator

Production
well

Injection well

The generator
uses steam toturn the turbine.

Cooling
tower

Injection well

Hot water andwater return tothe stratum via
the injection well.

AquiferMagma

A resin that contributes significantly to reducing weight andFoamed plastic increasing fuel economy of automobiles
Enables the weight of a car’s rear seat to be
reduced by 20 – 30% compared withprevious products
Benefits fortheenvironment

Widely used in automotive components,
foamed plastic is a very lightweight and rigidmaterial that contributes to improving thefuel efficiency of vehicles and reducing CO2
emissions. Foamed plastic is also anenvironmentally friendly material that can berecycled.

* Products of JSP, a member of the MGC Group.

41

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

Automotive components made with foamed plastic
MGC Group
global share60％

Sun visor Headrest
Front duct
Door pad
Front bumper

ToolboxAn environmentally-

Hydrogen peroxide friendly bleaching agent
Hydrogen peroxide is used as a bleaching agent
that does not harm marine ecosystems because it
decomposes into water and oxygen(as foamed PP)

Tibia padFloor duct
Floor spacer

Benefits fortheenvironment
Rear bumper
Rear seat

Hydrogen peroxide is a chemical compoundthat has been used as a bleaching agent andan oxidizer for many years. It produces noharmful by-products since it decomposes into
water and oxygen. Consequently, hydrogen
peroxide is in demand for various applications
as an environmentally friendly chemical.

Using hydrogen peroxide instead of chlorine tobleach paper products
Pulping

Wood chips
InkremovalWaste paper

Chlorinefree
bleachingprocess

Processing

Pulp before
bleaching Bleaching

Paper goods
Bleached pulp

Waste paper pulp

Pulp before
bleaching

MGC’s hydrogen peroxide
is used as a bleaching
agent for paper.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201842

At a Glance

To Our Stakeholders

New Medium-termManagement Plan

Strengths Supporting
GrowthGrowth Strategy

Financial Information

Shareholder
Information

Corporate Data

Initiatives Toward Safe, Stable Operations

Together with Stakeholders

MGC’s top priority is to ensure safety, and we are engaged in proactive initiatives aimed
at zero accidents and zero occupational injuries.

MGC aims to earn society’s trust and empathy by fulfilling its responsibilities to a variety of stakeholders
and by contributing to local communities as a member of society.

Occupational Health and Safety

Initiatives Toward Stable Operations

With the goal of achieving zero occupational injuries, weregularly conduct safety-related education and drills andoccupational health and safety risk assessments. In addition,
each workplace continuously engages in everyday safetytasks such as 5S activities, hazard prediction, and proposals
for addressing Hiyari Hatto (near-miss) incidents. As in theprevious year, there were no lost time accidents in 2017, four
plants and one research laboratory were recognized withzero-accident awards based on company rules, and as ofJanuary 2018, we have exceeded 1,000 days in a row withzero lost time injuries at MGC.

With the goal of reducing equipment breakdowns andproduction suspensions, we engage in systematic
maintenance, while also working to enhance workplaceskills. Our average unplanned down time per year per plant,a measure of the success of those activities, is trending
downward. In fiscal 2017 in particular, the Yamakita,
Mizushima, and Niigata plants received stable operation
awards based on company rules, in recognition of theircontribution to stable production.

Together with Customers

MGC average unplanned down time per plant for all plants(Time)
200

150

Chemistry class (Mizushima Plant)

Hazard prediction drill for new
employees

MGC
Chemical industry
Manufacturing industry

2013

2014

2015

2016

2017

0

0

0.27

0

0

1.06

1.06

0.82
0.94

0.76

0.81

0.88
1.15

0

2014

2013

2015

2016

2017 (FY)

0.81
1.02

*2 Frequency rate: Number of occupational injury casualties per one million
working hours

Lost time injury severity rate*3
MGC
Chemical industry
Manufacturing industry

2013

2014

2015

2016

0

0

0.00

0

0.09

0.06

0.12
0.10

0.17

0.04

0.03
0.07

2017
0

0.09
0.08

*3 Severity rate: Number of lost working days per 1,000 working hours

Safety record (MGC and partner companies)■MGC lost time ■MGC non-lost time ■Partner lost time ■Partner non-lost time
(Incidents)
40

30

20

10

0

2008

2009

2010

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

2011

2012

2013

Quality assurance

Preventing Product-related Accidents

50

Lost time injury frequency rate*2

Basic survey

In its MGC Corporate Behavior Guidelines, MGC outlines its
commitment to ensuring customer and consumer
satisfaction and trust, by responding to society’s needs andby providing high-quality products and services that are
useful, safe, and reliable. As part of achieving that goal, ourproduct liability management rules establish that theCompanies or the general manager of new businessdevelopment have responsibility for quality assurance, andall of our plants have acquired ISO 9000 series quality
management certification.
Other examples include MGC Ageless Co., Ltd. and
AGELESS (Thailand) Co., Ltd., which manufacture theoxygen absorber AGELESS; they have obtained certification
under the FSSC22000*1 food safety management system,
and are working to build a quality assurance structure.

2014

2015

2016

2017 (Year)

At MGC, we conduct basic surveys and safety assessments
at the product development stage. When products
correspond to new chemical substances, we first conductsafety testing and then classify the products according towhether they do or do not come under applicableregulations, as well as according to their degree of hazard
under stands such as GHS,*2 before preparing safety
information such as safety data sheets (SDSs). Based onthese, we perform risk assessments (based on hazards ofthe substances themselves and hazards related to exposure)for every stage of a product, from manufacture to disposal.
Products are offered once this screening is complete.
Many of MGC’s products are chemicals, and potential
product-related accidents include fires and chemical burns.
In the event problems related to the Product Liability Law(PL Law) occur, the designated staff person in charge ofcomplaints at each Company will work with the businessdivision in question, the production divisions, researchdivisions, or logistics divisions to investigate the source ofthe problem and propose countermeasures. At the sametime, the Product Liability Committee, which receives
reports from the designated staff person in charge ofcomplaints, will formulate and implement company-wide
preventive measures.
It should be noted that, thus far, problems related to the
Product Liability Law have not occurred at MGC.

Acquisition of SDSs for raw materials
Survey of literature related to safety● Survey of requirements for area of usage● Applicability survey for new substances●

Safetyassessment

Hazardclassifications

Preparation ofsafety information

Premarketinginvestigations●

Physicochemical hazard assessment
Assessment of hazard to health● Assessment of hazard to the environment●●

Survey of applicable laws
GHS classification● United Nations classifications●●

Preparation of SDSs
Preparation of warning labels (product labels)● Preparation of Yellow Cards
●
●

●
●

Assessment of risk management
Determination of marketability
Product supply

Customer information

100

43

A History ofCreating Value

Provision of safety information
Compliance with applicable laws
● Rationalization of product logistics● Collection of customer information●

Providing productinformation●

A SDS that conveys detailed
information about the handling andsafety of chemcials

A label printed witheasy-to-understand warnings andsafety information*1 FSSC22000 is an international standard adopted by major food manufacturers, retailers, and others worldwide as supply chain management guidelines.
*2 GHS: The Globally Harmonized System of Classification and Labelling of Chemicals. Chemical hazards are classified under fixed standards and are indicatedclearly with pictograms on labels and through SDS documentation. Ultimately, the information contributes to accident prevention and to protecting human healthand the environment.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201844

At a Glance

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Strengths Supporting
GrowthGrowth Strategy

Financial Information

Shareholder
Information

Corporate Data

Together with Our Stakeholders

Enhancing Customer Satisfaction
MGC offers a wide range of products. To respond to
customer expectations and the trust they place in our
products, MGC incorporates customer requests andfeedback in product development and in improving its
services.
For example, oxygen absorber “AGELESS” comes in adiverse lineup of product grades to meet the quality
retention needs of customers in fields such as foodproducts and medicine, and the attention we give tosanitation in the production process ensures we deliverproducts that are safe and reliable.

Recognized with Intel Corporation’s
SCQI Award
MGC has been recognized as a recipient of its
prestigious 2017 Supplier Continuous Quality
Improvement (SCQI) award by Intel Corporation, theglobal semiconductor manufacturer. The SCQI award isIntel’s most prestigious recognition and signifies an elite
performance in all critical management systems
supporting quality, cost, availability, technology,
customer service, and sustainability.
To qualify for SCQI status, Intel suppliers must
exceed the highest expectations and aggressive
performance goals while scoring at least 95 percent on
an integrated report card that assesses
performance throughout the year.
Suppliers must also achieve 90 percent
or greater on a challenging improvement
plan and demonstrate outstanding
quality and business systems.
MGC has been recognized with thisaward for eight consecutive years* since
2010.
*Recipient of the Preferred Quality Supplier(PQS) award in 2010, 2011, 2013, 2014, and2015, and of the Supplier Continuous Quality
Improvement (SCQI) award in 2012, 2016,
and 2017.

Compliance with the Act against Delay inPayment of Subcontract Proceeds, etc. to
Subcontractors
Each year we check the entire company for compliancewith this important law. We have also created a checksheet to verify the applicability of this law during new
business transactions, and regularly hold in-house training
sessions on the law to ensure complete compliance.

Working with Partner Companies
With our construction partners, we share information on
occupational injuries, and jointly conduct risk assessments,
safety training, and disaster reduction drills in an effort toprevent industrial accidents. At some plants, we also
recognize partner companies that have outstanding safety
records during periodic maintenance work. We work
closely with the shipping providers of our partnercompanies to ensure safety during transport, to enhancelogistics quality, and to carry out a modal shift.
MGC is working with its partner companies to build
better relationships, not only through efforts to ensure safety
and preserve the environment, but by conducting audits
and safety inspections of those partner companies.

Safety education during the first delivery under our modal shift.

Concern for Our Contractors

Together with Business
Partnerss
Procurement
One of the procurement criteria stipulated in MGC's
procurement rules is supplier reliability, and we consider a
supplier's CSR activity to be an important factor in thisregard. In this way, we endeavor to build a supply chain thattakes due account of regulatory compliance, theenvironment, and safety.

45

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

To ensure employees of our contractors can work safely,
we conduct environmental and safety audits and share
information on industrial accidents and irregularities. We
also exchange information by participating as observers on
one another’s Occupational Health and Safety committees
and ask contractors to participate in MGC safety meetings.
Through business audits, we also check on contractor
enrollment in various types of insurance and employee
pension programs.

Together with Employees
Respect for Human Rights
At MGC, we adhere to strict Corporate Behavior Guidelines
and the MGC Code of Conduct, which call for us to respectindividual personality and human rights, and to do nothingthat will hurt anyone by discriminating against them based on
their race, gender, nationality, age, religion, or place of origin.
Our Code of Conduct also articulates that sexual harassment
and power harassment are prohibited. These guidelines andcodes—along with the four fundamental principles*1 of theInternational Labor Organization (ILO)—have also beencommunicated to our Group companies overseas. We work
to reinforce these principles on a day-to-day basis throughtraining sessions and internal communications, and have alsoestablished a special consultation desk.
*1. Freedom of association and the right to collective bargaining; 2. Eliminationof forced labor; 3. Effective abolition of child labor; 4. Elimination of
discrimination with respect to employment and occupation.

Promoting Diversity
We are striving to put in place an environment that respects
diversity and enables our employees, themselves diverse
individuals, to demonstrate their unique capabilities, andapproach their work with a sense of purpose and meaning.
In promoting a more active role for women, we have
prepared an action plan ending in 2021 that targets afour-fold increase in the percentage of female managers
over fiscal 2015. Under the action plan, we are implementing
measures to support career development and enhance
programs that assist in balancing work and family life.
The re-employment rate for retirees desiring
re-employment has reached 100% for nine years in a row
from fiscal 2009 to fiscal 2017 as a result of ouremployment opportunities for retirees.
MGC also continues working to create a workplaceenvironment that allows people with various disabilities tofully demonstrate their capabilities.
MGC’s rate of employment for people with disabilities
in fiscal 2017 was 2.27%, which was 0.27% above thelegally mandated rate of 2.0%.

Work-Life Balance
In terms of work-life balance, MGC is working to create
programs and a culture in which each employee can feelsecure and motivated by their work, taking an active role overlong term in accordance with their individual circumstances.
We have established a system for child care thatexceeds the statutory requirements, including childcare leave
until a child reaches two years and one month, and a systemof shorter working hours until a child enters elementary

school. We have achieved a 100% return-to-work rate afterchildcare leave for six years in a row. In June 2016, MGC
was certified by the Minister of Health, Labour and Welfare as
a company that supports child rearing and obtained the“Kurumin” next-generation support certification logo.
In response to diversifying ways of working and taking
time off, MGC has established a flextime system, as well as asystem for accumulating annual leave (up to 40 days) andvarious types of special leave, including leave for marriage,
childbirth, work transfers, volunteering, medical donors, andothers. We also have in place a system whereby those needing
leave to care for family members can take up to one full year,
exceeding statutory requirements. In terms of corporate
culture, efforts include establishing a no-overtime day andmeasures to encourage employees to take their annual leavethrough such groups as the Shorter Hours Committee
established by labor and management.
As a result of these initiatives, usage ofannual leave was 90.3% in fiscal 2017(versus 86.5% in fiscal 2016), and total
working hours averaged 1,876.7 hours per
employee (versus 1,867.5 hourin fiscal 2016).
Female employees and managers (non-consolidated)■Female employees ■Number of managers(People)300*Excludes employees on outside assignment

231

237

224

225

236

200
100
0

7

2013

9

2014

8

2015

12

2016

11

2017 (Fiscal year end)

Employees and managers who are foreign nationals(non-consolidated)■Employees who are foreign nationals ■Number of managers*Excludes employees on outside assignment(People)
10

7

0

5

5

5

5

5

1

1

1

1

2013

2014

2015

2016

1
2017 (Fiscal year end)

Maternity leave ■Number of employees on maternity leave before and after birth■Number of employees on childcare leave**Parenthesis indicates the number of males who took childcare leave*For women, the fiscal year of child care leave is determined by the
first day of maternity leave.

(People)30

19 20（2）

20
10

6 0）
6（

0

2013

9 1）
8（

8 1）
8（

2014

2015

2016

（1）
13 14

2017 (FY)

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201846

At a Glance

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

Together with Our Stakeholders

Mental and Physical Health Care
We provide regular health checkups each year for all officers
and employees, and our checkup compliance rate is nearly
100%. When the results of tests indicate the need forretesting or there are any specific findings, we work topromote employee health through guidance provided byindustrial physicians and public health nurses.
MGC has also implemented a number of programs toensure mental well-being. The Employee Assistance Program(EAP) is one of these, and provides employees anenvironment in which they can freely consult outside
specialists regarding their concerns. In addition, to meet therequirement for stress checks stipulated by Japan’s
Industrial Safety and Health Act, we conduct an annual
mental health diagnosis for self-evaluation of stress levels,
and work to raise awareness of stress-related issues
through workshops and other means. We also conductmental health training during sessions designed for new
employees and those scheduled for promotion.

Human Resource Development at MGC
Our people are our most important asset. Based on ourhuman resource development philosophy, MGC strives toenhance mechanisms for enabling employees to better
themselves as professionals while improving their knowledge
and capabilities, and to create a working environment
invigorated by personal fulfillment.
MGC’s personnel system is a multi-stream vocation
qualification grading system based on management by
objectives. Up to the standard age of 28, employees belong
to the same basic career path regardless of gender or
educational background, and then move on to select acourse that will help them in their careers. We support all
employees equally, providing them with a range of career
opportunities in line with individual aspirations that meet theirroles, achievements, and capabilities.

Union and Labor-Management Relations
Under a positive relationship of mutual trust and respect, laborand management at MGC work together to address a variety
of issues. We hold regular management council meetings withthe aim of sharing our understanding of issues related to
management and the business environment, including suchthemes as work styles, employee benefits, and treatment,
and meetings of the Personnel System Review Committee forjoint labor-management discussion of various programs.
Together, we have revised the personnel system, there-employment system, and our retirement plans. Other
issues such as wages and bonuses are determined throughyearly collective bargaining and other negotiations.
Note that there were 1,846 labor union members as ofthe end of March, 2018 (a participation rate of 100% due tothe union-shop system). Employee tenure was 18.5 years(18.6 years for men, 17.3 years for women).

Together with the Community
Involvement in Community Activities
We encourage interaction with the community throughparticipation in local festivals, blood drives, and traffic safety
campaigns on local roads.

Environmental and Disaster Preparedness
Activities in the Local Community
To further local community understanding of ourenvironmental conservation and process safety activities,
we continue to participate in local dialogue meetings heldby the Japan Chemical Industry Association (JCIA).
In addition, we are working with local communities topromote safety and disaster preparedness through joint
drills with fire departments
and through other means.
All of MGC’s plants haveobtained ISO 14001
certification and continually
strive to improve the qualityof their environmental
Local dialogue meeting(Kashima Plant)
management systems.

Initiatives for the Next Generation
Taking part in the local festival(Yamakita Plant)

Donating blood(Hiratsuka Research Laboratory)

Local Environmental Preservation andBeautification Activities
At each of its sites, MGC
participates in thepreservation of nearby
coastal forests, and incleanup of local roads,
riverbeds, and otherbeautification activities.

We host student visits and internships involving local juniorhigh schools, high schools, technical junior colleges, anduniversities. We have also continued to provide chemistry
experiment kits to junior high schools near our facilities
since 2008, with the aim of helping students to realize thatchemistry is useful in everyday life and preventing adeclining interest in science. The kits help students learn
about the oxidation of iron by making pocket heating pads.
Through these and other initiatives, we are stimulatinginterest in chemistry among children and students who
represent the next generation.

Community cleaning(Kashima Plant)

MGC Advanced Polymers, Inc. Awarded
Environmental Commendation for
Fifth Consecutive YearIn September 2017, MGC Advanced Polymers, Inc. was
the recipient of the Platinum Award, the highest honor
under the Industrial Waste Pretreatment Program overseen
by Chesterfield County in the state of Virginia. This was thefifth year in a row that MGC Advanced Polymers was sohonored, and came in recognition of the company’s
having cleared all environmental regulations for 10
consecutive years. The company is currently working
toward two major objectives in the area of theenvironment—reducing the volume of organic substancesin wastewater generated byproduction processes, andreducing the amount of
nitrogen recovered fromrainwater—efforts for which
the county has high
The company’s collection oftrophies and commendations expectations.

Mirai Daigaku(Future University /Niigata Plant)

Chemistry experiment kits

Together with Shareholders
and Investors
To ensure shareholders and the investment community
have a correct understanding of MGC, we strive to disclose
information in a fair and transparent manner throughinformation disclosures in accordance with laws and therules of the stock exchanges, through the announcement of
information on our website or through media outlets, andthrough reports to shareholders.

Basic Policy on Profit Distribution
The MGC Group places topmost management priority on
enhancing corporate value. Based on the belief that improving
corporate value is in the interest of our shareholders andother stakeholders, we take into consideration planned
investments and loans for business expansion, financial
health, and future business trends, and work to achieve an
optimal balance between retained earnings and shareholder
returns. Retained earnings are applied to investments aimed
at business expansion and growth and at strengthening ourcorporate structure. The Company will continuously provide
stable dividends, while taking operating performance andother factors into account when determining the distribution
amount. The Company’s basic policy is to improve capitalefficiency and enhance shareholder returns by flexibly
purchasing treasury stock while considering the levels ofinternal reserves and returns to shareholders.
The full-year dividend for fiscal 2017 increased by 21 yen
per share to 59 yen (taking into account the share consolidation
conducted on October 1, 2016).

General Meeting of Shareholders
The general meeting of shareholders is held avoiding peakdays so that as many shareholders can attend as possible.
To give shareholders more time to consider how to vote,
MGC also endeavors to send out convocation notices early,
and posts the information on the company website inadvance of sending notices out. We also translate theconvocation notice and other documents into English andhave adopted an electronic voting platform in order to makethe process more convenient for shareholders. The rate at
which shareholders exercised their voting rights at the 91st
general meeting held in June 2018 was 83.27% (versus
84.27% in 2017).
To provide shareholders with booklets that are easier toread, understand and handle, beginning with the 91st general
meeting we also began printing the convocation notice in color,and have bound it together with our annual business report.

Briefings for Shareholders, Institutional
Investors and Securities Analysts
We hold a variety of earnings briefings and other businessbriefings for shareholders, institutional investors andsecurities analysts. We also post on our website referencematerials from ourearnings briefings aswell as otherexplanatory materials inan effort to share
information about MGC
in a timely fashion.
Earnings briefing

47

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201848

At a Glance

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

Corporate GovernanceWe strive to operate an effective corporate governance system and to continually reinforce and enhance
our system in order to fulfill the expectations of all stakeholders.

Directors

Corporate Governance Policy

MGC has set the term of office for directors at one year toclarify the accountability of management. There is also a
stipulation that MGC’s directors may concurrently serve as
an officer at a maximum of three companies other than
MGC Group companies, to ensure that they can fully
concentrate on MGC’s management.
For matters arising in the course of business executionthat may have a significant effect on the company, theBoard of Directors makes its decisions on the basis ofmultifaceted deliberations, including deliberations on
management policies by the Management Council anddeliberations on plans for executing specific policies by the
Operations Council. The Board of Directors receives advice
from attorneys and other experts when necessary in thecourse of its decision-making and supervision of businessexecution.
In addition, discussions incorporating a diverse range of
opinions are held to evaluate the efficacy of the Board of
Directors.

Mitsubishi Gas Chemical Company, Inc. (MGC) shall strive tooperate effective corporate governance systems andcontinuously reinforce and enhance those systems in order
to meet the expectations of all stakeholders including
shareholders. Accordingly, it shall adhere to the following
basic principles:(1) Ensure the rights of and equality among shareholders.
(2) Engage in appropriate collaboration with shareholders
and other stakeholders.
(3) Conduct appropriate information disclosures andmaintain transparency.
(4) Properly carry out the responsibilities of the Board of
Directors and other bodies.
(5) Engage in constructive dialogue with shareholders.

Corporate Governance System
MGC has adopted a corporate auditing system and, for the
purpose of business execution , has established an
executive officer system, which clearly separates
management decision-making and supervisory functions
from the business execution function. The Board of Directors
decides the basic policies of management, as well as
important matters relating to items decreed by law and thecompany’s Articles of Incorporation. The Board of Directors
oversees the execution of business, while executive officers
are responsible for directly managing business affairs.

Corporate governance andrisk management organization chart

Crisis Management

MGC’s Audit & Supervisory Board is comprised of four
corporate auditors, of which three are full-time and two are
outside members. They attend important meetings such as
those held by the Board of Directors and the Operations
Council, conduct audits of each division and surveys ofsubsidiaries, and audit the execution of business. The
members also monitor important decision-making
processes and business execution in order to ensure

General Meeting of Shareholders

Election/Dismissal

Election/Dismissal
Audit & Supervisory Board

Board of Directors
Compensation and
Nominating Committee

Corporate Auditors

Audit & Supervisory Board members

Auditing

Election/Dismissal

Auditing/Supervision

Business Execution

Ad hoc organization

Auditing

Independent Auditors

Inspection/Reporting/Auditing

Main committees related to internal controls

ChairmanPresidentInternal Control Promotion Committee

Crisis Response
Headquarters

Compliance Advisory Committee
Management Council

Risk Management Committee

Operations Council
Internal Audit DivisionCorporate Groups/Company Groups

Auditing, management and guidance through MGC’s internal control system
Group companies

49

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

reasonable decision-making and compliance with the law
and corporate norms.

Training of Directors and Corporate Auditors
MGC has newly appointed directors and corporate auditors
attend mandatory seminars outside the company covering
legal-related matters, particularly in connection with theCompanies Act of Japan, in order to enhance theirunderstanding of the roles, responsibilities and duties of theirrespective positions. When deemed necessary, MGC gives
directors, corporate auditors, and other officers
opportunities to attend external seminars covering various
topics, including compliance, risk management, internal
controls, and legal issues, and provides them with relevantbooks and other documents. Furthermore, all executive
officers and directors overseeing business execution
participate in workshops held each year, in which they
discuss challenges and tasks for management in groupsettings. When appropriate, experts from outside thecompany are invited to give informative lectures on current
topics such as revisions to laws.
In addition, MGC works to improve the efficacy andquality of its auditing by organizing study meetings formembers of the Audit & Supervisory Board and providing
opportunities for them to attend external seminars of theirchoosing in order to gain additional knowledge of relevantlaws, auditing techniques, financial accounting, and othermatters.

Compensation and Nominating Committee
MGC’s Compensation and Nominating Committee wasestablished for the purpose of ensuring transparency,
objectivity, and proper conduct in the process of determining
compensation for directors and executive officers, and of
nominating and appointing directors, corporate auditors andexecutive officers.
Proposals for compensation and nominations are
submitteds to the committee, which is made up of thechairman of the Board, the president, and outside directors,
prior to deliberations by the Board of Directors.

Information Sharing and Support Network for
Outside Directors
An employee not subject to instructions from directors has
been assigned to assist corporate auditors with their duties.
In addition to providing practical support for conducting
audits, the employee facilitates communication between theauditors and coordinates their activities as the administrative
staff of the Audit & Supervisory Board.
As members of the Audit & Supervisory Board,
corporate auditors regularly exchange views with directors,
periodically and promptly receive reports on the status ofbusiness execution and other important matters fromdirectors and the office staff, request explanations whenevernecessary and express opinions. The auditors also inspect
important documents related to the execution of businessand request explanations from directors and the office staff.
The auditors can make use of specialists who are
independent from the company, such as attorneys of law, forthe purpose of making proper decisions related to auditing.
In addition, outside directors and corporate auditors areencouraged to share opinions and information at any time inan effort to promote cooperation between the outside
directors and members of the Audit & Supervisory Board.

Standards for Outside Directors and Outside
Auditors
In order to ensure the fair and objective oversight ofmanagement, particular attention is paid to the
independence of outside officers (outside directors andoutside auditors), in accordance with criteria set by the
Tokyo Stock Exchange regarding independence. MGC
appoints only candidates who have no conflict of interest
with general shareholders.
The Company defines as independent all outside
officers who satisfy the requirements for being an
independent officer.
In addition, that candidate is deemed to qualify as anindependent officer as long as none of the following
matters apply.
1. If any of the following applies to the candidate.
● Has been a business execution manager*1 of theGroup.*2● Is a major shareholder of MGC*3 or is or has been abusiness execution manager for a major shareholder
company within the previous five years.
● Is or has been a business execution manager within theprevious five years of an important business partner.*4● Has been dispatched from a company or organizationthat has established a relationship with the Groupthrough the reciprocal appointment of outside officers.
● Works for or has worked for an auditing firm within theprevious five years that has conducted a statutory
audit of MGC.
● Provides or has provided consulting services otherthan statutory auditing to the Group within the previous
three years, for which he or she has received highcompensation.*5
2. If any of the following applies to a close relation*6 of thecandidate.
● Is or has been an important business execution
manager*7 of the Group within the previous five years.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201850

At a Glance

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthShareholder
Information

Financial Information

Corporate Data

Corporate Governance15
7

9

Members of the Board of Directors andAudit & Supervisory Board● Is a major shareholder of MGC or a business execution

manager for a major shareholder company.
● Is or has been a business execution manager within

the previous five years of an important business partner.
● Works for or has worked for an auditing firm within theprevious five years that has conducted a statutory
audit of MGC.
● Provides or has provided consulting services otherthan statutory auditing to the Group within the previous
three years, for which he or she has received highcompensation.
3. The candidate has another important vested interest in
the Group and has been reasonably deemed to beunable to fulfill his or her duties as an independent officer.
*1 Business execution manager: either a director overseeing businessexecution, an executive officer, other officer involved in businessexecution, or an employee*2 The Group: MGC or one of its subsidiaries*3 Major shareholder of MGC: a shareholder currently holding, either
directly or indirectly, 10% or more of total shares issued andoutstanding*4 Important business partner: a business partner that has madetransactions, including buying and selling, amounting to 2% or moreof consolidated net sales over the previous three consecutive years.
Consolidated net sales pertains to the Group in the event the Groupis the seller, or to the partner in the event the Group is the buyer.
*5 High compensation: in the case of an individual, an annual amountof 10 million yen or more, or in the case of a member of company ororganization, compensation exceeding 2% of its consolidated net
sales or total revenue.
*6 Close relation: either a spouse, first- or second-degree relative, or
financial dependent*7 Important business execution manager: either a director overseeing
business execution, an executive officer, or other officer involved inbusiness execution

Compensation of Directors and Auditors
Compensation to Directors
Compensation to directors (excluding outside directors)
consists of monthly compensation, which is the total of a●

Total amount of compensation(millions of yen)

Directors(excluding outside directors)
Auditors (excluding outside auditors)
Outside directors and auditors
Total

496
52
54
603

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

3

16
8

6
1

2

4

10
12

Hostile Takeover Defense Plan
At present, MGC has not established a hostile takeover
defense plan.

Total amount of compensation by type (millions of yen)
Basic compensation

Reserved retirement benefits

Number of people
receiving compensation

398
52
54
505

97
−
−
97

11
2
5
18

Note: In the above reserved retirement benefits for directors, provision has been made for the current fiscal year with respect to reserved retirement benefits for 12
directors other than outside directors. In addition, at the 91st Ordinary General Meeting of Shareholders held on June 26, 2018, it was decided to allot a total of
97 million yen in reserved retirement benefits for 10 directors excluding outside directors for their execution of duties between June 27, 2017 and June 26, 2018
to be paid at the time of retirement of each director.

51

14

basic compensation amount decided in accordance witheach director’s position and duties, performance-based
compensation reviewed every fiscal year, a reserved
retirement benefit, and restricted stock. The reserved
retirement benefit consists of a reserved sum that reflects
each director’s performance each fiscal year based oninternal rules and is to be paid in full upon retirement of thedirector.
In order to share the value with shareholders andfurther motivate directors to work toward sustainablegrowth in corporate value, a number of MGC shares will be
issued to directors as part of their compensation to be held
for a certain period of time with a restriction on transfer.
This system was newly introduced at the June 26, 2018
ordinary general meeting of shareholders.
In addition to these forms of compensation, a bonus
amount that is considered appropriate may be paid upon
resolution of a general meeting of shareholders.
Only basic compensation (fixed compensation) will be
paid to outside directors.
Officer remuneration will be decided by the Board of
Directors after comprehensively examining company
performance, common corporate criteria, employee salarytrends, etc., and after consultation with the Compensation
and Nominating Committee, comprised of the chairman,
president, and outside directors.
● Compensation to Corporate Auditors
Compensation to corporate auditors, who serve as
members of the Audit & Supervisory Board, consists onlyof a basic compensation amount within a range stipulatedby the general meeting of shareholders, which isdetermined through deliberations by the corporate
auditors.

Compensation (For Fiscal 2017)
Position

11

13
5

1 Kazuo Sakai●

7●
7

Representative Director, Chairman
22●

Toshikiyo Kurai

Susumu Yoshida
Director, Managing Executive Officer

8

8 Masamichi Mizukami●

3 Representative Director, President

9

Director, Managing Executive Officer

3 Kenji Inamasa
●
4

9
10●

Masato Inari

5

11

Representative Director, Senior Managing Executive Officer

4 Yasuhiro Sato●
6

Representative Director, Senior Managing Executive Officer

5 Masahiro Johno●

Director, Managing Executive Officer
6 Masashi Fujii●

Director, Managing Executive Officer

Director, Managing Executive Officer

10 Nobuhisa Ariyoshi●

12

Director, Managing Executive Officer

13 Takashi
13
Kimura●Audit & Supervisory Board Member（Outside）
14

14 Katsuhiko Sugita●

Audit
15 & Supervisory Board Member
15 Kunio Kawa●
16

Audit & Supervisory Board Member

16 Yasuomi Matsuyama●

Audit & Supervisory Board Member（Outside）

11 Kazuo Tanigawa●

Outside Director
12 Tsugio Sato●

Outside Director

As of June 26, 2018

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201852

At a Glance

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

Compliance and Risk Management
MGC practices compliance with the aim of earning the trust and understanding of the community,
while putting in place and strengthening systems for responding to a wide variety of risks.

Promoting Compliance
MGC Group takes a broad view of compliance, one thatinvolves not only abiding by laws and company rules, but
upholding the fair, transparent, and flexible conduct ofbusiness in acknowledgment of its responsibilities tosociety. Based on this understanding, we have summarized
the conduct expected of our executive officers andemployees in the MGC Corporate Behavior Guidelines andthe MGC Code of Conduct, the contents of which arereviewed and revised from time to time based on changes
taking place in society at large.
To ensure thorough complianceacross the entire MGC Group, we
distribute the MGC ComplianceHandbook to all of our employees inJapan. For overseas Group
companies, we have also created
English, Chinese, and Thai language
versions of the MGC Corporate
Behavior Guidelines and the MGC
Code of Conduct to ensure our
MGC Complianceapproach to compliance is instilled
Handbookin those companies as well.

Board of Directors
Report (as required)

President

Audit &
Supervisory Board
ReportReportReportCompliance Committee
Chairperson: Chief Compliance Officer
Vice-Chairperson: One director
Members: General Manager of Internal Audit Div.
Instructions for
General Manager of Environment, Safety andcorrections
Quality Assurance Div.
General Manager of Corporate Communications Div.
General Manager of General Affairs Div.,
Administrative & Personnel Center
Contact
Temporary members: Ad hoc appointment
RelatedObservers: Audit & Supervisory Board members
Divisions
ReportCompliance Consultation Desk
Compliance Committee Secretariat (Internal Audit Division)
Internal Contact Desks

ReportExternal Contact Desks
Compliance attorneys(Contracted attorneys’office)Inspection
requests

General contact: Compliance
Committee Secretariat
Individual contact: designatedwithin each division

Consultation andnotification

Consultation andnotification

Mgc Executives and Employees
People involved in the MGC Group’s business activities

MGC compliance concepts
Compliance Regulations
MGC Corporate Behavior Guidelines

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

Risk management promotion system
President

Risk Management Committee
Risk Management Committee
Chairperson: Chief Risk Officer
Members: Appointed heads of each corporate division
Others designated by the Committee Chairperson
Observers: Audit & Supervisory Board members
Secretariat(Administrative & Personnel Center
Administrative Group)

Risk Related
Departments

MGC has established a Compliance Committee tosupervise matters concerning the Group’s complianceprogram, headed by the Chief Compliance Officer andreporting directly to the President. The Compliance
Committee also includes a director (as vice-chairperson),heads of compliance-related departments, and others. The
roles of the Committee are as follows:
1. Formulating and deliberating on the framework,
policies, and implementation measures of MGC Group
compliance.
2. Understanding the status of implementation of MGC
Group compliance and providing necessary guidanceand supervision.
3. Investigating instances of noncompliance andformulating and deliberating on corrective measuresand prevention of recurrence.

The MGC Code of Conduct stipulates that exacting export
procedures are to be followed, in part to ensure adherencewith laws and international treaties regarding exports, andto ensure appropriate control over the provision of cargo
and technology that may relate to the development of
weapons of mass destruction and conventional arms.
Export transactions subject to screening include all
products exported by MGC or for which it provides
technology (including basic chemicals, high-performanceresins, electronic materials-related products, oxygen
absorbers, life science products, and newly developed
products), regardless of whether the transaction involves
direct, indirect, or brokered trade, as well as all technology
related to those products (including technology for
manufacturing, handling, and analyzing them). Export
screening is the responsibility of business divisions (headoffice divisions) familiar with the attributes and technology
used in chemical products, and an independent export
control division (Environment, Safety and Quality Assurance
Division), who screen all exports to determine if cargo andtechnology restrictions apply, the final customer, destination
and use.

The four Companies conducting business activities and all
corporate divisions actively assess and prioritize risk
situations and devise risk reduction measures. The Risk
Management Committee, headed by the Chief Risk Officer,
provides direction and supervision for each department aswell as deliberates on problems that require acompany-wide response.
In terms of risks associated with business execution,
we have developed an action plan to identify and evaluate
risks inherent in our operations and internal control
systems. We then take appropriate measures. In the eventa serious risk is identified, we set up a special group toaddress it according to internal rules.

Security export control education for
new employees

Screening demonstration using acomputer

Risk Supervising
Departments

Compliance System

Compliance policies, guidance and supervision, and steps
taken to correct and prevent recurrence of noncompliancewhich are formulated and deliberated on by the Compliance
Committee, are reported to the MGC president and the
Audit & Supervisory Board, then implemented uponcompletion of prescribed internal procedures.
In addition, MGC has set up a Compliance Consultation
Desk, intended to aid the early detection of unethicalpractices and implement preventive steps. Our internal
contact desks are staffed by the Internal Audit Department,
while outside consultation is available through the offices of
specialized attorneys, including access to female attorneys.
These attorneys also provide advice to the Compliance
Committee and assist with the training of relevant
departments.
Reports and consultations brought to the attention of
the Consultation Desk and deemed potentially serious
compliance violations are promptly reported to theCompliance Committee chairperson. The Compliance
Committee determines any required corrective action ormeasures to prevent a recurrence after investigating therelevant facts. The results of these investigations and thedetails of said measures are also reported back to the party
who submitted the original consultation or report.

Security Export Control Initiatives

Promoting Compliance

Risk Related
Departments

MGC Code of Conduct(family of MGC executives and employees,
affiliated companies, partner companies, trading partners, others)

In fiscal 2017 we renewed our study materials to makethem compatible with the latest compliance trends, issues,
and regulatory changes, and provided them to all
employees through our intranet.
Given an increasing need to respond to complianceissues, such as cartel involvement and illegal payoffs, atGroup companies affiliated with our overseas businesses inemerging countries and elsewhere, we are also working toenhance the quality of its compliance training for staff
dispatched as officers to overseas affiliates.

Risk Supervising
Departments

Toward a more concrete Standardof Conduct

53

Compliance Education

MGC compliance structure

Cooperating with the risk supervising department,
this department works toward risk reduction.

Responding to individual risks andcrisis situations as the department withresponsibility

Risk Management of Group Companies
MGC investigates and exchanges information regarding thestatus of risk management efforts at each of its groupcompanies, while also requesting that they further enhancetheir risk management activities. MGC divisions in charge ofeach company also share information and address any
issues when necessary. Risks that may have a significant
impact on MGC are also reviewed by the Risk Management
Committee.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201854

Together with Our Stakeholders

Formulating and Implementing BusinessContinuity Plans
Business divisions responsible for important products at
MGC formulate business continuity plans (BCPs).
To fulfill their obligation to supply core materials thathave a significant impact on customers, each businessdivision implements plans for developing multiple
manufacturing sites (which, depending on the product, may
include sites in other countries), buildup of inventory, andreduction of equipment stoppage risk.

Addressing Priority Risks
Among the various risks associated with its businessactivities, MGC considers earthquakes, leaks of poisonousand other hazardous substances, fires and explosions, andinformation leaks to be company-wide risks that need to begiven special priority, and measures to address these arereviewed in collaboration between business sites.

1. Measures Against Large-scale Natural Disasters
MGC has undertaken advance disaster reduction measures
to improve its facilities and minimize damage, based on
scenarios envisioning such natural disasters as a Nankai
Trough earthquake or an earthquake directly below Tokyo,
flooding, and volcanic eruptions. We have also deployed acompany-wide safety confirmation system to cope with theaftermath of a large-scale natural disaster, along withwireless communication devices and other emergency
devices, while also setting up reserve supplies of food,water, and other materials. Each year, we conduct
emergency drills using these systems and equipment. We
also work to ensure that in the event our headquarters areparalyzed by a natural disaster, each of our other facilities
may continue supporting customers and maintaining otherservices, supplementing the headquarters’ functions.

Wireless communication device for
emergency use

Disaster reserve supplies

2. Preventing Chemical Leaks
To prepare for an emergency situation, we have secured a
supply of disaster preparedness materials and equipment
and also conduct drills. We have created a wide-area
support structure to ensure our business sites cancollaborate and provide an emergency response in theevent of an accident.
Further, in addition to conducting drills envisioning alogistics accident, we also conduct drills for deploying oil fences

55

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

in the event of a spill at sea during marine transport, anddrills to address the possibility of an act of terrorism.

Ammonia spill response drill

Oil barrier deployment drill

3. Preventing Fires and Explosions
To prevent accidents and injuries before they happen, it isimportant to ensure that processes are safe and equipment
is sound, to allow stable operations to continue. Each MGC
plant utilizes an equipment management system, andworks to inspect, maintain, and upgrade equipment as
necessary according potential risk and importance. The
plants also use the Japan Society for Safety Engineering’s
safety competency assessment system to strengthen any
areas of vulnerability. Further, we reevaluate accidents thathave occurred at MGC in the past, establishingcountermeasures to prevent similar accidents fromoccurring, and conducting risk assessments based onassumed emergency stoppages.
To prepare for an accident, each business site has
established a self-defense disaster preparedness systemand conducts appropriate drills.

Disaster preparedness drill

Financial Information
Consolidated financial summary

57

Consolidated Balance Sheet

59

Consolidated Statement of Income

61

Consolidated Statement of Comprehensive Income

62

Consolidated Statement of Changes in Net Assets

63

Consolidated Statement of Cash Flows

65

Disaster preparedness drill

4. Preventing Information Leaks
MGC has put in place a framework and rules for managing
a variety of information—business information, technicalinformation, personal information and others—and works toprevent leaks in terms of both hardware and soft skills,
including everything from building information management
systems to providing employee training and education.
We also work to prevent leaks by strengthening
information system security using the latest available IT.

Ensuring the Safety of Employees Traveling or
Posted Overseas
Working with an outside consultant, we have analyzed
threats to safety by country and received advice about
addressing those threats. This allows us to acquire
immediate, accurate information, and, when necessary,
provide that information to employees posted or travelingon business overseas.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201856

Consolidated Financial Summary
Mitsubishi Gas Chemical Company, Inc. and Consolidated Subsidiaries
For the years ended March 31

2008

2009

2010

2011

2012

2013

2014

2015

2016

2018

2017

2018
（Thousands of U.S. dollars) *2

Operating results (Millions of yen)
Net sales
Operating income
Ordinary income
Net income attributable to owners of the parent
Equity in earnings of affiliates¥519,329
47,36661,75940,20921,312447,647(3,103)
6,975
7,014
14,706451,033
23,36336,394
18,95017,873

384,528
4,090
7,365
5,827
8,794

452,217
9,083
26,116
12,327
20,532534,443
11,48830,804
14,921
20,466467,979
11,421
27,651(7,793)19,045593,502
34,01845,432
34,134
16,683

529,570
14,99642,00043,34627,895635,90962,74180,71160,531
18,277556,480
43,76262,43048,013
21,125$ 5,985,589
590,559
759,704
569,757
172,035（Thousands of U.S. dollars) *2

Financial position (Millions of yen)

¥268,659
601,386
213,530
312,021150,573

Current assets
Total assets
Current liabilities
Net assets
Interest-bearing debt

215,298
530,592
161,088
272,083
174,934

244,522577,045
182,527
288,257
182,679

218,082
539,431
160,297
278,094
165,848

254,037
595,250
193,464
292,111
185,185

287,642
657,838
178,897
323,858
204,489

261,397
613,908
195,438
294,895
182,644

341,237
739,582
214,676
423,135
181,427

372,166
790,784
225,068
422,851
215,614391,009792,489
207,078
519,144
106,964

326,674
738,188
188,426
473,370
118,713$ 3,680,431
7,459,422
1,949,153
4,886,521
1,006,815（Thousands of U.S. dollars) *2

Cash flows (Millions of yen)

49,027(41,253)
11,54153,065¥ 40,394(20,907)(22,251)
37,235

Operating activity cash flow
Investing activity cash flow
Financing activity cash flow
Total cash and cash equivalents at end of year

39,773(24,626)(1,849)46,76831,326(33,662)(15,354)
36,04837,348(37,274)(9,876)35,701

27,182(29,883)
7,124
37,31031,169(30,818)(14,356)
26,907

84,671(31,922)(47,335)
75,82876,982(23,531)(25,005)
72,67890,720(33,614)(33,038)
90,30482,711(31,119)(60,217)67,177$ 853,916(316,397)(310,975)
850,000

Per share data (Yen)
Earnings per share (EPS)*
Net assets per share *1

1¥ 174.02
1,308.49

30.61
1,171.80

25.78
1,191.13

83.85
1,230.50

54.56
1,246.92(34.50)1,256.81

66.07
1,382.52

191.94
1,672.25

153.85
1,707.01

221.83
1,967.94

281.392,187.99

9.1
13.7
10.2
50.3

(0.7)
2.5
1.2
49.9

1.1
2.2
1.4
49.9

5.2
6.9
6.5
48.2

2.0
4.4
4.5
47.3

2.4
(2.8)
4.6
46.2

2.1
5.0
4.8
47.5

2.8
12.6
5.8
47.8

5.7
9.0
5.9
51.0

7.9
12.0
8.4
57.5

9.9
13.6
10.5
59.0

$
$

（U.S. dollars) *2

2.65
20.60

Rations (%)
Operating income margin
Return on equity (ROE)
Return on assets (ROA)
Equity ratio

9.9
13.6
10.5
59.0
（Thousands of U.S. dollars) *2

Others (Millions of yen)

35,11928,934
14,707
4,902¥ 39,448
24,521
13,562
4,686

Capital expenditure
Depreciation and amortization
Research and Development cost
Number of employees

42,423
27,763
17,4495,216

35,40028,95016,3804,979

27,56729,535
16,1984,920

25,40923,52816,122
5,445

30,98223,096
15,332
5,323

30,512
26,70518,936
8,176

22,226
23,77016,8738,254

30,95927,027
18,987
8,009

35,01025,631
19,2678,034$ 291,406
254,396
178,718
8,009*1 With and effective date of October 1, 2016, MGC conducted a reverse stock split for MGC's ordinary shares on a 2:1 basis.
As a result, each amounts per share in the above table are calculated assuming that the reverse stock split had been conducted at the beginning of FY2007.
*2 U.S. dollar amounts are translated from yen, for convenience only, at the approximate rate of ¥106.24= US$1 prevailing on March 31, 2018.

Net sales / Operating income / Ordinary income■■Operating income■■Ordinary income

Net sales■(millions of yen)
100,000(millions of yen)
600,000

80,000400,000

60,00040,000200,000

20,000
0

57

2014

2015

2016

2017

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 20182018 (FY)0

Ordinary income by business segment

Cash flows■Natural Gas Chemicals ■Aromatic Chemicals ■Specialty Chemicals■Information & Advanced Materials ■Others■■Operating activity cash flow■■Investing activity cash flow
Free cash flow■■Interest-bearing debt

(millions of yen)
100,000(millions of yen)
250,000■(millions of yen)
100,000
80,00075,00060,00050,00040,00025,00020,0000

0(25,000)(20,000)(50,000)

2014

2015

2016

2017

Interest-bearing debt / Net debt to equity ratio

2018 (FY)Net debt to equity ratio■(Times)0.6
0.5

200,000

0.4

150,000

0.3
100,000

0.2

50,000

2014

2015

2016

2017

2018 (FY)

0

0.1

2014

2015

2016

2017

2018 (FY)0

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201858

Consolidated Balance Sheet
Mitsubishi Gas Chemical Company, Inc. and Consolidated Subsidiaries
March 31, 2018

Liabilities and Net Assets

AssetsThousands of
U.S. dollars

Millions of yen
2017

2018

2018

Cash

¥ 88,720¥ 68,506

71,25674,770670,708

Accrued expenses

16,591

15,171

156,165

976,591

Accrued income taxes

4,133

3,394

38,902

5,818

63,620Accrued bonuses

5,422

5,351

51,035

13,725

139,750

Other current liabilities

20,954

21,233

197,233

207,078

188,426

1,949,153¥ 75,017

165,606

138,410

1,558,791

121

139

1,139

103,753

94,630

Deferred income taxes

6,759

Other current assets

14,847

Inventories

Less allowance for doubtful receivables
Total current assets

2018

Short-term debt and current installments of long-term debt

¥ 101,090

Short-term investments

2017

2018

Current liabilities:

Current assets:
Trade notes and accounts receivableThousands of
U.S. dollars

Millions of yen$

951,525

1,170

1,067

11,013391,009326,674

3,680,431

Trade notes and accounts payable

Total current liabilities$

835,090

Non-current liabilities:
Long-term debt

35,70743,942

336,098

Buildings and structures

203,544

199,782

1,915,889

Net defined benefit liability

4,592

5,936

43,223

Machinery, equipment and vehicles

450,543

449,490

4,240,804

Provision for directors’ retirement benefits (note 8)

339

387

3,191

Land

38,458

38,114361,992

16,64017,309156,627

Property, plant and equipment:

Leased assets
Construction in progress
Other

Deferred income taxes

760

807

7,154

8,986

8,814

84,582

12,347

12,233

116,218

Total non-current liabilities

66,26676,391

623,739

Total liabilities

273,345

264,817

2,572,901

41,97041,970395,049

46,923

46,877

441,670

752,577

747,305

7,083,744

531,859529,248

5,006,203

220,717

218,057

2,077,532

Other non-current liabilities

Stockholders’ equity:
Less accumulated depreciation
Net property, plant and equipment
Intangible assets, net:
Goodwill

3,911

4,258

36,813

14

22

132

Software

2,141

1,722

20,152

Other

2,343

2,367

22,054

8,411

8,370

79,170

Leased assets

Net intangible assets

Common stock
Authorized 492,428,000 shares; issued 231,739,199
and 241,739,199 shares in 2018 and 2017
Additional paid-in capital

34,57835,602

325,471Retained earnings

399,033

357,245

3,755,958

Treasury stock, at cost; 18,135,027, and 25,923,628
shares in 2018 and 2017(19,966)(21,829)(187,933)

455,616

412,989

4,288,554

162,472

Total stockholders’ equity
Accumulated other comprehensive income:

17,261

18,101

Deferred losses on hedges

(0)

(0)

(0)

Surplus on revaluation of land

222

222

2,090

Foreign currency translation adjustments(7,614)(6,249)(71,668)

Remeasurements of defined benefit plans

1,878

(351)

17,677

11,747

11,722

110,570

Net unrealized gain on other securities
Investments and other assets:
Investments in securities

161,391

175,461

1,519,117

Long-term loans receivable

2,632

2,658

24,774

Deferred income taxes

2,137

2,161

20,115Net defined benefit asset

1,221

12

11,493

Other investments and other assets

5,522

5,475

51,977Less allowance for doubtful receivables

555

683

5,224

Total investments and other assets

172,350

185,085

1,622,270

Total accumulated other comprehensive income
Non-controlling interests

51,78048,658487,387

Total net assets

519,144473,370

4,886,521¥ 792,489¥ 738,188$ 7,459,422

Commitments and contingencies
Total assets

59

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

¥ 792,489¥ 738,188$ 7,459,422

Total liabilities and net assets

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201860

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

Mitsubishi Gas Chemical Company, Inc. and Consolidated Subsidiaries
For the year ended March 31, 2018

Mitsubishi Gas Chemical Company, Inc. and Consolidated Subsidiaries
For the year ended March 31, 2018

Thousands of
U.S. dollars

Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income (expenses):
Interest income
Dividend income
Interest expenses
Equity in earnings of affiliates

2018

2017

2018

¥ 635,909
481,326
154,583
91,84162,741¥ 556,480
425,231
131,249
87,486
43,762$ 5,985,589
4,530,553
1,455,036
864,467
590,559

485
2,096(1,069)18,277423
1,789(1,346)21,125

4,565
19,729(10,062)
172,035

1,926

761

18,129Rent expenses(1,264)(454)(11,898)

Loss on valuation of investments in securities
Provision for loss on guarantees
Loss on liquidation of subsidiaries and affiliates
Personnel expenses for seconded employees
Loss on sale/disposal of property, plant and equipment
Impairment loss
Other, net(8,297)(1,088)(162)

73,421−−(667)(1,646)(634)(1,124)(888)
17,33761,0999,330(1,842)
7,487

7,640
30
7,671

¥ 65,933
5,402¥ 60,531¥ 53,427
5,414¥ 48,013(1,449)(1,115)(11)
2,352

10,680
Profit before income taxes
Income taxes:
Current
DeferredProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

61

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

ProfitOther comprehensive income arising during the year:
Net unrealized (loss) gain on other securities
Deferred (losses) gains on hedges
Foreign currency translation adjustments

Remeasurements of defined benefit plans

Gain on sale of investments in securities(78,097)(10,241)(1,525)

Thousands of
U.S. dollars

Millions of yen
2018

2017

2018

¥ 65,933¥ 53,427$ 620,604

(827)
(0)
2,102
2,204

8,264
3
(2,192)
2,113(7,784)(0)
19,78520,745

Shares of other comprehensive income of affiliates accounted forby the equity method
Total other comprehensive income arising during the year
Comprehensive income(1,775)(297)(16,707)

1,702¥ 67,636

7,891¥ 61,319

16,020$ 636,634

Comprehensive income attributable to:
Owners of the parent
Non-controlling interests¥ 60,555
7,080¥ 56,908
4,410$ 569,983
66,642(13,639)(10,495)(104)
22,139100,527
691,086

87,820(17,338)
70,473$$620,604
50,847569,757

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201862

Consolidated Statement of Changes in Net Assets
Mitsubishi Gas Chemical Company, Inc. and Consolidated Subsidiaries
For the year ended March 31, 2018

Millions of yen
Stockholders’ equity

Balance as ofApril 1, 2016

Restated balances asof April 1, 2016

Net
Deferred
unrealized
losses on
gain on otherhedgessecurities

Commonstock

Additional
paid-in
capitalRetainedearnings

Treasury
stock

Total

¥ 41,970¥ 35,603¥ 311,250¥ (15,566)¥ 373,258

Cumulative effects of changes
in accounting standards atoverseas affiliates(3,392)

41,97035,603

307,858

Thousands of U.S. dollars

Accumulated other comprehensive income¥ 9,816¥ (3)RemeasureForeign
Surplus onments ofcurrency
revaluation
definedtranslationof landadjustments benefit plans¥ 222¥ (4,613)(3,392)(15,566)

369,865

9,816

(3)

222

(4,613)¥ (1,736)

Stockholders’ equity

Total

Noncontrollinginterests

Total net
assets¥ 3,686¥ 46,190¥ 423,135

(118)

(118)

(1,855)3,568(3,510)46,190419,624

Balance as ofApril 1, 2016

$ 395,049

Additional
paid-in
capitalTreasurystock(31,928)

395,049

Total$ 335,119 $ 2,929,688 $ (146,517) $ 3,513,347 $ 92,395

Cumulative effects of changes
in accounting standards atoverseas affiliates
Restated balances asof April 1, 2016

Retainedearnings

335,119

2,897,760$ (28)

Surplus onrevaluationof land

Foreign Remeasurecurrency
ments oftranslation
definedadjustments benefit plans$ 2,090$ (43,421)(31,928)(146,517)

3,481,410

92,395

(28)

2,090

(43,421)

Total

Noncontrollinginterests

Total net
assets$ (16,340)$ 34,695$ 434,770 $ 3,982,822(1,110)(1,110)(33,038)(17,460)

33,584

434,7703,949,774

Changes arising during year:

Changes arising during year:
Cash dividends(6,986)(6,986)(6,986)

Cash dividends(65,757)(65,757)(65,757)

Profit attributable to ownersof parent

48,01348,01348,013

Profit attributable to ownersof parent

451,930

451,930

451,930

(16)

(16)

(16)

Change of the scopeof consolidation

(151)

(151)

(151)

78,850Change of the scopeof consolidation
Change of the scopeof equity method

8,377

8,377

Change of the scopeof equity method(6,264)(6,264)(6,264)Purchase of treasury stock

0

1

1

Disposition of treasury stock

0(1)

Change in treasury stockof parent arising fromtransactions with noncontrolling shareholders

(9)

8,377

Purchase of treasury stock
Disposition of treasury stock0

Change in treasury stockof parent arising fromtransactions with noncontrolling shareholders

(1)

(1)

Net changes other thanstockholders’ equity
Total changes during
the year
Balance as ofMarch 31, 2017

—

8,284

3

—

(1,636)

1,503

8,154

2,467

10,622

Net changes other thanstockholders’ equity
Total changes during
the year—(0)49,387(6,263)

43,123

8,284

3

—

(1,636)

1,503

8,154

2,467

53,746¥ 41,970¥ 35,602¥ 357,245¥ (21,829)¥ 412,989¥ 18,101

¥ (0)

¥ 222

¥ (6,249)¥ (351)¥ 11,722¥ 48,658¥ 473,370

Balance as ofMarch 31, 2017—
$ 395,049

78,85078,850(58,961)(58,961)(58,961)

0

9

9

(9)

(9)

—

77,97428—(15,399)

14,14776,751

23,221

99,981

405,902

77,97428—(15,399)

14,14776,751

23,221

505,892$ 335,109 $ 3,362,622 $ (205,469) $ 3,887,321 $ 170,378$ (0)$ 2,090$ (58,820)$ (3,304)$ 110,335(0)464,863(58,951)$ 458,001 $ 4,455,666

Changes arising during year:

Changes arising during year:
Cash dividends(9,927)(9,927)(9,927)

Cash dividends(93,439)(93,439)(93,439)

Profit attributable to ownersof parent

60,53160,53160,531

Profit attributable to ownersof parent

569,757

569,757

569,757

Purchase of treasury stock(65,983)(7,010)(7,010)(7,010)(65,983)(65,983)

Disposition of treasury stock

0

0

0

0

Disposition of treasury stock

0

0

0

Retirement of treasury stock(8,873)

8,873—

Retirement of treasury stock(83,518)

83,518Transfer to additional
paid-in capital fromretained earnings

8,816

—

Transfer to additional
paid-in capital fromretained earnings

82,982

Change in treasury stockof parent arising fromtransactions with noncontrolling shareholders

(966)

(966)

Change in treasury stockof parent arising fromtransactions with noncontrolling shareholders(9,093)

3,146

Net changes other thanstockholders’ equity

45,773

Total changes during
the year

Purchase of treasury stock(8,816)(966)

Net changes other thanstockholders’ equity
Total changes during
the year
Balance as ofMarch 31, 2018

63

Commonstock

Accumulated other comprehensive income
Net
Deferred
unrealized
losses on
gain on otherhedgessecurities(839)—¥ 41,970(1,024)¥ 34,578

41,787¥ 399,033

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018

1,863
¥ (19,966)

42,626¥ 455,616(839)¥ 17,261

(0)
(0)
¥ (0)

—
—
¥ 222

(1,365)(1,365)¥ (7,614)

2,229
2,229
¥ 1,878

24
24¥ 11,747

3,122
3,122
¥ 51,780¥ 519,144

Balance as ofMarch 31, 2018—
$ 395,049

0—(82,982)—(9,093)(9,093)(7,897)(0)—(12,848)

20,981

226

29,386

29,612(7,897)(0)—(12,848)

20,981

226

29,386

430,845$ 325,471 $ 3,755,958 $ (187,933) $ 4,288,554 $ 162,472$ (0)$ 2,090$ (71,668)$ 17,677$ 110,570(9,639)393,326

17,536401,224$ 487,387 $ 4,886,521

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201864

Consolidated Statement of Cash Flows

Shareholder Information

Mitsubishi Gas Chemical Company, Inc. and Consolidated Subsidiaries
For the year ended March 31, 2018

Thousands of
U.S. dollars

Millions of yen
2018

2017

2018

¥ 73,421¥ 61,099$ 691,086

27,027
1,094
11
—
236
162
(18,277)
4

25,631
538
1,124
987
870
667
(21,125)
246

254,396
10,297
104
—
2,221
1,525
(172,035)
38

Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors’ retirement benefits
Increase in provision for loss on guarantees
Interest and dividend income
Interest expenses
Gain on sale of short-term investments and investments in securities
Loss on devaluation of short-term investments and investments in securities
Increase in trade notes and accounts receivable
Increase (decrease) in inventories
Increase in trade notes and accounts payable

43
33
1,088
(2,581)
1,069(2,146)
8,327(28,607)(9,759)21,357(1,158)(141)—(2,213)
1,346
(690)

405
311
10,241(24,294)
10,062(20,200)
78,379(269,268)(91,858)
201,026

Other, net
Sub totalInterest and dividend received
Dividend received from affiliates accounted for by the equity method
Interest paid
Income taxes paid
Proceeds from subsidy income
Other, net
Net cash provided by operating activities

2,443
74,9482,545
20,008(974)(5,838)—29
90,720Cash flows from operating activities:
Profit before income taxes
Adjustments to reconcile profit before income taxes to net cash
provided by operating activities:
Depreciation and amortization
Loss on sale/disposal of property, plant and equipment
Impairment loss
Loss on reduction of non-current assets
Loss on business withdrawal
Loss on liquidation of subsidiaries and affiliates
Equity in earnings of affiliates
Increase in allowance for doubtful receivables

Cash flows from investing activities:
Capital expenditures
Proceeds from sale of property, plant and equipment
Purchase of investments in securities and subsidiaries
Proceeds from sale of investments in securities(Increase) decrease in long-term loans receivable
Proceeds from sales of shares of subsidiaries resulting in change in scope of consolidation
Payments for sales of shares of subsidiaries resulting in change in scope of consolidation
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Decrease in short-term debt
Proceeds from long-term debt
Payments on long-term debt
Redemption of bonds
Purchase of treasury stock
Dividends paid to stockholders
Dividends paid to non-controlling stockholders of subsidiaries
Payments from changes in ownership interests in subsidiaries that
do not result in change in scope of consolidation
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting
from change of scope of consolidation
Cash and cash equivalents at end of year

65

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2018240
(3,930)3,948
8,416(2,301)73,555
2,409
12,288(1,391)(5,226)1,015
59
82,711

22,995705,459
23,955
188,328(9,168)(54,951)—273
853,916

Information for Shareholder (As of March 31, 2018)
Composition of shareholders

ListingFirst Section of the Tokyo Stock Exchange
Ticker symbol
4182
Total number of authorized shares
492,428,000
Number of outstanding shares
231,739,199
Stock transaction units
100 - shares
Number of shareholders
20,088

Individuals and others

14.8％

Financial institutions

Foreign investors

2018.3

34.9％

38.1％

Securities companies

1.9％
Other companies in Japan

10.3％

Major shareholders
Number of shares held
(thousands)

Percentage of total
outstanding shares

Japan Trustee Services Bank, Ltd. (Trust Account)

10,155

4.8%

The Master Trust Bank of Japan, Ltd. (Trust Account)

9,119

4.3%

Meiji Yasuda Life Insurance Company

8,797

4.1%

Nippon Life Insurance Company

8,795

4.1%

The Norinchukin Bank

5,026

2.4%

Asahi Glass Co., Ltd.

4,835

2.3%

CHASE MANHATTAN BANK GTS CLIENTS ACCOUNT ESCROW

4,048

1.9%

GOVERNMENT OF NORWAY

3,896

1.8%

Japan Trustee Services Bank, Ltd. (Trust Account 9)

3,836

1.8%

Mitsubishi Tokyo UFJ Trust and Banking Corporation

3,506

1.6%

Name of shareholder

1. MGC holds 18,135 thousand shares of treasury stock, which is not included in the above list of major shareholders.
2. Percentage to Total Shares Outstanding does not include treasury stock.

(36,546)2,141(1,548)
4,949
(642)
804

(32,291)875(2,308)
2,482
177
—

(343,995)
20,152(14,571)
46,583(6,043)7,568

Monthly stock price range and trading volume■■Trading volum(yen)(Thousand of stocks)

4,000

40,0003,000

30,0002,000

20,0001,000

10,000Stock price range (based on closing price at end of month)

—

(313)

—

(2,773)(33,614)260(31,119)(26,101)(316,397)(7,300)10,359(14,143)—(7,010)(9,927)(2,024)(4,063)
1,741(27,828)(15,000)(6,266)(6,986)(1,654)(68,712)97,506(133,123)—(65,983)(93,439)(19,051)(2,883)—(27,137)

Dividend per share

(108)

(158)

(1,017)■Interim ■Fiscal year-end(33,038)(60,217)(310,975)(939)
23,127
67,177(48)(8,673)75,828(8,838)217,686
632,314—22—¥ 90,304¥ 67,177$ 850,000

002015.42016.4

(yen)
60

59
35

40
20
0

2017.4

28
14

32
16

38
22

14

16

16

2015.32016.32017.324

2018.3

Notes: With and effective date of October 1, 2016, MGC conducted a reverse stock split
for MGC’s ordinary shares on a 2:1 basis. As a result, the share price, market
trading volume and dividend per share in the graph are calculated assuming thatthe reverse stock split had been conducted at the beginning of April, 2014.

MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 201866

At a Glance

Corporate Data (as of March 31, 2018)

Corporate Information

Business Locations

Company NameMITSUBISHI GAS CHEMICAL COMPANY, INC.

Branch Offices

Address
Mitsubishi Building
5-2 Marunouchi 2-chome, Chiyoda-ku,
Tokyo 100-8324, Japan

Shanghai OfficeOsaka Branch
Taiwan Office
Research Institutes
Tokyo Techno Park (TTP)

Originally founded
January 15, 1918●

Tokyo Research Laboratory●

MGC Chemical Analysis Center

Incorporated
April 21, 1951

Niigata Research Laboratory

Capital41.97 billion yen

QOL Innovation Center Shirakawa

Hiratsuka Research Laboratory

Fiscal Year
Accounts closed in March

PlantsNumber of consolidated subsidiaries/
equity-method subsidiaries
70 (consolidated subsidiaries)
16 (equity-method subsidiaries)

Mizushima Plant

Number of employees
2,290 (non-consolidated)
8,009 (consolidated)

Yamakita Plant

Niigata Plant
Yokkaichi Plant●

Naniwa Plant●

Saga Plant

Kashima Plant

Main Banks
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Japan Bank for International Cooperation
Mizuho Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
The Norinchukin Bank
The Bank of Yokohama, Ltd.

A History ofCreating ValueTo Our Stakeholders

New Medium-termManagement Plan

Growth Strategy

Strengths Supporting
GrowthFinancial Information

Shareholder
Information

Corporate Data

Major Group Companies
Domestic
EIWA CHEMICAL IND. CO., LTD. [C]
FUDOW COMPANY LTD. [C]
GRANOPT CO., LTD. [E]JAPAN FINECHEM COMPANY, INC. [C]Japan Saudi Arabia Methanol Company, Inc. [E]Japan U-PiCA Company, Ltd. [E]
JSP CORPORATION [C]
Kaiyou Unyu Co., Ltd. [C]Kinoe Terminal Co., Inc. [C]
KYOUDOU KASANKASUISO CORP. [C]
MGC Advanced Chemical Inc. [C]MGC Electrotechno Co., Ltd. [C]
MGC Filsheet Co., Ltd. [C]Mitsubishi Engineering-Plastics Corporation [E]Polyols Asia Company, Inc. [C]
Ryoko Chemical Co., Ltd [C]
Ryowa Enterprise Co., Ltd. [C]
RYOYO TRADING CO., LTD. [C]Tokyo Shokai, Ltd. [C]Toyo Kagaku Co., Ltd. [C]Yonezawa Dia Electronics Co., Inc. [C][C] Consolidated subsidiary[E] Equity-method subsidiary

Overseas
BRUNEI METHANOL COMPANY SDN. BHD [E]
JSP International Group LTD. [C]
KOREA ENGINEERING PLASTICS CO., LTD.［E］
METANOL DE ORIENTE, METOR, S.A［E］
MGC ADVANCED POLYMERS, INC. [C]MGC ELECTROTECHNO (THAILAND) CO., LTD. [C]
MGC MONTNEY HOLDINGS LTD. [C］
MGC PURE CHEMICALS AMERICA, INC. [C]
MGC PURE CHEMICALS SINGAPORE PTE. LTD. [C]
MGC PURE CHEMICALS TAIWAN, INC. [C]
MGC TRADING (THAILAND) LTD.
MITSUBISHI GAS CHEMICAL AMERICA, INC. [C]MITSUBISHI GAS CHEMICAL ENGINEERING-PLASTICS(SHANGHAI) CO., LTD. [C]MITSUBISHI GAS CHEMICAL EUROPE GMBH
MITSUBISHI GAS CHEMICAL SHANGHAI COMMERCE LTD.
MITSUBISHI GAS CHEMICAL SINGAPORE PTE. LTD. [C]
PT PEROKSIDA INDONESIA PRATAMA [C]
SAMYOUNG PURE CHEMICALS CO., LTD. [C]SUZHOU MGC SUHUA PEROXIDE CO., LTD. [C]TAI HONG CIRCUIT INDUSTRIAL CO., LTD. [C]
THAI POLYACETAL CO., LTD. [C]
THAI POLYCARBONATE CO., LTD.［E］

We have renewed our website.
As well as adding contents introducing ourbusiness in an easy-to-understand manner,
we have made it easier to search for
information. The website can also be viewed
by smartphone.

Net sales
635.9 billion yen

Sales by business segment
Others0.1％

Information & Advanced Materials

8.3％

Specialty Chemicals

32.0％

26.3％
2018.3
Aromatic Chemicals

33.3％

67

URL: https://www.mgc.co.jp/eng/

Natural Gas Chemicals

Disclaimer
Plans, goals, and other forward-looking statements included in this report are determined based on information available to MGC as of the end of theconsolidated fiscal year under review, and on certain assumptions MGC has judged to be reasonable, and may include uncertainties. Actual results may differ
significantly from these forward-looking statements due to a variety of factors.

68