AICA Group CSR Report 2018

Companyprinciple

Challenge andCreationManagement
philosophy

Through a philosophy of symbiosis, theAICA Group will create new value andcontribute to society through endlessinnovation.

Operating
Policy1. Chemistry and design

We will create unique products through the power of chemistry and design, andcontribute to the realization of a prosperous society.

2. Group synergy

We will pursue technology/material cooperation, channel utilization, and creategroup synergy.

3. No.1

We will expand the top-share products we have in our business fields and regions.

4. Global

We will improve on our production/sales bases and human resources overseas,
and aim for sustainable growth in the global market.

5. Human resources and organizations

We will treat human resources as the most important management resource, and create
vibrant human resources and organizations through mutual understanding and growth.

6. Compliance management

We will observe laws and regulations and the social order, and implement fair
and transparent compliance management.

7. Commitment to safety and security

We place importance on communication with stakeholders, and promote“environmentally-friendly business activities.” and “securing quality that can be trusted”

1

AICA GroupA base to support AICA

Contents

AICA Group

Financial highlights .............................................................................. 3
Non-financial highlights ...................................................................... 4
Corporate history and changes in business fields ..................... 5
A message from the President ........................................................ 7
Two businesses that support AICA ............................................... 11
Three driving forces for growth ...................................................... 15

A base to support AICA ........................................................ 19

Business infrastructure .................................................................... 23
Human resources .............................................................................. 28
Environment ......................................................................................... 33
Relations with stakeholders ............................................................ 41

Third party opinions ................................................................ 46

Company Overview (As of end of March, 2018)
Company nameHead office location

AICA Kogyo Co., Ltd.
JP Tower Nagoya, 26F, 1-1-1 Meieki,
Nakamura-Ku, Nagoya, Aichi,
450-6326, JapanFounded
October 20, 1936
Representative
Yuji Ono, Representative Director &President
Number of employees [Consolidated] 3,850[Non-consolidated] 1,175
Business bases[Production bases (consolidated)]
13 locations in Japan, 28 locations overseas[Development bases (non-consolidated)]
5 locations in Japan[Sales bases (non-consolidated)]
26 locations in Japan
Editorial policy
This report has been created to explain to stakeholders (customers,
shareholders, business partners, local communities, and employees)
about the AICA Group's corporate activities regarding CSR, in an easy-tounderstand way using graphs and pictures.

ScopeThis report summarizes the activities of AICA Kogyo Co., Ltd. and allgroup companies in FY2017 (April 1, 2017 to March 31, 2018), and also
includes some activities from FY2018. The scope is given individually foreach part of the report.

Reference guidelines● Sustainable Development Goals (SDGs)● ISO 26000●
Ministry of Environment "Environmental Reporting Guidelines (Fiscal

UN Global Compact
As a corporation expanding business globally,
AICA Group has signed an agreement for
the UN Global Compact in September 2018,
which upholds a principle-based approach withregard to human rights, labor, the environment,
and anti-corruption in order to promote and put
into practice a high-quality CSR management.

Year 2012 Version)""The Guide for Reporting Contents and Miscellaneous Matters to beDisclosed in an Environmental Report"● GRI G4*
*GRI Sustainability Reporting Guidelines, Ver. 4, issued by the GRI(Global Reporting Initiative), an international NGO

Contact for inquiries about this report● Management Planning Department

TEL 052-533-3136
TEL 052-433-5941● This report is also available on our web site.
http://www.aica.co.jp/company/environ/report/● Safety Environment Department

2

AICA Group CSR Report 2018

Financial highlights● Sales/operating profit/ordinary profit● Net income attributable to parent company shareholders/ROE/ROA(100 million yen)(100 million yen)

300

200

2,000

145

147

1,500

1,438

1,410

151

158

161

163

1,516
180

183

(100 million yen)

(%)

150

12.0

1,637

9.5%

10.4%

1,500
190

82
1,000

100

119

7.0%

6.6%

6.8%

0

0
2013

2014

Operating profit(left axis)

2015

2016

Ordinary profit(left axis)

Sales (right axis)

(%)

546
466

33.2%

2016

ROE
(right axis)

2017 (FY)

ROA (right axis)

30.8%

33.4%

(100 million yen)

(%)

2,000

1,500

80.0

1,904
69.2%

40.0

411
33.3%

2015

●Total assets/net assets/equity ratio
50.0

498

0
2014

Current net profit(left axis)

600

29.2%

0
2013

(100 million yen)

478

3.0

2017 (FY)● Overseas sales/overseas sales ratio

300

6.0

50
500

450

9.0

99

7.3%

6.6%

10.1%

110

101

100

196

9.9%

9.4%

70.2%

70.4%
1,534

1,470

69.8%

1,318

30.0
943

1,000

1,196

1,125

1,072

64.4%
1,326

1,646

60.0

40.0

20.0
150

10.0

0

0
2013

2014

Overseas sales(left axis)

2015

2016

500

0

2017 (FY)

0
2013

2014

Overseas sales ratio(right axis)

Total assets(left axis)● Current net profits per share/shareholders’ equity per share● Dividend/payout ratio

(Yen)

2,000

1,500

1,000

1,581.17

1,654.14

1,759.91

1,880.13

1,405.27
155.99152.62

(Yen)

(Yen)

250

100

169.48183.76

150

50
0
2013

2014

2015

Shareholders’ equity
per share (left axis)

2016

30.2%

50.1%
40.0

30.1%
27.6%
46

43

38

60.0

92

20.0

0

0
2013

Current net profits per share(right axis)

Dividend(left axis)

2014

2015

2016

2017 (FY)Payout ratio (right axis)● Capital investment amount/depreciation costs/research and development cost(100 million yen)(100 million yen)

200

50

183
164
146

150

Equity ratio (right axis)

50.2%

25

2017 (FY)● Cash flow by business activities

Net assets(left axis)

2017 (FY)

(%)

100

0

2016

75

50

126.77

2015

85
200

500

40

45.2
38.7

38.2
34.9

130
30

112
100

20
50

29.9
21.4

29.6 31.0

29.3

23.5

34.5

25.9

26.7

35.6
28.5

10

0

0
2013

2014

2015

Cash flow by business activities

3

20.0

2016

2017 (FY)2013
Capitalinvestment
amount2014
Depreciation
costs

2015

2016

2017 (FY)

Research and development cost

AICA GroupA base to support AICA

Non-financial highlights●Transitions in energy input●Transitions in greenhouse gas emissions(TJ: tera-joule)(t-CO2)60,00053,458
11,155 ❷40,00041,442 39,639

39,24633,74630,4851,500

55,38543,5101,179

44,094

1,032

1,000

33,959744

20,000971

913

11,897 ❶

1,550

661

927
641

1,374

1,311

1,199

1,167

27.6

0

●Transitions in water use

23.9

25.1

(ton)

3,000

45,000
2,241
850 ❷

2,000

15,220 ❷30,00026,447

1,602

705

1,174 ❶

802

745

998

9,401

2013

2014

2015

2016

2017 (FY)2013

Production bases overseas● Number of employees (in Japan/overseas)

1,721

2,000

20

3,349
15
1,820

2,291

1,759

2013

2014

1,510

1,529

1,559

2015

2016

2017 (FY)

12

6

56.0%
45.0%
40.0%
7.4

7.8

40.6%
7.5

8.2

7

7
0.50
3
0 0.00%● Customer satisfaction level(%)(Points) * Out of 5

60.0

5
4

10.3
40.0

20.0
3

0

1.50

0.00%

2
0.00%

0

2013
2014
2015
2016
2017 (FY)
Total number of occupational accidents (left axis)
Accidents requiring absence
Frequency rate of occupational accidents (AICA Group’s all production bases in Japan) (right axis)
Frequency rate of occupational accidents (Domestic average) (right axis)

Group companies overseas(Days)

2.00

1.00

0

41.4%

1.63%
14

13

3

● Rate of taking of paid leave/average number of days taken*

9

1.61%

17 1.73%
1.66%

5

0
Group companies in Japan

1.66%

13

0.70%

1,276

2017 (FY)

10

1,000
1,362

2016

Production bases overseas* The total number of occupational accidents refers to the total number ofaccidents causing absence and accidents not causing absence.

1.58%

3,035
1,818

2015

*①Newly consolidated portion in FY 2015 ②Newly consolidated portion in FY 2016

(Cases)

3,850
3,328

2014

3,998

● Number of occupational accidents/frequency rate of occupational accidents(people)

4,000

3,947

3,044

9,402

Production bases in Japan**①Newly consolidated portion in FY 2015 ②Newly consolidated portion in FY 2016

3,083

2,779

0

Production bases in Japan*

3,000

24,602

9,329
2,992

428

0

17,045 ❶15,0001,664

431

42,23239,822

2,514

788

22.2

●Transitions in the amount of industrial waste(1000m³)

609

22.5

2013
2014
2015
2016
2017 (FY)
Production bases
Production bases
Non-production basesin Japan*overseasin Japan*①Newly consolidated portion in FY 2015 ②Newly consolidated portion in FY 2016

2013
2014
2015
2016
2017 (FY)
Production bases
Production bases
Non-production basesin Japan*overseasin Japan*①Newly consolidated portion in FY 2015 ②Newly consolidated portion in FY 2016

1,000

1,221 1,209

252 ❷

500

42,303

1,129

330 ❶

29,545

0

1,029

3.72

3.70

2013

2014

See p.42 for details

4.10

4.08

4.17

2015

2016

2017 (FY)

3
2
1

0
2013
2014
2015
2016
2017 (FY)
Rate of taking of paid
Average number of days taken (right axis)
leave (left axis)* Calculated from September 16 of year concerned to September 15 of following
year with regard to paid leave given in September 16

04

AICA Group CSR Report 2018

AICA Group: Corporate history and changes in business fields

1946～1954

1936～1945

1955～1964

1 Foundation

2 Conversion

3 Growth

Chemicals division of Aichi Tokei Denki Co., Ltd.
spun off to create “Aichi Kagaku Kogyo” in
October 1936. We aimed for mass production ofchemicals and related products during wartime.

We aimed to transition from munitioning over toprivate demand in order to achieve post-war
reconstruction. We entered paper manufacturingbusiness and ceramics businesses

We established business foundations in the backgroundof a strong economy. We entered high pressure laminate(HPL) business and took great leap forward to become
a comprehensive adhesive manufacturer.

◆Released Japan's first urea formaldehyde
resin adhesive, “AICHI-MUTEKI-NORI”.

◆Release of melamine formaldehyde
resin baking paints
Jacks andothers

3%

29%
Paper
manufacturing34%

Laminated
sheets

25%

340

25%

47%

Chemicalproducts

930

million yen

Chemicalproducts
Obtained a patent for a urea formaldehyde resin
adhesive “bonding agent”

Spark
plugs

◆Release of HPL “AICA”◆Withdrew from the spark plug andceramics businesses

million yen
Ceramics

9%

Papermanufacturing

Sales in November 1954 term

28%
Sales in November 1961 term

We have adjusted to times and flexibly rearranged portfolios, centering
our focus on resin synthesis technology which has been cultivatedsince the beginning of our foundation. The spirit of challenge andcreation including approaching new business and making use ofsynergy has been passed down to each generation.

964
8%

Transitions in sales (100 million yen)
Chemical products
Construction materials

33%

646

Laminated sheets
Building & housing materials
Electronics and the others

24%

352

30%

28%
48%

175
34%
28%

28%
17%

38%

26%

November
1976 term

November
1986 term

1975～1984

5

31%

26%

*1

1985～1994

March
1996 termMarc
2006 te1995～2004

5 Changes

6 Development

7 Harmonization

We laid out the slogan “challenge and creation”(a current company principle) together with a
new management plan, and worked towards
strengthening management structure.

We were listed on the First Section of the Tokyo
and Nagoya Stock Exchanges. We promoted
the diversification of business such as advances
to multi-layer printed wiring board business.

We deployed our QEO management system as “atrinity of activities”. We promoted environmental
management by means of strengthening groupcollaboration.

◆Wall coating materials, “JOLYPATE”
released◆HPL, “AICA Color System 105”
released◆We have the top-share of HPL in
Japan◆Noncombustible decorative panels,“CERARL” released◆“CERARL” was a big hit as a kitchen panel◆“Environmental Report” first published

AICA GroupA base to support AICA

1965～1974

4 Expansion
Whilst bearing the brand name of “Aica”, wechanged our company name to “Aica Kogyo
Co., Ltd.” We expanded the business contents
by means of new products/new technologies.

◆Postform and wood doors released◆First production base overseas established◆Withdrew from the paper manufacturing business

Laminated
sheets46%

Chemicalproducts

32%

3.29

billion yen

22%

1,637

Construction materials
business

808
(49%)

High pressure laminate (HPL) released in1960 made use of resin synthesis
technologies which had been developed in thechemical products business. We aimed tostand out in terms in functionality and design,
and a result, have the top share in Japan. We
developed a line up of HPL and peripheralproducts, which gave color to a variety ofspaces including residential facilities andnon-residential facilities. P.13

Paper
manufacturing

Sales in January 1966 term

1,500

1,516

g
24%

51%

964

We develop a multitude of
products that make use of ourcore technology: Resin synthesis

24%

8%

33%

Chemical products
business

30%

51%

829
(51%)

49%

28%

March
2006 termMarch2016 termMarch2017 term*2

Since the development of the first urea
formaldehyde resin adhesives in Japan,
AICA’s chemical product business has beenleading with its polymer chemical technology.
We are playing an active role in a wide variety
of fields from woodwork/furniture, buildings toautomobiles, electronic material, andcosmetics. We will continue to take onchallenges in new fields by means of active
chemical technology development. P.11

March2018 term

2005～

8 Coexistence
We strengthened active expansion overseas andactivities for new businesses. In addition to environmental management, we focus on CSR activities.

◆Printed wiring board business has beentransferred◆Inherited the Asia Pacific Department from
Dynea Chemicals and strengthened basesin Asia*1. Along with a change of the account closing month, the accounting period for the March
1989 term is 4 months.
*2. We have merged the laminated sheets business and the building & housing materials
business into the construction materials business since the March 2017 term.

6

AICA Group CSR Report 2018

Message from the President

We aim to be “a company thatsustainably develops” by strengthening
ESG activities▶ Market environment and consolidated
performance in March 2018 term

We have achieved increasing profits inconsolidated operating income andconsolidated ordinary profit for 9 terms
consecutively.
AICA Group is promoting various measures forsustainable development, using all of our group’s
resources. For example, expansion of the product line “ASproducts” which contributes to the solution of social issues,
developing and investing in focused-on fields that will
carry the next generation on their shoulders. This includes
also the sales expansion of adhesives and High Pressure
Laminate(HPL) in Asia and Oceania regions, etc. on thebasis of policies in the middle-term business plan “C&C2000” from April 2017 to March 2021.
With regards to the consolidated performance in March
2018, sales increased to 163.7 billion yen (8.0% increase
compared to the previous year), operating profit increased
to 19.0 billion yen (5.5% increase compared to the previousyear), ordinary profit increased to 19.6 billion yen (6.7%
increase compared to the previous year), and net income
attributable to parent company shareholders increased to11.9 billion yen (8.4% increase compared to the previousyear). Sales have been increasing for 8 consecutive terms,
operating profit and ordinary profit have been increasing

7

for 9 consecutive terms, and net income attributable toparent company shareholders has been increasing for 2
consecutive terms.
In the construction field of the housing-related businessin Japan, housing numbers started to decrease due tooversupply of rental houses etc. As a result, we were met
with some notable challenges. On the other hand, in nonresidential related business, vigorous capital investmentsfrom companies and inbound effects increased demand in
new construction and repairs of plants, warehouses,
hotels, etc. As a result, restoration of construction areas
and the proactive introduction of new products was
successful, which have in turn increased sales.
In the non-construction field, the Speciality & performancematerials field of the chemical products businessperformed strongly, mainly in polymer beads.
In overseas business, we have incorporated the demand
for adhesives and industrial resins in Asia, centered on
AICA Asia Pacific Holding Group and have remained
strong. We were also able to steadily increase sales in
HPL in Southeast Asia.
Looking back, we think that this was a year we could
maintain a base for achievement of the middle-termbusiness plan “C&C 2000” by taking management
measures that flexibly responded to changes in the market
environment.

AICA Group▶ The status of progress of the middleterm business plan and issues clarified

A base to support AICA

▶ Middle-term management strategy

We shall implement efficient strategies andmeasures for a variety of aspects inbusiness activities

Developing and investing in focused-on fields thatwill carry the next generation on their shoulders
and the promotion of activities related to reinforcing
business infrastructure are future issues

It seems that a more hostile environment will come aboutsuch as a sudden rise in crude oil/naphtha price andlogistic costs, a decrease in housing numbers with theaccompanying population reduction, a demise of theTokyo Olympics related economy boom, etc. when we lookat the management environment by the March 2021 term.
In order to respond to these changes of market environment
and to achieve a variety of goals specified on the middleterm business plan, AICA Group will take measures asfollows and pursue sustainable growth and maximizationof corporate value.
For sales strategies, we shall focus on development of
new markets/applications and expansion of sales areas.

AICA established the “AICA 10-year Vision” P.9 as agoal for our 90th anniversary year (March 2027 term). The
middle-term business plan "C&C 2000" summarizes thegoals and basic management strategies to be achieved forthe first four years.
Under the banner of our basic policies—pursuing andrealizing three driving forces for growth, and reinforcing
the business structure to support growth, we have set
numerical goals for the year ending in March 2021. We
aim to achieve 200.0 billion yen in consolidated sales,
22.0 billion yen in consolidated ordinary profit, 10% ormore in ROE, and 35% or more in overseas sales ratio.
The result as of the end of March 2018 is shown in thetable below. The targets were achieved both withconsolidated sales and consolidated ordinary profit, andgave momentum to achieve the final target of the middleterm business plan.

Middle-term business plan (March 2018 term to March 2021 term)
Financial targets
March 2017 term (actual)

March 2021 term (plan)

Consolidated sales

Item151.6 billion yen

200.0 billion yen

Consolidated ordinary profit

18.3 billion yen

22.0 billion yen

ROE

9.9%

10% or more

Overseas sales ratio

30.8%

35% or more

Basic policy

1

Pursuing and achieving three driving forces for growth

Reinforcing the business structure to support growth P.19

❶ Sustaining growth of domestic core business through the enhancement of AS products * P.15-16❷ Developing and investing in focused-on fields that will carry the next generationon their shoulders P.17 .
(fields not related to construction, fields concerned with construction materials
that have not yet been developed)❸ Overseas deployment of Japanese technologies P.18

❶ Growth of individuals through C&C activities *❷ Improvement of CS and ES *4 by means of QEO
management *3 and IT foundation renewal❸ Observing compliance2

Business performance
Item

Sales (100 million yen)March 2017 term
(actual)March 2018 term
(actual)March 2019 term
(plan)March 2021 term
(plan) *5

1,516

1,637

1,850

2,000

Ordinary profit (100 million yen)

183

196

210

220

ROE

9.9%

10.1%

10.6%

10.0%

38.7

45.2

80

Investments
Capital investment (100 million yen)
Business investment (100 million yen)
Research and development cost (100 million yen)
Investments in human resources

Total
220

0

50.6

Undecided

180

26.7

28.5

32.2

140

Active recruitment/development of global human resources, work style reforms
Professional human resources development/diversity promotion*1 AS products: Abbreviation for AICA Solution products. Products that solve a variety of social issues*2 C&C activities: Small group activities for conducting management and improvement of quality with regard to products, services, work, etc. under the spirit ofchallenge and creation. They have been conducted since around 1970
*3 QEO management: A management system based on a trinity of Quality, Environment and Occupation health and safety*4 CS and ES: CS refers to customer satisfaction and ES refers to employee satisfaction*5 A goal which was set when the middle-term business plan was developed.

8For purchasing strategies, we will integrate a purchasing
function separated for each company into a newly
established “Purchasing Department” to achieve highly
efficient purchasing through centralized management of
information and effective use of human resources. For
human resources strategies, we will actively employ
professionals. At the same time, we will strive to enrich thetraining and development programs in order to actively
support the self-improvement of employees. For production
strategies, we will introduce management resources tooptimize production for all group companies. In addition,
we will improve productivity by automation.
For M&A and capital alliance, we will consider acquisitionand partnership where synergy creation can be expected
in existing business areas and the surrounding fields. We

acquired Evermore Chemical Industry Group (EMC
Group) in Taiwan in January 2018. As a result, we came to
be able to engage in a full line of production using raw
materials such as UV monomer and polyol to polymer
synthesis as an AICA Group. From now on, we will expand
sales channels for EMC Group's products and maximize
the synergistic effect achieved through cooperation witheach AICA Group company, by making use of sales
networks and production bases of AICA Asia Pacific
Holding Group. For our investment plan, we will continue
investments which lead to business expansion such as anincrease in production capacity, M&A, and research anddevelopment. The total amount of investments for 4 years
is planned to be 54.0 billion yen.

Summary of Aica’s 10 years vision
Financial targets for
10 years from now

March 2017 term

March 2027 term

Consolidated sales
JPY 151.6 billion
Consolidated ordinary JPY 18.3 billion
profitJPY 300 billion
JPY 30 billion

ROE
Overseas sales ratio

10% or more
45% or more

9.9 %30.8 %

Where we should beafter 10 years

Chemical products

Sales: JPY 170 billion

Aica Group will aim to be Asia’s No.1 resin manufacturer in theconstruction field to support people’s life and social
infrastructure. We will also grow business in non-construction
field including automotive/daily goods/ electronic materials.

Construction materials

Sales: JPY 130 billion

Aica Group will stretch the strength in the interior wall materials
into the exterior wall as well. We will continue to grow as a
“Solution Provider for Space Design” that offers comfortability& safety in residential & non-residential buildings.

Business collaboration

We will continue to enhance the collaboration between Chemical products segment and Construction Materials segment to develop
unique products that contribute to the society.

Utilizing capital tie-up and M&A

We will actively and efficiently utilize our own funds for our future growth, including capital tie-up or M&A.

Group Collaboration & Operation Base Enhancement●Optimize production &●Compliance

In order to establish a system which can respond to changes inmarket environment, we are strengthening group collaboration andbusiness foundations.

●Technology and material●Healthy financial baselogistic systemcooperation●R&D investment●QEO management●IT infrastructure investment

Human resource development
We promote diversity management. In order to develop globallycompetent human resources and professional human resources,
we will establish a variety of development systems.

Responsibility to stakeholders
We will put an emphasis towards communication with stakeholders,and promote management which contributes to local communities
and enhances CS and ES.

9●Globally competent human resources●Diversity●Professional human resources●Increase corporate value●Corporate governance enhancement●Harmony with local communities●Improvement of CS & ES

AICA Group▶ Ways of thinking toward CSR and
activity policies

We actively promote the Virtuous Cycle
Model which helps us pursue both
economic value and social value.
In September 2015, sustainable development goals(SDGs) were adopted in the UN Summit followed by theParis Agreement in November 2016—an internationalframework dealing with issues of climate change startingin the year 2020—came into effect. Not only global trends,
but also from dialog with stakeholders, we feel that there isa strong need for a sincere response to the environment,poverty, hunger, human rights, and governance from a
global perspective. At the same time, there is also a strong
demand for the business management that is compatible
with non-financial goals (social values) and financial goals(economic value).
Given such trend, the AICA Group is enhancing its
initiatives for E: Environment, S: Society, and G: Governanceas CSR (Corporate Social Responsibility).
For example, we suggest and provide solutions to avariety of social problems by making use of the strengthsof the AICA Group, and promote the Virtuous Cycle Model

A base to support AICA

which is linked to the improvement of business performance.
We focus on development and sales expansion of AS
products ( P.15 ) which make use of our technologicalstrengths for issues like the deterioration of buildings andinfrastructures, depletion of natural resources, and labor
shortage. We will encourage activities by committees, andstimulate the evolution of the QEO management system.
These measures will help reinforce business infrastructure
in order to promote and accelerate the Virtuous Cycle
Model. P.19
We recognize that, for the AICA Group, which isdeveloping, producing, and selling its products all over theworld, it is essential to fulfill the CSR in order for us tosurvive as a company, and is also a mission to fulfill for thesociety. We shall strive for a business entity that develops
in a sustainable way, which is trusted and needed bystakeholders through steady profit growth—a financial
goal, and initiatives for ESG— a non-financial goal.
We thank you for your understanding and encouragement
for the management and business activities in AICA
Group.

Representative Director & President

AICA's Virtuous Cycle Model

Recognizing
and findingsocial issues

Identifying social
issues through abroad network

Communication
with allstakeholders

Solvingsocialissues bymaking useof ourstrengths

Pursuing
financial goals
and non-financial
goals

Sustainable development

Business infrastructure

Social contribution
through businessactivities

Improvebusiness
performance

Solving a broad
range of social
issues using ourtechnologicalstrength andproduct appeal in awide range of fields

A companythat is wellregarded
within society

10

AICA Group CSR Report 2018

AICA Group: Two enterprises that support AICA

Chemical products business
Since the development of the first urea formaldehyde resin adhesives in Japan, AICA‘schemical product enterprise has been leading with its polymer chemical technology.
We are playing an active role in a wide variety of fields from woodwork/furniture,buildings to automobiles, electronic materials, and cosmetics. We will continue toventure into new fields through proactive development of chemical technologies.
Sales composition and target
Fiscal year ending in March 2018 (actual)

Fiscal year ending in March 2019 (plan)
Adhesives

Other

11.6%

Specialty &Performance
Materials

65.1%

11.8%

9.7%

20.0%

82.91
11.5% billion yen

101billion yen
47.2%

9.6%

Construction
resin

48.9%

60.7%

Share of AICA Asia
Pacific Holding Group

Business Fields
1936

2017
JOLYPATE
Polyurethane JOLYACE AICA PUR Heat-resistant PUR

Epoxy resins
Polyurethane resins
Solvent-based CR
Polyvinyl acetate
PhenolMelamine
Formaldehyde Formaldehyde
resinsresinsUrea urethane resin

Dynamic resin

Epoxy JOLYSEAL

M&A Dainippon
Shikizai Kogyo
Co., Ltd

Hot-melt
Acrylic resins

Phenol
M&A
M&A
AICA SDK
AAPH Group *PhenolCo., Ltd.
Hot-melt

PolyesterHigh
Pressure decorative
Laminate plywood

CERARL

Lamination technology, design
technology, coating technology

Construction
resinsIndustrial adhesives
Construction adhesives
Industrial resins
Compositeboard resins

Silicone

Polymer beads

Lumiart

M&A Gants
ChemicalCo., Ltd.

Expandedbusiness toelectronicmaterials industry

CELSUS

Fireproof
technology

Adhesives

Hot-melt
adhesives

Silicone
Acrylic resins
UV curable resins

Floor coating
materials
Repair,reinforcement
and corrosion
protection
materials

Silicone

Urea
Formaldehyde
resinsWall coating
materials

Acrylic emulsion
Water-based compound
Polymer beads
UV curable resins

Specialty &Performance
Materials

Construction
materials business* AAPH Group: AICA Asia Pacific Holding Group

MarketWoodworking,furniture

11

Construction

Infrastructure

Automobiles

Electronicmaterials

Daily
necessities

AICA GroupA base to support AICA

Major Products

Adhesives●Industrial adhesives●Construction adhesives●Industrial resins●Composite board resins

Industrial adhesives are used in
production lines of manufacturers
for plywood, laminated wood,
furniture, construction materials,
automobiles, electronic products,
etc.

Construction adhesives arefor distributor markets, andmainly include products used
at construction sites.

Industrial resin is used asa raw material for industrial
products such as abrasives,
casting dies, and adhesives.

Resin for fiberboards is used
for joining wood particles orfibrous wood in order tomold them into MDF andparticleboards.

Construction resin●Wall coating materials●Floor coating materials●Repair, reinforcement and corrosion
protection materials

JOLYPATE

Jolyace/Aica pur

DYNAMIC RESIN/Jolyseal

Image

Being applied manually by craftsmen,
Jolypate can be used to create a variety of
expressions as finishing materials. Since theirdebut in 1975, the color variation, design, andfunction have been improved continuously.
Yet, they are still being developed andimproved to meet the market needs.

These are used to protect concrete
floors. Other functions can be added asnecessary, including heat resistance,
chemical resistance, and anti-static
properties. They are used in a variety
of facilities such as factories, logistics
facilities, and kitchens.

These are made of resin and used for
repairing or reinforcing concrete buildings.
In recent years, repairing roads and bridges
has been regarded as one of the mostimportant issues. For such repairs, we offer
products and repair methods which aresuitable for each deterioration level.

Specialty & Performance Materials●Hotmelt adhesives●UV curable resin, silicone●Polymer beads●Acrylic emulsion, waterbased compound

AICA MELTAICAAITRON, Lumiart

GANZPEARL

Ultrasol, CROSSLEN

ImageAICA Melt is one types of hot melt
adhesives which are solvent-freeglue liquefying when heated andsolidifying when cooled. They haveexcellent waterproof properties but
not all hot-melt adhesive. This typeof adhesives is used for automobile
headlights and solar panels.

We have a wide range of product lines
including high-function films for displays, UV
curable coatings for optical films, and pressuresensitive adhesives. These products are widelyused in a variety of industries, from electronic
devices to industrial products. Silicons canbe used for a wide range of products such as
electronic and construction materials.

Organic particles are used ina variety of products, such as
cosmetic ingredients and light
diffusion agents. In the cosmetic
market, GANZPEARL has adistinguished reputation for making
skin look clear, and boasts a large
market share.

They are synthetic resin mainlycomposed of acrylic resin and othercomponents. They are used for
painting, fiber, paper, daily necessities,building materials, and automobiles.
Making use of our resin synthesis
technology, we can add functions tomeet the customer's needs.

12AICA Group CSR Report 2018

AICA Group: Two enterprises that support AICAAKASAKA INTERCITY AIR
Design/operation by NIHONSEKKEI, INC
Construction by Obayashi
Corporation

Construction materials businessHigh pressure laminate (HPL) released in 1960 made use of resin synthesis
technologies which had been developed in the chemical products business. We
aimed to stand out in terms in functionality and design, and a result, have the top
share in Japan. We developed a line up of HPL and peripheral products, whichgave color to a variety of spaces including residential facilities and non-residential
facilities.
Sales composition and target
Fiscal year ending in March 2018 (actual)

Fiscal year ending in March 2019 (plan)
Fittings, Interior
Housing Materials

7.1%
19.3%

11.4%

6.9%

Countertops/
Postforming Materials

20.6%

19.3%

80.81
billion yen 17.8%
Noncombustible
decorative panels(Except “CERARL”)

23.7%

High Pressure
Laminate(HPL)

11.9%

21.1%

84.0
billion yen 17.5%
23.3%

Decorative boards,
Architectual Films, etc.
CERARL

Business Fields

Noncombustible decorative
panels (Except “CERARL")

Exterior

CERARL[Calcium silicate
boards/Extruded
cement panels][Architectual Films]

Interior

Decorative boards,
Architectual Films, etc.

Wall

CerarlCountertops/
Postforming Materials

High Pressure
Laminate(HPL)[Decorative boards]

Furniture/
Fixture[Countertops]

High Pressure
Laminate(HPL)

Fittings,Interior
Housing Materials[Toilet booths]

Fittings
Partitions[Interior doors/
Storages]

Market

CUCINA Nagoya
Mohly Shop Co., Ltd.

13

Residentialbuildings

Commercial
facilities

Offices

Medical care andwelfare facilities

Educational
facilities

Factories

Transportation
facilities

AICA GroupA base to support AICA

Major ProductsHigh Pressure Laminate(HPL)

CERARL

CELSUS/FLARETECT●Noncombustible
decorative panels
CERARLHPL are a durable material usedas surface materials for tables andfurniture. We have a wide variety ofcolors and patterns to choose from,our products are used in offices,
commercial facilities, hospitals, andhotels.

CERARL is a certified non-combustible wall material. In 1996, it wasa big hit and used as kitchen
panels for residential buildings. The
product is now used for hospitals,
schools, and transportation facilities
as well.

●High Pressure Laminate(HPL)

Noncombustible construction materials

Decorative boards, Architectual Films, etc.
●Architectual Films●Decorative boards

AltynoAICA Poly/AICA Marless Boards

Altyno is a decorative film with pressuresensitive adhesive mainly used for wall
surfaces, doors. These films are used
for new constructions and renovations
for non-residential facilities, since they
are easy to apply on various parts likewood based materials, metal surfaces,
and curved surfaces directly on site.

They are plywood materials laminated with polyester resin or
reinforcement sheets, and used infurniture, wainscot, and doors.

Countertops/Postforming Materials●Noncombustible
decorative panels●Extruded cement panels●Multi-functional
construction materials

ARDICA

MACE

Moiss

Post-form counter

ARDICA is a wall material made ofa calcium silicate board laminatedwith resin or reinforcement sheets,
etc. We have a wide range of
product lineups from generalpurpose items to items withexceptional design, and have avariety of patterns available.

MACE is a earthquake-resistant,weathers-resistant, and fireresistant external wall material. Itfeatures beautiful base surface anddiverse designs.

Moiss is a multi-functional calcium
silicate board. It features an
excellent odor elimination andhumidity adjustment function.

Post-form counter is a countertop
material that uses HPL. Melamine
decorative panels are perfect for
countertop boards thanks to its
excellent durability.. We have awide variety of colors, patterns, andsizes to choose from.

●HPLcountertops

Countertops/Postform countertops

Fittings, Interior Housing Materials●Artificial marbles●Engineered stones●Interior door

●Toilet booths

CORIAN®

Fiore Stone

Melafusion Plain

Pure Core BoothThis material can be used as an originalplate, and processed products such ascountertops and wash-basins. There
are a wide range of products tailoredfor different uses, including products forsmall children and for elderly people,
and products developed for kitchens andbathrooms with a focus on female users.

Fiore Stone is a luxury artificial
stone made of natural crystal. It is adurable product which successfully
overcame the faults of natural
materials while keeping the textureof natural stones. This producthas the largest share in the quartz
stone market in Japan.

Melafusion Plain is used for interior
doors, storage, and sliding doors
in welfare facilities. It is madeof melamine decorative panelsand decorative boards. We havefunctional products which also
feature excellent design.

Our toilet booths made a great use of original
materials of AICA. We have an extensive
range of goods that have various target
uses, including products with elaborate
designs, products for children, productsthat help prevent secret photography, andproducts for women in mind which havebeen developed for convenient use.

14

AICA Group CSR Report 2018

AICA Group: Three driving forces for growth

growth of domestic core businesses
1 Sustaining
through the expansion of AS products
We provide products which assist to solve not only environmental issues but also
a variety of social issues as AS (Aica Solution) products. We aim to achieve asustainable society and company by making use of the power of “chemistry anddesign” and expanding sales of high value-added products within growing fields.
Chemical products business

Construction materials business●Expansion of construction resin
products centered on repair andreinforcement●Development and promotion ofenvironmentally-friendly products,
highly durable products and laborsaving products●Strengthening and developing
noncombustible goods business(expansion of applications, improvelevel of design)●Expansion of easy-construction andfunctional products (deodorization,
antifouling, high durability)

AS products which lead to social contribution
Strengths of AICA
Resin synthesis technology

High technical skills which have been cultivatedfor many years in the chemicals business

Design abilities

Propose colored patterns and development of
shapes which improve usability and safety

Distribution system

Networks for shops and construction companies
which expand all over Japan

Value provided by AICA
Create a comfortableenvironment
Easy-construction products

We provide products which can be constructedeasily in order to compensate for a shortfall ofcraftsmen caused by due to labor shortages dueto the falling birthrate and aging population.

Create safe town

We contribute to create a comfortableenvironment using products with deodorizationand humidity adjusting functions, products withhigh antibacterial functions, etc.

Maintenance of the naturalenvironment

We control the logging of forests and mining ofstone materials by making effective use of woodand stone, and suggest alternative materials.

We assist in creating safer towns. For example,
we use methods for preventing exterior tiles
from falling, enhancement of noncombustible
materials, etc.

Waste reduction

We provide methods and products to makeeffective use of existing bases, and reduce
waste of construction materials which are
dismantled and disposed of.

CO2 reduction ontransportation
We reduce greenhouse gas emissions by
developing and expanding sales of light-weight,
load-efficient products.

Extend service life ofbuildings
We provide products for repairing deteriorating
infrastructures and products for reforms.

Universal design
We promote the development of products
which can be used by a diverse range of
people from the young to the old.

15

Response to SDG's(Sustainable Development Goals)

P.19

AICA GroupA base to support AICA

Main AS products
Extended
Creation of a
Safe town
service life
comfortablecreationof buildings
environment

Repair, reinforcement and corrosion protection
materials
Dynamic Resin/Jolyseal⃝

Adhesives for interior and exterior tiles

Jolypate Fresh

Maintenanceof the naturalenvironment●

CO2
EasyWaste
construction reduction on
reduction
products transportation●●

AICA ECO-ECO BOND SE-35H

Wall coating materials

Universal
design●●Floor coating materials●

AICA Pure

Architectural Films●

AltynoNoncombustible decorative panels●

Ardica, etc.

Laminated sheets for renovation
Bath Fit Panel, MELATACK●

Toilet booths●●

Multi-functional●●

CERARL deodorization type, Mois, etc.

Artifical marbles

Kid’s washstand units, washstand counters that respond to wheelchairs, etc.

Engineered Stones
Fiore Stone

●

●

●

●

●

●

●

●

●

●

●

Toilet booths with finger pinching prevention functionality, etc.

●

●

●
●

●

●

Noncombustible laminated sheets are light-weight,
easy to construct, and have a high level of design

A method to prevent concrete fragments frompeeling off

ARDICA

Dynamic Resin Clear Tough Resin
Method etc.

Increasing logistics costs and a chronic shortage of craftsmen
have been becoming serious social problems in the constructionindustry. There were various drawbacks, as construction usingstones and tiles required professional craftsmen, and thetransportation loads were burdensome due to the weight.
Ardica uses the technologies of products for high resolution
displays which can express the real texture of materials such asstone materials and tiles. It is light, the transportation load is low,
and the construction does not require professional craftsmen.
It is the best noncombustible decorative panel in AICA. It
is featured by bold and vivid designs and real textures thatwere reproduced by making use of advanced resin synthesis
technology of the chemicals business and production technology
of noncombustible panels of AICA-TECH KENZAI Co., Ltd.

Accidents where concrete fragments peeled off inside viaducts
and tunnels have occurred and the deterioration of infrastructures
has become a social problem.
We focus on infrastructure repair and reinforcement related
products by positioning them as “AS products.” We also released
the “Dynamic Resin Clear Tough Resin Method,” “Dynamic Resin
Strong Guard TNK Method” and “Jolyseal JB-318.”
The Clear Tough Resin method has achieved “clear type”: A firstin Japan for infrastructure repair and reinforcement materials using
urea formaldehyde resin. Generally, colored materials are painted
for repair and reinforcement of concrete. However, it became
an issue as it was difficult to check the deterioration condition of
concrete. This method has been developed through our uniqueresin design technologies. It made observing degradation of
surfaces possible.

16AICA Group CSR Report 2018

AICA Group: Three driving forces for growthand investing in focus-on fields that will
2 Developing
carry the next generation on their shoulders
We strengthen non-construction fields and build robust systems. In addition, we focus on
the domestic construction market where construction materials have not developed.
Chemical products business
The Speciality & performancematerials business focuses
on fields for non-construction
such as automobiles, electronicmaterials and daily necessities.
Because of decelerationin growth in the domestic
automobile and solar panel
markets, we have taken on
challenges toward new markets
in recent years. We expect
further growth in the future.

Promotion of overseas production and sales
We have strengthened overseas deployment of functional materials business,owing to the increase of overseas production rates for automobiles andelectronic materials in Japanese companies, as well as an increase of thenumber of electronic material manufacturers in Asia
In addition to existing bases in China, we make use of the bases of Aica
Asia Pacific Holding Group which joined the AICA Group in December 2012
to produce more items in overseas bases and expand our business into new
countries and regions.

Challenges to cosmetics and sanitary materials
Cosmetics and sanitary materials (diapers and sanitary goods) made in Japan
have attracted great support from people in Asia in recent years and production
has been expandeding.
Our Polymer beads gained high evaluations, as cosmetic materials made inJapan are adopted by both overseas products as well as Japanese products,
and we expect continued growth in the future.
With regard to Hot-melts for sanitary materials, the high adhesive strength ishighly valued, and sales are increasing because use of the product increased
among Japanese manufacturers.
We will further expand our products and acquire new customers in the future.

Strengthening of polyurethane resin and UV curable resins
Evermore Chemical Industry Group (EMC Group) joined AICA Group in
January 2018. EMC Group has high urethane synthesis technology andUV curable resins design technology, and has sales channels for electronicmaterials, textiles and shoes markets in Taiwan and China. It also carries out
integrated production from upstream materials to resin products. We expect tofuse together the technology, products, and sales channels of each AICA Group
company will demonstrate synergistic effects.

Construction materials businessWe aim to expand business
into fields where construction
materials have not developedin order to achieve sustainable
development in domestic
construction markets where
reductions are expected in the
future. We aim for growth in theconstruction materials businessas a whole due to the synergy
effects with existing productsthat have a large market share.

17

Advances into the exterior wall field “Mace”
In October 2015, AICA-Tech Kenzai Co., Ltd. (ATK), which Mitsubishi Materials
Kenzai Corp.‘s construction materials business was transferred to, joined the
AICA Group. ATK deals with“Mace”, an extruded cement panel for exterior
walls. As a result, we made a full-scale entry into the exterior wall market.
We will further strengthen cooperation, and promote product development bymaking use of our design properties, etc. in the future. We aim to expand sales
by making use of synergistic effects.

AICA GroupA base to support AICA

3 Overseas deployment of Japanese technologies
We will build a sales network mainly in Asia, reinforce brand strength,
and promote overseas deployment of high value-added products.
Chemical products business
The demand for high quality
products is increasing due
to heightening interests insocial issues surrounding theenvironment and improvementof safety in Asia. We havedeveloped products that areconsiderate to people’s healthand the environment which
are represented as“ECO-ECO
BOND.”
We strengthen product power inforeign countries by deploying
high value-added products
and technologies, and aim forfurther growth.

Deployment of environmentally friendly products
We have carried out research and development for phenol formaldehyde
resin as an adhesive application and High Pressure Laminate for many years.
We obtained the novolac phenolic formaldehyde resin which has excellent
performance for environmental aspects by inheriting the phenolic formaldehyde
resin business department from Showa Denko K.K. in September 2015. We
could also expand on product groups for automobiles, iron and steel, paints,
electronic materials, etc. besides construction use.
The demand for novolac phenolic formaldehyde resin like this is has been increasing
in recent years mainly in Asia. Consequently, we promote the overseas
deployment of products which have been developed and sold in Japan.

Accelerating deployment by means of M&A
We actively make use of M&A for the purpose of carrying out swift overseas
deployment. Aica Asia Pacific Holding Group (AAPH Group), which joined the
AICA Group in December 2012, has a strong sales channel in the Asia-Pacificregion, optimal production bases, excellent technical skills and wonderfulhuman resources. AAPH Group and AICA Kogyo both have strengths in theadhesive technology fields. Taking all of the group's market strengths andcustomers into consideration, we develop synergies by making use of the
products, technologies and bases of each group.

Overseas deployment of “Jolypate”
Jolypate, which has a history of more than 40 years in Japan, has added color
to building walls in Japan for many years using high design. Local production
and sales in China have started over 10 years ago, and awareness has
gradually increased. We will actively advance into regions where the products
have not been adopted yet.

Construction materials businessWe succeeded in establishing a
steady brand as a manufacturer
which colors interiors. We
achieved this through productdeployment, focusing on “HighPressure Laminate” having
the top market share in Japan.
We will promote responding tolocal needs and strengthening
systems in order to deploy thisproduct overseas in the future.

Diversification of demands
The demand for High Pressure Laminate(HPL) is diversifying in Asia inrecent years, and in turn, quality of Japanese products have been gathering
attention as they stand out. For example, we will promote the overseas
deployment of high value-added product groups (which were well regarded
even in Japan) such as “CELSUS”, a HPL where fingerprints are unnoticeable,“Cerarl”, a noncombustible decorative panel, and “Pure Core”, a HPL whichaccommodates beautiful cross-section cutting.

Strengthening of sales and production systems
In January 2018, we established Aica Asia Laminates Holding (AALH) in
Thailand (which is the biggest HPL consumption area in Asean) as a presiding
company for overseas business centered in Asia related to the construction
materials business. We will promote the localization of business (expansionof local employees, strengthening of local collaboration, orientation towards
local matters) mainly in this presiding company, and aim for rapid growth of theconstruction materials business in the Asia region.
We also established Aica Laminates Vietnam (ALV) as the manufacturing baseas the 4th country followed by Japan, Indonesia and India in December 2017.
We are building a new plant now and will commence production in April 2019.
18

AICA Group CSR Report 2018

A base to support AICA

We believe that fulfilling CSR (corporate social responsibility) is indispensable for a company to survive, and is a missionthat a company should fulfill for the benefit of society at large.
It is essential to reinforce the infrastructure that supports our CSR activities. We will establish a structure for its promotion
and continuously strive to improve it.

Promotion system

Risk
management

Promotion organization

Details

Corporate Ethics Committee

P25

Promotion of compliance observance, investigation of unappropriatedactions/ corrective actions

Internal Control Committee

P23

Maintenance of internal control, preservation/improvement of effectivenessPresident

BCP (Business ContinuityPlan) Committee

P26

Formulation of BCP/implementation of improvement instructions and training

Management Planning Department

Security Trade
Control Committee—

Maintenance of export management systems/audits/education

Information Management
Committee

P27

Management/maintenance of confidential information in the company

Management Planning Department—

Management of appropriate and fair disclosure at appropriate times for company
information

Management Planning Department

CSR Promotion Committee

1

Promotion/internal dissemination of CSR activities,
strengthening of ESG responses

Safety Environment Department/
Management Planning Department

C&C Promotion Committee

2Consideration/implementation of plans toward improvement activities anddepartment target achievements by a small group

QEO Committee

3

Promotion of quality (Q), environment (E) and occupational safety and health (O)Diversity promotion project

P29

Formation of a base where a variety of human resources can play an active role

Personnel Department

Work style reforms
promotion project

P30

Reduction of long working hours and climate reform

Personnel Department

Equipment automation
project—

Promotion of equipment automation, productivity improvement

Information Disclosure
Committee

Improvement
and reformpromotion

Purpose1 CSR Promotion Committee
Each department takes charge of an item based on the
CSR guidance, and does activities to achieve KPI targets
which are set to 'materiality’ (please refer to the right).
Constructing department

Department in charge

Main item in charge

Purchasing Department

Value chain

Human Resources Department

Sociality

General Affairs Department

GovernanceR&D Center

AS products (products forsolving social issues)

Sales and Marketing Division

Overseas group companies

Overseas Business Group
Corporate Planning Department
Safety & Environment Department●●

Business strategy, public relations, IR
Environment/occupational safety and health

2 C&C activities
We are putting our heads together using a scientificapproach such as the QC method by a small group,
considering achievement plans for improvement activities
and department policies, and are discussing specific actionplans.
We are holding a C&C convention where we award anhonor to excellent circles, make example presentations,and aim to share effective procedures for small group
activities and improvement know-how every year. The sales
department and indirect department, which had not been
notably active previously, have started to participate in the
C&C convention since FY 2017. As a result, it became an
extremely meaningful convention.

3 QEO management system
It is a management system which operates based on atrinity of Quality (Q: ISO9001), Environment (E: ISO14001)
and Occupation health and safety (O: OHSAS18001).
We conduct compliance, risk hedge and improvement
activities for both aspects of “risk and opportunity.” We

19

Department in charge
President

General Affairs Department/
Legal Department

Quality Assurance Department
Safety & Environment Department

Production Innovation Groupalso promote quality improvements, improvement ofenvironmental indicators (reduction of greenhouse gases
and industrial waste, strengthening of water management,etc.) and the creation of a safe and comfortable workplaceenvironment, and aim to contribute to management.
For each certification acquisition situation, please visit the website link below.
http://www.aica.co.jp/environ/

Response to SDGs (Sustainable Development Goals)“SDGs”, which is an international goal to achieve asustainable world by 2030 in the “United Nations Sustainable
Development Summit” (held in the United Nations
headquarters in New York) was adopted in September
2015.
It consists of 17 goals and 169 targets covering social
problems in areas including poverty, hunger, energy, climatechange, and peace in society. AICA Group have advocatedthese goals and started initiatives toward their solution.

Sign the UN Global Compact
AICA Group signed for the “UN Global Compact” in
September 2018, which holds action principles with regard
to human rights, labor, environment, and anti-corruption inorder to promote/achieve high-quality CSR activities.

AICA GroupA base to support AICA

AICA Group's materiality and KPI
Since FY 2016, the AICA Group has started to select materiality (important issues). In May 2018, materiality was reviewed
with reference to various guidelines. The progress is monitored by the CSR Committee and QEO Committee, for the
purpose of pursing performance results for AICA Group as a whole.
FY 2017

ESG Important issues in our company

TargetSales: 163.7 billion yen
Ordinary profit: 19.6 billion yen○

Sales: 185.0 billion yen
Ordinary profit: 21 billion yen

From
P7

Improvement of internal control correction0
items that have not been completed: 0

○

0

From
P23

Clearly specify the QEO Management in
the middle-term business plan

Stated○Clearly specify the ESG promotionin the company’s annual policy

All bases in Japan:
once a year

Implemented

○

Once

All overseas bases:
once a year

Partially
implemented

△

Once

Development○

Disclosure of code of conductand multilingualization

Hold compliance workshops
Implemented
All production bases in Japan (13 places): once a year○

Assembling everyone, and reading theaction guidelines aloud together○

Corporate performance Sales: 156.0 billion yen(Economic performance) Ordinary profit: 18.8 billion yen

G

Corporate governance

ESG

Integration ofmanagement and
CSR

Hold CSR
study
meetings

ESG

Strategic deployment of
CSR at overseas bases

SG

Code of conduct for human rights Development of code of conduct where
and human rights education
respect for human rights is clearly stated

ESG
Thorough compliance
ESG

S

S

S

Implemented

Improvement ofLess than 10% of an employee turnover rate
3.8% *4
employee satisfaction who joined the company within 3 years*2, *3

S

Pages Items corresponding to the SDGs

Evaluation

G

Business
infrastructure

FY 2018
TargetResultEnhancement in human resources Implementation of training for second-year, third-year,
development / education and
Implemented
middle-ranking staff and new managers *2
training systems
Increase in therate of using 52.5% or more
56%
paid leave*2, *5
Promotion of
Human
ThoroughimplementationofadvanceYear-on-year
resources a work-life balance
Reduction of
application for permission to work overtime
comparison of overtime
overtime work*1 Continuation and thorough implementation
hours: 100.2%
of No Overtime DaysMore than 30% in general
Proportion ofcareer-track positions for new 26%
Diversity in human
female recruits*2 recruits who have just finisheduniversity by FY2018
resources and equal
opportunities
Employment of Proportion of persons withpersons with
2.2%
disabilities: 2.2% or moredisabilities*2

Once a year in 15 bases or more
(Target: Production / sales basesin Japan and overseas)
Assembling everyone, and reading
the code of conduct and action
guidelines aloud together
All bases: once a year

From
P19

P25

○

10% or less○

Development of a new
education system○

60% or more

×20% reduction comparedto the previous year―

30% or more○

2.2% or more

×

Less than half of thenational average

From
P31

14.0 billion yen

From
P15

From
P28

S

Improvement ofindustrial safety
and health

Reduction inLess than half of the nationalfrequency rate ofaverage (National average in 1.73
industrial accidents*2 FY 2017: 1.66)

ES

Development andexpansion of AS
products

Sale proceeds of AS products*2
11.23 billion yen

9.79 billion yen(An increase of 22%
compared to theprevious year)

×Greenhouse gas emissions*6, *7 34.6 t CO2 / 100 million yen or less in sales

33.8 t - CO2 / 100
million yen in sales○

Amount of industrial waste generated*6, *7
25.8 t / 100 million yen or less in sales

25.8 t / 100 million
yen in sales○

Recycling in twobases in Japan―

Develop a middle-term
reduction plan

P37

1 (Tamba Plant)

×

0

P38

○

An increase of 2% compared to theprevious year (4.25 points or more)

P42

E

Environment Global warming
prevention

E

Industrial waste
reduction

E

Reduction of water use ―E

Promotion of
responsible care

Lawsuits regarding the environment, andguidance from administration: 0

Improvement of customer Customer satisfaction level*
An increase of 2.3%
An increase of 2% compared to the previous
satisfaction levels(4.17 points)
year (4.16 points or more out of 5)
Enhancement of value Developing the AICA Group CSR
through value chain
Development
Procurement Guideline
cooperation
2

S
ES

SG

Stakeholders

Product responsibility○

Develop a middle-term reduction plan
32.8 t - CO2 / 100 million yen in sales
Develop a middle-term reduction plan
25.3 t / 100 million yen in sales

Conducting a CSR questionnaire
survey and on-site review on the
suppliers
Develop BCP for all basesin Japan and two bases
overseas.
Hold training at all bases where
BCP has been created (All basesin Japan and two bases overseas)

P34
P36

P41

Additional creation of a BCP (business continuity
Creation in progressplan) in six bases in Japan and two bases overseas△

Hold BCP training at all bases where BCP
Implemented
has been created: once a year○

Lawsuits regarding quality, and guidancefrom administration: 0

0

○

0

―

13

P45

S

Communication withlocal communities

Cooperation with local activity
organizations

11

―

S

Communication withshareholders andinvestors

Hold briefing meetings for institutional
investors twice a year

Twice a year○

Renewal of the IR
websiteHold a ESG small meeting
once or more

P26

P44

*1: Excluding the newly consolidated portion in FY 2018 *2: AICA Kogyo non-consolidated *3: Calculated on the basis of college graduate and graduate-school graduate employed people*4: Turnover rate of employees who entered the company on April 01, 2014 as of April 1, 2017
*5: Calculated from September 16, 2016 to September 15, 2017 with regard to paid leave given in September 16 *6: Per unit of sales. *7: For production bases in Japan.

20

AICA Group CSR Report 2018

A base to support AICA

CSR activities at bases overseas
This year, we will focus on human resources and the environment.
Overseas production sites
Company nameLocation

Chemical products
business

Kunshan AICA Kogyo Co., Ltd.

China

Major production items
Wall coating materials (Jolysand), water-based compound,Hot-melts

Construction
materials business

Shenyang AICA-HOPE Kogyo Co., Ltd.

China

Industrial adhesives

AICA Vietnam Co., Ltd.

VietnamFloor coating materials (Jolyace)

AICA ASIA PACIFIC HOLDINGGroup

China, Indonesia, Thailand, Vietnam,
Malaysia, Singapore, New ZealandIndustrial adhesives, Construction adhesives,
Industrial resins, Composite board resins

EVERMORE CHEMICALINDUSTRY Group.

Taiwan, China

Polyurethane products, crosslinking agent,UV-curable resins, polyol, UV monomer/oligomer

AICA Laminates India Pvt. Ltd.

India

High pressure laminate(HPL)

P.T. AICA Indonesia

Indonesia

High pressure laminate(HPL)
noncombustible decorative panels (CERARL),
Industrial adhesives

P.T. Techno Wood Indonesia

Indonesia

Polyester decorative plywood

Aica Laminates Vietnam (operation
scheduled for April 2019)

VietnamHigh pressure laminate(HPL)
Noncombustible decorative panels (CERARL)= Environment= Human resources

Kunshan AICA Kogyo Co., Ltd. (China)●Response to stricter environmental regulations

The Chinese government has tightened its regulations especially on
pollutant emissions, hazardous processes, energy use and others,
focusing on plants which handle chemical goods. Companies which
do not meet the said environmental standards are forced to shut down
operations and a response is required.
In order to stably operate the plants under such circumstances, weare pursuing environmental responsiveness and legal compliance byutilizing the QEO management system.

Kunshan AICA Kogyo Co., Ltd.

P.T. AICA Indonesia (Indonesia)●Sharing disposal methods and equipment management●Employee education

The equipment management manual has been deployed to overseas
bases for sharing the manual. The improvement of steam drain leakage
was also conducted after an investigation. In addition, we are trying to
reduce the amount of waste by solidifying waste resin.
Training mainly regarding ISO was held for the purpose of employee
education. It attracted favorable comments from employees, such as “Igained new knowledge.”

P.T. AICA Indonesia

EVERMORE CHEMICAL INDUSTRY Group (Taiwan / China)●Reduction of amount of waste liquid discharge●Active support of employees for their qualification acquisitions and self-improvement

By separating waste liquid at two bases with extra work, we havedrastically reduced the disposal amount processed through outsourcing.
In addition, the persons in charge of production have acquired therequired qualification, and strictly manage the situation of qualificationacquisition in accordance with the laws and regulations. The persons
in charge of development actively attend external training sessions for
self-improvement.
21

EVERMORE CHEMICAL INDUSTRY Group.

AICA GroupA base to support AICA

AICA Asia Pacific Holding Group(China, Indonesia, Thailand, Vietnam, Malaysia, Singapore, New Zealand)●A survey on employee satisfaction was conducted for active communication

The survey on employee satisfaction has been conducted annually since December 2016. By creating an open
communicative environment, we share knowledge, and foster employee growth and improvement / reform activities.
Evaluation items are as follows.

PeopleWork

Opportunities•Relationship with immediate
Supervisor / colleagues•Corporate Leadership•Employee Engagement•Communication•Work Processes•Clarity of Roles & Responsibilities•Employee Empowerment•Goals & Targets•Sense of Accomplishment•Career Progression•Learning & Development•Interesting & Challenging Work
•Performance Feedback

Quality of Life

Company Practices

Total Rewards•Physical Work Environment•Integrated Work-Life Balance•Organisational Changes•Corporate Social Responsibility•Embracing Diversity•Effective Performance
Management System•Remuneration & Benefits•Recognition

Change Management /Culture•One AICA Family•Alignment with Vision & Values•Corporate Communication

AICA Laminates India Pvt. Ltd. (India)●The promotion of proliferating safety activities

We recognize raising safety awareness is an important issue, andorganize weekly safety / 5S patrols conducted by the persons in chargeof the entire process. This is in order to improve safety activities andimprove the work environment inside the plant.
We hold a safety committee meeting every quarter (in April, July,
October, and January), and promote improvements after discussing
current problems. In addition, fire drills are conducted regularly in orderto minimize the damage at times of crisis.

AICA Laminates India Pvt. Ltd.

Overseas network (As of end of June, 2018)
Japan
China
TaiwanIndia
Thailand●Production bases forchemical products
business●Production bases forconstruction materials
business

Vietnam

Malaysia
Singapore
Indonesia

New Zealand

22

AICA Group CSR Report 2018

A base to support AICA: Business infrastructure

Corporate governance
AICA Group consists of 45 companies including both
domestic and overseas subsidiaries (as of July 2018).
Through the enhancement of corporate governance, we
aim to secure and improve the value of the company andthe common interests of shareholders.
We are a company with a Board of Auditors. The Boardof Directors decides on management policies, items
set by laws and regulations and other important issues
regarding management, and supervises the executive
situation of business for the enhancement of corporate
governance. In order to stimulate deliberations andensure the clarity and objectivity of management, theBoard of Directors consists of 5 internal directors, whohave thorough knowledge of company business, and 2
external directors, who have originality, objectivity andexpertise.
Our company had adopted the executive officer
system in order to separate the supervisory functionand execution function of directors. However, internal
directors had key business related execution functions.
Therefore, from June 2018, we decided to have theinternal directors serve as executives as well, and madethe segregation of duties in executive functions among
the executives clearer so that business executions could
be further accelerated.
The Board of Auditors consist of 4 members including
two external auditors, and audits the execution of
director’s duties, operations and financial conditions of
the entire group.
In addition, the Governance Committee was established
as a voluntary advisory committee in April, 2016. It mainly
consists of external board members and aims at thesustained development of the company and the further
improvement of governance.
Corporate Institutions of our Company (As of April 1st, 2018)
Shareholders Meeting
Appointment/dismissal

Appointment/dismissal

ReportAudit

Financial audit

Board ofDirectors

Board of Auditors

Internal Audit Unit

23

ReportAdviceExternal lawyers

ReportCorporate Ethics
Committee

ReportReportInternal Control
Committee

Appointment/dismissal

Representative
director
Management
Meeting
Management
Promotion
Meeting

Financial Auditors

Internal
control audits
GovernanceCommittee

Cooperation(Internal audits, includinginternal control)

Appointment/dismissal

Effectiveness of the Board of Directors
In order to verify the effectiveness of the Board of
Directors, we have conducted an annual survey on all of
the directors and auditors since January 2017, regarding
the structure and operation of the Board of Directors andthe system which supports them. The effectiveness of
the Board of Directors is evaluated based on the resultsof the survey. In the survey conducted on January 2018,
we have received answers of “appropriate or reasonably
appropriate” in all items. In addition, deliberations at theBoard of Directors had been actively conducted and it
received a high evaluation. Therefore, it was confirmedthat the Board of Directors in our company was properly
functioning in most cases and their effectiveness was
guaranteed.
On the other hand, there were also improvements
surrounding the Board of Directors, including the diversityof the members and deliberations on appointments anddismissals of management executives. We will conduct
further improvements for their effectiveness.

Internal control activities
In compliance with the Companies Act, AICA Group has
adopted the Basic Policy for Establishment of Internal
Control Systems at a meeting for its Board of Directors.
It is reinforcing supervisory functions of the Board of
Directors, risk management systems, and creating
structures for improving the effectiveness of compliance.
An internal audit unit assesses the development andoperational circumstances of audit activities and related
departments through a hearing, and confirms theeffectiveness of our internal control system. An internal
control committee was adopted in order to respond to theinternal control evaluation reporting system for financial
reporting of the Financial Instruments and Exchange
Law. Maintenance, management and self-inspection are
conducted by the control committee that is in chargeof four main control processes. In addition, an internal
audit evaluation is conducted by the internal audit unit tomaintain and improve the reliability of financial reporting.
Every year, the conditions of internal control is reported
at the internal control committee based on the financial
report of Financial Instruments and Exchange Law, andthe activity plan for this fiscal year is approved.

Directors’ remuneration
The directors’ remuneration received from our company
consists of a basic remuneration and a performance
remuneration. The former considers work responsibility,
job position, and job tenure. The latter is decided
according to the accomplishment status of business plansfrom each director, based on the corporate businessperformance. The amount of remuneration is decided by
the representative director based on the standards andother factors set by the company within the scope of limit
which is resolved in the shareholders meeting.

AICA GroupA base to support AICA

Major Meetings● Management Meeting● Management Promotion Meeting

Our company holds management meetings which consistof directors, executive officers and persons in charge forthe execution of business. The management meetings
are held once a month as a general rule. The meeting has
the function of conducting preliminary reviews of agendas
that will be discussed at the Board of Directors, and to
make final decisions based on the company’s rules. The
meeting conducts rapid deployment of decisions made at
the Board of Directors, and carries out deliberations andreporting regarding the execution of business.

The heads of the execution of business department
including directors, auditors, executive officers andpersons in charge for the execution of businessparticipate in a management promotion meeting. As ageneral rule, the meeting is held every half a year andreports regarding the execution of business, problem
solving and other matters are conducted in order tomonitor business content and execution situations.

List of Board Members (As of October, 2018)● Directors (male: 7, female: 0)
Representative Director and President

Yuji Ono
Director and Senior Managing Executive Officer

Director and Senior Managing Executive Officer

Satoshi Toudou

Yukihiro Iwase

Person in charge of accounting supervision, Director of the Management
Planning Department, Director of the Information Systems Department,
person in charge of the Logistics Department, and person in charge of theBusiness Management Department.

Head of the Construction Materials Company, Executive Manager of theSales Administration Division.

Director and Managing Executive Officer

Director and Managing Executive Officer

Nobuyuki Omura

Ryoji Mori

Head of the Chemical Products Company, Deputy General Manager of
the Sales Administration Division.

Person in charge of Production, Director of the Procurement Department

Director External

Director External

Kenji Ogura

Toshiiku Hanamura

Expected role
Mr. Kenji Ogura has been engaging in corporate management
for years, and has abundant experience and wide knowledge asa manager. He has no stake in our company, and we believe that
he would fulfill the duty of an external director with a position of
objectivity and independence.

Expected role
Mr. Toshiiku Hanamura has abundant experience and expert
knowledge as a lawyer. He has no stake in our company, and webelieve that he would fulfill the duty of an external director with aposition of objectivity and independence.

● Auditors (male: 4, female: 0)
Full-time auditor

Full-time auditor

Terutoku Iwata

Hisashi Kosemura

Auditor External

Auditor External

Masakazu Kato

Kiyoshi Katagiri

Expected role
Mr. Masakazu Kato gives advice and proposals from theindependent and expert views of finance and accounting as acertified accountant. He has no stake in our company, and webelieve that he would fulfill the duty as an external auditor with aposition of objectivity and independence.

Expected role
Mr. Kiyoshi Katagiri has abundant experience and expert
knowledge as a business entrepreneur. He has no stake in ourcompany. We believe that he would fulfill the duty as an external
auditor with a position of objectivity and independence.

24

AICA Group CSR Report 2018

A base to support AICA: Business infrastructure

Compliance
In order to act quickly to potential risks of moral violation
at the workplace, such as a violation of laws and company
rules, bribery and corruption, and harassment, AICA
Group has established the Window to Corporate Ethics
Committee, a place of contact for whistle-blowers, at thecompany offices and external attorney's offices. In- or
outside of Japan, AICA Group employees can report, andask for advice about problems and questions that they
may have about corporate ethics and compliance throughphone calls or e-mails at any time, without worrying about
suffering any disadvantages. This system also ensuressecrecy, and accepts reports from anonymous sources.

Conceptual diagram: Corporate Ethics Committee andinternal reporting system

Corporate Ethics Committee[1] Compliance[3] Harmony with society[4] Fair and just dealings[5] Customers' security and trust[6] Appropriate information disclosure

Attorney's office[2] Respect for human rights

Corporate Ethics Committee Window

AICA Group Code of Conduct Basic Principle

Whistle-blowing system

In-house Contact
Information

We are taking every step to conduct business activities
in compliance with laws in an ethical way. AICA Group‘s
Employee Code of Conduct, which was newly establishedlast year forms the basis of the compliance program of
AICA Group. The following contents have been stipulated
in the basic policies for the purpose of realizing thecompany’s management philosophy and business planin accordance with its company creed—“Challenge andCreation.”
We have also established specific action standards inthe “Action Guidelines” in adherence with the purposeof the “Code of Conduct.” To increase awareness ofcompliance among employees, our group conducts
reading the action guidelines in each workplace at basesin Japan and overseas every year. Reading the “Code of
Conduct” has been added since FY 2018. This training
provides thorough orientation in align with the Code of
Conduct and Action Guidelines, and raises awareness ofthe meaning and necessity of compliance.
In addition, the Legal Department visits sales offices,plants and subsidiaries to conduct compliance training
and instruct employees about the significance ofcompliance. Issues discovered during these visits aredeveloped into company-wide improvement activities.

President

Person in charge ofaccounting supervision

Director of the Internal
Audit Unit

Secretariat(personnel director)

Corporate lawyer (observer)[Roles](1) Plan, draft and promote measures necessary forcompliance (complying with laws and regulations) in
AICA Group(2) Investigate, check and correct problems which arereported internally to “The Corporate Ethics
Committee Window,” and problems that cannot be
solved by one group company alone.
(3) Examine and propose the application of disciplinary
action when problems related to compliance occur[7] Employment/labor affairs and labor-management relations[8] Protection of company information and property[9] Environment and safety

Response to antisocial forces
AICA Group clearly states in its Code of Conduct that it
refuses to have any relationship with antisocial forces.
In the event that antisocial forces contact us, we
respond firmly and decisively through the entire groupwhile cooperating with the police as necessary.

Employees■Number of inquiries to the Window to Corporate Ethics
Committee: 4 (FY2017)

Compliance Information

長 code of conduct,
財務統括部担当
The statement related 社
to theactionguidelines, bribery andanti-corruption
arepublishedon our
内部監査室長
事務局（人事部長）
website.

1

http://www.aica.co.jp/company/environ/compliance/

Corporate Ethics Committee
AICA Group has established the Corporate Ethics
Committee for the purpose of developing and promoting
necessary measures for compliance, and investigating,confirming, and taking corrective measures for casesthat are reported by whistle-blowers to the Window to
Corporate Ethics Committee.
The Corporate Ethics Committee will immediately
investigate and deal with any cases of whistle-blowing,
and take corrective measures as necessary. In addition,
their details are regularly reported to the auditors and top
management of the company.
25

概念図：企業倫理委員会および内部通報制度

AICA GroupA base to support AICA

Risk management
As a response to when AICA Group faces a managerial
risk, we have specified the Risk Management Rules,
which require employees to act in a calm and organizedmanner, on the basis of the following basic policies:① Secure the safety of employees and their family
members; ② Help reduce the impact on society and theeconomy; ③ Fulfill the obligations of providing products tocustomers; and ④ Support the community. Furthermore,
we regularly review the specific details that are defined asa “risk” and the rules that correspond to them.
Risk Management Rules
Rules

Details

Earthquake Disaster Prevention
Rules

Response in the event of anearthquake disasterWind and Flood Disaster
Prevention Rules

Response in the event of a windand flood disaster

Product Safety Management
Rules

Response to complaints
regarding products which are
involved with an accident

MS Emergency Response Rules

Response in the event of a plantfire or environmental problem

Information Management Rules

Response in the event of a leakof confidential information

Action Plan for New-strain
Influenza Countermeasures

Response in the event of an
outbreak of a new-strain of
influenza

Basic Policy on Corporate
Control, and Countermeasures
for Large-scale Purchases ofCompany Stock

Response in the event of a third
party buying up our stock

Countermeasures and safety confirmation in theevent of a large-scale earthquake
On the basis of the Earthquake
Disaster Prevention Rules, we
distribute an Earthquake Disaster
Prevention Card which summarizes
what to do in the event of a largescale earthquake.
In August 2014, we revised thecard with additional information
on preparation for a Nankai
Trough earthquake.
In addition, we have introduceda Safety Confirmation System sothat we can quickly confirm thesafety of employees, and are
Earthquake Disasterconducting drills regularly.
Prevention Card
The Safety Confirmation System
automatically sends e-mails to the cell phones of AICA
Group employees in Japan in the event of an earthquakeof intensity 5 or higher, and the employees who receive
the e-mail can reply to confirm their own safety and thesafety of their families through an easy procedure with
their supervisors.

BCP (Business Continuity Plan)
A business continuity plan (BCP) is a plan which aims to
avoid disruption of critical business even in the event of adisaster or accident, in order to protect the company fromloss of customer transactions to competitor companies,
reduction in market share, fall in company value, etc.
It also aims to restart critical business activities withina target restoration time using the remaining capacity
available in the event that business activities have been
disrupted. In AICA Group, the BSP Committee plays amain role in drafting and developing plans and conducting
drills on the basis of said developed plans.
In the event of the Great East Japan Earthquake inMarch 2011, all employees poured their efforts into
recovery from the earthquake under the direction of thepresident, and on the basis of the Earthquake Disaster
Prevention Rules, which define how to respond in theevent of an earthquake disaster. The recovery effort
started with confirming the safety of employees, and also
included gathering information on raw materials suppliersand customers.
In AICA Group, we develop BCP's that cover disasterprevention and conduct drills in order to roll out the BCP's
to our production bases throughout Japan. The roll out is
not only for the major bases but also group companies inJapan.
In FY2017, we reconfirmed the BCP‘s and identified
the remaining issues for the bases that are new to AICA
Group. At Nagoya Plant and Jimokuji Plant, we also
conducted a drill for earthquakes that could occur atnight, and read through the implementation plan together
that included a specific alternative production system.
BCP's in overseas group companies are also developed
one after another, and the AICA Asia Pacific HoldingsGroup decided its basic policy for BCP's in FY2017 andwill develop a concrete plan in FY2018.
We will enhance and develop BCP's in all AICA Groupbases, conduct drills, and establish a system to ensurethat they are feasible in the event of a disaster or
accident.

Kumamoto earthquake - Shipping relief supplies

26

AICA Group CSR Report 2018

A base to support AICA: Business infrastructure

Security and Disaster Prevention
AICA Group produces useful products by using numerous
hazardous substances as either raw materials or as
auxiliary materials. Mishandling hazardous materials
could cause major accidents and have a serious
impact on employees' health, on the proper function of
production equipment, and on the local community.
We conduct fire drills at each production base, in
cooperation with local fire departments. At Nagoya Plant,
we conducted a joint fire drill with the Nishi Kasugai Fire
Department, received training on how to use an AED, andlearned about activity methodologies for assisting injured
persons. At Jimokuji Plant, we conducted water discharge
training using a fire hydrant under the guidance of the
Amatobu Fire Department, so employees could acquire
skills which will be helpful in the event of an emergency.

Information Security
Through management of “Information Management
Rules” and the “Information Management Committee,” wehave established rules on the use and management of
information, and thereby ensure customers' privacy.
We have reviewed the control categories and security
rules relating to private information, including customers'
privacy, and have reflected them in the Information
Management Rules.
We have also prepared and managed a responsemanual to be followed in the event of an information leak.
Furthermore, we aim to firmly establish employee
awareness with regard to internal information
management, through continuous in-house information
security audits and information management training.
Examples of security measures● L ogins are authenticated using employee ID cards toprevent access by third parties. Furthermore, log in
passwords to the in-house system are renewed periodically.
● T he security level of our external network has been
diagnosed by after parties (interested parties, security
management subcontractors), and has been assessed ashaving no problems.
● In order to check the operation management status at our
main systems development subcontractor, we perform
information security audits.
● Data in “PCs taken outside the company” is encrypted, andsecure network connections are implemented.
● W e distribute notices to keep anti-virus software andsecurity patches for PCs up to date.
● We have installed and operate a main server at the data
center, including BCP response.
● We have enhanced information management by completely
prohibiting the use of USB memory devices on PCs
connected to all internal networks.

27

Content defacement due to unauthorized accessto our website
We confirmed the possibility of the defacement of our
website from our web server due to unauthorized accessfrom October 6 up to October 24, 2017.
After taking preventive steps along with a survey and asecurity diagnosis by a third party, we reopened our web
page on November 20,2017.
We will endeavor to prevent such a serious accident
from happening again by considering the introduction offurther security measures and strengthening operations.
Content defacement due to unauthorized access to
our website●Causes

It is believed that an inadequate set-up of access controls
and vulnerabilities of SSH security resulted in defacement of
our website.

●Situation of damage

We confirmed that users who accessed our home pagewere lead to a rogue website where they were misled into
downloading ransomware. However, we did not receive
complaints relating to defacement due to ransomware.
Furthermore, illegal operations other than defacement of our
web page (such as information leaks) have not occurred.

●Preventive measures

We have controlled access, corrected the monitoring log anduser account management, installed additional content theft
detection and anti-virus software, and enhanced preventions
against vulnerabilities. Furthermore, we received a diagnosis
from a third party, stating that we had taken “appropriate andeffective preventive measures.”

AICA GroupA base to support AICA

A base to support AICA: Human resources

Human resource development
We are highly conscious of self-improvement and being futureoriented, developing human resources who move forward and workto embody our creed, “Challenge and Creation.” We recognizethat employees are important for changing our company andenhancing corporate value. With this in mind, we seek to develop
human resources so that each employee can fully demonstrate theircapabilities.

Number of employees in the AICA Group

Employee's Attitude Survey 2
As senses of values in society grow more diverse, employees’
way of thinking towards companies, and attitudes towards working
environment are also changing and diversifying.
Recognizing that taking surveys of employees' attitudes are essential
in order to bring the company to the next level, we implemented
an attitude survey in November 2016, outsourcing it to an externalorganization.
As some time had passed since the previous survey (2008), 2016
survey started from a review of questions. We added and improved
questions about compliance, women's participation, ways of working,etc., and set questions about working in our company, including“contentment” and “pride.”
The results showed overall satisfaction was 3.58, which exceeded
compared to the previous result, and we received a report from thesurvey company stating that it is “marginally higher” compared tothe average results for surveys in other companies. Of course, thesurvey results vary depending on age and job type. We shall analyze
the details and use the results for various measures, including future
personnel systems. We will also conduct periodic surveys in order totake measures to increase employee satisfaction surrounding mid- andlong-term perspectives.

End of March2017

End of March
2018

3,328

3,349

3,850

Total

Number of AICA Kogyo employees
End of March2016

End of March2017

End of March
2018

Male

935

926

993

Female

161

171

182

Total

1,096

1,097

1,175

Education and training systems 1
In the three years since I joined the company, we have developed
employees into “independent human resources” who can think and act
for themselves. We are currently working to develop human resources
with a combination of OJT and the mentor program, and hold atraining plan for improving skills for new, second-year, and third-year
employees.
With regard to self-improvement, we offer a support system forcorrespondence education system and obtaining official qualifications.
In order to develop next generation and management leaders, we arepromoting training for employees in each employment rank and for
employees in management positions.
We also offer employees language training programs to study
abroad, dispatch employees to overseas subsidiaries, hold videoconference meetings with subsidiaries outside Japan, and integrate
language courses into our training for new, second-year and third-year
employees. In these and other ways, we are pouring our energy intodeveloping global human resources.

End of March
2016

AICA Kogyo labor union participation rate
End of March2016

End of March2017

End of March
2018

80.2%

80.2%

80.5%

Total

AICA Kogyo number of new-graduate employees
April 2016

April 2017

April 2018

Male

27

32

38

Female

10

9

16

Total

37

41

54

Employee turnover rate 3 years after entering the company *April 2016

April 2017

April 2018

7.1%

3.8%

13%

Employeeturnover rate
3 years after
entering thecompany* Calculated on the basis of college graduate and graduateschool graduate employed people

1 Status of implementing main trainings*1
Content

Participantsrequired time*2

Second year training

35 people

20 hours/person*3

Third year training

31 people

21 hours/person*3

Middle-ranking staff
training

106 people

16 hours/person*3

Newly-assigned
management position
training

12 people

16.5 hours/person*3*1 FY2017 plan details, partially implement in FY2018*2 Training hours per participant*3 Implemented on section bases, average

2 Overall satisfaction

3.58(Out of 5)

Previously (2008): 3.38

28

AICA Group CSR Report 2018

A base to support AICA: Human resources

Diversity
We are promoting diversity as a response to the globalization ofbusiness and to various market demands. With regard to active
participation by women in particular, we established the Women's
Participation Promotion Project in June 2013, and poured our energy
into activities and environmental improvements to take full advantage ofwomen's capabilities in the management of our business. In recognitionof this activity, we received an “Award for Excellence” from the “Nagoya
City System of Certification and Recognition for Companies that Promote
Active Participation by Women.” which is sponsored by Nagoya City.
We changed the name to “Diversity Promotion Project” in FY 2018
and are working on the promotion of securing a base where a variety ofhuman resources can play an active role.

Status of certification
Acquisition of Nagoya City's certification for companies
that promote active participation by women(January 2016)
This is a certification for companies
who take initiatives to create an
enjoyable work environment for women,
and also public acknowledgment
for a company that offers the best
approach.
Acquisition of the Ministry of Health, Labor andWelfare's “KURUMIN” certification
If the Minister of Health, Labourand Welfare certifies companies asliving up to certain standards suchas for childcare-support, they havea license to use the “KURUMIN”
symbol for advertisements or
products, etc.

In-house workshop
To date, we have planned and held training for “male managers
having female subordinates” and “females having general career-track
positions”.
Following increasing interests in in-house awareness, we held aworkshop in December 2017 for women with production skills andfemale clerical staff working on the front line of the manufacturing.
As a goal for women's workplaces, we thought about improvements
for both job duties and the workplace environment in order to allow for
women to take on more active roles at factory sites.

◆ Launch of women's
participation promotion project
magazine “Kirari”◆

Target and progress of women‘s participation promotion project
Target categories

Target as of the end of March 2019

Progress as of June 2018

In April 2018, a total employees: 40 (including 14 women 35%)
(Reference: Joining the company in April 2017 = 26%)
A total of 14 women of the 40 employees

Achieved

Establishment and revision of
support systems: 3 targets

Revision of the paid leave reserving system
Time shift system newly established
Comeback entry system newly establishedAchieved② Increasing the
proportion of female
manager positions

2.4%*

A total of 7 women in managerial positions out of the total
225 managerial positions③ Expansion of job areas

New assignments to 5 departments

9 departments 9/5

Achieved

Rate of taking paid leave: 60%

Rate of taking paid leave: 56.0% (Reference: 45.0% in FY 2016)

Ongoing

Launch of magazine: Once per year

Launch of magazine “Kirari” in April, 2016
Launch of magazine “Kirari” in October, 2017

Ongoing① Increasing the
proportion of female
employees④ Reform of company
culture* According to The Ministry of Health, Labour and Welfare for average values in other manufacturing industries,“The average ratio by industry of female employees in managerial positions” (During 2016)

29

Status

Proportion of women among hiringof new college graduates forgeneral career-track positions: 30%

3/3

3.1%

Achieved

AICA GroupA base to support AICA

Expansion of balance support system [comeback
entry system]
We recently established a comeback entry system for employees who had toretire due to child care, nursing, the relocation of his/her spouse, etc.

Applicable retirement reasons❶ When you have to retire without being able to let your child enter anursery school after the child care leave period is ended❷ When you have to retire after the family care leave period is ended
without being able to solve the reasons for application❸ When you have to retire because of a job transfer by your spouseand you cannot continue your employment
When you are no longer bound by such restrictions and you are in an environment where
you are able come back to work, we would warmly welcome you back to work throughemployment selection (a registration system / within 5 years from the time of retirement)

Re-employment system, employment of handicapped
persons
With regard to the amendments to the Act for Stabilization of
Employment of Older Persons which came into force on April 1, 2006
(making it mandatory to provide continued employment opportunities
until the age of 65,) a part of it was revised on April 1, 2013, against thebackground of a rapidly declining birthrate and aging population.
We substantially revised our re-employment system, both in responseto the amendments to the Act and in order to increase motivation
among employees and give them securities in their lives. We shallcontinue to work on the development of an environment where people
can work with peace of mind.
With the aim of continual employment of disabled persons, we are
identifying work that disabled persons can do and are promoting
the retention of their employment. We will continue to work actively
on measures for further expansion of employee numbers, such as
participating in job interview conventions for disabled persons.

Transitions in the number of new employees
hired through the re-employment system
FY2015FY2016FY201714

16

18

Transition in the number of employees with adisability
End of March 2016

End of March 2017

End of March 2018

17

17

21

Workstyle reforms
While long working hours become a social issue and the government
promotes work style reforms, we have started up the “Work Style
Reforms Promotion Project” on April 1, 2017. We are actively working
to change people‘s way of thinking and create a culture in which people
are not made to work long hours through activities such as promoting
no-overtime days and reducing the amount of overtime. Through C&C
activities P.19 , the whole company is working on awareness reforms
and work style reforms in order to reduce long working hours. For
example, we are promoting improvements on equipment and work
styles, and increased multi-functionality. We are also promoting
planned use of paid leave and have enhanced our child and family care
support systems.

AICA Kogyo Co., Ltd. Situation regarding theuse of paid leave
FY2015FY2016

Averagenumber ofdays taken

7.5 days

8.2 days 10.3 days

Average rateof use

40.6%

45.0%

FY201756.0%* Calculated from September 16, 2017 to September
15, 2018 with regard to paid leave given in
September 16

Our activities were adopted in the following
media.
●NHK Hot Evening (March 1, 2017)●NHK Ohayo Nippon (March 2, 2017)●NHK Navigation (April 28, 2017)●NHK Ohayo Nippon (May 17, 2017)●Nihon Keizai Shimbun (evening newspaperon May 26, 2017)30

AICA Group CSR Report 2018

A base to support AICA: Human resources

Occupational safety and healthWe established a Safety & Health Committee based on the Industrial
Safety and Health Act, and carry out investigations and discussions
regarding important matters such as measures that should becomefoundations to prevent danger or health problems of workers.
In labor contracts between our company and AICA Kogyo Labor
Union, we clearly stated that labor and management shall cooperate
on safety and health, and have discussions as necessary.

1 Occupational accidents
Scope
All AICA Group production bases in Japan:

AICA Kogyo Co., Ltd., AICA Interior Kogyo Co., Ltd.
All production bases of AICA Harima Kogyo Co., Ltd.
and AICA Tech Kenzai Co., Ltd.

Occurence of occupational accidents

Preventing occupational accidents 1
So that we do not forget the serious accident happened at Jimokuji
Plant on January 17, 2006, we have established January 17 as“All AICA Safety Day.” We held silent prayers and morning safety
meetings, and the 12th AICA Group Occupational Safety and HealthConvention on January 17, 2018. We reconfirmed and analyzed
occupational accidents happened in the past, and confirmed that
we would strengthen safety measures by conducting educationand equipment improvement activities closely together. In the plant
manager training after the convention, we discussed measures for
improving safety awareness in workplaces, policies for strengthening
safety management systems (in cooperative companies) together withsafety and health consultants on the premises, and shared effective
examples.
On the worksite level, we continuously conduct risk prediction training,
activities to prevent potentially dangerous minor incidents, and risk
source improvement activities, all through “small group activity” units.
To maintain and enhance these steady activities, we appoint persons
in charge of safety for “small group activities” as “safety instructors.”Through these actions, we work to eradicate occupational accidents
completely.

15
10

4
4

5

10

0

2013

8~14

8~14

0~0

0~0

Jimokuji Plant

40~40

36~39

4~1

0~0

Fukushima Plant

40~39

40~39

0~0

0~0

Hiroshima Plant

20~20

18~18

2~2

0~0

Ibaraki Plant

4~2

2~2

2~0

0~0

Tamba Plant

23~24

20~24

2~0

1~0

Isesaki Plant

0~5

0~4

0~0

0~1

Group companies inJapan *1

10~50

9~16

1~11

0~23

Total

145~194133~156

11~14

1~24

* Added Isesaki Plant of AICA Kogyo Co., Ltd. and 3 plants of AICA Tech Kenzai Co., Ltd. to the target on
the above list from this fiscal year
*1 AICA Interior Kogyo Co., Ltd., AICA Harima Kogyo Co., Ltd., AICA Tech Kenzai Co., Ltd.

6

2

0

2 0

2014

2015

2016

4

0

2017
(FY)

Accidents causing
Fatal accidents
absenceHave not occurred for■Regular employees the past five years■Non-regular employees* Frequency rate = Number of casualties due to occupational
accidents x 1,000,000 ÷ Total working hours

3
2017 national average: 1.66

2

1.73
1.26

1.00

1
0

0.70

0.00

2013

2014

0.82

0.00

0.00

2015

2016

1.36

2017
(FY)

Severity rate transitions* Severity rate = Lost working days x 1,000 ÷ Total working hours

0.15
2017 national average: 0.09

0.10

0.05

0.05
0

0.05

0.02

0.01

0

0

0

2013

2014

2015

2016

0.04
2017
(FY)

AICA Kogyo Co., Ltd. All production bases in Japan(non-consolidated)
All AICA Group production bases in Japan(consolidated)* AICA SDK Phenol CO., Ltd. is calculated as a production
base of AICA Kogyo Co., Ltd. (Isesaki Plant) from FY2017.

車両事故件数の推移（件）
environment measurement
results
2 Work
対象範囲：アイカ工業(営業店所を含む)の当方、双方過失事故The number ofapplicable measurement
locations (total number)

31

Nagoya Plant

3

8

1

6

Frequency rate transitions

Target: Organic solvents, specialized chemical materials, mineral powders, dioxins
1st management 2nd management 3rd management
category
category
category

40 0

Accidents notaccompanied bylost worktime■Regular employees■Non-regular employees

Results of work environment measurements (FY2016 ~ FY2017)
The number
of applicable
workplaces(total)7

2 1
0

Improvement of the working environment 2
We conduct work environment measurements twice a year in indoor
workplaces where organic solvents, specified chemical materials andmineral powders are used, and in waste incineration facilities whereparticles and incinerated ash that contain dioxins are handled. We
added new results of Isesaki Plant and 3 plants of AICA Tech Kenzai
Co., Ltd. to the previous result since this fiscal year report portion,
so the number of target workplaces has increased. In particular, thenumber of target workplaces using mineral powders has increased anda ratio of the 2nd and 3rd management categories have also increased.
We shall aim to improve these working environments.

(cases)

200
150

133

156

11

100
145

50
11 14 10

0

4

1

24

1st management 2nd management 3rd management
category
category
category

FY2016FY2017

Target added bases

1st management category: Work environment management isjudged to be appropriate
2nd management category: Work environment management isjudged to have room for improvement
3rd management category: Work environment management isjudged to be inappropriate

31
23

AICA Group

Traffic accident prevention 3
The number of car accidents in
FY2017 (involving negligence by
the party from our company orby both parties) was 26, which
was unfortunately an increaseof 3 incidents compared to theprevious year.
The number of accidents
causing injury or death tends tobe decreasing, so the number ofaccidents caused by poor driving
Execution declaration cardskills such as “making a mistakein visual confirmation”, “crashing into the shoulder of a road” and “inner
wheel differences” has increased.

A base to support AICA

3 Traffic accidents
Scope
Negligence by the party from AICA Kogyo orby both parties

Transitions in the number of car accidents (cases)
60
40
20

31
20

22

23

2015

2016

0
2013

2014

Main car accident countermeasures① We will introduce telematics, drive recorders, etc., check and give
feedback to target groups for driving aptitude, and aim to raise awarenesstoward driving skills improvement.

Number of accident occurrences foreach accident type in FY2017③ S haring causes in the whole company by using KYT (risk prediction
training) sheets based on actual accident cases

Insufficient
stopping 19%② T hose who caused accidents must submit a report, and prevent
recurrence in order to promote awareness reform.

Mental healthWith fiercer competition in the market and rapid economic
environment changes, workers are feeling more and more stressed,
and it is becoming a serious social issue.
We are taking a variety of measures in order to keep employees’“mental and spiritual” health in good shape as well as physical health.
Stress check is being held once a year from FY2016, we give feedback
results to individuals. In addition, we give feedback analysis results to
HOD of each department, in order to promote activities that can
improve workplaces. We have also established “mental and physicalhealth consultations” in which an external organization has been used
as a consultation counter where privacy is ensured.

26

Other
4%

Rear-end
collisions 19%

2017
(FY)

(%)

When changing lanes toturn left or right 31%

Reversing27%

Regular health checkups
As a result of the amendment of the Health Insurance Law, in
FY2008, the Ministry of Health, Labour and Welfare presented a plan
to introduce a new medical examination system to prevent and improvemetabolic syndrome, and made it an obligation for health insurance
unions to implement metabolic syndrome countermeasures. Our
company has incorporated “medical examinations for lifestyle related
illnesses” into its “mandatory medical examinations,” organizing themby age and gender and making them compulsory.
Being able to select a “gynecological examination” is a standard,
and we are strengthening the health care management functions for
employees. Since FY2014, the cost of influenza vaccinations has been
partly subsidized by our company in order to promote the prevention ofillness.

32

AICA Group CSR Report 2018

A base to support AICA: Environment

The World Economic Forum (WEF), which is an international institute for improvement of global situations
presents a “Global Risks Report” every year. In the FY2018 version, we reported that “abnormal weather,” “natural
disasters,” “failures to easing and adoption of climate change,” etc. were in a higher rank as a possibility tohappen and possess negative impacts.
AICA Group recognizes the importance of such risks, and is constructing an environmental management system
based on ISO14001 in order to achieve a sustainable society. We also actively promote global warming prevention(action for climate change problems) and reduction of environmental burdens (action for problems related toresources and pollution).
Scope: A scope is clearly stated for each item. The breakdown of bases is as follows.
● All domestic production bases of AICA Group: All production bases in AICA Kogyo Co., Ltd., AICA Interior Kogyo Co., Ltd., AICA Harima
Kogyo Co., Ltd. and AICA Tech Kenzai Co., Ltd.
●A
 ll overseas production bases of AICA Group: P.T. AICA Indonesia, P.T. Techno Wood Indonesia, Kunshan AICA Kogyo Co., Ltd., Shenyang
AICA-HOPE Kogyo Co., Ltd., AICA Laminates India Pvt. Ltd., AICA Vietnam Company Limited, AICA Asia Pacific Holding Pte. Ltd.

Environmental targets and progress status
Scope All AICA Group production bases in JapanThe FY2017 track record is deteriorating because recycled waste is being disposed as landfill.
In FY2018, we will strive to achieve targets by creating closer relationships between the existing group and newcompanies in terms of information that include this matter, and sharing each other's knowhow.
Target item

Industrial waste
reduction

Green purchasing
Contribute to local
communities

Goal *4

Goal *4○

Energy saving in line with the
production status, increasing
efficiency by means ofequipment replacement

Reduce emissions
per unit of sales by
3% compared to theprevious year

Reduce emissions
per unit of sales by
3% compared to theprevious year

Reduce energy per unit
by 1% compared to theprevious year

Reduce energy per unit
by 1% compared to theprevious year

44.58 ㎘/
ton-kilometers(1% decrease)○

Improve regular-service
loading ratios, enhance modal
shifts for truck transportation,
improve efficiency for doublehandling services

Reduce the amount of
1% reduction on
PRTR discharge/transfers
performance in theprevious year
P.36

69 tons(0.5% decrease)×

Increase yield rates,
suppress discharges, change
specifications to alternative
substances

Reduce energy by
1% compared to theprevious year

Reduce energy by
1% compared to theprevious year

Reduce emissions
Reduce the amount ofindustrial waste generated per unit of sales by
2% compared to theP.36
previous year

25.8 tons / 100 million
yen in sales(2% decrease)○

Reduce waste by means of
reduction in the number of inprocess defects

Reduce emissions
per unit of sales by
2% compared to theprevious year

Reduce emissions
per unit of sales by
1% compared to theprevious year

1.0% or less

5.2%

×

Promote recycling and convert
to valuable resources

5.0% or below

1% or below

Sales amount of AS
products
11.23 billion yen

9.79 billion yen

×Offer products that contributeto social issues, and identify
additional fields where we canmake a contribution

Sales amount
14 billion yen

Sales amount16.15 billion yen

Green procurement
proposals adopted: 18○

Review raw materials andhow they are transported

Green procurement
proposals: 15

Green procurement
proposals: 25

At least once a monthat each site

At least once a monthat each site○

Cleanup activities aroundplants, river clean-up
activities, etc.

At least once a monthat each site

At least once a monthat each site

Once a year

Once a year
(July 2017)○

Disclosure of information by
the AICA Group consolidation,
response to the Third Party
OpinionOnce a year

Once a year

Once a year

Once a year
(July 2017)○—

Once a year

Once a year

Reduce transportationenergy *1

Reduce the ratio of landfill
disposal

Sales expansion *3 for AS
products *2

P.15–16

Promote green
Green procurement
procurement inproposals: 15
cooperation with suppliers
Cleanup activities aroundplants

P.45
Issue CSR reports

Information
disclosure

All pages
Conduct environmental
accounting

P.39*1 Scope is for domestic transportation*2 AS products: Abbreviation for AICA Solution products. Products that solve a variety of social issues*3 Scope is AICA Kogyo non-consolidated*4 Excluding the newly consolidated portion

33

FY2020Main activity situation

Reduce energy
for freight per tonkilometer unit by
1% compared to theprevious year

P.34

P.36
Solving social issues

FY2018
Evaluation

33.8 t - CO2 / 100
million yen in sales(4.25% decrease)

P.35
Reduceenvironmental load
substances

Performance

Reduce emissions
per unit of sales by
2% compared to theprevious year

Reduction of greenhousegas emissions

Global warming
prevention

FY2017
TargetAICA GroupA base to support AICA

Global warming prevention <An action for climate change problems>
Reduction of greenhouse gas emissions (energy saving) 1
The priority issue to protect the global environment is to slower the
progression of global warming. The “Paris Agreement” which is a new
global legal framework was adopted at the 21st United Nations Framework
Convention on Climate Change (COP21) in December 2015. Following
this, the USA announced withdrawal from the Paris Agreement in July
2017. However, a negotiation for implementation guidelines of the Paris
Agreement continued at COP23 held November 2017 in Germany. A “longterm low carbon vision” was compiled in March 2017 in Japan and activities
for global warming measures have been promoted. The target for Japan
is to achieve a 26% reduction by 2030 compared to 2013 and achieve
an 80% reduction by 2050. The AICA Group has been actively working toachieve a reduction of greenhouse gas emissions. We have also laid out atarget aiming to reduce emissions per unit of sales by 3% compared to theprevious fiscal year, every year, until FY2030.
AICA SDK Phenol Co., Ltd. (count as an Isesaki Plant of AICA Kogyo
Co., Ltd. Since FY2017) and AICA Tech Kenzai Co., Ltd. joined ourgroup in September and October 2015 respectively, and because about
half a year's worth of emissions were added for FY2015 and one year
worth emissions were added for FY2016, the total amount of emissions
for the group in Japan has increased.
Main activities in FY2017 on each website of the domestic group are
as follows. Having made the visualization of energy the main theme, wehave worked toward grasping the current status, and eliminating waste
and making improvements. In FY2018, we will continue to bring issues
out into the open, and carry on promoting management and equipment
improvements from a mid-term perspective.
Greenhouse gas emissions(Production bases in Japan)

Target in FY2017
FY2017 result
34.6 t - CO2 / 100 million yen
33.8 t - CO2 / 100 million yen
or less(Per unit of sales)(Per unit of sales)

Main activities in FY2017

Transitions in energy input and

1 greenhouse gas emissions

Scope
All AICA Group production bases in JapanAll AICA Group overseas production bases
AICA Group sales bases in Japan: 22 sales offices

Transitions in energy input

(TJ)

1,500
1,000

1,032
744

1,179 1,129 1,221 1,209
971 1,029 252 ❷

913

330 ❶

661

500

927

641

0

27.6
2013

25.1
2014

23.9
2015

22.5
2016

22.2
2017
(FY)

■Production bases in Japan* ■Overseas production bases■Sales bases in Japan*① Newly consolidated portion in FY 2015
② Newly consolidated portion in FY 2016

Transitions in energy input per unit of sales (TJ / 100 million yen)
1.00
0.75
0.50

0.78

0.75

2016

2017

0.65
0.53

0.46

0.25
0
2013

2014

2015

Production bases in Japan(FY)

Transitions in greenhouse gas emissions (t-CO )2

60,000

Nagoya Plant

Heat exchange efficiency in resource recovery boilers

Jimokuji Plant

Improvement of the cooling efficiency on the polyurethane
manufacturing line

39,24640,00033,74630,48520,000

Tamba Plant

Improvement of efficiency; upgrading the drum for the raw materials
freezer, improvement of continuous production efficiency in silicone
particles drying process

33,9590

AICA Interior Kogyo Co.,Ltd.

Improvement of efficiency; upgrading boilers(heavy oil → city gas)

AICA Harima Kogyo Co.,Ltd.

Improvement of efficiency; upgrading air conditioners, improvementof efficiency by means of upgrading boilers

AICA-Tech Kenzai Co.,Ltd.

Improvement of autoclave filling rate (improvement of steam
efficiency), improvement of efficiency; upgrading the transformers inIchikawa Plant

Each plant basePromote the shift to the use LED illumination, improve production
efficiency; reduction of defect rate
(Use of QC method), promotion of power saving in processes

P.T. AICA Indonesia

Recover the steam drain from drying machines (impregnation
process)30

Dynea (Guangdong) Co.,Ltd.
(AAPH Group) *Change heavy oil boilers into gas boilers

10① Change from high pressure sodium lights to LED lights② Improve efficiency by adding steam to pressure washingmachines③ Change existing electric water heaters to surplus steam heaters

0

AICA Dong Nai Co., Ltd.
(AAPH Group) *53,45855,38539,63941,44244,091
11,155 ❷ 43,510
11,897 ❶42,30329,545

1,550
2013

1,374
2014

1,311
2015

1,199
2016

1,167
2017
(FY)

■Production bases in Japan* ■Overseas production bases■Sales bases in Japan*① Newly consolidated portion in FY 2015
② Newly consolidated portion in FY 2016

Greenhouse gas emissions
Transitions in emissions per unit of sales
40
23.9

20

2013

(t - CO2 / 100 million yen)

35.3

33.8

2016

2017

27.6
21.2

2014

2015

Production bases in Japan(FY)* AAPH Group: AICA Asia Pacific Holding Pte. Ltd.

34

AICA Group CSR Report 2018

A base to support AICA: Environment

Green Logistics

Transitions in energy consumption per

1

Reduction of greenhouse gas emissions generated duringtransportation is one issue imposed on a company.
In AICA Group, employees who are in charge of logistics in main
shipment bases in Japan worked in cooperation with the sales
department, and continuously implemented improvements for
efficiency of modal shifts, truck cargo transportation. As a result,energy consumption (equivalent in heavy oil) per ton kilometer of cargotransportation which is a management indicator was reduced by 1%
compared to the previous fiscal year and became 44.58㎘.
The total amount of cargo transportation has been reduced by 7.6%
compared to the previous fiscal year, and it is still in need of more
efficient improvements. We plan to improve regular-service loading
ratios and expand regular-service delivery areas (San-in region routeand Tohoku area).

Scope 3

2

Not only does the Energy Conservation Act in Japan requirecompanies to manage Scope 1 emissions (fossil fuels, liquefied naturalgas) which includes greenhouse gas (GHG) emissions emitted bycompanies themselves, and Scope 2 emissions (electrical power)
which includes indirect emissions by companies. In recent years,
there has been an increasing movement toward the management andexternal disclosure of Scope 3 emissions (production, transportation,business travel, commuting) as GHG emissions through their supplier(business partner companies). This movement includes, for example,
the Carbon Disclosure Project (CDP).
Starting in 2006, AICA Kogyo has been working on assessing andcalculating the CO2 emissions resulting from its product manufacturing,
and we have made a preliminary calculation for Scope 3, in line withthe movement discussed above. As a result, we have worked out thatthe processes that have an impact differs, depending on the product.
The products with a high emission ratio of CO2 in their procurement
process are our chemical-blend products, and the products that emit
large amounts of CO2 in their production process are our high-pressure
decorative panels, which require many different processes to produce.
The data base used for calculations is mostly old hence, we do not
calculate it every year. However, we will update it in FY2018.
Category

Scope 1

35

Overview

Resulting fromfuel used

Calculated value

Details and method of calculation

16,400t-CO2Calculated by multiplying the amount ofpurchased fuel consumed by the emission
intensity.
T h e e m i s s i o n c o e ff i c i e n t s i n A i c h iPrefecture's regulations on the conservationof the living environments of citizens, asof 2006, were used to calculate emission
intensity.

Scope 2

Resultingfrom electrical
power used

16,700t-CO2Calculated by multiplying the amount ofelectrical power consumed by the emission
intensity. The emission coefficients in
Aichi Prefecture's regulations on theconservation of the living environments ofcitizens, as of 2006, were used to calculate
emission intensity.

Scope 3

Items relating
to businessactivities
besides thosecoming under
Scope 1 andScope 2

702,400
t-CO2

Calculated by category

1 unit regarding transportation (kL / million ton kilometer)
Transitions in energy consumption per

50

1
48 unit regarding transportation (kL / million ton kilometer)
46
50
44
48
42
46
40
44

45.43

45.43
2013

42

46.30

45.07

44.99

44.58

45.07

44.99

44.58

2015

2016

2017

2016

2017

46.30
2014

Production bases in Japan

40

2013

2

2014

2015

Production bases in Japan

(FY)

(FY)

Scope 3: CO2 amount in calculated
value for each category(%)

Scope 1: 2%
Scope 3: CO2 amount in calculated

2 value for each category(%)

Scope 2: 2%
Scope 1: 2%
Scope 2: 2%

Scope 3: 96%

Scope 3: 96%

Application and calculated value for eachcategory in Scope 3(t-CO2)Category

Purchased goods,
659,200
services
2 Capital goods
4,100
Fuel and energy related
3
20,300activities
Transportation andIncluded in Category 1
4
distribution (upstream)
Waste arising from
5
4,200
business（％）
6
Businesstravel100
カテゴリー9 of
1,200
Commuting
カテゴリー6、7
7
employees（％） カテゴリー5
Not applicable
1008 Lease credits (upstream)
カテゴリー3
カテゴリー960 Transportationカテゴリー6、7
9 and distribution
13,400
カテゴリー2
カテゴリー5(downstream)
カテゴリー1
カテゴリー3
Processing of products
60
10
Not applicablethat have been sold20
カテゴリー2
Use of products that
11 カテゴリー1
Not applicablehave been sold0
Disposal of products
20
Included in Category 1
12that have been soldLease credits
13
Not applicable0(downstream)
14 Franchises
Not applicable
15 Investments
Not applicable
1

AICA GroupA base to support AICA

Reduction of environmental burdens <Action towards resource and pollution problems>
AICA Group aims for reduction of environmental burdens andeffective use of resources, it works on management of chemicalmaterials, reduction of industrial waste, recycling and effective useof water resources, and considers improvement of productivity andweight reduction of products. AICA Group also promotes changesof specifications which replace environmental load substances foralternative substances.

Management of chemical substances 3
Our company recognizes that reducing the amount of discharged andtransferred chemical materials including volatile organic compounds(VOC) is an important responsibility of a chemical manufacturer. We
have promoted the reduction of target substances in the PRTR Law since
2002, and have made reductions by about one fifth 10 years later in 2012.
Since then, discharge amount and transfers have been seesawing as aresult of increases in facility numbers (by means of M&A) and decreases
arising from reduction activities. (The data for AICA SDK Phenol Co., Ltd.
has been included with Isesaki Plant of AICA Kogyo Co., Ltd. since 2017,
and the data for AICA-Tech Kenzai Co., Ltd. since 2015.)
It is a system that we assess, calculate, and announce data includingwhich generation sources discharge a vast number of harmful
chemicals, how much is discharged to the environment, or how much isincluded in waste and brought outside of offices, in accordance with the“* Act on Confirmation, etc. of Release Amounts of Specific Chemical
Substances in the Environment and Promotion of Improvements to theManagement Thereof ” (PRTR Law).

Industrial waste reduction and recycling 4

in theScopeamount of discharged and
380 Transitionstransferred PRTR-controlled substances
69
69 (ton)66 production
All AICA Groupbases in Japan
65

60
80
40
60
20
40
0
20

FY2017 result
25.8 t / 100 million yen(Per unit of sales)
5.2%

Main activities in FY2017

69

2015

2016

2017

2015

2016

2017

65

2013

2014

(FY)

2013

2014

(FY)

■Production bases in Japanin the amount of discharged andTransitionsin theamount of industrial
waste (ton)3 Transitions(ton)
transferred
PRTR-controlled
substances
45,00042,232 (ton)Transitionsin the amount of industrial
waste
80
39,822
69
69
66
65
60
15,220 ❷30,00055
45,00026,44742,23239,82240
17,045 ❶24,602 ❷15,00015,22030,000 9,401
26,447
9,329
20
3,947
3,998
2,779
3,044
2,992
9,402
❶
17,045
Transitions
intheamount024,602of industrial
15,0000
waste
andin the landfill
disposal
ratio
9,401
9,329
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
3,947
3,998
(FY)
2,779
3,044
2,992
(FY)
9,402
0
■Production
bases
in
Japan
*
■Overseasproduction
bases
Scope
■Production bases in Japan4* ①Newly2013
consolidated portion②Newly consolidated
FY 2016
2014in FY 20152015
2016 portion in2017(FY)

All AICA Group production bases in Japan■Production
basesJapan * ■Overseas
production
bases
All AICA Groupoverseasbases
Transitions
intheinamountof productionindustrial
waste

per②Newly
unit of consolidated
sales (ton /portion
100 million
yen)* ①Newly consolidated portion in FY 2015
in FY 2016

Transitions in the amount of industrial waste (ton)Transitions in the amount of industrial waste
30.0

per unit of sales26.3(ton / 100 million
25.8 yen)

20.0
30.0
30,00010.0
20.0
15,000
10.00
0
0

17.6
26,447
6.7

6.5

9,401

9,329

6.72,992
2013

39,822

42,232

26.3
15,220 ❷

25.8

17.6
17,045 ❶24,602

3,044
6.52,779
2014 9,402 201520132014 in Japan2015
Production
bases

3,947
2016

3,998
2017

2016

2017

(FY)

(FY)

■Production
bases
in landfill
Japan * 2015
■Overseasproduction
bases2013 in2014
2016
Transitions
thedisposalratio at 2017
* ①Newly consolidated portion in FY 2015 ②Newly consolidated portion in(FY)
FY 2016(%)
production
bases
Production
basesininJapan
Japan
Transitions in
of industrial
waste
Transitionsin thetheamountlandfillperdisposal
ratio
atunit of sales (ton / 100 million yen)
6.0
production
bases in Japan
5.2 (%)
30.0
4.0
6.0
20.0
2.0
4.0
10.00
2.0
0
0

26.3

25.8
5.2

1.0

1.4

17.6
1.4

1.0

6.7
1.0
2013

6.5
1.4
2014

1.4
2015

1.0
2016

2017

Production bases in Japan
2013
2014
2015
2013
2014
2015
Production bases in Japan
Production bases in Japan

2016
2016

2017
2017
(FY)

(FY)

(FY)

Transitions in the landfill disposal ratio at
production bases in Japan

Reduction of plastic waste with resin by means of process improvement

Ibaraki Plant

Conversion of scrap metal into valuable resources, improvement inproduct yield by means of collection of surplus materials

6.0

Tamba Plant

Improvement in yield of polymer beads products

4.0

Isesaki Plant

Reduction of in-process incinerated material amount generated

AICA Harima Kogyo Co., Ltd. Reduction of foreign object defects by adding a partition between buildings, etc.

2.0

Reduction of timber offcuts generated due to re-examining standard sizes,
AICA-Tech Kenzai Co., Ltd.
and increasing product recovery due an update to timber offcut grinders

0

Promotion of emissions reduction by improving reject rates andimproving efficiency (Use of QC method)

69

66
55

■Production
bases in Japan
0

Fukushima Plant

Each plant base55

45,000We began specific activities to reduce industrial waste in 1998, andhave set this as an important environmental guideline for the entire group.
Data for AICA SDK Phenol Co., Ltd. (which has been calculated as
Isesaki Plant of AICA Kogyo Co., Ltd. since 2017) and AICA-Tech
Kenzai Co., Ltd. has been calculated since the middle of FY2015, andone year's worth of data has been added for FY2016, the values havebeen affected significantly.
Also, materials that were recycled as roadbed materials became
landfill disposal in 2017. As a result, the landfill disposal rate has
increased. We are now selecting valuable resource processing
destinations and considering a path for effective use.
Target in FY2017
Amount of industrial waste 25.8 t / 100 million yen or less
(Production bases in Japan)(Per unit of sales)
Ratio of landfill disposal
1.0% or less
(Production bases in Japan)

in the amount of discharged and3 Transitionstransferred PRTR-controlled substances (ton)

(%)

5.2

1.0

1.4

1.4

1.0

2013

2014

2015

2016

Production bases in Japan

2017
(FY)

36

AICA Group CSR Report 2018

A base to support AICA: Environment

Reduction of water consumption rate 1
In production bases in Japan, industrial water and groundwater isused. In Nagoya and Jimokuji Plants, water recycling is promoted.
AICA SDK Phenol Co., Ltd. (calculated as Isesaki Plant of AICA Kogyo
Co., Ltd. since 2017) is located near a rich Tone River system, and theabundant water resources are utilized there, but we will strive to reducewater consumption in the future.
In overseas production bases, industrial water and groundwater isalso used, but efficient use is promoted because some regions areshort of water.
In AICA Laminates India Pvt. Ltd., which is located in the north ofIndia, water recycling is conducted in the manufacturing process.
Wastewater is treated in facilities in the plant and is used for gardening.

1 Transitions in water use(1000 m³)

Scope
2,514
All AICA Group production basesin Japan
2,241
in
water
use
(1000 m³)
850
2,000
❷
1AllTransitions
AICA Group overseas
production
bases
1,602
3,000

3,000
1,000

609

788

431

705

1,174 ❶

745

428

2,0000
2013

2014

1,602
2015

2,514
1,664

998

802
2,241

850 ❷

2016
2017
(FY)
1,174 ❶
998
1,000
802
788
745
705
609
■Production
bases
1,664 production bases
431in Japan * ■Overseas*① Newly consolidated portion in FY 2015428 ② Newly consolidated portion in FY 2016

0

2013

2014

2015

2016

2017
(FY)

■Production bases in Japan * ■Overseas production bases*① Newly consolidated portion in FY 2015 ② Newly consolidated portion in FY 2016

Main activities in FY2017
AICA Singapore
Pte. Ltd.
(AAPH Group)

After checking the quality, wastewater generated in thesynthesis process for urea formaldehyde resins is reused
as a material for formalin. About 300 tons and 50 thousand
Singapore dollars were saved.

AICA Dong Nai
Co., Ltd.
(AAPH Group)

We changed a method for removing deposits found on
pipes by letting water from boilers and chilling machines
flow through using non-chemical cleaning equipment, andconsequently eliminated wastewater thanks to the said
cleaning process.

* AAPH Group: AICA Asia Pacific Holding Pte. Ltd.

FY2017 material balance
The amount of materials and energy being used has been increasing along with an increase in production volume
compared to FY2016.
However, we are taking a variety of measures as mentioned above in order to improve efficiency. The ingredientevaluation (of the pulp portion) for some product's processing powder is becoming strict, and the process of recycling
industrial waste is being scrapped in preference for landfill disposal. As a result, landfill disposal of industrial waste isincreasing significantly. In AICA Interior Kogyo Co., Ltd., the shift from groundwater to treated water is being conducted.
Scope

All AICA Group production bases in Japan

INPUT
Energyinput

AICA Group production bases in Japan

Total energy input
Electric power

1,221TJ *57,945,000 kWh

Petroleum

4,098 kL

City gas

7,735,000 m3

LPG

Material
input

1,404 tTotal material input

257,770 t

Raw materials

241,096 t

Auxiliary materials

575 t

Packaging materials

10,392 t(PRTR-controlled
substances)(40,115 t)● AICA Kogyo Co., Ltd.
Nagoya Plant
Jimokuji Plant
Fukushima Plant
Hiroshima Plant
Ibaraki Plant
Tamba Plant
Isesaki Plant● AICA Interior Kogyo Co., Ltd.
● AICA Harima Kogyo Co., Ltd.
● AICA-Tech Kenzai Co., Ltd.

OUTPUT
Discharge Greenhouse gas
into theSox
atmosphere NOx

55,385t-CO2

Smoke and dust

2.5 t

5.9 t
27.3 t

PRTR-controlled substances 56.6 t
Product
237,756 t
Productdelivery
Shipment Total discharge of industrial waste 24,593 t
as waste External recycling
22,045 t
Landfill disposal

2,195 t

PRTR-controlled substances

11.7 tDischarge Total water discharge 2,153,000 m
into water COD
39.5 tareas
Nitrogen10.2 t3

Water use
Water
resources Groundwater
input
Treated water

2,241,000 m

Industrial water

56,000 m

3

2,018,000 m3
168,000 m3
3* TJ: tera-joule

37

Heat recovery
Waste 17,572 t

Phosphorus

3.9 t

PRTR-controlled substances

0.4 t

AICA GroupA base to support AICA

Environmental risk management
Soil and groundwater research 2
Some of AICA Kogyo Co., Ltd. and Group companies’ plants in Japan
have a history of using organic chlorine solvents, harmful heavy metals,
etc. They conducted voluntary research into soil and groundwater in
FY2001, and was completed by FY2003 (please refer to the informationon the right).

Status of PCB possession/management
Polychlorinated biphenyls (PCBs) was used for ballast in fluorescentlamps. As a result of the Kanemi Yusho incident in 1968, their toxicity
became a public concern, and their production was banned in 1972.
Following this, despite the private sector’s attempt to establish 39
treatment facilities nationwide, none of them were approved by local
communities. PCB has remained undisposed for more than 30 years.
In March 2016, in order to breakthrough on this matter, the Cabinet
made the decision to conduct necessary institutional countermeasuresin order to secure the completion of PCB disposal as soon as possible
before the deadlines set for each business site (the shortest of whichby the end of FY2018) expired.
We store PCB in accordance with the storage standards for speciallycontrolled industrial waste in Nagoya Plant, Ibaraki Plant and Isesaki
Plant, and we are aiming to dispose of the PCBs as soon as possible
through discussion with treatment operators.

Status of adherence to environmental regulations
In FY2017, despite the fact that AICA Group was not involved in any
legal actions in relation to the environment, we were deficient withregard to the following points, and corrected them accordingly.
Exceeding the effluent standards at Tamba Plant
Sampling of discharge water in the sewage systems conducted by
the Tamba City Water Supply Division in May 2018 showed that themeasurement value of phosphorus concentration was exceeding the sewage
effluent standards.
It is because specific products using phosphorus materials increased
rapidly and they could not be removed using coagulation sediment treatment
in ordinary waste water treatment facilities.
We corrected the situation to make the value below the standard byadjusting the pH level when conducting coagulation sediment treatment andreducing the degree of phosphorus solubility of treated water.

2 Soil and groundwater research
Results of voluntaryresearch
Conformity with
AICA Kogyo Co., Ltd. Nagoya Plant
environmental
standards
Conformity with
Jimokuji Plant environmental
standards
Conformity with
Hiroshima Plant environmental
standards
Conformity with
Ibaraki Plant
environmental
standards
Conformity with
AICA Interior Kogyo Co., Ltd.
environmental
standards (Note)
Conformity with
AICA Harima Kogyo Co., Ltd. Head Plant environmental
standards
Conformity with
Kasai Plant
environmental
standards
Name of office and company(Note) When we conducted inspection of only the surface area
at a factory site obtained by AICA Interior Kogyo Co.,
Ltd., it was found that fluorine in one area (10 m x 10 m)
exceeded the acceptable standard. We therefore carriedout rain seepage prevention work.
* As Fukushima Plant and Tamba Plant have never usedand do not currently use any substances for which
environmental quality standards for soil pollution havebeen set, they are excluded from the research.

3 Contents of environmental accidents
Site name / Occurrence month
Nagoya Plant/September 2017
Accident details
When waste resin drums (200 L × 2) werebeing carried using a forklift, the pallet became
tilted due to a dent in the road's surface anda drum fell down. The drum's contents spilled
onto the road's surface on the premises.
Countermeasures
・Drums are fixed to the mast of forklifts using
bands in order to prevent them from falling.
・The recessed part of the road's surface has
been repaired.

Complaints from neighboring residents, and responses
There were no complaints or requests from neighboring residents ofplants in FY2017.

Site name / Occurrence monthOccurrences of environmental accidents 3

Accident details

Although were no environmental accidents which could have affected
outside our premises in 2017, there were emergency situations on thepremises (Please refer to the right) We will deploy information sharing
measures horizontally to prevent disruption of neighbourhood residents
and people who are involved with regulatory authorities.

A hose which is put into the upper opening
part on the 1t container where acrylic
emulsion-based cleaning liquid is collected
was removed due to wind, and the liquidconsequently spilled onto the road surface
and nearby ditch. (It occurred while the hose
was under repair, and a thin temporary hose
was used as a replacement)

Jimokuji Plant / February 2018

Countermeasures
・Renewed the hose with a hard one

38

AICA Group CSR Report 2018

A base to support AICA: Environment

Use of LCA 1
We have introduced and now using life cycle assessment (LCA.)
Melamine laminated sheets, our main product, is an environmentallyfriendly product which generates a lower amount of CO 2 emissions
compared to artificial marble or PVC steel plates. Furthermore, ourlaminated sheet related products are highly durable, making themenvironmentally-friendly as they have a long life cycle.
We use the LCA of the product to evaluate which category has thehighest CO2 emissions (evaluation for Scope 3 P.35 ) among thecompany's lines of business.

1 Concept diagram of life cycle assessment (LCA)
EnergyIN
Collect / Purify

Input of natural
resources

Raw materials

Manufacturing

Waste
AICA
products

Shipment / Use

OUT
CO 2 and other materials thatplace a burden on theenvironment

Environmental accounting
Environmental accounting has two objectives.
The first objective is for us to use it as an in-house management
tool to achieve maximum effects with minimum cost, by achieving aquantitative understanding of the cost accounted for by environmental
conservation activities and of the effects of environmental measures.
The second objective is for us to use it as a tool for external
communication, in order to become a company that is trusted bysociety as an “environmentally-friendly company,” by actively publishingand disclosing information on AICA Kogyo's environmental initiatives.
On the basis of the above concept, our company has been releasing
environmental accounting reports since the second half of FY1999,
prompted by the publication of guidelines for understanding andreleasing environmental conservation costs by the Ministry ofEnvironment in March 1999.

Basic thinking for calculations
Target term
April 01, 2017 to March 31, 2018
Scope of calculation
All AICA Group production bases in Japan(including a part of sales bases)
Calculation standards for environmental
conservation costs● Capital investment:
Calculate the amount of capital investment
related to environmental conservation in
the fiscal year. In cases where a part of theinvestment is carried over to the following
fiscal year, only the current term is to be
added.
● Expenses:
Labor costs
Calculated in every department by multiplying
the time required for environmental
conservation activities by the annual averagehourly wage.
Depreciation costs
Equipment related to environmental
conservation activities which was obtained
after April 1, 1997 is subject to depreciation.
It is calculated by the same method as infinancial accounting in our company.
Other costs
Calculated according to the categories in the
FY2005 version of the guidelines issued by
the Ministry of the Environment.

39

AICA GroupA base to support AICA

Environmental conservation costs(Million yen)
Capital investment amount
Category

Details of main activities

Previous Current Year-on- Previous Current Year-onterm
term
year
term
term
year

Environmental conservation costs required tosuppress environmental burdens which arise within
business areas as a result of production/service
activities (In-business-area costs)

Breakdown(1)

Expenses

152

224

147%

526

527

100%

① Pollution control costs- Management of air pollutant emissions such as
boilers- Factory wastewater treatment management andwater quality management- Leak prevention control for raw materials/products,
and enhancement of facilities- Stopping vehicle idling, and limiting the operation of
forklifts at night

43

116

270%

121

120

99%

② Global environment conservation costs- Adoption of energy-saving equipment andconstruction work for converting to the use of inverters- Promotion of energy saving through the improvementof product efficiency

103

100

97%

115

116

101%

③ Resource circulation costs- Thermal recycling using resource collection boilers- Promotion of resource recycling through sorted
collection

6

8

133%

290

291

100%

0

0

—

13

14

108%

Costs incurred in suppressing environmental burdens(2) which occur in upstream or downstream as a result of - Promotion of green procurement
production/service activities (Up/downstream costs)
Environmental conservation costs in management(3)
activities (Management activity costs)- Preparation of CSR Report 2017
- Survey of materials contained in products, andresponse to the need for reporting- Education in Environment ISO study meetings andmorning meetings

1

4

400%

114

131

115%

Environmental conservation costs in research and(4) development activities(Research and development costs)- Consideration and development of a manufacturing
and filling methods for improving the yield rate during
production- Support for development, and increased sales ofenvironmentally-friendly products and AS products- Consideration and development of specifications that
help make the separation of waste after being used bycustomers easier

26

19

73%

510

548

107%

(5)

Environmental conservation costs in social activities(Social activity costs)

Costs arising from environmental conservation
activities (volunteer activities)

0

0

—

0

0

—

(6)

Costs incurred in responding to environmental
damage (Environmental damage costs)

Payment of a levy on pollution burdens

0

0

—

1

1

100%

(7) Other costs
Total environmental conservation costs

0

0

—

1

0

—

179

247

138%

1,165

1,221

105%

Effects of environmental conservation
Effects of environmental conservation
Previous term
Current term

Year-on-year

Total energy input

1,179 TJ

1,221 TJ

91%

Material input

272,091 t

257,770 t

93%

2,514,000 m3

2,241,000 m3

89%

39,822 t

42,232 t

106%

411 t

2,195 t534%*

54,656 t-CO2

56,552 t-CO2

103%

69 t

69 t

99.5%

Details of effects(1)

Environmental conservation effects which arise within
business areas (In-business-area effects)

Water consumption
Amount of waste
Environmental conservation effects related to(2) environmental loads and waste discharged from businessactivities (main items)(3)

Amount of waste disposed of in landfill
CO2 emissions
Amount of discharged and transferred
PRTR law-controlled substances

Environmental conservation effects related to goods andservices produced from business activities(4) Other environmental conservation effects* The amount of product processing powder in AICA-Tech Kenzai is increasing significantly because the recycling of industrial waste disposal is changing to landfill disposal.

Economic benefits of environmental conservation measures(Million yen)Previous term

AmountCurrent term

Energy-saving effects of heat recovery

155

197

Effects of recycling

17

14

82%

Effects of improved logistics efficiency

79

80

101%

251

291

116%

Details of effects

Total economic benefits

Year-on-year

127%

40

AICA Group CSR Report 2018

A base to support AICA: Stakeholder relations

We specify that “observing laws and regulations and the social order, and implementing fair and transparent
compliance management” and “communication with stakeholders” are important as a company that is broadly
trusted by society and in a management policy. Under the banner of our basic policies, we disclose company
information fairly and timely to all stakeholders based on the operating policy.

Relations with customers
Voluntary code of conduct in relation to product safety
We strongly believe that “the most important issue in quality
management is to deliver safe and reliable products to customers.”
To put this idea into practice, we have established a voluntary code of
conduct on product safety, and we disclose information and strive tosecure product safety.

Basic principle of voluntary code of
conduct on product safety[1] Adherence to laws and regulations[2] Initiatives to secure product safety[3] Responses to product accidents

Response to customers 1. 2

Voluntary code of conduct for product safety

The number of inquiries received by the Inquiry Center in FY2017 has
been on the increase year after year. There have been 77,355 cases (anincrease by 117% compared to the previous year).
Customers pointed out that it is difficult to connect to customer
service representatives as a response in customer satisfaction surveys.
As a measure to address the issue, we have introduced a “call centersystem” since April 2018. Using the system has improved reception
efficiency of staff and has improved the response rate from 74% to90%. We not only receive questions regarding reception contents, butalso make appropriate product suggestions, etc. By doing so, we are
striving for improvement of proposal skills so that we are more useful tocustomers.
We have further expanded business contents since May, and havetentatively started business activities by means of “telemarketing” forthe West of Japan. We carry out sales calls from each office according
to requests, and strengthen a system where we can respond to avariety of needs from customers.

You can see further details on the AICA website.
http://www.aica.co.jp/company/
environ/principle/

Transitions in the number of inquiries

1 received by the Inquiry Center(Cases)77,35580,00066,08560,00040,00050,80040,78243,30920,000
0
2013

2014

2015

2016

2017
(FY)

Value Chain collaboration 3
There are those who run “shops” and “construction shops” asstakeholders on the Value Chain. In order to build a strong networkwith these stakeholders, we will establish an “AICA Distributors'
Organization” as an organization of “companies which mainly deal in
AICA products” (encompassing sales aspects). Additionally, we will
strive to share sales and product strategies, and encourage healthy
communication among shops. In aspects regarding construction,
we will establish a “meeting for various construction shops” set as
an organization of “companies which have responsibilities related
to the construction of AICA products,” and engage in information
sharing related to improvement of construction quality, and productimprovement/development.

2 Response rate by means of the Inquiry Center
FY2016FY2017

74% 90%3 East of Japan AICA Distributors' Organization in 2018

Image of a company policy briefing meeting41

AICA GroupA base to support AICA

Customer satisfaction surveys 4
We have been conducting customer satisfaction surveys continuously
since 2002, in order to measure the level of satisfaction by hearing
from stakeholders (customers). The 16th survey was conducted in
FY2017, and we asked main agents and users in each segment and“architects and designers” to participate.
The questions have a simple configuration so that measures caneasily be taken from the survey results. We have eliminated the
response of “unable to say either way”, and evaluate the question
content through a four-level evaluation system of “satisfied (5 points),”“mostly satisfied (4 points),” “a little unsatisfied (2 points),” and“unsatisfied (1 point)” so that questions can be answered clearly. The
response method was changed to via website, so response rate of thistime has significantly been improved to 83%.
In many items, the score became raised compared to the previous
survey, but some items still maintain at low score. We will continue totake measures to improve and strive to receive higher evaluations.

4 Summary of customer satisfaction surveys

Evaluations
for products

2 years ago

Previous year

This year

Quality

4.29

4.24

4.31

Delivery times

3.86

3.83

3.95

Pricing

3.48

3.48

3.64

Product strength

4.19

4.21

4.29

Product knowledge/ proposal skills

4.18

4.12

4.29

Responsiveness

4.03

4.07

4.16

Number of visits /visiting manners

4.55

4.59

4.60

Response tocomplaints

4.19

4.22

4.25

Homepage

3.91

3.94

4.07

Average score

4.08

4.08

4.17

Evaluations
for businessactivities* Maximum score: 5 for each item
Number of valid responses to the survey: 555 companies (of which 227 companies are membersof the AICA Distributors' Organization)
Survey period: January 2018

AICA Seminar in Contemporary Architecture
We have been committed to contributing to the improvementand development of architectural culture through the provision oftrustworthy products.
One of the initiatives we have been working on in order to aim
at further contributions is the organization of the “AICA Seminar inContemporary Architecture.” It was started in 1983, in which we invite
famous architects from Japan and overseas to talk about a wide rangeof themes, such as housing, and environmental and urban problems.
The seminar is free, and a wide variety of people, from architects tostudents and members of the general public participate.
We will invite Hiroshi Naito, and hold the 64th AICA Seminar inContemporary Architecture with the theme “Architectural aesthetics inthe turning period” in October and November 2018.

42

AICA Group CSR Report 2018

A base to support AICA: Stakeholder relations

Relations with the supply chain
We think it is essential that stakeholders understand and cooperatewith us in order to achieve CSR (corporate social responsibility) that
AICA Group should assume.
In procurement activities, we take responsible actions as one of AICA
Group companies, promote the cooperation of business partners, andencourage CSR activities.
Based on this way of thinking, we significantly revised a conventional
procurement policy, and developed an “AICA Group CSR Procurement
Guideline” in June 2017. We will notify suppliers to consent to thisguideline, implement questionnaires regarding CSR, put an actual
condition survey into practice, and carry out on-site surveys by meansof our employees as when necessary. When matters where corrections
are required come to light, we will provide guidance and support tothe suppliers. We have conducted on-site surveys in five companies
as of September 2018. After having interviews about the responsecontents of questionnaires, we gave guidance regarding matters where
corrections were required. We will continue to aim to improve mutual
levels by maintaining communication with suppliers in the future.
When starting new transactions, we carry out research into business
partners, and make reevaluations on a regular basis

The basic principles of the AICA GroupCSR Procurement Guideline[1] Human rights[2] Safety and health[3] Environment[4] Fair transactions and ethics[5] Quality and safety[6] Information security[7] Social contribution

AICA Group CSR Procurement Guideline
You can see further details on the AICA website.
http://www.aica.co.jp/company/environ/

BCP (Business Continuity Plan) for stable supply
In order to ensure a stable stock supply when disasters and accidents
occur, we purchase main raw materials from multiple suppliers and bases,
and secure suppliers for material replacements.
With regard to our products, we take various measures by building a
production system in multiple bases, securing a standard level of stocketc.

Provision of product safety information 1・2
Concern over chemical substances continues to grow, as seen for
example, in the the amended Building Standards Act which was brought
into force, the revision of the standards for school environment sanitation,and regulations on chemical substances overseas.
We actively provide information as a manufacturer which handles
chemicals, and the number of cases where we received requests from
customers and provided safety information in FY 2017 is 1,376 and is still
increasing.
The breakdown of these requests were for surveys regarding chemical
substances specified by users in the value chain which accounted for
600 cases (44%,) or nearly half, and these were followed by mattersrelated to the submission of MSDS-Plus and chemSHERPA *1, to the EU’s
REACH Regulation (SVHC*2), to documents required by the Export Trade
Control Order, and to other matters. Through inquiries regarding laws andregulations established in each country, and by, for example, requesting
surveys and providing information regarding new chemical substances,
etc., we will respond promptly and appropriately by working together withthe relevant departments as a manufacturer.
*1: Communicating information about chemical substances contained in products*2: Abbreviation for Substances of Very High Concern. Substances specified as “substances to beapproved and registered” under article 57 of the EU's REACH Regulation.

43

in the number of cases for
1 Transitions
provision of product safety information (Cases)
1,500

1,293

1,154

1,250

1,316

1,376

2015

2016

2017

1,000
500
0
2013

2014

(FY)

Breakdown of provision of product2 safety information

FY2017

1,376
cases

■Company-specified
chemical
substances: 44%■MSDSplus: 11%■REACH SVHC: 10%■Export Trade Control
Order / Korea LOC: 11%■RoHS: 7%■Various regulations: 4%■VOC: 7%
■Registration of overseas
inventories: 2%■Questionnaires: 1%■Other: 3%

AICA GroupA base to support AICA

Relations with shareholders
Appropriate information disclosure and securing transparency 33 Various information disclosure documents

We disclose company information fairly to all stakeholders as acompany that is broadly trusted by society based on the operating
policy. We adhere to related laws and regulations such as theCompanies Act and Financial Instruments and Exchange Law andtimely disclosure rules stipulated by the Stock Exchange where
our stock is listed, and conduct information disclosure based on adisclosure policy.
With regard to information which does not come under the related
laws and regulations and timely disclosure regulations, we disclose
information which is regarded important for investment decisions ofshareholders and investors, after considering fairness and timeliness.

- Earnings briefings- Financial statements and quarterly
reports- A notice of a general meeting ofshareholders- Business report- Corporate governance report- Documents regarding settlement
briefing meetings

AICA website
http://www.aica.co.jp/company/ir/

Communication with shareholders and investors 4
We conduct active measures with a reasonable scope in order toachieve constructive communication with shareholders. Opinions
obtained through communication will be reported to the Board of
Directors and reflected in future management and IR activities.
In order to obtain an understanding and fair evaluation with regard to
our company, as well as shareholders meetings and social gatherings
after the meetings, we hold biannual settlement briefing meetings foranalysts and institutional investors, with the representative director asa speaker. The Public Relations / IR Group responds to applications
for individual meetings and telephone interviews. The information
disclosed in these is approved by the representative director anddirectors in charge beforehand.

Increased returns to shareholders 5
In order to achieve profit return for our shareholders and continuous
growth of the company, we distribute dividends by comprehensively
taking into consideration the consolidated performance for each term,
the payout ratio and retained earnings. In the current mid-term businessplan, “C&C 2000,” we will implement a performance-based return toshareholders with the target of a consolidated payout ratio of 50%.
On the basis of the basic policies, we distribute the midterm dividend
and the year-end dividend (twice a year.)With regard to the use of retained earnings, we will consider
investment efficiency from a long-term perspective, for example using
them preferentially for investments to enhance our future corporate
value, such as capital investments to expand existing core businesses
and M&A.

The number of individual communication

4 cases with institutional investors in 2017

140

cases

5 Dividend amount and payout ratio
(Yen)

103

120

50.2%

90
85

30.1%

60

27.6%

30

43

46

2014

2015

50.1%

(%)

60.0
50.2%
40.0

92

30.0

0

0
2016

Dividend (left axis)

2017

2018 [expected](FY)

Payout ratio (right axis)

6 JPX-Nikkei Index 400

Selected as one of the JPX-Nikkei Index 400 names 6
Our company's shares have been selected to be included in the“JPX-Nikkei Index 400,” a share price index developed by the Japan
Exchange Group/Tokyo Stock Exchange and Nikkei, for 5 consecutive
terms.

Selection for FY2013 to FY2017

44

AICA GroupA base to support AICA

AICA Group CSR Report 2018

A base to support AICA: Stakeholder relations

Community relations
AICA Group has bases in Japan and around the world.
The group cherishes connections with local communities
and is undertaking contribution activities.
Our production and sales bases clean up their local
neighborhood once a month. They also take part involunteer and contribution activities in cooperation withlocal organizations.
● Nagoya Plant (Kiyosu City, Aichi Prefecture)
Nagoya Plant takes part in environmental conservation
activities for nearby rivers. We participated in thefollowing activities this year.
Name of activity Number of participants from the company

Simultaneous cleanup activities for Shinkawa River andGojo River ①
Simultaneous cleanup activities for Shinkawa River andGojo River ②

85

Big spring cleanup at Fujimae Tidal Flat

10

Big fall cleanup at Fujimae Tidal Flat

8

● Isesaki Plant (Isesaki City, Gunma Prefecture)
In September 2017, we held a summer night festival
in joint cooperation with Showa Denko K.K. About 400
people gathered for the festival, including the employees
and their families of both companies, partner companies,
neighborhood residents, and more. The festival’s
entertainment included a performance of Yagibushi by alocal community group, which is a traditional folksong from
Gunma Prefecture, and it ended on high note.
AICA SDK Phenol Co., Ltd. (which was establishedt h r o u g h t h e t r a n s f e r o f S h o w a D e n k o ’s p h e n o lformaldehyde resin business to AICA in September 2015)
has been merged into AICA Kogyo Co., Ltd. in October
2017, and started operations as Isesaki Plant.
We will continue to hold the summer night festivals thathave been held as a tradition since the organization waspart of Showa Denko K.K.

Initiatives taken by group companies● Jimokuji Plant (Ama City, Aichi Prefecture)
Upon request from neighboring elementary schools, theplant has been organizing plant tours as part of social
education activities every year for the last10 years.
We welcomed15 pupils from Jimokuji Elementary
School, and an entire class of third-graders from Jimokuji
Minami Elementary School, and showed them ourmanufacturing site.
● Fukushima Plant (Iwase County, Fukushima Prefecture)
Fukushima Plant
is a member of the
Sukagawa Iwase
Infrastructure Recovery
and Decontamination
Group, a non-profit
organization, and isundertaking activities with the subsidies granted to thoseaffected by the Great East Japan Earthquake.
We not only aim to reconstruct the company’s business
operations but also intend to make greater use of thesubsidies to contribute to the community.
As a member of the group, we took part for the firsttime last year in the “Joint Cleaning Mission,” a cleanup
activity at Midorigaoka Park in Sukagawa City which is
conducted by a local volunteer group every year.
● Hiroshima Plant (Mihara City, Hiroshima Prefecture)
The plant participated in a night-time disasterprevention patrol led by the Mihara City Crime Prevention
Association. We have taken part in the patrol every
year for over 15 years, and have contributed to thecommunity’s crime prevention activities.
45● AICA-Tech Kenzai Co., Ltd., Akeno Plant (Chikusei
City, Ibaraki Prefecture)● AICA-Tech Kenzai Co., Ltd., Nagoya Plant (Oharu
Town Ama County, Aichi Prefecture)
The two plants accept high school students forinternships. In FY2017, Nagoya Plant accepted twointerns (for two days), and Akeno Plant accepted threeinterns (for five days).
● P.T. AICA Indonesia (Indonesia)
The company accepts interns for three months uponrequests from local high schools. In 2017, five students
participated in the internship.
● AICA Asia Pacific Holding Pte. Ltd. (Singapore)
Employees of AICA Asia Pacific Holding Pte. Ltd. and its
subsidiary AICA Singapore Pte. Ltd. took part in cleanup
activities at Jurong Lake as part of an environmental
preservation program. Jurong Lake, which is located inwestern Singapore, is a famous spot for tourists, and an
oasis for the local citizens of Singapore. 25 employees
cleaned up the lake while enjoying the greenery in thesurrounding area, and collected 38 kg trash in total.

Third Party Opinion

Anticipating evolution to a comprehensive report
where it is possible to see into developments

Hiromitsu Kumetani
President and CEO of theNord Institute for Society
and Environment
Representative of theWorkers Club for Ecoharmonic Renewable
Society

In preparation for writing this column for a third party opinion, I sat in on the firstsession of the annual meeting for the materiality review. This year’s report is still titledthe same as last year’s, but its content has greatly evolved.
First and foremost, the structure has changed. While last year’s report was structured
in line with the seven core themes of the ISO 26000, this year’s report’s underlying
theme is the materiality of AICA Group as a whole. The opening introduction of thegroup concerning its financial highlights, too, shows the history of AICA Group andthe changes within its business field, including changes in its sales composition withconcrete numbers. The report was easy to understand, and focused on ESG investment.
The message from the President states that the company’s aim is to become an entitythat develops in a sustainable way through enhancing its initiatives in ESG. It explains
the C&C 2000 and AICA 10 Years Vision, along with mid-term management plans, inconcrete terms. Their details are certainly conscious of the total strategic developmentof CSR and the company's management. AICA aims to pursue both economic value
and social value, and both financial goals and non-financial goals, and its Virtuous
Cycle Model is the prime representation of these values.
Within the explanations of two business that AICA Group is involved in, each specificproduct category has an explanation of the social value as well as technological valuethat they offer. The diagram of “The strength of AICA” in “Sustaining growth of domestic
core business through the enhancement of AS products” (which is listed first in the“three driving forces for growth”,) gives us a glimpse of AICA Group’s value creation
process.
Viewing this all-inclusively, I can say that this report is steadily evolving from a CSR
report to a comprehensive report.
Although we cannot see in detail for ourselves since there is no comparison chart to
the GRI standards, the area of disclosure covers an extensive range of information, and
it is highly comprehensive. There are also some honest disclosures regarding negative
information, including website defacement due to unauthorized access of the group’s
website, car accidents, and environmental accidents.
The tasks that point towards becoming a comprehensive report include explaining
AICA Group’s value creation process in a way that is easier to understand, and setting
KPIs that provide insight into mid-to long-term future developments. The group has
established materiality and corresponding KPIs in each area—business infrastructure,human resources, environment, and stakeholders—which is integrated into the “AICA
10-year Vision” of this report. These are set on the basis of a forecast as of FY2017.
What will be required is setting future-oriented KPIs that will lead innovation in mid- andlong-term periods. It is an ideal for AICA Group to first set an ambitious goal for its KPIs
for the fiscal year ending March 2027, which is a goal year of the “AICA 10-year Vision,”and then set KPIs for each year, backcasting the progress to achieve this said goal.
As the evaluation of performance in FY2017 shows, the group did not achieve somegoals, including reduction of overtime working hours, reduction of the frequency rate ofindustrial accidents, sales of AS products, and promotion of responsible care. I expect
the group to take strategic actions for improvement in these areas and set an ambitious
goal for the fiscal year ending in March 2027, referring to the goals and targets under
the SDGs which are associated with materiality for each factor.

Our response to the Third Party Opinion
We are fully aware of the necessity of setting ambitious
goals for the fiscal year ending in March 2027 with reference
to the goals and targets set under the SDGs for integrating
the CSR with company management. For the goals thatwere not achieved in FY2017 in terms of materiality, we
will fully investigate the reasons why we could not achievethem, and take appropriate actions.
46Giving Back to the Earth through Technology

Head Office Location JP Tower Nagoya, 26F, 1-1-1 Meieki, Nakamura-Ku, Nagoya, Aichi, 450-6326, Japan
TEL: (052)533-3131
URL / http://www. aica.co.jp/

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