目次

CONTENTSCSR Management
Social Dialogue

Prioritization of Safety

Our Initiatives to Ensure the Appropriate andTimely Disclosure of Corporation Information andBidirectional Communication with Stakeholders

Basic Policy for Workplace Safety,
Health, Security and Disaster Prevention

P65

Accident Frequency Rates; Safety Assurance Activities
Undertaken at Each Business Site

P65

Occupational Safety and Health Management System;
Securing Transportation Safety

P66

Products and Technologies
Denka Group Solutions Aimed at Addressing
Issues Relevant to SDGs

P67

Examples of Our R&D Accomplishments

P68

Properly Managing Product Safety andQuality while Continuously Improving the
Quality Assurance Level

P69

Response to the Conflict Minerals Issue

P70

Stepping Up Partnerships with SupplyChains;
Questionnaires with Regard to CSR Procurement

P70

Corporate Governance:
Corporate Conduct Deserving Trust
Improving Corporate Governance

P71

Maintaining Strict Compliance with Laws,
Regulations and Corporate Ethics

P72

Information Security Management

P73

Employee Happiness

P89

Site Reports
Omi Plant

P90

Omuta Plant

P90

Chiba Plant

P91

Shibukawa Plant

P91

Ofuna Plant
Isesaki Plant
Denka Innovation Center

P92
P92
P93

Denka Singapore Merbau Plant

P93

Denka Singapore Seraya Plant

P94

Denka Advantech Tuas Plant

P94

Denka Advantech South Plant

P95

Denka Advanced Materials Vietnam

P95

Denka Construction Solutions Malaysia

P96

Denka Advanced Materials (Suzhou)

P96

Denka Chemicals Development Suzhou

P97

Helping Women Earn Career Success;Status of Work-Life Balance

P74

Denka Inorganic Materials (Tianjin)

P97

Special Feature 4: Dialogue―Promoting Diversity
as a Key Management Strategy

P75

Denka Electronics Materials Dalian

P98

Denka Performance Elastomer

P98

Icon Genetics

P99

Denka Polymer

P99

Denka Seiken

P100

CRK

P100

Hinode Kagaku Kogyo

P101

Denka Azumin

P101

Kyusyu Plastic Industry

P102

Environmental Preservation
Sixth Medium-Term Environmental Plan;
P79
Responsible Care (RC) Activity Policies (environment related)
Promoting Climate Change Countermeasures

P80

Prevention of Air, Water, Soil and Other
Environmental Pollution

P80

The Denka Group’s Policies regarding andAccomplishments in Biodiversity Protection

P80

Initiatives in Electric Power Generation; Power Sources;
Omi Plant Minami Substation

P81

The Utilization of Government Subsidies
Related to the Environment and Energy

P82

Cement Production-Related Recycling
Business

P83

Environmental Accounting

P85

Overview of Environmental Impacts;
Environment Performance Data

P85

61 Denka Report 2018 PDF edition

Bodies in charge of tackling materiality issues

CSR Promotion Structure
Denka has established a CSR promotion structure inwhich the CSR & Corporate Communications Department
and other specialized bodies act in collaboration to
spearhead CSR activities undertaken by all Group
members. In addition, each body and department
supervises initiatives in such areas as worksite safety andResponsible Care and is striving to achieve systematic
improvements in its area of responsibility. Meanwhile,
the Management Committee, chaired by the president, isin charge of discussing CSR materiality issues as well as
deliberating plans for and reviewing the results of eachactivity associated with CSR. Conclusions reached by thecommittee are reported to the Board of Directors.

Safety Measures Headquarters (chaired by President)

Board of Directors

Responsible Care (RC) Committee (chaired by CTO)
Product Liability (PL) Committee (chaired by CTO)Management Committee

CSR Procurement Committee(chaired by an officer in charge of procurement)(chaired by President)

Discusses materiality issues anddecides policies, strategies and plans
with regard to such issues

Ethics Committee (chaired by President)

CSR & Corporate
Communications
Dept.

Risk Management Committee (chaired by President)
Security Export Control Committee (chaired by President)

CCO(Chief Compliance Officer)

Administrative Dept. (information regarding
governance and shareholder relations)

Facilitates across-the-board efforts
to ensure strict compliance

HR Dept. (information regarding
labor relations and human rights protection)
Legal Dept. (information regarding compliance)
Investor Relations Dept./CSR & Corporate Communications
Dept. (information regarding communication with society)

Five business divisions

Material Issue Selection Process
STEP 1

Determine issues subject to analysis and evaluation

Established an across-the-board taskforce and identiﬁed the issues to be tackled to fulﬁll society s expectations
regarding chemical companies in reference to international standards as well as important guidelines(GRI guidelines, ISO26000, GC, SDGs, EICC and DJSI).

STEP 2Analyze stakeholder expectations

Departments at Denka in charge of each issue evaluated the expectations of stakeholders, including customers,
consumers, employees, local communities, shareholders, investors and suppliers, with regard to such issues and theirimpact on our operations based on its own analysis.
STEP 3

Departments in charge of each issue assessed the importance of theissue in light of the implementation of the Denka Value-Upmanagement plan, which aims to realize The Denka Value corporate
philosophy and secure sound and sustainable corporate growth, as wellas the fulﬁllment of Denka s social responsibilities, thereby validating
said assessment in tandem with the Corporate Planning Department.
STEP 4

Materiality Matrix for
the Denka Group s CSR Issues

Assess each issue s importance to the Denka Group

Select CSR materiality

Selected 32 CSR issues, applying a material matrix based on theimportance of said issues to stakeholders and the Denka Group, with
13 items being identiﬁed as particularly critical by the Management
Committee, which, in turn, validated and ﬁnalized each.

High
Importance to stakeholders

CSR Management

By adhering to The Denka Value,
our corporate philosophy,
we will fulfill our social responsibilities
and thereby contribute to
the sustainable development of society.

13 critical items

High
Importance to Denka

Denka Report 2018 PDF edition

62

CSR Management
CSR Management

CSR Promotion Challenges, Targets and Performance (fiscal 2017)
A: Achieved significant results B: Observed some results C: No results were observed D: The level of activity deteriorated

Category

CSR Materiality Issues

Prioritizationof safety

・Reinforce security and disasterprevention measures
・Maintain occupational safety
and health while creating
a vibrant and comfortableworkplace environment

Results

Pages

・Experienced one major occupational accident (Omuta Plant); investigated its causes andimplemented measures to prevent recurrences
・Reorganized issues the Company is now confronting in terms of process safety, occupationalsafety and risk assessments
・Implemented facility improvement aimed at mitigating intrinsic danger, with the number ofmachining-related occupational accidents decreasing

pp. 23-24
pp. 65-66

Research &Development
Dept.
New Business
Planning &Development
Dept.

・Promote R&D process reforms
・Develop a global R&D network

・Promoted open innovation
・Stepped up life innovation research・Created new businesses involving external collaboration
・Augmented the function of the New Business Creation Team while stepping up scenario
planning

pp. 37-38
p. 68

Corporate
Planning Dept.
Each Business
Div.

・Develop next-generation technologies, create
new businesses and cultivate markets for
new products・Step up the development and marketing of
eco-friendly products

・Obtained U.S. FDA 510k clearance for a reagent for measuring sd LDL-C・Engaged in marketing aimed at meeting growing needs associated with car electronics andautonomous driving systems
・Introduced a new grade of acetylene black for high-capacity batteriesp. 5-8p. 16
p. 34
pp. 39-52
pp. 67-68

Production& ProcessTechnology Dept.

・Maintain sustained growth by significantly
enhancing productivity through innovative
processes

・Formulated an action plan for production process reforms, with the aim of improving laborproductivity by a factor of two or more

p. 34
p. 37

Quality
Assurance Dept.

・Enhance our quality management andassurance level

・Enhanced our quality assurance level, with the number of complaints decreasing 8% year on
year (359 in fiscal 2015; 326 in fiscal 2016; 298 in fiscal 2017)
・Secured conformity with the latest version of ISO 9001 and 14001
・Developed a management system in conformity with the IATF 16949 standard for the
automotive industry
・Strengthened the design review process in the course of R&D

p. 49
p. 69

Ensure transportation safety

Logistics Dept.

・Achieve continuous improvement throughcollaboration between departments in chargeof logistics management as well as Environment
and Safety departments at Head Office andeach business base・Secure safety of loading and unloading
operations
・Enhance our ability to handle transportation
accidents

・Staff from the Logistics Dept. visited the Omi, Omuta, Shibukawa plants and the Bibai
Subplant as well as Denka Azumin and Kyusyu Plastic Industry and conducted safety
inspection patrols

p. 66

Ensure that our corporate
philosophy is embraced byevery employee and transform
our corporate culture

Corporate
Planning Dept.

・Establish the Denka Value-Up management
plan・Established the Denka Value-Up management plan while ensuring that the plan’s goals areshared by all employees

pp. 9-14
pp. 33-34

Improve corporate governance

Administrative
Dept.

・Improve corporate governance・ Established the Management Advisory Committee, with all outside directors and all outside
members of the Audit & Supervisory Board as well as the Chairman and President serving ascommittee members・ Introduced share-based compensation for internal directors
・ Analyzed and assessed the effectiveness of the Board of Directors’ operations, withassessment results being externally disclosed

pp. 27-32
pp. 71-72

Legal Dept.

・Maintain strict compliance while stepping
up compliance education
・Conduct more robust operational audits・Upgraded the existing hotline system・Conducted operational audits of cement-related subsidiaries
・Implemented employee education associated with internal control (risk management, etc.)

pp. 72-73

HR Dept.

・ S ecure more foreign student recruits andstep up long-term training programs in Japan・ P rovide ongoing workplace experience
programs for young people while engaging
in community contribution activities

・ Implemented special educational programs for trainers
・ Hired seven foreign nationals as specialists(15% of all specialists hired in April 2017)
・ New recruits participated in volunteer activities as part of training
curriculums

pp. 21-22
p. 34
p. 74

HR Dept.

・A chieve our target for the proportion of
women among newly hired specialists (20% ormore in fiscal 2017) as well as our target forthe proportion of female managers across all
managerial positions (5% by fiscal 2025)・P rovide female workers with training programs,
such as those aimed at assisting in their careerdevelopment

・ Hired 12 women as specialists (28% of all specialists hired in April 2017)
・ Held workshops for female employees on a total of 16 occasions・ Conducted diversity management training for general managers on three occasions
・ Planned and organized training sessions in which employees are provided with careerdevelopment assistance

pp. 21-22
p. 74

HR Dept.

・F acilitate the utilization of annual paid leave・ Implement comprehensive countermeasures
to address mental health issues

・ Designated two dates on which employees are encouraged to take annual paid leave, withthe average number of days of annual paid leave utilized per employee totaling 10.5
・ Implemented stress checks in accordance with government-sponsored standards (thenumber of respondents: 2,087 employees via web-based surveys and 2,367 employees via
paper-based questionnaires), with industrial physicians conducting face-to-face interviews
with employees in excessively stressful situations

p. 34
p. 38
p. 74

Environment
and Saftey
Dept.

・ Achieve the goals of the Sixth MediumTerm Environmental Plan (the continuous
reduction of industrial waste)・ Sell recycling waste and promote waste
utilization in ways that complement theexhaustive scrutiny of every cost element
・ Systematically operate wastewater treatment
facilities while assessing water usage status・ Reduce emissions of chlorofluorocarbons(step up the management and renewal of
air conditioning, refrigeration and freezing
equipment)・ Implemented the Sixth Medium-Term Environmental Plan
(setting the final year at fiscal 2018)
・ Received an “A-” rating in the CDP Climate Change Report 2017
・ Promoted the construction of new hydroelectric power plants

pp. 17-20
pp. 79-88

Promote climate change
countermeasures (curbglobal warming, reduce GHG
emissions and adapt to climatechanges)

Electric Power
Dept.

・A
 chieve the goals of the Sixth MediumTerm Environmental Plan (global warming
countermeasures)・P romote global warming countermeasuresthrough the provision of energy-saving andother technological solutions while exploring
new themes・ Implemented the Sixth Medium-Term Environmental Plan (fiscal 2017 results)
1) Energy consumption intensity: 0.96 compared with the fiscal 2015 level (target: 0.96)
2) CO2 emissions intensity: 0.95 compared with the fiscal 2015 level (target: 0.97)
Achieved targets thanks to the effect of an increase in hydroelectric power generation
capacities and improved processes in place at each plant・ Promoted the construction of new hydroelectric power plants (New Omigawa and New
Himekawa No. 6)

pp. 17-20
p. 79
p. 81
pp. 85-86

Maintain appropriate andtimely disclosure of corporate
information and establish
bidirectional communications

CSR & Corporate
Communications
Dept.
Investor
Relations Dept.
AdministrativeDept.

・ Maintain robust communications with
communities around business sites while
contributing to the revitalization of local
society・ Implement volunteer activities to meet needs
in disaster-stricken areas・ Promoted the disclosure of ESG-related corporate information
・ Implemented volunteer activities to assist those living in disaster-stricken areas・ Prepared an integrated report

p. 2
pp. 15-16
pp. 25-26
p. 62
p. 89

Ensure product safety

RatingD

Experienced a major
accident

B

Developed a structure
for promoting the new
management plan

B

Developed a structure
for promoting the new
management planA

Formulated an action
plan and put in place
concrete measures

B

The number ofcomplaints decreased

B

Made progress in efforts
to secure logistics safety
as planned

Nurture human resources

Embrace diversity andoffer equal opportunities

Help strike a work-lifebalance and promote
employee healthPrevent air, water, soil andother environmental pollution
Environmental
preservation

63 Denka Report 2018 PDF edition

Major challenges and goals in fiscal 2018
and beyond・Reduce the number of major accidents and disasters to zero・Continually improve the occupational safety record (Conduct
risk identification aimed at preventing major accidents;
mitigate the intrinsic danger of our operations; promote
ongoing initiatives to prevent accidents attributable tounsafe behaviors; and create a lively and sound workplace )・Research process reforms on three fronts (themes,
information and human resources)
・Obtain “missing parts” while raising employee awareness of
the Group’s new business creation efforts
・Enhance the efficiency of our open innovation initiatives
・Help popularize the use of the reagent for measuring sd
LDL-C in health checkups
・Cultivate new markets for automotive-related products
・Expand our resource recycling capacities to accept waste
as raw materials and fuels
・Employ big data to detect signs of facility failure and control
product quality while introducing robotics
・Nurture human resources; pass down technological heritage
to future generations; and overhaul in-house educational
systems
・Promote ongoing efforts to acquire the IATF 16949 standard
certification
・Review in-house rules related to quality
・Provide employee education using job level-based training
programs

・Hold meetings in which representatives from each Denka
plant, transportation subcontractors and other chemical
manufacturers exchange insights while organizing tours of
their facilities
・Proactively incorporate external perspectives to raise safety
awarenessA

Developed a structure
for promoting the new
management plan andput in place concretemeasuresA

Made progress in efforts
to improve governanceA

Maintain strict compliance withlaws, regulations and corporate
ethicsDialogue withsociety /Partnership

Targets
・Reduce the number of major accidents anddisasters to zero・Continually improve the occupational safety
record (Step up hazard prediction systems;
steadily execute facility improvement
projects related to safety countermeasures;and create a lively and sound workplace)

Products andtechnologies

Employeehappiness

Provide solutions

Fiscal 2017
Relevantdept(s).
Environment
andSafety Dept.

Create new products andtechnologies that contribute tosound social development

Corporate
governance /Corporate
conduct
deservingstakeholder
trust

Relevant SDGs
Fulfill manufacturers’
responsibilities

Made progress in efforts
to enhance internal
control via the review
of compliance-related
systemsB

Steadily carried out
various initiatives asplannedB

Steadily carried out
various initiatives asplanned

B

The number of daysof annual paid leave
utilized increased

C

Failed to meet thetargets associated with
PRTR substancesA

Achieved the targets

A

Issued the integrated
report・ Help business divisions specialize their businesses・ Promote production, R&D and operational process reforms
(Launch working groups serving the aforementioned goals)

・ Discuss and implement measures to ensure even morerobust corporate governance and thus secure thetransparency and soundness of management

・ Step up risk management associated with internal control
・ Enhance the effectiveness of the hotline system・ Apply IT to improve internal auditing methods
・ Create an even more transparent employee evaluation
system to augment our foundation for human resource
development
・ Formulate and implement human resource development
programs to nurture those equipped with specialized skills
・ Step up training for managers to help enhance their
management and leadership skills
・ Revise the classification of job categories
・ Consider establishing an in-house job posting system and afree agent (FA) system to encourage employees to take on
more challenging missions
・ Implement training sessions in which employees areprovided with career development assistance・ Facilitate the utilization of annual paid leave and, to thisend, designate dates on which employees are encouraged
to take annual paid leave while entitling each employee toanniversary leave・ Formulate the Seventh Medium-Term Environmental Plan
spanning fiscal 2019 to 2021
・ Establish SBTs (Science-Based Targets), including those
focused on total GHG emissions・ Secure responsiveness to the CDP (Water) disclosure
scheme・ Establish an in-house certification system for eco-products・ Achieve the goals of the Sixth Medium-Term Environmental
Plan (global warming countermeasures)・ Promote global warming countermeasures through theprovision of energy-saving and other technological solutions
while exploring new themes・ Promote disclosure of ESG-related corporate information
based on KPIs
・ F ormulate basic policies on CSR activities and policies
regarding social contribution
・ Continue issuing the integrated report

Denka Report 2018 PDF edition

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Denka’s CSR Materiality Issue 1

Prioritization of Safety

Prioritization of Safety❸ Vietnam: Fire Drills
Annual fire drills are carried out under the guidance ofthe municipal fire department

Occupational Safety and HealthManagement System“Prioritizing safety to help realize Denka Value Up and build a brighter
future!” Under this slogan, we hold the annual Safety Promotion Meeting,conduct a one-day inspection and discuss safety assurance activities
undertaken at each business site.

Basic Policy for Workplace Safety,
Health, Security and Disaster Prevention
We put the utmost priority on worksite safety andhealth, facility security and disaster prevention in
all aspects of our business activities.
To fulfill our social responsibilities as a chemicalcompany, we put the utmost priority on safety as ourbasic stance for operations, thereby working together
to create a lively and sound workplace and becoming acompany capable of eliminating accidents and disasters
and worthy of society’s trust.

Safety Assurance Activities
Undertaken at Each Business Site
❶ Chiba Plant: A Comprehensive Emergency Drill(September 26, 2017)
Held a comprehensive emergency drill on the plant’s
premises in tandem with the local municipal fire
department as well as a joint fire brigade put together
by companies based in the same industrial complex❹ Dalian: An In-House Award Program for
Employee Proposals via the Near-Miss
Reporting Scheme
Taking a bottom-up approach to risk assessment

Chair of the Safety Measures Headquarters (President & CEO)

Accident Frequency Rates*1
Subcontractors

1.20

Denka

Maintain Occupational Safety and
Health while Creating a Vibrant andComfortable Workplace Environment

Industry average(JCIA members, excluding their subcontractors)

Denka conducts risk assessments to monitor the
degree of risk at each plant. Based on assessment
results, we comprehensively manage risks andimplement improvements.
The status of certification acquisition from external
institutions is as in the following table. Although theplants and affiliates that are not listed below may
have not acquired certification for their occupationalsafety and health management systems, said businesssites nevertheless implement safety management andpromotion activities equivalent to those prescribed by acertified system.
Occupational Safety and Health Management System
Plant Name

Certification
SystemCertification
NumberAcquisition
Date

Chiba Plant

OHSAS18001

3444817

February 6,
2007

Omi Plant

OSHMS

10-15-6

March 8,2010

DSPL Seraya
Plant

OHSAS18001

SNG6011133

January 23,
2011

1.00
0.80
0.60
0.40

❷ Tianjin: A Tag for Safety Assurance Advocate

0.20

Each week a member of staff is passed the tag,that is, they take their turn serving as that week’s
advocate for safety assurance activities, helping toraise the awareness of colleagues of the importanceof maintaining the zero-accident status and fostering a
sense of responsibility.

0.00

2010

2011

2012

2013

2014

2015

2016 2017（CY）

Reference: Number of Occupational Accidents at Subcontractors*2
No absence

Absence1045Manufacturing

10
6

6

3

2015

2016

1

6
1
2

1

2017（FY）

Construction

5

5
4

0

Loading /unloading

0

1

2015

4

2

2016

2017（FY）*1 Calculated on a calendar year basis in accordance with the instructionof the Labour Standards Inspection Office and JCIA guidelines.
*2 Number is calculated on a fiscal year basis.

65 Denka Report 2018 PDF edition

Initiatives Undertaken on the Production Frontlines in Line with the Aforementioned Basic Policy

Securing Transportation Safety
In addition to preventing accidents and unfortunate incidents in the course of logistics operations, we
focus on maintaining safety awareness among employees in charge of transportation. To this end, our fiscal
2017 initiatives included safety patrols undertaken by staff from the logistics departments of Denka’s Omi,
Omuta and Shibukawa plants and the Bibai Subplant as well as their peers from two affiliates Denka Azumin
and Kyusyu Plastic Industry. These patrols were proven successful in terms of raising safety awareness.
In fiscal 2018, we will continue to promote safety assurance activities associated with logistics operations
by inviting representatives from transportation subcontractors and other chemical manufacturers to jointly
organize facility tours. In this way, we will incorporate external perspectives and exchange insights on
logistics safety while helping employees constantly refresh their consciousness on safety operations.
In line with the Denka Value-Up management plan, which took over the previous Denka100 management
plan, we will constantly scrutinize every cost element under the new growth strategies in addition to placing
the utmost priority on logistics safety. By doing so, we will establish a more efficient logistics structure.

Denka Report 2018 PDF edition

66

Denka’s CSR Materiality Issue 2

Products and Technologies

Products and Technologies

We will continue to take on
the challenge of expanding

Examples of Our R&D Accomplishments

the possibilities of chemistry❶ Promoting Open Innovation

to create new value andWith the 2014 opening of the renovated Denka Innovation Center, the number of external collaboration
projects increased significantly. In fiscal 2017, we engaged in 274 such projects, an increase of 14 projects
from fiscal 2016. To create new businesses and products targeting future generations of potential customers,
we have proactively promoted open innovation in a way that utilizes a variety of pipelines, including thosesecured by top management. As part of in-house collaboration, we also began holding across-the-board
meetings on polymer processing. These periodic meetings help relevant employees exchange insights whilebuilding a more robust structure for polymer manufacturing and processing.

contribute to sound social
development.

300

Creating New Products and Technologies
That Contribute to the Development of a
Sustainable Society
Denka Group Solutions Aimed at Addressing
Issues Relevant to SDGs

FieldsDenka’s key solutions

Healthcare・V accines and diagnostic reagents for infectious diseases•D iagnostic reagents for lifestyle-related diseases• C ancer remedy information services employing genealteration analysis

The environment andenergy・ H eat dissipating circuit substrates supporting energysaving technologies• T hermally conductive materials and other thermal
solution products for electronics components• A cetylene black that is used as a conductive aid inlithium-ion secondary cells to help promote the use ofclean energy

High-value-added infrastructure(Various public facilities supporting
industries, traffic and communication:
rolling stock, roads, ports, waterworks
and sewage systems, dams, power andcommunication infrastructure, etc.)

67 Denka Report 2018 PDF edition・ Cement and special cement additives that help build
robust and environment-friendly infrastructure• S pecial cement additives and other civil engineeringsolutions capable of contributing to the effective
maintenance and repair of aged structures and buildings• Construction and civil engineering materials, including
underground drainpipes

Number of Collaboration Projects

Government-academia

Industry

300

250

250

200

200

150

150

100

100

50

50

0

In 2015, the United Nations adopted “Transforming
Our World: The 2030 Agenda for Sustainable
Development,” identifying 17 Sustainable Development
Goals (SDGs) and 169 targets. These SDGs are designed
to address universal issues confronting society, withall UN members and stakeholders being called to join
initiatives to achieve them.
Focusing its management resources on healthcare,the environment and energy, and high-value-added
infrastructure, the Denka Group is aware of the factthat a number of social issues that lie in these fields arealso identified by SDGs. Therefore, Denka will maintain
acute awareness of what the Company should do tohelp achieve SDGs, thereby pursuing the possibilities ofchemistry to provide solutions to address these goals.

Overseas

2013

2014

2015

2016

2017（FY）

0

Overseas

2013

Government-academia

2014

2015

Number of Partners

Industry

2016

2017（FY）❷ Stepping Up Life Innovation Research
Since the launch of Denka Life Innovation Research (DLIR) Private Limited (Singapore) in February 2017, wehave been focused on smoothly pushing ahead with and properly managing progress in our R&D activities.
To this end, we hold periodic video conferences between researchers while convening bimonthly face-to-facemeetings aimed at discussing research themes. Also, the verification of POCT solutions and influenza vaccines
is under way at DLIR, with its diagnostic reagent group evaluating the effectiveness of gene-based diagnostic
test kits for detecting tropical disease infections and its vaccine group evaluating that of influenza vaccines
created via the application of magnICON technology to produce HA antigens. DLIR is also striving to increase
synergies with Denka Seiken by formulating joint action plans. Other initiatives undertaken by DLIR include
surveys on peripheral needs and potential technologies in the fields of POCT diagnostic reagents and cancer
diagnosis with the aim of developing new healthcare-related businesses. Also included are ongoing surveys
aimed at identifying next-generation diagnostic technologies and other promising technologies that can beused for such applications as the detection of tropical infectious diseases.
Primary SDGs

Goal 3
GOOD HEALTH AND WELL-BEING

Goal 7
AFFORDABLE AND CLEAN ENERGY
Goal 11SUSTAINABLE CITIES AND COMMUNITIES
Goal 13
CLIMATE ACTION
Goal 6
CLEAN WATER AND SANITATION
Goal 9INDUSTRY, INNOVATION AND INFRASTRUCTURE
Goal 11SUSTAINABLE CITIES AND COMMUNITIES❸ Strengthening Our R&D Capabilities and Progress Management
Young researchers engage in collaboration with potential customers
In addition to maintaining technological interaction between young researchers and their external peers,
Denka encourages these researchers to be flexible in their pursuit of collaborative research to identify
unconventional R&D themes that, in turn, may lead to the creation of new businesses. This approach is
expected to yield the added benefit of helping researchers embrace independent-mindedness and achieve
personal growth. In fiscal 2017, three external partners were involved in this kind of collaboration.
Nurturing the next-generation of R&D specialists
The Denka Innovation Center held workshops to explore new themes.
Avoiding any particular insistence on certain materials, we promote initiatives aimed at encouraging researchers,
ranging from new recruits to those working at Denka for 10 years, to bring fresh ideas and employ flexible waysof thinking to the identification of new themes and creation of new businesses and solutions.
Helping promising researchers pursue overseas studies and obtain diploma from leading educational institutions
A researcher has been dispatched from the Denka Innovation Center’s Advanced Technologies Research Instituteto the University of California, San Diego, to engage in research into next-generation sodium ion secondary
batteries, completing studies spanning a period from July 2015 to September 2017 as a visiting researcher.
We are proactively helping our researchers to pursue studies at leading educational institutions at home andabroad and to obtain diplomas, including Ph.D.’s. Currently, six people are studying at the graduate school of anational university in Japan to complete the doctoral course.

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Denka’s CSR Materiality Issue 2

Products and Technologies
Products and Technologies

Properly Managing Product Safety andQuality while Continuously Improving the
Quality Assurance Level

Product Safety Management
1. Verify the Safety of Raw Materials and Required
Quality Level and Engage in Production Process Design
We select and use raw materials for which safety canbe verified while developing products that conform withcustomer and legal demands. We establish production
processes that ensure consistent quality and thus trustin the products we develop.

2. Green Procurement and Purchasing Specifications
We ensure that we purchase only raw materials that
do not contain chemical substances prohibited underJapanese and international regulations. At the same time,
we purchase and use raw materials based on purchasing
specifications that delineate the required characteristics.
Consequently, we are striving to manufacture superior
products from quality raw materials and production
processes.

8. Displaying Yellow Cards and Yellow Card Container
LabelsWe require drivers to carry yellow cards that explain
post-accident procedures. We also label containers toensure swift and proper remediation. We regularly informdrivers of our requirements and conduct emergency
drills.

9. Safety Data Sheets (SDS)
We produce these sheets for all products to ensure
proper handling according to physical and chemicalhazards and health and environmental risks. The sheets
inform customers and help educate employees. We also
disseminate information on environmentally hazardous
substances contained in our products to customers
through chemSHERPA-CI/AI, which supplements chemical
substance information conveyed on SDS sheets.

Flowchart
1. Development
Verify raw material safety and required quality level
Production process design

3. Outsourced Raw
Material Production

3 & 5. Manufacturing Vendor Audits
We market products whose manufacturing processes
are partially or entirely outsourced. We regularly audit
manufacturing vendors based on our in-house standards
for quality, logistics, environmental management andproduct safety.

4. Maintain/Improve Environmental Protection and Quality
We are undertaking environmental and quality
management operations; gradually expanding the scopeof our efforts to include new products; and working tomaintain and improve quality, environmental protection
and safety.

6. Waste Contractor Audits
We commission waste contractors in line with the
Waste Management and Public Cleansing Law, requiringthem to issue manifests and confirm collection. We
regularly evaluate the operations and financial positionsof these vendors and visit their waste processing sites.

7. Management of Environmentally Hazardous
Substances in Products
Based on in-house guidelines for the managementof chemical substances used in our products, we areproperly managing substances that are potentiallyhazardous to human health and the environment inaccordance with relevant legal regulations. At the sametime, we are taking steps to ensure product quality andsafety while reducing environmental load by placing
restrictions on usage during the raw material phase andby decreasing the residual volume of harmful substancesin our products. Upon customer request, we analyze andreport the amount of residual substances harmful to theenvironment contained within products.

69 Denka Report 2018 PDF edition

2. Raw Materials
Green procurement
Purchasing speciﬁcations

Vendor audits

4. Production
ISO 14001, ISO 9001 and Good Manufacturing Practices (GMP)

5. Outsourced Processing
and Production
Vendor audits

6. Disposal
7. Products

Waste contractor audits

Management of environmentally hazardous substances(Guidelines for the management of chemical substances)

8. Logistics
Yellow cards Container labels*

9. Customers
Safety data sheets (SDS) chemSHERPA-CI/AI*The Japan Chemical Industry Association created a labeling format to augment
the Yellow Card system. The labels present emergency guideline numbers
and United Nations identification numbers for different chemicals transported
simultaneously in relatively small amounts on the same vehicle. The labels aid in
the proper handling of these chemicals in emergencies.

The Number of Major Product-Related
Incidents and Failures to Meet Customer
Requirements
Since April 2016, we have experienced no productliability-related problems or major quality issues, such asserious client complaints or product recalls due to criticalproduct defects. Moreover, the number of complaints
registered in fiscal 2017 was down approximately 8%
year on year, a continuation of the declining trend wehave seen over the last several years (359 in fiscal 2015;
326 in fiscal 2016; and 298 in fiscal 2017).

Customer Satisfaction Surveys
We collect a broad range of customer feedback,including complaints, requests and opinions, to assesscustomer satisfaction with regard to our quality
management initiatives. Moreover, the Electronics &Innovative Products and Living & Environment Products
divisions periodically send out questionnaires to identify
the level of customer satisfaction. Such actions help
these divisions improve the quality of their products
in a way that takes heed of customers’ voices. Thanks
to such efforts, in April 2017 DENKA HITTPLATE waschosen by Toyota Motor Corporation’s Hirose Plant toreceive an Excellent Quality Award. Looking ahead, we
will pay close attention to what customers say about our
products and continually pursue higher product quality.

Introducing a System for Handling
Customer Complaints
In May 2014, we introduced a system for handlingcustomer complaints on a Companywide basis.
Employing a centralized database that contains suchinformation as the content of customer complaints, our
responses and steps taken to prevent recurrences as wellas the verification of steps taken, the system is helping usconfirm the status of each complaint on a real-time basis,
thereby speeding up information sharing and response
time. Moreover, we analyze the database to further
enhance product quality and customer satisfaction.
By addressing all negative customer feedback, including
complaints, we are doing our best to accommodate
requests for even greater product quality.

Response to the Conflict Minerals Issue
In the United States, listed companies are obliged toreport on transactions involving and the use of conflictminerals to the Securities and Exchange Commission(SEC) in accordance with the Dodd-Frank Wall Street
Reform and Consumer Protection Act enacted in July2010 and rules issued by the SEC in August 2012.
Although Denka is not subject to this legislation, theCompany considers it a social responsibility to follow
suit. With this in mind, we undertake tracking surveys
when requested by customers to affirm that our products
are conflict mineral free.

Stepping Up Partnerships with Supply
ChainsIn order for Denka to implement its management
plan, maintaining robust supply chains is a matter ofimportance. We are well aware of the need to ensurethat neither the sell-side or buy-side constituents of a
supply chain is forced to accept conditions detrimental
to their business, which would damage our favorable
relationship with them and eventually cause trouble forend customers. With this in mind, Denka strives to build
strategic partnerships with its suppliers while facilitating
their understanding of its CSR Procurement Policies andGuidelines. To make our supply chains even stronger, in
fiscal 2017 we paid visits to approximately 60 suppliers
to engage in face-to-face dialogue.

Questionnaires with Regard to CSR
Procurement
In fiscal 2017, Denka sent out questionnaires to the
top 80% of its suppliers (in terms of transaction value)
to confirm their policies on and the status of their CSR
activities. Most of the recipients responded and theresults suggested that more than 80% of respondents
undertake CSR activities, including measures aimed atensuring operational safety and strict compliance.
Going forward, we will expand the scope of ourquestionnaires while facilitating mutual understanding
through in-depth dialogue. In these ways, we will step up
CSR activities in tandem with supply chains.

Primary Items Featured in Suppliers’ CSR Policies
Note: Figures in parentheses represent the proportion out of 10
of respondents responding affirmatively with regard to having inplace CSR policies addressing the matters listed below.
Respect for basic human rights 9.5
10

Stance against antisocial forces
9.5

8
6

Social contribution
8.4

4

Safety assurance
measures9

Legal and regulatorycompliance
9.4

2
0

Risk management
7.7

Prevention of unlawful
corporate conduct
8

Environmental preservation
8.4

Initiatives to fulﬁllsocial responsibilities
8.9
Promotion of CSR initiatives 6.8

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70

Denka’s CSR Materiality Issue 3
Corporate Governance: Corporate Conduct Deserving Trust

Corporate Governance: Corporate Conduct Deserving Trust
On the other hand, fiscal 2017 self-evaluation identified the needto optimize time allocation at Board meetings to facilitate in-depth
discussion of strategies for both the entire Group and individual
businesses. These findings also suggested that internal and outside
directors must share an accurate understanding of Denka’s short-,
medium- and long-term business strategies.
Looking ahead, we will act on these inputs and enhance theeffectiveness of the Board of Directors’ operations so that it
contributes to medium- to long-term growth in Denka’s corporate
value.

We are committed to maintaining the soundness and transparency of management
as we aim to enhance our corporate value and secure sustainable growth.

Improving Corporate GovernanceAnalyzation and Evaluation of the Effectiveness of
the Board of Directors(1) Method of Evaluation
Following last year, the Company analyzed and evaluated theeffectiveness of the Board of Directors by having individual
Directors and Audit & Supervisory Board Members to complete
the “Self Evaluation Questionnaire,” which covers items related
to the effectiveness of the Board of Directors, such as scale,composition, operation, and 20 other items, and discussing thequestionnaire results at Board of Directors meetings.
(2) Summary of Evaluation Results and Future Efforts
The Company reaffirmed that discussion was reinvigorated at theBoard of Directors by ensuring an appropriate Board size andcomposition (in terms of getting the right balance of expertise,
experience, ability and diversity) and an appropriate meeting
frequency and duration, as well as through various initiatives todeepen the understanding of Outside Officers of the Company,
including prior explanations of agenda items, enabling them tomake proactive contributions at the Board of Directors meetings.

In addition, in the area of the Denka Group’s overall businessstrategy as pertains to the last year evaluation, in considerationof the views indicating that further improvement of the role of
the Board of Directors may be achieved if the Board of Directors
secures adequate time for discussion, including information
provision and prior explanations, such that appropriate
management and supervision may be implemented, we reaffirmedthat we conducted constructive and adequate discussions
informed by a wide range of opinion and advice from Outside
Officers with regard to the new management plan “Denka ValueUp” through the Management Advisory Committee, which is avoluntary committee comprising all Outside Directors, all Outside
Audit & Supervisory Board Members, the Chairman and thePresident to foster transparency and objectivity in management
decision-making, and prior explanations, etc.
At the same time, opinions were submitted that in order to further
deepen discussions regarding the overall business strategy of theGroup and individual business strategy, it is important to review
the time allocation of the Board of Directors and for outside andinternal officers to share medium- and long-term and short-termbusiness strategies.
In consideration of these constructive opinions, the Board of
Directors will work for the improved effectiveness of the Board toincrease medium- and long-term corporate value.

Standards of Independence for Outside Officers　　　　　　The standard of independence for an Outside Director or Outside Audit & Supervisory Board Member of the Company shallbe persons that do not fall under any of the categories defined in items (1) through (5) below.
(1) An executor of business (*4) at a main customer (*1), main supplier (*2), or main lender (*3) that is a main trading partner of the Company;(2) A consultant, accountant, lawyer, or other such person that has received money or other property exceeding ¥10 million in value per year from theCompany, excluding officer compensation, in the most recent fiscal year;(3) A person belonging to a group for whom the amount paid by the Company makes up 2% or more of the group’s revenues or total income in themost recent fiscal year, in cases where the entity receiving property under item (2) above is a group;

Internal Control Systems
Internal Auditing Department
As the organization independent from other business units
that monitors the business operations of the whole company,
the Internal Auditing Department conducts audits of allorganizations and operating companies within the Group.
In fiscal 2017, the department conducted operational
theme audits aimed at examining the status of occupationalsafety and quality management at each plant and cement
distribution facility as well as compliance audits of subsidiaries
handling cement products around Japan. In addition, thedepartment provided managers of business units across theCompany with practical case studies，
taken from these auditsof the above-listed business sites, as part of educationalsessions focused on internal control systems. Thanks to these
activities, including practical case studies, we were able tohelp individual managers confirm their roles and significancein the internal control systems and raise their awareness ofinternal control.
In fiscal 2018, we are striving to increase the volume
and quality of our audits assessing operational risks andmanagement risks. By doing so, we will realize even more
solid corporate governance, which is a requisite for “Sustained
Growth” and “Sound Growth,” two objectives identified
in our threefold growth vision under the Denka Value-Upmanagement plan. Specifically, our audits are aimed atensuring comprehensive examinations of the managementof the assets and risks in each Group company and thestatus of legal compliance and business operations. In theseways, we are striving to identify risk and issues that may haveotherwise been overlooked and examine each operational
process to assess its effectiveness and appropriateness. Issues
identified through audits are communicated to business units
subject to auditing to encourage spontaneous efforts to make
improvements. Furthermore, we share these issues with otherdepartments as necessary, as we expect them to contribute
their ideas to devise solutions and mutually help their peers
improve the value of their respective business units.

(4) A person that has fallen under any of the above categories (1) through (3) within the past year;(5) A spouse or relation within the second degree of a person falling under any of the categories below (excluding an insignificant person):i.

 A person that falls under any of the above categories (1) through (4);ii.

A person that is or was an executor of business at the Company or a subsidiary of theCompany now or within the past year;iii.

A person that is or was a non-executive director at the Company or a subsidiary of the Company now or within the past year (for Outside
Audit & Supervisory Board Members only).

(*1)Main customer: A customer from whom the amount paid has made up 2% or more of the Company’s revenues in the most recent fiscal year(*2) M ain supplier: A supplier to whom the amount paid from the Company has made up 2% or more of the supplier’s revenues in the mostrecent fiscal year(*3) M ain lender: A lender that was essential for the Company’s funding, and that the Company relied on to the extent the lender was
irreplaceable, as of the end of the most recent fiscal year(*4) Executor of business: An executive director, executive, executive officer, or other employee, etc.

71 Denka Report 2018 PDF edition

Our Structure for Screening Contracts
As we aim to ensure that each Group company maintains
fair and impartial conduct in the course of transactions
with customers, suppliers and other business partners,
we believe that the screening of contracts is essential.
This screening must carefully examine contractual terms
and conditions from a legal perspective and in light of ouroperational objectives. To that end, Denka is developingan overarching intranet system serving as an end-to-end
management tool that updates the status of contracts,
including those undergoing pre-signing screening by the

Legal Department and those that have already been signed,
as well as the whereabouts of each contract paper. In
addition to providing relevant individuals with an easy-touse interface, this system is expected to help them realize
the earlier detection of contractual risks requiring attention
and address such risks in a more efficient manner.

Maintaining Strict Compliance with Laws,
Regulations and Corporate Ethics
Our Stance against Corruption and Antisocial Forces
The Denka Group Ethics Policy prohibits employees fromengaging in bribery or other illegal activities as well as fromproviding or receiving entertainment or gifts of excessive
value or the nature of which violates social norms. We
send out periodic alerts reminding employees to takeparticular heed of the prohibition against bribery whenengaged in transactions overseas or trying to penetrate
into new market areas. We intend to also implement such
employee education at overseas subsidiaries. In addition,
our subsidiaries in Singapore have in place even more
stringent in-house rules regarding gifts and entertainment
in line with the country’s legal standards. All Group
employees are strictly prohibited from acting in any way
to benefit antisocial forces, and we ensure that every
business contract incorporates a clause requiring theseverance of any relationship with such entities.

Security Trade Control
Current international regulations on trade aim to preventthe proliferation of weapons of mass destruction byprohibiting exports of products and technologies that could
help the development and manufacture of such weapons.
In line with this, the Denka Group Ethics Policy requires
adherence to Japan’s Foreign Exchange and Foreign Trade
Act, the Export Trade Control Order and other related
regulations as well as the Company’s in-house rules on
security trade control. Reflecting this, our initiatives aimed
at ensuring security trade control include internal audits,
participation in external seminars and product classification
as well as end-use and end-user verification.

Protection of Intellectual Property Rights
The protection of intellectual property (IP) rights is
becoming ever more important in terms of compliance.
With this in mind, we are implementing the following key
initiatives on an ongoing basis.
First, we continually strive to ensure patent clearance. In
addition to respecting the IP rights held by other companies,
we carry out periodic patent clearance searches to ensurethat our products cause no infringement of such rights while
sharing search results throughout our organization.
Second, we continually improve employee education. In
addition to providing our researchers with education on
patent application, our initiatives include annual training
sessions themed on the protection of IP rights, targeting
personnel at sales, corporate planning and administrative
departments. We are thus endeavoring to raise employees’compliance awareness regarding the protection of IP rights.

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72

Denka’s CSR Materiality Issue 3

Corporate Governance: Corporate Conduct Deserving Trust

Denka’s CSR Materiality Issue 4

Employee HappinessPrevention of Insider Trading

Structure of Information Management Rules

In recent years, the incidence of insider trading andillegal use or leakage of privileged information has
increased. In response, Japan’s Securities and Exchange
Surveillance Commission is stepping up efforts aimed at
cracking down on such illegal activities. In line with its inhouse rules regarding the control of insider informationand prevention of insider trading, Denka prohibits
information leakage while requiring employees in certain
positions to submit prior notice when they engage in thesale or purchase of stocks. Also, such sales and purchases
are uniformly banned during the two weeks before thedate of financial results announcement.
Looking ahead, we will strive to disseminate these rules
via the Company’s intranet and other media, thereby
helping to ensure the appropriate control of informationand the prevention of insider trading.

Fair Trade
In line with the stipulations of the Denka Group Ethics
Policy requiring adherence to competition laws (e.g., theantimonopoly laws), we are holding in-house compliancetraining sessions and seminars while conducting internal
audits with the aim of facilitating employee understandingof relevant issues and ensuring even stricter compliance.
Thanks to these and similar efforts, Denka has not been
charged with any violation of competition laws since 1993
in Japan and 2002 overseas. As we aim to remain in thisstatus, we are stepping up such initiatives as employee
education aimed at ensuring compliance with fair trade andcompetition laws.
The Number of Incidents Reported via
the Compliance Hotline System
2013

2014

2015

2016

2017

2

2

1

4

4

Denka Group Ethics Policy
Code of Speciﬁc behavior
Safe Management of Personal Information/
Conﬁdential Information Management and Respect for Intellectual Property Rights
Subordinate regulations
Personal Privacy Policy and Regulation
for Protecting Information regarding Corporate Secrets

73 Denka Report 2018 PDF edition

environment in which all employees stayDetailed rules for all oﬃcers and employees
Rules regarding the Use of the Information System

healthy while working vigorously.

② I nformation System Management and theProtection of Electronic Data

To ensure the safe and efficient management and operationof its information systems, Denka established the Information
System Management Guidelines and the Information System
Work Manual as subordinate rules under the Regulation forProtecting Information regarding Corporate Secrets.
As we aim to enforce robust measures aimed at protecting
our electronic data, we utilize external secured data centers
to operate our servers, disc devices and other equipment
constituting our system platform. Moreover, we established astructure that links two data centers (located in the east andwest of Japan), each capable of supplementing the other’soperational capacity even if one site is struck by a wide-areadisaster like an earthquake or a tsunami, thereby securing
the continuity of system operations.
Well aware of the threat of malicious cyberattacks
employing increasingly sophisticated methodologies, we
implement vigorous countermeasures against intrusion into
our network and the theft of information from it, striving toensure the early detection of computer virus infections andother unauthorized activities.

Helping Women Earn Career Success
Every year, we strive to ensure the proportion of womenamong our newly hired specialists is 20% or more. In April
2017, 12, or 28%, of our newly hired specialists were women.
As our aim is to facilitate equal participation in businessof both genders, we have lengthened the period that thoseengaged in child rearing may opt for shorter working hours
while allowing employees to take half-day nursing care leaves
for tending to family members. This and other assistanceprograms have been introduced to help employees develop
lengthy careers even when they face the need to placestronger focus on family duties. Moreover, we have preparedand distributed Life in Denka, an in-house booklet aimed at
facilitating employees’ understanding of these programs.

FiscalFiscalFiscalFiscal

2015

2016

2017

1931

1931

1948

1,942

Overtime hours

100

104

122

130

Average number of days of paid leave utilized

9.05

9.56

9.65

10.48

Ratio of annual paid leave utilized

48%

50%

51%

55%

Number of employees who took childcare leave(Of which, male employees)

6
(0)

11
(0)

21
(0)

19
(0)

Number of employees who opt for shorter
working hours

5

13

10

11

Number of employees who utilize programs
aimed at assisting their child rearing by subsidizingchildcare facility and other fees

－

－

98

100

③ Lectures on Information Security

Number of employees who took nursing care leave

1

0

0

0

Denka provides newly hired employees with joint
training sessions themed on information security, utilizing
easy-to-understand videos to instill relevant in-house rules.
For mid-ranking and veteran employees, the Company
implements annual information system training sessions at
Headquarters, branches and plants, giving them lectureson these rules. In these ways, Denka ensures that all
employees are well-versed in information security rules
whether they are new recruits or veterans.

Number of employees who took half-day leaves
for nursing care leave

－

－

0

0

Number of employees who took volunteer
activity leave

0

0

0

0

Information System Management Structure

Total working hours

Chief Control Oﬃcer
Vice President

Provides assistanceDirectors in Charge

Chief control oﬃcer at each relevant department

General Managers

General administrator at each relevant department

Managers

Administrator at each section or area in charge

An informative handbook aimed at helping employees
strike a balance between nursing care and work

Status of Work-Life Balance (non-consolidated basis)
2014

Information Security Management

The Denka Group Ethics Policy encompasses guidelines
under the headings the Safe Management of Personal
Information/Confidential Information Management andRespect for Intellectual Property Rights, both of which
are strictly complied with. As subordinate regulations ofthese guidelines, Denka established and developed the
Personal Privacy Policy and the Regulation for Protecting
Information regarding Corporate Secrets.
The Company annually updates rules regarding theuse of the information system and posts these rules
on its intranet bulletin board with the aim of ensuringthat every officer and employee is well aware of “dosand don’ts” with regard to their usage of such systems.
Furthermore, Denka strictly manages and respectfully
handles confidential information provided by third
parties in accordance with the Denka Group Ethics
Policy.

efforts to create a sound workplace

Information System Management Guidelines/Information System Work Manual

President① Information Management Rules

We are proactively pushing ahead withManagement of information related to information system

Under the slogan “Your value is Denka’s value,” we compiled and distributed
this handbook to all employees (January 2018).

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Denka’s CSR Materiality Issue 4

Employee Happiness
Employee Happiness

Ms. Yoshie Komuro and Denka President Manabu Yamamoto
Engage in Dialogue
In line with the Denka Value-Up management plan, which we launched in April 2018,
we have identified diversity promotion and work style reforms as key factors supporting
the plan’s threefold growth vision. To discuss these factors,
President Manabu Yamamoto and Ms. Yoshie Komuro,President & CEO of Work-Life Balance Co., Ltd., engaged in a dialogue aimed at showcasing
Denka management’s commitment to promoting diversity
and outlining the Company’s future initiatives.

Promoting Diversity as a Key
Management Strategy
Personal experiences drove home
the realization that diversity is essential
Komuro: Looking back on your career, could you point
to a specific experience that significantly affected yourperspective on diversity?
Yamamoto: When my wife and I married, we had bothbeen working full-time for several years. We had
attended the same university, but her more impressive
academic achievements won her a well-paying
position at a foreign-capital bank after graduation.
So, back then, her salary was far higher than mine.
As a result, our total family income was pretty highfor our age. As soon as we had a child, however, ourlives changed drastically. Unfortunately, we were notable to ask our parents to help us out with childcare.
Furthermore, neither my wife’s nor my own workplace
offered more than minimal assistance programsfor employees raising children. We had a serious
discussion about how to deal with the difficulties we
faced, and my wife eventually decided to resign.

75 Denka Report 2018 PDF edition

Komuro: So, even for someone working at a foreigncapital bank, striking a balance between work andchildrearing was that difficult?
Yamamoto: Yes it was. After her resignation, our finances
suddenly became tight. Generally speaking, if you
are expecting a new family member, you want to
see your income going up, don’t you? Nevertheless,instead of securing income from two earners, we had
been forced to make a choice that ran contrary to ourneeds. The dissatisfaction with the circumstances wewere forced into has lingered ever since.
Komuro: However, I imagine that at that time, themajority of working men in Japan didn’t think toquestion the status quo did they?
Yamamoto: Perhaps not. In fact, at first I simply grumbled
that “Our life would be much easier if my wife werestill working.” It took me a long time to realize the true
significance of the loss my wife herself had to accept
in terms of missed career opportunities. Similarly, it
took a while for me to recognize that her resignation
also meant a loss to the industry of a valuable humanresource. Today, I clearly see the absurdity andconsequences of forcing women to choose between
having a career and having a family, but when it was
happening to us I had no such awareness.
Komuro: So, despite your negative experience, youthought that’s just the way it was.

Takeaways from observations ofGerman practices

Changing our corporate culture to better
adapt to the new reality

Komuro: Mr. Yamamoto, you’ve worked overseas. What
were your impressions regarding differences in theworking styles of a typical Japanese as opposed to aforeign businessperson?
Yamamoto: In 1989, when Japan’s bubble economy
was in full swing, I was transferred to Germany. That
was just a month after the collapse of the Berlin wall.
My office was in the former West German segment,
which had far older population than its East German
counterpart. Because of this, human resourceswere lacking and the presence of women in theworkplace was equally as strong as that of their malecounterparts.
Komuro: So, the norm was for women to play anequally important role in the workforce and they
were actually achieving robust careers as early as the
1990s?
Yamamoto: That’s right. I still recall seeing significant
numbers of female managers working in thepurchasing departments of Denka’s client companies.
I also met with a number of female researchers. On
numerous occasions I was amazed and impressed
to see people enjoying career success regardlessof gender. In addition, my German counterparts
hardly ever had to work overtime to complete theirtasks. That was what really inspired me during myassociation with Germans. Moreover, they took manydays off. German law stipulates that annual paid
leave granted to employees must be fully utilized
within a one-year cycle. No German corporations areallowed to covertly push employees to forgo theirrights of annual paid leave by, for example, offering
cash incentives.
Komuro: That’s different! Did you find it surprising?
Yamamoto: Yes indeed, I found it almost shocking.
Although German workers usually take summer
vacations that are a month or more long, this practicedoesn’t affect productivity. They were also extremely
good at maintaining a strong focus on work duringbusiness hours. Having seen the system at work,
I concluded that the secret behind Germany’s
economic success lies in its strategic emphasis onlabor efficiency.
Komuro: So, how did you feel about Japanese working
styles once you had returned from Germany?
Yamamoto: In contrast to Germany industry’s strong
economic position backed by the capabilities of its
human resources and efficient working styles, Japan’s
economic competitiveness is the simple result of
human wave tactics and unlimited overtime work.
That was my impression.
Komuro: I see. So these observations significantly
affected your views on diversity, helping you
recognize the need to realize an inclusive and diverse
workplace as well as to improve the efficiency ofwork styles in Japan, right?
Yamamoto: Yes, they did.

Komuro: In line with the “Denka Value-Up” management
plan, Denka has positioned diversity promotion andwork style reforms as key strategies. What was yourintention behind this positioning?
Yamamoto: Over the course of its century-long history,
Denka has been accumulating strengths in various
areas. We now boast a wealth of technologicalexpertise as well as a robust pool of humanresources. Although the strengths we have are worthyof being preserved, we must also embrace change
so that we can better adapt to the new reality of a
rapidly evolving and increasingly globalized market
environment. Going forward, we must differentiate
ourselves from competitors. We will otherwise beleft behind. All of us share a sense of urgency in thisregard. Moreover, we are acutely aware of the factthat the conventional, homogeneous organizationalmodel is rapidly becoming irrelevant in the face of theneed to accommodate wide-ranging customer needs
while looking to specialize our business portfolio.
That’s why we consider promoting workforce
diversity essential. We believe that human diversity
helps us enhance versatility and flexibility throughout
our organization.
Komuro: So the changing business environmentis prompting Denka to promote diversity as amanagement strategy.
Yamamoto: Exactly. Moreover, promoting diversity
also addresses our need to remedy a severe lackof human resources in non-metropolitan areas. At
our plants in Niigata, Kyushu and other regions, thescarcity of suitable human resources has becomea major obstacle to maintaining robust plant
operations. Moreover, given our aim of securing
people capable of contributing to the specializationof our businesses, adhering to an age-old recruitment
policy focused on maintaining a male-dominated,
full-time-only workforce no longer makes sense. We
are therefore concentrating on creating a workplaceenvironment that welcomes women, foreign
nationals, seniors, persons with disabilities and otherdiverse people and helps them realize their potential.
We believe that failing to do so would be critically
detrimental to our corporate growth.
Komuro: If a lack of human resources forces a company
to give up work that it could otherwise undertake,the loss of business opportunities could be significant,couldn’t it?
Yamamoto: That’s true. So, in addition to promoting
diversity as a management strategy, we would liketo make Denka an attractive employer for diverse
individuals who are either working at or seeking
careers with the Company.

How Denka promotes diversity
Komuro: Now, let’s move on to the details of how
Denka promotes diversity. Could you name any
specific initiatives now under way?
Yamamoto: First, we will keep our focus on recruiting

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Denka’s CSR Materiality Issue 4

Employee Happiness
Employee Happinessa certain number of female specialists and foreign
nationals every year. We will also build robust humanresource development programs and structures
through collaboration between the HR Department
and the business units to which they are assigned.
In these ways, we will help diverse human resources
achieve career success. That being said, we’ve only
just begun the aforementioned periodic recruitmentof female specialists, so currently there are but ahandful of management canditaes. Accordingly,
we will step up efforts to nurture female manager
candidates. Simultaneously, we will proactively hire
human resources with specialized skills. We expect
these initiatives to enhance our diversity.
Komuro: What are your views on diversity promotion
and work style reform initiatives at production sites?
Yamamoto: Historically, production sites havetypically been run by regimented male-dominatedorganizations optimized to handle often dangerous
unautomated tasks requiring brute strength andhard physical labor. Going forward, however, wemust ensure that women also play key roles in plant
operations and, to this end, review various aspects of
our worksites. For example, stair riser heights must
be re-designed in light of women’s average physicalbuild, so that they won’t have trouble going up anddown. The same applies to the installation of arm
rails. We may also have to review upper limits on theweight of cargo being manually loaded, with an eye
to how women are best used in loading and otherlogistics-related operations. Overall, what we’re trying
to do is to realize labor-saving operations.
At the same time, we need to standardize ouroperations and reduce dependence on the skillsof particular individuals by, for example, promoting
automation via the use of IoT, AI and robots.
Standardization and automation will ensure theuniform quality of operations and products while
facilitating quick and easy job handover and staff
education. In addition, we are considering drawing
up multilingual operational procedures as part of thisstandardization. We expect that promoting laborsaving, standardized operations will help us make ourworksites far more productive and safer.
Komuro: That means Denka’s working environment is
becoming friendlier to senior employees who chose
not to resign after reaching retirement age, doesn’t it?
Yamamoto: That’s right. I also note that physical build
and strength varies a lot between individuals; someare well-built and stronger while others are slighter. I
suspect that there may be some who feel their tasks
are a bit too physically taxing for them. Accordingly,
we must create an environment in which everyone
can work without excessive physical strain. I expect
this ideal to be shared by heads of plants, managers
and all other staff in the course of our pursuit ofdiversity and work style reforms.

Leaders are expected to serve as coaches
not commanders
Komuro: To promote the initiatives you’ve justmentioned, I suppose that enhancing communication

77 Denka Report 2018 PDF edition

within the workforce will be essential. Specifically,
managers will need to engage in in-depth, open
dialogue with staff members to know exactly what
worries and challenges they face. This will entailcoaching-based management, rather than theconventional top-down approach of simply issuingcommands. In doing so, managers will need toclosely listen to their staff and sincerely address thematters that concern them while encouraging them
to become self starters.
Yamamoto: I totally agree with you. I’ve long been
engaged in operations related to electronic materials,
an area where market conditions undergo frequent
drastic changes. What I’ve seen in the course of
my duties was that managers often rely on market
intelligence that has already become obsolete.
This renders one-sided top-down communication
quite ineffective. My thinking is that there should
be a bottom-up intelligence and insight gathering
mechanism or organizational culture. I became
painfully aware of the reality of this need through myown business experience.
Komuro: Then, could you tell me what roles managers
and leaders are expected to fulfill in such anorganization?
Yamamoto: I want managers and leaders to spearhead
our efforts to raise staff awareness with regard todiversity. Of course, the Company as a whole needs
to develop robust programs aimed at promoting
diversity, but I would also urge each of my colleagues
to have a sense of ownership regarding this matterand understand its importance. I want them to accept
differences, respect one another, and mutually help
develop each other’s potential. I believe this mindset
is essential to promoting diversity.
Komuro: About three years ago, a Google project
attracted the attention of the general public. In
this project, Google identified outstanding andmediocre teams within its organization and studied
them to determine what made them different.
The project’s initial hypothesis, that the presenceof well-experienced staff and large businesses
with major customers made the standout teams
highly productive, was contraindicated by the
results. Interestingly, the project concluded thatpsychological safety was the only defining factor
that all the standout teams had in equal measure.
Psychological safety means that a person always
feels safe to express his ideas and honestly sharewhat he really thinks without fear of negative
consequences, such as being subject to mockery. In
many Japanese corporations, however, employees
have become inured to a kind of a fear-based culturethat overemphasizes avoiding mistakes rather than
encouraging creative expression. Although suchan approach may once have made some sense,
corporations are now being called upon to shift
toward allowing employees to freely share diverse
ideas that may, in turn, help corporations reap greater
profits. Such a culture definitely requires ensuringthat workers feel safe. I would therefore suggest that
Denka fosters a psychologically safe organizational
culture by, for example, holding in-house dialogues

at each business unit to intentionally encourage
employees to get to know each other and freely
voice their opinions.

What everyone at Denka is expected to do
Komuro: Going forward, what do you expect Denka
employees to do in terms of diversity promotion?
Yamamoto: The Diversity Promotion Department hascoined the slogan “Your value is Denka’s value,”
which, incidentally, speaks to my expectations. I
would like each Denka staff member to review theirstrengths. You know, everyone has some goodqualities that can be recognized by those around
him or her. So, I encourage my colleagues to identify
theirs and proactively communicate their willingness
to contribute to the team in a way that best utilizes
their own strengths.
Komuro: I really like that slogan.
Yamamoto: Realizing innovation has become what’s
most important for today’s business corporations.
Innovation occurs mostly on the frontlines. Therefore,
I expect frontline workers to be confident in theirown potential, proactively voice their opinions andsuggest what they believe is worth trying, however
unconventional their ideas seem to be. Every single
input must be respectfully considered at Denka.
Moreover, management should ensure that every
employee is treated with due respect. I will strive to
make this part of Denka’s corporate culture, thereby
motivating staff to develop unique ideas.
Komuro: Innovation is often born out of the chemistryof different ideas coming together. In this light,
encouraging workers to nurture diverse opinions isessential. I feel that this brief slogan represents anaspiration to make innovation happen at Denka.
Yamamoto: Actually, the slogan itself was coined
employing a bottom-up approach, rather than a topdown approach, with staff members at the Diversity
Promotion Department taking the initiative. I hopethat Denka’s ideals are shared by all my colleagues
and inspire them to proactively speak up about
how to enhance their own competencies, boost thestrength of their teams and organizations, and pursue
corporate growth. I expect that these practices
will help everyone maximize their potential while
generating synergies, which, in turn, solidify thecomprehensive strengths of the Denka Group.

that promoting diversity is essential to this end. In
addition, I would like my colleagues to understandthat the success of diversity promotion also depends
on their commitment. Toward becoming a better andstronger company, I invite every Denka Group staff
member to work shoulder to shoulder.

Yoshie Komuro
President & CEO, Work-Life Balance Co., Ltd.
 amed “Nikkei Woman of the Year” in the2004 N
Career Create Category
2006 Founded Work-Life Balance Co., Ltd.
2012 Selected as a speaker at TEDxTokyo hosen by Japan Mothers Association2014 C
to receive the Best Mother Prize(Businesspeople Category)Having served more than 900 client companies

as a consultant, Ms. Komuro provides valuable
insights for striking an optimal work-life balance,
including tips for reducing working hours
and increasing the ratio of annual paid leave
utilized. Moreover, her consulting activities havehelped her clients yield such positive results
as improvements in business performanceand employee satisfaction while leading to arise in the number of staff members who go
on to start self-motivated learning or chose to
become working mothers. Ms. Komuro has thus
garnered a solid reputation for her ability to help
corporations break away from dependence on
excessive working hours and thus facilitate theirtransition to highly productive organizations.

Becoming an employer of choice for people
around the globe
Komuro: Lastly, do you have any words for employees?
Yamamoto: I would like to make Denka an employer ofchoice for people all around the globe, a company
whose employees are certain that choosing Denka
is their best decision. Furthermore, I would liketo help my colleagues around the world establish
their presence as contributors to the communities
around them and be appreciated by all the different
kinds of stakeholders. That’s my dream. Because ofthat, Denka needs to focus on improving the wellbeing of employees and their families, and I believe

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Denka’s CSR Materiality Issue 5

Environmental Preservation
As a chemical company, we are committed to preserving the global

environment through Responsible Care activities while pursuing manufacturing
operations that contribute to environmental conservation initiatives.

Sixth Medium-Term Environmental Plan
We are promoting systematic energy-saving initiatives
aimed at annually achieving a 1% improvement inboth energy consumption and CO2 emissions intensity
indices. Moreover, efforts are now under way tocontinuously reduce emissions of environmental load
substances by improving our production technologies
through such measures as the upgrading production
process and facilities.

Items

Energy consumption
intensity(fiscal 2015 base)*1

Fiscal 2016
Results

0.99

Fiscal 2017

Fiscal 2018

Targets

Results

Targets

0.96

0.96

0.96

Fiscal 2018 Responsible Care (RC)Activity Policies (environment related)
In line with the Responsible Care Global Charter, we
will engage in dialogue with stakeholders to accurately
assess society’s expectations in addition to maintaining
strict compliance and preventing environmental pollution.
As our goal is to contribute to environmental conservation
initiatives aimed at realizing a sustainable society, we
will promote RC activities in all aspects of our business
operations, ranging from raw materials procurement
through manufacturing and storage to distribution to
usage and disposal. In these ways, we will fulfill our social
responsibilities.

Priority Initiatives (environment related)①Global warming countermeasures

CO2 emissions intensity(from energy sources)*1 *2

CO2 emissions intensity(from energy sources:
fiscal 2015 base)*1 *2

1.18

1.00

1.13

0.97

1.12

0.95

1.12

0.95

83

73

75

71

Final landfill waste (tons)

119

123

88

111

*1 Standard calorific value of purchased energy has been set at 9.484 MJ/
kWh in accordance with Keidanren’s Commitment to a Low Carbon
Society; figures include energy consumption attributable to and CO 2
emissions from non-manufacturing sectors (Head Office, branches, etc.).
*2 CO2 emissions intensity is calculated based on the converted production
volume of benchmark products

Prevention of Air, Water, Soil and Other
Environmental Pollution

Our Response to the Revised Act for Rationalized
Use and Proper Management of Fluorocarbons

In addition to managing its GHG emissions, the Denka Group is
striving to control emissions of environmental load substances fromGroup facilities, including SOx and NOx from boilers and heating
furnaces as well as soot and dust and PRTR substances fromproduction lines.
We are committed to complying with relevant laws and nationaland municipal regulations and standards as well as upholding
pollution control agreements with local authorities. Also, we
continually strive to reduce our environmental footprint through theappropriate maintenance and management of our facilities and, tothis end, implement facility upgrades and periodic inspections. To see
data regarding each emission item, please see pages 85 to 88.
During fiscal 2017 we experienced no incidents or accidents with asignificant environmental impact.

In accordance with the Act for Rationalized Use andProper Management of Fluorocarbons (put into force
in April 2015), we are stepping up the management of
our freezing and air conditioning equipment that uses
fluorocarbons as refrigerants. With the revision of thisact, business operators are obliged to submit a report
to relevant authorities whenever their annual emissions
volume exceeds 1,000 t-CO2e.
Even though we have maintained our fluorocarbon
emissions below this limit (fiscal 2015: 812 t-CO2e; fiscal
2016: 448 t-CO2e; fiscal 2017: 440 t-CO2e), we will steadily
implement facility inspection and maintenance while
promoting the systematic renewal of such equipment,
replacing it with alternatives that use refrigerants with asmaller GWP (global warming potential). In this way, we
are working to make fundamental improvements.

Third-Party Verification of Denka’s GHG Emissions Data
The Denka Group has undergone a third-party
verification of its GHG emissions data. This verification
was undertaken by Bureau Veritas Co., Ltd. and wasintended to enhance the reliability of said GHG emissions
data through independent verification as part of initiatives
aimed at continuously stepping up the Denka Group’s
environmental management. For more details, please also
see the third-party verification report posted on Denka’s
corporate website.

【Period covered by the verification】

・Ensure the appropriate management and systematic
renewal of equipment that uses fluorocarbons in linewith relevant laws and regulations【Scope of the verification】

・P romote initiatives to improve yield ratios, sell
recyclable waste and otherwise utilize waste in waysthat complement the exhaustive scrutiny of eachbusiness base’s cost elements③Formulation of the Seventh Medium-Term
Environmental Plan・F ormulate a plan that aligns with the objectivesof the Denka Value-Up management plan and, tothis end, identify key performance indicators (KPIs)
associated with environmental management④Key themes for each business base・O mi Plant: Promote resource recycling in cement
production and reduce odor and BOD throughthe systematic improvement of facilities treating
wastewater from chloroprene production lines
・Chiba Plant: Systematically reduce VOC emissions

79 Denka Report 2018 PDF edition

Promoting Climate ChangeCountermeasures

・Commercialize energy-saving solutions at the earliest
possible date while exploring new themes②Continuous reduction in industrial waste

Emissions of PRTR
substances (tons)

Environmental Preservation

April 1, 2016 to March 31, 2017
❶Scope1 and 2 GHG emissions(CO2 emissions from energy and non-energy sources)
Business sites identified as sources of emissions underthese categories are as follows.
Denka’s six domestic production sites (Omi, Omuta, Chiba,
Shibukawa, Ofuna and Isesaki)❷Categories 1, 6 and 7 of the Scope3 GHG emissions
Items identified as sources of emissions under thesecategories are as follows.
・Category 1 (purchased goods and services)
Goods and services procured by six domestic production
sites (Omi, Omuta, Chiba, Shibukawa, Ofuna and Isesaki:
items that accounted for top 90% of procurementtransaction costs are included in calculation.
・Categories 6 (business travel) and 7 (employee commuting)Business travel and commuting by all employees at Denka.
【Verification report】
http://www.denka.co.jp/eng/news/pdf/20180323ghgvs.pdf

The Denka Group’s Policies regarding andAccomplishments in Biodiversity Protection
In recent years, the general public has voiced growing concernswith regard to environmental issues that significantly affectbiodiversity. These issues range widely from the pollution of rivers
and oceans, including the micro-plastic contamination of marine
environments, and coral bleaching to the extinction of wildlife species
and the equitable distribution of the benefits of biological genetic
resources.
With the Convention on Biological Diversity coming into effect in
1993, a growing number of businesses are striving to help realize
the UN’s Sustainable Development Goals and supporting otherinternational initiatives related to biodiversity.With this in mind,
Denka is constantly endeavoring to reduce environmental burdens
attributable to its production activities by working in collaboration
with the entities that comprise its supply chains. At the same time, theCompany gives due consideration to the preservation of biodiversity
and the natural environment when it is engaged in the constructionof hydroelectric power generation facilities and the developmentof mines. Moreover, Denka is focusing on the sustainable use ofresources throughout the course of the development and provisionof its products and services. In addition, the Company provides
environmental education on a regular basis to ensure that every
Group employee is acutely aware of the significance of biodiversity. In
these ways, we will step up corporate activities aimed at contributing
to a sustainable society.
Examples of concrete initiatives:①Conducting periodic surveys aimed at assessing the impact oflimestone mine development on ecosystems in neighboring areas②Engaging in the planting of Japanese evergreen oak and pin oak trees
to restore areas that have undergone mining to their original state③Developing a water treatment business via Group company Denka
Consultant & Engineering Co., Ltd. by employing its microorganism
handling technologies④Preserving Cephalanthera erecta and Cephalanthera falcata, bothof which are facing a growing threat of extinction and have been
designated as class II endangered species by the Tokyo Metropolitan
Government, on the premises of the Denka Innovation Center(Machida, Tokyo) and adjoining areas

Denka Report 2018 PDF edition

80

Denka’s CSR Materiality Issue 5

Environmental Preservation
Environmental Preservation

Initiatives in Electric Power Generation
Power Sources in Fiscal 2017

Hydroelectric
36%
Electricity purchased
44%

Total consumption

1.78 billion kWh
Thermal power(natural gas)
18%

Thermal power (heavy oil)
0%
Cement waste heat 2%

Scope of reporting: Six domestic plants directly managed by Denka, the Innovation Centerand other operational sectors (Head Oﬃce, branches, etc.)

Total maximum output of Denka’s in-house
power generation (as of June 2018)
Maximum
output(kW)

Facilities

Hydroelectric

Omigawa

3,300

Kotakigawa

5,200

5,200

Oami

28,40028,400

9,800

9,800

Yokokawa No. 1

10,00010,000

Yokokawa No. 2

16,00016,000

Umikawa No. 1

3,800

3,800

Umikawa No. 2

4,700

4,700

Umikawa No. 3

2,600

2,600

Umikawa No. 4

990

Himekawa No. 6

26,000Kurobegawa
Electric Power Co.

13,000

Takigami

Kurobegawa
15,000Electric Power Co.

7,500

Nagatoga

5,000

Kurobegawa
Electric Power Co.

2,500

Sasakura No. 2

10,200Kurobegawa
Electric Power Co.

5,100

Kita-otari

10,700Kurobegawa
Electric Power Co.

5,350

Total maximum output

151,690

118,240

Total in-house consumption-

117,250

8,000

Under construction
New Himekawa No. 6(completion scheduled for 2022)

27,500(Planned total maximum
output for 2022)

187,190

Shibukawa

LNG
Waste heat andbiomass boilers

ThermalGas turbines andcogeneration
Diesel2,200

8,000 (FIT)
Kurobegawa
Electric Power Co.

13,750We proactively utilize subsidy programs to develop technologies
that lead to ecological and energy-saving solutions.
Over the course of the last five fiscal years (fiscal 2013 through2017), the Company has been granted subsidies for 12 projects
under subsidy programs sponsored by government ministries. These
programs, aimed at facilitating public-private cooperation in advanced
technology pilot projects and encouraging Japan-based production
and R&D facility construction, are having a significant effect on results
and helping us meet objectives in various project areas.
Energy-Saving Initiatives
The Omi and Chiba plants have been engaged in projects aimed
at upgrading their cement and chloroprene rubber manufacturing
facilities and styrene manufacturing facilities, respectively, under
the auspices of Japan’s Ministry of Trade, Economy and Industry(METI). The projects in question were subsidized by METI’s program
for the rationalization of business operators’ energy use and havesuccessfully yielded the intended results. Meanwhile, a subsidized
project has been under way at the Omi Plant since fiscal 2015 tointroduce energy-saving facilities at electrolysis plants and thermal
power generation facilities alongside improvements in the calcium

carbide production process.
In addition, the Omi, Shibukawa and Ofuna plants undertook aswitchover of lighting to LEDs, utilizing METI’s subsidies for promoting
investment in energy conservation and a productivity revolution for
SMEs.
Environmental Load Reduction
Forming a consortium with The Chugoku Electric Power Co.,
Inc., Kajima Corporation and LANDES Co., Ltd., Denka conducteda project aimed at facilitating the popularization of CO2-SUICOM
environment-friendly concrete. This ongoing project was selected
for a subsidy program for the verification of carbon dioxide captureand storage (CCS) technologies under the auspices of METI’s Agency
for Natural Resources and Energy (ANRE). In addition, the productwon the 2014 Environment Minister’s Award for Global Warming
Prevention Activity.
Advanced Technological Development, etc.
The Omuta Plant conducted a project aimed at developing SiC
power modules that is subsidized by the Novel Semiconductor PowerElectronics Project Realizing Low Carbon Emission Society subsidy
program operated under the auspices of METI and the New Energy
and Industrial Technology Development Organization. The Chiba Plant’s
ultra-high purity acetylene black production facility was brought on line
in fiscal 2015 utilizing the Subsidy for Domestic Location Promotion
Projects.

List of Subsidized Projects
Category

Project

Business site

Subsidy title, relevant authority

1

Energy saving

The introduction of high-performance burners for cement
production

Omi Plant

METI

Subsidy program for the rationalization of business
operators’ energy use

FY2013

2

Energy saving

Introduction of high-performance freezing equipment forchloroprene rubber-related facilities and the upgradingof hardening agent manufacturing systems associatedwith cement production

Omi Plant

METI

Subsidy program for the rationalization of business
operators’ energy use

FY2014-2016

3

Energy saving

Introduction of the latest steam and fuel consumption
reduction technologies at petrochemical plants

Chiba Plant

METI

Subsidy program for the rationalization of business
operators’ energy use

FY2014-2016

4

Energy saving

Introduction of energy-saving facilities at electrolysis
plants and thermal power generation facilities and theimprovement of the calcium carbide production process

Omi Plant

METI

Subsidy program for the rationalization of business
operators’ energy use

FY2015-2018

Production
items

60 HZ (western Japan)

50 HZ/60 HZ

50 HZ (eastern Japan)

5

Energy saving

Introduction of LED lighting

Omi Plant

METI

Subsidies for promoting investment in energy
conservation and a productivity revolution for SMEs

Omi District:
Cement, Poval, etc.

Calcium
carbide , etc.

Tomi District:
Chloroprene rubber , etc.

FY2016

6

Energy saving

Introduction of LED lighting

Shibukawa Plant

METI

Subsidies for promoting investment in energy
conservation and a productivity revolution for SMEs

FY2016

7

Energy saving

Introduction of LED lighting

Ofuna Plant

METI

Subsidies for promoting investment in energy
conservation and a productivity revolution for SMEs

FY2016

8The
environment

concrete

Subsidy program for verification of carbon dioxide
capture and storage (CCS) technologies

FY2014-2016

9

Advanced
technology

Demonstration of a boron nitride production facility(for use in next-generation high-heat conductive fillers)

Omuta Plant

METI

Subsidy for Advanced Technology Demonstration and
Evaluation Facility Development

FY2013-2014

10 technology

Establishment of an R&D facility for next-generation LiBs

Advanced Technologies
Research Institute

METI

Program for Accelerating Breakthrough Innovation for
Practical Applications

FY2014

Advanced

Development of high-output and high-density SiC power
modules capable of withstanding high voltage

Omuta Plant

METI

Novel Semiconductor Power Electronics Project
Realizing Low Carbon Emission Society

FY2014-2016

Domestic

Establishment of a facility for producing a high-performance
conductive agent (acetylene black) for use in lithium ion
batteries

Chiba Plant

METI

Subsidy for Domestic Location Promotion Projects

FY2013- 2014

139,990
2,200 (FIT)

Isesaki

1,200

1,200 (FIT)

3,400

3,400

Omi

14,00014,000Omi（Tomi）

25,00025,000Omi cement

11,100

11,100Omi（Tomi）

17,76017,760Chiba

12,72012,720

Shibukawa

1,000

1,000

Total maximum output

81,58081,580-203,220-

198,830

Total maximum output for in-house consumption

Electricity generated by a total of 15 hydroelectric
power plants, which are situated along the Himekawa,
Umikawa and Omigawa river systems, is transferred overthe mountains via a high-voltage transmission network
maintained by Denka to the Minami Substation. As a
key facility feeding various production facilities acrossthe Omi Plant, this substation also relays electricity
purchased from Tohoku-Electric Power Co., Inc. as wellas electricity generated by the Omi Plant’s on-premises
natural gas turbines.
Itoigawa City is located on the country’s power
supply frequency borderline separating western Japan(60 HZ) and eastern Japan (50 HZ). Because of this,the Omi Plant is capable of handling both frequencies.
Specifically, most of the facilities in the Omi district are
adjusted for 60 HZ, while those in the Tomi district
are adjusted for 50 HZ. In addition, some facilities canaccept either 50HZ or 60 HZ power feeds.
The Minami Substation collectively handles electricity
from in-house power generation facilities, such ashydroelectric power plants that are often impacted byseasonal factors and weather conditions as well as onpremises generators located across the Omi Plant. It
also relays externally purchased electricity bought atvarying rates by time, day and season. Simultaneously,
the substation efficiently maintains an optimal demandsupply balance while assessing the constantly evolving
electricity needs of production facilities.

The Utilization of Government Subsidies
Related to the Environment and Energy

Fiscal year

990 (FIT)

Total maximum output

Total maximum output (including output for FIT)

81 Denka Report 2018 PDF edition

3,300

Otokorogawa

Under construction
New Omigawa(completion scheduled for 2019)

Solar

The amount
Denka isentitled to(kW)

Minami Substation Serving Various
Production Facilities at the Omi Plant

The transmission cables crossing overthe mountains distribute electricity fromhydroelectric power plants to Denka
production facilities

The Osawa Switching Station handles
electricity from various power sources
procured in-house and externally

Advanced

11 technology

12 businesslocation

Promotion of CO2-SUICOM environment-friendly

Omi Plant

METI/
ANRE

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Denka’s CSR Materiality Issue 5

Environmental Preservation
Environmental Preservation

Cement Production-Related Recycling
Business
The cement production facilities at Denka’s Omi
Plant (Itoigawa City, Niigata Prefecture) accept a large
amount of waste and byproducts both as fuels and as
raw materials. Natural minerals have long been used
for these purposes in cement production; however,Denka is aware of the potential utility of the chemical
and calorie content of many waste materials andbyproducts and maintains a policy of actively promoting
a switchover to these materials.
Raw materials utilized by these facilities include coalash from thermal power stations; contaminated waste
soil and plasterboard waste from construction sites;
and foundry sand that has been used for casting moldsby automakers and machine parts makers. We also
accept sludge from water supply and sewage treatment
systems, which are integral to people’s daily lives.
For fuel, we accept waste plastic separated fromgeneral waste as well as automobile shredder residue
and waste oil recovered after automobile disassembly.
Moreover, the Omi Plant’s biomass thermal power
facility is fed by scrap wood from the demolition ofhouses. Also, the plant utilizes byproducts from onpremises chemical production facilities, helping tominimize overall external emissions.
The plant accepts waste from all over Japan. To

gather this waste we use ground transport in thesurrounding Niigata communities and larger Hokuriku
area and have proactively adopted cost-effective marinetransport to carry large amounts of waste from regions
as far away as the Kyushu area, Hokkaido Prefecture andmajor cities located on the Pacific side of the Japanesearchipelago, including Tokyo, Osaka and Nagoya.
As a result of these efforts, in fiscal 2017 Denka used
562 kilograms of waste and byproducts for every metricton of cement produced.
Recently, we began considering accepting incineration
ash from municipal garbage incineration facilities
processing general waste while stepping up collaboration
with the local governments of communities in which
we operate. Due to the impact of restrictions on waste
imports enforced by the Chinese government, the needfor resource recycling measures is growing in Japan.
In response, we are striving to develop a more robust
structure capable of accepting an even broader range of
waste.
In addition, Denka was chosen by the 3R SUISHINKYOGIKAI(the Reduce, Reuse and Recycling Promotion Committee)
to receive the Chairman’s Award for 3R Contributor
under the committee’s Fiscal 2017 3R Award Program.
This commendation was attributable to the Company’s
proactive efforts to accept scrap wood collected fromareas devastated by the Kumamoto Earthquake and a
massive fire that engulfed streets north of Itoigawa City’s
main station as part of its social contribution initiatives.

Recycling Process Flowchart
Waste and byproducts
Limestone

Waterworks sludge

Clay

Incinerator ash

Used tires

Sewage sludge

Waste plastic

Waste oil

Fly ashGypsumbyproducts

Blast furnace slag

Construction soil
Raw materials
SilicaIron materials

Foundry sand

Slag

Dryer and raw
materials grinder

Note: Waterworks sludge, incinerator ash
and construction soil are used in place of clay

Rotary kiln

Biomass boiler for
in-house power
generation

Volume of Waste Accepted (total and per unit of production)
Amountprocessed(1,000 tons)

External sources

In-house sources

Waste accepted per unit of production

1,000

562 600
500
400

600

599 300

400

200

200

100

0

0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 （FY）

83 Denka Report 2018 PDF edition

CementWood chips
Waste plastic

Breakdown of Waste Accepted in Fiscal 2017

Waste accepted
per unit of production(kg/t)

254

800

Finishingmill

Waste oil andplastic andwood chips 5%

Construction soil
11%

Fly ash22%

Creating Shared Value (CSV): Our Operations Supporting
Resource Recycling and Creating New ValueWe also accept debris from areas devastated by natural
disasters and utilize waterworks sludge that meets aradioactivity clearance level determined by municipal bodies
of neighboring communities, putting the utmost priority on
the safety of frontline production operators, local residents
and product users. In these ways, we contribute to thedevelopment of local societies.
As such, Denka’s resource recycling operations via cement
production are recognized as an example of an excellent CSV
initiative as they contribute to the enhancement of people’squality of life and the sound development of society while atthe same time securing profitability and business continuity.
In addition, these operations also rely on the cooperation andunderstanding of various stakeholders, including our business
partners. Here, we introduce one such partner charged
with sorting and processing waste, essential functions in our
resource recycling operations.

Currently, a large amount of waste emitted from people’s
day-to-day living and business operations is disposed of in
landfills despite recycling efforts undertaken by the public andprivate sectors. Providentially, Denka’s cement manufacturing
facilities can be fed by a variety of waste and byproducts,
which serve as alternative fuels, while utilizing incineration ash
from these substances as cement raw materials. Therefore,
we believe that our cement manufacturing is an outstanding
example of resource recycling, especially in light of its ability
to accept broad range of waste. We are confident that ourcement production process is contributing to the preservationof the global environment while helping to extract the fullvalue of resources that would otherwise be wasted in thecourse of recycling.

Kaneyo Recycling Center: a Business Partner Supporting Denka’s Resource Recycling Operations
The Kaneyo Recycling Center, a business unit of the Itoigawa-based Kaneyo Unyu K.K., is charged with screening and processing scrap
wood and waste plastic collected for use as alternative fuels for cement production facilities and biomass boilers at Denka’s Omi Plant.
The quality of waste plastic collected for this purpose varies widely in terms of calorific value and other properties. It is thus
important to screen these materials in order to secure good alternative fuels; sometimes plastics containing hazardous substances must
be rejected in light of a facility’s treatment capacity. Of course, the Company’s resource recycling operations must not be undertaken
in ways that run contrary to its commitment to quality management and environmental preservation.
With this in mind, the Kaneyo Recycling Center screens waste plastic mainly via manual picking because the proper screening of awide variety of waste emitted from general households and business operators is ultimately dependent on well-experienced operators
equipped with specialized expertise. The center also accepts scrap wood collected from housing demolition sites while handling waste
wood generated via tree trimming undertaken as part of forest conservation projects. Nails and other metal objects attached to woodmaterials are rejected while they are processed through automated operational lines that employ magnetic metal rejection systems
and gravity separation systems. Screened plastic and wood materials are then crushed andchipped into fractions of designated size, for transport to cement production facilities.
In recent years, scrap wood processing costs have been falling due to an increase in thenumber of biomass generation facilities and despite a surge in logistics expenses. Closely
monitoring the material supply and market conditions, which may together affect its
operational cost, the center works in collaboration with Denka’s cement production facilities
to optimize its output as well as its inventory volume.
Today, an ever broader range of general households and business operators are called on
to practice resource recycling by, for example, properly separating recyclable materials andother waste. This improves the value of resources, reduces the cost for the reuser and helps
generate profit and employment.
Looking ahead, Denka will work shoulder to shoulder with its business partners, including
the Kaneyo Recycling Center, to step up operations aimed at facilitating the recycling offrom the left: Satoshi Anzawa, General Manager,
resources. By doing so, we will make a positive impact on environmental issues communities First
the Cement Dept., Denka , Second from the left: Ryuji
Aoki, General Manager, Kaneyo Recycling Centeraround the globe are now confronting
1

Overview ofscrap woodprocessing

2

3

4

Other 10%

Overviewof plastic
processing

Accepted
853,000 tons

Separation of metal and other foreign objects Visual checking prior to crushing process Resulting wood chips ready forfrom wood (using magnets and gravity)
shipping to destination facilities

Scrap wood accepted

Sludge
30%

1

2

3

4

Slag andfoundry sand
22%

Waste plastic collected from general Waste plastic being sorted
households

Crushing process

Resulting plastic chips

Denka Report 2018 PDF edition

84

Denka’s CSR Materiality Issue 5

Environmental Preservation
Environmental Accounting｜Environmental Performance Data

Environmental Accounting
Conservation Costs
Conservation
Cost Category
1. Business site costs①Pollution prevention②Environmental conservation③Recycling resources

Economic Effects
Conservation Costs(millions of yen)

Details

Investments

Expenses（Subtotal）

607

2,578

Environmental burden reduction

236

2,008

198

Energy saving
Effective use of resources

173

210

Change of raw materials, etc.

003. Administrative costs

Educational activities

173

4. R&D costs

Development of energy
saving products, etc.

347

813

5. Social activity costs

Educational activities

09

6. Environmental
damage costs

Community relations

1

89

0

0

955

3,563

7. Others
Total

Effects

209

22１
44

21

NOx emissions

t

4,192

4,365

-173

Soot and dust emissions

t

61

65

-4

COD (BOD) discharges

t

358

326

32

62,77758,260

4,517

t

83

75

8

1,000 t

110

113

-3

Final landfill waste

t

119

88

31

CO2 emissions fromtransportation

1,000 t34340PRTR substance emissions
Waste

85 Denka Report 2018 PDF edition

1,000 t96

96

2015 results 2016 results

In fiscal 2017, energy consumption intensity was
96% of the fiscal 2015 level, continuing to improve atleast 1% on an annual average basis. In fiscal 2018,
although we expect production volume to grow, we will
implement ongoing measures aimed at reducing energy
consumption of each manufacturing site and enhancing
the efficiency of in-house power generation. In theseways, we will engage in more effective energy-saving
initiatives.

Air emissions（t-CO2/t-CaC2）

COD
PRTR substances

CO 2 emissions intensity （%）

CO2 emissions intensity index

150

1.5

1.17

1.18

1.13

1.12

330t (360 t)
25 t (33 t)

PRTR substances0t(0t)

Waste generated 113,000 t (110,000 t)

92,000 t(91,000 t)

Recycled
externally

Final disposal(as landﬁll)

12,000 t

88 t(11,000 t)

Waste reduction(water removal and incineration)

OUTPUT

3(119 t)83,000 t (72,000 t)

Fuels are the sum of all fuels converted into caloric crude oil equivalents
and include those for in-house thermal power plants.
Fuels and electricity include those consumed by non-manufacturing sectors.
・CO2 emissions from energy sources: Figures represent emissions from in-house
fuel consumption and from electricity purchases
・CO2 emissions from non-energy sources: Mainly the portion derived from raw
materials
・CO2 emissions include those emitted from operational sectors
・COD: BOD discharge into rivers converted into COD values
・External waste recycling: Materials utilized externally as resources or as fuel・Final disposal: Material buried on Company premises or at external landﬁll sites

8

1.0

100
100

100

97

95

75

74

0

2013

2015results 2016results

20142017 targets 2017 results02018 targets（FY)

CO2 Emissions

1,340

1,000

(Tons)

1,400

Afﬁliates ﬁnal landﬁll waste

Denka s ﬁnal landﬁll waste

Group s total emissions ratio

Denka s emissions ratio

0.8
0.7

0.6

1,200
0.5

430

980

910

920

1,000

920

500

0

2013

2014

2015

2016

2017

2018 targets（FY）

In fiscal 2017, the CO2 emissions intensity was 95%of the fiscal 2015 level, successfully achieving a 1%
improvement on an annual average basis. In fiscal 2018,
we anticipate that the CO2 emission volume will grow instep with the increase in production volume. However,
we will continue to implement energy-saving measuresfor each manufacturing site with the aim of maintaining
the CO2 emissions intensity equivalent to the fiscal 2017
level. By doing so, we will achieve our target of 95% orless in comparison with the fiscal 2015 level.

0.5

0

0.4

0.4

377

357

0.4
495
454

0.2

210

1,230

1,210

1,160

0.5

663
800

200
1,200

2017 2018 targets（FY）

1,600

400

From non-energy sources

1,320
1,010

2016

④Final Disposal Amount and Waste Emission Ratio

600

From energy sources

2015

We will continue to work on the systematic reductionof PRTR substances, especially at the Chiba Plant, which
is a major source of emissions.

1,000(Thousand tons)

71

95
50

0

7

83

30

1,500
Recycled
in-house

INPUT

4

4
79

1.12

0.5

Water discharges

9002017 targets 2017 results 2018 targets（FY)②CO2 Emissions Intensity (from energy sources)

1.21 million t (1.17 million t)
CO2 (from energy sources)
CO2 (from non-energy sources) 1.00 million t (0.92 million t)
SOx
44 t (65 t)
NOx
4,370 t (4,190 t)
Soot and dust
65 t (61 t)
PRTR substances
50 t (50 t)

90

60

Products

Raw materials
65

96

Soil discharges

-1２

t

99

Afﬁliates

5

100

OUTPUT

361,000 kl

External waste
599,000 t

100

1.05

50

0

Overview of Environmental Impacts(1.33 billion kWh)

0.97

-28

(totals for all production sites in fiscal 2017; fiscal 2016 figures areprovided in parentheses for comparison)(579,000 t)

10,000 t

Effective use ofresources

To present the actual economic effects of our environmental
conservation measures, we calculated proceeds from selling
and recycling waste as well as cost reductions in the form of
reductions in waste treatment costs.

Electricity
1.42 billion kWh

1.00

Denka

(Tons)

120

1.08

0.5

836

(344,000 kl)

1.08

476

Total

(62.78 million t)

SOx emissions

Water used

Reducing waste
treatment costs byconserving or recycling
resources

Fuels

（%）

Production

150

388
1.0

Cost
reductions

Business
Activities

Energy consumption intensity③Emissions of PRTR Substances

1.5

Lowering energy costs by
Energy saving
conserving energy

INPUT①Production Volume and Energy
Consumption Intensity(millions of yen)

Sales profits

Cost
reductions

58.26 million t
FY2016 FY2017
Results Results

Effects

Details

Proceeds from selling
waste from core
operations and income
from recycling waste

Profits

Water

Conservation Effects

CO2 emissions(from energy and nonenergy sources)

Item

Denka Plants

The Company’s environmental investments in fiscal
2017 were mainly accounted for by the following items:
implementation of environmental burden reduction
measures (25%); introduction of energy-saving facilities(21%); investments for the effective use of resources(18%); and R&D spending focused on developing
energy-saving products (36%).

Units

Category360

2. Upstream anddownstream costs

Environmental Load

Fiscal 2017 Environmental Performance Data

2013

0.2
0.1

0.1

156

153

2014

2015

0.1
119
2016

0.1

0.1

88
2017

111
0.0
2018 targets（FY）

Overseas, the volume of final landfill waste disposed ofby affiliates is increasing due to an increase in production
volume. In response, we will strive to reduce the volume
of waste generated while facilitating effective resource
utilization via recycling. To this end, domestic motherplants and other relevant departments will act incollaboration with these affiliates. We will thus endeavor
to maintain zero-emissions status at all Group members.
Note: Emissions ratio (%) = amount of final landfill waste/ amount of waste
generated x 100 (In Denka’s definition, “zero emissions” means an emission
ratio lower than 1%.)

Denka Report 2018 PDF edition86

Denka’s CSR Materiality Issue 5

Environmental Preservation
Environmental Performance Data

⑤SOx
（tons）
300⑦Soot and Dust
Denka

（tons）

Afﬁliates

Denka⑨Ratio of Each Business Site’s Contribution to Overall Emissions (fiscal 2017)

Afﬁliates

150

CO2 emissions intensity(from energy sources)
1,340,000 tons

Omi
61％

Chiba
17％

Omuta
10％

Others
12％

Kyusyu Plastic

200

10

100

124

15

11

77

75

73

74

84

72

0

65

54

65

10

83 tons78

NOx emissions

SOx emissions

In fiscal 2017, SOx emissions decreased slightly year on year,
reflecting changes in the content of industrial waste processedat the Omi Plant’s cement production facilities. In fiscal 2018, we
will continue to work systematically to reduce SOx emissions.

In fiscal 2017, dust emissions increased slightly due to anincrease in the production volume of the Omi Plant.

81 tons

⑥NOx

⑧COD
（BOD）

（tons）

Denka

2015

2016

2017

2018 targets（FY）

Afﬁliates

2014

Denka

2015

2016

2017

730

4,460

840

4,250

750

700

4,150

4,190

Omi

83％

0

8

4,370

9

600

2018 targets（FY）

In fiscal 2017, NOx emissions increased slightly due to increases inthe volume of the Omi Plant’s cement production and overseas bases’
fused silica production. In fiscal 2018, we will strive to decrease NOx
emissions by, for example, streamlining plant operations.

7

87 Denka Report 2018 PDF edition

Others
24％

80

100

（％）

2013

2014

2015

2016

2017

2018 targets（FY）

In fiscal 2017, COD (BOD) emissions decreased slightly,
with the upgraded wastewater treatment facilities thatwere brought on line in February 2016 at the Omi Plant
steadily contributing to the reduction of emission volume.

Emissions

No.
3
7
9
12
53
71
134
213
232
240
272
300
355
374
392
400
405
414
416
420
446
243

Air

2
0
2
0
4
0
6
0
0
19
0
11
0
1
0
0
0
0
0
2
0
46
55

Water

0
0
0
4
0
0
0
0
0
0
4
1
0
1
0
0
14
0
0
0
0
24
60

Soil

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

Landfill

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

Total

2
0
2
4
4
0
6
0
0
19
4
13
0
2
0
0
14
0
0
2
0
70
115

0
2
11
0
38
39
0
3
12
131
0
33
1
29
2
10
13
1
2
13
2
340
1

Merbau, Seraya, Tuas, Tuas South,
Suzhou (Denka Advanced Materials
and Denka Chemicals Development),
Tianjin, Dalian and Vietnam

―

―

―

―

―

―

Non-manufacturingsectors(Head Office,branches, etc.)

Overview of Environmental Impacts○―

Environmental Accounting

○

○

○

―

○

―

―

②CO2 Emissions Intensity(from energy sources)

○

○

○

―

―

②CO2 Emissions

○

―

○

―

―

○

―

○

―

○

―

○

○

○

③Emissions of PRTR Substances④F inal Disposal Amount andWaste Emission Ratio

AmountTransferred(to the outside)

Overseas business bases (9)Innovation
Center①Production Volume and Energy
Consumption Intensity

0

Domestic affiliates (6)Denka’s six domestic
plants*1

330

The following table shows PRTR substances emitted and transferred in amounts exceeding one ton.
Ethyl acrylate
n-Butyl acrylate
Acrylonitrile
Acetaldehyde
Ethyl benzene
Ferric chloride
Vinyl acetate
N,N-Dimethylacetamide
N,N-Dimethylformamide
StyreneWater soluble copper salt
TolueneBis (2-ethylhexyl) phthalate
Hydrogen fluoride and its water-soluble salt
n-HexaneBenzeneBoron and its compounds
Maleic anhydride
2-Ethylhexyl methacrylate
Methyl methacrylate
4,4'-Methylenedianiline
Total (tons/year)
Dioxin (mg-TEQ/year)

Vietnam5％

Denka Polymer, Denka Seiken,
CRK, Hinode Kagaku Kogyo,
Denka Azumin and Kyusyu
Plastic*2

Environmental
Performance Data

8

Fiscal 2017 PRTR Substances Emissions and Transfers
PRTR Substances

Chiba
10 ％

60

540

200

2017

40

Others11％

Scope of Calculation

8

580

360

2016

Denka Seiken
12 ％

20

6%

Others
7％

760

2,000

2015

Tuas
49％

542 tons

400

2014

Omi
93％

334 tons

3,000

2013

Others
10％

Chiba
6％

COD (BOD) emissions

Afﬁliates

860

800

1,000

6%

Denka Azumin Hinode Kagaku Kogyo
10％9％Water used

10

3,760

0

Omi
76％

Final landﬁll waste

840
940

Others
8％

Omuta
12％

Omi
27％

61,221 thousand m3

1,000

5,000

4,000

2013

（tons）

6,000

6％

Others0

Soot and dust emissions

2014

Shibukawa
6％

Tuas
13％

Hinode Kagaku Kogyo
63％

128 tons
2018 targets（FY）

2013

Omi
12％

Omi
69％

5,210 tons

59

44

Chiba
68％

Others

65

61

50

84

16

15

88

104
100

PRTR substance emissions

Note: Excluding emissions from
Toyo Styrene and Taiyo Vinyl
Corporation operating on the
Chiba Plant’s premises○

Note: Excluding emissions from
Toyo Styrene and Taiyo Vinyl
Corporation operating on the
Chiba Plant’s premises

⑤SOx

○

○

―

○

○

⑥NOｘ

○

○

―

○

○

⑦Soot and dust

○

○

―

○

○

⑧COD(BOD)

○

○

―

○

○

○

○

―

○

○

⑨Ratio of Each Business Site inOverall Emissions*1 Including emissions from affiliates operating on the premises of Denka plants: Omi Plant: Denal Silane Co., Ltd., Denak Co., Ltd.; Chiba Plant: TOYO STYRENE
Co., Ltd., Taiyo Vinyl Corp.
*2 Emissions from Kyusyu Plastic Industry Co., Ltd. has been included since fiscal 2017
At present, some items presented herein encompass only emissions from Denka’s domestic business bases, including six domestic plants; however, we are
steadily increasing the incorporation of emissions from domestic affiliates, overseas business bases and all other Group entities classified within the scope of
consolidation in order to expand the scope of calculation for all items.

Denka Report 2018 PDF edition

88

Denka’s CSR Materiality Issue 6

Site Reports

Social Dialogue

Social Dialogue│Site Reports

We will strive to ensure the appropriate and timely disclosure of

Omi Plant

corporate information while establishing bidirectional communication

Operations

Since its establishment in 1921, the Omi Plant has exploited its abundantin-house resources, including the Mount Kurohime limestone mines andsubstantial power generation capacity, to manufacture calcium carbide andcalcium cyanamide. Boasting a broad range of offerings, the plant has built on
its unique carbide chemical technologies, harnessing its strength in inorganic
chemistry to manufacture such products as cement and its organic chemistry
expertise to manufacture synthetic rubber. The Omi Plant also produces
macromolecular sodium hyaluronate preparation.

Products

・Infrastructure & Social Solutions: Calcium carbide, calcium cyanamide, DENKA
ALCEN, Denka Cement and special cement additives
・Elastomers & Performance Plastics: DENKA CHLOROPRENE and Denka Poval
・Electronics & Innovative Products: Ultra-high purity monosilane gas
・Life Innovation: Macromolecular sodium hyaluronate preparation

Address

2209, Oaza Omi, Itoigawa, Niigata
Telephone: +81-25-562-6105

Employees

830 (as of March 31, 2018)with stakeholders.

Our Initiatives to Ensure the Appropriate andTimely Disclosure of Corporation Information andBidirectional Communication with Stakeholders
General Meeting of Shareholders
Denka’s annual General Meeting of Shareholders
provides a valuable opportunity for engaging in directcommunication with shareholders. Accordingly, we work
to give shareholders enough time to confirm and examine
the reports and items up for vote. To this end, we send
the notice of convocation for the General Meeting of
Shareholders three weeks prior to the date of the meeting.
Since fiscal 2016, we also post such notice, along with
its English translation, one week prior to sending it out inprint, via the Company’s and the Tokyo Stock Exchange’s
websites. As for the print version, we print this notice onlarge B5-sized (182 x 257 mm) sheets, with the aim ofenhancing readability.
Moreover, we try to schedule the meeting at the earliest
possible date to avoid overlaps with similar meetings
held by other companies, thereby making it easier for
shareholders to attend.
At each meeting, we use narrated videos to supplement
our explanations of reported items while maintaining
exhibition booths to showcase our initiatives and products

and gain greater recognition of our operations. We haveadopted a voting system that allows shareholders to use
on-line voting via personal computers and cellular phones
in addition to regular post. Also, Denka is a member ofthe Electronic Voting Platform for institutional investors
run by the Tokyo Stock Exchange. As such, we are striving
to improve shareholders’ convenience with regard to theexercise of voting rights.

Message from the General Manager
As a chemical company, we supply materials for various products that support thedevelopment of society. In the production of these materials we utilize a wide variety of raw
materials, including limestone from local mines and waste from neighboring communities.
At all times, we place particular priority on the careful handling of hazardous substances andthe prevention of their release into the environment. We believe that such practices are key tocontinuing production in the regional communities surrounding us.
Looking ahead, we will accelerate the development of specialty businesses to realize
sustained and sound corporate growth while striving alongside other community members toensure mutual prosperity.

Hideki Hirano
Managing Executive Officer,
General Manager of Omi Plant

Omuta Plant
The 159th Ordinary General Meetingof Shareholders (June 21, 2018)

Exhibition booths

Operations

Established in 1916, the Omuta Plant is the first manufacturing site that Denka
built. The plant started out its operations with the production of calcium
carbide and calcium cyanamide.Since that time, as an inorganic chemical
product manufacturing base boasting proprietary electric furnace, hightemperature control and nitride technologies, the Omuta Plant has introduced
a number of unique products. Currently, we are strengthening our operations
related to fine ceramics and electronic materials in order to contribute to thedevelopment of the electronics, automotive and numerous other industries.

Products

・Infrastructure & Social Solutions: Calcium carbide, calcium cyanamide, fire
resistant materials for steel making, alumina cement and special cement
additives
・Electronics & Innovative Products: Fused silica filler, spherical alumina, silicon
nitride, boron nitride, ceramics-based electronic circuit substrates, thermallyconductive sheets, ceramic composite, LED phosphors and acetylene black

Address

1, Shinkai-Machi, Omuta, Fukuoka
Telephone: +81-944-52-1055

Employees

606 (as of March 31, 2018)

Dialogue with Institutional Investors
We aim to help institutional investors enhance theirunderstanding of our management strategies and plans
as well as our corporate governance. To this end,
Denka’s management team and staff from relevant
departments engage in face-to-face dialogue withinvestors while undertaking such initiatives as inviting
investors to attend plant tours and participate indialogue sessions with outside directors.

Our Stance on Online Information Management
In accordance with Japan’s Financial Instruments and Exchange Law and timely disclosure rules set forth by the
Tokyo Stock Exchange, Denka appropriately discloses information with the aim of ensuring the transparency ofits management. It is also our policy to proactively disclose information that does not fall under these regulations
whenever such information is considered helpful to our stakeholders. Moreover, using such opportunities as results
briefings, corporate briefings for individual investors and the General Meeting of Shareholders, we are enhancing
communication with our stakeholders while reflecting their feedback in management decisions and business activities.
Denka makes sure that corporate information subject to the timely disclosure rules is protected from unauthorizedaccess or theft prior to release through the Tokyo Stock Exchange’s timely disclosure network (TDnet) service. The
Company uploads such information to its website only after confirming that the information has been successfully
disclosed through the aforementioned service. The number of personnel handling the management of the website isstrictly limited, with their workspaces being set apart from other facilities and equipped with protection systems. We
have also established a procedure to handle emergencies, such as unintentional information disclosure and leakage.

89 Denka Report 2018 PDF edition

Message from the General Manager
What sets the Omuta Plant apart is its expertise in producing inorganic materials, such as calcium
carbide and calcium cyanamide—two key products Denka has been manufacturing since its founding—as well as electronic materials, a class of products that requires the ability to adapt to a rapidly changing
market environment. We are acutely aware of the value of the legacy passed down by our predecessors in
the form of outstanding technological capabilities and unwavering commitment to precise manufacturing.
While we honor these traditions, we are also actively incorporating new methodologies. In the course of
doing so, we are striving to create a safe, secure and lively workplace environment that allows staff to workwith confidence. Furthermore, we are promoting an environment-friendly operational approach to ensurethat our plant coexists in harmony with neighboring communities. In addition to developing and delivering
unique products, we will sincerely take on every challenge that we meet in the course of these pursuits.

Kazuo Takahashi
Executive Officer, General
Manager of Omuta Plant

Denka Report 2018 PDF edition90

Site Reports
Site Reports

Chiba Plant

Ofuna Plant
Operations

About half a century ago, the Chiba Plant started out as Denka’s core
petrochemical facility. Today, the plant is striving to transform its businessstructure by strengthening its capacity to produce functional chemicals
with the aim of reaching a new growth stage. Its products include such
petrochemicals as styrene-based functional resins and synthetic rubber,polymer processing products, including biaxially oriented polystyrene sheets,
vinyl chloride tapes and other housing and environmental materials as well as
ultra-high purity acetylene black for use in lithium ion batteries.

Products

Styrene monomer, polystyrene, ABS resin, heat-resistant polymers, transparent
polymers, styrene-based specialty resins, EVA emulsions, synthetic rubber,biaxially oriented polystyrene sheets, vinyl chloride tapes, rain gutters,
corrugated pipes and ultra-high purity acetylene black

Address

6, Goi-Minamikaigan, Ichihara, Chiba
Telephone: +81-436-26-3200
Bibai Subplant: 1-1, Higashi-Gojo-kita 10-chome, Bibai, Hokkaido
Telephone: +81-126-62-1444

Employees

Operations

Employing ejection molding and adhesion coating technologies, the Ofuna
Plant is engaged in the development and production of such items as synthetic
fibers, packaging tapes and functional films. We are Denka’s prime production
unit charged with supplying polymer processing products and committed toaccommodating customers’ product needs in a timely manner and satisfying their
expectations in terms of product safety and quality.

Products

・Packing tapes
・Caralyan Y functional film
・TOYOKALON synthetic fiber

Address

13-1, Dai 2-chome, Kamakura, Kanagawa
Telephone: +81-467-45-1110

Employees

181 (as of March 31, 2018)

489 (as of March 31, 2018)

Message from the General Manager
Message from the General Manager
The Chiba Plant is striving to live up to the trust and expectations of the communities
surrounding it. We focus on pursuing harmonious coexistence and mutual developmentwith local society, to this end stepping up initiatives to facilitate communication, foster
mutual understanding and nurture friendships with our fellow community members.
We also aim to create a safe and secure worksite environment and ensure that all
workers respect one another and engage in robust communication while striving toenhance profitability. To this end, we will rally the overall strengths of the Chiba Plant.

Hideki Watanabe
Executive Officer, General
Manager of Chiba Plant

Shibukawa Plant

We at the Ofuna Plant engage in manufacturing activities rooted in Kamakura City, which boasts an outstanding
historical legacy. In terms of environmental activities, we strive to preserve the abundant blessings of the city’snatural environment and thereby help enhance the well-being of local residents. To this end, we strictly comply
with environmental regulations and strive toward reduced waste emissions and energy consumption. These efforts
are backed by an environmental management system designed to help us achieve continuous improvement.
As for safety assurance activities, we are steadfastly committed to the prioritization of safety in all aspects of
our operations while utilizing hazard prediction and risk assessment systems to identify workplace dangers andsteadily mitigate operational risks. We are thus creating a sound workplace environment in which everyone
can work vigorously and abide by compliance regulations associated with occupational safety and health while
implementing robust measures to prevent accidents, injuries and diseases attributable to our operations.

Isesaki Plant
Operations

Products

In 1951, the Shibukawa Plant was established as a production base for vinyl
chloride polymers. In 1976, the plant began manufacturing HARDLOC structural
adhesive. In 1984, the plant started expanding its business domain, making afull-scale entry into the electronic materials business. Currently, the Shibukawa
Plant specializes in electronics-related products, encompassing electronic
circuit substrates, thermally conductive materials, emitters, structural adhesives
and semiconductor processing-related products, helping drive Denka’s growthstrategies as a key organic electronic materials production base.
・Electronics & Innovative Products: HITTPLATE high thermal conductivity aluminum
substrates, Theramally Conductive Spacer, TFE and LaB6 CATHODE electron andion emitters, ELEGRIP dicing tape and back grinding tape, HARDLOC structural
adhesive, HARDLOC OP/UV light curing adhesive

Address1135, Nakamura, Shibukawa, Gunma
Telephone: +81-279-25-2109

Employees

242 (as of March 31, 2018)

Operations

This plant manufactures sheets and films from polystyrene, vinyl chloride andother raw materials. We supply food and electronic packaging materials thatmeet stringent requirements for performance and quality management, and are
endeavoring to bolster our processing technologies while developing value-addedofferings.

Products

・Electronics & Innovative Products: Carrier tapes, trays and cover tapes forsemiconductor and electronic component transportation
・Living & Environment Products: Food packaging sheets, stretch films and solar cell
module back sheet materials

Address

Isesaki Plant: 245, Nishigawara, Naganuma-cho, Isesaki, Gunma
Telephone: +81-270-32-1251
Isesaki Plant (Ota): 3015, Serada-cho, Ota, Gunma
Telephone: +81-276-52-4111

Employees

251 (as of March 31, 2018)

Message from the General Manager

Message from the General Manager

The Shibukawa Plant manufactures products expected to become increasingly sought
after in markets for items used in such products as vehicle-mounted devices and mobile
electronic terminals. In line with Denka’s strategies aimed at achieving sustained and soundgrowth, our plant operations place strong focus on maintaining the trust of our employees,
the communities surrounding us and society as a whole. With this in mind, we will implement
such priority initiatives as engaging in dialogue and interaction with community members aswell as volunteer activities in tandem with businesses operating in our neighborhood.

The Isesaki Plant’s primary products are resin sheets and films used for packaging
materials for foodstuffs and those for transporting electronic components. In line with
the Denka Value-Up management plan, we will place the utmost priority on safety in thecourse of our manufacturing operations, thereby delivering high-quality products to ourcustomers. Also, we will develop specialty products that fill the needs of future generations
and are environment-friendly. In these ways, we will create a plant capable of winning thetrust of local society while fulfilling our social responsibilities.

91 Denka Report 2018 PDF edition

Mikio Shimizu
General Manager of Ofuna Plant

Yoshimi Ishizuka
General Manager of Shibukawa
Plant

Koichi Taguchi
Executive Officer, General
Manager of Isesaki Plant

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Site Reports

Denka Innovation Center

Denka Singapore Seraya Plant
Operations

Products

The Denka Innovation Center began operating at its current site in 1962 after theCompany relocated its Meguro Research Center, which was established in 1916,
from Meguro-ku, Tokyo, renaming it the Central Research Institute. The facility laid
the foundations for Denka’s business expansion by developing numerous coretechnologies and new products in broad areas ranging from inorganic, organic andpolymer chemistry to resin processing and biotechnologies. Renewed in 2014 as
the Denka Innovation Center, the facility is moving forward as the Company’s core
R&D facility as well as a venue for incubating Companywide initiatives to promote
open innovation. Furthermore, the center will focus its resources on pursuing R&D
themes aimed at enhancing its core technologies and creating new businesses
backed by next-generation products and technologies.
Advanced Technologies Research Institute: The environment and energyLife Innovation Research Institute: Healthcare
Infrastructure & Solutions Development Research Institute: Infrastructure

Address

5-1, Asahi-cho 3-chome, Machida, Tokyo
Telephone: +81-42-721-3611

Employees

183 (as of March 31, 2018)

Message from the General Manager

Operations

The Seraya Plant is situated on Jurong Island, where Singapore’s mainconcentration of petrochemical complexes is located. In 1997, we initiatedplant operations as a polystyrene manufacturing facility. We began producing
TX Polymer (methyl methacrylate styrene (MS)) and CLEAREN (styrenebutadiene block copolymer) in 2006 and launched a facility to manufacture
DENKA IP (imidized polymers) in 2012. Having steadily expanded its productionlines, the plant now boasts overall annual output of 335,000 metric tons (fourtypes of resin combined), serving as a key production base spearheading the
Denka Group’s resin business.

Products

DENKA STYROL, Denka TX Polymer, CLEAREN, Denka NSBC and Denka IP

Address

40 Seraya Avenue, Singapore 627873
Telephone: +65-6867-6089

Employees

76 (as of March 31, 2018) (Including three Japanese nationals)

Message from the Deputy Managing Director

Since the renovation of its main building in 2014, the Denka Innovation Center has been hard at work torealize its full potential as a key facility for open innovation initiatives being undertaken by business units acrossthe Group. Striving to create new value that contributes to sustainable social development, the Advanced
Technologies Research Institute, the Life Innovation Research Institute and the Infrastructure & Solutions
Development Research Institute are functioning as corporate R&D bases charged with research into the three
growth fields of “the environment and energy,” “healthcare” and “high-value-added infrastructure.” Moreover, theNobuyuki Yoshino
center engages in collaboration with partner companies and external research institutions at home and abroad
Assistant to Chief R&D Officer,
while serving as a venue for working with a broad range of customers in the co-creation of innovative solutions.
Innovation Center,
General Manager ofFurthermore, we participate in the annual Summer Holiday Chemical Experiment Show for Children to help young
Advanced Technologies
people—the leaders of tomorrow—experience the excitement of chemistry. We also host a plant tour for local
Research Instituteelementary school students as part of social contribution initiatives.
Going forward, we will strive to support the realization of a company capable of contributing to the sound and sustainable development of society
and, to this end, rally our Groupwide strengths to live up to the expectations of each stakeholder.

In its efforts to contribute to society through production activities, Denka creates
products of value by consuming limited natural resources and energy. We recognizethat giving due consideration to the impact of such activities on the environment andcommunities surrounding us, as well as the well-being of our employees, is essential. We
are therefore determined to focus on maintaining a harmonious coexistence with theenvironment, society and people of Singapore in the course of our production activities.

Denka Advantech Tuas Plant

Denka Singapore Merbau Plant
Operations

The Merbau Plant manufactures acetylene black, a unique material boastinghigh purity as well as superior electro-conductivity and thermal conductivity.
Acetylene black is widely used for a variety of applications, including highvoltage transmission cables and lithium ion secondary batteries. With the aimof accommodating an expected surge in demand, efforts are now under way
to augment our production capacity.

Products

Acetylene black

Address

Singapore Office: 4 Shenton Way #29-02 SGX Centre 2, Singapore 068807
Telephone: +65-6225-6120
Plant: 300 Ayer Merbau Road, Singapore 628282
Telephone: +65-6867-8496

Employees

55 (as of March 31, 2018) (Including one Japanese national)

Michio Kawamura
Deputy Managing Director,
General Manager of Seraya Plant

Operations

The Tuas Plant commenced operations in 1991 in Singapore to produce
fused silica filler, a material mainly used as an encapsulant for semiconductor
packaging. Currently, the Tuas Plant’s focus is on spherical fused silica filler
to accommodate advances in semiconductor packaging as well as thetrend toward more environment-friendly products. Stepping up its quality
management and production structures, the plant serves mainly Chinese andSoutheast Asian markets and works in cooperation with the Omuta Plant.

Products

Spherical fused silica filler

Address

11A Tuas Avenue 20, Singapore 638823
Telephone:+ 65-6861-0004

Employees

74 (as of March 31, 2018) (Including two Japanese nationals)

Message from the General Manager
Message from the General Manager
Unfortunately, on December 1, 2017, we experienced an accident. This sobering experiencecaused us to seriously reflect on how vigilant we must be to maintain safe operations. In
response, our fiscal 2018 initiatives will be focused on fostering a corporate culture that places
the utmost priority on safety (via the solicitation of employee suggestions about safety measures)and providing plant employees and subcontractors with educational sessions focusing on laws,
regulations and in-house rules. In these ways, we will step up our safety assurance activities.

93 Denka Report 2018 PDF edition

Yuji Koga
General Manager of Merbau

In 2018, the Tuas Plant celebrated the 27th anniversary of its founding as a fused silica filler
production facility. Amid the severe market environment for semiconductors, we are striving tomaintain stable operations, improve our production technologies and enhance product quality,with the aim of achieving sustainable growth as Denka’s mainstay fused silica production base.
We have positioned securing facility security and occupational safety as basic to operations.
Accordingly, we are engaged in ongoing safety assurance activities aimed at creating aworkplace environment in which every employee can work in confidence.

Keishi Iizuka
General Manager of Tuas Plant

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Site Reports

Denka Advantech South Plant

Denka Construction Solutions Malaysia

Operations

The South Plant initiated operations in 2013 to manufacture TOYOKALON
synthetic fiber for wigs and hairpieces through the application of Denka’s
unique ejection molding technologies, with the aim of accommodating
demand for this product in such regions as Africa. Since then, TOYOKALON
has grown into a world-leading brand in its product category. With this inmind, the South Plant will work in tandem with the Ofuna Plant to bolster theGroup’s supply structure as the second flagship TOYOKALON production site,
helping to accommodate growing demand.

Products

TOYOKALON

Address

6 Tuas South Drive Singapore 637046
Telephone: +65-6412-9200

Employees

43 (as of March 31, 2018) (Including one Japanese national)

Operations

Denka Construction Solutions Malaysia is situated in Shah Alam City, on theoutskirts of Kuala Lumpur—the capital of Malaysia. We are charged with the
manufacture, development and sale of special cement additives and otherchemical products for use in construction. We became a part of the Denka
Group in April 2015 and, since then, have served as the Group’s special
cement additive production and development base in Southeast Asia. In
addition to producing existing Denka products for local markets, we aredeveloping new products that better accommodate regional standards andneeds.

Products

Special cement additives (special mortar, special pavement fillers, concrete
quick-setting agent for use in tunnel construction, etc.) and construction
chemicals (waterproofing materials, resin-based floor coating materials, repair
materials, etc.)

Address

No. 18, Jalan Utas 15/7, Seksyen 15, 40200 Shah Alam, Selangor Darul Ehsan,
Malaysia

Employees

96 (as of March 31, 2018) (Including two Japanese nationals)

Message from the General Manager

Message from the Managing Director

Last year, we were able to maintain our zero-accident and disaster status thanks to ongoingsafety activities that have been implemented since the production kickoff in addition to new
initiatives being introduced to step up safety assurance. Under the slogan “GO! ANZEN-NI!,”in fiscal 2018 we will rally the strength of all plant employees to secure a more robust safetyassurance structure, realize even higher product quality and enhance our operational productivity.

We constantly strive to create a sound and safe workplace environment. We adhere to apolicy of practicing safe operations in accordance with domestic and international laws andregulations as well as relevant principles and guidelines. We are dedicated to ensuring that
all employees can work with confidence and, to this end, promote the betterment of ourworking environment by undertaking ongoing investment in occupational safety and healthmeasures and by upgrading our safety, hygiene and environmental manuals.

Yoshiyuki Yoshino
General Manager of South Plant

Denka Advanced Materials (Suzhou)

Denka Advanced Materials Vietnam
Operations

Denka Advanced Materials Vietnam operates a production facility near Hanoi,
northern Vietnam, and is engaged in the manufacture of VINI-TAPE, a vinyl
chloride-based adhesive tape used for electrical insulation and automotive
wire harnesses, as well as Denka Thermo Film ALS for use as cover tape in theprocess of transporting electronic components. Targeting Asian and Middle
Eastern markets, we strive to deliver high-quality, cost-competitive products
and thereby accommodate growing demand.

Products

VINI-TAPE and Denka Thermo Film ALS

Address

Plot D-5, Thang Long IP II, Lieu Xa Commune, Yen My District, Hung Yen
Province, Vietnam
Telephone: +84-221-3974-805 Fax: +84-221-3974-806

Employees

113 (as of March 31, 2018) (Including two Japanese nationals)

Operations

Established in January 2006 as the Group’s first production and sales
subsidiary in China, the company engages in the slitting and marketing ofelectronic packaging sheets and cover tapes as well as the manufacture,import and sale of packaging sheets for electronic components and foodstuffs.

Products

Electronic packaging sheets, whole sheets used to produce cover tapes andfood packaging sheets with slitting

Address

Unit 9B, Modern Industrial Square, No. 333 Xingpu Road, Suzhou Industrial
Park, Suzhou, Jiangsu, China 215126
Telephone: +86-512-6287-1088

Employees

80 (as of March 31, 2018) (Including three Japanese nationals)

Message from the General Manager

Message from the General Manager

As a Denka Group member operating in Vietnam, we will uphold the Denka Principles
and are committed to placing the utmost priority on safety in all aspects of our production
and corporate activities as a whole. By doing so, we will realize Denka Mission: “Taking on
the challenge of expanding the possibilities of chemistry to create new value and contributeto sound social development.”

1. On May 1, 2016, we achieved 1,600 days of zero-accident and disaster status. Looking
ahead, we will rally the strengths of all employees to promote safety assurance activities,
with the aim of lengthening this record to 2,000 days.
2. As a resin processing and marketing base that handles electronic and food packaging
materials, we will not only expand our facilities but also enhance our technologies todifferentiate ourselves from competitors. Moreover, we will regularly assess our profitability
and region-specific operational risk, thereby pursuing sound corporate development.

Ichiro Katano
General Manager

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Mohd Ridzuan Amral Bakri
Managing Director

Satoshi Yokoyama
General Manager

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Denka Chemicals Development Suzhou

Operations

Denka Electronics Materials Dalian

Established in December 2010 in China, Denka Chemicals Development Suzhou
is Denka’s first overseas R&D base. We are engaged in R&D focusing on suchmaterials as chloroprene rubber, HARDLOC, special cement additives and functional
sheets, with the aim of embodying “possibility of chemistry” in line with thecorporate slogan. We are thus helping serve the Chinese market, the largest market
in the world.

Address

Unit 1D, Modern Industrial Square, No. 333 Xingpu Road, Suzhou Industrial
Park, Suzhou, Jiangsu, China 215126
Telephone: +86-512-6280-6808

Employees

17 (as of March 31, 2018) (Including four Japanese nationals)

Operations

In September 2014, Denka Electronics Materials was established in Dalian, China,
as a company that produces ALSINK, a thermal conductive substrate for use inpower modules installed in high-speed rolling stock and other vehicles.

Products

ALSINK

Address

Building Unit 30, Jingang Industrial Park Phase III, No. 41-10 Wanda Road
Dalian Economic & Technological Development Zone, Dalian, Liaoning
Province, China 116600
Telephone: +86-411-6263-4377

Employees

32 (as of March 31, 2018) (Including two Japanese nationals)

Message from the General Manager

Message from the General Manager

We are in charge of research into core technologies supporting Denka’s operations in China.
In addition to contributing to the success of the Denka Value-Up management plan, we will help
our researchers enhance their skills while creating a working environment in which everyone
can work vigorously with the utmost priority on safety. To this end, we will rally all our strengths
to promote operational process reforms. We will also tackle unconventional R&D themes andflexibly collaborate with organizations across the board, including other Group business basesin China. In these ways, we will push ahead with exploring new themes in an effort to accurately
accommodate region-specific needs.

We are a new company that has been operating only four years. With the majority of ourworkforce being accounted for by young people in their late 20s, we are engaged in systematic
staff education and training aimed at motivating local employees to become advocates forcontinuous improvement. Hoping that Denka’s corporate culture is embraced by people ofDalian, China, we will endeavor to create a safe workplace in which employees find their job
rewarding.

Kazuhiro Oshima
General Manager

Denka Inorganic Materials (Tianjin)

Denka Performance Elastomer

Operations

As part of the Group’s special cement additive supply chain, Denka Inorganic
Materials was established in September 2013 as a wholly owned subsidiary(capital: ¥250 million) of Denka to manufacture and sell such products as inorganic
additives that enhance the function of cement, mortar and concrete as well as toprovide technical consulting services.

Products

Hardening accelerator for special cement additives (SC-1, BEFORM, etc.)
Special cement additives for quick-setting cements (Xunpai, Junchiwang, etc.)

Address

No. 3 Saida Mechanical Park, Xiqing Economic Development Area, Tianjin,
China 300385
Telephone: +86-22-8792-0488

Employees

9 (as of March 31, 2018) (Including two Japanese nationals)

Operations

Having taken over operations related to chloroprene rubber (Neoprene™) from
DuPont in November 2015, Denka Performance Elastomer was established
as a joint venture owned by Denka and MITSUI & CO., LTD. Bringing together
the strengths of Neoprene™, long a top-selling product, and proprietary Denka
technology, Denka Performance Elastomer will supply superior-quality products tocustomers around the world, especially those in the Americas.

Products

Chloroprene rubber (NeopreneTM)

Address

560 Highway 44, LaPlace, LA70068, USA
Telephone: +1-985-233-7600 Facsimile: +1-985-359-4781

Employees

239 (as of March 31, 2018) (Including seven Japanese nationals)

Message from the General Manager

Message from the Vice President

In addition to creating a workplace that places the utmost priority on safety, we will givedue consideration to the environment. To remain a trustworthy manufacturer, we will always
undertake our corporate activities with sincerity and integrity. In particular, we will strive tomaintain our zero-disaster status in a way that exercises our team strength.

Denka Performance Elastomer LLC, or DPE, is engaged in the production and sale ofchloroprene rubber in the United States. Japanese and American staff at DPE work hand in handto enhance the company’s production structure and technological capabilities with the aim offurther expanding the chloroprene rubber business, a core business supporting the Denka Group.
We are also committed to helping revitalize communities in the surrounding region.
Yutaka Shirayama
General Manager

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Makoto Fukuda
General Manager

Masanobu Kosaka
Vice President Technology

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Icon Genetics

Denka Seiken

Operations

Icon Genetics is an R&D company specializing in vaccines and diagnostic reagentsand has a unique proprietary technology for efficiently manufacturing proteinsusing the tobacco plant (Nicotiana tabacum). Icon operates a Good Manufacturing
Practice (GMP) conformant facility and is capable of producing prototypes ofgenetically modified proteins for use in reagents as well as vaccines for clinical trials.

Products

Prototypes for various types of vaccines and diagnostic reagents

Address

Weinbergweg 22, D-06120, Halle (Salle), Germany
Telephone: +49-345-5559889-664 or 885

Employees

21 (as of March 31, 2018) (Including two Japanese nationals serving as two of
three managing directors)

Operations

Since its founding in 1950, Denka Seiken has been operating its mainstay plants
in Gosen, Niigata. Taking on its mission as a supplier of vaccines and diagnostic
reagents, the company is striving to protect people’s lives and well-being via its
corporate activities.

Products

Influenza vaccines, immune serum diagnostic reagents, clinical chemistry
reagents, bacterial and virological diagnostic reagents and POCT products

Address

Head Office: Nihonbashi Mitsui Tower, 1-1, Nihonbashi Muromachi 2-chome,
Chuo-ku, Tokyo
Telephone: +81-3-6214-3231
Plants: Niigata Plant, Kagamida Plant (Gosen, Niigata)

Employees

727 (as of March 31, 2018)

Message from the President

Message from the CEO
Icon Genetics GmbH became a part of the Denka Group in August 2015 and a wholly owned
subsidiary of Denka in August 2017. We are currently striving to develop new vaccines via theutilization of the magnICON® platform, our proprietary technology capable of efficiently producing
genetically modified proteins for medical applications in four to five weeks, a significantly shorter
period of time than possible with other methods. Through these development efforts, we will
strive to contribute to people’s well-being in various ways.

Kazuyuki Hiruta
CEO

Denka Polymer

Since its founding, Denka Seiken has been taking on the challenge of eradicating infectious diseases.
Under the keyword “prevention,” we are striving to fully leverage our strengths as an R&D company inthe manufacture of various vaccines as well as the development and production of a range of diagnostic
reagents. At the same time, we are always conscious of our responsibilities as a pharmaceutical maker.
Backed by society’s trust in us and the dedication of our enthusiastic employees, we provide uniquehigh-quality products in an effort to accommodate the evolving needs of markets around the globe.
In step with the development of human civilization, we are also being called on by the general public
to counter emerging threats of infectious disease pandemics. Because of this, we believe that Denka
Seiken must play an ever important role going forward. Building on technologies we have accumulated
thus far, we will step up our operations aimed at contributing to society.

CRK
Operations

As a wholly owned subsidiary of Denka, we are supporting the Group’s styrene
business through the molding and sale of food containers. Founded in 1966, asNakasan Kagaku K.K, we boast a business track record spanning more than 50
years. Along with the development of Japan’s retail sector, including supermarkets,
we have been endeavoring to deliver plastic food containers that satisfy the latest
customer needs.

Products

Plastic food containers and food packaging stretch films for industrial use(prepared food trays, food containers, PVC films for automated and manual
wrapping, etc.)

Address

Tower S, Fukagawa Gatharia, 5-25, Kiba 1-chome, Koto-ku, Tokyo
Telephone: +81-3-5632-9530

Employees

424 (as of March 31, 2018)

Operations

On August 8, 1963, we were founded as Chloroprene Rubber Kogyo K.K. through a
joint investment by Denka and local interests based in Takasaki City. On February
28, 2018, we became a wholly owned subsidiary of Denka. We are engaged in the
manufacture, processing and sale of industrial rubber products.

Products

Rubber compounds, master batches, rubber products made using press
molding and ejection molding (hydrophilic expansive, water-stop and adhesive
products as well as sponge tapes), fire-resistant thermal expansion materials(press molded products, sponges, vulcanized and non-vulcanized rubber andputty)

Address

306, Koyagi-machi, Takasaki, Gunma
Telephone: +81-27-362-7510 Facsimile: +81-27-362-7561
http://www.crk.co.jp

Employees

58 (as of March 31, 2018)

Message from the President

Message from the President

A key management issue for a business wishing to grow is the provision of a favorable
workplace environment. We therefore believe that the company must become more inclusiveand help employees envision a bright and stable future. This is essential as we want ouremployees to be able to take on their duties without anxieties. Based on this belief, we willcontinue to improve our workplace environment, placing the utmost priority on safety andsecurity. In these ways, we will contribute to society while maintaining the trust of customers.

In June, we underwent evaluation aimed at assessing conformity with the 2015 version of theISO 9001. We have thus successfully upgraded our quality management system, incorporating
measures to satisfy new requirements with regard to risk and opportunities. Plans call forreceiving follow-up evaluation in October 2018. Moreover, efforts are now under way to acquire
ISO 14001 certification for our environmental management system, with the goal of passing theevaluation in conjunction with the evaluation of the renewal of the ISO 9001 certification that willtake place in three years.

99 Denka Report 2018 PDF edition

Mitsukuni Ayabe
President

Sizuho Tanaka
President

Hideaki Nagasaka
President

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Hinode Kagaku Kogyo

Kyusyu Plastic Industry
Operations

In fiscal 2018, Hinode Kagaku Kogyo will mark the 69th anniversary of its founding
as Japan’s first commercial phosphate fertilizer producer. Based in Maizuru City,
northern Kyoto, the company began operating in 1949 as the first plant establishedin response to the city’s initiatives aimed at attracting business operators. Due to
its location near Maizuru Port, which boasts beautiful landscapes, the company
has quick access to port facilities handling imported cargoes and materials tobe relayed to such domestic destinations as Hokkaido. Accordingly, we aredetermined to not only produce fertilizers but also make significant contributions to
the development of the port’s logistics operations.

Operations

Kyusyu Plastic Industry was established in 1964. As a Denka Group affiliate, thecompany engages in the processing of hard polyvinyl chloride, which is well known
to entail extremely sophisticated technologies, the manufacture of dual-layered
resin products with superior weather resistance, the ejection molding of acrylic
resin and the annealing and molding of polycarbonate resin products with complex
shapes. Our offerings also include continuously molded polyethylene corrugatedpipes with inner diameters ranging from 50 to 1000 millimeters.

Products

・TOYO GUTTERS hard polyvinyl chloride rain gutters
・TOYODRAIN corrugated pipes used as underground drainpipes for agriculture
and construction use
・DENKA THERMOSHEET with superior thermal conductivity and insulation
property

Products

YORIN (fused magnesium phosphate)
TORETARO (fused silicate phosphate fertilizer)

Address

660, Aza Kuratani, Maizuru, Kyoto
Telephone: +81-773-75-5760

Address

209-1, Naka Aza Ominato, Tamana, Kumamoto
Telephone: +81-968-72-5121

Employees

40 (as of March 31, 2018)

Employees

100 (as of March 31, 2018) (including part-time and temporary workers aswell as those seconded from other Group companies)

Message from the President

Message from the President

Hinode Kagaku Kogyo produces long-selling YORIN fused magnesium phosphate, as
well as TORETARO fused silicate phosphate, which has garnered a solid reputation as afertilizer for use in rice paddies and at vegetable farms. In recent years, we have invited anumber of farmers to take part in plant tours. While allowing them to take a close look at
our production lines, we often exchange opinions with them and acquire valuable insights.
Building on strengths backed by a longstanding manufacturing legacy, we will engage inforward-looking efforts to enhance our technologies as we aim to remain a strong supporterof the development of Japan’s agricultural sector.

For more than 50 years, we have been engaged in manufacturing, with 100 employees
working together to deliver products that contribute to and meet the needs of society.
Looking ahead, we will continue with these pursuits while fulfilling our responsibilities andobligations as a corporate citizen via the creation of employment and the payment of tax.
In the course of day-to-day operations, we will also strive to create an inclusive workplaceenvironment in which employees find their job fascinating and fulfilling.

Hisao Akimoto
President

Kazuyuki Koyama
President

Denka Azumin

Operations

Denka Azumin is the single domestic humic acid fertilizer manufacturer equippedwith an integrated system encompassing the nitric acid reaction of raw material
lignite. We were founded as the Hanamaki Plant of Japan Metals & Chemicals Co.,
Ltd. and began producing AZUMIN (magnesium humate fertilizer) in 1963. In July
2003, the plant was reorganized into Denka Azumin Co., Ltd. via business transfer.
Since then, we have been serving as Denka’s key fertilizer production facility.

Products

AZUMIN (magnesium humate fertilizer and farm soil improver)

Address118, 5 Chiwari, Nimaibashi, Hanamaki, Iwate
Telephone: +81-198-26-2131

Employees

24 (as of March 31, 2018)

Message from the President
We have manufactured AZUMIN for more than half a century, helping to improve farm soils
and thereby to support Japan’s agricultural sector. We handle such hazardous substances asnitric acid. Accordingly, we consider steadily implementing daily safety assurance activities
key to continuing our operations. In recent years, we began producing humic acid liquid
fertilizers as well as chemical fertilizers based on ash from the combustion of chicken
droppings as we push ahead with business development aimed at contributing to agriculture.
Going forward, we will strive to raise employees’ safety awareness while contributing to thecommunities surrounding us.

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Takahito Masuda
President

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