FY2012 CSR Website CSR > Site Reports > Worksites > Tokuyama Plant

The Tokuyama Plant, which started operating in 1965, is located in the Shunan
Industrial Complex of Yamaguchi Prefecture. The plant manufactures butadiene
with the GPB process, an extraction distillation technology developed by ZEON, andthen uses the butadiene to produce synthetic rubber, a raw material in fuel-efficienttires; synthetic latex, a raw material in surgical rubber gloves; and polymerized tonerfor printers, a product that ZEON was first in the world to produce on an industrialscale. The Tokuyama Plant operates on a global level as ZEON Corporation’s key

Aerial view of the Tokuyama Plant

synthetic rubber producer, exporting many of these products to overseas markets.
The Shunan Industrial Complex is said to have had its start when Kodama Gentaro, general of the JapaneseImperial Army and native of Tokuyama, recognized the advantages of Tokuyama as a port location and, responding
to military demand created by the Russo-Japanese War, decided to construct a coal briquette manufacturing plant
there for the navy in 1905. Shunan has since become a manufacturing hub for the petrochemical industry and manyother industries.
Wander around the Tokuyama Plant today and you will find various remnants from olden days when the site wasused for the manufacture of coal briquettes. Most symbolic of this history is ZEON Shrine, built in 1966 in dedication
to the divided portions (bunshin) of the three kami of Nachi Gongen, Sumiyoshi Myojin, Toishi Hachiman and to pray
for safe operations, employee health, and business growth. To the west of the shrine is the “monument of martyrs,”
erected in 1924 to commemorate martyrs from the Tokuyama area, along with other artifacts.
While basing its operations on the principle of safety and stability first, the Tokuyama Plant tries to build rapport
with its local community in various ways. For example, the plant hosts the annual Waraku Odori Dance Festival andhas also invited local residents to observe its emergency-response drills.

The Tokuyama Plant is located adjacent to the city center and residential areas around Tokuyama Station. To
support the sustainable growth of society and earn the trust of the local community based on safe, stable operations,
we are creating a dynamic and productive plant. To do this we introduce production innovations with the fullparticipation of all employees under the banner, “Greetings and 3Ss (seiri, seiton, and seisou, or neatness,orderliness, and cleanliness) are the Foundation of Everything We Do.” Employees at the plant actively collaborate
with the local community to tackle various public issues, including collecting bottle caps and can tabs and cleaning
nearby streets and the Higashi River, which flows alongside the plant.

-1-FY2012 CSR Website CSR > Site Reports > Worksites > Tokuyama Plant

1. Reducing toxic chemical substances
In fiscal 2011, we introduced an exhaust gas purification system, which, as its benefits materialize in fiscal 2012 andthereafter, will allow us to further reduce emissions of substances subject to PRTR regulations. PRTR emissions infiscal 2011 were 3.1 tons Making the most of our new exhaust gas purification system to move one step closer tozero emissions, our target in fiscal 2012 will be 2.2 tons or less.

Substances subject to PRTR law

2. Reducing industrial waste
In fiscal 2008, we set a zero emissions plan for industrial waste sent to landfills. In fiscal 2010, we achieved zero
tons per year by meticulously separating waste generated at the plant and through recycling and reuse efforts (weexpect the same results for fiscal 2011). Going forward, we intend to maintain our zero-landfill-waste performanceand further promote and manage 3R (reduce, reuse, and recycle) activities to contribute to a more sustainabl esociety.

-2-FY2012 CSR Website CSR > Site Reports > Worksites > Tokuyama Plant

Amount of Waste to Landfill

3. Reducing air and water pollution
We were able to steadily reduce NO x emissions into the air through energy conservation and improved combustion
by installing dry air emission processing equipment and optimizing the amount of combustible air of the boilers. We
also switched to lower sulfur fuel in an aim to slash SO x emissions. For water pollution, we are reducing COD andtotal nitrogen discharge every year by upgrading our wastewater treatment facilities and improving our treatment
methods.
Based on these efforts we were able to clear all our environmental standards, and in fiscal 2012 we plan tomaintain our current performance.

CO2 emissions-3-FY2012 CSR Website CSR > Site Reports > Worksites > Tokuyama Plant

SOx and NOx emissions

Total effluent waste water discharge, COD emissions, total nitrogen discharge and total phosphorus discharge

4. Saving resources and energy
To aggressively address technical issues associated with energy-hungry facilities, we organized an energy
conservation work group and promotion committee at the plant that draws upon the expertise of a professional
consultant. We are also mobilizing the collective knowledge of all employees to achieve our target for reducing unit
energy consumption to less than 90% of 1990 levels through day-to-day operational management. While progress insolving this extremely difficult problem has been unremarkable so far, we are steadfastly seeking improvements byreviewing actions from every perspective and introducing innovative technologies.

-4-FY2012 CSR Website CSR > Site Reports > Worksites > Tokuyama Plant

Total amount of energy and Unit energy consumption index

5. Environmental Data
Tokuyama Plant

FY2007

FY2008FY2009FY2010FY2011

201,815

191,364

188,743

217,074

186,784

17

15

2.8

0.7

1.4

13,477

12,26314,366

16,916

13,697

0.7

0.7

0.7

0.6

0.6

407,934

417,519

386,572

464,767

388,603

20

18

7.6

2.2

3.1

30,65025,881

19,84521,516

18,718

10,211

4,512

3,857

3,756

3,762

77

15

10

0.0

0.0

CO2 emissions (tons)

270,000

275,000

252,091

294,112

248,000

SOx emissions (tons)

647

547

447

483

502

280

311

308

358

272

---

7,824

9,482

6,331

7,704

7,713

6,942

7,884

81

79

6877690.6

0.8

0.5

0.7

0.6

27

32

31

33

27

Total consumption (crude oil equivalent, kL)

98,938100,50293,485

107,497

89,173

Unit consumption index (1990 = 100)

101%

106%

102%

98%

98%

535,323

518,702503,567

599,400

498,167

Butadiene consumption (tons)
Toxic substances

Butadiene emissions (tons)
Acrylonitrile consumption (tons)
Acrylonitrile emissions (tons)

Substances
subject to PRTR
law

Industrial waste

Atmosphericemissions

Consumption (tons)
Amount emitted (tons)
Amount generated (before volume reduction)(tons)
Amount generated (after volume reduction)(tons)
Amount sent to landfill (tons)

NOx emissions (tons)
Water resources (Industrial water + Ground water +3Waterworks) consumption (1,000 m )Total effluent waste water discharge
3(1,000 m )COD emissions (tons)
Waste water
Total phosphorus discharge (tons)
Total nitrogen discharge (tons)
EnergyProduction of PDR equivalent (tons)-5-FY2012 CSR Website CSR > Site Reports > Worksites > Tokuyama Plant

In line with ZEON’s Mid-Term Management Plan, including the Enterprise Blueprint for 2020: “ZEON creates thefuture today through the power of chemistry,” the Tokuyama Plant continuously improves and innovates its
production technologies to achieve a 100% yield rate* and build certifiable quality into all of its products. We aim to
be a plant that consistently delivers high-quality products that satisfy our customers.
*Yield rate
The percentage of products rolling off the production line that pass quality inspections. A 100% yield rate mean s that no defective products were produced.

VOICEFor Safer, More Reliable, More Socially Responsible Products

Our mission at the Tokuyama Plant is not just to produce products that satisfy
standards. Our products should have a greater purpose: to contribute to society’s
sustainable growth, to help improve the global environment, and to fulfill ZEON’s
CSR Policy. To achieve this, zero accidents, zero injuries, and zero pollution areobviously important. But we also need to achieve zero PRTR emissions, reduce
CO2 emissions, and by stabilizing manufacturing operations, develop a cost
structure by which we can secure a profit even at low capacity utilization.

Shinichi Hirakawa,
Tokuyama Plant Manager

As the mother plant* of a plant currently under construction in Singapore that willproduce synthetic rubber for fuel-efficient tires, the Tokuyama Plant also needs to support its overseas production
centers, not only technically but by developing human resources that can drive reforms and improvements from aglobal perspective. I hope to draw on the knowledge of all our employees in our quest for greater innovation inproduction.
*Mother plant
A plant that applies new technologies developed in Japan before they are adopted at overseas subsidiary plants.

1. Interaction with the local community (37th ZEON Waraku Odori Dance Festival)
ZEON's Waraku Odori Dance Festival is one of Shunan district's annual summer
evening events and is organized by Tokuyama Plant employees. Since 1974, thisold-fashioned summer festival has fostered connections among our most valued
stakeholders, including local residents and plant employees and their families. The
event is a popular attraction every year, but last year’s festival saw an attendance ofmore than 2,000 people, making it a great success. Employees talked with local
residents as they served up foods such as yakitori and oden. The Waraku Odori, aDoing the ZEON Waraku Odori

simple dance that encourages everyone to join, topped off the evening. Onehighlight of last year’s festival was artwork made from old bottle caps. Seeing somany bottle caps patiently collected and reorganized in a visually pleasing way
brought enjoyment to lots of people. The Tokuyama Plant will forever cherish its
relationship with local residents and contribute to environmental protection andsocial welfare.
Bottle cap artwork-6-FY2012 CSR Website CSR > Site Reports > Worksites > Tokuyama Plant

2. Local Public Relations (Emergency-Response Training)
In fiscal 2011, the Tokuyama Plant invited local residents to visit the plant andobserve comprehensive emergency drills carried out by plant employees. This was
the first time we opened the plant during drills to communicate what we do on aregular basis to maintain safety.
Visitors watched from close by as employees poured their energies into firefighting and life-rescue training. After the drills, visitors gave us important feedback,Local community members also attended

expressing their hopes that the plant would do more to ensure safety and also thatthey were pleased to see the seriousness with which ZEON approaches this issue.
We will continue efforts like this to keep our local community and the broader public
safe and worry-free.

Comprehensive emergency drill-7-