We aim to create social value throughinnovative gas solutions that increaseindustrial productivity, enhance humanwell-being and contribute to a moresustainable future.
Sustainability Management
We will contribute to the realization of a sustainable society throughout the entire value chain.

ESG and Materiality
A list of the Company’s ESG Materiality themes and the process used for identifying them.

Four Key Themes

Theme: Management Issues

Theme: The EarthEnhancement of Governance

Promotion of Environmental Management

Initiatives to Ensure Safe and Stable Supplies

Initiatives for Protecting the Global Environment

Theme: Society

Theme: People (Company and Organization)

Development of Products and Services That Contribute

Respect for Human Rights

to Resolving Environmental and Social Issues
Product and Service Reliability

Human Resource Development and Training

Contribution to Medical Care

Health and Productivity Management

Intellectual Property and R&D

Occupational Health and Safety
Communication with Shareholders and Investors
Social Contribution Activities

Dialogue with Stakeholders

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Sustainability Management
Environmental and Social Contribution across the Value Chain
We work to ensure a solid grasp of our environmental and social impact on stakeholders through all of our businessprocesses—from development and production through to supply, sale, and use, that is, across our entire value
chain—and implement a variety of initiatives designed to avoid or mitigate related risks. Looking ahead, we will also
strive to contribute to a sustainable society by reinforcing collaboration not only with Group companies but with all
stakeholders.

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ESG Management System
Nippon Sanso Holdings holds a meeting of the Global Strategy Review Committee, chaired by the president andCEO, once a year. The committee decides on the policy for key initiatives in technological risk management(including safety, quality and product safety, environmental, and intellectual property risks), based on the
President’s Basic Policy on Technological Risk Management.
Nippon Sanso Holdings Auditing and Risk Management Structure

Nippon Sanso Holdings Group Risk Management Structure

The Presidential Policy Directive on Technology Risk Management
The President CEO of Nippon Sanso Holdings requests all the Group members to comply thoroughly with theapplicable laws, regulations, and rules as “The Gas Professionals,” and herewith has established the following
policy on the risk management of public safety and security, quality, product safety, environmental sustainability,
and intellectual property, that are essential to running our business.
All the Group members are expected to: • thoroughly comprehend this policy and put it into practice, • minimize therisk of loss by planning, doing and continuously improving the corporate risk management system and business
continuity plan (BCP) to cope with disasters, e.g., large-scale earthquakes, • make sincere efforts to raisecustomers’ satisfaction over our business activities, • obtain and maintain social credibility by achieving public
safety and security, and contribution to environmental sustainability of the earth, and • pursue a sound prosperity ofour business and an enhancement of our corporate value.
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Public safety and security：We, Nippon Sanso Holdings, implement voluntary activities for safetyassurance based on our motto of “Selling gas is selling safety.”
Quality：We, Nippon Sanso Holdings, accurately identify the sophisticated and diversifying needs ofcustomers and society,and offer the services and products of the best suited quality in response.
Product safety：We, Nippon Sanso Holdings, offer safer and more reliable products by minimizing
dangers inherent over the life of the products.
Environmental sustainability：We, Nippon Sanso Holdings, drive action to reduce the impact on the
global environment and prevent pollution.
Intellectual property：We, Nippon Sanso Holdings, by obtaining the exclusive right of intellectual
properties and exploiting them, protect our business from patent litigation that might be imposed by otherparties.

Contribution to the SDGs
The Group’s mainstay products are industrial gases. They are made using the natural resource of air. We therefore
consider the global environment to be an irreplaceable resource and view its preservation in a sustainablecondition for the future to be our natural mission. The Group has formulated its ESG Materiality themes and willcontribute to the SDGs through its industrial gases business.

Participation in Initiatives
The Group participates in a range of initiatives that include Japanese and overseas companies. Nippon Sanso
Holdings announced its agreement with the TCFD recommendations in 2019. For the new medium-term
management plan that starts from FYE2021, we will work to disclose information in line with the recommendations,covering governance, strategy, risk management, indicators, and targets. We will also work to contribute to therealization of the 17 goals and 169 targets presented in the SDGs, promoted by the United Nations.

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ESG Materiality
With the aim of contributing to the realization of a sustainable society, Nippon Sanso Holdings works to ensure asolid grasp of its impact on the global environment, society, and people (the Company and its organizational
structure) through all of its business processes, that is, across the entire value chain. To this end, we have defined
the roles we are expected to play in addressing issues we have identified as being of material importance, which
are grouped under four themes, including management issues.
External environment
Low-carbon society

Climate change

Falling birthrate and aging population
Theme

Management
issuesGlobalenvironment

2021

Materiality(Material Issues)•Compliance•Corporate
governance•Process safety•Efficient use ofresources andenergy•Climate change•Securing of cleanwater resources•Preservation of
biodiversity

Technological innovation
International situationRole of the Nippon Sanso HoldingsGroup•In adherence to high ethicalstandards, strive to conduct
corporate activities in a fair,
impartial, and sincere manner bypromoting and maintaining
compliance with relevant laws,
regulations, international norms,
and internal rules.
•Reinforce corporate governanceby improving managementtransparency and fairness, as well
as by increasing management
agility through efforts to enhance
management oversight functions
and accelerate decision-making.
•Strengthen independent systems
for ensuring process safety in linewith our belief that selling gases iscommensurate with selling safety.
•Realize stable supply of industrial
gases, thereby ensuring our ability
to provide the gases ourcustomers need when they areneeded.
•Introduce effective ASUs that help
reduce electric power consumption
and CO2 emissions.
•Lower fuel consumption by tanker
trucks to reduce related CO2
emissions.
•Fortify framework for mitigatingclimate change through the
reduction of greenhouse gas
emissions and other efforts.
•Promote the reduction ofgreenhouse gas emissions and thecreation of opportunities tomitigate/adapt to climate change
and expansion of business throughthe sale of vacuum-insulatedbottles and cookware.

Principal Initiatives

Relevant
SDGs•Reinforcement ofsystems based onJapan’s Corporate
Governance Code•Initiatives to ensure
safe and stablesupplies•Continuous
implementation ofcompliancetraining•Promotion ofenvironmental
management•Initiatives to protect
the global
environment5Society

People(theCompany anditsorganizational
structure)

2021•Contribution tomaintenance ofphysical health•Contribution to
medical care
•Response to foodand agriculturerelated issues•Increase in
consumersatisfaction•Contribution to
upgrading andexpanding social
infrastructure•Response to smart
societies•Respect for humanrights•Occupational
health and safety•Human resources
development andtraining•Diversity andinclusion•Product andservice reliability•Promotion of
measures toimproveinformation
security andprivacy•Stakeholder
engagement•Contribution tocommunities•Promotion ofsophisticated ICT
use•Participation ininitiatives anddemonstration ofleadership•Promotion ofsustainability inthe supply chain•Contribute to health and medicalcare through the provision of
products for the medical field.
•Provide industrial gases andrelated equipment that contributeto the resolution of key issues byhelping protect food resources
and improve agricultural
productivity.
•Leverage the advantages of LPgas, including its low carbon
footprint and disaster-resistantnature of its distribution system,
to create business opportunities
and expand business.
•Contribute to the realization of
comfortable and environmentfriendly lifestyles through the saleof Thermos brand products.
•Ensure that customers can use
products and services with peaceof mind by strengthening systems
to ensure quality and safety
across the entire product life
cycle.
•Respect human rights in corporate
activities and require thatbusiness partners do not violate
human rights or engage in any
form of discriminatory behavior(through such measures as thepromotion of anti-harassment
initiatives and the establishmentof hotlines).
•Promote health management inaccordance with relevant nationaland regional laws andregulations, create a safe work
environment, while at the sametime maintaining and advancing
the physical and mental health of
employees.
•Offer equal opportunities in hiring,placement, advancement, andskill development as well as seek
to foster and develop humanresources from a medium- andlong-term perspective.
•Actively seek to secure diverse
human resources with diverse
values without regard toconsiderations such as nationality,
age, or religion and promote
diversity and inclusion incorporate activities (e.g.,
promotion of active roles for
women, hiring of non-Japanese,
employment of people withdisabilities, etc.).
•Recognize the importance of andresponsibilities associated withprotecting information assets incorporate activities and ensure
appropriate information
management to prevent leaks of•Development of
products that
contribute tosolutions forenvironmental andsocial issues•Reinforcement ofquality assurance
and management
systems•Thorough internal
promotion of the“Policy on thePrevention and
Eradication ofHarassment in the
Workplace”•Employee
education andtraining•Maintenance andimprovement of
information
security systems•Promotion ofsophisticated ICT
use•Dialogue withshareholders andinvestment
analysts•Initiatives toensure safe andstable supply•Creation ofenvironments topromoteinnovation anddiversity•Social contribution
activities•Healthmanagement
initiatives•Enhancement of
information
disclosure

6confidential information pertaining
to customers, business partners,
Nippon Sanso Holdings, andother parties.
•Step up efforts to contribute tosociety through business activities
and deepen understanding ofcommunities while at the sametime working continuously torespond to communities’ requests
and expectations.
•Earn stakeholders’ trust throughrespect and close dialogue andby reflecting their views incorporate activities, and work withstakeholders to realize a better
society.

ESG Materiality Identification Process
Based on the materiality matrix set out by the parent company, Mitsubishi Chemical Holdings Corporation, we haveformulated the Nippon Sanso Holdings Group’s version, deciding on the importance of management issues basedon their materiality. In the identification process, the suitability of the themes was discussed by the KAITEKI
Promotion Committee,* which is an ancillary body of the Management Committee that promotes Mitsubishi
Chemical Holdings’ vision, “Realizing KAITEKI.” Moreover, in accordance with the identification process detailed
below, we are examining the revision of ESG materiality and KPIs for the next medium-term management plan.
＊The discussion will be conducted within the sustainability strategy of the Global Strategy Review Committee,
which was newly established on October 1, 2020 as part of a reorganization that was conducted on the same dayin conjunction with the transition to a holding company structure. The following identification process is presented
based on the results of initiatives taken under the corporate structure prior to September 2020.

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2021

8

Theme: Management Issues
Enhancement of Governance＞

In March 2015, the Financial Services Agency and the Tokyo Stock Exchange announced Japan’s
Corporate Governance Code (the “Code”). The Company has taken the principles of the Code seriously
and worked to strengthen its structure in line with the Code’s main themes. Looking ahead, we willcontinue working to improve compliance and realize a sustainable society.

Corporate Governance Framework
We have established corporate governance principles to serve as guidelines for corporate governance across the
Nippon Sanso Holdings Group. With the aim of ensuring sustainable growth and increasing corporate value overthe long term, and taking into account the positions of stakeholders, we strive to guarantee the transparency andfairness of decision-making. This reflects our belief that the key to effective corporate governance is to bolster thestrength of management by ensuring the effective use of available management resources and making swift,
resolute decisions.
Auditing Structure and Risk Management Structure

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Initiatives to Improve Corporate Governance
Date

Area

June 2015

Composition of the Board of
Directors

June 2015
July 2015

ComplianceOctober 2015

Other

June 2016

Committees

June 2016

Remuneration for directors

July 2017

Committees

February
2018

Compliance

June 2018

Risk management

March 2019

Compliance

Initiative
Revised Articles of Incorporation to reduce the maximum number of
directors on the Board of Directors from 20 to 15, reduced the actual
number of directors on the Board of Directors from 16 to 11 andappointed two independent outside directors
Established the position of Chief Compliance Officer (CCO) with theaim of ensuring the effectiveness of compliance
Established the Internal Control Office to assist the efforts of the
CCO
Formulated Principles of Corporate Governance
Formulated disclosure policy
Established the Advisory Committee on Appointments andRemuneration, consisting of the chairperson of the Board of
Directors, the president (CEO), and independent outside directors,
to improve the transparency and objectivity of procedures forappointing and determining remuneration for directors
Introduced performance-linked bonuses tied to degree ofachievement of medium-term management plan targets as anincentive with the goal of driving medium-term growthEstablished the Information Management Committee to create an
appropriate framework for the joint management of information
among pertinent departments
Appointed a Group CCO and six regional CCOs (North America,
East Asia, Taiwan, Southeast Asia, India, and Australia) to create aneffective Groupwide compliance framework and formulated global
compliance management regulations
Established the Global Compliance Committee, which comprises
the regional CCOs and is chaired by the Group COO, to facilitate
the sharing of information on the status of compliance within theGroup, the progress of legal proceedings, and various related
issuesEstablished the TNSC Technical Academy with the purpose ofproviding safety training and ensuring technical skills are passed on,
crucial considerations from the perspective of technological risk
management
Appointed a regional CCO for Europe

Initiatives to Ensure Safe and Stable Supplies＞

The Group has been working to ensure the safety of facilities and equipment, provide safe and secure
operations, and raise awareness of safety. Looking forward, we will continue to steadily reinforce safe andstable supply systems through all industrial gases processes, from production to supply and product use.
As “The Gas Professionals,” we work to provide safe and stable supplies of industrial gases to customers in a wide
range of industries.
To ensure safe and stable supplies of industrial gases, we are stepping up efforts at all Nippon Sanso HoldingsGroup production and supply facilities, as well as at the facilities of our sales partners and at our customers’
premises, to strengthen our capabilities at the production, supply, and use stages.
In line with our belief that “Selling gas is selling safety,” we rigorously implement safety management, having built asafety management system headed by the president and CEO under the president’s approach of steadily
implementing independent safety measures. Specifically, the Global Strategy Review Committee, chaired by thepresident and CEO, meets every year, and the decisions made by the committee on matters including safetyrelated technology risk management are incorporated into the activity plans of each region around the world toensure they are rigorously implemented.

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Safety Management System in Nippon Sanso Holdings
The Group has established the NSHD Group Standards related to safety, quality, and the environment, and aims tofurther advance safe and stable supplies of industrial gases while integrating its standards in each region.
Furthermore, at the TNSC Technical Academy, we conduct experience-based training to increase risk tolerance
among other measures to implement training for Group employees in regions outside of Japan.
In addition to the above, the Group conducts the following kinds of safety activities in each region.
The Taiyo Nippon Sanso Group has bolstered its efforts to prevent accidents, such as presenting safetycommendations to recognize the results of independent safety activities in its Production Division. In addition, toensure the safe use of industrial gases by customers, we offer safety seminars regarding the properties of industrial
gases, their dangers, and safe handling. We have also designated 55 emergency response depots nationwide toprovide rapid responses to gas leaks occurring during transport of specialty gases or during use by customers, and
we also conduct training and drills for emergency response personnel.
To conduct these initiatives systematically, the Taiyo Nippon Sanso Group has established the following safety
management organization.

Taiyo Nippon Sanso Group Safety Management Organization
Safety and Quality and Product Safety Management Framework* Specified sites are mixed-purpose sites—primarily production and research facilities—that are under direct
divisional supervision and for which integrated safety management is necessary.
On the other hand, overseas, the Matheson Tri-Gas, Inc. Group aims to realize accident prevention througheducation based on e-learning and practical drills for the production and transport divisions. The Group conducts
regular drills for containing leaking cylinders so that it can response rapidly to emergency situations such as leaksof specialty gases. The Nippon Gases Euro-Holding S.L.U. Group holds multiple accident prevention campaigns
with full participation by all employees at its production facilities, constantly promoting and improving safety
awareness and skills. At production sites in the Asia and Oceania region, we actively conduct safety patrols to
promote improvements, and the regional safety officers come together at safety conferences to pursue bestpractices, aiming to supply industrial gases more safely and stably.

Audits
We conduct safety and environmental audits at our own sites, as well as at sites operated by affiliated companies
to manage technological risks related to, among others, safety and the environment. Safety and environmental
audits, the main goals of which include reinforcing compliance and preventing accidents, are conducted by theTechnical Audit Dept., in principle every five years, at all Group companies in Japan and overseas. In FYE2020,
safety and environmental audits were conducted at 26 sites belonging to 21 companies in Japan and four sites
belonging to two companies in two countries overseas (Asia). Internal audits also were conducted in the UnitedStates and Europe and information was shared with the Technical Audit Dept..
Furthermore, in Japan we conducted management inspections, in which the general manager of the pertinent Taiyo
Nippon Sanso Corporation division or branch assesses the status of safety and environmental activities from amanagement perspective.
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Theme: The Earth
Promotion of Environmental Management
Nippon Sanso Holdings holds a meeting of the Global Strategy Review Committee, chaired by thepresident and CEO, every year. The committee decides on the policy for key initiatives for the environment
for each year.
We have established a framework for promoting a broad range of initiatives with the aim of contributing toenvironmental protection.

Environmental Management Framework
Nippon Sanso Holdings has established an environmental management framework for promoting policies decided
by the Global Strategy Review Committee at its Group companies.

In line with the Group’s Rules for Environmental Management, our Environmental Management Committee from
Taiyo Nippon Sanso Group, which is chaired by the individual responsible for environmental management, meetsonce annually. We have established an Environmental Contribution Investigation Working Group as a subsection of
the Environmental Management Committee to guide our efforts to address particularly important challenges.
The Environmental Management Committee’s annual meeting formulates decisive initiatives to address issues
determined by the Technological Risk Management Conference and deliberates annual activity reports and activity
plans for the Company as a whole, corporate headquarters, branches, specified sites, and working groups.
Environmental Management Framework＊ Specified sites are mixed-purpose sites—primarily production and research facilities—that are under direct
divisional supervision and for which integrated process safety management is necessary.

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Environmental Training
Taiyo Nippon Sanso provides a wide range of environmental training to all employees with the aim of raising
employee awareness of environmental initiatives. Our environmental training program encompasses components
focusing on environmental targets, environmental laws and regulations and emergency responses, as well as
training for internal auditors.
New recruits are given basic Group training for new employees to promote the understanding of basic
environmental issues and encourage familiarity with the Group’s environmental initiatives and achievements.

Certification under ISO 14001
A total of 12 Nippon Sanso Holdings Group companies in Japan and 29 Group companies overseas have obtained
certification under ISO 14001, the International Organization for Standardization (ISO)’s standard for environmental
management systems.

Japan

Taiyo Nippon Sanso
Corporation
Thermos K.K.
Shizuoka Sanso Inc.
Japan Fine Products Co.,
Ltd.
Sogo Kariya Sanso
Corporation
Taiyo Nippon Sanso
Engineering Corporation
Taiyo Nippon Sanso Gas
and Welding Corporation
Taiyo Nippon Sanso
Higashikanto Corporation
Daiichikaimei Co., Ltd.
Nippon Ekitan Corporation
Nissan Tanaka
Corporation
Funtaigiken Co., Ltd

Overseas
Matheson Tri-Gas, Inc.
Nippon Sanso (Thailand) Co., Ltd.
Ingasco, Incorporated
Ayutthaya Industrial Gases Co., Ltd.
Vietnam Japan Gas Joint Stock Company
Leeden National Oxygen Ltd.
Taiyo Nippon Sanso Clark, Inc.
Taiyo Nippon Sanso Philippines, Inc.
Nippon Gases Scandinavia Holding AS
Nippon Gases Offshore Asia Pacific Pte
Ltd.
Nippon Gases Offshore Tanks Ltd.
Nippon Gases Offshore Ltd.
Nippon Gases Espana S.L.U.
Nippon Gases UK Ltd.
Nippon Gases Norge AS
Nippon Gases Deutschland Holding
GmbH
Nippon Gases Deutschland GmbH
Nippon Gases Danmark A/S
Nippon Gases Belgium HQ
Nippon Gases Sverige AB
Rivoira Gas S.r.l.
Rivoira Operations S.r.l.
Rivoira Pharma S.r.l.
Rivoira Refrigerant Gases S.r.l.

Taiyo Nippon Sanso Engineering
Taiwan, Inc.
Taiyo Nippon Sanso Taiwan, Inc.
Dalian Chanxhing Island Taiyo Nippon
Sanso Gas Co., Ltd.
Matheson Specialty Gas ( Xi’an) Co.,Ltd.
Shanghai Taiyo Nippon Sanso Gas
Co., Ltd.

Acquisition of Green Management Certification
Green Management is an environmental certification system for companies engaged in transportation,
including those operating truck, bus, and taxi fleets, administered by the Foundation for Promoting Personal
Mobility and Ecological Transportation. Efforts to reduce the environmental impact of their operations arescreened based on the foundation’s Green Management Promotion Manual, with companies judged to be
implementing particularly key initiatives earning Green Management certification and registered. As of
October 2020, a total of 11 of the 19 Taiyo Nippon Sanso Group and subcontracted logistics companies* weuse, including Nissan Unyu K.K., have earned Green Management certification.
＊ For more information, please refer to the Sustainability Data Book.

Initiatives for Protecting the Global Environment
We promote a broad range of initiatives to prevent global warming. Of particular note, we are taking steps
to reduce energy consumed per unit of production at gas production facilities, promoting energy-saving
measures at various sites, and striving to increase the efficiency of transport by tanker truck.
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We promote a broad range of initiatives to combat climate change with the aim of helping mitigate global warming,
the central theme of our environmental protection efforts. Of particular note, we are taking steps to reduce energy
consumed per unit of production at gas production facilities, promoting energy-saving measures at various sites,and striving to increase the efficiency of transport by tanker truck.
We also promote the development of products that reduce our impact on the environment and propose solutions
that contribute to global environmental protection.

Environmental Impact of Oxygen, Nitrogen, and Argon Production
The production of the Nippon Sanso Holdings Group’s core air separated gases (oxygen, nitrogen, and argon)
requires a considerable amount of electric power.
Air separation units produce oxygen, nitrogen, and argon simultaneously by separating atmospheric air into its
constituent gases. Air is first compressed, a process that is highly energy intensive and thus uses a significant
amount of electric power. Compressed air is cooled almost to the point where the gases liquefy. After this, it isready for the distillation column, where it is separated into its gas and liquid components using a thermal distillation
process. Nitrogen, which has a low boiling point, concentrates in the gas and is withdrawn from the top of thecolumn, while oxygen, which has a higher boiling point, concentrates in the liquid and is withdrawn from the bottomof the column. Argon, which has an intermediate boiling point, is withdrawn from the middle of the column.
Air Separation Unit: Simplified Process Flow

Preventing Global Warming
Our efforts to contribute to the prevention of global warming center on reducing energy consumption at gas
production facilities. We have established an Environmental Contribution Investigation Working Group as asubsection of our Environmental Management Committee to improve energy consumption per unit of production. In
FYE2020, consumption of energy per unit of production by such facilities was down 2.9% from FYE2006, the baseyear used for this measurement, reflecting the installation of energy-saving type air separation units and othermeasures.
Moreover, these facilities’ consumption of electric power per unit of production was down 29.5% from FYE1991.
Efforts by gas production facilities to reduce energy consumption included developing and installing energy-efficient
air separation units, replacing air separation unit components with new high-efficiency versions and optimizing
facility operations to better reflect demand.
These facilities also promote initiatives in line with the Commitment to a Low-Carbon Society plan formulated by
the Keidanren (Japan Business Federation) and the Japan Chemical Industry Association (JCIA)’s action plan forrealizing a low-carbon society.

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Electricity Consumption at Gas Production Facilities＊ in Japan / Energy per Unit of Production Index

Other Initiatives
Challenges and targets

1. Promote energy-saving
measures at various sites
to reduce electric power
consumption(Target: Average annual
reduction of 1.0% over the
medium to long term)

2. Increase the efficiency oftransport by tanker truck to
reduce fuel used in thetransport of products

3. Contribute toenvironmental protection
through our products byincreasing sales ofenvironment-friendly
products

2021

Principal initiatives•Cut unnecessary electric
power consumption by
office and lighting
equipment•Replace air conditioning,
office equipment, lighting,shared, and otherequipment with energyefficient new models•Implement no overtimedays and Cool Biz (liberal
summer dress code to
reduce use of air
conditioning)•Optimize shipping routes•Rethink delivery intervals•Promote the weighing ofcargo in the presence ofthe customer•Introduce new-modeltanker trucks•Reinforce green driving
training
Take steps to bolster salesof hydrogen refuelingstations, SCOPE－JET®,
MG Shield®,SF6 recovery
service, Thermos products,
nitrogen supply systems forlaser processing, andcombustion-type gas
abatement systems

Progress as of
FYE2020

Relevant companies/
departments/sites＊1

Down 4.9%(from FYE2019)

All Taiyo Nippon Sanso sites(excluding gas production
facilities)

Down 28.0%(from FYE1991)

Contribution to
overall
reduction:
2,373,000
tonnes of CO2＊2

Group and subcontracted
logistics companies＊1

Nippon Sanso Holdings and its
consolidated subsidiaries in
Japan

15

＊1

For information on relevant companies/departments/sites, please see the Sustainability Data Book.

＊2

Contributions to the reduction of greenhouse gas (GHG) emissions were calculated in accordance withJapan’s Ministry of Economy, Trade and Industry’s Guideline for Quantifying GHG Emission Reduction Contribution(formulated in March 2018).

Material Balance
Environmental Inputs and Outputs of the Nippon Sanso Holdings Group’s Operating Activities

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Theme: Society
Development of Products and Services That Contribute to Resolving Environmental and Social Issues
We capitalize on gas control technologies cultivated over many years to promote the development andsupply of a range of products that contribute to global environmental preservation by reducing
environmental impact and help resolve social issues.
Nippon Sanso Holdings aims to realize a sustainable society and global environment through the industrial gases
business. The Nippon Sanso Holdings Group considers air to be a precious natural resource, and the global
environment to be irreplaceable. We naturally consider it our mission to maintain the global environment in asustainable condition for the future. The Group will develop a variety of products that contribute not only to theglobal environment but also to efficiency gains in work-style reforms at customers’ plants and propose them to themarket.

IGSS—A New Gas Supply System That Meets Customer Needs for Converting to Smart
Factories and Realizes Labor Saving and Digitalization of the Gas Industry

The stable supply of gas and monitoring of equipment along with daily container exchange operations play animportant role in ensuring the production, quality, and safety of customers’ products. IGSS is digital innovation
technology using the IoT and RPA as an initiative for the fourth industrial revolution. It was developed as a nextgeneration gas supply system that incorporates the Company’s gas handling expertise accumulated over many
years. By realizing a society in which humans and robots work together cooperatively, and providing new additional
service, we will contribute to operating efficiency gains and labor saving for our customers.

IGSS System
・ C-drive : Automated container conveyor system
・ LUM-system: Container management database system
・ C-eyes: Constant inspection support
・ U-NACS II tab: Tablet operating Gas Cabinets
・ C-recorder: Operation recorder・ TELEOS-i: High-performance monitoring system
Reference: News release (in Japanese only)
C-drive—A robotic system for automated conveyanceof gas containers

Oxygen Combustion Technology Contributed to Energy Saving and CO2 Emissions Reduction

Taiyo Nippon Sanso promotes the development of oxygen
combustion technologies for a broad range of applications,contributing to energy saving and emissions of substances
harmful to the environment. For example, we havedeveloped a combustion technology whereby high-purity
oxygen is added to atmospheric air, increasing the oxygen
concentration to 21% or higher, which boosts combustion
efficiency. This facilitates a higher burner flame
temperature while at the same time lowering theconcentration of NOx, thereby reducing NOx in emissions
and thermal losses. This technology is used in a variety of
applications, where it contributes to both energy saving
and CO2 emissions reduction, including high-temperature
2021

The Innova-Jet® swing burner directs
flames efficiently and evenly over a wide
area via self-induced oscillation.

17

heating furnaces and melting furnaces.
This achievement has its origins in an oxygen burner technology introduced from U.S. firm Air Reduction Company
in 1970, in which fuel (mainly heavy oil) and oxygen were injected into a nozzle tip, diffused, and combusted.
Attaching a nozzle and oxygen burner to a smelting or sintering furnace thus made it possible to improve
productivity. In the United States, the technology was commonly used in aluminum smelting, but in Japan it firstbecame popular as a way to reduce energy consumed by electric furnaces, after which use expanded to include
other industrial furnaces, including aluminum melting furnaces, refractory cement melting furnaces, and aluminumoxide kilns. Taiyo Nippon Sanso has responded by developing a lineup of products suited to diverse needs,
including the SCOPE-Jet® swing burner, which substantially reduces power consumption, and Innova-Jet®, which
achieves a significant reduction in NOx generation during oxygen-enriched combustion.

SF6 Gas Recovery Service Realized Using Proprietary Technologies

SF6 gas is a type of greenhouse gas known as sulfur
hexafluoride. Used in voltage transformers and highvoltage electrical equipment, it has a global warming
potential (GWP) around 20,000 times that of CO2. In
addition, on sites where SF6 gas is used, the purity
decreases after recovery, making it unsuitable for reuse.
Taiyo Nippon Sanso Group company Taiyo Nippon Sanso
Higashikanto Corporation has addressed this issue using
proprietary technologies developed in-house to provide acomprehensive service for recovering SF6 gas, processing
it for reuse, and detoxifying and recycling it. We aim toachieve zero emissions to contribute to preservation of the
global environment and realize a recycling society.

We supply all equipment and services
related to SF6 recovery.

NeoKelvin ®-Turbo 10 kW Large-Capacity Turbo-Brayton Refrigerator for Superconducting
Power Cables

In the area of superconducting power cables, practicaldevelopment is expected to yield benefits in the form of astable power grid and reduced costs. Of particular note,
efforts to achieve commercialization are progressing
overseas, fueled by growing demand for electric power. In
response to rising needs, in May 2013 Taiyo Nippon
Sanso launched the NeoKelvin®-Turbo 2 kW, a TurboBrayton refrigerator developed specifically for thisapplication that uses neon gas as a refrigerant. In July
2016, we commenced sales of NeoKelvin®-Turbo 10 kW,
a large-capacity Turbo-Brayton refrigerator. While
NeoKelvin®-Turbo 2 kW is only capable of cooling testscale superconducting power cables several hundred
meters long, NeoKelvin®-Turbo 10 kW facilitates thecooling of cables upwards of 1.0 km. A prototype of the
NeoKelvin®-Turbo 10 kW is currently being used to cool
cables in a superconducting power cable verification test
being conducted jointly by Korea Electric Power
Corporation and LS Cable & System Ltd. on the Koreanisland of Cheju. In July 2019, actual transmission ofelectric power through these cables began, marking thefirst time a Turbo-Brayton refrigerator has been usedcommercially for cooling superconducting power cables.

2021

NeoKelvin®-Turbo 10 kW large-capacity
Turbo-Brayton refrigerator

18

Energy-Saving Ultra-Large-Scale Air Separation Unit

Air separation units take in atmospheric air and produce
gases, notably oxygen and nitrogen, through liquefaction
and separation.
Taiyo Nippon Sanso’s ultra-large-scale air separation unit
offers distinct advantages over its predecessors in termsof energy efficiency, reducing energy consumption per unitof gas produced by approximately 15%. This
accomplishment reflects three key improvements:
1.

2.

3.

Increased operating efficiency, achieved by boosting
the size of the unit as a whole and of the aircompressor;
Reduced air compressor power requirements,
attributable to the use of a low pressure-loss packed
column; andReduced air compressor energy consumption, a
result of the use of a downflow condenser reboiler 減

Ultra-large-scale air separation unit

Nitrocube ® RE-LT Series of High-Performance PSA Nitrogen Generators

Pressure-swing adsorption (PSA) nitrogen generators
capitalize on differences in the properties of the adsorbent
used to continuously extract nitrogen while alternatelypressurizing and depressurizing compressed air. In
addition to achieving performance improvements bymodifying its in-house adsorbent technologies and bycombining a newly developed proprietary gas separation
process with a control technology that optimizes the actionof the compressor in accordance with the amount of
nitrogen generated, Taiyo Nippon Sanso succeeded in
reducing energy consumption. Thanks to these energysaving technologies, Nitrocube® RE-LT series’ PSA
nitrogen generators are eligible for a tax scheme in Japan
designed to help strengthen small and medium-sizedenterprises.

LT-F nitrogen supply system for laser
cutting machines

JN Series and MG Series of Nitrogen Generators

We install nitrogen generators at the sites of customers
that consume a large volume of nitrogen. We use anenvironment-friendly production process that unlike
conventional processes does not require the use ofchlorofluorocarbon (CFC) refrigerators. The JN series ofnitrogen generators are standardized units with advanced
noise reduction features. Thanks to process modification,
the MG series delivers increased nitrogen yield, achieving
a reduction in energy consumption per unit of gas
produced of approximately 20%. Taiyo Nippon Sanso also
2021

Nitrogen generator
19

provides high-volume supply systems that achieve a
reduction of approximately 30%.

Thermos Vacuum-Insulated Products

The Thermos business of subsidiary Thermos K.K. capitalized on its vacuum insulation technologies cultivated in
the industrial gases business to develop the world’s first vacuum-insulated stainless steel bottle in 1978. The
Thermos lineup also includes portable vacuum-insulated mugs for hot and cold beverages and sports-use vacuuminsulated beverage bottles, as well as the Shuttle Chef series of vacuum-insulated thermal cooking pots, which
continue to cook food with residual heat after being heated for only a short time. All of these products have earned
certification under Japan’s Eco Mark program.
In line with its goal of providing solutions that enhance lifestyles and are environment-friendly, Thermos continues
to promote the development of a variety of products that reduce resource use and contribute to environmental
protection.

【Cold Retention:【Heat Retention:

Vacuum-Insulated Container vs. PET Bottle】

Shuttle Chef vs. Standard Pot】

Shuttle Chef

Package-Type Hydrogen Refueling Station Hydro Shuttle

The Hydro Shuttle ® package-type hydrogen refueling station integrates the four major components of a hydrogen
refueling station—dispenser, pre-cooler, hydrogen compressor, and storage—into a single unit. These compact (9m × 2 m × 2.6 m) units can be used not only as permanent stations but also as truck-mounted mobile stations. The
package format significantly reduces the cost of installation, while the simplification of components means the costof fabrication is only half that of conventional permanent stations. Because it can be used as a mobile station, asingle Hydro Shuttle® offers promise for multiple applications, including on-site stations equipped with hydrogen
2021

20

production facilities, off-site stations that supply hydrogen produced at facilities elsewhere, and traveling stations
that transport hydrogen from one location to another.
In 2017, Taiyo Nippon Sanso started operation of Nimohys Hydrogen Station Minami-Rokugo and Nimohys
Hydrogen Station Setagaya, operated by Nippon Mobile Hydrogen Station Services, LLC (nicknamed “Nimohys”).
Looking ahead, we will continue working to realize an energy-conscious society.

Mobile hydrogen station Hydro Shuttle®

Biogas Refining Units

Our biogas refining units, which employ ordinary-pressure
regenerative PSA, are capable of increasing the purity ofmethane gas to 98% or higher. We recently developed alow-cost compact unit suitable for the small- and mediumscale decentralized biogas plants used by dairy farmers
and food processing factories.
Because high-purity methane gas separated and refinedfrom biogas can be used with city gas appliances, it offers
promise as carbon-neutral energy that can be produced
locally for local consumption, contributing to environmental
preservation.
Biogas refining unit

Sun Cutter® HL-1 Gas Cutting Fuel Gas

Gas cutting is a process that uses fuel gases and oxygento cut steel. Taiyo Nippon Sanso has developed andlaunched Sun Cutter® HL-1, a flammable gas for thisapplication, the principal component of which is hydrogen.
Because it emits almost no CO2, Sun Cutter ® HL-1’s
environmental impact is minimal. It also enhances work
environments by suppressing radiant heat.
It also delivers an excellent cutting performance thanks toa cutting speed 1.4 times faster than existing products,
lower thermal distortion, and improved cut surface quality.

Index of CO2 Emissions (LPG=100)

2021

21

Sun Cutter® HL-1

Cutting steel with Sun Cutter®HL-1

New Compact Combustion-Type Exhaust Gas Abatement System

Gas abatement systems contribute to the prevention of global warming and reduced environmental impact byefficiently decomposing perfluorocarbon (PFC) gases used in electronics manufacturing, which have a longatmospheric lifetime.
Leveraging related combustion technologies, Taiyo Nippon Sanso developed a new burner that can be installednear the dry pump outlet downstream in the chemical vapor deposition (CVD) system that isolates chambers,
reducing the need for previously essential nitrogen and exhaust piping for exhaust gas dilution. By reducing
necessary utilities, this unit achieves a reduction in CO2 emissions attributable to exhaust gas abatement systemsof 50 to 60% compared with existing models.

New compact combustion-type
exhaust gas abatement system:
Flames in burner

New compact combustion-type exhaust gas abatement system: Overall drawing

NACS HEAT® Liquefied Gas Cylinder Heating System

We recently added NACS HEAT®, a liquefied gas cylinder heating system for use with our U-NACS II automatedcylinder cabinet. This energy-efficient system achieves significantly higher energy conversion efficiency thanconventional systems using heating blankets or jacket heaters. In addition, an interlock function that links thesystem to the cabinet itself ensures a safe and stable supply.
Comparison with conventional systems⚫ Electric power consumption: -50%
⚫ Facility costs: -50%
⚫ Supply capacity: 2–3 times⚫ Space required: -30%

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22

NACS HEAT® used with a 1,860-liter cylinder

Installing NACS HEAT® on a 47-liter cylinder

Pesticide system for spider mites using carbon dioxide gas to increase agricultural production

Nippon Ekitan Corporation sells a system for exterminating
spider mites, a pest that affects strawberry cultivation,using pesticide carbon dioxide gas.
Conventional damage is controlled using chemical
pesticides and predator mites. However, spider mites havebecome increasingly tolerant of pesticides, and natural
predator mites have sometime been unsuccessful atremoving spider mites from strawberries.
Nippon Ekitan has combined its carbon dioxide gas
fumigation technology with the spider mite removal
technologies of Utsunomiya University to develop a
pesticide carbon dioxide gas system to eliminate
strawberry spider mites. Carbon dioxide gas is non-toxic,
non-flammable, less reactive with other chemicals, anddoes not adhere to or remain on processed strawberry
seedlings. “Ekika Tansan Gas - Agurikun ®” is a productregistered and approved based on the Agricultural
Chemicals Control Law as carbon dioxide gas used for
spider mite extermination.
The highly gas-tight "Sukusuku ® bag" kills adults and eggs of spider mites that inhabit strawberry seedlings by
enclosing the pesticide " Ekika Tansan Gas - Agurikun ®" after putting seedlings in the bag.
Product and Service Reliability
To ensure safe and stable supplies of industrial gases, we have established systems for process safety
management, as well as for quality management and assurance, and strive to appropriately manage
information.
Nippon Sanso Holdings strives to maintain and improve quality in accordance with the Presidential Policy Directive
on Technology Risk Management to ensure that customers can use its products and services safely and securely.
The Global Strategy Review Committee, chaired by the president and CEO, meets every year to determine thepolicy for important management initiatives for technology risk (quality and so forth). The operating companies
formulate plans based on this policy each fiscal year and carry them out.

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23

Nippon Sanso Holdings Quality and Product Safety Management Framework(Reference) Taiyo Nippon Sanso Group Quality and Product Safety Management Framework* Specified sites are mixed-purpose sites—primarily production and research facilities—that are under direct
divisional supervision and for which integrated safety management is necessary.

Product Quality Control / Quality Assurance
In line with the President’s Policy Directive on Technology Risk Management, the Nippon Sanso Holdings Group
strives to grasp increasingly sophisticated and diverse customer needs and social imperatives and to respond byproviding optimum product quality. To this end, we promote extensive quality control and quality assurance
initiatives aimed at ensuring a high level of quality for our products and services.
In light of recent increases in expectations regarding both quality control and quality assurance, we sought toreconfirm the effectiveness of initiatives implemented to date, as well as to ensure effective compliance, by once
again inspecting related systems at Group companies in Japan and subsequently expanding this effort to include
Group companies overseas.

Quality Management System
We have established a quality management system based on ISO 9001, the International Organization forStandardization (ISO)’s standard for quality management systems, which we continue to leverage with the aim ofsteadily increasing customer satisfaction. Group companies involved in production—including those involved in the
production of industrial gases (oxygen, nitrogen, and argon) and the air separation units and supply equipmentused in their production and storage, the production and installation of semiconductor fabrication equipment, theproduction of medical gases and medical gas supply systems, and all areas of our helium and hydrogenbusinesses—have acquired ISO 9001 certification.
Moreover, Taiyo Nippon Sanso has also earned ISO 9001 certification for its sales and logistics for liquid oxygen,liquid nitrogen, liquid argon, and specialty gases, reflecting our goal of creating a system that ensures not only thequality of our products but also the provision of stable supplies and effective support.
As of March 2020, a total of 81 Group companies are currently certified under ISO 9001. Going forward, we willcontinue effectively using our quality management system with the goal of achieving improvements in customer
satisfaction and continuous improvement in our operations.

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Site Analytical Management Certification System
Reliable analytical management is seen as critical to the quality of industrial gases. To ensure its ability to provide
optimum product quality, the Taiyo Nippon Sanso Group has established a system for certifying production facility
analytical management performance and continue to take steps aimed at bolstering the analytical management
capabilities of gas production sites.

Product Safety
As outlined in the President’s Policy Directive on Technology Risk Management, the Nippon Sanso Holdings Grouphas built a product safety management framework to offer safer and more reliable products by minimizing safety
risks over the entire life cycle of our products, thereby ensuring customers can use our products with peace ofmind.
For many products, the Nippon Sanso Holdings Group explores ways to reduce risks from the design stage andconsider safety not only during use but at all stages of a product’s life cycle, including production, transport,
maintenance, and scrapping. Product safety assessments are subsequently conducted by individuals who haveearned internal qualifications, after which a declaration of conformity with product safety standards is made byrepresentatives of the pertinent division or affiliated company, thereby ensuring the safety of the products weprovide.

Information Management
With corporate information leaks an increasingly critical issue, companies face an ever-greater
responsibility to manage and protect confidential customer information they accumulate through theirbusiness activities. To create a framework for systematic management, the Nippon Sanso HoldingsGroup’s Information Management Committee, established in FYE2018, set forth Rules for Information
Security Management to guide our handling of our own and our customers’ information.
To maintain this system, we continue to promote initiatives across the Nippon Sanso Holdings Group tostrengthen management practices, including holding periodic seminars to enhance management-level
employees’ awareness of changes to pertinent laws and regulations and providing guidance to affiliatedcompanies.
Approach to Information Management
1.

2.
3.
4.

In line with the Rules for Information Security Management, the individual responsible for information security
oversees information security Groupwide and appoints information security officers and promotional staff foreach division and information security managers for each department.
Department information security managers are charged with identifying confidential information and classifying
such information as either “highly confidential” or “proprietary.”
Appropriate measures are taken to limit access to confidential information.
Confidential information disclosed by customers will be managed at a level equivalent to or higher than ourown confidential information.

Information Security Management Framework

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25

Contribution to Medical Care
We provide stable supplies of high-quality medical gases such as oxygen, nitrogen, helium, and nitrous
oxide to medical facilities and research institutions.
Nippon Sanso Holdings aims to contribute to health maintenance and medical care through the provision of
products in the medical field. We supply high-quality medical gases and medical equipment for applications ranging
from large hospitals to home health care, primarily though our nationwide network of logistics and services bases.
We are also developing a wide range of equipment for home healthcare. We develop, sell, and rent homehealthcare and respiratory therapy-related equipment, particularly home oxygen therapy (HOT). Through our
nationwide network of our distributors, we provide 24-hour equipment installation, return, and maintenanceinspection services. By providing products and services that are designed for safety and ease of use in every
aspect, we contribute to better quality of life (QOL) for patients.

Contribution to Home Oxygen Therapy
Japan’s coming super-aged society is driving demand for a better system ofhome healthcare. As such, we are taking steps to enhance our home healthcare
services, which center on HOT. HOT is a medical treatment involving theprovision of high concentration oxygen using oxygen concentrators, cylinders,and other devices in non-hospital settings Used primarily in the management ofchronic obstructive pulmonary disease (COPD), a cause of chronic respiratory
insufficiency, HOT is also used in the treatment of a variety of other conditions,
including interstitial pneumonia and advanced lung cancer. The use of HOT has
expanded significantly since it was first approved for coverage under Japan’snational health insurance (NHI) program in 1985, with an estimated 160,000
patients currently receiving this therapy. In addition to enabling patients to betterbalance the demands of everyday life with treatment, there is also strong
evidence of additional medical benefits, including prolonged survival, improved
mobility, and a reduction in the frequency of hospitalization. In addition tosystems for use when patients are at home or out, there is a need for systems
that can be used in a variety of everyday situations, including at school and work,
as well as when traveling. Moreover, because they are operated by patients orfamily members, HOT systems must be easy to use to ensure safety and peaceof mind.
We promote product development with the aim of addressing diverse needs,
with an emphasis on user-friendliness. For example, when HOT patients leave
the house, they can transport oxygen cylinders easily using a dedicated cart, but
this is shunned by more than a few patients for a variety of reasons, including theweight of portable cylinders and the attention they attract. In response toconcerns such as these, we upended conventional ideas of oxygen cylinders with
an ultra-compact portable model that can be carried with only a shoulder strap,
thus leaving both hands free in an entirely inconspicuous fashion. Other
feedback included comments that the oxygen cylinders were complex anddifficult to use, and that patients wanted them to last longer. In response, we
integrated the cylinder valve with a built-in oxygen regulator that allows oxygen to
be delivered efficiently when breathed in, thereby making cylinders last longer. In
addition, we extended the continuous usage time and reduced the weight of theunit by combining it with a lightweight conserver. With an increasing number ofpatients now able to choose home healthcare, we will also continue to promote
the development of easy-to-use devices that can be used free of worry and toenhance our supply configuration.

Ultra-compact portable
oxygen cylinder

HOT-Related Products
Oxygen concentrators
Oxygen concentrators create high concentration oxygen by absorbing oxygenfrom the air. Since they are powered by electricity, a common concern among
patients is that oxygen supplies can be lost if the power goes out. To relieve suchconcerns, we developed a concentrator that automatically switches to supply
from an oxygen cylinder in the event of a power outage or malfunction, as well asa model that includes a backup battery as a standard feature.

2021

Oxywell 5A

26

Liquid oxygen device
These devices gasify liquid oxygen and supply it to patients as highly
concentrated oxygen. Because there is no external power source, operation is
not affected by power outages. Their portable units can used to refill from a bulk
storage reservoir.

HotaruAccessories for portable cylinders
When inhaling oxygen from an oxygen cylinder, if the inhalation volume is small,it may be difficult to tell whether the oxygen gas is flowing through the tube. We
developed a visual flow checker to make it easier to see whether the oxygen gas
is being supplied.
Oxygen flow
checkerOXYMED Medical Gas Supply System
Drawing on its many years of business experience in the
medical gases field, we analyzed near-miss events in
hospitals to develop the OXYMED medical gas supply
system, which has been pursued for safety and easy touse. Our wide-ranging product lineup and detailed service
system enables us to provide a high-quality gas supply
system.

High-pressure
gas manifold

Water-18O, a Pharmaceutical Ingredient for Reagents Used in PET Diagnostics
We are the first in the world to successfully manufacture Water-18O, a pharmaceutical ingredient for reagents usedin positron emission tomography (PET) diagnostics, through distillation of oxygen based on technologies cultivatedin our air separation operations. PET scans are widely used for early detection and diagnosis of cancer. An
essential pharmaceutical ingredient for the diagnostic reagent used in PET is water marked with the rare oxygenisotope 18O, known as “Water-18O.”
We currently have three oxygen isotope separation plants
in Japan, providing the world’s largest annual production
capacity at 600 kg. The final product is manufactured
Stable isotope
under a quality management system compliant with good
Water-18O
manufacturing practice (GMP) at our SI Innovation Center,to supply high-quality Water-18O to approximately 35
countries including Japan.

Contribution to Bioresearch and Development
Induced pluripotent stem (iPS) cells were discovered in 2008, and R&D in the field of regenerative medicine using
human cells has been accelerating. The practical implementation of regenerative medicine requires theestablishment of technology for reliable management of high-quality cultured cells and the cryopreservation of large
quantities of living cells, vaccines, and blood. As Japan’s sole manufacturer of liquid nitrogen cryopreservation
vessels, we are conducting technology development in areas such as regenerative therapy and biomedicine tocreate a diverse product lineup.
In the area of cryopreservation of biological samples using liquid nitrogen, we have a market share of roughly 50%
in the Japanese market for cryopreservation vessels based on cumulative sales. Using our strengths as Japan’ssole manufacturer of these vessels, we have developed a fully automatic cryopreservation system called
CryoLibrary® ADVANCE to meet diverse cryopreservation needs.

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Liquid nitrogencryopreservation system

Biological sample
transport container

CryoLibrary®
ADVANCEIntellectual Property and R&D
We strive to make use of intellectual property, recognizing it as essential to supporting thecompetitiveness of our businesses.
Nippon Sanso Holdings recognizes that intellectual property is an important asset, and actively promotes thestrategic acquisition, maintenance, and application of intellectual property with the aim of ensuring a competitive
advantage, contributing to profitability, and enabling global growth. At the same time, we are working actively toutilize intellectual property in our businesses. In addition to respecting the intellectual property rights of third parties,
in line with our philosophy of legal and regulatory compliance, we take appropriate measures against infringementsof our intellectual property rights.
Furthermore, we are engaged in research on applied technologies in various fields, including in advanced fields
based on our proprietary gas technologies accumulated over more than 100 years since our founding. Looking
ahead, we will continue our initiatives to promote the creation and use of intellectual property, and support thegrowth of the Group as a global company.

System for Promoting Intellectual Property Management
Nippon Sanso Holdings will work to encourage coordination with each operating company to ensure theappropriate acquisition, management, and use of intellectual property with a view of strengthening thecomprehensive capabilities of the Group and achieving sustainable growth globally. The Global Strategy Review
Committee, chaired by the president and CEO, meets once a year to determine the direction for important
initiatives in management of technological risks (risks related to safety, quality and product safety, the environment,
and intellectual property). Each operating company formulates and executes plans for each fiscal year inaccordance with the determined policy.
Number of Publication of Patent Applicationsin Japan Held by Taiyo Nippon Sanso Corporation

2021

Number of Patents Held Worldwide by
Taiyo Nippon Sanso Corporation

28

Breakdown of Patent Portfolio of Taiyo Nippon Sanso Corporation in Japan by Business

R&D
By continuing our rigorous pursuit of the possibilities of gas and uncompromising R&D, we will create new demand
for gas. To propose total solutions for our customers’ needs, we will continue to make unstinting efforts at the
Yamanashi Laboratory, Tsukuba Laboratory, and SI Innovation Center, backed by a wealth of expertise andexperience.

Yamanashi Laboratory
The Yamanashi Laboratory is one of our global R&D hubs, responsible fordevelopment of the Taiyo Nippon Sanso Group’s core technologies. These
include gas-related safety technologies, oxygen combustion, welding and cutting,heat treatment, low-temperature applications, adsorption, and nanomaterials.
Furthermore, the plant also focuses on the development and commercializationof cutting-edge technologies, such as additive manufacturing, which is at theheart of the manufacturing digital revolution, as well as cryopreservation systems
for biological samples in the life science field.
Yamanashi Laboratory

Oxygen combustion
SCOPE-Jet ® serie

Food-freezing Bistranza series

Additive manufacturing

Carbon nanotubes and copper nanoparticles

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Tsukuba Laboratory
At the Tsukuba Laboratory, we are engaged in R&D in the fields ofcryoseparation, stable isotope separation, cryogenic technologies, application
technologies for gas and stable isotopes, and ultra-high-sensitivity gas analysis.
In the electronics field, we are engaged in the development of new materials andprocesses, as well as cutting-edge research into semiconductor manufacturing
technologies such as metal organic chemical vapor deposition (MOCVD).

Tsukuba Laboratory

Cryogenic air
separation unit

Liquid material
container

MOCVD equipment for
semiconductor manufacturing

Separation-type dilution
refrigerator e-Diluton®

SI Innovation Center
The SI Innovation Center concentrates on R&D of stable isotopes. The center
develops and produces stable isotope-related products, such as cell-freeprotein expression kits and stable isotope labeling tag reagents, and otherapplications. Based on our proprietary technologies, the center focuses onfurther technological innovations, for example, participating in national
research programs in cooperation with universities and research institutions.

SI Innovation Center

Musaibokun cell-free kit

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30

Theme: People (Company and Organization)
Respect for Human Rights
As stipulated in the “Respect for human rights” and “Prohibition of discrimination” sections of the Taiyo
Nippon Sanso Group Code of Conduct, we are committed to promoting diversity and inclusion andprohibiting discriminatory treatment based on factors such as nationality, race, gender, or other factors.
Nippon Sanso Holdings understands that the Company has the potential to impact human rights in its businessactivities. As stipulated in our Code of Conduct, we support and respect the protection of internationally proclaimed
human rights. In addition, the Group has identified human rights issues related to its business activities and has
promoted the formulation of a common human rights policy for the Group that sets out the key elements to beobserved in terms of responsibility for human rights. The policy is to be disclosed in February 2021.

Nippon Sanso Holdings Group Code of Conduct (Excerpts)(1) Respect for human rights
We will support and respect internationally proclaimed human rights and will not be complicit in human rights
abuses.

(2) Prohibition of discrimination
We will not engage in any discriminatory treatment in employment or other working conditions by reason of thenationality, race, gender, religion, creed, personal preference, or social status of employees.

(3) Prohibition of child labor and forced labor
We will support and implement effective elimination of child labor and abolition of forced labor in any form inaccordance with internationally recognized rules.

(4) Harassment
We will not allow any sexual harassment as well as any act which may be construed as sexual harassment or any
other conduct which may impair the dignity of other employees in the workplace.

(5) Protection of privacy
We will ensure that any personal information capable of identifying an individual or private information that may beknown to us in the course of business activities will be kept under strict control to prevent leaks.

Preventing Harassment
The Nippon Sanso Holdings Code of Conduct forbids any act that may be construed as harassment. Our Rules of
Employment clearly stipulate the prohibition of harassment and the establishment of hotlines for employees to seek
consultation or report complaints. In addition to providing training to raise awareness of the importance ofeliminating harassment, in January 2017 we formulated the President’s Policy on the Prevention and Eradication ofHarassment in the Workplace, calling on employees to help create positive workplaces by, among others,
disseminating information on the policy.

Establishment of a Helpline
We have established a helpline to facilitate the swift discovery/correction and prevent the recurrence of complianceviolations while also protecting the privacy of whistleblowers. Use of the helpline is governed by guidelines for use,which also outline robust protections that prohibit anything unfavorable to whistleblowers.

Promoting the Employment of Individuals with Disabilities
We provide information on opportunities for individuals with disabilities with the goal of further opening the door toemployment at our offices across Japan. Such efforts have led to the hiring of individuals to fill positions in a wide
range of areas, including general affairs, administration, accounting, sales, distribution, technological management,
production control, R&D, and engineering. As of March 31, 2020, the percentage of our labor force accounted forby individuals with disabilities was 2.5%, exceeding the legally mandated minimum of 2.2%. We will continue
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working to create workplaces where employees understand and respect one another, so that each employee canwork with a positive attitude.
Percentage of Labor Force Accounted for by Individuals with Disabilities

Percentage

FYE2017

FYE2018

FYE2019

FYE2020

2.0%

2.0%

2.2%

2.3%

Providing a Working Environment That Encourages Innovation and Diversity
In the Innovation Division, which is located at our Shiba Office, we strive to facilitate global business expansion andvalue creation by providing a working environment conducive to the development of original ideas and new value
and to job satisfaction for a wide range of human resources. As part of this effort, we have established an open
area on the eighth floor of the office based on the concept of “a work/lounge/office where employees can choose
how and where they work.” The space is suitable for a wide range of uses, including meetings, as a workspace,and for presentations using large displays. The Innovation Division brings together diverse human resources,
including a number of foreign nationals. In addition to facilitating in-house communication, the open area has also
proven useful in encouraging innovation and diversity.

Eighth floor open area equipped with tables, counters, meeting spaces, and large displays
Human Resource Development and Training
We work continuously to enhance our highly practical training programs with the aim of fostering the next
generation of “The Gas Professionals.”
The proper development of human resources is essential for the sustainable growth of a company. It is individual
employees who support our social mission of stably supplying industrial gases. Having changed its structure on
October 1, 2020, Nippon Sanso Holdings is now expanding its fields of activity even further on a global scale. Right
now, nearly 70% of the Group’s consolidated employees are non-Japanese, and we are continuing to become amultinational organization. We will strive to create a structure were employees can actively play their roles as “TheGas Professionals” while respecting the values and cultures of different regions.

Basic Themes of Human Resources Development
Nippon Sanso Holdings is ranked No. 1 in Japan and No. 4 in the world in the industrial gases market. In Japan,
we have already established a solid position as the market leader, and now our aim is to become a global player.
Developing human resources who are capable of conducting business globally is an important pillar of the Group’s
strategy. Looking forward, we aim to implement our “Basic Themes of Human Resources Development” and “Key
Employee Qualities and Conduct,” which underpin our human resources development, for our employees not onlyin Japan but globally.

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Key Employee Qualities and Conduct

Development of Global Human Resources
The Company has always placed emphasis on initiatives to develop professional human resources that are able towork with a global perspective, whether in Japan or overseas. Following this transition, it is now necessary for us tofocus even more on these efforts. Currently, we have stationed or assigned overseas a wide range of employees of
all ages, ranks, and job types, mainly in Southeast Asia, China, and North America. However, for a company
seeking to increase the ratio of overseas sales, the number of our people overseas is still small. We therefore needto have each employee come to see their workplace as being not only Japan but the whole world. To help cultivate
this awareness, the Company has implemented training for global human resources and the Overseas Trainee
Program.

Training for Global Human Resources
We introduced this program in 2007 to enable employees who are capable offunctioning in a global business environment to learn the necessary skills forplaying an active role both in Japan and overseas. The training is conductedentirely in English by instructors who are foreign nationals and encompasses
seven sessions, including final presentations, held over approximately six
months. It covers such topics as mindset, logical presentation skills, businessmodel generation, case studies, negotiating proficiency, and leadership skills. In
addition to improving language capabilities, the training seeks to cultivate theconfidence and presentation skills necessary to express one’s own opinions
clearly and effectively whenever and wherever necessary.

Overseas Trainee ProgramThis program was introduced in 2016 with the goal of developing humanresources that are able to quickly produce results when posted overseas.
Selected young employees between their fifth and tenth year in the Company are
given extensive on-the-job training at one of the Company’s overseas
subsidiaries. Participants need to apply for the program, and those who wish toare given an opportunity to work overseas. One of the characteristics of Taiyo
Nippon Sanso Corporation is that an encouraging environment is provided for
those who are motivated to acquire experience.

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Human Resources Development in Cooperation with Local Operating Companies
Taiyo Nippon Sanso has continued to grow steadily, backed by a stable businessmodel. However, it would be a mistake to assume that this business model ispermanent. We must constantly think about the next business model to suit thechanges in the times. The same principle applies with human resources
development. The industrial gases sector is undergoing rapid globalization, and I
believe that we need to develop human resources in connection with regions andoperating companies all over the world, not only in Japan. The Company has
always emphasized training, but now our vision is to widen the selection pool to a
global scale and expand opportunities for personnel exchange training with
operating companies and exchange meetings between different industries.

Tomoyasu Azuma
Manager
HR Development TeamHR Division

Education and Training for Developing “The Gas Professionals”
I believe that what a company can do to develop human resources is provide a place to accumulate experience,
conduct education and training covering the required knowledge and skills, and establish a chain of experience.
With this in mind, we have been building an education system since FYE2008 and introduced a wide range offocused training programs, including hierarchical, selective, optional, theme-specific, and division-specificeducation.
In training for new recruits, participants experience a wide range of operations from production to sales, regardlessof the job for which they were hired, in order to build a foundation for acquiring the knowledge and skills required by
the Company. In our hierarchical training, we provide a program for acquiring the knowledge and skills required to
be a working professional, which is arranged so that people can complete the course by their fifth year. Also, evenafter the five years of basic training after joining the Company, there are training programs for supervisors,
managers, and executive officers.
In 2017, we established training for line managers, aimed at strengthening line management and developing teammembers. Furthermore, we encourage employees to actively participate in external training and selective training
run by the Mitsubishi Chemical Holdings Group. For employees who aim to acquire national qualifications, we
provide support such as a qualification acquisition incentive scheme and correspondence education course
materials. By providing an environment and systems that allow individual employees to grow, we will continue todevelop “The Gas Professionals,” that are equipped with health, integrity, and resourcefulness.
Taiyo Nippon Sanso Employee Training Framework

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34

Cultivating a Sense of Mission as a Provider of Social Infrastructure over a Five-Year Training
SystemThe Company has a distinctive training system that provides basic training to young employees over a five-year
period after recruitment. The basic training starts with a three-month training for new recruits, followed by annual
group training with other employees from the same recruitment intake once a year until the fifth year. The program
is for all employees, regardless of their type of work, whether it is in business administration or engineering. Bybuilding up cross-organizational basic training outside of technical aspects, we aim to have all employees develop
a full awareness and deep understanding of the characteristics of the industrial gases business and the importanceof our mission of maintaining supply at all costs. Through the five years of basic training, all employees will become
more conscious of their roles as “The Gas Professionals” as they work in various fields.

Hierarchical Training (First Year to Fifth Year in the Company) Basic Training
Basic training increases employees’ skills and raises their perspective incrementally and continuously over five
years. In their feedback, employees that have participated in the training indicate that they can observe its benefits
and effects. Young employees are assigned to various departments after joining the Company, and enjoy being
reunited with others from the same recruitment year where they share their trials and observations. The growth oftheir same-year colleagues stimulates and motivates them to grow themselves. By conducting the training over five
years, the young employees advance through friendly competition and grow, developing a spirit of cooperation thatbuilds better teamwork.

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35

First year of employment– Training for new recruits

First year of employment– Training for new recruits

Third year of employment– Training in logical thinking

Fifth year of employment training– Strategy and marketing

Fair and Impartial Hiring Practices
The Nippon Sanso Holdings Group seeks to secure diverse human resources and have eliminated such potentiallydiscriminatory factors as gender and age from our hiring practices. Our personnel system is based on three key
concepts: Put the right person in the right position, ensure impartial evaluations and training, and provide resultsbased compensation.
For employees of Taiyo Nippon Sanso Corporation, we have developed job/role-specific criteria for evaluating theperformance of and determining compensation for employees. Prioritizing a fixed cycle of actions (fulfill
expectations/exercise capabilities → evaluate performance/determine compensation → provide feedback →foster human resources) and repeating this cycle both ensures fairness and impartiality and enhances job
satisfaction.
In 2015, Taiyo Nippon Sanso Corporation eliminated the vocational qualification system, an essential component of
which is seniority, in favor of a system that focuses on performance so that the personnel system for managementlevel employees assigns the right person to the right position in a timely manner. Additionally, to enhance profit
sharing, we raised the percentage of annual remuneration accounted for by bonuses, thereby creating a system ofcompensation that is more closely tied to the achievement of medium-term management plan targets.
Health and Productivity Management
We strive to create work environments that support and motivate employees. To this end, we arepromoting measures in three areas: Healthy people, healthy workplaces, and healthy families andcommunities.
Nippon Sanso Holdings believes that consideration for employees’ work styles and health is part of a management
strategy for enhancing individual capabilities, increasing productivity, and raising corporate value. We havetherefore been promoting health and productivity management, which realizes mental and physical health with aview to being a company where employees can work with enthusiasm. We are actively promoting initiatives tomaximize the activity of employees, one of our most important assets from a perspective of health and productivity.

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Taiyo Nippon Sanso’s Health Management Declaration—Create a working environment that supports and motivates employees—
We look for three key qualities in our employees, namely, health, integrity, and resourcefulness. With the aim ofgiving form to the first of these and recognizing that employee health is the driving force behind everything we do,we hereby declare our commitment to promoting sound corporate management and helping realize a spirituallyaffluent society through the creation of a health-first corporate culture.
Recognizing the health and wellness of all of our employees as a crucial corporate asset, we will also strive torealize secure and pleasant workplaces.
We also understand that the health and wellness of each individual employee and of their family is a criticalmotivating factor for employees in both their professional and private lives. Accordingly, we encourage employees
to be proactive in maintaining their own health and ask for their active participation in the creation of a health-first
corporate culture.
April 1, 2017
Yujiro Ichihara
Representative Director, President CEO
Taiyo Nippon Sanso Corporation (At the time)

Health and Productivity Framework

Promoting Employee Health
The Company aims to foster a culture that puts health first,
following the idea that the health of its employees is thedriving force behind everything it does. To promote
employee health, we conduct health examinations for all
employees as a matter of course. We also subsidize theuse of health facilities and participation in health promotion
programs, and provide consultations with a physician toworkers who are working long hours. Furthermore, allemployees who are assigned to postings away from theirfamilies are obliged to receive an annual physical andmental health check.
In addition, we are cooperating with industrial physicians
and the health insurance societies to assign industrial
physicians to each branch office. This will enable us torespond to health issues related to extreme overwork and
expedite support for employees who have taken leave forthe treatment of mental health issues returning to work.
We have also revised items covered in annual healthchecks to facilitate the early detection of cancer, andintroduced subsidies for employees obtaining influenza
vaccinations and treatment to quit smoking.
2021

Participants engage in stretching at
FYE2019 Seminar for Healthy
Working Women37

In a new initiative, in FYE2019 we held the first Improving the Health of Working Women seminar at our corporate
headquarters in Tokyo. Three female speakers—a nutritionist, public nurse, and trainer—were invited from Pasona
Inc., a personnel placement firm noted for promoting career advancement for women, to speak at the seminar,
which focused on three central themes (female hormone-related issues, exercise, and diet). Going forward, we willcontinue working to create healthy working environments that enable female employees to pursue successfulcareers.
We also conduct yearly health checks for former employees who in the past worked with asbestos and haveexpressed a desire to receive such checks. For those who receive asbestos health management guides ordesignation as a person affected by industrial accident as a result of the checks, we have set up a compensation
system.

Wearable Devices for Visualizing HealthIn FYE2018, we began distributing wristband-type wearable devices that
increase the visibility of individual health-related data. These devices aredesigned to make employees more health conscious by enabling them tounderstand their own health status from day to day, providing such information as
step count, heart rate, sleep time, and calorie burn. As of March 31, 2020,
approximately 1,300 employees are wearing these devices. From July 2018, we
introduced a walking point system where users can convert their daily step countinto points redeemable for various services, or donatable to the Japanese Red
Cross Society and others. We will continue to devise creative ways to further
increase health management in an enjoyable way, and plan to expand thewalking point system to include affiliated companies and employees’ dependents
going forward.

Distributed to Taiyo
Nippon Sanso Wearable
deviceCaring for Mental Health
We have introduced an employee assistance program (EAP) provided by a third-party specialist and set up an
external counseling service. At the same time, we have continued to take steps to support mental health care,including establishing a support program for employees who have taken leave for the treatment of mental healthissues returning to work.
Participants in Mental Health Care Training

FYE2015
FYE2016
FYE2017
FYE2018
FYE2019
FYE2020

Management-level participants
25
37
32
32
35
37

Executive-level participants
38
38
24
28
29
32

Employee Welfare Program
We have created a welfare program that provides extensive support for employees. In addition to Company
housing or dormitory accommodations for individuals on temporary transfers, the program provides rent subsidies
for married employees, subsidies for employees who are homeowners, and a mortgage system for employees
purchasing homes that includes a Company guarantee, a preferential interest rate, and an interest subsidy. The
program also makes it possible for current employees and family members, as well as retired employees, to use
three Company-owned recreational facilities.

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Comment from the Health Insurance Society Executive Director
The Taiyo Nippon Sanso Health Insurance Society conducts activities that
contribute to promoting and maintaining the health of employees and theirfamilies through health operations based on data. In 2018, we concluded amemorandum for promoting collaborative health with the Company, and are now
making a full-scale collaborative effort with the Company on activities to promoteand maintain employee health.
Meanwhile, from the Health Insurance Society side, we face challenges from theperspective of encouraging employees. The Company’s Health InsuranceSociety does not have specialist positions such as consulting physicians or publichealth nurses. For example, we would like to actively encourage employees toseek further consultation based on their health examination results, but this isdifficult under the current system from a perspective of privacy protection.
Therefore, we think it would be better to create a structure that enables directaccess to collaboration with medical professionals. As a Health InsuranceSociety, I think an important task going forward will be to find ways to encourage
individual employees while cooperating with the Company.

Akira Sakai
Executive Director
Taiyo Nippon Sanso
Health Insurance Society

Occupational Health and Safety
We have positioned safety and health in the workplace as a key priority in the Taiyo Nippon Sanso Group
Code of Conduct and have formulated the Rules for Occupational Health and Safety, in line with which weare promoting a variety of initiatives.
Nippon Sanso Holdings aims to provide safe, comfortable working environments in the belief that this will support
the growth of individual employees, raising their productivity and leading to increased corporate value.
Furthermore, since the Company’s business activities mainly involve the supply of industrial gases, which can be
dangerous if not handled correctly, it is essential to educate employees about safety and raise their awareness. To
create an environment where all of our diverse employees can work safely and with peace of mind, we will promote
improvements in our standards of occupational health and safety.

Occupational Health and Safety
In line with our Rules for Occupational Health and Safety, we promote a variety of efforts in Japan to ensure healthand safety in the workplace. Based on these rules, we have created an occupational health and safety team and an
occupational health and safety committee at each site. In addition, we continue to promote efforts to eliminate
workplace accidents. These include providing safety training and holding morning assemblies, offering Kiken Yochi
Training (KYT) (“hazard prediction training”) and introducing “5S” (a workplace organization methodology based on
five words (Seiri (Sort), Seiton (Set in Order), Seiso (Shine), Seiketsu (Standardize), and Shitsuke (Sustain)). We
also distribute Health and Safety News, an electronic newsletter that includes materials published by the Japan
Industrial Safety & Health Association (JISHA), among others, to raise employee awareness.

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Site Occupational Health and Safety Management Framework

Working with the Taiyo Nippon Sanso Employees’ Labor Union
The Taiyo Nippon Sanso Employees’ Labor Union was established in May 2005, and a union shop agreement was
concluded in October of the same year. Our policy is to disclose information to the Taiyo Nippon Sanso Employees’
Labor Union as much as possible and to consult and negotiate in good faith. Labor–management relations arehealthy, and both parties are committed to working and growing together.
Labor–Management Negotiations

Collective
bargaining

Central Labor
Council

Branch Labor
Council

Matters discussed
This is a forum for consultation regarding wages, bonuses,
and various working conditions based on union demands
and for discussions between labor and management on awide range of topics, including important Company initiatives
and business conditions.
This is a forum for discussing various matters affecting union
members in general. In response to proposals from theCompany, the union’s central executive committee and theexecutive general manager of the HR Division holddiscussions, and financial reports and information on
important Company initiatives are presented.
Principal matters discussed include amendments to working
conditions for union members, permanent reassignments,
early retirements, and proposed temporary transfers.
This is a forum for discussing matters related to union
members at regional sites. Discussions are held between
branch executive committees and local labor managers, i.e.,
branch general managers, department general managers,and department managers.
Matters discussed include provisions regarding working
hours in Japan’s Labor Standards Act and the relocation ofsites.

Schedule
Regularly held in early
March (requested
submission date) and April(specified response date)

Unscheduled (20–30
times/year)

Unscheduled (Frequency
varies from one region toanother.)

Work-Style Reforms Designed to Create Positive Work Environments for All EmployeesWith the aim of creating positive work environments for all of our employees, we have developed a variety of leavesystems to accommodate individual needs.
Eligibility for reduced working hours following childcare leave has been set at children up to the third year ofelementary school, higher than the legal standard of three years of age. Furthermore, in FYE2018 the possible
reduction in working hours, previously set at 2.0 hours, was lowered to 1.0 hour, making the system easier to use.
We have also made it possible for employees to use their expired annual vacation days to take special childcare
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40

leave to nurse children of elementary school age or younger in the event of illness, assist with childcare, or attend
school functions, or to provide nursing care for family members. There is also a system that enables them to takenursing care leave of up to 365 days in total.
Other moves designed to realize more flexible work styles include the adoption in FYE2018 of a leave systemthat allows employees to accompany spouses on overseas assignments and a rehiring scheme for employees thathave resigned because of pregnancy, childcare, or nursing care. From FYE2019, we introduced a system thatallows employees to take annual leave in hourly units, and from October 2019 a flextime system was launched ona restricted basis at certain business sites, aiming to promote measures to enable flexible working hours andrealize work-style reforms.
As of October 1, 2020, to prevent the spread of COVID-19 we have been promoting staggered starting times using
the flextime system to reduce the risk of infection on crowded public transport during peak commuter times.
Flextime is ordinarily only available at certain workplaces, but for the time being it has been allowed for all
employees.

Measures Such as Reduced Working Hours within the Childcare Leave System

Eligibility

Reduced working hours
Employees with children up to the thirdyear of elementary school

Duration

Up to the end of the child’s third year ofelementary school

Terms

Start and/or end of working day can be
adjusted in either direction in 30-minuteintervals (maximum permitted reduction
per day: 1 hour or 2 hours)

Flextime
Employees with children up to three years ofage
Up until the month the child turns three yearsof age (i.e., until the day before the child’sbirthday)
Flextime (Core time: 10:30–15:00)

Number of Employees Making Use of Childcare Leave Systems
FYE2017

FYE2018

FYE2019

FYE2020

Special maternity leave
before/after birth

6

2

4

4

Childcare leave

7

Reduced working hours

9

7 (Female
employees:7)
11 (Female
employees:11)

7 (Female
employees:5)
11 (Female
employees:11)

7 (Female
employees:7)
13 (Female
employees:13)

Flextime

00

1 (Female
employees:1)

2＊ (Female

39 (Female
employees:25, male
employees:14)
52.0 (Female
employees:34.0,
male
employees:18.0)

75 (Female
employees:46, male
employees:29)
52.5 (Female
employees:33.0,
male
employees:19.5)

Specialchildcare leave

Cumulative
number ofindividuals

42

Cumulative
number of
days

37.0

employees:1)
119 (Female
employees:70, male
employees:49)
100 (Female
employees:59.5,
male
employees:40.5)* Flextime indicates the number of users of childcare flextime. Separately, there was 1 person (male) who usednursing care flextime (not included in the above count). Furthermore, from October 2019, flextime has been
introduced at each business site, such as the Head Office, and due to the nature of the system the numbers ofpeople using it have not been included.

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Communication with Shareholders and Investors
We strive to ensure the timely disclosure of corporate and financial information and to ensure fair returns
to shareholders. At the same time, we aim to increase the transparency of management through dialogue.
Nippon Sanso Holdings actively engages in dialogue with its stakeholders in order to grasp social changes andneeds, then uses this knowledge in its management and business activities. In addition to the annual general
meeting of shareholders, we also hold financial results presentations for institutional investors and securities
analysts, and host observation tours of our business sites in an effort to facilitate constructive communication.

Financial Results Presentations
At our financial results presentations, we use visual aids to give a deeper
understanding of the Company’s businesses, financial results, and forecasts.

Business Site Observation Tours
Observation tours of the Company’s plants and research laboratories are held
regularly to give people an even deeper understanding of the Company’sbusiness. In November 2019, we conducted a plant observation tour at Shanghai
Taiyo Nippon Sanso Gas Co., Ltd. in China to introduce the Group’s gas
business.

Publications
We have also released a number of regular publications for shareholders andinvestors, including full-term and interim business reports and a single integrated
report that provides both financial information, such as that related to businessstrategies and operations, and non-financial information, including that related toenvironmental protection, social contribution, and corporate governance, with theaim of giving readers an accurate overall picture of the Nippon Sanso HoldingsGroup.

Ensuring Fair Returns to Shareholders
Having positioned the provision of fair returns to shareholders as a key management responsibility, we strive tomaintain stable dividends, while at the same time ensuring our dividend payout ratio fairly reflects our businessperformance. Guided by the strategic policy set forth in our medium-term management plan, we will continue
working to enhance our performance.

Annual Cash Dividends per Share

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Status of Shares
Number of shares authorized: 1,600,000,000
Number of shares issued: 433,092,837
Number of shareholders: 15,216(As of March 31, 2021)

Social Contribution Activities
As a provider of industrial gases, we recognize that we have a mission to communicate the technologies
and potential of industrial gases, as well as to work actively with local communities.
The industrial gases business is basically established at the site of consumption, and it is necessary to contributeto local economic activity in a way that is rooted in the local community. We consider this to be the true social
purpose for the existence of Nippon Sanso Holdings as an industrial gases manufacturer, and we undertake social
contribution activities in the areas where we conduct business. We believe these activities play an important roleand function in the development of local economies, and we strive to leverage strengths of our core operations inthem.

Nippon Sanso Ingasco Received “Best Supplier Award”
The Nippon Sanso Ingasco Group of the Philippines received the 2019 “BestSupplier Award” from IBIDEN Philippines, Inc.
This award was held for the first time by IBIDEN and given to the Nippon Sanso
Ingasco Group in recognition of IBIDEN’s high evaluation of the quality, supply
stability, productivity, and cost superiority of an on-site plant established in 2017
for the supply of nitrogen. Looking ahead, the Nippon Sanso Ingasco Group will
work as one to ensure stable operation of the gas production plant and maintainquality and safety management systems. We will make even greater efforts to behighly evaluated by IBIDEN and all of our customers.

Received 2019“Best Supplier Award”

Shanghai Taiyo Nippon Sanso Gas Received Award for “Company Practicing Excellent Safety
Management”
Shanghai Taiyo Nippon Sanso Gas Co., Ltd. received the “Award for Companies
Promoting Safe Production” in recognition of its record of beneficial activities fromthe Shanghai Industrial Park Safety Production Committee. One of thecompany’s employees also received an honorary award as a “Driver with
Excellent Manners” for being a model driver.
The Company also received an award from the committee for its excellence insincerely providing safe services.
This award has been received continuously since FYE2017, and our continued
receipt amid increasingly tough regulation and management of liquid bulk producttransportation is a testament to our daily efforts to ensure safety, conducted withAward forthe support of our investing companies and head office.
“Company
Practicing Excellent
We will continue working to make even further improvements to ensure safe and
Safety Management”
stable transportation.

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Letter of Appreciation Received Regarding Surgical Masks
Taiyo Nippon Sanso donated surgical masks to medical institutions and others in
response to a severe shortage of masks in medical institutions following the
spread of COVID-19 and received a letter of appreciation from the Tokyo Fire
Department.
Letter of appreciation from theTokyo Fire Department

Welcoming Visits by High School Students

In response to a request from the non- profit organization (NPO) School Support
Center, we actively encourage visits to our facilities by junior and senior highschool students. In June 2018, we invited seven year-two students from
Okayama Prefectural Saidaiji Senior High School to visit our corporate
headquarters in Tokyo to learn about our operations and technologies.
In addition to asking business-related questions, the students queried employees
about a variety of other topics, including job satisfaction and career choice. Goingforward, we will continue activities such as these to assist in career education by
providing opportunities for students to learn about the industrial gases field aspart of our social activities.
Using familiar examples of using
industrial
gases to introduce the Group’sbusinesses

Thermos Collaborates with Volunteer Environmental Initiative and Participates in Team ECO
Work! 224 Event
In September 2018, 48 Thermos employees and family members took part inTeam ECO Work! 224 Thermos Zero Waste Action at Teradomari Central Beach
Resort, a post-season beach cleanup initiative sponsored by UX Niigata
Television Network 21, Inc., on the prefecture’s Teradomari coast. Thermos
collaborates actively with the UX Niigata Television Network 21’s Team ECO:
Nature Support Declaration project and has now participated in this particular
volunteer initiative three times. The Team ECO: Nature Support Declaration
project is a volunteer initiative led by local residents and companies in Niigata
Prefecture. In addition to beautifying the environment, the initiative aims todeepen people’s love of nature and thus is a good fit with Thermos’ own
environmental activities. The event also provides a valuable opportunity for
Thermos to communicate with local residents.

Team ECO Work! 224 event
participants

Lab Lessons Using Liquid Nitrogen
Our Taiyo Nippon Sanso Kids’ Science Class lab lessons seek to encourage children to take an interest in scienceby giving them the chance to participate in hands-on experiments using liquid nitrogen. These lab lessons enable
children to actually experience the use of liquid nitrogen by, for example, freezing roses.
They continue to earn positive feedback not only from participating children but also from their teachers andparents, as well as from local residents. In 2018, we conducted a lab lesson featuring an explanation anddemonstration of industrial gases followed by a variety of experiments, including testing roller coastersuperconductivity and freezing inflated balloons for 16 fifth year students as part of nearby Shinagawa Municipal
Ushiroji Elementary School’s open house, in which we participate every year.
Looking ahead, we will continue aiming to expand opportunities to offer lab lessons to broaden understanding of
the Nippon Sanso Holdings Group.

Experiment in freezing roses
2021

An experiment that generates white mist in
the same way that clouds are formed in the sky
44Sergio Soccer Clinic
Established as an event to commemorate the 80th anniversary of the founding of Nippon Sanso Holdings’
predecessor, Nippon Sanso Corporation, the Sergio Soccer Clinic was first held in 1990 with the cooperation of the
Chiba-shi Football Association. The objectives of the first clinic were to create an event that would be enjoyed by
the local community and to contribute through sports to better health for children. Since 2005, we have alsosponsored a clinic in Osaka in collaboration with the Osaka Football Association. These clinics, which are attended
by elementary school student teams affiliated with local football associations, include coaching by Brazilian-born
Sergio Echigo, a well-known soccer commentator and former professional player, as well as a number of otherformer professional players. Features include friendly matches against a team made up of clinic instructors andelementary school student teams, as well as a round-robin tournament for participating teams and a penalty kickcompetition that is also open to families and coaches. Since it started, the Sergio Soccer Clinic has welcomed
more than 19,000 children, and some of those who attended the clinic have gone on to become professionalsoccer players.
It is our hope that the clinic will continue to contribute to the development of talented young players.

A total of 455 children from 48 teams affiliated with the Chiba-shi Football Association took part in the 2018
Sergio Soccer Clinic in Chiba, which featured five coaches, including Sergio Echigo.

Sergio Echigo and six other coaches welcomed 316 children from 36 teams affiliated with the Osaka
Football Association to the 2018 Sergio Soccer Clinic in Osaka.

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Dialogue with Stakeholders
Dialogue (1) The Unlimited Potential of Industrial Gases
Takeo Kikkawa, an expert in the industrial gases business, and Company director Kenji Nagata engage in a
dialogue to review the social purpose of the industrial gases business to elucidate its future potential.

Takeo Kikkawa
Kenji Nagata
Professor of the Graduate School ofMember of the Board,International Management,
Nippon Sanso Holdings Corporation
International University of Japan Representative Director and President,
Taiyo Nippon Sanso Corporation
Industrial gases make a huge contribution to the development of industry around the world. In this section,
Professor Takeo Kikkawa, who has a deep knowledge of the industrial gases business, talks with director Kenji
Nagata of the Group about how to draw out the latent potential of the industrial gases business going forward.

The Essential Role of Industrial Gases in Economic Development
Kikkawa: I have authored company histories for roughly 30 companies in my capacity as an expert on the history ofentrepreneurship. From 2013 to 2019, I served as an outside director for Mitsubishi Chemical Holdings
Corporation. Industrial gases is something of an invisible industry—not only because the products are invisible, but
because there are only a very limited number of companies that sell industrial gases themselves, despite their
being indispensable to chemical and steel companies. Nevertheless, these companies play an essential role. Thisis just one of the things I find interesting about industrial gases, and I believe that the adoption of gases amongindustries throughout the world will be an important theme going forward.
Nagata: Industrial gases will always be needed for the development of industries. They are basically produced at
the site of consumption. For example, steel and automobiles can be manufactured in advanced countries and thenshipped, but transportation of large volumes of industrial gases requires them to be liquefied, which creates
difficulties in terms of control and long-distance transportation. The industrial gases business needs to contribute to
the economic activity of a region by developing strong roots there, which I think is where industrial gases
manufacturers find their social purpose. I feel they have an extremely important role and function not only forbusiness but for economic development at the national level.
Kikkawa: I think this is one of the background reasons why the industrial gases business is particularly stable froma business perspective.
Nagata: In connection with this, I think that originality has been extremely important in the successful
industrialization of oxygen. For example, even if an automaker manufactures mass-market vehicles, the mass
production or design may be changed afterward; but industrial gases themselves do not change, which is one of
their strengths, and the industry has grown and expanded by changing the application to suit the needs of the age.
This is the potential of industrial gases, and I think it also relates to the stability that you mentioned. There aredifferences in products according to the industry structure of each country, but whether we are talking about Japan,
Singapore, or Thailand, the global supply format is more or less the same. While there are differences in language
and business customs, the industry is surprisingly suited to globalization.
Kikkawa: I hear that a team from your Group company Matheson Tri-Gas, Inc. in the United States played a role in
the acquisition of Praxair Inc.’s European business in 2018. While the industry may be suited for globalization, I
think that it is because of the success of your progressive expansion into the United States since the 1980s, andthat you were chosen to make the acquisition because you have the ability to compete with global super majors.
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The HyCO Business as a Powerful Tool for Achieving Goal 13 of the SDGs
Kikkawa: I think the way that gases can be used to combat global warming will be an important point, and I suspect
the industrial gases industry will garner more attention going forward. I have the highest hopes for the HyCO
business*. Goal 13 of the SDGs is a goal for specific countermeasures against climate change. One of the powerfultools in this effort that has been touted by the Ministry of Economy, Trade and Industry (METI) is carbon dioxide
capture, utilization, and storage (CCUS), which involves the separation, storage, and use of CO2 emitted frompower stations and chemical plants. In the HyCO business, carbon is recovered in the form of hydrogen andcarbon monoxide, which means that like CCUS it converts carbon into a resource. The HyCO business, which
recovers carbon in the form of hydrogen and carbon monoxide rather than CO2, has great potential to be atechnology that can help save the human race.
Nagata: That’s right. HyCO changes hydrocarbon resources, separating them into hydrogen and carbon monoxide,
which can then be used. Hydrogen is used for converting heavy oil into light oil, removing impurities, and otherpurposes. By adding hydrogen when these petroleum products are consumed, the sulfur content can be reduced tozero or heavily reduced. This reduces the environmental impact when the products are consumed as fuel.
Therefore, in the HyCO business, in the process of separating natural gas and so forth into hydrogen and carbon
monoxide, some CO2 is emitted, but then by adding the product created by the HyCO business, the environmental
impact at the consumption stage is reduced. Furthermore, among the process options for HyCO, there are somethat enable the recovery of high-pressure CO2 for separation or CCUS. This makes it possible to generate
electricity with reduced CO2 emissions, as you have pointed out. Setting HyCO aside, I think that we can talk about
reducing environmental impact in relation to all products, such as oxygen and nitrogen. I mean, by applying oxygen
to combustion technology we can reduce energy consumption by improving combustion efficiency. In the case of
nitrogen, we can improve quality and productivity by preventing its oxidization. So, we can talk about theconnection to reducing waste products and improving energy efficiency. We do not sell oxygen and nitrogen, butrather the effects and functions of oxygen and nitrogen. To sell these functions we are also promoting technology
developments, such as gas hybrid technology and devices that use it. This is what I consider to be the industrial
gases business.
Kikkawa: Looking further ahead, it seems likely that hydrogen will need to be used for electricity generation if weare to achieve a hydrogen society. If demand for hydrogen-powered electricity generation is established, the HyCO
business will have even further potential for development. I think it is very possible that this could be realized by
2050.
Nagata: While we are not yet ready to start operating hydrogen stations, we are now working on the development
and installation of stationary and mobile equipment. We would like to focus on hydrogen in terms of using it as acarrier in combustion technologies for ammonia and the like.
Kikkawa: Japanese power companies have chosen to use ammonia rather than hydrogen-based electricity
generation, but this process requires nitrogen, which should offer opportunities for Nippon Sanso Holdings. After all,your strength is in your ability to meet all needs related to gases.
Nagata: Given the extremely matured state of the Japanese economy, I don’t expect to see much growth indemand for oxygen, hydrogen, argon, and so forth. For this reason, I think it is most important to promotebusinesses that are focused on the SDGs and sustainability, which are key trends in the world today.
* “HyCO” stands for hydrogen (H2) and carbon monoxide (CO), which are separated from natural and other gases
through a technology called Steam Methane Reforming (SMR). The HyCO business provides large-scale supply of
H2 and CO to oil refining and petrochemical industries by way of a pipeline.

Industrial Gases Have Potential in Numerous Scenarios
Nagata: Members of the public may not feel that they have any points of contact with industrial gases. However,atmosphere control, which is a gas control technology, is playing an extremely important role in the field of 3D
printing, which is capturing the public eye in numerous applications. We do not make 3D printers but we aim tocontribute to widespread uptake of 3D printers in Japan through atmosphere control, working in partnership with 3D
printer manufacturers. Moreover, recently industrial gases are being used in a growing range of applications infields related to aquaculture. By dissolving high-pressure oxygen in water, rather than air, we expect to improve thecultivation environment. We supply a considerable volume of oxygen to the Norwegian salmon farming industry and
the Japanese eel farming industry. Another application that has been prominent lately in the area of food and water
issues is modified atmosphere packaging (MAP). By injecting a mixed gas of nitrogen and CO2, this technology
slows down the oxidization of food and helps to prolong the expiry dates of ready-made salads and similar products
sold at convenience stores.
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Kikkawa: This is a safe way to extend the expiry date rather than using a hypochlorite additive, isn’t it?
Nagata: It’s safe because it is nitrogen and carbon gases that are present in the air. By extending the expiry date,
we aim to reduce food loss as much as possible. What’s more, as the weather was particularly bad this year,
driving up the price of leafy vegetables, there were a growing number of cases where vegetables were frozen at
the production site to preserve them before shipping. Since the Group has a long track record in refrigeration
technology, we were able to use our technologies to reduce food loss at production areas as well. Going forward, I
think that industrial gases will be able to contribute even more in the area of food.
Kikkawa: How about the medical field?
Nagata: In the medical business, we are focusing on Water-18O, a stable isotope used as a diagnostic reagent forcancer. It can now be used to diagnose Alzheimer’s disease as well. In our medical business, we also use a lot of
CO2. For example, in endoscopic surgery, CO2 gas is injected to expand the intestine. Medical CO2 makes
laparoscopic surgery much easier to perform. So various kinds of gases are used in the medical field—not only theoxygen used for ventilators that people would generally think of. In the case of a disaster, for example, we continue
to supply these gases stably without stopping. In this way, we also aim to contribute to the medical field.
Kikkawa: So, the trend toward adopting gases has reached the agriculture, aquaculture, and medical fields. That’s
very interesting. I expect that the industrial gases industry will surprise us with even more unexpected ways forusing gases going forward. It truly is an invisible industry, or rather, it has a lot of invisible latent potential. I thinkthat Japan is extremely fortunate to have a global gas major such as Nippon Sanso Holdings.
Nagata: If we can fully realize the potential of the industrial gases business and continue contributing to thedevelopment of industries and the solution of social issues, then we are sure to achieve sustainable growth. I want
to apply the power of industrial gases across a wider range going forward, including social issues and new fields
following the development of industries. Pursuing this goal is our direction as an industrial gases manufacturer.
Takeo Kikkawa
Born in 1951 in Hajikamimura (now Arita City) in Wakayama Prefecture. Graduated from the Faculty of Economics,
The University of Tokyo, and obtained a PhD in Economics from the Graduate School of Economics, The Universityof Tokyo. Served on an expert panel for METI discussing the composition of electric power sources for 2030.
Professor, Graduate School of International Management, International University of Japan. Professor Emeritus,
The University of Tokyo. Professor Emeritus, Hitotsubashi University.

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Dialogue (2) Welcome NGE! Promoting Global Sustainability
Yurite Inaki, the Operations & Safety Director for Nippon Sanso Holdings Group company Nippon Gases
Euro-Holding S.L.U., talks with Takeshi Miki, Executive Officer, Executive General Manager of theTechnology and Environment Office, and CSO of Nippon Sanso Holdings, about the sustainability issues
that the Group should cooperate on going forward.

Takeshi (Ken) Miki
Inaki Uriarte
Executive Officer,
Operations & Safety Director Nippon
Group Technological Affairs & Environment Office,Gases Euro-Holding S.L.U.
and Chief Sustainability Officer (CSO),
Nippon Sanso Holdings Corporation (Additionally appointed as
Executive Officer, Executive General Manager,
Technological Affairs Division, Taiyo Nippon Sanso Corporation)
Nippon Gases Euro-Holding S.L.U. (“NGE”) joined the Group in December 2018. NGE’s Operations & Safety
Director, Inaki Uriarte, recently had a discussion with executive officer and Chief Sustainability Officer (CSO) of
Nippon Sanso Holdings, Takeshi (Ken) Miki, regarding the sustainability issues that should be addressed in acoordinated effort by the newly launched Nippon Sanso Holdings Group going forward.

Pursuing Global Synergies
Miki: The Group has been holding an annual Safety Meeting since 2015. The idea is that persons in charge ofhealth and safety from each of the overseas companies gather together in one room to exchange information andopinions about safety measures. Inaki, you attended the meeting for the first time last year; what was yourimpression?
Uriarte: My colleagues and I were quite inspired by the meeting. People from Japan, Matheson Tri-Gas, Inc.
(“MTG”) in the United States, and Group companies in Asia really did have a lively exchange of opinions. I think it istremendous that the entire Group has such a shared interest in learning from each other’s experiences.
Miki: The meeting was held in Japan last year, so you were also able to observe the Technical Academy at the
Kawasaki-Mizue site. How was that?
Uriarte: I had heard a lot about the Technical Academy from both the NGE President and the CFO who visited theAcademy before, and was myself deeply impressed by the experiments and demonstrations involving theknowledge of so many professionals that I saw there. A particularly memorable item was the hazard experience
with experiments that envisages various accidents or faults that can occur on a site such as using high-pressuregas, over and sub oxygen atmosphere hazards, the electric shocks live experiment, and the combustion caused byadiabatic compression. All the devices produced an excellent simulation of risks that we could have on a site withthe support of using virtual reality (VR). I would really like to create this kind of experience and learning space at
NGE as well.
Miki: As a company that handles industrial gases, our first priority is ensuring safety. Also, there are many aspectsof the operation not limited to safety that are handled differently between Japan and Europe, so we have a lot tolearn. It is important that we share each other’s best practices to create better systems for one another. I would
also like to receive active advice from you, Inaki.
Uriarte: We also have a lot to learn from Japan. The first area is in insight about the handling of specialty gases,
which is an area where we have received thorough support from Japan. The second is insight about HyCO, which
is an area where MTG has brought synergies. Meanwhile, the area where NGE can contribute to the Group is byproviding knowledge of various standards. As our knowledge of aspects such as operations, security, health and
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safety, and quality grows deeper, I would like to coordinate with Nippon Sanso Holdings to standardize them.
Knowledge is a universal asset that can be applied in any situation. Therefore, it would be good to accumulateknowledge about specialty gases in Japan, and about HyCO in the United States, and then bring them together
and share the knowledge. Conversely, if we were to attempt to build up all of the knowledge and functions
independently in each area, it would be extremely inefficient.
Miki: Thank you for that valuable proposal. NGE’s participation in the Group is a huge benefit not only to Japan but
also to MTG in the United States and our companies in Asia. I would like us to continue to pursue synergies
through integration as we go forward.

Vision for Sustainability Disclosure
Miki: In response to changes in social awareness, companies now face the important task of enhancing their nonfinancial disclosures and initiatives, such as responding to ESG and the SDGs. In Europe there is a considerablyhigh level of interest in sustainability, and NGE has recently issued its sustainability report for FYE2020. Could you
explain your initiatives in Europe?
Uriarte: The sustainability report is a mandatory disclosure for large corporations in Europe, just like a financial
report. The minimum content for disclosure is set by the authorities. Our sustainability report is published on eachof the company websites so that all stakeholders can access it. This is extremely important for gaining theunderstanding of our stakeholders regarding our activities. We have promoted the creation of a system that starts
by first formulating a framework, then identifying where stakeholders’ interests lie. Basically, we decided to use thisreport as a marketing tool. The main point for creating the framework was to establish an internal Sustainability
Committee. The committee has 13 members, including the president, CFO, CCO*1, CHRO*2, and the directors incharge of procurement, quality, marketing, safety, and Group integration. The committee had weekly meetings overa 10-week period. Each member establishes their own team, which examines issues brought back from themeetings. Roughly 50 people were involved in operations lasting a total of about 70 days. We received over 150
questions from Audit & Supervisory Board members and consultants, and revised the draft for the report six times.
However, having issued the sustainability report for the year, our task is not finished. This activity continues
indefinitely, as we strive to make further improvements. NGE has committed itself to eight of the SDGs and has
defined 17 targets within those. Seven of these SDGs are also shared with Nippon Sanso Holdings. I would like us
to focus particularly on energy efficiency, community engagement, compliance, and safety, while constantly
improving our business and communicating this to stakeholders.
Miki: I read the FYE2020 report, and found the content to be well-organized and thought out. I would really like todraw inspiration from your initiatives. We are still just developing our activities in this field, but with our recent
conversion into a holding company, we will radically strengthen our initiatives. Last year, we expressed our support
for the TCFD*3 recommendations, and this year we also responded individually to the CDP*4 survey. In thisintegrated report, we have already enhanced our reporting regarding sustainability. Our task now is threefold. First,
we are enhancing our disclosure of non-financial data, which we have tried to do in this integrated report. Second,
we will systematically organize and disclose our various policies. We also plan to review and add to our current
materiality matrix. And third, we will set KPIs. It is important to set targets and work through a plan-do-check-act(PDCA) cycle. We are thinking to take specific action on these in our next medium-term management plan.
Uriarte: I think a good way to set KPIs is to start by first getting an overall image, and then narrowing down theareas that are to be evaluated. For example, NGE has 106 facilities in all, but over 95% of our energy consumption
occurs at just 27 of these. I think it is important to get an accurate overall image like this, then properly discern
which facilities and processes to pursue data on.
*1 Chief Compliance Officer*2 Chief Human Resources Officer*3 Task Force on Climate-related Financial Disclosures. A task force established by the Financial Stability Board,
the TCFD recommended that companies disclose the financial impacts (risks and opportunities) of climate change.
*4 A U.K.-based NPO (formerly called the Carbon Disclosure Project). The CDP cooperates with institutional
investors and others to require companies and government agencies to disclose information about theircountermeasures for environmental issues, and conducts surveys and analyses.

Industrial Gases as a Sustainable Business
Miki: The air separation process is important in the manufacture of industrial gases. This process separates air, theraw material, to produce oxygen, nitrogen, and argon. These products are finally returned to the naturalenvironment, and the process generates almost no waste at all. Furthermore, the distillation process used for air
separation is conducted at extremely low temperatures, and although it uses electricity it does not involve
combustion of fossil fuels. Since air is the raw material, there is no supply chain risk. In addition to reducing theenvironmental impact of this kind of manufacturing process, another important point is the contribution of the
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products themselves. Gas helps to reduce the environmental impacts of various industrial processes. In addition,
the injection of gas to extend best-before and use-by dates for food helps to reduce food losses. This shows thatindustrial gases are actually a substantially environment-friendly business. In addition, Thermos brand products,
which keep foods hot or cold, help to reduce energy losses. However, outside of the Thermos Business that I’ve
just mentioned, our main business is in the B2B field, which makes it difficult for general investors to understand. I
think we need to communicate more about it.
Uriarte: I feel exactly the same way. Through gas applications, we can make a significant contribution to helping
customers reduce their environmental impacts. We can contribute to promoting sustainability not only by safely
supplying gas but also through our customers using our gas and improve their processes.
Miki: I believe that under its new framework, the Group now needs to pursue “collective strengths” and“autonomous strengths.” I want to respect the autonomy of Group companies, and while putting our so-called
centrifugal force to work, simultaneously develop collective strengths that generate synergies within the Group. The
field of sustainability should also present significant potential for creating such synergies.
Uriarte: By promoting the sharing of gas application technologies, we can both make further progress in developing
environment-friendly businesses and products. We may also be able to cooperate in the manufacturing process to
reduce CO2 emissions and water usage. I hope that we can further strengthen this kind of technology sharing
between Japan and Europe.

A Member of the Nippon Sanso Holdings Group
Miki: We started working with Inaki at the preparation stage before the management integration. At that time, whatkind of image did you have of the integration?
Uriarte: I had a positive impression of Taiyo Nippon Sanso, as it was named at the time, before it was decided that
the Group would buy us. I thought that Taiyo Nippon Sanso had businesses in Asia, North America, and Europethat matched us perfectly, so I was rather delighted with this outcome.
Miki: Having NGE join our Group has been hugely stimulating for us in many ways other than earnings. In the
integration, we respect NGE’s autonomy as much as possible, and I think that NGE has joined our Group in a form
that enables everyone to continue working as they had before.
Uriarte: We haven’t experienced any particular difficulties with the transition. If I had to point to something, I would
say that we did not know each other as individuals, but the Japan side often attends our meetings, and we havealso visited Japan several times, so this issue resolved itself quickly. Now that we have become familiar faces to
one another, the integration has really moved ahead.
Miki: The so-called PMI*5 process has really gone smoothly, and we have built trust naturally through our visits with
one another. The difficult part was really at the stage before the integration. At that time, we were both separate
companies with confidentiality obligations, and most of our consultations were by telephone, so we didn’t have achance to properly meet. In this business dealing with high-pressure gas, the most important part is safety andsecurity. From the date of the management integration, we would become an entity with a shared destiny, and we
needed to finish smoothing out various wrinkles by then. I was looking forward to completing the integration andbuilding relationships of trust as soon as possible.
Uriarte: I felt the same way. Ken, please do come and visit us again once the COVID-19 pandemic has passed. It
will be an excellent opportunity to develop a deeper mutual understanding. And let’s continue to cooperate closely
going forward.
Miki: Thank you for your invitation. I have complete trust in you, Inaki, and in everyone at NGE. With workstyles andlifestyles now changing around the world due to COVID-19, we must make our business more sustainable andcontribute to the realization of more sustainable societies. With our recent transition to a holding company, I aim tofurther develop our cooperation framework with a view to promoting global sustainability.
*5 Post-Merger Integration. The integration process that occurs after an M&A.

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Dialogue (3) Strengthening Governance through a Global Framework of Four Geographic Hubs
Outside directors Akio Yamada and Mitsuhiro Katsumaru have provided leadership in the Company’s
governance reforms. They engage in an open discussion on various issues, including a review of the five
years since their appointments, the effectiveness of the Board of Directors, the significance of thetransition to a holding company structure, challenges for the future, and response to the COVID-19
pandemic.

Akio Yamada
Outside Director
Nippon Sanso Holdings Corporation

Mitsuhiro Katsumaru
Outside Director
Nippon Sanso Holdings Corporation

Outside directors Akio Yamada and Mitsuhiro Katsumaru have provided leadership in the Company’s governancereforms. Here, they have an open discussion on various issues, including a review of the five years since their
appointments, the effectiveness of the Board of Directors, the significance of the transition to a holding company
structure, challenges for the future, and response to the COVID-19 pandemic.

Looking Back on Five Years Since the Introduction of Japan’s Corporate Governance Code
Katsumaru: Mr. Yamada and I were appointed as outside directors in 2015, the year that Japan’s Corporate
Governance Code (the “Code”) was formulated. The management of Taiyo Nippon Sanso Corporation at the time
took the philosophy of the Code seriously and it was a time when they started specific initiatives. One of the major
themes of the Code was enhancing and strengthening the Board of Directors, and in fact the Group’s Board of
Directors has changed in several ways since that time.
First, discussions in the Board of Directors’ meetings have become more active. Perhaps this was set in motion by
our free questioning and expression of opinions from an outside viewpoint. Outside directors in general have also
become more active in the contributions than before.
Second, the responsibility of the Board of Directors has been clarified. The Board makes decisions on importantmanagement issues centrally, and governance has now become transparent.
Third, I must mention the establishment of the Advisory Committee on Appointments and Remuneration. This was
an excellent decision by President Ichihara as the committee ensures accountability on important internal
personnel matters with plenty of discussion to decide on matters. Mr. Yamada plays an especially important role inleading the committee as its chairperson.
Yamada: The Advisory Committee on Appointments and Remuneration is composed of three members, including
President Ichihara and ourselves. The committee met 11 times during FYE2020, so it is rather active. The mostimportant theme for the committee recently has been selection of a future successor candidate for the President
CEO. Referring to best practices at other companies and so forth, we interviewed multiple candidates in theselection process and proceeded to select personnel based on evaluation and screening criteria. Our next task is
how to approach the development of future management executive candidates.
Katsumaru: I think this is a good point to mention the issue that arises when both parent and subsidiary are listedcompanies. The Company is a consolidated subsidiary of Mitsubishi Chemical Holdings Corporation, which is theparent company of the Nippon Sanso Holdings Group as it is the controlling shareholder. In this case, theprotection of minority shareholders’ interests is a focus, and there are two important points to be considered in thisregard.
First, the Company’s governance is systemically guaranteed to a certain extent by the independence of the outside
directors. We are both in an independent position with no relationship to the parent company, and we both strive to
speak out with a constant awareness of the issue of protecting minority shareholders’ interests in the Board of
Directors and other places.
Second, parent company Mitsubishi Chemical Holdings’ stance is to place an extremely strong emphasis on theautonomy of the Company’s governance. As such, we recognize that the risk of minority shareholders’ interests
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being harmed by the controlling shareholder will remain extremely low.
Yamada: Since 2018, the issue of protecting minority shareholders’ interests in listed subsidiaries has been muchdiscussed. As Mr. Katsumaru has pointed out, we have an important role to play as independent outside directors
in this regard.

Diversity of the Board of Directors
Yamada: Another important theme is ensuring diversity in the composition of the Board of Directors; for example,
appointing female directors. President Ichihara and ourselves have taken this issue very seriously; however, wehave not yet managed to appoint a female director at this stage. We will continue making a sincere effort on thisissue.
Next, at the General Meeting of Shareholders in 2019, Chairman and CEO Thomas Kallman of Matheson Tri-Gas,
Inc. was appointed as a director along with Chairman and President Eduardo Gil Elejoste of Nippon Gases EuroHolding S.L.U., which joined the Group at the end of 2018. Their inclusion has greatly changed the composition of
the Board of Directors.
Katsumaru: The management team has been working proactively on this theme and intends to continue
strengthening its initiatives. Furthermore, with the participation of the heads of our U.S. and European operatingcompanies, just mentioned, and the selection of Vice President Hamada, who has experience on assignment at
Matheson Tri-Gas, discussions in the Board of Directors’ meetings have a more global perspective than everbefore. In every theme that we discuss, including response to the COVID-19 pandemic, which will be mentioned
later, we are now able to keep an eye on the status of the rest of the world, including Europe and the United States,
at all time.
Furthermore, since October 2015, we have conducted evaluations of the effectiveness of the Board of Directors.
This has been the most trying part of complying with the Code, but setting up a system for collecting the opinions ofeach director using the questionnaire, having a careful discussion based on the results, and implementing steps tosolve issues has been an extremely important result.
Furthermore, a distinctive feature of the Company’s governance is the presence of a powerful Audit & Supervisory
Board. The Board also provides tremendous support for us as outside directors when we are giving our opinions.
Diversity has been secured for both the Board of Directors and the Audit & Supervisory Board, and the two meetingbodies are both functioning properly.
Yamada: Three of the four full-time Audit & Supervisory Board members are outside members and all have affluent
corporate management experience and accounting knowledge. They make insightful observations and actively
share opinions in the Board of Directors’ meetings. This is quite different from the scenario in other companies, I
believe.
They say that all companies find it difficult to carry out an evaluation of the Board of Directors. The Company
conducts a questionnaire survey and based on the results the execution site provides specific proposals, which are
discussed again in turn by the Board of Directors. This approach has produced results such as narrowing down thematters for discussion, simplifying operating reports, and strengthening investment monitoring. In addition, theAudit & Supervisory Board is also active in presenting opinions and proposals.
Katsumaru: The organization is extremely good at self-transformation. There have been a large number of changes
over these past five years compared with before the introduction of the Code. Many people are now interested in
ESG and the SDGs as well.
Going forward, companies will be required to have diversity in management leadership and to have the power totransform themselves in step with the times. I believe that Nippon Sanso Holdings has the ability to meet theserequirements.

Insights Achieved through Response to the COVID-19 Pandemic
Yamada: The Company rapidly implemented a series of responses to the COVID-19 pandemic. The Board of
Directors has constantly had the latest situational reports since February, and in April a policy on preventing
infection was formulated. Also, as Mr. Katsumaru just mentioned, Chairman and CEO Kallman and Chairman andPresident Elejoste have been appointed to the Board of Directors, providing direct access to wide-ranging
information from outside of Japan as well, such as the overall status of infection in the United States and Europe,
the economic impacts, and the impacts on the Group’s businesses and customer relationships. Without a clear
outlook on when the pandemic may subside, we will make a united effort in Japan, the United States, Europe, andAsia and Oceania to recover earnings within the fiscal year, based on various information such as trends indemand industries.
Another important point is a company’s response to its social responsibilities. Amid concerns over the securing ofadequate ventilators in medical institutions, the Company’s wholly owned subsidiary IMI Co., Ltd. was right at thefront of the supply line as a medical equipment sales company. Many Group companies also supply medical
oxygen. The employees of each company face the risk of infection in the same way as medical professionals, and
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continue to strive, putting their own health at risk.
Katsumaru: Everyone has performed admirably during the pandemic. I found two points particularly impressive.
The first was the supply of masks in and outside the Company. In May, the Company donated a total of 1.5 million
medical masks to medical institutions and others. The Company took this action right when the world was in an
uproar due to an acute shortage of masks, and its effort was recognized with a letter of thanks from the Governor ofTokyo. The Company also distributed 100 masks to every employee and made efforts to prevent infection. Both ofthese actions were extremely proactive and effective.
The other point was the Company’s supply of industrial gases amid the pandemic in Europe and other countries.
The Board of Directors received an explanation from Chairman and President Elejoste of Nippon Gases EuroHolding about its response to the pandemic in Italy. We were presented with the visual image of employees of
Nippon Gases Euro-Holding risking infection to deliver oxygen to local hospitals, giving us a good understanding of
the situation on the ground.
Through the recent series of situations, many companies have probably had to review the purpose of their
existence and their role in society. The Nippon Sanso Holdings Group has performed its role tremendously, and I
think it has reaffirmed its own purpose for existing.
Yamada: I feel that the Group philosophy of “Proactive. Innovative. Collaborative.” has truly been put into practice.

Objectively Clear ESG Disclosure
Yamada: Recently, there has been a surge of public interest around corporate ESG initiatives. The capital markets
have also been emphasizing ESG investment and socially responsible investment (SRI). In light of the situation, I
think the Group needs to apply more innovative thinking about the status of its ESG disclosure. The Group provides
many gas applications that contribute to increasing operational and combustion efficiency and to reducing theenvironmental impact of metal cutting and welding, and smelting in blast furnaces. It is important to provide moreintuitive and clear explanations focused on these initiatives in order to gain stakeholders’ understanding.
Katsumaru: It is somewhat difficult to achieve both objectivity and intuitiveness in ESG disclosures.
However, the focus here should be on the extremely sustainable nature of the Group’s business model itself. The
industrial gases business takes in oxygen and nitrogen from the atmosphere and converts them into energy before
releasing them back into the atmosphere. It is a wonderful circular process. This oxygen and nitrogen cycle
supports various aspects of industry throughout the world. I think it is necessary to pursue a clearer explanation of
how gas plays this social role and creates unique value.
Yamada: For example, just as the technology for the maglev train is supported by superconduction provided byliquid helium, the progress of humankind and the development of the economy rely on industrial gases.
The impact of having the heads of our U.S. and European operating companies on the Board of Directors isapparent in the change of focus on ESG. For example, in 2019 the Group announced its support for the TCFD
recommendations. In discussions about this in the Board of Directors’ meetings, they drew out examples of othermajor companies that compete with the Group and stated their views that the Group should also promote its
initiatives with greater urgency.

Acquisition of European Business and Creation of Synergies
Katsumaru: The acquisition of the European business (now Nippon Gases Euro-Holding) at the end of 2018
involved a major decision to invest acquisition funds comparable to the Company’s annual sales. We actively
expressed our encouragement for the acquisition up to the decision. The reason was that while the Japanese
economy had continued to stagnate since the 1990s, the U.S. and European economies had grown steadily.
Operating only in Japan limited the Group’s aspirations for growth and transformation. Given the backdrop to thisdeal, as an outside director unfettered by any need to continue the previous trajectory or preserve continuity, mythinking was that we might not see such an opportunity again. There is still a lot of work to do, but thus far things
have progressed nicely.
Yamada: Another important role that we have is to support appropriate decision-making by top management and tobuild a foundation for setting the Company on its course. President Ichihara made a huge decision, and I believe
he has created a way forward for the Group’s continuous growth.
Furthermore, Nippon Gases Euro-Holding’s management executive team have been actively working to assist in
the process of its integration. Moreover, the executive teams of Nippon Gases Euro-Holding and Matheson Tri-Gas
have been involved in discussions about generating synergies after the integration. Chairman and President
Elejoste made specific proposals such as deepening relationships with global customers in the electronic materials
gases business, creating business opportunities through cooperation between engineering divisions, and mutual
use of gas application technologies. These formed the basis for deeper discussion in the Global Operations
Division (at the time) and subsequently in the Global committees.
In this way, the PMI is proceeding smoothly, and we have transitioned to a holding company structure to fully
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maximize management efficiency for the global framework of our four geographic hubs and the Thermos business.
With this, the Nippon Sanso Holdings Group made a fresh start under a new structure on October 1, 2020.
Katsumaru: The Group management philosophy and policies are created by the Company. However, each
operating company has a considerable level of discretion and responsibility, and will promote its businessautonomously. Generally, a holding company structure can be seen in various ways, but I believe it is one of theultimate structures for promoting efficient, rational group management while utilizing the characteristics andstrengths of each region of the world. Moreover, in our discussion on this issue, my contribution was regarding thechange of company name. I thought it would be an appropriate time for a name that clearly reflected the newholding company structure. Moreover, Taiyo Nippon Sanso Corporation is a fine company name that carries theCompany′s history, so it has remained in use for the domestic operating company. In addition, in terms of having an
executive function that specializes in business management, the appointment of Director Nagata as president of
the Taiyo Nippon Sanso Corporation as the domestic operating company is appropriate for the holding company
structure since he has a wealth of experience in the industrial gases business in Japan.
Yamada: Even in an ordinary operating company, if it has a lot of subsidiaries then strengthening governance as agroup is a major challenge. In this regard, as a holding company, Nippon Sanso Holdings is truly an organization
for Group governance, and will efficiently perform the functions of business strategy, management functions, risk
management, and synergy creation for the entire Group.
Generally speaking, information sharing using IT and financial management are essential for creating Groupsynergies. In regard to this, CFO Draper, who is in charge of finance, accounting, and IT at Nippon Gases EuroHolding, has been made executive officer of the Group Finance and Accounting Office and CFO of Nippon Sanso
Holdings. I expect this will not only contribute to diversity and globalization within the execution structure but also
generate wide-ranging ripple effects in all directions within the Company.
Katsumaru: I think this kind of diversity will create even more big changes in the newly launched Nippon Sanso
Holdings Group. Nippon Gases Euro-Holding, which operates businesses in every country in Europe, has a great
deal of knowledge regarding Group management. It is also well developed in terms of its relationships with
employees and its stance on ESG. Having gained Nippon Gases Euro-Holding as a member on the heels of
Matheson Tri-Gas, the Nippon Sanso Holdings Group can be expected to continue changing and growing going
forward.

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(Roundtable Discussion) Human Resources to Carry the Nippon Sanso Holdings Group into the Future
Having changed its company structure and name on October 1, 2020, Nippon Sanso Holdings has
positioned itself for a new start. As the Company approaches this period of transformation, Satoshi
Wataru, Executive Officer and Executive General Manager of the Human Resources Division, talks with twoother frontline employees about the kind of human resources that the Group will need going forward.

Satoshi Wataru
Executive Officer
Executive General Manager
HR Division
Taiyo Nippon Sanso
Corporation

Akari Ikeda
Development Section
SI Innovation Center
SI Business Department
Medical Division
Taiyo Nippon Sanso
Corporation

Mitsuhiro Saida
General Manager on
Assignment
Shanghai Taiyo Nippon
Sanso Gas Co., Ltd.

Shinya Fujita
Process Design Section
PEC Engineering
Department
Engineering Division
Taiyo Nippon Sanso
Corporation* Assignment and position are as of July 16, 2020, when the interview was conducted.
On October 1, 2020, we made a fresh start as “Nippon Sanso Holdings,” having changed our structure and ourcompany name. At this turning point, Executive Officer Satoshi Wataru, Executive General Manager of the HR
Division, and three employees working on the front lines had a discussion about the quality of human resourcesthat the Nippon Sanso Holdings Group needs going forward.

Deciding Factors for Joining Nippon Sanso Holdings
Wataru: To begin, I would like to ask each of you to introduce yourselves and briefly tell us about your career up tonow.
Fujita: I joined the Company in 2009, so this is now my 12th year. Originally, I joined because I wanted to be
involved in building ASUs. However, before I could do that I felt I needed to learn more about ASUs, and so I
wanted my first assignment to be at an ASU. My wish was granted, and I worked for three years at the Nagoya
Sanso Center. The opportunity to see actual ASUs in operation was an extremely valuable experience. I currently
work in the Process Design Section of the PEC Engineering Department in the Engineering Division. My current
department is involved in ASU design, so there are few opportunities to visit on-site. My three years working at an
ASU enables me to understand how a new ASU will operate after it has been installed. Being able to use thatexperience in the design process is a powerful tool for me in my present role, so I am glad that I agreed to do thatwhen I joined the Company.
Ikeda: Although Taiyo Nippon Sanso Corporation is mainly an industrial gases company, I work in the SI* Business
Department of the Medical Division, which handles stable isotopes. I am responsible for developing applications forstable isotopes—in other words, finding out how customers can use them to their benefit. It may seem strange tosay that I handle stable isotopes at an industrial gases company, but the principle of separating oxygen, nitrogen,and argon out from air can also be used to separate the stable isotopes of oxygen 16, 17, and 18. In fact, the coretechnologies are shared with industrial gases. The SI Business Department has a lot of customers with high levelsof expertise, such as universities, hospitals, government agency research laboratories, and pharmaceuticalcompanies. I value communication and dialogue with customers, based on accurately picking up their various
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needs, getting a feel for them, and uncovering them. I am sometimes asked to present lectures at academic
conferences and symposiums, and so forth, and I actively make an effort to maintain a lot of contact points withcustomers. At seminars and symposiums, where there are opportunities for direct dialogue in an open atmosphere,in many cases I have found that customers have hidden latent needs that they themselves are unaware of. When I
talk with customers, I try to identify their fundamental issues, not just what they present on the surface, and thenpropose solutions, asking their opinion about a certain approach to solving it or suggesting alternatives. Sometimes
the issue can be solved using an approach that does not use my goods or services, but even in these cases, themost important thing is that the customer trusted me and consulted with me.
* Stable Isotope
Saida: I am the oldest in this group. Currently, I am working as the General Manager for our local subsidiary in
China, Shanghai Taiyo Nippon Sanso Gas Co., Ltd. The company has a large plant for making gases, an ASU. The
gas is transported by our Transport Division and sold by our Sales Division. For the equipment needed for gas
supply installed on customers’ sites, the Engineering Division handles everything from installation to after-sales
service. The company is like a miniature version of Taiyo Nippon Sanso Corporation, undertaking everything frommaking gases to serving the customers who use them. I joined the Company in 1997, and this year is my 24th. At
first, I worked in the Gas Sales Division of the Tokyo Branch, selling general gases such as oxygen, nitrogen, andargon. After that, in 2004 I started working on new sales channels for gases at the Head Office. At the time, wewere seeing an increase in Japanese customers expanding their operations overseas in China, Thailand, and soforth. We thought we would like to supply these customers overseas in China, Thailand, and even India as well, so
from 2004 onward we started providing support for them through our overseas subsidiaries. In 2011, I was
assigned to Shanghai Taiyo Nippon Sanso Gas. I was initially responsible for sales as the vice president. Since
2015, I have been responsible for overall management as General Manager.
Wataru: What has been your most difficult experience?
Saida: In 2015, when I was appointed General Manager, the company recorded a loss. At the time, I wondered how
to make the company profitable and generate a profit. As you might expect, our employees are Chinese, and whilecommonly accepted ideas for Japan are not completely strange to non-Japanese, they do have a really different
way of thinking about things. On the other hand, since there are limits to what Japanese people can do at an
overseas local subsidiary, we have to rely on the national staff to take care of all the detailed aspects of operations.
I was certainly struggling at first to see how I could convey our passion to them and lift their motivation, and how wemight work together to increase the company’s earnings.
Wataru: Within the Group, most of the assignments as presidents of subsidiaries or affiliated companies are usually
given to people who have a long history in the Company. Mr. Saida, you have become a company president at a
young age. I think it is a tremendous example in terms of succession planning, and I would really like to see more
people like yourself. While I don’t think young people necessarily need to be at the very top, I do think it is a goodidea for them to experience serving in a role at around the level of No. 2 so that they can get an overall view of thecompany.

Trust Relationships with Customers Are a Differentiation Factor
Wataru: Could you tell me what is important to you in carrying out your work?
Saida: When I was responsible for sales, I found the most important things to be an attitude of sincerity andseriousness. Since gas itself cannot be differentiated, our nitrogen cannot be differentiated from that of ourcompetitors because it is colorless and odorless. To have customers choose our products, I felt it was of paramountimportance for the sales personnel to provide something extra in terms of their passion, their earnestness, and soforth.
Ikeda: On the topic of something extra, our most important product in the SI Business Department is Water-18O,
which is an essential material for PET diagnosis used for early detection of cancer. However, it can also be used forother applications. For example, we propose Water-18O as part of a package with the peripheral technologies wehave developed so we can add value through something extra.
Saida: The same applies with gas sales. It is extremely important to start by getting an understanding of what istroubling the customer, or what the customer is seeking, and then propose a solution. This is a key approach for
gaining customers’ trust. Possibly because I am living overseas, in my work I am strongly conscious that I should
avoid shutting myself inside my own shell and that I should always think about things from a higher perspective.
China is developing rapidly, and we must change also if we want to keep up. Moreover, I think we must alsochange if we are to compete with major global industrial gases companies. Since my coworkers are not Japanese,
I try to incorporate the good aspects of how Chinese people think and break down my preconceived ideas andattitudes. I have a strong intuition that hanging on to the notion that “Japanese people are like this” will not help me
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perform well.
Fujita: I am also constantly aware of this. I am an engineer, but when customers tell me that they want to buy an
ASU, I think together with the sales personnel about what kind of unit would be suitable. As an engineer, it isimportant simply to make something good, however, the definition of “something good” is different for eachcustomer. When I make a proposal, I really try to incorporate the demands that the customer does not articulate.
Another thing I do when making a proposal is to try and predict what kind of impact I want to have on the customer
and relevant parties. In some cases, I may prepare a separate response, anticipating what one person is likely to
do and what another person is likely to do after that. In this way, I try to act with the idea of looking ahead at what
will happen next.
Ikeda: As I listen to Mr. Fujita, I feel that our approach is broadly similar, although we have different jobs and handle
different products and services. He and I joined the Company in the same year, so we both received the same
training since our new recruit days, and I am impressed that 10 years later we have the arrived at the same kind of
thinking. I pay attention to “ensuring the reliability of stable performance.” Safety and reliability are extremely
important factors for industrial gases and stable isotopic labeling reagents, and for Water-18O, which I mentioned
before. In the SI Business Department, where I work, I often have contact with customers as the person
responsible for engineering, and I try to give them a sense of peace of mind and confidence through a combinationof not only my performance as the person in charge of engineering but also multifaceted proposals delivered with
passion, and a strong grasp of data to back them up.

The Real Meaning of “The Gas Professionals”
Wataru: Even after becoming Nippon Sanso Holdings, the philosophies of “Market-driven collaborative innovation:
Improving the future through gases” and “The Gas Professionals” have not changed. “The Gas Professionals”
cannot be changed; or rather, I think it does not need to be changed. What do each of you think about this?
Saida: Personally, I interpret the “The Gas Professionals” as meaning “sincerity” and “honesty.” If gas supplies are
cut, then plants such as steel works have to stop operations. They would become unable to make steel. We
provide gas to customers like this as part of their infrastructure, so I think that our responsibility as a supplier isextremely important. However, from the customer’s point of view, it is taken for granted in the same way as watercoming out when you turn on a tap—when they open the valve, nitrogen comes out. That’s how if feels for them.
Our mission as an infrastructure service, our job as a group of professionals, is one of sincerity and honesty,
providing gas reliably and safely. Listening sincerely to customers’ concerns and being ready to work with them tofind solutions—this is what “The Gas Professionals” means in my opinion.
Fujita: Since we present ourselves as “The Gas Professionals,” we are telling customers to trust us with their gasrelated issues. In the Engineering Division, where I work, I suppose we are telling people to trust us withengineering-related issues. While that would be fine if I were able to resolve everything myself, that tends not to bepossible. Therefore, I aim to use the specialization of each member of the team, asking various people to help me
and giving them help in return in order to create better proposals for the customer. Our ultimate goal is to propose
the optimal solution for the customer. In our approach to this goal, various people cooperate with one another toachieve it. I think this is what “The Gas Professionals” as a team is all about. Recently, our European business isincreasing and I too was involved in consultations with European engineers; however, since Praxair, Inc. itself is alarge company, as one would expect, it has strong technological capabilities and there is much for us to learn fromthem. As we have brought them into our Group, we will absorb their technological knowledge as well as their
management style and other aspects in order to further develop our own style. I believe this will increase the levelof our professionalism even more.
Ikeda: The Company’s internal resources are limited, so naturally there are limits to our ability to solve customers’issues or develop new products through our own efforts alone. I think it is necessary to grow our community, forexample, by collaborating with customers to solve issues and develop new products. As we stand now, we have a
network with external entities such as universities and research laboratories, and we are currently using this tocreate new value. I think the philosophy refers to using our external network to enhance our capabilities by taking a“market-driven” approach for grasping latent needs when conceptualizing new products, then “collaborating” to give
concrete form to the products.
Fujita: I am not only given directions by a boss, but am also given quite a lot of freedom to follow my own ideas. I
interact directly with our sales team and find that if I churn out proposals they are adopted surprisingly often. I haveexperienced this several times, and find it rather fulfilling. I think the entire Group has this way of allowing people todo things their own way if they actively ask to be allowed to, provided that they have been in the job long enough tohave sufficient experience. That has been my actual experience.
Ikeda: In my department, we are also allowed to follow our own lead (laughs). When I express an interest in doing
something, nobody ever tries to put me off or stop me. If we can bring together a reasonable amount of information
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or supporting data to suggest that a project will work, the department will encourage us to go for it. This kind of
atmosphere and culture is really good.

The Human Resources Needed for Nippon Sanso Holdings Group Going Forward
Wataru: Nippon Sanso Holdings will advance even further in becoming a global company going forward. When we
have reached that stage, what kind of human resources would you like to be in charge of the Group’s future?
Fujita: I joined the Company 10 years ago, and at the time I would never have imagined that the Company wouldgrow to this size. The markets in the United States, Asia, and Europe have already become large, and I neverthought that I would be going to Europe for a business trip, so I feel that the situation has been changing
progressively. Therefore, I think the question to ask is how flexible these human resources can be in responding to
the situation. As “The Gas Professionals,” we take pride in holding steadfastly to our course, while also being
flexible. I think that human resources who can find this balance will be extremely valuable, and I am also trying todevelop this ability.
Saida: Reflecting on my current responsibility for Shanghai Taiyo Nippon Sanso Gas, I think the most important
thing is the strong determination of the leader. It is essential first to have a strong determination to achieve goals,
and to get everyone involved. The other factor is how well this determination can be shared by others in thecompany. There are various ways of achieving that I think, but I feel that it is important to be able to discuss issues
together honestly from an equal position, and to find ways to deal with them. In particular, people overseas havedifferent values, and I think that bringing in the opinions of diverse people enables the creation of something new.
As Mr. Fujita said, we may hold tightly to our creed, but if we hold on too tightly and don’t admit diversity, nothing
new can be created. Going forward, I think that the Company needs flexible human resources who accept diversity
and are willing to change themselves and create something new.
Ikeda: I think that’s right. To overlap with what Mr. Saida just said, the SI Business Department where I work now
has a very high number of mid-career hires, and we have new people joining such as researchers and people whohave founded start-up companies. I think my department takes in more mid-career hires than others in the
Company, but when I work with them I can feel they have a different perspective. If you are alone, your field of view
tends to become narrower, but I have really noticed that the difference in the perspectives of people with different
career backgrounds helps to stimulate opinions and leads to more flexible business planning. If specialists withvarious viewpoints join the Company, or not only specialists but also generalists and management personnel, as
mid-career hires, I am excited to see what kind of synergies will be created.
Wataru: Actually, I think that employees have been held back a little in some ways by the values that we have had
up to now. Our business model to date has been stable, and I think that we need to break up the parts that havebecome stultified with innovation driven by diversity. Ideally, we should have high-quality human resources in every
area, including Japan, the United States, Europe, Asia and Oceania, and the Thermos Business, and I think this will
be necessary. We need to enable further stimulation of employees’ desire to grow, including by preparing systems,
and increase their motivation. Having just heard all of your honest thoughts, I feel a great sense of promise. Let us
share our philosophy not only in Japan but across the globe, as we pave the way for the future. Thank you again
for giving your valuable time and sharing your opinions.

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