The Gas
Professionals
Integrated Report 2021

1-3-26 Koyama, Shinagawa-ku, Tokyo 142-0062, Japan
Tel: +81-3-5788-8512
https://www.nipponsanso-hd.co.jp/en/

Released on September 30, 2021
Revised on September 30, 2021

Year Ended March 31, 2021

CONTENTS
Key Points for Reading“Nippon Sanso Holdings
Integrated Report 2021”

POINT

01

How has the Nippon Sanso Holdings Groupchanged after transitioning to a holding
company structure in October 2020.
What does the Group aim to achieve going
forward? Four directors talk about their
aspirations for the future and their respective
missions for driving further growth as a
global company.
P.2 Directors’ Commitment

POINT

02

As stated in the Group Vision, we arecommitted to increasing industrial productivity,
enhancing human well-being, and contributing
to a more sustainable future through theprovision of innovative gas solutions. We will
promote our business through an organizational structure aimed at strengthening thecomprehensive capabilities of the Group
with authority delegated to our four geographic hubs and the Thermos business.
P.34 T he Nippon Sanso HoldingsGroup’s Value Creation Story

Editorial Policy
We strive to guarantee management transparency and believe in the importance ofbuilding relationships of trust with stakeholders through dialogue. Accordingly, in thisreport we place a priority on ensuring that stakeholders understand our overall value
creation process.
Since FYE2017, we have published an annual integrated report. The purpose of thisreport is to provide financial information, including that related to corporate strategies
and operating conditions, and non-financial information, such as that related to environ­mental protection and social contribution initiatives and to corporate governance. Information has been
selected with consideration to relevance to give shareholders, investors, and other stakeholders an accurate
overall understanding of the Nippon Sanso Holdings Group, its operating activities, and its approach to value
creation. In editing the report, we have referred to the International Integrated Reporting Council (IIRC)’s
International IR Framework, and the Guidance for Integrated Corporate Disclosure and Company–Investor
Dialogue for Collaborative Value Creation, published by the Ministry of Economy, Trade and Industry (METI).
REPORTING BOUNDARY In the 2021 report, we have focused on communicating the business activities andinitiatives in each specific region of operations. To describe the activities of the individual companies orgroups, we have applied the following expression standard. Furthermore, the terms “Nippon Sanso HoldingsGroup” or “the Group” may be used for convenience to refer to Nippon Sanso Holdings and its Group
companies. These terms may also be used in cases where there is no beneficial purpose in identifying a
specific company.

• Formal names (e.g., Nippon Sanso Holdings Corporation): Used primarily in the formal titles of corporate
officers, executive officers, and employees• Truncated formal names (e.g., Nippon Sanso Holdings): In principle, used as the basic way of expressing
company names• Acronyms (e.g., NSHD): Used as a simple expression to allow the reader to identify a particular company inthe context (e.g., in dialogue)• Generic expressions (e.g., the Company, the Group): Capitalized to describe Nippon Sanso Holdings or the
Nippon Sanso Holdings Group, and used with lower case (e.g., the company, the group) when describing
segment operating companies

This report contains important basic information that Nippon Sanso Holdings Corporation particularly
wishes to communicate to stakeholders. In the 2021 version of the integrated report, we have provided“More Information on Sustainability” to communicate detailed non-financial information in a more unified
and integrated manner, rather than simply posting it on our corporate website as we have up until now. The
section covers sustainability approaches and measures implemented by the Nippon Sanso Holdings Group. For
the latest financial information, please refer to the investor relations (IR) information page on our corporatewebsite as before.

03

WHO WE ARE
About the Nippon Sanso Holdings Group8	Characteristics of
the Nippon Sanso Holdings Group16	Thinking about the Future
18	CEO Message
24	CFO Message

428	Roundtable Discussion (1)Our Vision and Our Future asa Global Integrated Industrial
Gas Company

PERIOD COVERED Data in this report is for FYE2021, ended March 31, 2021, although some FYE2022
activities and future issues and targets are also featured.

Disclosure System

32	Directors’ Commitment

14	Aspiration for
the Nippon Sanso Holdings Group

EXPRESSION STANDARD

Important

POINT

0
1

COMMITMENT2

OUR VALUE CREATIONThe Nippon Sanso Holdings Group’s
Value Creation

34	The Nippon Sanso Holdings Group’s
Value Creation Story
36	Business Section: Development ofThree Business Domains
38	Industrial Gases BusinessNippon Sanso Holdings is promoting
sustainability in its management to promote
well-being for people and contribute to amore sustainable future for society and theearth. We explain the Group’s stance onsustainability, which aims to deliver bothsocial value and economic value by helping
to resolve environmental and social issues
through our businesses.

Financial and important
non-financial information

Integrated Report 2021
Basic information on the Company’s
overall operating activities

Fin
Info ancial
rma
tion
We

P.56 Co-Creation: Sustainability Strategy

bsi

te

IR information
Details financial and share andshareholder information for investors
https://www.nipponsanso-hd.co.jp/en/ir/

tion

ma

r
Info

ort
rep s)
Fi
d
e
n
at
No
age
egr ure p
t
n
I
at
(Fe
al

ci
nan

More Information on
Sustainability
Presents the Group’s approaches andmeasures for sustainability as well as a collectionof quantitative non-financial data. This section isfor readers who would like to learn in more detailabout the Group’s approach to sustainability.

42

Electronics Business

46

Thermos Business

OUR STRATEGY
Growth Strategy by Segment

88

At a Glance90

Gas Business in Japan94

Gas Business in the United States

98

Gas Business in Europe102

Gas Business in Asia and Oceania

106

Thermos Business

OUR MANAGEMENT
Corporate Governance112

Corporate Governance122	Roundtable Discussion (4)The Role of Outside Directors
in Encouraging Officers andEmployees Striving to Solve Issues
126	Members of the Board of Directors
and Audit & Supervisory Board
Members130

Director Skills Matrix

132

Corporate Data

134	11-Year Financial and
Non-Financial Summary
136

Non-Financial Highlights

138

Awards139

Editorial Note

50	Market-Driven Section:
Basic Technologies, R&D, and DX

MORE INFORMATIONON SUSTAINABILITY

56	Co-Creation:
Sustainability Strategy

142

62	Roundtable Discussion (2)Progressing toward the Realization of
a Carbon-Neutral Society by 2050
66	Feature: Response to Environmental
and Social Issues
72

Human Resources Strategy

74	Human Resources Development at
Four Geographic Hubs +Thermos Business81	Results of Employee Survey
82	Roundtable Discussion (3)Human Resources Required by
the Nippon Sanso Holdings Group→ P.140

Wideranging

NIPPON SANSO HOLDINGS CORPORATION

1INTEGRATED REPORT 2021

Stance on Sustainability

144	Sustainability Topics:
Management Issues
148

Sustainability Topics: The Earth154

Sustainability Topics: Society164	Sustainability Topics: People(The Company and Its
Organizational Structure)
176

Policies

178

Sustainability Data

COMMITMENT

Directors’ Commitment

Having transitioned to a holding company structure,
the Company aims to contribute to the earth, society, andpeople with engaged, motivated employees working as“The Gas Professionals.” Keeping a broad, open perspective on new trends and new people, we will venture into
new territory and make new proposals, and continue toevaluate them correctly. With this approach, our aspiration
is to create a better society for the future that is sustainable and comfortable.

As “The Gas Professionals,” we will deliver the fullpotential of industrial gases, contributing to a wide range
of industries and helping to resolve social issues.
As the leading manufacturer of industrial gases inJapan, and as “The Gas Professionals,” we will proudly
contribute to the development of Japan’s society andeconomy through industrial gases as we strive to increase
the corporate value of Nippon Sanso Holdings Corporation.

Kenji Nagata
Toshihiko Hamada

Member of the Board,
Representative Director and President,
Taiyo Nippon Sanso Corporation

Representative Director, President CEO

Open-Minded

覚悟をもってOur Determination

NIPPON SANSO HOLDINGS CORPORATION2INTEGRATED REPORT 2021

NIPPON SANSO HOLDINGS CORPORATION

3INTEGRATED REPORT 2021

COMMITMENT

Directors’ Commitment

Through its Group Vision, the Nippon Sanso HoldingsGroup aims to realize the well-being of all our stakeholders,
including our customers, shareholders and investors, andour teammates and their families. As “The Gas Professionals,”
we will work to be our customers’ preferred gas supplier,gaining the trust of stakeholders through highly transparent
communication and by upholding our responsibilities.
At Matheson Tri-Gas, Inc., we will work to realize theGroup Vision by working together as a team to deliveron our commitments.

We are “The Gas Professionals,” and that is the way that
others have come to view us. We deliver quality products
and services in a safe and uninterrupted way. My ambition isfor Nippon Sanso Holdings over the next 10 years to develop
into an outstanding global group which can hold its own
against major competitors in terms of both growth andprofitability. As the director responsible for the European
business, a core operating region for the Group, I will use
my experience to promote safety, compliance, and diversity
and inclusion. Achieving our goals will not be easy, and it
will require strong leadership and overcoming hurdles, butthat it is what makes it so worthwhile.

Thomas Scott Kallman
Member of the Board,
Chairman and CEO, Matheson Tri-Gas, Inc.

Eduardo Gil Elejoste
Member of the Board,
Chairman and President, Nippon Gases Euro-Holding S.L.U.

Accountability
NIPPON SANSO HOLDINGS CORPORATION

4INTEGRATED REPORT 2021

RELIABLENIPPON SANSO HOLDINGS CORPORATION

5INTEGRATED REPORT 2021

1

SECTION

WHO WE ARE
About the Nippon Sanso Holdings GroupThe Nippon Sanso Holdings Group has grown in step with the development ofindustry. Today, our corporate group has operations in 30 countries and regions
around the world. We will concentrate our accumulated technological capabilities,
customer base, knowledge, and experience as we strive to play an essential
role in the development of a wide range of industries and the realization ofan abundant society.

NIPPON SANSO HOLDINGS CORPORATION

6INTEGRATED REPORT 2021

NIPPON SANSO HOLDINGS CORPORATION

7INTEGRATED REPORT 2021

WHO WE ARE

Characteristics of
the Nippon Sanso Holdings Group

Business Operation Structure Comprising a Global Network of Four Geographic Hubs and the Thermos BusinessNippon Sanso Holdings has formulated 12 new policies ( P.176) as a pure holding company. Based on these policies, theNippon Sanso Holdings Group will build a structure for integrating management with the operating companies through the proposal of strategies, enforcement of compliance, and enhancement of the risk management structure covering the entire Group.
The holding company will also realize the Group’s comprehensive capabilities by incorporating best practices in each region.
Structure Prior to Transition to a Holding Company

Our Direction

Gas Business in the United States
Matheson Tri-Gas, Inc. GroupThe Nippon Sanso Holdings Group, withOperations in 30 Countries and Regions
around the WorldThe Group’s Key Concept
In its industrial gases business, the Group provides reliablesupplies of industrial gases 24 hours a day to a wide range
of industries, such as steelmaking, chemicals, automotive,
shipbuilding, machinery, medicine, food, beverages, andelectronics. As “The Gas Professionals,” we believe that thesafe and reliable delivery of industrial gases contributes to thedevelopment of these industries and solutions to problems
facing society.
In the Thermos Business, we aim to offer comfortable andenvironment-friendly lifestyles for people and society throughinsulation technology. This concept is the starting point of our
product development.
We are committed to realizing a brighter future throughour business.

The Nippon Sanso Holdings Group operates in four geographic
hubs: Japan, the United States, Europe, and Asia and Oceania.
In addition, the Thermos Business supplies THERMOS brandproducts to over 120 countries worldwide.
In October 2020, we transitioned to a holding company
structure, shifting away from a Japan-centric business
management structure in order to build a competitive Group
operation structure as a global supplier of industrial gases.

Gas Business in Europe
Nippon Gases Euro-Holding S.L.U. GroupA Holding Company Structure toOrganize the Operating Companies at
Each Global Geographic Hub

Our main industrial gases products are separation gases suchas oxygen, nitrogen, and argon. Customers require different
types of gas depending on their applications and different
modes of supply depending on the required quantities.
Therefore, to transport and supply industrial gases safely,
reliably, and efficiently, the general approach is to build asupply network in which the site of production and consumption are contained in a certain geographical area. In
this way, the industrial gases business model is based on
production at the site of consumption.

NIPPON SANSO HOLDINGS CORPORATION

Our regional operating companies have a deep understanding of their local business environment and market characteristics. They are closely positioned to our customers, andgiving each operating company greater authority helps toachieve fast, agile management and business operation byincreasing decision-making speed. Under this operation
framework, the holding company executes cross-regional
measures to realize the comprehensive capabilities of theGroup and allocates resources appropriately to operatingcompanies to enable them to perform their respective roles.

8

INTEGRATED REPORT 2021

Operating company groups in Asia and Oceania

Thermos Business

Gas Business in Japan

Thermos K.K. Group

Taiyo Nippon Sanso Corporation Group

Current Structure of the Nippon Sanso Holdings GroupGas Business in Japan
P.90
Taiyo Nippon Sanso Corporation GroupGas Business in the United States
P.94

Special Features of
Nippon Sanso Holdings’ Structure
Industrial Gases Business Model of
Production at the Site of Consumption

Gas Business in Asia and Oceania
Taiyo Nippon Sanso
Corporation

Matheson Tri-Gas, Inc. Group

Nippon Sanso
Holdings
Corporation

Gas Business in Europe
P.98
Nippon Gases Euro-Holding S.L.U. GroupGas Business in Asia and Oceania
P.102
Operating company groups
in Asia and Oceania

Kenji Nagata
Representative Director and President
Taiyo Nippon Sanso Corporation

Thomas Scott Kallman
Chairman and CEO
Matheson Tri-Gas, Inc.

Eduardo Gil Elejoste
Chairman and President
Nippon Gases Euro-Holding S.L.U.

Tsutomu Moroishi
Senior Executive Officer,
Group Corporate Planning Office*Nippon Sanso Holdings Corporation* The Australia and Asia Business Department has been
established within the Group Corporate Planning Office tooversee business promotion for companies in Asia and Oceania.

Toshihiko Hamada
Representative Director, President CEO
Nippon Sanso Holdings Corporation

Thermos Business
P.106
Thermos K.K. GroupNIPPON SANSO HOLDINGS CORPORATION

9Yuji Kataoka
Representative Director and President
Thermos K.K.

INTEGRATED REPORT 2021

WHO WE ARE

Characteristics of the Nippon Sanso Holdings Group
Revenue

Growing into a Global Corporate Group
Developing Businesses in Japan and Overseas
In the industrial gases business, the Group has aggressively conducted M&A,
acquiring part of the European business of Praxair, Inc. (December 2018) andthe U.S. HyCO business of Linde AG (February 2019). Currently, the Group has
a structure with four geographic hubs in Japan, the United States, Europe, andAsia and Oceania. The Thermos Business has also built production and sales
networks in Japan and overseas.
Gas Business in
the United States

Thermos Business

4,401

1,333

employees

Gas Business in
Europe2,912

Operating profit (IFRS)¥818.2 ¥88.8
billionGas Business inJapanemployees

6,008

employees

Gas Business in
Asia and Oceania

4,377

employees

employees

326

19,357

employees* Employees who are assigned to the Group’s Corporate
Administration Division or Engineering Division andcannot be classified under a specific segment.

*

Overseas revenue ratio

Countries and regionsof operation

Overseas affiliatedcompanies

Industrial gases global
market share ranking

56.1 % 30
167

4 th

Domestic affiliated companies

Other*

Consolidated number of employees

139

3%
18%

Gas Business in Japan¥338.9 billion

OVERSEAS

12,75865.9 %

Gas Business in the United States

employees¥189.9 billion
Industrial gases

Gas Business in Europe¥160.0 billion

Electronics

Gas Business in Asia and Oceania

Thermos¥105.3 billion
JAPAN

6,599
34.1 %* The consolidated number of employees is the figure for all Group companies as of March 31, 2021.
The aggregation method is different from that used in the non-financial information section ( P.137, P.181) later in the report.

NIPPON SANSO HOLDINGS CORPORATION

10billionINTEGRATED REPORT 2021

Thermos Business¥23.9 billion
employees

Revenue by Segment

NIPPON SANSO HOLDINGS CORPORATION

Revenue by Business

11

INTEGRATED REPORT 2021

79%

WHO WE ARE

2020

Characteristics of the Nippon Sanso Holdings Group

2008
Acceleration of Global Expansion

Opening Up of New Fields with
Advanced Technologies

Since its foundation as Nippon Sanso Ltd. in 1910, Nippon Sanso Holdings has been contributing to thedevelopment of Japanese industry. In the 1980s, having established itself as the leading manufacturer in
the Japanese market, the Company searched for further growth potential in overseas markets. Startingwith investments in Singapore and the United States, the Company continued to expand in Asia,
including China. In the 2000s, after a series of aggressive M&A in the United States and other countries,
the Company expanded into Europe in 2018. The Group’s geographic area of operations has now grown
to include 30 countries and regions.

Having succeeded in developing originalultra-high-purity oxygen cryogenic separation technology, in 2004 the Company
started manufacturing the Water-18O stable
isotope, which is used as a material for
testing reagents used in positron emission
tomography (PET) tests that help with early
detection of cancer. As the only manufacturer of this product in Japan, the Company
supplies it to various medical institutions.

1910

1978

1980

2004
Started production of Water-18O, an ingredient forreagents used in PET diagnostics

The Dawn of Japan’s Industrialization

Expansion into New Business Fields
outside of Industrial Gases

Expansion into Overseas Markets

Merged Nippon Sanso, Ltd. and Taiyo Toyo Sanso
Co., Ltd. to form Taiyo Nippon Sanso Corporation2018
Acquired part of the European industrial gases
business of U.S. industrial gases supplier, Praxair, Inc.

522.7

2012

2005

2006

2007

2008

2009

2010

2013

2014

2015

Japanese GAAP (J-GAAP)NIPPON SANSO HOLDINGS CORPORATION

740.3
581.5

594.4

646.2

Consolidated revenue(Billions of yen)

468.3

2011

2016–

300.0

1970s
Started early on development of electronic materials
gases needed for semiconductor manufacturing,
establishing a position in the electronics market

477.4

397.3

1964
Opened the first on-site plant to realize reliable,
high-volume gas supplies

483.6

1995
Merged Taiyo Sanso Co., Ltd. and Toyo Sanso K.K.
to launch Taiyo Toyo Sanso Co., Ltd.

559.3

1982
Established National Oxygen Private Ltd. in Singapore

1999
Merged U.S. Matheson Gas Products,
Inc. and Tri-Gas Inc., to launch
current Matheson Tri-Gas, Inc.

1946
Established Taiyo Sanso Co., Ltd.

2016
Acquired part of the U.S. industrial gases businessand relevant business assets of French industrial
gases supplier Air Liquide S.A.

Net sales(Billions of yen)

433.3

1935
Succeeded in producing Japan’s first air separation
unit (ASU) for manufacturing oxygen

2015
Acquired Australian liquefied petroleum gas(LP gas) and industrial gases distributor Renegade
Gas Pty Ltd with a view to expanding into theindustrial gases market in Australia

2005–2015

495.7

1978
Commercialized the world’s first stainless steel
vacuum-insulated bottle

2012
Acquired Singapore-based industrial gases andwelding equipment manufacturer Leeden Limited

2019
Acquired the U.S. HyCO business of German
industrial gases supplier, Linde AG

507.7

1918
Established Toyo Sanso K.K.

The Company applied vacuum-insulation
technology and special brazing technologies for building low-temperature liquid gas
storage tanks, successfully commercializing
the world’s first stainless steel vacuuminsulated bottle in 1978. This was the birthof the THERMOS brand, whose products
are loved throughout the world today.

As the Company continued its journey as aleading domestic manufacturer, it started toinvest in overseas markets with a view tofurther business expansion. In the 1990s,
the Company expanded into China,
Thailand, the Philippines, Taiwan, andVietnam, and in the 2000s, India,
Indonesia, and Myanmar.

458.5

The Company’s founder, Takehiko Yamaguchi,
identified the social importance and future
potential of producing and supplying
oxygen separated from air within Japan.
Korekiyo Takahashi, then deputy governor of
the Bank of Japan (and later prime minister),showed interest in Mr. Yamaguchi’s ideas,
and decided along with other officers of
the Bank of Japan to make an investment
to establish Nippon Sanso Ltd.

2008
Established Dalian Changxing Island
Taiyo Nippon Sanso Gas Co., Ltd. in China

2020
Transitioned to a holding company andchanged the company name. The former name,"Taiyo Nippon Sanso Corporation," was transferred to a newly established operating company
in Japan.

818.2

2004

Expansion into overseas markets that began in
the 1980s accelerated in the 2000s. In 2018,
the Company acquired part of the European
business of U.S. industrial gases supplier
Praxair, Inc. (now Linde plc), making a fullscale business expansion into Europe. With
this, the overseas revenue ratio climbed
above 50%, and the Group succeeded inbuilding a global business network.

On October 1, 2020, the Company
transitioned to a pure holding company
structure and changed its name to
Nippon Sanso Holdings Corporation.
The Company will strive for further growthwith a structure comprising a global network of four geographic hubs and the
Thermos Business.

850.2

Expanding Globally as“The Gas Professionals” throughAggressive Capital Investment and M&A

Use of Our Global BusinessNetwork to Achieve Further Growth12

INTEGRATED REPORT 2021

2016

2017

2018

2019

2020

International Financial Reporting Standards (IFRS)NIPPON SANSO HOLDINGS CORPORATION

13INTEGRATED REPORT 2021

2021

Years ended
March 31WHO WE ARE

Aspiration for the Nippon Sanso Holdings Group
Our Core Philosophy

We believe that the understanding and practical implementation of the Nippon Sanso
Holdings Group’s Philosophy and Vision by each individual employee will realize ouraspiration of being “The Gas Professionals.”

The Gas Professionals
Group Philosophy

Proactive. Innovative. Collaborative.
Making life better through gas technology.
Background to the Group Philosophy
and Vision Formulation, andForward Development

Group Vision

We aim to create social value throughinnovative gas solutions that increaseindustrial productivity, enhance humanwell-being, and contribute to a moresustainable future.

NIPPON SANSO HOLDINGS CORPORATION14INTEGRATED REPORT 2021

With the transition to a holding company structure
in October 2020, the Group Philosophy and Group
Vision were revised to reflect the Group’s purpose.
To promote shared understanding with the Group’s
employees working around the world, thePhilosophy and Vision were drafted in English using
clearer, more succinct expressions.
Now, guided by this Philosophy and Vision, we
aim to further realize the Group’s comprehensive
capabilities. To this end, we will promote active
communication within the Group, seeking to provide as much value as possible to our customers andall other stakeholders.

NIPPON SANSO HOLDINGS CORPORATION

15INTEGRATED REPORT 2021

WHO WE ARE

Aspiration for the Nippon Sanso Holdings Groupate
to cre
t
ibute
pmen
Contr
evelo
ble d
a
in
a
sust

Ryuta Takahashi
Sales Section, Sales Division,
Kanto Branch
Nippon Ekitan Corporation

Lisa Kratz
Finance & Accounting
Matheson Tri-Gas, Inc.

Thoroughness

Paolo Ronzi

Masataka Sakamoto

Business Support
Nippon Gases Italia S.r.l.

Technical Division, R&D Department
Thermos K.K.

be
e
can
tenc
lem
prob ith persis
y
r
e
w
Ev
e
m
o
overc

n
ivatiomot
Self- amwork
e
t
d
an

Hiroaki Hijino

Sally Perez

Group Legal
Nippon Sanso Holdings Corporation

Operations
Continental Carbonic Products, Inc.

thatssion s cold
A pa
row
g
r
neve

k!

Thin

n

utio

trib

Con

We are a great team!

CÓ CÔNG MÀISẮT, CÓ NGÀYNÊN KIM
Pham Van Huu

Ayako Kai
Administration Division, Kansai Branch
Taiyo Nippon Sanso Corporation

Long Son Factory
Nippon Sanso Vietnam JSC“思考！”
Yang Di
Sales Department
Dalian Taiyo Nippon Sanso Gas Co., Ltd.

Emiko Shimada

Hideyuki Sumida
Sales Division, Western Branch
Thermos K.K.

Cristina Gómez

Trade and Logistics Division
IMI Co., Ltd.

HSEQ - Safety
Nippon Gases España S.L.U.

Kelvin Dixon
Risk Management
Matheson Tri-Gas, Inc.

Thinking about the Future

Think positive at all times

Efficiency

We asked team members from each of our four geographic hubs andthe Thermos business to write a brief statement about their commitment toother Group employees around the world.

Maricar D. Santos
Ann Schauwers
Procurement
Nippon Gases Belgium NV

Rubylyn Sandoval Manalo

Sales & Marketing Department
Nippon Sanso Ingasco, Inc.

Technical Division Tech Admin Department
Vacuumtech Philippines Inc.

f
e
tinu
uit o
purs
t con
mus nt daily
g
We
ta
aimin
s
,
n
n
o
c
tio
.
our
rma
reas
info
ew a r!
new
re n
ethe
xplo
g
e
o
o
t
t
e
striv
Let’s

Advance

Yudai Ishizaki
Stephen Thompson
Operations
Western International Gas & Cylinders, Inc.

Kana Kibashi
Sales Division, Sales Administration Department
Thermos K.K.

NIPPON SANSO HOLDINGS CORPORATION16

INTEGRATED REPORT 2021

Sales Section I, Sales Division, Kansai Branch
Taiyo Nippon Sanso Gas & Welding Corporation

Janice Lee

Marisa Reyes
Human Resources
Matheson Tri-Gas, Inc.

Richard Hsu
Logistics Division
Nippon Sanso Taiwan, Inc.

NIPPON SANSO HOLDINGS CORPORATION

17

INTEGRATED REPORT 2021

Gas Sales
Leeden National Oxygen Ltd. (Gas Division)

WHO WE ARE

CEO Message

We Aspire to Be a Corporate Group That Is
Open to a Wide Range of Opportunities and
Is Motivated by New Challenges.
Introduction
I would like first to express my deepest sorrowfor all those who have lost their lives in the
global COVID-19 pandemic. I also offer mysincerest condolences to those who are currently
ill and my prayers for their speedy recovery.
Moreover, I would like to express my profoundrespect and gratitude to all those who are striving each day to prevent the spread of the virus,
working earnestly to provide medical care all
around the world.
I was appointed representative direct andpresident CEO in June 2021. I joined theCompany in 1981 (Nippon Sanso Ltd. at thattime), and in 2002 I was appointed executive
vice president of Matheson Tri-Gas, Inc. I worked
in the United States until 2005.
The COVID-19 pandemic has brought suddenchanges to the lifestyles of people around theworld. Moreover, we are now also facing a hostof social issues such as climate change and foodshortages. When the world undergoes dramaticchanges, we must consider how to respond. I
would like us to remain focused on this challenge
and contribute to building a brighter future.

Management Structure
In October 2020, Nippon Sanso Holdings transitioned to a holding company structure. Under
our former structure, our operating company inJapan (Taiyo Nippon Sanso Corporation at thetime) managed our operations in the UnitedStates, Europe, and Asia and Oceania, as well as
the Thermos business, while focusing mainly on
Japan. With the transition to a holding company

Toshihiko Hamada
Representative Director, President CEONIPPON SANSO HOLDINGS CORPORATION18

INTEGRATED REPORT 2021

NIPPON SANSO HOLDINGS CORPORATION

19

structure, the relationship between Taiyo Nippon
Sanso Corporation and the operating companies
in each geographic hub, along with the Thermos
group, has now changed from a parent subsidiaryto a sibling relationship. With Nippon Sanso
Holdings as the holding company, the Group’sbusinesses are structured into four groups: theTaiyo Nippon Sanso Corporation group in Japan,
the Matheson Tri-Gas, Inc. group in the UnitedStates, the Nippon Gases Euro-Holding S.L.U.
group in Europe, and the Thermos K.K. groupfor the Thermos business. In Asia and Oceania,
each company in the area is under the direct
management of the holding company.
Furthermore, the three top executives of therespective gas operating companies in Japan,
the United States, and Europe are members of
the Board of Directors.
Our transition to this structure has several
objectives: namely, to increase decision-making
speed and appropriately allocate management
resources by delegating authority; to clarify
responsibility for business execution and performance; and to strengthen the Group’s comprehensive capabilities by sharing the characteristics
and strengths of each area. During the pandemic, the spread of infection differed fromregion to region. Furthermore, in our business,the product is manufactured at the site of consumption. In light of these factors, we decided
that giving discretion over decision-making toour operating companies, which have deep local
knowledge, would lead to faster, more efficientmanagement.
Since the early 1980s, the Nippon Sanso
Holdings Group has expanded out from Japan
across the world, actively undertaking capital
investment and M&A. In December 2018, we

INTEGRATED REPORT 2021

WHO WE ARE

CEO Message

acquired part of the European business of Praxair,
Inc., and all of the employees at the time,
including management, joined our Group. We
have retained the existing business operating
structure and established a business platformthat enables flexible management decisionmaking appropriate to the business environment. Over the past few years, there have been
just five retirements, all due to reaching mandatory retirement age. This low attrition rate isanother sign that the post-merger integration
has been progressing smoothly.
Separate from the Board of Directors, at thebusiness execution level, we hold monthly business reporting meetings with each regional
operating company and Thermos K.K. In the
Asia and Oceania region business, the Oceania
and Asia Management Division within the
Corporate Planning Office keeps in close communication with local offices. Rather than justdelegating authority, we have also prepareda structure for communicating our intention
throughout the entire Group, and the executives
in charge of each business are responsible for
explaining and carrying it out.

Impact of COVID-19
Looking back on FYE2021, the impact of
COVID-19 on the Company’s business activities
has been enormous.
On the other hand, I am confident in theresilience of the industrial gases business andof our customers. Looking at year-on-year
revenue changes, in the first quarter we saw
a decrease, but subsequently our revenue
gradually recovered, and by the fourth quarterit had rebounded to an increase of 4%. As“The Gas Professionals,” the Nippon Sanso
Holdings Group strove to ensure reliable supplies
of industrial gases, and we made a great effort
toward helping the users and the economy ingeneral to recover from the pandemic.
Looking at the business environment for
FYE2022, there are still uncertainties regarding
the progress rate on COVID-19 vaccinations andtheir efficacy as a countermeasure against thevirus, making it difficult to foresee the economic
trends going forward. On the other hand, theeconomy has been recovering gradually since
the second half of FYE2021, and some businessfields are also expected to display strong
growth. In FYE2022, we are forecasting revenueof ¥865.0 billion (up 5.7% year on year) andoperating profit of ¥96.5 billion (up 8.6% year
on year).

Making Life Better

At the 17th Ordinary General Meeting of
Shareholders, held on June 18, 2021, Ms. Miri Hara
was appointed as a new outside director, bringing
the number of outside directors to three. In addition, to further enhance the function of the Boardof Directors, we have established the post of Chairmanof the Board. We expect these actions to further
strengthen the Company’s corporate governance.

NIPPON SANSO HOLDINGS CORPORATION20

At this point, I would like to talk about theGroup Philosophy. Our industrial gases businessserves customers in a diverse range of industries,
including steelmaking, chemicals, automotive,
shipbuilding, machinery, medicine, food, beverages, and electronics. I believe that our role as“The Gas Professionals” stated in our Group
Philosophy is to provide a safe and reliablesupply of industrial gases to these customers
along with gas solutions.
“The Gas Professionals” is a core concept that
informs our efforts to expand business correctlywith correct judgment. The industrial gases that
we handle are closely connected to various fields.

INTEGRATED REPORT 2021

Therefore, I believe that as we expand our business centered on industrial gases, we can contribute to increasing industrial productivity,
enhancing human well-being, and realizing
a more sustainable future.
I think that this applies not only to the industrial gases business but also to the stainless steel
vacuum-insulated bottles that are the core product of the Thermos Business. The birth of thisbusiness goes back to 1978, when the Company
became the first in the world to commercialize
unbreakable vacuum-insulated bottles made ofstainless steel. This product was developed byapplying vacuum-insulation technology andspecial brazing technologies cultivated in theindustrial gases business. It is an environmentfriendly product that does not require any otherenergy such as electricity or gas to keep contents
hot or cold. At the same time, we are working
to reduce environmental impact throughout
the entire product life cycle, aiming to createa society that achieves both abundance andenvironmental sustainability. Vacuum-insulatedbottles are an excellent example of environmental preservation through energy saving. As apioneer in the field, Thermos K.K. continues toflexibly combine its carefully nurtured insulation
technologies with its unique lifestyle comfort
concept to create discerning products for
inspired lifestyles. Part of the Thermos K.K.
group’s philosophy is expressed as “Making life
better.” This aspiration is a common value for
the Nippon Sanso Holdings Group, including the
Thermos Business.

Toward the Realizationof a Carbon-Neutral Society
One urgent key issue to be addressed for“Making life better” is responding to carbon
neutrality. Realizing a carbon-neutral society by
2050 will require a great deal of knowledge andeffort on the part of everyone, including ourCompany. Up until now, we and the otherindustrial gases suppliers have advanced ourcarbon gas handling technologies throughour involvement in the refining (manufacture)and supply of greenhouse gases (GHGs),
particularly CO2, in the form of carbon gas(liquid carbon dioxide and dry ice).
Moreover, in Europe, which is advancing
strategies to achieve carbon neutrality, theNippon Gases Euro-Holding S.L.U. group is leading our efforts to form a coordinated organization that also includes the Matheson Tri-Gas, Inc.
group in the United States and the Taiyo Nippon
Sanso Corporation group in Japan. This organization is currently examining the Group’s business strategies for realizing a carbon-neutral
society. We are exploring short- and mediumterm initiatives that the Group could take toachieve the target of carbon neutrality by 2050
( P.70).
Recently, hydrogen gas has been drawing
attention as an environment-friendly energy
source. In terms of technologies for supplying
and handling hydrogen gas, the Group is working on the development and sale of hydrogenstations (fixed and mobile types) in the fieldof supply infrastructure for hydrogen, which isthe fuel for fuel cell vehicles (FCVs). In addition,
the Company acquired the U.S. HyCO businessof Linde AG in February 2019. This businessinvolves separating hydrogen and carbon monoxide from natural gas and other sources, thensupplying them to oil refineries and chemicalindustries through the on-site method. By combining this with our technology and knowledge
related to carbon capture, utilization, and storage (CCUS), we believe that we can manufacture
large quantities of economical blue hydrogen*,which will enable us to contribute to the early
realization of a hydrogen society. Moreover,another carbon-free energy source that has
been drawing attention is ammonia. We alsoneed to look at developing technologies forusing it efficiently. As “The Gas Professionals,”
we will use a multifaceted approach, listening
attentively to customer feedback with an­entrepreneurial spirit, aiming to co-create with
our partners.
* Hydrogen made from fossil fuels such as natural gas in which the CO2
emitted during production can be recovered using CCUS. It can beconsidered a CO2 emission-free form of hydrogen generation.

NIPPON SANSO HOLDINGS CORPORATION21

INTEGRATED REPORT 2021

WHO WE ARE

CEO Message

Sharing Best Practices and Realizing
Optimal Distribution of Resources
across Four Geographic Hubs Globally
In its industrial gases business, the Group has
technologies for the manufacture and supply ofgases, as well as various basic technologies thatit has developed over many years. These include
plant and engineering technologies ranging
from plant design to manufacture and maintenance, gas handling technologies to ensure
continued safe and reliable supplies of industrial
gases, and gas application technologies formaking use of industrial gases in various fields.
These technologies enable us to handle all
aspects of industrial gases. Furthermore, we aredeveloping customer service systems for thesetechnologies in our four geographic hubs:
Japan, the United States, Europe, and Asiaand Oceania.
The electronics business is one that will drive
the Group’s further growth. Operations havebeen centered mainly in Japan, North America,
and East Asia; however, with the addition ofEurope, we will now cover an even broader
market. To enable this, we will coordinate with
our operating companies in each region to realize centralized management of information,such as local business environments and sales
activities, the status of customers’ production
activities, and R&D trends, in order to provide
flexible operations and user services globally.

NIPPON SANSO HOLDINGS CORPORATION

22

In addition, helium gas is also used in various
fields such as medicine, semiconductors, aerospace, and nuclear reactors. To provide a reliablesupply of helium to its customers globally, theGroup has internal supply arrangements, fromsecuring mining interests and raw materials toallocating them to meet demand in a wide
range of fields around the world. These are
jointly handled by the Group Helium Strategy
Department within the Corporate Planning
Office of Nippon Sanso Holdings Corporationand the Helium Gas Team of Matheson Tri-Gas,
Inc. in the United States.
Through the delegation of authority, we will
actively make use of the technologies, knowledge,
and experience of each operating company, fully
leveraging their individual capabilities to realize
optimal resource allocation for the Group.

DX, R&D, and Human Resources Strategies
One example of digital transformation (DX)among the Group’s current businesses is theintroduction of automation for air separation
unit (ASU) operations. In the United States,
product automated systems for ordering andvehicle deployment have been built, enabling us
to manage a wide-area supply network remotelywith a small number of people. Meanwhile, inJapan, we are working to build a supply network with the smallest labor force possible,
while complying with relevant laws and regulations. We centralize the management of datasuch as inventory volume, usage volume, andgas analysis results, sharing the information with
manufacturing bases and associating it withproduction and transportation plans in asystem that can supply gas semi-automatically.
Moreover, for semiconductor manufacturers
with global manufacturing bases, we will immediately share important information related tothe production, analysis, and supply of electronicmaterials gases with our customers across supply
regions. This will improve quality and productivity and should also enable us to respond quickly
to customers as a single Group. Going forward,
I would like to see the entire Group make proactive use of DX for supply chain optimization.

INTEGRATED REPORT 2021

In regard to R&D, I expect that we will establish a priority order for issues to be addressedin our next medium-term management plan,
which is currently being formulated; however,
our initiatives to realize a carbon-neutral society
will likely assume a much higher level of priority
than before. The technology and knowledge
that we have cultivated will enable us toapproach issues from various aspects, and bycooperating on co-creation with partner companies, we aim to contribute to the realization of abetter society. In terms of the division of roles
within the Group, basic R&D fields are handled
in Japan, while other areas are responsible
for the development of new gas application
technologies, engineering technologies, andsolutions development.
Next, what I require from the Group’s humanresources is that they take a global perspective.
I myself was involved for over 10 years in thebusiness management of Matheson Tri-Gas, Inc.
in the United States. When I returned temporarily to Japan, I often found myself reflecting thatthings would be approached differently in the
United States. If we can recognize the different
approaches that are taken in the United States,
Europe, Japan, and so forth, then I believe that
we can achieve communication without fixatingon the differences between each of their waysof doing business, and this will also encourage
innovation. I hope that we will eventually makeglobal personnel exchanges commonplace, andin a few years realize diversity within Nippon
Sanso Holdings. Ideally, I would like to see anincrease in the number of people who are able
to operate in the context of each country andare able to make judgments, offer opinions, andengage in communications with local sensitivity.

year-end dividend for FYE2021 by ¥2 year on
year, to ¥16 per share. Together with the interim
dividend of ¥14, the total annual dividend willbe ¥30 per share. For FYE2022, we plan to pay
an annual dividend of ¥32 per share. We would
like to ask all our shareholders and investors fortheir continued support and guidance.
As we in the Nippon Sanso Holdings Group
provide customers throughout the world witha safe and reliable supply of the products andservices that they need, we aim to realize ourGroup Vision to “enhance human well-being
and contribute to a more sustainable future.”
Through our business, we will work with ourcustomers and stakeholders to ensure that weare good corporate citizens. My goal is to be thekind of corporate group in which each individual
employee is open to a wide range of opportunities and is motivated by new challenges, inspiredby the concept of “The Gas Professionals.”
September 2021

In Conclusion
The Company remains aware of the importanceof internal reserves for enhancing, growing, andstrengthening its corporate structure, while
striving to give returns to shareholders in accordance with a dividend policy that considers stabledividends and links to performance. In line withthis policy, we have decided to increase the

NIPPON SANSO HOLDINGS CORPORATION

23

INTEGRATED REPORT 2021

WHO WE ARE

CFO Message

We Consider the Group’s
Financial Soundness andSustainability to Be Our Top
Priorities and Will Therefore
Aim to Reduce Interest-Bearing
Debt and Increase ROCE.
Introduction
As Chief Financial Officer (CFO) of Nippon Sanso Holdings
Corporation, my main priority is to ensure the financial
health and sustainability of the Group. My approach toaccomplishing this is two-fold. First, I focus on financial fundamentals, which include clear and accurate reporting in our
securities filings, maintaining a strong internal control environment, ensuring adequate financing and working capitalmanagement, and providing appropriate communication to
our shareholders. In addition to ensuring a solid financial
foundation, as the second part of my two-fold approach
I support long-term strategic improvements such as the
deployment of best practices, advancement of continuous
productivity initiatives, analyzing / prioritizing capital expenditures, increasing return on capital employed (ROCE), reducing interest-bearing debt, and contributing to a moresustainable future.
To touch briefly on my background, after working as acertified public accountant (CPA), from 1993 to 1996, within
an Accounting and Auditing firm, I worked for over twenty
years in various financial positions at Praxair, Inc. in the
United States. During these years, in addition to finance, I
was also periodically responsible for Information Technology,
Procurement, Productivity, Operational Excellence, andCompliance. In 2017, I was reassigned overseas andappointed as CFO of Praxair Europe based in Madrid, Spain.
With the acquisition of Praxair Europe by then Taiyo Nippon
Sanso Corporation in December 2018, I remained on as CFOof the European business and became a member of the Taiyo
Nippon Sanso Group. On October 1, 2020, I was appointed
CFO of Nippon Sanso Holdings based in Tokyo, Japan.
Naturally, as CFO I employ defensive strategies such ascost reduction, but personally given my past experiences andresponsibilities, I focus on productivity and waste reduction
initiatives. I encourage other members of the executive teamto support and drive these programs because active promotion of these initiatives across the global business increases
the Company’s earnings, efficiency, financial health, andshare price.

Alan David Draper
Executive Officer,
Group Finance and Accounting Office, and CFO

NIPPON SANSO HOLDINGS CORPORATION24

INTEGRATED REPORT 2021

Characteristics of the Company’s Employees andContribution to the Company

was a tremendous accomplishment considering the weak
first quarter of the fiscal year.
In the first half of the year, we faced challenges given the
pandemic-related government restrictions and global manufacturing slowdown. Our downside risk in the first half waslimited due to the nature of our products which are indispensable in many areas of society. In the second half, theCompany’s results recovered significantly as our dedicatedteam of employees successfully enabled reliable supply anddelivery to our customers as the macroeconomy improved
with an industrial manufacturing rebound in key regions.

During FYE2021, our nearly 20,000 dedicated employees of
the Nippon Sanso Holdings Group performed selflessly andexceptionally throughout the year, despite the COVID-19
pandemic. Our team was productive and made use of theiraccumulated expertise in a tireless effort to ensure reliable
production and supply. Our employees, across the 30 countries in which we operate, reemphasized through their outstanding work during the pandemic that they are the mostimportant asset of our Company. During the pandemic, ourCompany was deemed an essential supplier in nearly every
operational region. Our products support society throughmany market segments such as medical, pharmaceutical,
food processing and packaging, electronics, petrochemicalrefining, and transportation. The Company’s employees hada challenging but successful year in FYE2021, producing
these essential products and providing them to the markets
we serve.

Ortus Stage 2 Overview and
Major Accomplishments
Nippon Sanso Holdings’ medium-term management plan
“Ortus Stage 2” covered the period from April 1, 2017 toMarch 31, 2021. Therefore, the closing of FYE2021 also
closed the chapter of our four-year plan. The team madesignificant progress completing objectives set out in theplan and positioned the Company well for continued growthand success.
One of the key objectives of Ortus Stage 2 was toimprove and diversify the Company’s geographic footprint.
We accomplished this global diversification effort throughtwo significant acquisitions. The first acquisition was of an
extremely large industrial gases business in Europe. Entering
this market was a tremendous achievement considering that
the Company did not have a global footprint at that time.
The European company was later named Nippon Gases
Europe. The second acquisition was of the HyCO business in

Financial Performance andNippon Sanso Holdings’ Strengths
By providing essential products to society, as explained
above, the Nippon Sanso Holdings Group was able to end
FYE2021 with solid results, despite the unusual and challenging year. Revenue for the year was down 3.8% and operating income 5.4%. However, net income increased 3.5% andfree cash flow increased 2.4%, and the adjusted net debt-toequity (D/E) ratio decreased from 1.45 to 1.15 times. This

Cash flow (FYE2021 Full-term)
Despite the pandemic, our company generated sufficient free cash flow to distribute dividends and ensure debt reduction.
(Billions of yen)Free cash flow* 1

89.5
149.2
1.0
60.7
100.0

End of FYE2020
Beginning cash

52.9

Operatingcash flow

Capital expenditures Other regarding
investing activities& Investments
and loans

91.0

25.9

Long-term
debt repayment*2

Short-term
debt repayment*2

12.1
Full-term
dividend paid

*1 Items reconstructed from consolidated statements of cash flows prepared in accordance with IFRS
*2 Represents cash paid
*3 Indicates items such as Forex impact on cash lease obligations, acquisition of investments, and net proceeds from short-term borrowings

NIPPON SANSO HOLDINGS CORPORATION

25

INTEGRATED REPORT 2021

7.6
Other*3 regarding
financing activities

End of FYE2021
End cashWHO WE ARE

CFO Message

NSHD operating entities. The global structure allows us tobetter identify organizational talent in geographical regions
or businesses. It provides us with the opportunity to leverage
their knowledge and experience across the organization andimprove the collective strength of the Group companies. We
are already experiencing faster decision-making, more global
focus, along with commercial and productivity benefits
bringing improvement to the top and bottom line. The ability
to leverage the collective knowledge and experience of the
global team is a large opportunity which will bring positive
benefit to the Group for years to come. While there weremany other achievements during Ortus Stage 2, these wereof particular noteworthiness.
Shifting to the financial metrics of Ortus Stage 2, ourfinancial performance was especially challenged since ourrevenue and core operating profit fell short of our targets
due to matters related to COVID-19 pandemic. However, ourcash flows remained strong and enabled us to reduce ourinterest-bearing debt level more than planned. Our adjusted
net D/E ratio decreased to 1.15 times, which is below therevised target of 1.27 established after the acquisition of thetwo major acquisitions in Europe and the United States. In
addition, we increased the dividend by 7% on an annualizedbasis, as approved at the General Meeting of Shareholders
held on June 18, 2021.

the United States. As a result of these two acquisitions, morethan 50% of revenue and core operating profit is now
derived from overseas businesses.
Ortus Stage 2 also included challenging objectives toincrease the density and scale of supply. The Company
successfully increased its supply and customer density by
constructing over 10 on-site plants in the United States andAsia and Oceania during this time period. These plant startups have enabled a step change across the business.
Another goal of Ortus Stage 2 was to improve our supply
capabilities and position in the electronics market. This was
accomplished through significant capital investments andexpansions for specialty gas production lines. We also
focused and improved our supply chain network. Our reliability greatly increased with investments in quality labs,
logistics warehouses, and storage. In summary, we expanded
our total gas management capabilities, which enabled us toprovide greater assistance with our customers’ internal production process requirements.
Moreover, in October 2020 the Company completed amajor structural reform by converting to a holding company
structure. My perspective, as CFO newly assigned to Japan, isthat NSHD has embarked upon its globalization journey. The
Company shifted from being a traditional Japanese company
with subsidiaries in 30 countries and decision-making conducted by the Japanese domestic management team tobeing a strong global company headquartered in Japan.
During this shift, the team delegated authorization levels
embracing the philosophies and policies within the Group
companies and to improve the decision-making speed. In
addition, the holding company ensures the appropriate allocation of management and capital resources across the

Key Financial Ratios—Net D/E Ratio and ROCE
As indicated previously, my priority is on the financial healthand sustainability of the Company. Focus is upon cash flows,
debt reduction, disciplined capital investment, earnings growth,
improved productivity, and sustainability. Success in these efforts

Review of Medium-term management plan Ortus Stage 2
FYE2017full-term

FYE2018
full-term

FYE2019
full-term

FYE2020full-term

FYE2021full-term

FYE2021(planned)(the 1st FY)(the 2nd FY)(the 3rd FY)(the final FY)(Announced in Feb. 2019)

581.5

646.2

740.3

850.2

818.2

910.0

Core operating profit*1 (Billions of yen)

54.7

60.0

65.8

90.3

87.2

100.0

9.4

Capital Allocation
Industrial gas companies require significant capital investment. Therefore, capital allocation is one of the most critical
functions of the Nippon Sanso Holdings executive team.
Capital is allocated based on opportunities and expectedindividual project returns. We have several sustainabilityrelated projects underway and we constantly monitor thelevel of benefit that these projects return using milestones
and financial metrics.
The combination of the Company’s essential products andits resilient markets make for strong and resilient cash flows;
however, it is crucial that we prioritize capital allocation.
Therefore, we will constantly prioritize and balance sustaining safe and reliable operational capital, large-growth project
capital, M&A opportunities along with appropriate debt andcash management.

Enhancing Segment Performance and Function
Our business and profitability profiles across the four industrial gas segments and Thermos business are different due
differences such as labor laws, long-standing contractual
relationships, customs, or competitive environments. In all
five of our reportable segments there are opportunities toimprove each business. The more deeply we investigate, themore knowledge is gained to drive performance-based
objectives. For example, we are able to gain new business by
sharing engineering applications across our global networks,
we introduce productivity programs and projects to countries
where they did not exist, and we continue to identify excellent business opportunities for improvement. As an example,
good results were attained by our Spanish wastewater treatment expertise in Japan. This shows NSHD’s strength in being
able to share best practices and apply them to projects andapplications globally. We are also working to improve backoffice integration efforts to achieve greater global efficiency.
Areas in which I expect advancement include procurement
initiatives, lean manufacturing, sustainability, cost controls,

In Conclusion
In FYE2021, the COVID-19 pandemic caused an unprecedented situation for our employees, customers, suppliers,
and their families and communities. However, our collective
team has become stronger, risen above the difficulties,
embraced our more resilient business model, and ensured astable and reliable supply chain of our products to all of ourcustomers. Some of the areas where I see future opportunities include carbon neutral and sustainable initiatives forboth the Company and our customers; continued strengthening of our Asia and Oceania presence and the electronics
market; increased productivity and procurement opportunities; innovative applications; IT and digital transformationand enhancement opportunities; and expanded applicationof best practices. As we continue to grow and improve our
performance in these areas, I am confident that theCompany will be stronger, more successful, more valuable tosociety, contribute to a sustainable society while simultaneously growing into a more profitable company.

Net interest-bearing liabilities

Revenue (Billions of yen)Core operating profit margin (%)

capital discipline, operational excellence, and increased functional department guidance. There is no simple approach to
improve Company profitability; however, we are conscious of
the need to allocate highly capable team specialists to leadinnovation in critical areas. Through their contributions, I
believe that profitability will be systematically improved.

will decrease our D/E ratio and will increase our ROCE. Our
debt ratios were negatively impacted as a result of the ¥680
billion financing for the two large overseas acquisitions.
However, plans are in place to utilize our strong cash flows to
reduce our debt level and our net D/E ratio to pre-acquisitionlevels of approximately 0.8 times. As a capital-intensive business, we will increase capital accountability, implement
productivity programs to reduce costs in line with economic
requirements, shorten lead times, and utilize global focus toenhance ROCE.

9.3

8.9

10.6

10.7

11.0

Overseas revenue ratio (%)

40.8

43.3

47.9

55.5

56.1

55.0

ROCE*2 (%)

8.4

8.4

6.2

6.4

6.1

7.1

Adjusted net D/E ratio*3 (Times)

­—

­—

1.54

1.45

1.15

1.27

Annual dividends per share (Yen)

20

23

25

28

30

­—

*1 Core operating profit is calculated by subtracting losses (non-operating items) produced by non-recurring factors from operating profit. Non-recurring factors include structural reform charges, including costs associated withbusiness downsizing or withdrawal; special severance payments; losses due to disasters or major accidents; and other factors such as the disposal of idle assets.

Billions of yen

Times

1,000

2.0

1.54

800

1.45
1.15

600

695.7

648.3

400
200
0

304.3

274.9

250.0

250.0

2017

2018

2019

2020

Hybrid finance*
Net debt excluding hybrid finance
Adjusted net D/E ratio (Right scale)

608.1

250.0

000

1.6
1.2
0.8
0.4

0
2021
(Years ended
March 31)

*2 Return on capital employed (ROCE) = Core operating profit / (outstanding interest-bearing debt + equity attributable to owners of parent)*3 Adjusted net D/E ratio = (Net interest-bearing debt – equity-type debt) / (equity attributable to owners of the parent + equity-type debt). Equity-type debt is debt procured through hybrid financing that has been recognized as equity
credit by ratings agencies (50% of the procured amount); hybrid financing is a form of debt financing that has features resembling equity, including voluntary deferral of interest, extremely long-term redemption periods, and* For details regarding hybrid finance, please see note *3 on P.26.

subordination during liquidation or bankruptcy procedures. This kind of financing does not cause stock dilution, and a certain ratio of the funds procured in this way can be recognized as equity credit by rating agencies provided
that certain conditions are met.

NIPPON SANSO HOLDINGS CORPORATION

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NIPPON SANSO HOLDINGS CORPORATION

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WHO WE ARE

Changes and outcomes under theholding company structureThomas Scott Kallman

Alan David Draper

Eduardo Gil Elejoste

Member of the Board,
Chairman and CEO,Matheson Tri-Gas, Inc.

Executive Officer,
Group Finance andAccounting Office, and CFO

Member of the Board,
Chairman and President,
Nippon Gases Euro-Holding S.L.U.

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IntegraRoundtable Discussion (1)Nippon Sanso Holdings CFO Alan David Draper spoke with directors Thomas Scott Kallman
and Eduardo Gil Elejoste about the new Nippon Sanso holding company structure,
activities of the Board of Directors, decision-making within the Group, and keys for the future of
the Group, our employees, and our stakeholders. Playing pivotal roles in the globalization of
Nippon Sanso, Messrs. Kallman and Elejoste not only offer insights and valuable feedback to
the Board of Directors but also lead their own organizations forward in alignment
with the Vision of the Nippon Sanso Holdings Group.

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INTEGRATED REPORT 2021

DRAPER Nippon Sanso has transitioned toa holding company structure. What do you
see as the benefits of this change?
ELEJOSTE The bigger benefits are yet tocome, but I think the direction is clear.
NSHD is a global company that must
think globally. That includes the vision,
the philosophy, the tagline, the market
strategies, the technology strategies, theR&D strategies, the policies, and thestandards. All of this must be global, but
the company must act local as well. Of
course, we will gain enormous benefits
from sharing the best ideas and bestpractices across all regions. For example,
safety, operational efficiencies, applications technologies, R&D, engineering, andclearly economies of scale. There is no
doubt that this globalization—thinking
global and acting local—will be very
beneficial for the Company.
DRAPER Since becoming Board members
over the past 18 months or so, have you
noticed any issues you want to bringattention to?
KALLMAN I’m not so sure about issues
per se, but it has been very useful to ourbusinesses to be more aware and have abetter understanding of overall Group
performance. Of course, the pandemic had
a major impact on the Group’s financial
performance. Being aware of the difficulties
our Group was experiencing relative to
our financial results, we took it uponourselves at Matheson to focus on disciplined cost reductions and price management campaigns, along with a very highlevel of coordination for cross-selling tosupport overall Group performance.
Happily, we not only improved after adifficult first quarter but also delivered theoriginal pre-pandemic profit targets insupport of overall NSHD Group performance. Being aware of the Group situation motivated us to focus intently on
doing what we could.
ELEJOSTE I have not seen any issues since
becoming a Board member. However,when the pandemic started, having a very
difficult first quarter and year in front ofus, we put a new budget together quickly

under the guidance of NSHD. While we
did not exceed the original budget, we
exceeded our revised budget. All-in-all,the organization is performing extremely
well and is extremely disciplined. We
continue to focus on safety and on ourcustomers, and I was proud of the organization’s disciplined approach to the pandemic.
KALLMAN I also think Board participation
has helped us organize and establish a fairly
structured risk management process at
Matheson. We probably would not have
put the emphasis and structure on better
management and identification of risks
had it not been for my Board participation.
DRAPER A Board discussion I observed thatwas very insightful was our discussion about
people. We talked about what we can dodifferently in the organization and whereto improve. I witnessed strong interactions
and good comments, as well as ideas
about continuing with people-excellencedevelopment. How to make the organization stronger by reassigning leadership andby identifying high-potential individuals. It
was a passionate discussion, because weare passionate about our people.
KALLMAN I agree with you, Alan. It always
comes down to people. Making sure wehave the right people and treat themright. Train them and prepare them todrive the business forward. If we do that
well, the shareholders benefit.
DRAPER What are the pros and cons of
how Nippon Sanso Holdings delegatesauthority to each region?
KALLMAN Clearly, extending the delegation of authority to the regions is going
to provide flexibility and speed. I think aclear competitive advantage for Nippon
Sanso Holdings affiliates recently has been
our ability to assess and take strategic
decisions faster than our competitors,
with the strong support of Nippon Sanso
Holdings. We’ve delivered several key
strategic acquisitions and capital projects
because of that. A related advantage is
our ability to take strategic and tacticaldecisions to position regional businesses tocompete in the environments that they’re
operating in. The delegation of authority
to make decisions at the appropriate
levels is important to us. Mr. Ichihara has
been very insightful and strategic as far

NIPPON SANSO HOLDINGS CORPORATION

29

as the types of acquisitions that we pursued. And when a decision is brought
forward, we act quickly. And a key aspectof the acquisitions has been the processof very fast and seamless integration.
This minimizes the cost that many organizations incur when trying to integrate a
new organization into the larger business
and we see the benefits of that. The
models we implement to justify the acquisition are executed in a very disciplined
fashion, and it shows.
ELEJOSTE I cannot think of cons, if you
have the right teams in the regions. If you
have the right teams in the regions andthe right leadership, there are only prosin giving autonomy of action (again, thinkglobally, act locally). The idea is to provide
the regions with general guidelines (thegrand scheme) and then let them operate and execute the details taking into
account the changing environments thatthey can and will encounter. Talented
teams, with the right leadership, the rightexperience, and training can achieve
greater results if they are given freedomof action. Nippon Gases Europe has been
the product of several acquisitions. I thinkthat NSHD, TNSC Group at that time, saw
a good opportunity to enter Europe byacquiring a complete company, meaning
assets and employee organization. We
were encouraged and motivated by NSHD
in recognizing our past success andenabling us to continue to operate ourbusiness as it had been in the past. In thatsense, the NSHD Group made it very easy
for the European leadership and European
team to start working in the new group.
And now it has been two-and-a-half yearsof successful cooperation.
KALLMAN Also, the acquisitions brought
forward by Mr. Ichihara made sense relative to how they could be integrated
readily into the organization. In many
instances, acquisitions improved overall
intensity in a given marketplace, which isof course strategic. In other instances, it
was a great product line extension, once
again, strategic. All the acquisitions fit
together. You don’t see acquisitions that
don’t make sense relative to an overall
industrial gas portfolio.

INTEGRATED REPORT 2021

re as a Global
tu
u
F
r
u
O
d
n
Our Vision aas Company
G
l
a
ri
st
u
d
In
Integrated
WHO WE ARE

I interpret this message as
being a gas professional inwhatever capacity we serve
within the Company.

We are the professionals
who deliver quality products
and services in a safe anduninterrupted way througha high-performing andqualified organization.

Very simply, being aprofessional is doing what
you said you weregoing to do.

What “The Gas Professionals”
means to you?

Effective approach tostrengthening synergy withother geographic hubs
DRAPER What are your thoughts on theimportance of culture and how have you
ingrained culture in your organization?
ELEJOSTE I believe that Nippon Gases
Europe is a diverse and inclusive openminded organization with open andcandid communication. That anybody
in our company can say what he or she
thinks. If you communicate well andextensively, people will understand why
you demand so much from them. Make
the effort, so people have a stronger
sense of belonging. Then, people will
enjoy working more and going the extra
mile, because they understand you arealso going the extra mile with them. That,along with our safety and complianceculture, is the culture we have. Obviously,
we have our priorities: safety, compliance,
the environment, people-excellence,customer focus, financial results, in thatorder. But only with excellent people canyou have safety, compliance, environmental consciousness, customer focus, andfinancial results.
DRAPER What do you think are thestrengths of your organizations, as wellas the strengths of NSHD?
KALLMAN As far as NSHD is concerned,
it’s the significant engineering capabilities
for design and production of ASUs.
They’ve been very supportive of ourrequirements in building our network.
We’ve installed 16 ASUs, most of themfrom the plant engineering center, andthe plants that they provide us are

well-designed, very easy to start up, andvery power-efficient. Too often, Japaneseorganizations are viewed as being very
deliberate and maybe a bit slower tomake decisions. But I can tell you thatover the years, my experience has beenthat Taiyo Nippon Sanso, and now Nippon
Sanso Holdings, has been very responsive
and very quick to take action when opportunities present themselves. And it’s been
one of the key reasons why Matheson has
been able to grow at the rate it has overthe past 15 years. I think Matheson’s
strength is the ability of our organization
to focus on key priorities and pivot asnecessary when priorities change. We
have a simple, very focused safety process. We also have a very focused quality
process, which drives our cost-reduction
program. A process- and procedureoriented organization—both in safety
and quality—sets the foundation to drive
profitable growth. You also need to haveprocess and procedures for sales, which
we do. We have probably the simplest,
but most effective, sales model in our
industry in the United States. And thefeedback we receive from individuals
who come to our company in sales fromother organizations—from our competitors—all say the same.
ELEJOSTE I think Nippon Gases Europe
has very experienced staff and management. We also have a widely varied offering that can match the offering of any ofour major competitors in Europe. We canmove fast and make things simple incomparison with many of our competitors. We also demonstrate good profitability because of price to value and

NIPPON SANSO HOLDINGS CORPORATION30

our productivity. As I mentioned before,
we have a very strong safety and compliance culture. Our organization is lean,agile, and very customer-oriented. We
receive comments from customers that
we are willing to do more than others.
We are also highly committed to­carbon-neutrality opportunities, which ishuge in Europe, and we have to makesure to take more than our fair shareof that opportunity in the future.
DRAPER Can you comment on yourinteractions with employees of otherGroup companies? What are your impressions? What have you learned?
KALLMAN I continue to be impressedwith the level of engagement andenthusiasm in all regions with which I
have contact. I see people striving
to improve the overall business and to
do the right things on a fundamental
level. A recent example, which Eduardo
mentioned, is addressing the challenge ofsustainability. I’ve been equally impressedwith the level of alignment of regional
priorities across the Group in terms of
ensuring a clear focus on safety, compliance, and quality. This is a reflection of
the emphasis placed on these imperatives
by the Nippon Sanso Holdings executive
management and the Board.
ELEJOSTE We have started working
together with the HyCO group of theUnited States and the working relationship is going very well. We are also incontinuous contact with the helium
group, because we are a big taker ofhelium and we are also in contact with
the United States, Japan, and Southeast
Asia because of the electronic gases. WithINTEGRATED REPORT 2021

Japan we are also working together inthe engineering area, in some applications technology opportunities, Additive
Manufacturing, Waste Water Treatment,
Combustion…and with Southeast we areworking in productivity programs.
Recently, NSHD has created the global
carbon neutrality group. So, the interaction with the “rest of the world” is continuous and the right way to go. We are
all learning from each other.

Future of the Nippon Sanso
Holdings Group
DRAPER What are the essential characteristics of a leader in your respective
organizations?
KALLMAN I think future leaders in ourorganization must be strong communicators and have the ability to connect acrossmultiple geographies and cultures. A
second trait is the ability to focus on whatreally matters and maintain that focus,
despite the many distractions competingfor her or his attention. A leader mustalso be able to focus on potential opportunities—actively search for new opportunities in technologies or other competitive
advantages. Lastly, a leader must be comfortable with change. Not only thechange that they experience but also indriving change and being willing to drive
their team to make changes, sometimes
beyond the comfort level of the team.
ELEJOSTE A leader that believes thatpeople excellence (a talented diverse andinclusive team, thoroughly trained, highly
motivated...) is the foundation of everything else, safety, compliance,

environmental consciousness, customer
focus, and financial results. As a consequence establishes a strong performanceand results culture to thoroughly upgrade
the quality of the teams on a continuous
step by step process, a thorough differentiation process that distinguishes in every
team and organization the top performers, from the medium performers andthe low performers and takes different
actions towards the different groups. A
leader that has the right balance of strategic thinker and tactical executioner, being
able to think ahead or way ahead and,at the same time, delivers monthly andquarterly results. The most recent example
being the approach taken during the
pandemic when we continued to lookfor growth opportunities and acquisitions
and continued to invest instead of justgoing in the direction of short-term costsavings through layoffs and reductions.
This was very motivating for the organization, that we kept the right balance, evenin the midst of the pandemic storm.
DRAPER Speaking of leaders, I have worked
with President Hamada for about eightmonths now here in Japan. He has extensive experience with industrial gases, deep
insights in the electronics industry, and athirst to implement digital transformationin the Company. He talks about digitaltransformation and about embracing
electronics to become more efficient andmore effective. How we can utilize big data
to make the right decisions and become
more productive. His background andinternational experience brings anotherglobal perspective to the team and I am
confident that he will continue the global-

NIPPON SANSO HOLDINGS CORPORATION

31

ization efforts of our organizationand make it even stronger and better
than it is today. We call ourselves,“The Gas Professionals.” What does thismean to you?
ELEJOSTE That is a great tagline, and I
take it very literally. We are the gas professionals, and that is how customers,
suppliers, and partners must view us. We
are the professionals who deliver quality
products and services in a safe and uninterrupted way through a high-performingand qualified organization. That is what
the term means to me.
KALLMAN Very simply, being a professional is doing what you said you weregoing to do. Deliver on the commitments
you make to internal and external customers. We want our external customers
to view us as their primary source ofgases, equipment, and related applications and expertise. And if we are able todo this, I think it will ultimately result in
an increase in shareholder value.
DRAPER Thank you. Not being on thecommercial side of the business, I interpret
this message as being a gas professional
in whatever capacity we serve within the
Company. A gas professional in finance, agas professional in HR, a gas professionalin IT, or whatever your position, being a gas
professional means doing your ultimate
best for the Company.
KALLMAN I think that’s exactly right. Thisis the essence of how we are going to
win as a team. Everyone doing their very
best in their assigned role.

INTEGRATED REPORT 2021

SECTION

2

OUR
VALUE
CREATION
The Nippon Sanso Holdings Group’s Value Creation
The Nippon Sanso Holdings Group aims to create social value through innovative
gas solutions that increase industrial productivity, enhance human well-being, andcontribute to a more sustainable future. We are committed to achieving this vision
through business expansion centered on industrial gases and through co-creation
with all our stakeholders, including employees, customers, and suppliers.

NIPPON SANSO HOLDINGS CORPORATION32

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33

INTEGRATED REPORT 2021

OUR VALUE CREATIONThe Nippon Sanso Holdings Group’s Value Creation Story

A Beneficial Cycle of
Sustainable Growth
Solutions for New Social Issues

The Nippon Sanso Holdings Group has helped to address social issues through innovative gas solutions
based on the concept of “The Gas Professionals.” We will continue striving for sustainable growth byfurther strengthening our advanced gas technologies and the customer contact points that we haveacquired through our Thermos brand B2C business. We aim to deliver both social value and economic
value, aiming to enhance human well-being, and contribute to a more sustainable future.

Social Issues
ClimatechangeResource
shortages

Value Provided
Socialinfrastructure
updates

Food
waste

Sicknessrisk

HealthissuesEnsuring
occupational
health andsafetyHRcapability
development
and training

Depopulationof regional
communities

Group Vision ( P.14)
Human rights
infringements

We aim to create social value through innovative gas solutions that increase industrial productivity,
enhance human well-being, and contribute to a more sustainable future.

PeopleSociety

Earth

Respect everyone and contributeto people’s growth, health, andjob fulfillment

Fulfill our function as part of social infrastructure and contribute to the development of a wide range of industries

Contribute to the preservationof a sustainableglobal environment

Business Activities

ESG Materiality (P.58)

Proactive. Innovative. Collaborative. Making life better through gas technology.

Industrial gases
business

in
e

ss
ics
bus
ine

The GasProfessionals

us

Quality, safety, andenvironmental management

b
os
Therm

Vacuum-insulation technology

Risk Management ( P.120)
Human Resources Who Embody Health,Integrity, and Resourcefulness ( P.72)
Consolidated number of employees 19,357(Overseas 12,758 Japan 6,599)

Environmental Management (P.68)

Reducing environmental impact in business activities
Energy consumption in business activities 104,142 TJ
Contribution to GHG emission reduction
2,892 kilotonnes CO2e

Industrial Gases BusinessDomain ( P.38)

Electronics BusinessDomain ( P.42)

Thermos BusinessDomain ( P.46)

Oxygen, nitrogen, argon, etc.
Equipment, facilities,
solutions provision

Electronic materials gases, etc.
Equipment, facilities,
solutions provision

Vacuum-insulated bottles,
tumblers, fry pans, etc.
Household goods products

Gas handling technologies

Gas application technologies

ec
El

ss

Products, Services, and Solutions

Plant and engineering
technologies

tron

Supply modes(on-site, bulk, packaged)

Corporate Governance ( P.112)
Stable, Safe Production Capability

Strong Financial Foundation (Stable financial foundation and fund procurement
Free cash flow ¥89.5 billion

Uncompromising Technological
Capabilities ( P.50)

Strong Supply Chain

Technological capabilities developed since
the Company’s foundation and open innovation
Research and development costs ¥3.3 billion

Negative outputs from business activities

P.25)

Production facilities to support
next-generation technology
Capital investment ¥74.6 billion

type B1-J

GHG emissions 5,651 thousand tonnes CO2

type B1-J

Collaboration and networking with sales agencies
Number of countries and regions
where products are sold 30
type B1-J

NIPPON SANSO HOLDINGS CORPORATION

34

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35

INTEGRATED REPORT 2021

type B1-J

OUR VALUE CREATIONBusiness Section: Development of Three Business Domains
Surprising Uses ofIndustrial Gases

Our industrial gases business supplies industrial gases such as oxygen, nitrogen, and argon to a wide range
of industrial fields that support the modern world. Our electronics business provides various electronicmaterials gases used in the manufacturing processes for semiconductors, liquid-crystal displays (LCDs) andso forth as well as facilities and equipment needed for their supply. In the Thermos business, we propose
and sell diverse household goods to general consumers to create new lifestyles required by a sustainable
society. The Nippon Sanso Holdings Group’s business domains comprise these three elements.
Business domain

Main products and services

Main users

Industrial gases
business

Air separation gases, carbon gas, helium, hydrogen, LP gas,
welding and cutting equipment, gas supply equipment,
medical gases and related equipment, etc.

Steelmaking, chemicals, automotive,
shipbuilding, machinery, medicine, food, etc.

Electronics businessAir separation gases, electronic materials gases, installationof refining and supply equipment, etc.

Electronics (semiconductors, LCDs, etc.)

Thermos businessHousehold goods

General consumers

While industrial gases are primarily supplied to plants in various industrial
fields, they are also used in areas that are close to our daily lives. For example,
in the United States, we supply nitrogen to wineries. When wine is bottled,
nitrogen is sealed into the bottle to reduce the oxygen concentration to 0%,
preventing oxidation and keeping the wine fresh. At the same time, oxygen isused in fish farming (both marine and on land). Oxygen is added to enrich thewater used to farm salmon in Europe, shrimp in Asia, and eels, trout, andsalmon in Japan, helping to promote physical growth.

IR-kunOther Industrial Gases

How Air Separation Gases Are Manufactured 
Cryogenic separation is a typical method for manufacturing
air separation gases. Air is taken into an ASU from the atmosphere, then compressed. Water and impurities such as CO2
are removed, and the air is cooled to boiling point to liquefy
it. Boiling point is the temperature at which a liquid boils andbecomes a gas. Conversely, if a gas is cooled down to boilingpoint, it becomes a liquid. Different elements have different
boiling points, and this characteristic is used to separate
oxygen, nitrogen, and argon out of the air and refine them.

Air

Gas Filling Plant

Carbondioxide gas(CO 2)

Hydrogen(H 2)

Helium
(He)

Xenon
(Xe)

LP gasElectronicmaterials
gases

Acetylene(C 2H 2)

Krypton(Kr)

Air Separation Process inside the Unit
Ordinary temperature

Argon (Ar)Low temperature
Compresses atmosphere toabout 1/6 of its volume

0.9%(compression differs depending on the specification)

Rectifying
columnAir

Products

Air

Heat
exchanger

Oxygen (O2)

20.9%

Nitrogen (N2)
Oxygen (O2)
Argon (Ar)

Nitrogen (N2)

78.0%

1

FilterRemoves particulates
that are in the air

NIPPON SANSO HOLDINGS CORPORATION36

INTEGRATED REPORT 2021

2

Compressor

Takes in atmosphereand compresses

3

Water-cooling tower

4

Cool water is sprayedfrom the top of the tower
to wash and cool the air.

Removes waterand CO 2

Adsorber

5

Separator

Exchanges heat between the air and low-temperature
product gases, cooling the air and using thedifferences in boiling points to separate the gases

NIPPON SANSO HOLDINGS CORPORATION37

INTEGRATED REPORT 2021

The boiling points of the gases
are as follows:
Oxygen –183˚C
Nitrogen –196˚C
Argon–186˚COUR VALUE CREATION

Industrial Gases Business Process Centered on Air Separation Gases 

Industrial Gases BusinessAir separation gases are our main industrial gases product, manufactured by separating and refining gases, mainly
from air as a raw material. The industrial gases business provides these air separation gases to a wide range ofindustries, including steelmaking, chemicals, and automotive, as well as supplying medical gases such as oxygen.
Since the needs for industrial gases differ in every region of the world, this business is established on the site of
consumption, cultivated and expanded by operating companies in each region in accordance the characteristics ofthe region and customer. There are three supply modes: on-site, bulk, and packaged, which are specified to suit theneeds of the customer. Looking ahead, the holding company, Nippon Sanso Holdings, will act as a driver for the
sharing and development of the outstanding technologies and expertise of each region, aiming to achieve further
growth in the industrial gases business.

Among the technologies and know-how underpinning ourindustrial gases business, strengths of the Group are in its
engineering function for everything from the design throughto the maintenance of the ASUs that produce air separation
gases; its production function for reliable and efficient productionof industrial gases at gas production facilities; and its supply
function for safe and reliable supplies of gases to customers.
In addition to these strengths, various initiatives for supporting
safety and security are also crucial to building relationships oftrust with customers that support the Group's growth. These
include our quality management, which ensures our ability tomaintain the quality expected by customers, and safety education, which ensures the safety of the environments in which
our gases are used.

Here, we introduce the flow from technological development
to production, supply, and sales in the industrial gases business, the core business domain of Nippon Sanso Holdings.
The Group also provides oxygen and other products for medical use. The Company started operations with the on-siteplant method in 1964, the first in Japan. The business is able
to provide air separation gases stably and in large volumes.
We have also deployed our advanced technological capabilities
cultivated in Japan to the global market, and we are expanding operations using the on-site plant method, primarily in
the Gas Businesses in the United States and Europe. In thepast few years, we have been expanding our production sites
in Asia and Oceania, including the start of operations at an
ASU in Rayong Province in eastern Thailand and a second
nitrogen gas plant in the Philippines.

Cash

Investments in growthTechnological development

Production

SupplySales

Develop products that cancontribute to the solution ofcustomers’ issues through gas
technologies cultivatedover many years

Produce high-quality industrial gases needed by customers withhigh-efficiency (energy-saving) manufacturing equipment

Supply high-quality industrial gases required by customers in an
appropriate specification to meet their unique needs

We create new value by extending
proposals for gas types, flow
rates, pressures, supply formats,and backup systems that respondto their unique needs.

Gas production technologies
accumulated over many years

Technology risk management(Safety, quality, environment, andoccupational health and safety)

Air separation gases

Plant and engineering
technologies

Sales activities

Oxygen (O2)

エアセパレートガス

Air

Nitrogen (N2)

ASUs
Argon (Ar)Gas handling technologies
Other industrial gases

Gas application technologies

On-site supply
We install gas production facilities on sites
adjacent to the customer’s site and connect
them via a pipeline to supply gases directly
on a continuous basis.

Carbon dioxide gas(CO2)

Hydrogen(H2)

Helium(He)

LP gasElectronicmaterials gases

Acetylene(C2H2)Xenon(Xe)

Krypton(Kr)

Bulk supply
Gases manufactured at our production facility
are liquefied and transported by tanker truck
to fill liquid gas storage tanks installed on
customers’ sites.

Quality assurance

Gas engineering

Packaged supply
We package just the amount of gas requiredby customers into cylinders at a filling stationand then deliver them in individual cylinders to
the customer.

Safety training

Development and sale of new products (reflect customer feedback and create new value)
NIPPON SANSO HOLDINGS CORPORATION38

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39

INTEGRATED REPORT 2021

OUR VALUE CREATION

Industrial Gases BusinessIndustrial Gases Used in a Wide Range of Fields Strategies Going Forward 

Since its foundation in 1910, the Company has evolved its gas technologies so that they now cover industrial fields
comprehensively, including fields such as materials, chemicals, fabrication, life sciences, food, agriculture, electronics,
and energy. As a business that plays a vital role in the modern world, we provide powerful support for our customers’
corporate activities, contributing widely to the progress of technology and the development of industry.

(1) Results of Medium-Term Management Plan
Ortus Stage 2
During the first quarter of FYE2021, the spread of COVID-19
infections caused a steep drop in production activity among
many of the Group’s customers in the manufacturing industry,
with a resulting decrease in demand for industrial gases
having a corresponding impact on sales. In the United States
especially, we implemented measures such as cost management, cost reduction, and productivity improvements to partially offset the decrease in sales volume due to the sharp
decrease in demand. These initiatives succeeded, and we
observed a strong recovery in the subsequent quarters, withprofits recovering to pre-pandemic levels in the third quarter.
Under medium-term management plan Ortus Stage 2, afour-year plan through to FYE2021, we have achieved results
to a certain degree. In our efforts toward globalization, we
significantly expanded the European business acquired in2018 and the U.S. HyCO business* acquired in 2019. Today,
our global HyCO business projects are run by the HyCO teamof our U.S. operating company Matheson Tri-Gas, Inc. (MTG).
The MTG HyCO team is now coordinating with the operatingcompanies in Europe to strengthen the HyCO business there.
This initiative is part of our efforts to share the expertise of
our leading sites in each region by transitioning to a holding
company structure in October 2020, aiming to create synergies and strengthen the overall capabilities of the Group. In
addition, we started operations at five on-site projects that
we newly acquired in the United States. Meanwhile, in the
Asia and Oceania region, we are phasing in operations at
supply depots and other such capital investment projects.

Materials

Chemicals

Fabrication

Life Sciences

Steelmaking, non-ferrous refining, glass,ceramics, cement, paper, and other materials

Petrochemical and chemical industries, rubber,plastics, and other organic materials

Automobiles, construction machinery,bridge building, construction, and shipbuilding

Medical, pharmaceutical, and biotechnology

We supply technologies involved in newmaterials and innovative manufacturing
processes to the materials industry, which
is a foundation industry.

We supply products and technologies
that contribute to better productivity
and safety, such as raw materials gases,
combustion and deterioration prevention,and reaction optimization throughatmosphere control.

We supply technologies related to theassembly and processing of automobiles
and construction machinery, as well as
the manufacturing and processing of
metals, ceramics, and functional materials,
based on shield gas and atmospheric gas
optimization technologies and gas
control technologies.

Food

Agriculture

Electronics-Related Products

EnergyFood manufacturing and processing

Agriculture, fisheries, and forestry

Semiconductors, LCDs, and solar cells

We supply solutions for food and foodproduct markets, such as nitrogen-filled
sealing and freezing. We are also developing the Bistranza® series of gas
applications for food.

In the primary industries field, we supply
pest control equipment that uses carbon
gas, as well as highly concentrated
oxygen to meet growing needs in theaquaculture industry.

In addition to supplying high-quality
nitrogen gas and electronic materials
gases for the electronics industry, we also
provide a full-line of solutions including
pipe installation and facility inspection
services to maintain the quality ofsupplied gases.

Rechargeable batteries, reusable energy,
solar cells, and new types of energy

We supply medical oxygen and Water-18O
used in PET diagnostics for customers in
the field of biotechnology, such asadvanced medical research, based ontechnologies for using liquid nitrogen
at –196°C.

We supply solutions that can be applied
to the conventional fossil fuel energy
field; the solar cell and electricity storage
field, which is an essential component ofsmart grids; and the renewable energy
field, including fermentation andbioresources.

(2) Promotion of Operational Excellence to Succeed in
Global Competition
The scale of the Gas Business in Asia and Oceania is still small
compared with Japan, the United States, and Europe; but
as an emerging market, it is expected to grow significantly
over the medium to long term. We therefore recognize thisas a region in which ongoing investments are essential.
Moreover, the scale of the industrial gases market in the
United States is the largest in the world, and we consider it animportant growth area going forward. For example, we arelooking at acquiring local distributors to increase the capacity utilization of our existing ASUs and run them efficiently. It is
important that we recognize the Group’s business opportunities and use them to achieve business expansion and growth.
The most important point for achieving further growth
going forward is to strengthen and leverage the comprehensive capabilities of the Group. At the meetings of the Global
Strategy Review Committee ( P.115), which is organizedacross each operating company, we share details of each
operating companies’ short-term strategies, action plans
for the next fiscal year, and major investment plans inorder to examine the best allocation of resources acrossthe Group. Going forward, we also believe that deploying
initiatives to increase productivity on a global scale andpromoting even higher levels of operational excellence willlead to further growth of the industrial gases business.
Furthermore, over the medium term, we are also examining Groupwide themes for establishing projects tostrengthen our comprehensive capabilities, including
strengthening global products and services (electronics,
helium, and engineering) and bolstering the Group’s R&D.

* The HyCO business provides on-site supply of hydrogen (H2) and carbon monoxide (CO) to
the petroleum refining and petrochemical industries.

Industrial Gases Supplied to Various Medical Front Lines 
The Nippon Sanso Holdings Group operates a medical businessas a subsegment of the industrial gases business. We supply
medical gases such as oxygen, nitrogen, and carbon dioxide(dry ice) to medical and medical related institutions. Liquid
helium at the ultra-low temperature of –268.9°C is used tocool the superconducting magnets in magnetic resonanceimaging (MRI) equipment. Furthermore, in addition to gases,
we also supply medical-related equipment. For example,
Japanese operating company Taiyo Nippon Sanso Corporationgroup company IMI Co., Ltd. handles high-performance ventilators used in intensive care, which contribute to the treatment of patients in Japan with respiratory illnesses, including
COVID-19. In addition to supplying medical gases and equipment to medical institutions, we also supply home oxygentherapy (HOT) equipment to patients who undergo ongoing

Cross-Regional Initiatives
Enhance Operational Excellence
We are making a sweeping effort to increase productivity across theGroup. By improving the results of business activities and increasing
efficiency , we can build competitive advantage, with a view tosustainable growth. Specifically, we will further promote cross-regional
productivity activities, sharing best practices for cost reduction
within the Group and using this to drive Groupwide operational
excellence, as we pursue a lean organization through cost reduction.

treatment at home. Furthermore, our liquid nitrogen cryopreservation containers for cell storage are used by advanced
research laboratories for induced pluripotent stem (iPS) cells
and so forth. The Group is contributing to various medical
front lines through the supply of gases and equipment.

Expand Business Opportunities
We aim to expand business opportunities by strengthening the
network between Nippon Sanso Holdings and its operating companies, while increasing profitability based on overall optimization
and accelerating business growth. In each business support division—
Total Electronics, Plant Engineering, Helium, Marketing, and Gas
Application Technologies—we will pursue synergy creation throughstronger collaboration between operating companies on a global scale.

An on-site plant in the United States

Liquid nitrogen cryopreservation system

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OUR VALUE CREATION

Operation of Total Gas Centers Electronics BusinessWe supply various electronic materials gases used in the manufacturing processes for semiconductors,
LCDs, and solar cells in the electronics industry, as well as bulk gases such as nitrogen used for safety
purposes. We also provide equipment related to gas supply. In addition, we offer services such as theinstallation of pipes to maintain the quality of the supplied gases, as well as container exchanges andequipment inspection on customers’ sites. Electronic materials gases are manufactured at our plants inJapan, the United States, South Korea, China, Singapore, and countries in Europe, and delivered throughour global supply chain. With this structure, we can provide a reliable supply of high-quality gases tomeet the increasingly sophisticated requirements of our customers in the electronics industry, while also
meeting customers’ demands in terms of ensuring safety.

Semiconductor manufacturing requires the supply of a large
number of gases in various modes. On customers’ sites, oradjacent to them, the Group establishes Total Gas Centers
equipped with ultra-high-purity nitrogen manufacturing units,
supply equipment for electronic materials gases used in large
quantities, and warehouses for safely storing containers ofmultiple types of electronic materials gases. This enables theGroup to provide 24-hour services offering a reliable supplyof ultra-high-purity nitrogen and materials gases.
The Group operates Total Gas Centers at 17 locations inJapan, offering on-site gas supply, and, depending on thecustomers’ consumption, transport of electronic materials gases
to the site. Furthermore, if needed, the Group also provides
exchange of electronic materials gas containers in the supply
facility on the customer’s site, as well as daily inspections ofProviding Total Solutions A key characteristic of the Group’s electronics business isthe ability to supply various electronic materials gases for the
manufacture of semiconductors and electronic components,
as well as supplying bulk gas of optimal quality through ASU
gas and purifiers that can be designed and manufactured
in-house. In addition, we provide a full line of services related
to gases essential to the manufacturing process for the semiconductor, LCD, and electronic components industry. These
include equipment for safely supplying electronic materials
gases (cylinder cabinets), exhaust gas treatment equipmentthat neutralizes toxins in exhaust gas before its release, andsafety monitoring systems. The structure for providing thesecomprehensive services is also unusual compared to competitor companies in that the Company can provide all services
itself within Japan. Accordingly, we operate a large number
of “Total Gas Centers” for comprehensively supplying­gas-related services to customers’ manufacturing sites.

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External view of a Total Gas Center

Electronicmaterials
gases

Bulk gases

Some electronic materials gases may be highly toxic, flammable, or corrosive, which presents various hazards. To supply
these hazardous gases at the high level of quality required bycustomers so that they can use them safely requires not only
product manufacturing and quality control technologies but
also technologies that can eliminate hazards. In addition tosafety uses, quality requirements are increasing, particularly
in semiconductor manufacturing with regard to nitrogen gas,
which is used in a wide range of processes, and oxygen gas,
which is used in oxidization processes.
The Group has refined its technologies for manufacturing
and increasing the quality of various electronic materials
gases, mainly in the United States and Japan. In addition,
during the era of rapid growth in Japan’s semiconductor
industry, the Group honed technologies for the safe supplyof high-quality materials to support customers’ manufacturing high-quality products. These included electronic materials
gas analysis and refining technologies, as well as technologies
for safely supplying gases while maintaining their qualityand detoxifying exhaust gas, and purifying technologies forremoving impurities from bulk gas, giving consideration
to the characteristics of the gases.

supply equipment and exhaust gas processing units that thecustomer has purchased, and safety management services
using safety monitoring systems. These support services
enable customers to focus on their own operations.

(ultra-high-purity nitrogen,oxygen, argon, hydrogen,and helium)

Pipe
installation

Remotemonitoring
systemSafetywarningsystems

Gas refining
equipment

Electronics
Business

Analysisequipment

Cylindercabinets

MOCVD
equipment
Exhaust gas
processing
equipment

Other
services

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OUR VALUE CREATIONElectronics BusinessBusiness Expansion in East Asia (China, South Korea, and Taiwan) East Asia has seen intensive investment in semiconductor
plants over the past few years, and demand for electronicmaterials gases has increased, particularly for memory devices.
Electronic materials gases have high added value, and manyof them are procured globally. In East Asia, the Group’s operations are centered mainly on import and sales of electronicmaterials gases, including purchased products procured from
Taiyo Nippon Sanso Corporation and Matheson Tri-Gas, Inc.
(MTG). Furthermore, we have strengthened our inventory
storage capacity (warehousing) and logistics functions in eacharea to keep pace with demand trends among growing customers, contributing to their stable operations. In addition to
the import and sale of electronic materials gases, in Taiwan wecan provide comprehensive services for electronics customers,
with functions for manufacturing various kinds of equipment
and installing pipes. In South Korea, we have operated anelectronic materials gases manufacturing business since 2002,
supplying customers not only in South Korea but also othercountries in Asia and the United States. In China, our highly
trained employees provide inventory management and transport services in warehouses set up on sites adjacent tocustomers, and these have been highly acclaimed. Moreover,since 2019, we have launched a second electronic materials
gases manufacturing operation in East Asia to follow ouroperation in South Korea.

Strategies Going Forward (1) Organizational Structure for Strengthening the Group’s Comprehensive Capabilities
In October 2020, when the Company transitioned to aholding company structure, the Total Electronics Strategy
Department was established within the Company’s Group
Corporate Planning Office. The department supports customers
who are expanding globally by providing services with eachgeographic hub coordinated into a single group, while building

optimal supply chains to meet demand in each region.
In 2018, we continued to promote supply chain optimization
under the Total Electronics concept in Europe, which had been
newly added to the Group. These efforts included sales coordination and promoting procurement of electronic materials
gases from Group companies in Asia and the United States.

History of Changes in Organizational Functions
January 2017 to June 2019
Established Total Electronics in Shanghai
as a virtual organization to promote
Group coordination

Expanded electronic materials gases warehouse in South Korea

Characteristics of Each Country
China

The Group provides highly valued site services on sites adjacent to customers, such as dedicated warehouse operations and transport services, as well as on-site services such as inventory management, container exchange, and chemical management. In 2019,
we also started electronic materials gases manufacturing operations at Yangzhou Taiyo Nippon Sanso Semiconductor Gases Co., Ltd.

South
Korea

In 2002, the Group started an electronic materials gases manufacturing operation. Today, this operation has the most advanced
analysis equipment in the Group and provides products to Asian countries and the United States through our Group companies.

TaiwanThe Group is developing comprehensive services in Taiwan. It builds equipment such as refining units and supply equipment forelectronics, supporting the Group’s equipment business, and also has functions for providing high-level pipe installation.

Establishment of a Plant in East Asia, Where the Group’s Comprehensive Capabilities Are Concentrated
Yangzhou Taiyo Nippon Sanso Semiconductor Gases is thenewest electronic materials gases manufacturing plant to
be built in East Asia.
The plant currently manufactures two types of gas.
Manufacturing and quality control technologies havebeen introduced from Japan, the United States, and South
Korea to create a plant where the Group’s comprehensive
capabilities are focused. As demand for electronic materials gases in China is expected to increase, the Group willbolster the plant’s capabilities and expand the lineup of
products handled.
Electronic materials gases production plant in Yangzhou, China

Up to September 2020
Total Electronics Strategy,
Global Operations Division,
Taiyo Nippon Sanso Corporation

From October 2020
(After transition to a holding company)

Total Electronics Strategy,Group Corporate Planning Office,Nippon Sanso Holdings Corporation(2) Initiatives to Strengthen the Group’s Comprehensive Capabilities
gases equipment to convert their plants into smart factories. We
are also able to supply state-of-the-art solutions to customers’
technical issues and contribute to stable supplies globally,
including supply technologies such as the NANOCHEM® purifier
produced by MTG, and the use of DX to comprehensively
manage and supply high-quality material gases manufacturing
technology. We will promote further collaboration within theGroup and make effective use of the respective strengths of
our regional operating companies as we strive to expand theGroup’s electronics business.

Up until now, electronics-related investment has been
concentrated in East Asia (China, South Korea, and Taiwan),but a move to revive production in Europe and the UnitedStates is underway, driven mainly by a semiconductor shortage
and the deterioration in U.S.–China relations. Accordingly,
capital investment and production activities by customers are
expected to drive growth in demand for electronic materials
gases in Europe and the United States. The Group will monitor
customer demand trends and needs not only in Asia but alsoin Europe and the United States, and proceed to expand therange of products it handles and increase its capacity asnecessary, mainly at its existing manufacturing sites.
On the other hand, the Group believes that it must work as
one to meet market demands as requirements for even higher
levels of quality follow increases in process refinement andcomplexity, mainly for customers who employ cutting-edge
processes. The Group is already engaged in a Groupwide
project aimed at reducing quality issues. Now, “increasing
customer satisfaction” has been added as a project goal.
Customers’ quality requirements are shared within the Groupand we work to strengthen our ability to respond to customers’changing requirements as they increase in complexity.
Moreover, customers’ capital investments also present
opportunities for on-site supply businesses, mainly for nitrogengas, and equipment sales, mainly of refining units. The Groupwill therefore look at ways to utilize its strengths to achieve
further business growth. For example, with the next-generation
gas supply system of Taiyo Nippon Sanso Corporation, Intelligent
Gas Supplying System (IGSS), we can propose automation anddigitalization of management of customers’ electronic materials

Next-generation gas supply system IGSS
For information regarding its contribution from a DX perspective, please see P.54.

NANOCHEM® is also able to purify reactive gases.

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OUR VALUE CREATIONThe Shuttle Chef® series realizes our corporate
philosophy by saving time and energy.

Bottles made in collaboration
with the Institute for
Raptor Biomedicine Japan

Thermos BusinessBusiness Is About

Thermos Styling Storeat MARK IS Minatomirai

In 1978, Nippon Sanso Holdings’ predecessor developed
the world’s first stainless steel vacuum-insulated bottle
using vacuum-insulation technology cultivated in theindustrial gases business and then began manufacturing
and sales operations. In 1989, Nippon Sanso acquired
the Thermos business (manufacture and sales ofThermos brand glass vacuum-insulated bottles and soforth) from U.S. company Household International Inc.,
thereby starting the history of the Thermos brand in the
Company. Then, in 2001, Nippon Sanso’s household
goods business was split off to establish Thermos K.K.
The Company continues to create new value to realize
comfortable lifestyles in over 120 countries around theworld through Thermos products that use Nippon Sanso’s
original vacuum-insulation technology. Thermos K.K.’s
brand concept is “Thermos Magic.” The concept
expresses our aspiration of creating inspired lifestyles
that offer better taste, immediate convenience, andheart-warming comfort by combining our vacuuminsulation technology flexibly with unique lifestyle­comfort ideas.

NIPPON SANSO HOLDINGS CORPORATION

Sustainability

Cookware by Thermos. We design anddevelop products to meet customers’
needs and enrich their lifestyles.

Corporate Philosophy

Nippon Sanso Holdings Group’s
Sole

B2C Business

Unlike the industrial gases business, the Thermos Business is
Nippon Sanso Holdings’ sole B2C business, creating a broad
range of contact points with general consumers. We operate
through almost every sales channel, including retail storesand e-commerce, to provide customers with opportunities toencounter our products in a range of settings. As there aremany places where people can experience Thermos products
physically for themselves, including our directly operated
Thermos Styling Store, we operate a mix of marketing thatcombines advertising and in-store promotions, among othermethods. We also plan and develop products with constantattention to ease-of-use for the user, based on market
research and other information. These efforts have resulted
in a high level of brand awareness.

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High Quality
Trusted by Customers

Thermos continues to introduce new kinds oflifestyles that are agreeable to people andsociety and also environmentally friendly.

Up until now, our product lineup has been centered primarily
on outdoor products, such as portable mugs, but recently wehave also been focusing on products for indoor use in cooking and at mealtimes, such as frying pans and tumblers. In
addition, our product development has been recognized for
its quality and reliability, drawing on the high safety standards cultivated in Nippon Sanso Holdings’ gases business.
We continue to maintain a strong brand image through ourdedication to improving customers’ daily lives and our highquality products. Moreover, we have earned recognition forstrong customer support and replacement parts services thatenable long service life of products after purchase, helping
to create a reputation for high quality associated with the
Thermos brand.

For many years, Thermos has been developing products
designed to realize comfortable lifestyles for customers.
These efforts have resulted in the creation of sustainableproducts such as personal bottles that can reduce plastic
waste and the Shuttle Chef® series of vacuum-insulated
thermal cooking pots, which continue to cook food withresidual heat to shorten cooking time and reduce energy
usage. As these examples show, our business itself contributes to sustainability. In addition, we have recently partneredwith the Institute for Raptor Biomedicine Japan, and whencustomers purchase a bottle affiliated with the institute, partof the sales revenue is used by the institute to protect endangered wildlife such as Steller’s sea eagles, white-tailed eagles,
and Blakiston’s fish owls.

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Thermos Business

FEATUREWhy Thermos Is Part of
the Nippon Sanso Holdings Group
Creation of the World’sFirst Stainless Steel
Vacuum-Insulated Bottle
The Company’s predecessor, Nippon
Sanso Ltd., was founded in 1910 asJapan’s first industrial gases manufacturer. In the 1960s, the Company
supported the development ofJapanese industry through measures
such as installing on-site plants directly
connected to customers’ factories.
Having reached this stage, in the
1970s the Company took up a newchallenge. Until then, the Company
had provided production goods inthe form of industrial gases; now, it
was to advance beyond this role todevelop products for general consumers, starting a new business forentering the consumer goods market.
What kind of products were possibleusing technological capabilities developed through industrial gases? In 1975,

ACT Stainless Pot, the world’s first stainless steel
vacuum-insulated bottle, launched in 1978

a team of three began to explore
such possibilities. In the process ofconducting market research, theyfound a need for a vacuum-insulatedbottle that would not lose heat andwould not break. The glass vacuuminsulated bottles of the time wereprone to break easily. To answer thisneed, the personnel in charge ofdevelopment came up with a vacuuminsulated bottle made from stainlesssteel. The Company used vacuuminsulation technology in the tanks ofthe tanker trucks used to transport its
industrial gases. These were in fact
giant vacuum-insulated bottles.
Vacuum-insulated bottles wereavailable in table-top and portabletypes. The former had a market penetration rate of close to 100% while
the latter stood at around 60%.
Furthermore, since leading major
manufacturers had focused on thetable-top type, the Company focused

The sales copy used in advertising at the time when
the product was launched was for an “unbreakablevacuum-insulated bottle” rather than a stainless steel one.

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Brand Evolution from NISSAN
to Shuttle to Thermos

The Shuttle Mini launched in 1982. The product was
launched at a lower price band than the initial products,
and this made it highly popular for use in outings andsports day events.

on developing the portable type. Oneof the challenges in manufacturing
was how to form a vacuum inside thedouble-walled structure and mass
produce the products. The innovationin manufacturing method that provided
the answer was a totally innovative
idea of building the bottles inside avacuum room. The products wereassembled in a vacuum environment,
then the metal braze at the bottom
was heated at the end to melt it. With
this method, in 1976 the Company
completed the world’s first prototype
of an unbreakable vacuum-insulatedbottle. At the time, the price of avacuum-insulated bottle was ¥2,000–¥3,000, but market research showedthat people would be willing to pay¥10,000 for an unbreakable type.
After much consideration, theCompany decided on a price of¥6,900. This was partly to express
the confidence of the developers in
the quality of their product.

In 1978, the unbreakable stainlesssteel vacuum-insulated bottle waslaunched on the general market,
where it was well received. Some of
the manufacturers at the time weresaid to have remarked that the new
product would disrupt the existing
market and usher in a new era. The
product was initially launched underthe brand name NISSAN. In 1984,
a vacuum-insulated bottle with the
product name Shuttle was launched,
and after that products bore thebrands Nippon Sanso, NISSAN, andShuttle together. Eventually, theproduct advertising began to place
the Shuttle brand at the front.
Meanwhile, the Thermos brandoriginates from THERMOS GmbH,
which was established in Germany in1904. Today, it has grown to become
the world’s largest brand of vacuuminsulated bottles, but in 1989 its manufacturing business was acquired by
the Company. In 1991, the Company’s
Vacuum-Insulated Bottle Department
was elevated to become the Thermos
Business Department. Ahead of this,Nissan Thermo K.K. was establishedin 1980, and in 2001 the Thermos
Business Department underwent a
corporate split off and merged withthis company to form the present

company, Thermos K.K. Today, theCompany’s presence in Japan has
increased due to its products, which
combine technology born from
Nippon Sanso with the Thermos
brand.

Industrial Gases andVacuum-Insulated Bottles
Share the Same DNA
Here, we go back to the 1970s when
the search for a new business started.
The Company set out guidelines forselecting themes on what kind of
products it should create. These
included “something completely
new to the world, or something
made by a completely new method,”“something with a connection to thecompany’s current business,” and“something difficult for other
Company’s to imitate.” The Company
set out to use proprietary technologies
that it had honed internally to createa product that could be differentiatedfrom those of other companies. The
result was the vacuum-insulated bottle.
Developing a stainless steel
vacuum-insulated bottle required
vacuum-insulation technology andadvanced welding technology. These
are indispensable technologies forthe safe, reliable supply of industrial

NIPPON SANSO HOLDINGS CORPORATION

49

gases. It is perhaps inevitable that agas company would select vacuuminsulated bottles as its consumer
goods. Industrial gases and vacuuminsulated bottles have the same DNA
that has been passed down throughthe Company.
The Group Philosophy of Nippon
Sanso Holdings is “Proactive.
Innovative. Collaborative. Making life
better through gas technology.”
Thermos K.K. has its own original
corporate philosophy, and to realize
this, the company has declared that
it will contribute to saving energy
through its various technologies andcreative capabilities, including proprietary insulating technologies, andprovide new value that realizes comfortable lifestyles. This aspiration is
encapsulated in the phrase “Making
life better” in the Nippon Sanso
Holdings Group Philosophy. This iscompletely aligned with the philosophy of Thermos K.K. It is also thebiggest reason that the Thermos
brand is part of the Nippon Sanso
Holdings Group.

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OUR VALUE CREATION

Market-Driven Section: Basic Technologies, R&D, and DX

Uncompromising Technological Capabilities
Developed In-House
The Nippon Sanso Holdings Group has basic technologies in the areas of plant and engineering,gas handling, and gas applications. We are using these in R&D to enable technologies and productsthat meet customer needs in the four geographic hubs where the Group is operating its business.
We have also been focusing on DX over the past few years, aiming to drive further efficiency gains
and optimization in our business.

Gas Handling Technologies
driving rules by companies responsible for conveying andsupplying gases by tanker truck, we promote initiatives toimprove the awareness and skills of employees involved insupply operations who handle high-pressure gas.

In gas handling technologies, we deal with different conditionsof gas supply, including requirements for the amount andpressure, depending on the customer’s usage environment.
Accordingly, we select the most appropriate mode of supply
for each customer, including through pipelines from on-siteplants or bulk supply by tanker truck for storage in tanks
located at the customer’s site. By supplying gas in the optimal
form, we are able to fully meet our customers' requirements.
Furthermore, different methods of handling gas present
different risks. In addition to ensuring strict adherence to safe

Basic Technologies 
gas application technologies, which involve using the characteristics of gases in various fields such as food freezing andmetal processing. Using these technologies, we will continue
uncompromising R&D to provide optimal solutions that meetcustomers’ demands.

The basic technologies of the group support its businessdomains. These include plant and engineering technologies,
which involve operations from design through to the maintenance of ASUs that produce air separation gases; gas handlingtechnologies, which involve the continuous stable and efficient production and supply of air separation gases; andOrganizations
Related to the BasicTechnology System

Nippon Sanso Holdings Group Basic Technologies
Plant and engineering
technologies

Gas Businessin JapanGas handlingtechnologies

Gas Businessin the UnitedStatesWe supply gas in the optimal form for each customer.

Gas application
technologies

Gas Business
in Europe

Gas Businessin Asia andOceania

We are resolving customers’ issues and providing new value to meet market
needs in every area through the Group’s basic technologies.

Plant and Engineering Technologies

Gas Application Technologies
Gas application technologies unlock the many effects andbenefits of gases. Depending on the application, we apply
expertise for using gas more safely and efficiently. We conduct R&D for different gas applications, such as welding, foodprocessing, heat treatment, combustion, and refrigeration,and provide a host of technical support and solutions that
contribute to solving customers’ issues.
Over the past few years, there has been an increase inenvironmental awareness among our customer corporations.

We have seen growing interest in oxygen-enriched combustion and hydrogen combustion technologies ( P.53), which
contribute to reducing CO2 emissions. On the social issue offood loss, nitrogen-filled packaging technologies and rapidfreezing technology using liquid nitrogen are being used toextend the use-by dates of fresh food and cooking ingredients. The Company will use its gas application technologies
to contribute to sustainability with a focus on the global­environment, production, and people’s daily lives.

At the Yamanashi Laboratory, we conduct R&D on themes such as oxygen-enriched
combustion, welding and cutting, and heat treatment.

R&D on welding technology

management at our factories. We provide extensive practicaleducation, including training for emergency situations, using
a proprietary ASU simulator developed for this purpose.

Since achieving the first domestic production of ASUs in 1935,
the Company has built over 100 plants around the world as
a leading manufacturer of ASUs. We provide comprehensive
services from basic design to detailed design, manufacture,procurement, construction, commissioning, and maintenance.
Plant and engineering technologies are divided into five mainfunctions: plan proposal, detailed planning, construction
work, procurement, and plant construction. These five functions are comprehensively provided by the Plant Engineering
Center established in the Group’s Japanese operatingcompany, Taiyo Nippon Sanso Corporation.
The reliable, efficient, and safe production and supply of gases
depends on improving the skill levels of plant operators, as wellas on ensuring careful everyday operational and equipment

NIPPON SANSO HOLDINGS CORPORATION

We ensure safe at our production facilities.

Operations at the Keihin Factory of the Plant Engineering Center, Taiyo Nippon Sanso Corporation50

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Market-Driven Section: Basic Technologies, R&D, and DX

R&D Strategy 

Initiatives for Realizing a Carbon-Neutral Society with Combustion Technologies 

The overall R&D functions for the Group are carried out mainly by the R&D bases of the Group’s Japanese operating company,
Taiyo Nippon Sanso Corporation. We have established the following policy for promoting efficient and optimal R&D in collaboration with partners.

The Group’s R&D base at the Yamanashi Laboratory of Taiyo
Nippon Sanso Corporation is focusing on oxygen combustion
technologies as part of our efforts to realize carbon neutrality
by 2050. Using the Group’s basic technologies, we promote
the development of oxygen combustion technologies for abroad range of applications, contributing to energy saving
and emission reduction of substances harmful to the environment. For example, we have developed a combustion technology whereby high-purity oxygen is added to combustiblegas, increasing the oxygen concentration in the environment
to 21% or higher, which boosts combustion efficiency. Thisfacilitates a higher burner flame temperature while at thesame time lowering the concentration of nitrogen oxide(NOx) in the oxidizing gas, thereby reducing NOx in emissions
and thermal losses. This technology is used in a variety of
applications, such as high-temperature heating furnaces andmelting furnaces, where it contributes to both energy saving
and CO2 emission reduction.
The Company’s oxygen combustion technology has its
origins in an oxygen burner technology introduced from U.S.
firm Air Reduction Company in 1970, in which fuel (mainly

Taiyo Nippon Sanso Corporation R&D Unit
R&D Policy
We have established a technology research organization for pursuing sustainability as a Group, which will contribute toearnings expansion by promoting innovation, operational efficiency, and globalization.

Basic Approach• Expand existing technologies and contribute to strengthening our fundamental business• Establish a portfolio strategy of concentrating resource investment in growth fields where the Group can leverage its corecompetencies to explore and expand new business domains• Use global open innovation to complement technologies, accelerate development, and expand channels• Contribute to operational efficiency through effective use of digital technology

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
first became popular as a way to reduce energy consumed byelectric furnaces, after which use expanded to include otherindustrial furnaces, including aluminum melting furnaces,
refractory cement melting furnaces, and aluminum oxide kilns.
The Company has responded by developing a lineup of products suited to diverse needs, including the SCOPE-Jet® swing
burner, which substantially reduces power consumption andoperation time, and Innova-Jet®, which achieves a significant
reduction in NOx generation during oxygen combustion.
Recently, we have been cooperating with the Nippon Gases
Euro-Holding S.L.U. group on R&D into hydrogen combustion
and ammonia combustion as a new initiative. Since hydrogenand ammonia do not produce any CO2 or atmospheric pollutants at all when they combust, they are expected to contribute toward realizing carbon neutrality.

R&D Promotion Structure 
Our continuing rigorous pursuit of the possibilities of gas
and R&D will help to create new demand for gas. We willcontinue striving to propose total solutions for our customers’
needs, backed by a wealth of expertise and experience.

bases are part of Taiyo Nippon Sanso Corporation (Yamanashi
Laboratory, Tsukuba Laboratory, and SI Innovation Center),and we also conduct R&D related to electronics and so forthat our Longmont site in the United States. At the Tsukuba
Laboratory and the Longmont site, we conduct regularexchange meetings to foster deeper connections, and we aim
to generate further synergies through exchanges of personnel
and technologies, among other initiatives.

Market needs
United States
EuropeAsia and Oceania

Nippon Sanso
Holdings

Taiyo Nippon
Sanso
Corporation
R&D Unit

Breakdown of Research and Development Costs

Japan
21%

6%

The role of the holding company (Nippon Sanso Holdings)
is to collect information such as user requests and market
needs gathered at our global geographic hubs in the UnitedStates, Europe, and Asia and Oceania, organize the measuresthat need to be implemented in each region, and decide on
the overall policy. This policy is shared and discussed with
Taiyo Nippon Sanso Corporation’s R&D Unit, which organizes
the overall R&D strategy for the Group. Currently, our R&D

NIPPON SANSO HOLDINGS CORPORATION

Industrial gases............... 15%

15%

11%
44%

3%

Production technologies.... 6%
Electronics....................... 11%
Medical ............................ 3%
New technologies........... 44%
Basic technologies/
Feasibility studies............. 21%

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Comment from a Professor at a Partner University

Expected Performance as a Leader in the Drive for Carbon Neutrality
Professor Hideaki Kobayashi, Tohoku University

developing basic technologies for using carbon-free ammonia
as fuel for an industrial furnace, and we achieved the initial
target at a high level. At the end of 2020, ammonia fuel was
included explicitly in a statement on the green growth strategy associated with achieving carbon neutrality by 2050.
Amid these developments, I would like to continue working
with Taiyo Nippon Sanso on early social implementation of
the results of our SIP project. Open innovation is much talked
about these days. I hope that Taiyo Nippon Sanso will continue to develop and grow its technologies and its outstanding human resources, which are its strengths, and that thecompany will play a leading role in achieving carbon neutrality
for the industrial sector.

Taiyo Nippon Sanso Corporation supplies industrial gases, but
it is also expanding operations in a wide range of applications. The company’s technology development is extremely
highly rated by the Combustion society of Japan, which is mymain academic society, and received the Society’s technology
award in fiscal 2015. My relationship to Taiyo Nippon Sanso
came about through the activities of the society, as it was themain participating institution from the start of the national
Strategic Innovation Program (SIP)’s Energy Carrier Project,which was conducted over five years from 2014. In this project, I was leading the ammonia direct combustion team,which gave me an opportunity to become more familiar with
Taiyo Nippon Sanso’s new technologies. I was put in charge of

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OUR VALUE CREATION

Market-Driven Section: Basic Technologies, R&D, and DX

Promotion of DX and business processes based on data, then utilize the data
and digital technologies to anticipate customer feedback andcreate proposals that contribute to innovation of customers’
technologies and production processes. As this process gradually gathers momentum, we recognize that it will lead toincreased efficiency and optimization of business overall.
Eventually, we aim to extend this initiative globally and involvethe entire supply chain.

Nippon Sanso Holdings will begin initiatives to promote
DX as a means for solving various issues that arise as theCompany executes its business strategies. For example, in the
United States, DX is helping to achieve efficient operation
management by enabling centralized operations of ASUs
through remote monitoring and control. We are also working
to build a supply chain in Japan that can be operated withfewer personnel. First, it is important to build an organization

ExampleConversion to Smart Factories (Automation and Labor Saving),
and the IGSS for Realizing DX
added-value services. These are next-generation gas supply
systems that combine digital innovation technologies
using the Internet of Things (IoT) and robotic process
automation (RPA)* with gas handling expertise cultivatedby the Company over many years. This is just one exampleof the Group’s approach to DX.

Taiyo Nippon Sanso Corporation has developed theIntelligent Gas Supplying System (IGSS) to realize DX of
the gas industry and respond to customers’ needs for
adopting smart factories. Reliable gas supply and monitoring and daily container exchange operations play animportant role in ensuring the production, quality, andsafety of customers’ products. The Company offers gas
technologies of the future that contribute to operational
efficiency gains and labor saving by providing new* An initiative to substitute and replace operations that have been possible only
through human workers, or even more sophisticated operations, using cognitivetechnologies including rule engines, AI, and machine learning

ExampleRemote Monitoring of ASU (Plant) Operations in the United States

Given the vast geography of the United States and thelarge number of ASUs (plants) there, Matheson Tri-Gas, Inc.
(MTG) has established centralized operations for remotemonitoring and operation of plants to enable efficientbusiness operations. As many as 260 plants can be monitored on a PC, which also allows the user to perform
operations related to tank levels and power supply
network load.
In October 2019, we upgraded the Remote Operation
Center, which conducts remote monitoring of plants. This
will enable remote monitoring of even more plants, andwe have also installed a system for monitoring mass production units for HyCO.

The DX approach of using remote monitoring for plants is
an important key to MTG’s supply chain optimization strategy.

MTG’s Remote Operation Center

Strategies Going Forward As we promote and expand our business going forward, we will enhance the areas we are developing as part our DX strategy ateach of our locations. In Japan and in Asia and Oceania, we will use DX with a focus on increasing productivity, while in Europe
we will apply it to customer relationship management (CRM) and human resources development (talent management).

Japan

EuropeAsia and Oceania

We aim to increase operational
efficiency and productivity and torebuild our business model using
digital technology, including
remote operation of production
plants and increased efficiency oflogistics operations, which are key
strategies of Taiyo Nippon Sanso
Corporation’s Corporate Planning
Office and ICT Unit.

In June 2019, we launched the DX
project. Our three main fields offocus are customer engagement,
increased efficiency of operations,and employee engagement. We
will also focus on utilizing DX for
human resources development.

In the Engineering Division of
Nippon Sanso Holdings Singapore
Pte. Ltd., we are promoting the useof digital technology, including
visualization through centralized
management of production statusat plants in each country. We arealso promoting a container management system and an automaticorder shipment delivery system inthe field of logistics for our operatingcompanies in Southeast Asia.

Image of the IGSS in operation

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Co-Creation: Sustainability Strategy

Message from the CSO

Enhancing Human Well-Being andContributing to a More Sustainable Future throughTakeshi Miki

Sustainability Management
Nippon Sanso Holdings aims to create new value through innovative gas solutions, and to enhance
human well-being and contribute to a more sustainable future. We believe that by contributing sustainably to helping resolve issues facing people, society, and the earth, we will simultaneously increase social
value and economic value, and by extension the Group’s corporate value. With this philosophy incorporated into the Group Vision, which is commonly understood by all our employees, we are working
together as a united group to promote sustainability management.

Sustainability Management Focused on the Themes of “the Earth,” “Society,” “People,”and “Management Issues” 
The Group is closely involved with a wide range of industries, and webelieve that our business activities themselves provide a way for contributing to the well-being and sustainable future of all our stakeholders.
Moreover, the world is currently facing significant unavoidable challenges
such as climate change, abnormal weather, resource depletion, and foodshortages. Although these issues are global in scale, there are many ways
for the Group to contribute to solving them using its strengths. We haveidentified “the earth,” “society,” and “people” as key themes to which
we should apply our strengths to providing solutions and making
improvements for a better future. We will work to contribute to solutionsin these areas, in addition to the theme of “management issues.”

Society

PeopleManagement Issues

People: Respecting and coexisting with all people
involved in our business activities

The Earth: Contributing to a sustainable global­environment with a sustainable business model

We aim to earn the trust of all stakeholders, including ourhuman resources, who are essential to the Company’s sustainable growth, as well as our supply chain, our customers, andshareholders and investors. To this end, we will engage in close
dialogues with them as we cooperate to build a better society.

As a group that takes advantage of the natural resource of
air, the sustainability of the global environment is important
to us. In addition to reducing the environmental impact of ourbusiness activities, we will also strive to create products andservices that help resolve environmental issues in order tocontribute to a sustainable global environment.

Management Issues: Providing a safe, reliablesupply of innovative gas solutions

Society: Contributing to the realization of an abundant society by helping resolve various issues andproposing diverse lifestyles

To ensure the safety and stability of gas supplies, we areworking to increase our security capabilities and maintainand increase quality at every step from the production processes to the supply process and in our customers’ use of
the products.

Using our social infrastructure base in every region and various
points of contact with local communities, we will contributeto the realization of an abundant society by helping resolve
various social issues, such as food shortages and the treatmentof illnesses, through the Thermos business and the offer ofcomfortable and environmentally friendly lifestyles.

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Senior Executive Officer,
Group Technological Affairs & Environment Office,and Chief Sustainability Officer (CSO),
Nippon Sanso Holdings Corporation(Additionally appointed as Senior Executive Officer,
Head of Technological Affairs Unit,
Taiyo Nippon Sanso Corporation)

We will contribute to the realization of a carbon-neutral society
while working to achieve sustainable growth and enhance corporate value.
Furthermore, the Group has a range of outstanding
basic technologies cultivated over many years. These
include technologies for increasing combustion efficiency
by raising oxygen concentration; technologies for usinghydrogen and ammonia, which do not emit CO2; freezing
and gas technologies that enable extended food preservation periods, reduced food loss, and increased aquaculture
production; and contributions to the medical and healthcare fields, such as iPS cell cryopreservation technology.
Furthermore, in the Thermos business, we are helping tolower our environmental impact by reducing plastic usage
through the promotion of personal bottles and realizing
energy saving using advanced technologies for keeping
contents hot or cold. We will also use the wide range ofcontact points with general consumers to propose abundant lifestyles by providing sustainable products. In addition,
the industrial gases field still holds significant potential for
innovation. Examples include contributions to advanced
technologies such as semiconductor manufacturing, applications for stable isotopes in medical testing technology,
and the advancement of metal 3D printing through theuse of inert gas. Through our products and services thatmake use of these technologies, we will contribute tosolutions for environmental and social issues.
As “The Gas Professionals,” the Group will aim to achievesustainable growth and further increase its corporate value
by providing innovative gas solutions to enhance humanwell-being and contribute to a more sustainable future.

As the world seeks solutions to global-scale environmental
issues and a host of social issues, it is increasingly important for companies to play their part in contributing to theUnited Nations Sustainable Development Goals (SDGs).
Furthermore, in addition to the financial aspects of business, it is also important for companies to sustainably
develop their non-financial initiatives. In particular, promoting environmental, social, and governance (ESG) initiatives
is now an essential priority.
With industrial gases as its business foundation, theNippon Sanso Holdings Group has contributed to society
and the environment through gas technology. With its
transition to a holding company structure in October 2020,
the Group has made a fresh start and will now strengthen
its sustainability efforts with a wider perspective as a globally active corporate group.
The sustainability of the global environment is anextremely important issue for the Group, which makes useof the natural resource of air. We will further our efforts toimprove the energy efficiency of our production facilities
and expand the use of renewable energy, aiming to contribute to the realization of a carbon-neutral society.
Furthermore, as a corporate group that handles industrial
gases, our business is based on a commitment to providing
customers with a secure, safe, and reliable supply of gases.
In keeping with our motto, “Selling gas is selling safety,”
we will strive to ensure safety in all aspects of our operations while contributing to healthy, safe, and secure
activities in society.

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Co-Creation: Sustainability Strategy

ESG Materiality With the aim of contributing to the realization of a sustainable society, we work to ensure a solid grasp of our impact on the
global environment, society, and people (the Company and its organizational structure) through all of our 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 haveidentified as our materiality (material issues), which are grouped under four themes, including management issues.

External Environment
Climate change

ThemeManagement
IssuesThe EarthSociety

People(The Company
and Its
Organizational
Structure)

Resource shortages

Food and agriculture

Maintenance of healthMateriality (Material Issues)

Medical care

Respect for human rights

Role of the Nippon Sanso Holdings Group

Occupational health and safety

Human resources development

Principal Initiatives• Compliance• Corporate governance• Process safety• In adherence to high ethical standards, strive to conduct corporate activities in a fair, impartial,
and sincere manner by promoting and maintaining compliance with relevant laws, regulations,international norms, and internal rules.
• Reinforce corporate governance by improving management transparency and fairness, as well as
by increasing management agility through efforts to enhance management oversight functions andaccelerate decision-making.
• Strengthen independent systems for ensuring process safety in line with our belief that selling gases
is commensurate with selling safety.
• Realize reliable supply of industrial gases, thereby ensuring our ability to provide the gases ourcustomers need when they are needed.

• Reinforcement of systems based on Japan’s Corporate Governance Code
• Initiatives to ensure safe and reliable supply• Continuous implementation of compliance training• Efficient use of resourcesand energy• Climate change• Securing of cleanwater resources• Preservation of biodiversity• Introduce effective ASUs that help reduce electric power consumption and CO2 emissions.
• Lower fuel consumption by tanker trucks to reduce related CO2 emissions.
• F ortify framework for mitigating climate change through the reduction of GHG emissions
and other efforts.
• P romote the reduction of GHG emissions and the creation of opportunities to mitigate/adapt to climatechange and expansion of business through the sale of vacuum-insulated bottles and cookware.

• Promotion of environmental management• Initiatives to protect the global environment• Contribution to maintenanceof physical health• Contribution to medical care
• Response to food- andagriculture-related issues• Increase in consumer
satisfaction• Contribution to upgradingand expanding social
infrastructure• Response to smart societies• Contribute to health and medical care through the provision of products for the medical field.
• Provide industrial gases and related equipment that contribute to the resolution of key issues
by helping protect food resources and improve agricultural productivity.
• Leverage the advantages of LP gas, including its low carbon footprint and disaster-resistant nature ofits distribution system, to create business opportunities and expand business.
• Contribute to the realization of comfortable and environment-friendly lifestyles through the sale ofThermos brand products.
• Ensure that customers can use products and services with peace of mind by strengthening systems toensure quality and safety across the entire product life cycle.

•D evelopment of products that contribute to solutions for environmental
and social issues• Reinforcement of quality assurance and management systems• Respect for human rights• Occupational health andsafety• Human resources
development and training• Diversity and inclusion• Product and service reliability• Promotion of measures toimprove information security
and privacy• Stakeholder engagement• Contribution to communities• Promotion of sophisticatedinformation and communications technology (ICT) use• Participation in initiatives anddemonstration of leadership• Promotion of sustainability inthe supply chain•R espect human rights in corporate activities and require that business partners do not violate human rights
or engage in any form of discriminatory behavior (through such measures as the promotion of anti-harassment
initiatives and the establishment of hotlines).
• P romote health management in accordance with relevant national and regional laws and regulations,create a safe work environment, while at the same time maintaining and advancing the physical andmental health of employees.
•O ffer equal opportunities in hiring, placement, advancement, and skill development as well as seek tofoster and develop human resources from a medium- and long-term perspective.
•A ctively seek to secure diverse human resources with diverse values without regard to considerations suchas nationality, age, or religion and promote diversity and inclusion in corporate activities (e.g., promotion ofactive roles for women, hiring of non-Japanese, employment of people with disabilities, etc.).
•R ecognize the importance of and responsibilities associated with protecting information assets in corporate
activities and ensure appropriate information management to prevent leaks of confidential information
pertaining to customers, business partners, Nippon Sanso Holdings, and other parties.
• S tep up efforts to contribute to society through business activities and deepen understanding of communities while at the same time working continuously to respond to communities’ requests and expectations.
• E arn stakeholders’ trust through respect and close dialogue and by reflecting their views in corporate
activities, and work with stakeholders to realize a better society.

• Thorough internal promotion of the “Policy on the Prevention and
Eradication of Harassment in the Workplace”• Employee education and training• Maintenance and improvement of information security systems• Promotion of sophisticated ICT use• Dialogue with shareholders and investment analysts• Initiatives to ensure safe and reliable supply• Creation of environments to promote innovation and diversity• Social contribution activities• Health management initiatives• Enhancement of information disclosure

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Promotion of diversity

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Co-Creation: Sustainability Strategy

Materiality Identification Process 

Identification of ESG Materiality 
Our materiality refers to the material issues that Nippon Sanso Holdings should engage with in order to grow sustainably withsociety. We see these as something that connects the solutions to global issues such as the SDGs to the Company’s philosophy
system and leads to the creation of value. Materiality forms the foundation of our business activities.
The Company recognizes the interests of society and stakeholders, as well as social issues. Considering their impacts on management, we have been renewing our current materiality to coincide with the formulation of the next medium-term management plan, which starts from April 2022.
Going forward, we will set out clear key performance indicators (KPIs) and promote initiatives in line with our materiality. Our
aim is to help resolve social issues and increase corporate value through our business activities.

2021

Extremely highMatrix of Key Initiatives● Efficient use of resources and energy● Climate change● Product and service reliability● Human resources development
and training● Occupational health and safety● Diversity and inclusion●R esponse to food- andagriculture-related issues● S ecuring of clean water resources

2022

JUL

Long and middle-length lists for materiality: Set our issues to consider

AUG

Internal survey: Evaluated issues

SEP

Materiality candidates: Identified key issues and assigned priority

OCT

Internal discussion, decision (meeting about the medium-term management plan):Creation of the materiality matrix

MAR

Approval: Internal approval

Very highHigh

Importance to stakeholders

Process and Direction of Renewing ESG Materiality for the Next Medium-Term Management Plan ● P romotion of sustainability inthe supply chain● Contribution to communities● Contribution to maintenance ofphysical health● Contribution to medical care

● Respect for human rights● Promotion of measures to improveinformation security and privacy●C ontribution to upgrading andexpanding social infrastructure● Preservation of biodiversity● Response to smart societies● Stakeholder engagement● Promotion of sophisticated ICT use● Participation in initiatives and demonstration of leadership● Increase in consumer satisfaction

Very highExtremely highHighregions around the world. After obtaining approval from theManagement Committee and the Board of Directors, weplan to announce the new materiality.
The Group will continue to promote sustainability management, contributing through its worldwide business activities to the solution of global issues, such as the sustainable
development of economies and societies in various countries
and regions around the world.

ESG issues, the SDGs, and other topics related to sustainability
are growing in importance globally, and the impact on the
Company’s corporate activities is also changing. We havetherefore conducted a revision of the Company’s materiality,
initially formulated in 2015.
In this revision, we considered a wide range of stakeholder
perspectives, including the SDGs, various international guidelines, and ESG evaluations, as well as the impact of our businesses. We exchanged opinions with outside officers andexternal specialist firms and conducted employee surveys in

Importance to Nippon Sanso Holdings● Key issues related to the earth ● Key issues related to society● Key issues related to the Company and its organizational structure

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Roundtable Discussion (2)Progressing toward
the Realization of a CarbonNeutral Society by 2050

Leaders Promoting
Sustainability Management
at Nippon Sanso Holdings
Takeshi Miki

Stephen Stroud

Senior Executive Officer,
Group Technological Affairs & Environment Office,and Chief Sustainability Officer (CSO),
Nippon Sanso Holdings Corporation(Additionally appointed as Senior Executive Officer,
Head of Technological Affairs Unit, Taiyo Nippon Sanso Corporation)

Executive Vice President,
Corporate Administration and General Counsel
Matheson Tri-Gas, Inc.

With the transition to a holding company structure in October 2020, the Nippon Sanso Holdings Group
shared its determination to contribute further to sustainability through greater global cooperation.
The Group also reemphasized what it can do to advance this goal and presented “Contributing to theRealization of a Carbon-Neutral Society by 2050” as an important policy. The sustainability officersof each operating company sat down together to discuss the vision for the Group’s sustainability
management going forward as the Group works in concert to achieve this target.

Awareness of Sustainability in Each Region
MIKI Recently, there has been increasing interest in the non-financial initiativesof companies, such as ESG initiatives
and the level of contribution to realizing
the SDGs. Nippon Sanso Holdings has
also announced a target of contributing
to the realization of a carbon-neutral
society by 2050 at the financial resultspresentation held in May 2021. Today,
we have brought together the sustainability officers from each operatingcompany. I have dealt with each company individually before, but since thisis the first time that we have assembled
in this capacity, please begin by introducing yourself.
URIARTE I have worked at Nippon
Gases Euro-Holding S.L.U. (NGE) for
38 years. Since January 2020, I havebeen in charge of sustainability at
NGE, with a combined responsibility
for health, safety, environment, andquality areas. I am delighted to havethis opportunity to meet you all.
STROUD I have worked at Matheson
Tri-Gas, Inc. (MTG) for about 15 years.
My various job titles include vicepresident in charge of management,
legal affairs, and human resources, aswell as having responsibility for safety,
health, environment, and quality.
Furthermore, I am the Chief
Compliance Officer (CCO) forNorth America.
ISHIHARA I am Hitoshi Ishihara,president and CEO of Nippon Sanso
Holdings Singapore Pte. Ltd. (NSHS).
NSHS is the regional holding company
for the ASEAN region, so it provides
support to operating companies in theregion in various fields such as safety,
compliance, engineering, and humanresources development. The Group’s
initiatives on the key issue of sustainability are an important theme, and I
am extremely happy to participate
today as a representative of the Asiaand Oceania region.
YAMADA My name is Masashi
Yamada, and I am here today from
Thermos K.K., where I am in charge of
quality and safety. Unlike the companies represented by the other participants at the meeting today, Thermos

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develops, manufactures, and sells products mainly comprising household
goods and vacuum-insulated bottles
for the consumer market.
MIKI Thank you. Currently at Nippon
Sanso Holdings, we are actively working
to disclose information related particularly to the environment, having agreed
with the recommendations of the Task
Force on Climate-related Financial
Disclosures (TCFD) in 2019. We arepromoting disclosure of the quantitative
effects of our environmental contribution after evaluation by independent
institutions. I believe that our industrial
gases business is already a sustainable
one, since we do not use fossil fuels in
the air separation process and do not
use up resources as we use air for the
raw material. We also supply gases tothe food and medical fields. In thatsense, I think we can say that we contribute to both environmental andsocial issues through the safe, secure,and reliable provision of gas. Moreover,
the Thermos brand is also being developed as an environmentally friendly

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Inaki Uriarte

Hitoshi Ishihara

Masashi Yamada

Director, Sustainability and HSEQ Europe
Nippon Gases Euro-Holding S.L.U.

Representative Director, President and CEO
Nippon Sanso Holdings Singapore Pte. Ltd.

Director, General Manager of the Quality Control Department
Thermos K.K.

product. I believe that the Group iscontributing to sustainability across a
broad range of areas. I would like tohear a brief introduction of what each
operating company is doing in thisregard.
URIARTE The key to reducing GHG
emissions is to improve the productivity of business processes and equipment, such as upgrading equipment
technology. It is also extremely important to work with energy suppliers. NGE
makes strategic investments in suppliers that handle renewable energy. To
ensure our renewable energy share,
we have defined a strategy of acquisition of Renewable Electricity Certificatescombined with Power Purchase
Agreements through joint investmentswith suppliers in the energy field.
Through these, we will provide a reliablesupply of renewable energy over the
medium and long term. These various
initiatives embody our commitment to
reducing our GHG emissions by 35%
from the fiscal 2019 level over the 10
years from 2019 and 2029.
STROUD MTG acquired the environmentally friendly HyCO business from

Linde Gas North America LLC in 2019,
and we are currently developing thebusiness in cooperation with various
regions. Since hydrogen can be used
as a substitute for fossil fuels, thisbusiness has much to offer in the energy
field. Furthermore, even in the current
COVID-19 pandemic, there have beensome extremely good developments.
We have collaborated with a large U.S.
shipping company to supply the dry ice
needed for transporting COVID-19
vaccines. This has had a tremendously
positive impact in terms of social contribution. This dry ice is also very closely
related to environmental issues. MTG
has modified its dry ice production
plants to recover CO2 emissions during
the production process and to reuse
the recovered CO2. The recaptured CO2
converts into 14,000 tons of dry ice
per year. Another sustainability focus
of MTG’s business is plant automation.
In addition to improving operating
efficiency, plant automation has a significant impact on reducing CO2. The monitoring and control functions for
production are efficiently maintained,
so that we can respond rapidly to market

needs and supply just the amount of
product needed to meet demand.
ISHIHARA The United States andEurope are leading on a wide range ofinitiatives, which has really given us agood example. In Asia and Oceania,
there is a wide variation in country andpopulation sizes, among other aspects,
and there is a wide diversity between
countries in terms of their initiatives,
industry structures, business environments, and living environments. Asia
in particular is a growth market, andthere is significant potential there forindustrial gas manufacturers such as
ourselves to contribute to efforts tofurther upgrade industrial and social
infrastructure to support industry
development. Our first priority is tocontinue safe, reliable supplies of gas asa social infrastructure, and also to play
our part in the social infrastructure in
the Asian market by providing productsthat can contribute to the environment
based on the gas production technology,
experience, and knowledge that we havecultivated over many years. In addition,
Southeast Asia is a region with abundant marine products and fruits, and

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Roundtable Discussion (2)Progressing toward the Realization of a Carbon-Neutral Society by 2050

we will engage in providing goods andservices that contribute to society, suchas food freezing or refrigerated storage, and supplies of oxygen for remote
medical care. The ASEAN region is home
to many different ethnic groups, making
diversity initiatives essential. Comparedto other regions, Asia and Oceania has
a significantly higher ratio of female
employees and managers, and it is also
distinguished by a large number ofyoung workers. In this situation, we havemade understanding diverse values
one of our management strategies.

Thermos has a different
business model to the gas companies,
and our corporate philosophy is“Thermos continues to introduce newkinds of lifestyles that are agreeable topeople and society and also environmentally friendly.” First, we are reducing plastic containers by promoting
personal bottles. By encouraging each
person to use their own vacuuminsulated bottle, we help to reduce
single-use PET bottles and paper cups.
Next are our products, such as vacuuminsulated bottles and soup containers
YAMADA

that keep their contents hot or cold. In
particular, Thermos’ flagship product,
Shuttle Chef®, which is exclusive to
Thermos, helps to save energy as itallows cooking with its heat retaining
capability. Furthermore, we also use
products returned from the logistics
chain for recycling, or sell them at
discounted prices to employees and use
the proceeds to donate to tree-planting
activities and so forth.

Sustainability Is a Key Perspective for Management Strategy
MIKI We have heard about eachcompany’s initiatives to date. I would liketo hear your opinions about challenges
to be addressed going forward. Broadly
speaking, I think there are three points
to address regarding carbon neutrality.
The first is how to reduce the level of
GHG emissions from business activities. This will require efforts to reduce
electricity consumption and switchingto greener electricity sources. It will
also be important to streamlining production and logistics using DX. The
second point is how to reduce GHG
emissions from our customers’ production activities. Supplying materials that
contribute to the environment andstrengthening CCUS will be key in thisregard. The third point is that there isroom to grow new businesses in themanner of the global HyCO division andso forth. I believe that there are still
many fields in which we can contributetoward realizing carbon neutrality.
ISHIHARA In Asia and Oceania, the scaleof the companies and their earnings arestill small compared to those of Europe
and the United States. The region is stillin the developmental stage. Conversely,
since there is room for growth, it is also
the region with the highest growth
expectations in the Group. In that sense,with its strategy for business expansion,
the Asia and Oceania business willcontinue to see an increasing trend in
GHG emissions in absolute terms,
partly driven by expansion in production capacity. This being the case, we

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will contribute to CO2 reduction,
including by increasing the operating
efficiency of plants in our production
facilities and increasing the efficiency of
our transportation and supply chains, aswell as CO2 reduction for our customers
through the sale of products that contribute to the environment. In addition,
we will also be proactive in exploringnew opportunities in Asia and Oceania
for the HyCO business that Mr. Stroud
mentioned. Furthermore, our foundation in a growth market such as Asiaand Oceania inevitably comes down tothe capabilities of our human resources.
We need to minimize business risks,
including strengthening efforts forcompliance and safety, while at thesame time the involvement of top
management of each company is alsoessential. We are therefore seeking tobuild a solid structure for engaging ingovernance enhancement and diversity
promotion across the entire Asia andOceania region. There are many challenges to be met, but we will start byproperly carrying out the tasks that lie
immediately in front of us and increasing
economic value and social value. In
this way, we aim to achieve sustainablegrowth while also building a foundation to support it.

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MIKI The Asian market is certainly one
where GHG countermeasures need to
be promoted as business is expanded.
This goes not only for Asia but is also
obviously important for the wholeGroup to reduce its environmental
impact while expanding
business. However, environmental
measures and contributing to sustainability are also business opportunities.
I would like us to discern which fields
harbor opportunities and work toincrease our corporate value while
proactively engaging with and contributing to sustainability. Looking at thingsin terms of business opportunities,
there are of course some differences
between the Thermos business andthe industrial gases business; however,
the Thermos business may have a great
number of opportunities in terms ofcontributing to sustainability.
YAMADA That’s right. It is mostimportant to include the perspective ofsustainability at every step, from planning and development, through to
production, quality control, and sales.
At the planning stage, we look at how
much resource saving can be achieved,
including the product packaging. At
the development stage, we look forways to save materials such as metaland plastic. At the production stage,
we plan to examine the developmentof production methods and equipmentthat have low material loss. In quality
control, we are continuing long-standing
efforts to lower the rate of claims by
reducing defective products, thereby
cutting down on product disposals.
Products and services that incorporate
these sustainability aspects offer added
value to customers by enabling themto reduce their environmental impact
through Thermos products. I believe
this is an extremely important way tothink about business opportunities
going forward.

I fully agree. I see sustainability
as a cornerstone of our business strategy
and our stakeholders are the main focus
of our ESG initiatives. In Europe, weneed to continue focusing on contributing to renewable energy and reducing
waste. In addition, going forward we
will use external rating organizations
and so forth to gain a deeper understanding of how we are evaluated byour stakeholders, and make use of thisinformation in proposing management
strategies. Management of governanceand compliance, the environmental
impact of our activities, community
engagement programs and our people
is really what sustainability is all about,and it also ties into increasing corporate
value. I think that sharing the knowledge of various initiatives that are
taking place in each country throughthis dialogue will help to strengthen the
Nippon Sanso Holdings Group’s contribution to sustainability even further.
STROUD The HyCO business in the
United States set up a task force lastyear, which has been working withmembers in Europe and a team in Asia
to further strengthen the HyCO business by looking at ways to identify fields
for development and so forth. Many ofthese fields involve the use of hydrogenin sustainability efforts such as the“blue” and “green” hydrogen initiatives.
URIARTENIPPON SANSO HOLDINGS CORPORATION

65

We want to continue deepening ourcooperation with each region froma perspective of sustainability, and I
believe that many of the initiatives thathave been spoken of today can beapplied in other regions as well. We
have made an excellent start today,
and I hope that we can continue tolearn from one another as we implement our initiatives.
MIKI Thank you all for your contributions. Right now, we are formulating
the next medium-term management
plan, truly as a Group. We will use
the discussion today, quantifying what
we can in the next plan to set KPIs
that will enable people to visualize oursustainability initiatives clearly.

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OUR VALUE CREATION

FeatureResponse to Environmental and Social Issues

Strategy
We will identify climate change risks and opportunities related to our organization and integrate them with the organization’s
strategy and financial plan to formulate the medium-term management plan.
Initiatives

We are facing a host of environmental and social issues that must be overcome, including climatechange, food shortages, and effective use of energy and resources. Nippon Sanso Holdings will provide
solutions using the advanced technologies that it has developed, aiming to help resolve these issues andrealize a sustainable society.

Risks

is also an important value for us. We see our mission asproviding innovative gas solutions safely and reliably, without
any interruption to supply. We recognize that continuously
contributing to the development of industry in a safe manner
will realize a sustainable society and also contribute toenhancing the corporate value of the Group. In the Group’sbusiness of providing gas solutions, safety has a close affinity
with the concept of sustainability.
Finally, technologies derived from our advanced gas
technologies are being used in the medical and food sectors
to contribute to health maintenance, disease treatment, andthe preservation of food resources.

Reporting Based on the TCFD Recommendations 
Governance
The Company has established a governance structure forclimate change issues, and the entire Group is engaged ininitiatives on climate change.

Nippon Sanso Holdings expressed its support for the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD)* in November 2019. The Group has
already been working to reduce environmental impacts andsave energy, and to expand its lineup of products that contribute to reducing GHG emissions. However, based on the
final recommendations of the TCFD, we will enhance these
initiatives even further and phase in improvements to ourrelevant information disclosure as we work to increase thecorporate value of the entire Group.

Governance Structure for Climate Change Issues
Board of Directors

Reporting

Supervision
Representative Director, President CEO
Management Committee* The TCFD announced its final recommendation report in June 2017, which recommends
that all companies and other organizations disclose information about governance,
strategies, risk management, indicators, and targets regarding climate change-relatedrisks and opportunities.

Climate-related risks and opportunities the organization has identified over the short, medium, and long term (For details aboutrisks and opportunities, please see→P.120).
* Excerpt from our CDP Response Form. The CDP is an international NGO working in the field of the environment, such as climate change.

Aiming to Help Resolve Environmental and Social Issues Using Our Gas Technologies 
Nippon Sanso Holdings maintains awareness of environmental
and social issues throughout the value chains of its businesses,
from development and production to supply, sales, and product use. In the development and production process, we are
reducing energy usage per base unit through the development
and design of energy-saving ASUs, upgrading to highly efficient
ASU components, and optimizing plant operations in response
to demand trends. At the supply stage, we are promoting
efficiency improvements for our LP gas tanker trucks. In otherareas, we have been promoting initiatives to reduce the environmental impact of our business activities, such as expanding
the use of renewable energy, as well as reducing GHG emissions and contributing to global warming prevention. Safety• We identify major risks and opportunities through a materiality assessment (→P.60).
• We identify the impact of risks and opportunities (short, medium, and long term (→P.120)) on the organization’s business, strategies, and financial
plans, and work to promote countermeasures.

Global Strategy Review Committee

Short
term

• Decline in reputation as a company that emits
large quantities of GHGs

• Promotion of initiatives contributing to GHG emission
reduction by improving operating efficiency of ASUs using digitalsolution technologies

Mediumterm• Increase in tax burden with the introduction ofcarbon pricing scheme•G ain first mover advantage from entering the market for CO2-freeindustrial gases ahead of other companies

Long
term

• Faults in ASUs due to torrential rains, lightning, hail, etc.,
associated with abnormal weather• Increase in power of air compressors associated with rise inaverage global temperature• Capture of hydrogen demand associated with the transition fromcoke-reduction to hydrogen-reduction technology in blast furnaces

Impact of climate-related risks and opportunities on the organization’s businesses, strategies, and financial planning
Risk countermeasures

For details on governance disclosure, please refer toMore Information on Sustainability ( P.145).

• Transition to a low-carbon industrial gases business• Industrial gases business adapted to abnormal weather• Development of products that reduce customers’ GHG emissions• Realizing energy-saving ASUs through digital solution technologies

Strategies• Implementation of GHG emission reduction by replacing aging
ASUs in stages• P romotion of use of renewable energy and shift topurchase of electric power with low emission factor• Implementation of GHG emission reduction by using
digital solution technologies• Introduction of low-carbon products to market, including
development of ammonia combustion technology
in industrial furnaces• Implementation of GHG emission reduction by using
digital solution technologies

Financialplanning• Establishment of financial plan corresponding to plans
for regular replacement projects• Comprehensive insurance for ASUs to handle
abnormal weather• Development budgeting measures for environmental
products and services

Risk Management
We will construct a Groupwide risk management structure, and will identify, assess, and manage climate-related risks.
Climate change risk identification, assessment, and management process
Committees

Risk identification, assessment, and management• Global Risk Management Committee• Global Strategy Review Committee• Technology Risk Liaison Committee

Global Compliance Committee
CSO
Board meetings of each
operating company

Holding Company Divisions and Affiliated Business Companies* For information about the corporate governance structure, please refer here (→P.112).

Promotion of opportunities

Business

Global Risk Management Committee
Corporate Planning Office
Technology andEnvironment Office

Opportunities• Construction of risk management system in Nippon Sanso Holdings Group companies to enable early
discovery of long-term risk, prevention, and rapid response in cases of risk materialization• Risk importance determined by occurrence frequency × Financial or strategic impact• Annual Global Strategy Review Committee meeting (Chairperson: CEO) to determine financial or
strategic impact on business• Specific countermeasures for items determined by the Global Strategy Review Committee determined
at Technology Risk Liaison Committee meeting held between Nippon Sanso Holdings and operatingcompanies, then deployed globally

Metrics (Indicators) and Targets
In the medium-term management plan, we will set out indicators and targets to be used for assessing and managing risks andopportunities, then use them to evaluate our progress.
Initiatives• We disclose Scope 1, Scope 2, and Scope 3 GHG emissions(→P.178).

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Disclosed details• Sustainability data (→P.178)• Independent assurance report (→P.190)

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OUR VALUE CREATION

Feature: Response to Environmental and Social Issues

Material Balance of the Nippon Sanso Holdings Group Business Strategies to Realize a Carbon-Neutral Society 

The main products of the Nippon Sanso Holdings Group are oxygen, nitrogen, and argon. We manufacture these products using
air as the raw material, which we return mostly to the atmosphere. Since both the raw material and the finished product aregases, we generate little waste. Since the raw material is air, we do not need to procure any other raw materials. In other words,
the industrial gases business model of separating and selling air is a sustainable, resource-recycling business that consumes
essentially no raw materials and generates no waste.

To realize a carbon-neutral society, we believe it will be necessary to use technologies extended from current ones, completely
new technologies, or a combination of both.
Moreover, to realize this new society will require not only the effort of the Group but also proactive collaboration withcompanies and ­universities that is be expected to produce synergies.

*1 GHG emission reduction contribution for products and services
is calculated in accordance with the Guidelines for Quantifying
GHG Emission Reductions of Goods or Services through Global
Value Chain (Ministry of Economy, Trade and Industry)*2 GHG emission reduction contribution from the use ofindustrial gases*3 GHG reduction contribution through industrial gases includes
the reduction contribution of consolidated subsidiaries in Japanand certain affiliated companies.
*4 For details of the reporting boundary and method of calculation, please refer to P.189: “Calculation Methods for GHG
Emission Reduction Contribution.”

GHG Emission Reduction Contribution

5,066 thousand tonnes CO2e

Total GHG Emissions

5,651 thousand tonnes CO2e

Reduction Contribution Details*4
Products and services*1
2,892 kilotonnes CO2e

Industrial gases*2, *3
2,174 kilotonnes CO2e

Expected Corporate ValueIn Response to the Global Trend toward a Carbon-Neutral Society

Contributing to the Realization of Carbon Neutrality by 2050
Major Issues for Our Group (Areas in which our Group is actively involved)

Indicators with mark have been assured by KPMG AZSA
Sustainability Co., Ltd.

Development and production

Electricity 9,582 GWhHeat 738 TJ

IN

Fuels 9,520 TJ

Gas filling
stations

Water 43.35 million m3
Suppliedin cylinders

Diesel oil/gasoline
12 thousand kL

OxygenXenon

Krypton

Xe

Kr

O2

Carbondioxide gas

HydrogenHelium

CO2

H2

He

Gas production
facilities

OUT

Supplied bytanker trucks

Suppliedby pipeline

Supply

OUT

IN

Argon

OxygenN2

ArO2

LP gasElectronicmaterials
gases

Nitrogen

OxygenNitrogen

Argon

O2

N2

Ar

CO2 5,613 thousand
tonnes CO2e
Water 29.50 million m3

CO2 32 thousand
tonnes CO2e

Nitrogen

Argon

Hydrogen

N2

Ar

H2

CarbonmonoxideCO

GHG Emissions Generated by Our Business
Activities• The majority of the Group’s GHG emissions are accounted
for by electricity consumed by industrial gas production
facilities, including emissions from the transportation ofvehicles supplied with bulk and packaged supplies.
• DX will be used to reduce power consumption and improvetransport efficiency.

Efficiency
improvement inproduction andlogistics

Further pursuitin combustion
efficiency

Promotion of
initiatives
in CCUS*2

Global HyCO
team is actively
working on new
initiatives andopportunities

Taking inventory
regarding in-housecarbon neutral
relatedtechnologies

GHG Emissions Generated by Customers’
Manufacturing Activities• Customers’ GHG emissions can be expected to contribute tocontrol and reduction through the effective use of our gas
utilization technologies and industrial gases.
• We can expect to use DX to solve customer problems andimprove productivity with our gas utilization technology.

Liquefied gases are transported from production facilities bytanker truck to filling stations, where vaporized gases arecompressed into cylinders.

Shift power
consumption tomore renewable
resources to become
more Green*1

Sales
Electricity 10 GWh
Fuels 15 TJ

IN

Diesel oil/gasoline
0.2 thousand kL

OUT
Sites

CO2 6 thousand tonnes CO2eService vehicles

Industrial Reform of Next-Generation Energy
In order to reduce GHG emissions from the use of existingenergy sources such as coal, oil, and natural gas, there
is a need to reform industries toward the spread ofnext-generation energy.

Use
Customers• Steelmaking/• Glass/papermaking
non-ferrous metals• Healthcare• Electronics• Food• Petroleum/chemicals• Others• Automobiles/machinery

Industrial gases are used in a broad range
of industries, from healthcare and foodto petroleum/chemicals and electronics.

NIPPON SANSO HOLDINGS CORPORATION

68* Boundary of IN/OUT data aggregation
Development and production: Main consolidated subsidiaries
Supply: Truck fuel, etc., used by main consolidated subsidiaries(excluding the United States) (excluding transportation contractors)
Sales: Domestic consolidated subsidiaries(See Sustainability Data on P.183 for more on main consolidated
subsidiaries.)

INTEGRATED REPORT 2021

*1 more Green: A method to utilize a mechanism to trade the environmental added value of electricity generated by renewable energy through a review of contracts and a system
in which a certificate issuing company obtains certification from a third-party certification organization, etc.
*2 CCUS: Carbon capture, utilization, and storage.

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OUR VALUE CREATION

Feature: Response to Environmental and Social Issues

U.S. HyCO Business Strengthens Ties with Nippon Gases Euro-Holding S.L.U. 

Business Opportunities for Realizing a Carbon-Neutral Society 
Evaluation of Business Potential in Each Global Region
Efforts to realize a carbon-free society are linked to the industrial structure and economic policies, such as governments and politicaland economic alliances, of each country. Therefore, our business expectations differ in each global region.

EuropeAs companies focus their efforts to realize a carbon-neutral society, interest is growing in hydrogen as a next-generation energy
source that emits zero CO2 when consumed. Hydrogen is expected to be used effectively in industries that emit large amounts of
CO2, such as blast furnace steelmaking processes. Under the Ortus Stage 2 medium-term management plan, which concluded
in FYE 2021, Nippon Sanso Holdings expanded in the gas technology field through in the gas technology field through M&A,
pursuing a key strategy of innovation. In 2019, the company acquired the U.S. HyCO business of Germany’s Linde AG. As aresult, we were able to incorporate into the Group a business that produces and supplies large volumes of hydrogen (H2) andcarbon monoxide (CO) at a certain scale on-site. This acquisition has led to an expansion in our product lineup.

United States

European
operatingcompanies

Business Model of the HyCO BusinessJapan

Separate hydrogen and carbon monoxide from feedstock such as natural gas using steam methane reforming (SMR) systems and supply it
to the petroleum refining and petrochemical industries through pipelines, primarily for use in the desulfurization process.
Asia and Oceania

SMR-type
HyCO plants
H2/CO

Naturalgas, etc.
In line with the European Green Deal, the European New Industrial Strategy, and the New Recycling-Oriented Economic Action Program*,efforts and momentum to decarbonize in Europe are accelerating. Our Group views this trend as a new opportunity, and has establisheda project to share the characteristics and strengths of each geographic hub in this field with each other and pursue business possibilities.
For example, we are responding to the demands of society by combining technologies, knowledge, and experience within the Groupto meet the needs of society, such as the possibility of further utilizing hydrogen additives, fuels, and energy when making steel, and theneed for proposals to solve decarbonization issues at customers’ sites.
* (Reference) A European Green Deal (European Commission website); https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en
Source (in Japanese); JETRO “Outline of European Green Deal and Rules Formulation and Corporate Activities of the European Union and Member Countries Concerning RecyclingOriented Plastics Strategies (March 2020)” https://www.jetro.go.jp/world/reports/2020/01/a4731e6fb00a9859.html

Our Group’s Solutions That We Expect to Contribute to a Carbon-Neutral Society
Our Contribution Technology (Gas Application and Gas Engineering)Japan

Joint project to develop renewable energy offshore hydrogen production and supply infrastructurePrimarily petroleum refining andpetrochemical industries

Supplied via pipeline(Conclude long-term supply contract)

On-site gas users(Large usage volume)

In Japan, users in the petroleum refining and petrochemical industries internally produce and consume hydrogen and carbon monoxide.
Considering this business structure, industrial gas manufacturers have not entered this business.

Global HyCO
Since shifting to a holding company structure in October 2020, we have focused on hydrogen to strengthen our comprehensive
capabilities. Hydrogen offers a high potential to contribute to a carbon-neutral society, and the global HyCO team of Matheson
Tri-Gas, Inc. has taken the lead in exploring business opportunities for the HyCO business. Societies in Europe are expressing an
increasing desire to shift to hydrogen. Here, the engineering division of Nippon Gases Euro-Holding S.L.U. and the HyCO team of
the United States are working together to evaluate the viability of businesses related to new, lower environmental-impact frameworks that combine methods for the economical mass production of hydrogen developed in the HyCO business with CCUS. The
companies are also engaged in technical research, including joint projects with outside entities, to discover other potential applications for this business.

United States

Japan

Ammonia mixture burnerUnited States

HyCO business (Hydrogen production and supply)Japan

Ammonia combustion technology contributes to CO2 emission
reduction in industrial furnaces

MarketingGlobal HyCO

Sales Promotion

Engineering

Asia and
Oceania

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EuropeOUR VALUE CREATION

Human Resources Strategy

Securing and developing human resources is essential for the sustainable growth of a company. It is theGroup’s approximately 20,000 individual employees worldwide who support our social mission of reliably
supplying industrial gases and proposing comfortable lifestyles. The concept behind our Group Vision,“enhance human well-being and contribute to a more sustainable future,” is the same for our regional
industrial gases operating companies and for the Thermos business. By promoting the development of
human resources sharing the same aspiration, we aim to promote the development of the Nippon Sanso
Holdings Group together.

Message from
Head of the HR Division
Satoshi Wataru
Senior Executive Officer ofGroup Human Resources & Corporate Secretariat Office,General Manager of Human Resources andChief Health Officer (CHO)
Nippon Sanso Holdings Corporation(Additionally appointed as General Manager of
Human Resources and Head of Corporate Unit,
Member of the Board, Senior Executive Officer,
Taiyo Nippon Sanso Corporation)

Nippon Sanso Holdings’ Philosophy and Vision“The Gas Professionals”
Increasing engagement by sharing and understanding the Philosophy and Vision

Taiyo Nippon Sanso
Corporation Group

Matheson Tri-Gas, Inc.
Group

Nippon Gases EuroHolding S.L.U. GroupOperating company groups
in Asia and Oceania

Thermos K.K. Group

Human resource exchanges and promotion of best practices
Basic values of health, integrity, and resourcefulness
HealthIntegrity

Resourcefulness

Understands the Importance of Occupational
Health and Safety: Looks after their own healthand helps create positive working environments

Earns Customer Trust: Exhibits a dedication
to reliable supply and quality assurance andresponds with sincerity

Displays a Positive Attitude: Has a positive
attitude and sees projects and work through tocompletion

Exhibits a Well-Formed Character: Maintains
an agreeable temperament and promotes mutual
trust and respect

Demonstrates Organizational Capabilities:
Uses communication to overcome limited personnel levels and maximize teamwork

Endeavors to Fulfill Responsibility to Society:
Works to comply with safety, security, and environmental standards, as well as with social norms

Knows the Customer: Responds to customers’
expectations and interests
Knows Himself/Herself: Works to realize personalgoals and acquire knowledge and skills crucial to aprofessional and strives to act independently
Knows Society: Strives to be open, grasp changes,
and looks to the future

The Nippon Sanso Holdings Group Philosophy has the tagline “The Gas Professionals.” To nurture such professionals with a senseof mission and a desire to contribute to society and the world, it is important to focus on the qualities of health, integrity, andresourcefulness. These values have been inherited by the Company from the time of its predecessor, the former Taiyo Nippon
Sanso Corporation. They are shared by all Group companies, including Thermos, which operate globally. Each operatingcompany will focus on the essential qualities of health, integrity, and resourcefulness making reference to its own unique values
as well, and modifying them into a concept that is easy to understand, which it will promote internally.

Global Human Resources Development Strategy Having changed its structure on October 1, 2020, Nippon Sanso

customs and a respectful attitude toward their colleagues. In addition,

Holdings is now changing the main fields of its activity to make them

they must focus on increasing the value of the Company over the longmore global. Right now, nearly 70% of the Group’s consolidated

term, while building lasting, deep relationships with customers andemployees are non-Japanese, and we are continuing to grow into asociety in any country and area. With a view to developing such global

multinational organization. Therefore, one of our management priorities

human resources, we will take into account each operating company’s

is to develop global human resources who will be responsible for theindividual characteristics to enable employees to share and relate to ourGroup’s future. The kind of global human resources that the Group aims

Group Philosophy and Vision.

to develop will have experience in different countries, but it is also impor-P lease see P.10 for data on the percentage of non-Japaneseemployees and the number of overseas Group companies, etc.

tant for them to have understanding toward diverse cultures and

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Basic Approach
In June 2021, roughly six months after we launched the holding company, we inaugurated a new management structure.
At the time, the Company had been at the mercy of COVID19 for about a year, but it made me consider how theGroup’s industrial gases business contributes to society.
As suppliers of life-saving oxygen, fire-preventing nitrogen,packaging gas for extending the freshness of food, andother gases for various uses, Group employees around theworld performed the roles of essential workers in theirrespective departments, continuing to provide a reliablesupply of products. Aside from COVID-19, disasters due
to climate change and other factors are on the rise aroundthe world. For the Group to carry out its important social
responsibilities in this situation, it is vital to have humanresources who have integrity. With integrity providing afoundation, the Group will work toward realizing a comfortable future for people, society, and the earth. To this end, I
believe it is essential that we secure, develop, and circulate
human resources who are able to accept different regional
values, customs, and cultures, as well as diversity in terms ofgender, race, and so forth.

I believe that this applies to Thermos K.K. as well,
despite having a different business format. Thermos takes asensitive approach to consumers and proposes environmentally friendly lifestyles in a way that could bring fresh values
to the Group from the perspective of the SDGs. I believethat the Group needs to go further than sharing best practices by promoting real personnel exchanges as well.
Work Styles
Another important priority from the perspective of securing
diversity and promoting active roles for women is to enhance
our systems for creating comfortable working environments.
Within the Group, the respective ratios of female employees
overall and in managerial positions are high in Europe,
Southeast Asia, and the Thermos business, and low in Japanand the United States. I believe that we need to create environments where people of all genders can develop their fullpotential, and to promote education that increases mutual
understanding between team members working together.
From a separate perspective, some issues also came tolight when people were remote working during the COVID-19
pandemic. The issues varied by region and age group, forexample, inability to concentrate on work at home, or conversely, concentrating too hard and over working, mental
discomfort due to not being able to meet and speak withpeople directly, and difficulty with communicating technicalexpertise. The solutions to such issues are not simple, but I
believe the key is to share best practices between operatingcompanies to review work styles, and incorporate measuresthat suit the various situations in each company and area.
The Group has highly talented human resources all over
the world. I am confident that all Group employees willcommit themselves deeply to the Company’s Vision andMission, respect one another, and take pride in the
Company’s business.

Human Resource Exchanges
Personnel exchanges are known to be an extremely
effective means of encouraging innovation and increasing
work productivity. The Group has already been promoting
initiatives to enhance its comprehensive capabilities by sharing the points where each operating company excels, andthis is starting to produce significant productivity gains.
Within Nippon Sanso Holdings, the appointment of AlanDavid Draper as CFO has brought a real transformation in
our approach to working and our values. Similarly, ToshihikoHamada as our newly appointed President CEO has bought aclear understanding of the importance of diversity from his
experience working overseas in the United States twice andas president of a subsidiary. He believes that we should
aggressively promote human resource exchanges.

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OUR VALUE CREATION

Creating a Workplace Environment through Training forYoung Employees and Health and Productivity Management 

Human Resources Development
at Four Geographic Hubs + Thermos Business

Human Resources Development Strategy
in Japan
The Group’s operating company in Japan, Taiyo Nippon Sanso Corporation, has prepared education and training programs for thegrowth of employees, starting with basic training for young employees over a five-year period after joining the Company. Basedon the ideals of health, integrity, and resourcefulness, we aim to develop human resources who can think and speak out on theirown initiative about how to safely and securely provide products and services needed by society. In addition, as we continue developing human resources with a global perspective, we will also promote sharing of human resources between Group companies inJapan, and concentrate on creating structures and systems that will enable diverse employees to play their roles with enthusiasm,
with the most suitable people assigned to each position.
Taiyo Nippon Sanso Corporation Employee Training Framework

Fourth year of
employment

Finance training

Third year of
employment

Training in logical thinking

Second year of
employment

Followership training

New recruit

Training for new recruits

Life planning seminars

Taiyo Nippon Sanso Corporation

INTEGRATED REPORT 2021

rather than focusing inside
Japan. To help cultivate thisawareness, the Company
has implemented training
for global human resources
and the Overseas Trainee
Program, and will continue
these efforts going forward.

Global employee selective training

Comments from Employees

Corporate Unit, HR Division,74

For data regarding users of our various systems for creating comfortableworking environments and related information, please refer to P.172.

Taiyo Nippon Sanso Corporation has always placed emphasis
on initiatives to develop professional human resources thatare able to work with a global perspective, whether in Japanor overseas. Currently, we have stationed or assigned a wide
range of employees of all ages, ranks, and job types, mainlyin Southeast Asia, China, and North America. Under theholding company structure, Taiyo Nippon Sanso Corporationis the operating company for Japan, but looking at supply
chain expansion and ESG, it is becoming increasingly important that each employee acts from a global perspective

Chihiro Takai

NIPPON SANSO HOLDINGS CORPORATION

enhancing individual capabilities, increasing productivity,
and raising corporate value.
We have therefore beenpromoting health management, which realizes mental
and physical health with a
New recruit training for the first year after
joining the Company
view to being a company
where all employees can work with enthusiasm, and workstyle reforms, aimed a realizing working environments thatare comfortable to all of our diverse employees.

Efforts to Develop Globally Competent Human Resources Specialist education for each unit

Strategy and marketing
training

TNSC Technical Seminars(organized by the Technological Education Team)

Fifth year of
employment

Theme-specific

Mentorship training

Training for new seniorstaff leaders

Training for line managers

Correspondence courses(50% of fees are paid by the Company)

Training for new middle
management

Seminars conducted by third parties(full fees for the seminars are paid by the Company)

Middlemanagement

Training for new
corporate officers

Optional

Overseas
Trainee Program

Senior middle
management

Selective

Training for
global humanresources

Hierarchical

Taiyo Nippon Sanso Corporation has a distinctive training
system that provides training to young employees, startingwith a three-month training for new recruits and followed byannual 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. Bylearning the skills that they need to function as employees in
a company, employees advance through friendly competition
and grow, developing a spirit of cooperation that builds
better teamwork.
In addition, we believe that consideration for employees’
work styles and health is part of a management strategy for

I learned that industrial gases are used in all kinds of areas of daily life that I hadn’t
known existed, which stimulated my interest in the company. Then, through myconversations with other employees I was able to get a feel for the corporate culture,
which made me feel confident about joining the company. Currently, I am allowed
to work fewer hours after the childbirth leave and childcare leave systems. This has
given me a real appreciation of the difficulty of balancing work and home life.
Looking forward, I hope to help make our company one where men and women at
any location throughout Japan are more able to focus on their home life, childcare,and hobbies as well as their duties. To this end, while I work in the HR Division, I hope
to continue being involved in creating systems that value work–life balance. I believethat “The Gas Professionals” in the HR Division are people who can be trusted byother employees, who are approachable and build relationships. It is my aim to
fulfill this role as I continue my work here.

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Human Resources Development
at Four Geographic Hubs + Thermos Business

Strengthening the Development of the Next Generation of Leaders 

Human Resources Development Strategy
in Asia and Oceania
In the Asia and Oceania region, Nippon Sanso Holdings
Singapore Pte. Ltd. (NSHS) represents the Group in the areaaround Southeast Asia and will promote human resources
development initiatives among all of the operating companies. At NSHS, the management team and the persons
responsible for personnel at each of the operating companies
in Asia have jointly formulated a Vision, Mission, Values, andMotto, these four elements forming a common awarenessthat is constantly shared between them. They will continuously promote stronger cooperation within the region by
integrating the personnel development policy from the perspectives of demonstrating leadership, promoting humanresources development, engagement, and strengthening
regional networking and collaboration.
For the Value element among the four, we created theslogan, “ACTIVE,” making reference to the qualities ofhealth, integrity, and resourcefulness used in Japan. Our
Vision, Mission, Values, and Motto support a positive organizational culture, as this is an important factor for improving
employee productivity. By continuing to deeply entrenchthese shared values, we will be able to build a robust foundation to promote business growth in Asia. We will continue
to recruit and develop appropriate human resources whoshare the same values as the organization, aiming to develop
a rich pool of talent for “The Gas Professionals” across theentire region.

ACTIVE
Accountability:
Taking responsibility for one’s own actions andresults in all situations
Creativity:
Promoting change and innovation for continuous
improvement
Teamwork:
Encouraging collaboration within and between teams
in order to achieve shared business goals
Integrity:
Doing the right thing the right way, even when
nobody is watching
Vibrancy:
Being active and full of vital energy

The greatest challenge for developing human resources in
Asia is in its cultural and economic diversity. The Asian market
is home to diverse cultures, and we must constantly pursue
the ability to formulate and execute appropriate strategies inorder to succeed in business there. In other words, our challenge is to develop outstanding talent and secure humanresources who have leadership qualities.

Employee Engagement Strategy 
In Asia, the companies are located in different countries,
and it has been difficult to bring them together as a single
region. NSHS has therefore launched the “Unity in Diversity”
campaign, a program that aims to increase engagement byintegrating employees from all areas online, with a secondary
purpose of increasing awareness of DX.
This initiative has been highly rated and has won awards in
Asia and Oceania. Receiving a regional award is recognitionof the design and development of the personnel programs
and initiatives in Asia, and also shows that NSHS is providing
highly reliably human resources development services

Excellence:
Pursuing a high standard of performancein all our activities

Human Resource & Admin
Nippon Sanso Holding Singapore Pte. Ltd.

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for employees of companies
in Asia.
Looking ahead, we plan
to conduct engagementawareness surveys and analyze the results, using theReceiving a silver award at
networks we have develHR Excellence Awards 2020
oped to establish a regionwide task force with the goal of further increasing
engagement.

Comments from Employees

Cheryl YongNIPPON SANSO HOLDINGS CORPORATIONNSHS has responded by stating a next-generation leader
development program from FYE2022. The program aims todevelop participants’ awareness of business strategy, engineering, safety, compliance, and global trends in personnel.
NSHS aims to develop leaders who will take responsibility forbusiness growth going forward. It will therefore work continuously and rapidly to strengthen and promote the development of and support the next generation of managers in Asia.

Since I joined the workforce, I always aspire to grow and develop my career in a
reputable Multi-National Corporation. Therefore, I jumped at the opportunity to join
Nippon Sanso Holding Singapore of the NSHD group companies because NSHD is
one of the world’s leading industrial gas and engineering companies, supporting awide range of industrial sectors. I feel very proud to be part of the team to contribute my expertise for the greater good of the community, as I am fully subscribed to
NSHD’s corporate resolve in the creation of social value by conducting business withintegrity, focus on enhancing human well-being and contribution in sustainable
future. In NSHD, I aspire to grow and develop myself into a true-blue HR professional who is able to bring out the best for our Gas Professionals. To me, “The Gas
Professionals” means that I must be able to provide outstanding HR services andmanage talent strategically through a diverse and all-inclusive work environment sothat my company can continue its contribution for the development of all industries
and creation of social values with the solution for social issues.

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OUR VALUE CREATION

Human Resources Development
at Four Geographic Hubs + Thermos Business

Human Resources Development Strategy
in the United States

Human Resources Development Strategy
in Europe

At Matheson Tri-Gas, Inc. (MTG), the company’s core values are memorialized in the acronym TIDES and serves as a standardof conduct for employees. TIDES stands for Teamwork (Work together in the best interest of the greater Organization to deliver
business strategies.); Integrity (Treat Teammates and Customers with honesty and fairness and deliver on commitments);
Drive (Set aggressive goals and pursue them relentlessly without compromising Safety, Quality, or Ethics); Empowerment (Give
Teammates training and authority to make decisions and hold them accountable for results); and Speed (Work with a sense ofurgency in decision-making and execution to gain a competitive advantage without compromising Safety, Quality, or Ethics).
The company uses these core values to guide its human resources development.

Nippon Gases Euro-Holding S.L.U. (NGE) has adopted safety, compliance, and diversity and inclusion as its conduct guidelines. To
realize this, employees are required to have an attitude of high integrity, sustainability, and customer focus. In addition, they are
required to make innovation through DX, leadership, trust, and respect. The NGE group’s companies operate in 13 countries andregions and all of their employees aim to prioritize safety, observe compliance, and respect diversity.

Measures to Realize TIDES 

Conducting Various Successor Development Programs 

At MTG, we promote our human resources strategy with thefollowing three perspectives. From the perspective of being apreferred employer among job seekers, we introduced measures to improve the overall experience of our employees,
such as offering an expanded scholarship program for our
employees’ children. From the perspective of continuing toretain high human resource capabilities, we seek to identify
career paths for human resources with high potential andmotivate management to create diverse teams whose members challenge and complement each other. We also provide
training such as seminars on wellness and financial planning.
From the perspective of a human resources team itself,
human resources lead by example by creating a diverse teamof human resources professionals and also promoting digitalization of personnel management following the example of
the Group’s European companies.

NGE operates a range of programs, such as Growing Our
Leadership (GOL) and programs that provide support in
the development of women and address the SDGs. These
programs are centrally managed by NGE’s digital humanresources tool, People-Hub. In addition to training programs,
People-Hub also has functions for assisting recruitment,

Comments from Employees

Jeremy Holden
Legal

I joined Matheson for the opportunity to work on a variety of challenging projects,
and be part of an internationally respected company where I could have a meaningful impact on the company’s success. It is exciting to be part of a company that is
expanding and looking for additional opportunities in new and existing markets. I
believe that as an innovative leader in our markets, with a clear Group Vision, NSHD
will positively impact the industries and customers it serves, and create greater
opportunities for its employees. In my role, I am responsible for understanding thelaw and how it can be used to help the company achieve its goals, while minimizing
risk. Professionally, I would like to expand these skills to support other NSHD companies internationally. “The Gas Professionals” means having a complete understanding of our products and our customers’ needs; then working together,regardless of our job, to develop and implement a solution to address those needs.

Matheson Tri-Gas, Inc.

talent management, succession planning and the processesof on-boarding. NGE is currently facing the issue of an aging
workforce. To avoid losing veteran skills due to retirement,
we are planning to develop a knowledge transfer functionin People-Hub.

Comments from Employees
I joined Nippon Gases just before the pandemic, in January 2020, and since thenit has been an amazing journey! What captured my attention was being part of ateam that has the opportunity to build the culture and HR processes of the company.
I find it fascinating to see how my work affects the company as a whole. During thistime I have grown a lot professionally due to the variety of my work and the constant support of my team and colleagues. I was heard and trusted from day 1 andthat keeps me motivated to always give the best of me. I am excited to see what isnext for me as part of this amazing and inspiring group “The Gas Professionals”!

Laura Sigüenza
Human Resources
Nippon Gases Euro-Holding S.L.U.

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OUR VALUE CREATION

Results of Employee Survey

Human Resources Development
at Four Geographic Hubs + Thermos Business

Human Resources Development Strategy
in Thermos
We have formulated the corporate philosophy, “Thermos continues to introduce new kinds of lifestyles that are agreeable topeople and society and also environmentally friendly,” and the brand charter, which sets out the mission of Thermos, the idealfor our employees, and our approach to customers. The brand charter is included in the Thermos Handbook issued to all employees, and is circulated among them as the values that they all share. From FYE2022, we have added our management vision,“To grow sustainably and become a value-creating company that is trusted by all.” As a company that contributes to customers’
healthy living and the earth’s environment, we will promote the development of human resources who embody our corporate
philosophy, brand charter, and management vision.

In creating this report, we conducted an employee survey andreceived a large amount of feedback from employees in Japan,
the United States, Europe, and Asia and Oceania. The following
is an extract of the free responses received.

How much do the Nippon Sanso Holdings Group Philosophy and Vision resonate with you?

1

Developing and Strengthening Human Resources under the Next Medium-Term Management Plan 
Developing and strengthening human resources is one of thepriorities in our next medium-term management plan. We
will implement measures to promote active roles for women,
employment of people with disabilities, and work-stylereforms through remote working, staggered shifts, andenhanced systems for supporting childcare. We will also bolster education and training, encourage job promotions andtransfers that are less influenced by long service, and implement measures and activities to maintain motivation among
mandatory retirees. Finally, we will adopt IT for personnelrelated operations and information. We will also look at revising personnel systems as well as proposing and establishing
new personnel systems.

Comments from Employees
I decided to join the company, whose products I have loved for many years since mychildhood, with a desire to widely promote the products, which are closely involvedin everyday life, and provide people with comfort. Also, my senior colleagues are all
extremely kind and the workplace has a welcoming atmosphere, which is anotherreason that I decided to join. I hope that Thermos K.K. will continue to produce
innovative, surprising products that inspire a lot of people. Looking ahead, I intend
to acquire more specialized skills and get involved in a wide range of operations,such as new graduate recruitment. I am determined to become someone who can
support the company.

Yuki Kondo

What do you think is the advantage of your company?

23Administration Division, Human Resources andGeneral Affairs Office,Human Resources and General Affairs Section
Thermos K.K.

4
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I think the Vision is extremely good, and I like it. And, I hope that with my small power, I can contribute as much as possible to making the big
world a better place. (China/Sales/Manager or higher) / I think that the Vision should include safety and the environment. (Sweden/Sales/
Manager or higher) / The Philosophy and Vision are great, but in my workplace where we produce the same thing every day, it can be difficult toremember them. (United States/Production and Distribution/Manager or higher) / I think it would be better to have a discussion about how weinterpret the Vision and what kind of action is expected of us so that we can understand it more deeply and put it into action. (Japan/Sales/
Manager or higher) / I think the Vision and Philosophy are fine, but we need a plan about how to achieve them. (United States/R&D/Manager orhigher) / The important thing is to incorporate the Philosophy and Vision into the business strategy and human resources evaluation system. I
think this would increase employee engagement and contribute to increasing business performance. (Japan/Sales/Manager or higher) / The mostdifficult part of the Philosophy to achieve is “Innovative.” My view is that we need to powerfully drive continuous R&D and share knowledge
regarding application technologies and solutions. (Singapore/Production and Distribution/ Manager or higher) / I would like you to use languagethat clarifies that we are pouring our passion into the gas business. (Germany/Production and Distribution/Manager or higher)

We focus on sound finances and eliminating unnecessary processes (Italy/Other/Non-Manager) / I think our strengths are that while supportingsocial infrastructure, we also develop new gas applications, and we are growing steadily, if not rapidly. (Japan/Sales/Non-Manager) / Low attrition
rate and continuous growth (United States/Sales/Non-Manager) / We analyze our competitors and come up with appropriate strategies(Vietnam/Back office/Non-Manager) / Employees who have individuality (Japan/Sales/Manager or higher) / Safety first (United States/Production
and Distribution/Manager or higher) / We have excellent quality and rigorous management, we treat customers responsibly and never deceive
them. (China/Sales/Manager or higher) / We are second to none for customer satisfaction. (United States/Sales/Non-Manager) / We are the firstindustrial gases manufacturer in Myanmar. (Myanmar/Back office/Manager or higher) / Ultimately, we have great technological capability. (Japan/
Back office/Non-Manager) / We aren’t No. 1, but I feel we can offer better service to customers than any other company in the world. (UnitedStates/Production and Distribution/Non-Manager) / One of the factors that makes us different from other competitors is that Nippon Gases can
supply 100% renewable energy. (Spain/Other/Non-Manager) / My colleagues and boss are all kind, and we talk freely about issues when theyarise so that we can find a solution. It’s not political. (Singapore/Back office/Manager or higher) / We are a popular company with the local
community. (Japan/Sales/Non-Manager)

How proud are you to work at a Nippon Sanso Holdings Group company?
I am very proud to be able to work as a member of the Group and contribute. (Vietnam/Sales/Non-Manager) / This business is difficult todifferentiate from other companies, but we manufacture a high-quality product with a sense of pride that it is as good as any. (Japan/Production
and Distribution/Non-Manager) / My leader is honest, kind, and skillful. I am proud of them. (China/Sales/Manager or higher) / I feel a strong
affinity with Japanese culture, so I am proud to be a member of a Japanese company and share its values. (Belgium/Production and Supply/Manager or higher) / I am proud because the industrial gases business is extremely important for global needs, in particular oxygen supply
during the COVID-19 pandemic. (Singapore/Engineering/Non-Manager) / I feel very fulfilled but I think that we should be more proactively
communicative (responsive) to changes occurring in the world. (Japan/Back office/Manager or higher) / Matheson Tri-Gas is my second family
and my home. I am very proud to work at this company. (United States/Sales/Manager or higher) / I have worked here for about 20 years and I
feel love and trust for my company. I hope earnestly for the company’s continued growth in global society. (Thailand/Sales/Manager or higher)

Please comment on what “The Gas Professionals” means to you.
That we are a professional group producing, storing, and supplying all kinds of gases, and that we have the inspiration and technology to create
the future. (Japan/R&D/Manager or higher) / That we exceed customers’ expectations (United States/Production and Supply/Manager or higher) /People united in spirit who will play a part in resolving social issues. (China/R&D/Manager or higher) / It means that we work in the Nippon
Sanso Holdings team, with colleagues who are highly experienced and motivated. (Germany/Manager or higher) / Experienced, friendly, andhard-working people striving to create a better world through gas technology. (United States/Back office/Manager or higher) / Performing as weare expected to do as part of infrastructure. (Japan/Production and Distribution/Manager or higher) / Not compromising on safety or quality.
(Malaysia/Back office/Manager or higher) / Contributing to the local community through the power of love for the company. (Japan/Sales/
Non-Manager) / Passionately continuing to accumulate experience. (Taiwan/Back office/Manager or higher) / Matheson Tri-Gas (United States/
Customer service/Non-Manager) / Safety, experience, and reliability (Italy/Other/Non-Manager)

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Roundtable Discussion (3)Aiming to be a preferredchoice for job seekers anda company with highly
engaged employees
In Japan, I feel that there arefew employees that take initiative to
identify and solve problems or inefficiencies on their own. We have usedvarious approaches such as training toaddress this issue, but the best
approach for developing high-level
talent remains our biggest challenge.
On the other hand, the style of employment in Japan is based on the conceptof membership, and we have systems inplace that can develop new employees
from scratch. As such, in terms ofrecruitment, I don’t feel this is muchof an issue for us, including the combined use of mid-career recruitment.
What type of issues do each of you
have in your respective areas, andwhat kinds of measures are you taking
to address them?
DE RAEDT At Nippon Gases EuroHolding S.L.U. (NGE), our biggest
WATARU

challenge is the aging of our workforce.
Currently, there are approximately
3,000 employees in Europe, and 14%of these will reach mandatory retirement age within five years. This 14%
is an extremely high ratio, and we are
hard pressed to fill vacated positions
quickly and adequately. To address thisissue, I would like to introduce with thehelp of IT a database that gathers various knowledge and information, sothat we can transfer the accumulated
expertise of our leaders to our young
employees. We are also considering the
introduction of a contract system thatwould enable retired employees tosupport younger staff members. By
creating these kinds of systems, we
aim to create a workplace where all
employees can work comfortably
and engaged for a long time.
MOLNAR In the United States, ourorganization has grown rapidly in size
over the past 15 years, and our main
challenges are securing and retaining
high-quality human resources, developing the next generation of managers,

standardizing business processes andintegrating cultures, including for integrated companies, and compliance. To
address these challenges, we are implementing three main strategies. The firstis to be a company that job seekers willcontinue to choose for a long time, notonly by offering career advancement
but also by increasing employee satisfaction with workplace environments
and well-being. The second is to proactively advance employees in order to lift
their level of engagement. And thethird is to create teams with diversity.
The human resources team that I
belong to is truly an example of this.
In fact, we benefit from the presenceof colleagues from many different
racial backgrounds—75% of whom
are women—thus making us the mostdiverse team within Matheson Tri-Gas,
Inc. We are also seeking better, systemic methods of personnel management. In this regard, we have begun
implementing the same humanresources management system as
the European human resources team.

Human Resources Required by
the Nippon Sanso Holdings GroupThe Nippon Sanso Holdings Group comprises operating companies
in Japan, Europe, the United States, and Asia and Oceania, as well as
the Thermos business, all with different corporate cultures. To grow evenfurther as a global corporate group, how should we secure and develop
the human resources that will support the Group going forward?
Senior Executive Officer Satoshi Wataru, Executive General Managerof the HR Division, and the persons responsible for human resourcesin each operating company explore this question.

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Our mission
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PAULINE The Asia and Oceania regionis characterized by a large number ofdeveloping markets, and the competition for talent is extremely intense. We
face a constant challenge of how to
attract and retain talent. Moreover,since we have business operations invarious countries, there are different
cultures embedded in each country andthis makes it extremely difficult to try
and raise the level of employee engagement across the entire region. At
Nippon Sanso Holdings Singapore Pte.
Ltd. (NSHS), we conducted gap analysis
together with the top management
and the leadership team. This gap­analysis revealed that there was very
little connection and synergy among
employees across different businesssites. As such, in around 2019 westarted promoting DX initiatives andholding online webinars that wereopen for participation by all employees
across different business sites. This
created an opportunity for diverse
members from different business sites
to come together to learn, examine,and discuss emerging global businessthemes affecting the company as awhole. I consider this to be an important initiative for raising the level of
employee engagement.
KOIZUMI The foremost challenge for
the Thermos group is the issue of diversity. We have a low level of diversity inregard to gender, nationality, and racial
background, and we need to increase
it. We also need to develop female
leaders. Another area that needs to beaddressed is our shortage of humanresources with professional skills who
can operate in a global context. In lightof these challenges, we are about toreview our existing human resources
system, evaluation system, and so forthwith a view to expanding internal
human resources development programs and attracting diverse humanresources. The Thermos group is amultinational corporation, andThermos K.K., where I work, functions
as the headquarters for our subsidiarycompanies. We at the headquarters
form the core of the group, and havean extremely challenging task of­figuring out how to manage humanresources operating all over the world.
I believe that we must find the solution
through strong leadership.
WATARU Thank you for that. In order
to be a “preferred employer,” as you
have all mentioned, I think that it will
become important to have somethingthat motivates both existing employees
and new young recruits. I feel that
there has been extremely strong interest in the recruitment scene regarding
ESG initiatives, such as a commitment
to environmental issues. Currently, at
Nippon Sanso Holdings we are proceeding with discussions regarding thenext medium-term management plan,and I think that we need to incorporate
ESG perspectives, such as setting nonfinancial KPIs in our human resources
development strategy and linking themto employee compensation, for example. What are you doing in this regard
in Europe?
DE RAEDT In Europe, right now wehave three KPIs related to humanresources in our sustainability strategy.
The first is to achieve a 5% yearly
increase in the number of internships
and trainees. Young people bring a
new wind, ideas, and initiatives to anorga­nization. The second is to promote
employees’ social contribution activities. We support this in the regions
where we have a presence in local

NIPPON SANSO HOLDINGS CORPORATION

83

communities and initiatives as muchas possible. The engagement level ofparticipants here is extremely high. And
the third is to increase diversity, mainlyin the ratio of female employees to
30% by 2025. Mainly due to historicalreasons (we are a stable company with
low turnover and long history), this issomething we can improve. We have torethink our total remuneration strategy,
as young employees seem to have astronger interest in work–life balance,development initiatives, and social
engagement than in compensation.
The compensation part is also important, of course, but there is extremely
strong interest in the nature of ourhuman resources development plans,social responsibility, and in sustainability
and the SDGs. I think that setting andimplementing non-financial KPIs will
create a strong advantage in terms of
securing human resources.

Proactively driving diversity
and inclusion
WATARU The issue of diversity seems
to have appeared in what all of you
have said so far. This is also a significant
issue for us in Nippon Sanso Holdings
Corporation. In Japan, we conduct
recruitment targeting a 30% ratio of
female recruits. However, it takes time
to develop personnel for management
positions. Mr. De Raedt, could you tell
us about some of the cutting-edge
programs for developing female
employees that you are implementing
in Europe?

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OUR VALUE CREATION

Roundtable Discussion (3)Human Resources Required by the Nippon Sanso Holdings GroupAt NGE, we have beenworking on the issue of gender diversity since 2010, and we are targeting
a 30% ratio of female employees by2025. In 2010, the ratio was just 14%,
but today it has risen to 27%. For
example, if we are hiring for a position,
we try to ensure that one of the people
on the short list is female. We are
extremely mindful of ensuring that men
and women are treated equally in theareas of pay and performance reviews.
Through initiatives like these, we haveincorporated a diversity and inclusion
perspective in all of our processes. As
a result, the ratio of women in middlemanagement positions has increased,
and our employees also feel a senseof diversity in the workplace. As a next
step, we started a sponsor program for
women in October 2020, aiming toenable them to advance to upper-tierpositions. We assigned directors andexecutive officers to act as sponsors foreach of 15 promising female employees. The sponsors talk directly withthem about their knowledge and­experiences in management to inspirethem to further advance their skills
going forward. In the nine months
since this program started, several of
DE RAEDT

these 15 employees are already about
to advance into more senior roles. I
think that this shows how extremely
important it is to incorporate diversity
into all processes involved in recruitment and development.
WATARU Thank you for your valuableadvice. In addition to Europe, there isalso a relatively high ratio of female
employees in the Asia and Oceania
region, particularly in the Philippines
and Vietnam, and there are many casesof women working as managers. Whatis the reason behind this trend?
PAULINE Well, the reason for thehigh ratio of female employees in thePhilippines and Vietnam is that management has promoted diversity andinclusion, and also that women makeup a significant ratio of the working
populations in these countries. In orderto promote cross-cultural awarenessand team cohesion, we started a Unity
in Diversity campaign in the Asia andOceania region. At the start of the
program in 2018, the main focus of
the program was to promote mutual
understanding of different cultures inthis region. Going forward, as part ofcontinuous improvement to enhance
the program, we will be looking topromoting an age-friendly workplaceof the future that is not bound to theconcept of age seniority, as well as
increasing women’s empowerment.
In this way, I hope to further promote
diversity and inclusion in this region,
while realizing conducive working environments that are comfortable forwomen as well.

Expanding support for health,integrity, and resourcefulness
WATARU In Japan, we have promoted
health, integrity, and resourcefulness
as values that we want employees toembrace; but I think that much ofthis would be supported by all Group
employees, not only those in Japan. In
our business, we are required to provide customers with safety and security.
For me, that means the most importantvalue is integrity. Which of health,integrity, and resourcefulness resonateswith you the most? And which otherqualities do you think are desirable forhuman resources?
MOLNAR I am in complete agreementwith you about the importance of integ­
rity. I believe that management should

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What kind of humanresources are neededat Nippon Sanso Holdings?

also strive to demonstrate a model ofintegrity. Moreover, by reinforcing thiswith a code of conduct and providing
various means for anonymously reporting violations, we can realize fair treatment of employees. If team members
work sincerely with one another, I am
certain this will ultimately lead people
to trust in the Company.
DE RAEDT In Europe, we also consider
integrity to be of primary importance,
but I am sure that all of us here canagree on the importance of all of thevalues—health, integrity, and resourcefulness. One of the qualities that I thinkis important in addition to these isflexibility. For example, being able toact flexibly to boldly take on challenges
and offer support, even for new projects that we have never experienced
before, will lead naturally to increased
engagement. So that is a quality that
I would like people to be aware of.
PAULINE At NSHS, we referred to thehealth, integrity, and resourcefulness
values promoted in Japan to establish
our own core values for Asia andOceania, called “ACTIVE.” This is anacronym for Accountability, Creativity,
Teamwork, Integrity, Vibrancy, andExcellence, which defines the valuesd,alentemultitertisepho are
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that our employees should have.
ACTIVE also includes the elementof integrity. I think that as “The Gas
Professionals” this is a natural valuethat we should uphold in carrying out
our duties so as to maintain a high levelof reliability. I am sure that this point
has been well inculcated in every region.
KOIZUMI Indeed. I believe that
integrity is fundamentally necessary
for members of society. Aside fromhealth, integrity, and resourcefulness,
I emphasize adaptability and a willingness to take on challenges. I think thatthese are essential qualities for everyone
in our business. In our current environment, changes are occurring extremely
rapidly. Therefore, people who have theability both to learn and unlearn—that
is, the adaptability to acquire newknowledge and let go of old knowledge—are going to be needed in theGroup going forward. Furthermore, it
is important to constantly pursue newconcepts and take up new challenges
without being bound by old, fixed ideas.
WATARU Right now, we are actuallyreanalyzing health, integrity, andresourcefulness and reworking thedefinition. In the course of this, I thinkthat the theme of work–life balancethat came up in our talk today is a key
concept. Whether individual employees
are able to enjoy their work is the mostimportant point for us to think throughproperly. Based on your input today, I
hope to improve the format of health,integrity, and resourcefulness so as tomake it even easier to understand andpromote internally. I would like to continue exchanging information andsharing best practices with each Group
company, as well as promoting humanresource exchanges. Thank you forparticipating today.

who
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The best peopthose w
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brand
and
who love Thermos.

Satoshi Wataru
Senior Executive Officer ofGroup Human Resources & Corporate Secretariat Office,General Manager of Human Resources andChief Health Officer (CHO)
Nippon Sanso Holdings Corporation(Additionally appointed as General Manager of
Human Resources and Head of Corporate Unit,
Member of the Board, Senior Executive Officer,
Taiyo Nippon Sanso Corporation)

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John B. Molnar

Pauline Loo

Toshio Koizumi

Wim De Raedt

Senior Vice President,
Human Resources
Matheson Tri-Gas, Inc.

Senior Vice President,
Human Resource & Admin
Nippon Sanso Holdings Singapore Pte. Ltd

Executive Vice President
General Manager, Administration
Thermos K.K.

Director, Human Resources
Nippon Gases Euro-Holding S.L.U.

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SECTION

3OUR
STRATEGY
Growth Strategy by Segment
Nippon Sanso Holdings’ five business segments are the Gas Business in Japan,
the Gas Business in the United States, the Gas Business in Europe, the Gas
Business in Asia and Oceania, and the Thermos Business. Each segment executes
growth strategies based on its particular market and regional characteristics.
With the transition to a holding company, the delegation of authority to eachbusiness segment has progressed even further, creating a structure for realizing
even faster growth.

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OUR STRATEGY

At a Glance

The three business domains of Nippon Sanso Holdings are industrial gases, electronics, and Thermos, andthese are operated and promoted by the five business segments. We aim to accurately grasp the market
characteristics of each region while leveraging the expertise and strengths cultivated in each region
across the Group to strengthen its comprehensive capabilities.
Outline of Business

Gas:
PackagedBulk

On-siteLP gas (propane, butane)

Specialty gases (electronic materials gases, etc.)

Equipment and installation:
Gas-related, plants (supply equipment ASUs, etc.)
Electronics-related (piping installation, impurity removal and purification equipment, etc.)
Welding and cutting-related (equipment and tools, welding rods and hard goods, etc.)

Main Products and Services (Revenue by product)

Main Customers and Product Applications

Taiyo Nippon Sanso Corporation Group

Gas
Business
in JapanTaiyo Nippon Sanso holds the top share of theJapanese industrial gases market at around 40%. It
has the main R&D and engineering functions for the
Nippon Sanso Holdings group, and a structure thatenables it to meet customers’ demands. The company
supports manufacturing with a nationwide supply
network and stable operations at highly efficient
production plants.

27.6 14.0

Gas

Gas
Businessin theUnited States

81.4¥220.6 billion

Equipment andinstallation

22.1¥118.2 billion

74.0
By sharing knowledge and technologies
advanced at R&D bases in Japan throughout theGroup, we have established a structure capableof meeting market needs in every region.

70.9

Matheson Tri-Gas, Inc. Group
Matheson Tri-Gas is building an industrial gases supply
network centered on major manufacturing areas suchas California, which boasts the largest state economy,
as well as Texas and Louisiana, leaders in the petroleum industry. In 2019, we acquired part of the HyCO
business* from former Linde Gas North America,
thereby further expanding our product lineup.

22.0

26.5

4.3
6.5

• Industrial gases business

5.9

21.0

41.5

Gas

¥151.7 billion* The HyCO business separates hydrogen (H2) and carbon monoxide (CO)from feedstock such as natural gas and supplies it to the petroleum
refining and petrochemical industries through on-site operations.

Example: Steelmakers (welding,Equipment andinstallationetc.), chemical manufacturers¥38.2 billion
The Matheson Tri-Gas group’s largest ASU wasestablished to serve the petrochemical industry
facing the Gulf of Mexico, where it conducts
on-site operations.

32.2

78.2

Gas
Businessin Europe

6.7
25.3

Gas
Business
in Asia andOceania

fuel, etc.), hospitals (cancer diagnosis, etc.)

Gas• Electronics business

2.7

38.1

Examples: Semiconductor manuEquipment andinstallation¥146.6 billion¥13.3 billion

facturers (semiconductors, LCDs,

10.6
The company maintains a strong focus on
productivity to ensure a safe, reliable, andefficient supply, and to reduce GHG emissions
during transport.

76.4

Operating company groups in
Asia and Oceania
Our industrial gases business operates mainly inSoutheast Asia, including Australia, Singapore, andMalaysia, as well as China and India; while the electronics
business is focused mainly in China, Taiwan, andSouth Korea. The group has identified East Asia as
an important area for its electronics business due
to a high concentration of global semiconductor
manufacturers.

automotive manufacturers (parts,

Please see P.38 for details.

Nippon Gases Euro-Holding S.L.U. Group
Nippon Gases Euro-Holding operates in 13 countries,
centered in Iberia (Spain and Portugal), Italy, andGermany, and has built a stable and highly efficientbusiness base. The company is developing its businessacross a wide range of fields to capture growth opportunities, including healthcare in Spain, refrigerants in
Italy, and oxygen supplies for aquaculture in Norway.

(petrochemicals, rubber, etc.),

3.5¥79.9 billion

14.2

Please see P.42 for details.

4.3

32.7
Gas

solar cells, etc.)

25.6

Equipment andinstallation¥25.3 billion

5.8

15.1
In East Asia, we have built an outstanding supply
chain that supplies gases used as materials in thesemiconductor manufacturing process withrigorous quality control, safety, and stability.

3.7

Thermos K.K. Group

Thermos
Business

Thermos K.K. of Japan is the main company in thegroup, which ships THERMOS brand products to over
120 countries around the world. The group contributes to energy saving through various technologies
and creative capabilities, including vacuum-insulation
technology cultivated in the industrial gases business.
At the same time, it provides new value throughproducts that realize comfortable lifestyles.

NIPPON SANSO HOLDINGS CORPORATION

3.5• Thermos business¥23.9 billion

Examples: General consumers● Japan● Overseas(household-use, sports, etc.),
food manufacturers

20.4

88

INTEGRATED REPORT 2021

Stainless steel vacuum-insulatedbottlesPlease see P.46 for details.

Shuttle Chef® vacuum-insulated
cooking pot

NIPPON SANSO HOLDINGS CORPORATION89

INTEGRATED REPORT 2021

OUR STRATEGY

Gas Business in Japan

Results for the Fiscal Year
Outline of BusinessIn the more than 110 years since the Company’s foundation, it has produced high-quality industrial gases to contribute to thedevelopment of Japanese industry. We have developed our business by providing the various effects and benefits of these gases.
As demand and production activity decline with the maturation of Japan’s economy, and the labor force decreases due to thefalling birthrate and aging population, the current state of Japan’s economy and society means that high economic growth canno longer be expected.
Meanwhile, in the global market, we are using our advanced technological capabilities and rigorous safety and quality controls
to our advantage, and will continue to maintain a strong presence in several industries. Our unchanging mission going forward isto meet the demands of these industries. To contribute to their development and expansion, we will leverage the potential ofindustrial gases to the fullest extent as a solution provider to assist the development of industry in Japan. In this way, we will
maximize our business value and drive increases in business productivity and efficiency.
Business History Highlights• Provided on-site supply (piping) of industrial
gases in major industrial areas in Japan• Provided reliable supply of industrial gases
to a major Japanese steelmakerBases

Revenue and Segment Profit

Branch office, sales office
Laboratory
ASU
Electronic materials gas manufacturing base1918

Toyo Sanso K.K. was established.

1935	Completed the first air separation unit
(ASU) to be produced in Japan
1946

328.0

321.4
29.4

342.4
30.7

363.9

356.1

28.7

100

10

2017

2018

2019

2020

Japan

29.1
20

2016

8%
FYE2021

30

29.8

9%

24%

40

338.9

200

0

2021

¥338.9billion076%(Years ended March 31)

Revenue (Left axis)

Opportunities and Risks
In terms of the business environment and future operation of the Gas
Business in Japan, the following could have a material impact on
investment decisions. Forward-looking statements in the following
section are based on the Group’s judgment as of March 31, 2021.
• Expansion of potential for development of proprietary technologies (combustion,
GrowthOpportunities carbon gas recovery, etc.) in conjunction with progress toward carbon neutrality• Expansion of applications for industrial gases such as oxygen and nitrogendue to activities for realizing the SDGs (energy efficiency increase, marine
resource protection, food loss reduction, etc.)• Expansion of business opportunities associated with the strengthening ofJapan’s semiconductor industry for economic security• Expansion of business opportunities in the Company’s new business fields(AM business, isotope and marker business, bio business, etc.) following
increased level of industry structure• Expansion of business opportunities due to realization of innovative low
production costs through DX

Taiyo Sanso Co., Ltd. was established.

Started on-site supply business1995	Taiyo Toyo Sanso Co., Ltd. was launched.
(Merger of Taiyo Sanso Co., Ltd. and Toyo
Sanso K.K.)
2004	Taiyo Nippon Sanso Corporation was
launched. (Merger of Nippon Sanso Ltd.
and Taiyo Toyo Sanso Co., Ltd.)(Billions of yen)

400

27.2

1954	Started Japan’s first liquid oxygen bulk
business
1964

Percentage of Revenue by Business(Billions of yen) 300• Built a high-volume production system for
Water-18O stable isotope, which is used as amaterial for PET testing reagents, using thecryogenic separation method1910	Nippon Sanso was established under thename Nippon Sanso Ltd. (Founding)high-performance ventilators to hospitals. Even underadverse conditions, we succeeded in strengthening our earnings foundation. We did this by focusing on strengthening
the foundation of the industrial gases business and opening
up new business fields using gas technology as an entry
point, minimizing the negative impact of COVID-19 on ourbusiness performance while proposing gases and gas-related
equipment as solutions for customers’ issues.

Head office (Taiyo Nippon Sanso Corporation)• Developed the Total Gas Center that supplies total
gas and services, such as high-quality nitrogen gas
and electronic materials gases for the electronics
industry in Japan, such as semiconductor and
LCD manufacturers

History

For FYE2021, revenue decreased 4.8% year on year, reflecting
a decline in sales volume of separation gases as economic
activity was halted by the spread of COVID-19. In this situation, the business environment for electronics-related markets
was favorable, with an increase in sales of electronic materials
gases and strong sales of equipment related to customers’
conversion of their plants into smart factories, such as the
new Intelligent Gas Supplying System (IGSS).
Moreover, in the medical business, Taiyo Nippon Sanso
Group company IMI Co., Ltd. saw a surge in shipments ofRisks• Increase in energy cost due to rising electric power charges, etc.
• Decrease in industrial gases demand due to elimination and consolidation,
overseas relocation, and manufacturing method changes in core industries(steelmaking, petrochemicals, etc.) associated with reduction of GHG emissions• Increase in logistics costs due to work-style reforms and labor shortages in
the logistics industry• Stoppage of operations at production and logistics bases due to natural disasters• Supply chain disruptions due to increasingly sophisticated cyberattacks

2020	Launched anew as the operating company
for Japan following the transition to aholding company structure

NIPPON SANSO HOLDINGS CORPORATION90

INTEGRATED REPORT 2021

Industrial gases (Segment income (Right axis)

Medical-related productsElectronics-related products

Energy: LP gas)

Future Outlook
The Japanese economy has been severely impacted by the
COVID-19 pandemic. However, in FYE2022 we expect to see
the economy begin to move from a recovery phase towardnormalization. We will keep pace with the recovery in industrial gas demand, while working to explore and realize business opportunities related to new industrial activity looking
ahead to the post-COVID-19 era and carbon neutrality.
Specifically, we will work to capture growth in East Asia,
where there is vigorous production and investment activity,and in Japan’s domestic electronics industry. At the same time,
we will continue to focus on proposing energy-efficiency
improvements to energy-intensive industries and on gas
applications, such as additive manufacturing (AM) and modified
atmosphere packaging (MAP). In tandem, we will proceedwith reinforcing our business base by conducing cost reduction

NIPPON SANSO HOLDINGS CORPORATION

activities in production and logistics and creating new value
in our bulk gas business in order to increase the earnings
capability of the Gas Business in Japan.

An AM Advanced Room established inside the Yamanashi Laboratory to serve as
the global center for AM technology development

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INTEGRATED REPORT 2021

OUR STRATEGY

Gas Business in Japan
Message from Director in Charge of the Gas Business in Japan

We will strive to maximize the value ofthe industrial gases business by implementing
industrial gases as a service (iGaaS).

Response to COVID-19
With the spread of COVID-19, production activities slumped at our main customers in the steelmaking, chemicals, and mining
industries, and the Gas Business in Japan was also significantly affected. On the other hand, in the electronics business, strong
activity in manufacturing of semiconductors, LCDs, and so forth resulted in favorable performance for electronic materials gases
as well as equipment and facilities.
Even under the state-of-emergency declaration that was issued because of the pandemic, we worked hard to deliver highperformance ventilators in response to urgent delivery requests from the government and medical institutions. Our industrial
gases business serves customers in an extremely wide range of fields, which enabled us to minimize the impact of stalled
economic and industrial activity due to the pandemic. In addition, we implemented various measures to prevent infection
as well as sweeping cost-cutting measures in an effort to secure a profit.

Supply Chain

Organization Management• Provision of sales information via video andproduct information via email bulletins• Building of communication with new customers
using the internet• Blocking of contact with external parties andimplementation of staggered shifts• Construction of new working systems and teamconfigurations to avoid production stops• Thorough hygiene management, including
contactless delivery and recovery of gas canisters to
medical institutions• In February 2020, set up the COVID-19 Crisis Headquarters,
formulated a response policy and operation standards, andthen quickly disseminated them to employees. Adjusted
response measures as necessary in order to respond quickly
to changes in case numbers and government requests, etc.
• Promoted the introduction of teleworking and proactive useof web conferencing for internal and external meetings.
Decided to extend emergency measures for employees
involved in childcare and safety• Encouraged strong awareness of taking care not to pass on
infection, implementing minimal required staff numbers formaintenance of basic industrial gases functions• Placing first priority on employee health and working environment, prohibited overseas travel in principle as a measure
to prevent infection. In addition, took strict measures suchas postponing non-essential or non-urgent business travel
inside Japan

Initiatives to Realize Both Sustainability and Earnings

Kenji Nagata
Member of the Board,
Nippon Sanso Holdings Corporation
Representative Director and President,
Taiyo Nippon Sanso Corporationbase business in industrial gases and so forth. Customers
use industrial gases because the efficacy and function of thegases enhances the quality and productivity of the customers’
products. Under the iGaaS concept, we propose a solution
comprised of gases and relevant services and equipment,
which increases the value that we can provide to a new level.
In this way, we aim to strengthen our fundamental businessand increase our earning capability.
For the second strategy, we will develop new value andbusiness domains by realizing innovation inspired by gases.
Currently, in advanced forms of gas control technologies weare focusing mainly on 3D printers, the bio field, stable isotopes,
and the field of composite semiconductors, and we will accelerate our technology and product development to expand
these businesses. Within the holding company structure, wewill seek to maximize the potential of industrial gases, which
are the Company’s starting point, while flexibly and accurately
adapting to changes in Japan’s industries and businessenvironment.

The spread of COVID-19 is causing changes not only tocompanies and industries but also to the behavior patterns ofpeople. Nevertheless, the industrial gases business has developed
over 100 years by suppling industrial gases to a wide range ofindustries, contributing to a better environment for people andthe earth. Considering the potential of oxygen, as a compositional element of the earth, it exists in huge quantities, making
it a virtually limitless resource. At the same time, its high reactivity enables it to promote chemical reactions in any kind of
substance. Nitrogen makes up 78% of the earth’s atmosphere,
and is essential for all life on the planet. Extremely stable underordinary temperatures and pressures, it has a very low boilingpoint of –196°C and is widely used to prevent oxidization andas a coolant. Even as we undergo various changes and transformations, our mission remains unchanged after 100 years:
to demonstrate the full potential of industrial gases and constantly press ahead with our contribution to a wide range ofindustries and solutions to social issues. Pursuing this mission willlead to the sustainable development of the Gas Business in Japan.
We have two specific strategies. The first is to strengthen our
Comments from Persons in Chargethat we are called to leverage these characteristics on an evenwider scale. In particular, as we work to realize carbon neutrality, we will promote the development of technologies tosupport the effective use of oxygen, hydrogen, ammonia, andother gases, capturing the resulting business opportunities inan effort to achieve both sustainability and profitability.

The Company has agreed with the TCFD recommendations
and is actively promoting financial disclosures related to climate change. In addition, we have adopted internal carbon
pricing as a factor for decision-making regarding investment
and financing plans. These initiatives are part of ongoing
efforts to upgrade and reinforce our internal systems forrealizing a carbon-neutral society.
We believe that our pursuit of the SDGs (ESG) throughthese initiatives will lead to the achievement of both corporate
sustainability and earnings. Promotion of the SDGs and making
a profit are not contradictory goals for a company. Moreover, we
believe that a company that does not achieve both will not beable to demonstrate a social reason for its continued existence.
Through our industrial gases business, we have handled
source elements that are widely found on earth and provided
their efficacy and functions to contribute to the developmentof various industries. We therefore see this as an industry thathas a high degree of affinity with the SDGs, and we believe

NIPPON SANSO HOLDINGS CORPORATION

Toyoyuki Sato

Masahiro Takeuchi

Senior Executive Officer,

Executive Officer,

Plant Engineering Center,Research & Development Unit,

Taiyo Nippon Sanso Corporation

Taiyo Nippon Sanso Corporation

We will support iGaaS from the ground up throughplant innovation.

We will accelerate initiatives for realizing
a decarbonized society.

The Plant Engineering Center (PEC) is Nippon Sanso Holdings only
plant for manufacturing ASUs. Since 1935, the PEC has delivered atotal of 1,200 ASUs, and special low-temperature, high-vacuum
plants to customers in Japan and overseas. We will pursue the greatest possible cost reductions and shortening of delivery times while
maintaining high performance and quality as “The Gas Professionals”
of plant engineering, aiming to contribute to the gas businesses in
the Group’s four geographic hubs. In this way, we will work tostrengthen the Group’s global competitive capabilities.

Through technology development based on vacuum, high pressure,
low-temperature, and gas control technologies, the Research &Development Unit will increase productivity, safety, and stability inindustry, as well as work in the electronics field to strengthen development of new materials and processes.
Meanwhile, in gas applications it will contribute to regenerative
medicine and food loss countermeasures through low-temperatureapplication technologies. It will also bolster decarbonization initiatives
through oxygen-enriched combustion technologies and carbon gas
recapturing technologies.

Technology using ammonia combustion to help reduce CO2 emissions from industrial furnaces

92

INTEGRATED REPORT 2021

NIPPON SANSO HOLDINGS CORPORATION93

INTEGRATED REPORT 2021

OUR STRATEGY

Gas Business in the United States

Results for the Fiscal Year
Outline of Business
Matheson Tri-Gas, Inc. was founded in 1927 as a specialty gas company and merged with Tri-Gas, a small regional industrial gas
company, in 1999. Since 2005 the company has grown in sales from $400 million to over $2 billion with an estimated 10%
market share by executing a strategy of vertical integration and product line extension through acquisitions and key capital projects. Vertical integration enables us to offer our customers a full line of cylinder, bulk, and on-site industrial gases along withrelated distribution and application equipment. In addition, we have a wide range of offerings from acetylene to complement
our cylinder gas products, food freezing equipment and dry ice in support of food processors, and world-class production facilities in Korea and the United States to support the electronics and specialty gas business.

Business History Highlights

Bases

Strategies you have pursued in the fiscal year under review
We place extreme focus on the safety and well-being of ourTeammates, Customers, and the community in which we operate. After the COVID-19 surge across the United States in thefirst four months of our fiscal year, the MATHESON business wasapproximately $20 million below our operating income goal.
Given the significant sales shortfall, we placed intense focus on
costs, price management, and closing new business opportunities.
Initiatives (business measures) aligned to the strategy
We focused on supplier price reductions, travel expense,
distribution optimization, and over one thousand small local• Promoted bulk liquid and packaged gas
supply from plants located mainly in thesouthern United States (1992–2004)• Expanded bulk gas supply with new
and acquired plants in California, Texas,
Louisiana, Nebraska, and Iowa (2004–2015)

Revenue and Segment Profit• Achieved a national supply network in
the United States with the acquisitionof Air Liquide assets (2016)(Billions of yen)

200

150

172.6
149.8

100

1992

Acquired Tri-Gas, Inc1999	Merger between Matheson Gas
Products and Tri-Gas
2004	Acquired six ASUs from Air Liquide
2006	Acquisition of BOC Helium business;acquisition of Linweld
2009	Acquired Valley National Gases thelargest independent gas distributor in
the United States to expand businessarea nationwide
2010

Acquired Western International,
the largest wholesale supplier ofacetylene in the United States

2014	Acquired Continental Carbonic
Products a major U.S. carbon dioxide
manufacturer and made a full-scale
entry into the CO2 and dry ice market

Corporate headquarters
ASU
Carbon dioxide plant
Nitrous oxide plantOperating base0

GrowthWe intend to enhance our vertical integration efforts and strengthen our
Opportunities market intensity. We are investing in areas that we expect significant growthsuch as dry ice and global HyCO. Our focus will also be on markets that are
resilient to economic conditions and essential to society such as the medical
oxygen and food processing segment.

Acquired Linde’s U.S. HyCO business

NIPPON SANSO HOLDINGS CORPORATION

Our management team identified two key risks and assigned project teams todevise mitigation measures to minimize them. The main risks are economic
and cybersecurity. Cost control, pricing, and cash management are the best
remedies for economic risk. To reduce cybersecurity risk, we implement industry best practice processes and challenge our “defenses” regularly to identify
vulnerabilities and implement the necessary corrective actions.

94

23.4
189.9

22.2

2016

FYE2021

18

13.5

15.6

United States¥189.912

billion

6

2017

2018

2019

2020

6%
2%

9%

24

2021

0

91%

(Years ended March 31)

Opportunities and Risks
Acquisitions, capital project opportunities, sustainability initiatives, and theconstantly advancing electronics segment will continue to positively influence our industry. We have classic business threats of disruptive technology, competition, and keeping up with the speed of change, but perhaps
the greatest threat is our own complacency and failing to respond whenpresented with actionable opportunity or risk. Fortunately, we have been
managing this threat well over the past and intend to continue to do so
into the future.

Risks

198.8

9.2

Revenue (Left axis)

2016	Acquired 18 new ASUs and businessassets from Air Liquide
2019

50

187.3

147.2

12.0

1983	Entered the gas business in the UnitedStates after acquiring Matheson Gas
Products, Inc., which has a proven trackrecord as a specialty gas manufacturer

Percentage of Revenue by Business(Billions of yen) • Established supply of on-site hydrogenthrough the acquisition of Linde's U.S.
HyCO business (2019)

History

projects saving over $6 million. We avoided staff reduction
where possible, we did not replace staffing lost to attrition
unless the role was mission critical to safety, reliability, or
customer service. We implemented multiple cost recovery andpricing campaigns to offset the profitability reduction. Over60 formal sales strategy reviews were conducted by the
Executive Management with Business Unit Sales Teams toaccelerate new business signings that could generate sales
and profit in the fiscal year. A combination of these efforts
and a gradual sales recovery throughout the year allowed
MATHESON to achieve the original operating income budget
for the fiscal year.

INTEGRATED REPORT 2021

Industrial gases（

Segment income (Right axis)

Medical-related products
Energy: LP gas）
Electronics-related products

Future Outlook
Safety and Quality continue to be the foundation upon which
we are growing the business. Our cost reduction program will
be an ongoing effort with emphasis on minimizing supplier
price increases through proactive cost-down bids and negotiations. Labor shortages are especially pronounced in thecurrent business environment so special effort is being placedon our recruiting program with the end goal to make recruiting a true competitive advantage. Major efforts are underway
to bring on board professional drivers and salespersons. We
support our Customers with a broad range of gas applications especially metal fabrication and food processing. Focus

NIPPON SANSO HOLDINGS CORPORATION

products include electronics and specialty gases, helium,
HyCO, On-site & Pipeline. Improved management of cash isimportant with an emphasis on operating cash flow.
We have reorganized both the Safety and Quality Teamsto allow for better geographic coverage and support of thelocal Teams. We have reorganized our Recruiting into twoTeams, one focused on drivers and the other on sales, management, and administrative positions. Cash management
has been a key initiative particularly on accounts receivableand inventory management.

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INTEGRATED REPORT 2021

OUR STRATEGY

Gas Business in the United States
Message from Director in Charge of the Gas Business in the United States

MTG intends to create social value throughour innovative gas solutions and contribute toa more sustainable future.

Response to COVID-19
Results of measures to respond to COVID-19
We have seen over 10% of our Team infected with the virus
since the February 2020 timeframe which is in line with thegeneral infection rate in the United States. All indications are
infections have been due to close gatherings of family andfriends that do not live together. Most tragically, two of ourTeammates who contracted the virus passed away.

believe was a major factor in the outstanding reciprocal support received from the Team in achieving our pre-pandemic
financial operating profit goal.

Chairman and CEO,Matheson Tri-Gas, Inc.

MATHESON, in partnership with Antelope Valley Hospital and Samaritan’s
Purse, installed a new Bulk Medical Oxygen System at Antelope Valley
Hospital. The system supports a Mobile Tent Field Hospital providing relief
for COVID-19 overflow patients from all of Southern California.

Comments from the Chief Financial Officer

Foreseeable issues to be addressed and outlook for the future

Executive Vice President and CFO
Matheson Tri-Gas, Inc.

Sustainability is evolving to become a fundamental requirement of our customers. Requests to share
MATHESON’s sustainability policy details are routine. Customers appreciate our practical approach in how
we measure our progress and can readily support our priorities in that our accomplishments in this key area
help to reduce waste and ultimately drive cost reduction in our business.
MATHESON’s pursuit of our vertical integration strategy has enabled significant growth and expansion of
the business. Our continued plans and increased outlook for capital project development requires the further scale-up of resources in order to keep up with growing project demands and to assure safe and reliable
project execution.
While productivity remains high for the organization with certain teams working remotely, employees’
continued expectations for “work from home” and persisting concerns around COVID-19 requires careful,ongoing attention to protect our team. We foresee challenges in the continued development of new management talent due to reduced perspective gained by working remotely.
Overall, the business adapted well to managing through last year’s challenges and many of these challenges will remain for some time. The strong commitment demonstrated by the MATHESON team willassure our continued success.

NIPPON SANSO HOLDINGS CORPORATION

Member of the Board,
Nippon Sanso Holdings Corporation

Measures for adapting to changes in the businessenvironment arising from COVID-19
The past fiscal year was one of significant challenges for
MATHESON as it was to the entire NSHD Group. As thedanger related to COVID-19 became apparent in mid-March
2020, we moved all administrative and back-office operations
to remote work from home status as well as the remote operations center of our ASUs and HyCO facilities. We establisheda Senior Manager COVID-19 Task Force that met at least
weekly to set related policies and assess specific situations.
Face coverings, face shields, latex gloves, and personal
hygiene materials were issued to all sites and strict social
distancing and masking requirements were implemented
across our production and distribution operations. Weekly
companywide communications were made regarding our
status. Virtual meetings internally and with Customers andsuppliers became the norm greatly reducing travel expenseand saving time. Throughout this time, there were no furloughs or layoffs related to the pandemic downturn. This
support of our Team by our Executive Management we

Steve Foster

Thomas Scott Kallman

96

INTEGRATED REPORT 2021

efforts support our cost management initiatives by delivering
greater efficiencies in power, fuel, and water consumption
and helps MATHESON realize the NSHD Vision. This in turnallows us to be more competitive which helps finance future
investments in Safety, Quality, Sustainability, and finally thegrowth of the business, all in a synergistic cycle. Specific togrowth, we are placing additional efforts to extend ourASU and dry ice production network into areas which will
strengthen our density. This includes vertical integrationin markets we currently serve and want to grow and new­markets in which we want to expand. Special interest is indeveloping a more robust on-site generator business andaggressively competing for global HyCO opportunities.
MATHESON’s business model includes controlling operating
expenses and has a companywide constant drive to reduce
costs. In conjunction with these fundamentals, we closely
manage our cash optimizing payment terms for both receivables and payables. This along with our pricing management
and sales growth has contributed to steady reduction in debt
and allows for acquisitions and capital investments which will
drive future growth of the company.
MATHESON’s focus on “what really matters and what we
can control” is intended to create social value through ourinnovative gas solutions to increase industrial productivity,
enhance human well-being, and contribute to a more sustainable future. The path forward for MATHESON is in completealignment with the NSHD Vision and our Shareholders.

There is currently a fair amount of uncertainly in our businesswith respect to potential changes in corporate tax rates, inflation, labor shortages, and the best manner in which toaddress the need for sustainability in a rational and effective
manner. While the sobering presence of COVID-19 remains,
we must assess the safest and most productive approach forour employees to return to offices. The safety of our teammates, customers, and communities along with meeting ourfinancial obligations and sustainability duties to our shareholders are our priorities. The strong performance in 2021 hasgiven us the formula for continued success of the businessthis fiscal year. The current economy is rapidly returning to
pre-pandemic form. For now, sales and operating profit are
improving and barring the unforeseen, the business is on
track to deliver its financial commitments.
In 2019, MATHESON began to assess our sustainability
position and we began to measure our carbon emissions,consumption of water and generation of hazardous waste.
We established a baseline of data and will work to improve by
becoming more power efficient, more fuel efficient and minimize water consumption and the generation of hazardous
wastes, recycling both when possible. Other initiatives include
our formal cost reduction program designed to reduce waste
and drive efficiencies and implementation of a computerized
Human Resources management platform which leverages andstandardizes the same platform used by NGE. The collateralbenefits of this practical approach will help MATHESON better
meet our sustainability responsibilities and improve competitiveness, profitability, and shareholder value.
Our top priority remains safety, which is based on implementation of best practices and procedures and the related
drive for continuous improvement. A close second is our
focus on quality and providing excellent customer service.
Strong performance in these two areas positions MATHESON
to deliver results in sustainability and growth. Sustainability

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INTEGRATED REPORT 2021

OUR STRATEGY

Gas Business in Europe

Results for the Fiscal Year
Outline of BusinessNippon Gases Euro-Holding S.L.U. (NGE) has a significant market presence in Europe with close to 10% market share overall
and more than 16% in the countries where we operate. We enjoy a strong income statement and balance sheet. We area lean, agile, and flat organization that can react quickly to challenges and we have a highly committed and experienced staff.
Our business strategy builds on these realities through 5 pillars: 1) Strong governance, 2) People excellence, 3) Optimization of
the base business, 4) Growth, and 5) Operational excellence.

Business History Highlights• The European business has nearly tripled
its size since the year 2000 through acquisitions in Benelux, Germany, Ireland, Italy,
Scandinavia, and the United Kingdom.
• Provides on-site supply (piping) to several
major industrial areas in Europe (Belgium,
Germany, Italy, and Spain).

Bases
Head office
Regional headquarters
Sales office
ASU
Operational base
CO2 terminal• Growing in bulk liquid supply throughout
Europe based on customized applications
technology offerings for our customers inmany diverse markets.

Sales, in fiscal year ending March 2021, were 1% above theforecast driven by good performance in most lines of businessand a strong second half of the year recovery.
• Variable margin was 0.6% above forecast from higher sales,
pricing and productivity actions.
• Strong fixed costs controls mitigated the extra costs related
to COVID-19 protection equipment, special cleaning services and bad debt provisions.
• Operating income was 1.2% above forecast, driven byhigher sales, variable margin, and fixed costs savings.
• We experienced a strong recovery in the second half of theyear, with sales and operating income higher than the same
period pre-COVID-19.

• Capital expenditures were 3% below forecast and working
capital strong due to excellent collection work done inall businesses.
• The main strategies to accomplish these results have been:- Fast implementation of COVID-19 measures for the protection of employees, their families, our customers, suppliers, and partners- Ensuring business continuity: we have supplied every needof every customer, especially hospitals and clinical centers,even during the worst peaks of the pandemic

Revenue and Segment Profit

Percentage of Revenue by Business(Billions of yen) • Recently commissioned a new ASU in
Norway to support the aquaculture industry and a liquid CO2 terminal in Ireland to
optimize CO2 supply

150
300

160.0

FYE202130

24.8

Europe

21.2

100
200

¥160.0

20

55.1

50
100
0
0

12%

40

165.5

• Customer focus and productivity are at
the root of our financial results

3%(Billions of yen)

200
400

billion

10

6.5
2016

2017

2018

2019

2020

2021

0

97%

(Years ended March 31)

History
In December 2018, our company acquired
most of the European operations of the
U.S. company Praxair, Inc. (industrial gases
business in Germany, Spain, Portugal, Italy,
Norway, Denmark, Sweden, the Netherlands,
and Belgium; carbon dioxide business andhelium-related business in the United
Kingdom, Ireland, the Netherlands, andFrance). We are currently expanding our
European operations under the NIPPONGASES brand.

Opportunities and Risks• The major opportunity is the thorough development of our five strategicpillars: 1) Be best in class in safety, compliance, risk management andquality of products and services, 2) Leadership excellence, optimizationof talent and motivation of the employees, and optimization of diversity
and inclusion, 3) Defend current business, continue to lead in applications
technologies, and continuously evaluate markets and portfolios, 4) Seize
major opportunities in decarbonization and hydrogen, partner with ourcustomers to help them achieve their sustainability objectives, expand
geographical footprint, and consider M&A opportunities, and 5) Takefull advantage of DX and achieve sustainability leadership.
• The overall major risk is failing in accomplishing the above. Other risks,
today, are: a slower transition than as planned to becoming a global corporation, the continued presence and impact of the COVID-19 pandemic,
the potential impact of the electricity transition on our business, increasing
cybercriminality, and the slower execution of a well-defined decarbonization strategy that may leave us behind the competition.

NIPPON SANSO HOLDINGS CORPORATION98

INTEGRATED REPORT 2021

Industrial gases ( Medical-related products)
Electronics-related products

Revenue (Left axis)
Segment income (Right axis)* Financial results for FYE2019 are for the four months from December 2018 to March 2019.

Future Outlook
In the fiscal year ending March 2022, we expect sales to growmore than 7% year on year, driven by the continuation of therecovery in all lines of business with significant volume
increases and accelerated applications technologies, oxyfuelcombustion, water and wastewater treatment, food and beverage, fish farming, additive manufacturing, decarbonization
projects, dry ice, semiconductor gases, and others. We also
expect stronger sales from large projects completion (new ASU
in Norway, new CO2 terminal in Ireland, and new healthcare
JV in Italy), and strong pricing environment. We expect lower
healthcare sales as we expect a lesser impact of the pandemic
in the hospitals across Europe.
Operating income to grow 18% year on year, driven by therecovery and the higher volumes, the increased sales,

NIPPON SANSO HOLDINGS CORPORATION

productivity, pricing, continued fixed costs control, and thetotal Nippon Sanso Holdings integration project.

ASU Malm, Norway

99

INTEGRATED REPORT 2021

OUR STRATEGY

Gas Business in Europe
Message from Director in Charge of the Gas Business in Europe

NGE has set its own Sustainable Development
Goals to contribute to a more sustainable future.

Response to COVID-19
Our company has contributed and continues to do so, verysignificantly, to alleviate the suffering associated with the
pandemic. The leitmotiv of our industry and our company isand has been “uninterrupted supply of high-quality products.”
During the worst peaks of the pandemic the meaning of“uninterrupted, 24/7” supply has been more significant andmore essential than ever for the society.
At Nippon Gases,• We have maintained our operational discipline throughthe year.
• We created new hygiene and organizational proceduresfor the safe operations of our plants and we have kept all
our plants running.
• We have supplied every need of every customer, especially hospitals and patients even in the worst peak daysof the pandemic.
• We sent home everybody that could work from home.
This is more than 1/3 of our employee population.

• We have stayed in contact with our customers, suppliers,and partners through remote conferencing technologies.
• We have been transforming our company, making it
more advanced and efficient.
• In summary, we have managed our lives and our company through the pandemic storm protecting our
employees and their families, our customers and suppliers, as well as other stakeholders.
• Our company together with the industrial gases associations worked hard with the different authorities andgovernmental bodies across Europe to make sure thatvital gases and services were always available there where
they were needed.

Initiatives to Realize Both Sustainability and Earnings
At Nippon Gases, we consider that industrial gases are part of thesolution to get to the climate objectives of the European Union
for 2030 and 2050. We have been part of the solution for many
years already. We know the properties of CO2 and H2 and know
how to deal with them in a safe and efficient way, thus allowing
us to bring this knowledge to the CO2 emitters, as well as to all
those using H2 in the future to reduce their carbon footprint.
So, Nippon Gases has been helping and will increasingly continue to help our customers to reduce their carbon footprint and,
consequently, we are helping society as a whole. We are also
intensive electrical energy consumers, and we use road transport
as one of the major ways to reach our customers. As such, weneed to contribute to a decarbonized society from an internal
point of view too. We have increased the usage of renewableelectrical energy expecting to reach 35% this year. If we consider
low carbon energy usage, this year we will reach 65%. We arecontinuously investing in new technologies to reduce specificenergy consumption in our facilities. In the last 10 years, wereduced the specific energy consumption by 8%. In summary,we contribute to a more sustainable world, by sourcing “greener”

energy and by investing in technology to lower the MWh/tonneof product we produce. As for road transport, two approaches:
we reduce the impact of our trucks by moving to greener fuelsand by investing in sophisticated technologies to reduce the mileage needed to reach our customers. We will reduce our transport
GHG intensity more than 5% from 2021 to 2024.

Eduardo Gil Elejoste
Member of the Board,
Nippon Sanso Holdings Corporation
Chairman and President,
Nippon Gases Euro-Holding S.L.U.

Comments from the Chief Financial Officer

We will focus on maintaining and strengthening our financial health on aEuropean consolidated basis and conduct a range of sustainability initiatives.

A newly built CO2 terminal in northern Ireland, enables more efficient supply thantransportation by tanker truck. As a result, CO2 emissions associated with transport can be
reduced by 500 tonnes per year.

Justin Corcho Maters
Vice President and CFO
Nippon Gases Euro-Holding S.L.U.

NIPPON SANSO HOLDINGS CORPORATION

Responsibility (88), Diversity (88), Sustainable Engagement(86), Empowerment (85), Global Satisfaction (82), Quality(82), and Compliance (81). The Management, Collaboration,
Communications, and COVID-19 Measures all scored above 75.
This feedback from our employees shows the way to continue
to build a high-performance company. Our company, present in
13 European countries, employs 3,000 people, of which 27%
are women. We are a diverse and inclusive company and expect
to pass the 30% women milestone within the next five years.
The strategy of Nippon Gases for the foreseeable future isbased on the following pillars:– Grow and improve our business where we are– Look for opportunities to invest and expand to places where
today we are not– Look for opportunities to invest and expand in adjacentmarkets to those markets in which we are today.
A final thought: I believe, as a team, Nippon Gases has
ended the year wiser, increasingly adaptive and innovative,
proactive and collaborative and, consequently, better prepared
for the future. During this exceptional year, we had the chance
to improve many non-used or “parked” skills. It has been an
excellent learning experience for all of us; we had to work
hard, innovate, collaborate, and “to mine” the best of ourskills. An excellent personal development year for everybody.

Nippon Gases has set its Sustainable Development Goals tocontribute to a better and more sustainable future:– Company governance and compliance, a strong culture ofbusiness integrity and ethics.
– Global environment, a strong drive to reduce emissions andto reduce waste.
– Society, community engagement activities, and sustainabilityof our customers.
– People, the safest as well as a highly diverse and inclusivecompany.
Nippon Gases’ priorities are: Safety, Compliance, theEnvironment, People Excellence, Customer Focus, andFinancial Results. Nippon Gases is ultimately a highly experienced team of talented people contributing to the sustainablegrowth of industry in Europe, because industry is one of the
key pillars of any healthy modern society providing qualified
jobs, continuous training, and development opportunities for
its workforce. Industry is the major contributor to innovation
and R&D, the basis of the export potential of every country.
This year, Nippon Gases asked the whole employee population to participate in an Employee Engagement Survey( P.167). The results of the survey were very encouraging:
81% of the employees participated, giving scores above 80(from 100 as maximum) for Safety (95), Corporate Social

100

INTEGRATED REPORT 2021

Looking ahead, we are still amidst a global pandemic, the European economy is still contracting,and even though the vaccination pace remains steady, the roll-out seems still to be delayed.
Therefore, the timing and shape of any recovery is uncertain and hence, Nippon Gases remains
focused on preserving liquidity and transforming its businesses for the future.
In terms of sustainability, we must balance the increased transparency around these non-financial
metrics with our ability to identify and measure those metrics and be prepared both internallyand externally to show how the company is accounting for and measuring sustainability risks.
This is something we will be working on over the coming year, as our stakeholders are interested
in this type of information and I also believe there is a direct link between sustainability metrics andbusiness performance. We will, therefore, focus on maintaining and strengthening our financial healthon a European consolidated basis and conduct a range of sustainability initiatives in productivity,
efficiency, and strengthening cost management that will contribute to increasing shareholder value.

NIPPON SANSO HOLDINGS CORPORATION101

INTEGRATED REPORT 2021

OUR STRATEGY

Gas Business in Asia and Oceania

Results for the Fiscal Year
Outline of Business
The Nippon Sanso Holdings Group’s business in Asia and Oceania started in 1982, with an expansion into Singapore. By the
1990s, this initial foray had been followed by expansions into Malaysia, China, South Korea, the Philippines, Taiwan, Vietnam,
and Thailand. In the 2000s, we continued expanding into India, Australia, Indonesia, and Myanmar. Our regional holding companies
in Singapore and China provide centralized management of compliance and safety in the region, while Singapore also has a regional
engineering support function. The main features of the business are a network of ASUs and filling stations, as well as a logistics
network, which support the fundamental business of supplying industrial gases. In addition, in East Asia, the Group also has
production sites for specialty gases used in electronics, as well as warehouses and sales companies, which play a key role in theGroup’s Total Electronics business. This area has a higher market growth rate than any other, and the Group must continue toactively make further investments to increase production capacity if it is to keep pace with rising demand and further increase its
market share. We are constantly on the lookout for such opportunities.
Business History Highlights

Bases• Contributed to industry development by strengthening
industrial gases supply capacity in step with economic
development

Revenue and Segment Profit• Established supply chains since 1990 covering eachregion in East Asia, where the global semiconductor
industry is concentrated• Responded to increased demand in Australia andThailand by developing the LP gas business for industrial
and consumer use

1982	Established National Oxygen Private Ltd.
in Singapore
1993	Established Dalian Nippon Sanso Gas Co., Ltd.
in Dalian, China, and invested in Air Products
Industry Co., Ltd. in Thailand
1994	Capital participant in Ingasco, Inc. in the Philippines
1995	Established Matheson Gas Products Korea
in South Korea
1996

Established Nippon Sanso Taiwan Inc.

1998	Capital participant in Vietnam Japan Gas Co., Ltd.
in Vietnam
2002	Established Taiyo Nippon Sanso Trading(Shanghai) Co., Ltd. in Shanghai, China

103.1
90

Regional headquarters
Operating base
ASU

2012	Made Leeden Limited of Singapore into
a subsidiary

89.1

106.1

85.8
9.2

9.1

104.5
9.9

105.3
9.4

Expanding gas demand in the region presents an opportunity for the Group tocontinuously increase its production capability. In the business of supplying theelectronics sector, which is constantly producing new technologies, the Groupneeds to accelerate the launch of products for next-generation semiconductors
and production investment for short-cycle products. In Asia, there are manymarket entrants from other industries or local small- to medium-sized companies, creating conditions for a possible price decline. It is therefore important toappeal to customers constantly regarding the value of the Group’s safe, secure,and reliable product supply, and to make unstinting efforts to retain commercial
rights and expand sales. Statements about the future in this section are basedon the Group’s judgment as of March 31, 2021.
• Maintenance and expansion of earnings in existing market centered on the
GrowthOpportunities bulk gas business in a stable market expected to see sustainable growth• Sales and investment opportunities in the growth industries of semiconductors
and the biotechnology field• Launch of environment-friendly products and services• Concentrated investment of management resources in the growth market
of East Asia

Risks

2013	Established PT Samator Taiyo Nippon Sanso
Indonesia in Indonesia
2015	Acquired Renegade Gas Pty Ltd in Australia
2016	Established Taiyo Nippon Sanso Myanmar Co.,
Ltd. in Myanmar

NIPPON SANSO HOLDINGS CORPORATION

102• Underdevelopment of infrastructure• Securing of backup gases• Dealing with legal and regulatory systems that change with the politicalsituation and capital restrictions found only in emerging countries• Vigorous competition for orders with competitor companies typical of a
growth region and risk from exchange and interest rate fluctuations• Market price volatility for rare gases and helium• Cyberattacks growing in sophistication and number each year, and quality incidents• Project delays due to pandemics

INTEGRATED REPORT 2021

14%
FYE2021

9

Asia and Oceania¥105.3

6

5.0

0

3%

12

44%

60

5.1

30

2003	Established Shanghai Taiyo Nippon Sanso Gas
Co., Ltd. in Shanghai, China
2010	Investment in K-Air India Gases Pvt. Ltd. in India(Billions of yen)120

Opportunities and Risks
History

Percentage of Revenue by Business(Billions of yen)

• Centralized information about global electronics users anddeveloped the Total Electronics system for timely andappropriate proposal and promotion of the required gases• Developed the industrial machinery and safety equipment business, centered on Southeast Asia

In China, in the bulk gas business, we have been working tocreate a foundation for stable business expansion aiming toincrease production capacity in areas where we have expanded
already, particularly eastern and northeastern China. In Australia,
we implemented rigorous cost management in our mainstay
LP gas business, and secured stable earnings, largely unaffected by fluctuations in procurement costs. The carbon dioxide and dry ice production in Oceania that started in 2019 has
steadily increased its capacity utilization rate, contributing toearnings growth. On the production front lines, we have promoted kaizen (continuous improvement) activities to savecosts and promoted an awareness of curbing increases, which
has contributed to increasing our profit margin.

In the industrial gases business, the Group is strengthening
its business foundation in Southeast Asian countries throughmeasures such as aggressive sales activities, increasing its bulk
gas production capacity, and supplying gases through on-site
pipelines. In the electronics business, we are promoting the
Total Electronics strategy. We have built a new electronicmaterial gases plant in China (Yangzhou) and worked hard toincrease our market share in both East Asia and Southeast
Asia, making use of our competitively priced semiconductormaterials gases.
By region, in the Philippines and India, we are reaping
the benefits from the introduction of excellent productivity
enhancement activities sourced from our European team.

billion

3

2016

2017

2018

2019

2020

2021

0

56%

(Years ended March 31)

Revenue (Left axis)

Industrial gases (Segment income (Right axis)

Medical-related products
Energy: LP gas)
Electronics-related products

Future Outlook
In FYE2022, the Group is forecasting growth in revenue andprofit based on expectations for strong performance in theindustrial gases and electronics businesses, and for the region
overall. In Asia, we have been making capital investments forincreasing production capacity in the bulk gas and electronics
businesses. Moreover, these investments will support ourplans to engage in on-site, large-scale gas supply projects andexpand our gas business outside of air separation gases.
In our initiative for increasing productivity, which started in
2019, we will expand the range of target countries and aim toachieve early results by sharing best practices. Furthermore,

NIPPON SANSO HOLDINGS CORPORATION

we will strengthen management of operating capital,
conducting active investments commensurate with the highgrowth of the region while also creating a base to control
interest-bearing debt.
In 2020, the COVID-19 pandemic brought business continuity plan (BCP) risk to center-stage once again. These plans
enabled us to deliver an uninterrupted supply of gases tosociety and industries in the region, we will ensure the safetyof our employees while reinforcing our structures for business ­continuity as an essential business.

103

INTEGRATED REPORT 2021

OUR STRATEGY

Gas Business in Asia and Oceania
Message from Director in Charge of the Gas Business in Asia and Oceania

We will continue making growth investments
while maintaining our financial structure tocontribute to increasing the corporate valueof the overall Group.

Response to COVID-19
The spread of infection had a significant impact on this segment, particularly in the first half of the fiscal year. During the
pandemic, our local subsidiaries looked to ensure the safetyof their employees while responding to their social mission ofproviding a reliable supply of industrial gases such as oxygen,
which are essential for daily life and economic activities in eachcountry. This situation remains unchanged at the present. Fromthe second quarter, China and Vietnam led the region onto a
recovery track, and all countries are now gradually moving outof the shadow of COVID-19. Coming into 2021, India andIndonesia saw temporary spikes in case numbers, and weworked to address this grave social issue locally by engaging
in full capacity production and shipment of medical oxygen,providing oxygen enrichment equipment across the entire Group,and lending containers out to meet the need for urgent
exports from Group companies in the surrounding countries.
To address supply chain disruption caused by the pandemic,
particularly with regard to electronic materials gases, which area global product, we made every effort to maintain reliablesupplies through cooperation within the Nippon Sanso
Holdings Group. With the increase of data traffic in every
country, including the promotion of teleworking, demand forPCs, tablets, and servers has increased, driving a rapid increase
in attendant demand for electronic materials gases for use inelectronics. Since before the pandemic, there have been concerns regarding whether we could maintain supplies of U.S.produced electronic materials gases in China due to trade
friction between the two countries. We responded to theseconcerns by strengthening our coordination with customers
and stockpiling adequate inventories for security. However,during this pandemic, we are striving to provide reliable supplies
to meet soaring demand, such as rapidly making logistics
arrangements and utilizing air cargo transport within Asia.
In organization management, our top priorities have been tocomply with COVID-19-related regulations in each country,
and to ensure the safety of our employees and their families.
We introduced rotating shifts and telework as soon as the firstwave of the pandemic arrived in each country, and implemented rigorous workplace hygiene measures. The earlystages of the pandemic was a time of great turbulence for ourGroup companies in China, and we sent urgent shipments ofmasks and protective gear from Japan for all our employees andtheir families, with the entire Group supporting their business
operations during the pandemic. In addition, in relation to theGroupwide ban on overseas business travel, we added newprovisions to the articles of incorporation of Group companies
where necessary to allow Board of Directors’ meetings to be
conducted by video conferencing and prepared environments
for remote operations such as engineering operation support.
As a form of communication to take the place of face-to-facemeetings, we started monthly reporting meetings connectingwith each company by video, among other operating methods
for overseas companies under the new normal. Through these
efforts, we are employing safe and diverse methods to maintain communication on a par with pre-pandemic levels.

Initiatives to Realize Both Sustainability and Earnings

Tsutomu Moroishi
Senior Executive Officer,
Group Corporate Planning Office** The Oceania and Asia Management Division
has been established within the Group Corporate
Planning Office to oversee business promotion
for companies in Asia and Oceania.

our ideals and the situation in each country, and promoted the
Nippon Sanso brand. In addition, we utilized IT to enable monthly
communication with the top management of each company.
In this way, we have built an agile management structure thatcan respond to changes in the business environment.
Opportunities for growth investments abound, with Group
companies presenting excellent investment propositions almost
every week. For now, management is prepared to shoulder aheavier investment burden. Fund procurement is essential forcarrying out investment, but interest rates are generally higher
in Asia than in advanced countries, creating a heavy interest
burden on borrowings. Therefore, our first priority is tostrengthen earnings from existing businesses to supplement
operating cash flow, and our second is to take steps to manage
and reduce operating capital. To manage receivables, inventories, and payables at each company, we created an optimal
structure leveraging the Group’s comprehensive capabilities
and promoted awareness of capital efficiency among all
employees. As a result, we have succeeded in maintaining
and improving our financial structure, even while continuing
to make growth investments. This will contribute to increasing
the corporate value of the overall Group.

The Gas Business in Asia and Oceania still has room to growcompared to the other three geographic hubs, and each company
in the region is still operating its business at the level of anindividual company. As such, they do not necessarily each havea full complement of functions, and at this stage it is not realistic
to equip them all. Therefore, it is more effective to provide
engineering support from Singapore and Tokyo, as well as safety
support. At the same time, this region has greater growth potential than others, and the Group is leveraging its comprehensive
capabilities to capture the abundant business opportunities accurately and swiftly. This will enable us to maintain a highgrowth rate going forward. It also means that it is importantfor us to secure human resources. Fortunately, we have an
excellent team of local managers, and the executive class that
supports them will also be enhanced over the coming years.
The difficulty in managing the region from the Company’shead office is partly due to the wide-ranging, multiregional
scope of the operating companies. To address this, we havemade efforts to cultivate a sense of unity among the Group
companies in the region. For example, after the launch of
Nippon Sanso Holdings we shared the Group’s corporate
philosophy and formulated the management vision reflecting

Comments from the Person in Charge

society and reducing the amounts of waste water and hazardous waste generated.
To ensure employee job satisfaction through human resources
development activities, weenhanced the human resources
development programs at ourSingapore regional holding
company. Select members participated in regular seminars,
with representatives of local
subsidiaries providing lectures
based on their personal experiences. These and other activities
are part of initiatives to sharethe management ideas of local
top managers.
Human resources development program

In Asia, the wave of COVID-19 infections continues as before,
and every company has been obliged to continue with remote
working, or working in an environment with infection prevention
measures in place. While implementing these measures properly
and ensuring the safety of employees, we have continued toprovide reliable supplies to our customers. We will engage insustainability centered on making uninterrupted contributions
to local communities in each country and promoting businessactivities that will earn the trust of local customers and companies while providing individual employees with satisfying jobs.
Safety initiatives are still important measures, and we havetherefore taken steps such as increasing our personnel andintroducing safety equipment, which has led to a decrease in
accidents. Looking ahead, in addition to safety, we will focus
on training and allocation of human resources with an eye toenvironmental measures, such as contributing to a carbon-neutral

We will continue to build relationships with customers and suppliers,
aiming to provide high-quality solutions.

NIPPON SANSO HOLDINGS SINGAPORELEADERSHIP DEVELOPMENT PROGRAMMECUSTOMER FOCUS. INITIATIVE.

Todd D. Givens
Senior General Manager,
Total Electronics Strategy,Group Corporate Planning,
Nippon Sanso Holdings

Nippon Sanso Holdings’ Total Electronics group has been focusing on the global semiconductor
industry. Several investments in the semiconductor gas manufacturing business have enabled
growth in our business.
The Company has also focused on enhancing its logistic capabilities to meet global demands
in different locations. Extensive work has been done to the global quality and safety systems at
our manufacturing facilities to ensure standards are consistent at all locations. Going forward
the Total Electronics group will work closely with customers to manufacture and source more
local products and ensure quality control upon delivery. Strategic Account Managers are continuing to build relationships with customers and suppliers to provide semiconductor gases,
chemicals, safety, equipment all at the quality Nippon Sanso Holdings is famous for.

Corporation

conducted in Singapore

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INTEGRATED REPORT 2021

NIPPON SANSO HOLDINGS CORPORATION105

INTEGRATED REPORT 2021

OUR STRATEGY

Thermos BusinessResults for the Fiscal Year
Outline of Business
The Thermos Business is operated by Thermos K.K. in Japan and its Group companies. Thermos K.K. has production subsidiaries
in Malaysia and the Philippines, and a sales subsidiary in South Korea. Furthermore, we have affiliated companies in China,
the United States, and Germany, among others, and through our regional bases we ship Thermos brand products to over 120
countries around with world. In Japan, where we have been working to expand our product domains, our market share hasgrown, reflecting expansion of our product lineup with the new categories of tumblers and cooking utensils, mainly frying pans,
which corresponded with changes in lifestyles and demand due to COVID-19. Furthermore, the company continues to create
new value by flexibly combining vacuum-insulation technologies carefully nurtured as a pioneer in the field of vacuum-insulatedbottles designed for lifestyle comfort under the brand concept of “Thermos Magic.”
Business History Highlights• Pioneered the stainless steel vacuum-insulatedbottle market, and led the shift from glass tostainless steel bottles• Launched Japan’s first sports bottles designed
for drinking directly from the bottle for cold
drinks. These became a hit product creatinga new market• Strengthened lineup of portable vacuum-insulatedmugs (hot and cold use) and used promotions tofirmly establish a lifestyle of using personal bottles.
The JNL series, which led other companies inweight reduction, became a hit product withcumulative sales over 20 million units• Launched a portable soup container for hot
soup, which achieved strong market penetration
due to a boom in residual heat cooking

Bases

In FYE2021, revenue decreased due to a contraction in demandas the spread of COVID-19 from the start of 2020 resulted ina loss of inbound tourism demand as well as restrictions on
travel and going outdoors and school closures due to emergency declarations by national and local governments. In
addition, as plants overseas were ordered to close as a measure to prevent infection, the company was obliged to stop
production from January to February, causing a halt in the
supply of products. This resulted in impacts such as delays in
the launch of new products.
As a result of the above, revenue decreased sharply in the

Revenue and Segment Profit

40

9.0

30

27.5

(Billions of yen)
10.0
8.3
27.0

27.9

9.1
27.8

7.2

Thermos

23.9

¥23.9

5

5.2

10

0

FYE2021

7.5

25.1

20

Headquarters (Thermos K.K.)
Sales office
Manufacturing plant

15%

10

billion

2.5

2016

2017

2018

2019

2020

2021

0

85%

(Years ended March 31)

Japan

Segment income (Right axis)

Overseas

Opportunities and Risks

1904	Commercialized the world’s first glass vacuuminsulated bottle under the Thermos brand1907	Thermos Company established in the
United Kingdom and the United States
1978	Nippon Sanso developed the world’s firststainless steel vacuum-insulated bottle
1989	Acquired the Thermos Company of theUnited Kingdom, the United States, andCanadaLaunched the vacuum-insulated cooking
pot Shuttle Chef®
1998

Launched vacuum-insulated sports bottles

1999

Launched vacuum-insulated portable mugs2001	Established Thermos K.K. through a
corporate split from Nippon Sanso2009

Launched vacuum-insulated food containers

2013

Launched vacuum-insulated tumblers

The company recognizes positive opportunities such as a change inlifestyle focus from the real to the virtual and a social change toward
prioritizing environmental preservation. On the other hand, we recognize threats including commoditization of manufacturing and a shift inconsumption trends from consumption of products to consumption ofservices. Statements about the future in this section are based on theGroup’s judgment as of March 31, 2021.
Growth• Expansion of the market for cooking utensils and stainless steel
Opportunities
tumblers in response to lifestyle changes• Growth in direct-channel sales through the company’s e-commerce
website and directly managed stores• Expansion in the market for environment-friendly products• Growth in sales of products related to the expanding outdoors market
Risks

2014	Acquired German high-quality vacuuminsulated bottle brand, alfi
2018

Percentage of Revenue by Area

(Billions of yen)

Revenue (Left axis)

History

mainstay portable vacuum-insulated mug category. Amid this,efforts to promote the creation of demand for household goods
by expanding the product range resulted in strong growth intumblers and frying pans due to stay-at-home demand. This
led to a strong recovery in operating performance in thesecond half; however, full-year revenue was lower year on
year due to market contraction caused by further state-ofemergency declarations in major centers at the beginning of
2021. Operating profit declined year on year due to the decrease
in revenue, as efforts to reduce advertising expenses and otheractivity expenses were not enough to make up the difference.

• Continued loss of inbound tourism demand associated with a decline invisitors to Japan• Contraction of the holiday-related market due to restrictions on
holidays, leisure, and other outdoor activities• Decrease in purchasing desire due to a slump in consumer confidence

Launched Thermos brand frying pans

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Future Outlook
Our core themes are “increase competitiveness of products,”“expand product range and sales channels,” and “increase
brand value.” We will develop products that have the distinctive character of Thermos, and aim to recover sales of ourmainstay portable vacuum-insulated mugs and achieve further growth. As the market grows for tumblers, we will stimulate it further by expanding the product range, aiming toestablish them as a lifestyle item.
In our sales channels, which have changed due to COVID-19,
we will work to respond accurately to the changes by engaging with the growing e-commerce market and integrating itwith the real market. In addition, we will increase the value of
the Thermos brand even further, carrying out measures to let
consumers experience the joy of Thermos products and thepleasure of using them. In addition, in overseas markets, we

NIPPON SANSO HOLDINGS CORPORATION

will actively optimize our business base in Southeast Asia,and aim to grow and expand after COVID-19 has been controlled. In new business, we will leverage the strengths of ourmain business to develop and promote new businesses.

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OUR STRATEGY

Thermos BusinessMessage from Director in Charge of the Thermos Business

Faced with dramatic changes in lifestyles andrapid market changes, companies must evolve
to keep pace.

Response to COVID-19
We were obliged to close our overseas plants in Malaysia andthe Philippines due to strict measures to prevent the spreadof infection in each country, which had a sizable impact on
product supplies. Currently, we are conducting operations at
each plant while complying with infection prevention orders
from the respective countries’ governments. Furthermore, we
are also looking at options for substitute production to avoid
shocks to the supply chain during emergencies. We place thehighest priority on managing the health of our employees at
every business site, and have implemented measures such as

ensuring mask wearing and disinfection, as well as promoting
unrestricted teleworking. Moreover, at directly operated
stores where employees have direct contact with customers,
we have taken the same measures to prevent infection, andestablished response processes in the event that an infection
does occur. In the retail market, demand for online sales has
risen sharply and people are spending more time at home,which has driven strong growth in products catering to stayat-home demand.

Supply Chain

Organization Management• Implementation of countermeasures at the
manufacturing sites for overseas plants in compliancewith strict guidelines of respective national governments• Promoting teleworking without restricting
the number of days
• Refraining from business meals and meetings(internal and external)• Basic prohibition on overseas business trips and prohibitionof unnecessary or non-urgent domestic business trips• Enforcing disinfection with alcohol upon entry to all
workplaces and mask wearing• Creation of response processes in the event of
infection occurrence• Optimization of logistics sites in Japan and adoption ofmultiple sites from a risk management perspective

Yuji Kataoka
Representative Director and President
Thermos K.K.

distribution services and services to consumers. We will alsobuild and effectively utilize CRM systems.
In addition, based on our corporate philosophy of“Thermos continues to introduce new kinds of lifestyles thatare agreeable to people and society and also environmentallyfriendly,” we will work sincerely toward helping resolve various social issues. We have established a dedicated department to promote the SDGs and plan to expand these
activities companywide.
With lifestyles changing so dramatically, and markets so
rapidly, we recognize that companies must also evolve andchange to keep pace. To this end, training employees as partof human resources development has become even more
important. Alongside this employee training, the company
will also make strategic expenditures for investments in brandadvertising. Finally, in our overseas business, we will expand
sales in the South Korean market and optimize our businesssites in the Southeast Asian markets, which are expected togrow, as we work to establish the Thermos brand there.

The COVID-19 pandemic that has been raging since 2020
has had a significant impact on Thermos K.K.’s business,with huge changes in the market environment and consumers’ lifestyles, as well as the loss of inbound tourism demand
from visitors to Japan. Even in this environment, in FYE2021,
we managed to grow sales, as a boost from stay-at-homedemand for cooking utensils and tumblers sparked by acompanywide expansion into new product domains offset
a steady decline in sales of our mainstay portable vacuuminsulated bottles.
To achieve our business vision of “be a company thatcreates new value and grows continuously,” we face thefollowing four companywide challenges that we are currently
focused on: (1) strengthening proposal capabilities, (2) developing and strengthening human resources, (3) increasing
customer satisfaction, and (4) actively engaging with the SDGs.
Our mission is to continue providing products and services
that satisfy customers, and we will continuously make
improvements, not only to our products but also in our

Initiatives to Realize Both Sustainability and Earnings
With its corporate philosophy of “Thermos continues to introduce new kinds of lifestyles that are agreeable to people andsociety and also environmentally friendly,” Thermos K.K.
approaches management with an awareness of sustainability.
In its environmental policy, the company is committed tousing heat-insulation technology to develop energy-saving
products that contribute to reducing society’s environmental
impact, proposing an environmentally conscious lifestyle, andpromoting awareness activities. The spread of the company’s
core product, portable vacuum-insulated mugs, has led to atrend in using personal bottles that is helping to reduce plastic use. Meanwhile, the Shuttle Chef® series of vacuum-insulated cooking pots and vacuum-insulated soup containers
help to save energy using a heat-retaining cooking method.
The development and spread of these environmentally conscious products has enhanced the brand value for consumers,
and we believe this leads to continuous profits in corporate

NIPPON SANSO HOLDINGS CORPORATION

management. Moreover, we aim to create a society that
achieves both abundance and environmental sustainability
through initiatives to reduce our environmental impact
throughout the entire product life cycle.

Urgent focus on entering and expanding product domains other thanvacuum-insulated bottles

Contributing to reduced environmental impact by promoting the use of
personal bottles

The company’s core business, stainless steel vacuum-insulated bottles, has recorded growing sales
up until now. However, a declining population in Japan’s domestic market is expected to cause
increasingly adverse conditions going forward. To realize our management vision, we are working
daily to tackle various challenges. Among these, while we continue to focus on the task of cultivating and expanding the core business, we also recognize an urgent focus on expanding productdomains other than vacuum-insulated bottles, and we are taking our first steps in this direction.
In 2018, the company entered the market for cooking utensils, mainly frying pans, using the
Thermos brand, which has built a trusted reputation for quality in vacuum-insulated bottles. In
2020, the COVID-19 pandemic arrived, however sales increased steadily driven by stay-at-homedemand, as consumers sought to purchase cooking utensils, and lifestyle changes such as anincrease in dining at home. Looking ahead, we will enter and expand new product domains
with a view to creating value for customers.

Comments from the Person in Charge

Yasuhiro Murakami
General Manager,
Marketing Department
Thermos K.K.

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SECTION

4OUR
MANAGEMENT
Corporate GovernanceNippon Sanso Holdings Corporation engages in constructive dialogue with our
stakeholders, including shareholders, customers, employees, and local communities.
In this way, we build solid relationships while strengthening our management
system to ensure transparency and fairness.

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OUR MANAGEMENT

Corporate GovernancePrinciples of Corporate Governance 

Organizational Changes Effective June 18, 2021 

Nippon Sanso Holdings believes the essence of corporate
governance is to respect the rights of stakeholders and toensure transparency and fairness in decision-making. Thisdefinition includes leveraging management resources effectively to increase the vitality of management through swift
and resolute decision-making.
In October 2020, we changed our name from Taiyo Nippon
Sanso Corporation to Nippon Sanso Holdings Corporation,
becoming a holding company. We transitioned to a holding
company structure for two main reasons: (1) to speed decisionmaking and clarify responsibility for business execution throughthe delegation of authority to each region, and (2) tostrengthen the Group’s overall capabilities by expanding
regional strengths on a global scale.

Furthermore, we redefined our Group Philosophy and Group
Vision in line with this structural transition. We assigned individuals in each region to communicate our new philosophy andvision to employees to bring them on board with groupwide
approval and support. Our new philosophy and vision serve asa base upon which to establish codes of conduct tailored tothe characteristics of each region, facilitating wider dissemination
and acceptance. We recognize that the role of Nippon Sanso
Holdings is to understand and collect information about thesituation in each region, acting as a driver for setting goals
tailored to each location. We aim to achieve sustainablegrowth and enhance corporate value through a management
structure designed to act with speed.

Following the Ordinary General Meeting of Shareholders heldon June 18, 2021, and subsequent meeting of the Board of
Directors, Nippon Sanso Holdings made certain changes tothe position of representative director and officers of theCompany. Toshihiko Hamada was elected as President CEO,replacing Yujiro Ichihara. Mr. Ichihara was elected as Chairmanof the Board of Directors. The Company also appointed Miri
Hara as an outside director. Entering a new fiscal year under
the holding company structure adopted in October 2020, we
have established a management structure that maximizes thefunctions and governance of a holding company to enhance
corporate value further as a global company.

Comment from the Chairman of the Board of Directors

We are building a management structure capable of responding
flexibly to change, and striving to enhance Board effectivenesswhile improving corporate value.
Yujiro Ichihara

Member of the Board, Chairman of the Board of Directors

Corporate Governance Structure 
The Nippon Sanso Holdings Board of Directors consists ofnine directors, three of whom are outside directors. This
Board structure facilitates appropriate management decisions.
The Board of Directors meets monthly to discuss importantmatters and receive reports on the status of Nippon Sanso
Holdings’ businesses. In addition, the Board consists of directors
bringing various skills and experience, and who provide
supervision and make decisions from a diverse range of perspectives. In June 2019, we appointed Thomas Scott Kallman,head of the Gas Business in the United States, and Eduardo
Gil Elejoste, head of the Gas Business in Europe, to the Boardof Directors as a step toward strengthening our global management structure. Since our transition to a holding company
structure in October 2020, the former director in charge of
our industrial gases business in Japan has becamea member of the Board of Directors serving in the capacityof president of the Japanese operating company. In this way,
we have created a more global management structure.

Auditing Structure and Risk Management Structure

General Meeting of Shareholders

Appointment/
dismissal

Appointment/
dismissal

Appointment/dismissal
Audit

Advisory Committee on
Appointments and Remuneration

Audit &
Supervisory Board

Board of Directors

Consultation
Response

Nine members,
three of whom are outside

Appointment/
dismissal

Supervision

Representative Director, President CEO

Four members,
three of whom are outside

Reporting

Independent Auditor

Global Strategy Review Committee

Audit ofoperations
Audit ofaccounts
Coordination

Management
Committee
Corporate
Audit Office

Chairperson: President CEO

Global Risk Management Committee
Chairperson: Representative Director and President CEO

Global Compliance Committee

Internal
audit

Chairperson: CCO

Holding Company Divisions and Affiliated Business Companies

Coordination

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Audit ofaccounts

To begin, I wish to express my heartfelt condolences to those
who have lost loved ones due to the COVID-19 pandemic. I also
wish to express my sincere wishes for the speedy recovery of
those suffering from the illness as well as my deepest gratitude to
the professionals in the medical field who are engaged in fighting
the spread of infection.
The Company shifted to a holding company structure in
October 2020. Since 2014, when I assumed the position ofRepresentative Director, President CEO, we have been enhancing
governance in numerous ways to create a holding company
structure capable of global management, including the establishment of the Principles of Corporate Governance, the addition of
the Advisory Committee on Appointments and Remuneration tocomplement the functions of the Board of Directors, and reviewsof the number and composition of directors (see P.114). Prior to
the transition to a holding company, the boards of directors at
operating companies needed to spend a significant amount oftime not only supervising management but also making decisions
on business execution. This approach to managing operations wasparticularly the case in the Gas Business in Japan. With the transition to a holding company, authority for business execution haslargely been delegated to each operating subsidiary. The transition has increased the speed of management decision-making
while clarifying the roles and responsibilities of the holding company and our operating subsidiaries. The holding company is free
to focus mainly on management supervision. Furthermore, wehave begun to make good progress in our efforts on achieving
the objectives of the transition: to speed up decision-making, toallocate management resources appropriately, and to strengthen
the comprehensive capabilities of the Group.
Looking at the current business environment, however, we
expect that the COVID-19 pandemic will not subside completely
for some time. Apart from the short-term effects of the pandemic, the social environment has also changed in significant

NIPPON SANSO HOLDINGS CORPORATION

ways since the COVID-19 outbreak. The relationship betweensocial issues and business has become more challenging thanever. I have high expectations for our new executive team andhow they will lead the Group in adapting to a changing environment through our businesses as well as how they will leverage
our businesses for enhanced corporate value and better societies.
At the same time, I believe the role of the Board of Directors will
become increasingly important as a supervisory structure thatmonitors management performance from a broad perspective.
I stepped down as President CEO upon the conclusion of our
medium-term management plan, Ortus Stage 2. Based on therecommendations of the Advisory Committee on Appointments
and Remuneration (chaired by an independent outside director),
the Board of Directors selected Director Hamada to be my successor
as President CEO. The Board made this decision for reasons including
strengthening governance, making a generational change withthe development of new and talented managers, and encouraging
flexible responses to a diverse range of changes. At the same time,
we established a new management structure consisting of nine
directors, including three independent outside directors, and a newly
instituted chairman of the Board position. The Board of Directors isa central organization in our corporate governance, and I believe
it is important that we continue to enhance the quality of discussions and pursue greater Board effectiveness. I have led theCompany in my capacity as President CEO, reflecting the adviceof the Advisory Committee on Appointments and Remuneration.
Now, I will serve the Company in a non-executive position as
Chairman of the Board of Directors, bringing my many years ofexperience with the Company to a new position. In this capacity,
I intend to leverage my experience in raising the effectiveness of
the Board of Directors and striving to enhance corporate value as
we explore how best to confront a changing business environment,
how our executive team should perceive and respond to issues,
and whether our strategies are leading in the right direction.

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OUR MANAGEMENT

Corporate GovernanceFeatures of Our Corporate Governance System Meetings, Committees, and Their Respective Functions 

The Board of Directors has created a global management
structure, establishing the Advisory Committee on Appoint­ments and Remuneration and having top executives ofoperating companies in Europe and the United States serve
concurrently as directors of the holding company. These
policies have resulted in direct and lively discussions at
Board meetings.
Even more distinctive is our system that encourages speedy
management while delegating decision-making authority to theoperating companies at each of the four global geographic
hubs and the Thermos Business. We supply a variety of industrial gases, including air separation gases (oxygen, nitrogen,and argon), to a wide array of industries on a global scale.
We are also engaged in diverse activities across a wide rangeof business domains. For this reason, we adopted a corporate
governance model incorporating an Audit & Supervisory Board.
Under this management structure, the Board of Directors
makes decisions on business execution above a certain scale,including M&A and investment. The Audit & Supervisory
Board conducts its own audits of the corporate group. In
so doing, we have answered the need for the type of multivectored evaluations of wide-ranging risks based on expertise
linked more closely with our front lines when it comes tomanagement judgment, decision-making, and supervision.

Measures to Strengthen Corporate Governance

2015

2016

June	Reduced the number of members as provided in our Articles of Incorporation (from 20 or less to 15 or less);
reduced the number of directors (from 16 to 11); and appointed two outside directors to speed decision-making
June–July	Established the position of chief compliance officer (CCO) to ensure effective compliance
Established the Internal Controls Office to assist the CCO
October Established the Principles of Corporate Governance and disclosure policies
June	Established the Advisory Committee on Appointments and Remuneration (consisting of the Chairman, President
CEO, and outside directors) to improve the transparency and objectivity of decisions regarding the appointment
and compensation of officers and other personnel
June	Introduced performance-linked executive compensation tied to the results of the medium-term management plan
as an incentive for medium-term growth

2017

June	Reduced the number of directors from 10 to seven (including two outside directors) to establish further separationof business execution and supervision, as well as to strengthen the supervisory function of the Board of Directors
July 	Established the Information Management Committee to manage information in cooperation with related departments under an appropriate management system

2018

February	Appointed a CCO and regional chief compliance officers (RCCOs) in North America, East Asia, Taiwan, Southeast
Asia, India, and Australia to strengthen the Group compliance system; established global compliance management
regulations, regarded as a unified Group standard; and held a meeting of the Global Compliance Committee,
attended by RCCOs under the global CCO to share information on the status of legal compliance within theGroup, the progress of legal actions, and other topics
June	Established the Technical Academy to serve as an in-house training facility to provide education on security anddisseminate technology from the perspective of technology risk management

2019

March	Appointed RCCOs in Europe
June	Appointed Thomas Scott Kallman (Chairman and CEO, Matheson Tri-Gas, Inc.), who is responsible for the Gas
Business in the United States, and Eduardo Gil Elejoste (Chairman and President, Nippon Gases Euro-Holding
S.L.U.), who is responsible for the Gas Business in Europe, as directors to strengthen our global management
structure for oversight and decision-making from more diverse perspectives

2020

October	Transitioned to a holding company structure and changed company name to Nippon Sanso Holdings Corporation

2021

June	Appointed an additional outside director (from two to three outside directors), increasing the ratio of outside directors to
one-third of the Board of Directors, and thereby diversifying its composition and strengthening its supervisory function

Board of Directors
The Board of Directors determines basic management policies, including key management indicators and medium- tolong-term management strategies. It also determines important matters regarding business execution and oversees theexecution of business by the representative director.

the effectiveness of Group compliance activities. RCCOs meetonce a year to share information on the progress of activities ineach region, to report any compliance violations and legal
actions, and to discuss the annual compliance plan in each region.
Global Strategy Review Committee(Chairperson: Representative Director, President CEO)The Global Strategy Review Committee meets regularly oncea year, or as needed, to deliberate and ensure that we bringthe Group’s comprehensive capabilities to bear on matters as
described below.

Advisory Committee on Appointments and Remuneration(Chairperson: Independent Outside Director)
The Advisory Committee on Appointments and Remunerationis consulted by and provides advice to the Board of Directors
on matters related to the selection of candidates for directors,
Audit & Supervisory Board members, and other appointments
as well as for the appointment and dismissal of the President
CEO and other executive officers. The committee also consults
and provides advice related to plans for fostering the next
generation of human resources and revising internal rules
regarding the remuneration of directors and executive officers.

• Review and update overall strategies related to global products,
technology development, and other Groupwide topics• Consider appropriate resource allocation across the Group andformulate budgets• Formulate and manage the progress of Group management plans• Confirm the status and determine policies regarding sustainability
and the environment for the Group• Confirm the status and determine policies regarding security andquality management for the Group

Audit & Supervisory Board
The Audit & Supervisory Board monitors the Company’s internal
control structure and status of operations. The board also conducts audits of everyday management activities, including thosecarried out by the Board of Directors, through operational andfinancial statement audits.

Global Risk Management Committee(Chairperson: Representative Director, President CEO)The Global Risk Management Committee meets regularly oncea year, or as needed, to deliberate matters as described below
for the improvement of risk management across the Group.
• Make decisions on major changes to important risk management
policies for the Group and other matters related to risk
management• Submit a report for the current fiscal year regarding important risks
in each operating company and the response to said risks; report onplans for the following fiscal year
• Deliberate the selection in response to important Groupwide risks
and formulate response plans for the following fiscal year
• Address other matters related to Group risk management deemednecessary by the chairperson

Management Committee
Based on the Group’s basic policies as determined by the Boardof Directors, the Management Committee deliberates andmakes decisions on important matters related to the execution of duties by the Representative Director, President CEO.
Global Compliance Committee (Chairperson: CCO)
The purpose of the Global Compliance Committee is to ensure

At a meeting of the Board of Directors held in June 2021, we shared the direction we will take to strengthen the Group's overall capabilities under the new structure.

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OUR MANAGEMENT

Corporate Governance

Advisory Committee on Appointments and Remuneration internal rules regarding the compensation of directors andexecutive officers. The committee consists of the Representative
Director, President CEO, the Chairman of the Board of Directors,
and three independent outside directors. At present, Akio
Yamada (independent outside director) chairs the committee.
This structure ensures independence from the parent company inthe selection of our management team as well as the transparency and objectivity of decisions made by the Board of Directors.

We established the Advisory Committee on Appointments andRemuneration as a voluntary advisory body to be consulted
by and provide advice to the Board of Directors on mattersrelated to the selection of candidates for directors and Audit &Supervisory Board members as well as to the appointment anddismissal of the President CEO and other executive officers.
The committee also provides advice related to plans for fostering the next generation of human resources and revising

Audit & Supervisory Board 
The Audit & Supervisory Board conducts its activities inaccordance with audit policies and plans as determined by
the board on an annual basis (see the figure below).
The board strives to improve the effectiveness of audits
through close coordination with the Company’s internal audit
division and independent auditor. The board also engages
in the regular exchange of information and opinions withoutside directors.
We have established an independent office for the Audit &Supervisory Board. This office is staffed with full-time employees who assist members of the board in their duties andunder their direction.

Scope of Audit

Outside Members• Attendance at important internal meetings(Board of Directors’ meetings, Management Committee
meetings, etc.)3• Interviews with directors, executive officers, andother members of senior management• Inspection of important decision-making documents, etc.
* All members serve as full-time members.

compensation packages, and (4) the formulation of management strategies and decisions regarding the execution ofimportant business operations. In addition to these topics,
the most recent questionnaire asked the opinion of directors
regarding which activities were effective or ineffective in relation to the Company’s transition to a holding company structure on October 1, 2020. We also asked which areas theBoard of Directors of the holding company should focus onin future discussions and monitoring.

• Audits of domestic and overseas Group companies

Independent Outside Members: 2

NIPPON SANSO HOLDINGS CORPORATIONThe questionnaire is
explained and­distributed to­directors at the
February Board of
Directors’ meeting.

Board members meetin April to evaluate
the current status of
the effectiveness of
the Board of
Directors based on
opinions submitted
in the questionnaire.

Each director­completes the questionnaire and­submits it to thechairman of theBoard of Directors.

The Board of
Directors discusses
issues and measures
for improvement.

Overview of Evaluation Results for FYE2021

Audit & Supervisory Board Structure1

Our Principles of Corporate Governance stipulate that theBoard of Directors conducts an annual analysis and evaluationof Board effectiveness, disclosing the results in a timely andappropriate manner. We conduct this evaluation via questionnaires, which are distributed to each director. The questionnaire covers: (1) management supervision in general, (2) the
development of internal control systems, (3) the selection,
appointment, dismissal, and evaluation of the President CEO
and other members of the management team and respective
Evaluation Process

The Audit & Supervisory Board is an independent body
entrusted by the shareholders to audit the decision-making
process of directors and the state of business execution by
management. The board conducts its business in accordancewith applicable laws, regulations, the Company’s Articles ofIncorporation, and other rules.
The Audit & Supervisory Board consists of four full-timemembers, including three outside members (two of whom are
independent outside members). Each member of the board
engages in audit activities from a neutral and objective perspective, bringing their expertise to the audit process. The
board conducts a detailed discussion of the results of its audit
activities, making recommendations as necessary, and striving
to ensure sound management.

Internal Members

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(2) Initiatives conducted in response to the resultsof our previous evaluation• On October 1, 2020, we transitioned to a holding
company structure.
• In conjunction with this transition, we formulated theGroup Philosophy and the Group Vision.
• We created various policies forming the basis of GroupESG initiatives.
• We established Taiyo Nippon Sanso Corporation as
an operating company in Japan and transferred ourdomestic businesses to this company via a corporate
split. In this way, we created a clear division of
responsibility for the Gas Business in Japan segment.
• We nominated a female candidate for director toencourage diversity in the Board of Directors. This
candidate was approved by the Ordinary General
Meeting of Shareholders held on June 18, 2021.

(1) Summary
As a result of the effectiveness evaluation, we confirmedthat the Board of Directors fulfilled its role as required.
However, in order to fulfill this role more appropriately
going forward, at a meeting held on May 14, 2021, theBoard of Directors made the decision to continue deliberations to address required topics for discussion andmonitoring as a Board of Directors of a holding company,
based on suggestions from the chairperson. The deliberations will be part of the formulation of our medium-term
management plan to be implemented in FYE2022. In
particular, many directors expressed an opinion regarding
the urgency of addressing carbon neutrality. In response,
we promptly formed a working group consisting ofGroup company members from around the world tobegin discussions.

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OUR MANAGEMENT

Corporate Governance

Global Strategy Review Committee Overview of Management Training 

The Global Strategy Review Committee meets to confirm thedetails of operating company strategies and discuss optimal
resource allocation across the Group prior to the Nippon Sanso
Holdings’ budget resolutions for the upcoming fiscal year. The
meeting deliberates mainly on the direction of strategies andaction plans for the upcoming fiscal year, confirming whether
strategies are consistent with each other and whether resources

are being allocated in an optimal fashion. The Global Strategy
Review Committee establishes a shared understanding with the
Global Risk Management Committee, considering whether
resources should be invested from the perspective of risk management. Under this approach, the Global Strategy Review
Committee ensures that decisions about Group strategies
and risk management are made in an integrated manner.

Facing an even faster pace of global business, we offer ongoing management training programs to foster decision-making skills
reflecting the broad-based knowledge and insight required of our top managers. One example was a course titled, Business
Strategies and Future Projections for the Next 10 Years. We designed this course to enhance skills for responding to future uncertainties, fostering greater judgment capabilities for top management. Participants learned about the emergence of cutting-edge
technologies and the changes these technologies will bring about in society. The course also provided a framework for managers
to incorporate these emerging technologies in their own business strategies.
Date

Major Agenda Items of the Global Strategy Review Committee Meeting Held for FYE2021(Basic Assumptions) Are assumptions regarding the economic and business environments (basis for forming strategies) appropriate?
(Consistency between Strategies and an Understanding of the Environments) Are strategies and action plans in line with the

Subject

Instructor

TargetOverseas Bribery Regulations

Hiromitsu Miyakawa,Attorney, Jones Day

Sept. 2016

Directors, Audit & Supervisory Board
Members, Executive Officers

Standards of Conduct as a Global Company
and Overseas Antitrust Laws

Akio Yamada,Outside Director

Apr. 2017

Insider Trading Regulations

Takeshi Hosaka, General Manager,
Compliance Training Center,
Directors, Audit & Supervisory Board
Trade Review Department,
Members, Executive Officers
Japan Exchange Group

Nov. 2017

Legal Responsibilities of Directors andAudit & Supervisory Board Members: Knowledge ofCompliance and Required Regulations

Hiroshi Chiba, Attorney,
Chiba Sogo Law Firm

Directors, Audit & Supervisory Board
Members, Executive Officers

Mar. 2018

Work-Style Reform

Takehiko Ebata, Attorney,
Ishizaki & Yamanaka

Directors, Audit & Supervisory Board
Members, Executive Officers

Nov. 2018

Case Studies on Corporate Scandals andRisk Management

Professor Hitoshi Takahashi,
Dokkyo University

Directors, Audit & Supervisory Board
Members, Executive Officers

Mar. 2019

Business Strategies and Future Projections
for the Next 10 Years

Makoto Kawase,
MK and Associates

Directors, Audit & Supervisory Board
Members, Executive Officers, Others

Nov. 2019

Key Points of the SDGs (ESG) and
Strategic Utilization and Engagement

Koichi Yokota,
Project Professor, Keio University

Directors, Audit & Supervisory Board
Members, Executive Officers

Nov. 2020

Legal Obligations, Responsibilities, and Litigation
Risks of Directors and Officers in Connection with
Information Security and Mandated Internal Systems

Hiroyasu Kageshima,
Attorney, Ushijima & Partners

Directors, Audit &Supervisory Board Members(conducted via Zoom)

Mar. 2021

Human Rights Goals of the SDGs andCase Studies of Initiatives

Koichi Yokota,
Project Professor, Keio University

Directors, Audit & Supervisory Board
Members, Executive Officers(conducted via Zoom)

environmental recognition above?
(Consistency with Group Strategy) Are the strategies sufficiently consistent with each other?
(Resource Investments) Are the resource investments under consideration sufficient to achieve stated goals?
(Consistency with Social Issues) Do the strategies and actions under consideration contribute to resolving social issues?

Relationship with the Parent Company 
We concluded a basic agreement with our parent company,
Mitsubishi Chemical Holdings Corporation (MCHC), on
May 13, 2014. Under this agreement, MCHC committed torespecting our autonomy, supporting and cooperating with us
under the MCHC Group Management Regulations. In turn,
we conduct all business functions independently, including
management, finance, sales, and R&D.
In situations where the interests of the parent company
conflict with shareholders other than shareholders of theparent company, the directors of Nippon Sanso Holdings act
to avoid harm to the interests of the shareholders other than
the shareholders of the parent company. We have appointed
three independent outside directors and two full-time independent outside Audit & Supervisory Board members. These
individuals oversee the Company to ensure there are no

conflicts of interest between the parent company and shareholders other than shareholders of the parent company.
Furthermore, we have established the Advisory Committee on
Appointments and Remuneration as a voluntary advisory
body. This committee advises the Board of Directors on theselection of candidates for directors and Audit & Supervisory
Board members as well as the appointment and dismissal of
the President CEO and other executive officers. In this way,
the committee ensures independence from the parent company in the selection of a management team. While parent
company MCHC is a pure holding company, the Nippon
Sanso Holdings Group and Mitsubishi Chemical Corporation,
the main operating company of the MCHC Group, engage intransactions, totaling ¥5,330 million in FYE2021.

Fostering the Next Generation of Management Personnel We recognize that fostering the next generation of management
personnel is an important issue in our Group governancestructure. The Advisory Committee on Appointments andRemuneration has been discussing a development plan forour next generation of managers. Part of these discussions
concerns the qualities required of the next generation ofmanagement and policies for training. As the Nippon Sanso
Holdings Group expands globally, we must develop humanresources who are familiar with not only Japanese businessbut also overseas business. Given this global perspective on
management, we selected Toshihiko Hamada as President
CEO in June 2021 due in part to his extensive experience in
NIPPON SANSO HOLDINGS CORPORATION

overseas operations. We will continue to accelerate ourefforts in global human resources development.
We are aware of the small number of female managers in
our European operations, and we have implemented an active
succession program for women to resolve this issue. In October
2020, each of the 15 participants in this 18-month program
was assigned a member of management, including thePresident CEO, as a mentor. Top managers offer their mentees
the benefit of experience, advice on overcoming challenges,
and more. The program is designed to develop the next generation of managers, and we intend to introduce the program
to other regions based on our success in Europe.
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Corporate GovernanceRisk Management Compliance To respond appropriately to various risks that emerge as we
expand our global business, we recognize risks related tobusiness continuity, as well as general risks that affect corporate growth and our ability to execute business strategy. We
then strive to mitigate these risks.
On October 1, 2020, we transitioned to a holding company
structure and established a new Global Risk Management
Committee (chairperson: Representative Director,
President CEO) to manage risk for the Group. This committee
works closely with the Global Strategy Review Committee,
meeting once a year and on an as-needed basis to perform
comprehensive risk management addressing the management

and business activities of each operating company. The Global
Risk Management Committee meeting held in February 2021
discussed information about the risks recognized for each operating company and the plan–do–check–act (PDCA) cycle
enacted to address these risks. The discussion was motivated bya recognition of the need to identify risks and take action basedon forward-looking decisions. In this way, we ensure that theGroup will execute the business strategies developed by the
Global Strategy Review Committee. In preparation for the next
meeting, scheduled in February 2022, we are examining ways
to develop an ideal risk management system for the Group.

Risks

Major Initiatives

Overseas
Expansion• Impact on business activities, operating results, and financial position due to market trends, politics,
economics, customs, religion, terrorism, large-scale disasters, and other factors in the countries andregions where we operate
Capital• Decline in utilization rates or the need for all/part of Company facilities due to a slowdown in
Investment
operations among major customers caused by changes in industrial structure or demand trends ordue to consolidation, elimination, or transfer of production bases overseas• Losses on disposal of equipment and other losses not covered by contractual compensation
Manufacturing• Significant rise in electricity costs, which account for a large part of manufacturing costs for mainstay
Costs
products, due to factors such as soaring oil and LNG prices as well as exchange rate fluctuations• Impact of shifts to renewable energy in the electricity markets, particularly in Europe
Laws and• Costs related to unexpected changes in laws and regulations, new laws and regulations, andRegulations
administrative guidance in overseas locations• Decline in exports of products and services to certain countries due to tightened export regulations
caused by changes in international conditions
Securing Human • Impact on business activities and operating results in the event the Company is unable to secure theResources
human resources necessary for maintaining and expanding business activities as planned due tochanges in the employment situation or labor supply and demand
Technological• Missing market launch windows due to major changes in relevant market conditions
Development• Decline in the competitiveness of Group products due to new technologies, new products, oralternative products launched by other companies• Risk of failure to collaborate in industry–government–academia projects or in joint development
initiatives with other companies
Intellectual• Potential that intellectual property rights are not sufficient to protect technologies and products
Property• Infringement or unauthorized use of Group intellectual property rights by third parties
Product Safety
and Security• Loss of customer trust due to defects, poor quality, or malfunctions• Impact on operating results and financial position due to payments in compensation
for damages, etc.

Fluctuations in
Exchange andInterest Rates• Impact on operating results and financial position due to dramatic fluctuations in exchange rates• Impact on operating results and financial position due to interest rate fluctuations

CapitalRelationshipwith Mitsubishi
ChemicalHoldings
Goodwill andIntangible
Assets• Significant impact to the Group’s business management, performance, and financial position in
the event that the capital relationship with Mitsubishi Chemical Holdings Corporation changes in
the future

Large-Scale
NaturalDisasters, Etc.

• Significant damage to business locations due to earthquakes or other natural disasters• Impact on business activities and operating results due to major accidents, major outbreaks of
diseases, or other unforeseen circumstances, including human factors• Damage to corporate value and loss of social credibility in the event of an information leak due tounforeseen circumstances• Compensation payments to customers and other related parties affected by the leak and loss ofmarket competitiveness• Impact on the operating results of the industrial gases business, which emits large amounts of GHG
indirectly, in connection with new gas emission regulations in countries where we conduct business• Impact on manufacturing sites due to increased natural disasters caused by climate change andshortage of water resources resulting from drought• Increased electricity used in the raw air compressors of air separation equipment due to higher
power load caused by rises in average global temperatures• Impact on operating results and financial position due to fewer shipments and decreased use ofindustrial gases as the spread of vaccine-resistant variant strains slows the global economy again

Information
Management

Climate Change
and Other
Environmental
Issues

Impact of
COVID-19• Impact on the Group’s business performance and financial position in the event that recoverable
amounts decrease significantly causing impairment losses

NIPPON SANSO HOLDINGS CORPORATION

120•G ive due consideration to changes in the business environment and expected profitability
in countries and regions overseas when making decisions regarding capital investment andM&A overseas•G ive due consideration to expected profitability and changes in the business environment when
making decisions regarding capital investment• Identify customer and market environment changes, considering risks and appropriate risk
mitigation measures• Incorporate costs into prices based on customer relationships and engage in other means to avoid
difficulties in Group business continuity due to manufacturing cost fluctuations• Implement measures (employee training, etc.) to prevent legal and regulatory violations andensure compliance with laws and regulations in countries where we conduct business• E stablish and operate an export control system and provide detailed employee education onexport regulations• Establish a system to secure human resources necessary for maintaining and expanding business activities•D esign and operate appropriate human resources-related systems, including recruitment, training,and compensation• E ngage in R&D based on the Stage-Gate* model to commercialize projects and generate profits• F ocus on strengthening collaboration in industry–government–academia projects and in joint
development initiatives with other companies* A methodology for narrowing down a large number of product and technology development
candidates in an efficient manner• E stablish a system to protect intellectual property necessary for maintaining and expanding
business activities• S urvey and monitor intellectual property rights of third parties• E ngage in appropriate management of risks arising from products handled by the Group,
including safety and quality control• P rovide technical training to personnel engaged in the manufacture and supply of products toensure appropriate management• F ocus on avoiding exchange rate fluctuation risks for transactions denominated in foreign
currencies by means of forward exchange contracts, etc.
•C onsider future interest rate fluctuation risks before procuring funds necessary for capital
investment and M&A through loans from external sources• The Group recognizes that there is currently no policy to increase or decrease theshareholding ratio.

•C onduct impairment testing each period to measure goodwill and intangible assets with indefinite
useful lives• If environmental changes mean that the initial investment recovery can no longer be expected,
apply appropriate accounting treatment as necessary• E stablish an information collection system based on BCPs, and ensure the continuation of corebusinesses and a rapid return to normal operations in the event of an emergency• E stablish an appropriate information management system to protect important Group businessinformation, including personal information• P rovide ongoing education to employees on information security and related issues• P ursue Companywide environmental management and endorse the recommendations of the TCFD
• S urvey trends related to GHG emission regulations and other statutes in countries where we
conduct business; consider and implement appropriate response measures

In accordance with the basic compliance policy established for
the Group, we appointed a chief compliance officer (CCO) for
the Company and regional chief compliance officers (RCCOs)
in every region overseas. The CCO conducts training in linewith compliance risks in Japan and overseas, clarifying rules
for responding to compliance violations and communicatingthese rules to all Group companies. The CCO and RCCOs
have the authority to instruct and oversee compliance activities, striving to improve and gain support for complianceacross the Group.
In addition, we conduct compliance education on an ongoing basis and at all employee levels. Taiyo Nippon Sanso holds
annual organization-specific training programs for employees
to learn the essentials of compliance, anti-monopoly laws,
and anti-harassment laws. These training programs are also
designed to instill in our employees an awareness and desire
to improve compliance. One unique feature of this training isthat it is conducted by compliance staff in each division,
branch, and major subsidiary. This framework allows us tocommunicate and convey the implications and importanceof compliance from a perspective closer to the front lines ofour businesses. In light of the change in work styles due to
COVID-19, we conducted training via online technology andvideo broadcasts throughout FYE2021. In this way, we areraising compliance awareness in the most time-sensitive andefficient manner possible.
RCCOs are leading our operations in Southeast Asia, working closely with Group company compliance staff. Under thissystem, each country in the region selects and implements its
own education and training program based on risk assessments related to compliance. At the same time, Group companies in the region observe a joint Compliance Development
Week (CDW), striving for consistency in regional compliance.

Comment from the CCO

Creating an open workplace environment is essential
for encouraging compliance.
Kazuyuki Futamata M anaging Executive Officer, Chief Compliance Officer (CCO),(Taiyo Nippon Sanso Corporation Group CCO), with responsibility for groupwide internal control

Another important initiative is creating an open workplaceculture. Compliance requires a workplace environment inwhich employees feel comfortable discussing concerns with
their supervisors and others. Our goal is to foster a culture of
openness throughout the Group, encouraging employees toraise concerns with each other, even in areas not related totheir own job or workplace. The role of management in theworkplace is the key to achieving this type of culture. We willcontinue to improve the skills of our managers from this perspective of compliance.

We understand that compliance is one of our most importantmanagement issues. The Nippon Sanso Holdings Group does
not consider compliance to be the simple observance of laws
and regulations; rather, we believe in compliance in an evenbroader sense that encompasses customer contracts andagreements with local communities, internal company rules,
corporate ethics, and compliance with social norms.
To ensure this kind of compliance, we engage in a numberof measures as already mentioned. However, the mostimportant measure we take is education. The RCCOs ofeach operating company drive effective training based on
the situation in each region, using online and other channels
to ensure ongoing and regular training for every employee
in the Group.

• E ngage in efforts to prevent infection among personnel in manufacturing, supply, and sales•G ather information on supplier production plans and demand trends

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Roundtable
Discussion (4)対談

Appointment of new president and the Company’s
first female outside director

Akio Yamada
Outside Director

Mitsuhiro Katsumaru
Outside Director

Miri Hara
Outside Director

The Role of Outside Directors
in Encouraging Officers andEmployees Striving to Solve Issues
In June 2021, our new president, Toshihiko Hamada, was appointed. We also added our firstfemale outside director and established the position of Chairman of the Board of Directors.
What issues need to be addressed regarding the operation of this new management
framework for the Nippon Sanso Holdings Group? In this section, our three outside

part of our new management structure, last year Kenji Nagata
was appointed president of Taiyo Nippon Sanso Corporation,
our operating company for the Gas Business in Japan.
President Nagata has an extensive knowledge of all fields
connected to industrial gases and an extremely ambitious vision.
He has led the organization proactively since his appointment.
KATSUMARU To decide on the successor to former President		
Ichihara, the Advisory Committee on Appointments andRemuneration had numerous discussions over several years.
What kind of person is suitable for leading the Group as a
global organization? We felt the criteria for the ideal person
would be someone with the ability to properly maintain the
expanded global structure and continue to develop it, andsomeone with the requisite ambition, vitality, and drive.
After considering various people, the committee judged that
Director Hamada would be the most suitable. He has morethan 10 years of experience working in the United States andhas a close relationship with director of the Company andMatheson Tri-Gas, Inc. Chairman and CEO Thomas Scott
Kallman. He also has an international sensitivity that enables
him to work well with director of the Company and Nippon
Gases Euro-Holding S.L.U. Chairman and President Eduardo
Gil Elejoste. We also expect him to work closely on the challenges facing our core Gas Business in Japan with President
Nagata of Taiyo Nippon Sanso Corporation.
YAMADA		
Right now we are formulating the medium-term
management plan under the structure with our new president, Mr. Hamada. Furthermore, with his abundant management experience, former President Ichihara has been appointed
Chairman of the Board of Directors and is expected to provide
direction on governance in general and play a role in setting
the holding company structure on a stable path.
KATSUMARU Mr. Ichihara himself said that he wanted to		step down sooner. However, at the same time the major
business acquisition projects in the United States and Europe,and the global COVID-19 pandemic occurred. With the economies of Japan and countries around the world currently
stalled, we now need to organize our industrial gases
businesses in our four geographic hubs and the Thermos
Business. We also have to take action on new issues, such ascarbon neutrality. To navigate successfully through this phase,
we asked former President Ichihara to remain with theCompany as Chairman of the Board of Directors and to lend
a hand from a position of experience until President Hamada
has established a firm footing.

KATSUMARU In 2021, there were two major topics related to		our management structure. The first is the appointment ofToshihiko Hamada as the new president. The second is having
Miri Hara join our management team as an outside director.
We have had numerous discussions on appointing women
to the Board of Directors, and have met with quite a few
candidates. To say that anyone would do as long as they
were female would be to get our priorities backwards, andit was rather difficult to find someone we believed to besuitable. With that said, we have now been able to welcome
Ms. Hara as the Company’s first female outside director,
resolving an issue that has been a concern for the past few
years. I look forward to hearing advice from a female
perspective going forward.
		 HARAThank you for inviting me aboard. After graduating from university, I joined a real estate management company operated by my family. It was an environment thatafforded me no contact whatsoever with the front lines ofmanufacturing, such as factories. Subsequently, I married andstarted a family, and once my children reached a certain age I
acquired my tax accountant’s qualification and opened a tax
accounting office in Yokohama. Through this connection, in
2020 I was appointed as an outside director of a listed company. I was the first female director at that company as well.
At the time, I felt that my role was to embody diversity, and at
Nippon Sanso Holdings I believe that my role will be similar,
promoting diversity and gender equality. As a corporategroup operating a global network of four geographic hubs
and the Thermos Business, the Company must develop theability to appoint proper female executives going forward.
I hope that I can offer some assistance in this regard.
KATSUMARU At this point, I would like to mention the perfor		
mance record of our former president, Yujiro Ichihara. Mr.
Ichihara was president for seven years, and has now beensucceeded by Mr. Hamada our new president. During Mr.
Ichihara’s tenure we conducted major business acquisitions in
the United States and Europe, and Nippon Sanso Holdings
grew into a global company—a significant achievement.
YAMADA		
I think that former President Ichihara’s achievements are significant, as you say. He chose the path ofgeographic expansion to grow the Company. He also madethe extremely bold management decision to acquire the business that was ordered to be split off by the authorities as acondition for the merger of Linde and Praxair. In addition, as

directors talk about issues ranging from carbon neutrality to work styles for women.

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Roundtable Discussion (4)The Role of Outside Directors in Encouraging Officers and Employees Striving to Solve Issues

Promoting governance, Group synergies, and better
management efficiency for the holding company

achievement of post-integration synergies and their results?
Due to the COVID-19 pandemic, Board of Directors’ meetings
have been held online. This has allowed us to listen directly to
updates from our top managers at overseas operations, aswell as ask questions and exchange opinions with them togain a better understanding of one another. We have also
made progress in delegating authority, allowing each region
to operate flexibly, including making investments. Don’t you
think this has increased the speed of management? Also,
I believe that there have been synergies between the Global
Strategy Review Committee and the Global Risk Management
Committee, and that global sharing of best practices and risk
issues has widened our activities for increasing productivity
and avoiding risk.
KATSUMARU The Global Strategy Review Committee and		Global Risk Management Committee meetings are also heldwith the Company’s top managers in Japan, the UnitedStates, and Europe, along with other relevant personnel.
This year, both meetings were held in February. At the Global
Strategy Review Committee meeting, each operating company’s strategies for business, investment, sustainability,
development, and so forth were reported and discussed.
This is an important meeting for the holding company indetermining its basic policies. The report this year from
Europe at the Global Risk Management Committee meeting
was particularly striking. The meeting participants were allvery impressed at how advanced Europe is in terms of its
governance structure and its risk management methods andinitiatives. The Company has acquired experience in Japan
and North America, but it has only just begun operating inEurope. So, the experience and knowledge of Europe are new
to the Company, and there is much to learn. I think that postintegration synergies will emerge in various forms like thisgoing forward.
YAMADA		
Next, turning to medium- and long-term issues,
let’s talk about how the Company will approach the realization of a carbon-neutral society by 2050. In the area of hydrogen, which is drawing attention as a substitute for fossil fuels,
the Company has developed and sold packaged hydrogenstations for FCVs. In relation to industrial gas supplies, theCompany has also had some achievement, such as providing
technologies that enhance combustion efficiency for users.
KATSUMARU The use of hydrogen is certainly going to be a		major topic for the world going forward. The Group’s acquisition of the HyCO business will deepen its involvement withhydrogen through the business not only in the United States
but more widely in other areas as well. As an industrial gases
company, I think that we will need to engage with hydrogen,including hydrogen stations. Right now, we are still at the

YAMADA		
Ms. Hara, you have attended two Board of
Directors’ meetings since your appointment. What wasyour impression?
		 HARAEveryone spoke out without reserve, and I
thought that it was functioning properly as a Board of
Directors.
KATSUMARU Mr. Yamada and I came on board six years ago,		when the Company was Taiyo Nippon Sanso Corporation.
Japan’s Corporate Governance Code had just been issued,and employees at the time were faithfully and steadily implementing it. Now, the Company has implemented the Code as
well as any other company. In 2021, the Code was revised,but having steadily implemented it for these past few years
I am sure the Company will overcome any new challenges.
In this area, I believe that outside directors have an extremely
large role to play. I think that our role is to encourage employees to try even harder as they earnestly strive to implement
the Code.
YAMADA		I also think that the Company has made huge
strides in the area of corporate governance. After starting theholding company structure, the Company quickly formed a
global team for drafting the Group Philosophy, Group Vision,and Policy, and created them through a process of sincere
discussion among the Board of Directors. I would like to see
the Company work to promote awareness of these throughout the Group, while flexibly revising them where needed
even after their formulation.
I agree with you about the role and responsibilities of outside directors. Also, one of the issues related to governancethat has been pointed out previously is the issue relating tolisted subsidiaries.
KATSUMARU 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, where both theparent and subsidiary are listed companies, the protectionof minority interests becomes an issue. However, Mitsubishi
Chemical Holdings and the Company have an agreement that
the Company’s autonomy over corporate governance is to berespected. Furthermore, there is a systematic guarantee dueto the independence of the outside directors. In this regard,
the three of us realize that we have an important role to play.
YAMADA		
Some kind of directive may be issued later basedon the revised guidelines from the Tokyo Stock Exchange.
If that happens, we will discuss it and respond as necessary.
Changing the subject, what are your thoughts on the

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stage where serious internal discussions have just started,but I believe that the Company’s accumulated technologicalcapabilities will enable it to produce results.
YAMADA		
There is also some discussion, including among
ourselves, about the Company’s response to ESG for promoting sustainable growth. The next medium-term management
plan, which is currently being formulated, will include moredetails about this. I am anxious to see what kind of business
opportunities there are for hydrogen energy, and whether itwill succeed as a business that can contribute to society.
Moreover, it has been some time since the “Fourth
Industrial Revolution” was heralded, but I think that DX is
extremely important. It seems that the COVID-19 pandemic
has really changed the nature of society. Industrial gases
are dangerous if mishandled, and DX enables us to operate
and manage them safely and stably from a remote location.
I would also like to see the entire Group engage in DX witha view to increasing the efficiency of its production and logistics operations.
KATSUMARU This is not really an issue, per se, but from a		sustainability perspective I think that Thermos K.K. is anextremely important company for the Group. The industrial
gases business is a B2B business, so even if the business activities are sustainable they don’t really make an impression
on ordinary people. By contrast, the Thermos brand has anextremely healthy and sustainable image. At a recent Board of
Directors’ meeting, we were saying we should stop providing
PET bottles for every seat and just have everyone use theirown Thermos. If we did this, it would raise awareness within
the Group itself. There is no doubt that PET bottles will disappear eventually. At this time, it is important for Thermos toproject a sustainable image, as I believe it is an important
brand for lifting the image of the Group overall.

One employee in her 50s stated that long ago some places
were considered to be “men’s workplaces,” whereas nowadays there has been a real increase in women in terms ofrecruitment. One really commendable thing I heard was thatwhile in the past the work of career track, general track, andtemporary employees was separated, now even temporary
employees are encouraged to offer their opinions, which may
also be reflected in operations. I also heard some women saythat even if you take maternity leave, your place is reserved
and that you can start working right away on your return,and that the Company is comfortable to work in. Some of theemployees commented that given the opportunity they would
like to ascend further up the career ladder and become
officers.
KATSUMARU The Advisory Committee on Appointments and		
Remuneration has also discussed this. For example, if wewere to more strongly adopt a system based more on ability,
we may need to completely review the promotion system.
Under a personnel policy like that, we would elevate talented
female employees. I think this is the kind of system that weshould have. Now that the Company has acquired companies
in the United States and Europe, I have come to feel thatJapan’s productivity is low. This is not to say that Taiyo Nippon
Sanso Corporation is performing poorly, or anything like that,just that Japan itself probably has an inefficient system. I thinkthat a radical overhaul of employee compensation and theevaluation system, and a more proactive effort to incorporate
ability-based evaluations, would improve productivity. In theprocess of radically revising the personnel evaluation andpromotion systems to make them more efficient, promoting
a group of women all at once could be an option.
YAMADA		
Once you have had the time to better grasp thesituation, I hope you will help us to resolve these issues.
Amid the COVID-19 pandemic, the Group’s business has
been described as an “essential business.” For example,
Nippon Megacare Corporation and IMI Co., Ltd. are subsidiaries that sell medical gases and ventilators, and during the
pandemic they have kept up an uninterrupted supply of medical oxygen and so forth to medical institutions. Moreover,industrial gases are supplied as essential inputs for all kindof industries, supporting many industries’ economic activities.
At the annual General Meeting of Shareholders, several
people expressed the opinion that the Group should use
innovative public relations to communicate to the public andshareholders about the status and importance of its businessactivities in a way that is easy to understand.
		 HARAI hope to gain a deeper understanding of industrial gases as an essential business, and to contribute to thefurther development of the Group.

Aiming to be a workplace where women canparticipate actively
KATSUMARU I would like to ask Ms. Hara about the work style		
of women. I think this is a theme that you will come up again
as a director going forward.
		 HARAThe issues are not yet clear to me since I have
only just started here. But the other day I held a Zoom meeting with female employees. They were at different life stages,
in their 20s, 40s, 50s, and some were corporate officers. They
had various career backgrounds; some had joined as generalemployees while others had started as temporary staff andthen become regular employees. It was an extremely valuable
experience. They commented that the gap between men andwomen has been definitely decreasing compared to the past.

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Members of the Board of Directors and Audit & Supervisory Board Members

Members of the Board of Directors 
Number of shares owned:
5,500 shares
Attendance at Board of Directors’ meetings:
8 of 8 meetings
Committee assignments:
Advisory Committee on Appointments
and Remuneration,
Management Committee,
Global Strategy Review Committee,
Global Risk Management Committee

Toshihiko Hamada
Representative Director, President CEO

Number of shares owned:
0 shares

April
1981 Joined the Company
July
2002 Executive vice president responsible for Specialty Gas Technology, Matheson Tri-Gas, Inc.
October 2005 Deputy general manager of Semiconductor Gas Section of Electronics Division, the Company
April2006 General manager of Semiconductor Gas Section of Electronics Division, the Company
January 2010	Subordinate directly to general manager of Electronics Division and general manager of Business Strategy Promotion
Section, the Company
June2014 Managing director, Nissan TANAKA CorporationJune
2016 Senior managing director, Nissan TANAKA CorporationJune
2017 President and representative director, Nissan TANAKA Corporation
June
2020 Director, executive vice president of the Company (Aide to the President)
June
2021 Representative Director, President CEO (current)

I joined the Company in 1981, along with many of my peers in senior management. I began my career in planning and sales at our
specialty gas business. I also have some experience in the electronics-related business; but my background is chemical engineering, so
I am very familiar with nitrogen generators as well as fusion welding equipment. I worked at Matheson Tri-Gas, Inc. on two separate
occasions for nearly 14 years in total, and I have been to 44 of the U.S. states for either business or pleasure. I enjoy exercise, particularly
swimming and hiking. More recently, however, I have been spending time in my vegetable garden and caring for my bonsai trees.
I do not ascribe to any lofty mottoes, but I try to take responsibility for anything that happens to me, good or bad. I also try topractice mindfulness in observing what happens around me.

Attendance at Board of Directors’ meetings:
10 of 11 meetings
Committee assignments:
Global Strategy Review Committee,
Global Risk Management Committee

Thomas Scott Kallman
Member of the Board,
Chairman and CEO, Matheson Tri-Gas, Inc

Matheson Tri-Gas (MTG) gave me the opportunity to join their Team in January 2005 as the Executive Vice President of the Industrial
Gas Group. My previous assignments within the industrial gas industry included both industrial and electronic and specialty gas sales,
on-site plant sales, sales and operations management, and a role as Vice President of a major industrial gas business unit. This combination of broad sales and operations experience has proven to be a solid foundation for overseeing the MTG portfolio of industrial andelectronics gas businesses. Having managed these functions at the ground level and higher has provided me the insights into criticalaspects of our operations, which is important to ensure the Safety, Quality, Compliance, Sustainability, and Profitable Growth of thebusiness. Though sometimes challenging, I subscribe to the motto of “focus on what really matters and what you can control.”Number of shares owned:
0 shares
Number of shares owned:
83,100 shares

April
June

Attendance at Board of Directors’ meetings:
11 of 11 meetings

June

Committee assignments:
Advisory Committee on Appointments
and Remuneration,
Global Strategy Review Committee,
Global Risk Management Committee

Yujiro Ichihara
Member of the Board,
Chairman of the Board of Directors

June
April
June
June
June
June

I joined the Company in 1974, transferring to Singapore in my seventh year. At that time, the Company had just made inroads into
overseas markets, and I was responsible for developing industrial gas customers in six ASEAN countries. After returning to Japan,
I worked for a long time in finance and corporate planning. In addition to my experiences overseas early in my career, I had many
opportunities to support corporate management at different times and in various aspects. Looking back now, I think those experiences
helped me develop a manager’s perspective and eye for the big picture. A motto I keep in mind is “always be positive.” Stick to thebasics and be bold when the situation demands.

Number of shares owned:
11,000 shares

Committee assignments:
Global Strategy Review Committee,
Global Risk Management Committee

Member of the Board,
Representative Director and President,
Taiyo Nippon Sanso Corporation

Committee assignments:
Global Strategy Review Committee,
Global Risk Management Committee

Eduardo Gil Elejoste
Member of the Board,
Chairman and President,
Nippon Gases Euro-Holding S.L.U.

1981 Joined the Company
2013 Executive officer, general manager of North Kanto Branch2016	Executive officer, deputy general manager of Industrial Gases Division, general manager of Gases Business Unit,
and general manager of Product Management Unit
June
2016	Senior executive officer, deputy general manager of Industrial Gases Division, general manager of Gases Business
Unit, and general manager of Product Management Unit
April
2017 Senior executive officer, and general manager of Industrial Gases Division
June
2018 Senior managing executive officer, director, and general manager of Industrial Gases Division
October 2020 Director of the Company, and president of Taiyo Nippon Sanso Corporation (current)

I joined the Company in 1981. Coincidentally, Mr. Hamada, Mr. Kallman, Mr. Elejoste, and I all entered the industry in the same year.
Since joining, I have worked in two locations, Tokyo and Singapore. My responsibilities covered plant manufacturing, logistics,
corporate planning, business planning, gas sales, and management of Group companies. Through my career, I have experienced almost
every aspect of the industrial gases business. While I rely on my experience, I do not believe I am bound by it. I always look forward to
new plans and challenges.
My motto is “happiness requires earnestness,” which I interpret to mean you must always keep a goal foremost in mind if you areto achieve it.

NIPPON SANSO HOLDINGS CORPORATION

Attendance at Board of Directors’ meetings:
10 of 11 meetings

April
June
April

Attendance at Board of Directors’ meetings:
11 of 11 meetings

Kenji Nagata

June
June

1974 Joined the Company
2005	Executive officer, deputy general manager of Business Planning Division and General Affairs Division, and manager
of Secretary’s Office and Corporate Audit Office2008	Senior executive officer and general manager of General Affairs Division, with responsibility for Companywide
internal control
2010 Managing director and general manager of General Affairs Division, with responsibility for Companywide internal control
2012	Senior managing director and general manager of Corporate Administration Division, with responsibility for
Companywide internal control
2013	Executive vice president, director, and general manager of Corporate Administration Division, with responsibility for
Companywide internal control
2014	Executive vice president and director, with responsibility for Corporate Administration Division and Corporate
Planning & Global Operations Division2014 Representative Director, President CEO2015 Representative Director, President CEO
2018 Representative Director, President CEO
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Attendance at Board of Directors’ meetings:
11 of 11 meetings
Committee assignment:
Advisory Committee on Appointments
and Remuneration

Member of the Board(Outside Director)

April
1981 Joined Argon S.A.
January
1992 Director of Marketing, responsible for Spain and Portugal, Argon S.A.
September 1996 Director of Business Development, responsible for Europe, Praxair España, S.L.
January
2000 Director of Marketing, responsible for Europe, Praxair Euroholding S.L.
October 2004 CEO, Germany, Praxair Euroholding S.L.
January
2006 CEO, Germany and Benelux, Praxair Euroholding S.L.
April
2008 CEO, Praxair España S.L. (now Nippon Gases Espana S.L.U.);		CEO, Praxair Portugal S.A.
December 2016 President, Praxair Euroholding S.L.
December 2018 Chairman and President, TNSC Euro-Holding S.L.U. (now Nippon Gases Euro-Holding S.L.U.) (current)June2019 Director of the Company (current)

I joined the Company in 1981 with a mechanical engineering degree. My career developed in various sales and marketing assignmentswith increasing responsibilities. In the year 2000, I was appointed Marketing Director of Europe and, after the acquisition of the German
business in 2004, I was appointed Managing Director Germany and, in 2006, Managing Director Germany and Benelux. In 2008, I was
appointed Managing Director Spain and Portugal and at the end of 2016 President of Europe. I was assigned an active role in thedivestiture process of the company during the Linde–Praxair merger. After the successful acquisition through the, then, TNSC group,
I was offered the possibility to continue to lead the European business, which I accepted with great enthusiasm and motivation.
I am an avid learner and like to spend time on leadership. A leader needs to believe that people excellence is the foundation of
everything else, safety, compliance, environmental consciousness, customer focus, and financial results. As a consequence, we will
establish a strong performance and results culture to thoroughly upgrade the quality of the teams, a thorough differentiation processthat distinguishes the top performers from the medium performers and the low performers, and will take different actions toward thedifferent groups. A leader has the right balance of strategic thinker and tactical executioner, being able to think ahead or way ahead
and, at the same time, delivers monthly and quarterly results.

Number of shares owned:
800 shares

Akio Yamada

July
1981 Joined BOC Group, plc
January 2000 Vice president, general manager responsible for Eastern Region, BOC Group, plc
January 2005 Executive vice president responsible for Industrial Gas Group, Matheson Tri-Gas, Inc.
January 2008 Senior executive vice president and COO, Matheson Tri-Gas, Inc.
June
2009 President and COO, Matheson Tri-Gas, Inc.
January 2013 President and CEO, Matheson Tri-Gas, Inc
June2017 Chairman, President, and CEO, Matheson Tri-Gas, Inc.
April
2019 Chairman and CEO, Matheson Tri-Gas, Inc. (current)June2019 Director of the Company (current)

April
1967 Joined General Secretariat of Japan Fair Trade Commission
June2000 Secretary general, Japan Fair Trade Commission
December 2003 Commissioner, Japan Fair Trade Commission
April2009 Senior advisor to Jones Day
June2010 Audit & Supervisory Board member, Daiichi Sankyo Co., Ltd.
March2014 Audit & Supervisory Board member, Yokohama Rubber Co., Ltd.
June
2014 Director, Watahan & Co., Ltd.
June
2015 Outside director of the Company (current)
March2018 Chairman, Fair Trade Institute (current)

Most people have the impression that the Japan Fair Trade Commission is a government agency that engages in anti-cartel controls.
However, the institute is actually an economic agency that conducts a wide range of operations, including examinations of businesscombinations, surveys of business and economic conditions, and reviews of consumer transactions. In my work at the commission,as well as experience in those areas at the commission, I also have considerable experience in external affairs, working at the OECD
Delegation in Paris and negotiating structural issues between Japan and the United States. Since retiring from the commission, I have
served as a visiting professor in the graduate schools of Kyoto University and Doshisha University, as an outside Audit & Supervisory
Board member and outside director for several companies, and as an advisor to several law firms. My motto is “fairness is key in all things.”

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Members of the Board of Directors and Audit & Supervisory Board Members

Members of the Board of Directors 

Audit & Supervisory Board Members 

Number of shares owned:
500 shares
Attendance at Board of Directors’ meetings:
11 of 11 meetings
Committee assignment:
Advisory Committee on Appointments
and Remuneration

April
1978 Appointed as a public prosecutor assigned to Tokyo District Public Prosecutors OfficeJuly1989 First secretary of Embassy of Japan in Germany
April2005 Assistant vice minister, Ministry of Justice (responsible for general policy integration)
December 2010 Superintending prosecutor, Takamatsu High Public Prosecutors OfficeJune2012 Superintending prosecutor, Hiroshima High Public Prosecutors OfficeJuly2014 Resigned from superintending prosecutor position
October 2014 Registered as an attorneyJune2015 Outside director of the Company (current)March2017 Director of Shimano Inc. (current)

After working for 37 years as a prosecutor at the Ministry of Justice and the Tokyo District Public Prosecutors Office, I registered as a
private attorney. While the deceased victims of violence or accidents cannot talk to us directly, we can hear their voices of regret when
we listen to the survivors and make a calm study of various evidence at hand. When I served as a prosecutor, my motto was “listen to
the deceased.” I believe that striving to listen carefully to the voices hidden below the surface from the perspectives of fairness andimpartiality will help companies maintain governance and ensure compliance.

Mitsuhiro Katsumaru
Member of the Board(Outside Director)

Number of shares owned:
0 sharesJune
1988 Director, Hara Estate K.K. (current)
October 2017 Founder and partner, Tax Corporation Yokohama Benten Accounting, Inc. (current)June2020 Outside director, SECOM Co., Ltd. (current)June2021 Outside director of the Company (current)

Committee assignment:
Advisory Committee on Appointments
and Remuneration

I majored in management accounting at university. After marrying and raising my children, I became a licensed tax accountant andstarted my own tax consulting firm. I am also proud to say that I was the first-ever female director at a publicly traded company. Today,
I am the first-ever female director at Nippon Sanso Holdings, and I hope to help the Company from the female perspective.
My motto is “do your best and let nature take its course.” My hobbies are playing golf and watching theater.

MIri Hara
Member of the Board(Outside Director)

Junzo Tai

Masahiro Osada

Audit & Supervisory Board member

Audit & Supervisory Board member(Outside Auditor)

Number of shares owned: 9,500 shares
Attendance at Board of Directors’ meetings: 11 of 11 meetings
Attendance at Audit & Supervisor Board meeting: 16 of 16 meetings

Number of shares owned: 0 shares
Attendance at Board of Directors’ meetings: 8 of 8 meetings
Attendance at Audit & Supervisor Board meeting: 12 of 12 meetings

April
1979 Joined the Company
June2013 Manager of Corporate Audit OfficeJune2014 Executive officer and manager of Corporate Audit Office
January 2015 Executive officer assigned to Mitsubishi Chemical Holdings Corporation
March 2017 Resigned from executive officer position
April
2017 Executive officer, manager of Industrial Gases Strategy Office in Corporate Strategy Division,		Mitsubishi Chemical Holdings Corporation
March 2018 Resigned from executive officer position at Mitsubishi Chemical Holdings Corporation
April
2018 General manager of the Corporate Planning Office of the Company
June2018 Audit & Supervisory Board member (current)

April
1981 Joined Mitsubishi Chemical Industries Limited (now Mitsubishi Chemical Corporation)June
2012 Executive officer and general manager of Corporate Management Office, Mitsubishi Chemical Holdings Corporation
April
2015 Executive officer, general manager of Finance & Accounting Department, Mitsubishi Chemical Corporation
April
2017 Managing executive officer (in charge of Corporate Management Department and Finance & Accounting Department),		
Mitsubishi Chemical Corporation
April
2019 Director and managing executive officer (in charge of Corporate Management Department and Finance &		Accounting Department), Mitsubishi Chemical Corporation
March 2020 Resigned from director and managing executive officer position at Mitsubishi Chemical Corporation
April
2020 Advisor to the Company
June2020 Outside auditor (current)

My first assignment was at the Hiroshima branch of Nippon Sanso. Since then, I havefulfilled assignments in the United States twice as well as at Taiyo Nippon Sanso Kanto(formerly Hitachi Sanso) and Mitsubishi Chemical Holdings Corporation (MCHC), mainly
working in accounting and finance. In the United States, I was involved in the
Matheson–Tri-Gas merger, and at MCHC I worked as the general manager of theIndustrial Gases Strategy Office. I am grateful for the experiences I have gained and the
responsibilities I have been given. My personal motto is “be sincere in all things.”

I began a new corporate life as a full-time Audit & Supervisory Board member in June
2020. In 1981, I joined Mitsubishi Chemical Industries, where I was in charge of transitioning the company to consolidated accounting and the voluntary adoption of IFRS in
response to internationalization. In my career, I have been involved deeply in helping
establish a pure holding company through stock transfer, in helping that company withsubsequent M&A activities to build a strong group foundation, and in other projects
implemented by the holding company. I hope to bring these experiences in particular to
aid the growth of Nippon Sanso Holdings as a global corporation. I do not ascribe to aparticular motto, but I always keep in mind that the final touches are the most important part of any job.

Akihiro Hashimoto

Kazuya Kobayashi

Audit & Supervisory Board Member(Outside Auditor)

Audit & Supervisory Board member(Outside Auditor)
Concurrently part-time Audit & Supervisory
Board member, Taiyo Nippon Sanso Corporation

Number of shares owned:
0 shares
Attendance at Board of Directors’ meetings:
11 of 11 meetings

Hidefumi Date
Member of the Board,
Director, Managing Corporate Executive
Officer, and Chief Financial Officer,
Mitsubishi Chemical Holdings Corporation

April
1982 Joined Mitsubishi Chemical Industries Limited (now Mitsubishi Chemical Corporation)
April
2013 Executive officer, general manager of Consolidated Management Department, Mitsubishi Chemical Corporation
March 2014 Executive officer, general manager of Consolidated Management Department and		
Finance & Accounting Department, Mitsubishi Chemical Corporation
April
2014 Executive officer, general manager of Finance & Accounting Department, Mitsubishi Chemical Corporation
April
2015 Executive officer and general manager of Corporate Management Office, Mitsubishi Chemical Holdings Corporation
April
2018 Managing corporate executive officer and chief financial officer, Mitsubishi Chemical Holdings Corporation
June
2019 Director, managing corporate executive officer, and chief financial officer of Mitsubishi Chemical Holdings Corporation		Director of the Company (current)
April2020 Representative Director and President of Mitsubishi Chemical Holdings Corporate Staff, Inc. (current)

I have worked at Mitsubishi Chemical Holdings Group companies for approximately 40 years, mostly in accounting and finance, except
for a few years each in corporate planning and management at U.S. subsidiaries. I am experienced in all aspects of accounting andfinance, including the preparation of financial reports, funds procurement, and M&A due diligence. One of my most memorable
experiences was when I traveled from Japan and entered the doors of the U.S. Internal Revenue Service (IRS) for a mutual agreement
procedure. That I was able to meet successfully with an American officer without the aid of an interpreter remains a motivation to do mybest, even today, 20 years later.

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Number of shares owned: 600 shares
Attendance at Board of Directors’ meetings: 11 of 11 meetings
Attendance at Audit & Supervisor Board meeting: 16 of 16 meetings

Number of shares owned: 0 shares
Attendance at Board of Directors’ meetings: 8 of 8 meetings
Attendance at Audit & Supervisor Board meeting: 12 of 12 meetings

April
1983 Joined The Fuji Bank, Limited (now Mizuho Bank, Ltd.)
April
2010 Executive officer and general manager of Americas Financial Products Division of Mizuho Corporate Bank, Ltd.
		(now Mizuho Bank, Ltd.)
April
2012 Managing executive officer in charge of branches, Mizuho Bank, Ltd. (to July 2013)
April
2013 Managing executive officer in charge of corporate banking, Mizuho Corporate Bank, Ltd.
July
2013 Managing executive officer in charge of corporate banking, Mizuho Bank, Ltd. (Mizuho Bank, Ltd. and		
Mizuho Corporate Bank, Ltd. merged to form the current Mizuho Bank, Ltd.)
April
2014 Senior general manager, Mizuho Bank, Ltd.
April
2014 Resigned from Mizuho Bank, LtdMay
2014 Senior general manager, Sharp CorporationJune
2014 Director and executive managing officer, Sharp CorporationJune
2016 Resigned from Sharp CorporationJune
2016 Senior general manager, Mizuho Bank, Ltd.
June
2017 Resigned from senior general manager position at Mizuho Bank, Ltd.
		
Outside auditor of the Company (current)

April1985 Joined The Fuji Bank, Limited (now Mizuho Bank, Ltd.)
April
2012 Executive officer, general manager of Corporate Banking Division No. 13, Mizuho Corporate Bank, Ltd.
		(now Mizuho Bank, Ltd.)
April
2014 Managing executive officer, head of Investment Banking Unit, Mizuho Financial Group, Inc.
		Managing executive officer, head of Investment Banking Unit, Mizuho Bank, Ltd.
April
2016 Managing executive officer in charge of Specific Business of Global Corporate Company, Mizuho Financial Group, Inc.
		Managing executive officer, head of Global Corporate Division, Mizuho Bank., Ltd
April
2017 Senior general manager, Mizuho Financial Group, Inc.
March 2019 Resigned from senior general manager position at Mizuho Financial Group, Inc.
April
2019 Audit & Supervisory Board member (full-time), Mizuho Human Service Co., Ltd.
March 2020 Resigned from Audit & Supervisory Board member (full-time) position at Mizuho Human Service Co., Ltd
April
2020 Senior general manager, Mizuho Financial Group, Inc. (current)June2020 Resigned from senior general manager at Mizuho Financial Group, Inc.
		
Outside auditor of the Company (full-time)
October 2020 Audit & Supervisory Board member of Taiyo Nippon Sanso Corporation (current)

I began my working life as a banker in 1983. I spent a total of 12 years in the UnitedStates, mainly in charge of development and sales of various types of financial products.
I was also involved in bank mergers and the establishment of holding companies. During
my time at banks and manufacturers, I saw many instances of corporate growth and successthat only became a stumbling block to future growth and success. I think this perspective
will become extremely important in this era of rapid environmental change. My favorite
sayings are “cool head, but warm heart” and “all things are essentially nothingness.”

I was appointed a full-time Audit & Supervisory Board member in June 2020. Prior tothat, I was involved in overseas business for a long time at Mizuho Bank, where I was
stationed in New York for 10 years and worked as the head of the international divisionat the head office after serving in overseas sales planning and other capacities. The global
financial crisis in 2008 made clear the importance of identifying the essence behind credit
decisions, which has become an important backbone for my own business decisions. I liketo cook to relax, which has the advantage of being both a hobby and a practical habit.

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Director Skills Matrix

strategy, (2) Finance and accounting, (3) Legal and regulatory affairs, (4) Governance and risk management, (5) Sales and marketing, (6) Development and technology, and (7) Internationality and diversity. We will strive to enhance the effectiveness of the Boardof Directors further by assigning people with knowledge and experience in these categories to the right places at the right time.

Nippon Sanso Holdings believes that for the Board of Directors to function effectively it must consist of a diverse collection of directors who have a broad range of knowledge and experience in corporate management. To this end, we have defined the knowledge
and experience that play important roles in Group management across seven categories: (1) Corporate management and business

Name

PositionsClassification
Committee positions

Toshihiko Hamada

Representative Director,
President CEO

Member of the Advisory Committee
on Appointments and Remuneration

Yujiro Ichihara

Member of the Board,
Chairman of the Board of Directors

Member of the Advisory Committee
on Appointments and Remuneration

Kenji Nagata

Member of the Board,
Representative Director and President,
Taiyo Nippon Sanso Corporation

Thomas Scott Kallman

Member of the Board,
Chairman and CEO,Matheson Tri-Gas, Inc.

Eduardo Gil Elejoste

Member of the Board,
Chairman and President,
Nippon Gases Euro-Holding S.L.U.

Akio Yamada

Member of the Board(Outside Director)

Independent outside director
Chairman of the Advisory Committee
on Appointments and Remuneration

Mitsuhiro Katsumaru

Member of the Board(Outside Director)

Independent outside director
Member of the Advisory Committee
on Appointments and Remuneration

Miri Hara

Member of the Board(Outside Director)

Independent outside director
Member of the Advisory Committee
on Appointments and Remuneration

Hidefumi Date

Member of the Board

Junzo Tai

Audit & Supervisory Board member

Akihiro Hashimoto

Audit & Supervisory Board member(Outside Auditor)

Masahiro Osada

Audit & Supervisory Board member(Outside Auditor)

Kazuya Kobayashi

Audit & Supervisory Board member(Outside Auditor)

Corporate
management andbusiness strategy

Finance andaccounting

Legal andGovernance andregulatory affairs risk management●●

Independent outside director●

After joining the Company in 1981, Mr. Nagata was appointed executive officer and general manager of the North Kanto Branch in 2013. After serving invarious capacities, including senior executive officer, deputy general manager of the Industrial Gases Division, general manager of the Gases Business Unit,
and general manager of the Product Management Unit, he was appointed senior executive officer, general manager of the Industrial Gases Division in 2017.
In 2020, Mr. Nagata was appointed director of Nippon Sanso Holdings and president of Taiyo Nippon Sanso Corporation (current).

●

Mr. Kallman joined the BOC Group, plc., in 1981, and was appointed vice president and general manager, U.S. Eastern Region in 2000. He was appointed
executive vice president of the Industrial Gas Group, Matheson Tri-Gas, Inc. in 2005, president and COO of Matheson Tri-Gas in 2009, president and CEO of
Matheson Tri-Gas in 2013, and chairman and CEO of Matheson Tri-Gas in 2019 (current). Mr. Kallman was also appointed director of Nippon Sanso
Holdings in 2019 (current).

●

After joining Argon S.A. in 1981, Mr. Elejoste was appointed director of marketing for Spain and Portugal in 1992. In 1996, he was appointed director of
Business Development for Europe, Praxair España S.L.U. (now Nippon Gases España S.L.U.), and later CEO for Germany and Benelux. In 2018, Mr. Elejoste
was appointed chairman and president of TNSC Euro-Holding S.L.U. (now Nippon Gases Euro-Holding S.L.U.) (current). In 2019, he was appointed directorof Nippon Sanso Holdings (current).

●

Mr. Yamada joined the General Secretariat of the Japan Fair Trade Commission in 1967. He was subsequently appointed secretary general of the Japan Fair
Trade Commission in 2000. After serving variously as outside Audit & Supervisory Board member at Daiichi Sankyo Co., Ltd., outside Audit & Supervisory
Board member at Yokohama Rubber Co., Ltd., and outside director of Watahan & Co., Ltd., and in other positions, Mr. Yamada was appointed outside
director of Nippon Sanso Holdings in 2015 (current). In 2018, he was appointed chairman of the Fair Trade Institute (current).

●●

After being appointed as public prosecutor assigned to the Tokyo District Public Prosecutors Office in 1978, Mr. Katsumaru was appointed first secretaryof the Embassy of Japan in Germany in 1989. He served as assistant vice minister, the Ministry of Justice (responsible for general policy integration), superintending prosecutor of the Takamatsu High Public Prosecutors Office, and superintending prosecutor of the Hiroshima High Public Prosecutors Office, after
which he became a registered attorney in 2014. In 2015, Mr. Katsumaru was appointed outside director of Nippon Sanso Holdings (current). In 2017, he
was appointed outside director of Shimano Inc. (current).

●●

In 1988, Ms. Hara was appointed director of Hara Estate K.K. (current). In 2017, she became founder and partner of Tax Corporation Yokohama Benten
Accounting, Inc. (current). In 2020, she was appointed outside director of SECOM Co., Ltd. (current). Ms. Hara was appointed outside director of Nippon
Sanso Holdings in 2021 (current).

●
●
●

●

●

●

●

●

Career Highlights

Mr. Ichihara joined the Company in 1974, after which he went on to be named executive officer, deputy general manager of the Business Planning Divisionand the General Affairs Division, and manager of the Secretary’s Office and the Corporate Audit Office in 2005. After serving in various capacities, including
general manager of the General Affairs Division, general manager of the Corporate Administration Division, and executive vice president of the Corporate
Administration Division and the Corporate Planning & Global Operations Division, he was appointed Representative Director, President CEO in 2014. Mr.
Ichihara was appointed Chairman of the Board of Directors of Nippon Sanso Holdings in 2021 (current).

●●

Internationalityand diversity

●

●

●

●

Development andtechnology

Mr. Hamada joined the Company in 1981. He was appointed executive vice president, Specialty Gas Technology at Matheson Tri-Gas, Inc., in 2002. After
serving as general manager of the Semiconductor Gas Section of the Electronics Division at Nippon Sanso, he was named president and representative directorof Nissan TANAKA Corporation in 2017. He was appointed director, executive vice president of the Company (Aide to the President) in 2020. In 2021, Mr.
Hamada was appointed Representative Director, President CEO of Nippon Sanso Holdings (current).

●●

Sales andmarketing

●

●
●
●

●

●

●

●

●

Mr. Date joined Mitsubishi Chemical Industries Limited (now Mitsubishi Chemical Corporation) in 1982. He was appointed executive officer and generalmanager of the Consolidated Management Department at Mitsubishi Chemical Corporation in 2013. After serving as executive officer and general managerof the Finance & Accounting Department at Mitsubishi Chemical and managing corporate executive officer and chief financial officer of Mitsubishi Chemical
Holdings Corporation, he was appointed director, managing corporate executive officer, and chief financial officer of Mitsubishi Chemical Holdings in 2019
(current). Mr. Date was appointed director of Nippon Sanso Holdings in 2019 (current).

●

●

●

●

Mr. Tai joined the Company in 1979, and was appointed as manager of the Corporate Audit Office in 2013. In 2014, he was appointed executive officer
and manager of the Corporate Audit Office and executive officer assigned to Mitsubishi Chemical Holdings Corporation. After serving as executive officer
and manager of the Industrial Gases Strategy Office in the Corporate Strategy Division at Mitsubishi Chemical Holdings, Mr. Tai was appointed full-time
Audit & Supervisory Board member of Nippon Sanso Holdings in 2018 (current).

●

After joining The Fuji Bank, Limited (now Mizuho Bank, Ltd.), in 1983, Mr. Hashimoto was appointed executive officer and general manager of the Americas
Financial Products Division at Mizuho Corporate Bank, Ltd. (now Mizuho Bank, Ltd.) in 2010. Having served in various capacities, including managing
executive officer in charge of corporate banking at Mizuho Bank and director and executive managing officer at Sharp Corporation, Mr. Hashimoto was
appointed outside Audit & Supervisory Board member of Nippon Sanso Holdings in 2017 (current).

●

In 1981, Mr. Osada joined Mitsubishi Chemical Industries Limited (now Mitsubishi Chemical Corporation) and was subsequently appointed executive officer
and general manager of the Corporate Management Office of Mitsubishi Chemical Holdings Corporation in 2012. After serving in various roles, including
director and managing executive officer in charge of the Corporate Management Department and the Finance & Accounting Department at
Mitsubishi Chemical Corporation, Mr. Osada was appointed outside Audit & Supervisory Board member of Nippon Sanso Holdings in 2020 (current).

●

After joining The Fuji Bank, Limited (now Mizuho Bank, Ltd.) in 1985, Mr. Kobayashi was appointed executive officer and general manager of Corporate
Banking Division No. 13 at Mizuho Corporate Bank, Ltd. (now Mizuho Bank, Ltd.). Having served as managing executive officer in charge of Specific Business of
Global Corporate Company of Mizuho Financial Group, Inc., as managing executive officer, head of the Global Corporate Division at Mizuho Bank and in otherroles, Mr. Kobayashi was appointed outside Audit & Supervisory Board member of Nippon Sanso Holdings (current) and Audit & Supervisory Board member of
Taiyo Nippon Sanso Corporation (current) in 2020.

●
●

●
●

●
●

Independent outside director

●

●

●

* Details on the definition of table headings
Corporate management: Career as a full-time officer
Business strategy: Persons who have held positions in management strategy and corporate planning divisions
Internationality and diversity: Persons who are non-Japanese, women, persons who have experience with overseas assignments or working overseas,and persons joining the Company mid-career (experience at other companies)

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Corporate Data

Company Overview (As of March 31, 2021)

Group Organization (As of March 31, 2021)

Company name: Nippon Sanso Holdings Corporation

Transfer agent:

Date founded: October 30, 1910

Mizuho Trust & Banking Co., Ltd.

Paid-in capital: ¥37,344 million

2-8-4 Izumi, Suginami-ku, Tokyo 168-8507, Japan

Head office:Tel (toll free in Japan): 0120-288-324

1-3-26 Koyama, Shinagawa-ku, Tokyo 142-0062, Japan

Contact: Investor Relations,

Gas Business in Japan: Taiyo Nippon Sanso Corporation GroupGas Business in the United States: Matheson Tri-Gas, Inc. Group

Number of employees: 19,357

Group Finance and Accounting Office,Independent public accountants:

Nippon Sanso Holdings Corporation

Ernst & Young ShinNihon LLC

Tel: +81-3-5788-8512

Nippon Sanso Holdings
Corporation

Gas Business in Europe: Nippon Gases Euro-Holding S.L.U. GroupGas Business in Asia and Oceania: O perating company groups in
Asia and Oceania

Stock exchange listing: Tokyo

Thermos Business: Thermos K.K. Group

Share and Shareholder Information (As of March 31, 2021)
Status of Shares

Major Shareholders(10 Largest Shareholders, Shares Held Rounded Down to the Nearest Thousand)Number of shares authorized: 1,600,000,000

Thousands of Percentage ofshares owned total (%)

Number of shares issued: 433,092,837
Number of shareholders: 18,901
Individuals andother investors

Mitsubishi Chemical Holdings Corporation

218,996

50.59

Taiyo Nippon Sanso Client Shareholding Society

17,617

4.07

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

14,946

3.45
3.07

Custody Bank of Japan, Ltd. (Trust account)

10.40%
Overseas
investors

Distribution of

14.89%

Shares by
Shareholder Type

Financial
institutions andsecurities companies

Other
domestic
companies

56.45%

18.26%

13,294

Taiyo Nippon Sanso Corporation

Taiyo Nippon Sanso Trading

Nippon Sanso (Thailand) Co., Ltd.

1-3-26 Koyama, Shinagawa-ku,(Shanghai) Co., Ltd.

282 Bangbon 3 Road, Kwaeng Nongkhaem,

Tokyo 142-8558, Japan

3rd Floor, No. 2 Bldg. BaoWu Tower 1859,

Khet Nongkhaem, Bangkok 10160, Thailand

Tel: +81-3-5788-8000

Expo Boulevard, Shanghai, P.R. China

Tel: +66-2-445-5010

Tel: +86-21-5835-8700

Meiji Yasuda Life Insurance Company

10,0072.31

Mizuho Bank, Ltd.

8,182

1.89

The Norinchukin Bank

7,000

1.62

Shareholding Association of
Nippon Sanso Holdings Corporation

3,282

0.76
0.71

Nippon Gases Euro-Holding S.L.U.

STANDARD LIFE ASSURANCE LIMITED PENSION
FUNDS

3,067

IBIDEN Co., Ltd.

3,004

Stock price (Left scale)

0.69

Trading volume (Right scale)(Yen)

Matheson Tri-Gas, Inc.

Leeden National Oxygen Ltd.

909 Lake Carolyn Parkway, Suite 1300,

Nippon Sanso Taiwan, Inc.

1 Shipyard Road, Singapore 628128

Irving, TX 75039, U.S.A.

5F-1 No. 1 Sec.3 Gongdao 5th Road,

Tel: +65-6266-4868

Tel: +1-972-560-5700

East Dist., Hsinchu City 30069, Taiwan,
R.O.C. (TFC ONE Building)Supagas Pty Ltd

Tel: +886-3-572-6588

5 Benson Road, Ingleburn, NSW 2565,

Orense, 11, 9th Floor,* Our company holds 182,000 treasury shares.
The shareholding ratio is calculated based on the total number of issued shares, excluding
treasury shares.

Common Stock Price Range and Trading Volume

Main Affiliated Companies (Company names as of March 31, 2021)(Thousands of shares)

3,000

30,000Australia

Madrid 28020, Spain

Nippon Sanso Ingasco, Inc.

Tel: +34-91-453-72-00

One Corporate Center, 23rd Floor,

Tel: +61-2-8788-4444

Dona Julia Vargas Avenue, Corner Meralco

Thermos K.K.

Matheson Gas Products Korea, Co., Ltd.

Avenue Ortigas Center, Pasig City 1605,

Mita NN Bldg., 4-1-23 Shiba, Minato-ku,

94, Eumbongmyeon-ro, Eumbong-myeon,

Philippines

Tokyo 108-8450, Japan

Asan-si, Chungcheongnam-do,

Tel: +63-2-8626-1504

Tel: +81-3-5730-0130

South Korea 31443
Nippon Sanso Vietnam Joint Stock

Tel: +82-41-539-7400

Company
2,000

20,000Shanghai Taiyo Nippon Sanso Gas Co., Ltd.

No. 33, Road 3A, Bien Hoa Industrial Zone II,

No.1959, Zhuanxing Road, Xinzhuang

Bien Hoa City, Dong Nai Province, Vietnam

Industry District, Shanghai, P.R. China

Tel: +84-251-3836706~09

Tel: +86-21-6442-2966
1,000

0

10,000

2016

2017

2018

NIPPON SANSO HOLDINGS CORPORATION

2019

132

INTEGRATED REPORT 2021

2020

2021

0

NIPPON SANSO HOLDINGS CORPORATION133

INTEGRATED REPORT 2021

OUR MANAGEMENT

11-Year Financial and Non-Financial Summary(Millions of yen)Japanese GAAP

IFRS

2011.32012.32013.32014.32015.32016.32016.32017.32018.32019.32020.32021.3

Revenue
Net sales—
483,620—
477,451—
468,387—
522,746—559,373—641,516

594,421—581,586—

646,218—

740,341—

850,239—818,238—

Selling, general and administrative expenses

126,265

125,526

125,503

138,052

149,151

182,051

161,169

165,071

178,690

204,789

242,129

233,276

—

—

—

—

—

—

47,45654,73660,03365,81990,33787,25135,46831,067

24,884

31,48935,29743,362

48,92553,664

59,862

66,86393,921

88,846

—

—

—

—

—

—

29,03034,74048,91941,291

53,34055,214

12,736

21,200(2,071)

20,194

20,76425,845

—

—

—

—

—

—

—

—

—

—

—

—

320,457

351,576

386,457

406,602409,344

513,164

Total equity

207,416

219,611224,253

298,475

341,207337,974

—

—

—

—

—

—

Total assets

—

—

—

—

—

—

787,505

924,281

931,047

1,771,015

1,751,732

1,836,294

Total assets

617,676

607,024

615,820731,677

782,357

783,248

—

—

—

—

—

—

Interest-bearing liabilities

256,358

241,121

253,424

278,063266,276

274,424

266,215

359,528

326,959

1,005,402

998,389

949,242Core operating profit*1
Operating profit
Profit attributable to owners of parent
Profit (loss)
Total equity attributable to owners of parent

Net interest-bearing liabilities*2

211,808

206,524

228,681219,727

212,855

223,638

215,492

304,308

274,968

945,782

898,384

858,183

Cash flows from operating activities

65,89745,98633,96456,716

58,61581,55573,34774,596

83,19998,685150,084

149,231

Cash flows from investing activities(44,834)(32,748)(37,225)(55,295)(30,583)(82,130)(74,252)(147,082)(52,088)(754,969)(62,629)(59,686)

Cash flows from financing activities(3,343)(23,536)(8,181)

27,884(33,866)(1,825)(2,385)80,777(39,859)

664,925(46,242)(103,159)

Free cash flow

21,063

13,238(3,261)

1,421

28,032

(575)

(905)

(72,486)

31,111(656,284)

87,45589,544

Cash and cash equivalents

44,54934,596

24,74358,33653,42050,78550,72355,22051,991

59,620100,005

91,058

Capital expenditures*3

31,991

31,452

31,71532,53235,201

53,611

52,657

43,79662,56976,65781,017

74,697

Investment and loans receivable*2

15,171

8,035

5,672

35,7495,710

32,94125,507102,034

4,556

691,126

733

1,361

Depreciation and amortization

32,16730,471

29,40033,50735,56844,864

39,69640,04843,266

56,111

83,79886,380

Amortization of goodwill

3,635

2,472

2,719

3,668

4,959

7,352

—

—

—

—

—

—

Research and development costs

3,924

3,458

3,177

3,170

3,430

3,348

3,238

3,323

3,255

3,494

3,389

3,315

Profit (EPS) (Yen)

31.86

53.33

(5.25)

49.42

47.98

59.72

67.08

80.28

113.0495.42

123.26127.59Annual dividends per share (Yen)

12.0

12.0

12.0

12.0

13.0

16.0

16.0

20.0

23.0

25.0

28.0

30.0

Dividend payout ratio (%)

37.7

22.5

—

24.3

27.1

26.8

23.9

24.9

20.3

26.2

22.7

23.5

Core operating profit margin (%)

7.3

6.5

5.3

6.0

6.3

6.8

8.2

9.2

9.3

9.0

11.0

10.9

Operating profit margin (%)

—

—

—

—

—

—

8.0

9.4

9.3

8.9

10.6

10.7

Overseas revenue ratio (%)

23.6

24.3

27.6

31.4

35.0

44.4

40.7

40.8

43.3

47.9

55.5

56.1

Selling, general and administrative expenses / revenue

26.1

26.3

26.8

26.4

26.7

28.4

27.1

28.4

27.7

27.7

28.5

28.5

Return on equity (ROE) (%)*4

6.5

10.8

(1.0)

8.4

7.0

8.2

9.1

10.3

13.3

10.4

13.1

12.0

Return on capital employed (ROCE)*5

7.8

7.0

5.5

6.2

6.2

7.4

8.1

8.4

8.4

6.2

6.4

6.1

Net debt-to-equity (D/E) ratio (Times)

1.10

1.03

1.12

0.80

0.67

0.71

0.67

0.87

0.71

—

—

—

—

—

—

—

—

—

—

—

—

1.54

1.45

1.15
2,104

Adjusted net D/E ratio (Times)*6

693

584

638

812

1,639

1,068

1,068

1,302

1,611

1,686

1,601

Price earnings ratio (PER) (Times)

21.75

10.95

—

16.43

34.16

17.88

15.92

16.22

14.25

17.67

12.99

16.49

Number of employees (Consolidated)*7

10,26911,588

11,468

12,955

13,142

14,127

14,107

15,86015,345

18,974

19,341

19,155

Gas Business in Japan

—

—

—

—

—

—

—

—

5,985

6,171

6,292

6,295

Gas Business in the United States

—

—

—

—

—

—

—

—

4,820

4,916

4,724

4,534

Gas Business in Europe

—

—

—

—

—

—

—

—

—

2,589

2,794

2,884

Gas Business in Asia and Oceania

—

—

—

—

—

—

—

—

3,161

4,026

4,195

4,114

Thermos Business

—

—

—

—

—

—

—

—

1,379

1,272

1,336

1,328

Female employees as a percentage of total labor force (Consolidated) (%)

—

—

—

—

—

—

—

—

17.8

19.1

19.6

20.1

Employee turnover rate (Consolidated) (%)

—

—

—

—

—

—

—

—

7.6

6.2

6.1

5.7

Energy consumption (TJ)*8

—

—

—

—

44,62047,59947,59962,516

67,61372,014

109,512104,142

Share price (March 31) (Yen)

Waste generated (including valuable materials) (Tonnes)*9

—

—

—

—

—

—

2,834

2,917

2,910

3,023

3,762

14,273

Fresh water withdrawn (Ten thousands of m3)

—

—

—

—

791

816

816

1,014

1,092

1,362

3,002

4,335

GHG emissions (Scope 1) (Thousand tonnes CO2e)*10

—

—

—

—

—

—

—

9

19

14

1,061

987

GHG emissions (Scope 2) (Thousand tonnes CO2e)*10
GHG emissions (Scope 3) (Thousand tonnes CO2e)*10

—
—

—
—

—
—

—
—

—
—

—
—

—
—

3,363

3,838
3,671

4,056
3,634

4,747
3,662

4,664
4,340

*1 Core operating profit is calculated by subtracting losses (non-operating items) produced by non-recurring factors from operating profit. Non-recurring factors include structural reform charges,
including costs associated with business downsizing or withdrawal; special severance payments; losses due to disasters or major accidents; and other factors such as the disposal of idle assets.
*2 The standard changed in FYE2019 compared to previous fiscal years. *3 The figures are based on construction, in accordance with the presentation in the annual securities report. *4 Returnon equity (ROE) is calculated as profit attributable to owners of parent divided by average shareholders’ equity. Average shareholders’ equity is the average of shareholders’ equity at beginning of
period and shareholders’ equity at end of period; where shareholders’ equity is calculated as net assets – non-controlling interests. *5 Return on capital employed (ROCE) = Core operating profit/ (outstanding interest-bearing debt + equity attributable to owners of parent) *6 Adjusted D/E ratio = (Net interest-bearing debt – equity-type debt) / (equity attributable to owners of the parent+ equity-type debt). Equity-type debt is debt procured through hybrid financing that has been recognized as equity credit by ratings agencies (50% of the procured amount); hybrid financing is aform of debt financing that has features resembling equity, including voluntary deferral of interest, extremely long-term redemption periods, and subordination during liquidation or bankruptcy
procedures. This kind of financing does not cause stock dilution, and a certain ratio of the funds procured in this way can be recognized as equity credit by rating agencies provided that certain―

conditions are met. *7 From FYE2018, we aggregated the actual results as of the fiscal year end of each Group company. Due to differences in the fiscal year ends, the aggregated data includes
some results as of December 31. To reflect a revision of this aggregation method, we have retroactively revised the figures presented in the previous fiscal year for FYE2018 to FYE2020. *8 The
energy of the consumed fuels is calculated based on the gross calorific values specified in Japan’s Act on the Rational Use of Energy. Purchased electricity and purchased steam are converted into
primary energy amounts. *9 Beginning FYE2021, main overseas consolidated subsidiaries are included in the reporting boundary for the amount of waste generated. *10 GHG emissions inJapan are calculated using emission factors provided in Japan’s Act on Promotion of Global Warming Countermeasures (for electricity, the basic emission factors for each electricity provider). For
GHG emissions overseas, Scope 1 emissions are calculated using emission factors set forth in Japan’s Act on Promotion of Global Warming Countermeasures, while Scope 2 emissions arecalculated using country-specific emission factors published by the International Energy Agency (IEA). However, for electricity in Europe, beginning FYE2021 a separate emission factor for eachelectricity provider is used, and emissions are calculated making reference to the Guarantee of Origin, resulting in an increase in Scope 2 emissions of approximately 244 thousand tonnes CO2e
compared with using emission factors provided by the IEA. See P.187–188 for details on the calculation method of Scope 3 emissions.
For information about the reporting boundaries for environmental data please refer to Non-Financial Highlights ( P.136).

NIPPON SANSO HOLDINGS CORPORATION134

INTEGRATED REPORT 2021

NIPPON SANSO HOLDINGS CORPORATION135

INTEGRATED REPORT 2021

OUR MANAGEMENT

Non-Financial Highlights

Indicators withmark have been assured by KPMG AZSA Sustainability Co., Ltd.

GHG Emissions

Energy Consumption

Number of Employees by Segment (Consolidated)

Number of Employees by Gender (Consolidated)Thousand tonnes CO2e

Terajoules (TJ)

Number of individuals

Number of individuals

5,808
499 1

6,000
5,000
4,000
3,000
2,000
1,000
0

871

3,856
492 1

4,070
488 1

1,033

1,087

1,868

2,330

2,494

2,273

2017

2018

2019

2020

3,372
446 1
1,057

5,651
511 11

120,000
100,000

1,049

80,000

2,164

2,066

60,00040,00062,516
8,345 14
23,836

109,512104,1429,437 139,201 174
25,06824,96067,613
9,188 1472,0149,174 14

23,282

24,50737,94636,172
33,6352021

15,00010,00019,341
1,336

18,974
1,272

20,00019,155
1,328

20,00015,345
1,379

4,026

4,195

4,114

3,161

2,589

2,794

2,884

4,820

4,916

4,724

4,534

10,00020,000(Years ended
March 31)2021

30,32135,12938,31937,048

5,985

6,171

6,292

6,295

5,000

2017

2018

2019

2020

0

(Years ended
March 31)

Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business
Reporting boundary: Nippon Sanso Holdings main consolidated subsidiaries

Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business
Reporting boundary: Nippon Sanso Holdings main consolidated subsidiaries

The majority of GHG emissions of the Nippon Sanso Holdings Group is emissions from ASUs and the HyCO
business. Optimal operation of ASUs and the impact of COVID-19 resulted in a year-on-year decrease to 5,651
thousand tonnes CO2e.

In the energy usage of the Nippon Sanso Holdings Group, approximately 86% is electricity used by ASUs andapproximately 10% is fuel for the HyCO business. Optimal operation of ASUs and the impact of COVID-19
resulted in a year-on-year decrease to 104,142 TJ.

0

2018

2019

2020

2021

15,000Fresh Water Withdrawn

Gigawatt hours (GWh)

Ten thousands of m3

12,00010,013945 1

10,000

6,000

6,389
855 1

6,874
919 1

7,290
912 1

2,442

2,385

2,511

4,000

8,000

2,000
0

3,091
2017

2,861

3,866

3,569
2018

2,464

4,000

2,442

3,000

1,000

3,402

2020

2021

4,335
205 17(Years ended
March 31)

(Years ended
March 31)0

Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business
Reporting boundary: Nippon Sanso Holdings main consolidated subsidiaries

1,014
177
362
476

1,092
198
365
529

2017

2018

707

683

732

676

2019

2020

2021

Research and Development Costs

TonnesMillions of yen

12,000

8,000

4,000

0

4,000

3,323
3,000

87

2,910

117

3,023

3,762
80

2,830

2,793

2,943

3,675

2017

2018

2019

2020

593

3,494
48

614

2,612

2,846

1.00

0

Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business
Reporting boundary: Nippon Sanso Holdings main consolidated subsidiaries* In FYE2021, main overseas consolidated subsidiaries were added to the reporting boundary.

2017

2018

2019

34

3,389
658

39

3,315
589

32

2,691

2,694

2020

2021

(Years ended
March 31)

Research and development costs in FYE2021 were level year on year at ¥3,315 million. In R&D, we work on
the development of new products and technologies for various fields, based on our proprietary gas technology, which will contribute to earnings growth.

136

INTEGRATED REPORT 2021

15,307

10.0

0.0

%

7.6

8.0

2.32

2.30

6.2

6.1

2019

2020

5.7

6.0

0.73
0.45

0

2016

2017

2018

0.73

0.64

2019

2020

2.0
(Years ended
March 31)0

Taiyo Nippon Sanso Group
Nippon Sanso Holdings Group
Reporting boundary: Consolidated subsidiaries with production divisions in Japan and oversea.
Nippon Sanso Holdings included overseas subsidiaries of Thermos K.K. from January 2017 and Nippon Gases
Euro-Holding S.L.U. from January 2019.

2018

2021

(Years ended
March 31)* Year-end figures for the Nippon Sanso Holdings Group are calculated including some figures for the end of
December 2020 because some subsidiaries' accounting period ends are at the end of December.
The employee turnover rate in FYE2021 was 5.7%, an decrease of 0.4 percentage point from the previous
fiscal year-end. Hereafter, we will continue taking steps to retain human resources by executing measures toenable employees to feel a sense of worth and achievement in their work to improve employee engagement.

The lost-time work injury frequency rate in FYE2021 decreased to 0.64 at Taiyo Nippon Sanso Corporation,
while increasing to 2.3 for the Nippon Sanso Holdings Group overall. We continue to promote measures toprevent occupational accidents, including the analysis of causes of occupational accidents and proposal ofcountermeasures, as well as providing education for increasing employees’ ability to recognize danger.

Directors and Outside Directors
Number of individuals

5.0

15

100
80

10

2.0

2.0

2.2

2.3

2.3
5

1.0
0

2

50
50

2.0

GHG emissions: GHG emissions in Japan are calculated using emission factors provided in Japan’s Act on Promotion of Global Warming Countermeasures (for electricity, the basic emission factors for each electricity provider). For GHG
emissions overseas, Scope 1 emissions are calculated using emission factors set forth in Japan’s Act on Promotion of Global Warming Countermeasures, while Scope 2 emissions are calculated using country-specific emission factors
published by the IEA. However, for electricity in Europe, beginning FYE2021 a separate emission factor for each electricity provider is used, and emissions are calculated making reference to the Guarantee of Origin, resulting in an
increase in Scope 2 emissions of approximately 244 thousand tonnes CO2e compared with using emission factors provided by the IEA.

NIPPON SANSO HOLDINGS CORPORATION

15,5464.0

Gas Business in Japan
Gas Business in the United States
Thermos Business
Reporting boundary: Taiyo Nippon Sanso and its consolidated subsidiaries (excluding the Gas Business in
Europe and the Gas Business in Asia and Oceania)

In FYE2021, industrial waste generated by main overseas consolidated subsidiaries were added to thereporting boundary. Of the industrial waste generated by the Nippon Sanso Holdings Group, a large amount
was generated by specialty gas plants, mainly in the Gas Business in the United States, and there was a
one-time aggregated amount of waste generated by the Gas Business in Japan. As a result, the amountincreased year on year to 14,273 tonnes.
*W aste generated by the Gas Business in Japan is the volume for which the Company issued a manifest.

15,353

20.0

%

5,505
(Years ended
March 31)

14.6

Employee Turnover Rate (Consolidated)

Employment Rate of Persons with Disabilities(Taiyo Nippon Sanso; as of June 1 each year)

1,000

2021

20.1

13.7

As of the end of FYE2021, the consolidated labor force comprised 15,307 male employees and 3,848 female
employees. The Nippon Sanso Holdings Group has actively promoted career opportunities for female
employees, and the percentage of female employees out of total labor force raised 0.5 percentage point fromthe previous fiscal year-end. The percentage of female managers raised 0.9 percentage point from theprevious fiscal year-end. Hereafter, we will continue various measures to promote career opportunities forfemale employees, such as improving working environments and improving systems.

2.68

0.79

(Years ended
March 31)

3.0

2,660
87

3,255

19.6

13.7

2.00

2,000

5,691
2,917

600

62

19.1

17.8

4.0

724

Waste Generated (Including Valuable Materials)

14,273
1,924
758 395

3.00

2,730

Nippon Sanso Holdings Group’s fresh water withdrawn increased significantly since FYE2020 due to acquisitionsof the HyCO business and the Gas Business in Europe. Furthermore, from FYE2021, the addition of HyCO andliquid carbon dioxide plants of the Gas Business in Europe to the reporting boundary resulted in a year-on-yearincrease to 43.35 million m3.

16,000

40.0

30.0

0

1.99

Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business
Reporting boundary: Gas production facilities and business sites with facilities specified under the Water
Pollution Prevention Act belonging to consolidated subsidiaries of Nippon Sanso Holdings Corporation in
Japan and main overseas consolidated subsidiaries* In FYE2020, business sites with facilities specified under the Water Pollution Prevention Act belonging toconsolidated subsidiaries in Japan were added to the reporting boundary.

Production processes for industrial gases use a significant amount of electric power. The bulk of the
Nippon Sanso Holdings Group’s electric power consumption goes to the operation of ASUs. Optimal operationof ASUs and the impact of COVID-19 resulted in a year-on-year decrease to 9,592 GWh.

3,848

* The frequency rate expresses the frequency of accidents resulting in lost workdays in a fiscal year,
calculated as the number of injuries/deaths due to occupational accidents per million work hours

2.52

1,317

1,362
222
457

3,795

2018
2019
2020
2021
(Years ended
March 31)
Male (Left scale)
Female (Left scale)
Female employees as a percentage of total labor force (Right scale)
Female managers as a percentage of total managerial positions (Right scale)* Numbers above are aggregated from actual figures of the Nippon Sanso Holdings Group companies as of the endof each fiscal year. Due to differences in the reporting periods, part of the data includes figures as of the end of
December. Due to a revision of this aggregation method, figures presented in previous fiscal years have been
retroactively revised.

Gas Business in Japan
Gas Business in the United States
Gas Business in Europe
Gas Business in Asia and Oceania
Thermos Business* Numbers above are aggregated from actual figures of the Nippon Sanso Holdings Group companies as of theend of each fiscal year. Due to differences in the reporting periods, part of the data includes figures as of theend of December. Due to a revision of this aggregation method, figures presented in previous fiscal years havebeen retroactively revised.

3,002
229

2,000

2,824

3,742

2019

9,592
908 16

3,621

2,734

12,611Frequency Rate of Occupational Accidents Resulting
in Lost Workdays*

5,000

19,1559.5

The consolidated number of employees for FYE2021 was 19,155. Investments in the European businessthrough M&A resulted in the addition of European personnel in FYE2019. Despite changes in each segment
since then, the overall number has remained level.

Electric Power Consumption

19,341

15,345

5,000

2,014

18,974

20
2017

2018

2019

2020

2021

(Years ended
March 31)0

In FYE2021, individuals with disabilities accounted for 2.3% of our labor force, the same as to the legally
mandated rate for private-sector companies in Japan of 2.3%. The Nippon Sanso Holdings Group endeavors
to provide working environments in which individuals with disabilities can reach their full potential and tosupport the realization of a society that enables individuals with disabilities to play an active role that leverages
their abilities.

2

8

2017

5

29
29

2018

2

33

44

2

60

2

33
7

4
2019

22
2020

7

22
2021

40
20
0
(Years ended
March 31)

Internal directors (Left scale)
Independent outside directors (Left scale)
Percentage of directors serving concurrently as executive officers (Right scale)
Independent outside directors (Right scale)* Regarding the number of directors and outside directors, the President CEO is counted as an executive officer.
In FYE2021, the Board of Directors comprised seven internal and two independent outside directors, withdirectors serving concurrently as executive officers accounting for 33% of the Board as a whole and independent outside directors accounting for 22%. The Advisory Committee on Appointments and Remuneration,
which is chaired by an independent outside director and comprises the President CEO and independent
outside directors, was established to improve the transparency and objectivity of procedures for appointing
and determining remuneration for directors.

Energy consumption: The energy of the consumed fuels is calculated based on the gross calorific values specified in Japan’s Act on the Rational Use of Energy. Purchased electricity and purchased steam are converted into primaryenergy amounts.
For information on main subsidiaries, please see Sustainability Data (P.183).

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OUR MANAGEMENTAwards

Editorial Note

Japan

EuropePeople Who Helped to Produce This Report (in no particular order)

Publication Process of This Report
In publishing “Nippon Sanso Holdings Integrated Report 2021,” we

Nippon Sanso Holdings Corporation

Kazuyuki Futamata

Nippon Sanso Holdings Corporation

Hiroaki Hijino

Nippon Sanso Holdings Corporation

Todd D. Givens

Designated as a 2021 Health &Received the Welfare Champion 2020 award

held 12 planning meetings based on the results of investor survey

Productivity Management

Nippon Gases Italia S.r.l. was selected as a Welfare Champion 2020

questionnaires and feedback and requests received from stakeholders.

Outstanding Organization (Largein recognition of its various initiatives placing basic values such as

In addition, a production project team headed by CFO Alan DavidEnterprise Category) (“White 500”)

the health, welfare, and safety of employees and their families at the

Taiyo Nippon Sanso Corporation wascenter of the company’s goals.

Taiyo Nippon Sanso Corporation

Ayako Kai

Taiyo Nippon Sanso Corporation

Toyoyuki Sato

Draper was formed in 2021. This production team has played a

Taiyo Nippon Sanso Corporation

Chihiro Takai

central role in gathering and collating information on initiatives in

Taiyo Nippon Sanso Corporation

Masahiro Takeuchi

IMI Co., Ltd.

each business and region for the entire Group.

recognized as a corporation that imple-

Taiyo Nippon Sanso Gas & Welding Corporation

ments particularly outstanding healthReceived Supplier Award 2020and productivity management by

Nippon Gases Germany received

Overview of the 12 Planning Meetings

Nippon Kenko Kaigi.

the Supplier Award 2020 from

Main Participants at the Meetings

the major German healthcare
equipment bulk purchasing

Designated as a Sports Yell Company

Emiko Shimada
Yudai Ishizaki

Nippon Ekitan Corporation

Ryuta Takahashi

Matheson Tri-Gas, Inc.

Jeremy Holden

Matheson Tri-Gas, Inc.

John B. Molnar(Position, and organization as of September 1, 2021)

Matheson Tri-Gas, Inc.

Kelvin Dixon• Nippon Sanso Holdings Corporation

Matheson Tri-Gas, Inc.

Lisa Kratz

Matheson Tri-Gas, Inc.

Marisa Reyes

Matheson Tri-Gas, Inc.

Stephen StroudMatheson Tri-Gas, Inc.

Steve Foster

Taiyo Nippon Sanso Corporation was designated as a Sports Yellorganization Prospitalia Group

Representative Director, President CEO Toshihiko Hamada;Company by the Japan Sports Agency, in recognition of initiatives

in recognition of its performance

Senior Executive Officers Satoshi Wataru, Tsutomu Moroishi,such as the Sergio Soccer Clinic, which it has run since 1990, andin reliable and safe supplies,

and Takeshi Miki;

the Walking Rally held by the Health Insurance Association.

product quality, services, andExecutive Officer Alan David Draper;communications.

Group Internal Control Office, Group Legal Office,Nippon Gases Euro-Holding S.L.U.

Inaki Uriarte

Group Human Resources & Corporate Secretariat Office,Nippon Gases Euro-Holding S.L.U.

Justin Corcho Maters

Nippon Gases Euro-Holding S.L.U.

Laura Sigüenza

Nippon Gases Euro-Holding S.L.U.

Wim De Raedt

Nippon Gases Belgium NV

Ann Schauwers

Nippon Gases España S.L.U.

Cristina Gómez

Received the Minister of Economy, Trade and Industry Award

Continental Carbonic Products, Inc.

The Oyama Plant of Japan Fine Products Corporation received theReceived the EcoVadis Silver Medal

Group Corporate Planning Office, Group Finance andMinister of Economy, Trade and Industry award as a workplace with

Nippon Gases Industrial S.r.l. received the Silver Medal in the CSR

Accounting Office, and Group Technological Affairs &particularly outstanding safety measures in regard to the structure,certification by EcoVadis, evaluating corporate management systems

Environment Officeequipment, and manufacturing methods of each facility in the man-in four themes (environment, labor and human rights, ethics, and• Edge International, Inc.

ufacture of high-pressure gases.

sustainable materials procurement).

Western International Gas & Cylinders, Inc.

Nippon Gases Italia S.r.l.

Sally Perez
Stephen Thompson

Paolo Ronzi

Nippon Sanso Holdings Singapore Pte. Ltd.

Hitoshi Ishihara

Main Discussion Themes

Nippon Sanso Holdings Singapore Pte. Ltd.

Cheryl Yong

Nippon Sanso Holdings Singapore Pte. Ltd.

Pauline Loo

Received the Chiba Labor Bureau Chief’s “Excellence Award”

Designated as Distinction Level in the International Safety Award• Consider the direction for Integrated Report 2021

Chiba Sano Center Co., Ltd.’s Sodegaura Plant received this award in

Nippon Gases Offshore and Nippon Gases UK Ltd was designated as• The uniqueness of our Group in comparison with other companies

recognition of its long period free from recording of accidents orDistinction Level in the International Safety Awards, the most author-• Aspirations for our Groupdisasters—18,500 days (over 50 years) since the start of its opera-

itative award system for evaluating corporate health and safety• Human resources of our Grouptions—as well as its health and safety activities.

initiatives by the British Safety Council.

• Nippon Sanso Holdings Group’s business domains (Industrial

Dalian Taiyo Nippon Sanso Gas Co., Ltd.

gases business, Electronics business, and Thermos business)

Thermos K.K.

Yuji Kataoka

Thermos K.K.

Kana Kibashi

Thermos K.K.

Toshio Koizumi

Thermos K.K.

Yuki Kondo

Thermos K.K.

Masataka Sakamoto

United States

Operating Company Groups in Asia and Oceania

Nippon Sanso Ingasco, Inc.

Maricar D. Santos

Nippon Sanso Taiwan, Inc.

Richard Hsu

Nippon Sanso Vietnam JSC

Pham Van Huu

Leeden National Oxygen Ltd.

• Corporate governance of our Group• Our Group’s technological capabilities and R&D strategy

Janice Lee
Yang DiAward certificate received from HDT Global

Received the Strategic Partner Award

Matheson Tri-Gas, Inc. received an award certificate from

Taiyo Nippon Sanso Trading (Shanghai) Co., Ltd. received the Strategic

Thermos K.K.

Hideyuki Sumida

HDT Global, Inc. for providing reliable supplies during the COVID-19

Partner Award from Corning (Hainan) Optical Communications Co., Ltd.

Thermos K.K.

Yasuhiro Murakami

pandemic.

in recognition of its outstanding quality, supply systems, and service.

Thermos K.K.

Masashi Yamada

Letter of appreciation received from the United States

Received a commendation for legally compliant management

Department of Defense

Matheson Specialty Gas (Xi’an) Co., Ltd. received a commendation

Matheson Tri-Gas, Inc. received a letter of appreciation from thefor outstanding performance in the evaluation for legal compliance

United States Department of Defense, recognizing its contribution toheld twice annually by Samsung China Semiconductor Co., Ltd.

the Department’s maintenance of industrial infrastructure by mainSelected for Shanghai Xinzhuang Industrial Zone

taining its supply chain during COVID-19.

Top 100 Companies
Award received at the 2020 Safety Awards

Shanghai Taiyo Nippon Sanso Gas Co., Ltd.

The Compressed Gas Association (CGA) is an organization thatreceived a commendation for being selected as

promotes and develops safety standards in the industrial, medical,

one of the top 100 companies in the Shanghai

and food gas sectors. Matheson Tri-Gas, Inc. was awarded theXinzhuang Industrial Zone, proactively adapting

Environmental Award, Fleet Safety Excellence Award, and Safe

to market changes, promoting technological

Facility Performance Awards at the annual general meeting of theinnovation, fulfilling its social responsibility, and

CGA in recognition of its initiatives to reuse toxic gas and its excel-

proactively contributing to the economic andlent safety performance.

social development of the industrial zone.

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• Sustainability of the Nippon Sanso Holdings Group

Vacuumtech Philippines Inc.

Rubylyn Sandoval Manalo

Editorial Note
Thank you for taking the time to read “Nippon Sanso Holdings Integrated Report 2021” in its entirety. Nippon Sanso Holdings Corporationtransitioned to a holding company structure in October 2020. Personally, I feel that various changes have started to emerge that will strengthen
the Group’s comprehensive capabilities. To enable us to communicate these changes to as many readers as possible through this integrated
report, in producing it we asked for direct and indirect input from an even greater number of Nippon Sanso Holdings Group members than
before. Naturally, we aimed to communicate the ideas and business strategies of our top management, but we also hope that by involving
the people who will implement these strategies, the report will offer stakeholders inside and outside the Company a sense of the potential of
Nippon Sanso Holdings and its function in society. However, only one year since its transition to a holding company, Nippon Sanso Holdings
has only just made a start. I believe there is much more that we have not been able to include in the report. As we continue our dialogue
with stakeholders going forward, I hope that we will achieve a deeper mutual understanding. I thank you for your continued support.

Takayoshi Umehara
General Manager, Investor Relations, Group Finance and Accounting Office, Nippon Sanso Holdings Corporation

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142

MORE
INFORMATIONON
SUSTAINABILITY

Stance on Sustainability

144
Sustainability Topics
144...... Management Issues
148...... The Earth154...... Society
164...... People (The Company and Its Organizational Structure)

Nippon Sanso Holdings creates new value for society through innovative gas solutions,contributing to the development of all manner of industries and fostering more comfortable futures
for humankind, for society, and for the earth. This aspiration is embodied in our Group Vision,
shared by our employees and serving as motivation for the Group to work together for sustainability
management. The Group engages in a wide variety of sustainability initiatives across the globe.
We believe that working to help resolve issues for humankind, for society, and for the earth leads
to higher levels of social value and economic value, while also enhancing the corporate value of
the Nippon Sanso Holdings Group.

176
Policies178* The following operating companies are engaged in the activities highlighted in the More Information on Sustainability section ineach geographic hub (Japan, the United States, Europe, and Asia and Oceania) and in the Thermos Business.

Sustainability Data

NSHD: Nippon Sanso Holdings Corporation
TNSC: Taiyo Nippon Sanso Corporation
MTG: Matheson Tri-Gas, Inc.
NGE: Nippon Gases Euro-Holding S.L.U.
NSHS: Nippon Sanso Holdings Singapore Pte. Ltd.
Thermos: Thermos K.K.

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MORE INFORMATION ON SUSTAINABILITY

Stance on Sustainability

In the main text of this integrated report, we discussed a wide range of our activities and social roles,
including the characteristics of the Nippon Sanso Holdings Group, our aspirations, and value creation. We
have also addressed the opportunities incorporated into the Group sustainability strategy for contributing solutions to climate change and other global issues by providing innovative gas solutions.
In More Information on Sustainability, we provide more information in detail to a degree not coveredin the main text of the report. In this way, we hope to encourage a deeper understanding of Nippon
Sanso Holdings Group sustainability management among our stakeholders. This section focuses on topics
related to the global sustainability activities of the Nippon Sanso Holdings Group that we believe will leadto a greater appreciation of the activities we conduct worldwide. We believe readers will gain a better
understanding of sustainability management when reading this section in conjunction with the main bodyof the report. This section alone, however, provides sufficient context and information about activities.
Read on to learn more about sustainability activities at the Nippon Sanso Holdings Group.

ESG Materiality
With the aim of contributing to the realization of a sustainable society, Nippon Sanso Holdings works to ensure a solid grasp of
its impact on the earth, 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 haveidentified as being of material importance, which are grouped under four themes, including management issues.
(

See P.58 to 61 in this integrated report for more about ESG materialities and our process for identifying materialities.)
Theme

Management
IssuesMessage from the CSO

We contribute to achieving a carbon-neutral society, aiming
for sustainable growth and higher levels of corporate value.

Takeshi Miki
Senior Executive Officer,
Technology and Environment
Office Manager,
Chief Sustainability Officer (CSO)
Nippon Sanso Holdings Corporation(Additionally appointed as
Senior Executive Officer,

As stakeholders demand solutions to global-scale environmental problems and social issues,
corporations are under increasing pressure to contribute to the United Nations Sustainable
Development Goals (SDGs). Both financial and non-financial initiatives are important for thesustainable development of a company. In particular, environmental, social, and governance(ESG) management is essential.
The Nippon Sanso Holdings Group possesses numerous technologies that it has cultivatedover many years. We use these technologies to provide products and services that help
resolve environmental and social issues. Examples include technologies to increase combustion efficiency and technologies that use hydrogen and ammonia, substances that do notemit CO2. In October 2020, we made a fresh start under a holding company structure. Asa corporate group active around the globe, we will continue to engage in more effective
sustainability initiatives from a broader perspective than ever before.

The EarthSociety

Head of Technological Affairs Unit,
Taiyo Nippon Sanso Corporation)

People(The Company
and Its
Organizational
Structure)

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Materiality (Material Issues)

Principal Initiatives• Compliance• Corporate governance• Process safety• Reinforcement of systems based on Japan’s
Corporate Governance Code
• Initiatives to ensure safe and reliable supply• Continuous implementation of compliancetraining• Efficient use of resourcesand energy• Climate change• Securing of cleanwater resources• Preservation of biodiversity• Promotion of environmental management• Initiatives to protect the global environment• Contribution to maintenance ofphysical health• Contribution to medical care
• Response to food- andagriculture-related issues• Increase in consumer satisfaction• Contribution to upgrading andexpanding social infrastructure• Response to smart societies• Development of products that contributeto solutions for environmental andsocial issues• Reinforcement of quality assurance andmanagement systems• Respect for human rights• Occupational health and safety• Human resources
development and training• Diversity and inclusion• Product and service reliability• Promotion of measures toimprove information security
and privacy• Stakeholder engagement• Contribution to communities• Promotion of sophisticatedinformation and communications
technology (ICT) use• Participation in initiatives anddemonstration of leadership• Promotion of sustainability inthe supply chain• Thorough internal promotion of the“Policy on the Prevention and Eradicationof Harassment in the Workplace”• Employee education and training• Maintenance and improvement of
information security systems• Promotion of sophisticated ICT use• Dialogue with shareholders andinvestment analysts• Initiatives to ensure safe and reliable supply• Creation of environments to promote
innovation and diversity• Social contribution activities• Health management initiatives• Enhancement of information disclosure

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Relevant SDGs

MORE INFORMATION ON SUSTAINABILITY

Sustainability Topics

NSHD Reporting Based on the Recommendations of the Task Force on Climate-related

Management Issues

Financial Disclosures (TCFD)

We strive to engage in corporate activities in a fair, impartial, and honest manner based on the highest
ethical standards. To this end, we pursue compliance, stronger corporate governance, and security andsafety for the continued reliable supply of gases as important management issues, and we are strengthening our efforts in these areas. As “The Gas Professionals,” we are responsible in particular for the safeand reliable supply of industrial gases to our customers across all manner of industries. In accordancewith our belief that selling gases is commensurate with selling safety, we follow the presidential policyof practicing safety under our own higher standards, establishing a safety management system headedby the president to ensure comprehensive safety management.

Nippon Sanso Holdings announced its endorsement of the TCFD in November 2019. As a group, we have worked hard to reduce
our environmental impact, engage in energy-saving activities, and expand our lineup of products that contribute to the reductionof greenhouse gas (GHG) emissions. Based on the final recommendations of the TCFD, we will strive even harder to make progress in these initiatives, expanding information disclosure in stages as we endeavor to improve Group corporate value. We havealso established a governance structure with respect to climate change issues. Here, we are clarifying the roles and activity policies of each board and committee in our efforts to address climate change.
Board/Committee

Roles

Activities for FYE2021• F ormulate basic management policies•R eceive business status reports and supervise
overall management

Board of Directors

NSHD Strengthening of Corporate Governance
In March 2015, the Financial Services Agency and the Tokyo Stock Exchange collaborated to issue Japan’s Corporate GovernanceCode. We take the principles of the Code seriously, and we have endeavored to make our systems more effective based on theintent of the Code. We will continue striving to improve compliance as we aim to achieve sustainable societies. We have established the Principles of Corporate Governance, believing that the essence of corporate governance is to ensure transparency andfairness in decision-making from the stance of our stakeholders and the perspectives of sustainable Group growth and long-term
corporate value improvement. Our approach includes leveraging management resources effectively to increase the vitality ofmanagement through swift and conclusive decision-making.
(See pages 112 to 131 in this integrated report for more about the Group’s corporate governance.)

Auditing Structure and Risk Management Structure(Japan, the United States, Europe,
Appointment/
dismissal

Appointment/dismissal
Audit

Advisory Committee on
Appointments and Remuneration

Audit &
Supervisory Board

Response

Coordination

Management
Committee
Corporate
Audit Office• Reported the status of initiatives in each region to
Nippon Sanso Holdings

Asia and Oceania, Thermos)

Nine members,
three of whom are outside

Appointment/
dismissal

Supervision

TNSC Compliance Education Initiatives

Reporting

Independent Auditor

Global Strategy Review Committee

Audit ofoperations
Audit ofaccounts• Pursue and report on sustainability activities at
each operating company

Board of Directors

Consultation

Representative Director, President CEO

Four members,
three of whom are outside• Discuss risks and opportunities related to climatechange and decide policies for important climatechange issues referred to the Global Strategy• Reported on the FYE2020 GHG emissions and GHG
Management Committee, etc.
Review Committee
emission reduction targets of each company within(Global Strategy Review Committee,• Hold meetings between Nippon Sanso Holdings
the Nippon Sanso Holdings Group
Global Risk Management Committee,
and the Technological Risk Liaison Committees• Deliberated FYE2031 GHG emission forecasts foretc.)of each operating company to decide and impleNippon Sanso Holdings Group companies
ment globally those matters resolved by the
Global Strategy Review Committee
Board meetings ofeach operating company

General Meeting of Shareholders

Appointment/
dismissal•R eported on GHG emissions(first half and second half business status reports,
Technological Risk Management Committee reports)• S elected MOS indexes for climate change issues;
reported on activities conducted in the previous
fiscal year•D eliberated and made decisions on various policies,
including the Nippon Sanso Holdings Group Codeof Conduct

Chairperson: President CEO

Global Risk Management Committee
Chairperson: Representative Director and President CEO

Audit ofaccounts

We provide compliance education and training on an ongoing basis for employees at all levels. Organization-specific compliancetraining helps employees learn the essentials of compliance, anti-monopoly laws, and anti-harassment laws. Our training is also
designed to instill an awareness and desire to improve compliance in our employees. One unique feature of this training is thatthey are conducted by compliance staff in each division, branch, and main subsidiary. This framework allows us to communicate
and convey the implications and importance of compliance from a perspective closer to the front lines of our businesses. In lightof the change in work styles due to COVID-19, we conducted training via online technology and video broadcasts throughout
FYE2021.

Global Compliance Committee

Internal
audit

Chairperson: CCO

Holding Company Divisions and Affiliated Business Companies

Coordination

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Sustainability Topics:
Management Issues

TNSC/NSHDTechnical Academy: An Education Center for Improving Technical and Safety Capabilities
two-way dialogue with participants to increase an awareness ofrisks, simulating potential workplace accidents and considering
responses. Many employees that have participated in theseseminars comment on the real sense of danger they felt during
the lecture, an element not normally expected from an online
course. More than 550 employees from domestic and overseas
Group companies have participated in these online seminars,
and the Technical Academy will continue to use these seminars
as a pillar of safety education, continuing online courses in
conjunction with live hazard simulation training.

The mission of the Group is to provide industrial gases reliably
and safety to our customers on a continued basis. We strive
diligently to prevent industrial accidents by improving thetechnical and safety capabilities of our employees in accordance with our belief that selling gases is commensurate withselling safety. The Technical Academy serves as a center for
employee education and offers technical seminars for employees to learn the basic technologies related to industrial gases
and a wide range of specialized technologies. Certain training
sessions involve the use of equipment that simulates highpressure gas-related hazards, offering an environment in which
employees learn the basics of safety. The academy uses virtual
reality (VR) to simulate accidents, such as falling or caught-in
accidents, to make employees aware of the dangers lurking
in their daily work and to promote safe work practices.
The Technical Academy has been holding seminars online
to improve risk awareness during the COVID-19 pandemic.
These seminars are conducted via live streaming, and instructors
use the same equipment used for regular hazard simulation
training in their demonstrations. Instructors emphasize

VR-based hazard simulation device* This is a method proposed by the U.S. Center for Chemical Process Safety to prevent process-related accidents and disasters.

1

2

3

4

5

Physical Injuries

Property
DamageSpewing and Leakage
Inert Gases,
Flammable Gases

Characteristics
Potential Impact of High-Pressure Gases
Spewing and Leakage Spewing and Leakage
Flammable Gases,
Specialty HighToxic Gases
Pressure Gases

Explosion/Fire, Rupture/
Breakage, Other

Environmental
ImpactSocial Impact andMedia Coverage

27

Potentially fatal leakage
Impact on wide area
off-site

Potentially fatalleakage
Impact on wide area
off-site

Potentially fatal
Impact on wide area off-site

Significant impact on local
Environmental
community
response costing Large-scale investigation and¥250 million
monitoring by government, etc.
or moreNational media coverage lasting
several news cycles

9Single job-site death
Multiple lost-time
on-site injuries

Internal damageof between¥100 millionand ¥1 billion

Leakage with thepotential for serious
injuries
Impact off-site

Leakage with thepotential for injuries
Impact off-site

Potential for serious injuries
Impact off-site

Environmental
Local evacuation required
response cost of Investigations and monitoring
between ¥100
conducted by prefectural
million andgovernments and police¥250 million Brief coverage by national media

3

Lost-time injuries
affecting one or more
persons off-site
Lost-time injury
affecting one person
on-siteInternal
damages ofbetween ¥10
million and¥100 million

Leakage with nophysical injury orproperty damage(including minor
leakage)

Potential for serious injuries
Site-wide impact on-site

Environmental
response cost ofless than ¥100
millionRequest to evacuate residents
living around the plant as aprecautionary measure
Investigations and monitoring
conducted by the company
Local media coverage

Short-term
remedial action
requiredLong-term investigations ormonitoring by the company
not needed
Brief coverage by local media

Leakage with the
Leakage with thepotential for minor
potential for minor
injuries
injuries
Leakage with the
Leakage with thepotential to cause
potential to cause
site-wide damage on-site damage within the facility

1Lost-time accidentInternal
off-site affecting one
Leakage with no physicaldamages ofor more persons
injury but potential for
between ¥2.5
Lost-time accident
property damage or othermillion and ¥10
on-site affecting one or
impact inside the facility
millionmore persons

0.3

First aid required forone or more persons
on-siteInternal
damages ofbetween¥250,000 and¥2.5 million

Minor leakage withphysical injuries orproperty damage

No physical injury but impact
inside the facility

Leeden National Oxygen Ltd. (Leeden NOX) has been holding annual safety
conferences since 2017, completing four such events through 2020.
Participants are mainly plant equipment supervisors, safety officers, andmanagers from company subsidiaries. The purpose of the conference is toencourage a strong safety culture in the workplace, emphasizing the safety
and health of workers. The ultimate goal is to share experiences among
Leeden NOX group companies and pursue the group’s common safety policy,
As Low As Reasonably Practicable (ALARP), to reduce and eliminate risks.

MTG

Safety Activities at Matheson Tri-Gas

Matheson Tri-Gas, Inc. (MTG) formulates and follows an annual safety activity
plan to reduce and prevent accidents. MTG pursues a culture of safety
through common safety standards and internal audits, conducted in conjunction with subsidiaries Continental Carbonic Products, Inc., and WesternInternational Gas & Cylinders, Inc.
MTG also fosters safety culture through safety training activities to prevent
slips and falls when handling gas cylinders and getting on or off vehicles. In
the future, MTG will play a central role in further safety initiatives with a view
toward creating an integrated safety organization with the aforementioned
subsidiaries.

Device introduced to prevent injuries when moving gas cylinders

Incident with no physical injuries orproperty damage
Explosion or fire: Sound of explosion
and/or small fire
Rupture or destruction: Sound of
rupture sound and/or deformation

Minor leakage with nophysical injuries orproperty damage

NIPPON SANSO HOLDINGS CORPORATION

Safety Conferences

3rd safety conference

Multiple job site deaths Internal damage Potentially fatal leakage
Death of one or more of ¥1 billion or
Impact on wide area
persons off-site
more
off-site

Leakage with thepotential for serious
injuries
Impact off-siteHigh-pressure gas filling stations require attention to safety at all times.
Filling station safety is a minimum prerequisite for us, our colleagues, customers, and others to work in a safe environment. Not only are we reminded of
the importance of safety every day, but we also strive to improve safetyrelated communications.
For example, we held a Safety Excellence Journey event, attended by
employees from plants, offices, workplaces, and their own residences. The
facilities manager served as the instructor for this training provided to all
operators. The purpose of this safety seminar was to help employees understand and recognize the rules for maintaining and improving safety withrespect to the following three important matters:
1) The proper use of personal protective equipment (PPE)2) The importance of inspecting cylinders before filling3) The safe handling of cylinders.
We hold these safety seminars and display safety posters at filling stations
to raise safety awareness among all employees working at filling stations
across Europe.

Asia

Taiyo Nippon Sanso Corporation has developed its own accident intensity standards, based on the Center for Chemical Process
Safety (CCPS) evaluation method* and in consideration of the potential impact of high-pressure gases. The company evaluates
accidents in Japan based on a five-level scale and five characteristics: (1) physical injuries, (2) property damage, (3) potential
impact of high-pressure gases, (4) environmental impact, and (5) social impact and media coverage. The evaluation results inan overall number of points by which the company quantifies intensity.

Level Points

Filling Station Safety Conferences (Safety Activities)

The safety poster displayed at filling stations

TNSC CCPS Evaluation Correspondence (High-Pressure Gas Version)

Intensity

NGE

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Sustainability Topics

Material Balance of the Nippon Sanso Holdings GroupThe Earth
The Nippon Sanso Holdings Group responds to climate change, working under the main banner of
preventing global warming. In this regard, our efforts include reducing energy consumption per unitof production at gas production plants, encouraging energy conservation in our offices, and increasing
the transport efficiency of our tanker trucks. The Group brings visibility to the environmental impact
associated with manufacturing its mainstay products and with the processes supporting its businessactivities. We calculate our total GHG emissions and reduction contribution, using this information to
reduce our environmental impact further. In addition, we develop and market products that contributeto global environmental conservation through lower environmental impact.

The main products of the Nippon Sanso Holdings Group are oxygen, nitrogen, and argon. We manufacture these products using
air as the raw material, which we return mostly to the atmosphere. Since both raw material and finished product are gases, we
generate little waste. Since the raw material is air, we do not need to procure any other raw materials. In other words, the industrial gases business model of separating and selling air is a sustainable, resource-recycling business that consumes essentially no
raw materials and generates no waste.

*1 GHG emission reduction contribution for products and services iscalculated in accordance with the Guidelines for Quantifying GHG
Emission Reductions of Goods or Services through Global Value
Chain (Ministry of Economy, Trade and Industry)*2 G
 HG emission reduction contribution from the use of industrial gases*3 GHG reduction contribution through industrial gases includes the
reduction contribution of consolidated subsidiaries in Japan andcertain affiliated companies.
*4 For details of the reporting boundary and method of calculation,please refer to P.189, “Calculation Methods for GHG Emission
Reduction Contribution.”

GHG Emission Reduction Contribution

5,066 thousand tonnes CO2e

Total GHG Emissions

5,651 thousand tonnes CO2e

Reduction Contribution Details*4
Products and services*1
2,892 kilotonnes CO2e

Industrial gases*2, *3
2,174 kilotonnes CO2e

Indicators withmark have been assured by KPMG AZSA
Sustainability Co., Ltd.

Development and production

Electricity 9,582 GWh

Environmental Impact of Oxygen, Nitrogen, and Argon Manufacturing Processes
The production of oxygen, nitrogen, and argon, which constitute the main products of the Group, requires a tremendous
amount of electricity. Oxygen, nitrogen, and argon are manufactured by separating air in deep-cooled air separation equipment.
First, we compress air, which is the raw material. Compressing air requires much energy and much electricity. Then, we cool thecompressed air to near liquefaction temperature and send it to the distillation unit. Inside the distillation unit, gaseous air andliquid come into contact, causing distillation and separation. Nitrogen, which has a low boiling point, is extracted from the top
layer. Oxygen, which has a high boiling point, is concentrated into a liquid and extracted from the bottom layer. Argon is
extracted from the middle.

Heat 738 TJ

IN

Fuels 9,520 TJ

Gas filling
stations

Water 43.35 million m3
Suppliedin cylinders

Diesel oil/gasoline
12 thousand kL

Gas production
facilities

Water 29.50 million m3

Supplied bytanker trucks

Suppliedby pipeline

SupplyOUTINCO2 5,613 thousand
tonnes CO2e

OUT

CO2 32 thousand
tonnes CO2e

Structure of a Deep-Cooled Air Separation Unit (ASU)
Cooling unit

Main heatexchanger

Xenon

KryptonOxygenNitrogen

Argon

OxygenNitrogen

Argon

Hydrogen

Xe

Kr

O2

N2

Ar

O2

N2

Ar

H2

Carbondioxide gas

HydrogenHeliumH2

He

LP gasElectronicmaterials
gases

Distillation unit
CO2

Pre-treatment device(removes water and CO2)
Atmospheric
air

Argon

Liquid productAir compressor

IN

Diesel oil/gasoline
0.2 thousand kL

OUT
Sites

Low temperature

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CO2 6 thousand tonnes CO2eService vehicles

Use
Customers• Steelmaking/• Glass/papermaking
non-ferrous metals• Healthcare• Electronics• Food• Petroleum/chemicals• Others• Automobiles/machinery

Raw air

148

Ar

Liquefied gases are transported from production facilities bytanker truck to filling stations, where vaporized gases arecompressed into cylinders.

Fuels 15 TJ

Oxygen gas

NIPPON SANSO HOLDINGS CORPORATION

Argon

N2

Electricity 10 GWh

Exhaust gas

Room temperature

Nitrogen

O2

CO

Sales

Nitrogen gas

Air inlet

OxygenCarbonmonoxide

Industrial gases are used in a broad range
of industries, from healthcare and foodto petroleum/chemicals and electronics.

NIPPON SANSO HOLDINGS CORPORATION

149* Boundary of IN/OUT data aggregation
Development and production: Main consolidated subsidiaries
Supply: Truck fuel, etc., used by main consolidated subsidiaries(excluding the United States) (excluding transportation contractors)
Sales: Domestic consolidated subsidiaries(See Sustainability Data on P.183 for more on main consolidated
subsidiaries.)

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Sustainability Topics:
The Earth

Efforts and Achievements in Preventing Global Warming
The process of producing industrial gases requires significant
amounts of electricity. The Nippon Sanso Holdings Grouptakes measures to reduce the risk of climate change throughinitiatives to reduce the environmental impact of its businessactivities. These measures include reducing energy consumption per unit of production at gas production plants, undertaking energy conservation in our offices, improving tanker
truck transport efficiency, and expanding the use of energy
from renewable sources.
We also strive to increase disclosures and expand the scopeof data collection related to non-financial information. We
disclose information by calculating and publishing our GHG
emission reduction contribution associated with environmentfriendly products and support the TCFD.

TNSC Hydrogen Filling System at the Kawasaki-Mizue Business Base
Trends in Electricity Consumption and Energy
Consumption per Unit Index
Million kWh
10,000

100

71.2

7,500

4,640

5,000

2,500

0

75

50

25

1991
(Base year)

2016

2017

2018

2019

2020

0
2021
(Years ended
March 31)

Electricity consumption (Left axis)
Electricity per unit of production index (Right axis)
Reporting boundary: Gas production plants of consolidated subsidiaries in Japan,
including Taiyo Nippon Sanso Corporation, and certain affiliated companies* See Response to Environmental and Social Issues on page 66 for more on TCFD disclosures.

Other Major Initiatives
Issues and Targets

Major Initiatives

Achievements• Turned off unnecessary office automation equipment;
Implement energy conservation
turned off unnecessary lighting
at Company business locations:
5.0% reduction• Replaced air conditioning, office automation equipReduce electricity usage
ment, lighting equipment, and shared facilities with(vs. FYE2020)(annual average of 1% over theenergy-saving equipment
medium to long term)• Implemented No Overtime Days and Cool Biz
Pursue more efficient tanker
truck transportation:
Reduce fuel consumption perunit of product transported• Optimized delivery routes• Revised delivery intervals• Conducted more in-person weight• Introduced new tanker trucks• Implemented consistent eco-driving training

Contribute to the environment
through products:
Expand sales of products that
contribute to the environment

Expanded sales of hydrogen stations, SCOPE-Jet®,
MG Shield®, SF6 recovery services, Thermos products,
nitrogen gas supply systems for laser processing,combustion-type gas treatment equipment, andnew refrigerants

Contribute to the environment
through products:
Oxygen-enriched combustion in blast furnaces
Expand sales of industrial gases

27.4% reduction(vs. FYE1991)

Target Companies

All business locations of Taiyo
Nippon Sanso Corporation(excluding gas production plants)

Taiyo Nippon Sanso Corporationgroup logistics companies andmajor transportation contractors

Reduction
contribution*2 of
2,892 thousand
tonnes CO2

Main consolidated
subsidiaries of Nippon Sanso
Holdings Corporation*1

Reduction
contribution*2 of
2,174 thousand
tonnes CO2

Consolidated subsidiaries andcertain affiliates of Nippon Sanso
Holdings Corporation*1

The Kawasaki-Mizue Business Base of Taiyo Nippon Sanso Corporation
applied for recognition as a regional renewable energy hydrogen stationenterprise, which is a project under the auspices of the Ministry of theEnvironment. The plant constructed a CO2-free renewable energy hydrogen
filling facility as a model for on-site hydrogen filling stations in accordancewith the Kawasaki Hydrogen Strategy for the Realization of a Hydrogen
Society in Kawasaki City. This project is just one measure to reduce the environmental footprint of business activities in the local community. The plant
generates renewable energy (solar panels) to power the facility, using thiselectricity to produce hydrogen via a water electrolysis hydrogen generator. In
addition, the plan works to optimize the series of related systems, from pressure boosting to pressure storage and filling. Fuel cell forklifts filled with
CO2-free hydrogen as fuel transport objects within the plant premises.

Hydrogen filling system at the Kawasaki-Mizue Business BaseTNSC Hydrogen for Racing Cars at the Fuji 24 Hours
The Gas Engineering Center and the Chubu Branch Office filled hydrogenengine cars with hydrogen gas at Fuji Speedway during the qualifying roundof the Fuji 24 Hours, the third round of the Super Taikyu (S-Tai) Series 2021.
The entry of a hydrogen-fueled racing car was a world first for Toyota Motor
Corporation, which is looking for ways to offer exciting motor sports even ina carbon-neutral society. We used a commercial mobile filling station for thegas pit. However, we discovered certain issues unique to racing, including theneed to fill and store gas as quickly as possible. We will continue to work
toward a decarbonized society through various hydrogen gas engineering
services, addressing issues as they arise.

Filling a hydrogen-fueled racing car

TNSC Training and Workshops Link SDGs Contributions to Business Opportunities
Many of our customers are engaging in measures to combat climate change.
For Nippon Sanso Holdings to meet the needs of these customers and propose the right Group applications, every sales representative must be awareof the significance of the SDGs and the role of the Group. To this end, Taiyo
Nippon Sanso Corporation holds sales training sessions and workshops tofurther an understanding of the SDGs and the link between our products
and services. We will continue to contribute to society by providing the bestsolutions for our customers as they respond to the SDGs.
Seminar on the SDGs and related business opportunities*1 For details about the reporting boundary and calculation method, please refer to page 189, “Calculation Methods for GHG Emission Reduction Contribution.”*2 We calculated CO2 reduction contribution based on the Guidelines for Quantifying GHG Emission Reductions of Goods or Services through Global Value Chain (Ministry of Economy, Tradeand Industry; March 2018) and other standards.
Indicators withmark have been assured by KPMG AZSA Sustainability Co., Ltd.

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Sustainability Topics:
The Earth

TNSC Recycling Project in Collaboration with Business Partners

NGE

Taiyo Nippon Sanso Corporation is a co-sponsor of the BLUE SEED PROJECT,
a project headed by business partner SEED Co., Ltd. Plastic waste has been
discovered widely throughout the world’s oceans, and the volume of plastic
waste continues to increase steadily, becoming an extremely serious problem
for the marine environment. In response, SEED launched a project to collectand recycle disposable contact lens blisters (empty cases). By supporting thisproject, we aim to contribute to environmental improvement and help
achieve sustainable societies.
Collecting disposable contact lens blisters

NGE

CO2 Recycling Equipment to Reduce CO2 in the AtmosphereNGE

New Initiative to Reduce Plastic Bottles and CO2 Emissions

Nippon Gases Euro-Holding S.L.U. (NGE) won a contract to supply the CO2 used to make the carbonated water supplied to public
water fountains. Under the agreement, NGE supplies carbonated water to more than 200 water fountains in and around thecity of Rome, Italy, including the gardens of the Quirinal Palace, the official residence of the President of the Republic of Italy.
The supply of carbonated water to these water fountains has reduced the use of plastic bottles by 1,800 tonnes. NGE has also
contributed to a reduction in CO2 emissions on the order of 5,000 tonnes.

NGE

Construction of First Full-Scale Liquefied Coal Import Terminal in Ireland to Reduce CO2 Emissions

The annual demand for CO2 in Ireland is 40,000 tonnes. To date, the country
has been heavily dependent on transport from the United Kingdom. NGEdeveloped plans to build a liquefied coal import terminal at Warrenpoint,
Ireland’s fifth largest port. Warrenpoint is located between Ireland’s twolargest cities, Belfast and Dublin, and the terminal is expected to reducetransportation costs.
The terminal became fully operational in January 2021 and has alreadycontributed significantly to improving the supply chain in the Irish market,
reducing Ireland’s carbon footprint by 560,000 km and CO2 emissions by
about 500 tonnes.

In Germany, the presence of paint, oil, and plastic residue on processed aluminum scrap is a constant issue faced by customers.
When these scraps are melted in an aluminum melting furnace, the impurities evaporate to form hydrocarbons, which exit the
furnace together with exhaust gases and cause air pollution. One solution to this problem is the use of oxygen gas to remove
environmentally harmful components from the exhaust gas of aluminum melting furnaces. The use of oxygen gas also conserves
the natural gas used in heating the melting furnace.
Together with customers, we have introduced laser technology that measures the concentration of hydrocarbons in a furnace
instantly, allowing for the control of oxygen burners to ensure complete combustion of hydrocarbons. The resulting energy
reduces the natural gas consumption of the process by up to 10%.
In addition, this technology allows customers to increase the ratio of contaminated scrap, or to use even dirtier scrap, for recycling. In this way, we offer an environmental benefit for all our customers.

Asia

Nippon Gases Iberia has agreed to partner in the construction and operation of a CO2 capture unit in Cartagena. The facility will
run on 100% renewable energy and is expected to be operational in spring 2022. The CO2 captured will play an important rolein the circular economy by avoiding wasteful emissions of this gas into the atmosphere.

Oxygen Usage Technology in Aluminum Scrap Processing Reduces CO2 Emissions

Commendation by the Shanghai Water Authority as a Water-Saving Company

Shanghai Taiyo Nippon Sanso Gas Co., Ltd. has been engaged in the efficientuse of industrial water. As part of these efforts, the company has upgradedwater meters, installed more water meters to better understand the status ofindustrial water use, and modified water pumps to save water. The Shanghai
Water Authority recognized the company for its outstanding work in theconservation and efficient use of industrial water, and Shanghai Taiyo Nippon
Sanso Gas will continue striving to save water and improve efficiency to
reduce the environmental impact of its businesses.
Certificate for water conservation received from the Shanghai
Water Authority

ISO 14001 Status
Nippon Sanso Holdings strives to secure ISO 14001 certifications, an international environmental management system standard,for companies throughout the Group. To date, certifications have been acquired by 13 gas businesses in Japan, one gas businessin the United States, 15 gas businesses in Europe, 12 gas businesses in Asia and Oceania, and two Thermos businesses.

Warrenpoint terminal

Gas Business in Japan

Gas Business in Europe

Gas Business in Asia and Oceania

Taiyo Nippon Sanso Corporation

Nippon Gases Belgium NV

Ayutthaya Industrial Gases Co., Ltd.

Shizuoka Sanso Inc.

Nippon Gases Denmark A/S

Leeden National Oxygen Pte. Ltd.

Japan Fine Products Co., Ltd.

Nippon Gases Deutschland GmbH

National Industrial Gases. Ltd.

Sogo Kariya Sanso Corporation

Nippon Gases España S.L.U.

Nippon Sanso (Thailand) Co., Ltd.

Taiyo Nippon Sanso Engineering

Nippon Gases France SAS

Nippon Sanso Ingasco Clark, Inc.

Taiyo Nippon Sanso Gas and Welding

Nippon Gases Industrial S.r.l.

Nippon Sanso Ingasco Philippines, Inc.

Taiyo Nippon Sanso Higashikanto

Nippon Gases Norge AS

Nippon Sanso Vietnam Joint Stock Company

Daiichikaimei Co., Ltd.

Nippon Gases Offshore Asia Pacific Pte Ltd

Shanghai Taiyo Nippon Sanso Gas Co., Ltd.

Nippon Ekitan Corporation

Nippon Gases Offshore Ltd

Nippon Sanso Taiwan, Inc.

Nissan Tanaka Corporation

Nippon Gases Operations S.r.l.

Dalian Taiyo Nippon Sanso Gas Co., Ltd.

Funtaigiken Co., Ltd

Nippon Gases Pharma S.r.l.

Matheson Specialty Gas (Xi’an) Co., Ltd.

Kyokuyo Semiconductors Co. Ltd

Nippon Gases Refrigerants S.r.l.

Yangzhou Taiyo Nippon Sanso

Taiyo Nippon Sanso Engineering Taiwan, Inc.

Nippon Gases Sverige AB

Semiconductor Gases Co., Ltd.

Nippon Gases UK Ltd
Gas Business in the United States

Thermos Business

Oximesa S.L.U.

Thermos K.K.

Matheson Tri-Gas, Inc.

Top Thermo Mfg. (Malaysia) Sdn. Bhd.

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Sustainability Topics

TNSC SF6 Gas Recovery Service Created Using Proprietary Technology

Society
The Nippon Sanso Holdings Group proposes solutions that combine gas and gas-related equipment,
working together with our customers and other stakeholders to develop and market a wide range of
products for sustainable societies. In this section, we highlight Group initiatives, focusing on products andservices that contribute solutions to the environment and society.
We will also discuss quality control and quality assurance activities that ensure our products are usedsafely and with confidence by our customers.

Products and Services That Contribute Solutions to Environmental and Social Issues
TNSC Operational Efficiencies through the New IGSS Gas Supply System
Taiyo Nippon Sanso Corporation has developed the Intelligent Gas Supplying
System (IGSS). IGSS is a new gas supply system that combines advanced
digital technologies such as robotic process automation (RPA), the Internet ofThings (IoT), and artificial intelligence (AI) to improve operational efficiency atsemiconductor plants and other facilities that use high-pressure gas. IGSS
integrates multiple systems, including Cdrive®, which manages containertransportation; LUMsystem®, which manages containers; Ceyes®, which is adaily inspection system; and TELEOS-i®, which is a gas monitoring system.
Operators use tablet devices to monitor information centrally. This system
automates the transportation of high-pressure gas containers and the inspection of related facilities based on aggregated information. In this way, IGSS
offers labor savings, energy conservation, and reduced operating risks.

Cdrive®, a robotic system for automated conveyance ofgas containers

Sulfur hexafluoride (SF6) gas is a type of GHG. It is one of the gases targeted
for global warming prevention and emission control, as its global warming
potential (GWP) is high at 23,900 the gas remains in the atmosphere over along period of time. GWP is the ratio of the effect of a GHG on global warming compared to carbon dioxide. Work sites using SF6 gas have reported issues
including a loss of purity after recovery, preventing reuse. To address this issue,
we provide a service that collects SF6 gas using Taiyo Nippon Sanso Higashikanto
Corporation's own proprietary technology. Through this service, work sites
can reuse or detoxify and recycle the gas on a consistent basis. The recovered
SF6 gas is decomposed in a treatment plant and converted back to calcium
fluoride (CaF2), with the resulting material used as a raw material for fluorine
products. In this way, we contribute to a recycling-oriented environment.

Providing a full range of equipment and services
related to SF6 recovery

TNSC Creation of a New-Energy Society through the Hydro Shuttle® Package-Type Hydrogen Refueling Station
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 (9 m ×
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 thecost of installation, while the simplification of components means the cost of
fabrication is only half that of conventional permanent stations. Because it canbe used as a mobile station, a single Hydro Shuttle® offers promise for multiple
applications, including on-site stations equipped with hydrogen 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 Nimohyss Hydrogen
Station Minami-Rokugo and Nimohyss Hydrogen Station Setagaya, operated
by Nippon Mobile Hydrogen Station Services, LLC (nicknamed “Nimohyss”).
Looking ahead, we will continue working to realize an energy-conscious society.

Hydro Shuttle® mobile hydrogen station

TNSC Oxygen Combustion Technology That Contributes to Energy Savings and Lower CO2 Emissions
Taiyo Nippon Sanso Corporation is developing oxygen combustion technology for use in a variety of applications. Compared to regular air combustion,oxygen-enriched combustion reduces the amount of exhaust gas and exhaustgas heat loss. At the same time, this type of combustion increases the formation of nitrogen oxide (NOx) as the flame temperature rises. Controlling NOx
formation is essential when using oxygen-enriched combustion in hightemperature furnaces or smelters. Innova-Jet®, offered by Taiyo Nippon Sanso
Corporation, reduces the generation of NOx significantly, while also lowering
fuel consumption by more than 50%.

TNSC Contribution to Reliable Supply and Energy Conservation through New High-Performance

PSA Nitrogen Gas Generators

Innova-Jet® swing produces a flame that heats a wide area
efficiently and uniformly using automated oscillation

The pressure swing adsorption (PSA) nitrogen gas generator is a device that
supplies nitrogen gas. The generator uses the properties of adsorbents and a
repeating cycle of pressurization and depressurization to adsorb oxygen fromthe air to generate nitrogen on a continual basis. The Taiyo Nippon Sanso
Nitrocube® RE-LT Series nitrogen generators use a new adsorbent that conducts separation efficiently, even at raw air press of less than 0.7 MPa. The
RZ Series of nitrogen generators is equipped with a new feature called Heat
Drive that provides reliable production gas even at high temperatures in thesurrounding area.
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Sustainability Topics:
Society

TNSC Solutions Provided through More Efficient Nitrogen Production Equipment

TNSC Bistranza® Food Technology Contributes Solution to Food Waste

We use nitrogen production equipment at the point of demand to produce
and supply nitrogen to customers who consume large volumes of nitrogen gas.
This equipment uses a non-fluorocarbon process that eliminates the use ofchlorofluorocarbon (CFC) refrigerators that had been necessary in the former
manufacturing process. The JN model is equipped with standard noisereduction measures, while the MG model is a highly efficient unit that
improves nitrogen yield by improving the process. This MG model also
reduces the power per unit required for gas production by approximately
20% compared to the previous equipment offered by Taiyo Nippon Sanso
Corporation. Furthermore, this large-volume model provides power savingsof nearly 30% compared to older models.
This nitrogen production equipment can also produce an appropriate
amount of oxygen gas for customers who are large users of nitrogen gas andwho also use oxygen gas. This feature eliminates the need to ship oxygen gas
by tanker truck, as had been necessary in the past, contributing to a morereliable supply and greater transportation efficiency.

The Group has a long track record in food technologies, starting in 1962 with
the introduction of technology for rapid freezing by a continuous freezer
unit. This technology has been refined over many years and commercialized
under the Bistranza® brand. In addition, the past few years have seen a rapid
uptake of modified atmosphere packaging (MAP) in major convenience
stores and supermarkets. By injecting gases used for food preservation, suchas nitrogen, into food packaging, food can be kept fresh for longer without
the use of chemical preservatives. Expiration dates can be extended significantly, reducing food waste due to expiration as well as energy used in waste
processing, ultimately reducing CO2 emission.
Nitrogen generator

TNSC Gas Exchange Equipment Helping to Reduce Food LossTNSC Sun Cutter® Fuel for Gas Cutting Reduces Environmental Impact and Improves Work Efficiency
Gas cutting is a method used widely for cutting steel using flammable gas
and oxygen. Taiyo Nippon Sanso Corporation has developed and markets the
Sun Cutter® HL-1, which uses hydrogen as the main combustible gas. The
product is defined by its low environmental impact, emitting almost zerocarbon dioxide, and low radiant heat, making for a more comfortable operating environment. In addition to environmental performance, Sun Cutter®
HL-1 offers superior cutting performance at 1.4-times the speed of conventional products, reduced heat distortion, and improved cutting surface quality.

NGE

TNSC VPSA Biogas Purifier

NIPPON SANSO HOLDINGS CORPORATION156

MAP has seen rapid uptake in the food industry. By injecting gases such as
nitrogen into food packaging, food can be kept fresh for longer without theuse of chemical preservatives. Expiration dates can be extended by 1.5 to 3
times, reducing food waste due to expiration as well as energy used in waste
processing, ultimately reducing CO2 emissions.

MAP technology Bistranza® MAP enables food to be kept freshfor longer

Sun Cutter® HL-1 in use

Vacuum pressure swing adsorption (VPSA) biogas purifiers use vacuum
regenerative PSA technology to recover methane gas and carbon dioxidefrom biogas. These purifiers can produce methane gas at over 90% purity
and carbon dioxide concentrations of more than 99%. VPSA biogas purifiers
are used as a source of biogas for sewage treatment and other small- andmedium-sized distributed treatment facilities.
The highly pure methane gas separated and refined from biogas is used
as an alternative fuel to city gas in power generation equipment and boilers.
This use as alternate fuel contributes to global environmental conservation
as a carbon-neutral, locally produced/locally consumed energy source.
At the same time, the purified carbon dioxide generated by VPSA biogas
purifiers can be used as a raw material for liquefied carbon dioxide gas, used
for algae and agricultural applications (CCU), or used for carbon dioxide
storage (CCS).

Liquid nitrogen tunnel freezer Bistranza-FZT

Supply of High-Purity Oxygen for Salmon Farming in Norway

Increasing the oxygen concentration in fish ponds promotes the growthand vitality of farmed fish. In addition, injecting nitrogen gas during package
sealing is an effective means to maintain freshness during food processing.
NGE has installed two ASUs to meet demand for industrial gases in Norway,
which has a flourishing fisheries industry. As global demand for fish increases,
Norway expects to grow its farmed salmon production by an average of
6% annually.

Norwegian marine aquaculture facility

VPSA biogas purifier

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Sustainability Topics:
Society

Thermos Contributions to Energy Conservation with World-

Improvements in Product and Service Reliability

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

NSHD Quality Management System

Shuttle Chef®

The main products of the Group are oxygen, nitrogen, argon, the air separation unit to produce these gases, and facilities tostore and supply them. In addition, we provide semiconductor-related equipment and construction work, medical gases andequipment, helium gas, and hydrogen gas. Group companies involved in these businesses have acquired ISO 9001 certification,
which is the international standard for quality management systems.
At the same time, we strive to raise customer satisfaction and make continual improvements through the effective operationof these systems. Taiyo Nippon Sanso Corporation acquired ISO 9001 certification for its sales and logistics departments related
to liquid oxygen, liquid nitrogen, liquid argon, and specialty gases. The company leverages this certification not only in productquality but also in establishing systems and support for the reliable supply of these products. In addition, the Taiyo Nippon Sanso
Group has established an internal system we call the accreditation system for analysis ability of industrial gas manufacturing
plants. We apply this system to production plants that analyze and ship industrial gases, including oxygen, nitrogen, argon,hydrogen and helium. The purpose of this system is to maintain and improve the accuracy of analyses by certifying facilities
possessing a certain level of analysis and control technology.
As of March 2021, 108 Nippon Sanso Holdings Group companies have acquired ISO 9001 certification. We will continue to
strive for the effective operation of our quality management systems, aiming to raise customer satisfaction and accomplish
continual improvements.

NSHD Product Safety
Sports-use vacuum-insulated beverage bottles

Asia and Oceania Products and Services That Contribute to the Environment for Asia and Oceania
In Asia and Oceania, where significant economic growth is expected, we are developing products and services that contribute to
the environment. This effort targets various industry sectors, including welding and insulated windows. In addition to contributing
to the environment, we are also expanding our products and services that contribute to social issues such as food loss andhealthcare front lines.
Application

Major Countries and Regions

Blast furnace (Oxygen)

Singapore

In accordance with the Product Safety and Quality Policy to reduce risk throughout the product life cycle and to provide safe andreliable products, the Nippon Sanso Holdings Group established a product safety management system to ensure that customers
use its products with peace of mind.
The Taiyo Nippon Sanso Group examines its many products from the early design stages to reduce risks and ensure safety
throughout the product life cycle, from manufacture to transport, repair, and disposal. Product safety reviews are conducted,
and qualified in-house personnel evaluate product safety, after which a representative of each unit, center or affiliatedcompany issues a Declaration of Conformity for Product Safety. This is the process by which we ensure product safety.

Electric furnace (Oxygen)
Thailand, Philippines, Vietnam, and China
Products andservices that
Welding (Argon and helium)
Singapore, Thailand, China, Vietnam, Philippines, and Australia
contribute to
the environment
Filling inside multilayered glass windows (Krypton) Philippines

Products andservices that
contribute tosociety

Combustion exclusion devices

TaiwanFood freezing and preservation (Nitrogen)

Thailand, Australia, Philippines, Myanmar, and Malaysia

Aquaculture (Oxygen)

Philippines, Thailand, Vietnam, and Myanmar

MRI equipment (Helium)

India, China, and Singapore

Medical (Oxygen)

India, Myanmar, Australia, Philippines, Thailand, and Singapore

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TNSC Water-18O PET Diagnostic Reagent Material

Contributions to Medical CareTNSC Contribution to HOT
patients for a variety of reasons, including the weight of portable cylinders and the attention they attract. In response toconcerns such as these, we upended conventional ideas ofoxygen cylinders with an ultra-compact portable model thatcan 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 and difficult to use, and that patients wanted them tolast longer. In response, we integrated the cylinder valve witha 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 timeand reduced the weight of the unit by combining it with alightweight conserver. With an increasing number of patients
now able to choose home healthcare, we will also continue
to promote the development of easy-to-use devices that canbe used free of worry and to enhance our supply
configuration.

Japan’s coming super-aged society is driving demand for abetter system of home healthcare. As such, we are taking
steps to enhance our home healthcare services, which centeron home oxygen therapy (HOT). HOT is a medical treatment
involving the provision of high-concentration oxygen using
oxygen concentrators, cylinders, and other devices in nonhospital settings used primarily in the management of chronic
obstructive pulmonary disease (COPD), a cause of chronic
respiratory insufficiency, HOT is also used in the treatment ofa 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 underJapan’s national health insurance (NHI) program in 1985, withan estimated 160,000 patients currently receiving this therapy. In addition to enabling patients to better balance thedemands of everyday life with treatment, there is also strong
evidence of additional medical benefits, including prolonged
survival, improved mobility, and a reduction in the frequencyof hospitalization. In addition to systems for use when
patients are at home or out, there is a need for systems thatcan 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 or family members,
HOT systems must be easy to use to ensure safety and peaceof mind.
We promote product development with the aim ofaddressing diverse needs, with an emphasis on userfriendliness. For example, when HOT patients leave thehouse, they can transport oxygen cylinders easily using a
dedicated cart, but this is shunned by more than a few* As of summer 2021, oxygen concentrators are being used in the home and at oxygen
stations by patients experiencing respiratory distress in regions where in-home treatment
is rising due to the increase in COVID-19 infections.

Ultra-compact portable oxygen cylinder

The Company produces Water-18O, a raw material for positron emission
tomography (PET) diagnostic reagents, based on the air separation technology we have cultivated to date. PET diagnosis is widely used as a method forthe early detection and diagnosis of cancer. Water-18O, or water labeled with
18
O, which is an oxygen isotope, is indispensable as a raw material for PET
diagnosis. We manufacture Water-18O at three plants in Japan and boast theworld’s largest production capacity of 600 kg per year. The SI Innovation
Center manufactures the final product under a GMP-compliance quality
control system, providing a stable supply of high-quality Water-18O to morethan 40 countries. Incidentally, Water-17O, which we produce at the No. 3
plant in Shunan, Yamaguchi Prefecture, is expected to be used as a magnetic
resonance imaging (MRI) contrast medium in the diagnosis of a variety ofbrain diseases.

Stable isotope Water-18O

TNSC Contribution to Bioresearch Development
Since induced pluripotent stem (iPS) cells were invented in 2008, we haveseen a continued acceleration of R&D in the field of regenerative medicine
using human cells. The practical implementation of regenerative medicine
requires technology for the reliable management of high-quality cultured
cells and the cryopreservation of large quantities of living cells, vaccines, andblood. Taiyo Nippon Sanso Corporation, Japan’s sole manufacturer of liquid
nitrogen cryopreservation vessels, develops technologies in areas that include
regenerative therapy and biomedicine, delivering a lineup of diverse products.
Taiyo Nippon Sanso Corporation has achieved a roughly 50% share of
the market (cumulative sales basis) for cryopreservation vessels used in the
cryopreservation of biological samples with liquid nitrogen. Leveraging its
strengths as Japan’s sole manufacturer of this product, the company has
developed a fully automatic cryopreservation system called CryoLibrary®
ADVANCE, meeting a wide range of cryopreservation needs.

Liquid nitrogen cryopreservation system

Oxygen concentrator (Oxywell 5A)

CryoLibrary® ADVANCETNSC OXYMED 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 ease of use. Our
wide-ranging product lineup and detailed service system enables us to provide a high-quality gas supply system.

NGE* Incidents that may not lead to serious disasters or accidents but are one step short of becoming a direct cause ofserious disasters or accidents

High-pressure gas manifold

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Care Center in Spain for Patients Using Home Respiratory Equipment

Oximesa S.L.U. is a subsidiary of NGE that provides home healthcare andother medical services. The company operates two care centers for homehealthcare patients in Spain. The care centers allow patients to register forhome respiratory therapy services. Patients may request to have their medical
equipment checked on a regular basis and receive technical support if any
issues arise. Once the COVID-19 pandemic subsides, patients will be able toattend in-person trainings to help improve their quality of life. The program
has received high praise from all users, who appreciate direct access to home
respiratory therapy professionals.

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Care center in Coruña

INTEGRATED REPORT 2021

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Sustainability Topics:
Society

TNSC Overview of Research Labs and Research Topics

Intellectual Property Activities and R&D
NSHD Strategic Acquisition and Retention of Intellectual Property
We are engaged in applied research across a variety offields, including research in advanced fields, building on the
proprietary technologies we have developed over the morethan 110 years since our founding. We will continue ourefforts to strengthen intellectual property, supporting our
growth as a global group.

Nippon Sanso Holdings recognizes that intellectual property is
an important corporate asset. We strive to acquire and retain
intellectual property in a strategic manner, aiming to secure acompetitive advantage in business that contributes to earnings and global growth. In accordance with the principles oflegal compliance, we respect the valid intellectual property
rights of third parties, exercising care to avoid infringement.
We also take appropriate action against any infringement of
our intellectual property rights by third parties.

Taiyo Nippon Sanso Corporation pursues the potential of gases, conducting R&D to create new demand for gases. Each laboratory continues to take on new challenges in technology development, based on a wealth of expertise and experience, to offer
new solutions that answer the needs of our customers. The Yamanashi Laboratory and Tsukuba Laboratory serve as global R&D
hubs, engaging in new R&D related to our foundational industrial gases business, the Electronics Business, On-Site Plant Business,
and Medical Business. Furthermore, these facilities are taking on the challenge to develop technologies for new materials, additive manufacturing, composite semiconductor manufacturing equipment, and other new businesses. The SI Innovation Center isa facility dedicated to the R&D of stable isotopes.

NSHD Intellectual Property Management System
Nippon Sanso Holdings aims to strengthen the Group’s comprehensive capabilities and achieve sustainable growth on a global
scale. In this pursuit, we encourage collaboration among operating companies to ensure the appropriate acquisition, management, and utilization of intellectual property throughout the Group. The Global Strategy Review Committee, chaired by the
President CEO, meets on an annual basis to determine important policies for managing technical risks, including risks related tosecurity, product quality and safety, the environment, and intellectual property. Each operating company formulates and implements plans for the fiscal year based on these policies.
NSHD Patents in Japan and Overseas

Ratio of NSHD Patents by Business in Japanand Overseas

Patents
1,800
1,500
1,200
900

1,147

1,255

1,029

1,094

328

356

373

453

738

774

802

600
300
0

Japan

1%

1,560

701

12%

635

32%
10%

925

19%
2017

Overseas

2018

2019

2020

2021 (Years ended
March 31)

Number of
Patents Overseas

Number of
Patents in Japan

925

10%

26%

34%

635
10%

Industrial gases
Electronics-related products
MedicalThermos
Others162

INTEGRATED REPORT 2021

Tsukuba Laboratory

SI Innovation Center

TNSC AM Technology Research
AM is an additive manufacturing technology based on 3D printing,considered to be one of the core areas of the Fourth Industrial Revolution.
This technology is attracting attention on a global scale, as it is expected tocontribute to a sustainable society by bringing innovation to supply chains.
Taiyo Nippon Sanso Corporation identified metal AM as a priority area, opening the AM Advanced Room within its Yamanashi Laboratory as a center forthe development of AM-related technologies and businesses. The facility
focuses on the development of AM molding technology in general, and isequipped with a wide range of the latest in 3D printer equipment, including
the VELO3D Sapphire, as well as the company’s own proprietary 3DPro®
metal AM solution.

AM Advanced Room

18%

MTG

* Figures for 2017 through 2019 are as of December 31. Figures for 2020 and
2021 are as of March 31. Figures through 2020 represent Taiyo Nippon Sanso
Corporation patents only. The figure for 2021 represents the total for all NSHDGroup operating companies combined.

NIPPON SANSO HOLDINGS CORPORATION

28%

Yamanashi Laboratory

Plant and engineering

Advanced Technology Center R&D

MTG is expanding its footprint in the field of electronics, conducting R&D
activities in its Advanced Technology Center located in Longmont, Colorado.
In particular, the semiconductor market looks promising over the long term.
In response, the company is developing semiconductor manufacturing tool
supply equipment, as well as technologies for the manufacture, refinement,
analysis, and equipment manufacturing technologies related to highly refinedgases.
The results of these development activities have contributed to businessthrough new products and by improving the quality of existing products at
production plants in the United States and South Korea. Advanced
Technology Center staff exchange ideas and build relationships with personnel from the Tsukuba Laboratory of Taiyo Nippon Sanso Corporation.

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Advanced Technology Center

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Sustainability Topics

People (The Company and Its Organizational Structure)
Human resources are indispensable for the sustainable growth of a company. The Nippon Sanso HoldingsGroup operates the industrial gases business and the Thermos business, divided into four geographic hubs.
Non-Japanese employees account for nearly 70% of our workforce on a consolidated basis, and the Group
continues to become increasingly multinational. Remaining sensitive to the values and cultures of eachregion, we have established a system for fostering human resources to achieve our Group Vision as one.
We intend to continue to interact closely with our employees and our stakeholders, including our supply
chains, customers, shareholders, and investors, earning their trust and striving together for a better society.

NSHD Basic Concepts behind Human Resources Development
We selected “The Gas Professionals” as the tagline representing the philosophy of the Nippon Sanso Holdings Group. In developing“The Gas Professionals” who have a sense of mission to society and the earth, we emphasize the key personal qualities of health,integrity, and resourcefulness. These values have been handed down from generation to generation since the days of our predecessor, the former Taiyo Nippon Sanso Corporation. Health, integrity, and resourcefulness are qualities held in common among all
Group companies, including the globally active Thermos. We will strive to communicate these concepts within each operatingcompany based on the essence of health, integrity, and resourcefulness, tailored to reflect the unique values of each company.
In fulfilling our social responsibilities as a group, we believe that “sincerity” is a particularly important element of the concept of“integrity” included among these three qualities. We believe that securing, cultivating, and engaging with human resources in ourGroup who, based on a foundation of sincerity, are open to diversity and regional differences in values, customs, cultures, gender
identity, races, and other qualities and perspectives, is vital toward creating a comfortable future for humankind, society, and the earth.
Nippon Sanso Holdings’ Philosophy and Vision“The Gas Professionals”
Increasing engagement by sharing and understanding the Philosophy and Vision

Taiyo Nippon Sanso
Corporation Group

Matheson Tri-Gas, Inc.
Group

Nippon Gases EuroHolding S.L.U. GroupOperating company
groups in
Asia and Oceania

Thermos K.K. Group

Human resource exchanges and promotion of best practices

Integrity

Understands the Importance of Occupational
Health and Safety: Looks after their own healthand helps create positive working environments

Earns Customer Trust: Exhibits a dedication
to reliable supply and quality assurance andresponds with sincerity

Displays a Positive Attitude: Has a positive
attitude and see things throughExhibits a Well-Formed Character: Maintains
an agreeable temperament and promotes mutual
trust and respect

Demonstrates Organizational Capabilities:
Uses communication to overcome limited personnel levels and maximize teamwork

Endeavors to Fulfill Responsibility to Society:
Works to comply with safety, security, and environmental standards, as well as with social norms

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Resourcefulness
Knows the Customer: Responds to customers’
expectations and interests
Knows Himself/Herself: Works to realize personalgoals and acquire knowledge and skills crucial to aprofessional and strives to act independently
Knows Society: Strives to be open, grasp changes,
and looks to the future

INTEGRATED REPORT 2021

In conjunction with the adoption of a holding company structure in October 2020, Nippon Sanso Holdings reviewed existing
policies and standards of conduct from a global perspective. As a result, we established several policies and standards in February
2021. Within these policies and standards, we reaffirmed the importance of human rights in conducting corporate activities andour support of the spirit behind internationally accepted norms, such as the Universal Declaration of Human Rights. We reconfirmed that we respect human rights and strive to create appropriate work environments. Through these affirmations and others,
we will fulfill our social responsibilities as a corporate citizen (see page 176).

TNSC Stronger Anti-Harassment Measures

２０１７年１月２７日
各位

職場におけるハラスメント防止・根絶に関する基本方針

The Power Harassment Prevention Act (Revised Act on Comprehensive
Promotion of Labor Policies) came into effect in June 2020. This revised act
strengthened measures to prevent harassment in the workplace. In January 2017,
Taiyo Nippon Sanso Corporation established the Policy on the Prevention and
Eradication of Harassment in the Workplace to create healthy workplaces
that encourage respect for personal character and individuality. Under thispolicy, we take strict disciplinary action against any acts of harassment, andwe strive to create comfortable, harassment-free workplaces that foster
mutual respect. Ongoing training is another important part of strengthening
anti-harassment within the Group.

代表取締役社長 兼 ＣＥＯ

市原裕史郎

１．職場におけるハラスメント
職場におけるハラスメントは、労働者の個人としての尊厳を不当に傷つける社会的に許されない行為であるとともに、労働者の能力の有効な発揮を妨げ、また、会社にとっても職場秩序や業務の遂行を阻害し、社会的評価に悪影響をおよぼす問題です。
相手方の望まない性的言動により、労働条件に不利益を与えること、または就業環境を害する行為（セクシャルハラスメント）、職場における職権等の立場または職場内の優位性を背景にして本来の業務の範囲を超えて個々の社員の人格や尊厳を侵害する言動を行うこと（パワーハラスメント）、また、妊娠・出産・育児休業等に関する否定的な言動により当該労働者の就業環境が害される行為（マタハラ、パタハラ）などがハラスメントに該当します。なお、セクシャルハラ
スメントには同性に対するものも含まれ、被害を受けた者の性的指向又は性自認にかかわらず当該者に対する差別的な言動であれば、本方針の対象となります。
当社としては、これらのハラスメントにあたる言動を固く禁止するとともに、ハラスメント行
為に関しては厳正な処分を行ないます。相手の立場に立って、普段の言動を振り返り、ハラスメ
ントのない、快適な職場を作っていきましょう。
２．ハラスメント行為の禁止「就業規則第８条（ハラスメントの禁止）」にある行為とは次の通りです。
＜セクシュアルハラスメント＞① 性的な冗談、からかい、質問② わいせつ図画の閲覧、配付、掲示③ その他、他人に不快感を与える性的な言動④ 性的な噂の流布⑤ 身体への不必要な接触⑥ 性的な言動により社員等の就業意欲を低下させ、能力発揮を阻害する行為⑦ 交際、性的な関係の強要⑧ 性的な言動に対して拒否等を行った部下等従業員に対する不利益取扱いなど⑨ ＬＧＢＴなど性的指向や性自認に対する差別的な言動※ＬＧＢＴ（レズビアン、ゲイ、バイセクシャル、トランスジェンダーの略称）＜パワーハラスメント＞
本来業務の適正な指導の範囲を超えて、以下の行為が断続的に行われている場合① 目に見える暴力や身体的な苦痛を与える等の身体的侵害② 脅迫や名誉毀損、侮辱、酷い暴言、多数の面前での叱責等の精神的侵害③ 無視、隔離、仲間はずれ、仕事を与えない等の人間関係からの切り離し④ 能力と比して、明らかに達成不可能なノルマを与え続ける等の過大な要求⑤ 能力と比して、明らかに程度の低い単調な作業を与え続ける等の過小な要求⑥ プライベートな内容に過剰に踏み入る等の個の侵害＜妊娠・出産・育児休業・介護休業等に関するハラスメント＞① 部下又は同僚が妊娠・出産、育児･介護に関する制度や措置を利用することを阻害する言動② 部下又は同僚が妊娠・出産、育児･介護に関する制度や措置を利用したことによる嫌がらせ等③ 部下又は同僚が妊娠・出産等したことによる嫌がらせ等④ 部下が妊娠・出産、育児･介護に関する制度や措置を利用することに関し、解雇その他不利益な取扱いを示唆する行為⑤ 部下が妊娠・出産等したことにより、解雇その他の不利益な取扱いを示唆する行為
３．対象者
この方針の対象は、役員、執行役員、社員、派遣社員、パート・アルバイト等当社において働いているすべての労働者です。

Dissemination Policy (Excerpt)

NSHD Safety Meetings
The Nippon Sanso Holdings Group holds regular safety meetings. The meetings are attended by safety and operations managers from each of the fourglobal geographic hubs to provide information and exchange opinions on
ways to improve the level of safety across the Group. The meeting includes
hazard simulation training at the Technical Academy (see page 146), Job
Safety Analysis (JSA) workshops, and case studies related to accidents andgood practices from each company. We will continue to hold this meeting
once a year, depending on the situation with COVID-19, to promote safety
throughout the Group.

4th Annual Safety Meeting attended by safety and operations
staff from around the world.

TNSC Training by Experience Level (First Year to Fifth) Basic Education

Basic values of health, integrity, and resourcefulness
HealthNSHD Respect for Human Rights

Taiyo Nippon Sanso Corporation provides a unique training system thatcovers basic training for employees throughout their first five years of
employment. New employees begin with a three-month training program,and then experience annual training in each of their first five years in thecompany. The purpose of this training is to provide employees with a deep
understanding of the characteristics of the industrial gases business as well as
the awareness and sense of mission for maintaining gas supplies at all costs.
Training includes the basics in non-technical aspects across the organization,
regardless of whether the employee is assigned an administrative or technicalposition. Through five years of basic training, employees become aware of
their role as “The Gas Professionals” and contribute actively to various fields.

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Training Overview• First Year Training for new recruits: In a three-month grouptraining program, employees tour research laboratories andproduction facilities to learn about the front lines of our business.
• Second Year Followership training: Employees learn the skillof expressing information clearly as a follower and develop
communication skills.
• Third Year Training in logical thinking: Employees acquire
logical thinking and presentation skills.
• Fourth Year Finance training: Employees learn how to readessential financial figures for business, acquire basic financial
knowledge, and gain an understanding of the correlation
between their work and figures.
• Fifth Year Strategy and marketing training: At the culmination of five years, employees form teams to propose and present
management strategies.

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Sustainability Topics:
People (The Company and Its Organizational Structure)

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

NGE

One-Year Training Program for New Employees in Norway

In November 2020, Nippon Gases Norge AS (Norway) began the Young Professional online training program for employees aged
35 or younger (approximately 18% of the workforce). The purpose of the program is to share knowledge and information about
the business as well as to create a forum for newer employees to interact with each other. The program will continue over the
next few months, with four sessions scheduled per year. The sessions are structured based on employee input.

NGE

Global employee selective training

Digital Skills Improvement Project

The IT and human resources departments in NGE came together to form the Collaborative Digital Champions (CDC) Team. This
team serves as a location to teach how commonly used digital tools may be utilized more effectively. Participants come from allover Europe, returning home to their colleagues and sharing this new knowledge. Former participants have reported back thatthey are making the most of what they learned from the CDC Team.

TNSC Overseas Trainee Program
Launched in 2016, the overseas trainee education program aims to develop
human resources who can contribute quickly after arriving at their assignments overseas. This program consists of a year of on-the-job training at an
overseas Nippon Sanso Holdings Group company, offered mainly to employees between their fifth and tenth year of service. The program is voluntary,
and any employee wishing to participate is provided a chance to work overseas. This environment of encouraging and supporting employees who seek
new experiences is a unique feature of Taiyo Nippon Sanso Corporation.

NGE

Events to Consider Employee Diversity

NGE held a special diversity week, conducting a number of events and meetings to consider employee diversity. The goal of this week was to raise awareness for a culture of diversity that appreciates the talents of employees
regardless of sexual orientation, age, gender identity, or other attribute.
Week events focused on LGBTI, generational, and gender diversity issues.

Overseas Trainee Program
Diversity Week logo

TNSC Establishment of a Helpline
Taiyo Nippon Sanso Corporation established a helpline for the early detection and correction of compliance violations. The company
investigates each report, considerate of privacy protection issues. Corrective actions and recommendations are made, leading to
improvements and measures to prevent recurrence of the issue in question. The specific operation of the helpline is provided in
the helpline guidelines, and we ensure that whistleblowers are not subject to unfair treatment as a consequence of their report.

TNSC Employment of People with Disabilities
Taiyo Nippon Sanso Corporation strives to provide recruitment information to as many people with disabilities as possible. After
joining the company, employees with disabilities make contributions across a wide range of positions, including general affairs,
administration, accounting, sales, logistics, technical management, production management, R&D, and engineering. As of June
1, 2021, employees with disabilities accounted for 2.47% of all company employees, exceeding the legally mandated employment rate of 2.30%. We will continue to foster a corporate culture in which employees understand and respect each other,aiming to create workplaces in which every employee works with vitality and enthusiasm.

NGE

NGE

Employee Engagement Survey Reveals 86% “Highly Engaged”

NGE conducted an employee engagement survey in May 2020, which revealed that 86% of respondents (81% response rate)
are “highly engaged” with their work. This result is higher than the average for the chemicals industry and qualifies NGE as ahigh-performance company. Comments from long-term employees indicate appreciation for support from colleagues and being
treated as “a member of the family” since early in their careers.
(Chairman and President Elejoste also mentions the survey. Please refer to page 101.)
Employee Engagement Survey* Score represents the percentage of employees
who rated each category as “favorable” or“very favorable.”Management Development Training

NGE completed its management development training program in June 2021, which was first launched in February 2020.
Despite a temporary delay due to the spread of COVID-19, NGE completed the program by converting the course to online training. Participants worked on a variety of projects, and those deemed as having the most impact are scheduled to be presented to
NGE management.

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Sustainability Topics:
People (The Company and Its Organizational Structure)

NSHS Leadership Development Program for the Next Generation of Leaders and Key Managers

NSHS KOPI Quarterly Webinars

Nippon Sanso Holdings Singapore Pte. Ltd. (NSHS) will roll out two leadershipdevelopment programs beginning in FYE2022 to encourage the developmentof leadership among the next generation of leaders and key managers. The
Nippon Sanso ASEAN+ Leaders Sandbox VR© is a two-year leadership development program that runs from April 2021 to December 2022. Under thecatchphrase, Manage Yourself, Lead Others, the program covers global
trends through content encompassing business strategy, engineering, safety,
compliance, and human resources. Participants also have the opportunity totake part in a leadership development program known as the C-Suite-LEDTalk series. In this series, participants will learn about business strategy, business process strategy, and human resources strategy.

NSHS began holding Keep Our People Interactive (KOPI) webinars in August
2018 as a means to update employees about human resources policychanges due to government labor laws and legislation. The KOPI webinar
serves as a two-way communication channel for employees to provide feedback on human resources policies, human resources processes, and related
matters.

ASEAN+ NGNLEADERS' SANDBOX VR ©
4 AUG 2021
Leadership Development ProgrammeProfessional Knowledge & Skills . Work & Quality Standards

5th HR Cares KOPI Seminar
20 Sep 2019

❑ Unity in Diversity”
workplace practices

NSHS Annual Unity in Diversity Campaign

April 2021 webinar

In August 2018, NSHS held its first Unity in Diversity campaign across theregion. The campaign has become a foundation for employee engagement
strategy in the region. In 2019, NSHS worked with its subsidiaries in Asia to
produce a video under the concept, Unity in Diversity Starts with Us. To transition Unity in Diversity to a more collaborative activity, NSHS developed
the Intercultural Awareness program series in 2020, releasing content via
monthly webinars.

NSHS established the ASEAN+ HR* Community of Practice to share achievements and best practices from the past year to raise the skill level of the community of human resource professionals in the Asian region. NSHS designed
and developed three competency models that will be used as a guide inbuilding employee competencies. This unique platform allows community
members to comment on and “like” posts from other members. In this way,
NSHS encourages constructive feedback and suggestions related to humanresources.

Vietnam| Cross Cultural Awareness - Vietnam || People & Business Priorities Post Crisis Toolkit- Talent Development || Understanding Process Safety Competency Model |Monthly webinar

MTG* Human resources training

Collage of participants in the ASEAN+ HR Network
Meeting 2021

24/7 Telemedicine Services

MTG adopted Horizon CareOnline, a medical service accessible from the comfort of one’s home to avoid the risk of COVID-19
infection arising from outside travel or crowded waiting rooms. Employees can consult doctors 24/7 regarding various ailments,
including abdominal pain, fever, colds, and flu, as well as issues related to ear, nose, and throat conditions or dermatology.
Registration is available through the app or website, and qualified doctors are on call via video, phone, or chat. Urgent care services are provided by U.S. board-certified and licensed physicians with an average of 15 years of experience in primary care or
urgent care. Patients can read physician profiles and reviews before deciding on a healthcare provider.

NSHS Annual ASEAN Learning Festival
NSHS sponsors the annual ASEAN Learning Festival to encourage employees
to take part in lifelong learning. The company invites outside speakers toaddress participants visiting from across Asia. Throughout the festival,
participants are encouraged to develop themselves to remain competitiveand relevant.
Taiyo Nippon Sanso
2nd Annual Learning Festival 2020
Be Future-Ready, Be Future You!

Participants in the 2nd Annual Learning Festival 2020168

❑ Managing Workplace
Harassment

KOPI webinar held in 2019

NSHS Establishment of a Human Resources Platform in Asia

NIPPON SANSO HOLDINGS CORPORATION❑ Older Workers:
Retirement and Reemployment

INTEGRATED REPORT 2021

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Sustainability Topics:
People (The Company and Its Organizational Structure)

MTG

Scholarship Program for Children of Employees

TNSC Wearable Devices for Greater Health Visibility

MTG has established a scholarship program to assist the children of employees who plan to attend a university or technicalschool. The company offers annual scholarships for students to study at their selected institute of higher learning. The scholarship program is administered by Scholarship America®, the largest presenter and administrator of scholarships in the UnitedStates, and supports tuition and other educational assistance through programs designed for corporations, foundations, associations, and individuals. Scholarships are awarded without regard to race, color, creed, religion, sexual orientation, age, gender
identity, disability, or national origin.

In FYE2018, Taiyo Nippon Sanso Corporation began distributing wearable
wristband devices to provide employees with greater visibility for individual
health-related data. These devices provide information related to step count,
heart rate, sleep time, calories burned, and more, motivating employees tobecome more health conscious through an understanding of their day-to-day
health status. As of March 31, 2021, approximately 1,600 employees wear
these devices on a regular basis. In July 2018, the company introduced a points
system for walking, allowing users to convert their daily step count into points
redeemable for various services, or to donate the points to the Japanese Red
Cross Society or other charitable organization. In this way and others, we willcontinue to make health management more enjoyable for our employees.

TNSC Online Mental Healthcare Training
Taiyo Nippon Sanso Corporation has introduced an employee assistance program (EAP) conducted by external specialists who provide outside counseling.
At the same time, the company endeavors to improve employee mental
healthcare, offering internal programs to support employees returning to work.
Thermos Standardized Quality Inspection Training in Japan and Overseas
Thermos K.K. conducts rigorous quality inspections to ensure that customers use
the company’s products with confidence. One example is the 40-centimeter
drop standard under Japanese Industrial Standards (JIS) for testing Thermos
bottle durability. In contrast, Thermos conducts drop tests from a height of
70 centimeters, considering the height of tables and other objects in thehome. Thermos provides training to quality inspectors based on internal
standards. Training includes videos (available via PC and other means) ofinspection procedures and methods to help inspectors improve their skills.
By standardizing training in Japan and overseas, Thermos maintains its ability
to deliver high-quality products consistently to the world.

Distributed wearable devices

Number of Employees Participating in
Mental Healthcare Training
MiddleManagers

SeniorManagers

FYE201525

38

FYE2016

37

38

FYE201732

24

FYE201832

28

FYE201935

29

FYE20203732

FYE202132

31

TNSC Designated as a 2021 Health & Productivity Management Outstanding Organization(Large Enterprise Category) (“White 500”)
Standardized quality inspection training in Japan and overseas

TNSC Pursuit of Health Management and Work-Style Reform
Taiyo Nippon Sanso Corporation believes that a focus on employee work styles and health is part of its management strategy forenhancing individual skills, improving productivity, and increasing corporate value. Therefore, we encourage health management
for better mental and physical health, aiming to become a corporate group in which every employee works with vitality. We willcontinue to pursue health-related initiatives to maximize the contributions of our employees, whom we believe are one of themost important assets of a corporation. In conjunction with our efforts, we formulated the Health Management Declaration toserve as a health management code of conduct.

Taiyo Nippon Sanso Corporation was certified as “White 500” (Large Enterprise Category) underthe 2021 Certified Health & Productivity Management Outstanding Organizations Recognition
Program administered by the Ministry of Economy, Trade and Industry (METI) and Nippon Kenko
Kaigi. We were recognized for our initiatives based on three areas of health: Self, Workplace, andFamily/Community. Specific reasons for our selection included our distribution of wearable devices
for step counting and sleep monitoring, sessions for employees to measure their physical condition
at work, and on-demand health seminars available to employees and their family members.

White 500 certificate

Health Management Declaration
Becoming a Company in which Employees Work with Vigor and Vitality
Health is one of the qualities and conduct under the key employee qualities and conduct of health, integrity, and resourcefulness. We have declared our commitment to foster a health-first culture in recognition that employee health is the driving force behind all we do, and through this culture, we encourage soundmanagement and contribution to the creation of a prosperous society.
We also recognize that the mental and physical health of every employee is an asset to the company. Therefore, we strive to create safe and comfortableworkplaces.
We want our employees to understand that their own health and the health of their families are the driving force behind their work and home life. Employees
are asked to take responsibility for maintaining and improving their own health as well as to participate in fostering a health-first corporate culture.

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Sustainability Topics:
People (The Company and Its Organizational Structure)

TNSC Work-Style Reforms Designed to Create Positive Work Environments for All Employees

TNSC Occupational Health and Safety

coming back to Japan with a spouse who had been on an
overseas assignment. Other programs include reemployment
rules for employees who resigned due to pregnancy, childcare, or nursing care. In FYE2019, the company began recognizing annual paid leave in one-hour increments, and in
October 2019, certain company locations adopted a flextime
work system. In this way, Taiyo Nippon Sanso strives to achieve
work-style reform through flexible work arrangements.
As of September 1, 2021, the company has recommended
staggered hours using flextime to reduce the risk of COVID-19
infection during rush-hour commutes on public transportation.

Taiyo Nippon Sanso Corporation strives to create a workplace
comfortable for all employees. To this end, the company has
established a variety of systems that allow employees to takeadvantage of work styles that best suit them.
Systems include shortened work hours after returningfrom childcare leave, as well as paid leave to care for sickchildren of elementary school age or younger, for childcare
assistance, for participation in school events, and for homenursing care for relatives. The company also offers a program
under which employees may take a total of up to 365 days ofnursing care leave.
In FYE2018, Taiyo Nippon Sanso began offering a leave ofabsence program for employees returning to work after

Taiyo Nippon Sanso Corporation conducts health and safety activities based on Rules for Occupational Health and Safety. Each
workplace establishes its own safety and health management organization based on these regulations, holding safety and healthcommittee meetings. Each workplace also implements comprehensive and consistent safety education, morning meetings,
hazard prediction activities, and “5S” (sort, set in order, shine, standardize, sustain) campaigns with the goal of zero lost time
accidents. In addition, the company distributes materials from the Japan Industrial Safety and Health Association (JISHA) in theform of the Safety and Health News electronic newsletter to raise employee awareness of occupational safety.
Site Occupational Health and Safety Management Framework

HR Division

Technological Affairs
Unit(Process Safety andEnvironment Division)

Overall management ofoccupational health issues

Overall managementof occupational safetyissuesNumber of Employees Using Systems Designed for a More Comfortable Work Environment
FYE2018

Special maternity leave
before/after birth

FYE2019

2

Childcare leave

Reduced working hours

Flextime

FYE2020

44FYE2021

9

7

7

7

16

(Female employees: 7)(Female employees: 5)(Female employees: 7)(Female employees: 10)

12

12

14

14

(Female employees: 12)(Female employees: 12)(Female employees: 14)(Female employees: 14)

1

2*(Female employees: 1)(Female employees: 1)

0—*

Cumulative
number ofindividuals

39

75

119

87

(Female employees: 25;
male employees: 14)(Female employees: 46;
male employees: 29)(Female employees: 70;
male employees: 49)(Female employees: 28;
male employees: 59)

Cumulative
number of
days

52.0

52.5

100

69.0

(Female employees: 34.0;
male employees: 18.0)(Female employees: 33.0;
male employees: 19.5)(Female employees: 59.5;
male employees: 40.5)(Female employees: 23.0;
male employees: 46.0)

Special childcareleave* The number of employees using flextime represents the number of employees using the childcare flextime system. Separately, one person (male) exercised nursing care flextime (not included in
the count above). As of October 2019, flextime has been available at each office within the head office and other locations, so the numbers of employees using flextime at these offices is notincluded in the system.
In addition, in February 2020 we began encouraging employees to work on a staggered basis, using flextime as a response to COVID-19, and we have not tracked the number of employees
using flextime since that time.

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Guidance
and advice

Occupational health andsafety teams
Specified site general managers
Branch process safety officers

Chief Safety and Health Officer
Executive General Manager,
HR Division; branch general managers,
production facility general managers, andspecified site general managers

Safety officers

Health officers

Executive general managers
and managers(qualified individuals)

Executive general managers
and managers(qualified individuals)

Process supervisors

Individuals responsible
for occupational healthand safety

Assistant managers,
forepersons, etc.
(qualified individuals)

Occupational health andsafety promotional staff

Occupational Health and Safety Committee
Chairperson*1
Chief Safety and
Health Officer

Affiliated company
representatives

Members*2
Safety officers
Health officers
Industrial physiciansCommittee members*3
Executive promotional
committee representatives

Secretariat*4

Industrial physicians

Affiliated company
representative*1 The ranking member of the Health and Safety Committee serves as chairperson.
*2 More than half of the committee members are employee promotional committee representatives.
*3 Business promotional committee members are process safety officers, branch process safety officers,
and/or production facility safety officers.
*4 At corporate headquarters, the HR Division serves as a secretariat. At sites, the role of secretariat is
performed by a business or administrative department.

TNSC Support for Labor Union Activities
The Taiyo Nippon Sanso Employees’ Labor Union, established in May 2005, concluded an agreement in October 2005 to makeTaiyo Nippon Sanso a union shop. The policy of Nippon Taiyo Sanso Corporation on consultation and negotiation is to disclose as
much information as possible to the Taiyo Nippon Sanso Employees’ Labor Union and to deal in good faith. Taiyo Nippon Sanso
Corporation maintains sound labor–management relations, and the company hopes to continue working together diligently withthe union for mutual development.

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Sustainability Topics:
People (The Company and Its Organizational Structure)

NSHD Communication with Shareholders and Investors
Results of Main IR Activities
In addition to returning profits to shareholders, we aim to
improve management transparency through dialogue withshareholders and investors. At the same time, we strive forthe timely disclosure of corporate and financial information.
Total Number of Dialogues

FYE2020

FYE2021

For investors in Japan

159

156

For investors overseas

116

112

Total

275

268

Including ESG-related media coverage

1217

Financial Results Presentations
We use visuals in our financial
results presentations to help
deepen an understanding ofour business, our performance, and our future
prospects.
Financial results presentations for analysts
and institutional investors* Beginning in February 2020, we moved
our financial results presentations online
to prevent the spread of COVID-19.

Operating Site Visits
We conduct regular tours of
our plants and laboratories tofoster a deeper understandingof the Group's business.

First Quarter (Apr. to June 2020)

Full-year financial results presentation for FYE2020*

President CEO Hamada Appeared Live on the“Ask the Top” Segment of Nikkei CNBC Morning Express
In August 2021, Nippon
Sanso Holdings Group
President CEO ToshihikoHamada appeared live on
the “Ask the Top” segmentof Nikkei CNBC Morning
Express. During the segment,
Nippon Sanso Holdings Group President CEO
Mr. Hamada discussed ourHamada during his live television appearancegroup strategy for supplying
industrial gases and other products, as well as strategies
focused on value-added services that answer customer needs
such as reducing environmental impact.

Participation Nomura IR Fair 2021
In January 2021, we participated in the Nomura IR Asset
Investment Fair 2021, which was held online. The fair is oneof the largest IR events in Japan, and many publicly traded
companies and investment trust management firms exhibit,
conduct seminars, and sponsor lectures from prominentindustry figures. The 2021 even was held online due tothe spread of COVID-19.
IR Policy
In February 2021, we established an IR policy based on theconcept of fair disclosure, expanding on the disclosure policies already in effect. Our intent with this policy is to achievesustainable growth and enhance corporate value over the
medium to long term. This IR policy communicates our basic
stance on IR activities, IR information disclosure policy, initiatives related to IR activities, methods and procedures fortimely disclosure, and quiet period for IR activities (see page177 for details).

Second Quarter (July to Sep. 2020)

SMBC Nikko Securities Domestic Conference* (Japan)
Plant tour for analysts and institutional
investors at an overseas operating site* We have suspended tours since February2020 to prevent the spread of COVID-19
infections.

Third Quarter (Oct. to Dec. 2020)

In conjunction with the launch of Nippon Sanso Holdings,
we expanded the corporate website and IR page, held
an online IR seminar for individual investors, published
Integrated Report 2020 (Japanese/English), created new
corporate and sustainability websites, and participated in the
Nomura Securities Co., Ltd., Domestic Conference (Japan)*.

Corporate IR Seminar for Individual Investors (Online)
After launching Nippon Sanso
Holdings on October 1, 2020,
we held a corporate seminarin November 2020 with au
Kabucom Securities Co., Ltd.,of the Mitsubishi UFJ Financial
Group, Inc., as part of our IR
Takayoshi Umehara, general manager,
activities for individual invesInvestor Relations, Group Finance andtors and to raise awareness of Accounting Office, giving a presentation
our new corporate name. In August 2021, we held a corporate seminar together with Nomura Investor Relations Co.,
Ltd., of Nomura Holdings, Inc., where we provided an overview of the Group’s businesses, growth strategy, and recent
earnings performance.

Fourth Quarter (Jan. to Mar. 2021)

Created and published IR policy, participated in the Daiwa
Securities Co., Ltd. Domestic Conference (Japan)*, participated in Nomura Securities Co., Ltd., Domestic IR
Conference (Japan)*, participated in the BofA Securities, Inc.,
U.S. Conference, and participated in the SMBC Nikko
Securities Domestic IR Conference (Japan)** Held online

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Message from a Stakeholder

Expected Performance as a Leader in the Drive for
Carbon Neutrality

Professor
Hideaki Kobayashi,
Tohoku University

Taiyo Nippon Sanso Corporation provides supplies of industrial gases, but it is also expanding operations in a wide range of application fields. The company’s technology development
is extremely highly rated by the Combustion Society of Japan, which is my main academic
society, and received the Society’s technology award in fiscal 2015. My relationship to Taiyo
Nippon Sanso came about through the activities of the Society, as it was the main participating institution from the start of the national Strategic Innovation Program (SIP)’s Energy
Carrier Project, which was conducted over five years from 2014. In this project, I was leading the ammonia direct combustion team, which gave me an opportunity to become morefamiliar with Taiyo Nippon Sanso’s new technologies. I was put in charge of developing
basic technologies for using carbon-free ammonia as fuel for an industrial furnace, and weachieved the initial target at a high level. At the end of 2020, ammonia fuel was included
explicitly in a statement on the green growth strategy associated with achieving carbon
neutrality by 2050. Amid these developments, I would like to continue working with Taiyo
Nippon Sanso on early social implementation of the results of our SIP project. Open innovation is much talked about these days. I hope that Taiyo Nippon Sanso will continue todevelop and grow its technologies and its outstanding human resources, which are its
strengths, and that the company will play a leading role in achieving carbon neutrality forthe industrial sector.

NIPPON SANSO HOLDINGS CORPORATION175

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Policies

Code of Conduct
We contribute to the creation of value of our customers in allindustries through innovative gas solutions and to the realization of an affluent and sustainable society through thecreation of a harmonious relationship between people andthe earth based on the Group Philosophy, “Proactive.
Innovative. Collaborative. Making life better through gas
technology.” We act honestly and fairly with high ethicalvalues toward the goal that we can gain trust from society
and make continuous progress.

and endeavor to ensure fair and free competition. We provide to our officers and employees necessary education on
the importance of compliance with competition laws.
https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Global-Competition-Law-Compliance-Policy_
en.pdfGlobal Policy on Respecting Human Rights, Contributing
to Communities, Employment, Labor, and HealthWe support the spirit and meaning of the Universal
Declaration of Human Rights, the International Covenantson Human Rights, the Guiding Principles on Business andHuman Rights, and the United Nations Global Compact, andwe shall fulfill our social responsibilities as a business entity
through the promotion of respect for human rights in theworkplace and creation of adequate working environments.

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Code-of-Conduct_en.pdf

Internal Audit Policy
Our mission is to contribute to the realization of our groupcompanies’ philosophy and vision and the achievement ofbusiness targets. Through internal audit activities, we
endeavor to add value to our group companies’ operations
or make improvement proposals, thereby contributing tosecuring sound and appropriate business operation andimproving business efficiency.

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Global-Policy-on-Respecting-HumanRights,Contributing-to-Communities,Employment,Labor-and-Health_en.pdf

Procurement Policy
We are addressing the resolution of environmental and social
issues based on the Group Philosophy, “Proactive. Innovative.
Collaborative. Making life better through gas technology.”
We believe resolving these problems and realizing a sustainable society requires joint efforts with wide range of suppliers, and established the below procurement policy. We willcomply with this policy and contribute to realization of a sustainable society.

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Internal-Audit-Policy_en.pdf

Anti-Corruption Policy
We aim to prevent any form of corruption including bribery
and anticompetitive acts and to establish and maintain fairtrade practices in accordance with the Code of Conduct of
the Nippon Sanso Holdings Group.

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Procurement-Policy_en.pdf

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Anti-Corruption-Policy_en.pdf

Procurement Guidelines
We are addressing the various issues we are facing, includingof global warming, exhaustion of resources, energy, andhuman rights that threaten the continuance of sustainable
natural and social environments based on the Group
Philosophy, “Proactive. Innovative. Collaborative. Making life
better through gas technology.” We believe this approachcannot be completed by a sole effort of our group; it can
only be achieved by sharing perceptions and cooperating
broadly with our suppliers.
Based on this standpoint, we have established the Nippon
Sanso Holdings Group Procurement Policy to promote our
suppliers’ understanding and cooperation and have createdthe Nippon Sanso Holdings Group Procurement Guidelines onmatters that we would like our suppliers to address with us.

Global Competition Law Compliance Policy
In many countries and regions in which we conduct businessactivities, laws and rules that are generally called competition
laws prohibit anticompetitive acts using a dominant positionin the market, cartels, anticompetitive mergers and acquisitions, and other anticompetitive acts to ensure fair and freecompetition. In some countries and regions, laws of suchcountries and regions may be applied and enforced even on
an act conducted outside the countries and regions if suchact affects the market in the countries and regions.
We understand that compliance with such competition
laws contributes to the benefit not only of consumers but
also of the entire society, will respect the competition laws,

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Procurement-Guidelines_en.pdf

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Global Tax Policy
We understand that it is our social responsibility to comply
with the tax laws and regulations of, and contribute throughtax payments to the development of, all the countries andregions we operate in. Therefore, we are committed toaddressing the interests of various stakeholders through legal
compliant, timely, and appropriate tax payments and properand highly transparent tax management to ensure such compliance and tax payment.

Environmental Policy
We address the reinforcement of sustainability management
and contribute as “The Gas Professionals” to both the development of a globally sustainable society and the resolutionof global challenges. We will technically contribute to theresource-recycling society and to the development of asustainable society by harmonizing with the environment andendeavoring to reduce environmental impact in our businessactivities under the direction of top management.

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Global-Tax-Policy_en.pdf

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Environmental-Policy_en.pdf

Investor Relations (IR) Policy
We engage in constructive dialogue with market participants(including shareholders, investors, and securities analysts)
based on the concept of fair disclosure to realize sustainablegrowth and medium- to long-term corporate value improvement. In addition, we endeavor to enhance our IR activities
by providing fair, timely, and appropriate explanation anddisclosure of accurate information, including the status ofmanagement and business operation, and to utilize forenhancing corporate value by communicating the requests
and assessment by the market participants to the management to reflect them in business management.

Product Safety and Quality Policy
We, “The Gas Professionals” at the Nippon Sanso HoldingsGroup, recognize that social responsibilities are not only tocomply with the applicable laws and regulations of eachcountry and region and respect international standards but
also to provide a reliable supply of various kinds of products
and services including industrial gases safely and securely. Thisreliable supply is the source of trust and we fulfill the mission
to supply these products and services for the long term inaccordance with the concept of product stewardship and by
giving full attention to human and environmental aspects.
https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Product-Safety-and-Quality-Policy_en.pdf

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Investor-RelationsPolicy_en.pdf

Intellectual Property Policy
Recognizing that intellectual properties are important corporate assets, we work on acquiring, protecting, and using
intellectual properties in order to contribute to businesses
and society through intellectual property-related activities
and to realize our group companies’ global growth. Basedon the philosophy of legal compliance, we also respect othercompanies’ intellectual property rights and pay attention
not to infringe them.

Information Security Policy
We recognize that information management is a material
factor for internal control. This policy on information security
is established to protect our group companies and our customers from loss of social credibility, business disruption, or
the like, caused by information leakage or falsification, to becomplied with by all employees.
https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Information-Security-Policy_en.pdf

https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Intellectual-Property-Policy_en.pdf

Occupational Safety and Health / Industrial Safety andDisaster Prevention Policy
We earnestly work on securing industrial safety for our business continuity, sound development, and corporate valueenhancement based on the idea of putting the safety of ouremployees including contract employees, contractors, andexternal stakeholders first. We also ensure the safety andhealth of all individuals involving in our businesses by eliminating personal injuries, diseases, and accidents during business activities in our workplaces.
https://www.nipponsanso-hd.co.jp/Portals/0/images/company/policy_en/
Nippon-Sanso-Holdings-Group-Occupational-Safety-and-Health-Industrial-Safetyand-Disaster-Prevention-Policy_en.pdf

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MORE INFORMATION ON SUSTAINABILITY

Sustainability Data

Environment

Unit

FYE2019

FYE2021

FYE2020

Unit

Greenhouse Gas (GHG) Emissions

FYE2021

FYE2020

Contributions to Environmental Protection through Products

GHG Emissions Scope 1

Thousands oftonnes CO2e

14

1,061

987

GHG Emissions Scope 2

Thousands oftonnes CO2e

4,056

4,747

4,664

GHG Emissions Scope 3 –Total for the Following Categories

Thousands oftonnes CO2e

3,634

GHG Emission Reduction
Contribution

Products and Services

Thousands oftonnes CO2e

1,779

2,373

2,892

Industrial Gases

Thousands oftonnes CO2e

—

—

2,174

72,01470,890418
706

109,512
97,483
11,378651

104,142
93,40010,004738

See pages 183 and 189 for details about reporting boundaries and the calculation methods.

Category 1
Purchased goods and services

Thousands oftonnes CO2e

Category 2
Capital goods

Thousands oftonnes CO2e—

Category 3
Thousands ofFuel- and energy-related activities not included in Scope 1 and Scope 2 tonnes CO2e

—

—

3,662
883
60
276

4,340
883
43
248

Energy Usage

Energy Consumption
Electric power
Fuels
Heat

Terajoules
Terajoules
Terajoules
Terajoules

Reporting boundary: Main consolidated subsidiaries of Nippon Sanso Holdings
The energy of the consumed fuels are calculated based on the gross calorific values specified in Japan’s Act on the Rational Use of Energy. Purchased electricity and purchased steam are converted into primary energy amounts.

Environmental Impact

Category 4
Upstream transportation and distribution (Including transportation
services whose cost is borne by the Company)

Thousands oftonnes CO2e

Category 5
Waste generated in operations

Thousands oftonnes CO2e

—

N/A

2

Category 6
Business travel

Thousands oftonnes CO2e

—

1

1

Category 7
Employee commuting

Thousands oftonnes CO2e

—

3

3

Category 8
Upstream leased assets

Thousands oftonnes CO2e—

Category 9
Downstream transportation and distribution

Thousands oftonnes CO2e

—

40

37

N/A

N/A
N/A

—

N/A

N/A

Category 11
Use of sold productThousands oftonnes CO2e

—

1,583

2,436

Category 12
End-of-life treatment of sold products

Thousands oftonnes CO2e

—

N/A

N/A

Thousands oftonnes CO2e

Category 14
Franchises

Thousands oftonnes CO2e

Category 15
Investments

Thousands oftonnes CO2e

—
—

N/A

N/A

N/A

N/A

816

687

Reporting boundary: Scope 1 emissions and Scope 2 emissions represent main consolidated subsidiaries of Nippon Sanso Holdings. For information on Scope 3 emissions aggregation, pleaserefer to pages 187-188.
Scope 1 emissions: Direct emissions occurring from sources owned or controlled by the company
Scope 2 emissions: Indirect emissions from the use of electricity, steam, and heat
Scope 3 emissions: Indirect emissions other than Scope 2 emissions
GHG emissions in Japan are calculated using emission factors specified in Japan’s Act on Promotion of Global Warming Countermeasures. For GHG emissions overseas, Scope 1 emissions arecalculated using emission factors set forth in Japan’s Act on Promotion of Global Warming Countermeasures, while Scope 2 emissions are calculated using country-specific emission factors
published by the International Energy Agency (IEA). However, for electricity in Europe, beginning FYE2021 a separate emissions factor for each electricity provider is used, and emissions arecalculated making reference to the Guarantee of Origin, resulting in an increase in Scope 2 emission of approximately 244 thousand tonnes CO2e compared with using emission factors provided
by the IEA. See pages 187-188 for details on the calculation method of Scope 3 emissions.
Indicators with mark have been assured by KPMG AZSA Sustainability Co., Ltd. for FYE2021.

Tonnes

3.0
1.0
1.0
10

3.2
1.4
0.1
10

1.8
1.0
0.1
5

Tonnes29

19

7

TonnesTonnesTonnesReleases of substances designated under the Pollutant Release andTransfer Register (PRTR)
Reporting boundary: Consolidated subsidiaries in Japan, including Taiyo Nippon Sanso Corporation

Water Usage
Breakdown of sourcesof fresh water
withdrawn—

N/A

Thousands oftonnes CO2e

Category 13
Downstream leased assets

Nitrogen oxide (NOx) emissions
Sulfur oxide (SOx) emissions
Particulate emissions
Volatile organic compound (VOC) emissions

Ten thousand of m3

1,362

3,002

4,335

Water supply from local government

Ten thousand of m3

—

1,496

1,472

Municipal waterIndustrial water
Groundwater
Surface water
Other

Ten thousand of m3

—
—
—
—
—

429
1,067
276
1,230
—

490
982
258
2,602
3

Fresh Water Withdrawn

Category 10
Processing of sold products

NIPPON SANSO HOLDINGS CORPORATIONFYE2019

Ten thousand of m3
Ten thousand of m3
Ten thousand of m3
Ten thousand of m3

Reporting boundary: Gas production plants operated by domestic consolidated subsidiaries of Nippon Sanso Holdings, business locations with facilities specified under the Water Pollution
Prevention Act, and main overseas consolidated subsidiaries
In FYE2020, we added business locations with facilities specified under the Water Pollution Prevention Act to the scope of aggregation.

Waste

Waste generated*1
Waste disposed of as landfill*2
Hazardous waste generated*3
Waste recycled*4

TonnesTonnesTonnesTonnes

3,023
362
156
1,695

3,762
284
197
2,381

14,273
7,152
1,325
4,890

Reporting boundary: Main consolidated subsidiaries of Nippon Sanso Holdings
Beginning FYE2021, main overseas consolidated subsidiaries are included in the reporting boundary. Waste generated by the Gas Business in Japan is the volume for which the Company
issued a manifest..
*1 Includes valuable materials *2 Includes residue after intermediate treatment outside the Group company*3 Includes specially controlled industrial waste *4 We consider waste collected to be the amount of resources recycled.

Environmental Accounting

Environmental protection costs
Investments
Expenses
Economic benefits associated with environmental conservation activities

Millions of yen
Millions of yen
Millions of yen

9,655
844
15

1,351
1,033
1,905

7,559
1,089
8

Reporting boundary: Taiyo Nippon Sanso, Japan Fine Products Co., Ltd., Taiyo Nippon Sanso Engineering Corporation, Nissan Unyu K.K., and Thermos K.K.

From FYE2020, the figures for chemical oxygen demand (COD) emissions, nitrogen emissions in wastewater, and phosphorus emissions have been omitted from disclosure since the amounts ofthese emissions have been immaterial. The Nippon Sanso Holdings Group uses water primarily for indirect cooling, and its impacts on water quality are therefore not large. Taiyo Nippon Sanso
and its domestic subsidiaries have five business sites that are subject to restrictions on the concentration of COD, nitrogen, and phosphorous emissions in wastewater. The total amounts of COD,
nitrogen, and phosphorous emissions for all five sites amount to less than one tonne each.

178

INTEGRATED REPORT 2021

NIPPON SANSO HOLDINGS CORPORATION179

INTEGRATED REPORT 2021

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Sustainability Data

FYE2019

Unit

FYE2021

FYE2020

GHG-RelatedSociety

Unit

FYE2019

FYE2021

FYE2020

Employees and Diversity (Consolidated)

GHG Scope 1 + Scope 2

Thousands oftonnes CO2e

4,070

5,808

5,651

Number ofindividuals

18,974

19,341

19,155

Gas Business in Japan

Thousands oftonnes CO2e

2,494

2,273

2,014

Gas Business in Japan

Number ofindividuals

6,171

6,292

6,295

Gas Business in the United States

Thousands oftonnes CO2e

1,087

2,164

2,066

Gas Business in the United States

Number ofindividuals

4,916

4,724

4,534

Gas Business in Europe

Thousands oftonnes CO2e

—

871

1,049

Gas Business in Europe

Number ofindividuals

2,589

2,794

2,884

Gas Business in Asia and Oceania

Thousands oftonnes CO2e

488

499

511

Gas Business in Asia and Oceania

Number ofindividuals

4,026

4,195

4,114

Thermos BusinessThousands oftonnes CO2e

1

1

11

Thermos Business

Number ofindividuals

1,272

1,336

1,328

Thousands ofgigajoules

72,014

109,512104,142Male

15,353

15,54615,307

Gas Business in Japan

Thousands ofgigajoules

Number ofindividuals

38,31937,04833,635

Female

3,621

3,795

3,848

Gas Business in the United States

Thousands ofgigajoules

Number ofindividuals

24,50737,94636,172

Gas Business in Europe

Thousands ofgigajoules—

25,06824,96020s and below

%

16.1

16.8

16.6

Gas Business in Asia and Oceania

Thousands ofgigajoules

9,174

9,437

9,201

30s

%

24.7

24.8

24.6

Thermos BusinessThousands ofgigajoules

14

13

174

40s

%

28.9

29.0

28.6

50s and above

%

30.2

29.4

30.2

Energy Consumption

Employees*

Employees by gender

Total

Electricity Consumption

Employees by age group (Composition ratio)

Millions of kWh

7,290

10,0139,592

Gas Business in Japan

Millions of kWh

3,866

3,742

3,402

Overall average

Years

12.4

12.4

11.3

Gas Business in the United States

Millions of kWh

2,511

2,861

2,824

Men

Years

12.5

12.7

11.7

Gas Business in Europe

Millions of kWh

—

2,464

2,442

Women

Years

11.6

11.5

9.5

Gas Business in Asia and Oceania

Millions of kWh

912

945

908

1

16

41.1

41.0

42.3

Millions of kWh

1

Average age

Years

Thermos BusinessNew hires

Number ofindividuals

2,548

2,095

1,893

3

Ten thousands of m

1,362

3,002

4,335

Employee turnover rate

%

6.2

6.1

5.7

Gas Business in Japan3

Ten thousands of m

683

732

676

Female employees as a percentage of the total number of employees

%

19.1

19.6

20.1

Gas Business in the United States

3

Ten thousands of m

457

724

707

Female managers as a percentage of the total managerial positions

%

13.7

13.7

14.6

Gas Business in Europe

3

Ten thousands of m

—

1,317

2,730

Gas Business in Asia and Oceania

Ten thousands of m3

222

229

205

Ten thousands of m3

—

—

17

Total

Water Withdrawal

Total

Thermos Business
Waste Generated (Including Valuable Materials)*

1

Years of consecutive service* Aggregated from actual figures of the Nippon Sanso Holdings Group companies as of the end of each fiscal year. Due to differences in the reporting periods, part of the data includes figures asof the end of December. Due to a revision of this aggregation method, figures presented in previous fiscal years have been retroactively revised.

Employees and Diversity (Non-Consolidated)
Number ofindividuals

—

—

81*

Male

Number ofindividuals

—

—

66

FemaleNumber ofindividuals

—

—

15

Employees
Tonnes

3,023

3,762

14,273

Gas Business in Japan

Tonnes

2,943

3,675

5,505

Gas Business in the United States

Tonnes

—

—

5,691

Gas Business in Europe

Tonnes——758

Gas Business in Asia and Oceania

Tonnes——395

Female employees as a percentage of the total number of employees

%

—

—

18.5

Thermos Business

Tonnes

80

87

1,924

Female managers as a percentage of the total managerial positions

%

—

—

4.1

Total

*1 Beginning FYE2021, main overseas consolidated subsidiaries are included in the reporting boundary. Waste generated by the Gas Business in Japan is the volume for which the Company
issued a manifest.

NIPPON SANSO HOLDINGS CORPORATION180

INTEGRATED REPORT 2021

Employees by gender* Includes 47 employees working concurrently for Taiyo Nippon Sanso Corporation

NIPPON SANSO HOLDINGS CORPORATION181

INTEGRATED REPORT 2021

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Sustainability Data

Unit

FYE2019

FYE2021

FYE2020

Unit

Employees, Diversity, and Work–Life Balance (Registered employees of Taiyo Nippon Sanso Corporation)
Number ofindividuals

Employees

FYE2019

FYE2020

FYE2021

Others (Consolidated)

1,983

2,024

2,065

Employees by gender

Thousandsof yenExpenditures on social contribution initiatives

40,39649,472

109,706* Data is calculated on a consolidated basis from FYE2021.

Male

Number ofindividuals

1,758

1,775

1,789

FemaleNumber ofindividuals

225

249

276

20s and below

%

17.9

18.9

19.5

30s

%

19.8

19.7

20.1

40s

%

31.8

29.6

27.6

50s and above

%

30.5

31.8

32.9

Overall average

Years

18.1

17.9

17.8

Men

Years

18.6

18.5

18.5

Women

Years

14.4

13.8

12.9

Average age

Years

42.6

41.9

42.3

New hires

Number ofindividuals

108

109

102

Employee turnover rate*1

%

2.8

3.1

2.8

Employee training hours

Total hours
per year

5,175

5,547

2,296

Unions members

Number ofindividuals

1,106

1,146

1,195

%

55.8

56.6

57.8

0

0

0

Employees by age group (Composition ratio)

Occupational Health and Safety

Frequency rate of occupational accidents resulting in lost workdays(Number of injuries / fatalities due to occupational accidents per million work hours)
Nippon Sanso Holdings Group (Including Taiyo Nippon Sanso Group)

—

2.32

1.99

2.30

Taiyo Nippon Sanso Group

—

0.73

0.73

0.64

Reporting boundary: Consolidated subsidiaries with production divisions in Japan and overseas
Nippon Sanso Holdings include overseas subsidiaries of Thermos K.K. from January 2017 and Nippon Gases Euro-Holding from January 2019.

Years of consecutive service

Union members as a percentage of the total number of employees

Number ofindividuals

Layoffs*2
Female employees as a percentage of the total number of employees

%

11.3

12.3

13.4

Female managers as a percentage of the total managerial positions

%

1.4

1.5

1.5

Employment ratio of persons with disabilities (as of June 1 of each fiscal year)

%

2.2

2.3

2.3

Number of employees reemployed after retirement

Number ofindividuals

57

64

74

Consolidated subsidiaries in Japan including Taiyo Nippon Sanso Corporation; Matheson Tri-Gas, Inc.; Nippon Gases Euro-Holding S.L.U. andEmployees using childcare leave systems

Number ofindividuals

7

7

16

its consolidated subsidiaries; Leeden National Oxygen Ltd.; Nippon Sanso Ingasco, Inc.; Nippon Sanso Ingasco Philippines, Inc.;

Men

Number ofindividuals

2

0

6

Women

Number ofindividuals

5

7

10

Number ofindividuals

0

0

0

61.3

62.5

60.2

4

0

0

Employees using nursing care leave or long-term nursing care leave
Usage rate for annual paid leave*3%
Number ofindividuals

Employees using volunteer leave system*1 Employee turnover rate is the number of employees leaving the Company during the fiscal year (including mandatory-age retirees and excluding personnel transferring to other Group
companies) divided by the number of employees at the end of the fiscal year
*2 Employees leaving the Company for reasons attributable to the Company (dismissals)*3 The number of new days granted in the reporting year is the denominator. The number of days used in the reporting year is the numerator. The denominator does not include the number ofdays carried over from the previous year.

NIPPON SANSO HOLDINGS CORPORATION

182

INTEGRATED REPORT 2021

Reporting Boundary
Main consolidated subsidiaries

Nippon Sanso Ingasco Clark, Inc.; Nippon Sanso (Thailand) Co., Ltd.; Ayutthaya Industrial Gases Co., Ltd.; Taiyo Gases Co., Ltd.;
Nippon Sanso Vietnam Joint Stock Company; Taiyo Nippon Sanso India Pvt. Ltd.; Shanghai Taiyo Nippon Sanso Gas Co., Ltd.;
Suzhou Taiyo Nippon Sanso Gas Co., Ltd.; Dalian Changxing Island Taiyo Nippon Sanso Gas Co., Ltd.; Dalian Taiyo Nippon Sanso Gas Co., Ltd.;
Yangzhou Taiyo Nippon Sanso Semiconductor Gases Co., Ltd.; Nippon Sanso Taiwan, Inc.; Taiyo Nippon Sanso Engineering Taiwan, Inc.;Fu Yang Gas Co., Ltd.; Supagas Pty Ltd; Nippon Sanso Myanmar Co., Ltd.; Top Thermo Mfg. (Malaysia) Sdn. Bhd.; Vacuumtech Philippines Inc.

Beginning FYE2021, environmental data includes the HyCO plant and liquid carbon dioxide plant of Nippon Gases Euro-Holding S.L.U. and its consolidated subsidiaries, Top Thermo Mfg. (Malaysia) Sdn. Bhd and Vacuumtech Philippines Inc.

NIPPON SANSO HOLDINGS CORPORATION183

INTEGRATED REPORT 2021

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Sustainability Data

GovernanceUnit

FYE2019

FYE2021

FYE2020

Unit

Activities of Committees

FYE2019

FYE2021

FYE2020

Activities of Committees
Number ofindividuals

6

9

9

Internal directors

Number ofindividuals

4

7

7

Independent outside directors

Number ofindividuals

2

2

2

Directors serving concurrently as executive officers

Number ofindividuals

3

4

3

50.0

44.4

33.3

Management Configuration

Percentage of directors serving concurrently as executive officers%

Independent outside directors as a percentage of total Board of
Directors’ members

%

33.3

22.2

22.2

Female directors as a percentage of total Board of Directors’ members

%

0.0

0.0

0.0

Term of appointment

Years

1

1

1

Frequency of Board of Directors’ meetings

Times

15

12

11

Attendance at Board of Directors’ meetings

%

97.8

99.1

98.0

Attendance of independent outside directors at Board of Directors’ meetings

%

96.7

100.0

100.0

Number of directors attending less than 75% of Board of Directors’ meetings

Number ofindividuals

0

0

0

Audit & Supervisory Board members

Number ofindividuals

4

4

4

Internal Audit & Supervisory Board members

Number ofindividuals

1

1

1

Independent outside Audit & Supervisory Board members

Number ofindividuals

3

3

3

Independent outside Audit & Supervisory Board members as a percentage of total Audit & Supervisory Board members

%

75.0

75.0

75.0

Female Audit & Supervisory Board members as a percentage of total
Audit & Supervisory Board members

%

0.0

0.0

0.0

Frequency of Audit & Supervisory Board meetings

Times

18

16

16

Attendance at Audit & Supervisory Board meetings

%

100.0

92.2

100.0

Attendance of independent outside Audit & Supervisory Board members
at Audit & Supervisory Board meetings

%

100.0

89.6

100.0

Number of Audit & Supervisory Board members attending less than 75%
of Audit & Supervisory Board meetings

Number ofindividuals

0

1

0

Years

65.5

64.3

64.8

Number ofindividuals

23

22

7

%

0.0

0.0

0.0

Average age of directors and Audit & Supervisory Board members
Number of executive officers*
Female executive officers as a percentage of total executive officers* Figures for FYE2021 represent executive officers of Nippon Sanso Holdings (including the president). Figures for FYE2020 and earlier represent executive officers of Taiyo Nippon Sanso
Corporation (including the president).

NIPPON SANSO HOLDINGS CORPORATION184

INTEGRATED REPORT 2021

Advisory Committee on Appointments and Remuneration
Number ofindividuals

3

3

3

Internal directors

Number ofindividuals

1

1

1

Independent outside directors

Number ofindividuals

2

2

2

Members

Frequency of meetings

8

11

6

100.0

100.0

100.0

Number ofindividuals

17

17

13

Times

21

16

6

%

99.1

97.1

100.0

Number ofindividuals

12

12

15

Times

2

2

1

%

95.5

100.0

93.3

Number ofindividuals

—

—

17

Times

—

—

1

%

—

—

100.0

Number ofindividuals

—

—

17

Times

—

—

1

%

—

—

100.0

Number ofindividuals

20

20

20

Times

1

0

0

100.0

—

—

Times

Attendance%Management Committee
Members
Frequency of meetings
Attendance*

1

Investment Committee
Members*2
Frequency of meetings
Attendance*

1

Global Strategy Review Committee
Members
Frequency of meetings
Attendance
Global Risk Management Committee
Members
Frequency of meetings
Attendance
Global Compliance Committee
Members
Frequency of meetings*3
Attendance%*1 Average attendance rate
*2 Excluding additional attendees and secretariat*3 Not held during FYE2020 or FYE2021 due to COVID-19

NIPPON SANSO HOLDINGS CORPORATION185

INTEGRATED REPORT 2021

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Sustainability Data

Unit

FYE2019

Calculation Methods for Scope 3 GHG Emissions

FYE2021

FYE2020

Remuneration for Officers

Remuneration for directors (excluding outside directors)
Millions of yen

249

255

263

Basic remuneration

Millions of yen

151

162

169

Corporate political contributions

Millions of yen

97

93

94

Millions of yen

25

25

27

Millions of yen

25

25

27

Millions of yen

102

102

100

Millions of yen

102

102

100

Millions of yen

212

198

210

Remuneration for audit services

Millions of yen

209

195

209

Other remuneration for independent auditors

Millions of yen

3

3

1

Total

Remuneration for Audit & Supervisory Board members(excluding independent outside members)
Total
Basic remuneration

Referenced Guidelines
Our Scope 3 GHG emissions are calculated based on the Corporate Value Chain (Scope 3) Accounting and Reporting Standard
issued by the GHG Protocol. For emission factors, we used the emission factor database Ver. 3.1 provided in the Green Value
Chain Platform, the Inventory Database for Environmental Analysis (IDEA v2) for supply-chain GHG emissions accounting, andinformation included in MiLCA Ver. 2, a life-cycle assessment software developed by the Japan Environmental Management
Association for Industry.
Reporting Boundary
Unless otherwise specified, the data covers consolidated subsidiaries in Japan, including Taiyo Nippon Sanso Corporation

Remuneration for independent outside directors
Total
Basic remuneration

Calculation Method by Category

Category 1
Purchased goods and services

Calculated by multiplying the amounts of products and services in physical or monetary units purchased by Taiyo Nippon Sanso Corporation by the respective emission factor for each type of productor service. However, emissions from transport and shipping services and from oxygen, nitrogen, andargon purchased from Taiyo Nippon Sanso’s consolidated subsidiaries or affiliates are included in thereporting boundary of Scope 1 or 2, or categories 4 and 15 of Scope 3, and are therefore deductedfrom the procured amounts used for this calculation.

Category 2
Capital goods

Calculated by multiplying the amounts of capital investment during each reporting fiscal year by anemission factor per price of capital goods.

Category 3
Fuel- and energy-related activities
not included in Scope 1 and 2This category includes emissions associated with the extraction, production, and transportation of­purchased fuels and those consumed in the production of electricity and steam that are purchasedby the Group.
Fuels: Calculated by multiplying the amount purchased during the fiscal year by an emission factor
for each fuel type.
Electricity and steam: Calculated by multiplying the amount purchased from outside the Group by
the upstream emission factor for each purchased energy reflecting electricity transmission loss.

Category 4
Upstream transportation and distribution (Including distribution services
whose cost is borne by the Group)

Calculated by subtracting the CO2 emissions from logistics subsidiaries, which are included in Scope 1
emissions, from the CO2 emissions reported for Taiyo Nippon Sanso Corporation and Nippon Ekitan
Corporation as specified shippers in accordance with the Act on Promotion of Global WarmingCountermeasures.
CO2 emissions related to transportation and distribution of products for which Taiyo Nippon Sanso
Corporation and Nippon Ekitan Corporation bear the transportation costs are included in this category.

Category 5
Waste generated in operations

Calculated by multiplying industrial waste output by the emission factors for each waste type(including transportation stages).

Category 6
Business travel

Calculated by multiplying the number of employees of consolidated subsidiaries in Japan, including
Taiyo Nippon Sanso Corporation by the emission factor (0.13 tonnes of CO2/person/year).

Category 7
Employee commuting

Taiyo Nippon Sanso Corporation employees: For train commuters, the annual payment for commuter
passes is multiplied by an emission factor per transportation expense. For car com­muters, the roundtrip distance is multiplied by the annual number of commuting days and an emission factor perperson-kilometer for passenger car.
Employees of domestic consolidated subsidiaries: The number of employees is multiplied by theannual number of commuting days, and multiplied by the emission factor per commuting day.

Remuneration for independent auditors
Total

OthersAnti-takeover measures—

Not adopted

Not adopted

Not adopted

Code of ethics—

AdoptedAdoptedAdopted

Policy on transparency of tax affairs—

Adopted(Internal)

Adopted(Internal)(Currently disclosed on
the Company website)

Corporate political contributions

YenIntellectual Property and Researchand Development

Unit

0

FYE2019

Adopted00

FYE2021

FYE2020

Intellectual Property

Registered patents
Patents

1,147

1,255

1,560

Japan

Patents

774

802

925

Overseas

Patents

373

453

635

Total

* Figures for FYE2019 and earlier are based on a December 31 fiscal year-end. Figures for FYE2020 and later are based on a March 31 fiscal year-end. Figures through 2020 represent
Taiyo Nippon Sanso Corporation on a non-consolidated basis, while figures for 2021 represent the total for all operating companies.

Research and Development

Research and Development
Millions of yen

3,494

3,389

3,315

Gas Business in Japan

Millions of yen

2,846

2,691

2,694

Gas Business in the United States

Millions of yen

614

658

589

Thermos BusinessMillions of yen

34

39

32

Total

NIPPON SANSO HOLDINGS CORPORATION186

INTEGRATED REPORT 2021

NIPPON SANSO HOLDINGS CORPORATION187

INTEGRATED REPORT 2021

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Sustainability Data

Calculation Methods for GHG Emission Reduction Contribution

Category 8
Upstream leased assets

Since the amount of applicable lease assets is negligible, emissions in this category are not calculated.

Category 9
Downstream transportation anddistribution

The emissions associated with the transportation of sold products whose cost is borne by Taiyo
Nippon Sanso Corporation and Nippon Ekitan Corporation fall within category 4 as the Group basically bears the cost of transporting products.

Category 10
Processing of sold products

The Taiyo Nippon Sanso Group’s main product group is gas, and since it is difficult to rationallycalculate the GHG emissions associated with the processing of these products, the emissions are
not calculated.

Category 11
Use of sold products

The amount of CO2 emissions generated from the use of propane gas (LP gas), liquefied carbon
dioxide gas, and dry ice, and from use of electricity for the operation of its ASUs during the service
life, which were sold to customers outside of the Taiyo Nippon Sanso Group.

Category 12
End-of-life treatment of sold products

The Taiyo Nippon Sanso Group’s primary products are gases (oxygen, nitrogen, and argon). After use,these gases return to the atmosphere and do not become waste. Furthermore, since the gas containers are loaned, and therefore the amount of waste from sold is negligible, emissions in this category
are not calculated.

Category 13
Downstream leased assets

Since the amount of applicable lease assets is negligible, emissions in this category are not calculated.

We include the following products and services sold by consolidated subsidiaries of Nippon Sanso Holdings and certain affiliatedcompanies in the calculation of GHG emission reduction contribution. The calculation method per product or service is as follows. The CO2 emission factor used for electricity is 0.470 t-CO2/MWh.
Product or Service

Calculation Methods of GHG Emission Reduction Contribution

Combustion-type exhaust gas
abatement system
Reporting Boundary: Consolidated subsidiaries
in JapanSF6 recovery service
Reporting Boundary: Consolidated subsidiaries
in Japan

SCOPE-Jet®
Reporting Boundary: Consolidated subsidiaries
in Japan

MG Shield®
Category 14
Franchises

As the Group does not have any businesses in this format, there are no emissions in this category.

Reporting Boundary: Consolidated subsidiaries
in Japan

New refrigerants

Category 15
Investments

Calculated by multiplying the emissions of each of the seven main affiliates of Taiyo Nippon Sanso
Corporation in Japan by the Company’s shareholding ratio (as of the fiscal year-end). The sevencompanies’ GHG emissions are based on their actual emissions in the reporting period.

Reporting Boundary: Consolidated subsidiaries
in Europe

Nitrogen gas supply system for laser
processing (PSA)
Reporting Boundary: Consolidated subsidiaries
in Japan

Shuttle Chef®
Reporting Boundary: Consolidated subsidiaries
in JapanHydrogen station
Reporting Boundary: Consolidated subsidiaries
in Japan

Oxygen-enriched combustionin blast furnaces
Reporting Boundary: Consolidated subsidiaries
in Japan and affiliated companies in JapanNIPPON SANSO HOLDINGS CORPORATION188

INTEGRATED REPORT 2021

An average processing capacity of 0.6 L/min for nitrogen trifluoride (NF3) gas per one combustiontype exhaust gas abatement system was assumed, and this value was multiplied by the number ofsuch systems that were installed in FYE2019 and FYE2021, the number of operating hours per year,
and the global warming potential (GWP) of NF3 to calculate the GHG emission reduction contribution. The amount of CO2 emissions from fuel used in combustion equipment was deducted.
The volume of sulfur hexafluoride (SF6) gas recovered in FYE2021 was multiplied by its GWP to calculate GHG emission reduction contribution.
Based on actual observed values at two electronic furnace manufacturers who had introduced
SCOPE–JET®, the electricity-saving effect per volume of jet oxygen (kWh/Nm3) was calculated. The
ratio of the number of plants that have introduced SCOPE–JET® to the total number of electric furnace manufacturing plants was multiplied by the volume of crude steel products by electric furnaces
in Japan in FYE2021, and the resulting number was assumed to be the production volume of crude
steel contributed by the electricity saving from SCOPE–JET®. The amount of oxygen consumed by
SCOPE–JET® in the production of this crude steel, and the amount of electricity saved per volumeof oxygen were multiplied by the CO2 emission factor for electricity to calculate the GHG emission
reduction contribution. The amount of the CO2 emissions generated during the manufacture of
the oxygen was deducted.
The amount of SF6 gas whose use was avoided through use of MG Shield® sold in FYE2021 was
multiplied by the gas’ GWP to calculate the GHG emission reduction contribution.
We calculated the amount of reduction contribution by assuming a 7% per year leakage rate of new
refrigerants sold in FYE2021, and multiplying leakage amount by the difference between the GWP ofalternative refrigerants and the GWP of new refrigerants.
The annual power consumption of Taiyo Nippon Sanso Corporation’s conventional air compressor
was compared with that of the energy-saving type nitrogen gas supply system to calculate the annual
electricity saving from using the energy-saving type system. The annual electricity saved was multiplied by the CO2 emission factor for electricity and the cumulative number of units sold fromFYE2012 to FYE2021 to calculate the GHG emission reduction contribution.
The amount of electric power usage saved per year from using Shuttle Chef® when cooking was
multiplied by the CO2 emission factor for electricity and the total number of units sold over the three
years from FYE2019 to FYE2021 to calculate the GHG emission reduction contribution.
The annual CO2 emissions, which include emissions during the manufacture of the hydrogen, emitted
by fuel cell vehicles (FCVs) filled with hydrogen at hydrogen stations sold or operated by Taiyo Nippon
Sanso Corporation and operated during FYE2021 was compared with the annual CO2 emissions ofgasoline cars to calculate the GHG emission reduction contribution.
We calculated the GHG emission reduction contribution as the difference between the amount CO2
emissions in the production of crude steel using 100% coke and the production of crude steel via
pulverized coal combustion based on crude steel production by the six steel companies to whom
Taiyo Nippon Sanso Group supplied oxygen in FYE2021.
This calculation method is described in “The Impact of Oxygen on Reducing CO2 Emissions in Blast
Furnace Ironmaking” (July 2011) by Dr. Michael F. Riley.
We deducted the amount of CO2 emitted during the production of oxygen and the pumping ofgas into the blast furnace.

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