Nissan Chemical Corporation Integrated Report 2022

Integrated
Report 2022

WHERE IT ALL BEGINS

Issued: October 2022

https://www.nissanchem.co.jp/eng/

Integrated Report 2022

CONTENTSW H E R E

I T

A L L

B E G I N S

To Our Stakeholders

3

Editorial Policy
In 1992, we introduced responsible care activities, and have dis-Guidelines Used as Reference

closed the details of these activities via Environment and Safety
Report from 1999. The Report transformed into CSR Report in⚫ International Integrated Reporting Council (IIRC) “International <IR> Framework”

2013 and Annual report in which business overview and financial⚫M inistry of Economy, Trade and Industry “Guidance for Col-section were included since 2016.

ProfileSince 2018, we have comprehensively summarized the materiality, value creation process, business strategies, and de-Corporate Ethos Structure and Corporate Slogan

5

The History of Nissan Chemical

7

and E (Environment), S (Social), and G (Governance) information

Financial and Non-Financial Highlights

9

as an integrated report to make this report easier to understandtailed financial information in addition to the business overview

laborative Value Creation”⚫ GRI “Sustainability Reporting Guidelines Standard”⚫Ministry of the Environment “Environmental Reporting Guidelines”⚫ Task Force on Climate-related Financial Disclosures (TCFD)

mid- to long-term value creation of Nissan Chemical Group to all
stakeholders, including shareholders and investors.

Value Creation & Growth Strategies

Third-party Evaluation
Nissan Chemical’s initiatives are highly regarded
by external analytics and research organizations.

We aim to make this report as a valuable communication
tool by deepening our business activities and enhancing the con-

Message from the President

11

Value Creation Process

17

Materiality

19

Management Capital

23

FY2021 (April 2021 to March 2022)

Corporate Governance25

The occupational accidents data (P10 and P69) is from January to December 2021.

Messages from Outside Officers

33

Business Plan

35

Message from the CFO

43Business Segments

47

Main Products and Services

49

Business Strategies

51

Research and Development

61

Information Disclosure System
Reporting Period

October 2022

Frequency of Issuance

Sustainability Promotion Group, Sustainability Promotion & IR

63

Department

Improvement of Products Quality

66

TEL: +81-3-4463-8404

Responsible Care

67

E-mail: sus_pro@nissanchem.co.jp

75

Risk Management78

Respect for Human Rights

81

Corporate Data
Financial Review

83

Corporate Information95

WebsiteDetailed
Information

For general users

For investors

Annually

Human Resources Strategies

ComplianceIntegrated Report(this report)(The previous edition was issued in November 2021, and the next editionis planned to be issued in October 2023.)

Nissan Chemical Corporation

Information Disclosure in line with TCFD Recommendations 70

Summarized
Information

IssuedContact for Inquiries About This Report

Sustainability* FTSE Russell confirms that Nissan Chemical Corporation has been independently assessed according to the index criteria, and has satisfied
the requirements to become a constituent of the FTSE Blossom Japan
Sector Relative Index.
The FTSE Blossom Japan Sector Relative Index is used by a wide variety of market participants to create and assess responsible investment
funds and other products.

tent of the report.

Scope of Reporting
The initiatives are described mainly in the financial and ESG
information of the activities of Nissan Chemical Group.

Consolidated subsidiaries:
Nissei Corporation, Nissan Butsuryu Co., Ltd.,
Nissan Green & Landscape Co., Ltd.,
Nissan Engineering, Ltd., Nihon Hiryo Co., Ltd.,
Nissan Chemical America Corporation (NCA),
Nissan Chemical Europe S.A.S. (NCE),
NCK Co., Ltd. (NCK)
Entities accounted for using equity method:
Sun Agro Co., Ltd., Clariant Catalysts (Japan) K.K.
Group Companies:
In addition to the above consolidated subsidiaries andentities accounted for using equity method,
NC Agro Hakodate Corporation,
Environmental Technical Laboratories, Ltd.,
Nissan Chemical Taiwan Co., Ltd. (NCT),
Nissan Chemical Product (Shanghai) Co., Ltd. (NCS),
Nissan Chemical Agro Korea Ltd. (NAK),
Nissan Chemical Do Brasil (NCB),
Nissan Agro Tech India PVT. LTD. (NAI),
Nissan Chemical Materials Research (Suzhou) Co., Ltd. (NSU),
Nissan Bharat Rasayan PVT. LTD. (NBR)

Profile

Value Creation & Growth Strategies

Sustainability

To Our Stakeholders

Our company was founded as Japan’s first chemical fertilizer manufacturer in1887 to solve food issues which Japan faced under the founding spirit “to dedicate ourselves to prosperity of the nation by agricultural fertility”. The pioneering spirit has been still very much alive at Nissan Chemical as we have continued putting effort into innovative technologies and projects that promote social
progress, greatly transforming our business operations.
To realize corporate vision in a new era, we currently provide products
and services on a global scale in four business domains, such as Chemicals,
Performance Materials, Agricultural Chemicals, and Healthcare on the basis of
ESG (Environment, Social and Governance) and SDGs (Sustainable Development Goals) established by the United Nations.
Now we are in the third year of the global spread of COVID-19; the society
and economy surrounding us continue to change dramatically. At the sametime, various global issues, such as climate change associated with global
warming, aggravated food issue and health issue, low birthrate and aging population , and economic divides are on the increase and threatening the sustainability of society.
From the time of our founding to the present, we have been working tosolve social issues. By thoroughly pursuing our corporate philosophy “Contribute to the protection of the global environment and the existence/developmentof humanity, offering the value sought by society”, and continuing to take on
the challenge of creating unprecedented possibilities and value, we will strive
for sustainable development of society and our group in the future.

KINOSHITA Kojiro
Representative Director, Chairman & CEO

Nissan Chemical Corporation

4

Integrated Report 2022

Corporate Data

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Corporate Ethos Structure and Corporate Slogan
To determine our direction for the future and clarify the raison d’etre of the Group, we redefined our corporate philosophy in2022. For the “Basic CSR Policy”, we renamed it to the “Course of Action” to express our stance on focusing on sustainability
management from now, let alone CSR. In addition, we newly set up “Where it all begins” as our corporate slogan, to spreadaround.

“C ontribute to society with excellent technologies
and products.”“Promote prosperity and welfare through concerted
efforts to constantly develop new areas.”

MissionStatement(Our Values)

Corporate
Philosophy(Raison d’etre /Corporate Purpose)

Course of
ActionCorporate Slogan“Respect people who exhibit a sense of responsibility, originality and motivation.”Contribute to the protection of the global environment and theexistence/development of humanity, offering the value sought bysociety“W HER E IT AL L B EG I N S ”(1) C onduct sensible business activities as a member of the international community in compliance with laws and regulations.
(2) Enhance corporate value by providing safe and useful products and services.

Nothing is going to change the world to be better without beginning.

(3) Strive to achieve no-accidents & no-disasters and protect the global environment.

The slogan means Nissan Chemical creates such “beginning” to realize(4) Disclose information appropriately with a focus on communication with stakeholders.

the hope of human by exploring the future.

(5) Create a cheerful and pleasant workplace by respecting the individuality and personalities, and promoting health of employees.
(6) Conduct ourselves as good corporate citizens and decent members of society.

In Redefining Our Corporate Philosophy

Brand Statement

Discussions on the formulation of the new long-term business plan
“Atelier2050” were centered on the corporate philosophy, which isthe foundation of our business activities. While deepening discussions in a project team with diversity, based on changes in the business environment, social issues, and management challenges, theimportance of the corporate philosophy was recognized once again.
To determine our direction for the future and clarify the raison d’etreof the Group, we redefined our corporate philosophy.

Nissan Chemical Corporation

5

Project Team

Discussion

Directors

Our goal is to fill the world with hope and happiness.
Our value is to produce a whole new excitement utilizing our imagination and creativity.

Management
Meeting

Integrated Report 2022

Our pride is our team of specialists believing in the infinite possibilities of chemistry and striving toachieve the impossible.
We are Nissan Chemical, an ever evolving company the world can’t do without.

Nissan Chemical Corporation

6

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

The History of Nissan Chemical

2016

Japan’s first chemical fertilizer manufacturer
established by the “Father of Biotechnology”

1989

1965

1923

In 1965, we established Nissan Petrochemicals
and entered the petrochemical business. However, the petrochemical industry experienced astructural slump due to the impact of the oil crises. The Company worked to rebuild its business,but it was unable to improve its profitability andbegan rationalization. The Company exited thepetrochemical business in 1988.
Although resulting in a large deficit, this business brought the penetration of technologicalideas to the Company, which led to the development of new technologies and businesses such as
fine chemicals.

In the first half of the twentieth century, amid a variety of M&A activities by domestic corporates, the three companies were joinedin 1923. The Company then promoted business diversification andentered under the umbrella of Nissan zaibatsu (Nissan Concern
Company Group) in 1937, which was the 50th anniversary of its
founding, renamed Nissan Chemical Industries.
After World War II, under the separation directive based on
the Corporate Reconstruction and Improvement Law, the fat andoil section was separated into Nippon Oil and Fats (current NOF)
in 1949 and Nissan Chemical Industries newly started.

Tokyo Jinzo Hiryo, the Nissan Chemical’s predecessor
organization, started in 1885 when TAKAMINE Jokichi,
who was called the “Father of Biotechnology”, brought
phosphoric ore from the US back to Japan. Takamine,
who strongly felt the need for improve the fertilizer
used in Japanese agriculture to help make Japan a modern nation, approached SHIBUSAWA Eiichi, known as
the “Father of Japanese Capitalism”, the following yearwith the idea of the commercialization of fertilizer. SHIBUSAWA Eiichi, who was from a wealthy farming family,
deeply agreed with Takamine’s proposal. He established Japan’s first chemical fertilizer manufacturer in1887 becoming chairman (president) himself.
With the Company policy “to dedicate ourselves toprosperity of the nation by agricultural fertility”, thecompany contributed to the increase of domestic foodproduction.

250,000

Acquired new technologicalideas through entry into thepetrochemical business

Establishment of company foundation forbusiness diversification

At the time of founding

In 1989, we launched our mid-term business plandeclaring the comeback as a value-creating company oriented with its two pillars: high-tech fields
such as agrochemicals and pharmaceuticals, andtechnology fields such as functional products andchemicals. The results of continued R&D investment in this difficult situation emerged. By the early 1990s, we released a large number of agrochemicals on the market and entered the semiconductor
field. In the 2000s, sales of the active ingredient of
LIVALO®*, an anti-cholesterol drug, increased significantly and we acquired exclusive marketingrights in Japan to ROUNDUP®, the world’s largest
herbicide. This was followed by the creation of
new agrochemicals that are the main products atpresent.

Core Technologies for Sustainable Growth
Fine
Organic
Synthesis*L IVALO® is a registered trademark of Kowa Company, Limited.

SHIBUSAWA Eiichi (second from left) visiting Oji
Plant just after the completion of the three-company
joint. Seen on the left is
TANAKA Eihachiro whoserved as company president from 1923 to 1941.

200,000(million yen)

In 2016, the Company launched the long-termbusiness plan “Progress2030” looking ahead to2030, recognizing the importance of expanding
its business domains for sustainable growth.
We expand our business transcending theframework of industry and accelerate this effort
toward the future. In order to clarify this stance,
in 2018, we changed our name to Nissan Chemical Corporation.
This year, in light of the significant changes
in the business environment, which was thepremise for the formulation of “Progress2030”,
we have launched the new long-term businessplan “Atelier2050”, looking ahead to 2050, in orderto chart a course for the Group to continue to develop and contribute to solving social issues.

Restarted as a value-creatingcompany

The pioneering spirit inherited since the company’s founding has contributed greatly to Nissan Chemical’s 135-year history.
As a future-creating company, we have formulated “Atelier2050” to continue our progress.

1887

To be a future-creating company
with sustainable growth basedon our core technologies

Functional
Polymer
DesignUltrafineParticle
Control

OpticalControl
Biological
Evaluation

Information
Science
Microbial
Control

40
Nissan Petrochemicals Chiba Plant (1968)(%)

Three-company Joint
Manufacture of sulfuric acid, soda, etc.

Kanto Soda
Nippon Kagaku Hiryo(renamed from Nippon Seimi Seizo)

150,000

30

Dainippon Jinzo Hiryo(surviving company)
The land in Ojima 1-chome, Koto-ku, Tokyo, now known as
Kamayabori, had been selected for its convenience in transporting
raw materials and products. In 1888, the production of superphosphate (fertilizer) started.

Collapse of Lehman
Brothers

50th anniversary of its founding

20

Entered under the umbrella of
Nissan zaibatsu and renamed

100,000

Nissan Chemical Industries

Expansion of the importsof petrochemical products
in Japan

50,000

Impact of the two oil
crisesEntering thesemiconductor field

Blooming ofresearch findings

10

Jinzo Hiryo advertisementfrom an agricultural magazine in 1891

⚫ T he changes in sales and operating margins for the Nissan Chemical on a non-consolidated basis from 1950 to 1976 and for the Nissan Chemical Group on a consolidated basis from 1977 to 2021.
⚫ T he figures for November and the following May or October and the following April are totaled so that the figures for the year are close to the March results.

Sales (left axis)⚫ FY2021: Including effects of changes in accounting policies

0

1886

1896

1906

1916

Nissan Chemical Corporation

7

1926
Integrated Report 2022

1936

1946

1956

1966

1976

1986
Nissan Chemical Corporation

1996
8

2006

Integrated Report 2022

Operating margin (right axis)

2016

0
(FY)

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Financial and Non-Financial Highlights
Operating profit / Sales / Operating margin
24.5(billion yen)

250

18.1

200

Net income attributable to owners of parent / ROE

18.1

(％)
25

(billion yen)

20.3

18.7

20

16.6

17.5

16.9

15

30

193.4

50 35.0
0

2017

204.9
37.1
2018

Operating profit (left axis)

209.1

206.8
38.6

42.5

2019

2020

Sales (left axis)

208.0 1051.02021 (FY)

15

5
0

72

20
15

9.0

9.0

75
10.0

10.2

0

2017

12.1
2018

10.0

13.1

2019

Total amount of dividend (left axis)
Total payout ratio (right axis)

15.0

2017

2018

300

37.7

250

12.0

2020

2021 (FY)

10

100

17.3

180

0

68

0

2017

0

0

41.5

(％)
50

44.9

42.8

44.9

40

198

210

82

90

2018

Dividend per share (left axis)

50

60

232

61.2

20
10

10

2019

2020

0

2021 (FY)EBITDA

104

2019

2020

EPS (left axis)

122

10

2021 (FY)

0

2018

2019

2020

0

2021

11.3

0.0

11
10

2018

2019

2021 (FY)2020

9*As of September 30

80.0

20

(target)

(％)
80

77.6
0.90 0.94 0.93

1.07

75.8

19

0.37

0.37 0.37

19.3

18

0.37

19.7

0.00

0.00

0.00 (target)

17

2013 2014 2015 2016 2017 2018 2019 2020 2021 2027 (Year)
Nissan Chemical

76.0

0.73

0.76
0.4

1,929

1,924

(hours)0.81 0.88 0.81

0.82

12

Monthly average overtime / Annual paid leave acquisition ratio*

1.11

1.2

13

Number of full-time employees (left axis)
Ratio of females among full-time employees (right axis)
Ratio of female researchers in regular positions (right axis)

Sales-to-R&D expenses ratio (right axis)

1.48

1.6

1,890

1,861

2017

12.5
11.9

11.5

11.1

10.5

1,600

2022 (FY)2017

Chemical industry Sector

2018

75

73.2
18.9

71.0

18.4

2019

17.7
2020

2021

70

2027 (FY)Monthly average overtime (left axis)
Annual paid leave acquisition ratio (right axis)*Number of deaths and injuries due to occupational accidents per million actual working hours*Figures from FY2019 also include annual paid leave acquisition by managers

GHG emissions / GHG emission rate (emissions/sales)(1,000 tons)

Waste generation*/ Recycling rate*(tons / million yen)

(1,000 tons)

4

600

-5.7
28.6

26.6

24.6

22.7

2017

2018

2019

2020

155

-4

-5.2

-5.7

Integrated Report 2022

2.58

400

-3.4

-6.1

Liabilities with Interest (left axis)

9

2017

Dividend payout ratio (right axis)

2021 (FY)

40

97.9

97.7

34.7

34.0

2017

2018

97.0

97.3

97.2

(％)
100

35.0

38.0

38.2

50

0

2019

2020

2021(FY)

3

2.03

2.04

1.96

19

90
18

91
25

100
29

232

230

219

203

216

(target)

2017

2018

2019

2020

2021

2027 (FY)

114

23

246

2016

200

-8

2.33

124

31

22.7

D/E ratio (right axis)*D/E ratio = (Loans payable -Cash and deposits) / Shareholders’ equity

Nissan Chemical Corporation

12.6

3.17

30

40

2018

1,800

17.4

(％)
15
14

13.4

1,700

20

(％)
0

50

2017

5

16.0

16.5

Lost-time injury frequency rate*

40

49.2

17.2

0.8

272

Liabilities with interest / D/E ratio*(billion yen)

48.0

7.7

R&D expenses were on a declining trend in FY2020-FY2021, but are expected to recover in
FY2022
Placing importance on R&D, we have maintained a high sales-to-R&D expenses ratio of 8-9%.

Dividends have increased for ten consecutive years from FY2012 to FY2021.
Dividend payout ratio was targeted at 42.5% for FY2019 and 45% for FY2020 and beyond under
the Mid-term Business Plan (FY2019-2021), which were achieved.

70

45.5

17.8

R&D expenses (left axis)

150

Share repurchase (left axis)

53.0(forecast)

530(billion yen)

30

14.5

1,900

ROE (right axis)

200

EBITDA (operating profit + depreciation)

0

2019

(¥/share)Total payout ratio was targeted at 72.5% for FY2019 and 75% for FY2020 and beyond under the
Mid-term Business Plan (FY2019-2021), which were achieved.

20

30.8

Dividends / EPS (net income per share) / Dividend payout ratio

762021 (FY)29.4

Net income (left axis)

50

2020

7.9

2,000

15

Net income reached record highs for nine consecutive years.
ROE exceeded the previous year’s result and achieved the Mid-term Business Plan
(FY2019-2021) target of 16% or more

50

10
5

75

7.8

8.3

(number of people)

1,819

0

(％)
100

71

8.7

17.2
5

Operating margin (right axis)

30

8.9

(％)
10

5

Total amount of dividend / Share repurchase / Total payout ratio

25

27.1

10

38.8

33.5

10

Operating profit reached record highs for eight consecutive years.
Operating margin achieved the Mid-term Business Plan (FY2019-2021) target of 18% or more.
*FY2021: Including effects of changes in accounting policies(billion yen)

20

12.2

20
100

(billion yen)

25

15

150

16.1

35

(％)
20

19.2

40

Number of full-time employees / Ratio of females among full-time employees /Ratio of female researchers in regular positions*R&D expenses / Sales-to-R&D expenses ratio

Dinitrogen monoxide (CO2 equivalent) (left axis)
CO2 emissions from energy use (left axis)

2

254

20

1

0

0

CO2 emissions from non-energy use (left axis)
Emission rate (emissions/sales) (right axis)

Nissan Chemical Corporation

Waste generation (left axis)

Recycling rate (right axis)*Waste soil from Toyama Plant was added to the calculation for FY2021

10

Integrated Report 2022

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Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Message from the President
In This Time of Unprecedented Transition, We Will Be
the Ones to Create the Futureand new products that will become new growth engines, anddeveloping human resources to support our business. It is mypersonal theory that this is the only and best way to achievesustainable growth.
Demands for corporate social responsibility, such as ESG(Environment, Social and Governance) and SDGs (Sustainable
Development Goals), are becoming more and more sophisticated. Companies are expected not only to pursue economic values such as sales and profits in their business activities, butalso to fulfill their social responsibilities as members of society
and to balance economic and social values.
In the new business plan, our group has formulated financial indicators that represent economic value targets andnon-financial indicators that represent social value targets,and has set strategies to achieve both of them. We will take on
the challenge of co-creating the future by explaining to stakeholders our direction to aim for to gain their understanding
and empathy.
With a strong desire and rich imagination to create the future, we will achieve mid- to long-term growth and enhance
our corporate value.

Rising geopolitical risks from the intense competition for hegemony, combined with the spread of COVID-19 infections
with an uncertain future, and other factors continue to disrupt
the global supply chain. Climate change due to global warming, world population growth, food shortages, and other global-scale problems are piling up, and the uncertainty of the environment surrounding companies is increasing.
As it becomes more difficult to predict the future, all companies are being required to make further efforts to realize asustainable society. I feel that we, not only Japan but also theworld, are now at a turning point we have never experienced
before.
In our 135-year history since our founding as Japanʼs firstchemical fertilizer manufacturer, Nissan Chemical has madeevery effort to build a business and management foundation
suited to the times in order to respond to rapid changes in thebusiness environment. In order to achieve sustainablegrowth, we have been focusing our management resourceson research and development (R&D), creating technologies

YAGI Shinsuke
Representative Director,
President & COO

Build a strong business portfolio toward
the ideal state in 2050
Redefine the Corporate Philosophy as the Foundation
for the New Business Plan

full use of methods such as business restructuring and transformation, and in some cases, M&A.
Therefore, to determine our direction for the future andclarify the raison d’etre of the Group, we have redefined our
corporate philosophy to “Contribute to the protection of the
global environment and the existence/development of humanity, offering the value sought by society”. And, based on thiscorporate philosophy, in “Atelier2050”, we have drawn up theideal state in 2050: “a “future-creating company” that grows
through seeking to enrich people and nature” for the corporate state and “a group of co-creators that face challenges forchange with a strong passion” for the organizational state.
However, a long-term business plan that sets a goal for 2050
is meaningless if it merely predicts the future, the year 2050.
Backcasting from our ideal state in 2050, we analyzed whether
we can really set a course to our goals 10 or 20 years from thepresent, based on the technologies and business positioningthat Nissan Chemical Group possesses. Through this process,the new long-term business plan “Atelier2050” was formulated,
and the new mid-term business plan “Vista2027” was formulated to show our state in 2027, which will be a stepping-stone toward the ideal state in 2050 envisioned in the “Atelier2050”.

The environment surrounding companies is changing significantly, including the acceleration of global efforts to achievecarbon neutrality. Therefore, as a new growth strategy basedon the business environment, social issues, and management
issues, we have formulated and launched two plans, “Atelier2050” and “Vista2027” in April 2022. “Atelier2050” is along-term business plan that sets a goal for 2050, and “Vista2027” is a mid-term business plan that serves as a stepping-stone for “Atelier2050”.
The formulation of the business plans started in FY2021.
In formulating the plans, a project team with diversity wasformed with members in their 20ʼs to 50ʼs from various departments, and the team worked on consideration of a newlong-term business plan with a broader perspective up to
2050. As the team moved forward in their discussions, wecame to recognize once again of the importance of the corporate philosophy, which is the foundation of everything Nissan
Chemical Group do. In allocating limited management resources toward the year 2050, the corporate philosophy will be thebasis for decisions on what to start and what to stop, making

Nissan Chemical Corporation

11

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Nissan Chemical Corporation

12

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Message from the President●Nissan Chemical’s Business Plan

Mid-term Business Plans
Vista2021 StageⅡ
Major Financial Results
Sales: 208.0 billion yen

Operating profit: 51.0 billion yen
Achieved the operating profit target of 50
billion yen for 2030 set in the previous
long-term business plan, “Progress2030”,
9 years ahead of schedule.

ROE: 19.2%
Total payout ratio inshareholder returns: 76%

Mid-term Business Plan
Vista2027

Long-term Business Plan
Atelier2050
Basic Strategies

Major Financial Targets

Deeply exploit and expand business areas

Sales: 285.0 billion yen

Expand into new areas related to
growing businesses

Operating profit: 67.0 billion yen

ROE: Above 18.0%

Major Non-financial Targets
Rate of total sales of Nissan Chemical Sustainable
Agenda* target products andservices in
Maintainconsolidated net sales

at least

55%* A plan to pursue “what we can do for the future of the globe andhuman”

30％

I believe that our corporate philosophy should not only bestated as a mere slogan, but also be permeated throughout
the Group so that each and every one of the employees feels
familiar with it. As our effort to achieve this, I plan to provide
opportunities on a regular basis to encourage employees toreturn to the starting point and think about our corporate phi-

Develop business activities that contributeto solving environmental and social issues
Renovate management and business foundations

Accelerate the value-creation process
by utilizing digital technology

Major Non-financial Targets

Compared to
FY2018losophy by visiting all of our business sites every year to directly explain to them through the presidentʼs lecture, as well
as by using internal newsletters and in-house training programs.
Our groupʼs corporate culture is characterized by our employeesʼ integrity, low organizational barriers, and high transparency. While maintaining the good aspects of our group, including these strong points, and pursuing our corporate
philosophy, we aim to achieve perpetual growth together withsociety.

I will summarize FY2021, the final year of the previous midterm business plan Vista2021. First, compared to the target
set in the business plan the business results for FY2021 weresales of 208.0 billion yen, down 27.0 billion yen, and operating
profit of 51.0 billion yen, up 8.0 billion yen. Although we did notachieve our sales target, partly due to the impact of the changes in accounting policies, we achieved all of our profit target,
which we had made before the spread of COVID-19 infections,and were able to record our highest profits for eight consecutive years. We also achieved the operating profit target of 50
billion yen for 2030 set in the previous long-term businessplan “Progress2030” nine years ahead of schedule. In addition, we achieved all the targets for management indicators
set in the business plan, including a return on equity (ROE) of
19.2% compared to a target of above 16%, and a total payout
ratio of 75.6% compared to a target of 75%.

13

Expand into new areas
related to growing
businesses
Information & Communication- Develop materials for the next-generation display and join that market,
and provide materials that are compatible with the evolving semiconductor technologies- Enter into new businesses, such as
the sensing area and photofunctional material market

Life Science

Expand into microbial agrochemicals,
and advance into healthcare and environment-related areas with microbial control technology

Business

1

Information &Communication2

Semiconductormaterials

Agrochemicals

Display materials

Biomedical materials

Animal health products

Photofunctional
materials

3

Environment &EnergySecondarybatterymaterials and fuel cellmaterials

4

Materials &ServicesIndustrial chemicals
C olloidal silicaA ffiliate companies

Pharmaceuticals(small molecules,
oligonucleotides, peptides)

Sensing system(IoT sensor materials) (Biomimetic sensors)
Metamaterials

Next-generation
solar cell materials
CCUS materials

Microbiome(Agriculture/Healthcare) (Microbial materials)

Environment & Energy

Develop materials related to batteries/cells that contribute to solving
environmental issues, renewable energy materials, and CCUS materials

Life Science

Biostimulant

CO2 reduction
systemGrowing businesses

Core businesses

Achieve Carbon Neutrality

Achieved Operating Profit Target Nine Years Ahead of
Schedule
Promote Development of New Products, while Keeping
Existing Products as the Mainstay of Growth

Nissan Chemical Corporation

Deeply exploit and expand
business areas

GHG emissions (Spope1+2)

GHG emissions (Spope1+2)

Reducing
at least

Pursue sustainable management further

Accelerate the growth in each business area by improving and combining core technologies to contribute tosolving social issues

Integrated Report 2022

collaborations with pharmaceutical and bio-venture companies. In addition, to accelerate small molecule drug discovery,
we have entered into a strategic alliance with Modulus Discovery Inc. (Head Office: Chiyoda-ku, Tokyo) for licensed-in cutting-edge computational science technology.
As for other major initiatives, we established a Planningand Development Division in April 2020 with the primary mission of planning new themes, etc., in order to accelerate thedevelopment of new materials. In this division, we are implementing measures such as acquiring new technologies fromoutside and forming alliances with other companies.
As a result, in “Vista2021 Stage II”, we achieved a steadyincrease in business performance and many results were obtained. On the other hand, however, the plan for new productswith total sales of 19.6 billion yen for FY2021 was not achieved,with actual sales of only 14.2 billion yen. There are many new
products with sales of less than 300 million yen, so they arestill in the development stage. Looking to the future, it mustbe said that the issues is to further strengthen new productdevelopment, including timely introduction to the market. In
order to continue steady growth into the future, I believe it isnecessary to further expand new products that will serve as
growth engines.
In light of these issues, we set “expand market shares andprofits of existing businesses” as one of our basic strategies
in our new mid-term business plan “Vista2027”, and positioned existing and new products which are expected to increase sales by 500 million yen or more in FY2024 or FY2027
compared to FY2021 as sources of growth. We will promote
the solid development of new products, which will be thesource of growth for the next generation, while keeping existing products as the main source of growth.

Next, regarding the implementation status of specificmeasures under “Vista2021 Stage II”, the second three yearsof the previous mid-term business plan, in the Chemicals business, we have decided to withdraw from the melamine business, which has a history of nearly 60 years. Melamine, used
for adhesive agents and decorative laminate, was already inoversupply worldwide, and fierce competition with Chinese
manufacturers in the melamine market was making it unprofitable. The manufacturing facility at the Toyama Plant wasalso aging. We have comprehensively considered these circumstances and have come to the decision to withdraw fromthe business. In the Chemicals business, we will promote
structural reforms to shift to high value-added products.
In the Performance Materials business, as further growthof semiconductor materials is expected to continue in the future against the backdrop of increasing global demand forsemiconductors, our Korean subsidiary NCK started construction of a new plant in order to strengthen our supply system.
In the Agricultural Chemicals business, we expanded our
product portfolio by acquiring the fungicide DITHANE® and
QUINTEC® businesses in Japan and South Korea from Corteva Agriscience (Head Office: Delaware, USA). Also, to establish
a stable supply system for our products, we established ajoint venture company, Nissan Bharat Rasayan Private Limited, in India as Nissan Chemicalʼs first overseas agrochemical
manufacturing base in 2020. The plant is currently under construction with the aim of starting operation by the end of
FY2022.
In the Pharmaceuticals business, in order to develop oligonucleotide therapeutics into a key research area for our future drug discovery, we promoted the acquisition of drug discovery research methods and joint research, throughNissan Chemical Corporation

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Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Message from the President
Fostering Employees Who Can Judge Ahead andCreating Irreplaceable “Must-Have” Products andServices to Win Through● Ratio of Researchers in the Regular Positions for New

Employees

About

70%

I believe that we have not been able to fully grasp changes inthe environment surrounding Nissan Chemical, including customers, technologies, and markets, and have not been able toaccurately reflect these changes in our business plans. Basedon this lesson learned, in “Vista2027”, we incorporate “deeply
exploit business areas and increase marketing ability” into its
basic strategies. This “increase marketing ability” includes
the development of discerning personnel who can judge customers, technologies, markets, etc.
We invest about 8% of our sales in R&D. This is a high level of investment compared to other companies in the industry.
In addition to our four business divisions of Chemicals, Performance Materials, Agricultural Chemicals, and Healthcare, we
also have a Planning and Development Division and handle awide range of development themes. However, even if a large
amount of money is spent on R&D and there are various development themes, without a connoisseur, it is impossible tojudge when to commercialize a product and bring it to market,
or whether it is what the market needs in the first place. In order to win, I believe it is essential to judge how much newtechnologies and products will grow as a business and thento invest in technologies and products with growth potential.
Whether in the semiconductor business or other businesses,
the level of technology required has been quite advanced. Under these circumstances, I feel that we cannot win in the market unless we focus our R&D on niche markets, and introduce
products that cannot be substituted, without which nothingcan function, in other words, “Must-Have” products.
For example, the anti-reflective coating materials for semiconductors that we manufacture and sell are coated underphotoresist to solve various technical problems that occur
during exposure. It contributes to the technological innovationof semiconductor devices, which cannot be made without using this product as materials. I believe that we need to makepositive efforts to develop human resources who can thinkahead and determine not only R&D to meet the needs of customers but also the business potential beyond that.

Approximately 70% are in
research positions.
Our researchers with diverse backgrounds aretaking on the challengeof co-creating new value

resource development, including the introduction of a role
grading system as a new personnel system and examining
the creation of a system for employee career development.
Until now, the development of young managers up to the section chief level has been conducted through personnel training and on-the-job training of managers. In addition to these,
we plan to consider and formulate a training plan to develop
manager level staff into management executives in the future.
We are currently in the process of discussing the definition ofqualification requirements for management executives andmid- to long-term development plans with the Nomination
and Remuneration Advisory Committee, the majority of which
are composed of outside directors.

Continue Strengthening Our Efforts to Address Priority
Issues (Materiality)
Contributing to a Sustainable Society and Sustainable
Corporate Growth in a Compatible MannerIn the Atelier2050, we have included “promote sustainable
management” as a basic strategies. We aim to achieve both acontribution to a sustainable society and our sustainablegrowth. As part of this effort, we have launched the “Nissan
Chemical Sustainable Agenda”. Specifically, we will provide
and expand products and services that contribute to solvingsocial issues, starting with “what we can do for the future of
the globe and human”. We also see addressing increasingly
serious climate change as one of the priority issues. We havebeen actively promoting our efforts to reduce greenhouse gas(GHG) emissions. We will further promote our activities toachieve carbon neutrality by 2050.
In order to strategically address global social issues, including addressing climate change, the CSR Committee (renamed the Sustainability Promotion Committee on April 1,2022) had been considering how to address these issues until
last fiscal year. However, in light of the impact that climatechange will have on society, the Climate Change Committee
was newly established this year, on a par with the Sustainability Promotion Committee, in order to understand the risks andopportunities of climate change and promptly reflect them inour strategies. Establishing the new committee will improve

Strengthening Human Resource Development by
Investing in Human Capital
I recognize that the Company has a high ratio of researchers,with approximately 70% of researchers in the regular positions for new employees and approximately 40% of researchers in all the regular positions. That is why we provide our researchers with as many opportunities as possible to interact
directly with customers by proactively visiting customers
with our sales staff, so that they can identify necessary technologies and business scale and develop their sense of management in a place closer to the market. In order to enhance
our ability to respond to increasingly diverse and sophisticated market demands in the future, it is necessary for us to promote investment in human capital.
This fiscal year, we have also begun to strengthen humanNissan Chemical Corporation

15

Integrated Report 2022

nate related information outside the company in a correct andtimely manner and to engage in dialogue with various stakeholders, including investors. In light of these factors, we established the Sustainability Promotion & IR Department to take onsuch a role. We will strengthen the dissemination of integrated
financial and non-financial information both inside and outside
the company and dialogue with stakeholders.

our ability to respond to climate change, including governance. In addition, ESG indicators were incorporated into thedirector remuneration system this fiscal year. This will enhance the effectiveness of ESG-related activities and strengthen corporate governance.
As for the highest priority challenges for corporate survival include strengthening corporate governance as well as risk
management and compliance. The Risk Management & Compliance Committee has been established as a body to further
enhance the effectiveness of risk management and maintainand improve compliance. In order to further improve the effectiveness of the measures, a new risk management plan
has been formulated and launched with FY2022 as the firstyear of the plan. We will build a strong internal control system
by strengthening cooperation among the Risk Management &Compliance Office, the department in charge of measuresagainst major risks, the Environment, Safety & Quality Assurance Department, and the Production Technology Department. The contents of deliberations at the Climate Change
Committee and the Risk Management & Compliance Committee are reported to the Management Meeting and evaluatedfor the validity, and subsequently discussed at the Board of
Directors for periodic oversight.
The Board of Directors, currently consisting of six insidedirectors and four outside directors, recently disclosed its
skills matrix. While appointing diverse members as outside
directors such as those with experience in corporate management, researchers, and attorneys, we have also guaranteed
the diversity of knowledge, experience, and skills of the insidedirectors. We will continue to improve our governance by reflecting the insights of each director in management. Specifically, at the Board of Directors, directors discuss what the optimal organization should be to realize “Atelier2050” and plan
to oversee the progress of “Vista2027”.
We have identified three issues of “materiality” for ourcontribution to a sustainable society and our companyʼs sustainable growth: (1) provision of new value for helping to enrich peopleʼs lives, (2) strengthening of Nissan Chemicalʼsbusiness base, and (3) continuous improvement of responsible care activities, and set targets for FY2027 as key performance indicators. We will strengthen our commitment to materiality by promoting measures to achieve our targets, andaim to achieve both contributions to solving social issues andsustainable growth.

Sales of 285 billion Yen and Operating Profit of
67 Billion Yen in FY2027
To Be an Enterprise that Faces Challenges toward the
Future Through Co-creation
It is often said that speed is the key to management, and I am
convinced that if we increase engagement with stakeholders
and make management decisions quickly in response tochanges in the business environment, we will naturally build
a strong business portfolio.
Under our previous mid-term business plan “Vista2021”,
we renewed the highest results in each fiscal year of the sixyear plan, and achieved record profits for 8 consecutive years
in FY2021, the final year of the plan. We also achieved all of thetargets set as management indicators in the plan, including
ROE of above 16% and maintaining a total payout ratio of 75%.
In our new mid-term business plan “Vista2027”, we will continue to make a commitment to steadily implementing various
measures based on our strategies in order to achieve mid- tolong-term growth and raise corporate value.
In order to realize our vision and meet the expectations of
our stakeholders, our group will continue to pave the way tothe future by having the same aims among all group members, sharing insights and knowledge with each other, andtaking on the challenge with passion. We would appreciate
your further understanding and support.

Set the Sustainability Promotion & IR Department as a
Command Center
Disseminate Sustainability Initiatives Internally andExternally
In order to promote sustainability initiatives as one group, I believe it is important to foster a culture of co-creating the futureby raising awareness of sustainability among all employees. In
order to achieve this, it is necessary to actively disseminate
relevant information internally and have each and every one of
employees understand it correctly. On the other hand, in orderto improve our corporate value, it is also important to dissemi-

Nissan Chemical Corporation

16

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Value Creation Process
The Nissan Chemical Group is now at an unprecedented turning point in its history, and we are determined to be a leader
in creating the future. With our Corporate Philosophy as the foundation of our business activities, we aim to fill the futureof people and society with hope and happiness through the provision of irreplaceable “Must-Have” products and services
by leveraging the technologies we have cultivated over the years.

Nissan Chemical’s Corporate Philosophy

Contribute to the protection of the global environment
and the existence/development of humanity,
offering the value sought by society.

Social Issues (External Environment)
Global environmental conservation
Climate change
Labor shortage
Food issues

InputsLow birthrate and aging population
Health issues

Business Model
Nissan Chemical’s Strengths

Human Capital(Non-consolidated)

R&D capabilities

Number of employees: 1,929(Number of researchers: 480)

Marketing Ability

Outputs

Outcomes
Vista2027
To Be An Enterprise That Faces Challenges
Toward The Future Through Co-creation

Human Capital (Non-consolidated)・Engagement with stakeholders(Emphasis on dialogue with employees)

2022-2027 Numerical Targets

Ratio of high engagement level employees*3: 16.2%(FY2020: 17.0%)

Ratio of researchers in regular positions: 39% (FY2020: 39%)

Financial Capital

Concentrate on Four Business Domains

Total assets: 279.7 billion yen
Equity ratio: 73.6％

Intellectual Capital

Information &Communication

Life Science

Materials & Services

Environment & Energy

Financial Indicators

Financial Capital◦ Operating Margin: Above 20%

Sales: 208.0 billion yen (FY2020: 209.1 billion yen)
Net income: 38.8 billion yen (FY2020: 33.5 billion yen)
ROE: 19.2% (FY2020: 17.5%)◦ ROE: Above 18%◦ Dividend Payout Ratio: 55%◦ Total Payout Ratio: 75%* FY2021: Including effects of changes in accounting policies◎Related Information “Financial Review” P83-94

Non-financial IndicatorsIntellectual Capital

Number of patents held: 5,550
R&D expenses: 16.0 billion yen
Sales-to-R&D expenses ratio: 7.7%

Number of patent applications: 415 (FY2020: 415)

Manufacturing Capital

Manufacturing Capital◦ Nissan Chemical Sustainable Agenda(A plan to pursue “what we can do for the future of the globe andhuman” by providing products and services that contribute tosolving social issues)

Providing Nissan Chemical’s
unique "Must-Have" products
and services

CAPEX: 11.0 billion yen
Manufacturing base
Japan: 5 sites, Overseas: 3 sites(products that are irreplaceable)

Social Capital

Actualizing a sustainable
future for our planet

Production volume: 736,436 tons (FY2020: 657,587 tons)

Social Capital

Actualizing sustainable
comfort for all

Reduce CO2

Solve health issues
for humankind andanimals

Reduce waste

Achieve a smart
society

Conserve aquatic
environments

Solve foodshortages

Key Performance
Indicator (KPI)
Rate of total sales of
products and services
that contribute to solvingsocial issues in
consolidated net sales

Maintainat least

55%

・Engagement with stakeholders

Engagement with stakeholders(Emphasis on dialogue with investors and analysts)

・Maintenance and promotion of good relationships with local communities(natural observations in Nissan Bio-Park, plant tours, etc.)◦ GHG emissions:

Reduce by at least 30% compared to FY2018→ Aiming for carbon neutrality in 2050

◦ Positive response rate in survey of employee attitude

Strategic Decisions by the Board of Directors

Natural CapitalRaw materials: 449,342 tons
Energy input: 108.1 thousand kL*1
Water resources: 29.5 million m3 *2

Management Foundation

on human resources development: Natural Capital◦ Proportion of females in the regular position:

GHG emissions from business activities:
345 thousand tons-CO2e

At least 13%◦ Proportion of female researchers in the regular position:(FY2020: 318 thousand tons-CO2e)

At least 18%(Corporate Governance / Compliance / Risk Management)◎ Related Information “Management Capital” P23-24*3 In an employee questionnaire survey on work enthusiasm and attitudes, 28 indicators were determinedbased on questions related to “spontaneous action”
and “positive emotions”, etc., to measure the level ofengagement.

*1 crude oil equivalent*2 w
 ater resources input minus
effluent

Nissan Chemical Corporation

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Integrated Report 2022

At least 65%

Nissan Chemical Corporation

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Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Materiality
In the long-term business plan “Atelier2050”, we have drawn up the ideal state in 2050 as “a “future-creating company” thatgrows through seeking to enrich people and nature”, and “a group of co-creators that face challenges for change with astrong passion”.
Toward this corporate vision, we reexamined the materiality and KPIs identified in FY2018, and reviewed the KPIs thatshould be addressed by FY2027.

Materiality Matrix
Provision of newvalue for helping toenrich people’s lives

Materiality Identification Process

We aim to provide new value
for helping to enrich people’s
lives through four businesses
based on core technologies.

Social issues and social changes looking ahead to 2050 and issues to be addressed by Nissan Chemical
were discussed across the Company in the “Business Planning Project” led by the President and theVice President, and it was confirmed that there have been no major changes in social issues and socialchanges since the previous formulation.
Social Issues and Social Changes

Gain Understanding
About Social Issues andSocial Changes

Review of Materiality
and Materiality Factors

Environment

SocialEconomy◦A dvanced climatechange◦Global crisis◦E xacerbation of thefood issues◦I ncrease of requests forconsideration of health andsafety in the work environment◦A dvent of a smart society◦C hanges in lifestyle◦L abor shortage◦Worsening health issues◦I ntensification of inter-corporate
competitions◦D iversification of risk factors◦I ncrease of requests for sustainability considerations in the supply chain◦I ncrease of interest in corporate
governance reform◦I ncrease of requests for information
disclosure

Three Materiality of
Nissan Chemical GroupStrengthening of
Nissan Chemical’sbusiness base

We reviewed materiality and materiality factors with reference to the SDGs, evaluation items of ESG-related evaluation organizations such as DJSI and FTSE, and sustainability information disclosure guidelines such as SASB, and determined that the materiality identified in “Vista2021” remains a priority issue
for Nissan Chemical.
On the other hand, in light of the priority of Nissan Chemical’s business base and the results of ouractivities under “Vista2021”, we have added “safety and disaster prevention” as a new materiality factor,
and summarized into 30 materiality factors.

Crucial issues for corporate survival
Strengthening of Corporate Governance, Risk Management and ComplianceHigh

Maintenance and improvement of
employees’ health

Promotion of diversity

Contribution to local society

Promotion of sustainable procurement

In regards to the 30 materiality factors, we considered and analyzed the social issues and social changes, and then made arrangements to manage the impact on the Group.

Promotion of occupational health andsafetyTo Stakeholders

Identification ofMateriality andMateriality Factors(through resolution at theBoard of Directors)

From the perspective of incorporating outside opinions, we exchanged opinions in intensive discussions
with directors and audit & supervisory board members, including outside officers, regarding the materiality and materiality factors that had been reviewed in the Business Planning Project.

Contribution to health issues
Supply of environmental-friendly
products and services
Enhancement of R&D capability

Promotion of fair-trading

Exchange of Opinionswith Directors and Audit& Supervisory Board
Members, including
Outside Officers

We aim to enhance the maintenance of environment, health, andsafety through the operation of
the Nissan Chemical Responsible
Care Management System.

We aim to strengthen ourbusiness base to improve ourability to respond to increasingly diverse and sophisticated marketing needs.

Personnel retention and trainings

Management of Impact
on Our Group

Continuous
improvement ofresponsible care activities

Improvement of products quality

Mitigation of climate change
Safety and disaster prevention

Water resources conservation

Creation of a comfortable workplace

Contribution to the improvement of
the quality of life

Improvement of capital efficiency

Biodiversity conservation

Contribution to smart societyManagement of chemical substances

Contribution to the food issues

Reduction of industrial waste andpollutant emissions

Adaptation to climate change

Improvement of marketing ability
Enhancement of information security

The Board of Directors confirmed and resolved the appropriateness of the materiality, materiality factors, and key performance indicators (KPIs) for each materiality factor, which were identified based on
the discussions in the Business Planning Project and the opinions of the officers.

Intellectual properties exploitation

High

Priority

To the Company

Nissan Chemical Corporation

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Expanding business domains

Nissan Chemical Corporation

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Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Materiality
Materiality Initiatives and KPIMateriality

Materiality factor

FY2021 Target

FY2021 Result

Vista2027 Major Initiative

FY2027 Target◦Development of materials that contribute to the expansion of renewable energy◦Development of materials that contribute to the achievement of a circular economy◦Reduction of the application amount of agrochemicals◦Introduction of recyclable packaging materials◦Supply of exhaust gas removal materials◦Supply of disinfectants and water treatment for septic tanks◦Supply of materials that enable reduction of oil and fat waste◦Net sales: +10% compared to FY2021

Sale of high-grade urea solution for exhaust gas
purification of diesel vehicles and development ofenergy harvesting materials that contribute to
the utilization of unused energy

Launch of new environmental-friendly products◦Organic photovoltaics materials: Confirmed effectiveness, continuing evaluation◦Secondary battery materials: Expanded sample
evaluation◦ORGABEADS®: Continuing evaluation for adoption

Contribution to smart
society

Development of sensor materials required for IoT
and wiring materials that contribute to higher capacities and speeds of data communications

Expanded adoption of sensors and semiconductor packaging materials/Adoption andlaunch of materials for optical communications◦CIS materials: 61% higher sales than FY2018◦Agents for metal wiring formation: Continuing
evaluation for commercialization◦Optical interconnect materials: Progressed evaluation toward commercialization◦RDL materials for FOWLP: Continuing study ofmaterial improvement◦Supply of materials that contribute to higher capacity/speed of data communication andsensing◦Net sales: +55% compared to FY2021

Contribution to the foodissuesSupply of agrochemicals to increase crop yields andconserve agricultural labor, and the expansion ofveterinary pharmaceuticals to livestock

Achieving 10% higher sales of agrochemicals than FY2018

15.6% higher than FY2018◦Supply of agrochemicals to increase crop yields and conserve agricultural labor in foodproduction◦Contribution to the maintenance of health of livestock◦Net sales: +15% compared to FY2021

Contribution to theimprovement of the qualityof life

Research and supply of veterinary pharmaceuticals for companion animals and sales of disinfectants for drinking-water

Number of people positively impacted by
the sales of disinfectants for drinking water:
2.5 million per year

0.76 million per year

◦Supply of disinfectants for drinking water◦Contribution to maintaining the health of companion animals◦Net sales: +15% compared to FY2021

Contribution to healthissuesCreation of pharmaceuticals that meet medical
needs and biomedical materials that contributeto advanced medical care

License out candidates of drug agents◦Anti-arrhythmic agent: Completed the investigator-initiated clinical trial◦Oligonucleotide therapeutics: Started 2 new collaborative drug discovery themes◦Net sales: +5% compared to FY2021

Launch of new medical materials

Delayed clinical trials due to the spread of COVID-19◦Supply of generic drugs◦Offer of contracted manufacturing and service for pharmaceuticals◦Development of materials for regenerative medicine market◦Development of drugs for intractable diseases
Provision of products and services that contribute to solving social issues

Maintaining at least 55% in consolidated net sales

Supply of environmentalfriendly products andservices

Provision of newvalue for helping
to enrich people’s
livesVista2021 Major Initiative

Nissan Chemical
Sustainable Agenda-

Enhancement of R&D
capability

Deepening core technologies, promotion of open
innovation, and introduction of new technologies
such as AI

Total number of patent applications in three
years by FY2021: 1,350

Cumulative number of patent applications since
FY2019: 1,256(FY2021: 415 patent applications)◦Acceleration of R&D through the use of AI◦Expansion of core technologies◦Further use of open innovation◦Total number of patent applications (FY2022 to 2027): 2,500

Improvement of products
quality

Continuous improvement of management systems and operations based on quality policy

Outsourcer audit rate in three years by
FY2021: 80%

83%◦Prevention of serious complaints◦Prevention of quality fraud and data tampering◦Number of serious complaints: Zero◦Attendance rate of quality training: At least 90%

Maintenance andimprovement of employees’
healthReview of health promotion measures by thehealth promotion committee and mental healthcheckups

Consecutively acquiring White 500 certification

Acquired White 500 certification for six consecutive
years from FY2016◦Promotion of measures against lifestyle-related diseases◦Implementation of mental health measures◦Awareness activities for employees on maintaining their health◦Promotion of female’s healthCreation of a comfortableworkplace

Promotion of work-life balance, measuresagainst harassment, and support for childcare
and family care

Ratio of taking annual leave: 80% or higher

76%◦Promotion of work-life balance◦Implementation of measures against harassment◦Support for childcare and nursing care, encouraging male employees to take parental
leaves◦Utilization rate for annual paid leaves: At least 80%

Strengthening of Personnel retention andNissan Chemical’s trainings
business base

Provision of educations and capability trainings,
and introduction of overseas study program

Job training time per employee: 10% morethan in FY2017

9 hours of training (11 hours in FY2017)◦Introduction of a new personnel system (role grading system)◦Strengthening of career development◦Enhancement of self-development support programs◦Positive response rate in survey of employee attitude on humanresources development: At least 65%

Promotion of diversity

Promotion of active participation of females, hiring foreign students and people with disabilities

Proportion of females in the regular position: 10%

11.1%◦Promotion of active participation of females◦Recruitment of international students◦Promotion of employment of persons with disabilities◦Proportion of females in the regular position: At least 13%◦Proportion of female researchers in the regular position: At least18%

Promotion of fair-trading

Implementation of internal training on the “Actagainst Delay in Payment of Subcontract Proceeds, etc. to Subcontractors” and the insider
trading regulations

Holding consultation meetings with Legal
Office throughout the Group by FY2021

100% (Implemented at all business sites including
offices)◦Holding in-house training sessions, and conduction of other educational and awarenessactivities◦Conduction of educational and awareness activities for compliance◦Zero violations of antitrust laws
◦Zero bribery of foreign public officials

Promotion of CSR
procurement

Conduction of assessment and audits of supplierson CSR

CSR questionnaire survey coverage: 90% (interms of monetary amount)

92.2%

Promotion of sustainableprocurement

Continuous
improvement ofresponsible care
activities-◦Rate of employees within appropriate weight*: At least 70%*BMI (body mass index): 18.5 to 25.0

◦Provision of feedbacks on results of sustainable procurement survey◦Provision of supports in improvement for suppliers that do not meet the Company’s standards◦Provision rate of supports in improvement for suppliers that do
not meet the Company’s standards: At least 90%

Adaptation to climatechangeFormulation of BCPs to prepare for the plants’ inability to operate due to natural disasters

Formulating BCP where products accountfor 50% of ordinary income

Formulated BCP where products account for 76%
of ordinary income◦Maintaining and improving the resilience of business activities in the event of natural disasters◦Update and maintenance of BCPs for products that account for
50% of ordinary income

Mitigation of climatechangeEnergy saving through equipment improvement
and fuel conversion that leads to GHG emissions
reduction◦G HG emissions: Reducing by 20% from
FY2013 level◦Energy consumption rate: Improving by
20% from FY2013 level◦GHG emissions: Reduced by 25% from FY2013
level◦E nergy consumption rate: Improved by 19%
from FY2013 level◦GHG emissions reduction◦GHG emissions: Reducing by at least 30% from FY2018 level

Promotion of occupational
health and safety

Establishment of an occupational safety management system and execution of capital investment
in safety

Achieving zero accident requiring staff time
off from work

One accident occurred requiring staff time off fromwork

◦Strengthening of occupational safety management◦Zero accidents requiring staff time off from work
◦Number of occupational accidents: Reducing by half compared to
FY2020

Biodiversity conservation

Operation of Bio-Park and support for the NPO“Kurohama-numa Shuhen no Shizen wo Taisetsu
ni Suru Kai”

Achieving 100% initiative for prefectures inwhich our Head Office, plants, and laboratories are located83%◦Promotion of biodiversity conservation activities◦Establishment and operation of Bio-Parks at Nissan Chemical’splantsManagement of chemical
substances

Minimization of negative impacts on humanhealth and the environment throughout the life
cycle of chemical products

Creating safety summaries of chemical substances of products that account for 90% of
our total production

90%◦Compliance with laws and regulations regarding the use of chemical substances◦Continuation of zero serious violations of laws and regulations

Reduction of industrial
waste and pollutant
emissions

Reduction of the amount of waste for final disposal volume by reusing and recycling waste andchanging intermediate process methods◦Recycling rate: 99.5% or more◦Exhaust gas (SOx + NOx) emissions: Reducing by 75% from FY2013 level◦Recycling rate: 97.2%*◦Exhaust gas (SOx+NOx) emissions: Reduced by
73% from FY2013 level◦Reduction of industrial waste and pollutant emissions for final disposal◦Reduction in final disposal ratio at Nissan Chemical’s plants (compared to FY2020)◦Strengthening of the management of safety and disaster prevention◦Zero fires, explosions and chemical spills◦Zero safety accidents

Safety and disasterprevention* Waste soil from Toyama Plant was added to the calculation for FY2021-

Nissan Chemical Corporation

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Nissan Chemical Corporation

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Integrated Report 2022

Relation with SDGs

Profile

Value Creation & Growth Strategies

Sustainability

Corporate DataManagement Capital
Relationship to Value Creation

Human
CapitalThe Companyʼs growth as a “future-creating company” andits contribution to society is based on the fact that a wide
range of human resources challenge for the goal while aiming for their own growth.
Therefore, we are working to develop an organizational
culture where a wide range of human resources can enjoy
challenges in an innovative manner in cooperation while
promoting various initiatives such as enhancement of educational systems and active participation of females.

Features⚫ We have a personnel structure that focuses on R&D, withapproximately 40% of all regular position employees being R&D personnel (non-consolidated basis).
⚫ We conduct surveys on employee engagement (enthusiasm and attitude toward work) using employee questionnaires prepared by an external specialist company, and
28 indicators were determined based on questions related to “spontaneous action” and “positive emotions”, etc.,
to measure the level of engagement.

Personnel allocation (Regular Position)
March 2022, non-consolidated basis

R&D personnel

0.0

2017

(%)

2018

10.5

16.2
11.1

2019

2020

2021 (FY)

Related Information⚫ Our operating margin has remained above 10% for 19 consecutive years. This is the result of our focus on high value-added businesses and our sales-to-R&D expenses ratio, which is consistently among the highest in thechemical manufacturing industry.

0

Relationship to Value Creation

8.7

8.3

7.9

7.7

2017

2018

2019

2020

2021

7.8

Total payout ratio

Related Information

2022 (FY)
forecast

Features

Financial capital is essential for conducting business activities. Equity ratio is over 70% and financial stability is well secured. We are in a very favorable state in terms of cash flow
and can continue to utilize this cash for investment andshareholder returns as needed.

Features10
8.9⚫ In regard to capital efficiency, ROE is given importanceand has continued to rise since being recorded at 9.5% in
FY2011.
⚫ The total shareholder payout ratio has been at a high level, hovering around 70% since FY2015.
⚫ Our proactive approach to returning profits to shareholders, which combines dividends and share repurchase, has
attracted long-term capital investment and contributed tothe enhancement of shareholdersʼ equity.

Relationship to Value Creation

NaturalCapital

Nissan Chemical

72

75

76

71.0

73.0

73.7

74.9

10.00

73.6

0.00

40.0
Related Information

0

Related Information

2017

2018

2019

2020

2021 (FY)

0

(%)

2017

Message from the CFO P43-46, Financial Review P83-94

Nissan Chemical Corporation

23

Integrated Report 2022

2018

2019

2020

2021 (FY)General chemical manufacturers (average)(tons / million yen)

5.00

8.45

8.69

2.33

2.04

1.96

2.03

2018

2019

2020

2021 (FY)

8.15

7.53

2.58
2017

［Number of briefings held ]・Dialogue with institutional investors: 297
・Dialogue with analysts: 45
・Dialogue with individual investors: 3
・ESG related dialogues: 4⚫ Our groupʼs sites as foundation to social contribution, as acorporate citizen, we are engaged in a variety of social contribution activities, focusing on the following four areas:
promotion of education, science, and culture; contributions to local communities;
conservation of the global
environment; and promotionof health and welfare andFujimae-Higata Clean-up
promotion of sports.
Activities

Features

In manufacturing products, it is difficult to avoid placing burdens
on the environment, such as the use of energy, water and raw
materials as well as the emission of greenhouse gases (GHG).
Under the Responsible Care Mid-Term Plan, which includes the target of reducing GHG emissions by at least 30%
from FY2018 level by FY2027, we are striving to reduce ourenvironmental impact through responsible care activities
that consider the environment, health, and safety.
Carbon efficiency (GHG emission rate)

80.0
75

40

(%)

Contribution to Communities and Society
https://www.nissanchem.co.jp/eng/csr_info/communication/community.html
Biodiversity Conservation
https://www.nissanchem.co.jp/eng/csr_info/responsible_care/conservation.html

Equity ratio

80
71

The relationships of trust that we have cultivated over a long
period of time with a variety of stakeholders, including investors, local communities and NPO/NGOs, form the basis forsupporting our business activities.

⚫ We have made opportunities for dialogues with stakeholders such as institutional investors and analysts as muchas possible, and actively explained about and exchanged
opinions on mid- to long-term growth strategies, efforts
to solve social issues, etc.

Sales-to-R&D expenses ratio(%)

Research and Development P61-62

SocialCapital⚫ The Toyama Plant (Toyama Prefecture) has developed
into one of Japanʼs leading integrated ammonia chemicalplants, backed by abundant water and electricity, and is
still manufacturing many derivatives. In recent years, theplant has also made inroads into the field of electronicmaterials, contributing greatly to the advancement of the
global semiconductor industry and IT technology. The
plant has a research function, which enables us to respond quickly to next-generation needs.
⚫ Facing the Port of Nagoya, the Nagoya Plant (Aichi Prefecture) has developed mainly through the production of sulfuric acid, and has developed products ranging from industrial
use to high-grade products for semiconductor cleaning in response to the needs of the times. Currently, the plant also
produces sodium bisulfite, AdBlue®, and other products.
⚫ The Onoda Plant (Yamaguchi Prefecture) has a history of
more than 130 years, having produced Japanʼs first agrochemicals in 1910. It currently produces agrochemicals
such as insecticides, acaricides, and herbicides, as well as
pharmaceuticals such as hyperlipidemia treatments, veterinary drugs, and organic fine chemical products.

Corporate Information P95-98

Relationship to Value Creation

FeaturesResearch and development is the driving force behind thecreation of new technologies and products.
We will continue to challenge ourselves to create completely new technologies and products by acquiring newtechnologies of “Microbial Control” and “Information Science”, in addition to the five existing core technologies: “Fine
Organic Synthesis”, “Functional Polymer Design”, “Ultrafine
Particle Control”, “Biological Evaluation”, and “Optical Control”.

5

Financial
Capital

10.4

17.0

Human Resources Strategies P63-65
Personnel Retention and Trainings https://www.nissanchem.co.jp/eng/csr_info/communication/employee/system.html
Promotion of Diversity https://www.nissanchem.co.jp/eng/csr_info/communication/employee/respect.html
Maintenance and improvement of employees’ health https://www.nissanchem.co.jp/eng/csr_info/communication/employee/workplace.html
Creation of a Comfortable Workplace https://www.nissanchem.co.jp/eng/csr_info/communication/employee/dialogue.html

Relationship to Value Creation

Related Information

Features

5.0
Manufacturing and TechnicalDevelopment personnel

Intellectual
Capital

14.9

10.6

10.5

10.0

18%
Related Information

15.2

15.1

15.0

Our plants are located in five prefectures in Japan, and while
the stone-built facilities, which have been designated as achemical heritage, still remain, state-of-the-art equipment
and facilities are being steadily introduced.
With a history of over 130 years, we are still moving forward focused on the stable manufacture of products.

⚫ The Sodegaura Plant (Chiba Prefecture) is a “development-oriented plant” that works closely with researchlaboratories. It is the core plant of our Specialty Chemicals business, which engages in technology development
and production of inorganic materials and display materials used in a wide range of fields, including the information and electronics industries.
⚫ The Saitama Plant (Saitama Prefecture), located in therich natural environment of northwestern Saitama Prefecture, produces herbicides for paddy rice, insecticides
and fungicides, and contributes to agriculture in Japanand around the world.

■Nissan Chemical ■Competitors (average) (all industries)

20.0

39%

30%

Manufacturing
CapitalRatio of high engagement level employee

Management division

13%
Sales and Marketing
personnel

Relationship to Value Creation⚫ The Companyʼs carbon efficiency (GHG emission rate) isrelatively high in the chemical industry due to the low-carbon investments it has made to date and the characteristics of its products, including the conversion of fuel fromheavy oil to natural gas at the Toyama Plant and the useof hydroelectric power generation by Toyama Kyodo Jikahatsuden Co., Ltd. established through investment bycompanies in the prefecture including us.
⚫ We recognize that the growing demand from investors
and other parties for initiativ es to addr ess climatechange will become a tailwind.
Miza Power Station

Responsible Care P67-69
Responsible Care Management https://www.nissanchem.co.jp/eng/csr_info/responsible_care/management.html
Mitigation of Climate Change https://www.nissanchem.co.jp/eng/csr_info/responsible_care/environment/reduction.html
Reduction of Industrial Waste and Pollutant Emissions https://www.nissanchem.co.jp/eng/csr_info/responsible_care/environment/management.html
Management of Chemical Substances https://www.nissanchem.co.jp/eng/csr_info/responsible_care/chemical.html
Water Resources Conservation https://www.nissanchem.co.jp/eng/csr_info/responsible_care/environment/effective.html
Biodiversity Conservation https://www.nissanchem.co.jp/eng/csr_info/responsible_care/conservation.html

Nissan Chemical Corporation

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Integrated Report 2022

Profile

Corporate Governance
Based on our culture of “integrity” and “transparency”, we have strengthened our governance system in line with thechanging times. We have implemented various efforts, including the appointment of female directors, the publication of askills matrix for directors, the linking of officers’ remuneration to ESG indicators, and the establishment of the Climate
Change Committee. We will continue to strengthen our governance in the future as well.
General Meeting of Shareholders
ReportAccounting Auditor

Accounting
Audit

Nomination andRemuneration Advisory
Committee

Board of Directors
AdviceFour out of the ten directors
are outside directors

Audit

Audit & Supervisory Board

ReportSustainability Promotion
Committee

Chairman (CEO)President (COO)

Environment, Safety & Quality
Assurance Committee

ReportManagement Meeting

Climate Change Committee
Risk Management &Compliance Committee

ReportEach Division/
Department
Group Companies

Internal Audit Department

Nissan Chemical Corporation

FY2018FY2019FY2020People666● Accounting Audit
We have appointed the Yaesu Audit Company as our accounting
auditor. They audit at the end of each fiscal year, and during the
fiscal year as necessary.
● Internal Audit
We have the Internal Audit Department, which conducts fair andindependent internal audits of our group. The results of internal
audits are reported to the Representative Director, President &COO, managing executive officers, and the Board of Directors. In
addition, the department shares information with the accounting
auditors and Audit & Supervisory Board, and collaborates withthem by mainly exchanging opinions.

Integrated Report 2022

FY2021
6

Outside directors (Independent)

People

2 (2)

3 (3)

3 (3)

4（4 ）

Total

10

People899Ratio of Independent Outside Directors*1

%

25

33

33

40

Ratio of female directors*1

%

0

0

0

10

Number of executive directors*1

People6

6

6

6

Average terms of positions held*1

Years

6.5

6.7

5.2

5.1

Meetings of the Board of Directors*2

Times

12

12

11

12

％

100

99.0

96.0

99.2

％

97.9

100

100

100

Attendance of directors at meetings of the Board of Directors*2
Attendance of Audit & Supervisory Board members at meetings of the Board of Directors *2

quired for its directors (skills requirements): “corporate management”, “research and development/technologies”, “financeand accounting”, “legal/risk management/internal control”,“personnel affairs/personnel strategies”, and “global experience”. And the Company makes the board consist of appropriate
persons as its directors, who have met the above-skills requirements appropriately, and who are healthy, physically and mentally, and trusted and respected for their excellent characters, ahigh level of insight, and a sense of ethics.
We will review the above skills requirements as necessary
based on the management strategy and relevant policies.

The Company considers the board to be formed by members selected from various viewpoints to make appropriate and expeditious decision-making and oversee the execution of business activities in diverse fields (including chemicals, performancematerials, agricultural chemicals, and pharmaceuticals). Thosepoints include the balance of knowledge, experience, skills, andother capacity and diversity, including gender, internationality,and practical experience in totality of the board.
To ensure a well-balanced and diverse board composition,
based on the company philosophy and management strategy,
the Company has identified the expertness and experience re-

The expertness and experience required for the Companyʼs directors

Director

Corporate
Management

R&D/
Technologies *KINOSHITA Kojiro
YAGI Shinsuke
Director, Senior Executive Vice President
HONDA Takashi
Director, Senior Managing Executive Officer ISHIKAWA Motoaki◎◎◎

Representative Director, Chairman

Representative Director, President

Director, Managing Executive Officer
Director, Managing Executive Officer
Outside Director
Outside Director
Outside Director

25

Unit

Inside directors

View on the Appropriate Balance between Knowledge, Experience and Skills of the Board, and on Diversity

Audit● Nomination and Remuneration Advisory Committee
We established a Nomination and Remuneration Advisory Committee mostly consisting of independent outside directors underthe Board of Directors for the purpose of strengthening theBoard of Directorsʼ independence, objectivity, and accountability
in relation to matters such as the nomination and remunerationof directors and further strengthening corporate governance.
The Nomination and Remuneration Advisory Committee convened 11 times in FY2021. It deliberated matters, such as appointment of candidates as directors and Audit & Supervisory
Board members and management executives, succession plans
for management executives, and remuneration for directors in
response to consultation from the Board of Directors, and reported the content of their deliberations to the Board of Directors.

● Audit & Supervisory Board
We have established the Audit & Supervisory Board. In accordance with auditing plans formulated by the Audit & Supervisory
Board with a majority that consists of independent outside members, the Audit & Supervisory Board members audit the execution of directorsʼ operation by participating in the Board of Directors and other important meetings, and by regularly visiting

audit assistants from our employees to respond to the requests
from them. To enable Audit & Supervisory Board to fulfill theirduties efficiently and smoothly, the audit assistants serve as coordinators for holding hearings pertaining to divisions, etc., Audit & Supervisory Board and other meetings, help conduct audits, and collect information.

*1 Data is as of after the General Meeting of Shareholders held in June of each fiscal year. * 2 Data from April to March of each fiscal year

each division/department of the Head Office and plant/laboratory to exchange opinions.

● Board of Directors
Our Board of Directors members meet monthly in principle, toresolve important management matters. It also supervises theexecution of operations by directors and executive officers. We
ensure that important management matters are determinedthrough careful deliberations at the Board of Directors or management meetings in our efforts to eliminate or reduce businessrisks. In addition, the details of decisions made at the management meetings and the results of business executions based on
decisions made at the Board of Directors, etc. are reported to theBoard of Directors to enhance the supervising function of theBoard of Directors. We strive to ensure and improve effectiveness in execution of roles and responsibilities of the Board of Directors by conducting the effectiveness evaluation on the overall Board of Directors every year.

Directors*1

Corporate Data

Scope of reporting

Audit* Numbers pertain to officers appointed during the 152ndGeneral Meeting of Shareholders held on June 28, 2022.

● Execution and Supervision of Operations
By introducing a system with executive officers, we clarify the
managementʼs function of prompt decision-making and supervision and the function of executing operations, thereby strengthening both. We also strive to improve managementʼs capabilities
to develop and execute our management strategies. In addition,
we have set a one-year term for each director and executive officer, thereby clarifying the management responsibility and the
responsibility for executing operations.

Sustainability● Support for Outside Directors and Outside Audit &Supervisory Board Members
The Corporate Planning Department supports outside directors
by providing them with explanations of the contents of the agenda and other matters to be discussed at the Board of Directors inadvance and also provides management information necessary
for growth strategies, enhancement of governance, etc. For outside Audit & Supervisory Board members, we have appointed
Indicator

Three out of the four members are outside
Audit & Supervisory Board members

Cooperate(Business execution framework)

Value Creation & Growth Strategies

Outside Director

MATSUOKA Takeshi
DAIMON Hideki
OHE Tadashi
OBAYASHI Hidehito
KATAOKA Kazunori
NAKAGAWA Miyuki

Finance &Accounting

◎

◎
◎
◎
◎

◎
◎

◎
◎

◎
◎

◎
◎

Legal/Risk Management/ Personnel Affairs/
Internal Control
Personnel Strategies◎◎

GlobalExperience

◎
◎

◎
◎
◎
◎

◎

◎
◎
◎
◎

◎
◎
◎
◎

* “R&D/Technologies” include the expertness and practical experience in the fields of IT, DX (Digital Transformation), environmental safety, and quality assurance.

Policy and Procedures in the Nomination of Officer Candidates
Proposal of nomination of director and Audit & Supervisory
Board member candidates are explained in advance to independent outside directors. After receiving proper guidance fromthem, the proposal is finalized by the Board of Directors throughdeliberation/reporting by the Nomination and Remuneration Advisory Committee and submit to the General Meeting of Shareholders. In addition, nominations of Audit & Supervisory Board
member candidates are approved by the Audit & Supervisory
Board in advance.

Nissan Chemical Corporation

PolicyDirector

Audit &
Supervisory
Board
Members26<Inside Directors>
People who have expertise, knowledge and other capacities in eachbusiness field such as corporate planning, personnel, finance & accounting, research and development, production technology, environment, safety & quality assurance and others.
<Outside Directors>
People who are capable of giving opinions proactively, raising questions and giving advice on growth strategies, the enhancement ofgovernance and other issues from the viewpoints of various stakeholders and society.
People with experience and knowledge in a wide range of fields including finance, accounting, and law who are capable of giving opinions and advice to the management from a fair and neutral standpoint, in addition to auditing the execution of operations.

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Corporate Governance
Officersʼ Remuneration

Effectiveness Evaluation of Boards

The fundamental principle in directorsʼ remuneration is to maintain its system that is in line with management policy by ensuringthat directors contribute to increasing operating performance on
a continual basis over the mid- to long-term and toward increasing the overall value of the Group, thereby meeting shareholder
expectations. At the same time, the basic policy (Policies on determining details of remuneration, etc. for individual Directors) is to
set remuneration at an appropriate level, taking into account suchfactors as the management environment, operating performanceand consistency with the treatment of employees.
The remuneration system for directors consists of monetary
remuneration (base remuneration and performance-related remuneration) and performance-linked stock compensation. However, the outside directorsʼ remuneration package shall consistof only the base remuneration as a monetary payment. In thelight of their roles and independence from the Company, theirremuneration package does not contain the performance-related remuneration as monetar y payment nor the per for mance-linked stock compensation.
Regarding performance-linked stock compensation, we haveadopted in FY2019, with the aim of increasing awareness about
improving earning over the mid- to long-term and contributing toenhancing corporate value by clarifying the link between the Companyʼs performance and its stock price, and by having directors
share with the shareholders not only the benefits of increases inthe stock price, but also the risk of decreases in the stock price.
Excluding performance-linked stock compensation, the remunerations of individual directors are determined at the Boardof Directors after deliberations of the Nomination and Remuneration Advisory Committee mostly consisting of independent outside directors as well as within the total amount determined byresolution of the General Meeting of Shareholders. The remunerations of individual Audit & Supervisory Board members are determined through discussions among Audit & Supervisory Board
members.

tors. Those indicators consist of the profit indicators for the previous fiscal year (the net income attributable to owners of parent,
EBITDA, and the like) and ESG indicators (the third-party evaluation result, the reduction of GHG emissions, and the like).
ESG initiatives are an important management issue that is indispensable for the sustainable growth of the Company. In orderto further improve the effectiveness of sustainable management,
we decided to link it with remuneration.

Overview of Performance-linked Stock Compensation Plan
The Company grants its directors points based on its net income
attributable to owners of parent (average rate of change over thelast three years), EBITDA (average rate of change over the last
three years), ROE (actual result for the current fiscal year), andcomparison of rates of year-on-year volatility with respect to theCompanyʼs stock price and TOPIX. Each fiscal year, the Company
determines whether the points are to be granted or not and thenumber of points to be granted. Upon their retirement, directors
are to be paid performance-linked stock compensation equivalent
to their accumulated points. (For details on how to calculate performance-linked stock compensation plan amounts, etc., pleaserefer to P42 “Compensation, etc. for Officers” of the 152nd Securities Report.)

Performance Evaluation Coefficient(Mid- to long-term net income attributable to owners ofparent coefficient ×30%) + (Mid- to long-term EBITDA
coefficient ×30%) + (ROE coefficient x 30%) + (the Company
stock price and TOPIX year-on-year volatility comparison
coefficient × 10%)

If a director subject to performance-linked stock compensation is
dismissed through the General Meeting of Shareholders or the
Boardof Directors during the period until retirement (excluding
Overview of performance-related remuneration
dismissal when the director concerned is appointed as an Audit &We establish the base amount for each title and determine the anSupervisory Board member), commits any illegal act during tennual amount according to the fluctuation of performance indicaure and retires, commits any inappropriate act that causes damage to the Company during tenure,or if the director is found to have vi● Composition of Officers’ Remuneration*olated laws, regulations, articles ofincorporation, or internal rules, etc.,
Performance-related
the director will be unable to acBase remuneration 65%
remuneration 28%
quire the right to receive performance-linked stock compensation.
Remunerationin stock 7%

Profit-linked
portion[Evaluation Indicators]

90%●Net income attributable to owners ofparent●EBITDA

ESG-linked
portion10%[Evaluation Indicators]●ESG evaluation by third-party
organizations●Rate of reduction of GHG emissions
GHG emissions in FY2027:
Reduce by at least 30% compared to
FY2018

Nissan Chemical Corporation

Nissan Chemical believes that the primary roles and responsibilities of the Companyʼs Board of Directors are defined as: (1) establishing a strategy for achieving sustainable growth and increase in corporate value over the mid- to long-term, andfacilitating the execution of the foregoing; (2) establishing an environment that supports risk-taking by the management, including the internal control system and the risk management system; (3) strengthening the swift management decision-making,and oversight function and the execution function through clarification of both functions; and (4) further enhancing managementtransparency, soundness and objectivity through, among otherefforts, appointment of outside officers who monitor and oversee the management from external viewpoints, and the Company performs analysis and evaluation (the “Effectiveness Evaluation”) every year to see if the Board of Directors has fulfilled
these roles and responsibilities. The Company started performing the Effectiveness Evaluation in FY2015, and carries out athird-party evaluation every several years using an external organization that holds no relationships of interest with the Company in order to ensure neutrality and objectivity. The effectiveness evaluation in FY2020 was conducted in the form of thethird-party evaluation, and it was conducted in the form of aself-evaluation by the Companyʼs Board of Directors in FY2021.

2) When discussing on mid- to long-term issues, the Board of Directors facilitates a debate about the Companyʼs sustainability, relating to its management strategies and from the viewpoints of risks and opportunities.
3) To consider how to set appropriate agenda to enable theBoard of Directors to focus on the discussion on material matters over the mid- to long-term.
4) To make further efforts to deepen outside directorsʼ understandings of the Company business and management strategies and to use opportunities for briefings and discussions
other than the Board of Directors.
5) To discuss at the Nomination and Remuneration Advisory
Committee about the Board of Directors itself.
6) To discuss at the Nomination and Remuneration Advisory
Committee how to share the information with the Board of Directors.

Effectiveness Evaluation Result for FY2021
As a result of the Effectiveness Evaluation for FY2021, it was concluded that the Companyʼs Board of Directors was generally operating appropriately overall from the perspective of carryingout its principle roles and responsibilities, and that the effectiveness of the Board of Directors was ensured as improvement
measures were taken with regard to issues identified in the Effectiveness Evaluation for FY2020.

Evaluation Procedure
The evaluation procedure is in the form of a questionnaire answered by all directors and Audit & Supervisory Board members
to grasp the current status and identify issues from two perspectives, quantitative evaluation and qualitative evaluation, througha combination of five-grade evaluation and free writing. An external organization is contracted to collect the responses and collate the data in order to ensure anonymity, which enhances theself-evaluation.
During the self-evaluation conducted in FY2021, based on
the results of the questionnaire responses, an opinion-exchange
meeting was held in March 2022 (with all independent Officers (4outside directors and 3 outside Audit & Supervisory Board members (including 2 full-time Audit & Supervisory Board members)), the Chairman, President, and Senior Executive Vice President) to discuss issues and responses and conduct analysis andevaluation. The results of the analysis and the evaluation werediscussed and confirmed at the Board of Directors held in May
2022.

Points of Future Improvement
Through the discussion that was conducted this time, we recognized the following issues to address for further enhancing theeffectiveness of the Board of Directors and determined to workon improvements.
1) To consider how to share the status of deliberations at theNomination and Remuneration Advisory Committee with theBoard of Directors.
2) To consider how to set and sort out appropriate agenda andstreamline the process to administer the Board of Directors toenable its members to focus on the matters requiring resolution and spend enough time deliberating them.
By enabling deeper discussion in the Board of Directors
based on the recent evaluation result and continuing to implement measures to improve the effectiveness of the Board of Directors, the Company will ascertain the status of improvement
on a regular basis through the Effectiveness Evaluation and further enhance the effectiveness of the Board of Directors in an effort to achieve sustainable growth and increase in corporate value.

Issues Identified in the Effectiveness Evaluation for FY2020
1) To promote deeper discussions at the Board of Directors withregard to the Companyʼs directions, strategies, business portfolio, development of new business fields, and risks. When discussing on the mid- and long-term directions, the Board of Dir e c to r s p r o v id e s i t s m e mb er s w i t h a fo r um fo r “ f r e e
discussion” to exchange their opinions from various viewpoints.

* The ratio of the portions of the composition
varies according to the Company’s performance

27

Integrated Report 2022

Nissan Chemical Corporation

28

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Corporate Governance
Newly-appointed Officers* Officers appointed during the 152nd General Meeting of Shareholders held on June 28, 2022.

KINOSHITA Kojiro

Attendance at meetings of the Board of Directors(Representative Director, Chairman & CEO)

Reason for appointment

1977 Joined the Company
2002 Director, Head of Corporate Planning Department
2006 M anaging Director, Head of Corporate Planning Department
2008 Representative Director, President & CEO
2021 Representative Director, Chairman & CEO (to the present)

Mr. KINOSHITA served as General Manager of the Business Strategy Department, Chemicals General Headquarters and also as Head of the Corporate Planning Department. In addition, as President & CEO of the Company sinceJune 2008, and as Chairman & CEO since April 2021, he has
been promoting strategies to enhance the corporate valueof the Company group. Considering his wide-ranging experience, achievements, and insights, the Company judgesthat Mr. KINOSHITA is qualified to be a director that performs decision-making on business operations and oversees the execution of duties by directors.

11/12

YAGI Shinsuke

Reason for appointment(Representative Director, President & COO)
1985 Joined the Company
2013 Deputy Plant Manager of Onoda Plant
2016 Executive Officer, Plant Manager of Sodegaura Plant
2018 M anaging Executive Officer, Head of Production Technology
Department
2020 S enior Managing Executive Officer, Head of Production
Technology Department
Director, Senior Managing Executive Officer, Head of Production
Technology Department
2021 Representative Director, President & COO (to the present)

Attendance at meetings of the Board of Directors

12/12

HONDA Takashi

Attendance at meetings of the Board of Directors

Mr. YAGI has been engaged in production technology formany years, and served as the Deputy Plant Manager of the
Onoda Plant and the Plant Manager of the Sodegaura Plant.
He has been contributing to the improvement of production
systems for the Company groupʼs products and to their stable supply. In addition, as President & COO of the Company
since April 2021, he has been promoting strategies to enhance the corporate value of the Company group. Considering his wide-ranging experience, achievements, andinsights, the Company judges that Mr. YAGI is qualified to bea director that performs decision-making on business operations and oversees the execution of duties by directors.

(Director, Senior Executive Vice President)

Reason for appointment

1981 Joined the Company
2012 G eneral Manager of Planning & Development Department,
Agricultural Chemicals Division2014 E xecutive Officer, Deputy Head of Agricultural Chemicals Division,
General Manager of Planning & Development Department,
Agricultural Chemicals Division2017 M anaging Executive Officer, Head of Agricultural Chemicals
Division
Director, Managing Executive Officer, Head of Agricultural
Chemicals Division
2021 D irector, Senior Managing Executive Officer, Head of Agricultural
Chemicals Division
2022 Director, Senior Executive Vice President (to the present)

Mr. HONDA has been engaged in the agricultural chemicals
business focused on agricultural chemicals development
and business development for many years. He served as
General Manager of the Planning & Development Department and as a Division Head, and since April 2022, he has
not only been leading the agricultural chemicals businessbut also managing all of the Companyʼs life science business and research. Considering his wide-ranging experience, achievements, and insights, the Company judges thatMr. HONDA is qualified to be a director that performs decision-making on business operations and oversees the execution of duties by directors.

12/12

Nissan Chemical Corporation

29

Integrated Report 2022

ISHIKAWA Motoaki

New(Director, Senior Managing Executive Officer)

Reason for appointment

1986 J oined the Company
2009 G eneral Manager of Display Materials Department, Electronic
Materials Division2012 G eneral Manager of Display Materials Research Department,
Electronic Materials Research Laboratories
2015 G eneral Manager of Business Strategy Department, Performance
Materials Division2016 E xecutive Officer, Deputy Head of Performance Materials
Division, General Manager of Business Strategy Department,
Performance Materials Division2020 M anaging Executive Officer, Head of Performance Materials
Division
2022 S enior Managing Executive Officer, Head of Performance
Materials Division
Director, Senior Managing Executive Officer, Head of
Performance Materials Division (to the present)

Mr. ISHIKAWA has been engaged in the performance materials business focused on display materials for many
years. He has served as General Manager of the Business
Strategy Department, a Division Head, and as head of theCompanyʼs overseas business locations, and since April
2022, he has been managing all of the Companyʼs performance materials business and research, which is a driverof the Company groupʼs growth. The Company judges that
Mr. ISHIKAWA is qualified to be a director that performs
decision-making on business operations and oversees theexecution of duties by directors.

MATSUOKA Takeshi

New(Director, Managing Executive Officer)

Reason for appointment

1996 Joined the Company
2017 G eneral Manager of CSR & Public Relations Office, Corporate
Planning Department
2019 Executive Officer, Head of Internal Audit Department
2021 Executive Officer, Head of Chemicals Division
2022 M anaging Executive Officer, Head of Corporate Planning
Department
Director, Managing Executive Officer, Head of Corporate Planning
Department (to the present)

Mr. MATSUOKA joined the Company with wide-ranging
business and planning experience in the chemicals industry. He has been involved in formulating major strategies
not only in the Chemicals Division, but also in operational
divisions including the Corporate Planning Department,
CSR & Public Relations Office, and Internal Audit Department. Since April 2022, he has been focusing on assessing
the status of operations across the entire Company andachieving group-wide targets as Head of the Corporate
Planning Department. The Company judges that Mr. MATSUOKA is qualified to be a director that performs decision-making on business operations and oversees the execution of duties by directors.

DAIMON Hideki

New(Director, Managing Executive Officer)

Reason for appointment

1988 J oined the Industrial Bank of Japan, Ltd. (current Mizuho Bank,
Ltd.)
2014 G eneral Manager of Trust Business Department IV of Mizuho
Trust & Banking Co., Ltd.
2016 E xecutive Officer, General Manager of Corporate & Institutional
Coordination Department of Mizuho Trust & Banking Co., Ltd.
2018 M anaging Executive Officer in charge of Trust & Banking ofMizuho Trust & Banking Co., Ltd.
2020 E xecutive Officer, Head of Finance & Accounting Department of
the Company
2022 M anaging Executive Officer, Head of Sustainability Promotion &IR Department
Director, Managing Executive Officer, Head of Sustainability
Promotion & IR Department (to the present)

Mr. DAIMON has leveraged his abundant experience andwide-ranging insight cultivated at financial institutions inJapan and overseas to formulate financial strategy and actively lead IR activities since joining the Company as the
Head of the Finance & Accounting Department in April
2020. Since April 2022, he has continued to make a significant contribution to enhancing the Companyʼs corporate
value as the Head of the Sustainability Promotion & IR Department. The Company judges that Mr. DAIMON is qualified to be a director that performs decision-making on
business operations and oversees the execution of duties
by directors.

Nissan Chemical Corporation

30

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Corporate Governance
OHE Tadashi

Outside1969 Qualified for attorney-at-law
1989 Instructor for the Legal Training and Research Institute of Japan (court
representation in civil proceedings)
1994 Outside Corporate Auditor of Canon Inc.
2004 Outside Corporate Auditor of Marui Group Co., Ltd.
2006 Outside Corporate Auditor of Kao Corporation2011 Outside Director of JECO Co., Ltd.

2015 Outside Director of the Company (to the present)

Attendance at meetings of the Board of Directors

12/12

OBAYASHI Hidehito

Attendance at meetings of the Board of Directors

12/12

Attendance at meetings of the Board of Directors

12/12

1969 Joined Hitachi, Ltd.
2001 D irector of Hitachi High-Technologies Corporation (current Hitachi
High-Tech Corporation)
2003 V ice President and Executive Officer of Hitachi High-Technologies
Corporation
2006 R epresentative Executive Officer, Senior Vice President and Executive
Officer of Hitachi High-Technologies Corporation2007 D irector, Representative Executive Officer, President and Chief
Executive Officer of Hitachi High-Technologies Corporation2011 Chairman of the Board of Hitachi High-Technologies Corporation2013 Consultant of Hitachi High-Technologies Corporation
2015 H onorary Consultant of Hitachi High-Technologies Corporation (to thepresent)
2019 Outside Director of the Company (to the present)

As an experienced manager of a corporate group active in diverse sectors of global business, Mr. OBAYASHI has reflected
his abundant experience and wide-ranging insight in the management of the Company from an outside perspective and froman objective and neutral standpoint. The Company judges that
Mr. OBAYASHI will appropriately perform his duties as outside
director. In addition, he has contributed to the selection of candidates for the Companyʼs directors and the determination of
director compensation, etc., from an independent standpoint asa member of the Nomination and Remuneration Advisory Committee.

Reason for appointment

1979 R esearch Associate of Institute of Biomedical Engineering at Tokyo
Women’s Medical University
1988 A ssociate Professor of Institute of Biomedical Engineering at Tokyo
Women’s Medical University
1994 P rofessor of Faculty of Industrial Science and Technology at Tokyo
University of Science
1998 P rofessor of Graduate School of Engineering at The University of Tokyo
2004 P rofessor of Graduate School of Medicine at The University of Tokyo
2015 D irector General of Innovation Center of NanoMedicine, Kawasaki
Institute of Industrial Promotion (to the present)2016 P roject Professor at The University of Tokyo
Professor Emeritus at The University of Tokyo (to the present)
Deputy Chairman of Kawasaki Institute of Industrial Promotion (to thepresent)
2020 O utside Director of the Company (to the present)
Outside Director of NanoCarrier Co., Ltd. (to the present)

As doctor of engineering, Mr. KATAOKA has reflected his expertise, abundant experience, and wide-ranging knowledge in the
management of the Company from an outside perspective andfrom an objective and neutral standpoint. The Company judgesthat Mr. KATAOKA will appropriately perform his duties as outside director. In addition, he has contributed to the selection ofcandidates for the Companyʼs directors and the determinationof director compensation, etc., from an independent standpoint
as a member of the Nomination and Remuneration Advisory
Committee.

10/10

Attendance at meetings of the Board of Directors

Reason for appointment

1990 Prosecutor, Tokyo District Public Prosecutors Office2008 C ounsellor, Judicial System Department, Minister’s Secretariat,
Ministry of Justice2011 C ounsellor, Cabinet Secretariat, Assistant Chief Cabinet Secretary Office2013 P rosecutor, Tokyo High Public Prosecutors Office
General Manager of General Administration Department, Saitama
District Public Prosecutors Office2015 S pecially Appointed Professor and Public Prosecutor, Chuo Law
School, Chuo University
2019 R etired as Prosecutor
Qualified for attorney-at-law
Professor, Chuo Law School, Chuo University (to the present)
Outside Director of NITTO KOGYO CORPORATION (to the present)
2021 O utside Director of the Company (to the present)
Outside Audit & Supervisory Board Member of FANCL CORPORATION(to the present)
2022 O utside Audit & Supervisory Board Member of Shinsei Bank, Limited (tothe present)

Ms. NAKAGAWA worked for many years as a prosecutor in theTokyo District Public Prosecutors Office and the Tokyo High
Public Prosecutors Office and she has abundant practical experience in legal circles. She has reflected her legal expertise,abundant experience, and wide-ranging insight in the management of the Company from an outside perspective and from an
objective and neutral standpoint. The Company judges that Ms.
NAKAGAWA will appropriately perform her duties as outside
director. In addition, she has contributed to the selection of candidates for the Companyʼs directors and the determination of
director compensation, etc., from an independent standpoint asa member of the Nomination and Remuneration Advisory Committee.

Nissan Chemical Corporation

31

Integrated Report 2022

Mr. SUZUKI has a wide range of knowledge, including extensive experience and finance expertise those are cultivatedthrough many years of business at financial institutions. We
believe that he has reflected his knowledge in our corporate
audit with objective and neutral standpoint, and will continue
to fulfill the duties appropriately.

12/12

Attendance at meetings of the Audit & Supervisory Board 12/12

TAKEMOTO Shuichi

Attendance at meetings of the Board of Directors

12/12

Attendance at meetings of the Audit & Supervisory Board 12/12

Reason for appointment

1982 J oined the Fuji Bank, Limited (current Mizuho Bank, Ltd.)
2002 D eputy General Manager, IT & Systems Control Department of Mizuho
Bank, Ltd.
2004 G eneral Manager, Human Resources Division of Mizuho Information &Research Institute, Inc. (current Mizuho Research & Technologies, Ltd.)
2008 G eneral Manager, Fukuoka Branch of Mizuho Bank, Ltd.
2009 G eneral Manager, IT & Systems Planning Department of Mizuho Trust& Banking Co., Ltd.
2010 E xecutive Officer, IT & Systems Planning Department of Mizuho Trust& Banking Co., Ltd.
2011 Managing Executive Officer of Mizuho Trust & Banking Co., Ltd.
2013 M anaging Executive Officer of Mizuho Trust & Banking Co., Ltd., andManaging Executive Officer of Mizuho Financial Group, Inc.
2014 Deputy President of Mizuho Private Wealth Management Co., Ltd.
2017 A dvisor of Mizuho Trust & Banking Co., Ltd.
Outside Audit & Supervisory Board Member of the Company (to the present)

Mr. TAKEMOTO has a wide range of knowledge, including extensive experience and finance expertise those are cultivatedthrough many years of business at financial institutions. We
believe that he has reflected his knowledge in our corporate
audit with objective and neutral standpoint, and will continue
to fulfill the duties appropriately.

New(Audit & Supervisory Board Member)

Reason for appointment

1987 Joined the Company
2007 G eneral Manager of Pharmaceutical Research Department, Chemical
Research Laboratories
2016 Executive Officer, Head of Pharmaceuticals Division
2021 Executive Officer, Head of Internal Audit Department
2022 Audit & Supervisory Board Member (to the present)

Mr. OHRAI has extensive expertise in the Company groupʼsbusiness based on many years of involvement in researchand development, particularly of pharmaceuticals, and experience serving as the General Manager of the Pharmaceutical
Research Department, Head of the Pharmaceuticals Division,and Head of the Internal Audit Department. Considering his
abundant work experience and specialized knowledge, theCompany judges that Mr. OHRAI is qualified to be an Audit &Supervisory Board member with responsibility for ensuring
the appropriateness of Directorsʼ execution of duties.

KATAYAMA Noriyuki

Attendance at meetings of the Board of Directors

12/12

Attendance at meetings of the Audit & Supervisory Board 12/12

Outside(Audit & Supervisory Board Member)OHRAI KazuhikoOutside(Director)

Reason for appointment

1983 Joined the Norinchukin Bank
2003 G eneral Manager of Naha Branch2008 G eneral Manager of Cooperative Finance & Administration (Kanto
Area) Div.
2010 S econded to Eiraku Co., Ltd. as President (current Norinchukin
Facilities Co., Ltd.)2012 M anaging Director of The Norinchukin Bank
2014 D irector of Nochu Business Support Co., Ltd., and Director of Nochu
Information System Co., Ltd.
2016 O utside Audit & Supervisory Board Member of the Company (to thepresent)

Outside(Director)

Outside(Audit & Supervisory Board Member)

OutsideReason for appointment

NAKAGAWA Miyuki

Attendance at meetings of the Board of Directors

Mr. OHE has been involved in corporate legal affairs and a large
number of cases of corporate litigation over many years as an
attorney-at-law and boasts an outstanding track record in thelegal community. He has reflected his legal expertise, abundant
experience, and wide-ranging insight in the management of theCompany from an outside perspective and from an objective
and neutral standpoint. The Company judges that Mr. OHE willappropriately perform his duties as outside director. In addition, he has contributed to the selection of candidates for theCompanyʼs directors and the determination of director compensation, etc., from an independent standpoint as a memberof the Nomination and Remuneration Advisory Committee.

(Director)

KATAOKA KazunoriSUZUKI Norihiro

Reason for appointment(Director)

Outside(Audit & Supervisory Board Member)

Reason for appointment

1990 Q ualified for attorney-at-law, Joined Nagashima & Ohno (current
Nagashima Ohno & Tsunematsu)
1996 Q ualified for attorney-at-law in New York State, USA
Joined Tokyo City Law & Tax Partners
2003 Joined City-Yuwa Partners (to the present)
2004 S tatutory Auditor of Deutsche Asset Management (Japan) Limited (tothe present)2014 O utside Audit & Supervisory Board Member of the Company (to thepresent)
2017 Supervisory Director of HEIWA REAL ESTATE REIT, Inc. (to the present)2018 Outside Director of Nippon Denkai, Ltd. (to the present)
2019 Outside Corporate Auditor of Livesense Inc. (to the present)
2021 External Statutory Auditor of AIDA ENGINEERING, LTD. (to the present)
2022 Outside Director of create restaurants holdings inc. (to the present)

Mr. KATAYAMA has reflected his extensive experience and expertise as an attorney in Nissan Chemicalʼs audits and has
been involved in the management of several companies as an
outside officer. We believe that he will continue to fulfill theduties appropriately.

Nissan Chemical Corporation

32

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Messages from Outside Officers

Outside Director

Outside Director

Outside Director

Outside Audit & Supervisory Board Member

OBAYASHI Hidehito

KATAOKA Kazunori

NAKAGAWA Miyuki

SUZUKI Norihiro

Solidify the foundation for dynamic
business!

Growth engine created by people withoriginality

Flexible response to an increasingly
diverse and sophisticated society

Prompt and drastic decision-making
is required

In FY2021, following on from the year before last, business activities were conducted under the spread of COVID-19 infections. As
a result of the implementation of various infection prevention
measures and business continuity plans, our business remained
strong and finished with the highest profit.
In FY2021, one of our management priorities was to formulate our new long-term and mid-term business plans, whichstarted this fiscal year. Sharing the companyʼs major management goals through wide-ranging discussions that took place
during the formulation process will be a great strength for Nissan Chemical in the future. Among these, research and development (R&D) continues to be one of our highest priority measuresfor Nissan Chemical. I expect the Company to create new products that drive our growth and develop them early for our competitive advantage by steadily implementing these plans.
As a chemical manufacturer, we need to continue obtaining
the trust of our customers and society. I believe that one of thekeys to fulfilling this social responsibility is safety and health.
We should bear in mind “safety comes first”, not as just a slogan
but as the fundamental for our behaviors in all business sites. I
have seen the sign of improvement in safety by taking measures
such as safety work training for employees, including those of
our group companies, but are only halfway through. I expect theCompany can continue working on these efforts.
The range of the Companyʼs business is expanding both inquality and quantity, such as by developing full-fledged overseas manufacturing bases in multiple countries. I think the Company should develop its business in a dynamic manner, paying
particular attention to its governance in consolidated management, including country risks.

Our value that comes first in our mission statement is to “Contribute to society with excellent technologies and products”. To
that end, it is essential to build a responsible system to supply
society with products already on the market without delay, andto maintain and improve strong research and development(R&D) capabilities to create new products that will create the future society.
In FY2021, the four business divisions demonstrated theirrespective strengths in the difficult situation of under the spreadof COVID-19 infections, and performed solid business activities.
Another notable event in FY2021 was the formulation of the newlong-term and mid-term business plans. As our strong common
understanding in these plans, we aim to strengthen our R&D capabilities that will lead to a new growth engine looking ahead to2030 and even 2050, and to establish a solid structure to support
the R&D capabilities. In our R&D activities, we need to focus not
only on exploring promising “seeds” but also on the power of“people” with passion, originality, and various abilities who cansprout these “seeds” and grow them until their harvesting.
I will strive to give my opinions and advice to help the Company share our “Diversity Statement” issued in April 2021 withnot only our group companies but also our partners from a global perspective, and steadily advance R&D for creating a prosperous future.

In 2021, as the first female outside director, I participated in the
Board of Directors and the Nomination and Remuneration Advisory Committee, and intensive discussions, etc. for the development of our long-term business plan. Looking ahead to the future society of 2030 and even 2050, Nissan Chemical earnestly
pursues growth strategies and specific measures to enhance
corporate value while responding to the demands of an increasingly diverse and sophisticated society, as a united group of employees. Also is evident that Nissan Chemical is willing to seriously listen to the opinions of various outside officers of different
ages, genders, and backgrounds. Moreover, the Company is also
focusing on promoting the advancement of female employees,
expanding their job categories, and supporting their childcare
while issuing the Diversity Statement in April 2021.
In order to pursue the greatest happiness for people and society in the midst of a drastically changing business environment, we are required to coordinate the interests of our diverse
stakeholders and to flexibly respond to the changes while reflecting on ourselves, under a spirit of harmony between the individual, the nation and society.
I aim to provide my opinions and suggestions from athird-party standpoint in order to contribute to the improvementof the Companyʼs corporate governance.

As the management environment surrounding Nissan Chemical
is constantly changing, we need to take new measures in ourgovernance, including the ones for sustainability.
Our governance has also changed in response to social demands. In addition to increasing the number of outside directors,
the Company appointed a female outside director in FY2021. Outside directors have exchanged their sophisticated questions andopinions based on their professional insights in the Board of Directors. On the other hand, Audit & Supervisory Board members
audit the execution of directorsʼ operation by participating in the
Board of Directors, exchanging opinions with the Representative
Directors and outside directors and sharing information with accounting auditors, as well as by visiting each division/department of the Head Office, plants, laboratories, subsidiaries, etc. inorder to understand the current status of the Company.
The Company has grown over the long term through a goodbalance between its activities such as R&D and the internal control. In order to continue stable growth in the future, the internal
control must be further upgraded on a group-wide and global
basis. I expect the Company to continue making the prompt anddrastic decision as it does now by keeping a good balance between R&D, etc. and the internal control.

Nissan Chemical Corporation

33

Integrated Report 2022

Nissan Chemical Corporation

34

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Business Plan
Summary of “Vista2021 Stage II” Mid-term Business Plan
Achieved and Significantly Exceeded all Income Targets for Vista2021 Stage II (FY2019-FY2021)
In April 2019, Nissan Chemical Group started “Vista2021 Stage
II”, the second three years of the mid-term business plan “Vista2021”. Looking ahead to FY2030 under the long-term businessplan “Progress2030”, we set our ideal situation in FY2021 as a
stepping-stone, and defined our basic strategies: “Increase profitability of products that are the sources of growth”, “Strengthen ability to create new products”, and “Improve ability to adapt

Progress in Implementing Measures Based on Basic Strategies

to social/market changes” to achieve that long-term plan.
As a result, despite the spread of COVID-19 infections, operating profit reached the record high for 8 consecutive years, andwe achieved the operating profit target of 50 billion yen in thelong-term business plan “Progress2030”, 9 years ahead ofschedule.

Basic Strategy 1. Increase profitability of products that are the sources of growth
Decided to withdraw from melamine business to promote structural reform of Chemicals Business
Expanded sales and by increasing product lines, widened target applications of photo IPS
Decided to establish a new NCK plant to increase production capacity of semiconductor materials (Investment amount: 8.5 billion yen (rounded number),planned completion: July 2023)
Expanded the agrochemical product portfolio through acquiring businesses of fungicides, “DITHANE®” and “QUINTEC®”
Established Nissan Bharat Rasayan Private Limited (India), the first overseas agrochemical production site, to expand the capacity to supply products(billion yen)

Basic Strategy 2. Strengthen ability to create new products
Established Planning and Development Division (April 1, 2020)
Functions were integrated such as new theme and market developments, for stronger planning and development abilities.
[Life Science Materials Development Dept.] Materials for cosmetics market and regenerative medicine market, etc.
[Information & Communication Materials Development Dept.] Novel electronic materials for information & communication, etc.
[Environment & Energy Materials Development Dept.] Materials for secondary batteries and solar cells, etc.
[Innovative Materials Planning Dept.] Creation and introduction of new themes and technology

FY2018FY2019FY2020

FY2021

FY2021

Difference

①

②

③

④

⑤

④-⑤

Sales

204.9

206.8

209.1

*208.0235.0*-27.0Operating profit

37.1

38.6

42.5

51.0

43.0

+8.0

Ordinary income

39.1

40.0

43.9

53.7

44.0

+9.7

Net income

29.4

30.8

33.5

38.8

33.0

+5.8

EPS (¥/share)

197.67210.09231.73271.88230.00+41.88Introduced a performance-linked stock compensation plan

ROE

16.6%

16.9%

17.5%

19.2%

Above 16%

+3.2%

Increased the number of outside directors (one each in June 2019 and June 2021, for a total of four outside directors)

FX rate (¥/$)

111

109

106

112

110

+2

Crude oil (JCC)($/bbl)

72

68

43

77

64

+13

(actual)(actual)(actual)(actual)(plan)

Invested in a venture capital and considered introducing technology and products from start-up companies
Promoted joint research and development with pharmaceutical companies and strategic alliance with bio-venture companies (Secured 7 oligonucleotide
target themes)

Basic Strategy 3. Improve ability to adapt to social/market changes
Established a Nomination and Remuneration Advisory Committee

Appointed first female outside director (June 2021)
Established a long-term target for reducing GHG emissions by 30% compared to FY2018 by FY2030 and promoted related measures
Conducted and published climate change scenario analysis and announced the support for recommendations of Task Force on Climate-related Financial
Disclosures (TCFD)*Including effects of changes in accounting policies (-22.9 billion yen)

Established Health Promotion Office and strengthened the promotion of health and productivity management

FY2018FY2019FY2020

FY2021

FY2021

Operating margin

18.1%

18.7%

20.3%

24.5%

Above 18%

Achieved

ROE

16.6%

16.9%

17.5%

19.2%

Above 16%

Achieved

Dividend payout ratio

41.5%

42.8%

44.9%

44.9%

45%

Achieved

Total payout ratio

72.0%

75.1%

74.6%

75.6%

75%

Achieved(actual)(actual)(actual)(actual)Established and published a Diversity Statement and Diversity Vision(plan)

Sales of Main New Products FY2021 Actual*
0.3 to 0.6 billion yen

Below 0.3 billion yen
Chemicals

Above 0.6 billion yen

Fine Chemicals
New TEPIC® (Liquid type)

Total

0.0 billion yen

Venus® Oilclean

DisplayAchieved and significantly exceeded all income targets for FY2021 in the mid-term plan formulated prior to COVID-19(announced in May 2019)
Operating profit reached the record high for 8 consecutive years
Achieved the operating profit target “50 billion yen” in the long-term business plan “Progress2030”, 9 years ahead ofschedule●Sales by segment (billion yen)
250
200
150

36.5
62.7

100
50
0

63.0

60

16.3

7.0

65.8

6.6

51.0

50

37.1

40
30

81.7

35.7

37.6

FY2018FY2021Others -0.3

1.0

FY201835

Integrated Report 2022

New high refractive materials(IM layer film)

Oilfield materials

In-house
TRANSFORM™

GRACIA®
ROUNDUP®ALⅡ/Ⅲ

EXCEED™

Agrochemicals

Acquisition

VIRESCO™

■ Chemicals■ Performance Materials■ Agricultural Chemicals■ Healthcare■ Others* Organizational restructuring was implemented in April 2022; figures for FY2018 are for the former organizational classification; figures for FY 2021 are after changing the organizational classification.

Nissan Chemical Corporation

3.4 billion yen

Inorganic

NEXTER®

2.8

3.8

FY2021

EUV under layer

Licensed-in

Others -1.3

15.0

0

CMOS image sensor materials

Inorganic

18.1

3.0

Semiconductors

3D packaging process materials

Monomer sol (3D-printing)

27.6

10

Semiconductors

Organosol (Insulation CTE)

18.4

20

Hole injection layer materials

Repellant bank layer materials

Performance
Materials●Operating profit by segment (billion yen)

208.0

204.9

Light control film materials

QUINTEC®

In-house
CLARE®

Pharmaceuticals
Planning andDevelopment Division

9.7 billion yen

DITHANE®

ALEILE®

Custom Chemicals

Custom Chemicals

New Generic API

New Generic API

Life Sciences Materials
Development Dept.

Cell culture medium

Eldecalcitol

0.0 billion yen*Including R&D costs deduction due to the sample shipments

Nissan Chemical Corporation

1.1 billion yen

14.2 billion yen
36

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Business Plan
“Atelier2050” Long-term Business Plan
Considering that the business environment has changed significantly since the previous long-term business plan was formulated, we once again discussed social issues and social changes with a view to 2050, and formulated a new businessplan by backcasting from issues to be resolved and necessary initiatives.

Business Areas
Solving
Social Issues“Atelier2050” gives the Group a path to contribute to solving social
issues and keep growing for the future.

Mitigate climate changes

Address health issues

Solve food issues

Achieve a smart society

Improve quality of life

Information &Communication

1

2

Semiconductormaterials
Display materials
Photofunctional
materials“Vista2027” indicates the ideal state of the Group in FY2027 as a steppingstone to attain the long-term plan.
Business

Agrochemicals
Animal health products
Biomedical materials
Pharmaceuticals(small molecules,
oligonucleotides, peptides)

Metamaterials

Organizational StateA “Future-Creating Company” thatgrows through seeking to enrichpeople and nature

A group of co-creators that facechallenges for change with a strong
passionEnvironment &Energy4Secondarybatterymaterials and fuel cellmaterials[

Existing
technology]I ndustrial chemicals
Colloidal silica
Affiliate companiesN ext-generation
solar cell materials
C CUS materials

CO2 reduction system

Growing businesses

CoreTechnology

Materials &Services

Microbiome<Agriculture/Healthcare> <Microbial materials>
Biostimulant

Corporate State

3

Life Sciences

 ensing Systems
S(IoT sensor materials)<Biomimetic sensors>

Expansion
into
new areas

Ideal State in 2050

Protect the global environment

Functional Polymer
DesignFine Organic Synthesis[

New
technology]

Microbial Control

Core businesses
Ultrafine Particle
Control

Biological Evaluation

Optical Control

Information Science

Basic Strategy

Business Areas

Social Involvement

Employees StateG rowth is achieved with Information &Communication, Life Science, and Environment & Energy as growing businessareas, and Materials & Services as acore business area.

E xpanding businesses and productsthat contribute to solving social issues[Basic Stance]L ife Science business is expanding withthe microbial control technology as thecore, and Information & Communication
business is growing with sensing materials and other products. Environment& Energy business is full-fledged andcontributes greatly to the global environment.

A dvancing the Groupʼs business management that prioritizes less effect on
the global environmentB ecoming a corporate group that istrusted and valued by the local community and whole societyValuing the integrity as thestrength
We trust and respect people. We achievethings with responsibility. We make efforts
for someone else and work together aswell. Integrity is the advantage and identity of the Group.
Taking a step forward with thevisionWe explore individual ideals. To realize
that, we transcend the traditional framework, go through repeated trial and error
and face challenges for change.
Transcending collaboration toco-creation
We evolve collaboration into co-creation,
having the courage to go through clashesof diverse ideas and enthusiasm.

Nissan Chemical Corporation

37

Integrated Report 2022

1

2

3

Deeply exploit and expand
business areas

Pursue sustainable management
further

Renovate management andbusiness foundations

Expand into new areas related to
growing businesses

Develop business activities that
contribute to solving
environmental and social issues

Accelerate the value-creation
process by utilizing digitaltechnology

Attainthe “Nissan Chemical Sustainable
Agenda” and expand product/service lines
specified in the Agenda

Fusevirtual and physical space and strength
en AI analysis

Information & Communication- Develop materials for the next-generation
display and join that market, and provide
materials that are compatible with the
evolving semiconductor technologies- Enter into new businesses, such as thesensing area and photofunctional material
marketAchieve carbon neutrality (Scope 1+2)
Cultivatea corporate culture where the fu
ture is co-createdLife Science- Expand into microbial agrochemicals, andadvance into healthcare and environment-related areas with microbial control
technology
Environment & Energy- Develop materials related to batteries/cells
that contribute to solving environmental issues, renewable energy materials, andCCUS materials

Nissan Chemical Corporation

38

Integrated Report 2022

Utilize
digitalization, automatization, and ro
botization to focus on creative work

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Business Plan
“Atelier2050” Long-term Business Plan

“Vista2027” Mid-term Business Plan
As a stepping-stone on the way to the ideal state set forth in our long-term business plan “Atelier2050”, we have formulated a six-year mid-term business plan “Vista2027”, starting in FY2022. Using this plan as a road map, we aim to achievesustainable growth.

Nissan Chemical’s contribution to theenrichment of people and nature

New Long-term
Business Plan

Atelier2050

Setting Targets for the Nissan Chemical Sustainable Agenda
The Nissan Chemical Sustainable Agenda is a plan to pursue “what we can do for the future of the globe and human” by
providing products and services that contribute to solving social issues.
We define “Actualizing a sustainable future for our planet (To Tomorrow)“ and “Actualizing sustainable comfort forall (Be Happy)” as areas of contribution, and define the rate of total sales of products and services that contribute tothese areas as a key performance indicator (KPI). In “Vista2027”, we have set a target of “maintaining at least 55%”, aiming to further expand our target products and services by fostering core technologies toward 2050.

Key Performance
Indicator (KPI)
Reduce CO2

Reduce waste

Conserve aquatic
environments

Rate of total sales of products
and services that contribute tosolving social issues in
consolidated net sales

Maintainat least

Actualizing
sustainable comfort
for all

Solve health issues
for humankind andanimals

Achieve asmart society

Solve foodshortages

Vista2027

Stage I: FY2022-2024
Stage II: FY2025-2027(Social and management issues)

FY2021 Result

Operating profit
ROE

55%

(FY2021 Target)
Operating profit
ROE(FY2030 Target)
Sales
Operating profit

2021

2024

Numerical
Targets● Trend of GHG Emissions (SCOPE1+2)
Vista2021 Target

Carbon Neutrality

△30%

449
363

200

327

318

2027

250

0

2011

[Major Initiatives]

2018
Vista
2021

2019

2020

■ Sales■ Operating profit

100

2050

<Target>- Conversion of naphtha (raw material) to LNG- Conversion of heating furnace fuel and auxiliary boiler
fuel from heavy oil to LNG- Zero N2O emissions from nitric acid plants- Melamine production shutdown- Fuel conversion- Improvement of production technology - Introduction ofand processes
renewable energy- Upgrade to energy-efficient equipment - Introduction of carbon
negative technology- Electrification of fossil fuels◎Please refer to P70 for information disclosure in line with the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD).

Nissan Chemical Corporation

39

Integrated Report 2022

285.0

255.0

223.3

55.1

51.0

FY2021 (actual)

FY2022 (forecast)

58.5

67.0

FY2024 (plan)

FY2027 (plan)

Financial
Indicators

Operating margin

Above 20%

Dividend payout ratio

55％

ROE

Above 18%

Total payout ratio

75％

Non-financial
Indicators

Rate of total sales of Nissan Chemical Sustainable Agenda
target products and services in consolidated net sales

Maintain at least 55%

GHG emissions

Reducing at least 30%

Positive response rate in survey of employee attitude on
human resource development

At least 65%

Proportion of female researchers

At least 18%

254

2027

2050

100

345

2021

2030

208.0

200

Net Zero(1,000 tons-CO2)

300 billion yen

50 billion yen

300(billion yen) 0

We will focus on achieving carbon neutrality by FY2050 by changing raw materials and fuels, promoting energy savings,
adopting renewable energy, introducing carbon negative technology, and taking other related measures.

400

Progress2030

43 billion yen
Above 16％

Achievement of Carbon Neutrality by 2050

“Reducing GHG emissions by 20%
compared to FY2011” (359,000 tons-CO2)
was achieved ahead of schedule.

Previous Long-term
Business Plan

Achievedahead ofschedule

51 billion yen
19.2%

50

600

Significant changes in thebusiness environment

Vista2021

Areas of Contribution through Sustainable Agenda Target Products and Service

Actualizing asustainable futurefor our planet

New Mid-term Business Plan

R&D Expenses andCapex(compared to FY2018)

60
50

49.7

＊1

42.5

40

■ Total FY2019-2021■ Total FY2022-2024

55.3＊2

55.0

30
20
10
(billion yen) 0*1 Acceptance basis*2 Production commencement
basis

R&D Expenses

Capex

40

Integrated Report 2022

Nissan Chemical Corporation

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Business Plan
“Vista2027” Mid-term Business Plan

Introduction of the concept ofsustainable management into
corporate governance
Ideal State of theCompany in 2027
Incorporation of ESG indicators into the officers’ remuneration system
While existing businesses
are robustly driving theb u s i n e s s p e r f o r m a n ce,
new core technologies are
consistently acquired for
expanding and enhancing
business areas

As the digital foundation is
being established, businessactivities are conductedbased on the latest information on clients and markets

The Company incorporates ESG indicators into the officersʼ remuneration system to strengthen its effectiveness for the
initiatives to promote sustainable management and corporate governance.
● Composition of Officers’ Remuneration*1

Organized sustainability-related initiatives are promoted
and related information isoffered internally and externally

Performance-related
remuneration 28%

Base remuneration 65%

Profit-linked portion90 %ESG-linked portion[Evaluation Indicators]●ESG evaluation by
third-party organizations●Rate of reduction of GHG
emissions●EBITDA

Deeply exploit
business areas andincrease marketing
ability
We strive to enhance our
R&D capability and improve our planning ability, towards the realization of the ideal state in
FY2050Refine existing core technologies and deeply exploit and expand development areas
Incubate new core technologies (microbial control and information science)Enhance marketing power and planning ability

Basic
Strategies❷

We foster our efforts
and propel measures forsustainability and facilitate offering sustainability-related informationinternally and externally

We propel building ourbusiness foundations andenvironment that help
mutual communicationand improvement in efficiency and facilitate thecreation and co-creationof new values

S trengthen corporate
governanceR evise the existing personnel system and humanresource development
for attaining businessstrategies

S et up “Sustainability
Promotion & IR Department” and propel related measures in an organized approachSet up “Digital Transformation Department” andfacilitate digital transformation (DX) and business foundation renovation

Enhance committee activities (intensifying company-wide cross-sectional efforts by setting up
the Sustainability Promotion Committee and section meetings)

Nissan Chemical Corporation❸
Strengthen thecreation andco-creation processof values

Promote sustainable
management

41

GHG emissions in FY2027:
Reduce by at least 30% comparedto FY2018❹

Integrated Report 2022

Expand market sharesand profits of existing
businesses

To extend the sales of existing products, that are
the sources of growthand develop new products consistently, we will
implement measures
such as infrastructuredevelopment and cost
reductions for existingproducts.
◎ Related Information
Business Segments P47-48
Main Products and Services P49-50
Business Strategies P51-60
Research and Development P61-62

10 %[Evaluation Indicators]●Net income attributable toowners of parent❶

Remunerationin stock 7%*1: The ratio of the portions of thecomposition varies according to
the Company’s performance

Establishment of the Climate Change Committee
We established the Climate Change Committee as an independent organization to accurately grasp the risks and opportunities posed by the increasingly serious climate change issue to our company, and to take comprehensive measureslinked to our management strategy and to refine and sophisticate the information disclosure.
Board of Directors● Organization

ChairmanPresident
Management Meeting

Sustainability
Promotion
Committee*2
Develop overall sustainability policies, specify materiality, set and manage
the progress of KPIs, develop long- and mid-termplans, annual activities,
and targets

Risk Management &Compliance
Committee

Environment, Safety& Quality AssuranceCommittee

Identify company-widerisks/compliance, develop
and refine countermeasure plans, and evaluate
the implementation status
and issues of countermeasures

Develop RC policies, set
and manage the progress
of KPIs, develop long- andmid-term plans, annual
activities, and targets

Climate Change
Committee
Analyze and evaluate
risks and opportunities
with a special focus on
climate change issues,and develop related strategies, long- and mid-termplans, annual activities
and targets*2: Renamed from CSR Committee on April 1, 2022

Nissan Chemical Corporation

42

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Message from the CFO●Sales/Operating profit/Operating margin
Achieved operating profit of 51.0 billion yen in FY2021, nine
years ahead of the planned FY2030 level.

Maintain ROE of above 18%
as the most importantmanagement indicator andexecute financial andcapital strategies froma long-term perspective
unwaveringly(billion yen)

24.5

250
200

18.1

18.1

150

10.9

DAIMON Hideki

100

193.4

Director,
Managing Executive Officer, CFO
Head of Sustainability Promotion &IR Department

10.1

18.7

0

2017

20.3

209.1

9.1

8.9

208.0

15

11.5

2018

2019

5

51.0

42.5

38.6

2020

0

2021 (FY)Operating profit (left axis)
Sales (left axis)
Nissan Chemical operating margin (right axis)
General chemical manufacturers (average) operating margin (right axis)*FY2021: Including effects of changes in accounting policies●Net income attributable to owners of parent/ROE
Achieved ROE of 19.2% in FY2021. Maintained high ROE by focusing on creating high value-added products.
(billion yen)

24.5

250
200

As the New CFO, Focus on Dialogue with Stakeholders
on Both Financial and Non-Financial Aspects

efficiently investing limited management resources to continue producing essential products in highly profitable businessfields, and is widely supported by investors as an easy-to-understand single indicator.
Since the early 2010s, our ROE has steadily increased,achieving 19.2% in FY2021, although in our previous mid-termbusiness plan “Vista2021 Stage II” (2019-2021), we targeted
maintaining above 16%. In the new mid-term business plan
“Vista2027” (2022-2027) as well, the target was further raised
to maintain the rate at above 18%, which is about twice the average of chemical manufacturers in the same industry.
We have achieved proactive shareholder returns over thelong term, and we will continue this policy. The total payout
ratio, including share dividends and share repurchase, is targeted at 75% of net income after taxes, and was 75.6% in
FY2021. Under the new mid-term business plan, the target of
the total payout ratio of 75% remains unchanged, but the dividend payout ratio was increased from 45% to 55%, taking into
account the opinions of investors.
In addition, our capital policy is to actively invest in research and development (R&D) expenses that are necessary
and sufficient for our business and still return ample cash toshareholders. Our target is to invest 8-9% of sales each year
in R&D expenses to ensure continued growth in the future.
Since the average in the chemical industry is 3-4% of sales,
this shows how we Nissan Chemical is continually investing
our management resources in producing high value-added
products. In terms of human resources, about 40% of employees of regular position are assigned as R&D (non-consolidated basis).

With Nissan Chemicalʼs organizational restructuring in April
2022, I took over the CFO position from the previous Vice President MIYAZAKI Junichi, and also being in charge of the Sustainability Promotion & IR Department.
As CFO, I consider it an important mission to achieve our
return on equity (ROE) target, which is our most importantmanagement indicator. At the same time, we also have thetask of promoting sustainable management so that we cancontinue to achieve sustainable growth while contributing tosolving social issues.
Investors are increasingly interested not only in financial
aspects but also in non-financial aspects such as ESG (Environment, Social, and Governance). Starting from this midterm business plan, we have decided to define and disclose
both financial and non-financial aspects equally in the management indicators that we should aim for, as the “twowheels of the car”. The Sustainability Promotion & IR Department, newly established in April, will actively engage in dialogue with stakeholders on both financial and non-financial
aspects.

Our Financial and Capital Strategies Remain Unchanged
Continued Emphasis on ROE and Proactive Shareholder
Returns
Since the mid-2000s, Nissan Chemical has placed ROE as its
most important financial target, and this will remain the samein the future. ROE, an indicator of capital efficiency, is the financial indicator that best matches our business strategy of

Nissan Chemical Corporation

43

Integrated Report 2022

18.1

18.1

18.7

(%)
25

(billion yen)

20.3

35
20

25

15 of
150
I believes that a major factor in our209.1
operating margin

206.8

11.5
10.9 which
24.5% in FY2021,
10.1has remained above 10% for 19 consec9.1
8.9
10100 years since FY2003, is our unwavering strategy based
utive
204.9
on such a long-term
perspective.
193.4
51.0

16.6

16.9

17.5

15

10.6

10.5

20
15

27.1

29.4

42.5
Promote38.6 Portfolio
37.1 Business35.0a Stronger
Actively
Making New Investments in Accordance with00
20192021 (FY)the New2017
Mid-Term2018
Business
Plan 2020

7.2
30.8

10

5

9.0
5.7

10

38.8
5

33.5

5
0

profitperformance,(left axis)
Sales(left axis) the final year of
As for ourOperating
business
in FY2021,
Nissan Chemical operating margin (right axis)
the previous
mid-termbusinessplan,
we achieved all of theGeneral chemical manufacturers (average) operating margin (right axis)
management
indicator
targets,andouroperating profit ex*FY2021: Including effects of changes in accounting policies
ceeded 50 billion yen, nine years ahead of the planned FY2030
level.
With such high profitability and growth potential, our business portfolio is highly resilient and balanced even against a
rapidly changing external environment. Despite the spread of
COVID-19 infection and soaring resource prices, Nissan Chemical has steadily generated profits mainly in the Performance
Materials, such as Display Materials and Semiconductor Materials, and the Agricultural Chemicals, and has achieved stablehigh growth rates, including record profits for eight consecutive years (operating profit and ordinary income; current net
income for nine consecutive years). I believe this is evidence ofthe superior sustainability of our business portfolio comparedto other major chemical companies with petrochemical businesses, which are more susceptible to market fluctuations.
However, there are challenges. Although sales of existingproduct lines have grown significantly, sales of new productlines, which are the next growth sprout, have not yet reachedour expectations. In order to steadily generate returns that

Nissan Chemical Corporation

16.1

(%)
20

30

208.0

50

19.2

40

2017

2018

2019

2020

2021(FY)0

Net income (left axis)
Nissan Chemical ROE (right axis)
General chemical manufacturers (average) ROE (right axis)●Total amount of dividend/Share repurchase/Total payout ratio
Total payout ratio was targeted at 72.5% for FY2019 and 75%
for FY2020 and beyond under the Mid-term Business Plan
(FY2019-2021), which were achieved.
(billion yen)

(%)
100

30
25

71

72

20
15

9.0

9.0
45.0

10
5
0

75
10.0
51.3

75

76

10.0

12.0

47.8

40.5 50

12.1

13.1

15.0

17.3

10.2
2017

2018

2019

2020

2021 (FY)0

Total amount of dividend (left axis)
Share repurchase (left axis)
Nissan Chemical total payout ratio (right axis)
General chemical manufacturers (average) total payout ratio (right axis)

44

Integrated Report 2022

40

30
25
20

10

204.9
37.1

(billion ye

35
20

206.8

50

35.0

(%)
25

15
10
5
0

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Message from the CFO●Sales and operating margin in FY2021 by business domain.

●R&D expenses/Sales-to-R&D expenses ratio

Further strengthen the current business portfolio althoughconsidering it to be in good balance.
100
80
60
40
20
0
(%)

50
40
30
20
10
0

100
80
60
4037.6 37.6
20
0

Sales-to-R&D expenses ratio is maintained at around 8-9%,
with a target of 8-9% annually in the future as well(billion (billion
yen) yen)(billion (billion
yen) yen)81.7 81.7

20

65.8 65.8
15

6.6

Identified materiality (priority issues) to be addressed in order to realize the ideal state of the Company in 2027
Aiming for sustainable growth together with society by promoting initiatives

20
8.9

8.98.7

8.7
8.3

(%)
10

8.37.97.97.7(%)
10

7.8 7.8(Forecast)(Forecast)
7.7

10

50
42.4% 42.4%
4033.8% 33.8%
27.5% 27.5%
30
20
10.1% 10.1%
10
0

5

2

3

Provision of New Value for
Helping to Enrich People’s Lives

Strengthening of Nissan Chemical’s
Business Base

Continuous Improvement of
Responsible Care Activities

Nissan Chemical Sustainable Agenda*

Personnel Retention and Trainings

GHG Emission Reduction Target
Compared to FY2018

15

6.6

Chemicals
Chemicals
Performance
Performance
Agricultural
Agricultural
Healthcare
Healthcare(%)
Materials
Materials
Chemicals
Chemicals

1

10
4.0

4.14.34.34.44.44.1

5
4.1
17.4 17.4
16.0 16.0
17.8 17.8
17.2 17.2
16.5 16.5
17.2 17.2

4.04.1

5

Rate of total sales of products and services
that contribute to solving social issues in
consolidated net sales

At least 65%

Maintain at least 55%

5

Positive response rate in survey of
employee attitude on human resource
development

Reducing by at least 30%

Promotion of Diversity0

Chemicals
Chemicals
Performance
Performance
Agricultural
Agricultural
Healthcare
Healthcare
Materials
Materials
Chemicals
Chemicals

Sales by Sales
businessby businessdomain domain OperatingOperating
margin by
marginbusinessby businessdomain domain

0

0

0

2021 2021
2022 (FY)2022 (FY)2017 20172018 20182019 20192020 2020

R&D expenses
R&D expenses(left axis)(left axis)
Nissan Chemical
Nissan Chemicalsales-to-R&D
sales-to-R&D
expensesexpenses
ratio (right
ratio
axis)
(right axis)
General chemical
General chemical
manufacturers
manufacturers(average)(average)
sales-to-R&D
sales-to-R&D
expensesexpenses
ratio (right
ratio
axis)
(right axis)*Organizational*Organizational
restructuring
restructuring
was implemented
was implemented
in April 2022.
in AprilFigures2022.
afterFiguressegment
afterreclassification
segment reclassification

Proportion of female researchers*A plan to pursue “what we can do for the future of the globe and human” by providing products and services that contribute to solvingsocial issues

At least 18%

Nissan Chemical Group’s top priority issue

Products and Services that Contribute to Society andthe Environment to Be at least 55%

exceed the expectations of the capital entrusted to us by ourshareholders, we need to make appropriate investments in
carefully selected themes and monetize them with a sense of
speed.
In the Healthcare Division, including pharmaceuticals,
which underwent organizational restructuring in April 2022,
we will specialize in marketing not only pharmaceuticals but
also medical materials, and in R&D, the Healthcare Business
Development Department of the Planning and Development
Division will focus on selection and concentration in order toachieve the targets of the new mid-term business plan.
Meanwhile, as new investments, major investments are in
progress in growth business fields, including an investment
to increase production capacity of semiconductor materials(new NCK plant in South Korea, 8.5 billion yen) and an investment to expand the supply capacity of agrochemical products(establishment of a joint venture in India). We will also make aseries of DX-oriented investments with the intention of rebuilding the long-term data infrastructure of plants, divisions,and the entire Head Office.
In the previous mid-term business plan, we executed two
acquisitions of fungicide businesses to expand our portfolio of
agrochemical products, and we will continue to seize opportunities for investments and acquisitions that contribute to future growth with the aim of further deepening our major business areas.

Nissan Chemical Corporation

With regard to sustainability, we have launched the “Nissan
Chemical Sustainable Agenda”, a plan to pursue “What we
can do for the future of the globe and human” as a practice todeepen sustainable management, which is one of the basic
strategies of the new long-term business plan “Atelier2050”.
Under “Actualizing a sustainable future for our planet (To Tomorrow)”, we will contribute to the areas of “Reduce CO2”,“Reduce waste”, and “Conserve aquatic environment”. Under “Actualizing sustainable comfort for all (Be Happy)”, we
designate “Solve health issues for humankind and animals”,“Achieve a smart society”, and “Solve food shortages” as ourareas of contribution. We define the rate of total sales of products and services that contribute to solving social issues in
consolidated net sales as a key performance indicator (KPI).
Under the mid-term business plan “Vista2027”, the products
and services identified in the Nissan Chemical Groupʼs materiality “Provision of new value for helping to enrich peopleʼs
lives” are included in the “Nissan Chemical Sustainable Agenda”, with a target of “maintaining at least 55%”. Toward 2050,
we will further expand our target products and services byfostering core technologies in the four business areas of Information & Communication, Life Science, Environment & Energy, and Materials & Services.
With the goal of achieving carbon neutrality by 2050, we
will also focus on improving production technologies and introducing renewable energy in addition to our existing efforts.
Toward that goal, in the new mid-term business plan “Vista2027”, we moved the target of reducing greenhouse gas(GHG) emissions by 30% from FY2018 level by FY2030, three
years ahead of schedule, to be achieved by FY2027.
As one of the measures to achieve this goal, we plan to invest
500 million yen to achieve zero N2O emissions from nitric acidplants. We also plan to reduce GHG emissions by suspending
melamine production, converting fuels at the Onoda Plant, fully introducing internal carbon pricing (ICP), reducing CFC
equipment, and upgrading to energy-efficient equipment.

45

Integrated Report 2022

Strengthening of Corporate Governance, Risk Management and Compliance

Establish Feasible Numerical Targets and Gain Stakeholdersʼ Trust

Climate change involves both risks and opportunities. We
would like to increase the ratio of Nissan Chemical Sustainable Agenda by increasing the number of environmental-friendly products and at the same time contribute to profit
growth. Therefore, our technologies will be put to the test,
and we will contribute to the reduction of GHG emissions byfurther demonstrating our strengths in R&D.
In April 2022, the CSR Committee was replaced by the
Sustainability Promotion Committee to assume a commanding role in maintaining more sustainable growth. In parallel,
Climate Change Committee was established in July 2022. Witha special focus on the increasingly serious issue of climatechange, we will analyze and assess risks and opportunities,
formulate strategies and mid- to long-term plans for addressing them, as well as annual activities and targets, and promptly reflect them in our business strategies.
In August 2020, we expressed our support for the Task
Force on Climate-related Financial Disclosures (TCFD) recommendations, and we will continue to make appropriate disclosures as climate change is of great interest to investors.
Foreign investors sometimes point out that Japanesecompanies are not good at promoting their technologies andproducts. We must properly convey information about our
technologies and services that we can be proud of. For example, the world population is expected to grow and reach nearly 10 billion by 2050. Our agrochemicals, which are among thebest in our new product development capabilities, are ourcore products that contribute to increasing crop yields andsolving food problems, while passing thorough safety tests
and taking biodiversity into consideration. We will also actively promote our efforts to further strengthen this agrochemical portfolio and expand our product supply capacity.

Nissan Chemical Corporation

We have consistently achieved many of the targets of our midterm business plan.
I believe that we have gained the trust of our stakeholders
by calmly establishing feasible numerical targets and continuing to thoroughly disclose them. The backbone of this trackrecord, our emphasis on ROE and shareholder returns, willremain unchanged in the future. While responding flexibly tochanges in external factors such as the demands of society
and the environment surrounding our business, we will continue to execute our financial and capital strategies from along-term perspective without wavering.

46

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Business Segments
In the new Mid-term Business Plan “Vista2027”, we have set “expand market shares and profits of existing businesses” as
one of the basic strategies. While keeping a close eye on changes in the environment surrounding our customers and markets, we will promote the expansion of existing products, which are the source of growth, and the steady development of
new products.
* Organizational restructuring was implemented in April 2022; figures for FY2018-2020 are for the former organizational classification; figures for FY 2021 are after changing the organizational classification.

Chemicals

Performance
Materials

Our Chemicals business started with the manufacture ofsulfuric acid and ammonia, which are basic raw materials
for fertilizer. In addition to general industrial use, we provide our customers with products and technologies thatare used in a wide range of fields, including high-purity
chemicals for electronic material applications, high-gradeurea solution for removing air pollutants, and cyanuric
acid derivatives for use in water quality improvement applications.

Advancements in semiconductors, sensors, and displays
are required to realize a smart society. Performance Materials Division contributes to the realization of a smart
society through the expansion of applications for existingproducts and the development of new products in thethree pillars of displays, semiconductors, and inorganic
materials.

Social Issues and Needs
Advent of a smart society
Escalation of global environmental issues
Emergence of new needs in various fields
reflecting social issues

Business VisionProduct development focused on advanceduser requirements
Provision of products and technologies that
contribute to solving social issues

Sales (left axis)(billion yen)

35.7
34.3
8.4

40
30

0

Expansion of IoT and 5G communications,evolution of AI and autonomous driving
technology
Response to carbon neutrality

Business Vision
Development and provision of key materials
that contribute to the realization of a smart
societyDevelopment of new environmental-friendly
materials

Agricultural
Chemicals

Healthcare

Planning andDevelopment
Division

Since entering the pharmaceutical business in 1982, Nissan Chemical has developed and launched a variety of
products, starting with the external preparation of EPATEC®, which contains ketoprofen as its main ingredient.
With the technology we have cultivated so far, Healthcare
Division will provide superior pharmaceuticals and medical materials for the sake of irreplaceable lives andsmiles around the world.

The mission of the Planning and Development Division is
to create new materials and new businesses that will become future pillars in the fields of Information & Communication, Environment & Energy, and Life Science. As a future-creating company, we will challenge the unlimited
possibilities of chemistry and strive to create high value-added products that meet the “trust” of our customers.

1.5

3.8

2018

2019

2020

2021

Sales (left axis)

100
60
40

Social Issues and Needs
Stable food supply
Growing need for low-risk pesticides that
reduce residual agrochemicals in harvested
crops and reduce environmental burden
Agricultural sustainability, transition tosmart-agriculture

Business Vision
Provision of chemically synthesized agrochemicals with distinctive features
Development of biological agrochemicals
Provision of services for smart agriculture

2018

80
60
40
20

Growing importance of medical services andpharmaceuticals due to low birthrate andaging population
Growing awareness of extending healthy life
expectancy
Safer and more effective pharmaceuticals in
addition to personalized medicine and preventive medicine

Business VisionIn addition to the manufacturing of conventional pharmaceuticals, the manufacturing of new
products in the broader healthcare area, including medical materials
Contribution to solving health issues byaddressing unmet medical needs

22.4

2021

65.8

63.8

0

2024

77.8

1.0

0.9

2022

(forecast)

2018

2019

2020

21.0

2024

2027 (FY)(plan)

20
100(plan)

11.5
38.3
6.0

2021

21.7

Operating margin (right axis) (%)

2.8

6.0
0.4

82.3 40
30

Operating profit (left axis)

12.9

0

(plan)

Operating margin (right axis) (%)

20.6

6.6

2027 (FY)(plan)

18.1

14.3

2

2022

(forecast)

18.2

6.7

38.0 20

32.1

10

19.3

7.0

40
30

30.2

18.4

2021

117.2

34.0

27.3

2020

(plan)

102.9

88.9

27.5

2019

12
10
8
6
4
2
0

Operating margin (right axis) (%)

28.5

7.0

4

2027 (FY)(plan)

75.4

42.4

6

2024

30.2

10
8

2022

(forecast)

Operating profit (left axis)

Sales (left axis)

12

3.9

29.3

2018

(billion yen)

3.5

27.6

2020

64.0

62.7

0

Social Issues and Needs

2019

Sales (left axis)(billion yen)

81.7
71.6
33.8
31.3

17.0

15.0

20

2.3

Operating profit (left axis)

65.5
63.0
26.0
23.8

80

0

Agricultural Chemicals Division provides customers with
agrochemicals, agents for green space management, andveterinary pharmaceuticals based on the idea of a stable
food supply for people around the world and agrochemicals that are also friendly to the global environment. As acompany that provides products which contribute to astable food supply, we are promoting various efforts tosolve social issues.

1.3

120

40.1

37.6
5.9

4.7

3.0

(billion yen)

Operating margin (right axis) (%)

37.610.1 38.8

31.9

3.8

20
10

Social Issues and Needs

Operating profit (left axis)

50

7.2

30

4.3
2.3

2.1

2022

2024

(forecast)

40

20
10

2027 (FY)(plan)

0(plan)FY2021 Segment results and sales according to region

Social Issues and Needs
Solving social issues that arise toward asustainable society, such as climate change
issues, global environmental conservation,
low birthrate and aging population , andtransformation to a smart society, etc.

Business Vision
Building new businesses that contribute tosolving social issues
Co-creation of new materials that meet market
and customer needs and promotion of realdemand for them by deepening core technologies, introducing new technologies, andintegrating them

Others* ‒1.3
Healthcare 2.8

Others* 16.3
Healthcare 6.6

Chemicals 3.8
Europe,USA, etc.

Chemicals

37.6

Agricultural
Chemicals

65.8

Agricultural
Chemicals

Total

208.0

18.1

Performance
Materials

Performance
Materials

81.7

Sales (billion yen)

Total

51.0

27.6

Operating profit (billion yen)

Other Asian
countries

28.7

South Korea

21.4

28.5

Total

208.0

Japan

99.2

China

30.2

Sales according to region (billion yen)
* Others: trading, others, and adjustment

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Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Main Products and Services
In response to the ever-changing needs of society, we will advance R&D on “Must-Have” products and services so that we
can hear our customers’ voice, such as “it doesn’t work without this product” and “this product is irreplaceable”.

Agricultural Chemicals
Agrochemicals

Chemicals

ROUNDUP®

ROUNDUP® is a herbicide used all over the world which has low toxicity to humans and animals
and does not remain in the soil or in the environment. In 2002, we acquired exclusive marketingrights in Japan from Monsanto.

Basic Chemicals
High-purity chemicals

ALTAIR®

Agents used for semiconductors/LED require extremely high purity. We provide sulfuric
acid, nitric acid and ammonia to this industry, receiving high acclaim in the process.

ALTAIR® is a wide-spectrum herbicide that is highly effective in eliminating bulrush and cyperaceous perennial weeds. It is also effective for weeds that are resistant to conventional sulfonylurea-based herbicides. We market this product in Japan, South Korea, and China.

AdBlue®*1

AdBlue® is a high-grade urea solution used in “urea SCR system”, a technology for purifying emissions. When sprayed onto emissions from diesel vehicles, it breaks down nitrogen oxide (NOx) into harmless nitrogen and water, which helps to reduce environmental
impact.

GRACIA®

GRACIA®, a pesticide developed in-house, is fast-acting on a wide range of crop pests and has little impact on honeybees which are useful insects. Released in South Korea in 2018 and went onsale in Japan in 2019.

Fine Chemicals
HI-LITE®

Chlorinated isocyanulate is the main ingredient in this product, which is used for sterilizationand disinfection of swimming pools and water purification tanks, and thus contributing to
public hygiene.

TEPIC®

TEPIC® is an epoxy compound which possesses excellent heat resistance, weather resistance, and transparency. It is widely used in semiconductors, LEDs, and substrate-related
electronic materials as well as in powder coating curing agents.

Veterinary Pharmaceuticals
Fluralaner

Fluralaner is a compound invented by Nissan Chemical used as an active ingredient in the veterinary pharmaceutical “BRAVECTO®*3” developed by MSD Animal
Health (MAH). We manufacture and supply it to MAH as an API of veterinary pharmaceuticals. Fluralaner has remarkable features: it is highly safe and acts rapidly
against major species of fleas and ticks and has a longer insecticidal effect thanexisting products as its effects remains even when highly diluted.
*3 BRAVECTO® is a registered trademark of Intervet International B.V. and Intervet Inc.

*1 AdBlue® is a registered trademark of the Verband der Automobilindustrie (VDA).

Performance Materials

Healthcare

Display Materials

Healthcare

SUNEVER®

SUNEVER® is a polyimide-based liquid crystal alignment material. It is used to coat the surface of the outer glass panels to align liquid crystal molecules in a certain direction.

LIVALO®*4(API)

Featured by its potent LDL cholesterol-lowering effect and few drug-drug interactions, LIVALO® is used in thetreatment of hyperlipidemia.

LANDEL®*5 (API)

Semiconductor Materials

LANDEL® is a long-acting calcium antagonist featured by its renoprotective effect and used in the treatment ofhypertension and angina pectoris.

ARC®*2

ARC® is an anti-reflective coating developed for semiconductor lithography. It is used to coatthe part under the photoresist, to resolve a number of issues with lithographic exposure suchas reflection from varying substrate levels. This makes it possible to significantly reduce thedevice failure rate.

Inorganic Materials

Custom Chemicals
The Onoda Plant manufactures active pharmaceutical ingredients (APIs) andtheir intermediates. In addition to GMP compliance, it is regularly inspected bydomestic and foreign regulatory authorities as well as by customers to whom
it delivers APIs, and its level of quality is highly evaluated.

Maxacalcitol

SNOWTEX®

SNOWTEX® is a colloidal solution in which ultrafine particles of silicic acid anhydride are dispersed in water using water as a dispersion medium. Utilizing various functions, it is used for awide range of products such as batteries, coating materials for optical films, electronic substrate materials, and abrasives for manufacturing electronic recording media.
*2 ARC® is a registered trademark of Brewer Science, Inc.

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Maxacalcitol is used in the treatment of psoriasis vulgaris and secondary hyperparathyroidism.

Eldecalcitol

Eldecalcitol increases bone mass and is used in the treatment of osteoporosis.
*4 LIVALO® is a registered trademark of Kowa Company, Limited. *5 LANDEL® is a registered trademark of Zeria Pharmaceutical Co., Ltd.

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Profile

Value Creation & Growth Strategies

Sustainability

Business Strategies

Corporate Data

Chemicals

Chemicals
Most of the products of this division are comprised of industrial chemicals, such as ammonia and sulfuric acid, and derivative products/
high-purity products that have been developed downstream with added
value. These products are supporting people’s lives in a wide range offields. By building an efficient production system, we strive to provide excellent products and technologies while reducing the environmental burden.

OKIKAWA Toshiaki

Executive Officer, Head of Chemicals Division

Progress of Vista2021 Stage II
1 Cyanuric Acid
Cyanuric acid is a material used in TEPIC®, HI-LITE®, and melamine cyanurate, which is used as a flame retardant. In order to facilitate the stable provision of TEPIC® and HI-LITE®, which are sources of growth of this division, to the market,
we expanded our cyanuric acid production facilities in December 2020, which contributed to an increase in sales in
FY2021.

2 TEPIC®
Basic Chemicals
We sell industrial chemicals such as sulfuric acid, nitric acid,ammonia, and urea, and their derivative products to a wide variety of industries. The Company is further improving the efficiency of our production system in order to create a stronger business foundation to minimize the impact on our earnings due toexternal factors, such as changes in economic trends in Japanor oversea and fluctuating fuel prices.
We are also manufacturing and supplying products to support cutting-edge fields, and providing products to the market
such as high-purity sulfuric acid, nitric acid, aqueous ammonia
and liquid ammonia from which impurities are removed to utmost level.
In addition, we established a manufacturing and supply system for our high-grade urea solution AdBlue®* that decomposes
nitrogen oxide contained in exhaust gas from diesel vehicles,
which is considered to be the cause of air pollution, into nitrogen
and water, thereby reducing environmental impact.

Fine Chemicals
We offer environmental chemicals such as HI-LITE®, used forsterilization and disinfection of swimming pools and water purification tanks, and Venus® Oilclean, a microorganism formulationthat decomposes oils and fats in wastewater from food factories,
as well as other chemicals such as FINEOXOCOL®, higher alcohol used in products including cosmetics.
In addition, TEPIC®, a high-performance chemical derived
from cyanuric acid, a derivative of urea, and melamine cyanurate
are positioned as key products for earnings growth. In addition
to being used as a curative agent for coating powders, TEPIC® isseeing an increase in demand for use in electronic materials
such as solder resist ink and sealants for LED. Melamine cyanurate is used as a non-halogen flame retardant or an auxiliary
flame retardant for various engineering plastics. In addition to
focusing on the expansion of applications for these existing products, we are promoting R&D of our own cyanuric acid derivatives.

*AdBlue® is a registered trademark of the Verband der Automobilindustrie (VAD).

The high-performance chemical TEPIC®, which has a distinctive triazine ring, is used in a wide range of applications. For
electronic material applications, we expect that demand for TEPIC® will continue to grow in various fields, including theinformation & communication field (5G base stations for solder resist ink applications, substrates for autonomous driving, etc.). In FY2021, we fell short of our plan due to the shortage of semiconductors for the automobiles, but we forecast
an increase in sales in FY2022 as the shortage is expected to show a tendency to be solved. For general-purpose grades,
we revised the sales prices in response to soaring international market prices due to rising raw fuel and materials costs
and logistics costs. We will pursue a well-balanced sales strategy by expanding sales of high-quality grades while avoiding low-price competition in general-purpose grades.

3 HI-LITE®

“Clean Water and Sanitation”, one of the SDGs, is an important global issue. We have started exporting some grades of
HI-LITE® since they have been certified as materials for disinfectants for drinking water in areas where hygiene management is insufficient, such as in developing countries. We will respond to the global demand for disinfection, as well as
the demand for disinfectant applications for drinking water.

4 High-Purity Sulfuric Acid
Demand for high-purity sulfuric acid is expected to grow in the information & communications field, a business field
which will continue to grow. We also witnessed an increase in sales in FY2021 due to a favorable level of demand by thesemiconductor business. We will continue to maintain high quality and high availability.

Vista2027 Business Strategies
Opportunities and Risks

Strengths●Manufacturing process for products with high selfextinguishing rates as well as high value-added products by developing derivative products using ammonia as a core raw material●Accumulation of more than half a century of researchand know-how regarding ultra-high purity of industrial chemicals●Rising prices of raw materials and fuels●Expansion of semiconductor market●Increasing demand for environmental-friendly
products●Introduction of carbon pricing

Main Measures
1. Improve profitability of ammonia-related business after the withdrawal from themelamine business
2. Expand sales of high purity sulfuric acid
3. Expand sales and improve profitability of cyanuric acid and HI-LITE®
4. Develop the business of Venus® Oilclean (a microorganism formulation)

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Efforts toachieve
Vista2027

In June 2022, the first year of Vista2027, we discontinued
the production of melamine, which has been a core product in our ammonia-related products for more than halfa century. Meanwhile, for sulfuric acid products, we will
make capital investments and upgrade facilities in response to increasing demand. The Chemicals business is
susceptible to the effects of fuel prices, supply demandbalance, and market environment. Therefore, we willcontinue to strive to secure stable earnings while flexibly reviewing business strategies in response to environmental changes.
As a source of sustainable growth for the business,
we will focus on the development and deployment of
new products, mainly cyanuric acid derivatives, whilestrengthening sales of products for the robust electronic

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52

materials field. We started the full-fledged commercialization of STARFINE® (zinc cyanurate), from which effects as an additive for paints and adhesives can be expected. Together with the new grades of TEPIC®, it has
already been evaluated by many users for various purposes. We will also contribute to waste reduction with
Venus® Oilclean, a microorganism formulation.

Dry film resist made withTEPIC® -VL(new grade TEPIC®)

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Business Strategies
Performance Materials

Performance Materials
In this rapidly evolving business, it is necessary to quickly and accurately grasp the needs and technological trends of the market. For this,sales, research, and production, including overseas bases, are integrated, and we emphasize activities that are closely related to customers. We
aim to contribute to the development of society by providing products andservices based on the reliable technical capabilities that we have cultivated.

ISHIKAWA Motoaki

Director, Senior Managing Executive Officer, Head of Performance Materials Division

Display Materials
We are working on alignment materials for aligning liquid crystal molecules in a certain direction. SUNEVER® was made available for sale in 1989, and we have expanded our market share byincreasing the functionality of alignment materials, even when
the liquid crystal type used is changed from TN to STN or TFT. In
addition, in 2014, we started the sale of Rayalign®, a photo-alignment material for IPS liquid crystal, and this has become ourmain product. This product has been used in many smartphones.
In the future, it is expected that product demand for Rayalign®
will further increase as tablet and monitor resolutions increase.

our business.
Currently, with the adoption of EUV exposure technology(wavelength: 13.5 nm, semiconductor circuit width: 7 to 3 nm),
we are promoting the mass production and next-generation development of EUV materials and also focusing on three-dimensional (3D) packaging technology preparing for the limits of optical shrink.

Progress of Vista2021 Stage II
1 Liquid Crystal Alignment Materials for TVs
Currently, our major materials for displays are alignment materials for smartphones and tablets, and especially thephoto-alignment material for IPS liquid crystal. In the future, we will also use them for TVs. Although demand for LCD
TVs is predicted to decrease somewhat, we predict that demand for alignment materials will continue to increase basedon screen sizes. Also, since we believe that screen resolutions will continue to improve, we recognize that it is an important theme to accurately respond to technical requests from customers and expand the market share of our products. In
FY2021, we were able to increase sales of alignment materials for VA liquid crystal due in part to the smooth start-up of
our customersʼ plants.

2 Agents to Increase Oil and Gas Extraction Efficiency
In areas with excellent oil and gas wells, it was said that extraction efficiency reduced due to a decrease in oil recovery
amounts amid crowded conditions in areas where oil wells are in close proximity. In response to these issues, we aimed
to expand sales of agents to increase oil and gas extraction efficiency by developing applications for use of our inorganic
materials. We faced a harsh environment in the first half of FY2021, however, we secured sales at the same level as theprevious fiscal year in the second half, partially due to the rise in crude oil prices and our acquisition of new customers.

*1,2 ARC® and OptiStack® are registered trademarks of Brewer Science, Inc.

Inorganic Materials
SNOWTEX®, a nano silica water dispersion serving as a fiber
processing agent, went on sale in 1951. Now we also offer organosilicasol serving as an organic solvent dispersion, and monomer sol, a product that can be used without solvent. These products are indispensable materials used in coating materials for
optical films and in abrasives for electronic recording devices
and for other purposes. In the future, we will work on the development of CCS/CCUS-related materials and expand their applications to new eco-friendly products.

Semiconductor Materials
We started the manufacture and sale of ARC®*1 in 1998 based on alicensing agreement with US company, Brewer Science, Inc. ARC®
is a coating material designed to prevent issues such as irregularreflection and interference of light, and coating failure during micro-fabrication of the photoresist. We launched OptiStack®*2(multi-layer process material) in 2007 which greatly expanded

Vista2027 Business Strategies
Opportunities and Risks

Strengths●Expansion of applications of photo-alignment materials
for IPS liquid crystal and growth of the OLED market●Expansion of the semiconductor market and progressin 3D packaging technology●Development of a smart society●Intensification of inter-corporate competitions●A sales and research system closely linked to customers in China, Taiwan, and South Korea●Optical control technology●Functional polymer design technology●Ultrafine particle control technology

Main Measures
4. Start the commercial operation of the
new NCK plant
5. Improve profitability of the inorganic
material (inorganic colloid) business

1. Improve existing products andexpand their applications
2. Reinforce and increase manufacturing facilities and other facilities
3. Develop and launch new products

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Efforts toachieve
Vista2027

OLED Materials
OLEDs are thinner and lighter than liquid crystals, offer
high-speed response, and possess excellent design characteristics, such as flexibility. They are being used more
often in smartphones, high-resolution, large screen TVs
and other products. Recently, sales of foldable smartphones with screens of OLED have begun. We will aim tocommercialize new products as OLED materials by developing proprietary materials, including ELsource®, asoluble hole injection material, NPAR®, a liquid-repellentbank layer material, materials that enhance light extraction efficiency, and release layer materials. We arealso developing materials for next-generation self-luminous displays which will be the future display technology following OLEDs.

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54

Semiconductor Packaging Materials
Technologies related to high-speed, large-capacity information and communication such as IoT, 5G, and sensors,
are making rapid progress. For this reason, further miniaturization and higher integration in the formation ofelectronic circuits are occurring. As we have been working on the development of materials for the process of
3D packaging with thinned semiconductor wafers, weplan to expand sales the materials in the growing market.

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Business Strategies
Agricultural Chemicals

Agricultural Chemicals
We contribute to a stable food supply through consistent business activities from the research for new agricultural chemicals to their development, manufacture, and sales, and expansion of a broad product lineup
through the acquisition of ingredients from other companies and joint development of products.

SATO Yuji

Managing Executive Officer, Head of Agricultural Chemicals Division

Agrochemicals
Our agrochemical business started in the 1910s when our predecessors Nippon Seimi Seizo and Kanto Soda began manufacturing and selling insecticides and fungicides. Starting with TARGA®
(herbicide for grassy weeds) launched in 1984, we have continued to manufacture and sell products developed in-house such
as SIRIUS® (herbicide for paddy rice), SANMITE® (insecticide/acaricide) and PERMIT® (herbicide for paddy rice and corn),which have steadily improved profitability.
Afterwards, we experienced hard times as a result of inhouse development delays and intensifying competition withcompetitors. However, since the launch of LEIMAY® (fungicide)in 2008, we have returned to introducing products developed inhouse and started sale of GRACIA® (general purpose pesticide)in 2018. In addition, we are actively pursuing the acquisition ofother companiesʼ agents and have enhanced our agriculturalchemical product portfolio by taking over the global product
Quintec® (fungicide) in 2019 and Japanese and Korean operations for the versatile DITHANE® (fungicide) in 2020.

Veterinary Pharmaceuticals
Through our development of agricultural pesticides, we havediscovered compounds that are not only effective for use on agricultural crop pests, but also on fleas and ticks that are parasitic in dogs and cats, and have continued to examine these compounds as veterinary pharmaceuticals. In 2008, we entered alicensing agreement with Intervet Inc. Development of veterinary pharmaceuticals using Fluralaner, a compound invented byus, as an active ingredient has advanced.
Since launched in Europe and the United States under thebrand name BRAVECTO®* in 2014, veterinary pharmaceuticals
containing Fluralaner as an active ingredient are now used in
more than 100 countries and are leading the growth of Agricultural Chemicals Division. In addition to our products for dogs
and cats, “EXZOLT®”* for chickens, cattle, and sheep is also obtaining a marketing authorization in an increasing number ofcountries.

Progress of Vista2021 Stage II
1 GRACIA®
GRACIA®, a pesticide developed in-house, is fast-acting on a wide range of crop pests andhas little impact on honeybees which are useful insects. It was released in South Korea in2018 and went on sale in Japan in 2019. The product was launched in India and Indonesia in
2022, and will be launched in Bangladesh in 2023, Vietnam in 2024, and Thailand in 2025.

2 ROUNDUP®
ROUND NOZZLE® ULV5, a product that allows for dispersion of ROUNDUP® MAXLOAD in a way that reduces farmer
workload, is gaining popularity. We are working to increase sales of ROUNDUP® MAXLOAD by utilizing the boom sprayer nozzle for large-scale farmers released in FY2021. Sales of ROUNDUP® MAXLOAD AL for general consumers are expected to increase due to continued acquisition of new users and expansion of retail distribution.

3 Fluralaner
Veterinary pharmaceuticals for companion animals and livestocks containing Fluralaner as an active ingredient areavailable in more than 100 countries. In FY2021, sales of animal health products containing Fluralaner as an active pharmaceutical ingredient continued to increase year on year, mainly for companion animals. Along with the low birthrate
and aging population, the idea that companion animals are like a family to their owners is growing in popularity. We expect that the demand for veterinary pharmaceuticals will increase in the future as people become more aware aboutcompanion animal health.

* BRAVECTO® and EXZOLT® are registered trademarks of Intervet International B.V. and Intervet Inc.

Vista2027 Business Strategies
Opportunities and Risks

Strengths●Labor shortage due to the population decline in Japan●Growing need for measures to increase food production
due to the increase in global population●Growth of bio-based agrochemicals and materials●Expansion of market for companion animals●Ability to create distinctive, new agrochemicals fromthe core technologies of fine organic synthesis andbiological evaluation●Experiences and track records spanning many years
from research for new agricultural chemicals to
manufacturing and sales●High level of motivation cultivated through maintaining
high profit margins and continuous growth

Main Measures
1. Popularize and expand sales of main products such as GRACIA®, and continue to enhance our respective
marketing efforts for large-scale farmers and agricultural corporations, and general consumers
2. Conduct steady development of NC-653 (novel herbicide), NC-656 (novel herbicide) and NC-520 (novel
nursery-box insecticide for paddy rice), and create new pipelines
3. Establish a biological research teamNissan Chemical Corporation

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Efforts toachieve
Vista2027

In order to enhance our product portfolio, we will continue to introduce and jointly develop products from othercompanies, including biological agrochemicals.
In addition, as in-house developed products, following the development of a herbicide for paddy rice flooding treatment (development code NC-653), we also started to develop a herbicide for application on stems andleaves of paddy rice (development code NC-656) and anursery-box insecticide for paddy rice (development
code NC-520). Moreover, we have established a joint venture (Nissan Bharat Rasayan PVT. LTD.) in India for the
purpose of manufacturing the active ingredients in agrochemicals. We aim to start its operations as soon as possible. By having this joint ventureʼs manufacturing plant

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together with the Onoda Plant, we can respond to growing demand for our agrochemicals. We expect it will contribute to the growth of our agrochemicals business by
establishing a robust active production and supply system that is cost-competitive.

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Business Strategies
Health Care

Healthcare
We accelerated the selection and concentration of business areas in order
to appropriately respond to changes in the business environment andachieve mid- to long-term growth. In April 2022, the drug discovery researchfunctions were transferred to the Planning and Development Division, and the
Healthcare Division will be responsible for manufacturing and sales of new
drugs and medical materials as well as the Finetech business.

ISHIWATA Norihisa

Executive Officer, Head of Healthcare Division

Healthcare
In the 1970s, a number of companies from other industries entered the pharmaceutical business. We focused our researchand development on lifestyle-related diseases and launched an
antihypertensive drug efonidipine hydrochloride in 1994. It is distributed in Japan by Zeria Pharmaceutical and Shionogi as
LANDEL®＊1, and in South Korea by GC Biopharma as FINTE®.
In 2003, Kowa Company launched the anti-cholesterol drug
pitavastatin calcium hydrate as LIVALO®＊2, which is now sold in
30 countries around the world. After domestic substance patents have expired in 2013, the decline in market shares due togeneric drugs and the impact of drug price revisions have resulted in a continuing difficult situation in Japan, and the creation of
new drugs is an urgent need.
With the organizational restructuring in April 2022, the drug
discovery research function was transferred to the Planning andDevelopment Division, where it is handled by the Healthcare
Business Development Department. The Healthcare Division willtake charge from the out-licensing stage, developing the business from a comprehensive perspective of broader healthcare
together with medical materials.

Custom Chemicals
We operate a “solution proposal” contract business and a joint
development business that provide total support for the development of active pharmaceutical ingredients (APIs) in response
to customer needs. We accept contracts for the development of
manufacturing processes at each stage from preclinical to commercial production, as well as for the manufacture of APIs andintermediates under GMP-compliant conditions. Accompanying
this, we also handle services such as quality design, stability
testing, synthesis of impurity/metabolite samples, and preparation of application materials for the drug master file.
Recently, we have expanded our business of supplying APIsfor generic drugs, and are not only handling highly active APIs
that require containment, but also efficiently manufacturinghighly active vitamin D3 APIs in addition to prostaglandin derivatives using our proprietary two-component coupling method
based on our diverse fine organic synthesis technologies. In addition, we have developed our proprietary liquid-phase synthesis technology “SYNCSOLTM ” for innovative contract peptide
production.

Progress of Vista2021 Stage II
1C
 onstruction of Basic Technologies to Accelerate Oligonucleotide Drug Discovery and Promotion of Joint Drug Discovery with Pharmaceutical Companies
Oligonucleotide therapeutics are attracting attention in their main roles as next-generation pharmaceuticals. In 2018, webegan joint research with pharmaceutical companies and bio-venture companies for oligonucleotide drug discovery, entering into this area at full scale. In addition to accelerating drug discovery by strengthening our proprietary basic technologies for oligonucleotide drug discovery, we are jointly working with multiple pharmaceutical companies to create
development compounds.

2C
 ommencement of Strategic Alliance with Modulus to Accelerate Small Molecule Drug Discovery
With recent advances in supercomputers, it is becoming possible to design small molecule drug candidates for target
molecules with high precision. In 2021, we entered into a strategic drug discovery collaboration agreement with Modulus Discovery, Inc., which leverages its basic technologies such as cutting-edge computational technology. In this agreement, Nissan Chemical share the development of drug candidates and jointly out-license them to pharmaceutical companies with Modulus Discovery, Inc.

3 Establishment of an Efficient Peptide Manufacturing Technology
We invested 900 million yen in 2018 in a third-party allocation of shares of PeptiStar, which is aiming to establish a stablesupply system for APIs of constrained peptides. Meanwhile, we have developed a novel liquid phase peptide synthesis
technology (SYNCSOLTM) that enables dramatic cost reduction. In the future, we intend to develop this technology for not
only APIs but also peripheral medical materials.

4 Continuous Launch of Highly Bioactive Generic Drugs
The demand for eldecalcitol, a drug for treatment of osteoporosis, is growing because the number of patients with osteoporosis is expected to increase due to population aging. Based on the production results of maxacalcitol, a highly active
vitamin D3 API, in FY2020, we started the sale of eldecalcitol, which requires high-quality control because of the susceptibility to decomposition and impurities caused by oxygen, moisture, and heat in the air. In the future, with an eye to expanding into overseas markets, we will establish a stable supply system and nurture it as a source of growth.

*1 LANDEL® is a registered trademark of Zeria Pharmaceutical Co., Ltd.
*2 LIVALO® is a registered trademark of Kowa Company, Limited.

*Progress of Vista2021 Stage II shows the progress of the former Pharmaceuticals Division

Vista2027 Business Strategies
Opportunities and Risks

Strengths● Increasing demand for generic drugs● Expanded efforts in middle molecule drug development● Aging population and diversification of healthcare● Intensification of inter-corporate competitions● Fine organic synthesis technology● GMP compliant high-level containment technology● Chemistry, Manufacturing, and Controls (CMC) support
for APIs● Cutting-edge evaluation functions

Main Measures
1. Healthcare: Concentrate investment in the oligonucleotide drug discovery and commercialize and expand sales of
medical materials (biointerface control materials, cosmetic materials, etc.)
2. Custom Chemicals: Strengthen highly profitable business models, expand into overseas markets, and aim forjoint development (peptides, etc.)
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Efforts toachieve
Vista2027

We will focus on oligonucleotide therapeutics utilizing
our proprietary basic technology for oligonucleotide
drug discovery and steadily promote joint drug discovery platform with pharmaceutical companies. In the areaof small molecule drugs, we will work on the use of AI asa shift from existing drug discovery method. Pitavastatin
calcium hydrate, the API of LIVALO®, will be developedby taking advantage of economies of scale. In medical
materials, we will promote actual demand and sales expansion of new products such as biointerface control
materials and cosmetic materials.
In addition to the generic drug maxacalcitol, which
was launched in FY2015, eldecalcitol, which waslaunched in FY2020, has achieved significant growth as a

Nissan Chemical Corporation

58

pillar of our business. In the future, we will be fully engaged in business not only in Japan but also in overseas
markets. Furthermore, we will launch a peptide contract
business and joint development business, leveraging theoverwhelming technological superiority of our proprietary liquid-phase synthesis technology “SYNCSOLTM”.
Through these measures, we will further develop Custom Chemicals into a highly profitable business.
It will take time to obtain results for new pharmaceuticals and medical materials. Until then, we will continue
to boldly take on the challenge of developing new pharmaceuticals and medical materials while supporting the
backbone with our highly profitable Custom Chemicals
business.

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Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Business Strategies
Planning and Development Division

Planning and Development Division
By combining our core technologies with new materials and technologies,
we are striving to create new products and businesses with high added value that meet the needs of society. The Planning and Development Division
was newly established in FY2020 to further accelerate development. In
FY2022, we established the Healthcare Business Development Department by integrating functions of drug discovery and medical materials.

ENDO Hideyuki

Managing Executive Officer, Head of Planning and Development Division

Progress of Vista2021 Stage II
1 NANOFIBERGEL®
In addition to promoting skin penetration of active ingredients such as vitamins C derivatives, NANOFIBERGEL® hasbeen confirmed to have an anti-pollution effect that inhibits the adhesion of PM2.5 and pollen, and has been adopted in askincare product by a major cosmetics manufacturer. The product was also adopted for use in SUGI Pharmacyʼs private
brand “Prieclat”. We will expand it to other items in the future.

2 prevelex®
Healthcare
We carry out planning and development of new drugs, mainly
oligonucleotide therapeutics, and planning and development forcommercialization of materials for regenerative medicine andraw materials for cosmetics.
In the planning and development of new drugs, we are focusing on oligonucleotide therapeutics targeting a specific moleculein the cells, and are strengthening our platform and building our
R&D portfolio through collaboration with academia and our partner companies in order to contribute to improving patientsʼ quality of life through the creation of innovative new drugs.
In the field of regenerative medicine, we are focusing on thedevelopment of Cellhesion®, a scaffold that enables high-density culture of undifferentiated mesenchymal stem cells with highmigration performance, and a material for non-freezing storage
for cell clumps (spheroids). We aim to apply prevelex®, an agent
to prevent adhesion of proteins, cells, etc. to containers in thefields of genetic medicine and antibody drugs, as well as containers for testing and research.
In the cosmetics field, we are working to expand into haircare products, etc., starting with the adoption of NANOFIBERGEL®
in skin care products provided by cosmetics manufacturers.

Environment & Energy
We are committed to product development that contributes tothe realization of a sustainable society through Green Transformation (GX).
As for lithium-ion batteries (LIB), we are developing slurry
additives with the aim of improving input/output characteristics,
extending service life, and reducing process costs, for their earlycommercialization. Focusing on fuel cell technology for utilizinghydrogen energy and ammonia synthesis as a hydrogen energy
carrier, we are developing materials for catalyst layers in polymer electrolyte fuel cells, ammonia electrolytic synthesis catalysts, hole transport layers that contribute to improving the efficiency of organic photovoltaics (OPV), which are lightweightflexible solar cells.
With the aim of realizing a recycling-oriented society, we arepromoting the development of a gas separation membrane technology expected to reduce costs for CO2 separation and recovery, and the development of ECOPROMOTE®, a resin additive,that contributes to cost reduction in the molding process andimproving a heat-resisting property of polylactic acid which is
rapidly spreading as a biodegradable bioplastic, to commercialize them as soon as possible.

Information & Communication
We are working on the development of new materials that support cutting-edge devices required to realize Society 5.0.
We are promoting market development for materials including μLED-related materials attracting attention as next-generation displays with high brightness and high reliability, wafer-level package-related materials that enable miniaturization andthinness, nucleating agents for electroless plating for micro
wiring, and SUNCONNECT®, an optical interconnect material
that support high-speed, large-capacity data communications.

New Material Planning and Research Management
Through venture capital based investment and other means, we
are working to discover high-quality start-up companies andnew development themes. We are working at the revitalizationof development themes by introducing new materials and technologies in each field and accelerate commercialization by strategically investing in startup companies.
Also, through the training of researchers and the proper allocation of resources, we are working for enhancement of R&D
capabilities by creating a mechanism that leads to the evolutionof existing technologies and the creation of new technologies.

We have started sales of culture vessels coated with “prevelex®CC1” for clinical research and trials of iPS cell-derived
cardiomyocyte spheroid transplantation. In addition, containers for drug discovery screening coated with “prevelex®
AP1” are being developed as the ability to prevent adhesion of biological substances is highly evaluated. In the future,
we will promote sales expansion of current products and accelerate the development of “prevelex®AP2” that haveachieved further functional improvements, and spheroid mass production materials.

3 SUNCONNECT®
SUNCONNECT®, an optical interconnect material with high heat resistance and low optical loss, has been evaluated byseveral customer companies as a material for polymer optical waveguides, and its paid sales have already started. For
opto-electronic hybrid technology, which is expected to see further development in the future, we will widely deploy
this material, mainly to semiconductor package substrate manufacturers in Japan and overseas.

4 Hole Transport Layer for OPV
Regarding organic photovoltaics (OPV), lightweight and flexible solar cells that practical application preceded, efficiency
improvement by adopting next-generation active layers, has become one of the most important issues, and we have developed a hole transport layer for OPV for next-generation active layers, which is being evaluated by customers. At present, the effectiveness of our material has been confirmed by the largest OPV customer, and the evaluation is currently
ongoing.

Vista2027 Business Strategies
Opportunities and Risks

Strengths●Expansion of regenerative medicine market, growth ofbeauty and health market●Development of digital society and expansion of ICT market●Increasing demand for technological development aimed
at the realization of a low-carbon society●Development delays and late arrival of expected new fields●Fusion of fine organic synthesis, functional material
design and biological evaluation●Thin film coating based interface control technology●Extensive network with external research institutes

Main Measures
1. Accelerate development by allocating resources to important themes
2. Incorporate new technologies and materials from inside and outside the Company into
in-house technology
3. Improve contact with customers and strengthen solution proposals capability

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Value Creation & Growth Strategies

Sustainability

Corporate Data

Research and Development
R&D capabilities are the source of Nissan Chemical’s competitiveness. We have made continuous investments in R&D andhave focused on recruiting and training researchers. By continuing to strengthen our R&D capabilities, we will develop“Must-Have” products and services so that we can hear our customers’ voices, such as “it doesn’t work without this product”
and “this product is irreplaceable”. We will aim to realize our ideal state in 2050: “a “future-creating company” that grows
through seeking to enrich people and nature” and “a group of co-creators that face challenges for change with a strong passion”.

Business Domains and Core Technologies“Environment & Energy”, by adding “Microbial Control” and“Information Science” to our existing core technologies. By
working closely with between research laboratories or researchlaboratories and related departments to deeply exploit and integrate our core technologies, we aim to accelerate growth in eachbusiness domain.

Originally started as a fertilizer manufacturer, over our long history, we have grown with “Fine Organic Synthesis”, “Functional
Polymer Design”, “Ultrafine Particle Control”, “Biological Evaluation”, and “Optical Control” serving our core technologies.
We will enter new domains related to three growing businesses, “Information & Communication”, “Life Science”, andFertilizer
Silicate soda

Sulfuric acid

Inorganic
agrochemicals

Ammonia

Basic Chemicals

for semiconductors

Petrochemicals

Introduced
organic
agrochemicals

Precision Technology●H igh purity chemicals

Existing
pharmaceuticals

Fostering New Core Technologies

Voices of Researchers

Microbial Control

Newly establishment of Biological Group,
Agricultural Chemicals Research &Development Department,
Biological Research Laboratories

By controlling microbiome in soil, in intestines, on skin, etc., weintend to expand our business to broader areas such as agrochemicals, healthcare, and environment. We aim to contribute tosolving various social issues by commercializing medical materials, biostimulants, etc. in addition to microbial agrochemicals.

NISHIMURA Kenji
Biological Group, Agricultural Chemicals Research& Development Department, Biological ResearchLaboratories

Information Science
It is positioned as “technology that drives new value creation
through simulation and data science”. We will promote company-wide DX as well as materials informatics (MI) in research departments for the establishment of technology as a source ofvalue creation in all business domains.

Recently, policies to decrease the use of agricultural chemicals have been announced in Europe and Japan, for the
purpose of reducing environmental impact. In response tosuch changes in the external environment, our BiologicalGroup was established in the Agricultural Chemicals Research & Development Department at Biological ResearchLaboratories on April 1, 2022, with the aim of developing
our proprietary biological agrochemicals and acquiring a
microbial control technology utilizing bioinformatics, froma different perspective we never used before.
It is said that there are about 100 million microorganisms per gram in the soil. Some of them may be useful.
Our mission is to contribute to safe food supply for bothproducers and consumers by maximizing the potential ofuseful microorganisms
through our R&D activities, which will lead toour companyʼs profit. I
expect all of our groupmembers to work hardto develop good products.

R&D Expenses
We consider R&D is the source of growth, and have intensively
invested our management resources in R&D.
Over the last five years, R&D expenses have totaled 84.7 billion yen. The R&D expenses in Performance Materials and Life
Sciences that combined with Agricultural Chemicals and Healthcare account for more than 40% each. In addition, about 40% of
employees of regular position are allocated as researchers.

Polyimides

Basic Chemicals● Nitric acid
● Urea● Cyanuric acidR&D expenses■Chemicals ■Performance Materials ■Agricultural Chemicals■Healthcare*1 ■Others
20

Heterocyclic Chemistry
16

Ultrafine Particle
Control

Fine Organic
Synthesis

Biological
Evaluation

Functional Polymer
DesignOpticalControl

12

Chemicals● SNOWTEX®
● Organo sol● Monomer sol● Environmental chemicals● TEPIC®

(Inorganic Materials)(Fine Chemicals)

Pharmaceuticals
Produced ThroughContracted Manufacture● Custom Chemicals

New ProprietaryAgrochemicals

Performance
Materials● TARGA®
● SIRIUS®
● PERMIT®
● LEIMAY®
● STARMITE®
● ALTAIR®
● GRACIA®

● SUNEVER®
● Rayalign®
● ARC®
● OptiStack®

Active Ingredients
for Veterinary
Pharmaceuticals● Fluralaner

Microbial Control

Acquiring and developing
new technologies

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2.0

2.5

2.5

2.5

4.3

4.5

4.6

2.0

16.5

16.0

2.4

2.4

2.4

2.1

4.4

● LIVALO®
● LANDEL®

17.4

Analyzing microorganisms toaccelerate product development

4.0
7.0
4.5

4.2

SASATSUKI Hitoshi

0Medicinal Research Department,
Biological Research Laboratories

8.2

8.1
0.6

(billion yen) 2017

7.7
0.6

2018

0.4
2019

Composition of regular position
personnel*2
40% ofregular-position
employees areresearchers

R&D
480

7.0

Others
750

7.8

7.0
0.3

2020

0.3
2021

My mission is to identify beneficial substances containedin a culture fluid of microorganisms, and then discover
microorganisms which lead to new products and a method of their culture based on the substances. Iʼm now
working for the project to develop biological agrochemicals. While Iʼm responsible for presenting data that significantly affects the progress of the project, Iʼm engaged
in my work with a sense of responsibility and satisfaction.
In addition, I always keep myself open to the latest findings and technologies to achieve our mission, and I enjoy
working as a researcher, taking on the challenge of bioinformatics, which will become an important tool in biology
in the future. I will strive to develop a microbiome analyzing method utilizing these technologies, and use themethod for not only biological agrochemicals
but also the fields ofhealthcare and environmental cleanup, which
will result in accelerating the product development.

0.4
2022 (FY)(forecast)Composition of researchers
by segment*2
Planning andDevelopment Divisionand others
150

Chemicals
5

Performance
Materials
205

Proprietary
Pharmaceuticals

Information Science

Integrated Report 2022

17.2

1.7

8
4

Performance Materials

17.8

17.2

Healthcare
15

Agricultural Chemicals
105*1 The Pharmaceutical Div. was reorganized into the Healthcare Div. in FY2022; R&D expenses is the figures for
the Pharmaceuticals Division until FY2021.
*2 As of April 2022

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Value Creation & Growth Strategies

Sustainability

Corporate Data

Human Resources Strategies
The greatest asset of Nissan Chemical is the people. Creating an environment where people with diverse backgrounds andvalues can fulfill their potential enhances their ability to respond to society, generates innovation, and supports our businessfoundation. To realize our management strategy, we are reforming our personnel system and developing human resources.

Promotion of Diversity
Nissan Chemical has a diverse workforce, regardless of age, gender, or nationality, working in a wide range of fields. In the future,
we will further promote diversity in order to enhance corporate
value by taking advantage of diversity in terms of values, abilities,
and experience, which cannot be expressed in terms of attributes.

Innovation
Social needs

Conflict and Fusion*2*1

At Nissan Chemical, it is important that the individuality
and talents of each individual be demonstrated and thatthe purpose of the individual be connected to society
through the Company. We believe that this will nurture asense of fulfillment in work and a sense of purpose in life,and create a strong force that fulfills the future of people
and society with hope and happiness as well as realizing
the well-being of people who work.
We regard diversity initiatives as an important theme
for achieving both the well-being of our workers and thehappiness of society, and aim to achieve our Diversity Vision through all measures.

Gender,Nationality, etc.

Experience,
Expertise, etc.

Values, etc.

All kinds of diversity

Diversity Vision

Training Before Promotion (revised in FY2020)
In the training before promotion to C3 class (job rank equivalent tosubsection manager), participants formulate a vision for the futureand initial hypotheses (questions and answers) and then spend
several months examining and revising the vision and hypothesis
to refine the action plan for the purpose of “acquiring future-creating leadership skills”.
In the training before promotion to managerial position(equivalent to section manager), with the aim of “acquiring leadership that unleashes the future creativity of people and organizations”, participants come up with ideas for new businesses,
products, and services through accessing the knowledge of theworld, developing their ability to interpret information, and acquiring valuable information, while demonstrating leadershipand promoting transformation. Going through the process of hypothesis verification will lead to commercialization of products
and services for the Company.

Intrapreneurship Program (started in FY2019)

Diversity of Talent

Diversity of Opinion

Diversity Statement

We have started an intrapreneur (in-house entrepreneur) training program in FY2019 with the goal of developing the abilities ofentrepreneurs and fostering them. With the support and coaching of active entrepreneurs, participants practice behavioral
skills through actual project in mixed teams selected from multiple departments. By repeating information gathering from potential customers in Japanand overseas and hypothesis testing in a short cycle,
they will promote the brushing up of promising themes
and learn how to act as innovators.

Overseas Language Study Program
In order to work in a diversified workplace, we believe that it is important to understand each otherʼs cultural backgrounds andideas to understand each other, not only language. Therefore, wehave introduced an overseas language study program with theaim of having employees learn by experiencing and following different cultures. From FY2019, this program has been further improved by extending the existing program length by one monthand expanding the languages covered.

*1 Diversity of Opinion (fusion of diverse opinions): A state in which diverse opinions are expressed and fused ina free and open atmosphere*2 Diversity of Talent (demonstration of diverse talents): A state in which individual strengths are recognized anddemonstrated, and high performance is achieved by the organization as a whole● We will become a vibrant company that is full of job satis-

faction and fulfillment in life through a corporate culturethat respects and accepts various opinions and ideas
arising from all kinds of diversity*, and creating the opportunities to demonstrate individual talents.
● We will bring innovation into society with creative andunique ideas that are born from conflict and fusion ofvarious opinions and ideas.
● We will create a truly valuable future by respecting andaccepting the diversity of everyone working together,whether inside or outside the Company, and collaborating with society

Self-start Training[Nissan Chemical Corporation Action Plan] (Excerpt)
Period ofthe plan
Issue

Target 1
Action 1* It refers to all kinds of diversity, including not only external attributes such as gender, age, nationality, and physical characteristics, but also internal attributes such as capability, experience, beliefs, religion, values. (Established in April 2021)

Target 2

Promotion of Active Participation of Females in the Workplace
and Support for the Development of the Next Generation

Action 2

With regard to the promotion of females, by setting the target of
30% or more for the ratio of females among new graduates in
the regular position and by working to expand the job categories
in each department within the Company, the ratio of females in
the regular position increased to 10% in April 2021.
Going forward, we will accelerate the penetration of diverse
work styles according to individuality and life stage of each individual, with the new targets of increasing the ratio of females in
the regular position to 13% or more, increasing the ratio of female researchers in regular position to 18% or more, doubling
the number of female managers, and encouraging male employees to take childcare leave.

Nissan Chemical Corporation

Individual purpose

Securing and Developing Human Resources
We believe the essence for human resource development is thateach employee will continue to educate themselves voluntarily intheir efforts to develop themselves. Therefore, we have established various human resource development programs by employment tier, including self-start training, for our employees who aspire to learn new things and develop themselves. In addition, we
have started a new human resources development program andrecruitment measures since FY2019 based on the Ideal Human Resources Portfolio, a guideline for human resources development.

Five years from April 1, 2021 to March 31, 2026
The penetration of diverse work styles according
to individuality and life stage of each individual isinsufficient.
Increase the ratio of female among employees in
the regular position to 13% or more
Increase the ratio of female among new graduatesin the regular position to 30% or more
Double the number of female managers (above
section chief level)
Consideration of personnel system to enable early
selection

Target 3
Action 3

Encourage male employees to take childcare leave
Consideration and implementation of measures
to recommend male employees to take childcare
leave at birth of child and for their superiors torecommend them to take childcare leave

Target 4

Continue to maintain the ratio of taking annual
leave (including managers) of 70% or more
Thorough implementation of our own taking annual
leave target (10 days per year) set through labormanagement consultation

Action 4

This is a traditional training that has been passed down at Nissan Chemical for decades. For the purpose of laying a foundation
for self-starting human resources who “think and do what theyshould do”, over the course of two one-year cycles, each participant will work on “creating original plans and executing them”
with the support of an implementation leader and a manager.
A contest-style presentation is held by field in the first year,
and by all participants with different specialties in the second
year. The ideas proposed by young employees during this training are often adopted and used in subsequent work.

Business Co-creation Internship
We offer an internship program in which students from a variety
of majors, whether liberal arts or science, and our employees
work together to envisage future projects, aiming to secure human resources with the mindset of co-creating values demanded
by society, such as solving social issues, across the boundaries offields and organizations.
In the course of experiencing the conception of businessproposals with high social value through multiple sessions, including screening for social issues and exploring the strengths
and values of each participant, our employees deepen their understanding about the skills and mindset we seek as a future-creating company together with participating students.
Personnel Retention and Trainings
Web https://www.nissanchem.co.jp/eng/csr_info/communication/
employee/system.html

Promotion of Diversity
Web https://www.nissanchem.co.jp/eng/csr_info/communication/
employee/respect.html

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Sustainability

Corporate Data

Improvement of Products Quality
Our Quality Policy is “Providing products and services that satisfy customers”, and based on this policy, we set mid-term
quality targets and work on quality activities.

Creation of a Comfortable Workplace
With recognition of growing concern for labor shortage due tothe low birthrate and aging population as well as diverse work
styles, our group promotes initiatives that enable employees towork in a highly productive manner and achieve a good worklife balance.

Basic Health Policy
Mental and physical health is a foundation that supports
sound corporate growth from the viewpoint of the happiness of employees and their families, as well as the trustof the corporate and the smooth operation of the business.
We and our employees will work together to promote initiatives aimed at maintaining and promoting health in a
multifaceted manner and aim to be a dynamic company.
1. Employeesʼ health is based on their own management
and we will provide support.
2. We will implement effective and flexible measuresthrough smooth internal and external cooperation.
3. We will ensure the proper use and management of personal information and comply with laws and regulations.

Introduction of Systems for Promoting a Good Work-Life
Balance
We have introduced a flextime system, hourly leave system, improvement of annual leave rate (target: at least 80% of available
annual leave time taken), and a system which allows expired
paid leave to be used for nursing/caregiving. Since FY2022, thetelecommuting system has been made a permanent system.
Also, in 2018, we were granted the Next Generation Accreditation
Mark (Kurumin) by the Ministry of Health, Labour, and Welfare
for our efforts as a company to support childcare.

Promotion of Appropriate Work Hours

Certified Health and Productivity Management Organization (White 500)

We are making various efforts to provide appropriate work
hours. For example, we have introduced work management system for grasping and visualizing working hours and the numberof days left for annual leave in a timely manner based on our own
strict standards that exceed legal standards. We are also providing regular training for managers for managing working hours.

We have been recognized for the resultsof our health management initiatives under the “Certified Health and Productivity Management Organization Recognition
Program (White 500)” for six consecutive
years by the Ministry of Economy, Tradeand Industry and Nippon Kenko Kaigi.

Dialogue Activities with Union Members
Every year, we provide opportunities to have direct dialogues toactively exchange opinions between more than 30 members of
the Nissan Chemical Labor Union and officers in charge of personnel. By gathering a wide variety of opinions, we aim to createa more comfortable work environment.

Mental Health Care
We introduced a stress check in 2015. Each year, organizational
analysis of the results is conducted and the reporting session isheld at each business site. More than 200 people, including
heads of plants and laboratories, management level employees,
and union officers, etc., participate in the reporting session toformulate workplace environment improvement plans.
For management level employees, Line-Care Training is provided on a regular basis. In FY2021, 86% of eligible employees
took the course. For employees, we have introduced e-learning
for Self-Care andcounseling services available toemployees andtheir families.

Creation of a Comfortable Workplace
Web h ttps://www.nissanchem.co.jp/eng/csr_info/communication/employee/

dialogue.html

Maintenance and Improvement of Employeesʼ
HealthWe have established the Basic Health Policy based on the belief that employeesʼ health is a “foundation that supports
sound corporate growth” with the goal of maintaining and improving the health of employees.

Quality Targets - “Elimination of Quality Risks” with thorough governance- “Logistics and Supplier Management” to maximize quality performance- “Visualization of Quality Management and Quality Activities” that leads to enhancement ofcorporate value

System
We have established a quality assurance division at each plantthat is independent of the manufacturing divisions, to inspect
the quality of each product, and the quality assurance divisionat the head office, which oversees the quality assurance activities of the entire company, conducts quality audits to eachplant and affiliated company. To promote quality assurance activities on a company-wide basis, the Environment, Safety, &Quality Assurance Committee meets regularly to report the results of quality activities, the results of quality audits and thestatus of improvements, and complaints and status of corrective actions. The committee discusses the next yearʼs action
policy of quality assurance, etc. The reports and contents of the
discussions are reported to the Board of Directors, and quality
management systems are in place under management review.

No intentional fraud was found, and minor deficiencies andpotential risks were guided for improvement.

Fostering Quality Culture
Effective means of raising quality awareness and combating
their conceit or decline in compliance include the disseminationof corporate policies and employee education. In 2021, we established the Quality Behavior Model aiming to enhance the qualityof our employee behavior, and disseminated it as our top message. We will continue to develop internal education on quality
compliance.

Logistic and Supplier Management
We aim for total quality assurance, considering not only the quality of the manufactured products themselves, but also the packaging materials, transportation, attached documents, anddemonstration of function at the customers, as part of our products.
Although a high percentage of our quality abnormalities arecaused by the packaging process to transportation operations,human errors are not easily reduced by reviewing work methods and training of workers. We will analyze abnormal casesand share the improvement targets with contract logistic suppliers as well. In addition, we have established internal guidelines
for the management of contract manufacturers. Based on this,we conduct quality audits and evaluate contract manufacturers
to maintain appropriate management.

Indicators
Since the number of complaints increased in FY2020, we conducted improvement activities focusing on changes in productmanufacturing and product design, resulting in a decrease in
the number of complaints in FY2021. The number of serious
complaints remained almost unchanged at 1 in FY2019, 3 in
FY2020, and 2 in FY2021. We aim to achieve zero cases in
FY2022.
The number of complaint cases
20■FY2019
15■FY2020■FY202110
5(cases) 0

Internal Network of Product-quality Intelligence
Function or Foreign-substance Packaging
ingredient

DeliveryWe have established an internal network to promptly collect andevaluate customer feedback (complaint information) regarding
our products and to take necessary corrective action. Customer
feedbacks are promptly communicated to the sales, manufacturing, and quality control divisions to enable response to customers and quality improvements. In addition, we are building anelectronic system for comprehensive quality-related information, including complaints.

* We have changed complaint counting rule from FY2021, from FY of occurrence to FY of determination, and from numberof complaints to number of complaint cases (the same kind of complaints is counted as one case). Results for past years
are recalculated on this basis.

Activities
Prevention of Quality Fraud and Data Tampering

Basic Health Policy

Enlightenment on Health Maintenance

Based on the Basic Health Policy announced in July 2018, we
have set lifestyle-related diseases measures, mental health care,etc. as priority items, and are implementing various measures
jointly with the Health Insurance Association. We also establishedthe Health Promotion Office in August 2020 and introduced ahealth management system in February 2021.

In FY2021, we held seminars for all employees to improve theirhealth management skills under the themes of “lifestyle-relateddiseases” and “mental and physical health care”, etc.

Nissan Chemical Corporation

Value Creation & Growth Strategies

Maintenance and Improvement of Employees’ HealthWeb https://www.nissanchem.co.jp/eng/csr_info/communication/
employee/workplace.html

65Integrated Report 2022

In FY2020, we established and began implementing the guidelines with the aim of prevention of fraud and tampering regarding quality control. In FY2021, the status of operation was confirmed through internal audit. In addition, since falsification of
inspection data has become a major social issue in recent years,
we confirmed the consistency of inspection results, inspection
data, and the basis of the specification, and confirmed whether
there were any fraudulent or inappropriate actions related toquality control.

Nissan Chemical Corporation

Improvement of Products Quality
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Sustainability

Corporate Data

Responsible Care
As a company that handles chemical substances, Nissan Chemical Group has a great responsibility to society. In order to fulfill this responsibility, we engage in Responsible Care (RC) activities. RC activities aim to voluntarily ensure environment,
health and safety throughout the entire process from development of chemicals to manufacturing, distribution, use, final
consumption, disposal and recycling. These activities also serve as a form of communication with society through the announcement of their results.

SystemMitigation of Climate Change andEnvironmental Conservation

We have been engaged in RC activities since 1992, and establisheda new RC mid-term plan (2022-2027) this year. To achieve our RC
mid-term plan, we manage targets and make continuous improvements through PDCA (Plan, Do, Check, Act) in our RC management system based on ISO14001* throughout the Company. In addition, we have established the Environment, Safety & Quality
Assurance Committee, which is chaired by the officer responsible
for the Environment, Safety & Quality Assurance Department, as
the organization in charge of promoting RC activities, and hold its
annual meeting. The contents of the discussion, including targets
for the next fiscal year, are reported to the management meeting.
After approved at the management meeting, the contents are resolved at the Board of Directors.

Efforts for Reducing Greenhouse Gas (GHG) Emissions
We actively work to protect the environment, including taking efforts to reduce greenhouse gas (GHG) emissions, and have beenpromoting initiatives to mitigate climate change which include
energy savings, fuel conversion, and dinitrogen monoxide emissions reduction. For our GHG emissions reduction (Scope 1 and2), in addition to the RC mid-term targets until FY2021 of “GHG
emissions: 20% reduction compared to FY2011” and “GHG emission rate (emissions/sales): 40% improvement compared to
FY2011”, we have set a FY2027 target of “GHG emissions: at least
30% reduction compared to FY2018” to achieve carbon neutrality
in 2050.
In FY2021, we achieved the RC mid-term targets for both GHG
emissions (reduced by 23% compared to FY2011) and the GHG
emission rate (improved by 50% compared to FY2011) although
GHG emissions increased from the FY2020 level due an increasein the volume of manufacture of ammonia-based products.

* International standard for environmental management system. All of our plants have acquired ISO 14001 third
party certification.

Environment, Safety & Quality
Assurance Committee(Report, annual plan development)

PLAN

Implementationin accordancewith annual plan

Four Codes of RC

ACT
Corrective actions
Annual results
reportEnvironmental Conservation/
Safety and Disaster Prevention/
Occupational Safety and Health/Chemicals and Products Safety

Changes in GHG emissions

400

△30％

175

CHECK

114

300
53

Internal Audit

90

19

91

18

25

230

219

203

200

RC Audits

100

RC audits are activities for checking RC
activities at each plant, laboratory andaffiliate. They are carried out by Environment, Safety & Quality Assurance
Department in accordance with the RC
audit guidelines. In these audits, the auditors check whether RC activities, aswell as internal audits and patrols, arecarried out appropriately and the PDCA cycle is implemented
steadily, and compliance about environment, health and safety(EHS) at each site. Environment, Safety & Quality Assurance Department clarifies visible or potential problems related to EHS
and promotes improvements in response after clarifying the
problems, if any.
In FY2021, total of 6 RC audits were conducted for our plants,
research laboratories and affiliates.

0

220

2011

CarbonNeutrality

29

Volume of industrial waste generated
50.0
40.0
30.0

34.0

35.0

38.0

38.2

2018

2019

2020

2021

20.0
10.0
0.0
(1,000 tons)(FY)

Recycled volume/Final disposal volume■Recycled volume ■Final disposal volume

10.0
8.0
6.0
4.0
2.0
(1,000 tons)

8.7
7.1

6.4

5.8

1.2

0.9
2018

2019

1.1
2020

Nature Experience Learning at Nissan Bio-Park Nishi-Hongo

1.2
2021

(FY)

*Waste soil from Toyama Plant was added to the calculation from FY2021

254

Biodiversity Conservation

216

Net Zero2018 2019 2020 2021

2027Target 2050 Target(FY)

Index of GHG emission rate (FY 2011 as a base of 100)(%)

*Recycling rate (%) = [Recycled volume (ton)+Volume of valuable regenerative (ton)+Volume of reduction (ton)]÷ [Volume of waste generation (ton)+Volume of valuable regenerative (ton)] ×100

100

■Dinitrogen monoxide (N2O) ■CO2 emissions from non-energy use■CO2 emissions from energy use

100

We also established the “Nissan Bio-Park Nishi-Hongo” in2008 with the theme of returning to the lost nature, and the purpose of “creating spaces with biodiversity, mainly waterfrontand community-based forests that are suitable to inhabit forplants and animals, to provide places where employees of theplant and local residents can relax”. The park operated by Toyama Plant won the Biotope Grand Award at the 14th Biotope
Awards sponsored by the NPO Japan Biotope Association.
This time, we received high praise for our collaboration withthe “support team” consisting of volunteers from the community and the retired of the plant, which led to the award.

Through our responsible care activities, we further promotes the
3Rs (reduce, reuse, recycle) and strive to reduce industrial waste
emissions, while at the same time thoroughly implement control
measures to ensure that waste is disposed of properly. The volume of industrial waste generated in FY2021 slightly increased
than in FY2020, with a decrease in the recycled volume and aslight increase in the final disposal volume. As a result, the recycling rate* was 97.2%, a slight decrease from 97.3% in FY2020.

0.0(1,000 tons-CO2)

DO

Efforts to Reduce Industrial Waste

100

Biotope Grand Prize Awards Ceremony

Our corporate philosophy is “Contribute to the protection of the
global environment and the existence/development of humanity,
offering the value sought by society”. We engage in business activities that take into account biodiversity and help protect the
global environment. We have set the “establish and operate BioPark at Nissan Chemicalʼs plants” as a target for FY2027, and arepromoting biodiversity initiatives. In FY2021, a new biotope wascompleted at the Sodegaura Plant.

Web

Mitigation of Climate Change
https://www.nissanchem.co.jp/eng/csr_info/responsible_care/environment/reduction.html

80
57

60

50

48

50

Reduction of Industrial Waste and Pollutant Emissions
https://www.nissanchem.co.jp/eng/csr_info/responsible_care/environment/management.html

40
20
0

Responsible Care Management
Web https://www.nissanchem.co.jp/eng/csr_info/responsible_care/management.html

2011

Water Resources Conservation
https://www.nissanchem.co.jp/eng/csr_info/responsible_care/environment/effective.html

2018 2019 2020 2021 (FY)

Biodiversity Conservation
https://www.nissanchem.co.jp/eng/csr_info/responsible_care/conservation.html
Sodegaura Plant Biotope

Nissan Chemical Corporation

67

Integrated Report 2022

Nissan Chemical Corporation

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Integrated Report 2022

Responsible Care

Information Disclosure in line with TCFD Recommendations

Safety and Disaster Prevention
Lost-time injury frequency rate*
1.48
1.5

We carry out risk assessment, process risk predictions, and facility risk predictions by prior assessment for manufacture with theaim of ensuring safety, achieving stable operations, and improving our process safety capability. As a result, there were no explosions or other accidents in FY2021, but a small fire broke out at
the Toyama Plant. This was caused by a leakage of the heat medium used in the production of melamine from the shaft seal of thevalve, which ignited the heat insulator in contact with the heatmedium. Employees immediately put out the fire with fire extinguishers, and there was no human or property damage, and no
impact on the environment or neighborhood. We are taking thorough measures to prevent such a small fire from happening again
at all our plants and laboratories. Our plants, laboratories, and affiliates carry out various drills and training sessions such as
earthquake fire prevention drill every year, and are designed tomake us ready to respond to emergencies or accidents in a
speedy and reliable manner.

1.2

1.11
0.88 0.85 0.82

0.9

Nissan Chemical
Chemical industry

0.81

1.07

Support for TCFD

0.73

0.81

0.76

0.6 0.72

0.90 0.94 0.93

0.88

0.37

0.3

0.36 0.36 0.37 0.37

0.02010 1112

130.37 0.37
14

15

16

17

0.00

0.00
18

19

20 2021 (Year)* Number of deaths and injuries due to occupational accidents per million actual working hours

Promotion of Safety and Disaster Prevention, and Occupational Safety and
HealthWeb https://www.nissanchem.co.jp/eng/csr_info/responsible_care/safety.html

Management of Chemical Substances andProducts Safety

Disaster drills (Toyama Plant)

Promotion of Occupational Safety and HealthThrough our RC management system, we prevent occupational
accidents, promote the good health of staff, and build a comfortable workplace environment in our efforts to improve the level ofsafety and health at each business site. In addition, we carry out
various drills and training sessions annually with the aim of ensuring safety, achieving stable operations, and improving our process safety capability to make us ready to respond to emergencies or accidents in a reliable manner.
In 2021, there was no accident requiring staff to take time offfrom work, but seven cases of accidents not requiring staff totake time off from work. We will continue aiming to achieve zeroaccident by promoting risk assessment, prior-work risk predictions, risk predictions training, HHK*1, 5S*2, and appropriate wearing of protective equipment and by raising awareness of safety
through the safety meeting and the occupational safety newspapers.

GovernanceWe perform a risk assessment (prior assessment) of each step inhandling chemical products, such as the R&D, manufacture, sales
and revision. The risk assessment is performed based on legal
and regulatory information, safety data evaluated by internal orexternal laboratories, safety data obtained from literature, anddata on physicochemical properties and work environment conditions. Based on the results of risk assessment, we take appropriate measures; i.e., legal and regulatory compliance, improving facilities to reduce worker exposure at manufacturing sites,
improvement of operation procedures, clarification and documentation of the procedures, and the training, etc. These results arereported to all the relevant people in the Company.
In addition, we also participate in Long-range Research Initiative, an international initiative promoted by Japan Chemical
Industry Association (JCIA) that seeks to provide long-term support for research on the impact of chemicals on human healthand the environment. The activities we engage in aim to advanceresearch on the assessment of risks to human health and theenvironment.

Our group has established the Sustainability Promotion Committee, the Climate Change Committee, the Risk Management & Compliance Committee and the Environment, Safety & Quality Assurance Committee as sustainability promotion structure, and theBoard of Directors supervises the initiatives by discussing and resolving the content of deliberation at each committee.
As we have identified “mitigation of climate change” as oneof our materiality factors, we newly established the Climate
Change Committee in July 2022 where issues focused on climatechange are specifically discussed and examined.
We have also identified “supply of environmental-friendly
products and services” as one of the materiality factors, and weare committed to developing products and other services that
help achieve zero emissions and popularize bioplastics. Sales
and investment plans for these products are submitted to the
management meeting by the division in charge, and after approval, submitted to the Board of Directors.

Reagents management system
Synthetic compounds database●●

Research ●Laws and regulations check system
Disposal

Development

Products Lifecycle

Response to revision of laws and regulations
Laws and regulations revision information service●●Raw materials and products
Manufacture management
systemUse
External communication

Waste
management
system●Sales

Environmental data management system
Safety data sheet creation and management system●[Matters to be deliberated at the Board of Directors]
Policy planning related to sustainability
Long- and mid-term plans and annual plan for sustainability

We support the Paris Agreement, position “mitigation of climatechange” as one of the materiality factors, we have set a mid-termtarget (Scope1, 2) of “reducing GHG emissions by at least 30%
from FY2018 level by FY2027” aiming for achievement of carbon
neutrality in 2050 and have implemented.
In addition, we announced our support for recommendationsof Task Force on Climate-related Financial Disclosures (TCFD).
By disclosing our climate change-related information to all
stakeholders, including investors, and promoting dialogue, wewill strive to further improve our climate change efforts and disclosure, and further contribute to the realization of sustainable
society.

Risk Assessment in Products Lifecycle

Management of reagentsand synthetic compounds*1 HHK stands for Hiyari-Hatto (near miss incident) and Kigakari (alarming). It means the discovery of nearmiss incidents that are not linked directly to serious injuries or accidents but could have resulted in such injuries or accidents.
*2 5S stands for Seiri, Seiton, Seisou, Seiketsu, Shitsuke. These words mean “Sort” “Set” “Shine” “Standardize”“Sustain” respectively

Nissan Chemical announced our support for recommendations of Task
Force on Climate-related Financial Disclosures (TCFD) in August 2020.
We will strive to increase our corporate value by not only continuing
to promote our initiatives to address climate change such as measures
for reducing GHG emissions but also improving our information disclosure step-by-step.

● Climate Change Committee
In order to accurately grasp the risks and opportunities posedby the increasingly serious climate change problem, link themmore strongly to management strategies, and strengthen thecomprehensive measures against climate change, the Climate
Change Committee has been established as an independent organization, chaired by the president (COO) and consisting ofmembers from the Corporate Planning Department, business divisions, Planning and Development Division, Finance & Accounting Department, Purchasing Department, Production Technology Department, Environment, Safety & Quality Assurance
Department and Sustainability Promotion & IR Department.
In addition to being held regularly once a year, this committee meets as needed to analyze risks and opportunities related
to climate change, and to deliberate policies, targets, and plans,
etc. After approval by the management meeting, the following
matters are submitted to the Board of Directors.
[Matters to be deliberated at the Board of Directors]
Scenario analysis and countermeasures for identified risks
and opportunities
Long- and mid-term plans and annual plan focused on measures against climate change● Risk Management & Compliance Committee
The Risk Management & Compliance Committee, which is held
twice a year, has been established as an organization to enhancethe effectiveness of risk management, and to maintain and promote compliance.
The committee is chaired by the Chief Risk Management Officer (CRO/Director, Managing Executive Officer) who is appointed
by the Board of Directors, and is composed of the Risk & Compliance Managers of divisions and departments, plants and laboratories, and domestic consolidated subsidiaries appointed by the
CRO (heads of divisions/departments and plants/laboratories,
Presidents of domestic consolidated subsidiaries).
The Risk & Compliance Managers periodically conduct identification of risks, including climate change-related risks and assessment, formulate countermeasure plans, conduct self-assessment for status of implementation of the countermeasureplan and subject, formulate improvement plan, and regularly
perform education and training at each division/department,● Sustainability Promotion Committee
In order to strategically tackle global social issues including climate change, the Sustainability Promotion Committee, chairedby the officer in charge of the Sustainability Promotion & IR Department (Director, Managing Executive Officer and CFO) andcomposed of managing executive officers responsible for divisions and departments, has been established as an organizationthat considers and deliberates important matters. This committee meets regularly twice a year to deliberate policies, targets,and plans, etc. related to sustainability including climate change.
After approval by the management meeting, the following matters are submitted to the Board of Directors.

●

Management of Chemical Substances
Web https://www.nissanchem.co.jp/eng/csr_info/responsible_care/chemical.html

Nissan Chemical Corporation

69

Integrated Report 2022

*Paris Agreement/went into effect in 2016. The Paris Agreement aims to suppress the rise in average temperature well below 2°C (2°C target) as a long-term international goal, and to
suppress the rise in average temperature up to 1.5°C as further efforts.

Nissan Chemical Corporation

70

Integrated Report 2022

Information Disclosure in line with TCFD Recommendations
plant/laboratory and domestic consolidated subsidiary.
At the committee, above risk management activities and activity plans of next fiscal year are deliberated. Contents of deliberation are validated and reviewed at the management meetingat least once a year. After approval by the management meeting,the following matters are submitted to the Board of Directors.

chaired by the officer responsible for the Environment, Safety &Quality Assurance Department (Director, Managing Executive
Officer and CFO), has been established as the organization in
charge of promoting these activities, and has held its meetings.
At this Committee, while sharing information with the Sustainability Promotion Committee, long- and mid-term plans including the response to climate change, annual activities in eachplant/laboratory, summary of company-wide activities, and thetargets, goals, and action plans for RC in the next fiscal year, etc.
are deliberated.
At least once a year, the contents of deliberation are validated and reviewed at the management meeting. After approval by
the management meeting, the following matters are submitted
to the Board of Directors.

[Matters to be deliberated at the Board of Directors]
Identification of group major risks and their countermeasures
Mid-term plan and annual plan for risk and compliance● Environment, Safety & Quality Assurance Committee
Responsible Care (RC) activities, which are voluntary activities,
aim to ensure environment, health and safety throughout theentire processes from development of chemical products to
manufacturing, distribution, use, final consumption, disposal andrecycling. These activities also serve as a form of communication with society through the announcement of their results. The
Environment, Safety & Quality Assurance Committee, which is●Governance System[Matters to be deliberated at the Board of Directors]
Policy planning related to RC
Long- and mid-term plans and annual plan for RC

Board of Directors
Chairman & CEO
President & COO
Validation, Review

Submission(more than once per year)

Management
Meeting

Supervise
ReportSustainability Promotion
Committee(twice per year)
Chairman:
Officer responsible for
Sustainability Promotion & IR Dept.
Member: Managing executive officers
responsible for divisions &departments
Secretariat:
Sustainability Promotion Group,
Sustainability Promotion & IR Dept.
Matters to be deliberated: olicies related to sustainability●P

including climate change●M ateriality identification and

KPI setting/progress
management● Long- and mid-term plans●E valuation of the results ofannual activities and targets forthe next fiscal year based on theevaluation, etc.

Risk Management & Compliance
Committee(twice per year)

Environment, Safety & Quality
Assurance Committee(once per year)

Chairman:President & COO

Chairman:Chief Risk Management Officer (CRO)Member:Heads ofbusiness divisions
Planning and Development Div.
Purchasing Dept.
Corporate Planning Dept.
Sustainability Promotion & IR Dept.
Finance & Accounting Dept.
Production Technology Dept.
Environment, Safety & Quality
Assurance Dept.
Secretariat: Sustainability Promotion & IR Dept.

Member:R isk & Compliance Managers(Heads of divisions/departments andplants/laboratories, Presidents ofeach domestic consolidated
subsidiary)
Secretariat:R isk Management & Compliance Office,Corporate Planning Dept.

Chairman: Officer responsible for Environment,
Safety & Quality Assurance Dept.
Member:Heads ofbusiness divisions
Planning and Development Div.
Purchasing Dept.
Corporate Planning Dept.
Personnel Dept.
Sustainability Promotion & IR Dept.
Production Technology Dept.
Environment, Safety & Quality
Assurance Dept.
plants and laboratories
Secretariat: Environment, Safety & Quality
Assurance Dept.

Climate Change Committee(once per year)

Matters to be deliberated:●R isk identification and assessment
including climate change-relatedrisks, and formulation ofcountermeasure plans● S elf-assessment for status of
implementation of thecountermeasure plan andsubject, and formulation of
improvement plan
● A nnual activity plan, for the next
fiscal year, etc.

Matters to be deliberated:●A nalysis and assessment ofrisks/opportunities andcountermeasures dedicated toclimate change●S trategies, long- and mid-termplans, annual activities, targets,
etc. for risks and opportunities.

Risk Management

Strategy

In the framework of the Risk Compliance Committee, we clarify
risks including climate-change related risk taking into accountthe business characteristics of each division and the surrounding
businesses, including global political, economic and social conditions. For each risk identified, a risk assessment is conductedfrom the viewpoint of probability and impact on business, and arisk map is subsequently created based on the results of the risk
assessment to identify the Group Major Risks.
We deliberated the Group Major Risks at the Risk Management & Compliance Committee and approved them at the Boardof Directors.

The TCFD recommendations require a scenario analysis* to understand how the risks and opportunities caused by climatechange give impact on companiesʼ finances.
Referring both 2°C scenarios in which transition to decarbonized society realizes (mainly transition risk and opportunity) and
4°C scenarios in which climate change progresses (mainly physical risk and opportunity), we identified business risks and opportunities, examined their importance, and summarized impact on
the Company and our strategies.
The scope of analysis is the entire business of the Company,
and analysis period is up to 2030, which is the final year of ourprevious long-term business plan.
At the 26th UN Climate Change Conference of the Parties(COP26), it was agreed to pursue efforts to suppress the rise inaverage temperature within 1.5 °C. In order to understand the impact of policy trends and social changes to achieve the 1.5 °C target on our business, we plan to review the scenario analysis including the implementation of scenario analysis using the 1.5 °C
scenario during FY2022.

● Management Process of Group Major Risks
The department in charge and the risk owner are decided foreach selected Group Major Risk, the Group Major Risks countermeasure plan is formulated mainly by the Risk & ComplianceManager of the department in charge, and after deliberation at
the Risk Management & Compliance Committee, countermeasureplan is resolved at the Board of Directors. Implementation statusof countermeasures are deliberated at the Risk Management &Compliance Committee, and the results of the deliberation are
also reported to the Board of Directors.
Regarding typhoon and torrential rain, which are one of theGroup Major Risks, we set the KPI of “formulating BCP where
products account for 50% of ordinary income by FY2021” at eachplant as a response to the risk of increasing equipment restoration costs and reducing production at major plants, and formulated BCP where products account for 76% of ordinary income
as of the end of FY2021.
Identification of risks and assessment of the impact on thebusiness and the probability are conducted on a regular basis toperiodically review the Group Major Risks.

●Referenced Scenarios
2°C Scenario*1*3
Sustainable
Development Scenario(SDSs)*4● IEA-ETP 2°C Scenario(2DS)● IEA-WEO

Transition Risk
and
Opportunity
Physical Risk
and
Opportunity● IPCC

Integrated Report 2022

RCP2.6d2PDF*6● IEA-WEO New Policies

Scenario (NPS)● IPCC RCP8.5● MEXT d4PDF*1 Scenarios when necessary measures will be implemented to keep global average temperature rise below 2°C
compared to pre-Industrial Revolution era*2 Scenarios in which the global average temperature will rise by 4°C at the end of the 21st century compared
to pre-Industrial Revolution era*3 International Energy Agency “World Energy Outlook” (2019)*4 International Energy Agency “Energy Technology Perspectives” (2017)*5 Intergovernmental Panel on Climate Change*6 Ministry of Education, Culture, Sports, Science and Technology

Please see the following web page for process for identifying Group Major Risks, risk map, Group Major risks,and countermeasures against risks.

●Process of Risks and Opportunities Identification

https://www.nissanchem.co.jp/eng/csr_info/risk_management/policy.html

Step1*Scenario analysis is a method for anticipating the effects of global warming and climatechange and changes in the business environment caused by long-term policy trends related to climate change, and for examining the impact that such changes may have on
the company’s business and management.

Step2● C larify the value chain and stakeholders, and sort out

the factors that affect our business● I dentify risks and opportunities based on the above

scenarios and other external data

● I dentify particularly important risks and opportunities

Step3

Matters to be deliberated:●L ong- and mid-term plans including
the response to climate change●A nnual activities in each plant/
laboratory●S ummary of company-wide activities●T argets, goals, and action plansfor RC in the next fiscal year, etc.

from those of Step2, considering the probability andthe impact on our business (human loss, financial
impact, etc.)[Divisions & Departments] Internal Audit Dept., business divisions, Planning and Development Div., Intellectual Property Dept., Purchasing Dept., Corporate Planning
Dept., Personnel Dept., Sustainability Promotion & IR Dept., Finance & Accounting Dept., Digital Transformation Dept., Production Technology
Dept., Environment, Safety & Quality Assurance Dept.

71*5● MEXT

Cooperation

Nissan Chemical Corporation

4°C Scenario*2

Nissan Chemical Corporation

72

Integrated Report 2022

Information Disclosure in line with TCFD Recommendations● Scenario Analysis Results(climate change risks/opportunities)
For the introduction of carbon taxes, which is identified as an important risk in the 2°C scenario, we plan to introduce internal carbon pricing to further promote investment that takes into accountthe reduction of GHG emissions (decarbonization investment).
In addition, in response to market changes due to increasing
demand for environmental considerations, we assume that we areable to expand business opportunities in the Environment & Energy field, which is one of the main business domains of our previous
long-term business plan “Progress2030” launched in 2016 andnew long-term business plan “Atelier2050” announced in 2022.
Moreover, our decarbonization investment and productcharacteristics have made us more carbon-efficient compared
to whole chemical industry. We believe this will benefit from in-creasing demand for initiatives to address climate change frominvestors and other stakeholders.
Meanwhile, we will respond to the risks of impacts on plant
operations and supply chains due to increase in abnormal
weather, which was identified in the 4°C scenario, by formulating
and revising BCPs (Business Continuity Plan) for our main products and by multiple sourcing of several key raw materials, etc.
In regards to market changes caused by rising temperature andabnormal weather, we see opportunities in such as agrochemicals and disinfectants for drinking water due to water shortages
and infection diseases.
As a “future-creating company that grows through seeking
to enrich people and nature”, we will further refine the core technologies that we have cultivated over the years and continue towork to provide new value that contributes to peopleʼs lives.
All: All businesses Agri: Agricultural Chemicals business Chem: Chemicals business

Scenario

Factors
 trengthening●S

regulations on
GHG emissions

 hanges in●Cenergy policy°2 C Scenario

 hanges in●Cenergy demandand supply

 arket changes●M

due to increasing
demand forenvironmental
consideration

Social Change

Relevant
Business

Degree of
Impact● I ncrease in operating costs due to● I ntroduction ofcarbon pricing

All

introduction of carbon pricing, such ascarbon taxes (If the same conditions meetworldwide, maintaining competitivenessis possible.)Risk

fuel andfeedstock hange in●Ctransportation
costs● I ncreased needfor low-carbon
products

All(Large)● I ncrease in costs due to higher fueland feedstock prices● I ncrease in transportation costs

Risk(Moderate)

investment

feedstockconversion atplants● O ptimization of
nitric acidproduction
capacity● U pdate toenergy-saving
equipment, etc.

● I ncrease in demands for products

R&D

Opportunity

related to electric energy such asbattery materials and photoelectric
conversion materials due to changes inenergy policies

All

Risk
Opportunity● I ncrease inabnormalweather(Moderate)

reputation due to increasing criticism
of bulk use of fossil fuels● I mprovement of ESG evaluation andreputation through advanced initiatives
and information disclosure(Moderate)environmentalfriendly products
and services● A ppropriate
information
disclosure● Formulation ofAll

operations and supply chains due toescalation of natural disasters(Moderate) ecline in the●D°4 C Scenario

available water(freshwater)
resourcesbusiness
continuity plan
(BCP) for major
products at eachplant

● I ncrease in risk of impacts on plant

Risk

Chem

Opportunity● I ncrease in sales of disinfectants due

to increase in global demand for
drinking water

Category
Reduction of GHG
emissions

Metrics(Moderate)

Scope

FY2021 Targets

FY2027 Target

GHG emissions (Scope1+2)

Absolute
emissions

Nonconsolidated

Reducing by 20% from
FY2011 level

Reducing by at least 30%
from FY2018 level

GHG emission rate per unit tosales (Scope1+2)

Intensity

Nonconsolidated

Improving by 40% from
FY2011 level―

Energy consumption rate perunit to sales

Intensity

Nonconsolidated

Improving by 30% from
FY2011 level―

Energy consumption● I ncrease infrequency andenhanced
intensity of heavy
rain/flooding
 nhancement of●Eintensity andfrequency oftyphoons
 eavy snowfall●H●Responsible Care Mid-term Plan (FY2016-2021) Mid-term Targets and Long-term Target● D evelopment of● D eterioration of ESG evaluation and xpansion of ESG●E

Measuresactors by optimizing production capacity of nitric acid in FY2017,energy saving by improving the equipment capacities and renewal of aging facilities, etc., contributed to consistent GHG
emissions reduction. Although, by these initiatives, in FY2020, we
achieved all of our mid-term targets up to 2021 one year aheadof target year, in FY2021, GHG emissions and energy consumption increased resulting in the short of the FY2021 target of “Energy consumption rate per unit to sales” because of an increasein production volume of ammonia-based products due to theglobal economic recovery from the impact of the COVID-19.
The Companyʼs GHG emissions and energy consumption
have been subject to third-party verification since FY2018. Goingforward, we will continue to consider reducing GHG emissions
and strive to reduce environmental burdens as well as disclose
highly reliable information.

In our Responsible Care Mid-Term Plan (FY2016-2021), we set reduction targets for both absolute emissions and intensity. In addition, from the results of the scenario analysis, we recognize thatthe introduction of carbon taxes is the largest climate change-related risk. We think reducing the GHG emissions (Scope1 + 2) of
Nissan Chemical Corporation, which accounts for about 95% ofconsolidated GHG emissions, is important for reducing this risk.
Therefore, in January 2021, we newly set Nissan Chemical
Corporationʼs long-term target of “reducing GHG emissions(Scope1 + 2) by 30% from FY2018 level by FY2030”, while we
moved it forward three years “reducing GHG emissions (Scope1+ 2) by at least 30% from FY2018 level by FY2027” in the midterm business plan “Vista2027” announced in FY2022. The degree of progress for this reduction target is reflected in the ESGlinked portion of officersʼ performance-related remuneration.
Fuel conversion to natural gas at the Toyama Plant, reduction of dinitrogen monoxide (N2O) emissions generated from re-● F uel and rice change in●P● I ncreased

demand frominvestors foraddressing
climate change

Impact on Business

Metrics and Targets●Climate Change-related Data
Scope

Unit

2011

2018

2019

2020

2021

Target (Target year)

Scope1

Nonconsolidated

t-CO2e369610245469221264216276231713―

Scope2

Nonconsolidated

t-CO2e79451

117926105390102182113623―

Scope1+2

Nonconsolidated

t-CO2e449061363395326654318458345336359248（2021 ）
254377（2027 ）GHG emission rate per unit
to sales*1 (Scope1+2)

Nonconsolidated

t-CO2e/million yen

4.06

2.33

2.04

1.96

2.03

2.44（2021 ）Scope3*2

Nonconsolidated

t-CO2e―703562767799763007803461―

Energy consumption rate*3

Nonconsolidated

*4

100

73.8

70.8

67.9

72.6

70（2021 ）Scope1

Consolidated*5

t-CO2e253785228791220243238958―

Scope2

Consolidated*5

t-CO2e128647116724116516

124663―

Scope1+2*6

Consolidated*5

t-CO2e382432345514336759363621

―

95.0

94.5

94.6

95.0

―

● R eduction of planted area due to eduction of●R arket changes●M

caused by risingtemperature andabnormalweatherincrease in frequency and enhanced
intensity of heavy rain/flooding● R eduction of planted area due todifficulties in securing irrigation water (Moderate)

Risk

planted area
Agri

● I ncrease in pests,

weeds, andpathogens● I ncrease in mass

infection anddiseases● I ncrease in opportunity to develop

Opportunity

new agrochemicals● I nfluence on sales of existing

agrochemicals due to resistance
expression(Moderate)● I ncrease in demand for related

R&D

Opportunity

Nissan Chemical Corporation73

products and services due to growing
medical needs for tropical infections
and diseases

Integrated Report 2022

● D evelopment ofenvironmentalfriendly products
and services

Non-consolidated/consolidated (Scope1+2)(%)―*1 Amount of emissions (t-CO2e)/non-consolidated sales (million yen)
*2 Data of each category: https://www.nissanchem.co.jp/eng/csr_info/index/esg_data.html*3 Energy consumption/non-consolidated sales*4 FY2011 as a base of 100*5 Nissan Chemical Corporation and consolidated subsidiaries with manufacturing facilities. (Nihon Hiryo Co., Ltd., Nissan Chemical America Corporation, NCK Co., Ltd.)*6 Due to rounding off figures, there are places where the sums of above scope1 and scope2 do not match the total.

(Moderate)

Nissan Chemical Corporation

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Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Compliance
Since our group regards compliance with laws and social norms as a condition for the survival and development of thecompany, our Course of Action stipulates that we need to conduct “sensible business activities” and conduct ourselves as“good corporate citizens and decent members of society”. In response, we have recognized that compliance means complying with laws and social norms and established a compliance basic policy, in addition, we have been promoting complianceactivities such as training sessions on corporate ethics for all employees.

Activities
Top Message Transmission

Compliance Training

Every year, top message is transmitted to all employees in orderto clearly convey the Groupʼs stance for compliance.

We hold training sessions on corporate ethics for officers andemployees, including new employee, working to ensure thateach and every one of us looks at compliance and actively promotes it.
In addition, regarding various laws and regulations, we regularly hold training on important business themes such as the“Act against Delay in Payment of Subcontract Proceeds, Etc. to
Subcontractors”, insider trading regulations, and regulations on
the “Combating Bribery of Foreign Public Officials”. We also
conduct training with an emphasis on practicality, such as systematically holding in-house seminars themed on familiar legal
matters, lectured by internal instructors.
Various trainings are provided to officers and employees ofour company as well as those of affiliated companies as efforts
to improve the knowledge of the entire Group.

Compliance Status Reporting

Compliance Basic Policy

Twice a year, the entire Group, including each division/department,
plant/laboratory, and affiliate, checks the status of compliance,
and in case of a risk of compliance violation or potential compliance violation, the Risk Management & Compliance Office receives
reports including the response status. The content is reported to
management and shared within the Group through the Risk Management & Compliance Committee to help prevent recurrence.

1. W
 e consider compliance to be an important management issue and ensure thorough compliance in every aspect of its business activities, thereby establishing corporate ethics.
2. A ll officers and employees of Nissan Chemical Group shall be sufficiently aware of compliance and prevent the occurrence of a compliance violation.
3. I n the event that a compliance violation has occurred or is likely to occur, we take aprompt and appropriate response.

Consultation Hotline

SystemIn our group, the Risk Management & Compliance Committee,
which is held twice a year, has been established as an organization to enhance the effectiveness of risk management, and tomaintain and promote compliance. The committee is chaired by
the Chief Risk Management Officer (CRO), who is appointed at theBoard of Directors, and is composed of the Risk & ComplianceManagers of each division/department, plant/laboratory, and domestic consolidated subsidiary appointed by the CRO. The important matters and countermeasure plans, etc. related to compliance are approved at the Board of Directors after discussion at
the committee.
The Risk Management & Compliance Office under the Corpo-

rate Planning Department has been established as a specializedorganization to promote continuous improvement in all of ourgroupʼs compliance activities. In addition to providing educationand guidance on risk management and compliance, the Risk
Management & Compliance Office receives reports on the statusof compliance with laws and regulations and measures related
to compliance, etc. in each department on a regular basis from
Risk & Compliance Managers, and when necessary, supports
improvement, and shares information within our group.
Furthermore, we have established a system to prevent compliance violation or resolve the problem early on, including theConsultation Hotline as an internal reporting system.

●Number of Compliance Violations
Indicator

Scope of reporting

Unit

FY2018FY2019FY2020

FY2021

Consultation Hotline Reports

Consolidated*

Cases

3

2

2

1

Legal actions received for anti-monopoly/
anticompetitive practices (under investigation)

Consolidated*

Cases

0 (0)

0 (0)

0 (0)

0 (0)

Fines charged and settlement fees for antimonopoly/anticompetitive practices
Confirmed corruption incident(under investigation)

Consolidated*

1,000 yen

0

0

0

0

Fines charged and settlement fees forcorruption

Consolidated*

Other incidents related to compliance(excluding environmental)

Consolidated*
Consolidated*

1,000 yen
Cases
1,000 yen

0 (0)
0
0
0

* Includes domestic unconsolidated group companies

0 (0)
0
0
0

0 (0)
0
0
0

0 (0)
0
0
0

Compliance Manual
The Compliance Manual sets forth rules so that executives andemployees, etc. (regular employees, contract employees, parttime workers, temporary workers and dispatched workers) of
the Nissan Chemical Group comply with laws and regulations,company rules, social norms, and ensure compliance. It is regularly reviewed depending on the situation, such as the enforcement and revision of laws and regulations. In addition, by including information about the Consultation Hotline system anddetails about its features in the Compliance Manual, we are raising awareness about our internal reporting system.

As a corporate citizen

As a manufacturer

As a stakeholder of the Company

 omply with the laws/regulations of the industry●C● Ensure the safety of products● Prohibit conflict of interest

 erminate any relationships with antisocial forces●T● I mplement safety and disaster● Prohibit insider trading omply with antitrust laws●C

 onduct fair transactions with suppliers and com●C

Cases*Refer to the list on P77 for information on training in FY2021

Compliance Manual Rules estrict contributions and political donations●R

Consolidated*

Fines charged and settlement fees for othercompliance related incidents(excluding environmental)

We have Consultation Hotline to prevent compliance violation or resolve the problem early on. When an employee discovers a compliance violation or potential compliance violation, the employee shalladdress the problem in normal operation in principle, through measures that include reporting the matter to their superior. However,if the employee thinks it is difficult to address the problem promptly
and effectively, they can use the Consultation Hotline.
The contact point for reporting shall be the Risk Management & Compliance Office, outside attorneys, or outside Audit &Supervisory Board members, and the means for reporting may
be selected from e-mail, mail, or telephone. Upon receipt of a report, the contents are reported to the Audit & Supervisory Board
members. The Board of Directors periodically receives reports
from the Risk Management & Compliance Office on the status of
the operation of the internal reporting system and supervises it.
While accepting anonymous consultations, we have establisheda system that allows us to provide peace of mind by clearly defining in our rules the prohibition of interference with investigations, finding informants, and harassment.

ply with the “Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors”
 revent unfair competition●P omply with laws and regulations related to secu●C
rity trade control
 omply with laws and regulations related to im●C
port/export
 rohibit excessive entertainment and gifts●P rohibit bribery of foreign officials, etc.
●P
● I mplement appropriate marketing and advertising● I mplement appropriate tax payment based on the
tax systems in each country and international tax
standards● Protect the environment

prevention measures

As a public corporation

As a person who handles work-related information●D isclose management information●M anage confidential corporate●C onduct appropriate accounting

processing

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Integrated Report 2022

As a member of the workplace●C omply with work regulations●R espect human rights; prohibit

discrimination●P rohibit sexual harassment●P rotect privacy●E nsure the health and safety of theworkplace●P rohibit political and religious

Nissan Chemical Corporation76

information appropriately●U se information systems appropriate-activities

Nissan Chemical Corporation●U se corporate assets appropriately

Integrated Report 2022ly

●M anage personal information

appropriately●P rotect intellectual property rights

Profile

Compliance

Sustainability

Nissan Chemical Group Anti-Corruption
Policy (Excerpt)

Our group strives to ensure the transparency of transactions. In
our compliance manuals, we have specified matters to be observed: Comply with antitrust laws, Conduct fair transactions
with suppliers and comply with the “Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors”, Prevent
unfair competition, Prohibit excessive entertainment and gifts,
and Prohibit bribery of foreign officials, etc. With regard to anti-corruption advocated by the 10 principles of the United Nations Global Compact (UNGC), in April 2018, we joined the UNGC,
and in 2019, we formulated anti-corruption policies covering ourcompany, affiliated companies and their subsidiaries in April
2018.

We are promoting risk management under the supervision of the Chief Risk Management Officer (CRO) with the aim ofcontributing to the achievement of our management strategic goals through recognizing the various risks involved in the
Nissan Chemical Group, preventing the occurrence of loss risk and minimizing the impact of their occurrence.

1. Definitions“Corruption” means the abuse of entrusted official
authority for personal or company gain, including
bribery.
“Bribery” means that, when company conducts its
businesses,- any of its officers or employees provides improper
benefits to a third party for the purpose of inducing athird party to conduct fraudulent or illegal acts, orupon request from a third party, or- any of its officers or employees demands or receives
improper benefits from a third party.

Risk Management Basic Policy
1. W
 e place top priority on the safety of the lives of officers and employees of the Nissan Chemical Group.
2. W
 e consider risk management as an important management issue, and engage in the activities from a company-wide perspective.
3. A
 ll officers and employees of the Group shall be sufficiently aware of risk management,
strive to improve their abilities, and endeavor to prevent the occurrence of loss risk.
4. We promptly share the information on risk throughout the Group.
5. W
 e make efforts to respond promptly and accurately to the occurrence of loss risk and tominimize losses.

2. Commitment to Anti-Corruption
3. Compliance with respect to Anti-Corruption
The “Unfair Competition Prevention Act”, the “U.S.
Foreign Corrupt Practices Act”, and the “Anti-Unfair
Competition Law of the Peopleʼs Republic of China”
4. Remediation
In the event that the Nissan Chemical Group violates
this Policy in the course of its business activities, it
shall make efforts to remedy and correct the said
violation through appropriate means and fullyc ooperate with inv es tigations b y the relevant
authorities.

Web

Compliancehttps://www.nissanchem.co.jp/eng/profile/compliance.html
Promotion of fair-tradinghttps://www.nissanchem.co.jp/eng/csr_info/communication/employee/
acp.html●Measures for Promoting Compliance (FY2021)
General ComplianceDirector and management level compliance training, newly-appointed managers compliancetraining, new employee training

Anti-monopoly Act and Act
against Delay in Payment of
Subcontract Proceeds, Etc. to
Subcontractors

Training related to the Anti-monopoly Act and Act against Delay in Payment of Subcontract
Proceeds, Etc. to Subcontractors; Internal audit related to the Act against Delay in Payment of
Subcontract Proceeds, Etc. to Subcontractors

Information Management

Information management training; Internal audit related to information management and My
Number Act related management

Insider Trading Regulation

Training for insider trading prevention

SystemThe Risk Management & Compliance Office under the Corporate
Planning Department has been established as a specialized organization to promote continuous improvement in all of our risk
management activities.
In addition, the Risk Management & Compliance Committee,
which is held twice a year, has been established as an organization to enhance the effectiveness of risk management, and tomaintain and promote compliance. The committee is chaired by
the Chief Risk Management Officer (CRO), who is appointed at theBoard of Directors, and is composed of the Risk & ComplianceManagers of each division/department, plant/laboratory, and domestic consolidated subsidiary appointed by the CRO.
The Risk & Compliance Managers periodically conduct risk
identification and assessment, formulate countermeasure plans,conduct self-assessment for status of implementation of thecountermeasure plan and subject, formulate improvement plan,and regularly perform education and training at each division/

department, plant/laboratory and domestic consolidated subsidiary.
The important matters related to risk management andcountermeasure plans, etc. are approved at the Board of Directors after discussion at the committee.

Overall Risk Assessment Process
We clarified risks taking into account the business characteristics
of each division and the surrounding businesses, including global
political, economic and social conditions. Subsequently, risk assessment was conducted from the viewpoint of probability andimpact on the business. By following the assessment, a risk map
was created and Group Major Risks were identified. The contents
of major risks were deliberated at the Risk Management & Compliance committee and approved at the Board of Directors.

Board of Directors
Risk Management& Compliance Committee
CRO
Risk Management & Compliance Office,Corporate Planning Department

Training for the prevention of corruption and Combating Bribery of Foreign Public Officials(Secretariat office)Risk & Compliance Manager
Security Export Control
Consultation Hotline
Other

Corporate Data

Risk Management

Anti-corruption Initiatives

Anti-bribery

Value Creation & Growth Strategies

Foreign Exchange Law related training(Each division/department,
plant/laboratory, anddomestic consolidated subsidiary)

ReportContinuous dissemination of related information via the in-house newsletter and posters
Training for newly-appointed board members, training for board members, and contract-related
training

Nissan Chemical Corporation

77

Integrated Report 2022

Nissan Chemical Corporation

Sustainability Promotion
Committee
Climate Change Committee
Environment, Safety & Quality
Assurance Committee

78

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Risk Management●Overall Risk Assessment Process
Creation of risk list (tentative) andrisk-related questionnaire■ Create risk list (tentative) after identifying potential
risks faced by the Nissan Chemical Group■ Create risk-related questionnaire based on the list
created

Identification of Group Major Risks●Group Major Risks and Countermeasures

Implementation of survey

Aggregation/Analysis of survey results■ Conduct risk-related survey targeting Risk &Compliance Managers at each division/department,
plant/laboratory, domestic consolidated subsidiary,
and affiliate■ Aggregate the survey results and assess the
G ro u p ʼ s r i s ks b a s e d o n d e g re e o f i m p a c t a n dprobability of occurrence

Creation of overall Group risk map■ Select Group Major Risks based on the risk map andcurrent conditions of the Group■ Create an overall Group risk map based on the
results of executive interviews■ Deliberate regarding Group Major Risks at the Risk
Management & Compliance Committee and approvethem at the Board of Directors

Group Major Risk

Summary of Risk

Countermeasures against Risk

Delay/Discontinuance of Product andTechnology Development
Advent of Innovative Technology

Risk of the failure of payback of invested capital to
R&D
Risk of losing competitive power of our products

Failure of Business Portfolio Strategy

Risk of decline in business performance due to thefailure of the business portfolio strategy

Expanding/reviewing existing
businesses and products
Evaluating periodically the degree ofachievements of strategies establishedin the mid-term business plan for new
businesses and products, and making
correction

Difficulty in Procurement of Specific
Raw Materials

Risk of being unable to supply the product tocustomer due to the discontinuance of specific raw
materials

Taking countermeasures to stabilize
procurements based on the nature of
the businesses

Fire/Explosion

Risk of suspension of business activities and thedeath or injury of many employees, and being suedby neighborhood resident for the damage by fire/
explosion at plant

Establishing and operating a safety anddisaster prevention management
systemRisk of reimbursement for large expenses bycustomers and discontinuance of transactions whena product liability-related accident or examination
data fraudulent occurs involving a product containing
materials provided by our company

Preventing troubles/misconducts about
quality through thorough governanceInfringements of Intellectual Property
RightsRisk of being subjected to a large amount of damages
and product injunction claims from other company
due to infringement on other company’s patent

Making continuous improvements of “IPverification process” to reduce the riskof infringing on other companies’
patents, and promoting education withand prevailing the process

Occupational Accident

Risk of being subjected to a damage claim due toserious accidental deaths and injuries involving
employees

Establishing and promoting an
occupational safety management
systemViolation of Laws
Revision/Tightening of Laws/
Regulations
Revocation of Governmental
Approvals, Licenses, or Registrations/
Procedural Mistakes
Licenses/Registrations
Revocation/Lapse of License/
Qualification due to Incomplete
Renewal Procedures

Risk of administrative disposition or sanction, suchas suspension of business or payment of surcharges,
due to violation of laws or regulations, and, alongwith this, risk of unwilling discontinuance of sales of
product, or unwilling change in business or capital
investment plan

Optimizing the operation ofmanagements of legal regulations andenhancing education to improve all
employees’ mind and knowledge

Torrential Rain/Flood
Earthquake/Tsunami
Typhoon/Storm Surge

Risk of damage of facilities, death or injury of many
employees, and suspension of business activities due
to a massive earthquake or a large typhoon

Reviewing and strengthening
countermeasures to enable earlyrecovery/business continuity

Cyber Attack/Information Leakage

Risk of shut-down of operations for a long period oftime, and losing credibility of customer and society
because of leak of customer’s or the Company’s
confidential information by cyber attack

Considering and promoting
countermeasures from the prospectiveof “prevention”, “damage minimization”
and “education”

Insufficient Governance of Overseas
Subsidiaries and Offices

Risk of losing credibility due to detection of fraud atoverseas subsidiary and office caused by inadequate
control

Establishing rules and systems tostrengthen governance of thecorporate group

Insufficient Consideration for CSR at
Suppliers

Risk of deterioration of reputation and decline inbusiness performance due to environmental
destruction and violations of social ethics bysuppliers where we procure raw materials

Making CSR evaluations of andfeedbacks to suppliers and supporting
their improvements

Failure to Achieve the Target of
Reducing GHG Emissions

Risk of deterioration of reputation from ourstakeholders due to delay in efforts to reduce GHG
emissions

Establishing a company-wideorganization, promoting initiatives andmanaging the progress

Delay in Human Resource Development(Cultivation of Diverse Human
Resources)

Risk of personnel shortage which occurs in eachdivision due to delay in the human resource
development

Enhancing programs to strengthen
recruiting and education for realizing
the ideal organizational state/humanresource image

Outbreak of infection/Disease in aGroup

Risk of being affected to the business continuity due
to a large number of employees contracting thedisease and their inability to work

Continuously promoting
countermeasures to prevent being
infected and the spread of the infection

Executive interview■ Have an interview with each executive about theirviews on the Groupʼs risks from a management
perspective

Quality Defect/Recall
Quality Falsification

Severe●Risk Map

Risk Category
Key Process Risk
Supportive Process Risk
External Environmental Risk
Management Process Risk

Group Major Risk

Impact on the business

Fire/Explosion

Earthquake/
TsunamiQuality Defect/
RecallQuality
Falsification

Delay/Discontinuanceof Product andTechnology Development

Insufficient
Consideration for
CSR at Suppliers

Violation of Laws

Revocation of Governmental
Approvals, Licenses, orRegistrations/
Procedural Mistakes

Revision/Tightening of Laws/
Regulations

Advent ofInnovative
Technology

Outbreak ofinfection/
Disease in a Group

Bribery

Labor Dispute/
StrikeDrain-out of
Human Resources

Infringements ofIntellectual
Property Rights

Discrimination/
Harassment in
the Workplace

Revocation/Lapse ofLicense/Qualification
due to Incomplete
Renewal Procedures

Typhoon/
Storm Surge

Failure to
Achieve theTarget of Reducing
GHG Emissions

Inadequate
Response to
Customer

Cyber Attack/
Information Leakage

Probability

Nissan Chemical Corporation

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Integrated Report 2022

Difficulty in
Procurement ofSpecific Raw Materials

Damage or
Failure of Facility
and Machinery

Torrential Rain/
Flood

Failure ofBusiness Portfolio
Strategy

Occupational
Accident

Market Change

Delay in
Human Resource
Development
Insufficient Governanceof Overseas
Subsidiaries andOfficesHigh

Nissan Chemical Corporation

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Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Respect for Human Rights
In April 2019, the Nissan Chemical Group formulated the Nissan Chemical Group Human Rights Policy
with advice of outside experts and approved at the Board of Directors, in accordance with the principles
on fundamental rights listed in the International Bill of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work and other international norms on human rights. This policy covers all
individuals and groups that may be affected through the business activities of our group.

Activities
Nissan Chemical Group Human Rights
Policy (Excerpt)●Human Rights Due Diligence Process
Investigation of Human Rights Risk

Human Rights Risk Assessment■ Based on the UNEP FI (United Nations Environment Programme Finance Initiative)
Human Rights Guidance Tool and other guidances on various human rights, aswell as our existing internal information such as risk assessment, we investigatedhuman rights risks that could arise in our business activities, and identified which
stages of our value chain could occur and what impact they could have on anyone.

■ We assessed the “impacts on human rights” and “relations with the Group” foreach identified risk. “Impacts on human rights” was assessed based on “impact(severity)” and “probability” based on the UN Guiding Principles on Business andHuman Rights (UNGP). “Relations with the Group” was evaluated based on theconcept of the “Arc of Human Rights Priorities” of the Danish Institute for Human
Rights.

Identification of Risks to be PrioritizedDialogue with Stakeholders Including Experts■ According to the human rights risk map, we identified risks which we need toprioritize. The result was discussed by the CSR Committee (current Sustainability
Promotion Committee) and resolved at the Board of Directors.

■ Based on the risk assessment results, we had dialogues with stakeholders
including experts.

Educational Activity/Awareness-raising Activity
With the aim of educating employees and raising their awarenessabout human rights policy, and promoting understanding for the
purpose of practicing respect for human rights, we conductedgroup-type training for the Directors and managers in FY2020. In
FY2021, we conducted e-learning for all employees.

The Nissan Chemical Group supports international standards including the United Nations Global Compact, theUnited Nations Guiding Principles on Business and Human Rights, and any other relevant standards for humanrights. This Nissan Chemical Group Human Rights Policy(this “Policy”) has been established to promote efforts
aimed at respecting human rights of all relevant stakeholders including employees.
This Policy complements the Nissan ChemicalGroupʼs position with respect to compliance and respectfor human rights, and shall apply to all officers and employees working for the Nissan Chemical Group.

[Human Rights Training]
For Directors and managers
● Importanceof human rights due diligence (conducted in
FY2020)e-learning training● Elementaryknowledge of business and human rights:
Participation rate 79% (as of March 2022)

1. Respect for Human Rights
2. No Infringement of Human Rights
3. Employment and Labor
Prohibition of forced labor and child labor, good labor-management relations, fair and equitable remuneration, and elimination of discrimination
4. Remediation
In the event that the Nissan Chemical Group causes
or contributes to an adverse impact on human rights
in the course of its business activities, it shall makeefforts to remedy and correct such impact throughappropriate means.

■ In keeping with the opinions and advices, we conducted a reassessment of humanrights risks and created the human rights risk map.

●Risks to be Prioritized
Risks to beprioritized

Access to
RemedyGroup could be
affected

Major human rights risks

All Stakeholders

Lack of appropriate action whenhuman rights violations occur

Status of Efforts● E stablishment of whistle-blowing hotline (consultation hotline) foroverseas affiliates● R aising awareness of the whistle-blowing hotline on the intranet,compliance training, posters, etc.

● Regular health checkups● S tress check test

Human Rights Due Diligence Initiatives
Our group is working to establish a system of human rights due
diligence to identify and mitigate negative impacts on humanrights.
In FY2020, with the cooperation of outside experts, we identified and assessed risks that could have a negative impact on human rights through our business activities in major businesses
and their value chains (risk mapping). We also exchanged opinions with stakeholders with the purpose of confirming consensus and differences in views on the results and incorporating
the opinions of stakeholders. These opinions were reflected in
the results of the evaluation, and we identified the risks which
we need to prioritize for the Group.
In FY2021, we surveyed the status of efforts to address eachrisk through an in-house questionnaire. We plan to continue tostrengthen measures with reflecting the opinions of stakeholders, and regularly review our human rights risk assessment andpriority risks.

System
Our group has established the Sustainability Promotion Committee, whose secretariat office is Sustainability Promotion Group
under Sustainability Promotion & IR Department, as an organization to promote the activities for human rights. The committee isheld twice a year. The long- and mid-term plan and annual plan
related to activities for human rights issues, evaluation of resultsof activities, and issues to be improved and examined based on
the evaluation etc. are approved at the Board of Directors after
discussion at the committee.

● P romotion of appropriate work hours

Employee
Health and
SafetyEmployeesof the Group

Danger, harsh working environment(related to overall occupational
health and safety, including mental
illness), fire and explosion● P rior risk assessment for R&D, manufacturing and sales● P rior assessment for manufacture● D rills for comprehensive disaster prevention/earthquake disasterprevention/initial fire fighting/communication notification● Trainings for harassment prevention/compliance/occupationalsafety and health/safety and disaster prevention● R aising awareness through the safety meeting, occupational safety

newspapers and others● R C audits● Prior risk assessment for R&D, manufacturing and sales

Community
Health and
SafetyLocal Communities

Damage to local communities andhealth due to fires, explosions,chemical leaks and pesticide
spraying● D rills for comprehensive disaster prevention/earthquake disasterprevention/initial fire fighting/communication notification● Training for compliance/occupational safety and health/safety anddisaster prevention● R C audits● Prior risk assessment for R&D, manufacturing and sales

Product
SafetyCustomers

Sales of unsafe products, including
misuse● S afety test of products● C ompliance with chemical substance● C linical trials (healthcare products)● D istribution of safety data sheet

Responsible
MarketingCustomers

Interference with consumer choice
due to lack of adequate productinformation, inadequate explanationof health risks, and inadequate
response to unexpected productrelated crises● Prior risk assessment for R&D, manufacturing and sales● S afety test of products● C ompliance with chemical substance● C linical trials (healthcare products)● D istribution of safety data sheet● A ppropriate application description

Health and
Safety in the
Supply Chain

Suppliers

Danger, harsh working environment(related to overall occupational
health and safety, including mental
illness), fire and explosion● Assessment by questionnaire* on Sustainability for supplierChild Laborin theSupply Chain

Suppliers

Labor of children under legal
working age/under 15 years old,placement in hazardous work, harshworking environment● Assessment by questionnaire* on Sustainability for supplier

Conflict
Minerals

Local Communities

Procurement and use of raw materials
containing conflict minerals● Responsible mineral procurement**Sustainability questionnaire and Responsible Mineral Procurement: https://www.nissanchem.co.jp/eng/csr_info/communication/supply.html

Nissan Chemical Corporation

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Nissan Chemical Corporation

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Profile

Financial Review

Value Creation & Growth Strategies

Sustainability

Corporate Data

●Key financial indicators (over time)(Billions of yen)

Future prospects remain uncertain due to the severe economic situation caused by the spread of COVID-19 infections. In
our group, however, both operating profit and ordinary income reached record highs in FY2021. We will continue to makeevery effort to not only build our business and management foundation that meet the needs of the times but also create newvalues, responding flexibly to the rapid changes in the business environment.

200
150
100
50
0

Long-term Financial Performance Trend(Billions of yen)

250

153.8

148.6

15.9
15.5
11.0
2011

20.5
19.5
13.9
2012

171.2

163.7

26.4

23.7

25.3

22.2
16.7

2013

18.2

176.9
29.5
28.6
22.4

180.3

193.4

39.1

40.0

35.0

37.1

38.6

27.1

29.4

30.8

36.2

31.7
31.4
24.0

206.8

204.9

209.1
43.9
42.5

208.0 60
53.7
51.0
38.8

33.5

Sales (left axis)

50

Operating profit(right axis)

40

Ordinary income(right axis)

30
20

Net income
attributable toowners of parent(right axis)

10

2014

2015

2016

2017

2018

2019

2020

2021

0
(Billions of yen)

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Sales

148.6

153.8

163.7

171.2

176.9

180.3

193.4

204.9

206.8

209.1

208.0

Operating Profit

15.5

19.5

22.2

25.3

28.6

31.4

35.0

37.1

38.6

42.5

51.0

Ordinary Income

15.9

20.5

23.7

26.4

29.5

31.7

36.2

39.1

40.0

43.9

53.7

Net Income

11.0

13.9

16.7

18.2

22.4

24.0

27.1

29.4

30.8

33.5

38.8

EBITDA

25.9

29.1

30.8

33.8

38.3

40.3

45.5

48.0

49.2

53.0

61.2

Operating Margin

10.4%

12.7%

13.6%

14.8%

16.2%

17.4%

18.1%

18.1%

18.7%

20.3%

24.5%

ROE

9.5%

11.4%

12.7%

12.7%

14.6%

15.1%

16.1%

16.6%

16.9%

17.5%

19.2%

EPS (¥/share)

64.52

83.74

102.11113.99143.37156.97180.30197.67210.09231.73271.88Dividend (¥/share)

24

26

30

36

44

52

68

82

90

104

122

Dividend Payout Ratio

37.2%

31.0%

29.4%

31.6%

30.7%

33.1%

37.7%

41.5%

42.8%

44.9%

44.9%

Share Repurchase

-

5.0

5.0

6.0

9.0

9.0

9.0

9.0

10.0

10.0

12.0

Total Assets

190.1

199.2

208.0

223.9

228.2

231.7

246.0

247.0

249.5

265.5

279.7

Net Assets

119.6

126.7

137.8

151.3

156.9

163.7

176.4

182.1

185.5

200.6

208.0

Cash

27.9

31.9

30.8

31.3

35.3

35.7

37.7

36.2

30.6

32.4

34.7

Liabilities with Interest

38.9

38.1

36.1

35.1

33.1

30.8

28.6

26.6

24.6

22.7

22.7

Equity Ratio

62.4%

63.0%

65.7%

66.9%

68.1%

69.9%

71.0%

73.0%

73.7%

74.9%

73.6%

Capex

8.3

7.9

8.8

9.8

10.2

14.3

13.7

9.9

15.7

15.8

11.0

Depreciation

10.5

9.5

8.5

8.5

9.7

8.9

10.5

10.9

10.5

10.4

10.2

R&D Expenses

13.6

13.7

14.2

15.0

15.8

16.1

17.2

17.8

17.2

16.5

16.0

R&D Expenses/Sales

9.2%

8.9%

8.7%

8.7%

8.9%

8.9%

8.9%

8.7%

8.3%

7.9%

7.7%

(FY2021: Including effects of changes in accounting policies)

Nissan Chemical Corporation

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Nissan Chemical Corporation

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Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Financial Review
Financial Review of the Year Ended March 31, 2022

Overview by Segments (figures before reﬂecting organizational revisions in April 2022)

Overview

Financial Position

The Chemicals Segment

The Pharmaceuticals Segment

During the current fiscal year (April 1, 2021 to March 31, 2022),
the domestic economy showed a temporary recovery trend inpersonal consumption. However, it failed to achieve a fullfledged recovery due to the spread of the COVID-19 and recurrence of state of emergency. Under these circumstances, salesof Basic Chemicals and Fine Chemicals increased in the Chemicals Segment. In the Performance Materials Segment, Display
Materials, Semiconductor Materials and Inorganic Materials performed well. In the Agricultural Chemicals Segment, sales increased. In the Pharmaceuticals Segment, sales of Custom
Chemicals (custom manufacturing and solution proposal business for pharmaceutical companies) increased, but sales of the
Drug Discovery decreased.
As a result, operating and ordinary income achieved record
highs for the eight consecutive years and net income attributable to owners of parent for the nine consecutive years, exceeding the earnings outlooks announced in February.

● Position of Assets, Liabilities and Net Assets
Total assets as of March 31, 2022 were 279,687 million yen (an increase of 14,178 million yen from the previous year). It is mainly
due to the increase of notes and accounts receivable-trade, merchandise and finished goods, and long-term loans receivable.
Total liabilities as of March 31, 2022 were 71,678 million yen(an increase of 6,730 million yen). It is mainly due to the increaseof notes and accounts payable-trade.
Net assets as of March 31, 2022 were 208,009 million yen (anincrease of 7,447 million yen).
As a result of these factors, equity ratio was 73.6% (a decrease of 1.3% from March 31, 2021).

In Basic Chemicals, sales of melamine (adhesives agent for particle board), urea, AdBlue®* (high-grade urea solution), and highpurity sulfuric acid (agent used for cleaning semiconductors) increased. In Fine Chemicals, sales of TEPIC® (powder coating
agent for paint, sealants, etc.) and cyanuric acid (raw material
for sterilizing and disinfecting agents) of environmental chemicals also performed well.
As a result, sales of this segment were 37,648 million yen (anincrease of 5,739 million yen) and operating income was 3,796
million yen (an increase of 2,313 million yen). Compared to theoutlook, sales were above 0.3 billion yen and operating income
was above 0.6 billion yen.

Sales of LIVALO®* (anti-cholesterol drug) increased in Japan,
but decreased overseas due to the impact of increased sales ofgeneric drugs. In “Custom Chemicals”, sales of active pharmaceutical ingredients (generic) increased.
As a result, sales of this segment were 6,630 million yen (adecrease of 22 million yen) and operating income was 947 million yen (an increase of 590 million yen). Compared to the outlook, sales were above 0.2 billion yen and operating income wasabove 0.3 billion yen.

Trading*AdBlue® is a registered trademark of the Verband der Automobilindustrie (VDA).

● Position of Cash Flow
Deducting income taxes paid from income before income taxes
and non-controlling interests, depreciation and gain and loss inworking capital, net cash provided by operating activities for the
consolidated fiscal year ended March 31, 2022 was 41,949 million
yen (39,939 million yen for the previous year).
Due to investment on plant and equipment, net cash used ininvesting activities for the consolidated fiscal year ended March
31, 2022 was 12,395 million yen (12,854 million yen for the previous year).
Due to share repurchase, payment for dividends and of longterm loans payable, net cash used in financing activities for the
consolidated fiscal year ended March 31, 2022 was 27,868 million
yen (25,629 million yen for the previous year).
As a result of these factors, cash and cash equivalents forthe consolidated fiscal year ended March 31, 2022 were 34,658
million yen (32,380 million yen for the previous year), reflecting
exchange of 591 million yen. It increased by 2,277 million yen
compared to the previous year.

Operating Results
As a result, the Companyʼs results for the current fiscal year
were net sales 207,972 million yen (an decrease of 1,149 millionyen), operating income 50,959 million yen (an increase of 8,429
million yen) and ordinary income 53,690 million yen (an increaseof 9,797 million yen), and net income attributable to owners ofparent 38,776 million yen (an increase of 5,306 million yen). Operating and ordinary income achieved record highs for the eight
consecutive year and net income attributable to owners of parent for the nine consecutive year, exceeding the earnings outlook announced in November.
ROE was 19.2% and we have achieved the Mid-Term Plan
StageⅡ target (maintain above 16%) in the current fiscal year.
Dividend was 122 yen and dividend payout ratio became
44.9%. We have repurchased share of 12.0 billion yen and total
payout ratio was 75.6%.

Nissan Chemical Corporation*L IVALO® is a registered trademark of Kowa Company, Limited.

Sales of this segment were 80,437 million yen (an increase of
10,616 million yen) and operating income was 2,903 million yen(an increase of 404 million yen). Compared to the outlook, sales
were above 3.1 billion yen and operating income was above 0.4
billion yen.

The Performance Materials Segment
In Display Materials, sales of SUNEVER® (LCD alignment coating) for notebook PCs and monitors performed well. In Semiconductor Materials, sales of anti-reflective coating for semiconductors (ARC®*) and multilayer materials (OptiStack®*) increased,reflecting favorable operation by customers. In Inorganic Materials, sales of SNOWTEX® for polishing electronic materials andhard coating, and Organo/Monomer sol (various kinds of coating
materials, resin additive) were steady.
As a result, sales of this segment were 81,665 million yen (anincrease of 10,016 million yen) and operating income was 27,719
million yen (an increase of 5,302 million yen). Compared to theoutlook, sales were above 0.4 billion yen and operating income
was above 0.4 billion yen.

OthersSales of this segment were 23,595 million yen (a decrease of 168
million yen) and operating income was 692 million yen (a decrease of 139 million yen).

*ARC® and OptiStack® are registered trademarks of Brewer Science, Inc.

The Agricultural Chemicals Segment
Sales of Fluralaner (active ingredients for veterinary pharmaceuticals) declined due to decreased shipments caused by customer inventories and other factors, however royalty income
was strong. In Japanese domestic market, sales of ROUNDUP®
(non-selective foliar application herbicide) were firm, but shipments of ALTAIR® (paddy rice herbicide) and GRACIA® (insecticide) declined. In the overseas market, sales of GRACIA® decreased, but sales of TARGA® (herbicide), SANMITE® (insecticideand acaricide) and QUINTEC® (fungicide) performed well. In addition, DITHANE® (fungicide), which was acquired in the third
quarter of FY2020, contributed to sales both domestically andoverseas.
As a result, sales of this segment were 65,819 million yen (anincrease of 1,971 million yen) and operating income was 18,338
million yen (an increase of 135 million yen). Compared to the outlook, sales were below 0.7 billion yen and operating income was
below 1.0 billion yen.

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Nissan Chemical Corporation

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Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Financial Review
Consolidated Balance Sheets [1] (For FY2021 and FY2020)

Consolidated Balance Sheets [2] (For FY2021 and FY2020)(Millions of yen)

◎Assets

FY2021(Thousands of U.S. dollars)

FY2020

FY2021(Millions of yen)

◎Liabilities(Thousands of U.S. dollars)

FY2021

FY2020

FY2021

Current liabilities

Current assets

Cash and deposits

34,65832,380283,130

Notes and accounts payable - trade

19,043

16,298

155,567

Notes and accounts receivable - trade, and contract assets

79,979-653,370

Short-term loans payable

20,981

20,937

171,399

Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies-

73,937

-

552

552

4,509

37,664

33,774

307,687

Income taxes payable

8,710

7,113

71,154

Provision for bonuses

2,285

2,250

18,667-

7-

Current portion of long-term loans payable

15

23

123

14,496

12,853

118,422

Provision for directors' bonuses

Accounts receivable - other

2,824

2,534

23,070Other

14,398

12,585

117,621

Short-term loans receivable

1,541

1,223

12,589Total current liabilities

65,971

59,744

538,935

Other

4,140

2,892

33,821

Non-current liabilities

Allowance for doubtful accounts

(41)

(31)

(335)

Long-term loans payable

1,182

1,184

9,656

175,279

159,588

1,431,901

Deferred tax liabilities

69

1,310

564

Provision for business structure improvement

698

171

5,702

Provision for loss on business of subsidiaries and affiliates

626

-

5,114

Provision for share awards for directors (and other officers)

200

91

1,634

290

249

2,369

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

69,44368,438567,298

Accumulated depreciation and impairment loss

(45,158)(43,601)(368,908)

Net defined benefit liability
Other

2,638

2,196

21,551

Total non-current liabilities

5,706

5,202

46,614

Total liabilities

71,67864,947585,557

Buildings and structures, net

24,284

24,837

198,382

Machinery, equipment and vehicles

145,129

140,790

1,185,598

Accumulated depreciation and impairment loss

(132,567)(128,053)(1,082,975)

12,561

12,736102,614

Machinery, equipment and vehicles, net
Tools, furniture and fixtures

41,34539,775

337,758

Accumulated depreciation and impairment loss

(37,384)(36,742)(305,400)

Tools, furniture and fixtures, net

3,960

3,033

32,350

Land

8,809

8,996

71,963

Construction in progress

3,561

2,233

29,091

Total property, plant and equipment

53,177

51,837434,417(Millions of yen)

◎Net assets(Thousands of U.S. dollars)

FY2021

FY2020

FY2021

Capital stock

18,942

18,942

154,742

Shareholders' equity

Intangible assets
Software

1,736

548

14,182

Other

10,044

11,581

82,052

Capital surplus

13,613

13,613111,208

Total intangible assets

11,78012,12996,234Retained earnings

172,393

161,708

1,408,324

Treasury shares(8,261)(7,340)(67,486)

Total shareholders' equity

196,688

186,923

1,606,797

8,304

11,35967,838Investments and other assets
Investment securities

30,21735,894

246,851

Long-term loans receivable

3,323

2

27,146

Accumulated other comprehensive income

918

205

7,499

Valuation difference on available-for-sale securities

1,844

2,478

15,064Foreign currency translation adjustment

898

81

7,336

21

463

172

9,223

11,90475,345

Deferred tax assets
Net defined benefit asset
Other

3,256

3,483

26,599Remeasurements of defined benefit plans

Allowance for doubtful accounts

(110)

(110)

(899)

Total accumulated other comprehensive income

Total investments and other assets

39,45041,953322,278

Non-controlling interests

2,097

1,733

17,131

Total net assets

208,009200,562

1,699,281

Total liabilities and net assets

279,687

265,5092,284,838

Total non-current assets

104,408

105,921852,937

Total assets

279,687

265,5092,284,838

Nissan Chemical Corporation

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Nissan Chemical Corporation

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Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Financial Review
Consolidated Statements of Income (For FY2021 and FY2020)

Consolidated Statements of Changes in Net Assets (For FY2021)(Millions of yen)◎Consolidated Statements of Income
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Equity in earnings of affiliates
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on disposal of non-current assets
Loss on sales of non-current assets
Plant stop losses
Foreign exchange losses
Other
Total non- operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Business structure improvement expenses
Loss on business of subsidiaries and affiliates
Total extraordinary losses
Income before income taxes and non-controlling interests
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent(Thousands of U.S. dollars)

FY2021

FY2020

FY2021

207,972
106,883
101,089
50,12950,959209,121
121,376
87,74545,21442,5301,698,979
873,156
825,823
409,517416,298

49
768
950
1,134
918
3,821

16
981
1,123
668
2,790

400
6,274
7,761
7,499
31,215

73
682
116
108
109
1,090
53,690

69
696
4
177
52
426
1,427
43,893

596
5,571
948
882
890
8,905
438,608

3,366
3,366

1,588
1,588

27,49827,498

477
1,792
626
2,896
54,16014,713
312
15,026
39,134357
38,77645,481
12,037(50)
11,98633,49525
33,4703,897
14,6395,114
23,658442,448
120,194
2,549
122,751
319,696
2,916
316,772(Millions of yen)◎C onsolidated Statements ofComprehensive Income
Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)
Owners of parent
Non-controlling interests

Nissan Chemical Corporation89

Total shareholders’ equity

Balance at beginning of current period
Cumulative effects of changes in accounting policies
Restated balance
Changes of items during period
Dividends of surplus
Net income attributable to owners of parent
Share repurchase
Disposal of treasury shares
Cancellation of treasury shares
Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotal shareholders’equity¥18,942¥13,613(¥7,340)¥18,942¥13,613¥161,708(1,548)¥160,160(¥7,340)¥186,923(1,548)¥185,375(15,468)
38,776(12,003)8
11,313¥196,688(15,468)
38,776¥18,9420(0)(11,074)(12,003)
8
11,074¥13,613

12,233¥161,708(920)(¥8,261)(Millions of Yen)

Accumulated other comprehensive income
Total accumulated
Foreign
Valuationother
difference on currency Remeasurements
Nonavailable-for- translation of defined benefit comprehensive controlling
Total
incomeplans
sale securities adjustment
interests net assets
Balance at beginning of current period
Cumulative effects of changes in accounting policies
Restated balance
Changes of items during period
Dividends of surplus
Net income attributable to owners of parent
Share repurchase
Disposal of treasury shares
Cancellation of treasury shares
Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period¥11,359¥81¥463¥11,904¥1,733¥11,359¥81¥463¥11,904¥1,733¥200,562(1,548)¥199,013

363
363¥2,097(15,468)
38,776(12,003)8(2,317)
8,995¥208,009(3,055)(3,055)¥8,304

816
816
¥898

(442)
(442)
¥21

(Thousands of U.S. dollars)

FY2021

FY2020

FY2021

39,13433,495

319,696(3,055)
875
(442)

3,575
1,075
514

(24,957)
7,148(3,611)010(2,622)36,511

5,167
38,663(21,420)
298,268

36,095416

38,540122

294,870
3,398

Integrated Report 2022

(Millions of Yen)

Nissan Chemical Corporation

90

Integrated Report 2022

(2,680)(2,680)¥9,223

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Financial Review
Consolidated Statements of Changes in Net Assets (For FY2020)

Consolidated Statements of Changes in Net Assets (For FY2021)(Millions of Yen)

(Thousands of U.S. dollars)

Total shareholders’ equity

Balance at beginning of current period
Changes of items during period
Dividends of surplus
Net income attributable to owners of parent
Share repurchase
Disposal of treasury shares
Cancellation of treasury shares
Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period

Total shareholders’ equity

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotal shareholders’equity¥18,942¥13,613¥146,997(¥2,470)¥177,082(10,002)1
5,130(13,629)
33,470(10,002)1-(13,629)
33,470(5,130)¥18,942¥13,613

14,710¥161,708(4,870)(¥7,340)

9,840¥186,923

Balance at beginning of current period
Cumulative effects of changes in accounting policies
Restated balance
Changes of items during period
Dividends of surplus
Net income attributable to owners of parent
Share repurchase
Disposal of treasury shares
Cancellation of treasury shares
Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotal shareholders’equity$154,742$111,208($59,962)$154,742$111,208$1,321,036(12,646)$1,308,390
0(126,362)
316,772$1,527,024(12,646)$1,514,378
0(126,362)
316,772(98,056)65
92,419$1,606,797$154,742($59,962)

0(0)(90,466)(98,056)
65
90,466$111,208

99,935$1,408,324(7,516)($67,486)(Thousands of U.S. dollars)(Millions of Yen)

Accumulated other comprehensive income

Accumulated other comprehensive income

Total accumulated
Foreign
Valuationother
difference on currency Remeasurements
Nonavailable-for- translation of defined benefit comprehensive controlling
Total
incomeplans
sale securities adjustment
interests net assets

Total accumulated
Foreign
Valuationother
difference on currency Remeasurements
Nonavailable-for- translation of defined benefit comprehensive controlling
Total
incomeplans
sale securities adjustment
interests net assets
Balance at beginning of current period
Changes of items during period
Dividends of surplus
Net income attributable to owners of parent
Share repurchase
Disposal of treasury shares
Cancellation of treasury shares
Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period¥7,782

3,577
3,577¥11,359

Nissan Chemical Corporation

91(¥896)

978
978
¥81

(¥51)

514
514
¥463

Integrated Report 2022

¥6,834

5,070
5,070¥11,904¥1,610¥185,528

123
123¥1,733(13,629)
33,470(10,002)
1
5,193
15,033¥200,562

Balance at beginning of current period
Cumulative effects of changes in accounting policies
Restated balance
Changes of items during period
Dividends of surplus
Net income attributable to owners of parent
Share repurchase
Disposal of treasury shares
Cancellation of treasury shares
Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period$92,795$662$3,782$97,247$92,795$662$3,782$97,247$14,157 $1,638,445(12,646)$14,157 $1,625,790(21,894)(21,894)$75,345(126,362)
316,772(98,056)
65
2,965(18,928)
2,965
73,483$17,131 $1,699,281(24,957)(24,957)$67,838

Nissan Chemical Corporation

92

6,666
6,666
$7,336(3,611)(3,611)$172

Integrated Report 2022

Profile

Value Creation & Growth Strategies

Sustainability

Corporate Data

Financial Review
Consolidated Statements of Changes in Net Assets (For FY2020)

Consolidated Statements of Cash Flows (For FY2021 and FY2020)(Thousands of U.S. dollars)(Millions of yen)

Total shareholders’ equity
Capitalstock
Balance at beginning of current period
Changes of items during period
Dividends of surplus
Net income attributable to owners of parent
Share repurchase
Disposal of treasury shares
Cancellation of treasury shares
Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period$171,080

Capitalsurplus$122,950

Retainedearnings$1,327,646

Treasuryshares($22,309)(123,094)
302,294(46,333)$171,080$122,950

132,858$1,460,513(90,336)
9
46,333(43,985)($66,293)

Total shareholders’equity$1,599,368(123,094)
302,294(90,336)988,873$1,688,250(Thousands of U.S. dollars)

Accumulated other comprehensive income
Total accumulated
Foreign
Valuationother
difference on currency Remeasurements
Nonavailable-for- translation of defined benefit comprehensive controlling
Total
incomeplans
sale securities adjustment
interests net assets
Balance at beginning of current period
Changes of items during period
Dividends of surplus
Net income attributable to owners of parent
Share repurchase
Disposal of treasury shares
Cancellation of treasury shares
Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period$70,285

32,30732,307$102,592($8,092)

8,833
8,833
$732

($461)

4,642
4,642$4,182$61,723

45,79145,791$107,514$14,541 $1,675,650(123,094)
302,294(90,336)
9
1,111
46,902
1,111
135,775$15,652 $1,811,434(Thousands of U.S. dollars)

FY2021

FY2020

FY2021

Cash flows from operating activities
Income before income taxes and non-controlling interests

54,16045,481

442,448

Depreciation and amortization

10,11910,346

82,665Business structure improvement expenses

1,792

-

14,639Loss on business of subsidiaries and affiliates

626

-

5,114

Loss on valuation of investment securities

477

-

3,897

Amortization of goodwill

103

78

841

Interest and dividend income

(817)

(997)

(6,674)(27,498)(3,366)(1,588)Interest expenses

Loss (gain) on sales of investment securities

73

69

596

Loss (gain) on disposal of non-current assets

682

696

5,571

Decrease (increase) in notes and accounts receivable - trade(5,704)(1,016)(46,598)

Decrease (increase) in inventories(6,230)(2,398)(50,895)

Increase (decrease) in notes and accounts payable - trade
Other

2,523
(1,163)

(842)
(671)

20,611(9,501)

Subtotal

53,27749,159435,234

Interest and dividend income received
Interest expenses paid
Income taxes paid

1,913
(73)
(13,168)

1,925
(69)
(11,076)

15,628(596)(107,573)

Net cash provided by (used in) operating activities

41,94939,939342,693

Cash flows from investing activities
Purchase of investment securities

(190)

(159)

(1,552)

Proceeds from sales of investment securities

4,248

3,063

34,703Purchase of shares of subsidiaries(22)(1,209)(180)(11,253)(8,254)(91,929)

(466)

(598)

(3,807)(1,133)(688)(9,256)-(5,384)-(3,322)-(27,138)

Net decrease (increase) in short-term loans receivable

(262)

522

(2,140)Purchase of long-term prepaid expenses
Other

(188)
196

(222)
77

(1,536)
1,601

Net cash provided by (used in) investing activities(12,395)(12,854)(101,258)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable(345)(2,017)(2,818)Purchase of property, plant and equipment
Payments for retirement of property, plant and equipment
Purchase of intangible assets
Payments for transfer of business
Payments of long-term loans receivable

Proceeds from long-term loans payable

550

660

4,493

Repayments of long-term loans payable

(552)

(640)

(4,509)(15,468)(13,629)(126,362)

(48)

0

(392)

Share repurchase
Other(12,003)(10,002)(98,056)0-0Net cash provided by (used in) financing activities(27,868)(25,629)(227,661)

Cash dividends paid
Dividends paid to non-controlling interests

Effect of exchange rate change on cash and cash equivalents

591

284

4,828

Net increase (decrease) in cash and cash equivalents

2,277

1,741

18,601

Cash and cash equivalents at beginning of period

32,38030,639264,521

Cash and cash equivalents at end of period

34,65832,380283,130(Note 1)The consolidated financial statements are a translation of the Japanese annual securities report’s consolidated financial statements.
(Note 2)The consolidated financial statements are expressed in Japanese yen as of and for the year ended March 31, 2022 after being converted from the currency of the country in which the Company operates. The translation of Japanese
yen amounts to United States dollar amounts is included solely for the convenience of the readers outside Japan, and has been made at the rate of ¥122.41 to US $1, which is the approximate closing exchange rate reported by the
Tokyo Foreign Exchange Market on March 31, 2022. This translation should not be construed to indicate that the Japanese yen amounts shown can be converted to United States dollars at the above rate.

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Value Creation & Growth Strategies

Sustainability

Corporate Data

Corporate Information
Domestic Bases

List of Offices, Plants and Laboratories
Toyama Plant

Nagoya Plant

This plant faces the Port of Nagoya.
Here we manufacture sulfuric acidand high-grade urea solution, among
other products.

This plant is located in the center of
Toyama Plain. Here we manufacture
various groups of products, such as
basic chemicals, environmental
chemicals, and performance materials.

Biological ResearchLaboratories

Located in Shiraoka City, Saitama
Prefecture, Biological Research Laboratories serves as a research center
for life sciences, including evaluation
research on the usefulness and safety of agricultural chemicals, pharmaceuticals, and medical materials.

OfficesHead Office

Sapporo Sales Office

5-1, Nihonbashi 2-Chome, Chuo-ku, Tokyo 103-6119
Tel: +81-3-4463-8111

Maruito Sapporo Building 1-1, Kita-Nijyo-Nishi, Chuo-ku, Sapporo,
Hokkaido 060-0002
Tel: +81-11-251-0264

Sendai Sales Office

Nagoya Sales Office

BIZIA Sendai Ichibancho Building 2-7-12,
Ichibancho, Aoba-ku, Sendai, Miyagi 980-0811
Tel: +81-22-266-4311

Nagoya KS Building 3-1-18, Taiko, Nakamura-ku, Nagoya, Aichi
453-0801
Tel: +81-52-452-8623

Osaka Sales Office

Hiroshima Office

Kintetsu Dojima Building 2-2-2,
Dojima, Kita-ku, Osaka 530-0003
Tel: +81-6-6346-7200

Dai-ichi Uenoya Building 8-8, Kamihatchobori, Naka-ku,
Hiroshima 730-0012

Fukuoka Sales Office

Onoda Plant

Chemical ResearchLaboratories

This plant is located in Sanyo-Onoda
City, Yamaguchi. It is our base for the
production of fine organic synthetic
compounds, such as agrochemicals
and pharmaceuticals.

Located in Funabashi City, Chiba Prefecture, Chemical Research Laboratories is Nissan Chemicalʼs core R&D
site, and is responsible for our corporate research. In addition to R&D ofagricultural chemicals and pharmaceuticals that utilize the fine organic
synthesis technology, Chemical Research Laboratories performs research on companywide processes,
material analysis research, etc.

Tokyo Tatemono Hakata Building 1-4-4,
Hakata Ekimae, Hakata-ku, Fukuoka 812-0011
Tel: +81-92-432-3421

PlantsSodegaura Plant

Sodegaura Plant Goi Works

11-1, Kitasode, Sodegaura, Chiba 299-0266
Tel: +81-438-63-2341

12-17, Goiminamikaigan, Ichihara, Chiba 290-0045
Tel: +81-436-22-2110

Saitama Plant

Toyama Plant

235-1, Aza Nishidai, Oaza Jimbohara-machi, Kamisato-machi,
Kodama-gun, Saitama 369-0305
Tel: +81-495-34-2810

635, Sasakura, Fuchu-machi, Toyama 939-2792
Tel: +81-76-433-9602

Nagoya Plant

Onoda Plant

7, Tsukiji-cho, Minato-ku, Nagoya, Aichi 455-0045
Tel: +81-52-661-1676

6903-1, Oaza Onoda, Sanyo-Onoda, Yamaguchi 756-0093
Tel: +81-836-83-2800

Laboratories
Chemical Research Laboratories

Materials Research Laboratories

10-1, Tsuboi-Nishi 2-chome, Funabashi, Chiba 274-8507
Tel: +81-47-465-1112

488-6, Suzumi-cho, Funabashi, Chiba 274-0052
Tel: +81-47-419-3810
11-1, Kitasode, Sodegaura, Chiba 299-0266
Tel: +81-438-64-2881
635, Sasakura, Fuchu-machi, Toyama 939-2792
Tel: +81-76-465-7133

Biological Research Laboratories

1470, Shiraoka, Shiraoka, Saitama 349-0294
Tel: +81-480-92-2513

Materials ResearchLaboratories

Materials Research Laboratories creates highly unique new materials, allowing us to respond quickly to increasingly sophisticated and diverse
market needs. At the same time, theLaboratories focuses their efforts on
researching next-generation materials in an effort to create new markets.

Saitama Plant

This plant is locatedin the northwest areaof Saitama. Here we
manufacture agricultural formulations.

Group Companies
Japan
Nissei Corporation

Nissan Butsuryu Co., Ltd.

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: +81-3-3241-2548■Sales of chemical products and insurance, and real estate business

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: +81-3-5255-6901■Transportation

Nissan Green & Landscape Co., Ltd.

Funabashi, Chiba

Nissan Engineering, Ltd.

PMO Ochanomizu 4-4-1, Kandasurugadai, Chiyoda-ku, Tokyo 101-0062
Tel: +81-3-3256-4031■Landscaping and civil engineering634-1, Sasakura, Fuchu-machi, Toyama 939-2753
Tel: +81-76-465-5711■Plant engineering services

Nihon Hiryo Co., Ltd.

559-3, Tozaki, Okanogo, Fujioka, Gumma 375-0011 (Inside Nihon Hiryo Shinmachi Plant)
Tel: +81-274-42-1247■Manufacture and sales of fertilizers and agricultural materials

Sodegaura Plant

These plants are located in the industrial
area in Sodegaura
and Ichihara City,
Chiba. These are ourbases for the production of performancematerials.

Clariant Catalysts (Japan) K.K.

Toyama, Toyama

Sodegaura, Chiba

Sun Agro Co., Ltd.

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: +81-3-3510-3601■Manufacture and sales of fertilizers and agrochemicals

Environmental Technical Laboratories, Ltd.

2-28-8, Honkomagome, Bunkyo-ku, Tokyo 113-0021
Tel: +81-3-5977-7300■Manufacture and sales of catalysts for petrochemical and petroleum
products

2-11-17, Kohoku, Adachi-ku, Tokyo 123-0872
Tel: +81-3-3898-6643■Consultation of environmental conservation andenvironmental analysis services

NC Agro Hakodate Corporation

9-23, Kitahama-cho, Hakodate, Hokkaido 040-0078
Tel: +81-138-41-1251■Manufacture of agrochemicals

Nissan Chemical Corporation

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Value Creation & Growth Strategies

Sustainability

Corporate Data

Corporate Information
Overseas Bases (As of March 31, 2022)

Corporate Profile (As of March 31, 2022)

America
Nissan Chemical America Corporation

10333 Richmond Avenue, Suite 1100, Houston,
Texas 77042, U.S.A.
Tel: +1-713-532-4745■Manufacture and sales of inorganic materials

FranceNissan Chemical Europe S.A.S.

Parc d’Affaires de Crécy -10A rue de la Voie Lactée
69370 Saint Didier au Mont d’Or, France
Tel: +33-4-37-64-40-20■Sales of agrochemicals

Corporate Name

Nissan Chemical Corporation

Head Office

5-1, Nihonbashi 2-Chome, Chuo-ku, Tokyo 103-6119, Japan
TEL: +81-3-4463-8111

Founded1887

Capital Stock

18,942 million yen

Number of Employees

Consolidated: 2,737

Stock ListingFirst Section of the Tokyo Stock Exchange (Prime Market after April 4, 2022)

Transfer Agent

Sumitomo Mitsui Trust Bank, Limited
4-1 Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8233, Japan

Share Information (As of March 31, 2022)

Brazil

India

Nissan Chemical Do Brasil

Nissan Agro Tech India PVT. LTD.

Avenida Gisele Constantino, 1850,
Salas 1518 a 1520, Parque Bela Vista,
Votorantim, SP, 18110-650, Brasil
Tel: +55-15-3019-8772

502-504, 5th Floor, Tower B, Spazedge Commercial
Complex, Sector-47, Sohna Road, Gurgaon-122002,
Haryana, India
Tel: +91-124-4214446/47■ Sales support and promotional services
for agrochemicals■Sales support and promotional services for agrochemicals

Nissan Bharat Rasayan PVT. LTD.

502-504, 5th Floor, Tower B, Spazedge Commercial
Complex, Sector-47, Sohna Road, Gurgaon-122002,
Haryana, India
Tel: +91-124-4214446■Manufacture and export of active ingredients of agrochemicals

China
Nissan Chemical Product (Shanghai) Co., Ltd.
Rm.3210 Office Tower 1, Raffles City Changning,
No.1133 Changning Road, Changning District,
Shanghai 200051 PRC
Tel: +86-21-6236-8300■Sales support and promotional services for agrochemicals

Nissan Chemical Materials Research (Suzhou) Co., Ltd.
Room101, NW-10, Nanopolis Suzhou 99 Jinji Lake Avenue,
Suzhou Industrial Park 215123, China
Tel: +86-512-62732080■ R&D, sales support and promotional services for
performance materials

Korea
NCK Co., Ltd.

127, Chupalsandan-ro, Paengseong-eup, Pyeongtaek-si,
Gyeonggi-do, 17998, Korea
Tel: +82-31-691-7044■Manufacture and sales of display and semiconductor materials

Total Number of Authorized Shares

360,000,000

Shares of Common Share Issued

143,000,000*

Shareholders

11,145*Includes 1,219,611 treasury shares

Major shareholders (Top ten companies)
The Master Trust Bank of Japan, Ltd. (Trust Account)

37,687

26.6

Custody Bank of Japan, Ltd. (Trust Account)

13,927

9.8

Custody Bank of Japan, Ltd. as Trustee for Mizuho Bank Retirement Benefit
Trust Account Re-entrusted by Mizuho Trust and Banking Co., Ltd.

5,767

4.1

The Norinchukin Bank

4,800

3.4

Nissan Chemical Corporation Customer Shareholders Association

3,647

2.6

Custody Bank of Japan, Ltd. (Securities Investment Trust Account)

2,828

2.0

STATE STREET BANK WEST CLIENT-TREATY 505234

1,983

1.4

Meiji Yasuda Life Insurance Company

1,861

1.3

JP MORGAN CHASE BANK 385781

1,745

1.2

Nissan Chemical Corporation Employees Association

1,655

1.2

(Note) Investment percentages are calculated excluding treasury shares.

Nissan Chemical Agro Korea Ltd.

Room 2001, 74, Sejong-daero, Jung-gu, Seoul 04526, Korea
Tel: +82-2-774-6470

Taiwan■Sales of agrochemicals

Nissan Chemical Taiwan Co., Ltd.

5F., No.67, Luke 2nd Rd., Luzhu Dist., Kaohsiung City 82151,
Taiwan (R.O.C.)
Tel: +886-7-695-5252

Percentage of share held (%)

Financial
institutions

Securities
companies

Other domestic
companies

Overseas
investors

Individuals/
OthersTreasuryshares

53.7

2.8

9.2

23.2

10.3

0.8

Organization
Web https://www.nissanchem.co.jp/eng/profile/soshiki.html■R&D and sales support for display and semiconductor materials

Nissan Chemical Corporation

Number of shares held (1,000 shares) Investment (%)

97

Integrated Report 2022

Nissan Chemical Corporation

98

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