Integrated Report 2021

To Our Stakeholders

KINOSHITA Kojiro
Representative Director, Chairman & CEO

Nissan Chemical Corporation Integrated Report 2021

1

Our company was founded as Japan's first chemical fertilizer manufacturer to solve foodissues which Japan faced in 1887 under the founding spirit “to dedicate ourselves toprosperity 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 Pharmaceuticals on the basis of ESG (Environment, Social andGovernance) and SDGs (Sustainable Development Goals) established by the United Nations.
The global spread of COVID-19 is greatly changing society and the economy. At the sametime, various social issues, such as declining birthrate and growing proportion of elderly
people, health issue, climate change, aggravated food issue and economic divides are on
the increase and threatening the sustainability of society. We are facing a tough era that
deliberation and proactive effort decide survival. Now is the time to integrate knowledge that
our Group has cultivated and thoroughly pursue the strategies to achieve and realize thecorporate vision “A corporate group that contributes to human survival and development”.
As a “Future-Creating Enterprise that Responds to Social Needs with Unique, Innovative
Technologies”, we will continue to aim for synergistic development with society.

Mission Statement (Our Values)“Contribute to society with excellent technologies and products.”“Promote prosperity and welfare through concerted efforts to constantly develop new areas.”“Respect people who exhibit a sense of responsibility, originality and motivation.”
Corporate Philosophy (Corporate Purpose)
We contribute to society in harmony with the environment, based on our excellent technologies,
products and services.
Corporate Vision
A corporate group that contributes to human survival and development.
Business Model
Future-Creating Enterprise that Responds to Social Needs with Unique, Innovative Technologies.

Basic CSR Policy(1) Conduct sensible business activities as a member of the international community in compliancewith laws and regulations.
(2) Enhance corporate value by providing safe and useful products and services.
(3) Strive to achieve no-accidents & no-disasters and protect the global environment.
(4) Disclose information appropriately with a focus on communication with stakeholders.
(5) Create a cheerful and pleasant workplace by respecting the individuality and personalities, andpromoting health of employees.
(6) Conduct ourselves as good corporate citizens and decent members of society.

Nissan Chemical Corporation Integrated Report 2021

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Editorial Policy

Contact for inquiries about this report
CSR & Public Relations Office, Corporate Planning
Department, Nissan Chemical Corporation
TEL: +81-3-4463-8123
E-mail: csr_pr@nissanchem.co.jp

In 1992, we introduced responsible care activities,
and have disclosed the details of these activities via
Environment and Safety Report from 1999. The
Report transformed into CSR Report in 2013 andAnnual report in which business overview and

Scope of reporting
The initiatives are described mainly in the financial and
ESG information of the activities of Nissan ChemicalGroup.

financial section were included since 2016. Since
2018, we have included the materiality, process ofvalue creation, business strategies, and detailed
financial information in addition to the business

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)

overview, E (Environment), S (Social), and G(Governance) information to make this integrated
report easier to understand creating mid- to longterm value of Nissan Chemical Group to all
stakeholders, including shareholders and investors.

Entities accounted for using equity method:
Sun Agro Co., Ltd., Clariant Catalysts (Japan) K.K.

We aim to make this report as a valuablecommunication tool by deepening our businessGroup companies:
In addition to the above consolidated subsidiaries andentities accounted for using equity method, NC Agro
Hakodate Corporation, Environmental TechnicalLaboratories, 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)

activities and enhancing the content of the report.
Reporting period
FY2020 (April 2020 to March 2021)*T he occupational accidents data (P56) is from January to December
2020.

IssuedNovember 2021
(The previous edition was issued in November 2020,
and the next edition is planned to be issued in
November 2022)

Information disclosure system
Summarized
Information

Frequency of issuance
Annually
Guidelines used as referenceInternational Integrated Reporting Council (IIRC)

Integrated Report(this report)“International <IR> Framework”
Ministry of Economy, Trade and Industry “Guidance
for Collaborative Value Creation”
Detailed
Information

GRI Sustainability Reporting Guidelines Standard
Ministry of the Environment “Environmental Reporting
Guidelines”

WebsiteFor general users* For more detailed information, please visit our website.
https://www.nissanchem.co.jp/eng/

Nissan Chemical Corporation Integrated Report 2021

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For investors

Contents
Our Future-Creating Story
Message from the President
Message from the CFOLong- and Mid-term Business Plans

5
11
15

Feature Contributing to Maintaining the Food
Supply by Correctly Evaluating Safety
Toxicology & Environmental Science Department 17
The History of Nissan Chemical
Main Products
Process of Value Creation
Materiality
Management Resources
Financial and Non-Financial Highlights
Business Strategies

21
23
25
27
31
33
35

Foundation for Future Creation

49
51
Strengthening of Nissan Group's Business Base 53
Research and Development
Voices of ResearchersContinuous Improvement of Responsible
Care Activities
Corporate GovernanceCompliance
Risk Management
Respect for Human Rights

55
57
67
69
73

Corporate Data
Financial Review
Corporate Information

75
87

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

Nissan Chemical Corporation Integrated Report 2021

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Message from the President

YAGI Shinsuke
President & COO

Introduction
At first, I would like to share with you my thoughts
regarding my new role as President of the Company.
I believe that I have two immediate responsibilities as
President. The first is to ensure the completion of our“Vista2021” mid-term business plan, which is now in its
final year. We are making steady progress in regard toachieving our numerical targets and will continue to
implement various measures to achieve those targets
without pause. The Company will also strive to achieve
an ROE of 16% and total payout ratio of 75%. Bothserve as management indicators of “Vista2021.”
The second is to formulate the new long-termbusiness plan, which provides a broader perspective
beyond the next mid-term business plan and well past
2030. The key to the growth of the Group is to create
new growth engines by focusing management
resources on research and development (R&D), to plan/
search for new businesses, products, andtechnologies, to strengthen our core businesses, andto develop our human resources. We will realize
innovation by solving customers’ problems in a waythat will make us irreplaceable and by searching for
new future customers.
We are in unprecedented times, as global order ischanging due to intense competition for hegemony
among large nations, fears of social fragmentation andthe spread of COVID-19 infections. In spite of thischaotic situation, these social changes will bring about
an expansion of the role of chemicals and provide us
with opportunities. We seize such opportunities in atimely manner and continue to take on the challenge oftransforming ourselves to become a source of value
creation for our stakeholders. While remaining firmly
anchored in our current business domains, we will also
consider forming alliances with other companies,
acquisitions, etc. to incorporate and expand new
business domains. In addition, all employees will sharea sense of urgency to create the foundations of new
businesses for future development. All employees will
work together to create a vision for the future of theCompany to be with stakeholders over the next 100
years.

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Challenge, change, and move beyond.
Toward becoming a future-creating
enterprise that continues to take on
the challenge of transformation

Business Environments and Understanding of Current Business Conditions
Adaptation to the changing times will determine our future growth.
In October 2020, the Japanese government declaredthat it will achieve carbon neutrality by 2050. In line with
this, many companies are revising their businessactivity plans for the future, including accelerating
efforts to reduce greenhouse gas (GHG) emissions.
It is expected that materials derived from fossil
resources will be replaced by carbon-neutral materials,
and energy-related materials will be replaced bydecarbonized materials, such as biofuels, hydrogen,and ammonia. I believe that business environments willchange rapidly with major shifts expected in the value
chain which involves resources, manufacturing,storage, distribution, and consumption.
All along, we have actively worked to reduce GHG
emissions. In FY2018, we aimed to reduce our GHG
emissions by 20% by FY2021 (compared to FY2011).
As a result of our effort, we were able to reduce
emissions by 27% a year earlier in FY2020, making ourefforts a success.
In addition, as a long-term target, we plan to reduce
GHG emissions by 30% by FY2030 (compared to
FY2018) and continue to work at achieving theemissions targets set by the Japanese government.
With regard to contributing to GHG emission
reduction through our products, we will aim to seize
more business opportunities for the future by promoting
R&D through the integration of internal and external
knowledge. This will be accomplished through efforts
such as participation in national projects, industryacademia collaboration, and the formation of alliances
based on the technologies we possess.
In addition, advances in digitalization and peripheraltechnologies are accelerating due to improvements inthe performance of supercomputers, the widespreaduse of fifth-generation mobile communication systems(5G), the development of artificial intelligence (AI), andpenetration of the “new normal” lifestyle as a result of
the spread of COVID-19 infections. We will make every
effort to build a management foundation in order to
respond to the rapid changes in businessenvironments, including conventional development,
manufacturing, and sales systems in which various
data are used individually.

Nissan Chemical Corporation Integrated Report 2021

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Looking Back at FY2020
As our entire society is shifting to the “new normal” lifestyle, making businessenvironments more challenging, we were able to achieve record profits.
In FY2020, the Japanese economy experienced
significant negative growth due to the spread of
COVID-19 infections. In the second half of the fiscal
year, there were signs of a partial recovery in exports.
However consumer spending remained sluggish for a
prolonged period, resulting in severe economic
conditions.
Despite these conditions, we achieved sales of 209.1
billion yen (an increase of 2.3 billion yen year-on-year),
operating income of 42.5 billion yen (an increase of 3.9
billion yen), ordinary income of 43.9 billion yen (anincrease of 3.9 billion yen), net income of 33.5 billion
yen (an increase of 2.7 billion yen), and EPS (earnings
per share) of 232 yen (an increase of 22 yen) for
FY2020, with operating income and ordinary income
reaching record highs for the seven consecutive years
and net income reaching a record high for the eight
consecutive years.
In FY2020, performance varied greatly depending on
the business and industry. I believe that the Group

fared well overall due to its balanced business portfolio.
I also believe that our most important task is to build aneven stronger business portfolio in the future without
relaxing our efforts to do so.
Looking back at our business performance bysegment, Chemicals Division experienced diminishedperformance in the first half of the fiscal year comparedto the previous year due to the spread of COVID-19
infections with Basic Chemicals and Fine Chemicals
following suit. In particular, the decline in demand fromthe automobile and housing industries, closures ofschool swimming pools and bathing facilities as well asother factors had a significant impact on businessperformance. In the second half of the fiscal year,
profits eventually increased due to a recovery inautomobile and semiconductor-related demand.
As for Performance Materials Division, sales ofdisplay materials greatly increased due to increase indemand for our photo-alignment agent for IPS liquid
crystal (IPS) with the proliferation of high-resolution
displays not only for smartphones but also tablets,
notebook PCs and in-vehicle devices. As forsemiconductor materials, the market in general wasstrong due to increased demand for PCs and servers inline with the promotion of remote work, leading to asignificant increase in sales. Sales of inorganic materials
also increased for polishing agents due to the strong
semiconductor market.
In the Agricultural Chemicals Division, sales of
DITHANE® , a fungicide that the Company acquired
from the US based Corteva Inc. in December 2020,
increased. In addition, new products such as Cygnus®
and Tenku, the second generation of one-shot
herbicides based on the paddy rice herbicide ALTAIR®,
were launched, resulting in increase in sales. However,sales of the veterinary pharmaceutical Fluralaner
decreased due to inventory adjustments by customers.
Profits in the Agricultural Chemicals Division decreased
due to higher fixed costs of the fungicides Quintec®
and DITHANE® , which were acquired in the previous
fiscal year.
In the Pharmaceuticals Division, profits decreased due
to a decrease in exports as a result of the expiration of
the market exclusivity period for an active ingredient usedin LIVALO®, an anti-cholesterol drug, in Europe.

Nissan Chemical Corporation Integrated Report 2021

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Long- and Mid-term Business Plans
We will formulate the next mid-term business plan and new long-term business planlooking beyond the “Progress2030” long-term business plan.
The current mid-term business plan “Vista2021”
Stage II is progressing smoothly, and we will continue
to work toward achieving its goals in FY2021, the final
year of the plan.
In contrast, five years have passed since theformulation of the “Progress2030” long-term businessplan and since the environment has changed
significantly, the assumptions made at the time of its
formulation have diverged from the plan. In order toaccurately respond to the changes, we must calmly
analyze the present and future, and reconsider our
strategies. Over the course of this year, we will lookbeyond 2030 to formulate a new long-term businessplan for 2050.
From here on, we will thoroughly pursue measures toenhance corporate value while creating growthstrategies and responding to the demands of society,with taking into consideration rapidly changing future.
For this, we launched the “Business Planning
Project” as a cross-divisional project, and are now inthe process of discussing the formulation of the next
business plan in earnest with myself and the Vice
President serving as project leaders.
In addition, we are formulating “2050 Vision,” which
consists of young employees as key members. By
exploring the possibilities of new business areas basedon our technologies without constrained by thinking
based on past experience, and by seeking solutions tovarious social issues, we will aim to increase ourcorporate value to our stakeholders and contribute tosociety.

(billion yen)
60.0

(billion yen)
350.0

50.0

50.0
43.0

42.5
40.0
35.0
30.0

171.2

176.9

180.3
31.4

193.4

37.1
204.9

38.6
206.8

300.0

300.0
250.0

235.0
200.0

209.1

28.6

150.0

25.3
20.0

Next Long-term
Business Plan

Progress2030
10.0Vista2015
0

2014

2015

2016

2017

2018

2019

50.0

Next Mid-term
Business Plan

Vista2021
2020

2021
(target)Sales (right axis)

2027

Operating income (left axis)

Nissan Chemical Corporation Integrated Report 2021

8

100.0

2030

2050

0

Toward Becoming a Future-Creating Enterprise
Aiming to build a business portfolio that is resilient to changes in the businessenvironment, we will strengthen our R&D capabilities and promote the creation of thenext growth engine.
We will continue to focus on R&D as a source ofcompetitiveness. To this end, we will continue to invest
in R&D having maintained a high sales-to-R&D
expenses ratio of 7.9% in FY2020. In order to further
improve the quality of research themes and realize
efficient R&D, we will promote digital transformation(DX) in addition to our existing system, and strengthen
our infrastructure by utilizing AI for R&D themes,
promoting automation, utilizing reverse synthesis
analysis software, and training digital human resources.
In July 2020, we established the Digital Promotion
Office, which is working to speed up the DX of theentire company.
In addition, we are working to build a more robust
business portfolio. In particular, due to the spread of
COVID-19 infections, we have reaffirmed building abusiness portfolio that is not easily affected by businessenvironmental changes is an important management
issue.
Aiming to build a business portfolio that is resilient tochanges in the business environment, we will
strengthen our R&D capabilities and promote thecreation of the next growth engine.

We will strive to create an organization where diverse human resources can take onchallenges toward our goals.
In 2050, the year in which we will attempt to realize
the goals of the new long-term business plan, the coreof the workforce will be from “Generation Z”, which
follows the millennial generation. We believe thathuman resources with more diverse values than everbefore will work together in the Company. For
developing human resources in the Company, it is also
important to foster an environment where such diverse
opinions and talents can be displayed to the fullest.
In April 2021, we released our Diversity Statement.
Although we have worked on diversity promotion so far,the Diversity Statement allows us to clearly state where
we stand regarding the matter. I would like for us tocreate an environment where diverse opinions can be
expressed in a free and open atmosphere, and whereindividual strengths can be utilized to achieve highperformance as an organization or to become a driving
force for innovation.
We have also begun to reform our personnel system.
Our goal is to provide opportunities using the personnel
system for employees who are motivated and willing totake on new challenges by focusing on their roles, noton what they can do but on what they will accomplish.
We will move away from the so-called “mere ability andperformance” principle to develop human resources
and create an organization that can utilize humanresources who can voluntarily set and solve problems.

Diversity Statement
At Nissan Chemical, it is important that theindividuality and talents of each individual bedemonstrated and that the purpose of theindividual be connected to society through theCompany. 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 withhope and happiness as well as realizing thewell-being of people who work.
We regard diversity initiatives as an important
theme for achieving both the well-being of ourworkers and the happiness of society, and aim
to achieve our Diversity Vision through allmeasures.

Nissan Chemical Corporation Integrated Report 2021

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

We will contribute to the sustainable development of society through our businessactivities by deepening our commitment to ESG and SDGs.
One of the long-term issues is the active promotionof CSR management, which requires us to contributeto solving social issues based on ESG (Environmental,
Social, and Governance) and SDGs (Sustainable
Development Goals) established by the United Nations.
In order to realize our corporate vision for 2050, it isextremely important to clearly define the key issues tobe addressed.

In our next mid-term business plan looking ahead to2050, we will formulate measures to respond to social
demands, including ESG and SDGs, and contribute to
the sustainable development of society through ourbusiness activities. In addition, we will set KPIs (keyperformance indicators) in an effort to gain
stakeholders' understanding of the Group's businessactivities.

Closing
There is still no end in sight for the spread of
COVID-19 infections. In the current fiscal year, we willcontinue to face an uncertain business environment in
conducting business activities due to factors including
the deepening conflict between the US and China.
In this environment, we believe that the Group will beable to establish an even stronger business foundationby properly grasping changes and steadily
implementing measures to address various issues inany phase, based on our corporate philosophy of “Wecontribute to society in harmony with the environment,
based on our excellent technologies, products andservices.”
In addition, we will make a concerted effort tobecome a corporate group that is trusted by all our
stakeholders by improving the soundness andtransparency of our management, ensuring thoroughcompliance, giving greater consideration to theenvironment, and promoting social contribution
activities more vigorously. I hope we can rely on yourunderstanding and support in the future.

Nissan Chemical Corporation Integrated Report 2021

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Message from the CFO

We will actively return
profits to our shareholders
while maintaining an ROEof 16% or increasing it.

MIYAZAKI Junichi
Director, Senior Executive Vice
President, CFO

About Our Financial and Capital Strategies
We place importance on ROE as a management indicator and set numerical targets bybreaking it down.
We place importance on return on equity (ROE) as
the basis of our financial strategy. In order to realize ourcorporate philosophy “We contribute to society inharmony with the environment, based on our excellent
technologies, products and services”, we have set ROE
as our most important target value as a management
indicator that is consistent with our business conceptof producing high value-added products with limited
resources, shareholders' equity, to make profits.
We have maintained this policy since the mid-2000s,
and although we aimed for an ROE of 16% or more in
the “Vista2021” mid-term business plan (2019-2021),
in FY2020, we achieved an ROE of 17.5%. Since
recording an ROE of 9.5% in FY2011, it has beensteadily increasing for nine consecutive years and has
been maintained at a high level, more than double the
8% that is generally considered to be a “passing
score.”
In formulating the next mid-term business plan
starting in FY2022, we will continue to set ROE as themost important management indicator and set othertargets based on it. We also intend to look at matterssuch as finding the balance between paying dividends
and share repurchase while listening to the opinions ofinvestors.
The financial impact caused by the global spread of
COVID-19 infections, which began in the latter half of
FY2019, is only minor at this point. Although there weresome negative aspects that interfered with sales
activities, semiconductor-related demand grew in linewith the spread of telecommuting and remote meetings
and the increase in opportunities to view videos on
computers and tablets. As a result, our company's
business performance was also favorable, and we wereable to return profits to our shareholders and others asplanned without any major changes in our financial andcapital policies while investments in large-scaleacquisitions in our agricultural chemicals business also
progressed smoothly.

Nissan Chemical Corporation Integrated Report 2021

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

R&D Expenses*1(billion yen)

Personnel Allocation(Regular Position)*2

18.0
17.0
16.0
15.0
14.0

16.1
2016

17.2

2017

17.8

2018

17.2

16.5

2019

2020

15%
39%

(FY)

R&D Expenses for Nissan Chemical

29%

R&D expenses/Sales (comparison with general chemical manufactures)*1

17%

（％）
10.0
8.0

R&D personnel
Manufacturing andTechnical Development personnel

6.0
4.0
2.0
0.0

8.9

8.9

8.7

8.3

7.9

Sales and Marketing personnel

3.5

3.3

3.1

3.5

3.8

2016

2017

2018

2019

2020

R&D expenses/
sales for Nissan Chemical

Management division(FY)

Average of R&D expenses/
sales for general chemical manufacturers*1

Consolidated basis*2 March 2021, non-consolidated basis

About Our Investment Plan
We secure a financial level that allows us to give top priority to R&D investment.
We aim to change society for the better by constantly
creating innovative technologies and reflecting thosetechnologies in our products. For this, we are actively
investing in research & development (R&D). While theaverage of sales-to-R&D expenses ratio (R&D expenses/
sales) in the chemical industry is 3% to 4%, our sales-toR&D expenses ratio for FY2020 was 7.9% (annual
investment of about 16.5 billion yen). It has maintained ahigh level (approximately 8% to 9%) for the past 10
years. The majority of the breakdown is investment in
Performance Materials and Agricultural Chemicals.
In terms of human resources, about 40% of
employees of regular position are allocated as R&D
personnel (non-consolidated basis). In this way, we areat a level where we can fully implement various fiscal
policies while giving top priority to R&D investment.
Our operating margin in FY2020 was 20.3%. It has
been maintained levels of 10% or more for 18
consecutive years since FY2003. This is an
exceptionally high level of performance that has been
maintained over a long period of time in the chemicalindustry, where performance is easily affected bychanges in the business environment.

In regards to new activities, we began full-scale
investment, approximately 300 million yen, into thedigital transformation (DX) of our operations in FY2020.
We are starting with our plants as the first targets, andexpect to invest about 400 million yen in FY2021. In thenext mid-term business plan starting in the next fiscal
year, DX is expected to be one of the major pillars, andwill be expanded to entire company in the future.
Also, in the agricultural chemicals business, we havestarted construction of a multi-plant within the Onoda
Plant. We are planning to invest a total of approximately
3 billion yen to address the bottlenecks and lost sales
opportunities caused by the inability to keep up withthe changeover of production lines to manufacture avariety of products and to prepare for the launch of
new products planned in the pipeline of agrochemical.
In addition, we are planning to invest in a manufacturing
plant in line with the progress of a joint venture projectin India.
Furthermore, we will maintain a high level ofinvestment in R&D, at around 9% of net sales, togenerate growth engines that will lead to new
businesses in the future.

Nissan Chemical Corporation Integrated Report 2021

12

Capital Efficiency and Shareholder Returns
We have achieved stable shareholder returns over the long term.
We have placed great importance on returning profits
to our shareholders. The FY2020 dividend was 104 yen
per share and has continually increased over a 10 year
period. Although the dividend payout ratio (dividend/net
income per share) was around 30% until FY2015, it has
been gradually increased, reaching 44.9% in FY2020.
In regard to capital efficiency, as I have alreadymentioned, ROE is given importance. Therefore, theamount of shareholders’ equity is controlled based on
ROE. In particular, we have been aggressively pursuingshare repurchase to improve our ROE. Although theamount reached 10 billion yen in FY2020 just as in
FY2019, the repurchased shares were basicallycanceled in the same year. This makes it possible toactively return profits to our shareholders, including
dividends and share repurchase.
On the other hand, “Vista2021” sets the target for
the total payout ratio ((total dividend + share
repurchase)/net income) at 75% (45% for dividends
and 30% for share repurchase) for FY2020 and
FY2021. Our total shareholder payout ratio has beenover 70% since FY2015. It was 74.6% in FY2020,
which was close to the target and quite high comparedto the average of about 45% for Japanese companies.
Furthermore, the equity ratio was 74.9% in FY2020,and since our financial stability is sufficiently secure, I
believe that it is not necessary to accumulate a larger
amount of capital. Both cash and deposits are at a

sufficient level, and we are in a very favorable state interms of cash flow. We plan to continue to utilize thiscash for investment and shareholder returns asneeded.
We will continue to adhere to our policy of placing
the highest priority on shareholder returns and making
commitments to our investors regarding our promises
on various management indicators such as ROE andtotal payout ratio.

ROE(comparison with general chemical manufactures)

Total amount of dividend/Share repurchase/
Total payout ratio(billion yen)

(%)

25.0

100

20.0

70

15.0

14.6

15

9.0

9.0

75

75

10.0

10.0
50

9.0

5.0

10.2

7.9

12.1

13.1

2018

2019

15.0

0
2016

2017

Total amountof dividend (left axis)

Share repurchase(left axis)

02020 (FY)
Total payout
ratio (right axis)

Total payout ratio
(%)
80

16.1

72

10.0

（％）
20

15.1

71

16.6

16.9

17.5

71

70

71

72

75

75

2019

2020 (FY)

64
60

12.7
40

10

35
23

23

24

23

2015

2016

2017

20
5
0
0

2014

2015

2016

2017

2018

2019

2020

2014

Total payout ratio of
Nissan Chemical(FY)

Nissan Chemical Corporation Integrated Report 2021

13

2018

Average total payout ratio ofgeneral chemical manufacturers

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Dialogues with Investors
Increasing ESG related dialogues allows us to listen to opinions from various
perspectives.
We have made opportunities for dialogues withstakeholders such as institutional investors andanalysts as much as possible, and actively explained
about and exchange opinions on mid- to long-term
growth strategies, efforts to solve social issues, etc.
Due to the need for COVID-19 infection control
measures, we conducted all investment information
sessions for individual investors in FY2020 by switching
to online-based investment information sessions using
our website. As a result, about 200 people (persession), almost twice as many as at the previous inperson sessions, accessed the website, and we wereable to receive a variety of questions and opinions from
more diverse perspectives than ever before, partly due
to the increased participation of relatively young
investors.
Something special about FY2020 was the increase in
ESG related dialogues held. In particular, various parties
had many questions for us about greenhouse gas(GHG). Originally, our GHG emissions wereapproximately 350,000 tons, which is significantly lower
than around the 5 million tons emitted by major
integrated chemical companies. We will continue ourefforts to achieve our target of reducing GHG emissions
by 30% by FY2030 (compared to FY2018).
However, since it is difficult to achieve a return on
investment when reducing GHG emissions, we will
introduce the Internal Carbon Pricing (ICP) system andwill use it as a guideline for investment decision-making
while listening to the opinions of our stakeholders as
we strive to help realize a low-carbon society.
In addition, we have received many questions
regarding the appointment of female directors andexecutives. We will continue our efforts to promote theadvancement of women, which includes theappointment of one female director in June 2021.
We will continue to provide more opportunities for
dialogue with our stakeholders and strive to further
enhance dissemination of information.

Dialogue with institutional investors

Dialogue with individual investors

Dialogue with analysts

ESG related dialogues

262

2

51

4

Nissan Chemical Corporation Integrated Report 2021

14

Long- and Mid-term Business Plans“Progress2030” Long-term Business Plan
In April 2016, we initiated the “Progress2030” longterm business plan, which focuses on our business efforts
to 2030, and the “Vista2021” six-year mid-term business
plan.
During the establishment of “Progress2030”, we held
many discussions addressing where we must head as acompany, what we can do and contribute to as acompany with a global perspective on social andeconomic changes leading up to 2030. The plan aims to
make Nissan Chemical “A corporate group that creates
better future for people and the environment by helping tosolve social issues” taking into account social issues suchas ESG (Environment, Social and Governance) and SDGs
(Sustainable Development Goals). Based on this, we havedefined our business model as “A Future-CreatingEnterprise that Responds to Social Needs with Unique,Innovative Technologies”, and have provided two

definitions for our corporate vision in 2030: “A corporategroup which provides new values for helping to enrichpeople’s lives by integrating internal and external
knowledge with facing globally-changing society” and “Agroup of first-class pioneers who blaze a way to the futurewith enthusiasm by trusts they have built and skills they
have cultivated”.
For 2030, we set numerical targets of 300 billion yen insales and 50 billion yen in operating income. Based on
our five core technologies we have cultivated, “Fine
Organic Synthesis”, “Functional Polymer Design”,“Ultrafine Particle Control”, “Biological Evaluation”, and“Optical Control”, we will contribute to solving global
issues in the four fields of “Information & Communication”,“Life Sciences”, “Environment & Energy”, and “Chemicals& Affiliates”, and will strive to improve company value
along with the development of society.

Sales Target in 2030 and Our Core Technologies

Information &Communication

Life Sciences
100 billion yen

100 billion yen

Environment & Energy
50 billion yen

Chemicals & Affiliates

Fine Organic
Synthesis

50 billion yen

Core Technologies
Functional
Polymer
DesignUltrafineParticle
Control

OpticalControl
Biological
Evaluation

Nissan Chemical Corporation Integrated Report 2021

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

“Vista2021 Stage II (2019 to 2021)” Mid-term Business Plan
“Vista2021” is a six-year mid-term business plan thatshows the “ideal state” of the company in 2021 basedon backcasting (setting current measures by working
backward from a future state) as a transit point to2030.
Stage I, the three-year period which comprised thefirst half of “Vista2021”, moved forward favorably.
However, we have identified three issues that need tobe addressed in order to ensure future growth: 1.
Inclination toward certain products that drive profits, 2.
Delays in creation of new products, and 3. Insufficient
preparation for risks that will hamper growth.
For this reason, in formulating Stage II, the second
half of “Vista2021,” we drafted the following three ideal
situation at 2021: “Performance Materials andAgricultural Chemicals are driving business results while
the next growth engines are being created”,“Organizations that enjoy challenges have been realized
and diverse human resources demonstrate theirabilities to achieve goals”, and “We contribute to thesustainable development of society through ourbusiness activities”. In addition, based on thechallenges we faced in Stage I, we have set three basic
strategies to achieve these goals: “Increase profitabilityof products that are the sources of growth”,“Strengthen the ability to create new products”, and“Improve ability to adapt to social/market changes”.
As for FY2021 numerical targets, which is the final
year of Stage II, we have set a sales target of 235 billion
yen, operating income target of 43 billion yen, ordinary
income target of 44 billion yen, net income target of 33
billion yen, and an operating margin target of 18.3%.
We are stepping up our efforts by utilizing thecapabilities of the entire group.

Ideal Situation at 2021

● “Performance Materials” and “Agricultural Chemicals” are driving business results while the next growthengines are being created● Organizations that enjoy challenges have been realized and diverse human resources demonstrate theirabilities to achieve goals● We contribute to the sustainable development of society through our business activities

Basic Strategies● Increase profitability of products that are the sources of growth● Strengthen the ability to create new products● Improve ability to adapt to social/market changes

Management Indicators
FY2019FY2020

FY2021 (target)

FY2030 (target)

Sales

206.8 billion yen

209.1 billion yen

235 billion yen

300 billion yen

Operating income

38.6 billion yen

42.5 billion yen

43 billion yen

50 billion yen

Ordinary income

40 billion yen

43.9 billion yen

44 billion yen—

Net income

30.8 billion yen

33.5 billion yen

33 billion yen—

Operating margin

18.7%

20.3%

18.3%

—

ROE

16.9%

17.5%

16% or higher—

Dividend payout ratio

42.8%

44.9%

45% maintained—

Total payout ratio

75%

75%

75% maintained—

Nissan Chemical Corporation Integrated Report 2021

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Feature
Contributing to Maintaining the Food Supply by Correctly Evaluating Safety
Toxicology & Environmental Science Department
Safety evaluations are indispensable during the development of agrochemicals. We asked Dr. FURUKAWA,
General Manager of Toxicology & Environmental Science Department, about the process of commercializationof agrochemicals through strict inspections and the role that agrochemicals play in solving the social issue of
stable food supply.

After product screening, it takes three years for initialdevelopment to evaluate whether selected substancehas any toxicologic problems in releasing to the market,
and takes another eight years until the product islaunched, through a full-scale development decision,
tests for registration application, and various
examinations (see Figure A).
The development process for agrochemicals is similar tothat for pharmaceuticals. In the case of pharmaceuticals,
however, safety for the patients are considered important.
Whereas, in the case of agrochemicals, we must ensure
the safety of three parties, the farmers who use
agrochemicals, the consumers who eat crops, and theaquatic organisms and safety tests are mandatory.
For the safety inspection of applications, the Food
Safety Commission of Japan evaluates the risks basedon the safety test data we submit, the Ministry ofAgriculture, Forestry and Fisheries sets standards on
the use of pesticides for farmers, the Ministry of Health,Labour and Welfare sets maximum residue limits for
agrochemicals for consumers, and the Ministry of theEnvironment sets standards to withhold registration foraquatic organisms (see Figure B). Once thesestandards are met, crops to which the agrochemical
was applied will be allowed to be sold on the market.

FURUKAWA Satoshi, PhD, DVM
Associate Executive Officer and Deputy Head of
Biological Research Laboratories, and General Manager
of Toxicology & Environmental Science Department—Please tell us about the role of the
Toxicology & Environmental Science
Department.

—Please tell us about the process behind
how agrochemicals are released to themarket.

The Toxicology & Environmental Science Department
consists of the Toxicology Group, which evaluatestoxicity of chemical substances, and the Environmental
Science Group, which evaluates the environmental
dynamics of agrochemicals. The Toxicology Groupinvestigates the toxic impact of agrochemicals with invivo and in vitro studies. The Environmental Science
Group investigates the quantity of residual

Generally speaking, it takes about 11 years from thestart of agrochemical development to the launch of the
product with the development cost for a product beingaround 50 billion yen.

Nissan Chemical Corporation Integrated Report 2021

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Development Period, Development Cost,
and Probability of Success of Agrochemicals

Review of Agrochemical Safety

InitialDevelopment

Safety Test Data

Screening

Synthetic Process
Investigation
Test in
Small Field
Greenhouse
Test
Physicochemical
Test

Sale

Scale upto Pilot
Large Field
Test

Cabinet Office: Food Safety
Commission of Japan

Initial Metabolic &Metabolic &Residual Test Residual Test (GLP)

Toxicity
Screening Test

Initial Safety
Test

Un-Known
139,429

3 years

compoundFull-scale
Development

SafetyTest (GLP)

8 years2
Development Cost：
50 billion yen

Standards to Withhold
Registration
Ministry of theEnvironment

Maximum Residue Limits
Ministry of Health,Labour and Welfare

Standards on the
Use of Pesticides
Ministry of Agriculture,
Forestry and Fisheries

Aquatic organism

Consumer

Farmer1

Figure. A

Figure B

agrochemicals in crops and in the soil and water, andhow they are metabolized (broken down).
The safety of an agrochemical cannot be evaluatedsimply by its toxicity. It is difficult to say which is safer: ahighly toxic agrochemical but hardly residual in crops,
or a less toxic agrochemical but remains in large
amount. In other words, it is necessary to make acomprehensive risk assessment based on the strengthof the toxicity (hazard assessment) and the amount ofresidual agrochemical (exposure assessment).
Therefore, for our company, the Toxicology &Environmental Science Department conducts risk
assessments with the Toxicology Group in charge ofhazard assessments and the Environmental Science
Group is in charge of exposure assessments.
Since safety test is common to both pharmaceuticals
and chemicals, the Toxicology Group conducts safety
evaluations for the entire corporate research. The
Environmental Science Group specializes inagrochemicals development and is inspected by the
Ministry of Agriculture, Forestry and Fisheries once
every three years as a GLP-compliant facility that can
submit materials for agrochemicals applications.

The second is the ability to conduct tests flexibly. In
the case of outsourced testing, testing is conductedaccording to the convenience of the client, whereas
in-house testing allows us to prioritize the magnitude of
the issue and respond quickly. In addition, we canconduct additional test if necessary.
Third, we can accumulate experience and know-how
within the Company by conducting the tests that
require skill. This also leads to the development of
human resources as experts.

—What are the future plans of the Toxicology &Environmental Science Department?
This is partly my personal wish, but I would like tospread a greater understanding of the safety ofagrochemicals. I sometimes see theories thatemphasize the risks of agrochemicals, but most ofthem are overlook the risk assessment. If
agrochemicals are used to increase the yield per unit
area in areas where food shortages are serious, many
lives can be saved. We hope to correctly inform theworld about the role and safety of agrochemicals.
As for the Toxicology & Environmental Science
Department, we will focus on human resource
development so that each of our researchers can form
an intellectual group with a high level of expertise withthe goal of becoming a research department thatpossesses the ability to make rapid, accurate, andhighly precise decisions related to productdevelopment. We will continue to contribute to the R&D
of all Nissan Chemical businesses by conducting safety
evaluations of chemical substances from theperspective of regulatory science, and by managing theorganization with a sense of unity in cooperation witheach business division.

—You conduct safety evaluations in-house.
What is the advantage of having a
specialized in-house section performing
safety evaluations rather thanoutsourcing?
We conduct all the initial safety tests and some of thetests for registration applications in-house.
There are three advantages in doing so. First, we canconfirm and understand the nature of the toxicity with
our own eyes, and determine accurately whether it issafe or not though it's hard to get the image of
expressed toxicity since the test results are received in
paper simply in the case of using outsource.

Nissan Chemical Corporation Integrated Report 2021

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Two Groups Work in Tandem to Ensure the Safety of Agrochemicals
In order to ensure the safety of newly developed agrochemicals, the Toxicology & Environmental Science
Department conducts a variety of tests using the latest equipment and advanced technologies. We interviewed
the leaders of the Toxicology Group and the Environmental Science Group to find out about their work and thechallenges they face.

—First of all, please tell us about your workand backgrounds.

knowledge I had accumulated, so I agreed to betransferred to the Toxicology & Environmental Science
Department and am working in my current position. In
passing, Mr. Kusakari was actually my junior atuniversity.

Takeuchi The main job of the Toxicology Group is todetermine types of toxicity that agrochemicals cause tofarmers, consumers who eat the crops, and aquaticorganisms, and intakes at which they occur. The groupconsists of three teams: A general toxicity team that
evaluates various types of toxicity by in vivo
experiments, a mutagenicity team that evaluates
genetic damage, and an aquatic toxicity team that
evaluates toxicity to aquatic organisms.

Kusakari That’s right. We were students in thepharmaceutical department of the same university.
When I was a student, I was engaged in research todetermine the structure of new antibacterial
compounds contained in extracts of bacteria. When I
was looking for a job, Mr. Takeuchi, one of my seniors,
told me that the work of investigating degradability ofagrochemicals in plants and animals was similar to myuniversity research. I thought I could make use of mystructural analysis skills cultivated in university and I
was attracted to the work, so I joined Nissan Chemical.

Kusakari Our job in the Environmental Science Group
is to investigate the degradability of agrochemicals inplants, animals, soil and water, their residue level incrops, and their persistence in the environment such as
soil and water. Agrochemicals sprayed on crops
decompose over time, but sometimes a small amountremains on them. In addition to confirming the degreeof agrochemical remaining, the Environmental Science
Group also conducts research on the degradability ofagrochemicals on crops and evaluates the residue ofagrochemicals themselves and their degradation
products.

—What are some of the difficulties you facein conducting safety evaluations?
Takeuchi The Toxicology Group must strictly
determine whether the products we are developing arereally safe, so I feel that this job is very responsible. Our
job would be easy if we can decide to discontinue
development immediately if even the slightest toxicity isfound in a safety test. However, that would not allow us
to develop anything, would it? One of the hardest partsof this job is that we have to determine from scientific
data whether or not the toxicity found in the safety test
poses a risk to humans or aquatic organisms. To avoid
making biased decisions, we review the test results withthe entire group and have in-depth discussions before
deciding whether the found toxicity poses a risk.

Takeuchi After joining the Company, I worked in the
Pharmaceutical Research Department and was incharge of research on drug metabolism and disposition
that occur in the body when people take medicine. At
that time, I had opportunities to be involved in safety
evaluation, which is similar to what I am doing now. I
thought I could make use of the skills and various

Kusakari The Environmental Science Group analyzes
and evaluates the amount of residual agrochemicals incrops. It is easy to say “Analyze the amount of residual
agrochemicals” in words, but the residue level ofagrochemicals is extremely low. For example, 1 liter ofa soft drink contains about 100 grams of sugar is here.
We can express it as a concentration of 100 grams perliter. The residue level of agrochemicals in crops is
0.01mg/L, which is about the same concentration as
one drop of this soft drink in a bath. In order toaccurately determine the amount of this extremely small
amount of residual agrochemical, we have to use avariety of technologies to purify and concentrate

TAKEUCHI Kazuya, PhD.
Toxicology Group,
Toxicology & Environmental
Science Department

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Vegetable paste

Paddy soil for test

Analysis of residual amountMeasurement of amout of residual agrochemical

samples for analysis, and derive reliable data. I feel a lot
pressure since there is much involved.

Takeuchi The Toxicology Group will continue toactively introduce new technologies and strive toimprove the level of skills to elucidate the mechanism of
toxicity. The world is moving in the direction of reducing
the use of chemical agrochemicals, and there is apossibility of a shift to more environmental-friendly
agrochemicals, such as biological agrochemicals andRNA-based agrochemicals. In anticipation of such
future trends, I would like to take on the challenge ofestablishing safety evaluations that are suitable for new
types of agrichemicals.

Takeuchi One of the hardest things about this job is
we have to stop a project if we determine that thefound toxicity poses a safety risk. This is a very
discouraging decision for those in charge ofdevelopment, who believe in the potential of a new
agrochemicals. That's why we need to communicate
with the people in charge of development and provide
them with explanations so that they will understand thesituation.

Kusakari The Environmental Science Group is
working on the introduction of a method to evaluate theconcentration of agrochemicals not only in crops andsoil, but also in water bodies such as ponds and rivers,
and in groundwater. In addition, the technology for
simulating the concentration of agrochemicals in theenvironment is evolving day by day, and I would like tocontribute to the development of safer agrochemicals
by using these technologies to clarify the previously
unknown dynamics of agrochemicals in theenvironment.

Kusakari I understand your feeling very well. Since
we make decisions based on the residue level, we haveto consider the overall safety of the agrochemical anddecide whether or not to develop it, even if the toxicityof the agrochemical itself is not so strong, if the residue
level in crops or the environment is high. There aretimes when we have to make painful decisions, but thatis the most important thing we can do to ensure thesafety of agrochemicals.

—Please tell us about your job satisfaction
and dreams for the future.
Takeuchi In the Toxicology Group, we are able towork not only with staff involved with agrochemicals
but also with those from various business units within
the Company, such as pharmaceuticals, performancematerials, chemicals, and cosmetics and so on. So, I
can come into contact with various ideas and have theopportunity to learn new things. It’s rewarding for me.

KUSAKARI Kei
Environmental Science Group,
Toxicology & Environmental
Science Department

Kusakari In order to correctly judge the safety ofagrochemicals, I will make full use of analyticaltechniques to clarify the amount of residual
agrochemicals that can never be seen with the naked
eye. It’s rewarding for me.

Nissan Chemical Corporation Integrated Report 2021

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The History of Nissan Chemical
1887-

1923-

Founded under the founding spirit “to dedicate ourselves to prosperityof the nation by agricultural fertility” aiming to solve food issues.
(million yen)
250,000

200,000

Merging of three companies forbusiness diversification

Dr. TAKAMINE Jokichi is referred to as the “Father of Biotechnology.” Tokyo Jinzo
Hiryo, Nissan Chemical's predecessor organization, was started in 1885 when theyoung TAKAMINE Jokichi 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 year with the idea of thecommercialization of fertilizer. SHIBUSAWA Eiichi, who was from a wealthy farming
family, deeply agreed with Takamine's proposal, and as a result established Japan's
first chemical fertilizer company in 1887 becoming chairman (president) himself.
With the Company policy “to dedicate ourselves to prosperity of the nation by
agricultural fertility,” Japan's food production skyrocketed due to the enthusiasm andeffort of the pioneers who led the Company in its early days.

In the first half of the twentieth century, amid a variety of M&A activities bydomestic corporates, we came to turning points with the three-company joint
in 1923 and with the participation to Nissan zaibatsu in 1937.
The three-company joint was a merger of Kanto Soda, Nippon Kagaku Hiryo(renamed from Nippon Seimi Seizo) and Dainippon Jinzo Hiryo (surviving
company).
The Company had been promoting business diversification and entered under
the umbrella of Nissan zaibatsu in 1937, which was the 50th anniversary of its
foundation, renamed Nissan Chemical Industries.
After World War II, under the separation directive based on the Corporate
Reconstruction and Improvement Law, the fat and oil section was separated
into Nippon Oil and Fats (current NOF) in 1949 and Nissan Chemical Industries
newly started.

150,000

SHIBUSAWA Eiichi (second from left) visiting Oji Plant justafter the completion of the three-company joint.
Seen on the left is TANAKA Eihachiro who served ascompany president from 1923 to 1941.

100,0001891 J inzo Hiryo advertisement froman agricultural magazine

50,000Calligraphy by MASUDA Takashi (first president of Mitsui & Co., Ltd) who served as
an executive for Jinzo Hiryo, a position that his eldest son Taro would also hold.

Sales (left axis)

01886

Operating margin (right axis)

1896

1906

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 ofsuperphosphate (fertilizer) started.

1916

1926

1936

1946

FY2010
Others*1 0.2

Others*34.4

1

Pharmaceuticals
9.6

Chemicals
49.6

Pharmaceuticals
4.4

Total
154.2

Agricultural
Chemicals
34.4

Chemicals
4.1

Sales according to segment (billion yen)

Electronic
Materials*2
6.2

Agricultural
Chemicals
4.8

Asia
34.2

Total
154.2

Total
19.7
Electronic
Materials*2
26.2

Europe, USA, etc.
9.1

Operating income according to segment (billion yen)

Japan
110.9

Sales according to region (billion yen)

*1 Others: trading, others, and adjustment*2 Electronic Materials: Predecessor of the Performance Materials segment, which consists display materials and semiconductor materials. Inorganic
colloids belonged to the Chemicals segment in FY2010.
Nissan Chemical Corporation Integrated Report 2021

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data
The graph below shows 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 2020.
The 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.

1965-

1989-

Acquisition of new technological ideas throughentry into the petrochemical business

Becoming a future-creating enterprise that
responds to social needs

In the 1950s, as domestic imports of petrochemical
products expanded and the momentum for domestic
production increased, we established Nissan
Petrochemicals in 1965 and entered the petrochemicalbusiness, starting with the production of higher alcohol.
However, the petrochemical industry experienced astructural slump due to the impact of the two oil crisesof the 1970s. The Company worked to rebuild its
business, but it was unable to improve its profitability
and began rationalization. The company exited thepetrochemical business in 1988.
Although entry into the petrochemical business resulted
in a large deficit, the development of this businessbrought the penetration of technological ideas to theCompany, which led to the development of newtechnologies and businesses such as fine chemicals.

In 1989, we launched our Five-Year mid-term business plan oriented
with two pillars: high-tech fields such as agrochemicals andpharmaceuticals, and traditional technology fields such as functional
products and chemicals.
The results of continued R&D investment in this difficult situation
emerged. By the early 1990s, we released a large number ofagrochemicals on the market, and in the late 1990s, while our liquid
crystal alignment material grew significantly, we entered thesemiconductor field. In the 2000s, sales of Pitavastatin calcium, theactive ingredient of LIVALO ®, an anti-cholesterol drug, increased
significantly and we acquired exclusive marketing rights in Japan to
ROUNDUP ®, the world’s largest herbicide. Since then, newagrochemicals have been launched and in 2013, we began the
shipment of fluralaner, an active ingredient for veterinary
pharmaceutical, which is one of the main products at present.
In 2018, the Company had already been transcending the frameworkof industry in the development of its business and will accelerate thiseffort toward the future. In order to clarify this stance, we changed ourname to Nissan Chemical Corporation.

(%)
40

30

20

Nissan Petrochemicals Chiba Plant (1968)

10
Toyama Plant

GRACIA®

1956

1966

1976

1986

1996

2006

0
2016

FY2020
Others* 0.1
Chemicals 1.5

Pharmaceuticals 0.4
Others*35.1
Pharmaceuticals
6.7

Agricultural
Chemicals
63.8

Chemicals
31.9
Agricultural
Chemicals
18.2

Total
209.1

Total
42.6
Performance
Materials
22.4

Performance
Materials
71.6

Sales according to segment (billion yen)

Europe, USA, etc.
27.5
Other Asian
countries
25.2
Total

Operating income according to segment (billion yen)

* Others: trading, others, and adjustment

Nissan Chemical Corporation Integrated Report 2021

22

South Korea
21.5

209.1

Japan
108.4

China
26.5

Sales according to region (billion yen)

Main Products
Before 2000

After 2000

Chemicals

1964 MelamineThis is widely used as anadhesive agent for
plywood, laminated sheets,molded products, resin
finish for fabric and paper,and paint. It is highly
aesthetic and offers asubstantial level of quality.
As a pioneer of its own
high-pressure process,Nissan Chemical supplies
products both domesticallyand internationally.

1965 HI-LITE®
Chlorinated isocyanulate is
the main ingredient in thisproduct, which is used forsterilization and disinfectionof swimming pools andwater purification tanks,
and thus contributing to
public hygiene.

Performance
Materials

1951 SNOWTEX®SNOWTEX® is a colloidal
solution in which ultrafine
particles of silicic acidanhydride are dispersed inwater using water as adispersion medium. Utilizing
various functions, it is used
for a wide range of products
such as batteries, coating
materials for optical films,
electronic substratematerials, and abrasives for
manufacturing electronic
recording media.

1989 SUNEVER®SUNEVER® is a polyimidebased liquid crystalalignment material. It is
used to coat the surface ofthe outer glass panels, toalign liquid crystal
molecules in a certain
direction.

1989 SIRIUS®
To meet the needs offarmers, we develop andsell a large number of
one-shot herbicides forpaddy rice. The main
component of theseherbicides is SIRIUS®, ourproprietary active
ingredient.

1991 SANMITE®This insecticide / acaricide
is effective against spider
mites and rust mites in fruit
trees, as well as spider
mites and whiteflies invegetables. We also market
this product in about 30
overseas countries.

Agricultural
Chemicals

Pharmaceuticals

1978 TEPIC®TEPIC® is an epoxy
compound which
possesses excellent heat
resistance, weather
resistance, andtransparency. It is widelyused in semiconductors,
LEDs, and substraterelated electronic materials
as well as in powder
coating curing agents.

1998 ARC® *1
ARC® is an anti-reflective
coating developed forsemiconductor lithography.
It is used to coat the part
under the photoresist, toresolve a number of issues
with lithographic exposuresuch as reflection fromvarying substrate levels.
This makes it possible tosignificantly reduce thedevice failure rate.

1994 PERMIT®
We market PERMIT®, ourproprietary active ingredient
which is particularly
effective against
cyperaceous weeds, inJapan under the trade
names of HICUT®, which isa herbicide for paddy ricein the mid to late term thatis highly effective against
the pesky weed Eleocharis
kuroguwai, and INPOOL®
for lawns.

1994 LANDEL®LANDEL® is a calcium
antagonist which has
shown to have a positiveeffect on hypertension andangina pectoris.

Nissan Chemical Corporation Integrated Report 2021

23

2002 ROUNDUP®
We acquired business rights
in Japan for ROUNDUP®, an
herbicide used all over theworld which has low toxicity
to humans and animals anddoes not remain in the soil
or in the environment.

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

For product information, please refer to Business Overview (P35 to 48).

Future2005 AdBlue® *2
AdBlue® is a high-grade urea
solution used in “urea SCR
system”, a technology for
purifying emissions. Whensprayed onto emissions fromdiesel vehicles, it breaks down
nitrogen oxide (NOx) into
harmless nitrogen and water,which helps to reduce
environmental impact.

New grades of TEPIC®
Venus® Oilclean

EUV under layer
Oilfield materials (inorganic)
CMOS image sensor materials
NPAR®, a liquid-repellentbank layer material
ELsource®, a soluble hole
injection material

2008 LEIMAY®
LEIMAY® is afungicide thatworks in a specific
way on diseases
caused byoomycetes andmyxomycetes used
as an atomizing
agent for potatoes,
grapes, andvegetables.

2013 ALTAIR®
ALTAIR® is a
wide-spectrum
herbicide that is
highly effective ineliminating bulrush
and cyperaceousperennial weeds. It
is also effective forweeds that areresistant toconventionalsulfonylurea-basedherbicides. We
market this productin Japan, South
Korea, and China.

2013 Fluralaner
Fluralaner is a compound
invented by Nissan
Chemical used as anactive ingredient in theveterinary pharmaceutical“BRAVECTO®*3” developedby MSD Animal Health(MAH). We manufactureand supply it to MAH as aveterinary pharmaceuticalsubstance. Fluralaner has
remarkable characteristics:
it acts rapidly against
major species of fleas andticks and has a longer
insecticidal effect thanexisting products as its
effects remains even whenhighly diluted.

2018 GRACIA®GRACIA®, a pesticide
developed in-house,
is fast-acting on awide range of crop
pests and has little
impact on honeybees
which are useful
insects. Released inSouth Korea in 2018
and went on sale inJapan in 2019.

2003 LIVALO®This is a statin agent that
greatly reduces LDL cholesterol
and causes fewer druginteractions, offering theadvantage of safety.

Quintec® (fungicide)
DITHANE® (fungicide)(active ingredient: Mancozeb)

Eldecalcitol (generic drug)*1 ARC® is a registered trademark of Brewer Science, Inc.
*2 AdBlue® is a registered trademark of the Verband der Automobilindustrie.
*3 BRAVECTO® is a registered trademark of Intervet International B.V. and Intervet Inc.
Nissan Chemical Corporation Integrated Report 2021

24

Process of Value Creation
Social Issues and Social Changes● Advanced climate change● Global crisis● Advent of a smart society● Changes in lifestyle● Environmental ● Social ● Economic● Exacerbation of the food issues● Increase of requests for consideration of health and safety in the work environment● Intensification of inter-corporate competitions● Labor shortage● Worsening health issues● Diversification of risk factors● Increase of requests for CSR considerations in the supply chain● Increase of interest in corporate governance reform● Increase of requests for information disclosure

Stakeholders
Customers

Shareholders and Investors

Employees

Suppliers

Local Society

Global Environment

InputsCorporate Strategies[P31-P32]

Human Capital
Number of Employees: 1,924*(Number of Researchers: 457)

Provision of new value forhelping to enrich people’s lives[P35-P48]

Core
Technologies[P49-50]* Non-consolidated

Financial Capital

Materiality [P27-P30]

RatingA+ (long-term rating)Intellectual Capital

Fine Organic
Synthesis

Number of Patents Held: 5,479
R&D Expenses: 16.5 billion yen

Functional
Polymer Design
Ultrafine Particle
Control

Manufacturing Capital
CAPEX: 15.8 billion yen

Strengthening of NissanGroup's Business Base
[P53-P54]

Biological
Evaluation
Optical Control

Continuous Improvement of
Responsible Care Activities[P55-P56]

Long- and Mid-term Business Plans[P15-P16]

Social Capital

Corporate Governance/Compliance/
Risk Management

Number of Countries Where
Our Products are Sold: 55[P57-P72]

Natural CapitalBusiness Model

Raw Materials: 393,633 tons
Energy: 96,700 kL*1
Water Resources: 27.8 million m3 *2

Future-Creating Enterprise that Responds to Social Needs with
Unique, Innovative Technologies

Mission Statement/Corporate Philosophy/
Corporate Vision*1 crude oil equivalent*2 water resources input minus effluent[P1-P2]

Nissan Chemical Corporation Integrated Report 2021

25

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Nissan Chemical Group is developing its
business activities in four business domains basedon the five core technologies those have beencultivated over the years.

We aim to achieve sustainable growth together
with society by making effort at the materiality
identified by recognizing various social issues andsocial changes.

Business Domains/Outputs

Outcomes

Corporate Vision in 2030

[P35-48][P33-P34][P15-P16]

Display Materials

Resolution ofSocial Issues

Information & Semiconductor Materials
Communication Optical Interconnect Materials
Sensor Materials“A corporate group which
provides new values forhelping to enrich people’s
lives by integrating internaland external knowledge
with facing globallychanging society”

Agrochemicals
Life Sciences

Pharmaceuticals
Veterinary Pharmaceuticals
Biomedical Materials

Environment &EnergyChemicals &Affiliates

Oilfield Materials
Secondary Battery Materials

Improvement ofCompany Value“A group of first-classpioneers who blaze a way tothe future with enthusiasm
by trusts they have built andskills they have cultivated”

Basic Chemicals
Fine Chemicals

Nissan Chemical Corporation Integrated Report 2021

26

Materiality
Our group has identified the materiality needed torealize the corporate vision in 2030 as “A corporategroup which provides new values for helping to enrichpeople’s lives by integrating internal and external

knowledge with facing globally-changing society”, and“A group of first-class pioneers who blaze a way tothe future with enthusiasm by trusts they have built
and skills they have cultivated”.

Materiality Identification Process
Gain Understanding About Social Issues and Social Changes
Social Issues and Social Changes
Advanced climate change
Global crisis● Exacerbation of the food issues● Increase of requests forconsideration of health andsafety in the work
environment● Advent of a smart society● Changes in lifestyle● Labor shortage● Environmental ● Social ● Economic

Worsening health issues
Intensification of inter-corporate
competitions● Diversification of risk factors● Increase of requests for CSR
considerations in the supply chain● Increase of interest in corporate
governance reform● Increase of requests for
information disclosure

●

●

●

●

Based on our group’s long- and mid-termbusiness plans, we clarified more than
500 keywords for social issues and socialchanges, referring to SDGs and ESGrelated metrics and guidelines.

Keyword Collection
Keywords related to social issues and social changes were classified by theme and collected to form 29
materiality factors.

Management of Impact on Our GroupIn regards to the 29 materiality factors, we considered and analyzed the social issues and social changes
that are expected from now to 2030 and then made arrangements to manage the impact on the Group.

Importance Evaluation
We conducted an evaluation regarding the importance of materiality factors from two perspectives, thatof our company and that of our stakeholders, based on the Group impact.

Opinion Exchange with Experts
We exchanged opinions about materiality factors with experts that possess a high degree of knowledge
in various fields and also took the opinions of stakeholders into account.
https://www.nissanchem.co.jp/eng/csr_info/management/materiality.html▼

Opinions from experts are found on our website.

Materiality Matrix Formulation
After numerous in-house discussions, we formulated a materiality matrix based on the opinions ofstakeholders.

Materiality Identification (through resolution at the Board of Directors meeting)Total of 19 materiality factors were identified after discussions held at the CSR Committee based on themateriality matrix. The results of the meeting were then resolved at the Board of Directors meeting.

Nissan Chemical Corporation Integrated Report 2021

27

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Materiality Matrix
Provision of new value forhelping to enrich people’s
lives

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

Strengthening of NissanGroup's business baseWe aim to strengthen our business base to improve our ability torespond to increasingly diverse and sophisticated marketing needs.

Continuous improvement ofresponsible care activities

We aim to enhance the maintenance of environment, health, and safety
through the operation of the Nissan Chemical Responsible CareManagement System.

High

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

Maintenance and improvementof employees’ health
Personnel retention and trainings
Contribution to local society

Promotion of diversity
Promotion of fair-trading
Promotion of CSR procurement

To Stakeholders

Promotion of occupational healthand safety

Improvement of products quality
Water resources
conservation
Improvement of
capital efficiency

Enhancement of
information security

Priority

Creation of a comfortable workplace
Biodiversity conservation
Management of chemical substances
Reduction of industrial waste
and pollutant emissions

Improvement of marketing powerIntellectual properties exploitation

To the Company

Nissan Chemical Corporation Integrated Report 2021

28

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

Contribution to the improvementof the quality of life
Contribution to smart society
Contribution to the food issues
Adaptation to climate change

Expanding business domains

HighMateriality and KPIMateriality

Provision of new value for helping
to enrich people’s lives

 trengthening of Nissan Group'sSbusiness baseContinuous improvement ofresponsible care activities

FactorOur Initiative

Contribution to health issues

Creation of pharmaceuticals that meet medical needs and biomedical
materials that contribute to advanced medical care

Supply of environmental-friendly
products and services

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

Contribution to the improvement of
the quality of life

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

Contribution to smart society

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

Contribution to the food issues

Supply of agrochemicals to increase crop yields and conserve agriculturallabor, and the expansion of veterinary pharmaceuticals to livestock

Enhancement of R&D capability

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

Improvement of products quality

Continuous improvement of management systems and operations basedon quality policy

Maintenance and improvement of
employees’ health

Review of health promotion measures by the health promotion
committee and mental health checkups

Creation of a comfortableworkplace

Promotion of work-life balance, measures against harassment, andsupport for childcare and family care

Personnel retention and trainings

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

Promotion of diversity

Promotion of active participation of women, hiring foreign students andpeople with disabilities

Promotion of fair-trading

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

Promotion of CSR procurement

Conduct of assessment and audits of suppliers on CSR

Adaptation to climate change

Formulation of BCPs to prepare for the plants’ inability to operate due tonatural disasters

Mitigation of climate change

Energy saving through equipment improvement and fuel conversion that
leads to GHG emissions reduction

Promotion of occupational healthand safety

Establishment of an occupational safety management system andexecution of capital investment in safety

Biodiversity conservation

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

Management of chemical
substances

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

Reduction of industrial waste andpollutant emissions

Reduction of the amount of waste for final disposal volume by reusing
and recycling waste and changing intermediate process methods

Nissan Chemical Corporation Integrated Report 2021

29

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

FY2021 Target

FY2020 Result

License out candidates of drug agents

Started investigator-initiated clinical trial of anti-arrhythmic agent
Established basic technology for nucleic acid drug discovery

Launch of new medical materials

Keio University acquired approval for a clinical study of severe heart
failure using cell clumps formed in prevelex®-coated containers

Launch of new environmental-friendly products

Organic thin film solar battery materials: Promoted overseas development
Secondary battery materials: Focused on the development of next-generation
battery materials
ORGABEADS®: Promoted development as a substitute for micro plastic beads

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

1.1 million per year

Lens materials for CMOS: Sales continued to strongly increase
Expanded adoption of sensors and semiconductor packaging
Semiconductor packaging materials: Continued creating a lineup of newmaterials/Adoption and launch of materials for opticalmaterials offered along with our existing materials
communications
Optical interconnect materials: Final evaluation underway for adoption
Achieving 10% higher sales of agrochemicals than in
FY2018Reaching 1,350 patent applications in three years by FY2021
Achieving 80% outsourcer audit rate in three years by
FY2021Consecutively acquiring White 500 certification
Achieving ratio of taking annual leave of 80% or higher

9.8% higher than FY2018
Cumulative number of patent applications since FY2019: 841(FY2020: 415 patent applications)49％
Acquired White 500 certification for five consecutive years
from FY2016
71.0％

Achieving 10% more job training time per employee than in
FY2017

11 hours of training: All online,
training enhanced through content revisions(11 hours in FY2017)

Achieving proportion of females among employees in theregular position of 10%

10.2％

Holding consultation meetings with Legal Office throughout
the Group by FY2021
Achieving CSR questionnaire survey coverage of 90% (in termsof monetary amount)
Formulating BCP where products account for 50% of
ordinary income

Formulated BCP where products
account for 76% of ordinary income

GHG emissions:
Reducing by 20% from FY2013 level
Energy consumption rate: Improving by 20% from FY2013 level

GHG emissions:
Reduced by 31% from FY2013 level
Energy consumption rate: Improved by 24% from FY2013 level

Achieving zero accident requiring staff time off from work

One accident occurred requiring staff time off from work

Achieving 100% initiative for prefectures in which our Head
Office, plants, and laboratories are located83％

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

87％

99.5% or more recycling rate
Achieving 75% reduction of exhaust gas (SOx + NOx)emissions compared to FY2013

Recycling rate: 97.3％
Exhaust gas (SOx+NOx) emissions: Reduced by 66% from
FY2013 level

62％
84.3％

Nissan Chemical Corporation Integrated Report 2021

30

Relation with SDGs

Management
Resources

Management Resources
Human CapitalIntellectual Capital

Relationship to
Value Creation● The company's growth as a “Future-CreatingEnterprise” and its 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 canenjoy challenges in an innovative manner in cooperation
while promoting various initiatives such as enhancementof educational systems and active participation of women.

● Research and development is the driving force behindthe creation of new technologies and products.
● We will continue to take on the challenge of creatingcompletely new technologies and products based on
our five core technologies: Fine Organic Synthesis,
Functional Polymer Design, Ultrafine Particle Control,
Biological Evaluation, and Optical Control.

● 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 employeequestionnaires prepared by an external specialist
company. A deviation value of 60 or higher isconsidered to be a highly engagement level employee,
and the results are higher than the average forcompanies surveyed by an external specialist company.

● Our sales-to-R&D expenses ratio has always been oneof the highest among all chemical manufacturers.
● The results of our R&D activities are reflected in ouroperating margin. By focusing on high value-added
businesses, we have maintained an operating margin of
10% or higher for 18 consecutive years. This high profit
margin has led to the next phase of R&D.

Personnel Allocation (Regular Position)

Sales-to-R&D expenses ratio

Characteristics(%)
R&D personnel
Manufacturing and TechnicalDevelopment personnel
Sales and Marketing personnel

39%
29%

8.9

8.9

8.7

7.9

5

secured. We are in a very favorable state in terms ofcash flow and can continue to utilize this cash forinvestment and shareholder returns as needed.

● 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 highlevel, 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 shareholders' equity.

Total payout ratio(comparison with general chemical manufactures)
71

70

71

23

24

23

2016

2017

2018

2019

2020 (FY)

We consider R&D is the source of growth, and have intensively
invested our management resources in R&D.

02014 2015 2016 2017 2018 2019 2020 (FY)
Total payout ratio of
Nissan Chemical

Average total payout ratio ofgeneral chemical manufacturers

15.0
5.0
0.0

13.5 12.0

15.1

2016

2017

10.5

Nissan Chemical

15.2

10.6

2018

14.9

10.4

2019

17.0

10.5

2020 (FY)

Competitors (average)*

Related Information* All industries

Strengthening of Nissan Group's Business Base (P53-P54)
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

75

20
0

10.0

75

35
23

* March 2021, non-consolidated basis

72

60
40

17%

(%)
20.0

activities.

● Equity ratio is over 70% and financial stability is well

64

8.3

Management division

Ratio of High Engagement Level Employee● Financial capital is essential for conducting business

(%)
80

10

15%

Financial Capital

Research and Development (P49-P52)

Maintenance and Improvement of Employees’ Healthhttps://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

Nissan Chemical Corporation Integrated Report 2021

31

Message from the CFO (P11-P14)
Financial Review (P75-P86)

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Manufacturing CapitalSocial Capital

Natural Capital● In manufacturing products, it is difficult to avoid placing● Our plants are located in five prefectures in Japan, andwhile the stone-built facilities, which have been
designated as a chemical 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 withresearch laboratories. It is the core plant of ourSpecialty Chemicals business, which engages intechnology development and production of inorganic
materials and display materials used in a wide range offields, 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 toagriculture in Japan and around the world.
● The Toyama Plant (Toyama Prefecture) has developed
into one of Japan's leading integrated ammonia
chemical plants, backed by abundant water andelectricity, and is still manufacturing many derivatives. In
recent years, the plant has also made inroads into thefield of electronic materials, contributing greatly to theadvancement of the global semiconductor industry and
IT technology. The plant has a research function, whichenables 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 forsemiconductor cleaning in response to the needs of thetimes. Currently, the plant also produces sodium
bisulfite, AdBlue®, and other products.
● The Onoda Plant (Yamaguchi Prefecture) has a historyof more than 130 years, having produced Japan's first
agrochemicals in 1910. It currently produces
agrochemicals such as insecticides, acaricides, andherbicides, as well as pharmaceuticals such as
hyperlipidemia treatments, veterinary drugs, andorganic fine chemical products.

● The relationships of trust that we have cultivated over along period of time with a variety of stakeholders,
including local communities and NPO/NGOs, form thebasis for supporting our business activities.

burdens on the environment, such as the use of energy,
water and raw materials as well as the emission ofgreenhouse gases (GHG).
● Based on the Responsible Care Mid-Term Plan which
extends to FY2021 and the long-term target of reducing
GHG emissions by 30% from the FY2018 level by
FY2030, we are striving to reduce our environmental
impact through responsible care activities that consider
the environment, health, and safety.
● The Company's carbon efficiency (GHG emission rate) isrelatively high in the chemical industry due to the
low-carbon investments it has made to date and the● With our Group's sites as foundation to social
characteristics of its products, including the conversion
contribution, as a corporate citizen, we are engaged in aof fuel from heavy oil to natural gas at the Toyama Plant
variety of social contribution activities, focusing on theand the use of hydroelectric power generation byfollowing four areas: promotion of education, science,
Toyama Kyodo Jikahatsuden Co., Ltd. establishedand culture; contributions to local communities;
through investment by companies in the prefecture
conservation of the global environment; and promotion
including us.
of health and welfare and promotion of sports.
● We recognize that the growing demand from investors
and other parties for initiatives to address climatechange will become a tailwind.

Carbon Efficiency (GHG emission rate)(ton/million yen)
10

Summer Riko-Challe (Scienceand Technology Challenge)

Onoda Plant Cherry
Blossom Festival

6.18

2.58

2.33

2.04

2017

2018

2019

5

0

Nissan Chemical

Nissan Bio-Park
Nishi-hongo Tour

7.06

6.46

General Chemical
Manufacturers (average)

Fujimae-Higata Clean-up
Activities*D ue to the spread of COVID-19 infections, Summer
Riko-Challe, Cherry Blossom Festival, and Nissan
Bio-Park Nishi-hongo Tour were not held in FY2020.

Miza Power Station

Continuous Improvement of Responsible Care Activities (P55-P56)
Responsible Care Management
https://www.nissanchem.co.jp/eng/csr_info/responsible_care/management.html

Corporate Information (P87-P90)

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

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 Integrated Report 2021

32

Financial and Non-Financial Highlights
Operating income/Operating margin

Net income attributable to owners of parent/ROE(billion yen)(%)(billion yen)

50.0

25.0

35.0

40.0

17.4

18.1

20.3

18.7

18.1

20.0
15.0

31.4

16.1

15.1

16.6

35.0

38.6

37.1

42.5

14.0

10.0

5.0

0

0.0
2020 (FY)

12.0

20.0
15.0

10.0

10.0

27.1

24.0

33.5

30.8

29.4

2016

2017

2018

Operating income (left axis)

2019

8.0
4.0
2.0

2016

2017

Operating margin (right axis)

2018

Net income (left axis)

Operating income reached record highs for seven consecutive years.
Our operating margin has maintained levels of 10% or more for 18 consecutive years since
FY2003.

10.0
6.0

5.0
0

18.0
16.0

25.0

30.0
20.0

30.0

(%)
17.5

16.9

0.0
2020 (FY)2019

ROE (right axis)

Net income reached record highs for eight consecutive years.
ROE exceeded the level achieved in the previous year and exceeded the earning outlook of
16.6% announced in November 2020.
ROE target during the Mid-term Business Plan (FY2019-FY2021) is 16% or higher.

Total amount of dividend/Share repurchase/Total payout ratio

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

(%)

(yen)

(%)

25.0

100

250

50

20.0

70

15.0

71
9.0

72
9.0

75
10.0

41.5

75

200

10.0

37.7

150

10.0

30

100
7.9

10.2

12.1

13.1

0
2016

2017

Total amountof dividend (left axis)

2018

2019

Share repurchase(left axis)

15.0
50
0
2020 (FY)

68

82

90

2016

2017

2018

2019

0

Total payout
ratio (right axis)

Dividend pershare (left axis)

60.0

50.0

50.0

40.0

40.0

30.0

30.0
49.2

(%)

-3.2

20.0
10.0

0
2018

Dividend payout
ratio (right axis)

EPS (left axis)

0

30.8

2017

0
2020 (FY)

2019

-3.4
-4

53.0

10.0

2016

10

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

45.5

20

Dividends have increased for nine consecutive years from FY2012 to FY2020.
The dividend payout ratio target during the Mid-term Business Plan (FY2019-FY2021) is
42.5% for FY2019 and 45% for FY2020 and beyond.

EBITDA

40.3

232

104

52

(billion yen)

48.0

210

198

180

157

Total payout ratio target during the Mid-term Business Plan (FY2019-FY2021) is 72.5% for
FY2019 and 75% for FY2020 and beyond.

20.0

40

33.1

50

9.0

5.0

44.9

42.8

-5.7

-5.7

28.6

26.6

2017

2018

-5.2
24.6

22.7

2019

-8
2020 (FY)02020 (FY)2016

EBITDA

Liabilities with Interest (left axis)

Nissan Chemical Corporation Integrated Report 2021

33

D/E ratio (right axis)

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Number of full-time employees/
Ratio of females among full-time employees

R&D expenses/Sales-to-R&D expenses ratio(billion yen)
20.0

8.9

8.9

9.8 (forecast) (%)
10.0

8.7

8.3

(number of full-time employees)

7.9

12.0

11.5

1,900

15.0

(%)

11.9

1,950

11.5

11.1

11.0

1,850
10.0

17.2

16.1

17.8

17.2

16.5

16.8

5.0

1,800
1,750

5.0

1,700
0
2016

2017

2018

2019

R&D expenses(left axis)

2020

2021

10.5

0.0
(FY)

9.8
1,772

1,890

1,861

1,819

10.0
9.5

1,650
2016

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

10.5

1,924

2017

2018

Number of full-time
employees (left axis)

9.02020 (FY)2019

Ratio of full-time
female employees (right axis)

Placing importance on R&D, we have maintained a high sales-to-R&D expenses ratio of
8-9%.

Lost-time injury frequency rate*

Monthly average overtime/Annual paid leave acquisition ratio(hours)

1.6

1.48

0.8

0.4

77.2

1.11

1.2
0.85 0.82(%)
80.0 (target)
80.0

20.0

0.76 0.81

0.37 0.37

0.88

0.81

75.8

0.90 0.94 0.93
0.73

19.0

0.37 0.37

20.0
19.3

75.0
73.2

17.7

18.9
0 (target)

71.0

18.0
2016

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (Year)
Nissan Chemical

19.7

0.37
0.00

0

77.6

2017

2018

Monthly average
overtime (left axis)

Chemical industry

2019

2020

2021

70.0
(FY)

Annual paid leave acquisition
ratio* (right axis)*N umber 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)

Waste generation/Recycling rate

(1,000 tons)
600(1,000 tons)(ton/million yen)

3.53

≧99.5
(target)

(%)

97.9

97.7

97.0

97.3

33.7

34.7

34.0

35.3

38.0

50

2016

2017

2018

2019

2020

0
2021 (FY)

40.0

4

100

3.17
400

152

2.58
155

124

3
2.33

2.04

1.96

90
18

91
25

2

31

23

114
19

255

246

232

230

219

203

254
(target)

2015

2016

2017

2018

2019

2020

0
2030 (FY)

55
200

0
Dinitrogen monoxide(CO2 equivalent) (left axis)
CO2 emissions fromenergy use (left axis)

20.0

1

0.0

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

Waste generation (left axis)

Nissan Chemical Corporation Integrated Report 2021

34

Recycling rate (right axis)

Business Strategies

Chemicals
Most of the products of this division are comprisedof industrial chemicals, such as ammonia andsulfuric 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 of fields. By building
an efficient production system, we strive to provide
excellent products and technologies while
reducing the environmental burden.

MATSUOKA Takeshi
Executive Officer
Head of Chemicals
Division

Social Issues and Needs

to be the cause of air pollution, into nitrogen and water,
thereby reducing environmental impact.
* AdBlue® is a registered trademark of the Verband der Automobilindustrie.

With the advent of a smart society and worsening of
global environmental issues, new needs have beencreated in various fields. In addition to general industrialuse, we currently provide customers with products andtechnologies that contribute to solving social issues.
Efforts include providing high purity chemicals forelectronic component manufacturing applications, ahigh-grade urea solution for removing air pollutants,
and use of proprietary cyanuric acid derivatives for
improving water quality.

Fine Chemicals
We offer environmental chemicals such as HI-LITE®,
used for sterilization and disinfection of swimming pools
and water purification tanks, and Venus® Oilclean, amicroorganism formulation that decomposes oils andfats in wastewater from food factories, as well as otherchemicals such as FINEOXOCOL®, higher alcohol usedin products including cosmetics.
We position TEPIC® and melamine cyanurate, highperformance chemicals derived from cyanuric acid, as
key products for earnings growth. In addition to being
used as a curative agent for coating powders, TEPIC®
is seeing an increase in demand for use in electronicmaterials such as solder resist ink and sealants forLED. Melamine cyanurate is used as a non-halogen
flame retardant or an auxiliary flame retardant forvarious engineering plastics. In addition to focusing on
the expansion of applications for these existingproducts, we are promoting research and developmentof our own cyanuric acid derivatives.

Business Vision
Our Chemicals business started with the manufactureof sulfuric acid and ammonia, which are basic raw
materials for fertilizer. We contribute to the realization ofa prosperous, safe, and continuously developing society
by supplying materials used in a wide range of fields,from basic chemicals to high purity chemicals andcyanuric acid based high-performance products.

Business Overview
Basic Chemicals
We sell melamine, sulfuric acid, nitric acid, ammonia
and other industrial chemicals to a wide range ofindustries. The Company is further improving theefficiency of our production system in order to create astronger business foundation to minimize the impact on
our earnings due to external factors, such as changes
in economic trends in Japan or 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, nitricacid, aqueous ammonia and liquid ammonia fromwhich impurities are removed to utmost level.
In addition, we established a manufacturing andsupply system for our high-grade urea solution
AdBlue®* that decomposes nitrogen oxide contained inexhaust gas from diesel vehicles, which is consideredBusiness Results and Outlook(billion yen)
50.0
40.0

34.9

35.7

3.4

3.0

34.3

31.9

1.3

1.5

2019

2020

30.0
20.0
10.0
0

2017

2018

Sales (left axis)

Nissan Chemical Corporation Integrated Report 2021

35

34.6

2.4
2021

(forecast)(billion yen)
6.0
43.1
5.0
5.1
4.0
3.0
2.0
1.0
0
2021

(target)Operating income (right axis)

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Stage II Business Strategies
Opportunities and Risks

Strengths● Strong global demand for cyanuric acid

● Manufacturing process for products with

● Increasing social demand for waterhigh self-extinguishing rates as well as highvalue-added products by developing
derivative products using ammonia as acore raw material● Accumulation of more than half a century
of research and know-how regarding
ultra-high purity of industrial chemicals

sanitation● Increasing demand for products for
information & communication field● Increase of issues at plants due to aging
facilities

Main Measures● Promote sales of cyanuric acid, melamine cyanurate, TEPIC®, HI-LITE®, AdBlue®, and high-purity sulfuric acid

● Enhance maintenance technology through the adoption of digital technology

Progress of Main Measures
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.

2. TEPIC®
The high-performance chemical TEPIC®, which has a distinctive triazine ring, is used in a wide range ofapplications. For electronic material applications, we expect that demand for TEPIC® will continue to grow invarious fields, including the information & communication field (5G base stations for solder resist ink
applications, substrates for autonomous driving, etc.). In FY2020, sales decreased in the first half of the fiscal
year due to the spread of COVID-19 infections but recovered in the second half of the fiscal year with sales
performance almost the same as the previous fiscal year. 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 exportingsome grades of HI-LITE® since they have been certified as materials for disinfectants for drinking water inareas where hygiene management is insufficient, such as in developing countries. We will respond to theglobal demand for disinfection, such as the prevention of the spread of COVID-19 infections, as well as thedemand 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, abusiness field which will continue to grow. We also witnessed an increase in sales in FY2020 due to afavorable level of demand by the semiconductor business. We will continue to maintain high quality andhigh availability.

Nissan Chemical Corporation Integrated Report 2021

36

Business Strategies

Efforts Started After Stage II Initiation
The Chemicals business is susceptible to the effects
of fuel prices, supply demand balance, and market
environment. Therefore, we will continue to strive tosecure stable earnings while flexibly reviewing businessstrategies in response to environmental changes.
We are focusing on the development anddeployment of new products, mainly cyanuric acidderivatives, as a source of sustainable business growth.
We started the full-fledged commercialization of
STARFINE® (zinc cyanurate), from which effects as anadditive for paints and adhesives can be expected.
Together with the new grades of TEPIC®, it has alreadybeen evaluated by many users for various purposes.
Dry film resist made with TEPIC®-VL (new grade TEPIC®)

Provision of Products for Helping to Enrich People’s Lives
High-grade Urea Solution (AdBlue®)*
AdBlue® is used in Selective Catalytic
Reduction (SCR) which is a system for purifying
nitrogen oxide contained in exhaust gas fromdiesel engines. When sprayed into exhaust gas,
AdBlue® converts nitrogen oxide into harmless
nitrogen and water, which helps to reduce
environmental impact. Urea, the main
component of AdBlue®, is a substance which isso safe that it is used in cosmetic products as amoisturizing agent, pharmaceuticals, fertilizers,
and so forth.

AdBlue®

* AdBlue® is a registered trademark of the Verband derAutomobilindustrie.

Venus® Oilclean
Venus® Oilclean is a microorganism
formulation that decomposes oils and fats in
wastewater from food factories and otherfacilities. Compared to the pressurized floating
facility, which is a typical oils and fats in
wastewater treatment system, the facility using
Venus® Oilclean significantly reduces odors andworkload as well as waste with simple
equipment. Some major food factories have
reduced the amount of waste derived from oils
and fats to almost zero by introducing thisproduct.

Nissan Chemical Corporation Integrated Report 2021

37

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Performance Materials
We will contribute to the realization of a smart
society by promoting profitability of display,semiconductor, and inorganic materials, the threepillars of this business, and further expanding
business size through new product development.

ISHIKAWA Motoaki
Managing Executive Officer
Head of Performance
Materials Division

Social Issues and Needs

Semiconductor Materials
We started the manufacture and sale of ARC® *1 in
1998 based on a licensing 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 throughlithography process. We launched OptiStack® *2(multi-layer process material) in 2007 which greatly
expanded our business.
Currently, with the adoption of EUV exposuretechnology (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 opticalshrink.

With the expansion of IoT and 5G as well as theevolution of AI and autonomous driving technology, ourcurrent society is transforming into a smart society
where diverse systems interact to provide advanced
services to everyone. The semiconductors, sensors,and displays that bring these technologies to life arealso required to evolve. It is also expected to provide
products that help protect the global environment andsolve energy issues.

Business Vision
In this rapidly evolving business, it is necessary toquickly and accurately grasp the needs andtechnological trends of the market and customers. For
this, sales, research, and production, including
overseas bases, are integrated, and we emphasize
activities that are closely related to customers. In
addition, we aim to contribute to the development ofsociety by providing products and services that are
useful to the world based on the high technologicalcapabilities that we have cultivated.

*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 thatcan be used without solvent. These products areindispensable materials used in coating materials for
optical films and in abrasives for electronic recording
devices and for other purposes. We are aiming tofurther expand product applications, including use as
an agent to increase oil and gas extraction efficiency.

Business Overview
Display Materials
SUNEVER®, a coating material to align liquid crystal
molecules in a certain direction, serves as our primary
display material. This product was made available forsale in 1989, and we have expanded our market shareby increasing the functionality of alignment materials,
even when the liquid crystal type used is changed fromTN to STN or TFT. In addition, we started the sale ofRayalign®, a photo-alignment material for IPS liquid
crystal, in 2014. This product is currently used in manysmartphones that offer high screen resolutions. It is
expected that product demand for Rayalign® will further
increase in the future as tablet and monitor resolutions
increase.

Business Results and Outlook(billion yen)
80.0
58.8
60.0
40.0

63.0

14.2

15.0

2017

2018

65.5

71.6

75.8

22.4

23.8

(billion yen)
75.1 24.0
17.3

17.0

20.0
0

Sales (left axis)

Nissan Chemical Corporation Integrated Report 2021

38

2019

2020

2021

(forecast)2021(target)Operating income (right axis)

20.0
16.0
12.0
8.0
4.0
0

Business Strategies

Stage II Business Strategies
Opportunities and Risks

Strengths● Increasing demand due to the● A sales and research system closely

development of the information &communication field● Change in demand for shale oil due tofluctuations in crude oil prices● Advent of innovative technology● Intensification of inter-corporate
competitions

linked to customers in China, Taiwan, andSouth Korea● Optical control technology● Functional polymer design technology● Ultrafine particle control technology

Main Measures● Develop and launch new products● Improve existing products and expand their application● Strengthen evaluation technology● Improve and maintain facilities

Progress of Main Measures
1. Liquid Crystal Alignment Materials for TVs
Currently, our major materials for displays are alignment materials for smartphones and tablets, andespecially the photo-alignment material for liquid crystal IPS. 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 based on screen sizes. Also, since we believe that screen resolutions willcontinue 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 FY2020, we were able to partially expand
our customer share for sales of alignment material for VA liquid crystal.

2. Agents to Increase Oil and Gas Extraction Efficiency
Crude oil development is concentrated in specific areas with excellent oil and gas wells and the
production in those areas is increasing. However, it is said that extraction efficiency has reduced due to thephenomenon that oil recovery amounts have generally
decreased due to crowded conditions in areas where oilwells are in close proximity. Based on this issue, we aim
to improve extraction efficiency by developing
applications for use of our inorganic materials. In
FY2020, sales declined due to the spread of COVID-19
infections and the drop in crude oil prices, especiallyduring the first half of the fiscal year. Sales remained at
the same level as the previous fiscal year and lower thanplanned. Under these circumstances, we will actively
conduct field tests and strive to increase sales in orderto focus on developing new applications for existingwells that are not easily affected by crude oil prices,
Shale oil drilling site
including those outside the United States.

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39

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Efforts Started After Stage II Initiation
OLED Materials

Semiconductor Packaging 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 offoldable smartphones with screens of OLED havebegun. We are developing proprietary materials,
including hard coat materials for surface protection,materials that enhance light extraction efficiency, antireflective coating alignment materials, and release layermaterials, which contribute to improving thecharacteristics of smartphones. In addition, ourcompany is also accelerating market development for
ELsource®, a soluble hole injection material, NPAR®, aliquid-repellent bank layer material, and other materials
which can contribute to reducing the cost of large TVs,
production efficiency, and characteristics enhancement.
We are also developing materials for next-generation
self-luminous displays which will be the future display
technology following OLEDs.

Technologies related to high-speed, large-capacity
information and communication such as IoT, 5G, andsensors, are making rapid progress. For this reason,
further miniaturization and higher integration in theformation of electronic circuits are occurring. However,
we are coming close to physical theoretical limits forshrinkage of interconnect and integration, so it isexpected that issues will be overcome through further
evolution of semiconductor packaging technology. In
addition to circuit miniaturization, we have focused
early on technology for 3D packaging with thinned
semiconductor wafers. In 2013, we acquired all sharesof German company, Thin Materials AG andincorporated their advanced processes and material
development technology necessary for semiconductor
packaging, making them our own technologies. We arealso actively working on other next-generation
semiconductor packaging technologies anddevelopment of markets related to sensors.

Foldable display

Image of integrated circuits board with 3D package

Provision of Products for Helping to Enrich People’s Lives
SNOWTEX®, Aluminasol,
Organosilicasol, and NanoUse®
Our inorganic materials on base of ourultrafine particle control technology can be used
for a wide range of applications since it can bedispersed in various types of solvents. By using
them for transformers and motors, it is possible
to improve insulation performance and reduceenergy loss. They also function as a catalyst
binder and base material reinforcing material in
the process of removing exhaust gas fromfactories and automobiles. By making theequipment more energy efficient and longer-life,
these materials contribute to reducing
environmental impact.

Image of exhaust gas removal

Nissan Chemical Corporation Integrated Report 2021

40

Business Strategies

Agricultural Chemicals
We contribute to a stable food supply throughconsistent business activities from the research for
new agricultural chemicals to their development,
manufacture, and sales, and expansion of a broad
HONDA Takashi
product lineup through the acquisition of
Director, Senior Managing
ingredients from other companies andExecutive Officer
joint development of products.
Head of Agricultural
Chemicals Division

Social Issues and Needs
In addition to the conventional agricultural issue ofefficiently preventing damage caused by pests andweeds during crop production, there is an increasing
consumer needs to reduce pesticide residues on crops
and reduce environmental impact.
We also recognize the importance of increasing
agricultural sustainability by small family-owned
farmers, especially in Japan.
As a company that provides agrochemicals, we aremaking various efforts to solve social issues.

Afterwards, we experienced hard times as a result of
in-house development delays and intensifying
competition with competitors. However, since thelaunch of LEIMAY® (fungicide) in 2008, we havereturned to introducing products developed in-houseand started sale of GRACIA® (general purpose
pesticide) in 2018. In addition, we are actively pursuing
the acquisition of other companies' agents and haveenhanced our agricultural chemical product portfolio by
taking over the global product Quintec® (fungicide) in2019 and Japanese and Korean operations for theversatile DITHANE® (fungicide) in 2020.

Business Vision

Veterinary Pharmaceuticals
Through our development of agricultural pesticides,
we have discovered 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, andhave continued to examine these compounds asveterinary pharmaceuticals. In 2008, we entered alicensing agreement with Intervet Inc. Development ofveterinary pharmaceuticals using Fluralaner, acompound invented by us, as an active ingredient has
advanced.
Since launched in Europe and the United States
under the brand name BRAVECTO® * in 2014,
veterinary pharmaceuticals containing Fluralaner as anactive ingredient are now used in more than 100
countries and are leading the growth of Agricultural
Chemicals Division.

In Stage II of Vista 2021, we aim for our entry into
new agriculture related fields while focusing on ourcurrent business of providing distinctive chemicallysynthesized agrochemicals to farmers. For smart
agriculture, which is expected to contribute to themaintenance and development of domestic agriculture,
we started to provide a service since previous fiscal
year to diagnose pests and weeds using a smartphone
application and provide information on effective
pesticides to farmers. Also, we are developing andexamining so-called biopesticides that do not leave aresidue on crops.

Business Overview* BRAVECTO® is a registered trademark of Intervet International B.V. and Intervet Inc.

Agrochemicals
Our agrochemical business started in the 1910s
when our predecessors Nippon Seimi Seizo and Kanto
Soda began manufacturing and selling insecticides andfungicides. Starting with TARGA® (herbicide for grassy
weeds) launched in 1984, we have continued to
manufacture and sell products developed in-housesuch as SIRIUS® (herbicide for paddy rice), SANMITE®
(insecticide/acaricide) and PERMIT® (herbicide forpaddy rice and corn), which have steadily improved
profitability.

Business Results and Outlook(billion yen)
80.0
60.0
40.0

58.1
16.4

62.7

64.0

63.8

18.4

19.3

18.2

66.2

(billion yen)
25.0

70.1
21.1

17.6

5.0
2017

2018

Sales (left axis)

Nissan Chemical Corporation Integrated Report 2021

41

15.0
10.0

20.0
0

20.0

2019

2020

2021

(forecast)2021(target)Operating income (right axis)0Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Stage II Business Strategies
Opportunities and Risks

Strengths● Ability to create distinctive, new agrochemicals● Continuous expansion of the overseas

agrochemicals market● Labor shortage due to the population
decline in Japan● Intensification of inter-corporate
competitions● Supply shortages of active ingredients● Growth of the companion animal market

from the core technologies of fine organic
synthesis and biological evaluation● Experiences and track records spanning many
years from research for new agriculturalchemicals to manufacturing and sales● High level of motivation cultivated throughmaintaining high profit margins andcontinuous growth

Main Measures● Rapidly popularize and promote sale of GRACIA® and take over sales of Quintec® and

DITHANE® in various countries● Strengthen initiatives aimed at large-scale farmers, corporations, and general consumers● Steadily develop new agrochemicals and create pipeline

Progress of Main Measures
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 in 2018
and went on sale in Japan in 2019. We also expect to release GRACIA® in India in 2021 as it
has already become a major product.
GRACIA®

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 plan to launch the sale of the long awaited boom sprayer
nozzle in FY2021.

3. Fluralaner
Veterinary pharmaceuticals for companion animals and livestocks containing
Fluralaner as an active ingredient are available in more than 100 countries. In
2020, a spot-on product for dogs and a spot-on compound designed forexternal and internal parasites found on cats were approved for marketing inJapan and were launched there in January 2021. Along with the declining
birthrate and growing proportion of elderly people, the idea that companion
animals are like a family to their owners is growing in popularity. We expectthat the demand for veterinary pharmaceuticals will increase in the future as
people become more aware about companion animal health.

ROUND NOZZLE®
ULV5ROUNDUP®
MAXLOAD(200L)BRAVECTO® tablets for cats

Nissan Chemical Corporation Integrated Report 2021

42

Business Strategies

Efforts Started After Stage II Initiation
In order to enhance our overseas product portfolio,
we have acquired Quintec® (active ingredient:quinoxyfen) from Corteva Inc. This product is afungicide that is effective in prevention of powdery
mildew and is currently used mainly in vineyards in theUS.
In addition, as in-house developed products,
following the development of a fungicide (development
code NC-241) and 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).
Moreover, we have established a joint venture (Nissan
Bharat Rasayan PVT. LTD.) in India for the purpose of
manufacturing the active ingredients in agrochemicals.
From Stage II, by having this joint venture’s
manufacturing plant together with the Onoda Plant, we
can respond to growing demand for our agrochemicals.
We expect it will contribute to the growth of ouragrochemicals business by a robust active production
and supply system that is cost-competitive.

Provision of Products for Helping to Enrich People’s Lives
Exzolt® *1
As for products that use Fluralaner, ouroriginal active ingredient for veterinary
pharmaceuticals, in addition to BRAVECTO®,
which is designed for external parasites foundon companion animals, Exzolt®, a veterinary
pharmaceutical effective on chicken mites, wasapproved for marketing in Europe in 2017. The
product was later approved for marketing inJapan in April 2021. This is a revolutionary
product that can be administered in watersupply systems for chickens, unlike theconventional method of exterminating chicken
mites which has been inefficient and inadequate.
Chicken mites not only reduce the spawning
efficiency of chickens but are also problematic
to poultry farmers since they are also parasiticon them. Exzolt® is able to very effectively
eliminate these mites. In Europe, it is recognized
as an effective drug from the aspect of animal
welfare*2 and is thought to be useful in relieving
insomnia, reducing stress, and increasing
egg-laying rates in chickens.
*1 Exzolt® is a registered trademark of Intervet International B.V. and Intervet Inc., asubsidiary of Merck & Co., Inc.
*2 On January 28, 2021, MSD Animal Health announced an update to the Summaryof Product Characteristics (SPC) for Exzolt® from the European Medicines
Agency's Committee for Medicinal Products for Veterinary Use.

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Pharmaceuticals
By focusing on drug discovery and manufacture ofactive pharmaceutical ingredients, we are striving
to develop better pharmaceuticals through aunique business model that does not have a sales
department, licensing products which we havedeveloped to pharmaceutical companies.

ISHIWATA Norihisa
Head of Pharmaceuticals
Division

Social Issues and Needs

28 countries around the world. After its substancepatent for Japan expired in August 2013, due to thedecline in market share by generic drugs and theimpact of drug price revisions, the domestic conditions
continue to be harsh. The creation of new drugs is anurgent issue for us.

In Japan, a country with the declining birthrate andgrowing proportion of elderly people, medical services
and pharmaceuticals are becoming more important thanever. Lifestyle-related diseases are increasing due tochanges in lifestyles. So awareness for increasing
expectancies for healthy life is growing. As a solution,safer and more effective medicines, such as personalized
medicine and preventive medicine, are desired.

Finetech®
We are developing a contracting solution proposal
business that provides total support to customers inline with their needs for their development of active
pharmaceutical ingredients (API). We engage in thecontracted development of manufacturing process inthe stages from pre-clinical to commercial production,
as well as manufacture of API and intermediates incompliance with Good Manufacturing Practice (GMP).
Furthermore, we provide related services including
quality designs, stability testing, impurity and metabolite
sample synthesis, and creation of materials regarding
drug master file application (CMC: Chemistry,
Manufacturing, and Controls compliant). Recently, weare expanding supply business of APIs of generic drugs
that responds to the need for highly active drug
substances that require fine organic synthesis andcontainment. In addition to our wide variety ofasymmetric synthesis technologies, oxidation reaction
technology using organic molecular catalysts, andprostaglandin derivative synthesis through a proprietary
two-component coupling method, we also have anabundant amount of experience manufacturing inhouse drugs and agrochemicals, and our strengths
include multi-step synthesis and heterocyclic
compound synthesis.

Business Vision
We entered the pharmaceutical business in 1982
and launched EPATEC®, an external preparation withketoprofen as its main ingredient, as our firstpharmaceutical product. Since mastering thepharmaceutical business from manufacturing to sale,
we have continued challenges in the R&D of innovative
new drugs by making full use of our strategicallydeveloped chemical compound library, our cuttingedge evaluation functions, and our fine organic
synthesis technologies.

Business Overview
In-house Drug Discovery
The development of the anti-hypertension agent
efonidipine hydrochloride marked our start in the drug
discovery business. At the time of its development,
drug development by major Japanese pharmaceuticalcompanies was focused on antibiotics. We focused on
drugs for hypertension and hyperlipidemia, paving theway for success. It was launched in 1994 in Japan,
which is distributed by Zeria Pharmaceutical andShionogi as LANDEL® in Japan and by Green Cross as
FINTE® in South Korea.
In 2003, LIVALO®, anti-cholesterol drug with
pitavastatin calcium we developed as another one of
our focus point, was launched by Kowa Pharmaceutical(current Kowa Company). Currently LIVALO® is sold inBusiness Results and Outlook(billion yen)
10.0
7.5
8.0
1.2
6.0
4.0

7.0
1.0

7.0

6.7

0.7

2.0
0

0.4
2017

2018

Sales (left axis)

Nissan Chemical Corporation Integrated Report 2021

44

6.1

0.9

(billion yen)
1.5
7.5
1.0

2019

2020

0.3
2021

(forecast)2021(target)Operating income (right axis)

0.50Business Strategies

Stage II Business Strategies
Opportunities and Risks

Strengths● Revitalization of research for discovery of● Fine organic synthesis technology● Good Manufacturing Practice (GMP)

APIs for medium-molecule drugs● Increasing demand for generic drugs● Intensification of inter-corporate
competitions

compliant high-level containment
technology● Chemistry, Manufacturing, and Controls(CMC) support for APIs
● Cutting-edge evaluation functions

Main Measures● Create and advance candidate drugs● Expand our contracted manufacturing business and improve profitability

Progress of Main Measures
1. Strengthening Initiatives for Creating
Nucleic Acid Technology and Nucleic
Acid Drug Discovery

3. Establishment of an Efficient Peptide
Manufacturing Technology

Nucleic acid drugs are attracting attention in theirmain roles as next-generation pharmaceuticals. In
2018, we began joint research with Luxna Biotech
for nucleic acid drug discovery, investing in thecompany in February 2020. In June 2020, we werelicensed a novel modified nucleic acid, 2'-MCE,
from Tokyo Institute of Technology and are using it
for our own nucleic acid sequence designs.

We invested 900 million yen in 2018 in a thirdparty allocation of shares of PeptiStar, which isaiming to establish a stable supply system for APIsof constrained peptides. We have developed anovel liquid phase peptide synthesis technology(SYNCSOLTM) that enables dramatic cost reduction.

4. Continuous Launch of Highly Bioactive
Generic Drugs
The demand for eldecalcitol, a drug for treatmentof osteoporosis, is growing because the number ofpatients with osteoporosis is expected to increase
due to population aging. Based on the production
results of maxacalcitol, a highly active vitamin D3
drug, in FY2020 we started the sale of eldecalcitol,which requires high-quality control because of thesusceptibility to decomposition and impurities
caused by oxygen, moisture, and heat in the air.
We will continue to develop a stable supply system
and nurture it as a source of growth.

2. Approaches to Drug Discovery Using
Computational Science
With recent advances in supercomputers, thespeed of computational processing has becomemuch faster. Therefore, it is becoming possible todesign small molecule drug candidates for target
molecules with high precision. In July 2019, westarted joint research with Veritas In Silico on new
small molecule drug discovery targeting RNA.

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Efforts Started After Stage II Initiation
In addition to developing a therapeutic agent for
thrombocytopenia (NIP-022) and an anti-arrhythmic
agent (NTC-801), we aim to license out at least two
chemical compounds in Stage II among several drugcandidate agents which are at the late stage of drug
discovery. Also, drug discovery researches in earlystages are focused on neurological diseases. To raise
the probability of success, we will also concentrateresearch resources to collaborative drug discovery
research with Shionogi and other pharmaceuticalcompanies, and nucleic acid drug discovery researchwith Luxna Biotech.
Pitavastatin calcium, the API of LIVALO®, will serveas an important source for profits during Stage II as
usual. As pressure to control prices increases, we aim
to maximize value with stable production results andhigh-quality APIs.

It will take time to acquire results in in-house drug
discovery business. Until then, our Finetech businesswill support our pharmaceutical business. In addition to
our business of maxacalcitol, which contributed toStage I profits, we are getting our business up to speedwith the launch of the eldecalcitol as a new genericdrug in FY2020. Furthermore, we will start a contracted
peptide manufacture in collaboration with PeptiStar, a
company in which we have invested, using ouroverwhelming technological advantages, including
liquid phase synthesis. During the final year of Stage II,
we will proceed with a full-scale plan to transform
Finetech® into a highly profitable business.
Our pharmaceutical business will continue to boldly
challenge in-house drug discovery while supporting the
backbone by our highly profitable Finetech business.

Provision of Products and Services for Helping toEnrich People’s Lives
APIs Manufacturing(In-house drug discovery business andFinetech®)Liquid Phase Peptide Synthesis
Technology Platform (SYNCSOLTM)
At Chemical Research Laboratories located in
Funabashi City, Chiba Prefecture, we aremoving forward with preparations for ourcontracted peptide manufacturing business inwhich we utilize our proprietary liquid phasemethod technology. Due to their nature,
biological activity of peptides is demonstrated at
microscopic levels. Therefore, we areconducting research and development in a
special experimental environment in which
peptides are physically contained.

We manufacture APIs at the Onoda Plant,
which is located in Sanyo-Onoda City,
Yamaguchi Prefecture. In addition to being GMP
compliant, it is regularly inspected by domestic
and foreign regulators and customers where we
supply APIs, and its level of quality is highly
evaluated.

Nucleic Acid Drug Technology Platform
We are preparing to provide a technology
platform based on basic drug discovery
research using a unique nucleic acid chemical
structure developed by Nissan Chemical andnucleic acid chemical element technology
developed by Luxna Biotech. Furthermore, we
are also engaged in research and developmentof highly safe and more effective nucleic aciddrugs.

Nissan Chemical Corporation Integrated Report 2021

46

Business Strategies

Planning and Development Division
By combining our core technologies with newmaterials and technologies, we are striving tocreate new products and businesses with highadded value that meet the needs of society.
The Planning and Development Division
was newly established in FY2020 to further
accelerate development.

SUZUKI Hitoshi
Director, Managing
Executive Officer
Head of Planning andDevelopment Division

Social Issues and Needs

the fields of regenerative medicine, genetic medicine, and antibody
drugs in the pharmaceutical field, where modalities are becoming
increasingly diverse.

Economic development and technological innovation haveenriched people’s lives and made them more convenient materially.
However, there are various challenges for a sustainable society,such as the declining birthrate, growing proportion of elderly
people, and progressing climate change issues. We are making
various efforts to create new businesses in order to contribute to asociety which boasts health and longevity, an advanced informationsociety, and an environmentally sustainable society.

Information & Communication Materials
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-levelpackage-related materials and power semiconductor-relatedmaterials that are next-generation semiconductor technologies
which break down the barriers associated with miniaturization, andoptical interconnect materials that support high-speed, largecapacity data communications.

Business Vision
As a future-creating enterprise, we aim to realize a sustainable
society by taking on the challenge of exploring the limitlesspossibilities of chemistry and creating high value-added products in
response to customer “trust.”

Environmental-Friendly Materials
We are committed to the development of products that
contribute to zero emission initiatives and lead to the popularizationof bioplastics.
For lithium-ion batteries (LIB) which serve as key components ofelectric vehicles, we have developed FairCurrent®, an undercoat
material designed for quick charging and extending life of batteries,
and are aiming for its early commercialization. We are proceedingwith the development of ECOPROMOTE®, a resin additive forincreasing the crystallization rate in the molding process andimproving the molding cycle and heat resistance in order to solve
issues related to polylactic acid (PLA), which is expected to be
widely used as a bioplastic.

Business Overview
Life Sciences Materials
We are developing life sciences related materials in anticipationof entering the cosmetics market and the expansion of theregenerative medicine market.
In the cosmetics field, NANOFIBERGEL® was adopted in skincare products of cosmetics manufacturers in 2020 and 2021
consecutively. We have also developed ORGABEADS®, which
reproduces a beautiful, transparent skin tone, and are introducing it
to customers.
In the field of regenerative medicine, in addition to FCeM®FP
and FCeM®Cellhesion®, which are cell culture substrates, we arepromoting the development of prevelex®, a product that controls
protein and cell adhesion. In the development of the FCeM® series,
we are developing researching mass production methods formaking them mainstream of cell culture substrates for mass
production of undifferentiated iPS cells. Furthermore, in the field of
mesenchymal stem cell manufacturing, we are developing
Cellhesion® as a scaffold to manufacture inexpensively
undifferentiated cells with high migration performance and enable
autologous and allogeneic transplantation. We are also developing
the prevelex® series of biomaterial adhesion inhibitors for use in

New Material Planning and Research
Management
Through venture capital based investment and other means, we
are working to discover high-quality start-up companies and new
development themes. We are working at the revitalization ofdevelopment themes by introducing new materials in each field andaccelerating commercialization by making licensing agreements withstart-up companies, investing in them, and through mergers andacquisitions.
We are also working to strengthen our R&D capabilities byencouraging the training of researchers and the proper allocation of
resources and by creating systems for the timely decision-making
and creation of themes by the Theme Council.

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Stage II Business Strategies
Opportunities and Risks

Strengths● Expansion of the regenerative medicine● Ability to promote collaborative-based● Growth of the beauty & health market● Thin film coating based interface control

development aimed at the realization of alow-carbon society● Development delays and late arrival of
expected new fields● Fusion of functional material design andmarketproduct creation with customers● Increasing demand for technological

technology

biological evaluation

Main Measures● Acceleration of development by allocating resources to important themes● Improvement of contact with customers and strengthening of solution proposals● Achievement of standardization of our materials through participation in national projects

Progress of Main Measures
1. NANOFIBERGEL®

3. prevelex®

In addition to promoting thepenetration of active ingredients suchas vitamins A and C derivatives,
NANOFIBERGEL® has been
confirmed to have an anti-pollution effect that inhibits theadhesion of PM2.5 and pollen, and has been adopted ina skincare product by a major cosmetics manufacturer.
In April 2021, the product was also adopted for use in
SUGI Pharmacy's private brand Prieclat Cream W. In
the future, we will promote development by expanding
the number of different types of items to use it in.

In recognition of its high safety and coating
performance in applying to microstructures, culture
vessels coated with prevelex® CC1 will be used inclinical research for iPS cell-derived cardiomyocyte
spheroid transplantation.

2. FCeM®Cellhesion®
It has been newly discovered that mesenchymal
stem cells derived from elderly persons can also be
cultured, and studies on autologous transplantation
for these cells for the elderly have begun.

Spheroid cells
generated using
Elplasia™ coated withprevelex® CC1: DU145(human prostate cancer
cell line)

4. FairCurrent®
In tandem with providing samples for use in lithium-ion
batteries (LIB) for electric vehicles, we are also considering
application of the product in next-generation batteries.

Provision of Products for Helping to Enrich People’s Livesprevelex® CC1
Professor Keiichi Fukuda and his colleagues from the
Department of Regenerative Medicine and Advanced
Cardiac Therapeutics, Graduate School of Medicine, Keio
University will begin clinical research in 2021 using
allogeneic iPS cell-derived cardiomyocyte spheroids
created in culture vessels coated with prevelex® CC1, oneof the products in the prevelex® lineup for preventing celladhesion. Currently, cardiovascular disease is the second
leading cause of death after cancer, and many people dieevery year from acute myocardial infarction and heart
failure. We expect that prevelex® will contribute to therealization of regenerative medicine for patients withsevere heart failure.

Nissan Chemical Corporation Integrated Report 2021

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Research and Development
Our Core Technologies

With “Fine Organic Synthesis”, “Functional
Polymer Design”, “Ultrafine Particle Control”,“Biological Evaluation”, and “Optical Control”
serving as our core technologies, we aim tobecome “A Future-Creating Enterprise that
Responds to Social Needs with Unique, Innovative
Technologies” committed to continue creating newtechnologies and products.

Originally started as a fertilizer company, over ourlong history we have grown with “Fine Organic
Synthesis”, “Functional Polymer Design”, “Ultrafine
Particle Control”, “Biological Evaluation”, and “OpticalControl” serving our core technologies.
In addition to further refining these technologies, we
are working to develop new products and technologies
and create new businesses by fusing thesetechnologies while working closely with each otherbetween research laboratories and related
departments. We are also promoting the introduction of
new technologies through joint research with
universities and other companies.

Our Core Technologies and Products
Fertilizer
Silicate soda

Sulfuric acid

Inorganic
agrochemicals

Ammonia

Introduced organic
agrochemicals

Precision Technology

Basic Chemicals

Basic Chemicals● High purity chemicals● Nitric acidfor semiconductors

Existing
pharmaceuticals

Petrochemicals

Polyimides● Urea● Melamine● Cyanuric acid

Heterocyclic Chemistry

UltrafineParticle Control
Performance
Materials(Inorganic Materials)● SNOWTEX®
● Organo sol● Monomer sol

Fine Organic
Synthesis
Chemicals(Fine Chemicals)● Environmental
chemicals● TEPIC ®

Functional
Polymer Design

Biological
Evaluation
Pharmaceuticals
Produced ThroughContracted
Manufacture● Finetech®

New ProprietaryAgrochemicals● TARGA®
● SIRIUS®
● PERMIT®
● LEIMAY®
● STARMITE®
● ALTAIR®
● GRACIA®

Active Ingredients
for Veterinary
Pharmaceuticals● Fluralaner

Nissan Chemical Corporation Integrated Report 2021

49

Proprietary
Pharmaceuticals● LIVALO®
● LANDEL®

OpticalControl
Performance
Materials● SUNEVER®
● Rayalign®
● ARC®
● OptiStack®

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Chemical Research Laboratories

Biological Research Laboratories

Chemical Research Laboratories is Nissan
Chemical’s core R&D site, and is responsible for our
corporate research. In addition to R&D of agriculturalchemicals and pharmaceuticals that utilize the fineorganic synthesis technology, Chemical ResearchLaboratories performs research on companywide
processes, material analysis research, etc.
■ Analysis Research Department■ Synthesis Research Department■ Agricultural Chemicals Research Department■ Pharmaceutical Research Department

Biological Research Laboratories serves as a place
for life science research, such as evaluation research
related to the usefulness and safety of agriculturalchemicals, pharmaceuticals and medical materials.
■ Agricultural Chemicals Research & Development
Department■ Toxicology & Environmental Science Department■ Medicinal Research Department

Funabashi, Chiba

Shiraoka, Saitama

Materials Research Laboratories

R&D Expenses

Materials Research Laboratories creates highly
unique new materials, allowing us to respond quickly toincreasingly sophisticated and diverse market needs.
At the same time, the Laboratories focuses their efforts
on researching next-generation materials in an effort tocreate new markets.
■ Display Materials Research Department■ Semiconductor Materials Research Department■ Inorganic Materials Research Department■ Advanced Materials Research Department■ Frontier Materials Research Department

We consider R&D is the source of growth, and haveintensively invested our management resources in R&D.
Over the last five years, R&D expenses have totaled
84.8 billion yen. The R&D expenses in Performance
Materials and Life Sciences (Agricultural Chemicals andPharmaceuticals) account for more than 40% each. In
addition, about 40% of employees of regular position
are allocated as R&D personnel.
R&D Expenses(billion yen)
20.0
16.1
15.0

17.2

1.7
2.2

Funabashi, Chiba

Toyama, Toyama

10.0

3.8

5.0

7.9

0

2.0

2.5

2.5

4.3

4.5

8.1

8.2

17.2
2.0
2.5
4.6

2.4
4.4

0.3
2020 (FY)

0.6

0.6

0.4

2017

2018

2019

Nissan Chemical Corporation Integrated Report 2021

2.4

7.0

0.5

Sodegaura, Chiba

16.5

7.7

2016

Chemicals
Performance Materials

50

17.8

1.7

Agricultural Chemicals
Pharmaceuticals

OthersVoices of Researchers
Supporting manufacturing using analysis technology

MATSUO Mina
Analysis Research
Department
Chemical ResearchLaboratories

Our job in the Analysis Research Department is to support the development ofmaterials through analysis work in collaboration with other departments. We areworking on the introduction and construction of new technologies in addition to basic
analysis technologies in order to respond to the evaluation of various materials thatare evolving day by day. In research and development, relationships with people arevery important. By accurately grasping the needs of the development side, we canprovide high-quality analysis results. Also, deep involvement can lead to thedevelopment of new analysis technologies. Relationships with people in otherdepartments are one of the most rewarding aspects of my job.
The surface analysis team, to which I belong, uses analysis techniques specific tothe surface and interface of materials to elucidate the mechanisms of function
expression and trouble factors. Electron microscopes allow us to observe thestructure of an object that is invisible to the naked eye by magnifying it several
hundred to several million times down to theatomic level. In this sense, analysis
technology makes the invisible visible. New
materials are created based on what we areable to see. Those materials will be used tocreate a variety of products that will reachmany people, including myself, andcontribute to people's lives. I am proud of myjob which supports such manufacturing
through the use of analysis technology.

Creating next-generation materials

KUNIMI Naho
Advanced Materials
Research Department
Materials ResearchLaboratories

The hole injection layer (HIL) that we are developing is a necessary component toimprove the performance of OLED displays and is required by display manufacturers
to have many characteristics. In order to always meet these demands, we areconstantly developing HIL materials to improve performance. In addition, I always
keep in mind the need to develop materials with a sense of speed, not only bycompleting assigned tasks, but also by identifying issues that may arise in the future,finding solutions, and outputting new materials. Under these conditions, I feel muchrewarded as a developer when the materials that I was involved in developing arehighly regarded by customers.
I was involved in the work
mentioned above in the milestone
year after my maternity leave.
Although it has only been a shorttime since I have been involved inthis work, our goal is to work
together to create standard
materials that will make people say“This Nissan Chemical’s materials
are excellent” in the future.

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Advancing regenerative medicine to benefit people

HIROI Miya
Frontier Materials
Research Department
Materials ResearchLaboratories

Our mission in the Frontier Materials Research Department is to provide uniquevalue through our coating materials by identifying the challenges of the industry,targeting next-generation medicines such as regenerative medicine. In the future, we
hope to save the lives of people with serious illnesses and contribute to theimprovement of their quality of life. Although I have a chemistry background,developing materials requires not only knowledge of chemistry but also knowledge of
biology, including cell culture, and consideration for the safety of the human body. In
particular, I am working on my research every day with a sense of responsibility andurgency that I must not forget since my work is related to human life.
The market for regenerative medicine has
not yet matured. This is why we need to catch
potential needs through conversations, which
will provide us with hints to identify needs, withpeople at universities and companies engaged
in cutting-edge research and use that
information for materials and experiments.
Then, we discuss the results with others. I findsuch a cycle interesting and rewarding. Our
goal for the future is to save many lives throughnext-generation medicine using our materials.
To achieve this goal, I will continue to search
for new issues and apply what I learn about
them to the development of new materials.

Co-creating new value through open innovation

ISHIBASHI Ken
Semiconductor Materials
Research Department
Materials ResearchLaboratories(Currently at Imec)

Imec (Interuniversity Microelectronics Centre), where I am currently stationed, is aleading research institute in the field of semiconductors which owns many types ofresearch equipment, including cutting-edge lithography equipment used insemiconductor device manufacturing. In addition, Imec accepts a wide range of
researchers from semiconductor-related companies and universities of various
countries to conduct joint research.
Resident researchers have two primary missions, which I will address. The first is toutilize the research equipment at Imec and evaluate materials in conditions similar to
those of customers. Since it is very challenging to detect minute differences incharacteristics when evaluating materials used in cutting-edge fields, I feel that there isgreat value in fully utilizing Imec’s research equipment to construct methods for evaluating
differences in characteristics with greater accuracy than possible with existing methods.
The second mission is the continued development of semiconductor-relatedmaterials that will be required by next-generation products through joint research with
Imec and other companies (material and equipment manufacturers). By collaboratingwith Imec and other companies,
we can increase our knowledgeof semiconductor processes andmaterials evaluation. I also find it
interesting to be able to apply
the knowledge I gain throughcollaborative activities to material
development at our company.

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Strengthening of Nissan Group’s Business Basepromoting transformation. Going through the process ofhypothesis verification will lead to commercialization of
products and services for the company.

We are working to secure and develop diverse
human resources in order to improve our R&D
capabilities and product quality. We also aim tostrengthen our business foundation by creating aworkplace where a wide range of employees canbe active and work comfortably, and to enhance
our ability to respond to the various demands ofsocieties.

Self-start Training
For the purpose of laying a foundation for self-starting
human resources who “think and do what they should do,”technical employees focus on training which involves“creating original plans and executing them” for a period of
two years after entering the company and office employees
focusing on thesame for three
years after
entering thecompany. The
ideas proposed byyoung employees
during this training
are often adopted
and used insubsequent work. Self-start training

Securing and Developing
Human Resources
We believe the essence for human resource
development is that each employee will continue toeducate themselves voluntarily in their efforts todevelop themselves. Therefore, we have establishedvarious 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 humanresources development program since FY2019 basedon the Ideal Human Resources Portfolio, a guideline forhuman resources development.

Overseas Language Study Program
In order to work in a diversified workplace, we
believe that it is important to understand each other’scultural backgrounds and ideas to understand eachother, not only language.
Therefore, we have introduced an overseas language
study program with the aim of having employees learn
by experiencing and following different cultures. In
FY2019, we extended the existing program length by
one month to improve it further.

Intrapreneurship Program (started in FY2019)
We have started an intrapreneur (in-house entrepreneur)training program with the goal of developing the abilities ofentrepreneurs andfostering them. With thesupport of active
entrepreneurs, participants
practice behavioral skills in
mixed team selected frommultiple departments andacquire the ability as
innovators through trial
Intrapreneurship programand error.

Personnel Retention and Trainings
https://www.nissanchem.co.jp/eng/csr_info/communication/employee/system.html

Creation of a Comfortable Workplace
With recognition of growing concern for labor
shortage due to the declining birthrate and growing
proportion of elderly people as well as diverse working
styles, our Group promotes initiatives that enable
employees to work in a highly productive manner andachieve a good work-life balance.

Training Before Promotion (revised in FY2020)
In the training before promotion to C3 class (job rankequivalent to subsection manager), participants
formulate a vision for the future and initial hypotheses(questions and answers) and then spend several
months examining and revising the vision andhypothesis 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 throughaccessing the knowledge of the world, developing theirability to interpret information, and acquiring valuable
information, while demonstrating leadership andIntroduction of Systems for Promoting a Good
Work-Life Balance
We have introduced systems and madeimprovements for promoting a good work-life balance.
These include the introduction of a flextime system,
hourly leave system, improvement of annual leave rate
(at least 70% of available annual leave time taken), andintroduction of a system which allows expired paid
leave to be used for nursing/caregiving. In 2018, weNissan Chemical Corporation Integrated Report 2021

53

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

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.

the target of 30% or more for the ratio of females
among new graduates in the regular position and byworking to expand the job categories in eachdepartment within the company, the ratio of females in
the regular position increased to 10% in April 2021.
Going forward, we will accelerate the penetration ofdiverse work styles according to individuality and life
stage of each individual, with the new targets ofincreasing the ratio of females in the regular position to
13% or more, doubling the number of female managers,
and encouraging male employees to take childcare leave.

Promotion of Appropriate Work Hours
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 number of 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.

Promotion of Employment of People with Disabilities
We opened a company-owned farm in Chiba
Prefecture that enables people with disabilities to play
an active role. In the future, we will contribute to local
communities by supporting economic independence ofthem and donating harvests to welfare facilities.

Creation of a Comfortable Workplace
https://www.nissanchem.co.jp/eng/csr_info/communication/employee/dialogue.html

Promotion of Diversity

Maintenance and Improvementof Employees’ HealthWe established our Diversity Statement and Diversity
Vision in April 2021.

Diversity Statement

Basic Health Policy

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 forachieving both the well-being of our workers and thehappiness of society, and aim to achieve our Diversity
Vision through all measures.

We unveiled our Basic Health Policy in July 2018.

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

Diversity Vision
 e will become a vibrant company that is full of job
Wsatisfaction and fulfillment in life through a corporate
culture that respects and accepts various opinions andideas arising from all kinds of diversity*, and creating theopportunities 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 collaboratingwith society.
●

The policy’s three main areas of focus are lifestylerelated diseases measures, mental health care, andquitting smoking. Working together with the Health
Insurance Association, we are implementing measuresfor each. We also established the Health Promotion
Office in August 2020 and introduced a healthmanagement system in February 2021.

* It refers to all kinds of diversity, including not only external attributes
such as gender, age, nationality, and physical characteristics, but alsointernal attributes such as capability, experience, beliefs, religion, values.

Certified Health and Productivity Management
Organization (White 500)

Support for the Development of the Next
Generation and Promoting Active Participationof Women in the Workplace

We have been recognized for the results of ourhealth management initiatives under the “CertifiedHealth and Productivity Management Organization
Recognition Program (White 500)” for five consecutive
years by the Ministry of Economy, Trade and Industry
and Nippon Kenko Kaigi.

In order for individuality and talents of each individual
to be fully demonstrated toward the achievement of theDiversity Vision, we believe that a corporate culture that
respects and accepts all kinds of diversity and therealization of work-life balance are indispensable.
With regard to the promotion of women, by setting

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

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Continuous Improvement of Responsible Care Activities
Mitigation of Climate Change andEnvironmental Conservation

We are putting effort into Responsible Care (RC)
activities designed to secure environment, health,and safety (EHS) performance on voluntary basis
throughout the entire process, from the developmentof chemical substances to manufacture, distribution,use, final consumption and disposal/recycling, andprovide communication with society through theannouncement of their results.

Efforts for Reducing Greenhouse Gas (GHG)
Emissions
Our Group actively works to protect the environment,
including taking efforts to reduce GHG emissions, andcontributes to realization of a decarbonized society
through the provision of environmental-friendly products
and services. Based on our long-term target of reducing
GHG emissions by 30% from FY2018 level by FY2030,
we will continue our efforts to mitigate climate change
which include energy savings, fuel conversion, anddinitrogen monoxide reduction. The GHG emission rate
calculated as a ratio of emissions and sales (emissions/sales) was 52% of the FY2013 level.

RC Management
SystemTo achieve our RC mid-term plan (2016-2021), we
have established RC management system based on
ISO14001*, and we carry out targets management andcontinuous improvements based on PDCA (Plan, Do,
Check, Act).
* International standard for environmental management system. All of our plants
have acquired ISO 14001 third party certification.

GHG emissions(1,000 tons-CO2)
500

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

400

PLAN
Four Codes of RC
ACT
Corrective actions
Annual results report

Environmental Protection/
Safety and Disaster Prevention/
Occupational Safety and Health/Chemicals and Products Safety

Implementation inaccordance withannual plan

250

237

200

55

53

55

31

100

23

153

172

152

155

19

124

2013

2014

2015

2016

2017

300

DO

0

CHECK
Internal Audit

255

CO2 emissions fromenergy use

246

232

230

219

203

114

18
90

25
91

2018

2019

2020

CO2 emissions from
non-energy use

254

2030 (FY)(Target)Dinitrogenmonoxide (N2O)

Index of the GHG emission rate (FY2013 as a base of 100)

RC Audits
RC audits are activities for checking
RC activities at each plant, laboratory
and affiliate. They are carried out by
Environment, Safety & Quality
Assurance Department in accordancewith the RC audit guidelines. In theseaudits, the auditors check whether RC activities, aswell as internal audits and patrols, are carried out
appropriately and the PDCA cycle is implemented
steadily, and compliance about EHS at each location.
Environment, Safety & Quality Assurance Department
clarifies visible or potential problems related to EHS andpromotes improvements in response after clarifying the
problems, if any.
In FY2020, total of 22 RC audits were conducted forour plants, research laboratories and affiliates.

(%)
100

48%

80
60

100

40

95

93

84

68

62

54

52

2017

2018

2019

2020 (FY)

20
0

2013

2014

2015

2016

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
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

RC Management
https://www.nissanchem.co.jp/eng/csr_info/responsible_care/management.html

Nissan Chemical Corporation Integrated Report 2021

55

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Safety and Disaster Prevention

Lost-time injury frequency rate*
1.60

We carry out risk assessment, process risk predictions, andfacility risk predictions by prior assessment for manufacturewith the aim of ensuring safety, achieving stable operations,and improving our process safety capability. In FY2020, a fire
broke out at the Toyama Plant and a leakage accident
occurred at the Nagoya Plant. A fire occurred at thewarehouse of the Toyama Plant due to an non-standardized
chlorine detergent that was to be disposed of which led to atemporary release of chlorine-based gas. Although nochlorine-based gas was detected outside the plant premises,
elementary and junior high schools near the plant experienced
delays in the day. We deeply apologize for the inconveniencecaused by the accident. At the Nagoya Plant, a leak of fuming
sulfuric acid, thought to be caused by wear and corrosion ofpipes, occurred and sulfur trioxide gas was generated. Gas
detectors indicated that there was no impact on thesurrounding area outside the plant premises and nothing
serious occurred. We are taking thorough measures toprevent such fires and leaks from happening again at all oursites. Our plants, laboratories, and affiliates carry out various
drills and training sessions such as earthquake fire prevention
drill every year, and are designed to make us ready to respondto emergencies or accidents in a speedy and reliable manner.

1.48

1.11

1.20

0.94

0.88
0.80

0.88

0.85

0.82

0.37

0.37

0.72

0.76

0.81

0.81

0.93

0.73

0.37

0.40
0.36

0.00

0.90

0.36

0.37

0.37
0.00

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (Year)
Nissan Chemical

Chemical industry* Number of deaths and injuries due to occupational accidents per million actual
working hours

promoting risk assessment, prior-work risk predictions,risk predictions training, HHK*1, 5S*2, and appropriate
wearing of protective equipment and by raisingawareness of safety through the safety meeting and theoccupational safety newspapers.
*1 H
 HK stands for Hiyari-Hatto (near miss incident) and Kigakari (alarming). It
means the discovery of near-miss 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.
Promotion of Safety and Disaster Prevention, and Occupational Safety and Healthhttps://www.nissanchem.co.jp/eng/csr_info/responsible_care/safety.html

Management of Chemical
Substances and Products Safety
Risk Assessment in Products Lifecycle
We perform a risk assessment (prior assessment) of
each step in handling chemical products, such as the
R&D, manufacture and sales. The assessment of risks tohuman health and the environment is based on dataobtained by the Biological Research Laboratories, either
on its own or by outsourcing, raw material SDS (safety
data sheets), safety test date obtained from literatureand external databases, physicochemical properties,
and work environment conditions. These results arereported to all the relevant people in the Company. The
results are also made known to people in the value chain
by means such as technology transfer documents.
In addition, we also participate in Long-Range
Research Initiative, an international initiative promoted
by Japan Chemical Industry Association (JCIA) thatseeks to provide long-term support for research on theimpact of chemicals on human health and theenvironment. The activities we engage in aim toadvance research on the assessment of risks to humanhealth and the environment.

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 ourefforts to improve the level of safety and health at eachbusiness location. In addition, we carry out various drills
and training sessions annually with the aim of ensuringsafety, achieving stable operations, and improving ourprocess safety capability to make us ready to respond to
emergencies or accidents in a reliable manner.
In 2020, there was one accident requiring staff totake time off from work and seven cases of accidents
not requiring staff to take time off from work. There wasa reduction in the number of accidents requiring staff totake time off from work compared to the previous year.
We will continue aiming to achieve zero accident by

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

Nissan Chemical Corporation Integrated Report 2021

56

Corporate Governance
Newly-appointed Officers* Officers appointed during the 151st General Meeting of Shareholders held on June 25, 2021.

① KINOSHITA Kojiro (Representative Director, Chairman & CEO)

Reason for appointment

1977 Joined the Company
2002 Director, Head of Corporate Planning Department
2006 Managing Director, Head of Corporate Planning
Department
2008 Representative Director, President & CEO
2021 Representative Director, Chairman & CEO (to thepresent)

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

② YAGI Shinsuke (Representative Director, President & COO)

Reason for appointment

1985 Joined the Company
2013 Deputy Plant Manager of Onoda Plant
2016 Executive Officer, Plant Manager of Sodegaura
Plant
2018 Managing Executive Officer, Head of Production
Technology Department
2020 Senior Managing Executive Officer, Head of
Production Technology Department
Director, Senior Managing Executive Officer, Headof Production Technology Department
2021 Representative Director, President & COO (to thepresent)

Mr. YAGI has been engaged in production technology
for many years, and served as the Deputy Plant
Manager of the Onoda Plant and the Plant Managerof the Sodegaura Plant. He has been contributing to
the improvement of production systems for theCompany Group’s products and to their stable supply.
In addition, as President & COO of the Company
since April 2021, he has been promoting strategies toenhance the corporate value of the Company Group.
Considering his wide-ranging experience,achievements, and insights, the Company judges that
Mr. YAGI is qualified to be a director that performs
decision-making on business operations andoversees the execution of duties by directors.

③ MIYAZAKI Junichi (Director, Senior Executive Vice President)

Reason for appointment

1974 Joined the Industrial Bank of Japan, Limited(current Mizuho Bank, Ltd.)
2000 General Manager of International Department of
The Industrial Bank of Japan, Limited (current
Mizuho Bank, Ltd.)
2003 Corporate Auditor of Mizuho Corporate Bank,
Ltd. (current Mizuho Bank, Ltd.)2005 Managing Executive Officer of Kowa Real EstateCo., Ltd. (current Nippon Steel Kowa Real EstateCo., Ltd.)Managing Director of Kowa Real Estate Co., Ltd.
(current Nippon Steel Kowa Real Estate Co., Ltd.)
2006 Joined the Company, Advisor
Director
2007 Director, Head of Corporate Administration
Department
2008 Managing Director, Head of Corporate
Administration Department
2011 Senior Managing Director, Head of Finance &Accounting Department
2013 Director, Senior Executive Vice President(to the present)

Mr. MIYAZAKI has striven to improve the financial
structure of the Company and contributed to theCompany Group’s growth from a variety ofperspectives as the person in charge of Corporate
Strategy & Coordination since his assumption of office
as director in June 2006, utilizing his wide-ranging
knowledge cultivated through his experience infinancial institutions. Considering his wide-ranging
experience, overseas experience, achievements, andinsights, the Company judges that Mr. MIYAZAKI isqualified to be a director that performs decisionmaking on business operations and oversees theexecution of duties by directors.

Nissan Chemical Corporation Integrated Report 2021

57

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

④ HONDA Takashi (Director, Senior Managing Executive Officer)

Reason for appointment

1981 Joined the Company
2012 General Manager of Planning & Development
Department, Agricultural Chemicals Division2014 Executive Officer, Deputy Head of Agricultural
Chemicals Division, General Manager of Planning &Development Department
2017 Managing Executive Officer, Head of Agricultural
Chemicals Division
Director, Managing Executive Officer, Head ofAgricultural Chemicals Division
2021 Director, Senior Managing Executive Officer, Headof Agricultural Chemicals Division (to the present)

Mr. HONDA has been engaged in the agriculturalchemicals business focused on development ofagricultural chemicals and licensing for many years. As
the General Manager of the Planning & Development
Department since June 2012, and as Head of theAgricultural Chemicals Division since April 2017, he has
been managing the agricultural chemicals business.
The Company judges that Mr. HONDA is qualified to
be a director that performs decision-making on
business operations and oversees the execution ofduties by directors.

⑤ SUZUKI Hitoshi (Director, Managing Executive Officer)

Reason for appointment

1985 Joined the Company
2007 General Manager of Semiconductor Materials
Department, Electronic Materials Division2010 General Manager of Semiconductor Materials
Research Department, Electronic Materials
Research Laboratories
2012 General Manager of Semiconductor Materials
Department, Performance Materials Division2013 Deputy Head of Performance Materials Division
Director, Deputy Head of Performance Materials
Division
2014 Executive Officer, Deputy Head of Performance
Materials Division2016 Executive Officer, Head of Materials ResearchLaboratories
2018 Managing Executive Officer, Head of Performance
Materials Division
Director, Managing Executive Officer, Head of
Performance Materials Division2020 Director, Managing Executive Officer, Head of Planningand Development Division (to the present)

Mr. SUZUKI has been engaged in research ofelectronic materials centering on semiconductormaterials for many years. He served as the Head of
the Materials Research Laboratories and Head of the
Performance Materials Division, and he has
undertaken tasks related to the creation of newmaterials and businesses, which is the driving force
for the Company Group’s growth as Head of Planningand Development Division since April 2020. Therefore,
the Company judges that Mr. SUZUKI is qualified to
be a director that performs decision-making on
business operations and oversees the execution ofduties by directors.

⑥ YOSHIDA Hironori (Director, Managing Executive Officer)

Reason for appointment

New

1985 Joined the Company
2011 Deputy Head of Finance & Accounting
Department
2013 Head of Finance & Accounting Department
2015 Executive Officer, Head of Finance & Accounting
Department
2019 Executive Officer, Head of Personnel Department
2020 Managing Executive Officer, Head of Personnel
Department
2021 Managing Executive Officer, Head of Corporate
Planning Department
Director, Managing Executive Officer, Head ofCorporate Planning Department (to the present)

Mr. YOSHIDA has extensive expertise in the
Company’s operations based on many years ofexperience in the Corporate Strategy & Coordination.
After serving as Head of Finance & Accounting
Department and Head of Personnel Department, hehas been focusing on understanding the status of thebusiness operations of the entire Company andachieving the goals of the Company Group as a whole
as Head of Corporate Planning Department sinceApril 2021. The Company judges that Mr. YOSHIDA isqualified to be a director that performs decisionmaking on business operations and oversees theexecution of duties by directors.

Nissan Chemical Corporation Integrated Report 2021

58

⑦ OHE Tadashi (Director)

Outside1969

Qualified for attorney-at-law

1989

Instructor for the Legal Training and Research Instituteof Japan (court representation in civil proceedings)

1994

Outside Corporate Auditor of Canon Inc.

2004

Outside Corporate Auditor of Marui Group Co., Ltd.

2006
2011

Outside Corporate Auditor of Kao Corporation
Outside Director of JECO Co., Ltd.

2015

Outside Director of the Company (to the present)⑧ OBAYASHI Hidehito (Director)

Outside1969

Joined Hitachi, Ltd.

2001

Director of Hitachi High-Technologies Corporation(current Hitachi High-Tech Corporation)

2003

Vice President and Executive Officer of Hitachi
High-Technologies Corporation
Representative Executive Officer, Senior Vice President andExecutive Officer of Hitachi High-Technologies Corporation
Director, Representative Executive Officer, President and Chief
Executive Officer of Hitachi High-Technologies Corporation

2006
2007
2011
2013
2015
2019

Chairman of the Board of Hitachi High- Technologies
Corporation
Consultant of Hitachi High-Technologies Corporation
Honorary Consultant of Hitachi High-Technologies
Corporation (to the present)
Outside Director of the Company (to the present)⑨ KATAOKA Kazunori (Director)
1979
1988
1994
1998
2004
2015
2016

2020

Assistant Professor of Institute of Biomedical
Engineering at Tokyo Women’s Medical University
Associate Professor of Institute of Biomedical
Engineering at Tokyo Women’s Medical University
Professor of Faculty of Industrial Science andTechnology at Tokyo University of Science
Professor of Graduate School of Engineering at The
University of Tokyo
Professor of Graduate School of Medicine at The
University of Tokyo
Director General of Innovation Center of NanoMedicine, Kawasaki
Institute of Industrial Promotion (to the present)
Project 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 the present)
Outside Director of the Company (to the present)
Outside Director of NanoCarrier Co., Ltd. (to the present)⑩ NAKAGAWA Miyuki (Director)
1990
2008
2011
2013

2015
2019

2021

OutsideNew

OutsideProsecutor, Tokyo District Public Prosecutors OfficeCounsellor, Judicial System Department, Minister’s
Secretariat, Ministry of JusticeCounsellor, Cabinet Secretariat, Assistant Chief Cabinet
Secretary Office
Prosecutor, Tokyo High Public Prosecutors Office
General Manager of General Administration
Department, Saitama District Public Prosecutors OfficeSpecially Appointed Professor and Public Prosecutor,
Chuo Law School, Chuo University
Retired as Prosecutor
Qualified for attorney-at-law
Professor, Chuo Law School, Chuo University (to thepresent)
Outside Director of NITTO KOGYO CORPORATION (tothe present)
Outside Director of the Company (to the present)
Outside Audit & Supervisory Board Member of FANCLCORPORATION (to the present)

Reason for appointment
We believe that Mr. OHE has reflected his extensive
experience, including his experience of outside director atseveral companies and expertise as attorney-at-law in our
corporate management with objective and neutral
standing-point, and will continue to fulfill the duties
appropriately. In addition, the Company intends for him tocontribute to the selection of candidates for the Company’s
directors and the determination of director compensation,etc., from an independent standpoint as a member of theNomination and Remuneration Advisory Committee.
Reason for appointment
After having served as director of Hitachi High-Tech
Corporation, Mr. OBAYASHI serves as Honorary Consultant
for the same company. As an executive of a corporategroup that develops a variety of businesses globally, we
believe that his extensive experience and broad insight canbe reflected in our corporate management from an external
perspective from an objective and neutral standing-point.
In addition, the Company intends for him to contribute to
the selection of candidates for the Company’s directors
and the determination of director compensation, etc., froman independent standpoint as a member of the Nomination
and Remuneration Advisory Committee.
Reason for appointment
Mr. KATAOKA has been engaged in research involving theapplication of nanotechnologies in the fields of biomedical
and biomaterial engineering for many years and is currently
serving as the Director General of Innovation Center of
NanoMedicine, Kawasaki Institute of Industrial Promotion.
We believe that his expertise as doctor of engineering,abundant experience, and wide-ranging knowledge can bereflected in our corporate management from an external
perspective from an objective and neutral standing-point.
In addition, the Company intends for him to contribute to
the selection of candidates for the Company’s directors
and the determination of director compensation, etc., froman independent standpoint as a member of the Nomination
and Remuneration Advisory Committee.
Reason for appointment
Ms. NAKAGAWA worked for many years as a prosecutor in
the Tokyo District Public Prosecutors Office and the Tokyo
High Public Prosecutors Office and she has abundant
practical experience in legal circles. We believe that her
legal expertise, abundant experience, and wide-ranging
knowledge can be reflected in our corporate managementfrom an objective and neutral standing-point. In addition,
the Company intends for her to contribute to the selectionof candidates for the Company’s directors and thedetermination of director compensation, etc., from an
independent standpoint as a member of the Nomination
and Remuneration Advisory Committee.

Nissan Chemical Corporation Integrated Report 2021

59

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

⑪ SUZUKI Norihiro (Audit & Supervisory Board Member) Outside

Reason for appointment

1983

Joined the Norinchukin Bank

2003
2008

General Manager of Naha Branch
General Manager of Cooperative Finance &Administration (Kanto Area) Div.

2010

Seconded to Eiraku Co., Ltd. as President (current
Norinchukin Facilities Co., Ltd.)Managing Director of The Norinchukin Bank

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

2012
2014

Director of Nochu Business Support Co., Ltd., andDirector of Nochu Information System Co., Ltd.

2016

Outside Audit & Supervisory Board Member of theCompany (to the present)⑫ TAKEMOTO Shuichi (Audit & Supervisory Board Member) Outside

Reason for appointment

1982
2002

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

2004

2008
2009
2010
2011
2013
2014
2017

Joined the Fuji Bank, Limited (current Mizuho Bank, Ltd.)
Deputy General Manager, IT & Systems Control
Department of Mizuho Bank, Ltd.
General Manager, Human Resources Division of Mizuho
Information & Research Institute, Inc. (current Mizuho
Research & Technologies, Ltd.)
General Manager, Fukuoka Branch of Mizuho Bank, Ltd.
General Manager, IT & Systems Planning Department ofMizuho Trust & Banking Co., Ltd.
Executive Officer, IT & Systems Planning Department ofMizuho Trust & Banking Co., Ltd.
Managing Executive Officer of Mizuho Trust & Banking Co., Ltd.
Managing Executive Officer of Mizuho Trust & Banking Co., Ltd.,and Managing Executive Officer of Mizuho Financial Group, Inc.
Deputy President of Mizuho Private WealthManagement Co., Ltd.
Advisor of Mizuho Trust & Banking Co., Ltd.
Outside Audit & Supervisory Board Member of theCompany (to the present)⑬ ONITSUKA Hiroshi (Audit & Supervisory Board Member)

Reason for appointment

1981
2001

Mr. ONITSUKA has been engaged in research centering on
agricultural chemicals for many years. From June 2011, heserved as Head of Biological Research Laboratories andHead of Chemical Research Laboratories from April 2016.
In those roles, he contributed to the continued growth of
the Nissan Chemical Group, particularly in Life Sciences.
Considering his wide-ranging experience and professionallevel insights, the Company judges that Mr. ONITSUKA is
qualified to be an Audit & Supervisory Board member thatoversees the proper execution of duties by directors.

2007
2011
2013
2014

2016
2019

Joined the Company
General Manager of Toxicology & Environmental
Science Department, Biological Research Laboratories
General Manager of Analysis Research Department,
Chemical Research Laboratories
Head of Biological Research Laboratories
Director, Head of Biological Research Laboratories
Director, Executive Officer, Head of Research Planning
Department
Executive Officer, Head of Research Planning Department
Executive Officer, Head of Chemical Research Laboratories
Audit & Supervisory Board Member (to the present)⑭ KATAYAMA Noriyuki (Audit & Supervisory Board Member) Outside

Reason for appointment

1990

Mr. KATAYAMA has an extensive experience including theexperience of outside director/auditor at several companies
and expertise as attorney-at-law. We believe that he hasreflected his knowledge in our corporate audit and willcontinue to fulfill the duties appropriately.

1996
2003
2004
2014
2017
2018
2019
2021

Qualified for attorney-at-law, Joined Nagashima & Ohno
(current Nagashima Ohno & Tsunematsu)
Qualified for attorney-at-law in New York State, USA
Joined Tokyo City Law & Tax Partners
Joined City-Yuwa Partners (to the present)
Statutory Auditor of Deutsche Asset Management(Japan) Limited (to the present)
Outside Audit & Supervisory Board Member of theCompany (to the present)
Supervisory Director of HEIWA REAL ESTATE REIT, Inc.
(to the present)
Outside Director of Nippon Denkai, Ltd. (to the present)
Outside Corporate Auditor of Livesense Inc. (to thepresent)
Outside Statutory Auditor of Aida Engineering, Ltd. (tothe present)

Nissan Chemical Corporation Integrated Report 2021

60

Corporate Governance System
General Meeting of Shareholders

Accounting Auditor

Report

Audit

Audit & Supervisory Board

Accounting
Audit

Nomination and Advice
Remuneration
Advisory Committee

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

Three out of the four members areoutside Audit & Supervisory Board members

ReportCooperate(Business execution framework)

Chairman (CEO)President (COO)

ReportReportManagement Meeting

CSR Committee

Risk Management &Compliance Committee

Each division/
department

Environment, Safety &Quality Assurance Committee

Group Companies

Internal Audit
Department

Audit

Audit

* Numbers pertain to officers appointed during the 151st General Meeting of Shareholders held on June 25, 2021.

Execution and Supervision of Operations

Board of Directors

By introducing a system with executive officers, weclarify the management’s function of prompt decisionmaking and supervision and the function of executing
operations, thereby strengthening both. We also strive
to improve management’s capabilities to develop andexecute our management strategies. In addition, we
have set a one-year term for each director andexecutive officer, thereby clarifying the management
responsibility and the responsibility for executing
operations.

Our Board of Directors members meet monthly inprinciple, to resolve important management matters. It alsosupervises the execution of operations by directors andexecutive officers. We ensure that important management
matters are determined through careful deliberations at theBoard of Directors meetings or management meetings in
our efforts to eliminate or reduce business risks. 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 meetings, etc.
are reported to the Board of Directors to enhance thesupervising function of the Board of Directors meeting. We
further strive to ensure and improve effectiveness inexecution of roles and responsibilities of the Board of
Directors by conducting the effectiveness evaluation on theoverall Board of Directors every year.

Nissan Chemical Corporation Integrated Report 2021

61

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Audit & Supervisory Board

Accounting Audit

We have established the Audit & Supervisory Board.
In accordance with auditing plans formulated by the
Audit & Supervisory Board with a majority that consistsof independent outside members, the Audit &Supervisory Board members audit the execution of
directors’ operation by participating in the Board of
Directors meetings and other important meetings, andby regularly visiting each division/department of the
Head Office and plant/laboratory to exchange opinions.

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 and independent internal audits of ourGroup. The results of internal audits are reported to theRepresentative Director, President & COO, managing
executive officers, and the Board of Directors. In
addition, the department shares information with theaccounting auditors and Audit & Supervisory Board, andcollaborates with them by mainly exchanging opinions.

Nomination and Remuneration Advisory
Committee
We established under the Board of Directors a
Nomination and Remuneration Advisory Committee
mostly consisting of independent outside directors forthe purpose of strengthening the Board of Directors’
independence, objectivity, and accountability in relation
to matters such as the nomination and remuneration of
directors and further strengthening corporate
governance. The Nomination and Remuneration
Advisory Committee convened four times in FY2020. It
deliberated matters, such as appointment ofcandidates 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 Boardof Directors, and reported the content of theirdeliberations to the Board of Directors.

Support for Outside Directors and Outside
Audit & Supervisory Board Members
The Corporate Planning Department supports outside
directors by providing them with explanations of thecontents of the agenda and other matters to be
discussed at the Board of Directors meetings in advanceand also provides management information necessary
for growth strategies, enhancement of governance, etc.
For outside Audit & Supervisory Board members, wehave appointed audit assistants from our employees to
respond to the requests from them. To enable Audit &Supervisory Board to fulfill their duties efficiently andsmoothly, the audit assistants serve as coordinators forholding hearings pertaining to divisions, etc., Audit &Supervisory Board meetings and other meetings, help
conduct audits, and collect information.

Governance Structure*
Indicator

Unit

FY2017FY2018FY2019FY2020Inside directors

People76

66Outside directors(Independent)

People

2 (2)

2 (2)

3 (3)

3 (3)

Total

People9899Ratio of independent outside directors (Actual)

%

22

25

33

33

Ratio of independent outside directors (Target)

%

–

33

33

33

Ratio of female directors

%

0

0

0

0

Number of executive directors

People7

6

6

6

Average terms of positions held

Years

5.1

6.5

6.7

5.2

Board of Directors meetings

Times

12

12

12

11

Attendance of directors at Board of Directors
meetings

%

99.1

100

99.0

96.0

Attendance of Audit & Supervisory Board
members at Board of Directors meetings

%

100

97.9

100

100

Directors

Scope of reporting* Data is as of after the General Meeting of Shareholders held in June of each year.

Nissan Chemical Corporation Integrated Report 2021

62

Policy and Procedures in the
Nomination of Officer Candidatesmonetary remuneration and performance-linked stockcompensation, of which monetary remuneration isdivided into base remuneration and performance
remuneration that is determined taking into account thefluctuation of employee bonuses, etc. Outside directors
are not eligible for performance-linked stockcompensation and their monetary remunerationconsists only of base remuneration for perspective of
their roles and independence.
Regarding performance-linked stock compensation,
we have adopted in FY2019, with the aim of increasingawareness about improving earning over the mid- tolong-term and contributing to enhancing corporate
value by clarifying the link between the Company’s
performance and its stock price, and by having
directors share with the shareholders not only thebenefits of increases in the stock price, but also the riskof decreases in the stock price.
Excluding performance-linked stock compensation,
the remunerations of individual directors are determinedat the Board of Directors meeting after deliberations of
the Nomination and Remuneration Advisory Committee
mostly consisting of independent outside directors aswell as within the total amount determined by resolutionof the General Meeting of Shareholders. The
remunerations of individual Audit & Supervisory Board
members are determined through discussions among
Audit & Supervisory Board members.

Proposal of nomination of director and Audit &Supervisory Board member candidates are explained inadvance to independent outside directors. After
receiving proper guidance from them, the proposal isfinalized by the Board of Directors through deliberation/
reporting by the Nomination and Remuneration
Advisory Committee and submit to the General Meetingof Shareholders. In addition, nominations of Audit &Supervisory Board member candidates are approvedby the Audit & Supervisory Board in advance.
Nominate Policy
PolicyDirectors

We operate business activities globally in diverse fields,
including chemicals, performance materials, agriculturalchemicals, and pharmaceuticals. In nominating
candidates for our directors, we consider the balance
between knowledge, experience, capabilities, and otherelements of the overall board of directors and its diversity
to ensure that our directors can make decisions regarding
the business activities in diverse fields, and supervise theexecution of operations in an appropriate and flexible
manner. The candidates to be nominated shall also be
physically and mentally healthy, have excellent
personalities and aspirations, and have a high level of
insight and ethics.
<Inside Directors>
Human resources who have expertise, knowledge andother capacities in each business field such as corporate
planning, personnel, finance & accounting, research anddevelopment, production technology, environment, safety &quality assurance and others.
<Outside Directors>
Human resources who are capable of giving opinions
proactively, raising questions and giving advice on growthstrategies, the enhancement of governance and other issues
from the viewpoints of various stakeholders and society.

Audit &
Supervisory
Board
Members

Human resources with experience and knowledge in awide range of fields including finance, accounting, andlaw who are capable of giving opinions and advice to the
management from a fair and neutral standing-point, in
addition to auditing the execution of operations.

Overview of Performance-linked Stock
Compensation Plan
The Company grants its directors points based on its
net income attributable to owners of the parent (year-onyear rate of change and average rate of change over thelast three years), EBITDA (year-on-year rate of change),
ROE (actual results for the current fiscal year), andcomparison of rates of year-on-year volatility withrespect to the Company’s stock price and TOPIX. Eachfiscal year, the Company determines whether the points
are to be granted or not and the number of points to be
granted. Upon their retirement, directors are to be paid
performance-linked stock compensation equivalent totheir accumulated points. (For details on how to
calculate performance-linked stock compensation planamounts, etc., please refer to P43 “Compensation, etc.
for Officers” of the 151st Securities Report.)

Performance Evaluation Coefficient

Officers’ Remuneration(Short-term net income attributable to owners of the parent coefficient ×10%)+ (Mid-to-long term net income attributable to owners of the parent coefficient ×20%)+ (EBITDA coefficient ×30%) + (ROE coefficient ×30%)+ (the Company stock price and TOPIX year-on-year volatility comparison coefficient ×10%)

The fundamental principle in directors’ remuneration
is to maintain its system that is in line with management
policy by ensuring that directors contribute toincreasing operating performance on a continual basis
over the mid- to long-term and toward increasing theoverall value of the Group, thereby meeting shareholder
expectations. At the same time, the basic policy(Policies on determining remuneration of Directors) is to
set remuneration at an appropriate level, taking into
account such factors as the management environment,
operating performance and consistency with thetreatment of employees.
The remuneration system for directors consists ofIf a director subject to performance-linked
remuneration is dismissed through the General Meetingof Shareholders or Board of Directors meeting during
the period until retirement (excluding dismissal when
the director concerned is appointed as an Audit &Supervisory Board member), commits any illegal act
during tenure and retires, commits any inappropriate
act that causes damage to the Company during tenure,or if the director is found to have violated laws,
regulations, articles of incorporation, or internal rules,
etc., the director will be unable to acquire the right to

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

receive performance-linked stock compensation.

Board of Directors with regard to diversity ofmembers of the Board of Directors (particularly
viewpoint of gender).
3) E nsuring the effectiveness of the decision-making
process by further devising ways to boost quality,
quantity, and clarity of information (matters to be
discussed at the Board of Directors) to be shared withthe directors (particularly outside directors) and Audit &Supervisory Board members.

Effectiveness Evaluation of Boards
Nissan Chemical believes that the primary roles andresponsibilities of the Company’s Board of Directors aredefined as: (1) establishing a strategy for achieving
sustainable growth and increase in corporate value overthe mid- to long-term, and facilitating the execution of theforegoing; (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 throughclarification of both functions; and (4) further enhancing
management transparency, soundness and objectivity
through, among other efforts, appointment of outside
officers who monitor and oversee the management fromexternal 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 theEffectiveness Evaluation in FY2015, and carries out athird-party evaluation every several years using an
external organization that holds no relationships ofinterest with the Company in order to ensure neutrality
and objectivity. The Effectiveness Evaluation in FY2019
was conducted in the form of a self-evaluation by theCompany’s Board of Directors, and the third-party
evaluation was carried out in FY2020.

Effectiveness Evaluation Result for FY2020
As a result of the Effectiveness Evaluation for
FY2020, it was concluded that the Company’s Boardof Directors was generally operating appropriately
overall from the perspective of carrying out 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 FY2019.

Points of Future Improvement
Through the discussion that was conducted thistime, we recognized the following issues to address forfurther enhancing the effectiveness of the Board of
Directors and determined to work on improvements.
1) T o promote deeper discussions at the Board of
Directors with regard to the Company’s directions,strategies, business portfolio, development of new
business fields, and risks. When discussing on themid- and long-term directions, the Board of Directors
provides its members with a forum for “free discussion”
to exchange their opinions from various viewpoints.
2) When discussing on mid- to long-term issues, theBoard of Directors facilitates a debate about theCompany’s sustainability, relating to its management
strategies and from the viewpoints of risks andopportunities.
3) To consider how to set appropriate agenda to enable
the Board of Directors to focus on the discussion onmaterial matters over the mid- to long-term. During
setting the agenda, the Corporate Planning
Department actively plays its role as the secretariat
for the Board of Directors.
4) To make further efforts to deepen outside directors’
understandings of the Company business andmanagement strategies and to use opportunities forbriefings and discussions other than the Board of
Directors.
5) T o 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.

Evaluation Procedure
The Board of Directors conducts the evaluation in theform of a self-evaluation. The evaluation procedure is in
the form of a questionnaire answered by all directors andAudit & 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 the self-evaluation.
During the third-party evaluation conducted in FY2020,
based on the results of the questionnaire responses, anopinion-exchange meeting was held in April 2021 (with all
independent Officers (3 outside 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
were discussed and confirmed at the Board of Directors
meeting held in May 2021.

By enabling deeper discussion in the Board of
Directors based on the recent evaluation result andcontinuing to implement measures to improve theeffectiveness of the Board of Directors, the Company
will ascertain the status of improvement on a regularbasis through the Effectiveness Evaluation and further
enhance the effectiveness of the Board of Directors inan effort to achieve sustainable growth and increase incorporate value.

Issues Identified in the Effectiveness Evaluation
for FY20191) Enriching information sharing with the Board of
Directors on deliberations at the Nomination andRemuneration Advisory Committee to enhance theBoard of Directors’ oversight function with regard to
the remuneration for and appointment of the senior
management and their succession plans.
2) Deepening discussions among all directors in the

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Messages from Outside Officers

Foundation of corporate governance

OHE Tadashi
Outside Director

We think of corporate governance as a mechanism that ensures sound, efficientmanagement to provide stakeholders with sustainable, mid- to long-term profits. As achemical company dealing with chemicals, performance materials, agriculturalchemicals, pharmaceuticals, etc., we are always at risk of accidents occurring at ourplants and laboratories. Once a major accident occurs, it could shake the very
foundations of our business. In order to prevent such accidents from occurring, there
are laws and regulations established in detail covering technical aspects. For theCompany, it is of course important to comply with the laws and regulations on a daily
basis. This is one of the important foundations for sound and efficient management,
especially in the case of chemical companies.
We are fortunate that we have been able to continue to grow through solid businessperformance. The management of our company is fully aware of the importance of legal
compliance, which underpins the Company’s growth and provides directions forrelevant departments. As a member of the outside directors, I will continue to pay
attention to this issue for the benefit of our stakeholders.

Speedy management with thorough adherence tomanufacturing ethics

OBAYASHI Hidehito
Outside Director

In FY2020, management and all our employees struggled to cope with the completely
new situation that arose daily during the spread of COVID-19 infections. Despite thesecircumstances, one of the reasons why we were able to finish the year with record
profits was the promotion of digital transformation (DX) of management. It is a great
achievement which shows the measures we have been working on since FY2019 werequickly accelerated and implemented during the spread of COVID-19 infections.
As a chemical company, we recognize that there is room for improvement in terms offulfilling our social responsibilities. There has been no end to the number of accidents
caused by faulty equipment and loose sense of manufacturing ethics among employees
at our plants. Although their brains are functioning well, it seems that their attention is
not paid to their peripheral nerves. In my experience, once a major accident occurs, itwill not only have a direct impact on the neighboring society and customers, but in theworst case, it will lead to a crisis of corporate survival. Based on a clear understandingof this, drastic and continuous reforms are needed to ensure thorough education andbasic operations. From the standpoint of speedy management, we need to further raise
the level of awareness from research to manufacturing, and sales. In addition tofinancial management, I would like to see us continue to move forward together with
our stakeholders in the midst of a turbulent society by accelerating and reducing basic
daily activity time. From time to time, I would like to contribute to such efforts.

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Technology and management capable of foreseeing the future

KATAOKA Kazunori
Outside Director

The header section of the Company’s website contains the words “Where it all
begins”. I am aware that, as an outside director, I am expected to provide opinions andadvice on technical issues and the way of mid- to long-term research and development
to create innovative “first-of-a-kind” products from the viewpoint of ESG and SDGs
while utilizing my own background and experience. After being appointed to myposition, I received detailed explanations regarding business units and took part in
relevant in-depth discussions at R&D meetings. From this, I have come to realize thestrength of the system that mutually and organically links the four business divisions(Chemicals, Performance Materials, Agricultural Chemicals, and Pharmaceuticals), as
well as the Planning and Development Division, which is developing new business areas
with an eye on the future of society.
Meanwhile, the globalization of products and technologies is rapidly progressing,along with the expansion of the horizontal division of labor. As a result, the flow of open
innovation from an international perspective will continue unabated. I feel that it will
become more and more important to build a flexible and diverse structure that canaccurately accept new trends while utilizing the strengths of our existing internal
structure. In addition to those efforts, I would like to continue to offer my opinions andadvice on how to achieve sustainable growth and enhance corporate value.

An outside officer’s eye for governance

KATAYAMA Noriyuki
Outside Audit & Supervisory
Board Member

It has been seven years since I first became an outside Audit & Supervisory Board
member, and during this time, there have been some changes in the rules of corporate
governance. The stock exchanges have required the establishment of outside directors
and independent directors, and we already have several outside directors. In addition,
the revised Companies Act, which came into effect this year, requires establishment ofoutside directors within a certain range. This is proof that the eyes of outside directors
are expected to be utilized in governance.
Whether or not the eyes of outside directors can be utilized depends largely on thecorporate culture and climate. In particular, I believe that the key is the openness ofcommunication between internal and external parties. Smooth “internal” communication
will ensure opportunities for “awareness” and will lead to a sufficient grasp of the risks
inherent in each department and the status of compliance, as well as appropriate
responses to these risks and compliance. On the other hand, “external”
communication, mainly through IR activities, will lead to investors and stakeholders fully
evaluating our governance system. I expect the Company to build a system thatconsiders the importance of communication.

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Compliance
SystemSince our Group regards compliance with laws
and social norms as a condition for the survival anddevelopment of the company, our Basic CSR Policy
stipulates that we need to conduct “sensible
business activities” and conduct ourselves as“good corporate citizens and decent members ofsociety”. In response, we have recognized thatcompliance means complying with laws and social
norms, formulated compliance rules, andestablished a compliance basic policy.

In our Group, the Risk Management & Compliance
Committee, which is held twice a year, has been
established as an organization to enhance theeffectiveness of risk management, and to maintain andpromote compliance. The committee is chaired by the
Chief Risk Management Officer (CRO), who isappointed at the Board of Directors meeting, and iscomposed of the Risk & Compliance Managers of eachdivision/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 meeting after discussion at the committee.
The Risk Management & Compliance Office under
the Corporate Planning Department has been
established as a specialized organization to promote
continuous improvement in all of our Group’s
compliance activities. In addition to providing educationand guidance on risk management and compliance,
the Risk Management & Compliance Office receives
reports on the status of compliance with laws andregulations and the status of education and training ineach department on a regular basis from Risk &Compliance Managers, and when necessary, supports
improvement, and shares information within our Group.
Furthermore, we have established the Consultation
Hotline to serve as an internal reporting system toprevent compliance violation or resolve the problem
early on.

Compliance Basic Policy
1. We consider compliance to be an
important management issue andensure thorough compliance in every
aspect of its business activities, thereby
establishing corporate ethics.
2. All officers and employees of Nissan
Chemical Group shall be sufficiently
aware of compliance and prevent theoccurrence of a compliance violation.
3. In the event that a compliance violation
has occurred or is likely to occur, wetake a prompt and appropriate
response.

Number of Compliance Violations
Scope ofreporting

Unit

2017

2018

2019

2020

Consultation Hotline Reports

Consolidated*

Cases

0

3

2

2

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 foranti-monopoly/anticompetitive practices

Consolidated*

1,000 yen

0

0

0

0

Confirmed corruption incident(under investigation)

Consolidated*

Cases

0 (0)

0 (0)

0 (0)

0 (0)

Fines charged and settlement fees for corruption

Consolidated*

1,000 yen

0

0

0

0

Other incidents related to compliance (excluding
environmental)

Consolidated*

Cases

0

0

0

0

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

Consolidated*

1,000 yen

0

0

0

0

Indicator* Includes domestic unconsolidated group companies

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

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 assystematically holding in-house seminars themed onfamiliar legal matters, lectured by internal instructors.
Various trainings are provided to officers andemployees of our company as well as those of affiliatedcompanies as efforts to improve the knowledge of theentire Group.

Consultation Hotline
We have Consultation Hotline to prevent complianceviolation or resolve the problem early on. When an
employee discovers a compliance violation or potential
compliance violation, he or she shall address the
problem in normal operation in principle, throughmeasures that include reporting the matter to theirsuperior. However, if he or she thinks it is difficult toaddress 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, andthe means for reporting may be selected from e-mail,mail, or telephone. Upon receipt of a report, thecontents 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 internalreporting system and supervises it. While accepting
anonymous consultations, we have established asystem that allows us to provide peace of mind byclearly defining in our rules the prohibition ofinterference with investigations, finding informants, andharassment.

The Compliance Manual sets forth rules so that
executives and employees, etc. (regular employees,
contract employees, part-time 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, suchas the enforcement and revision of laws andregulations. In addition, by including information about
the Consultation Hotline system and details about its
features in the Compliance Manual, we are raisingawareness about our internal reporting system.

Compliance Training

Anti-corruption Initiatives

Compliance Manual

We hold training sessions on corporate ethics forofficers and employees, including new employee,
working to ensure that each 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 businessNissan Chemical formulated anti-corruption policy in2019 and promote initiatives for all stakeholders
including our employees.
Anti-Corruption Policy
https://www.nissanchem.co.jp/eng/csr_info/communication/employee/acp.html

Measures for Promoting Compliance (FY2020)
General ComplianceDirector and management level compliance training, 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

Anti-bribery

Training for the prevention of corruption and Combating Bribery of Foreign Public Officials

Security Export Control

Foreign Exchange Law related training

Consultation Hotline

Continuous dissemination of related information via the in-house newsletter and posters

Other

Training for newly-appointed board members, training for board members, contract related
training, and promotion of concluding memorandum on elimination of antisocial forces

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Risk Management
In addition, the Risk Management & Compliance
Committee, which is held twice a year, has been
established as an organization to enhance theeffectiveness of risk management, and to maintain andpromote compliance.
The committee is chaired by the Chief Risk
Management Officer (CRO), who is appointed at theBoard of Directors meeting, and is composed of the
Risk & Compliance Managers of each division/
department, plant/laboratory, and domestic
consolidated subsidiary appointed by the CRO.
The Risk & Compliance Managers periodicallyconduct risk identification and assessment, formulate
countermeasure plans, conduct self-assessment for
status of implementation of the countermeasure planand 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
and countermeasure plans, etc. are approved at theBoard of Directors meeting after discussion at thecommittee.

We are promoting risk management inaccordance with the following action guidelines,
with the aim of recognizing the various risks
involved in the Nissan Chemical Group, preventing
the occurrence of loss risk and minimizing theimpact of their occurrence.

Risk Management Basic Policy
1. We place top priority on the safety of
the lives of officers and employees of
the Nissan Chemical Group.
2. We consider risk management as animportant management issue, andengage in the activities from acompany-wide perspective.
3. All officers and employees of the Groupshall be sufficiently aware of risk
management, strive to improve theirabilities, and endeavor to prevent theoccurrence of loss risk.
4. We promptly share the information onrisk throughout the Group.
5. We make efforts to respond promptly
and accurately to the occurrence ofloss risk and to minimize losses.

Process for Identifying Group Major Risks
We clarified risks taking into account the businesscharacteristics of each division and the surrounding
businesses, including global political, economic andsocial conditions. Subsequently, risk assessment was
conducted from the viewpoint of probability and impact
on the business. By following the assessment, a risk
map was created and Group Major Risks wereidentified. The contents of major risks were deliberated
by the Risk Management & Compliance committee andapproved at the Board of Directors meeting.

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.

Board of Directors Meeting
Risk Management & Compliance Committee

CRO

Risk & Compliance Manager(Each division/department, plant/laboratory,
and domestic consolidated subsidiary)

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69

CSR Committee
Environment, Safety &Quality Assurance CommitteeOur Future-Creating Story
Foundation for Future Creation
Corporate Data

Risk Assessment Implementation (risk identification and evaluation) Overview

Creation of risk list (tentative)
and risk-related questionnaire

Implementation of survey■ Create risk list (tentative) after identifying

Aggregation/Analysis of survey results■ Conduct risk-related survey targeting Risk &potential risks faced by the Nissan ChemicalGroup■ Create risk-related questionnaire based on the■ Aggregate the survey results and assess theGroup’s risks based on degree of impact andprobability of occurrence

Compliance Managers at each division/
department, plant/laboratory, domestic
consolidated subsidiary, and affiliate

list created

Identification of Group Major Risks

Creation of overall Group risk map■ Create an overall Group risk map based on the■ Select Group Major Risks based on the risk

Executive interview■ Have an interview with each executive about

results of executive interviews

map and current conditions of the Group

their views on the Group’s risks from amanagement perspective■ Deliberate regarding Group Major Risks at the

Risk Management & Compliance Committee
and approve them at the Board of Directors
meeting

SevereGroup Major Risks and Countermeasures Overview
Risk Category
Key Process Risk
Supportive Process Risk
External Environmental Risk

Impact on the business

Management Process Risk
Group Major Risk

Fire/Explosion

Earthquake/Tsunami

Quality Defect/
RecallFailure of
Supplier toComply with ESG

Delay or Discontinuanceof Product andTechnology Development

Advent ofInnovative
Technology

Difficulty in
Procurement ofSpecific Raw Material

Infringing or Being
Infringed of Intellectual
Property Rights

Failure to Complete
Procedures for Cancellation
or Registration of License

Revision orStrengthening of
Law or Regulation

Typhoon/
Torrential Rain

Failure of
the Business
Portfolio Strategy

Occupational
Accidents

Labor
Dispute/Strike

Inadequate
Response
to Customer

Cyber Attack

Rising Raw
Material Price

Damage or Failureof Facility andMachinery

Delay or Rejectionof Approval or
Register of Product

Violation of Human Rights(Sexual harassment andpower harassment)

Extreme Weather

Change in the
Surroundings ofBusiness Partners

Delay in Human
Resource
Development

Insufficient
Governance ofOverseas Subsidiary
and Office

Fluctuations
in Exchange

New Entrant/
Intensifying
Competition

Probability

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70

High

Group Major Risks and Countermeasures Overview
Group Major Risk

Summary of Risk

Countermeasures against Risk

Delay or Discontinuanceof Product andTechnology Development

Risk of the failure of payback of invested capital to
R&D due to being unable to launch the product underdevelopment

Manage go/stop about researchtargets based on periodic evaluation

Advent of Innovative
Technology

Risk of the losing competitive power due to advent ofinnovative technology with low cost

Set research targets based on thelatest technology information

Failure of the Business
Portfolio Strategy

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

Minimize risk by improving risk
assumptions when formulating
strategies

Difficulty in Procurementof Specific Raw Material

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

Confirm procurement situation,
discover issues and implement
countermeasure for stable procurement

Revision orStrengthening of Law or
Regulation

Risk of unwilling discontinuance of sales of product, or
unwilling change in business or capital investment plandue to revision/strengthening of law or regulation

Enumerate related laws and regulations
and establish an infrastructure forobtaining law revision information

Typhoon/Torrential Rain

Risk of increasing expenses to plant restoration anddecreasing production volume due to direct onslaught
on main plant by large-scale typhoon

Revise/improve the countermeasuresthat make early recovery and business
continuity possible

Earthquake/Tsunami

Risk of suspension of business activities and the deathor injury of many employees due to catastrophic
earthquake occurring at the location of business site

Fire/Explosion

Risk of suspension of business activities and the deathor injury of many employees, and being sued byneighborhood resident for the damage by fire/
explosion at plant

Revise “No Fires, Explosions, or
Chemical spills” measure

Quality Defect/Recall

Risk of reimbursement for large expenses by customer
and discontinuance of transactions when a productliability related accident occurs involving a productcontaining materials provided by our company

Continue to implement “no recalls andno falsification cases” measure

Infringing or Being
Infringed of Intellectual
Property Rights

Risk of being subjected to a large amount of damages
and product injunction claims from other company due
to infringement on other company’s patent

Create an IP verification process to
reduce the risk of infringing of othercompany’s patent

Cyber Attack

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

Examine and implement
countermeasures from the perspectivesof prevention, damage minimization,and education

Delay in Human
Resource Development

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

Establish an ideal model of manager aswell as a training system

Insufficient Governanceof Overseas Subsidiary
and Office

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

Formulate Group policy on company
regulations and share Groupphilosophy and policies

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

Group Major Risks and Countermeasures Overview

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Our Future-Creating Story
Foundation for Future Creation
Corporate Data

able to expand business opportunities in theEnvironment & Energy field, which is one of the main
business domains of the long-term business plan
Progress2030 launched in 2016. We believe more
benefit from increasing demand for initiatives toaddress climate change from investors and otherstakeholders because our low-carbon investment andproduct characteristics have made us more carbonefficient compared to whole chemical industry.
Meanwhile, we will respond to the risks of impacts
on plant operations and supply chains due to increasein abnormal weather, which was identified in the 4°C
scenario, by formulating and revising BCP (BusinessContinuity Plan) for our main products and by multiple
sourcing of several key raw materials, etc. In regards tomarket 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.

Adaptation to Climate Change Risk
As climate change becomes more serious, investors
and other stakeholders are becoming more interested in
the impact of climate change on business activities.
Following the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD) establishedby the Financial Stability Board, we conducted scenario
analysis based on 2°C and 4°C scenarios.

Scenario Analysis Results (climate changerisks/opportunities)
As a result of scenario analysis, we identified theintroduction of carbon pricing as a significant risk in the
2°C scenario. So we plan to introduce internal carbon
pricing to further promote investment that takes into
account the reduction of greenhouse gas emissions(low-carbon investment). In addition, in response tomarket change due to increasing demand forenvironmental consideration, we assume that we are

Scenario Analysis Results (climate change risks/opportunities)
Scenario

Factors

Social Change● Strengthening regulations on● Introduction of carbon

GHG emissions●C hanges in energy policy● Changes in energy demand

2°C
Scenarioand supply●M arket changes due toincreasing demand forenvironmental consideration● Increased demand frominvestors for addressing
climate change

pricing

Relevant
Division*

Impact on Business● Increase in operating costs due to introduction of

All

Risk

All

Risk

Planning

Opportunity

All

Risk
Opportunity●P rice change in fuel andfeedstock●C hange intransportation costs● Increased need for

low-carbon products● Expansion of ESG

investment

Degree of
Impactcarbon pricing, such as carbon taxes (If the same
conditions meet worldwide, maintaining
competitiveness is possible.)(Large)● Increase in costs due to higher fuel and feedstock

prices● Increase in transportation costs(Moderate)● Increase in demands for products related to electricenergy such as battery materials and photoelectric
conversion materials due to changes in energy policies (Moderate)● Deterioration of ESG evaluation and reputation due

to increasing criticism of bulk use of fossil fuels● Improvement of ESG evaluation and reputation throughadvanced initiatives and information disclosure(Moderate)● Increase in frequency

and enhanced intensityof heavy rain/flooding● Increase in abnormal weather● Enhancement ofintensity and frequencyof typhoons(Moderate)
All

Risk

● Increase in risk of impacts on plant operations andsupply chains due to escalation of natural disasters● Heavy snowfall● Decline in the available

water (freshwater)
resources

4°C
Scenario(Moderate)
Chemrising temperature andabnormal weather

Opportunity

Risk

area

● Increase in pests,

Opportunity

weeds, and pathogens

infection and diseases

global demand for drinking water(Moderate)and enhanced intensity of heavy rain/flooding● Reduction of planted area due to difficulties insecuring irrigation water

Agri● Increase in mass

● Increase in sales of disinfectants due to increase in● Reduction of planted area due to increase in frequency● Reduction of planted● Market changes caused by(Moderate)

Planning

Opportunity● Increase in opportunity to develop new agrochemicals● Influence on sales of existing agrochemicals due toresistance expression(Moderate)● Increase in demand for related products andservices due to growing medical needs for tropicalinfections and diseases* All: All divisions (Chemicals, Performance Materials, Agricultural Chemicals, Pharmaceuticals, and Planning and Development Division)
Planning: Planning and Development Division Chem: Chemicals Division Agri: Agricultural Chemicals Division

Nissan Chemical Corporation Integrated Report 2021

72

(Moderate)(Moderate)Respect for Human Rights
In April 2019, the Nissan Chemical Group
formulated the Nissan Chemical Group Human
Rights Policy with advice of outside experts andapproved at the Board of Directors meeting, 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 otherinternational norms on human rights. This policy
covers all individuals and groups that may beaffected through the business activities of ourgroup.

Nissan Chemical Group Human Rights
Policy (Excerpt)

Human Rights Due Diligence
Initiatives

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 andEquitable Remuneration, and Elimination ofDiscrimination
4 Remediation

Our group is working to establish a system of humanrights due diligence to identify and mitigate negative
impacts on human rights. In FY2020, with thecooperation of outside experts, we identified andassessed risks that could have a negative impact onhuman 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 inviews on the results and incorporating the opinions ofstakeholders. These opinions were reflected in the
results of the evaluation, and we identified the risks
which we need to prioritize for the Group.

In the event that the Nissan Chemical Group
causes or contributes to an adverse impact onhuman rights in the course of its businessactivities, it shall make efforts to remedy andcorrect such impact through appropriate
means.

Human Rights Due Diligence Process

Investigation of Human Rights Risk

Human Rights Risk Assessment■ Based on the UNEP FI (United Nations Environment Programme■ We assessed the “impacts on human rights” and “relations with the

Finance Initiative) Human Rights Guidance Tool and other guidances
on various human rights, as well as our existing internal informationsuch as risk assessment, we investigated human rights risks that
could arise in our business activities, and identified which stage ofour value chain could occur and what impact they could have onanyone.

Group” for each identified risk. “Impacts on human rights” wasassessed based on “impact (severity)” and “probability” based on the
UN Guiding Principles on Business and Human Rights (UNGP).
“Relations with the Group” was evaluated based on the concept of
the “Arc of Human Rights Priorities” of the Danish Institute for Human
Rights.

Identification of Risks to be PrioritizedDialogue with Stakeholders Including Experts■ Based on the risk assessment results, we had dialogues with■ According to the human rights risk map, we identified risks which we

stakeholders including experts.

need to prioritize. The result was discussed by the CSR Committee
and resolved at the Board of Directors meeting.

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

Nissan Chemical Corporation Integrated Report 2021

73

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Dialogues with Stakeholders
Stakeholders and experts

Comments (excerpt)

Ms. SATO Akiko
・ Attorney at Kotonoha Comprehensive Law Office・ Deputy Secretary-General of Human Rights
Now, a certified NPO・ Japanese Program Coordinator, Business &Human Rights Resource Centre, aninternational human rights NGO・ Coordinator at Rights Committee of theInternational Human Rights Committee andCivil Society Platform for Japan’s Nation
Action Plan on Business and Human Rightsof the Japan Federation of Bar Associations
・ Steering Committee Member, Business andHuman Rights Lawyers Network

・ In Japan, being required to work for long hours could be regarded as forced labor at the international level.
I believe that the importance of this as a human rights risk should be raised.
・ In the midst of the spread of COVID-19 infections, measures to prevent infectious diseases in the workplace are
becoming more important. The WHO and other organizations are also paying attention to health risks in new
situations, such as increased mental health issues associated with remote work and work styles different fromconventional ones.
・ I believe that it is important to include “the right of stakeholders to have access to remedy” in the human rights
risk agenda. It will also be important when considering responses to identified or potential human rights risks.

Mr. SEKI Masao
・ Senior Advisor, CSR Office, Sompo Japan
Insurance Inc.
・ Specially Appointed Professor, School ofBusiness Administration, Meiji University
・ Chairman, Keidanren Task Force on Charterof Corporate Behavior・ Chairman, Keidanren Task Force on
Business and Human Rights
・ Chairman, Planning Department, Council for
Better Corporate Citizenship・ With regard to human rights, it is actually necessary to prioritize and tackle each issue individually. At first,
however, I would like companies to always be aware of the importance of an overall understanding ofinternational codes of conduct, such as the International Bill of Human Rights, and an understanding of what is
expected of them.
・ With regard to human rights risks at the newly established manufacturing base in India, it is necessary to look athuman rights risks in each region within India. It is also advisable to collect information on human rights issues ineach country by utilizing various means, such as international lawyers, international NGOs, and human rights
organizations.
・ Human rights due diligence is necessary to prevent risks from occurring in the first place, but I would also like to
see more efforts made not only to prevent human rights violations but also to create a positive impact to realize
human rights, in line with the SDGs principle of leaving no one behind.

Nissan Chemical Labor Union

・ The health and safety of the Group’s employees are something that we have been working on for some time
which are of high importance. I would like to see further investment of management resources (people, money,
and things) in order to spread these initiatives throughout the Group.
・ In order to deal with long working hours that have become the norm in Japan, I would like the Company to set
specific goals (such as examining and visualizing work duties) and systematically work on them. I believe thatvarious studies will be necessary in the future in terms of the impact on health due to many years’ work andfrom the perspective of decent work, especially in three-shift workplaces.
・ I believe that the level of vitality in the workplace is linked to business performance. Continuing efforts to create acomfortable working environment and a rewarding organization are important for reducing human rights risks. Through suchactivities, each employee should deepen his or her understanding of harassment and compliance in general, which will leadto the strengthening of the prevention system of them. To achieve this, it is necessary to involve not only the Corporate
Planning Department and Personnel Department but also more departments to commit the entire group to addressing risks.
I look forward to the proactive efforts aimed at employee training and other activities in the future.

(Affiliations and positions of experts are current as of the time of the opinion exchange (in the order of the Japanese syllabary))

Risks to be Prioritized
Based on the risk assessment and exchange of opinions with experts and stakeholders, we have identified eight issues as the Group's risks to beprioritized. In the future, we will investigate the current status of the priority risks and take corrective measures if necessary.
In addition, we plan to continuously review our human rights risk assessment and priority risks.
Risks to be prioritizedGroup could be affectedMajor human rights risks

Access to Remedy

All Stakeholders

Lack of appropriate action when human rights violations occur

Employee Health and Safety

Employees of the Group

Danger, harsh working environment (related to overall occupational health and safety, including
mental illness), fire and explosion

Community Health and Safety

Local Communities

Damage to local communities and health due to fires, explosions, chemical leaks and pesticide spraying

Product Safety

Customers

Sales of unsafe products, including misuse

Responsible Marketing

Customers

Interference with consumer choice due to lack of adequate product information, inadequate
explanation of health risks, and inadequate response to unexpected product-related crises

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

Child Labor in the Supply Chain

Suppliers

Labor of children under legal working age/under 15 years old, placement in hazardous work,
harsh working environment

Conflict Minerals

Local Communities

Procurement and use of raw materials containing conflict minerals

Nissan Chemical Corporation Integrated Report 2021

74

Financial Review
Long Term Financial Performance Trend(From FY2010 to FY2020)

2010

2011

2012

2013

2014

Sales

154.2

148.6

153.8

163.7

171.2

Operating Profit

19.8

15.5

19.5

22.2

25.3

Ordinary Income

19.4

15.9

20.5

23.7

26.4

Net Income

13.0

11.0

13.9

16.7

18.2

EBITDA

30.2

25.9

29.0

30.8

33.8

OP Margin

12.9%

10.4%

12.7%

13.6%

14.8%

ROE

11.9%

9.5%

11.4%

12.7%

12.7%

EPS (¥/share)

75.94

64.52

83.74

102.11113.99

24

24

26

30

36

31.6%

37.2%

31.0%

29.4%

31.6%

2.8

-

5.0

5.0

6.0

Total Assets

183.4

190.1

199.2

208.0

223.9

Net Assets

112.4

119.6

126.7

137.8

151.3

Cash

21.1

27.9

31.9

30.8

31.3

Liabilities with
Interest

39.9

38.9

38.1

36.1

35.1

Equity Ratio

60.7%

62.4%

63.0%

65.7%

66.9%

Capex

9.6

8.3

8.1

8.8

9.8

Depreciation

10.4

10.5

9.5

8.5

8.5

R&D Expenses

12.6

13.6

13.7

14.2

15.0

R&D Expenses/Sales

8.2%

9.2%

8.9%

8.7%

8.7%

Dividend (¥/share)
Dividend Payout
Ratio
Share RepurchaseNissan Chemical Corporation Integrated Report 2021

75

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

(Billions of yen)
2015

2016

2017

2018

2019

2020

176.9

180.3

193.4

204.9

206.8

209.1

28.6

31.4

35.0

37.1

38.6

42.5

29.5

31.7

36.2

39.1

40.0

43.9

22.4

24.0

27.1

29.4

30.8

33.5

38.3

40.3

45.5

48.0

49.2

53.0

16.2%

17.4%

18.1%

18.1%

18.7%

20.3%

14.6%

15.1%

16.1%

16.6%

16.9%

17.5%

143.37156.97180.30197.67210.09231.73

44

52

68

82

90

104

30.7%

33.1%

37.7%

41.5%

42.8%

44.9%

9.0

9.0

9.0

9.0

10.0

10.0

228.2

231.7

246.0

247.0

249.5

265.5

156.9

163.7

176.4

182.1

185.5

200.6

35.3

35.7

37.7

36.2

30.6

32.4

33.1

30.8

28.6

26.6

24.6

22.7

68.1%

69.9%

71.0%

73.0%

73.7%

74.9%

10.2

14.3

13.7

9.9

15.7

15.8

9.7

8.9

10.5

10.9

10.5

10.4

15.8

16.1

17.2

17.8

17.2

16.5

8.9%

8.9%

8.9%

8.7%

8.3%

7.9%

Nissan Chemical Corporation Integrated Report 2021

76

Financial Review of the Year Ended March 31, 2021
Overview

Financial Position

In the current fiscal year (April 1, 2020 to March 31,2021), the domestic economy recorded significant
negative growth due to the spread of COVID-19
infections.Though exports have been partially picked
up towards the latter half of the year, the severe
situation continued such as prolonged stagnation of
consumer spending. Under these circumstances, salesof Basic Chemicals decreased in the Chemicals
Division. In the Performance Materials Division, Display
Materials and Semiconductor Materials performed well.
Sales of the Agricultural Chemicals Division were
unchanged from the previous fiscal year. In the
Pharmaceuticals Division, although sales of Finetech®
(custom manufacturing and process researching
services for pharmaceutical companies) increased,sales of drug discovery decreased.

Total assets as of March 31, 2021 were 265,509
million yen (an increase of 15,987 million yen from theprevious year). It is mainly due to the increase ofmerchandise and finished goods, intangible assets, andinvestment securities.
Total liabilities as of March 31, 2021 were 64,947
million yen (an increase of 953 million yen). It is mainly
due to the increase of deferred tax liabilities.
Net assets as of March 31, 2021 were 200,562
million yen (an increase of 15,033 million yen).
As a result of these factors, equity ratio was 74.9%(an increase of 1.2% from March 31, 2020).

Position of Cash Flow
Deducting income taxes paid from income before
income taxes and non-controlling interests,
depreciation and gain and loss in working capital, net
cash provided by operating activities for the
consolidated fiscal year ended March 31, 2021 was
39,939 million yen (35,550 million yen for the previousyear).
Due to investment on plant and equipment, net cashused in investing activities for the consolidated fiscal
year ended March 31, 2021 was 12,854 million yen(15,624 million yen for the previous year).
Due to share repurchase, payment for dividends andof long-term loans payable, net cash used in financing
activities for the consolidated fiscal year ended March
31, 2021 was 25,629 million yen (25,186 million yen forthe previous year).
As a result of these factors, cash and cash
equivalents for the consolidated fiscal year ended
March 31, 2021 were 32,380 million yen (30,639 million
yen for the previous year), reflecting exchange of 284
million yen. It increased by 1,741 million yen comparedto the previous year.

Operating Results
As a result, the Company’s results for the current
fiscal year were net sales 209,121 million yen (anincrease of 2,283 million yen), operating income 42,530
million yen (an increase of 3,883 million yen) andordinary income 43,893 million yen (an increase of
3,889 million yen), and net income attributable toowners of parent 33,470 million yen (an increase of
2,690 million yen). Operating and ordinary income
achieved record highs for the seven consecutive years
and net income attributable to owners of parent for theeight consecutive years, exceeding the earnings
outlook announced in November.
ROE was 17.5% and we have achieved the MidTerm Plan Stage II target (maintain above 16%) in thecurrent fiscal year.
Dividend was 104 yen and dividend payout ratio
became 44.9%. We have repurchased share of 10.0
billion yen and total payout ratio was 74.6%.

Business Results and Outlook(billion yen)
250.0

(billion yen)
60.0

200.0
163.7

171.2

100.0

22.2
50.0

0

16.7

180.3

36.2

150.0
23.7

176.9

204.9

193.7

26.4
25.3

29.5
28.6
22.4

31.7
31.4
24.0

35.0
27.1

206.8

39.1

40.0

37.1

38.6

29.4

30.8

209.1
43.9

50.0

42.5

40.0

33.5

30.0
20.0

18.2
10.0

2013
Net sales (left axis)

2014

2015

Operating income (right axis)

2016

2017

Ordinary income (right axis)

2018

2020

0

Net income attributable to owners of parent (right axis)

Nissan Chemical Corporation Integrated Report 2021

77

2019

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

Overview by segments
treatment herbicide) were firm, and shipments of
GRACIA® (insecticide) declined due to moderate insect
pests outbreaks. In the overseas agrochemicals
segment, sales of GRACIA®, ALTAIR® and PERMIT®
(herbicide) were robust.
As a result, sales of this division were 63,848 million
yen (a decrease of 189 million yen) and operating
income was 18,202 million yen (a decrease of 1,050
million yen). Compared to the outlook, net sales were
below 0.8 billion yen and operating income was below
0.5 billion yen.
As outlook of business result for the next term, we
assume net sales will be 66.2 billion yen and operating
income will be 17.6 billion yen.

The Chemicals Division
In Basic Chemicals, although sales of high purity
sulfuric acid (agent used for cleaning semiconductor)
increased, sales of melamine (adhesives agent forparticle board) declined due to market conditions. In
Fine Chemicals, sales of TEPIC® (powder coating agent
for paint, sealants, etc.) were basically unchanged fromthe previous fiscal year, while sales for environmental
chemicals (sterilizing and disinfecting agents for poolsand septic tanks, etc.) decreased.
As a result, sales of this division were 31,908 million
yen (a decrease of 2,427 million yen) and operating
income was 1,482 million yen (an increase of 186
million yen). Compared to the outlook, net sales wereabove 0.2 billion yen and operating income was above
0.3 billion yen.
As outlook of business result for the next term, we
assume net sales will be 34.6 billion yen and operating
income will be 2.4 billion yen.

The Pharmaceuticals Division

Sales of LIVALO® (anti-cholesterol drug) declined due
to increased sales of generic drugs. In Finetech®, salesof active pharmaceutical ingredients (generics) increased.
As a result, sales of this division were 6,652 million yen(a decrease of 310 million yen) and operating income
was 357 million yen (a decrease of 575 million yen).
Compared to the outlook, net sales were below 0.1
billion yen and operating income was below 0.2 billionyen.
As outlook of business result for the next term, we
assume net sales will be 6.1 billion yen and operating
income will be 0.3 billion yen.

The Performance Materials Division

In Display Materials, sales of SUNEVER® (LCDalignment coating) for tablets and notebook PCs
performed well. In Semiconductor Materials, sales of
ARC®* (anti-reflection coating materials forsemiconductors) and OptiStack®* (multilayer materials)
increased, reflecting the strong operation of customers.
In Inorganic materials, sales of Organosilicasol /Monomer sol (various kinds of coating materials, resin
additive) decreased, while sales of SNOWTEX® forpolishes for electronic materials were firm.
As a result, sales of this division were 71,648 million
yen (an increase of 6,187 million yen) and operating
income was 22,416 million yen (an increase of 5,429
million yen). Compared to the outlook, net sales wereabove 1.8 billion yen and operating income was above
1.8 billion yen.
As outlook of business result for the next term, we
assume net sales will be 75.8 billion yen and operating
income will be 23.8 billion yen.

Trading
Sales of this segment were 69,820 million yen (anincrease of 1,912 million yen) and operating income
was 2,498 million yen (an increase of 385 million yen).
Compared to the outlook, net sales were above 0.7
billion yen and operating income was above 0.4 billionyen.
As outlook of business result for the next term, we
assume net sales will be 70.1 billion yen and operating
income will be 2.2 billion yen.

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

OthersSales of this segment were 23,763 million yen (anincrease of 1,369 million yen) and operating income
was 831 million yen (an increase of 146 million yen).
As outlook of business result for the next term, we
assume net sales will be 23.4 billion yen and operating
income will be 0.7 billion yen.

The Agricultural Chemicals Division
Sales of Fluralaner (active ingredients for veterinary
pharmaceuticals) decreased due to the impact of
inventories of customers. In the domestic
agrochemicals segment, sales of ALTAIR® (paddy riceherbicide) and DITHANE® (fungicide) acquired in thethird quarter of FY2020 contributed to sales. On theother hand, sales of ROUNDUP® (non-selective leaf

Nissan Chemical Corporation Integrated Report 2021

78

Consolidated Balance Sheets

(For FY2020 and FY2019)(Thousands of
U.S. dollars)(Millions of yen)

Assets

FY2020FY2019FY2020Current assets
Cash and deposits¥32,380¥30,639$292,449

Notes and accounts receivable - trade73,93772,509667,784

Merchandise and finished goods

33,77433,131305,040

Work in process

23

153

208

Raw materials and supplies

12,853

10,590116,086

Accounts receivable - other

2,534

2,765

22,887

Short-term loans receivable

1,223

2,045

11,046

Other

2,892

2,387

26,120

(31)

(26)

(280)

159,588

154,196

1,441,366

68,438

67,110618,118

Accumulated depreciation and impairment loss

(43,601)(42,260)(393,795)

Buildings and structures, net

24,837

24,850224,323

Machinery, equipment and vehicles

140,790

135,476

1,271,586(128,053)(123,035)(1,156,548)

12,736

12,440115,029

39,77539,625359,240(36,742)(35,829)(331,846)

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

Accumulated depreciation and impairment loss
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation and impairment loss

3,033

3,796

27,393Land

Tools, furniture and fixtures, net

8,996

8,995

81,250Construction in progress

2,233

1,499

20,168

Total property, plant and equipment

51,83751,581

468,181

548

566

4,949

Other

11,581

6,812

104,597

Total intangible assets

12,1297,379

109,547

Investment securities

35,89430,873324,187

Deferred tax assets

205

721

1,852

Net defined benefit asset

2,478

1,609

22,381

Other

3,485

3,244

31,476

Allowance for doubtful accounts

(110)

(84)

(993)

Intangible assets
SoftwareInvestments and other assets

Total investments and other assets
Total non-current assets
Total assets

41,95336,364

378,911

105,921

95,325

956,656¥265,509¥249,522$2,398,022

Nissan Chemical Corporation Integrated Report 2021

79

Our Future-Creating Story
Foundation for Future Creation
Corporate Data

(Thousands of
U.S. dollars)(Millions of yen)

Liabilities

FY2020FY2019FY2020Notes and accounts payable - trade¥16,298¥16,876$147,200

Short-term loans payable

20,93722,898

189,099

552

640

4,986

Income taxes payable

7,113

6,167

64,243

Provision for bonuses

2,250

2,151

20,322Current liabilities

Current portion of long-term loans payable

Provision for directors' bonuses

7

26

63

Other

12,585

11,254

113,665

Total current liabilities

59,74460,015539,595

Long-term loans payable

1,184

1,076

10,694

Deferred tax liabilities

1,310

76

11,832

171

284

1,544

-

309

-

Provision for share-based remuneration for directors(and other officers)

91

46

822

Net defined benefit liability

249

208

2,249

Other

2,196

1,976

19,834

Total non-current liabilities

5,202

3,978

46,983¥64,947¥63,993$586,588

Capital stock¥18,942¥18,942$171,080

Capital surplus

13,613

13,613

122,950

Retained earnings

161,708

146,997

1,460,513

Non-current liabilities

Provision for business structure improvement
Provision for loss on business of subsidiaries and affiliates

Total liabilities

Net assets
Shareholders’ equity

Treasury shares(7,340)(2,470)(66,293)

Total shareholders’ equity

186,923

177,082

1,688,250

11,359

7,782

102,592

Foreign currency translation adjustment

81

(896)

732

Remeasurements of defined benefit plans

463

(51)

4,182

11,904

6,834

107,514

1,733

1,610

15,652

Total net assets

200,562

185,528

1,811,434

Total liabilities and net assets¥265,509¥249,522$2,398,022

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Total accumulated other comprehensive income
Non-controlling interests

Nissan Chemical Corporation Integrated Report 2021

80

Consolidated Statements of Income(For FY2020 and FY2019)(Thousands of
U.S. dollars)(Millions of yen)

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
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on disposal 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
Licensing arrangement fee
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

FY2020FY2019FY2020¥209,121
121,376
87,74545,21442,530¥206,837
122,379
84,45845,81038,647$1,888,737
1,096,243
792,495
408,363384,122

16
981
1,123
668
2,790

26
785
945
852
2,609

145
8,860
10,143
6,033
25,199

69
696
177
52
431
1,427
43,893

123
443
298
235
151
1,252
40,003

623
6,286
1,599
470
3,893
12,888396,432

1,588
1,588

1,834
1,834

14,342
14,34245,481
12,037(50)
11,98633,495
25¥33,470834
834
41,003
10,102
36
10,13830,864
84¥30,779

410,775
108,716(452)
108,255
302,520226$302,294

Consolidated Statements of Comprehensive Income(For FY2020 and FY2019)(Thousands of
U.S. dollars)(Millions of yen)

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

FY2020FY2019FY2020¥33,495¥30,864$302,520

3,575
1,075
514
1

(2,851)
(976)
(309)
(0)

32,289
9,709
4,642
9

5,167
38,663(4,137)
26,726

46,667349,196

38,540¥122

26,733(¥6)

348,085$1,102

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Corporate Data

Consolidated Statements of Changes in Net Assets

(For FY2020)(Millions of yen)

Total shareholders’ equity
Capitalstock

Capitalsurplus¥18,942

Balance at beginning of current period

Retainedearnings¥13,613

Treasuryshares¥146,997

Total shareholders’equity(¥2,470)¥177,082

Changes of items during period
Dividends of surplus(13,629)(13,629)

Net income attributable to owners ofparent33,47033,470Share repurchase(10,002)(10,002)

1

1

5,130

-

Disposal of treasury shares
Cancellation of treasury shares(5,130)Net changes of items other thanshareholders’ equity-

Total changes of items during period
Balance at end of current period--

14,710(4,870)9,840¥18,942¥13,613¥161,708(¥7,340)¥186,923

Accumulated other comprehensive income(Millions of yen)

Total accumulated
Valuationother
difference on Foreign currency Remeasurements
Nonof defined benefit comprehensive controllingtranslation
available-for-sale
Total
incomeplans
adjustment
securities
interests net assets¥7,782

Balance at beginning of current period(¥896)(¥51)¥6,834¥1,610¥185,528

Changes of items during period
Dividends of surplus(13,629)

Net income attributable to owners of parent

33,470Share repurchase(10,002)

Disposal of treasury shares

1

Cancellation of treasury shares-

Net changes of items other thanshareholders’ equity

3,577

978

514

5,070

123

5,193

Total changes of items during period

3,577

978

514

5,070

123

15,033¥11,359¥81¥463¥11,904¥1,733¥200,562

Balance at end of current period

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Consolidated Statements of Changes in Net Assets

(For FY2019)(Millions of yen)

Total shareholders’ equity
Capitalstock

Capitalsurplus¥18,942

Balance at beginning of current period

Retainedearnings

Treasury Total shareholders’sharesequity¥143,200(¥6,291)¥13,613¥169,464

Changes of items during period
Dividends of surplus(12,360)(12,360)

Net income attributable to owners of parent

30,77930,779

Share repurchase(10,801)(10,801)

(0)

0

0

(14,622)

14,622-

Disposal of treasury shares
Cancellation of treasury shares
Net changes of items other thanshareholders’ equity

-

-

3,797

3,821

7,618

¥18,942¥13,613¥146,997(¥2,470)¥177,082

Total changes of items during period
Balance at end of current period

Accumulated other comprehensive income(Millions of yen)

Total accumulated
Valuationother
difference on Foreign currency Remeasurements
Nonof defined benefit comprehensive controllingtranslation
available-for-saleincomeplans
adjustment
securities
interests¥10,634

Balance at beginning of current period

(¥11)

¥258

¥10,880¥1,728Total
net assets¥182,074

Changes of items during period
Dividends of surplus(12,360)

Net income attributable to owners of parent

30,779

Share repurchase(10,801)

Disposal of treasury shares

0Cancellation of treasury shares-

Net changes of items other thanshareholders’ equity(2,851)

(884)

(309)

(4,046)(117)(4,164)

Total changes of items during period(2,851)

(884)

(309)

(4,046)

(117)

3,454

Balance at end of current period¥7,782(¥896)(¥51)¥6,834¥1,610¥185,528

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Corporate Data

Consolidated Statements of Changes in Net Assets

(For FY2020)(Thousands of U.S. dollars)

Total shareholders’ equity

Balance at beginning of current period

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotal shareholders’equity$171,080$122,950$1,327,646($22,309)$1,599,368

Changes of items during period
Dividends of surplus(123,094)(123,094)

Net income attributable to owners of parent

302,294

302,294

Share repurchase(90,336)(90,336)9946,333-

Disposal of treasury shares
Cancellation of treasury shares(46,333)

Net changes of items other thanshareholders’ equity--

132,858(43,985)

88,873$171,080$122,950$1,460,513($66,293)$1,688,250

Total changes of items during period
Balance at end of current period

Accumulated other comprehensive income(Thousands of U.S. dollars)

Total accumulated
Valuationother
difference on Foreign currency Remeasurements
Nonavailable-for-sale translation of defined benefit comprehensive controllingincomeplans
adjustment
securities
interests$70,285

Balance at beginning of current period($8,092)($461)$61,723$14,541Total
net assets$1,675,650

Changes of items during period
Dividends of surplus(123,094)

Net income attributable to owners of parent

302,294

Share repurchase(90,336)

Disposal of treasury shares

9

Cancellation of treasury shares-

Net changes of items other thanshareholders’ equity

32,307

8,833

4,642

45,791

1,111

46,902

Total changes of items during period

32,307

8,833

4,642

45,791

1,111

135,775$102,592$732$4,182$107,514$15,652$1,811,434

Balance at end of current period

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Consolidated Statements of Changes in Net Assets

(For FY2019)(Thousands of U.S. dollars)

Total shareholders’ equity

Balance at beginning of current period

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotal shareholders’equity$174,051$125,085$1,315,814($57,806)$1,557,144

Changes of items during period
Dividends of surplus(113,572)(113,572)

Net income attributable to owners of parent

282,817282,817

Share repurchase(99,247)(99,247)

(0)

0

0

(134,356)

134,356–

Disposal of treasury shares
Cancellation of treasury shares
Net changes of items other thanshareholders’ equity–

Total changes of items during period
Balance at end of current period––

34,88935,11069,999$174,051$125,085$1,350,703($22,696)$1,627,143

Accumulated other comprehensive income(Thousands of U.S. dollars)

Total accumulated
Valuationother
difference on Foreign currency Remeasurements
Nonavailable-for-sale translation of defined benefit comprehensive controllingincomeplans
adjustment
securities
interests$97,712

Balance at beginning of current period($101)$2,371$99,972$15,878

Total
net assets$1,673,013

Changes of items during period
Dividends of surplus(113,572)

Net income attributable to owners of parent

282,817

Share repurchase(99,247)

Disposal of treasury shares

0Cancellation of treasury shares–

Net changes of items other thanshareholders’ equity(26,197)(8,123)(2,839)(37,177)(1,075)(38,262)

Total changes of items during period(26,197)(8,123)(2,839)(37,177)(1,075)31,738

Balance at end of current period$71,506($8,233)($469)$62,795$14,794$1,704,751

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Corporate Data

Consolidated Statements of Cash Flows(For FY2020 and FY2019)(Millions of yen)

FY2020Cash flows from operating activities
Income before income taxes and non-controlling interests
Depreciation and amortization
Amortization of goodwill
Interest and dividend income
Loss (gain) on sales of investment securities
Interest expenses
Loss (gain) on disposal of non-current assets
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries
Purchase of property, plant and equipment
Payments for retirement of property, plant and equipment
Purchase of intangible assets
Payments for transfer of businessNet decrease (increase) in short-term loans receivable
Purchase of long-term prepaid expenses
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Cash dividends paid
Dividends paid to non-controlling interests
Share repurchase
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period(Thousands of
U.S. dollars)

FY2019FY2020¥45,481
10,34678(997)(1,588)69696(1,016)(2,398)(842)(671)
49,1591,925(69)(11,076)
39,939¥41,003
10,51628(811)(1,834)123443(3,656)(2,352)(715)(263)
42,481
1,565(123)(8,373)35,550$410,775
93,443704(9,005)(14,342)623
6,286(9,176)(21,658)(7,605)(6,060)443,994
17,386(623)(100,036)
360,721

(159)
3,063
(1,209)(8,254)(598)(688)(5,384)
522
(222)
77
(12,854)

(657)
3,206
(330)
(8,904)(391)(285)(6,335)(1,538)(645)
256(15,624)(1,436)
27,664(10,919)(74,548)(5,401)(6,214)(48,627)
4,715(2,005)695(116,095)(2,017)660(640)(13,629)0(10,002)(25,629)284
1,741
30,639¥32,380(653)
600(1,860)(12,360)(111)(10,801)
0(25,186)(283)(5,544)36,183¥30,639(18,217)
5,961(5,780)(123,094)
0(90,336)0(231,476)
2,565
15,724
276,725$292,449(Note 1) T he consolidated financial statements are a translation of the Japanese annual securities report’s consolidated financial statements.
(Note 2) T he consolidated financial statements are expressed in Japanese yen as of and for the year ended March 31, 2021 after being
converted from the currency of the country in which the Company operates. The translation of Japanese yen amounts to UnitedStates dollar amounts is included solely for the convenience of the readers outside Japan, and has been made at the rate of¥110.72 to US $1, which is the approximate closing exchange rate reported by the Tokyo Foreign Exchange Market on March 31,
2021. This translation should not be construed to indicate that the Japanese yen amounts shown can be converted to UnitedStates dollars at the above rate.

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Corporate Information
Domestic Bases
Nagoya Plant

Toyama Plant

This plant faces the Port ofNagoya. Here we manufacture
sulfuric acid and high-quality urea
aqueous solution, among otherproducts.

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.

Onoda Plant
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.

Saitama Plant

Sodegaura Plant

This plant is located in thenorthwest area of Saitama.
Here we manufacture agricultural
formulations.

These plants are located in theindustrial area in Sodegaura andIchihara City, Chiba. These are ourbases for the production of
performance materials.

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Corporate Data

List of Offices, Plants and Laboratories
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 060-0002
Tel: +81-11-251-0264

Sendai Sales Office

Nagoya Sales Office

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

Osaka Sales Office

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

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
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 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

Biological Research Laboratories

11-1, Kitasode, Sodegaura, Chiba 299-0266
Tel: +81-438-64-2881

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

635, Sasakura, Fuchu-machi, Toyama 939-2792
Tel: +81-76-465-7133

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 businessNissan Green & Landscape Co., Ltd.

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

Nissan Engineering, Ltd.

PMO Ochanomizu 4-4-1, Kandasurugadai, Chiyoda-ku, Tokyo 101-0062
Tel: +81-3-3256-4031■ Landscaping and civil engineering

Nihon Hiryo Co., Ltd.

634-1, Sasakura, Fuchu-machi, Toyama 939-2753
Tel: +81-76-465-5711■ Plant engineering services

Sun Agro Co., Ltd.
1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: +81-3-3510-3601■ Production and sales of fertilizers and agrochemicals

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

Environmental Technical Laboratories, Ltd.

Clariant Catalysts (Japan) K.K.
2-28-8, Honkomagome, Bunkyo-ku, Tokyo 113-0021
Tel: +81-3-5977-7300■ Production 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■ Production of agrochemicals

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88Overseas Bases (As of March 31, 2021)

America
Nissan Chemical America Corporation
10333 Richmond Avenue, Suite 1100, Houston,
Texas 77042, U.S.A.
Tel: +1-713-532-4745■ Production 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

India

BrazilNissan Agro Tech India PVT. LTD.

Nissan Chemical Do Brasil

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

Avenida Gisele Constantino, 1850,
Salas 1518 a 1520, Parque Bela Vista,
Votorantim, SP, 18110-650, Brasil
Tel: +55-15-3019-8772■ 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 performancematerials

Korea
NCK Co., Ltd.
127, Chupalsandan-ro, Paengseong-eup,
Pyeongtaek-si,
Gyeonggi-do, 17998, Korea
Tel: +82-31-691-7044■ Production and sales of display and semiconductormaterials

Nissan Chemical Agro Korea Ltd.

TaiwanNissan Chemical Taiwan Co., Ltd.
5F., No.67, Luke 2nd Rd., Luzhu Dist., Kaohsiung City 82151,
Taiwan (R.O.C.)
Tel: +886-7-695-5252■ R&D and sales support for display and semiconductor materials

Room 2001, 74, Sejong-daero, Jung-gu,
Seoul 04526, Korea
Tel: +82-2-774-6470■ Sales of agrochemicals

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Corporate Data

Corporate Profile (As of March 31, 2021)

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: 2,688

Stock Listing

Tokyo Stock Exchange

Transfer Agent

Sumitomo Mitsui Trust Bank, Limited
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8233, Japan

Share Information

(As of March 31, 2021)

Total Number of Authorized Shares

360,000,000

Shares of Common Share Issued

145,000,000*

Shareholders

11,023* Includes 1,186,088 treasury shares

Number of shares held
(1,000 shares)
Investment (%)

Major shareholders (Top ten companies)
The Master Trust Bank of Japan, Ltd. (Trust Account)

28,72420.0

Custody Bank of Japan, Ltd. (Trust Account)

12,663

8.8

Custody Bank of Japan, Ltd. as trustee for the Mizuho Trust &Banking Co., Ltd. Retirement Benefit Trust

5,767

4.0

The Norinchukin Bank

4,800

3.3

Nissan Chemical Customer Shareholders Association

3,885

2.7

Custody Bank of Japan, Ltd. (Securities Investment Trust Account)

2,682

1.9

STATE STREET BANK WEST CLIENT-TREATY 505234

1,871

1.3

Meiji Yasuda Life Insurance Company

1,861

1.3

Nissan Chemical Corporation Employees Association

1,742

1.2

Ono Pharmaceutical Co., Ltd.

1,704

1.2

(Note) Investment percentages are calculated excluding treasury shares.

Percentage of share held (%)

Financial
institutions

Securities
companies

Other domestic
companies

Overseas
investors

Individuals /OthersTreasuryshares

51.9

2.9

9.6

24.2

10.6

0.8

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https://www.nissanchem.co.jp/eng/
Issued: November 2021