Research and Development
Research and Development -Our Five Core TechnologiesPerformance Materials(Inorganic Materials)

SUNEVER®
ARC®*1
Multi layer process materials(OptiStack®*2)
EUV

Silica sol
Colloidal products

Chemicals

Chemicals

Agrochemicals

Healthcare

TARGA®, PERMIT®, LEIMAY®,
ALTAIR®, Fluralaner, GRACIA®,ROUNDUP®, QUINTEC®, DITHANE®

LANDEL®*3, LIVALO®*4,
Contracting Businessof Technological
Development APIsand Intermediates(Fine Chemicals)

High-purity
chemicals forsemiconductors

Environmental
rerated products
TEPIC®

In-house developed
Pharmaceuticals /Contract Pharmaceuticals

Heterocyclic
Chemistry❶ Ultrafine ParticleControl

Existing
pharmaceuticals

Chemicals(Basic Chemicals)
Nitric acid, Urea,
Isocyanuric acid

Interface Chemistry❷ Functional Polymer Design❺ Optical Control

Managing Executive Officer
CTO
Head of Planning andDevelopment Division.

Heterocyclic Chemistry

Purification
Technology

ENDO Hideyuki
Polyimides

Sulfuric acidIn-house developed
Agrochemicals

Ammonia❷ Functional Polymer Design❸ Biological Evaluation❹ Fine Organic Synthesis＊3
L ANDEL® is a registeredtrademark of Zeria
Pharmaceutical Co., Ltd

Fertilizer
Petrochemicals
High-density Polyethylene (discontinued)

PVC (discontinued)

ness domains. It is important that we do not let these “enclaves”
that we have never addressed remain untouched, and that welink really promising themes and technologies to our core technologies and apply them to our customersʼ needs and key technologies.
Development investment and capital investment for equipment introduction required from our research laboratories areapproved at the management meeting and the Board of Directors after confirmation by the Planning and Development Division and the business divisions. If we are unable to overcome
technological issues and reach target criteria and standards, wewill decide to interrupt and withdraw through an evaluation
meetings on research theme. We then engage in thorough selection and concentration while continuously establishing newthemes.

I have been Head of the Planning and Development Division
since 2022 and was freshly appointed to the role of CTO. The appointment of a CTO is a first in our companyʼs history. My role isto elaborate a strategy from a technical perspective and to leadto achievement of the vision and targets set in the long-termbusiness plan “Atelier2050” which defines our targets for 2050,
and in the mid-term business plan “Vista2027” which was formulated as a stepping-stone to attain the long-term businessplan.
To that end, I have designed a roadmap to steadily build up
businesses toward 2027, and to achieve our targets and vision
for 2050.

Expanding business domains by linking promising
themes to our core technologies
The Planning and Development Division, which I oversee, is involved in the three growing businesses of Information & Communication, Life Science, and Environment & Energy, those wehave focused on to achieve the targets of Atelier2050. We are responsible for building high value-added new products and businesses that fit social needs by combining new materials andtechnologies with our core technologies.
Rather than allocating management resources to all business domains, we are focusing on short-term and mid-term priority themes to promote the early launch of businesses likely to
succeed in the future. Among them, we are sometimes taking on
the challenge of fields that we have never addressed before,
which is considered promising in the future.
It is not an easy task for even talented the researchers tocontinue research and development in a field unrelated to busi-Nissan Chemical Corporation

Brushing up technologies and products together withcustomers
The sources of our R&D capability is that we consistently maintain the highest level R&D expenses among chemical manufacturers to create the seeds of new technologies and nurture theminto businesses. We have transformed the business operations
from the time of our founding. We have continued to take on thechallenge of creating new technologies and businesses by nurturing the five core technologies of “Fine Organic Synthesis”,“Functional Polymer Design”, “Ultrafine Particle Control”, “Biological Evaluation”, and “Optical Control”, and fusing themacross fields.
In order to improve these technologies, we are accompanied
our researchers to visit our customers. After I joined Nissan

25

Integrated Report 2023

Agricultural Materials

Licensing-inAgrochemicals＊4
L IVALO® is a registeredtrademark of Kowa Company, Ltd.

external environment are leading to a worldwide reduction in
the use of agrochemicals. We have also started R&D in microbial
agrochemicals and established the Biological Group in the Biological Research Laboratories. Microbial control is a very important technology that can also use in the Healthcare business.
In addition, the progress of digital transformation (DX) is remarkable, and “Information Science” is indispensable as a fundamental technology. We will establish technologies that will
become the source of value creation for all business domains,
by driving new value creation through simulation and data science, and promoting company-wide DX as well as materials informatics (MI) in research departments.
At Nissan Chemical, we call the human resources “connoisseur” who able to deeply exploit R&D by checking for overlooked technologies in our business domains and applying themto technologies demanded by customers and the market. InR&D, all themes do not always become successes with a path toward commercialization. Therefore, it is necessary to develop
human resources who can judge whether a technology or atheme can grow into a business in the future. We provide the opportunities for young employees to discuss directly with customers, participate in academic conferences, and receive external
technical training in order to acquire the basic knowledge necessary for a researchers. Developing discerning human resources
is also one of the roles of CTO.
I am committed to playing my part in management, considering which technologies are necessary to achieve our targets
from a long-term perspective, and deciding on our direction that
we aim for and our policies on technology.

Chemical in 1990, I was assigned to the Polymer Materials Research Department, the Central Laboratory (currently the Chemical Research Laboratories and the Materials Research Laboratories). Since then, I have been involved in R&D for liquid crystalalignment materials, one of our mainstay businesses, and havebeen in charge of fundamental research and technical sales. By
having the technical discussions with the customerʼs engineers,we can grow as researchers, and improve our knowledge andinsight into problem solving. I accompanied customers as well,grasped their needs and accumulated experience in brushing up
the development of products and technologies that the market
required from us.
In hiring for researchers, we dedicate the most of interview
time to technology and research aspect. Our approach is sounique that we are told by applicants that the process was atechnological discussion rather than an interview. I believe that
one of the strengths of our R&D is that we are able to hire human resources who have expressed strong thought on researchduring their interviews.

Developing discerning human resources who candeeply exploit R&D
In Atelier2050, we are challenging to create completely newtechnologies and products related to three growing businesses,
Information & Communication, Life Science, and“Environment &Energy”, by adding “Microbial Control” and “Information Science” to our existing core technologies.
Until now, we have contributed to food production throughchemical fertilizers and agrochemicals. Our policy of contributing to the resolution of food issues through the Agricultural
Chemicals business remains unchanged, but the changes in theNissan Chemical Corporation＊1, 2
A RC® and OptiStack® areregistered trademarks ofBrewer Science, Inc.

26

Integrated Report 2023

Value Creation & Growth Strategies

We will lead to the achievement of
our targets by determining the direction oftechnology management and elaborating
strategies from a long-term perspective

Performance Materials(Displays and Semiconductors)= Five core technologies ❶ ～ ❺Research and Development

Intellectual Property
Our Group regards research and Development (R&D) and the intellectual property it results in as“the foundation of business” and “the source of growth.”R&D Expenses
Science that combined with Agricultural Chemicals and Healthcare account for about 40% each. In addition, about 40% of employees of regular position are allocated as researchers.

R&D expenses

Composition of regularposition personnel■Chemicals ■Performance Materials ■Agricultural Chemicals ■Healthcare* ■Others
20

17.8

16

17.2

2.0
2.5

12

16.5

2.0

2.4

2.5

4.5

2.4

4.6

0.4

0.4

4.2

4.3

4.8

7.0

7.6

0.6

4.4

8.2

7.7

7.0

Performance
Materials
190

R&D465

Others
760

84Planning and Development Divisionand others 160
Chemicals54.4

4.2

3.9

38% of regular-position
employees are researchers

17.4

16.8

16.0

Composition of researchers by segment

Healthcare
15

7.6

Agricultural Chemicals
95(As of September 2022, non-consolidated)

00.6(billion yen) 2018

0.4

2019

0.3

2020

0.3

2021

0.3

2022

0.2

2023 (FY)(As of September 2022, non-consolidated)(forecast)*The figures of FY2018-2020 are the former Pharmaceuticals Division.

Voices of Researchers

Possibility of MI
for efficient theme creation

Driving value creation by combining Biological Evaluation
and Information Science!

FURUHASHI TakamasaTERATANI Kohei

Biological Research Laboratories
Agricultural Chemicals Research & Development
Department

Materials Research Laboratories
Advanced Materials Research Department

Our department has record of utilizing bioinformatics such as
plant metabolomics in agricultural chemicals research. With therapid progress of information science technology in recent years,
new doors have been open in applying information science suchas image analysis and prediction models using AI to biologicalevaluation, which is our existing core technology. In imaging forinstance, the types and quality of images that can be used foranalysis are changing, with aerial photography of farmlands andtest fields by drone as one example. In addition, we accumulate
data by setting up sensors in test fields all over Japan and monitoring information on weather conditions in real time. We arenow engaging in efficacy evaluation based on image data ofcrops and weeds, and building ofAI models to predict crop growth,and are promoting activities to“build a digital technology foundation” as set in Vista2027. Our
goal is to contribute to productdevelopment by strengthening
the value creation and co-creation process, in the process ofmaking Information Science ournew core technology.

Our team makes full use of materials informatics (MI) to carryforward predictions on the level of roughness of inkjet printing
layers in soluble materials for OLED. With collaborations withoutside consultants and the Research Management Dept., Planning and Development Div., we aim to build more precise prediction models. If our efforts bear fruit, an experiment that takes
one month could be reproduced in a few days. Research optimization which applies computational science, including sophisticated predictions like these, is a priority for us. By introducing analysis that uses programming languages such as Python in daily
research, we are promoting the creation of an environment
where research result can be obtained efficiently.
My goal is making it possible to handle many themes with asmall number of people by maximizing the benefits of MI. As a research and development department with the mission of creating
new products, our directionthat we aim is clear. We
aim to create new themesthat becomes next business pillar by using MI toverify many themes more
efficiently and to derive innovative discoveries.

Nissan Chemical Corporation27

Integrated Report 2023Basic Policy and Features
Nissan Chemical carries out its intellectual property activities
based on the “Management Policy of Industrial Property” formulated in 1997, with the three following pillars: “prompt acquisitionof intellectual property rights,” “appropriate utilization of intellectual property,” and “intellectual property risk management.”
In addition, “utilization of intellectual property information” and“intellectual property contracts and external relations support”
have grown into important activities these recent years and theIntellectual Property Department is spearheading initiatives inthis realm as a “navigator of R&D benefits.”
The biggest feature of our intellectual property activities isthat “R&D departments, business divisions, and IntellectualProperty Department unite seamlessly”. This feature has beenachieved through our emphasis on R&D, with 70% of new employees and 40% of regular positions being researchers. Outsideof the Intellectual Property Department, business divisions andplanning departments at the Head Office also include many employees with experience in research, and a large number of personnel familiar with both R&D and intellectual property leads tolively discussions on patents and measures regarding othercompaniesʼ rights. Moreover, intellectual property liaisons areestablished in each division to engage in intellectual property
activities in collaboration with the Intellectual Property Department. In addition, “Intellectual property conference” held in thebusiness divisions and planning departments of the Head Office
and in all laboratories and plants are another our characteristicactivity. These conferences lead to the sharing of internal andoutside issues related to intellectual property and promote thecultivation and elevation of a company-wide intellectual property mindset.
In this way, we implement three-pronged intellectual property
activities through business divisions, research and development
departments and the Intellectual Property Department, and possesses a high level of intellectual property literacy as a whole.

KAGESHIMA Satoshi
Executive Officer
Head of Intellectual Property Department

Seamless Intellectual Property Activities
One concrete example is “patent conference” attended by core
members of R&D and business. At Nissan Chemical, these patent conferences are opportunities to comprehensively discusseach strategy of intellectual property, research and business,
which is reflected in each policy and generates speed and competitiveness.
With respect to photo-alignment materials used in IPS-type
LCD panels, we built patent networks ahead of other companies,
consequently reached a 99% market share and successively established a monopoly.
In addition, our intellectual property strategy in the agricultural and pharmaceutical field includes the intellectual property thatis “global” and “can win in the case of litigations.” We have experienced disputes in many countries and, if necessary, will directly
eliminate other companies by litigating.

Aggressive Acquisition of Property Rights
As shown in the number of patents held (P12), we aggressively
acquire patent rights. We have compared the number of patents
held by our company and by major domestic chemical manufacturers using commercial databases and, as evidenced in the tablebelow, we are ranked first in the ratio of global patents (the number of patents held abroad divided by the number of patents heldin Japan) and second in the net sales ratio. We rank fifth out of 30
companies in the R&D expenses ratio but, excluding the agricultural and pharmaceutical field where the number of patents heldcompared to R&D expenses is fewer and focusing on the materials field, we have approximately twice as many patents as the average of the major domestic chemical manufacturers with respect to the R&D expenses ratio as well.
In this manner, we guarantee the business superiority ofNissan Chemical though this extremely powerful patent networks.

Seamless intellectual property activities

BusinessDivisions

Prompt acquisition ofIP rights

Research &Development
Departments

Comparison of the number of patents
held using commercial databases ＊Appropriate utilization of IP

Nissan Chemical
Ratio of global patents

208 (1)

206

Number of patents held/
Net sales

253 (2)345

Number of patents held/
R&D expenses

129 (5)212

IP risk management
Utilization of IP information
IP contracts and external
relations support

IntellectualProperty
Department

Nissan Chemical Corporation(As of June 2023)

Nissan Chemical(materials field)*For all figures, the average of major domestic chemical manufacturers is set at 100. The
rank is given by the parenthesized figure.

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Integrated Report 2023

Value Creation & Growth Strategies

We consider R&D is the source of growth, and have intensively
invested our management resources in R&D.
Over the last five years, R&D expenses have totaled 84.3 billion yen. The R&D expenses in Performance Materials and Life