Integrated Report2019

To Our Stakeholder

Where it all begins.
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 theinternational community in compliance with laws andregulations.
(2) E nhance corporate value by providing safe and usefulproducts and services.
(3) S trive to achieve no-accidents & no-disasters and protect
the global environment.
(4) D isclose information appropriately with a focus oncommunication with stakeholders.
(5) C reate a cheerful and pleasant workplace by respecting
the individuality and personalities of employees.
(6) Conduct ourselves as good corporate citizens anddecent members of society.
1

Nissan Chemical Corporation Integrated Report 2019

Our Future-Creating Story

Various social issues, such as population explosions in developing
countries, declining birth rates and aging populations in developed
countries, progressing climate change and depletion of water
resources, food issues, and human rights issues, are increasing andthreaten the sustainability of society.
In 2015, Sustainable Development Goals (SDGs) which includes
increased demand for companies were adopted by United Nation to
respond to global issues.
Our company was founded in 1887 as Japan's first chemicalfertilizer manufacturer to solve food issues which Japan faced at thetime under the founding spirit “to dedicate ourselves to prosperity of
the nation by agricultural fertility.” The pioneering spirit has been still
very much alive at Nissan Chemical as we have continued putting
effort into innovative technologies and projects that promote social
progress, greatly transforming our business operations.
We currently provide products and services on a global scale
mainly in the fields of chemicals, performance materials, agriculturalchemicals, and pharmaceuticals.
We will continue to aim for synergistic development with society
by refining our core technologies that we have cultivated throughout
history and work to create products that meet the demands ofsociety.

Kojiro Kinoshita
President & CEO

Nissan Chemical Corporation Integrated Report 20192

Editorial Policy

In 1992, we introduced responsible care activities,

Contact for inquiries about this reportand have disclosed the details of these activities

CSR & Public Relations Office, Corporate Planning

via Environment and Safety Report from 1999.

Department, Nissan Chemical Corporation

The Report transformed into CSR Report in 2013

TEL: +81-3-4463-8123

and Annual report in which business overview andE-mail: csr_pr@nissanchem.co.jp

financial section were included since 2016. Since
2018, we have included the materiality, process of

Scope of reporting

value creation, and detailed financial information in

The initiatives are described mainly in the financial andaddition to the business overview, E (Environmental),

ESG information of the activities of Nissan Chemical

S (Society), and G (Governance) information to makeGroup.

this integrated report easier to understand creating
medium to long-term value of Nissan ChemicalGroup to all stakeholders, including shareholders andinvestors.
We aim to make this report as a valuablecommunication tool by deepening our 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)

activities and enhancing the content of the report.

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

Reporting period

Group companies:
In addition to the above consolidated subsidiaries andentities accounted for using equity method,
HOKKAIDO SUN AGRO CO., LTD., Environmental
Technical Laboratory, 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 AgroTech India PVT. LTD. (NAI), Nissan Chemical Materials
Research (Suzhou) Co., Ltd. (NSU)

FY2018 (April 2018 to March 2019)* The occupational accidents data is from January to December 2018
(P42).

IssuedDecember 2019
(The previous edition was issued in November 2018,
and the next edition is planned to be issued in
November 2020)
Frequency of issuance
Annually

Information disclosure system
Summarized
Information
Integrated Report(this report)

Guidelines used as referenceInternational Integrated Reporting Council (IIRC)“International <IR> Framework”
 RI Sustainability Reporting Guidelines Standard
G
ISO26000
Ministry of the Environment “Environmental Reporting
Guidelines”

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

3

Nissan Chemical Corporation Integrated Report 2019

For investors

Our Future-Creating Story

Contents

Our Future-Creating Story
Message from the President
The History of Nissan Chemical
Main Products
Process of Value Creation
Materiality
Financial and Non-Financial Highlights
Business Overview

5
13
15
17
19
23
25

Foundation for Future Creation
Research and Development

35

Provision of new value for helping to

37
Strengthening of Nissan Group's business base 39
Continuous improvement of responsible care activities 41
Corporate Governance
43
Compliance49
Risk Management
52
enrich people’s lives

Corporate Data
Financial Review
Corporate Information

55
71

Nissan Chemical Corporation Integrated Report 20194

Message from the President

KojiroKinoshita
President & CEO

Looking Back at FY2018
Despite difficult business conditions, we achieved the goals established for the first three years of the mid-termbusiness plan.
In FY2018, although Japan's domestic economy
continued to show a moderate recovery trend, including
some signs of improvement in personal consumption
against a background of improving income andemployment conditions, exports decreased due tofactors such as the strong appearance of economic
slowdowns in regions such as China and Europe during
the second half of the period.
Under these circumstances, the results for thecurrent fiscal year are as follows: Sales exceeded 200
billion yen for the first time reaching 204.9 billion yen,
Operating income: 37.1 billion yen, Ordinary income:39.1 billion yen, Net income: 29.4 billion yen. Sales

5

Nissan Chemical Corporation Integrated Report 2019reached record highs for four consecutive years with
operating income and ordinary income reachingrecord highs for five consecutive years and net income
reaching record highs for six consecutive years.
Except for sales, we achieved the numerical targets forthe first three years of the “Vista2021” mid-term businessplan one year ahead of schedule with an operating
margin of 18.1%. We have maintained an operating
margin of above 10% for 16 consecutive years.
The Company has always regarded return on
equity (ROE) as the most important performanceindicator. ROE reached 16.6% in FY2018. In addition,
shareholders experienced substantial profit returns due

Our Future-Creating Story

A start of new stage for realizing
our corporate vision in 2030.

to factors such as the Company achieving a total payout
ratio of 72.0% and dividend payout ratio of 41.5%.
Looking back each segment in FY2018:
As for the Chemicals Division pertaining to sales ofMelamine (adhesive agent for particle board) in Japan,
although the amount of sales in the form of shipmentsof construction materials for hotels and offices wasfavorable, conditions continue to be difficult with nobottom in sight due to sluggish exports, etc. caused by
US-China trade friction and other factors.
As for sales of display materials from the
Performance Materials Division, although the numberof smartphone shipments for the entire smartphonemarket fell below the previous year, we achieved
higher sales than in the previous year by acquiring newcustomers and proceeding with product development
closely associated with customer needs. In particular,sales of liquid crystal alignment material for IPS (In
Plane Switching) devices contributed significantly to
profits. In the semiconductor market, sales of oursemiconductor materials increased, such as sales of
BARC, (anti-reflective coating material) corresponding
growth of memory and logic devices market.
As for the Agricultural Chemicals Division,
sales of Fluralaner (active ingredient for veterinary
pharmaceuticals) and agrochemicals for the overseas
market increased. In addition, we launched GRACIA®,
our first standard insecticide, in South Korea in 2018 andin Japan in 2019. GRACIA® is effective against a wide
range of important pests as well as being very effective
against pest that have developed a resistance to existingpesticides, and this insecticide has the advantage of
having little impact on honeybees. I expect that it will
be a product that brings in 10 billion yen in sales andbecomes the Company's next growth engine.
In the Pharmaceuticals Division, although domestic
and overseas sales of LIVALO® (anti-cholesterol agent)
were impacted due to sales of generics, Finetech(contracting business of technological development ofpharmaceuticals) sales proceeded as planned.

Nissan Chemical Corporation Integrated Report 20196

Message from the President

About Our Long-term and Mid-term Business Plans
In order to achieve our long-term business plan “Progress2030”, we started Stage II of our mid-term businessplan “Vista2021” in 2019.
In 2016, we launched “Progress2030”, a long-termbusiness plan, and “Vista2021”, a six-year mid-termbusiness plan.
When formulating “Progress 2030”, we held many
discussions about what we can do, what we can contributeto, and what the type of corporate group we want to becomein 15 years, to decide the direction our Group should head inconsideration of social and economic changes leading up to2030. The plan aims to make Nissan Chemical “A corporategroup that creates better future for human and environmentby helping to solve social issue” taking into account social
issues such as the SDGs (Sustainable Development Goals)
established by the United Nations.
Based on that, we set the business model for theCompany as “A future-creating enterprise that responds
to social needs with unique, innovative technologies”, anddefined corporate vision for 2030 as “A corporate groupwhich provides new values for helping to enrich people’s lives
by integrating internal and external knowledge with facing
globally-changing society” as well as “A group of first-classpioneers who blaze a way to the future with enthusiasm bytrusts they have built and skills they have cultivated”.
For 2030, we set numerical targets of 300 billion yen in sales
and 50 billion yen in operating income. Based on our five coretechnologies we have cultivated, “Fine Organic Synthesis”,“Functional Polymer Design”, “Ultrafine Particle Control”,“Biological Evaluation”, and “Optical Control”, we will contributeto resolving global issues in the four fields of “Information &Communication”, “Life Sciences”, “Environment & Energy”,
and “Chemicals & Affiliates”, and will strive to improvecompany value along with the development of society.
“Vista2021” has been formulated as a six-year mid-termbusiness plan to serve as a waypoint to 2030 to indicate how
the Company should be in 2021 by using the back casting
method (establishment of current policies by calculating
backward based on the company's future status). Stage I,
the first three years are based on the following three basic
strategies.
With regard to the first basic strategy “Maximizing the profit
from existing products”, we have achieved results including(billion yen )60.0(billion yen )
350.0
50.0

50.0
43.0
40.0

30.0

35.0
171.2

176.9

180.3
193.4

37.1
204.9

300.0
250.0

38.7
235.0

200.0

210.5

31.4

150.0

28.6
20.0

25.3
100.0

10.0

0

50.0

2014

2015

2016

2017

Sales (right axis)

7

300.0

Nissan Chemical Corporation Integrated Report 201920182019 (Forecast) 2021 (Target)

Operating income (left axis)

2030 (Target)0

Our Future-Creating Story

an increase in demand for products such as Fluralaner, an
active ingredient for veterinary pharmaceuticals invented by
Nissan Chemical, Roundup® (nonselective herbicide), and soon. We also acquired new customers in China and Taiwan for
our liquid crystal alignment material for IPS devices.
As for the second basic strategy “Improving marketing
power”, we steadily proceeded with the collection andevaluation of cutting-edge technology information, sales,
popularization, development support for agrochemicals,enhancement of research and development functions,and customer service improvement at newly establishedoverseas bases in the United States, Brazil, India, and China.
In regards to the third basic strategy “Enhancing R&D
capability”, we developed 3D packaging process materials,
EUV under layer materials, etc. as performance materials,
and created agrochemical development candidate agents.
In the field of pharmaceuticals, we worked to establish ourown technologies for drug discovery and contract based
manufacture of active ingredients of pharmaceuticals suchas constrained peptides and nucleic acids.

When formulating Stage II of the “Vista2021” mid-termbusiness plan, we used the following three phrases to
describe corporate expectations for 2021: “Performance
Materials and Agricultural Chemicals are driving businessresults while the next growth engines are being created”,“Organizations that enjoy challenges have been realized
and diverse human resources demonstrate their abilities
to achieve goals”, and “We contribute to the sustainable
development of society through our business activities”.
To realize these, we established the following three strategies
as basic strategies: “Increase profitability of products that are
the sources of growth”, “Strengthen the ability to create new
products”, and “Improve ability to adapt to social/market
changes”.
The numerical targets set for FY2021, the final year of StageII, are sales of 235.0 billion yen, operating income of 43.0 billion
yen, ordinary income of 44.0 billion yen, net income of 33.0
billion yen, and an operating margin of 18.3%. Through the
mid-term business plan, we will strengthen our efforts using thefull power of the Group to realize our corporate vision in 2030.

Corporate Vision in 2030
“A corporate group which provides
new values for helping to enrichpeople’s lives by integrating internaland external knowledge with facing
globally-changing society”

Information &Communication
100 billion yen

Life Sciences
100 billion yen

Environment &Energy50 billion yen“A group of first-class pioneers
who blaze a way to the future withenthusiasm by trusts they have built

Chemicals & Affiliates 50 billion yen

and skills they have cultivated”

Core Technologies
Fine Organic
Synthesis
Functional
BiologicalUltrafine
Polymer
Evaluation
Particle
DesignControl

OpticalControl

Nissan Chemical Corporation Integrated Report 20198

Message from the President

Ideal Situation of 2021

Sales, Operating Income, Ordinary Income, Net Income Target (billion yen)

“Performance Materials” and “Agricultural
Chemicals” are driving business results while the next
growth engines are being created
Organizations that enjoy challenges have beenrealized and diverse human resources demonstrate
their abilities to achieve goals
We contribute to the sustainable development ofsociety through our business activities

Financial Indicators

9

FY2019Forecast

FY2021
Targets

Sales

204.9

210.5

235.0

Operatingincome

37.1

38.7

43.0

Ordinary
income

39.1

40.2

44.0

Net income

29.4

30.2

33.0

R&D Expenses, Capex

FY2018Results

FY2019Forecast

FY2021
Targets

Operating margin

18.1%

18.4%

Above 18%

ROE

16.6%

16.3%

Above 16%

Dividend payout
ratio

41.5%

42.5%

Maintain 45%

Total payout ratio

72.0%

72.5%

Maintain 75%

Nissan Chemical Corporation Integrated Report 2019

FY2018Results(billion yen)
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0

51.1

58.0
37.9

R&D Expenses
2016-2018

44.7

Capex
2019-2021

Our Future-Creating Story

Toward Realizing Our Corporate Vision in 2030
Although there are challenges present, we will steadily evolve and deepen our efforts.
While implementing Stage I, we identified threechallenges we face in realizing our corporate vision in 2030.
The basic strategies of the final three years as StageII are based on our awareness of issues such as
inclination toward certain products that drive profits,delays in the creation of new products, and insufficient
response to risks that will hamper growth.
In the first basic strategy “Increase profitability of productsthat are the sources of growth”, we identify opportunities
and risks for each business and establish accurate andtimely countermeasures to deal with rapid changes inthe environment, and intensively allocate management
resources to products that are expected to grow.
In the Chemicals Division, we will promote sales ofcyanuric acid, HI-LITE® (bactericidal disinfectant), andTEPIC® (epoxy compound for LED sealants, solder resist,
painting) based on a strong global market for cyanuric
acid, increasing societal demand for water sanitation,and growing demand for products for information &communication field. Besides, we will strive to enhanceplants maintenance technology and ensure safe andstable operations by preparing risks such as issues atplants.
In the Performance Materials Division, we will develop
and launch new products, improve existing products
and expand their application, toward the things such asincreased demand for products due to the development

Challenges that could be discovered during Stage Iof the information & communication field, changes in
the needs for oil and gas materials due to fluctuations
in crude oil prices, and emergence of innovativecompetitive technologies from other companies thoseare assumed as either opportunities or risks.
As for the Agricultural Chemicals Division, theoverseas agrochemicals market is expected to expand
continuously due to global population growth. On theother hands, there is a shortage of farmers related
to the population decline in Japan. The demands for
agrochemicals which make it possible to improve yield
is expected to increase. Based on such circumstances,
we will speed up initiatives aimed at large-scale
farmers, corporations and general consumers as we
aim to popularize and promote domestic and overseas
sales of products including GRACIA®.
In the Pharmaceuticals Division, business competition in
the field is expected to intensify as a result of activizationin the development of drug discovery research of medium
molecule drugs and increase of generic drugs. We planto accelerate the creation and advancement of candidate
drugs, expand our contracted manufacturing business,and improve profitability. In addition to promoting sales of
eldecalcitol, an active drug substance used in medications
for osteoporosis, the division is focusing its efforts on
obtaining contracted manufacturing business orders for the
manufacture of generic drugs and constrained peptides.

Stage II basic strategies

Inclination toward certain productsthat drive profits

Increase profitability of productsthat are the sources of growth

Delays in the creation of new products

Strengthen the ability to create new productsInsufficient response to risks
that will hamper growth

Improve ability to adapt to social/market changes

Nissan Chemical Corporation Integrated Report 201910

Message from the President

By strengthening our research capabilities, we are striving to develop new products and technologies, and tocreate new businesses.
In order to “Strengthen the ability to create new
products”, the second basic strategy, we aim toadvance development, analysis, and evaluation
capability by expanding our overseas research
infrastructure related to overseas agrochemicals,
display materials, and semiconductor materials, all ofwhich are expected to see future growth.
We opened the Santa Clara Office of NCA (ourlocal subsidiary in the United States) in Silicon Valley(California) in 2016 to pursue the search and evaluationof technologies, including AI, IoT, and etc., owned

by startups, and the possibility to collaborate withsuch companies. Furthermore, we established a new
R&D center in Suzhou, China in 2018 in addition tolaunching R&D centers in Korea and Taiwan in previous
years, to improve contact with customers and quickly
grasp market needs.
Furthermore, we focus on establishing newtechnology and creating actual demand for material togenerate new businesses, by participating in national
projects and so on.

We identified materiality that we need to address as a company.
Through the third basic strategy, “Improve ability
to adapt to social/market changes”, we identified
materiality that are indispensable for realizing ourcorporate vision in 2030 while responding to various
assumed social changes and issues that we haverecognized. In the process to identify materiality, we
exchanged opinions with stakeholders based on ESG

11

Nissan Chemical Corporation Integrated Report 2019(environment, social, and governance) evaluation
indicators, including SDGs, and various guidelines.
We identified 19 key issues that are divided into
three parts: “provision of new value for helping toenrich people’s lives”, “strengthening of Nissan Group’sbusiness base”, and “continuous improvement ofresponsible care activities” with underlying the crucial
issues for corporate survival that are “strengtheningof corporate governance, risk management andcompliance”, and established targets for each issue.
In regard to the first part, “provision of new value
for helping to enrich people’s lives”, we aim to provide
new value while utilizing our unique technologies byidentifying social issues such as global environmental
conservation, food issues, energy issues as well aschanges in society, including longevity and aging, anddevelopment of advanced medical care.
The targets are sales promotion of disinfectants fordrinking water, launching of new medical materials,
new environmentally friendly products, and opticalinterconnect material.
Steadily implementing the various measures of thelong and mid-term business plan will lead to the provisionof new “value” that will help enrich people's lives.
The “value” that we provide must be in the form of
products and services that can give unprecedented
level of “joy” and “inspiration” to the end user.

Our Future-Creating Story

Through our daily business activities, we will create new
products and, by doing so, provide new “value.” There will
always be newness present in this “value” which makes
it necessary to have a group and corporate culture thatalways thinks about what kind of “joy” can be created bythis newness or whether it can provide “inspiration.”
The second part, “strengthening of Nissan Group’sbusiness base”, includes strengthening our researchand development capabilities, products’ quality
improvement, maintaining and improving employee
health, promoting diversity, executing fair-trading, andBCP (Business Continuity Plan) formulation.
For the third part, “continuous improvement of responsible
care activities”, we have set targets related to climate change
mitigation, occupational safety and health promotion,
biodiversity initiatives, chemical substances management,
and industrial waste/pollutant emission reduction.

In regard to climate change countermeasures, wehave been working on improving energy intensity andreducing greenhouse gas emissions by implementing
constuction required to convert fuel from naphtha to
LNG (liquefied natural gas) in ammonia production at
the Toyama Plant. Since Vista2021 original targets thatwas set in 2016 were reached during Stage I, Stage IItargets have been set even higher.
Recognizing that occupational safety and health isthe lifeline of our corporate activities, not only plants
but the Group as a whole will continue to increase thenumber of daily safety actions aimed at achieving zeroaccidents requiring staff time off from work.
We will contribute to the sustainable development ofsociety by achieving the targets corresponding to eachkey issue for FY2021.

Closing
The Nissan Chemical Group has earned a highreputation from the market for its stable businessperformance with ROE over 16%, active shareholder
returns maintaining total payout ratio over 70%, businessplan achievement rate, etc. In order to become a morereliable company without compromising to current situation,
we will focus our management resources on the full-scale
entry into fields such as the automotive and regenerative
medicine fields where demand is expected to grow. We willgrow under any business conditions and continue to strive
to create value for leaping forward into the future.
With this idea, the slogan for Stage II is “Strive for
perpetual growth and become a company that carves
out the future.”
In order to rise from “sustained” growth to“perpetual” growth, we will share with the entire Groupthe idea that the development of new businesses witha futuristic perspective while continuing to introduce
new products and new product grades to the market
is the most important issue. We will strive to meet the
expectations of our stakeholders by working together
throughout the Group to realize our Corporate Visionof becoming “A corporate group that contributes tohuman survival and development.”
I hope we can rely on your understanding andsupport in the future.

Nissan Chemical Corporation Integrated Report 201912

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.
Dr. Jokichi Takamine is referred to as the “Father of Biotechnology.” Tokyo Jinzo
Hiryo, Nissan Chemical's predecessor organization, was started in 1885 when
the young Jokichi Takamine brought phosphoric ore from the US back to Japan.
Takamine, who strongly felt the need for improve the fertilizer used inJapanese agriculture to help make Japan a modern nation, approachedEiichi Shibusawa, known as the “Father of Japanese Capitalism,” thefollowing year with the idea of the commercialization of fertilizer. Eiichi
Shibusawa, who was from a wealthy farming family, deeply agreed withTakamine's proposal, and as a result established Japan's first chemicalfertilizer 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 theenthusiasm and effort of the pioneers who led the Company in its early days.

(million yen)
200,000

Merging of three companies for businessdiversification
In the first half of the twentieth century, amid a variety of M&A activities
by domestic corporates, we came to turning points with the threecompanies joint in 1923 and with the participation to Nissan zaibatsu
in 1937.
The three companies 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 enteredunder 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 (now NOF) in 1949 and Nissan
Chemical Industries newly started.

150,000

Eiichi Shibusawa (second from left) visiting Oji Plant just after the completion of the threecompany merger.
Seen on the left is Eihachiro Tanaka who served as company president from 1923 to 1941.

100,0001891 Jinzo Hiryo advertisement from an agricultural magazine

50,000Calligraphy by Takashi Masuda (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

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

Operating margin (right axis)

1896

1906

1916

1926

1936

1946
Worsening pollution issues

Post-war recovery
Food shortages in Japan

13

Nissan Chemical Corporation Integrated Report 2019

Our Future-Creating Story 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 2018.
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 businessIn the 1950s, as domestic imports ofpetrochemical products expanded and themomentum for domestic production increased,
we established Nissan Petrochemicals in 1965
and entered the petrochemical business, startingwith the production of higher alcohol.
However, the petrochemical industry experienced
a structural slump due to the impact of the twooil crises of the 1970s. The Company worked torebuild its business, but it was unable to improve
its profitability and began rationalization. The
company exited the petrochemical business in
1988.
Although entry into the petrochemical businessresulted in a large deficit, the developmentof this business brought the penetration oftechnological ideas to the Company, which led
to the development of new technologies andbusinesses such as fine chemicals.

Becoming a future-creating enterprise that
responds to social needs
In 1989, we launched our Five-Year mid-term businessplan oriented with two pillars: high-tech fields such as
agrochemicals and pharmaceuticals, 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 of（%）
agrochemicals on the market, and in the late 1990s, while our40
liquid crystal alignment material grew significantly, we entered thesemiconductor field. In the 2000s, sales of Pitavastatin calcium,the active ingredient of LIVALO ®, an anti-cholesterol agent,increased significantly and we acquired exclusive marketing rights
in Japan to ROUNDUP ®, the world’s largest herbicide. Since
then, new agrochemicals have been introduced, and in 2013, webegan 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 the30
framework of industry in the development of its business
and will accelerate this effort toward the future. In orderto clarify this stance, we changed our name to Nissan
Chemical Corporation.

20

Fluralaner
Nissan Petrochemicals Chiba Plant (1968)

10

Toyama Plant

0
1956

1966

1976

1986

1996

2006

2016

Worsening of global environmental issues
Diversification of values and lifestyles
Development and spread of information technology
Population aging
High economic growth
Stable growth
Worsening of food issues mainly in developing nations

Nissan Chemical Corporation Integrated Report 201914

Main Products

Before 2000

2000 -

Chemicals

1964 Melamine
This is widely used as anadhesive agent for plywood,laminated sheets, molded
products, resin finish forfabric and paper, and paint.
It is highly aesthetic andoffers a substantial level ofquality. 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, andthus contributing to publichygiene.

Performance
Materials

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

1989 SUNEVER®
SUNEVER® is a polyimidebased liquid crystal alignment
material. It is used to coatthe surface of the outer
glass panels, to align liquid
crystal molecules in a certain
direction.

1989 SIRIUS®
To meet the needs offarmers, we develop and sella large number of one-shot
herbicides for paddy rice.
The main component ofthese herbicides is SIRIUS®,
our proprietary active
ingredient.

1991 SANMITE®
This insecticide / acaricide iseffective against spider mites
and rust mites in fruit trees,
as well as spider mites andwhiteflies in vegetables. We
also market this product inabout 30 overseas countries.

Agricultural
Chemicals

Pharmaceuticals

15

Nissan Chemical Corporation Integrated Report 20191994 LANDEL®
LANDEL® is a calcium
antagonist which has shownto have a positive effect on
hypertension and angina
pectoris.

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

1998 ARC®
ARC® is an anti-reflective
coating developed forsemiconductor lithography. It
is used to coat the part under
the photoresist, to resolve
a number of issues withlithographic exposure suchas reflection from varying
substrate levels. This makes
it possible to significantly
reduce the device failure rate.

1994 PERMIT®
We market PERMIT®, ourproprietary active ingredient
which is particularly effective
against cyperaceous weeds,
in Japan under the trade
names of HICUT®, which is aherbicide for paddy rice in the
mid to late term that is highly
effective against the pesky
weed Eleocharis kuroguwai,
and INPOOL® for lawns.

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 orin the environment.

Our Future-Creating Story

FY20182010 -

Sales according to segment(billion yen)2005 AdBlue®
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 andwater, which helps to reduce
environmental impact.

Others＊36.5

Chemicals
35.7

Pharmaceuticals
7.0

Agricultural
Chemicals
62.7

Performance
Materials
63.0

Operating income according tosegment (billion yen)
Others＊ -0.3

Pharmaceuticals Chemicals
1.0
3.0

2008 LEIMAYLEIMAY® is a fungicidethat works in a specific
way on diseases causedby oomycetes andmyxomycetes used as an
atomizing agent for potatoes,
grapes, and vegetables.
®

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

2013 ALTAIRALTAIR® is a wide-spectrum
herbicide that is highly
effective in eliminating bulrush
and cyperaceous perennial
weeds. It is also effective forweeds that are resistant toconventional sulfonylureabased herbicides. We market
this product in Japan, South
Korea, and China.
®

2013 Fluralaner
Fluralaner is a compound
invented by Nissan Chemical
Corporation used as anactive ingredient in theveterinary pharmaceutical“BRAVECTO®” developed by
MSD Animal Health (MAH).
It is manufactured by Nissan
Chemical Corporation,and supplied to MAH as aveterinary pharmaceuticalsubstance. Fluralaner has
remarkable characteristics:
it acts rapidly against major
species of fleas and ticks
and has a longer insecticidal
effect than existing products
as its effects remains evenwhen highly diluted.

Agricultural
Chemicals
18.4

Performance
Materials
15.0

Sales according to region(billion yen)

Europe, USA,
etc.
32.1
Other Asian
countries
43.4

Japan
107.1

South
Korea
22.3

* Others: trading, others and adjustment

Nissan Chemical Corporation Integrated Report 201916

Process of Value Creation

Nissan Chemical Group is developing its business activities in four business domains based on the fivecore technologies those have been cultivated over the years.
We aim to achieve sustainable growth together with society by making effort at the materiality identified byrecognizing various social issues and changes.

InputsMateriality[P19 to 20]

Human Capital
Number of Employees: 1,861*

CoreTechnologies(Number of Researchers: 470)

[P35 to 36]* Non-consolidated

Provision of new value forhelping to enrich people’s lives

Financial Capital
RatingA+ (long-term rating)Intellectual Capital
Number of Patents Held: 4,406
R&D Expenses: 17.8 billion yen
Manufacturing Capital
CAPEX: 9.9 billion yen
Social Capital

Fine Organic
Synthesis
Functional
Polymer Design
Ultrafine Particle
Control
Biological
Evaluation
Optical Control

Number of countries where
our products are sold: 58
Natural CapitalStrengthening of NissanGroup's business baseRaw Materials: 372,359 tons

Continuous improvement ofresponsible care activities

Energy: 101,000 kL*
Water Resources: 27.8 million m3* crude oil equivalentSocial Issues and Changes

17

Nissan Chemical Corporation Integrated Report 2019

Advanced climate change

Global crisis

Worsening health issues

 Increase of requests for consideration of health and safety in the work environment

Diversification of risk factors
Advent of a smart societyOur Future-Creating Story

Business Domains

Outputs

Outcomes

Corporate Vision in 2030

[P25 to 34][P23 to 24][P5 to 12]

Display Materials

Resolution ofSocial Issues

Information & Semiconductor Materials
Communication Optical Interconnect
Materials“A corporate group which
provides new values forhelping to enrich people’sLife Sciences

Agrochemicals

lives by integrating internal

Pharmaceuticals

and external knowledge with

Veterinary Pharmaceuticals

facing globally-changing

Biomedical Materials

society”

Environment & Oilfield Materials
EnergySecondary Battery Materials

Improvement ofCompany Value“A group of first-classpioneers who blaze a way tothe future with enthusiasm

Chemicals &Affiliates

Basic Chemicals

by trusts they have built andFine Chemicals

skills they have cultivated”

Intensification of inter-corporate competitions
Exacerbation of the food issues

Changes in lifestyle

Labor shortage Increase of requests for CSR considerations in the Supply Chain

 Increase of interest in corporate governance reform

Increase of requests for information disclosure

Nissan Chemical Corporation Integrated Report 201918

Materiality

Our group has identified the materiality needed
to realize the corporate vision in 2030 as “Acorporate group which provides new values forhelping to enrich people’s lives by integratinginternal and external knowledge with facing

globally-changing society”, and “A group of firstclass pioneers who blaze a way to the future withenthusiasm by trusts they have built and skills they
have cultivated”.

Materiality Identification Process
Gain Understanding About Social Issues and Social Changes
Based on our group’s long- and mid-term business plans, we clarified more than 500 keywords for social
issues and social changes, referring to SDGs and ESG-related metrics and guidelines.

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

Management of Impact on Our GroupIn regards to the 29 materiality factors, we clarified the social issues and changes that are expected fromnow 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.

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

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

19

Nissan Chemical Corporation Integrated Report 2019

Our Future-Creating Story

Materiality Matrix
Provision of new value for

We aim to provide new value for helping to enrich people’s lives throughhelping to enrich people’s lives

four businesses based on five core technologies.

Strengthening of Nissan

We aim to strengthen our business base to improve our ability to respondGroup's business baseto increasingly diverse and sophisticated marketing needs.

Continuous improvement ofresponsible care activities

We aim to enhance the maintenance of environment, health, andsafety through the operation of the Nissan Chemical Responsible CareManagement System.
Crucial issues for corporate survival
Strengthening of Corporate Governance, Risk Management and ComplianceHigh

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

Promotion of diversity
Promotion of fair-trading
Promotion of CSR procurement
Promotion of occupational healthContribution to health issues
Supply of environmentally friendly
products and services
Enhancement of R&D capability
Mitigation of climate change

To Stakeholders

and safety

Improvement of products quality
Creation of a comfortable
Water resources conservation
Improvement of capitalefficiency

workplace
Biodiversity conservation
Management of chemical
substances
Reduction of industrial waste

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

and pollutant emissions

Enhancement of information
security

Improvement of marketing powerIntellectual properties exploitation

Priority

Expanding business domains

High
To the Company

Nissan Chemical Corporation Integrated Report 201920

Materiality

Materiality and KPIMateriality

Provision of new value forhelping to enrich people’s lives

Strengthening of NissanGroup's business baseContinuous improvement ofresponsible care activities

21

Nissan Chemical Corporation Integrated Report 2019

FactorOur Initiative

Contribution to health issues

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

Supply of environmentally friendly
products and services

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

Contribution to the improvementof 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 Review of health promotion measures by the health promotion committee
employees’ healthand 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 (Green House Gas) 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

Our Future-Creating Story

FY2021 Targets (KPI)

Results for FY2018

License out candidates of drug agents
Launch of new medical materials—

Launch of new environmentally friendly products—

Number of people positively impacted by the sale ofdisinfectants for drinking water: 2.5 million per year

900,000 per year

Launch of optical interconnect materials with higher
capacities and speeds of data communications—

Achieve10% higher sales than in FY2018 by the
Agricultural Chemicals Division

FY2018 sales: 62.7 billion yen

Reach 1,350 patent applications in three years by
FY2021454 patent applications

Achieve 80% outsourcer audit rate in three years by
FY2021

25.6% audited

Continue to acquire White 500 certification

Acquired White 500 certification for two
consecutive years from 2017

Achieve ratio of taking annual leave of 80% or
higher

75.8%

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

11 hours (same for FY2017)

Achieve proportion of women among employees in
the regular position of 10%

8.9%

Hold consultation meetings with Legal Officethroughout the Group by FY2021

5%

Achieve CSR questionnaire survey coverage of
90% (in terms of monetary amount)57%

Relevant SDGs

Formulate of BCP where products account for 50%
of ordinary income

Review of target products for BCP
formulation and implementation planning

20% improvement in GHG emission rate and 20%
improvement in energy consumption rate compared to FY2013

GHG emission rate: Improved by 20% from FY2013 level
Energy consumption rate: Improved by 17% from FY2013 level

Achieve zero accident requiring staff time off fromwork

Achieving zero accident requiring staff time
off from work

Achieve 100% initiative for prefectures in which our
Head Office, plants, and laboratories are located67%

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

67%

99.5% or more recycling rate
Achieve 75% improvement in exhaust gas (SOx +NOx) emissions compared to FY2013

Recycling rate was 97.7%.
Exhaust gas (SOx+NOx) emissions:Improved by 55% from FY2013 level

Nissan Chemical Corporation Integrated Report 201922

Financial and Non-Financial Highlights
Number of full-time employees/Ratio of females
among full-time employees

Operating income/Operating margin(billion yen)
40.0
30.0
20.0

14.8
25.3

17.4

16.2

31.4

28.6

18.1

18.1

35.0

37.1

（%）
20.0

(number of full-time employees)
1,900

15.0

1,850

10.0

1,800

5.0

0

0.0

2014

2015

2016

Operating income (left axis)

2017

2018 (FY)

30.0
25.0
15.0

15.1

14.6

12.7

20.0

24.0

22.4

16.1
27.1

18.2

10.0
5.0
0

2014

2015

2016

Net income (left axis)

2017

（%）
18.0
16.0
14.0
29.4
12.0
10.0
8.0
6.0
4.0
2.0
0.0
2018 (FY)
16.6

64

71

5.0
0

72

71

70

15.0
10.0

9.0

9.0

5.7

6.8

7.9

2014

2015

2016

（%）
100

9.0

10.2

12.1

2017

2018 (FY)

Share repurchase (left axis)

8.9

8.9

15.0

15.8

16.1

15.0

23

2016

8.7

Ratio of females among full-time employees (right axis)

153
55

172

152

53

55

31

124
23

114
19

250

237

255

246

232

230

2013

2014

2015

2016

2017

2018 (FY)2000(ton/million yen)
4

3.17
2.58
155

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

3

2.33

2
1
0

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

Waste generation/Recycling rate
(1,000 tons)
40.0

0.0

17.2

17.8

（%）
10.0

2018 (FY)R&D expenses/sales (right axis)

Nissan Chemical Corporation Integrated Report 2019

9.0

2018 (FY)

33.4

33.7

97.9

97.7

34.7

34.8

（%）
100

50

2014

2015

2016

Waste generation (left axis)

2017

2018 (FY)0

Recycling rate (right axis)

Lost-time injury frequency rate

8.9

2017

2017

400

1.48

1.6
1.11

1.2
0.8
0.4

2015

2016

3.53

0

5.0

R&D expenses (left axis)

2015

9.5

3.59

20.0

5.0

2014

1,772

10.0

(1,000 tons)
3.78
600

Total payout ratio (right axis)

10.0

0

9.8

1,739

GHG emissions/GHG emission rate (emissions/sales)

50

R&D expenses/Percentage of sales(billion yen)
20.0
8.7

2014

33.0
9.0

6.0

Total amount of dividend (left axis)

1,650

ROE (right axis)(billion yen)
25.0

1,721

10.5

1,819

9.9

Number of full-time employees (left axis)

Total amount of dividend/Share repurchase/Total payout ratio

20.0

1,700

Operating margin (right axis)

Net income attributable to owners of parent/ROE(billion yen)
35.0

9.8

11.0

1,861

10.5

1,750
10.0

11.1

（%）
11.5

0.0

0

0.72
0.36

0.88

0.85

0.82

0.36

0.37

0.37

0.76

0.81

0.88

0.81

0.37

0.37

0.90

0.00
2010

2011

2012

2013

2014

Nissan Chemical

2015

2016

2017

Chemical Industry

2018 (FY)Our Future-Creating Story

Financial Data (consolidated)
Unit

2014

2015

2016

2017

2018

Sales

Billion yen

171.2

176.9

180.3

193.4

204.9

Operating income

Billion yen

25.3

28.6

31.4

35.0

37.1

Ordinary income

Billion yen

26.4

29.5

31.7

36.2

39.1

Net income attributable to owners of parent

Billion yen

18.2

22.4

24.0

27.1

29.4

EBITDA*1

Billion yen

33.8

38.3

40.3

45.5

48.0

*2

EPS

Yen/Share

113.99143.37156.97180.30197.67

Dividend

Yen/Share

36

44

52

68

82

Dividend payout ratio

%

31.6

30.7

33.1

37.7

41.5

Total payout ratio

%

64

71

70

71

72

Total assets

Billion yen

223.9

228.2

231.7

246.0

247.0

Net assets

Billion yen

151.3

156.9

163.7

176.4

182.1

Cash

Billion yen

31.3

35.3

35.7

37.7

36.2

Liabilities with interest

Billion yen

35.1

33.1

30.8

28.6

26.6

Equity ratio

%

66.9

68.1

69.9

71.0

73.0

Capex

Billion yen

9.8

10.2

14.3

13.7

9.9

Depreciation

Billion yen

8.5

9.7

8.9

10.5

10.9

R&D Expenses

Billion yen

15.0

15.8

16.1

17.2

17.8

%

8.7

8.9

8.9

8.9

8.7

R&D expenses/sales*1: Operating income + depreciation*2: Net income attributable to owners of parent/issued shares

Non-Financial Data (non-consolidated)
2014

2015

2016

2017

2018

Male

People

1,553

1,567

1,599

1,628

1,654

FemalePeople

168

172

173

191

207

Percentage
of females

%

9.8

9.9

9.8

10.5

11.1

Male

People

18

20

19

25

22

FemaleOverall

Full-time employees

Unit

Temporary employees

People

91

96

100

103

104

Ratio of employees with disabilities*1

%

2.22

2.35

2.15

2.23

2.21

Ratio of re-employment of retired
employees

%

66

97

89

75

90

Ratio of taking annual leave

%

73.4

77.4

77.2

77.6

75.8

Male

People

1

2

0

0

3

FemalePeople

6

8

11

8

9

Energy consumption

1,000 kL

91.9

98.8

99.4

97.5

101.0

Greenhouse gas emissions

1,000 tons

462

462

432

380

363

Final disposal volume of waste

1,000 tons

2.3

2.2

1.1

0.8

0.9

*3

1.11

1.48

0.37

0.37

0.00

Employees whostarted childcare
leave*2

Lost-time injury frequency rate (full-time
employees)*3*1: Percentage value as of June 1 of each fiscal year *2: Does not include those who take time off in the previous year
*3: Number of deaths and injuries due to occupational accidents per million actual working hours

Nissan Chemical Corporation Integrated Report 201924

Business Overview
We contribute to the realization of a prosperous
and safe society by providing materials used ina wide range of fields, from basic chemicals tocyanuric acid based high-performance materials.

Chemicals

Our Chemicals business was started with the
manufacture of sulfuric acid and ammonia, materials
for fertilizer. In addition to industrial use, we currently
provide high purity chemicals for electronic component
manufacturing applications and proprietary cyanuric
acid derivatives for use in a wide range of fields.

*A dBlue® is a registered trademark of the Verband der Automobilindustrie.

Fine Chemicals

Natural gas

Ammonia

Urea

AdBlue®

High-purity
Ammonia

Melamine

Nitric acid

Cyanuric acid

High-purity
Nitric acidMelamine cyanurate

TEPIC®

Chlorine
HI-LITE®

(Yellow boxes indicate
chemicals procured
outside the company)

Basic Chemicals
We provide industrial chemicals such as melamine,
sulfuric acid, nitric acid, and ammonia as well asbasic chemicals, including our higher alcohol product
FINEOXOCOL®, to a variety to industries. Nissan
Chemical is proud of having the highest sales volumes
for melamine not only in Japan but also overseas. Just
as with our industrial chemicals, we are further improving
the efficiency of our production system in order to createa stronger business structure to protect against external
factors such as a rise in fuel prices.
We are also working on producing and supplying
products to support cutting-edge fields, and introduce
products to the market such as high-purity sulfuric acid,nitric acid, and ammonia from which impurities are
removed as much as possible.

25

In addition, we established a manufacturing and supply
system for our high-grade urea solution AdBlue® * that
decomposes nitrogen oxide contained in exhaust gas
from diesel vehicles, which is considered to be the causeof air pollution, into nitrogen and water, thereby reducing
environmental impact.

Nissan Chemical Corporation Integrated Report 2019

Main products in this category consist ofenvironmental 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 thehigh-performance chemicals TEPIC®, derived fromcyanuric acid that contains triazine ring, and melamine
cyanurate (MC). These products are used for special
applications. In addition to being used as a curative
agent for coating powders, TEPIC® is seeing an
increase in demand for use as an electronic material,for solder resist, LED sealants, etc. MC is used asa non-halogen flame retardant or an auxiliary flame
retardant for various engineering plastics.
We are promoting research and development ofproprietary cyanuric acid derivatives so that they canbe used in a wider range of fields.

Business Results and Outlook(billion yen)
50.0
40.0
30.0

34.3

34.8

3.9

3.8

34.9

35.7

39.0

(billion yen)
6.0
43.1
5.0
5.1

4.0
3.4

20.0

3.0

3.0

2.0

10.0
0

4.0

1.0
2015

2016
Sales (left axis)

2017

2018

0
2019 (Outlook) 2021 (Target)

Operating income (right axis)

Our Future-Creating Story

Environmental Awareness and Stage II Business Strategies
Opportunities and Risks

 Strong global demand for cyanuric acid
 Increasing social demand for water
sanitation Increased demand for products for
information & communication field Increase of issues at plants due toaging facilities

Main Measures

Sources of Growth
1) Cyanuric acid2) HI-LITE®
3) TEPIC®
4) High-purity
sulfuric acid Promote sales of cyanuric acid,
HI-LITE®, TEPIC®, and highpurity sulfuric acid Enhance maintenancetechnology through the
adoption of digital technology1) W e joined the United Nations Global Compact (UNGC) in April 2018 and have started initiatives for achieving
sustainable development goals (SDGs) which focus on social and environmental issues that need to besolved by 2030. The Goal 6 “Clean Water and Sanitation” is still an important issue. We believe that the
scenarios in which our environmental chemicals such as cyanuric acid and HI-LITE® can help with this issue
will become increasingly widespread.
2) W e have started exporting some grades of HI-LITE® since they have been certified as materials fordisinfectants for drinking water in areas where hygiene management is insufficient, such as in developing
countries. Preparations are being made so that we will be able to respond to expanding demand.
3) Our product TEPIC® has earned the trust of users and has become an indispensable product for many
applications. We expect that demand for TEPIC® will continue to grow in various fields, including theinformation & communication field.
4) Demand for high-purity sulfuric acid is expected to grow in the information & communication field. As
demand grows, we will continue to maintain high quality and high availability.

Efforts Started After Stage II Initiation
The Chemicals business is susceptible to theeffects of fuel prices, supply demand balance,and market conditions. Therefore, we will continue
to strive to secure stable earnings while flexibly
reviewing business strategies in response toenvironmental changes.
We are also focusing on the development anddeployment of new products, mainly cyanuric acidderivatives, as a source of sustainable businessgrowth, which have already been evaluated by manyusers for various applications.

 New grades of TEPIC®

TEPIC-PAS: liquid product
TEPIC-VL: photo-curing product Starfine® (zinc cyanurate)
Adhesion improvement agent to metals→Additive for paints and adhesives Venus® Oilclean (microorganism formulation that
decomposes oils and fats)
Decomposes oils and fats in wastewater fromfood factories and etc.

Nissan Chemical Corporation Integrated Report 201926

Business Overview

Performance Materials

With the expansion of the information &communication field, our current society is transforming
into a smart society where diverse systems interact toprovide advanced services to everyone.
We provide high-value-added products to the rapidlychanging ICT industry through the three pillars of thisbusiness division: Display Materials, Semiconductor
Materials, and Inorganic Materials.

Display Materials
Polarizing filter
SUNEVER®, a coating
Backlight
material to align liquid
crystal molecules in a
Glass substratecertain direction, serves
Transparent
as our primary display
electrodematerial. Since 1989 when
this product was madeAlignment
available for sale, we havefilm
Liquid crystal
expanded our market
Spacershare by increasing theColor filter
functionality of alignment
materials, even when the liquid crystal type used ischanged from TN to STN or TFT. In addition, we started thesale of Rayalign®, an alignment material for liquid crystal IPS
which incorporates photo alignment technology, in 2014.
This product is currently used in many smartphones thatoffer a screen resolution greater than 400 ppi.
It is expected that product demand for Realign®
will further increase in the future as tablet and monitor
resolutions increase.

Semiconductor Materials
We started the manufacture and sale of ARC® * in1998 based on a licensing agreement with US company,

without ARC®

27

with ARC®

Nissan Chemical Corporation Integrated Report 2019

We will contribute to the realization of a smart
society by promoting profitability of display,semiconductor, and inorganic materials and further
expanding business size through new productdevelopment.

Brewer Science Inc. ARC® is a coating material
designed to prevent issues such as light reflection,interference from substrate, and coating failure during
micro-fabrication of the photoresist through lithography
process. During the 2000s, semiconductor circuit
widths were further miniaturized along and, in response,
improvements were made to related materials.
Therefore, we launched OptiStack® * (multi layer processmaterials) in 2007 which greatly expanded our business.
Currently, in preparation for the expected demandfor EUV (extreme ultraviolet) exposure technology(wavelength 13.5 nm, semiconductor circuit width 7
to 3 nm), we are developing EUV materials and also
focusing on preparing materials for 3D packages
preparing for the limits of optical shrink.
* ARC® and OptiStack® are registered trademarks of Brewer Science, Inc.

Inorganic Materials
SNOWTEX®, a colloidal
silica solution serving asa fiber processing agent,
went on sale for the firsttime in 1951. Now we offer
organosol (colloid solution
with nano-sized silica
Shale oil extraction site
particles dispersed stably inorganic solvent) and monomer sol, a product that can beused without solvent. These products are indispensable
materials used as abrasives for manufacturing electronic
recording media and for other purposes. We are aiming tofurther expand product applications, including use as anagent to increase shale oil and gas extraction efficiency.

Business Results and Outlook(billion yen)
80.0
70.0
60.0
51.8
50.0
40.0 12.0
30.0
20.0
10.0
0
2015

52.8
12.5

58.8
14.2

2016
Sales (left axis)

2017

63.0
15.0

2018

(billion yen)
75.1 20.0
18.0
64.3
17.3 16.0
14.0
15.0
12.0
10.0
8.0
6.0
4.0
2.0
0
2019(Outlook) 2021(Target)

Operating income (right axis)

Our Future-Creating Story

Environmental Awareness and Stage II Business Strategies
Opportunities and Risks

 Increased demand due to the developmentof the information & communication field Change in demand for shale oil due
to fluctuations in crude oil prices Advent of innovative technology Intensification of inter-corporate
competitions

Main Measures Develop and launch new
products
 Improve existing products
and expand their application
 Strengthen evaluation technology Improve and maintainfacilities

Sources of Growth Liquid crystalalignment materials
for TVs Oil and gas
materials

1) Currently, our liquid crystal alignment materials are mainly used in smartphones and tablets. In the future,
however, we will use optical alignment technology that does not require rubbing and will also use it for TVs
and other products with large displays.
2) C rude oil development is becoming more active in specific areas where superior shale oil wells are locatedand increasing shale oil production in those areas. However, it is said that extraction efficiency has been
reduced due to the phenomenon that oil recovery amounts have generally decreased due to development inareas where wells are in close proximity. We aim to improve extraction efficiency by developing applications
for use of our inorganic materials.

Efforts Started After Stage II Initiation
OLED materials
OLEDs are thinner and lighter than liquid crystals,
offer high-speed response, and possess excellent
design characteristics, such as flexibility. They are being
used more often in smartphones, high-definition, largescreen TVs and other products. We are developing
proprietary materials, including hard coat materials forsurface protection, materials that enhance light extraction
efficiency, anti-reflective coating alignment materials, andrelease layer materials, which contribute to improving thecharacteristics of smartphones. In addition, our company
is also accelerating market development for ELsource®,
a soluble hole injection material, NPAR®, a repellant banklayer material, and other materials which can contributeto reducing the cost oflarge TVs, production
efficiency, and characteristics
enhancement. We arealso developing materials
for next-generation selfluminous displays which
will be the future display
technology following OLEDs.

Semiconductor Packaging Materials
Technologies related to high-speed, large-capacity
telecommunication such as IoT, 5G, and sensors,
are making rapid progress. For this reason, further
miniaturization and higher integration in the formationof electronic circuits are occurring. However, weare coming close to physical theoretical limits forshrinkage of interconnect and integration, so it isexpected that issues will be overcome throughfurther evolution of semiconductor packaging
technology. In addition to circuit miniaturization,
we have focused early on technology for threedimensional stacking of thinned semiconductor
wafers. In 2013, we acquired all shares of German
company, Thin Materials AG and incorporated theiradvanced processes necessary for semiconductor
packaging and material development technology,
making them our own technologies. We arealso actively working on other next-generation
semiconductor packaging technologies anddevelopment of markets related to sensors.

Nissan Chemical Corporation Integrated Report 201928

Business Overview

Agricultural Chemicals

Since the 20th century, the world's population
has been increasing and is expected to increase
from 7.4 billion (current population) to 9.6
billion in 2050. As a result, it is said that foodproduction must be increased by about 60%, so
how to increase crop yields on limited farmland
is a major challenge for people's survival.
The Agricultural Chemicals Division aims toincrease crop yields by selling a wide range ofherbicides, insecticides, and fungicides bothin Japan and overseas for use on major crops
worldwide.

Agrochemicals
Our agrochemical business
was started in the 1910s when
our predecessors Nippon Seimi
Seizo and Kanto Soda began
manufacturing and sellinginsecticides and fungicides. Initially,
most of the active ingredients of
our agrochemicals were introduced
from other companies. However,starting with TARGA® (herbicide for Active ingredient: PERMIT®
grassy weeds) launched in 1984,
we have continued to manufacture and sell products
developed in-house such as SIRIUS® (herbicide forpaddy rice), SANMITE® (insecticide/acaricide) and
PERMIT® (herbicide for paddy rice and corn), whichhave steadily improved profitability.
Afterwards, we experienced hard times as a resultof in-house development delays and intensifying
competition created by domestic and foreign
manufacturers. However, LEIMAY®
(fungicide) was launched in 2008
followed by STARMITE® (acaricide)in 2009, marking our return toselling new products developed
in-house.
In 2012, ALTAIR® (herbicide forpaddy rice) was introduced to themarket resulting in steady sales.
Additionally, we are actively
Active ingredient: Amisulbrom

29

Nissan Chemical Corporation Integrated Report 2019

We contribute to a stable food supply throughconsistent business activities from the research for
new agricultural chemicals to their development,
manufacture, and sale, and expansion of a broad
product lineup through the acquisition of agents fromother companies and joint development of products.

pursuing the acquisition of other agrochemicals. For
example, in 2002 we acquired Monsanto's herbicide
business in Japan and began selling ROUNDUP® andother products as our own products. In 2011, wedeveloped ROUNDUP® MAXLOAD AL, a shower-type
product that can be used as is aimed at households. In
2016, we started the sale of fast-acting “AL II” followed by“AL III”, which is both fast-acting and persistent, in 2018,
striving to provide products to address customer needs.

Veterinary Pharmaceuticals
Through our development of agricultural pesticides, wehave discovered compounds that are not only effective foruse on agricultural crop pests, but also on fleas and ticks
that are parasitic in dogs and cats, and have continued to
study these compounds as veterinary pharmaceuticals. In
2008, we entered a licensing agreement with MSD Animal
Health. Development of veterinary pharmaceuticals using
Fluralaner, an active ingredient invented by our company,
has advanced. Launched in Europe and the United States
under the brand name BRAVECTO® * in 2014, veterinary
pharmaceuticals containing Fluralaner as an active
ingredient are now used in more than 100 countries andare leading the growth of our Agricultural Chemicals
Division.
* BRAVECTO® is a registered trade mark of Intervet International B.V.
and Intervet Inc.

Business Results and Outlook(billion yen)
80.0
70.0
58.1

60.0
50.0

47.5

40.0
30.0

52.0

62.7
18.4

64.2

(billion yen)
25.0
70.1
21.1

20.0

19.0
15.0

16.4
13.2

10.0

10.8

20.0

5.0

10.0
0

2015

2016
Sales (left axis)

2017

2018

0
2019(Outlook) 2021(Target)

Operating income (right axis)

Our Future-Creating Story

Environmental Awareness and Stage II Business Strategies
Opportunities and Risks

 Continuous expansion of the overseas
agricultural chemicals 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

Main Measures Rapidly popularize and promotesales of GRACIA®
 Strengthen initiatives aimed atlarge-scale farmers, corporations,and general consumers Steady development of new
agrochemicals and pipeline creation

Sources of Growth
1) GRACIA®
2) ROUNDUP®
3) Fluralaner RACIA® is a pesticide that was developed in-house that is fast-acting on a wide range of crop pests and1) G
has little impact on honeybees which are useful insects. It was launched in South Korea in 2018 and hasreceived a great response. GRACIA® was then launched in Japan in 2019 and is expected to increase ourmarket share in the future.
2) We launched ROUND NOZZLE® ULV5, designed for use with ROUNDUP® MAXLOAD which uses only
5 liters of water to achieve 10a dispersion, which is expected to reduce farmer workload. As a result, we
expect that ROUNDUP® will grow in demand as an agrochemical that is easier to use.
3) Along with factors such as the declining birthrate and aging population, the idea that companion animals
are like a family to their owners is growing in popularity. We expect that the demand for veterinary
pharmaceuticals will increase in the future as people become more aware about companion animal health.

Efforts Started After Stage II Initiation
Agrochemicals
At Nissan Chemical which consistently conducts
research and development, manufacturing, andsales of agrochemicals, the ingredients that wedevelop in-house are major keys to increase
profitability. Most recently, we launched GRACIA®,a product developed in-house, in 2018. However,
it is necessary to create new products withoutcompromising to current conditions.
We are developing a fungicide (development code
NC-241) and herbicide for paddy rice (development
code NC-653) as new products and are continuingresearch with the expectation that these will become
our next big products.

Veterinary Pharmaceuticals
In addition to
BRAVECTO®, Fluralaneris also used as aningredient in EXZOLT®,
a red mite parasiticide
for chicken which issold in Europe, Brazil,
and other countries. We
will continue to develop
veterinary pharmaceuticals for livestock use.

EXZOLT® **E
 XZOLT® is a registered trade mark of Intervet International B.V. andIntervet Inc.

Nissan Chemical Corporation Integrated Report 201930

Business Overview

Pharmaceuticals

We entered the pharmaceutical business in 1982 and launched
EPATEC®, an external preparation with ketoprofen serving as its
main ingredient, as our first pharmaceutical product. Since then,we have continued to deal with challenges in the R&D of innovative
new drugs, making full use of our strategically developed chemicalcompound library, our cutting-edge evaluation functions, and ourfine organic synthesis technologies, mastering the pharmaceuticalbusiness from manufacturing to sales.

In-house Drug Discovery
The development of the anti-hypertension agent
efonidipine hydrochloride marked our start in the drug
discovery business. It was launched as LANDEL®
in 1994 in Japan. LANDEL® is distributed by Zeria
Pharmaceutical Co., Ltd. and Shionogi & Co., Ltd.
in Japan, and FINTE® is distributed by Green Cross
Co. in South Korea. At the time of its development,
drug development by major Japanese pharmaceuticalmanufacturers was focused on antibiotics while ourcompany focused on (1) anti-hypertension agents and(2) anti-cholesterol agents, paving the way to success.
In 2003, Kowa Pharmaceutical Co., Ltd. launched
LIVALO®, an anti-cholesterol agent, another one of
our focus points, with the main ingredient pitavastatin
calcium. Currently LIVALO® is sold in 25 countries
around the world where it has been approved.
However, in August 2013, its substance patent forJapan expired, and due to the decline in market
share by generic drugs and the impact of drug pricerevisions, the domestic conditions continue to beharsh, and the creation of new drugs is an urgent need.
Currently we are developing a medication for
thrombocytopenia (NIP-022) and an anti-arrhythmic
agent (NTC-801), aiming to quickly advance to the nextstages of development.

Finetech®

By focusing on drug discovery and manufactureof active ingredients, we are striving to develop
better pharmaceuticals through a unique businessmodel that does not have a sales department,
licensing products which we have developed topharmaceutical companies.

pre-clinical to commercial production, as well as thecontracted manufacture of API and intermediates incompliance with GMP (Good Manufacturing Practice).
Furthermore, we provide related services including quality
design, stability testing, impurity and metabolite sample
synthesis, and creation of MF (Master File) applicationmaterials. In recent years, we have also started supplying
generic drugs to meet the need for highly active drug
substances that require fine organic synthesis andcontainment. We possess a wide variety of asymmetricsynthesis technologies (epoxidation reaction, kinetic
optical resolution, aldol reaction, Michael reaction, etc.),oxidation reaction technology using organic molecularcatalysts (AZADOL® and IBS), and fine organic synthesis
technology based on prostaglandin derivative synthesis
through a proprietary two-component coupling method.
We also have an abundant amount of experience
manufacturing in-house medical pesticides, and ourstrengths include multi-step synthesis and heterocyclic
compound synthesis.

Business Results and Outlook(billion yen)
10.0
8.7
8.0

(billion yen)
2.5
8.0

2.0

6.0

31

Nissan Chemical Corporation Integrated Report 2019

7.0

7.5

1.2
1.0

1.0

1.0
0.7

2015

2016
Sales (left axis)

2.0
1.5

2.0
0

7.0

1.7

4.0

We are developing contracting business oftechnological development of pharmaceuticals forcustomers that provides total support to customers fortheir development of active pharmaceutical ingredients(API). We engage in the contracted development of
manufacturing process in each one of the stages from

7.5

2017

2018

0.5

0
2019 (Outlook) 2021(Target)

Operating income (right axis)

Our Future-Creating Story

Environmental Awareness and Stage II Business Strategies
Opportunities and Risks

 Revitalization of research for discoveryof active ingredients for medical drugs Increased demand for generic drugs Intensification of inter-corporate
competitions

Main Measures Creation and advancementof candidate drugs Expand our contracted
manufacturing business andimprove profitability

Sources of Growth1) S ales promotion ofeldecalcitol and generic
drugs
2) C
 ontracted peptide
manufacture1) In 2015, we started the manufacture and sale of maxacalcitol, an active ingredient used in medications forpsoriasis and secondary hyperparathyroidism, supplying it for the manufacturer and seller of generic drugs.
Also, the demand for eldecalcitol, an active ingredient in osteoporosis medications, is growing due to theincreasing number of patients with osteoporosis resulting from population aging. Based on the production
results of maxacalcitol, we will move ahead with the development of eldecalcitol, which requires stable andadvanced quality control, establish a stable supply system for the product launch in 2020, and develop it asa source of business growth.
2) C onstrained peptide pharmaceuticals have the advantages of antibody preparations and low molecular
drugs and are expected to be new drugs that can be manufactured at low cost. We invested 900 million yen
last year in a third-party allocation of shares of PeptiStar Inc., which is aiming to establish a stable supply
system for API of constrained peptides. We will continue our research of new manufacturing technologies
with the aim of dramatically reducing costs.

Efforts Started After Stage II Initiation
In addition to promoting the development of
NIP-022 and NTC-801, we aim to license out drugcandidate agents at the late stage of drug discovery.
Also, drug discovery researches that are in their earlystages are focused on neurological diseases. We
will devote research resources to collaborative drug
discovery research with Shionogi & Co., Ltd. andother pharmaceutical companies, and to nucleic aciddrug discovery research with Luxna Biotech Co., Ltd.
to increase the probability of success.
LIVALO® will serve as an important source for
profits during Stage II as well. As pressure to control
prices increases, we aim to maximize value withstable production results and high-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 maxacalcitol business, which contributed toStage I profits, we will get our business up to speed
in anticipation of the launch of the eldecalcitol as new
generic drug in FY2020. Furthermore, we will start acontracted peptide manufacture in collaboration with
PeptiStar Inc., a company in which we have invested,using our overwhelming technological advantages,
including liquid phase synthesis. During the final yearof Stage II, we will proceed with a full-scale plan totransform Finetech® into a highly profitable business.
Our pharmaceutical business will continue toboldly challenge in-house drug discovery while
supporting the backbone of our highly profitable
Finetech business.

Nissan Chemical Corporation Integrated Report 201932

Business Overview

Toward Creating New
Businesses

Economic development and technological innovation
have enriched people's lives and made them moreconvenient. However, there are various challenges fora sustainable society, such as the declining birthrate,
population aging, and progressing climate change issues.
We are making various efforts to create new
businesses in order to contribute to a society whichboasts health and longevity, an advanced informationsociety, and an environmentally sustainable society.

Life Sciences

NANOFIBERGEL®
This is an additive that is friendly to people and theenvironment, consisting of fatty acids and amino acids.
It can be blended into many cosmetic items. When
added, it exhibits a moisturizing effect and promotes
penetration of active ingredients.
This product is use in hair care products for hair andscalp protection.

33

Nissan Chemical Corporation Integrated Report 2019prevelex®
Applicable from experiments and research toregenerative medicine, prevelex® is an ultra-thin film
material with nanometer-level thickness which allows
the easy coating of objects of various shapes. It canalso be used on substrates that have previously beendifficult to coat, such as polypropylene, cycloolefin
polymers, and polydimethylsiloxane. We are promoting
the development of customers in the medical equipment
field by taking advantage of its characteristics to preventthe adhesion of biomaterials such as cell and proteins.

Information & Communication

FCeM® Series
FCeM® series are thebase materials for three
dimensional cell culturesand serve as life sciencematerials that enablepreparation of cells efficiently
and extensively. They are
Cellhesion®
provided as Preparation Kit,
Cellhesion®, etc. Preparation Kit can cultivate large
amounts of iPS/ES cells by making suspension cultures
possible. Cellhesion® enables mass culture of thesecells as a scaffold for vaccines and antibody-producing
cells and mesenchymal stem cells.

Hair care products

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.

Foundation

SUNCONNECT®
This is liquid organic-inorganic hybrid resin materials
that exhibit high thermal stability and near-infraredtransparency, and suitable for imprinting methods,
photo lithography and other processes. It is used for
optical interconnects for purposes such as opticalwaveguides and lenses for optical connectors.

Optical wiring board (illustration purposes only)

Environment & Energy
FairCurrent®
FairCurrent® is undercoat material for lithium-ion
batteries (LiB) containing highly dispersed nanomaterial.
The thin film of FairCurrent® coated on current electrodeenables LiB to improve energy density and life by
reduction of electric resistance and increasing adhesion
to electrode, and applicable for the automotive LiB.

Our Future-Creating Story

Environmental Awareness and Stage II Business Strategies
Opportunities and Risks

 Expansion of theregenerative medicine market Growth of the beauty &health market Accelerated technologicaldevelopment aimed at therealization of a low-carbon society Development delays and latearrival of expected new fields

Main Measures Acceleration of development
by allocating resources toimportant themes Improvement of contact withcustomers and strengtheningof solution proposals
C reate de facto standard
material through participationin national projects

Sources of Growth FCeM®
 prevelex®
 FairCurrent®
 NANOFIBERGEL®

Efforts Started After Stage II Initiation
Life Sciences
We will accelerate development of the FCeM®
series in Europe, the United States, and Asia, andaim to expand new applications of materials toestablish a global standard for cell culture materials.
As for NANOFIBERGEL®, we will aim to expand
the use of functional cosmetic additives to major
cosmetic manufacturers in Japan and overseas,promote the development of new additives, andcommercialize functional cosmetic additives.
AQUAJOINT® is a two-component mixedtype, room temperature solidified and stretchablehydrogel with water as its main component (80%or more), making it possible to make the mostof the characteristics and properties of water. Its
development is moving forward mainly for application
and adoption in the life sciences field.
Information & Communication
With the launch of IoT and 5G services, theamount of data in optical communication networks
is increasing, and the need for broadband opticalmodulators that convert large-capacity electricalsignals into optical signals is expected to increase.
Looking ahead at a future with such high-capacity
optical transmissions, we are researching anddeveloping polymer light-modulating materials
that use the electro-optic effect to make suchtransmissions possible.
Environment & Energy
We are working on the development of materials
that overcome high interface resistance which isa challenge in realizing new secondary batteries(storage batteries) that achieve both high safety
and high energy density. While promoting joint
development with automobile manufacturers andbattery manufacturers, we are aiming for earlycommercialization of all-solid-state batteries.
In addition, the use of environmental energy, which
has not been used thus far, is attracting attention as anincrease in environmental awareness and as a sensor
power source for IoT. Therefore, we are developing
energy harvesting materials that convert environmental
energy around us, such as light and heat, into electricity.
Furthermore, an energy-saving process is required
for the dissemination of technologies for separating
and collecting greenhouse gas that is emitted, which is
expected as a measure against climate change. In orderto achieve energy-saving processes, we are developing
materials that advance membrane separation
technology which helps reduce process size.

Nissan Chemical Corporation Integrated Report 201934

Foundation for Future Creation

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 to become“A future-creating enterprise that responds tosocial needs with unique, innovative technologies”
committed to continue creating new technologies
and products.

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

Our Core Technologies and Products
Fertilizer
Silicate soda

Sulfuric acid

Basic Chemicals● High purity chemicals

agrochemicals

Existing
Pharmaceuticals

Introduced Organic
agrochemicals

Precision Technology

for semiconductors

Inorganic

Ammonia

Petrochemical

Polyimide

Basic Chemicals● Nitric acid
● Urea● Melamine● Cyanuric acid

Heterocyclic Science

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

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

Biological
Evaluation
Pharmaceuticals Produced
Through Contracted Manufacture● Finetech®

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

Active Ingredients
for Veterinary
Pharmaceuticals● Fluralaner

35

Nissan Chemical Corporation Integrated Report 2019

Functional Polymer
Design

Proprietary
Pharmaceuticals● LIVALO®
● LANDEL®

OpticalControl

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

Chemical Research Laboratories
Chemical Research Laboratories is Nissan Chemical’score R&D site, and is responsible for our corporate
research. In addition to research and developmentof agricultural chemicals and pharmaceuticals thatutilize the fine organic synthesis technology, Chemical
Research Laboratories performs research on companywide processes, material analysis research, etc.
Materials Analysis Research Department
Synthesis Research Department
Agricultural Chemicals Research Department
Pharmaceutical Research Department

Biological Research Laboratories
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 Chemical Research & Development
Department
Toxicology & Environmental Science Department
Pharmaceutical Research Department
Medical Materials Group

Shiraoka,
Saitama

Funabashi,
Chiba

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

R&D Expenses
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
81.9 billion yen. The percentage of our expenses in
Performance Materials and Life Sciences (Agricultural
Chemicals and Pharmaceuticals) is accounting for 46%
and 39% respectively.
R&D Expenses(billion yen)
20.0

15.0

15.0
1.6
2.7

Funabashi, Chiba

Toyama, Toyama

10.0

5.0

0

Sodegaura, Chiba

3.5

6.7

15.8

16.1

1.6

1.7

2.4

2.2

3.9

3.8

7.4

7.9

17.2

17.8

1.7

2.0

2.5

2.5

4.3

4.5

8.1

8.2

0.5

0.5

0.5

0.6

0.6

2014

2015

2016

2017

2018 (FY)

Chemicals
Performance Materials

Agricultural Chemicals
Pharmaceuticals

Other

Nissan Chemical Corporation Integrated Report 201936

Foundation for Future Creation

Provision of new value for helping to enrichpeople’s lives
There are various challenges in modern society,such as the declining birthrate, aging population,and climate change. We believe in the potential ofchemistry and are working to provide new value
useful for people's lives by further refining our coretechnologies cultivated over our long history.

Supporting the lives of people in an aging
society through experience cultivated in
drug discovery and life science technology
The total population of Japan will decline to 116.62
million in 2030, and the percentage of those people
that are 65 or older is projected to increase to 31.5%.
Also, lifestyle-related diseases are increasing due tochanges in lifestyles. With the progress of aging andincreased lifestyle-related diseases, awareness forincreasing healthy life expectancies is growing.
We entered the pharmaceutical business in 1982 andhave been working on the development and popularizationof pharmaceuticals ever since. The anti-hypertension
agents and anti-cholesterol agents that we have developed
are used not only in Japan but also overseas.
Cultivated in the pharmaceutical business, biologicalevaluation is utilized for the development of biomedical
materials, including cell culture materials andbiocompatible materials, those contribute to advanced
medical care.
The FCeM® series is a 3D culture medium developedby the New Energy and Industrial Technology
Development Organization (NEDO) based on researchin the practical application of human stem cells.

37

Nissan Chemical Corporation Integrated Report 2019

Although ES cells and iPS cells are said to be cells thatcan be for any organ, billions to hundreds of billions
of cells are required to regenerate organs. Throughthe use of FCeM®, aggregates are dispersed in asuspended state, enabling higher density culture andenabling mass culture of ES cells and iPS cells.
prevelex® is an ultra-thin film material withnanometer-level thickness for preventing the adhesionof biomolecules. It can be coated on various basematerials and enables formation of spheroids (cellularmasses that possess organ functions). Since spheroids
can be injected directly into organs with a catheter orother device, high engraftment and therapeutic effects
are expected.
We will further develop these biomaterials andsupport the progress of regenerative medicine.

Contributing to solving the world's
population growth and food issues
The world's population is increasing, especially indeveloping countries, including some countries in
Asia and Africa. The current world population of 7.6
billion is expected to reach 8.6 billion by 2030. In
addition to population growth, demand for agricultural
products is expected to increase significantly due to a
multiplication in demand for food and feed, mainly inemerging and developing countries as income levels
improve, and demand for use of crop-based biofuels.
On the supply side, however, there are concerns about
serious food shortages due to the possibility of arable
land expansion, water supply limits, and abnormal
weather due to climate change. In order to respondto such food shortages, it is indispensable to enhance
the productivity of existing farmland, and the roleof production materials such as agrochemicals that
support agricultural productivity is increasing.
Our company was founded in 1887 as Japan's firstchemical fertilizer manufacturer to solve food issues
which Japan faced at the time under the company
policy “to dedicate ourselves to prosperity of the nation
by agricultural fertility.” We will continue to actively
seek out and develop new drugs for major crops inJapan and overseas, expand our product lineup, andcontribute to solving food problems by providing a wide
range of products both in Japan and overseas.

ALTAIR® is an active ingredient in herbicides forpaddy rice that is effective in eliminating bulrush andcyperaceous perennial weeds. This product is able tokill weeds both above and below the ground. In Japan,
it is sold as “Twin Star, “Gekko,” “Ginga,” “Comet”,“Tenku”, and “Signus,” products in which it is a main
ingredient. In addition, it is used in South Korea andChina where it shows favorable sales.
GRACIA® is a general purpose pesticide thatis effective against a wide range of difficult-tocontrol insects such as lepidoptera and thrips
found in vegetables and tea, and has little impact
on honeybees. It was launched in South Korea in2018 and in Japan in 2019, moving along with its
development in China and India, and conducting
related evaluations in Asia and South America.

As humans enrich their lives, there are various
effects on the global environment which is thefoundation of life. Large consumption of fossil fuels,
including oil, increases greenhouse gas emissions andaccelerates climate change. Improper managementof waste, pollutants, and chemicals affects the naturalenvironment as well as people's health. Since theworld population will continue to grow, it is essential topreserve the global environment while maintaining andimproving human life.
We define environmentally friendly products as
the products that reduce environmental impact
across each of the processes, from manufacture to
distribution, use and final consumption, or that play
an important role in achieving that goal. We aim tocontribute to society in harmony with the environment
by increasing the percentage of our products that areenvironmentally friendly.
Our inorganic materials used in SNOWTEX®,
aluminasol, organo silica sol, NanoUse® ZR are
performance materials developed based on our“Ultrafine Particle Control” technology. The materials
can be used for a wide range of purposes, including
saving energy from transformers, improving theefficiency of natural energy, purifying emissions, andextending the life of motors.
Venus® Oilclean is a microorganism formulationthat decomposes oils and fats in wastewater fromfood factories and other facilities. Compared to thepressurized floating facility, which is a typical oils and fatsin wastewater treatment system, the facility using Venus®
Oilclean significantly reduces odors and workload aswell as waste with simple equipment. Some major foodfactories have reduced the amount of waste derived fromoils and fats to almost zero by introducing this product.

Aiming for achieve harmony
with the environment throughenvironmentally-friendly technology

Nissan Chemical Corporation Integrated Report 201938

Foundation for Future Creation

Strengthening of Nissan Group's business baseIn order to enhance our ability to respond todiversifying and sophisticated market demands,
we will work to strengthen our R&D capabilities
and improve product quality. At the same time, we
aim to strengthen our business foundation throughinitiatives such as creating a comfortable workplaceand securing/developing human resources.

Personnel retention and trainings
We believe it is essential for human resource
development that “each employee should continue
to educate themselves voluntarily in their efforts todevelop themselves.” Therefore, we have establishedvarious human resource development programs for our
employees who aspire to learn new things and develop
themselves. We are implementing a wide range ofmeasures, such as building a system that creates twoway communications within and across departments,
and actively dispatch employees to external research
institutions and overseas company bases.
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 the same for three
years after entering the company. Through training, we
will continue to support each person, placing guides
and managers at their side so that they can give theirthoughts shape. In addition, senior employees fromother departments related to a subject's theme areappointed as “advisors.” Also, employees from various
departments work together to create a proposal.
At the end of each fiscal year, personal efforts will
be compiled
into apaper andparticipants
with different
specialties
will meetand hold
discussions.

39

Nissan Chemical Corporation Integrated Report 2019

The ideas proposed by young employees during thistraining are often adopted and used in subsequent
work.
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.
While trainees experiencing language barriers while
actually interacting with different cultures, we havebeen able toclearly see thegrowth of eachtrainee by keeping
in touch with eachone.

Creation of a comfortable workplace
With recognition of growing concern for a lack ofworkers due to the declining birthrate and population
aging as well as diverse working styles, our Group
promotes initiatives that enable employees to work in ahighly productive manner and achieve a good work-lifebalance. We intend to evolve not only how to balance
work and life, but also how to set up virtuous cycle
which work enriches the life and life develop the workthrough trial and error.
Introduction of systems for promoting a goodwork-life balance
We have introduced a wide variety of systems andmeasures that enable employees to achieve a goodwork-life balance. In addition to maintaining the highrate of employees taking annual leave of 70% or morein recent years, we are also aiming to support more
efficient ways of working and taking time off. For
example, we implemented a new hourly leave system
in FY2018.

Promotion of Appropriate Work Hours
We are making various efforts to provide appropriate
work hours.
Workshop for work hours: We held workshops
to learn about the basics of working hours at
meetings of personnel managers and labor union
training sessions. Labor management training is also
implemented for all managers.
Introduction of new system for work management:
We have introduced a new system that enables
timely monitoring and visualization of working hours
and remaining annual leave.
Annual leave promotion: We encourage employees totake two days of planned annual leave and three daysof personal annual leave after consultation between
labor and management. An annual leave calendar iscreated for each workplace. In the middle of the fiscal
year, the bosses of employees who take very few
days of annual leave are contacted by the Personnel
Department to encourage them to take time off.
No Overtime Day: This program is implemented at
our head office and plants. No Overtime Day is set at
each business location based on its own conditions.
Measures including patrols are taken so that the
program will not be a mere façade.

been working on efforts such as reducing overtime,
promoting annual leave, and introduction of a childcare
leave system and system that allows shorter working
hours for childcare that both exceed legal requirements
in order to achieve a good work-life balance.
In addition, with regard to the promotion of women, we
have set our target to increase the ratio of women among
employees in the regular position from 8.9% to 10% by
the end of FY2020. We are working so that proportionof 30% of women among new graduates in the regular
position is achieved and the range of occupations held by
women is expanded in each department.
We will continue to employ talented human resources,
regardless of gender, through fair evaluation and training.
Proportion of women among employees in the regular position
（%）
40.0
35.0
30.0
25.0

In order to grow as a “future-creating enterprise” andcontribute to society, we believe that the participationof diverse human resources is essential as globalizationand technological advancement accelerate changes inlifestyle and diversification of values.
At Nissan Chemical, a diverse range of individuals havebeen actively contributing to the Group with their excellent
talents in a wide range of fields irrespective of the age,gender, nationality, race, ethnicity, or other factor. One
thing that we are proud of is our high employee retention
rate, such as 15.8-year of the average length of service, it
makes us believe that our workplace environment allows
each individual employee to play an active part. We willcontinue to further promote respect for diversity.
Promoting Active Participation of Women in the Workplace
With regard to creating a work environment wherefemale employees can play an active role, we have

28.2

2016

2017

30.6

21.9

20.0
15.0
10.0

17.1
12.0

14.0

5.0
0.0

Promotion of diversity

28.2

2012

2013

2014

2015

2018 (FY)In 2018, we were granted Next Generation
Accreditation Mark (as known as Kurumin) by the
Tokyo Labour Bureau of the Ministry of Health,Labour and Welfare, as a company who supports
childcare well. Also, we have been recognizedunder the 2019 Certified Health and Productivity
Management Organization Recognition Program(White 500) for three consecutive years by the
Ministry of Economy, Trade and Industry andNippon Kenko Kaigi.

Nissan Chemical Corporation Integrated Report 201940

Foundation for Future Creation

Continuous improvement of responsible care activities

We are putting effort into Responsible Care
(RC) activities designed to secure environment,
health and safety (EHS) performance on voluntarybasis throughout the entire process, fromthe development of chemical substances tomanufacture, distribution, use, final consumption
and disposal/recycling, and provide communication
with society through the announcement of theirresults.

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 ofour plants have acquired ISO 14001 third party certification.
Environment, Safety &Quality Assurance Committee(Report, annual plan development)

PLAN

ACT
Corrective actions
Annual results report

Four Codes of RC
Environmental Protection/
Safety and Disaster Prevention/
Occupational Safety and Health/Chemicals and Products Safety

Implementation inaccordance withannual plan
DO

CHECK

RC Audits
RC audits are activities for checking RC activities
at each plant, laboratory and affiliate. They are carriedout by Environment, Safety & Quality Assurance
Department in accordance with the RC audit
guidelines. In these audits, the auditors check whether
RC activities, as well as internal audits and patrols,
are carried out appropriately
and the PDCA cycle is
implemented without fail, andcompliance about EHS at eachlocation. Environment, Safety &Quality Assurance Department
clarifies visible or potential
problems related to EHS andpromotes improvements in

Nissan Chemical Corporation Integrated Report 2019

In FY2018, total 49 RC audits were conducted.

Environmental protection andcountermeasures to address
climate change
Efforts for Reducing GHG (Greenhouse Gas) Emissions
Our Group actively works to reduce GHG in businessactivities and contribute to the mitigation of climatechange through the provision of eco-friendly products
and services.
In FY2018, the conversion of the fuel for heating
furnaces for the manufacturing plant of cyanuric acidfrom heavy oil to natural gas, which generates less
GHG, helped to reduce GHG emissions from energy
use and non-energy use. The volume of reduction ofemissions was 17,000 tons-CO2 compared to that of
FY2017 levels. By reducing emissions by 19% from
FY2011 level, the energy consumption rate calculated
as a ratio of emissions and sales (emissions/sales)significantly improved by 57% compared to that of
FY2011.
Greenhouse gas emissions(1,000 tons-CO2)500
400Internal audit

41

response after clarifying the problems, if any.

220

300

250

237

255

246

49

55

53

55

31

172

152

155

2014

2015

2016

248

200

53

100

175

140

153

2011

2012

2013

0

CO2 emissions
from energy use

CO2 emissions
from non-energy use

232

230

23

19

124

114

2017

2018 (FY)

Dinitrogenmonoxide (N2O)

Index of the GHG emission rate (FY2011 as a base of 100)
（%）
100

50

0

43%

100

2011

94

2012

93

2013

89

2014

87

2015

78

2016

64

57

2017

2018 (FY)Safety and Disaster Prevention
We carry out risk assessment, process risk
predictions, and facility risk predictions by priorassessment for manufacture with the aim of ensuringsafety, achieving stable operations, and improving ourprocess safety capability.
As a result, in FY2018, there was no accident suchas explosion, fire, and leakage. Our plants, laboratories,
and affiliates carry out various drills and training sessions,and are designed to make us ready to respond to
emergencies or accidents in a reliable manner.

raising awareness of safety through the safety meetingand the occupational safety newspapers.
*1 HHK stands for Hiyari-Hatto (near miss incident) and Kigahari(alarming). It means the discovery of near-miss incidents that are notlinked directly to serious injuries or accidents but could have resulted insuch injuries or accidents.
*2 5S stands for Seiri, Seiton, Seisou, Seiketsu, Shitsuke. These words
mean “Sort” “Set” “Shine” “Standardize” “Sustain” respectively.

Lost-time injury frequency rate
1.6

1.48
1.11

1.2
0.88
0.8

0.4

0

0.85

0.82

0.37

0.37

0.72
0.36

0.36

0.76

0.81

0.88

0.37

0.81

0.90

0.37
0.00

2010

2011

2012

2013

2014

Nissan Chemical

2015

2016

2017

2018 (FY)

Chemical Industry

Chemicals and Products Safety
Disaster drill

Occupational Health and Safety
Through 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 FY2018, we had six cases of accidents not requiring
staff time off from work and zero accidents requiring
staff time off from work, representing a reduction from
FY2017. In measure, we believe this is the result of
our investment of a total of 350 million yen over thethree-annual period beginning in FY2016 to the safetyof facilities for prevention of falls/overturning. We willcontinue aiming to achieve zero accident by promoting
risk assessment, risk predictions training, HHK*1, 5S*2 ,and appropriate wearing of protective equipment and by

Risk Assessment in Products Lifecycle
We perform a risk assessment (prior assessment) of
each step in handling chemical products, such as theresearch and development, manufacture, sales andrevision. The assessment of risks to human health andthe environment in the value chain is based on data
performed by the Biological Research Laboratories,
either on its own or by outsourcing, safety test dataobtained from results of searching external databases
such as literature, and checking things such as dataon physicochemical properties and work environment
conditions. Based on the results of risk assessment,
we avoid using chemicals of concern and study
safe alternatives. These results are reported to top
management and made known to all the relevant people
in the Company. The results are also made known topeople in the value chain by means such as technology
transfer documents and safety data sheets (SDSs).
In addition, we also participate in Long-Range Research
Initiative, an international initiative promoted by Japan
Chemical Industry Association (JCIA) that seeks to provide
long-term support for research on the impact of chemicals
on human health and the environment. The activities weengage in aim to advance research on the assessment ofrisks to human health and the environment.

Nissan Chemical Corporation Integrated Report 201942

Foundation for Future Creation

Corporate GovernanceWe think of corporate governance as amechanism that ensures sound, efficientmanagement to provide stakeholders withsustainable, medium- to long-term profits.
Based on this idea, we strive to ensure
management decisions are made promptly,
and work to clarify the management
responsibility and responsibility for executing
operations. At the same time, we takeinitiatives for strengthening the management’s
monitoring function, compliance, risk
management, and internal control system
under our Board of Directors and Board of
Corporate Auditors, whose members include
highly independent outside officers.

Kojiro Kinoshita (Representative Director, President & CEO)

Katsuaki Miyaji (Director, Managing Executive Officer)

1977 Joined the Company
2002 Became Director, Head of Corporate Planning
Department
2006 Became Managing Director
2008 Became Representative Director, President & CEO (tothe present)

1985 Joined the Company
2010 Became Director, Head of Chemical Research Laboratories
2011 Became Director, Head of Advanced Materials & Planning
Department
2014 Became Executive Officer, Head of Electronic Materials
Research Laboratories
Became Executive Officer, Head of Materials ResearchLaboratories
2016 Became Managing Executive Officer, Head of Corporate
Planning Department
Became Director, Managing Executive Officer
Head of Corporate Planning Department (to the present)

Junichi Miyazaki (Director, Senior Executive Vice President)
1974 Joined The Industrial Bank of Japan, Limited (currently
Mizuho Bank, Ltd.)
2000 Became General Manager of International Departmentof The Industrial Bank of Japan, Limited (currently
Mizuho Bank, Ltd.)
2003 Became Corporate Auditor of Mizuho Corporate Bank,
Ltd. (currently Mizuho Bank, Ltd.)2005 Became Managing Executive Officer of Kowa Real
Estate Co., Ltd.
Became Managing Director of Kowa Real Estate Co.,Ltd.
2006 Joined the Company, Advisor
Became Director
2007 Became Director, Head of Corporate
Administration Department
2008 Became Managing Director
2011 Became Senior Managing Director
2013 Became Director, Senior Executive Vice President(to the present)

Hiroyoshi Fukuro (Director, Senior Executive Vice President)* Officers who were appointed at the close of the149th general meeting of shareholders held on
June 26, 2019.

43

Nissan Chemical Corporation Integrated Report 20191979 Joined the Company
2004 Became Director, Head of Electronic Materials
Research Laboratories
2011 Became Managing Director
2013 Became Senior Managing Director
2014 Became Director, Senior Managing Executive
Officer
2018 Became Director, Senior Executive Vice President(to the present)

Takashi Honda (Director, Managing Executive Officer)
1981 Joined the Company
2012 Became General Manager of Planning & Development Department,
Agricultural Chemicals Division2014 Became Executive Officer, Deputy Head of Agricultural Chemicals Division,
General Manager of Planning & Development Department, Agricultural
Chemicals Division2017 Became Managing Executive Officer, Head of Agricultural Chemicals Division
Became Director, Managing Executive Officer (to the present)

Hitoshi Suzuki (Director, Managing Executive Officer)
1985 Joined the Company
2007 Became General Manager of Semiconductor Materials Department,
Electronic Materials Division2010 Became General Manager of Semiconductor Materials Research
Department, Electronic Materials Research Laboratories
2012 Became General Manager of Semiconductor Materials Department,
Performance Materials Division2013 Became Deputy Head of Performance Materials Division
Became Director, Deputy Head of Performance Materials Division2014 Became Executive Officer,
Deputy Head of Performance Materials Division2016 Became Executive Officer, Head of Materials ResearchLaboratories
2018 Became Managing Executive Officer, Head of
Performance Materials Division
Became Director, Managing Executive Officer (to the present)

New

Hidehito Obayashi (Outside Director) Outside

Shuichi Takemoto (Outside Corporate Auditor) Outside

1981 Joined the Company
2001 Became General Manager of Toxicology & Environmental
Science Department, Biological Research Laboratories
2007 Became General Manager of Analysis Research
Department, Chemical Research Laboratories
2011 Became Head of Biological Research Laboratories
2013 Became Director, Head of Biological Research Laboratories
2014 Became Director, Executive Officer, Head of Research
Planning Department
Became Executive Officer, Head of Research Planning
Department
2016 Became Executive Officer, Head of Chemical ResearchLaboratories
2019 Became Corporate Auditor (to the present)

1969 Joined Hitachi, Ltd.
2001 Became Director of Hitachi High-Technologies
Corporation
2003 Became Vice President and Executive Officer ofHitachi High-Technologies Corporation
2006 Became Representative Executive Officer, Senior Vice
President and Executive Officer of Hitachi HighTechnologies Corporation2007 Became Director, Representative Executive Officer,
President and Chief Executive Officer of Hitachi HighTechnologies Corporation2011 Became Chairman of the Board of Hitachi HighTechnologies Corporation2013 Became Consultant of Hitachi High-Technologies
Corporation
2015 Became Honorary Consultant of Hitachi HighTechnologies Corporation (to the present)
2019 Became Outside Director of the Company (to thepresent)

1982 Joined The Fuji Bank, Limited
2002 Became Deputy General Manager, IT & Systems Control
Department of Mizuho Bank, Ltd.
2004 Became General Manager, Human Resources Division of Mizuho
Information & Research Institute, Inc.
2008 Became General Manager, Fukuoka Branch of Mizuho Bank, Ltd.
2009 Became General Manager, IT & Systems Planning Department ofMizuho Trust & Banking Co., Ltd.
2010 Became Executive Officer, IT & Systems Planning Department ofMizuho Trust & Banking Co., Ltd.
2011 Became Managing Executive Officer of Mizuho Trust & Banking
Co., Ltd.
2013 Became Managing Executive Officer of Mizuho Trust & Banking Co.,
Ltd., and Managing Executive Officer of Mizuho Financial Group, Inc.
2014 Became Deputy President of Mizuho Private Wealth Management
Co., Ltd.
2017 Became Advisor of Mizuho Trust & Banking Co., Ltd.
Became Outside Corporate Auditor of the Company (to the present)

Hiroshi Onitsuka (Corporate Auditor)

Tisato Kajiyama (Outside Director)

Outside1969 Took Post Doctor Course, The University of
Massachusetts Amherst, USA
1984 Became Professor of Faculty of Engineering at The
Kyushu University (currently National University
Corporation Kyushu University)
2001 Became President of The Kyushu University
2008 Became President of Independent Administrative Institution
Japan Student Services Organization2010 Became Outside Corporate Auditor of the Company
2011 Became Chairman, Board of Trustees and President of
Public University Corporation Fukuoka Women’s University(to the present)2014 Became Outside Director of the Company (to the present)

Tadashi Ohe (Outside Director)

Outside1969 Qualified for attorney-at-law
1989 Became Instructor for the Legal Training and ResearchInstitute of Japan (court representation in civil proceedings)
1994 Became Outside Corporate Auditor of Canon Inc.
2004 Became Outside Corporate Auditor of Marui Group Co.,
Ltd. (to the present)
2006 Became Outside Corporate Auditor of Kao Corporation2011 Became Outside Director, JECO Co., Ltd. (to the present)2015 Became Outside Director of the Company (to the present)

Norihiro Suzuki (Outside Corporate Auditor) Outside
1983 Joined The Norinchukin Bank
2003 Became General Manager of Naha Branch2008 Became General Manager of Cooperative Finance &Administration (Kanto Area) Div.
2010 Seconded to Eiraku Co., Ltd. as President (currently
Norinchukin Facilities Co., Ltd.)2012 Became Managing Director of The Norinchukin Bank
2014 Became Director of Nochu Business Support Co.,
Ltd., and Director of Nochu Information System
Co., Ltd.
2016 Became Outside Corporate Auditor of the Company(to the present)

Noriyuki Katayama (Outside Corporate Auditor) Outside
1990 Qualified for attorney-at-law,
Joined Nagashima & Ohno (currently Nagashima Ohno &Tsunematsu)
1996 Qualified for attorney-at-law in New York State, USA
Joined Tokyo City Law & Tax Partners
2003 Joined City-Yuwa Partners (to the present)
2004 Became Statutory Auditor of Deutsche Asset Management(Japan) Limited (to the present)
2005 Became Statutory Auditor (part-time) of Deutsche Securities
Junbi K.K. (currently Deutsche Securities Inc.)
2006 Became Outside Director of Accordia Golf co., Ltd.
2009 Became Visiting Professor of Toyo University Law School2013 Became Supervisory Director of SIA REIT, Inc. (currently One REIT, Inc.)
2014 Became Examiner for the preliminary bar examination
Became Outside Corporate Auditor of the Company (to thepresent)
2017 Became Supervisory Director of HEIWA REAL ESTATE REIT,
Inc. (to the present)2018 Became Outside Director of Nippon Denkai, Ltd. (to the present)
2019 Became Outside Corporate Auditor of Livesense Inc. (to the present)
Nissan Chemical Corporation Integrated Report 201944

Foundation for Future Creation

Corporate GovernanceCorporate Governance System
General Meeting of Shareholders

Accounting Auditor

Accounting
Audit

ReportNomination and Remuneration Advice
Advisory Committee(Business execution framework)

Audit

Audit & Supervisory Board

Board of Directors
Three out of the nine directors
are outside directors

President & CEO

Three out of the four auditors are outside corporate auditors
ReportReportCooperate

Management Meeting
CSR Committee

Internal Audit Department

Risk Management &Compliance Committee

Each division/department

Environment, Safety &Quality Assurance Committee

Group companies

Audit

Audit

* Includes number of corporate officers who were appointed at the close of the 149th general meeting of shareholders held on June 26, 2019.

Execution and supervision of operations
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 and executive
officer, thereby clarifying the management responsibility
and the responsibility for executing operations.
Board of Directors
Our board meets monthly in principle, to resolve
important management matters. It also supervises theexecution of operations by directors and executive

45

Nissan Chemical Corporation Integrated Report 2019

officers. We ensure that important management
matters are determined through careful deliberations
at the board meetings or management meetings in ourefforts to eliminate or reduce business risks. In addition,
the details of decisions made at the management
meetings and the results of business executions basedon decisions made at the board meetings, etc. arereported to the Board of Directors to enhance thesupervising function of the board meeting. We further
strive to ensure and improve effectiveness in executionof roles and responsibilities of the Board of Directors byconducting the effectiveness evaluation on the overall
Board of Directors every fiscal year.

Audit & Supervisory Board
We have established the Board of Corporate
Auditors. In accordance with auditing plans formulatedby the Board of Corporate Auditors, corporate
auditors audit the execution of directors’ operation by
participating in the board meetings and other important
meetings, and by regularly visiting each division/
department of the Head Office and plant/laboratory to
exchange 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 inrelation to matters such as the nomination andremuneration of Directors and further strengthening
corporate governance. In response to the Board of
Directors’ request for consultation, the Nomination andRemuneration Advisory Committee shall deliberatematters, such as appointment of candidates as
directors and corporate auditors and management
executives, succession plans for management
executives, and remuneration for directors, and report
the content of their deliberations to the Board of
Directors.

Accounting Audit
We have appointed the Yaesu Audit Company as our
accounting auditor. They audit at the end of each fiscal
year, and during the fiscal year as necessary.
Internal Audit
We have the Internal Audit Department, which
conducts fair and independent internal audits of ourGroup. The results of internal audits are reported to theRepresentative Director, President & CEO, managing
executive officers, and the Board of Directors. In addition,
the department shares information and opinions with thecorporate auditors, and collaborate with them.
Support for Outside Directors and Corporate Auditors
The Corporate Planning Department supports
outside directors by giving them prior explanationsof the contents of the agenda and other matters to
be discussed at the board meetings, and serves as acontact for inquiries. For outside corporate auditors, wehave appointed audit assistants in response to requests
from them. Audit assistants are employees who help
outside corporate auditors fulfill their duties efficiently
and smoothly. They serve as coordinators for holding
internal audits, Board of Corporate Auditors’ meetings,
and other meetings, help outside corporate auditors
conduct audits, and collect information to them.

Governance Structure*
Indicator

Scope of reporting

Unit

FY2015FY2016FY2017FY2018Inside directors

People67

76Outside directors(Independent)

People

2(2)

2(2)

2(2)

2(2)

Total

People8998Ratio of independent outside directors(Actual)

%

25

22

22

25

Ratio of independent outside directors(Target)

%

—

—

—

33

Ratio of female directors

%

0

0

0

0

Number of Executive Directors

People6

7

7

6Average terms of positions held

Year

7.1

6.2

5.1

6.5

Board meetings

Times

13

12

12

12

Attendance of directors at board meetings

%

98.0

100

99.1

100

Attendance of corporate auditors at board
meetings

%

96.2

100

100

97.9

Directors* Data is as of after the general meeting of shareholders held in June of each year.

Nissan Chemical Corporation Integrated Report 201946

Foundation for Future Creation

Corporate Governance

Policy and Procedures in the
Nomination of Officer Candidates
Decisions regarding the nomination of candidates for directors andcorporate auditors are made at board meetings attended by outside

directors and proposed at the general meeting of shareholders.
In addition, nominations of corporate auditor candidates areapproved by the Board of Corporate Auditors in advance.

Nominate Policy
Numberstipulated in Current
the Articles of number
Incorporation

PolicyNumber ofoutside officers
included in the
figure on the left

Directors

We operate business activities globally in diverse fields, including chemicals,
performance materials, agricultural chemicals, and pharmaceuticals. In
nominating candidates for our directors, we consider the balance between
knowledge, experience, capabilities, and other elements of the overall boardof directors and its diversity to ensure that our directors can make decisions
regarding the business activities in diverse fields, including chemicals,
performance materials, agricultural chemicals, and pharmaceuticals, andsupervise the execution of operations in an appropriate and flexible manner. The
candidates to be nominated shall also be physically and mentally healthy, haveexcellent personalities and aspirations, and have a high level of insight and ethics.
<Inside Directors>
Human resources who have expertise, knowledge and other capacities
in each business field such as corporate planning, personnel, finance &accounting, research and development, 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 growth strategies, the enhancement of governance and otherissues from the viewpoints of various stakeholders and society.

12

9

3(3)

Corporate
Auditors

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

5

4

3(2)

*1 The figure in ( ) indicates the number of directors/corporate auditors designated as independent officers.
*2 Includes the number of officers who were appointed at the close of the 149th general meeting of shareholders held on June 26, 2019.

Appointment of Outside Officer

OutsideDirectors

OutsideCorporate
AuditorsName

Reason for appointment

Tisato Kajiyama
Appointed in June
2014

Dr. Kajiyama has acquired as the President of Kyushu University, the President of the Independent
Administrative Institution Japan Student Services Organization and the President of Public University
Corporation Fukuoka Women’s University. We believe that he has reflected his broad range ofknowledge, experience and expertise as a doctor of engineering in our corporate management with
objective and neutral standing-point, and will continue to fulfill the duties appropriately.

Tadashi Ohe
Appointed in June2015

We believe that Mr. Ohe has reflected his extensive experience, including his experience of outside
director at several 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.

Hidehito Obayashi
Appointed in June2019

After having served as Director of Hitachi High-Technologies Corporation, Mr. Obayashi serves as
Honorary Consultant for the same company. As an executive of a corporate group that develops a varietyof businesses globally, we believe that his extensive experience and broad insight can be reflected in our
corporate management from an external perspective from an objective and neutral standing-point.

Norihiro Suzuki
Appointed in June
2016

Mr. Suzuki has a wide range of knowledge, including extensive experience and finance expertise
those are cultivated through many years of business at financial institutions. We believe that he hasreflected his knowledge in our corporate audit with objective and neutral standing-point, and willcontinue to fulfill the duties appropriately.

Shuichi Takemoto
Appointed in June
2017

Mr. Takemoto has a wide range of knowledge, including extensive experience and finance expertise
those are cultivated through many years of business at financial institutions. We believe that he hasreflected his knowledge in our corporate audit with objective and neutral standing-point, and willcontinue to fulfill the duties appropriately.

Noriyuki Katayama Mr. Katayama has an extensive experience including the experience of outside director/auditor at
Appointed in June several companies and expertise as attorney-at-law. We believe that he has reflected his knowledge
in our corporate audit and will continue to fulfill the duties appropriately.
2014

47

Nissan Chemical Corporation Integrated Report 2019

Officers’ Remuneration
The fundamental principle in officers’ remuneration is
to maintain its system that is in line with management
policy by ensuring that officers contribute to increasing
operating performance on a continual basis over themid- to long-term and toward increasing the overall valueof the Group, thereby meeting shareholder expectations.
At the same time, the basic policy is to set remuneration
at an appropriate level, taking into account such factors
as the management environment, operating performanceand consistency with the treatment of employees.
The remunerations of individual directors are
determined at the board meeting attended by outside
directors as well within the total amount determinedby resolution of the general meeting of shareholders.
The decision of the Board of Directors is made after
deliberation and reporting by the Nomination andRemuneration Advisory Committee. The remuneration ofindividual auditors are determined through discussions
by corporate auditors. Also, we introduced PerformanceLinked Stock Compensation in June 2019.
OfficerNumber of
officers

Remuneration

Directors

10317 million yen

Corporate Auditors

4

88 million yen

Total

14

405 million yen(includes outside
directors)(5)(80 million yen)

*1 Figures current as of June 2018.
*2 T he above number of officers and remuneration include remuneration
for two directors who retired at the close of the 148th general
meeting of shareholders held on June 27, 2018.
*3 T he remuneration limit for directors was determined to be within 45
million yen per month at the 139th general meeting of shareholders
held on June 25, 2009.
*4 T he remuneration limit for auditors was determined to be within 10
million yen per month at the 139th general meeting of shareholders
held on June 25, 2009.
*5 T here is no remuneration, etc. that outside officers are received fromour subsidiaries.

Effectiveness Evaluation of Boards

Evaluation Procedures
In FY2018, all directors were given questions toanswer in a questionnaire format. We requested
an external organization to collect and count thequestionnaires and self evaluations were enhanced
by ensuring anonymity. Based on the results, allindependent directors (two outside directors and one
outside corporate auditor), the President, the Vice
Presidents, the Director and Head of the Corporate
Planning Department, and one corporate auditor
analyzed and evaluated at the meeting of exchange ofideas. The results of the meeting were deliberated andsummarized at the board meeting.
Evaluation Results
As a result of the Effectiveness Evaluation for
FY2018, it was concluded that our Board of Directors
was generally operating appropriately overall fromthe perspective of carrying out its principle roles andresponsibilities, and that the effectiveness of the Boardof Directors was ensured as improvement measures
were taken with regard to issues identified in the
Effectiveness Evaluation for FY2017.
Future Initiatives
 xamination of the following utilizing the Nomination
1. E
and Remuneration Advisory Committee.
a) Create systems to appropriately reflect ourbusiness performance in the nomination andremuneration of Directors.
b) Formulate, implement, and discuss management
succession plans.
 onsideration of the creation of a system that allows
2. C
each director and corporate auditor to take sufficient
time to study by providing information in advanceand sharing information with directors and corporate
auditors to deepen deliberations on resolutions
within a limited time.
 or investment projects approved by the Board
3. F
of Directors, verification of the effectiveness of theinvestment on a regular basis and consideration ofcreating a system for reporting the results of theverification to the Board of Directors.

We annually analyze and evaluate whether the primaryroles and responsibilities of our Board of Directors are
fulfilled. In order to ensure the neutrality and objectivity ofthe executioner of the effectiveness evaluation, evaluationis conducted every few years by third-party that is not
related to the Company and interests. The most recent
evaluation by a third part was conducted in FY2017.

Nissan Chemical Corporation Integrated Report 201948

Foundation for Future Creation

Compliance

Since our Group regards compliance with laws
and social norms as a condition for the survival
and development of the company, our BasicCSR Policy stipulates that we need to conduct“sensible business activities” and conduct
ourselves as “good corporate citizens and decent
members of society”. In response, we recognizethat compliance means complying with laws andsocial norms, formulate compliance rules, andestablished a compliance basic policy.

Compliance Basic Policy
1. We consider compliance to be an importantmanagement issue and ensure thoroughcompliance in every aspect of its businessactivities, thereby establishing corporate
ethics.
2. A
 ll officers and employees of Nissan
Chemical Group shall be sufficiently awareof compliance and prevent the occurrenceof a compliance violation.
3. In the event that a compliance violation has
occurred or is likely to occur, we take aprompt and appropriate response.

SystemIn 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 maintainand promote compliance. The committee is chairedby the Chief Risk Management Officer (CRO), who isappointed at the board meeting, and is composedof the Risk & Compliance Managers of eachdivision/department, plant/laboratory, and domestic
consolidated subsidiary. The important matters related
to compliance and countermeasure plans, etc. areapproved at the board meeting after discussion by thecommittee.
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 education and guidance on risks
and compliance, the Risk Management & Compliance
Office receives reports on the status of compliance withlaws and regulations and the status of education andtraining in each department on a regular basis from Risk
& Compliance Managers, and shares information within
our Group.
In addition, we have established the Consultation
Hotline to serve as an internal reporting system toprevent compliance violation or resolve the problem
early on.

Number of Compliance Violations
Scope of reporting

Unit

2015

2016

2017

2018

Consolidated

Cases

1

0

0

3

Consolidated

Cases

0 (0)

0 (0)

0 (0)

0 (0)

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

Consolidated

1,000 yen

0

0

0

0

Indicator
Consultation Hotline Reports
Legal actions received for anti-monopoly/anticompetitive practices(under investigation)
Fines charged and settlement fees for anti-monopoly/
anticompetitive practices

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

49

Nissan Chemical Corporation Integrated Report 2019

Measures for Promoting Compliance (FY2018)
General Compliance

New employee training and overseas subsidiary compliance training
Compliance Manual revisions

Subcontracting Regulation

In-house training and internal audits related to the “Act against Delay in Payment of
Subcontract Proceeds, Etc. to Subcontractors”

Information Management

Internal audits

Consultation Hotline

Establishment of internal reporting rules (independent of compliance rules)
Continuous dissemination of related information via the in-house newsletter and posters

Anti-bribery

Formulation of a Group anti-bribery policy

Security Export Control

In-house training for the “Foreign Exchange Law”

OthersTraining for newly-appointed board members and training for board members
Legal training at plants and research laboratories

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 corporate auditors, and the means forreporting may be selected by e-mail, mail, or telephone.
Upon receipt of a report, the contents are reported tothe corporate auditors. While accepting anonymous
consultations, we have established a system thatallows us to provide peace of mind by clearly defining
in our rules the prohibition of interference withinvestigations, finding informants, and harassment.

Compliance Training
We hold training sessions on corporate ethics forofficers and employees, including new employee
training, in an effort to further raise awareness.
In order to acquire legal knowledge necessary
for business, various training activities pertaining to
the “Act against Delay in Payment of Subcontract
Proceeds, Etc. to Subcontractors”, insider trading
regulations, prohibition of bribery of foreign public
officials, etc. are held regularly. Not only officers andemployees of our Company but also those of affiliatedcompanies are targeted for these training activities,
and we work to improve their knowledge, including by
inviting lawyers as outside instructors, if necessary.
Compliance Manual
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.
In addition, by including information about theConsultation Hotline system and details about its
features in the Compliance Manual, we are raisingawareness about our internal reporting system.

Nissan Chemical Corporation Integrated Report 201950

Foundation for Future Creation

ComplianceApproach to Human Rights andAnti-Corruption
We joined the United Nations Global Compact(UNGC) in April 2018. In order to clarify our stancewhich supports the 10 principles advocated by UNGC
in four fields in human rights, labor, the environment
and anti-corruption, we will formulate new humanrights policy, which will also pertain to labor, and anticorruption policy, and continue to make efforts aimed
at all our stakeholders, including our employees.

Nissan Chemical Group Human Rights Policy

Nissan Chemical Group Anti-Corruption Policy(Excerpt)(Excerpt)

1

Respect for Human Rights

2

No Infringement of Human Rights

3

Employment and Labor

including bribery.

Prohibition of Forced Labor and Child Labor,“Bribery” means that, when company conducts

Good Labor-Management Relations, Fair andits businesses,

1“Corruption” means the abuse of entrusted
official authority for personal or company gain,

Equitable Remuneration, and Elimination ofany of its officers or employees provides
improper benefits to a third party for the

Discrimination4

purpose of inducing a third party to conduct

Remediation

fraudulent or illegal acts, or upon request

In the event that the Nissan Chemical Group

from a third party, or

causes or contributes to an adverse impact

any of its officers or employees demands oron human rights in the course of its businessreceives improper benefits from a third party.

activities, it shall make efforts to remedy andcorrect such impact through appropriate means.

Definitions

2

Commitment to Anti-Corruption

3Compliance with respect to Anti-Corruption“Unfair Competition Prevention Act”, the“U.S. Foreign Corrupt Practices Act” and the“Anti-Unfair Competition Law of the People's
Republic of China”

4Remediation
In the event that the Nissan Chemical Groupviolates this Policy in the course of its businessactivities, it shall make efforts to remedy andcorrect the said violation through appropriate
means and fully cooperate with investigations by
the relevant authorities.

51

Nissan Chemical Corporation Integrated Report 2019

Risk Management

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. W
 e consider risk management as animportant management issue, and engage
in the activities from a company-wide
perspective.
3. A
 ll officers and employees of the Group shallbe sufficiently aware of risk management,
strive to improve their abilities, and endeavor
to prevent the occurrence of loss risk.
4. We promptly share the information on risk
throughout the Group.
5. W
 e make efforts to respond promptly andaccurately to the occurrence of loss risk andto minimize losses.

SystemThe Risk Management & Compliance Office under the
Corporate Planning Department has been established
as a specialized organization to promote continuous
improvement in all of our risk management activities.
In addition, the Risk Management & Compliance
Committee, which is held twice a year, has been
established as an organization to enhance theeffectiveness of risk management, and to maintain andpromote compliance.
The committee is chaired by the Chief Risk
Management Officer (CRO), who is appointed at
the board meeting, and is composed of the Risk &Compliance Managers of each division/department,
plant/laboratory, and domestic consolidated subsidiary.
The Risk & Compliance Managers periodicallyconduct risk identification and assessment, formulate
countermeasure plans, conduct self-assessment
for status of implementation of the countermeasureplan and subject, formulate improvement plan, andregularly perform education and training at eachdivision/department, plant/laboratory and domestic
consolidated subsidiary.
The important matters related to risk management
and countermeasure plans, etc. are approved at theboard meeting after discussion by the committee.
Risk Management System
Board of Directors

Risk Management &Compliance Committee
CRO

Risk Management &Compliance Office, Corporate
Planning Department(Secretariat Office)

CSR Committee
Environment, Safety &Quality AssuranceCommittee

Risk & Compliance Manager(Each division & department, plant & laboratoryand domestic consolidated subsidiary)
ReportNissan Chemical Corporation Integrated Report 201952

Foundation for Future Creation

Risk Management

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 andimpact 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 meeting.
Risk Assessment (Risk Identification and Evaluation) ··· Overview
Creation of risk list (tentative)
and risk-related questionnaire■ Create risk list (tentative) after identifying

potential risks faced by the Nissan Chemical
Group

Implementation of survey

Aggregation/Analysis of survey results■ Conduct risk-related survey targeting risk

compliance staff at each department, location,
domestic consolidated subsidiary, and affiliate■ Aggregate the survey results and assess theGroup's risks based on degree of impact andprobability of occurrence■ Create risk-related questionnaire based on thelist

Identification of Major Group Risks■ Select Group Major Risks based on the risk

map and current conditions of the Group

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

results of executive interviews

Executive interview■ Have an interview with each executive about

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 meeting

SevereRisk Map (Excerpt)
Risk Category
Key Process Risk
Supportive Process Risk
Fire/Explosion

Earthquake/
TsunamiExternal Environmental Risk

Impact on the business

Management Process Risk
Quality
Defect/Recall

Failure of Supplier toComply with ESG

Delay or Discontinuance of Productand Technology Development

Advent ofInnovative Technology

Difficulty in Procurementof Specific Raw Material

Infringing or Being Infringedof Intellectual Property Rights

Failure to Complete Procedures forCancellation or Registration of License

Revision or Strengtheningof 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 Failure of
Facility and Machinery

Delay or Rejection of Approval
or Register of Product

Extreme Weather

Change in the Surroundingsof Business Partners

Delay in Human
Resource Development

Insufficient Governance ofOverseas Subsidiary and Base

Fluctuations in
Exchange

New Entrant/
Intensifying Competition

Violation of Human Rights(Sexual harassment and Power harassment)

Probability

53

Nissan Chemical Corporation Integrated Report 2019

Group Major Risk

SevereGroup Major Risks and Countermeasures
Group Major Risk

Summary of Risk

Countermeasures against risk

Delay or Discontinuance ofProduct and Technology
Development

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

Manage go/stop about research targets
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 the latest
technology information

Failure of the Business
Portfolio Strategy

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

Minimize risk by improving risk
assumptions when formulating strategies

Difficulty in Procurement ofSpecific Raw Material

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

Confirm procurement situation, discoverissues and implement countermeasurefor stable procurement

Revision or Strengthening 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 and decreasing
production volume due to direct onslaught on main plant by largescale typhoon

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

Earthquake/Tsunami

Risk of suspension of business activities and the death or
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 death or
injury of many employees, and being sued by neighborhood
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

Continue to implement “no recalls andno falsification cases” measure

Infringing or Being Infringedof Intellectual Property
RightsRisk of being subjected to a large amount of damages
and product injunction claims from other company due toinfringement 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 Group philosophy
and policies

Nissan Chemical Corporation Integrated Report 201954

Corporate Data

Financial Review

Financial Review of the Year Ended March 31, 2019
Overview

Operating Results

The domestic economy for the current consolidated

As a result, the Company’s results for the current

fiscal year (April 1, 2018 to March 31, 2019) continued

fiscal year were net sales 204,896 million yen (anto recover moderately as corporate earnings andincrease of 11,506 million yen), operating income

consumer spending improved. However, exports

37,091 million yen (an increase of 2,102 million yen)tended to decline in the second half of the fiscal year

and ordinary income 39,098 million yen (an increase

due to an economic slowdown in China, Europe,of 2,862 million yen), and net income attributable toand other countries. Under such circumstance, inowners of parent 29,372 million yen (an increase of

the Chemicals Segment, sales of Basic Chemicals

2,229 million yen). Operating and ordinary income

increased, while Fine Chemicals decreased. In thereached record highs for the fifth consecutive year andPerformance Materials Segment, Display Materials andnet income attributable to owners of parent for the

Semiconductor Materials business performed well.

sixth consecutive year.

In the Agricultural Chemicals Segment, shipments

ROE was 16.6% and we have achieved the Mid-of Fluralaner (active ingredients for veterinary

Term Plan target (maintain above 14%) for the threepharmaceuticals) increased. In the Pharmaceuticals

consecutive year.

Segment, sales of “LIVALO” (anti-cholesterol drug)

Dividend was 82 yen and dividend payout ratio

decreased.

became 41.5%. We have repurchased share of 9.0
billion yen and total payout ratio was 72%.

Operating Income (Millions of Yen)

Net Income per Share (Yen)37,09140,000Return on Equity

197.67

200

(%)
20

180.3035,00034,98831,43830,00025,00028,606150

143.37

14.6

15

16.6

15.1

12.7

25,34720,00016.1

156.97113.99

100

10

50

5

15,00010,0005,000
02014 2015 2016 2017 2018 (FY)02014 2015 2016 2017 2018 (FY)02014 2015 2016 2017 2018 (FY)

Equity Ratio (%)

55

Nissan Chemical Corporation Integrated Report 2019

Return on Equity (%)

provided by operating activities for the consolidated

Financial Position

fiscal year ended March 31, 2019 was 32,070 million

Total assets as of March 31, 2019 was 246,990

yen (37,691 million yen for the previous year).

million yen (an increase of 949 million yen from theDue to investment on plant and equipment, net cashprevious year). It is mainly due to an increase of notes
and accounts receivable-trade and merchandise andused in investing activities for the consolidated fiscal

finished goods.

year ended March 31, 2019 was 10,884 million yen(15,244 million yen for the previous year).

Total liabilities as of March 31, 2019 was 64,916

Due to share repurchase, payment for dividends andmillion yen (a decrease of 4,759 million yen). It is mainly

repayment of long-term loans payable, net cash used

due to a decrease of loans payable.

in financing activities for the consolidated fiscal year

Net assets as of March 31, 2019 was 182,074

ended March 31, 2019 was 22,563 million yen (20,268

million yen (an increase of 5,709 million yen).

million yen for the previous year).

As a result of these factors, equity ratio was 73.0%

As a result of these factors, cash and cash

(an increase of 2.0% from March 31, 2018).

equivalents for the consolidated fiscal year ended

Position of Cash Flow

March 31, 2019 was 36,183 million yen (37,702

Deducting income taxes paid from income

million yen for the previous year), reflecting exchange

before income taxes and non-controlling interests,of 141 million yen. It decreased by 1,518 million yen

depreciation and changes in working capital, net cash

compared to the previous year.

Dividend Payout Ratio

Total Payout Ratio(yen/share)
250

(%)
50

（％）
100

15,000

41.5
37.7

200
33.1

64

71

70

71

72

30.7

150

82

0

44

Dividend payout ratio (right axis)
Dividend (left axis)

8,889

10,913

9,938

20
5,000
25

52

2014 2015 2016 2017 2018 (FY)

10,510

10,245
9,684

7,500

68
36

9,796

8,452
50

50

10,00030

100

13,694

12,500

40
75

31.6

14,299

10

0

2,500

0

2014 2015 2016 2017 2018 (FY)02014 2015 2016 2017 2018 (FY)
Capital Expenditures (Millions of Yen)
Depreciation Expense (Millions of Yen)

Nissan Chemical Corporation Integrated Report 201956

Corporate Data

Financial ReviewC onsolidated Balance Sheets
For FY2018 and FY2017(Thousands of
U.S. dollars)(Millions of Yen)

Assets

FY2018FY2017FY2018¥ 36,183¥ 37,702$ 325,944

Notes and accounts receivable - trade69,19365,422

623,304

Merchandise and finished goods

32,21529,855

290,199

41

115

369

Raw materials and supplies

9,742

7,797

87,758

Accounts receivable - other

2,207

1,831

19,881

Short-term loans receivable

512

494

4,612

2,427

2,422

21,863Current assets
Cash and deposits

Work in process

Other
Allowance for doubtful accounts
Total current assets

(32)

(34)

(288)

152,490

145,606

1,373,660

65,942

63,985594,019(40,690)(39,573)(366,544)

Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation and impairment loss
Buildings and structures, net

25,251

24,411

227,466

Machinery, equipment and vehicles

130,490

125,451

1,175,480(117,523)(112,434)(1,058,670)

12,966

13,017

116,800

38,45837,323

346,437(34,385)(32,261)(309,747)

4,073

5,061

36,690

9,059

9,047

81,605－

22－

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

－

(22)

－

Leased assets, net

－

0

－

Construction in progress

1,378

2,936

12,413

Total property, plant and equipment

52,72954,473474,993

721

775

6,495

Intangible assets
Software
Other

796

993

7,171

1,517

1,768

13,665Investment securities

35,22938,517317,350

Deferred tax assets

110

132

991

Net defined benefit asset

2,089

2,193

18,818

Other

2,917

3,440

26,277

Allowance for doubtful accounts

(92)

(92)

(829)

Total investments and other assets

40,25344,191

362,607

Total intangible assets
Investments and other assets

Total non-current assets
Total assets

57

Nissan Chemical Corporation Integrated Report 2019

94,500100,433

851,275¥246,990¥246,040$2,224,935

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

Liabilities

FY2018FY2017FY2018Notes and accounts payable - trade¥17,809¥18,579$160,427

Short-term loans payable

23,60523,591

212,639

Current portion of long-term loans payable

1,860

2,554

16,755

Income taxes payable

4,330

5,156

39,005

Provision for bonuses

2,137

2,011

19,251

25

27

225

Other

10,43010,95093,955

Total current liabilities

60,19862,871

542,275

Long-term loans payable

1,116

2,446

10,053

Deferred tax liabilities

823

1,338

7,414

Provision for business structure improvement

370

516

3,333

Provision for loss on business of subsidiaries and affiliates

309

309

2,784

Net defined benefit liability

152

126

1,369

Other

1,945

2,068

17,521

Total non-current liabilities

4,717

6,804

42,49264,916

69,675584,776

Capital stock

18,942

18,942

170,633

Capital surplus

13,613

13,613

122,629

Retained earnings

143,200

133,822

1,289,974

Current liabilities

Provision for directors' bonuses

Non-current liabilities

Total liabilities

Net assets
Shareholders' equity

Treasury shares(6,291)(5,962)(56,671)

Total shareholders' equity

169,464

160,416

1,526,565

10,634

13,653

95,793Foreign currency translation adjustment

(11)

125

(99)

Remeasurements of defined benefit plans

258

390

2,324

10,88014,17098,009

1,728

1,778

15,566

182,074

176,364

1,640,159¥246,990¥246,040$2,224,935

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

Total Accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

Nissan Chemical Corporation Integrated Report 201958

Corporate Data

Financial Review

C onsolidated Statements of Income / Consolidated Statements of Comprehensive Income
For FY2018 and FY2017
Consolidated Statements of Income(Thousands of
U.S. dollars)(Millions of Yen)FY2018FY2017FY2018Net sales¥204,896¥193,389$1,845,744

Cost of sales

119,911

113,5131,080,182

Gross profit

84,98579,876

765,562

Selling, general and administrative expenses

47,89344,887431,430

Operating income

37,091

34,988334,123

Interest income

31

26

279

Dividend income

981

817

8,837

Non-operating income

Equity in earnings of affiliates

970

1,324

8,738

Other

1,142

768

10,287

Total non-operating income

3,126

2,937

28,160Interest expenses

110

126

991

Loss on disposal of non-current assets

630

591

5,675

Plant stop losses

249

270

2,243

Foreign exchange losses

24

460

216

Other

104

240

937

Non-operating expenses

Total non-operating expenses

1,119

1,690

10,08039,09836,235352,203

－

－

－

－

－

－

Income before income taxes and non-controlling interests

39,09836,235352,203

Income taxes - current

8,690

9,146

78,281

Ordinary income
Extraordinary income
Extraordinary losses

Income taxes - deferred

893

(214)

8,044

Total income taxes

9,583

8,932

86,326

Net income

29,51427,302

265,868

Net income attributable to non-controlling interests
Net income attributable to owners of parent

141

159

1,270

¥29,372¥27,142$264,589

Consolidated Statements of Comprehensive Income
Net income(Thousands of
U.S. dollars)(Millions of Yen)FY2018FY2017FY2018¥29,514¥27,302$265,868

Other comprehensive income
Valuation difference on available-for-sale securities(3,018)

3,575(27,187)

Foreign currency translation adjustment

(159)

(124)

(1,432)Remeasurements of defined benefit plans, net of tax

(132)

10

(1,189)

Share of other comprehensive income of affiliates accounted for using equity method

(0)

(1)

(0)

(3,311)

3,460(29,826)

26,20330,763

236,042

Owners of parent

26,08330,609234,961

Non-controlling interests¥¥$ 1,072

Total other comprehensive income
Comprehensive income(Comprehensive income attribute to)59

Nissan Chemical Corporation Integrated Report 2019

119

153

C
 onsolidated Statements of Changes in Net Assets
For FY2018(Millions of Yen)
Total shareholders' equity
Capital stock

Balance at beginning of current period¥18,942

Capital surplus

Retained earnings¥13,613¥133,822

Treasury shares(¥5,962)

Total shareholders'equity¥160,416

Changes of items during period
Dividends of surplus(11,320)(11,320)

Net income attributable to owners of parent

29,372

29,372

Share repurchase
Cancellation of treasury shares(9,004)(9,004)(8,674)

8,674－

Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period

－

－

9,377

(329)

9,048

¥18,942¥13,613¥143,200(¥6,291)¥169,464

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Balance at beginning of current period¥13,653

Foreign currencytranslation
adjustment¥125

Remeasurementsof defined benefit
plans

¥390

Total
accumulated
othercomprehensive
income¥14,170

Non-controllinginterests¥1,778Total
net assets¥176,364

Changes of items during period
Dividends of surplus(11,320)

Net income attributable to owners of parent

29,372

Share repurchase(9,004)

Cancellation of treasury shares
Net changes of items other than shareholders' equity－(3,019)

(137)

(132)

(3,289)(49)(3,338)

Total changes of items during period(3,019)

(137)

(132)

(3,289)

(49)

5,709

Balance at end of current period¥10,634

(¥11)

¥258

¥10,880¥1,728¥182,074

Nissan Chemical Corporation Integrated Report 201960

Corporate Data

Financial ReviewC onsolidated Statements of Changes in Net Assets
For FY2017(Millions of Yen)

Total shareholders' equity
Capital stock

Balance at beginning of current period

Capital surplus¥18,942

Retained earnings¥13,611¥126,370

Treasury shares(¥7,587)

Total shareholders'equity¥151,337

Changes of items during period
Dividends of surplus(9,063)(9,063)

Net income attributable to owners of parent

27,142

27,142

Share repurchase
Cancellation of treasury shares(10,627) hange in ownership interest of parent due to transactions withC
non-controlling interests(9,002)(9,002)

10,627－2

2

Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period

－

2

7,452

1,624

9,078

¥18,942¥13,613¥133,822(¥5,962)¥160,416

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Balance at beginning of current period¥10,079

Foreign currencytranslation
adjustment¥243

Remeasurementsof defined benefit
plans

¥380

Total
accumulated
othercomprehensive
income¥10,703

Non-controllinginterests¥1,666Total
net assets¥163,707

Changes of items during period
Dividends of surplus(9,063)

Net income attributable to owners of parent

27,142

Share repurchase(9,002)

Cancellation of treasury shares－

Change in ownership interest of parent due totransactions with non-controlling interests

2

Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period

61

Nissan Chemical Corporation Integrated Report 2019

3,574

(118)

10

3,466

111

3,578

3,574

(118)

10

3,466

111

12,657¥13,653

¥125

¥390

¥14,170¥1,778¥176,364

For FY2018(Thousands of
U.S. dollars)
Total shareholders' equity
Capital stock

Balance at beginning of current period$170,633

Capital surplus

Retained earnings$122,629$1,205,495

Treasury shares($53,707)

Total shareholders'equity$1,445,059

Changes of items during period
Dividends of surplus(101,973)(101,973)

Net income attributable to owners of parent

264,589

264,589

Share repurchase
Cancellation of treasury shares(81,110)(81,110)(78,137)

78,137－

Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period－－

84,470(2,964)81,506$170,633$122,629$1,289,974($56,671)$1,526,565

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Balance at beginning of current period$122,989

Foreign currencytranslation
adjustment$1,126

Remeasurementsof defined benefit
plans$3,513

Total
accumulated
othercomprehensive
income$127,646

Non-controllinginterests$16,017

Total
net assets$1,588,722

Changes of items during period
Dividends of surplus(101,973)

Net income attributable to owners of parent

264,589

Share repurchase(81,110)Cancellation of treasury shares
Net changes of items other than shareholders' equity－(27,196)(1,234)(1,189)(29,628)(441)(30,069)

Total changes of items during period(27,196)(1,234)(1,189)(29,628)(441)

51,428

Balance at end of current period$95,793($99)$2,324$98,009$15,566$1,640,159

Nissan Chemical Corporation Integrated Report 201962

Corporate Data

Financial ReviewC onsolidated Statements of Cash FlowsFor FY2018 and FY2017(Thousands of
U.S. dollars)(Millions of Yen)FY2018FY2017FY2018

Income before income taxes and non-controlling interests¥39,098¥36,235$352,203

Depreciation and amortization

10,915

10,51098,324

Interest and dividend income

Cash flows from operating activities(1,013)(844)(9,125)Interest expenses

110

126

991

Loss (gain) on disposal of non-current assets

630

591

5,675

Decrease (increase) in notes and accounts receivable - trade(3,877)(5,266)(34,925)

Decrease (increase) in inventories(4,304)(1,309)(38,771)

(671)

3,494

(6,045)

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

(913)

(328)

(8,224)

Subtotal

39,974

43,209360,094

Interest and dividend income received

1,633

1,881

14,710Interest expenses paid

(111)

(125)

(1,000)

Income taxes paid

(9,426)(7,273)(84,911)

Net cash provided by (used in) operating activities

32,07037,691

288,893

Purchase of investment securities

(910)

(759)

(8,197)

Proceeds from sales of investment securities

450

65

4,054

Purchase of property, plant and equipment

Cash flows from investing activities(9,747)(13,768)(87,803)

Payments for retirement of property, plant and equipment

(525)

(405)

(4,729)Purchase of intangible assets(1,730)

(192)

(585)

Net decrease (increase) in short-term loans receivable

(2)

546

(18)

Purchase of long-term prepaid expenses

(46)

(67)

(414)

Other

90

(270)

811

(10,884)(15,244)(98,045)

(46)

501

(414)

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

530

420

4,774

Repayments of long-term loans payable(2,554)(3,070)(23,007)

Cash dividends paid

(11,320)(9,063)(101,973)

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

63

(167)

(39)

(1,504)(9,004)(9,002)(81,110)

(0)

(14)

(0)

(22,563)(20,268)(203,252)

(141)

(177)

(1,270)(1,518)2,000(13,674)

Cash and cash equivalents at the beginning of period

37,70235,701

339,627

Cash and cash equivalents at end of period¥36,183¥37,702$325,944

Nissan Chemical Corporation Integrated Report 2019N otes to Consolidated Financial Statements
1. Basis for presenting Consolidated Financial Statements
The accompanying consolidated financial statements have been preparedin accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Act, the related accounting regulations, and theaccounting principles generally accepted in Japan (“J-GAAP”), which differ
in certain aspects from the application and disclosure requirements of theaccounting principles generally accepted in the United States of America(“US-GAAP”) and International Financial Reporting Standards (“IFRS”).
In preparing these consolidated financial statements, certain
reclassification and rearrangements have been made to the consolidated
financial statements issued in Japan in order to present them in a form thatis more familiar to readers in other countries.
2. Summary of Significant Accounting Policies
a. Consolidation
The consolidated financial statements as of March 31, 2019 include theaccount of Nissan Chemical Corporation. (the “Company”) and its eight main(eight in FY2017) subsidiaries (together, the “Companies”). The Company
does not consolidate other subsidiaries due to their immateriality in terms of
consolidated total assets, net sales, net income, and retained earnings.
Under the control or influence concept, those companies in which
the Company, either directly or indirectly, is able to exercise control over
operations are fully consolidated. Those companies over which the Company
has the ability to exercise significant influence are accounted for by theequity method.
Investments in two affiliated companies (two in FY2017) are accounted forby the equity method.
The assets and liabilities of the newly consolidated subsidiaries are stated
at fair value as of the respective dates on which they were acquired.
All significant inter-company balances and transactions have been
eliminated in consolidation.
All material unrealized profits included in assets resulting fromtransactions within the Companies are eliminated.
b. Securities
The Company’s marketable securities are reported at fair value. Unrealized
holding gains and losses, net of the related tax effect, on marketablesecurities are excluded from earnings. Instead, they are reported as aseparate component of other comprehensive income until realized. Realized
gains and losses for securities are included in earnings, and are derived
using the moving average method for determining the cost of securities sold.
Non-marketable securities in companies over which the Company isincapable of exercising significant influence are stated at cost and reviewed
periodically for impairment.

c. Inventories
Inventories are stated at the lower of cost or net realizable value. The costis determined by the average method.
d. P roperty, Plant and Equipment (excluding Leased Assets)
Property, plant and equipment are stated at cost. In general, thedepreciation of property, plant and equipment is computed by the decliningbalance method over the estimated useful lives of these assets.
The estimated useful life ranges are two years to fifty years for buildings
and structures, and two years to twelve years for machinery and equipment.
e. Goodwill and other Intangible Assets
Goodwill is amortized by the straight-line method within 20 years. Other
intangible assets are also amortized the using straight-line method.
The most typical intangible asset is Software, and its useful life is five
years.
f. Leased Assets
Leased assets arising from finance lease transactions which do nottransfer ownership to the lessee are depreciated to a residual value of zeroby the straight-line method, using the contract term as the useful life.
g. Allowance for Doubtful Accounts
Allowance for doubtful accounts is the Companies’ best estimate forthe amount of probable credit losses in the Companies’ existing tradereceivables.
An additional reserve for individual receivable is recorded when the
Company become aware of a customer’s inability to meet its financial
obligations, such as when a customer files for bankruptcy or when the its
operating results or financial position deteriorates.
If the customer’s circumstances change, estimates of the recoverability ofreceivables are further adjusted.
h. Provision for Bonuses
The Companies provide accrued bonuses for employees based on theestimated amounts to be paid for the fiscal year.
i. Provision for Directors’ Bonuses
The Companies provide accrued bonuses for members of the Board of
Directors based on the estimated amounts to be paid for the fiscal year.
j. Provision for Business Structure Improvement
The Company provides a reserve at the estimated amount to cover
the expenses and losses to be incurred in association with structural
improvement.
k. Provision for Loss on Business of Subsidiaries and Affiliates
The Company provides a reserve at the estimated amount to cover thelosses on business of subsidiaries and affiliates in consideration of theirfinancial position.

Nissan Chemical Corporation Integrated Report 201964

Corporate Datal. Provision for Retirement Benefits
The Company has a defined benefit plan and a retirement plan that
substantially covers all of its employees.
The method for calculating the estimated amount of all retirement benefits
to be paid at future retirement dates is based on the benefit formula.
Actuarial gains and losses are primarily amortized using the decliningbalance method over the average of the estimated remaining service years(16 years) commencing from the period which the gains and losses occurred.
Certain consolidated subsidiaries use a simplified method for calculating
retirement benefits.
In this method, the retirement benefit obligation is the same amount as thenecessary payment related to retirement benefits.
m. Translation of Foreign Currency
The assets and liabilities of the Company’s subsidiaries located outside
Japan are translated into Japanese yen at the exchange rate in effect on
the balance sheet date. Revenue and expense items are translated at theprevailing average exchange rates for the year. Gains and losses resulting
from foreign currency transactions are included in other income (deductions),
and those resulting from the translation of financial statements are excluded
from the statements of income. Instead, they are accumulated in net assets
as a component of accumulated other comprehensive income (loss).
n. Derivatives and Hedge Accounting
The Company enters into interest rate swap contracts to hedge the risk ofchanges in interest rates over borrowings.
Derivatives are carried at fair value with all changes in unrealized gains
and losses charged to income, except for those which meet the criteria fordeferral hedge accounting under which unrealized gains or losses, net of theapplicable income taxes, are reported as components of accumulated othercomprehensive income (loss).
If interest rates swap contracts meet certain criteria, the net amount to be
paid or received under the interest rate swap contract is added to or deductedfrom the interest on the assets or liabilities for which the swap contract is
executed.
o. Cash and Cash Equivalent
The Companies consider cash equivalents include all highly fluid
investments, which have been purchased with original maturities of threemonths or less.
3. U.S. dollar Amounts
The accompanying consolidated financial statements are expressed inJapanese yen as of and for the year ended March 31, 2019 after being
converted from the currency of the country in which the Company operates. The
translation of Japanese yen amounts to United States dollar amounts is included
solely for the convenience of the readers outside Japan, and has been madeat the rate of ¥111.01 to US $1, which is the approximate closing exchange
rate reported by the Tokyo Foreign Exchange Market on March 31, 2019. Thistranslation should not be construed to indicate that the Japanese yen amounts
shown can be converted to United States dollars at the above rate.

65

Nissan Chemical Corporation Integrated Report 2019

Financial Review

4. Unapplied Accounting Standards
Accounting Standards Board of Japan released “Accounting Standard for
Revenue Recognition” and “Implementation Guidance on Accounting Standard
for Revenue Recognition” on March 30, 2018.
The above standard and guidance are scheduled to be applied in the fiscal
year ending in March 31, 2022.
The impact on consolidated financial statements is under evaluation as
well.
5. Reclassifications
The company has applied “Partial Amendments to Accounting Standard forTax Effect Accounting” (Statement No.28 issued by the Accounting Standards
Board of Japan on February 16, 2018) from the beginning of the current
financial year.
Accordingly, “deferred tax assets” and “deferred tax liabilities” arereclassified and included in the “investments and other assets” section andthe “non-current liabilities” section, respectively.
As a result, 3,019 million yen of “deferred tax assets (current assets)”and 2,887 million yen of “deferred tax liabilities (non-current liabilities)”
are reclassified as 132 million yen of “deferred tax assets” classified as“investments and other assets”.
In addition, 115 million yen of “deferred tax assets (investments andother assets)” and 1,454 million yen of “deferred tax liabilities (non-current
liabilities” are reclassified as 1,338 million yen of “deferred tax liabilities”
classified as “non-current liabilities)”.
6. Collateral Assets and Liabilities
Collateral assets and liabilities as of FY2018 and FY2017 were as follows:(Thousands of
U.S. dollars)(Millions of Yen)FY2018FY2017FY2018Investment securities

¥142

¥122

$1,279Accounts payable

¥369

¥340

$3,324

7. Research and Development Expenses
Research and development expenses included in selling, general andadministrative expenses for FY2018 and FY2017 were as follows:(Millions of Yen)FY2018¥17,751

FY2017¥17,228(Thousands of
U.S. dollars)
FY2018$159,905

8. Comprehensive Income(Thousands of
U.S. dollars)(Millions of Yen)FY2018FY2018FY2017

Valuation difference on available-for-sale securities:
Gains (losses) arising during the year(¥4,054)¥5,200($36,519)

Reclassification adjustment

(296)

(29)

(2,666)

Amount before tax effect(4,350)(5,170)(39,186)

Tax effect1,332(1,595)

11,999V aluation difference on available-forsale securities, net of tax(3,018)

3,575(27,187)

(159)

(124)

(1,432)

Reclassification adjustment

－

－

－

Amount before tax effect

(159)

(124)

(1,432)－－－Foreign currency translation adjustment:
Gains (losses) arising during the year

Tax effectF oreign currency translation
adjustment, net of tax

(159)

(124)

(1,432)Remeasurements of defined benefit plans:
Gains (losses) arising during the year

(114)

88

Reclassification adjustment

(75)

(73)

(676)

Amount before tax effect

(190)

15

(1,712)

57

(4)

513

(132)

10

(1,189)Tax effectR emeasurements of defined benefit
plans, net of tax

Total other comprehensive income

10. Investment securities

(0)

(1)

(0)

(¥3,311)¥3,460($29,826)

9. Common Shares(1) Dividends
Cash dividends charged to retained earnings for the years ended March
31, 2019 and 2018 represent the dividends paid out during those years.
The accompanying consolidated financial statements do not include any
provisions for a dividend approved by the Annual Shareholders Meeting of 42
yen per share with an aggregate 6,206 million yen for the year ended March
31, 2019.

(Thousands of
U.S. dollars)(Millions of Yen)FY2018FY2017FY2018¥25,620¥30,022$230,790

Unlisted securities of affiliates

7,118

6,812

64,120Unlisted securities

2,490

1,682

22,430¥35,229¥38,517$317,350

Equity securities(1,027)

Share of other comprehensive income of affiliates accounted for using
equity methods:

Gains (losses) arising during the year

(2) Retained Earnings
Retained earnings on a consolidated basis consist of legal reserve andretained earnings. In accordance with provisions of the Companies Act ofJapan, the Company has provided a legal reserve as an appropriation ofretained earnings. The Code states that while neither legal capital surplus
nor legal retained earnings are available for dividends, both may be used toreduce or eliminate a deficit by a resolution of the shareholders’ meeting,or may be transferred to stated capital common stock by a resolution of theBoard of Directors. Legal reserve in the accompanying consolidated financial
statement includes only that of the Company. Retained earnings of theCompany and its consolidated subsidiaries include a certain special reserve
for the purpose of obtaining tax benefits in accordance with the Special
Taxation Law of Japan.

11. Short-term Debt and Long-term Debt
Short-term debt consisting of an unsecured bank overdraft as of March 31,
2019 was 23,605 million yen.
The weighted average interest rate on short-term debt outstanding as ofMarch 31, 2019 was 0.75%.
The weighted average interest rate on long-term debt outstanding as ofMarch 31, 2019 was 0.56%.
The weighted average interest rate on the current portion of long-term debt
outstanding as of March 31, 2019 was 0.81%.
Long-term debt as of FY2018 and FY2017 were as follows:(Thousands of
U.S. dollars)(Millions of Yen)FY2018Long-term debt

¥2,976

Less current portion

FY2018FY2017¥5,000$26,808(1,860)(2,554)(16,755)¥1,116¥2,446$10,053

Long-term debt payments due after FY2019 were as follows:Year ending March 31(Thousands of
U.S. dollars)(Millions of Yen)FY2020¥520$4,684FY2021300

2,702

FY2022190

1,712

FY2023 and thereafter

106

955

¥1,116$10,053

Nissan Chemical Corporation Integrated Report 201966

Corporate Data

Financial Review

12. Retirement Benefits(1) The liability for retirement benefits as of FY2018 and FY2017 were as
follows:(Thousands of
U.S. dollars)(Millions of Yen)FY2018FY2017FY2018Retirement benefit obligation¥12,571¥12,156$113,242

Plan asset(14,661)(14,349)(132,069)(2,089)(2,193)(18,818)

152

126

1,369

(1,936)(2,067)(17,440)

152

126

1,369

Unfunded retirement benefit
obligation
Net retirement benefit obligation
Net defined benefit liability

13. Income Taxes
The Company is subject to a number of taxes based on income. The
statutory income tax rates were approximately 30.62% for the year ended
March 31,2019 and 30.86% for the year ended March 31, 2018.
The tax effects on significant temporary differences which resulted indeferred tax assets and liabilities as of FY2018 and FY2017 were as follows:

FY2018¥716¥672$6,450

Provision for bonuses

660

620

5,945

Prepaid consignment research expenses

585

541

5,270

433

407

3,901

－

1,124

－

Other

2,617

2,555

23,574Gross deferred tax assets

5,014

5,921

45,167

Less: Valuation allowance

(39)

(49)

(351)

Total deferred tax assets

4,975

5,871

44,816

Unrealized gain on securities(4,832)(6,107)(43,528)

Net defined benefit asset

(594)

(645)

(5,351)R eserve for advanced depreciation of
non-current assets

(260)

(268)

(2,342)

(1)

(57)

(9)

Total deferred tax liabilities(5,688)(7,078)(51,239)

Net deferred tax assets(¥712) (¥1,206)($6,414)(2,089)(2,193)(18,818)

Net retirement benefit obligation(¥1,936)(¥2,067)($17,440)T ax effect on investment in subsidiary
to be liquidated

FY2017

Discount rate

0.8%

0.8%

Long-term expected rate of return

2.0%

2.0%

3.6 to 9.0%

3.6 to 9.0%

E xpected rate of salary increase(forecast)(Note) Expected rate of salary increase is calculated based on our point system.

FY2018Inventory

Net defined benefit asset

FY2018FY2017

Deferred tax assets:

Unrealized gain on inventories(2) Actuarial assumptions
The principal actuarial assumptions as of FY2018 and FY2017 were as
follows:(Thousands of
U.S. dollars)(Millions of Yen)

Deferred tax liabilities:

Other

The differences between the statutory tax rate and the effective tax rate
for the years ended FY2018 and FY2017 were as follows:
FY2018

Statutory tax rate

FY201730.62%

30.86%(Reconciliation)
Elimination of intercompany dividend income

2.32%

2.51%

E ntertainment and other permanently non-deductible
expense

0.38

0.41

 ifference of tax rate for foreign consolidatedD
subsidiaries(0.50)(0.47)

Equity in earnings of affiliates(0.76)(1.13)

 ividend and other items excluded permanently fromD
taxable income(2.42)(2.64)Tax credit(5.00)(5.26)

Other, net
Effective tax rate

67

Nissan Chemical Corporation Integrated Report 2019(0.14)

0.37

24.51%

24.65%

14. Segment Information(1) General Information about reportable segments
In regard to reportable segments, the Company is able to obtain discrete financial data from its component units.
Accordingly, its segments are subject to regular review to help the Board of Directors decide how to allocate managerial resources and evaluate businessperformance.
Divisions by products and services are located at headquarters. Each division works out a comprehensive strategy applicable to their products and services
and carries out their business activities.
The Company consists of segments based on the following divisions:
Segment
Chemicals

Performance Materials

Agricultural Chemicals
Pharmaceuticals
Trading
OthersMain Products
Basic chemicals (melamine, sulfuric acid, nitric acid, ammonia, etc.)
Fine chemicals (epoxy compound for LED sealants, solder resist and painting, flame retardants, chlorinated cyanuric acid forsterilizing, etc.)
Display materials (LCD alignment coating, etc.)
Semiconductor materials (bottom anti-reflective coating for semiconductors, etc.)
Inorganic materials (hard coating materials, electronic information materials, polishing materials, etc.)
Agrochemicals (herbicides, insecticides, fungicides, combination fungicide and insecticide, and plant growth regulators)
Animal health products
LIVALO® (anti-cholesterol drugs), etc.
Finetech® (custom chemicals and process researching services for pharmaceutical companies)
Trading, etc.
Transportation, landscaping, engineering, fertilizer, etc.

(2) Basis for the measurement of reported segment income or loss, segment assets, and other material items
The accounting policies for the reportable segments are consistent with the Company’s accounting policies used in the preparation of its consolidated
financial statements.
Intersegment sales and income (loss) are recognized based on current market prices.
(3) Information on sales, income (loss), assets, and other item amounts by reportable segment
Millions of Yen
FY2017

Performance
Materials

Chemicals

Agricultural
Chemicals

Pharmaceuticals

Trading

Adjustment(Note)

OthersConsolidated
Total

Net sales
Sales to outside customers¥25,546¥51,973¥54,262¥7,493¥44,474¥ 9,638

－

9,390

6,789

3,876

26

15,012

11,822(46,917)－

Total sales

34,93758,762

58,1387,520

59,486

21,461(46,917)

193,389

Segment income (loss)

3,410

14,20016,370

1,233

1,826

612

(2,665)34,988Segment assets

26,97652,88856,6209,118

23,261

9,588

67,585

246,040

1,733

5,925

1,416

713

52

319

347

10,508

1

－

－

－

－

－

－

1

¥ 2,594¥ 7,209¥ 2,541

¥ 679

341

¥ 13,694Intersegment sales¥193,389

Other items
Depreciation and amortization
Amortization of goodwillIncrease of property, plant and equipment,
and intangible assets

¥

23

¥

304

¥

Notes: The adjustments are as follows:(1) The (2,665) million yen adjustment in segment income includes (254) million yen in intersegment eliminations, and (2,410) million yen corporate expenses not
attributable to any reportable segment. The corporate expenses are mainly group administrative expenses which do not belong to segments.
(2) The 67,585 million yen adjustment in segment assets includes (8,200) million yen in intersegment eliminations and 75,786 million yen in corporate assets not
attributable to any reportable segment. The corporate assets are mainly group administrative assets which do not belong to segments.
(3) The 347 million yen adjustment in depreciation and amortization is corporate expenses.
(4) The 341 million yen adjustment in increase of property, plant and equipment and intangible assets is corporate assets. The corporate assets are mainly group
administrative assets which do not belong to segments.

Nissan Chemical Corporation Integrated Report 201968

Corporate Data

Financial Review

Millions of Yen
FY2018Performance
Materials

Chemicals

Agricultural
Chemicals

Pharmaceuticals

Trading

Adjustment(Note)

OthersConsolidated
Total

Net sales
Sales to outside customers¥25,991¥55,655¥57,513¥6,968¥48,562¥10,188

9,660

7,376

5,211

40

19,317

14,421(56,028)－

35,651

63,03162,724

7,009

67,88024,610(56,011)

204,896

Segment income (loss)

3,046

14,966

18,351

1,000

2,037

923

(3,234)37,091

Segment assets

28,66951,256

61,818

9,063

25,507

11,47959,196

246,990

1,805

6,059

1,680

645

49

322

350

10,913

1

－

－

－

－

－

－

1

¥ 2,021¥ 3,246¥ 3,326

¥ 502

280

¥ 9,938

Intersegment sales
Total sales¥

16¥204,896

Other items
Depreciation and amortization
Amortization of goodwill
Increase of property, plant andequipment, and intangible assets

¥

122

¥

438

¥

Notes: The adjustments are as follows:(1) The (3,234) million yen adjustment in segment income includes (405) million yen in intersegment eliminations, 16 million yen sales not attributable to any reporting segment, and (2,845) million yen
corporate expenses not attributable to any reportable segment.
The corporate expenses are mainly group administrative expenses which do not belong to segments.
(2) The 59,196 million yen adjustment in segment assets includes (11,968) million yen in intersegment eliminations and 71,165 million yen in corporate assets not attributable to any reportable segment.
The corporate assets are mainly group administrative assets which do not belong to segments.
(3) The 350 million yen adjustment in depreciation and amortization is corporate expenses.
(4) The 280 million yen adjustment in increase of property, plant and equipment and intangible assets is corporate assets. The corporate assets are mainly group administrative assets which do not belong tosegments.
Thousands of U.S. dollars
FY2018Performance
Materials

Chemicals

Agricultural
Chemicals

Pharmaceuticals

Trading

OthersAdjustment(Note)

Consolidated
Total

Net sales
Sales to outside customers$234,132$501,351$518,088$62,769$437,456$ 91,776$

87,01966,44446,942360

174,011

129,907(504,711)－

321,151

567,796

565,030

63,138611,476

221,692(504,558)

1,845,744

Segment income (loss)

27,439134,817

165,309

9,008

18,3508,315(29,133)

334,123

Segment assets

258,256

461,724

556,869

81,641

229,772

103,405

533,249

2,224,935

16,26054,581

15,134

5,810

441

2,901

3,153

98,306

9

－

－

－

－

－

－

9

$ 18,206$ 29,241$ 29,961$ 4,522$ 1,099$ 3,946$ 2,522

Intersegment sales
Total sales

144$1,845,744

Other items
Depreciation and amortization
Amortization of goodwill
Increase of property, plant
andequipment, and intangible assets

Overseas operations, which represent sales to customers outside Japan for FY2018 and FY2017 were as follows:
Millions of Yen
FY2017
Net salesJapan¥104,523

Korea¥20,218

Europe and theUnited States¥ 29,308

Consolidated
Total¥ 193,389

Europe and theUnited States¥ 32,068

Consolidated
Total¥ 204,896

Thousands of U.S. dollars
Europe and the
Other Asia
United States$390,541$288,875

Consolidated
Total$1,845,744

Other Asia
¥ 39,339
Millions of Yen

FY2018Net sales

FY2018Net salesJapan¥107,131

Korea¥22,341Japan$965,057

Korea$201,252

Other Asia
¥ 43,354

15. Amounts per Share
Net income per share is based on the weighted average number of shares of common stock outstanding during the year.
Cash dividends per share attributable to the period represent dividends declared as applicable to the year.
Amounts per share of net income and cash dividends for FY2018 and FY2017 were as follows:(Yen)
FY2018

69(U.S. dollars)
FY2017FY2018Net income¥197.67¥180.30$1.78

Cash dividends¥ 82.00¥ 68.00$0.74

Nissan Chemical Corporation Integrated Report 2019$89,523

I ndependent Auditor’s Report

Nissan Chemical Corporation Integrated Report 201970

Corporate Data

Corporate Information

Domestic Bases
Nagoya Plant

Toyama Plant

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

This plant is located in the center of
Toyama Plain. Here we manufacture
various groups of products, suchas 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.

71

Nissan Chemical Corporation Integrated Report 2019

Saitama Plant

Sodegaura Plant

This plant is located in northern
Saitama. Here we manufacture
agricultural formulations.

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

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

Sendai Sales Office

Maruito Sapporo Building 1-1, Kita-Nijyo-Nishi,
Chuo-ku, Sapporo 060-0002
Tel: +81-11-251-0261

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, Nakamuraku, Nagoya 453-0801
Tel: +81-52-452-8623

Fukuoka Sales OfficeOsaka Daiichi Seimei Building 1-8-17, Umeda, Kita-ku, Osaka
530-0001
Tel: +81-6-6346-7200

JPR 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

Saitama Plant

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

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

Nagoya Plant

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

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

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

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

Group Companies
Japan
Nissei Corporation
1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: +81-3-3241-2548
 Sales of chemical products and insurance, and real estatebusiness

Nissan Green & Landscape Co., Ltd.
3-16-9, Uchikanda, Chiyoda-ku, Tokyo 101-0047
Tel: +81-3-3526-4031
 Landscaping and civil engineering

Nihon Hiryo Co., Ltd.
1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: +81-3-3241-4231
 Fertilizers and agrochemicals

Sun Agro Co., Ltd.
1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: +81-3-3510-3601
 Fertilizers and agrochemicals

Nissan Butsuryu Co., Ltd.
1-10-5, Nihonbashihon-cho, Chuo-ku,
Tokyo 103-0023
Tel: +81-3-5255-6901
 Transportation

Nissan Engineering, Ltd.
634-1, Sasakura, Fuchu-machi, Toyama 939-2753
Tel: +81-76-465-5711
 Plant engineering services

Environmental Technical Laboratories, Ltd.
2-11-17, Kohoku, Adachi-ku, Tokyo 123-0872
Tel: +81-3-3898-6643
 Environmental analysis

Clariant Catalysts (Japan) K.K.
2-28-8, Honkomagome, Bunkyo-ku, Tokyo 113-0021
Tel: +81-3-5977-7300
 Catalysts for petrochemical and petroleum products

HOKKAIDO SUN AGRO CO., LTD.
9-23, Kitahama-cho, Hakodate, Hokkaido, 040-0078
Tel: +81-138-41-1251
 Agrochemicals

Nissan Chemical Corporation Integrated Report 201972

Corporate Data

Corporate Information

Overseas Bases(As of March 31, 2019)

FranceAmerica

Nissan Chemical Europe S.A.S.

Nissan Chemical America Corporation

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
S ales of agrochemicals

10333 Richmond Avenue, Suite 1100,
Houston, Texas 77042, U.S.A.
Tel: +1-713-532-4745
 Production and sales of inorganic materials

BrazilNissan Chemical Do Brasil

India

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 Agro Tech India PVT. LTD.

502-504, 5th Floor, Tower B, Spazedge
Commercial Complex, Sector-47, Sohna Road,
Gurgaon-122002, Haryana, India
Tel: +91-124-4214446/47
S ales support and promotional services for
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
S ales 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, China
Tel: +86-512-6273-2080
R
 &D, sales support and promotional services for
performance materials

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

73

Nissan Chemical Corporation Integrated Report 2019

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 andsemiconductor materials

Nissan Chemical Agro Korea Ltd.
Room 2001, 74, Sejong-daero, Jung-gu, Seoul
04526, Korea
Tel: +82-2-774-6470
 Sales of agrochemicals

Corporate Profile(As of July 1, 2019)

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: 2,583 (As of March 31, 2019)

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

Total Number of Authorized Shares

360,000,000

Shares of Common Share Issued

149,000,000

Shareholders

10,969(As of March 31, 2019)

Number ofshares held
(1,000 shares)
26,203
11,678Major shareholders (Top ten companies)
The Master Trust Bank of Japan, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account)
Trust & Custody Services Bank, Ltd. as trustee for theMizuho Trust & Banking Co., Ltd. Retirement Benefit Trust
The Norinchukin Bank
Nissan Chemical Customer Shareholders Association
Trust & Custody Services Bank, Ltd. (Securities Investment Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account 5)
JP Morgan Chase Bank 385151
Ono Pharmaceutical Co., Ltd.
STATE STREET BANK WEST CLIENT – TREATY 505234

Investment
(%)
17.7
7.9

7,418

5.0

4,800
3,890
3,288
2,360
2,147
1,983
1,958

3.2
2.6
2.2
1.6
1.5
1.3
1.3

(Note) Investment percentages are calculated excluding treasury shares.

Percentage of shareheld (%)

Financial
institutions

Securities
companies

Other
domestic
companies

Overseas
investors

Individuals /OthersTreasuryshares

50.9

4.1

10.7

22.6

10.9

0.8

Nissan Chemical Corporation Integrated Report 201974

h t t p s : / / w w w. n i s s a n c h e m . c o . j p /Issued: December 2019