Social and Environmental Report

Head Office	Gate City Ohsaki East Tower, 1-11-2, Osaki, Shinagawa-ku,
Tokyo 141-8620, Japan
Tel: +81-3-6421-7411
Osaka Office	Osaka Okamoto Bldg. 8F, 1-16-10, Minami-Senba, Chuo-ku,
Osaka 542-0081, Japan
Tel: +81-6-4964-5330
Nagoya Office	34 Inoue-cho, Chikusa-ku,
Nagoya 464-0026, Japan
Tel: +81-52-781-3166
Sapporo Sales Office	Tel: +81-11-271-4929
Sendai Sales Office	Tel: +81-22-287-3611
Fukuoka Sales Office	Tel: +81-92-432-7520

Inquiries about products: Adhesive Technology Consultation Center
Toll free in Japan: 0120-58-4929 (10:00-12:00, 13:00-17:00 except on Saturdays and holidays)

This social and environmental report is printed with vegetable oil-based ink that does not containany harmful volatile organic compounds (VOC) using waterless printing that does not involve useof dampening water during printing and thus contributes to great reduction of VOC.

In the cover photo, children are wearing
aprons they created using Cemedine products.

Social andEnvironmental ReportIntroduction

01

Cemedine Group’s Profile03

Cemedine Products All Around Us

Bringing society together
with our adhesive technology

05

Message from the Management

07

Toward Our Centenary
Cemedine’s Adhesive Technology Helps
Imagination Take Wing Worldwide

Feature 1

Feature 2

Cemedine’s Procurement
11
Bonds the World
Cemedine
in the Global Arena

Cemedine Group’s CSR

19

Respect for Customers

21

Respect for the Environment
Respect for People

15

25

34

Continuing to Flourish as a Company Needed by Society

36

Toward Sustainable Enhancement of Corporate Value

38

Third-Party Opinion

42

Department responsible for the report:
Health, Safety, and Environment Department, Cemedine Co., Ltd.
Contact:
2184 Shimo-Ohno, Koga City, Ibaraki 306-0204, Japan
Tel +81-280-92-4518, Fax +81-280-92-1947

Organizations covered by this report:
This report covers Ibaraki Office (Ibaraki Plant and Development Center), Mie Office, and Head Office. When other sites
are covered, there is a note to that effect.
Reporting period:
The period covered by this report is from April 2015 to March
2016 unless otherwise specified.
Editorial policy:
The Environmental Reporting Guidelines (Fiscal Year 2012
Version) issued by the Ministry of the Environment of Japanare referred to and reporting is in accordance with the itemsin the Guidelines.

1

Social and Environmental Report2

Cemedine Group’s Profile

Asia
ThailandTaiwanCompany Overview

1 Cemedine (Thailand)

4 Taiwan Cemedine Co., Ltd.

(as of March 31, 2016)

Company name

Cemedine Co., Ltd.

Head office

Gate City Ohsaki East Tower, 1-11-2, Osaki, Shinagawa-ku, Tokyo 141-8620, Japan

Lines of business

Manufacture and sale of adhesives, sealants, adhesive tapes, special paints, coating materials,
and their processed products; construction and contracting for bonding and waterproofing.

EstablishedCo., Ltd.

No. 76-3, Xiaguiroushan, Danshui Dist.,1717/1 Onnut Road, Suanluang,

New Taipei City, Taiwan

Bangkok 10250 Thailand

2 Asia Cemedine Co., Ltd.
1717/1 Onnut Road, Suanluang,
Bangkok 10250 Thailand

Paid-up capital¥3,050,375,000 (Listed on the Second Section of Tokyo Stock Exchange)

Number of employees

273

Philippines Corp.
General Trias,

China

Hiroshi Iwakiri

5 Cemedine
Block2, Cavite Economic Zone ,April 22, 1948 (Founded in November 1923)

President andRepresentative Director

Philippines

3 Cemedine Shanghai Co., Ltd.

Development Center

Cavite, Philippines 4107

Ibaraki Plant

Room 902, Central Towers A, No. 555,
Head Office and Tokyo Office

Lan Gao Road, Pu Tuo Dist., Shanghai
200333, China
Mie Plant

Net sales (consolidated)

Ordinary income (consolidated)

Profit attributable to owners of parent (consolidated)(Millions of yen)
30,00025,771(Millions of yen)
1,200(Millions of yen) 775
800

25,93725,731

Japan

994
600
752

800

20,000746

Osaka, Nagoya, Sapporo, Sendai,
Fukuoka

267

400

10,000

Sales Offices

3

386

400

200

0

2014/3

2015/3

2016/30

2014/3

2015/3

2016/30

2014/3

2015/3

2016/3

2

Plants1

Ibaraki Plant, Mie Plant

Affiliated Companies in Japan

Business Segment
General Consumer Market

Construction and Civil Engineering Market

Industrial Market
5

Cemedine Automotive Co., Ltd.
Cemedine Sales Co., Ltd.
Cemedine Chemical Industries Co., Ltd.
Cemedine Chemical Co., Ltd.

4

Sales composition

Sales composition

Sales composition

15.5
(%)

36.5

47.5

General Consumer Market Segment sales

Construction and Civil Engineering Market Segment sales

Industrial Market Segment sales(Millions of yen)
5,000(Millions of yen)
15,00025,771(Millions of yen)
10,000

4,161
4,000

3.905

3,978

12,00012,138

12,235

9,000

6,000

2,000

6,000

4,000

0

3,000

2014/3

2015/3Social and Environmental Report

2016/3

0

9,778
8,926

9,397

8,000

3,000

1,000

3

Pick up Cemedine Chemical Co., Ltd.

(%)

(%)

Handing out leaflets totruck drivers advocating no littering

2,000

2014/3

2015/3

2016/30

The factory’s vital mission is to efficiently manufacture and ensure stable supply of excellent
products that achieve customer satisfaction at
the lowest cost possible.
Based on our conviction that not only productquality but also the quality of each manufacturing process is essential, the quality of each process at our plant is monitored using technology
standards, manufacturing records, and quality
conformance inspection of the process.
Through continuous pursuit of kaizen (continuous improvement of working practices), we arecommitted to creating superior products.

2014/3

2015/3

Voice

Takeo Sato
President and Representative Director
Cemedine Chemical Co., Ltd.

2016/34

Telechelic acrylic polymer-basedsealant for sheet glass and sheet
metal panels

Acrylic resin-based adhesive for anchor bolts

UV curable elastic adhesive
Application: Adhesion of panels forvehicle navigation systems

Fo
rv

J-ROCK Y751
Application: ‌Fixing of post-installed anchor bolts
For

Application: Sheet glass and exterior panels

tun

ehi
cle
s!

SX-UV100A

EXCEL

ne

ls!

!

ildings

For buCemedine Products
All Around Us

PM700N
Special modified silicone andepoxy resin-based joint filler

Quick Dry for Woodworking

Application: Filling of joints of agricultural irrigation
systems

Application: Adhesion of wood, textile, and paper

Acetic vinyl-based emulsion adhesivelra !
tl u ms
e
u
ic st
gr sy
a
r on
Fo atiig
irr

SX-ECA48

hes!

For watc

One-part low-temperature curable flexible, conductive adhesives!
andicraft

For h

5

Social and Environmental Report

Application: Noise countermeasures for electronic components mounted on parts andmaterials whose tolerance of heat is low, such as PET films; earth grounding for touch panels
6

Corporate Philosophy

Top Message“Respect people and contributeto society by providing better
products to greater numbers ofpeople”

Message from the Management
Toward Our Centenary
Cemedine’s Adhesive Technology
Helps Imagination Take Wing Worldwide
1. Toward Our Centenary

Hiroshi Iwakiri
President and Representative Director

7

Social and Environmental Report

Cemedine will celebrate its centenary in 2023.
The countdown to the centenary is already underway and the long-term business plan Cemedine Pride2023 is charting our course toward that auspicious anniversary. We are currently at the stage of finalizing theplan.
It was in 1923 that Cemedine’s founder Zenjiro
Imamura, convinced there would be huge demand foradhesives to stick all sorts of things and materials together, started manufacturing and sales of adhesives.
Glues produced in Japan in those days were mainlycomposed of starch. Susceptible to humidity andmoisture in the summer, they became frozen and unusable in the winter, and so imported high-performance
products dominated the Japanese market. This waswhen “Cemedine,” the first chemical adhesive manufactured in Japan, made its grand debut. Zenjiro
Imamura was also the one who coined the term secchakuzai, a Japanese word meaning adhesives. For 93
years since then, we have developed and supplied
products to meet diverse needs, including for new applications, as a manufacturer specializing in adhesives
and sealants, adhering to the corporate philosophy firstarticulated at the foundation of the company—”Contribute to society by providing better products to greater numbers of people.”
In recent years, new needs concerning adhesion
have emerged in rapid succession. All of us at Cemedine take pride in meeting these customer needs by deploying the company’s adhesive technology.
In 2015, our product Cemedine Y630D was adopted for the construction of the world’s fourth-longest
suspension bridge spanning the Gulf of Izmit in Turkey.
In September 2017, the Hakuto moon rover of Team
Hakuto, a Japanese team participating in Google Lunar
XPRIZE, will be launched to the moon. Google Lunar
XPRIZE is a competition for privately funded robotic

lunar spacecraft. With our adhesive applied in the Hakuto rover, it won’t be long before “Cemedine is on themove on the moon.” I can’t wait to see the first imageof Hakuto bearing the Cemedine logo as it roams thelunar landscape.
By unceasingly cultivating innovative applicationsof Cemedine products for sticking all sorts of thingsand materials together, we have been able to position
ourselves not only as a source of diverse consumer
products, such as for handicrafts and models, but alsoof a wide range of industrial applications, extending
from automotive, railroad rolling stock, and electronics
to construction and civil engineering. As a pioneer ofadhesives in Japan, we are resolved to continue meeting customer needs by creating new products for new
applications in the run-up to the centenary that will fuelour growth as an enterprise.

2. Issues for Fiscal 2017
With the aim of realizing sustainable growth, the Cemedine Group will implement three key measures for 2018
to achieve the goals of Cemedine Pride 2023.
The three key measures are: 1) Expand sales andimprove the cost structure, 2) Expand sales of high-value-added products, and 3) Increase the overseas sales
ratio.
To implement these key measures, we will review
business processes and systems, including the personnel system. Furthermore, we will launch the FourthCompany-wide Cost Improvement Project Team tocontinue improving the cost structure.
In the Industrial Market, we introduced the Cemedine SX-ECA series of conductive adhesives that offer
new functions and are highly versatile in terms of adhesiveness, flexibility, and durability. With these products
enabling direct implementation of printed circuit boards
on soft materials, such as textiles and films, we are targeting unconventional applications. One example of8automotive market in North America through early introduction of new, high-value-added products. We also
aim to turn Cemedine (Ningbo) Auto New Material Co.,
Ltd., which serves customers in China, into a profitablebusiness through sales expansion and a leaner cost
structure.

3. Financial Results 
for Fiscal 2016
Net sales for the fiscal year ended March 31, 2016 (fiscal 2016) decreased 0.8% year on year to ¥25,731 million because sales of products for the Industrial Market
declined although sales of products for the Construction and Civil Engineering Market were brisk and salesof products for the General Consumer Market flatlined.
Regarding profits, operating income rose 28.9%
year on year to ¥794 million, owing to lower prices ofcertain raw materials, reflecting lower prices of crude oiland naphtha, and lower labor costs as a result of completion of amortization of net retirement benefit obligation at transition, which had been recorded until fiscal
2015. However, ordinary income decreased 0.8% year
on year to ¥746 million mainly because of a decrease in
non-operating income, such as foreign exchange
gains, which the Company recorded for fiscal 2015.
Profit attributable to owners of parent increased
44.5% year on year to ¥386 million due to an increasein tax expenses as a result of careful consideration in
fiscal 2015 of collection of deferred tax assets, despite
recording of a loss on revision of retirement benefit plan
as an extraordinary loss.
this is “Wearable Cemedine,” showcased at the Second Wearable EXPO in January 2016, which gainedplenty of exposure in the media.
In the Construction and Civil Engineering Market,
we redesigned our adhesives for exterior tiling andlaunched the Cemedine Tile Ace Pro series, which rapidly gained popularity. The exterior tiling method usingelastic adhesion to stop tiles coming off, which we proposed 30 years ago, is gradually establishing its position in the industry. With its combined advantages ofoutstanding ease-of-use and enhanced functionality, agreat future is expected for the Cemedine Tile Ace Pro
series.
In the General Consumer Market, following Cemedine PASTE, which was a game-changer as a water-based adhesive with amazingly wide applications,
we introduced Cemedine nu~no! that can be used forhemming-up pants or putting a number on a uniform,
super easy, and is attracting an enthusiastic following
among consumers.
As for global business development, our priority is
to achieve profitability of the business targeting the9Social and Environmental Report

4. Outlook for Fiscal 2017
The business environment for the fiscal year ending
March 31, 2017 is extremely uncertain, and with theworld economy being largely impacted by the UK referendum that resulted in favor of Brexit, economic prospects are expected to remain unclear. In theConstruction and Civil Engineering Market, demand ison a recovery track led by construction of detachedhouses in Japan. In the Industrial Market, demand for
products for electrical and electronic components is
expected to recover and we will strive to cultivate new
demand centering on Asia.
Our sales, development, and production operations will join forces in a concerted effort to expand
sales.
We forecast net sales of ¥27.8 billion, an increaseof 8.0% year on year, operating income of ¥0.9 billion,
up 13.3%, ordinary income of ¥0.8 billion, up 7.2%,
and profit attributable to owners of parent of ¥0.5

billion, up 29.5%. The government announced the
postponement of the consumption tax rate increase
until October 2019. We are taking steps so that our financial results will be unaffected by this postponement.

5. Relationship With the Parent Company
On January 20, 2016, Kaneka Corporation increased
its equity stake in Cemedine from over 30% to over
51%, and Cemedine became a consolidated subsidiary of Kaneka through a takeover bid. Cemedine haslong been purchasing raw resins from Kaneka, which isa manufacturer of raw materials, and has also cultivated a good relationship with Kaneka in product development. By combining Cemedine’s technology forcompounding various raw materials, technology forevaluation of physical properties of compounds, suchas durability and adhesiveness, and technology formore effective use of adhesives with the Kaneka

Group’s technology for polymer synthesis for raw resins, Cemedine and Kaneka will promote developmentof new adhesives for structures and for composite materials while strengthening the fundamentals of bothcompanies. In addition to the pursuit of faster decision-making through closer collaboration, greater useof resources of the Kaneka Group and the CemedineGroup, including assets, technology, know-how, andoverseas networks, will allow the two groups to flexibly
implement business strategies from a medium- to longterm perspective. I am confident that Cemedine becoming a consolidated subsidiary of Kaneka will lead togreater synergy between the two companies and theenhancement of corporate value. In view of our membership of the Kaneka Group, the Cemedine Pride2023 long-term business plan, which we began formulating in 2015 in the run-up to the centenary, is being
adjusted in light of Kaneka’s long-term vision and midterm plan. We will consider making an announcement
about the definitive Cemedine Pride 2023 once thenecessary adjustments have been made.

Makoto Tateno
Director
General Manager, Production &Distribution Division

Procurementof goods and services
in the Cemedine Group
Tateno: After Cemedine became amember of the Kaneka Group in January 2016, we decided to establish a
number of basic policies in line withthose of the Kaneka Group. One suchpolicy is the Basic Procurement Policy governing procurement, an activity of critical importance to business.
11

Social and Environmental Report

Cemedine’s Procurement
Bonds the World
We formulated the policy on the basisof the Kaneka Group’s Basic Procurement Policy in keeping with the following four concepts: Complianceand Purchasing Ethics, Principles ofPurchasing Transactions, The Practice of CSR in Purchase Transactions,and Requirements for Suppliers.
In addition to matters relating to
the procurement of goods, such as
product raw materials and auxiliarymaterials, these concepts also coverservices obtained from specialized
providers in fields such as computer
systems, human resources, distribution, and advertising and promotional
materials and website production.
Managers and employees from thevarious departments involved in procurement gathered together to discuss the issues.
Basic Procurement Policy (See page 21)

Cooperation and support
essential to procurement
Kurosawa: The Purchasing Department procures raw materials andauxiliary materials in cooperation
with the Development Department,
Quality Assurance Division, and sales
divisions. We cooperate closely with
the Development Department in selecting inexpensive, competitive materials, with the production plants
when purchasing materials for the
first time, and with the Quality Assurance Division and sales divisions
when an incident at a chemical plantor other problem occurs. Furthermore, the Development Department
plays a key role when we consider
alternative materials. In fact, there
are few matters that the Purchasing
Department can decide alone.

Atsushi Saito
Executive Officer
General Manager, Quality Assurance Division

Hashimukai: The Development Department initially selects raw materials for use in product development.
From time to time certain raw materials suddenly become unavailable foruse because of a legal or regulatorychange. When that happens, we gather information and select raw materials and auxiliary materials to procure,including alternative materials, in cooperation with the Purchasing Department, Quality Assurance Department,
and the other departments involved.
To ensure a smooth response in theevent that a problem arises, the Development Department provides the Purchasing Department with information
on possible alternatives for each raw
material considered in the past.
Saito: The Quality Assurance Division endeavors to raise the quality
level of not only products, but also

Shigeru Kurosawa
General Manager
Purchasing Department, Production &Distribution Division

overall production activities, in conjunction with routine quality auditing. Its activities include selection of
suppliers capable of offering stablesupplies of materials, control of raw
materials under the Green Procurement Guidelines, regulatory management to ensure safety and security,and operation of a monitoring systemthat verifies the non-use of harmful
substances and checks manufacturing processes. We earn the trust of

12

Takao Kamakura

Shinichiro Iwahara

General Manager
Distribution Department,
Production & Distribution
DivisionManager
Sales Promotion Group,
No. 4 Business Department,
Sales Division

end customers and users through implementation of these activities
across the entire product range.
Kamakura: Procurement is indeed
the starting point of production, isn’t
it? The Distribution Department is incharge of the final process of delivering products to customers. It is essential that we accord due consideration
to safety and the environment andobserve all laws and regulations applicable to Cemedine products. Other
activities include efforts to promote a
modal shift, reduce truck delivery
costs, increase container loads, andreduce airfreight, in collaboration
with courier companies and with thecooperation from customers.

Knowledge of the supply chain
is key to responding
effectively to change
Iwahara: In consumer products,
there have been increasing cases inwhich we are compelled to switch toa different raw material because theone we have been using suddenly becomes unavailable.
Koyano: The homebuilders who are
my customers are very demanding
when it comes to price and stablesupply. With regard to price in particular, it is difficult to simply request an
increase without offering an offsetting benefit such as performance improvement.

13

Social and Environmental Report

Hashimukai: While regulations are
one factor that leads to changes in
raw materials, suppliers’ commercial
considerations are another. There isalso the issue of aging plant. Much of
the production equipment in Japanand abroad needs replacing. And so
the question arises as to whether it
would be commercially advantageous
to build new plants from the perspective of profitability, and thus some
raw materials will go out of production.
Kurosawa: In addition, the prices ofraw materials change according to
the balance of supply and demand.
Since many adhesive raw materials
are derived from oil, they are affectedby crude oil prices and exchange
rates. So we make a point of using
general-purpose raw materials whenever possible and ensure the supplyof raw materials to plants at stableprices by diversifying risk, for example by purchasing from multiple suppliers.
Tateno: The supply chain is anotherconsideration. Failure to thoroughly
understand the supply chain—how
raw materials are produced and whatmaterials are used to produce them—
can lead to inability to procure theingredients of our raw materials if an
explosion or other accident occurs at
a plant somewhere. Since this can result in a sharp price increase or a supply stoppage, we must continuallymonitor the situation and be on ourguard.
Kurosawa: That’s why suppliers who
cooperate with us at a moment’s notice when something happens are extremely important. When supplier
plants in the Tohoku region weredamaged in the Great East Japan
Earthquake, we were able to meet
our needs using raw materials produced at plants in Okayama and other locations in western Japan.

Earning a good reputation
among employees, customers,
and users through appropriate
management of chemicals
Tateno: The June 2016 amendmentof the Industrial Safety and Health
Act requires risk assessment ofchemical substances and has madethe labeling of containers or packaging and distribution of safety data

sheets (SDS) for 640 chemicals andtheir mixtures mandatory. This
amendment is designed to prevent
accidents by ensuring accurate provision of information to users of chemical substances and having themconduct risk assessment.
Saito: Our Environmental Management Group’s Chemicals Management
Committee continually monitors
amendments to laws and regulations.
Cemedine has also established its
own voluntary chemical regulations
based on the Regulations for Management of Chemical Substances. At thesame time, reflecting top management’s strong commitment to theelimination of occupational accidents,
the Health and Safety Group wasformed to engage in safety-related
risk assessment, also covering subsidiaries, as well as employee education,and health and safety activities and isreinforcing occupational safety.
Koyano: In the B2B market, customers increasingly require SDS for newly adopted products. Although until
now we have explained to customers
how to appropriately manage the Cemedine products they use on theirproduction lines, from now on we will
have to focus on awareness activities
using SDS.
Iwahara: We have been promoting
awareness of appropriate management of chemicals used in consumer

Hideharu Hashimukai
Manager
No. 1, No. 3, and No. 5 ResearchGroups, Development
Department,
Technology Division

products by posting an A4-size leaflet
for each item on the corporate website, but I believe we need to do more.
I think improvement with respect toalternative materials is necessary as
well, since we currently explain raw
materials changes using printed
cards attached to the products without expressly announcing them tocustomers.
Kamakura: The Distribution Department manages products in warehouses. We have begun initiatives for theappropriate management of chemicals, such as providing courier companies with information on theemergency response in case of leakage during transportation.

Sustaining the futureof the global environment
Hashimukai: In the Development
Department, each group has decided
on a development theme and is examining raw materials and containers
with the objective of developing
three or more eco-friendly products.
Mindful that environmental consideration touch on diverse issues, we areworking to create products that areeco-friendly from every perspective:
for instance, changing from solvent-based to water-based products
and developing low-energy curing adhesives, adhesives that enable shortening of production lines, andadhesives that enable production in
low-noise environments.

Iwahara: What we hear most aboutfrom consumers is solvent odor, suchas the acetic acid odor of wood adhesives. They tell us that the smell
makes many children feel sick. Even
though Cemedine Super-X, our mainstay product, is a solvent-free 100%
resin adhesive that is an eco-friendly
product, it is technically treated as ahazardous material. We will forge
ahead with development to enable
customers to safely use our products
through innovation in containers andmethods of use.
Koyano: For the B2B market, innovations such as low-energy curing
and the ability to shorten productionlines or produce in low-noise environments lead to cost reductions forcorporate customers. We aim for winwin product development that enables us to offer products at
appropriate prices by adding value invarious ways, for example by making
it possible customers to achieve total
cost reduction even if the adhesive
itself is more expensive.
Tateno: For the Production Division,
management of waste discharged
from the production plants is an environmental priority. We continually
measure the environment at theplant boundaries. On the shop floor,
we devise production processes andmake production plans to prevent
product contamination with harmful
substances.
Kamakura: According to a Ministryof Land, Infrastructure, Transport
and Tourism survey, distribution accounts for 20% of overall industrial
CO2 emissions, of which 40% comesfrom trucks. Cemedine uses rail
freight for long-distance transportation and is promoting conversion toelectric vehicles by courier companies. We also engage in eco-friendly
procurement by using recycled pallets and packaging materials.

Saito: Although the Quality Assurance Division engages in the low-profile work on quality management andhealth, safety, and environment management as sort of a quality and HSE
watchdog, I believe it plays a key role.
Our work is important to the safety
and security of employees, users, andcustomers. A single mistake in thehandling of chemical substances canlead to great disruption. I want to focus my mind on this vital task.
Tateno: The word “people” in Cemedine’s corporate philosophy “Respect
people and contribute to society byproviding better products to greaternumbers of people” includes the people who use Cemedine products andeveryone involved in the productsupply chain, including, of course,
employees and suppliers. It also includes the people involved in all services, such as transportation. Placing
the highest priority on protecting thesafety of people in the supply chain iswhat we mean by “respecting people.” I thank all of you for your illuminating comments on these vital
matters.
Everyone: Thank you.

Shinya Koyano
Manager
Sales Promotion Group,
No. 2 Business
Department,
Sales Division

Kurosawa: I think the Purchasing
Department’s core mission is to ensure stable supplies of high-quality,
eco-friendly raw materials and auxiliary materials at reasonable prices for
production operations. I want towork diligently to refine this process
through collaboration with other departments.

14

Cemedine on the Move — From Thailand to Other Asian Markets

Making good on a commitment to kaizen as a never-ending journey
Kaizen initiatives at Cemedine (Thailand)

Establishment of Cemedine (Thailand)

Cemedine (Thailand) has supplied
products to automakers as a Tier 1
supplier for more than 30 years, constantly striving to prove worthy of its
customers’ trust.
In discussion from the outset,
Cemedine, Cemedine (Thailand),and Cemedine Automotive sought toidentify what automakers want froma supplier and, as a result, formulated Cemedine (Thailand)’s kaizen
concept.
To make this concept a reality,
three pillars of kaizen activities were
established: 1) Process kaizen focusing on visualization of production
processes and the introduction ofsystems preventing human error, 2)
work environment kaizen to ensure
the practice of 3S and safe work operations, and 3) education to realize

1967 Participation in a Kingdom of Thailand royal development project to modernize the automotive industry
1969 Visit to the Cemedine head office in Gotanda, Tokyo(Request from a Japanese automaker in Thailand for shipment of No. 110 brake adhesive)
1981 Establishment of Cemedine (Thailand) Co., Ltd.; start of production (Nov. 13)
At the request of a Japanese automaker in Thailand that wished to procure
locally manufactured products, I visited Japan to request then Cemedine
President Masanao Hara to open a
production plant in Thailand. As a result, President Hara decided to set up
a company in Thailand, following theestablishment of Taiwan Cemedine.
Naomi Okamura and Nobuyuki Tanaka participated in the project and contributed greatly to the start-up of theThai plant.
Using kneaders transferred fromthe Ibaraki Plant in Japan, the Thai
plant managed to start production following a process of trial and error. Not
only did the plant subsequently secure
the adoption of its cellulose (CT)products by every automaker in Thailand, but soon after also began

supplying PVC products to all thesecustomers.
It will soon be half a century since
I was posted to Thailand. I have been
involved with Cemedine products for
48 years, and nearly 35 years havepassed since we began local production. I feel deeply grateful when I recall that the growth and successful
development of Cemedine (Thailand)
over the years is owing to the patronage of our many users and the dedicated professionalism of our many
excellent employees.
I intend to carry on with the same
determination as my predecessors did
35 years ago, who overcame various
challenges from the company’s trial-and-error beginnings, achieving sustainable growth as they progressed to
the next level of development.

Overview of Cemedine (Thailand)Kenzo Endo
Cemedine (Thailand) Co., Ltd.

Company namecontinuous kaizen. A Cemedine, Cemedine (Thailand), and Cemedine
Automotive joint taskforce team wasformed to spearhead kaizen promotion, and Cemedine (Thailand) has
engaged in kaizen activities basedon a kaizen schedule since September 2015.
Kaizen is practiced today
through a repeated process of constant monitoring of kaizen progressagainst the schedule, reviewing of
the schedule in the event of delay,
and preparation and implementationof a follow-up plan.
Cemedine (Thailand) will continue endeavoring to fulfill its aspirations as a company trusted bycustomers, making good on its commitment to kaizen as a never-ending
journey.

Voice

Cemedine (Thailand) Company, Limited

Established

November 1981

Location

Headquarter & Technical Support Center（本社）1717/1 Onnut Road, Suanluang, Bangkok 10250 Thailand
Production Facility（工場）494 Moo 4 Bangpoo Industrial Estate T. Praksa, A. Muang Samutprakarn
10280 Thailand

Lines of businesses (products)

Sealant and Adhesive for Automotive

Number of employees

92 persons ( male : 71 female : 21 )Major clients

Toyota Motor Thailand Co., Ltd.,Honda Automobile (Thailand)Co., Ltd.
and all automotive companies in Thailand

Supplying products that satisfy customers
Hiroshi Matsuda,
Cemedine (Thailand) Co., Ltd.

Establishment of Cemedine (Thailand)

To delight and satisfy customers, it isessential to manufacture and supply
products of consistently high quality.
To accomplish this, we pursue kaizen in every production process frommaterials acceptance to finished product shipment with the objective of ensuring that no problems occur in quality
or supply.
This year, we introduced a barcode-based system to avoid errors,
which I think is a major advance in ensuring the certainty of quality. We willcontinue practicing kaizen in order tocontinue manufacturing excellent products that deliver outstanding customer
satisfaction.

Cemedine in th e Global Arena
15

Social and Environmental Report16

Cemedinein the Global
Arena
Making the most of rudimentary cross-cultural communication
Kaizen initiatives at Asia Cemedine
In the context of ongoing globalization, Cemedine has decided to transfer products from the Ibaraki Plant
to Asia Cemedine (ACC), which has
been pursuing kaizen since April
2015. ACC is implementing threemain kaizen activities. The first is
the practice of the 3S: seiri (orderliness), seiton (tidiness), and seiso(cleanliness). The second is preparation of procedure manuals that explain in a readily understandable
manner how to make the products.
And the third is education in the key
points of work operations.
Although it sounds fairly
straightforward, in fact it is necessary to engage with cultural differences, including differences oftemperament, in order to successfully implement these activities. To generalize, while Japanese tend to apply
themselves to the task in hand with asense of urgency, I think Thais have atemperament.
moreeasygoing

Overview of Asia Cemedine
Company name

Asia Cemedine Company, Limited

Established

October 2004

Location

Headquarter & Technical Support Center (Head Office)1717/1 Onnut Road, Suanluang, Bangkok 10250 Thailand
Production Facility (Plant)
580 Moo 4, Bangpoo Industrial Estate, Soi 13, T. Praksa,
A. Muang Samutprakarn 10280 Thailand

Lines of businesses (products)

Sealant and Adhesive for General Industry
and Construction Industry

Number of employees

29 persons ( male : 17 female : 12 )Major clients

Sekisui-SCG Industry Co., Ltd., Anden (Thailand) Co., Ltd.
and Other industrial companies

Cemedine on the Move — From Thailand to Other Asian Markets
Establishment of Asia Cemedine

17

Social and Environmental Report

Asia Cemedine was established in October 2004 as a joint venture of Asia
Kendy, Cemedine and Mitsubishi Corporation. Whereas Cemedine (Thailand), established in 1981, hasdeveloped as a manufacturer specializing in automotive sealants and adhesives, the joint venture waslaunched as a manufacturer of a wide
range of products for general industrial applications. Having overcome
various challenges in circumstancesquite different from those in Japan,
Asia Cemedine has secured a position

as a leading producer of moisture-curable adhesives. The company has
now prepared a temperature- and humidity-controlled manufacturing facility. The implementation of thisadvanced manufacturing environment is a groundbreaking development also applicable to products used
for electronic parts that are incompatible with moisture-curable adhesives and susceptible to damage fromforeign matter. It promises to greatly
enhance Asia Cemedine’s prospects.

Consequently, we are apt to talk pasteach other. That was the situation
when we started kaizen activities.
However, as we spent more andmore time working together, I andother Japanese came to appreciate
the qualities of Thais: they are cheerful, accommodating, and willing.
Still, I don’t know whether it is an
aspect of the national character, but
Thais don’t tend to excel at schedulemanagement. By offering support toour Thai co-workers in this area, Japanese and Thais were eventuallyable to get on the same wavelength.
There is an emphatic Thai expression, dai dai, that means something like “Can do!” The immediate
response to dai dai is su su, an expression of encouragement meaning“Fight on!” Thais use these expressions to cheer one another on. When
Thai employees say “dai dai,” I respond with “su su,” and we proceedwith kaizen together. If something isbehind schedule, I say “dai dai” tomake up for the delay. I think repetition of this interaction has contributed to kaizen at ACC.
Although at first I hesitated touse these everyday Thai expressions,when I summoned the courage to
use them, it felt surprisingly good. I
suppose this is an example ofcross-cultural communication. I intend to continue pursuing kaizen activities at ACC in the spirit of dai dai
and su su.

Voice

Becoming a model
for Cemedine plants
worldwide!
Nobuyuki Tanaka
Cemedine Co., Ltd.

Although it took a concerted, all-out effort to secure customer approval during
a plant inspection by a Thai electronicparts manufacturer, thanks to the tremendous support from various Cemedine departments we were able tocommence delivery of products withouta hitch. We were the first CemedineGroup company in Asia to prepare a sophisticated manufacturing facility inwhich temperature, humidity and foreign
matter are all controlled. Indeed, our ambition of “Becoming a model plant for
Cemedine plants worldwide!” is within
our grasp.

18

Cemedine Group’s CSR

Cemedine’s Five Principles

Toward Realization of a Sustainable Society

Respect for customers

Offering safe andreliable products

Responding tocustomer needs

Development ofhigh-added-value
products

Respect
for the environment

Application of environmental
standards exceeding legal
requirements

Environmental
initiatives

Business activities
and environmental
impacts

Respect for people

Groupwide humanresource
development

Diversity initiatives

Collaboration with
suppliers

Continuing to flourish as acompany needed by society

Contributing tolocal communities

Timely and appropriate information
disclosure

Initiatives for enhancement of the level ofthe adhesive industry

Toward sustainableenhancement of corporate value

Enhancement ofcorporate governanceCompliance andrisk management

Cemedine Group’s
initiatives for quality
and safety

All of us at the Cemedine Group share the Basic Philosophy to ensure that Cemedine continues to be a trusted enterprise.
“Cemedine’s Five Principles,” which articulate our mission to fulfill our corporate social responsibility as members of the
Cemedine Group, emphasize the importance of contributing to realization of a sustainable society.

Basic Philosophy“Respect people and contribute to society by providing better
products to greater numbers of people”
People means:
Customers who purchase our products, and everyone related to promotion of Cemedine’s business including suppliers, distributors, retailers, and those involved in transportation
Shareholders
Employees

Respect everyone related to promotion of Cemedine’s businessand contribute to society

Relationships with Major Stakeholders
We respect everyone related to the Cemedine Group.
We strive to establish good relationships with stakeholders by clarifying what we can do for them and the issues weneed to address (corporate mission) and through effective communication.

Management Policies
Thorough Compliance
Accord the highest priority to ensuring compliance as a social mission
Respond to rules-based society through compliance with the Cemedine Group Codeof Conduct

Customer First
Offer products based on an accurate understanding of the value that customers want
Strive to earn customers’ confidence in Cemedine as a proposal-driven enterprise

Profit-oriented
Improve productivity in all fields
Pursue the optimum productivity and take actions for its accomplishment
Concentrated and selective investment of resources in products that generate profit
and products that will be future pillars of the business
Be proactive and embrace change

Principal responsibilities

Communication method

Customers

Quality management
D evelopment of environmentally conscious
products
Safety considerations in logistics
Provision of product information and services

 stablishment of a contact for customer inquiries (AdheE
sive Technology Consultation Center)Responses to customers by sales and service personnel
Information dissemination on the website
Holding of exhibitions

Suppliers

Stable procurement

Communication in the course of daily work
On-site inspection of procurement partners and feedback

SocietySocial contribution activities

Participation in local events

Shareholders
and Investors

Return of profit to shareholders
Enhancement of corporate value through dialogue with shareholders and investors

General Meeting of Shareholders
Timely disclosure by news releases, public notices, etc.
Information dissemination on the website, etc.

Employees

Occupational health and safety
Human resources development
Diversity in employment
Consideration for work-life balance iscussion at the labor-management council or with repD
resentatives
Compliance & Risk Management Committee
Questionnaire on the social and environmental report

Code of Conduct (See page 39.)

Cemedine Group’s
CSR Activity Report

Respect
for customers
Promoting stable procurement, basic
procurement policy
Participation in exhibitions
Mission to create highly functional
products

P21

19

Social and Environmental Report

Respect for theenvironment
Environmental management systems, product risk management, etc.
Environmental policy, promotion
structure, environmental management program
Input and output of chemical substances, results of the company-wide environmental
management program, etc.

P25

Respect
for people
Human resources development initiatives
C re a t i n g w o r k p l a c e s
where people from diverse backgrounds canplay an active role
P34

Continuing to flourish as
a company needed by society

Toward sustainable enhancement ofcorporate value

Social contribution activities
Basic policy on information disclosure, basic policy on profit distribution, general meeting of shareholders

P36

Basic approach to corporate governance, CSR
support framework
Compliance implementation framework, BCP,
information management initiatives, approach
to risk management
Cemedine Group’s quality assurance systems,
quality control systems in Japan, thorough compliance with the Industrial Safety and Health Act

P38

20

Respect for Customers
Positioning legal and regulatory compliance as our first priority, we are working to ensure fair and sound relationships with customers and suppliers.
We are committed to contributing to society and enhancing corporate value by offering products and services of
excellent quality that are safe, reliable, environmentally friendly, and beneficial to society.

Offering Safe and Reliable Products
Promoting Stable Procurement
In order to ensure the quality of the parts and materials we procure, grasp the creditworthiness of suppliers for ongoing transactions,and promote stable procurement, Cemedine concludes a basic transaction agreement with each supplier and issues specifications
for materials. We strive to establish cooperative relationships rooted in trust with suppliers through fair and equitable purchasing.

Responding to Customer Needs
Participation in Exhibitions
We value communication withour customers. Exhibitions arevaluable opportunities forthem to experience our latest
adhesion technology and for
us to gain their feedback,which we reflect in productdevelopment to maximize ourcontribution to society.

2015

2016

January NEPCON JAPANMarch	ARCHITECTURE + CONSTRUCTION
MATERIALS / DOMOTEX in Shanghai
JAPAN HOBBY SHOW
April
May
SHIZUOKA HOBBY SHOW
July
ISOT
August	JAPAN DIY HOMECENTER SHOW
September	ALL JAPAN MODEL & HOBBY SHOW

January WEARABLE EXPO
March	ARCHITECTURE + CONSTRUCTION
MATERIALS / Electronica China /DOMOTEX in Shanghai
AprilJAPAN HOBBY SHOWSHIZUOKA HOBBY SHOWMay
August	JAPAN DIY HOMECENTER SHOW

TopicsJAPAN DIY HOMECENTER SHOW

Basic
Procurement Policy
 e engage in procurement activities that enhance the corporate value of both CemedineWand our suppliers.
We engage in green procurement to reduce environmental impacts.
We provide fair and equitable transaction opportunities and engage in rational transactions
reflecting comprehensive consideration of quality, price, supply stability, technological development capabilities, environmental preservation, securing of safety, and other factors.
We abide strictly by the relevant laws and regulations in and outside Japan.
Compliance and Purchasing Ethics

In August 2015, JAPAN DIY HOMECENTER SHOW (DIY SHOW), a leading comprehensive exhibitionin Japan for the home center industry was held at Makuhari Messe. We publicized our adhesives forhome centers with a particular focus on nu~no!, which is an adhesive for textiles that dispenses with
the need for needles and threads, and on high-heat-resistant epoxy putty.
A news program by TV Asahi, “Good! Morning,” featured the DIY SHOW, and its live broadcast
from the Cemedine booth introduced nu~no!

nu~no!
This is an aqueous urethane-based
adhesive for diverse applications. It
is transparent and adheres well.
Once dry, it is resilient to water andwill not come off when subjected tousual dry cleaning or washing. Dispensing with the need for thinnermeans there is no unpleasant odor. It is suitable not only for textiles but for other materials,
including metals, rubber, and plastics, and is
the ideal adhesive for hobby crafts and DIY.

We ensure compliance with laws and regulations in and outside Japan while striving to act ethically in accordance with the Cemedine Group Code of Conduct and other internal standards.
We execute contracts with suppliers in good faith.
We exercise due care in communication with suppliers and strive to ensure confidentiality of information that comesto our knowledge based on a good understanding of the materiality of such information.
We strive to establish prosperous relationships with suppliers, considering fair, equitable, transparent, and rational
operating procedures.

Principles for Purchase Transactions
We engage in transactions at appropriate prices based on economic rationality.
In selecting suppliers, we consider quality, prices, supply stability, technological development capabilities, environmental preservation, securing of safety, time of delivery, and other factors and make a rational selection. If we decide not to select a supplier and if the company desires an explanation, we inform the company of the reasons forthe decision.
In principle, our purchase decisions are based on comparison of quotes from several suppliers.
We establish rules for cost reduction initiatives with suppliers and vigorously promote such initiatives.

Fulfilment of CSR in Purchase Transactions
In purchase transactions, we comply with laws and regulations, the Cemedine Green Procurement Guidelines,
and other standards in order to ensure quality and safety of the raw materials and other items that we purchase.
We confirm that items purchased are environmentally friendly and that their production and distribution are unrelated to the abuse of human rights.

Requests to SuppliersWe request our suppliers to cooperate as business partners in our supply chain based on the understanding of
the objective of the Basic Procurement Policy with the aim of enhancing corporate value of both Cemedine andthe suppliers.
We request our suppliers to provide proposals on streamlining and other initiatives in accordance with economic
rationality.
We request our suppliers to disclose their initiatives regarding compliance, human rights, occupational safety, theenvironment, quality, safety, etc. and fulfill CSR through collaboration.

21

Social and Environmental ReportE poxy putty for heat resistant applications
This new heat-resistant addition to the epoxy
putty series is easy to use for patching, forming and repairing just by cutting and kneading.
Whereas conventional adhesives can withstand temperatures only up to about
80°C, this product is suitable for continuous use at 200°C (based on Cemedine’s
test method). With versatile adhesiveness, this epoxy putty enables repairing of parts subject to heat, which has
previously been difficult.

TopicsWEARABLE EXPO
We participated in the second WEARABLE EXPO held at Tokyo Big Sight from January 13
to 15, 2016. The Cemedine booth welcomed over 10,000 visitors. We greatly appreciate
their interest in our company and the products we offer.
Based on the “Wearable Cemedine” concept, we introduced conductive adhesives
targeting the wearable market. Showcased at the Cemedine booth was a kimono withembedded LED chips that create unique aesthetic effects, which was produced in cooperation with a fashion designer and manufacturing partners. Many visitors stopped by the
Cemedine booth, astonished by this kimono made of a thin translucent textile and endowedwith extraordinary illumination capabilities. It enjoyed wide media coverage (about 240 mentions), including online news/topics (224 mentions), print media (18 mentions), and TV stations.
Cemedine’s unique, flexible conductive adhesive also attracted attention. Textile manufacturers showed a particular interest in this product as they have hitherto foundit difficult to respond to the wearable market. In addition, we identified needs for adhesion to silicone rubber, a material withgreat potential for wearable device applications but on
which circuit fabrication is difficult, and SX-ECA48
for low-temperature curing.
SX-ECA for Printable

22

Development of High-Added-Value Products

Tile Adjust - organic coating for substrate conditioning for exterior tiling

Efforts and mission to create highly functional productsTrends, notably the diversification of lifestyles and theadvent of IoT and othertransformative innovations,are fueling needs for multifunctional adhesives whosefunctionality goes way beyond bonding. Capitalizing
on Cemedine’s core technology to realize rapidly curable,
flexible, large-area adhesion,
Super-X continues to evolve.
Key functions of adhesives
for electronic components
include heat dissipation toefficiently release heat fromincreasingly compact equipment, ability to dismantle inorder to reduce defects, andelectric conductivity for flexible connection of sensor terminals. And in order to realize
a sustainable society and respond to other pressing social needs, we are currently
conducting research on
on-demand adhesion, whichenables separation whenever desirable, and we are already proposing various
products based on this concept.

Social issue
Tiles coming off external walls

Voice

Society’s expectations
Consistent quality of exterior tiling

Masato Akimoto
Executive Officer
General Manager, Technology Division
and Development Department

TopicsSX-UV Series (SX-UV100A)
Social issue
Reduction of environmental impacts of adhesion
Society’s expectations
Development of amorphous viscosity adhesives to replace double-sided tapes
Features of the product/technology
Double-sided tapes are a simple and effective bonding solution. But with all the release
papers and unused portions—the tape has to be cut to the shape of the adhesion surface,creates a large amount of waste whose disposal has a significant environmental impact.
The SX-UV series of liquid adhesives are an attractive alternative to double-sided
tapes. Applied to the target and irradiated by ultraviolet rays, they immediately become
sticky and bond easily. There are no release papers and they can be applied solely to the target, thus drastically reducing
waste.
Inside story on product/technology development
Besides developing the adhesive, smooth introduction of the SX-UV100A to customers’ production lines is essential, andthis was indeed the part in which it took most of the time.
The SX-UV series targets users of double-sided tapes whose usage is very different from that of liquid adhesives. In
collaboration with the users, we fine-tuned application of the adhesive and the method of curing. In some cases, we redesigned the applicators. Based on meticulous consideration of customer needs, we ensured the smooth introduction of
the SX-UV series to customers’ production lines. The SX-UV series continues to evolve.

Other products in the SX-UV series

23

Social and Environmental Report

TopicsFeatures of the product/technology
Tile Ace Pro, an elastic adhesive for tiling, is widely used because it can realize
tiling of consistently high quality. In particular, with Tile Ace Pro, tiles are far lessprone to coming off than in the case of using mortar. But to achieve a flat, smooth surface, mortar is used to deal with any unevenness of the surface to be tiled, and consequently the advantages of elasticity have not been fully exploited. To resolve this issue,
we have developed Tile Adjust, an elastic coating material for substrate conditioning. Using an elastic material also for adjusting uneven surfaces helps stabilize tiling quality. Tile
Adjust is an environmentally friendly product compliant with JAIA 4VOC Standard, which
was established by the Japan Adhesive Industry Association (JAIA) for control of volatileorganic compounds (VOC), and is JAIA F 4-star certified.
Inside story on product/technology development
Tile Adjust is specifically designed to speed construction while reducing construction
costs. This is achieved by simplifying work and through quick curing. Since ease of work
is difficult to measure quantitatively, we solicited feedback from experienced tilers for reflection in product development. This was not straightforward because opinions tended
to be highly subjective as criteria varied among tilers.

Voice

Hidetoshi Okano
Development Department

Pick up Cemedine Automotive Co., Ltd.
Adhesive for structures contributing to lighter vehicle bodies
Social issue
Mitigation of global warming, realization of sustainable society
Society’s expectations
Development of energy-saving, environmentally friendly, low-carbon products
Features of the product/technology
Application of this adhesive, consisting primarily of epoxy resin, to structural components of automotive vehicle bodies and panels enhances rigidity and contributes to quietness. Moreover, by increasing the amount of its application to automotive
vehicle bodies, it allows the thinning of steel plates, resulting in lighter automotive vehicle
bodies.
Inside story on product/technology development
Epoxy resin, the principal component of this adhesive, has excellent properties in termsof strength, heat resistance and adhesion to steel plates. On the other hand, it is hardand brittle. To compensate for these disadvantages, it was necessary to add the attribute of toughness to the new adhesive. Moreover, we had to optimize application performance (discharge property, thixotropy, etc.) to make the adhesive suitable forcustomers’ application conditions.
Although adding liquid rubber is common practice for endowing adhesives with
toughness, with conventional technology it is difficult to ensure coating performance
while enhancing toughness. It took many man-hours to introduce a new type of epoxy
resin that is stronger and tougher than conventional epoxy resin and to achieve both
toughness and the optimum viscosity for application performance.

Voice

Atsuhiko Suzuki
Development Department

24

Respect for the Environment
Cemedine works to deepen awareness of chemical substances and ensure their appropriate management. To
discharge our responsibility as a company that supplies chemical products, we clearly indicate information on
product properties, safety, and handling methods and engage in various activities to protect the safety and healthof all product users and the environment.

Application of Environmental Standards Exceeding Legal Requirements
Environmental Management Systems
Environmental management
systems
The Quality Assurance Department,
responsible for quality assurance,
and the Quality Control Department,
responsible for the quality of products
manufactured at Cemedine plants,
are quality assurance organizations
operated under the Quality Assurance Division to enable customers to
use Cemedine products with peaceof mind.
In addition to these departments,
we established the Health, Safety,
and Environment Department in April
2015 as a new quality organization forthe purpose of strengthening environmental management systems.
The Health, Safety, and Environment Department has two main responsibilities: 1) management relating
to chemicals used in adhesives, including product labeling and otherchemical regulatory management,
green procurement, and workplacechemical risk assessment; and 2)
health and safety management, including management of the occupational health and safety of CemedineGroup employees, risk management,
and 5S.

Overseas product risk
management and regulatorycompliance
Risks relating to the environment are
wide-ranging, and environmental
laws and regulations in countries andjurisdictions around the world are being progressively tightened.
In light of this situation, the Environmental Management Group playsa central role in gathering information
related to new environmental laws
and regulations, analyzing risks, andensuring legal compliance at Cemedine.
Specifically, the Group gathers
the latest overseas information on
chemical substances through seminars, industry associations, and consultants and has put in place a systemfor promptly complying with revisions

25

Social and Environmental Report

to laws and regulations.
Recent years have seen the enactment of laws and regulations tostrengthen chemical risk management around the world, starting with
the introduction of the REACH*
chemical control regulation in the EU.
Korea, China and Taiwan are among
those that have moved forward withregulation, the introduction of GHS* is
progressing in Southeast Asian countries, and SDS* and other safety documents is being introduced in various
countries as well.
When exporting products, Cemedine always confirms whether or
not they are included on the existingchemicals lists of the U.S., Korea,
China, Taiwan, the Philippines andelsewhere. We also carefully examine
these existing chemicals lists at the
product design stage.
When exporting substances noton existing chemicals lists, in addition
to following all legal procedures, we
register chemical substances contained in products that we manufacture overseas or import in accordancewith their amounts and hazardous
properties in compliance with thechemical control systems of destination countries.
China has introduced a newchemical notification system andsubstantially revised the registration
system for hazardous chemicals in
2015, and raw materials and chemicals imported into China are now
subject to registration in addition to
those manufactured locally. The Cemedine Group has developed a system for registering chemicals incooperation with local Group companies and is proceeding with registration of hazardous chemicals as
required.
New chemicals registration systems were instituted in 2015 in Taiwan and Korea as well. The CemedineGroup made preparations throughcooperation among the relevant organizations before these systems
came into effect. In Taiwan, we

completed in 2015 registration on theexisting chemicals list of all substances sold in the market. In Korea, weare steadily proceeding with registration of substances subject to registration announced in 2015 in compliancewith the new system.
Thailand and other Southeast
Asian countries moved toward development of new chemical control systems in 2016. Cemedine will obtain
information on these regulatory systems in Asian countries in a timely
manner and collaborate with Group
companies to ensure smooth regulatory compliance.
*REACH (Registration, Evaluation, Authorization andRestriction of Chemicals): a system that requires
businesses to evaluate the safety of existing andnew chemicals*GHS (Globally Harmonized System of Classificationand Labelling of Chemicals): a globally harmonizedsystem of chemicals classification and labeling*SDS (Safety Data Sheet): a document containing
information for the safe and appropriate handling ofchemical products, such as product ingredients,
hazardousness and toxicity, and handling precautions. The previous name, Material Safety Data
Sheet (MSDS), was changed to Safety Data Sheetin JIS Z 7253, established in March 2012.

Response to
the conflict minerals issue
Because of concern that a portion of
the minerals mined in the Democratic
Republic of the Congo and surrounding countries (tantalum, tungsten, tin,and gold) serve as a source of funds
for armed groups that perpetrate human rights violations and environmental destruction, the Dodd-Frank
Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act) was
enacted in the U.S. in 2010, obligating listed companies in the U.S. todisclose the use of these minerals.
Cemedine believes that sincerely
addressing the issue of conflict minerals and disclosing information tocustomers is an aspect of fulfilling oursocial responsibility as a global company.

Product Risk Management
In addition to complying with laws,
regulations, and rules, Cemedine engages in various initiatives concerning
product quality and safety in accordance with a precautionary approachto supplying safe, high-quality products to customers.

Provision of Safety Information
or non-use of hazardous chemical
substances, conformity with customer requirements, and legal compliance from the initial stage (DR1)and engage in development withproduct safety as our first priority.

Appropriate evaluation of
new products
Cemedine conducts a detailed design review (DR) at four stages, from
R&D theme exploration to market
analysis, prototype production, andproductization.
We meticulously examine matters such as confirmation of the use

Activities to Strengthen Chemical Information Management
1. GHS-compliant SDS and productlabelsThe Cemedine Group issues SDS
and attaches product labels thatcomply with the GHS adaptation ofeach country.
In 2015, we prepared and issued SDS and product labels for
Asian countries that have implemented GHS, as well as SDS andlabels compliant with the US OSHA’s
Hazard Communication Standard(HCS) aligned with GHS, which tookeffect in June 2015, and the EU CLP
Regulation for mixtures.
2. Acquisition and provision of contained chemical substance information
2-1. Implementation of Green Procurement Guidelines
In order to provide eco-friendly products that can be used with peace ofmind, Cemedine has instituted theGreen Procurement Guidelines, controls environmentally hazardous substances in products, and conducts
quality and environmental management surveys of suppliers of raw materials and packaging materials.
Specifically, we require suppliers to
submit SDS, JAMP* MSDSplus (AIS),and completed questionnaires on environmental management. Furthermore, we study chemical-related
laws and regulations in Japan andother countries and verify that our
products do not contain prohibitedchemical substances, such as substances banned under the RoHS Directive and substances of very highconcern (SVHC). In addition to focusing efforts on new products, we review existing products as needed.

2-2. Preparation of MSDSplus
Cemedine proactively provides andacquires information on chemical
substances contained in products
using the MSDSplus* common format.
We issued revised versions ofMSDSplus in January (substance list
Ver. 4.030) and July (substance list
Ver. 4.040) of 2015 and distributed
them to customers through our distributors. We are also preparing topromptly meet requests for English
and Chinese language versions ofMSDSplus.
Meanwhile, since 2013 the Ministry of Economy, Trade and Industry
has been developing a new information
communication
scheme(chemSHERPA*) capable of sharing
information on chemical substances
contained in products throughout theentire supply chain. A data entry support tool for the new information
communication scheme was releasedin October 2015 and is now being applied. The Cemedine Group will continue cooperation among the relevantorganizations and actively engage inthis initiative in preparation for fullscale implementation of the scheme.
*JAMP (Joint Article Management Promotion-consortium)*MSDSplus: information communication sheets for
specified chemical substances*chemSHERPA: a new information communication
scheme capable of sharing information throughout
the entire supply chain for the purpose of properly
managing chemical substances contained in
products and continuously complying with the
evolving legal and regulatory regime

Cemedine provides product safety
information using SDS, product labels, yellow cards (emergency response cards), and other means.

Use of safety data sheets (SDS)
SDS are documents that communicate detailed information on the handling and safety of chemicals that are
extremely important for the provisionof information relating to the safety of
Cemedine products.
Therefore, we provide SDS tocustomers, distributors, shipping
companies, and other companies
that handle our products.
Cemedine’s SDS for all products are GHS-compliant SDS. We
are currently reviewing the SDS in
accordance with the new JIS (JIS Z
7253) and enhancing safety information. In this way, we are ensuring thereliable disclosure and communication of information on the chemical
substances in Cemedine products.

Labeling
The labels attached to product containers succinctly indicate GHS-compliant handling precautions andsafety information to persons handling the products.
Cemedine is currently reviewing
label information in conjunction withrevision of SDS based on the new
JIS standard (JIS Z 7253).

Carrying of yellow cards
Yellow cards are emergency response cards for use in the event ofan accident during product transportation. The cards are printed withconcisely worded information on applicable laws and regulations, product properties, emergency measures,and emergency contact information
for the fire and police departments
and Cemedine.
We distribute yellow cards tocompanies transporting chemicals
and ensure that they are carried
during transportation.

26

Chemicals Management Committee

Analysis and Technological Enhancement

Representatives from the plants anddivisions responsible for purchasing,development, sales, quality, and other functions gather for regular monthly meetings of the Chemicals
Management Committee.
The Committee promotes dissemination and sharing of necessary
information by communicating tothese Cemedine organizations information on matters including laws andregulations in Japan, customer andindustry green procurement activities,
and regulations of countries and regional organizations pertaining to exports, which have been increasing inrecent years, and defines the roles ofeach organization to enable prompt
action. The Committee also reports
on laws and regulations and information on the handling of newly registered raw materials.
The Committee discusses thehandling of chemical substances,product safety, and other matters andcommunicates
theinformation
throughout Cemedine to enable preemptive risk management.

Cemedine periodically outsources toexternal organizations the analysis of
key products to determine whether
they contain harmful ingredients,
such as substances restricted under
the RoHS Directive* and halogen
substances.
In internal analysis, the plants
and various departments, such as
those in charge of development, production technology, and quality control, select the analyses they requirefrom a wide variety of analyses including F 4-star standard (JIS, JAIA,
JSIA) product formaldehyde analysis
and VOC (toluene, xylene, styrene,
ethylbenzene) analysis of 4VOC standard (JAIA) compliance of products.
Cemedine strives for reliable measurement by increasing the accuracyof each type of analysis.

Environmental Consideration in Products

Environmental Consideration in Products for Construction Applications

Cemedine has formulated the Green
Procurement Guidelines as comprehensive guidelines covering suchmatters as voluntary restrictions on
chemical substances used that take
into consideration chemical-related
laws and regulations, customers’ environmental procurement (green procurement) policies, and otherrequirements. The Guidelines are an
important consideration in productdevelopment and are the basis for astep-by-step review of existing products now in progress.

From the perspective of continuityof operations, the Health, Safety,
and Environment Department is involved in the following matters as anorganization engaged in compliancemanagement, which has become
an increasingly important priority.
First of all, to protect both theglobal and local environment andthe safety of people who use adhesives, we engage in chemical management of raw materials in order tosupply adhesives that are as safe as
possible. Secondly, we manage theEnvironmental Initiatives
Environmental Policy
In 2003, Cemedine formulated an environmental policy that forms the basis for company-wide environmental activities.

Basic Policy
Recognizing the importance of the environment as well as the finite nature of resources, all employees of Cemedine Co., Ltd.
continually strive to conserve, protect, and improve the environment. Cemedine aspires to be an environmentally responsible
company that pursues business development imbued with concern for the environment. We endeavor to achieve harmony between social responsibility and business activities.

Action Guidelines
The following are guidelines to be observed by all employees of Cemedine Co., Ltd. in order to harmonize the business activitiesof developing, manufacturing, and marketing adhesives, sealants, and related products with protection of the global environment,
and thus ensure Cemedine is an environmentally responsible company capable of sustainable development.
1 Make consideration of impacts on health, safety, and the environment in all business activities from product development todisposal a key management priority and a focus of company-wide efforts.
2 Proactively promote the development of internal systems to protect the environment, the setting of environmental impact
reduction targets, and environmental protection activities and further raise awareness of the environment through these
activities.
3 Proactively engage in environmental impact reduction throughout product life cycles by such means as conservation ofenergy and resources, recycling, and waste reduction for the purpose of environmental protection.
4 Thoroughly understand the environmental regulations of national and local government bodies and industry associations,establish voluntary standards as necessary, and comply with these regulations and standards.
5 When exporting products and conducting business abroad, give due consideration to protection of the local environment
and local laws and regulations and strive to implement all necessary measures.

*RoHS Directive: a European Union (EU) directiveon the restriction of use of certain hazardous substances in electronic and electrical equipment

occupational health and safety ofGroup employees involved in adhesive manufacturing and manage
chemical handling safety.
Although this is low-profile activity that takes place behind thescenes, we take pride in doing workthat helps protect the global environment and the safety of customers and employees.

Promotion structure

Chief Environmental Officer(director in charge)

Poisonous andDeleterious Substances Control Act

Deleterious substances designated by law
and cabinet order

Methanol, toluene,
xylene, formaldehyde,
etc.

Industrial Safety and
Health Act

Substance prohibitedfor manufacturing

Asbestos

Ministry of Health,Labour and Welfare
guideline

Building Standards
Act

27

Target Substances

Substances withindoor aerial concentration guideline levels

Substance withregulated diffusion rate
(speed)Social and Environmental Report

Standard

Company-wide Environmental Management Program
Identification and reduction of resource and energy con1 sumption
Reduce consumption of electricity and heavy oil.
Company-wide
Environmental Committee
ChemicalsManagement
Committee

The table below provides an overview of Cemedine’s environmental measures for adhesives and sealants for construction
applications.
Laws and Regulations

Cemedine has formulated a company-wide environmental
management program, which serves as guidelines for theenvironmental management activities of the Group’s business sites, and made the program the standard for the environmental activities of each business site.

President

Compliance &Risk Management
Committee

Environmental Measures for Products for Construction Applications

Environmental Management Program

Indication on Products

Intentional use prohibited(Cemedine internal standard)

CCS mark (voluntarylabeling)

Toluene, xylene,
styrene, ethylbenzene

Japan Adhesive Industry
Association (JAIA) standard

Compliance with the
4VOC standard (JAIA)

Formaldehyde

JIS standard (construction
and wood adhesives)
Japan Adhesive Industry
Association standard
Japan Sealant Industry
Association standard

Mie Plant Environmental Management Committee

Formaldehyde and 13
other substancesF(F 4-star) (JIS)F(F 4-star) (JAIA)F(F 4-star) (JSIA)

Mie Office

Ibaraki Plant Environmental Management
Committee

Ibaraki OfficeEnvironmental management
committees of the Head Officeand other offices

Head Office andother offices

Identification and reduction of the amount of waste dis2 charged
Reduce waste.
Environmental conservation
Reduce emissions of volatile organic compounds (VOC), a causeof air pollution.
3
Comply with environmental laws and regulations.
Consider the environment when introducing and updatingbuildings and facilities.
Promote green purchasing.
Identification and reduction of chemicals use
Reduce consumption of hazardous chemical substances.
4
Assess the environmental impacts of chemicals used.
Identify consumption of packaging materials.
5

Development of eco-friendly products
Promote the development and sale of eco-friendly products.

Environmental information disclosure and external communications
6
Disclose the details of environmental activities.
Contribute to communities and society through corporate
activities.

28

Business Activities and Environmental Impacts
Input and Output of Chemical Substances

INPUT

OUTPUT
Raw Materials

Electricity

Rubbers

207 t

Organic chemicals

1,457 tResins8,883 tInorganic materials

10,201tOils, fats and solvents

2,707 tOther materials

383 t

Products

4,860,000kwh

Fuel1,090 kl

Water

70,000m3

CO225,218 t

5,478tWaste

1,187tVolatile organic compounds 11.0t(VOC)

CO2 emissions: Calculated based on electricity consumption
VOC emissions: Calculated by multiplying consumption of the substances designated by the Japan Adhesive Industry Association as priority substances subject to reduction by certain coefficients[n-hexane, cyclohexane, toluene, xylene, methanol, ethyl acetate, acetone, methyl ethyl ketone, rubber solvent]

Scope: Ibaraki Plant, Mie Plant, Cemedine Chemical Co., Ltd.

Raw materials(t)
30,00026,11825,00025,124

23,818

444

467

486

Products(t)
30,00026,17625,00024,91025,218

CO2

400

Other
Organic chemicals
Oils, fats and solvents
Resins300

0FY2013

FY2014

Fuel

1,252
1,090

900

FY2014FY2015

Shutdown maintenance of the power generator of the co-generation system at the Ibaraki Plant resulted in a lower facility utilization
rate. Thus, consumption of heavy oil used as fuel decreased. In
addition, total consumption of fuels decreased because operation ofcertain plants was stopped temporarily owing to the change of the
production method after outsourcing a part of the processes foremulsion products.

0

1,000
FY2013

FY20140

FY2015

A downward trend in the sales composition of rubber-based andresin-based adhesives and sealants requiring solvents and an upward trend in the sales composition of adhesives and sealants without the need for solvents continued. Overall, sales of sealants forconstruction and adhesives for interior and exterior work decreased,reflecting a decrease in the number of new housing starts. In particular, the volume of production of sealants for construction was unchanged from the previous year despite a decrease in the purchasedvolume of raw materials compared with fiscal 2015 because of consumption of work-in-process inventories.

8.3

Volatile organic
compounds
12

8.2
7.0

12.8

Waste

12.2
11.0

(VOC)

FY2013

FY2014FY2015CO2 emissions increased in line with the increase of electricity consumption. On the contrary, CO2 emissions associated with fuel consumption decreased because fuel consumption was curtailed. The
increase in CO2 emissions associated with electricity consumption
was fully offset by the decrease in CO2 emissions associated with
fuel consumption, resulting in a decrease in overall CO2 emissions
by 562 t or 9.3%. The CO2 emission intensity also decreased by
3.7%.

(t)
15

(t)
1,200

1,131

1,000

1,187
1,045

800

9

600
6

400

3

2

FY20130

FY20154

300

Social and Environmental Report

FY20146600

0FY2013(10,000㎥)
10
8

5,478

2,000

5,000

The Development Department, which is responsible for design anddevelopment of products, uses numerous facilities that consume
electricity, such as testing facilities using heat. Thus, among Cemedine sites without in-house power generation, the Development Department’s power consumption is large. Power consumption
increased compared with 2014 because the Development Department used more testing facilities continuously. Nevertheless, ourplants are continuing their efforts to level electricity demand bymeans of the use of midnight power and efficient operation of aco-generation system.

Water

1,465

1,200

0

FY2015

Sealants for construction account for a large proportion of the production volume (t) and a majority of these products are composedof inorganic materials. In fiscal 2016, the purchased volume of inorganic materials decreased because of consumption of work-in-process inventories. Consequently, despite little change in thepurchased volume of other raw materials, the total purchased volume of raw materials decreased compared with fiscal 2015. A
downward trend in the sales composition of rubber-based and resin-based adhesives and sealants requiring solvents and an upward
trend in the sales composition of adhesives and sealants without theneed for solvents continued. Overall, sales of sealants for construction and adhesives for interior and exterior work decreased, reflecting a decrease in the number of new housing starts.
(kl)
1,500

10,000100

5,000

Rubbers

6,040

3,000

200

10,000

6,581

6,000

4,000

15,00015,000

(t)
7,000

5,000

20,00020,000Inorganic materials

29

Electricity(10,000kwh)
500

0FY2013

FY2014FY2015

Production of emulsion products involves use of water as a raw
material. However, owing to the change of the production method
after outsourcing a part of the processes for emulsion products, we
no longer use water as a raw material for products. Thus, total water
consumption decreased.

200

FY2013

FY2014FY2015In recent years, a downward trend in the sales composition of rubber-based and resin-based adhesives and sealants requiring solvents and an upward trend in the sales composition of adhesives
and sealants without the need for solvents continued. Therefore,
consumption of organic solvents used for manufacturing of products continued to decrease, resulting in a decrease in VOC emissions.

0

FY2013

FY2014FY2015The volume of waste discharged mainly from plants is greatly affected by the yield of manufacturing processes. On the other hand, anincreasing trend toward high-mix low-volume production reflectinguser requirements is leading to deterioration of yields, resulting in an
increase in emissions of industrial waste per production unit. As industrial waste accounts for almost all waste, the amount of waste
discharged increased by 13.5% from fiscal 2015 and the waste
emission intensity based on the production volume increased by
3.0%.

30

Quantitative Evaluation of Environmental Management
Results of Company-wide Environmental Management Program
2013

2014

2015

6,256

5,823

5,478

CO2 emissions (t)
6,200

5,760

466

497

-

per production unit
Offices: 1% reduc-

VOC emissions (t)

1,376

12.8

1,165

11.8

1,005

11.0

1% reduction per
production unit-

Energy Consumption and Waste Management
Energy Consumption and Waste Emissions (Results)

Not evaluatedFigures in the upper row were calculated based on the consumption of electricity, type-A
heavy oil, and gasoline. Figures in the lower row are based on the report in accordance with
the Act on Promotion of Global Warming Countermeasures. CO2 emissions from energy
consumption decreased 345 t (5.9%). CO2 emissions to be reported to the authorities underthe Act on Promotion of Global Warming Countermeasures decreased 286 t (5.0%). Incidentally, energy consumption reported to the authorities under the Act on the Rational Use ofEnergy decreased from 2,418 kl in the previous year to 2,377 kl (crude oil equivalent).

tion

Volume of type-A heavy oilpurchased (kl)

Not improved

Result5,474

526

Improved but insufficient

TargetPlants: 1% reduction

Electricity consumption(10,000 kwh)

Improved

Selfevaluation

Waste emissions in fiscal 2016 increased in linewith fluctuations in production output. Waste per

42Volume of copier paper purchased (10,000 sheets)

267

Water consumption(1,000 m3)

80

Volume of general waste (t)49Volume of industrial waste (t)

906

35

274

85

69

830

33

262

66

68

1,006

-

100 t or less per year

5% or less of annual
production

Types ofenergy1 t of production output also increased comparedElectricity consumption increased from the previous year owing to the increased electricity consumption by the design departments. Electricity consumption per production unitof plants decreased 6.2%, but that of offices increased 17.9%. Thus, we were unable toreach the targets.

tion.
Figures are emissions to the atmosphere obtained by multiplying the consumption (purchased volume) of 9 substances designated by the Japan Adhesive Industry Association(JAIA) as priority substances subject to reduction by 0.0105 (coefficient determined by JAIA).
VOC emissions decreased in line with the decline in production of solvent-type adhesives.

FY2016FY2015FY2016FY2015Mie Plant
FY2016

Okayama Plant
FY2015FY2016

3,332

3,542

1,481

1,624

1,851

1,918

1,345

1,316

waste through continuous improvement of pro-

Type-A heavy oil
(kl)

1,164

1,004

1,125

963

39

41

88

86

Water
(m3)

77,87865,86072,04559,503

5,833

6,357

3,752

3,798

LPG
(m3)

1,904

1,780

1,784

1,676

120

104

0

0

Volume and breakdown of waste in FY2015 and FY2016(Total of Ibaraki Plant and Mie Plant)

the volume per production unit decreased 14.8% and achieved the target of 1% reduc-Ibaraki Plant

FY2015

Electricity(1,000 kwh)

duction process.

The volume decreased from the previous year. Owing to the change in production items,

Company-widewith the previous year. We will work to reduce

Wood waste
5%

Waste paper Wood waste
5%4%

Waste paper
4%

Waste (results)

Scrap metal
7%

Sludge Scrap metal
1%
6%Flammable waste oil(specially controlled industrial waste)4%
Waste plastic

Sludge1%

Waste
category

Waste plastic
9%(t)Company-wide

Ibaraki Plant

FY2015FY2016FY2015FY2016FY2015FY2016FY2015FY2016

84.4

94.4

34.0

11.4

2.1

7.7

48.3

75.3

Waste oil

725.3

872.6

402.0

534.9

171.6

178.8

151.7

158.9

Waste plastic

74.6

80.9

48.9

53.6

21.8

22.6

3.9

4.7

Scrap metal

55.7

56.0

27.6

27.6

28.1

28.4

0.0

0.0

Wood waste

42.3

38.1

23.4

22.2

15.8

15.9

3.1

0.0

Waste paper

39.7

42.3

-

-

39.7

42.3

0.0

0.0

Sludge

6.1

7.5

6.1

7.5

-

-

-

-

Total

1033.11191.8

542.0

657.2

279.1

295.7

207.0

238.9

Recycled volume

235.4

178.7

167.5

157.1

67.9

21.6

0.0

0.0

Flammable waste oil(specially controlled industrial waste) Flammable waste oil(specially controlled2%
industrial waste)

8%
Volume of gasoline purchased (kl)Energy consumption (results)

Mie Plant

Okayama Plant

Decreased 2 kl because of less company vehicles and the switch to hybrid vehicles

Virtually unchanged from the previous year

Waste oil75%

Waste oil70%

Virtually unchanged for several years-

FY2015FY2016

Virtually unchanged from the previous year. The target of 100 t or less per year has beenachieved continuously.

Industrial waste is discharged from plants due to change of production items and forother reasons. Industrial waste per production unit was 4.0%, an increase from 3.3% for
the previous year, but the target of 5% or less was achieved.

Reducing Environmental Impacts

Hazardous waste is specially controlled industrial waste discharged from plants. Hazard-

Volume of hazardous waste(t)

Development of environmentally friendly products(number of products)
Sales of environmentallyfriendly products(million yen)Confirmation whether materials
to be newly adopted are compliant with the Green Procurement
Guidelines (number of cases)
Environment-related education and training (frequency)

Environmental incidents(number of incidents)

Second-party audit andthird-party audit(number of audits)

36

23

7,148

21

73

0

3

61

59

8,379

17

43

0

2

40

0.5% or less of annual production

ous waste per production unit was 0.16%, having decreased from 0.24% for the previous year, and the target of 0.5% or less of annual production output has been achieved
continuously.

51-

The number of products newly designed by the Development Department and released,
excluding those of minor variations (color, specifications, etc.)

Maintain 30% or
9,602 more of total net
sales

16

56

0

3

-

The amount of sales of products bearing CCS mark (Cemedine’s standard), JIS and JAIA
F 4-star products, as well as JAIA 4VOC standard-compliant products. Their sales accounted for approximately 47% of Cemedine’s net sales (20,521 million yen) and theratio is on an upward trend.
Number of cases of confirmation in which raw materials to be newly adopted are compliant with Cemedine’s voluntary Green Procurement Guidelines. The implementation
rate is 100%.

Frequency of education events and training on prevention of environmental pollution, etc.
mainly conducted at plants

Number of occurrences of abnormality at plants. There were no incidents violating laws
and regulations.

There were no particular findings requiring corrective actions

We are striving to reduce environmental impacts in our handling of chemical substances and energy consumption.
Appropriate management of chemical substances: Substances subject to PRTR (results in FY2016)
Substance(No.)

Company-wide
Release Transfer

Ibaraki Plant

Total

Release Transfer

Mie Plant
Total

Release Transfer(kg)
Okayama Plant

Total

Release Transfer

Total

1

zinc compounds (water-soluble)

0

14

14

0

14

14

0

0

0

0

0

0

30

n-alkylbenzenesulfonic acid and its salts(alkyl C=10-14)

0

100

100

0

0

0

0

0

0

0

100

100

134

vinyl acetate

0

3

3

0

3

3

0

0

0

0

0

0

239

organic tin compounds

0

632

632

0

240

240

0

82

82

0

310

310

265

tetrahydromethylphthalic anhydride

0

15

15

0

15

15

0

0

0

0

0

0

298

tolylene diisocyanate

0

33

33

0

0

0

0

0

0

0

33

33

300

toluene

120

194

314

120

120

240

0

0

0

0

74

74

349

phenol

0

290

290

0

290

290

0

0

0

0

0

0

391

hexamethylene diisocyanate

0

87

87

0

0

0

0

0

0

0

87

87

392

n-hexane

0

207

207

0

170

170

0

0

0

0

37

37

405

boron compounds

0

342

342

0

280

280

0

41

41

0

21

21

411

formaldehyde

0

9

9

0

9

9

0

0

0

0

0

0

120

1,926

2,046

120

1,141

1,261

0

123

123

0

662

662

Total

PRTR: The Act on Confirmation, etc. of Release Amounts of Specific Chemical Substances in the Environment and Promotion of Improvements to the Management Thereof

Unless otherwise specified, the Head Office, Osaka Sales Office, Nagoya Sales Office, Ibaraki Office, Mie Office, and Development Center are within the scope.
*Figures for 2015 include figures corresponding to those of Cemedine Chemical Co., Ltd.

(PRTR Act) was promulgated in July 1999 to promote voluntary improvement of the management of chemical substances by business operators. The PRTR Act requires
business operators to notify the government of the release amount (release to atmosphere and soil) and the transferred amount (discharge) of the designated chemical
substances. This approach calls for business operators’ voluntary initiatives to reduce the release of such chemical substances.

31

Social and Environmental Report32Respect for People

Environmental Accounting
Environmental Conservation Costs

Cemedine designs HR systems and creates work environments and also actively engages in human resource(Thousands of yen)

Categories

Business Area Costs

Pollution
Prevention Cost

Global Environmental
Conservation Cost

FY2015Investments

Investments

Costs

Key initiatives

6,843

6,774

4,180

8,042

Installation of dust collectors
Replacement of boilers and air
conditioners
Inspection of sump pits, boilers, andseptic tanks
Use of Kasumigaura industrial water

14,680

1,062

9,931

2,033

Maintenance of air conditioners
Maintenance of thermostaticchambers

0

46,571033,723

21,52354,406

14,111

43,797

Resource
Circulation Cost
Subtotal

Costs

Upstream/Downstream

0

Costs

5,286

0

Contracting of waste treatment

2,859

Administration Cost

0

5,744

0

5,449

R&D Cost

0

4,431

0

6,980

 ost of development of environmentallyC
conscious new products (purchase ofanalytical tools and their consumables)

3,851

0

4,090

Total

21,52373,718

14,111

63,176E
 nvironmental preservation activities

Creating Workplaces Where People from Diverse Backgrounds Can Play an Active RoleFY2013

FY2014FY2015FY2016

Male

228

225

232

234

242

Female

32

34

32

31

31

Male

7

5

7

6

6

Female

1

2

0

1

1

Five-year retention rate of
new graduate hires (%)

78.9

86.1

94.4

97.3

100.0

Employee turnover rate (%)

1.1

1.1

0.7

1.4

1.1

Male

41.1

41.3

40.7

41.4

41.8

Female

40.3

40.1

40.9

40.5

40.7

Total

41.0

41.1

40.7

41.3

41.7

Male

16.0

16.1

15.4

15.4

16.6

Female

18.5

18.1

18.6

17.9

19.2

Total

16.3

16.4

15.7

15.7

16.9

Number of hires (persons)Amount
FY2015FY2016

Reduction by energy saving

Reduction of consumption amount ofelectricity and heavy oil

2,534

(67)

Waste-related

Sale of valuables

8,860

6,810

Introduction of environmentally conscious products

Profit from environmentally conscious
products

1,919,275

2,296,732

1,930,669

2,303,476

Total

Average age (in years)

Scope of calculations: Ibaraki Office, Mie Office, Head Office, Development Center

Average length of service(years)33

Social and Environmental Report

Recruitment and hiring
Cemedine hired seven new graduates in fiscal 2016, six male and one
female. Four were recruited for technical positions, two for sales positions, and one for clerlical work. In

recruiting mid-career employees, weseek to raise the standards of business operations by hiring experts invarious fields. Recruitment of mid-career employees are in two forms: ad
hoc recruiting as the need arises andyear-round recruiting in search of talented personnel, through which wehave actually recruited mid-career
employees.

FY2012(Thousands of yen)

Main measures

introduction of reduced working hoursystem and child care leave, support
those who take medical or otherleave of absence, and a variety of
benefits as well as an employee loan
program offered by the Welfare andMutual Aid Association.

Basic concept
Cemedine has in principle eliminatedthe distinction between general clerical positions and career-track positions to enable all employees to work
under the same conditions. In addition, we evaluate employees according to ability and performance,
making no distinction in the personnel
system according to academic background, gender, or recruited as new
graduates or mid-career hire.
Cemedine strives to promote
work-life balance through the

Number of employees(persons)

Environmental Preservation Benefit

and ambitions. Based on these inputs,
general managers of divisions play acentral role in deciding personnel assignments to ensure that employees
are assigned to appropriate positions at
the time of periodic rotation.

Diversity Initiatives

Scope of calculations: Ibaraki Office, Mie Office, Head Office, Development Center

Categories

toward work. Employees submit aself-evaluation report each year to the
Personnel and Administration Department, following an interview with his/her supervisor, in which they evaluate
themselves and express their desires

Putting the right people in the right positions
Cemedine periodically rotates personnel and pursues various other initiatives
to ensure appropriate assignment of
personnel. Supervisors evaluate employees’ abilities and their approachInstallation of equipment for manufacturing
environmentally friendly products
Contracting of recycling of containers and packaging
Product recycling (reprocessing)Green purchasing

0

Groupwide Human Resources Development
Human Resources Development Initiatives

 nvironmental management activiE
ties (including ISO)
Environmental education
Environmental measurement
Analysis of hazardous substancesSite greening, beautification, andlandscape preservation

Social Activity Cost

development to enable each Cemedine Group employee to demonstrate his or her abilities while working safely with peace of mind.

FY201634

Promoting work-life balance
Cemedine has implemented various
regulations and programs aimed atpromoting work-life balance, including monthly and annual overtime andholiday work regulations, a five-day
workweek system, a reduced working hour system, and a flex-work system. The Welfare and Mutual Aid
Association, in which all employees
participate, provides benefits as employees’ children progress throughthe education system and offers
loans for education, leisure, and major purchases.

Refreshment leave
Cemedine has an award program for
employees with continuous service often, twenty, and thirty years. These
employees are granted refreshment
leave in accordance with their yearsof service. There is also a program
whereby employees reaching thirty
years of service who wish to travel
during refreshment leave receive financial support for that purpose.

Voice

Continuing to Flourish as a
Company Needed by Society
The Cemedine Group has long been a company deeply rooted in local communities. Our plants and offices
accord importance to communication with local residents, strive to maintain active exchanges with local communities, and engage in a variety of social contribution activities.

Voice

Contributing to Local Communities
Social Contribution Activities

Contribution of women
Cemedine actively offers rewarding
and challenging opportunities andwork environments in which female
employees can play an active role

Voice

Chiharu Agawa

Masatoshi Kinoshita

Development Department

Manager, Audit Office

Last year, I received ten straight daysof leave for reaching the ten-year
service milestone. It was my first longholiday since starting work, and I wasable to get away from the daily pressures of work and pass the time leisurely. Looking back on the past
decade, I worked for nine years in the
Research Group before being transferred in my tenth year to the Development
Administration
Section,where I work utilizing my experiencein the Research Group. The refreshment leave was a valuable opportunity for me to reflect on my future roleproviding support for the Development Department.

I reached the thirty-year service milestone last year and took leave in August
using
the
company’s
refreshment leave program. Although
I had just started at a new workplacelast April due to staff rotation, I
thought that if I didn’t take the advantage of the leave at that time, I
might never be able to do so. So, I
used a financial contribution from thecompany to take a family trip and undergo a complete physical examination. The results of the physicalexamination made me realize how
important my health is to my family
and to me.

Support for raising the next generation of children
Following enforcement of the Act on
Advancement of Measures to Support Raising Next-Generation Children, since April 1, 2011 companies
have been required to formulate andsubmit an action plan to “support
raising next-generation children.”Cemedine established threegoals and implemented support mea-sures for the three-year period from
November 30, 2012 to March 31,
2015. To prepare an employment environment supportive of employees
raising children while juggling workand family responsibilities, the firstgoal was to “implement measures enabling employees raising preschool
children to use a flex-work system.”
As other measures to support raisingnext-generation children, the second

goal was to enhance the provision ofinternships and other work experience opportunities, and the third goal
was to establish Children’s Visiting
Day to let children actually see where
their parents or guardians work. Cemedine successfully accomplishedthe three goals during the period of
the action plan.

Pick upTokyo Terakoya
Cemedine participates, including through the dispatch of instructors, in Tokyo Terakoya, an educational initiative organized by
Tokyo Junior Chamber as an aspect of occupational studies,mainly for second-year junior high school students. People in

Enhancement of child-rearing assistance programs
Cemedine assists employees with young children by granting maternity leave andoffering a reduced working hour system for employees raising children. We also
have a childcare leave system and are enhancing assistance for employees withyoung children.

Takako Inoue

FY2012FY2013

FY2014FY2015FY2016

Number of employees who
took maternity leave

1

2

1

2

0

Number of employees who
took childcare leave

1

2

1

2

0

Tokyo No. 6 Sales Section

Although I’m aware of the increase inemployment opportunities for women due to the Equal Employment Opportunity Act, the ratio of female
employees remains low. On the other
hand, there are many things women
can do because there are so few ofus, and I feel I am able to work freely
and engage in rewarding work because there are no precedents. In
sales, participation in trade shows
and other events results in lots of interaction, and at times my life revolves around work. However, since I
work in an environment in which it iseasy to take time off, I think I have agreat deal of freedom in balancing
my private life and work.

35

Social and Environmental Report

Voice

Asako Takahashi
Adhesive Technology
Consultation Center

I returned to work under the reduced working hour system in April this year after being
on childcare leave since 2014. The long waiting lists for childcare facilities have becomea social problem, and we had to wait for an
opening after my childcare leave ended. In
response, the company extended my leaveby six months. I am very grateful that thecompany has a leave system that isn’t amere formality and has created an environment in which employees can request andtake a leave with peace of mind. I am also
thankful to be blessed with co-workers, thedepartment, and the company that accommodated a change of workplace during myleave and showed consideration in the workplace after my return to work. Thanks tothose support, my days are hectic but rewarding.

various occupations are dispatched as instructors to junior highschools in Tokyo’s Shinagawa Ward, where the Cemedine Head
Office is located. They speak to the youngsters about the meaning of workand the importance of communication, to encourage the students to expand
their horizons. Instructors include television directors, physicians, police officers, writers for TV and radio, architects, flight attendants, and company
owners in addition to employees dispatched by companies.

Pick up

Meisei University internship
On Monday, August 3, 2015, Cemedine held an internship for eighteen thirdyear students of Meisei University at Gate City Hall in the Gate City Osaki complex in Tokyo.
For the past few years, Cemedine has held a one-day internship with alecture format together with Meisei University. Since the university left the lecture content to the discretion of Cemedine this year, we explained the scienceof adhesives in a lecture that included hands-on experience. Also, from theperspective of employers, we helped the students prepare for job-searchingnext year by explaining the keys to success when seeking employment.
Although, mindful that most of the participants were liberal arts majors, we kept the explanation of adhesives simple, they
seemed to find it quite challenging. However, the students clearly enjoyed the hands-on experience, which involved free experimentation with bonding using elastic adhesives, instantaneous adhesives, and other adhesives and wooden and metallic
substrates provided by a Cemedine plant. We want to continue taking advantage of such opportunities to interact with students.

36

Pick upToward Sustainable Enhancement of Corporate Value

Voice

Shinagawa Workplace Walk

Cemedine is committed to developing governance systems worthy of the expectations and trust of society while

Cemedine supports the Shinagawa
Workplace Walk, operated by the
Future Education Promotion Organization to foster a spirit of initiative
among junior high school students
while introducing them to the worldof work. In November 2015, we welcomed students from Shinagawa
Ward for an explanation of Cemedine’s business and a workplace tour,
after which Cemedine employees
and students engaged in a discussion about the meaning ofwork, the students’ aspirations for the future, and how they
can prepare for their future now. Even students who initiallyfound it difficult to think constructively about their future
eventually showed positive attitudes, such as a determination to study hard out of a desire to engage in socially beneficial work.

promoting communication with diverse stakeholders, including customers, shareholders, investors, business
partners, employees, and society.

Enhancement of Corporate GovernanceYuri Shiozaki

Personnel Section, Personnel and
Administration Department

Our explanation of Cemedine’s business and the rolesof individual employees appeared to encourage thestudents to grapple with the meaning of work and thesignificance their current studies. I hope to continuecommunicating the role of Cemedine to people in thelocal community while helping foster the young people
who will be forging our society in the future.

Timely and Appropriate Disclosure of Information
Basic Policy on Information Disclosure
Basic policy on information disclosure
The Company engages in timely andappropriate disclosure of information
to shareholders and the wider investor community through business reports, the corporate website, andother media. We disclose informationon corporate decisions and facts that
may affect investment decisions, information concerning financial results, and any material change orcancellation of information that has
already been disclosed. We promote
understanding of Cemedine by actively and fairly disclosing not only important management matters, but asmuch other information as possible tomeet requests of our investors, suchas management interviews and articles on Cemedine’s history and products.
Overview of the timely disclosure system
Under the internal system for timely
disclosure of corporate information,
the general manager of the Administration Division serves as the information officer. The Company observes
laws and regulations and the rules of
the Tokyo Stock Exchange while
striving to ensure timely and appropriate disclosure. The information officer
plays a central role in considering
whether corporate decisions andfacts that may affect investment decisions constitute information requiring

37

Social and Environmental Reportdisclosure and endeavors to ensure a
prompt action when disclosure isnecessary.
Disclosure of IR information
The Company uses the corporatewebsite to engage in timely and appropriate disclosure of financial results, news releases, and otherinformation to diverse stakeholders.
The Company also sends a business
report containing a message frommanagement and a business review
to shareholders once every six
months.

IR ScheduleMay	Announcement of financial results
June	Ordinary General Meetingof Shareholders
August	
Announcement of first-quarter
financial results
November	
Announcement of second-quarter financial results
February	Announcement of third-quarter
financial results*The Company discloses any facts
requiring disclosure in a timely manner.

Basic Policy on Profit Distribution
Basic policy on profit distribution
The Company considers providing
stable dividends to shareholders to
be one of the most important management priorities. The basic policy is
to pay stable dividends while continuously securing profit, in order to realize business growth and enhancementof internal reserves for the purpose ofstrengthening the financial position
while also according importance toreturning profits to shareholders.

General Meeting of Shareholders
General Meeting of Shareholders
The Company considers the General
Meeting of Shareholders to be a valuable forum for dialogue between
shareholders and management.
Therefore, the Company ensures theearly dispatch and web disclosure ofa notice of convocation to provide
shareholders sufficient time to consider the agenda items. The Company also includes visual contents inbusiness reports to make them more
readily understandable.

Basic Approach to Corporate Governance
Formulation and promotion of the
Corporate Governance Code by the
Tokyo Stock Exchange has required
all companies, not only those listed
on stock exchanges to develop compliance systems, protect shareholders and the wider investor community,
to enhance corporate value, and construct systems to achieve sustainablegrowth. Based on a governanceframework developed with this inmind, the Cemedine Group aspires tobe a company that brings benefits toall its stakeholders, such as stablebusiness relationships with customers and raw materials manufacturers,
continuity of employment for employees, places importance on productsafety and protection of the global
environment, and is a reliable longterm business partner, by developing
products that anticipate needs andrealizing a continuously profitable corporate structure.
CSR Support Framework
The purpose of internal auditing at
Cemedine is to contribute to the accomplishment of management objectives by complying with theInternational Standards for the Professional Practice of Internal Auditingof the Institute of Internal Auditors (IIA)
under the governance, risk, and compliance framework developed by the
Board of Directors.
The Internal Audit Office prepares an auditing plan covering all
departments based on internal audit
regulations and a risk assessment
and, from a fair and independent
standpoint, assesses the status ofbusiness execution from the perspective of legality and rationality. The
Office proposes improvements andcorrective actions to audited departments as necessary. Audit results are
periodically reported to the Board of
Directors.

Voice

Voice

Takao Oikawa

Chiharu Komachi

Outside Director

Outside Director

Nearly a year has passed since I
joined the Cemedine Board of Directors as an outside director. The Board
consists of members with differingexperience and knowledge selected
to perform a practical function, notmerely to fill seats. At Board of Directors meetings, the internal and outside
directors
andCorporate
Auditors join together in a frank exchange of views and vigorous discussion on management issues
relating to domestic and international
markets.
I consider my role as an outside
director to be not only to perform
management oversight by objectively commenting from an outside perspective and those of diverse
stakeholders on management. I havebusiness experience, mostly in sales,in an industry related to civil engineering and construction, a key market for Cemedine, and I think that mybackground can be of benefit to the
Cemedine Group.
I expect realization of the Cemedine Pride 2023 to further enhancebrand value and ensure that customers turn to Cemedine for any of theiradhesive needs.

I have served as an outside directorof Cemedine since June 2015. I
worked for approximately thirty years
at a trading company and five years
at a bank, during which time I gained
experience in sales, corporate planning, and other functions as well as
through overseas assignments in
Moscow, Dusseldorf, and London.
Although I have only one year ofexperience at Cemedine, something I
have become acutely aware ofthrough many years in business isthat the fundamentals of businessare essentially the same everywhere.
What is of vital importance is to ascertain customer wants and needs
and the situation within a company,
to clearly recognize the company’s
mission, and to maintain high ethicalstandards among officers and employees. I consider my role as an outside director to be to ensure thatwhat is considered common sense
within Cemedine is not nonsense insociety by expressing my opinions
candidly from my own perspective.
With regard to CSR activities, it
is my belief that, while it is of course
necessary for a company to engage
in social contribution activities, CSR
activities should first and foremost
center on social contributions
through business activities.

38

Corporate governance structure

Approach to
Risk Management

General Meeting of Shareholders
Election/Dismissal

Board of Corporate Auditors
Corporate Auditor (full-time): 1

Board of Directors
Auditing

Outside Corporate Auditors: 3

Accounting
AuditorElection/Dismissal

Directors: 4
Outside directors: 2
Election/Dismissal/Supervision

Representative Director

Auditing

Auditing

Management
CouncilAuditing

Auditing

Compliance andRisk Management
Committee

AdviceOutsideattorney

Election/Dismissal

Audit Office
Auditing

Divisions and departments

Cemedine Group Code of Conduct
Basic Philosophy

Compliance Rules

The officers and employees of the Cemedine Group abide by laws,
regulations, and internal
rules in the execution ofbusiness and behave as
sensible members ofsociety whose motto is“Fairness and order, integrity and trust.”

1	Abide by laws and regulations and never accord priority to business expedience.
2	Follow the Rules of Employment and other internal regulations, respect each other’s individuality, and strive to improve the work environment.
3	Accord the highest priority to the safety of society and employees.
4	In business execution, strive to collect information on risk factors and prevent risks frommaterializing.
5	Treat business partners with integrity and fairness and build business relationships worthyof trust.
6	Appropriately handle information obtained through work and third-party intellectual property rights and do not divulge insider information, personal information, or internal confidential information.
7	Respond resolutely to antisocial forces and avoid any connections whatsoever.
8	Strive to correct any words or actions violating the Code of Conduct of which you becomeaware and promptly report the matter to a manager or the Compliance & Risk Management
Committee.

The Company has established theCompliance and Risk Management
Committee as an organization for the
purpose of maintaining complianceand appointed each division and department manager as the complianceofficer responsible for compliance in
his or her organization.
The Committee has prepared
the Cemedine Group Complianceand Risk Management Manual setting out the basic rules for compliance and risk prevention and strives
to inculcate compliance in all Group
employees. In particular, the Committee distributes the CemedineGroup Code of Conduct, establishedin the Cemedine Group Compliance& Risk Management Manual, to all
employees in a booklet that employees are required to have with them at
all times. Furthermore, the Basic Philosophy and Code of Conduct areread aloud once a month at department and section morning assem-

39

Social and Environmental Reportblies or meetings to ensure that everyone knows and practices them.

Business Continuity
Planning
Cemedine considers the occurrenceof an emergency to be a businessrisk, and the Compliance and Risk
Management Committee supervises
business continuity planning (BCP).
Based on the lessons learned fromthe Great East Japan Earthquake,
the Committee has prepared a BCP
manual that defines matters such as
development of emergency response
systems at the head office, the rolesof each division and department inan emergency and preparations, andcoordination with and instructions foreach plant and distribution center.
The Committee is also examining
matters such as the initial emergency
response system at business sites
other than the head office (Osaka andNagoya Offices and Ibaraki and Mie
Plants) and considering company-wide training using simulations.

trol Report issued in the president’s
name.
In addition to these activities, theCompliance and Risk Management
Committee has each division anddepartment conduct its own risk survey, deal with any newly discoveredrisks, and report to the Committee(risk control self-assessment activities).

Group-wide Quality and Safety Initiatives
Cemedine Group’s Quality Assurance System

Compliance and Risk Management

Compliance Promotion
Framework

To manage risk, Cemedine has established the Internal Control Committee, chaired by the president,
which defines the flow of work foreach company function (sales, purchasing, manufacturing, settlementof accounts, etc.) and prepares work
descriptions.

The Committee examines risks(factors that contribute to the occurrence of misconduct) and controls(actions that prevent misconductfrom occurring) and designates particularly important controls as key
controls. The Internal Control Committee, together with a certified public accountant, conducts audits andreports the results to the Kanto Local
Finance Bureau in the Internal Con-

Information Management
Initiatives
To manage information, Cemedine
has installed mission-critical systems
at an external server center where allbusiness processing is performed
centrally in an environment protectedfrom external threats.
To prevent information leakage,transfer of information using USB
memory devices or other information
media is prohibited.
The Information Management
Office collectively manages security
for each information system andstrives to prevent virus intrusion andunauthorized access from outside.
Personal information is strictly
managed at the department level,
and the status of information management is audited each year
through internal auditing by the Audit
Office.

The Cemedine Group has five manufacturing sites in Japan and four
manufacturing sites overseas andmake various products ranging fromindividual customers to products
used at construction sites and in the
production of electronic parts andautomobiles. These products are
employed in diverse fields in Japanand around the world. The Group
continuously operates an ISO quality
management system to ensure thesupply of safe products of consistently high quality to customers. We
will continue to review the system inlight of the changing business environment while systematically raising
the level of quality assurance.

Quality assurance
at Cemedine
Similar to perishable foods, the adhesives and sealants manufactured
and sold by Cemedine have expiration dates. If products are not transported and stored at appropriate

temperatures, they may harden before use or hardening may be delayed.
Although few problems resulting
from temperature control during distribution or use have occurred in Japan, to deal with a higher incidenceof problems due to distribution andstorage temperature accompanying
increasing use in various environments overseas, Cemedine has begun employing handling methods forcertain industrial adhesives similar to
those used for perishable foods, including refrigerated distribution andstorage.
We will continue to focus on thehighest quality, making changes toensure quality and the delivery of
products in excellent condition.

manufacturing of superior products.
In addition, Cemedine contracts the
production and charging of certain
products to other companies in orderto manufacture and supply a greater
range of products. Accordingly, we
conduct periodic and ad hoc quality
audits of raw materials manufacturers and contract manufacturers.
These audits cover changes in manufacturing processes and production
sites. Through this auditing process,we confirm that the quality of eachproduct is maintained.

Audits of raw material
manufacturers and contract
manufacturers
The use of raw materials of reliable
quality is essential for the stable

Quality Assurance System in Japan
Cemedine’s Ibaraki Plant and Mie
Plant have obtained and maintained
for many years certification underthe ISO 9001 international standard
for quality management systems,
which they utilize as a quality management standard. The Japan Industrial Standards (JIS) are anotherset of standards for product quality
management established for eachapplication and product type. Cemedine has acquired certification
under a total of eleven JIS standards
for adhesives for buildings, adhesives for wood, sealants for buildings, and adhesives for generalwork, which we utilize in productdevelopment and manufacturing.
Cemedine C, our flagship product, is an example of a JIS-certified
adhesive for general work. Group

company, Cemedine Chemical Co.,
Ltd. (Okayama Plant) has preparedan equivalent quality management
system for manufacturing Cemedine
p ro d u c t s . A l t h o u g h C e m e d i n e
Chemical has not obtained ISO certification, it applies internal quality
management standards equivalent
to those of Cemedine. Having obtained certification for three JIS
standards covering adhesives forbuildings and sealants for buildings,
it has a production system capableof manufacturing the same JIS-certified products as Cemedine.

Accommodationof second-party audits
In recent years, an increasing number of customers are according importance to the appropriateness ofmanufacturing processes and requiring products manufactured throughthose processes to fully meet quality
standards. Consequently, more customers are visiting plants to confirm
manufacturing processes. We believethat the frank guidance we receive
during such visits and consequent
improvements to processes and facilities help us make better products.
Since issues raised by customers are often relevant to the requirements of other customers, we respond with horizontal deployment
and standardization in mind. We recognize that offering assurance tocustomers through plant visits is aprerequisite for a reliable manufacturer and we intend to continue improvement activities in the coming
years.

40

Rigorous Compliance with the Industrial Safety and Health Act
Initiatives
To maintain safety throughout all

and by establishing necessary volun-

activities and engages in such activi-

business operations, we strive totary standards. Each business site

ties. Furthermore, we pursue contin-

raise the level of health and safety by

maintains an organizational structure

uous kaizen, such as 5S activities, incomplying with laws and regulations

toall facets of the business.

promotehealthandsafetyBringing
society together
Experience-based safety training in Japan
with our adhesive technology
On August 17 and 18, 2015, three employees (two Thais and one
Japanese) of Cemedine (Thailand) and Asia Cemedine, Group

companies with business sites in Thailand, visited the Ibaraki Office for health and safety training. This was Cemedine’s first onsite health and safety training in Japan for employees of overseas
Group companies.
The training content included an introduction to the Ibaraki Plant’s health and safety activities, participation in a manufacturing site safety meeting, and an explanation of hazard prediction training (KYT) and the practice of KYT on the production floor. The trainees also
participated in experience-based safety education concerning hazards, such as being caught
in machinery and falls, which deepened their interaction with the plant employees.

Voice

Voice

Voice

Third-Party Opinion
Dr. Kazuhiro Bai
Ph.D. in Business Administration
Professor, Reitaku University, Faculty of Economics and Business Administration / Chikuro Hiroike School ofGraduate Studies, Graduate School of Economics and Business Administration
Deputy Director, Reitaku University Business Ethics and Compliance Research CenterIn the Social and Environmental Report, Cemedine Co., Ltd. (“Cemedine”) has systematically documented its engagement in CSR activities leading up to its centenary. I am pleased to provide the following third-party opinion with respect to the Company’s CSR activities from the perspectives ofpromoting CSR accounting, which attempts to quantify CSR activities, and business continuity.

Positive findings
One laudable aspect of this year’s report is that Cemedine has instilled its corporate philosophy “Respect people and contribute to society by providing better products to greater numbers of people” inevery aspect of its CSR activities, and moreover has linked this philosophy to preparation of the report.
Cemedine’s basic stance of engaging in CSR activities conceived with the corporate philosophy inmind and disclosing the process and results of activities in a report deserves recognition, and contributes greatly to Cemedine’s appeal to internal and external stakeholders (pages 19-20).
A second aspect of the report deserving of recognition is Cemedine’s documentation of its visionof globalization and concrete achievements as initiatives in preparation for the centenary (pages 11-14,
15-18). Providing a close-up look at initiatives to promote globalization, a matter likely to be of keeninterest to readers, not only promotes reader understanding of business activities, but also contributes
to strengthening of relationships with various stakeholders.
Furthermore, the development of a CSR management framework underpinning these characteristics reflects Cemedine’s groupwide commitment to press forward with CSR activities, such as proactive efforts to strengthen corporate governance for sustained enhancement of corporate value(pages 38-41). This report successfully reflects the fusion of business activities aimed at making better
products and CSR activities focused on connecting people, and Cemedine deserves credit for the
excellent report content.

Faculty member of Reitaku
University since 2001. President of Japan Society for Management Accounting, Vice
President of International Conference on Business Management (ICBM), and Member ofJapan Federation of Management Related Academies. Visiting professor, Faculty ofBusiness, Bond University(Australia), in 2008. Author ofnumerous publications, including Outlook on CSR Accounting (Moriyama Shoten) andRequirements for Corporate
Survival: Five Basic Rules for
Overcoming
Environmental
Changes (Reitaku University
Press).

Areas for improvement

1 41

Katsumasa Tamura

Cemedine (Thailand) Co., Ltd.

Cemedine (Thailand) Co., Ltd.

NoppacunPaul kayan

Sutthipong
Phatarajumruskul

Manager, Health and Safety Group
Health, Safety, and Environment Department

During work at a plant, somethingunsafe may happen at any time.
Possible causes include people,
facilities, and processes.
Participation in the SHEQ
training workshop at Cemedine inJapan heightened my consciousness of the critical importance ofsafety. In addition, KYT sharpened
my awareness that there are practical steps that we can take to reduce the number of accidents inthe workplace.
I think the most important
thing is for everyone to share thesame awareness of safety. People
are the most important asset.

I am responsible for plant equipment, including safety. In August
2015 I received experience-based
safety training at MOHKA company and learned about the importance of paying attention to safety
before starting work. Since returning to Thailand, I have been making use of this experience at theplant in morning talks, KYT, andSHE patrols. I am grateful to mycolleagues at Cemedine for thesafety instruction.

The highlight of training this time
was experience-based safety education. Employees in Japan participated together with the overseas
traineesinexperience-basedlearning to increase sensitivity tohazards. By experiencing hazards
that we may not necessarily encounter in the normal course ofwork, the trainees refreshed theirawareness of the importance ofsafety.
Moreover, to cultivate a safety
culture that accords the top priority to safety, they resolved to enthusiastically engage in safety
activities together inspired by the
motto “Safety activities know nonational borders!”

SocialandEnvironmental
ReportSocialandEnvironmental
ReportCemedine has made satisfactory improvement in linking governance-related information to CSR management to achieve the objective of sustained value creation, something I pointed out last year, as
evidenced by development of a management framework to contribute to realization of a sustainable
society (page 19 onward) and concrete initiatives to strengthen governance (page 38 onward) in the
Cemedine Group’s CSR section.
With regard to corporate information disclosure, expectations are high for disclosure of non-financial information and integrated reporting. An important key to communicating Cemedine’s initiatives tostakeholders in a more concrete and easy-to-understand way is whether the company can somehow
quantitatively assess non-financial initiatives and activities and convey this information to stakeholders.
I hope that Cemedine will achieve growth as an industry leader and an enduring company by engaging
in CSR activities that contribute to the realization of a sustainable society while directly addressingthese challenges.

Response to the Third-Party Opinion
Atsushi Saito
Executive Officer
General Manager, Quality Assurance Division

I would like to thank Dr. Bai for offering his valuable opinions again this year.
We engaged in the activities he favorably evaluated with the aim of imbuing CSR initiatives with thecorporate philosophy and deepening understanding of Cemedine among stakeholders. For the section Cemedine’s Procurement Bonds the World, we used a dialogue format to convey the roles of
Cemedine organizations involved in procurement in an easy-to-understand way in the words of employees. We expressed the Cemedine Group’s achievements in overseas initiatives more concretely tohelp readers grasp the reality of what we are doing. Thanks to Dr. Bai’s understanding that thesebusiness activities and CSR activities are linked, continuous activities and positive evaluation, we wereable to confirm the direction for enhancement of corporate value.
Mindful of Dr. Bai’s recommendations, we will continue efforts to instill responsible product development and production throughout the Cemedine Group, enhance the supply of safe and reliable
products, and develop CSR activities that heed the voice of stakeholders and contribute to a sustainable society.

42