F-TECH CSR REPORT 2018

On the Global Way

Challenging Spirit

Respecting People

Editorial Policy
F-tech Inc. has reported the status of the Group’s global initiatives from an environmental perspective and a social perspective
since FY2010.
The 13th Mid-term Management Plan started from FY2017, and based on a social background whose perspective gives serious
consideration to CSR*1 and ESG*2, at this time the Group has changed from the “Environmental Activity Report” format to a “CSR
Report” format.
This report is issued as one of a communication tool for the stakeholders in relationship with our CSR activities covering CSR
performing structure, governance and compliance, human rights and labor, environmental protection, safety and quality, and all
aspects of society in a reader-friendly manner. The details reported thus far about, among other things, the environment and society
will follow previous contents so as to ensure continuity. Going forward, we will strive to provide even more complete details.
This report is prepared with reference to the Ministry of the Environment’s “Environmental Reporting Guidelines (Fiscal Year2012 version)" for environmental matters and to ISO26000 with respect to social responsibility matters. Further, in this report, theF-tech Group is referred to as the “F-tech Group” or “the Group” and F-tech Inc. is referred to as “ F-tech” or “the Company”.
*1

CSR: corporate social responsibility*2

ESG: From the perspective of companies aiming at sustainable growth, the three areas that should be emphasized: the environment (E),society (S), and corporate governance (G)│ 1 │ F-TECH CSR REPORT 2018

Contents
01 Editorial Policy
03 Message from the Top
04 Corporate Philosophy and CSR
05 Overview of Corporate Activities
06 CSR Management System
07 Governance Initiatives
09

Timely and Appropriate Information Disclosure
Human Rights and Labor Issue Initiatives

11

Initiative to Create a Comfortable Working Environment

12

TOPICS Toward a Work-Life Balance

13

TOPICS Motivation for Work
Initiative for Environmental Protection

Making Profit

14

Environmental Management System

15

FY2030 Goals and the 13th Mid-term Management Plan and the Initial Year’s Results

19

Supply Chain Management20

Research and Development Initiatives

21

TOPICS The 8th Global Environmental Conference

22

TOPICS FTZ Wins “Environmental Award” from a Customer
Initiatives for Quality and Safety

23

Quality Assurance Initiatives

24

Initiatives for Labor and Safety & HealthSocial Contribution Activities and Overall CSR Activities by each Area(s)25Social Contribution Activities

26

CSR Activities by Area

32 Overview of the F-tech Group
Future Predictions, Plans, Goals
This report contains future forecasts with respect to the “Reporting Organizations” in the Group listed below. The
statements contained herein are forecasts based on information current at the time of inclusion and are not conclusive. For
this reason, the results of future business activities may differ from the forecasts discussed in this report.

Reporting Period
FY2017 (April 2017-March 2018) achievements and partial contents outside the scope of the reporting period.

Reporting Organizations★ Operational sites in Japan ○Affiliated companies in Japan●Affiliated overseas companies

F-tech Inc. [Reporting sites 3 sites]★ Head office, and Kuki plant (Kuki City, Saitama)★ Haga Technical Center (Haga Town, Haga-gun, Tochigi)★ Kameyama Plant (Kameyama City, Mie)

Overseas Subsidiaries [Reporting organizations:
12 companies, 14 sites]● F＆P Mfg., Inc. (Ontario, Canada) (F&P)● Dyna-Mig, A Division of F&P Mfg., Inc. (Ontario, Canada) (DYNA-MIG)● F&P America Mfg., Inc. (Ohio, United States) (F&PA)● F&P Georgia, A division of F&P America Mfg., Inc. (Georgia, United States) (F&PG)● F-tech R＆D North America Inc. (Ohio, United States) (R&DNA)● F.E.G. DE QUERETARO S.A. DE C.V. (Queretaro, Mexico) (FEGQ)● F&P MFG. DE MEXICO S.A. DE C.V. (Guanajuato, Mexico) (FPMX)

Three Domestic subsidiaries, and an affiliated company[Reporting organizations: 4 companies]○ Fukuda Engineering Co., Ltd. (Kazo City, Saitama) (FEG)○ Kyushu F-tech Inc. (Yamaga City, Kumamoto) (QFT)○ Reterra Inc. (Ogano Town, Chichibu-gun, Saitama) (Reterra)○ Johnan Manufacturing Inc. (Ueda City, Nagano) (Johnan Manufacturing)● F-Tech Zhongshan Inc. (Guangdong, China) (FTZ)● F-Tech Wuhan Inc. (Hubei, China) (FTW)● F-tech R&D (Guangzhou) Inc. (Guangdong, China) (FR&DCH)● F-tech Philippines Mfg., Inc. (Laguna, Philippines) (FPMI)● F-tech R&D Philippines Inc. (Laguna, Philippines) (FR&DP)● F-tech Mfg.(Thailand)LTD. (Ayutthaya, Thailand) (FMTL)● PT. F-TECH INDONESIA (Karawang, Indonesia) (FTI)※YANTAI FUYAN MOULD Co., Ltd, the Michigan branch office, and the European
branch office are outside the reporting scope since they are not mass
manufacturing facilities and do not have any significant impact on the environment.

F-TECH CSR REPORT 2018│ 2│

Message from the Top

We will make every effort toachieve sustainable growth and
CSR based on the policy of“Back to Basics and Challenge for New.”
President & CEO

Yuichi Fukuda

Based on a new company-wide policy, theF-tech Group will become the No.1 "Global
Suspension System manufacturer".
With the commencement of the 13th Mid-termManagement Plan, the Group established a newcompany-wide policy of “Back to Basics, Challenge for New”
in FY2017. In moving forward with the new mid-term
management plan, what we need to pursue as a specialized
manufacturer of suspension systems (such as subframes,
suspension component parts, and pedal controls) is toprovide our customers with the "No. 1 Suspension parts” ofworld-class quality.
These days, technological innovation in the automotive
industry is moving at a pace never experienced in the past.
Especially during these times of drastic change, by reflecting
the essence of “Back to Basics” in our business, mastering thebasics, and “Challenge for New” for new growth with anattitude of “Persisting our Specialty”, the thought of theGroup is to provide maximum value through “challenging tocreate new value” to our customers who want to achievesustainable growth.

Realizing a sustainable society to move forwardwith stakeholders carry “growth with value”
The Group is expanding its business operations premised on
our mission statement of “From a global perspective, we
strive to contribute to our society and to improve the qualityof life through manufacturing of highest quality productswith ambition and sincerity.” as mentioned in the Corporate
Mission Statement.
The Group believes that our commitment to working
toward, not merely sustainable growth, but protection of the│ 3 │ F-TECH CSR REPORT 2018global environment and a harmonious coexistence with allof our stakeholders, including all shareholders, customers,
business partners, employees, and regional societies, islinked to a prosperous future and the realization of asustainable society. This is exactly what the Group means by“growth with value”. Even when society is drasticallychanging, the Group always thinks about what “appropriate
corporate conduct” is and will ensure that what should bedone to realize a sustainable society is done.

We publish this “CSR Report” with a broadened
perspective of various CSR subjects from the“Environmental Report”
Until now, the Group has compiled and issued the “F-techGroup Environmental Report” that focuses on our initiatives
to protect the environment. However, to realize asustainable society, a CSR perspective that includes
satisfactory communication opportunities with all
stakeholders is essential. We believe that we can achieve ourgoals by moving forward with multifaceted initiatives suchas a corporate governance system to ensure appropriate
corporate judgement, respecting the human rights of
employees, maintaining a safe and healthy work
environment, maintaining and improving product quality,
protecting the global environment, and promoting
contribution to society.
On the occasion of the 70th anniversary of the Company(F-tech Inc.), in FY2017 and the start of the 13th Mid-termManagement Plan, we decided to publish the "F-tech CSR
Report" with additional subjects focusing on our goals of
broader contributions to society and the environment.

Corporate Philosophy and CSR
Mission Statement
From a global perspective, we strive to contribute to our society andto improve the quality of life through manufacturing of highest quality productswith ambition and sincerity.

Corporate Philosophy

Challenging Spirit

R e specting People

Making Profit

Our Code of Conduct
Environmental protection

Compliance with laws and ordinances
We always give top priority to ethically appropriate conduct in all
our activities. We always comply with laws and ordinances andact with a good social conscience as a good member of society inkeeping with being a company with a high commitment to legal
compliance.
If we discover any violation or possible violation of any laws,
ordinances or company rules, we will report the matter, makesuggestions, and consult with our direct supervisor or the
Corporate Ethics Kaizen Window.

Respect for human rights
We respect all individual and human rights of our colleagues in
the workplace.
We do not tolerate any child labor, forced labor, discriminationor any type of harassment that violates human rights.

We will endeavour to protect the environment, with the belief
that the Earth belongs to all humankind. We always consider
minimizing the impact on nature and optimize energy resource
utilisation in production.

Increasing corporate value
We believe the purpose of a company as a going concern is thecreation of value. We will always strive to maximize sociallyaccepted corporate values by bringing profit long-term for ourshareholders and society.

Disclosure and management of information
We strictly distinguish and manage information from personal,
company confidential, and to be disclosed appropriately.
However, we strive to publicly make available any required
information in accordance with respective laws and corporate
regulations appropriately and in a timely manner.

Labor and Safety & Health
We will establish a safe and secure work environment for all our
employees, and maintain a pleasant and safe work environment.

Fair transactions
We always ensure business is conducted in a free, equal and fairmanner with transparency, and will not engage or agree with any
irrational, corrupt business practices.
We will not allow giving and receiving of any benefit orconvenience beyond reasonable and legal limits sociallyacceptable, and we will not maintain any unfair relationship with
political parties or government authorities.
We will never permit or tolerate any relationship or connection
with any anti-social organizations or behaviors which may
threaten the safety and well-being of our society.

Quality
We strictly follow the highest standards and procedures giving
top priority to provide products and services with the top quality
and safety to meet customer's highest expectations.

Compliance with company rules
We create our company’s internal rules and regulations based onrational reasoning and relevant objectives to create a fair andequal work environment and we commit to communicating with
our employees effectively.

Traffic safety

Community involvement

As a member of the automotive components manufactures, wealways observe traffic safety laws, rules and regulations, being agood citizen on the road by giving way to others on the road.

Being a member of the local community, we support the creationof an equal, wealthy and well-being of our society throughparticipation in local community development, promotion ofcultural, educational, and the improvement of the welfare of thelocal society.

Realizing the corporate
mission statement

Corporate philosophy and CSR

Environment

Quality and Safety
Society

Realizing CSR

Implementation of Our Action Guideline

Time

Corporate Philosophy
Ch a l l e n g i n g S p i r i t

Respecting People

Making Profit

Realizing a sustainable society

Corporate value

Governance
Human rights and LaborF-TECH CSR REPORT 2018│ 4│

企業活動概要
Overview of Corporate Activities
Start the 13th Mid-term Management Plan and move steadily
forward with our initiatives.
Financial Indicators■SalesIncrease of 31.1% over the past five years as a result ofcustomer expansion and increased number of vehicles
sold in China.
■Operating income
Despite operating income in FY2016 exceeding 8 billion
yen, FY2017 experienced increased labor costs anddecreased production efficiency associated with thedeteriorating employment situation in North America as
well losses from the launch of a new car model, resulting
in overall operating profits 6.8 billion yen, at the samelevel as FY2015.
■Interest-bearing debt
In FY2017, interest-bearing debt amounted to 59,500
million yen from new investments associated withincreased orders from new customers and existingcustomers.

Environmental Indicators■CO2 Emissions Volume
Goal: 6% reduction from the FY2013 CO2 emission
intensity
FY2017 achievement of intensity was 0.44t-CO2/sales of 1
million yen (improved 11% over FY2013)■Water Resource Usage Volume
Goal: 4% reduction from the FY2013 water resource
usage intensity
FY2017 achievement of usage intensity was 2.85㎥/salesof 1 million yen (improved 12% over FY2013)■Waste Emissions Volume
Goal: 4% reduction from the FY2013 waste emission
usage intensity
FY2017 achievement of usage intensity was 0.040 tons/
sales of 1 million yen (13% deteriorated from FY2013)■Interest-bearing debt ratio
Although there was an increase in interest-bearing
debt to 42.6% at the end of FY 2014 as above, the rate
decreased to 39.5% at the end of FY2017 due to the total
asset increase mainly.

Item

Financial Indicators
Environmental Indicators

Unit

FY2013

FY2014FY2015FY2016FY2017Sales

1 million yen

172,456

175,579

196,343

197,941

226,060

Operating income

1 million yen

6,725

5,564

6,821

8,035

6,856

Operating income
ratio

％

3.9

3.2

3.5

4.1

3.0

ROE

％

16.2

6.3

9.1

12.8

12.8

Interest-bearing debt
balance1 million yen

44,67456,57058,68659,12959,508Interest-bearing debt
ratio

％

40.2

42.6

42.5

40.9

39.5

CO2 Emissions Volume(intensity)

t-CO2/1 million
yen sales

0.50

0.46

0.43

0.48

0.44

Water Resource Usage
Volume (intensity)

m3/1 million yen
sales

3.24

3.18

3.16

3.23

2.85

Waste Emissions
Volume (intensity)

ton/1 million yen
sales

0.036

0.033

0.040

0.048

0.040

│ 5 │ F-TECH CSR REPORT 2018

CSR ManagementCSR体制
SystemThe F-tech Group has built a company-wide CSR management
system to achieve balance between improving corporate value
and CSR.
The Group has expanded its CSR
initiative by starting a company-wide
CSR committee.
The F-tech, as a global company, has expanded its
business activities in areas such as Japan, North America,
and the Asia-Pacific region, we conduct our business inthese regions fully understanding our social responsibility
in each region.
While the head office, operational sites, subsidiaries,
and an affiliated company are involved in activities forenvironmental protection in Japan, the Group also holds
an annual group-wide Global Environmental Conference
to share information. In addition, the head office carriesout various planning and global business expansion
activities, including the global development of theanalysis and improvement measures for the Group’s
products' quality, the employees' safety and health,
governance, the employees’ work style, and compliance.

Each company in the Group in North America andthe Asia-Pacific region have been engaged in initiatives
gradually from 2015 to implement the ISO50001 andvarious environmental protection and has expanded its
regional social contribution activities.
We started a company-wide CSR committee in 2017
to standardize such CSR activities as the Group and to
generate a group-wide synergistic effect. The companywide CSR committee aims to even further globallyenergize CSR activities while sharing details of theactivities carried out by each department or related
divisions based on the company CSR policies. Further,each company chooses an important issue from eachtheme, and then tries to resolve that issue by developing
its own improvement activities independently. We aim
to improve the company-wide CSR level by having
each company share the details of their efforts at thecompany-wide CSR committee.

The F-tech Group hopes to improve the sophistication of its group-wide CSR activities
by building a CSR Management System on a global level.

Board of Directors
Chief Company-WideCSR Officer

Executive Vice President

Committee Chairperson

Company-Wide
CSR Committee
Company-WideCSR Officer

Division Manager ofManagement Planning

Secretariat

Committee Member

Promotion Director Each Division Manager
Each Department Leader
PromoterGeneral Affairs Department ofManagement Planning Division

Global Committee
MemberPromotion Director
PromoterRegional
Society

Quality assurance
and Product safetyPRcommittee
Management
planning
division

Qualityassurance
evaluation
meeting
Production
planning
division

Company-Wide
CSR Committee
ReportInstruction

Compliance

Environment

Compliancecommittee
Management
planning
division

Environmental
conference
Production
planning
division

Human Rights
and Labor

Corporate
Governance

Safety and
HealthCommittee
Production
planning
division

Riskmanagement
committee
Management
planning
division

Each Site Manager
Each Related Executive

F-TECH CSR REPORT 2018│ 6│

Governance Initiatives
As a global company, striving to improve sustainability,
strengthen and reform the governance structure
Corporate Governance Structure

The Group committed management that focus
stakeholders in mind, including all of the shareholders,business partners, and creditors, as well as regionalsocieties, and workers, the Group is endeavoring
to maximize the Company’s continuous and longterm shareholder return as a basic goal for corporate
governance.
As the decision-making body for management issues,
the Company’s board of directors, consisting of 11
directors (including 2 outside directors), monitors andimplements, among other things, major operational
matters and decisions relating to legal matters. We
separate the management and oversight function.
We have introduced an executive officer system tostrengthen the decision-making and oversight functionsof the Board of Directors as well as expediting the
conduct of business.
In addition, to ensuring monitoring of management,
F-tech has appointed 2 highly independent outside
directors, whose external viewpoints are actively
incorporated in management. Moreover, the directors’
terms of office are limited to one year to facilitate theCompany’s ability to respond proactively to changes inthe business environment.
As a company that has elected an Audit & Supervisory
Board-style structure, F-tech has the Audit & Supervisory
Board consisting of 4 Audit & Supervisory Board
Members (including 2 outside Audit & Supervisory Board
Members). Each Audit & Supervisory Board Member,in accordance with audit policies and individual work
assignments established by the Audit and Supervisory
Board, audits the directors’ performance of their workthrough, attendance at meetings of the Board of
Directors, business operation execution, and review its
corporation assets and financial condition.

Initiatives for Japan's Corporate
Governance Code

From June 1, 2015, the Corporate Governance Codewas applied to increase international competitivenessby aggressive capital investment aimed to improveenterprise value and as with a corporate code initiative,emphasizing shareholders’ return resulting therefrom,and improving shareholders’ rights. F-tech establishedcorporate governance guidelines clarifying its wayof thinking as well as a corporate governance reportwhich clarifies its company’s stance. As of the end ofJune 2018, the matters for which the Company provides
explanations are as below.
(Supplementary principle 4-2-1)
Management remuneration incentive(Set the balance of cash and stock)
Although the company has not introduced treasury
shares for directors’ remuneration, directors andothers may obtain shares by contributing the fixedcash component of its fixed remuneration to thedirectors’ shareholding system, thereby aligning theirvested interest with those of the shareholders, thereby
promoting the corporate’s sustainable growth andincreased corporate value over the mid-to long-term.
(Supplementary principle 4-10-1)
Use of optional approach(Consideration of nomination and remuneration committee)
Although F-tech does not use the optional approach,decisions concerning candidates for directors andexecutives and their remuneration is determined ata meeting of the Board of Directors after proactively
listening to opinions of the outside directors and careful
deliberation.

Corporate Governance Structure
Shareholder meeting
Selection/Removal

Selection/Removal

ReportAccounting

Exchange opinions

Auditor(s) Audit

Board of Directors
Selection/Removal

Report↑ ↓SupervisionInternal Audit Office

Audit

Representative Director↑ReportGeneral Counsel

Audit &
Supervisory Audit
Board

Management Meeting

Corporate Ethics Committee
Risk
Management Committee
Controls and Monitor

Each department, affiliated company, subsidiary

Internal control system│ 7 │ F-TECH CSR REPORT 2018

Governance Initiatives

Compliance Initiative

In October 2004, the Group created a "Corporate Ethics
Committee" (Chairperson: Appointed from the Board of
Directors as a Compliance Officer), comprised of executive
officers, as a body to verify the status of compliance, andprepare and set policies, from time to time and makedecisions on response policies of important matters thatcannot be handled by divisions, including the protectionof proponents, and provide instruction for improvement
to relevant divisions, so that strict compliance status canbe verified at all times.
In November 2004, to prevent violations of laws andregulations and our articles of incorporation, we set forth
our corporate conduct standards based on improvementof corporate business ethics and legal compliance “Our
Action Guidelines”, and we are involved in activities
to promote compliance at the Company and in our
subsidiaries. To ensure compliance, in June 2006, theCompany established “Compliance Regulations” about
ethical corporate conduct based on improvement ofcorporate ethics and legal compliance.
The Company established the “Corporate Ethics Kaizen
Window”, a system to protect corporate whistleblowers,
which allows employees and other workers of theCompany and its subsidiaries to directly report to theCompany or consult about an action that violates, or
may violate, laws or the articles of incorporation or social
ethics.
In FY2015, at the Company a new Compliance
Committee was put in place as a structure for expanding
compliance-related matters. In addition, we created amore user-friendly environment for suggestions to bemade on an anonymous basis by using an outside law
firm as a window for suggestions exclusively for theCompany, while at the same time, creating a window
for suggestions to the auditors and outside directors.
In addition, we reviewed the contents of “Our Action
Guidelines”, and revised it to be more reader-friendly inthe form of a brochure, “Our Action Guidelines and the
Corporate Ethics Kaizen Window”, which has been redistributed to all workers.
As part of our compliance training going forward, we
will continue to provide compliance training to directors
and workers and will strive to maintain and improve
compliance awareness.

Risk Management Initiatives

The Company and subsidiaries have a structurethat prevents risk of loss by recognizing the risks
associated with major business operations, placing
responsible managers from a professional perspective
in departments in charge, and holding meetings. As thefoundation for the risk management systems, in June
2006, we established "Risk Management Regulations",
decided upon responsible persons for individual risks toregulate the risk management systems. In the case of an
unforeseen event, an emergency task force in which the
President acts as general manager and the Vice-President
or the responsible director acts as assistant generalmanager, is put in place to prevent additional damage
and minimize environmental harm after consulting withoutside lawyers and others.
In normal times, the risk management officer
appointed from the members of the Board of Directors,
gathers appointed risk management managers fromeach division and hold a risk management conference
every six months and report to the Board of Directors.
In such conference, they discuss the identification ofpotential risks in each division, analysis of such risks, andthe operational status of preventive measures.
A risk management committee was established in
FY2014 that follows company-wide risks and develops
group-wide responses to actual risks and preventionof their reoccurrence. At the same time, a Compliance
Committee was created composed of member of the
Corporate Ethics Committee, a group tasked withthe company-wide expansion of matters related tocompliance. Starting in FY2015, both committees have
met twice a year, with the Company and our subsidiaries
conducting its own verification each year using achecklist prepared for each business, and reportingand deliberating on their respective verifications. We
have established the company-wide CSR committee
since 2017. The reports are shared and deliberated by
3 committees; the company-wide CSR Committee, theRisk Management Committee, and the Compliance
Committee, and a final report and the verification resultsfrom all of the Group companies are made to the Boardof Directors.
These three committees are designed to identify
various company-wide issues related to CSR, risk, andcompliance, follow such risks, improve actual risks,and develop company-wide measures for preventing
reoccurrences as a part of the Company’s corporate
governance, and strengthening of the internal controls
system.

F-TECH CSR REPORT 2018│ 8│

Timely and Appropriate Information Disclosure
Increased transparency of general management and sustainablegrowth through timely and appropriate information disclosure
We will disclose information appropriately and in a timely manner as “appropriate information disclosure” and “the policyof meaningful dialogue with shareholders” are stipulated in the Company’s Group Corporate Governance Guidelines.

① Appropriate information disclosure(F-tech Corporate Governance Guidelines, Article 14)
Striving to building a relationship of mutual trust withall stakeholders, including shareholders, the Company
ensures management transparency by disclosing fairly
and in a reader-friendly manner information, including
not only legal disclosures, but also management policy,
financial status, and business initiatives.

② Constructive dialogue with shareholders(F-tech Corporate Governance Guidelines, Article 34, Paragraph 1)
Based on the recognition that constructive dialogue
with shareholders is essential to enhance sustainablecorporate growth and increased corporate value overthe mid- to long-term corporate value, F-tech uses every
effort to engage in such mutual dialogue.

Policy related to constructive dialogue with shareholders
Based on the recognition that constructive dialogue with shareholders is essential to enhance sustainablecorporate growth and mid- to long-term corporate value, F-tech approaches these dialogues based on
the following policies.
・To the extent reasonable, dialogues with shareholders are conducted by the President & CEO, thedirector with oversight for IR, other management, or managers from the division responsible for IR.
・The division responsible for IR shall collaborate with and engage in meaningful dialogue with theinternal related divisions.
・We increase the Group’s corporate value through shareholder dialogue by endeavoring to disclose
information for determining the mid- to long-term corporate value.
・The IR team plans to conduct multiple IR activities, in addition to individual interviews, including
holding financial results briefings and facility tours and attending IR fairs.
T・ he executive officer responsible for IR conscientiously conveys policies of the companies toshareholders through dialogue and shares any opinions he receives from shareholders to directors andothers.
・In order to thoroughly fair information disclose, the IR executive officer strictly controls important nonpublic information in accordance with company rules.

Communications with allshareholders and investors

Communications with Institutional
Investors

The Company endeavors to make timely andappropriate disclosure of information to allshareholders and investors.
In addition, we endeavor to create opportunities
for communication with everyone through various
events, the shareholders’ meeting and corporate
informational meetings for individual investors inorder to further deepen the understanding of all
the shareholders and investors about the Company.
From now, we will expand activities for evendeeper understanding of the Company and theGroup for people to become fans of F-tech.

Twice a year in May and October, F-tech holds afinancial results briefing for institutional investors,
analysts, and media-related persons where thePresident & CEO explains the achievements,
business plans, and other topics.
In addition, F-tech creates communication
opportunities for domestic or foreign institutional
investors, analysts, and the media on a quarterly
basis through telephone conferences and individualinterviews.

│ 9 │ F-TECH CSR REPORT 2018

Timely and Appropriate Information Disclosure
IR Activities

Financial Results Briefing
Date: May 11, 2017
Location: Station Conference, Tokyo

May.

Shareholders’ Meeting (62nd)
Date: June 23, 2017
Location: Hotel Rafre Saitama, Momo Room (5th Floor)

June.
Exhibition for
Human and Automotive Technology
Date: June 28-30, 2017
Location: Portemesse Nagoya

July.
Informational Meetingfor Individual Investors

Aug.

Date: July 6, 2017
Location: TKP Omiya Station West Exit Conference Center

Nikkei IR and 2017 Investors' Fair
Date: August 25-26, 2017
Location: Tokyo Big Sight

Sept.

Oct.

Informational Meetingfor Individual Investors
Date: December 5, 2017
Location: Kuki Sogo Bunka Kaikan

2nd Quarter Financial Results Briefing
Date: November 8, 2017
Location: Station Conference, Tokyo

Nov.

Dec.

Automotive
Lightweight Technology Expo

Facility Tours for Individual Investors

Jan.

Date: January 26, 2018
Location: Kuki Head office, and plant

Date: January 17-19, 2018
Location: Tokyo Big Sight

Feb.

F-TECH CSR REPORT 2018│ 10 │

Human Rights and Labor Issue Initiatives
Striving to create a comfortable working environment bymaking respect of human rights of paramount importance andemphasizing workers’ work-life balance.
As we expressed as the corporate philosophy, "Respecting people", the Group does not discriminate in any manner basedon gender, nationality, religion, culture or belief and treats all of its stakeholders in a fair manner in good faith.

Diversity Initiative

The Group is committed to ensuring diversity. To fully
utilize each person’s individuality, by providing equal
opportunities taking such individuality into consideration,
employment practices aimed at increasing women andminorities, and involving older adults, we are creating aframework in which everyone can actively participate.

Work-Life Balance Initiative

Based on the thought that a person’s having fulfilling
private time is necessary to be motivated at work, theCompany takes action to achieve a work-life balance.
To reduce much overtime, monthly overtime limited
to 20 hours as a standard, and working time is managed
reasonably. We are aggressively managing a given
compensatory day off when work on holiday, and cutoffs
of paid vacation must not happen. (Except for the
management level, workers have taken 100% of their
paid holidays for 10 years in a row).
Even more, the Company provides that allows
individuals to adjust work to their lifestyle, including paid
holidays taken on a half-day basis, flextime, and shortertime work.

Active Participation of Women

Based on the Promotion of Women’s Participation Act,
"Act on the Promotion of Female Participation andCareer Advancement in the Workplace" ("Promoting
female participation and career advancement Act"), weare proactively promoting women to the executive andmanagement ranks (currently, 1 woman executive, and2 women managers) and aggressively hiring womento increasing their overall percentage in the total
work force (18 women were hired in the last 3 years).
In addition, for delivering and child care, the Group is
promoting employees' awareness for various support

with expanding the leave system and a guidebook for theabsence period. And, prior to the employee return to theoffice, a three-way prior interview meetings will be heldamong employees, the current manager, and HR advisor
to support for planned and smooth return to the office.
As a result of promoting these support measures, inthe past three years women taking maternity leave andreturning to work has reached a 100% level (17 tookmaternity leave, 20 returned to work). In the past 3 years
the number of men taking paternity leave has graduallyrisen to four.
With the initiative mentioned above being highly
acclaimed, the Company was awarded a certification(known as the “Kurumin mark”) in May 2018 under the
Act on Advancement of Measures to Support Raising
Next-Generation Children.

Initiative for Promotion of Human Rights AwarenessAt the Company, from the perspective of respecting
human dignity, employees respect others and areprovided training to prevent the occurrence of, among
other things, power harassment, including child laborand forced labor, and sexual harassment. Each year the
status of human rights respect of all employees is verified.
Further, internal and external whistleblower hotlines
have been set up so that persons who believe that ahuman rights violation has occurred may consult on an
anonymous basis.
Consultation counter: Corporate Ethics Kaizen Window
Mental health consultation counter

Achievements received recognition
Certified as a “Saitama
Senior Activities
Promotion Declaration
Company” (FY2016)

Gold certification by
Saitama as a “Company
with Diverse Work Styles”(FY2015)

Policies Taking Work-Life Balance into Consideration

Obtained “Kurumin Mark”
for child-raising support(FY2018)

・Expansion of Half-Day Paid Holiday System for Shorter-Time Work Employees
・Expansion of shorter-time work system for employees who have children up through elementary school 3rd grade
・Work-life balance support for employees who have child care or look after elderly family member
・Paid vacation taken, no cutoffs for carry over vacation days →18 continuous years
・Flex-time system introduced at Haga Technical Center│ 11 │ F-TECH CSR REPORT 2018

TOPICS

Toward a Work-Life Balance

The more satisfying my personal life, the more motivated I am at work!
Promote to well-informed these initiatives to employees.

Human Resources Department

Tomoko MoriAt the Company, we strive to create a “comfortableworkplace”, not only for those engaged in childcare
and caregiving, but also for all employees so they canbalance work with their private lives.
ur system for balancing childcare for pre-school
children is in place, with temporary shorter-time
employees for taking care of children who in 3rd grade inelementary school, which is beyond the legally stipulated
level. Based on the increased number of men using thehalf-day paid holiday system for childcare (ten times ayear), we can see the current situation where both men
and women are involved in childcare.
or my first child, I was able to return to work 9 months
after giving birth since I was able to enroll my childin nursery school. Taking care of an infant was moredifficult than I imagined so my ability to shorten mywork hours to 6 hours a day was very helpful. With theability to switch over from working time to child-caring,
I had a sense of fulfillment even though I was very busy.
In addition, I became aware of how to work efficiently
with limited time. As my child has grown, I have chosen
a 7-hour shorter-time work. Going forward, I think that
expanding choices for work time to include not only
shorter-time work, but also flex-time, and staggered work
hours, would be a good idea.

OF

T

here are some people who, unaware of the existenceof childcare and caregiving programs, consider
quitting their jobs. Currently, the “Childcare andCaregiving Coexisting Support System Guidebook” isavailable on the portal site (April 2017) and briefing
sessions for managers about this system are conducted
at every work place.
believe that you can freely contact management andthe HR Department about any concerns you have.
When it comes to promotion
to use up paid holidays andovertime regulations andthe like, it may go without
saying, that there are very
few companies that reallycomply with these kinds ofissues. From now on, I hopethat the Group will haveinitiatives for such issues
as the caregiving issue andpromoting active seniors, inaddition to those related tochildcare.

I

In May 2018, the Company received the “Kurumin certification”. In the 6 months prior to
submitting the application, we had to prepare a lot of related documents, and even after
submitting the application, there were many points we had to follow up on and confirm. Finally,
we received certification two months after submitting the application!
Since we are planning to get our second certification in April 2021, by then we need to makesome systematic progress toward achieving such goals as “briefing sessions with managers
about the childcare/caregiving system” and “implementing a prior interview system formaternity leave and return after childcare leave.”

F-TECH CSR REPORT 2018│ 12 │

TOPICS

Motivation for Work

The issue of how much internal opinions and requests and those ofbusiness partners can be reflected

Product Development BlockTomoyuki YokotaIdecided that I wanted to do work involving“monozukuri” (or design and manufacturing) whenI entered F-tech. At that time, the Company gave theimpression of being a company that wanted to grow by
taking on many challenges beyond the manufacture ofhydro foam and pedals with collision safety mechanism.
Being able to experience personal growth by working inthis kind of company as the company itself grew was a
deciding factor.
esigning specifications that satisfy the specs
required in a product cannot be achieved justworking by yourself at your computer, such as doing
CAD modelling and performance evaluations with CAE.
Making adjustments between the business partners andthe Company is also essential. I think that how to reflect
the opinions of various departments in making a highquality, easy to manufacture, value-added
expensive product is a chance for a designer toshow his or her skills.
ven in the automotive industry, amidst
a growing response to environmental
concerns, such as regulation of fuelconsumption and gas emissions, weight
reduction in vehicles including electricallypowered cars, increasingly high-performance
products are required, including lightweightcomponent parts, improved energy efficiency,
and reduced air resistance. To accommodate
the foregoing, in the development field,
advances in technological elements need to bereflected in specification design. Personally, by
always bringing my inspiration into the work

DE

│ 13 │ F-TECH CSR REPORT 2018that I do, I hope that will be able to continue with thefulfilling work I am currently doing and create appealing
products.
or example, to realize weight reduction, we fully
utilize various optimized analytic technologies, toaccommodate production engineering requests fromthe Product Division, finally we reach to create attractive
specification proposals. In this way, we have achieved
significant weight reduction over the previous model.
hen I see cars being driven around town whichhave parts that I designed, I really feel that I chosethe right job!

F

W

Initiative for Environmental Protection
Focus on continuous training of “energy-saving core humanresources” for the F-tech Group
F-Tech Group’s Company-wide
Environmental Management System

Compliance Obligation” covering such topics as how toevaluate compliance, the details of legal regulations andthe like.

The Group believes that environmental issues are one of
the most pressing issues that companies should address.
The Group’s effort to obtain ISO14001 certification in
Japan got underway from 1998. The completion of
ISO14001 certification of its overseas production sites in2009 also marked the building of the Group’s Companywide Environmental Management System. Further, thecertification of the newly established production site in
Mexico was completed in May 2017.

Environmental Education

The Company emphasizes the importance ofenvironmental education for employees and conducts
such courses as energy-saving training and an internal
auditor training program, in addition to the ISO14001
basic course, which is registered as a required course.
In FY2015 the “Energy Diagnostic Basic Course” wasfirst offered, and by FY2017, it had been attended by
33 employees from the Company and 32 employees
from 3 overseas sites. This course was also registered as arequired course, and the human resources developmentof people capable of energy diagnostics was a focus of
the ISO50001 energy review.
In addition, as part of the Group’s employee
environmental education, employees are actively
participating in societal contribution activities andBiodiversity activities that are planned Even further,each overseas site is conducting creative environmental
education initiatives.

Organizational Structure

The Group started building its Company-wide
Environmental Management System from 2008. Thissystem was built so that site manager is the person-incharge at overseas production sites and each site has aperson responsible for implementation.

Compliance with Laws and Regulations

There is a large variety of laws and regulations relating
to the environment that vary by country and region.
Certain of the overseas sites have entered into consulting
agreements with external specialized agencies to ensurecompliance with laws and regulations. Three domestic
sites in Japan have introduced Electronic Manifest
Systems for industrial waste and we are enhancing
the management of legal compliance with respect towaste treatment. In addition to holding company-wide
environmental conferences every three months to confirm
changing circumstances in their respective current status
and regulatory standards, starting from FY2017,we havebeen striving to ensure that the entire Group is legallycompliant by, among other things, gathering legal
compliance officers from every operational site andplanning and once again holding the “Seminar about theInternal Environmental Audits

Internal environmental audits conducted regularly
based on the Environmental Management System andthe Energy Management System of the each of theCompany’s production sites to ensure the effectivenessof these systems.
To conduct effective audits, the Company regularly
holds internal environmental auditor seminars and iscontinuously striving to increase the number of auditors.
Conducting fair audit by participation of auditors fromvarious divisions. In FY2017, 28 auditors participated ininternal audits.

■F-tech Group Environmental Management System
President
Director in charge of environment (Director of Production Planning Division)
Global Environmental Conference
Asia-Pacific 4 sites
Site representative・Environmental Management
Officer・Environmental management
implementation officer (local staff)

Japanese
expatriates(support)

Related departments

China 3 sites
Site representative・Environmental Management
Officer・Environmental management
implementation officer (local staff)

Japanese
expatriates(support)

Related departments

JPN secretariat
Integrated management of All F-tech

North America 7 sites
Site representative・Environmental Management
Officer・Environmental management
implementation officer (local staff)

Japanese
expatriates(support)

Related departments

Domestic 7 sites＊
Environmental management officer
・Site manager
・Environmental management implementation
officer・Environmental manager promotion officer

Related departments＊The 7 domestic sites in Japan include subsidiaries and an affiliated company.

F-TECH CSR REPORT 2018│ 14 │

Initiative for Environmental Protection
FY2030 Targets, the 13th Mid-term Management Plan Targets (Environmental Area),
and the First Year Achievements

Aiming to become the “Environmental Top Runner” as the Group, by
clarifying the FY2030 target, issues.
As the first year in the 13th Mid-term Management Plan (Environmental Are) and the first year in setting new targets for
FY2030, FY2017 was an important year. Past continuing targets resulted in a vast increase than the planned value. The
newly added target from this year related to a reduction of waste emission intensity deteriorated 13%. However, each site
is investigating the cause and considering remedial measure in the belief that we can catch up from the next fiscal period.
Since the proposed plan for the key policy of the 13th Mid-term Management Plan (Environmental Area), training
energy-saving core human resources, planning was only completed, the entire Group as one will commit itself to achieve
this plan from now.

【FY2017 F-tech Group’s Environment・Energy plans and results※1】
We will definitely achieve the goals to lead the Group-wide initiatives

Subject: F-tech Group (Domestic 6 sites, Overseas 14 sites)
PeriodDevelopment Content
Reduction of greenhouse gas
emission intensity
Reduction of water quality source
usage intensity
Reduction of waste emission
intensity
Issuance of environmental
reports at production sites
Compliance with ISO50001 at
overseas benchmark sites
Obtain ISO14001 (FY2015
revised) certification
Subject：F-tech Group
Obtain ISO 14001 certification
for recently launched mass
production sites
Training energy-saving corehuman resources
Contribution activities to regional
communities
Evaluation of biodiversity(business operations area)

2017
Plan
Results

10.7 % improvement

Evaluation

〇

Plan

12.1% improvement

Evaluation

〇

Plan

2019

［4% improvement (compared to 2013)］［5% improvement (compared to 2013)］［6% improvement (compared to 2013)］

Results

Results

2018［6% improvement (compared to 2013)］［7.5% improvement（compared to 2013）］ [9% improvement (compared to 2013)]［4% improvement (compared to 2013)］［5% improvement (compared to 2013)］［6% improvement (compared to 2013)］
13% deterioration

Evaluation

×

Plan

［Issuance preparation］

Results

Start of issuance preparation

Evaluation

〇

Plan

［Asia-Pacific start］

Results

Manual preparation completed

Evaluation

〇

Plan

［System building］

Results

2 remaining sites incomplete

Evaluation△［Internal issuance］［Official issuance］［Asia-Pacific completion］ ［North America horizontal development］［Issuance registration］［Continuous development］

Plan

Maintain FY2016 standards level

Results
Evaluation
Plan［Plan training curriculum］

Results

Proposed plan completed

Evaluation〇［Structure training curriculum］

Plan

Maintain FY2016 standards level

Results
Evaluation
Plan［Current understanding］ ［Consideration of countermeasures］ ［Brushing up the Guidelines］

Results

Complete understanding

Evaluation〇〇：Target achieved, △：70%-99% achievement,×：Less than 70% achieved,－：Outside scope※１Refrain from announcing the goal of "development/engineering" from the viewpoint of confidential information.

│ 15 │ F-TECH CSR REPORT 2018

［Training completed］

FY2017 F-tech domestic sites Environment・Energy Plans and results.
FY2017 F-tech domestic sites Environment・Energy Plans※1

We will definitely achieve the goals to lead the Group-wide
initiatives.
We were able to achieve all of the goals for control items in FY2017. In the absence of beneficial cost-effective
improvement for CO2 emission reductions, we believe that using our collective experience in our regular efforts produced
these results. From now to achieve our high targets, we will work to improve systematically by using our efforts.
In addition, as is indicated in the 13th Mid-term Management Plan (Environmental Area), we will make full-scale efforts
in the future to standardize the ISO 50001 overseas expansion and training of energy-saving core human resources.
Understanding that achieving these targets is connected to improving intensity for the entire Group, we will strive toachieve this essential target.

【Results of the FY2017 F-Tech domestic sites Environment・Energy Plans】
Subject: F-tech’s 3 domestic sites (Kuki, Kameyama, Haga)
Control items

CO2 Emission
Reductions

EnergyManagement
Progress

Performanceof Social
Responsibility

Targets

Control Standards

Results

Evaluation

CO2 Emission
Intensity Unit

All areas (Kuki+Kameyama+Haga)(Compared to 62nd term)
99point(Production areas + developmentareas) below

98.9 Point 1.1%
improvement○

Reduction of CO2
emissions based on
measures

Measure reduction amount.
(Kuki+Kameyama+Haga)
Over 110.4t-CO2

200.6t-CO2○

ISO50001 overseas
expansion

Start Asia-Pacific benchmark sites

System documentation
construction complete○

Energy-saving corehuman resources
training

Curriculum planning for energysaving core human resources training

Draft completed forenergy-saving corehuman resources
curriculum○

Social contribution
to regional societies

Participation rate 25% or more /eachsite regular employees(total number of people): 207

Participants: 368○〇：Target achieved, △：70%-99% achievement,×：Less than 70% achieved,－：Outside scope※１Refrain from announcing the goal of "development/engineering" from the viewpoint of confidential information.

FY2030 Global Targets
CO2 Emission Intensity Unit
▲26％improvement

Water Use Intensity Unit
▲17％improvement

Waste emission intensity unit
▲17％improvement

Base year：compared to FY2013

Base year: compared to FY2013

Base year：compared to FY2013

Indicator：Sales

Indicator: Sales

Indicator：Sales※CO2 emissions subject: energy used in factories
out of scope: distribution, company vehicles, welding CO2 gas※In order to increase consistency with greenhouse gas emissions and water resources use, from this report, sales
figures include inter-group transactions.

F-TECH CSR REPORT 2018│ 16 │Current Trends for Major Targets
Restart for FY2030 Goals
Largely achieved the target(target:
Reduce 6% CO2 emission intensity
unit compared to FY2013 result,
reduced 11%). However, CO2
emissions increased by 23%
compared to FY2013 and areincreasing year by year. In particular,
30% of production number
increased compared to the previous
fiscal year in China, and the AsiaPacific, can be considered a major
reason.
From now, we will optimize
the use of energy according to
the number of production ateach site and will seek to reduce
unnecessary energy.

t-CO2 ■Japan ■North America ■China
200,000
0.50
0.46
180,000

120,000

121,863
105,957

103,013130,7522017 Breakdown
0.45
0.35

108,047

100,000 ■Japan ■North America ■China
t-CO2200,000
80,0000.50
0.46
180,000
60,000■Asia-Pacific0.43

160,000
40,000140,000
20,0000.25
Intensity unit (t-CO2/JPY1 M sales)
0.55
0.48
0.15
0.44
0.45
0.05
121,863

120,000
0

130,752

0.35
-0.05

108,047
2013105,957(Base year) 103,013
2014
2015
2016
2017
0.25
100,000
Intensity unit (t-CO2/JPY1 M sales)t-CO2 ■Japan ■North America ■China ■Asia-Pacific
80,0000.55
200,000
0.50
0.15
0.48 Intensity unit (m3/JPY1 M sales)
m3 ■Japan ■North America
60,0000.46 ■China ■Asia-Pacific180,000
0.44
1,200,000
3.70
0.43
0.45
40,0000.05
3.24
160,000
3.18
3.23
3.16
3.20
20,0001,000,000
140,000
130,752
2.85
0.35
121,863
-0.05
2.70
0
120,000 2013 (Base year)
2014
2015
2016
2017
108,047
105,957
775,562
103,013753,787
800,000
739,2992.20
0.25
100,000
670,968
653,493

Usage increased by 3% comparedto the previous fiscal year,
although 12% of intensity
improvement. Even with anincrease in production numbers in
China and the Asia-Pacific regions,only increased 3% in China andremained the same level in the
Asia-Pacific region comparedto the previous year. This is dueto the effect of various water
reduction measure implemented
at each site.
Water risk levels are different
by region, although we will strive
to implement water conservation
measures and managing thestatus of daily water use.

1,000,000
20,000200,0000
800,000 2013 (Base year)0
2013653,493(Base year)│ 17 │ F-TECH CSR REPORT 2018

0.44

0.43

140,000

80,000600,000
m3 ■Japan ■North America ■China
60,0001,200,000
400,000
3.24
40,0003.18

We have reduced 3% of waste
emissions and improved 17%
in intensity unit compared toprevious fiscal year, althoughwhen compared with FY2013, thebase year of FY2030 target, waste
emissions increased by 52% andintensity unit deteriorated by 13%.
At the time of the FY2030
targets changes, the indicators
relating to each site’s waste
emission data was once
again consolidated at the
FY2017 Global Environmental
Conference. By correcting ourway of understanding the subtle
differences at each site from now,
we aim at improving data accuracy
and building a framework capableof even more precise evaluations.

0.48

Intensity unit (t-CO2/JPY1 M sales)
0.55

160,000■Water Resource Usage—Current
Trends■Waste Emissions-Current Trends■Asia-Pacific3
2/JPY1
Intensity unit (ton/JPY1 M sales)
Intensity unit (ton/JPY1 M sales)
Intensity unit
Intensity(ton/JPY1
unitM(msales)/JPY1 M sales)
Intensity unit (m3/JPY1 M sales)
Intensity
Intensity unit
unit (t-CO(m3/JPY1
MM
sales)
sales)
Intensity unit (t-CO2/JPY1 MIntensity
sales) unit (t-CO2/JPY1 M sales)■CO2 Emissions-Current Trends

1.70
0.15
Intensity unit (m3/JPY1 M sales)
1.20
3.70

■Asia-Pacific
3.16

3.23
2.85

2014
670,9682014

2015
739,2992015

2016
753,787775,562
2017

2016

2017

2.20
-0.30

m3 ■Japan ■North America ■China ■Asia-Pacific1,200,000
400,000
3.24
3.18
3.16
ton ■Japan ■North America ■China ■Asia-Pacific1,000,000
16,000200,000
14,000800,000
02013 (Base0.036 year)
653,493
12,0002014
670,968
0.033

0.040
739,2992015

600,000
10,0009,391

400,000
8,000
7,198
6,907
ton ■Japan ■North America■China16,0006,000
200,000■Asia-Pacific

14,000
4,000
0.036
0
12,0002,000 2013 (Base year)
2013 (Base year)

0.040
2014
0.033

2015

2014

9,391
2015
■Asia-Pacific

4,000
14,000

0.040

2,000
12,0000.036

010,000 2013 (Base year)
8,000

7,198

0.033
2014

9,391
2015

0.03
1.20

2016

2017

0.00
0.03

Intensity unit (ton/JPY1 M0.02
sales)
0.05
0.048

0.040

11,281

10,976

2016

2017

6,907

0.01
0.04
0.00
0.03
0.02

4,000

0.01

2,000
2013 (Base year)

2014

2015

Japan 24％

Asia-Pacific 14％
North America 41％
China 22％2017 Breakdown2017 Breakdown
Japan 24％
Asia-PacificNorth
America14％
41％
Asia-Pacific 22％
Japan 12％China 22％2017 Breakdown
Asia-PacificNorth
America 22％
41％
China 34％

Intensity unit (ton/JPY1 M 0.70
sales)
0.02
0.05
0.20 North America 32％
2017 Breakdown
China 34％
0.048
0.040
0.01
0.04
-0.30
Asia-Pacific 6％
Japan 5％2016
2017
11,281
North America 80％
10,976China 9％6,000

02017 Breakdown

Intensity unit (m3/JPY1 M sales)
1.20
3.70
2017 Breakdown
0.70
3.23
Intensity unit (ton/JPY1 M 3.20
sales)
Asia-Pacific 22％
0.05
2.85
0.20 North America
32％
China 34％
Japan 12％2017 Breakdown
2.70
0.048
0.040
775,562
753,787
-0.30
0.04
2.20
Asia-Pacific 6％
2016
2017
Japan 5％
11,281
10,976China 9％
1.70

8,000

7,198
6,907
ton ■Japan ■North America ■China
6,000
16,000Asia-Pacific 14％
China 22％

Japan 12％0.20 North America
2.70
32％
-0.05

1.70

600,000

10,000
0

0.05
0.70
3.20

Japan 24％

2016

2017

2017 Breakdown
Japan 5％Asia-Pacific
6％80％
North
America
China 9％North America 80％

0.00

In Japan, in addition to the Kuki Plant, the Kameyama Plant, and the Haga technical center, data from three domestic
subsidiaries and an affiliated company are included.

Material Flow
Relationship between the F-tech Group’s Business Activities andEnergy Consumption/CO2 Emissions
INPUT

OUTPUT

F-tech Group

Entire Group
Waste 10,976 t

Water resources
776 1,000m3

EnergyElectricity
196,294 MWh
City gas
5,370 1,000m3
Natural gas
3,347 1,000m3
LPG
4,413 tGasoline
335 kℓCO2

117,719 t-CO2

CO2

Inside the site/office120,809 t-CO2

Research &Development↓
Production
Stamping
WeldingCompany vehicles
1,196 t-CO2

Paint & AssemblyCompany vehicles

Diesel fuel334 kℓKerosene
12 kℓ
Gasoline
18 kℓ
CO2 8,748 t-CO2

Diesel fuel3,280 kℓTransport

Customers (car manufacturers)

Users

・CO2 emissions in OUTPUT were calculated multiplying the amount of energy consumption in INPUT by the CO2
conversion factor.
・The calculation method of CO2 refers to the “Greenhouse Gas Emission Calculation and Report Manual” issued by the
Ministry of Economy, Trade and Industry and the Ministry of the Environment and the WRI/WBCSD’s “The Greenhouse Gas
Protocol.”・Domestic power consumption was calculated based on the most recent co-efficient of each power company.
・Reporting period: April 2016-March 2017
F-TECH CSR REPORT 2018│ 18 │

Supply Chain Management
Moving forward with the green purchasing initiative considering
the CSR of the entire GroupF-tech Group Green Purchasing Concept

The Group has reflected its basic philosophy of green
procurement in the "F-tech Green Purchasing Guidelines"
to purchase environmentally-friendly component parts,
materials and products on a priority basis.
Since July 2013 when we started delivering the
Guidelines to approximately 70 of our business partners,
we are currently asking 54 of our domestic and overseas
business partners to undertake the following (as of April2018):●C
 onstruction of an environmental management system●C ompliance with environmental laws and regulations●C onduct management of chemical substances
found in products● Grasp and reduce greenhouse gas emissions
The Group is dedicated to continuously protecting the
global environment by promoting green purchasing
to its business partners in accordance with the “F-tech
Green Purchasing Guidelines”.

Management of chemical substances in
products

With respect to regulations concerning chemical substancesin products, the Group has established a management
system at each site and conducts International Material
Data System (IMDS) surveys. The Group has established the“F-tech Chemical Substance Management Standards” which
strictly prohibits the use of chemical substances which areharmful to humans or the environment or whose use isprohibited or restricted by law.
Through the green purchasing movement, we are also
working toward eliminating these target substances withour business partners’ understanding and providing to
the business partners with products free of such chemical
substances.

■Grasping greenhouse gas emissions in the value chain
Domestic Business partners’ Greenhouse gas emissions

GHG※ emissions
Grasp rate

t-co2
5,000

92.86%

100%

92.90%
86.44%

81.60%

87.40%

4,000
3,000

80%
3,074

60%

2,669
1,852

2,000

1,851

1,851

20%

1,000
0

40%

2013

2014

※GHG…Greenhouse gas│ 19 │ F-TECH CSR REPORT 2018

2015

2016

2017

0%

Outreach to business partners

Purchasing policy explanatory meeting
We held an explanatory meeting about our purchasing
policy in Nagoya City in Aichi in April 2018, attended
by 54 business partners, where we introduced theCompany’s environmental initiative as a case study.
We requested their cooperation with conducting anenvironmental initiative status survey and were able tounderstand the situation of our business partners. Goingforward, we will hold explanatory meetings to explain
the Company’s CSR basic policy to our business partners
for their understanding.
■Environmental Initiative Status Survey
1. Environmental impact substance survey①each energy consumption ②water resource consumption
2. Setting the CO2 reduction target and achievement
status
3. Status of Biodiversity Activities
Case Study of Improvement
The Company is making great efforts to appeal to ourbusiness partners to improve reduction of greenhousegas emissions.
・Reduced disposal of iron scraps by improving thelarge welding cans, changing it to separable recyclable
garbage⇒2 ,217kg/Year CO2 reduction “Approximately 158
of cedar trees”
・Steel case for parts transportation was changed to thesize according to the product, storage efficiency was
improved, and 1 container used for sea transport was
reduced every month.
⇒5 ,268kg/Year CO2 reduction “Approximately 376
of cedar trees”

Other

Conflict Mineral Investigation
As an important concern for ESG, since the conflictmineral issue is linked to human rights violations in the
Republic of the Congo and surrounding areas as well as
destruction of the environment, using conflict minerals
as a source of funding for armed insurgents is strictly
prohibited. With the cooperation of business partners,
we regularly participate in investigations conductedunder the “OECD Due Diligence Guidance for Responsible
Supply Chains of Minerals from Conflict-Affected andHigh-Risk Areas” issued by the Organization for Economic
Cooperation and Development (OECD).

Research and Development Initiatives
Using a mobile society’s environmental changes as a goodchance to contribute to environmental protection, focusing onlight weight products.
The current automotive industry is in the midst of a large wave of technological changes. At the same time that fuelsources are changing from gasoline to electric and hydrogen, the power train mechanism is expected to change from theengine to the motor. Although it can be said that we are in the era of “the survival of the fittest”, so far the Company’s
Development Division boldness and resolution in taking on new challenges have generated new orders and it has createdbarrier-breaking technology to realize weight reduction.
The Development Department will continue to do its utmost to develop new technology to respond to these newchanges and demand for further weight reduction. Even with the changes from the mobile society, the Development
Department wishes to contribute to the international community by using the Company’s original development strengths
for technological development capable of realizing safety and further weight reduction for the next 10 to 20 years.

1947
1959
1967

Fukuda Seisakusho, the predecessor of F-tech, established in Soka City, Saitama
Origination of processing proposals for “Super Cub” component parts (fork top bridge)
Kameyama Plant opened in Kameyama City, Mie. Responding to the 4-wheel era witha cutting-edge facility, automation and the like.

1978
1983

Head office, and plant moved to Kuki City, Saitama
The First step toward becoming a manufacturerof suspension functional component parts
Developed orders for suspension component parts.
Established “F&P Mfg., Inc.,” a Canadian subsidiary.
Our overseas business significantly expanded
Responding to weight reduction of front subframes
Introduction of hydroforming technology
Development of world’s first aluminum welding technology
Establishment of the mass-production system for hot bulge-forming.
Listed on First Section of Tokyo Stock Exchange
Development of 3D-FSW (three dimensional Friction Stir Welding) technology that contributes to weight reduction
Start of global development system on 4 fronts-Japan, the U.S., the Philippines, and China

1986
2000
2004
2005
2006
2008
2011
2013

Awarded the 60th Okochi Memorial Prize for advanced FSW technology, continuous dissimilarmaterial friction welding technology for aluminum and steel that it evolved(Joint development with Honda Motor Company) realized 25% weight reduction in convention steel
subframes■Current research and development
Contribute to weight reduction by fusing
high-tensile materials and aluminum

Use proprietary analytic technology to predict field
products’ performance

The Company uses aluminum materials in a wide range of
products from small-scale pedal component parts tolarge-scale subframes. Recently for the North America Honda
Accord, the mass production of subframes using friction stir
welding (FSW) in such dissimilar materials as steel andaluminum has started. To clear the regulatory values forincreasing fuel consumption, our significant key phrase iseven further weight reduction in products.
The Company’s major product group, such as chassis parts
suspension arm and axle beams, also contribute to improved
fuel consumption and realizing weight reduction by
decreasing board thickness while retaining its strength
through the aggressive use of high-tensile strength steel.

To respond to our customers’ increasing needs for improved
strength and durability and vehicle performance, theCompany implement product designs using independently
developed optimization simulations and structural
simulations. The optimization simulation is a method to
examine the product shape, and also applies to performance
demands for increased crash performance, and to develop
the most lightweight products.
Further, the Company has constructed a structure andframe that is highly energy-efficient and absorbent using
independently constructed impact analysis method. The
Company has become capable of developing based on theneeds of each vehicle.

F-TECH CSR REPORT 2018│ 20 │

TOPICSThe 8th Global Environmental Conference

The 8th Global Environmental
Conference

The 8th Global Environmental Conference was held from
October 10-12, 2017 and was attended by 39 managers
from 14 sites.
The sharing of effective environmental measuresequivalent to a total of approximately 400 million yen
through all of the Global Environmental Conferences
including this 8th conference has allowed the Group tocontribute to reduced production costs and environmentalload on a global scale. At the beginning of the meeting, thepresident talked about the results of past environmental
activities and the importance of the World Environment
Conference, and all the participants shared the purpose of
the World Environment Conference again.
At this 8th conference, we had extensive detailed
discussions about the methods to share know-how within
the Group in order to achieve the status as anenvironmental top runner. In addition, with respect to thetraining of core human resources (leaders) to implement
measures promoting energy conservation in a prompt
manner at each of the Group’s sites, we also discussed eachsite’s needs for settling on a hands-on centered training
curriculum.
Going forward, we plan to hold Global Environmental
Conferences on a continuous basis with the goal of
becoming an “Environmental Top Runner”.

■Grand Prize: (First ranked site) FTZ■Excellence Award (first-ranked site for

Coating process spray reduction
To reduce water
consumption, the amount ofspray in the deionizedrinsing after pre-treatment
and the electro-coating was
adjusted after repeatedconfirmation of lack of effecton quality. With just an adjustment in the water volume
and without any further investment, FTZ was able toreduce 7,500 m3 of water, a reduction by half compared
to before the improvement.
In addition to this, the effectiveness of improved
energy waste in dryers, among others, were considered
noteworthy. (Please see page 31).

■Idea Award: DYNA-MIG

Using turnip juice as an anti-freezing agent
DYNA-MIG started using
turnip juice as ananti-freezing agent insteadof sodium chloride. Sodium
chloride itself had not somuch effect to prevent
freezing for iron stairs,
furthermore, it became a cause of rust. However,squeezed turnip juice fully acted as an anti-freezing
agent and prevented rusting as well. Conference
participants voiced concerns about stains from turnip
juice as well as methods for obtaining it; at this point,
there have been no stains and turnip juice is easy toobtain.

│ 21 │ F-TECH CSR REPORT 2018measure): F&P

Reduction activities for stamping gloves that became
hazardous waste.
Stamping oil contains small
amounts of barium toinhibit rust. Canadiangovernmental regulations
require that work gloves
coming into contact withbarium must be handled
and disposed as a hazardous substance, which takes
significant time and expense. Therefore, by consigning
the cleaning to an external cleaning company and reuse
it instead of disposing the gloves, was able to reducepurchasing and disposal costs, and also the amount ofwaste.

■CSR Award: F&PA
Support activities for people with disabilities
From June 2016, F&PA has
joined hands with a regional
non-profit organization topromote the employment ofpeople with disabilities, witha focus on support for adults
with developmental
disabilities in Miami County. Currently, F&PA employs four
adults from this program, who generally work from 9 a.m.
to 2 p.m. The work of these employees is suited to theirindividual capabilities, including those who work full-timein welding processing and achieve production goals as wellas those who use sign-language in their work in
un-packaging. The significant efforts and positive attitudeof these employees have been a source of motivation for all
of F&PA’s employees.

TOPICS FTZ Wins “Environmental Award” from a Customer
The F-Tech Zhongshan Inc. (Guangdong, China) (FTZ)
Chinese group companies received the Environmental Award
from Honda Automobile (China) Co., Ltd.
Based on the concept of “becoming an environmental
top runner in advancing energy management” reflectedin the 12th Mid-term Management Plan (theEnvironmental Area, 2014-2016), the Group has started
global expansion of ISO50001 from the benchmark sites
in each region from FY2015. In FY2016, expanded thisprogram to FTZ, and completed its “self-declaration” *.
FTZ is making efforts to reduce energy costs and has
listed improvement measures it has made using theenergy management system it has adopted.
As a result of the improvements it planned andimplemented in FY2017, FTZ achieved its goal of“reducing CO2 emission intensity units by 1% comparedto FY2016”.
＊Self-declaration: Instead of third-party certification by a third-party
organization about the compliance of its standards, FTZ has declared that it
will conduct its own self-evaluation about the compliance of its standard.

Energy savings by introducing detection
sensors for empty hangers on the paintcoating line.
One example of an improvement measure is theintroduction of detection sensors for empty hangers on
the paint coating line. Prior to this improvement, thepaint coating line was operating even during the breaks,
adjustment of production, or transitions between the 1st
and the 2nd shifts. To reduce energy waste, FTZ
examined the number of empty hangers in every time
period, then considered an improvement.
Recognized that time periods with empty hangers
were frequent, FTZ made an improvement by installing
detection sensors so that each work stage automatically
stopped in response to the number of empty hangers.
This resulted in daily energy savings of approximately
150kWh and annual energy savings of 37,625kWh, andreduced costs of 523,000 yen.

0.07750.077

Target 1% reduction

0.07650.076
0.0755

↓３%
DOWN

0.075
0.07450.074
0.07350.073

FY2016 Achievements

Washing entrance sensor

FY2017 Target

FY2017 Achievements

Electrodeposition
entrance sensor

Receipt of Environmental Award from
Honda Automobile (China) Co., Ltd.
In January 2018, FTZ was awarded the “Environmental
Award” given by Honda Automobile (China) Co., Ltd. toits business partner with the most impressive initiativefor environmental load reduction of a product life cycle.
Receiving the prize is attributable to FTZ’s reduced
environmental load using the introduced energy
management system and achieving its fixed targets.
F-TECH CSR REPORT 2018│ 22 │

Quality Assurance Initiatives
We will strive to achieve the “world’s top high quality standards”
and will achieve maximum customer satisfaction group-wide.
Based on the 13th Mid-term Management Plan, we will set targets for the entire group, and promote activities aimed atachieving the “world’s top high quality standards” and providing maximum value to our customers.
In FY2017 the Group continued to make strides in its quality improvement activities by 1. Continuous development of
the 7 new quality measures, 2. Building a framework for a stable launch of a new model, and 3. Strengthening the quality
assurance systems in the North American sites. By continuously working to strengthen our quality improvement activities,
we are striving to ensure that the entire Group is able to provide maximum value to our customers by FY2019, the last yearof the 13th Mid-term Management Plan.

From “prevention of recurrence” to“prevention”
Toward “Zero Defects”

The 32nd Global Quality Joint Meeting
Vector Alignment for Achieving Global
Targets

In FY2018, we will continue to establish a foundation forachieving “Zero Defects” in the following year FY2019, thefinal year of the 13th Mid-term Management Plan.
The Company is moving forward with theidentification of each problem and focusing on the shift
from "recurrence prevention" to "prevention" and reduce
outflow defects to the customers and in-process defects(cost of defective work). Particularly, we plan to speed up
reducing the in-process defects through causal analysis,counter-measures, and confirmation of effectiveness in
the PDCA cycle.
In addition, for prevention, the Group is also
strengthening its responsiveness and risk verificationin the product design and manufacturing process
design stages. Further, the North America, as we set asa target area, a Q meeting is held every quarter wherestrengthening quality improvement of North America’s 6
sites and initiatives to provide support are tackled.

“The 32nd Global Quality Joint Meeting”, an annual
meeting was held from June5-7, 2018 at the Heritage
Resort Hotel in Kumagaya City in Saitama, which wasattended by people from 13 domestic and overseas
manufacturing sites as well as related persons fromJapan’s functional divisions (Quality Assurance Office,Research and Development Division, Engineering
Division, and Purchasing Division).
Based on the theme of “reduction of in-process
defects” that the entire Group is focusing on thisfiscal year, we have shared the problems, targets andimprovement initiatives for each site and have aligned
vectors to achieve our global targets. On the last day ofthe conference, we had a factory tour of Subaru Yajima
plant in Ota City, Gunma. It was a good experience toknow how suspension products manufactured by othercompanies in the same industry could be assembled.
In addition, we were able to learn about the quality
management and manufacturing technology of Japanese
automobile manufacturers together with overseas sites
members.

│ 23 │ F-TECH CSR REPORT 2018

Initiatives for Labor and Safety & HealthGet back to basics and complete 5S,
Creating a safe, accident-free workplace
Solidify the base to create a workplace
where accidents do not occur

F-tech＊and FEG carry out labor, safety & health activities
every year at each site with the goal of “zero occupational
accidents requiring time off” in accordance with thecompany-wide safety policy adopted in FY2017 of“getting back to basics and completing 5S, to create asafe, accident-free workplace.”
The company-wide Safety Committee, consisting ofmembers from F-tech and FEG, has been engaged in
activities based on a two-pillared policy it adopted as apriority matter of 1. Prevention of recurrence by sharing
information about past occupational accidents and2. Prevention of occupational accidents through risk
assessment (equipment and facilities, specific chemical
substances). In addition to occupational accidents,
activities are underway in each region to also reduce thenumber of traffic accidents.
For FY2018, continuing last year’s basic policy of“getting back to basics and completing 5S to create a safe,
accident-free workplace”, we plan to develop two new
initiatives: 1. Promotion of safety & health in all domestic
Group companies as a whole, with the participation ofReterra Inc. and Kyushu F-tech Inc. and 2. Standardizing
rules for safety glasses and forklifts operation.
＊Head office, and Kuki Plant, Kameyama Plant, Haga TechnicalCenter, and Kazo Equipment Center

Various initiatives for chemical substancerisk assessment
Risk assessments for chemical substances in existing
work are being carried out at all plants. Risk assessments
have been implemented in each area and necessary
appropriate improvements have been implemented
to address problem areas. In FY2018, we will strive
even harder to strengthen our activities and prevent
occupational accidents.

Prevention of similar accidents by
sharing information inside and outside
the Group

In addition to taking steps to prevent recurrence bysharing information about past occupational accidents,
which was a priority matter in FY2017, we are actively
engaged in prevention of similar occupational accidents
by spreading information about occupational accidents
laterally to affiliated companies. The developed contents
have been listed up, counter-measures for necessary
improvements have implemented in each area, with theresults and details of the countermeasures confirmed by
the Safety & Health Committee.

Prevention of occupational accidents
and traffic accidents using driving
recorders

We introduced the installation of drive recorders as ameans to prevent accidents as an initiative in each area.
From 2015, drive recorders have been installed in allcompany vehicles at the Kazo Equipment Center (KazoCity, Saitama). The Safety & Health Committee checks to
see whether there are any driving problems based ona random sample of driving records. When dangerous
driving is found based on the check of the drive
recorders, the driver is warned based on live examples
through a traffic safety course. By conducting this activity,
the number of traffic accidents (involving personal injury)
gradually decreased from 5 that occurred in FY2014 tozero in FY2017.
Case Study of the Kazo Equipment Center

Case study of Haga Technical Center’s initiative

Easy-to-see information on harmful chemicals when taken into the body

Traffic safety lectures held based on the recorded informationof the company vehicle's driving recorder.
F-TECH CSR REPORT 2018│ 24 │

社会貢献活動
Social Contribution Activities
As part of its social contribution, the F-tech Group is engaged in suchinitiatives as nurturing capable individuals through a scholarshipfund, reforestation-program, and regional cleanup activities.
Column: Biodiversity Initiatives

Increased our employee participation target to 25% or more in Japan
Continue to implement many initiatives at overseas sites too

In the 3 years that have passed since issuing the Group Biodiversity Guidelines in 2015, biodiversity initiatives areunderway throughout the Group. The activities were undertaken to meet the domestic goal from FY2015 of “more than
20% employee participation rate”, thanks to the cooperation of many employees, these targets have been exceeded eachyear. Therefore, from FY2017, the target has been changed to more than a 25% participation rate, we plan to work more
actively to lead other sites as a mother site.
FY2017 Achievements
FY2017 Target

F-techParticipation rate: 44%
Total number of participants: 368
Activity sites: 3
Number of activities: 11
F-tech Group
Total number of participants: 926
Activity sites: 12
Number of activities: 27

F-techSite employees’ participation rate: more than 25% (207 people)
F-tech Group
Ongoing biodiversity initiatives

Ongoing forest maintenance activities

F-tech GroupEver since the issuance of the Biodiversity Guidelines, many sites in the Group have been
actively involved in forest maintenance activities. In FY2017, 25 trees were planted by
DYNA-MIG, 300 by F&P, 60 by FTZ, and 1,650 by FPMI with the cooperation of the Philippine
government, resulting in a grand total of more than 2,000 trees being planted in one year.
Similarly, the activities of the F-tech reforestation program (Moroyama Town, Saitama),
started in 2015 are still ongoing, and a total of 81 people (employees and their families)
engaged in thinning out activities in FY2017. In addition, the forest maintenance activities are
viewed as one of our corporate responsibilities. The entire Group will continue to participate inthese activities.

Eco-Garden Activities
F-tech Philippines Mfg.,Inc. (Laguna, the Philippines)
FPMI is trying to reduce CO2 emissions by creating a garden on a portion of land it owns. In
making this garden, FPMI is trying to use recycled waste materials generated inside the plantsuch as empty drums and abandoned tires and lumber.
In addition, since the creation of the garden on this plot is linked to protecting the habitatof various living creatures, we will continue to maintain it.

■Environmental Protection Activities
at local society

・Clean up at Bizenhori river
・F-tech’s reforestation
・Adopt program

・Off-site cleaning activities

・Cleaning activities at industrial parks, etc.

■Contributing to Education and Culture
Name

F-Tech Scholarship Foundation

FoundedJune 23, 2016

Activity purpose

Support to nurture individuals capable of acting globally

Websitehttps://www.zaidan.ftech.co.jp/
・Factory tours for elementary
school students
・On-site training for highschool students
・Cooperation with university
students’ research activities
・Support for training of
mechanical engineeringteachers◎Cooperation and international collaboration with various technology observation teams│ 25 │ F-TECH CSR REPORT 2018

CSR Activities by Area

Japan
Kuki Plant (Kuki City, Saitama)

Reducing gas consumption by assessing exhaust gas volume in drying furnaces
To remove the odorous gas which arises when the products are baked in the drying
furnace, normally a certain amount of the air in the furnace is exhausted to a deodorizer.
However, the warm air created by combustion is released from the exhaust at thesame time which causes the furnace temperature to decrease. To maintain the furnace
temperature at a desired level, the fuel consumption increases.
For this reason, as an improvement measure, the Kuki Plant tried to reduce the warm air
displacement by decreasing the rotation frequency of the exhaust fume ducts. Lowering
the rotation frequency 1Hz by 1 Hz, and observing the numerical value of the drying
furnace room’s gas leak detector while optimizing the rotation frequency resulted indecreased fuel consumption of 1 m3/h by lowering 35Hz→30Hz. As an annual result, thiswas linked to a reduction of 3,960m3 of gas (CO2 conversion：8,236kg-CO2). Next year, theKuki Plant plans to even further improve fuel reduction by installing a magnet to increase
the fuel efficiency for fuel supply distribution pipes.

Kameyama Plant (Kameyama City, Mie)

Finding things that need improvements by environmental patrols
As a result of sustained activities to improve energy conservation using the energy
management system from 2009, the areas that need improving have decreased.
To find new things that need an improvement, we go back to “sangen-shugi”;
to see the sites, products, and current situations, we implemented patrols byenvironmental members at the time of the Environmental Conference and started
to find and investigate things that needed improvement.
Most recently, four places that needed improvement were studied and selected
at a stamping factory, following which improvements were implemented.
For example, the automatic ceiling light power on system with sensors and afixed timer was not effective after the sunset in winter by inadequate timer setting.
Therefore the factory was lacking brightness during the period. So, we discontinued
the timer and started to use the sensor function alone. It was also able to reduce
the forced lighting, and led to reduced energy consumption. We will continue theenvironmental patrol to find things that can be improved and improve them.

Haga Technical Center (Haga Town, Haga-gun, Tochigi)

Power reduction due to 6-shaft hydraulic pressure fatigue
testing machine inverterization
The 6-shaft hydraulic pressure fatigue testing machine used for durability
assessments of developed component parts is capable of assessing at most 6
types of tests on an individual basis, although operating all of them requires fixedpressure (75kW). The power can be reduced by lowering the pressure after the tests
are completed, although high pressure power are continually used, at night when
there is no one to make adjustments is a waste of energy. Further, this equipment
has been operating at full capacity since its introduction 15 years ago and isdeteriorating.
Therefore, In 2017 we upgraded to highly efficiency motor + inverter. After
its introduction, the pressure was automatically adjusted based on the testing
conditions, and a reduction of 197,500kWh of energy (74t-CO2) over the previous
fiscal year is expected. In addition, as a value added, the increase of temperatures
was suppressed in hydraulic fluid due to pressure reduction is linked to thedeterioration of inhibiting oil and the one million yen reduction in running costs
due to sliding part abrasion suppression. Even in other facilities, we will consider
the cost-effectiveness of investments and continue our initiative to further reduce
power.

F-TECH CSR REPORT 2018│ 26 │

CSR Activities by Area

Japan
Fukuda Engineering Co., Ltd. (FEG / Kazo City, Saitama)

Recycling of empty contact lens cases
FEG participates in the Eye City Eco Project. This project involves the collection
at the company of empty polypropylene disposable contacts lens cases andsending them to Eye City, a contact lens seller, for recycling. Because the empty
lens cases are white monochrome and can be processed in various colors, they arevery suitable for recycling since all the manufacturers use the same standardize
materials. Knowing that the current recycling rate of these empty cases is very low,
FEG decided to participate in this program. The increased volume of recycling isrelated to the reduction of CO2 emissions generated by incineration. In addition,
sales proceeds from the recycling companies are donated to the Japan Eye Bank
Association, which in turn uses it for corneal transplants and public awareness about
the Eye Bank. FEG plans to continue its involvement in these activities.

Kyushu F-tech Inc. (QFT / Yamaga City, Kumamoto)

Striving to maintenance the trees
Since the beginning of its operations, the trees at QFT had never been trimmed or
thinned by a third-party service provider. For this reason, the overgrown trees juttedout into the road, and to avoid the trees, the cars had to be driven in the middle of
the road. Since ensuring the safety of not only the employees but also that of theperipheral companies and businesses persons entering or exiting QFT’s premises
had become difficult, the QFT employees made extensive efforts to thin out the▲Beforetrees.
As a result, the visibility of the street has improved, in addition to traffic safety, thelarge volume of dead branches and leaves that have fallen in and around the factory
have been removed. QFT will continue to strive to maintain and manage the treesthat have an ameliorative effect on environmental problems such as purification ofemission exhausted gasses, air pollution, and heat-island phenomenon.
▲AfterReterra Inc. (Ogano Town, Chichibu-gun, Saitama)

Promoting energy conservation activities based on“Company-wide energy conservation Project”.
The energy conservation activity known as “Company-wide energy conservation
Project” started in October 2014, with 52 meetings held up to now (1-2 times amonth, attended by the President, the Chairman of the Board, the officers, factoryheads, equipment advisors, and planning promoters). Energy conservation
proposals from every site (the headquarters, the Ryokami Plant, the Chichibu Plant,
and the Chichibu Plant II) have an annual schedule fixed for confirmation of status ofprogress, the cost-effectiveness of expenses (investments), transition and estimatesof energy reduction amounts (electric, LPG, gasoline, etc.), which is observed andconfirmed.
In FY2017, Reterra Inc. implemented certain measures, including ① Replacementof aluminum melting furnace fueled by LPG to high efficiency furnace, ② LED ceilinglighting, and ③ Upgrade of discharge amount decreasing (inefficient) compressor topremium highly efficiency motor powered devices, which resulted in significant cost
reductions (4 million yen/ year) (130t-CO2/year). In FY2018, Reterra Inc. has planned
and will strive to implement initiatives such as ① Changing over from gasoline
operated forklifts (to electric type), ② LED ceiling lighting, ③ Change to low-carbon
aluminum melting furnace, and 4. Replace the inefficient compressor.

①Aluminum
melting furnace②11 LED lights③75 kW compressor│ 27 │ F-TECH CSR REPORT 2018

CSR Activities by Area

North America
F&P Mfg., Inc. (F&P / Ontario, Canada)

Change to new IPG laser cutting machine
The Hydroforming Division changed over from the Trumph laser cutting system to a highly energyefficient model manufactured by IPG Photonics. This laser system reduces the conventional 82% power
consumption (217,300kWh) in comparison with the company's product by efficient light generation
technology, and also realizes reduction of consumable parts. By doing this, in addition to achieving
an annual cost savings for electricity of $30,322, F&P also received a $23,530 from SaveOnEnergy as arebate for its investment in this technology.

Changes to LED lighting and VFD controllers

The level of brightness in the packing area has a significant impact on quality
assurance. F&P’s Plant 2 replaced fluorescent lighting to LED lighting for theirminiature component parts and forklift areas. This replacing took $33,944, although$1,960 as a rebate, energy savings of 55,316kWh, reduced electric charges of $7,191,
and a payback period of 4.45 years.
In addition, by changing over from the 700t stamping straight motor controller tothe new VFD (variable frequency device) which requires no electricity in an idle state,
F&P has saved 100, 800kWh per year and simple payback period of only 1.8 years.
Dyna-Mig, a division of F&P Mfg., Inc. (DYNA-MIG / Ontario, Canada)

Energy savings efficiency by introducing a welding gas
exhaust filter system
DYNA-MIG introduced a new welding exhaust system with advanced VFD (variablefrequency device). The VFD motor will run when each cell starts until the necessary
conditions for exhaust are in place, although when using 1 or 2 cells such as breaktimes, the VFD recognizes and monitors when it can run with only a little air, themotor automatically adjusts for the necessary volume.
In addition, by using a filter pressure sensor, the VFD can identify the amount ofaccumulated dust in the filter. When the filter is new and there is no accumulateddust, power consumption can be suppressed with the necessary amount ofactivation, and if the pressure in the filter increases, the suction power is reduced
therefore it is supported by increasing the motor speed.
In a new system, the amount of energy saved by the VFD is displayed. Due to theVFD, Dyna-Mig achieved a 2,163,822kW savings over 4 months in 2017. Dyna-Mig
has introduced this system to all new welding gas exhaust filter system.
F&P America Mfg., Inc.（F&PA / Ohio, U.S.A.）

Installation of high-speed sheet shutters
Currently, the metal door installed in the Metal Forming department building,which took 28 seconds to open or close manually, with the door remaining open
for an average of 2 minutes thereafter. Therefore, cooled or warmed air made by airconditioner expelled and it has been a waste of energy consumption. By changing
to high speed sheet shutters, energy conservation was achieved due to the shortertime for open and close, and the automatic operation function.
By changing to high-speed sheet shutters, it only takes 5.8 seconds to open and10.3 seconds to close, and it closes automatically after 5 seconds when there is no
movement at the door. After the installation of the doors in December 2017, thereduction in the natural gas and electricity used for air conditioning led to a 79.8tCO2 reduction. Those metal doors originally installed are left for the security purpose
for a long break period.
F-TECH CSR REPORT 2018│ 28 │

CSR Activities by Area

North America
F&P Georgia, a division of F&P America Mfg., Inc.（F&PG / Georgia, U.S.A.）

Power consumption reduction by changing lighting fixtures
F&PG has started to change the high-ceiling lighting fixtures inside the factory to
reduce CO2 emissions. This time, F&PG changed 55 of 430w metal halide lights to
200w LED lighting. Due to the transition to LED, there was a 230w reduction perbulb, and assuming an average working week of 80 hours (2 shifts) and an average
manufacturing time of 50 weeks annually, if calculated on an annual basis, thischange would result in annual be reductions of 50,600kWh and 47,564kg-CO2.
F-tech R&D North America Inc.（R&DNA / Ohio, U.S.A.）

Before and after the improvement

Digitalization of paper documentation and contribution to local society
As part of its ongoing document disposal activities, R&DNA has digitized documents
relating to the company’s general affairs going back to its incorporation, reducing thevolume of documents, and reusing the storage space, and otherwise implementing
the 3Rs of recycling. At the same time, we achieved improvement of the confidential
information protection and efficient document management.
In addition, as part of our CSR activities to contribute to regional society andto raising employees’ awareness as a member of their society, we donated to thecity's temporary shelter for the victims of domestic violence and the homeless. We
appealed to the employees to provide daily commodities needed by the shelter
including old clothes, paper diapers, and shampoos. We were able to collect themand delivered many new items, including picture books for the children fully loadedin an Odyssey.
FEG DE QUERETARO, S.A. DE C.V.（FEGQ / Queretaro, Mexico）

Started “social contribution program” through recycling activities
As part of our support for cancer patients and environmental improvement(pollution prevention), we actively promote the participation in recycling activities.
As a concrete initiative, the company and its families gathered from their homes anddelivered more than 200kg of used plastic bottle caps to the AMANC Cooperative.
As a result, we were able to provide partial support to the cancer treatment of 3
children. In addition, from the environmental perspective, this initiative led to a CO2
reduction equivalent to 300kg.
Since it was uncertain how the electronic component parts are disposed, up
to FY2016, which had been outsourced to disposal companies, an obligation toprovide evidence of the proper disposal of these parts was imposed on the disposal
companies from FY2017.

FY2017 results of proper handling ofelectronic component parts

・Water savings of 9,252ℓ
・Greenhouse gas reduction by not using
fossil fuel 1,673kg of fossil fuels
・1,386kg CO2 emission reduction

F&P MFG.,DE MEXICO S.A.DE.C.V.（FPMX / Guanajuato, Mexico）

Activities for separation of waste and on-site tree-planting
FPMX received ISO14001 certification in May 2017. Information is disseminated sothat all employees can recognize the importance of waste sorting using monitors in
the cafeteria at monthly entire morning meeting, breaks, and lunchtime.
In addition to the above, FPMX is replacing part of the corporate site’s lawn withother plants to reduce water use. Although this will take time, but FPMX is expecting
in the future to be green with less water. This year also, FPMX increase the planting
tree activity to develop into a greener environment in the factory site. FPMX hopesthat the employees’ awareness of the environmental protection initiative will
gradually increase as the employees enjoy watching the growth of the trees they
have planted.
│ 29 │ F-TECH CSR REPORT 2018

Planting “Dedo Moro”,
ice plant, instead of lawn

Promoting theenvironment awarenessat the cafeteria monitor

On-site planting activities (30 trees)CSR Activities by Area

Asia & China
MANUAL LINE

F-tech Philippines Mfg.,Inc. (FPMI / Laguna, The Philippines)

1.アーム +ピボット

7.ロット番号とFQI

Conversion from manual welding to robotic welding

4.アーム +
パッド

Until now on the pedal parts complete welding line, 7 employees used 7 manualtransfer processes to manufacture 37,920 parts per month (annually 455,040 parts),
with annual energy consumption of 375,091.2kWh, equivalent to 238.6t-CO2.
MANUAL LINE
By converting from manual welding to robotic welding, the 7 processes werecondensed into 5, including adjusting the welding jigs. The layout was changed
condensed to a smoother line, space was minimized, and waste in the process
was eliminated. After the improvements, not only could the new welding line be
operated by 4 people instead of 7, the monthly manufacturing capacity increased
27.2%, 48,240 parts per month (annually 578,880 parts). Annual electricity
consumption became 205,286kWh (equivalent to 130.6t-CO2), resulting in a 45.3%
reduction of CO2 emissions compared to the conventional manual welding line.
4.アーム +
パッド

3.アーム +
フックスプリング5.ロット番号および FQI

5. 予備検査 /スパッタ除去2.アーム +
ストッパー

ROBOTIC LINE

3.アーム +
フックスプリング5.ロット番号および FQI

1.アーム +ピボット

6.ジグ継手および QA パッド溶接チェック
5. 予備検査 /スパッタ除去F-tech R&D Philippines Inc. (FR&DP / Laguna, The Philippines)

1.アーム +ピボット

6.ジグ継手および QA パッド溶接チェック

1.アーム +ピボット

7.ロット番号とFQI

ROBOTIC LINE

2.アーム +
ストッパー

2.アーム +
4. 治具とストッパー /QA パッドのフックスプリング
溶接チェック3.アーム + パッド

FPMI achieved to reduce from 7 people 7
processes to 4 people 5 processes as well as
increased manufacturing capacity.

Participation in tree-planting activities
In August 2017, FR&DP, together with FPMI, participated in tree-planting activities as
support for the national tree-planting program, resulting in a total of 1,500 seedlings
being planted in Kalayaan Laguna. As part of the gratitude of the Christmas culture,
our employees pledge every year to sponsor children through World Vision. We
believe that this sponsorship is a good opportunity to open new doors in the future
for the children we support now. In addition, our employees have donated usedclothing to victims in order to ease the situation in Malawi, which was ravaged bywar.
As for other activities, the minimum indoor temperature is set to 24℃ for energy
conservation. In addition, the Safety & Health Committee conducts training for fireand earthquakes evacuation and continuously raises awareness of safety througheducational training activities.
F-tech Mfg.,（Thailand）Ltd.（FMTL / Ayutthaya, Thailand）

Initiatives for energy conservation and efficient use of water
resources
As a result of replacing 206 fluorescent lamps with LED lighting, 19,037.81 kWh ofpower consumption, 69,868.76THB/Year of electricity charges, and 12.24 t-CO2 of
CO2 emission was reduced.
In the air-conditioning systems, 33 units were converted to inverters, resulting
in 215,949.89kWh of consumption, 803,333.59 THB/Year, and 138.86 t-CO2 of CO2
emissions was reduced. With respect to the efficient use of resources, by changing fromtap water to RO Reject water through the waste water treatment system, 3,662.4 m3/
Year of water consumption and 62,260.8 THB/Year of water bills was able to reduce.
FMTL is also engaged in other initiatives such as “using cardboard made with ecofriendly materials such as recycled papers”, “donating Children’s Day presents tochildren”, “5S activities and reduction of employees’ trash”, and “raising awarenessabout trash separation”.
PT.F.TECH INDONESIA (FTI / Karawang, Indonesia)

Participation in CSR activity programs
Since the start of operations in 2008, the KIIC industrial part (Karawang International
Industrial City) which FTI belongs to, has run a joint CSR program/baby foodinitiative that supplies and distributes baby food to children in villages nearby
in July 2017 on the same date as the children’s medical health checkups. Since
cooperation with nearby villages is important in advancing Indonesia businesses, weparticipate with other company in the KIIC to visit each nearby village. In addition
to participation, FTI also would like to increase its employees about contributing toregional society.
F-TECH CSR REPORT 2018│ 30 │2.アーム +
4. 治具とストッパー /QA パッドのフックスプリング
溶接チェック3.アーム + パッド

CSR Activities by Area

Asia & China
F-tech R&D (Guangzhou) Inc. (FR&DCH / Guangdong, China)

Expansion of trash separation and recycling
Since 2017 FR&DCH has been working on trash separation and recycling byimproving the environment, drafting a trash separation manual, and teaching about
trash separation to the employees.
Oversized trash (such as wooden or cardboard boxes used as packaging formaterials and parts, scrap metal, resin boxes, and plastic boxes, and KD cases)
is placed at the trash collection point and is regularly collected by a recycling
company. The three types of trash from the office, consisting of recyclable items,
uncollectable items, and hazardous items, are put in 3 different trash bins, and thesetypes of trash are regulated in detail in the trash separation manual. Educating
employees about trash separation is handled by posting educational guidance
about trash separation on the notice board and affixing pictures of trash to the trash bins.
F-Tech Wuhan Inc. (FTW / Hubei, China)

Improvement to on-site compressed air leaks
A great deal of electricity is required to make compressed air for use on the
manufacturing floor. Air leaks increase the air compressor’s load factor which leads
to even more electricity consumption. When the person in charge of equipment
inspects the pipes for compressed air, the inspection is conducted through the “airleakage inspection place layout”. If air leaks are discovered, their locations will be
noted in the layout and improvements and implementation reflecting the repair
plan will be undertaken.
After repairing the leaking pipes, the person in charge of repairing the equipmentin accordance with notations in the layout will be recorded in the “air leak survey
sheet” which equipment was leaking, the location of the leak, the reason, theamount of the leak, the places that were repaired, and the person in charge ofthe repairs so that any places where an air leak is discovered can be immediately
repaired and the amount of the air leak reduced.
The annual improvement results for compressed air leaks were electricity
reduction of 52,882kWh, reduced electricity charges of 47.6 thousand yuan, andreduced CO2 emissions of 40.5t-CO2.
F-Tech Zhongshan Inc. (FTZ / Guangdong, China)

Changing exhaust vents of the dryer
Currently, the exhaust from the dryer was discharged directly into the compressor room, causing an increase of room
temperature as well as an increase in electricity use for air conditioner and equipment. For that reason, the exhaust
vents of the dryers were joined to the compressor’s exhaust vent and the waste heat was discharged outside. As a result,not only lowering the room temperature, but also stop using 1 of 3 air conditioners led to a reduced load for the dryer.
【Before】【After】

Additional fan

Air conditioners│ 31 │ F-TECH CSR REPORT 2018

Fan ducts

Hot air ventilation with iron board

Overview of the F-tech GroupOn the Global Way

In 9 countries in the world, 11 production sites and 7 development sites are engaged in informationexchanges about every aspect including quality assurance, development, and the environment toimprove the Group as a whole.

GERMANY●F.tech R&D North America Inc. European Branch●Kentucky／Johnan America, Inc.
●●Georgia／F&P Georgia, A division of F&P America Mfg., Inc.

YANTAI FUYAN MOULD CO., LTD.●
F-Tech Wuhan Inc.●
Johnan Wuhan Inc. ●Progressive Tools &● F-Tech Zhongshan Inc.
Components (P) LTD.●● F-Tech R&D (Guangzhou) Inc.
F.tech Mfg., (Thailand) Ltd. ●Johnan F.tech (Thailand) LTD.●●Johnan De Mexico, S.A. de C.V.
●FEG de Queretaro, S.A. de C.V.
●F&P MFG. DE MEXICO S.A. DE C.V.

●F.tech R&D Philippines Inc.
●F.tech Philippines Mfg., Inc.

THAILANDPHILIPPINES

Reterra Inc.

●
●● ●
★
●

Kameyama Plant●

INDONESIA●
Kyushu F-tech Inc.

Fukuda Engineering Co., Ltd.

Consolidated subsidiaries
Affiliated companies
Branch office

Head office, and Operational sites in Japan

Affiliated overseas companies★F-tech Head Office, and Kuki Plant● Kameyama Plant● Haga Technical Center● Equipment Center●F&P Mfg., Inc.
● Dyna-Mig, A division of F&P Mfg., Inc.

●F.tech R&D North America Inc.
● Michigan Branch Office● F.tech R&D North America Inc. European Branch●F.E.G. DE QUERETARO S.A. DE C.V.
●F&P MFG. DE MEXICO S.A. DE C.V.
●F.tech Philippines Mfg., Inc.
●F.tech R&D Philippines Inc.
●F.tech Mfg., (Thailand) Ltd.
●PT.F.TECH INDONESIA

Company Name

F-tech Inc.

Head Office Address

19, Showa-numa, Shobu-cho, Kuki, Saitama

Established

July 1, 1947

Capital

6,790,370,000 yen
President & CEO Yuichi Fukuda

Employees

9,997 people

Business
activities

Automotive parts and related dies, machineries, and tools development, manufacturing,and sales(consolidated)

Main business
partners●F-Tech Zhongshan Inc.
●F-Tech Wuhan Inc.
●YANTAI FUYAN MOULD CO., LTD●F-tech R&D (Guangzhou) Inc.
●F.tech Inc. Office UK●Johnan America, Inc.
●Johnan De Mexico, S.A.de C.V.
●Johnan UK Ltd.
●Johnan F.tech (Thailand) LTD.
●PT.JFD INDONESIA●Johnan Wuhan Inc.
●Progressive Tools & Components (P) LTD.

●F&P America Mfg., Inc.
● F&P Georgia, A division of F&P America Mfg., Inc.

Corporate Overview

Representative

Haga Technical CenterF-tech Head Oﬃce, and Kuki Plant
Equipment Center●●Fukuda Engineering Co., Ltd.
●Kyushu F-tech Inc.
●Reterra Inc.
●Johnan Manufacturing Inc.

MEXICOJohnan Manufacturing Inc.

●PT.F.TECH INDONESIA
PT.JFD INDONESIA

Affiliated companies in Japan●Ontario／F&P Mfg., Inc.
●Ontario／Dyna-Mig, A division of F&P Mfg., Inc.

Ohio／F&P America Mfg., Inc.
F.tech R&D North America Inc.● ●Michigan Branch Oﬃce

CHINA

●●●
●
●

CANADA

UNITED STATESOF AMERICA

Johnan UK Ltd.● ●F.tech Inc. Oﬃce UK

Number of employees by regional segments(including the average number of temporary employees)

Total
8,918

8000

(including the average number of temporary employees)

Honda Motor Co., Ltd.
General Motors Company
Nissan Motor Co., Ltd.
Honda R&D Co., Ltd.
Nissan Shatai, Co., Ltd.
Mitsubishi Motors Corporation
Suzuki Motor Corporation
Toyota Motor Manufacturing and others

Total
9,997

（People）
10000

Total
7,716

Total
7,703

Japan
1,362

Japan
1,322

Total
7,948

North
America
3,269

North
America
3,470

North
America
3,594

Asia
3,085

Asia
2,911

Asia
3,009

2013

2014

2015

4000

2000

0

Japan
1,415

Japan
1,345

6000

Japan
1,438

North
America
4,073

Asia
3,430

2016

Japan
14％

North
America
4,696

Asia

39％
North
America

47％

Asia
3,863

2017

F-TECH CSR REPORT 2018│ 32 │Overview of the F-tech Group

Our Products

We are a manufacturer that focuses on the manufacture of major
safety parts in the automobile’s suspension system, ranging fromsuspension component parts and subframes to pedals, using our
proprietary integrated system (planning and development, dies andequipment productions, stamping process and hydroforming,
welding, electrodeposition coating, and assembling)
Chassis system
Suspension component parts

Modules

Control parts
Mounted components

Sales results by customer（Unit: million yen）
240000220000

Others200000F.T.C. (new)Suzuki

180000Mitsubishi
Toyota160000

Nissan
140000GM
Honda

1200001000002013│ 33 │ F-TECH CSR REPORT 2018

2014

2015

2016

2017

Overview of the F-tech Group
Sales results

Operating income and Operating margin（Unit: million yen）

Operating margin（Unit: million yen）
9,000

250,000

200,000

150,000

100,000

50,0000Operating income

4.5%

8,000

4.0%

7,000

3.5%

6,000

3.0%

5,000

2.5%

4,000

2.0%

3,000

1.5%

2,000

1.0%

1,000

0.5%

0
2013

2014

2015

2016

2017

ROE・ROA

0.0%
2013

ROE
ROA

18.0%

2014

2015

2016

2017

Capital investment（Unit: million yen）
25,00016.0%
20,000

14.0%
12.0%

15,00010.0%
8.0%

10,000

6.0%
4.0%

5,000

2.0%
0

0.0%
2013

2014

2015

2016

2017

Total assets

2013

ROE
ROA

（Unit: million yen）

4,000
3,500

120,000

3,000

100,000

2,500

80,0002,000

60,0001,500

40,0001,000

20,000

500

0

0
2015

2016

2013

2017

Current net earnings per share

2016

2017

2014

2015

2016

2017

2014

2015

2016

2017

（Unit: million yen）

140,000

2014

2015

R&D expenses

160,000

2013

2014

Capital-to-asset ratio（Unit: yen）
300.0030.0%

250.0025.0%

200.0020.0%

150.0015.0%

100.00

10.0%

50.00

5.0%

0.00

0.0%
2013

2014

2015

2016

2017

2013

F-TECH CSR REPORT 2018│ 34 │

Issuer:

F-tech Inc.
19, Showa-numa, Shobucho, Kuki, Saitama Prefecture 346-0194
JAPANInquiries:

F-tech Inc General Affairs Department
TEL. 0480-85-5211 FAX. 0480-87-1290
E-mail : webmaster@ftech.co.jp

Issued in February 2019,
Next Issue : Scheduled for release in October 2019