SUSTAINABILITY REPORT 2023

We have a dream.
We also have technologies to make thatdream into a reality.
Hoping to make people’ s lives more comfortable.
Hoping to create an innovative future.
To this end, we make sure thatevery product we deliver to the world helps people,
even if they are not eye-catching.
Each product one by one.

Protect employees and serve society
Okura Industrial started its business in Takamatsu after World War II. When Kurashiki

Founding
SpiritAircraft Co., Ltd. Takamatsu Works was dissolved, Masaji Matsuda, then heading theEngineering Section, established the business to protect the livelihoods of his staff
members and their families, as well as to provide necessary housing to people who losttheir homes in the war. This founding spirit of protecting employees and serving society
should not be forgotten even if the times change. We respect and take pride in the spirit.

Origin ofCompanyName

01

SUSTAINABILITY REPORT 2023

The company name comes from Kurabo Industries Ltd., at which our founder Masaji
Matsuda worked for 10 years. He took “O” from “Ohara”, the name of Kurabo Industries’
president Soichiro Ohara and “Kura” from Kurabo Industries. As “O” means “large” inJapanese, he named his company Okura Industrial Co., Ltd. in the hope that it grows larger
than Kurabo Industries.

Contents
Introduction: About Okura Industrial Group
03

History of Okura Industrial GroupWe will show you the Group’s

05

Significance of Okura Industrial’s Existence

history, as well as an

07
11
13
15

overview of the Group.

Message from Our President
Overview
Okura Industrial Group in Numbers

News

Strategies of Okura Industrial Group17

Medium- to Long-term Vision

21
23
25

The head of each division describes

Value Creation Process

the Group’s policies set out in

Financial Strategy“Next10(2030)” and “Medium-

Business Strategy

term Management Plan(2024)”

Fount of Okura Industrial Group’s Value
33
41

51
53
55
57

sustainable activities the Group
carries out in its businessactivities.

Promise to Customers
Promise to Employees
Safety and HealthContribution to Society
Promise to Shareholders and Investors
Initiatives for Stakeholders

59
60

Basic Approach to Climate Change
Environmental Initiatives

47
49

This part describes specificSustainability Initiatives

37

Promise to Business Partners
Corporate Governance

Financial and Non-Financial Summaries
67
69

Financial and Non-Financial Summaries
Corporate Information

This part contains basic information of

Navigation buttons:

the Group, including financial, nonfinancial, and corporate information.

Link to an
external
websiteLink to a
related pagein the report

Information on Our Website● Sustainability● IR information

https://www.okr-ind.co.jp/sustainability/ (Japanese only)● Company information

https://www.okr-ind.co.jp/en/ir/

Main content▶︎ Sustainability at
Okura
Industrial Group▶ Environment▶ Social▶ Governancehttps://www.okr-ind.co.jp/en/company/

Main content▶ A message from our president▶ Performance Highlights▶ Status of shares,etc.

Main content▶ Company
Philosophy▶ Company
Profile▶ Divisions▶ Locations

Editorial Policy
In 2020, Okura Industrial Group identified materiality, which includes climate● Period covered

action, resource recycling measures, and other important issues in offeringsolutions through business, and launched initiatives to achieve sustainability

January 2022 to December 2022. Some parts of the report include
business performance outside this period.

management. In 2021, we started to issue the Sustainability Report. This

● Scope covered

report mainly focuses on activities in 2022. The purpose of the report is to let

The report covers Okura Industrial and its Group companies.

our stakeholders know about a variety of initiatives and help them deepen the● Referenced guidelines

understanding of the Group’s activities.

IFRS Foundation’s International Integrated Reporting Framework and Ministryof Economy, Trade and Industry’s Guidance for Collaborative Value Creation

SUSTAINABILITY REPORT 2023

02

History of Okura Industrial Group

Foundation of the Company

Foray into the polyethylene businessWe started as Shikoku Housing Co.,In the mid-1950s, polyethylene resin, developedLtd., established by the founder Masaji

in the United States, started to attract attention

Matsuda to protect the livelihoods ofin Japan. With his eyes set on polyethylene as a

his staff members and their families

quality packaging material, Matsuda launched

and to provide necessary housing

the polyethylene processing business in 1956.

to people who lost their homes inThis became the forerunner of the Plastic Filmthe war. Despite scarce resources

Business today.

in the immediate aftermath of the war,

To focus on the polyethylene business, we changed

the company achieved a significant

the company's name to Okura Industrial Co., Ltd.

growth, making every strenuous effort

in 1955. In 1957, the No.2 Plant was constructedto procure lumber and later embarking

and new business locations were set up. We thus

on lumbering and comprehensive

steadily built the foundation of the Company.

lumber businesses.

As polyethylene processing was new in Japan,

This spirit of protecting employees

operating the machines for the first time involved

and serving society still constitutes

struggles. Meanwhile, being an early adopter inour management philosophy.

Japan made the name Okura Industrial widely
known in the chemical industry.

Net sales
1970(million yen)

1977

Company shares listed on
Lamination film launched
the first section of
the Tokyo Stock Exchange andOsaka Securities Exchange
1980
OPP*1 shrink launched
Masking film launched

100,000

80,0001971
Particleboard (PB)
production began

60,0001955
1972

Renamed Okura
Industrial Co., Ltd.

1956

40,000

Head office relocatedto Marugame, Kagawa

1962

Polyethylene film
processing began

Made a foray into lauan
plywood production,
plasterboard manufacturing began

1947
20,0000

Shikoku HousingCo., Ltd. established

1947

1950

*1 Biaxially oriented polypropylene

03

SUSTAINABILITY REPORT 2023

1960

1970

1980

Histor y of Okura Industrial Group

Start of particleboard production

Establishment of the New Materials Division

Present

Matsuda had been concerned about

In the year after we formulated our

We have developed three core businesses andthe destruction of mountain forests

first medium-term management plan,created products that are highly relevant tocaused by postwar overcutting. He

the New Materials Division waspeople’s lives. We formulated “Next10” in 2018,

thought of recycling scrap woodestablished. The division mainly

which is a management vision outlining where

pieces as construction materials,

engaged in the manufacturing of highwe would like to be in 10 years. We formulated

and built the Takuma Plant in 1971

functional films, with the expectation

the revised vision “Next10(2030)” in 2022 and set

to begin particleboard production.

that it can apply our film and press

focus fields, including “Living support”, “Information

Our products had higher airtight-

technologies to the processing ofelectronics”, “Functional materials for manufactur-

ness and quality than conventional

new materials and develop products

ing processes”, and “Enviroment & Energy”. This

products from other companies, andwith high added value.

means that we aim to increase customer value by

were highly regarded in Japan’s home

In 1989, we started to manufactureoffering high functionality, based on underlying

appliances industry. We developed

retardation film, which is still one oftechnology, to be applied in growth areas in eachproducts in a user-centric way. For

the mainstay products of the New

field, as well as to create social and environmental

example, we worked together with

Materials Business. Despite being

value by contributing to the environment.

a home appliances manufacturer andnew, the film was highly regarded

While we meet changing needs of the times, thesuccessfully developed materials forin the liquid crystal industry, which

spirit in our management philosophy, “Respect

high-quality stereo speakers.

was then starting to grow, and gained

the Individual”, “Contributing to the Society”, anda large market share.

“Customers First”, has not changed since the foundationof the Company. Our technology will continue to
evolve to make peoples’ lives comfortable.
2021

2004
1987
Okura Hotel Marugame opened
New Materials Division established

2013

2008

Acrylic protective
film for polarizing
plates launched

Retardation film
OXIS™ launched

1989

1996

Urethane film SILKLON™
launched

Bag in box launched

1990

Endo barrier™ launchedcomori™ launched
Ecocalmulch launched

Urethane film for medical use(adhesive plasters) launched

2000

2019
2018

Rex Board™ launched

New management vision

2009

2016 “Next10” formulated

Flooring material
PB launched

Became a company
with an audit andsupervisory committee

2010

2020

*The figures for 2022 are those after applying the Accounting Standard for Revenue Recognition.

SUSTAINABILITY REPORT 2023

04

Kazunori Takahama
Chairperson,
Representative Director

Our unchanging intention is to aim for coexistencewith society and corporate growth.
I will discuss how Okura Industrial Group’s basic policy of “To aim for corporate growth through business, keeping in mind our
coexistence with society, so that we may continue to be a company that is trusted by society” has taken root in our company.

A business run for the sake of survival precisely
matched the needs of society

Incorporation of new technology
to enrich people’s lives

The history of Okura Industrial began in July 1947, not long after the war,

With the strong post-war demand for housing, the company saw steadywhen Shikoku Housing Co., Ltd. was established in the city of Takamatsu.

growth, but vicious inflation, which increased the price of virtually

Behind the company's foundation lies the powerful experiences of Masaji

everything, hit the business hard. Even after receiving orders, they had

Matsuda, the company’s founder, during the war. Matsuda had previously

difficulties procuring materials due to shortages, and while waiting forworked for Kurashiki Aircraft Co., Ltd. Takamatsu Works, the aircraft

those supplies, their prices skyrocketed. The more the company built

manufacturing division of Kurabo Industries Ltd., but the plant inhouses, the more it lost money, putting the company’s very survival at

Takamatsu was destroyed by air raids, and the war ended before it

risk. Although the company was deeply in debt, Matsuda protected its

could be rebuilt. At the time, Kurabo Industries told Matsuda to return tocredibility by selling his own family's assets, so as not to inconvenience

the company’s head office in Kurashiki City, Okayama Prefecture, but

his suppliers. After hitting rock bottom, Matsuda became acutely aware of

he chose to establish his own business to protect the livelihoods ofthe need to cultivate new businesses to replace the housing business,around 80 employees who remained. He focused on the housing

so he visited a national research laboratory in Kagawa Prefecture in

construction business, seeing it as essential infrastructure in the

search of the seeds of new business. During his daily visits to theseprocess of post-war reconstruction. A business run for the sake of theirresearchers, Matsuda learned that a new synthetic resin called

own survival precisely matched the needs of society. This is also thepolyethylene film was attracting attention in the United States.

origin of the Company’s basic policy of “To aim for corporate growthConvinced that this strong, lightweight material would be suitable forthrough business, keeping in mind our coexistence with society, so thatshopping bags and would one day become a mainstream alternative to

we may continue to be a company that is trusted by society”.

fabric, in 1955, Matsuda decided to shift the company’s main businessto polyethylene processing and changed the company’s name to Okura
Industrial. He traveled to trade shows in the United States, adopted the05

SUSTAINABILITY REPORT 2023

Today, as televisions and other applications become larger and larger,

City. Subsequently, he built new plants in the suburbs of Tokyo, Osaka,further evolution of this technology is required.

and other areas, sticking to locations that were close to the areas ofconsumption. He believed that polyethylene bags used for shoppingbags and the like were essential products in daily life and that they could
be provided more cheaply by producing and supplying them in locations

Our ongoing challenge to keep creating
new valuethat were close to the consumers.
Along our journey of over 75 years since the company’s foundation,

The desire to reduce environmental impact alsobegan early on

Okura Industrial has become acutely aware that overcoming social
challenges and contributing to the reduction of environmental impact
are directly linked to business growth. Understanding that it is precisely
those underlying technologies cultivated in the Plastic Film Business,

Economic activity during Japan’s period of high growth was driven

the Housing Materials Business, and the New Materials Business thatby mass production and mass consumption. On the other hand,will make these things possible, we have accumulated a variety of

reducing the massive volumes of waste generated by those activities

technologies through the development of new products.

was becoming a major issue. In Japan at that time, lumber used for

In recent years as well, we continue to give shape to our thoughts on

housing was imported and processed domestically into building

sustainability with our own underlying technologies. For example, wematerials and other products. However, the huge volume of wood

have realized resource recycling with “Ecocalmulch”, which is madechips generated by this process had to be disposed of by incineration.

from discarded used for agriculture film recovered from farmers andIn Germany, the particleboard, a recycled board made by heating,recycled back into raw materials. This is sure to become a benchmark

compressing and bonding waste wood chips with glue, had been

for the recycling business of the future. We are also considering the use

developed and put into use. Realizing the value of this product, Matsudaof domestically-produced wood for particleboards, and we are seeking

started manufacturing particleboards in 1971. This product could be

to focus our efforts on protecting wood resources and the forestry

described as the model child in the area of recycling, as all of the woodindustry in Japan. Our sustainability Initiatives are not limited to resource

used to make it came from waste. For over half a century, Okura

recycling. When the risk of infection through endoscopic examinations

Industrial has been engaged in the manufacture of products designed

such as gastroscopy increased during the pandemic, our product,

to reduce environmental impact.

“Endo barrier™”, contributed widely to the medical sector with its safety

S i g n i f i c a n c e o f O k u r a I n d u s t r i a l ’s E x i s t e n c elatest manufacturing equipment, and built a new plant in Marugame

and convenience.
We have created new value in society with a deeply-rooted corporate

Leveraging accumulated underlying
technologies to contribute to the digital age

culture that is symbolized by our management philosophy, “Respect
the Individual”, “Contributing to the Society”, and “Customers First”,
and the characteristically honest and persistent nature of ourIn this way, Okura Industrial grew its business based on the two pillars

employees. Going forward, we will continue to embark on new thingsof the Plastic Film and the Housing Materials. However, Matsuda waswith a stronger willingness to change and take on challenges, byalready looking beyond that to his next undertaking. In 1987, heemphasizing diversity and creating opportunities for interaction with thelaunched a project to plan new businesses, calling it the New Materials

outside world. We will also continue to push forward with our business

Division. He had one condition, that any new businesses developed

while keeping in mind “to aim for corporate growth through business,must not overlap with the Company’s existing businesses. I was

keeping in mind our coexistence with society, so that we may continue

selected as a member of this new division, where my work involved

to be a company that is trusted by society”.

further advancing the film manufacturing technologies we haveaccumulated, such as melt extrusion, stretching, and laminating, using
a variety of raw materials. I also worked on the development oftechnology to make films thinner and smoother. In that process, I cameto see the potential of the optical film area. At the time, the only productson the market that incorporated liquid crystal displays (LCDs) werewatches and calculators, but I was convinced that the LCD market
would expand significantly in the future.
When Okura Industrial decided to enter the optical film area, there werea variety of challenges concerning LCDs. As the application of LCDs
expanded from watches and calculators to word processors, PCs, cell
phones, tablets, and TVs, the quality required of them also became
increasingly advanced, from monochrome to color display and from still
images to video. To evolve these technologies, retardation film andpolarizing film became indispensable. We established manufacturing
technology for the mass production of retardation film and polarizing
film developed by a major chemical manufacturer, and in doing so,made a significant contribution to overcoming the challenges of LCDs.

SUSTAINABILITY REPORT 2023

06

Mes s age fro m Ou r Pr e side n tClarifying our approach to portfoliotransformation in our management vision

year medium-term management plan that started in 2022, positioning
these three years as the period in which we will lay the foundations for
growth geared toward the realization of our management vision, we will

In our management vision, “Next10(2030)”, we declared our goal to
become “a solution partner that creates new value through underlying
technology and is selected by customers”. Until now, we have improved
our technological capabilities through the manufacture of order-madeproducts based on our customers’ requested specifications. We
have instilled in our vision our goal to further refine our underlying
technologies such as material design technology and processing
technology and become a company that our customers will choose
whenever needs arise.
Based on this goal, in our management vision, we have clarified thefields on which we will focus our efforts and our approach to our aspired
portfolio transformation, in our aim to achieve growth through sustainable
management that balances business and ESG. Further, in our three-

07

SUSTAINABILITY REPORT 2023

proceed with structural reforms and active growth investments for the
next stage and with the building of management foundations withquantified ESG targets.
Specifically, of the 25.0 billion yen in investments that we will carry out
in those three years, in addition to allocating 65% to growth areas, wewill expand and develop our environmental contributing products andcommercialize our resource recycling schemes. We have also declared
indicators and targets for sustainability to realize our vision for 2030. A
key element of this plan is that we have placed ESG initiatives at its core.
All our employees, including those of the Group subsidiaries, understandand share these targets, and we will make steady progress toward therealization of this vision alongside all our stakeholders.
Please refer topage 17 for details about the management vision, “Next10(2030)”.

Message from Our President

We will aim for growth withsustainable managementthat balances business and ESG.
In 2022, Okura Industrial Group formulated our management vision, “Next10(2030)”, which looks
toward 2030, and star ted “Medium-term Management Plan(2024)”.
I will look back on the first year of the medium-term management plan and discuss the state ofprogress of the management vision.

Susumu Kanda
Operating Officer, President,
Representative Director

Pressing forward toward the achievement of
the medium-term management plan’s targets

increase added value.
However, even in such a harsh business environment, each and every
person in our sales and production divisions devoted themselves to

In 2022, the first year of the plan, while demand dropped due to thepandemic-triggered lockdown of the Chinese economy, we also faced
cost increases that clearly exceeded our operating profits of theprevious year due to skyrocketing prices of resources and energy
caused by geopolitical risks. Although net sales increased due to thecarrying out their duties. In the belief that their earnest efforts will leadto positive results in 2023 and beyond, we will press forward, together
with our entire workforce, toward the achievement of the targets ofthe medium-term management plan.
Please refer topage 19 for details about “Medium-term Management Plan(2024)”.

revision of our product prices, it was not enough to offset the increasein costs, and operating profit declined as a result. Because we areengaged in the processing business, which is positioned neither
upstream nor downstream, but mid-stream, we are more easily affected

Steady investment in four focus areas

by changes in the external environment and find it more difficult tocombat them. We have been made keenly aware of the need to curb

In our management vision, “Next10(2030)”, we have clarified the focus areas

negative impacts by extending the range of our business in bothof “Information electronics”, “Functional materials for manufacturing

upstream and downstream directions and to pursue initiatives toprocesses”, “Environment & Energy”, and “Life science” as priority

SUSTAINABILITY REPORT 202308

investment areas in which we will transform our portfolio and realize ourgrowth strategies.

Reduce CO2 emissions by 30%
by FY2024 compared with FY2013 levels

In the “Information electronics” area, we have built a new plant for the
manufacture of optical films for large LCD panels at a cost of approximately
6.5 billion yen, and we aim to have this new plant up and running before theend of 2023. It is anticipated that, even with this increased capacity, we
will face supply shortages within the next several years. As such, we aremonitoring demand trends with an eye toward our next investments
aimed at increasing production. We are also proceeding to develop film
for high-frequency, low-loss substrates, demand for which is expected
to rise with the popularization of 5G and Sub-6, and we are working on
the timing of investment in anticipation of commercialization of this product.
The “Environment & Energy” area is an area in which we can leverage
our underlying technologies, and we are developing materials for perovskite
solar cells, which are considered a promising next-generation solar cell. In
March 2023, to further promote this development, we made an equity
investment in EneCoat Technologies Co., Ltd., a startup based in Kyoto
University that develops and manufactures perovskite solar cells.
Further, in functional materials, an area in which we have many overseas
trading partners, we made the decision to build a new plant in Vietnam
in a bid to promote local production for local consumption. As part ofPhase 1, we have invested just under 2.0 billion yen with the aim of
beginning operation from 2025, starting with the manufacture anddistribution of adhesives. After that, we will aim to expand theautomotive-related and office automation equipment-related film
processing businesses.

As I mentioned at the beginning, Okura Industrial Group wants to aim for
growth through sustainable management that balances business and ESG.
In 2021, we launched the Sustainability Committee, with all Directors,
including Outside Directors and Operating Officers as members. In April
that year, we established the Sustainability Promotion Department. Under
this new department, we have set up divisions and subcommittees
specializing in E, S, and G respectively, made the details and progressof activities more visible, and reinforced the structure for communicating
information within the company and externally. Contributing to therealization of a carbon-free, recycling-oriented society is the social
mission of any company. We intend to practice sustainable management
to contribute to the resolution of environmental and social issues throughour business.
I will now present our approaches to the individual elements of ESG.
First, I will talk about E (environment). We have declared a target of
reducing our CO2 emissions by 50% by FY2030 compared with FY2013
levels, and our target for FY2024 in our medium-term management plan
is a 30% reduction. While the prospects for achieving the FY2024 target
are favorable, we will need to step up our initiatives even further if we areto reach our FY2030 target. As one means to achieve this, we have been
actively pursuing the installation of solar power generation facilities since
FY2022. Currently, these facilities have been or are planned to be installedat six locations, with three of them already in operation. These six solar
power facilities will reduce our CO2 emissions by approximately 6,000 tons

Increasing the percentage ofenvironmental contributing products

a year (*). Based on actual reductions achieved in FY2022, we believethat this initiative will contribute to about 13% of our reductions by 2030.
Further, when updating production facilities, we need to ensure thatnew equipment is highly energy efficient. For example, in 2022, we

Next, I will explain our progress in the qualitative improvement of

installed a waste heat recovery system for the gravure printing press at

existing businesses and the strengthening of earning capacity.

our Marugame No. 5 Plant. Going forward, we will continue to accumulate

Currently, our business is divided into three segments. Of these, ourreductions as we consider CO2 reductions in each process one by one.

living support category products, which are particularly connected to

Okura Industrial has declared its endorsement of the TCFD

lifestyle consumer goods in the Plastic Film Business and the Housing

recommendations, and we have clarified our directions for Scope 1 and 2.

Materials Business, are primarily geared toward the Japanese market.

We recently responded to the CDP Climate Change 2022 QuestionnaireThis means a burgeoning risk of the contraction of that market. On theand received a score of B. To improve that score, we need to promote

other hand, we believe that the need and demand for products related

Scope 3 initiatives, and we are currently drawing up our path toward this.

to the themes of CO2 reduction and sustainability will continue to grow.

Also, given that our mainstay product is plastic film, we believe that the

We are therefore considering the conversion of products and businesses

reduction of plastic film waste is an area in which we should take therelated to lifestyle consumer goods into products and businesses withlead. However, because a significant volume of the plastic film that has

a lower environmental impact, in a bid to increase our earning capacity.

entered the market has food and other contaminants attached after

To this end, we have established a scheme for accrediting products thatuse, recycling it is an extremely difficult task. In this respect, we havecontribute to the mitigation of environmental impact as our in-house

focused on plastic film that is as clean as possible, that is, film that hasbrand “Caerula™”. Our goal is to replace 50% of the living support

been used in industry, as opposed to general consumable goods, andcategory products with “Caerula™” products by 2024.

we have established a scheme in which we collect such waste film for

Furthermore, in addition to the existing equipment that can convert

recycling. Our first target under this scheme was mulch film forresin to film with up to five types and five layers, we will introduce

agricultural use. With the cooperation of farmers, we collect polyethylene

equipment for seven-type/seven-layer film. This will not only add afilm for greenhouses that they were discarding, and re-pelletize (re-function for extending the shelf life of goods, but it will also make itpellet) them. Then, we mix them with new material at a certain ratio andeasier to recycle the film, reducing the burden on the environment.

recycled into agricultural-use film. In 2022, we launched “Ecocalmulch”,

Please refer topage 45 for details about our environmental contributing products.

a mulch film for spreading on farmland, and it has been well received by
the market. These achievements in plastic recycling and the installationof energy-saving equipment and solar power generation equipment
have been recognized, and in April 2023, we were presented with the
Kagawa Decarbonization Initiative Excellence Award.
* CO2 emission factor (Shikoku Electric Power Company emission factor (adjusted)
for FY2021) is calculated using 0.532(kg-CO2 /kWh).

09

SUSTAINABILITY REPORT 2023

existing operations. We will strive to enhance our training programs forthese purposes. In terms of increasing IT literacy, to ensure that
improvements for increasing operational efficiency are led by front-line

Next is S (social). In October 2022, Okura Industrial Group establisheda Sustainable Procurement Policy and formulated guidelines. At thesame time, we announced our Declaration of Partnership Building.
While respecting human rights and ensuring safety, quality and theenvironment, we will strive to co-exist in harmony with the business
partners that make up our supply chain.
In particular, as well as setting up workplaces where a variety of people
can flourish, we believe that we must actively engage in diversity, in lightof the possibilities such diversity will offer for our organization andculture. Because we are a manufacturing business that operates 24hours a day in shifts, male employees account for a large proportion of
our workforce. We are therefore promoting the creation of workplaces

staff, we are currently placing efforts into training in no-code programming,
which makes it easy to create software. This fiscal year, we will operate
programs that have a particular focus on next-generation managers.
On the theme of women’s empowerment, to increase the ratio of womenin manager and executive positions, we established the Social Working

Message from Our President

We are also pursuing community-oriented
product development

Group in 2022. Under this working group, we have established theWorking Group on Women’s Issues comprised entirely of female
employees, which is working on the creation of mechanisms to increase
the number of female managers. Their activities include considerationof awareness surveys and women’s empowerment training programs,
and initiatives to improve the corporate culture so that more women will
be encouraged to upgrade their skills and improve their career prospects.

in which women can also actively participate as human resources whowill play key roles in the future of the Company.
We are also engaging in co-creation with local communities. During the
COVID-19 pandemic, we collaborated with Kagawa University todevelop an endoscopic examination system that could prevent thedispersal of droplets, to help patients and health practitioners to avoid
infection. We have also established a method for extracting active
ingredients from plants using our proprietary technology. We haveextracted active ingredients such as antioxidant substances from theleaves of the olive tree, the official tree of Kagawa Prefecture, and thediscarded parts of sunflowers, a famous flower of the town of Manno,
and we are working with local governments and producers to come up
with ways to commercialize these extracts.
In 2023, we introduced a volunteer leave scheme. This is a special leave
scheme that employees can use, separately from their annual paid
leave, to participate in volunteer activities. We take active part involunteer activities in places such as Marugame City, where our head
office is located, but as a company with business sites from the Kanto
region all the way down to Kyushu, we want to extend those activities
nationwide by encouraging our employees to participate in social
activities through this scheme.

Striving for social contribution
and self-realization through work
Every day and night, our 2,206 employees (as of April 30, 2023),
including those at our 12 Group subsidiaries, strive for social contribution
and self-realization through their work, with the corporate mottos of“Improving everyday”, “Creativity and ingenuity”, and “Harmonious
cooperation” as their guiding principles. The founding spirit of safeguarding
employees’ livelihoods and serving society is being passed on as thereason for and value of our company’s existence. The businesses of
Okura Industrial Group are made possible with the support of our many
stakeholders, from our employees to our customers, business partners,
shareholders, investors, and local communities. Placing our aim tobecome a company that allows people to live in safety and comfort andthat is trusted by society at the heart of our business management, we
will continue to actively conduct information disclosure and dialogue
and, while reflecting the feedback received in our business management,steer toward a growth trajectory.
We look forward to your continued guidance and support in the future.

In terms of G (governance), in 2022, we increased the number of Outside
Directors to provide monitoring of the state of the Company’s managementfrom objective standpoints, and we also established a Nomination andRemuneration Committee, consisting primarily of Outside Directors.
We are increasing our corporate reliability and transparency andpursuing active disclosure of our SDGs activities and dialogues withstakeholders. With a growing number of inquiries about the Group’s
initiatives, they appear to be making traction, so we will work even harder tostrengthen our governance and enhance the quality of management.

Establishing the Working Group on Women’s Issues
with aim of increasing the ratio of female managers
We believe that human resources development is our top priority issue
for the realization of our management vision, “Next10(2030)”. To achieve
our targets, there are many issues we must address. They include thediscovery and development of human resources capable of generating
innovation, developing next-generation leaders who can be responsible
for promoting business management, and increasing IT literacy forpromoting the improvement of efficiency and IT transformation of

SUSTAINABILITY REPORT 2023

10

Ov e rv i e w
Aiming to be a solution partner that creates new value through underlying
technology and is selected by customers
Okura Industrial Group has been offering products and services that meet the needs of each customer. Our business segments consist of“Plastic Film”, “New Materials”, “Housing Materials” and “Other”. Since the foundation of the Company, we have always held the spirit ofcontributing to society through business.

Plastic Film Business

Page 25

New Materials Business

Page 27

The Plastic Film Division offers plastic packaging film essential for

The New Materials Division has a vision to launch key parts to thepeople’s daily lives. The film is light, strong, safe, and functional.

world. Building on Okura Industrial’s long-standing film processing

Our products are used for a variety of areas, from food packaging andtechnology, the division delivers high functional products to users

other daily necessities to the Information electronics materials.

around the world. Such products include optical films for smartphones

Today, we take full advantage of cutting-edge technology for our film,

and TVs and urethane elastomer films for automobile parts andwhich protects goods that are important for customers.

medical use.

We are also committed to the development of products that reduce

We will continue to deliver our products to constantly evolving areas

environmental impact. We are working to expand and propose

with high social needs, such as the Information electronics materials,

products made from plants and other renewable, bio-based organic

automotive, and medical and welfare fields.

resources. Going forward, we will not only manufacture and sell film
as independent products but also make total proposals, with an eye
to incorporating in our business the entire process from developing
materials to finishing end products.

Net sales

Net sales(million yen)
60,00048,00049,65449,31146,50147,82951,61024,00036,00018,00024,00012,00012,0006,000

02018/122019/122020/122021/122022/12

Operating profit(million yen)
5,000
4,000
3,000

3,219

0

4,458
3,642

3,476

1,000

600

SUSTAINABILITY REPORT 2023

23,424

10,8542018/122019/122020/122021/122022/122020/122021/122022/12

2,373

2,400
1,800

2019/1222,915(million yen)
3,000

4,267

1,200

2018/1228,52422,220Operating profit

2,000

0

11

(million yen)
30,0000

1,822

2018/12

1,110

1,134

2019/122020/121,342

2021/122022/12Housing Materials Business
17.3%

New Materials Business
14.0%

Over view

Other Businesses
1.9%

Net sales
breakdown

Fiscal year ended［ December
31, 2022 ］

Housing Materials Business

Plastic Film Business
66.8%

Other Businesses

Page 29

Page 32

Hotel Business
Our hotel boasts a prime location,
overlooking the Seto Inland Sea. It
serves not only as a business andtourism hub but also as a place forgatherings in the local community.

Information Processing
Business

The Housing Materials Division offers various materials for houses,

We mainly engage in software

furniture, and other products widely used in daily life. Our advanced

development. We also operatetechnology, based on the decorating and processing techniques weand maintain ICT systems, as wellhave developed over time, is friendly to living space for elderly people

as manufacture and sell package
software.

and children. We also offer safe and secure business space.
Particleboards, which are our mainstay products, are produced
based on cutting-edge FA technology and under strict safety andquality control. They are highly regarded in many industries.
As products that enable material recycling through the recycling ofscrap wood and other wood resources, particleboards also contributeto environmental protection and resource and energy saving.
From the fiscal year ended December 31, 2022, net sales andoperating profit for the Housing Materials Division include those of
Okura House Co., Ltd. and Okura Precut System Co., Ltd.

Net sales

Net sales(million yen)
15,00013,341

12,000
9,000

6,000

8,068

7,410
6,254

6,000

6,912

4,778

5,154

1,454

1,500
2018/122019/122020/122021/122022/12

0

862

800

465
382

2019/122022/12

531

400

372

256

200
2019/122021/12

810

600

456

200
2018/122020/12(million yen)
1,000
800

600

2018/12

Operating profit(million yen)
1,000

0

5,727

3,000

Operating profit

400

6,316

4,500

3,000
0

(million yen)
7,500

2020/122021/122022/120

2018/122019/122020/12302

2021/123652022/12*The figures for 2022 are those after applying the Accounting Standard for Revenue Recognition.
*From 2022, net sales and operating profit of Okura House Co., Ltd. and Okura Precut System Co., Ltd. are included in the Housing Materials Business segment, instead of
the Other Businesses segment.

SUSTAINABILITY REPORT 2023

12

Okura Industrial Group in Numbers

Established

Ordinary profit

1947

4.2

billion yen

Net sales

77.2
Fina ncia l Hig hlig ht s

売上高Net sales*

1（million yen）
100,000

86,260 85,364

80,00080,95888,420

経常利益

親会社株主に帰属する当期純利益

株主配当

Ordinary profit

Profit attributable to owners of parent

Dividends（million yen）
6,000

77,260billion yen

4,800

4,366

（million yen）
4,000

5,531
3,894

4,509

4,275

3,200

2,442

3,417

3,788

（yen）
100

60

60,0003,600

40,000

2,400

1,600

40

20,000

1,200

800

20

0

0

2018

2019

2020

2021

2022（year）

2,400

2018

2019

2020

2021

0

2022（year）

0
2018

2019

2020

2021

70

80

2,899 2,8652022（year）

55

55

2018

2019

85

60

2020

2021

2022（year）

Net sales for 2022 were 77,260 million

Ordinary profit for 2022 decreased

Profit attributable to owners of

Dividends declared for the year

yen, an increase of 9.5% year on yearby 22.7% year on year to 4,275

parent for 2022 increased by 10.9%

ended December 2022 were 85 yen

before applying the Accounting

million yen.

year on year to 3,788 million yen.

per share, an increase of 15 yen perStandard for Revenue Recognition.

share year on year.
(Reverse stock split
was implemented in July 2018)

研究開発費
Research and development expenses

設備投資
Capital expenditures（million yen）
1,200

（million yen）
5,846
6,000

1,029

1,060

960

1,047

949

1,179

5,524

5,051

4,800

ROE
Return on equity (ROE)

4,673

6

5.6

6.4

6.0

6.7

7.0

60

3,600

480

2,400

4

30

240

1,200

2

15

0

0

0

2018

2019

2020

2021

2022（year）

2018

2019

2020

2021

2022（year）

2018

2019

2020

51.8

55.6

59.4

61.1

61.6

2021

2022（year）

45

720

2021

2022（year）

0

2018

2019

2020

development

Capital expenditures for 2022

ROE for 2022 increased by 0.3

Equity ratio for 2022 increased by

expenses for 2022 increased byincreased by 851 million yen year on

percentage points year on year to

0.5 percentage points year on year

132 million yen year on year to 1,179

year to 5,524 million yen.

7.0%.

to 61.6%.

Researchandmillion yen.
*1 The figures for 2022 are those after applying the Accounting Standard for Revenue Recognition.

13

(%)
75

(%)
10
8

3,698

自己資本比率Equity ratio

SUSTAINABILITY REPORT 2023

Okura Industrial Group in Numbers

CO2 emissions

121,718
t-CO2

Number of employees

Waste emissions

1,935

6,653

t

N on - Fina ncia l Hig hlig ht s

水使用量

産業廃棄物

CO2排出量CO2 emissions (Scope 1 and 2)*

Waste emissions *（t-CO2）150,000(t)
10,0002, 3, 4, 9

120,000

126,750

122,258 121,718

118,340
94,81490,0008,000

3, 5, 6

Water usage (municipal water)*4, 7, 8（㎥）
500,000

7,220

8,245
6,667

7,262

6,653

6,000

：Number of employees：Percentage of female employees

445,336

400,000

Number of・
employees
従業員数
女性比率andpercentage of female employees*10

347,442 353,972 341,868(persons)
1,200

30

200,000

30,0002,000

100,000

480

0

0

0

2021

2022(year)

2018

2019

2020

2021

2022 (year)

（％）
50
40

4,000

2020

1,043 1,042

960

60,0002019

1,071 1,057

300,000

720

2018

1,164

14.8

13.9

15.3

16.0

16.2

240
2018

2019

2020

2021

2022 (year)

CO2 emissions for 2022 decreased

Waste emissions for 2022 decreased

Water usage for 2022 decreased byby 540 t-CO2 year on year.

by 609 tons year on year.

12,104 m3 year on year.

0

20
10

2018

2019

2020

2021

0
2022 (year)

We will make efforts to increase thepercentage of female recruits in our hiring of
new graduates and mid-career recruitment
and create a better working environment toincrease the percentage of female employees.

Number and percentageof
有給休暇取得日数・取得比率
paid leave days taken*10

Number of employees using 勤続年数
Number of average
育休
the childcare leave system*10 service years*10

休業労働災害件数
Number of lost time accidents：Number of paid leave days taken：Percentage of paid leave days taken（days）
15

（％）
100

12
9
6

7.5
40.5

8.8
49.4

9.6
52.8

10.0
54.8

3
0

2018

2019

2020

2021

11.1
60.9

(year)
20(persons)
25

80

20

60

15

21

16.4

16

17
10

(cases)
10

11

10

15.7

16.1

16.2

16.5

8

12

6

8

4

40

10

20

5

4

2

0

0

0

0
2022
（year）

2018

2019

2020

2021

2022(year)

2018

2019

2020

2021

2022(year)

6

5

4

1

1
2018

2019

2020

2021

2022(year)

We will advance digital transformation

We will have dialogs with employees to enhance

The number of average service

We will continue to implement our(DX), plant automation, and other

their understanding about the childcare leave

years remained at almost theinitiatives based on our basic

initiatives to reduce the workload on

system and make efforts to increase the number ofsame level as in the previous

philosophy

the front line and encourage

male employees taking childcare leave. We will also

years.

workplace safety and healthemployees to take more annual paid

ensure that the percentage of female employees

leave days.

taking childcare leave will remain at 100%.

*2 The figures for 2018 to 2020 represent data from April of each year to March of the following year
*3 The figure for 2021 represents data from January to December of the year (verified by a third party)*4 The figure for 2022 represents data from January to December of the year (to be verified by a third party)*5 The figures for 2018 to 2020 represent data from January to December of each year
*6 The figure for 2022 represents data from April of the year to March of the following yeartoimprovetheenvironment.

*7 The figures for 2019 and 2020 represent data from April of each year to March of the following year
*8 The figure for 2021 represents data from April of the year to March of the following year (verified by a third party)*9 In the calculation of the Scope 2 emissions, a basic emissions factor is used for 2018 to 2020,
and an adjusted emissions factor for 2021 and 2022
*10 On a non-consolidated basis

SUSTAINABILITY REPORT 2023

14

Ne w sEstablishment of Overseas Subsidiary,
OKURA VIETNAM CO., LTD.
As part of the strengthening of our business foundations, weconsidered the establishment of overseas manufacturing
sites for Functional Materials Business Unit products, andon May 22, 2023, we established OKURA VIETNAM CO.,LTD. in Vietnam. As the ratio of overseas net sales has
increased in this business in recent years, we had been
considering venturing into Vietnam, a country that is
expected to see continued economic growth, as a way offurther expanding our business. As a result of thesedeliberations, we decided to establish a new company in the
Sai Gon – Chan May Industrial Park and Non-Tariff Zone,
which is located in Phu Loc District , Thua Thien-Hue Province.
OKURA VIETNAM is a joint venture company, with Okura
Concept drawing of completed plantIndustrial owning 85.1% and Inabata & Co., Ltd. 14.9%. The
new company will manufacture and distribute adhesive
products and plastic products. It is scheduled to commence
operations in January 2025, and we will work hard to ensure★

Thua Thien Hue Provincethat it is able to manufacture and distribute products asquickly as possible.

M ESSAGE

My Thoughts on My Appointment as
President of OKURA VIETNAM

Junichiro Maruta
General Director
and Chairman,
OKURA VIETNAM CO., LTD.

This year marked 35 years since I joined Okura Industrial and was assigned to the New Materials Division. During
this time, I have been involved in the development, manufacturing, and sales of a variety of products. In the courseof day-to-day business activities, I have constantly wondered what we should do to expand our business further,and how we can increase the individual elements that make up the equation for increasing net sales, namely the
number of customers, unit price, quantity of products, and frequency of sales. On the other hand, after I passed
the age of 55, my words to live by became “Look far ahead myself, look at myself from afar, think about whatneeds to be done, and take action”.
Okura Industrial marked its 75th anniversary in 2022, and all employees are now working toward “Next10(2030)”.
Aspiring to globally expand Okura Industrial, which “With the dream, the technology, and the ability to create the future”,
and work hard to create business opportunities on the front lines, we have established OKURA VIETNAM CO., LTD.
I would like to express my gratitude for the cooperation extended by all divisions that made this possible. Even
now that the company has been established, I am sure that we will continue to face difficulties. I hope to overcome
those difficulties by returning to the intentions that led to the company’s establishment.
With your assistance and cooperation, I intend to give my utmost efforts, so I respectfully request your continued
guidance and support.

15

SUSTAINABILITY REPORT 2023

News

Winners at the 2022 Shikoku Regional Invention Award

Awarded the Kagawa institute of invention andinnovation Chairman’s Award

Katsuhiro Noguchi(right)Operating Officer; Manager,
Optical Materials Business Unit,
New Materials Division

Eiichi Amano(left)

Manager, Development
Department,
Research & Development Center

At the Shikoku Regional Invention Awards sponsored by the Japan Institute of Invention and Innovation, Katsuhiro Noguchi, Operating Officer; Manager, Optical Materials Business Unit, New Materials Division, and Eiichi Amano, Manager, Development Department, Research &Development Center, who are the inventors of a “polypropylene film for decorative sheet” (Patent No. 4598445; hereinafter “this invention”),
were awarded the Kagawa Prefecture Institution of Invention and Innovation Chairman’s Award.
This invention relates to a base film for decorative sheets used on the interior and exterior finishing of buildings, surface decorations of fittings,
and other purposes. Decorative sheets consist of a design layer that portrays pictures or patterns on a base film, which means that the basefilm needs to have excellent adhesiveness to printing ink and adhesive agents.
Conventionally, vinyl chloride resin sheets have generally been used as the base film for decorative sheets. However, as vinyl chloride resincauses hydrogen chloride gas, which causes acid rain, and dioxin, a highly toxic substance, to be generated when incinerated, from theviewpoint of environmental protection, there was a demand for the development of a base film for decorative sheets using a type of resin that
could replace vinyl chloride.
Many different resins were considered as alternatives, including polyethylene, polypropylene, polyethylene terephthalate, ethylene-vinyl
alcohol copolymers, and acrylic resins. Among these, base film for decorative sheets made with polypropylene, which offered the appropriate
flexibility, abrasion resistance, heat resistance, chemical resistance, and other qualities and was also relatively low-cost, was the strongest candidate.
However, polypropylene has the problem that it lacks sufficient adhesiveness to printing inks and adhesive agents, due to its lack of a polargroup. Corona discharge treatment on the base film surface is one way of improving that adhesiveness, but even with such treatment, thedecline in surface tension over time meant that adhesiveness could not be improved.
In the polypropylene film for decorative sheets in this invention, the content of low molecular-weight components, which impede adhesivenessto printing inks and adhesive agents, was reduced as much as possible, and a copolymer block containing ethylene, which contributes toadhesion strength, is finely dispersed on the film surface, and this composition improves adhesion strength.
Due to its excellent characteristics, this product has been in use at major manufacturers of decorative sheets for many years, and sales are
expected to increase further into the future.

● Structure of decorative sheet

Clear layer
Design layer
Base film fordecorative sheet

Decorative sheet

Plywood, MDF, etc.

Polypropylene film
for decorative sheet(Patent No. 4598445)

SUSTAINABILITY REPORT 2023

16

Medium- to Long-term Vision

Management Vision Next10(2030)
We will create social and environmental value through our activities
and helping both to improve customer value and address social issues.
●

Focus Fields

Next10(2030)

Businesses that allow people to live in safety and comfort
Food and agriculture, living spaces, livingware, healthcare, medicine“Goal” toward next decade

Businesses that reduce environmental and energy burden
Sustainable materials, volume reduction, recycling, energy-saving

A solution partner that creates new value
through underlying technology and isBusinesses related to telecommunications
High-speed communications, flexible devices, mobility

selected by customers

A company that is trusted by society
A corporate group with technological advantages

75th Anniversary

2018

2021

2022

2024

2025

ST AGE 2

ST AGE1

Establishment of platforms & strengthening of foundations

2027

2030

2028

ST AGE3

ST AGE 4

Expansion of business fields

Realization of the management vision

Aims for Business Portfolio

Agriculturet

and applications in each field.

t
en
nm
o
r
i
env
ing
HousingHousenvironment

u c
o d
p r

Life science

Livingwaregr t

H e a l t h & A g r i c u l tu r e

to the environment in the growth areasiiand environmental value by contributing

Physicalpropertiesrtechnologies, as well as to create social

Material design
CoatingLamination
Printing
OpticalDurability
properties

v

a

s

Electricalproperties

Information electronics

Functions
Stretching

i ng

n

Compression

to enhance value for customers by offeringhigh functionality, based on our underlying

Underlying
technologies

ag

n g

and “Environment & Energy”. We will aim

L it

c o n tConvenience
Environmental
Film-forming
properties
Extractionnlmaterials for manufacturing processes”,

&P
ack

e

i

“Information electronics”, “Functional

L i feFunctional materials for
manufacturing processestEnvironment& Energy

support”,u“Living

p o

of

b

fields

p

focus

E n
v i
r o
n
m
Food & Beveragesu

The business portfolio will consist of thes

Okura Industrial’s Strengths in Focus Fields
Okura Industrial’s strengths lie in our material design technologies and processing technologies. Combining those strengths with our strength in theform of our sales networks that access a wide range of industry customers through each business segment, we will catch up in growth areas andapplications in our focus fields, with the aims of new product development and the creation of new businesses.
Field
Livingsupport17

Businesses that allow people to livein safety and comfort

Plastic New Housing
Film Materials Materials

Area
Life science

Food & Beverages

Livingware

Housing environment
Agriculture

Informationelectronics

Businesses related totelecommunications

Functional
materials for
manufacturing
processes

Business that contributes to parts
that benefit product manufacture

Functional materials for manufacturing processes

Environment&
EnergyBusinesses that reduce
environmental and energy burden

Environment & Energy

SUSTAINABILITY REPORT 2023

●

●

●

Strengths
Networks with customers in many andvaried areas●

Front runner among optical film processing
manufacturers●●

Accumulation of product development
capabilities and molding technology know-how●●

Information electronics●

System cooperation with end users,
trading houses, and distributors

For the deepening of our portfolio, we will focus our investment on the areas that we consider to be growth markets and areas, namely “Informationelectronics”, “Functional materials for manufacturing processes”, “Environment & Energy”, and “Life science”. In the living support category, which isone of our core businesses, we will aim for growth through investments aimed at the conversion to and expansion of environmentally conscious
products, based on environmental contribution.
Introduction phase (expand share through injection of resources)

Growth (undertake strategic investments)

High

Roll out into overseas markets

Environment& Energy(all)

Informationelectronics(New Materials)

Market growth rateLifescience(all)

Structural reform

Redefine as environmental contributing products

Functional materials
for manufacturing
processes(Plastic Film/New Materials)

Stable (cash acquisition)

Food &
Beverages(Plastic Film)

Livingware(Plastic Film)

Medium- to Long-term Vision

Deepening of Business Portfolio

Housingenvironment(Housing Materials) Agriculture(Plastic Film)

Low
Low

High

Okura Industrial’s business opportunities

Management Indicators
Net sales (by focus field)
The financial targets in our management indicators
are to increase net sales from 71.2 billion yen in■Living support■Information electronics■Functional materials for ■Environment & Energy
manufacturing processes（billion yen）
100.0
80.0

2021 after application of the Accounting Standard
for Revenue Recognition to 120.0 billion yen in

60.0

2030, with the aim of 10.0 billion yen in operating

40.0

profit. In particular, we will strive for expansion

20.0

related to the fields of Information electronics,

0

Functional materials for manufacturing processes,
and Environment & Energy.

Environment &energy-saving
10％

Total
65.0
billion yen

2027

2030

Expansion of overseas sales in Functional
materials for manufacturing processes
and Information electronics areas●●

Strategy40％

Launch key parts to the world
Expand overseas sites conducting local
production for local consumption
Overseas
15％

71.2
billion yen

Overseas30％

120.0
billion yen
Japan
70％

Japan
85％

Growth25％

Strategic investments (including M&A)

2024

2021

*Net sales after application of the Accounting Standard for Revenue Recognition: 71.2 billion yen (2021)

Proactive investment geared to deepeningof business portfolio
Strengthening offoundations
25％

Net sales 120.0 billion yen
Operating profit 10.0 billion yen

26.0 billion yen

Investments in development of advanced-function films
Overseas/M&A investments● Investments to strengthen management foundations(DX, human resources, etc.)
●

2021

2030

*Net sales after application of the Accounting Standard for Revenue
Recognition: 71.2 billion yen (2021)●

Environment & energy-saving investments

6.5 billion yen

SUSTAINABILITY REPORT 2023

18

Medium-term Management Plan(2024)

Review of Previous Medium-term Management Plan
Comparison of net sales, operating profit, etc.
2021 plan

2021 results

Net sales

93.0 billion yen

88.4 billion yen

Operating profit

4.8 billion yen

5.1 billion yen

ROE

-

6.7％

Ordinary profit before
depreciation andamortization

10.0 billion yen

Comparison of net sales/operating profit：Net sales (left axis)（billion yen）
100.0

80.0

10.0 billion yen

85.3：Operating proﬁt (right axis)

88.4

80.9

8.0

60.0

Difference from plan:
Drastic changes in external environment

5.1

4.2

3.7

40.0

（billion yen）
10.0

93.0

4.8

4.0

20.0

Impact of COVID-19⇒Sudden slowdown in economic conditions, lockdowns, supply chain disruptions

0⇒Supply constraints due to semiconductor shortages
Downturn in demand due to move away from plastics

6.0

2.0

2019
results

2020
results2021
results

0

2021
plan

Okura Industrial’s Strengths in Focus Fields
We will enhance our material design technologies andFieldprocessing technologies and, in our focus fields, invest
management resources into areas and applications where
growth is expected, with the aim of expansion. Net sales

LivingsupportBusinesses that allow
people to live in safety
and comfort

Informationelectronics

Businesses related totelecommunications

targets for 2024 in each field are 59.0 billion yen in Living
support, 15.0 billion yen in Information electronics, 7.0 billion
yen in Functional materials for manufacturing processes,
and 1.2 billion yen in Environment & Energy.

Net sales(2024)Area
Life science

Food & Beverages Housing environment

Livingware

Agriculture

59.0
billionyen

Information electronics

15.0
billionyen

Business that
Functional
materials for contributes to parts
manufacturing that benefit productprocesses

Functional materials for manufacturing processes

7.0
billionyen

Environment Businesses that&
reduce environmental
Energyand energy burden

Environment & Energy

1.2
billionyen

manufacture

Net Sales and Operating Profit Plans
This graph shows net sales results for 2019–2022 andnumerical targets for 2024. We plan for net sales of 84.0
billion yen and operating profit of 6.2 billion yen in 2024, thethird year of the current medium-term management plan.

（billion yen）

：Net sales (left axis)：Operating proﬁt (right axis)

100.0
80.0

72.5

60.0
40.0

67.5

4.2

3.7

71.2

77.2

5.1

（billion yen）

84.0

6.2

3.7

2019
results

2020
results2021
results2022
results

2024
plan

Medium-term Management Plan(2022-2024)*Figures are after application of Accounting Standard for Revenue Recognition

SUSTAINABILITY REPORT 2023

6.0

2.0

Medium-term Management Plan(2019-2021)

19

8.0

4.0

20.0
0

10.0

0

(Units: million yen, %)Net sales

2021 results

2024 plan

Change (amount)

Change (percentage)

Plastic Film Business

47,785

New Materials Business

11,8132022 results

53,000

5,214

10.9

51,61015,500

3,686

31.2

10,854

Housing Materials Business

10,512

13,000

2,487

23.7

13,341Other Businesses

1,158

2,500

1,341

115.9

1,454

Consolidated total

71,27084,00012,72917.977,2602021 results

2024 plan

Plastic Film Business

4,267

5,000

9.4

732

17.2

3,476

New Materials Business

2,373

2,400

15.5

26

1.1

1,342

Housing Materials Business

591

800

6.2

208

35.4

862

Other Businesses

166

400

16.0

233

141.0

365

All companies(2,276)(2,400)

-

(123)

-

(2,274)

Consolidated total

5,123

6,200

7.4

1,076

21.0

3,771

Medium- to Long-term Vision

Net Sales and Operating Profit by Segment(Units: million yen, %)Operating profit

Profit margin Change (amount) Change (percentage)2022 results*Net sales figures for 2021 are after application of Accounting Standard for Revenue Recognition*Net sales and operating profit figures for 2021 are after changing Okura House Co., Ltd. and Okura Precut System Co., Ltd. from the Other Businesses segment to the Housing Materials
Business segment.

Priority Measures
Plastic Film Business segment

New Materials Business segment

・Develop and expand products that contribute to global environment

・Expand sales of optical films for large displays

・Develop functional products that can contribute to society

・Expand business in automotive and high-end display areas

・Strengthen downstream service functions needed for realization

・Overseas expansion (open up new markets, establish sites)

Housing Materials Business segment

Research & Development Center

・Increase net sales through full production and full sales of particleboard products

Target areas : Environment & Energy

・Expand non-particleboard products that will contribute to reduction

Information electronics
Life scienceof environmental burden and to SDGs
・Develop new substrates and new products oriented toward new business fields

Capital Expenditures, etc.
25.0 billion yen

Strategic investments (including M&A)
Construction of overseas manufacturing sites
Introduction of advanced-function film manufacturing
facilities● Environmental business investments
●

(35%)

Strategic investments(30%)

Growth investments(8%)

Environment & energy-saving
investments(27%)

Investments to strengthenfoundations●

13.4 billion yen

2019–2021

Growth investments, environmental & energy-saving
investments
Increase production capacity of optical films
for large displays● Expand manufacturing facilities for environmental films● Promote reduction of CO2 emissions●

2022–2024

SUSTAINABILITY REPORT 2023

20

Value Creation Process of Okura Industrial Group
With the underlying technologies we have cultivated over many years, Okura Industrial Group will provide products and services that cancontribute to the enhancement of value for customers and to solutions to social issues, to create social, environmental, and economic value.

Social Issues

Input

Materiality

Promoting management for decarbonization(climate action measures)

Financial capital

Climate change

Page 35

8,619 million yen●

Capital (non-consolidated)●

Equity ratio (non-consolidated)●

Net assets (non-consolidated) 55,591 million yen●

ROIC (consolidated)

61.6％

Further promoting resource recycling
measures

4.60％

Creating and expanding environmental
contributing products

Decarbonization

Intellectual capital
Research and development
expenses
1,179 million yen● Underlying technologies
Film-forming/Stretching/Coating/Printing/
Lamination/Compression/Extraction● Number of patents owned*
178●

Resources
conservation
and recycling

Promoting CSR procurement

Gaining a competitive advantage by
promoting digital transformation (DX)*As of December 31, 2022

Manufacturing capitalWork style reform●

Number of sites●

Capital expenditures●

Plants with external certifications

Diversity&
Inclusion

Japan: 15; Overseas: 2
5,524 million yen
11 locations*

Human capital
Number of employees(consolidated)● Ratio of female employees(non-consolidated)●

Diversity andrespect forhuman rights

Advancementof IoT and
AI technologies

Information
security

Conducting research and development
geared to creating innovation

1,935

Page 36
Bases forBusiness Continuity(OKURA Business base)

Improving corporate reliability andtransparency

16.2％

Thorough prevention ofcontamination

Social capital●

Relationships of trust with stakeholders●

Customer satisfaction surveys

Coexistence with local communities

Developing working environment where
employees are motivated to work

Natural capital●

Energy usage*1,260,509 kl●

Water usage*1,3462,081 m3*1 Cumulative data from January to December 2022
*2 Converted into crude oil volume*3 Volume including recycled waste water

Mottos×Management* Number of plants with external certifications (accreditations) is based on registration numbers
ISO 9001 certification registrations: 5, ISO 14001 certification registration: 1, FSSC certification registration: 1, Flexible Packaging Hygiene Association (JFPHA) accreditation
registrations: 2, Japanese Industrial Standards (JIS) certification registrations: 1, Japanese Agricultural Standards (JAS) certification registration: 1

21

SUSTAINABILITY REPORT 2023

Va l u e C r e a t i o n P r o c e s s

Value Provided

Management Vision Next10(2030)

Page 33

Page 17

A solutions partner that creates new value throughunderlying technology and is selected by customers● Aims for business portfolio

E

Environment& Energy

n

ka

iv

o

rt

en

v ir o

r i

nm

ent

c o n tpt i

Housingenvironment

b u

ng

g
r

o

d

u c

2027

p

t s
2025

● Provision of solutions throughCaerula™
● Realization of carbon neutrality

2028

2030

ST AGE3

ST AGE 4

Expansion of business fields

Realization of the management vision

Medium-term Management Plan(2024)● Elevation of business portfolio

STAGE2

Environmental Valuen

Agriculture

ST AGE 2

Establishment of platforms & strengthening of foundations

Livingware

ging

ing supu si

a sustainable society

t a l

ac

2024

e n

P
Ho

● Contribute to the realization of

m

&

L

Life
science

ST AGE1

regional issues and to revitalize regions

o

e

Healt
h & Agriculture2022● Contribute to business to solver

LifInformationelectronics

2021

Social ValueviFunctional
materials
for manufacturing
processes

2018nFood &
Beverages《Basic policy》
1. Qualitative improvement of existing businesses→ Strengthening of earning capacity
2. Expansion of strategic and growth investments
3. Promotion of sustainability and ESG* Caerula™ is the name given to productcategories accredited by the Group as
environmental contributing products

Page 19

Economic Value● Continuation of stable dividends

2024 quantitative targets
Net sales: 84,000 million yen
Operating profit: 6,200 million yen
2030 quantitative targets
Net sales: 120,000 million yen
Operating profit: 10,000 million yen

Okura Industrial Code of Ethics
philosophy

SUSTAINABILITY REPORT 2023

22

Fi n a n c i a l
Strategy
Implementing
investment
strategies with commitment
to improving capital efficiency

Yoshitomo Tanaka
Operating Officer,
Executive Vice President, Director;
Supervision of Corporate Center;and Manager, Finance and Business
Administration Department;
and Chairperson of Sustainability Committee

The role of Finance and Business Administration Department in the Medium-term Management Plan
The department to which we belong, namely the Finance and Business Administration Department, operates as the Corporate Center in the same way as the
Human Resources Department and General Affairs Department, its role being to control the total optimization of management by providing specialist functions
to the business divisions. In particular, I recognize that the most important role of the Finance and Business Administration Department is to strengthen theearning capacity of the company, that is, to continuously expand free cash flow.
To achieve this, the finance division is divided into an accounting function and a finance function. The former is required to grasp current earning capacity
accurately and swiftly, while the latter is required to implement policies concerning higher capital efficiency and shareholder returns. The business administration
division, meanwhile, is required to draft growth strategies and manage their progress. Of course, it goes without saying that they carry out their duties in close
coordination with the business divisions.
All of their objectives are summed up in the goal declared in the management vision, “Next10(2030)”, namely, “We will create social and environmental value
through our activities and helping both to improve customer value and address social issues”. To achieve this, in addition to making priority investments in thefour businesses where growth is expected, namely “Information electronics”, “Functional materials for manufacturing processes”, “Environment & Energy”, and“Life science”, we will create new value in our existing businesses through DX and productivity improvements. Our target is to achieve net sales of 120.0 billion
yen, operating profit of 10.0 billion yen, ROE of 8% or more, and total investments of 65.0 billion yen in 2030.

Management Vision Next10(2030)
We will create social and environmental value through our activities
and helping both to improve customer value and address social issues.
●

Focus Fields

Next10(2030)

Businesses that allow people to live in safety and comfort
Food and agriculture, living spaces, livingware, healthcare, medicine“Goal” toward next decade

Businesses that reduce environmental and energy burden
Sustainable materials, volume reduction, recycling, energy-saving

A solution partner that creates new value
through underlying technology and isBusinesses related to telecommunications

selected by customers

High-speed communications, flexible devices, mobility

A company that is trusted by society
A corporate group with technological advantages

75th Anniversary

2018

2021
ST AGE1

2022

2024

ST AGE 2

Establishment of platforms & strengthening of foundations
Please refer to23

page 17 for details about the management vision, “Next10(2030)”.

SUSTAINABILITY REPORT 2023

2025

2027

2028

2030

ST AGE3

ST AGE 4

Expansion of business fields

Realization of the management vision

Financial Strategy

Investment strategies to realize the improvement of profitability
There are various challenges involved in achieving these objectives and売上高（注力分野別）
Net sales (by focus field)

numerical targets. One is that currently, our operating profit margin is stuck at
5-6%, which is a considerably long way off the “Next10” target of just over

Living support

8%. There is also the fact that our price book-value ratio (PBR) is only around

Functional materials for manufacturing processes

0.4, which is well short of the PBR of 1 called for by the Tokyo Stock Exchange.

Environment & Energy

If we are to even come close to these numerical targets, realizing profit that(billion yen)exceeds capital costs will be essential. For the finance division’s part, we

200.0

150.0

In “Next10(2030)”, we have planned for a total investment amount of 65.0
current “Medium-term Management Plan(2024)”. Last fiscal year, the first

（％）
10

8.0

and show them guidelines for the profitability of the various investment

billion yen, 25.0 billion yen of which will be invested in the three years of the

ROE

Net sales
120.0 billion yen
Operating profit 10.0 billion yen

believe that it will be important to talk with the individual business divisions
projects that they are considering as we make investment decisions.

Information electronics

7.5

6.4

100.0

5.0

50.0

2.5

year of the medium-term management plan, we invested approximately 5.0
billion yen, and we plan to invest 10.0 billion yen in each of the second year
and third year of the plan, namely this fiscal year and next fiscal year.
One major investment that we have planned for the future is the expansion of
the production capacity of optical films for large LCDs at the Chunan Plant.
Construction is progressing well, and the expanded facilities are scheduled to

0

2021

2024

2027

0
2030 (year)

commence full operations next year. Also, as a measure to increase sales in
the global market, we have started construction of a plant in Vietnam. We*Net sales after application of the Accounting Standard for Revenue Recognition:
71.2 billion yen (2021)

intend to transfer production of adhesives for automotive use to Vietnam,
which we currently produce in Japan, and we are also planning to produce
films and other products in the Vietnam plant in the future. On the other hand,in terms of M&A, which will be essential if we are to reach 120.0 billion yen in
net sales, we are considering a variety of projects, but none have yet reached
the implementation stage. I acknowledge that we will need to speed up ourefforts in this regard.
In terms of investments in our existing business fields, in addition to actively
investing in digital transformation and automation to improve productivity, we
will also develop workplace environments in which women and senior
employees can work in safety and with peace of mind. Regarding our existing
business of the living support category products, we will pursue investments
to increase the percentage of environmental contributing products.

Keeping profitability in mind in sustainability investments as well

Okura Industrial Group has stated in the medium-term management plan that it will engage in sustainability with the SDGs and ESG in mind as a priority. We will
focus our particular efforts on initiatives to contribute to the environment through business and initiatives to enhance the human capital that will support ourbusiness growth. With the premise of our vision of creating new value, when making sustainability investments, we will not forget the perspective of profitability.
Also, as I mentioned above, our low PBR is an indication that Okura Industrial’s appeal is not being conveyed to shareholders. I recognize that we need toincrease opportunities for dialogue with shareholders and investors to properly communicate our growth strategies to them.

Achieve high capital efficiency and provide returns to shareholders

The only ways to improve profitability are to offer higher added value than our competitors or to increase our market share. Branding strategies will be essential
to achieving this. It goes without saying that such branding is not for the sake of status, but only for the purpose of earning returns on the investments we havemade. By listening more humbly to the voices of our shareholders and investors and accelerating our investments in growth areas, we will achieve high capitalefficiency, and through sustainable growth and the long-term enhancement of corporate value, we will implement stable returns to shareholders and investors
over the long term.
We would like to ask our shareholders and investors for their continued support and guidance in the future.

SUSTAINABILITY REPORT 2023

24

Business Strategy

Plastic Film
Business

Market creation based on sustainability & Provision of solutions
for environment and functions

Operating Officer,
Executive Vice President, Director;
Division President,
Plastic Film Division

Eiji Fukuda

Business Performance
The sales volume of food-packaging shrink films and general packaging films decreased, as it also did for industrial-use process films due to the impact of a
global semiconductor shortage. As the transfer of the increases in raw material prices, etc. to product prices had progressed, net sales amounted to 51,610
million yen (47,829 million yen for the same period of the previous fiscal year). Net sales before the application of the Accounting Standard for Revenue
Recognition increased as compared with the same period of the previous fiscal year. However, operating profit was 3,476 million yen (4,267 million yen for thesame period of the previous fiscal year), because, although there was progress with the efforts to transfer the rise in raw materials prices to product prices, they
were unable to absorb the repeated rises.
Net sales decreased by 68 million yen due to the application of the Accounting Standard for Revenue Recognition.

Net sales

Operating profit(million yen)(million yen)
60,00048,00049,65449,31146,50147,82951,610

5,000
4,000

36,0003,000

24,0002,000

12,0001,000

02018/122019/122020/122021/122022/12

0

4,458
3,219

2018/12

4,267

3,642

2019/123,476

2020/122021/122022/12Risks and Opportunities
Social Issues

Value Offered by Okura Industrial Group● Environmental issues● Population issues● Energy issues

・Climate change

・Population decline

・Microplastics

・Sharp rises in fossil
fuel prices

・Falling birthrates
and aging populations ・Energy selfsufficiency rates

・Reduction in plastics
usage
・Food loss

25

SUSTAINABILITY REPORT 2023

・Economic efficiency
・Environmental
compatibility● Reduction of CO2 emissions through recycling technologies

and environmentally friendly products● Provision of functional materials for manufacturing processes

using material design and lamination technologies(responding to advanced needs for mobility/EV-related
components)● Reduction of food loss through provision of advanced-

function films● Automation and labor-saving through film & system proposals

Review of the first yearof the medium-term management plan

Process for achieving
the medium-term management plan

Business Strategy

Toward Achievement of the Medium-term Management Plan

In 2022, the first year of the medium-term management plan, the prices of various raw
materials and secondary materials we procure continued to rise against the backdrop
of international circumstances, such as Russia's invasion of Ukraine. The prices of2022 results

utilities, including electricity and fuel used in plants, and logistics costs also increased
significantly. In response, we streamlined production and made other efforts to reduce● Expanded sales and reinforced capabilities

costs, and revised product prices as well, but these efforts were not enough to offset

of environmental contributing productsthat were pursued in the previous mediumterm management plan (recycled sheets
for building decorative materials, biomass
shrink film, Ecocalmulch, etc.)

the increase in costs, and although net sales met the target set for the first year of themedium-term management plan, operating profit fell far short of the plan.
Meanwhile, in the medium-term management plan, we set focus areas of (1)environmental products, (2) automation and labor-saving, (3) functional materials for● Completed product price revisions due tomanufacturing processes, and (4) expansion of business into new fields. Among those

sharp rises in raw materials prices

four areas, (3) functional materials for manufacturing processes achieved the planned● Aggregation of production facilities

results as it was able to grow EV-related films and films for living spaces. Regarding (1)environmental products, sales of recycled mulch products did not proceed as planned,2023 goals

although biomass plastic products grew, and (2) automation and labor-saving and (4)expansion of business into new fields also fell short of the plan as sales of their focus
products failed to grow.

Initiatives for the second yearof the medium-term management plan
In 2023, the second year of the medium-term management plan, we have retained (1)environmental products, (2) automation and labor-saving, and (3) functional materials
for manufacturing processes as our focus areas. We will concentrate our management
resources on areas with high profit margins and growth prospects, while shifting from● Commercializing mechanical recycling● Reinforcing manufacturing facilities for refill

pouches, environmentally friendly trashbags designated by municipality (recycled/biomass products), and expanding products
made with recycled materials● Establishing frameworks for film and system

proposals and labor-saving equipment
proposals

diversification to concentration in areas with low profit margins and gradually declining
growth, in our efforts to strengthen future-oriented businesses.
We will work to achieve the targets set for the second year of the medium-term

2 0 24 g o a l s ( f i n a l ye a r )management plan, with the “Next10(2030)” vision in mind, through: 1. concentration on● Establishing a total recycling scheme andthe functional materials area (Environment & Energy, Life science, Informationelectronics, and Functional materials for manufacturing processes); and 2. expansion

introducing mass balance system (CO2
credits)of “Caerula™” environmental contributing products (biomass plastics, biodegradable● Focusing on mobility/EV and semiconductor

plastics, recycled products, thin film products, etc.).
In the area of (1) environmental products, we will focus our efforts on biomass shrink
products, ECOWRAP™ barrier, and refilling products in the Life & Package Business
Unit, and biomass products and recycled products in the Basic Materials Businessareas by functional materials
manufacturing processesfor● Entering

into and expanding new fields(batteries, medical, OEM business, online sales)

Unit. In (2) automation and labor-saving, focus products will be biodegradable mulch
films and functional mulch films in the Agricultural Materials Business Unit, while in (3)functional materials for manufacturing processes, our focus will be on EV-related films
and films for electronic materials in the Process Materials Business Unit.
We will also continue our efforts to improve productivity and revise product prices in
response to consistently high raw material prices and sharp rises in utilities prices.

TOPICS
Odor-proof bag “NIOGUARD™”
We launched “NIOGUARD™”, an odor-proof bag that protects living spaces
from the unpleasant smells of used diapers and body waste. Unlike ourconventional odor-proof bags, this product features a multilayered film,
developed by the Product Development Department, that prevents odors
from leaking out from the bag, trapping them inside. Now that the pandemic hascome to an end and people have more opportunities to go out with their babies
and pets, we will enhance the range of our products that will enable users toenjoy daily life in comfort by protecting their living spaces from bad odors.

NIOGUARD™ 100 bags
(Size-S 200mmX300mm)

SUSTAINABILITY REPORT 2023

26

New
Materials
Business

By supplying optical-function films and functional components that are essential
to ICT devices, we will contribute to the development of the ICT industry and to
the realization of a smart society

Operating Officer, Director,
Division President,
New Materials Division

Tomoo Ueta

Business Performance
Although optical film products for large LCD panels were affected by inventory adjustments due to the sudden deterioration of the market, functional material
films for automobiles and other applications remained solid, resulting in net sales of 10,854 million yen (28,524 million yen for the same period of the previous
fiscal year). Operating profit was 1,342 million yen (2,373 million yen for the same period of the previous fiscal year) due to the increase in electricity utility charges
and a decline in the sales volume of optical film products, despite efforts to improve productivity primarily in the precision coating business.
Net sales decreased by 19,264 million yen due to the application of the Accounting Standard for Revenue Recognition.

Net sales

Operating profit(million yen)(million yen)

28,52430,00024,00022,22022,915

2,000

1,822

1,500

18,00010,85412,000

1,000

1,110

1,134

2019/122020/12

1,342

500

6,000
0

2,373

2,500

23,4242018/122019/122020/122021/1202022/122018/122021/122022/12Risks and Opportunities
Social Issues● Realization of a smart society through the development

Value Offered by Okura Industrial Group●

Provision of optical-function film products and functional
components essential to ICT devices●

Provision of functional film products and functional
materials compatible with evolution of mobility●

Provision of functional films and medical products to
support medical and nursing care settingsof the ICT industry● Realization of a safe and secure mobility society● Realization of an environmentally friendly society● Realization of healthy and comfortable lifestyles

27

SUSTAINABILITY REPORT 2023

Review of the first yearof the medium-term management plan

Process for achieving
the medium-term management plan

Business Strategy

Toward Achievement of the Medium-term Management Plan

In 2022, the first year of the medium-term management plan, we proceeded with capital investment
in a new acrylic film production line, acquisition of manufacturer accreditation for new automotive
items, and consideration of concrete plans for overseas expansion.

2022 results

In 2022, the optical film market was affected by various factors, such as a reactionary decline in stayat-home-related demand, a decline in appetite for purchases due to the situation in Ukraine, and the
shutdown of a panel assembly plant due to the COVID-19 pandemic in China. These factors resulted
in a significant decline in shipments of flat panel display products, such as televisions, smartphones,
tablets, and personal computers. In the automotive market, global semiconductor supply shortages led
to a significant decline in car production in the first half of 2022.
Polarizer-protection acrylic films for LCD televisions, a mainstay product of the division, were also
affected by inventory adjustments. However, as LCD televisions are steadily increasing in size,
resolution, and brightness around the world, we have been working to establish a structure for the● Conducted capital investment in new

production line for acrylic film
● Obtained manufacturer accreditation

for new automotive items● Considered

concreteoverseas expansion

plans

for

● Reviewed equipment and facilities for

reduced carbon
energy saving

emissionsandstable supply of wide acrylic films. Construction of a new wide acrylic film plant, which began inAugust 2022, is proceeding as planned, with the aim of starting operations in December 2023.

2023 goals

Having obtained manufacturer accreditation for new automotive items as planned, we launched sales
for information display applications, mainly for vehicles bound for Europe, and these products havebeen performing strongly. Automotive display screens are expected to rapidly become larger,
stretching from the driver’s seat to the passenger seat, and we will continue to develop automotive
display components.
Regarding overseas expansion, we developed a business plan and have been considering the detailsof establishing overseas manufacturing sites.

● Completing new production line foracrylic film and obtain accreditation● Commencing

mass production of
new automotive items● Establishing overseas manufacturing

sites● Expanding renewable energy (solar

Initiatives for the second yearof the medium-term management plan

panels)In 2023, the second year of the medium-term management plan, we will work on the completion of a new
acrylic film production line and on obtaining accreditation, the establishment of overseas
manufacturing sites, and the expansion of renewable energy (solar panels).

2 0 24 g o a l s ( f i n a l ye a r )Work has begun to launch a new production line for wide optical acrylic film for large display LCD
televisions, with a goal of December 2023. We will obtain accreditation from customers at an earlystage so we can accommodate strong demand. As Chinese manufacturers of polarizing platesannounce plans to invest in wide polarizing plate manufacturing facilities one after the other, we arelooking to expand our own business further by expanding sales in the Chinese market.
In May 2023, we established OKURA VIETNAM CO., LTD. In Vietnam as an overseas manufacturingsite. Construction of the new plant will begin in the second half of 2023, with the aim of starting
operations in January 2025.
We are also working to expand the use of renewable energy for the realization of a sustainable society.

● Commencing full-scale operation of

new production line for acrylic film
● Expanding processing business forautomotive market● Commencing business at overseas

manufacturing sites● Operating

plants using renewableenergyIn April 2023, solar panels with a generating capacity of 917 Kw were installed on the rooftop of thedivision’s D Building under a power purchase agreement (PPA). With this installation, the Company
expects to reduce its greenhouse gas emissions by approximately 600 tons-CO2 per year*. Goingforward, we will roll out this initiative to other buildings in our efforts to reduce CO2 emissions even further.
* CO2 emission factor (Shikoku Electric Power Company emission factor (adjusted) for FY2021) is calculatedusing 0.532(kg-CO2 /kWh).

TOPICS
Construction of new plant for
new production line for wide optical acrylic film

Equipment being delivered and installed for the new line

The equipment to be added to the new plant under construction on the siteof the Chunan Plant is an integrated hot-melt extrusion/vertical-horizontal
stretching machine that accommodates the product width of 2,600 mm
needed to produce wide polarizing plates.
Construction of the plant began in August 2022, and commissioning will
begin at the end of September, with a view to starting operations in
December 2023.

SUSTAINABILITY REPORT 2023

28

Housing
Materials
Business

Through our material recycling and environmental contributing productbusinesses that leverage our technologies in wooden panels and processing, we
will contribute to a sustainable society and the SDGs

Operating Officer;
Division President,
Housing Materials Division

Seizo Kagawa

Business Performance
Due to factors including an increase in sales volume of particleboard products thanks to efforts to acquire new customers and expand sales to existingcustomers, as well as sales promotion efforts for the environmentally friendly formwork “comori™”, the sale of which began in the previous fiscal year, net sales
amounted to 13,341 million yen (10,891 million yen for the same period of the previous fiscal year). Net sales before the application of the Accounting Standard
for Revenue Recognition increased as compared with the same period of the previous fiscal year. Operating profit was 862 million yen (591 million yen for thesame period of the previous fiscal year) due in part to the increase in net sales and the continued stable production of particleboards, despite the ongoing impactof the rising raw material prices.
Net sales decreased by 178 million yen due to the application of the Accounting Standard for Revenue Recognition.

Net sales

Operating profit(million yen)(million yen)

15,00013,341

8,068

7,410

6,000

600

6,912

6,254

400

382

465
372

456

200

3,000
0

862

800

12,000
9,000

1,000

2018/122019/122020/122021/12*202022/12*1

2018/122019/122020/122021/12*32022/12*1*1 From 2022, net sales and operating profit of Okura House Co., Ltd. and Okura Precut System Co., Ltd. are included in the Housing Materials Business segment, instead of the Other Businesses segment.
*2 The figure for net sales is 10,891 million yen after changing the net sales of Okura House Co., Ltd. and Okura Precut System Co., Ltd. from the Other Businesses segment to the Housing Materials Business segment.
*3 The figure for operating profit is 591 million yen after changing the operating profit of Okura House Co., Ltd. and Okura Precut System Co., Ltd. from the Other Businesses segment to the Housing Materials Business segment.

Risks and Opportunities
Social Issues● Realization of a low-carbon society

Value Offered by Okura Industrial Group●

Carbon storage from particleboard is approximately 180
kt-CO2/year in 2022. We will store carbon dioxide forextended periods as a means of material recycling.

●

We will extend wooden housing materials business using
Japanese conifers. We will promote the wood cycle andcontribute to carbon fixation and the carbon cycle.

●

In business fields that range from materials to homeconstruction, we will play a core role in easy-to-installmaterials and the systematization of home construction.

● Realization of carbon neutrality● Decline in construction workers due todeclining birthrate and aging population

29

SUSTAINABILITY REPORT 2023

Review of the first yearof the medium-term management plan

Process for achieving
the medium-term management plan

Business Strategy

Toward Achievement of the Medium-term Management Plan

In the particleboard field, which is our business foundation, in response to factors such as the
pandemic, the lumber price crisis, and the fall in supply in the wooden panel market overall, we
continued our stable supply through the improvement of productivity and optimization of production,and the enhancement of maintenance. With the aim of further strengthening our business structure,
we worked to maximize added value by increasing the ratio of secondary processed products in oursales portfolio, achieving a certain level of results. Meanwhile, despite the conspicuously sharp rises
in prices of raw materials and electricity, we succeeded in mitigating their impact by promoting cost
reductions and active deployment of sales strategies.
We made capital investments in the environmental materials field, including the construction of new

2022 results● Particleboard field

Maximized added value in the range
from chips to tertiary products● Environmental materials fieldObtained recognition from general construction
firms and expanded production capacity● Housing components field

production lines to establish a mass production system, in preparation for the full-scale launch of the

Secured orders for more houses andconfirmed business feasibility

environmentally friendly formwork “comori™” business. By actively marketing our products to● New business fields

general construction firms and developers, we are gradually gaining market recognition.

Commercialization of wood plastics, businessplanning of domestically-produced lumbers

In the housing components field, our efforts to secure stable orders achieved a certain level of results.
We also made capital investments to promote the automation of processing operations.
In the Housing Materials Business segment, we started consideration of specific plans for thedomestically-produced lumber business that will contribute to a carbon-free society, taking advantage of2023 goals● Particleboard field

our strengths in vertical cooperation within the Group and collaboration with other companies. We will

Maximizing efficiency and value forcustomers through DX

promote this plan as a business that will contribute to the next medium-term management plan.

● Environmental materials field

Initiatives for the second yearof the medium-term management plan
While the market surrounding the Housing Materials Business faces the new challenge of shrinking
demand after the lumber price crisis, we will continue to develop optimal strategies in each business field.
In the particleboard field, which is our foundation business, we will expand our market share based

Usage results, expanding of recognition,gathering general construction firm needs● Housing components field

Expanding adoption in wooden nonhousing buildings● New business fields

Preparing and pursuing launch of domestic
materials business areas

on customers’ trust gained from our stable operations, and we will respond to the changing market
through portfolio analysis, strengthening of production line maintenance, and efficiency improvements
brought by DX.
In the environmental materials field, we will further strengthen sales of “comori™”. We will strive to2024 goals (final year)● Particleboard field

further increase market recognition through collaboration with partners, primarily general construction

Expanding production volumes and ratio
of processed products

firms and developers, to strengthen SDGs initiatives in the construction business. To expand the use● Environmental materials fieldof domestically-produced lumber in public facirities, we will strengthen our cooperation with local

Acting on local production for local consumptionin Kanto area (production and sales base)governments by leveraging the “comori™” concept, in an effort to grow it into a pillar of our business.

● Housing components field

In both the housing components field and the lumber processing field, despite the impact of theshrinking market after the lumber price crisis, we see falling lumber prices as an opportunity and will
strengthen our proposals to customers, such as highly functional components, design andconstruction support, and the promotion of wooden construction of non-residential buildings. We will

Collaborating with nationwide panel manufacturers
and expanding into other regions● New business fields

Starting new domestically-produced lumbers
business and planning and proposing new
businessalso systematically develop plans for capital investments for the automation of processing operations.
The Housing Materials Business segment will realize the material recycling of wooden materials
through the manufacture and sales of wooden panels, by making use of materials, processing, homeconstruction, and subsequently dismantled materials. We will contribute to the realization of acarbon-free society, including carbon storage and the carbon cycle, and SDGs, through business.

TOPICS
Okura Precut System Co., Ltd. relocation planA plan to relocate Okura Precut System Co., Ltd., a Group company, from its current location in
Showa-cho, Marugame City to an industrial park in Takase-cho, Mitoyo City is currently in progress.
Given the importance of this company’s lumber processing function and housing components
supply function in the event of anticipated future disasters, we made the decision to relocate it
to an industrial park with a low risk of damage. Additionally, as this relocation will enable Okura
Precut System to produce a wider range of products, the plan is to shift to the framework panel
precut business and to engage in the special structural materials (CLT, etc.) processing
business, which will contribute to the creation of second forests in urban areas, in an effort togrow the business into the one that supports lumber processing and provision functions.

Concept drawing of the completed plant

SUSTAINABILITY REPORT 2023

30

Research &Development
CenterOperating Officer;
General Manager,
Research & Development Center

Kazuma Onishi

Research & Development Policy
Approach to research and development

The Research & Development Center has been working on its missions to (1) create new businesses, (2) deepen material design and development of sustainable
materials, and (3) deepen existing technologies and develop products with new underlying technologies.
In the course of development, we identify market needs from a marketing perspective and work to ensure development that is closely aligned to continuously
changing needs. We believe that it is important to define customers and value and to develop businesses that will achieve what customers are seeking.
To realize these missions, we will pursue business development so that the businesses and products thus created can support the evolution of the world’s
technologies and contribute to richer and more convenient lifestyles.

Focus areas
We engage in product development in the three focus areas of the Research & Development Center to support safe, comfortable, and enriched lifestyles andpromote research and development that will contribute to a sustainable society.

Environment & Energy

Information electronics● Mechanical recycling● Chemical recycling● EV materials● Energy-related components

Life science
Support people’s healthy
and enriched lives with safe
and secure functional
products

Contribute to the developmentof the Information electronics
area and support safe,
comfortable lifestyles with
innovative technologies

Reduce environmental andenergy burden andcontribute to the realizationof a sustainable society(

LCP film
product indevelopment● Functional materials for● Next-generation information)

medical careand communication materials● Advanced-function display
materials● Functional materials for
manufacturing processes● Components for cell culture

processes● Naturally derived ingredients

Introductionof Single-use
Bags
Contributing to SDGs with materials for medical care
In recent years, there has been growth in the sectors of biopharmaceuticals and regenerative medicine
using cell culture technologies.
As the pharmaceutical manufacturing process is currently in transition from stainless steel reactors tosingle-use reactors, Okura Industrial provides single-use bags and related components for use in singleuse reactors.
In the manufacture of pharmaceuticals, washing and sterilizing reactors are crucial tasks when switching the
products being manufactured. Our single-use products are expected to shorten the time required for those tasks.
Our single-use bags can accommodate various needs, such as size and specifications, and can be used
more efficiently.
At the Research & Development Center, we will promote product development in the Life science area tocontribute to SDGs.

31

SUSTAINABILITY REPORT 2023

< Features >・Manufactured in a clean room environment
・Customizable, including assembly・All assembly and processing of components,
including films and bags, are conducted in Japan・U.S. Pharmacopoeia-compliant

Business Strategy

Other
Businesses
Hotel BusinessBusiness overview
Okura Hotel Marugame has accommodation for up to 506 guests, as well as conference, banquet,and dining facilities. Guests are assured of a high quality stay, from a panoramic bath embraced bya sense of openness with panoramic views of the Seto Inland Sea to gourmet cuisine. The hotel
makes an excellent home base for a wide range of activities for the enjoyment of Marugame, an areathat offers an abundance of attractions, including Marugame Castle, sport, art, and even soul food.

Strategy
COVID-19 has been reclassified as Class 5 under the Act on the Prevention of Infectious Diseases
and Medical Care for Patients with Infectious Diseases, and we expect the number of hotel guests
to recover, particularly in the domestic tourism sector. With plans to refurbish guest rooms, installcard keys, and repair exterior walls in 2023, we will strive to further improve customer satisfaction bycreating a more comfortable space for our guests, which will help secure profits.

Information Processing BusinessBusiness overview
Okura Information System mainly engages in software development. The company also operates
and maintains ICT systems, as well as manufacture and sell package software. It leans in closely tocustomers to give shape to their needs and support its customers’ management improvements
through the use of ICT. In addition to the development of systems for the manufacturing industry, thecompany has also ventured into the distribution and medical sectors, and the products and services
it has created are now used by many customers.

Strategy
The company will promote DX in a variety of fields. Centering on the construction of systems
to support priority growth businesses, it will play a part in the improvement of productivity andstrengthening of competitiveness in Okura Industrial Group by promoting the establishment of
stable infrastructure and the improved efficiency and digitalization of operations.
Further, in addition to expanding its sales channels and strengthening the foundation of its existing
business targeting dispensing pharmacies, based on the image processing technology and AI
technology the company has cultivated in this business, it will create high-quality, user-friendly™

™

“Kansa Renji mini”(Pharmaceutical Audit machine)“Kansa Renji R”(Pharmaceutical Audit machine)

products and services, with the aim of opening up new markets.

Business Performance
Net sales

Operating profit(million yen)(million yen)
1,000

7,500
6,000

6,316

5,727
4,778

4,500

800

5,154

600

531

400

3,000

1,454

1,500
0

810

2018/122019/122020/122021/12*22022/12
*1

256

200
0

2018/122019/122020/12302

2021/12*33652022/12*1*1 From 2022, net sales and operating profit of Okura House Co., Ltd. and Okura Precut System Co., Ltd. are included in the Housing Materials Business segment, instead of the Other Businesses segment.
*2 The figure for net sales is 1,175 million yen after changing the net sales of Okura House Co., Ltd. and Okura Precut System Co., Ltd. from the Other Businesses segment to the Housing Materials Business segment.
*3 The figure for operating profit is 166 million yen after changing the operating profit of Okura House Co., Ltd. and Okura Precut System Co., Ltd. from the Other Businesses segment to the Housing Materials Business segment.

SUSTAINABILITY REPORT 2023

32

Sustainability

Sustainability Initiatives
Okura Industrial Group believes aiming to contribute to creation of a society which can ensure sustainable development will lead to the Group’s sustained growthand increase in medium- and long-term corporate value.
With the CSR Policy of “Continuing to be a company that is trusted by society”, we have conducted the business operation focusing on E (environment), S (social),
and G (governance) in the changing social environment. Going forward, we will promote proactive activities in which management strategies center on sustainability, basedon materiality, material issues for provision of solutions through business which were identified in 2020, as well as bases for business continuity (OKURA Business base).

Philosophy system
Management
philosophy
Management vision

Next10（2030）“Goal” toward next decade

Sustainability
Sustained growth and increase in medium- and long-term corporate value

Sustainability Policy and Principles
Environmental Policy Quality Policy
Corporate Governance Policy
Business

ESG

Business activities coexisting with society

Realize through businessMedium-term management plan
Annual business plan

ESG management

MottosOkura Industrial Code of Ethics

Management Philosophy

33

Respect the Individual

Contributing to the Society

Customers FirstWe will respect the human rights of each individual anddevote our efforts to creating a safe, comfortable, andlively workplace.

We will contribute to a safe and comfortable life
through our products and services, and actively
engage in social contribution activities as a good
corporate citizen.

We will continue to provide products and services
which our customers need in adapting to changes inthe environment, and will grow our solution businesswith them.

Sustainability Policy

MottosOkura Industrial Code of Ethics

Aim for corporate growth through business, keeping
in mind our coexistence with society, so that we may
continue to be a company that is trusted by society

Action guideline for supporting business activities

Continue to be a company that is trusted by society

Sustainability basic principles

Improving everyday

Seven principles of action

1. Balance between business and ESG
Under our management philosophy, we will aim at sustainedsocial development and an increase in medium- and longterm corporate value by conducting business operation
focusing on ESG in the changing social environment.
2. Conservation of the global environment
The Group will contribute to conservation of the global
environment, taking into account climate changes andother global environment issues through businessactivities, and providing products and service towardrealization of a carbon-free society.
3. Compliance with laws and regulations, respect for humanrights, and consideration of the labor environment
In all business activities, the Group will comply with laws,
regulations, and social norms, respect human rights, value
each worker with diversity including gender, internationality,
career, and age, and promote human resource development,
an improvement of labor environment, and contribution tocommunities and a society.
4. Information disclosure and dialogue
In relation to progress in initiatives for sustainability in its
own business activities, the Group will proactively disclose
information, and reflect social evaluation received throughdialogue with stakeholders in management.

Each of us is to remain conscious of the need for improvement,
set their own goals, and work to develop their abilities.

SUSTAINABILITY REPORT 2023

Creativity and ingenuity

1. To provide goods and services allowing people to live insafety and comfort and to earn the trust of users andconsumers.

We will employ new viewpoints and ideas to improve,
innovate, and develop products and services without
preconceived notions.

2. To realize the comfort and affluence for our employees,
ensure a safe and comfortable working environment, andrespect their personalities and individuality.

Harmonious cooperation

3. To engage in fair, transparent, and free competition; tomaintain clean and normal relationships with government
and public administration.

We will each endeavor to communicate our goals and ideas
to one another, value dialog, build trust, and resolve issues byconsidering total optimization.

4. To proactively and honestly disclose corporate informationand communicate with society at large in order to build
good relationships with all stakeholders.
5. To resolutely oppose antisocial forces and groups thatthreaten the order and safety of civil society.
6. To voluntarily and proactively address environmental
issues, recognizing that it is an essential condition for the
existence and activities of a corporation.
7. To conduct our overseas activities in ways that respect the
local culture and customs and contribute to thedevelopment of the local society.

Sustainabilit y Initiatives

Message from the Chairperson of
the Sustainability Committee

Operating Officer,
Executive Vice President, Director;
Supervision of Corporate Center;and Manager,
Finance and Business Administration
Department; and Chairpersonof Sustainability Committee

Yoshitomo Tanaka

Why address sustainability?
Our aim is to be “create social and environmental value throughour activities and helping both to improve customer value andaddress social issues”, as declared in the management vision,“Next10(2030)”. This means that we will grow into a company that
contributes to the realization of a sustainable society, keeping in
mind our coexistence with society. Amid the demand for thebuilding business models premised on a recycling-oriented
economy, we view this changing environment as a business
opportunity, and we will realize sustainability through new
business creation and the continued creation of innovation.

plant facilities to energy-saving equipment. We are also accrediting
our products with our in-house designation of environmental
contributing products and pursuing initiatives to increase thepercentage of such products, as well as considering the
introduction of internal carbon pricing (ICP) to instill the importanceof decarbonization in our employees. Further, our response to the
CDP Climate Change 2022 Questionnaire received a score of B.

Strengthening human resources development
geared toward growth strategies
Regarding society, our main focus is human resources developmentthat will enable growth strategies for the realization of “Next10(2030)”.

Development of six issues of materiality

We are pursuing efforts in four related areas, namely development

We have defined six issues of materiality for the realization ofengagement. In particular, to nurture innovative leaders who aresustainability. They are promoting management for decarbonization,

able to take on challenges, we will take advantage of external

further promoting resource recycling measures, creating andpersonnel exchanges and training to develop people who will

expanding environmental contributing products, promoting CSR

shoulder the next generation of management. We will also pursue

procurement, gaining a competitive advantage by promoting

the education of evaluators to coincide with the rebuilding of ourdigital transformation (DX), and conducting research andpersonnel evaluation system. Further, we will promote diversity

development geared to creating innovation. We have also set four

through the recruitment of women and foreign nationals and theiritems as essential bases for Okura Industrial Group to continue

promotion to executive positions, to bring new sensibilities anddoing business, namely “improving corporate reliability andways of thinking to the organization.

programs, personnel evaluation systems, diversity, and employeetransparency”, “thorough prevention of contamination”, “coexistencewith local communities”, and “developing a working environment
where employees are motivated to work”.

Elevating the supervisory functionof the Board of Directors

Promoting installation of solar power
generation facilities at individual plants

Regarding governance, we have reviewed the composition of theRegarding the environment, as an initiative to reduce ourranks of our Outside Directors. We have established an Audit andenvironmental burden, we have declared a target of reducing CO2

Supervisory Committee and Nomination and Remuneration

emissions by 50% by 2030 compared with 2013 levels. To thisCommittee, and, going forward, we hope to further clarify theend, each of our business sites is proceeding with the installation

division of roles between the supervisory function of the Board ofof solar power generation facilities and progressively upgrading

Directors and the executive function of the Board Meeting.

Board of Directors, and we now have seven Inside Directors andfive Outside Directors. We have also welcomed a woman to the

SUSTAINABILITY REPORT 2023

34

Sustainability

Promotion System
Okura Industrial Group regards solutions to sustainability-related issues as business opportunities. The issues include addressing climate change and otherproblems affecting the global environment, respect for human rights, and fair and appropriate business activities for all stakeholders, including employees.
Accordingly, in 2021, the Group established the Sustainability Committee into which the CSR Committee was modified. Also in April 2021, the Group newly
established the Sustainability Promotion Department as a section in charge of formulating a basic plan related to ESG activities to promote the initiatives. The
Committee is chaired by the Operating Officer, Executive Vice President and Director who is in charge of promoting sustainability and made up of Directors
and Operating Officers. Among them, Outside Directors are included. Thereby, whether or not the Group’s ESG activities are consistent with social trends ischecked from an objective perspective to promote the activities. In 2022 the Committee was held three times, shared materiality identified by the Group andmedium- and long-term issues recognized in relation to bases for business continuity (OKURA Business base), and discussed and decided measures forsolving those issues.
Further, the Compliance Committee has been established to manage compliance for the Group. It coordinates with the Compliance Action Committee, its
working unit, which conducts activities to raise awareness and responds to internal whistleblower reports.
Under such systems, we proactively disclose information on situation of the initiatives to stakeholders, and push ahead with various activities, continuously
improving them.
Audit and Supervisory Committee

Audit,
supervise

Board of Directors
Instruct

ReportSustainability Committee

Compliance Committee

Decide activity policies Approve plan activities and outcomes
InstructSustainability Promotion Department(Admin. Office)Instruct

Disclosure

Plan and Propose

ReportEnvironmental Protection
Promotion Committee

Environmental
Management
Department

Stakeholders

ReportCompliance Action
Committee

Quality
Assurance
Department
Instruct

Legal andIntellectual Property
Department

GeneralAffairs
Department

Human
Resources
Department

DX
Promotion
OfficeConsider/develop
specificmeasuresReportQuality management system(QMS) ISO9001
Chief QMS administrator

Business Divisions,
Plants,
Subsidiaries

Environmental management
system (EMS) ISO14001
Chief EMS administrator

Materiality of Okura Industrial Group
Materiality means material issues, which are identified as issues to be truly addressed by evaluating a degree of impacts of corporate activities on company’s
own business and social issues, and prioritizing them.

1

Promoting management for decarbonization(climate action measures)
KPI

CO2 emissions from the Company/logistics

5
P.39,44

Gaining a competitive advantage by promoting
digital transformation (DX)KPI

● Reduce CO2 emissions from the Company (plants and offices)

digital technologies● Make sales activities and marketing more sophisticatedFurther promoting resource recycling
measures
KPI

Sales of products using waste plastics recoveredfrom a market and recycled

P.48● Improve productivity and reform operations by introducing new● Increase efficiency in logistics (shipping) and reduce CO2 emissions therefrom

2

Enhancement of quality inspection
with IT/AI technologies● Pursue higher quality and safer products

P.44● Reduce waste from plants largely

6

Conducting research and development geared
to creating innovation
KPI● Reduce marine plastics

Recover waste materials after use, and promote recycling

Numbers of development themes andpatent applications

P.31● Strengthen marketing leading to creation of new business

3

Creating and expanding
environmental contributing products
KPI

Environmental contributing products' share ofliving support category sales● Use open innovations proactively

P.45

Identification of materiality● Develop a mechanism of creating environmental contributing

Very highproducts and set medium- and long-term targets

2● Develop and sell products with excellent functionality

4

Promoting CSR procurement
KPI

Establishment of a sustainable procurement
system and management of investigation results

4

P.59

● Establish and operate a mechanism of raw material procurement

conscious about human rights, etc.
● Establish and operate a mechanism of raw material procurement
conscious about environment (green procurement)

3

1Socialimpact

6

5

High
High

Very highBusiness impact
Environment

35

SUSTAINABILITY REPORT 2023

Technology

In addition, we set four items, “Thorough prevention of contamination”, “Developing working environment where employees are motivated to work”,“Coexistence with local communities”, and “Improving corporate reliability and transparency”, which become essential bases for Okura Industrial Group tocontinue business. As with the materiality, we will promote proactive initiatives.

Improving corporate reliability
and transparency
KPI

Sustainabilit y Initiatives

Bases for Business Continuity (OKURA Business base)Thorough preventionof contamination

Numbers of compliance violations andadministrative disciplinary actions

P.62

KPI

Number of violations of domestic
laws and regulations

P.44,59● Disclose ESG information proactively● Manage hazardous chemical substances appropriately● Promote dialogue with stakeholders● Reduce water use and manage water resources

appropriately● Develop internal control/compliance systems● Identify risks and brush up business continuity plan (BCP)

Coexistence withlocal communities
KPI

Developing working environment
where employees are motivated to work

Business base

Numbers of social contribution activities
and participants in them

KPI

P.53

Ratios of female executives and female
managers

P.49● Realize diversity management● Promote volunteer activities and regional environmental● Increase productivity and realize a good work-life balance

conservation activities

with reform of working practices● Establish a personnel evaluation system that allows people● Participate in businesses to solve regional issues or toto have a sense of job satisfaction and enhance a humanresource development system

revitalize a region● Use regional resources proactively● Strengthen occupational safety and health

Environment

SocialGovernance

Steps for Promoting Identification of Materiality
STEP 0

STEP1

STEP2

STEP3

STEP4

Comprehension of relationsof the Company’s own
activities, products, andservices with SDGs

Understanding about
initiatives of competitorsand consideration of theCompany’s future initiatives

Analysis of external
environment of value chain
and consideration on the
Company’s future initiatives

Development of prospective
materiality and activity
themes

Evaluation of importanceof activity themes andidentification of materiality● Comprehend social value● Consider issues to solve in● Assume future social● Summarize the activities● Consider business value andto be created by theCompany’s current initiatives● Clarify SDGs to which

the Company’s activities,
products, and services
contributeenvironment, society, andcorporation● Compare initiatives ofcompetitors and those of theCompany to identify future
initiatives (activities)changes (future image)in terms of environment,
society, and technology● Identify what value theCompany will create in theassumed future image andextract future initiatives(activities)

extracted in Step 1 and 2,
and extract prospective
activity themes andmateriality

social value for each activity
theme● Evaluate importance for eachactivity theme, and identify
the Company’s materiality(material issues)

SUSTAINABILITY REPORT 2023

36

Environment

Basic Approach to Climate Change

Okura Industrial Group has defined sustainability materiality in response to social issues encapsulated by the SDGs and the requirements of stakeholders. This
specifically refers to promoting management for decarbonization (climate action measures), further promoting resource recycling measures, creating andexpanding environmental contributing products, promoting CSR procurement, gaining a competitive advantage by promoting digital transformation (DX), andconducting research and development geared to creating innovation. By tackling these issues, the Group will seek to provide solutions to society and achievesustained growth as a company.
Investors and other stakeholders are particularly concerned about the impact of climate change on companies. Okura Industrial Group for its part, has analyzed
the impact of climate change and begun to respond to it based on the TCFD
recommendations. The analysis has made clear that while the long-term financial
impact of climate change risk is obvious, there are also, simultaneously, many
opportunities.
Based on this analysis, the Group intends to work to reduce climate change risk andexpand business opportunities, helping to bring about a more sustainable society.

Governance
Okura Industrial Group regards solutions to sustainability-related issues as business opportunities. The issues include addressing climate change and otherproblems affecting the global environment, respect for human rights, and fair and appropriate business activities for all stakeholders, including employees. To
promote initiatives for these issues, the Group has established the Sustainability Committee, which is chaired by the Operating Officer, Executive Vice President
and Director who is in charge of promoting sustainability and made up of Directors and Operating Officers.
In addition, in April 2021, the Group established the Sustainability Promotion Department to formulate and promote basic plans on ESG activities that cut acrossthe organization. Plans related to environmental protection developed and proposed by the Sustainability Promotion Department are deliberated on by theEnvironmental Protection Promotion Committee. Further, the Compliance Committee has been established to manage compliance for Okura Industrial Group.
It coordinates with the Compliance Action Committee, its working unit, which conducts activities to raise awareness of the spirit of compliance and responds tointernal whistleblower reports.
Under these systems, the Group actively discloses information on its initiatives to stakeholders, including climate action measures, the most important theme,
and manages them through an environmental management system and other mechanisms while continually making improvements, with management reviews
being conducted on the results.

37

SUSTAINABILITY REPORT 2023

The Group developed two scenarios to clarify its climate change risks and opportunities. One is a 4°C scenario, which assumes that climate action measures do
not make headway and the temperature continues to rise on the same trajectory and that physical risks and opportunities occur as a result of this. Based on this
scenario, analysis was performed for acute and chronic risks. The other is a 2°C scenario that assumes various activities will be conducted to prevent warming
and looks at risks and opportunities connected with the transition to a carbon-free society. Analysis in this scenario was conducted related to government policy
and regulations, technology, markets, and reputation.
In conducting scenario analysis, value chains were identified and specific considerations made for each of Okura Industrial's main business divisions, the Plastic
Film Division, the New Materials Division, and the Housing Materials Division, the financial impacts of key risks and opportunities were calculated, and response

Basic Approach to Climate Change

Strategymeasures were considered.

Summary of scenario analysis results
An increase in direct costs to the Group from the introduction of a carbon tax and an increase in raw material costs from the tax being levied on suppliers arethought to be the main factor that will reduce earnings.
Cost increase example: *Based on the figures in WEO 2022, IEA (NZE scenario) and the exchange rate as of January 31, 2023 (1 USD = 130.43 JPY) andestimating that cost increase from carbon tax, etc. is 18,260 yen/t-CO2, the annual cost increase in 2030 will be roughly 1.3 billion yen if CO2 emissions targets(Scope 1 and 2) are met, and roughly 2.2 billion yen if CO2 emissions (Scope 1 and 2) remain at the same level as the present.
At the same time, based on areas targeted for CO2 reduction—films that use recycled and biomass materials, barrier films that help reduce food loss,
peripheral components that contribute to vehicle electrification, and particleboard using construction waste—the increase in demand for carbon storage
through cascade use of wood products and increased use of wood in buildings, for example, became clear as a business opportunity.
The Group will promote climate action measures integrated with management strategy while clarifying response measures for individual key risks andopportunities.

Risk Management
The process used by Okura Industrial Group to select and evaluate climate change risks and opportunities is conducted by each division in the following steps.
Management of risks and opportunities will be carried out under the system indicated in the “Governance” section.

STEP

01

STEP

02

STEP

03

STEP

04

STEP

05

Clarify the value chain,

Clarify climate change

Evaluate importance byClarify the financial

Clarify measures inincluding Scope 3

risks and opportunities

the degree of impact on

impact of key risks andresponse to key risks

based on 2°C and 4°C

the Group

opportunities

and opportunities

scenarios likely apply toeach organization in theGroup and down thevalue chain

SUSTAINABILITY REPORT 2023

38

Environment

Indicators and Targets
Reduce GHG emissions
Okura Industrial Group has set a FY2030 CO2 reduction target for Scope 1 and 2, and has been conducting activities to reduce CO2 emissions.

Scope 1 and 2 emissions reduction target
FY2030: 50% reduction from FY2013
The actual emissions have decreased slightly since FY2021. We will continue making steady reductions to achieve the target.

Scope 3 emissions
From this year, the Group also calculates Scope 3 emissions (indirect emissions other than the above Scope 1 and 2 in a supply chain from raw material
procurement to disposal of products.)
The calculation has found large volumes of category 1 and category 12 emissions.
The Group will continue the calculation, and set a reduction target and work on forming an action plan for the entire supply chain.

Transition of CO 2 emissions (Scope 1 and 2)

CO2 emissions（t-CO2）

FY2030 target

180,000
150,000

154,207 146,734 158,593 156,246

FY2024 target

132,409 126,750

120,000

94,81490,000

FY2024 target
107,945 tons-CO2/year

60,000

FY2030 target
77,104 tons-CO2/year

30,0000122,258 121,718

118,340

2013

2014

Okura Industrial Group Scope 1 and 2

50％
reductioncompared to FY2013

FY2013 (actual)

154 ,207 tons-CO /year
2

FY2030 (target)

77,104tons-CO2 /year

2015

2016

2017

2018

2019

2020

2021

2022

(FY)

Okura Industrial Group Scope 3 calculation
Category 1

331,994 tons-CO 2 /year

Category 2

18,347 tons-CO 2 /year

Category 3

17,445 tons-CO 2 /year

Category 4

46,944 tons-CO 2 /year

Category 54,181 tons-CO 2 /year

Category 6

326 tons-CO 2 /year

Category 7

1,127 tons-CO 2 /year

Category 9

40,777 tons-CO 2 /year

Category 12

330,915 tons-CO 2 /year*Calculated based on data from January to December 2022.
(For category 5, calculated based on data from April 2022 to March 2023.)

39

SUSTAINABILITY REPORT 2023

*The figures for FY2013 to FY2020 represent
data for April of each fiscal year to March of
the following year
*The figure for FY2021 represents data for
January to December of the year (verified
by a third party)*The figure for FY2022 represents data for
January to December of the year (to beverified by a third party)*In the calculation of the Scope 2 emissions,a basic emissions factor is used for FY2013
to FY2020, and an adjusted emissions
factor for FY2021 and FY2022

Scope 3 aggregate results

Category 12
41.8％

Category 1
141.9％

Category 2
2.3％

Category 9
5.1％
Category 7
0.1％

Category 4
5.9％

Category 6
0.04％
Category 5
0.5％

Category 3
2.2％

Environmental data index

Unit

Calculation method

Scope covered

Category 1
Purchased Goods andServices

tons-CO2(Weight of purchased raw materials × Emissions unit value)
Emissions unit values are adopted from IDEA v3.2 (for the calculation of supply chain greenhouse gas
emissions)

Divisions of Okura
Industrial Co. Ltd.
(Partly include
consolidated subsidiaries
in Japan)Category 2
Capital Goods

tons-CO2(Value of acquired capital goods (facilities, equipment, buildings, etc.) × Emissions unit value)
Emissions unit values are adopted from the Ministry of the Environment’s “Database on Emission Intensities
for Calculating Organizational Greenhouse Gas Emissions, etc. through a Supply Chain (Ver. 3.2)”

Okura Industrial Co., Ltd.
Consolidated subsidiaries
in JapanCategory 3
Fuel- and Energy-Related
Activities Not Included in
Scope 1 or Scope 2

tons-CO2(Electricity purchased × Emissions unit value) + (Fuel consumed × Emissions unit value)
Emissions unit values are adopted from IDEA v3.2 (for the calculation of supply chain greenhouse gas
emissions)

Okura Industrial Co., Ltd.
Consolidated subsidiaries
in JapanCategory 4
Upstream Transportation andDistribution

tons-CO2

Calculated by dividing the emissions into those from procurement and those from shipment[Procurement] (Transported ton-km (volume of purchased raw material × transported distance) ×
Emissions unit value)[Shipment] (Transported ton-km (volume of shipment by product × transported distance) × Emissions
unit value)
Loading rate and transported distance for both procurement and shipment are based on thetransportation scenario in “broad range PCR (non-energy use products)”
Emissions unit values are adopted from IDEA v3.2 (for the calculation of supply chain greenhouse gas
emissions)

Divisions of Okura
Industrial Co. Ltd.
(Partly include
consolidated subsidiaries
in Japan)Category 5
Waste Generated in
Operations

tons-CO2(Weight by waste type × Emissions unit value by waste type)
Emissions unit values are adopted from IDEA v3.2 (for the calculation of supply chain greenhouse gas
emissions)

Okura Industrial Co., Ltd.
Consolidated subsidiaries
in JapanCategory 6
Business Traveltons-CO2(Number of employees × Emissions unit value)
Emissions unit values are adopted from the Ministry of the Environment’s “Database of Emissions Unit
Values for Accounting of Greenhouse Gas Emissions, etc., by Organizations Throughout the Supply
Chain (Ver. 3.2)”

Okura Industrial Co., Ltd.
Consolidated subsidiaries
in JapanCategory 7
Employee Commuting

tons-CO2{(Number of employees by city class × Number of business days) × Emissions unit value}
Emissions unit values are adopted from the Ministry of the Environment’s “Database of Emissions Unit
Values for Accounting of Greenhouse Gas Emissions, etc., by Organizations Throughout the Supply
Chain (Ver. 3.2)”

Okura Industrial Co., Ltd.
Consolidated subsidiaries
in JapanCategory 8
Upstream Leased Assets

tons-CO2(Not applicable)
While some of our company-owned cars and business locations fall under leased assets, their activities
are included in Scope 1 and 2. This category is therefore not applicable.

ーCategory 9
Downstream Transportation
and Distribution

tons-CO2(Transported ton-km (volume of shipment by product × transported distance) × Emissions unit value)
Loading rate and transported distance are based on the transportation scenario in “broad range PCR(non-energy use products)”
Emissions unit values are adopted from IDEA v3.2 (for the calculation of supply chain greenhouse gas
emissions)

Divisions of Okura
Industrial Co. Ltd.
(Partly include
consolidated subsidiaries
in Japan)Category 10
Processing of Sold Products

tons-CO2(Not applicable)
Our products are intermediate products and used for a variety of purposes as raw materials for end
products. In addition, the amount of our products used for end products is extremely small. This
category is therefore not applicable.

ーCategory 11
Use of Sold Products

tons-CO2(Not applicable)
Our products are intermediate products and used for a variety of purposes as raw materials for end
products. In addition, the amount of our products used for end products is extremely small. This
category is therefore not applicable.

ーCategory 12
End-of-Life Treatment of Sold
Products

tons-CO2(Volume of shipment by product × Emissions unit value)
Calculated based on the assumption that all shipped products will be disposed ofEmissions unit values are adopted from IDEA v3.2 (for the calculation of supply chain greenhouse gas
emissions)

Divisions of Okura
Industrial Co. Ltd.
(Partly include
consolidated subsidiaries
in Japan)Category 13
Downstream Leased Assets

tons-CO2(Not applicable)
We engage in the manufacturing and processing of plastic products, and leasing does not occur or israre, except between the parent company and subsidiaries. This category is therefore not applicable.
(Activities in subsidiaries are included in Scope 1 and 2)ーCategory 14
Franchises

tons-CO2(Not applicable)
We engage in the manufacturing and processing of plastic products, and no part of our businessinvolves franchises. This category is therefore not applicable.

ーCategory 15
Investments

tons-CO2(Not applicable)
We engage in the manufacturing and processing of plastic products, and do not invest in third parties
as a business. This category is therefore not applicable.

ー

SUSTAINABILITY REPORT 2023

Basic Approach to Climate Change

Calculation method and scope covered40

Environment

Environmental Initiatives【 Environmental Policy 】
We will protect our irreplaceable global environment andpromote business activities that contribute to the sustainable,synergetic development of corporations and society.
Considering leading children to the future as our mission, we will strive to
reduce the environmental burden in our business activities. For CO2 emissions(Scope 1 and 2) that contribute to climate change, we will aim at 50% reduction
in FY2030 in comparison with the level in FY2013. Furthermore, we will
promote the provision of products and services to achieve a carbon-freesociety, aiming for sustainable synergetic development with society.

Environmental Conduct Policies of Okura Industrial Group● Environmental management● Eco-culture

Okura Industrial Group aims to establish a corporate
environmental management system and work toprotect the environment with the full participation of
our workers.

Through education and enlightenment, we will create aculture in which each employee recognizes theimportance of the environment and voluntarily
engages in environmental conservation activities.

● Reduction of environmental burden● Safety and health

We will endeavor to achieve resource and energy
conservation, reduce and recycle waste, and prevent
pollution, thereby contributing to achieving carbon
neutrality by promoting climate action measures andprotecting the ecosystem and biological diversity.

We regard safety as the foundation of our management andstrive to create workplaces where each and every employee
can work in good health and comfort, and to establish asecurity and disaster prevention system that minimizes theimpact on the community and society in the event of a disaster.

● Environmental contribution● Environmental communication

We are conscious of the environment in our planningand development and endeavor to provide moreenvironmental contributing products and services.

We will accurately and continuously disclose information
related to the environment, respect the evaluations
and opinions of each stakeholder, and apply them toour environmental conservation activities.

Compliance with Environmental Laws and Regulations
Okura Industrial Group has operated Environmental Management System (EMS) in conformity to ISO14001:2015. The compliance with legal restraints (laws andregulations, and ordinances) is one of various requirements specified by this EMS.
The Group recognizes that the compliance with environmental legal restraints is an especially important point from a perspective of compliance. Accordingly, inorder to achieve it at all business sites in the Group, we have established the following mechanisms.

Preparation of check sheet

Implementation of measures to be checked
mainly by the Corporate Center

As major environmental laws and regulations, we selected

In addition to the periodical confirmation by each business site, we conduct measures,

especially important 31 laws and regulations such as Air Pollution

mainly by the Corporate Center, to confirm the check sheets together with responsible

Control Act and Water Pollution Prevention Act. In order to confirm

personnel of the business site, and educate employees on environmental laws andthe status of compliance with each of them, we prepare a checkregulations. The measures include confirmation of the check sheet including

sheet. Also, in relation to environmental ordinances provided for by

explanation of laws and regulations, thereby confirming compliance with laws andprefectures and municipalities where the Group’s business sites

regulations while endeavoring to improve responsible personnel’s capabilities. At theare located, each of the business sites prepares check sheets forsame time, we also conduct on-site checks at each business site to make sure that therelevant ordinances.

storage of various fuels, waste storage areas, and facilities in the plants are managed

All business sites within the Group are required to semiannuallyin a manner that complies with laws and regulations.

confirm the status of compliance with laws and regulations, andMore than a decade has passed since the operation of EMS started. Aiming at a moreordinances through the check sheets.

sophisticated system for compliance with legal restrains, we will further brush upthese measures.

41

SUSTAINABILITY REPORT 2023

Environmental Education System

We appoint Chief Executive Environment Administrator responsible for

Okura Industrial Group has established Environmental Management Rules

management of EMS of Okura Industrial Group and Chief Environment

to operate EMS, clarified capabilities necessary for EMS operation, andAdministrator for each division to improve environmental performance.

implemented systematic education. Preparing programs which summarized
basic contents related to SDGs and climate changes, “SDGs training” and“Climate changes and measures therefor”, we provide all employees withOperating Officer, President, Representative Director
Sustainability
Committee

Environmental Initiatives

Environmental Management Structure

education using e-learning system, etc. For level-specific training, we have

Chairperson of Sustainability Committee(Director in charge of sustainability promotion)

prepared a program related to SDGs so as to provide opportunities for

Sustainability Committee members(Operating Officer, Director; Operating Officer)

considering pursuit of both economic value and social value.

Environmental
Chairperson of Environmental Protection Promotion Committee
Protection
Promotion
Committee Environmental Protection Promotion Committee members

EMS capability list

Chief Executive Environment Administrator (General Manager of Sustainability Promotion Department)
EMS
Administration
Office for the Sustainability Promotion Department, Environmental Management Department
Entire Company

Division

Item

Required capabilities

Subject person

Okura Industrial Group
Environmental Policy andEnvironmental Conduct Policies

Understand details stated in the Okura Industrial
Group Environmental Policy and Environmental
Conduct Policies

All employees

Okura Industrial Group
Environmental Objectives

Understand medium- and long-term goals statedin the Okura Industrial Group Environmental
Objectives

All employees

Environmental Management
Rules

Understand the Environmental Management
Rules which define EMS in Okura Industrial
Group

EMS-related parties

Each type of EMS procedure
manualUnderstand each type of EMS procedure
manual which is a subordinate document of theEnvironmental Management Rules

EMS-related parties

SDGs

Understand basic contents of SDGs throughe-learning

All employees

Climate changes andcountermeasures therefor

Understand the latest issues related to climatechanges and countermeasures therefor throughe-learning

All employees

Introductory environmental
education

Understand EMS in general through e-learning

All employees

Division Chief
Chief Environment Administrator for Division

Chief Environment Administrator for District

EMS Administration
Office for Division

EMS Administration
Office for District

Business Site

Business Site

RegionHead of Business Site

Head of Business Site

Chief Environment Administrator for Business Site

Chief Environment Administrator for Business Site

EMS Administration
Office for Business Site

EMS Administration
Office for Business Site

Department

Department

Department

Department

Section Manager

Section Manager

Section Manager

Section Manager

Section members

Section members

Section members

Section members

Environmental Action Plan
In order to realize the Environmental Policy, Okura Industrial Group has set
the Group Environmental Objectives every three years in time with a periodof the medium-term management plan. Based on this, each division sets
three-year environmental objectives, and each business site under divisions
sets one-year environmental targets. In addition, action plans are formulated
to achieve them. A progress in the plan is voluntarily managed by each

Acquisition of ISO14001 certification
In 2010, a part of the Corporate Center, Marugame No. 4 Plant, Marugame
No. 5 Plant, and Takuma Plant acquired ISO14001, international standards
related to environment management system.

business site, and its achievement is confirmed through a management
review to be implemented semiannually.
Group Environmental Objectives: for 3 years
Segment Environmental Objectives: for 3 years
Environmental Targets for Business Site: for 1 year

Environmental Targets for Business Site: for 1 year

Environmental Targets for Business Site: for 1 year

Management
reviewSUSTAINABILITY REPORT 2023

42

Environment

Material Flows of Okura Industrial Group (2022)*1
INPUT

EnergyPurchased power
Gasoline
Kerosene oil
Light oil
Bunker A
LPG
City gas
Wood chips *2

205,634 MWh
125 kℓ380 kℓ392 kℓ
1,887 kℓ
415 t
3,637 km3
20 kt

Pellets and other main raw materials *4
96,634 t
Base materials *5 (aggregated in weight)
6,214 tBase materials *5 (aggregated in length)
22,244 km
Printing ink, solvent, etc.
2,797 tAdhesive
17,329 t
3
Raw materials* Wood chips *6
100 ktPlywood
836K sheets
Decorative paper
7,777 kmHeat insulators
6K sheets

Business activities
of Okura
Industrial Group

Design/Development

Procurementof rawmaterials

Manufacturing

Water
Municipal water *7 341,868 m3
Recycled water *8 120,213 m3

Distribution

OUTPUT
CO2

Scope１
16,946 t-CO2
Scope 2 (basic emissions factor)
97,289 t-CO2
Scope 2 (adjusted emissions factor) 104,772 t-CO2
9
CO2 related to logistics *5,590 t-CO2
CFC *1062 t-CO2
Atmospheric emissions PRTR Toluene
672 t*1 The calculation period of data is from January 2022 to December 2022 (April 2022 toMarch 2023 for Waste).
*2 Wood chips to put in biomass boilers as fuel. In the calculation of data, the value rounded
up is indicated.
*3 The purchased amount of raw materials is indicated. However, the amounts put in are
indicated, in terms of part of “pellets and other main raw materials”, as well as “woodchips” and “base materials (aggregated in length)”.
*4 Masterbatch, additives, coating agent, etc.
*5 Films, etc.

Sewage 279,827 m3

Waste *1 6,653 t

Waste

Sewage*6 In the calculation of data, the value rounded up is indicated.
*7 Tap water and other water suitable for drinking. Underground water which can be used for drinking is partly included.
*8 Water which is unsuitable for drinking but used for industrial purposes, such as well water and underground water.
*9 The data calculated based on a periodical report of a specified consignor under Act on Rationalizing Energy Use.
*10 The data calculated based on a calculated amount of leaked fluorocarbons under Act on Rational Use andAppropriate Management of Fluorocarbons.
The data herein was calculated within the scope (Okura Industrial Group) set forth in the Environmental Management
Rules (Environmental Management System of the Company).

Climate Change/Energy Conservation
Okura Industrial Group has worked on thorough energy saving activities, upgrading old facilities to highly efficient ones, introducing renewable energy, andreducing waste plastics to be simply burned, in order to decrease greenhouse gas emissions which have impacts on the global warming. The Group will also
proceed with countermeasures for risks which were clarified in the scenario analysis for information disclosure in accordance with the TCFD recommendations.

Reducing CO2 emissions by changing the refrigeration system
In Building D of the New Materials Division, controlling the temperature and humidity of the clean rooms
are done by using seven refrigeration units. In 2022, we upgraded one of those refrigeration units from anabsorption-type (water-cooled) unit to an air-cooled type unit. GHG emissions from the old facility were
423 t-CO2/year* from electricity and 643 t-CO2/year from steam. With the new facility of air-cooled typeunit, GHG emissions will be only 571 t-CO2/year* from electricity, a reduction of 495 t-CO2/year. It will also
lead to a significant reduction in water usage.
* CO2 emission factor (Shikoku Electric Power Company emission factor (adjusted) for FY2021) is calculated using 0.532(kg-CO2/kWh).

Refrigeration units of Building D of the New Materials Division

Introducing renewable energy
Okura Industrial Group has set environmental objectives as a medium-term target guideline. As part of the“promotion of management for decarbonization (climate action measures)”, we have concluded a contract
on photovoltaic power system (PPA model) for KS Okura’s Head Office plant and Building D of the New
Materials Division in 2022. Power generation began at KS Okura’s Head Office plant in February 2023,
followed by at Building D of the New Materials Division in April. Annual carbon dioxide reductions are
expected to be 150 t-CO2 for KS Okura’s Head Office plant and 600 t-CO2 for Building D of the New
Materials Division.

KS Okura’s Head Office plant

We also plan to sequentially install photovoltaic power systems in other plants, working to achieve ourenvironmental objectives.
* PPA model is an abbreviated name of “Power Purchase Agreement model”. In this business model, an electric power provider(PPA provider) installs a photovoltaic power system on a roof or the premises of an electric power user (consumer) withoutcharge, and the consumer purchases power generated thereby and pays a charge for use of the service to the PPA provider.
* CO2 emission factor (emission factor (adjusted) for FY2021) is calculated using 0.311 (kg-CO2 /kWh) for KS Okura’s Head
Office plant (supplied by The Kansai Electric Power Company), and 0.532 (kg-CO2 /kWh) for Building D of the New Materials
Division (supplied by Shikoku Electric Power Company).

Building D of the New Materials Division

43

SUSTAINABILITY REPORT 2023

Initiatives in logistics Increasing efficiency in logistics (shipment) and reducing CO2 emissions therefrom
While not having a logistics/transportation division, Okura Industrial Group ships over 30 million ton-kilometers per year. Therefore, the Group falls under aspecified consignor set forth in Act on Rationalizing Energy Use. As a medium-term target guideline, we will reduce CO2 emissions generated through logistics

Environmental Initiatives

M ateriality

networks we use by increasing efficiency in logistics related to product shipments and waste transportation. Going forward, we will strive to reduce environmental
burdens, taking measures such as close cooperation with logistics providers, decreasing non-constant shipping with an efficient shipping plan, collectivelytransporting shipments for destinations in the same direction, and decreasing charter services.

M ateriality
Water Risks
In Kagawa that belongs to Seto Inland Sea climate, as there is a small amount of rainfall through a year, drought tends to occur frequently and for a long period.
In addition, it has been required to enhance a crisis-management system in an emergency in preparation for the Nankai Trough Mega Earthquake which is
expected to occur within 30 years with a probability of 70 to 80%. As a medium-term guideline, Okura Industrial Group decided to set a new target of, by FY2024,
reducing the water consumption intensity 3% or more from FY2021, by appropriately managing water resources.

3Rs (reduce, reuse, and recycle)
Okura Industrial has work to, through the supply chain, reduce amounts ofpackaging materials and products which become waste at last. Also, aiming atzero plastic waste, we will promote in-house recycling of waste plastics generated
within the Company.

Issues to address■ Reducing the amount of waste throughout the supply chain
Challenge and achievement in making products thinner
Recycling waste plastics by recovering and cleansing■ Expansion of in-house recycling system
Recycling into secondary materials for internal use and transforming tosolid fuelM ateriality
Reducing waste from plants largely
In order to reduce as many unused (simply burned or buried) plastic waste as possible, we have collected information on business operators engaged inrecycling, and shared the information within the Company.
As a medium-term guideline, we set a target of increasing the recycling rate of plastic waste to 80% or more by 2024. To achieve the target, we use a waste
management system to calculate the recycling rate and manage progress.

M ateriality
Reducing marine plastics
Recovering waste materials after use, and promoting recycling
Okura Industrial Group will put emphasis on development and commercialization of biodegradable films which are degraded in natural environment, in order toreduce plastics which run out into the sea. A degradation rate of the biodegradable film largely depends on an environment. In addition, for some resin to use,
processing may be difficult, including sealing. To solve such issues, we will offer biodegradable films which meet customer’s needs, using knowledge on resin
blending and formulation of additives, etc., as well as manufacturing know-how that we have cultivated as a processor.
We will aim to solve marine plastic issues, using the Group’s technological abilities.

SUSTAINABILITY REPORT 2023

44

Environment

Caerula™ (environmental contributing product)
Name and logos of environmental contributing products
Okura Industrial Group has certified products that are recognizedas making some contribution to the environment such as products

Green represents
natureWhite represents
skythat contribute to reducing greenhouse gas emissions and waste as“environmental contributing products”. We call such environmental
contributing products “Caerula™” and classify them into threeranks to certify.
Aqua represents
sea
Arrow represents circulation
Red and blue are Okura Industrial Group’s
corporate colors

Creation of Environmental
Contributing ProductsTM
Caerula™

・ Caerula™ means “blue” in Latin that makes
people imagine the Earth, and that is one of
Okura Industrial Group’s corporate colors.
・ Caerula™ also carries nuances that suggest
giving back (circulation) to the Earth as anenvironmental contributing product.
・ The number of leaves represents ranks. The
more there are leaves, the higher the rank is(more friendly to the Earth).

ECOWRAP™
ECOWRAP™ is a film for packaging food trays containing meat, fresh fish, processed foods, etc. The film has gas barrier properties, and by replacing the air in
the package with a gas suitable for food protection, it can extend the expiration date of meat consumption from the usual two days to about five days. With theissue of food loss attracting global attention, we have successfully developed this ECOWRAP™ barrier and launched the product in the market.
High-performance barrier shrink film

TM

(Overwrapping、Tray sealing)(Overwrapping)●

Excellent pinhole resistance●Excellent transparency●

Excellent antifogging properties●

Excellent antifogging properties●

Excellent barrier properties●

Excellent barrier properties

ECOWRAP™ film rollEndo barrier™
To protect not only healthcare workers but also the health of patients, we have commercialized Endo barrier™, a virus infection prevention system forendoscopy. The system was developed jointly with National University Corporation Kagawa University, which came up with a method to block the spread ofaerosols emitted from patients.
Endo barrier™ not only prevents direct contact between patients and healthcare workers but also contains the spread of droplets in examination rooms.
Patients can therefore safely undergo the examination. In addition, using Endo barrier™ can help healthcare workers reduce the burden of countermeasuresagainst infection, such as cleaning, sterilizing, and preparing for those measures.
Droplet infection prevention film
Frame

Film:
Purpose-made polyethylene film
(disposable)● Frame:Jig to fixate purpose-made film●

EndoscopeContinuous suction tube

Phlegm suction tube

Oxygen supply tube

* Used as necessary* Used as necessary

Okura Board“Okura Board”, which is made mainly of waste wood such as construction waste, contributes to a recycling-oriented
society by recycling materials to effectively use resources. In comparison with thermal energy recovery in which energy
source is obtained by burning waste wood, “Okura Board” contributes to the prevention of the global warming, by
Okura Board

curbing CO2 emissions through cascade use of wood materials in which waste wood is recycled to a product.

Recycling fixed carbon

Carbon storage in Okura Board production
Production of Okura Board in FY2022 was approx. 130,000 tons, withcarbon storage (CO2 equivalent) of approx. 180,000 tons*1. Even inf ac

M a nuTrees has functions of absorbing
CO 2 in the atmosphere andreleasing oxygen through photonic
synthesis, and storing fixed carbon.

Lumber45

SUSTAINABILITY REPORT 2023

ize

tu

til

re

U

Okura Board

consideration of CO2 emissions generated in production activities at
Takuma Plant, a manufacturing site, approx. 160,000 tons of CO2 per year
is supposed to be stored. It corresponds to an amount of CO2 absorbed
by approx. 21 million 40-year-old cedars per year (approx. 21,000 ha)*2.
*1 Calculated with the calculation method for carbon storage set forth in the
Guideline for the Labelling of Carbon Stored in Wood Used for Buildings
issued by Forestry Agency*2 Calculated in reference to a website of Forestry Agency “How much doforests absorb carbon dioxide?”

D is m a ntle
Construct

Approx.
160,000 tonsof CO2

Amount of CO2
absorbed by acedar per year

× Approx.

21

millioncedarsApprox. 21,000 ha

Environmental Initiatives

Ecocalmulch
Our Ecocalmulch is made from used agricultural film, which is
Separate
agricultural andhorticultural
plastic waste

collected from farmers, cleaned to the level fit for mechanicalrecycling, and turned into recycled raw materials. Recycled

Recycleplastics account for 25% or more of all plastics contained in the
Making plastic resource
recycling a reality

product. While mechanical recycling generally degrades
physical properties of and have other negative impacts on

Used on farmland for sweet potatoes

products, Ecocalmulch shows performance equivalent to that

Turn into multifilm productsof our conventional products. We have received positive
feedback from users.
By turning farming waste into recycled raw materials andmaking it possible to use them as agricultural materials, we took
the first step toward a circular economy.

Topics

M ateriality

Products certified as Caerula™
Okura Industrial Group established a Caerula™ certification system in 2019, and has certified a variety of products based on our own
certification criteria. The certification criteria include contribution to the SDGs, resource conservation and recycling, prevention ofenvironmental pollution, proper waste disposal, and products designed to be easily recyclable from perspectives of life cycle thinking, as wellas products with minimal use of substances with environmental burden that are essential for manufacturing.
Product name●

Details of certification

Endo barrier™

OK bag ● Micron pack ● Micron pack lite
● PBT (polybutylene terephthalate) film
● Dicing film●

ECOWRAP™G/BSS-V2 ● Antimicrobial mulch ● MULTI-EXCEED™
OK spout standard bag ● OK inner ● Yusaku● Bags and packaging materials containing biomass raw materials●●

Ensuring a safe and secure examination environment●

Restrictions on the use of chemical substances●

Reduction of environmental burden●

Reduction of emissions of substances with environmental burden●

Reduction of product resources●

Sunblock Eco●

Shounosuke●

Easy-to-install panels●

Improved work efficiency●

comori™

●

Reduction of solid waste●

Okura Board●

Recyclable●

Contained recycled materials●

Contained recycled materials●

Eco Mark●

Biomass Mark●

Biodegradable Plastic Mark●●

Kankyou-kun●

Film for food containers

●

●

●

Solventless acrylic adhesive YUMEN Series

ECOWRAP™ SSOKUWRAP™
●

Wood processed product (precut)

OKURA hose (film for duct hose) ● PP decorative film ● Smile pack deodorant bag● RANDYFIVE HS type● Bags containing recycled raw materials●●

Ecocalmulch●

Bionature●

LAPLOR™ BIO●

Ecoloam KOKAGE●●

Garbage bags designated by municipalities●

Eco smile waste bag

OKBIO™
●

Power fit●

(as of January 1, 2023)

Ecoloam FC●●

Eco Mark

Biomass Mark

Certification of Caerula™ in the living support category products
Percentage of sales of products
certified as Caerula™ in 2022
Products certified as Caerula™
36.04％
21,932 million yen

Percentage of products certified as Caerula™ in
the living support category products2022 (actual)2024 (target)

2030 (target)

36.04％

50％

100％

Non-certified
products
63.96％
38,929 million yen* The living support category products are products that are closely related to housing and food, and support people’s safe and comfortable lives.

SUSTAINABILITY REPORT 2023

46

SocialPromise to Customers
Setting “Customers First” as one of the management
philosophies, we will help customers solve issues throughbusiness activities in accordance with Okura Industrial Group
Quality Policy.
Aiming to be “a solution partner that creates new value through underlying
technology and is selected by customers” in the management vision“Next10(2030)” outlining where we want to be, Okura Industrial Group willcontribute to the enhancement of value for customers and to solutions tosocial issues. We will also contribute to realization of a sustainable society bycreating social and environmental value through business.

Quality
PolicyOkura Industrial Group has pushed ahead with a continuous improvement
To provide customers with safe and secure
products, we approach manufacturing from theviewpoint of 5M1E.

of quality assurance and quality control systems so as to keep providing
products and services with quality which we promised customers.
We are striving to further reduce the number of quality-related complaints
with the following activities for the purpose of preventing the complaints

While complying with relevant laws and regulations,
we faithfully keep promises to customers andprovide safe products that benefit society.

and recurrence of them: horizontal development of improvement inproduction facilities; clarifying causes of occurrence and leakage using
the system to respond to complaints and reviewing measures;
implementation of the Company-wide quality patrol during a month for

Each of our employees listens to customer’s voices
and continues to pursue customer’s satisfaction
with creativity and ingenuity.

strengthening quality; and examination of design/development projects
through design reviews.

Occurrence rate of complaints for three divisions compared to 2018(2018–2022)（％）

We aim to grow together with customers andbecome their trusted partner.

100

100
87

80

74
60

60

Each of us continues to grow as individuals andovercomes new challenges to exceed ourcustomers’ expectations.

20
0Acquisition of ISO9001 certification
In Okura Industrial
Group, each division has
obtained ISO9001:2015
certification, and been
conducting continuous
improvements to provide
products and services
with quality that we havepromised customers.
* For more details, please see
Okura Industrial’s website

47

SUSTAINABILITY REPORT 2023

50

40

2018

2019

2020

2021

2022

(year)

M e s s a g e −Voice of employees ­−Yukio Dozen
Quality Assurance
Department,
Sustainability Promotion
Department,
Corporate Center

The Measurement and Analysis Section to which I belong
receives requests for foreign substance analysis and basematerial analysis from business sites of Okura Industrial
Group. Among them, since customer complaints and inprocess abnormalities require early investigation of thecause and prevention of recurrence, it is very importantfor us to not only just report the results obtained from theanalyzers, but also even make thorough investigation byasking “Is there any information that leads to an investigationof the cause of the problem?” “Have there been similarcases at other business sites in the past?” I will continue towork to resolve problems early, always keeping in mind topromptly report more detailed analysis results.

Okura Industrial Group has systematically worked to reduce human errors in various operations of production activities and work in the production process, inorder to reduce and prevent complaints from customers and quality-related troubles in the Company.
Since May 2022, using one plant as a model, we have conducted improvement activities to work on system modifications, maintenance of various business

Promise to Customers

Initiatives for Strengthening the Quality Control Systemforms, and preparation of educational materials, and committed to nipping “risk in the bud” that triggers errors. Going forward, we will shift our activities fromthe “follow-up” phase to the “self-improvement at plant” phase. We will conduct our activities focusing our attention on whether ongoing measures are being
implemented and whether ongoing improvement activities are being tested, and also confirm the effects of our improvement activities.

01

02

03

04

Analyze past complaints
from customers causedby human errors at theplantAnalyze past qualityrelated troubles in theprocess caused byhuman errors at the plant

Prepare questions for aquestionnaire based on
1 and 2, and implement
a questionnaire survey
for members of the plant05

Analyze contents ofanswers of thequestionnaire, andconduct a hearing formembers of the plant toconfirm details

Prepare a list of issues
based on answers to thequestionnaire andresults of the hearing

06

07

08

09

Develop and implement
improvement measuresfor each issue

Verify effects of each of
the improvement
measuresPrepare educational
materials for reducing
human errors through aseries of the activities,
and provide education
for members of the plant

Summarize remaining
issues, and incorporate
them in continuous
activities

We will expand these activities in other plants. Currently, based on the results of our analysis of complaints that occurred in the past, we have selected a plant tobe the target of the second part of our activities and begun similar activities. By making these activities more effective based on the knowledge and reflections
gained from the activities in 2022, we will reduce complaints from customers and quality-related troubles in the process, which could occur in the Group.

M ateriality
Pursuing Higher Quality and Safer Products

Design Review Knowledge Management System (DR-KMS)
Okura Industrial Group developed DR-KMS to surely and smoothly conduct development of new
products. All divisions including the Research & Development Center have started to operate it since
the beginning of 2023. This system has enabled us to readily refer to “knowledge”, in other words,
past technological opinions and knowledge of laws and regulations, in the design review which is
implemented at each stage of product development. In particular, in the Research & Development
Center, knowledge of all divisions is available for viewing. It is expected to be utilized as important
knowledge during the development of new products. At present, we are trying to incorporate
knowledge of laws and regulations related to the environment into our system for the purpose ofcomplying with them in our business activities. The Group will continue to effectively use the DR-KMS
toward realization of a sustainable society, and provide customers with secure and safe products.

Merits of the use① Able to readily refer to knowledge on technology and legal
restrains, etc. at time of drafting and examining proposals
at the design review. Also, expected to curb regression indesign development by using its contents, make thedevelopment speedier and more efficient, and lead to fewer
complaints caused by design.
② Expected to facilitate progress management bysystematizing and visualizing the progress in design review,and to prevent a delay in development of new products.
③ Able to provide customers new products without missing abusiness opportunity, by shortening a development period.

Proceeding of design review and use of knowledge
Request development
Examine whether to start development

DR0

Examine trial plan with test model

DR1

Examine whether to shift to test production of actual model

DR2

Examine plan for test production of actual model

DR3

Examine permission for release of actual model produced as a trial DR3.5
Examine whether to shift to mass production

DR4

Knowledge

Past troubles

Laws andregulations
Must-be quality

SSM*(Stress Strength Model)* Structurally expressed in order to use knowledge on a generating mechanism of failures,
defects, and danger which may occur in products and processes for predicting andpreventing troubles at time of design and planning

In all stages of design review, those who draft, examine, or approve
proposals shall refer to knowledge on past troubles, and laws andInitial production control

regulations, etc. on the system.

SUSTAINABILITY REPORT 2023

48

SocialPromise to Employees

Human Resources System
Okura Industrial Group has formulated our management vision “Next10(2030)”
outlining where we want to be in 10 years. To realize the vision, we foster a spirit

Images to be aimedby the Company

Achieve “Next10(2030)” (further business growth)(management vision)of challenge and voluntary willingness to grow in employees’ various careerdevelopment.
In the evaluation system, images to be aimed in the field of human resources
are defined as “increasing innovation human resources”, “developing nextgeneration leaders responsible for promoting business management”, andAn environment in which each and every employee canperceive “change” and “growth” positively, work on their own,
and grow together with the Company

Images to be
aimed in the field of
human resources“improving operational capabilities to increase efficiency and sophistication ofexisting operations”. Then, we classify necessary human resources into typesof human resources for job, leaders, and highly efficient operations to design
the system.

Types of humanresources needed

Innovation

Next generation development

Improvement of productivity

Refine superior
technological abilities, andsecure human resources
capable of promoting
overseas/new business

Develop leaders whowill be responsible forpromoting business
management

Flexible (positive) to changes.
Create organizational culturethat encourages growth
realization and job
satisfaction②Leader③Highly efficient operation①New value creation< job-based personnel >< leader personnel >< operation personnel >As for human resources development, human resources required for each levelare defined, and education and training systems are established and programs
are provided in light of the definitions, leading to the improvement of employees
engagement.

Training and education

Training for developing
next-generation leaders

Related image of each training
Training for new managers

Skills application education

Management strategy, Financial strategy,
Marketing, Organizational reform

Organizational target setting,Problem solving, Leadership,
Workplace reform, Mental health, Harassment
Organizational behavior,
Accounting, Management, Marketing

Business strategy,
Financial fundamentals,
Innovation

Sp

ve

Le

Development of creative leaders

Training for developing
management

l-s

i

ing
ral

pe

ci fi

c tr a①Labor management training,
Evaluator training②ESG and SDGs training (advanced)③Compliance training (advanced)④Education on intellectual property (advanced)⑤Education on SDGs and TCFD

up!

inin g

P ur p o se - s

cpecifitr a inin

gTraining for female supervisors, Training
for newly appointed supervisors

Education on basic knowledge for engineers
Education on invention
Skills intermediate-level education
proposal preparation①ESG and SDGs training (intermediate)
Education on basics②Compliance training (intermediate)
for engineers③Education on intellectual property(intermediate)④Accounting training(advanced and intermediate)⑤Education on information security

Workplace improvement, Coaching, Logical thinking

Searchers education
Skills basic education

Training for mid-career employees
Presentation, Assignment setting, Coaching

Training for promoting
women’ s advancement
Follow-up training
Training for new employees

Blue letters: level-specific training
Orange letters: technical skills by job category
Green letters: company-wide common
practical knowledge①Education on information security (beginner) ⑤ESG and SDGs training (beginner)②Education on Excel, Word, and PPT basics ⑥Finance and accounting
system training (SAP)③Education on introduction of ISO9001⑦Accounting training (bookkeeping)④Education on design review
implementation procedures

Manner, Compliance

Ensuring of Human Resources
Okura Industrial Group has been making various efforts for ensuring and fostering human resources, aiming to improve the Group’s personnel ability for its
sustained growth. To be more specific, we put emphasis on ensuring of excellent human resources of new graduates by enhancing internship activities andstrengthening relationships with local schools and ones in neighboring prefectures. We also renew our website for recruitment and use staff agencies to workon recruitment through a year and ensuring of industry-ready core human resources. Furthermore, we support formation of a career plan, implementing followup interviews after joining the Company and follow-up training three years after joining it.

Number of internship participants*

No. of times conducted (per year)

No. of participants

2020

2021

2022

2 times

2 times

2 times

Technical job seekers

34

27

40

Sales job seekers

28

31

22

Staff job seekers

24

32

30

* On a non-consolidated basis

49

Number of persons employed*

SUSTAINABILITY REPORT 2023

2020

2021

2022

New graduates

32

31

27

Mid-career employment

8

16

23

Okura Industrial Group has been promoting creation of a comfortable working environment where all employees can make the best use of their abilities at eachof their workplaces. Especially in relation to women’s participation, we will increase the composition ratio of female employees and the ratio of female managers,
expanding their hiring and developing an educational system. In addition, in the employment of people with disabilities, we will improve the working environment

Promise to Employees

Initiatives for Diversity

to allow them to be active with peace in mind.

Composition ratio of employees (As of April 1, 2023)*
No. of male No. of female

Total

Ratio of female

Ratio of new female graduates (As of April 1 of each year)*
2021

2022

2023

Employees

973

200

1,173

17.1%

Total of new employees

33

27

39

Managers

423

53

476

11.1%

Include female

7

7

15

Ratio of female

21.2%

25.9%

38.4%

* On a non-consolidated basis

Employment rate of people with disabilities(As of April 1 of each year)*
2021

2022

2023

No. of people
with disabilities

30

30

33

Employment rate

2.4%

2.4%

2.6%

Health and Productivity Management
Okura Industrial Group has been working to promote employees’ mental and physical health. To be more specific, we have conducted employees’ health survey
since 1996. In 2016 when the stress check system was legislated, survey items were renewed. Based on results of the survey, we have been working on the
promotion of mental and physical health.

Declaration of health and productivity management

Major priority measures

In accordance with the management philosophy “Respect the Individual”, Okura
Industrial Group believes health of each employee is important. The Groupdeclares that it will strive to create a working environment where employees canwork with mental and physical health, as well as motivation.
Okura Industrial Group will push ahead with the development of a working
environment where flexible ways of working can be selected, which is suitable

Aiming at a workplace where employees can actively work with mental and physicalhealth, Okura Industrial Group will address the following initiatives for promoting health.

for employee’s life plan and life stages.

Health and productivity management promotion system

Certification of the 2023 Health & Productivity
Management Outstanding Organization

Chief health and productivity management administrator(Operating Officer, President, Representative Director)

On March 8, 2023, Okura Industrial was certified as the 2023 Health & Productivity
Management Outstanding Organization (the large enterprise category) which is promoted
jointly by Ministry of Economy, Trade and Industry and the Nippon Kenko Kaigi. The
Certified Health & Productivity Management Outstanding Organizations Recognition
Program is a program to recognize outstanding large enterprises and SMEs implementing
health and productivity management, based on initiatives responding to regional healthissues, as well as health promotion measures promoted by the Nippon Kenko Kaigi.

Chief health and productivity management promotion administrator(Director in charge of Corporate Center)

External organization
Industrial doctors

Cooperate

Corporate Center
Human Resources Department

Working Environment
Improvement Committee

Cooperate① Promote the health management, including physical health and mental health, toallow employees to work without anxieties.
② Work to promote mental and physical health of employees in cooperation with thehealth insurance association.
③ Implement periodical health checkups, and keep the ratio of persons who took thecheckup at 100%.
④ Make efforts for increasing the percentage of annual paid leave days taken.

Okura Industrial healthinsurance association

Personnel in charge of safety
and health for each business site

Reform of Working Practices
Okura Industrial Group will push ahead with the development of a working environment where flexible ways of working can be selected, which is suitable for
employee’s life plan and life stages.
We will decrease workloads at sites with the promotion of DX and automation of plant equipment, promote a reduction in overtime work, and encourage
employees to take annual paid leaves. We will also consider the introduction of various systems such as telecommuting and a flextime system which would leadto the reform of working practices.

Acquisition rate of annual paid leave*

Average days acquired
Acquisition rate

Usage of childcare/nursing care leave systems and other systems (2022)*

2020

2021

2022

10.3 days

9.8 days11.1 days

56.2%

53.6%

60.9%

* On a non-consolidated basis

No. of male

No. of female

Total

Childcare leave system

6

5

11

Nursing care leave system

0

0

0

Short working hours system

1

6

7

Topics on “Promise to Employees” are on page 57.
SUSTAINABILITY REPORT 2023

50

SocialSafety and Health
In Okura Industrial Group, managers take leadership to workon creation of the safe, health, and comfortable workplacewith all employees participating and actively communicating,under the basic philosophy of “Make the safety a primaryconcern” and “Make the safety the core of management”.

Safety and Health Initiatives
We formulate and share an annual safety and health target for the entire Okura Industrial Group based on a policy of management executives. The target isincorporated in safety and health activities and their plans of each manufacturing sites.
Central Safety and Health Meetings are held every year in June and September, for the purpose of maintaining and the increasing safety and health level. Officers
of management executives, head of manufacturing sites, and safety and health administrators attend the Meeting, in which initiatives related to safety and healthand progress in relevant activities at each sites are reported, in order to widely spread the initiatives. During the period of the National Occupational Safety Week
(July 1 to 7), management executive themselves patrol premises of manufacturing sites, and confirm and share issues, points to improve, and targets of eachmanufacturing site, for the purpose of confirming safety of workplaces and increasing employee’s awareness of safety. In addition, industrial doctors inspect
workplaces on a regular basis to check the status of safety and health management at the workplaces and give instructions. Thus we are striving to improve thesafety and health level.
With safety administrators and health administrators respectively deployed, each manufacturing site is working on safety and health activities. Based on the risk
prediction training (KYT), risk assessment, implementation of tool box meeting, and issues of safety and health initiatives, the annual safety and health policy
and target are determined. Then, we conduct activities to achieve the target. Furthermore, we will push ahead with activities that enable managers of staff
engaged in manufacturing in manufacturing sites and divisions to learn knowledge necessary to instruct and educate foremen and employees, and to have highlevel of awareness of safety and a sense of responsibility as personnel in charge of safety and health management to work on safety and health activities.

2023 Safety and Health Target
Thorough safety and health management focusing on 5M1E

Eliminate troubles through awareness,and eliminate accidents of getting caught by machine
Safety and Health Action Guideline① Deepen communication and identify potentially dangerous action② Strive to increase awareness of participation (engagement) and work to improve the working environment

Targets of Individual Efforts① In the event of a trouble, thoroughly follow procedures of “stop, call, wait”② Increase awareness of danger to avoid any traffic accidents, keeping in mind to drive as predicting dangers③ Act responsibly and make efforts for preventing infection and spreading virus

51

SUSTAINABILITY REPORT 2023

Safety and Health

Okura Safety Day
Okura Industrial Group has designated November 28 when the fire broke out
at Takuma Plant as the “Okura Safety Day”, and a period from November 28
through December 4 as the “Safety Awareness Week”. On Okura Safety Day,in strong determination never to forget tragic experience we had in the pastand lessons therefrom, and repeat the same mistakes, the safety convention
is held at the Takuma Plant. Officers, head of manufacturing sites, and safety
and health administrators attend the convention, and recognize once againthat our basic philosophies, “Make the safety a primary concern” and “Makethe safety the core of management” were established in the wake of the firedisaster. In addition, all attendants implement the safety patrol in the Takuma
Plant. Also, during the “Safety Awareness Week”, at each manufacturing site,
the safety patrol is conducted and morning assembly is held.

Occupational Safety and Health Activities
In Okura Industrial Group, the number of conventional accidents of “getting

Safety and health management systemcaught by machine” and “cutting and rubbing” accounted for the majority of

President

accidents which happened in the Group in 2022. In addition, one lost time
accident took place. In order to prevent such accidents from occurring, we

Safety and health general administrator

will take recurrence prevention measures and develop them horizontally, andSafety and health administration office

widely conduct activities in the Group for creating safe and healthy
workplaces, also by putting emphasis on risk assessment and KYT.

Safety and health division administrator

Furthermore, employees extract and identify risk factors of each workplace
regarding potential dangers, unsafe conditions and behavior at a workplace,

Safety and health site administrator(head of site)

and take countermeasures for risks according to a degree of danger. Bytaking such actions to reduce risks, we endeavor to prevent disasters. Since
the risk of occupational accidents increases when troubles of manufacturing

Safety administrator

Health administrator

facilities occur, we also put emphasis on preventive maintenance activities
not to cause troubles of manufacturing facilities.

Traffic Safety Activities
Okura Industrial Group endeavors to increase the awareness of safe drivingby requiring all commuters to surely place a safe driving sticker on vehicles forcommuting. We report the number of traffic accidents and raise awareness at
the general morning assembly and the Central Safety and Health Meeting.
Also, at the Safety and Health Committee held periodically at each workplace,
information on dangers is shared through reports about traffic accidents.
With these efforts, we strive to increase sensitivity for risk prediction andmake sure to drive as predicting dangers. Furthermore, wearing a helmet
when riding a bicycle became an obligation to make the best efforts on April
1, 2023. The Group requires employees to wear helmets when commuting towork on bicycles as part of our commitment to employee safety.

SUSTAINABILITY REPORT 2023

52

SocialContribution to Society
Setting the management philosophy focusing on engagementwith various social aspects, Okura Industrial Group is aiming
at contribution to resolution of social issues through businessactivities and realization of the Group’s vision.
Okura Industrial Group, which has included “contributing to the society” in its
management philosophy, proactively participates in local cultural programsand various events, and strives to contribute to local communities. As acompany harmonizing with a local community, we will proactively conductlocal contribution activities and regional environment conservation activities,
deepen understanding about issues a local community face, and actively
participate in activities which would lead to resolution of the issues, as well as
local revitalization business.
We will build workplace culture where all employees make efforts to contributeto local communities, and aim to be a company, existence value of which in theregion can be recognized by local residents.

Local Contribution Activities
Okura Industrial Group has been working on local contribution activities in various forms, while aiming at social contribution through business.

● Artistic and cultural activities

We contribute to various artistic and cultural activities held in
Kagawa such as Setouchi Triennale, Takamatsu International
Piano Competition, and Seto Philharmonic Orchestra.

Opening ceremony of Setouchi Triennale 2022

Takamatsu International Piano CompetitionⒸBANAZO● Sports promotion

In order to contribute to promotion of rich sports culture, we
support various sports teams in Kagawa every year. We help
produce next-generation human resources in Kagawa.

ⒸKAMATAMARE SANUKIⒸKAGAWA OLIVE GUYNERSⒸKAGAWA FIVE ARROWS● Volunteer activities

A lot of our employees proactively participate as volunteersin Marugame Castle Festival (every May) and other local festivals,
as well as tree planting activities. Also, as a part of local
contribution activities, we participate in the “Pick Up Trash
and You'll Love the City” campaign in Marugame and conducts
cleanup activities in neighboring areas of business sites.
Volunteers for Marugame Castle Festival

53

SUSTAINABILITY REPORT 2023

Cleanup activities in the neighboring area of
Takuma Plant

● Workplace experience

We accept internship students in Japan, as well as from overseas in

We accept students from neighboring schools for the workplace experience

cooperation with Marugame City and the Marugame International Exchange

learning. We provide experience learning to make the students interested in

Association. Our internship program incorporates not only practical training,

manufacturing, by, for example, explaining the overview of the Company

but also experiences to enjoy Japanese culture such as experiencing

and process until a product is finished, and offering experience of forming

Japanese culture and eating something unique to Japan.

plastic films.

Contribution to Societ y● Acceptance of overseas internship students

Various Supports and Volunteer Activities● Setouchi Triennale 2022

Setouchi Triennale 2022 was held for 105 days over three sessions, beginning in April 2022.
As a company headquartered in Kagawa, Okura Industrial supports the Triennale. We contribute to various
artistic and cultural activities and the revitalization of a local community. During the Triennale, we presented
our sustainability initiatives and products at a “CSR and SDGs Initiatives PR Booth” set up to introduce its
sponsors on a special site and next to the general information desk on the 1st floor of the Takamatsu Port
Passenger Terminal Building.
Setouchi Triennale has a volunteer supporter system called “Koebi-tai”. Our employees joined in thesystem and volunteered as “corporation/organization volunteer supporters” to serve as receptionists forthe exhibition of artworks. Although they were all first-time volunteers, they enjoyed volunteering itself withthe help of an easy-to-understand manual and the support of the committee staff.
As the Triennale is held every three years, we are looking forward to the next one. When it is held next time,
it is expected to attract many visitors not only from Japan but also from overseas. We will contribute further
to the revitalization of the local community, as well as work harder to introduce our business from
Kagawa to the world.
● The 75th Kagawa Marugame International Half Marathon

The Kagawa Marugame International Half Marathon washeld on February 4 and 5, 2023 for the first time in three
years, and the Company contributed to it as a sponsor andvolunteer. Our logo and company name logo appeared on
the bibs used for the elementary school students relay
race and the 3km course held on the first day of the event(February 4). Our employees participated as receptionists
for distributing participation prizes on February 4, and as
staff at the water station on February 5.

Message−Voice of participants in events−

Volunteer of the 75th Kagawa Marugame International Half Marathon

Volunteer of the 74th Marugame Castle Festival

This was my first time participating in

I volunteered for the Marugame Houzinkai tax quiz on May 4.

the event as a water supply volunteer. I

As soon as I arrived at Marugame Castle, I was overwhelmed

realized how hard it is to prepare waterby the number of visitors and their enthusiasm, and I myself

supply for a large number of runners.
イベント参加者コメント

was excited to be in the Castle Festival for the first time in

Volunteers cheer on the runners andmany years. Many people from in and out of the prefecture

runners appreciate it by saying “Thankparticipated in the tax quiz. It was a great experience for meyou!” I also realized that both of us have

Koji Kawada
Senior Staff, Process
Development
Department, Research &Development Centera good relationship with each other. I
would like to participate in the event
again if there are opportunities in the
future.

to talk with people in a wide range of ages by thinking about
the answers with them. In addition, many people were

Yoko Miyauchi
Planning Management
Department,
Plastic Film Division

working with the same passion to make the Castle Festival a
great success, and I was glad to be able to participate in theevent. I will continue to try to contribute to the local
community through volunteer activities.

Topics on “Contribution to Society” are on

page 58.

SUSTAINABILITY REPORT 2023

54

SocialPromise to Shareholders and Investors

Ensuring of Shareholder’s Rights
Okura Industrial recognizes that all shareholders are equal according to the number of shares held. Accordingly, the Company takes appropriate measures tovirtually ensure shareholder’s rights, and provides the environment required to exercise such rights. To be more specific, procedures related to exercise of theshareholder’s rights and responsible departments are specified in the internal rules. In addition, we have prepared the corporate website in English. In relation to
information demanded by overseas investors, summary of financial results, sustainability reports, a notice of convocation and other materials are translated anddisclosed in English.

Policy Concerning Constructive Dialogue with Shareholders
Our basic policy is to promote constructive dialogues with shareholders andinvestors that would contribute to a sustained growth and an improvement inmedium- and long-term corporate values.
The Director in charge of the Corporate Center generally manages andcoordinates the constructive dialogue with shareholders. We have designatedGeneral Affairs Department as a contact for individual shareholders, andFinance and Business Administration Department as a contact for institutional
investors and other bodies. We strive to promote smooth and effective
dialogues, for example, having Representative Director or Director in charge
respond to interviews, according to a purpose of a dialogue.
The Company has dialogues in various manners, such as semiannually
holding financial results briefing sessions for institutional investors, personal
interviews, plant tours, and TV meetings.

Financial results briefing session in February 2023 (delivered online)

A Director who responded to the dialogue reports shareholder’s interests,
opinions, and concerns which were obtained through the dialogue to the

Dialogues with investors

Board of Directors to share their details.

Activities

2022

Financial results briefing session

81 persons

Personal interview

10 persons

3rd quarter

4th quarter

IR Calendar
1st quarter
Jan.

Feb.

2nd quarter
Mar.

Apr.

May

Jun.

Announcement of year-end
Announcement of 1st quarter
financial results
financial results
Financial results briefing Annual General Meeting
sessionof Shareholders
Issuance of Shareholder
Newsletters

55

SUSTAINABILITY REPORT 2023

Jul.

Aug.

Sep.

Oct.

Issuance of Shareholder
Newsletters
Announcement of 2nd quarter
financial results
2nd quarter financial results
briefing session

Nov.
Announcement of
3rd quarter financial
results

Dec.

Promise to Shareholder s and Investor sInitiatives to Make General Meetings of Shareholders More Effective
Emphasizing a general meeting of shareholders as a place for constructive
dialogue with shareholders, Okura Industrial takes the following necessary
measures to have in place an environment where shareholders canadequately exercise their rights.
1. We hold the meeting, avoiding the date on which meetings of other companies
concentrate.
2. In order to ensure enough time to consider proposals, we dispatch the noticeof convocation before the statutory date to do so, and promptly disclose
information included in the notice of convocation on TDnet and our website prior
to the dispatch.
3. Apart from information required by laws and regulations, we disclose information
deemed necessary for shareholders to exercise their rights at the general
meeting of shareholders.
4. We endeavor to enhance matters contained in the notice of convocation

The 103rd Annual General Meeting of Shareholders(including business report and reference documents), and provide the noticeof convocation, summary of financial results, timely disclosed information,
shareholder newsletters, and other information by placing them on TDnet andour website.
5. We analyze trends in and results of exercise of voting rights for proposals
made by the Company, and share them in the Board of Directors. In relation
to a proposal against which a considerable number of shareholders voted at a
general meeting of shareholders, the Board of Directors analyzes its cause, anddirectly or indirectly talk with shareholders in an appropriate way.
6. When institutional investors and others who hold shares in the name of a trustbank, etc. want to personally exercise voting rights, we will respond to such caseupon consultation.
7. We strive to improve the environment by, for example, introducing a platform forexercising voting rights through electronic means to enable institutional investors
and others to efficiently exercise voting rights.

Capital Management Policy
Okura Industrial manages business, setting the medium- and long-term target of return on equity (ROE) at 8% or over to maintain and improve shareholder’svalue. When allocating management resources and developing business strategies, we make decisions in consideration of consistency with our capital cost.
Regarding returning profits to shareholders as one of our top priority management issues, we have a basic policy of making efforts for increasing the level ofdividends, comprehensively taking into account business performance and a balance of financial soundness, on the basis of continuous stable dividends.

Shareholder Benefit Programs
Okura Industrial appreciates shareholders’ support, and thus, implements the shareholder benefit
programs.
Based on the following criteria, the shareholder benefits are presented according to the number ofshares held as of December 31 every year.

Share unit

100 shares

100 shares or over, lessQUO Card

1,000 yen × 1

Meal tickets for Okura Hotel Marugame

1,000 yen × 2

QUO Card

2,000 yen × 1

Meal tickets for Okura Hotel Marugame

1,000 yen × 4

QUO Card

3,000 yen × 1

Meal tickets for Okura Hotel Marugame

1,000 yen × 6

than 1,000 shares
1,000 shares or over, lessthan 2,000 shares

2,000 shares or over

Topics on “Promise to Shareholders and Investors” are on

page 57.

SUSTAINABILITY REPORT 2023

56

Social

Initiatives for Stakeholders
Promise to Employees ー T o p i c s

Initiatives to Commemorate the 75th Anniversary of the Company’s Founding
The Company, which marked the 75th anniversary of its founding in 2022, undertook various initiatives to commemorate our 75th anniversary.
Among them were initiatives that were implemented as a benefit to employees.

● Creation of employee ID cards● Renewal of uniforms

Employee ID cards were distributed to encourage a sense of

We renewed our uniforms tounity among employees. An employee ID card is an important

improve functionality andtool to prove that the employee shown on the ID cardenhance our corporate image.

belongs to the company. Carrying an employee ID card

Traditionally, the design of ourserves as proof of the employee’s identity, as well as makeuniforms was the same forthe employee feel proud to work for the Company.

summer and winter clothing.

The design of the employee ID card is common to the Okura

After the renewal, uniforms for

Industrial Group. It represents “history passed down fromsummer (right) and winter (left)

generation to generation” and “aim of future-oriented further

have different designs. With adevelopment”, with the image

genderless design in mind,of the waves of the scenic

we have adopted designs that

Seto Inland Sea, based on our

fit with the Group’s symbolic

corporate colors.

colors.

● Renewal of showroom

The showroom on the first floor of the 1st Office in the Head Office has been renewed. The old showroom only exhibited products
and introduced the history of each business and our representative products on panels. The new showroom is equipped with digital
signage showing our PR videos and videos of our sustainability initiatives, in addition to new shelves and exhibition panels for products.
The old product exhibition area was located in an area with less light; however, the new product exhibition area has been placed on
the south side of the building, which is now a bright space illuminated by natural light. The exhibits are designed to showcase theunique characteristics of each division so that visitors can see at a glance what field of products each division handles.

Promise to Shareholders and Investors ー T o p i c s

Introduction of Special Incentive Scheme (Disposal of Shares of Treasury Stock Type)On March 23, 2023, we introduced an incentive plan to increase the motivation of employees of the Group for the Company’s medium- andlong-term shareholder value. This is a scheme to grant shares of the Company’s common stock issued by the Company through “Okura
Industrial Employee Stock Ownership Association” as a special incentive to the members of the Association who are eligible for the grant, by
way of a third-party allotment to the Association.
As we set up a sufficient membership promotion period for employees to join the Employee Stock Ownership Association, the percentage of
employees in the entire Group who are members of the Association was approximately 91%, and the total amount of shares of treasury stock
disposed through this scheme was 293,354,625 yen.

57

SUSTAINABILITY REPORT 2023

I n i t i a t i v e s f o r S t a ke h o l d e r s

Contribution to Society ー T o p i c s

Marugame Nigiwai Project
Shikoku, with declining population, falling birthrates, and aging populations,faces the challenges of shrinking and declining local economies. In order to work
more effectively toward the revitalization of Shikoku, “SHIKOKU-KE SUPPORTERS
CLUB” was established as a voluntary group, co-chaired by Shikoku Railway
Company, Shikoku Branch of JAPAN POST Co., Ltd., and Shikoku Electric Power
Company, Incorporated. The Company has supported the Club since 2022, andis working on the initiatives to revitalize the local community.
In addition, partly due to a number of Marugame-based companies being
members of the Club, the “Marugame Nigiwai Project” was launched as a cityapproved project, in which companies aim to revitalize the Marugame city centerin cooperation with the city and universities. This project is scheduled to continue
for three years, starting in 2022, and the Company has participated in the project
as the managing company. Initiatives undertaken in FY2022 include the following.
● Unveiling ceremony of Marugame Castle Post

On September 23, as initiative part 1 of our FY2022 plan, a ceremony was held tounveil the Marugame Castle Post, an original post box installed in front of the JR
Marugame Station, with the image of a castle. This post represents the whitewalls and stone walls of the castle, using technologies such as painted walls of
SHIKOKU CHEMICALS CORPORATION, a member of the project.
Kitchen car events and stage presentations by junior and senior high school
students were also held, and the ceremony became an event to revitalize the
Marugame Station area.
● Waku-waku Experience-Kids Kingdom in Marugame“Waku-waku Experience Kids’ Kingdom in Marugame” was held at Marugame
Public Square on October 15. In this event, children visit a company booth and do
work related to the company to receive special currency called “Maru” as areward, or pay Maru to experience crafts and other activities. 18 organizations,mostly members of the SHIKOKU-KE SUPPORTERS CLUB, participated in theevent, including the Company and Okura Hotel Marugame. At the event, delicious
food was provided by food trucks, a quiz contest was held, and mascot characters
appeared to liven up the atmosphere. The entire event attracted approximately
6,700 visitors. Almost all visitors responded that they were very satisfied, or theywould like to join the event again, indicating that they enjoyed the event.
The Company set up a booth to experience making kaleidoscopes using
polarizing film of the New Materials Division. Our name was mentioned as themost enjoyable booth, and we were able to make parents and guardians learn
about our products anew, which was very meaningful to us.
● Marugame community revitalization plan contest

Marugame Community Revitalization Plan Contest was held on March 25 and 26
for high school students in Marugame City to make plans to revitalize the
Marugame city center. This contest not only provided an opportunity for highschool students to develop an interest in and attachment to Marugame City, theirhometown, and local companies, but also provided an opportunity for adults
involved in the community development and the revitalization of Shikoku to listen
to the “real opinions” of high school students.
During the contest period, project members including the Company supported
high school students as mentors. In addition, a lecture was given by a professorof Kagawa University and round table sessions with judges were held as anorientation to help high school students learn the current situation and city
development of Marugame City.

SUSTAINABILITY REPORT 2023

58

SocialPromise to Business Partners
In cooperation with suppliers, we hope to work together onsustainable procurement, and aim to increase corporate
value.
The procurement in consideration of compliance with laws and regulations,human rights, natural environment, working environment, and bribery andcorruption is one of corporate social responsibilities. The spread of efforts forsustainable procurement from the Company to suppliers and more will lead tosustainable development of the entire supply chain. To that end, we monitor
whether there is any inappropriate acts related to human rights andenvironments in the supply chain (especially upstream), and work on building
and operating a mechanism for dialogues.

M ateriality
Establishing and Operating a Mechanism of Raw Material Procurement Conscious about Human Rights, etc.
Okura Industrial Group has established Okura Industrial Group Sustainable Procurement Policy as apolicy to achieve a sustainable society throughout the supply chain. To achieve this Policy, we haveestablished Okura Industrial Group Sustainable Procurement Guidelines. We are considering
requesting our suppliers to self-evaluate their performance regarding items such as considering
human rights, ensuring safety and health, securing quality and safety, and environmental
conservation. We will manage the operational aspects by confirming plans for improvement if theevaluation results do not reach a certain level.

M ateriality
Establishing and Operating a Mechanism of Environment-Conscious Raw Material Procurement (Green Procurement)
In 2007, Okura Industrial Group established Control Criteria for Chemical Substances, Okura
Industrial (hereinafter referred to as the Criteria) to appropriately manage chemical substances.
Presently, in order to increase efficiency of information communication on chemical substances
contained in products among the supply chain, we have redeveloped the Criteria and are investigating
whether chemical substances regulated by the Criteria are contained in raw materials, etc. used in theGroup, based on legal restraints including chemSHERPA management substances specified by
chemSHERPA*. As a part of development of human resources capable of managing chemical
substances, which is a policy included in “Medium-term Management Plan(2024)” of Environmental
Management Department, we are working to improve educational environment using e-learning
system, and improve abilities of chemical substances administrators and practitioners.
* Information communication scheme on chemical substances contained in products, which is operated by Joint Article Management Promotion-consortium (JAMP).

Message­−Voice of employees −The New Materials Division manufactures and sells optical films for displays, and functional materials of urethane
elastomer films and adhesives. With increasing environmental consciousness, requests from customers toinvestigate chemical substances have increased every year, and we had 160 requests in 2022, about 1.7 times higher
than the previous year.
Manami Nishitani
Recently, regulations on organic fluorine compounds (PFAS) have been tightened globally, particularly because of
CP Management
their adverse effects on the environment and ecosystems. If restrictions are determined by the REACH regulation
Administration Office,Quality Assurance Section, and other regulations in the EU in the future, restrictions will be imposed on manufacturing, use, and imports.
However, the definition and scope of PFAS are different, depending on the country and region, and details of
New Materials Division
regulations are in flux at this time, and therefore it is difficult to grasp the details. We, CP Management Administration
Office, will correctly understand regulations of each country and accurately manage chemical substances. In sodoing, we hope to contribute to earning the trust of our customers in the face of increasing environmental regulations
and environmental needs in the future.

59

SUSTAINABILITY REPORT 2023

GovernanceP r o m i s e t o B u s i n e s s P a r t n e r s /C o r p o r a t e G o v e r n a n c e

Corporate GovernanceIn response to ever-changing demands from society, we
explore an effective corporate governance style that suits us
and update the style as needed.
To continue to be a company that is trusted by society, Okura Industrial aims
for corporate growth while keeping in mind to coexist with society. Under ourmanagement philosophy of “Respect the Individual”, “Contributing to theSociety”, and “Customers First”, we will achieve a sustained growth and anincrease in medium- and long-term corporate value by conducting business
operation focusing on ESG in the changing social environment. To this end, we
will implement sound management practices as we hold dialogues with all our
stakeholders.

Corporate Governance System

General Meeting of Shareholders
Elect/
Dismiss

Elect/
Dismiss
ReportElect/
Dismiss

ProposeReport/State opinion

Board of Directors
Audit and Supervisory Committee

Accounting Auditor

Cooperate

Audit, supervise
Consult

ReportRespondNomination andRemuneration
Committee

Representative Director
ReportReportReportInstructSupervise

Instruct

Instruct

Instruct

Instruct

Board Meeting
ReportInstructInternal Control/
Auditing OfficeSustainability Committee
Compliance Committee

Supervise

ReportCooperate

Instruct

Corporate Center

Research &Development Center

Plastic Film Division

New Materials Division

Housing Materials Division

Affiliate Companies

Audit

ReportReportSUSTAINABILITY REPORT 2023

60

Governance

Meeting Bodies and Committees
Board of Directors

Nomination and Remuneration Committee

For a sustained growth and increase in medium- and long-term corporate

The Nomination and Remuneration Committee has been established as avalue, the Board of Directors formulate important corporate strategies andbody with which the Board of Directors consult and that makes decisions.

supervise the execution of those strategies. The Board also builds internal

The purpose of the Committee is to select and dismiss Representative

control and risk management systems. Seven Inside Directors and five

Directors and nominate Director candidates, as well as to ensure

Outside Directors comprise the Board of Directors. The members are

independence, objectivity, and accountability of the Board of Directors’chosen to ensure that the Board possesses well-balanced experience,

functions concerning remuneration, etc. for Representative Directors andknowledge, and skills, while maintaining diversity as a whole. Outside

Directors. The Committee consists of one chairperson selected from

Directors account for one-third or more of all members to ensure

Independent Outside Directors; other Independent Outside Directors; andtransparency and effectiveness of the Board of Directors.

Operating Officer, President, Director.

Audit and Supervisory Committee

Board Meeting

By auditing and supervising the business execution of Directors, the Audit

The Board Meeting plans and proposes basic policies and basic plans for

and Supervisory Committee helps achieve a sound and sustained corporate

business execution, based on decisions made by the Board of Directors.

growth and an increase in medium- and long-term corporate value. The

The Committee also discusses important business matters that should be

Committee consists of six members including five Outside Directors. Fourbrought up at Board of Directors meetings. In addition, resolutions on

Outside Directors meet the criteria for independence set by Tokyo Stockimportant matters that do not necessarily meet the above criteria are

Exchange, Inc.

approved by the Committee. The Committee consists of Operating Officers(including those who concurrently serve as Directors).

Remuneration for Officers
Remuneration for Okura Industrial’s Directors (excluding Directors serving as Audit and Supervisory Committee Members and Outside Directors) consists ofbasic remuneration, performance-linked compensation, and stock compensation. The ratio between the three types of compensation is roughly 8:1:1. Basic
remuneration is monetary compensation set in accordance with the position level. A fixed amount is paid every month. Performance-linked compensation ismonetary compensation linked to performance. By linking remuneration for eligible Directors with corporate performance and the degree of contribution, we
intend to increase motivation for better performance. Restricted stock compensation is shares with transfer restrictions allotted based on the amount specificto the position level. By having eligible Directors share the risks and benefits of share price fluctuations with shareholders, we aim to grow and increase corporate
value in the medium and long term.
Directors and Outside Directors serving as Audit and Supervisory Committee Members are paid fixed remuneration only and are not eligible for the stockcompensation plan. The remuneration system is designed in this way to ensure that their remuneration is not directly affected by corporate performance, thereby
securing their independence from the Company’s management. In addition, the appropriateness of the remuneration system and the amount of remunerationfor each Director is discussed by the Nomination and Remuneration Committee.

61

SUSTAINABILITY REPORT 2023

Corporate GovernanceCompliance
To Okura Industrial Group, compliance means not only complying with laws and regulations
but responding to expectations and requests from society. We have therefore prepared atextbook that covers regulations, rules, case studies, and other relevant information and madeit accessible to all employees. We also offer training and education on compliance on a regularbasis. The Standards of Ethical Conduct, which is at the core of written rules, were revised toa large extent in 2023. Major changes include substantial additions and revisions with regard
to environmental protection, guarantee of human rights, and other fields to which there havebeen increasing requests from society in recent years to pay attention from the SDGs
perspective. We also added provisions on management systems, as well as commitment bymanagement executives. Please find the Standards for Ethical Conduct disclosed on our website.
Organizations that ensure compliance include the Compliance Committee, chaired by the
President, and the Compliance Action Committee thereunder, run by employees in charge ofthe matter. These Committees hold meetings on a regular basis and make reports, etc. as necessary.
In addition, internal and external whistleblowing hotlines are in place. By regularly providing
information about the hotlines, we strive to create an environment that makes whistleblowing

Internal reporting system
The Group has introduced an internal reporting
system to prevent illegal acts and misconduct,
as well as to improve the self-cleansing
function. Based on the Compliance Program
Regulations, report details are kept confidential
and interests of whistleblowers are protected.
Whistleblowers can remain anonymous andreceive feedback from the company about theresults of investigation on and measures taken
against the reported facts.

easier. We aim to establish a more effective structure to handle whistleblowing whileaccommodating recent revisions of laws and regulations, including confidentiality of reports
and protection of whistleblowers.

Activities Concerning Intellectual Property
Okura Industrial Group complies with laws and regulations concerning intellectual property. In our product development, manufacturing, and sales activities, weensure that customers can use our products without worries. As one of the initiatives to achieve this, we conduct clearance searches for the intellectual propertyof other companies when developing products or conducting design reviews for design change.
In addition, development and intellectual property departments work together to apply for and actively establish intellectual property rights with regard toinventions, etc. from our product development.
To help employees understand intellectual property rights and leverage such rights, we also conduct in-house education every year, in accordance with the typeof work and positions. Employees who engage in product development receive workshop-style education on preparing invention proposals. Employees who
engage in naming or may use the copyrighted work of others receive e-learning on copyright and trademark rights.

Risk Management
Okura Industrial Group offers a variety of products and services to society. We thus bear quality, environmental, safety, and other types of risks. Functions in thehead office share roles in analyzing each type of risk and strive to prevent and respond to them. Furthermore, our head office functions and major plants are in
Kagawa. This makes it important to prepare for the Nankai Trough Mega Earthquake, which is expected to happen in the near future. Our BCP initiatives include
decentralization of manufacturing sites, preparation of relevant regulations, and emergency drills.
We constantly improve and strengthen information security. To make sure that all employees understand the importance of information security and appropriately
handle information assets used in business activities, we strive to raise awareness toward security through regular e-learning and targeted email attack drills.

SUSTAINABILITY REPORT 2023

62

GovernanceDirectors and Officers
Career summary

Career summary

April

1975

Joined the Company

April

1977

Joined the Company

March

2003

Director

April

2009

Operating Officer

January 2006

Executive Vice President, Director

March

2010

March

Senior Executive Vice President,
Representative Director

Director; Supervision of Production Group,
Plastic Film Division; and Supervision of subsidiarycompanies; and Manager, Corporate Planning
Department, Corporate Center

2009

January 2010

President, Representative Director

March

Chairperson, Representative Director (to present)

2018

Chairperson,
Representative Director

Operating Officer,
President,
Representative Director

Kazunori Takahama

Susumu Kanda

Reason for election
Mr. Kazunori Takahama had served as President, Representative Director since 2010, andhas served as Chairperson, Representative Director since 2018. He was judged to be able tocontinue to fulfill his responsibility as Director based on his extensive experience and insight, andwas re-elected to continue to serve in the position for the term starting the current fiscal year.
Attendance at Board of Directors meetings (2022)

14 out of 14 (100%)

Yoshitomo Tanaka

2017

Executive Vice President, Representative Director;
Division President, Plastic Film Division

March

2018

President, Representative Director

March

2020

Operating Officer, President, Representative
Director (to present)

Reason for election

Mr. Susumu Kanda had served as President, Representative Director since 2018, and has served
as Operating Officer, President, Representative Director since 2020. He was judged to be able
to continue to fulfill his responsibility as Director based on his extensive experience and insight,
and was re-elected to continue to serve in the position for the term starting the current fiscal year.

1977

Joined the Company

2009

Operating Officer; President, Representative
Director, Kansai Okura Co., Ltd.

March

2010

Director; Manager, General Affairs Department,
Corporate Center

April

March

2011

Director; Manager, General Affairs Department,
Corporate Center; and Supervision of Environment
Safety and Quality Assurance; and Supervision ofsubsidiary companies, Corporate Center

January 2007

President, Representative Director, Kyushu Okura
Co., Ltd.

April

Operating Officer; President,
Representative Director, Kyushu Okura Co., Ltd.

Career summary
1993

2009

Joined the Company

March

2017

Director; Supervision of Corporate Center; andManager, General Affairs Department

February 2010

Operating Officer; President, Representative
Director, Kansai Okura Co., Ltd.

March

2018

Executive Vice President, Director; Supervision of
Corporate Center; and Manager, General Affairs
Department

July

2015

Operating Officer; Manager, Planning and
Administration Group, Operation Support
Department, Plastic Film Division

January 2019

Executive Vice President, Director; Supervision of
Corporate Center; and Supervision of CSR/ESG

March

2017

March

2020

Operating Officer, Executive Vice President,
Director; Supervision of Corporate Center; andSupervision of CSR/ESG

Operating Officer; Manager, Planning and
Administration Group, Plastic Film Division; andManager, Production Management Group

March

2021

Operating Officer, Director; Manager, Accounting
Department, Corporate Center

April

2021

Operating Officer, Executive Vice President,
Director; Supervision of General Affairs, Public
Relations, Human Resources, Sustainability
Promotion and DX Promotion of Corporate Center;and Chairperson of Sustainability Committee

April

2021

Operating Officer, Director; Manager, Finance andBusiness Administration Department, Corporate
CenterJanuary 2023

Operating Officer, Director; Division President,
Plastic Film Division

Operating Officer, Executive Vice President,
Director; Supervision of Corporate Center; andManager, Finance and Business Administration
Department; and Chairperson of Sustainability
Committee (to present)

March

Operating Officer, Executive Vice President,
Director; Division President,
Plastic Film Division (to present)

Mr. Yoshitomo Tanaka has served as Director since 2010 after serving as President,
Representative Director of the Company’s subsidiary. He was judged to be able to continue tofulfill his responsibility as Director based on his extensive experience and insight as a manager ofadministrative departments, and was re-elected to continue to serve in the position for the term
starting the current fiscal year.
Attendance at Board of Directors meetings (2022)

14 out of 14 (100%)

Operating Officer,
Executive Vice President,
Director;
Division President,
Plastic Film Division

Eiji Fukuda

2023

Reason for election
Mr. Eiji Fukuda has served as Director since 2021 after the engagement in several managerial
positions in administrative departments under the Plastic Film Division. He was judged to be able
to continue to fulfill his responsibility as Director based on his extensive experience and insightgained in the Plastic Film Division, and was re-elected to continue to serve in the position for theterm starting the current fiscal year.
Attendance at Board of Directors meetings (2022)

14 out of 14 (100%)Career summary

Career summary

April

1980

Joined the Company

April

1985

Joined the Company

April

2006

Plant Manager, Marugame No. 4 Plant

April

2007

Manager, Business Unit 2, New Materials Division

April

2009

Operating Officer; Manager, Shrink Film Group,
Plastic Film Division; and Plant Manager,
Marugame No. 4 Plant

March

2009

Division President, New Materials Division

March

2010

Operating Officer; Manager, Operation Support
Department, Plastic Film Division; and Manager,
Product Development Department; and Manager,
Industrial Material GroupOperating Officer; Division President, New
Materials Division

March

2017

Director; Division President, New Materials
Division

March

2020

Operating Officer, Director; Division President,
New Materials Division (to present)

January 2013

March

2013

Director; Manager, Operation Support
Department, Plastic Film Division; and Manager,
Product Development Department; and Manager,
Industrial Material Group

November 2015

Director; Supervision of Research & Development
Center; and Manager, Operation Support
Department, Plastic Film Division; and Manager,
Product Development Department; and Manager,
Industrial Material Group

January 2016

Director; Supervision of Research & Development
Center; and Manager, Product Development
Department, Plastic Film Division; and Manager,
Production Management Group

March

2017

Director; Supervision of Research & Development
Center; and Manager, Product Development
Department, Plastic Film Division

March

2018

Director; Division President, Plastic Film Division;and Supervision of Research & Development Center

March

2020

Operating Officer, Director; Division President,
Plastic Film Division; and Supervision of Research& Development Center

January 2023

Operating Officer, Director; Supervision of Research& Development Center (to present)

Reason for election

Mr. Hideki Uehara has served as Director since 2013 after the engagement in several managerial
positions in production and development departments under the Plastic Film Division. He
was judged to be able to continue to fulfill his responsibility as Director based on his extensive
experience and insight gained in the development department, and was re-elected to continue
to serve in the position for the term starting the current fiscal year.
Attendance at Board of Directors meetings (2022)

63

Executive Vice President, Director; Division
President, Plastic Film Division

March

April

Reason for election

Hideki Uehara

2016

April

January 2023

Operating Officer,
Director;
Supervision of Research& Development Center

Director; Division President, Plastic Film Division

March

Attendance at Board of Directors meetings (2022)
14 out of 14 (100%)
Attendance at Nomination and Remuneration Committee meetings (2022) 3 out of 3 (100%)Career summary

Operating Officer,
Executive Vice President,
Director;
Supervision of Corporate
Center; and Manager,
Finance and Business
Administration Department;
and Chairperson of
Sustainability Committee

January 2013SUSTAINABILITY REPORT 2023

14 out of 14 (100%)

Operating Officer,
Director; Division
President, New Materials
Division

Tomoo Ueta

Reason for election
Mr. Tomoo Ueta has years of experience in production departments under the New Materials
Division, and has served as Division President since 2009 and as Director since 2017. He wasjudged to be able to continue to fulfill his responsibility as Director based on his extensive
experience and insight gained in the New Materials Division, and was re-elected to continue toserve in the position for the term starting the current fiscal year.
Attendance at Board of Directors meetings (2022)

14 out of 14 (100%)

Career summary

1985

Registered as a Certified Public Accountant

April

1991

Joined the Company

April

1998

Joined Deloitte Touche Tohmatsu LLC

March

2017

July

1999

Partner, Deloitte Touche Tohmatsu LLC

Manager, Accounting Department, Corporate
Center

March

2021

Operating officer; Manager, Internal Audit Office

April

2021

Operating officer; Manager, Internal Control/
Auditing Office

March

2022

Director (Full-time Audit and Supervisory
Committee Member) (to present)

October 2014

Established KITADA Takashi CPA Office (to present)

March

Director (Audit and Supervisory Committee
Member), the Company (to present)

2016

Independent Outside
Director(Audit and Supervisory Committee Member)

Outside Director (Audit and Supervisory
Committee Member), FINDEX Inc. (to present)

Takashi Kitada

Director,
Full-time Audit and Supervisory
Committee Member

Corporate Governance

Career summary
April

Seiji Nagao

Reason for election
Although Mr. Takashi Kitada has no experience of being involved in the management of theCompany other than as an Outside Officer, he was judged that he is well versed in auditing,accounting and other corporate practices as a certified public accountant, and has a wide rangeof experience and insight, and that he will be able to appropriately perform his duties as an
Outside Director. For these reasons, he was re-elected to continue to serve in the position for theterm starting the current fiscal year. The role that he is expected to fulfill as an Outside Director
is primarily to offer valuable opinions and advice about the Company’s corporate management
and governance and supervise execution of the Company’s operations by leveraging his vast
knowledge and experience based on a professional perspective as a certified public accountant.
He has served as an Outside Director serving as Audit and Supervisory Committee Member forseven years, while also serving as Chairperson of the Nomination and Remuneration Committee.
Attendance at Board of Directors meetings (2022)
14 out of 14 (100%)
Attendance at Audit and Supervisory Committee meetings (2022)
13 out of 13 (100%)
Attendance at Nomination and Remuneration Committee meetings (2022) 3 out of 3 (100%)

Reason for election
Mr. Seiji Nagao has served in managerial position in the Internal Audit Department since 2021
after the engagement in several managerial positions in the Accounting Department. He has
also served as Operating Officer since 2021. He was judged to be able to contribute to further
strengthening the Company’s corporate governance by utilizing his extensive experience andinsight in the Accounting and Internal Audit Departments and appropriately supervise theexecution of the Company’s operations, and was re-elected to continue to serve in the position
for the term starting the current fiscal year.
Attendance at Board of Directors meetings (2022)
10 out of 10 (100%)
Attendance at Audit and Supervisory Committee meetings (2022) 10 out of 10 (100%)Career summary

Career summary

April

1983

Registered as an attorney

April

April

1983

Established Baba Law Office (to present)

October 2001

March

2004

Auditor, the Company

Joined Kirkland & Ellis LLP, Washington, D.C.
Office, the United States

March

2015

Director, the Company

January 2002

July

2016

Director (Audit and Supervisory Committee
Member), the Company (to present)

Registered as an attorney in the state of New York,the United States

September 2002

Returned to Dojima Law Office (currently, Dojima
LPC) (to present)

Independent Outside
Director(Audit and Supervisory
Committee Member)

Independent Outside
Director(Audit and Supervisory
Committee Member)

Toshio Baba

Nae Iijima

Reason for election

1994

Registered as an attorney and joined Dojima Law Office

June

2003

Outside Auditor, Navitas CO., LTD. (currently,
SiriusVision CO., LTD.)

April

2013

Affiliate Professor of Kyoto University Law School

June

2015

Outside Director, OSAKA Titanium technologies
Co., Ltd. (to present)

June

2016

Outside Director (Audit and Supervisory
Committee Member), Navitas CO., LTD. (currently,
SiriusVision CO., LTD.)

April

2019

Vice Chair, Osaka Bar Association

March

2022

Director (Audit and Supervisory Committee
Member), the Company (to present)

Reason for election

Although Mr. Toshio Baba has no experience of being involved in the management of theCompany other than as an Outside Officer, he was reelected as he was judged that he is wellversed in corporate legal affairs and compliance as an attorney, and has sufficient insight into
corporate management through his legal activities, and therefore is able to appropriately perform
his duties as an Outside Director. The role that he is expected to fulfill as an Outside Director is
primarily to offer valuable opinions and advice about the Company’s corporate management
and governance and supervise execution of the Company’s operations by leveraging hisvast knowledge and experience based on a professional perspective as an attorney. He hasserved as an Outside Director for eight years and as an Outside Director serving as Audit
and Supervisory Committee Member for seven years, while also serving as Nomination andRemuneration Committee Member. In addition, he has in the past been a non-executive officer(Auditor) of the Company.

Although Ms. Nae Iijima has no experience of being involved in the management of the Company
other than as an Outside Officer, she was judged to be able to appropriately perform her duties
as an Outside Director as she is well versed in corporate legal affairs and compliance as an
attorney and has sufficient insight into corporate management through her legal activities, andwas re-elected to continue to serve in the position for the term starting the current fiscal year.
The role that she is expected to fulfill as an Outside Director is primarily to offer valuable opinions
and advice about the Company’s corporate management and governance and supervise
execution of the Company’s operations by leveraging her vast knowledge and experience basedon a professional perspective as an attorney. She has served as an Outside Director serving as
Audit and Supervisory Committee Member for one year, while also serving as Nomination andRemuneration Committee Member.

Attendance at Board of Directors meetings (2022)
14 out of 14 (100%)
Attendance at Audit and Supervisory Committee meetings (2022)
13 out of 13 (100%)
Attendance at Nomination and Remuneration Committee meetings (2022) 3 out of 3 (100%)

Attendance at Board of Directors meetings (2022)
10 out of 10 (100%)
Attendance at Audit and Supervisory Committee meetings (2022)
10 out of 10 (100%)
Attendance at Nomination and Remuneration Committee meetings (2022) 3 out of 3 (100%)Career summary

Career summary

April

April

1993

Joined Sumitomo Chemical Co., Ltd.
(currently, Sumitomo Chemical Company, Limited)

April

2020

Senior Manager, Corporate Planning Office,
Sumitomo Chemical Company, Limited

March

2022

Director (Audit and Supervisory Committee
Member), the Company (to present)

April

2022

Manager, Corporate Planning Office, Sumitomo
Chemical Company, Limited (to present)

June

2022

Outside Corporate Auditor, SHINTO PAINT CO., LTD.
(to present)

1996

December 1999

Registered as a Certified Public Tax Accountant

April

Established Watanabe Yoichi Tax Accounting Office(currently, Bizbrain Tax Accountant Corporation)

July

2003
2020

September 2020
Independent Outside
Director(Audit and Supervisory
Committee Member)

Yoichi Watanabe

Joined Takahashi Tax Accounting Office

March

2022

November 2022

Vice Chairman, TKC National Federation(to present)
Vice Chairman, TKC Shikoku Local Association(to present)
Director (Audit and Supervisory Committee
Member), the Company (to present)
Representative Partner, Bizbrain Tax Accountant
Corporation (to present)

Outside Director(Audit and Supervisory
Committee Member)

Yasuo Yoshino

Reason for election
Mr. Yoichi Watanabe was judged to be able to appropriately perform his duties as an Outside
Director as he is well versed in auditing, accounting, and other corporate practices as a certified
public tax accountant and has a wide range of experience and insight, and was re-elected tocontinue to serve in the position for the term starting the current fiscal year. The role that heis expected to fulfill as an Outside Director is primarily to offer valuable opinions and advice
about the Company’s corporate management and governance and supervise execution of theCompany’s operations by leveraging his vast knowledge and experience based on a professional
perspective as a certified public tax accountant. He has served as an Outside Director serving
as Audit and Supervisory Committee Member for one year, while also serving as Nomination andRemuneration Committee Member.
Attendance at Board of Directors meetings (2022)
10 out of 10 (100%)
Attendance at Audit and Supervisory Committee meetings (2022)
10 out of 10 (100%)
Attendance at Nomination and Remuneration Committee meetings (2022) 3 out of 3 (100%)

Reason for election
Mr. Yasuo Yoshino was judged to be able to appropriately perform his duties as an Outside
Director as he has worked for other companies for many years and has a wealth of businessexperience and knowledge, and was re-elected to continue to serve in the position for the term
starting the current fiscal year. The role that he is expected to fulfill as an Outside Director is
primarily to offer valuable opinions and advice about the Company’s corporate management
and governance and supervise execution of the Company’s operations by leveraging his vast
knowledge and experience gained at a major chemical company. He has served as an Outside
Director serving as Audit and Supervisory Committee Member for one year.
Attendance at Board of Directors meetings (2022)
10 out of 10 (100%)
Attendance at Audit and Supervisory Committee meetings (2022) 10 out of 10 (100%)*Directors serving as Audit and Supervisory Committee Members Mr. Seiji Nagao, Ms. Nae Iijima, Mr. Yoichi Watanabe, and Mr. Yasuo Yoshino were elected to serve in the position at the 102nd Annual
General Meeting of Shareholders held on March 24, 2022. Accordingly, their meeting attendance data represent their attendance at Board of Directors meetings and Audit and Supervisory Committee
meetings held on and after March 24, 2022.

SUSTAINABILITY REPORT 2023

64

Governance

Skills Matrix
The Company has formulated the “Okura Industrial Group Policy on Corporate Governance”, which stipulates the roles and composition of the Board of Directors
and the policy for nominating candidates for Directors.
The Board of Directors appoints Directors with a wealth of experience and exceptional expertise in the areas of “corporate management”, “business strategy
and marketing”, “technology, production and development”, “finance and accounting”, “human resources and labor affairs, legal affairs and compliance”, and“sustainability, general affairs and public relations” in order to make important management decisions and to conduct proper management oversight. Directors
and Outside Directors serving as Audit and Supervisory Committee Members are paid fixed remuneration only and are not eligible for the stock compensation
plan. The remuneration system is designed in this way to ensure that their remuneration is not directly affected by corporate performance, thereby securing their
independence from the Company’s management.
Position and Responsibilities in the Company, Qualifications
Category

Name

GenderKazunori Takahama

Male

Chairperson, Representative Director

Susumu Kanda

Male

Operating Officer, President, Representative
Director, Nomination and Remuneration
Committee Member

Position

Responsibilities, Qualifications

Fields of Expectation for the Director
Corporate
Management

Business Strategy
and MarketingTechnology,
Production andDevelopment

Finance andAccounting

Sustainability,
Human Resources
General Affairs andand Labor Affairs
Public Relations◎◎

Inside Directors
Outside Directors

Yoshitomo Tanaka

Male

Operating Officer, Executive
Vice President, Director

Supervision of Corporate Center;and Manager, Finance and Business
Administration Department; andChairperson of Sustainability Committee

Eiji Fukuda

Male

Operating Officer, Executive
Vice President, Director

Division President,
Plastic Film Division○○

Hideki Uehara

Male

Operating Officer, Director

Supervision of Research &Development Center○○

Tomoo Ueta

Male

Operating Officer, Director

Division President, New
Materials Division○○

Seiji Nagao

Male

Director, Full-time Audit andSupervisory Committee Member○

Takashi Kitada

Male

Independent Outside Director, Audit andSupervisory Committee Member, Nomination Certified Public Accountant
and Remuneration Committee Member○

Toshio Baba

Male

Independent Outside Director, Audit andSupervisory Committee Member, Nomination Attorney
and Remuneration Committee Member○○

Nae Iijima

Independent Outside Director, Audit andFemale Supervisory Committee Member, Nomination Attorney
and Remuneration Committee Member○○

Yoichi Watanabe

Yasuo Yoshino

Male

Independent Outside Director, Audit andSupervisory Committee Member, Nomination Certified Public Tax Accountant
and Remuneration Committee Member

Male

Outside Director, Audit andSupervisory Committee
Member

○

○

○
○

○

Manager, Corporate Planning
Office, Sumitomo Chemical
Company, Limited○○○* Representative Directors are listed in terms of overall corporate management, and each Director is listed in terms of up to two fields of particular expectation

Evaluation of the Effectiveness of the Board of Directors
The Company’s Board of Directors performs an annual survey conducted by a third party organization about the effectiveness of the Board. The Board analyses
the results, identifies issues, and discusses them at Board of Directors meetings to ensure the effectiveness of its functions.
Self assessment and analysis were conducted as follows under the guidance of the outside organization. All of the Directors, who are the members of the Board, weresurveyed in September 2022. To ensure anonymity, the Directors submitted their answers directly to the outside organization. Having received the outside organization’sreport on the overall results of the survey, the Board analyzed, discussed, and assessed the results at the regular Board of Directors meeting held in December 2022.
The survey results showed that the Directors consider the Company’s Board of Directors appropriate in terms of composition, roles, and operation, mostly giving
positive ratings to the Board’s function of monitoring the Company’s sustainability performance and other operations, as well as to Outside Directors’ performanceand other points. Accordingly, we consider that the effectiveness of the Board of Directors as a whole is ensured.
Meanwhile, the Directors shared issues that need to be addressed for the Board to further improve its functions and have more active discussions. One of the
Directors expressed the view that executive training should be enhanced, and another requested that communications with shareholders and investors should
be shared with the Board in more detail.
Based on these effectiveness assessment results, the Company’s Board of Directors will thoroughly examine the outstanding issues and take action promptly,
and continue to implement efforts to strengthen the Board’s functions.

History of the Governance System
Implemented in: Initiatives

Implemented in: Initiatives

February 2004

Formulated Okura Industrial Basic Management Conception 2004

January

2019

April

2006

Established Internal Audit Office

April

2008

Established Compliance Committee
Introduced an internal reporting system

March

2020

Introduced a restricted stock remuneration plan

April

2021

Established Sustainability Promotion Department(changed the name of ESG Promotion Council to Sustainability Promotion
Department and enhanced the system for promoting sustainability)
Changed the name of CSR Committee to Sustainability Committee
and enhanced the system for promoting sustainability
Established Internal Control/Audit Office(Changed the name of Internal Audit Office to Internal Control/Audit
Office and enhanced oversight functions)

March

2022

Increased the number of Outside Directors from 4 to 5

April

2022

Established a voluntary Nomination and Remuneration Committee

April

2009

Introduced an operating officer system

March

2015

Elected an Outside Director

March

2016

Transitioned to a company with an audit and supervisory committee

August2016

Formulated Okura Industrial Group Policy on Corporate Governance

December 2016

65

Opened Okura Industrial Group Corporate Ethics Hotline

SUSTAINABILITY REPORT 2023

Established ESG Promotion Council
Established CSR CommitteeCorporate Governancem es s age

Message from our Outside Director

As a Certified Public Accountant from an audit firm, I have been serving
as an Outside Director here since 2016.
There have been conspicuous changes in accounting standards and nonfinancial disclosure systems in recent times, and I hope that the value of
my experience will be of benefit in the Company’s timely disclosures.
I look forward to working with you.

Takashi Kitada
Independent Outside Director(Audit and Supervisory Committee Chairperson, Nomination andRemuneration Committee Chairperson)

What is a sustainable company ?
What kind of company is a sustainable company?
Over 40 years have passed since I entered the world of accounting, and I have been involved in a great number ofcompanies, from listed companies such as Okura Industrial to SMEs and startups.
In the course of that involvement, from my position as a Certified Public Accountant, I have drawn just one conclusion
about sustainable companies.
It all comes down to this: a sustainable company is one that continues to generate profit.
If you were to replace the question, ‘What is a sustainable company?’ with the question ‘What kind of company is a goodcompany?’ from the employees’ point of view, I imagine that you would receive quite a variety of answers, including:・A company with high salaries
・A company that is rewarding to work for・A company that has full benefits and welfare
・A company that does not have evil aspects such as unpaid overtime
These things are only possible because a company posts appropriate profits, pays adequate salaries and bonuses, and isconstantly making new capital investments.
To recount my experience of a certain growth company, it had a president of excellent character, a proper management
philosophy, and ongoing, fulfilling employee education, but once this company fell into the red, it collapsed in the blink ofan eye. No matter how impressive a company’s management may be, if no profit results, it will all come to naught.
To take this argument to an extreme, I came to believe that continuing to generate profit is the only form of righteousness
for a company. Also, we have entered an era in which, in addition to this, companies are being called on to display avariety of elements, such as “compliance”, “elimination of various forms of harassment”, “social contribution”, and“environmental protection”. This is making the steering of a company increasingly complex.
What I ask of Okura Industrial’s employees, including officers, is to constantly think about what they can do in theirrespective positions to enable the Company to generate profits, and to put that into practice in their day-to-day work.
That, I firmly believe, is what makes for a “sustainable company”.
I hope to be of assistance and contribute to the Company going forward, so I look forward to working with you all.

SUSTAINABILITY REPORT 2023

66

Financial Summary/Non-Financial Summary

Financial data

2013

2014

2015

Unit

Net sales*1(million yen)

90,65287,53985,996

Operating profit(million yen)

2,010

2,100

2,354

(%)

2.2

2.3

2.7

Ordinary profit(million yen)

2,010

1,963

2,326

Profit attributable to owners of parent(million yen)

1,605

1,759

1,191

Net assets(million yen)

36,45937,957

38,739

Capital expenditures(million yen)

5,528

4,560

2,447

Research and development expenses(million yen)

1,149

1,126

1,050

Equity ratio

(%)

40.2

42.7

44.1

Return on equity (ROE)

(%)

4.6

4.7

3.1

(million yen)

22,42722,211

19,707

Net assets(yen)

610.92636.25649.46

Profit

(yen)

26.80

29.48

19.98

Dividends

(yen)

7.50

7.50

7.50

Operating profit margin

Net debt

Per share(Reverse stock split was implemented in July 2018)

Non-financial data

Unit

CO2 emissions (Scope 1 and 2, Japan)*2, 5, 6, 7, 15(t-CO 2)

154,207

146,734

158,593

CO2 emissions (Scope 1 and 2, overseas)*4, 7, 16, 17(t-CO 2)---CO2 emissions (logistics)*3, 8(t-CO 2)

5,831

6,295

6,090

(kL)

-

-

61,714

(t)

5,407

5,387

7,475

(m3)

-

-

-

(persons)

1,993

1,931

1,930

(%)

12.5

12.8

13.2

Number of Independent Outside Directors(persons)

2

2

2

Average length of service (non-consolidated)(years)

15.7

16.2

16.5

Number of lost-worktime accidents(cases)4

5

11Energy usage (converted into crude oil volume) *9, 10, 15
Waste emissions *6, 11, 12
Water usage (municipal water) *7, 13, 14
Number of employees
Ratio of female employees (non-consolidated)*1 The figures for 2022 are those after applying the Accounting Standard for Revenue Recognition*2 In the calculation of the Scope 2 emissions, a basic emissions factor is used for 2013 to 2020, and an adjusted emissions factor for 2021 and 2022
*3 CO2 emissions from logistics are calculated using data from specified consignors’ regular reports submitted under the Act on Rationalizing Energy Use*4 CO2 emissions from Wuxi Okura Packing Material Co., Ltd.
*5 The figures for 2013 to 2020 represent data from April of each year to March of the following year
*6 The figure for 2021 represents data from January to December of the year (verified by a third party)*7 The figure for 2022 represents data from January to December of the year (to be verified by a third party)*8 Data from April of each year to March of the following year
*9 The figures from 2015 to 2020 represent data from April of each year to March of the following year

67

SUSTAINABILITY REPORT 2023

2017

2018

2019

2020

2021

2022

86,07990,812

86,26085,36480,95888,42077,260

4,710

5,789

4,254

3,719

4,286

5,123

3,771

5.4

6.3

4.9

4.3

5.2

5.8

4.9

4,655

5,891

4,366

3,894

4,509

5,531

4,275

2,507

2,720

2,442

2,899

2,865

3,417

3,788

40,41444,03943,83446,44149,09452,52455,591

3,066

5,561

5,846

5,051

3,698

4,673

5,524

948

944

1,029

1,060

949

1,047

1,179

49.0

50.3

51.8

55.6

59.4

61.1

61.6

6.3

6.4

5.6

6.4

6.0

6.7

7.0

13,458

10,157

9,043

8,321

5,631

3,312

2,376

677.75738.793,677.39

3,896.47

4,115.91

4,401.20

4,655.71

42.05

45.64

204.92243.35240.41286.49317.45

10.00

13.00

55.00

55.00

60.00

70.00

85.00

156,246

132,409126,750

118,340

94,814

122,258

121,718

-

-

-

-

-

2,970

2,849

5,798

5,634

5,369

5,049

5,033

5,392

5,590

63,081

62,99762,537

61,83657,99359,31860,509

7,249

7,749

7,220

8,245

6,667

7,262

6,653

-

-

-

445,336

347,442353,972

341,868

1,980

2,027

2,053

2,025

2,005

1,966

1,935

13.4

13.8

13.9

14.8

15.3

16.0

16.2

2

2

2

2

3

3

4

16.7

16.5

16.4

15.7

16.1

16.2

16.5

5

7

6

4

1

5

1

F i n a n c i a l S u m m a r y/ N o n - F i n a n c i a l S u m m a r y

2016*10 The figures for 2021 and 2022 represent data from January to December of each year
*11 The figures for 2013 to 2020 represent data from January to December of each year
*12 The figure for 2022 represents data from April of the year to March of the following year
*13 The figures for 2019 and 2020 represent data from April of each year to March of the following year
*14 The figure for 2021 represents data from April of the year to March of the following year (verified by a third party)*15 The data from 2015 to 2017 do not include those for Okura Hotel Takamatsu*16 The figure for 2021 represents data from January to December of the year (to be verified by a third party)*17 A CO2 emissions factor of 0.64 (kg-CO2 /kWh) is used in the calculation.

SUSTAINABILITY REPORT 2023

68

Corporate Information

Company Profile
Company name

Okura Industrial Co., Ltd.

Head office1515 Nakazu-cho, Marugame, Kagawa 763-8508 Japan Phone: +81-877-56-1111

Representatives

Chairperson, Representative Director Kazunori Takahama
Operating Officer, President, Representative Director Susumu Kanda

Established

July 11, 1947

Capital8,619,616,071 yen (as of December 31, 2022)

Number of employees

1,935 (consolidated; as of December 31, 2022)

Businesses

Manufacture and sale of all types of polyethylene products and polypropylene products
Manufacture and sale of optical functional films, etc.
Manufacture and sale of particle board, engineered wood boards, plywood, other engineered wood products,
lumber processing business, and housing site development and sales of housing

Business Sites
Corporate Center

1515 Nakazu-cho, Marugame, Kagawa 763-8508 Japan

Phone: +81-877-56-1111

Research & Development Center

1515 Nakazu-cho, Marugame, Kagawa 763-8508 Japan

Phone: +81-877-56–1120

Plastic Film Division

Plastic Film Division

New Materials Division

Housing Materials Division

1515 Nakazu-cho, Marugame, Kagawa 763-8508 Japan

Phone: +81-877-56-1150

Product Development Department 1515 Nakazu-cho, Marugame, Kagawa 763-8508 Japan

Phone: +81-877-56-1124

Tokyo Branch Office

3-13-2 Higashiikebukuro, Toshima-ku, Tokyo 170-0013 Japan

Phone: +81-3-6912-5041

Nagoya Branch Office1-36 Namiuchi-cho, Kita-ku, Nagoya, Aichi 462-0041 Japan

Phone: +81-52-913-5191

Osaka Branch Office

1-3-10 Nishihonmachi, Nishi-ku, Osaka 550-0005 Japan

Phone: +81-6-6532-3571

Hiroshima Sales Office

6-8-45 Shoko Center, Nishi-ku, Hiroshima 733-0833 Japan

Phone: +81-82-277-7611

Shikoku Sales Office1515 Nakazu-cho, Marugame, Kagawa 763-8508 Japan

Phone: +81-877-56-1155

Marugame No. 4 Plant

52 Horai-cho, Marugame, Kagawa 763-0062 Japan

Phone: +81-877-24-1717

Marugame No. 5 Plant

23 Horai-cho, Marugame, Kagawa 763-0062 Japan

Phone: +81-877-25-5800

Chunan Plant

773-6 Sabumi, Manno-cho, Nakatado-gun, Kagawa 769-0301 Japan

Phone: +81-877-75–6350

New Materials Division

1515 Nakazu-cho, Marugame, Kagawa 763-8508 Japan

Phone: +81-877-56-1130

B Building(in Marugame No. 4 Plant)

52 Horai-cho, Marugame, Kagawa 763-0062 Japan

Phone: +81-877-24-2159

G Building and North Building(in Chunan Plant)773-6 Sabumi, Manno-cho, Nakatado-gun, Kagawa 769-0301 Japan

Phone: +81-877-58-8670

Housing Materials Division

1515 Nakazu-cho, Marugame, Kagawa 763-8508 Japan

Phone: +81-877-56-1258

Sales Department

1515 Nakazu-cho, Marugame, Kagawa 763-8508 Japan

Phone: +81-877-56-1255

Takuma Plant

2102-4 Takuma, Mitoyo, Kagawa 769-1101 Japan

Phone: +81-875-83–2511

Group Companies
KS Okura Co., Ltd.

Kyushu Okura Co., Ltd.

Okura Precut System Co., Ltd.
Kanto Co., Ltd.

Wuxi Okura Packing Material Co., Ltd.

Okura Sangyo Co., Ltd.

69

Saitama Okura Co., Ltd.

Okura Information System Co., Ltd.

O.L.S. Co., Ltd.

SUSTAINABILITY REPORT 2023

Okura Products Co., Ltd.

Okura House Co., Ltd.

Okura Hotel Co., Ltd.

Union Gravure Co., Ltd.

Unicharm Packaging Material (Tianjin) Co., Ltd.

Otomo Kasei Co., Ltd.

Taiho Co., Ltd.

Okura Pack Kagawa Co., Ltd.

OKURA VIETNAM CO., LTD.

CHUSAN-Cable Vision Corporation

Status of shares (as of December 31, 2022)

Ten major shareholders

Total number of shares authorized

28,021,600

Total number of shares issued

12,414,870

Number of shareholders

15,554

Directors (as of March 24, 2023)
Chairperson, Representative Director

Kazunori Takahama

Operating Officer, President, Representative Director

Susumu Kanda

Operating Officer, Executive Vice President, Director

Yoshitomo Tanaka

Operating Officer, Executive Vice President, Director

Eiji Fukuda

Operating Officer, Director

Hideki Uehara

Operating Officer, Director

Tomoo Ueta

Director (Audit and Supervisory Committee Member) * Takashi Kitada
Director (Full-time Audit and Supervisory Committee Member)

Seiji Nagao

Director (Audit and Supervisory Committee Member) * Toshio Baba

(as of December 31, 2022)

Number ofshares held

Shareholding
ratio

Sumitomo Chemical Company, Limited

963k

8.07 ％The Master Trust Bank of Japan, Ltd. (trust account)

799k

6.70 ％

Okura Kyoeikai Business Association

589k

4.94 ％The Chugoku Bank, Ltd.

582k

4.88 ％The Hyakujushi Bank, Ltd.

384k

3.22 ％

Nippon Life Insurance Company

375k

3.14 ％

Sumitomo Forestry Co., Ltd.

315k

2.65 ％

Mitsui Sumitomo Insurance Company, Limited

271k

2.28 ％

Okura Industrial Employee Stock Ownership Association

255k

2.14 ％

Yakult Honsha Co., Ltd.

251k

2.11 ％

Shareholder’s name

Corporate Information

Stock Information(Note) The Company holds 478,949 shares of treasury stock but is excluded from the list of major
shareholders above. The shareholding ratios are calculated excluding those shares oftreasury stock.

Director (Audit and Supervisory Committee Member) * Nae Iijima
Director (Audit and Supervisory Committee Member) * Yoichi Watanabe
Director (Audit and Supervisory Committee Member) * Yasuo Yoshino* Outside Directors

Distribution of shareholders by category

Distribution of shareholders by region(as of December 31, 2022)）(as of December 31, 2022)

Treasury share
3.9％
478k
Foreigninvestors

Chubu

6.7％
831k
Other
Japanesecompanies
20.8％
2,585kTotal

Financial
institutions, etc.

3.9％
485k

30.7％
3,812kChugoku

12,414k

Hokkaido

Overseas
6.7％
827k

0.3％
37k
Tohoku
0.4％
54k
Kanto

6.3％
776k

44.1％
5,480kKyushu andOkinawa
Individual investors
and others

Kinki

1.3％
164k

5.8％
716k
Shikoku

37.9％
4,705k

31.2％
3,872k(including 478k shares of treasury stock)

Basic Information for Shareholders
Fiscal year-end

December 31

Annual General Meeting of
Shareholders

Held in March of every year

Record date

Record date for voting rights at Annual General Meetings of Shareholders: December 31 (or the date that the Company may
announce in advance by a public notice as necessary)
Record date for distribution of surplus : December 31 for year-end dividends June 30 for interim dividends if paid

Shareholder register agent

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

Handling office ofshareholder register agent

4-5-33, Kitahama, Chuo-ku, Osaka, Japan
Stock Transfer Agency Business Planning Dept., Sumitomo Mitsui Trust Bank, Limited

Mailing address

2-8-4, Izumi, Suginami-ku, Tokyo 168-0063 Japan
Stock Transfer Agency Business Planning Dept., Sumitomo Mitsui Trust Bank, Limited

For inquiries

Phone: 0120-782-031 (toll-free) Opening hours: 9:00 to 17:00 (excluding Saturday, Sunday, and national holidays)
Brokerage services are available at the headquarters and branches of Sumitomo Mitsui Trust Bank, Limited.

Method of public notice

The Company will make public notices electronically on its corporate website (https://www.okr-ind.co.jp).
If an accident or other unavoidable event occurs that prevents the Company from making a public notice electronically, theCompany will make a notice on the newspaper The Nikkei.

Listed stock exchange

Prime Market, Tokyo Stock Exchange

SUSTAINABILITY REPORT 2023

70

https://www.okr-ind.co.jp/
2023.09