Creating Shared Value (CSV) by Daiken Business

01 Contribution to carbon neutrality by utilizing wood resources
Initiatives for materiality “Realization of a Resource-Recycling and Recycle-Oriented Society”

By pursuing the use of wood resources for materials, turn the living space
into “The second forest”
Social issues and needs

C Fix and store as carbon

CO2

Forests are the carbon storage that absorbs
and fixes carbon
CO 2

Grow

We conduct business activities to maximize the value

Use

CO 2

CO 2

CO 2

CO 2

Photosynthesis

The cycle to keep Felled trees
Growth protecting andmaking use
of forest

CO 2
CO 2

Industrial materials business

MaturityCO 2

By keep using timber as materials,

CO 2

CO 2

Lamination

Logs

LVL

VeneerNursery tree

Tree planting

Plant

Wood offcuts

Maximize the CO2 absorptive function
by moderately felling trees
CO 2

O2

O2

CO 2

O2

CO 2

O2

CO 2

Base materials

CO 2

O2

O2

Timber fromforest thinning

Wood chips(Virgin)

MDF

Promotion ofgreening andgrowthYoung forest

Amount of carbon storage*
Approx.

Aged forest

626,000 t-CO /year2

Amount of absorption
by photosynthesis

Amount ofabsorption/
emissions

Emissions by breathingBasematerials

Fixed carbon content

Wood chips(Recycled)

Tree age*From the frequently asked questions on the Forestry Agency’s website

Growing forest has the function to absorb more
CO 2 than matured forest. By adequately felling
trees according to the forest growth cycle andnewly planting trees, it will become possible tomaximize the CO 2 absorptive function of a forest.

Insulation board
Amount of carbon storage*

Greening andimprovementof soilApprox.

DW fiber
Woody fibers

Agricultureandhorticulture
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DAIKEN GROUP REPORT 2023

Tatami mats

GLOW EARTH

113,000 t-CO /year2

Base materials
for house flooring

Daiken Corporation was founded with an eye toward the effective use of timber as precious resources and contribution to society. Since
the foundation of the company, we have refined technologies to overcome the weaknesses of timber and use timber with zero waste anddeveloped industrial and building materials offering a wide variety of functions. Trees function to absorb CO2 during the growth process,to fix it as carbon, and to keep storing it by continuing to use them as materials. Since timber is a renewable resource, it can contribute to
the realization of a sustainable society and carbon neutrality by creating the cycle to appropriately manage and use forests. By pursuing
the sustainable use of wood resources from the three perspectives of (1) use of appropriately managed timber, (2) use of timber to protect
forests, and (3) use of timber with zero waste, we continue to create social and economic value.

Daiken Group’s Value Creation

Daiken’s strengths and value creation

CO2
it becomes possible to keep storing carbonof timber and continue to use as materials for a long time.

Carbon content that forest can store is limited.
By expanding the scenes to use timber as
various materials, it will become possible tostore more carbon while enriching people’s
living spaces.
Strategy for Value Creation

Building materials business

Form “The second forest”
by using timber

Public spaces and living spaces
House
Building

Emitted CO2
is absorbed
by forests
Amount of carbon storage*
Approx.

148,000 t-CO /year

CO2

2

CO2

Flooring

Demolition

Doors, cabinets, stairs,
and construction materials

Waste
incineration

The cycle to continue
to use as materials
for a long time
without burning them

*Fiscal 2023
Calculated in accordance with the method of calculation in the“Guideline for Labeling of the Amount of Carbon Storage Concerning Timber Used in Buildings”
by the Forestry Agency

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Data

Construction demolition timber

Creating Shared Value (CSV) by Daiken Business02 Promotion of the use of domestic timber

Initiatives for materiality “Realization of a Resource-Recycling and Recycle-Oriented Society”

Social issues and needs

Promote the use of domestic timber with special MDF that offers excellent water
resistance
Daiken’s strengths and value creation ❶The Daiken Group took advantage of the expertise cultivated as the leading flooring
manufacturer and Daiken’s unique MDF technology that offers excellent water
resistance and surface smoothness, proceeded with the development of flooring
substrates combined with domestic timber, and has made many improvements. In
fiscal 2023, while the timber procuring environment has become worse globally andas we strived to stably supply products by reviewing the procurement balance ofplantation timber and domestic timber, the usage rate of domestic timber
decreased to 45%, but we will continuously proceed with product development thatwill draw out the appeal of domestic timber.
Cross-section image offlooring substrates madefrom domestic timber

Utilization of domestic timber
for flooring substrates

Fiscal 2023

(%)
60
50
40
30
20
10
0

Approx.

23

33

2018

2019

47

%

51

11

4
2015

30

41

45

2016

2017

2020

2021

2022

2023

(Fiscal year)

Daiken’s special MDF
Plywood made of domestic timber

Expanding the scenes to utilize domestic timbers with the wood hardening technology
Daiken’s strengths and value creation ❷With Daiken’s unique WPC* technology to harden wood tissues by injecting plastics into and filling the tissues, it has become possible to offer flooringwith excellent surface strength that uses domestic natural wood for decorative surface materials. Because many domestic tree species are soft
materials, low durability in using them as flooring was an issue, but by taking advantage of this technology, we will expand the use of domestic timber
while meeting the needs of using local materials.
*WPC: The abbreviation for Wood Plastics Combination

Results of thecommercialization of local
materials with the WPCtechnology

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prefectures

WPC flooring

Inject plastic resin into surface woodfor flooring and harden it

By filling plastic resin, it demonstrates
strength against dents and scratches

New use application development of wood materials
Daiken’s strengths and value creation ❸While exploring new possibilities of domestic timber, we developed the soil improvement additive DW fiber made of fibrillated timber offcuts and to which
fulvic acid with plant growth-promoting effects is added and the wood culture medium GLOW EARTH that can create an optimal cultural environment bymaking factor substances that inhibit the growth of plants harmless under the conceived idea of using such domestic timber as wood fibers. These
products realize the resource circulation that wood harvested in a forest becomes the culture medium, helps the growth of the next plants, and returns tothe soil again and deployment to the fields of civil engineering and landscaping as well as the fields of agricultural and horticultural materials leads to newuse application development of domestic timber.
GLOW EARTH

Wood culture medium
GLOW EARTH

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Use case in a vegetablegardenDAIKEN GROUP REPORT 2023

DW fiber

Soil improvement additive
DW fiberCase of greening a slope surface by
DW fiber

03 Effective utilization of unused resources

Initiatives for materiality “Realization of a Resource-Recycling and Recycle-Oriented Society”

Daiken Group’s Value Creation

Social issues and needs

Expansion of the utilization of unused resources using non-combustible materials
that offer excellent durability
Daiken’s strengths and value creation
Daiken developed DAILITE, the world’s first new industrial material using an unused resource, shirasu (volcanic ash) as the major raw material, which has
the performance that could not be realized with conventional inorganic materials, such as lightweight, high strength, and fireproof, and started selling it in1997. In the beginning, DAILITE was mainly used as a bearing surface material to enhance strength of houses but we now propose to use it as the
non-combustible and well-designed wall materials and louver materials. By finding value in an unused resource and expanding the use applications, we
contribute to the realization of a sustainable society.

A noncombustible construction material made of
DAILITE base material GRAVIO LOUVER

Strategy for Value Creation

A noncombustible wall material with a deep
curved design made of DAILITE base material
GRAVIO EDGE

Shirasu, an unused resource available in thenatural world

04 Creating a safe, secure, healthy, and comfortable space
Initiatives for the fulfillment of materiality, “User Needs in the New Normal Era”

Improvement of the sound environment in living spaces
Social issues and needs

Data

Daiken’s strengths and value creation ❶In pursuing comfort of the living spaces, Daiken has been engaged inacoustic products since the 1980s and faced various sound issues.
Since then, with the accumulation of technologies and know-how for 40
years, we not only develop products having soundproof and soundabsorbing functions but also propose spaces to realize the optimalsound environment. In response to the fact that new issues concerningsound have recently become apparent in offices, stores, and medical
facilities, we expand the product lineup that corresponds to the needsof each facility. Through the resolution of sound issues that significantly
influence comfort, we will realize more comfortable living spaces.

A soundproof room corresponding toplaying a musical instrument

A ceiling material for a soundproof room
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Creating Shared Value (CSV) by Daiken Business
Creating a safe space to live together with the elderly
Social issues and needs

Daiken’s strengths and value creation ❷Based on our ideas and technologies for living spaces proven throughour work, Daiken is committed to manufacturing from the perspective of
all users, including elderly people, their families, and caregivers. In recent
years, we have improved the mechanism that can finely respond to theneeds that vary according to facilities, such as elderly facilities andhouses that are considerate of home care, and have been deploying
comprehensive product lines that are safe and have functionality.
Cases of adopting the building materials
from the OMOIYARI SERIES for the living
spaces where elderly people live

A wide sliding door that can be easily
accessed by a wheelchair

Creating spaces where children can spend the time safely
Social issues and needs

Daiken’s strengths and value creation ❸We thoroughly examined the performance required for the area arounda door in a childcare facility where the risk of injury is particularly highand developed the door dedicated to kindergartens and childcare
facilities, while taking advantage of the expertise in door manufacturing
cultivated from past houses and elderly facilities. We will support a wide
variety of problem solutions required for childcare facilities, such as
improvement of safety and comfort and further reduction in the nurseryteachers’ burden by using Daiken’s unique technologies and diverse
products.

Won the KIDS DESIGN AWARD*Designs to support comfortable raising of children

OMOIYARI KIDS DOOR
A door that is considerate ofchildren’s safety

Ceiling sound absorbing pane KIN TONE

Seismic resistance / Strengthening of disaster prevention
Social issues and needs

Daiken’s strengths and value creation ❹Daiken has contributed to improving the aseismic performance ofJapanese wooden houses through the development of DAILITE, aninorganic bearing surface using mineral fibers and an unused resource,shirasu (volcanic ash) as the major raw materials. By deploying not only
bearing surface materials but also a number of product lineups thatoffer excellent non-combustibility and fireproof property, we have beenpromoting the strengthening of disaster prevention. With our uniquebase materials, we will improve safety of various living spaces, such as
wooden houses and public and commercial buildings.

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DAIKEN GROUP REPORT 2023

Number of households installing
DAILITE (cumulative) *Estimated by our company

1,050,000

Approx.

(As of the end of March 2023)

1,000,000

Approx.

(As of the end of March 2022)

DAILITE MSExpansion of the antiviral products
Social issues and needs

Daiken Group’s Value Creation

Daiken’s strengths and value creation ❺We focused on the antiviral function in the wake of the outbreak of thenovel influenza in 2009 and started working on its development in 2011.
In the following year, we put the function to practical use as the antiviralfunction BIOTASK* ahead of the industry. We respond to the needs in
the COVID-19 crisis, expand the product variations having the antiviralfunction, and proceed with the initiatives aimed at reviewing theantivirus mechanism and contributing to the reduction of the threat ofvirus.

A product having the antiviral function*BIOTASK: Our unique name for the antiviral function (our registered trademark)Microorganism measurement room in the
R&D Center

Creation of communication spaces filled with greenery
Social issues and needs

Strategy for Value Creation

Daiken’s strengths and value creation ❻We started promoting the new vegetable garden system from April
2023. This system enable people to grow vegetables easily on roof ofbuildings by using our product, GLOW EARTH. GLOW EARTH is awood culture medium made in Japan, it is lighter than soil, not easy to
get hands dirty, and it can be disposed as combustible waste. We will
aim to create open-communication spaces filled with greenery bypromoting this system.
Roof vegetable garden (Image)

Wood culture medium GLOW EARTH

05 Development of labor saving type products and techniques
05 Initiatives for the fulfillment of materiality, “User Needs in the New Normal Era”

Contributing to the anti-seismic ceiling by developing the labor-saving construction
techniqueSocial issues and needs
Data

Daiken’s strengths and value creation
To particularly respond to the needs of making the ceilings of large
public buildings anti-seismic after the Great East Japan Earthquake,
Daiken developed a unique ceiling construction technique that makes it
possible to make the ceiling anti-seismic while saving construction time
and work. With this construction technique, we reduced theconstruction time and labor by approx. 25% compared to making theconventional ceiling anti-seismic. We also developed a ceiling system
exclusively for hallways, which will become the evacuation route at thetime of disaster.
We will aim to further realize the saving construction time and work for
not only ceilings but also building materials for renovation from theperspective of a new construction technique.

Rate of reduction of construction
time and labor compared tomaking the conventional ceiling
anti-seismic: *Estimated by our company

Approx.

25%
Our own anti-seismic ceiling construction
technique

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