█ The Cycle of Goodness® and Value Creation

Message from the President

Hiroaki Otani
President,
YKK Corporation

11

This is YKK 2023

YKK Philosophy & Sustainability

Value Creation

Business Strategy

Platform

Data

Under the YKK Philosophy of the Cycle of Goodness®
The Cycle of Goodness places sustainability at
the core of management to satisfy needsof our customers and local communities.
Aiming to be a “social good company” that serves not only the natural environment but also the social
good and co-exists in mutual prosperity with all — the Purpose of our company is to practice the Cycle ofGoodness to satisfy the needs of our customers and communities and help build a sustainable society.

In a constantly changing businessenvironment

6th Mid-term Management Plan and
FY2022 Results

Over the two years since the 6th Mid-term Management
Plan was launched in FY2021, the business environment
surrounding YKK has changed dramatically. The worldis experiencing change beyond anyone’s expectations,
illustrated by the COVID-19 pandemic. At the sametime, the SDGs, which have spotlighted environmental
and social issues on a global scale, have become a wordthat we all hear on a daily basis. I also sense interest in
eliminating any wastefulness is higher than it has everbeen before.
For YKK to remain a company supported by its
customers that continually fosters sustainable growth in
this business environment, we must become a company
that can satisfy the needs of our customers better thanever before. To do this, I believe it is important for YKK to
not only satisfy customer demands but always identify
and propose new needs. We shall also strive to continuallycultivate new customers.
The YKK Philosophy of the Cycle of Goodness,based on the idea that “no one prospers without rendering
benefit to others,” is in and of itself sustainability founded
in a philosophy of co-existence and co-prosperity withour customers and stakeholders. To continue to provide
the “social good” required by society after the COVID-19
pandemic, we will realize better products at a lower costand greater speed, more sustainably, which I hope will
foster sustainable growth both for YKK and society.

Under the management vision “Technology Oriented Value
Creation,” which was inherited from the previous midterm management plan, the 6th Mid-term Management
Plan aims to realize “Creativity to Realize a Sustainable
Society” by harnessing “product appeal and proposal
capabilities” and “technological and manufacturing
capabilities.” In addition to these four strengths, thecompany is committed to utilizing “diverse human assets”
that transcend differences in age, gender, nationality andother factors.
During the second year of the Mid-term Management
Plan in FY2022, the Fastening Business faced the
Ukrainian crisis and other uncertainties in markets as well
as more rapid global inflation. The future of the economy
only became more uncertain in the second half of theyear, while the retail garment market especially in Europe
and the U.S. saw dwindling demand and increasing retailinventory. Despite the declining sales volume causedby this business environment, we were able to increase
revenue and profits. Net sales were 380.5 billion yen
thanks to proper price revisions in line with inflation andthe foreign exchange impact due to depreciation of theJapanese yen, while operating income was 43.7 billion
yen thanks to continual cost reductions.
During the COVID-19 pandemic, YKK improved
logistics, reduced costs and undertook many other efforts
to solve problems on various fronts to be ready andThis is YKK 2023

12█ The Cycle of Goodness® and Value Creation

One important part of this endeavor is speed. This is
an important point from the perspective that sustainability
is to eliminate wastefulness. Speed is also an importantelement to enhance competitiveness. I see this fiscal
year as one that will test whether YKK can become acompany that can immediately adapt to the requirementsof customers and measure how much the company canincrease non-price competitiveness. This is where we will
focus our efforts.
Additionally, we have added “delivering turnaroundtimes demanded by customers” and “thorough health andsafety management” as two new initiatives to the midterm direction. At the very least, we will do everything
we can to improve satisfaction from a customer-oriented
perspective while ensuring safety for every employee
and person working together with YKK. In FY2023, theFastening Business will strive to reach its net sales targetof 396.2 billion yen and operating income target of 49.7
billion yen.

waiting after demand recovers. I know we will continue tofully exhibit these strengths in the future and hope that
YKK can satisfy the needs of our customers and society
in all respects while placing sustainability at the core ofmanagement.

Targets to be Achievedin the Next Two Years
The 6th Mid-term Business Policy advocates “sustainablegrowth under new normal – responding to diverse
customer needs and acquiring customers.” Looking aheadto the new normal after the COVID-19 pandemic, we cananticipate customers will require the “right time, rightmaterial, and right amount” more than before. To satisfy
these needs, YKK will continue to work exhaustively on
three initiatives which have been raised as important
points of business execution under the new normal:
Promote sustainability, strengthen cost competitiveness,and promote digitalization.
As the second step to the organizational restructuringthat has been underway since FY2021, we will establish a
Business Strategy Division to handle essential marketing
functions. We have also restructured the Global Sales
Headquarters into an organization dedicated to strategies
by sales function and moved the headquarters’ functions
to Vietnam, which is the at the forefront of overseas
garment manufacturing. All these initiatives have one
unified goal to serve our customers. This organizational
restructuring will reflect the needs of customers
worldwide in sales strategies and leverage the strengthsof our in-house integrated production system for productmanufacturing equipment, which in turn should help
further increase customer satisfaction.

Reforms for Promoting Sustainability
YKK announced its support of the Task Force on
Climate-Related Financial Disclosures (TCFD) in 2019.
Our support of the TCFD will strengthen the disclosureof information about the progress toward the YKK
Sustainability Vision 2050, which was establishedin 2020 as a roadmap for YKK to become climate
neutral (no GHG emissions) by 2050. In the FY2022
Supplier Engagement Rating by CDP, an international
environmental non-profit organization, praised us for our
initiatives to reduce GHG emissions throughout our entire
supply chain, selecting YKK as a company for its Supplier
Engagement Rating Leaderboard.

Fastening Business 6th Mid-term Business Plan (FY2021-24) Progress
Net sales (100 million yen)

Operating income (100 million yen)

Zipper units sold (100 million)
121.0

102.9

100.8

92.9

95.5

77.9

3,021

3,962

3,805

3,481

3,949

2,473

6

640
423

362

437

497

60

2019
Sales
OI Ratio

FY2020*1

FY2021

FY2022

FY2023 planned

FY2024 planned*2

2.4%

12.2%

11.6%

12.5%

16.2%

6th Mid-term Business Plan
*1 After adjustment
for reorganization

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This is YKK 2023

*2 Annual plan establishedin FY2021

YKK Philosophy & Sustainability

Value Creation

Business Strategy

Platform

Data

Key Points of Business Execution Under the New Normal
Promoting sustainability●

Promote carbon neutrality and eco-friendly product development

Strengthening cost competitiveness●Strengthen exhaustive cost competitiveness of core products

Promoting digitalization●

Solve customers’ problems and reform employees’ ways of working

In the development of products, I am highly awareof the need for YKK to satisfy diverse customer needs,
including those related to sustainability. As part of ourrecent digital transformation (DX) initiatives, we havereinforced human assets versed in robotics and AI
technologies. Our plan aims to actualize smart factories
that run around the clock every day of the year to solidify
a new business model that can adapt with explosiveness,even when responding to sudden orders from customers.
YKK is also seeking out diverse human assets inaddition to those versed in digital technologies basedon our “Forest Management” ideal to respect each andevery employee. For example, employees active at the
Global Sales Headquarters in Vietnam have diverse
local and national backgrounds not only in Vietnam but
throughout Asia and the rest of the world. In the future,
we will continue to further our human resource systems
so that every human asset familiar with local languages,
business practices, and market conditions can reach
their full potential. In 2021, we established the Diverse
Human Assets Promotion Committee, which I chair, topromote various measures to further diversify our humanresources, so that all employees can utilize their own
abilities and work hard together in a friendly competition
for the right positions. Moreover, YKK has consistently
hosted roundtable meetings that emphasize talks
between employees and management since 2008.
We have also made progress diversifying ourcorporate governance. As the first woman to serveas an outside director, Erica Okada was appointed inJune last year and has helped build systems that help
women to more actively participate as well as enhancesustainability. YKK is also increasing the number of vicepresidents from operating companies overseas this fiscal
year to further strengthen a global mindset within theorganization.
The important part of these reforms is to not only
illustrate performance numerically but also gauge how
happy customers are through YKK products and services.
I hope to always keep these various perspectives in mind
as YKK continues to evolve as a corporate enterprise.

As a Company Indispensable to Society
Amid all the ongoing changes both inside and outsideof the company that I have mentioned thus far, YKK isonce again returning to its origins and announced a newcorporate logo in March 2023. The tagline “Little Parts.
Big Difference.” that accompanies the logo signifies thecommon wish of YKK employees across the world: “Little
parts, but big value.”
Whenever we develop our business in any country/
region, we will co-exist with local communities and society
at large as well as provide new value in the hope everyone
is glad YKK has become part of those communities. The
principles YKK has held since its founding live on in ourbusiness activities today. We will continue to put the Cycleof Goodness into practice with the hope of always being acompany indispensable to society.

This is YKK 2023

14█ The Cycle of Goodness® and Value Creation

Executive Dialogue

Further Evolving Global Management
based on the Cycle of Goodness®
YKK currently does business in 72 countries and regions around the world guided
by the YKK Philosophy of the Cycle of Goodness. In the pursuit to further evolveglobal management as society changes dramatically, Erica Okada has provided
invaluable advice on the ideal form of global management on the basis of the YKKmanagement principles since her appointment as an outside director in 2022.

Erica Okada

Masayuki Sarumaru

Outside Director, YKK Corporation
Professor, Department of International Corporate Strategy,
Graduate School of Business Administration, Hitotsubashi University

Chairman, YKK Corporation
Director, YKK AP Inc.

Dr. Okada received her bachelor’s degree in economics from Princeton
University, an MBA from the Tuck School at Dartmouth University, anda PhD from the Wharton School at the University of Pennsylvania. Her
industry experience includes investment banking at Merrill Lynch and project
finance at GE Capital. She has held faculty positions at the University ofWashington, University of Hawaii at Manoa, and at the Wharton School,
University of Pennsylvania. Her research has also been published extensively
in top-tier peer reviewed academic journals, including the Journal ofConsumer Research, Journal of Marketing, Journal of Marketing Research,and Marketing Science.

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This is YKK 2023

Born in 1951. Graduated from Sophia University. Joined YKKCorporation in 1975. After several positions, including at YKK (U.S.A.)
Inc. and as head of the Fastening Products Group Fastening Business
Global Marketing Group, Mr. Sarumaru was named YKK Senior Vice
President and Fastening Products Group Director in 2007. In 2008,
became YKK Director and Executive Vice President, Fastening
Products Group Director. In 2011, became YKK President andRepresentative Director. In 2017, named YKK Vice Chairman of theBoard. In 2018, became YKK Chairman of the Board (current) and in2020 YKK AP Director (current).

YKK Philosophy & Sustainability

Value Creation

Cycle of Goodness andSustainability Core to YKKSarumaru Today, I hope to hear your thoughts onwhat global management should be, based on the
management principles. In the course of his businessactivities, Tadao Yoshida, the founder of YKK, paid
utmost attention to the fact that as an importantmember of society, a company survives throughcoexistence. When the benefits are shared, thevalue of the company’s existence will be recognizedby society. He considered ways to ensure mutual
prosperity and believed that using ingenuity andinventiveness in business activities and constantly
creating new value would lead to the prosperity ofclients and business partners and make it possible
to contribute to society. This idea is referred to as
the Cycle of Goodness, and has always served as thefoundation of our business activities. I have no doubt
the Cycle of Goodness acts as a significant driving
force in these changing times. That is why I am striving
to raise employee awareness more than ever before.
First, I would like to pose a question to Dr. Okada.
Could you please tell us your impression of the Cycle ofGoodness as an outside director?
Okada The philosophy is simple and clearly worded,
which makes Cycle of Goodness easy to understandfor our stakeholders in Japan and around the world.
It isn’t just a mantra. The philosophy lies at the coreof YKK’s business activities. Frequent references
are made to the Cycle of Goodness at the Board of
Directors meetings. The other day when I had an
opportunity to meet and greet the women who work
at YKK, they brought up the Cycle of Goodness inour conversations on multiple occasions. As far as I
know, management doesn’t preach the philosophy, buteveryone takes ownership of the Cycle of Goodness.
Sarumaru I think that the reason YKK employees act
and make decisions founded in the Cycle of Goodness
on a daily basis is because the Cycle of Goodness
is not just some simple slogan but a pragmatic
philosophy that grew out of business activities donein a harsh business environment. I am glad to have the
Cycle of Goodness as a universal philosophy when
expanding businesses globally because it goes beyond
diverse values to evokes universal empathy.

Business Strategy

PlatformDatabeyond that to specifically highlight the virtues
continuously created by that which can be maintained
for a long time, including the environment and humanrights. It’s remarkable that the Cycle of Goodness has
been the cornerstone of YKK since long before thiscurrent surge in interest in sustainable practices.
I think we can do a better job of communicating
to, especially our outside, stakeholders how YKK
is living up to the philosophy, and putting the Cycleof Goodness into action. I want more outside
stakeholders to know about the virtues that YKK has
created, with palpable demonstrations and examples.
Sarumaru I believe that has been a challenge for us. In
2019, we established the Sustainability Department
to strengthen our initiatives and better communicate
with customers and all our other stakeholders, but thefact is that it still is not enough. We will continue towork to more actively disseminate information.

Diversity Exemplified
by the Board of Directors
Sarumaru Dr. Okada, you have extensive experienceoverseas. As an outside director, what do you think
about our corporate governance system? Whenlooking at YKK from the perspective of more global
management and diversity, is there anywhere you see
a lack of diversity, such as our lack of a non-Japanese
director on the Board of Directors?

It is true that there are no non-Japanese
directors, but the YKK Board is quite global. Manyof us have lived and worked in different regions of
the world, and we all have varied backgrounds andexperiences, which enables colorful discussions anddebates. The Board respects differences in opinions,which in part results from this diversity. For example,
in a previous vote about a certain resolution, I was the
only one against the proposal. None the less the otherdirectors encouraged me to express my dissenting
opinion and the grounds. Our Board of Directors
meetings are open, fair and productive. (They also
always start early, so if you arrive on time, you’re late!)
Okada

Okada Cycle of Goodness is a broad philosophy
that encompasses sustainability. Sustainability has
become a hot topic in recent years, but sustainability
just means that which can be maintained for a longtime without interruption. Cycle of Goodness goes

This is YKK 2023

16█ The Cycle of Goodness® and Value Creation

Globalization and Localization of
Operating Companies
Sarumaru I understand that another challenge of a
global organization is the localization of management
at operating companies overseas. Currently, it reallydepends on the region whether or not local people makeup top management. What do you think about this?
Okada I don’t think local talent per se is absolutely
necessary in top management. Expertise in local
markets and knowledge of local customs areimportant, and it would tend to be local people whohave those skills. But it need not be, as managers
who are not born and raised locally could acquire
those skills, or may already possess those skills.
Furthermore, such skills are necessary but not
sufficient to be successful in top management. Thereis also merit in deploying top management fromJapan or elsewhere to cultivate young and up-andcoming talent. At whatever level of management, it
is indispensable to incorporate the experience andexpertise of local talent.

Sarumaru Your participation in the Nomination andCompensation Committee has a vital role equivalent
to that of the Board of Directors. What are yourimpressions of the Committee so far?
Okada My role as an outside director on the
Nomination and Compensation Committee is to makesure there is proper deliberation and approval on
matters, such as when a candidate is appointed as adirector. To date, I think the Committee has undertaken
this process fairly.
Sarumaru Thank you. YKK has been aware of theimportance of corporate governance for listedcompanies since very early on. In 1999, we adopted
the Officer System that separates businessexecution and oversight functions of management.
The Nomination and Compensation Committee musthave at least one outside director as a member,and it does not allow officers involved in businessexecution to participate. Currently, the Committee
also has two outside directors. These measures ensure
the Committee can make decisions independent ofbusiness execution by the officers who report to theBoard of Directors.

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This is YKK 2023

Sarumaru I agree. Although it may not be necessary
to have local people in top management roles,
management cannot succeed without human assets
who deeply understand the culture and backgroundof each country and region. Especially in recent years
as the world faces more uncertainty than seen before,
I think operating companies need to have a greater
sense of urgency due to the impact it has on business.
Okada I have read and heard that founder Tadao
Yoshida told employees deployed overseas to “Be a
Native.” This exemplifies the unique YKK approach tomove together with the community. The YKK corporate
flag flies alongside the local country’s national flag at
YKK factories overseas. The Japanese national flag is
not raised because the roots are set in the community,
not Japan. It’s a symbol of YKK’s strong commitment
to localization. As I said earlier, the ability to sharethe same core values is what has made YKK’s global
expansion possible.
Sarumaru Thank you. As the ideal approach, I would
like to develop human assets who share important
universal values regardless of their country or region
and who have gained management experience in acountry or region other than their own to nurture abroad view before joining YKK management at thehead office. I plan to broaden penetration of ourprinciples and promote even greater human asset
development.

YKK Philosophy & Sustainability

Value Creation

Acknowledging Diverse Work Styles
Sarumaru You are the first woman to serve as adirector at YKK. Could you tell us a bit about how
you see the active participation of women in theprofessional world? In Japan, there are still only a
few women who choose a career in technology andvery few that play a central role in the manufacturingindustry. I would like to see more women gain a wealthof experience, even outside the work at operatingcompanies overseas. The challenge includes how to go
about supporting the career development of women.
Okada Simply by the numbers, YKK may not havea very high ratio of women in management, but I
don’t think we should focus on numerical targets.
Ideally we would offer a wide range of career options,regardless of gender, and let people decide how todesign their own work style and manage their own
work-life balance. Some people may prefer to get work
done reliably and produce results in the long-term.
Some people may prefer to work in specialized jobs
to produce specific and/or immediate results, whileraising children or taking care of their families. I think
YKK would have a need for both types of work andworkers.
Sarumaru I see. At the head YKK office in Japan, weonly have a few non-Japanese employees, and I feel
we struggle to be international and diverse.

Business Strategy

Platform

Data

Becoming the Company of Choice
for Consumers
Sarumaru Lastly, could you tell us what expectations
you have for YKK in the future?
Okada YKK has a strong brand. The product isinterwoven into the fabric of people’s lives: I can’t
think of anyone in the world who does not have a YKK
in their possession. YKK can take the next step toenhance the brand power so that consumers look for
YKK when they go shopping for clothing, for example.
I want consumers to choose an item because it has a
YKK zipper on it. As a marketing professor I hope toplay a role in making that happen.
Sarumaru Thank you. I am sure technology will beessential in making that happen. I hope to ensure YKK
will continue to be a technology company that always
provides unparalleled technology. When I was in mytwenties, I often dreamed about YKK becoming such a
big name in zippers that I could open a dictionary to theword “zipper” and see the three letters “YKK.” That isstill my dream. YKK will continue to propel itself forward
toward becoming a company chosen by consumers
while taking advantage of the advice that you sharedwith us today in management. Thank you very much forsharing your valuable insights with me today.

Okada Diversity is important at the employee
level too, but we want meaningful diversity. Peopleof diverse backgrounds bring diverse skills andexperiences to the table. At the right level ofdiversity, people still share the same core values,
but their differences foster creativity and ideation.
Diversity can be in national origin or gender, as wehave discussed, but also academic and professional
training, family composition, age, etc.
Sarumaru That is a very important point. To properly
respond to the changing times, I think it is important todevelop human assets who have new knowledge andskills, such as a proficiency in DX and IT. Whether in
corporate governance or human asset development,
I would like to spearhead further growth as a globalorganization by identifying what we should protect andwhat we should change.

This is YKK 2023

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█ The Cycle of Goodness® and Value Creation

The History of YKK’s Value Creation“Better products at a lower cost and greater speed, more sustainably”
The history of YKK is also a history of technological innovation to provide customers with better products.
YKK will continue its challenge to keep creating new value for our customers and for society.

1934-

1959-

Foundation to Establishmentof the Integrated Production System

Global Expansion

1934

1950

1959

1974

Foundation

From a handicraft industry tomechanization

Global expansion

Launched integrated
production system overseas

Founded in Nihonbashi Kakigara-cho,Tokyo (at center of photo); engaged
in the processing and sale of metal
zippers

Four zipper chain machinesimported from the U.S.

Zipper manufacturing plant exported
to India
Opened first overseas base in
New ZealandFirst overseas integrated zipper
production plant

YKK (U.S.A.) Inc. Macon Plant

1939

1952

1964

1992

YKK utility model No.1

Establishment of a fully
integrated production system

Achieved high-speed
manufacturing

Expansion into growing
markets

Metal slider for zippers

Predecessor of the former Machinery& Engineering Group launched

Commenced manufacturing using
the YKK-CM6 (certified MechanicalEngineering Heritage*1)

Full-scale base for expansion into
China

1946
YKK registered asa trademark

Shanghai YKK Zipper Co., Ltd.

Zipper stamped “YKK”

1953

1994

YKK patent No.1

Formulated the YKK Group
Environmental Pledge

Intermittent chain production
machine developed

The Provision of Value Through Products and Technology
1952

1961

1966

1983

2000

Nylon zippers

Delrin zipper(current VISLON®)

YZiP®
Metal zipper

Airtight and watertight zipper(current PROSEAL® zipper)

EXCELLA®
with fully polished elements

1958

1960s

1980s

CONCEAL®
a zipper in which the element
is not visible

Recycling ofplastics begun

The recycling of yarn
from internal yarn
waste begun

1994

2016

NATULON®
made from recycled PET plastic

ECO-DYE®
a dye technology thatuses almost no waterin the dyeing process*Shows the fiscal year of the undertaking, development, commercial launch, trademark registration, or receipt of award

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This is YKK 2023

YKK Philosophy & Sustainability

Value Creation

Business Strategy

2001-

Platform

Data

2021-

New Value Creation

A New Organization for “One YKK”

2011

2017

2019

2021

International-level quality
assurance system

New forms of collaboration

Established YKK Vietnam
Co., Ltd. Ha Nam Plant

Restructuring of YKK
organization and overseas
regional management system

Registered Japan’s first “fire walled”
third party conformity assessment
body*2

Launched inter-company joint
development

2023
Organization restructuring
aimed at further boostingcustomer satisfaction

The former Machinery and EngineeringGroup, Analysis Technology Center

Joint development with JUKI Corporation

2014

2017

2020

2023

Received the Porter Prize
as a global leader in zippers

Aiming for full automation

Formulated YKK
Sustainability Vision 2050

Introduction of the new YKKCorporation logo

Efforts made to achieve smart,digital facilities

Advanced factory robotic automation
center opens

New plant using the latest systems

New Business Strategy Division;
Global Sales Headquarters
restructuring and moving of
headquarters’ functions to Vietnam

Aiming to achieve climate neutrality
by 2050*1 Items that made contributions of historical significance to the development oftechnology and industry in Japan. They include machines, equipment, and related
facilities and documents, which are considered cultural heritage for passing on
to future generations. They are certified by the Japan Society of MechanicalEngineers (JSME).
*2 The first testing laboratory in Japan to be registered by the U.S. Consumer
Product Safety Commission (CPSC) that can ensure the analytical value of leadcontent in products.

2018

2019

2020

2021

QuickFree®
a zipper which contributes to safety
and security for children throughenhanced operability

AiryString®
a tapeless zipper

NATULON® Ocean Sourced™
a zipper uses ocean-based
plastic waste

NATULON Plus®
with increased
ratio of recycledmaterials

Magnet

2019

2019

2020

AcroPlating®
a new plating technology for brassthat eliminates the use of conventional
chemicals from the brass plating process

GreenRise®
a zipper which uses a plant-based polyester

VISLON® with
Magnetic Closurea zipper that closes
using magnetic force

This is YKK 2023

20█ The Cycle of Goodness® and Value Creation

Product Appeal & Proposal Capability

Responding to Diverse Customer Needs

The Teachings of YKK Founder, Tadao Yoshida“Make Just a Bit More Effort,
If Only Paper Thin”
Everyone probably has dreams for tomorrow and goals for the future. Dreams
and goals can be held by anyone irrespective of their age. Their size and scope
differ from person to person, but there is one thing that does not change:
making an effort is indispensable for making a dream come true. However,satisfactory results cannot be achieved just by making an ordinary effort.
(Omission) This can be said of companies as well. What becomes necessary is
the making of just a bit more effort, even if only paper thin. After doing yourbest at work, if you add just a little bit more effort on top of it, even just asingle sheet’s worth, then after ten or twenty years, it will add up and make ahuge difference.
Centennial Commemorative Publication
From Tadao Yoshida, Founder of YKK, and the Cycle of Goodness Management Philosophy

Toru Shikita

At times when I must overcome surmountable obstacles,
I have found moral support in the weight of the “one more sheet ofeffort” teaching.

Vice President
Global Sales Headquarters

Expanding the range of products in the eco-friendly
NATULON® series
YKK has striven to develop eco-friendly products before sustainability
ever became such a hot topic. In 1994, we formulated the YKK Group
Environmental Pledge and developed eco-friendly products, including
NATULON® Chemically Recycled zipper made using recycled PET in thetape. We have been focused on expanding the number of products that use
sustainable materials during the 6th Mid-term. We will make NATULON® acore product with the goal of switching 100% of the textile materials usedin fastening products to sustainable materials by 2030, which is a target
advocated by the YKK Sustainability Vision 2050. In FY2021, we also
released NATULON Plus® zippers, which have a greater ratio of recycledmaterial than NATULON® zippers. By expanding sales of these products, wewill cut CO2 emissions and petroleum-derived resource usage even further.
YKK continually develops new products as one avenue to broaden
the NATULON® series. In 2020, we developed the NATULON® Ocean
Sourced® zipper as a product using ocean bound plastic as the main
raw material, and in 2022, we developed the AquaGuard® NATULON®
zipper that uses recycled PET for the tape of water-resistant zipper. YKK
will continually expand its product lines and respond to customer needs,
which will help realize a sustainable society.
Top: NATULON®
Bottom: AquaGuard® NATULON®

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YKK Philosophy & Sustainability

Value Creation

Financial

Related capital

YKK quality
and brand strength

Business Strategy

Platform

IntellectualSocial andrelationship

Manufactured

YKK trademark
registration:

177

Data

Human

NaturalDevelopment locations:
GMG* etc.
“One YKK” capabilities

countries/regions

38 locations/
Employees:

927 people

5,749 patents/
utility models*Global Marketing Group

Digital Showroom(Figures as of March 31, 2023)

Increasing sensitivity to environmental changes and capitalizing on speed and on-site capabilities
Our goal is to identify issues our customers have not
yet noticed to help propose products and solutions
founded in the Mid-term Business Policy to respond todiverse customer needs and acquire customers. The
only way to find issues that our customers have yet tosee is to visit their sites and search for these issues
ourselves. In April of this year, YKK moved its Global
Sales Headquarters’ functions from Japan to Vietnam,
which has a large cluster of companies that do
business in its own small garment industry. This movelets us immediately identify how customer needs andsites are evolving firsthand. As with the organizational
restructuring in FY2021 that integrated sales andproduct development, this relocation of the Global
Sales Headquarters to Vietnam further accelerates
the speed it takes from identifying a need tocommercializing a product. In addition to more quickly

developing and broadening sales of eco-friendly
products that adapt to the ever-higher demand forsustainability today, YKK will realize the integrationof manufacturing and sales based on the strength of
its integrated production system. This will reduce theenvironmental impact of our manufacturing as well as
respond to other needs.
Human assets are the foundation that supports acompany. We have also discovered through exhaustive
analysis that diversity is the key to eliminating thestress in customer communication involved withexpanding businesses globally. This makes thedevelopment of human assets who have diverse
experience and cultural backgrounds essential. The
Global Sales Headquarters’ will provide opportunities
to enhance our leadership while gauging global
markets and diversity worldwide.

Bringing out new possibilities in design andproductivity through the AiryString® tapeless zipper
JUKI Corporation and YKK have been moving forward with a collaborative
development project sharing independently owned technology andknowledge. This joint venture developed the AiryString® zipper in 2019as a tapeless zipper in addition to a dedicated sewing machine that can
sew zipper elements directly to cloth. Fusing zipper and cloth in this way
not only helps create broader design possibilities but also eliminates
tape, which reduces the weight of final products. This innovation
streamlines sewing processes in a way that we can expect will contributeto the garment industry. To expand the use of this revolutionary zipper,
YKK entered into a joint research project together with Bunka Fashion
Graduate University in 2022. This collaborative partnership aims to not
only commercialize AiryString® but also have students research patterns
and sewing methods in a primarily academic environment. As part ofour long history supporting the education of fashion students, we havehosted the YKK Fastening Awards since 2001 as a design competition
for students. Since the 20th YKK Fastening Awards (2020), the JUKI
Corporation has also presented a sewing machine as an additional award.

Top: AiryString®
Bottom: Project results are displayed at the YKK Digital Showroom
This is YKK 2023

22

█ The Cycle of Goodness® and Value Creation

Technology & Manufacturing Capability

Aiming to Evolve the Philosophy ofIntegrated Production
The Teachings of YKK Founder, Tadao Yoshida“Never Neglect the Studyof Merchandising”
Knowing the products sold, remembering their varieties, and learning their
origins is the basis for creating a more proactive, heartfelt relationship withcustomers, as the employee would be able to recommend good products andmethods to customers. There is no doubt that customers would appreciatesuch conduct. That leads to the growth of a company.
Centennial Commemorative Publication
From Tadao Yoshida, Founder of YKK, and the Cycle of Goodness Management Philosophy

Yoshimine Kobayashi

As someone involved with manufacturing, I always keep thisteaching in mind so that I can aim for the next level.

Director
Executive Vice President, Manufacturing &Engineering Division

YKK integrated production
Quality and Environment
Marketing and
Product Planning

Product
Development

Materials Development andProcessing Technology

Manufacturing
Technology

Production

Equipment andLine Development

Sales

Customer Service

Machinery andMold Manufacturing

Analysis and Simulation
YKK has achieved an integrated production system that encompasses materials, manufacturing equipment, and products. From elemental
technologies, such as those for developing metal, fiber, and plastic materials, and green recycling technology to the establishment of logistics,
sales, and manufacturing systems, YKK has established a process that enables the stable provision of products of a quality sought by its
customers, anywhere in the world.

23

This is YKK 2023

YKK Philosophy & Sustainability

Value Creation

Financial

Related capital

The philosophy ofIntegrated Production

Business Strategy

Platform

IntellectualSocial andrelationship

Manufactured

Total of the 6th Mid-term(FY2021 to FY2024)
Investment Plan

124.5 billion yen

Sustainability-related
investment FY2023 (plan)

FY2023 digital
investment (plan)(capital investment)(capital investment)

8.6 billion yen

1.5 billion yen

Data

Human

Industry-academia
partnerships

NaturalRobust supply chains(Figures as of March 31, 2023)

Incorporating the customer perspective and increasing on-site capabilities and creativity in manufacturing
Over the first two years of the current Mid-termManagement Plan, we have been able to focus on
the medium-term direction: Thorough Pursuit of Cost
Competitiveness. We have typically standardized ourmachines while expanding our businesses globally,
but this new direction has enabled us to build optimal
manufacturing lines while having various machine
options to sufficiently drive manufacturing capabilities
that adapt to the business environment in each country
and region. Over the next two years, we will capitalizeon the benefits of past capital investments and focus
on further strengthening customer services. Improving
quality cost and on-time delivery performance (QCD)
is fundamental to our approach, but I feel the needsof customers related to on-time delivery performance
are not only growing but diversifying. By relocating the
Global Sales Headquarters’ functions to the front linesof the garment industry in Vietnam, YKK can maximize
the relationships between the operating companies

overseas and plants as well as respond with technology
and manufacturing capabilities by more quickly
receiving feedback from a wide range of customers.
YKK integrated production to develop and produce
everything from its own products to manufacturing
equipment is what will make this initiative a success.
Currently, Kurobe and other plants are striving tobuild non-stop/unmanned production lines. We willfurther evolve YKK technology while incorporating
new technologies into our philosophy of integrated
production. Our future goal of building a truly “smart
factory” will go beyond in-house efforts to encompass
our customers and the rest of the value chain. To dothis, on-site manufacturing capabilities and morecreativity in development as well as enhancements
and reforms are a must, which requires YKK tosimultaneously train national staff as well as improve
the skills of global human assets in technical fields.

For medium- to long-term value creation:
Technology cultivation at TIC
The Technology and Innovation Center (TIC) is a new research anddevelopment hub established during the YKK organizational restructuring
undertaken in FY2021. To actualize our 6th Mid-term Management Vision
of “Technology Oriented Value Creation,” TIC is pursuing technologicaldevelopment from a medium- to long-term perspective directly linked
to strengthening the competitiveness of both the Fastening and APBusinesses.
In particular, YKK is developing sustainability technologies to achievea circular economy. This includes the development of mono-materials,
material and carbon recycling, and bioplastics. We will build development
systems that integrate expertise across the board from organic, inorganic,
and catalytic chemistry to supercritical and chemical engineering in orderto research and develop technologies that can sort and recycle unused
and recycled resources as well as synthesize functional materials withhigh efficiency.

This is YKK 2023

24

█ The Cycle of Goodness® and Value Creation

Diverse Human Assets

Strengthening Human Assets Foundedin Forest Management
The Teachings of YKK Founder, Tadao Yoshida“The lazy talk big!”
Using his Toyama dialect, Tadao Yoshida said of those who never go to thefactory, but just sit at their desks pontificating and giving out orders, “The lazytalk big.” Not just sitting at his desk, he knew the importance of going to thefactory to think, and he would go himself and speak to the workers in the plant.
From “Tadao Yoshida’s Thoughts on Technology”

Satoshi Honda
Director in charge of Pension Policies, CFO,
Executive Vice President, Business
Administration, Administration Division

I share this teaching with the up-and-coming generation of
employees as one lesson that demonstrates a work style whereknowing what happens on site is indispensable.

YKK Forest Management
YKK is not a tree but rather a forest.
Everybody stands hand-in-hand and grows bigger together.
The benefits of the sun’s rays are felt throughout,
but the trees must also huddle together in order to withstand the rain
and wind.
In a forest, there are, of course, large, experienced trees withmany growth rings as well as young, thin trees. Some trees are tall andothers are short.
Each person demonstrates their special abilities according to theirindividuality. They work well and move forward together without being
controlled by anyone.
YKK employees are all workers, but at the same time, they are all
managers. No matter how large the company becomes,
my hope is that we will never lose the spirit of a forest filled with vitality,
and that we will remain a company where anyone can express his or her
opinions freely.
Centennial Commemorative Publication
From Tadao Yoshida, Founder of YKK, and the Cycle of Goodness Management Philosophy

25

This is YKK 2023

YKK Philosophy & Sustainability

Value Creation

Business Strategy

Financial

Related capital

Disseminating andimplementing the
Cycle of Goodness

Platform

IntellectualSocial andrelationship

Manufactured

26,699 diverse
human assets in

72 countries/

Various kinds ofcareer support

Initial global
expansion

1959(India, New Zealand)

regions

Data

Human

Diverse Human
Assets Promotion
Committee

NaturalMandatory
retirement age system
abolished (Japan)(Figures as of March 31, 2023)

Strengthening human assets in a favorable cycle that will improve corporate value
Diverse human assets, or simply diversity, is aworkplace where a wide range of human assets withdifferent ways of life and thinking come together tomake things happen. The key to achieving diversity
is nurturing an atmosphere that is accepting ofdiverse ways of thinking. Our approach at YKK is
Forest Management (see P. 25), which emphasizes
management by all. Forest Management respects the
purpose and values each individual has about work
while sharing an awareness and motivating every
employee to move toward the same goals. All of the
YKK management team has come together in an effort
to build this corporate atmosphere.
Launched in 2021, the Diverse Human Assets
Promotion Committee chaired by the president has
been promoting measures to raise awareness about
the cycle of hiring, developing, promoting, and actively
utilizing human assets. These efforts include work

Active investments into
human assets
The initiatives related to human assets
and diversity in the current Mid-termManagement Plan cover everything from inhouse human asset development and skills
training to the promotion of better health.
In particular, we are focused on measuresthat contribute to management strategies,
such as using human assets to explore
new technologies and domains. To promote
experts and secure human assets versed in
specialized technical fields in light of a morecompetitive global human asset recruiting
environment, YKK is looking into reforming
its personnel and compensation systems. We
have even rolled out salary revisions taking
into account the high cost of living in Japan.
In the future, we will continue to enhance
employee engagement while considering
how to reform and introduce these kindsof systems, while taking advantage ofcommunication opportunities between
employees and top management.

to further human asset development, skill training,
recruitment of expert human assets outside YKK,
and internal promotions of human assets. This cycle
motivates and invigorates employees, which in turnhelps heighten customer satisfaction and trust as
well as enhance YKK corporate value. We will use
this favorable cycle to further strengthen humanassets. At the same time, YKK will focus on devisingand executing succession plans, which have beena challenge as more and more of our operatingcompanies overseas celebrate 50 years of business.
In the words of Founder Tadao Yoshida, “Japan as a
Prefecture of a Country Called ‘Earth.’” The relocation of
our Global Sales Headquarters’ functions to Vietnam isa great example of this. As work styles go beyond theborders of countries and regions now, YKK connects
employees all around the world as if the world were one
country with the aim to respond to customer needs.

The YKK Group’s Human Assets and Diversity Initiatives

Utilizing diverse human assets to continually practicethe management principle“YKK seeks corporate value of higher significance”
Nurturing of internal humanassets and development ofcapabilities● Enhance mechanisms to nurture leaders and technical specialists● Utilize human assets to explore new technologies and domains

Active recruitment of
external human assets● Appointment of specialized human assets

Toward a competitivecompensation system● Revision of HR/compensation systems and various regulations

Increased employee
engagement

Health promotion● Introduction of related systems● Opportunities for direct dialogue with top management● Employee health initiatives

This is YKK 2023

26