DENKI KAGAKU KOGYO KABUSHIKI KAISHA CSR REPORT 2010

http://www.denka.co.jp

S 2010.10 0010 IC
Published in October 2010
by Denki Kagaku Kogyo Kabushiki Kaisha

This report was printed on Forest Stewardship Council-certified paper, which was sourced from well-managed
forests and other controlled sources. In addition, the printing involved no volatile organic compounds andemployed a waterless planographic process that does not create harmful water discharges.

CSR REPORT 2010

Message from the President
CONTENTS

Environmental Initiatives
Special Feature: DENKA’s Environment-Friendly
Products and Businesses ...................................... 12
Responsible Care Activities / Medium-Term
Environmental Plan ................................................ 16
Addressing Global Warming................................... 18
Electric Power Initiatives ........................................ 20
Rationalizing Logistics............................................ 21
Output ................................................................... 22
Environmental Accounting ..................................... 24

Reference
Consolidated Financial Statements ....................... 40
Company Information ............................................ 42
Third-Party Audit/Editorial Afterword ...................... 43

the impact of the economic crisis, which began in the latter half of fiscal 2008 and continued through to thefirst half of fiscal 2009.
In addition to the effects of stock adjustments and economic countermeasures, the economy in Japansaw a revival in production and exports as a result of recovery in Asian economies, chiefly China. However,difficult economic conditions continued due to sluggish capital investment and rising unemployment.
In the chemical industry, a recovery in demand both in Japan and overseas boosted sales volume andcorporate earnings improved. Cause for concern, however, exists with regard to the deteriorating performance of exports as a result of yen appreciation and the rising cost of raw materials.
Operating under these conditions, DENKI KAGAKU KOGYO KABUSHIKI KAISHA (DENKA) formulated“KIT09,” a management plan that had as its top priority restoring income and expenditures to the level the
Company enjoyed prior to the economic crisis. To this end, we worked to reduce fixed expenses in a varietyof areas, including labor and operational expenses, reviewed inventories and strived to increase sales. By
business, net sales in both the inorganic and organic materials businesses declined because of a drop insales prices and yen appreciation, although demand for electronic materials-related products rose alongwith a bounceback in their market following the stagnation of the second half of fiscal 2008. In addition,
sales of medical and pharmaceutical products also increased.
As a result, consolidated net sales in the fiscal year under review amounted to ¥323,875 million, adecline of 3.1%, or ¥10,254 million, from the previous fiscal year. Operating income, on the other hand,

Environmental Initiatives

Site Reports, CSR Milestones:
www.denka.co.jp/eng/topics/csr2010.htm

The business environment in fiscal 2009, the year ended March 31, 2010, continued to be severe due toProfileCSR Initiatives
CSR Vision ............................................................ 26
Product Safety / Management System .................. 28
Occupational Safety and Health, Security
and Disaster Prevention ......................................... 30
Corporate Governance and Compliance ................ 32
Social Contribution Activities .................................. 34
Human Resource Development ............................. 36
Measures to Enhance Productivity ......................... 38
Research and Development Activities .................... 39

To All of Our Stakeholders
To All of Our Stakeholders

ProfileOverview of Principal Business Segments.............. 07
DENKA CITY ......................................................... 08
Consolidated Financial Highlights........................... 10

To All of Our Stakeholders

increased a substantial 110.2%, or ¥11,353 million, to ¥21,655 million. Net income surged 627.5%, or¥9,034 million, to ¥10,474 million.

Editorial Policy

With regard to the environment, the arrival of a low-carbon society will lead to the manufacturing industry being asked to shoulder even more stringent obligations and burdens. Moreover, there is a widely held
belief that tackling the reduction of CO2 emissions will be a prerequisite for corporations desiring to maintaincorporate sustainability. We own and operate hydroelectric power plants, and, backed by fortes in energy
conservation and environmental technologies that we have cultivated over many years, have employed life
cycle assessments (LCAs) as a primary tool as we push forward with measures to reduce CO2 emissions,
including among business customers and individual consumers.
The DENKA Group Guidelines underscore our CSR commitment as a comprehensive chemical products
manufacturer in 10 key respects, including safeguarding the environment, maintaining employee safety andhealth, ensuring security, preventing disasters and promoting compliance, employment and social initiatives.

CSR Initiatives

DENKA set up its CSR Promoting Department in April 2007 as partof DENKA100, a Companywide initiative to meet new challenges
while heading toward its centennial in 2015. The department coordinates Responsible Care (see note below) and other corporate social
responsibility (CSR) activities throughout the organization. The
Company started publishing an annual environmental report in 2000
replacing it with a CSR report in October 2007.
Based on Companywide activities concerning DENKA100, issuesof material importance to DENKA outlined in CSR Report 2010 havebeen summarized into booklet form, while information on other activities that we are continuing to implement is displayed on our website.
Consequently, we have focused on creating a compact booklet whiledisplaying information in a concise and high-quality format. For thisreason, our site reports, which were until last year included in our
CSR reports, will be displayed on our website.
The Japan Responsible Care Council conducted a third-party
audit of the report. In preparing this publication, we referred toReports on Environmental Guidelines 2007 by Japan’s Ministry of theEnvironment and Version 3 of the Sustainability Reporting Guidelines
by the Global Reporting Initiative.

Message from the President

Message from the President
To All of Our Stakeholders ..................................... 03
Interview with the President ................................... 04

Together with autonomous management activities conducted through the implementation of Responsible
Care* we have produced a medium-term environmental plan that aligns our efforts to undertake environmental preservation activities with numerical targets. Taking these activities into account, we formulated theCompanywide DENKA100 management plan to take on a new set of challenges leading up to our centenni-

Coverage

al in 2015. Our goal is to take a further leap forward in order to continue to be a company that creates new

This report generally covers fiscal 2009—April 1, 2009, throughMarch 31, 2010—however, it also includes numerical targets andperformance statistics from dates preceding that period as well as
information on subsequent events.

value from resources by fully employing its technological capabilities.
In this report we would like to introduce the basic policies and results of our CSR activities based on
DENKA100. We would be delighted to hear your frank opinions with regard to our efforts.

Scope

2

DENKA CSR REPORT 2010

September 2010
Reference

Unless stated otherwise, the data in this report is based on information on the business sites of DENKA and key affiliates. These sites
are the Omi, Omuta, Chiba, Shibukawa, Ofuna and Isesaki plants
and the Central Research Institute. We also include data for theplants at which the Electronic Materials Institute and Polymer
Technology Institute are located.
The key affiliates are Denal Silane Co., Ltd., Denak Co., Ltd.,JUZEN Chemical Corporation at the Omi Plant, and Chiba Styrene
Monomer Limited Company, TOYO STYRENE Co., Ltd., and Taiyo
Vinyl Corporation at the Chiba Plant. The financial sections on pages
10 and 40 to 41 of this report present consolidated data.

* Responsible Care as it pertains to the chemical industry is defined as
an approach to business activities in which manufacturers and handlersof chemical substances, in line with the principles of self-determinationand individual responsibility, conduct the self-management of environmental and safety issues surrounding aspects of chemical substances,from development through to disposal.

Seiki Kawabata
President

DENKA
SEI CSRCSR REPORTREPORT 20102010

3

Message from the PresidentInterview with the PresidentInterview with the President

A At DENKA, we are moving forward on three strategies for growth, specifically, we are focused on expanding sales in overseas markets, strengthening competitive products and product development with a focus on growth fields.

1) Expanding sales in overseas markets

Please discuss the results for fiscal 2009 in each segment andfuture policies.

the functional materials and plastics business recorded sales

styrene resins, primarily for export, recovered; however,volume growth buoyed by demand for the influenza vaccines

although sales prices fell along with the declines in the cost ofand diagnostic reagents offered by subsidiary company

raw materials, sales declined. Chloroprene rubber experienced

DENKA SEIKEN, Co., Ltd. This was due to the spread of thea recovery in sales volume as sales expanded in China and the

new influenza strain and was in addition to increased sales of arest of Asia and automobile-related applications regained lost

macromolecular sodium hyaluronate preparation that improves

ground. Nevertheless, the segment’s net sales declined due tojoint function. In addition, sales of food packaging sheets andthe impact of the strong yen. In the inorganic materials busi-

DENKA Polymer Co., Ltd.’s processed products were brisk.

ness, we saw a reluctance to purchase fertilizer as well as a

Fiscal 2009 conditions were a continuation of the severe

price revision in the first quarter. Although the sales volume

business environment experienced in fiscal 2008. However,recovered after July, sales still declined. In fire-resistant materi-early recovery in the electronic materials business, extraordinaryals, overall sales were sluggish for steel materials as well as

demand for new-type influenza-related products and the solid

cement and sales declined. Also, sales of a special cement

launch of phosphors for white LED modules all worked toward

additive increased with the rise in sales of DENKA NATMIC, aa year-on-year rise in operating income of ¥11,353 million.
This notwithstanding, returns from our organic and inor-

The electronic materials business saw net sales rise on theganic materials businesses, the backbone of the Company, fell

rapid recovery in demand for principal products, such as theprecipitously. Going forward, we will restructure materials busi-

industrial adhesive HARDLOC, materials for electronic compo-

nesses by strengthening sales of chloroprene rubber andnent delivery, fused silica filler for IC chips and electronic circuitrevamping the inorganic materials business. In this way, we

substrates for industrial equipment. Furthermore, we launched

intend to establish a framework to secure stable profits and to

SiAlON Phosphor, a new product for white LED modules, inbuild a foundation for DENKA’s growth.

Korea
K
Ko
ore
orea
or
o
rre
rea
ea (Seoul)
((S
S o
ou
u)

DalianSuzhouShanghaiTaiwanHong Kong

ShenzhenIndia (Gurgaon)

Regional integration company
Kuala
Kua a Lumpur
K
L mp
Lum
Lu
mp
pu
pur
urr

Sin
ngap
ng
ap
po
ore
or
re
Singapore

Established in 20092) Strengthening competitive products
DENKA is making enormous capital investments to strengthen
products in order to ensure a competitive edge. In fiscal 2009
we completed upgrades to manufacturing facilities for ourmainstay product, chloroprene rubber, having thus far invested
over ¥10.0 billion. In so doing we are boosting annual production capacity from 70 thousand to 100 thousand tons. In thesecond half of fiscal 2008, the economic crisis caused demandfor chloroprene rubber to temporarily drop, however, the sales
volume has now recovered to the 70 thousand ton level met by

our former production capacity. We will continue to take steps
to further expand sales, focusing on the Asian region.
The pharmaceutical macromolecular sodium hyaluronate isanother product for which we conducted large-scale investments. From the latter half of fiscal 2010 when operations getunder way we will see the production capacity increase to 15
million units, 1.5 times that currently possible. This will secure a
production structure capable of meeting increased demand
from a surging market.

■ Chloroprene rubber production capacity■ Macromolecular Sodium hyaluronate
production capacity(tons)(thousands)

100,000

100,000

15,00015,000CSR Initiatives

quick-setting agent for undertaking construction in tunnels.

Production bases
Sales bases
Sales support baseBusiness control
office, sales baseEnvironmental Initiatives

product’s sales volume soon expanded. Pharmaceuticals inbacked by a heavy sales volume of styrene monomer. Sales of■ Asian network

ProfileA In the organic materials business, we saw increased sales

We are working with great urgency to build overseas bases,
particularly in China, to meet our target of achieving an export
ratio of 50% by 2015. In April 2009, we established Denka
Chemicals Holdings Asia Pacific Private Limited (DCHA) toconsolidate our Southeast Asian and South Asian business
operations.
Our trading company Hissan Trading Co., Ltd. also established sales offices in Gurgaon, India, in November 2009 and inSeoul, South Korea, in January 2010, in order to build an evenstronger sales network in Asia. These activities represent efforts
to aggressively take on overseas initiatives and to meet thedemand of a growing Asia.

80,000the second half of the fiscal year. Taking off quickly, the new

Message from the President

Please tell us about DENKA’s strategy for future growth.

70,00060,00010,00010,00060,0007,500

40,0005,000■ Consolidated net sales by segment (FY2009)■ Consolidated operating income by segment (FY2009)

2.9%

0

0

2006

7.7%

10.2%

20,00020082010 (Fiscal year)(projected)

2006

2008

2010 (Fiscal year)(projected)

10.4%3) Product development in growth fields¥323,875®ÊOrganic Materials

million®ÊInorganic Materials

12.0%
15.1%

4

Operatingincome40.6%

DENKA CSR REPORT 201049.8%

®ÊOrganic Materials¥21,655
million29.2%®ÊInorganic Materials®ÊElectronic Materials®ÊElectronic Materials®ÊFunctional Materials and Plastics®ÊFunctional Materials and Plastics®ÊOthers®ÊOthers

In the latter half of fiscal 2009, DENKA launched to market
ALONBRIGHT, a white LED module used as a backlight for
LCD TVs. Greater than expected demand for this product has
made it imperative to upgrade manufacturing facilities.
Moreover, we plan to conduct sales of this module for illumination applications, and in fiscal 2010 we are scheduling scaled
upgrades to increase production capacity. Looking ahead, inthe electronic materials business, we will reinforce the LED

products-related business, making this module a mainstay
product.
Solar generation systems are another clean energy areathat show promise for enormous growth. An example of this is
SOLARLOC, a product we developed as an adhesive to temporarily affix processing silicon ingots for solar batteries. In addition to Japan and Taiwan, we aim to conduct aggressive sales
activities of this product in China, Southeast Asia and Europe.
DENKA CSR REPORT 2010

Reference

22.1%

Net sales

5Profile
Would you please update us on the progress of DENKA100, as well as
how it will be developed in the future.

Message from the President

DENKA100 Targets

Overview of Principal Business Segments

Double operating income between fiscal 2006 and 2015 to ¥60 billion ona consolidated basis and ¥50 billion in non-consolidated terms

A new set of challenges leading up to our centennial in 2015
Create new value from resources by fully employing technological capabilities

2015

Business
deployment

Employee awareness & Development of Enhancement ofoperational reforms human resources
productivity

R&D

DENKA, a pioneer in electronics and chemicals, was founded in 1915 to
CSR

manufacture and market calcium carbide and the chemical fertilizer calcium

Future plans

2007

KITO9
GCP2.0cyanamide. As a comprehensive chemical products manufacturer that
Cultivatehumanresources andmotivation

Technologicalimprovement andinnovation,
Cost reduction

Promotion ofresearch &development

Corporatesocialresponsibility

that creates new value from resources by fully employing its technological

DS09

Sections

Sections

seeks to elicit the full potential of chemicals, DENKA aims to be a company

Sections +Human Resource
Development Center

Sections +Productivity
Enhancement Center/
Production Process
Department

Sections +R&D
Department

Sections +CSR Promoting
Department

capabilities. By developing and providing an array of materials, DENKA iscontributing to the development of society.

DENKA100 Department (Administration)

DENKA100 Guidelines¬ Become a trustworthy organization¬ Identify new business opportunities¬ Operate honorably and foster individual talent

Pursuing New Challenges through DENKA100 for Our Centennial

The cultivation of human resources includes strengthening
the activities of the Human Resource Development Center,nial in 2015 will be to work as a company that creates newwhich advances education within the Company, boosting moti-

value from resources by fully employing our advanced techno-

vation, and encouraging employees to be able to think, learn

logical capabilities. In so doing, we aim to achieve consolidated

and act autonomously.

operating income of ¥60 billion by 2015.

es and raw materials, improving equipment capacity, increas-

three DENKA100 guidelines, namely, to “become a trustworthy

ing the added value of products and raising the efficiency oforganization,” to “identify new business opportunities,” and tooperations and our ability to move forward based on our tech-“operate honorably and foster individual talent.” There are also

nological strengths while enhancing workplace and organiza-

six action items we are taking steps to accomplish, namely, thetional capabilities.

1) implementation of DS09, the first three-year stage of

R&D is fostered under the direction of our Research and

DENKA100, which began in 2007, intended to adapt, deepen

Development Department, making strides in bolstering existing

and add true value to our business development; 2) deploy-products and speeding the development of products while

ment of GCP2.0, an updated version of the Good Company

keeping in mind the global environment.

Main products: styrene monomer, polystyrene resin, ABS resin, SBC
resin, heat-resistant and transparent resins, acetic acid, vinyl acetate,
POVAL, chloroprene rubber, acetylene black

In our pursuit of CSR, we seriously apply our efforts relat-3) cultivation of human resources; 4) enhancement of produc-

ed to a variety of issues, including the environment, safety,

tivity; 5) fostering of R&D; and 6) pursuit of CSR.

employment, compliance and social contributions. CSR activi-

Inorganic Materials% of
FY2009net sales

15.1%

Main products: fertilizer, calcium carbide, fire-resistant materials,
cement, special cement additives

Electronic Materials

ties are carried out methodically and aim for a harmonious
coexistence with local communities, society and the earth.

return on assets (ROA) and interest-bearing debt ratio, forIn carrying out each of these initiatives and with the intent

which we are undertaking various measures. However, theseof realizing an image of DENKA’s future as we look toward ourtargets were put on hold when the economic crisis broke out

centennial, we will continue to strive in a variety of fields.

% of
FY2009net sales

12.0%

DENKA supports the development of electronics, combining
expertise in organic chemistry with a long history in the area of
inorganic chemistry as well as the cultivation of its polymer processing technologies. DENKA holds the top share of the market
for spherical fused silica for semiconductor sealant fillers, andalso provides a range of other products, such as DENKA
THERMOSHEET, an electronic packaging material.
Main products: Fused silica, electronic circuit substrates, fine chemicals, electronic packaging materials

in 2008, spurring us to take the emergency countermeasures
outlined in KIT09 to regain our sense of balance with regard to

In addition to its carbide chemical business based on calcium
carbide and calcium cyanamide, manufactured since 1915, theyear of its founding, DENKA has developed its cement businessbased on limestone, a plentiful raw material extracted from mines
with about five billion tons of exploitable reserves. The hydroelectric power plants constructed to support the production of calcium carbide, supply approximately 30% of DENKA’s overall
electric power needs.

CSR Initiatives

Program that will revitalize the Company through new thinking;categories of operating income, operating income margin,

40.6%

Enhancing productivity entails the effective use of resourc-

We aim to achieve our basic philosophy in line with theUnder DS09, we established numerical targets in the four% of
FY2009net sales

DENKA entered the petrochemicals business on the occasion of
its participation in the Maruzen Petrochemical complex in 1962.
Since then the Company has worked to expand its range ofofferings, including styrene monomer, polystyrene resin andother functional resins. These are used in an array of products,
such as home appliances, office equipment, automobiles, packaging materials and general merchandise.

Environmental Initiatives

A Under DENKA100, a management plan implemented from
April 2007, our basic philosophy in the lead up to our centen-

Organic Materials

ProfileOverview of Principal Business Segments

3-year

GCP
Version up

Promoting Department

2009

Functional Materials and Plastics

income and expenditures. This decisive action enabled us toachieve consistent results in fiscal 2009. Then, in fiscal 2010,
as we returned to the path of growth we reinstated the goals
GCP2.0 is a plan that seeks to strengthen and vitalize theCompany from the inside-out by taking action to change
Companywide awareness and improve operations. Based on
the slogan “exceptional themes, inspirational measures, outstanding results,” DENKA has been constantly moving forward% of
FY2009net sales

22.1%

Reference

set for the final year of DS09.

Utilizing its advanced polymer processing technologies, DENKA
develops and markets an array of processing products for synthetic resins that are environment friendly and enhance convenience. In the medical science field, DENKA manufactures
macromolecular sodium hyaluronate and its subsidiary DENKA
SEIKEN produces vaccines and diagnostic reagents.
Main products: food packaging materials, vaccines, preparations for
improving joint functions, diagnostic reagents, housing materials andenvironmentally friendly materials, and industrial materials* Please see DENKA CITY on pages 8 and 9 for principal products of each segment.

with this plan since April 2007.
6

DENKA CSR REPORT 2010

DENKA CSR REPORT 2010

7

Profile
DENKA CITYWind turbine generator bearings

Hydroelectric power plants

Silicon nitride

DENKA products make the world a better place
As a general chemicals manufacturer, the DENKA Groupdevelops and supplies a wide array of products, includingorganic and inorganic materials, resins and electronicmaterials.
The value-added products created using DENKA’s
advanced technological capabilities are utilized in waysthat affect society at all levels and contribute to bothprosperous lifestyles and industrial development.

Cellular phones
MALECCA: heat-resistant
ABS resin
TEMPLOC: Temporary
fixing adhesives

Message from the President

DENKA Σ80N: high-strength concrete

Quick-setting agents for sprayed concrete linings

Electric trains

DENKA NATMICAN PLATE and ALSINK: ceramic baseplates for inverters

Bridge support materials
DENKA PRETASCON, DENKA HARDLOC II

Eel farms

Underground drainpipes

Train exteriors

HISUI EELTOYODRAIN

DENKA DX FILM

■ Organic Materials

Golf clubs
HARDLOC: assembly adhesive■ Inorganic Materials

Concrete repair materials
DENKA Rising method,
DENKA HARDLOC II

Automated multistory car parks

Solar batteries

DENKA POWER CSA

DENKA DX FILM: back sheet
Monosilane ultrahigh-purity special gas,
SOLARLOC: Temporary fixing adhesives

Joint function improvers
Macromolecular hyaluronic acid preparation

LED Lighting

Advertising on bus exteriors

DENKA HITTPLATE,
DENKA THERMALLY CONDUCTIVE SHEETDENKA DX FILM

Flat panel display TVs

Wallpaper adhesives

Environmental Initiatives

DENKA HITTPLATE: insulated thermally conductive
metal circuit boards Transparent polymer
DENKA THERMALLY CONDUCTIVE SHEET and
SPACER, ELETHERMALALONBRIGHT: SiAlON Phosphor

Rain gutters

DENKA EVA TEXTOYO GUTTERS

Air conditioners
DENKA HITTPLATE:
Inverter circuit board

Office buildings, condominiums and other structures

ProfileInfluenza vaccines
Influenza test kits

DENKA CHLOROPRENE:
synthetic rubber■ Functional Materials and Plastics

DENKA CITY

Wetsuits■ Electronic Materials

DENKA Cement

Game machines
Transparent polymer

Air Conditioners

Digital cameras

WALLDUCT:
Piping protective
and decorative cover

HARDLOC OP: lens adhesive

Quake-resistant construction material
DENKA TASCONCSR Initiatives

DVD players
HARDLOC UV,DENKA THERMALLY CONDUCTIVESHEET and SPACER

Holding material for combustion catalysts
in automotive exhausts
DENKA ALCEN: alumina short fibers

Vacuum cleaners
Transparent polymer

Audio equipment

Electromotive power steering controllers

DENKA HITTPLATE: insulated thermallyconductive metal circuit boards,
DENKA THERMALLY CONDUCTIVESHEET and SPACER

DENKA HITTPLATE: insulated thermally conductive
metal circuit boards

Personal computers
Refrigerators
DENKA ABS andStyrol MW resins

Wire harness tapes for bundling
VINI-TAPE

Spherical fused silica: semiconductor sealant filler,
DENKA THERMALLY CONDUCTIVE SHEET and SPACER

Food packaging materials
Automotive interiors,
vehicle-mounted audio equipment
and door mirrors

DENKA THERMOSHEET OPS

Reference

MALECCA: heat-resistant ABS resin

Basic cosmetics
Hoses, belts, boot covers andair suspensions
DENKA CHLOROPRENE and DENKA ER: synthetic rubbers

Fertilizers
Calcium cyanamide, AZUMIN, YORIN, TORETARO

URUOICoolant
DENKA POVALPET bottle labeling film
CLEAREN: SBC resin

Synthetic fashion wig fibers
TOYOKALON

8DENKA CSR REPORT 2010

DENKA CSR REPORT 2010

9

Profile

Environmental Initiatives

Consolidated Financial Highlights(Millions of yen)
Fiscal 2005

Fiscal 2006

Fiscal 2007

Fiscal 2008

Fiscal 2009

Net sales

307,923

329,262

363,996

334,130

323,875

Operating income

26,06929,877

29,912

10,302

21,655

Ordinary income

23,91326,006

24,9183,094

16,888Net income

15,365

15,734

6,660

1,439

10,474

Total assets

349,689

365,301

375,364

377,912400,407

Total net assets

146,148

164,643

161,870

150,142

160,316

Total shareholders’ equity ratio (%)

41.8

43.5

41.6

39.1

39.4

Net income per share (yen)

31.08

32.03

13.57

2.89

21.33

Net assets per share (yen)297.23323.81

317.91300.60321.46

Net sales

Operating income

Ordinary income(billions of yen)(billions of yen)(billions of yen)

400

30

29

DENKA’s founder Tsuneichi Fujiyama, who pioneered the manufacture ofcalcium carbide in Japan, devoted himself to producing chemical fertilizers
domestically to foster the nation’s agricultural sector.
Ever since that time, the Company has been upholding his ethos ofmaintaining the high-quality, production-oriented approach demanded bysociety in its capacity as a creator of products and businesses.
Amid the current increasing awareness of environmental protection
matters, DENKA is focusing on saving energy, the development of such clean
energy-related items as solar power generation products and the expansion of
its environmental business. In addition to strengthening its efforts toward
global warming prevention, including the lowering of CO2 emissions, theCompany is employing LCAs to help customers reduce waste andenvironmental impact when using its products.

30

29

363
26
334

329

300

The Omi Plant’s Oami power station (See p. 20)

26
24

323

23

307
21

20

20

16

200

10

10

10

100

3

0

0

05

06

07

08

09 (Fiscal year)

005

Net income/Net income per share(billions of yen)

(yen)

20

60

06

07

08

09 (Fiscal year)

05

06

Total net assets/
Net assets per share(billions of yen)(billions of yen)

(%)

400

400
365

15

15

45

08

Total assets/
Total shareholders’ equity ratio

375

60

300

43.5

161

377
146

45

120

09 (Fiscal year)

(yen)
164

160

323.81

349

15

07

160

360

150
321.46317.91300.60297.23

270

41.6
39.4

41.8
39.1

10

31.08

32.03

10

30

200

30

0

180

15

100

15

400

90

0

0

0

0

21.33
6

5
13.57
1

0

2.89

05
Net income

06

07

08

09 (Fiscal year)

Net income per share05
Total assets

06

07

08

0

09 (Fiscal year)

05

06

Total shareholders’equity ratio

Total net assets

07

08

09 (Fiscal year)

Net assets per share

Rounded down to the nearest billion

10

DENKA CSR REPORT 2010

DENKA CSR REPORT 201011

Environmental Initiatives
Special Feature: DENKA’s EnvironmentFriendly Products and Businesses
Message from the President

Contributing to Lower CO2 Emissions (1)HARDLOC Acrylate
Structural Adhesive
Contributing to Lower CO2 Emissions (2)The fruit of in-house development focusing on organic
fine chemical technologies, this adhesive has been
adopted in a variety of applications that demand longterm joint reliability. From the time of its launch in 1975
until the present day, HARDLOC has been the byword
worldwide for acrylate structural adhesive.

HARDLOC Modified Acrylate
Structural Adhesivenecessitates that it be followed by finishing work involving

From Concrete to People.
What should concrete be to be of more direct
benefit to people? DENKA thought about ways that
concrete could co-exist in harmony with the global
environment and jointly developed EIEN concrete,
which absorbs CO2 and lasts a very long time.

ProfileHARDLOC: Used in a Variety of Applications

EIEN Long-Life Concrete

reshaping the piece with a hammer and polishing with a grinder
HARDLOC, a modified acrylate adhesive that is DENKA’s mainstay product in the functional adhesives business, is a structural

it needs some time to harden, using an adhesive dispenses with

Carbonation: The Key to Longevity

the need for finishing, resulting in a labor-saving process.

its two-liquid formulation is mixed together.

sis, carbonation, EIEN enables longevity far in excess of theTaking its name from the first letters of the words “earth,”an alternative to screws, bolts and welding. The product istherefore used in a wide variety of locations and products wherelong-term adhesion is essential, including the bonding togetherof elevator panels, metal construction materials for offices andprivate homes as well as, to give a more familiar example, in theassembly of golf clubs.

Energy-Saving Effect of the Adhesive Method
It is common to use welding when bonding pieces of metal“infinity” and “environment,” EIEN is a long-life concrete thatContributing to Improved

DENKA jointly developed with Kajima Corporation andWorkplace Environments

Ishikawajima Construction Materials Co., Ltd. Because theIn addition to the energy-saving effect from HARDLOC’s abbre-

product is in harmony with the environment, it has been

viated adhesive method, the product has the effect of signifi-

attracting a great deal of attention not only from the masscantly reducing noise and thereby contributing to improvements

media, such as TV and the press, and concrete engineers

in the workplace environments.

but also from the general public.

Leveraging HARDLOC’s superior adhesive qualities, DENKA

The phenomenon known as carbonation, by which con-will propose alternative welding methods that further contribute

crete absorbs CO2 that neutralizes its alkalinity, also induces

to improvements in energy saving and workplace environments.

the corrosion of the steel reinforcing rods used inside concrete. Consequently, carbonation has until now been con-

together. The thermal distortion that occurs in metal welding

conventional number of years of service life. Consideration
is being given to using EIEN at radioactive waste treatment
plants, where safety, reliability and durability are imperative;
for such important structures as roads and railroads; and forthe maintenance and repair of deteriorating concrete structures, such as piers.
Taking advantage of one of EIEN’s special characteristics, that is, its low pH value, the Company is also studying
its application in the construction of artificial coral reefs andas vegetation concrete, where ecological harmony and envi-

Environmental Initiatives

A superior structural adhesive, HARDLOC can be used as

Making reverse use of concrete’s long-standing nemeSpecial Feature: DENKA’s Environment-Friendly
Products and Businesses

adhesive that reacts and hardens in a matter of minutes when

as well as the application of finishing putty. In contrast, althoughronmental compatibility are strongly desired, and in aquatic
environments.

sidered an undesirable aspect of reinforced concrete
structures.
Findings from surveys of ancient Egyptian and Chinese

Arc welding

Sputter removal / stress relief

Degreasing

Application of adhesive

Fixing on jig or with rivets

Degreasing

Application of putty

Painting

CSR Initiatives■ Process Differences■Use in the creation of an artificial coral reef

ruins, however, have revealed a close relationship between
concrete carbonation and longevity, the concrete that exist-

Painting

Using bonding as an alternative to welding not only reduces noise volume, the shorter process saves on labor and reduces

ed several thousand years ago sharing a common factor:
advanced carbonation.

power consumption. The improved rigidity gained by surface adhesion using this structure enables consideration to be given

Nicknamed “10,000-Year Concrete”

to the use of thinner and lighter steel sheets.

Application ofadhesive

12

DENKA CSR REPORT 2010

■Example of energy savings
achieved by applying adhesive
process methods for metal enclosure assemblies●Approx. 30% reduction in work
times
●Approx. 20% weight reduction fromuse of thinner steel sheet●More than 30% reduction in theamount of power used in the factory

In the course of EIEN’s development, DENKA conducted
research looking for materials that would better densify andstabilize concrete during the carbonation process. It was
during this research that the effectiveness of a specific additive, γ-modification dicalcium silicate (γ-2CaO · SiO2), wasReference■Energy-saving effects●Faster completion times due to shortened process●Reduced power consumption for welding and drying after putty application
stage●Improved rigidity gainedby surface adhesion
also enables consideration of thinner steel
sheetsCoral attached to EIEN concrete

recognized.
Actively carbonizing concrete and greatly increasing its
internal density by using the special additive suppresses
subsequent penetration by harmful substances so that theBonding elevator panels
Johnson Lift (India)

Example of adhesive
method of application: Electric
power distribution panels

concrete is also chemically stable.
The coral’s extensive growth after one year

DENKA CSR REPORT 201013

Environmental Initiatives
Special Feature: DENKA’s EnvironmentFriendly Products and Businesses
Message from the President

Earth-Friendly Environmental Business (2)DENKA’s Recycling Technologies
To ensure that it becomes a company that contributes sustainably to
the world and society, the DENKA Group recognized product recycling as an important operation. Geared toward the formation of arecycling-oriented society, DENKA is honing its resource recycling
techniques for waste materials and by-products related to its products, including cement and styrene foam packing material.

Earth-Friendly Environmental Business (1)DENKA’s Environmental
Technologies

BIO-DYNACTOR
wastewater treatment system

Cement Plant Recyling System

Involvement in Styrene Foam Packing Material

The waste material recycling business at the Omi Plant’s

Recycling Businesscement plant started with the treatment of by-products gener-

Founded in 1966, Denka Polymer is engaged in the manufac-

ated by its in-house operations. Now accepting coal ash fromture and sale of plastic food containers.

the thermal power stations of electric power companies as

By actively working to make food containers lighter, notwell as waste tires and plastics, the Omi Plant is also handling

only is the company reducing the amount of household gar-the carbonization of sewage sludge and household waste frombage and lessening environmental impact, it is contributing

local government bodies, again for use in cement. The Omi

to greenhouse gas reduction.

Plant is also addressing the issue of employing as a cement

In April 2010, Ekomira Koto, a styrene foam recycling

HIGH-FLOW PNEUMA system allows for a high degree ofmaterial soil displaced from construction sites, the securing ofpilot business scheduled to last three years, was launched inParticulate Conveyor

design freedom in pipe routing, resulting in plants that are more

final disposal landfill sites for which is presenting problems.

Tokyo’s Koto City. As a manufacturer of plastic molds, the

HIGH-FLOW PNEUMA is an example of technology for trans-

maintenance work.

DENKA is making further advances in the use of scrap

company is participating and cooperating in the venture.

wood, plastics and other waste materials as alternative

The business involves used styrene foam containers being

porting a variety of particulates by such means as high air pres-Our major tire manufacturer customer operates the HIGH-

fuels. In line with its ability to reduce fossil fuel consump-collected in Koto City, taken to a recycling facility and madesure and inert gas. Representing groundbreaking technology for

FLOW PNEUMA system to transport silica powder, the keytion, the Company is also contributing to protecting theinto pellets. As these pellets are a raw material of plastic,

controlling dust emitted from plants, this system is being utilized

technology used in eco-tires.

global environment from the standpoint of helping to allevi-

Denka Polymer takes over and acts as a broker to turn themate global warming.

back into plastic products.

in a wide range of fields.
Having fed the transporting air and gas that contains theparticulate into the lift tank (pressure vessel), the mechanism
uses that air to push the particulate through the piping. The pipe

BIO-DYNACTOR Wastewater Treatment System
and BCP Carrier

is sealed, making it difficult for dust to escape. Moreover,

The innovative BIO-DYNACTOR wastewater treatment system,

because there are no moving parts such as fans inside the pipe,

which is being independently developed and manufactured by

the maintenance workload is significantly reduced.

DCE, has the ability to maximize microorganisms’ efficiency inHigh-hardness coke fines and silica powder are abrasive todecomposing organic material.
The wastewater is treated using a long-life, porous plastic

resistance, helping to prevent pipe abrasion thanks to the pipes’

carrier known as Bio Carrier Plastic (BCP) and the superior

interior being coated with a ceramic material that enables thedecomposing ability of a microbial film attached in high concen-transport of particulates without the need for moving equipment

trations to the carrier’s surface.

along the conveyor pipeline.

The three-phase fluidized bed-type method is utilized, spe-

The Company’s steelmak-cifically, water and the carrier are mixed into the wastewater,

ing plant business customers

which is then aerated and made to flow. Despite the compact-

utilize the HIGH-FLOW PNEUMA

ness of the equipment, this method delivers high purification

system for collecting and trans-

capacity. Progress is being made in installing BIO-DYNACTOR

porting the coke fines that are

in a wide variety of production plants where high-load opera-

produced when cooling coke.

tions, such as those for foodstuffs, chemicals and electronic

In contrast to the conventional

materials, are demanded.
By means of biotechnologies that utilize microbial decom-fines on a steel belt conveyor,

position, DCE offers technologies that return water, a limited

HIGH-FLOW PNEUMA reduces

resource, back to nature and endeavors to contribute to global

the amount of dust that isenvironmental protection.

sents a unique attempt formaterials and fuel.

local government, community
residents, NPOs and compa-■ Recycled Resources Accepted(thousandsof tons)
1,000

In-house sources

Emissions intensity
527(kg/ton)500

Emissions intensity

External sources

837

nies to work together andsupport resource recycling.

Koto City Mayor Yamazaki at thecompletion ceremony of the Ekomira
Koto styrene foam packing material
recycling facility

400

People with intellectual dis-300

abilities are employed at the

400

200

facility, which is located in Koto City’s Ekokkuru environmental

200

100

800

233

600

604

education facility, where tours and first-hand experiential
learning are provided for elementary and junior high school
0

0

00

01

02

03

04

05

06

07

08

09

■ Fiscal 2009 Recycled Material by Category
5%

14%
29%

837

23%

students to deepen their understanding of recycling.
As a manufacturer of plastic food containers, Denka
Polymer is actively working to get this pilot business up andrunning and contributing to building a recycling society.

Amountaccepted

4%(Fiscal year)

thousandtons

25%

SludgeFly ashSlag
Waste oil, and plastic and woodchips
Soil
Other

■ Styrene Foam Packing Material Recucling Flow Chart● Homes ● Koto City
● Ekomira Koto
● Plastic Manufacturer

Referencetechnique of transporting theThis pilot business repre-

produced used 527 kilograms of recycled materials for

CSR Initiatives

pipes and moving parts. HIGH-FLOW PNEUMA increases wear

In fiscal 2009, every metric ton of DENKA cement● Products

released into the air and thus
improves the plant environment. Unlike a conveyor, the14

DENKA CSR REPORT 2010

HIGH-FLOW PNEUMA highpressure pneumatic particulate
conveyor

Environmental Initiatives

compact, and also effectively reduces the amount of required

Special Feature: DENKA’s Environment-Friendly
Products and Businesses

HIGH-FLOW PNEUMA High-Pressure Pneumatic

ProfileDenka Consultant & Engineering Co. Ltd. (DCE), a DENKA
Group company, markets engineering technologies, selling
equipment for powder handling and wastewater treatment
facilities at production plants in a wide range of fields,
including steel, chemicals and foodstuffs. The company also
undertakes manufacturing plant projects from the planningstage through to construction.

Recovered PSP trays

Pellet tank

Extrusion equipment

Left: Profile extrusion construction materials
Right: Extruded foam board

DENKA CSR REPORT 201015

Environmental Initiatives
Responsible Care Activities /Medium-Term Environmental Plan
Fiscal 2009 Responsible Care Objectives and Achievements■The DENKA Group’s

Fiscal 2009
Key Area(1) In order that no fires break out or explosions occur at its points ofPrevent global
warming and conserve energy

production, DENKA maintains and improves equipment as wellas ensures safety through management based on operational
methods and criteria that constantly maintain safe operations.
(2) With regard to environmental protection, DENKA invests theamounts of capital necessary to promote savings in energy andresources.

Prevent air andwater pollution(3) In order to continue operating workplaces in which its employ-

Hitoshi Watanabe

CO2 emissions intensity(from energy sources):
1.17t/tEnergy consumption intensity(fiscal 1990 base): 89%

CO2 emissions intensity: 1.09t/t
Energy consumption intensity (fiscal 1990 base): 89%
We shifted fuels used in the Omi Plant’s thermal power generator
to natural gas, established another natural gas cogeneration facility, and improved energy efficiency by recovering productivity at the
Chiba Plant. Accordingly, CO2 emissions intensity was improved.

SOx: 1,876t
NOx: 5,633t
Soot and dust: 116t
COD·BOD: 651t

SOx: 870t
NOx: 4,470t
Soot and dust: 149t
COD·BOD: 1,116t
Reflecting the increased use of recycled resources at cement
plants, the amount of soot and dust emissions increased. Also, theamount of COD and BOD emissions increased due to the increased
manufacturing of rubber products at the Omi Plant. We will strive to
reduce these amounts by further improving operations and facilities.

B

Total waste generated
124,000t

100,000t
Emissions dropped because we recycled waste as resources inhouse and improved production processes to reduce waste.

A

103,000t
Constrain and reduce wastes

In-house and external reuse:
107,000t

89,600t
We progressed in reusing resources at our cement plant andthrough external recycling; however, we were unable to reach ourtarget. We will step up efforts to recycle resources.

C

90,200t
Promotion of reuseA

Cut final landfill waste
374t

A

By further enhancing the use of waste
and byproducts per ton of cement(recycled resources usage intensity),
we will contribute to the developmentof a recycling-oriented society.

A

Continued to supply materials safety
data sheets (MSDS) and other productsafety information and identify and consider complying with overseas chemical
regulations, including REACH

16
17
28
29

increase interactive exchanges, such as local briefings andEnergy consumption intensity(with fiscal 1990 as base year)

from the plant until the shipment reaches the hands of the cus-

Recycle resources
In-house and external landfill:
1,720ttomer, DENKA also works to save energy.
(6) DENKA will actively leverage its

Further enhancement of recyUse resources efficled resource usage intensity
ciently
from 417kg/t in fiscal 2008

products and processes to protect the Earth’s environment.

* Zero Emissions Definition
Final waste disposal
× 100 ＜ 1
Total waste generated［

Appropriate compliance withchemical substance management policies］

EM10
Fiscal 2009

Fiscal 2010

Fiscal 2012

TargetActualTargetTargetSigned certificate from the ICCA

0.94

0.89

0.89

0.88

0.86

In February 2010, the Company
received a signed certificate issued by
the International Council of Chemical
Associations (ICCA) for having
endorsed a declaration supporting the
RC Global Charter.

148

135

136

108

88

2,900

655

510

577

374

■Input and Output

Water discharges
COD

External waste
604,000t

PRTR substances

1,116t26t
0t

Waste generated

100,000t

Raw materials

Amount recycled
in-house
82,400tThis environmental impact data encompasses DENKA’s
plants and main affiliates within those facilities.

16

DENKA CSR REPORT 2010

15
16
17
23
24

Companywide emissions of
PRTR substances: 137t

146t
Despite each plant’s efforts to reduce emissions two tons per year
by promoting an improvement plan, we failed to reach our overalltarget. Emissions at the Chiba Plant accounted for approximately
80% of the total amount, and consisted mostly of atmospheric volatile organic compound (VOC) emissions. We will strive to reduce
emissions based on a facility improvement plan.

C

Emissions of PRTR substances: 98t

22
23

Ensure safe transportation•Target a zero accident rate for •We continued to revise our yellow card system and yellow cards
in-house and off-site logistics
for containers (labels)•Step up our Safe
•We evaluated and analyzed transportation safety levels and instiTransportation Code oftuted improvements
Conduct as a Shipped Goods
Owner

A

Fulfill responsibilities as an owner ofshipped goods

16
17
21

Eliminate occupational accidents

Conduct risk assessments andidentify and eliminate unsafe
facilities and work practices

All business sites continued to conduct risk assessments and identified and addressed unsafe work practices.
Number of incidents of lost worktime due to accidents in Group:
5 (4); accident frequency of 0.980 (0.800)
Number of incidents of lost worktime due to accidents among subcontractors: 3 (1); accident frequency of 0.750 (0.130)
Note: Numbers in parentheses are for fiscal 2008.

Waste reduction from water removal and incineration 9,660t

Amount recycled
externally7,260tFinal disposal(as landfill)510t

Omi Plant: Denal Silane Co., Ltd. / Denak Co., Ltd. / JUZEN Chemical Corporation
Main
affiliates Chiba Plant: Chiba Styrene Monomer Ltd., TOYO STYRENE Co., Ltd., Taiyo Vinyl Corp.

Explanation of Output▶ With regard to CO2 emissions from energy sources, the total represents emissions from in-house
fuel production and from electricity purchases.
▶ CO2 emissions from nonenergy sources covermainly that portion that is derived from raw
materials.
▶ COD is the BOD discharge into rivers converted
into COD values.
▶ External waste recycling covers materials converted externally into resources or fuel.
▶ Final disposal refers to material buried on
Company premises or at external landfill sites.
▶ Waste reductions are mainly from incineration.

Occupational
Safety and health▶ Fuels are the sum of all fuels used at each business site, converted into heavy oil equivalents on
a calorie basis. They include fuels for in-house
power plants.

C

Eliminate occupational accidents througheducation and safety management systems
Attain zero accidents requiring employees to take time off

16
30
31

Manage employee
healthMaintain and improve health

We continued to focus on mental health and metabolic syndrome(through education and a follow-up structure).

A

Undertake activities to maintain andimprove health30

Eliminate major
accidents

Eliminate major accidents,
notably explosions, fires andlarge leaks of chemical substances•There were no major accidents.
•The number of problems impeding operations decreased from 13
to 5.
•Based on analysis of previous accidents, we implemented measures to prevent recurrences and stepped up preliminary safetyassessments and change management.

A

Eliminate major accidents, notably explosions, fires and large leaks of chemical
substances, and improve production stability (in keeping with the characteristics
of specific plants, target more stable
operating conditions, enhance operational techniques and facilities)

16
30
31

Continue to engage communities and build trust•We addressed complaints about noise and odors by setting up
response desks at each business site, deploying countermeasures and responding faithfully to problems to obtain understanding.
•We hosted business site tours and held children’s chemistryclasses, engaged in community dialogue and participated voluntarily in social activities to maintain community trust.

A

Target ongoing corporate activities that
secure and maintain community trust

16
25
34
35

Maintain community trust

DENKA CSR REPORT 2010

Reference

Soil discharges
PRTR substances•We followed up based on the implementation guidance forUnion’s Registration,
REACH regulations.
Evaluation, Authorization andRestriction of Chemical
Substances (REACH)•We continued to follow up on GHS trends in each country.
•Accommodate Globally
Harmonized System ofClassification and Labeling ofChemicals (GHS) in each country

Explanation of Input

Disasterprevention

Plants7,860 million t

Air emissions
CO2 (from energy sources) 1.32 million t
CO2 (from nonenergy sources) 970,000t
SOx
870t
NOx
4,470tSoot and dust
149t
PRTR substances
120t

Measurement unit glossary
kl = kiloliter
kWh = kilowatt-hourt = metric ton
CO2 = carbon dioxide
SOx = Sulfur oxides
NOx = Nitrogen oxides
COD = Chemical oxide demand
PRTR = Pollutant Release andTransfer Register

Community
relationsElectricity

13.6 billion kWh
Water

Outputs
Products

473,000kl

Recycled resources usage intensity = 527kg/t
We attained our target for recycling and reusing industrial waste.

16
17
22
23
24

Manage chemical
substances andsuppress emissions

The main environmental impact totals of all business sites for fiscal 2009 are shown below.

Fuels

The Ome and Omuta Plants greatly reduced final disposal by reusing more resources and achieved the targets of the Medium-Term
Environmental Plan. As a result, we attained zero emissions.

21
24

CSR Initiatives

ActualEmissions of PRTR substances (tons)

Business Activities

510t

16

•Comply with the European

Final waste disposal (tons)

InputsSOx: 121t
NOx: 3,780t
Soot and dust: 133t
COD·BOD: 564t

proprietary technologies in its

Product safety

Item(5) In addition to maintaining safety during product distribution,

EM09
Fiscal 2008

Reduce waste(zero emissions)A

CO2 emissions intensity: 0.99t/t
Energy consumption intensity (fiscal
1990 base): 86% and below

Environmental Initiatives

Medium-Term Environmental Planchemistry classes for elementary school pupils.

Evaluation

Responsible Care Activities /Medium-Term Environmental Plan

DENKA Medium-Term Environmental Plan
DENKA continues to improve and optimize its production technologies and,by promoting RC activities, its production activities so that they safely haveless of an impact on the environment.
DENKA’s action policies are deliberated and decided upon by the RC
Committee chaired by the person in overall charge of technologies, the contents of specific activities being reviewed by the RC Promotion Committee.
Matters concerning operational safety and disaster prevention as well as
occupational safety and health come under the Safety and HealthManagement Plan. Implementing environmental measures by means of its
Medium-Term Environmental Plan and RC activities, the Company oversees
their implementation through internal verification systems, including safety
inspections and RC audits. Although not all goals were met in fiscal 2009, theCompany did achieve its targets for energy conservation and waste disposal.
The Company will continue to reduce CO2 emissions, cut waste and theuse of valuable resources toward zero emissions* under its Fourth MediumTerm Environmental Plan (EM10), which runs for three years from fiscal 2010.
DENKA will enhance its RC activities by dialogue on distribution safety andwith local communities.

Page

Achievements

Profiletraining necessary for technical proficiency.
(4) To contribute to the world and society, DENKA works toConservationequipment and technologies and conducting the tuition and
Director, Managing Executive Officer
In overall charge of technologies

Relevant

Goals

ees can work safely, DENKA works hard to reduce occupational
hazards at points of production by such measures as improving

Initiatives andFinal-Year Targets–

Responsible Care (RC) Activities

Message from the President（Assessment code: A = Reached target B = Partially missed target C = Missed target）

17

Environmental Initiatives
Addressing Global Warming

The Basic Law for Prevention of Global Warming introduces spe-(t-CO 2 /t-CaC 2 )1.4

cific measures for cutting CO2 emissions together with basic con-

1.2

energy consumption intensity.

in both categories. Furthermore, our production gained upward

Production
Intensity
1.14

1.36
1.32

1.31
1.26

0.8

1.2

1.18

and a “purchase system for all renewable energy” are drawing par-

1,500

1.00

1.07
0.97

0.96
0.92

tion of CO2 emissions” and “international contribution evaluation

0.2

system.” Visualization includes determining a company’s carbon

0

1,750

1,750

1,740

1.16

1.04

1.0

0.4

measures to facilitate indirect contributions, such as the “visualiza-

1.20

1.09

0.6

ticular attention from the public. In addition, the law introduced

From other sources (see note)

2,000

1.4

1.0

measures, “emissions trading,” an “environmental tax (carbon tax)”

From energy sources
Emissions(thousands of tons)

1.19
1.06

■ CO2 Emissions

Energy Consumption

Target1.20

cepts regarding global warming prevention. Among such

momentum, and we were able to almost meet our target for(target: 1,070 thousand tons). We thus surpassed initial targets■ Energy Consumption and Production Intensity since
Fiscal 1990

■ CO2 Emissions Intensity■General Trends and DENKA’s Approaches

declined, falling 270 thousand tons to 970 thousand tons

Message from the President

We contribute to the reduction of CO2 emissions through the application of
our accumulated technologies and products.

1,710

Target

1,550
1,490

Target

1,410

1,440

0.94

0.94
0.90

0.90

0.90

0.89

1,360

1,320

1,250

0.88

Target

1,240

0.8

2007

2008

2009

2010

(Fiscal
year)

1,020

1,000

970

0.6

facturing through final disposal of products. Experimental

Profilefootprint (CFP), that is, the totality of CO2 emitted from the manu-

750

approaches to determining CFP have already begun. “International

packages on a trial basis. In order to meet demand from expand-contribution” has been removed from the scope of the Kyoto

ing companies, we positioned our packaging materials used in theCredit system to constitute a new system that works between two

distribution industry as well as electronic materials used in the lightcountries: In this system, the amount of CO2 emissions reduced

electric field as our key LCA-related products. Given this, we havethanks to technological expertise provided by a country to its

promoted the introduction of LCA, a CFP calculation method, atcounterpart will be regarded as the expertise-providing country’s

our six domestic plants from the second half of fiscal 2008. Today,

contribution. This system is implemented on a trial basis.

we can respond to almost all inquiries regarding LCAs.

0.4
500

0.2

250

0

0.0

90

01

02

03

04

05

06

07

08

09

10 (Fiscal(Base year: Fiscal 1990)(3) Educational activities

steadily improving results.

As part of our in-house education about DENKA 100, our

07

08

09

10

(Fiscalyear)* Non-energy derived CO2 emissions are generated from raw materials
processing and waste disposal during the manufacturing process.
Addressing Global Warming

before such measures had been established, and have recorded

06

Environmental Burdens Reduction Promoting Department played aleading role in educational activities aimed at reporting on the sta-

■Fiscal 2009 Results

tus of global warming prevention measures undertaken by the

Fiscal 2010 Initiatives
Companies will shoulder more of the environmental burden due to various measures contained in the Basic Law for(1) Direct reduction of CO2 emissions

Japanese government and local municipalities as well as on our

We participated in the voluntary action plan of Nippon Keidanren

current activities and future plans for global warming prevention

through an association to which we belong. In 2009, we also par-activities. In fiscal 2009, we held lectures at our research facilities,

issues as “managerial issues.” The following are our major initiatives to take measures against global warming in a

ticipated as a target setting group in the pilot emissions trading

six domestic plants, domestic manufacturing affiliates, branches

sustainable manner.

scheme set up by the Japanese government based on a voluntary

and three factories in Singapore.

Prevention of Global Warming. From the CSR perspective, companies are also required to address global warming

Environmental Initiatives

We proactively reduced CO2 emissions from operations long

05

year)

(1) Shifting to fuels that impose a low CO2 emission burden

action plan. Aiming to achieve a Companywide CO2 emission■CO2 Emissions

intensity of 1.14tons-CO2/ton-CaC2 by fiscal 2010, we strictly

supply was from our hydroelectric generation plant, which uses hydropower, a renewable energy source. In addition to this,CSR Initiatives

engage in energy conservation. As a result, we see steady prog-

We will strive to reduce the use of fossil fuels and shift to other fuels with low CO2 emissions. First, 33% of our electricity
we are increasing the use of natural gas. With relatively lower CO2 emissions compared with other fossil fuels, natural gas

ress. Although we have already attained our fiscal 2009 target, we

Setting up the target of reducing our energy consumption intensity

will make continuing efforts.

to 87% of the 1990 level in fiscal 2010, we are striving to reduce
CO2 emissions by promoting energy conservation activities and the(2) International contributions(2) Indirect reduction of CO2 emissions

use of clean energy. In fiscal 2009, our CO2 emissions derived from

Over a history of nearly 100 years, we have accumulated a wealth of technologies, a number of which are expected to con-

Ahead of other industries, the distribution industry adopted theenergy fell 120 thousand tons to 1,320 thousand tons (target:

tribute to energy conservation and CO2 emissions reduction in emerging countries. By offering such technological expertise,

CPF system to display the volume of CO2 emissions on product1,390 thousand tons), while emissions from other sources also

we aim to make contributions to CO2 emissions reduction on a global scale.

usage will result in lower environmental tax (carbon tax).

(3) Contributions through environmentally friendly products
REPORT

What is Sustainability?

Kotaro Takada, Manager of Environmental Burdens Reduction Promoting Department

In recent years, we often hear the word “sustainability.” Although it originally meant to preserve thenatural environment, this word is now used in diverse situations.

more than that of CO2; therefore, the reduction of nitrous oxide emissions by 1kg is equivalent to a 310kg reduction in CO2

On a global scale, economic development in China and India is anticipated along with popula-emissions.
In the Research and Development Department, we are developing new products that can contribute to environmental

and fossil fuels is predicted. Although water and mineral resources are recyclable, food and fossil

preservation. For example, SiAlON Phosphor, which is used in the LEDs of LCD TVs, boasts high heat resistance and thus

fuels are limited. Therefore, it is necessary to break dependence on fossil fuels from overseas on theenhances brightness when the electrical current used is applied. Enabling a reduction in the number of LED backlights andenergy security front.

thus to conserve energy, SiAlON Phosphor can also bring beautiful images and longer life to LCD TVs. We have an array ofthe earth. Based on this belief, we plan to carry out actual measures.

DENKA CSR REPORT 2010

Referencetion increase in the two countries. Together with this, a shortage of food, water, mineral resources

Building such a point of view about energy use will lead to the sustainability of companies and18

According to an analysis, our calcium cyanamide fertilizer is said to reduce the emission of nitrous oxide from the ground.
Based on this report, we are carefully studying the fertilizer. The greenhouse effect from nitrous oxide is said to be 310 times

other environment-friendly products and are planning for proactive promotion activities from the viewpoint of addressing
global warming.

DENKA CSR REPORT 201019

Environmental Initiatives

Environmental Initiatives

Electric Power Initiatives

Rationalizing Logistics

Promoting modal shifts, we will contribute to CO2 emissions reduction
from the logistics front.

contribution to the reduction of CO2 emissions.

■ DENKA’s History of Hydroelectric■ Complying with the Amended Law

Our oldest power generation facility is approximately 90 years

Power Generation

TOPICS 1

Concerning the Rational Use of Energy

old. However, the electricity supply remains stable thanks to our
When producing calcium carbide or acethylene, a certain amountof electricity is required. Founded in 1915 as a pioneer in carbide

implementation of appropriate maintenance even as we aim toincrease power generation by applying leading-edge technologies.

chemical foundations, DENKA faced the pressing issue of how tosecure a stable electricity supply at a reasonable price. However,■ Breakdown of Electricity Use by Power Source

Establishment of automated constanttemperature storage for chloroprenerubber at the Omi Plant

As a designated emitter, we are aiming to boost transportation

In May 2010, we commenced the utilization of large-scaleefficiency and improve logistics quality. To that end, we con-automated constant temperature storage for chloropreneduct Companywide activities under the leadership of therubber established on the premises of the Omi Plant. This

Logistics Rationalization Project Team through such groups as

new storage facility was constructed to enable increased

the RC Promotion Committee, the Earth Committee’s Logistics

exports from local ports. The aim was to double our stor-

was necessary to first construct a hydroelectric power plant.

We use five kinds of power sources, including our own hydroelec-

Process Subcommittee and the Container Cargo Logistics

age capacity along with the reinforcement of production

Energy conservation was also important to ensure product com-tric power plants, three thermal power plants, a natural gas cogen-

Information Exchange Group.

capacity in early 2010 as well as the number of facilities for

petitiveness.

eration* facility, a power generation facility using waste heat,** andSpecifically, we have reviewed logistics within our plants

Upon the commencement of manufacturing of calcium carbide

purchased electricity. Looking at all our power sources, clean ener-

from a manufacturer’s perspective; expanded the use of local

at the Omi Plant in 1921, we constructed the Kotakigawa Powergy sources, such as hydroelectric, natural gas and waste heat-ports for container cargo transportation; increased railway

As part of these activities, we introduced a state-of-at that time the electricity infrastructure was underdeveloped and it

overseas shipments, which accounted for approximately

Plant. Most of our existing hydroelectric power plants were con-based generation, account for approximately 52% of our total

container transportation; and implemented the thoroughstructed before the 1960s. Today, we have six hydroelectric power

energy consumption.

streamlining of logistics. We are also making efforts to stream-

directly from the production line via a conveyor belt andline logistics at our affiliates both in Japan and overseas.

automatically controls the entry and dispatch of products

Umikawa River. Combined with the five hydroelectric power plants

In fiscal 2009, our CO2 emissions from logistics fell 11,500

using bar codes. With this system, we strived to further

jointly established with Hokuriku Electric Power Company, the totalcogeneration facilities using natural gas. By doing so, we aretons from the fiscal 2006 level to 39,500 tons, reflecting a sub-improve our logistics efficiency. We will aim to promotepermitted output is approximately 110,000kW.

enhancing the clean energy ratio to the total energy use.

stantial drop in the cargo volume shipped by dedicated ships

modal shifts,

due to weak demand for cement. However, our energy con-while further

sumption intensity (amount converted into crude oil equiva-

reinforcing ourlents and divided by cargo volume) deteriorated 2.5% on

efforts in energy

average over four years (it is a 1.0% improvement if cement-

conservation.

sumption, these hydroelectric power plants offer clean energy that
does not generate greenhouse gases, and they thus make a large
Itoigawa
Omigawa

Kajiyashiki

UmikawaOmi* A power generation system using gas turbine that can simultaneously cater tothe demand for heat by utilizing waste heat** A power generation facility using waste heat from industrial furnaces

Total generated in-house

57%

Himekawa
14

Kubiki-Ono 10
9Oyashirazu
1

Hydroelectric(including
jointly owned)

7

2

13

Electricity
purchased

Nechi
Kotaki

43%

11

3

5
6
15

Kitaotari
Kita-otari
1
2
3
4
5
6
7
8

Omigawa Power Plant (3,300kw)
Kotakigawa Power Plant (4,200kw)
Oami Power Plant (25,100kw)
Otokorogawa Power Plant (8,400kw)
Yokokawa Power Plant No. 1 (10,000kw)
Yokokawa Power Plant No. 2 (16,000kw)
Umikawa Power Plant No. 1 (3,800kw)
Umikawa Power Plant No. 2 (4,400kw)

9 Umikawa Power Plant No. 3 (2,600kw)
10 Umikawa Power Plant No. 4 (900kw)
11 Himekawa Power Plant No. 6 (jointly owned; 26,000kw)
12 Takigami Power Plant (jointly owned; 15,000kw)
13 Nagatsuga Power Plant (jointly owned; 5,000kw)
14 Sasakura Power Plant No. 2 (jointly owned; 10,200kw)
15 Kita-otari Power Plant (jointly owned; 10,700kw)

We will further strive to save energy by drastically review-

Thermal power(heavy oil)

5%

Total
consumption
1.79 billion
kWh

The automated storage and equipment for
direct transportation from the production line

■ Promotion of Modal Shifts

33%(clean)Thermalpower(natural gas)

Since fiscal 2006, we have been promoting modal shifts fortransporting large cargo lots over long distances. We switchedfrom trucks to cargo vessels (ferries and roll-on, roll-off vessels)
and railway containers for the Chiba Plant’s shipments to the17%west of the Kansai region and for the Omuta Plant’s shipments(clean)to the Kanto region. As a result, we reduced CO2 emissions by

Cement process
heat-based power2%(clean)

13 tons year on year in fiscal 2009.

■ Progress in Modal Shifts from Truck to Shipand Railway Container Transportation

Export container loading hatch

TOPICS 2

Promotion of railway transportation to
the Isesaki Plant from the Omuta Plant

On April 30, 2010, the Omuta Plant conducted the test
loading of cargo contained in railway containers destinedfor the Isesaki Plant. Aiming to shorten the land transpor-■ Year-on-Year Reductions

tation distance, we devised a means of holding cargo
inside the con-Fiscal 2007 Fiscal 2008 Fiscal 2009

tainers using

Cargo subject tomodal shifts(1000t-km)

2,830

CO2 emission
reductions (t)

112

3,175

cushioning. We

968

commenced fullscale railway

13

transportation

Test loading at the Omuta Plant

Kotakigawa Power Plant

20

DENKA CSR REPORT 2010

Reference

158

on

Oami Power Plant

CSR Initiatives

4
Hiraiwa

portation.
ing the operation of dedicated ships for cement transportation.

8

12

related transportation was excluded) due to inefficient trans-■ Power Sources in Fiscal 2009

Hayakawa

Environmental Initiatives

In thermal power plants, we are promoting fuel shifting fromheavy oil to natural gas while increasing the number of gas turbine

Electric Power Initiatives/Rationalizing Logistics

plants mainly along the Himekawa River System and four along theProfile80% of the total shipments.
the-art transportation facility that can receive products

Accommodating approximately 33% of our total energy con-

Message from the President

We are contributing to the reduction of CO2 emissions by utilizing clean
energy, mainly hydroelectric power.

June

4,

2010.

Tomi Gas Turbine at Omi Plant

DENKA CSR REPORT 201021

Environmental Initiatives
Output■ Waste■ PRTR Substances Emissions
To achieve PRTR substances emissions reduction, we analyze
major causes in order to determine effective measures whileplanning to upgrade facilities. Despite a recovery in production
volume in fiscal 2009, we reduced emissions by 2 tons by■ Emissions■ Nitrogen Oxide (NOx)■ Soot and Dust

Despite a slight recovery in overall production compared with the

In fiscal 2009, emissions rose approximately 27% compared with

Plant to a more environment-friendly item, mainly to reduceprevious fiscal year, emissions decreased approximately 11% due

the previous fiscal year due to the increase in the utilization rate of

VOC emissions by 28 tons.

In fiscal 2010, we will switch solvents used at the Chiba(tons)

disposed of by the Omi Plant by promoting a cutback in final
side the plant. The total Groupwide emissions ratio dropped to
0.51%; therefore, we have achieved zero emissions (final disposal amount/amount of waste generated × 100 < 1). We will

(tons)(tons)

1,000

40(tons)

6,000

300

5,900
5,520
5,200

4,900

37.5
297

800

778

250

5,010

30

4,810
4,470

667

222

4,180

4,000

862

Target

5,680 5,670

200

Target

150
142

147

100

1,000

50

20

490

149

149

400

123

117

2,000

584

191
172

3,000

649

600

200

3,800

363

242

200

232

0

0

01

02

03

04

05

06

07

08

09

10

90

01

02

03

04

05

06

07

08

09

10

146

6.8
118

4.0

0

(Fiscalyear)

We cut emissions about 39% by switching from heavy oil to sulfur-

During the year under review, emissions climbed approximately

free natural gas. We are exerting ourselves to reduce emissions

13%. We will strive to reduce emissions by systematically develop-

further in fiscal 2010.

ing water treatment facilities.

■ Fiscal 2009 Substance Emissions and Transfers
The following table shows emissions and transfers exceed-(tons)

5,000

4,000

4,000
3,000

2,860

3,040 3,040 2,870

2,600

2,000

2,060
1,910
1,670 1,630

2,080
1,460 1,480

1,740
1,440

01

02

03

04

05

06

07

08

09

1,116 1,114

Target150

90

Target
991

1,000

0

10

01

02

03

04

05

06

07

08

0.5

0.6

09

10 (Fiscal
year)● Carbon management briefing session at
Shibukawa Plant

Emissions

AmounttransTotal ferred“carbon management” and “introductory education
about LCA” at the Shibukawa Plant.

Water

Soil

Landfill

Zinc

0

0

0

0

0

2

Regarding carbon management, lectures wereAcrylonitrite

5

0

0

0

5

12

held with the themes of the Company’s global warm-

Acetaldehyde

2

2

0

0

5

0

ing countermeasure situation and predictions about

Aniline

0

0

0

0

0

6

the possible impact of the commencement of emis-

Ethyl benzene

4

0

0

0

4

54

sions trading. The Shibukawa Plant made a start by

Ethylene glycol

0

9

0

0

9

6

conducting an LCA of its product DENKA

Vinyl chloride

6

0

0

0

6

0

HITTPLATE.

Cobalt and chemical compounds

0

0

0

2

2

0

Vinyl acetate

19

0

0

0

19

0

1,350

1,000
870

97

CSR Initiatives

2,000

2.9

Air

3,570

3,000

2.9

Reduction Promoting Department held a seminar on
PRTR substances

4,300

Target3.7

In November 2009, our Environmental Burdens

ing one ton of substances on the register.
(tons)

4.9

Output■ Chemical and Biochemical Oxygen Demand (COD・BOD)

4.6

0

98 99 00 01 02 03 04 05 06 07 08 09 10 (Fiscal
year)■ Sulfur Oxide (SOx)

5.0

0(Fiscalyear)● City road cleaning activities by Hinode Kagaku Kogyo

90

01

02

03

04

05

06

07

08

09

10

(Fiscalyear)

After cleaning, we planted tulip
bulbs

0

0

0

0

0

24

Styrene

28

0

0

0

28

156

Water soluble copper salt

0

3

0

0

3

5

Toluene

51

0

0

0

51

30

Bis (2-ethylhexyl) phthalate

0

0

0

0

0

2

Hydrogen fluoride

0

0

0

0

1

25

Boron and boron compounds

0

10

0

0

10

5

2-ethylhexyl methacrylate

0

0

0

0

0

2
18

Methyl methacrylate

2

0

0

0

2

Total

119

25

0

2

146 346

Dioxins (mg-TEQ) (see note)

98

42

0

0

140

Carbon management briefing session

Reference

We have been cleaning city roads along the nearby riverfor 10 years. Every spring and autumn, employee
volunteers pick up trash along the roads and plant flowers.
For example, tulips we plantedin autumn 2009 bloomed in
the spring of 2010, pleasing
passers-by.

Dimethyl formamide

0Units: tons (excluding dioxins)
Note: Toxic equivalents
City road cleaning activity

22

DENKA CSR REPORT 2010

Environmental Initiatives(Fiscalyear)

10Target

210
148

90

Profile5,000

In fiscal 2009, we significantly reduced the amount of waste

continue our efforts to secure this condition.

waste both from inside and outside of the Company at the Omi
Plant cement facilities.

■ Final Disposal Amountdisposal (incineration) within the plant as well as recycling out-

improving facilities and operational efficiency.

to reduced cement production.

Message from the President

Denka strives to reduce the emission of substances and waste generated byits production activities while pursuing the appropriate treatment of such
emissions.

Blooming tulips along a city road

DENKA CSR REPORT 201023

Environmental Initiatives

CSR Initiatives

Environmental Accounting

In fiscal 2006, we began accounting for our investments and spending aswell as the environmental and economic effects of our activities in order toassess the impact of our conservation investments.
■ 1. Conservation Costs
In fiscal 2009, initiatives to save energy accounted for 60% of environmental investments, with research and development spending
to conserve resources representing another 31%.
Coverage: Plants and Research Institutes

Category

Conservation costs (millions of yen)

Details

Investments

Expenses

1,583

2,716

1. Business site costs(1) Pollution prevention

Environmental burden reduction measures(2) Conservation

Conserving energy(3) Recycling resources

203

1,890

1,365

79

Using resources effectively

15

746

2. Upstream and downstream costs

Changing raw materials

00

3. Administrative costs

Environmental education

026

4. R&D costs

Conserving resources

702

1,486

5. Social activity costs

Community relations

07

6. Environmental damage costs

0170

7. Others

0

0

2,285

4,406

Total

We believe that it is important for us to be a good company
that all our stakeholders, including local communities,
customers, suppliers, employees, shareholders and investors,
can rely on to achieve sustainable growth and create value.
DENKA’s concept of corporate social responsibility (CSR)
encompasses tackling environmental, safety, employment,compliance and social activities issues on a Companywide
basis. We must be proactive and accountable in dealing withthese issues.

Children’s chemistry classes (Central Research Institute) (See p. 35)■ 2. Conservation Effects
We calculated the environmental load data.
△ : Increase

Environmental load

Units

CO2 emissions (from energy sources)

Fiscal 2008 results Fiscal 2009 results

10,000 t

268

Effects229

39

SOx emissions

t

1,440

870

540

NOx emissions

t

5,010

4,470

570

Soot and dust emissions

t

117

149

△ 32

COD・BOD discharges
Water used

t

991

1,120

△ 129

1,000m3

81,60078,6003,000

PRTR substance emissions
Waste

t

148

146

7

1,000 t

108

100

8

t

2,900

510

2,390

1,000 t48

40

9

Final waste disposal
CO2 emissions from transportation■ 3. Economic Effects
We calculated proceeds from selling waste, energy savings, reductions in waste treatment costs and yield improvements.

Category

Profits

Item

Proceeds from selling waste from core operations
and income from recycling waste
Lowering energy costs by conserving energy

Cost reductions

Reducing waste treatment costs by conserving or
recycling resources

Total

24

DENKA CSR REPORT 2010

Details

Effects (millions of yen)

Sales profits

520

Conserving energy

264

Using resources effectively

55
839

DENKA CSR REPORT 201025

CSR Initiatives
CSR Vision

DENKA promotes CSR-related initiatives involving six pillars based

Measures to Ensure
Safety and Trust

Communication between
DENKA and Society

on DENKA100, a Companywide initiative to prepare for its centen-

Endeavor to prevent disasters andMaintain communications with soci-Actively strive to contribute to society

nial in 2015. This initiative is founded on the DENKA100 philosophy

gain the trust of members of the local

ety through appropriate information

as a good corporate citizen

to become a corporation that creates value from resources by fullycommunity

disclosure

Contribute to social development

utilizing advanced technological capabilities. DENKA undertakes

Work to ensure occupational safety

as a good member of the global

CSR promotion activities for its stakeholders—local communities,

and health; maintain clean and com-

community

customers, suppliers, employees, shareholders and investors.

fortable workplaces

Message from the President■ DENKA’s CSR Vision

Social Contribution
Activities

Such activities represent an important pillar of CSR initiatives.
In terms of DENKA’s CSR promotion activities, we have positioned the concept of “pursuing lasting trust as an outstanding

Society

manufacturer” as our CSR vision. In line with this vision, we areundertaking various measures Companywide to address a widearray of CSR-related issues in areas that include the environment,

Profilesafety, employment, compliance and social contributions. Basedon the CSR vision, the Group’s 10 CSR guidelines have been formulated as a set of CSR-related action guidelines.
Director, Managing Executive Officer
In charge of CSR Promoting Department

Mamoru Hoshi

Based on the DENKA100 philosophy, we will implement
CSR-related measures on a daily basis for the purpose ofEnvironmental Initiatives

CSR Vision

Pursuing lasting trust as an outstanding manufacturer“pursuing lasting trust as an outstanding manufacturer.”■ CSR Promoting Department Activities■ DENKA Group Guidelines
The CSR Promoting Department was established in 2007 as an officethat oversees CSR issues related to many areas of the Company andcarries out CSR activities Companywide. The CSR Promoting
Department collaborates with the DENKA100 Promoting Department
and the Investor Relations and Corporate Communications
Department to promote CSR internally and externally in the following
areas: 1. Defining basic CSR policies and comprehensive solutions
for the DENKA Group; 2. Educating and enlightening with regard toGroup CSR activities; 3. Publicizing CSR activities; and 4. Internallyand externally communicating CSR achievements.

Responsible Care (RC) Committee

Product Liability (PL) Committee

to laws and social norms
Respect fundamental human rights

Maximize customer
satisfaction and contributeto society throughbusiness activities

Ethics Committee
CSR Promoting Department

Security Export Control Committee
Risk Management Committee
Internal Auditing Department

Established in 2007

ucts and services that are environment

Undertake business activities that Adhere

Reference

Safety Measures Headquarters
Person in charge of
CSR Promoting Department

Supply and develop technologies, prod-

Thoroughly maintaincompliancefriendly■ CSR Organization
President

Effectively use resources
to help protect the global
environment

Provide products and technologies that
contribute to the development of society
Ensure a reliable level of quality

Investor Relations andCorporate Communication Department
As of April 2010

26

DENKA CSR REPORT 2010

CSR Initiatives

ber of the global community.

Management/
EconomyCSR Vision

1. We will promote sustainable social and business development out of a conviction that corporate social responsibility is the essence of business.
2. While constantly ensuring quality to maintain customer
trust, we will contribute to sound social progress bydeveloping and supplying products and services that aresafe and environment friendly.
3. We will operate fairly.
4. We will maintain a good level of communication with society and disclose appropriate information.
5. We will comply with laws and regulations and operate
fairly according to social norms.
6. We will maintain safe, clean and comfortable workplaces
and respect all basic human rights.
7. We will use, reuse and recycle resources to help protect
the environment.
8. We will maintain security and disaster prevention measures, participate in environmental protection activities
and communicate with society.
9. We will contribute to society as a good corporate citizen.
10. We will contribute to social development as a good mem-

The Global
Environment

DENKA CSR REPORT 201027

CSR Initiatives
Product Safety/Management System■ Product Safety Management
We ensure product safety at each phase—from development, production and use by customers—while focusing on maintaining andimproving quality.
1. Verify the Safety of Raw Materials and Necessary Quality Level
and Engage in Production Process Design

Materials Safety andManagement Flowchart
1. Development
Verifyif raw materialt i l safety
f tVerify necessary quality level
Production process design

We select and use raw materials for which safety can be verified while developing■ Collaborating in Chemical Industry Initiatives

Message from the President

We thoroughly undertake management operations that fully consider safety,
environmental protection and quality in all our processes, from raw materials
procurement to research, production, logistics, consumption and disposal.

Industry and the Ministry of the Environment to collect, disseminate and assess safety information. We are participating in areas● High Production Volume Program (HPV) andthe Japan Challenge Programof the program that relate to the substances that we use.

Through the HPV Program, we and other companies collabo-● Long-Range Research Initiative

rate under the auspices of the International Council of Chemical

The Japan Chemical Industry Association, the American

Associations to evaluate the safety of around 1,000 substances

Chemistry Council and the European Chemical Industry Council

that the Organisation for Economic Co-operation andoversee this program. The program entails conducting long-

Development has designated. These substances are usedterm basic research to correctly determine if and/or in what

heavily worldwide. In addition, under the Japan Challengemanner chemical substances affect human health and the envi-

Program, manufacturers are working with the Ministry of Health,ronment. We are cooperating fully in the implementation of thisLabour and Welfare, the Ministry of Economy, Trade andprogram.

products that conform with customer and legal demands. We establish production

2. Raw Materials

2. Green Procurement /Purchasing Specifications
We purchase and use raw materials based on the Negative List, which takes into

G
Green
P
Procurementt
Purchasing specifications

consideration Japanese and international environmental management regulations,as well as purchasing specifications that outline the required characteristics of purchased raw materials. Consequently, we are striving to manufacture superior
products from quality raw materials and production processes.

3. Raw Materials

3&5. Manufacturing Vendor Audits

Outsourced
materials production

We outsource some raw materials production processes and the manufacture of

Manufacturing vendor audits

expanding the scope of our efforts to include new products; and working to main-

We are pursuing ongoing improvement based on our quality andenvironmental management systems. We have secured ISO
certifications as follows:tain and improve quality, environmental protection and safety.

■ Management Systems

house standards for quality, logistics, environmental management and product safety.

4. Maintain/Improve the Environment and Quality
4. Production

We are undertaking environmental and quality management operations; gradually

ISO 14001, ISO 9001 andd GoodG d Manufacturing
M f
Practices(GMP: see note 1)(Maintain and improve environmental protection and quality)

6. Waste Contractor Audits
We commission waste contractors in keeping with the Waste Management and① 原材料

Notes 1. Good Manufacturing Practices (GMP) refers to standards that Japan’s Ministry of Health, Labour and Welfare established in its Ministerial
Ordinance on Standards for Manufacturing Control and Quality Control for Drugs and Quasi-drugs.
2. The Japan Chemical Industry Association created a labeling format to augment the Yellow Card system. The labels present emergency guideline
numbers and United Nations identification numbers for different chemicals transported in relatively small amounts on the same vehicle. The labels
aid in the proper handling of these chemicals in emergencies.
3. The Joint Article Management Promotion-consortium (JAMP)’s* Material Safety Data System plus (MSDSplus) and Article Information Sheet systems provide standardized formats for presenting information on substances subject to management. MSDSplus is mainly for substances andagents that are upstream in the supply chain. Article manufacturers produce Article Information Sheets based on that information. JAMP aims tospread its systems throughout Japan and Southeast Asia.
* JAMP is a cross-industry association established in Japan in 2006 to encourage companies to properly manage information on substances and compounds as well as on chemical substances in parts, plastics and other articles. JAMP also establishes mechanisms to disclose and present information
on supply-chain products.

ISO 14001

We regularly evaluate the operations and financial positions of these vendors and6. Disposal

Manufacturing
f t i vendor
d auditsdWaste
W t contractor
t t audits
ditRegistration
numberDate certified

Registration
numberOctober
16,1999

187071/A（BV）

August 19,
1994275156（BV）

visit their waste processing sites.

7. Management of Environmentally Hazardous Substances in Products
We established the Negative List, which lists substances that are considered to be

Omi Plant

ISO 9001

Date certified

7. ProductsManagementt off environmentallyhazardousit ll hsubstances in products (Negative List)

284330（BV）

November 7,
1998439189（BV）

Chiba Plant

May 31,
1999

180943（BV）

March 22,1995

155885（BV）

Division’s Pharmaceutical Department—controls the quality of

May 21,
2001

363444（BV）

October 23,
1996484541（BV）

Policy, DENKA aims to further increase quality assurance

November 9, JQA-EM1895 October 25,
2001
（JQA）
1996

JQA-1429（JQA）

Isesaki
Plant

September 30,
2003

1090712（BV）

428794（BV）

CentralResearch
Institute

July 5,
2004

352185（BV）

8. Displaying Yellow Cards and Yellow Card Container Labels
We also label containers to ensure swift and proper remediation. We regularly

Ofuna Plant

inform drivers of our requirements and conduct emergency drills.

9. Material Safety Data Sheets (MSDS)
9. Customers
Material safety data sheets (MSDS)
MSDSplus (see note 3)
AIS (see note 3)

information on environmentally hazardous substances contained in our products
to customers through the MSDS plus—which supplements information conveyed
on MSDS sheets—and Article Information Sheet systems.

28

DENKA CSR REPORT 2010

Fiscal 2010 Companywide Quality Policy
1. Strengthen quality-assurance systems for each product
Bolster collaboration between departments and plants for

February 28,
2008

physical and chemical hazards and health and environmental risks. The sheets
inform customers and help educate employees. We have begun disseminating

Companywide from all aspects.

each product

Reference

We produce these sheets for all products to ensure proper handling according topharmaceuticals.
In accordance with its Fiscal 2010 Companywide Quality

Shibukawa
Plant

We require drivers to carry yellow cards that explain post-accident procedures.
Y ll
Yellowcards
dContainer labels (see note 2)

the Omi Plant’s Quality Assurance Department of Pharmacy—
an independent organization established from the Manufacturing

data on items that do not meet regulatory standards is shared with production,

8. Logistics

regard to pharmaceuticals, for which quality is strictly checked,

October 28,
2000

harmful to the environment contained within raw materials and products. Analyticalsales, and the analysis and product management departments.

Quality Assurance Department oversees the quality assurance

Omuta
Plant

harmful substances in our products. The Denka Analysis Center (which is incharge of certifying measurements) analyzes the amount of residual substances

Established in April 2010, the Electronic Materials Division’s

CSR Initiatives

usage during the raw material phase and by decreasing the residual volume of

to ensure an appropriate level of safety for each product.

of electronic materials produced Companywide. Particularly withharmful to people and the environment. We are taking steps to ensure productquality and safety while reducing environmental load by placing restriction on

We make innovative use of our organizational structure in order

Product Safety/Management System

5. Outsourced
Processing
and Production■ Companywide Quality Activities■ Status of ISO Certification Acquisition

Public Cleansing Law, requiring them to issue manifests and confirm collection.

Environmental Initiatives

semi-processed goods. We regularly audit manufacturing vendors based on our in-

Profileprocesses that ensure consistent quality and thus trust in the products we develop.

2. Increase technological quality
Boost the level of quality of our manufacturing technolo-——

Note: Only the ISO9001 certification excludes the Central ResearchInstitute.

gies through the cooperation of relevant departments
3. Increase awareness among employees engaged in manufacturing
Maintain a high level of awareness and workmanshipamong employees in order to improve quality.

DENKA CSR REPORT 201029

CSR Initiatives
and operations departments conduct preliminary safety assess-■ Occupational Safety Record

Activities to “Cultivate Safety-Conscious Employees”

The number of people involved in occupational accidents requiring
time off in fiscal 2009 was as follows. The figures in parentheses are

In order to fully instill a culture of safety, we are undertaking activities
highest priority. The goal of these activities is to go 1,000 days with-

Subcontractors: 3（0.62）[

Number of deaths and injuries
Accident
frequency ＝Total number of working hours
rate

×（1 million）

ments and gather with in-house third parties to discuss risksof hazardous materials that would significantly affect the com-relating to fires, explosions and worker safety.

munities in which we operate. However, there were five safetyrelated problems, primarily involving leaks. We experienced
fewer problems compared with the previous year. Despite this,we will continue to investigate safety techniques by holding
safety management conferences, which serve as importantat the Ofuna Plant
to “cultivate safety-conscious employees” who make safety their

the accident frequency rates.

During fiscal 2009, we experienced no fires, explosions or leaks

out a single accident as well as to create a plant that we can bevenues for clarifying safety conditions and educating employees
about safe operating methods. Moreover, we will conduct fire
drills at business sites in conjunction with local communities.

]

ees who do not get hurt or cause others to be harmed.”

In particular, we emphasize preventing key lapses in areas
concerning disaster prevention and occupational health.
*The 4Ms: man, machines (facilities, equipment, tools) materials (raw materials
and components) and methods (including work methods/operations, processing conditions and formulas)

Improving Production Stability
Our security standards ensure not only that we operate withinpredetermined limits but also that we maintain optimal operating
conditions by reviewing the operations and facilities. For exam-

Comprehensive Emergency Drills Heldple, we rigorously investigate the operational causes of warn-

proud of. We are expanding activities so that all employees can playa key role in under the slogan “cultivating safety-conscious employ-

Message from the President

We endeavor to maintain safe and comfortable workplaces and prevent
disasters for society’s peace of mind.

DENKA: 5（1.00）

comes into play when we upgrade or modify facilities. Facilities■ Security and Disaster Prevention

Occupational Safety and Health, Security andDisaster Prevention

at the Omuta Plant

ings and make improvements to prevent fluctuations that lead

We conducted joint drills on March 17, 2010 with the municipal

to such circumstances.

fire department in anticipation of an electrical leakage-related
The rate if five people per 1,000 DENKA employees suffered accidents would be about 1.0.

The graph below plots the accident frequency rates.
2.5

DENKA
Subcontractors

Manufacturer average
Chemical industry average

2.0

disaster at the Omuta Plant. During the post-drill evaluation, we

1. Safety training sessions(1) Behavior drills(2) Danger simulations(3) Studying past accidents
2. Environmental Activities

received the comment that our primary focus should be fire pre-3. 3S Activities
4. Safe Work Environments
5. Key Safety Strategies
6. Safety Patrols■ Safety Education

vention. Based on such input, we will conduct further disasterWe provide programs that are specific to each business site.

prevention activities.

We are improving experiential education and teaching materials.

Profile(Frequency rate)

Overview of Safety-Conscious Employees

Experiential Education

1.5

We devote considerable effort to educating our employees
1.0

0.5

0

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 (Fiscal

Fostering Safety-Related Communication

to identify risks and respond appropriately. Examples include•The “Safety Bell” (bell patrol) involves the plant’s general manager

simulations of the dangers of ignition from static electricity, being

conducting safety inspections while ringing a bellcaught in machinery, cuts and falls, so employees learn•Department manager bell patrol strategy

the importance of following procedures and using the correct

Comprehensive emergency drills held at the Omuta Plant

protective equipment.

Aiming strictly to ensure safety, we revised our aggregate total of

Yutaka Hirashima, Manager, Environment
and Safety Section, Omuta Plant

Manager Reportinternal accidents in fiscal 2009 to include accidents in which injuries
were not severe enough require medical attention or time off. We areconducted jointly with the municipal fire departmentsite while continuing to strengthen basic safety measures.

once a year, with a variety of flammable and hazardous materials placed throughout the factory’s storage■ Occupational Safety and Health Management Systemfacilities and general work spaces. This drill helps toBell patrolcertification. In March 8, 2010, the Omi Plant acquired OSHMS certem. The Central Research Institute will upgrade its system in fiscal
2010 as a “Safety Model Business Site” established by the local

Manager ReportManager Report

Safety training (Safety Meister)Hisao Nishimura, Manager, Environment
and Safety Section, Ofuna Plant

Activities related to “cultivating safety-conscious employees” have increased our ability to predict danger and safety awareness, while incorporating elements of our studies

Hidenobu Tajima, Manager, Environment
and Safety Section, Omi Plantof past accidents. Through safety-

increase our in-house fire-fighting abilities, which we

At the Shibukawa Plant, we continue to implement
safety education through a wide array of curricula. To
that end, we carried out
an experiential education

programon

February 18, 2010 relat-

develop with the goal of first pre-ed to being caught orventing fires from occurring. If apinned down by machin-fire does take place, we want to

ery that has rolled overbe able to prevent it from spread-

during a major disaster.

ing by extinguishing it during theinitial stage.

At the Isesaki Plant as well, we continue to conduct

related training, I believe that ourChange Management

Making effective use of the OSHMS system at the Omi Plant,

efforts to point out safety are begin-

This encompasses establishing rules to assess risks and imple-a refresher course on

we are creating an environ-ning to be fully embraced by employ-ment measures where needed for changes in the 4Ms* during

forklift operations,ment that prevents occupa-

ees. Consequently, we will continue

production. Preliminary safety assessments are important whenemployees receivedt i o n a l a c c i d e n t s f ro mthese efforts in the years ahead.

building plants that use new processes. Change management

instructions by the fork-

various types of safety education for employees. During

occurring, taking steps tolift manufacturer to rein-increase safety and health,■ Occupational Healthand promoting a cheerfulforce correct operating
Forklift operation refresher course
at the Isesaki Plant

techniques.

Reference

Commercial operation

Pilot operation

DENKA CSR REPORT 2010

Assess process suitability
at planning stage

Undertake additional measuresprehensively manage risks while making systematic improvements.

tion of illnesses.

Confirm upon completionbusiness site. Based on the results of such assessments, we com-mental-health perspective through the early detection and preven-

Implement and produce

We perform risk assessments to evaluate the level of danger at eachtion. We are working to create a workplace that is safe from a

Detailed designs and orders

Risk Assessment

mental health-related measures and providing health-related educa-

Preliminary safety assessment

include following up on medical examination results, implementing■ Occupational Safety Activities

Decidewith industrial physicians and health care institutions. Such activities

Deliberate

We provide guidance to individual employees by working together

Determine facilities outline and budget

Ceremony held to present the Omi
Plant with an OSHMS certificate

Evaluate ways to reduce safety and security risks and reflect them indetailed designs and equipment production specifications

Review process

and active workplace.

30

Experiential education on beingcaught or pinned down by machinery at the Shibukawa Plant

CSR Initiatives

labor standards inspection office.

Safety Education (rolling forklifts)

Occupational Safety and Health, Security andDisaster Preventiontification, while the Omuta Plant is currently developing such a sys-

ReportA comprehensive emergency drill is systematicallybuilding occupational health and safety systems at each business

The Chiba Plant is operating a system based on its OHSAS 18001

Environmental Initiatives

year)

Producing Teaching Materials
We ensure through teaching materials that everyone can worksafely, even people newly assigned to work areas.

Confirm that instructions have been implemented
and deploy additional measures

DENKA CSR REPORT 201031

CSR Initiatives
Corporate Governance and Compliance

3. Internal Controls Reporting System■ Corporate Governance■ Internal Controls

The hotline’s mandate is to be fair and swift. It receives

This system under Japan’s Financial Services andreports from the Corporate Auditors’ Office and the labor

Exchange Act aims to ensure that financial statements areunion, which operate independently, as well as from thereliable.

Ethics Committee Administrative Office and general affairs

We conduct checks of Groupwide business proce-sections within all offices. People can send reports to an

We must meet the expectations and respect of shareholders,Internal control systems are fundamental to meeting society’s

dures to reduce mistakes and possible risks in keeping

external law firm. They can also e-mail reports to internalcustomers, local communities, employees, and other stake-

expectations and gaining its respect. We will continue towith the implementation standards of this system, swiftly

auditors.

holders. Corporate governance underpins social respect andimprove our systems in line with the policies of the Board ofaddressing any problems that are discovered. We issued

support. We have thus taken steps to improve both the Board

Directors. The following outlines details of the system.

an internal control report following the system’s implemen-

whistleblowers from discrimination and mistreatment.

1. Board of Directors and Executive Officers

the effectiveness of our internal controls based on an eval-system.

Two of our ten directors are external. In April 2008, weuation in line with assessment standards for generally

reformed this body to separate oversight and implementation

accepted financial reports.

■ Risk Management
It is important to understand the diverse and numerous

by eliminating ranks within the board while reinforcing its super-

An independent accounting firm (ERNST & YOUNG

hazards of corporate activities through proper risk control.

visory functions. The Board of Directors appoints executive

SHINNIHON LLC) audited our report and determined that

In general, each business unit is responsible for identi-

officers to run operations under the leadership of the president.

all significant aspects of our disclosure were proper. We will

fying and managing its specific risks. We maintain special

continue to maintain internal controls for the purpose of

sections and permanent committees to handle environ-ensuring the reliability of our financial reports.

mental, safety, product liability and export control issues

Corporate Governance System. The Board of Auditors includes

2. Internal Auditing Systemmanagement to ensure that our business properly serves

The Internal Auditing Department conducts our in-housestakeholders.

checks, with assistance from the Legal, Environment andthat affect the entire Company.

■ Compliance

We formulated our Risk Management Guidelines tocomprehensively tackle incidents that greatly affect corpo-

The Board of Directors similarly has two external members.

Safety, and Quality Management departments. It also works

We ensure management transparency by separating thatclosely with our Product Liability, Responsible Care and otherCompliance is essential for sustainable growth. We accord-

rate activities. We also set up the Crisis Measuresboard’s oversight from executive implementation.

committees based on their specific functions. Each depart-

ingly adhere to internal rules and legislation and refrain

Headquarters and the permanent Risk Management

ment and committee collaborates to educate on legislation andfrom acts that violate moral and ethical norms. In 2002, we

Committee.

audit operations. The results are reported to the Board ofcodified conduct standards in the DENKA Group Ethics

Directors as needed.

Policy.

The chart below shows our corporate governance structure, including the Internal Auditing System.

We established the Ethics Committee, which the presi-

ment internal audits by swiftly identifying and addressing any

dent chairs, to oversee compliance and enforce the policy.

violations (see page 33).

We adopted compliance policies for the Legal,■ Risk Management Overview

President

reports.

Board ofDirectors

CrisisMeasures
Headquarters

Monitor/InstructPrime oversight

Reference

DENKA CSR REPORT 2010that policy. The Ethics Committee quickly addresses

Financial Auditor (Auditing Firm)

Major
crisesCSR Initiatives

32

The hotline accepts calls on actions that may or do violate

Set up/Compliance Hotline

Audit

Safety Dept., and Quality Management Dept.)

Hotline in keeping with the DENKA Group Ethics Policy.

Monitor/Instruct

Other
risks

Report(Including Administrative Dept., Legal Dept., Environment andproblems that may arise. We set up the Compliance

Risk Management
Committee
Proxy organizations
Ethics Committee
Safety Measures
Headquarters
Responsible Care
Committee
Product Liability
Committee
Export Control
Committee

ReportAudits within Business Units

Conduct Audit/Auditing Staff

compliance systems by enabling us to fix organizational

Risk-specificcommittees

Reportt

Internal Auditing Department

Corporate Auditor’s
Department

This system covers any shortfalls in our internal control andReports on Emergencies

Internal Audits

AssistanttA

Affiliates

Appointment/Dismissal

Various Business Sectors

Corporate Auditor(Board of Auditors)■ Compliance Hotline System
ReportExecutive Officers

ReportExecutive Directors

Audit

ReportImplementation

Representative Director

Appointment/Dismissal

Election/Dismissal

grams run by the Human Resources Development Center.

Appointment/Dismissal
A

Appointment/Dismissal

Instruct

We educate employees on compliance through pro-

Reportdepartments.

Directors (Board of Directors)
Supervise

ReportEnvironmental and Safety, Intellectual Property and other

General Stockholder's Meeting

Corporate Governance and Compliance

We inaugurated the Compliance Hotline System to supple-■ Corporate Governance Overview

Environmental Initiatives

two independent members assessing our operations andProfilemanagement organization and bolstering our compliance

We adopted a Corporate Auditor System as the basis of our

The DENKA Group Ethics Policy specifically safeguards

tation in fiscal 2008. In fiscal 2009, this document declaredof Directors and our auditing system, while streamlining our■ Corporate Governance Structure

Message from the President

We are building a highly transparent corporate structure to earn the trust of
all stakeholders.

Businesses(including Sales and Manufacturing Divisions)
Administration(including Internal Auditing, Environment and
Safety, Legal and Accounting & Finance
Departments)

DENKA CSR REPORT 201033

CSR Initiatives
Social Contribution Activities

Omi
Plant

Chiba
Plant

His
ui-n
to
M o u o -Sa
ntain Marathon

Joi
rhood
ning in the Local Neighbo
Goi Rinkai Festival

Ofuna
Plant

E ng

he Comaging with tmunity through the Summer

Message from the President

Based on the DENKA100 Guidelines, we continue to communicate withpeople in local communities so as to be a trusted company.

Fest
ival

E

very year, the Ofuna Plant makes the grounds in front of its main
entrance available to the Fujimicho Town Association for theenjoyment of local residents on the day of the Summer Festival. On theevening of July 10, the first day of the festival this year, neighborhoodHisui-no-Sato Mountain Marathon, held every June in Itoigawa

very year the Chiba Plant deepens communication withresidents arrived in the early evening to hear a brass band from a local

the local community by setting up a booth at the Goi

primary school, which received great applause. Members of the plant’s

egories, from a grueling 30km course with an elevation differenceE

Rinkai Festival, which is sponsored by the local neighbor-

popular music club also performed for the enjoyment of the public. Onof 650 meters to a 3km course intended for grade school children.

hood association and companies located along the Goi

the following day, local children carried the Shiogama Shrine’s mini-

This marathon attracts over 700 hardy competitors fromseafront. Approximately 20 thousand people enjoyed them-shrine around the town, visiting the plant along the route.

throughout Japan. Operated by the public, the marathon wel-selves at the 35th Goi Rinkai Festival held on June 6, 2009.

City, is open to all comers and offers competitions in five cat-Children carrying the mini-shrine during the Summer Festival

Profilecomes volunteers and many Omi Plant employees participated in
the 2009 event. We will continue this support in the future as away to promote sports in the region.

IsesakiPlant

ighborhood Cleanu p P ro g r

amhe Isesaki Plant has from 2008 performed beautification day activities
beyond its premises. All Isesaki plant employees work to clean up
Environmental Initiatives

TNe

nearby Bando Park and the roadsides around the plant. In this effort to

The Denka booth

contribute to the community, all employees take part in weeding and col-Company employees participated as volunteers (June 21, 2009)

tival and
Shibukawa The Shibukawa Bellybutton Fes
Plant
Hydrangea Cultivationlecting empty beverage cans, fallen leaves and other waste. By undertaking beautification day activities—which promote efforts to beautify thepremises—every month and by participating in cleanup activities in andO

n July 24 and 25, 2009, the Bellybutton Festival held in

Cleanup activities along a road outside the plant areaaround the plant, we are enabling employees to broaden their relationships
with neighborhood residents.

Shibukawa City was the scene of “belly dancing,” with peo-

ple painting unique drawings on their stomachs and putting on an

Omuta
Plant

Inte
munityracting with the Com

enjoyable show as they danced in the streets. Many participantsfrom the Shibukawa Plant were among those covered by the local
TV news as they celebrated the festival.
ticipating in pulling weeds from the residents’ association-

Daijayama Matsuri, a summer festival held in Omuta, by

managed hydrangea beds in the median strip of National Highway

donating blood and, together with the local civic center, vol-17. In addition, employees are helping to maintain these flower

unteering for cleanup drives that are conducted twice annu-

beds.

Research Institute held a children’s chemistry class on August 5, 2009. In this class, fifth and sixth graders from a local

Machida elementary school were able to experience firsthand the characteristics of shrinking plastic film.
On September 24, 2009, on a social studies field trip, approximately 120 third graders from the same school visited theally, in the spring and fall. Omuta Plant also invites local
residents for plant tours and conducts children’s chemistryAs part of its enthusiastic participation in community exchanges as well as efforts to contribute to society, the Central

Hydrangea cultivation

institute to observe testing equipment and an electron microscope. The students asked numerous questions in what turned
out to be a meaningful trip outside of the classroom. The institute plans to expand the number of schools that visit, startingclasses to promote understanding about plant operations

CSR Initiatives

Employees also helped out with hydrangea cultivation by par-nity in a variety of ways, including joining in the Omuta’s Chemistry Clas
ildrenseshCg
HoldinSocial Contribution ActivitiesO

muta Plant employees interact with the local commu-CentralResearch
Institutewith a different school in June 2010, making such visits a regular part of its contribution activities to the community.

and the products made.

Reference

Children’s chemistry class (March 30,
2010)

34

DENKA CSR REPORT 2010

Plant tour offers a look at heat-sink andceramics testing room (January 25, 2010)

Making personal PET bottles with the shrinking film CLEAREN to create their own packages

Taking a look at the micro-world using an electron Children paying close attention to an explanation
microscopeby institute staff“Belly dancing” at the Shibukawa Bellybutton Festival

DENKA CSR REPORT 201035

CSR Initiatives
Human Resource Development
Message from the President

Positioning the development of human resources—one of the key
DENKA100 priorities—as a basic policy, the Human Resource Development
Center is taking a central role as it aims to create a workplace where eachand every employee can realize their full potential.

Good Company Program 2.0 Initiatives in Fiscal 2009
For society, for the environment, for customers and sharehold-To deepen understanding of GCP activities and shareers, and for DENKA associates, Good Company Program

information, DENKA issues the DENKA100 News, shares(GCP) activities hone on-site capabilities by changing the way

information Companywide via the GCP website, and puts up

employees think and by encouraging autonomy and proactivi-

GCP 2.0 posters.

ty. Participation is on a group basis, with groups consisting of
employees from the same unit and all employees attending.
Implementation of the GCP is the responsibility of manag-

Employee Educationers and requires 100% participation. Every six months, allemployees from a division will come together to clarify their pri-

The programs of our Human Resource Development Center help employees develop their career paths.

ority issues and are united in their efforts to find solutions.
By promoting GCP 2.0 along with DENKA100, DENKA■ Educational Objectives of the Human Resource Development Center

aims to attain its Good Company objectives by taking steps to

DENKA100 Newsreform awareness and improve operations while finding solu-

Anticipated Fruits of Training
Personal Growth:
Harness greater skills, knowledge, techniques and performance
to boost profits
Organizational Growth:
Improve team performance through collaboration within andbetween business units
Corporate Growth:
Enhance DENKA’s profitability, brand and reputation

GCP website where information is shared
Companywide

tions to problems. In this way DENKA is working to strengthen
and vitalize the Company from the inside out.

ProfilePersonnel Requisites(1) Strive constantly to better yourself through business andsocial activities(2) Always respect others and remain humble and positive(3) Always be selfless(4) Drive change through teamwork(5) Gain broad insights, superior problem-solving skills and theability to transform potential into reality(6) Be cost-conscious

GCP 2.0 poster

Respecting Diversity
We maintain various programs to provide comfortable working■ Preventing Sexual Harassment

environments for all employees.
We formulated a policy to prevent sexual harassment and have

■ Key Programs

3. Educational Support

thoroughly informed employees about it through our in-house■ Employing People with Disabilities

Environmental Initiatives

We assist employees taking language classes and correspondence

newsletter and our electronic bulletin board. The Ethics

1. Mandatory Job Level-Based Training

courses. We also support those seeking to acquire certain formal

Under these programs, employees acquire the knowledge they

qualifications.

We are creating safe workplaces so people with disabilities

need to fulfill their duties. We train new managers, young employ-

4. Business Unit Training

can realize their potential.

ees in their fifth year with DENKA, and other employees. The main

Each business unit identifies areas needing improvement and for-focuses are such business fundamentals as compliance and othermulates and implements its own programs. There is a constantlegal areas, as well as safety initiatives. We trained nearly 230

focus on establishing, planning and executing original educational

employees in fiscal 2009.

and training programs according to each operation to help improve

2. Specialist Courses

the knowledge and skills of every individual employee.

In fiscal 2009, 568 employees took accounting, business, informa-

5. DENKA Techno Schoolstion technology, trade, investor relations, corporate social respon-

Each business unit has opened a techno school to preserve oursibility and purchasing courses, with the purpose of acquiring thetechnological and skills resources and provide employees withspecialized knowledge required to undertake business operations.

expert and practical knowledge.

Committee maintains a consultation desk to handle employee
concerns.
Our work rules and labor agreements contain disciplinary
regulations regarding sexual harassment.

Percentage of Employees with Disabilities
2006
1.85%

2007
2.02%

2008
1.93%

2009
1.82%

■Work-Life Balance
DENKA is aware that securing a balance between life and work

Note: Figures for parent company onlyis an expectation of society.

creating a comfortable workplace that takes into account theto harness their technological knowledge and skills and passbalance between work and private life.

them on to younger employees. At the end of May 2010, we
had 277 employees who were retirees we reemployed on anonconsolidated basis.

Mandatory Job Level-Based Training

Managers

Manager program

New management
programAssistantmanagers Assistant manager program

Management(including legal issues, accounting, and CSR)

Sales
(including logistics, trade, and purchasing)Omi Plant
Omuta Plant
Chiba Plant

Labor and Management Relations■ Maintaining Good Relationships

Shibukawa Plant

Educational Support

Assistant chief program

Language courses

Ofuna Plant

organizations, regularly meeting with officials of The Denki

Correspondence courses

Isesaki Plant

Kagaku Labor Union and The Head Office Labor Union based

Subsidies for acquiring formal qualifications

Research InstituteTechnical worker program
Follow-up program
General staff program
New employee program(including patents, quality control, and analysis)

Business Unit Training

Management maintains positive relationships with employee
Reference

Regularemployees

Technical

Chief program

Personal
advancement
driving results

Five-year program

Specialist Courses
Company’s growth
contributing to social
progress

GeneralGeneral manager program
managers

on mutual good faith and otherwise negotiating with thesebodies. On August 27, 2010, with the sponsorship of the Head
Office Labor Union, the DENKA100 Promoting Department

Denka Techno School specialist education in skills useful for business

36

DENKA CSR REPORT 2010

CSR Initiatives

learn and use their capabilities in the workplace.

improving or revamping operations while moving forward on

In April 2004, we launched a program to rehire retirees in order

Human Resources Development

The schools encourage employees to grow by making it fun to

We will continue our ongoing efforts to raise productivity by■ Reemploying Retirees

supported a head office summer party.

The head office summer party

DENKA CSR REPORT 201037

CSR Initiatives

CSR Initiatives

Measures to Enhance Productivity

Research and Development Activities■ Aiming to Enhance Productivity■ Productivity Enhancement System

The aim of our efforts to Enhance Productivity, one of the six pillars
of DENKA100, is to increase our abilities in this area primarily by

President

improving production technology, introducing technological innovations and reducing costs.
Until now, technological upgrading was accomplished through

Person in overall charge of technologies■ Organic Materials

the accumulated efforts of individual departments, including eachplant’s engineering department. Such efforts, in turn, led to a steadyHead Office Staff Department

stream of results. However, we now need to address issues thatOmi Plant

Engineering Department
Production Process Department

To address major issues that can be solved only by concentrating Companywide technological capabilities, we are removing
barriers between organizational and business sites and bringing

Omuta Plant

together our business resources.

■ Build a System to Use Resources Effectively

Engineering Department
Production Process Department

Chiba Plant

Engineering Department
Production Process Department

lished the Production Process Department at the Omi, Omuta andShibukawa Plant

Engineering Department■ Inorganic Materials

Chiba plants in fiscal 2009. Through the Production Process
Department, we have built a system that facilitates production
enhancement activities Companywide. In addition, we have pooled

Ofuna Plant

Engineering Department

the skills possessed by personnel from both inside and outside theCompany, regardless of organizational affiliation, in order to create
an organization that is able to help solve problems in this area.

Isesaki Plant

Engineering Department

Affiliated companies, etc.

Engineering Department

Beyond these initiatives, we are actively participating in thedesign of test facilities and product improvement activities owing
to collaboration between the Research and Development and the■ Electronic Materials
New organizations

Companywide
personnel andWe encourage young engineers to participate in projects thatinvolve solving various issues in order to pass along technologicalknowledge and further their overall education.

resources

In Electronic Materials, we are focused on developing productlineups concentrated particularly in the LED and power device
segments. In the LED segment, we received a basic patent
license for SiAlON Phosphor, a material owned by the nongovernmental organization, National Institute for Materials
Science (NIMS), for use in white LEDs. Subsequently, we
undertook research into the practical applications for thisflorescent material using synthesis technologies used for our■ Other Businesses
Denka Engineering Co., Ltd. designs and installs industrial
equipment. Its R&D is focusing on more efficient pneumatictransfer equipment for powders and wastewater treatment
facilities.

■ Research and Development Organization

CSR Initiatives■ Cultivating Next-Generation Engineers

ourselves further and propose new technologies that include
overseas expansion. New product development focuses on
the maintenance and repair market and ultra-high strength,
high-durability concrete products, notably ultra-high strength
fiber-reinforced concrete.
In fertilizers and inorganic products, we are conducting
R&D to strengthen our operations.

In polymer processing products for industrial materials, packaging and construction materials, we are taking advantage of ourcapabilities in adhesive coating, film and sheet and profile extrusion technologies to join hands with Group companies anddrive expansion. In particular, we are focusing on upgrading
production technology and capabilities for such new products
as weather-resistant films for solar cells and synthetic fibers
In pharmaceutical products, we are improving production
technology and developing new applications for fermented
high molecular hyaluronan, which improves joint function.
Denka Seiken is developing high-quality vaccines while developing bacteriological diagnostic reagents to detect infectious
diseases and viruses, clinical chemistry diagnostic reagentsand immunochemistry diagnostic reagents that are vital for
health management.

Measures to Enhance Productivity/
Research and Development Activities

Quality Management departments.

In special cement additives, we are seeking to differentiate■ Functional Materials and Plastics
Environmental Initiatives

As an organization dedicated to enhancing productivity, we estab-In the styrene-based functional resin segment, we are furthering research with the goal of developing appealing products.
To that end, we are reinforcing production technologies, particularly for transparent resins, thermal resins and shrink materials. At the same time we are redoubling our efforts to further
differentiate and increase the functionality of these products.
We are also taking steps to improve production technologies in order to expand our business in the organic chemicals
segment, which includes overseas markets. Amid these
efforts, we are developing new processes and grades basedon facilities upgrade plans to enhance our competitive edge,
particularly with regard to increasing our global share of chloroprene rubber.

Profileindividual departments cannot solve by themselves due to suchfactors as insufficient technological capabilities and personnel.

We undertake the reinforcement of in-house technologies tofacilitate further improvements to our high-quality products. At
the same, we focus on developing highly functional products
in growth areas centered on these technologies; strive to rapidly meet market demands; and work to position our R&D
operations toward the aim of achieving the early commercialization of products.
In fiscal 2009, we allocated ¥9,615 million to R&D operations, which employed 629 researchers. During the year, we
had 193 outstanding applications in Japan and registered 263
patents (including for utility models) domestically.

Message from the President

We will take measures to enhance productivity by promoting
technological innovation and by strengthening our productive andorganizational capabilities.

nitride-type ceramics. Owing to these
efforts, we achieved the world’s firstpractical application of SiAlON
Phosphor. We aim to make SiAlON
Phosphor the de facto standard as afluorescent material for the white LEDs
used in LCD TV backlights—for which
demand is expected to rise rapidly— SiAlON Phosphor for
white LEDs
while moving forward on the development of fluorescent materials that aresuitable for use with LED lights.
In power devices, we have until now conducted R&D that
focused on thermal materials (substrates, organic and inorganic compound materials). We have received assistance inthis area from the Ultra-Hybrid Material Technology
Development Project of the New Energy and Industrial
Technology Development Organization (NEDO). As result, wehave developed organic and inorganic compound materials
that have the world’s highest heat conductivity level (36.2W/
mK). This was achieved by manipulating advanced orientation
technology related to our boron nitrate (BN) powder, which isused in epoxy resin. In the years ahead, we will promoteresearch into practical applications for this material.
In electronic packaging, we have focused on developing
new products related to tapes for transporting electronic components and process tape for manufacturing semiconductors.
In functional ceramics, we have pursued higher performance in
spherical fused silica for semiconductor sealants and sphericalalumina for thermal materials and semiconductor sealants.

Advanced Research Dept.
Central Research Institute

Biochemistry Research Dept.
Material Characterization & Analysis Dept.

President

Fine Electronic Materials Research Dept.
Electronic Materials Institute

Reference

Functional Electronic Materials Research Dept.
High Performance Polymer Research Dept.

Person in overall charge of research and development
Polymer Technology Institute

Polymer Processing Research Dept.
Elastomer Research Dept.

Research and Development Department

Ceramic Research Laboratory
Inorganic Materials Research Laboratory

The Omi Plant’s new chloroprene plant, which has achieved enhanced productivity

38

DENKA CSR REPORT 2010

Note: The person in overall charge of research and development oversees research policies, resource allocation and other areas for all of the Company’s research
departments.
DENKA CSR REPORT 201039

Reference
Consolidated Financial Statements

Millions of yen
AmountAccount item

As of March
31, 2010

As of March
31, 2009

AmountAccount item

Current liabilities

Cash and time deposits

Notes and accounts receivable,
trade¥138,360¥122,862

6,856

6,126

74,843△ 288
55,396

Allowance for doubtful accounts

44,41313,017(770)

48,973

Intangible fixed assets

207,005

3,476¥323,875¥334,130

Cost of sales

251,411

271,590

Selling, general andadministrative expenses

50,80952,23721,655

10,302

Net sales

Notes and accounts payable, trade

45,49927,246

Short-term bank loans

48,70949,730Commercial paper

9,000

11,000Non-operating income

1,543

1,968

—

10,000Non-operating expense

6,310

9,176

47,48039,057

16,888

3,094

Long-term liabilities

89,40190,734Extraordinary gains——

Corporate bonds

25,00020,000Extraordinary losses

1,048

1,132

Long-term debt

37,86645,034

Income before income taxes

15,839

1,961

Other long-term liabilities

26,53425,700

Income taxes—current

6,960

1,322

240,091

227,769

Income taxes—deferred(1,644)

(787)

49

(13)

Current portion of corporate bonds

Operating income

Ordinary income

AmountFiscal 2009

Fiscal 2008

Net cash provided byoperating activities¥46,418¥ 5,794

Net cash used ininvesting activities(28,377)(33,876)

Net cash (used in) provided byfinancing activities(17,262)

31,096

Effect of exchange ratechanges on cash andcash equivalents

(40)

(71)

Net increase in cash
and cash equivalents

738

2,942

6,077

3,162

—

(27)

6,815

6,077

Account item

12,618(253)

255,049

Minority interest in earningsof consolidated subsidiaries

Net Assets
Property, plant and equipment

Fiscal 2008

202,310

4,956

Shareholders’ equity

147,190

139,186

Common stock

36,99836,998

Capital surplus

49,30349,303Retained earnings

64,55056,581

Treasury stock, at cost

(3,662)(3,697)

Valuation and translation adjustments

10,634

8,414

Minority interests

2,491

2,542

Net income¥ 10,474¥

1,439

Cash and cash equivalents atthe beginning of the year
Increase of cash and cash equivalents
resulting from inclusion and exclusionof subsidiaries from consolidation
Cash and cash equivalents
at the end of the year

Consolidated Statements of Shareholders’ Equity for Fiscal 2009
(April 1, 2009, to March 31, 2010)

Investment securities

Other

Allowance for doubtful accounts

39,492

12,383

Millions of yen

34,036

14,035(288)¥400,407¥377,912

Shareholders’ equity

Total net assets

160,316150,142

Total liabilities and net assets¥400,407¥377,912

Commonstock

CapitalsurplusRetainedearnings

Valuation and translation adjustments

Treasurystock
at costTotal
Unrealized Revaluation
shareholders’gain onreserveequitysecurities
for land

Balance at March 31,¥36,998 ¥49,303 ¥56,581 ¥(3,697) ¥139,186
2009¥2,314¥7,610ForeignTotal
currency valuation andtranslationtranslation
adjustments adjustments¥(1,510)

Minority
interests

Total net
assets¥ 8,414 ¥2,542 ¥150,142

Changes of items
during the term

CSR Initiatives(310)

Environmental Initiatives

262,046

Fiscal 2009

¥137,034

Total liabilities
Non-current assets

AmountConsolidated Statements of Cash Flows(Summary)
Millions of yen

ProfileOther current assets

Account item

Millions of yen¥150,689

Other current liabilities
Inventories

As of March
31, 2009

Liabilities

AssetsCurrent assets

As of March
31, 2010

Millions of yen

Consolidated Statements of Income(Summary)

Message from the President

Consolidated Balance Sheets (Summary)Issue of new shares

Total assets

Dividends fromretained earnings(2,455)(2,455)—(2,455)

Net income

10,474

10,474—

10,474

(21)

(21)

—

(21)

57

57

—

57

Net increase intreasury stock
Gain on sales oftreasury stock

0
—

—

—

—

Changes in the equity
method application scope

(63)

(63)

—

(63)

Reversal of revaluation
reserve for land

13

13

—

13

—

3,046

(13)

(813)

2,219

(50)

2,168

8,004

3,046

(13)

(813)

2,219

(50)

10,173

Balance at March 31,¥36,998 ¥49,303 ¥64,550 ¥(3,662) ¥147,190
2010¥5,361¥7,597

Total changes of
items during the term

40

DENKA CSR REPORT 2010

—

0

7,968

35

¥(2,323) ¥10,634 ¥2,491 ¥160,316

DENKA CSR REPORT 2010

41

Reference

Net changes of items otherthan shareholders’ equity

Consolidated Financial Statements

Change in scope of
consolidation

Reference

Reference

Company Information

Third-Party Audit■ Board of Directors(as of March 31, 2010)

Established:

May 1, 1915

Paid-in capital:¥36,998,436,962

Message from the President■ Corporate Data(as of June 22, 2010)

Directors, Corporate Auditors and Executive Officers
Seiki Kawabata ............... President and Representative Director, Chief

Employees: 4,742 (consolidated) and 2,718 (non-consolidated)

Executive Officer

Tetsuro Maeda ................ Representative Director, Senior Managing

Directory

Executive Officer● Head Office:Shinsuke Yoshitaka ........ Representative Director, Managing Executive

Nihonbashi Mitsui Tower, 1-1, Nihonbashi Muromachi

Officer2-chome, Chuo-ku, Tokyo 103-8338, Japan

Mamoru Hoshi.................Director, Managing Executive Officer

Tel: +81-3-5290-5055

Nobuyoshi Sakuma ........Director, Managing Executive Officer● Branches
Osaka, Nagoya, Fukuoka, Niigata, Hokuriku (Toyama), Sapporo
and Tohoku (Sendai)

Hitoshi Watanabe ...........Director, Managing Executive Officer
Kenichi Ono .....................Director, Managing Executive Officer
Daiichiro Uematsu ..........Director, Managing Executive Officer● Sales Offices

Kozo Tanaka ...................Outside Director● Overseas Sales Office

Tadasu Horikoshi ............Outside Director

ProfileNagano, Gunma, Hiroshima, Shikoku (Takamatsu), Akita

Hideo Oishi ......................Senior Executive Officer

Taiwan (Taipei)

Tatsuhiro Aoyagi..............Senior Executive Officer● Plants

Mitsukuni Ayabe..............Senior Executive Officer

Omi (Itoigawa Niigata), Omuta, Chiba (Ichihara, Chiba),
Shibukawa, Ofuna (Kamakura, Kanagawa) and Isesaki

Shotaro Fujii .....................Senior Executive Officer
Shinji Sugiyama ...............Senior Executive Officer● Research Institutes

Shohei Tamaki .................Executive Officer

Central Research Institute (Machida, Tokyo)

Hideyuki Udagawa .........Executive Officer

Electronic Materials Institute (Shibukawa, Gunma)

Norihiro Shimizu .............Executive Officer

Polymer Technology Institute (Ichihara, Chiba)

Environmental Initiatives

Manabu Yamamoto ........Executive Officer
Toshiharu Kano ...............Executive Officer

Major Affiliates

Kazuyuki Koyama ...........Executive Officer

DENKA Polymer Co., Ltd. (Koto-ku, Tokyo)

Akihiko Okuda .................Executive Officer

DENKA SEIKEN Co., Ltd. (Chuo-ku, Tokyo)

Sanshiro Matsushita .......Executive Officer

CRK Corporation (Takasaki, Gunma)

Yukinori Totake ................Standing Corporate Auditor

Hinode Kagaku Kogyo (Maizuru Kyoto)

Takayasu Tanaka.............Outside Standing Corporate Auditor

DENKA Azumin Co., Ltd. (Hanamaki, Iwate)

Kenichi Tsuchigame .......Corporate Auditor
Toshiaki Tada ...................Outside Corporate Auditor

Overseas Subsidiaries

Editorial Afterword

New York, Düsseldorf, Singapore, Shanghai, Suzhou and Hong Kong

■ Shareholder Information(as of March 31, 2010)

1,584,070,000

Shares of common stock issued

505,818,645

Number of shareholders

50,354

Major Shareholders
Number of Percentage
shares held of shares(thousands) held (%)

The Master Trust Bank of Japan, Ltd.
(Trust Account)

38,784

7.66

Japan Trustee Service Bank, Ltd. (Trust Account)

38,383

7.58

Japan Trustee Service Bank, Ltd. (Trust Account 9)17,010

3.36

Securities companies
16,554 (3.27%)

Foreign corporations andindividuals
126,681 (25.04%)

Financial institutions
202,200 (39.97%)

Individuals and others
130,315 (25.76%)

businesses that aim to make a contribution to the environment

measures we are taking to reduce greenhouse gasses as welland society. CSR Report 2010 also introduces a variety ofas our LCA activities. We are redoubling our efforts in both ofbusinesses that utilize energy conservation-related andthese areas.

numerous environmental technologies cultivated over many

We would greatly appreciate your candid feedback on thisyears by the Group. In order to sustainably grow along with

report. We would like the opinions of as many stakeholders associety, we will continue to hone technologies that contribute topossible and aim to reflect those views in our CSR activities.

the environment and society. We believe that cultivating suchbusinesses is our corporate mission.

Trust & Custody Services Bank, Ltd., as trustee
for Mizuho Bank Ltd. Retirement Benefit Trust
Account re-entrusted by Mizuho Trust andBanking Co., Ltd.

15,275

3.01

DENKI KAGAKU KOGYO KABUSHIKI KAISHA

14,7382.91

Mitsui Life Insurance, Co., Ltd.

12,908

2.55

Government of Singapore Investment Corporation
Pte Ltd.

7,819

1.54

Mitsui Sumitomo Insurance Co., Ltd.

6,916

1.36

Mitsui & Co., Ltd.

5,437

1.07

Citibank Hong Kong S/A Fund 115

5,398

1.06

Shareholder Composition by Number of Shares Held (persons)
10,000 shares or more
2,666 (5.29%)
Less than 1,000 shares
13,481 (26.77%)
1,000 to 4,999 shares
30,516 (60.60%)

5,000 to 9,999 shares
3,691 (7.33%)

years ahead.

activities, which involve implementing initiatives as a global
chemical company while voluntarily and actively taking action to

Mamoru Hoshi

address environmental as well as safety- and health-related

Director, Managing Executive Officer

issues. CSR Report 2010 provides a detailed explanation of

In charge of CSR Promoting Department■ For More Information
CSR Promoting Department DENKI KAGAKU KOGYO KABUSHIKI KAISHATEL. +81-3-5290-5511 FAX. +81-3-5290-5149
Nihonbashi-Mitsui Tower, 1-1, Nihonbashi-Muromachi 2-chome, Chuo-ku, Tokyo 103-8338, JAPANhttp://www.denka.co.jp
DENKA CSR REPORT 201043

Reference

3.15

We look forward to your guidance and encouragement in the
Company Information/
Third-Party Audit/Editorial Afterword

15,965

DENKA CSR REPORT 2010

Other domestic corporations
30,066 (5.94%)

Burdens Reduction Promoting Department announced the

Furthermore, we will continue to promote Responsible Care

National Mutual Insurance Federation ofAgricultural Cooperatives

42

Shareholder Composition (Thousand shares)

such activities. Against this backdrop, the Environmental

CSR Report 2010 includes special feature sections on

CSR Initiatives

Total number of authorized shares

Thank you for reading CSR Report 2010