Integrated Report2020

To Our Stakeholder

KINOSHITA Kojiro
President & CEO

1

Nissan Chemical Corporation Integrated Report 2020

Where it all begins
The global spread of COVID-19 is greatly changing society and the economy. At thesame time, various social issues, such as health issues, climate change, and food issues
are on the increase, threatening the sustainability of society.
Our company was founded as Japan's first chemical fertilizer manufacturer to solve
food issues which Japan faced in 1887 under the founding spirit “to dedicate ourselvesto prosperity of the nation by agricultural fertility.” The pioneering spirit has been still
very much alive at Nissan Chemical as we have continued putting effort into innovativetechnologies and projects that promote social progress, greatly transforming our business
operations.
We currently provide products and services on a global scale in four business domains(Chemicals, Performance Materials, Agricultural Chemicals, and Pharmaceuticals) for
realizing our corporate vision of the new era based on ESG (Environment, Social andGovernance) and SDGs (Sustainable Development Goals) established by the United
Nations.
As a Future-Creating Enterprise that Responds to Social Needs with Unique, Innovative
Technologies, we will continue to aim for synergistic development with society.

Mission Statement (Our Values)“Contribute to society with excellent technologies and products.”“Promote prosperity and welfare through concerted efforts to constantly develop new areas.”“Respect people who exhibit a sense of responsibility, originality and motivation.”
Corporate Philosophy (Corporate Purpose)
We contribute to society in harmony with the environment, based on our excellent technologies,
products and services.
Corporate Vision
A corporate group that contributes to human survival and development.
Business Model
Future-Creating Enterprise that Responds to Social Needs with Unique, Innovative Technologies.

Basic CSR Policy(1) Conduct sensible business activities as a member of the international community in compliancewith laws and regulations.
(2) Enhance corporate value by providing safe and useful products and services.
(3) Strive to achieve no-accidents & no-disasters and protect the global environment.
(4) Disclose information appropriately with a focus on communication with stakeholders.
(5) Create a cheerful and pleasant workplace by respecting the individuality and personalities, andpromoting health of employees.
(6) Conduct ourselves as good corporate citizens and decent members of society.

Nissan Chemical Corporation Integrated Report 20202

Editorial Policy

In 1992, we introduced responsible care activities,

Contact for inquiries about this reportand have disclosed the details of these activities via

CSR & Public Relations Office, Corporate Planning

Environment and Safety Report from 1999. The

Department, Nissan Chemical Corporation

Report transformed into CSR Report in 2013 andTEL: +81-3-4463-8123

Annual report in which business overview andE-mail: csr_pr@nissanchem.co.jp

financial section were included since 2016. Since
2018, we have included the materiality, process of

Scope of reporting

value creation, and detailed financial information in

The initiatives are described mainly in the financial and ESG

addition to the business overview, E (Environment),

information of the activities of Nissan Chemical Group.

S (Social), and G (Governance) information to makeConsolidated subsidiaries:
Nissei Corporation, Nissan Butsuryu Co., Ltd.,
Nissan Green & Landscape Co., Ltd.,
Nissan Engineering, Ltd., Nihon Hiryo Co., Ltd.,
Nissan Chemical America Corporation (NCA),

this integrated report easier to understand creating
mid- to long-term value of Nissan Chemical Group to
all stakeholders, including shareholders andinvestors.
We aim to make this report as a valuablecommunication tool by deepening our businessactivities and enhancing the content of the report.
Reporting period
FY2019 (April 2019 to March 2020)* The occupational accidents data (P50) is from January to December
2019.

IssuedIssued: November 2020
(The previous edition was issued in December 2019,

Nissan Chemical Europe S.A.S. (NCE), NCK Co., Ltd. (NCK)
Entities accounted for using equity method:
Sun Agro Co., Ltd., Clariant Catalysts (Japan) K.K.
Group companies:
In addition to the above consolidated subsidiaries andentities accounted for using equity method, NC Agro
Hakodate Corporation, Environmental TechnicalLaboratory, Ltd., Nissan Chemical Taiwan Co., Ltd.
(NCT), Nissan Chemical Product (Shanghai) Co., Ltd.
(NCS), Nissan Chemical Agro Korea Ltd. (NAK), Nissan
Chemical Do Brasil (NCB), Nissan Agro Tech India PVT.
LTD. (NAI), Nissan Chemical Materials Research(Suzhou) Co., Ltd. (NSU), Nissan Bharat Rasayan PVT.
LTD. (NBR)

and the next edition is planned to be issued inFrequency of issuance
Annually

Information disclosure system
Summarized
Information

Nobemver 2021)

Integrated Report(this report)

International Integrated Reporting Council (IIRC)“International <IR> Framework”
GRI Sustainability Reporting Guidelines Standard
ISO26000
Ministry of the Environment “Environmental Reporting
Guidelines”

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Nissan Chemical Corporation Integrated Report 2020

Detailed
Information

Guidelines used as reference

WebsiteFor general users

For investors* For more detailed information, please visit our website.
https://www.nissanchem.co.jp/eng/Contents

Our Future-Creating Story
Message from the President
Message from the CFOIn the Spotlight
The History of Nissan Chemical
Main Products
Process of Value Creation
Materiality
Financial and Non-Financial Highlights
Business Strategies

5
11
15
19
21
23
25
29
31

Foundation for Future Creation

45
Strengthening of Nissan Group’s Business Base 47
Research and Development

Continuous Improvement of
Responsible Care Activities
Corporate GovernanceCompliance
Risk Management

49
51
59
62

Corporate Data
Financial Review
Corporate Information

65
79

Third-party Evaluation Nissan Chemical’s initiatives are highly regarded by external analytics and research organizations.

Nissan Chemical Corporation Integrated Report 2020

4

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Message from the President

KINOSHITA Kojiro
President & CEO

Looking Back at FY2019
Despite difficult business environments, including the impact of the global spread of COVID-19,
we achieved record high profits.
In FY2019, Japan’s domestic economy continued to showa moderate recovery trend against a background of
improving employment and income conditions. However, in
addition to sluggish exports due to slowdowns of overseas
economies, the impact of COVID-19 toward the latter half ofthe fiscal year has led to a stagnation of the global economy,
having a significant negative impact on the Japanese
economy.
Under these difficult circumstances, the results for thecurrent fiscal year are as follows: Sales: 206.8 billion yen,
Operating income: 38.6 billion yen, Ordinary income: 40
billion yen, Net income: 30.8 billion yen. Operating income
and ordinary income reached record highs for six consecutive
years with net income reaching a record high for sevenconsecutive years.
While the impact of COVID-19 was clearly visible in the
fourth quarter of FY2019, I thought that the Company faredwell, given the circumstances and again recognized theimportance of building a business portfolio that is not easily
affected by changes in the external environment. In particular,
new agrochemicals and performance materials, our niche-top

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Nissan Chemical Corporation Integrated Report 2020

products, have contributed significantly to our businessresults. This made me recognize that products that meetcustomer needs can be sold in any environment. At the sametime, I also keenly feel the importance of early planning andimplementation of measures for changes in the businessenvironment.
Looking back at each segment in FY2019: As for theChemicals Division, high-purity sulfuric acid and AdBlue®
created increased revenue due to favorable customer
operations. However, profit of ammonia-based products, ourmain products declined due to a large amount of Chinamade melamine (such as adhesive materials for plywood),
which became surplus because of a slowdown in the
Chinese economy, flowing into the market, and the impact ofprice competition.
As for sales of display materials from the Performance
Materials Division, revenue greatly increased due to anincrease in demand for photo-alignment material for IPS liquid
crystal (IPS) corresponding high-resolution of display, not only
for smartphones, but also notebook PCs and in-vehicle
devices. Since IPS is relatively low costs compared to anCreating a new corporate image torespond to rapidly changing
business environments

expensive OLED, I predict that more photo-alignment
material for IPS will be used in LCD smartphone. In addition, I
expect demand for use of IPS in other devices, such astablets and in-vehicle devices. As for sales of semiconductormaterials, sales for memory devices recovered from the third
quarter and sales for logic devices remained strong, leading
to higher revenue. In regard to inorganic materials, sales ofoilfield materials stagnated due to a slump in oil prices which
reduced the willingness of users to invest, leading tocontinued cost control.
As for the Agricultural Chemicals Division, sales of
Fluralaner, an active ingredient for veterinary pharmaceuticals,
decreased due to customer inventory adjustment. In contrast,
our insecticide GRACIA®, which was launched in May 2019,has shown good results expanding sales. Our acquisition of
the fungicide Quintec® in third quarter also contributed tosales, significantly increasing overall sales.
In the Pharmaceuticals Division, sales of the active
ingredient of the leading product LIVALO®, an anti-cholesterol
agent, increased due to completion of an inventory
adjustment in Japan. Although sales also increased for US
and Europe bound exports, sales in South Korea decreased
due to price stagnation.
During latter half of FY2019, business environments
surrounding our company have changed greatly. Causative
factors include fear of economic stagnation at a level not

witnessed since the Great Depression due to the spread of
COVID-19.
Under these circumstances, the Nissan Chemical Group
has taken measures to prevent COVID-19 infection, including
maximizing the amount of home-based work performed byour employees. Such efforts are taken so that we cancontinue to provide products and services to customers
based on our BCP (Business Continuity Plan). We will further
strengthen our BCP based on the view that new type ofviruses will appear after COVID-19 as endemic disease
particular to East Asia in the future.
It is important to be aware that even if the spread of
COVID-19 comes to an end, nothing will return to how it
once was, including work styles. Mankind and society always
evolves after major crises. How we overcome thisunprecedented crisis and create a “New Normal” for Nissan
Chemical shall be the key to controlling the future growth of
the Group.
We are quickly working to make changes to our company
culture, including the promotion of telework, elimination of
overtime work at night and promotion of early morning work
for actively working during morning hours. For that purpose,
we will promote various systems, such as rotation work, core
work day, staggered work, and develop a digital work
environment.

Nissan Chemical Corporation Integrated Report 2020

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Our Future-Creating Story

Foundation for Future Creation

Corporate Data

About Our Mid-term and Long-term Business Plans
While striving to achieve the targets of the “Vista2021” mid-term business plan,we will start to implement rolling forecasts for the “Progress2030” long-term business plan.
Based on the current changes in the businessenvironment, we are working on various long-term andshort- to mid-term issues. In April 2016, we initiated the“Progress2030” long-term business plan, which
focuses on our business efforts to 2030, and the“Vista2021” six-year mid-term business plan.
During the establishment of “Progress2030”, we held
many discussions addressing where we must head as acompany, what we can do and contribute to as acompany with a global perspective on social andeconomic changes leading up to 2030. The plan aims to
make Nissan Chemical “A corporate group that creates
better future for people and the environment by helping
to solve social issues” taking into account social issues
such as ESG (Environment, Social and Governance) and
SDGs (Sustainable Development Goals). For 2030, we
set numerical targets of 300 billion yen in sales and 50
billion yen in operating income. Based on our five coretechnologies we have cultivated, “Fine Organic
Synthesis”, “Functional Polymer Design”, “Ultrafine
Particle Control”, “Biological Evaluation”, and “OpticalControl”, we will contribute to solving global issues in thefour fields of “Information & Communication”, “Life
Sciences”, “Environment & Energy”, and “Chemicals &Affiliates”, and will strive to improve company value alongwith the development of society.
Four-year has passed since “Progress2030” wasestablished, over the next year we will implement rolling

forecasts and work on the establishment of the next
mid-term business plan, “Vista2027.” The new longterm business plan will cover a time period to 2050.
With a 2050 perspective, I expect that there will be
more diversity of creating hypotheses which will
improve our strategic capabilities.
In 2050, the world population will reach 10 billion andquantum computers will be put into practical use.
The world will most likely experience major changes andparadigm shifts, such as technological singularity (thetiming at which artificial intelligence (AI) exceeds human
intelligence) which is predicted to occur shortly before in
2045. It is possible that India and Sub-Saharan Africa(south of the Sahara Desert) will benefit fromdemographic dividend and may be developing
exponentially.
It is necessary to proceed the discussions on the
new long-term business plan with doubting establishedtheories and common sense without being caught up
in these assumptions by normalcy bias (thinking basedon past experience). For this aim, we will form a teamof young employees and proceed with the planning
process for about one year.
Under the currently implemented “Vista2021” midterm business plan, we aim to achieve the establishednumerical targets (sales of 235 billion yen, operating
income of 43 billion yen, ordinary income of 44 billion
yen, net income of 33 billion yen, and operating margin(billion yen)
60.0

(billion yen)
350.0

Vista2015Vista2021

50.0

50.0
43.0
40.0

30.0

35.0
171.2

176.9

180.3
193.4

37.1
204.9

300.0
250.0

38.6
235.0

200.0

206.8

31.4

150.0

28.6
20.0

25.3
100.0

10.0

0

50.0

2014

2015

2016

2017
Sales (right axis)

7

300.0

Nissan Chemical Corporation Integrated Report 2020

2018

2019

Operating income (left axis)

2021 (Target)

2030 (Target)0

of 18.3%) by overcoming the negative impact on
business caused by COVID-19. For this, we will focus
on further expanding products that drive profits andcreating new products designed for the future.
On April 1st of this year, the Planning andDevelopment Division was established for the purposeof accelerating the development of new materials in thethree areas of “Information & Communication,” “Life
Sciences,” and “Environment & Energy.” By 2030,
which serves as the final year of the current long-termbusiness plan, I believe it will be our greatest mission tocreate multiple business units from this division.

Corporate Vision in 2030
“A corporate group which provides
new values for helping to enrichpeople’s lives by integrating internaland external knowledge with facing
globally-changing society”“A group of first-class pioneers who
blaze a way to the future withenthusiasm by trusts they have built
and skills they have cultivated”

Sales Target in 2030 and Our Core Technologies
Information &Communication

Life Sciences

100 billion yen

100 billion yen

Environment & Energy
50 billion yen

Chemicals & Affiliates
50 billion yen

Fine Organic
SynthesisCore Technologies
Functional
Polymer
DesignUltrafineParticle
Control

Biological
Evaluation

OpticalControl

Nissan Chemical Corporation Integrated Report 2020

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Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Toward the Realization of a Corporate Image for a New Era
We will build a business portfolio that is resilient to changes
in business environments and review the state of our business units.
One of our long-term challenges moving forward isbuilding a stronger business portfolio. In particular, due
to COVID-19, building a business portfolio that is noteasily affected by business environmental changes is avery important management issue, a matter that has
attracted our attention. Our biggest challenge is tocreate new businesses and new products, especially
products designed to be competitive niche-top
products. In that sense, I am looking forward to the
incubation function of the newly established Planningand Development Division.
At the same time, reviewing existing businesses isalso an issue, especially for improving the profitability of
our ammonia-based chemicals business and rebuilding

our pharmaceutical business. Further effort for smart
agriculture, etc. is also a terrific theme. Among them,agrochemicals, which are our main products, arebusiness-to-consumer products which are the closest
to the market in our product group. In order to gain abetter understanding for the actual conditions of themarket as well as the conditions that farmers face, weare considering having primarily young employees stayin agricultural communities to conduct agricultural
surveys.
As another long-term challenge, we are reviewing
reorganization of our current business units which are
categorized by product to by market.

We will proactively promote CSR management and work to solve social issues as well as
contribute to local communities while taking ESG and SDGs into consideration.
Another long-term challenge is the active promotionof CSR (corporate social responsibility) management.
Contributing to the resolution of social issues based on
ESG and SDGs established by the United Nations, it isvery important to clearly establish the important issues
to tackle in order to realize the corporate vision in 2030
or future corporate vision in 2050. Continuous
improvement of Responsible Care (RC) activities is oneof those issues in which we work to reduce greenhousegas (GHG) emissions as a measure for climate change
mitigation. The most significant result achieved from

Nissan Bio-Park Nishi-hongo (Toyama)

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Nissan Chemical Corporation Integrated Report 2020

our efforts was the conversion of raw material and fuelfrom naphtha to natural gas for ammonia production at
the Toyama Plant, which resulted in a large
improvement in our energy consumption rate. We willcontinue to promote the reduction of GHG emissions
by improving processes while making necessary
investments in other plants as well.
In addition, as an initiative aimed at biodiversity, weare participating in Japan Business and Biodiversity
Partnership and proactive in related activities. We havebeen operating a biotope at the Toyama Plant which is
opened to the community. In the future, we aim todevelop environmental conservation activities, such as
biotope operation, in all areas where our plants andresearch institutes are located.

While working to maximize profits and cash flow,
we will build a BCP system to prepare for all risks.
The biggest challenges in mid- and short-term are
maximizing both profits and cash flow. We willconcentrate management resources on products thatare the source of growth and new products
development. At the same time, in the area of researchand development (R&D), we will revise/abolish research
themes based on market needs and review the
allocation of research personnel. During this time, it isalso important to reduce assets through means suchas business unit cost reduction, close inventory
examination, and optimization.
Furthermore, as measures against risks, we will build

a flawless BCP system by taking measures against awide range of risks that threaten business continuity,
including natural disasters such as earthquakes which
could occur directly under the Tokyo metropolitan area,and endemics such as COVID-19, climate change, etc.
Regarding risk assumptions, I think we are now being
questioned for our ability to use our imagination to
make various hypotheses. Since last year, when I
visited plants and research laboratories, I repeatedly
told employees “Be prepared”, before the current
spread of COVID-19. Now I think it is the time for each
employee to be thoroughly prepared themselves.

We will strive to improve productivity by incorporating cutting-edge digital technology anddevelop human resources capable of responding to matters.
Another important challenge in the mid- and shortterm is productivity improvement. We will actively
promote digital transformations that utilize digitaltechnology to respond to drastic changes in thebusiness environments and establish a competitive
advantage. How to realize labor savings in preparation
for the future decrease in the labor force as well as thestable and safe operation of the plants through thelatest digital technology are very important issues.
Moreover, in the area of R&D, by accelerating
development particularly in materials area andconserving labor from routine office work, we aim totransform into a corporate group that demonstrates
high productivity. For this, I would like to see Nissan
Chemical become a company that can utilize not only
high-performance computers (supercomputers) as thelatest technology but also quantum computers in the
future. In addition, the development of humanresources who handle such cutting-edge technologies
is also a very important challenge. Through verificationof telework conducted in order to reduce the risk of
COVID-19 infection, we will strive to create and provide
an environment in which employees can maximize theirpotential and improve productivity.

Closing
It is expected that the COVID-19 crisis will not end injust a year’s time. This means that we will conductbusiness in a more unpredictable economic
environment more than ever before. Our Group will
ensure the grasp of change in any situation and strive
to establish a strong business foundation by graspingand steadily implementing measures to tackle various
issues, promote environmental awareness and social
contribution activities, and will work to become acorporate group that is trusted by all stakeholders.
I hope we can rely on your understanding and support
in the future.

Nissan Chemical Corporation Integrated Report 2020

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Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Message from the CFO

We will actively return profits to our shareholders while
focusing on investment to research and development.

MIYAZAKI Junichi
Director, Senior Executive Vice President, CFO

About Our Financial and Capital Strategies
Continuing to maintain an ROE of 16% or higher by placing
the highest priority on it as a management index.
The basis of our financial strategy is to place thehighest priority on ROE (return on equity) as amanagement index. We have maintained this policy
since the middle of 2000s, and aim for an ROE of 16%
or more in the “Vista2021” mid-term business plan(2019-2021). In FY2019, we achieved an ROE of
16.9% and maintained it at a high level, which is morethan double an ROE of 8% that is generally regarded
as acceptable.
The reason why we place great importance on ROE
is rooted in our corporate philosophy “We contribute tosociety in harmony with the environment, based on our
excellent technologies, products and services”. To
achieve this, instead of following the idea of producing
mass volumes of cheaper products like many othergeneral chemical companies do, our strategy is tocreate high value-added products and provide them toniche markets.

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Nissan Chemical Corporation Integrated Report 2020

As a management index which reflects this businessstrategy, we decided to place importance on an ROE
that matches the business concept of producing highvalue-added products using limited resources called“equity” (shareholders’ equity) to make profits. Our ROE
has continued to rise since being recorded at 9.5% in
FY2011.
The financial impact caused by the global spread of
COVID-19, which began in the latter half of FY2019, isrelatively small at the moment. Among our businessdomains, Agricultural Chemicals and Pharmaceuticals
are not easily affected by economic trends, and demandfor Performance Materials, such as materials forsemiconductor and display, is currently strong.
However, since there is no prospect of eradicating
COVID-19, I think it is necessary to pay attention to
future trends.

R&D Expenses(billion yen)

Personnel Allocation(Regular Position)

18.0
17.0
16.0
15.0
14.0

15.8

16.1

2015

2016

17.8

17.2

17.2
12%

2017

2018

2019

(FY)

R&D Expenses for Nissan Chemical

39%
30%

R&D expenses/Sales (comparison with general chemical manufactures)

19%

(%)
10.0
R&D personnel

8.0

Manufacturing and TechnicalDevelopment personnel
Sales and Marketing personnel

6.0
4.0
2.0
0.0

8.9

8.9

8.9

8.7

8.3

3.3

3.5

3.3

3.1

3.5

2015

2016

2017

2018

2019

R&D expenses/sales for
Nissan Chemical

Management division(FY)

Average of R&D expenses/sales for generalchemical manufacturers

About Our Investment Plan
We will continue to develop our own innovative technologies
and meet the demands of society.
We aim to change society for the better by constantly
creating innovative technologies and reflecting thosetechnologies in our products. For this, we are actively
investing in research & development (R&D). While theaverage of sales-to-R&D expenses ratio (R&D
expenses/sales) in the chemical industry is 3% to 4%,
our sales-to-R&D expenses ratio for FY2019 is 8.3%
(annual investment of about 17 billion yen). It has
maintained a high level (8% to 9%) for around the past
10 years. The majority of the breakdown is investment
in Performance Materials and Agricultural Chemicals.
In terms of human resources, about 40% of
employees of regular position are allocated as R&D
personnel (non-consolidated basis). In this way, I cansay that we are at a level where we can fully implement
various fiscal policies while giving top priority to R&D
investment.
Looking at past figures, our operating margin has
maintained levels of 10% or more for 17 consecutive
years from FY2003 to FY2019. This is a record that
only one other company in the chemical industry canclaim to have. That is why the chemical industry is anindustry where business performance is susceptible
to changes in the economy and other businessenvironments.
Our company, however, has secured profits without
being affected by the external environments by creating
new growth engines one after another, such as active
ingredients for pharmaceuticals and veterinary
pharmaceuticals, agrochemicals, and materials forliquid crystal display. Now that they are all fully matured,
the major issue is that next new engines that will
support our growth have not yet developed.
Although we have positioned regenerative medical
materials and materials for displays and sensors as thenext growth engines, they are still in the budding stage.
If these new lines of business are launched in the
future, some level of capital investment will be required.
All of the current growth engines are also created fromsteady R&D, and, in that sense, we will continue to firmly
secure about 9% of the sales for investment in R&D.

Nissan Chemical Corporation Integrated Report 2020

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Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Capital Efficiency and Shareholder Returns
We have achieved a total shareholder payout ratio of 75%,
including dividends and share repurchase.
We place great importance on returning profits to ourshareholders. The dividend payout ratio (dividend net/
income per share) was around 30% until FY2015, but
has been gradually increased since FY2016 to 42.8%
in FY2019.
In regard to capital efficiency, as I have alreadymentioned, ROE is given importance and the amountof shareholders’ equity is controlled. We have been
aggressively pursuing share repurchase to improve ourROE. Although the amount reached 10 billion yen in
FY2019, the repurchased shares were basicallycanceled in the same year. This makes it possible toactively return profits to our shareholders, including
dividends and share repurchase.
As a result, the total shareholder payout ratio ((total
dividend + share repurchase)/net income) has beenover the 70% range since FY2015 and was 75.1% in
FY2019. Considering that the average total shareholder

payout ratio of Japanese companies is about 45%, it
can be said that ours is at a fairly high level. The total
payout ratio target for 2020 and 2021 as provided in“Vista2021” is 75% (dividends of 45%, share
repurchase of 30%).
Furthermore, the equity ratio is currently over 70%,and since financial stability is sufficiently secured, I
believe that it is not necessary to accumulate a larger
amount of capital. Both cash and deposits are at a
sufficient level, and we are in a very favorable state interms of cash flow. I am able to say that we cancontinue to utilize this cash for investment andshareholder returns as needed.
While proclaiming the importance of shareholder
returns, some companies are reluctant to commit toinvestors in terms of total payout ratio, etc. As
promised, we will continue to stick to our policy of
being committed to investors without change.

Total amount of dividend/
Share repurchase/Total payout ratio(billion yen)
25.0

(%)
100
71

72

75

9.0

9.0

10.0

7.9

10.2

12.1

13.1

2016

2017

2018

2019

71

70

10.0

9.0

9.0

5.0
0

6.8
2015

20.0
15.0

Total amount ofdividend (left axis)

50

Share repurchase(left axis)0(FY)

Total payout ratio(right axis)

Total payout ratio(comparison with general chemical manufactures)

(%)
80

71

70

71

23

23

24

23

2014

2015

2016

64

72

60
40

35

20
0

Total payout ratio of
Nissan Chemical

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Nissan Chemical Corporation Integrated Report 2020

2017

2018

(FY)

Average total payout ratio ofgeneral chemical manufacturers

Number of Dialogue with Stakeholders Held in FY2019
With Institutional Investors

306
With Individual Investors

2
With Analysts

49
ESG Related Dialogues

2

Financial results briefing

Dialogues with Stakeholders
We will make management decisions by referring to the opinions received via dialogues.
We make opportunities for dialogues withstakeholders such as institutional investors andanalysts as much as possible, and actively explain andexchange opinions on mid- to long-term growthstrategies and efforts to solve social issues through ourbusiness.
At briefings for individual investors, etc., since ourbusiness portfolio covers various domains such as
Chemicals, Performance Materials, Agricultural
Chemicals, and Pharmaceuticals, we want investors to
fully understand the content of these business areas.
As a result, we take time to explain to them about eachbusiness field in detail. Due to the characteristics ofeach business field, performance varies greatly
depending on the season. Therefore, a special
characteristic of our briefing sessions is that we
disclose detailed quarterly performance information
unlike other companies that provide performance
information for the first half and latter half of a fiscal
year. In addition, at the financial results briefings, we
disclose financial strategies, capital policies, policies

related to shareholder returns and R&D in asummarized format so that they can be understood.
In regard to dialogues with investors, I personallyconducted dialogues with 290 companies (180companies in Japan and 110 companies overseas) in
FY2019. This number together with the number of
dialogues conducted by other personnel makes theoverall number of dialogues held quite large.
Furthermore, we strive to be fair when providing
information to domestic and overseas investors. Manycompanies provide an English summary of theirfinancial results briefing materials a few days after
publishing them on their website. In contrast, we
disclose materials with a volume of about 90 pages inboth Japanese and English at the same time. Fair
disclosure - providing the same information in this way
is extremely important to us and is highly regarded byoverseas investors.
We will continue to provide more opportunities for
dialogue with our stakeholders and strive to further
enhance dissemination of information.

Nissan Chemical Corporation Integrated Report 2020

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Our Future-Creating Story

Foundation for Future Creation

Corporate Data

In the Spotlight
Initiatives for Discovering a Bee-Friendly Insecticide

A new insecticide that contributes to global agriculture and the environment®

GRACIAGRACIA® is an insecticide that is effective against a wide range of pests yet safe, and also
has limited impact on honeybees. We interviewed MIYAKE Toshiro, Head of Biological ResearchLaboratories, about the product’s special features and development process.

— At first, please tell us about the special
features of GRACIA®.
GRACIA® is a high-performance insecticide forvegetables and tea that contains active ingredient
fluxametamide consisted of isoxazoline-structuredeveloped by our company. This product has threemain features. Firstly, GRACIA® acts fast against a wide
range of pests. Generally speaking, insecticides
produced in recent years have high selectivity and are
effective only against a specific group of insects toensure their safety to humans and low impact on theenvironment. In contrast, GRACIA® is an excellent
insecticide that acts on a wide variety of pests and ishighly safe for humans and non-pest organisms. The
second feature is its new chemical structure and modeof action, so it can effectively control pests such as
diamondback moths and thrips, which are resistant toconventional insecticides. The third feature is that it has
limited impact on honeybees or bumblebees, whichplay important roles in the pollination of crops. As themass deaths of European honeybees continue inEurope and the United States and regulations on
neonicotinoid pesticides become more stringent,
GRACIA® is attracting attention as a “bee-friendly
insecticide”.

MIYAKE Toshiro
Managing Executive
Officer
Head of BiologicalResearch
Laboratories

Agricultural Chemicals Business Positioning (FY2019)
Others36.0

Chemicals
34.3

Pharmaceuticals
7.0

Sales

Changes in Organic Synthetic Agrochemical Regulations
1939

Discovery of DDT’s* insecticidal action

1940s/1950s

Quality Control Standards
Agricultural Chemicals Regulation Act (1948)

Manufacture

1960s/1970s

Major Revision to the Agricultural Chemicals
Regulation Act focusing on human safety andenvironmental persistence (1971)

Mammalian
Toxicity

1980s/1990s

Standards for proper implementation ofagricultural chemical toxicity testing
Good Laboratory Practice (GLP) for
Agricultural Chemicals (1984)

Experimental
Facilities

2000s/2010s

High level of safety environmental fate for theenvironment/Environmental biological effects

Environment

206.8(billion yen)

Agricultural
Chemicals
64.0

Performance
Materials
65.5* Dichlorodiphenyltrichloroethane

15

Nissan Chemical Corporation Integrated Report 2020

— What prompted the development of
GRACIA®? Could you please also explain
about its commercialization background?

— What are the benefits of using GRACIA®
for farmers? Also, in what way does it
contribute to society?

Since long ago, as one of our pesticide creation
policies, we had the idea of creating a versatileinsecticide that could be used for a wide range ofcrops. From the end of 2003, we started a research on
isoxazoline compounds. By creating completely newcompounds and combining partial structures of known
active compounds of insecticides, we were able toobtain compounds with insecticidal activity close to
those of our current GRACIA® as early as 2005.
However, at this point, the only positive attribute was
the effect, and it was completely useless in terms ofsafety to mammals and environmental organisms, soil
persistence, etc. The synthesis cost was high as well,so it was far away from practical use. From that time
until around 2010, it took about five years to solve eachissue, including safety, and we were the first in Japanto verify its effects on honeybees. Eventually, as a resultof various experiments and verifications at internal andexternal evaluation facilities, we succeeded incommercializing GRACIA® and started selling the
product in South Korea (2018) and in Japan (2019).

For the farmers who are using it, it is effective against
pests associated with a wide range of crops. It is also
gentle on honeybees and there is no issues regarding
resistance to it, so I think that it is a very easy-to-use
insecticide for pest management. After GARCIA® was
put on the market, I hear that it is very popular andthere are few complaints from farmers. Also, this is acommon tendency among pesticides in recent years,
but since it works even in low concentration, so
GRACIA® contributes to society by reduction of amountof chemical and burden on environment. Sales are alsostrong and it is a product that greatly contributes to ourbusiness.

— Why is GRACIA® a safe insecticide thathas little impact on honeybees?
To be precise, there are some parts that are still
unknown about it, but this is my idea: Insecticides areabsorbed through the mouth and skin of insects andaffect on the target site in the body, causing pests to die.
This is also true for bees, but GRACIA® (fluxametamide)
showed different result. We speculate that honeybees
have the ability to metabolize (decompose) GRACIA® inthe body from the results of our research. I also imagine
that the reason why it does not work on bumblebees,
which are used for pollination of tomatoes, is the same
as for honeybees.

— Please tell us about future development
policies at Biological ResearchLaboratories.
While having an awareness of the top share of thedomestic market in Japan, we will closely examine thesituation of overseas markets, especially the Asianmarket, consider the needs of the region, and moveahead with the development of agrochemicals that aresuitable for the environment while coordinating with ourAgricultural Chemicals Division.
In addition, research is being carried out globally for“biopesticides” that utilize the action of microorganisms,
insects, etc. as agrochemicals that are friendlier to theenvironment than conventional agrochemicals. Ourlaboratories would also like to contribute to thedevelopment of agriculture in the world by working on
the research and development of “biopesticides” while
making use of the experience and technology cultivatedin conventional agrochemical development.

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Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Unraveling the Mysterious Power of Living Things
Through Experiments
We interviewed two researchers of Biological Research Laboratories who struggled on the mode of action
analysis of fluxametamide and the elucidation of the factors of selectivity in order to elucidate the safety forhoneybees, which is an important feature of GRACIA®.

— Please give us an overview of the modeof action analysis and elucidation of thefactors of selectivity that you wereinvolved in.
ASAHI In regard to the mode of action analysis workthat I was involved in, at the stage of observing thebiological activity of fluxametamide, it became known
that pests die in a very unusual excitatory symptom,
which is different from how they die using conventional
insecticides.
INADA There are several types of excitatory
symptom, such as leg cramps and violent shaking, but
in the case of fluxametamide, it was different from theprevious patterns in that pests started shaking theirheads firstly. The phenomenon that the intense
excitatory symptom sustained for a long duration was
also unique.
ASAHI So, in order to visualize symptoms thathaven’t been felt to this extent before, we made chartsof contraction pattern of the insect body surface using
a device called a transducer.
Looking at this chart, I noticed that it resembles thepattern of existing agents that act on GABA (gammaaminobutyric acid) receptors. Fortunately, we had arelationship with a university professor who is studying
GABA receptors in insects, so we requested to
conduct joint research. From that, we were able toclarify that fluxametamide acts on GABA receptors as
expected and binds different position compared to

ASAHI Miho
Agricultural
Chemicals
Research &Development
Department
BiologicalResearch
Laboratories

17

Nissan Chemical Corporation Integrated Report 2020

existing GABA inhibitors. As next step, we investigatedwhether fluxiametamide acts same or differently on
GABA receptor of different species using artificiallyexpressing GABA receptors in frogs oocytes.

— As the next step in the mode of action
analysis, you moved on to elucidating thefactors of selectivity as to how it affects
honeybees, right?
ASAHI Yes. As we proceeded with development,
somehow we found out the effect on honeybees was
minimal. It means that fluxametamide is actually beefriendly. When developing it as a new insecticide, wethought the explanation why the mechanism of theinsecticide has limited impact on honeybees would beselling point, so I proceeded with research to clarify
related factors.
INADA Before commercialization, we also had the
responsibility to explain properly to consumers thereason why it has minimal impact on honeybees.
ASAHI At first, I thought that fluxametamide would
not act on the GABA receptors of honeybees. When I
tested it, however, I found that it acts as strongly onthem as on other pests. So this time I decided to use
honeybees and common cutworms to investigate how
fluxametamide was actually taken into the body andhow it was metabolized (decomposed).

INADA At first, it was confirmed that treatment with ametabolism inhibitor added to fluxametamide increased
the insecticidal effect on honeybees but did not change
it with common cutworms. Therefore, I thought thatmetabolism may have an effect on this difference.
When we analyzed the metabolites in the insect body,
we found that honeybees often metabolized
fluxametamide whereas common cutworms did not.
ASAHI As a specific experimental method, we
prepared insects treated with agents and froze themafter 1 hour, 2 hours, and 24 hours. After each insect
was homogenized, an extract was obtained andcomponent analysis was performed to analyze whatkind of metabolite was contained in the extract. From
the analysis pattern, we speculated how fluxametamide
is metabolized in the insects’ bodies.
INADA From those results, we came to theconclusion that, unlike pests, honeybees metabolize
fluxametamide in the body. This means thatfluxametamide does not reach GABA receptors inhoneybee and hence they are less likely to be affected.

— What were the really difficult points inregard to conducting research anddevelopment?
ASAHI There were many difficult points. It took muchtime to clarify mode of action. In particular, it took aconsiderable amount of time to assemble a test systemusing insect GABA receptors.
The series of tests to evaluate agents that act on thenerves of insects was a test that I had no experience
with, so I went to an external research institute to learn
the method and set up the equipment. It took time at
the stage.
As to insect metabolite analysis, since compounds
obtained from one small insect, such as honeybee orcommon cutworms was very small, so it was very
difficult to determine the analysis conditions. In
addition, in the analysis of honeybees, there are many
impurities such as honey, so it took time to examine theconditions for pretreatment of the sample until only thetarget fluxametamide and its metabolites could beanalyzed.

— Please tell us if you have any productsthat you would like to develop in the
future, work dreams, etc. as you continue
your R&D work.
ASAHI Although GRACIA® is a bee-friendly insecticide,
I am concerned that it acts on their GABA receptors.
Therefore, I would like to find a compound that cancreate appeal for complete selectivity at the mode ofaction level.
INADA In recent years, technological advances havemade it possible to design compounds with AI (artificial
intelligence). In addition, next-generation sequencers
have made it easier to obtain genetic information, and I
hope to utilize these latest technologies for efficientresearch.
ASAHI Me too. I also want to make full use of thesetechnologies to aim for agrochemical developementthat is more versatile, safe, and secure. The
development of GRACIA® took more than 15 years. By
the time I joined, the compound itself had been
discovered and some research had been done. I amvery grateful that I was able to take part in such project
while feeling the thoughts of many people who had
been involved in its development until then. I hope thisexperience will be used as an important source of
future research.

INADA Makoto
Agricultural
Chemicals
Research &Development
Department
Biological ResearchLaboratories

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Our Future-Creating Story

Foundation for Future Creation

Corporate Data

The History of Nissan Chemical
1887-

1923-

Founded under the founding spirit “to dedicate ourselves to prosperityof the nation by agricultural fertility” aiming to solve food issues.
Dr. TAKAMINE Jokichi is referred to as the “Father of Biotechnology.” Tokyo
Jinzo Hiryo, Nissan Chemical's predecessor organization, was started in 1885
when the young TAKAMINE Jokichi brought phosphoric ore from the US backto Japan.
Takamine, who strongly felt the need for improve the fertilizer used inJapanese agriculture to help make Japan a modern nation, approached
SHIBUSAWA Eiichi, known as the “Father of Japanese Capitalism,” thefollowing year with the idea of the commercialization of fertilizer. SHIBUSAWA
Eiichi, who was from a wealthy farming family, deeply agreed with Takamine's
proposal, and as a result established Japan's first chemical fertilizer company
in 1887 becoming chairman (president) himself.
With the Company policy “to dedicate ourselves to prosperity of the nation by
agricultural fertility,” Japan's food production skyrocketed due to theenthusiasm and effort of the pioneers who led the Company in its early days.

(million yen)
250,000

Merging of three companies for businessdiversification
In the first half of the twentieth century, amid a variety of M&A activities bydomestic corporates, we came to turning points with the three companies
joint in 1923 and with the participation to Nissan zaibatsu in 1937.
The three companies joint was a merger of Kanto Soda, Nippon Kagaku
Hiryo (renamed from Nippon Seimi Seizo) and Dainippon Jinzo Hiryo(surviving company).
The Company had been promoting business diversification and enteredunder the umbrella of Nissan zaibatsu in 1937, which was the 50th
anniversary of its foundation, renamed Nissan Chemical Industries.
After World War II, under the separation directive based on the
Corporate Reconstruction and Improvement Law, the fat and oil section
was separated into Nippon Oil and Fats (current NOF) in 1949 andNissan Chemical Industries newly started.

200.000

150.000
SHIBUSAWA Eiichi (second from left) visiting Oji Plant just after thecompletion of the threecompany merger.
Seen on the left is TANAKA Eihachiro who served as company
president from 1923 to 1941.

100.0001891 Jinzo Hiryo advertisement from anagricultural magazine

50.000Calligraphy by MASUDA Takashi (first president of Mitsui & Co., Ltd) who served
as an executive for Jinzo Hiryo, a position that his eldest son Taro would also hold.

Sales (left axis)

01886

The land in Ojima 1-chome, Koto-ku, Tokyo, now known as
Kamayabori, had been selected for its convenience in transporting
raw materials and products. In 1888, the production ofsuperphosphate (fertilizer) started.

Operating margin (right axis)

1896

1906

1916

1926

1936

1946
Worsening pollution issues

Post-war recovery
Food shortages in Japan

19

Nissan Chemical Corporation Integrated Report 2020The graph below shows changes in sales and operating margins for the Nissan Chemical on a non-consolidated basis from 1950 to 1976 and for
the Nissan Chemical Group on a consolidated basis from 1977 to 2019.
The figures for November and the following May or October and the following April are totaled so that the figures for the year are close to the March
results.

1965-

1989-

Acquisition of new technological ideas throughentry into the petrochemical businessIn the 1950s, as domestic imports of petrochemical
products expanded and the momentum fordomestic production increased, we establishedNissan Petrochemicals in 1965 and entered thepetrochemical business, starting with the
production of higher alcohol.
However, the petrochemical industry experienced astructural slump due to the impact of the two oil
crises of the 1970s. The Company worked torebuild its business, but it was unable to improve
its profitability and began rationalization. The
company exited the petrochemical business in
1988.
Although entry into the petrochemical businessresulted in a large deficit, the development of thisbusiness brought the penetration of technologicalideas to the Company, which led to thedevelopment of new technologies and businesses
such as fine chemicals.

Becoming a future-creating enterprisethat responds to social needs
In 1989, we launched our Five-Year mid-term business planoriented with two pillars: high-tech fields such as agrochemicals
and pharmaceuticals, and traditional technology fields such asfunctional products and chemicals.
The results of continued R&D investment in this difficult situation
emerged. By the early 1990s, we released a large number ofagrochemicals on the market, and in the late 1990s, while ourliquid crystal alignment material grew significantly, we entered
the semiconductor field. In the 2000s, sales of Pitavastatin
calcium, the active ingredient of LIVALO ®, an anti-cholesterol
agent, increased significantly and we acquired exclusive
marketing rights in Japan to ROUNDUP ®, the world’s largest
herbicide. Since then, new agrochemicals have been
introduced, and in 2013, we began the shipment of fluralaner,an active ingredient for veterinary pharmaceutical, which is oneof the main products at present.
In 2018, the Company had already been transcending theframework of industry in the development of its business
and will accelerate this effort toward the future. In order toclarify this stance, we changed our name to Nissan
Chemical Corporation.

(%)
40

30

20

GRACIA®
Nissan Petrochemicals Chiba Plant (1968)

10

Toyama Plant

0
1956

1966

1976

1986

1996

2006

2016

Worsening of global environmental issues
Diversification of values and lifestyles
Development and spread of information technology
Population aging
High economic growth
Stable growth
Worsening of food issues mainly in developing nations

Nissan Chemical Corporation Integrated Report 2020

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Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Main Products
Before 2000

Chemicals

1964 MelamineThis is widely used as anadhesive agent for
plywood, laminated sheets,molded products, resin
finish for fabric and paper,and paint. It is highly
aesthetic and offers asubstantial level of quality.
As a pioneer of its own
high-pressure process,Nissan Chemical supplies
products both domesticallyand internationally.

1965 HI-LITE®
Chlorinated isocyanulate is
the main ingredient in thisproduct, which is used forsterilization and disinfectionof swimming pools andwater purification tanks,
and thus contributing to
public hygiene.

Performance
Materials

1951 SNOWTEX®SNOWTEX® is a colloidal
solution in which ultrafine
particles of silicic acidanhydride are dispersed inwater using water as adispersion medium.
Utilizing various functions, it
is used for a wide range of
products such as batteries,
coating materials for opticalfilms, electronic substratematerials, and abrasives for
manufacturing electronic
recording media.

1989 SUNEVER®SUNEVER® is a polyimidebased liquid crystalalignment material. It is
used to coat the surface ofthe outer glass panels, toalign liquid crystal
molecules in a certain
direction.

1989 SIRIUS®
To meet the needs offarmers, we develop andsell a large number of
one-shot herbicides forpaddy rice. The main
component of theseherbicides is SIRIUS®, ourproprietary active
ingredient.

1991 SANMITE®This insecticide / acaricide
is effective against spider
mites and rust mites in fruit
trees, as well as spider
mites and whiteflies invegetables. We also market
this product in about 30
overseas countries.

Agricultural
Chemicals

Pharmaceuticals

21

After 2000

Nissan Chemical Corporation Integrated Report 20201994 LANDEL®LANDEL® is a calcium
antagonist which has
shown to have a positiveeffect on hypertension andangina pectoris.

1978 TEPIC®TEPIC® is an epoxy
compound which
possesses excellent heat
resistance, weather
resistance, andtransparency. It is widelyused in semiconductors,
LEDs, and substraterelated electronic materials
as well as in powder
coating curing agents.

1998 ARC®*1
ARC® is an anti-reflective
coating developed forsemiconductor lithography.
It is used to coat the part
under the photoresist, toresolve a number of issues
with lithographic exposuresuch as reflection fromvarying substrate levels.
This makes it possible tosignificantly reduce thedevice failure rate.

1994 PERMIT®
We market PERMIT®, ourproprietary active ingredient
which is particularly
effective against
cyperaceous weeds, inJapan under the trade
names of HICUT®, which isa herbicide for paddy ricein the mid to late term thatis highly effective against
the pesky weed Eleocharis
kuroguwai, and INPOOL®
for lawns.

2002 ROUNDUP®
We acquired businessrights in Japan for
ROUNDUP®, an herbicide
used all over the world
which has low toxicity tohumans and animals anddoes not remain in the soil
or in the environment.

FY20192005 AdBlue®*2
AdBlue® is a high-gradeurea solution used in “ureaSCR system”, a technology
for purifying emissions.
When sprayed onto
emissions from diesel
vehicles, it breaks down
nitrogen oxide (NOX) into
harmless nitrogen andwater, which helps toreduce environmental
impact.

Sales according to segment(billion yen)

Others*36.0

Chemicals
34.3

Pharmaceuticals
7.0

Agricultural
Chemicals
64.0

Performance
Materials
65.5

Operating income
according to segment(billion yen)
Others* -0.4

2008 LEIMAY®
LEIMAY® is afungicide thatworks in a
specific way on
diseasescaused byoomycetes andmyxomycetes
used as an
atomizing
agent forpotatoes,
grapes, andvegetables.

2013 ALTAIR®
ALTAIR® is a
wide-spectrum
herbicide that is
highly effective ineliminating bulrush
and cyperaceousperennial weeds. It
is also effective forweeds that areresistant toconventionalsulfonylureabasedherbicides. We
market thisproduct in Japan,
South Korea, andChina.

2013 Fluralaner
Fluralaner is a compound
invented by Nissan Chemical
Corporation used as an active
ingredient in the veterinary
pharmaceutical“BRAVECTO®*3” developed by
MSD Animal Health (MAH). It
is manufactured by Nissan
Chemical Corporation, andsupplied to MAH as aveterinary pharmaceuticalsubstance. Fluralaner has
remarkable characteristics: it
acts rapidly against major
species of fleas and ticks andhas a longer insecticidal effectthan existing products as its
effects remains even whenhighly diluted.

2018 GRACIA®GRACIA® is apesticide that wasdeveloped in-housethat is fast-acting on
a wide range of crop
pests and has little
impact on honeybees
which are useful
insects. Released inSouth Korea in 2018
and went on sale inJapan in 2019.

2003 LIVALO®This is a statin agent that greatly
reduces LDL cholesterol and causes
fewer drug-interactions, offering theadvantage of safety.

Pharmaceuticals
0.9

Chemicals 1.4

Agricultural
Chemicals
19.3

Performance
Materials
17.4

Sales according to region(billion yen)

Europe,USA, etc.
30.6
Other Asian
countries
44.2

Japan
109.2

China
22.8

* Others: trading, others and adjustment®

*1 ARC is a registered trademark of Brewer Science, Inc.
*2 AdBlue® is a registered trademark of the Verband der Automobilindustrie.
*3 BRAVECTO® is a registered trademark of Intervet International B.V. and Intervet Inc.

Nissan Chemical Corporation Integrated Report 2020

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Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Process of Value Creation
Nissan Chemical Group is developing its businessactivities in four business domains based on the fivecore technologies those have been cultivated over
the years.

Inputs

We aim to achieve sustainable growth together
with society by making effort at the materiality
identified by recognizing various social issues andchanges.

Materiality[P25 to 28]

Human Capital
Number of Employees: 1,890*(Number of Researchers: 471)

Core
Technologies[P45 to 46]* Non-consolidated

Provision of new value forhelping to enrich people’s lives

Financial Capital
RatingA+ (long-term rating)Intellectual Capital
Number of Patents Held: 5,031
R&D Expenses: 17.2 billion yen

Manufacturing Capital
CAPEX: 15.7 billion yen
Social Capital
Number of countries where
our products are sold: 56

Fine Organic
Synthesis
Functional
Polymer Design
Ultrafine Particle
Control
Biological
Evaluation
Optical Control

Natural Capital
Raw Materials: 360,954 tons
Energy: 99,300 kL*1
Water Resources: 28.3 million m3 *2

Strengthening of NissanGroup's business baseContinuous improvement ofresponsible care activities*1 crude oil equivalent*2 water resources input minus effluent

Social Issues andChanges23

Nissan Chemical Corporation Integrated Report 2020

Advanced climate change
Global crisis
Worsening health issues
Increase of requests for CSR considerations in the Supply Chain 	
Exacerbation of the food issues
Labor shortage

Business Domains

Outputs[P31 to 44]

Display Materials
Information & Semiconductor Materials
Communication Optical Interconnect Materials

Outcomes

Corporate Vision in 2030

[P29 to 30][P5 to 10]

Resolution ofSocial Issues

Sensor Materials“A corporate group which
provides new values forhelping to enrich people’s
lives by integrating internaland external knowledge
with facing globallychanging society”

Agrochemicals
Life Sciences

Pharmaceuticals
Veterinary Pharmaceuticals
Biomedical Materials

Environment & Oilfield Materials
EnergySecondary Battery Materials
Improvement ofCompany Value

Chemicals &Affiliates

Basic Chemicals
Fine Chemicals“A group of first-classpioneers who blaze a way
to the future withenthusiasm by trusts they
have built and skills they
have cultivated”

Diversification of risk factors
Intensification of inter-corporate competitions
Changes in lifestyle
Advent of a smart societyIncrease of requests for consideration of health and safety in the work environment
Increase of interest in corporate governance reform
Increase of requests for information disclosure

Nissan Chemical Corporation Integrated Report 2020

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Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Materiality
external knowledge with facing globally-changing
society”, and “A group of first-class pioneers who
blaze a way to the future with enthusiasm by trusts
they have built and skills they have cultivated”.

Our group has identified the materiality needed torealize the corporate vision in 2030 as “A corporategroup which provides new values for helping toenrich people’s lives by integrating internal andMateriality Identification Process
Gain Understanding About Social Issues and Social Changes
Social Issues and Changes• Advanced climate change• Global crisis• Worsening health issues• Diversification of risk factors• Intensification of intercorporate competitions• Changes in lifestyle• Increase of requests for CSR
considerations in the Supply
Chain• Increase of requests forconsideration of health andsafety in the work environment• Advent of a smart society• Exacerbation of the food issues• Labor shortage• Increase of interest in corporate
governance reform• Increase of requests for
information disclosure

Based on our group’s long- and mid-termbusiness plans, we clarified more than
500 keywords for social issues and socialchanges, referring to SDGs and ESGrelated metrics and guidelines.

Keyword Collection
Keywords related to social issues and social change were classified by theme and collected to form
29 materiality factors.

Management of Impact on Our GroupIn regards to the 29 materiality factors, we clarified the social issues and changes that are expected fromnow to 2030 and then made arrangements to manage the impact on the Group.

Importance Evaluation
We conducted an evaluation regarding the importance of materiality factors from two perspectives,that of our company and that of our stakeholders, based on the Group impact.

Opinion Exchange with Experts
We exchanged opinions about materiality factors with experts that possess a high degree of knowledge
in various fields and also took the opinions of stakeholders into account.
https://www.nissanchem.co.jp/eng/csr_info/management/materiality.html▼

Opinions from experts are found on our website.

Materiality Matrix Formulation
After numerous in-house discussions, we formulated a materiality matrix based on the opinions ofstakeholders.

Materiality Identification (through resolution by the Board of Directors)
Total of 19 materialities was identified after discussions held by the CSR Committee based on themateriality matrix. The results of the meeting were then resolved by the Board of Directors.

25

Nissan Chemical Corporation Integrated Report 2020

Materiality Matrix
Provision of new value forhelping to enrich people’s
lives

We aim to provide new value for helping to enrich people’s lives throughfour businesses based on five core technologies.

Strengthening of NissanGroup’s business baseWe aim to strengthen our business base to improve our ability torespond to increasingly diverse and sophisticated marketing needs.

Continuous improvement ofresponsible care activities

We aim to enhance the maintenance of environment, health, and safety
through the operation of the Nissan Chemical Responsible CareManagement System.

Crucial issues for corporate survival
Strengthening of Corporate Governance, Risk Management and ComplianceHigh

Maintenance and improvementof employees’ healthContribution to
local society

Personnel retention and trainings

Contribution to health issues

Promotion of diversity

Supply of environmental-friendly
products and services

Promotion of fair-trading
Promotion of CSR procurement

To Stakeholders

Promotion of occupational healthand safety

Enhancement of R&D capability
Mitigation of climate change

Improvement of products quality

Water resources
conservation
Improvement of
capital efficiency

Creation of a comfortableworkplaceContribution to the improvementof the quality of life

Biodiversity conservation

Contribution to smart societyManagement of chemical
substances

Contribution to the food issues

Reduction of industrial waste
and pollutant emissions

Enhancement of
information security

Improvement of marketing powerIntellectual properties exploitation

Priority
To the Company

Adaptation to climate change

Expanding businessdomainsHigh

Nissan Chemical Corporation Integrated Report 2020

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Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Materiality
Materiality and KPIMateriality

FactorContribution to health issues

Creation of pharmaceuticals that meet medical needs andbiomedical materials that contribute to advanced medical care

Supply of environmental-friendly
products and services

Sale of high-grade urea solution for exhaust gas purification ofdiesel vehicles
Development of energy harvesting materials that contribute to theutilization of unused energy

Contribution to the improvementof the quality of life

Research and supply of veterinary pharmaceuticals for companion
animals and sales of disinfectants for drinking-water

Contribution to smart society

Development of sensor materials required for IoT and wiring
materials that contribute to higher capacities and speeds of data
communications

Contribution to the food issues

Supply of agrochemicals to increase crop yields and conserve
agricultural labor, and the expansion of veterinary pharmaceuticals
to livestock

Enhancement of R&D capability

Deepening core technologies, promotion of open innovation, andintroduction of new technologies such as AI

Improvement of products quality

Continuous improvement of management systems and operations
based on quality policy

Maintenance and improvementof employees’ health

Review of health promotion measures by the health promotion
committee and mental health checkups

Creation of a comfortableworkplace

Promotion of work-life balance, measures against harassment,
and support for childcare and family care

Personnel retention and trainings

Provision of educations and capability trainings, and introductionof overseas study program

Promotion of diversity

Promotion of active participation of women, hiring foreign students
and people with disabilities

Promotion of fair-trading

Implementation of internal training on the “Act against Delay inPayment of Subcontract Proceeds, etc. to Subcontractors” andthe insider trading regulations

Promotion of CSR procurement

Conduct of assessment and audits of suppliers on CSR

Adaptation to climate change

Formulation of BCPs to prepare for the plants’ inability to operate
due to natural disasters

Mitigation of climate change

Energy saving through equipment improvement and fuelconversion that leads to GHG emissions reduction

Promotion of occupational
health and safety

Establishment of an occupational safety management system andexecution of capital investment in safety

Biodiversity conservation

Operation of Bio-Park and support for the NPO “Kurohama-numa
Shuhen no Shizen wo Taisetsu ni Suru Kai”

Management of chemical
substances

Minimization of negative impacts on human health and theenvironment throughout the life cycle of chemical products

Reduction of industrial waste
and pollutant emissions

Reduction of the amount of waste for final disposal volume byreusing and recycling waste and changing intermediate process
methods

 rovision of new value forP
helping to enrich people’s
lives trengthening of Nissan
S
Group's business base ontinuous improvement ofC
responsible care activities

27

Nissan Chemical Corporation Integrated Report 2020

Our InitiativeFY2021 Targets (KPI)

FY2019 Result

License out candidates of drug agents

Started investigator-initiated clinical trial of anti-arrhythmic
agent
Researches underway to create new development
candidates of active pharmaceutical agents

Launch of new medical materials

Completed prototype of automatic culture device for
FCeM®Cellhesion®
Started shipments of prevelex® coated containers fortesting and research use

Launch of new environmental-friendly products

Number of people positively impacted by the sales of
disinfectants for drinking water: 2.5 million per year
Expanded adoption of sensors and semiconductor
packaging materials/Adoption and launch of materials
for optical communications—

900,000 per year
(Shipping stagnation in FY2019)
Full-scale sale of CMOS sensor materials andsemiconductor packaging materials are expected tooccur from 2022, and development of opticalinterconnect materials is in progress.

Achieving 10% higher sales than in FY2018 by the
Agricultural Chemicals Division

2.1% higher than FY2018(FY2019 sales: 64,039 million yen)

Reaching 1,350 patent applications in three years by
FY2021

426(FY2018: 454 patent applications)

Achieving 80% outsourcer audit rate in three years by
FY202146%

Consecutively acquiring White 500 certification

Acquired White 500 certification for four consecutive
years from 2016

Achieving ratio of taking annual leave of 80% or higher

73.2%

Achieving 10% more job training time per employee
than in FY2017

10 hours(11 hours in FY2017)

Achieving proportion of females among employees in
the regular position of 10%

9.6%

Holding consultation meetings with Legal Officethroughout the Group by FY2021

5%(Held zero consultation meetings in FY2019)

Achieving CSR questionnaire survey coverage of 90% (interms of monetary amount)69%

Formulating BCP where products account for 50% of
ordinary income

Formulated BCP where products account for 38%
of ordinary income

GHG emission rate: Improving 20% from FY2013 level
Energy consumption rate: Improving 20% from FY2013 level

GHG emission rate: Improved by 29% from FY2013 level
Energy consumption rate: Improved by 21% from FY2013 level

Achieving zero accident requiring staff time off fromwork

Two accidents occurred requiring
staff time off from work

Achieving 100% initiative for prefectures in which our
Head Office, plants, and laboratories are located83%

Creating safety summaries of chemical substances of
products that account for 90% of our total production

74%

99.5% or more recycling rate
Achieving 75% reduction of exhaust gas(SOx + NOx) emissions compared to FY2013

Relation with SDGs

Recycling rate: 97.0%
Exhaust gas (SOx+NOx) emissions: Reduced by 50%
from FY2013 level

Nissan Chemical Corporation Integrated Report 2020

28

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Financial and Non-Financial Highlights
Operating income/Operating margin

Net income attributable to owners of parent/ROE(billion yen)
40.0
16.2

(%)
18.1

17.4

18.1

18.7

20.0

15.0

20.0

37.1

35.0

31.4

38.6

10.0

15.1

14.6

16.1

16.6

16.9

14.0
12.0

20.0

10.0

10.0
24.0

22.4

27.1

29.4

30.8

2015

2016

2017

Operating income (left axis)

2018

0.0
2019 (FY)

0

4.0
2.0
2015

Operating margin (right axis)(billion yen)
25.0

2016

2017

Net income (left axis)

Total amount of dividend/Share repurchase/
Total payout ratio

2018

71

70

15.0
10.0
5.0

72

71

9.0

9.0

EPS (earnings per share)/Dividends/
Dividend payout ratio

（%）

(yen)

(%)

100

250

50

10.0

150

7.9

Total amount ofdividend (left axis)

40

33.1

30

12.1

10.2

2017

2018

Share repurchase(left axis)

13.1

02019 (FY)

50

68

82

90

2015

2016

2017

2018

0
2019 (FY)Dividend pershare

EPS (net income per share)(billion yen )(billion yen)

50.0

50.0

40.0

40.0

30.0

30.0
40.3

45.5

48.0

(%)
0

-1.6
-3.2

0
2016

2017
EBITDA

Nissan Chemical Corporation Integrated Report 2020

2018

-3.4
-4

20.0

33.1

30.8

10.0

2015

Dividend
payout ratio

49.2

10.0

2019 (FY)1052

Liabilities with interest/ D/E ratio

38.3

20

44
0

Total payout ratio(right axis)

210

198

180

157

143

EBITDA

20.0

29

30.7

50

0
2016

42.8

37.7

200

100

6.8
2015

75

9.0

9.0

0.0
2019 (FY)

ROE (right axis)

41.5
20.0

8.0
6.0

5.0
0

18.0
16.0

25.0

15.0
5.0

10.0

(%)

35.0
30.0

30.0

28.6

(billion yen)

-5.7

-5.7

28.6

26.6

2017

2018

0
2015

2016

Liabilities with interest (left axis)

24.6-82019 (FY)

D/E ratio (right axis)

R&D expenses/Sales-to-R&D expenses ratio

Number of full-time employees/Ratio of
females among full-time employees(billion yen)(number of full-time employees)

20.0

8.9

(%)
8.9

8.9

10.0

8.7

1,850

11.0
10.5

1,800
10.0
15.8

17.8

17.2

16.1

5.0

17.2

5.0

0
2015

2016

2017

R&D expenses (left axis)

0.02019 (FY)

2018

1,750

9.9

1,700

1,739

10.5
1,861

9.8

2015

1,772

9.5

2016

2017

Number of full-time employees (left axis)
Ratio of full-time female employees (right axis)

77.2

0.76 0.81

0.36 0.37 0.37

0.88

0.81

(%)

80.0 (target)

20.0

1.11
0.88 0.85
0.82

9.02019 (FY)2018

Monthly average overtime/Annual paid leaveacquisition ratio

1.48

1.2

10.0

1,819

(Hours)
1.6

1,890

1,650

Sales-to-R&D expenses ratio (right axis)

Lost-time injury frequency rate

0.4

11.5

11.1

8.3

15.0

0.8

(%)

11.5

1,900

80.0

77.6
75.8

0.90 0.94
0.73

19.0

20.0

19.7
19.3

0.37 0.37

75.0
73.2
18.9

0.00

0

18.0

2011 2012 2013 2014 2015 2016 2017 2018 2019 (FY)
Nissan Chemical

Chemical industry

2016

2017

2018

Monthly average overtime (left axis)

2019

2021

70.0
(FY)

Annual paid leave acquisition ratio* (right axis)* Figures from FY2019 also include annual paid leave acquisition by managers

GHG emissions/GHG emission rate(emissions/sales)(1,000 tons)
600

3.59

Waste generation/Recycling rate
(ton/million yen)4

3.53

(1,000 tons)

40.0

97.9

97.7

97.0

(%)

100

3.17
400

172

152

53

55

237

2014

2.58
155

124

3
2.33

2.04

2

31

23

114
19

255

246

232

230

219

2015

2016

2017

2018

0
2019 (FY)

200

0

90
18

20.0

50

33.4

33.7

34.7

34.0

35.3

2015

2016

2017

2018

0
2019 (FY)

1

Dinitrogen monoxide (CO2 equivalent) (left axis)

CO2 emissions from non-energy use (left axis)

CO2 emissions from energy use (left axis)

Emission rate (emissions/sales) (right axis)

0.0
Waste generation (left axis)

Recycling rate (right axis)

Nissan Chemical Corporation Integrated Report 2020

30

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Business Strategies

Chemicals
Most of the products of this division are comprisedof industrial chemicals, such as ammonia andsulfuric acid, and derivative products/high-purity
products that have been developed downstream
with added value. These products are supporting
people’s lives in a wide range of fields. By building
an efficient production system, we strive to provide
excellent products and technologies while reducing
the environmental burden.

Social Issues and Needs
With the advent of a smart society and worsening of
global environmental issues, various types of needs inseveral fields are increasing globally. In addition to
general industrial use, we currently provide excellent
products and technologies in a wide range of fields tocontribute to solving social issues. Efforts include
providing high purity chemicals for electronic component
manufacturing applications, a high-grade urea solution
for removing air pollutants, and use of proprietarycyanuric acid derivatives for improving water quality.

Business Vision
Our Chemicals business started with the
manufacture of sulfuric acid and ammonia, which arebasic raw materials for fertilizer. We contribute to therealization of a prosperous, safe, and continuously
developing society by providing materials used in awide range of fields, from basic chemicals to high purity
chemicals and cyanuric acid based high-performance
products.

Business Overview
Basic Chemicals
We provide industrial chemicals such as melamine,
sulfuric acid, nitric acid, ammonia as well as our higher
alcohol product FINEOXOCOL® to various industries.
We are proud of its top-class production efficiency formelamine globally. Just as with our industrial chemicals,
we are further improving the efficiency of our production
system in order to create a stronger business structure
against external factors such as a rise in fuel prices.
We are also manufacturing and supplying products to
support cutting-edge fields, and providing products tothe market such as high-purity sulfuric acid, nitric acid,aqueous ammonia and liquid ammonia from which
impurities are removed to utmost level.

31

Nissan Chemical Corporation Integrated Report 2020

YOSHIDA Hajime
Executive Officer
Head of Chemicals
Division

In addition, we established a manufacturing andsupply system for our high-grade urea solution
AdBlue®* that decomposes nitrogen oxide contained inexhaust gas from diesel vehicles, which is considered tobe the cause of air pollution, into nitrogen and water,
thereby reducing environmental impact.
* AdBlue® is a registered trademark of the Verband der Automobilindustrie.

Fine Chemicals
Main products in this department consist ofenvironmental chemicals, such as HI-LITE®, used forsterilization and disinfection of swimming pools andwater purification tanks, and Venus® Oilclean, amicroorganism formulation that decomposes oils andfats in wastewater from food factories, as well as thehigh-performance chemicals TEPIC®, derived fromcyanuric acid that contains triazine ring, and melamine
cyanurate. In addition to being used as a curative agent
for coating powders, TEPIC® is seeing an increase indemand for use as an electronic material, for solder
resist ink, sealants for LED, etc. Melamine cyanurate,
which is also derived from cyanuric acid contains
triazine ring, is used as a non-halogen flame retardantor an auxiliary flame retardant for various engineering
plastics.
We are promoting research and development ofproprietary cyanuric acid derivatives so that they can beused in a wider range of fields.

Business Results and Outlook(billion yen)
50.0
40.0
30.0
20.0

34.8
3.8

34.9

35.7

3.4

3.0

34.3

2020
(forecast)(target)

35.6

2.7

10.0
0

(billion yen)
6.0
5.0
5.1
4.0
3.0
2.0
1.0
0
2021
43.1

1.4
2016

2017

Sales (left axis)

2018

2019

Operating income (right axis)

Stage II Business Strategies
Opportunities and Risks

Strengths• Strong global demand for cyanuric acid
• Increasing social demand for water sanitation• Increasing demand for products for
information & communication field• Increase of issues at plants due to aging
facilities• Manufacturing process for the manufacture of
products with high self-extinguishing rates aswell as high value-added products bydeveloping derivative products using
ammonia as a core raw material• Accumulation of more than half a century of
research and know-how regarding ultra-highpurity of industrial chemicals

Main Measures• Promote sales of cyanuric acid, melamine cyanurate, TEPIC®, HI-LITE®, and high-purity sulfuric acid
• Enhance maintenance technology through the adoption of digital technology

Sources of Growth and Progress in FY2019
Cyanuric acid
Cyanuric acid is a material used in TEPIC®, HI-LITE®, and melamine cyanurate, which is used as a flame
retardant. In order to provide TEPIC® and HI-LITE®, which are sources of growth of this division, to the market
without delay, we are proceeding with the expansion of cyanuric acid production facilities in preparation ofsales increases. Construction is scheduled to be completed in December 2020.

TEPIC®
The high-performance chemical TEPIC®, which has a distinctive triazine ring, is used in a wide range ofapplications. For electronic material applications, we expect that demand for TEPIC® will continue to growin various fields, including the information & communication field (5G base stations for solder resist ink
applications, substrates for autonomous driving, etc.). In FY2019, although we have been affected in thisarea by price competition from inexpensive Chinese products at the general-purpose grade level, we will
promote a sales strategy that is well suited for the high-quality grade level.

HI-LITE®
“Clean Water and Sanitation,” one of the SDGs, is an important global issue. We have started exportingsome grades of HI-LITE® since they have been certified as materials for disinfectants for drinking water inareas where hygiene management is insufficient, such as in developing countries. We have established thegoal for FY2021 of contributing to the improvement of drinking water quality for 2.5 million people a year
globally. Preparations are being made so that we will be able to respond to expanding demand.

High-Purity Sulfuric Acid
Demand for high-purity sulfuric acid is expected to grow in the information & communications field, abusiness field which will continue to grow. We also grasped the flow of maintenance investment plans ofmajor semiconductor manufacturers to increase sales in FY2019 as well. We will continue to maintain highquality and high availability.

Nissan Chemical Corporation Integrated Report 202032

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Business Strategies

Efforts Started After Stage II Initiation
The Chemicals business is susceptible to the effects
of fuel prices, supply demand balance, and market
environment. Therefore, we will continue to strive tosecure stable earnings while flexibly reviewing businessstrategies in response to environmental changes.
We are focusing on the development anddeployment of new products, mainly cyanuric acidderivatives, as a source of sustainable business growth.
We started the full-fledged commercialization of
STARFINE® (zinc cyanurate), from which effects as anadditive for paints and adhesives can be expected.
Together with the new grades of TEPIC®, it has alreadybeen evaluated by many users for various purposes.
Dry film resist made with TEPIC®-VL (new grade TEPIC®)

Provision of Products for Helping to Enrich People’s Lives
High-grade Urea Solution (AdBlue®)
AdBlue® is used in Selective Catalytic
Reduction (SCR) which is a system for purifying
nitrogen oxide contained in exhaust gas fromdiesel engines. When sprayed into exhaust gas,
AdBlue® converts nitrogen oxide into harmless
nitrogen and water, which helps to reduce
environmental impact. Urea, the main componentof AdBlue®, is a substance which is so safe that it
is used in cosmetic products as a moisturizing
agent, pharmaceuticals, fertilizers, and so forth.
* AdBlue® is registered trademark of the Verband derAutomobilindustrie.

Venus® Oilclean
Venus® Oilclean is a microorganism formulationthat decomposes oils and fats in wastewaterfrom food factories and other facilities. Comparedto the pressurized floating facility, which is atypical oils and fats in wastewater treatment
system, the facility using Venus® Oilclean
significantly reduces odors and workload as wellas waste with simple equipment. Some major
food factories have reduced the amount of waste
derived from oils and fats to almost zero byintroducing this product.

33

Nissan Chemical Corporation Integrated Report 2020

AdBlue®

Performance Materials
We will contribute to the realization of a smart
society by promoting profitability of display,semiconductor, and inorganic materials, the threepillars of this business, and further expanding
business size through new product development.

ISHIKAWA Motoaki
Managing Executive Officer
Head of Performance
Materials Division

Social Issues and Needs
With the expansion of IoT and 5G as well as theevolution of AI and autonomous driving technology, ourcurrent society is transforming into a smart society
where diverse systems interact to provide advanced
services to everyone. The semiconductors, sensors,and displays that bring these technologies to life arealso required to evolve. It is also expected to provide
products that help protect the global environment andsolve energy issues.

Business Vision
In this rapidly evolving business, it is necessary toquickly and accurately grasp the needs andtechnological trends of the market and customers. For
this, sales, research, and production, including
overseas bases, are integrated, and we emphasize
activities that are closely related to customers. In
addition, we aim to contribute to the development ofsociety by providing products and services that are
useful to the world based on the high technologicalcapabilities that we have cultivated.

Business Overview
Display Materials
SUNEVER®, a coating material to align liquid crystal
molecules in a certain direction, serves as our primary
display material. This product was made available forsale in 1989, and we have expanded our market shareby increasing the functionality of alignment materials,
even when the liquid crystal type used is changed fromTN to STN or TFT. In addition, we started the sale ofRayalign®, a photo-alignment material for IPS liquid
crystal, in 2014. This product is currently used in manysmartphones that offer high screen resolutions. It is
expected that product demand for Rayalign® will further
increase in the future as tablet and monitor resolutions
increase.

Semiconductor Materials
We started the manufacture and sale of ARC® *1 in
1998 based on a licensing agreement with US
company, Brewer Science Inc. ARC® is a coating
material designed to prevent issues such as irregularreflection and interference of light, and coating failure
during micro-fabrication of the photoresist throughlithography process. We launched OptiStack® *2(multi-layer process materials) in 2007 which greatly
expanded our business.
Currently, in preparation for the expected demand for
EUV exposure technology (wavelength; 13.5 nm,
semiconductor circuit width; 7 to 3 nm), we aredeveloping EUV materials and also focusing on threedimensional (3D) packaging technology preparing forthe limits of optical shrink.
*1, *2 ARC® and OptiStack® are registered trademarks of Brewer Science, Inc.

Inorganic Materials
SNOWTEX®, a nano silica water dispersion serving
as a fiber processing agent, went on sale in 1951. Now
we also offer organosilicasol serving as an organic
solvent dispersion, and monomer sol, a product thatcan be used without solvent. These products areindispensable materials used in coating materials for
optical films and in abrasives for electronic recording
devices and for other purposes. We are aiming tofurther expand product applications, including use as
an agent to increase oil and gas extraction efficiency.

Business Results and Outlook(billion yen)
80.0
60.0
40.0

52.8
12.5

58.8

63.0

14.2

15.0

65.5

70.1

(billion yen)
75.1 20.0

17.4

18.1

17.3

12.0
8.0

20.0
0

16.0

4.0
2016

2017

Sales (left axis)

2018

2019

2020

2021

(forecast)(target)0Operating income (right axis)

Nissan Chemical Corporation Integrated Report 2020

34

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Business Strategies

Stage II Business Strategies
Opportunities and Risks

Strengths• Increasing demand due to the development of
the information & communication field• Change in demand for shale oil due tofluctuations in crude oil prices• Advent of innovative technology• Intensification of inter-corporate competitions• A sales and research system closely
linked to customers in China, Taiwan, andSouth Korea• Optical Control Technology• Functional Polymer Design Technology• Ultrafine Particle Control Technology

Main Measures• Develop and launch new products• Improve existing products and expand their application• Strengthen evaluation technology• Improve and maintain facilities

Sources of Growth and Progress in FY2019
Liquid Crystal Alignment Materials for TVs
Currently, our major materials for displays are alignment materials for smartphones and tablets, andespecially the photo-alignment material for liquid crystal IPS. In the future, we will also use them for TVs.
Although demand for LCD TVs is predicted to decrease somewhat, we predict that demand for alignment
materials will continue to increase based on screen sizes. Also, since we believe that screen resolutions willcontinue to improve, we recognize that it is an important theme to accurately respond to technical requests
from customers and expand the market share of our products. In FY2019, we were able to increase sales ofalignment material for VA liquid crystal in line with the increasing demand for TVs.

Agents to Increase Oil and Gas Extraction Efficiency
Crude oil development is concentrated in specific areas with excellent oil and gas wells and the
production in those areas is increasing. However, it is said that extraction efficiency has reduced due to thephenomenon that oil recovery amounts have generally
decreased due to crowded conditions in areas where
wells are in close proximity. Based on this issue, we aim
to improve extraction efficiency by developing
applications for use of our inorganic materials. Sales
were sluggish in FY2019 due to the fall in crude oil
prices, falling below both FY2018 sales and plannedtargets. Under these circumstances, we will actively
conduct field tests and strive to increase sales in orderto focus on developing new applications for existingwells that are not easily affected by crude oil prices,
Shale oil drilling site
including those outside the United States.

35

Nissan Chemical Corporation Integrated Report 2020

Efforts Started After Stage II Initiation
OLED Materials

Semiconductor Packaging Materials

OLEDs are thinner and lighter than liquid crystals, offer
high-speed response, and possess excellent design
characteristics, such as flexibility. They are being used
more often in smartphones, high-resolution, large screen
TVs and other products. Recently, sales of foldable
smartphones with screens of OLED have begun. We aredeveloping proprietary materials, including hard coatmaterials for surface protection, materials that enhancelight extraction efficiency, anti-reflective coating alignment
materials, and release layer materials, which contribute toimproving the characteristics of smartphones. In addition,
our company is also accelerating market development
for ELsource®, a soluble hole injection material, NPAR®, aliquid-repellent bank layer material, and other materials
which can contribute to reducing the cost of large TVs,
production efficiency, and characteristics enhancement.
We are also developing materials for next-generation
self-luminous displays which will be the future display
technology following OLEDs.

Technologies related to high-speed, large-capacity
information and communication such as IoT, 5G, andsensors, are making rapid progress. For this reason,
further miniaturization and higher integration in theformation of electronic circuits are occurring. However,
we are coming close to physical theoretical limits forshrinkage of interconnect and integration, so it isexpected that issues will be overcome through further
evolution of semiconductor packaging technology. In
addition to circuit miniaturization, we have focused
early on technology for 3D packaging with thinned
semiconductor wafers. In 2013, we acquired all sharesof German company, Thin Materials AG andincorporated their advanced processes and material
development technology necessary for semiconductor
packaging, making them our own technologies. We arealso actively working on other next-generation
semiconductor packaging technologies anddevelopment of markets related to sensors.

Smartphones with foldable displays

Image of integrated circuits board with 3D package

Provision of Products for Helping to Enrich People’s Lives
SNOWTEX®, Aluminasol,
Organosilicasol, and NanoUse®
Our inorganic materials on base of ourultrafine particle control technology can be used
for a wide range of applications since it can bedispersed in various types of solvents. By using
them for transformers and motors, it is possible
to improve insulation performance and reduceenergy loss. They also function as a catalyst
binder and base material reinforcing material in
the process of removing exhaust gas fromfactories and automobiles. By making theequipment more energy efficient and longer-life,
these materials contribute to reducing
environmental impact.

Image of exhaust gas removal

Nissan Chemical Corporation Integrated Report 2020

36

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Business Strategies

Agricultural Chemicals
We contribute to a stable food supply throughconsistent business activities from the research for
new agricultural chemicals to their development,
manufacture, and sales, and expansion of a broad
product lineup through the acquisition ofingredients from other companies and joint
development of products.

Social Issues and Needs
In addition to the conventional agricultural issue ofefficiently preventing damage caused by pests andweeds during crop production, there is an increasing
consumer needs to reduce pesticide residues on crops
and reduce environmental impact.
We also recognize the importance of agricultural
sustainability by small family-owned farmers, especiallyin Japan.
As a company that provides agrochemicals, we aremaking various efforts to solve social issues.

Business Vision
In Stage II of Vista 2021, we aim for our entry into
new agriculture related fields while focusing on ourcurrent business of providing distinctive chemicallysynthesized agrochemicals to farmers. For smart
agriculture, which is expected to contribute to themaintenance and development of domestic agriculture,
we started to provide a service this year to diagnose
pests and weeds using a smartphone application andprovide information on effective pesticides to farmers.
Also, we are developing and examining so-called
biopesticides that do not leave a residue on crops.

Business Overview
Agrochemicals
Our agrochemical business started in the 1910s when
our predecessors Nippon Seimi Seizo and Kanto Soda
began manufacturing and selling insecticides andfungicides. Starting with TARGA® (herbicide for grassy
weeds) launched in 1984, we have continued to
manufacture and sell products developed in-house such
as SIRIUS® (herbicide for paddy rice), SANMITE®
(insecticide/acaricide) and PERMIT® (herbicide for paddy
rice and corn), which have steadily improved profitability.
Afterwards, we experienced hard times as a result of
in-house development delays and intensifying competition

37

Nissan Chemical Corporation Integrated Report 2020

HONDA Takashi
Director, Managing
Executive Officer
Head of Agricultural
Chemicals Division

with competitors. However, since the launch of LEIMAY®
(fungicide) in 2008, we have returned to introducing
products developed in-house and started sale of
GRACIA® (general purpose pesticide) in 2018. Additionally,
we are actively pursuing the acquisition of otheragrochemicals. For example, in 2002 we acquired
Monsanto’s herbicide business in Japan and began selling
ROUNDUP® as one of our main products. In 2011, welaunched ROUNDUP® MAXLOAD AL, a shower-type
herbicide for households and later started sale of
ROUNDUP® MAXLOAD AL II followed by ROUNDUP®
MAXLOAD AL III, improved product versions, striving toprovide products to address customer needs.

Veterinary Pharmaceuticals
Through our development of agricultural pesticides,
we have discovered compounds that are not only
effective for use on agricultural crop pests, but also on
fleas and ticks that are parasitic in dogs and cats, andhave continued to examine these compounds asveterinary pharmaceuticals. In 2008, we entered alicensing agreement with Intervet Inc. Development ofveterinary pharmaceuticals using Fluralaner, acompound invented by us, as an active ingredient has
advanced.
Since launched in Europe and the United States underthe brand name BRAVECTO® * in 2014, veterinary
pharmaceuticals containing Fluralaner as an active
ingredient are now used in more than 100 countries andare leading the growth of Agricultural Chemicals Division.
* BRAVECTO® is a registered trademark of Intervet International B.V. and Intervet
Inc.

Business Results and Outlook(billion yen)
80.0
60.0
40.0
20.0
0

52.0
13.2

58.1
16.4

62.7

64.0

65.5

18.4

19.3

18.4

(billion yen)
25.0

70.1
21.1

20.0
15.0
10.0
5.0

2016

2017

Sales (left axis)

2018

2019

2020

2021

(forecast)(target)Operating income (right axis)0Stage II Business Strategies
Opportunities and Risks

Strengths• Continuous expansion of the overseas
agrochemicals market• Labor shortage due to the population
decline in Japan• Intensification of inter-corporate
competitions• Supply shortages of active ingredients• Growth of the companion animal market• Ability to create distinctive, new agrochemicals
from the core technologies of fine organic
synthesis and biological evaluation• Experiences and track records spanning many
years from research for new agriculturalchemicals to manufacturing and sales• High level of motivation cultivated throughmaintaining high profit margins andcontinuous growth

Main Measures• Rapidly popularize and promote sale of GRACIA®
• Strengthen initiatives aimed at large-scale farmers, corporations, and general consumers• Steady development of new agrochemicals and pipeline creation

Sources of Growth and Progress in FY2019GRACIA®
GRACIA®, a pesticide developed in-house, is fast-acting on a wide range of crop pests
and has little impact on honeybees which are useful insects. It was released in South Korea
in 2018 and went on sale in Japan in 2019. Sales of GRACIA® have been very strong, and it
has already grown to become a major product with sales that have already exceeded thefinal year sales target provided in Vista2021.
GRACIA®

ROUNDUP®
ROUND NOZZLE® ULV5, a product that allows for dispersion of
ROUNDUP® MAXLOAD in a way that reduces farmer workload, isgaining popularity. Sales of the product have grown since FY2018, theyear when the effects of natural disasters and other occurrences were
substantial.

ROUND NOZZLE®
ULV5ROUNDUP®
MAXLOAD (200 L)

Fluralaner
Veterinary pharmaceuticals for companion animals and livestocks containing
Fluralaner as an active ingredient are available in more than 100 countries. In
2019, we launched a chewable tablet for dogs in China and obtained US
approval for a spot-on compound for cats. Then in 2020, a chewable tablet
for dogs (one-month chews for a puppy) was also approved in the UnitedStates. Along with the declining birthrate and aging population, the idea thatcompanion animals are like a family to their owners is growing in popularity.
We expect that the demand for veterinary pharmaceuticals will increase in the
future as people become more aware about companion animal health.

BRAVECTO® tablets for cats

Nissan Chemical Corporation Integrated Report 2020

38

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Business Strategies

Efforts Started After Stage II Initiation
In order to enhance our overseas product portfolio,
we have acquired Quintec® (active ingredient:quinoxyfen) from Corteva Inc. This product is a fungicidethat is effective in prevention of powdery mildew and iscurrently used mainly in vineyards in the US.
In addition, as in-house developed products,
following the development of a fungicide (development
code NC-241) and a herbicide for paddy rice flooding
treatment (development code NC-653), we also started
to develop a herbicide for application on stems andleaves of paddy rice (development code NC-656).
Moreover, we have established a joint venture (Nissan
Bharat Rasayan Private Limited) in India for the purposeof manufacturing the active ingredients inagrochemicals. From Stage II, by having this joint
venture’s manufacturing plant together with the Onoda
Plant, we can respond to growing demand for our
agrochemicals. We expect it will contribute to thegrowth of our agrochemicals business by a robust
active production and supply system that is costcompetitive.

Provision of Products for Helping to Enrich People’s Lives
Exzolt®*As for products that use Fluralaner, our originalactive ingredient for veterinary pharmaceuticals,
in addition to BRAVECTO®, which is designed forexternal parasites found on companion animals,
Exzolt®, a veterinary pharmaceutical effective onchicken mites, was approved for marketing inEurope in 2017. This is a revolutionary productthat can be administered in water supply
systems for chickens, unlike the conventional
method of exterminating chicken mites which
has been inefficient and inadequate. Chicken
mites not only reduce the spawning efficiency ofchickens but are also problematic to poultry
farmers since they are also parasitic on them.
Exzolt® is able to very effectively eliminate thesemites. Marketing approval of the product inJapan is expected to be obtained by the end of
this year. We believe that it will help improve thelives of poultry farmers around the world.
* Exzolt® is a registered trademark of Intervet International B.V. andIntervet Inc., a subsidiary of Merck & Co., Inc.

39

Nissan Chemical Corporation Integrated Report 2020

Pharmaceuticals
By focusing on drug discovery and manufacture ofactive pharmaceutical ingredients, we are striving
to develop better pharmaceuticals through aunique business model that does not have a sales
department, licensing products which we havedeveloped to pharmaceutical companies.

Social Issues and Needs
In Japan, a country with a declining birthrate andaging population, medical services andpharmaceuticals are becoming more important thanever. Lifestyle-related diseases are increasing due tochanges in lifestyles. So awareness for increasing
expectancies for healthy life is growing. As a solution,safer and more effective medicines, such as
personalized medicine and preventive medicine, aredesired.

Business Vision
We entered the pharmaceutical business in 1982
and launched EPATEC®, an external preparation withketoprofen as its main ingredient, as our firstpharmaceutical product. Since mastering thepharmaceutical business from manufacturing to sale,
we have continued challenges in the R&D of innovative
new drugs by making full use of our strategicallydeveloped chemical compound library, our cuttingedge evaluation functions, and our fine organic
synthesis technologies.

Business Overview
In-house Drug Discovery
The development of the anti-hypertension agent
efonidipine hydrochloride marked our start in the drug
discovery business. At the time of its development,
drug development by major Japanese pharmaceuticalcompanies was focused on antibiotics. We focused on
drugs for hypertension and hyperlipidemia, paving theway for success. It was launched as LANDEL® in 1994
in Japan. LANDEL® is distributed by Zeria
Pharmaceutical and Shionogi in Japan, and FINTE® isdistributed by Green Cross in South Korea.
In 2003, LIVALO®, anti-cholesterol agent with
pitavastatin calcium we developed as another one of our
focus point, was launched by Kowa Pharmaceutical(current Kowa Company). Currently LIVALO® is sold in
28 countries around the world where it has been

OHRAI Kazuhiko
Executive Officer
Head of Pharmaceuticals
Division

approved. After its substance patent for Japan expired inAugust 2013, due to the decline in market share by
generic drugs and the impact of drug price revisions, thedomestic conditions continue to be harsh. The creationof new drugs is an urgent issue for us.
We are developing a therapeutic agent for
thrombocytopenia and an anti-arrhythmic agent, aiming
to quickly advance to the next stages of development.

Finetech®
We are developing contracting business that provides
total technological support to customers for theirdevelopment of active pharmaceutical ingredients (API).
We engage in the contracted development of
manufacturing process in the stages from pre-clinical tocommercial production, as well as manufacture of API
and intermediates in compliance with good manufacturing
practice (GMP). Furthermore, we provide related services
including quality designs, stability testing, impurity andmetabolite sample synthesis, and creation of materials
regarding drug master file application. Recently, we are
expanding supply business of APIs of generic drugs that
responds to the need for highly active drug substancesthat require fine organic synthesis and containment. In
addition to our wide variety of asymmetric synthesis
technologies, oxidation reaction technology usingorganic molecular catalysts, and prostaglandin derivativesynthesis through a proprietary two-component coupling
method, we also have an abundant amount ofexperience manufacturing in-house drugs andagrochemicals, and our strengths include multi-step
synthesis and heterocyclic compound synthesis.

Business Results and Outlook(billion yen)
10.0
8.0
8.0
6.0

1.7

7.5
1.2

4.0

7.0

7.0

1.0

0.9

2.0
0

6.4

(billion yen)
2.0
7.5
1.5
1.0
0.7

0.4
2016

2017

Sales (left axis)

2018

2019

2020

(forecast)

2021

0.5
0

(target)Operating income (right axis)

Nissan Chemical Corporation Integrated Report 2020

40

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Business Strategies

Stage II Business Strategies
Opportunities and Risks

Strengths• Revitalization of research for discovery ofAPIs for medium-molecule drugs• Increasing demand for generic drugs• Intensification of inter-corporate
competitions• Fine Organic Synthesis Technology• Good Manufacturing Practice (GMP)
compliant high-level containment
technology• Chemistry, Manufacturing, and Controls(CMC) support for APIs
• Cutting-edge evaluation functions

Main Measures• Creation and advancement of candidate drugs• Expand our contracted manufacturing business and improve profitability

Sources of Growth and Progress in FY2019
Strengthening Initiatives for Creating Nucleic Acid Technology and Nucleic Acid Drug Discovery
Nucleic acid drugs are attracting attention as a new chemical modality in pharmaceuticals. In 2018, webegan joint research with Luxana Biotech for nucleic acid drug discovery, investing in the company inFebruary 2020. In July 2019, we started joint research with Veritas In Silico on new small molecule drug
discovery targeting nucleic acids.

Concentration of Resource by Narrowing Down Diseases in Small Molecule Drug Discovery
and Contracted Peptide Manufacture
Small molecule drug discovery is concentrated in the cardiovascular disease and neurological disease
fields based on ion channel evaluation capabilities. Peptide drugs have the advantages of antibody andsmall molecule and are expected to be new drugs that can be manufactured at low cost. We invested 900
million yen in 2018 in a third-party allocation of shares of PeptiStar, which is aiming to establish a stablesupply system for APIs of constrained peptides. We will continue our research of new manufacturing
technologies with the aim of dramatically reducing costs.

Continuous Launch of Highly Bioactive Generic Drugs
The demand for eldecalcitol, a drug for treatment of osteoporosis, is growing because the number ofpatients with osteoporosis is expected to increase due to population aging. Based on the production
results of maxacalcitol, a highly active vitamin D3 drug, we are moving ahead with the development ofeldecalcitol, which requires high-quality control because of the susceptibility to decomposition andimpurities caused by oxygen, moisture, and heat in the air. We have established a stable supply system forthe product launch in Japan in 2020 to develop it as a source of business growth.
We have set the foundation for actively working on each pharmaceutical modality (small molecule,
peptides, and nucleic acids). Based on that, we aim to create innovative pharmaceutical products andexpand our APIs and intermediates manufacturing business.

41

Nissan Chemical Corporation Integrated Report 2020

Efforts Started After Stage II Initiation
In addition to developing a therapeutic agent for
thrombocytopenia (NIP-022) and an anti-arrhythmic
agent (NTC-801), we aim to license out at least two
chemical compounds in Stage II among several drugcandidate agents which are at the late stage of drug
discovery. Also, drug discovery researches in earlystages are focused on neurological diseases. To raise
the probability of success, we will also concentrateresearch resources to collaborative drug discovery
research with Shionogi and other pharmaceuticalcompanies, and nucleic acid drug discovery researchwith Luxna Biotech.
Pitavastatin calcium, the API of LIVALO®, will serveas an important source for profits during Stage II as
usual. As pressure to control prices increases, we aim
to maximize value with stable production results andhigh-quality APIs.

It will take time to acquire results in in-house drug
discovery business. Until then, our Finetech businesswill support our pharmaceutical business. In addition to
our business of maxacalcitol, which contributed toStage I profits, we will get our business up to speed in
anticipation of the launch of the eldecalcitol as new
generic drug in FY2020. Furthermore, we will start acontracted peptide manufacture in collaboration with
PeptiStar, a company in which we have invested, using
our overwhelming technological advantages, including
liquid phase synthesis. During the final year of Stage II,
we will proceed with a full-scale plan to transform
Finetech® into a highly profitable business.
Our pharmaceutical business will continue to boldly
challenge in-house drug discovery while supporting the
backbone by our highly profitable Finetech business.

Provision of Products and Services for Helping to Enrich
People’s Lives
APIs Manufacturing(In-house drug discovery businessand Finetech®)
We manufacture APIs at the Onoda Plant,
which is located in Sanyo-Onoda City,
Yamaguchi Prefecture. In addition to being GMP
compliant, it is regularly inspected by domestic
and foreign regulators and customers whose
APIs are supplied, and its level of quality ishighly evaluated.

Contracted Peptide Manufacture(Liquid phase method technology)
At Chemical Research Laboratories located in
Funabashi City, Chiba Prefecture, we aremoving forward with preparations for ourcontracted peptide manufacturing business inwhich we utilize liquid phase method
technology. Due to their nature, biologicalactivity of peptides is demonstrated at
microscopic levels. Therefore, we areconducting research and development in a
special experimental environment in which
peptides are physically contained.

Nucleic Acid Drug Technology Platform
We are preparing to provide a technology
platform based on basic drug discovery
research using a unique nucleic acid chemical
structure developed by Nissan Chemical andnucleic acid chemical element technology
developed by Luxna Biotech. Furthermore, we
are also engaged in research and developmentof highly safe and more effective nucleic aciddrugs.

Nissan Chemical Corporation Integrated Report 2020

42

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Business Strategies

Planning and Development Division
By combining our core technologies with newmaterials and technologies, we are striving tocreate new products and businesses with highadded value that meet the needs of society. The
Planning and Development Division was newly
established in FY2020 to further accelerate
development.

Social Issues and Needs
Economic development and technological innovation haveenriched people’s lives and made them more convenientmaterially. However, there are various challenges for asustainable society, such as the declining birthrate, population
aging, and progressing climate change issues. We are making
various efforts to create new businesses in order to contribute toa society which boasts health and longevity, an advanced
information society, and an environmentally sustainable society.

Business Vision
As a future-creating enterprise, we aim to realize asustainable society by taking on the challenge of exploring
the limitless possibilities of chemistry and creating highvalue-added products in response to customer “trust.”

Business Overview
Life Sciences Materials
We are developing life sciences related materials in
anticipation of entering the cosmetics market and the
expansion of the regenerative medicine market.
In the cosmetics field, we have started sale of
NANOFIBERGEL®, which is being used in a skin care item ofa major cosmetics manufacturers. We are aiming to expand
its demand as an additive for functional cosmetics toenhance penetration of its active ingredients.
In the field of regenerative medicine, in addition to FCeM®
FP and FCeM®Cellhesion®, which are cell culture substrates,
we are promoting the development of prevelex®, a productthat controls protein and cell adhesion.
In the development of the FCeM® series, we are developing
researching mass production methods for making them mainstream of cell culture substrates for mass production ofundifferentiated iPS cells. Furthermore, in the field of
mesenchymal stem cell manufacturing, we are developing
Cellhesion® as a scaffold to manufacture inexpensively
undifferentiated cells with high migration performance andenable autologous transplantation. In addition, prevelex® AP1
has been confirmed to be more effective for preventing
adhesion of proteins, peptides, etc. than competing products,
and has been adopted for test and research applications.

43

Nissan Chemical Corporation Integrated Report 2020

SUZUKI Hitoshi
Director, Managing
Executive Officer
Head of Planning andDevelopment Division

Information & Communication Materials
We are working on the development of new materials that
support cutting-edge devices required to realize Society 5.0.
We will promote market development for materials
including µLED-related materials attracting attention as
next-generation displays with high brightness and highreliability, wafer-level package-related materials, and power
semiconductor-related materials that are next-generation
semiconductor technologies which break down the barriers
associated with miniaturization, and optical interconnect
materials that support high-speed, large-capacity data
communications.

Environmental-Friendly Materials
We are committed to the development of products that
help expand renewable energy and lead to the popularizationof bioplastics.
For lithium-ion batteries (LIB), we have developed
FairCurrent®, an undercoat material that enables quick
charging and long product life, and are aiming for its earlycommercialization.
We are proceeding with the development of
ECOPROMOTE®, a resin additive for increasing the
crystallization rate in the molding process and improving themolding cycle and heat resistance in order to solve issues
related to polylactic acid (PLA), which is expected to be
widely used as a bioplastic.

For New Material Planning and Research
Management
Through venture capital based investment, we are working
to discover high-quality start-up companies and new
development themes. We are working at the revitalization ofdevelopment themes by introducing new materials in eachfield and accelerating commercialization by making licensing
agreements with start-up companies, investing in them, andthrough mergers and acquisitions.
In addition, we are working to strengthen our research anddevelopment capabilities by promoting optimization of
resources through the education and appropriate allocation ofresearchers, and by promoting determination and creation of
new themes by the Theme Council in a timely manner.

Stage II Business Strategies
Opportunities and Risks

Strengths• Expansion of the regenerative medicine market• Growth of the beauty & health market• Increasing demand for technologicaldevelopment aimed at the realization ofa low-carbon society• Development delays and late arrival of
expected new fields

Ability to promote collaborative-based
product creation with customers• Thin film coating based interface control
technology• Fusion of functional material design andbiological evaluation•

Main Measures•

Acceleration of development by allocating resources to important themes•

Achievement of standardization of our materials through participation in national projects•

Improvement of contact with customers and strengthening of solution proposals

Sources of Growth and Progress in FY2019
NANOFIBERGEL®

prevelex®

In addition to the penetration
enhancement effect of active
ingredients such as vitamin A and
Shampoos andvitamin C and the hair membrane
Conditioners
effect, the effects of “improved
cosmetic durability” and “shine control” wereconfirmed by adding NANOFIBERGEL® to makeup
items. In the future, we will promote developmentby expanding the number of different types of items
to use it in.

We designed and introduced our own uniquecoating equipment to better understand the needsof our customers. By manufacturing coatedcontainers in-house, it has become a driving force
in the adoption of coated products by container
manufacturers.

FCeM®Cellhesion®
It has been newly discovered that mesenchymal
stem cells derived from elderly persons can also be
cultured, and studies on autologous transplantation
for these cells for the elderly have begun.

FairCurrent®
In parallel with the provision of samples aimed at
adoption in LIBs for electric vehicles, we havebegun providing samples to domestic and overseas
customers with a view of the consumer LIB market.
We are accelerating practical use of FairCurrent®
also through collaboration with venture companies.

Provision of Products for Helping to Enrich People’s Lives
FCeM®Cellhesion®
Cellhesion®, one of the products in our FCeM® lineup, is a
scaffold for mesenchymal stem cell culture. Clinical trial using
mesenchymal stem cells are undergoing for medical issues
for which there was no treatment, including brain/myocardial
infarction as well as spinal cord injury. However, since thecost of a single treatment is 10 million yen or more, its highprice is a hurdle interfering with its
spread. In 3D cultures using
FCeM®Cellhesion®, high-quality
cells can be produced in large
quantities and at low cost at one
time, which is expected to greatly
contribute to cost reduction duringtransplantation.

Nissan Chemical Corporation Integrated Report 2020

44

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Research and Development
With “Fine Organic Synthesis”, “Functional
Polymer Design”, “Ultrafine Particle Control”,“Biological Evaluation”, and “Optical Control”
serving as our core technologies, we aim tobecome “A future-creating enterprise that responds
to social needs with unique, innovativetechnologies” committed to continue creating newtechnologies and products.

Our Core Technologies
Originally started as a fertilizer company, over ourlong history we have grown with “Fine Organic
Synthesis”, “Functional Polymer Design”, “Ultrafine
Particle Control”, “Biological Evaluation”, and “OpticalControl” serving our core technologies.
In addition to further refining these technologies, we
are working to develop new products and technologies
and create new businesses by fusing thesetechnologies while working closely with each otherbetween research laboratories and related
departments. We are also promoting the introduction of
new technologies through joint research with
universities and other companies.

Our Core Technologies and Products
Fertilizer
Silicate soda

Sulfuric acid

Inorganic
agrochemicals

Ammonia

Introduced Organic
agrochemicals

Precision Technology

Basic Chemicals• High purity chemicals

for semiconductors

Existing
Pharmaceuticals

Petrochemicals

Polyimides

Basic Chemicals• Nitric acid
• Urea• Melamine• Cyanuric acid

Heterocyclic Chemistry

UltrafineParticle Control

Performance Materials(Inorganic Materials)• SNOWTEX®
• Organo sol• Monomer sol

Fine Organic
Synthesis

Chemicals(Fine Chemicals)• Environmental
chemicals• TEPIC®

Functional
Polymer Design

Biological
Evaluation

Pharmaceuticals Produced
Through Contracted Manufacture• Finetech®

New Proprietary Agrochemicals• TARGA®
• SIRIUS®
• PERMIT®
• LEIMAY®
• STARMITE®
• ALTAIR®
• GRACIA®

Active Ingredients
for Veterinary
Pharmaceuticals• Fluralaner45

Nissan Chemical Corporation Integrated Report 2020

Proprietary
Pharmaceuticals• LIVALO®
• LANDEL®

OpticalControl

Performance
Materials• SUNEVER®
• Rayalign®
• ARC®
• OptiStack®

Chemical Research Laboratories

Biological Research Laboratories

Chemical Research Laboratories is Nissan
Chemical’s core R&D site, and is responsible for our
corporate research. In addition to R&D of agriculturalchemicals and pharmaceuticals that utilize the fineorganic synthesis technology, Chemical ResearchLaboratories performs research on companywide
processes, material analysis research, etc.
■ Analysis Research Department■ Synthesis Research Department■ Agricultural Chemicals Research Department■ Pharmaceutical Research Department

Biological Research Laboratories serves as a place
for life science research, such as evaluation research
related to the usefulness and safety of agriculturalchemicals, pharmaceuticals and medical materials.
■ Agricultural Chemicals Research & Development
Department■ Toxicology & Environmental Science Department■ Pharmaceutical Research Department■ Medical Materials Group

Funabashi, Chiba
Shiraoka, Saitama

Materials Research Laboratories
Materials Research Laboratories creates highly
unique new materials, allowing us to respond quickly toincreasingly sophisticated and diverse market needs.
At the same time, the Laboratories focuses their efforts
on researching next-generation materials in an effort tocreate new markets.
■ Display Materials Research Department■ Semiconductor Materials Research Department■ Inorganic Materials Research Department■ Advanced Materials Research Department■ Frontier Materials Research Department

R&D Expenses
We consider R&D is the source of growth, and haveintensively invested our management resources in R&D.
Over the last five years, R&D expenses have totaled
84.1 billion yen. The R&D expenses in Performance
Materials and Life Sciences (Agricultural Chemicals andPharmaceuticals) account for 45% and 41%
respectively. In addition, 39% of employees of regular
position are allocated as R&D personnel.
R&D Expenses(billion yen)
20.0

15.0

Funabashi, Chiba

Toyama, Toyama

10.0

5.0

0

15.8

16.1

1.6

1.7

2.4

2.2

3.9

3.8

7.4

7.9

17.2

17.8
2.0

2.5

2.5

4.3

4.5

8.1

8.2

7.7
0.4
2019 (FY)

0.5

0.5

0.6

0.6

2015

2016

2017

2018

Chemicals
Performance Materials

17.2

1.7

Agricultural Chemicals
Pharmaceuticals

2.0
2.5
4.6

OthersSodegaura, Chiba

Nissan Chemical Corporation Integrated Report 202046

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Strengthening of Nissan Group's Business Base
We are working to secure and develop diverse
human resources in order to improve our R&D
capabilities and product quality. We also aim tostrengthen our business foundation by creating aworkplace where each employee can work
comfortably, and to enhance our ability to respondto the various demands of societies.

Securing and Developing
Human Resources

Self-start Training
For the purpose of laying a foundation for self-starting
human resources who “think and do what they should
do,” technical employees focus on training which
involves “creating original plans and executing them” fora period of two years after entering the company andoffice employees focusing on the same for three years
after entering the company. The ideas proposed byyoung employees during this training are often adopted
and used in subsequent work.

We believe the essence for human resource
development is that each employee will continue toeducate themselves voluntarily in their efforts todevelop themselves. Therefore, we have establishedvarious human resource development programs by
employment tier, including self-start training, for our
employees who aspire to learn new things and develop
themselves. In addition, we started a new humanresources development program in FY2019 based on
the Ideal Human Resources Portfolio, a guideline forhuman resources development.

Intrapreneurship Program (started in FY2019)
We have started an intrapreneur (in-houseentrepreneur) training program with the goal ofdeveloping the abilities of entrepreneurs and fostering
them. With the support of active entrepreneurs,
participants
practiced
behavioral
skills in mixed
team selectedfrom multiple
departments
and acquired
the ability as
innovators
through trial
and error.
Intrapreneurship program

Manager Training (started in FY2019)
We have started training for section chiefs with theaim of developing managers who "provide direction,
guiding organizations and people".
Through repeated sharing and introspection of real
events in organizational management and raisingawareness of challenges, there is a movement among
members to aim for organizational innovation voluntarily.

47

Nissan Chemical Corporation Integrated Report 2020

Self-start training

Overseas Language Study Program
In order to work in a diversified workplace, we
believe that it is important to understand each other'scultural backgrounds and ideas to understand eachother, not only language.
Therefore, we have introduced an overseas language
study program with the aim of having employees learn
by experiencing and following different cultures. In
FY2019, we extended the existing program length by
one month to improve it further.

Lump Sum Payment for COVID-19 Support
As a measure against the spread of COVID-19, westarted working from home in March. At the same time,
we have taken measures to prevent the spread of
infection, such as promoting staggered work. While all
employees made an effort to prevent infection, we wereable to achieve the highest profit in the fiscal year
ended March 2020. It is the result of efforts to respondto changes even during unusual times and complete
work while formulating clever plans. With the desire to
respond to this result and the meaning of expecting
further inspiration in the future, we provided all
employees with a lump sum payment for COVID-19
support at the end of June.

Promotion of Diversity(Kurumin) by the Ministry of Health, Labour, and Welfare
for our efforts as a company to support childcare.

At Nissan Chemical, a diverse range of individuals
have been actively contributing to the Group in a wide
range of fields irrespective of the age, gender, nationality,
or other factors. From here on, we will further promote
diversity in order to improve our corporate value by
taking advantage of diversity that is not represented byattributes, such as values, abilities, and experience.

Promotion of Appropriate Work Hours

Promoting Active Participation of Women in the Workplace
With regard to creating a work environment where
women employees can play an active role, we havebeen working on efforts in order to provide them with agood work-life balance.
In addition, with regard to the promotion of women,
we have set our target to increase the ratio of females
among employees in regular position to 10% by theend of FY2020. We are working so that 30% or more of
new graduates hired for regular positions are females.
We are also working to expand the career areas ofwomen in each department within the company.

Employees with Foreign Nationalities
In regards to our employees with foreign nationalities,
we have a track record of hiring employees with work
experience, new graduates, etc. However, we believethat further promotion of excellent foreigners isessential for further overseas expansion. Since 2017,
we have been strengthening recruitment of international
students with five foreign employees joining thecompany since that time. Moving forward, we willcontinue to promote diversification of human resources
through means including providing information
continuously to international students.

Creation of a Comfortable Workplace
With recognition of growing concern for labor shortagedue to the declining birthrate and population aging as well
as diverse working styles, our Group promotes initiatives
that enable employees to work in a highly productive
manner and achieve a good work-life balance.

Introduction of Systems for Promoting
a Good Work-Life Balance
We have introduced systems andmade improvements for promoting
a good work-life balance. These
include the introduction of a flextime
system, hourly leave system,
improvement of annual leave rate (atleast 70% of available annual leave time taken), andintroduction of a system which allows expired paid leave
to be used for nursing/caregiving. In 2018, we were
granted the Next Generation Accreditation MarkWe are making various efforts to provide appropriate
work hours.
For example, we are promoting the introduction of a
new work management system for grasping andvisualizing working hours and the number of days left
for annual leave in a timely manner based on our own
strict standards that exceed legal standards. We havealso provided training for managers for managing
working hours.

Health Management
Basic Health Policy
The President of Nissan Chemical unveiled the company’s
Basic Health Policy in July 2018.

Basic Health Policy
Mental and physical health is a foundation that
supports sound corporate growth from the viewpointof the happiness of employees and their families, aswell as the trust of the corporate and the smooth
operation of the business. We and our employees will
work together to promote initiatives aimed atmaintaining and promoting health in a multifacetedmanner and aim to be a dynamic company.

1. Employees’ health is based on their own
management and we will provide support.
2. We will implement effective and flexible
measures through smooth internal andexternal cooperation.
3. We will ensure the proper use andmanagement of personal information andcomply with laws and regulations.

The policy’s three main areas of focus are lifestylerelated diseases measures, mental health care, andquitting smoking. Working together with the Health
Insurance Association, we are implementing measuresfor each. We also established the Health Promotion
Office in August 2020.

Certified Health and Productivity Management
Organization (White 500)
We have been recognized for the results of ourhealth management initiatives under the “CertifiedHealth and Productivity Management Organization
Recognition Program (White 500)” for four consecutive
years by the Ministry of Economy, Trade and Industry
and Nippon Kenko Kaigi.

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Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Continuous Improvement of Responsible Care Activities
We are putting effort into Responsible Care (RC)
activities designed to secure environment, healthand safety (EHS) performance on voluntary basis
throughout the entire process, from the developmentof chemical substances to manufacture, distribution,use, final consumption and disposal/recycling, andprovide communication with society through theannouncement of their results.

RC Management
SystemTo achieve our RC mid-term plan (2016-2021), we
have established RC management system based on
ISO14001*, and we carry out targets management andcontinuous improvements based on PDCA (Plan, Do,
Check, Act).
* International standard for environmental management system. All of our plants
have acquired ISO 14001 third party certification.
Environment, Safety &Quality Assurance Committee(Report, annual plan development)

PLAN

Implementationin accordancewith annual plan

Four Codes of RC
ACT
Corrective actions
Annual results report

Environmental Protection/
Safety and Disaster Prevention/
Occupational Safety and Health/Chemicals and Products Safety

Environmental Protection andCountermeasures to Address
Climate Change
Efforts for Reducing Greenhouse Gas (GHG)
Emissions
Our Group actively works to reduce GHG in businessactivities and contribute to realization of a low-carbon
society through the provision of eco-friendly products
and services.
In FY2019, the volume of reduction of GHG emissions
was 37,000 tons (CO2 equivalent) compared to the level
in FY2018 (emissions reduced by 29% from the FY2013
level). The GHG emission rate calculated as a ratio ofemissions and sales (emissions/sales) was 54% of the
FY2013 level.
GHG emissions(1,000 tons-CO2)
500
400
250

Internal Audit

246
232

200
100
0

RC audits are activities forchecking RC activities at eachplant, laboratory and affiliate. They
are carried out by Environment,
Safety & Quality Assurance
Department in accordance with
the RC audit guidelines. In theseaudits, the auditors check whether RC activities, aswell as internal audits and patrols, are carried out
appropriately and the PDCA cycle is implemented
steadily, and compliance about EHS at each location.
Environment, Safety & Quality Assurance Department
clarifies visible or potential problems related to EHS andpromotes improvements in response after clarifying the
problems, if any.
In FY2019, total of 44 RC audits were conducted forour plants, research laboratories and affiliates.

55

153

2013

53

172

2014

CO2 emissions
from energy use

RC Audits

Nissan Chemical Corporation Integrated Report 2020

255

DO

CHECK

49

237

300

55

31

152

155

2015

2016

230

219

23

19

124

114

90

2017

2018

2019 (FY)

CO2 emissions
from non-energy use

18

Dinitrogenmonoxide (N2O)

Index of the GHG emission rate (FY2013 as a base of 100)
(%)
100
46%
80

60
100

95

93

40

84
68

62

54

20

0

2013

2014

2015

2016

2017

2018

2019 (FY)Safety and Disaster Prevention
We carry out risk assessment, process risk
predictions, and facility risk predictions by priorassessment for manufacture with the aim of ensuringsafety, achieving stable operations, and improving ourprocess safety capability.
As a result, in FY2019 there was no accident such as
explosion and leakage. However, a fire broke out whichis thought to be caused by sparks from flames usedduring construction work at our Nagoya Plant
warehouse. The fire was extinguished throughindependent firefighting and did not turn into a major
incident. However, in order to prevent recurrence, we
carried out a comprehensive inspection and review of
all locations where flames are used in work. Our plants,
laboratories, and affiliates carry out various drills andtraining sessions, and are designed to make us readyto respond to emergencies or accidents in a reliable
manner.

wearing of protective equipment and by raisingawareness of safety through the safety meeting and theoccupational safety newspapers.
*1 HHK stands for Hiyari-Hatto (near miss incident) and Kigahari (alarming).
It means the discovery of near-miss incidents that are not linked directly toserious injuries or accidents but could have resulted in such injuries or
accidents.
*2 5S stands for Seiri, Seiton, Seisou, Seiketsu, Shitsuke. These words mean
“Sort” “Set” “Shine” “Standardize” “Sustain” respectively.

Lost-time injury frequency rate*
1.60

1.48

1.11

1.20

0.94

0.88
0.80
0.72

0.88 0.85
0.82

0.76

0.81

0.81

0.37

0.40
0.36 0.36 0.37 0.37
0.00

0.90 0.73

0.37
0.00

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (FY)
Nissan Chemical

Chemical industry* Number of deaths and injuries due to occupational accidents per million actual
working hours

Chemicals and Products Safety
Risk Assessment in Products Lifecycle

New Year firefighters’ event (Toyama Plant)

Occupational Health and Safety
Through our RC management system, we prevent
occupational accidents, promote the good health ofstaff, and build a comfortable workplace environment inour efforts to improve the level of safety and health ateach business location. In addition, we carry out
various drills and training sessions annually with the aimof ensuring safety, achieving stable operations, andimproving our process safety capability to make us
ready to respond to emergencies or accidents in a
reliable manner.
In FY2019, there were two cases of accidents
requiring staff time off from work and three cases ofaccidents not requiring staff time off from work. We willcontinue aiming to achieve zero accident by promoting
risk assessment, prior-work risk predictions, risk
predictions training, HHK*1, 5S*2, and appropriate

We perform a risk assessment (prior assessment) of
each step in handling chemical products, such as the
R&D, manufacture and sales. The assessment of risks
to human health and the environment is based on dataobtained by the Biological Research Laboratories,
either on its own or by outsourcing, raw material SDS(safety data sheets), safety test date obtained fromliterature and external databases, physicochemical
properties, and work environment conditions. These
results are reported to all the relevant people in the
Company. The results are also made known to people
in the value chain by means such as technology
transfer documents.
In addition, we also participate in Long-Range
Research Initiative, an international initiative promoted
by Japan Chemical Industry Association (JCIA) thatseeks to provide long-term support for research on theimpact of chemicals on human health and theenvironment. The activities we engage in aim toadvance research on the assessment of risks to humanhealth and the environment.

Nissan Chemical Corporation Integrated Report 2020

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Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Corporate GovernanceWe think of corporate governance asa mechanism that ensures sound,
efficient management to provide
stakeholders with sustainable, mid- tolong-term profits. Based on this policy,
we strive to ensure management
decisions are made promptly, and work
to clarify the management responsibility
and responsibility for executing
operations. At the same time, we takeinitiatives for strengthening themanagement’s monitoring function,compliance, risk management, andinternal control system under our Boardof Directors and Audit & Supervisory
Board, whose members include highly
independent outside officers.

KINOSHITA Kojiro (Representative Director, President & CEO)MIYAJI Katsuaki (Director, Managing Executive Officer)

1977 Joined the Company
2002 Director, Head of Corporate Planning Department
2006 Managing Director
2008 Representative Director, President & CEO (to thepresent)

1985 Joined the Company
2010 Director, Head of Chemical Research Laboratories
2011 Director, Head of Advanced Materials & Planning Department
2014 Executive Officer, Head of Electronic Materials ResearchLaboratories
Executive Officer, Head of Materials Research Laboratories
2016 Managing Executive Officer, Head of Corporate Planning
Department
Director, Managing Executive Officer, Head of Corporate
Planning Department (to the present)

MIYAZAKI Junichi (Director, Senior Executive Vice President)
1974 Joined the Industrial Bank of Japan, Limited(current Mizuho Bank, Ltd.)
2000 General Manager of International Department of
The Industrial Bank of Japan, Limited (current
Mizuho Bank, Ltd.)
2003 Corporate Auditor of Mizuho Corporate Bank, Ltd.
(current Mizuho Bank, Ltd.)2005 Managing Executive Officer of Kowa Real Estate Co.,
Ltd. (current Nippon Steel Kowa Real Estate Co., Ltd.)Managing Director of Kowa Real Estate Co., Ltd.
(current Nippon Steel Kowa Real Estate Co., Ltd.)
2006 Joined the Company, Advisor
Director
2007 Director, Head of Corporate Administration
Department
2008 Managing Director
2011 Senior Managing Director
2013 Director, Senior Executive Vice President (to thepresent)

YAGI Shinsuke (Director, Senior Managing Executive Officer)

New

1985 Joined the Company
2013 Deputy Plant Manager of Onoda Plant
2016 Executive Officer, Plant Manager of Sodegaura
Plant
2018 Managing Executive Officer, Head of Production
Technology Department
2020 Senior Managing Executive Officer, Head of
Production Technology Department
Director, Senior Managing Executive Officer, Headof Production Technology Department (to thepresent)

51

Nissan Chemical Corporation Integrated Report 2020

HONDA Takashi (Director, Managing Executive Officer)
1981 Joined the Company
2012 General Manager of Planning & Development
Department, Agricultural Chemicals Division2014 Executive Officer, Deputy Head of Agricultural Chemicals Division,
General Manager of Planning & Development Department
2017 Managing Executive Officer, Head of Agricultural
Chemicals Division
Director, Managing Executive Officer, Head ofAgricultural Chemicals Division (to the present)

SUZUKI Hitoshi (Director, Managing Executive Officer)
1985 Joined the Company
2007 General Manager of Semiconductor Materials
Department, Electronic Materials Division2010 General Manager of Semiconductor Materials Research
Department, Electronic Materials Research Laboratories
2012 General Manager of Semiconductor Materials
Department, Performance Materials Division2013 Deputy Head of Performance Materials Division
Director, Deputy Head of Performance Materials Division2014 Executive Officer, Deputy Head of Performance
Materials Division2016 Executive Officer, Head of Materials Research Laboratories
2018 Managing Executive Officer, Head of Performance
Materials Division
Director, Managing Executive Officer, Head of
Performance Materials Division2020 Director, Managing Executive Officer, Head of Planningand Development Division (to the present)

ONITSUKA Hiroshi (Audit & Supervisory Board Member)
1981 Joined the Company
2001 General Manager of Toxicology & Environmental Science
Department, Biological Research Laboratories
2007 General Manager of Analysis Research
Department, Chemical Research Laboratories
2011 Head of Biological Research Laboratories
2013 Director, Head of Biological Research Laboratories
2014 Director, Executive Officer, Head of Research Planning Department
Executive Officer, Head of Research Planning Department
2016 Executive Officer, Head of Chemical ResearchLaboratories
2019 Audit & Supervisory Board Member (to the present)

OHE Tadashi (Outside Director)

Outside1969 Qualified for attorney-at-law
1989 Instructor for the Legal Training and ResearchInstitute of Japan (court representation in civil
proceedings)
1994 Outside Corporate Auditor of Canon Inc.
2004 Outside Corporate Auditor of Marui Group Co., Ltd.
2006 Outside Corporate Auditor of Kao Corporation2011 Outside Director, JECO Co., Ltd. (to the present)2015 Outside Director of the Company (to the present)

OBAYASHI Hidehito (Outside Director) Outside
1969 Joined Hitachi, Ltd.
2001 Director of Hitachi High-Technologies Corporation(current Hitachi High-Tech Corporation)
2003 Vice President and Executive Officer of Hitachi
High-Technologies Corporation
2006 Representative Executive Officer, Senior Vice
President and Executive Officer of Hitachi
High-Technologies Corporation2007 Director, Representative Executive Officer,
President and Chief Executive Officer of Hitachi
High-Technologies Corporation2011 Chairman of the Board of Hitachi HighTechnologies Corporation2013 Consultant of Hitachi High-Technologies Corporation
2015 Honorary Consultant of Hitachi
High-Technologies Corporation (to the present)
2019 Outside Director of the Company (to the present)

New Outside

TAKEMOTO Shuichi (Outside Audit & Supervisory Board Member) Outside

1979 Assistant Professor of Institute of Biomedical
Engineering at Tokyo Women's Medical University
1988 Associate Professor of Institute of Biomedical
Engineering at Tokyo Women's Medical University
1994 Professor of Faculty of Industrial Science andTechnology at Tokyo University of Science
1998 Professor of Graduate School of Engineering at
The University of Tokyo
2004 Professor of Graduate School of Medicine at The
University of Tokyo
2015 Director General of Innovation Center of
NanoMedicine, Kawasaki Institute of Industrial
Promotion (to the present)2016 Professor Emeritus and Project Professor at The
University of Tokyo (to the present)
Deputy Chairman of Kawasaki Institute ofIndustrial Promotion (to the present)
2020 Outside Director of the Company (to the present)
Outside Director of NanoCarrier Co., Ltd. (to thepresent)

KATAOKA Kazunori (Outside Director)

1982 Joined the Fuji Bank, Limited (current Mizuho Bank, Ltd.)
2002 Deputy General Manager, IT & Systems Control
Department of Mizuho Bank, Ltd.
2004 General Manager, Human Resources Division ofMizuho Information & Research Institute, Inc.
2008 General Manager, Fukuoka Branch of Mizuho
Bank, Ltd.
2009 General Manager, IT & Systems Planning
Department of Mizuho Trust & Banking Co., Ltd.
2010 Executive Officer, IT & Systems Planning
Department of Mizuho Trust & Banking Co., Ltd.
2011 Managing Executive Officer of Mizuho Trust &Banking Co., Ltd.
2013 Managing Executive Officer of Mizuho Trust &Banking Co., Ltd., and Managing Executive
Officer of Mizuho Financial Group, Inc.
2014 Deputy President of Mizuho Private WealthManagement Co., Ltd.
2017 Advisor of Mizuho Trust & Banking Co., Ltd.
Outside Audit & Supervisory Board Member of theCompany (to the present)

SUZUKI Norihiro (Outside Audit & Supervisory Board Member) Outside
1983 Joined the Norinchukin Bank
2003 General Manager of Naha Branch2008 General Manager of Cooperative Finance &Administration (Kanto Area) Div.
2010 Seconded to Eiraku Co., Ltd. as President (current
Norinchukin Facilities Co., Ltd.)2012 Managing Director of The Norinchukin Bank
2014 Director of Nochu Business Support Co., Ltd.,and Director of Nochu Information System Co.,Ltd.
2016 Outside Audit & Supervisory Board Member of theCompany (to the present)

KATAYAMA Noriyuki (Outside Audit & Supervisory Board Member) Outside
1990 Qualified for attorney-at-law, Joined Nagashima &Ohno (current Nagashima Ohno & Tsunematsu)
1996 Qualified for attorney-at-law in New York State, USA
Joined Tokyo City Law & Tax Partners
2003 Joined City-Yuwa Partners (to the present)
2004 Statutory Auditor of Deutsche Asset Management(Japan) Limited (to the present)
2005 Statutory Auditor (part-time) of Deutsche Securities
Junbi K.K. (current Deutsche Securities Inc.)
2006 Outside Director of Accordia Golf co., Ltd.
2009 Visiting Professor of Toyo University Law School2013 Supervisory Director of SIA REIT, Inc. (current One
REIT, Inc.)
2014 Examiner for the preliminary bar examination
Outside Audit & Supervisory Board Member of theCompany (to the present)2017 Supervisory Director of HEIWA REAL ESTATE
REIT, Inc. (to the present)2018 Outside Director of Nippon Denkai, Ltd. (to thepresent)
2019 Outside Corporate Auditor of Livesense Inc. (tothe present)
Nissan Chemical Corporation Integrated Report 2020

52

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Corporate Governance System
General Meeting of Shareholders

Accounting Audit

Accounting Auditor

ReportNomination and Advice
Remuneration
Advisory
Committee

Audit

Audit & Supervisory Board

Board of Directors
Three out of the nine
directors are outside directors

Three out of the four members areoutside Audit & Supervisory Board Member

ReportCooperate(Business execution framework)
President & CEO

ReportManagement Meeting
Internal Audit
Department

CSR Committee

Risk Management &Compliance Committee

Each division/
department

Environment, Safety &Quality AssuranceCommittee

Group Companies

Execution and Supervision of Operations
By introducing a system with executive officers, weclarify the management’s function of prompt decisionmaking and supervision and the function of executing
operations, thereby strengthening both. We also strive
to improve management’s capabilities to develop andexecute our management strategies. In addition, we
have set a one-year term for each director andexecutive officer, thereby clarifying the management
responsibility and the responsibility for executing
operations.

Board of Directors
Our Board of Directors members meet monthly inprinciple, to resolve important management matters. It

53

Nissan Chemical Corporation Integrated Report 2020

Audit

Audit

also supervises the execution of operations by directors
and executive officers. We ensure that importantmanagement matters are determined through careful
deliberations at the Board of Directors meetings ormanagement meetings in our efforts to eliminate or
reduce business risks. In addition, the details ofdecisions made at the management meetings and theresults of business executions based on decisions
made at the Board of Directors meetings, etc. arereported to the Board of Directors to enhance thesupervising function of the Board of Directors meeting.
We further strive to ensure and improve effectiveness inexecution of roles and responsibilities of the Board of
Directors by conducting the effectiveness evaluation on
the overall Board of Directors every year.

Audit & Supervisory Board

Accounting Audit

We have established the Audit & Supervisory Board.
In accordance with auditing plans formulated by the
Audit & Supervisory Board with a majority that consistsof independent outside members, the Audit &Supervisory Board members audit the execution of
directors’ operation by participating in the Board of
Directors meetings and other important meetings, andby regularly visiting each division/department of the
Head Office and plant/laboratory to exchange opinions.

We have appointed the Yaesu Audit Company as our
accounting auditor. They audit at the end of each fiscal
year, and during the fiscal year as necessary.

Internal Audit
We have the Internal Audit Department, which
conducts fair and independent internal audits of ourGroup. The results of internal audits are reported to theRepresentative Director, President & CEO, managing
executive officers, and the Board of Directors. In
addition, the department shares information with theaccounting auditors and Audit & Supervisory Board, andcollaborates with them by mainly exchanging opinions.

Nomination and Remuneration Advisory
Committee
We established under the Board of Directors a
Nomination and Remuneration Advisory Committee
mostly consisting of independent outside directors for the
purpose of strengthening the Board of Directors’
independence, objectivity, and accountability in relation tomatters such as the nomination and remuneration of
directors and further strengthening corporate governance.
The Nomination and Remuneration Advisory Committee
was held in April, June, November, and December of2019 and in January of 2020 (total of five times in
FY2019). It deliberated matters, such as appointment ofcandidates as directors and Audit & Supervisory Board
members and management executives, succession plans
for management executives, and remuneration for
directors in response to consultation from the Board of
Directors, and reported the content of their deliberations
to the Board of Directors.

Support for Outside Directors and Outside Audit &Supervisory Board Members
The Corporate Planning Department supports outside
directors by providing them with explanations of thecontents of the agenda and other matters to be
discussed at the Board of Directors meetings in advanceand also provides management information necessary
for growth strategies, enhancement of governance, etc.
For outside Audit & Supervisory Board members, wehave appointed audit assistants from our employees to
respond to the requests from them. To enable Audit &Supervisory Board to fulfill their duties efficiently andsmoothly, the audit assistants serve as coordinators forholding hearings pertaining to divisions, etc., Audit &Supervisory Board meetings and other meetings, help
conduct audits, and collect information.

Governance Structure*
Indicator

Unit

FY2016FY2017FY2018FY2019Inside directors

People77

66Outside directors (Independent)

People

2 (2)

2 (2)

2 (2)

3 (3)

Total

People9989Ratio of independent outside directors (Actual)

%

22

22

25

33

Ratio of independent outside directors (Target)

%

-

-

33

33

Ratio of female directors

%

0

0

0

0

Number of Executive Directors

People7

7

6

6

Average terms of positions held

Years

6.2

5.1

6.5

6.7

Board of Directors meetings

Times

12

12

12

12

Attendance of directors at Board of Directors
meetings

%

100

99.1

100

99.0

Attendance of Audit & Supervisory Board
members at Board of Directors meetings

%

100

100

97.9

100

Directors

Scope of reporting* Data is as of after the General Meeting of Shareholders held in June of each year.

Nissan Chemical Corporation Integrated Report 2020

54

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Policy and Procedures in the Nomination of Officer Candidates
Decisions regarding the nomination of candidates for
directors and Audit & Supervisory Board members are
made at the Board of Directors meetings attended byoutside directors and proposed at the General Meetingof Shareholders.

In addition, nominations of Audit & Supervisory
Board members candidates are approved by the Audit& Supervisory Board in advance.

Nominate Policy
PolicyNumberstipulated in the
Articles ofIncorporation

Number of
Current outside officers
number included in the
figure on the left

Directors

We operate business activities globally in diverse fields, including chemicals,
performance materials, agricultural chemicals, and pharmaceuticals. In nominating
candidates for our directors, we consider the balance between knowledge,
experience, capabilities, and other elements of the overall board of directors andits diversity to ensure that our directors can make decisions regarding thebusiness activities in diverse fields, including chemicals, performance materials,
agricultural chemicals, and pharmaceuticals, and supervise the execution ofoperations in an appropriate and flexible manner. The candidates to be nominatedshall also be physically and mentally healthy, have excellent personalities andaspirations, and have a high level of insight and ethics.
<Inside Directors>
Human resources who have expertise, knowledge and other capacities in eachbusiness field such as corporate planning, personnel, finance & accounting,research and development, production technology, environment, safety & quality
assurance and others.
<Outside Directors>
Human resources who are capable of giving opinions proactively, raising questions
and giving advice on growth strategies, the enhancement of governance andother issues from the viewpoints of various stakeholders and society.

12

9

3 (3)

Audit &
Supervisory
Board Members

Human resources with experience and knowledge in a wide range offields including finance, accounting, and law who are capable of giving
opinions and advice to the management from a fair and neutral standingpoint, in addition to auditing the execution of operations.

5

4

3 (2)

*1 The figure in ( ) indicates the number of directors/Audit & Supervisory Board members designated as independent officers.

Appointment of Outside Officer

OutsideDirectors

OutsideAudit &
Supervisory
Board
Members

55

Name

Reason for appointment

OHE Tadashi
Appointed in June2015

We believe that Mr. Ohe has reflected his extensive experience, including his experience ofoutside director at several companies and expertise as attorney-at-law in our corporate
management from an objective and neutral standing-point, and will continue to fulfill the duties
appropriately.

OBAYASHI Hidehito
Appointed in June2019

After having served as Chairman of the Board of Hitachi High-Tech Corporation, Mr. Obayashi
serves as Honorary Consultant for the same company. As an executive of a corporate groupthat develops a variety of businesses globally, we believe that his extensive experience andbroad insight can be reflected in our corporate management from an external perspective froman objective and neutral standing-point.

KATAOKA Kazunori
Appointed in June
2020

Mr. Kataoka has been engaged in research involving the application of nanotechnologies in thefields of biomedical engineering and biomaterial engineering for many years and is currently serving
as the Director General of Innovation Center of NanoMedicine, Kawasaki Institute of Industrial
Promotion. We believe that his expertise as doctor of engineering, abundant experience, andwide-ranging knowledge can be reflected in our corporate management from an external
perspective from an objective and neutral standing-point.

SUZUKI Norihiro
Appointed in June
2016

Mr. Suzuki has a wide range of knowledge, including extensive experience and finance expertise
cultivated through many years of business at financial institutions. We believe that he has reflectedthat knowledge in our corporate audit with objective and neutral standing-point, and will continue tofulfill the duties appropriately.

TAKEMOTO Shuichi
Appointed in June
2017

Mr. Takemoto has a wide range of knowledge, including extensive experience and finance expertise
cultivated through many years of business at financial institutions. We believe that he has reflectedthat knowledge in our corporate audit with objective and neutral standing-point, and will continue tofulfill the duties appropriately.

KATAYAMA Noriyuki
Appointed in June
2014

Mr. Katayama has an extensive experience including the experience of outside director/auditor
at several companies and expertise as attorney-at-law. We believe that he has reflected his
knowledge in our corporate audit and will continue to fulfill the duties appropriately.

Nissan Chemical Corporation Integrated Report 2020

Officers’ Remuneration
The fundamental principle in directors’ remuneration is tomaintain its system that is in line with management policy byensuring that directors contribute to increasing operating
performance on a continual basis over the mid- to long-term
and toward increasing the overall value of the Group, thereby
meeting shareholder expectations. At the same time, thebasic policy (Policies on determining remuneration of
Directors) is to set remuneration at an appropriate level,taking into account such factors as the management
environment, operating performance and consistency withthe treatment of employees.
The remuneration system for directors consists ofmonetary remuneration and performance-linked stockcompensation, of which monetary remuneration is divided
into base remuneration and performance remuneration that isdetermined taking into account the fluctuation of employee
bonuses, etc. Outside directors are not eligible for
performance-linked stock compensation and their monetary
remuneration consists only of base remuneration for
perspective of their roles and independence.
Regarding performance-linked stock compensation, we
have adopted in FY2019, with the aim of increasingawareness about improving earning over the mid- to longterm and contributing to enhancing corporate value by
clarifying the link between the Company's performance andits stock price, and by having directors share with theshareholders not only the benefits of increases in the stock
price, but also the risk of decreases in the stock price.
Excluding performance-linked stock compensation, theremunerations of individual directors are determined at theBoard of Directors meeting after deliberations of theNomination and Remuneration Advisory Committee mostly
consisting of independent outside directors as well as within
the total amount determined by resolution of the General
Meeting of Shareholders. The remunerations of individual
Audit & Supervisory Board members are determined throughdiscussions among Audit & Supervisory Board members.

Performance Evaluation Coefficient(Short-term net income coefficient attributable toowners of the parent ×10%) + (Mid-to-long term net
income coefficient attributable to owners of the parent
×20%) + (EBITDA coefficient ×30%) +(ROE coefficient×30%) +(the Company stock price and TOPIX year-onyear volatility comparison coefficient ×10%)
In addition, if a director subject to performancelinked remuneration is dismissed through the General
Meeting of Shareholders or Board of Directors meeting
during the period until retirement (excluding dismissal
when the director concerned is appointed as an Audit& Supervisory Board member), commits any illegal act
during tenure and retires, commits any inappropriate
act that causes damage to the Company during tenure,or if the director is found to have violated laws,
regulations, articles of incorporation, or internal rules,
etc., the director will be unable to acquire the right toreceive performance-linked stock compensation.
Main Activities of the Nomination andRemuneration Advisory Committee (FY2019)

Items related
to officers
designation• Evaluation of representative director andexecutive director based on dismissal
criteria, business performance, etc.
• Deliberation on succession plans (humanresources requirements, etc.) for
representative director and executive
director; deliberation on proposals for
the General Meeting of Shareholders
regarding the selection and dismissal of
directors and Audit & Supervisory Board
members

Items related
to officers
remuneration• Deliberation on remuneration systemfor directors• Deliberation on remunerations forindividual directors• Deliberation on proposals for the
General Meeting of Shareholders
regarding directors and Audit &Supervisory Board members
remuneration

Overview of Performance-Linked Stock
Compensation Plan
The Company grants its directors points based on its net
income attributable to owners of the parent (year-on-year rateof change and average rate of change over the last three
years), EBITDA (year-on-year rate of change), ROE (actual
results for the current fiscal year), and comparison of rates ofyear-on-year volatility with respect to the Company’s stock
price and TOPIX. Each fiscal year, the Company determines
whether the points are to be granted or not and the number ofpoints to be granted. Upon their retirement, directors are to be
paid performance-linked stock compensation (part in monetaryform) equivalent to their accumulated points. (For details on
how to calculate performance-linked stock compensation planamounts, etc., please refer to P42 “Compensation, Etc. for
Officers” of the 150th Securities Report.)
https://www.nissanchem.co.jp/ir_info/archive/yuho/y20_03.pdf▼

150th Securities Report

Monetary Remuneration Decided Through Resolution
During the General Meeting of Shareholders
Number of
officers

Remuneration

Directors

9329 million yen

Audit & Supervisory
Board members

5

89 million yen

Total

14

419 million yen(includes outside
officers)

6

88 million yen

Officer

The above number of officers and remuneration include remuneration for one
Audit & Supervisory Board member who retired at the close of the 149th
General Meeting of Shareholders held on June 26, 2019.
In addition, the remuneration information above includes the amount of 11
million yen recorded as expenses for the current fiscal year related to stockcompensation for six directors, excluding outside directors.

Nissan Chemical Corporation Integrated Report 2020

56

Our Future-Creating Story

Foundation for Future Creation

Effectiveness Evaluation of Boards
Nissan Chemical believes that the primary roles andresponsibilities of the Company’s Board of Directors aredefined as: (1) establishing a strategy for achieving
sustainable growth and increase in corporate value overthe mid- to long-term, and facilitating the execution of
the foregoing; (2) establishing an environment that
supports risk-taking by the management, including theinternal control system and the risk management
system; (3) strengthening the swift management
decision-making and oversight function and theexecution function through clarification of both functions;and (4) further enhancing management transparency,
soundness and objectivity through, among other efforts,
appointment of outside officers who monitor andoversee the management from external viewpoints, andthe Company performs analysis and evaluation (the“Effectiveness Evaluation”) every year to see if the Boardof Directors has fulfilled these roles and responsibilities.
The Company has conducted the EffectivenessEvaluation every year since FY2015, and carried out athird-party evaluation every several years using an
external organization that holds no relationships ofinterest with the Company in order to ensure neutrality
and objectivity. The third-party evaluation was carried out
recently in FY2017, and the Effectiveness Evaluation in
FY2019 was conducted in the form of a self-evaluationby the Company’s Board of Directors.

Evaluation Procedure
The evaluation procedure is in the form of aquestionnaire answered by all directors and Audit &Supervisory Board members, that grasps the current
status and identifies issues from two perspectives,
quantitative evaluation and qualitative evaluation, througha combination of five-grade evaluation and free writing.
An external organization is contracted to collect the
responses and collate the data in order to ensure
anonymity, which enhances the self-evaluation.
Based on the results of the questionnaire responses, anopinion-exchange meeting was held in March 2020 (withall independent Officers (3 outside directors and 2 outside
Audit & Supervisory Board members (including 1 full-time
Audit & Supervisory Board member)), the President &CEO, the Senior Executive Vice Presidents, and the
Director and Head of Corporate Planning Department) to
discuss issues and responses and conduct analysis andevaluation. The results of the analysis and the evaluation
were discussed and confirmed at the Board of Directors
meeting held in May 2020.

Issues Identified in the Effectiveness Evaluation
for FY2018
1) Examining the following while making use of theNomination and Remuneration Advisory Committee:i) Creating systems to appropriately reflect theCompany’s business performance in thenomination and remuneration of directors.
ii) Taking a leading role in formulating and57

Nissan Chemical Corporation Integrated Report 2020

Corporate Data

implementing succession plans for senior
management and appropriately supervising thedevelopment of successor candidates, along with
providing opportunities for explaining anddiscussing successor development plans, including
for other directors and executive officers.
2) E xamining the creation of a system that allows eachdirector and Audit & Supervisory Board member
sufficient time for discussion by further innovating
methods for prior provision and sharing of
information to directors and Audit & Supervisory
Board members in order to deepen their deliberation
on matters for resolution within a limited time.
3) Examining the creation of a system for regularly
verifying the investment impact of investment projects
approved by the Board of Directors and reporting theverification result to the Board of Directors.

Effectiveness Evaluation Result for FY2019
As a result of the Effectiveness Evaluation for
FY2019, it was concluded that the Company’s Boardof Directors was generally operating appropriately
overall from the perspective of carrying out its principle
roles and responsibilities, and that the effectiveness of
the Board of Directors was ensured as improvement
measures were taken with regard to issues identified in
the Effectiveness Evaluation for FY2018.

Points of Future Improvement
Through the discussion that was conducted thistime, the following issues were identified from aperspective of further enhancing the effectiveness of
the Board of Directors, and the Company confirmedthat measures are to be taken to improve them.
1) Enhancing information sharing with the Board of
Directors on deliberations at the Nomination andRemuneration Advisory Committee to boost theBoard of Directors’ oversight function with regard to
the remuneration and nomination of directors andsuccession plans.
2) Deepening discussions among all directors in the
Board of Directors with regard to diversity ofmembers of the Board of Directors (particularly
viewpoint of gender).
3) Ensuring the effectiveness of the decision-making
process by getting more creative as to quality, volume
and understandability of information (regarding
matters to be resolved by the Board of Directors) tobe shared with directors (particularly outside directors)
and Audit & Supervisory Board members.
By enabling deeper discussion in the Board of
Directors based on the recent evaluation result andcontinuing to implement measures to improve theeffectiveness of the Board of Directors, the Company
will ascertain the status of improvement on a regularbasis through the Effectiveness Evaluation and further
enhance the effectiveness of the Board of Directors inan effort to achieve sustainable growth and increase incorporate value.

Messages from Outside Officers
Appropriate risk-taking and the role of an outside director

OHE Tadashi
Outside Director

As a lawyer, I have been mainly involved in the management of corporate legals and have beenasked for advice on corporate governance and company management. In addition to further
expanding the four existing businesses of the Chemicals, Performance Materials, Agricultural
Chemicals, and Pharmaceuticals, Nissan Chemical is facing the challenge to enter new businessareas. In order for any business to be successful, risk-taking cannot be avoided. As an outside
director who is required to take the position of a third party, I pay attention to "whether information
about the matter is given to the Board of Directors regardless of advantages or disadvantages
when making management decisions," and pay sufficient attention to the risks involved in thematter. After that, I try to make a judgment. I provide support for appropriate risk-taking. Nissan
Chemical is a well-developed research, sales and management company. I expect many resultsfrom the company in the future. Furthermore, I would like to contribute to the realization of those
future results from the perspective of protecting the interests of our stakeholders.

Advancement in our management of technology system
and rapid realization of future creation

OBAYASHI Hidehito
Outside Director

Nissan Chemical regards corporate governance as "a mechanism that ensures sound,
efficient management," implements various related measures, and expects outside directors toplay a certain role in achieving this goal. When I was appointed as a director last year, my first
impressions were: 1. The company possesses technological strength and the vitality of young
employees is wonderful., 2. The company analyzes the movements of society, markets,
customers, etc. well and carries out relevant detailed management. Although these are greatcompetitive advantages, I also feel that they are not fully utilized in the field of management.
Based on the slogan of "Where it all begins", I hope that the company-wide system thatconnects technological results to business will be further enhanced. There is also room for
improvement in terms of speed, from decision making to execution and obtaining results.
I hope that Nissan Chemical will change from a "reactive" company that only keeps up withchanges in society to a "proactive" company that leads changes.

Evolving corporate governance and the role of corporate
auditors

KATAYAMA Noriyuki
Outside Audit & Supervisory
Board Member

As SDGs are the "goals" of various corporate activities, the concept of “ESG" focuses on
the "process" of corporate activities. By conducting daily corporate activities with ESG in
mind, we can improve the sustainability of the company and contribute to the achievementof SDGs in the future. Under these circumstances, the number of discussions on corporate
governance, such as the establishment and review of the Corporate Governance Code forlisted companies, has been increasing in recent years.
Outside corporate auditors not only play an important role in governance, checking thelegality of business execution by directors under the trust of shareholders, but also take into
account the interests of shareholders and other stakeholders from an independent
standpoint. In addition, it is necessary for them to contribute to the improvement ofcorporate value. I expect Nissan Chemical to respond to the evolution of corporate
governance through the creation and operation of a stronger internal control system.

Nissan Chemical Corporation Integrated Report 2020

58

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Compliance
Since our Group regards compliance with laws
and social norms as a condition for the survival anddevelopment of the company, our Basic CSR Policy
stipulates that we need to conduct “sensible
business activities” and conduct ourselves as“good corporate citizens and decent members ofsociety”. In response, we recognize thatcompliance means complying with laws and social
norms, formulate compliance rules, and established
a compliance basic policy.

Compliance Basic Policy
1. We consider compliance to be an
important management issue andensure thorough compliance in every
aspect of its business activities, thereby
establishing corporate ethics.
2. All officers and employees of Nissan
Chemical Group shall be sufficiently
aware of compliance and prevent theoccurrence of a compliance violation.
3. In the event that a compliance violation
has occurred or is likely to occur, we takea prompt and appropriate response.

SystemIn our Group, the Risk Management & Compliance
Committee, which is held twice a year, has been
established as an organization to enhance theeffectiveness of risk management, and to maintain andpromote compliance. The committee is chaired by the
Chief Risk Management Officer (CRO), who isappointed at the Board of Directors meeting, and iscomposed of the Risk & Compliance Managers, who
are heads of each division/department, plant/
laboratory, and domestic consolidated subsidiary. The
Risk & Compliance Managers are designated by theCRO. The important matters related to compliance ofeach division/department, plant/laboratory, anddomestic consolidated subsidiary and countermeasureplans, etc. are approved by the Board of Directors after
discussion by the committee.
The Risk Management & Compliance Office under
the Corporate Planning Department has been
established as a specialized organization to promote
continuous improvement in all of our Group's
compliance activities. In addition to providing educationand guidance on risk management and compliance,
the Risk Management & Compliance Office receives
reports on the status of compliance with laws andregulations and the status of education and training ineach department on a regular basis from Risk &Compliance Managers, and when necessary, supports
improvement, and shares information within our Group.
Furthermore, we have established the Consultation
Hotline to serve as an internal reporting system toprevent compliance violation or resolve the problem
early on.

Number of Compliance Violations
Indicator

Scope of reporting

Unit

2016

2017

2018

2019

Consultation Hotline Reports

Consolidated*

Cases

0

0

3

2

Legal actions received for anti-monopoly/
anticompetitive practices (under investigation)

Consolidated*

Cases

0 (0)

0 (0)

0 (0)

0 (0)

Fines charged and settlement fees for anti-monopoly/
anticompetitive practices

Consolidated*

1,000 yen

0

0

0

0

Confirmed corruption incident (under investigation)

Consolidated*

Cases

0 (0)

0 (0)

0 (0)

0 (0)

Fines charged and settlement fees for corruption

Consolidated*

1,000 yen

0

0

0

0

Other incidents related to compliance (excluding
environmental)

Consolidated*

Cases

0

0

0

0

Fines charged and settlement fees for othercompliance related incidents (excluding
environmental)

Consolidated*

1,000 yen

0

0

0

0

* Includes domestic unconsolidated group companies

59

Nissan Chemical Corporation Integrated Report 2020

Consultation Hotline
We have Consultation Hotline to prevent complianceviolation or resolve the problem early on. When an
employee discovers a compliance violation or potential
compliance violation, he or she shall address the
problem in normal operation in principle, throughmeasures that include reporting the matter to theirsuperior. However, if he or she thinks it is difficult toaddress the problem promptly and effectively, they can
use the Consultation Hotline. The contact point forreporting shall be the Risk Management & Compliance
Office, outside attorneys, or outside Audit &Supervisory Board members, and the means forreporting may be selected by e-mail, mail, or telephone.
Upon receipt of a report, the contents are reported to
the Audit & Supervisory Board members. While
accepting anonymous consultations, we haveestablished a system that allows us to provide peace ofmind by clearly defining in our rules the prohibition ofinterference with investigations, finding informants, andharassment.

Bribery of Foreign Public Officials”. We also conduct
training with an emphasis on practicality, such assystematically holding in-house seminars themed onfamiliar legal matters, lectured by internal instructors.
Various trainings are provided to officers andemployees of our company as well as those of affiliatedcompanies as efforts to improve the knowledge of theentire Group.

Compliance Training

Compliance ManualCompliance Training
We hold training sessions on corporate ethics forofficers and employees, including new employee
training, working to ensure that each and every one of
us looks at compliance and actively promotes it.
In addition, regarding various laws and regulations,
we regularly hold training on important businessthemes such as the “Act against Delay in Payment of
Subcontract Proceeds, Etc. to Subcontractors”, insider
trading regulations, and regulations on the “Combating

The Compliance Manual sets forth rules so that
executives and employees, etc. (regular employees,
contract employees, part-time workers, temporary
workers and dispatched workers) of the Nissan
Chemical Group comply with laws and regulations,company rules, social norms, and ensure compliance.
In addition, by including information about theConsultation Hotline system and details about its
features in the Compliance Manual, we are raisingawareness about our internal reporting system.

Measures for Promoting Compliance (FY2019)
General ComplianceDirector and management level compliance training, new employee training

Anti-monopoly Act and Act
against Delay in Payment of
Subcontract Proceeds, Etc. to
Subcontractors

Training related to the Anti-monopoly Act and Act against Delay in Payment of
Subcontract Proceeds, Etc. to Subcontractors; Internal audit related to the Act against
Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors

Information Management

Information management training; Internal audit related to information management andMy Number Act related management

Insider Trading Regulation

Training for insider trading prevention

Anti-bribery

Training for the prevention of corruption and Combating Bribery of Foreign Public Officials

Security Export Control

Foreign Exchange Law related training

Consultation Hotline

Continuous dissemination of related information via the in-house newsletter and posters

OthersTraining for newly-appointed board members, training for board members, contract related
training (Head Office and plants), and training related to legal and civil code revisions

Nissan Chemical Corporation Integrated Report 2020

60

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Human Rights/Anti-Corruption
Initiatives
We joined the United Nations Global Compact (UNGC)
in April 2018. In order to clarify our stance which
supports the 10 principles advocated by UNGC in four
fields in human rights, labor, the environment and anticorruption, we formulated human rights policy andanti-corruption policy in 2019 to continue to make efforts
aimed at all our stakeholders, including our employees.

Human Rights Due Diligence Initiatives
As it conducts business activities, a company may
affect the human rights of various people who are its
stakeholders. Therefore, the Guiding Principles on
Business and Human Rights established by the United
Nations indicates that companies have a responsibility
to respect human rights. In addition, in order to realize
respect for human rights, companies are asked tomake a commitment to respecting human rights
through policies and to implement human rights due
diligence.
Human rights due diligence is a continuous effort toidentify and evaluate the negative impact of corporate
activities on human rights (equivalent to human rights
risks) and take measures to prevent or mitigate it.
As part of our human rights due diligence efforts, wehave begun to identify and evaluate risks that may havea negative impact on human rights through ourbusiness activities, targeting major businesses and theirvalue chains.
In FY2020, we will identify human rights issues that
we should place front and center, and consider how todeal with them.

Human Rights Due Diligence Initiatives
Identify and evaluate human rights
risks for the entire business

Identify issues to be prioritizedHolding of dialogues
with external experts
and stakeholders
Detailed survey(conducted as necessary)

Examination and implementationof countermeasures

61

Nissan Chemical Corporation Integrated Report 2020

Nissan Chemical Group Human Rights
Policy (Excerpt)
Respect for Human Rights
No Infringement of Human Rights
3 Employment and Labor
Prohibition of Forced Labor and Child Labor,
Good Labor-Management Relations, Fair andEquitable Remuneration, and Elimination ofDiscrimination
4 Remediation
1
2

In the event that the Nissan Chemical Group
causes or contributes to an adverse impact onhuman rights in the course of its businessactivities, it shall make efforts to remedy andcorrect such impact through appropriate means.

Nissan Chemical Group Anti-Corruption
Policy (Excerpt)
Definitions“Corruption” means the abuse of entrusted
official authority for personal or company
gain, including bribery.
“Bribery” means that, when company conducts
its businesses,
any of its officers or employees provides
improper benefits to a third party for the
purpose of inducing a third party to
conduct fraudulent or illegal acts, orupon request from a third party, orany of its officers or employeesdemands or receives improper benefits
from a third party.
2 Commitment to Anti-Corruption
3 C ompliance with respect to Anti-Corruption“Unfair Competition Prevention Act”, the “U.S.
Foreign Corrupt Practices Act” and the“Anti-Unfair Competition Law of the People's
Republic of China”
4 Remediation
1

In the event that the Nissan Chemical Groupviolates this Policy in the course of its businessactivities, it shall make efforts to remedy andcorrect the said violation through appropriate
means and fully cooperate with investigations
by the relevant authorities.

Risk Management
We are promoting risk management inaccordance with the following action guidelines,
with the aim of recognizing the various risks
involved in the Nissan Chemical Group, preventing
the occurrence of loss risk and minimizing theimpact of their occurrence.

Risk Management Basic Policy
1. We place top priority on the safety of
the lives of officers and employees of
the Nissan Chemical Group.
2. We consider risk management as animportant management issue, andengage in the activities from acompany-wide perspective.
3. All officers and employees of the Groupshall be sufficiently aware of risk
management, strive to improve theirabilities, and endeavor to prevent theoccurrence of loss risk.
4. We promptly share the information onrisk throughout the Group.
5. We make efforts to respond promptly
and accurately to the occurrence ofloss risk and to minimize losses.

SystemThe Risk Management & Compliance Office under
the Corporate Planning Department has been
established as a specialized organization to promote
continuous improvement in all of our risk management
activities.
In addition, the Risk Management & Compliance
Committee, which is held twice a year, has been
established as an organization to enhance theeffectiveness of risk management, and to maintain andpromote compliance.
The committee is chaired by the Chief Risk
Management Officer (CRO), who is appointed by the
Board of Directors, and is composed of the Risk &Compliance Managers, who are heads of each division/
department, plant/laboratory, and domestic consolidated
subsidiary. The Risk & Compliance Managers aredesignated by the CRO.
The Risk & Compliance Managers periodicallyconduct risk identification and assessment, formulate
countermeasure plans, conduct self-assessment for

status of implementation of the countermeasure planand subject, formulate improvement plan, and regularly
perform education and training at each division/
department, plant/laboratory and domestic
consolidated subsidiary.
The important matters related to risk management andcountermeasure plans, etc. are approved at the Board of
Directors meeting after discussion by the committee.

Process for Identifying Group Major Risks
We clarified risks taking into account the businesscharacteristics of each division and the surrounding
businesses, including global political, economic andsocial conditions. Subsequently, risk assessment was
conducted from the viewpoint of probability and impact
on the business. By following the assessment, a risk
map was created and Group Major Risks wereidentified. The contents of major risks were deliberated
by the Risk Management & Compliance committee andapproved at the Board of Directors meeting.
Risk Assessment Implementation (risk identificationand evaluation) Overview
Creation of risk list
(tentative) andrisk-related
questionnaire

Implementationof survey

Aggregation/
Analysis of survey
results

Executive interview

Creation of overall
Group risk map■ Create risk list (tentative) after identifying

potential risks faced by the Nissan ChemicalGroup■ Create risk-related questionnaire based on thelist created■ Conduct risk-related survey targeting risk

compliance staff at each department, location,
domestic consolidated subsidiary, and affiliate■ Aggregate the survey results and assess theGroup's risks based on degree of impact andprobability of occurrence■ Have an interview with each executive about

their views on the Group's risks from amanagement perspective■ Create an overall Group risk map based on the

results of executive interviews■ Select Group Major Risks based on the risk

Identification ofGroup Major Risks

map and current conditions of the Group■ Deliberate regarding Group Major Risks at the

Risk Management & Compliance Committee andapprove them at the Board of Directors meeting

Nissan Chemical Corporation Integrated Report 2020

62

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Group Major Risks and Countermeasures Overview
Group Major Risk

Summary of Risk

Delay or Discontinuance ofProduct and Technology
Development

Risk of the failure of payback of invested capital to
R&D due to being unable to launch the productunder development

Manage go/stop about researchtargets based on periodic evaluation

Advent of Innovative
Technology

Risk of the losing competitive power due to adventof innovative technology with low cost

Set research targets based on the latest
technology information

Failure of the Business
Portfolio Strategy

Risk of decline in business performance due to thefailure of the business portfolio strategy

Minimize risk by improving risk
assumptions when formulating strategies

Difficulty in Procurement ofSpecific Raw Material

Risk of being unable to supply the product tocustomer due to the discontinuance of specific raw
material

Confirm procurement situation,
discover issues and implement
countermeasure for stable procurement

Revision or Strengtheningof Law or Regulation

Risk of unwilling discontinuance of sales of product,
or unwilling change in business or capital investment
plan due to revision/strengthening of law or regulation

Enumerate related laws and regulations
and establish an infrastructure forobtaining law revision information

Typhoon/Torrential Rain

Risk of increasing expenses to plant restoration anddecreasing production volume due to direct
onslaught on main plant by large-scale typhoon

Earthquake/Tsunami

Risk of suspension of business activities and the deathor injury of many employees due to catastrophic
earthquake occurring at the location of business site

Fire/Explosion

Risk of suspension of business activities and thedeath or injury of many employees, and being suedby neighborhood resident for the damage by fire/
explosion at plant

Revise “No Fires, Explosions, or
Chemical spills” measure

Quality Defect/Recall

Risk of reimbursement for large expenses by customer
and discontinuance of transactions when a productliability related accident occurs involving a productcontaining materials provided by our company

Continue to implement “no recalls andno falsification cases” measure

Infringing or Being Infringedof Intellectual Property
RightsRisk of being subjected to a large amount ofdamages and product injunction claims from othercompany due to infringement on other company’s
patentCreate an IP verification process to
reduce the risk of infringing of othercompany's patent

Cyber Attack

Risk of shut-down of operations for a long period oftime, and losing credibility of customer and society
because of leak of customer’s or the Company’s
confidential information by cyber attack

Examine and implement
countermeasures from the perspectivesof prevention, damage minimization,and education

Delay in Human Resource
Development

Risk of personnel shortage which occurs in eachdivision due to delay in the human resource
development

Establish an ideal model of manager aswell as a training system

Insufficient Governance ofOverseas Subsidiary and
OfficeRisk of losing credibility due to detection of fraud atoverseas subsidiary and office caused by inadequate
control

Formulate Group policy on company
regulations and share Groupphilosophy and policies

63

Nissan Chemical Corporation Integrated Report 2020

Revise/improve the countermeasuresthat make early recovery and business
continuity possible

https://www.nissanchem.co.jp/eng/csr_info/risk_management/policy.html▼

Group Major Risks and Countermeasures Overview

Countermeasures against risk

for environmental consideration, we assume that weare able to expand business opportunities in theEnvironment & Energy field, which is one of the main
business domains of the long-term business plan
Progress2030 launched in 2016.
We believe more benefit from increasing demand for
initiatives to address climate change from investors andother stakeholders because our low-carbon investment
and product characteristics have made us morecarbon-efficient compared to whole chemical industry.
Meanwhile, we will respond to the risks of impacts
on plant operations and supply chains due to increasein abnormal weather, which was identified in the 4°C
scenario, by formulating and revising BCP (BusinessContinuity Plan) for our main products and by multiple
sourcing of several key raw materials, etc. In regards tomarket changes caused by rising temperature andabnormal weather, we see opportunities in such as
agrochemicals and disinfectants for drinking water due
to water shortages and infection diseases.

Adaptation to Climate Change Risk
As climate change becomes more serious, investors
and other stakeholders are becoming more interested
in the impact of climate change on business activities.
Following the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD)
established by the Financial Stability Board, we
conducted scenario analysis based on 2°C and 4°C
scenarios.

Scenario Analysis Results (climate changerisks/opportunities)
As a result of scenario analysis, we identified theintroduction of carbon pricing as a significant risk inthe 2°C scenario. So we plan to introduce internalcarbon pricing to further promote investment that takes
into account the reduction of greenhouse gas
emissions (low-carbon investment). In addition, in
response to market change due to increasing demand

Scenario Analysis Results (climate change risks/opportunities)
Scenario

Factors

Social Change● Strengthening Regulations on● Introduction of carbon

GHG Emissions● Changes in energy policy● Changes in energy demandand supply

2°C
Scenario● Market changes due toincreasing demand forenvironmental consideration● Increased demand frominvestors for addressing climatechangepricing

Relevant
Division*

Impact on business● Increase in operating costs due to introduction of

All

Risk

All

Risk

● Price change in fueland feedstock● Change in

low-carbon products

carbon pricing, such as carbon taxes. (If the same
conditions meet worldwide, maintaining
competitiveness is possible.)(Large)● Increase in costs due to higher fuel and feedstock

prices● Increase in transportation costs

transportation costs● Increased need for

Degree of
Impact(Moderate)● Increase in demands for products related to electric

Planning

Opportunity

All

Risk
Opportunity

energy such as battery materials and photoelectric
conversion materials due to changes in energy
policies.

(Moderate)● Deterioration of ESG evaluation and reputation due● Expansion of ESG

investment

to increasing criticism of bulk use of fossil fuels● Improvement of ESG evaluation and reputation

through advanced initiatives and information
disclosure(Moderate)● Increase in frequency

and enhanced intensityof heavy rain/flooding● Increase in abnormal weather● Enhancement ofintensity andfrequency of typhoons(Moderate)
All

Risk

● Increase in risk of impacts on plant operations andsupply chains due to escalation of natural disasters● Heavy snowfall● Decline in theavailable water(freshwater) resources

4°C
Scenario(Moderate)(Moderate)

Chem

Opportunity● Increase in sales of disinfectants due to increase inglobal demand for drinking water(Moderate)● Reduction of planted area due to increase in● Reduction of planted● Market changes caused byrising temperature andabnormal weather

Risk

area

Agri
● Increase in pests,

weeds, andpathogens● Increase in mass

infection and diseases

Opportunity

frequency and enhanced intensity of heavy rain/
flooding● Reduction of planted area due to difficulties insecuring irrigation water● Increase in opportunity to develop new agrochemicals● Influence on sales of existing agrochemicals due toresistance expression

Planning

Opportunity(Moderate)(Moderate)● Increase in demand for related products andservices due to growing medical needs for tropicalinfections and diseases(Moderate)*All: All divisions (Chemicals, Performance Materials, Agricultural Chemicals, Pharmaceuticals, and Planning and Development Division)
Planning: Planning and Development Division Chem: Chemicals Division Agri: Agricultural Chemicals Division

Nissan Chemical Corporation Integrated Report 2020

64

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Financial Review
Long Term Financial Performance Trend
2009

2010

2011

2012

2013

Sales

149.0

154.2

148.6

153.8

163.7

Operating Profit

19.2

19.8

15.5

19.5

22.2

Ordinary Income

19.2

19.4

15.9

20.5

23.7

Net Income

12.8

13.0

11.0

13.9

16.7

EBITDA

30.1

30.2

25.9

29.0

30.8

Operating Margin

12.8%

12.9%

10.4%

12.7%

13.6%

ROE

12.6%

11.9%

9.5%

11.4%

12.7%

EPS (¥/share)

74.00

75.94

64.52

83.74

102.11

24

24

24

26

30

32.4%

31.6%

37.2%

31.0%

29.4%

–

2.8

–

5.0

5.0

Total Assets

181.4

183.4

190.1

199.2

208.0

Net Assets

107.7

112.4

119.6

126.7

137.8

Cash

14.8

21.1

27.9

31.9

30.8

Liabilities with Interest

42.1

39.9

38.9

38.1

36.1

58.7%

60.7%

62.4%

63.0%

65.7%

Capex

10.1

9.6

8.3

8.1

8.8

Depreciation

11.0

10.4

10.5

9.5

8.5

R&D Expenses

13.1

12.6

13.6

13.7

14.2

R&D Expenses/Sales

8.8%

8.2%

9.2%

8.9%

8.7%

Dividend (¥/share)
Dividend Payout Ratio
Share Repurchase

Equity Ratio

65(From FY2009 to FY2019)

Nissan Chemical Corporation Integrated Report 2020

(Billions of yen)
2014

2015

2016

2017

2018

2019

171.2

176.9

180.3

193.4

204.9

206.8

25.3

28.6

31.4

35.0

37.1

38.6

26.4

29.5

31.7

36.2

39.1

40.0

18.2

22.4

24.0

27.1

29.4

30.8

33.8

38.3

40.3

45.5

48.0

49.2

14.8%

16.2%

17.4%

18.1%

18.1%

18.7%

12.7%

14.6%

15.1%

16.1%

16.6%

16.9%

113.99143.37156.97180.30197.67210.09

36

44

52

68

82

90

31.6%

30.7%

33.1%

37.7%

41.5%

42.8%

6.0

9.0

9.0

9.0

9.0

10.0

223.9

228.2

231.7

246.0

247.0

249.5

151.3

156.9

163.7

176.4

182.1

185.5

31.3

35.3

35.7

37.7

36.2

30.6

35.1

33.1

30.8

28.6

26.6

24.6

66.9%

68.1%

69.9%

71.0%

73.0%

73.7%

9.8

10.2

14.3

13.7

9.9

15.7

8.5

9.7

8.9

10.5

10.9

10.5

15.0

15.8

16.1

17.2

17.8

17.2

8.7%

8.9%

8.9%

8.9%

8.7%

8.3%

Nissan Chemical Corporation Integrated Report 2020

66

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Financial Review of the Year Ended March 31, 2020
Overview

Operating Results

The domestic economy continued to recovermoderately in the current fiscal year (April 1, 2019 toMarch 31, 2020) against the backdrop of an
improvement in the employment and income
environment. However, in addition to the sluggish
exports caused by the slowdown in the overseas
economy, economic activity worldwide stagnated in thesecond half of the fiscal year due to the impacts of
COVID-19. Under these circumstance, sales of Basic
Chemicals decreased in the Chemicals Division. In the
Performance Materials Division, Display Materials andSemiconductor Materials performed well. The
Agricultural Chemicals Division sales strongly increased.
In the Pharmaceuticals Division, although sales ofcontracting business increased, sales of in-house drug
discovery decreased.

As a result, the Company’s results for the current
fiscal year were net sales 206,837 million yen (anincrease of 1,941 million yen), operating income 38,647
million yen (an increase of 1,556 million yen) andordinary income 40,003 million yen (an increase of 905
million yen), and net income attributable to owners ofparent 30,779 million yen (an increase of 1,407 millionyen). Operating and ordinary income achieved record
highs for the sixth consecutive year and net income
attributable to owners of parent for the seventh
consecutive year, exceeding the earnings outlook
announced in November.
ROE was 16.9% and we have achieved Vista2021
Stage II target (maintain above 16%) in the current
fiscal year.
Dividend was 90 yen and dividend payout ratio
became 42.8%. We have repurchased share of 10.0
billion yen and total payout ratio was 75.1%.

Operating Income (Millions of Yen)

40,00037,09138,647250

31,438

Total Assets (Millions of Yen)

250,000

34,98835,00030,000Net Income per Share (Yen)

249,522

246,990

228,169

210.09197.67200

246,040
231,748

200,000

180.3028,606156.9725,000150

143.37150,000

20,00015,000100

100,000

50

50,00010,0005,000
0672015 2016 2017 2018 2019 (FY)

Nissan Chemical Corporation Integrated Report 202002015 2016 2017 2018 2019 (FY)02015 2016 2017 2018 2019 (FY)Financial Position

Position of Cash Flow

Total assets as of March 31, 2020 were 249,522
million yen (an increase of 2,531 million yen from theprevious year). It is mainly due to the increase of notes
and accounts receivable-trade, merchandise andfinished goods, and intangible assets.
Total liabilities as of March 31, 2020 were 63,993
million yen (a decrease of 922 million yen). It is mainly
due to the decrease of loans payable.
Net assets as of March 31, 2020 were 185,528
million yen (an increase of 3,454 million yen).
As a result of these factors, equity ratio was 73.7%(an increase of 0.7% from March 31, 2019).

Deducting income taxes paid from income before
income taxes and non-controlling interests,
depreciation and gain and loss in working capital, net
cash provided by operating activities for the
consolidated fiscal year ended March 31, 2020 was
35,550 million yen (32,070 million yen for the previousyear).
Due to investment on plant and equipment, net cashused in investing activities for the consolidated fiscal
year ended March 31, 2020 was 15,624 million yen(10,884 million yen for the previous year).
Due to share repurchase, payment for dividends andof long-term loans payable, net cash used in financing
activities for the consolidated fiscal year ended March
31, 2020 was 25,186 million yen (22,563 million yen forthe previous year).
As a result of these factors, cash and cash
equivalents for the consolidated fiscal year ended
March 31, 2020 were 30,639 million yen (36,183 million
yen for the previous year), reflecting exchange of 283
million yen. It decreased by 5,544 million yen comparedto the previous year.

Equity Ratio and ROE
(%)
80
70

68.1

69.9

71.0

73.0

Dividend per Share (Yen)

90

90

73.7

80

15,70915,00014,29968

70

13,694

12,500
60

50

52
50

40
30

10,00044

40

10,510

10,245
9,684
8,889

10,913
9,938

10,516

7,500

30
14.6

15.1

16.1

16.6

5,000

16.9

20

10
0

17,5008260

20Capex and Depreciation (Millions of yen)

2,500

10

2015 2016 2017 2018 2019

Equity ratio

ROE

(FY)

0

2015 2016 2017 2018 2019 (FY)02015 2016 2017 2018 2019
Capex

(FY)

Depreciation

Nissan Chemical Corporation Integrated Report 2020

68

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Overview by Segments
The Chemicals Division

The Performance Materials Division

In Basic Chemicals, although sales of high purity
sulfuric acid (agent used for cleaning semiconductor)
increased, sales of melamine (adhesives agent forparticle board) declined due to market conditions. In
the Fine Chemicals, sales of TEPIC® for electronicmaterials (solder resist inks, LED-sealing materials, etc.)
decreased, while sales for general use (powder coating
agent for paint) increased.
As a result, sales of this division were 34,336 million
yen (a decrease of 1,314 million yen) and operating
income was 1,372 million yen (a decrease 1,674 millionyen). Compared to the outlook, net sales were below
3.0 billion yen and operating income was below 2.0
billion yen.
As outlook of business result for the next term, we
assume net sales will be 35.6 billion yen and operating
income will be 2.7 billion yen.

In the Display Materials, sales of SUNEVER®
(alignment material for liquid crystal display) for both
small-and medium-sized products such as
smartphones and large-scale products such as TVs
performed well. In the Semiconductor Materials, salesof anti-reflective coating for semiconductors (ARC®*)
increased, reflecting favorable operation by customers.
In the Inorganic Materials, sales of SNOWTEX® forpolishing electronic materials decreased. Sales ofOrgano / Monomer sol (various kinds of coating
materials, resin additive) and Oilfield materials (forenhancing oil recovery) also decreased.
As a result, sales of this division were 65,460 million
yen (an increase of 2,428 million yen) and operating
income was 17,353 million yen (an increase of 2,386
million yen). Compared to the outlook, net sales wereabove 2.0 billion yen and operating income was above
2.3 billion yen.
As outlook of business result for the next term, we
assume net sales will be 70.1 billion yen and operating
income will be 18.1 billion yen.
* ARC® is a registered trademark of Brewer Science, Inc.

Business Results and Outlook(billions of yen)(billions of yen)

50.0
40.0
30.0

43.1
34.8
3.8

20.0

34.9
3.4

35.7

34.3

35.6

5.1

2017

Sales (left axis)

5.0
4.0
2.0

2.7

1.0

1.4
2016

6.0

3.0

3.0

10.0
0

Business Results and Outlook

2018

2019

2020

(forecast)

2021

0

(target)Operating income (right axis)(billions of yen)(billions of yen)

80.0
60.0
40.0

52.8

58.8
14.2

63.0

65.5
17.4

70.1

75.1

18.1

17.3

15.0

16.0
12.0

12.5

8.0

20.0
0

20.0

4.0
2016

2017

Sales (left axis)

2018

2019

2020

(forecast)

2021

0

(target)Operating income (right axis)

Trading
Sales of this segment were 67,907 million yen (anincrease of 27 million yen), and operating income was2,113 million yen (an increase of 75 million yen).
Compared to the outlook, net sales were above 0.8

69

Nissan Chemical Corporation Integrated Report 2020

billion yen and operating income was the same.
As outlook of business result for the next term, we
assume net sales will be 68.2 billion yen and operating
income will be 2.0 billion yen.

The Agricultural Chemicals Division

The Pharmaceuticals Division

Sales of Fluralaner (active ingredients for veterinary
pharmaceuticals) decreased due to the impact of
inventories of customers. In domestic agrochemicals
market, sales of GRACIA® (insecticide) launched in May
in Japan were strong. ROUNDUP® (non-selective leaf
treatment herbicide) revenues increased from theprevious year due to natural disasters in the first half ofthe previous fiscal year, and remained steady in thesecond half of this fiscal year. In overseas
agrochemicals market, sales of TARGA® (herbicide)decreased, but sales of GRACIA® for the Koreanmarket and Quintec® (fungicide) acquired in the third
quarter contributed to sales.
As a result, sales of this division were 64,038 million
yen (an increase of 1,313 million yen) and operating
income was 19,303 million yen (an increase of 952
million yen). Compared to the outlook, net sales were
below 0.3 billion yen and operating income was below
0.3 billion yen.
As outlook of business result for the next term, we
assume net sales will be 65.5 billion yen and operating
income will be 18.4 billion yen.

Sales of API of LIVALO® (anti-cholesterol drug)
decreased, as selling prices fell due to an increase insales of generic drugs outside Japan, despite anincrease in shipments in Japan. In contracting
business, sales of generic-APIs increased steadily.
As a result, sales of this division were 6,962 million
yen (a decrease of 46 million yen) and operating
income was 939 million yen (a decrease of 60 millionyen). Compared to the outlook, net sales were thesame and operating income was below 0.2 billion yen.
As outlook of business result for the next term, we
assume net sales will be 6.4 billion yen and operating
income will be 0.4 billion yen.

Business Results and Outlook

Business Results and Outlook(billions of yen)(billions of yen)

80.0
60.0
40.0

52.0

58.1
16.4

62.7

64.0

65.5

18.4

19.3

18.4

70.1
21.1

13.2

20.0
0

2016

2017

Sales (left axis)

2018

2019

2020

(forecast)2021(billions of yen)

25.0

10.0

20.0

8.0

15.0

6.0

10.0

4.0

5.0

2.0

0

0

(target)Operating income (right axis)(billions of yen)
2.0

8.0
1.7

7.5

7.0

7.0

6.4

7.5

1.2
1.0

1.5
1.0

0.9
0.7

0.5

0.4
2016

2017

Sales (left axis)

2018

2019

2020

(forecast)

2021

0

(target)Operating income (right axis)

OthersSales of this segment were 22,394 million yen (adecrease of 2,215 million yen) and operating income
was 693 million yen (a decrease of 229 million yen).

As outlook of business result for the next term, we
assume net sales will be 25.0 billion yen and operating
income will be 0.7 billion yen.

Nissan Chemical Corporation Integrated Report 2020

70

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Consolidated Balance Sheets

(For FY2019 and FY2018)(Thousands of
U.S. dollars)(Millions of Yen)

Assets

FY2019FY2018FY2019Current assets
Cash and deposits¥30,639¥36,183$281,531

Notes and accounts receivable - trade72,50969,193

666,259

Merchandise and finished goods

33,131

32,215

304,429

153

41

1,406

Raw materials and supplies

10,5909,742

97,308

Accounts receivable - other

2,765

2,207

25,407

Short-term loans receivable

2,045

512

18,791

Other

2,387

2,427

21,933Work in process

Allowance for doubtful accounts
Total current assets

(26)

(32)

(239)

154,196

152,490

1,416,852

67,11065,942

616,650(42,260)(40,690)(388,312)

Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation and impairment loss
Buildings and structures, net

24,85025,251

228,338

Machinery, equipment and vehicles

135,476

130,490

1,244,841(123,035)(117,523)(1,130,525)

12,44012,966

114,30739,62538,458364,100(35,829)(34,385)(329,220)

Accumulated depreciation and impairment loss
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation and impairment loss
Tools, furniture and fixtures, net

3,796

4,073

34,880

Land

8,995

9,059

82,652

Construction in progress

1,499

1,378

13,774

Total property, plant and equipment

51,581

52,729473,959

566

721

5,201

Intangible assets
Software
Other

6,812

796

62,593

Total intangible assets

7,379

1,517

67,803

Investment securities

30,87335,229283,681Deferred tax assets

721

110

6,625

Net defined benefit asset

1,609

2,089

14,785

Other

Investments and other assets

3,244

2,917

29,808

Allowance for doubtful accounts

(84)

(92)

(772)

Total investments and other assets

36,36440,253

334,136

Total non-current assets
Total assets

71

Nissan Chemical Corporation Integrated Report 2020

95,32594,500875,907¥249,522¥246,990$2,292,769

(Thousands of
U.S. dollars)(Millions of Yen)

Liabilities

FY2019FY2018FY2019Current liabilities
Notes and accounts payable - trade¥16,876¥17,809$155,068

Short-term loans payable

22,89823,605

210,402

Current portion of long-term loans payable

640

1,860

5,881

Income taxes payable

6,167

4,330

56,666

Provision for bonuses

2,151

2,137

19,765

26

25

239

Other

11,254

10,430103,409

Total current liabilities

60,01560,198551,456

1,076

1,116

9,887

Deferred tax liabilities

76

823

698

Provision for business structure improvement

284

370

2,610

Provision for loss on business of subsidiaries and affiliates

309

309

2,839

Provision for share-based remuneration for directors(and other officers)

46

-

423

Net defined benefit liability

208

152

1,911

Other

1,976

1,945

18,157

Total non-current liabilities

3,978

4,717

36,552¥63,993¥64,916$588,009

Capital stock¥18,942¥18,942$174,051

Provision for directors' bonuses

Non-current liabilities
Long-term loans payable

Total liabilities

Net assets
Shareholders' equity
Capital surplus

13,613

13,613125,085

Retained earnings

146,997

143,200

1,350,703

Treasury shares(2,470)(6,291)(22,696)

Total shareholders' equity

177,082

169,464

1,627,143

Valuation difference on available-for-sale securities

7,782

10,63471,506

Foreign currency translation adjustment

(896)

(11)

(8,233)

Accumulated other comprehensive income

Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

(51)

258

(469)

6,834

10,88062,795

1,610

1,728

14,794

185,528

182,074

1,704,751¥249,522¥246,990$2,292,769

Nissan Chemical Corporation Integrated Report 2020

72

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Consolidated Statements of Income(For FY2019 and FY2018)(Thousands of
U.S. dollars)(Millions of Yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on disposal of non-current assets
Plant stop losses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Licensing arrangement fee
Total extraordinary losses
Income before income taxes and non-controlling interests
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent

FY2019FY2018FY2019¥206,837
122,379
84,45845,81038,647¥204,896
119,91184,98547,89337,091$1,900,551
1,124,497
776,054
420,932
355,113

26
785
945
852
2,609

31
981
970
1,142
3,126

239
7,213
8,683
7,829
23,973

123
443
298
235
151
1,252
40,003

110
630
249
24
104
1,119
39,098

1,130
4,071
2,738
2,159
1,387
11,504
367,573

1,834
1,834

-

16,852
16,852834
834
41,003
10,102
36
10,13830,864
84¥30,779

39,098
8,690
893
9,583
29,514
141¥29,372

7,663
7,663
376,762
92,824331
93,154
283,598
772$282,817

Consolidated Statements of Comprehensive Income(For FY2019 and FY2018)(Thousands of
U.S. dollars)(Millions of Yen)

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)
Owners of parent
Non-controlling interests

73

Nissan Chemical Corporation Integrated Report 2020

FY2019FY2018FY2019¥30,864¥29,514$283,598(2,851)
(976)
(309)

(3,018)
(159)
(132)

(26,197)(8,968)(2,839)

(0)

(0)

(0)

(4,137)
26,726(3,311)
26,203(38,013)245,576

26,733(¥6)

26,083¥119245,640($55)

Consolidated Statements of Changes in Net Assets

(For FY2019)(Millions of Yen)

Total shareholders’ equity
Capitalstock
Balance at beginning of current period

Capitalsurplus¥18,942

Retainedearnings¥13,613

Treasuryshares¥143,200

Total shareholders’equity(¥6,291)¥169,464

Changes of items during period
Dividends of surplus(12,360)(12,360)

Net income attributable to ownersof parent

30,77930,779

Share repurchase
Disposal of treasury shares
Cancellation of treasury shares(10,801)(10,801)

(0)

0

0

(14,622)

14,622–

Net changes of items other thanshareholders' equity
Total changes of items during period
Balance at end of current period

–
–

–

3,797

3,821

7,618

¥18,942¥13,613¥146,997(¥2,470)¥177,082

Accumulated other comprehensive income(Millions of Yen)

Total accumulated
Valuationother
difference on Foreign currency Remeasurements
Nonof defined benefit comprehensive controllingtranslation
available-for-sale
Total
incomeplans
adjustment
securities
interests net assets
Balance at beginning of current period¥10,634

(¥11)

¥258

¥10,880¥1,728¥182,074

Changes of items during period
Dividends of surplus(12,360)

Net income attributable to owners of parent

30,779

Share repurchase(10,801)

Disposal of treasury shares

0Cancellation of treasury shares–

Net changes of items other thanshareholders' equity(2,851)

(884)

(309)

(4,046)(117)(4,164)

Total changes of items during period(2,851)

(884)

(309)

(4,046)

(117)

3,454

Balance at end of current period¥7,782(¥896)(¥51)¥6,834¥1,610¥185,528

Nissan Chemical Corporation Integrated Report 2020

74

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Consolidated Statements of Changes in Net Assets

(For FY2018)(Millions of yen)

Total shareholders’ equity
Capital stock Capital surplus
Balance at beginning of current period¥18,942¥13,613Retainedearnings

Treasury Total shareholders’sharesequity¥133,822(¥5,962)¥160,416

Changes of items during period
Dividends of surplus(11,320)(11,320)

Net income attributable to owners of parent

29,372

29,372

Share repurchase
Cancellation of treasury shares(8,674)(9,004)(9,004)

8,674–

Net changes of items other thanshareholders’ equity
Total changes of items during period
Balance at end of current period

–
–

–

9,377

(329)

9,048

¥18,942¥13,613¥143,200(¥6,291)¥169,464

Accumulated other comprehensive income(Millions of yen)

Total accumulated
Valuationother
difference on Foreign currency Remeasurements
Nonof defined benefit comprehensive controllingtranslation
available-for-saleincomeplans
adjustment
securities
interests
Balance at beginning of current period¥13,653

¥125

¥390

¥14,170¥1,778Total
net assets¥176,364

Changes of items during period
Dividends of surplus(11,320)

Net income attributable to owners of parent

29,372

Share repurchase(9,004)

Cancellation of treasury shares75–

Net changes of items other thanshareholders’ equity(3,019)

(137)

(132)

(3,289)(49)(3,338)

Total changes of items during period(3,019)

(137)

(132)

(3,289)

(49)

5,709

Balance at end of current period¥10,634

(¥11)

¥258

¥10,880¥1,728¥182,074

Nissan Chemical Corporation Integrated Report 2020

Consolidated Statements of Changes in Net Assets

(For FY2019)(Thousands of U.S. dollars)

Total shareholders’ equity

Balance at beginning of current period

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotal shareholders’equity$174,051$125,085$1,315,814($57,806)$1,557,144

Changes of items during period
Dividends of surplus(113,572)(113,572)

Net income attributable to owners of parent

282,817282,817

Share repurchase(99,247)(99,247)

(0)

0

0

(134,356)

134,356–

Disposal of treasury shares
Cancellation of treasury shares
Net changes of items other thanshareholders’ equity
Total changes of items during period
Balance at end of current period–––

34,88935,11069,999$174,051$125,085$1,350,703($22,696)$1,627,143

Accumulated other comprehensive income(Thousands of U.S. dollars)

Total accumulated
Valuationother
difference on Foreign currency Remeasurements
Nonavailable-for-sale translation of defined benefit comprehensive controllingincomeplans
adjustment
securities
interests
Balance at beginning of current period$97,712($101)$2,371$99,972$15,878

Total
net assets$1,673,013

Changes of items during period
Dividends of surplus(113,572)

Net income attributable to owners of parent

282,817

Share repurchase(99,247)

Disposal of treasury shares

0Cancellation of treasury shares–

Net changes of items other thanshareholders’ equity(26,197)(8,123)(2,839)(37,177)(1,075)(38,262)

Total changes of items during period(26,197)(8,123)(2,839)(37,177)(1,075)31,738

Balance at end of current period$71,506($8,233)($469)$62,795$14,794$1,704,751

Nissan Chemical Corporation Integrated Report 202076

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Consolidated Statements of Changes in Net Assets

(For FY2018)(Thousands of U.S. dollars)

Total shareholders’ equity
Capital stock Capital surplus
Balance at beginning of current period$170,633$122,629

Retainedearnings

TreasurysharesTotal shareholders’equity$1,205,495($53,707)$1,445,059

Changes of items during period
Dividends of surplus(101,973)(101,973)

Net income attributable to owners of parent

264,589

264,589

Share repurchase
Cancellation of treasury shares(78,137)(81,110)(81,110)

78,137–

Net changes of items other thanshareholders’ equity–––

84,470(2,964)81,506$170,633$122,629$1,289,974($56,671)$1,526,565

Total changes of items during period
Balance at end of current period

Accumulated other comprehensive income

Balance at beginning of current period(Thousands of U.S. dollars)

Total accumulated
Valuationother
difference on Foreign currency Remeasurements
Nonavailable-for-sale translation of defined benefit comprehensive controllingincomeplans
adjustment
securities
interests

Total
net assets$122,989$1,588,722$1,126$3,513$127,646$16,017

Changes of items during period
Dividends of surplus(101,973)

Net income attributable to owners of parent

264,589

Share repurchase(81,110)Cancellation of treasury shares77–

Net changes of items other thanshareholders’ equity(27,196)(1,234)(1,189)(29,628)(441)(30,069)

Total changes of items during period(27,196)(1,234)(1,189)(29,628)(441)

51,428

Balance at end of current period$95,793($99)$2,324$98,009$15,566$1,640,159

Nissan Chemical Corporation Integrated Report 2020

Consolidated Statements of Cash Flows(For FY2019 and FY2018)(Millions of Yen)

Cash flows from operating activities
Income before income taxes and non-controlling interests
Depreciation and amortization
Amortization of goodwill
Interest and dividend income
Loss (gain) on sales of investment securities
Interest expenses
Loss (gain) on disposal of non-current assets
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of property, plant and equipment
Payments for retirement of property, plant and equipment
Purchase of intangible assets
Payments for transfer of businessNet decrease (increase) in short-term loans receivable
Purchase of long-term prepaid expenses
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Cash dividends paid
Dividends paid to non-controlling interests
Share repurchase
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period(Thousands of
U.S. dollars)

FY2019FY2018FY2019¥41,003
10,51628(811)(1,834)123443(3,656)(2,352)(715)(263)
42,481
1,565(123)(8,373)35,550¥39,098
10,915(1,013)
(296)
110
630
(3,877)(4,304)(671)(617)
39,974
1,633(111)(9,426)32,070$376,762
96,628257(7,452)(16,852)
1,130
4,071
(33,594)(21,612)(6,570)(2,417)
390,343
14,380(1,130)(76,937)
326,656

(657)
3,206
(8,904)(391)(285)(6,335)(1,538)(645)(73)(15,624)(910)
450(9,747)
(525)
(192)
(2)
(46)
90
(10,884)(6,037)29,459(81,816)(3,593)(2,619)(58,210)(14,132)(5,927)(671)(143,563)

(653)
600
(1,860)(12,360)(111)(10,801)
0(25,186)(283)(5,544)36,183¥30,639(46)
530(2,554)(11,320)(167)(9,004)(0)(22,563)(141)(1,518)37,702¥36,183(6,000)5,513(17,091)(113,572)(1,020)(99,247)
0(231,425)(2,600)(50,942)
332,473$281,531(Note 1) The consolidated financial statements are a translation of the Japanese annual securities report’s consolidated
financial statements.
(Note 2) The consolidated financial statements are expressed in Japanese yen as of and for the year ended March 31, 2020
after being converted from the currency of the country in which the Company operates. The translation of Japanese
yen amounts to United States dollar amounts is included solely for the convenience of the readers outside Japan,
and has been made at the rate of ¥108.83 to US $1, which is the approximate closing exchange rate reported by the
Tokyo Foreign Exchange Market on March 31, 2020. This translation should not be construed to indicate that theJapanese yen amounts shown can be converted to United States dollars at the above rate.

Nissan Chemical Corporation Integrated Report 2020

78

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Corporate Information
Domestic Bases
Nagoya Plant

Toyama Plant

This plant faces the Port of Nagoya.
Here we manufacture sulfuric acid andhigh-quality urea aqueous solution,
among other products.

This plant is located in the center of Toyama Plain.
Here we manufacture various groups of products,
such as basic chemicals, environmental
chemicals, and performance materials.

Onoda Plant
This plant is located in Sanyo-Onoda
City, Yamaguchi. It is our base for the
production of fine organic synthetic
compounds, such as agrochemicals
and pharmaceuticals.

79

Nissan Chemical Corporation Integrated Report 2020

Saitama Plant

Sodegaura Plant

This plant is located in northern
Saitama. Here we manufacture
agricultural formulations.

These plants are located in the industrial
area in Sodegaura and Ichihara City,
Chiba. These are our bases for the
production of performance materials.

List of Offices, Plants and Laboratories
OfficesHead Office
5-1, Nihonbashi 2-Chome, Chuo-ku, Tokyo 103-6119
Tel: +81-3-4463-8111

Sendai Sales Office
Greenwood Sendai Ichibancho Building 2-7-12, Ichibancho, Aoba-ku,
Sendai 980-0811
Tel: +81-22-266-4311

Osaka Sales Office
Kintetsu Dojima Building 2-2-2, Dojima, Kita-ku, Osaka 530-0003
Tel: +81-6-6346-7200

Sapporo Sales Office
Maruito Sapporo Building 1-1, Kita-Nijyo-Nishi, Chuo-ku,
Sapporo 060-0002
Tel: +81-11-251-0264

Nagoya Sales Office
Nagoya KS Building 3-1-18, Taiko, Nakamura-ku,
Nagoya 453-0801
Tel: +81-52-452-8623

Fukuoka Sales Office
JPR Hakata Building 1-4-4, Hakata Ekimae, Hakata-ku,
Fukuoka 812-0011
Tel: +81-92-432-3421

Hiroshima Office
Dai-ichi Uenoya Building,8-8 Kamihatchobori, Naka-ku, Hiroshima 730-0012

PlantsSodegaura Plant
11-1, Kitasode, Sodegaura, Chiba 299-0266
Tel: +81-438-63-2341

Saitama Plant
235-1, Aza Nishidai, Oaza Jimbohara-machi, Kamisato-machi,
Kodama-gun, Saitama 369-0305
Tel: +81-495-34-2810

Nagoya Plant
7, Tsukiji-cho, Minato-ku, Nagoya 455-0045
Tel: +81-52-661-1676

Sodegaura Plant Goi Works
12-17, Goiminamikaigan, Ichihara, Chiba 290-0045
Tel: +81-436-22-2110

Toyama Plant
635, Sasakura, Fuchu-machi, Toyama 939-2792
Tel: +81-76-433-9602

Onoda Plant
6903-1, Oaza Onoda, Sanyo-Onoda, Yamaguchi 756-0093
Tel: +81-836-83-2800

Laboratories
Chemical Research Laboratories
10-1, Tsuboi-Nishi 2-chome, Funabashi, Chiba 274-8507
Tel: +81-47-465-1112
Biological Research Laboratories
1470, Shiraoka, Shiraoka, Saitama 349-0294
Tel: +81-480-92-2513

Materials Research Laboratories
488-6, Suzumi-cho, Funabashi, Chiba 274-0052
Tel: +81-47-419-3810
11-1, Kitasode, Sodegaura, Chiba 299-0266
Tel: +81-438-64-2881
635, Sasakura, Fuchu-machi, Toyama 939-2792
Tel: +81-76-465-7133

Group Companies
Japan
Nissei Corporation
1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: +81-3-3241-2548■ Sales of chemical products and insurance, and real estate businessNissan Green & Landscape Co., Ltd.
3-16-9, Uchikanda, Chiyoda-ku, Tokyo 101-0047
Tel: +81-3-3256-4031■ Landscaping and civil engineering

Nihon Hiryo Co., Ltd.
559-3, Tozaki, Okanogo, Fujioka, Gumma 375-0011
Tel: +81-274-42-1247■ Production and sales of fertilizers and agrochemicals

Sun Agro Co., Ltd.
1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: +81-3-3510-3601■ Production and sales of fertilizers and agrochemicals

NC Agro Hakodate Corporation
9-23, Kitahama-cho, Hakodate, Hokkaido, 040-0078
Tel: +81-138-41-1251■ Production of agrochemicals

Nissan Butsuryu Co., Ltd.
1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: +81-3-5255-6901■ Transportation

Nissan Engineering, Ltd.
634-1, Sasakura, Fuchu-machi, Toyama 939-2753
Tel: +81-76-465-5711■ Plant engineering services

Environmental Technical Laboratories, Ltd.
2-11-17, Kohoku, Adachi-ku, Tokyo 123-0872
Tel: +81-3-3898-6643■ Consultation of environmental conservation andenvironmental analysis services

Clariant Catalysts (Japan) K.K.
2-28-8, Honkomagome, Bunkyo-ku, Tokyo 113-0021
Tel: +81-3-5977-7300■ Production and sales of catalysts for petrochemicaland petroleum products

Nissan Chemical Corporation Integrated Report 2020

80

Our Future-Creating Story

Foundation for Future Creation

Corporate Data

Overseas Bases(As of March 31, 2020)

FranceAmerica

Nissan Chemical Europe S.A.S.

Nissan Chemical America Corporation

Parc d'Affaires de Crécy 10A rue de la Voie Lactée
69370 Saint Didier au Mont d'Or, France
Tel: +33-4-37-64-40-20■ Sales of agrochemicals

10333 Richmond Avenue, Suite 1100, Houston,
Texas 77042, U.S.A.
Tel: +1-713-532-4745■ Production and sales of inorganic materials

India

BrazilNissan Agro Tech India PVT. LTD.

Nissan Chemical Do Brasil

502-504, 5th Floor, Tower B, Spazedge
Commercial Complex, Sector-47, Sohna Road,
Gurgaon-122002, Haryana, India
Tel: +91-124-4214446/47■ Sales support and promotional services for agrochemicals

Avenida Gisele Constantino, 1850,
Salas 1518 a 1520, Parque Bela Vista,
Votorantim, SP, 18110-650, Brasil
Tel: +55-15-3019-8772■ Sales support and promotional services for agrochemicals

Nissan Bharat Rasayan PVT. LTD.
502-504, 5th Floor, Tower B, Spazedge
Commercial Complex, Sector-47, Sohna Road,
Gurgaon-122002, Haryana, India
Tel: +91-124-4214446■ Manufacture and export of active ingredients of agrochemicals

China
Nissan Chemical Product (Shanghai) Co., Ltd.
Rm.3210 Office Tower 1, Raffles City Changning, No.1133
Changning Road, Changning District, Shanghai
200051 PRC
Tel: +86-21-6236-8300■ Sales support and promotional services for agrochemicals

Nissan Chemical Materials Research (Suzhou) Co., Ltd.
Room101, NW-10, Nanopolis Suzhou 99 Jinji Lake Avenue,
Suzhou Industrial Park, China
Tel: +86-512-62732080■ R&D, sales support and promotional services for
performance materials

TaiwanNissan Chemical Taiwan Co., Ltd.
5F., No.67, Luke 2nd Rd., Luzhu Dist., Kaohsiung City 821,
Taiwan (R.O.C.)
Tel: +886-7-695-5252■ R&D and sales support for display and semiconductor materials

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Nissan Chemical Corporation Integrated Report 2020

Korea
NCK Co., Ltd.
127, Chupalsandan-ro, Paengseong-eup,
Pyeongtaek-si,
Gyeonggi-do, 17998, KOREA
Tel: +82-31-691-7044■ Production and sales of display andsemiconductor materials

Nissan Chemical Agro Korea Ltd.
Room 2001, 74, Sejong-daero, Jung-gu, Seoul
04526, Korea
Tel: +82-2-774-6470■ Sales of agrochemicals

Corporate Profile (As of March 31, 2020)

Corporate Name

Nissan Chemical Corporation

Head Office

5-1, Nihonbashi 2-Chome, Chuo-ku, Tokyo 103-6119, Japan
TEL: +81-3-4463-8111

Founded1887

Capital Stock

18,942 million yen

Number of Employees

Consolidated: 2,640

Stock Listing

Tokyo Stock Exchange

Transfer Agent

Sumitomo Mitsui Trust Bank, Limited
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8233, Japan

Share Information

(As of March 31, 2020)

Total Number of Authorized Shares

360,000,000

Shares of Common Share Issued

146,000,000*

Shareholders

11,493* Includes 356,378 treasury shares

Number of shares held
(1,000 shares)

Major shareholders (Top ten companies)

Investment (%)

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

26,563

18.2

Japan Trustee Services Bank, Ltd. (Trust Account)

12,2888.4

Trust & Custody Services Bank, Ltd. as trustee for the Mizuho Trust &Banking Co., Ltd. Retirement Benefit Trust

7,276

5.0

The Norinchukin Bank

4,800

3.3

Nissan Chemical Customer Shareholders Association

3,901

2.7

Trust & Custody Services Bank, Ltd. (Securities Investment Trust Account)

2,679

1.8

JP Morgan Chase Bank

2,356

1.6

Japan Trustee Services Bank, Ltd. (Trust Account 5)

2,215

1.5

Ono Pharmaceutical Co., Ltd.

1,983

1.4

Nissan Chemical Corporation Employees Association

1,868

1.3

(Note) Investment percentages are calculated excluding treasury shares.

Percentage of share held (%)

Financial
institutions

Securities
companies

Other domestic
companies

Overseas
investors

Individuals /OthersTreasuryshares

51.3

2.7

10.7

24.0

11.1

0.2

Nissan Chemical Corporation Integrated Report 202082

https://www.nissanchem.co.jp/eng/
Issued: November 2020