Nakanishi Metal Works Co., Ltd CSR Report 2018

CSR Report

2018
Activities ReportTable of Contents
Overview of NKC

02

Company Profile, List of Sites, Lines of Business,and the History of NKC

Greeting from the Representative05

NKC’s Mission to the Society

06

Feature: Road to a Centennial Company 07
Feature 1 Support of Employees’ Active
Social Participation
Feature 2 Respect for Individual
Personality and Way of Working
Feature 3 Environmental Activities
Beyond Borders
Feature 4 Creation of New Businesses:
Entry to the Agricultural Business

07
09
11
14

Detailed Report: Together with Employees 15
Employment, training, and Activity
Promotion
Safety and Health Management
Labor-management Relationship

15
17
18

Detailed Report: Together with Customers
19
and Business Partners
Quality Assurance and Quality Control
Responsibility for Procurement andResponsibility for Supply
Response to Risks

Detailed Report: Together with
the Global Environment
Reduction of environmental impact andprevention of global warming
Environmental Business
Biodiversity Preservation

Detailed Report: Together with
Local Society
Social Contribution Activities
Nurturing of Coexistence AwarenessToward Greater Contributions toa Sustainable Society

19
21
21

23
23
25
26

About this Report
Editorial Policy
The NKC Group has issued the "NKC Group CSR Report"
widely to inform our stakeholders both inside and outside of
the company about our policy and CSR activities.
The NKC Group declares to people outside the Group that
we recognize our social responsibilities as a corporate
citizen and are determined to fulfill them through the NKCGroup CSR Report. To people inside the Group, the Reportshares information among sites inside and outside of Japan,
Divisions and sectors and provides data and materials to
promote the implementation of effective CSR activities.
In the preparation of this year`s CSR Report, we reflected thecomments and opinions gathered from the questionnaire of
CSR Report 2017 issued last year to make it readable andunderstandable to all stakeholders.

Scope of Reporting
The Report covers the activities of the NKC Group as well as
the activities related to the affiliated companies of the Group.

▪Report Period
FY2017 (April 1, 2017, to March 31, 2018)▪Date of Publication
This report has been published since 2013 as our annual report.
Japanese version: August 2018; English version: October 2018

▪Format of Publication
We prepared two versions of the CSR Report. One is a fullreport that summarizes our major annual CSR activities, and theother is an abridged version that contains featured articles only.

Report Medium
The CSR Report is accessible on NKC’s corporate website.
Copies of the Report are available upon request from our staff
or the contact page of our corporate website (see the following
URL):

27
27
28

29
Accessible web page to download the
NKC corporate CSR Report
http://www.nkc-j.co.jp/eco_csr/csr_dl.html●

01 NKC CSR REPORT 2018

Overview of NKC
The NKC Group is a globally operating manufacturer of bearing retainers, or parts that support the mechanical movement at
the core of automobiles and industrial machines that underpin the daily life and move more efficient machines, conveyors
that correspond to the systems of product manufacturing lines, and housing parts including sashes that help create acomfortable housing environment, thereby contributing to the industrial development of the world and improvement ofpeople’s living. Based on the experiences and achievements so far accumulated, we continue to provide quality products andservices to our customers and aim to achieve sustainable growth together with our stakeholders.

Corporate Profile
Company name: Nakanishi Metal Works Co., Ltd.

Head Office: 3-3-5 Tenmabashi, Kita-ku, Osaka city 530-8566

Trade mark:Employees: 4,469

Foundation: June 19, 1941

Representative : Tatsuo Nakanishi

Capital: JPY 2,512.50 million

List of Sites

EuropeJapan
North America and Central
and South America
Asia and Oceania▪No. of Group sites▪Group affiliated companies
North America and Central
and South America

Asia and Oceania

Nakanishi Kosan Co., Ltd.
Neues Co., Ltd.

Japan

12

USA

2

China

3

Canada1

Philippines

2

Mexico1Australia

1

EuropeTaiwan1

Sweden1

Fuji Honing Industrial Co., Ltd.

Thailand1UK

1

Suda Corporation

India

1

Hungary1

ISA Co., Ltd.

Indonesia

1

Spain

1

Banshu Nakanishi Metal Works Co., Ltd.
C.T.Machinery Co., Ltd.
E-Globaledge Corporation

NKC CSR REPORT 201802

Lines of business
The NKC Group manufactures bearing retainers, conveyor systems, and other housing parts as its traditional business thathas continued since its foundation. Recently we have been active in entering new fields of business. We intend to cope withthe drastic changes in the society and to constantly innovate in order to meet customers’ demands.

Bearing Retainer
Division

The Bearing Retainer Division handles a large number of bearing-related products, centering on retainers as built-in partsof bearings used in rotating elements of mechanical products, as well as automotive products. We are the world’s top
manufacturer of bearing retainers in terms of market share. We have gained high evaluation and trust of customers in awide range of fields from precision machinery to aircraft.

Metal retainer

Conveyor Division

Resin retainer

Conveyor system

Distribution-related products

Distribution-related products

The Sash Hardware Division handles hardware used in residential window sashes and other housing parts. The market
share of our sash rollers that ensure smooth movement of windows is the greatest in Japan. We are also engaged in the
production and sale of products in housing renovation or pet-related products as part of our housing-related businessactivities.

Housing parts

New Businesses

Automotive parts

The Conveyor Division produces and provides efficient production lines, including conveyor systems that support
car-making to the full satisfaction of customers’ demands ranging from design and installation to maintenance. Our
market share in Japan is the second greatest. Our products are operated in car-making factories all over the world. The
Division also handles distribution-related products including tractors and forklifts and is now reinforcing its focus on thedevelopment of distribution systems that meet todays’ demands.

Conveyor system

Sash Hardware
Division

Rubber products

Remodeling (before renovation)

Remodeling (after renovation)

In addition to the three major businesses listed above, NKC has actively developed new businesses. In recent years, weare more interested on new business development, such as agriculture, power generation and other fields completely
different from our conventional genres. We conduct business activities in a forward-looking manner while respecting theexisting businesses and technology to ensure our sustainable growth.

Steel sheet and rolling business

New power generation businessNursing care product business

Security equipment businessElectronic equipment business

Environment-related product businessTravel and hotel business

Agriculture-related business

03 NKC CSR REPORT 2018

History of NKC
100th Anniversary of the Foundation in 2024 Since its foundation in 1924, the Company has been expanding its businesswhile coping with drastic changes in society.
The NKC Group corporate culture puts top priority on customers’ point of view in every aspect of operation, including
planning, development, design and production, and is making a group-wide effort to conduct its business activities to win thetrust of customers all over the world.
The Group aims to grow as an active contributor to the betterment of the environment and local community through ourbusiness activities and to help society to achieve sustainable growth.

2005
A bearing factory was constructed
in China.

2011
The NKC Group started operation in
Europe and constructed a bearing
factory in Sweden.

Greeting from the Representative
We combine all the forces of the NKC Group andcontribute to a sustainable society with our richand innovative technology and products.
President

The NKC Group has been making various efforts since ourfoundation to contribute to social and industrial growth anddevelopment. To this end, we are committed in coping withsocial changes swiftly and flexibly. In particular, we aredetermined to fulfill our corporate social responsibility for the“creation of a better society, world and Earth.” At the sametime, we reinforce our “reform of the way of working, respectfor diversity, and consideration of the global environment” tonot only provide technology ahead of its time and productsthat satisfy customers’ demands but also create new values.
The NKC Group carries out its business activities toward anaffluent and brilliant future together with stakeholders.

▪ Implementation of CSR activities ▪
We have so far actively conducted various CSR activities tofulfill our social responsibility. In accordance with theprinciples of the UN Global Compact with which we havebeen involved since 2015 and our Code of Conduct, wenewly set up the NKC Standard as a set of action principles
for our employees in FY2016. The NKC Group further
promotes CSR activities by making all the employees in theGroup know and comply with these principles.

▪

Promotion of work-life balance andhuman resource development ▪

We set a goal of further reinforcement of the ongoingmeasures to help our employees sufficiently show theircapability and realize a variety of lifestyles through promotionof work-life balance and formation of an attractive working

05 NKC CSR REPORT 2018

Tatsuo Nakanishi

environment. We aim to promote diversity from wider
viewpoints including diversity of gender, nationality, age, andother characteristics of human resources, in addition to
ongoing promotion for our female employees.

▪ Development of new businesses▪
We are actively engaged in the development of new
businesses aiming to establish new mainstays for the entire
Group. We are working on the effective use of newtechnologies as represented by AI, IoT, AR, and VR in
addition to reinforcement of R&D of our existing businesses
and search for new markets and new products by a
dedicated section assigned to new businesses. We are also
active in taking on challenges of new business creation
featuring our design-oriented thinking and of design
management. We aim to create new businesses that can
flexibly and accurately respond to changes of theenvironment surrounding our businesses and to varying
demands of the market.

The NKC Group is always keenly aware of our vision, whichis “NKC aims to be a company that constantly reinvents
itself and where its employees like and want to work in, andwhere its employees are proud to work in.” Every one of us
is determined to enthusiastically take action to tackle social
problems and issues and contribute to the establishment ofa sustainable society.

NKC’s Mission to the Society
Principles of Activity
The NKC Group accurately understands social issues and makes an active contribution to many members of society,including our customers and business partners, our own employees, the local community as well as the global environment
by promoting business activities based on the NKC Vision, NKC Group Code of Conduct, and NKC Standard.

NKC Group philosophy of activity

NKC Group business activities
Provision of technology and service
Establishment of a relationship oftrust● Cooperation and collaboration●

NKC Group Vision*1

Stakeholders
NKC Group
Business Strategy

NKC Group Codeof Conduct*2

UN Global Compact

NKC Standard*3

Declaration of support
Commitment to the Principles andits penetration inside the Company● Participation in activities insideand outside Japan●

Contribution to a
Sustainable Society●●

Ethical rules that theCompany should
comply with and follow

Employees’ principles ofaction corresponding to
the Code of Conduct*1 NKC Vision Basic way of thinking and the ideal vision to aim at
NKC aims to be a company that constantly reinvents itself and where its employees
like and want to work in, and where its employees are proud to work in.

*2 NKC Group Code of ConductEthical rules that the Company should
comply with and follow
1. Basic mission: Provision of excellent and safe products and services
2. Compliance with laws and social norms: Thorough compliance with laws
and regulations, implementation of fair competition, and implementationof fair trade
3. Information disclosure and handling of information: Highly transparent
disclosure of information and appropriate information management
4. Respect for human rights: Respect for human rights and prevention ofhuman rights violations
5. Provision of a positive work environment: Providing a safe, healthy andcomfortable environment.
6. Environmental protection: Active environmental activities and action toprevent environmental problems
7. Social Contribution: Active involvement in actions to solve social problems
8. Opposition to Antisocial Influences: Thoroughly shut off any relationshipwith antisocial influences and organizations
9. Adherence to Corporate Ethics: Establishment of an effective internal
system and thorough compliance with corporate ethics
10. Problem-solving: Solving the causes of problems, prevention of therecurrence of problems, information disclosure, and accountability*3 NKC Standard Employees’ principles of action corresponding
to the Charter of the Code of Conduct▪ We contribute to the social wellbeing through production
and services (Monozukuri).
▪ We comply with the laws and regulations of foreigncountries and conduct honest business activities.
▪ We recognize the importance of all information and handle itproperly.
▪ We respect the human rights of all people and avoid being
involved in any act that violates their rights.
▪ We aim to maintain and improve a safe and comfortableworking environment.
▪ We actively engage in environmental conservation andreduce environmental impact to create a sustainable society.
▪ We contribute to the cultural and economic growth of local
society as a good corporate citizen.
▪ We thoroughly avoid having any relationship with antisocial
forces.
▪ We aim to maintain and improve the sense of ethics with our
top management taking the initiative in this endeavor.
▪ We prevent problems from occurring and, quickly andstrictly deal if any of it occurs.

Think about problems on a global scale
The NKC Group intends to make an active contribution to society not only in Japan but also to internationalsociety as a corporation with global operations. As one aspect of this contribution, we participated in the United
Nations Global Compact requiring businesses to act responsibly as a member of society in April 2015. Availingourselves of this opportunity, we will fulfill our responsibilities as a company by practicing the principles of action
on the human rights and environmental considerations required by the United Nations.

NKC CSR REPORT 201806

Feature

Road to a Centennial Company
100th Anniversary of Foundation in 2024 Let us show you some actions to take for us to always move forward towardanother 100 years even after celebrating our first 100th anniversary.

SpecialFeature 1

Support of Employees’ Active Social Participation

Cooperation among employees is indispensable for a company to aim at making a better society. When the employees feelthat they are active members of the society, and are engaged in communal activities, they feel that they belong somewhere.
We hope that this feeling spreads widely and takes root in the company.

The mission of the company is to provide products and services useful for society and eventually to return the profit obtained
from such business activities back to the society.
In addition, employees are required to make active contributions to society and actively provide value to society in addition totheir engagement in business activities of the Company they work for.
The NKC Group recommends that its employees be involved in various social contribution activities including volunteer
activities.
When the number of employees having a broader perspective increases, have greater interest in social issues, and feel
sympathy toward other people through their experience in volunteer activities, it will surely produce positive effects on thefurther growth of the NKC Group.

Tackling social issues as those that can happen
to anybody

Begin doing whatever it is. That’s when yourcircle of friends will widen.

I do volunteer activities at the Homedoor, a certified
incorporated non-profit organization, Kita-ku, Osaka city,
actively involved in homeless people’s problems. We donight patrol and visit people sleeping in the open or teachhomeless people how to operate PCs. When you think ofthis problem, you may see negative impressions such as
illegal reception of welfare payment or their own lack ofeffort before you see the reality. However, the more you
know about it, the more keenly you will realize it canhappen to anybody. Actually there are a lot of people
trying very hard to get back on the track. I also participate
in this support activity by offering a monthly donation.
Homedoor started to operate a facility with private shelters
to offer the homeless people a chance to change theirlives into better and to get a home. If you are interested,just check the website of the organization.

I have continued volunteer activities, such as being amember of a local volunteer fire corps or a leader of adisaster prevention team, since I was 20 years old. Now I
am a local sports promotion committee member and a
gymnastic welfare committee member. I have a wide
sphere of activities in my local community, including
volunteering for the Osaka Marathon and putting out stalls
in a local event. When people gather and work together
for the same purpose and in the same position, a sense of
camaraderie is cultivated, and that produces substantial
results. When I come in contact with a variety of people ina way that goes beyond age or community through sports
or events and jointly conducts volunteer activities, I feelpleased that is something different from the kind of joy I
get from working for a company.
I recommend you join first. Once you know what it is like, I
am sure you will feel your circle of friendship widening andcreate a rich personal relationship.

Yusuke Yamamoto, Innovation Department, Head Office

Hidetoshi Kishimoto, Osaka Plant

07 NKC CSR REPORT 2018

Value always looking around and caring aboutothers.
For 3 years in high school, I participated in volunteer
club activities
I visited children’s homes, performed my own
picture-story shows, played together with children, andget in touch with many cheerful children. That was avery pleasant experience. I have always been good withchildren, so I was involved in activities related tochildren. Now I am interested in activities for children
inside and outside of Japan, such as UNICEF Monthly
Donation, Kodomo Shokudo (Kids’ Kitchen), and foodbanks. I have a care worker’s license and am thinking ofwhat I can do for the aging society.
I try not to forget there are many people who cannot dothings that I can do as a matter of fact. I also try to beconsiderate of other people. This attitude is the firststep to volunteer activity. When I do good things, I feelgood. Caring for other people enlivens our work places
and our society. I myself actively participate in Osaka
Plant’s social contribution activities such as cleaning.
Whenever the Company informs us of any volunteering
activity, I will definitely participate in it.
Chisato Tanaka, Osaka Plant

Treasure Job-related Connections and Learningand Use them in Contribution Activities
In my school days, I wanted to do something as a memberof society, so I majored in international cooperation atuniversity and joined a volunteer club. I had various social
experiences through volunteer activities outside university
life. For example, I was involved in a youth fostering
program held by a company to provide education andtraining to participating students. I also participated in afield work program in Nepal, sponsored by the Asia
Volunteer Center, and this experience gave me the senseof what it was like to work with people of various
nationalities. I feel it helps me smoothly carry out thepresent job of supporting employees of foreign nationality.
Since I started working in society, I participate in discussion
on social issues after working hours as part of mycontinued study. I intend to join volunteering activities on
the weekend in the future. I joined the event for promoting
telework, which is one of my tasks and good work
experiences in NKC, and helped fund-raising for orphans in
the Philippines by collecting participation fees. I am
determined to continue social contributions as an individual
as well as a member of the NKC Group.
Erika Kondo, Personnel and General Affairs, Head Office

Aware of What I Do Helping Improve the
Impression of My Own Company
I am involved in a volunteer activity of children withdisabilities and local elementary school students playing
together about five times a year, mainly using myweekend. The activity takes about 5 to 6 hours each time.
I have been in this activity for about 20 years. When
healthy children spend time together with children withdisabilities, they can naturally learn what they can do foreach other. As a grown-up, there are many things I realize
anew from their common playtime activity.
Currently, I am engaged in this activity as one of thedirectors. I provide support so that I can hand down what
I’ve learned to the following generations.
I donate money to a local fireworks event in Shiga. It is myvoluntary action to let local community have a good andclean image on NKC. I intend to continue these activities
with such kindness that elderly people or people withdisabilities are offered helping hands before they realize it.
Hideaki Yamamoto, Shiga Plant

Connect with everyone through volunteer
activities and expand your world.
I am a director of a gymnastic program in Utsunomiya city.
When I was young, I played volleyball. At first, I joined
athletic events as a volleyball player. One thing led toanother, and I was promoted from a branch leader to a
director. I have been involved in this program for 20 years. I
am engaged in various sports events through the year,
such as volleyball, softball, baseball, table tennis and otherball sports. Since athletic activities are very popular in thisarea, these events are often enjoyed by many participants
regardless of age or gender. As part of the duty of adirector, I gather branch leaders and hold a meeting, andextend cooperation with local festivals and child programs I
work during 10 months in a year on these activities. I havecome in contact with a lot of people in the local
communities through the volunteer activities including thetypes of people I usually don’t have a chance to beacquainted with. It is really expanding my world. I hope tocontinue these activities while keeping the present level ofenthusiasm for years to come.
Masahiro Kikuchi, Suda Corporation
NKC CSR REPORT 201808

Feature 2

Respect for Individual Personality and Way of Working

It is our belief that when employees work in a lively manner, it can help improve the productivity and creativity of the entire
company and ultimately return greater benefits to customers and society. To this end, we need to create an atmosphere thatencourages every employee to work comfortably and conduct measures to support individual growth.

Development of Career for Female Employees
We take various measures to increase the ratio of female
employees or female managers in the Company as part of oureffort to promote diversity. One of the measures is theemployment of female employees as many as half the total
number of young employees including university graduates tobe newly employed. In FY2017, 12 women newly joined theCompany. Although there are relatively more male workers
than female in this industry, we are enthusiastically engaged increating the type of organization or workplace that helps
female science students fully show their knowledge andcapability. We also provide Female Leader Training to help
women steadily develop their career after employment. With
dedicated lecturers and team members assigned to thisTraining program, we are putting an emphasis on fostering
next-generation female managers.
We set up a day-care center and revised the child-rearing
holiday system to help female employees work comfortably
before and after childbirth and during child rearing. These
efforts have made us continuously obtain certification of the

Leading Company in Women’s Advancement (Two-star
Ikumen Promotion Company) in January 2018. In October
2017, we accepted a company tour for the purpose of
studying the CSR activities of a company. We invited Osaka
municipal Senri Senior High School, Suita city, Osaka
prefecture, which is certified as a Super Global High Schoolby the Ministry of Education, Culture, Sports, and Scienceand Technology. We presented to the students our actions to
help women work more actively and our future vision. Somestudents said they felt an atmosphere in our company thathelps not only women but also any worker focus on their workin a good way.

Kurumin Mark (one star)

Presenting our Activities to Students Who Will Carry the Next Generation

09 NKC CSR REPORT 2018

Leading Company in
Women’s
Advancement(Two-star Ikumen
Promotion Company)

Feature Road to a Centennial Company

Improvement of a Working Environment with Employees as Initiators
We started organizing the Nadeshiko Project, with employees
as the main initiators, in conjugation with our support of woman
employees’ career development a few years ago. In FY2017,
we revised the past internal questionnaire survey and tackled
the issues related to child-rearing. We also held the NKC
Guardians Meeting for head office employees as an opportunity
to come in contact with others among child-rearing employees.
Nearly 30 employees, regardless of department or gender,
participated in the meeting, and the event ended successfully.
This contact meeting aims to create an environment wherechild-rearing employees will not bear their worries alone byoffering them an opportunity to share their mutual problems,such as work-life balancing, application for entry to nurseryschools, or after-school care for children. We plan to continue
this program and activate internal communication. We alsoplanned publication of a guidebook that gives an easy-to-follow
explanation of systems or schemes related to child-rearing. The
planned process includes preparation of the table of contents in
FY2017, completion of the booklet in FY2018, and distributionof the booklet to various sites in FY2019. In 2018, the project

restarted to think how we could make workplace ideal not only
for women but any other employees. The project, named“NEXT NKC Project”, its members consist of male and female
employees of NKC.

Regular meeting of the Nadeshiko Project

Participants of the NKC Guardians Meeting

Health Event for Participation of all Employees of the GroupThe NKC Group believes that each workplace shall be safe
and comfortable. Therefore we take various measures topromote their mental and physical health for working actively.
For example, in addition to legally required medical and stresscheck-ups we provide additional check-ups, provide
consultation and aim to reduce prolonged working hours.
In FY2017 October we held a company-wide health event
called NKC Walking Event. We did this to help the employees
to do sports and incorporate it into their routines. The
participants measured and recorded the daily number of steps
with a pedometer. The distance walked was transferred on

special map. The NKC Group walked together towards acommon goal set on that map. Employee cafeterias are places
where the information can be widely spread among
employees. Therefore, the desktop POP ads, showing thehealth information about “food” (appropriate amount and salt
reduction), “appropriate amount of alcohol to take,” “oralcare,” and “exercise” were placed in the cafeterias to support
employees interested in health improvement.
We are considering holding health improvement events every
year to improve all employees’ health awareness.

POP ads placed at the cafeteria of every site

NKC CSR REPORT 201810

Feature 3

Environmental Activities Beyond Borders

As a company that develops business globally, efforts to address social issues need to be addressed not only in Japan but
also in other countries all over the world. We believe that environmental problems, among various issues, to be particularly
important, so we promote action at our various sites around the world.

Global environmental problems that need action include global warming, depletion of resources, destruction of the ozone
layer, reduction of tropical rainforest, desertification, reduction in the number of wildlife species, marine pollution, and publicpollution in developing countries.
Overseas sites of the NKC Group started to tackle these problems early on and have continued improvement activities thatmeet the conditions of each area.
We continue to support the precautionary principle approach, take the initiative to accept greater responsibilities, encourage
the development and spread of environmentally friendly technologies.

Environmental activities at NSC, Goteborg, Sweden
Our NSC factory takes various measures
to ensure preservation of the global
environment. We made a large-scale
investment in plant and equipment to
reduce power consumption of heating
equipment by 40%, thereby successfully
reducing power consumption. We use
recyclable energy, or green energy, such as hydro power
generation, wind power generation, biofuel, and solar power
generation, to contribute to the global environment. In addition,
we have a natural park near the plant. We clean the waste
water from the phosphate treatment area in the production
equipment by the waste water treatment system. In order toprevent leakage of wastewater to the city area, we haveinstalled lids to cover wells linked to the waterworks, rivers andsoil. We regularly check them. We installed a power charging
station for electric vehicles and hybrid cars and recommend
employees select EV or hybrid cars. This is because individual
choice has a great impact on the environment. We intend topreserve the global environment on a personal as well as
corporate level.
NKC MANUFACTURING SWEDEN AB
Anna Sjastad

11 NKC CSR REPORT 2018

Power charging station

Cover for prevention of effluent leakage

Feature Road to a Centennial Company

Environmental activities in NPC, Cebu, the Philippines

Environmental activity at NAI, Tennessee, USA

NPC treasures the idea that
employees take the initiative incarrying out various activities. We
participated in the Earth Hour
Celebration, one of the world’s
largest class global environment
events, in the first quarter (January to
March) of 2018. Our environment staff visited local
elementary schools to teach global warming to children.
Internal actions include power saving of about 320.5 kWh
as a result of one-hour lights off from 8:30 to 9:30 p.m. ofMarch 24, 2018, and reduction of 0.18 ton of CO2 in MEZ II(industrial park in Cebu where NPC is located). In addition,
NPC holds a recycled clothes contest and a productcontest on the theme of “connecting people through global
environmental preservation.” We are determined to takevarious actions for the preservation of the global
environment all throughout the year.

Our NAI plant aims to contribute to
the preservation of the global
environment through energy-saving
activities at workplaces. Powerconsumption is reduced by changing
desktop PCs to power-saving
notebook PCs and promoting shifting
to LED lamps for lighting fixtures in the Company. When asingle LED lamp is used instead of a fluorescent lamp, it
can reduce CO2 emission of up to about 590 kg. If allhouseholds in USA used LED lamps instead of other lamps,
power consumption for lighting will be halved. We also plant
trees in our compound to absorb emitted CO2 as part ofour contribution to keeping our earth green. It is said that asingle tree aged 10 years, when planted, can create oxygen
for two people to breathe. We expect tree planting will havea great effect.
Gene Bloodworth, NKC of America, Inc.

NKC MANUFACTURING PHILIPPINES CORPORATION
NPC’s Environmental Officers

Participants in the Earth Hour
Celebration

Planting activity in the site

Global warming lecture held at a local
elementary school

Shifting to power-saving type notebook PC

Environmental activities at NMC, Georgia, USA
NMC annually recycled about 152 tonsof plastic, about 11 tons of cardboard,and about 8,618 tons of iron scraps fora fee. We also promote the recycling of
distribution pallets (about 1,700 pallets amonth) jointly with customers as part ofour contribution to forest preservation.
To further promote recycling of resources, we used the Safety
Kleen Systems of Clean Harbors Co. to develop a recycling
system that recycles waste oil produced from the plant andsupply new oil. This system is designed to take in waste waterfrom the plant at the same time. Therefore, use of this system
serves as a very useful activity for the global environment of ourplant as well as for the local community.

Waste oil recycling system

NAKANISHI MANUFACTURING CORPORATIONDavid Voyce

NKC CSR REPORT 201812

Environment activities at NFC, Foshan, China
In China, the Chinese government has
become very serious about the further
intensificationofenvironmental
protection. As part of our pioneering
activity in this respect, our factory has
already started environmental activity as
we see the environment as very
important. No practice of refuse separation has taken root in China
yet. We once disposed of all waste without sorting. Today we doour best to separate refuse as much as possible and encourage
our employees to feel keenly aware of the importance of refuse
separation. We plan to reinforce refuse separation management
according to the national government’s environmental protection
law in FY2018. We intend to employ the municipal department or
government contractors to collect refuse. Although our employees
are still learning the importance of refuse separation, we intend to
put more focus on educating the employees so that they can fully
understand the importance of sorting.

Employees seriously considering
how to cope with environmental
protection

Trash cans for refuse sorting andseparation

NKC CONVEYOR FOSHAN CO., LTD.
Ding Zheng

Environment activities at NWC, Wuxi, China

Environmental activities at NDC, Dalian, China

Chinese environmental control has
become very strict in recent years. In
response, we focused on the
reduction of CO2 and studied theidea of reducing the number oftransport services in the production
management section as part of thisyear’s activity. With the help of customers’ understanding,we successfully revised the ordering procedure and were
finally able to ship our products with transport trucks fully
loaded as they depart. This success led to a reduction in
the number of transport services, and CO2 emissions were
ultimately down as much as 20%. Currently we areconsidering applying this approach to other shipments.
Amid intensifying environmental regulations, we aredetermined to continuously think up what we should do asa manufacturing company.

Our NDC factory takes various
measures to ensure preservation of
the global environment. For example,
we changed the lighting fixtures in
the factory with LED lamps topromote energy saving. To reduce
the waiting time for office equipment,
we decided to turn off the equipment, mainly computers,
printers, copiers, and water dispensers, at closing time. We
strictly keep this rule to eliminate waiting time from officeequipment after work hours. We also use equipment in our
workplaces properly so that we can improve its service lifeand reduce the wasteful use of energy. Our effort also
includes saving of water resources to minimize the wastefuluse of water. To be specific, we conduct strict time controlof bathing water for workers to make employees feel keenly
aware of usage time and water saving.

NKC MANUFACTURING WUXI CO., LTD.
Wang Xixi

NKC MANUFACTURING DALIAN CO., LTD.
Jiang Jinhua

Shifting to LED lighting fixtures
Consultation on how to reducetransporting vehicles

13 NKC CSR REPORT 2018

Keeping transporting vehicles fully
loaded as they depart

Equipment operation
standard to ensure theefficient use of energy

Feature Road to a Centennial Company

Feature 4

Creation of New Businesses: Entry to Agricultural Business

Some new businesses actively conducted by the company-wide effort include those born out of training for young andmid-career employees. All these businesses are intended to make the NKC Group enter a new realm of “agriculture,” a fieldwith which the Group never had any relation.

Start of Trial Cultivation in Next-Generation Agriculture
Next-generation agriculture (featuring use of environmental
control or IoT technology) has been studied from FY2015 to2016 in the Management Human Resources Workshop, a
training program for young and mid-career employees who
are going to play the central role in future management of theCompany. In FY2017, dedicated staff were assigned in the
Company separate from the Workshop as the first step intofull-scale commercialization. A cultivation greenhouse wasbuilt in Konan city, Shiga prefecture, to cultivate highly sweet
tomatoes using state of the art technology. The purpose ofthis trial cultivation is to accumulate our own farming
techniques and promote development of new agricultural
technology. At the same time, we jointly work with local

governments and other people concerned to gain greater
recognition and promote greater local contributions.

A dedicated cultivation greenhouse was set up
for trial cultivation.

Tomato cultivation
using the cutting-edge
technology

Development of Products and Services for Farmers
The Partner to farmers “agbee” was born out of the young
farmer training held for the theme of new business creation
under the guidance of Prof. Naohito Okude, Keio University
Graduate School of Media Design. Japanese agriculture
produces high-quality produce, but Japanese farmers needto carry out a large volume of heavy work. We wanted to help
farmers feel a new value. Out of this desire, we havepromoted the development of new products and services
with an intense focus on field survey. Current focuses include
a function of carrying heavy crops while automaticallyfollowing people and a service of helping farmers check thesoil condition using soil sensors. It was decided that a trial
introduction start in FY2018 with the cooperation of an Osaka
farmer. The future plan is to make “agbee” a brand, create
various products and services that can make contributions tosociety using agbee, and propose a lifestyle born out ofagriculture.

Agbee transports farm products after
it automatically followed and gatheredthem.

We participated in agriculture-related exhibitions
in Tokyo and Osaka.

NKC CSR REPORT 201814

FY2017 Activity Topics
Employment, training, and Activity Promotion
Toward Acquisition of Excellent Human Resources
Ratio of women to regular full-time workers

Aiming to acquire excellent human resources who can makefuture leaders, the NKC group focuses on organizationalfoundation that enables young generations to play importantroles.
A medium-size corporation, NKC is an organization made up
of a relatively small number of people. This nature enables
employees willing to “take on a challenge” to take the initiativein conducting a business regardless of age, gender, nationality
or career. NKC has in place a working environment where
every employee can apply skills and experience they had
before entering the Company into a global setting, achieveself-fulfillment or make active social contributions throughbusiness.
In recent years, we actively engaged into new fields inaddition to the current major businesses. This environment
allows young employees to demonstrate their capabilities andbe active on a voluntary basis.

Provide opportunities for young employees to think about
the company through internal projects.

Together With Employees

Upskilling and Career Development Education

Stay-home
work system

Training results

6

sites and93

Promotion of Work-Life BalancepeopleThe NKC Group provides varying opportunities to foster
human resources capable of contributing to growth of theCompany and society.
In FY2017, we started and held a new training workshop
composed of a program for employees of the head office
and factories in Japan in addition to the regular training
program.
■Training for the newly employed
Newly employed workers visit factories and have direct
knowledge of products and techniques of the NKC Groupafter they have joined the company. The new employee
program also includes a visit to the Philippines for language
training to help the employees improve their English
proficiency. This program provides them with an opportunity
to experience foreign culture aside from language training.
■2nd year training
2nd-year employees are provided with a follow-up training
program to make them conscious of being working
members of society as well as promising members of the
NKC Group.
■Female leader training
The Female Leader Training program was newly developed
for mid-career female employees as part of the NKC
Organization
Development
Training
tonurturenext-generation female managers. The training aims to raise
their awareness or improve their business skills throughlectures or task study.
■FY2018 plan
In FY2018, we hold the Young Career Upgrading Training
intended for young employees to provide early education topersonnel expected to become future leaders in addition tothe ongoing training programs mentioned above. Our
training plan aims to ensure active fostering of humanresources to draw the potential capability out of promising
human resources and help them make greater contributions
to the Company and society.

Administrative sites

Fully Introduced
The NKC Group promotes the way of working with a focus
on good work-life balance. Various measures are being
taken, including improvement of the relevant internal
systems, establishment of day-care centers, andimplementation of employees’ work place improvement
projects so that our employees, either male or female, cansatisfy the needs of both work and home.
In FY2017, the stay-home work system, conducted on a trial
basis in the previous year, was introduced to administrative
sites in earnest. Reduction in commuting hours or availabilityof time in which employees can concentrate without
disruption is expected to enhance business efficiency andproductivity, promote mental health, and improve work-lifebalance. We intend to promote the teleworking scheme,
centering on stay-home work system in the future.
Today, the times are supporting a what-is-called “era of
one-hundred year lifespan.” To effectively use the “rich time”
made available from the excellent work-life balance, weshould shift our interest to our own home problems as well
as social issues in the capacity of a “member of society”
rather than a “member of a company” and have time to think
about what we, as an individual, can do. When every
employee can have a good work-life balance, his or her
ideas and actions born out of such balance will change
society. It is our wish that every employee be engaged invarious activities in and out of the Company as a responsible
member of society to help them lead a spiritually affluent life.

Promoting Work-Life Balance Through Enhancement of Systems
and facilities

NKC CSR REPORT 201816

FY2017 Activity Topics
Safety and Health Management
Overview of annual priority measures and their results
Participants in the foremancapability improvement training

6

sites

36

employees

In FY2017, regular activities including safety education using
morning meetings as well as KY and 5S promotion were
held. In addition, a performance improvement training
program meant for foremen, the safety managers at eachwork place, was provided to a total of 36 foremen selectedfrom the head office and factories inside and outside Japan.
The foremen training program included practical training thatprovided information on general case examples, caseexamples unique to the NKC Group and had trainees findthe true causes of the sample accidents, and identify
problems that can lead to accidents. We aim at zeroaccidents by creating “awareness” through these measures.

Raise Awareness for safety first
Revised Safety and Health Pocketbook

Distributed

The NKC Group tries hard to develop safety awarenessamong employees to prevent work-related injuries. The
Safety and Health Pocketbook has been distributed to all
employees regardless of the type of employment. The
Pocketbook is regularly used to keep them constantly awareof occupational safety. However, it was revised for the firsttime in ten years to incorporate the updated information
including provisions of revised laws and regulations andrecent trends. Furthermore, the initial response action in thecase of an earthquake was newly added to the Pocketbook.
The latest revision put a focus on the mechanism of how
industrial accidents occur and provides a lot of descriptionsof human error. In addition, the Priority 7 Operations, which
are operations involving danger, hazard, and toxic risks
specified by the NKC Group, and “dangerous work” of asimilar nature was renewed. With this revision, addition, andimprovement, the Pocketbook is made as an effective toolfor daily safety and health education.

Foreman capability improvement training

Revised Safety and Health Pocketbook

Drill using case examples

Presentation

17 NKC CSR REPORT 2018

to employees
at all sites

Together With Employees

Labor-management RelationshipPhysical and mental health management
Walking event participants

12

sites

998

peopleAiming to achieve “health-based management,” the NKCGroup takes various measures to ensure healthimprovement of employees and their appropriate healthmanagement. From 2016, October during National HealthWeek, we distribute Health Pocketbook and hold healthactivities intended for all employees. This is to promotehealthy lifestyle and to raise
employees' awareness about
health management at work as
well as at home. So far, ourefforts have been recognized.
In FY 2017, we received anaward during the 3rd Osaka
Health AwardIn FY2017, we held "NKC
Walking Event" in October for 1
month and the Smart Stay
event in December and Marchat a Japanese style inn
operated by one of the our Osaka Prefecture Health Award
Group companies (an overnight Recommendation Prize
stay event for the theme offitness, health instructions, and physical and mental
recuperation in a hot bath).
998 people (about 50% of the Group employees)
participated in the Walking Event. In particular, factory
employees made up nearly 70% of all participants. During
these periods, posters and POP were put up in the head
office and factories to educate employees about healthmanagement.
Utilizing the characteristics of the Japanese inn in Arima Hot
Spa, the Smart Stay is an event for a healthy mind and body.
Professional staffs provide exercises instructions, fitness andhealth guidance and offered healthy foods using local
ingredients. The participants enjoyed a relaxing hot bath.
Under the Vision of the NKC Group, we are aiming for healthmanagement that enables employees to demonstrate higher
performance in the workplace. We intend to hold these
events and many other similar events in the future.

Labor-management communication
Working arrangements for re-employed retirees

Agreedwith the basic rule offull-time employment

A labor-management council is regularly held to improve theemployment and working environment for employees andensure smooth and appropriate communication between
labor and management. The sessions of the Subcommittee
for Review of Retiree Re-employment System with members
composed of labor and management staffs were held, andboth sides agreed with the implementation of this system in2017. Employees themselves are now entitled to choose
how to work after retirement.
We continue labor-management discussion toward
improvement of employee satisfaction including reduction in
the total working hours, not to mention further promotion ofwork-life balance.

Action toward effective use of paid holidays
and reduction in working hours
Subcommittee for Official Working Hours Reduction

Launched

in FY2018

The NKC Group constantly promotes a way of working thatemphasizes work-life balance. The current tasks to achieve
include reduction in total working hours and increase in thenumber of paid holidays employees take. In those jointlabor-management efforts, the Subcommittee for Official
Working Hours Reduction was launched together with thelabor union. In the back-office section with the management
sector as the central player, the management people takemeasures to ensure appropriate business and time
management of their own sector. In the direct section
composed of factories, realization of highly productive
operation helps employees efficiently work at each work site.
These company-wide efforts are intended to allow
employees to lead an affluent life at work and at home.

NKC CSR REPORT 201818

FY2017 Activity Topics
Quality Assurance and Quality Control

Detailed Report

Together with Customers
and Business Partners
The Way of NKC Thinking
Quality assurance and improvement is the important
promise we make to customers who use our products,
techniques, and services.
The NKC Group has consistently strived to provide all ourcustomers with quality and reliable products, techniques,
and services since our foundation. We have a quality
control system in place based on our quality assurance
and control policy. Under this system, every department
and sector takes various measures to maintain the qualityof products, techniques and services and ensure theirfurther improvement.
We are determined to constantly conduct quality control
and maintain high quality at an enhanced level to meet
every demand of our globally located customers throughcollaboration with our production sites inside and outside
Japan, our contractors, subcontractors, and suppliers. In
addition to the provision of quality products, techniquesand services that satisfy customers’ demands, we arealways refining our own skills and technical expertise toachieve the level of quality beyond the reach of any
competitor using our own quality standard.

Toward Quality Maintenance and Improvement■Bearing Retainer Division

Under the slogan “Achieve the market’s highest quality in an
economic manner,” the Quality Assurance Group ofTechnical Headquarters, Bearing Retainer Division, and thequality assurance sector of a total of 7 production sites
inside and outside Japan make a combined effort tomaintain a high level of product quality and improve it. The
Division focuses on quality assurance of our standard
products, or bearing retainers, as well as automobile parts,
wind turbines, Shinkansen products, and others that supportand move the mechanism of our daily life. In addition, quality
control based on our management system that complies
with international quality management standards ISO9001*1
and IATF16949*2 is thoroughly followed through practicalactivities including internal audit.
The monthly Quality Meeting and the annual Global Quality
Meeting are held to exchange information and share basic
rules of quality control to ensure constant reinforcement ofour global quality control and quality assurance system. In
addition to such regular communication among production
sites inside and outside Japan, production sites in Japan
conduct graded training on quality assurance and control,with the Quality Assurance Group of the head office playing
the central role in this training, so that every employee at
each production floor can be constantly aware of theimportance of quality assurance and control.
The achievements of quality assurance and control so far
made by the Division have Been acknowledged by manycustomers. However, we still need to put lot of effort inhuman resources to sustainably provide higher quality andmore reliable products to the market and the society.

Members participating in the Global Quality Meeting

Definitions*1 ISO9001 is an international business standard that requires a company toestablish a quality management system (QMS) and continuously improve it
while keeping it effective.
*2 IATF16949 is an international quality management system standard for the
automobile industry prepared by IATF (International Automotive Task Force).

19 NKC CSR REPORT 2018

Together with Customers and Business Partners■Conveyor Division

We are always working on quality improvement andmaintenance according to the Slogan “Conveyors that neverstop or that can immediately recover even if it stops.” The
Division has a total of three production sites inside andoutside Japan. The Division collects information from all sites
through regular management class meetings and otheropportunities, integrates the collected information, andprovides it to all sites so that the head office and all sites
always share the same information. This information sharing
practice allows us to quickly and accurately take action
whenever the occasion arises.
The Shiga Plant, one of the production sites in Japan, serves
as the “mother factory” for the entire world. Quality control isthoroughly conducted at the production floor of the Shiga
Plant. The head office applies the feedback from customers,
factories and production floor to design drawings toultimately achieve further quality improvement.
The Shiga Plant puts in place the operation matrix evaluation
criteria for each sector and has a skill distribution diagram foreach employee. The Plant uses its own “meister system”
that sets the technical standard for the front line operation to“visualize” the skills. The “meister system” provides work
instructions and education to employees depending on theirskill grade to help them maintain and improve quality.
The Division takes various measures, including those
activities, to earn high esteem from customers and create
products that can contribute to society.

Regular meeting with overseas sites■Sash Hardware Division

The Division acts to the Slogan “Achieve the market’s
highest quality in an economic manner.” The action
continues, involving workers themselves, toward
establishment of a management system of three sites insideand outside Japan. The quality activity policy is annually
determined based on the performance of the previous year
and customer requests. With the help of our own production
factories and cooperating factories inside and outside
Japan, the Division successfully ensures a high level ofstability and safety in production of parts and finishedproducts.
The production factories identify what worries workers andimprove poorly operating processes as part of voluntary
improvement activities and obtain successful results. The
achieved improvement is shared among production sites
inside and outside Japan and disseminated throughout allsites in the world.
The Division is looking for new management methods torealize further improvement of quality control and ensure
quality stabilization.
The Quality Assurance Group of the Sash Hardware Division
conducts human resource development (in and out of theCompany) to establish a system that eliminates theoccurrence of quality problems and ultimately improve
management level. The effort continues to realize“monozukuri” (manufacturing) that can obtain higher esteem
from customers through these constant actions.

Quality briefing session in a factory

Employees in a process improvement review meeting

NKC CSR REPORT 201820

FY2017 Activity Topics
As a Responsible Supplier
Responsibility for Procurement and Responsibility for Supply

Response to Risks

We conduct procurement andsupply with the Company’ssocial responsibility fully taken
into consideration.

We conduct risk response
activities at all sites in Japan toensure business continuity.

■Fair Trading

The NKC Group always remembers compliance with laws
and regulations related to procurement, centering on the
Subcontract Act and Antimonopoly Act, and conducts
business activities so that no conduct that disturbs free
trade or no illegal competitive conduct occurs. Personnel
dedicated to handling matters related to such trading
conduct, including doubts or questions one may have during
the process of transactions, are assigned inside theCompany to ensure thorough compliance with fair trading.

■Respect for intellectual property rights

We have dedicated staff in charge of intellectual property.
They properly handle and manage matters related tointellectual property rights so as to comply with laws,
regulations, and social norms of any country or region inwhich our sites are located or we have business connections
or to prevent any of our development or production activities
from violating third-party’s intellectual property rights.
Intellectual property rights are important management
resources for a company. The NKC Group continues to doits very best to protect its rights and respect intellectual
property rights of other parties.

■BCP based on scenario earthquake damage

The head office of the NKC Group established the BCP*1 in2012 in preparation for a large-scale earthquake. This BCP
has already been applied to all sites in Japan and some sites
outside Japan.
In FY2017, drills for saving people based on the BCP andestablishing the operation system at the HQ were intensively
conducted. The HQ operation drill conducted at the head
office in the previous year was applied to factories. The
earthquake scenario was newly added to the program of theevacuation drill, which was formerly based on the case of firealone. A total evacuation drill was also conducted at thehead office, in which some 600 employees simultaneously
evacuated from inside the buildings to outdoors. Emergency
contact information is being compiled in case a major
earthquake occurs during business trips or outside working
hours. We continue to gather such information from
employees every year to raise the registration ratio of
employees.

■Conflict minerals

Some minerals produced in Democratic Republic of theCongo and its surrounding countries are said to be used as
funds for armed forces. It is the duty of a responsible
company not to procure or use “conflict minerals” that may
be involved in such human right violations or environmental
destruction through complicated supply chain processes.
The NKC Group clearly declares that we never procure
conflict minerals or supply products produced from suchminerals and clarifies how subject minerals are handled
through questionnaires received from customers.

A total evacuation drill in the case of earthquake conductedat the head office

Outdoor emergency cabinet installed

21 NKC CSR REPORT 2018

Together with Customers and Business Partners

Since reserves are immediately necessary after the occurrence ofa major earthquake, items stored at each factory were rechecked
anew, their expiration date was checked, and new items werestored to replace old ones, if necessary. This reserve inventory
was conducted at the same time at all factories. Since there aresome stock foods whose expiration date is within the year, thosewith some time still left before that date were distributed to
employees to encourage their awareness raising about disasterprevention at home as well as at work. Emergency cabinets wereplaced at each site for use in emergency situations where
employees have to take shelter outside.
The appropriate action procedure necessary just after theoccurrence of a major earthquake was prepared witheasy-to-understand texts and illustrations and was newly added
to the Safety and Health Pocketbook to be distributed to all
employees. Since a large number of people find it difficult toreturn home in the event of a disaster, we plan to prepare a new
warning card about returning home, as a revised version of thesafety confirmation card distributed to employees in the past, inand after FY2018.

■Information Security

The Security Safety Management Regulation has beendelivered to the head office and our sites inside and outside
Japan to make sure that the company’s classified information
will not be lost, damaged, leaked, or abused by various
internal and external factors. The procedure of information
handling using manual, physical, and electromagnetic meansor methods such as storage of data and materials, access
control, and contractor management is put in place. Since it
is important to check how the procedure is actually used,internal audit is conducted sequentially at sites where theRegulation is applied. At the same time, we provide
instructions to the sites for improvement of information
management. We plan to continue activities to strengthen
information security measures for the entire NKC Group.

Information Security Handbook delivered to employees

Disaster control HQ operation drill conducted at a factory

Employees are notified of the importance of information security
through briefing sessions and the Handbook.

Various drills planned and conducted at each factory

Definitions*1 BCP stands for business continuity plan and is an advance plan to minimize
damage to the Company and ensure business continuation and restorationin case of emergency situations that affects business continuity such as
disaster or the spread of an epidemic or plague.
NKC CSR REPORT 201822

FY2017 Activity Topics
Reduction of environmental impact andDetailed Report

Together with the
Global Environment

Promotion of environmental activities andfostering of environmental awareness
Environmental policy was revised.
The NKC Group formulated

a new policy
for the Group.

The Way of NKC Thinking
The NKC Group has been actively involved inenvironmental conservation in our production activities. In
addition, each employee also conducts their work while
being aware of “global environmental conservation.” Wealso contribute to the prevention of global warming by
not only conducting various energy-saving activities but
also creating recyclable energy through ourenvironmental businesses.
The NKC Group has production sites in USA, Sweden,
the Philippines and China, and each site is actively
involved in global environmental conservation. We
conduct appropriate environmental management incompliance with the laws and regulations of each country
and by considering the local customs and practice.

In April 2017, the NKC Group Environmental Policy wasrevised. In response to the changes to the requirements of
ISO14001*1, we clearly stated to implement “improvement ofenvironmental performance” through promotion of
resource-saving activities at offices and production sites andeducation to employees. The NKC Group will use thisenvironmental policy as a group-wide standard to thoroughlymanage the environment and contribute to preservation of the
global environment.
In response to this revision, we conducted enlightenment
activities for preservation of the global environment at morning
meetings for all employees and general meetings and held
briefing sessions using our original educational materials.
We collected proposals for “environmental slogan” from
employees and prepared posters as part of the enlightenment
activities in timing with the Environmental Month in June.
Definitions*1 ISO4001 is an international environmental management system standard
prepared by the International Organization for Standardization (ISO). The
NKC Group completed transition examination of ISO14001 for three bearing
factories in Japan, Tenma Sheet Metal, EPD (Environmental ProductDevelopment), and Fuji Honing Industrial by January 2018. These sites are
kept certified by the new standard of 2015 version.

Environmental Policy“The NKC Group helps realize sustainable society by reducing
the environmental impact that our products and services may
have in all of our businesses and engage in global environmental
conservation according to the Code of Conduct.”❶ We aim to improve environmental performance by continuously
improving the environmental management system.
❷ We comply with laws, regulations and ordinances related tobusiness activities and other requirements the NKC Groupagreed with.
❸ We promote education and enlightenment activities related tothe environment to improve awareness and knowledge about
environmental preservation.
❹ We endeavor to prevent environmental pollution and reduce
environmental impacts such as resources and energy.
❺ We will actively participate in environmental conservation
activities conducted by the national or local governments.

23 NKC CSR REPORT 2018

Together with the Global Environment

prevention of global warming
Energy-saving activities

Resource-saving activities

Use of eco cars as company cars

* Domestic production sites

Introduction ratio

Zero emission

98

%

11

Continuing to theth Year

The NKC Group promotes energy saving at workplaces andproduction sites inside and outside Japan as part of its effort toprevent global warming.
We actively introduce energy-saving types of equipment suchas production equipment, air-conditioners, and lighting fixturesand provide thermal insulation to roofs and walls.
Almost all the Company cars used at the head office anddomestic production sites are eco cars.
We participate in various energy-saving activities initiated by the
Ministry of the Environment such as Fun to Share*2, COOL BIZ*3,
WARM BIZ*4, and COOL CHOICE*5 to provide our employees
opportunities to casually participate in energy-saving activities.
Every one of us does what we can do as an individual for global
environmental conservation.

Like energy-saving activity, resource-saving activity is also oneof the Group-wide actions for global environment.
In addition to energy conservation activities, we are also
implementing resource conservation activities that are cited the
NKC group efforts. 3Rs (reduce, reuse and recycling) of waste
is promoted to reduce waste at each office, establishment, andproduction site. Zero emission*6 has been achievedconsecutively for 11 years.
We also regularly conduct a questionnaire survey on theenvironment to contractors and subcontractors to promote
reduction in environmental impact as part of our appropriate
environmental management activities.

Definitions*6 Zero emission This is the concept of ultimately eliminating generation ofwaste by thorough use of recycling and using up waste in all of society
through collaboration with businesses in various fields rather than a single
company.

*2 Fun to Share is a climate change campaign that shares and communicatesenvironmental efforts towards the creation of low-carbon society. The actions taken bycompanies that declared their participation in this campaign are checked at its website.
*3 COOLBIZ is a movement to recommend business people be lightly dressed in summer
so as to promote power saving. (The COOLBIZ period is from May to September.)*4 WARM BIZ is the winter version of COOL BIZ. It recommends that we do not excessively
rely on heating and be thickly dressed so that we feel comfortable even in rooms with atemperature of 20℃. (The WARM BIZ period is from November to March.)*5 COOL CHOICE is a movement to take action for climate change and reduce greenhouseeffect gas emission at home and at work.

Definitions

Practice Items

1. I do the following to reduce carbon dioxide:❶ Turn off lights at places not in use.
❷ Turn off lights during lunch break.
❸ Turn off the power of a PC or turn it to sleep mode when it
is not used for 30 min or more.
❹ Set the air-conditioner to 28˚C or more for cooling and 20˚Cor less for heating as a rough guideline.
2. To reduce the volume of waste landfill, I:
Separate waste according to the refuse separation chart.
“Waste turns to resources when separated but remains as
waste when mixed.”

Environmental slogan poster

Environmental Slogan“Leave a Clean Earth for the Next Generation.”

NKC CSR REPORT 201824

FY2017 Activity Topics
Environmental BusinessHistory of Power Generation BusinessCO2emission reduction through business

3,950

tons

■Solar power generation business
The power output in FY2017 (result) is as follows:●Nabari Solar Power Plant:
520,405 kW∙CO2emission reduction effect → about 250
tons* It is calculated based on the emission factor of 0.485 kg/kWhof Chubu Electric Power Company.

●Murayama Solar Power Plant:
1,917,920 kW∙CO2emission reduction effect → about
1,100 tons
* It is calculated based on the emission factor of 0.572 kg/kWhof Tohoku Electric Power Company.

■Biomass power generation business*1
The power output (result) of FY2017 at the Nagai GreenPower, Nagai city, Yamagata prefecture, is as follows:●Nagai Wooden Biomass Power Plant:
4,532,090 kW∙CO2emission reduction effect → about
2,600 tons
* It is calculated based on the emission factor of 0.572 kg/kWhof Tohoku Electric Power Company.

The Nagai Power Plant started operation of its equipment
according to the original plan, and power sale started. Nagai
Power Plant generates power using the updraft gasifier
method employed by only a few companies in Japan. In the
Nagai power Plant, we use only chips produced fromthinned wood of 100% domestically produced timber togenerate electricity, so unlike the "direct combustion type"which uses all usual wood materials, it is precisely anenvironmentally friendly Power Plant. It is evaluated as arenewable energy power plant.
In the future, we intend to conduct the power generation
business that can make more contributions to the local
community by, for example, supplying warm water to nearby
welfare facilities using waste heat produced from power
generation.

Both Nabari and Murayama Power Plants are operated togenerate power as planned. Regular inspection and repair isconducted to cope with aging and deterioration of solar
panels and related equipment. In FY2018, the 5th year
inspection is to be conducted at the Nabari Power Plant.
Appropriate repair is conducted to continue operating theplant according to the plan.

Nagai Wooden Biomass Power Plant

Definitions*1 Biomass power generation project is an undertaking of generating electricity
using a biological fuel, “biomass,” which is a recyclable resource produced
from organisms, other than fossil fuel.
Murayama Solar Power Plant

25 NKC CSR REPORT 2018

Together with the Global Environment

Biodiversity Preservation
Carbon offset*2

NKC Group Eternal Forest

Total offset volume by FY2017

281

tons

We adopted the carbon offset system in conjunction with
reduction of CO2 emission at workplaces and production
sites. 60 tons of CO2 were reduced in FY2017.
The following items are subject to carbon offset.
●C.T.Machinery Co., Ltd.:Part of power consumption by energy-saving lighting
fixtures → 29 tons
●Head office:Fossil fuel consumption reduction by company cars in
CO2 → 31 tons
The effort of the NKC Group appeared in the 4th and 6thcompilation of case examples in the Carbon Offset Grand
Prize organized by the Carbon Offset Promotion Networkand sponsored by the Ministry of the Environment, theMinistry of Economy, Trade and Industry, and the Ministry ofAgriculture, Forestry and Fisheries.
The NKC Group continues to reduce CO2 emission as partof the biodiversity preservation.

Employees participating in a tree nurturing event46

persons

The NKC Group started participating in the Corporate Forest
promoted by the prefectural government of Wakayama in
2016. We borrow a forest near Nakahechi-cho, Tanabe city,
near the World Heritage Kumano Kodo, and named it the“NKC Group Eternal Forest” for planting and arboriculturalactivities.
On the arboricultural event day in FY2017, it unfortunately
rained. Therefore, we had a program of indoor activities withthe cooperation of a local forest union, and 46 employees
from various sites participated in the program and spent a
fun time feeling nature close to them. We plan to continue
our activities in the future so that seedlings planted in thefirst year will grow tall and will create a rich nature.

Definitions*2 Carbon offset is the concept of using afforestation, forest preservation, orother clean energy businesses (purchase of emission credits) tocompensate for the portion of greenhouse effect gas emission associatedwith business activities that cannot be reduced despite the maximum effort

Experiencing Christmas tree making with local residents serving
as lecturers

Highly popular log cutting competition

NKC CSR REPORT 201826

FY2017 Activity Topics
Social Contribution Activities

Detailed Report

Together with
Local Society

Development of the social contribution policy
Social Contribution Policy

Newly
The Way of NKC Thinking
The NKC Group aims to establish a good relationshipwith local society through various contribution
activities for the sake of the present and future andthat both the Company and the society will survive
and develop together. The NKC Group respects
communication with beneficiaries and continues
contributions truly necessary for local society byreturningtheknowledge,
technology
andmanagement resources we have to local society.

established

The NKC Group newly prepared the social contribution
policy, which clarifies the purposes, subjects, and means
with respect to social contribution activities conducted by
the Group, to ensure more systematic and effective
implementation of the activities.
●Basic concept and attitude toward social contribution

NKC Vision
NKC aims to become a company that constantly reinvents
itself and one that its employees are proud to be a part of.

Code of Conduct

NKC Standard

We actively pursue solutions tosocial issues through ourbusiness practices and shallcontribute to the realization ofa society committed tosustainability.

We contribute to the culturaland economic growth of local
society as a good corporate
citizen.

●Local social contribution activities conducted by
the NKC Group (priority fields)
Support for developmentof the youth

Protection of thenatural environment

We provide various
opportunities and experiences
for learning to help children
grow with a bright future andmaximize their potentials.

We conduct activities forenvironmental preservation
including the provision ofenvironmental education so that
we can protect the rich naturalenvironment and build a local
society where both people andnature can coexist.

Improvement of disaster prevention
capabilities and support ofrestoration from disaster damage

27 NKC CSR REPORT 2018

Local participation

We improve local disasterprevention capabilities andactively cooperate with therestoration of areas afflicted bynatural disasters.

We contribute to creation of alively local community byconducting activities that meetthe requests of local residents
as a member of thecommunity.

Support of social
welfare improvement

Support of employees(volunteer activities)

We will support various
aspects such as health care,eating habits and social
participation so that everyone
can live a healthy andprosperous life.

We provide support mainly toinstitutional aspects to develop
an environment that allows
employees to actively
participate in volunteer
activities.

Together with Local Society

Nurturing a Symbiotic AwarenessDomestic activities

Support of employees’ volunteer activities

Results of social contribution activities in Japan13 128
sites

cases

For many years, the NKC Group has been actively engaged
in social contribution activities at each site. The head officebegan summarizing social contribution activities conductedby all sites in FY2013 and uses the data to ensure
systematic implementation of those activities.
■Reception of company visits by junior high and highschool students
The head office and each factory accepts visits of students.
In FY2017, we accepted visits of many junior high and highschool students for various purposes such as visits topotential employers, as part of their field trips or thematic
research.

Group accepts company visits by students■Granting of scholarship and research subsidy
In FY2017, we provided scholarship to 50 students andresearch subsidy to five organizations by means of the
Nakanishi Scholarship Foundation, which started this activity
in 1971. In August 2017, a friendly gathering was held forundergraduate and graduate scholarship students at thehead office of Nakanishi Metal Works Co., Ltd. Scholarshipstudents were presented the overview of the Foundation and
the NKC Group and toured around the Company.

Questionnaire survey on volunteering

Questionnaire
survey conducted to7factories
in Japan.

The NKC Group encourages its employees to participate insocial contribution activities in the capacity of Group
members and intends to support their participation involunteer activities as individuals using their private time.
Since it was necessary for the Company to know how many
employees participate in volunteer activities and what kind of
support they expect from the Company, we conducted aquestionnaire survey. The responses to the questionnaire
revealed that NKC employees are involved in a large variety ofvolunteer activities, centering on participation in local activities,
including participation in organizations supporting children, theelderly people, and people with disabilities. It is indicated thatmany of them expect theCompany to develop appropriate
institutional systems such as thevolunteer vacation system.
Based on the responses to thequestionnaire, we intend to
introduce various support tools
including the incentive schemeor vacation system.
Of 228 case examples reported
in the questionnaire responses,
a few people were picked up
and presented in the featured
Questionnaire survey to employees
pages of this report.
●Result of the questionnaire survey(major comments selected from 228 respondents)

Description of Activity●Participation in volunteer fire corps activities●Cooperation with holding of local events●Voluntary trash-picking●Cooperation with blood donation●Volunteer staff in a marathon●Education and guidance to youth such as
in Boy Scouts activities

Expectation for the Company

Friendship gathering held for university scholarship students●Development of the volunteer vacation system●Depositing volunteer points●Awarding of volunteer activities

NKC CSR REPORT 201828

Toward Greater Contributions to a Sustainable
The NKC Group promotes workplace diversity and work-life balance, with “Monozukuri” treated by the Groupsince its foundation as the core of action, creates rich and innovative techniques, products, and services,
endeavor to fulfill its corporate social responsibility, and continues to make an active social contribution towardsustainable community.

Osaka Tenma Plant“Monozukuri” (manufacturing)treated by the NKC Group

Fitness
Physical and mental healthis the key to successful results
at work.

Day-care center
Family members of ouremployees are also important
stakeholders.

29 NKC CSR REPORT 2018

Cross
Park

Society

NKC logo mark
July 2018, the creationof a new logo.

Rooftop vegetable garden
Greenery at work places and in
the neighborhood

Diversity
Together with
Foreign Employees

Cross Park
As a doorway to new thinking, the Cross Park opened in the Tenma
head office in June 2018 as a space where we and our stakeholders
jointly create innovative products and services. It is one of the newattempts of the NKC Group that celebrates the 100th anniversary of its
foundation in 2024.

NKC CSR REPORT 201830

http://www.nkc-j.co.jp/

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