Integrated Report 2020

SUMITOMO RUBBER GROUP

3-6-9, Wakinohama-cho, Chuo-ku,
Kobe, Hyogo 651-0072, Japan
http://www.srigroup.co.jp/english/

Certified by
Minister ofthe Environment
Sumitomo Rubber Industries, Ltd.
has been certiﬁed as an Eco-First
company by Japan s Ministerof the Environment.

2A・20・8・TI 広 26

Integrated ReportIntegrated Report 2020

C O N T E N T S

The Sumitomo Rubber Group is committed to

Section 1

achieving business growth and making contributions

Overview of the Sumitomo Rubber Groupto society by offering true value in our areas ofbusiness: tires, sports and industrial products.

Tire Business

The Sumitomo Rubber Group and the SRI WAY………………………

3

The Growth Track …………………………………………………………

5

Financial and Non-Financial Highlights…………………………………

7

Top Commitment……………………………………………………………

9

Our New Midterm Plan ……………………………………………………

11

Value Creation Model ………………………………………………………

17

Risks and Opportunities……………………………………………………

19

Value Chain…………………………………………………………………

21

Business Overview …………………………………………………………

23

29
Corporate Governance…………………………………………………… 35

Key Management Resources ……………………………………………

Section 2

CSR Activities of the Sumitomo Rubber GroupCSR Efforts…………………………………………………………………

43

Fiscal 2019 Targets and Results …………………………………………

45

Identifying Materiality and Dialogue with Stakeholders ………………

47

Green (Green initiative )……………………………………………………

49

Ecology (Ecological process)………………………………………………

51

Next (Next-generation product development)……………………………

55

Kindness (Kindness to employees)………………………………………

57

Integrity (Integrity for stakeholders) ………………………………………

59
61

Honors and Certifications from Outside Organizations…………………

Section 3

Corporate Data

Sports BusinessIndustrial andOther Products
Business

Financial Section……………………………………………………………

63

Independent Verification Report/Third-Party Comments………………

67

69
Investor Information ……………………………………………………… 70
Global Network ……………………………………………………………

Editorial Policy

The purpose of this report is to generate new opportunities for dialogue with awide range of stakeholders, by conveying the initiatives we are undertaking toaccomplish sustainable growth for the Sumitomo Rubber Group.
In 2020, we worked to achieve even more extensive disclosure of information.
Information on general efforts by the Company and more detailed information on
activities not included in this report can be obtained from the Company’s website.

Companies

The Sumitomo Rubber Group is pulling together inThis includes information primarily on Sumitomo Rubber Industries, Ltd. and its six
Covered by the factories in Japan but also on some bases and group companies in Japan andoverseas.
Report• “Guidance for Collaborative Value Creation” publishedefforts to fulfill all sorts of social responsibilities and at
the same time contribute to the creation of a sustainable

by the Ministry of Economy, Trade and Industry
Referenced
Guidelines

society with our future-oriented high technical skills andInternational Integrated Reporting Council (IIRC)• “ Sustainability Reporting Standards” published by the Global Reporting Initiative (GRI)• “ Environmental Reporting Guidelines 2018” published by the Ministry of theEnvironment

research and development capabilities and continue to

Period of thebe truly valuable for people, communities and society.

Publishing Date May 2020

ReportThird-Party
Comments1• T he International <IR> Framework published by the

Integrated Report 2020

Fiscal 2019 (January 1, 2019 to December 31, 2019), with some information fromoutside of this period

Comments from an expert are included in order to adopt an objective perspectiveon the report. (See page 68.)
Integrated Report 20202

The Sumitomo Rubber Group and the SRI WAY

Contributing extensively to ourcommunities and to society as a reliable andtrusted global corporate group.

The SRI Way
The Corporate Mission of the Sumitomo Rubber GroupIn order to fulfill our various responsibilities to society as an upstanding
corporate citizen, we at the Sumitomo Rubber Group will continuously strive
to be a reliable and trusted global corporate group that enriches people’s
lives through the creation of new value while at the same time pursuing
greater happiness for all of our group employees and contributing

At the Sumitomo Rubber Group, the SRI WAY serves as the bedrock for our efforts to fulfill our Corporate Mission.
Founded on the longstanding Sumitomo Business Spirit, the SRI WAY comprises key Values and Action Principles for
employees to practice in their day-to-day work toward fulfilling our Corporate Mission and achieving our Corporate Vision.

extensively to both our communities and to society as a whole.
Key Values

Action Principles

Integrity & Soundness

The four key Values enshrined in the SRI WAY-“Integrity & Soundness,” “Communication,” “Setting the Bar Higher” and“Cultivating People”-are intended to answer the fundamental question of “What is important to us?”The SRI WAY is founded upon the Sumitomo Business Spirit, the key business principles that have been passed down
through generations over the 400-year history of Sumitomo.

• Genchi-Genbutsu• Scientific Approach• Continuous Improvement• Take an Interest in Others & Get to Know Each Other

Communication• Face-to-Face Communication• Report, Liaise & Consult at All Levels

Meanwhile, by clearly defining our basic attitudes in keeping with our key Values, the Action Principles set forth in the SRI
WAY are intended to answer the essential question of “How should we act?”• Customer First

Setting the Bar Higher
Cultivating People• Constant Problem Awareness• Set Benchmarks for Better Results• Teach/Learn by Doing• Achieve Results through Teamwork

Sumitomo Rubber Group CSR
The Origins of the Sumitomo Business Spirit

CSR Activity Basic Philosophy

Masatomo Sumitomo, the founder of the Sumitomo Group, left behind writings known as“Monjuin Shiigaki” (“The Founder’s Precepts”), which provide a set of principles andguidelines for merchants to abide by.
His teachings have supported the business operations of the Sumitomo Group throughout
its 400-year history, passed down from generation to
generation in the form of the “Sumitomo Business Spirit,”
whose essence was more recently condensed into the
The Sumitomomodern “Business Principles” of the Sumitomo Group.
Business Spirit
Containing such principles as, “The business activities of
Sumitomo must benefit not only Sumitomo, but must also
· Integrity and Soundness
be of benefit to the nation and to society as a whole,” the· A Company Is Its People
Sumitomo Business Spirit reflects Sumitomo’s strong
sense of duty to society. To this day, the Sumitomo· Esteem for Technology
Business Spirit still forms the basis for the Sumitomo· Mutual Prosperity
Rubber Group’s own Corporate Mission.

Monjuin Shiigaki* (Circa 1650)* Sumitomo Historical Archives

3

Integrated Report 2020

Through our GENKI Activities for the environment and for society, theSumitomo Rubber Group aims to contribute to the realization of a sustainable
society while remaining a corporate group that has earned and continues tomaintain the trust of society at large.

CSR Guidelines*G ENKI stands for the five basic categories of our CSR activities: "Green" (Greeninitiative), "Ecology" (Ecological process), "Next" (Next-generation productdevelopment), "Kindness" (Kindness to employees) and "Integrity" (Integrity forstakeholders). The word "genki" also means "energetic" in Japanese.

Business Principles* (Enacted 1928)

Integrated Report 2020

4

The Growth Track

Fiscal 2019 Sales Revenue ¥893.3 billion

For more than 110 years since the founding of
the Company, we have leveraged our proprietary
rubber technology as a tire maker to expand our field of
business into sports and industrial products, andhelping to achieve a sustainable society.

Business Profit* ¥53.9 billion* Business profit = Sales revenue - (Cost of sales + Selling, general and administrative expenses)

Sales Revenue / Net Sales■ JGAAP■ IFRSNet Sales¥114.0 billion
Operating income¥7.2 billion

Established

1909
1900

▶

‌J.B. Dunlop
commercialized theworld’s firstpneumatic tire.

‌Full business tie-up
with The Ohtsu Tire &Rubber Co., Ltd.

‌Commenced operationof the Kobe Factory.
‌British Dunlop Rubber
Company established Japan’s first modern
rubber factory and commenced its operation.

1913▶

The world’s first pneumatic tire▶

‌Developed Japan’s first tubeless tire.

1963
▶

1983

▶

‌ tarted production of tires.
S
Produced the first Japanese-made tire.

‌ tarted production of Japan's first golf andStennis balls.

Integrated Report 2020▶

▶

‌Acquired European tire business from the
British Dunlop Rubber Company

1984‌Sumitomo assumed management of
the Company.
Changed name to Sumitomo Rubber
Industries, Ltd.

1930

5

Great EastJapan
Earthquake‌ ewly developed “Digi-Tyre”
Nusing digital rolling simulation
technology.

2003
▶

▶

‌Merged with The Ohtsu Tire &Rubber Co., Ltd.

2012
▶

2015

‌ eleased “MIRAIE” Vibration Control
R
Units for Detached Housing.

‌Acquired six plants in the U.K., Germany andFrance as well as Dunlop Tyre Technical Divisionin the U.K.

‌ eleased first-generation
R“XXIO” golf clubs and golf balls.

▶

▶

‌Acquired Cleveland Golf.

2008
▶

2013

‌ eleased “ENASAVE 97,” a 97%
R
fossil resource-free tire.

ENASAVE 100‌ eleased “ENASAVE 100,” aR
100% fossil resource-free tire.

2014▶

‌ eleased “ENASAVE NEXT,” tire
Rwith 50% less rolling resistance.

2009
1986
▶

DUNLOP65(released in 1935)

▶

2007
▶

‌Acquired Dunlop
Tire Corporation Signing ceremony with the British
Dunlop Rubber Company
in the USA.

▶

‌Company’s 100th anniversary▶

‌Completed the Tire Technical Center.

‌ nnounced the “SMART TYRE
A
CONCEPT” for tire technology
development

2018▶

‌Integrated Sumitomo Rubber Group's
sports business.

▶ Celebrated 130th anniversary since thecommercialization of pneumatic tires.

2019
▶

2015
First-generation XXIO

‌ ompleted the New Materials
C
Development Technology “ADVANCED
4D NANO DESIGN”

2017‌Formed alliance in the tirebusiness with The Goodyear Tire
& Rubber Company in the USA.

2000

▶

‌Spun off sports business.

1999
1954

1909

The first Japanesemade tire

Bankruptcy
of Lehman
Brothers

▶

▶

▶

Asian
financialcrisis1998

1981

J.B. Dunlop▶

Great Hanshin
Awaji
Earthquake

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

1888▶

Bursting of the
bubble economy

Plaza Accord▶

‌ issolved allianceDagreement with The
Goodyear Tire & Rubber
Company in the USA.

‌L aunch of new“ENASAVE NEXT III”
fuel-efficient flagship tireusing Performance
Sustaining Technology
from the SMART TYRE
CONCEPTENASAVE NEXT III
Integrated Report 20206

Financial and Non-Financial Highlights

Main Financial Indicators (Fiscal 2019)
Industrial and Other Products Business 4.6%
Sports Business
9.5%

Sales Revenue

¥

893.3

billionNorth America
17.5%Japan 36.8%

Compositionof SalesRevenue by
Business
Segment

0.1% decrease y-o-yCompositionof SalesRevenue by
RegionTire Business
85.9%

Europe

¥
ROE

ROA

2.6%

44.5%

Business Profit* (Ratio)■■ Tire Business ■■ Sports Business■■ Industrial and Other Products Business■■ Tire Business ■■ Sports Business■■ Industrial and Other Products BusinessBusiness Profit Ratio(Billions of yen)

877.9
800.0

798.5

894.2

893.3

756.7

(%)

100.0

20.0

60.0

400.0

40.0

200.0

20.0

0

2015

2016

2017

2018

0

2019 (FY)

78.9

74.9

15.0

67.0
9.9

60.7

9.9
7.6

53.9
10.0

6.8

2016

2017

2018

times

0.0

2019 (FY)Net Income Ratio
(%)

12.0

72.0

47.0
41.4

40.0

5.4

5.5

0

1.4
2016

2017

2018

2019

ROE*1 and ROA*2 (business profit base)
ROE■■ Total Assets
Ratio of equity attributable to owners of parent(%)

1,200.0

80.0

800.0

1,018.3
932.4
45.3

1,002.4

1,035.5

897.6
47.8

20.0

45.2

45.7

300.0

15.0
9.7

10.0

44.5
40.0

(Times)

2.0

8.4

8.2

7.0

0.6
100.0

6.0

1,036

1,073

1,095

10,000

786

0

2016

2017

2018

0.0
2019 (FY)

9,199

9,156

2017

2018

2019

6,000
4,000

200
50

0

(FY)

2,000

0

* Figure for fiscal 2016 increased substantially due to theinclusion of six overseas bases (Brazil, South Africa,
United States, Turkey, Switzerland and Germany).

0

2015

2016

2017

2018

2019

(FY)

2015

2016

2017

2018

2019

2015

2016

(FY)

0.5

0.6

■■ Japan■■ Overseas

40,000

Number of employees using
childcare leave system■■ Women

36,65033,1971.0
0.6

Number of employees in Japan andoverseas

37,852

39,233

Number of complaints andwhistleblowing filed by employees to
Corporate Ethics Helpline (Compliance■■ MenConsultation office)(People)(Cases)40

30

33,792

33

23

29

30

30,000

0.7

20

23
0.5

20,00020

10,000

10

25

20

14

16

13

13

2016

2017

10
0

2015

9,183

400

20.0
200.0

8,745
7,849

8,000

600

(People)

1.5

283.5

204.2

200.0
5.2

273.5

261.9

10.6
7.9

5.0

400.0

D/E ratio

325.5

60.0

600.0

■■ Interest-Bearing Debt

400.0

17.5

1,011

■■ Overseas(Cases)Interest-Bearing Debt / D/E ratio(Billions of yen)(%)(Billions of yen)

1,000.0

ROA (Business profit base)

800

0.0

(FY)

Number of Japanese and foreign
patents■■ Japan

1,000

174.5

3.0

* Business profit = Sales revenue - (Cost of sales + Selling,
general and administrative expenses)

Total Assets / Ratio of equity
attributable to owners of parent

153.9

161.1

170.6

100
12.1

2015

3.2%
1,200

165.5

304 million¥* A l l t y p e s o f d o n a t i o n s , C S R f u n d s u b s i d i e s , s o c i a l
c o n t r i b u t i o n a c t i v i t y ex p e n s e s, p e r s o n n e l ex p e n s e s
associated with volunteer participation (estimated), expenses
for access to facilities (estimated)(kt-CO2e)(10,000 trees)

6.0

20.0

Social contribution
activity expenses(CO2 emissions)

150
36.2
4.1

Integrity for stakeholders

Global environmental data

Trees planted(fiscal year cumulative basis)

9.0

85.7%

Employee turnover ratio(Non-Consolidated Basis)

200

9.0

Employees at ISO 14001 certified
sites as percentage of all employees(Japanese and overseas group)m3

Kindness to employees

tire factories certified

80.0

60.0

reduction

Japan and overseas All12
domestic and overseas(Billions of yen)

6.0
5.0

2015

0.7

■■ Net Income

326,000

IATF 16949 (Automotive Quality
Management System Standard)

Profit Attributable to Owners of Parent
company (Ratio)(Billions of yen)

80.0

600.0

D/E ratio

5.2%

Sales Revenue

1,000.0* In addition to the above, 90,000 seedlings were provided(2013-2019)

Pursuit of quality

Ratio of Equity Attributable to Owners of Parent to Total Assets

billionEcological process

Reductions in water use(y-o-y, Japanese and overseas group)

1,750,000

Asia 18.9%

Profit for the Period Attributable to Owners of Parent

1,035.5

Ecological process

Cumulative number of trees planted(Japanese and overseas group)

decreasey-o-y53.9 billion 11.2% decrease¥ 12.1billion 66.7% y-o-yTotal Assets

Green initiative

14.5%

Others 12.3%

Business Profit¥

CSR-Related Indicators (Fiscal 2019)

Overseas Sales Ratio 63.2%

2.6
2015

2016

2017

2018

2019 (FY)

0

2015

2016

2017

2018

0.0

2019 (FY)*1 R OE = (Net income / Average of total equity at the
beginning and end of the fiscal year) x 100*2 R OA = (Business profit / Average of total assets at the
beginning and end of the fiscal year) x 100

0

2015

2016

2017

2018

2019

(FY)

0

2015

2016

2017

2018

2019

(FY)

0

2015

2018

2019 (FY)

Note: Regarding consolidated performance, from the fiscal 2016, the Company has switched from conventional Japanese standards to the application of international financial reporting standards(IFRS). Figures shown for fiscal 2015 have been restated to comply with IFRS standards.

7

Integrated Report 2020

Integrated Report 20208

Top Commitment
accolades, including the “Grand Prize for the Global Environment
Award” and a “Nikkei Global Environmental Technology Award.” In2018, we unveiled “SMART TYRE CONCEPT,” putting forward ourbold new vision for the future of tires. The very next year, we released“ENASAVE NEXT III,” tires that incorporate Performance Sustaining
Technology developed in keeping with our visionary New Technology
Development Concept.

Entering New Business Fields
With the aim of growing our overall business, we have been actively
expanding into new markets and new fields of business. As part ofthese efforts, we have aggressively expanded our OE supply businessto gain market share among overseas automakers, particularly inEurope and North America. As a result, our group’s overall OE tire
sales volume increased by 37% between 2012 and 2019. Meanwhile,in our Industrial and Other Products Business, our flagship “MIRAIE”
Vibration Control Units for Detached Housing received widespreadacclaim for their ef fectiveness in protecting buildings during
ear thquakes in Kumamoto and Hok kaido, which led to theirsubsequent adoption at Kumamoto Castle and Higashi Honganji
Temple. Thanks in part to the growing trust placed in them, sales of

Sumitomo Rubber Industries, Ltd.
President & Representative Director

Satoru Yamamoto

2. Our New Midterm PlanFirstly, my heart goes out to all of those who have lost their lives to the novel coronavirus. I would like to take this opportunity
to express my deepest condolences to all of the families who are now grieving as a result of this terrible disease. At the sametime, I pray for the swift recovery of each and every person currently afflicted with COVID-19. I would also like to take thisopportunity to express my heartfelt gratitude and admiration for all of those who are working tirelessly to care for the sick andprevent the further spread of COVID-19 on the front lines of medicine all over the world. The Sumitomo Rubber Group started
out as the very first modern tire factory in Japan, founded in 1909 as the Far East manufacturing base of the British Dunlop
Rubber Company. In the years that followed, as Japan rapidly industrialized and then achieved unprecedented economic
growth in the post-war era, our group has also vastly expanded in terms of both the scale and scope of our businessactivities, bringing us to where we are today as a global corporate group. In our over 100 years of history, the Sumitomo
Rubber Group has overcome various crises and adapted to respond to numerous changes in the business environment.
Through all of this, however, we have never wavered in putting the health, safety and wellbeing of our customers, our business
partners and our employees first and foremost in word and deed.
   Moving forward, in order to continue to adapt and grow our business in the midst of a constantly changing businessenvironment, we will not only work to continuously reinforce our corporate governance system, but will also strive to cultivate
the next generation of talent, who will play an essential role in driving the future development of our business. At the sametime, we will continue to make active contributions to local communities around the world so that we may enhance both theeconomic value and the societal value of our group.

1. Looking Back Over VISION 2020
Formulated in 2012, our VISION 2020 set for th a roadmap for
expanding our business, with a focus on overseas markets inparticular, toward achieving our stated goal of becoming a True Global
Player. Our groupwide efforts to accomplish VISION 2020 wereprimarily driven by three key Growth Engines: “The Challenges of New
Markets,” “An Insatiable Drive for Innovation” and “Entering New
Business Fields.”~Building a Framework for Global Business~
North American markets, which in turn led to the rapid acceleration of
our global business expansion. Meanwhile, we took full advantage of
our new factory in Turkey (which began manufacturing operations in2015) to increase sales in European markets. In addition, we alsoacquired a major tire retail chain in the United Kingdom: MicheldeverTyre & Auto Services. As a result of these developments, we have hadgreat success in increasing the market share of our FALKEN brand inEurope.

The Challenges of New Markets
Toward building a global network for manufacturing and sales, theSumitomo Rubber Group spent the last decade establishing new
operational bases all over the world. On the manufacturing side, webuilt new factories in Hunan (our second factory in China) and Brazil
and acquired an existing factory in South Africa. On the sales side, weestablished new sales companies in India and Australia and acquired
the rights to use the DUNLOP trademark throughout all of Africa. The
year 2015 marked a major turning point for our group. The dissolutionof our Global Alliance with the American Goodyear Tire & Rubber
Company resulted in our acquisition of a factory in the United Statesand gave us much greater freedom to sell our tires in European and

9Integrated Report 2020

Insatiable Drive for Innovation
Over the past decade, the Sumitomo Rubber Group has taken fulladvantage of proprietary technologies that expand the possibilities ofrubber in order to bring to market various new products that better
fulfill both economic and societal needs. In 2013, we developed andbrought to market “ENASAVE 100,” our groundbreaking 100% fossil
resource-free tires made from all-natural renewable resources. In
2016, we followed this up with the release of “ENASAVE NEXT II,” fuelefficient tires developed using our “ADVANCED 4D NANO DESIGN”
N e w M a te r i a l s D e v e l o p m e n t Te c h n o l o g y. T h e s e a n d o t h e renvironmentally friendly technologies have won us numerous

our vibration control units increased by 192% between 2012 and 2019.
In addition, we have also greatly expanded our Rubber Parts for
Medical Applications Business in major markets in Europe, acquiring
the Swiss medical rubber products manufacturer Lonstroff AG in 2015
and launching a new factory in Slovenia in 2019.
   Through the initiatives undertaken as part of VISION 2020, ourgroup has succeeded in building the necessary framework to becomea truly global business.
   At the same time, however, there are still some issues to work out
when it comes to our group’s profitability. In particular, our newly built
factories in Brazil and Turkey are still in the process of ramping up
production, while our newly acquired factories in the United Statesand South Africa are still struggling with productivity issues, meaningthat these factories have yet to fulfill their full potential. Although we
did not achieve the performance targets set forth in VISION 2020, we
did succeed in vastly expanding the scope of our business activities
and building a global network for manufacturing and sales. Moving
forward, we will endeavor to improve our overall business performanceby maximizing the returns on our investments to date while moving
forward with new initiatives with the aim of adapting to various ongoingchanges in our business environment.

~Further Enhancing Our Economic Value & Value to Society~

Our New Midterm Plan is a comprehensive business plan that aims tofurther enhance our corporate value between now and 2025 bypushing forward with new initiatives that, while firmly grounded in ourefforts up until now, will also look ahead to a brighter future.
   Our New Midterm Plan aims to build on our previous efforts byfully harnessing our “Insatiable Drive for Innovation” to advance our
SMART TYRE CONCEPT to the next level while maximizing the resultsthat we reap from the global business framework that we have built up
through taking on the “Challenges of New Markets” and “Entering New
Business Fields.” In addition, in order to ensure the successful
implementation of our New Midterm Plan, we have launched a newgroupwide project to promote various initiatives that aim to reinforce
the framework of our organization and generate greater profits. We
call this project the “Be the Change” Project to Reinforce theFoundations of Our Business. Meanwhile, we will continue striving toenhance both our group’s economic value and our value to society
through ongoing efforts driven by three key Value Drivers: “Developing& Promoting Sales of Advanced Products,” “Creating New Value” and“Promoting ESG Management.”“Be the Change” Project to Reinforce theFoundations of Our BusinessIn the initial stage, the “Be the Change” Project will focus on initiatives
to reinforce our organizational framework as we build up the necessary
momentum to break through barriers to further growth. Having thus
equipped ourselves with the strength to get things done and see things
through, we will then be ready to move on to the next stage of thisproject: initiatives to generate greater profits. We have already initiatedtalent management and global personnel development activities aspart of our efforts to reinforce the framework of our business, as wellas activities to improve cashflow and cost effectiveness as part of ourefforts to generate profits.

3 Key Value Drivers【Developing & Promoting Sales of Advanced Products】

Even as global economic development brings increases in worldwide
demand, it also drives increasingly fierce competition in markets
throughout the world. Nevertheless, the Sumitomo Rubber Group willcontinue working to enhance our corporate value by developing andpromoting sales of advanced products that incorporate second-tonone technologies throughout our Tire Business, our Sports Businessand our Industrial and Other Products Business. In our Tire Business,
we will develop and promote sales of advanced tires with a focus on
SUVs while also working to increase our share of OE fitment in theluxury vehicle market. In our Sports Business, we will work to increase
sales in the world’s largest market, North America, by bringing top-notch products to market. In our Industrial and Other Products
Business, we will expand manufacturing and sales of rubber parts for
medical applications in Europe in order to meet growing demand forthese products coinciding with the rapid growth of the overall
healthcare industry.

【Creating New Value】

As the automotive industry is transformed by new innovations such as
CASE and MaaS, the Sumitomo Rubber Group will continue to provide
new value by further advancing our SMART TYRE CONCEPT to thenext level and beyond in order to continue bringing advanced products
and services to market. We believe that the Mobility Society of the
Future will have a need for tires that provide new types of value, such
as Maintenance-Free Tires, Trouble-Free Tires and Tires with Reduced
Environmental Impact. In order to meet the needs of autonomous
driving and make ride-sharing even more convenient, we are pushing
forward with the development of basic technologies on various fronts,
advancing R&D related to rubber properties, tire structures, tire
management systems and so forth. At the same time, we are also
aiming to create even greater value by strengthening cooperative
relationships with our business partners and taking active part incollaboration that brings together industry, government and academia.

【Promoting ESG Management】

In recent years, Sustainable Development Goals (SDGs) have been
receiving more and more attention. Meanwhile, our company has long
been actively engaged in ef for ts that aim to find solutions toenvironmental and societal issues with an eye toward making oursociety more sustainable. For example, we have long been striving to
make our business activities more environmentally friendly by offering
a full lineup of fuel-efficient tires, not to mention “ENASAVE 100,” ourrevolutionary tires made from 100% fossil resource-free, all-natural
raw materials. At the same time, we have also been working tocontribute to society outside of our business through activities
involving tree planting, efforts to preserve biodiversity and othersocially conscious volunteer activities.
   Of course, all of these activities are fully in line with the Sumitomo
Business Spirit, which has been passed down through generations overthe 400-year history of Sumitomo. Moving forward, we will continue
striving to create new value by engaging in business activities thatemphasize both “Enhancing Our Economic Value” and “Enhancing Our
Value to Society.” In tandem with these activities, we will also continue
to promote ESG Management while working to contribute to theachievement of SDGs toward realizing a sustainable society – a society
where everyone can live and work in safety and with peace of mind.

Integrated Report 2020

10

Our New Midterm Plan

Outline of Major Points of Our
New Midterm Plan

3 Key Value Drivers
Allow us to explain these key Value Drivers within the context of eachour main lines of business.

Value Driver ①

Developing & Promoting Sales of Advanced Products

Value DriverToward Further
Enhancing Our
Economic &Societal Value① Developing & Promoting Sales ofAdvanced Products② Creating New Value③ Promoting ESG Management

Tire Business
Sales

Development

Promoting Global Sales of Top-Notch Products

Advancing Our Second-to-None Technologies through New
Materials Development & Structural Design to Achieve
Superior Fuel-Efficiency and Wear Resistance Performance■ Increasing OE Fitment for Luxury Vehicles■ Striving for Industry-Beating Sales Growth in Major Markets ofEurope, North America, Asia, Etc.
● Advanced Tire Sales Plan

■ Large-Size Tires(Unit Sales Basis)

Initiatives to Generate ProfitsGroupwide Project to Reinforce theFoundations of Our Business“Be the Change”

Initiatives to Reinforce Our
Organizational Framework

Challenges of New Markets

Maximizing Results from Our Global

Entering New Business Fields

Business Framework

EuropeOver 150 %

Japan

2019

2025

Product Development
Performance You Experience on the Road + Performance You
Can See with Your Eyes

2020

2025

Our New Midterm Plan aims to build on our previous efforts by fullygroup’s economic value and our value to society through ongoingharnessing our “Insatiable Drive for Innovation” to advance ourefforts driven by three key Value Drivers: “Developing & Promoting

SMART TYRE CONCEPT to the next level while maximizing theSales of Advanced Products,” “Creating New Value” and “Promoting

results that we reap from the global business framework that we

ESG Management.”

have built up through taking on the “Challenges of New Markets”   Our New Midterm Plan also sets forth ambitious financialand “Entering New Business Fields.”

targets: to achieve Sales Revenues of at least 1 Trillion JPY,   At the same time, we will also be pushing forward with newBusiness Profit of at least 100 Billion JPY, an ROE of at least 10%groupwide initiatives to reinforce the foundations of our business as

and a D/E Ratio below 0.5 by 2025.

part of our “Be the Change” Project.

   The three key Value Drivers that will drive our efforts to achieve   This project will first focus on initiatives to reinforce ourour New Midterm Plan are explained in detail in the following pages.

organizational framework, laying the necessary groundwork for us
to break through barriers to further growth while also increasingly
shifting our focus toward initiatives to generate profits.
    Meanwhile, we will continue striving to enhance both our* T he details listed herein were first announced in February of 2020. As
such, the contents of these pages do not account for the impact of thenovel coronavirus (COVID-19) pandemic.

“Be the Change” In order to ensure the successful implementation of our New Midterm Plan toward achieving our goals for the future, we havelaunched a new groupwide project to reinforce the foundations of our business. We call this project the “Be the Change” Project.
   This project will first focus on initiatives to reinforce our organizational framework, thereby laying the necessary groundwork for us to breakthrough barriers to further growth. Having done so, we will then be ready to move on to the next step: turning our focus toward initiatives to generate
greater profits through efforts to enhance our profitability across organizational boundaries.

11

Integrated Report 2020

USA

■ SUV Tires

In our Tire Business, we will work to increase sales of advanced
tires with a focus on meeting the growing demand for highperformance SUV tires, etc.

To the Next Level

Insatiable Drive for Innovation■ Developing New Products to Respond to Local Market Needs &Ever Higher Performance Demands■ In addition to safety, riding comfort and other performance traits
that you can only experience on the road, we are also taking fulladvantage of second-to-none technology to provide a performancedifference that you can clearly see with your own eyes.
In addition to achieving the highest rating for wet grip (i.e. “a”) under Japan’s
tire labeling system, our latest tires also suppress performance degradationthat normally occurs due to wear and tear.
(Reduces Braking Distance by 0.7 Vehicle Lengths*1)
Decline in Wet
Braking Performance

14■ Fuel Efficiency■ Quiet Running■ Long Life Performance■ Road Handling■ Design

Further Advancing Our Second-to-None Technologies to Develop
New Products for Market. We are revamping our Technical Centers
in Japan, Europe and the USA while putting them to full use in thedevelopment of new products.

Manufacturing
Augmenting Our Capacity to Supply Advanced Tires■ Pushing Forward with Efforts to Stabilize Production Output &Meet the Supply Needs of Growing Sales of Advanced Tires
Achieving Stable
Production at Our
Factories in the USA &South Africa

Increasing Capacity at
Our Factories in the USA& Turkey with a Focus on
Advanced Tires

Increasing Output of
Advanced Tires at Our
Factories in Japan &AsiaSouth Africa Factory (Tires)

Turkey Factory (Tires)

Advanced Tires%
Improvement*2

Braking Performance on Wet Road Surface (Index)
100■H igh-Speed Steering
Stability■ Wet Grip Performance

90

VE304
24.8%

80
70
Wear Rate
100 (%)

28.7%
VE303

0
25
50
80
(Our Previous
VEURO Model)*1: Braking Distance at 100km/h*2: (Test Conditions) ●Tire Size: 225/45R18 95W XL ●Tire Pressure (kPa) 250 ●Test
Vehicle Displacement: 2,480cc ●ABS (Y/N): Y ●Test Velocity: 100km/h ●Road
Surface: Asphalt Braking Road (Water Depth: Approx. 1.0mm) ●Drive System: FR ●Test Setup: The test tires were driven for 18,000km and then checked to ensure that
their wear rate had not yet reached 80%, after which they were buffed around theirmain grooves to a uniform radius (i.e. groove depth) equivalent to 80% wear. We thenperformed wet brake testing on the tires prepared in this manner (i.e. 80% worn tires)
alongside brand-new tires for comparison in order to determine the degree of
performance decline at a wear rate of 80%. ● Test Method: Full-Stop Testing in
Accordance with“Passenger Car Tire Brake Testing Methodology”(Published by
JATMA)

While working to achieve stable production output at our factories
in the USA and South Africa, we are also working to meet the
supply needs brought about by growing sales of advanced tires byaugmenting supply capacity at our factories in the USA and Turkey
as well as our factories in Japan and the rest of Asia.

Released in March 2020, our latest VEURO tires incorporate aworld-first technical feat – Tire Performance You Can See.

Integrated Report 2020

12

Our New Midterm Plan

Sports Business

Value Driver ②

Creating New Value

Expanding Our Sports Business Globally

MaaS

We will continue striving to create the types of value■ Increasing Sales of Golf Balls & Clubs in the World’s Largest Golf
Market: North America

sought in tires by the upcoming Mobility Society of the▶ Taking Full Advantage of Our R&D Bases in Japan & USA ● Golf Equipment (Balls, Clubs)
Global Market Breakdown by▶ Introducing Top-Notch Products Incorporating Proprietary
Region (In-House Estimate)Technologies

Since absorbing the former Dunlop Sports
Co. in 2018, we have been pushing forwardwith groupwide ef for ts to expand ourSports Business. In our core Golf Business,
we will continue working to revamp our

Othermarketing capabilities to better promote

North
America

Europesales in the world’s largest golf market:
North America.

Japan

Future by advancing our concept for the development

Creating Economic &Societal Valueof tires and peripheral ser vices – SMART T YRE
CONCEPT – to the next level while adapting to theneeds of CASE, MaaS and other new innovations thatare transfor ming the automotive industr y,providing new solutions services that fully
utilize cutting-edge digital technology

Advancing Our SMART TYREENASAVE CONCEPT to the Next Leveland more.

Technology■ Expanding Our Racket Sports Business (with a Focus on Tennis)▶ Promoting Sales of Tennis Balls in Europe▶ Taking Advantage of Advanced Tennis& North America
DUNLOP ATP*
*ATP: Association of
Tennis Professionals

In our Tennis Business, our tennis balls were

Racket Technology to Develop
Proprietary Products

adopted as the official tournament balls of

Accelerating Expansion into Squash &Badminton, Etc.

success, we are now planning an aggressive

the Australian Open, where they were very

Convenience

push to promote sales in European andCore Technologies

At the same time, we will also be taking
advantage of the proprietary technologies

Over 130 %Sales Plan

ComfortNorth American markets as well.

Squash● Tennis Ball

Development Concept for Tires & Peripheral Services

Safe &
Sound

well received. Bolstered by this recent

Australian Open

CASE

ECO

SafetyTechnologythat we have developed over the years to

Types of Value Sought in Tires by New Mobility Society

expand our Racket Sports Business by(Sales Value
Basis)

2019

Maintenance-Free

branching out into squash, badminton and2025

Tennis Table Paddle

Industrial and Other Products Business
Vibration Control Business

Tires Providing Solutions for
Safety & Peace of Mind

Tires Incorporating Life Cycle
Assessment Thinking

Smart Tires

Pressure Monitoring Service,
Maintenance Support Service

Fuel Efficiency Technology,
Shift to Sustainable Raw Materials■ Transferring Our Rubber Parts for Medical Applications Business

Overseas■ Promoting Sales of MIRAIE■ Promoting Sales of Vibration

Vibration Control Units for
Detached Housing

Control Devices for Buildings
with a Focus on Southeast
Asia

Reduced Environmental Impact

Tires Compatible with
Autonomous Driving

Rubber Parts for Medical Applications BusinessJapanese Domestic

Trouble-Freeother racket sports.

Badminton

HQ to the Key EU Market to Better Approach & Promote Sales to
Major European Pharmaceutical Companies

Tire
PressureRoad
Conditions

Tire
Load

Tire
Wear

Cloud

■ Promoting Sales of Advanced Products■ Taking Full Advantage of Our Factories in Switzerland & Slovenia● Rubber Parts for Medical Applications
Global Market Breakdown by Region(In-House Estimate)

Regular
Maintenancecontrol unit

Wheel
Speed Signal

Vehicle (Driver)

ライフサイクルアセスメントの考え方をProduction
織り込んだタイヤRecycling

VehicleManagerRaw
Materials
Warning
Indicator

Europe
Japan

Alert

安全・安心なソリューションを提供できるタイヤ

スマー
トタイヤ
ABS/ESC

Pressure
Drop

DWS
software

Other

Usage

Transport
Pressure/Temperature/
Location Data

SENSING CORE
Performance Sustaining Technology

Switzerland

Collaboration with Other Companies

Developing Tires with Reduced
Environmental Impact

Slovenia● Vibration Control BusinessOver 160 %Sales Plan (Sales Value Basis)

2019

13

Integrated Report 2020

2025

We will continue to provide the new types of value sought in tires   When it comes to “Tires Providing Solutions for Safety & Peaceby the upcoming Mobilit y Societ y of the Future, includingof Mind,” we will work to further advance our “Deflation Warning

Maintenance-Free Tires, Trouble-Free Tires and Tires with Reduced

System” (which is already available on the market) while expanding

Environmental Impact.

this and other technologies to provide entirely new types of service.

   We will continue working to realize “Tires Compatible with   When it comes to “Tires Incorporating Life Cycle Assessment,”

Autonomous Driving” through the advancement of new technologies

we will continue working to develop tires with a lower environmental

that allow tires to function as sensors, new materials that allow tires

impact throughout their life cycles, from production to usage andto maintain their original performance for longer and more.

even disposal.

Integrated Report 2020

14

Our New Midterm Plan

Value Driver ③

Promoting ESG Management
Passed down through generations over the 400-year history of

realization of a low-carbon society.

Sumitomo, the Sumitomo Business Spirit still lives on throughout the  Toward these ends, we will engage in even more active effortsbusiness activities of the Sumitomo Rubber Group.

to advance our SMART T YRE CONCEPT and promote our

The Sumitomo Business Spirit includes the idea that “a company“Sustainable Natural Rubber Policy,” which aims to achieve

should appreciate the importance of not only economic value, butsustainable procurement of natural rubber (one of the mostalso societal value.”important raw materials in tires) for the sake of future generations.

   In our Tire Business, the Sumitomo Rubber Group will continue  In our Sports Business (Golf, Tennis, Fitness, etc.), we will

working to provide tires that feature superior performance in terms

contribute to the achievement of SDGs by working to promoteof safety and fuel efficiency, manufactured using raw materials that

greater physical and mental health for people of all ages.

feature reduced environmental impact, alongside peripheral services  In our Industrial and Other Products Business, we willthat bring together tires and various digital tools.

contribute to the achievement of SDGs through such products as  T h ro u g h th e s e ef fo r ts, we w i l l a l s o c o ntr i b u te to th e

our rubber parts for medical applications and vibration control

achievement of SDGs by striving to ensure greater safety for all, todampers, working to promote greater health for all by supporting thepromote sustainable supply chains and to improve energy efficiency

field of medicine while aiding in the creation of safer cities that are

toward combating climate change and taking a step toward themore resilient to natural disasters.

Contributing to the Achievement of SDGs

Efforts to Enhance Societal ValueENASAVE NEXT III

We are working to develop tires that fulfill
t h e s a f e t y, e n v i r o n m e n t a l a n d o t h e r
performance requirements of the Mobility
Society of the Future by fully harnessing our
3 Core Technologies: technology that
supports safety, technology that contributes
to the environment, as well as the simulation
and analysis technology that supports ouroverall R&D efforts.
   At the same time, we will strive to create
new Economic Value and Societal Value by
adapting to the needs of CASE, MaaS andother new innovations that are transforming
the automotive industry while providing new
solutions services that fully utilize cuttingedge digital technology and more.

Advancing Technologies toProvide Lightweight Clubs withHigh COR
The Sumitomo Rubber Group hopes toenable more and more people to enjoy
sports while maintaining good health for
longer. And so, we have been pushing
forward with the development of lighter golf
clubs that feature a higher COR (coefficient ofrestitution) so that even golfers with declining
physical strength can still swing the club andachieve carry distance with relative ease.

ESG (Environmental, Social, Governance)
Economic Value

SMART TYRE CONCEPTSNR (Sustainable Natural
Rubber) Policy
With global demand for tires expected to
grow alongside the development of themobility societies of the future, there is now
growing concern about the myriad
problems that may arise from increasedd e m a n d f o r n a t u r a l r u b b e r, s u c h a s
e nv i ro n m e nta l d e str u c ti o n c a u s e d by
defore station in producing re gions orhuman rights violations associated withpoor working conditions along the supply
chain. In response to these concerns, theSumitomo Rubber Group has established
our ow n “Sustaina ble Natural Rubbe r
Policy” with the aim of making natural
rubber a sustainable resource for the future.

Developing Reduced Odor
Natural Rubber & Improving
Productivity
Af ter identif ying the factors that cause
natural rubber to emit an odor, we havesuccessfully developed “Reduced Odor
Natural Rubber” at our group’s rubber
plantation in Thailand. At the same time, we
are also actively engaged in research toaccelerate the growth of rubber trees andincrease yields, taking full advantage of our
in-house rubber plantation to promote
productivity improvements on the supply
side.

Sports Business~Toward the Realization of a Sustainable Society~

Efforts to Enhance Economic Value

Tire BusinessSocietal Value

Sustainable Growth & Value Creation

High-Durability Tennis Balls
H a r d te n n i s b a l l s c a n b e c o n s i d e r e dconsumable goods, as the air inside oftennis balls gradually leaks out during use,changing how the balls bounce over time.
By developing and manufacturing tennis
balls that suppress air leakage, we aim to
reduce the environmental impact of ourtennis balls by reducing the frequency withwhich they are disposed of and replaced.

Preventive Care through
Functional Training Service
As part of our Wellness Business, we offer a
range of preventive care programs forseniors, including exercises to prevent falls
and the onset of dementia, through our“Wellness Park” day service, which provides
exercise regimens with a focus on
maintaining motor skills and other forms offunctional training. Through these programs,
we are contributing to improvements in QOL(quality of life) for senior citizens.

Sumitomo Business Spirit“The business activities of Sumitomo must benefit not only Sumitomo, but must also be of benefit to the nation and to society as a whole.”

Promoting Efforts to Achieve SDGs through Our Business Activities
Tire Business◦ SMART TYRE CONCEPT◦ SNR (Sustainable Natural Rubber)
PolicyContributing to the
Achievement of SDGs

◦ Drafting Greenhouse Gas Emissions
Reduction Targets toward Full
Participation in the SBT Initiative

Sports BusinessContributing to Society

Industrial and Other Products Business◦ Advancing Technologies to Provide
Lightweight Clubs with High COR◦ High-Durability Tennis Balls◦ Preventive Care Services for Seniors◦ Nationwide Tire Safety Inspections◦ Joint Projects with UNESCO Japan◦ CSR Fund◦ MIRAIE Vibration Control Units for
Detached Housing◦ Rubber Parts for Medical Applications

Basic Policy Measures◦ Instilling the Sumitomo Business Spirit◦ Cultivating Global Talent◦ Promoting Work Style Reform◦ Promoting Health & Productivity
Management

Governance / Talent Cultivation / Workplace Environment

15

Shared Groupwide Efforts

Integrated Report 2020

Industrial and Other Products Business
MIRAIE Vibration Control Units for Detached Housing

Rubber Parts for Medical Applications

MIRAIE efficiently absorbs the vibration caused by earthquakes
thanks to our proprietary High-Damping Rubber Technology, whichuses a specialized rubber compound designed to rapidly convert
seismic energy into heat energy.

Bringing together rubber technology developed over our many
years in the business and clean technology, the Sumitomo RubberGroup provides high-quality rubber parts for medical applications
to support greater health and wellbeing for all.

SharedGroupwide Efforts

Basic Policy
Measures

Drafting Greenhouse Gas Emissions Reduction Targets
toward Full Participation in the SBT Initiative

Governance / Talent Cultivation / Workplace Environment

As part of our efforts to combat global warming, we are now in the process ofdrafting new targets for reducing greenhouse emissions toward gaining
recognition as a full participant in the Science Based Targets (SBT) Initiative.
By working to achieve even more ambitious greenhouse gas emission
reduction targets than the figures that we have promised to the Ministry of
the Environment as a designated “Eco-First Company,” we will continue tocontribute to the realization of a low-carbon society to stem the tide ofclimate change.

Spirit● Cultivating Global Talent● I nstilling the Sumitomo Business*1● Promoting Work Style Reform● P ro m oti n g

H e a l th & Pro d u c ti v i t yManagement*2*3*1 We were certified as one of the 40 companies in the “2020 Health & Productivity Stock Selection Program,” where companies that make strategic efforts to consider employee managementfrom a managerial perspective are jointly selected and announced (in principle, one company from each industry) by the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange.
*2 We were certified in the “Certified Health and Productivity Management Organization Recognition Program 2020- White 500,” in recognition of the Company’s efforts to prevent lifestyle-relateddiseases and other illnesses and promote good health through regular health checkups and specific health guidance, jointly announced by the Ministry of Economy, Trade and Industry and the
Nippon Kenko Kaigi.
*3 We obtained the “L-boshi Certification (second level),” which is awarded by the Minister of Health, Labour and Welfare to employers with excellent performance in promoting women's participation andcareer advancement.

Integrated Report 202016

Value Creation Model

The Sumitomo Rubber Group is committing a variety of management
resources, both internal and external, to growing the business.
Today, based on its newly formulated Midterm Plan, it is leading the way
to further enhancements in economic and societal corporate value.
*The content that follows was announced in February 2020. As such, thecontents of these pages do not account for the impact of COVID-19.

Key Management Resources

Business Activities, Growth Strategy
Current business activities

Financial capitalSportsBusiness
9.5%

Sound financial position and stableearnings structure
Total assets

Total equity

1035.5 billion¥

475.5 billion(Fiscal 2019)

Tire Business
Providing a variety of tires forpassenger cars, trucks, buses andmotorcycles in Japan and overseas.

Sports Business
Tire Business
85.9%

Manufactured capital
Diverse production network covering
Japan and overseas
Domestic

Foreign

6 bases

16 bases

Japan

36.8%

Overseas Sales Ratio 63.2%
North America
17.5%

Composition ofSales Revenue
by Region

Others 12.3%

Human capital

Medium-term targets
Financial capitalIndustrial and Other
Products Business 4.6%

Composition ofSales Revenue
by Business
Segment¥

Manufactures and sells golf clubs, golfballs, tennis rackets and tennis balls,
and manages fitness club businesses.

Industrial and Other Products
Business
Provides items ranging from daily life
supplies, such as rubber gloves andp r o d u c t s u s e d i n c a r e - g i v i n g, toindustrial materials including artificial turf,
rubber parts for medical applicationsand vibration control dampers.

Europe14.5%

Asia 18.9%

Diverse human resources in which theSumitomo Business Spirit has taken root

Results of Utilizing Management
Resources

and Medium-Term Targets

Growth Strategy

Fiscal 2019(y-o-y)Sales revenue

893.3 billion(-0.1%)

Business profit¥

53.9 billion(-11.2%)

Economic Value
Target IndicesTarget Vision for 2025
Performance

At Least
1Trillion JPY

Growth Potential

Sales Revenue

Profit Potential

Business Profit

Invested Capital
Profit Potential

ROE

At Least 10%

Financial
Soundness

D/E ratio

0.5 or Lower

At Least

100 Billion JPY

Societal Value
We will continue striving to create new value by>> See pages 7, 29

Manufactured
capitalProperty, plantand equipment

Fiscal 2019(y-o-y)420.9 billion(+13%)¥

Capital expenditures ¥58.1 billion

Fiscal 2019(y-o-y)Employee turnover ratio

3.2%(-0.6%)

Ratio of paid leave taken

77.3%

Human capitalengaging in business activities that emphasize bothNumber of consolidated employees

Value Driver

39,233“Enhancing Our Economic Value” and “Enhancing Our① Developing & Promoting Sales ofAdvanced Products(Fiscal 2019)② Creating New Value

Intellectual capital

Further Enhancing

Value to Society,” and continue to promote ESG

Our Economic &Management while working to contribute to theSocietal Value

achievement of SDGs.

(-0.6%)>> See page 30(+11%)>> See page 32

Intellectual capital Fiscal 2019

③ Promoting ESG Management(y-o-y)Abundant intellectual property to drive thenext phase of growth

Efforts to Create New Profits

R&D expenses

Groupwide Project to Reinforce theFoundations of Our Business26.2 billion¥“Be the Change”(Fiscal 2019)

The Challenges of New Markets
Entering New Business Fields

Natural capital
Efficient use of natural resources aimed at
reducing environmental impacts andbringing about a recycling-oriented society
CO2 emissions
2

14,047,000m(Fiscal 2019)

Integrated Report 2020

2020

Water usage

1,095 kt-CO e

17

Insatiable Drive for Innovation

Efforts to Strengthen Our
Organizational Framework
Maximizing Results from Our
Global Business Framework

Number of Japaneseand foreign patents(-43)>> See page 33

Natural capital

Fiscal 2019(y-o-y)Organic solvents used

1,603t(+1.9%)To the next stage
2025
Wastewater

3

9,156

10,969,000m*Data includes bases other than factories

3(+0.6%)>> See page 34

The Sumitomo Business Spirit

Integrated Report 2020

18

Risks and Opportunities

In addition to steadily linking medium- and long-term business opportunities togrowth, so as to achieve sustainable growth, the Sumitomo Rubber Group works
to distinguish and mitigate risk factors that could impair sustainable growth.
In this section, we provide a brief discussion of the risks and opportunities inrelation to changes in the business environment of the Sumitomo Rubber Group
going forward, as well as the strengths we will leverage for the future
development of the business.

Management Issues

Business Opportunity

Risks

Strengths●M aximizing results from our global● Accelerated motorization due to● Political instability in emerging● DUNLOP brand, which boasts over 130 years of

infrastructure●D eveloping products to respond to local

Tire Businessmarket needs & ever higher
performance demands●R esponding to the various issues

present on the production floor by using
digital technologies such as AI and IoT,
and facilities automation to create smart
factories

population upsurge and economic
growth in India, Africa, ASEAN, etc.
● Increased demand for tires made ofsustainable raw materials and fuelefficient tires due to tightened
environmental regulations forautomobiles and heightened awarenessof the global environment

countries● Jump in the price of raw materials

and crude oil● Emergence of manufacturers fromemerging countries● Natural disasters, pandemics

history since the commercialization of the world’s
first pneumatic tire and has won public recognition
throughout the world●E xtensive product lineup centered around the“ENASAVE” series that complies with the labeling
regulations for fuel-efficient tires●G lobally optimized production infrastructure●W orld-leading simulation and analysis capabilities● Growing demand for next-generation

utilizing state-of-the-art supercomputers and so on

tires for electric vehicles andautonomous vehicles

Growth Opportunities● Promoting sales expansion in advanced tires, such as those aimed at the growing SUV

tire market● Create new economic value and societal value by giving

concrete form to the “SMART TYRE CONCEPT” fordevelopment of tires and peripheral services●P rovide tires that feature superior performance in terms ofsafety and fuel efficiency, manufactured using raw
materials that feature reduced environmental impact,
alongside peripheral services that bring together tires andvarious digital tools● Establishment of new business models

ENASAVE NEXT III

that incorporate AI and IoT●M aintaining top share in golf clubs, golf

Sports Businessfollowing the acquisition of trademark
rights of the “DUNLOP” brandthroughout the world●E nhancing global presence in golf and●R aising awareness of health and sports

racket sports goods●S trengthening efforts towards

among citizens, against the backdrop ofan aging society● Shrinking markets for golf andtennis as the players decrease● Restrictions on leisure-related

expenditure, driven by economic
instability and uncertainty about
the future● Jump in the price of raw materials

Industrial and Other

Products Businessdevelopment systems for high-valueadded products in terms of quality
and functionality, based on rubber
technology●A ccelerating business developments

Integrated Report 2020

into Europe and USA, shifting fromthe conventional business centeredaround Japan and other Asian
countries●P roviding products and services that are backed

and differentiated by superior technicaldevelopment capabilities, such as the utilization ofstate-of-the-art supercomputers●B uilding brands and product appeal that havebeen refined at the highest levels of the Pro Tourstage
●P
 racticing marketing that is thoroughly based onenhancement of “DUNLOP” brand value
and expand the effect to the entire
Sumitomo Rubber Group to generatesynergies●E nhancing research and19●E xpanding business opportunities

balls and tennis balls, and securing
sales and profits in the Japanesemarketuser needs, and the global marketing capability tosupport that●S
 ustained growth in demand forrubber parts for medical applications
on the back of the expansion of the
global pharmaceutical market●R ising demand for dampers forhousing and building use in thevibration control business,
associated with growing need forearthquake countermeasures● Jump in the price of raw

materials●F iercer competition●D ecline in Japan’s population●M arket contraction●E xchange rate changes●O wns a product development/sales system indiversified fields, ranging from daily life
supplies and healthcare goods to rubber partsfor medical applications, vibration control
dampers and industrial infrastructure, which isfounded on the proprietary rubber technology
accumulated in the Tire Business●M ove the headquarters for the Rubber Parts

for Medical Applications Business to Europe in2020 to build a global business operation in
growth markets● Developing & promoting sales of advanced products●E xpanding our Sports Business globally (Golf andRacket Sports Business)
・In golf, enhancing our presence in North America,
the largest market
・In racket sports, leveraging the sales power we havecultivated in tennis balls, the brand power of Dunlop andour technical development capabilities, to grow sales●P ursuing the diverse value and potential to be found in

sports, so as to further enrich the customer’s sporting life

● E xpand the Rubber Parts for Medical

Applications Business further in growthmarkets, using our acquisition of Swiss
medical rubber products manufacturer
Lonstroff AG, and by launching a new factoryin Slovenia in 2019 for rubber parts for
medical applications● In the vibration control business, expand thelineup and increase sales of the “MIRAIE”
Vibration Control Units for Detached Housing,utilizing the vibration
control technology
used in bridges andbuildings

Integrated Report 202020

Sumitomo Rubber Group Value Chain

Value Chain Supporting Sustainable
Business Growth
Product development
Next-generation product development T◦ Developing environmentally friendly products → P.55
◦ Advancing our SMART TYRE CONCEPT → P.14

◦ Developing natural rubber substitute material based on
Russian dandelions

World’s first noise-absorbing sponge“SILENT CORE” T
High-Precision Metal Core Type Manufacturing
System used for tire production T◦ “NEO-T01”

E
EnvironmentIntellectual capital T → P.33

◦ Ranked No.1 in rubber product industry in terms of patentassetsPeriod covered: Apr. 2018–Mar. 2019, Patent Result research

Higher quality rubber T → P.33

◦ Natural rubber plantation and natural rubber processing

Establishing a trilateral global
management system T

Procurement
Conducting procurement based on Procurement
Guidelines T S I◦ Confirming CSR Code of Conduct and safety of procured
goods

Promotion of CSR procurement → P.60 T S I◦ Business partner education program including CSR surveys
and briefings

Promoting green purchasing T S I◦ Reinforcing our environmental footprint management system,
including reducing hazardous materials in raw materials

Conducting environmental risk audits at business
partners T S I◦ Making the response by business partners visible andproviding leadership for improvements

Formulating sustainable natural rubberpolicy → P.60 T I◦ Formulating policy to transform natural rubber into asustainable resource◦ Strengthening local

The Sumitomo Rubber Group has created a value chain that takes into consideration the ESG (environment,social, and governance) at all stages, including product development, procurement, production, supply,
sales, and after service.
The Group is working to leverage that value chain to achieve sustainable business growth and develop
highly competitive new products.

T = T ir e s, S = S p o r t s, I = In d u s t r i a l a n d o t h e r p r o d u c t s

Production / supply

Sales / after service

Reducing environmental impact of factories T I → P . 5 3◦ Reducing waste disposal ◦ Reducing water usage◦ Reducing volume of NOx + SOx + dust

Increasing brand value T S I

Green logistics T I → [website] Sumitomo (preventing global
warming within logistics)◦ Increasing modal shift rate

Maintain complete zero landfill waste T I →P.52◦ Maintaining our “Complete Zero” landfill waste policy◦ Establishing technology for 100% recycling of wastewater at factories

Pursuing same quality throughout the world T

Diverse human resources

Obtaining customer opinions and making use of them toimprove products and services T I◦ Reducing burden on drivers (reducing wait time, etc.)

Pursuing improvements in customer-service skills

Expanding sales of retread tires T→ [website] S umitomo (improving customerservice skills) T

Reusing waste tires T
Recycling waste CFRP (carbon fiber reinforced plastic) S→ [website] Sumitomo (recycling waste CFRP (carbon fiber reinforced

S
SocialG
Governance

21

Integrated Report 2020

Fostering human resources and making work
rewarding◦ Global human resource training → P.32

◦ Confirming CSR Code of Conduct and safety of procured
goods

IT-based customer management system(sharing information) T I

plastic))

Expanding sales of fuel-efficient tires T

Recycling of golf balls for driving ranges S

System for compensating customers
for flat tires T→ [website] Sumitomo (developing environmentally friendly products）

Conducting procurement based on Procurement
Guideline(Moving the headquarters for the Rubber Parts for Medical Applications

Improving logistics quality T I*Grommet: a tubular resin part used in the holes in the frame through which the string (gut) passes◦ Ensuring diversity in employment◦ E xpanding sales through UK-based Micheldever Group◦ Starting up the European base I
Business to Europe from January 2020)◦ Holding Skill Olympics at 12 factories throughout the world

Grommets* for tennis rackets
using materials that use fossil-free resources S

Golf club development that pursued carry and ease ofhitting, combined with a pleasing sound when the ballis hit S→ [website] Sumitomo (product/ business presentations)

Reinforcing overseas replacement tire
expansion TI→ [website] Sumitomo (recycling of golf balls for driving ranges)

development system→ P.12Global sales network T I

Achieving a Good Work-Life Balance → P.58

◦ Promoting use of childcare leave by male employees◦ Daycare support system

Provide customer experience using
the “XXIO” brand S→ [website] DSS (“XXIO” site within Golfing World)

ENASAVE NEXT III

Reinvigorating the golfing market through initiatives such as“+PLUS Golf” S→ [website] DSS (G-ATTEND)

Respect for human rights → P.58
Promoting diversity◦ Shortened working hours for childcare◦ Active participation of female employees throughout the world → P.58
◦ Continue to recruit employees with disabilities

Promoting dialogue with stakeholders → P.60

Protecting whistleblowers
Risk management → P.41

Creating a safe, employee-friendly workplace◦ Promoting health & productivity management → P.58

Enhancing corporate governance → P.35

Ensuring thorough compliance → P.59

Bribery prohibition policy

BCP measures

Promoting efforts to improve quality ofbusiness partners

Information security → P.60

[website] Sumitomo (search keyword) → S
 umitomo Rubber Industries website
https://www.srigroup.co.jp/[website] DSS (search word) → Dunlop Sports Style website https://sports.dunlop.co.jp/

Integrated Report 202022

Tire BusinessBusiness Overview

Tire Business

現状分析

Results of Operations / Major Indicators
Sales Revenue(billions of yen)800

(billions of yen)

682.2

Topics in fiscal 2019

Bussiness Profit* (Ratio)
756.6

768.0

767.6

80

648.4

Compatibility with autonomous vehicles
16
74.0
Level
467.9
10.8
58.3
12
10.5
51.2 tires and peripheral
Joint development
of
46.2
7.7
6.7
8
6.0
services with Gunma
University
(%)

600

60

400

40

200

20

4
We began working together with the Center for
Research on0

Adoption of NextGen Transportation Systems (CRANTS)
of Gunma
0

0

2015

2016

2017

2018

2019

(FY)

2015

2016

Sales Revenue
800

682.2

768.0

767.6

80

74.0

648.4

600

60

400

40

Positioning D UNLOP a nd FA LK EN a s its ma in b r a nds, we supply,
200
in Ja pa n a nd ove r se a s, tire s fo r pa s se nge r c a r s, tr u cks, bu se s a nd
0moto rcycle s that a re deve lop e d by e mploying
2015
2016
2017
s t ate - of-the -a r t te chnolo gie s.

10.8

16
67.9

58.3

10.5

7.7

51.2
6.7

12

2019

(FY)

2015

2016

Bussiness Profit

2017

2018

The Group is stepping up marketing mainly inEurope, the USA and Japan by leveraging its lineupof FALKEN brand tires with superior functionality
and product quality.

Autonomous driving control center

1 Tire pressure data

2019

(FY)

0

Bussiness Profit Ratio* Business profit = Sales revenue - (Cost of sales + Selling, general andadministrative expenses)
Figures shown for fiscal 2015 have been restated to comply with IFRS standards.

With a lineup of products that possesses cuttingedge environmental and safety technology, DUNLOP
primarily conducts business in Japan and Asia.

for next-generation mobility.

8

6.0

4

0

the development of a safe and accident-free society that is suitable

46.2

20

2018

(FY)

to provide tire services using digital technology, thus contributing to(%)(billions of yen)

756.6

2019

Bussiness Profit Ratio

vehiclesWe andwill utilize the outcome of* Business profit= SalesLevel
revenue4- (High(Cost of Automation).
sales + Selling, generaladministrativethisexpenses)
research to develop the intelligent tires required by Level 4, andFigures shown for fiscal 2015 have been restated to comply with IFRS standards.

Bussiness Profit* (Ratio)(billions of yen)

2018

2017

University on joint research into tires compatible with autonomous

Bussiness Profit

2 Tire problem information

TPMS

Conceptual diagram
showing services
provided bytire-monitoring
systems

Autonomous vehicle

3 On-site service/service appointment

Tire repair facility

Joint development with Kansai Universityof technology to generate electricity within
the tire using static electricity

Year-on-Year Increase/Decrease in Tire Sales
2018
Volume2019

In conjunction with Professor Hiroshi Tani of Kansai University, we

Domestic original equipment

3%

3%

have developed technology that uses electricity generation devices

Overseas original equipment

6%

7%

fitted to the inner surface of the tire to generate electricity throughDomestic replacement

±0%

−7%

rotation, using static electricity. This applies a phenomenon known

Overseas replacement

−2%

1%

as the triboelectric effect, which is a kind of static electricity, so that

Total

±0%

1%

when the tire rotates, the devices generate electricity with high12,361

12,436

Total sales volume (millions of tires)

efficiency. We expect this technology to be utilized in the power
supplies a range of digital tools in future.

ENASAVE NEXT III

FALKEN’s new generation flagship   Moreover, in October 2018 this development theme was

A fuel-efficient tire that features 50%

tire “AZENIS FK510” was ranked

adopted under the Adaptable and Seamless Technology Transfer

less decline*1 in wet grip

third overall in a tire test conducted

Program through Target-driven R&D (A-STEP)* of the Japan

performance over time, incorporates

by the German automobile

Science and Technology Agency, with support from whicha hydrogenated polymer, and is also

professional journal AUTO BILD. It

development is proceeding.

the world's first*2 tire to use cellulose

was recognized as having overall

nanofiber high-per formanceh i g h p e r f o r m a n c e i n te r m s o fbiomass material to help achieve a

handling, braking, driving comfort,

low-carbon society.

fuel efficiency, and other aspects.

*1: C ompared to previous ENASAVE NE X T II
product*2: In-house research*A p ro g r a m to s u p p o r t j o i n t
research between industry andacademia with the aim of buildingcore technologies, consisting ofinvestigating the potential andverif ying the feasibility oftechnology seeds based on the
research results of university andother research.
Electricity generation device fitted
to the inner surface of a tire

Achieves the highest levels* 3 ofpassenger cabin comfort throughsuperior quietness and high-levelsteering stability. Furthermore, it
incorporates Performance
Sustaining Technology to prolong
wet grip per formance at the
maximum level.
*3: Among our products

23

Integrated Report 2020

Integrated Report 202024

Business Overview

Sports BusinessSports BusinessResults of Operations / Major Indicators

Topics in fiscal 2019

Sales Revenue

Bussiness Profit* (Ratio)(billions of yen)(billions of yen)

100

77.8

80

81.7

72.8

84.5

84.7

(%)

5

3
40

2

20

1

0

0

2015

2016

2017

2018

2019

(FY)

16

4.4

4.3
In 2019,4.3we maintained the No.1* ranking
for domestic retail sales

460

Wheelchairtennis player
Yui Kamiji

No.1 Ranking in terms of Domestic Retail20
5.5
Sales Value

6

2.6
3.3

by manufacturer in the following categories. 12
5.9■ Golf clubs

6.5■
5.3Tennis balls

5.1

8*Source: Yano Research Institute Ltd., “YPS Data” 4actual retail sales trend
survey (2019 share by value)

2015

2016

2017

2018

2019

0

(FY)

Professional
Players
Supported by Us
Bussiness Profit
Ratio
Demonstrate Outstanding Performance
Around the World

Bussiness Profit

Sales Revenue

Bussiness Profit* (Ratio)(billions of yen)(billions of yen)

100
80

77.8

72.8

81.7

84.5

4.3

40

2

20

4.3

5.9

3.3

5.3

6.5

5.1

2016

2017

2018

2019

(FY)

0

2015

8
4

1
2015

16
12

2.6

Bussiness Profit

2016

2017

2018

2019

0

(FY)

Bussiness Profit Ratio* Business profit = Sales revenue - (Cost of sales + Selling, general andadministrative expenses)
Figures shown for fiscal 2015 have been restated to comply with IFRS standards.

Golf player
Hideki Matsuyama

The thr e e br a nds, na mely “X XIO,” “SRIXON ” a nd
“Cleveland Golf” are offered on a global scale.
   Since it was launched in 2000, our mainstay “XXIO”
brand golf clubs have maintained the highest market
share in Japan for 20 consecutive years*1, based on theircarr y, ease of hitting and the pleasing sound they
produce when the ball is hit. The 11th generation models,“XXIO Eleven” and “XXIO X,” were launched in December
2019, and got off to a blazing start by taking the No.1*2
position in retail sales share for the month of the launch.

4.4

4
3

Golf Equipment

20

5.5

5

60

0

(%)

6

84.7

Tennis Equipment
Having incorporated its cutting-edge
proprietary technology to England’s
tr aditional “DUNLOP ” br and, theCompany is introducing the brandthr oughout the wor ld a s one for
all athletes, ranging from top
professionals to beginners. In addition
to manufacturing long-sellingba lls us e d in ma ny of the ma jor
tournaments in Japan, the Company
became the first Japanese company
to be the official ball supplier to theAustralian Open in 2019.

* Business profit = Sales revenue - (Cost of sales + Selling, general andadministrative expenses)
Figures shown for fiscal 2015 have been restated to comply with IFRS standards.

A number of leading Japaneseand overseas professional players
have entered into equipment
sponsorship agreements with us.
In 2019, Shane Lowry won his
first major golf tournament in the

Shane Lowry

shape of the Open Championship, using a SRIXON Z585 driver andother clubs. In tennis, many other players took an active role, such
as Jamie Murray winning the Mixed Doubles at the US Open.

Dunlop Sports Club large store opened in
Tsukuba City
“Dunlop Sports Club Tsukuba” opened its doors within Aeon Mall
Tsukuba as the second outlet in Ibaraki Prefecture, and the 20th
nationwide, as part of the Sumitomo Rubber Group’s chain ofcomprehensive fitness clubs. With three floors above ground, thisfacility is fully equipped with a pool, fitness machines, studios, agolf range and tennis courts. Going forward, we will do our best
to support the health promotion among local residents.

Source: Yano Research Institute Ltd., “YPS Golf Data”*1 A nnualized sales value basis for the total of woods and irons by sub-brand(2000-2019)*2 Total value for products in same series, sales value basis (month of December
2019 only)

Wellness Business
The business is now in the process of expansion with theaim of becoming the third pillar of our businesses,
comprising a fitness club business and golf and tennis
school businesses.
   The business aims to support health promotion in a
broad range of fields in such ways as operation of compact
gyms open 24 hours a day andcontracted management of local
government facilities, in addition to
the existing school business andcomprehensive fitness clubs.
25

Integrated Report 2020

Integrated Report 202026

Business Overview

Industrial and Other Products BusinessIndustrial andOther Products
Business

Results of Operations / Major Indicators

Topics in fiscal 2019

Sales Revenue

Bussiness Profit* (Ratio)(billions of yen)(billions of yen)

50

500

385

400

396

355

418

411

40

300

30

200

20

100

10

0

0

2015

2016

2017

2018

2019

(FY)

Hardcourts for tennis
20“DecoTurf” 42selected
for Ariake Tennis Park
40
16
34
tennis courts
10.7
(%)

12
27
9.6
a hardcourt for tennis,
8.3 sold and installed by our
22 “DecoTurf,”
7.6
8
5.7 subsidiary Sports Surface Co., Ltd, has been
selected for the4tennis courts in Ariake Tennis Park (Koto-ku, Tokyo),with installation
0 in May 2019.
on the 2016
Ariake Coliseum
centercourt2019beginning
(FY)
2017
2018

2015

  
Bussiness Profit

Sales Revenue

Bussiness Profit* (Ratio)(billions of yen)(billions of yen)

(%)

50

20

500

400

385

355

396

418

411

42

40

300

40

16

34

30
22
5.7

27
7.6

“DecoTurf”
is a hardcourt
Bussiness
Profit Ratio that has been used for more than 40* Business profit =years
Sales revenue(CostOpen,of saleswhich+ Selling,isgeneralandat the -US
one ofthe world's four major tennis
administrative expenses)
championships,
has
beenwith
adoptedfor the venues of many
Figures shown forfiscal 2015 have been andrestated
to comply
IFRS standards.

10.7

9.6

8.3

other international competitions. In Japan, DecoTurf has also been
employed for venues such as those used by the National Athletic
Meet, and it was the positive view taken of this track record that led

12

to its adoption in Ariake.

8   We will continue to help

200

20

100

10

4

maintain a comprehensive

0

0

0

environment for tennis

2015

2016

2017

2018

2019

(FY)

2015
Bussiness Profit

2016

2017

2018

2019

(FY)

Bussiness Profit Ratio* Business profit = Sales revenue - (Cost of sales + Selling, general andadministrative expenses)
Figures shown for fiscal 2015 have been restated to comply with IFRS standards.

competition by selling tennis
equipment, and operating schools
and competitive sporting facilities
under the Dunlop brand.

Rubber parts for medical applications

Vibration control dampers

Exercising thorough quality control, Sumitomo
Rubber Industries offers safe, high-quality andrubber parts for medical applications.

Our vibration control dampers made using a special
high damping rubber protect buildings and housing
complexes from swaying due to high winds andea r thqua ke tr emor s . We a r e acceler ating ourbusiness expansion into earthquake-prone Taiwan
and South Korea with these products.

Image of the arena after the competition(as of January 2019)
Source: Tokyo Metropolitan Government

Vibration control dampers used for historicbuilding in the Philippines
Vibration control dampers utilizing our ultra-high damping
technology were recently installed in thebuilding of the former head office of Bankof China in Manila, the Philippines. The
former head office of Bank of China is ahistoric structure that was built in 1924.
This is the first deployment of our vibration
control dampers in the Philippines.
The former head office of Bank of China has beenequipped with vibration control dampers

Precision rubber parts for office equipment
Precision rubber parts for office equipment require
accuracy on a micrometer scale. With production
bases in Japan, China and Vietnam, Sumitomo
Rubber Industries meets the needs of a wide varietyof customers.

27

Integrated Report 2020

Integrated Report 202028

Key Management Resources

In addition to financial capital, the Sumitomo Rubber Group regards manufactured capital (suchas factories and production facilities), diverse human capital, intellectual capital (including

Manufactured capitalresearch & development capabilities and intellectual property), and natural capital (such as energy(production infrastructure, capital expenditures)

resources) as key management resources.

The Group, which is expanding its business globally, possesses six domestic bases and 16 overseas bases in its production network.

In this section, we provide a brief discussion of our approach to the different types of capital, andIn fiscal 2019, we implemented a total of ¥58.1 billion in capital expenditures.

their current status.

Financial capital (financial position)
15 16

For the Group, sound financial capital is a key management resource that supports sustainable growth.

8
7
3

2

14 13
9
34
12

10

Total assets at the end of fiscal 2019 were ¥1,035.5 billion, and total equity was ¥475.5 billion.

Total assets / net assets, total equity■ Total assets*1■ Total assets*2(billions of yen)

JGAAP
日本基準

1,018,3
936.2
9,362

867.5
8,675

800

6

IFRS
9,362
973.6

1,000

600

1

■ net assets*1■ total equity*2

1,200

1,035.5

1,002.4

1 Indonesia Factory (tires and sports goods)
2 Changshu Factory (China)
3 Hunan Factory (China) (tires)

671.6

4 Thailand Factory (tires)

4,470
447.0

200
0

453.8
4,538

4,595
459.5

4,909
490.9

4,755
475.5

472.8
4,728

358.8
3,588

400
2,222
213.0

222.2
2,711

5 Brazil Factory (tires)
6 South Africa Factory (tires)
7 Turkey Factory (tires)

2,711
271.1

6

8 USA Factory (tires)

5

9 Thailand Factory (sports goods)

1

10 Philippines Factory (sports goods)

2010

2011

2012

201３

2014

2015

2016

2017

2018

2019 (year)*1. JGAAP*2. IFRS

11 USA Factory (sports goods)
12 Malaysia Factory (industrial products)

2

13 Zhongshan Factory (China) (industrial products)

3

Japan

14 Vietnam Factory (industrial products)

1 Shirakawa Factory (tires)

15 Switzerland Factory (industrial products)

2 Nagoya Factory (tires)

Financial position

Securing liquidity

Total assets at the end of fiscal 2019 were ¥1,035.5 billion, an

Going forward, the Group’s policy is to continue its program ofincrease of ¥33.1 billion over the end of the previous fiscal year.

capital expenditures for the purpose of increasing production

5 Kakogawa Factory (industrial products)   Current assets fell by ¥16.8 billion, due to declines in cash andcapacity in order to support the expansion of sales, primarily

6 Ichijima Factory (sports goods)

cash equivalents, but an increase in right-of-use assets driven byoverseas. However, while increasing sales volumes and improving

the adoption of IFRS 16 caused an increase in property, plant andprofitability so as to expand cash flows from operating activities, we

equipment, leading to a rise of ¥49.9 billion in non-current assets.

will also utilize the funding from financial markets and institutions,   Total liabilities at the end of fiscal 2019 were ¥559.9 billion, an

etc. as required, seeking a balance between growth on the one

increase of ¥30.4 billion over the end of the previous fiscal year.

hand and securing liquidity and improving our financial position on

Interest-bearing debt came to ¥325.5 billion, rising ¥42.0 billion over

the other hand.

In the case of important plans, the Company takes the central role incoordinating the Group, primarily for the purpose of optimization. 480   Total equity at the end of fiscal 2019 was ¥475.5 billion, of which

Shareholder returns   In fiscal 2019, we implemented ¥58.1 billion in capital

total equity attributable to owners of parent was ¥460.8 billion, for

We recognize that returns to shareholders is the most important

expenditures, centered on enhancing overseas production facilities
320

ratio of equity attributable to owners of parent of 44.5%. Equity

issue. Our basic policy is to provide stable rewards to shareholdersof high value-added products in the Tire Business, mainly at the

attributable to owners of parent per share was ¥1,752.07.

over the long term, while taking into account such factors as theTurkey Factory, Thailand Factory, Chinese and other factories.

the end of the previous fiscal year.

Integrated Report 2020

16 Slovenia Factory (industrial products)

3 Izumiotsu Factory (tires and industrial products)

44 Miyazaki Factory (tires and sports goods)（億円）
Capital expenditures (billions of yen)800
As a rule, the companies of the Group each take into account

Capital expenditures

medium-term demand forecasts, production plans, and the ratio of640
investment to profit, and formulate capital expenditures accordingly.

consolidated dividend payout ratio, the outlook for business160   The funds for capital expenditures were allocated mainly fromperformance, and the level of internal reserves.

internal sources and from borrowings.

The annual dividend per share for fiscal 2019 was ¥55.

29

5

Overseas

897.6

737.5
7,375
622.2

11

0

625

589

669
581

496

2015

2016

2017

2018

2019 (FY)

Integrated Report 202030

Key Management Resources

Production infrastructure

2013. We also established sales companies in Russia, India, andAustralia, and have continued to steadily expand production■ Tire Businesscapacity and sales networks.

Establishing a globally optimized production infrastructure

Human capital(number of employees, fostering human resources, promoting work style reform)

The development of global production infrastructure in the Tire

Expanding Our Business in Europe & the Americas

The basic aim of the Group is to respect the human rights of employees, to foster human resources while taking employee-friendly workplaces

Business began in 1997 with the Indonesia Factory, and the number

With the dissolution in 2015 of the alliance agreement and joint

into consideration, and to enhance corporate value by effectively utilizing these human resources.

of production bases continued to expand steadily with the openingve nture s with T he Goodye ar T ire & Rubber Company, theof the Changshu Factory in China in 2004, the Thailand Factory inbusinesses in Europe and North America were freed from various

2006, and the Hunan Factory in China in 2012.

restrictions, and became able to take a more flexible and proactive   In order to further strengthen the supply infrastructure, we areapproach to expansion.

currently moving forward with plans to extend the Thailand Factory   Utilizing the USA Factor y, which we acquired af ter the

into one of the largest of its kind in the world, in addition to which we

dissolution of the alliance in North America, and the Turkey Factory

moved steadily ahead with the expansion and enhancement of otherin Europe, we will bolster supply of high performance tires and takeproduction facilities, such as by beginning production at the Brazil

steps to reinforce the product lineup, with the Group exerting all its

Factory and South Africa Factory in 2013, and at the Turkey Factory

strength, and working as one, to expand the business in Europe &in 2015, while in the United States we acquired a factory in New

the Americas.

■ Employees

Number of consolidated employees

Changes from 2012 to 2019
Overseas tire production volume241,000t (45.9%) → 428,000t (61.5%)*Figures within the parentheses show the overseas production
ratio for tires.

Overseas sales ratio for tires

50.8% → 66.9%■ Sports Business

2017

2018

2019

33,19733,79236,65037,852

39,233

12,055

11,677

11,606

11,674

11,837

Overseas

21,142

22,11525,044

26,17827,396

6,753

6,693

6,666

7,175

7,325

Average years of service (Sumitomo Rubber Industries Ltd. (Non-Consolidated Basis))

16.6

16.5

16.2

15.9

15.7

Men (Years)

16.8

16.7

16.4

16.3

16.1

Women (Years)

13.3

13.3

13.0

12.6

12.2

3.2

3.5

3.9

3.8

3.2

Employee turnover ratio (Sumitomo Rubber Industries Ltd. (Non-Consolidated Basis))

Proving ourselves worthy of the trust of users through superior
production technology and the ingenuity of our employees
The Company began the domestic manufacture of golf balls and■ Composition by Region■ Composition by Age (Sumitomo Rubber■ Composition by Sex (Sumitomo Rubber

Industries Ltd. (Non-Consolidated Basis))

Industries Ltd. (Non-Consolidated Basis))tennis balls in 1930. Golf balls, such as SRIXON and XXIO, which

60 or older 6%

are the mainstay of the Sports Business, are currently manufactured
at the Ichijima Factory (Tamba City, Hyogo Prefecture), and theIndonesia Factory. In addition to the manufacture of golf clubs,

Japan
30%

Asia Pacific
43%

50s
20%

Overseas production of tires rose by 78% between 2012 and 2019,of a wide variety of customers.

and the overseas sales ratio for tires increased from 50.8% to   In tennis, we have tennis ball factories in the Philippines and66.9%.

Thailand, where we manufacture balls for the Australian Open andthe major events on the ATP Tour.

Entry into Emerging Markets

10s 2%
20s
16%

(%)
30

Male

Americas9%Europe/Africa 18%

40s
29%

30s
27%

18.5
13.8

10
5
0

Female

24.8

24.2

25
20
15

manufacturing subsidiary Dunlop Golf Club Corp. (Miyakonojo City,
Miyazaki Prefecture) is involved in custom clubs to meet the needs

1.6

0.1

10s

1.8
20s

2.6
30s

4.2
40s

6.1
1.9

0.3

50s 60 years old
and above

Basic perspective on human resources

Work style reform / promoting diversity

The Group fosters human resources through a combination of three

With regard to our approach to work style reform / promoting
diversity, within the Company we have publicized the commitment

Driven by the global expansion in demand for vehicles, centered on■ Industrial and Other Products Businesscomponents: OffJT such as group training, etc., OJT at each

emerging countries, worldwide demand for tires is increasing

Raising production capacity for the Rubber Parts for Medical

division, and self-study. In order for the Group to survive as a truly

made by top management to this goal, and promote related

steadily year by year. The Group has been working towards the

Applications Businessglobal player, employees must be able to communicate regardlessactivities. In this context, our approach to promoting diversity andtarget of raising the ratio of its sales derived from emerging

In the growing the Rubber Parts for Medical Applications Business,of differences in culture and language, and develop the ability toinclusion is supported by the two pillars of creating a lively corporate

countries (excluding China) from a total of approximately 10% in

since beginning production of rubber stoppers for medical use atsolve problems. We are planning grade-specific training that begins

culture, in which people from diverse backgrounds respect each2011, to 20% in 2020.

the Izumiotsu Factor y in 2000, we have developed a global

with younger employees, with the aim of helping them acquire

other, and using digitalization to create time and take up theSpecifically, we began operations at the Brazil Factory in Octoberproduction infrastructure by continuing the expansion to thecritical thinking and problem solving skills.

challenge of higher value-added work. In this way, we hope to open

2013 and at the Turkey Factory in June 2015, in addition to which we

Kakogawa Factory in 2010, the Swiss Factory in 2015, and the   With regard to the systematic operation of human resource

the way to satisfaction for all employees and to enhancements instarted operations at the South Africa Factory that we acquired fromSlovenia Factory in 2017.

development, in addition to OJT and self-study, we are promoting a

corporate value.

variety of training programs to enable employees to improve their   We are also working to energize our communications as anskills, centered on the efforts of the Human Resources Department

important measure for implementing work style reform / promoting

and the Production Training Department.

diversity. In order to encourage understanding of people with   As for the fostering of global human resources, we arediverse backgrounds and values, we are implementing discussion

Collaboration aimed at raising productivity for tires

strengthening the fostering of overseas human resources, with themeetings, networking events, and training on unconscious bias. By

goal of achieving identical product quality irrespective of the factory

In October 2019, the Company began full-scale collaboration with Hitachi,

deepening mutual understanding, we seek to move forward with thein which it was made, so that all employees are able to grow and tocreation of a corporate culture that enables employees with diverse

feel job satisfaction.

attributes, and who have experienced a variety of life events, to take   Manufacturing education puts the emphasis on manufacturing

an active role at work. In fiscal 2019 we implemented unconscious

technology and craftsmanship in Japan and overseas.

bias training for around 50   In workplace supervisor training, the focus is on putting what

candidates for management,

has been learned to subsequent practical use. In order to raise theand in fiscal 2020 we plan tolevel of workplace management, we are conducting various

ex tend this to cover all

activities to establish that a consistent, Group-wide philosophy

management positions.

Apollo Tyres Ltd. South Africa for use by the Group in December

Ltd. and PTC Japan, in relation to building a global production system fortires that utilizes AI and IoT platforms to achieve high quality and highperformance production.
   In concrete terms, we will achieve high quality and high performance
production by means of speedy decision-making, based on the visualizationof data from within the production site, in conjunction with AI analysis.
Going forward we plan to gradually move forward with the deployment of
the system, so that the rollout to all 12 tire factories in Japan and overseas
is completed by 2025.

31

2016

Japan
Number of employees (Sumitomo Rubber Industries Ltd. (Non-Consolidated Basis))

York state as the Group’s U.S. base.

2015

Integrated Report 2020

Conceptual diagram of deployment of high quality and high performance
production system utilizing AI and IoT platforms

across the Group.
Diversity & inclusion workshop

Integrated Report 202032

Key Management ResourcesIntellectual capital (research and development,

Natural capitalintellectual property strategies, etc.)(realization of a low-carbon, recycling-oriented society)

The Sumitomo Rubber Group promotes a wide range of research and development in domains or fields related to tires, sports and industrial

Bounties of the Earth, such as natural rubber, which are an element of natural capital, constitute a key management resource for theand other products businesses. The intellectual capital accumulated through such activities becomes the driving force that generates

sustainable growth of the Group. Based on this awareness, the Group is working to conserve the environment and to use finite energy

products with competitive advantages, as well as new growth.

resources effectively.

■ The State of Our Intellectual Capital■ Environment Indicators
2015

R&D Expenses (millions of yen)

2017

2018

2019

Global Network of Production & Sales Bases

2015

2016

2017

2018

2019

23,372

24,25725,72025,78026,198CO2 emissions (business activities)(kt-CO2e)

786

1,011

1,036

1,073

1,095

2.9

3.2

3.8

2.9

2.9

Waste disposal

(kt)

17.9

17.4

16.6

22.2

32.3

7,849

8,745

9,183

9,199

9,156

Ratio of R&D Expenses to Sales Revenue (%)
Number of Japanese and Foreign Patents (Number of patents held)

2016

Water usage3(1,000 m )

9,852

13,774

14,523

14,373

14,047

Wastewater(1,000 m3)

7,724

11,438

10,824

10,90910,969Organic solvents used

(t)

1,100

1,045

1,055

1,573

1,603

Number of trees planted*(10,000 trees)

8

7

4

5

4

R&D Activities

Inc. in the USA, we are developing, evaluating, and testing newWith the Sumitomo Rubber Industries’ R&D organization andtechnologies and products by employing computer simulations andfacilities as its core, the Group promotes R&D activities in a wideother technologies.

range of fields related to the tire, sports, industrial and other   In the Industrial and Other Products Business, we are actively

products businesses, in close cooperation with its subsidiaries anddeveloping new products aimed at accommodating consumer

Creating a Low-Carbon Society

Promoting environmental footprint management

affiliates around the world.

needs in such fields as vibration control units using high-damping

In response to the problem of climate change, the Group is working

In order to reduce chemical substances, we are implementing   Guided by the underlying concept of “What tire technology canrubber parts for medical applications and precision rubber parts forto reduce CO2 emissions over the whole life-cycle of its products,

measures to cut the release and transfer of chemicals subject to

do for the global environment,” the Tire Business focuses its R&D

office equipment.

*Not including the provision of seedlings

from raw material procurement to final disposal.

PRTRs, as well as conducting activities to reduce the amount ofefforts on developing environmentally friendly products by focusing   In addition to taking steps to reduce CO2 emissions during theorganic solvent waste.

on three areas: “innovative materials,” “fuel efficiency” and “resource

use of the tire, which accounts for approximately 85% of life-cycle

conservation.” The Tire Technical Center, located near the Kobe

CO2, we began seeking to ascertain CO2 emissions at raw material

Sustainable Natural Rubber Policy

Head Office, serves as the core facility for these initiatives, in

suppliers in 2018, and plan to link this to reduction efforts going

The Company has announced “Sustainable Natural Rubber Policy”

collaboration with the Europe and USA Tire Technical Centers.

forward. Also, in terms of reducing CO emitted in the course ofin accordance with the philosophy of the GPSNR*, which was   In the Sports Business, having established R&D sections atbusiness activities (Scope 1 & 2), we are working on such initiatives

founded on November 16, 2018, to promote natural rubber as aboth the Sports Business HQ and Roger Cleveland Golf Company,as switching fuel types, installing cogeneration systems, and generalsustainable resource. In line with this policy, we seek to resolve

energy-saving activities.

issues in regions where natural rubber is produced, such as

2

Development of “Reduced Odor Natural Rubber,” that significantly reduces the smell of natural rubber

environmental problems caused by the destruction of forests, andBuilding a Recycling-Oriented Society

human rights problems in the working environment.

In order to respond to the global rise in environmental awareness, the Company is working on research and development that includes initiatives to

In response to the problem of waste, we are taking steps to control*Global Platform for Sustainable Natural Rubber

improve the quality of natural rubber, and to improve the performance of tires by utilizing high-performance biomass materials. In particular, natural

the amount of waste generated, to convert it to something of value,rubber accounts for approximately 30%* of tire raw materials by weight, which is a significant percentage, so we have taken the initiative in resolving

and to promote recycling. As part of this, since 2010 we have been

the issues associated with natural rubber.
   The recently developed “Reduced Odor Natural Rubber” uses a proprietary technique applied during the raw material processing stage at our
natural rubber processing plant in Thailand. This controls the phenomenon that causes the odor to be generated, and significantly reduces the smell.
By establishing this technique, we expect to contribute to the resolution of the odor problem not only at the natural rubber processing factory, but

continuing our efforts to move to zero emissions at our major bases
both in Japan and overseas, by reducing landfill waste to zero, andmoving to 100% reuse of resources.

also at sites like tire manufacturing facilities.

   In response to conservation of water resources, we are making*Source: The Japan Automobile Tyre Manufacturers Association, Inc., “TYRE INDUSTRY OF JAPAN 2019”

efforts to reduce water usage, and promoting recycling. In 2019, theTurkey Factory achieved 100% recycling of wastewater, and we plan
to extend this further to other factories.

33

Intellectual Property Strategies

Middle East and Africa.

The Group proactively carries out intellectual property activities that   Efforts are now under way to nurture human resources andGreening Initiatives

support its businesses.

reinforce our structure to conduct intellectual property activities that

We are promoting greening initiatives at our sites and the areas   Specifically, the Group under takes intellectual proper ty

go along with such globalization. In particular, the Group is providing

surrounding them, both in Japan and overseas. On the subject ofactivities focusing on three pillars, namely: 1) “securing intellectual

training sessions not only for Intellectual Property Department

promoting biodiversity, the Company is involved in programs suchproperty rights” with regard to such industrial properties as patents,

members but also for employees at every operational base with theas the “Acorn Project,” whose goal is to conser ve genetic

utility models, designs and trademarks; 2) “exercising such rights”

aim of raising awareness of intellectual property and upgrading thebiodiversity, and in the creation of biotopes.

against the infringement of Sumitomo Rubber Industries’ intellectual

competencies of the entire workforce. Such action is facilitating theproperties; and 3) “eliminating risk” by developing a structure todevelopment of a structure that ensures intellectual property

defend against attacks by third parties. In step with the rapid

activities are carried out smoothly and seamlessly on a Group-wide

expansion of its overseas operations, the scope of the Group’sbasis.

intellectual property activities is growing worldwide, encompassing   Focusing on the above-mentioned three pillars, the Group will

not only Japan but also the USA, Europe and such Asian countries

promote the more efficient implementation of intellectual property

as China, as well as Russia and countries in South America, theactivities at a global level.

Integrated Report 2020

Integrated Report 202034

Corporate Governance
Basic Perspective
The Sumitomo Rubber Group’s basic management policy is to

Directors, Audit & Supervisory Board Members andExecutive Officers (As of March 26, 2020)
Directors and Audit & Supervisory Board Members

Standing Audit &enhance its corporate value as a promising and reliable global

Supervisory Board Member

company for the benefit of all stakeholders, including shareholders.

Hiroaki Tanaka   Under this policy, the Group considers the enhancement ofcorporate governance as a key management objective in its efforts
to better fulfill its social responsibility and enhance its transparency.
This policy will help to strengthen Group management and establish
deep relationships of trust with society, while ensuring Group-widebusiness efficiency.

Chairman of the Board

Representative Director, President andCEO (President)

Standing Audit &Supervisory Board Member

Ikuji Ikeda

Satoru Yamamoto

Takashi Kono

Corporate Governance System
Overview (as of March 26, 2020)
Form of organization

Representative Director (Vice President)

Representative Director (Vice President)

Outside Audit &Supervisory Board Member*

Minoru Nishi

Kazuo Kinameri

Morihiro Murata

Company with an Audit & Supervisory Board (established
Nomination and Remuneration Committee, voluntary body)
Board of Directors■N umber of members

stipulated in the Articles ofIncorporation

3 Outside15■ Term of office

12 Directors
Director (Managing Executive Officer)

Director (Senior Executive Officer)

Outside Audit &Supervisory Board Member*

Yasutaka Ii

Hiroki Ishida

Asli M. Colpan

1 year■C hairperson of the Board of

Directors

9 Internal

Chairman of the
Board

Audit & Supervisory Board

Director (Senior Executive Officer)

Yutaka Kuroda

Outside Audit &Supervisory Board Member*

Director (Senior Executive Officer)

3 Outside

Hirofumi Yasuhara

Naofumi Harada■N umber of members stipulated

5in the Articles of Incorporation

Audit &
Supervisory
Board Member(of which 1 is awoman)

Executive Officers

5■ Term of office

2 Internal

4 years

Senior Executive Officer
Director (Senior Executive Officer)

Outside Director*

Mitsuteru Tanigawa

Keizo Kosaka

Naoki Yamada
Takanori Aoi

Hidekazu Nishiguchi
Kiyoshige Muraoka

Executive Officer

Outside Director*

Outside Director*

Kenji Murakami

Nobuyuki Kobayashi

Toshihiko Komatsu
Tomohiko Masuta
Masatsugu Nishino
Eiichi Masuda
Kenji Saito
Hirotoshi Murakami
Richard Smallwood
Hideaki Kawamatsu

Akio Onishi
Naofumi Yanetani
Atsuhiko Tanaka
Fumikazu Yamashita
Yasuo Watanabe
Riaz Haffejee
Takuzo Iwata
Naoki Okawa

Nomination and Remuneration Committee
3 Outside Audit &Supervisory Board
Members

2 Internal
Directors■N omination and Remuneration

Officercomposition:

8

Committee chair

Outside Director■ Term of office

1 year3 Outside
Directors

Note: Positions that are listed within parentheses alongside director titles indicate the managerial positions of Executive Officers of the Company.
* Registered as independent officers in accordance with regulations stipulated by the Tokyo Stock Exchange

35

Integrated Report 2020

Integrated Report 202036

Corporate Governance① Board of Directors and Directors

14 meetingsin fiscal 2019

Corporate Governance Structure(as of March 26, 2020)

The Board of Directors, composed of all of the Company’s Directors

meets once a month, but it also holds extraordinary meetings when

Appointment/Dismissal

ReportReportnecessary, such as at the end of the fiscal year and when the books
are closed at the end of the first half. In fiscal 2019, the board met 14   Director candidates are nominated taking into consideration
whether they can contribute to the sustainable enhancement of thecorporate value of the Company, including factors such as their

1. Board of
Directors
Chair : Chairmanof the Board(Business Execution
Supervision)

contribution to achieving effective corporate governance andensuring the diversity of board members in terms of knowledge,

Consult

Adviceexperience, etc.

3 meetingsin fiscal 2019

Business
Executionand subsidiaries while working closely with Accounting Auditor toensure that audits are conducted in an appropriate manner.

4. Audit &Supervisory Board

Remuneration
Committee(Legal Audit)(Validity Audit)

Committee Chair: Outside
Director (Independent
Officer)   The Audit & Supervisory Board consists of 5 members, of which
2 are selected as standing Audit & Supervisory Board Members. In
addition to attending important in-house meetings, the board confirms

Accounting Auditor

Cooperation

important documents for approval. From the aspect of reinforcing themanagement auditing function, 3 of the 5 Audit & Supervisory Board
Members are Outside Audit & Supervisory Board Members, securing

Audit

Appointment/
Supervision

Reporta structure to conduct fair and objective audits. The Audit &Supervisory Board meets once a month in general. In fiscal 2019, theboard met 12 times, and Outside Audit & Super visor y Board
Members attended 97% of Audit & Supervisory Board meetings.

Cooperation
Audit Department
Cooperation(Business Audit)(Internal Control Audit)

President

5. Management Meeting

Accounting Audit

Internal Audit

Executive Officers

4 meetings

Each Business Operation Division and Group Company

ReportGuidancein fiscal 2019

International Business Development & Administration Dept., Legal Dept.
Instruction/
Guidance

Cooperation

Advice

The committee oversees the Group’s risk management activities andappropriately examines and confirms whether business risks andother risks have been recognized and discussed and whether therisk management system is functioning effectively.

Legal Counsel

3. Corporate Ethics Committee 6. The Risk Management Committee(Legal Compliance)   The committee consists of the officers responsible for management;

Cooperation

research, design, and development; production; and sales and eachbusiness department, with the President serving as the committee
chair. The 2 standing Audit & Supervisory Board Members attend as
observers. The Management Meeting was convened twice in fiscal 2019.

Cooperation

Compliance Consultation office(Corporate Ethics Help Line)

committee chair. In addition, 2 standing Audit & Supervisory Board
Members participate as observers. In fiscal 2019, the committee not
only met 4 times but also held a corporate ethics lecture meeting toraise awareness of corporate ethics throughout the Group.

2 meetingsin fiscal 2019

⑥ Risk Management Committee

Human Resources & General Affairs Dept., Accounting & Finance Dept.,

Reportin fiscal 2019

The Meeting makes prompt management decisions delegated to it
by the Board of Directors through discussions or the reporting ofmatters considered to be important to management.
   The meeting consists of internal Directors, standing Audit &Supervisory Board Members, and Executive Officers appointed by
the President, and the officer in charge of corporate planning serves
as the chair of the meeting. The Management Meeting wasconvened 25 times in fiscal 2019.

Audit
Report25 meetings⑤ Management Meeting(Business Execution)(Establishment of Business Plans)

The committee identifies, analyzes, and evaluates compliance risks
throughout the Group, plans and conducts training, ascertains thecause of violations, proposes preventive measures, and thoroughly
disseminates information on that throughout the Group.
   The committee is composed of the of ficer in charge or
corporate ethics (officer in charge of general affairs), officer in chargeof audits, officer in charge of legal affairs, Audit Department
Manager, Human Resources & General Affairs Department Manager,and Legal Department Manager, with the President serving as the

Cooperation

		The SRI Way / Code of Conduct

Fiscal 2019
Attendance at Board of
Directors meetings

Name

Reason for selection

Keizo
KosakaMr. Keizo Kosaka provides valuable comments and opinions from an objective perspective, leveraging his
abundant knowledge as an attorney who excels at corporate legal affairs and experience in corporate
management as a Chairman of Irokawa Legal Professional Corporation, outside auditor of Toyo Aluminium K.K.,
Sekisui Plastics Co., Ltd., and Techno Associe Co., Ltd. The Company requests his appointment based on its
judgment that he would contribute to the improvement of the Company’s corporate governance.

14 of 14 times

Kenji
Murakami

Mr. Kenji Murakami has ample knowledge in corporate management, with substantial experience in corporate
management as Representative Director, President and COO of Daiwa House Industry Co., Ltd. The Company
requests his appointment based on its judgment that he would contribute to the improvement of theCompany’s corporate governance.

14 of 14 times

Nobuyuki
Kobayashi

Mr. Nobuyuki Kobayashi has been engaged mainly in the accounting and finance section at Sumitomo ElectricIndustries, Ltd. and gained extensive experience and broad insights as a manager, based on his experience asManaging Director of the said company. The Company requests his appointment based on its judgment that hewould contribute to the improvement of the Company’s corporate governance.

Appointed in March
2020

Integrated Report 2020

implements on-site audits at the Head Office, major business sites

Appointment/
Dismissal

2. Nomination andReport   The committee consists of a total of 9 members, 6 of whom areoutside officers, and an Outside Director serves as the committee
chair. There was 96% attendance among members in fiscal 2019.

37

internal audit office; reviews important approval documents; andAppointment/Dismissal

Internal Control Auditor

In an effort to further increase corporate value, the committee wasestablished in 2016 as a voluntary advisory body to the Board of
Directors to ensure objectivity and transparency in nomination of officers
and decisions regarding remuneration. In fiscal 2019, the committee met
3 times and discussed various issues regarding nominations (training
succe ssor s, of f icer s, etc.) and remuneration (introduction of
performance-based remuneration and stock options linked to mediumand long-term business results, director bonuses, etc.).

OutsideDirector

attends important meetings, including Board of Directors’ meetings;
hears reports on the status of job execution from Directors and

Audit

Scope ofInternal
Control
Auditing

times, and attendance of Outside Directors was 98%.

OfficerSupervisory Board, each Audit & Supervisory Board Member

General Meeting of Shareholders

determines matters of managerial importance and supervises
Directors’ execution of operations. Generally, the Board of Directors③ Corporate Ethics Committee

in fiscal 2019

In accordance with audit plans and policies set out by the Audit &and Audit & Supe r v isor y Board Me mbe rs, de libe rate s a nd

② Nomination andRemuneration Committee

12 meetings④ Audit & Supervisory Board andAudit & Supervisory Board Members

Officer

OutsideAudit &
Supervisory
Board
MemberAttendance at meetings infiscal 2019
Audit &
Board ofSupervisory
Directors
Board

Name

Reason for selection

Morihiro
MurataMr. Morihiro Murata expresses opinions on the execution of business by directors from an objective
viewpoint as an outside audit & supervisory board member, based on his considerable knowledge in financeand accounting as a certified public accountant and tax accountant and corporate management experience
while serving as outside director, audit & supervisory committee member of Kagome Co., Ltd., as well as
outside audit & supervisory board member of Kokuyo Co., Ltd. The Company requests his appointment
based on its judgment that he would contribute to the reinforcement of the Company’s audit system.

13 of 14times

11 of 12
times

Asli M.
ColpanMs. Asli M. Colpan has extensive knowledge in corporate management based on her advanced academic
knowledge as a professor specializing in management strategy and corporate governance, as well as
experience of involvement in corporate management as an Outside Director of Gourmet Kineya Co., Ltd.
and NISSHA Co., Ltd. The Company has appointed Ms. Colpan as an Outside Audit & Supervisory Board
Member in expectation that her opinions and suggestions based on such knowledge will contribute toreinforcing the Company’s audit system.

14 of 14times

12 of 12
times

Hirofumi
Yasuhara

Mr. Yasuhara has ample knowledge of corporate management, with experience in corporate management
as Representative Director, President of PanaHome Corporation (currently Panasonic Homes Co., Ltd.), as
well as Senior Audit & Supervisory Board Member of Panasonic Corporation and Outside Auditor of Santen
Pharmaceutical Co., Ltd. The Company requests his appointment based on its judgment that he would
contribute to the reinforcement of the Company’s audit system.

Appointed in March 2020

Integrated Report 202038

Corporate GovernanceEvaluation of the Effectiveness of the Board of Directors

Remuneration of Directors and Audit & Supervisory Board Members

Since 2016, Sumitomo Rubber Industries has conducted regularcomposition, operation of the board (frequency of meetings,

survey questionnaires for all Directors and Audit & Supervisory

discussion time, etc.), deliberations by the Board of Directors,

Board Members regarding various aspects of the Board ofmonitoring of the business execution, etc.

Sumitomo Rubber Industries’ remuneration for Directors andalso takes into account the contributions made by each individual to

Directors, including its composition and operation, and then the  With regard to providing fuller information to outside officers,

Executive Officers consists of basic remuneration and bonuses. The

the progress of medium- and long-term business plans. In these

Board of Directors conducts deliberations based on the results ofwhich was proposed in the previous survey, we have strengthened

basic remuneration is determined based comprehensively on eachways, the Company is providing Directors and Executive Officers

the survey in order to increase the effectiveness of the Board of

the sharing of information related to the Management Committee,

individual’s position, duties and responsibilities as well as thewith incentives to achieve sustainable business growth. As for

Directors.

Corporate Ethics Committee, and Risk Management Committee

Company’s business results. Directors’ remuneration is paid within

performance-based remuneration and stock options linked to   In fiscal 2019, the survey was conducted between September

since 2019, and have confirmed that this led to a reinvigoration of

the framework approved at the Company’s general meeting of

medium- and long-term business results, the Company will engage

and October, and discussions were held in December. The results

discussions at Board of Directors meetings.

shareholders. The amount of each bonus is determined inin ongoing in-house discussions as well as dialogue with its

confirmed the overall effectiveness of various aspects of the Board  We will work on maintaining its environment and, as necessary,

accordance with an evaluation of the Company’s business results

shareholders to assess the optimal timing for the introduction andof D i r e c to r s, i n c l u d i n g n u m b e r of d i r e c to r s a n d m e m b e r

execute measures to enhance its effectiveness.

as well as each Director’s business execution. The amount ofdetermine the form of remuneration. The Company determines the

remuneration for Audit & Supervisory Board Members is determinedamount of remuneration for Directors and Executive Officers basedin discussions among Audit & Supervisory Board Members andon a resolution of the Board of Directors after examining proposals

paid within the framework approved at the Company’s generalsubmitted by the “Nomination and Remuneration Committee,”meeting of shareholders. Although stock-based incentives are notwhich discusses the matter from objective and unbiased viewpoints,

paid, the Company encourages the purchase of its stock through awith independent Outside Directors comprising the majority ofstockholding association scheme for Directors and Executive

members.

Board of Directors
Fiscal year ofquestionnaire survey

Before 2017

Measures to enhance effectivenessMeasures taken (implemented in the fiscal year
following that in which the questionnaire survey was conducted)

Issues・Extend discussion
times in relation to
strategic matters
・More complete
information to beprovided to
officers in advance aising the monetary criteria for tabling an item at a Board of Directors meeting●R・Monetary limit for tabling an item at a Board of Directors meeting was raised in order to discontinue
the tabling of insignificant items, and enable that time to be used to discuss strategic and important
issues.
● Earlier provision of materials

・Revised certain operating rules so as to enable materials provided in advance to be sent out earlier.
 ore complete information to be provided to outside officers in advance
●M

2018

・Revitalization of
discussions

・Hitherto, regular “Management Meeting Reports” and “Executive Officer Reports” had beenpresented to the Audit & Supervisory Board Members, in a different setting to that of the Board of
Directors, and outside Directors were added to this arrangement.
・Regular new reports to the Board of Directors also began in relation to the status of the Corporate
Ethics Committee and the Risk Management Committee.

Remuneration Amount and the Company’s Policies for Determining Its Calculation Method

Officers. When determining the amount of bonuses, the Company

Remuneration for Directors and Audit & Supervisory Board Members
Type

Number of persons paid

Amount paid

Director

13¥526 million

Audit & Supervisory Board Member

6¥76 million

Notes:
1. In accordance with a resolution at the 123rd Ordinary General Meeting of Shareholders held on March 26, 2015, the maximum total amount of remuneration for Directors and Audit &Supervisory Board Members was set at ¥800 million per year (of which ¥70 million per year is for Outside Directors) and ¥100 million per year, respectively.
2. The number of persons paid above includes one Director and one Audit & Supervisory Board Member who resigned as of March 26, 2019.

 urther steps to provide more complete information to outside officers in advance
●F

2019

・Furtherrevitalization of
discussions

・Hitherto, explanations of the content of discussions at the Management Meeting related to agenda
items at the Board of Directors had been sent in advance to outside officers, but we will work toensure that sufficient time is allowed, and share more specific details.
● Improvements to the operation of reports on business of which executive officers are in charge

・Hitherto, executive officers had presented regular reports on business of which they are in charge
at Board of Directors meetings, but we will revise the way this is operated to provide solid
opportunities to exchange opinions, based on specific reporting themes.

Main topics of discussion at Board of
Directors meetings in 2019 (agenda items)

The Group is focusing on training next-generation managers and(critical thinking). Starting in 2003, approximately 20 people haveoverseas base managers.

been selected each year, and classes are offered throughout the  A Management School was established so that candidates can

year. Management attends the last meeting, and reports on issues

acquire skills related to perspective (viewing things as a manager),such as future business expansion are provided. This is the training

knowledge (basic knowledge required of management), and thinkingof next-generation managers.

Implementation and Status of the Internal Control System
Based on “compliance with social norms,” which is stipulated in thecorporate ethics while pursuing sound business operations. To that

Company’s “Corporate Code of Conduct,” Sumitomo Rubber

end, the Company formulated “Regulations on Corporate Ethics

Industries maintains the guideline that “corporate activities must

Activities” in February 2003. Simultaneously and in line with theseadhere to laws and ordinances, social norms and standards ofregulations, the Company established the “Corporate Ethics● R esponse going forward in relation to the results

public decency.” Moreover, the Company has established “systems

Committee,” which meets on a quarterly basis and is chaired by theof the questionnaire survey on the effectivenessto ensure that in the execution of their duties, Directors comply with

President, with the aim of strengthening its Group-wide complianceof the Board of Directors

laws and the Company’s Articles of Incorporation and that Groupsystem. Fur thermore, Sumitomo Rubber Industries set up a

operations undertaken by the Company and its subsidiaries are“Corporate Ethics Helpline (Compliance Consultation office)” directly

always appropriate,” thereby securing strict legal compliance. In

controlled by the President as a corporate ethics helpline for

addition to complying with laws and its Articles of Incorporation,

employees. With a close eye on legal issues, the Company also

Sumitomo Rubber Industries aims to fulfill its corporate social

takes such measures as seeking advice from corporate attorneys as

responsibilities and, to this end, has established a strict code ofcircumstances demand.

● P rogress report and issues related to the Midterm

Plan for each business● S tatus of the Risk Management Committee andCorporate Ethics Committee● D isposal of part of Cross-shareholdings

39

Training the next-generation managers

Integrated Report 2020

Integrated Report 202040

Corporate Governance

Organizational chart of Group-wide risk
management system

Risk Management
For the purposes of risk management, the Sumitomo Rubber Group

Board of Directors

defines risk as “factors that could impede, or have a detrimental

Ascertaining risks related to businessstrategy

effect upon, the harmonious conduct of business activity or theachievement of management objectives and strategies undertaken

Risk Management Committee(Chair: President)

in accordance with the Group’s management philosophy.”  We determine the relative importance of risks by taking into
account not only their financial impact but also the four issues ofActivities of
the Sumitomo
Rubber Group eceives reports on the effectiveness◦Rof risk management, confirms/considers
improvements
 eceives repor ts on incidents and◦Rmeasures to prevent recurrence, etc.,
submits countermeasures or proposals
for countermeasures to the Committee
agenda atters related to control of Group risk◦Mmanagement activities

whether we can “ensure quality and safety,” “maintain good
relationships with stakeholders,” “comply with laws and regulations
and maintain corporate ethics,” and “abide by the Sumitomo
Business Spirit, the “Group Management Philosophy, and the“Corporate Code of Conduct.”  In fiscal 2019, we continued to take measures to mitigate majorGroup-wide risks. In addition, we performed additional risk analysis
that included overseas bases, in order to update major Group-wide

Departments

Risk Management Committee Secretariat

risks. In fiscal 2020, we will enhance activities such as implementing
measures in response to the updated list of major risks.

CSR

Subsidiaries
under jurisdiction◦ Investigations/checks on the state of risk
management in depar tments and Group
companies eports to Committee on problems related◦R
to deficiencies and effectiveness of risk
management system torage/management of Risk Management◦S
Committee records
 ormulation and promotion of BCP, support◦F
for departments formulating BCP

Compliance

CSR Guidelines                                                                                                                                                                                       In the Sumitomo Rubber Group, we believe that “legal compliance

Compliance Consultation office, a system that has continued to thisSince 1988, the Group has had in place the “GENKI

and the upholding of corporate ethics form the cornerstone of aday.

Activities” project (meaning activities that give everybody

company’s survival and are crucial to long-term corporate vitality  In April 2018 we issued an English version of the “Sumitomoenergy), in which employees take part in volunteer andand competitiveness,” and in February 2003 we formulated the

Rubber Group Code of Conduct.” We will continue our efforts to“Regulations on Corporate Ethics Activities” and the “Sumitomo

improve compliance awareness on a Group-wide basis.

e nvironme ntal conser vation activitie s as a way to

Rubber Group Code of Conduct,” as well as established acontribute to society.
These activities have become ex tended and firmly
entrenched throughout the Company and Group. In 2008,

Structure of compliance initiatives

GENKI* was set as a keyword in our CSR Guidelines.
Employees play a key part in these activities, and therefore

Board of Directors

Audit & Supervisory Board

ensuring that they are all familiar with this key word
increases awareness of CSR and improves the activities

Notification as necessary

themselves.

Corporate Ethics Committee

Notification as necessary

Discussion between Head of Compliance Consultation
office and officer in charge of corporate ethics
Corporate Ethics Help Line (consultation desk)
Compliance Consultation officeDirect consultation

Notification as necessary◦ Feedback on consultation items◦ No disadvantageous treatment resulted from consultation◦ Confidentiality of person seeking consultation maintained
Employees

41

Integrated Report 2020

Legal Counsel

Direct consultation* GENKI stands for the five basic categories of our CSR activities: "Green" (Green initiative), "Ecology"(Ecological process), "Next" (Next-generation product development), "Kindness" (Kindness to employees)
and "Integrity" (Integrity for stakeholders). The word "genki" also means "energetic" in Japanese.

Integrated Report 2020

42

CSR Activity Report

Sumitomo Rubber Group’s
CSR Efforts
The Sumitomo Rubber Group contributes to initiatives undertaken to achieve the SDGs through activities
informed by its “GENKI” CSR guidelines.
Details of the GENKI Activities

SDGs to contribute to

Activities in fiscal 2019 (Page no.)1 Helping to curb global warming throughCollaborative Activities with
Local Residents, etc.

Protecting Culture andNature2 Fostering better relationships with local

To achieve forest creation tailored toeach region, we promote activities inwhich not only employees but also
local residents, regional organizations
and other related parties participate.

With the goal of protecting Japan’svanishing cultural assets and naturalenvironment, we are working on the“Team ENASAVE Future Project.”

tree planting

communities through tree planting

P.50

P.49

3 Preserving biodiversity

E
Environment

Engaged in collaborative activities with local
residents, etc. in “Sumitomo Rubber GENKI
Forest,” a green initiative in Japan

4 Creating a low-carbon society

Implementing Global

5 Building a recycling-oriented society

While accelerating its globalization, theGroup is focusing even greater energy
on implementing global environmental
management.

6 Promoting environmental footprint
management

7 Implementing global environmental
management

8 D eveloping environmentally friendly
products

Improving Environmental
Awareness in Japan andOverseas

Environmental Management

We are carrying out educational andpromotional activities to increase
environmental awareness in Japanand overseas.

P.54
Global Environmental Management Central
Committee(Kobe Head Office)

P.54
Exhibition and briefing on energy saving at
Turkey Factory

Promoting New Technology Development“SMART TYRE CONCEPT” with an Eye on

Sensing Core

the Upcoming Mobility Society
The Group pushes for ward with technology
development with the aim of completing a revolutionary
new tire by the late 2020s.

9 Pursuing “safety and comfort,”

Participated in the activities of Fukui
Prefecture’s “Society of Farms and Citizens
for the Protection of Water Margins andCreatures,” and managed biotope

LCA

Performance
Sustaining
Technology

P.55“economy” and “quality”

Airless Tires

Active Tread

ENASAVE NEXT III

 Fostering human resources and making

S
Socialwork rewarding Creating a safe, employee-friendly
workplace Achieving a good work-life balance

Fostering Human Resources
T h e C o m p a ny s u p p o r t s p e r s o n a l
growth of its employees by providing
training in respect for their motivation
to grow.

P.57

 Promoting social contribution activities
 Enhancing corporate governanceG
Governance Ensuring thorough compliance Promoting dialogue with stakeholders
 Supply chain management

In order to share the thoughts andvision of managers with employees,
opportunities for dialogue have also
been established at production sites.

P.57

 Promoting diversity
 Respect for human rights

Creating a Safe, EmployeeFriendly Workplace

CSR training for those promoted tofull-time employee

President Yamamoto giving a talk

Promoting Social Contribution
Activities

Promotion of CSR
Procurement

We promote social contribution
activities that are closely connected to
local communities and residents near
our factories.

The Group aims to promote CSR
procurement (socially responsible
procurement) considering not only
quality, cost and delivery time, butalso regulatory compliance, humanrights and labor ethics.

P.59
Employees from the Nagoya Factory
participating in street patrols to encourage
safe driving

P.60
Supplier meeting at Thailand Factory natural
rubber processing* GENKI stands for the five basic categories of our CSR activities: "Green" (Green initiative), "Ecology" (Ecological process), "Next" (Next-generation productdevelopment), "Kindness" (Kindness to employees) and "Integrity" (Integrity for stakeholders). The word "genki" also means "energetic" in Japanese.

43

Integrated Report 2020

Integrated Report 2020

44

CSR Activity Report

Fiscal 2019 Targets and Results

Based on our “GENKI” CSR

targets for fiscal 2020.
Let’s look at the main targets.

The Group sets forth the CSR Guidelines as its action guidelines and is proactively pushing forward with the CSR
Activities that are in line with the action guidelines GENKI Activities while categorizing them into “Green,” “Ecology,”“Next,” “Kindness” and “Integrity.”
Plan: Fiscal 2019 Target

1 Helping to curb global warming
through tree planting

2 F ostering better relationships with local
communities through tree planting

3 Preserving biodiversity

GRI Guidelines

Plan: Fiscal 2019 Target

the achievements and set

The Sumitomo Rubber Group is striving to be a corporate group that is trusted by society through fulfilling its
corporate social responsibility toward the creation of a better society.

CSR Activity Guidelines

Fiscal 2020 Target Action

Guidelines, we have verified

Self-assessment Check

Do: Fiscal 2019 Activity Result

Items marked with “◎” have been verified by third parties. (excluding environmental impact indicators.) Details of “Fiscal 2019
Activities and Fiscal 2020 Targets” are available on our website. (scheduled to be released at the end of June 2020)

Do: Fiscal 2019 Activity Result

Self-assessment*¹● Planted trees for the Million Trees for Local Forests Project (including mangrove● Promote the Million Trees for Local Forests Project304-3● Creation and maintenance of GENKI Forests in Japan

planting)*2 Fiscal 2019: 38,552 trees planted Cumulative total: 1,744,851 trees planted

100％● Conducted tree planting/maintenance activities 33 times● Planted acorn trees and provided seedlings; Fiscal 2019: 9,631● Promote the Acorn Project● Expand interaction with communities, including giving away seedlings● C ontinue to protect and raise endangered species. In particular, getting the raising of

the Sasakia charonda at the Okayama Tire Proving Ground on track● Reduce global life-cycle CO2 emissions per tire by at least 12.5% compared to 2005 levels

413-1

Cumulative total: 191,986 trees

100％● 8,776 acorn seedlings given away to communities

304-3● C onducted activities to protect 21 endangered species at eight sites in Japan●S
 et up conservation cages for Sasakia charonda at the Okayama Tire Proving Ground70％

Action: Fiscal 2020 Target● Promote the Million Trees for Local Forests Project● Promote the creation and maintenance of GENKI Forests in Japan● Continuing

our contributions to, and fostering better relationships with, local
communities through tree planting, forest creation and provision of seedlings● Continue protection of 21 endangered species, etc.
● Successful hatching of Sasakia charonda at the Okayama Tire Proving GroundＥ

302-1,2,5

13.3% reduction100％● ≥15.0% reduction over fiscal 2005

302-3

1.6% reduction100％● ≥1.0% reduction over the previous fiscal year

305-4

3.2% reduction100％● ≥1.0% reduction over the previous fiscal year

306-2

0.3% increase99％● ≥0.5% reduction over the previous fiscal year

(Six factories in Japan)◎3● Environmental impact indicator of water usage* : ≥ 1.9% reduction over the previous fiscal year

303-1

2.6% reduction100％● ≥1.0% reduction over the previous fiscal year

(Six factories in Japan)● NOx, SOx, and dust: ≥ 80% reduction over fiscal 2005 levels

305-7

82.3% reduction100％● ≥80% reduction over fiscal 2005

7 Implementing global● Maintain ISO 14001 Global Multi-Site Certification

103-2

Maintained100％● Maintain Global Multi-Site Certification

8 Developing environmentally● Develop and launch environmentally friendly products

302-5

100％

● Develop and launch environmentally friendly products

9 Pursuing “safety and comfort,”● Commercialize new technologies

416-1

100％

● Commercialize new technologies

4 Creating a low-carbon society(Six factories in Japan)●
E nvironmental impact indicator of energy usage (crude oil equivalent)* 3: ≥1.2%
reduction over the previous fiscal year

5 Building a recycling-oriented(Six factories in Japan)◎●E nvironmental impact indicator of CO2 emissions*3: ≥ 1.4% reduction over the previous fiscal year
(Six factories in Japan)◎3● E nvironmental impact indicator of waste disposal (excluding valuables)* : ≥ 0.7%
reduction over the previous fiscal year

society romoting environmental footprint
6P
management
environmental management

friendly products“economy” and “quality”● Development and launch “ENASAVE NEXT III” using key technologies from the

SMART TYRE CONCEPT● Launched the “DUNLOP ALL SEASON MAXX AS1” all-season tire

● Plan global human resource training starting in the second half of 2019 in order to Fostering human resources

and making work rewarding

develop global human resources   Cultivate a broad-range of management-related knowledge and skills, including
understanding of one’s own company, finance and accounting, marketing,management, cross-cultural understanding, and problem-solving methods●E nliven various activities as a work style reform promotion project
Solve issues that each of the following subcommittees are involved in [1] Education & Mutual
Understanding, [2] COMPAIT ★ activities, [3] Globalization, and [4] Human Resources System● Use safety indicators that evaluate safety of each base (KPI) and promote activities toＳ reating a safe, employeeCfriendly workplace Achieving a good work-lifebalance Promoting diversity

 Respect for human rights Promoting social contribution
activities

ascertain weaknesses and make improvements in order to increase workplace safety● Implemented multifaceted evaluation and leadership training for managerial positions,● Did not begin global human resource training, but implemented training for

404-2

cross-cultural understanding, with the aim of achieving mutual understanding,which is the foundation of communication, at each site

70％

● Publicize to employees the commitment top management has made to work

404-2

403-2

style reform, and begin full-scale activities based on diversity & inclusion, anddigitalization. First in the industry to obtain L-Star Mark (Level 2)● Reduce work accidents by promoting safety indicators (KPI) activities,
ascertaining the strengths and weaknesses of each base, and performing
activities side by side

including officers
Take further steps to cultivate a culture of mutual feedback, and create workplaces thatenable open-minded exchanges of opinion● Implement course on unconscious bias for personnel in managerial positions and higher,

80％

80％

including officers, and work to eliminate as far as possible the unconscious bias andprejudice that causes obstacles to diversity● In order to improve workplace safety, continue to conduct evaluations based on safety
indicators (KPI), formulate a plan for each base, and carry out activities to overcome
weaknesses in safety activities● After the 30% reduction in days of mental and physical sick leave recorded from● Promote activities to implement the health & productivity management declaration(maintenance and improvements in health through heightened awareness of health,disease prevention, and thorough implementation of mental health measures)

403-2● Promote use of childcare leave by male employees

2017 to 2018, the number increased by 4% in 2019. The Company was selected
for the first time as a Health & Productivity Stock Selection for practices in linewith its Health & Productivity Management Declaration, including thoroughfollowing-up of employees whose medical checkups revealed health problems● In addition to reducing days of mental and physical sick leave, practice initiatives under90％● Number of male employees who used childcare leave: 9401-3● Promote use of shortened working hours for childcare by employees● Operate a daycare support system●N umber of employees who used shortened working hours for childcare: 20● Promote use of childcare leave by male employees

100％● Number of employees who used the daycare support system: 23● Continue to recruit female employees and employees with disabilities● U tilize talented human resources on an ongoing basis, regardless of gender, etc.
● Hold training on human rights

405-1
412-2

● Number of female employees in managerial position: 22● Percentage of employees with disabilities: 2.23%● Hold training on human rights

102-44● Work together with NPOs (continue and expand activities)● Manufacturing workshops for elementary school students: held at six schools● Promote use of shortened working hours for childcare by employees● Promote the use of various systems

80％● Support work styles that leverage the diversity of individuals

80％● Hold training on human rights● Rate of joining the CSR Fund: approximately 43%● Promote joining the CSR Fundthe Health & Productivity Management Declaration to improve lifestyle habits, based on
the concept of “enjoying exercise to build a healthy body”

100％● Environmental workshops: held seven times for four groups● Promote joining the CSR Fund
● Work together with NPOs (continue and expand activities)● Implement revisions to approval rules, confirm results and issues from the evaluation Enhancing corporate governanceof the effectiveness of the Board of Directors, trim strategic shareholdings, etc.

● Increase the effectiveness of the Corporate Governance Code102-18● Expand scope of BCP and conduct BCP training on a regular basis● Continue to promote activities to mitigate major risks

Ｇ Ensuring thorough compliance P romoting dialogue with stakeholders Supply Chain Management* GENKI stands for the five basic categories of our CSR activities: "Green" (Green initiative), "Ecology"(Ecological process), "Next" (Next-generation product development), "Kindness" (Kindness to employees)
and "Integrity" (Integrity for stakeholders). The word "genki" also means "energetic" in Japanese.

45

Integrated Report 2020

● Implement more practical BCP training, promote formulation of BCP and BCP

training by subsidiaries● Continued to take measures to mitigate major Group-wide risks, performed
additional risk analysis to update major Group-wide risks● Created systems for compliance activities at Group companies in Japan andoverseas● Conducted various briefings at Group companies in Japan and overseas andprovided training on bribery prevention, compliance with competition laws,
prevention of misconduct, and legal risks, particularly at overseas group companies● Further increase the effectiveness of corporate governance100％● Continued to set out and expand the content of BCP, and to implement training● Implement measures to counter updated major risks● Enhanced legal audits for overseas group companies● In terms of grade-specific compliance training, and specialization-specific training, conduct training on● Promote the Group’s compliance and risk management102-16● Promote dialogue with a range of stakeholders

102-44● Conducted stakeholder dialogues at each operation base100％

● Promote dialogue with a range of stakeholders● Issue the Purchasing Guidelines Ver. 6 and promote CSR in the supply chain

102-43● Issue the Purchasing Guidelines Ver. 6 and promote CSR in the supply chain

100％● Implement CSR questionnaires and CSR briefings*1 Self-assessment uses comparison with baseline year (1 – reduction ratio) in the following formula
to calculate achievement rate:
target value – actual value
1－││ ×100%target value

（

）

100％

such subjects as the Corporate Code of Conduct, competition laws, the Act against Delay in Payment
of Subcontract Proceeds, Etc. to Subcontractors, the Act against Unjustifiable Premiums andMisleading Representations, the Foreign Exchange and Foreign Trade Act, prevention of bribery, etc.

*2 In addition to plantings, 12,557 seedlings were provided in 2019 (cumulative total: 90,896)*3 The denominator for calculating environmental impact indicator is the new rubber consumption amount (consumption of natural rubber + synthetic rubber). 2020 targets are by product weight.

Integrated Report 2020

46

CSR Activity Report

Identifying Materiality and Dialogue with Stakeholders
Taking into account international guidelines and stakeholders’ views, we determined the materiality of CSRrelated activities (priority issues).
We have prioritized the 19 indicators of the CSR guidelines, and will further work towards these initiatives.
Materiality Identification Process

Stakeholder Dialoaues

To energize the CSR activities of the Sumitomo Rubber GroupWe periodically carry out surveys to learn about the various   We are conscious of our responsibilities towards

and become a corporate group trusted by society, in fiscal

opinions and expectations of stakeholders, and while taking

stakeholders, and are working to promote communications

their views into account, we also place importance on daily

through a variety of means.

2008 the Group formulated its Basic CSR Philosophy and its
CSR Guidelines (five areas comprising 13 indicators) made upof the five areas of “Green (Green initiative),” “Ecology(Ecological process),” “Next (Next-generation productdevelopment),” “Kindness (Kindness to employees)” and“Integrity (Integrity for stakeholders).”

Survey and questionnaire for stakeholders❶ Supplier CSR interview surveys❷ CSR report readers questionnaire (employee)❸ Environmental brand survey❹ Employee questionnaire

dialogue with stakeholders in pursuing our business activities.

How We Communicate with Stakeholders❺ Comprehensive consumer survey

Features❻ Questionnaire to individual shareholders   In fiscal 2011, we identified which of these 13 indicators

Customersin the CSR Guidelines were the most impor tant (their“materiality”).

Setting of priority items in terms of “Important Issues for   In fiscal 2014, taking into account the impact on

Stakeholders” and “Important Issues for the Sumitomo

stakeholders and society due to changes in the business

Rubber Group,” based on the survey results and in light of theenvironment, we set 19 key CSR indicators.

Automobile manufacturers,
manufacturing companies,● Quality management

sales companies, sports facilities,etc.

● Safe driving awareness● Development of safer products● Providing product information andservicesindicators, taking into account required content in the “GRI

Determining materiality and prioritization

Business
partners

Rubber raw materials
manufacturers, other materials
manufacturers, trading companies,
processing companies, etc.

● Fair and reasonable procurement● CSR procurement

contact● Customer response through service

and sales departments● Providing information via website and● Dialogue through day-to-day

business● Confirmation visits to procurement

partners, and feedback● Questionnaires to procurement

aimed at attaining each CSR target.

partners● Explanatory meetings, etc.

* Global Reporting Initiative: An international organization that issues CSR reporting guidelines. Currently issues the GRI Standards.

19 Indicators Included in “GENKI” CSR Guidelines, and Materiality (2016 onwards)

Important Issues for Stakeholders

6 Promoting environmental footprint management
7 Implementing global environmental management
 Promoting dialogue with stakeholders

1 Helping to curb global warming through tree

planting
2 Fostering better relationships with local communities
through tree planting Promoting social contribution activities

4 Creating a low-carbon society
5 Building a recycling-oriented society
8 Developing environmentally friendly products
9 Pursuing “safety and comfort,” “economy” and “quality”
 Enhancing corporate governance Ensuring thorough compliance

Local
community

Residents, municipalities, local
government, educational
institutions, and other organizations
near factories and offices● Social contribution activities● Participation in local events● Green initiatives● Cooperation with NGOs and NPOs

● Preserving biodiversity

industry organizations● Dialogue with local governments,

etc.

Shareholders
and investors

Number of shareholders: 36,845(individual and institutional investors,
etc.)(as of December 31, 2019)● Return of profits to shareholders● General meeting of shareholders● Enhancement of corporate value● Timely disclosure of news releases

through dialogue with shareholders
and investors

 Achieving a good work-life balance Promoting diversity
 Respect for human rights
 Supply chain management

Important Issues for the Sumitomo Rubber Group* GENKI stands for the five basic categories of our CSR activities: "Green" (Green initiative), "Ecology" (Ecological process), "Next" (Next-generation product development), "Kindness" (Kindness toemployees) and "Integrity" (Integrity for stakeholders). The word "genki" also means "energetic" in Japanese.

and publications● Issuance of financial information

including fact books and shareholder
communications● Providing information via website andother media● Results briefings, etc.

3 Preserving biodiversity
 Fostering human resource development and making
work rewarding Creating a safe, employee-friendly workplacein social contribution activities● Participation in economic and

Employees

Sumitomo Rubber Group: 39,233;● Fostering human resources

Sumitomo Rubber Industries:
7,325● Occupational health and safety(male employees: 6,519,● Diversity in employment● Health management

female employees: 806)

● Consideration of work-life balance(as of December 31, 2019)● Consideration of human rights● Dialogue with employees

Integrated Report 2020

● Customer consultation and service● Exhibitions and events, etc.

stakeholders. This report presents the results of such efforts

47

Communications method

other media“GENKI 5 Key Areas, 19 Indicators”   In fiscal 2015, we prioritized ef for ts for these 19
G uid e line s (G4)*” a nd base d on a sur vey of va r ious

Main responsibilities● Providing information through internal

newsletters, intranet, etc.
● Consultation with labor-management

councils and employee representatives● Compliance consultation service● Round-table discussions withpresident to exchange views withmanagement● Integrated Report questionnaire, etc.
(as of December 31, 2019)
Integrated Report 202048

Forests absorb CO2 which contributes to global warming, andare an impor tant social infrastructure for preser vingbiodiversity. Based on the thought that preserving thisinfrastructure is one of our corporate social responsibilities,
we promote “Green (Green initiative)” as one par t of
Sumitomo Rubber Group CSR Activity Guidelines throughongoing tree planting activities in and around our operation
bases within Japan and overseas.
   In fiscal 2009, we began tree-planting activities at ourfacilities in Japan and overseas. As of the end of 2019, we had
planted a cumulative total of 1,745,000 trees. We will continue
to plant trees as well as putting effort in forest maintenance.

With the goal of protecting Japan’s vanishing cultural assets andcompanies. We planted a total of 19,991 trees in our tree-planting

natural environment, in fiscal 2013, the Group launched the Team

activities in fiscal 2019.

ENASAVE Future Project in cooperation with the National Federation   In addition, 15,000 trees were planted in Indonesia through theof UNESCO Associations in Japan (NFUAJ).

“Team ENASAVE Green Project,” wherein mangrove seedlings are   As a part of this project, in fiscal 2019, we held activities at eightplanted using some of the proceeds from sales of the fuel-efficient

We are promoting greening initiatives at overseas factories and sales

locations around Japan, with the help of employees, their families,“ENASAVE” tire series. Furthermore 2,400 trees were planted

Progress in greening initiatives

and local associations. Together with volunteers from the public,

through the “1 Pair for 1 Love activities,” in which some of the(cumulative number of trees planted)

these events have seen about 440 people participate in total.

proceeds from the sales of rubber gloves are allocated to the(10 thousand of trees)

DUNLOP

180

Products Forest on the

150
120

Shiraoi Town, Hokkaido
Let’s protect the Uyoro Riverbasin environment!

Overseas branch
Mangrove (Green Project)
Other tree-planting
activities in Japan
Acorn Projectin Japan

Niigata City, Niigata Prefecture
Let’s protect the forests andhistory of the Niitsu Hills!
Echizen City, Fukui Prefecture
Let’s bring the Oriental storks
back to Echizen!

90
60
30
0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

(FY)

Fukuoka City,
Fukuoka Prefecture
Let’s protect
nature at
Wajiro Tidal
Flat!

*In addition to the above, 91,000 seedlings were provided (2013-2019)island of Borneo,
Malaysia, in order toIchinoseki City, Iwate
Prefecture
Let’s restore the Kubo
River basin
ecosystem!

an endangered species.

Greening initiatives at aschool in Dubai

Seto City, Aichi Prefecture
Let's protect nature at Kaisho
Forest!

Mimasaka City, Okayama Prefecture
Let’s connect the Aida Ueyama terraced rice fields to the future!
Planting trees on the site of the Vietnam Factory

Initiatives to Preserve Biodiversity

In addition to the grounds of our facilities, we engage in forestation

endangered, near threatened, and rare species (five species of animal

activities in the surrounding area and at the 11 locations (23 ha) in

The objectives of forestation activities include prevention of global

and 16 species of plant) at all eight of its sites in Japan, consisting ofJapan designated as “Sumitomo Rubber GENKI Forest.”

warming by absorption of CO , landslide prevention and biodiversity

six factories, the Head Office and the Tire Proving Ground.

   When planting trees, one has to be aware of the negative effectpreservation, as well as to communicate with local communities   In terms of contributing to the immediate neighborhood, activities

non-native species can have on local ecosystem. As such we only

through satoyama (forest with production functions that has been

include transplanting “Fujibakama” (Eupatorium japonicum) cultivatedplant seedlings grown using acorn seeds that employees and theirmaintained and managed by humans) conservation activities.

in the grounds of our factory to river beds, and providing kindergartenfamilies gather in the target area. Our continued efforts are aimed at   To achieve forest creation rooted in each community, we

children with the opportunity to observe Sasakia charonda.

increasing the amount of greenery around us while protecting

promote activities in which employees, former employees, families,

biodiversity.

friends, local residents and regional organizations participate.

   While the number of trees planted has been decreasing as theprotect the orangutan,

Saitama City, Saitama
Prefecture
Let's preserve the
Minuma-tambo for thechildren of the future!

Collaborative activities with local residents
and other parties in “Sumitomo Rubber
GENKI Forest”
2

Home

SocialForestation Activities to Help Curb Global Warming andConnect with Local Communities“Sumitomo Rubber GENKI Forest,” a green
initiative in Japan

Greening Initiatives Overseas

Environment

Management Approach

Protecting Culture and Nature
Team ENASAVE Future Project

The Group is involved in conser vation activities in relation to

Echinops setifer flowering at Hosta kiyosumiensis at the Sasakia charonda butterflies at
the Miyazaki Factory
Head Office
the Ichijima Factory

TOPICS
Arranging events in conjunction with NPOs and nearby companies toview the endangered “Fujibakama” in the Kakogawa Factoryarea available for planting is getting smaller, 855 acorn seedlings
were planted in “Sumitomo Rubber GENKI Forest” in fiscal 2019.
   Maintenance work after tree planting is also important for

As part of our activities to conserve endangered species, we arranged an event on October 2

forestation. Weed cutting, removal of vines, removal of unnecessary

at the Kakogawa Factory / Kakogawa riverside to view “Fujibakama,” which we cultivated at thetrees, pruning and thinning work are carried out.

factory and divided to give to other nearby companies, and to transplant to the riverside area.

   In addition, 8,776 acorn seedlings were given away to   The viewing event was attended by persons with whom we had worked on theseorganizations and local residents who are engaged in the green

conservation activities, including representatives from the Ministry of Land, Infrastructure,

initiative and so wish for seedlings to plant.

Tamotsu Hattori, Professor Emeritus at the
University of Hyogo, giving a talkGovernanceTransport and Tourism, NPOs, and other local companies. Before the event, Professor
Emeritus of the University of Hyogo, Tamotsu Hattori, who has kindly supported for theCompany’s activities over many years, gave a talk on “Fujibakama,” which is also one of the
traditional seven flowers of autumn in Japan. Professor Hattori explained that “Fujibakama” isalso mentioned in the classics of Japanese literature, such as the Manyoshu, which was thesource for the name of the current “Reiwa” era, and is a plant that has been familiar to theJapanese people since antiquity.

Viewing of “Fujibakama” under conservation at
the Kakogawa Factory   Going forward, we will continue to work together with local people on activities to protect
Undergrowth cutting in “Rokko Uzugamori
GENKI Forest,” Kobe City, Hyogo Prefecture

49

Integrated Report 2020

Providing seedlings for use at rest stop
(Ichijima Factory)

Tree-planting and satoyama maintenance activities conducted jointly with local residents in
Toyota City, Aichi Prefecture“Fujibakama.”

Integrated Report 2020

50

Building a RecyclingOriented Society
Fiscal 201913.3％

by the fiscal year 2022  Fiscal 2022:(compared to fiscal
2005 levels; per tire)≥14% reduction over fiscal 2005

2
Management Approach

Building a RecyclingOriented Society

Since fiscal
2010
Continued
achievement for
10 years● M aintain our “Complete Zerolandfill wastes” policy at major
production bases in Japan andoverseas until 2020

As a global company responsible for the environment, theSumitomo Rubber Group will fulfill its social responsibility
through all areas of its activities in order to achievesustainable development of societ y wherein humanprosperity and the environment co-exist harmoniously.
   Sumitomo Rubber Industries was certified in March2009 as an “Eco-First company” under the “Eco-First
Program” established by the Ministry of the Environment,
and renewed “Eco-First Commitments” in October 2017.

Items marked with “ ◎ ” have been verified by third parties. The environmental impact
indicator was not verified by third parties. The figures shown on the graphs differ from theverified figures as different coefficients were used.

Reduced by● R educe LCCO2 emissions per tire● Establish a technology for

100% recycling ofwastewater at a model factory by
2020

Harmonious
3 Promoting
Coexistence with Nature

2019, we achieved complete zero landfill waste for the 10th consecutive

CO2 Emissions Reduction in Logistics
In fiscal 2019, we continued to work on optimizing the location of
our production sites and loading at the closest port to the factory.
  CO2 emissions from transporting tires fell 1.5% compared to theEstablishingwater-recycling
technology at theTurkey Factoryprevious fiscal year, to 28.9 kt-CO2, and the environmental impact

Conducted tree
planting activities
33 times

Conducts the Acorn project
activities at least 20 times a year

The Sumitomo Rubber Group is promoting the 3Rs (reduce, reuse, andrecycle) of waste in order to build a recycling-oriented society. In fiscal

Fiscal 2019

Fiscal 2019● Acorn ProjectContinue to Achieve Complete Zero Landfill Waste

Steampipe header survey(Shirakawa Factory)

Fiscal 2019

● Take action to protect biodiversity

indicator fell 2.1%.
   In fiscal 2020, we will work to increase the modal shift rate by

year at our major production bases both in Japan and overseas.
   Complete zero landfill waste is defined as complete diversion oflandfill waste, with 100% recycling rate and no waste sent directly tolandfills.
   In fiscal 2020, the aim of our efforts is to proceeed with our mission
to achieve zero emissions.

raising the precision of demand forecasts and ensuring scheduled

Amount of Waste Generated and Recycle Rate (Factories in Japan)

shipments for marine and train transportation.

(kt)Conserving
21 species

50(On schedule)

40

Total Emissions

Environmental impact indicator(t-CO 2e/t)

36.0

100
36.6

100

30.7

100

100

35.8

100

100
75

35.6
35.0

34.9

35.0

0.0380
33.2

50

0.038

29.4

28.3

28.9

33.8

34.0

28.6

0

2015

2016

2017

2018

2019

2020 (FY)
Target0.0339Items marked with “ ◎ ” have been verified by third parties. The environmental
impact indicator was not verified by third parties. The figures shown on the graphs
differ from the verified figures as different coefficients were used.

0

CO2 Emissions (Overseas Factories) ◎(kt-CO2e)

Total Emissions*

1,000

CO Emissions Reduction Activities in
Production Bases
2

Environmental impact indicator

1.958

In fiscal 2019, we worked to unearth energy-saving items, by utilizing
the consultation. As a result, CO2 emissions from production activities

500

1.566

695

508

1.606

739

1.558

779

791

811

1.645

1.627

1.613

from the previous fiscal year, and the environmental impact indicator92of CO2 emissions improved by 3.2% over the previous fiscal year.
of facilities, and on reducing CO2 through initiatives such as deploying
AI and IoT platforms to search for, extract, and analyze factors that

0

2004

2015

2016

2017

2018

2019

(kt-CO 2e)

排出量※2

600

Total Emissions*

2.0

1.481

2

(t-CO 2e)

1.5

4,000

Environmental impact indicator

3,940

293 302

249

275

0.941

244

270

0.949

248

274

0.951

247

275

0.921
242

271

0.912

231

1.0

3,500

3,370

0.498

0.527

0.517

0.486

3,223

organic compounds) emission. In fiscal 2019 there was a slight

0.6

1990

2015

2016

2017

2018

2019

2020 (FY)
Target0*1 Total emissions are calculated using the cogeneration credits based on the “Guide for
Calculating Greenhouse Gas Emissions,” published by the Japan Rubber Manufacturers
Association (used to calculate the environmental impact indicator). CO2 emission factors
for electricity consumption, published by electricity companies in 2004, are applied.
*2 Total emissions without considering cogeneration credits.

51

Integrated Report 2020

0

2004

2015

2016

2017

2018

2019

0

* Total emissions are calculated using the cogeneration credits based on the “Guide for
Calculating Greenhouse Gas Emissions,” published by the Japan Rubber Manufacturers
Association. CO 2 emission factors for electricity consumption, published by electricity
companies in 2004, are applied.

2015

2016

2017

2018

2019

2020 (FY)
TargetTOPICS

their usage in products other than tires, due to enhancements to the

Dunlop Retread Service Co., Ltd.
Fuel switching of boilers

production process.

Dunlop Retread Service Co., Ltd., which is responsible for the   In fiscal 2020, we will further optimize usage conditions of VOCs

retreading business in which used tires are refurbished into new

and reduce quantities used.

tires, has been actively working to reduce CO2 emissions at theOno and Hokkaido Factories. In fiscal 2017 it began solar power
generation at the Ono Factory, and in fiscal 2019, aiming to

Total Amount of VOCs (Factories in Japan)(kg/t)

Environmental impact indicator

Total

10

2,500

8

2,000

0
2020 (FY)
Target

80
68

20

8.20

0.464

74

40

improvement from the previous fiscal year despite an increase in

0.3

3,000

82

The Group has been making voluntary efforts to reduce VOC (volatile

(t)

3,403

81

60

1,500
0

81
80

0

3,720

0.469
0.5

(%)

0.5

0.9

261

200

100

6

1,917

4

1,000
500
0

2000

1.34

1.35

1.31

1.34

1.33

1.32

363

350

342

349

348

333

2015

2016

2017

2018

2019

2020 (FY)
Target2

decrease CO2 emissions further, it implemented fuel switching ofboilers in production boilers in the Ono and Hokkaido Factories.
   As a result of the Ono Factory switching from heavy oil A to
LPG, the environmental impact indicator for October-December
2019 reduced approximately 30% from fiscal 2015 levels.
In fiscal 2020, the aim is toGovernance

0.916

0

Efforts to Reduce Organic Solvents Use2020 (FY)
Target

3,919
3,749

400

2020 (FY)
TargetEnvironmental impact indicator (ｔ-CO2e/unit)

Total Emissions*
0.843

2019

1.0

1.5

* CO2 emission factors for electricity consumption are based on “WRI/WBCSD GHG Protocol
Initiative Calculation Tool” (2004).

(t-CO 2e/t)

2018

Promoting Environmental
Footprint Management

CO 2 Emissions (Factories Operated by Domestic Group
Companies) ◎Total Emissions*

1

2017

Material Recycling Rate (Factories in Japan)

2.5

affect energy savings.
CO2 Emissions (Factories in Japan) ◎

2016

0.032

(t-CO2e/t)

at the Group’s factories in Japan decreased by 5 kt-CO2 to 242 kt-CO2   In fiscal 2020, the Company will work on predictive maintenance2015

0.03290SocialCreating a Low-Carbon Society

0.03320.0342

25

0.036
0.034

20
10

(%)

100

0.040

0.039030

Recycle Rate

Amount of Waste Generated

37.0

CO2 Emissions in Logistics (Domestic)(kt-CO 2e)

Environmenta Low-Carbon
1 CreatingSociety

reduce it to half the levelsof fiscal 2015, by increasing
the solar power generation
facilities, etc.

0

Ono Factory boiler and LPG tankIntegrated Report 2020

52

Water Usage Reduction

Implementing Global Environmental Management

as a measure to reduce water usage, the Group aims to achieve a

Env i ro n m e nt a l p re s e r vati o n i s o n e of th e m o s t i m p o r t a nt

ISO 14001 Global Multi-Site Certification

wastewater recycling rate of 100% at all 26 factories around the

responsibilities that companies must fulfill within a global society.

To implement global management in all of its corporate activities

world by fiscal 2050. The Turkey Factory is one of those within the   There are strong demands that global companies implement

including the creation of a low-carbon society, in December 2010,

Group with a higher level of water stress, and has been working on

unifor m e nv ironme ntal ma nage me nt throughout the wor ld

the Group obtained ISO 14001 Global Multi-Site Certification for its

trial operations to establish water-recycling technology since 2018.

regardless of country or region.

30 bases in Japan and overseas. This enabled us to carry out

Reducing Waste Disposal*

In the summer of 2019, it achieved 100% recycling for factory   While accelerating its global expansion, the Group is focusing

unified environmental management at major production andIn fiscal 2019, the Group made efforts to sell metal scrap with thewastewater by using concentrated water from the recycling facilities

even greater energy on promoting global environmental management.

development bases in Japan and overseas.

aim of reducing the amount of waste disposal.

to water trees on the site of the factory, and other applications. In

The amount of waste emitted at factories in Japan and factories ofaccordance with the Midterm Plan, the Group is aiming to establish

Global Environmental Management System

14001 Certified Sites as a percentage of total employees wasdomestic group companies in Japan was flat year on year, butwater-recycling technology for 100% of the wastewater from a

In order to strengthen global environmental management, the Group

85.7%, and the ratio of Certified Sites was 92.1%.

overseas factories saw a deterioration caused by the ramping of

second factory in 2021, namely the Changshu Factory in China,

established the Global Environmental Management Central   In fiscal 2019, there were no sites added to Global Multi-Site

new production lines, which resulted in an increase in waste.

which also has a high level of water stress. Partial recycling ofCommittee, which is mainly composed of responsible parties at bases

Certification, but in fiscal 2020 we continue to work on activities   The environmental impact indicator worsened by 66.3% at

wastewater has also been implemented at the Thailand Factory andin Japan and overseas and those responsible for issue-specificaimed at adding the Switzerland Factory, which has already been

overseas factories, and by 5.4% at the factories of group companies

the Kakogawa Factory, and the Indonesia Factory is moving ahead

working groups.

c e r ti f i e d o n a sta nd-a l o n e ba s is, to th e G l o ba l M u l ti-S i tein Japan.

with the use of rainwater to reduce external water usage.

*Waste disposal refers to the amount of waste diverted for the thermal/material cycle.

   In 2019, total water usage at all of the Group’s factories was

Environmental Management System

reduced by about 2.5% year on year. We will push forward with

President, Sumitomo Rubber
Industries, Ltd.

Waste Disposal (Excluding Valuables) (Factories in Japan)◎
Total Emissions

From factories

From tires entrusted for disposal from outside the company

Environmental impact indicator (From factories)

(kt)

12

0.025

0.024

10
8

0.029

(t/t)

0.029

0.03

0.024
2.01

2.03

1.76

1.86

6.52

6.57

6.37

7.44

6

0.029

1.86
7.64

1.86

0.02

0.01

2
2016

2017

2018

2019

WRI*2 Aqueduct waterrisk assessments on2020 (FY)
TargetWastewater recycling facilities(Turkey Factory)

100% recycling of factory wastewater
Thailand Factory Natural Rubber Processing

Total Emissions

(kt)

25

Environmental impact indicator
24.64
24.00

20

0.049

0.049

(t/t)

0.08

0.06

14.08

15

10.52
10

10.01

9.44

0.032
5

0.030
0.023

0

0.04

2015

2016

0.02

0.020
2017

2018

2019

2020 (FY)
Target

0.113
1,000

Environmental impact indicator

Total Emissions

1,500

850

745

9,725

4,000

(t/unit)

0.15

0.087

0.087

635

635

604

0.10

0.05

2015

8,000

0

2016

2017

2018

2019

2020 (FY)
Target07,676Committee
vice chair:

Officer responsible for related
departments

Committee
members:

Those responsible for groupcompanies, factory managers,
and related department managers

Secretariat:

Safety, Fire Prevention andEnvironmental Management
Department

Sports BusinessIndustrial and Other
Products Business

14,305

13,618Overseas factories

13,283

13,449

8,567

7,707

7,468

7,692

4,023

ISO14001
Certified Site
Number of
Employees

Group Companies

39,23385.7％
Note: Includes temporary employees(as of December 31, 2019)

VOICE

meetings, there were reports by the Manufacturing Department on a

All Environmental Targets Achieved in
Fiscal 2019wide range of activities, including actual results and improvements

In 2019 the Indonesia Factory achieved all of its environmental

in various indicators such as CO2 emissions, energy savings, waste

indicator targets (energy saving, waste, water, and VOC).

disposal, and water usage, as well as efforts to improve theenvironment (offensive odors, etc.) and contribution to society.
Furthermore, in fiscal 2019, the new tennis ball factory in thePhilippines submitted a report for the first time. With reports on such  In particular, exceptional results were achieved in reductionsin VOC. The Indonesia Factory manufactures spare tires andtires for motorcycles, but because these manufacturing

themes as reducing CO2 emissions through fuel ef ficiency

processes involve sticking materials together, large volumes oftechnology from the Material Development Depar tment, and

VOC are used. For that reason, the volume of VOC used was

Sustainable Natural Rubber initiatives from the Procurement

high compared to that of other factories. In 2018, we started a

Department, the meetings saw some lively discussion.

project built around the work technical team, working on

19

16

15

15

13

13

   In the future, the activities of the various bases will be enlivened

5,814

5,724

5,896

5,802

5,744

improving production methods for materials to enable conversion

5,702

by sharing information globally through the committee and hard work.

to an VOC -free process. As a result, total usage of VOC at the

2015

2016

2017

2018

2019

2020 (FY)
Targetfactory had been reduced by 17% as of the end of 2019.
  These activities continue with the aim of further reductionsin VOC of 30% in 2020.

Total
Factories in Japan
Factories operated by domestic group companies
Overseas factories
12,00011,17010,652
10,153 10,144 10,251(km 3)

9,000

3,000

0

7,716

6,238

5,750

5,055

5,223

5,379

2,783
19

13

12

12

10

10

4,914

4,919

4,890

5,087

4,911

4,862

2015

2016

2017

2018

2019

2020 (FY)
Target* For certain domestic group companies and overseas factories, figures include estimates
based on water usage

Integrated Report 2020

Officer in charge of theenvironment

Wastewater (Factories in Japan ◎, Factories Operated by
Domestic Group Companies, Overseas Factories)

6,000

53

Committee
chair:

Tire BusinessIndonesia Factory(PT Sumi Rubber Indonesia)
Safety Health and Environment
SectionChief staff
Zuhendri Mukhtar

Governance

0.083

500

0

Factories in Japan
Total
Factories operated by domestic group companies

12,000

0.119
0.098

894

Water Usage (Factories in Japan ◎, Factories Operated by
Domestic Group Companies, Overseas Factories)

13,5070

Waste Disposal (Excluding Valuables) (Factories Operated
by Domestic Group Companies)(t)*1 WBCSD: World Business Council for Sustainable Development*2 WRI: World Resources Institute*3 During the summer only

(km 3)

Global Environmental
Management Central Committee

Coverage Rate of ISO 14001 Certified Sites(Percentage of employees)

In fiscal 2019, the Committee met in February and July. At theTurkey Factory*3

16,000

Certification, and on new certification for the Philippines Factory.

Global Environmental Management Central
Committee members

an ongoing basis.

0

Waste Disposal (Excluding Valuables) (Overseas Factories)   At the end of 2019, the number of employees working at ISO

Social2015

measures that utilize results of the WBCSD*1 Global Water Tool and

7.35

4

0

water usage optimization in production processes at each base andEnvironment

With the aim of dealing with the global shortage of water resources,

2019 Global Environmental Management Central Committee

Integrated Report 202054

Pursuing “Safety and Comfort,” “Economy” and “Quality”
Quality Management System

Fossil resource-free materials

Using

Raw
materials

Underpinning the activities of the Sumitomo Rubber Groupis the question “What can tires contribute to the global
environment?”. To this end, it is developing environmentallyfriendly products with a focus on thre e areas—fuelefficiency, raw materials and resource saving.
   While the environment surrounding the automobile
industry is facing drastic changes, the Group is pushing
forward with development of environmentally friendly
products based on its “ENASAVE technology” that allows
for “even higher environmental performance.”

Fuel
efficiency
Safety andcomfort (grip,
braking andquietness)

Resource
savingReduce (weightsavings and wear
resistance)*IATF 16949: A utomotive Quality Management System Standard which replaced ISO/TS
16949.

Standard.

TOPICS

Fuel efficiency (lower rolling resistance)

MakingManagement Approachto IATF 16949 by April 2019.

ISO 9001 and IATF 16949* Automotive Quality Management System

Discarding

Expanding Tire Management Solutions
through the Use of Digital Tools“Tyre Leap AI Analysis” EstablishedDue to the development of Mobility as a Service (MaaS), thenatural rubber and synthetic rubber, reinforcing agents such as

switch from car ownership to car sharing, and ridesharing, iscarbon and silica, and compounds made from cross-linking

proceeding. In addition, with dramatic developments inagents and additives, and performance is determined by atechnologies such as autonomous driving and vehicle

variety of factors, including the amount used and structure ofplatooning are expected to result in driverless cars in the neareach material. The internal structure is extraordinarily complex,

future, tire management and vehicle management solutions

and analysis by humans requires a great deal of time, insuch as automation of tire management, and provision of

addition to which there are limits to the precision of such an

pre dictive mainte na nce se r v ice s a re like ly to be comeapproach.

Environment

Environmentally Friendly ProductDevelopment Themes

Tire factories, both in Japan and overseas, completed the transition

The Group’s quality management system is structured based on

The rubber used in tires is made out of polymers such asincreasingly important.
Recycle & reuse(ease of retreading)   In addition to conventional tire sales, in order to build

What Can Tires Contribute to the Global Environment?

obtained from tires using tire pressure management solutions

solution systems that use the various kinds of data that can be
and other digital tools, in May 2019 the Company concluded
basic business alliance agreements with two IoT development
companies, TripodWorks CO., LTD and Sysgration Ltd.

Developing Environmentally
Friendly Products

Going forward, with our eyes fixed on global expansion, we will

Socialmove forward with the creation of new services in order to
respond to the new needs of customers.
Creating New Value through Open Innovation

The Company is advocating the “SMART TYRE CONCEPT” for thedevelopment of tires and peripheral services, and has introduced,
for example, Performance Sustaining Technology that controls tire   It is against this background that we created the “Tyrewear and declines in performance as time goes by so as to maintain

Leap AI Analysis” technology, which is able to perform analysis

as-new levels of performance for a prolonged period, and Life Cycleof a precision that humans cannot match, and can deduce

Assessment (LCA) that contributes to environmental performancephysical properties from images (structural information). In

ENASAVE NEXT III

over the entire life-cycle of the product and so help bring about a   The DUNLOP “VEURO VE304” achieves the highest levels* ofaddition, because it can detect changes in the internal

recycling-oriented society. The DUNLOP “ENASAVE NEXT III,”

passenger cabin comfort through superior quietness and high-levelstructure of the rubber before and after tire usage, we expect

features Performance Sustaining Technology that results in 50%

steering stabilit y, and moreover incorporates Per formance

to be able to use it to infer the physical properties of the rubber

less decline in wet grip performance than before. Furthermore, it isSustaining Technology to prolong wet grip performance at theafter it has been used.

also the world's first tire rubber to utilize cellulose nanofiber, a high-maximum level.

   By utilizing this technology, we can accelerate theperformance biomass material that is being promoted as a priority   Going forward, from the LCA perspective, we will continue todevelopment of Performance Sustaining Technology that isindustry for Japan, in addition to which it achieves the highest

improve environmental performance over the entire product life-

part of the “SMART TYRE CONCEPT,” opening the way to thepossible tire-labeling level of “A A A-a,” while from the LCA

cycle, thus promoting the development of products that contributedevelopment of safe, secure, high-performance tires that will

perspective it also contributes to reductions in environmental

to the realization of a recycling-oriented society.

contribute to the realization of a sustainable mobility society.

impact.

*Among the Company’s productsTechnology development that
controls declines in performance

contributes to the realization of arecycling-oriented
society, such as ourand prolongs as-new
performance.

Performance
Sustaining
Technology

Technology development aimed at

55

LCA

Airless Tires

Active Tread

proprietary biomass

Aiming to Provide High Value-Added Services that Lead to the Resolutionof Societal Problems

material, which is

In recent years, the dramatic progress made in digital technology has enabled things that were previously

used to add value todeemed impossible, and making life increasingly convenient. On the other hand, issues such as the rising age

tire performance.

of drivers and labor shortages, primarily in the transportation industry, are making it difficult to continue front-

Technology development to optimize
performance so that the rubber reacts

practical implementation of airless tires

dynamically and reversibly to changes in thethat do not need to be filled with air.

road surface, such as wet or freezing conditions.

Integrated Report 2020

VOICE

Technology development that

Governancecaused by wear and deterioration,

Sensing technology that replaces
sensors simply by incorporatinga proprietary algorithm into the
ECUs of braking systems, etc.
Sensing Core
ECU: Engine Control Unitline operations with the work styles common up until now. We are developing a solutions business that utilizes

Automotive System Division
Solutions Business Team

digital technology to address such customer concerns, including driver safety, improving the efficiency of tire

Assistant Manager

maintenance tasks, and drivers' burden. In this way, we are taking various initiatives aimed at enriching

Takahiro Nishimoto

people’s lives, and retaining its position as a company relied upon by many customers.

Integrated Report 202056

Management Approach

A diverse employment environment

Employees achieve satisfaction by working for the
Sumitomo Rubber Group, which grows as a result of its
employees’ success. To continue building such a soundrelationship, we believe that we have a responsibility toprovide all employees with a fair and equal chance togrow through a range of benefit packages and training
programs.
   With the President himself leading the way, theCompany is working on work style reform and on
activities to maintain or improve the health of employees,
which it is putting into practice as a strategic priority.

and human resource development

2019, we launched a new project within the Human Resources &In line with the “Health & Productivity Management Declaration”

General Affairs Department and Human Resources Department. By

established in February 2018, the Company has promoted health andnur turing a corporate culture in which people from diverse

productivity management measures, centered on the Health Management

backgrounds can thrive, we will generate innovations that save time

Office but with the participation of all employees, and in cooperation withthrough advances in operational efficiency, linking this to thethe Health Insurance Association. As a result of establishing the Healthsatisfaction of all employees and enhanced corporate value.

Management Regulations, codifying the rules for various health checks   As an example of the initiatives we undertook in fiscal 2019, as

and levels of risk, and steadily cycling through the PDCA system, in March

par t of our ef for ts to create a2020 the Company was selected for the first time as one of 40 companies

workplace culture that encourages

under the “2020 Health & Productivity Stock Selection” organized by thefree expression and independent

Ministry of Economy, Trade and Industry in conjunction with the Tokyo

thinking, as well as the individuality of

Stock Exchange, which recognizes companies that take a strategic

employees, we eased dress

management approach to the health management of their employees. In

restrictions in the office.

White 500,” for the fourth consecutive year.
A workplace environment
conducive to job satisfaction

The easing of dress restrictions has
lightened the mood of the workplace2020 the Company has also been certified as one of the “2020 CertifiedHealth and Productivity Management Organization Recognition Program -Fair evaluation and equal
benefits

H&P
Health & Productivity Management Declaration
In order to pursue greater happiness for all of the employees who support our
growing business, as well as their families, Sumitomo Rubber Industries andour Health Insurance Association are working together to raise awareness of
one’s personal responsibility to maintain one’s own health while at the sametime promoting disease prevention and healthier living.

** We were certified as one of the 40 companies in the “2020 Health& Productivity Stock Selection Program,” where companies thatmake strategic efforts to consider employee management from amanagerial perspective are jointly selected and announced (inprinciple, one company from each industry) by the Ministry of
Economy, Trade and Industry and the Tokyo Stock Exchange.

Support for Female Employees to Play an
Active Role in Their Duties
To promote more active roles for women, the Company has set atarget of doubling the number of women in management positions
by 2020, compared with the 2014 level, and looks likely to achieve
this objective. In order to achieve the goal of respecting diversity, we
are moving forward with efforts to expand the work-life balance

Achieving a Good Work-Life Balancesystems so that employees who have experienced various life events

Expanding the Work System That Supports
Diverse, Flexible Workstyles

paid leave to promote reforms for a well-balanced work style.
which a daycare subsidy is granted to employees who leave a childperformed by employees and greater use of paid leave, we areunder two years of age at a daycare facility, has been increasing

moving forward with the introduction of diverse workstyles that takesince its introduction in 2015 as a measure to support an earlier

can play active roles and to raise the percentage of people who take   The number of users of the “daycare support system” under

Creating a Safe, EmployeeFriendly Workplace

into consideration childcare and nursing care, in order to add variety

return to work from maternity leave and/or childcare leave. The

Strengthening the Organizational Framework

Striving for Zero Accident

to work and support efforts to balance work and family.

system is contributing to career development of female employees.

At the end of 2019, we conducted a Group-wide organizational

With the aim of Zero danger and accidents in the workplace, the   The result of these and other efforts has been that 100% of   Usage of the “temporary leave to accompany spouse overseas

framework survey by submitting questionnaires to every Group

Group carries out safety activities that eliminate the causes offemale employees who have given birth have taken childcare leave. In

system,” whereby employees can take temporar y leave toemployee. Based on the content of this survey, we are investigating

accidents and fundamentally raise the level of safety. The Group

addition, nine male employees took childcare leave in 2019, an

accompany their spouses when they are relocated overseas, is alsomeasures to enhance the organizational framework along thealso proactively conducts physical safety audits and visual checks

increase of four people year on year.

progressing, and we are seeing a rising number of registrations inthemes of ① mechanisms and systems, ② culture and corporate

on site.

   In fiscal 2009 we become the first company in the tire industry to

our “JOB Return System,” which applies in cases where marriage or   In fiscal 2019, the total number of accidents decreased by 25

be certified for the “Kurumin”, based on Act on Advancement ofa change in the spouse’s work location makes the resignation of anyear-on-year, and we successfully prevented any serious accidents.

Measures to Support Raising Next-Generation Children, and have

employee unavoidable.

Based on these results, we have set fiscal 2020 targets of (1) zerocontinued to support childcare since that time. In 2019, the Minister of

Human Resources

serious accidents, and (2) no more than 23 other accidents

Health, Labour and Welfare awarded the Company the "L-boshi

Respect for Human Rights

In order for the Company to become a truly global player, the human(equivalent to half of the fiscal 2019 level). In terms of priority issues,(second level)", a certification that is given only to businesses that

resources who support this effort must also be able to act as truly

we will promote safety activities to enhance the safety of thehave superior arrangements for encouraging the active participation

global players. This requires cross-cultural understanding,

workplace, such as upgrading our leading safety indicators (KPI) by

of women. We have also expanded support for nursing care, throughBasic Perspective on Consideration for
Human Rights

communication skills, the ability to discover and solve problems,

resolving their weaknesses, and take on the challenge of achieving

various efforts such as launching a nursing care consultation desk.

The Group’s Corporate Code of Conduct states that we “maintain a

and a willingness to take ownership. We develop human resources

zero accidents.

through such measures as grade-specific training, training onrequest, leadership training for managerial positions, and relocation

Frequency of Occupational Accidents(Serious Injury Frequency Rate*)of personnel.

2.0③ fostering human resources. The measures weare planning will be introduced gradually from June 2020.

1.5

sound working environment free from discrimination on the basis of

1.66

1.61

1.63

1.06

1.06

1.15

1.66
1.02

1.83
1.63
1.63
1.20

1.80
1.60
1.63
1.20

Promoting Diversity

belief, creed, religion, race, skin color, nationality, language, social

Respecting Diversity

physical handicap or other reason.” Accordingly, we strive to prevent

In order to promote work style reform and diversity, in February

infringement of human rights of any employee.

background, gender, sexual orientation, gender identity, age,

0.0

0.07

2014
All industries

0.36

0.28

2015

0.00

0.07

2016

2017

Manufacturing industry

2018

0.14

2019 (FY)

Sumitomo Rubber Industries(non-consolidated basis)* Accident frequency rate: The number of deaths or injuries per 1 million working hours.
Accident frequency rate = Number of deaths and injuries due to accidents / Total work
hours x 1,000,000

New employee orientation

57

Integrated Report 2020

Cultivating an awareness of career development through initiatives topromote diversity
With diversity becoming increasingly accepted throughout society, the feature that I myself often use is the hourly leave

Governance

VOICE

1.0
0.5

SocialFostering Human Resources
and Making Work Rewarding

In addition to promoting reductions in the amount of after-hours work

culture, and theEnvironment

Sumitomo Rubber Group’s Basic Hiring Policy

Promoting Health & Productivity Management

system. Although I value work, this system makes it easier for me to attend events at my child’s kindergarten.
Meanwhile, I attended this year's career design seminar, which is attended by women from companies in otherindustries. There I had the opportunity to interact with people who have built a wide variety of careers. I think it would
be good if such meetings led to an increase in opportunities for both men and women to consider their career. Going

Qualit y Control Section,

forward, I would like to make use of my own experience to think about various fulfilling working styles when we imagine

Nagoya Factory

developing individual careers, when my role in the family changes, or when I myself am transferred somewhere else.

Aiko Okuma

Integrated Report 202058

Information Security
In fiscal 2019, in addition to conducting practical training through targeted

Engaging in CSR Procurement Along with
Suppliers

detect and interrupt information leaks and virus intrusion through

The Group has formulated a CSR Code of Conduct, which covers

cyberattacks.

regulatory compliance, human rights and labor ethics, and includes  We will continue to strengthen information security on both hardware

it the Procurement Guidelines, which are distributed to all suppliers.

and software sides.

   Furthermore, we regularly conduct CSR questionnaires at
supplier companies and widely promote CSR within the supply

Customers

Management Approach
The Sumitomo Rubber Group must fulfill our
responsibilities, understand what is expected of us, andreflect these in our business activities. To this end,
regular communication with our stakeholders is
indispensable.
   As we globalize our business, we welcome a diverse
range of new stakeholders around the world. We strive todemonstrate integrity in all our business activities so that
we can earn the trust of all our stakeholders.

Local
community

Sumitomo
RubberGroup

Shareholders
and investors

Promoting Dialogue with
Stakeholders

chain through holding CSR briefings given the results. In fiscal 2017,

Communication with Shareholders and Investors   Furthermore, we provide explanations of our CSR Code of

The Company discloses various types of data, including businessConduct to new suppliers using the Procurement Guidelines andperformance records, on the Investor Relations section of our corporate

use the CSR questionnaire to conduct a self-evaluation.

Employees

held CSR briefings six times. There are plans to use a similar
questionnaire and to hold briefings in 2020, too.

(IR activities) with shareholders and investors. In addition, the Company

Promoting Initiatives That Comply With the“Sustainable Natural Rubber Policy”

uses occasions such as individual meetings and interviews to provide

The Group has also established our own “Sustainable Natural

explanations on corporate management and business activities.

Rubber Policy” with the aim of making natural rubber a sustainable   The Company has implemented constant communication (shareholder

resource for the future, and announced the policy in November

relations (SR) activities) with institutional investors in Japan and overseas

2018. In line with this policy, we are committed to promoting more

for deeper mutual understanding and trust. Through such direct dialogues,

proactive, collaborative efforts that involve both supply chains andthe Company aims to enhance its corporate value by providing information

various other stakeholders, with the objective of achieving a society

and conducting exchange of opinions on a broader scope.

in which natural rubber is a sustainable resource.

Promoting Social
Contribution Activities

Ensuring ThoroughCompliance   The Company will continue making full use of input from our

CSR FundPreventing Wrongful Conduct

Sound Labor-Management Relations

Promoting Activities Aimed At Achieving aSociety In Which Natural Rubber Is a
Sustainable Resource

In fiscal 2009, the Company established the “Sumitomo Rubber

We drive home to our employees the importance of avoiding all

The Company and the Sumitomo Rubber Labor Union (which had 5,599

Sumitomo Rubber Singapore Pte. Ltd., a wholly owned subsidiary

Industries CSR Fund” in order to provide financial support to thosewrongful conduct through our “Corporate Code of Conduct,” which

general members as of December 31, 2019, excluding officers orof the Company that handles procurement of natural rubber,

involved in a wide range of activities, such as solving environmental

includes rules to “prohibit unfair competition and business dealings”;

managers) maintain good relations, based on the sharing of information by

conducts safety checks at factories of natural rubber processing

or societal problems, but primarily to NPOs in regions where we“prohibit bribery”; and “insulate ourselves from anti-social force,” etc.

management, and an approach of prior consultation. We believe that theby the Company, based on “Promoting Health and Safety

have a base. We appeal for donations from employees who agree   Once again in fiscal 2019, we focused efforts on establishing a

growth of the Company and the pursuit of happiness of employees are

Measures” that is one of the frameworks of the “Sustainablewith our proposals, and we employ a matching gift program andsystem enabling voluntary compliance activities at both domestic

objectives shared by labor and management, and we have a history of

Natural Rubber Policy.”

whereby the Company donates an equivalent amount to thatand overseas bases through such means as provision of various

discussions at the various labor-management committees. For example,   The aim of these activities is to give useful tips to the

TOPICS

value.

collected.

compliance-related training sessions.

we engage in activities where labor and management are united in pursuit   In fiscal 2019, the Fund donated a total of ¥11.09 million to 47   Going forward, we will continue efforts aimed at improvingof their objectives, such as when we organized a Labor-Management

measures, and ultimately to ensure that the workplace is one inorganizations located in eight regions: Hokkaido, Fukushima, Tokyo,

compliance awareness on a Group-wide basis.

Wages Study Group from the union leadership and the Company’s Human
Resources Department, with the aim of reviewing the human resources

Compliance Education

system and working conditions, and have maintained it ever since.

overseas (Thailand).

Compliance education is implemented from new employee  In fiscal 2019, this study group was responsible for such initiatives as   In fiscal 2020, a totalorientation to grade-specific training so that we can raise awarenessenhanced allowances for those working in shifts, the introduction ofof ¥13.14 million w ill beof the importance of compliance among our employees.

incentives targeted at specific qualifications, and expansion of the system

donated to 54 organizations.

   In fiscal 2019, in addition to implementing briefings in relation tothat supports workers doing childcare or nursing care.

themes such as the Act on the Protection of Personal Information,  In fiscal 2020, we will continue our efforts to promote workstyleand the Act against Delay in Payment of Subcontract Proceeds, Etc.

reforms, and move ahead with various activities, with labor andto Subcontractors, we also held a variety of briefings at groupmanagement continuing to work in cooperation with each other.

CSR Fund presentation ceremony (Miyazaki Factory)

Enhancing Corporate
Governancecompanies, including some of those overseas.

which employees can work safely and comfortably. Ourrepresentative asks questions from an itemized list of themes suchas the state of safety and safety documentation, and thenaccompanies the person in charge of the processing factories tocheck the state of implementation. For areas that need
improvement, we request that they refer to examples of goodpractice from other processing factories for future activities.
   This program of safety status checks began in 2018, Vand
O has
ICE
already been implemented at approximately 50% of the factories
certified by Sumitomo Rubber from which it has purchasedrubber, with the plan being for all to have been completed by
2021. After that, the   The Group continues to promote activities aimed at thoroughCompany will continue to

implementation of compliance at overseas group companies inprovide guidance so thatparticular, which included the holding ofsafety activities become

The Group is working to enhance corporate governance. For moreworkshops on important themes such as

rooted in the workplace.

details, please refer to “Corporate Governance” (pages 35–41).

compliance with competition laws andpreve ntio n of br ib e r y a nd w ro n g f u l

An inspector giving the “go” sign to a driver after
performing a check of the pre-work inspection slip

conduct.
Compliance lectures(Philippines Factory)Integrated Report 2020

GovernanceMiyazaki Prefectures, andSocialshareholders and investors in enhancing its management and corporate

management of the processing factories, strengthen safety

Aichi, Osaka, Hyogo, and59

we conducted CSR questionnaires at 260 supplier companies andwebsite and holds briefings for analysts and institutional investors at suchtimes as the disclosure of earnings reports, as part of our communications

Business
partners

Environment

security measures, including those at overseas subsidiaries, in order toemail attacks of all Group employees, just like last year, we tightened

Sumitomo Rubber Group
Stakeholders

Supply Chain Management

September 2019 Management Council

Integrated Report 2020

60

CSR Activity Report

Honors and Certifications from
Outside Organizations
Some honors and certifications related to CSR that the Sumitomo Rubber Group has received from outside

July
2019

Dunlop“ENASAVE RV505” won the “Tire Category Award” at the“32nd DAILY AUTOMOTIVE NEWS Car Parts Awards 2019".

organizations are listed below.
Use of humanresources

32nd Nikkei Corporate Image Survey

100

In the “Cares about the environment” section (evaluated by businesspeople) of the 32nd Nikkei Corporate Image Survey, the Company

Sumitomo Rubber Industries, Ltd.
Industry (rubber products)
All companies (average)

ENASAVE RV505

80
60

Scale

was ranked 7th.

Environment

40

July
2019

“DecoTurf” hardcourt selected for Ariake Tennis Park tennis

September
2019

Vibration control dampers using high damping rubber adopted for the tower

October
2019

DUNLOP tennis balls adopted as official tournament balls for the "Davis Cup Finals by Rakuten ".

October
2019“MIRAIEΣ” (sigma), Vibration Control Units for Detached Housing,

December
2019

W i n s N o .1 p o s i t i o n i n t h e

courts.

20

14th (2020) CSR Ranking
For the Toyo Keizai CSR Ranking, which uncovers companies that awide-range of stakeholders consider reliable, utilization of humanresources, environment, governance and sociality, profitability,

SafetyGovernanceand sociality(small tower) of Kumamoto Castle.

safety, and scale are evaluated, and the companies are ranked interms of both corporate social responsibility (CSR) and finance.
In addition to surpassing the average score for all companies andProfitability
Source: TOYO KEIZAI INC. 14th (2020) CSR Ranking Report

those in our industry (rubber products), we capture a balanced score
in all items.

■ MSCI ESG Leaders Indexes
The Company has been selected for inclusion in the MSCI ESG Leaders Indexes continuously since 2010.
THE INCLUSION OF Sumitomo Rubber Industries, Ltd. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP,
ENDORSEMENT OR PROMOTION OF Sumitomo Rubber Industries, Ltd. BY MSCI OR ANY OF ITS AFFILIATES.
THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

received Good Design Award 2019.

■ SNAM Sustainability Index
The Company has been selected for inclusion in the SNAM Sustainability Index continuously since 2012.

“Ranking of Construction Materialand Equipment Manufacturers toWork With,” parts and materials
for detached housing vibration
control category.

December
2019

Updated ISO 14001:2015 Global Multi-Site Certification.

December
2019

Sumitomo Rubber Industories received "L-boshi(second level)" the Minister of Health,

Parts and materials for
detached housing
vibration control category

1st

Questionnaire to readerswhich construction material
and equipment
manufacturer’s products
they would like to use

Vibration
Control
Units for
Detached
Housing“MIRAIE”

March
2020

Vibration control dampers used for the former head office of Bank ofJune

The three-groups (SRI Logistics Ltd., shipping company, and warehouse) improvement

Parts and materials for
detached housing
vibration control category

1st

Questionnaire survey thatasks readers whichconstruction material andequipment manufacturer’s
products they would like touseChina, a historic building in the Philippines.

*

Labour and Welfare, as a business with superior arrangements in conformance to the Act
on Promotion of Women’s Participation and Advancement in the Workplace.
* We obtained the “L-boshi Certification (second level),” which is awarded by the Minister of Health, Labour and Welfare to
employers with excellent performance in promoting women's participation and career advancement.

February
2020

The Miyazaki factory achieved record high 5 million hours without accident, receiving“Type 1 Accident-Free Record Certificate” from the Ministry of Health, Labor and"L-boshi" certification symbol

2019

activities for actual driver hours introduced by SRI Logistics Ltd. was recognized by the
Miyazaki Industrial Association and received the “Superior Employee Special Award.”

Welfare.

March
2020

Sumitomo Rubber Industries was selected as one of 40 companies under the “2020
Health & Productivity Stock Selection”, which recognizes companies that take astrategic approach to managing the health of their employees. And the Company has
also been selected as one of the “White 500” of organizations showing superior healthmanagement, under the “Certified Health & Productivity Management Outstanding

Certifications acquired
・ ISO9001:2015

・ ISO14001：2015

・ OHSAS18001：2007

Quality Management System
Environmental Management Systems
Occupational Health and Safety Management Systems

・ ISO45001：2018

・ IATF16949：2016

Occupational Health and Safety Management System
Automotive Quality Management System Standard*In the process of becoming ISO standard ISO45001:2018

Organizations Recognition Program,” for the fourth consecutive year.

61

Integrated Report 2020

Integrated Report 202062

Financial Section
Millions of yen

11-Year Summary of Consolidated Financial/Non-financial Data
Associated GENKI
Activities

Years ended December 31

JGAAP

IFRS

2009

2010

2011

2012

2013

2014

2015

2015

2016

2017

2018

2019

Net sales*1 / Sales revenue*2

524,535

604,549

676,904

710,247

780,609837,647

848,663

798,483

756,696

877,866

894,243   Overseas sales ratio (%)

45

47

50

47

51

53

56

59

59

63

63

63

Cost of sales

334,249

387,678445,426450,226

486,704

511,616

523,217528,393499,650

611,185

632,756

638,011

Selling, general and administrative expenses

161,547

169,300

177,554

190,298

216,850

239,780

248,379

191,237

182,130

199,706

200,806

201,421

Operating income*1 / Business profit*2, 3

28,73947,571

53,92469,72377,05586,251

77,06778,85374,916

66,97560,68153,878   Operating income ratio / Business profit ratio (%)

5.5

7.9

8.0

9.8

9.9

10.3

9.1

9.9

9.9

7.6

6.8

6.0

Operating profit*2

－

－

－

－

－

－

－

89,17373,28467,44957,15533,065

－

11.2

9.7

7.7

6.4

3.7

Earnings for the year:－   Operating profit ratio (%)
Net income attributable to owners of the parent *1, 4 /Profit attributable to owners of the parent company *2, 4   Net income attributable to owners of the parent to sales (%) /   Profit attributable to owners of the parent company to sales (%)

－

－

－

－

－

893,310

9,093

21,42728,38635,45144,79453,206

55,834

71,97641,364

46,97936,246

12,072

1.7

3.5

4.2

5.0

5.7

6.4

6.6

9.0

5.5

5.4

4.1

1.4

1,035,484

Financial position at year-end:
Total assets

613,230

622,243

671,611

737,528

867,464

973,587

936,154932,432

897,634

1,018,266

1,002,383

Net assets*1 / Total equity*2

209,052

212,964

222,175

271,103358,844446,960

453,768

451,837

459,541

490,886

472,807475,537

Total equity attributable to owners of parent

187,028

189,684

197,661

244,165

329,813413,374

423,857

422,287

429,316

459,907457,927

460,800

Interest-Bearing Debt

261,572

241,250

274,216

275,876

302,113295,747

260,631

261,867

204,218

273,452

283,482

325,490

Cash flows for the year:
Cash flows from operating activities

64,52569,725

18,94576,64377,012

108,941

86,99586,864

128,190

76,10982,82091,458Cash flows from investing activities（34,260）（35,400）（51,569）（62,167）（68,275）（71,584）（32,991）（30,672）（42,144）（100,724）（65,494）（63,417）

14,476

8,737

37,35754,00456,192

86,046

17,32628,041

28,009（15,835）（5,824）（32,507）（50,554）（52,707）（71,055）

21,706（2,122）（40,979）
58,129   Free cash flows
Cash flows from financing activities

30,26534,325（22,781）（25,634）（32,624）（24,615）

Related information:
Capital expenditures

32,48432,05548,51556,88957,27062,81458,911

58,91149,60662,494

66,857

Depreciation*1 / Depreciation and amortization*2

37,42537,88537,60636,27843,27948,204

55,14551,41951,24856,01057,36567,941R&D expenses

17,983

18,69819,274

19,53921,822

23,54323,372

23,372

24,25725,72025,78026,19812,436

Management-related and financial data:
Tire sales volume (millions of tires)

7,649

9,087

9,488

9,648

10,042

10,914

10,962

10,962

11,264

12,347

12,361

ROE (%)

4.9

11.4

14.7

16.0

15.6

14.3

13.3

17.5

9.7

10.6

7.9

2.6

ROA (%) (Operating income base*1 / Business profit base*2)

4.6

7.7

8.3

9.9

9.6

9.4

8.1

8.4

8.2

7.0

6.0

5.2

D/E ratio (times)

1.4

1.3

1.4

1.1

0.9

0.7

0.6

0.6

0.5

0.6

0.6

0.7

Equity ratio*1 / Ratio of equity attributable to owners of parent*2 (%)

30.5

30.5

29.4

33.1

38.0

42.5

45.3

45.3

47.8

45.2

45.7

44.5

21

70

28

11

8

8

8

8

7

4

5

4

501

597

648

668

687

734

786

786

1,011

1,036

1,073

1,095

84.5

88.7

75.4

77.5

78.7

83.8

78.5

78.5

89.4

84.1

84.0

85.7

CSR-related indicators:
Number of trees planted (10 thousands of trees)
Total CO2 Emissions(Global Environmental Data of Domestic/Overseas Factories) (kt-CO2e)

Employees at ISO 14001 Certified Sites as a percentage of all
employees (%)
Number of Japanese and Foreign Patents (Number of patents held)

4,969

5,577

6,417

6,971

7,790

7,680

7,849

7,849

8,745

9,183

9,199

9,156

Tire Production Capacity (Tons/month)

42,65044,45046,55049,75052,15054,40060,60060,60061,50063,20065,00066,850

Number of Employees in Japan and Overseas

20,832

22,242

22,32023,507

26,77330,22433,18533,19733,79236,65037,852

39,233

9

17

18

13

26

20

16

16

23

20

29

33

－

11

13

14

9

24

29

29

30

28

27

26

6

6

7

7

7

7

7

7

8

8

9

11

Men (Years)

12.8

13.5

13.8

14.0

14.0

14.3

14.3

16.8

16.7

16.4

16.3

16.1

Women (Years)

11.2

11.1

11.0

11.5

11.8

11.9

11.9

13.3

13.3

13.0

12.6

12.2

11

3

7

6

10

16

14

14

13

13

23

25

－

233

351

550

805

800

694

694

696

785

893

1,109

Number of Employees Using Childcare Leave System(Sumitomo Rubber Industries, Ltd. (Non-Consolidated Basis))

Ratio of New Female Employees to the Total Number of New
Employees (Sumitomo Rubber Industries, Ltd. (Non-Consolidated Basis)) (%)
Ratio of Female Employees to the Total Number of Employees(Sumitomo Rubber Industries, Ltd. (Non-Consolidated Basis)) (%)

Average Years of Service(Sumitomo Rubber Industries, Ltd.
(Non-Consolidated Basis))

Number of complaints and whistleblowing filed by employees to
Corporate Ethics Helpline (Compliance Consultation office) (Sumitomo Rubber
Industories , Ltd. (Non-Consolidated Basis)) (Number of cases)

Total Amount of CSR Fund Subsidy (10 thousand yen)

*1. Based on JGAAP*2. Based on IFRS
*3. Defined by Sumitomo Rubber Industries, Ltd. as its primary management indicator, business profit is calculated using the following formula: Sales revenue – (Cost of sales + Selling, generaland administrative expenses)*4. Profit attributable to owners of the parent company is as calculated under IFRS while net income represents net income attributable to owners of the parent calculated under JGAAP.

63

Integrated Report 2020

Integrated Report 202064

Financial Section(Millions of yen)

Consolidated Statement of Financial Position
Fiscal 2018

Fiscal 2019

(As of December 31,
2018)(As of December 31,
2019)

AssetsCurrent assets

Fiscal 2018

Fiscal 2019

(As of December 31, (As of December 31,
2018)
2019)

(Millions of yen)

Consolidated Statement of Income
Fiscal 2018

Fiscal 2019

(Jan.1 to Dec.31.2018)(Jan.1 to Dec.31.2019)

Sales revenue

894,243

893,310

Liabilities and equity

Cost of sales（632,756）（638,011）

Liabilities

Gross profit

261,487

255,299（200,806）（201,421）

Business profit

60,68153,878Selling, general and administrative expenses

Cash and cash equivalents

74,526

60,631

Current liabilities

Trade and other receivables

202,638

190,261

Bonds and loans payable

137,455

106,644

Other income

2,900

2,939

1,627

1,314

Trade and other payables

141,838

127,040

Other expenses（6,426）（23,752）

Inventories

174,747

182,769

Other financial liabilities

1,677

12,446

Operating profit

57,15533,065

Other current assets

23,35225,079

Income tax payable

5,850

4,851

Financial income

2,786

2,173

Total current assets

476,890460,054

Provisions

776

835

Financial expenses（9,640）（7,988）Other current liabilities

36,53037,031

324,126

288,847

Other financial assets

Non-current assets

Share of profit of entities for using equity method

48

45

50,34927,295（13,163）（14,124）

37,186

13,171

36,246

12,072940

1,099

37,186

13,171137.81

45.90

Profit before tax

Property, plant andequipment

371,557

420,924

Total current liabilities

Goodwill

32,142

26,547

Non-current liabilities

Intangible assets

44,78243,445

Bonds and loans payable

142,183

157,589

Investments accounted forusing equity method

4,215

4,258

Other financial liabilities

3,156

49,716

Other financial assets

32,63733,440Net defined benefit liability

21,073

21,833Net defined benefit asset

20,801

29,352

Provisions

1,230

1,565

Deferred tax assets

14,136

14,798Deferred tax liabilities

17,54017,570

Other non-current assets

5,223

2,666

Other non-current
liabilities

20,26822,827

Total non-current assets

525,493

575,430

Total non-current liabilities

205,450

271,100

Total liabilities

529,576

559,947

Capital stock

42,65842,658

Capital surplus

39,48739,486

Retained earnings

441,062444,783

Income tax expenses
Profit for the year

Profit attributable to:
Owners of the parent company
Non-controlling interests
Profit for the year

Earnings per share
Basic earnings per share (Yen)

Equity（69）（75）

Other components ofequity（65,211）（66,052）

Total equity attributable toowners of parent

457,927

460,800

Non-controlling interests

14,88014,737

Total equity

472,807475,537

1,002,383

1,035,484

Treasury stock

Total assets

65

Integrated Report 2020

1,002,383

1,035,484

Total liabilities andequityConsolidated Statement of Cash Flows(Millions of yen)

Fiscal 2018

Fiscal 2019

(Jan.1 to Dec.31.2018)(Jan.1 to Dec.31.2019)

Cash flows from operating activities

82,82091,458Cash flows from investing activities（65,494）（63,417）

Cash flows from financing activities（2,122）（40,979）

Effect of exchange rate change on cash and cash equivalents（5,206）（957）

Net increase (decrease) in cash and cash equivalents

9,998（13,895）

Cash and cash equivalents at the beginning of current period

64,52874,526

Cash and cash equivalents at the end of current period

74,526

60,631

Integrated Report 202066

Independent Verification Report

Third-Party Comments

To enhance the reliability of this report and the environmental data disclosed on our website, we underwent

Publishing of “Integrated Report”

verification by a third party.

This fiscal year, the report should be seen as one that commemorates its evolution from theData marked with “◎“ (pages 45, 46, 51 and 53) has been verified.

“Sumitomo Rubber Group Report” to the “Integrated Report.” Moreover, it is not only the name that

The target data for verification and the verification criteria used are as follows.

has changed, as it is now a full-fledged document that is compliant with the framework publishedby the International Integrated Reporting Council (IIRC). Particularly significant is the structure of the

1. Total global CO2 emissions

report, at the center of which is a business model that generates value through the “5 capitals” of

Criteria: ISO 14064-1

financial capital, manufactured capital, human capital, intellectual capital, and natural capital.

2. Water usage, wastewater, and waste disposal (excluding valuables) by factories in Japan   In addition, the announcement of Sumitomo Rubber’s New Midterm Plan for 2020-2025, which

Criteria: LRQA’s Report Verification (pursuant to ISAE3000, AA1000AS, and GRI)

designates ESG management as one of the value drivers and specifies the generation of economic
and social value as targets, shows that this integrated thinking is consistent within the Company
itself. In the future, I look forward to the addition of social and relationship capital, to develop it intoa more comprehensive value-generation business model.
Professor at the Graduate School ofBusiness Administration,
Kobe University

Katsuhiko Kokubu

Close Coordination with SDGs
As for ESG management, the close coordination with SDGs is another notable feature of Sumitomo
Rubber. The company earns high marks for seeking to promote the SDGs in every facet of its
business activities. Going forward, in order to take their activities to the next level, I think thecompany should consider contributing to the SDGs by setting their own targets as Sumitomo

Completed the doctoral program inbusiness administration at Osaka Cit y
University Graduate School. After servinga s a s s i s t a n t p rof e s s o r a t O s a k a C i t y
University and Kobe University, he assumed
h i s c u r re nt p o s i ti o n i n 20 01. H e ad of
Graduate School of Business Administration
at Kobe University from 2014 to 16. Has
served concurrently as Vice President ofKobe University since 2019 and as Head of
Kobe University V.School since 2020. His
recent publications include “FromAccountabilit y to Management Ethics”( Yu h i k a k u P u b l i s h i n g C o ., L t d .) a n d“ E m e r g e n t-Ty p e R e s p o n s i b i l i t yManagement” (Nikkei Publishing Inc.).

Rubber for period up to 2030. Detailed targets have already been set for the GENKI Activities, but interms of contributions to the SDGs, designating focus targets and projects on a time-limited basis
would make the SDGs more concrete and familiar to employees.

Enhancing Corporate Governance Information
The issue of the appropriate disclosure of corporate governance information is one shared by many
Japanese companies, but this year’s report enhances in that respect, with corporate governanceinformation spread over five pages, including a description of measures to strengthen theeffectiveness of the Board of Directors. In the future, I would like to see the company consider the
inclusion of information on how individual directors regard the issue of generating social value. In
particular, I feel that the thoughts of the outside officers and their assessment of the current state of
Sumitomo Rubber would send an important message.

Setting of Materiality According To the Business Model
Sumitomo Rubber disclosed the current prioritization of materiality in 2016. It may be that the
publishing of the Integrated Report represents a good opportunity to review materiality in the near
future. In my opinion, the next issue will be how to set the materiality according to the “5 capitals”
business model. I look forward to future developments.

Response to Third-Party Comments
I would once again like to thank Professor Kokubu for always providing us with pertinent advice and generous
assessments.
   As you point out, corporate social responsibility is intimately related to social and relationship capital,
which includes cooperative behavior such as norms, trust, and ties, for which reason we aim to add thiselement in the future to develop a more comprehensive value generation business model. We will also consider
the setting of targets to contribute to the SDGs and measures to inculcate employees with these targets, whileat the same time considering the resetting of materiality (important issues) so that it is linked to the businessmodel at a time when social conditions under which the Company operates are changing dramatically.
   In each case, the important issue is “understanding stakeholder needs,” thus the Group employees willpull together in efforts to promote measures to meet such needs with a progressive perspective. In this way,
we will contribute to the realization of a sustainable society by continuing to generate new value from both theeconomic and social perspectives.

67

Integrated Report 2020

Executive Officer, General
Manager and Department Head,
Human Resources & General
Affairs Dept.

Masatsugu Nishino

Integrated Report 2020

68

Global Network (As of March 2020)

Investor Information (As of December 31, 2019)

OV ER S E A S

Switzerland Factory(industrial products)

Turkey Factory (tires)

Hunan Factory (China)(tires)Changshu Factory(China) (tires)

USA Factory(sports goods)

USA Factory (tires)

Asia/Pacific
Manufacturing
Companies:

9

Sales Companies:

22

Other Group
Companies:

2

Zhongshan Factory(China)(industrial products)

Paid-in Capital¥42,658 million

Number of Shares ofCommon Stock

Authorized : 800,000,000
Issued : 263,043,057

Number of Shareholders

36,845

Stock Exchange ListingTokyo

Ticker Symbol

5110

Transfer Agent and Special Sumitomo Mitsui Trust Bank, Limited
Account Management
1-4-1, Marunouchi, Chiyoda-ku,
Institution
Tokyo, Japan
KPMG AZSA LLC
3-6-5, Kawaramachi, Chuo-ku,
Osaka, Japan

Independent Auditors

Sumitomo Electric Industries, Ltd.………………………………………………… 28.85%
The Master Trust Bank of Japan, Ltd. (Trust account) ………………………… 4.61%
Japan Trustee Services Bank, Ltd. (Trust account) …………………………… 3.68%

Slovenia Factory(industrial products)

National Mutual Insurance Federation of Agricultural Cooperatives …………… 2.79%

Vietnam Factory(industrial products)

Major
Shareholders

Europe/Africa/Middle East
Manufacturing Companies: 4
Sales Companies:

11
Philippines Factory(sports goods)

SMBC Nikko Securities Inc. ……………………………………………………… 1.93%
Sumitomo Corporation …………………………………………………………… 1.83%

Americas

Other Group Companies: 12

Sumitomo Mitsui Banking Corporation …………………………………………… 1.98%

Manufacturing Companies: 3
Sales Companies:

4

Other Group Companies:

2

Japan Trustee Services Bank, Ltd. (Trust account 9) …………………………… 1.58%
SSBTC CLIENT OMNIBUS ACCOUNT …………………………………………… 1.54%
Japan Trustee Services Bank, Ltd. (Trust account 5) …………………………… 1.38%

Indonesia Factory(tires and sports goods)

Note: The percentage of shares in the above list was calculated using the total number of shares of common stock, excluding 39,499 shares of treasury stock.

Stock Price
（yen）

2,500
South Africa Factory(tires)Malaysia Factory(industrial products)

Thailand Factory(tires)Thailand Factory(sports goods)

Brazil Factory (tires)

2,000

JA PA N

1,500

Golf Science Center

Ichijima Factory(sports goods)

Nayoro Tire Proving
GroundJAPAN
Production
Subsidiaries:
Sales
Subsidiaries:
Other Group
Companies:

Tire Technical Center

500

15
12

Low
Asahikawa Tire Proving
GroundShirakawa Factory(tires)Tokyo Head Office

Kakogawa Factory(industrial products)

High

3

Head Office

Okayama Tire
Proving Ground

1,000

0

2016

2017

2018

High
Openig

Close

Blue : Opening > Closing

Close

OpenigLight Blue : Closing > Opening

Low

2019

2020

Disclaimer
Besides facts on the past and present of the Sumitomo Rubber Group, this report contains projections based on forecasts and future management plans.
These projections are based on assumptions and judgments from information available at the time this report was made. Actual future results may differ from theseprojections.

Nagoya Factory (tires)

Miyazaki Factory(tires and sports goods)

69

Integrated Report 2020

Izumiotsu Factory(tires and industrial products)

Offices

R&D bases

Production bases

Integrated Report 202070