COVALENT GROUPCSR Report 2008

Corporate Social Responsibility ReportCOVALENT GROUP
Corporate Social Responsibility Report 2008

Contents
Editor’s Note

Corporate Philosophy and Principles

2

President’s Message

3

Company Overview and Business Performance
Company Overview■ Business Performance■ Principal Products
■

5
6
7

Management■■

Corporate GovernanceCompliance and Risk Management

911This is our sixth report since the publication of our first
Environmental Report in 2003. The 2007 Report saw the expansionof our commitment to society in the Social and Environmental
Report of the same year. In 2008, we increased that commitment
even more, and have changed the title to CSR Report 2008 toreflect our efforts. In this report, we present the Covalent Group’sbusiness, social and environmental activities from the perspectiveof corporate social responsibility (CSR). Our intent is to present
the Covalent Group’s activities and explain our commitment to
CSR in a manner that is easy to grasp to our stakeholders, which
include our customers, shareholders, employees and people in thecommunities where we do business.

Scope of the Report
This report covers the following facilities and affiliated companies:
Covalent Materials Corporation’s three facilities:■ Oguni Facility

378, Oaza Oguni-machi, Oguni-machi, Nishiokitama-gun,
Yamagata■ Hadano Facility
30, Soya, Hadano, Kanagawa■ Kariya Facility
1, Minami-Fuji, Ogakie-cho, Kariya, Aichi
Consolidated subsidiaries:■ Covalent Materials Niigata Corporation

6-861-5, Higashiko, Seiro-machi, Kitakanbara-gun, Niigata

Society and Human Report■ Covalent Materials Tokuyama Corporation

2-1-32, Eguchi, Shunan, Yamaguchi

Responsibility to Customers■ Responsibility to Suppliers■ Responsibility to Employees■ Responsibility to Local Communities
■

13
15
16
21

Environmental Management■ Targets and Results of Environmental Activities■ Environmental Impact■ Reducing Global Warming■ Waste Management■ Management of Chemical Substances■ Development of Environmentally Conscious Products and Technologies■ Environmental Communications■ History of the Covalent Group’s Commitment to the Environment
1 Corporate Social Responsibility Report 2008

296, Momozugo, Kawatana-cho, Higashisonogi-gun, Nagasaki■ Covalent Materials Sekikawa Corporation

278, Oaza Tatsutashin, Sekikawa-mura, Iwafune-gun, Niigata■ Tokai Ceramics Co., Ltd.

308-1, Yoshibora, Shidare-cho, Toyota, Aichi
The above three facilities and five consolidated subsidiaries arecollectively referred to as “business sites.”

Reporting Period

Environmental Report■■ Covalent Materials Nagasaki Corporation

23
25
26
27
28
29
31
33
34

Fiscal 2007 (April 1, 2007 to March 31, 2008). This report presents
the results of activities in fiscal 2007 and also refers to subsequent
topics.

Publication
Previous issue: October 2007
Next issue: October 2009 (scheduled)

Reference Guidelines■ Global Reporting Initiative (GRI) Sustainability Reporting

Guidelines (G3 Guidelines)■ Environmental Reporting Guidelines (Fiscal Year 2007 Version),

Ministry of the Environment of Japan■ Environmental Accounting Guidelines 2005, Ministry of theEnvironment of Japan

Corporate Principles

Corporate Philosophy and Principles
Corporate Philosophy and Principles

The Covalent Group’s Philosophy and Principles
The Covalent Group adheres to the concepts contained in the Corporate Philosophy, Management Policies andthe Covalent Group Standards of Conduct. Our principles related to corporate social responsibility are sharedthroughout the Group and are at the foundation of our management practices and business activities.

Corporate Philosophy
We, the Covalent Group, through our focus on leading-edge materials andhighly functional parts, bring together materials, technology and people topursue and create unconditional value that will contribute to the prosperity ofsociety.

Management Policies
1. Prioritizing the Customer
We accord the highest priority to customers’ satisfaction by providing
value-rich products and services based on new perspectives and dynamic
ideas.
2. Enhancing Corporate Value
Through constant change in management practices and technologicalinnovation, we strive to earn the trust and meet the expectations of all who
are stakeholders in the Covalent Group.

Corporate
Philosophy【Basic management
philosophy】

3. Contributing to Society
We place the highest consideration on human safety and environmental
conservation, and as a good corporate citizen, we aim to achieve a
symbiotic relationship with the global community and local communities inwhich we have a presence by contributing to their developments.
4. Conducting Fair BusinessWe are fully aware of our social responsibilities as a corporate entity, andwe obey the rules and established norms of Japan and other countries as
we conduct business fairly and with integrity.
5. Respecting the Individual

Management Policies【Action principles】

We respect each employee’ s individuality and creativity, and we foster afair and generous environment in which he or she can grow and evolve as
an individual.

The Covalent Group Standards of Conduct
Chapter 1 SOC for Business Activities
1
2
3
4
5
6
7
8

Customer Satisfaction
Production and Technology, Quality Assurance and Product Safety
Marketing and Sales
Procurement
Export Control
Improper Payments and Contracts
Intellectual Property Rights
Accounting

Chapter 2 SOC for Corporate and Individual Relationships

The Covalent Group Standardsof Conduct【A set of shared values and standards of conduct】

Respect for the Individual
Safety and Health
11 Work Ethic
12 Information and Assets
910Chapter 3 SOC for Relations with Society
Community Relations
Environmental Protection
15 Disclosure

13
14

Corporate Social Responsibility Report 20082

President’s Message
CSR Means Reassuring Our Stakeholders andMeeting Their Expectations
Covalent Materials in Our First Year
Covalent Materials Corporation was launched in June 2007
following the separation of Toshiba Ceramics Co., Ltd.
from the Toshiba Group in October 2006 in a managementbuyout. Although our name is new, we have an 80-year
history in leading-edge materials and technologies, including
silicon wafers, process materials for semiconductor andliquid crystal manufacture and advanced ceramics. We
have produced many high-performance materials for thesemiconductor industry and other high-growth markets.
Our new capital structure as an independent company has
made it possible to make decisions flexibly for the medium
and long terms without being constrained by short-term
fluctuations in the marketplace. Along these lines, we areinvesting our management resources in fields where we arehighly competitive and where high growth is expected. We
aim to transform and grow in a manner that we were not able
to under the previous capital structure.

The Covalent Group’s Corporate Social Responsibility
During this period of transition, we understand that ourmanagement transformation must be accompanied bygreater awareness of and commitment to corporate social
responsibility.
At the foundation of the Covalent Group’s corporate social
responsibility is the belief that we must fulfill our responsibility
to society as we carry out our business activities. As wecreate value, we put into practice our Corporate Philosophy.
This is how we would like to reassure our stakeholders andmeet their expectations.

Dr. Susumu Kohyama
President and CEO Covalent Materials Corporation

The Covalent Group’s Corporate Philosophy provides theframework for our business: we “bring together materials,
technology and people to pursue and create unconditional
value that will contribute to the prosperity of society.” In orderto put our philosophy into practice, we have established theManagement Policies which outline the values we follow
when conducting business. Finally, the Group Standards ofConduct list the guidelines which all employees are expected
to observe as they fulfill their corporate social responsibility.
By offering products and services of value and increasing our

3 Corporate Social Responsibility Report 2008

CSR Activities
The Covalent Group has long been involved in leading-edge
materials and parts that support the public infrastructure,such as silicon wafers, process materials for semiconductor
and liquid crystal manufacture and advanced ceramics. We
have developed our business in silicon and ceramics, and as
an enterprise that has skillfully combined our strong points
in both of these domains, there is no other company in theworld like ours. As such, we intend to expand by merging
together the strong points of both domains to create unique,high value-added products that only the Covalent Groupcan create. At a time when technology continues to become
more sophisticated and greater importance is attached to theenvironment and energy, we are planning further refinements
in our semiconductor and liquid crystal businesses, and we
intend to strengthen our involvement in newer domains such ascompound semiconductors, solar battery components and bio.
We have expanded our quality assurance systems to provide
safe, reliable products and services and we will continue tostrengthen continuous quality improvement with the aim ofbeing a company that customers can trust. We will continue
to participate in community events and conduct traffic safety
campaigns and cleanup drives to earn the community’strust as a good corporate citizen. We respect each worker’s
individuality and sense of values while promoting thedevelopment of human resources, and we raise safety
awareness by implementing occupational safety and healthmanagement systems and establishing safety training
facilities. We will continue to respect human rights andestablish safe and secure workplaces.

President’s Message

customers’ trust, we work to achieve stable business growth,fair profits and the delivery of benefits to shareholders,
employees and other stakeholders. As we do this, we
respect people, contribute to the local community and takecare to reduce environmental impacts. These activities
generate economic, human and environmental value, which
are equally important. By growing as an enterprise andincreasing our economic value, we are able to broaden ourcontribution to society and the environment even more,
and in turn our increased social value and reliability work toenhance our economic value. From this viewpoint, we strikea balance between these three values to fulfill our corporatesocial responsibility.

The most urgent environmental problem we face today is
global warming. The Covalent Group considers the reductionof greenhouse gas emissions an important managementtask, and we have implemented measures to help mitigate
the problem. In fiscal 2007, our plants emitted 218,000 tonsof CO2, reflecting a reduction in emissions intensity comparedto the previous year. Some of our energy conservation
measures include using clean electricity generated by ourown hydroelectric power plant, switching to fuels with a
low CO2 emission coefficient, and increased productivity.
We will continue to actively reduce CO2 emissions with theintroduction of new technologies. Under the concept ofgreen manufacturing, we will focus on continuous corporate
development by improving our products and services as we
contribute to a better global environment.
In fiscal 2007, we investigated a company-wide CSR policy,
a CSR implementation structure and ways to disseminate
information within and outside the Group. We establisheda corporate governance system to continually uphold oursocial responsibilities. We will implement the CSR structure
within the framework of the Corporate Philosophy and strive
to balance the three values of the Group’s business activities– economic, human and environmental – to inspire theconfidence of our stakeholders and meet their expectations.

Creating New Values and Contributing to Society
The word covalent means “sharing” and “bonding.” The nameexpresses our desire to create new values with ceramics andsilicon by combining materials, technology and other assets
while placing importance on the relations we have with ourcustomers, partners, local communities, employees and all
stakeholders.
The Covalent Group will always seek new challenges throughopen-minded thinking and offer products that have new,high added value. Through our collective strength we hope
to meet all our stakeholders’ expectations as we under takeactivities that contribute to society.
I hope that this report deepens your understanding of
our CSR activities. I ask for your continued guidance andencouragement in the coming years.

Corporate Social Responsibility Report 2008

4

Company Overview and Business Performance

Company Overview
Company name:

Covalent Materials Corporation

Established:

October 2006

Founded:

September 1928

Headquarters address: Nissei Bldg. 6-3, Ohsaki 1-chome,
Shinagawa-ku, Tokyo 141-0032, Japan
President:

Dr. Susumu Kohyama

Facilities:

Oguni Facility, Hadano Facility, Kariya Facility

Sales offices:

Kyushu Branch, Kansai Branch,
Chubu Branch, Tohoku Branch

Affiliated companies:

Consolidated subsidiaries: 9
Non-consolidated subsidiaries: 3
Affiliates accounted for by theequity method: 1

Facilities and Affiliated Companies(Consolidated Subsidiaries) in Japan■

Denko Co., Ltd.

Oguni-machi, Nishiokitama-gun, Yamagata■

Covalent Machinery Corporation
Oguni-machi, Nishiokitama-gun, Yamagata■

Oguni Facility

Oguni-machi, Nishiokitama-gun, Yamagata■

Covalent Materials Sekikawa Corporation.
Sekikawa-mura, Iwafune-gun, Niigata■

Covalent Materials Niigata Corporation.
Seiro-machi, Kitakanbara-gun, Niigata■

Covalent Sales Corporation
Minato-ku, Tokyo■

Hadano Facility
Hadano, Kanagawa■■

Covalent Materials Tokuyama
Corporation. Shunan, Yamaguchi

Covalent Materials Nagasaki Corporation.
Kawatana-cho, Higashisonogi-gun, Nagasaki

Origin of the Company’s Name■

Tokai Ceramics Co., Ltd.
Toyota, Aichi■

Kariya Facility
Kariya, Aichi

Our company began a new chapter under the name Covalent Materials
Corporation on June 1, 2007, and a new management structure took effect.
The word covalent is used in chemistry terms such as “covalent bond” and“covalent crystal” and it means “sharing” and “bonding.” The company nameexpresses our determination to:• Bring together our ceramics and silicon materials and technologies to create
new values;• Strengthen ties with all stakeholders, which include customers, business
partners and the communities where we do business, and prosper with them;and• Integrate the collective strength of the Group’s employees to achieve sharedhigh targets.

5 Corporate Social Responsibility Report 2008

Company Overview and Business Performance

Business Performance
Innovation and high growth through decisive and focused investment of
resources
Paid-in capital:

34.9 billion yen

Total assets:

202.7 billion yen (consolidated basis)

Net sales:

112.1 billion yen (consolidated basis)

Number of employees: 2,899 (consolidated basis)■

Total Assets (consolidated basis)

Paid-in capital, total assets, net sales and number of
employees are as of March 31, 2008.
Figures for fiscal 2003 to 2006 correspond to Toshiba
Ceramics Co., Ltd., the predecessor of Covalent Materials
Corporation.
Figures correspond to Covalent Materials Corporation and its
nine consolidated subsidiaries.
■(Billion yen)

250

202.7

200

49.7

150
100

FY2007 Sales by Business Group(Billion yen)
Other Businesses
2.6

110.4

108.0

112.0

132.4

59.6 112.1 billion yen

Ceramics
Business(consolidated basis)

Wafer Business

50
0
■

2003

2004

2005

2006

Net Sales (consolidated basis)

2007
(FY)

■

(Billion yen)

140
120

112.1

100
80

FY2007 R&D Expenditure by Business Group(Billion yen)
Other Businesses

69.5

76.4

84.8

96.1

0.9
2.3

60

Ceramics
Business

3.3 billion yen(consolidated basis)

40

Wafer Business

20
0
■

2003

2004

2005

2006

Number of employees (consolidated basis)

2007
(FY)

■

(Persons)

3,500
3,000
2,500

2,526

2,514

2,536

2,650

FY2007 Capital Expenditure by Business Group(Billion yen)
Other Businesses

2,899

2,000

9.9

1,500

30.3 40.4 billion yen

1,000(consolidated basis)

Wafer Business

500
0

Ceramics
Business

2003

2004

2005

2006

2007
(FY)

Corporate Social Responsibility Report 2008

6

Principal Products
Creating New Value through Collective Strength
Products that Support Leading-edge Industries
At production facilities that manufacture high-performance products that lead the age such as semiconductors,
flat panel displays (FPDs), optics and devices for information transmittal, the environment, energy andbiotechnology, the turnaround of products in short time cycles is critical. A necessity for this is the developmentof extremely high-precision and loss-free manufacturing processes.
The Covalent Group has accumulated a wealth of expertise and developed a high level of technical capabilities
in ceramics and silicon, which are indispensable materials in the products and manufacturing processes ofleading-edge fields. Our mission is to take advantage of our unique position as a comprehensive, leading-edge
materials manufacturer and discover unknown potential in raw materials as we provide solutions for leading-edge
industries. After completely understanding the special characteristics of a material, we consider new ways toapply it, and aim to create groundbreaking materials and parts that have functions and structures that have notbeen seen before.
Semiconductor Field■ High value-added wafers increase the performance of semiconductors

At a time when greater semiconductor performance is required and devices become moreminiaturized, the need for defect-free, ultra-flat, wide diameter silicon wafers is increasing. The
Covalent Group has focused on the development of high value-added products using precision heat
treatment and processing technologies, and has established a start-to-finish production and quality
control system from single crystal pulling to surface processing, cleaning and packaging. We mass
produce 300mm wafers and deliver highly reliable wafers to users around the world.

Productline-up• Polished wafers • Annealed wafers (Hi wafers, Hyper Hi-wafers, AT wafers)• Epitaxial wafers • Diffused wafers • SOI wafers

Annealed wafers

Semiconductor Field■ Components and materials that contribute to innovation in semiconductor density and productivity

We develop and supply fine ceramic products, synthetic quartz products and other products thathave highly advanced functions such as quartz glass, carbon and silicon carbide products, which
are necessary for semiconductor manufacturing. We use original purification techniques as well as
scaling, precision, modularization and other techniques to produce special shapes and structures
to solve manufacturing process issues. Our products have earned the confidence of users ascomponents and materials that contribute to increases in semiconductor density and productivity
improvement. For this reason we have captured a high market share for many products.

Productline-up• High purity quartz glass products • TPSS silicon carbide ceramics • Special
carbon, high-purity graphite products • CEPURE ® In-line gas filter • BREAKFILTER™ vacuum-break filters • EXERIA® high-purity yttria ceramics • SAPPHAL®
high-purity alumina ceramics • ADS high-purity alumina ceramics • High-purity
single crystal silicon parts • CERASIC® atmospheric pressure sintered SiC

High-purity, durable quartz glass
crucibles

Flat Panel Display Field■ Higher resolution in large-screen displays and productivity improvement

Glass substrates used for FPD screens continue to increase in size as display sizes increase,and greater precision is required of the components and materials used in their manufacture.
The Covalent Group has won high marks from users for providing synthetic quartz photomask
substrates, BREAK FILTER™ vacuum-break filters, vacuum atmospheric pressure sintered SiC
components and a wide variety of other components and materials that support streamlining andefficiency in FPD production.

Productline-up• BREAK FILTER™ vacuum-break filters • CERASIC ® atmospheric pressure
sintered SiC • Large photomask substrates for LCD display production • Large
quartz chambers • GLASSUN® roll

7 Corporate Social Responsibility Report 2008

Large photomask substrates for
LCD display productionCompany Overview and Business Performance

Semiconductors

Company Overview and Business Performance

Other Industrial
FieldsEnvironment, Energy &Biotechnology

Flat Panel Displays

Other Industrial Fields■ Products and services that contribute to many industrial field

The Covalent Group develops trend-setting, innovative products based on inorganic materials. We
apply our sophisticated knowledge and a vast store of materials expertise to offer a diverse range of
products and services that contribute to many different industrial fields.

Productline-up• QCH-HEATER® • CERASIC® atmospheric pressure sintered SiC • GLASSUN®
fused silica refractories • Carbon brushes • TECORUNDUM silicon carbide
heating elements • Kiln furniture for sintering electronic parts • Monolithic
refractories • Refractories for the glass industry

QCH-HEATER®

Environment, Energy & Biotechnology Fields■ Support for leading-edge environmental engineering and medical fields

The 21st century has been called the century of the environment. Technological development inenvironment-related fields has become a common theme in the global community, and markets
for environmental products expand year by year. As an upstream components maker in the
manufacturing process, the Covalent Group has had an early involvement in environmental
protection and environmental load reduction and has developed new products that contributeto solving environmental and energy problems. Furthermore, as societies age and interest in
biotechnology increases, we have begun to take full advantage of our world-class materials andprocessing technologies to develop bio-related products.

Productline-up• CERASIC ® atmospheric pressure sintered SiC • Silicon crucibles for solar
battery manufacturing • NEOBONE artificial ceramic bone material • Ceramic
products for regenerative medicine

Silicon wafers support public infrastructure
Silicon wafers are processed into electronic components at
semiconductor device manufacturers, then they are incorporated
into digital audio players, PCs, digital home appliances,automobiles, railroad equipment and numerous other products.
The Covalent Group’s products provide fundamental support fortoday’s convenient, affluent way of life.

Siliconwafers

Silicon crucibles for solar battery
manufacturing

Flash memory

MemoryDRAM

Memory,computing

Digital audio
players

PCs

CPUs, custom
microchips

Image processing andcontrolPowertransistors

High power,
equipment control

IGBTs
Thyristors,
giant transistors

High power,
equipment control

Digitalappliances

Automobiles
Railroadequipment

Corporate Social Responsibility Report 20088

Management

Corporate GovernanceTransparent, sound corporate management enhances management quality
and efficiency
The Company considers the purpose of corporate governance to be the assurance of a highly transparent, soundcorporate management and the enhancement of management quality and efficiency.
The enhancement of corporate and stakeholder value and the maintenance of appropriate relations with ourcustomers, business partners, employees, the communities where we have a presence and other stakeholders,through the fulfillment of corporate governance, are important management policies.

■

Corporate Governance Structure
General Meeting of Shareholders
Appointment/Dismissal

Board of Auditors/
Corporate Auditors

Statutory Audit

Appointment/Dismissal

Appointment/Dismissal

Board of Directors/
Directors

Accounting Auditor

Appointment/Dismissal

Statutory Audit

Supervisory

Accounting Audit

President
Instructions on Business Operations

Corporate Audit

Executive Officers
Internal Audit

Internal Audit

Instructions on Business Operations

Operating Organizations

9 Corporate Social Responsibility Report 2008

Management

Board of Directors
The Company has eight directors, including four external directors without executive power. The Board of
Directors deliberates and decides statutory matters and other important matters concerning management,
referring to the outside directors’ objective opinions. The Board of Directors also holds supervisory authority overeach director’s execution of duties. The term of office of directors is set at one year in the Articles of Incorporation
to ensure flexible adaptation to changes in the business environment and clear-cut management responsibility.

Board of Auditors
The Board of Auditors consists of two internal corporate auditors and two external corporate auditors. As an
independent body with a mandate from shareholders, the Board of Auditors audits directors’ execution of duties
in cooperation with the accounting auditor and the Corporate Audit Office, an internal audit unit, in order tostrengthen management transparency and supervision.

Executive Officer System
The Company has an executive officer system to separate management supervision from business execution by
executive officers. Executive officers responsible for operating each business organization make decisions andexecute business within the scope of their authority.

Internal Audit System
The Corporate Audit Office reports to the president and is responsible for internal auditing. The Corporate
Audit Office conducts internal audits of the Company and Group companies, follows up on the progress ofmanagement issues and makes proposals concerning internal control. The Corporate Audit Office regularly
exchanges opinions with corporate auditors and the accounting auditor to strengthen cooperation and enhance
the quality and efficiency of auditing.

Compensation for Directors, Corporate Auditors and Executive Officers
Compensation for directors, corporate auditors and executive officers is determined based on certain standards
and via a fair and transparent process. Amounts of compensation for directors and corporate auditors arewithin the maximum amounts approved by the resolution of the general meeting of shareholders. Amounts ofcompensation for other executive officers are determined based on the Company’s compensation system andreflect the Company’s business results and individual executive officers’ contributions and also the objective
opinions of outside directors etc.

Corporate Social Responsibility Report 2008 10

Compliance and Risk Management
Integrated risk management for sustainable development
Integrated Risk Management System
Legal compliance and responses to risks and crises are essential for the sustainable development of anenterprise. In order to be able to cope with the diverse risks the Company faces, a cross-functional team (CFT)
has been organized to lead a group-wide initiative to strengthen risk management.
Under the Company’s integrated risk management system, information concerning risks is communicatedthrough each organization and consolidated under the Chief Risk Management Officer (CRO), and in accordancewith instructions and necessary support, measures are implemented.
The Company has whistleblower systems in place, which are the Covalent Group Help Line and the Clean
Partner Line, for the purpose of assessing compliance, discovering information concerning risks and promptly
responding to them. With the Covalent Group Help Line, employees can directly report their concerns to or seek
advice from the General Administration Group (legal affairs and risk management) instead of their superiors. The
Clean Partner Line enables vendors and other business partners to report concerns about the violation of laws,
ordinances or contracts in transactions with the Covalent Group.

■

Integrated Risk Management System
Media organizations

Legal, consulting, etc.

Information

Cooperation

Public Relations

Corporate organizations
President andExecutive Officers

Policy report

Audit report

Instruction
ReportCRO

General Manager, General Administration/
General Administration Group

ReportCorporate
Audit Office

Cooperation

Guidance/Support

Cooperation

Staff
organizations

Clean Partner Line (report system)
ReportGuidance/Support

Vendors/
Partners

Help Line (whistleblower system)
Audit
Guidance/Support

Audit

Risk information

ReportAll employees

CFT

Business organizations
Business groups, Affiliated companies
ReportInstruction

11 Corporate Social Responsibility Report 2008

Corporate
Auditors

Risk information

Administrative organizations(in charge of risk management)

Routine monitoring
Routine inspection

Audit

Management

Management

Raising Awareness of the Importance of Compliance
The Company’s management policy states, “We are fully aware of our social
responsibilities as a corporate entity, and we obey the rules and established normsof Japan and other countries as we conduct business fairly and with integrity.”
With the aim of instilling a corporate culture that values fairness and integrity, theCovalent Group provides compliance education as a part of employees’ jobspecific training, which coincides with the employees’ advancement or promotion.
Compliance education includes a briefing on the management policies and theCovalent Group Standards of Conduct, explanation of the risks of non-complianceand changes in the values and attitudes of employees and society. The CovalentGroup provides compliance education five times a year.
The Covalent Group has published the Compliance Guidelines, a handbook of
the Covalent Group Standards of Conduct and relevant laws and regulations. This
handbook is distributed to all the Group’s employees to raise their awareness.

The Compliance Guidelines

Information Security and Intellectual Property Management
The Covalent Group Standards of Conduct addresses the protection of information and intellectual property
that belong to the Company and third parties. The Covalent Group continually seeks ways to strengthen andimprove its rules governing information security and intellectual property management. We also seek to raise
the awareness of employees regarding these issues as well as risk management methods in order to prevent
information disclosure and inappropriate use of intellectual property.

Excerpts from the Covalent Group Standards of Conduct
Respect for Intellectual Property Rights
We fully put into practice the protection of the Company’s intellectual property, and at the same time, we
respect the intellectual property rights of third parties.

Respect for Information and Assets
We treat information and assets of the Company and of third parties appropriately and strive to prevent their
inappropriate disclosure, leakage or use.

Corporate Social Responsibility Report 2008 12

Society and Human Report

Responsibility to Customers
The Covalent Group provides safe, reliable products and services to customers
Quality Management Systems
The Covalent Group performs quality assurance activities based on the Quality Policy, whose aim is to achieve
world-class quality. To ensure the highest product safety and quality, our Quality Assurance Committee hasdeveloped a quality management system. Group-wide objectives and measures related to quality that are basedon the Quality Policy are assigned to quality assurance committees, which have been established at the businessgroup, division and facility levels and reflect the quality objectives of each worksite.
In the event of a product safety incident, the Quality Assurance Committee functions as a product liability(PL) accident task force and rapidly decides the necessary course of action. The Committee puts into place aframework for appropriately responding to the customer.
We have acquired ISO 9001 quality management system certification at seven manufacturing sites. We have alsoacquired ISO 13485 certification for bio and medical device-related products and ISO/TS 16949 certification forautomotive-related products, which are two categories of products that demand very high quality.

The Covalent Group Quality Policy“We provide safe, reliable products for our customers.”
Quality Management Structure■

Occurrence of a PL incident

President

Quality Management Representative(General Manager,
Quality Management Department)■

Occurrence of a PL incidentGroup-wide
PL incident
Quality
Assurance
Committee

Business group PL incident task force
Business groupquality assurance
committee

Business divisionquality assurance
committee

Quality Management System Certificate
Manufacturing Site

Hadano Facility

Process Materials Division
Bio-Ceramics Business Division

Standard

Certification Date

ISO9001
ISO13485

Dec. 2007
Mar. 2005

Kariya Facility

ISO9001

Dec. 1996

Oguni Facility

ISO9001

Feb. 1995

Covalent Materials Niigata Corporation

ISO9001
ISO/TS16949

Apr. 1996
Jan. 2007

Covalent Materials Tokuyama Corporation

ISO9001
ISO/TS16949

Mar. 1996
Mar. 2007

Covalent Materials Nagasaki Corporation

ISO9001Mar. 1997

Covalent Materials Sekikawa Corporation

ISO9001

Jun. 1996

13 Corporate Social Responsibility Report 2008

Plant quality
assurance
committee

Continuous Quality Improvement
Ongoing activities are necessary to achieve quality improvement. The
Covalent Group identifies areas critical to quality control reinforcement on
the basis of group-wide evaluations and actively conducts improvements indesign quality and workplaces. Quality starts with people, and we believethat education and training form the basis of quality. We provide thoroughquality education for employees from young entrants to workplace veterans
to instill a quality mindset and promote the utilization of FMEA (Failure
Mode and Effects Analysis), a management method for predicting the causes of potential quality problems andpreventing them from occurring, and QC (quality control) tools. We have also established quality improvement
activities throughout the entire workforce with small group activities and KAIZEN (“Improvement”) presentation
meetings, which show excellent examples of improvement activities within the Covalent Group and are held
annually to promote the importance of continuous improvement.
As a result of these activities, quality complaints from customers have decreased by about 60% during the period
from fiscal years 2004–2007. We engage in green procurement and other product and environmental assurance
activities and have obtained certification under our customer’s Green Partner System, a system whereby acompany evaluates a supplier’s environmental management system and certifies that the supplier is meeting thecompany’s environmental management criteria, such as those concerning chemical substances with respect toprocured parts and materials.

■

Continuous Product Quality
Improvement Activities

Customer requests andcomplaints

Quality risk assessment

Qualityobjectives

Quality trend control(visible control)Group-wide quality assessment(self-assessment)

Establishment of FMEA1
Change control■■■

Quality improvement program

Prevention activities such as error prevention
and elimination■ Development of products with built-in quality■

Corporate criteria for quality assurance level
Quality audits, process inspection tours■

Continuous improvement activities on production lines
Small group activities (full participation)
QC tool utilization (quality education)■■

Covalent Materials Technology Exhibition
The Covalent Group held a Technology Exhibition at the Izumi Garden Gallery in Roppongi,
Tokyo on November 15–16, 2007 to publicize the Group’s inauguration. We displayed our
product lines and unique technologies at a single location for customers and visitors fromuniversities, government organizations, the media and financial institutions.
At our first-ever private exhibition, we set up areas according to each business field andshowcased our technological capabilities with product samples, data and videos. More than
1,300 people visited over two days, and there were high expectations and a strong interest in
the newly independent Covalent Group.

Corporate Social Responsibility Report 2008 14

Society and Human Report

KAIZEN Presentation meetingResponsibility to Suppliers
The Covalent Group engages in fair and equitable trading with suppliers
Procurement Activities
The Covalent Group’s basic purchasing policy is to engage in trading based on fair and equitable competition
with suppliers that offer the best quality, price and delivery terms regardless of location. We work to develop
sound partnerships with suppliers and to ensure transparency in procurement activities, and we publish our basicpurchasing policy and procurement procedures on our website.
The Covalent Group Standards of Conduct states our policy for observing laws and honoring contracts andagreements and engaging in fair trading. We strive to instill this policy in our employees.

Excerpt from the Covalent Group Standards of Conduct
Procurement Activities
We observe the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors, theAntitrust Act, and other laws, honor contracts and agreements, and procure necessary goods andservices having appropriate quality, price, and delivery terms on the basis of fair trading relationships.

The Covalent Group Basic Purchasing Policy
Best Procurement
Worldwide

We engage in trading based on the principle of fair and equitable competition with suppliers thatoffer the best quality, price and delivery terms, regardless of location.

Relationships Built
on Trust

We create mutual benefits based on relationships of trust. We refrain from disclosing to external
parties confidential matters that come to our knowledge in the course of business.

Legal Compliance

We obey all relevant laws as the basis of our behavior in all business transactions.

Green Procurement

In procurement, we accord priority to suppliers whose environmental performance is excellent.

Supplier Reporting System
We have established a Clean Partner Line on our website, which is a reporting system that suppliers can use todirectly contact the General Administration Group (which is in charge of legal affairs and risk management) in theevent of actions that violate laws, ordinances or contracts in transactions with external parties.
■

Clean Partner Line
Covalent Group
OrdersSuppliers

1 Reporting information concerning
violations of laws, ordinancesor contracts

3 Response

General Administration Group（maneges legal affairs
and risk management）

Purchasing
departments
2 Investigation,
advice forcorrection

Green Procurement
The Covalent Group has established the Green Procurement Guidelines and practices green procurement to create
eco-friendly products. We give priority to raw materials, components and supplies that reflect a consideration for
health, safety and the environment. These considerations include the elimination of hazardous substances andconversion to substances that are safe and have minimal environmental impact.
15 Corporate Social Responsibility Report 2008

Society and Human Report

Responsibility to Employees
Respecting human rights and employees’ values and creating safe workplaces
Respect for People

Excerpts from the Covalent Group Standards of Conduct
Respect for People
We respect basic human rights and each person’s character and individuality, and we recognize and accept
the diverse values of individuals and do not engage in human rights violations or discriminatory treatment.
■ Employment of People with Disabilities

In keeping with the concept of normalization, we employ people with disabilities and meet or exceed government quotas
related to such employment, and we endeavor to develop areas of work that are appropriate to individual characteristics
and capabilities and create work-friendly environments. As a result of activities implemented over many years, theGroup’s employment ratio of people with disabilities was 1.94% as of June 2008.
■ Rehiring of Seniors

To enable employees who wish to continue to work after the mandatory retirement age, we have established the Senior
Course Selection System, a rehiring system, and we work to provide employment opportunities for employees with
ample experience and skills.
■ Promotion of Diversity

The Covalent Group respects individuality and endeavors to develop systems to realize an open-minded, orderly
working environment in which employees with diverse values can fully demonstrate their capabilities. In particular, toensure an environment in which women can enjoy greater success, we are enhancing our maternity leave system aswell as implementing a parental and family care leave system.
■ Education and Enlightenment

To promote awareness of human rights and respect for diversity among employees, we provide human rights
enlightenment training to employees in all positions. For new employees, we conduct training in behavior expectedof individuals with an emphasis on basic concepts concerning human rights. For managerial personnel, we conduct
practical training that focuses on human rights awareness in workplace management and effective utilization of diverse
human resources.

Fair Evaluation and Treatment
To maximize employee motivation and capabilities, we assess work capabilities and performance and place
importance on fair and appropriate personnel assignment and treatment. We implement various initiatives toensure impartial employee evaluation and fair and appropriate treatment.
■ Systems for Fair Evaluation of Job Skills and Performance

The Covalent Group clearly defines objectives and roles for each employee. There is a management by objectives
system to effect employee treatment based on individual performance, and a pay increase evaluation system to motivate
employees and promote enhancement of job skills and add new vitality. We have also introduced a self-assessment
system to provide a forum for employees to communicate their thoughts about future career development.
■ Grievance Committee

The Covalent Group has a system that enables employees to lodge complaints through a grievance committee forproblems related to employee treatment or other labor matters. The workplace where the complaint has been lodged
forms a grievance committee consisting of members from both the company and the labor union and engages in fairdeliberations aimed at an appropriate solution.

Corporate Social Responsibility Report 2008 16

Society and Human Report

The Covalent Group expresses respect for people as a basic policy in the Standards of Conduct, and instills anawareness of human rights through systems, education and actions. We respect the human rights and diverse
values of individuals and seek to create open-minded, highly creative working environments.

Development and Effective Utilization of Human Resources
The Covalent Group enacts various education programs to develop strong, independent people who willingly tackle
difficult problems. We link education programs and personnel evaluation systems to promote career development
and the effective utilization of people.

■ Job-Specific Training

To enable employees to acquire the knowledge and skills required for new career opportunities, we conduct job-specifictraining timed to coincide with qualification advancement or promotion.

■

Job-Specific Training

STEP 6

STEP 5
STEP 4

New executive training

New senior manager training

STEP 3
STEP 2
STEP 1

New manager training
New deputy manager training

Mid-career employee training

New employee training■ Upgrading Skills

We conduct training for all employees so they
can acquire the skills necessary for their jobs.
There are language and professional education
courses suited to each job classification and they
are conducted through group training, distancelearning and e-learning. We enable employees toselect their preferred programs under the basic
concept that people undertake skills development
through their own self-motivation.

■ Internal Recruiting System

With the aim of inspiring and promoting motivatedemployees so they can realize their full potential,
we have established an Open Challenge System,
which is a system for extensive recruiting within theGroup when the need for job-specific personnel
arises in areas related to new businesses or growthbusinesses.

17 Corporate Social Responsibility Report 2008■

Career Development

Reflection in
employee treatment

Selfdevelopment
Management
by objectives
systemSelfassessment
systemManagement
by objectives
system
Pay increase
evaluation
system

Pay increase
evaluation
system

Job-specifictraining
Selfassessment
systemUpgrading skills

Society and Human Report

The Covalent Group maintains safe and clean work environments and aims to prevent occupational accidents.
We adhere to the Basic Policy on Safety and Health Management in order to provide creative, efficient, safe andcomfortable workplaces. We also encourage employees to take initiatives in their own health management.

The Covalent Group’s Basic Policy on Safety and Health Management
The Covalent Group recognizes that ensuring the safety and health of all people engaged in theGroup’s businesses is one of the most important tasks for management. Accordingly, this recognition isembodied in the slogan “Survival in the 21st century: establish a culture of safety and enhance physicaland mental well-being.” We reflect this slogan in the items below:

Ⅰ. Priority
items

Ⅱ. Action
items

1

Prevent occupational accidents

2

Enhance mental and physical health and eliminate occupational illnesses

3

Obey laws related to safety and health and the Group’s rules

4

Promote comfortable work environments

5

Secure the safety and health of subcontractors

6

Put into effect occupational safety and health management systems

1

Prevent occupational accidents
1) Supervisors perform thorough work checks2) Communicate work risks involved to employees and make sure employees understandrisks3) Assess risks related to equipment, facilities and jobs and formulate improvement plans
4) Investigate causes of frequent accidents (pinching, getting caught, cuts and scratches)and prevent recurrence5) Use the safety and health activity check sheet to raise lafety levels
Achievement of 90%+ in fiscal 2007 and 95%+ in fiscal 2008 for the following six items:
organization and structure, compliance, safety activities, health activities, systems andrules, and education■ Sites covered
Hadano Facility, Oguni Facility, Kariya Facility, Covalent Materials Niigata Corporation,
Covalent Materials Tokuyama Corporation, Covalent Materials Nagasaki Nagasaki
Corporation, Covalent Materials Sekikawa Corporation, and Tokai Ceramics Co., Ltd.
6) Thorough safety and health education
Educate and train new workers, workers with less than 10 years of experience and newly
assigned chief foremen and deputy managers of production lines for skill upgrades

2

Mental and physical health management activities
Support and provide guidance for health and health checks by occupational physicians andnurses3

Obey laws related to safety and health1) Systematically improve work environments
2) Systematically improve insufficient wind speeds of local ventilators

4

Furnish comfortable work environments
1) Conduct survey of work environments by Womens’ Patrol and improve them2) Support the Law to Promote Measures Supporting the Development of the Next
Generation

5

Secure the safety and health of subcontractors
1) Establish an environment for information exchange with on-site partner companies
2) Establish a system to communicate requirements related to health and safety toconstruction companies and confirm that they understand the requirements

6

Operate JISHA-qualified OSHMS

Corporate Social Responsibility Report 2008 18

Society and Human Report

Occupational Safety and Health PolicyOccupational Safety and Health Management Structure
The Covalent Group has established an integrated management structure for safety and health, and the CovalentGroup Safety and Health Committee makes the final decisions regarding this structure. We are in the process ofestablishing occupational safety and health management systems (OSHMS). Oguni Facility, Hadano Facility, Kariya
Facility, Covalent Materials Niigata Corporation, and Covalent Materials Tokuyama Corporation, and Covalent
Materials Nagasaki Corporation have acquired OSHMS certification from the Japan Industrial Safety and Health
Association (JISHA).
■

Occupational Safety and Health Management Structure
Conference bodyPresident

Covalent Group Safety and Health Committee
President of Covalent Materials
Corporation Chairman: Chief Safety and
Health Management Officer (Responsible forsafety and health and environmental
management)
Members: Heads of business groups andstaff groups, general managers of facilities,
presidents of affiliated companies andrepresentatives(Responsible for safety and health andenvironmental management)

Covalent Group Safety and Health Manager

JISHA qualified OSHMS Certification
Site nameManagement structure

Chief Safety and Health Management Officer■

Certified dateOguni Facility

Aug. 2004

Hadano Facility

Oct. 2006

Kariya Facility

Aug. 2004

Covalent Materials Niigata Corporation

Mar. 2007

Covalent Materials Tokuyama Corporation

Jan. 2007

Covalent Materials Nagasaki Corporation

Mar. 2005

Group Safety and Health Management Officer(Group head)

Central Safety and Health Committee
Site Safety and Health Management Officer(Facility’s general manager,
affiliated company’s president)

Site Safety and Health Committee

Site Safety and Health Manager

Occupational Accidents
The number of occupational accidents in fiscal 2007 was higher than in fiscal 2006. Based on this, we haveintroduced hands-on safety training and KYT (kiken yochi training) hazard prediction training to provide thoroughtraining concerning occupational risks. We are enacting workplace improvements based on risk assessment tobuild safety into facilities and improve the level of occupational safety and health.
■Number of Occupational Accidents■(unable to work/able to work)(Number of accidents)

20
18
16

4

Able to work while recovering

10

6

Burns

6

4
2
0

Pinching/
getting caught

FY2007

2

4

1
7

8

2

1

14

11

10

3

Falls

2

12

Cuts/scratches

Chemical burns

Unable to work while recovering

14

Breakdown of Occupational Accidents

18 accidents

2

8Tumbles2003

2004

19 Corporate Social Responsibility Report 2008

2005

2006

2007
(FY)

Scope of data: Total of 4,162 employees at headquarters,
3 facilities and consolidated subsidiaries in Japan(including temporary workers)

Society and Human Report

事業所

労働安全衛生教育事例

参加者数

労働安全衛生教育事例

秦野事業所

45 名

局所排気装置教育

メタボリック講習会

コバレントマテリアル新潟㈱71 名

安全衛生レベルアップ教育

産業医講習会

コバレントマテリアル関川㈱70 名

KYT 教育

小国事業所

91 名

AED 教育

刈谷事業所

75 名

コバレントマテリアル新潟㈱133 名

コバレントマテリアル徳山㈱389 名

メンタルヘルス教育
Occupational Safety and Health Management Activities■ Internal Occupational Safety and Health Audits

The officer responsible for safety and health management and the Environment, Safety and Health Department conduct
internal audits of all sites of the Covalent Group at least one a year, assess the sites’ safety and health activities andcompliance with relevant laws and make recommendations. The Environment, Safety and Health Department follows up
with the audit results so that safety and health activities will be improved.

■ Occupational Safety and Health Education andTraining
Job-specific training, such as training for newly assigned
managers, includes topics such as mental health and casestudies of occupational accidents. Employees receive training
according to their responsibilities.
Each site provides safety and health education and training
programs based on the annual plan according to the site’s
needs. The objective is to ensure the safety of employees andraise their awareness of safety and health.
The Covalent Group holds an annual safety and healthconference to enhance awareness of safety and healthissues and share information among Group companies. The
conference includes presentations by sites and a lecture byan outside speaker.

■

Occupational Safety and Health Education
Programs (Examples)
Site

Program name
Veterans education

Hadano Facility

Number ofparticipants

25

Metabolic syndrome workshop Covalent Materials Niigata Corporation

71

Industrial physician workshop

Covalent Materials Sekikawa Corporation70

Mental health education

Oguni Facility

91

Local ventilator training

Kariya Facility

75

Covalent Materials Niigata Corporation

133

Covalent Materials Tokuyama Corporation

389

Oguni Facility

17

Safety and health upgrade education Hadano Facility

54

KYT training

Covalent Materials Niigata Corporation

81

AED training

Covalent Materials Tokuyama Corporation

22■ Women’s Patrol

Under the banner of “understanding the concerns of female employees and providing a female-friendly work environment,”groups consisting of female health managers visit workplaces and conduct surveys of female employees to identify
problems and make improvements. Meetings of these groups are held to share information among sites.

■ Hands-on Safety Training

At the Covalent Group, we think it is important to increase each employee’s sensitivity about risks in order to eliminate
occupational accidents. Based on this understanding, we have introduced hands-on safety training at Oguni Facility and
Hadano Facility. This training allows trainees to recognize risks involving their work through experience.
Oguni Facility has introduced 18 risk simulators including those for getting caught by a roller and being suspended by asafety harness. The Covalent Group intends to introduce risk simulators at other sites step by step.

Risk of getting caught by a roller

Risk of pinching by sling equipment

Being suspended from a safety harness
Corporate Social Responsibility Report 2008 20

Society and Human Report

高齢者教育Responsibility to Local Communities
Aiming for the community’s trust by promoting good corporate citizenship
Partnership with Local Communities
We conduct corporate citizenship activities to cooperate with local communities and form partnerships with them.
We fulfill our responsibility as a member of the community and strive to expand opportunities for communication
with local communities.
Covalent Materials has established the Wide Plan Leave System to support employees’ volunteer activities. Under
this system, employees can accumulate annual paid holidays that would otherwise expire and use them as paid
holidays for when they participate in activities that make a social contribution.

Excerpt from the Covalent Group Standards of Conduct
Community Relations
We maintain good relations with local communities through cooperation and partnerships and fulfill our
responsibility as a member of the community.

Corporate Citizenship Activities■ Volunteer Activities

As a corporate citizen, each site of the Covalent Group cooperates with the local community where it is based andcontributes to the quality of the local environment.
In an event organized by the forestry office of Shunan City, Yamaguchi prefecture, Covalent Materials Tokuyama
Corporation cleared underbrush and pruned trees to maintain the forest owned by the city.
The Covalent Group’s sites hold regular clean-up drives in the surrounding area as well as blood donation campaigns.
Other activities include providing voluntary school crossing wardens to ensure the safety of children as they cross streets.

Cleaning up the area around the site
(Covalent Materials Niigata Corporation)

Taking care of the forest (Covalent Materials Tokuyama Corporation)

21 Corporate Social Responsibility Report 2008

School crossing warden(Tokai Ceramics Co., Ltd.)Society and Human ReportSociety and Human Report■ Factory Visits to Learn through Hands-on Experience

The Covalent Group eagerly offers
young people opportunities to visit its
factories and find out for themselves
what the world of work is all about
through hands-on experience.

Junior high school students learn about
work (Oguni Facility)

High school students learn about work
(Covalent Materials Sekikawa Corporation)

Emergency drill (rescue operation)(Covalent Materials Tokuyama Corporation)

Emergency drill (earthquake simulation)(Covalent Materials Sekikawa Corporation)■ Disaster Prevention Activities

We conduct regular maintenance andinspection of facilities and implement
thorough safety management in orderto prevent fires and other accidents.
We also conduct emergency drills incooperation with relevant authorities
to ensure preparedness in the event ofan earthquake, fire or other disaster.

■ Events Rooted in the Local Community

Oguni Facility made its facilities available for the Azumazeki sumo stable for a training camp in mid-August. Sumo
wrestlers held training sessions at the sumo ring at the site. Numerous spectators from the local community cheered thesumo wrestlers. At the Oguni Summer Festival organized by the municipality, Oguni Facility donated fireworks for a display.
In early spring, Kariya Facility invited local residents to enjoy refreshments beneath the blossoming cherry trees.

Sumo wrestlers of the Azumazeki stable
in training (Oguni Facility)

Fireworks display at the Oguni Summer
Festival (Oguni Facility)

Local residents were invited to the cherry
blossom viewing (Kariya Facility)■ Other Activities

Covalent Materials Niigata Corporation is a banner sponsor of Albirex Niigata, a local soccer club in J League Division 1.
The Covalent Group sponsors events in local communities and makes donations to universities.

Corporate Social Responsibility Report 2008 22

Environmental Report

Environmental Management
Symbiosis with the environment
Basic Environmental Policy
The Covalent Group regards environmental protection as a key management issue. We are engaged in environmental
protection activities on a continual and voluntary basis, and these are guided by the Environmental Policy weestablished in 1989.

The Covalent Group Basic Environmental Policy
As a specialist in materials, the Covalent Group works to bring together materials, technologies andpeople to create new values. In carrying out our activities, we promote environmental protection in
the belief that the Earth’s resources are invaluable. Accordingly, the Covalent Group promotes thefollowing management concepts:
1

Position environmental protection as a critical issue at the heart of our business.

2

Adhere to environmental laws, environmental guidelines embraced by the Covalent Group, andother voluntary environmental protection standards.

3

Reduce the environmental impacts of our business activities and prevent pollution.

4

Based on a voluntary action plan, decrease CO 2 emissions to reduce global warming, promote
zero emissions through the effective use of resources, and reduce the use of chemical substances.
Promote green procurement, including the according of priority to the selection of raw materials
with minimal environmental impacts.

5
6

Contribute to society by developing and providing superior environmental technology and products,
cooperating with communities, and undertaking environmental protection activities in general.

Environmental Management Structure
The Covalent Group has established an integrated environmental management structure, and the Covalent Group
Environmental Committee makes all final decisions regarding this structure.
The Covalent Group’s eight manufacturing sites, including consolidated subsidiaries in Japan, have been ISO 14001
certified.
■

Environmental Management StructureManagement structure
President

Chief Environmental Management Officer(Responsible for safety and health andenvironmental management)

Covalent Group Environmental Manager
Group Environmental Management Officer(Group head)

Conference body

Site namedate for certification in
Certified date Renewal
accordance with 2004 version

Covalent Group Environmental Committee

Oguni Facility

Feb. 1998

Mar. 2006

Hadano Facility

Mar. 1998

Apr. 2006

Kariya Facility

Apr. 2000

Apr. 2006

Covalent Materials Niigata Corporation

Dec. 1997

Mar. 2006

Covalent Materials Tokuyama Corporation

Mar. 1998

Apr. 2006

Covalent Materials Nagasaki Corporation

Dec. 2000

Jan. 2006

Covalent Materials Sekikawa Corporation

Apr. 1999

Mar. 2006

Tokai Ceramics Co., Ltd.

Oct. 2003

Dec. 2005(Facility’s general manager,
affiliated company’s president)

23 Corporate Social Responsibility Report 2008

ISO 14001 Certification

President of Covalent Materials Corporation
Chairman: Chief Environmental
Management Officer (Responsible for safety
and health and environmental management)
Members: Heads of business groups andstaff groups, general managers of facilities,
presidents of affiliated companies andrepresentatives

Site Environmental Management Officer

Site Environmental Manager■

Site Environmental Management Committee* Certification body: Japan Quality Assurance Organization (JQA)

The officer responsible for environmental management and the Environment, Safety and Health Department conduct
internal audits of all sites of the Covalent Group at least once a year, assess their environmental protection activities
and compliance with environment-related laws, and make recommendations. The Environment, Safety and Health
Department follows up the audit results to improve environmental activities.

Emergency drill audit (Covalent Materials Tokuyama Corporation)

Internal audit (Covalent Materials Nagasaki Corporation)

Environmental Education
In order to deepen understanding, heighten awareness and enhance environmental protection skills, all CovalentGroup employees receive environmental education on a regular basis. The content of the education varies according
to positions and responsibilities. To ensure compliance and enhance the skills of individual employees, the CovalentGroup supports and encourages employees to acquire qualifications and attend lectures.
Contractors working at the Group’s sites are informed ofenvironmental and safety requirements.

Introductory education on environmentallyconscious design (Hadano Facility)
Over 50 engineers par ticipated in the introductor yeducation program on environmentally conscious
design, which was held at Hadano Facility on February
14. Considering the impor tance of environmental
consciousness at the product design stage, from fiscal
2008 onward the Covalent Group has made it mandatoryfor engineers in their second year at the Covalent Group torecieve education on environmentally conscious design.

■

Employees with Qualifications
Qualification

Number of
employees

Pollution control manager (air, water, noise, vibration)

68

Industrial waste intermediary treatment facility engineering manager

8

Designated industrial waste supervisor

19

Energy management (heat, electricity)

26

Working environment measurement expert (Type 1, Type 2)

6

Health supervisor (Type 1), health engineering supervisor

54

Boiler engineer (Class 1, Class 2)

92

Organic solvent work chief

313

Designated chemical substance work chief

707

Radiation protection supervisor

26

Hazardous material handler (Type “ko,” Type “otsu” )428

High-pressure gas production and safety supervisor

50

Special high-pressure gas handling chief

109

Internal environmental auditor

176

Internal safety and health auditor

131
Corporate Social Responsibility Report 2008 24

Environmental Report

Internal Environmental Audits

Targets and Results of Environmental Activities
Reducing environmental impact under the environmental action plan
Overview of the Environmental Action Plan
The Covalent Group is working to reduce the environmental impacts of its business activities in accordance with theenvironmental action plan.
■

Environmental Action Plan and Results
Target for FY2007

Results

Evaluation

Reduce CO2 emissions (emissions intensity) at least 1%
in FY2007 compared with FY2006

2.4% reduction

Targetachieved

Zero emission

Reduce final disposal rate at least 1 percentage point in
FY2007 compared with FY2006 (4.7% or less)1.2percentage point
reduction (4.5%)

Targetachieved

Reducechemical
substances

Reduce Pollutant Release and Transfer Register (PRTR)
substance emissions (emissions intensity) at least 2% in
FY2007 compared with FY2005

45.9 % reduction

Targetachieved

Priority items
Reduce emissions
that lead to
global warming
1■

FY2008 Environmental Action Plan and Mid-term Plan
Priority items

Target for FY2008

Results, Evaluation

Reduce emissions
that lead to
global warming

Reduce CO2 emissions (emissions intensity) at least 1%
in FY2008 compared with FY2007

Reduce CO2 emissions (emissions intensity)
at least 15% by FY2010 compared with
FY2005

Zero emission

Reduce final disposal rate to 4.5% or less

Reduce final disposal rate to 4% or lessby FY2010

Reducechemical
substances

Reduce PRTR substance emissions (emissions intensity)
at least 1% in FY2008 compared with FY2007

Reduce PRTR substance emissions(emissions intensity) at least 27%
by FY2010 compared with FY2005

1

1 Zero emission of waste: Final disposal rate = Amount of final disposal / Total waste discharged x 100

Environmental Accounting≦1

The Covalent Group assesses environmental costs and applies the results to business activities.
■

Environmental Costs
Expenditure Costs

Content

Classification(Million yen) (Million yen)

Ⅰ Business area costs
Ⅰ-ⅰ Pollution prevention costs Prevention of pollution to atmosphere, water, soil, etc.
Ⅰ-ⅱ Global environmental protection costs Prevention of global warming, protection of the ozone layer, etc.
Ⅰ-ⅲ Resource circulation costs Eﬀective utilization of resources, recycling of waste, etc.

1,868
1,598
254
16

875
583
53
240

Ⅱ Upstream/downstream costs Green procurement, product recovery and recycling, etc.

00

Ⅲ Administration costs

Monitoring of environmental impacts, planting of greenery, etc.

13

40

Ⅳ R&D costs

Development of environmentally conscious products etc.

97

207

Ⅴ Social activity costs

Disclosure of information etc.

0

1

0

147

1,978

1,270

Ⅵ Environmental remediation costs Natural restoration etc.
Total environmental cost■

Period: From April 2007 to March2008
Scope: 3 facilities and 5
consolidated subsidiaries
Expenditure: Of expendituressubject to depreciation, theamount for environmental
protection is reported.
Costs: The total amount ofexpenditures forenvironmental protection
and depreciation offacilities is reported(including labor costs).

Environmental Benefits
Actual beneﬁts

Energy consumption
Water consumption

Environmental
impact reduction2

Monetary valueof beneﬁts3−470,915GJ Decrease of 209 million yen−950,000m3 Increase of 19 million yen

Total amount of waste discharged

25 Corporate Social Responsibility Report 2008

179t Decrease of 67.1 million yen

2

3

Environmental impact reduction is the difference in volumes of environmental
impacts between FY2006 and FY2007. Minus figures indicate that environmental
impacts increased.
Monetary value of benefits is the difference in the amounts of monetary value of
benefits between FY2006 and FY2007. Minus figures indicate that costs increased.

Environmental
ReportEnvironmental Impact
Reducing environmental impacts by continually analyzing the impact ofbusiness activities on the environment

EnergyPRTR substances: amount handled■■Electricity purchased

3,584,197ＧＪ■

Quartz and silica

6,194ｔ■Hydroelectric power generation

593,642ＧＪ■

Alumina

3,946ｔ■Bunker A

363,065ＧＪ■

Silicon

1,274ｔ■City gas

141,257ＧＪ■

Carbon

648ｔ

■

LPG

116,317ＧＪ■

Zirconia

578ｔ■

Kerosene

115,396ＧＪ■

Coal tar and tar pitch

433ｔ

■

Steam

18,484ＧＪ■

Silicon carbide

416ｔ

■

Total energy input 4,932,357ＧＪ

PRTR substances: amount handled

404ｔ

Water
■

Clean water, industrial water

6.94 million m3■

Groundwater

0.62 million m3

Principal source gases1■

Silicon tetrachloride■

Trichlorosilane

2,043ｔ
110ｔ

INPUT

Customers’ factories etc.

Offices

Factories

OUTPUT

Released into the atmosphere

Discharge of waste

Discharged into water■

Nitrogen oxide

321ｔ

■

Total amount of waste discharged

14,127ｔ■

BOD2 + COD3

46ｔ■

Sulfur oxide

15ｔ■

Amount for final disposal

637ｔ

■

SS

46ｔ

■

PRTR substances: amount released (air) 7ｔ■

PRTR substances: amount released (water) 20ｔ■

Amount discharged:■ PRTR substances:amount released (waste)

72ｔ

46.43million m3

Green house gas
■

1
2
3
4

CO2 emissions

218,096ｔ-CO2

Principal raw materials and source gases listed here are those of which 100 tons or more is consumed per year.
BOD: Biochemical oxygen demand
COD: Chemical oxygen demand
SS: Suspended solids

Corporate Social Responsibility Report 2008 26

Environmental Report

Principal raw materials1

Reducing Global Warming
Reducing CO2 emissions to tackle global warming
Reduction of CO2 Emissions
CO2 Emissions and Emissions Intensity
CO2 emissions

350

Emissions intensity

2.7

300

2.5

250
208

200

3.0

2.4
218

203

3.5

2.5
2.0

150

1.5

100

1.0

50

0.5

0

2005

2006

2007

0

CO2 emissions intensity (t-CO2/one million yen)■

CO2 emissions (1,000 tons)

The Covalent Group implemented CO 2 emissions
reduction measures with the aim of attaining at leasta 1 percentage point reduction in CO 2 emissions
intensity (ratio of CO2 emissions to production) in fiscal
2007 compared with fiscal 2006. These measures
included productivity improvement, energy savingsand the use of alternative energy. As a result, theGroup achieved a 2.4% reduction in the CO2 emissions
intensity compared with fiscal 2006. However, CO2
emissions totaled 218,000 tons, an increase of 15,000
tons compared with fiscal 2006, because of increased
production.

（FY）

CO2 Emissions Reduction Measures
In our efforts to reduce CO2 emissions, we engage in energy-saving activities, including improved air-conditioning
methods at facilities and abolition of power generation facilities that use heavy oil.
■

CO2 Emissions Reduction Measures and Reduced Amounts

Improvement example
Reduction of CO2
emissions byabolition of power
generation
facilities that use
heavy oil

Site

Improvement

CO2 emissions reduced

KariyaFacility

Ultra-high-voltage substation equipment was introduced
and power generation facilities that use heavy oil wereabolished. CO２ emissions were reduced by switching toelectricity with smaller CO２ emission coeﬃcient.

342 t - CO2

Reduction of CO2
emissions byimproved
air-conditioning
methods at facilities

HadanoFacility

Previously, the temperature of outdoor air was decreased
to 16℃ and then heated to 23℃ for dehumidifying. Powerconsumption was reduced by the introduction of a direct
digital controller for eﬃcient cooling.

72 t - CO2/ year

Reduction of vehicle
heater operating
hours in winter as aresult of constructionof a multistory
parking lot

Oguni
Facility

Oguni Facility is located in a region with heavy snowfall. Previously,
employees needed to remove snow on their cars by turning the heateron. Because of construction of a roofed multistory parking lot, the needto remove snow on cars was eliminated, resulting in less heater operating
hours. Also, the frequency of calls for snowplows was reduced.

8.2 t - CO2(From January to April, 2008)
Based on emission coeﬃcient of
Chubu Electric Power Co. 0.481
kg-CO2/kWh, Bunker A 2.71
kg-CO2/L

Based on emission coeﬃcient ofTokyo Electric Power Co. 0.389
kg-CO2/kWh(20 days/month, for 4 months)
Calculated based on CO 2 emissions of
63 g-CO2 (according to Team Minus 6%
website) for snow plowing for 15
minutes/time, heater operation for 5
minutes and 543 cars/day

At Akashiba Power Plant, a Private Hydroelectric Power Plant
Oguni Facility has a private hydroelectric power plant, Akashiba Power Plant,
adjacent to a reservoir on the Ara River between Yamagata prefecture and Niigata
prefecture. Akashiba Power Plant, constructed in 1954, expanded its capacity in1990 with the addition of a second plant. The maximum output of the two plants is
11,200 kW. Electricity generated by Akashiba Power Plant satisfies 40% of Oguni
Facility’s annual electricity consumption and greatly contributes to the reduction of
CO2 emissions associated with energy use.
Electricity generated in FY2007
・Electricity generated: 60,824 MWh・If purchased, this amount of electricity would correspond to 33,757 tons of CO 2, which

would be equal to 13% of the Covalent Group’s CO2 emissions.

27 Corporate Social Responsibility Report 2008

Akashiba Power Plant,
Covalent Materials’ private
hydroelectric power plant

Environmental
ReportWaste Management
Zero emissions toward a recycling-based society under the 3R concept
Zero Emissions

The amount of final disposal in fiscal 2007 was 637 tons and accounted for 4.5% of the total discharge, which is 1.2
percentage points lower than in fiscal 2006. We achieved the target for fiscal 2007 of a final disposal rate of 4.7% orless and a reduction of at least 1 percentage point compared with fiscal 2006.
Hadano Facility, Covalent Materials Niigata Corporation and Covalent Materials Sekikawa Corporation maintained
their zero emissions status. Other sites are vigorously promoting the 3Rs to achieve zero emissions.

Amount of Final Disposal and Final Disposal Rate

Amount of final disposal (t)3000

Amount of final disposal
Final disposal rate

2500
2000

1000

0

15

1,210
882

13.1
8.3

500
2003

25
20

1,923

1500

30

2004

813
6.8

2005

10

637
5.7

2006

4.5
2007

Final disposal rate (%)

■

5
0

（FY）

Recycling Center at Oguni Facility

Niigata Prefecture Certifies Covalent Materials Sekikawa as an Excellent
Recycling Site
On February 25, 2008, Covalent Materials Sekikawa Corporation was certified by
Niigata prefecture as an excellent recycling site.
With the aim of encouraging businesses in Niigata prefecture to promote waste
reduction and recycling, the prefecture has a program for certifying businesses withexcellent waste reduction records as excellent recycling sites.
Covalent Materials Sekikawa has been promoting the 3Rs, including reuse ofwastewater sludge and recycling of waste hydrofluoric acid, and has achieved zero
emissions. These achievements were recognized by the prefecture.
Encouraged by the certification, Covalent Materials Sekikawa will step up its efforts tomaintain zero emissions of waste.

Corporate Social Responsibility Report 2008 28

Environmental Report

Each site belonging to the Covalent Group has a recycling center which implements appropriate waste management.
Under the 3R concept (reduce, reuse, recycle), we promote zero emissions in a move toward a recycling-basedsociety. This involves minimizing defects and material loss by improving manufacturing yield and working withrecycling partners for sludge and scrap waste.

Management of Chemical Substances“One drop control”* policy for managing chemical substances
Chemical Substance Management Measures
The Covalent Group considers people’s health and safety and manages chemical substances in accordance with the
PRTR Law and the Poisonous and Deleterious Substances Control Law. We have strengthened a policy known as “onedrop control,” which we implement to manage the handling of chemical substances.
We promote green procurement to eliminate harmful substances from our products as part of our concerted effort tocreate environmentally conscious products and use safe alternatives.
In fiscal 2007, the amount of chemical substances handled increased due to increased production.

Amount of Chemical Substances Handled
Amount of chemical substances handled
Ratio to production

14
12
10

0.16

0.15

11.1

0.18

0.13

10.5

0.14

0.13

0.12

11.8

8

0.10
0.08

6

0.06

4

0.04

2
0

0.02
2005

2006

2007 （FY）

0■

Ratio to production (t/million yen)Amount of chemical substances handled(1,000 tons)■

Main Chemical Substances

Toxic
substances

Harmfulsubstances

Other

Arsenic

Hydrofluoric acid

Ammonium ﬂuoride

Caustic soda

MethanolAmmonia water (25%)

Phenol resin

Hydrogen peroxide

Hydrochloric acid

Sodium fluorosilicate

Sulfuric acid

Chromium trioxide

Nitric acid

Lead oxide

Acetic acid

Tar pitch

Glacial acetic acid

Coal tar

Subject: 3 facilities and 5 consolidated subsidiaries* One drop control

This is the Covalent Group’s policy for thorough substance management and it involves daily cleaning and inspection so that noteven one drop of oil, chemicals or other substance remains behind. Structures are designed and maintained so that leaks can beeasily detected. For example, pans and dikes are kept dry.

Pollutant Release and Transfer Register (PRTR) Substances
PRTR is a system for obtaining data on the amounts of harmful chemical substances released into the environmentor transferred offsite, and the sources of such substances. Data are aggregated and disclosed.
In fiscal 2007, the amount of PRTR substances released decreased 45.9% to 27.1 tons compared with fiscal 2005
as a result of the optimization of chemical consumption and recycling of waste chemicals, in addition to a decrease
owing to business changes. The Group achieved a target of at least a 2% reduction in PRTR substance emissions(49.1 tons or less) in fiscal 2007 compared with fiscal 2005.
■

PRTR Results for Fiscal 2007

Substance number
speciﬁed by the
PRTR Law（ Tons ）Amount Amount Release Release Release Landﬁll
Amount Transfer to Transfer
handled released to air to water to soil within sites transferred sewage as waste

Substance name63

Xylene

1.4

0.3

0.3

0.0

0.0

0.0

1.1

0.0

1.1

68

Chromium and chromium (III) compounds

9.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

227

Toluene

1.6

1.4

1.4

0.0

0.0

0.0

0.2

0.0

0.2

266

Phenol

4.7

4.7

4.7

0.0

0.0

0.0

0.0

0.0

0.0

283

Hydrogen ﬂuoride and its water-soluble salts

381.3

19.7

0.7

19.0

0.0

0.0

70.5

0.0

70.5

304

Boron and its compounds

2.4

0.3

0.0

0.3

0.0

0.0

0.0

0.0

0.0

309

Poly (oxyethylene) nonylphenyl ether

3.5

0.7

0.0

0.7

0.0

0.0

0.0

0.0

0.0

Total

403.9

27.1

-

-

-

-

71.8

-

-

Scope：3 facilities and 5 consolidated subsidiaries

29 Corporate Social Responsibility Report 2008

Environmental
ReportStorage of Polychlorinated Biphenyls (PCBs)

Preventing Air Pollution and Offensive Odors■

Storage of PCBs
Quantity
Quantity
stored currently in use

Types of products
containing PCB

Unit

Transformer

Unit

7

1

8

Capacitor

Unit

153

70

223

Stabilizer

Unit

1,087

0

1,087

Other equipment

Unit

0

3

3

Other

kg

11,8040

11,804

Total

Scope: 3 facilities and 5 consolidated subsidiaries

The Covalent Group prevents air pollution and offensive
odors with the installation of exhaust gas treatment
equipment. The use of heavy oil is reduced by using
alternative fuels and waste heat from heat-treating
furnaces.
Kariya Facility has installed exhaust gas treatment equipment
to remove volatile organic compounds (VOCs) such asformaldehyde, which is generated during the ceramics firing
process. As a result, 98%* of VOCs are removed.
* Total organic carbon (TOC) equivalent

Exhaust gas treatment equipment (Kariya Facility)

Preventing Water Pollution
The Covalent Group is improving wastewater treatment
facilities while strengthening the monitoring of water quality.
Kariya Facility previously treated hydrofluoric acid andnitric acid effluents discharged from the cleaning process
in-house. By finding ways of recycling the waste, Kariya
Facility achieved a 30% reduction in the total amount of
nitride contained in the wastewater discharged from its
wastewater treatment facility.
Hydrofluoric acid and nitric acid mixture recovery facility(Kariya Facility)

Preventing Soil and Groundwater Pollution
Regarding the soil and groundwater pollution by PCBs that was detected in 2005 at Kariya Facility, we finishedremoving the contaminated soil and purifying the groundwater in August 2006, and submitted notifications ofcompletion to Aichi prefecture and Kariya City the following October, which the local governments accepted. The
PCB-contaminated soil is currently stored at Kariya Facility under strict management. We have contracted treatmentof the contaminated soil to Geo Steam Co., Ltd., a company in Kita-kyushu with PCB-contaminated soil purification
facilities. Treatment of the stored soil started in December 2007 and is scheduled to be completed in March 2009.
For treatment, the contaminated soil is transported with strict safety measures to PCB-removal facilities, and purified
through PCB decomposition measures. The purified soil will be recycled as raw material for cement after its safety is
confirmed.

Corporate Social Responsibility Report 2008 30

Environmental Report

The Covalent Group implements strict management of
products containing PCBs, including those stored andcurrently in use, to ensure that no environmental pollution
occurs during the period until 2016 when treatment ofsuch products must be completed by disposal companies
according to law.

Development of Environmentally Conscious Products and Technologies
Creating new environmental value for society, based on our development
capabilities
Guidelines for Environmentally Conscious Products
Contributing to society through the development of excellent environmental technologies and environmentallyconscious products (ECPs) is a key theme of the Covalent Group’s product development.
Adhering to the ECP Guidelines, the Covalent Group incorporates environmental consciousness in productdevelopment throughout product life cycles from the procurement of parts and materials to disposal.

■

Items for Environmental Consideration
Life cycle

Items for environmental consideration

Procurement of parts andmaterials

Green procurement

Manufacturing process

・Ozone depleting substances (ODSs) are not used.
・Voluntarily prohibited substances (acetone etc.) are not used.
・Resource savings and energy savings are considered.

Product distribution

Measures are taken to reduce packaging(use of recycled items, recovery, etc.)

Use by customers(product specifications)

Reduction in the product usage process
Specifically, reduction of power consumption, consumables, etc.

Other environmental items

Products and manufacturing process are assessed.

Core Technology Center

Spearheading the drive to become a world-class leading edge manufacturer
The Core Technology Center develops new materials and innovative technologies
that support various industries, such as those connected to semiconductors andelectronics, as well as structural ceramics.
In the electronics-related market, which has been the Covalent Group’s principal
business field, we develop functional and structural materials and parts based on
our integrated technologies concept. We aim to expand our business further in thesemiconductor, flat panel display (FPD) and optical communication fields. We arealso entering new business fields with a focus on bio, energy and the environment,
and we are advancing the development of materials. We continue to refine ourevaluation and design technologies, which support the foundation of thesedevelopments.
At the Core Technology Center, we aim to make the Covalent Group a world-classleading-edge enterprise in the fields of highly functional materials and parts. As theengine of the Group, we intend to contribute to the enhancement of corporate value
and competitiveness through medium- and long-term research and development.

31 Corporate Social Responsibility Report 2008

Core Technology Center(Hadano Facility)

Environmental
ReportEnvironmentally Conscious Product Development Examples■ Use of Simulation Technology to Develop Environmentally Conscious Products

For example, a problem occurred in the design of parts and materials used in furnaces for ceramics. Although the thermal
efficiency of a given material increases when weight is reduced, rigidity decreases. By using simulation technology inthe design of holding plates to optimize the rib structure (a reinforcement structure that resembles bone structure) and
improve rigidity, we were able to achieve both weight reduction and rigidity. By using the simulation method, we wereable to reduce material use to one-sixth of that of the previous method, and this contributed to a dramatic improvementin thermal efficiency and energy conservation in the firing process. Furthermore, we were able to conserve resources byreducing materials use through weight reduction and by sharply curtailing trial production processes by using simulation.
Developer Comment

Rib structure1

Quantitative evaluation techniques used in simulations play an importantrole in product development and design. These achieve both component
functionality and resource savings. In optimal design, although we
repeatedly experiment with shapes and materials and conductsimulations, we struggle to discover new ideas for shape and material
combinations.
Ping Xin, Simulation Technology Group, Core Technology Center

A holding plate simulation image
1

Rib structure: A reinforcement structure that resembles bone structure■ Development of Gallium Nitride Semiconductor Substrate for Power Devices

High Performance Semiconductors for Energy and Resource Conservation

Power devices2 that convert and control electricity require energy-efficient semiconductor substrates that are resistant tocorrosion and temperature and other environmental changes. As such a substrate, gallium nitride (GaN) semiconductors
are expected to be used in next-generation power devices.
However, manufacturing single-crystal GaN substrates is not easy, as most GaN single crystals used for light-emitting
devices are currently grown on sapphire and silicon carbide wafers, which are small and expensive.
At the Core Technology Center, researchers have developed the growth of GaN single crystals on silicon wafers that arelarger and less expensive than sapphire and silicon carbide wafers. However, growing GaN single crystals directly on
silicon wafers results in cracking, owing to the large difference in material properties or growth of low-quality crystals thathinder semiconductor performance. This problem was solved by growing GaN single crystals on an intermediate layer,
which acts as a buffer between the GaN single-crystal layer and the silicon wafer and has resulted in devices that can beused as prototypes.
Power devices that use this substrate are expected to produce such efficiencies as smaller electric power supply devices(AC adapters, etc.) and energy conservation through the use of inverters. Furthermore, the use of these power devices inmobile phone base stations is expected to produce faster speeds and larger capacities for information transmission.
GaN single-crystal
layerIntermediate layer(buﬀer)Siliconwafer

Image of GaN substrate
2

GaN substrate

Developer Comment
The focus of our development was growing high-quality GaN single crystals on asubstrate of a different material. We changed the conditions of the film formation
process and aimed to achieve both crystallinity and film thickness. We strive fororiginality and innovation every day in hopes that the semiconductor substrates wedevelop will be used in home appliances and industrial electronic equipment andcontribute to the reduction of energy and space.
Akira Yoshida, Core Technology Development Group, Core Technology Center

Power devices: Devices for efficiently controlling high-power electricity, such as AC/DC conversion and voltage conversion, that are used for various
applications such as transportation equipment, office equipment, and home appliance power control and motor control.
Corporate Social Responsibility Report 2008 32

Environmental Report

Simulation Technology Conserves Energy and Other Resources
The Covalent Group makes an effort to develop environmentally conscious products characterized by environmental
conservation throughout the entire product lifecycle. A noteworthy example of this is the use of computer simulation forenvironmentally conscious product design, product manufacturing process design, and product and manufacturing
technology development processes.

Environmental Communications
Active dialogue on the environment with stakeholders
The Covalent Group disseminates environmental information in the Social and Environmental Report, on the corporatewebsite and at seminars, and also holds community discussions to engage in direct dialogue with people in thecommunities where we have a presence.
■ Kanto Energy Conservation Conference

The Kanto Energy Conservation Conference, sponsored by
the Ministry of Economy, Trade and Industry, was held from
September 26–28, 2007.
Covalent Materials Sekikawa Corp. made a presentation
about energy conservation activities involving the effective
utilization of electric furnace waste heat and energy loss
reduction, by which it achieved a 6.7% reduction in CO 2
emissions (per unit of output).

The Kanto Energy Conservation Conference(Covalent Materials Sekikawa Corp.)■ Participation in a Responsible Care Community

Meeting
Covalent Materials Tokuyama Corp. participated in the 4th
Shunan Area Responsible Care Community Meeting, held on
November 13, 2007.

The 4th Shunan Area Responsible Care Community Meeting(Covalent Materials Tokuyama Corp.)■ Community Dialogue

On September 18, 2007, Covalent Materials Tokuyama Corp.
held a community dialogue meeting with the Dogenkaisaku
Residents’ Association. Six people from the residents’association and five from Covalent Materials Tokuyama
Corp. participated in the meeting. Here they exchanged
opinions concerning environmental safety activities, security
and accident prevention activities and requests made bymembers of the community to the company.

Community dialogue meeting(Covalent Materials Tokuyama Corp.)

33 Corporate Social Responsibility Report 2008

Environmental
ReportHistory of the Covalent Group’s Commitment to the Environment
Since its foundation, the Covalent Group has accorded priority to harmony with society and the environment in the
conduct of its business. We intend to continually strengthen the foundation of environmental management with theaim of establishing sustainable management*.

* Sustainable management means contributing to the establishment of a sustainable society through the fulfillment of corporate responsibility interms of the economy, society and the environment and by respecting people.

1900

1950

History of the Covalent Group
1918

Toyo Taika Renga Co., Ltd. (the current
Kariya Facility) is established.

1928

Denki Kinyu Co., Ltd. (the current Oguni
Facility) is established.
1951

1956

Kawatana Plant (the current Covalent
Materials Nagasaki Corporation) is
established.

Oguni Facility receives the Director-GeneralAward for Excellent Factories for Energy
Control (Heat Category).

1974

1958

Nihon Denko Co., Ltd. is renamed
Toshiba Denko Co., Ltd.

Oguni Facility receives the Director-GeneralAward for Excellent Factories for Energy
Control (Heat Category).

1959

1978

Tokai Rozai Co., Ltd., is renamed
Toshiba Internal Insulation Co., Ltd.

1961

Hadano Plant (the current Hadano
Facility) is established.

Oguni Facility receives the Award of the
Minister of International Trade and Industry for
Excellent Factories for Energy Control (Heat
Category).

1984

1968

Toshiba Ceramics Co., Ltd. (the current
Covalent Materials Corporation) is
established as a result of the merger
between Denko Co., Ltd. and Toshiba
Rozai Co., Ltd.

Kariya Facility receives the President’ s Prizeof the Japan Energy Conservation Center for
Excellent Energy Saving Cases.

1991

Use of chlorine-based organic solvents isabolished throughout the group.

1997

Oguni Facility starts manufacturing lead-freecarbon brushes. (Full-scale manufacturing
starts in July 2001.)

1998

Oguni Facility receives the Award of the
Director-General of the Tohoku Bureau of
Economy, Trade and Industry for Excellent
Factory Greening.

1999

Kariya Facility receives an award in the Aichi
Prefecture Factory Greening Contest.

1999

1971

A research center (the current CoreTechnology Center) is established.

1982

Tokuyama Ceramics Co., Ltd. (thecurrent Covalent Materials Tokuyama
Corporation) is established.

1984

Tokai Ceramics Co., Ltd. is established.

1985

Sekikawa Denshi Co., Ltd. (the current
Covalent Materials Sekikawa Corporation)is established.

1991

Niigata Toshiba Ceramics Co., Ltd. (thecurrent Covalent Materials Niigata
Corporation) is established for volume
production of large-diameter siliconwafers.

2000

2006

2007

2007

2008

Major environmental protection
activities and evaluation

1999

Major improvements of environmental
protection-related facilities

1954

Oguni Facility’ s Akashiba Power Plant(hydroelectric) in Oguni, Yamagata prefecture,
is completed.

1985

Oguni Facility starts introducing
waste-heat-based snow removing
equipment, the use of which does not involve
water spraying.

1990

Oguni Facility’ s second Akashiba Power
Plant (hydroelectric) is completed.

Nagasaki Toshiba Ceramics Co., Ltd. (thecurrent Covalent Materials Nagasaki
Corporation) gains Eco-Mark certification for
its foamed ceramics.

1998

BOD treatment equipment is installed at
Oguni Facility,

1998

Waste Recycling Center is completed at
Oguni Facility.

Use of acetone is abolished throughout thegroup.

1998

An emergency automatic shut-off gate is
introduced at the final discharge outlet ofOguni Facility.

1999

Noise-proof walls are installed at siteboundaries of Hadano Facility.

2000

Removal of incinerators from all production sites iscompleted.

2001
2001

Oguni Facility’ s cogeneration system is completed.

2000

Green Procurement Guidelines are established andevaluation of suppliers for green procurement
starts.

2003

ISO 14001 certification is completed for all sites inJapan.

2004

Niigata Toshiba Ceramics Co., Ltd. (the current
Covalent Materials Niigata Corporation) achieves
zero emissions of waste.

2005

2004

Oguni Facility receives the Minister of Economy,
Trade and Industry Award for Excellent Factories
for Energy Control (Heat Category).

Measuring equipment for total phosphorus andtotal nitrogen is installed at Kariya Facility.

2004

2005

Sekikawa Toshiba Ceramics Co., Ltd. (the current
Covalent Materials Sekikawa Corporation) achieves
zero emissions of waste.

Introduction of central monitoring systems at final
discharge outlets is completed at Oguni Facility,
Hadano Facility and Kariya Facility.

2004

Nagasaki Toshiba Ceramics Co., Ltd. (the current
Covalent Materials Nagasaki Corporation) changes
furnace fuel from heavy oil to kerosene in order toreduce SOx.

Heat storage combustion type exhaust gas
treatment equipment is installed at Kariya Facility
as a countermeasure for offensive odor and volatileorganic compounds.

2006
SIC Investment, a special purpose
corporation for the tender offer of Toshiba
Ceramics' shares, is established.

Kariya Facility holds an explanatory meeting for
local residents on soil and groundwater pollution.

2006

Implementation of soil and groundwater
countermeasures within the site is completed at
Kariya Facility.

2005

Kariya Facility introduces catalyst combustion typedeodorizing equipment for furnaces at advanced
ceramics factories No. 1, No. 2, and No. 3.

Toshiba Ceramics Co., Ltd. becomes a
subsidiary of the special purpose
corporation following completion of thetender offer.

2006

Hadano Facility achieves zero emissions of waste.

2005

2007

Kariya Facility receives a letter of appreciation fromthe Kariya 530 Campaign Liaison Committee for its
support of the 530 Campaign.

Nagasaki Toshiba Ceramics Co., Ltd. (the current
Covalent Materials Nagasaki Corporation) changes
furnace fuel from kerosene to LPG in order toreduce CO2 emissions.

2007

Purification of contaminated soil at Kariya Facility
starts.

2006

Hadano Facility changes boiler fuel from heavy oil
to LPG in order to reduce CO2 emissions.

2007

Covalent Materials Sekikawa Cooperation makes apresentation at the Kanto Regional conference onenergy-saving best practices held by the Energy
Conservation Center, Japan.

2007

Kariya Facility introduces catalyst combustion typedeodorizing equipment for the furnace at theadvanced ceramics factory No. 7.

2007

2007

Covalent Materials Sekikawa Cooperation iscertified by Niigata prefecture as an excellent
recycling site.

Kariya Facility introduces ultra-high-voltage substationequipment (eliminating the use of heavy oil).

2007

Covalent Materials Niigata Corporation installs
additional wastewater treatment facilities (3systems).

Toshiba Ceramics Co., Ltd. becomes awholly owned subsidiary of the special
purpose corporation following completionof share exchange.
Toshiba Ceramics merges with thespecial purpose corporation and the new
Company, Covalent Materials
Corporation, is inaugurated.

Corporate Social Responsibility Report 2008 34

Environmental Report

80 Years of History since the Foundation of the Covalent GroupCovalent Materials Corporation■ Administration Department

Nissei Building, 1-6-3 Ohsaki, Shinagawa-ku, Tokyo 141-0032, Japan
Tel: +81-3-5437-8411 Fax: +81-3-5437-7172
URL: http://www.covalent.co.jp/■ Environment, Safety and Health Department

Published October 2008

The production and printing of this report reflect thefollowing environmental considerations:
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30, Soya, Hadano, Kanagawa 257-8566, Japan
Tel: +81-463-84-6648 Fax: +81-463-83-4860
Waterless printing, a printing process that does
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For any comments or inquiries concerning this report or our CSR
activities, please contact us.

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and biodegradable characteristics.