TAIHEIYOCEMENTREPORT

2022
Integrated Report

CONTENTS
Mission of the Taiheiyo Cement Group,
Business Principles

ESG Initiatives That Support Creation of
Corporate Value

About Taiheiyo Cement

Environment

History of the Taiheiyo Cement Group ������������������������������������������������� 2
Taiheiyo Cement Group Business Network ������������������������������������������ 4
Cement Industry and Taiheiyo Cement ����������������������������������������������� 6

Message from Top Management

Message from the President ���������������������������������������������������������������� 8

Creating Value

Reporting Period

FY2022(April 1, 2021 to March 31, 2022)
It is clearly stated where information about events that
occurred outside this period are included in the report.

Boundary of Reporting Organizations

The report covers Taiheiyo Cement Corporation (nonconsolidated) and includes our group companies. “Thecompany” refers to Taiheiyo Cement Corporation (nonconsolidated); when information pertains to one of ourgroup companies, the group company’s name is explicitly
stated.

Environmentally-Conscious Management
Environmental Management ������������������������������������������������ 60
Mitigating Climate Change ��������������������������������������������������� 62
Improving Energy and Resource Efficiency ��������������������������� 66
Reducing Environmental Impact ������������������������������������������ 68
Disclosure Regarding Recommendations of the TCFD ��������������� 70
Conserving and Restoring Biodiversity ��������������������������������������� 72
Providing Environmentally Sound Products and Services ���������� 74
Appropriate Use of Water Resources ������������������������������������������ 76

SocialValue Creation Process ��������������������������������������������������������������������� 16
Strengths of Taiheiyo Cement ����������������������������������������������������������� 18
Value Creation in the Value Chain ���������������������������������������������������� 20
Risks and Opportunities ������������������������������������������������������������������� 22
Materiality ���������������������������������������������������������������������������������������� 23
Medium-Term Management Plan
Looking Back at the 17 and 20 Medium-Term Management Plans ��� 24
23 Medium-Term Management Plan ����������������������������������������� 25
23 Mid-Term Business Plan Key Strategies ��������������������������������� 26
Business Strategies
Key Business Strategy Themes ���������������������������������������������������� 40
Cement Business (Japan) ����������������������������������������������������������� 42
Cement Business (Overseas) ������������������������������������������������������� 44
Mineral Resources Business ������������������������������������������������������� 46
Environmental Business ������������������������������������������������������������� 48
Construction Materials Business ������������������������������������������������� 50
Research and Development �������������������������������������������������������� 52
Message from the Officer in Charge of Finance �������������������������� 54

Scope and Boundaries of this Report

Sustainability Management�������������������������������������������������������������� 56

Occupational Health and Safety �������������������������������������������������� 78
Human Capital
Human Resource Development �������������������������������������������� 82
Respect for Human Rights ����������������������������������������������������� 85
Diversity �������������������������������������������������������������������������������� 86
Value Chain Management
Quality and Safe Products ����������������������������������������������������� 88
Responsible Sourcing and Supply ���������������������������������������� 90
Stakeholder Engagement ������������������������������������������������������92
Communities ��������������������������������������������������������������������������94

Management Supporting Value Creation

Our Directors and Corporate Auditors ������������������������������������������96
Roundtable Discussion by the Independent Directors ������������ 100
Corporate Governance �������������������������������������������������������������� 104
Risk Management and Compliance ����������������������������������������� 110

Data

ESG Data ���������������������������������������������������������������������������������������� 116
External Evaluation, Collaboration with Outside Organizations ���� 119
Cement Production Process (Material Balance) ����������������������������� 120
Financial and Non-financial Highlight ������������������������������������������� 122
Primary Consolidated Financial Data (12-Year) ������������������������������ 124
Financial Statements ��������������������������������������������������������������������� 126
GCCA Key Performance Indicators ������������������������������������������������� 128
Independent Assurance Report on GCCA Key Performance Indicators ��� 129
Glossary ����������������������������������������������������������������������������������������� 130
Corporate Information ������������������������������������������������������������������� 132
Stock Overview ������������������������������������������������������������������������������ 133

 oundary of Reporting Organizations by
B
Quantitative Data

Quantitative data are aggregated on a consolidated
basis and under the following two categories. An icon
representing the relevant aggregation scope is displayedwith data for categories 1 and 2.
Category 1 Non-consolidated Taiheiyo Cement
Corporation (non-consolidated)
Category 2 GCCA Data collected for reporting of
GCCA* KPIs. Organizations covered are listed on pages
4-5* GCCA: Global Cement and Concrete Association

Disclaimer Regarding Forward-looking Statements
Plans and prospects included in this report are predictions
based on information available at the time of publication
and are subject to unpredictable risks and uncertainties.
Consequently, there are no explicit or implied guarantees
as to actual results, which may materially vary from the
projected figures or measures cited in this report.

Mission of the Taiheiyo Cement GroupOur mission is to contribute to social infrastructuredevelopment by providing solutions that areenvironmentally efficient, enhance our competitive position
and bring value to our stakeholders.

Business Principles Governing the Way the Company Conducts BusinessWe are committed to maximizing our corporate value by generating synergies among Taiheiyo
Cement Group companies.
We aim to manage the environmental impact of our operations while supporting thedevelopment of a recycling-based society.
We will act in an ethical manner and abide by the laws and regulations of those countries inwhich we operate.
We will openly communicate with our stakeholders and proactively report on our businessactivities in a transparent manner.
We are committed to the ongoing development and application of innovative technologies inorder to provide products and services that benefit our customers and society.
We are committed to maintaining an international outlook and conducting our business inaccordance with global standards.
We will strive to anticipate the changing business environment to assess new opportunities for
growth.
We are committed to achieving our full potential through training and self-development.
We are devoted to providing a safe and healthy working environment where our employees arevalued and the human rights of all individuals involved in our business are respected.

Under the Mission of the Taiheiyo Cement Group, which was established in June 2002, the company pledges to focus its management on
the triple bottom line of the economy, the environment and society, to realize sustainable development, a shared principle of the GCCA ofwhich we are a member.
In December 2002 we formulated the Business Principles of Taiheiyo Cement, which comprise nine principles for realizing the Mission of
the Taiheiyo Cement Group, and are striving to implement them.

Editorial Policy

In the report, we convey to our stakeholders how we
conduct activities to address social issues and sustainably
increase corporate value. We aim to deepen mutual
understanding through constructive dialog and further
evolve management while raising the level of disclosure.

Guidelines Used for Reference- The International Integrated Reporting Framework (IIRC)- Guidance for Integrated Corporate Disclosure andCompany-Investor Dialogues for Collaborative Value
Creation (Ministry of Economy, Trade and Industry)- GRI Sustainability Reporting Standards (GRI Standards)
2016/2018- Environmental Reporting Guidelines 2018 Edition(Ministry of the Environment)- Environmental Accounting Guidelines 2005 Edition(Ministry of the Environment)- ISO30414

Publication Dates

December 2022 (Previous report: November 2021, nextreport: September 2023)

Reporting in Accordance with the GRI Standards
The index for the GRI Content core option is available on
our website.

Clarifying Efforts to Achieve SDGs

We have analyzed our business risks and opportunities,
clarified their relevance to the Sustainable Development
Goals (SDGs) and displayed icons representing therelevant SDGs on each page of our activities. We will seek
to contribute to the achievement of the SDGs through thegroup’s business activities.

About Taiheiyo Cement

History of the Taiheiyo Cement Group
Taiheiyo Cement Corporation was founded in October 1998 through the merger of Chichibu Onoda Cement Corporation
and Nihon Cement Co., Ltd., both of which had operated for over 100 years. The Taiheiyo Cement Group continues tosupport infrastructure development by supplying high quality cement and construction materials and applying advanced
technologies at nine cement plants in Japan and nine in the Pacific Rim region, including in the U.S., China and Southeast
Asia. We will continue to strive to create a sustainable society by demonstrating the group’s overall capabilities.

Nascent Period of Cement Production in Japan

Launch of Taiheiyo Cement

In 1873 the government constructed a cement production works in Fukagawa, Tokyo.
Two years later the works successfully produced and launched sales of domestic cementcomparable in quality to foreign products. Following this, Onoda Cement Co., Ltd., Asano
Cement Co., Ltd. (predecessor of Nihon Cement Co., Ltd.) and Chichibu Cement Co., Ltd.
were founded and underpinned the modernization of Japan.

Taiheiyo Cement Corporation was
founded in 1998 via the merger ofChichibu Onoda Cement Corporation
and Nihon Cement Co., Ltd. The company
has supplied cement for various national
construction projects in Japan. In
2000 we completed the constructionof the Nghi Son Cement Corporation
plant in Vietnam, and then in 2003
made Taiheiyo Cement Philippines,
Inc. a wholly owned subsidiary, further
expanding the group’s global network.

Cement production works in Fukagawa, Tokyo

Onoda
CementCo., Ltd.
1881

Chichibu
Onoda Cement
Corporation

Japan’s first rotary kiln (DB kiln)

History of
Our Products
andEquipment

2000 May

Acquired an exclusive licensefrom three French companies forthe inorganic composite material
Ductal.

2001 July

Started operating a municipal
waste incineration ash washingsystem (Ash Washing System) at
the Kumagaya plant.

2002 January

Expanded the scale of the coal
ash treatment business following
completion of the Kanto Ash
Center.

2002 November Started operating an AK system
to recycle municipal waste as araw material for cement at the
Saitama Plant.

2002 December Started operating a facility
to recycle wood as a biomass
resource at the Oita Plant.
2006 July

1994

Chichibu
CementCo., Ltd.

Taiheiyo Cement
The Kyoto Protocol comes into force

1923
1999

Since 1998
Nihon
CementCo., Ltd.
1947

Asano
CementCo., Ltd.
1883

History ofBusiness
Activities
andCorporate
Events2000
1998 October

2001

2002

2003

Taiheiyo Cement founded.

1999 May

Obtained ISO 14001 certification
at six directly operated cement
plants in Japan.

2000 October

Acquired the management rights
to Grand Cement Manufacturing
Corporation in the Philippines(currently Taiheiyo Cement
Philippines, Inc.)

2000 November Completed construction ofNghi Son Cement Corporation(Vietnam).
2001 July

2

Developed Silica Fume Premix
Cement for ultrahigh-strength
cement.

Completed construction of
Itoigawa Power Station andlaunched an electric power
supply business.

2004

2005

2006

2007

2008

2002 June

Formulated the Mission of the
Taiheiyo Cement Group.

2003 April

Grand Cement Manufacturing
Corporation made a wholly
owned subsidiary.
Company name changed to
Taiheiyo Cement Philippines, Inc.
in June 2003.

2003 April

Launched a business to recycle
construction soil as a raw
material for cement.

2005 April

Launched an electric power
supply wholesale business at the
Tosa Power Station.

2006 January

Formulated the Environmentallyconscious Management Policy of
the Taiheiyo Cement Group.

2008 OctoberMarked the 10th anniversary of
the company.

2009 April

Registered company-wide ISO
14001 integrated certification at
six directly operated plants.

Commitment toEnvironmental Issues

A Period of Economic Downturn,
Earthquakes and Adversity

Making Progress by Fully
Deploying Our Capabilities

In 2006 we formulated the Taiheiyo
Cement Environmentally-conscious
Management Policy, which identified an
active commitment to environmental
issues as a key management challenge.
Then, in 2007, we launched the Taiheiyo
Brand Cement and Concrete Project andbegan taking action to boost the value ofthe group’s technological strengths andsolutions.

The group marked its 10th
anniversary amid a serious economic
downturn in the wake of the 2008 global
financial crisis. We then carried out
business restructuring for the group in
2010. While the Ofunato Plant and eightof our service stations in the Tohoku
region were out of action due to theGreat East Japan Earthquake of 2011,
our financial structure was bolstered byan increase in capital and we were able
to navigate a way through this adversity.

We formulated our 23 Medium-Term
Management Plan as the third step
towards realizing our future vision anddirection targeting the mid-2020s. All
businesses in our group will function
together comprehensively and integrally
as we aim to become an outstanding
leading company.

2007 August

2014 AugustHarumi Onoda Remicon Co., Ltd.
completed construction of anenvironmentally sound (indoor) plant.

2020 January

Started commercial operations of a biomass
power station at the Ofunato Plant.

2018 May

Water purification material Ceraclean
obtained ETV mark certification from the
Ministry of the Environment.

2021 February

Successfully developed Nanolitia, a cathodematerial for lithium-ion batteries.

2022 August

2019 May

Developed AI technology for predicting
concrete slump.

Started construction of a production line at
Taiheiyo Cement Philippines, Inc. (TCPI)

Commenced selling DENITE, a heavy metal
immobilizer.

2007 December Ductal was used in the pier slabs of Haneda
Airport Runway D.
2010 November Launched a phosphor material, ChiccaLight,
for LEDs.
2011 March

Suspended operations at the Ofunato Plant
due to damage from the Great East Japan
Earthquake.

2012 June

Resumed full operations at the Ofunato
Plant.

2019 December Started operating a municipal waste
incineration bottom ash washing system at
the Kumagaya Plant.

The Global Financial
Crisis of 200820092010 March2010 April

2013 July

The Great East
Japan Earthquake
2010

2011

2012

Adoption of the Paris Agreement
2013

Announced business restructuring for thegroup.
Second production line of Nghi Son
Cement Corporation came into operation.

Their Majesties the Emperor Akihito
and Empress Michiko of Japan visited
the Ofunato Plant.

2014

2015

2016

2017

COVID-19 spreads
2018

2019

2020

2021

2022

2015 May

Formulated the CSR Objectives for 2025.

2018 October

2015 June

Acquired the Oro Grande plant (California,
U.S.)

Marked the 20th anniversary of thecompany.

2019 June

Supported the Recommendations of the
Task Force on Climate-related Financial
Disclosures (TCFD).

2021 January

Concluded the agreement on capitalalliance with the Semen Indonesia (SI)Group.

2022 March

Established technology development
roadmap and 2030 Interim Targets for the
Carbon Neutral Strategy 2050.

2022 May

Signed the UN Global Compact

2022 June

Acquired the Redding Plant and readymixed concrete business assets (California,
U.S.A.)

2018 May

Jointly established the Global Cement
and Concrete Association (GCCA) with theworld’s leading cement companies.

3About Taiheiyo Cement

Taiheiyo Cement Group Business Network
The Taiheiyo Cement Group deploys production and logistics sites in Japan and overseas, and establishes systems toensure stable supplies of cement and mineral products.
In addition, we utilize our world-leading environmental cement production technologies to contribute to the creation ofa recycling-based society and countermeasures to mitigate climate change.

Taiheiyo Cement Group Profile
Net sales	Consolidated: 708.2 billion yen
Non-consolidated: 287.5 billion yen
Number of employees	Consolidated: 12,542
Non-consolidated: 1,874 (not including seconded staff)
Subsidiaries	176 (including 112 consolidated subsidiaries
and 5 equity-method subsidiaries)
Affiliates
101 (including 38 equity-method affiliates)

TAIHEIYO CEMENT (CHINA) INVESTMENT
DalianTAIHEIYO CEMENT HEADQUARTERS
Nanjing

Holding company
Cement plant*
Clinker grinding plant*
Representative officeDistribution terminal

Hong Kong

TaipeiTaichung
Kaohsiung

Hanoi
Nghi Son* B usiness locations where data
for GCCA KPIs are collected (FY2022)

Bangkok
Ho Chi Minh

Nha Trang

Cebu

Singapore

Other

TAIHEIYO SINGAPORE

Other areas
12.4%

12.9%

23.6%

4

Jakarta

Net sales (FY2022 consolidated)

87.569billion yen

Number of employees (consolidated, as of March 31, 2022)

1,615

1,375
Female 240
MaleClinker production capacity

6,920

thousand tonnes

Dalian Onoda Cement Co., Ltd. Taiheiyo Cement
Corporation Fujiwara Plant (Dalian, China)

Jiangnan-Onoda Cement Co., Ltd. (Nanjing, China)

Nghi Son Cement Corporation(Nghi Son, Vietnam)

Taiheiyo Cement Philippines, Inc(Cebu, Philippines)

PNG-Taiheiyo Cement Limited(Lae, Papua New Guinea)

LaeCalPortland Company, Redding Plant(Redding, USA)

CalPortland Company, Mojave Plant(Mojave, USA)

CalPortland Company, Oro Grande Plant(Oro Grande, USA)

America
AmericaSeattlePortland

Stockton

Redding (acquired in June 2022)
MojaveLos Angeles

TAIHEIYO CEMENT U.S.A.

CalPortland Company, Rillito Plant(Rillito, USA)Net sales (FY2022 consolidated)

161.5

22.8%

billion yen

Las Vegas
Oro Grande
RillitoNumber of employees(consolidated, as of March 31, 2022)

2,695

21.5%

San Diego

Clinker production capacity

4,710

16.1%

Headquarters/Branches

Research Center

Hokkaido BranchCentral Research Laboratory
Tohoku Branch
Headquarters/Tokyo Branch
Kanto Branch
Chubu Hokuriku Branch
Kansai Shikoku Branch
Chugoku Branch
Kyushu BranchGroup Production Plants*
DC Co., Ltd.
Cement Plants*
Myojo Cement Co., Ltd.
Kamiiso Plant
Tsuruga Cement Co., Ltd.
Ofunato Plant
Kumagaya plant
Saitama Plant
Fujiwara Plant
Oita Plant

2,419人Female 276人

Malethousand tonnes

Japan
Japan
64.8%

65.6%

60.3%

Net sales (FY2022 consolidated)

459.1

billion yen

Number of employees (consolidated, as of March 31, 2022)

8,232

7,119人Female 1,113人
Male

Clinker production capacity

17,667thousandtonnesTaiheiyo Cement Corporation Kamiiso Plant

Taiheiyo Cement Corporation Ofunato Plant

Taiheiyo Cement Corporation Kumagaya Plant

Taiheiyo Cement Corporation Saitama Plant

Taiheiyo Cement Corporation Fujiwara Plant

Taiheiyo Cement Corporation Oita Plant

DC Co., Ltd.

Myojo Cement Co., Ltd.

Tsuruga Cement Co., Ltd.

5

About Taiheiyo Cement

Cement Industry and Taiheiyo Cement
Global Cement Industry
Trend in Global Cement Demand

Global cement demand in 2020 was impacted by the COVID-19
pandemic in the January-March quarter, but declined by only 0.2%
year-on-year to 4.14 billion tonnes due to growth in housing demand
and the economic stimulus measures implemented by governments
around the world. Of this, China's demand stands out at 2.37 billion
tonnes, accounting for about 57% of total global demand. This isfollowed by India at 280 million tonnes and the United States at 104
million tonnes.
Demand is expected to recover to 4.33 billion tonnes in 2021 as
economic activity resumes
and is expected to rise to
4.44 billion tonnes in 2022.
Japan
Other
However, the COVID-19
pandemic that has no end
Globalin sight, as well as theConsumption
soaring coal and other
4,140 China
energy prices caused by
Mtonnes
the war in Ukraine, leave
United States
uncertainty in the globalIndia
demand trend.

Top 15 Countries by Cement Consumption (2020)
Rank
1
2

3

(Unit: M tonnes)

Country

China

Volume2,377.3

India

288.7

United States

104.2

4

Iran

6

Vietnam8

Turkey10

Saudi Arabia

51.1

12

Egypt

46.0

5

63.3

Indonesia

7

62.7
62.1

Brazil

9

60.5
58.4

Russia

11

56.0

Korea

13

47.0

Pakistan1443.2

Mexico

15

Japan

40.3
39.2

Other

740.0

Global Consumption

4,140.0

Source: Global Cement Report, 14th Edition

World Cement Production Volume

Global cement production in 2021 was 4.4 billion tonnes, anincrease of 4% from the previous year, which is in line with therecovery of the global economy. By country, China leads with 2.5
billion tonnes, followed by India with 330 million tonnes, Vietnam
with 100 million tonnes, the United States with 92 million tonnes,
and Turkey in fifth place with 76 million tonnes.

Top 5 Countries by Cement Production (2020)
Rank
1

China

3

Vietnam2

4
5

Cement Production Volume of the Taiheiyo Cement GroupThe Taiheiyo Cement Group’s domestic cement production volume
for FY2021 was 19.3 million tonnes, down 2.5% year-on-year due
to the impact of the COVID-19 pandemic. In FY2022, despite theimpact of the prolonged pandemic, it will remain almost flat at 19.1
million tonnes (down 1% year-on-year). The Taiheiyo Cement Group's
domestic production volume is the largest in Japan, accounting for
approximately 36% of Japan's production volume.
On the other hand, the group's overseas production volume in
FY2021 was 13 million tonnes (down 6.8% year-on-year) due to thetransfer of a Chinese consolidated subsidiary, and in FY2022 it willremain almost the same as the previous fiscal year at 12.9 million
tonnes (down 0.5% year-on-year). Going forward, we aim to further
expand our overseas business by proceeding with the rebuilding of
our overseas business portfolio and seeking to expand into countries
and regions we have not yet entered where economic development isstrong and demand for cement is expected to grow on the one hand,
while increasing our production and supply capabilities in countries
where we already have a presence.

6

11(Unit: M tonnes)

Country

Volume
2,500

India

330
100

United States

92

Turkey

76

Japan

52

Global Production Volume

4,400

Source: US Geological Survey, Mineral Commodity Summaries, January 2022T aiheiyo Cement Group Cement Production
GCCA
Volume (past three years)
VolumeTotal

FY202033.8

FY2021

32.3(Unit: M tonnes)

FY202232.0

Domestic

19.8

19.3

19.1

Overseas

14.0

13.0

12.9

Japanese Cement Industry
Trend in Domestic Cement Demand

Following its peak at 86 million tonnes in FY1991, domestic cement demand continued a declining trend until FY2011, which
was caused by various adverse factors such as the global financial crisis. Demand subsequently turned upward for three consecutive
years from FY2012 due to the reconstruction demand and national resilience policy following the Great East Japan Earthquake.
FY2020 demand remained at more than 40 million tonnes, but has since fallen for two consecutive years to about 38 million tonnes
due to the outbreak of the COVID-19 pandemic in FY2021 and the effects of the delta strain of the virus in FY2022.

Changes in Waste Usage in the Cement Industry

The cement industry employs various
environmental technologies cultivated throughcement production to reuse a wide variety of waste
and by-products as raw materials and fuel for cement.
In Japan, approximately 540 million tonnes ofwaste is generated annually, of which 238 million
tonnes is reused; of this, the cement industry reuses
approximately 26 million tonnes, equivalent to 11%of the total. Cement production has continued to
decline since its peak in the latter half of FY1991, but
the amount of waste and by-products used per tonneof cement production has increased, reaching 468 kg
in FY2021.

Trends in Cement Production and Waste and By-product Usage
(Mt)
100

Amount of waste and by-products used
(1,000 tonnes)
Cement production (1,000 tonnes)

Amount of waste and by-products
used per tonne of cement (kg/t)(kg/t)
500

80

400

60

300

40

200

20

100

0

1990

2000

2010

2014 2015 2016 2017 2018 2019 2020 2021 (FY)0

Source: Cement Handbook 2022 (The Japan Cement Association)

Overseas Expansion of the Taiheiyo Cement Group

Since the latter half of the 1980s, we have expanded into the United States and China where we manufacture and sell cement
locally, and since the 2000s we have expanded our area of operations to Southeast Asian countries such as Vietnam and thePhilippines where there is strong economic development. Furthermore, we entered Indonesia in FY2021 where we are working toestablish a business foundation.
In addition, there are three pillars to our trading business: the export of cement and clinker through direct trade that does not
involve a trading company, trilateral trade mainly to meet the demand of our overseas group companies, and our bulk materials
business in materials such as gypsum and slag. We aim to build a new logistics network that includes Indonesia in the future.

Taiheiyo Cement GroupUS west coast

Africa etc.

Southeast Asia
OceaniaSouth America (Chile etc.)

Expanded Areas of the Taiheiyo Cement Group7

Message from Top Management

Message from the President

8

Continuing our growth towards an
outstanding leading company that
fulfills its mission in an essential industry

Domestic demand for cement stayed above
40 million tonnes in the 2010s, but declined
to around 38 million tonnes in both FY2021
and FY2022 due to the impact of COVID-19.
However, the fact that demand was reduced
by only 2 million tonnes, or about 5% in thisunprecedented situation, means that the cement
industry provides an indispensable material that
supports the foundation of people's safe andsecure lives, and was able to continue operating
because it is valued by society as an essential
industry that supports local employment. As theimpact on operations was limited in the UnitedStates and also Southeast Asia, I was once again
inspired by the weight of the responsibility of
supporting this essential industry.
I believe that the social responsibility of thecement industry will continue to increase as
the national resilience plan progresses, which
includes disaster prevention and mitigation
measures to prepare for the intensification ofclimate phenomena. Furthermore, the deliveringof carbon neutrality is the most important issue
for the cement industry, which we will definitely
achieve through pioneering action.

President and Representative Director

Masafumi Fushihara

9Message from Top Management
Message from the President

2022 in Review

Related articles:
Key Business Strategy Themes
P.40-55

Related articles:
Medium-Term
Management Plan
P.24-25

In our main domestic cement business, we expected that the COVID-19
pandemic would gradually come to an end in FY2022, urban redevelopment
projects would become active and demand would recover after the Tokyo
Olympics and Paralympics. But, by contrast, the progress of construction
was affected by the increase in positive cases and close contacts among
workers at construction sites. In addition, regarding public sector demand,
there were unsuccessful bids due to the impact of soaring material prices.
Furthermore, the price of coal used in cement production continued to rise
since the beginning of the year, increasing to more than double the average
procurement price of the previous year in the space of a few months. In
October, we determined that we could not absorb these cost rises through ourown efforts alone, so we decided to raise the prices of cement and cementbased soil stabilizers by 2,000 yen per tonne for shipments from January
2022. However, we were unable to absorb the sudden cost increase in the
short-term which resulted in decreased profit. On the other hand, although
the overseas cement business was affected by lockdowns due to the spreadof COVID-19 in Southeast Asia and the stagnation of construction work in
China due to concerns about electric power supply stability due to rising coalprices, our main market in the United States drove an increase in profit. In the
non-cement business, we were able to record profit at the same level as theprevious year despite the difficult business environment. Under these businesscircumstances the group’s net sales for this fiscal year declined from theprevious fiscal year to 708.201 billion yen and operating income decreased to46.701 billion yen.

23 Medium-Term Management Plan
Summary of the plan and current business environment

The Taiheiyo Cement Group is diligently implementing the 23 MediumTerm Management Plan covering the three-year period from FY2022 to
FY2024. Under the 23 Medium-Term Management Plan we will construct a
new business model where all businesses in our group function together
comprehensively and integrally, with the aim of becoming an outstanding
leading company. Our business targets for FY2024, the final year of the plan,
are an operating income on net sales of 11% or more, and an ROE of 10% ormore. We have adopted the following indicators as guidelines for achieving
those targets.
Net sales: 750 billion yen or more
Operating income: 85 billion yen or more
EBITDA: 145 billion yen or more
Net debt/equity ratio (DER): Around 0.4 times
Net interest-bearing debt/EBITDA: 1.5 or lessWe plan to generate a cash flow of 330 billion yen over the three-year
period of the 23 Medium-Term Management Plan by means of our operating
cash flow and asset sales. We intend to use this to fund new investments
aimed at sustainable growth and enhancing shareholder returns while
maintaining a net DER ratio of around 0.4 times and a sound financial
structure. In addition, we plan to invest a total of 300 billion yen over the next10

decade, which, includes the three years covered by the 23 Medium-Term
Management Plan, consisting of 100 billion yen investments in initiatives
towards the delivering of carbon neutrality, the strengthening of plantfacilities, and the development of quarries.
However, operating cash flow in FY2022, the first year of the 23 MediumTerm Management Plan, decreased to below the plan. However, because we
do not have that much time left to deliver carbon neutrality, strengthen plantfacilities and develop quarries, we will strive for prompt profit recovery without
making major changes to our medium to long-term vision and policies. First ofall, in order to secure an appropriate profit in the domestic cement business,
which has fallen into the red due to the high energy costs associated with
Russia's invasion of Ukraine and the cost of switching from Russian coal, we
decided to once again revise the prices of cement and cement-based soil
stabilizer products for shipments from October 2022 in the form of selecting
either a “coal price surcharge” or a “fixed price revision”. We will explain thiscarefully so that customers can understand that this measure is essential forthe sustainable development of the cement industry.

Sustained growth investments

Domestic cement demand continues to remain at around 38 million tonnes.
Although the COVID-19 pandemic has suppressed demand and we donot believe that we have entered a period of declining demand, we cannot
expect an environment in which demand will grow again in the future. On theother hand, if we look overseas, there are many countries and regions where
demand for cement continues to grow, so this is the center of our attention
when it comes to looking for growth opportunities.
Since the latter half of the 1980s, we have expanded into the United States
and China, where we manufacture and sell cement locally, and since the 2000s
we have expanded our area of operations to Southeast Asian countries suchas Vietnam and the Philippines, where there is strong economic development.
Currently, about 40% of our cement production capacity comes from ouroverseas plants, and have grown to the point where more than half of ourconsolidated operating income comes from overseas subsidiaries. With the
Biden administration having passed an infrastructure investment bill worth
more than US$1 trillion and the 2028 Los Angeles Olympics and Paralympics
approaching, we consider the United States a suitable growth investment
destination as it appears certain that cement demand will continue to growin the future. In Southeast Asia we would like to expand our operations in thePhilippines and Vietnam, where we have already a presence. Specifically, we
believe that measures such as increasing production capacity and enhancing
the distribution networks will be effective to enable us to achieve a 10%
market share in each country.
Under this policy, during the period of the 20 Medium-Term Management
Plan we decided to transfer our equity in our Chinese cement manufacturing
and sales subsidiary to our partner, renovate the production line at thecement plant in Cebu, the Philippines, and enter into a capital and businessalliance with the Indonesian government-owned cement manufacturer
Semen Indonesia Group. Furthermore, during the period of the 23 MediumTerm Management Plan, we are steadily progressing our overseas growthinvestments, including the decision to acquire cement-related business assets
in the United States.
In addition, our growth investments are not solely focused on overseas
markets and there should be plenty of opportunities for growth in Japan as

Related articles:
Message from the officer
in charge of finance
P.54-55

Related articles:
Reconstructing the overseas
business portfolio
P.30-31
Cement Business (Overseas)
P.44-45

SI Group Tuban Plant (Indonesia)

11Message from Top Management
Message from the President

well. We are currently discussing at length, with an open mindset and without
any restrictions on business area, to explore new business opportunities open
to Taiheiyo Cement Group in Japan. However, no matter what field it is, there
is no chance of winning if we are a latecomer to the market and expect touse existing methods, so we believe that an approach based on the theme ofresource recycling, which is one of our strengths, will be effective.
We also have technology and know-how that has been cultivated throughcement manufacturing and the handling of limestone and other mineralproducts. We will make maximum use of this technology and know-how for
the development of new materials.
Related articles:
Delivering Carbon Neutrality
P.26-29

The GI Project is a 2 trillion yen
fund newly established by NEDO inorder for the Japanese government
to deliver carbon neutrality
by 2050. Eligible projects
receive continuous support for
up to 10 years, from researchand development through toimplementation in society.

Delivering Carbon Neutrality

We also regard carbon neutrality as a strategy for growth. For the cement
industry, carbon neutrality is an initiative necessary for survival and is ourbiggest management challenge for which we must overcome all obstacles.
The entire company is working as one, with the Vice President taking the lead,
and we have already launched the Carbon-Neutral Technology Development
Project Team to develop innovative technologies that will contribute to carbon
neutrality in the production process. At our Kumagaya Plant, from December
2021 we have been demonstration testing technology to capture and reuse
CO2 emitted from cement kilns. This project, subsidized by NEDO (New
Energy and Industrial Technology Development Organization), is progressing
well. We are also progressing with the “Development of Cement Production
Processes that Capture CO2” which, in January 2022, was adopted as a NEDO
Green Innovation Fund Project (GI Project). Specifically, in the GI Project, wehave started work on the development of our own unique and world-first“CO2 capture calciner”, comprising compact equipment that can capture
CO2 efficiently from the preheater. We also plan to develop a methanation
system suitable for the cement manufacturing process, which will convert thecaptured concentrated CO2 to methane (CH₄) by reacting it with hydrogen.
If CO2 can be reused as thermal energy for cement production through thismethanation system, it will be possible to significantly reduce the consumptionof fossil fuels such as coal. In addition, we have partnered with a city gas
company to commence a feasibility study on using the synthesized methaneas part of the city gas supplied to households. Until now, it was thought thateven if CO2 could be captured it would have to be stored at a considerable
cost, but if it is possible to supply it as part of the city gas the CO2 will havenew value. Similarly, because high purity CO2 (over 99%) can be captured by
the amine method, which is being demonstrated at the Kumagaya Plant, it has
the potential to be reused as something even more valuable. We will steadily
implement these projects.

Towards resilience to support sustainable growth
Related articles:
Strengthening plant facilities
P.32-33

12

In addition to growth investments, over the next decade until 2030, which
includes the three years covered by the 23 Medium-Term Management Plan,
we will investment 100 billion yen in the strengthening of plant facilities andthe development of quarries. All of our cement plants in Japan have been in
operation for over 60 years and, while we have strengthened our preventive
maintenance activities and endeavored to extend the life of equipment toensure continuous operation, in recent years there have been unforeseen
breakdowns. As we believe that cement production and sales will remain
our core business in the future, we will work to strengthen our facilities,
including the replacement of principal equipment that has been put off untilnow. In addition, we will progress the upgrade of equipment management in
anticipation of the automation of cement plant operation using AI and IoT.
On the other hand, limestone is the lifeblood for our Group, so we will
also work on the development of quarries. Limestone is a natural resource
for which Japan can is 100% self-sufficient, but we must always keep in mind
that we are digging up the nation’s land and conduct quarrying carefully andsystematically, with maximum consideration given to environmental impacts
such to biodiversity and water resources. If one limestone quarry is developed,
it is possible to secure 100 years’ worth of raw materials for a cement plant,
but it requires an investment of 10 billion yen and a development period oftens of years. A decision to undertake a development of this scale comeswith the determination to continue the cement business into the future.
We have continued to develop quarries even during periods when our
financial structure has been vulnerable and, in April 2021, we completed
the development of the Horoshi area of the Ofunato Quarry. Over the next
10 years we will develop the Yato area, which will be the next raw material
quarry for the Oita Plant, our group’s largest cement plant. Through thisdevelopment, we will be able to secure a 100-year supply of limestone
for cement production at the Oita Plant, and we plan for it to commence
operations from around 2029.

Related articles:
Quarry Development
P.34-35

Horoshi area of the Ofunato Quarry

Promotion of Human Capital Management
People are a company's greatest asset that does not appear on its balance
sheet. Whether or not these assets have vitality has a great impact on thecompany's performance. We take into account the safety and health of ouremployees with the belief that “we will not make our employees unhappy or
their families sad”. We must keep in mind that no matter how many measures
we take at manufacturing sites such as cement plants and limestone quarries,
we can never assume that such safety measures are sufficient. I continue
to tell the top management of our group companies that we must always
cherish people and think about business operations based on that. I believethat valuing each and every employee will lead to the sustainable growth ofthe company and create innovation, and we aim to be a company where ourhuman assets function with vitality.

Human resource development

Even among the employees involved in cement manufacturing, specialists
are assigned to roles such as quarry development, equipment management
and maintenance, manufacturing processes and energy management.
Looking at the group, our business fields are broad and include railways,
power generation and chemicals, and I feel proud that the specialists we havein each field are a reservoir of talent. We will push ahead with human resource
development to further enhance this human capital.
First, we will thoroughly pass on the techniques and know-how that wehave inherited from our predecessors to the younger generation. As places oflearning, we have also established “Techno Schools” for mid-career engineers
at each plant to intensively learn specialized knowledge related to cement
production, and “Maintenance Dojo” for the employees of contractors tolearn to improve their equipment maintenance and inspection skills. Seminars
for the development of engineers are also held at the Cebu Plant in thePhilippines. Furthermore, for practical experience, we are actively dispatching

Related articles:
Occupational health and safety
P.78-81

Related articles:
Enhancing Management
Foundations - Human Capital
P.36-37

An engineer training seminar

13

Message from Top Management
Message from the President

Related articles:
Human Capital
Human Resource Development
Respect for human rights
Diversity
P.82-87

young engineers to the renovation of the production line at the cement plantin the Philippines. Because opportunities to be involved in the construction of
an integrated cement plant are very rare, we believe that it is our responsibility
as a leading company to have people gain experience in this kind of practicalwork, develop human resources who are capable of designing and managing
the construction of an integrated cement plant, and pass on that experienceand technology to future generations.

Diversity & Inclusion

The attributes, lifestyle, and values that each employee has is a perfectrepresentation of the saying “to each their own”, and the diversity continues
to expand. We believe that diversity and inclusion are initiatives that integrate
our diverse human resources and are linked to the creation of new value.
The diversity targets of our CSR Objectives for 2025 include a ratio of female
recruits in career-track positions of at least 30%, a ratio of female employeesof at least 10%, and a ratio of newly appointed female managers of at least
10%. In addition, we are also further progressing the employment of foreignnational employees and employees with disabilities. We also invite outside
lecturers to provide training on unconscious bias and LGBT issues, andhold diversity forums to foster a corporate culture that recognizes diverse
values. Furthermore, we have formulated an action plan based on the Act
for Advancement of Measures to Support Raising the Next Generation and
the Act for Promotion of Women’s Participation and Advancement in the
Workplace, to respect the values of each employee and improve work-lifebalance.

Health and Productivity Management (H&PM)

We prioritize health and safety above all else, and promote H&PM withthe aim of creating a workplace where every employee can work in good
health and with vitality. I believe that employees working in a healthy state ofboth mind and body leads to improved safety and performance, which not
only can be expected to improve business performance for the company,
but also contribute to solving social issues such as improving the healthy
life expectancy of the people and optimizing national medical resources.
We revised the Taiheiyo Cement Group Health-Conscious Management
Declaration in 2022 and are progressing various initiatives.

Human rights

Pamphlet of prohibited behavior 2.0

UN Global Compact (UNGC)
P.119

14

In 2015, we formulated the Basic Policy Concerning Human Rights andLabor Practices based on the idea that respect for human rights is essential
for the development and survival of a company, and that it is a responsibility
that all companies should fulfill. Prior to that, we have been working to raiseawareness of human rights among employees, including those within thegroup, through workshops held by the Human Rights Awareness Promotion
Office. In addition, we have distributed to all employees a behavior handbook,highlighting prohibited behavior such as sexual harassment and bullying, andtake thorough measures aimed at creating a workplace free of harassment.
In order to further deepen these efforts, the group signed the UNGC in May
2022. By endorsing and adopting the 10 principles in the four areas of humanrights, labor, the environment and anti-corruption defined in the UNGC, we
will further implement the business activities set forth in the Mission of the
Taiheiyo Cement Group and contribute to the realization of a sustainable
society. It is also important to protect human rights, not only of our Groupemployees, but also the people in our supply chain. Cement is manufactured
using natural resources such as limestone and coal, and it is necessary toensure that the mining and transportation of these natural resources does notinclude behavior that violates human rights, such as the use of child labor orconflict resources. We are currently planning human rights due diligence inour diverse supply chains.

Aiming to be a Company Trusted by All Stakeholders
Cement is the foundation of our business and, considering that it is anindustry which can only exist by protecting the environment, including
biodiversity and water resources, I can say that our group's business is
supported by a wide range of stakeholders. We are protecting the areas where
quarries and plants are located, coexisting and moving forward together withresidents by supporting employment and contributing to the local economy.
Furthermore, we will work to provide environmentally sound products andbuild a recycling-based society by maximizing the utilization of the strengthsof our group, namely the “stable supply of cement and mineral resource
products”, “world-class environmental cement production technologies” and“domestic and global networks”, and will pursue the further possibilities of
cement and concrete.
Through our business activities, we are striving to solve global social issues
with the aim of achieving a sustainable society, including environmental
conservation, resource recycling, measures against climate change andcontributing to the common global goals set out in the SDGs.

15

Creating Value

Value Creation Process

Input[Materiality][Capital]
Financial Capital

E: Environment
Delivering of carbon
neutrality

Response to climate change
Contribution to a
recycling-based society

Conservation of the global
environment
Conserving and Restoring
biodiversity

Credit rating (as of September 2022)

A (JCR)A – (R&I)

Manufacturing Capital

17,667thousand tonnes

Reduction of the company’s
own waste generation

Overseas clinker production capacity (FY2022)

Appropriate management ofchemicalsIntellectual Capital

Appropriate use of water
resources[Strengths]

Domestic clinker production capacity (FY2022)

11,630thousand tonnes

Highly diverse
organizations

Patents held (as of the end of FY2022)

S: Society
Creating a safe and secure
workplace
Diversity and inclusion

1,335in Japan
261overseas

Value Chain Management

Human CapitalWork arrangement reform

Number of employees(as of the end of FY2022)

Respect for human rights
Human resource
development

Engagement with local
communities

Quality and Safe Products
Stakeholder engagement

12,542Social and Relationship Capital
Engagement with local communities(FY2022)

G: GovernanceComplianceGroup governanceRisk management(information security,
intellectual property
protection)

Events:2,135

IR Activities (FY2022)
Cases:

179

Natural Resources Capital
Limestone quarries of the group(as of the end of FY2022)

17

Utilization of waste and by-products (FY2022)

405.2kg/t-cement

16

World-classenvironmental
cement production
technologies

Capacity forstable provisionof cement andmineral resource
products

Stableﬁnancial
footingGlobalnetworkOutput

Outcome[Business Activities]

FY2022Net Sales & Operating
Income by Segment[Economic Value](Consolidated basis)

We will construct a business model unique to us,
where all businesses in our group function
together comprehensively and integrally
to achieve our aim of being “outstanding.”

Net sales: 463.2 billion yen
Operating income: 24.1 billion yen
P.42~45

Stable provisionof products andservices

Environmental
Business

Cement production overseas(FY2022)
thousandtonnesRe useFundamental Policies ofthe 23 Medium-Term Management Plan

Socioeconomic beneﬁts
from environmental impact
reduction due to the input
of waste and by-products(FY2022)billionyen

90.8

Become a corporate group that never stops moving forward.
As part of the social infrastructure industry, contributeto the establishment of a safe and stable society.
Strengthen our earnings foundationand steadily carry out growth investment.

Mission of the Taiheiyo Cement GroupNet sales: 65 billion yen
Operating income: 3.4 billion yen
P.50~51

Creation anddevelopment ofa recycling-basedsocietyt[Social Value]

Other- Build safe andsecure social infrastructure- Deliver carbon neutrality- Deliver a recycling-based society

Quantitative- CO2 emissions reduction- Occupational health and safety- Zero occupational accident
Business Strategies

rc h a n d e v e l o pDnme

Construction Materials Business

12,945ntsea- Maintain a net DER of around 0.4

Qualitative

19,096me

Re

Maintain and improve
ﬁnancial soundness:

Environmental BusinessNet sales: 72.3 billion yen
Operating income: 6.6 billion yen
P.48~49

Cement production in Japan(FY2022)
thousandtonnes

Use

MineralResources
Business- Total return ratio: around 33%(one third of the net proﬁt
for the year attributableto parent company shareholders)Medium-Term
Management Plan

ure

Construction
Materials
Business

Shareholder Returns

Risks and opportunities,
Materiality

8.3%

ply
up

R a w m at e r ia l p ro c

CementBusiness

Net sales: 77.1 billion yen
Operating income: 6 billion yen
P.46~47

Reduction rate ofspeciﬁc net CO2 emissions(compared with FY2001)(FY2022)

Logis
tics
an
ds

ion
uct
rod

Mineral Resources Business- Operating income on net sales:
11% or more
- ROE:
10% or more

Value Creationin the Value Chain

Efforts
to mitigate andadapt to climatechangeBoost the Group’s
Total Capabilities

P

Cement Business

23 Medium Term
Management Plan Goals

Strengths of Taiheiyo Cement

Aiming to

become an outstanding
leading company

Value Creation Process

Business Activities

Net sales: 89 billion yen
Operating income: 6.9 billion yen

Transportation and warehousing business,engineering business,chemical product business,
information processing business, etc.

Research and Development
Patent applications: 136(FY2022)P.114~115

Our mission is to contributeto social infrastructure development by providing solutions
that are environmentally efﬁcient, enhance our competitive position
and bring value to our stakeholders.

Corporate Governance and Compliance17Creating Value

Strengths of Taiheiyo Cement

Management Capital
Financial Capital
Credit rating (as of September 2022)

A (JCR)A – (R&I)

Manufacturing Capital
Domestic clinker production capacity (FY2022)

17,667 thousand tonnes

Overseas clinker production capacity (FY2022)

11,630 thousand tonnes
Intellectual Capital

Patents held (as of the end of FY2022)

1,335 in Japan
261 overseas

Human Capital
Number of employees (as of the end of FY2022)

12,542Social and Relationship Capital
Engagement with communities
in which we do business (FY2022)
Events:2,135

Individual meetings with investors (FY2022)
Events:179

Natural Resources Capital

Limestone quarries of the group (as of the endof FY2022)

17

Utilization of waste and by-products (FY2022)

405.2 kg/t-cement18

We will implement financial strategies to support growth investments and strengthen
investments under the 23 Medium-Term Management Plan, while maintaining financial
soundness. We have maintained a Japan Credit Rating Agency (JCR) rating of A since 2020
and a Rating & Investment Information (R&I) rating of A- since 2018, which are indicators offinancial soundness.

Including group companies, we have nine cement plants in Japan and boast the highest
domestic production capacity in the industry. We have also built a solid foundation fortransportation and supply, with 106 service stations (distribution bases) and 35 cementtanker vessels. Overseas, we have nine cement plants in the Pacific Rim region, including
the west coast of the United States, China and Southeast Asia, and are developing a global
network with a view to building the optimal distribution network.
Intellectual property, research and development, and business divisions are working
together to develop activities that support sustainable development based on our basic
policy to create intellectual assets that will underpin our businesses, supply valuable
information via intellectual property solution activities based around data analysis andenhance the intellectual property capabilities of the entire group. In recent years, we havebeen focusing on information analysis, promoting the development of applications fordeveloped technologies and the search for new technological fields.
People are the greatest asset of a company and we are striving to create a safe and secure
workplace, as well as promoting human resource development to increase the value ofeach employee. Our basic policy for promoting diversity is to promote innovation based on
the ideas and values of diverse human resources which will lead to further improvementof corporate value, and we are working to promote “work-life management” to improve
retention and productivity.
Each of our business sites in Japan and overseas contribute to building relationshipsof trust with local communities and growing together with them by fulfilling our social
contribution in the regions where we have business sites. In addition, we are striving
to disseminate information through various media in accordance with our information
disclosure policy in order to gain the understanding and trust of our stakeholders, including
shareholders and investors.
The group owns 17 limestone quarries in Japan and overseas, which supply all of thelimestone material necessary for our cement production. But there are also other uses forlimestone such as for steel, chemicals and aggregates for ready-mixed concrete, so we areplanning the more effective use of our limestone resources. In addition, by effectively using
industrial waste and by-products in cement production as substitutes for raw materials
and fuel, we are contributing to the conservation of natural resources and the reduction ofgreenhouse gas emissions.

1

2

3

5

The group has 11 limestone quarries in operation in Japan, with an annual volume
extracted of more than 40 million tons, and we boast the largest volume of limestone
resources in Japan. Furthermore, over the next decade until 2030, which includes theperiod covered by the 23 Medium-Term Management Plan, we will invest 100 billion
yen in strengthening our quarries and aim to build a stable supply system with a view tothe next 100 years. Overseas, we are progressing the expansion of our business and theconstruction of an optimal distribution network to ensure a stable supply of cement andmineral resource products.

Domestic and global networks

We continue to support infrastructure development by supplying high quality cement
and construction materials, and applying advanced technologies at nine cement plants inJapan and nine in the Pacific Rim region, including in the west coast of the United States,
China and Southeast Asia. Going forward, we aim to enhance our networks by building a
new overseas business portfolio and expanding our trading business in the global market.

Highly diverse organizations

Business Strategies

5

Stable supply of cement and mineral resource products

Medium-Term
Management Plan

4

In addition to using industrial waste and by-products, household waste andincinerated ash as raw materials and fuel for cement, in recent years we have utilized
waste from natural disasters to fulfil our contribution to building a recycling-based society.
Furthermore, based on the recognition that carbon neutrality is the most important
issue for the cement industry, we have formulated the “Carbon Neutral Strategy 2050”,
which includes interim goals for 2030 and the prompt establishment of carbon-neutral
technologies that can be implemented in society, and we are accelerating our efforts.

Risks and opportunities,
Materiality

3

World-class environmental cement production technologies

Value Creationin the Value Chain

2

Strengths

Strengths of Taiheiyo
Cement1

Value Creation Process4

Based on the idea that people are a company's greatest asset that does not appear on
its balance sheet, we are creating a workplace that gives highest priority to the safety andhealth of our employees. In addition, we consider diversity and inclusion to be initiatives
that integrate our human resources and are linked to the creation of new value, and arepromoting human resource development that enables each employee to play an active role
through various initiatives, including promoting the active participation of women.

Stable financial footing

Although the group had a weak financial structure at the time of the merger in
1998, we have improved our profitability to the extent of recording operating incomeof 60 billion yen or more for eight consecutive years from FY2014 to FY2021, and havemaintained the issuer credit rating of A that we acquired in 2018. In addition, by the endof FY2021, the final year of the 20 Medium-Term Management Plan, our financial structure
had improved to an equity ratio of over 45% and a net debt/equity ratio (DER) of 0.4 times.
Going forward, we will strive to maintain and improve our financial soundness.

19Creating Value

Value Creation in the Value Chain
The Value of Cement– the essential component of Concrete

DisasterPrevention

Cement makes travel
and transportation moreconvenient

Life

DisasterPrevention

Cement protects
against landslides

Cement supports
rebuilding and restoration
after a disaster

Production
Value Provided- Extending the life of landfill
sites and contributing to a
recycling-based society by
utilizing waste (400 kilograms
used per tonne of cement)

Raw material procurement

Transportation

Value Provided

Value Provided- Stable supply of limestone (securing
supply for the next 100 years)

Recycling
Value Provided

20- Contribution to a recycling-basedsociety through recycling of waste
and effective use of by-products- On time, stable supply of
products through our nationwide
distribution network

Sales
Value Provided- Products that respond flexibly
to lifestyles- Formation of the base ofsocial infrastructure

Life
Life

Value Creationin the Value Chain

DisasterPrevention

Cement makes
waste recyclable

Strengths of Taiheiyo Cement

Cement effectively uses
by-products

Cement protects
against both flood andwater shortages

Medium-Term
Management Plan

DisasterPrevention

Life

Risks and opportunities,
Materiality

Cement provides safe
and secure spaces

Cement protects
against tsunamis
and high tides

Life

Value Creation Process

Cement contributes
to developmentsin sports and culture

Business Strategies

21Creating Value

Risks and Opportunities
Summary of the Collection, Evaluation and Identification of Company-wide Risks
Compile anticipated changes in social andStep 1 environmental conditions over the next ten years.
Evaluate the impact of the identified

Step 2 changes on the group.

Review the results of the evaluation of

Step 3 the impact.

We collect, evaluate and identify company-wide risks,
including those of group companies, every three years andconduct an annual review of those risks. We carried out acompany-wide risk review in FY2020. The purpose of identifying
risks is to identify the impact of anticipated changes in social andenvironmental conditions over the next ten years in relation to
uncertainty of group management, and then formulate measures
to avoid and reduce that uncertainty.

Review company-wide material risks

Step 4 (Risk Management & Compliance Committee).
Determine company-wide material risks

Step 5 (CSR Management Committee)

Risks
Risk
category

Opportunities

Strategies
Businessstrategies

Business opportunities

Environmental aspects- Increasing demand forenvironmentally soundproducts (with low CO2
emissions)- Acceleration of initiatives tostrengthen urban areas andprotect them from natural
disasters- Reconstruction in disaster
stricken areas

Contributing
to thedeliveringof carbon
neutrality- Provision of technologies
and technical guidance toemerging economies

Contributing
to theenhancementof national
resilience

Social aspects- Technological innovation- Changes in economic conditions- Continuity and development related to
declining birth rates and aging populations:
Declining labor forces

Company- - Waste treatment
specific - Aging facilities

Compliance- Maintenance and improvement of thegovernance system- Respect for human rights- Occupational safety and health- Accident prevention (including in relation to
products and services)- Prevention of misconduct (including in
relation to products and services)- Response to impacts of external accidents- Participating in and respecting local
communities- Change risks: Arising from changes in the social
environment- Company-specific risks: Arising from the characteristics
of our business and capital, including all types ofcapital such as mining rights and human resources- Compliance risks: Related to organizational
infrastructure- Shift to a recycling-basedsociety (wide variety of recycled
raw materials and fuels)

Connection with our strengths

Stable supply
Domestic
based on results of of cement Environmental
globalmineral technologies
the company-wide andin cement andnetworks
resource
production
risk review
products

Item- Climate change: Increasingly extreme
weather events and dramatic increase in
weather related disasters- Climate change: Stricter regulations- Increase of environmental pollution
and developments related to its impact:
Regulations
Change - Geological and biological events: e.g.
occurrence of massive earthquakes

22

Maximizing the group’s corporate value
will contribute to the establishment of safe
and stable social infrastructure

Contributing toa recycling-basedsociety

For more details, please see:
- Corporate Governance: P.104~- Risk Management and Compliance: P.110~

We referred to the following risk information:- “Global Risk Report (2019)” World Economic Forum- “Regional Risks for Doing Business (2018)” World Economic Forum- “Enterprise Risk Management (2018)” COSO/WBCSD- “Top Risk 2019 (2019)” Eurasia Group- “10 for 2019: Systemic Risks Loom Large (2019)” Sustainalytics- SDGsMateriality
Value Creation Process

Steps in the Review
Step

Identification of issues

1

Step

2

Step

We scrutinized whether the selected issues encompassed
key issues for the Taiheiyo Cement Group, and whether
they reflected the expectations of our stakeholders, before
coming to a final decision.

Step

P.88

P.92

R eduction of the company’s own
waste generation
P.69

High

P.76

A ppropriate management ofchemicals
P.69
LargerP.36,86

Value chain management

P.88

P.78

Conservation of
the global environment

Creating a safe andsecure workplace

P.68

Delivering carbon neutrality

P.26

Response to climate change

P.62

ComplianceP.110Group governanceP.104

Contribution toa recycling-based society

P.66

P.110Respect forhuman rights

C onservation and restorationof biodiversity
P.72

Appropriate useof water resources

Diversity and inclusion

P.36,85

Work arrangement
reformP.36,83

 uman resourceHdevelopment

P.36,82

DX promotion

P.38

Risk management

Engagementwith local communities

P.94(information security, intellectual property
protection)

LargerBusiness Strategies

HigherStakeholder
engagement

We review the issues every year with outside input.

Medium-Term
Management Plan

Quality andsafe productsReview

Risks and opportunities,
Materiality

Extremely highDegree of interest and importance for stakeholders

P.54

We held internal discussions to review the identified
sustainability issues and decide which were material
aspects for the Taiheiyo Cement Group, ranked them inorder of priority and identified 11 material issues.

3

4

Financial strategy

Prioritization

Value Creationin the Value Chain

Verification

Strengths of Taiheiyo Cement

We identified issues while referring to internationalguidelines and stakeholder feedback in the context of ourbusiness.

Extremely large

Importance to the Taiheiyo Cement Group23

Creating Value

Medium-Term Management Plan
Looking Back at the 17 and 20 Medium-Term Management Plans
First step

Second step

17 Medium-Term Management Plan

20 Medium-Term Management Plan

The 17 Medium-Term Management Plan covered thethree years from FY2016 to FY2018 and is regarded
as the first step towards realizing our future vision anddirection. It aimed to maximize our corporate value.

We built on the results of the business and financial strategies
implemented in the first step, the 17 Medium-Term Management
Plan, and continued addressing the remaining issues to open up apath on which we could move on to the next step by ensuring theimplementation of new initiatives and establishing a solid businessfoundation for future sustainable growth.

(FY2016 to FY2018)

Fundamental Policies
T o become a corporate group that preempts
future changes in the environment and seeksinnovations in all fronts, thereby progressing
on a growth path.
To contribute to the establishment of a senseof safety and security in society through theprovision of materials and technologicaldevelopment, furthering national resilience asa member of the social infrastructure industry.
To vigorously push ahead with further
strengthening our earnings base and financial
structure aiming at sustainable development
by strengthening businesses throughexhaustive cost-cutting.

(FY2019 to FY2021)

Fundamental Policies
T o become a corporate group that anticipates future changes
in the business environment and seeks innovations on all
fronts, thereby advancing along a pathway of growth.
To contribute to the establishment of a sense of safety andsecurity in society through the stable provision of high quality
products, solutions and advanced technology development,in order to build national resilience as a member of the social
infrastructure industry.
To push ahead with the strengthening of our earnings
foundation for businesses and further improve our financial
structure through cost reductions as well as by actively
executing investments in promising fields that will contributeto the group’s sustainable growth.

Performance
Profitability

Operating income on net sales: 7.5%
Return on assets (ROA): 6.3%
Growth investments: 100 billion yen- Acquisition of the Oro Grande plant (U.S.A.) andconstruction of its new mill- Construction of the Ofunato Power Plant (biomass
power plant)- DC Co., Ltd. made a wholly owned subsidiary

Financial structure

Net debt/equity ratio (DER): 0.6 times- Net interest-bearing debt of 234.8 billion yen (endof FY2018)

Shareholder Returns

Increased dividends and purchased treasury shares.
- Payout ratio: 18% (3-year average)- Total return ratio: 26% (3-year average)- Treasury shares purchased: 10 billion yen

Performance
Profitability

Operating income on net sales: 7.4%
Return on assets (ROA): 6.3%
Growth investments: 100 billion yen- Investment in the SI Group- Renovation of TCPI’s production line
- C onstruction of new waste heat recovery power generation system(Saitama Plant)

Financial structure

Net debt/equity ratio (DER): 0.4 times- Net interest-bearing debt: 175 billion yen (end of FY2021)

Shareholder Returns

Steady dividend payments and purchase of treasury shares.
- Payout ratio: 19% (3-year average)- Total return ratio: 30% (3-year average)- Treasury shares purchased: 15 billion yen

20

17

Medium-Term
Management
PlanFirst step24

Medium-Term
Management
Plan

Second step

23

(FY2022 to FY2024)“Aiming to become an outstanding leading company”

We aim to construct a business model unique to us, where all businesses in our groupfunction together comprehensively and integrally. In other words, to become an
outstanding leading company

Fundamental Policies

Strengths of Taiheiyo Cement

Medium-Term
Management Plan

23 Medium-Term Management Plan

Value Creation Process

Third step

Strive for sustainable growth.
A s part of the social infrastructure industry, contribute to the establishmentof a safe and stable society.
Strengthen our earnings base for businesses and steadily carry out growthinvestments.

Profitability

Review
Achievements

Key Strategies

1 Sustained growth investment
to deliver carbon neutrality
2 Initiatives- I nitiatives to deliver carbon neutrality by

Growthinvestment

plant facilities
3 Strengthening- I n order to establish a production and supply

Carbon neutrality
100 billion yen

2050 (Growth strategy)system with long-term stability by 2030, we
will renew key machinery, upgrade productionand equipment management and deploy AI.

Quarry Development

4 - We will establish a long-term stable supply
system for limestone resources by 2030

20 billion yen
10 billion yen

35 billion yen
23
Medium Term
Management
Plan

Business Strategies

Sustained growth investment
Initiatives to deliver Carbon
Neutrality
Strengthening of plantfacilities and quarry
development
Restructuring our businesses
in Japan*1 Since we have adopted the Accounting Standard for
Revenue Recognition(ASBJ Standard No. 29) etc. from FY2022, the net sales
in the FY2024 plan show the amount after adoption of
the new standard. (The adoption of the new standard
has a negative impact of -210 billion yen.)*2 EBITDA = Operating income + depreciation(including goodwill amortization)C ash flow from operating activities
and assignment of assets etc. (3-year
cumulative total): 330 billion yen-N ew investment aimed at sustainablegrowth: Capital expenditure, andinvestment and financing: 280 billion
yen (including growth investment:
120 billion yen)
- S hareholder returns: Total return
ratio around 33% (one third of the
net profit for the year attributable toparent company shareholders)- Maintain and improve financial
soundness: Maintain a net DER ofaround 0.4

Medium-Term
Management Plan

Challenges

Net sales*1: 750 billion yen or moreOperating income: 85 billion yen
or moreEBITDA*2: 145 billion yen or more
Net debt/equity ratio (DER): Around 0.4
Net interest-bearing debt/EBITDA:
1.5 or less

Investment Strategy and Shareholder Returns

Risks and opportunities,
Materiality

 lthough domestic demandA
for cement is decreasing,operating income stayed in
the 60 billions of yen range.
M aintained shareholder returns(total return ratio) of 30%.
Achieved our target of a net
DER of 0.4 times or less aheadof schedule.
Growth investments
proceeding according to plan.

Plan for FY2024

Value Creationin the Value Chain

Operating income on net sales: 11% or more
Return on equity (ROE): 10% or more

Strengthening
plant facilities
100 billion yen
Quarrydevelopment
100 billion yen
FY2022~
FY2031

Third step25

Creating Value
Medium-Term Management Plan

23 Mid-Term Business Plan Key Strategies
1

Delivering Carbon Neutrality

Formulation of Carbon Neutral Strategy 2050

Initiatives for 2030 and 2050

Significance of Carbon Neutrality in the Group's Mission

1. Target for 2030

The Taiheiyo Cement Group does not underestimate thechallenge to address climate change and realize a decarbonizedsociety. However, for the group's sustainable growth, it isessential to deliver carbon neutrality while fulfilling thegroup's mission. We have an important growth strategy ofquickly establishing carbon-neutral technologies that can be
implemented in society.
In the 2023 Mid-Term Management Plan released on May 13,
2021, we announced the Carbon Neutral Strategy 2050 underwhich the group aims to deliver carbon neutrality throughout
its supply chain by 2050. In addition, on March 24, 2022, wedeveloped specific measures for the Carbon Neutral Strategy
2050, including the Technology Development Roadmap towards
carbon neutrality and a 2030 Interim Target.

Domestic and overseas group targets (compared to 2000)

2030 Interim Target*: Reduce CO2 emissions intensity by 20% ormore throughout the supply chain*1* Reduction of CO2 emissions (domestic): 40% or more compared to 2000

(1) Develop and introduce technologies to deliver carbon neutrality-M aximum use of existing technologies (energy conservation,
low-CO2 energy and cement*2)- Completion of innovative technology development (CO2
capture and utilization)(2) Investment of 100 billion yen towards carbon neutrality

2. Delivering carbon neutrality by 2050

(1) Sequential deployment of innovative technologies(2) Delivering of carbon neutrality throughout the supply chain
By working with governments and collaborating with otherindustries, the group will address issues such as social acceptability,
sharing of economic burden, green energy supply and infrastructuredevelopment, which need to be solved for the social implementationof innovative technologies essential for the deliver of carbon
neutrality.

*1 Supply chain: A series of processes involving cement as a commodity, such as
raw cement material procurement, production, distribution, use of concrete andrecycling, including scopes 1, 2 and 3.
*2 Low CO2 cement: Cement using low-CO2 clinker, blended cement, cement using
carbonation process, and the like.

CO2 Emissions
from Cement Production Process

Approx.

60%

CO2emissions

Raw material-derived(decarbonation*)

Taiheiyo Cement Group's
CO2 reduction targets

Energy-derived
Approx.

40%

Cementproduction
process

Existing
technology
Raw material-derived

Energy-derived(fossil energy and electricity
consumption)

Innovative technology

Other than cement production process* CaCO₃→CaO＋CO2

26

CO2 reduction rate

0

Introduction ofenergy-saving
facilities

40

Development andintroduction of
low-CO2 energy
utilization technology

Maximize use ofexisting technologies
Completion of innovativetechnology development
Sequential
deployment
of innovativetechnologies

60

80

100
2000

2020

2030

2050

2030 Interim Targets
Reduce emissions intensity
by 20% or more in
the supply chain compared to 2000

2050
Delivering ofcarbon neutrality- Heavy machinery :Switch to EVs- Plant trees at quarries

Cementmanufacturing

Core
Initiatives

Raw materials
procurement
Waste andby-product sourcing- Utilization of
concrete waste- CO2utilization

Concretemanufacturing- CO2 absorbed
by concrete

Recycling

Use/Demolition

Aggregate production
and distribution- Trucks: Switch
to HVs and EVs

Development of CO2 Capture Technology for the Cement
Production Process
Green Innovation Fund Project (since FY2021)
CO2 capture technology: CO2-capture cement production
process (CO2 recovery using a compact facility)
Development and demonstration of a technology to capture
CO2 at the calciner (C2SP kiln) that efficiently recovers CO2
CO2 utilization technology: Methanation (CO2 conversion into
thermal energy source)- Demonstration of methanation system suitable for the
cement production process

Carbon neutrality by
2050

2030 interim target(reduction of emissions intensity by 20% or more throughout the supply chain compared to 2000)

2022

2030

2040
Use of renewable energy

Establishment of technology contributing to a 50% use of waste-derived energy
Establishment of gas firing technology

Use of synthetic methane converted from captured CO2,hydrogen and ammonia

S tandardization of increased use of minor mineraladmixtures in OPC in the domestic business areaD evelopment of technology to utilize supplementary
cementitious materials in the overseas business area

2050
Business Strategies

Energy saving and improved efficiency(high-efficiency coolers, gas and waste heat recovery power generation, etc.)

Medium-Term
Management Plan

- Tankers and trucks:
Made more energy-efﬁcient,switch to EVs- Contribute to the creationof circular economies

Logistics- Innovative CO2 capture- Low-carbon energy and efﬁciency- Low-CO2 cement

CO2 capture technology: Chemical absorption method (Captureof high-purity CO2)
- Demonstrative application of the amine method, which is
widely used to capture CO2, to the cement process
CO2 utilization technology: CO2 mineralization in cement andconcrete materials- Demonstrative application of efficient CO2 mineralization ofwaste concrete, concrete sludge, etc.
- Demonstrative application of CO2 mineralization through lowCO2 cement (CARBOFIX)

Risks and opportunities,
Materiality

Limestone mining
and distribution

Development of Carbon Circulation Technology for the
Cement Industry
A NEDO-funded project (FY2000~FY2021)

Value Creationin the Value Chain

Supply chain initiatives towards delivering
carbon neutrality

Our Efforts to Develop Innovative Technologies

Strengths of Taiheiyo Cement

20

Development and introductionof low CO2-cement technology

Value Creation Process

Scenario for Delivering Carbon Neutrality

Commercialization and popularization
Expanded use of supplementary cementitious materials

Development of low-CO2 cement technology (CARBOFIX, etc.)
Development of carbon circulation technology (chemical absorption method,
CO2 mineralization)
Development of CO2-capture cement production process (C2SP kiln)
Development of process to convert captured CO2 into synthetic methane
Optimization by use of EVs and AI in the transportation sector
Limestone quarry greening, development of algae propagation technology, etc.
Standardization of accounting for CO2 uptake by concrete carbonation (recarbonation)

Market introduction, commercialization and popularization
Utilization of captured CO2
Sequential deployment to domestic and overseas plants

Introduction and deployment throughout the supply chain27

Creating Value
Medium-Term Management Plan

Vice President
and Representative Director

Carbon Neutral Strategy
2050

Yuuichi Kitabayashi

We have established a technology development project team topromote the development of a CO2-capture calciner (C2SP kiln)
and methanation technology, and are aiming to achieve CO2
capture and reuse.

28

Q: What are the key points of the initiatives
towards delivering carbon neutrality?

Q: C ould you please explain your initiatives todevelop new carbon capture technologies?

As is well known, a considerable amount of CO2 is emitted
during the cement production process. Of this, 40% comesfrom energy sources and 60% comes from the decarbonationof limestone, the main raw material. We believe that in the
future it will be possible to reduce the CO2 emissions fromenergy sources to zero by switching to green energy sources
such as hydrogen, ammonia and synthetic methane, but
regarding the CO2 emissions from raw materials, there is a big
problem that we cannot reduce it to zero as long as limestone
is used.
Therefore, we are working on the development oftechnologies to efficiently capture and also use the CO2
generated from limestone. If we can deliver carbon neutrality
ahead of the rest of the world through the commercializationof these innovative technologies, it will lead to significant
growth for us. We have already established a technology
development project team for carbon neutrality and areparticipating in NEDO's Green Innovation Fund Project
to promote the development of innovative technologies.
Furthermore, in March 2022 we formulated the Carbon
Neutral Strategy 2050, positioning the achievement of carbon
neutrality as one of our most important challenges, and areaccelerating our efforts.

There are two CO2 separation and capture methods
currently being studied. One is a chemical absorption method
called the amine method, which can capture high-purity CO2
by repeating the process of absorbing CO2 with a chemical
absorbent called an amine solution, and heating the amine
solution to release the CO2. CO2 capture using the amine
method will be implemented as a NEDO demonstration
project from FY2021 to FY2022 at the Kumagaya Plant,
and demonstration operations will continue in FY2023 andbeyond in order to accumulate further data.
The other is the development of a CO2-capture cement
production process (C2SP kiln) that efficiently separates
and captures CO2 from the preheater through a device inthe cement production process. Because most of the CO2
originating from raw materials is generated in a heating
furnace called a calciner that is inside the preheater, it
attempts to efficiently capture concentrated CO2 by separating
the combustion gas emitted from the calciner. The C2SP kiln is
our own and a world-first, and we are working with the aim tocreate a global standard model, just as the NSP kiln developedin Japan has become the global standard.
We are also paying attention to technologies such as
underground storage of CO2, whilst also proceeding withresearch and development on the effective use of captured
CO2. Technological demonstration is in progress to mineralize
captured CO2 as a carbonate by reacting it with waste concrete,
ready-mixed concrete or concrete sludge, and reusing it as aconstruction material or raw material for cement. Furthermore,
we are also working on the development of so-called
methanation, which converts captured CO2 into synthetic
methane and reuses it as energy. In addition to reusing synthetic
methane at cement plants, we are working with gas companies
to conduct feasibility studies on reusing it for city gas.

We believe that the group's Carbon Neutral Strategy
2050 is consistent with the Paris Agreement. The Ministryof Economy, Trade and Industry published the “Technology
Roadmap for Transition Finance in the Cement Sector” inMarch 2022 announcing it as being consistent with the Paris
Agreement. We can say that our Carbon Neutral Strategy 2050
is consistent with the Paris Agreement because it conforms
with the technology roadmap presented by the Ministry of
Economy, Trade and Industry.

Strengths of Taiheiyo Cement

Our group is aiming to deliver carbon neutrality
throughout our supply chain by 2050. In addition, as a 2030
interim target, we have set targets of reducing CO2 emissions
intensity by 20% or more and reducing domestic CO2
emissions by 40% or more, compared to 2000. We will invest
100 billion yen to complete the development of innovativetechnologies such as the C2SP kiln for CO2 separation andcapture, CO2 mineralization by carbonation and CO2 utilization
through methanation by 2030, and will promote thedeployment of innovative technologies to our plants in orderto deliver carbon neutrality by 2050.

Q: Is the Carbon Neutral Strategy 2050
consistent with the Paris Agreement?

Value Creation Process

Q: What is the company’s future roadmap?

Value Creationin the Value Chain

Example1

C2SP Kiln

EnergyReuse of CH4

Medium-Term
Management Plan

* Calciner: A combustion device installed in the preheater to improve the firing efficiency of a rotary kiln.

Risks and opportunities,
Materiality

In January 2022, our company was selected for the NEDO Green Innovation Fund Project “Design and Demonstration of CO2Recovering Cement Production Process” and we are currently developing our unique, world-first “CO2-capture calciner*” that canefficiently capture CO2 with a compact device. Approximately 60% of the CO2 generated in the cement production process comesfrom the main raw material limestone, which is heated to 900°C and
Raw material-derived
Gas ﬂow+ energy-derived CO2
Raw material ﬂow
generates CO2 as it passes through the calciner (CaCO3 CaO + CO2).
Cementraw material
In a “CO2-capture calciner”, oxygen is used to aid combustion in place ofRaw material-derived CO2
Effective use of CO2(captured as concentrated CO2)
conventional air, allowing concentrated CO2 to be captured in a compact
Preheater
device. Furthermore, this technology can be used with existing preheaters andEnergy-derived
CO2
rotary kilns, maintaining high thermal efficiency and the use of recycled raw
CO2-capturematerials and fuels.
Methanation
calciner
Combustion-aiding
gas

Example2

EnergyBusiness Strategies

Rotary kiln

Low CO2 cement (CARBOFIX)

CO2 emissions

By developing the technology and production techniques that we have cultivated over the years to control the reactivity of
cement-based materials, we have developed CARBOFIX, a cement-based material that cures through a chemical reaction with CO2
and can mineralize the CO2. CARBOFIX is a cement that has been developed as part of the technology to mineralize and utilize theCO2 captured from cement kiln exhaust gas, and can be produced in existingrotary kilns in the same manner as Portland cement.
Reduction of ﬁring
energy-derived CO2 emissions
Firing
The production process of CARBOFIX has lower raw material-derived
Reduction of raw
energymaterial-derived CO2 emissions
and firing energy-derived CO2 emissions than ordinary Portland cement.
-derived
CO2 sequestration during
Furthermore, it is a material designed to maximize the effect of reducing total
the curing process
CO2 emissions as concrete by reacting with CO2 to cure and harden.
Rawmaterial
It is expected to be one of the innovative technologies that contributes
Total-derived
CO2
to the delivering of carbon neutrality, and going forward we will consider
emissions
initiatives for implementation in society.
Ordinary
Portland cement

CARBOFIX

29

Creating Value
Medium-Term Management Plan

2 Reconstructing the Overseas Business Portfolio

Managing Executive Officer
Senior General Manager
of International Business
Division

Yoshifumi Taura

We will reconstruct ourbusiness portfolio towards
maximizing our presence.
As well as expanding our business areas in Southeast Asia andthe U.S., where demand for cement is strong, we are proceedingwith regional business development.

30

Q: What are your basic thoughts about theoverseas business portfolio?

Q: What are the trends in the overseas
business portfolio?

The level of development in the U.S., China and Southeast
Asia differs in each region, but the most important thing when
expanding overseas is whether the Taiheiyo Cement Group candemonstrate its presence in the region. When expanding intoa developing country, the greatest expectation is placed on
the stable supply of high-quality cement and concrete, which
are basic materials for infrastructure, but as a country develops
the expectation of contributing to a recycling-based society
also increases. Our group possesses advanced technology
backed by our 140-year history, and our basic policy is todispatch personnel to a wide range of departments, including
management, production, equipment, sales and accounting,to ensure that the Mission of the Taiheiyo Cement Group isfirmly instilled and we can respond appropriately to a wide
range of needs. Generally, the world's cement majors aredemanding relatively short-term investment returns, and they
seem to be less involved in operations than we are, which I
think differentiates our group's overseas expansion. The levelsof development, political systems and country risks are notuniform, and there are probably many things that differ fromour plans, so we believe that it is essential to develop ouroverseas business in a flexible and mobile manner, such as
restructuring our overseas business portfolio in order to findthe best locations where we can demonstrate our presence.

In the past few years, we have been transferring ourbusiness area from China and Korea in East Asia to Southeast
Asia, in what could be called a southward shift. While on
the one hand we have sold our shareholdings in our Koreanequity-method affiliate in 2016 and our Chinese consolidated
subsidiary in 2020, we decided to form a capital and businessalliance with SI Group in 2021 and also to renovate TCPI's
production lines. Southeast Asia is experiencing remarkableeconomic development, and looking at per capita and total
cement use, we expect demand for cement to continue togrow. While we will continue to explore opportunities incountries and regions we have not yet entered, we intend
to make investments that will contribute to increasing our
production and supply capacity with the aim of gaining
more than 10% market share in the countries where wehave already established a presence, such as the Philippines
and Vietnam. The renovation of TCPI’s production line isproceeding and scheduled to start operation in May 2024,
increasing its cement production capacity to 3 million tons
per year. The country's cement demand is expected to grow to
50 million tons by 2030, and the plan is to invest in phases
to increase production and supply capacity to 5 million tons,
which is equivalent to a 10% market share. The Cebu regionis the second largest economic zone in the Philippines, but
we believe that expanding supply in Luzon, where the capital,
Manila, is located, is also essential in order to capture 10% of
the market share. We are considering not only the acquisitionof a cement production plant, but also a wide range of options
including construction of a terminal and enhancing ourlogistics network, in order to precisely capture the growing
demand.

Strengths of Taiheiyo Cement

Q: What initiatives are towards carbon
neutrality in the overseas business?

Risks and opportunities,
Materiality

Our group is committed to delivering carbon neutrality
by 2050. Around the world there are initiatives aimed atdelivering carbon neutrality in the cement industry, suchas using LNG for kiln firing and the penetration of blended
cement into the market, and we believe that CO2 emissions
reduction can be progressed by introducing production
technologies and new product types that are suitable forthese regions. We also believe that if we can commercialize
the "cement production process that captures CO2", which is
the innovative technology at the core of our carbon neutrality
efforts, we will be able to deliver carbon neutrality by
deploying the process to our overseas cement plants.

Value Creationin the Value Chain

We are conducting our U.S. business, which is the coreof our overseas cement business, through our consolidated
subsidiary CalPortland Company (in California). The company
has three plants in California and one in Arizona with a total
cement production capacity of approximately 5.5 million
tons, as well as 84 ready-mixed concrete plants in five west
coast states from Washington in the north to Arizona in thesouth, and is diversifying its operations to include aggregates,asphalt and construction. Although the profitability of our
U.S. business has improved to the point that nearly half of ourconsolidated operating income in FY2022 will come from our
U.S. business, we expect demand for cement to continue togrow as the west coast has lagged behind the east coast andcentral regions in their recovery from the 2008 global financial
crisis, and there are many areas with population growth due
to immigration and other factors. In March of this year, theTaiheiyo Cement Group agreed to acquire a portion of thecement and ready-mixed concrete business assets of Martin
Marietta Materials, Inc. (headquartered in North Carolina, U.S.)
located on the U.S. west coast, and in June we completed theacquisition of a cement plant with a production capacity of
approximately 500,000 tons, 14 ready-mixed concrete plants
and other facilities located in Northern California. In August of
this year, we also reached an agreement with Martin Marietta

Materials to acquire a cement plant in Southern California
with a production capacity of approximately 1 million tons,
and the acquisition is expected to be completed in early 2023.
It is difficult to make further acquisitions on the west coastin light of the competitive environment and other factors,
so we would like to consider investments in the central andsouthern regions of the U.S. which have a different industrial
structure in order to hedge against the risk of demand
fluctuation.

Value Creation Process

Q: What acquisitions of cement-related assets
have been made in the U.S.?

Medium-Term
Management Plan

Taiheiyo Cement's Global Network
Anchorage

US west coast
DalianNanjingHong Kong

Africa etc.

Hanoi
BangkokNghi Son

TaipeiTaichung
Kaohsiung

Nha Trang
Ho Chi Minh City

Singapore

Taiheiyo Cement Headquarters

JakartaSeattleRedding
Las Vegas
Stockton
MohaveTaiheiyo Cement U.S.A.
Oro Grande
Los Angeles
RillitoSan Diego

Overseas sites
Holding company
Representative office
Cement plant
Clinker grinding plant
Distribution terminal
Exports
Exports from Japan
Trilateral trade

Cebu

Taiheiyo Singapore

Business Strategies

Portland

Taiheiyo Cement (China) Investment

Lae

OceaniaSouth America (Chile etc.)

31Creating Value
Medium-Term Management Plan

3

Managing Executive Officer

Koshiro Hidaka

Strengthening plant facilities

We will modernize plantfacilities and production
management by 2030.
AI and IoT are being introduced to plant facilities to prevent
breakdowns and reduce labor demand.

Q: What is the background of the initiatives tostrengthen plant facilities?
The Taiheiyo Cement Group has nine cement plants
in operation in Japan with the average age of operation
approaching 60 years and the oldest plants being over
90 years old. Although continuous operation has been
maintained by expanding the frequency and scope of
preventive maintenance activities, metal fatigue and otherproblems associated with long-term operation are worsening
and the number of breakdowns caused by parts that were
not included in conventional periodic inspections haveincreased. We believe, as our company name suggests, thatthe production and sale of cement will continue to be thefoundation of our group, so we have decided to take radical
measures over the next decade, which includes the periodof the 23 Medium-Term Management Plan, including therenovation of principal equipment that we have been unable
to implement until now. Strengthening plant facilities will be
addressed through a three-pronged approach that includes
not only addressing aging facilities, but also modernizing
facility and production management by maximizing the use of
AI and IoT technologies, and further developing our engineers.

Q: What are the specific initiatives tostrengthen plant facilities?
In terms of addressing the aging facilities, we will
systematically renovate the principal parts of large equipment
such as kilns, dryer peripherals, large reduction drives, cargohandling equipment (loaders and unloaders), large motors
and trunk cables. By introducing the latest equipment,
rather than simply replacing the current equipment, we canfurther improve environmental performance, achieve energy
saving and reduce labor demand. In terms of environmental
considerations, we plan to improve maintenance efficiency by

32

replacing the electrostatic precipitators that process exhaustgas from cement kilns with bag filters, and introduce state-ofthe-art vertical mills that can simultaneously dry, grind andsort coal in the coal grinding process.

Q: What are the specific initiatives tomodernize facility management?
In terms of modernization of facility management, weare planning to use AI and IoT technologies to monitor thecondition of equipment at cement plants to improve theaccuracy of life expectancy predictions. The Kumagaya Plant
is currently undergoing demonstration testing as a model
plant, in which vibration, pressure, temperature, soundand other data is measured and collected by sensors andfixed-point cameras installed throughout the plant, andcentrally managed via a network installed in the plant; thecollected data is analyzed by AI to improve the accuracy ofdetection of signs of breakdown and end of service life. The
analysis of historical data has already verified that predictive
diagnosis is possible. We will expand the use of drones
to enable continuous data acquisition and multi-faceted
analysis. Although the plant is currently being operated ona visual basis due to legal restrictions, we have confirmedthat the system is sufficiently accurate to detect an anomaly
of about 1mm in the kiln roller. In the future, we plan toinstall communication infrastructure at plants other thanthe Kumagaya Plant and finish upgrading the facility
management systems of six domestic plants under our directcontrol by the end of FY2027.

Q: What are the specific initiatives tomodernize production management?
Currently, each plant works in three shifts, with one milloperator and one kiln operator in principle assigned to theValue Creation Process

Training Center (TCPI)

Value Creationin the Value Chain
Risks and opportunities,
Materiality

Q: Could you please describe the further
development of engineers?

Central control room (Kamiiso Plant)

Medium-Term
Management Plan
Business Strategies

As I mentioned, we have been experiencing
breakdowns that are difficult to detect, but I believeanother factor in addition to the aging facilities is the
rapid generational change due to the retirement ofexperienced inspectors and operators, as well as theshortage of employees aged in their 30s and early
40s. While there is a significant expectation that the
shortage can be alleviated by the introduction of AI
and IoT technologies, we believe there is an urgent
need to train engineers. We have established "Techno
Schools" for mid-career engineers at each plant tointensively learn specialized knowledge related
to cement production, and “Maintenance Dojo”
where facility maintenance skills are learnt with thetraining of engineers at contractors in mind, while
overseas, seminars are being offered at TCPI for thesame purpose of training engineers. As a place to put
techniques into practice, we are actively dispatching
young engineers to the renovation of TCPI's
production line in order for them to gain experience.
In this way, we are steadily developing our engineers
by resolutely passing on and further enhancing thetechniques we have inherited from our predecessors.

Strengths of Taiheiyo Cement

cement production process. These operators diagnose
phenomena and changes in the system based onchanges in process data in order to ensure stableproduction. In this regard, we are progressing theuse of AI and IoT technologies to minimize the workof operators, with the ultimate goal of establishinga remote support system via remote operation fromthe headquarters, initially for domestic plants andthen eventually overseas plants. Since FY2020, we
have been developing an operation support system toreduce the workload of operators using the Kamiiso
Plant as a model plant. Automation has already beenachieved for the majority of operator tasks and wehave confirmed a reduction in workload. In the future,
we aim to achieve fully automated operation of thecement plants by having AI learn from the operational
and process data we have accumulated until now,and we also expect to eventually achieve unmanned
operation of the cement plants.

Modernization of facility management(drone photography of cement production facilities at the Kumagaya Plant)33

Creating Value
Medium-Term Management Plan

Vice President and Director

Kunihiro Ando4

Quarry Development

We will continue quarry
development to securelong-term resources.
We will secure limestone resources by developing new quarries
and optimizing the supply chain according to our quality
requirements in order to secure long-term stable supply.

Q: What is the need for quarry development?
Currently, there are 11 limestone quarries operated by
The Taiheiyo Cement Group in Japan, and a total of about 40
million tonnes of limestone is quarried annually. Limestoneis also used in industries other than cement, such as steel
and chemicals, and it is one of the few natural resources
for which the required volume can be sourced from within
Japan alone. But supplies will gradually decrease if we do notcontinue to secure exploitable reserves. On the other hand,the conditions placed on quarry development are becoming
stricter each year, and it takes about ten years to commence
quarrying even if you own the quarrying rights. Therefore,
quarry development must be carried out with a view several
decades into the future. Supply from the Horoshi area of
Ofunato Quarry began in April 2021, but this quarry also took
more than 10 years to develop. This development has secured
sufficient limestone for 100 years’ cement production at the
Ofunato Plant.
Since our core business is the production and sale ofcement, we have decided to invest 100 billion yen in quarry
enhancement over the 10-year period until 2030 and toprogress quarry development with a medium- to long-term
perspective.

Q: What are the specifics of the ten-year
investment in quarry development?
At the core of the plan is the development of the Yato areaof the Shin-Tsukumi Quarry, which will be the next quarry
to supply raw material to the Oita Plant, our group’s largest
cement plant. This will ensure that the Oita Plant has enoughlimestone for cement production for 100 years. Development
is in progress with the aim of starting supply in FY2030,
and a review of limestone customers is also underway. In
addition to raw materials for cement, the Shin-Tsukumi
Quarry currently in operation is also supplying limestone for34

use in steel, chemicals and ready-mixed concrete, but after
the development of the Yato area is completed, we plan toconsolidate the supply of minerals for steel and chemical usesfrom other limestone quarries in our group. For limestone
used as aggregate in ready-mixed concrete, we completed
an aggregate washing plant last year in anticipation of anincrease in supply from the Yato area. Although limestone issaid to be a resource for which Japan can be self-sufficient, we
believe that by building an optimal supply chain that matches
the quality of the limestone produced, we can make more
effective use of the resources and thereby realize long-term
stable supply.

Q: What are the initiatives toward carbon
neutrality?
We are promoting the installation of various energy-saving
equipment at our quarries to reduce the CO2 emissions
from the diesel oil that fuels the quarry equipment andthe electricity that powers the plant, in order to achieve thetargets set in the carbon neutrality action plan. Specifically,
when replacing heavy equipment such as dump trucks andloaders, we select models with high fuel efficiency and,
when renovating plant equipment, we introduce eco-belts
with high energy-saving performance, including energy
recovery. Furthermore, we are promoting the introduction of‘top-runner’ transformers and motors. Going forward, we willcontribute further to delivering carbon neutrality of the groupby expanding the scope of application of investment decisions
based on internal carbon pricing.

Q: What are the initiatives you are focusing on
outside of quarry development?
When quarrying limestone, forests are cleared, topsoil is
excavated and the limestone ore is extracted, which inevitably
affects the environment and ecosystem of the quarry’s area.

Value Creation Process

For this reason, we are striving to quickly revegetate the
excavation faces of not only former quarry sites but also
operating quarries, and are also working to preserve theenvironment, including vegetation, the ecosystem and water
resources. For rare species that are identified as requiringconservation during environmental impact assessment, efforts
are being made to conserve them through the installationof protection facilities, transplantation and restrictions on
development. We strive to minimize negative environmental
impacts resulting from the development and operation of ourquarries, not only by preventing pollution from the quarrying,
but also by conserving biodiversity and water resources.

Strengths of Taiheiyo Cement
Value Creationin the Value Chain

Ofunato Quarry at the Horoshi area

Risks and opportunities,
Materiality

Quarry site Greening (Buko Quarry)

Medium-Term
Management Plan

Aggregate classification plant (Shin-Tsukumi Quarry)

Business Strategies

Shin-Tsukumi Quarry (panoramic view)35

Creating Value
Medium-Term Management Plan

5 Enhancing Management Foundations - Human Capital
Directorand Senior Executive Officer

Tetsuya Ohashi

We will secure and develop humanresources and create a more
supportive workplace for employees
in order to be a corporate groupthat continues to grow.
We are working to create an environment in which all employees
can work with vitality and thoroughly demonstrate their abilities.

36

Q: What is your approach to human resources?

Q: What is your recruitment policy?

As the environment surrounding our company is constantly
changing through digitalization, globalization, the declining
birthrate, aging population and other challenges such as
the COVID-19 pandemic, the importance of "human capitalmanagement" is increasing.
We view human resources as "capital" and believe that
increasing the value of individuals by investing in people willlead to medium- and long-term improvements in corporate
value. We are deploying initiatives that are conscious of thelink between management strategy and human resource
strategy, including the building of a human resource portfoliothat can respond to changes in the environment and securing
and training human resources that can create added value.
In recent years, employee engagement has become anecessary element of human resource strategy in particular,
and in order to enhance engagement it is necessary to alignthe direction of growth that the company and employees
each aspire to. Our management is sending out messages
to employees to inform them about the aims of the various
measures promoted by the company.
Our basic policy for promoting diversity is to promote
innovation aimed at further improvement of corporate
value and based on the ideas and values of diverse humanresources. We are also working to promote “work-life
management” to improve retention and productivity andhelp each employee realise fulfilment in both their work andprivate life.
While the relationship between companies and employees
is expected to change towards more equality due to labor
shortages caused by the declining birthrate and aging
population, as well as changes in work attitudes, we willcontinue to focus on efforts to achieve human capitalmanagement based on respect for human rights.

We have established a basic recruitment policy that takes
into account our management strategy and labor structure.
It is aimed at securing personnel who can strengthen theearnings base of our existing businesses and steadily
implement our growth strategy.
Regarding our labor structure in particular, as a resultof limited recruitment in the past, the lack of mid-career
personnel in their 30s and 40s has become noticeable, andwe are working hard to recruit mid-career personnel in parallelwith new graduates.
In recent years, individual attitudes and needs regarding
work styles have become more diverse, as seen in the change
in attitude towards relocation, so we are flexibly expanding
our recruitment of area-limited positions, in addition topositions which do not have restrictions on relocation(including overseas).
Based on the idea of accepting these diverse values andpersonalities, our individual recruitment policies include
increasing the ratio of female employees, and actively
recruiting international students and people with disabilities.

Q: C ould you please describe your humanresource development?
We have made the growth of the "individual" a pillar of
our human resource strategy, and we are developing humanresources to maximize the potential of each individual.
Conversely, if the organization is not invigorated thenthe sustainable development of the company cannot be
expected. Having each employee feel a sense of proactive
and autonomous growth in their career invigorates theorganization and also leads to individual job satisfaction.
Human resource development is based upon on-thejob training to improve skills, and the Human Resources
Department conducts training for each job level of employees

Risks and opportunities,
Materiality

Medium-Term
Management Plan
Business Strategies

Q: What are the initiatives toward Health andProductivity Management (H&PM)?

We recognize that respect for human rights and diversity
is a principle for the formation of a sustainable society. In thisregard, we formulated our Basic Policy Concerning Human
Rights and Labor Practices in April 2015, which takes into
consideration matters including the Universal Declaration of
Human Rights and the labor standards of the International
Labor Organization.
Under this policy, we have established Standards ofConduct to serve as a code of conduct for each employee,
and we are committed to respecting the human rights of not
only our employees but all people involved in our businessactivities. We are conducting training on an ongoing basison the theme of human rights and diversity during job levelspecific training and training for the top management level ofgroup companies. During Human Rights Week we also ask our
employees and their families, including those of our partnercompanies, to submit human rights awareness slogans in aneffort to promote human rights awareness.
Furthermore, we are striving to create a brighter workplaceby having a human rights awareness promotion committee
member and a harassment consultation counselor at eachbusiness site who conduct awareness-raising activities andprovide consultation services to prevent harassment.

Value Creationin the Value Chain

We are promoting work-life management to improve
productivity and build an organization that maximizes thecapabilities of our diverse workforce. We are progressing withthe design of a system that achieves flexible working styles
which allow employees to autonomously control their workand life - for example, a shortened working hour system for
employees who are raising children aged up to elementary
school age or are providing nursing care to a family member.
In addition, we have a personnel management system that
divides employees in area-specific positions and non-areaspecific positions into separate tracks, and the system allows
employees to change between tracks in accordance with life
events such as marriage, childcare and nursing care. We willcontinue our efforts to create a workplace where employees
can balance their work and life.

Q: What are the initiatives regarding respectfor human rights and diversity?

Strengths of Taiheiyo Cement

Q: How is work-life management promoted?

measures, verifying their effectiveness, and reflecting theresults in measures for the next fiscal year.
In FY2023, we are particularly focusing on measures toprevent lifestyle-related diseases. Based on the data fromhealth checkups, we are monitoring the state of healthof employees overall, providing information on lifestyle
improvement through the company intranet, etc., andfocusing on planning participatory events. We will continue
our efforts to maintain and improve the health of ouremployees and their families, centered on the Human Rights& Labor Practices Committee under the Health-Conscious
Management Declaration and in cooperation with the Taiheiyo
Cement Health Insurance Association and the Taiheiyo Cement
Labor Union.

Value Creation Processwith the objective of enhancing the skills and mindset
that are common to all departments. In order to foster amindset that forms the basis of a businessperson, we placeparticular emphasis on the achievement of goals related tothe approach to work for young employees in their first three
years of employment, and use a check sheet to alternately
conduct self-evaluations and supervisor evaluations of theirprogress. This check sheet is expected to have the effect ofactivating communication with supervisors and building a
relationship of trust, and as it is also used as teaching material
in subsequent job level-specific training, we intend to achievea synergistic effect in combination with OFFJT.
As part of our promotion of diversity, we also provide
training to develop the next generation of female leaders. The
training is for the broad generation from first-year employees
to those at the level just before joining management, with acurriculum that is designed to increase awareness in stages.
The training is offered on a voluntary (nomination) basis sothat participants can take the course independently and attheir own timing.

We have been promoting employee health management
since FY2019 and in September 2022 revised the Health–
Conscious Management Declaration with the aim of further
promoting the health of employees and their families, andcreating a rewarding workplace. The President is the chief
health management officer under the Health-Conscious
Management Declaration, with the Human Rights & Labor
Practices Committee, a subcommittee of the CSR Management
Committee under the direct control of the Board of Directors,
playing a central role. Specifically, we are advancing H&PM
through the PDCA cycle, which includes establishing a healthmanagement activity plan for each fiscal year, implementing
Practical training for job level-specific training

37

Creating Value
Medium-Term Management Plan

6
Directorand Senior Executive Officer

Tetsuya Ohashi

Digital Technology “DX” Promotion

We will continue to provide
stable and sustainable products
and contribute to building safe
and secure social infrastructure.
By positioning DX as one of the key drivers of our growth strategy, we
will promote stable production through advanced automatic control andautomation of production processes using digital technology, as well as
promote management from a new perspective, improve operations andenhance services such as information provision to customers.

Establishment of the “DX Promotion Team”

The "DX Promotion Team" was established in June 2022 under the leadership of the director
in charge of the Corporate Planning Department. The DX Promotion Team aims for the early
realization of company-wide DX by working as a company-wide lateral organization on digitaltransformation, which until now has been promoted separately by each business division.

BackgroundAs the development of unprecedented business models using
digital technology, collectively referred to as DX, accelerates
across all industries, it is important for us to speedily advance our
DX in order to maintain and enhance our competitiveness.
We have formulated the 23 Medium-Term Management Plan
as the final step to achieving "our future vision and direction"
for the mid-2020s. The basic policy is to "become a corporategroup that never stops moving forward", "being part of the social
infrastructure industry, contributing to the establishment of asafe and stable society" and "enhance our earnings foundationand steadily carry our growth investment”. We believe that DX
promotion will be a key driver of this.

Purpose of the DX Promotion TeamThe "DX Promotion Team" was established in June 2022
to promote DX speedily across the company. In addition topromoting DX as a company-wide initiative in each of the group'sbusinesses, we will also materialize the provision of new services
that make maximum use of digital technology.

and optimization of the allocation of cement distribution
vessels through AI, the team will also identify new issues to beaddressed.
The DX Promotion Team will consider the use of effective IT
tools to solve issues and the provision of services in order tocontribute to the steady implementation of the 23 Medium-Term
Management Plan. Through these efforts, the team will also
focus on further deepening systems that support flexible work
styles, such as work style reform and the training of DX humanresources.

Composition of the DX Promotion Team
LeaderDirector in charge of the Corporate Planning
Department

Standing
members

One or two persons each from the Cement
Business Division, Mineral Resources
Business Dept., Environmental Business
Development Dept., Production Dept.,
Maintenance & Engineering Dept., Mining
Dept., Construction Materials Business
Dept., Business Planning and Administration
Dept., Central Research Laboratory, Human
Resources Dept. and General Affairs Dept.

Secretariat

Corporate Planning Department (InformationTechnology Planning Group)

Role of the DX Promotion TeamIn addition to advancing efforts to realize measuresthat have been promoted in each business division, suchas the restructuring of business systems, development ofcommunication infrastructure, strengthening of plant facilities
and quarry development, realization of the smart factory concept,

38

Value Creation Process

DX Promotion Initiatives

Strengths of Taiheiyo Cement

Contributing as a key driverof the 23 Medium-Term
Management Plan throughcompany-wide DX initiatives

Utilization of the Latest Technology

Risks and opportunities,
MaterialityE stablishment of an information sharing platform with group companies to create group synergy
and resolve issues
Provision of an electronic transaction system through a web portal site for business partners
Cultivation of "DX human resources" with both business knowledge and advanced digital skills

Value Creationin the Value Chain

Digital Infrastructure Development

A dvanced facility maintenance through operation monitoring of cement
production facilities using AI and IoT technologies
Rapid detection of facility abnormalities through periodic inspection of cement
production facilities using drones
Development of a remote support system for cement production facility operation
AI learning aimed at fully automated operation of cement production facilities
 Improved operational efficiency and optimization of logistics by using AI in ship
allocation planning
Development of a slump forecasting system using AI image recognition in
concrete production

Medium-Term
Management Plan

Key Strategy 1

Initiatives toward carbon neutrality

Key Strategy 2

Reconstructing the overseas business portfolio

Key Strategy 3

Strengthening plant facilities

Key Strategy 4

Quarry development

Key Strategy 5

Enhancing management foundations - human capital

Key Strategy 6

DX promotion

Business Strategies

Contribution to SDGs targets in the key strategies of the 23 Medium-Term Management Plan

39

Creating Value

Key Business Strategy Themes
We aim to successfully tackle these three businessstrategy themes while leveraging the strengths ofour business divisions and R&D.

1

Contributing to
National Resilience

The increase in the number and severity of natural disasters iscreating challenges across society social structures to formulate
measures to prevent disasters and mitigate damage. We willcontribute to national resilience by further enhancing thestable supply of cement and other construction materials inorder to enhance infrastructure and support speedy recovery
after a disaster.

Cement Business 
Mineral Resources Business Construction Materials Business 
Research and Development 

2

P.42
P.46
P.50
P.52

Contributing to the Creation of a
Recycling-based Society

In addition to utilizing industrial waste, industrial by-products,
municipal waste and incineration ash as raw materials andfuels for cement production, the Taiheiyo Cement Group has
recently been expanding initiatives to utilize disaster waste.
Going forward, we will apply and develop the expertise andtechnologies we have cultivated so that we can contribute to
the creation of a recycling-based society and the resolution ofsocial issues.

Cement Business 
Mineral Resources Business Environmental Business 
Research and Development 

3

P.42
P.46
P.48
P.52

Delivering Carbon Neutrality

The Taiheiyo Cement Group views the reduction of CO2
emissions as an opportunity to boost our corporate value. We
will expand our efforts to efficiently replace fossil fuels withalternative energy derived from waste, promote technologicalprogress in such areas as the development of low-CO2 cement
and innovative technologies for CO2 capture, storage andutilization, toward carbon neutrality.

Cement Business Environmental Business 
Research and Development 

40

P.42
P.48
P.52

Value Creation Process

Strengths of Taiheiyo Cement

Value Creationin the Value Chain

Risks and opportunities,
Materiality

Medium-Term
Management Plan

Business Strategies

41

Complete recovery of the Ofunato Plant from the Great East Japan Earthquake (June 2021)

Creating Value

Cement Business (Japan)
We aim to quickly recover businessprofit, which is a cornerstone ofsustainable development.

Director and Senior Executive Officer
Senior General Manager of Cement Business Division

Yukimasa Nakano

23 Medium-Term Management Plan Strategies
Enhance our earnings base-M
 obilize comprehensive group strengths (manufacturing, sales and logistics
capabilities), and contribute to national projects.
- F ormulate sales strategies suitable for the characteristics of each region- Employ efficient transportation

Strengthen plant facilities- Maintain a stable supply system by upgrading key equipment- Improve labor productivity by making full use of AI and the IoT

Initiatives toward carbon neutrality-D evelop and expand technologies to reduce environmental impact and CO2
emissions

Net sales*

FY2021Results
406.2

Operating income

FY2024Plan
267

billion yen

FY2021Results
16.2

billion yen

Based on a solid foundation for manufacturing, transportationand supply, our cement business in Japan reliably provides
cement and ready-mixed concrete to users nationwide. As well as
expanding our product lineup that includes special cements andcement-based soil stabilizers, we are building a sales system that
can accurately respond to changes in construction methods andthe diverse needs of users, such as by deploying user meeting
activities for each industry.
In the environment surrounding this business, profitability
has deteriorated due to the continuing decline in demand for
cement caused by the stagnation of work at construction sites
due to the prolonged COVID-19 pandemic, as well as further
sharp rises in coal prices following Russia's invasion of Ukraine.
We decided to raise the prices of cement and cement-based soil
stabilizers by 2,000 yen per tonne for shipments from January ofthis year, but we have determined that we are in a situation where
we cannot secure appropriate profits without passing on costs
further. So, we will once again revise our prices for shipmentsfrom October 2022 in the form of either a "coal price surcharge"
or a "fixed price revision". Since we are planning to make major
investments to develop our quarries and plants, and develop
technologies to deliver carbon neutrality by 2030, funded mainly
by operating cash flow, price revisions and cost reductions are themost important issues for us. In addition, we will also promotelabor productivity improvements through the use of AI and IoT,
as well as the development and deployment of technologies toreduce environmental burdens and CO2 emissions.

FY2024Plan
23.5

billion yen

billion yen* Since we have adopted the Accounting Standard for Revenue Recognition (ASBJ Standard
No. 29) etc. from FY2022, the net sales in the FY2024 plan show the amount after
adoption of the new standard. (The adoption of the new standard has a negative impact of-185 billion yen.)

FY2022 Achievements
Net Sales and Operating Income
Net sales (left axis)(Billions of yen)

Operating income (right axis)(Billions of yen)

600

30
434.8

400

21.4

200

415.1
16.6

406.2
16.2

*

237.4

20

286.0

10

0

0

-1.8

–200
–400

–10
-16.0

2018

2019

2020

2021

2022

(Forecast)

(FY)

–20

* Of the 168.7 billion yen decrease in net sales for FY2022, 175.2 billion yen is due to theapplication of the above-mentioned Accounting Standard for Revenue Recognition.

42

Regarding private sector demand, construction work was delayed
due to the prolonged COVID-19 pandemic and stagnant tourism-related
investment such as hotels and transportation. In the public sector, risingmaterial prices and labor costs have impacted both tendering opportunities
and the success of tenders. Due to this, domestic demand for cement
was 37.88 million tonnes (a 2.0% decrease on the preceding fiscal year).
Including consignment sales, the Taiheiyo Cement Group sold 13.36 million
tonnes of cement in Japan (a 3.0% decrease on the preceding fiscal year).
As a result of the above, net sales were 237.4 billion yen (a decrease of
168.7 billion yen on the previous fiscal year*) and operating income was-1.8 billion yen (a decrease of 18 billion yen on the previous fiscal year).
In response to soaring coal prices and other production cost increases, we
decided to raise our prices by 2,000 yen per tonne for shipments beginning
in January 2022.
Despite such business circumstances, we completed the replacement of
the EP (Electrostatic Precipitator) with bag filters at Kamiiso Plant Kiln No. 7
and our group company DC Co., Ltd., and our group company Myojo Cement
Co., Ltd. expanded its chlorine bypass facilities to increase its waste andby-product processing capacity.

1. Sales- Steady price revisions to secure business profit- Boost our presence in the domestic distribution market- Improve our system to supply special products to meetcustomer needs- Promote substantial action to provide customer support- Provide solutions that match the local situation

3. Improve technical marketing and quality assurance work
- Respond positively to change in the precast concrete
products market.

4. Secure more large-project orders- P romote the marketing of solutions that leverage the combined
capabilities of Taiheiyo Cement and our group companies

5. Develop our soil stabilizers business- Proactively engage with new applications and methods- Develop and promote high-performance products

Efforts to Address Social Issues

Relevant SDGs

Opportunities

New demand created by a commitment to national resilienceand development of advanced infrastructure
Development of innovative technology for utilizing CO2

Risks and opportunities,
Materiality

Reduced domestic demand due to declining birth rates
and an aging population
Reinforcement of regulations on GHG emissions

Value Creationin the Value Chain

Stable supply of cement products
Mitigate and adapt to climate change
Further contributions to a recycling-based society
Risks

Strengths of Taiheiyo Cement

2. Ready-mixed concrete

Value Creation Process

Key Strategies for FY2023

Stable Supply System and Optimization of Distribution
Medium-Term
Management Plan

Business Strategies

Our Cement Business (Japan) provides a stable supply of our products via our robust manufacturing, transportation and supply
chain infrastructure that includes 9 cement plants, 106 service stations (distribution sites), and 35 cement tankers. In the 23
Medium Term Management Plan, we aim to enhance our aging facilities and also pursue efficient transportation by upgrading
our production and equipment management systems using AI and IoT technologies. Until now, transportation planning has reliedheavily on the experience of the planner in the allocation of both ships and trucks, but we believe that the introduction of AI will
enable more efficient logistics planning thereby reducing fuel consumption and optimizing distribution.
For marine transportation, we are developing a ship allocation simulator that employs AI to learn logistics variables suchas tanker locations, factory and service station inventories and weather conditions to plan ship allocation. AI allows immediate
calculation and ranking of tens of combinations, whereas a person can only think of two or three. The system will select the most
optimal plan and make minor adjustments to it, and we plan for
its implementation by FY2024.
For land transportation, we are progressing with our plan tocustomize and utilize a commercially available AI dispatchingsystem. After introducing the system to group companies on a
trial basis, we aim to begin operating the system in the Tokyo andKanto branch offices during FY2023.
As a leading company, our aim is to maintain a stable supply
system and optimize distribution in order to deliver safety
and security to society and contribute to the formation of asustainable society.

Our coastal cement tanker, Hokuyumaru

43

Creating Value

Cement Business (Overseas)
We aim to achieve the sustainable
development of our group by
expanding our business area.

Managing Executive Officer
Senior General Manager of International Business Division

Yoshifumi Taura

23 Medium-Term Management Plan Strategies
Sustained growth investment- C reate business expansion in Southeast Asia and the US, and construct the
optimum logistics network

Enhance our earnings base- P romote our Mineral Resources, Environmental and Construction Materials
businesses overseas- Implement further cost cuts

Initiatives toward carbon neutrality- Implement initiatives toward CO2 reductions

Net sales*

FY2021Results
214.8

Operating income

FY2024Plan
218

billion yen

FY2021Results
25.1

billion yen

FY2024Plan
28.4

billion yen

billion yen* The adoption as of FY2022 of the Accounting Standard for Revenue Recognition (ASBJ
Standard No. 29) has had no impact on the net sales in the FY2024 plan.

In the overseas cement business, we produce and sell cement
at nine plants in the Pacific Rim, including four on the west coastof the United States, two in China, and one each in Vietnam, thePhilippines, and Papua New Guinea. In addition to this, we aredeveloping a variety of other businesses, including the exportof cement and clinker from Japan and trilateral trade, as well as
increasing our handling of bulk materials.
Impacts such as higher cement production costs due tosoaring coal, electricity and other energy prices, and stagnation of
construction work due to the lockdowns caused by the COVID-19
pandemic, were seen in Southeast Asia and China. On the other
hand, in the U.S., the core of our group's overseas business, wewere largely unaffected by price fluctuations due to our use of
local coal, and we have been able to continue to increase revenue
and profit by passing on the higher electricity and other costs tocustomers against a backdrop of strong demand. Under these
positive business circumstances, and since the U.S. is identified
as the best location for growth investments in our 23 Medium
Term Management Plan, in June of this year we completed theacquisition of a cement plant in Northern California and othercement business-related assets from Martin Marietta Materials,
and in August we agreed to acquire Martin Marietta Materials'
cement plant and other assets in Southern California. In addition,
the renovation of TCPI's production line is progressing as planned
towards operation in May 2024, and synergies from investments
decided in the 20 Medium Term Management Plan are steadily
emerging, including the start of clinker supply to TCPI from SI
Group, with whom we have entered into a capital and businessalliance.
To deliver carbon neutrality, we will promote energy
conservation at each site and steadily deploy innovativetechnologies for CO2 capture in the cement production processthat we are developing to our overseas cement plants .

FY2022 Achievements
Net Sales and Operating Income
Net sales (left axis)(Billions of yen)

Operating income (right axis)

300

*

211.6

200
100

50

312.0

300
200

(Billions of yen)

20.3

213.2
19.8

214.8
25.1

225.7
*

40
30.8

26.0

20

100

10

50
0

2018

2019

2020

2021

2022

(Forecast)(FY)* The adoption of the Accounting Standard for Revenue Recognition has had no impact.

44

30

0

In the U.S., both sales volume and prices exceeded those of the previous
fiscal year on the back of robust housing demand. In China, the sales volume
was lower than the previous year due to the impact of restricted production
caused by power shortages resulting from the soaring coal prices. In thePhilippines and Vietnam, our sales volume was lower than the previous year
due to further waves of COVID-19 infection and social distancing measures.
As a result of the above, net sales were 225.7 billion yen (an increase of 10.8
billion yen on the previous fiscal year) and operating income was 26 billion
yen (an increase of 900 million yen on the previous fiscal year).
Under this business environment, we completed our investment in the
SI Group and began renovation work on TCPI’s production line. As a growthinvestment under the 23 Medium Term Management Plan, we agreed
to acquire cement-related assets, including a cement plant in Northern
California (with an option for the acquisition of a cement plant in Southern
California and other assets).

1. Boost profitability of existing businesses

Efforts to Address Social Issues(4) Philippines - Steadily carry out work to renovate the production base- C reate a 3 million tonne sales system ready for when
production capacity has been enhanced

2. Expand and increase the sophistication of our trading business- Boost our bargaining power in the international market- Expand our bulk materials business3. Implement initiatives to rebuild our business portfolio- Create an optimal logistics network incorporating Indonesia- F urther business expansion in Southeast Asian countries such as
Indonesia and the Philippines

Relevant SDGs

Opportunities

Contribution to creating a recycling-based society
in our host countries
Provision of innovative technologies for utilizing CO2

Acquisition of cement-related assets in the U.S. toward expanding our business areaand building an optimal logistics network

Medium-Term
Management Plan

Business Strategies

In the United States, the core of our overseas cement business, we are developing our cement, ready-mixed concrete andaggregate businesses through CalPortland, mainly in the five West Coast states of Washington, Oregon, California, Arizona and
Nevada. Of these, California, the state we are most focused on, is the largest in the U.S. in terms of both population and economic
scale, and ranks fifth in the world in terms of GDP behind the U.S., China, Japan and Germany. California’s cement demandaccounts for about 10% of the total demand in the U.S., and is expected to grow in the medium to long term due to the increase in
housing demand and infrastructure development in line with population growth, as well as the upcoming Los Angeles Olympics
and Paralympics in 2028.
In June of this year, we acquired a portion of the cement and ready-mixed concrete business assets owned by Martin Marietta
Materials, Inc. on the U.S. west coast, including its Redding plant, in order to expand our supply capacity while maintaining stable
operations at our three existing cement plants so that we can steadily capture the growing demand. Then in August, we alsoreached an agreement to acquire a cement plant in Southern California with a production capacity of approximately 1 million tons
and other assets, which is expected to be completed in early 2023.
The Redding plant will be a valuable production and supply base innorthern California, a location where our group has not had such a presence
until now. The acquisition of the ready-mixed concrete business is expected
to make a steady contribution to earnings and enhance the company's
competitiveness in securing cement customers. In addition, we expect toreduce energy costs by improving the efficiency of the Redding plant’s
operations, as well as reducing logistics costs by optimizing distributionthat includes the newly acquired cement terminal and our existing cement
plants., and will further address global warming countermeasures with ourplanning to focus on the limestone-rich cement production that aims for low
CO2 emissions along with logistics optimization.

Risks and opportunities,
Materiality

Tightened environmental regulations in host countries
Global climate change

Value Creationin the Value ChainContribution to infrastructure improvement
Mitigation and adaptation to climate change
Contribution to creating a recycling-based society
Risks

Strengths of Taiheiyo Cement(1) USA- Construct an optimal production and logistics portfolio- Meet increased demand by maximizing plant production andsecuring import sources by leveraging our global network(2) China- Introduce green products to respond to the tightening of
regulations and contribute to waste treatment- P romote our Environmental Business and seek out new business(3) Vietnam- Expand our market share by differentiating ourselvesfrom other companies through expanding our logistics bases
and diversifying our products- Boost our competitiveness by cutting production costs throughenergy-saving investment and via waste treatment

Value Creation Process

Key Strategies for FY2023

CalPortland Redding Plant

45

Creating Value

Mineral Resources BusinessWe aim to achieve sustainable
development by securing a centurylong stable supply.

Vice President and Director

Kunihiro Ando
23 Medium-Term Management Plan Strategies
Quarry development-Q uarry development to establish foundation that enable us to ensure a longterm stable supply of mineral resources

Enhance our earnings base

- Enhance and promote limestone aggregate production and distribution facilities- Reconstruct our production and sales system targeting steel and paper manufacturing- Open up new markets for our heavy metal immobilizer (DENITE)- Accelerate commercialization of our functional hollow particles (CellSpheres)

Sustained growth investment- Implement growth investment in the Southeast Asia region

Net sales*

FY2021Results
75.7

Operating income

FY2024Plan
82billion yen

FY2021Results
6.0

billion yen

FY2024Plan
9.5

billion yen

In addition to our main businesses of handling aggregatesfor ready-mixed concrete plants and mineral products for steel
and chemical manufacturers, the Mineral Resources Business isalso engaged in developing our geo-solutions business that is
involved in processing construction soil and contaminated soil, as
well as the sale of new products developed by the Group, such asfunctional hollow particles and ultra-pure silicon carbide (SiC).
Our business is founded upon quarries that we own andcentered around 11 limestone quarries in Japan, but as thequality and characteristics of minerals vary from location
to location, we are focusing on building and reviewing an
optimal supply system from the perspective of reducing theenvironmental impact. We are currently developing the Yato areaof Shin-Tsukumi Quarry in order to start supplying raw limestonematerial for cement to the Oita Plant in 2029, but in December
last year we constructed an aggregate classification  plant sothat limestone quarried from the area can also be supplied as
aggregate for ready-mixed concrete plants, in addition to as raw
material for cement. The Shin-Tsukumi Quarry has also been
supplying limestone as a mineral product to steel and chemical
manufacturers, but in view of the characteristics of the limestone
from the Yato area, in parallel with the development we arealso restructuring our logistics system and other aspects of ouroperations in order to transfer supply from other quarries within
the Group. In addition, we are constructing a shipping yard in
the Sodegaura area in Chiba Prefecture so that we can steadily
address the growing demand for limestone aggregates in theTokyo metropolitan area.

billion yen* Since we have adopted the Accounting Standard for Revenue Recognition (ASBJ
Standard No. 29) from FY2022, the net sales in the FY2024 plan show the amount after
adoption of the new standard. (The adoption of the new standard has a negative impactof -4 billion yen.)

FY2022 Achievements
Net Sales and Operating Income
Net sales (left axis)(Billions of yen)

Operating income (right axis)

100
84.2
80
60

80.1

75.7

77.1
*

(Billions of yen)

15.0
85.0

12.5
10.0

8.2

7.1

40

6.0

6.0

5.2

20
0

5.0
2.5

2018

2019

2020

2021

2022

(Forecast)(FY)* Of the 1.4 billion yen increase in net sales for FY2022, -2.0 billion yen is due to theapplication of the above-mentioned Accounting Standard for Revenue Recognition.

46

7.5

0

In the aggregates business, our sales volume declined in the Kanto
and Tohoku regions due to the completion of disaster restoration work,
despite an increase in demand due to the resumption of redevelopment
work in central Tokyo. The sales volume of limestone for steel, the mainstay
of our mineral products business, increased due to a recovery in crude
steel production. Our geo-solutions business exceeded the previous year's
level due to an increase in transactions for construction soil generated
from construction sites such as tunnels and land development projects. As
a result, we posted net sales of 77.1 billion yen (an increase of 1.4 billion
yen on the previous fiscal year) and operating income of 6 billion yen (anincrease of 300 million yen on the previous fiscal year).
Under these business circumstances, we have concluded an agreementwith Usuki City regarding quarry development in order to progress thedevelopment of the Yato area of Shin-Tsukumi Quarry, which will be the next
source of limestone for the Oita Plant. We also completed a demonstration
plant for “Nanolitia”, a lithium-ion battery cathode material, at our Central
Research Laboratory.

1. Establish the foundations to ensure a long-term stablesupply of our mineral resources- Review, plan and implement mine and quarry redevelopment- Fully leveraging our mineral resources

2. Expand the earnings of our existing core businesses that
demonstrate the group’s overall capabilities

Efforts to Address Social Issues(2) Mineral products business-D evelop optimal production systems that match changes inthose of our steelmaking customers(3) Geo-solutions business- E xpand our sales volume by boosting the inclusion of ourheavy metal immobilizer in the planning for major projects,
and securing regular sales customers.

3. Nurture future key businesses that enable sustainable growth- C ommercialize our functional hollow particles, and create new
businesses- S ecure stable income sources for our local subsidiary in Vietnam,
and implement growth investment in the Southeast Asia region

Relevant SDGs

Opportunities

Reinforcement of our supply chain, leveraging our abundant
mineral resources from quarries
Development of more sophisticated quarrying technology

Business activities that contribute to sustainable development and expanding them overseas

Medium-Term
Management Plan

Business Strategies

The core of our Mineral Resources Business is the manufacture and sale of mineral products such as limestone and silica,
which are raw materials for cement, and we have also been steadily expanding into overseas markets, particularly in Asia, by fully
leveraging the know-how we have accumulated in Japan. We have dispatched representatives to China, Thailand and Vietnam,
which are experiencing remarkable economic development, to continue activities from conducting market trend research
to cultivating relationships with influential partners for the commercialization of our products. Local subsidiaries have been
established in areas that have been found to have business potential.
One example of our success to date is the sale of high specific gravity aggregates for construction equipment counterweights
in China and Thailand, which has been ongoing for more than ten years. We are also constantly reconfiguring our businessportfolio. An example of the Mineral Resources Business’ overseas trading is the sale of limestone to South Korea. We are supplying
limestone to Korea from a source secured by our subsidiary in Vietnam in order to meet the strong demand. In Vietnam, themarket for gypsum board is growing, and although natural gypsum from Thailand has been used in the past, prices have soared
in recent years due to high ocean freight rates. So, we have begun importing natural gypsum from Laos as an alternative source.
Furthermore, in collaboration with local subsidiaries under the jurisdiction of the overseas cement business, the domestic cementbusiness and the Central Research Laboratory, we are preparing a soil improving material business that effectively utilizes blast
furnace slag generated from local steel mills, and plan to develop
this business in southern Vietnam where soft ground is common.
In the future, we plan to utilize to the utmost the businessknow-how and human networks we have accumulated invarious overseas locations to expand our business related tothe cement business in Indonesia, where synergies from thecapital and business alliance will be fully realized, in addition toexisting overseas cement business operations in Singapore, thePhilippines and other countries.

Risks and opportunities,
Materiality

Quarries subject to large-scale natural disasters associated withclimate change
Triggering the deterioration of concrete by alkali-aggregate reaction

Value Creationin the Value Chain

Stable provision of mineral resource products
Further contributions to a recycling-based society
Provision of environmentally sound products
Risks

Strengths of Taiheiyo Cement(1) Aggregates business- Establish an aggregate washing plant at Shin-Tsukumi Quarry
and carry out sales promotions- Construct an aggregates yard with the aim of ensuring astable supply of aggregates in the Kanto region and creating asystem to promote sales there

Value Creation Process

Key Strategies for FY2023

Mekong Delta Development Status (Vietnam)

47

Creating Value

Environmental BusinessContributing to the delivery ofcarbon neutrality by deepening thecircular economy, which balances
social and economic values.

Managing Executive Officer

Shinji Fukami

23 Medium-Term Management Plan Strategies
Initiatives toward carbon neutrality- Maximize our waste treatment business and develop new businesses

Enhance our earnings base

- Establish a new model for recycling resources with the cement industry at its core
- Implement large-scale initiatives and create new business models

Net sales*

FY2021Results
78

Operating income

FY2024Plan
82billion yen

FY2021Results
6.4

billion yen

FY2024Plan
8.5

billion yen

billion yen* Since we have adopted the Accounting Standard for Revenue Recognition (ASBJ Standard
No. 29) etc. from FY2022, the net sales in the FY2024 plan show the amount after
adoption of the new standard. (The adoption of the new standard has a negative impact of-16 billion yen.)

Our core business is recycling waste and by-products
generated at thermal power stations, steelmakers and chemicals
manufacturers, as well as recycling materials such as municipal
waste, incineration ash and sewage sludge at the request ofmunicipalities. In recent years we have also been developing
the aquatics business via products such as water purificationmaterials, which also contributes to the creation of a recyclingbased society.
One of the changes in the circumstances environment
surrounding this business is that actions to reduce greenhousegases is accelerating. Our group has established a roadmap that
includes the development of innovative technologies, with thegoal of carbon neutrality by 2050, and the entire company isworking together to achieve this goal. We believe that the role ofour business for the time being is to enhance our waste collectionin order to expand the use of alternative energy sources. It is also
necessary for us to take on the challenge of new businesses andwe have been working on the recycling of lithium-ion batteries(LIB), which until now have been considered difficult to process,the establishment of low-temperature embrittlement technology,
and the development of technologies to recover precious metals
from incineration residues from municipal waste and phosphorus
from wastewater, which will contribute to resource recycling. We
believe that if we can grow these businesses into pillars of ouroperations, they will naturally contribute to the deepening of
the circular economy and the achievement of our group's carbon
neutrality in a way that has economic value.

FY2022 Achievements
Net Sales and Operating Income
Net sales (left axis)(Billions of yen)

100

92.6

6.6

(Billions of yen)

15.0
84.4

80
60

Operating income (right axis)

7.7

40

78.0

83.0

*

12.5
10.0

72.3
6.4

7.5

6.6
5.6

20
0

2.5

2018

2019

2020

2021

2022

(Forecast)(FY)* Of the 5.7 billion yen increase in net sales for FY2022, 16.9 billion yen is due to theapplication of the above-mentioned Accounting Standard for Revenue Recognition.

48

5.0

0

Although the COVID-19 pandemic had some impact in reducing theamount of waste and by-products generated, there was no significant
change in the operations of domestic thermal power plants. Waste recycling
businesses for thermal power plants remained strong, including the sale ofcalcium carbonate for desulfurization and the collection of waste gypsum
and coal ash. As a result of the above, net sales were 72.3 billion yen (adecrease of 5.7 billion yen on the previous fiscal year) and operating
income was 6.6 billion yen (an increase of 200 million yen on the previous
fiscal year). On the other hand, we have established “low-temperatureembrittlement” technology that easily separates plastics from metals by
improving the friability of automobile shredder residue, which we havebeen working on for some time.

1. Maximize our waste treatment business and develop new
businesses

2. Establish a new model for a recycling-based society withthe cement industry at its core
- Expand the LIB recycling business- E xpand sales of biomass fuel, enhance alliances with othercompanies and explore M&A opportunities

Efforts to Address Social Issues

Strengths of Taiheiyo Cement- Increase and expand treatment of alternative energy such aswaste plastic- Expand raw material substitutes by the removal of harmful
elements- Recovery of precious and rare metals (resource complex
initiatives)

Relevant SDGs

Risks

Opportunities

Soaring fossil fuel prices
Changes in the Environmental Business’ needs accompanying
the transition to carbon neutrality

Development and deployment of technologies
to use waste and by-products
Creation of carbon neutral business

Carbon Neutrality

Circular economies

Disaster recovery

Biomass

Advanced processing
and recycling

CCUS

Recycled
waste to cement

Precious
metalsRare metals

Business Strategies

Resilience

Medium-Term
Management Plan

Utilizing waste and by-products as raw materials and heat energy for cement production at cement plants whilst upholding
cement quality plays an important role in extending the life of landfill sites. The amount of waste and by-products used per tonne of
cement has reached more than 400 kg, totaling about 6.2 million tonnes per year.
In addition to this established role, the future promotion of the Environmental Business requires the activation of diverse
resource recycling, including CO2 reduction and carbon neutrality in the industrial value chain. We are furthering these efforts anddeveloping them into four different approaches according to social needs: resilience, market expansion, circular economies andcarbon neutrality.
Regarding “resilience”, the convenience and importance of the cement industry's recycling technology is known by society,leading to comprehensive partnership agreements with local governments and the establishment of a system for rapid disasterrecovery support. In terms of “market expansion”, we are developing markets for each use type of application, such as dairy farming
and fisheries, for environmental materials such as Ceraclean, a water purification material, and are also expanding into Southeast
Asia. Regarding “circular economies”, as we possess technologies for utilizing automobile-related waste, which until now has beendifficult to process, and for concentrating, separating and recovering metal resources contained in waste and byproducts thathas been applied to the cement production process, we are also progressing the advancement of resource recycling by matching
our technologies with those of other industries. In terms of “carbon neutrality”, we are exploring commercial opportunities forinnovative CCUS technologies.

Risks and opportunities,
Materiality

Resource recycling initiative that deepened collaboration between industries (challenging
new value creation)

Value Creationin the Value Chain

Further contributions to a recycling-based society
Building a carbon neutral business
Provision of environmentally sound products and solutions

Fukushima reconstruction

Value Creation Process

Key Strategies for FY2023

Market Expansion
Environmental
materials

Overseas

Urban mines

Electric power& steelInitiatives toward recycling resource

49

Creating Value

Construction Materials Business
Aiming to achieve appropriate
profits, develop new products andconstruction methods that contributeto reducing labor demand, andexpand our business domain overseas.

Managing Executive Officer

Masaki Takahashi
23 Medium-Term Management Plan Strategies
Enhance our earnings base- Improve business profits via product differentiation and greater
competitiveness- Accelerate the construction of a group structure toward business expansion
into the Southeast Asian market

Initiatives toward carbon neutrality- E nhance initiatives to reduce the environmental impact of the entire
Construction Materials Business-D evelop new products and businesses leveraging existing technologies andvalue chains

Net sales*

FY2021Results73

Operating income

FY2024Plan
75billion yen

FY2021Results
3.5

billion yen

FY2024Plan
6.6

billion yen

billion yen* Since we have adopted the Accounting Standard for Revenue Recognition (ASBJ Standard
No. 29) from FY2022, the net sales in the FY2024 plan show the amount after adoption of the
new standard. (The adoption of the new standard has a negative impact of -10 billion yen.)

The Construction Materials Business consists of theconstruction materials business, which manufactures and sells
products including premix products, admixtures, repair materials,
construction and civil engineering materials, ALC (autoclaved
lightweight concrete) and paving blocks, and the construction
and civil engineering business which is involved in ground
improvement projects, sales of materials for shield tunnels, andrenovation and reinforcement work for concrete structures.
The COVID-19 pandemic has led to serious labor shortages
at construction sites, and demand for building materials products
has been sluggish. In addition, as cement prices have been
largely revised against the backdrop of soaring coal prices, we areworking on the prompt and appropriate passing on of costs as a
top priority for the building materials products that use cement
as a main raw material and for construction and civil engineering
projects. In response to the decrease in demand due to labor
shortages at construction sites, we will turn it into a business
opportunity by further demonstrating the group's total strength
through complementing the technologies and know-how within
the group, jointly procuring raw materials and by-products, andsharing human resources, and by developing new products andnew construction methods that contribute to reducing labordemand. While we expect the domestic construction market toinevitably decline by a certain amount due to factors such as
population decline, there are many regions, including Southeast
Asia, where the market is expanding. We are also working to
expand our business domain, such as the development ofa local ground improvement business that is already underconsideration and should benefit  from the capital and businessalliance with the SI Group.

FY2022 Achievements
Net Sales and Operating Income
Net sales (left axis)(Billions of yen)

Operating income (right axis)(Billions of yen)

100
80
60

10
82.1

4.9

40

81.3

4.5

73.0

6

65.0
3.5

4

3.4

20
0

8

72.0

*

2

1.5

2018

2019

2020

2021

2022

(Forecast)(FY)* Of the 7.9 billion yen increase in net sales for FY2022, 10.1 billion yen is due to theapplication of the above-mentioned Accounting Standard for Revenue Recognition.

50

0

In the construction materials business, sales of ALC and other building
materials were sluggish due to delays and postponements of construction
projects caused by factors including new waves of COVID-19, as well as
cooling private investment. In the construction and civil engineeringbusiness, sales of materials for shield tunneling also remained sluggish,
while ground improvement projects were strong due to a recovery trend. As
a result of the above, net sales were 65 billion yen (a decrease of 7.9 billion
yen on the previous fiscal year) and operating income was 3.4 billion yen (adecrease of 70 million yen on the previous fiscal year).
Under these business circumstances we are tackling capital investment
and, as a priority issue, the development of new construction methods toreduce labor demand at construction and manufacturing sites. Taiheiyo
Materials Corporation has begun marketing “AIR SHOT ONE”, a dry spraying
method that reduces environmental impact and dust, and the “Slab Guard
Method”, a method of thickening the thin top surface layer of bridge slabs.
This method enables reinforcement of the bridge slab in thinner layers, due
to its ultra-high strength of 90 N/mm².

1. Boost the earnings capacity of existing businesses- Enhance profitability through product differentiation and steadycost shifting- Implement capital investment to boost production efficiency

Value Creation Process

Key Strategies for FY2023
3. Expand into new business domains

2. Respond to the labor shortage and aging workforce issues
affecting construction sites

Efforts to Address Social Issues

Strengths of Taiheiyo Cement- Develop products and methods that reduce labor demand- Secure stable transportation and construction capabilities- Seek to optimize our supply system by expanding collaborations
with OEMs etc.

- Open up new business areas that can create synergies-D evelop new products leveraging technologies and value chainspossessed by group companies- C onstruct a group system with a view to business expansion into
the burgeoning Southeast Asian market

Relevant SDGs

Risks

Opportunities

Labor shortages and a shrinking domestic construction market
Soaring raw material and fuel prices

Expand into new business domains such as overseas markets
Supply competitive, high value-added products and technologies

Medium-Term
Management Plan

Business Strategies

In the Construction Materials Business, we utilize our cement and concrete technologies to create structural components forbuildings and civil engineering work from below ground to above, contributing to the creation of comfortable living space andinfrastructure for safe living.
Our construction materials business manufactures pre-mixed mortar products (bagged products containing the appropriate
mixture of cement, sand, and other materials and can be used simply by mixing with water) and concrete admixtures that improve
the functionality of a wide range of structures, from stand-alone houses to roads, bridges and tunnels. Familiar examples include
our production and sale of ALC used as wall material for housing, stores and factories, as well as paving blocks.
Our construction and civil engineering business is involved in ground improvement projects to improve soft ground using
cement-based soil stabilizers and other materials so that it can be used as a foundation for structures, renovation work for concrete
structures such as water and sewage facilities, and seismic reinforcement work. In addition, our group companies complement
each other in human resources and technology across the group and utilize our own nationwide network to respond quickly andappropriately to increasingly diverse and sophisticated on-site needs. Furthermore, in response to the labor shortages that arebecoming more pronounced on construction sites, we are actively proposing
solutions to reduce labor demand by combining materials and construction
methods, and introducing IoT into construction machinery.
Delivering carbon neutrality is one of our group's greatest businesschallenges, but we are already cooperating in the research and developmentof CCUS technology, which captures CO2 generated in the cement
manufacturing process and uses it in the manufacturing process ofconcrete products, as one of the themes for our research and developmentof innovative technologies. The expectations on the role of the groupcompanies in the construction materials business in terms of CO2 utilization
are high, and by making steady progress we are contributing towards carbon
neutrality.

Risks and opportunities,
Materiality

Providing solutions for reducing labor demandand contributing to the establishment of innovative CCUS technologies

Value Creationin the Value Chain

Provision of environmentally sound products and technical services.
Provision of products that reduce labor demand

Construction management utilizing IoT (Onoda Chemico Co.)

51

Creating Value

Research and Development
Key Strategies for FY2023
1

Carbon neutrality- Maximize use of fossil fuel substitutes and low-carbon cement- Innovative cement production processes

2

Refine infrastructure technologies and expand overseas- Cement: Quality, processes and cost reductions- Stabilizer/Insolubilizing agent: Enhance functionality and expand applications- Concrete: Enhance functionality and expand applications

3

Evolve recycling technologies- Develop combustion and de-chlorination technologies- Coal ash and slag substitutes, alkali reduction- Chromium removal and precious metal recovery

4

Innovative materials- Functional materials- Resource-recycling calcium carbonate concreteManaging Executive Officer

Takayoshi Okamura

5

Future-oriented technologies- Utilization of AI and the IoT to boost productivity and reduce labor demand- Integrated system to control kilns and predict quality

Contributing to sustainable development by our outstanding
research and development capabilities.
Q: Could you provide an overview of the
Research and Development Department?
In the Research and Development Department, the Central
Research Laboratory, the Intellectual Property Department,
and the Carbon Neutral Technology Development Project
Team continue to work in unison. With the group’s sustainable
development in mind, the solution of social issues is considered
an important role of the Research and Development Department.
Today, carbon neutrality is of paramount importance to thecement industry.
Meanwhile, circular economies also continue to be an
important theme for the cement industry. The cement industry
has been developing resource recycling businesses since the1990s, and we intend to take this a step further and progressresearch and development from the perspective of contributing
to sustainable development on a global scale toward meeting
the SDGs.

Q: What are strengths of the Research andDevelopment?
The priority issue of the Research and Development Our
greatest advantage is the advanced platform technology relating
to manufacturing processes of our core products, cement andconcrete. We have accumulated technologies and knowledge to
produce cement of consistently high quality through properly52

grinding limestone whose qualities are different depending oneach quarry and utilizing waste and by-products as raw material
and fuel. We intend to continue contributing to society andindustry through the development of technology that meets newneeds.

Q: What is the progress on the key strategies
and future developments?
Regarding carbon neutrality, which is one of our key strategies
for FY2023, we have focused on the development of CO2-cured
concrete, which improves strength by absorbing and solidifying
CO2. We have already completed the registration of the trademark“CARBOFIX” and have positioned it as a key technology in ourgroup’s “Carbon Neutral Strategy 2050.”
In terms of Research and Development, we are conducting
numerous joint research projects with universities and research
institutions, and we are actively promoting open innovationand cross-industry collaboration aimed towards creating
new value. We are also a member of the Global Cement andConcrete Association (GCCA), in which the world's major cementcompanies also participate, and have developed a method for
calculating the amount of CO2 absorbed by concrete throughout
its life cycle, and are working toward implementation andcertification by an international evaluation organization. We willcontinue to develop technologies that contribute to the group’s
sustainable growth.

Relevant SDGs

Environmental
Business

Reﬁning infrastructuretechnologies
Deployment overseas

Synergies within the group
Developing new business areas
towards creation

Technology
development
for the futureGroupcompanies

Research and Development Department

Central Research Laboratory
Business development supportand Intellectual Property Departmentthat contributes to the business expansion
Carbon Neutral Technology Development Project Teamof group companies

Business Strategies

Adding value to the resources we own

Innovative
materials

Construction
Materials
Business

Evolution ofrecycling technology

Medium-Term
Management Plan

Technology developmentthat contributes to overseas businessexpansion under the Glocal Strategy

MineralResources
Business

Further advancementof recycled resources
utilization technology

CarbonNeutrality

Risks and opportunities,
Materiality

CementBusiness(Overseas)

Value Creationin the Value Chain

Delivering of carbon neutrality
National resilience
Creation of a recycling-based society

Maintain and improve cement quality
Cost reduction andenvironmental impact reduction

Strengths of Taiheiyo Cement

is a key challenge. We also position the following as key
future-oriented challenges: the enhancement of innovativetechnologies that will lead to new generation of profits, theboosting of productivity via AI and the IoT, and the developmentof technologies for reducing labor demand.
Regarding these five key strategies, we will organicallycollaborate and operate with each business division in thedomestic and overseas Cement Businesses, the Mineral
Resources Business, the Environmental Business and groupcompanies, and together with the Carbon Neutral Technology
Development Project Team and the Intellectual Property
Department we will support the group’s aim of “becoming
an outstanding leading company” with our technologicalcapabilities.

Research and Development is contributing to the resolutionof social issues such as national resilience, building a recyclingbased society and delivering carbon neutrality, and on R&D
strategies to contribute to the group’s sustainable growth.
In particular, establishing innovative technologies that will
be implemented in society to deliver carbon neutrality is a toppriority challenge that will impact the future of the cement
industry. We will also seek to further refine our infrastructuretechnologies so that we can maintain and develop “Taiheiyo
quality” while responding to the changes in various businessenvironments, and can supply high-quality products andadvanced solutions. Contributing to the creation of circular
economies is another important role we play, and further
enhancing our technologies for utilizing recycled resources

CementBusiness(Domestic)

Value Creation Process

Role of the Research and Development Department

Promote information analysis activities centered on intellectual property
a ﬁeldRecent technical issues in the ‘X’ ﬁeld
Issue

b ﬁeld

Issue

Issue

Issue

d ﬁeldf ﬁeldExample of our Group's core technology map

ent 2
Deploym

The group’s technological range
3

e ﬁeldent

X ﬁeld

nt 1

yme

Deplo

loym

c ﬁeldDep

We actively incorporate the resultsof our bird's-eye analysis of various data
centered around patent information into
our research and development activities
to stimulate value creation activities,
such as the deployment of developed
technologies to new applications andthe search for new technological fields.
These IP landscape activities are also
being deployed to group companies andeffectively used to examine themes fortechnological development.

Example of a study of the direction of technological developmentin the ‘X’ field

53

Creating Value

Message from the officer in charge of finance
Aiming to implement
investment for growthand strengthening
plant facilities andquarry development
while maintaining
financial soundness.
Director and Senior Executive Officer

Hideaki Asakura

Progress of Improving Financial Structure
Our group was formed through a merger in October 1998,
and at that time the financial structure was fragile, with both net
sales and interest-bearing debt each close to 1 trillion yen. Afterthe merger, we proceeded with the consolidation of unprofitablegroup companies and the sale of idle assets, but also faced
drastic change in the business environment as the domestic
demand for cement, which was over 70 million tonnes at the timeof the merger, fell by more than 10 million tonnes in 10 years,
followed by a fall of 7 million tonnes in just one year in FY2010.
In response, in FY2011 we took decisive business restructuring
measures centered on reducing cement production capacity by
5.6 million tonnes. This has enabled us to improve profitability
by 16 billion yen per year, and with the subsequent demand forreconstruction from the Great East Japan Earthquake, profitability
has increased to the point of recording more than 60 billion
yen in operating income for eight consecutive fiscal years from
FY2014 to FY2021. In 2018, we gained an “A” rating for our
financial structure from issuer ratings, and by the end of FY2021,
the final year of our 20 Medium-Term Management Plan, we
have improved our equity ratio to over 45% and net debt/equity
ratio (DER) to 0.4x.
As we continue to push forward with the improvement of our
financial structure, under the 17 Medium-Term Management
Plan (the three-year plan for FY2016-2018), we pursued apolicy “to become a corporate group that progresses on a
growth path”, and have changed direction towards growthinvestments, including the acquisition of a cement plant (OroGrande Plant) in our U.S. Cement Business, the start of a biomass
power generation business, and making a cement production
subsidiary a wholly owned subsidiary. Under the 20 MediumTerm Management Plan, we made investments that contributed
to strategic business expansion, such as investment in the SI

54

Group and renovation work on TCPI's production lines. While
we will continue to invest in growth under the 23 Medium-Term
Management Plan, we also plan to make new investments overthe next 10 years in research and development to deliver carbon
neutrality and to enhance our domestic business.
The success of our group's sustainable development
depends on our ability to steadily implement both robust
offensive investments under our growth strategy and defensive
investments for enhancing, and we will provide steady support
through the financial strategies in the 23 Medium-Term
Management Plan.

Interest-bearing debt and net debt/equity ratio (DER)
Interest-bearing debt (billions of yen)
Net debt/equity ratio (DER) (multiples)

288.6

0.6

2018

279.6

0.5

2019

266.1

0.5

2020

248.1

0.4

2021

270.5

0.4

2022

(FY)

Financial Strategies in the 23 Medium Term
Management Plan
Implement investments for growth and enhancing thefoundations of our domestic business
The 23 Medium-Term Management Plan sets management

Profit Attributable to Owners of Parent andReturn on Equity (ROE)

Value Creation Process

Proﬁt attributable to owners of parent (billions of yen)
Return on equity (ROE) (%)
46.8
43.4
39.1
38.5
28.9

10.2

2018

10.7

2019

9.2

2020

10.3

2021

Strengths of Taiheiyo Cement

5.9
(FY)

2022

Cash flow
Cash ﬂow from operating activities (billions of yen)
Cash ﬂow from investment activities (billions of yen)Free cash ﬂow (billions of yen)
110.4
107.6
97.2
90.9
59.2

Value Creationin the Value Chain

71.1

62.5

39.2
25.3

-12.7
-48.4
2018

-58.0

-65.5

2019

2020

-47.8
2021

-83.9
2022

(FY)

Risks and opportunities,
Materiality

Shareholder Returns Policy

Business Strategies

Under the 23 Medium-Term Management Plan, we plan to
pay stable and continuous dividends while flexibly implementing
the purchase of treasury shares in a timely manner to improve
capital efficiency, aiming for a total return ratio of 33% (threeyear average). While steadily progressing investments such as inenhancing and also shareholder returns, we are also striving tomaintain and improve our financial soundness, with a target ofmaintaining a net debt/equity ratio (DER) of around 0.4x.

Medium-Term
Management Plan

targets of an operating income on net sales of 11% or more
and return on equity of 10% or more. While return on assets(ROA) was used as a management indicator in the previous
Medium-Term Management Plans, because we have secured
a certain degree of soundness in our financial structure at
the end of the 20 Medium-Term Management Plan, we haveintroduced ROE to clarify our target of maximizing corporate
value while maintaining financial soundness. The target of 10%
or more is management's intention to achieve an increase incorporate value for our stakeholders that exceeds our cost ofcapital of about 8%. In order to achieve this, we will monitor
the profitability of existing businesses and carefully select andmanage growth investments from the perspective of whether
they will drive the group's profitability in the future.
In addition, in order to enhance our business foundation
to support sustainable growth, we plan to invest a total of 300
billion yen over the 10 years from FY2022 to FY2031, which
includes the period of the 23 Medium-Term Management
Plan, with 100 billion yen invested in each of (1) initiatives todeliver carbon neutrality, (2) strengthening plant facilities, and(3) quarry development. During the period of the 23 MediumTerm Management Plan alone, we will invest 120 billion yen
in growth investments and 160 billion yen to enhance ourbusiness foundation, while maintaining a net debt/equity ratio(DER) of around 0.4x. In order to execute large investments
without increasing interest-bearing debt, we will focus upon
cash flow from operating activities, which is earned from our corebusinesses, as the source of funds for investment. In addition
to monitoring the steady creation of cash flow from operating
activities to ensure that investment opportunities are not lost
due to insufficient funds, we will strive to maintain and improve
the soundness of our financial structure by furthering our groupfinancing centered on our financial subsidiary and enhancing
capital efficiency. However, the present funding situation
has been affected by a significant decrease in cash flow fromoperating activities due to the deteriorating profitability of ourcore domestic cement business caused by soaring coal prices
and other factors, and more stakeholders are questioning theneed to revise our investment plans and net debt/equity ratio(DER) targets. Although we expect that temporary deteriorationof the net debt/equity ratio (DER) target is unavoidable due toworking capital borrowings and other factors, we need to quickly
restore cash flow from operating activities in order to avoid amajor revision of our 10-year investment plan. Therefore, we havedecided to revise our prices for cement and cement-based soil
stabilizers again for shipments from October 2022, in the form ofa “coal price surcharge method” or a “fixed price revision method”
as selected by the purchaser.
We are also considering the use of transition financing andother financing methods towards carbon neutrality. We believethat by utilizing these resources we will be able to further
accelerate our technological development and gain widespreadrecognition of our group's efforts.

Communication with our stakeholders
Regarding communication with institutional investors and ourother stakeholders, in addition to financial information such as
financial results and forecasts, each year we are also increasing
the dialogue on non-financial information such as ESG and SDGs
initiatives. In FY2022 we conducted a total of more than 170
individual investor meetings. Opinions and suggestions received
through investor meetings are reported to management in atimely manner. In the future, we will expand communication
by increasing opportunities for direct dialogue between
management and our stakeholders.

55

ESG Initiatives That Support Creation of Corporate Value

Sustainability Management
Corporate Framework for CSR
The Taiheiyo Cement Group Mission was formulated in 2002 as the highest level concept and guiding principle of our businessactivities. Our Business Principles present more detailed guidelines for action based on the Mission.
The vision and direction targeting the mid-2020s have been established as our vision for the future, based on the Mission. They
present the group’s values and orientation in qualitative terms.

The Medium-Term Management Plan sets forth our management
strategy and targets for the next three years, while the CSR
Objectives for 2025 are medium-term, quantitative CSR targets.
Based on these two sets of quantitative targets, we aim toachieve our Future Vision and Direction.

CSR
Objectives
for 2025

Taiheiyo
CementGroup

Enhance Management Foundations

Business Principles

23
Medium-Term
Management
Plan
Business Strategies

Basic Policy for Promoting CSR Management
1 Based on our Mission and Business Principles, the company

will clarify the ideal form of CSR management to be pursued
and strive to advance operations based on CSR.

2 Promoting a corporate culture that places great importance oncompliance, we aspire for all directors and all employees toalways make the most appropriate autonomous decisions.

3 We will manage the company in the awareness that our social

mission includes protecting the environment, defending
human rights and contributing to communities.

4 We will proactively engage with key CSR issues and undertakethe most appropriate prioritization and resource allocation.

5 We will practice appropriate information disclosure andcommunication with stakeholders, based on the state of our
CSR management, and build relationships of trust.

6 We will treat the promotion of CSR management as a group-

wide activity.

56

To become an enterprisegroup that provides a senseof safety and security tosocieties in the Pacific
Rim by demonstrating thegroup’s overall capabilities.
Our future visionand direction(Mid-2020s)

CSR Objectives for 2025
1. Prevention of accidents- Zero fatalities

2. Reduction of greenhouse gas emissions- Reduce specific net CO2 emissions by at least 10% or more(compared with FY2001)

3. Diversity- Ratio of female recruits: At least 30%- Ratio of female employees: At least 10%- Ratio of newly appointed female managers: At least 10%

Mission of the
Taiheiyo Cement
Group

E
S
G
57

ESG Initiatives That Support Creation of Corporate Value

ENVIRONMENT
Environmentally-Conscious Management

Environmental Management ����������������������������������������������������������� 60
Mitigating Climate Change �������������������������������������������������������������� 62
Improving Energy and Resource Efficiency ��������������������������������������� 66
Reducing Environmental Impact ������������������������������������������������������ 68

Disclosure Regarding Recommendations of the TCFD �������������� 70
Conserving and Restoring Biodiversity ���������������������������������������� 72
Providing Environmentally Sound Products and Services ������� 74
Appropriate Use of Water Resources ��������������������������������������������� 76

58

Mojave Plant (United States)

59

ESG Initiatives That Support Creation of Corporate Value

Environmentally-Conscious Management
We are working to improve our environmental performance by formulating strategies across the company andproactively working to solve problems based on our Environmental Management Policy.

Environmental Management System
Approach

Our environmental management policy declares an active
commitment to environmental issues facing society, including
not only preventing environmental pollution but also creatinga recycling-based society, mitigating climate change, reducing
environmental impacts, protecting water resources andconserving biodiversity as key management challenges. Under
this policy we are focusing on improving our environmental
performance.

Environmental Management Policy
In January 2006 we formulated our Environmental
Management Policy, reflecting the fact that we consider anactive commitment to the environmental issues facing society
to be key management challenges. In addition to initiatives
emphasizing the six items in all business operations, we strive
to communicate with a wide range of stakeholders, frominternational society to local communities, and to seek the ideal
form for a sustainable cement industry as a member of the
WBCSD and GCCA (Global Cement and Concrete Association).

Formulated in January 2006
Revised in April 201960

We have established an Environmental Management
Committee chaired by the officer in charge of the Production
Department as one of the specialized committees under the
CSR Management Committee, which reports directly to theBoard of Directors, to promote environmental management andimplement the EMS.

Company-wide EMS Readiness

In June 1997 we initiated ISO 14001 certification of eachof our plants and attained certification of all six of our directly
operated plants by 1999. Recognizing, however, that plantlevel management systems alone are insufficient to ensurecomprehensive environmental protection through environmental
management projects, we built a company-wide environmental
management system (EMS) and extended it beyond plants
to cover our headquarters, branches and Central ResearchLaboratory. In April 2009, we established a company-wide EMS
that extends the scope of application not only to plants but also
to the head office, branch offices, and central research laboratory,
and received ISO 14001 certification registration from theJapan Testing Center for Construction Materials. As part of thecontinuing certification, the company-wide system underwent a
renewal audit for the fourth time in March 2021.

Company-wide EMS Readiness

Secretariat: Environmental Administration Group,
Production Department

Production Dept., Mining Dept., General Affairs Dept.,
Cement Business Division Administration Dept. andSales Dept.,
Mineral Resources Business Dept., Environmental
Business Development Dept.

Depts. withjurisdiction

Pursuing Environmentally Conscious Business Activities
In pursuit of reducing environmental impacts, we properly
assess the impacts of our business activities and promote theintroduction of eco-efficient technologies into our businessand the development of eco-conscious products. Also, we
pursue environmental conservation activities as a member ofthe regional community.
Compliance with Environmental Laws and Regulations
As a minimum, we comply with all environmental laws
and regulations applicable to our business activities.
Furthermore, beyond compliance, we meet environmental
commitments undertaken through voluntary agreements.
Contributing to a Recycling-based Society
Leveraging the inherent capabilities of the cement industry,
we actively recycle industrial and municipal waste as raw
materials and fuels for cement production.
Proactively Addressing the Issue of Climate Change
We promote greater energy reduction throughout the wholeof our business activities and strive to develop technology tohelp reduce society's total greenhouse gas emissions.
Promoting Global Technology Transfer
Through the worldwide transfer and deployment of ourtechnology, we aid the development of greater energy
conservation, environmental preservation and utilization ofwaste materials.
Ecosystem Conservation
We strive to protect the ecosystem, including biodiversity,
by providing products and technologies that contribute toharmonious coexistence with nature.

Environmental Management System andCompany-wide Environmental Management

PlantsQuarries

Branches

CNPT*
Other
Headquarters,
business sites

Central ResearchLaboratory* The Carbon Neutral Technology Development Project Team

Taiheiyo Cement Group Environmental Targets GCCA
CO2 Emission Reduction Targets

Cement production-related CO2 emissions from Taiheiyo
Cement and group companies

Reduce specific net CO2 emissions by 10% or more from
FY2001 levels by FY2026. CSR Objectives for 2025
Reduction Target for Main Air Pollutants

Emissions of NOx, SOx and dust from the main stacks of kilns at thecement production sites of Taiheiyo Cement and group companies

Limit NOx, SOx and dust levels per tonne of clinker(g/t-clinker) to the target levels achieved in FY2011

Relevant SDGs

Response to Environmental Accidents

Each plant maintains emergency response plans in
preparation for possible environmental accidents. They also
conduct periodic fire-fighting drills in cooperation with local
fire departments. Other training includes how to reduce
environmental impact when an environmental accident occurs,
and how to report it to a government entity.

Environmental Complaints

As we increasingly utilize ever more diverse forms of waste
and by-products the number of environmental issues we needto consider also increases. Therefore, we are ramping up ourefforts to reduce environmental impact through activities such as
introducing indoor storage and sealed containers for waste andby-products, and improving our flue gas stacks. On receiving anenvironmental complaint, whenever possible we quickly travel tothe site in question to check the situation, investigate the cause
and provide an explanation. If we find that our activities are thecause we implement improvements.
In FY2022, our cement plants received 148 environmental
complaints, including those from outside sources. We responded
to 48 of these, which were associated with our operations. Odor
complaints have increased compared to pre-FY2021 levels, but
we are appropriately addressing them.



Appropriate Use of Water
Resources

During Environment Month each June we deliver a message
from the president and provide educational materials on theenvironment page of our portal site to increase awarenessand encourage learning about the environment, and about
environmental preservation activities throughout the group. Each
workplace also engages in a number of different activities, suchas conducting training sessions related to accident response,viewing environment-related videos, holding lectures andtaking part in local cleanup activities. In FY2022, more than 400
activities took place, including group companies’ activities.

In FY2022, there was an explosion at the on-site power
generation facility at our Saitama Plant. This resulted in buildings
and vehicles being damaged and dirtied from debris, and flying
debris caused damage to farmland. In response to the accident,
an accident investigation committee, including external experts,
was established to investigate the cause of the accident and takemeasures to prevent its recurrence.
We also had two minor accidents and have taken measures toprevent their recurrence.

Providing Environmentally
Sound Products and Services

Environmental Education

Environmental Accidents

Conserving and Restoring
Biodiversity

We conducted internal environmental audits at all our sites in
FY2022.
As priority items from this year’s audit, confirmation of legal
compliance reviews, external communications and corrective
actions for unachieved items were identified as companywide concerns. The status of a follow-up, including corrective
and preventive actions for nonconformity with environmental
requirements, and the status of responses to emergencies wereidentified as items that plants must deal with. Verifying thecompliance status of service stations was identified as an itemthat must be dealt with by branches.
The audit identified 34 findings, including 3 for which
improvements were requested. Corrective actions were taken for
all 3 findings for which improvements were requested.

GRI307-1

Disclosure Regarding
Recommendations of the TCFD

Internal Environmental Audits

Compliance with Environmental Laws

Environmentally-Conscious
Management

All of our cement plants in Japan, including those of groupcompanies, have obtained ISO 14001 certification. Furthermore,
all of our overseas cement plants in countries that adopt ISO haveobtained ISO 14001 certification and are actively committed toenvironmental conservation. Cement plants in countries where
ISO is not adopted as the mainstream standard operate their own
EMS.

Number of Environmental Complaints Received(Complaints)

50

Air/ﬁne particles
Noise
Water quality
Vibrations
Odor
Other

Non-consolidated

48
4

40
30

24

29

29

25

27

20

Training to respond to environmental accidents (Kumagaya Plant)

8

10
0

1
1

7
2018

2019

2020

2021

2022

(FY)

61

ESG Initiatives That Support Creation of Corporate Value
Environmentally-Conscious Management

cementitious product, the same as in FY2021 and an 8.3%
reduction compared to FY2001. Regarding the 2030 Interim
Targets, our net CO2 emissions across the entire supply chain for
FY2022 were 793 kg of CO2 per tonne of cementitious product,
a 9.6% reduction compared to 2000, and total CO2 emissions
were reduced by 35%. Regarding the CO2 reduction effect due
to the recarbonation of concrete, we are promoting the study ofappropriate evaluation methods in collaboration with the GCCA.

Mitigating Climate Change
Approach

A significant amount of CO2 is generated during cement
production. This is because the production process requires
a high temperature of 1,450°C and limestone, used as a raw
material, is decarbonated through a chemical reaction during thecalcination process (CaCO3 → CaO + CO2). Therefore, we have set
CO2 emission reduction targets and are working to achieve them.

* Calculated from the total greenhouse gas emissions generated by our domestic groupcompanies (excluding power generation companies) that are reporting their greenhousegas emissions by business segment in accordance with the Act on Promotion of Global
Warming Countermeasures.

Greenhouse Gas Emissions and Reduction Targets

Efforts Related to CO2 Emissions Reduction in
the Cement Production Process

GRI102-11, 302-3, 305-1, 2, 4, 5

92%* of the total greenhouse gas emissions associated withthe operations of our group companies are directly associatedwith cement production. In 2015, we therefore set in the
CSR Objectives for 2025 a target of reducing specific net CO2
emissions by 10% or more from FY2001 levels, and in March
2022, we announced "2030 Interim Targets" towards carbon
neutrality, and set targets of reducing emissions intensity by
20% or more throughout the supply chain and reducing total(domestic) CO2 emissions by 40% or more (each compared to2000).
Regarding the CSR Objectives for 2025, our specific net
CO2 emissions for FY2022 were 675 kg of CO2 per tonne of

GRI302-1, 3, 4, 305-4, 5

In order to reduce CO2 emissions, we have been working toconserve energy by installing energy-efficient equipment andimproving the stability and efficiency of our kiln operations.
We have also been implementing measures such as expanded
use of waste- and biomass-derived energy sources to decrease
our rate of use of fossil fuels. We are also moving toward using
recycled resources with less carbonate content to lower CO2
emissions from the calcination of limestone. We are moving
forward with the adoption of gas engine and waste heat recovery
power generation to reduce CO2 emissions that are ancillary topurchased electricity.

Progress in Meeting the CO2 Reduction Targets in the 2030 Interim Targets and CSR Objectives for 2025
ReductionRate

FY2022 Results

CSR Objectives for 2025
Reduction rate of specific net CO2 emissions*1:

8.3%

Although the specific heat consumption of clinker production andCO2 emissions intensity from alternative raw materials for limestone
decreased, the result remained the same as FY2021 at 8.3% due to anincrease in the ratio of clinker used in cement production.

Reduction rate of specific CO2
emissions across the supply chain*2:

9.6%

Reduction rate of total (domestic)*
CO2 emissions*3:

35%

Target (compared to 2000)

10% or more

2030
Interim
Targets

20% or more
40% or more

Net CO2 emissions fell by approximately 5 kg of CO2 per tonne of
cementitious product from FY2021. Thus, the reduction rate improvedby 0.6% from the rate of 9.0% in FY2021.

*1 Scope 1(excluding alternative fossil energy and CO2 resulting from on-site power generation)*2 Scope 1(excluding alternative fossil energy)+Scope 2+Scope 3 (Category 1,3)
*3 Scope 1 (excluding alternative fossil energy)+Scope 2

62

Relevant SDGs

Total Energy Consumption for Clinker Production GCCA

(TJ)

100,000
80,00091,206

1,665
10,61891,375

1,680
10,92892,897

Biomass fuels
Alternative fuels
Fossil fuels

1,674
11,43389,402

1,770
10,93888,414

1,807
11,74140,0001,000
78,92378,76879,791

76,693

2018

2019

2020

2021

2022

(FY)

2,600

3,303

3,268

3,298

3,321

2,858
2018

2,817
2019

2,832

2,849

2020

2021

CO2 emissions from purchased electricity used in the group’s
cement production in FY2022 was 983,000 tonnes, a 128,000
tonne increase from FY2021. The increase was due to the impactof higher emission factors in Vietnam and an increase in theamount of electricity purchased by the Saitama Plant.

400

2,787
2022

(FY)

725

22,440
679

2018

GCCA

Speciﬁc emissions

22,624

22,827

671

675

2019

2020

Total emissions(thousand t)

21,832

21,626

675

675

2021

2022 (FY)30,00020,00010,000(FY)Power generated

200
0

480
14.1

2018

480
13.2

2019

GCCA

Power substitution rate

483
13.5

2020

430
12.5
2021

425
12.5

2022 (FY)

(%)

20
15
10
5

Reference guidelines: “GCCA Sustainability Guidelines for the monitoring and reporting of
CO2 emissions from cement manufacturing Ver. 0.1” GCCA

Appropriate Use of Water
Resources(kg-CO2/t-cementitious)

2022

Reference guidelines: “GCCA Sustainability Guidelines for the monitoring and reporting of
CO2 emissions from cement manufacturing Ver. 0.1” GCCA

600

Specific Net CO2 Emissions

650

0

(GWh)

Specific heat consumption of clinker production by thegroup’s cement production in FY2022 was 3,291 MJ/tclinker, a
30 MJ/t-clinker decrease on the previous year’s level.

675

2021

200

Electricity Generated by Waste Heat Recovery

3,291

Reference guidelines: “GCCA Sustainability Guidelines for the monitoring and reporting of
CO2 emissions from cement manufacturing Ver. 0.1” GCCA

700

2020

983

Providing Environmentally
Sound Products and Services

Fossil fuels

3,000
2,800

2019

855

Conserving and Restoring
Biodiversity

Specific Heat Consumption of Clinker Production GCCA

(MJ/t-clinker)

3,200

2018

896

400

Total energy consumption for clinker burning during thegroup’s cement production was 88,414 TJ in FY2022, a 988 TJ
decrease from FY2021.

3,400

963

GCCA

600

Reference guidelines: “GCCA Sustainability Guidelines for the monitoring and reporting of
CO2 emissions from cement manufacturing Ver. 0.1” GCCA

3,600

985

800

74,86620,0000

CO2 Emissions from Purchased Electricity(thousand t)

Disclosure Regarding
Recommendations of the TCFD

60,000Net CO2 emissions associated with the group’s cement
production were 21.626 million tonnes in FY2022, a 206,000
tonne decrease from FY2021. Specific net CO2 emissions were
675 kg of CO2 per tonne of cementitious product, the same as in
FY2021.

Environmentally-Conscious
Management

Efforts to Save Energy

Waste heat recovery power generation associated with thegroup’s cement production was 425 GWh in FY2022, a roughly
5GWh decrease on FY2021. Its ratio to all electricity consumed at
our cement plants was about 12.5%. Assuming an emission factorof 0.69 t-CO2/MWh if we were to purchase electric power froman external source, equates to a reduction in CO2 emissions ofapproximately 293 thousand tonnes.

0

Reference guidelines: “GCCA Sustainability Guidelines for the monitoring and reporting of
CO2 emissions from cement manufacturing Ver. 0.1” GCCA

63

ESG Initiatives That Support Creation of Corporate Value
Environmentally-Conscious Management(%)

Ratio of Alternative Fuels and Biomass Fuels

20
15

13.5

10
5
0

GCCA

Alternative fuels
Biomass fuels

13.8

14.1

14.2

11.6

12.0

12.3

12.2

1.8
2018

1.8
2019

1.8
2020

2.0
2021

(%)

Ratio of Clinker Used to Cement Produced

100

15.3

80

82.9

82.8

82.8

82.4

83.0

2018

2019

2020

2021

2022

60

13.3

40
20

2.0
2022 (FY)0(FY)

Reference guidelines: “GCCA Sustainability Guidelines for the monitoring and reporting of
CO2 emissions from cement manufacturing Ver. 0.1” GCCA

Reference guidelines: “GCCA Sustainability Guidelines for the monitoring and reporting of
CO2 emissions from cement manufacturing Ver. 0.1” GCCA

In FY2022, alternative energy and biomass energy accounted
for about 15.3% of energy used in the group’s cement
production, an increase of 1.1% on FY2021. Assuming anemission factor of 0.096 kg-CO2/MJ for coal, our use of alternative
energy resources equates to a reduction in CO2 emissions ofapproximately 1.3 million tonnes.

The ratio of clinker used in the production of cementcompared to the amount of cement produced in FY2022 was
83.0%, an increase of 0.6% from FY2021.

Use of Alternative Raw Materials

We contract the delivery of our raw materials and products
to transportation companies and are striving to reduce CO2
emissions as a specified consigner designated under theJapanese Energy Saving Act. Major efforts include implementing
a plan to transport goods on return trips, encouraging drivers to
eco-drive, and promoting energy efficient devices such as digitaltachometers and eco-tires on vehicles. In shipping, we continue
to pursue energy efficiency technologies and operate new shipsthat are equipped with various energy-saving features. We arealso supporting energy-saving operations for conventionally
powered ships.
Our FY2022 CO2 emissions were roughly 3% higher than in
FY2021 due to an increase in shipping volume.

Reduction of Specific CO2 Emissions by Replacing
Limestone with Alternative Raw Materials
GCCA(kg-CO2/t-clinker)

10
8

8.4

8.2

8.2

2018

2019

2020

9.5

8.9

6
4
2
0

2021

2022

(FY)

Reference guidelines: “GCCA Sustainability Guidelines for the monitoring and reporting of
CO2 emissions from cement manufacturing Ver. 0.1” GCCA

Specific CO2 emissions from alternative raw materials insteadof limestone was 8.9kg-CO2/t-clinker in FY2022, a decreaseof 0.6kg-CO2/t-clinker from FY2021. Our use of alternative
raw materials equates to a reduction in CO2 emissions ofapproximately 240,000 tonnes.

Reducing CO2 Emissions during Transportation
GRI305-3



CO2 Emissions by Mode of Transportation (FY2022)

Non-consolidated

Mode oftransportation

Ship

Tonnagetransported(thousand t)

16,574Truck

14,234

Total

36,020Railway

64

GCCA

5,212

Average
Distance
Transported
(km)

492
55
26

252

Transported
tonnekilometers(thousand tkm)

CO2 emissions(thousand t)

784,29445

8,160,378
134,275

9,078,947

111
3

159

External Economic Benefits Derived from the RecycledWaste-to-Cement System

External Economic Benefits (FY2022)

Non-consolidated

Inventory
MarketPrice(Yen/t)Climate change
mitigation

External
Economic
Benefit(Hundredmillion yen)CO2

1,896,090

3,000

57

Depletion of energy
resources

Crude oil

110,455

18,40020

Depletion of mineral
resources

Naturalresources

4,792,457

1,000

48

Shortage of landfills

Waste

5,216,145

15,000

782

Total

908

(Unit: hundred million yen)

1,200
900

892

908

2020

2021

2022

600
300

(FY)

Environmental Accounting for One of Our Projects - Installation of a Waste Plastic Receiving and Processing
Facility for Kilns No. 7 and No. 8 at Kamiiso Plant

Appropriate Use of Water
Resources

912

Providing Environmentally
Sound Products and Services

Reduction(t)Conserving and Restoring
Biodiversity

Inventory

Impact- We have developed a unique evaluation method toestimate the contribution to overall environmental
benefit to society by utilizing waste materials from otherindustries.
- We use information, including data collected for the
GCCA Cement CO2 Protocol, to calculate the reduction
in consumption of fossil energy and natural resources
associated with the use of waste and by-products.
- Economic benefits are calculated by multiplying
reductions in consumption (effects of environmental
conservation) by set market prices.
The market values of the inventory items are set at
FY2001 levels, and are estimated on the basis of thefollowing considerations.
CO2: 3,000 yen/t (a hypothetical CO2 emission tax rate).
Crude oil: import price. Natural resources: estimatedprice. Waste: controlled landfill costs in the Tokyo area.
- A portion of the EEB is accounted for in our profit and loss
statement.

Disclosure Regarding
Recommendations of the TCFD

We use the external economic benefit (EEB) evaluation
method to express, in monetary terms, our evaluation ofsocioeconomic benefits from environmental impact reduction
due to increased recycling of waste accepted from outside thecompany. We calculate that we created a social benefit of 90.8
billion yen in FY2022. The amount of waste and by-products usedin FY2022 increased from the previous fiscal year, leading to an
approximate 2% increase in economic benefit on the previous
fiscal year.

Taiheiyo Cement’s External Economic Benefit
Evaluation

Environmentally-Conscious
Management

Environmental Accounting

GRI201-2

As part of our efforts towards carbon neutrality, we are currently expanding the use of waste
plastic as an alternative energy source to coal. As one of the achievements of these efforts, a waste
plastic receiving facility and kiln blowing equipment were installed at the Kamiiso Plant's No. 7 andNo. 8 kilns at the end of 2021.
We have established a regular container route between the Tokyo metropolitan area and apublic wharf near the Kamiiso Plant for the transportation of waste plastics in order to reduce theenvironmental impact. We aim to further reduce our CO2 emissions and environmental impact byincreasing the amount of waste plastic processed as an energy substitute.

Investment amount: Approx. 1.5 billion yen

Reduction in CO2 emissions: 100,074 tons/year

Kamiiso Plant
Waste Plastic Receiving and Processing
Facility

65

ESG Initiatives That Support Creation of Corporate Value
Environmentally-Conscious Management

Improving Energy and Resource Efficiency
ApproachThrough our "Recycled-Waste-to-Cement System", whichsafely reuses large amounts of waste and by-products generated
by industrial activities as well as general household waste in
the cement manufacturing process, we have links with manyindustries and local communities and are contributing to thecreation of a recycling-based society.

Resource Recycling with Industries
Electric Power Utilities

We accept coal ash produced at coal-fired power plants anduse it as a substitute for clay as a raw material in cement. In
addition, we operate ash centers* to use more ash effectively.
We also supply the power plants with limestone powder which
is used to scrub the harmful sulfur oxides from the exhaustproduced by the burning of coal. The reaction of the limestone
powder with sulfur oxides forms by-product gypsum, which we
make effective use of as a raw material for cement.

* Ash centers are distribution sites that combine collection/transportation (transshipment
and storage) and intermediate-processing (powder mixing) functions. They receive coalash from coal-fired power plants and ensure a stable supply to our cement plants, while
also supplying diverse products that meet user needs.

We use a set of three technologies related to systems forrecycling municipal waste and strive to make effective use of such
resources and resolve environmental issues.

- Incineration Residues Recycling System

A system for recycling municipal waste incineration residues(incineration ash and dust) as a raw material for ordinary Portland
cement.

- AK System

A system for recycling household waste and generalbusiness waste as alternative raw materials and fuels for cement
manufacture. The waste is preprocessed through biologicalbreakdown (fermentation) using a waste recycling kiln.

- Ecocement System

Ecocement is a new type of cement made primarily frommunicipal waste incineration residues. The system uses morethan 500 kg of ash and other waste materials per tonne of
Ecocement. It also has an urban mining function to recoveruseful metals and precious metals contained in municipal waste
incineration residues and waste.

Resource Recycling with Industries

Steelmakers

In the iron and steelmaking process, impurities are removed
from iron ore to make iron.
We supply the limestone and quicklime used in the refining
process. We also use blast furnace slag and steel slag, by-productsthat remain after the refining process, as raw materials for cement
and as cement admixtures.

Limestone
powder

Thermal Power Plant
Coal ash

Limestone
powderGypsumSteel Mill
Slag, iron slag,
blast furnace dust,etc.

Ash Center

Cement Plant

Construction Soil

Traditionally this soil had been dumped into landfills. By
making effective use of it as a cement raw material, we contributeto the conservation of natural resources and also help to prolong
the life of landfills. We have also set up intermediary facilities thatorganically link sites where construction soil is produced to ournationwide plants, and strive to make them effective resources.

Resource Recycling with Local Communities

In addition to industrial waste, we also use general waste
generated by local governments, municipal waste incineration
residues, water purification sludge and sewage sludge as raw
materials and fuel to manufacture cement . The total amount ofwaste generated in Japan in FY2021 was 41.67 million tonnes,of which approximately 76% was incinerated, and 3.64 million
tonnes of unused incineration residues were buried in landfill
sites.

66

Useful metals

Resource Recycling with Local Communities
Portland Cement Plants

Municipal
waste

Incineration
plant

Incineration
residues frommunicipal waste

AK System

Incineration Residue
Recycling System

Ordinary
PortlandcementMunicipal waste is recycled at cement Municipal waste incineration ash isplants as fuel and raw material forrecycled at cement plants as a raw
ordinary Portland cement.
material for ordinary Portland cement.

Ecocement Plant
Ecocement System

Incineration residues from municipal waste are recycled
as raw materials for Ecocement

Useful metals
Precious metals

Ready-mixed
concrete plants

Concrete products
manufacturing plants

EcocementRelevant SDGs

 ain Waste and By-products Used in Cement Plants
M
Non-consolidated(FY2022)

GRI301-1, 2

Consumption (kg/t-cement)

413.4

409.4

409.5

402.7

405.2

267.3

2001

2018

2019

2020

2021

2022

2,059,809

133.7

Blast furnace slag

1,107,289

71.8

By-product gypsum

522,078

33.9

Unburned ash, dust

504,71132.7

Dirt and sludge

360,317

23.4

Construction soil

185,221

12.0

Waste oil

160,538

10.4

Wood chips

26,525

1.7

Waste plastic

199,484

12.9

Water treatment plant sewage sludge and ash

363,515

23.6

Incineration residues from municipal waste

144,244

9.4

Municipal waste

18,958

1.2

Other591,767

38.4

Total

6,244,458405.2

Raw material-related

5,686,938

369.0

Fuel-related

557,520

36.2

Total

6,244,458

405.2

(FY)

Limestone

Truck

Raw mill

Railway

Finish millRotary kiln

Various otherraw materials

Ship

Raw Material Preparation Process

Burning Process

Finishing Process

Transportation

Limestone, iron waste, etc.,
are mixed together, dried
and ground in a raw mill.

After preheating, the materials
are burned in a rotary kiln. The
resultant material is then rapidly
cooled to form an intermediate
product called clinker.

A small amount of gypsum
is added to the clinker andground in the finish mill to
produce cement.

The cement is thentransported by ship, truckor railway freight car.

Appropriate Use of Water
Resources

Waste and By-products Used in Cement Manufacturing Processes

Providing Environmentally
Sound Products and Services

500
400
300
200
100
0

Coal ash

Conserving and Restoring
BiodiversityT rends in Use of Waste and By-products per Unit
Non-consolidated
Production

Total
Rate
Amount (t) (kg/t-cement)

Waste and By-products

Disclosure Regarding
Recommendations of the TCFD

All of our directly operated cement plants in Japan recycle
waste and byproducts into alternative raw materials and fuels
for cement. This helps to prolong the life of landfills, preventthe depletion of natural mineral resources, limit greenhousegas emissions and reduce emissions of pollutants into theatmosphere.
In FY2022 we accepted a greater volume of coal ash, blast
furnace slag, by-product gypsum, construction soil, waste oil andwaste plastic. On the other hand, we accepted less unburned ash,soot, dust, dirt, sludge, wood chips, water treatment plant sewage
sludge and ash, municipal waste incineration ash and generalwaste, but the input of recycled waste and by-products was 6,244
thousand tonnes, an increase of about 136 thousand tonnes on
the previous fiscal year. This means we recycled 405.2 kg of waste
and by-products per tonne of cement produced.

Environmentally-Conscious
Management

Performance of Recycled-Waste-to-Cement
SystemWaste and by-products used
Raw materials

Blast furnace slag, coalash, dirt and sludge, nonferrous slag, steelmaking
slag, construction soil,
molding sandRaw materials

Incineration residues frommunicipal waste, sewage sludge

Fuels

Waste oil, waste plastic, usedtires, wood chips, RDF (municipal
waste pellets), recycled oil

Gypsum

FGD gypsum, chemicallyderived gypsum

Admixtures

Slag powder, fly ash

Reference:
Resources required to
product one tonne of cement
Limestone:
Clay:
Silica:Iron waste:
Gypsum:
Coal, etc.:
Electric power:

1,200 kg
226 kg
71 kg
29 kg
39 kg
112.3 kg
107.1 kWh67

ESG Initiatives That Support Creation of Corporate Value
Environmentally-Conscious Management

Water Contamination

Reducing Environmental Impact
To continue being a sustainable company, we aim to coexist
and prosper with local communities by conducting responsible
business activities through the prevention of environmental
pollution, effective use of resources, reduction of waste generated
on-site, and the proper management of chemical substances.

Most of the water discharged from our plants to public
waters is cooling water and not polluted as defined in the Water
Pollution Control Act. At our cement plants all water resources
are reused as circulation water to minimize the impact ofwater discharge into public waters. Moreover, we are installing
sedimentation tanks, water-oil separation tanks, oil film detectors,
pH meters and suspended solid sensors on water dischargeroutes that connect to public waters.

Preventing Environmental Pollution

Example of Water Circulation Flow at a Cement Plant

Approach

GRI305-7

Rainwater

Air Pollution

0

2011

80

1,282

1,187

1,227

67

63

100
75
50

100

30

27

30

42
20

39
16

2018

2019

2020

2021

2022 (FY)

Monitoring Rate

(%)

150

1,193

50
0

GCCA

96.0 95.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
84.7
84.0
84.2
83.3
82.4
59.0

2011

2018

2019

2020

2021

2022 (FY)

Percentage of clinker volume manufactured in a kiln equipped with continuous NOx measurement
Percentage of clinker volume manufactured in a kiln equipped with continuous SOx measurement
Percentage of clinker volume manufactured in a kiln equipped with continuous dust measurement

Reference guidelines: “GCCA Sustainability Guidelines for the monitoring and reporting of
CO2 emissions from cement manufacturing Ver. 0.1” GCCA

68

Seawater

Sedimentation
tank

Separationtank

Oil film detectors,
turbidimeters, pH
metersStreamchannelCooling
tower
On-site power
generation

Ocean

Soil Contamination

In FY2001 Taiheiyo Cement evaluated the risks associatedwith cement plants that may be sited on contaminated groundby appointing an expert consultant to undertake a soil history
survey. We are continuing to conduct drilling surveys, startingwith the higher-risk locations, to verify whether or not the soil iscontaminated. Actions have been taken as necessary based on thefindings.
We are also working to eliminate the possibility of soil
contamination via measures to prevent the leakage of wastewaterfrom scrapyards or fluid from oil tanks, acid/alkali tanks, pipes
and so forth.

Reducing Waste
GRI306-2

250Water recovery
cisterncement kilns

500

62
47

1,197

Equipmentcooling, etc.

1,000

1,300

(g/t-clinker)

Watersprinklers

1,500

SOx (right axis)
Dust (right axis)

Water cistern

NOx (left axis)(g/t-clinker)

River waterSpecific Emissions of Clinker for Main Pollutants GCCA

Groundwater

Air pollutants generated from cement production are primarilyNOx, SOx and dust in combustion gases emitted from cementkilns. To ensure the proper management of these substances
we strive to reduce air pollutant emissions through measures
such as installing equipment to continuously monitor emission
concentrations, improving NOx reduction systems and installing
bag filter equipment to capture dust emissions. Our target is tomaintain our FY2011 emissions levels.
In FY2022, emissions of NOx, SOx and dust were all lower
than the figures for FY2011, our benchmark year. Furthermore,
the level of SOx emissions was very low compared to the limit set
under the Air Pollution Control Act.

Gutters

Initiatives at Plants and Quarries
Our cement plants and quarries reduce the amount of waste
handled by disposal contractors by reusing waste from operations
as material for cement production. We also endeavor to reduce
waste that ultimately ends up in a landfill via measures such as
the use of chromium-free kiln bricks.

Relevant SDGs

 eported Levels of Dioxins and Ferric ChlorideR
Non-consolidated
Emissions100
80

Emissions

60

49

40
20

1

2018

2019

13
2020

2021

2022

(FY)

* Regarding the aggregation scope, see Cement Manufacturing Process (Material Balance)

P.121

Initiatives at Service Stations

Recycling ratioNon-consolidated

(%)

100
80
70
60
50

59.6
2018

77.9

80.3

2020

2021

83.5

65.7

2019

2022

(FY)

Our special purpose subsidiary, Taiheiyo Service Corporation,
recycles the company’s used copy paper for efficient use in-house.
Approximately 320,000 sheets of A4 size paper were recycled in
FY2022.

Appropriate Management of Chemical
Substances
GRI306-2

Pollutant Release and Transfer Register (PRTR)

The PRTR Law requires that we report on equipment installedat our Kumagaya plant for the washing of municipal waste
incineration ash. This washing process uses water, and our total
discharge of dioxins and ferric chloride into public waterways are
as shown below.

Treatment of High-concentration PCB Waste Non-consolidated(No. of machines)

Waste
Capacitors
Transformers
Electrical ballasts
Total

Stored in
FY2021
New Targets(as of March for FY2022
31, 2021)

2
0
936
938

2
1
514
517

Treated in
FY2022

0
0
502
502

Appropriate Use of Water
Resources

Initiatives at Offices

Providing Environmentally
Sound Products and Services

90

We properly store and dispose of high and low concentrationsof PCB waste in accordance with the Amendment to the Law
concerning Special Measures for Promotion of Proper Treatmentof PCB Wastes (revised in 2016), hereinafter referred to as the
PCB Special Measures Law.
For high-concentration PCB waste with an early disposal
deadline as stipulated by the PCB Special Measures Law, we
signed a processing contract with the Japan Environmental Safety
Corporation (JESCO) in 2006 and have prioritized processing.
Pollutants such as electrical ballasts stored at the Kumagaya
Plant, Saitama Plant and the former Chichibu Plant, as well asat the Chichibu quarry and branch office service stations, were
processed in FY2022. Transformers and capacitors containing
high-concentration PCB in the Kyushu, Chugoku and Shikoku
area were processed before March 31, 2018. However, wehave confirmed that three unprocessed capacitors still remainin that area. We have submitted a report to the prefectural
governor about the three capacitors, and they are being stored
appropriately until the local government decides on thedisposal method for equipment that has passed its deadline forprocessing.
Pollutants such as transformers and capacitors stored at the
Saitama Plant and electrical ballasts stored at the Kamiiso Plant,
Ofunato Plant, Kumagaya Plant, Saitama Plant and Fujiwara Plant
are scheduled for processing in FY2023.

Conserving and Restoring
Biodiversity

Service stations (SS) reduce the waste handled by waste
disposal contractors by returning any residual cement thatremains in silos after switching the cement products. Returned
cement is recycled as raw material. In FY2022, the recycling rate
was 83.5%, an increase of 3.2% from the previous year.

Management of PCB Waste

Disclosure Regarding
Recommendations of the TCFD

0

5

Dioxins (mg-TEQ)
Ferric chloride (kg)27

Reported Levels
FY2020
FY2021
FY2022
0.0
0.0
0.0
152
170
198

Environmentally-Conscious
Management

Volume of Waste to Landfill*(t)Stored inTreatment
FY2022
Scheduled(as of March for
FY202331, 2022)

4
1
948
953

1
1
948
950

69

ESG Initiatives That Support Creation of Corporate Value

Disclosure Regarding Recommendations of the TCFD
We announced our support for the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) in
June 2019 and since then performed scenario analysis. The results of our first scenario analysis were published in 2020.
Following the Glasgow Agreement at the Conference of the Parties to the United Nations Framework Convention on
Climate Change (COP26) in November 2021, we updated the CO2 reduction scenarios applicable to us to 1.5°C and 4°C.

TCFD Content Index
Governance

Recommended Disclosures

The organization’s governance around climate-related risks
and opportunities

Our Disclosures
Corporate Governance P.104
Sustainability Management P.56
Environmentally-Conscious Management P.60
Risk Management and Compliance P.110

Strategy

Medium-Term Management Plan P.24
Delivering Carbon Neutrality P.26
Business Strategies P.40
Risks and Opportunities P.22

Risk Management

CSR Management Promotion System P.107
Risk Management and Compliance P.110
Environmentally-Conscious Management P.60

Metrics and Targets

Delivering Carbon Neutrality P.26
Mitigating Climate Change P.62
Environmental Accounting P.65
GCCA Key Performance Indicators P.128

The actual and potential impacts of climate-related risks andopportunities for the organization’s businesses, strategy andfinancial planning
How the organization identifies, assesses and manages
climate-related risks
The metrics and targets used to assess and manage climaterelated risks and opportunities

Setting Scenarios

We focused our scenarios, evaluation and analysis on thebusiness risks and opportunities that climate change will poseto the Group by the year 2050. We identified events that willmaterially impact climate-related risks and opportunities, basedon climate-related, long-term scenarios founded on science,such as the World Energy Outlook (WEO) and Energy Technology
Perspectives (ETP) published by the IEA and The Fifth Assessment
Report (AR5) published by the IPCC. Then we created two
climate-related scenarios, 1.5°C and 4°C, that will have impact
on the business operations of the Group, along with appropriate
carbon price assumptions for the 2030s using the IEA World
Energy Outlook 2021 as a reference. To follow up, we analyzed
the business impacts in every scenario by size and time horizon(short, medium and long).

Process of Selecting Material Climate-related
Risks and Opportunities and Scenarios
STEP

1

STEP

2

STEP

3

STEP

4

STEP

5

1.5°C scenario(consistent with the Paris Agreement)

Reference Scenarios
Assumed Carbon Price70

IEA net-zero Emissions Scenario (NZE)
Carbon Emissions Pathway: RCP 2.6
US$130 (approx. 17,550 yen)/tonne-CO2

Conduct a benchmark survey to identify climaterelated risks and opportunities for the cement
industry and identify relevant drivers
Determine the causal relationships between climaterelated drivers, interim outcomes and implications.
Then identify key drivers
Create climate-related scenarios for each key driver,referring to the published climate-related long-term
scenarios that were developed based on scientific grounds
Evaluate the anticipated business impacts in eachscenario
Review responses to the business impacts, which are,in our view, positively or negatively significant to ourevaluation

4°C scenario(ineffective response to climate change)
IEA Stated Policies Scenario (STEPS)
Carbon Emissions Pathway: RCP 8.5
US$30 (approx. 4,050 yen)/tonne-CO2

Scenario Overview
Business Impact
Category

Medium

Large

Small

Medium

1.5°C Scenario
Negative Positive

Drivers
Introduction of Regulated Carbon Pricing
Reinforcement of regulations on CO2 emissions

Small

4°C Scenario
Negative Positive

Disclosure Regarding
Recommendations of the TCFD

1. Policy andRegulatory

Large

Opportunities in the execution of our strategy
and their positive impact on our business

Rising fossil fuel prices
2. Market

Increased demand for low-carbon construction materials
Reduced operation of coal-fired thermal power plants

4. Reputation

Increased awareness toward carbon neutrality
Chronic - Rising average temperatures and sea levels
 Acute - Intensification of climatic events(e.g., flooding, heat waves)

Scenario Analysis Overview

1. Policy andRegulatory

Reliable and stable carbon pricing consistent with our Carbon Neutral
Strategy 2050 is introduced. This facilitates long-term investment
decisions toward carbon neutrality.

4°C Scenario

In a scenario of ineffective response to climate change there is amismatch between our efforts towards carbon neutrality and theregulations applicable to the cement industry, which would put us
at a competitive disadvantage. Profits from the development of theinnovative technologies that we promote are limited. In addition, thephysical effects of climate change are becoming more severe, such as
frequent extreme climatic events.
Limited and unstable carbon pricing delays the development andimplementation of our innovative technologies.

Initiatives towards carbon neutrality in the construction value chain
progress and the demand for low-carbon and recycling-based
construction materials increases. The availability of coal ash decreases
as the operation of thermal power plants decreases, but we are
mitigating this risk by progressing the diversification of alternative raw
materials, such as the use of construction soil.

There are limited regulatory incentives for the use of low-carbon
products, which limits the increased use of our low-CO2 cement. The
use of by-products such as coal ash helps promote the increased use ofblended cement to some extent.

4. Reputation

In the short term, the cement industry faces a reputational risk as anindustry with high CO2 emission intensity. However, our credibility andreputation will improve as our Carbon Neutral Strategy 2050 is steadily
implemented and our efforts are recognized as contributing to climatechange mitigation.

Delays in the development of innovative technologies and the
incentives and infrastructure that are necessary for their full-scale
deployment poses additional challenges to the delivering of carbon
neutrality and gradually increases reputational risk.

5. PhysicaleventsMitigation measures become necessary for production sites and supply
chains affected by extreme rainfall and flooding. On the other hand, acertain level of demand for construction materials for restoration andreinforcement work can be expected.

2. Market

3. Technologies

The practical application of our innovative technologies toward carbon
neutrality, such as low-CO2 cement and C2SP kilns, is progressing. In
addition, the improvement of technologies related to alternative energy
and alternative raw materials contributes to improving our profitability.

Appropriate Use of Water
Resources

Scenario
Overview

1.5°C Scenario

In the scenario consistent with the Paris Agreement, government andindustry are working together toward carbon neutrality. The cement
industry is focusing on developing innovative technologies. CO2
capture, utilization and storage technologies are being developed
consistent with the industry's transition to carbon neutrality. In addition,
the physical effects of climate change are being addressed to a certain
extent through national resilience policies and other measures.

Providing Environmentally
Sound Products and Services

5. PhysicaleventsConserving and Restoring
Biodiversity

3. Technologies

Progress in the development of CO2 capture andutilization technology
Improved technologies for resource recycling andadvanced circular economies

Environmentally-Conscious
Management

Risks to observe and their negative impact on
our business

While the gradual introduction of C2SP kilns is necessary to reduce
direct emissions at our plants, considerable additional effort is required
due to delays in the development of hydrogen infrastructure for theutilization of the captured CO2.

While demand for construction materials for restoration andreinforcement work due to heavy rain and flood damage can be
expected, extreme weather events pose a significant threat as theysignificantly increase in frequency and intensity, increasing the risk ofsignificant financial impact on production sites and supply chains.

71

ESG Initiatives That Support Creation of Corporate Value

Conserving and Restoring Biodiversity
We recognize that our quarrying activities are most closely related to biodiversity.
We are aiming to achieve nature positive by working with local communities in the development and operation ofquarries and the use of old quarry sites.

Environmental Impact of Quarry Operations

Outline of IUCN Protected Area Categories

Reducing Environmental Impact

IUCN Categories

GRI304-1, 2, MM1, MM2

Cement production starts with quarrying limestone, theprimary raw material for cement. We also quarry many mineral
resource products used as aggregates and industrial raw
materials.
Because forests are cleared, topsoil is excavated and limestone
ore is extracted at a quarry, it inevitably affects the environment
and ecosystem of the quarry’s area. However, the limestone,rocks and sand we quarry only require crushing for particle
size adjustment and sorting, and do not require any refining
processes. Consequently, our operations are unlikely to cause
chemical contamination to surrounding areas. In addition, we
minimize the amount of waste stones generated during ourlimestone quarrying by using them as construction materials.

Limestone Quarries of the Group

Limestone Quarries of the Group
Quarries

Japan
USA
Other

11
3
3

Site area (ha)

2,608
1,281
380

No. of quarries
that require
special care*100* “Require special care” refers to quarries that fall under Category IV or higher in terms of
IUCN Protected Areas

Using the Integrated Biodiversity Assessment Tool (IBAT)
provided by BirdLife International, we checked if any of ourgroup’s limestone quarries are in any of the protected areas
defined by the International Union for Conservation of Nature(IUCN). We found that none of our quarries are within or adjacent
to Protected Area Category III or lower category areas. However,in Japan, one quarry is within a Category IV area and two are
adjacent to Category IV areas.
All these quarries have obtained the necessary licenses
from their local governments and conduct environmentallysound quarrying operations. They have no pending litigations
concerning biodiversity or other environmental issues.

72

Ib: Wilderness
Area
II: National Park
III: Natural
Monument or
FeatureⅣ: Habitat/Species
Management
Area

Areas that have outstanding natural features
or natural features of cultural value.
Areas that require active interventions
to maintain habitats or address therequirements of particular species.

Activities to Reduce Environmental Impact
GRI103-2, 3, 304-1, 2, 3, 4, MM1

The group operates 17 major limestone quarries around theworld, which are located near to our integrated cement plants.
The total site area* of the quarries is 4,269 ha (Japan: 2,608 ha;
USA: 1,281 ha; other regions: 380 ha).

RegionIa: S trict Nature
Reserve

OutlineAreas that have outstanding or representative
ecosystems or have geographical or
physiological features or characteristic species.
Large unmodified or slightly modified areasthat retain their natural character.
Areas set aside to protect the environmental
integrity of the ecosystem.

Throughout the group we believe that balancing theconservation of ecosystems in local communities anddevelopment of the communities themselves are important inquarry operations. With this belief, we hold discussions with local
governments, local communities and academics while operating
quarries. This helps to ensure we not only prevent pollution but
also conserve biodiversity and water resources while minimizing
our environmental impact.

Environmental Impact Assessment

In developing quarries, we conduct ex-ante assessmentsof environmental impact of quarry developments basedon environmental research of the development area suchas on biodiversity and water resources. We then discuss
the results of the research with local governments, local
communities, academics and other stakeholders before
finalizing a development plan. Moreover, we regularly monitor
the surrounding environment during the development andoperations of quarries, and report to our stakeholders on theenvironmental impact that the quarries have there arenthere
areeas.
For instance, in the new development of a quarry in the
Ofunato Quarry, Iwate Prefecture, we conducted environmental
assessment for approximately ten years. We focused onpreserving rare wildlife species in cooperation with external
experts and local residents. Furthermore, we minimized noiseand vibration during the development work and also limited thetraffic hours for trucks used in construction work. In addition, evenafter development work begins, we carry out regular assessments
and implement environmental protection measures.

Relevant SDGs

Biodiversity Protection

Conserving and Restoring
Biodiversity
Providing Environmentally
Sound Products and Services

Quarry face greening (Buko Quarry)

Water Resource Conservation

In quarrying we also pay close attention to protecting not
only terrestrial plants but also water resources such as rivers andnatural springs in an effort to contribute to biodiversity. Fromthe perspective of conserving water resources, spring waterand rainwater is discharged from quarrying after treatment tominimize impact on the environment outside of the quarrying
area by passing through regulatory pond. In some quarries
we drill wells for domestic water and supply this water to local
communities for everyday use.

Appropriate Use of Water
Resources

When environmental impact assessments determine that
protection is required, we protect rare species and the like via
measures such as installing protective equipment, transplanting
and restricting development work.
Since 1972, at the Minowa Quarry of Chichibu Taiheiyo
Cement Corporation, we have been protecting and nurturing
rare species of native plants on Mt. Buko, which is located in
Chichibu City and Yokoze Town in Saitama Prefecture. We createda botanical garden at the quarry and, together with local experts
and other people, we preserve 68 native plant species there
while increasing the plant population. Additionally, our Central
Research Laboratory continues to research and develop ways toprotect and propagate plants, and to verify the genetic diversityof wild specimens using biotechnology. Since 2016, in the courseof developing the Ofunato Quarry, we have been working withexperts to protect and propagate various rare plant species intheir native biospheres by creating a botanical garden on the sideof the office of Ryushin Mining Co., Ltd.

Disclosure Regarding
Recommendations of the TCFD

Raptors survey (Ofunato Quarry)

Rocks and soil are exposed in working quarry areas, and novegetation is left. However, if no quarrying work is expected forsome time, we strive to green such areas as soon as possible.
We also plant vegetation in excavated topsoil stockyards and inplaces where the contours of the soil will remain unchanged for awhile. At some quarries, at the request of the local community, we
restore greenery if operations have been suspended for several
months.
We basically plant vegetation that is native to the region. In
our greening of quarries in Japan in FY2022, we scattered seeds
over a total area of 36,829m2 (3,429m2 more than the planned
33,400m2) and planted 2,540 saplings (380 more than theplanned 2,160).
Other efforts include participating in an annual tree planting
campaign with contractors and local residents to improveawareness of quarry development and greening activities.

Environmentally-Conscious
Management

Greening Quarries

Use of Old Quarry Sites

Rare plant conservation area (Ofunato Quarry)

We reuse old quarry sites where operations have completely
ended after consultation with the local community. When
greening a site we strive to restore the original vegetation.

73

ESG Initiatives That Support Creation of Corporate Value

Providing Environmentally Sound Products and Services
Providing environmentally sound products and services that contribute to resource conservation and CO2 reduction
in response to society's need for environmental conservation, by leveraging the advantages of cement and related
technologies we have cultivated over the years.

Advancement

Environmentally sound limestone-blended cement

Our U.S. group company, CalPortland Company, haslaunched a new product series called ADVANCEMENT, which
is a blend of Portland cement and limestone. By replacing up
to 15% of clinker with limestone ADVANCEMENT can reduce
CO2 emissions by approximately 10% compared to ordinary
Portland cement as specified by ASTM C150.
ADVANCEMENT complies with ASTM C595 and AASHTO
M240 as TYPE 1L and is also certified by the California
Department of Transportation. This allows ADVANCEMENT
to be widely used in infrastructure construction, including
highways. Following test marketing in 2021, CalPortlandplans to gradually switch from ordinary Portland cement (TYPE
II/V) produced at its Mojave Plant to ADVANCEMENT (TYPE 1L)
from 2022, which will reduce CO2 emissions by approximately
95,000 tonnes while producing approximately 1.2 million
tonnes of ADVANCEMENT annually.
There are also a variety of products in the ADVANCEMENT
series to match application and performance requirements.
ADVANCEMENT LT is light-colored and aesthetically pleasing
while maintaining the low-CO2 emission performance,and can be used in architectural applications to meet theaesthetic expression of architects and designers. In addition,
ADVANCEMENT HS is suitable when particularly high sulfate
resistance is required. ADVANCEAMENT is a series of low-CO2
emission cement products that are tailored to the applicationand performance requirements.

ADVANCEMENT delivery trucks

74

Thermal Insulating Paving Blocks"Thermalbarrier ILB”

Taiheiyo Precast Concrete Industry Co., Ltd.

Thermalbarrier ILB is a paving block that suppresses theabsorption of heat from solar radiation, thereby reducing therise in temperature and heat retained in the road surface andmitigating the hot environment in pedestrian and roadsideareas. The surface layer of this block is made of material thatis highly effective in reflecting near-infrared radiation, andthe base layer is made of concrete with cavities to reduce theabsorption and retention of heat from solar radiation in thepaving blocks and roadbed. This contributes to mitigating
the heat island effect by reducing not only the daytime hot
environment but also heat radiation at night.
The performance of the ThermalbarrierILB was confirmed tobe effective in reducing road surface temperature by 11.5°C or
more in a comparison test with asphalt pavement conductedby the Japan Interlocking Block Pavement Engineering
Association, and was certified as "cool block paving". In
addition to its excellent thermal insulation performance,
the Thermalbarrier ILB series also includes a product that,
depending on the specifications of the base concrete layer,
provides the block itself with water retention performanceand permeability to allow rainwater and other substances topermeate into the roadbed. We also effectively use crushed
roof tiles, molten slag produced in the cooling process afterincineration of municipal waste, and glass cullet made fromprocessed wine bottles, which would normally be disposed ofas industrial waste, as recycled aggregates.
A recent example of installation of Thermalbarrier ILB is
its widespread use in the sidewalks around the competition
venues for the 2020 Tokyo Olympics and Paralympics, etc.

Thermalbarrier ILB laid in the plaza in front of the Meiji Memorial Picture Gallery
in Jingu Gaien

Relevant SDGs

Working Towards Early Recovery Based on
Comprehensive Partnership Agreements

since then we have processed approximately 20,000 tonnes intotal as of March 2021.
Through this we are promoting the regional treatment ofdisaster waste by utilizing our domestic cement plants andmarine transportation network and providing services that willcontribute to early recovery.

Flood-damaged rice straw caused by Typhoon Hagibis in 2019
(10 municipalities in Miyagi Prefecture)

Providing Environmentally
Sound Products and Services

Regional treatment of wood chips damaged by Kumamoto earthquake(Myojo Cement Co., Ltd)

Appropriate Use of Water
Resources

We have been receiving and treating disaster waste
generated by large-scale disasters. The 2011 Great East Japan
Earthquake brought recognition to the regional treatment
of disaster waste performed by cement plants. We haveaccepted and treated approximately 1 million tonnes of debris
and other disaster waste. Tsunami debris was pre-treated toremove salt to avoid affecting the quality of cement.
Since then, we have treated disaster waste generated by
the 2014 Hiroshima landslides and subsequent disasters
including the Kumamoto Earthquake, torrential rains inwestern Japan, and Typhoon Hagibis in 2019 at a total ofnine domestic cement plants owned by us and our groupcompanies.
Based on the knowledge gained from the Hiroshimalandslides, we have been working with local governments
where our cement plants are located to conclude"comprehensive partnership agreements" regarding
resource recycling and disaster waste treatment so that wecan promptly treat disaster waste regionally in the event of
a disaster. Since signing the first agreement with Inabe City,
Mie Prefecture, in 2015, we have been expanding the scope ofthese agreements.
Meanwhile, based on the idea of accepting and treating
disaster waste by utilizing all of our cement plants locatedthroughout Japan via regional transportation and treatment,
in 2019 we signed a comprehensive partnership agreementwith Miyagi Prefecture, where we do not have a cement plant.
When Typhoon Hagibis caused extensive damage centeredaround Miyagi Prefecture later that year, as mentioned
above, we accepted a large amount of flood-damaged ricestraw immediately after it was harvested and treated it at our
Ofunato and Saitama Plants based on this agreement, andConserving and Restoring
Biodiversity

Background and Achievements

Disclosure Regarding
Recommendations of the TCFD

Disaster waste, such as debris and wood chips generated
by natural disasters such as earthquakes and floods, is a major
obstacle to the recovery of the affected areas. Prompt disposalof disaster waste is essential for early recovery. Our cement
plants can effectively utilize this waste as raw material for
cement and as an energy source. Furthermore, comprehensive
partnership agreements with municipalities other than thosewhere our plants are located enable the regional treatment ofwaste, and we are providing services that contribute to earlydisaster recovery over a wider area.

Environmentally-Conscious
Management

Disaster Waste Regional Treatment Service

Salt removal equipment (Ofunato Plant) (as of 2012)75

ESG Initiatives That Support Creation of Corporate Value

Appropriate Use of Water Resources

Relevant SDGs

Striving to analyze water risks and understand the status of water use as issues that may emerge in the future in our use
of water resources, and working to ensure the proper use of water resources.

Appropriate Use of Water Resources

Water Consumption

Water Risk Analysis
GRI303-1

According to the results of the water risk analysis conductedusing the Water Risk Filter*, the average score for the total basinrisk for all our plants (weighted average taking into account thecement production volume) was 2.8. The highest total basin risk
score was 3.2, and the average score was 0.3 lower than that ofthe previous year. The volume of cement produced at the plant inquestion accounted for about 9% of the production volume of all
the plants. However, when we analyzed conditions at that plant,
no urgent issues were identified.
* A water risk mapping tool developed by the World Wide Fund for Nature (WWF). It is
used to evaluate business impacts related to water scarcity, flooding, drought, seasonalvariation, physical water quality risks, regulatory risks, etc. The maximum score is 5.0, andthe higher the score, the greater the risk.

Water Consumption
GRI303-1, 2, 3, 4, 306-1

Most of the water used at our cement plants is for the coolingof production equipment, exhaust gas and on-site power
generators. Therefore, the water discharged from the plants ismostly cooling water, which is not polluted as defined in the
Water Pollution Control Act. All the fresh water used at the plants
is circulated and reused, except for the household wastewater, as
we strive to reduce our water withdrawal and lessen the impact ofwastewater on bodies of water.
Our total withdrawal of fresh water in FY2022 was about
26.34 million m3 and our total withdrawal of seawater about
150 million m3. The seawater was used to cool on-site power
generation equipment at our plants near the ocean and thenreleased back into the sea after use. The amount of fresh water
discharged was approximately 13.25 million m3, meaning thatabout 13.10 million m3 of fresh water was used at the plants.
However, most of this water is not used as a raw material andevaporates after being used to cool equipment or gas.
In FY2022 our fresh water withdrawal to produce 1 tonne of
cement was 0.822 m3 (withdrawal per unit of production). There
was no great change in our water consumption efficiency.

GCCA(Unit: thousand m3)

FY2018FY2019FY2020

FY2021

Surface water

8,130

6,521

5,626

5,355

5,527

Ground water

16,37016,884

18,65618,75918,706

Industrial water

3,095

3,251

3,325

3,078

2,108

Total fresh water withdrawal (I)27,596

26,656

27,607

27,192

26,341

Total seawater withdrawal

149,056 149,776 147,372 146,232 146,894

Total water withdrawal

176,652 176,432 174,979 173,424 173,234

Total fresh water discharge (O)12,294

Total seawater discharge

149,056 149,781 147,377 146,368 147,062

12,167

0.835

0.806

0.817

0.832

0.822

2018

2019

2020

2021

2022

15,302

14,48913,745

13,095

Appropriate Use of Water Resources
GRI203-1, 303-1, 2, 3, 4, 5, 306-1, 413-1

At present there are no specific concerns regarding water
resources that may be raised by local communities. However, weare striving to reduce water withdrawal with a view to conserving
water resources. In addition, we maintain close communication
with local communities and contribute to the appropriate use of
local water resources.
TCPI supplies clean water to local communities from wells
drilled by the company for water to use in its plants.
This system has improved the collection and storage ofrainwater and spring water at the site. Developing these water
resources has made it possible to secure a supply of the water itneeds in its work, without having to build new wells or increase
the volume of ground water it extracts, and also to keep theamount of water that drains out of the site to a bare minimum.
(There are strict regulations with regard to water that drains outof a site.)

0.2

76

13,933

Reference guidelines: “GCCA Sustainability Guidelines for the monitoring and reporting ofwater in cement manufacturing Ver. 0.1” GCCA

0.4

(FY)

13,246

161,350 161,948 161,051 159,815 160,308

0.6

013,447

Total fresh water used (I-O)

Fresh Water Withdrawal per Unit of Production GCCA

0.8

13,674

Total water discharge(m3/t-cementitious)

1.0

FY2022

System for the sustainable use of water (California)

SOCIAL
Occupational Health and Safety �������������������������� 78
Human Capital

Human Resource Development ����������������������������� 82
Respect for Human Rights ������������������������������������� 85
Diversity ����������������������������������������������������������������� 86

Value Chain Management

Quality and Safe Products �������������������������������������� 88
Responsible Sourcing and Supply ������������������������� 90
Stakeholder Engagement �������������������������������������� 92
Communities ��������������������������������������������������������� 94

Oita Plant

77

ESG Initiatives That Support Creation of Corporate Value

Occupational Health and Safety
We are continuously promoting organizational safety, security and health activities with the aim of eradicating
occupational accidents, including those in the supply chain, and achieving a safe work environment.

Approach

Our Health & Safety Policy is shown below. Under this policy
our headquarters and business sites prepare health and safety
management policies that suit the actual conditions at theworkplace each fiscal year.

Taiheiyo Cement Health & Safety Policy

Taiheiyo Cement Corporation recognizes that ensuring thehealth and safety of our employees is a cornerstone of ourcompany. We invest appropriate management resources to theprevention of occupational accidents and diseases in accordancewith the Industrial Safety and Health Act and the Mine Safety Act,and efficiently implement the fundamental policies shown below.

Safety Objectives (KPIs) for FY2022

P romote health and safety activities through cooperation between
management and labor, with the aim of eliminating occupational
accidents.
E nsure the health and safety of our employees and those of ourcontractors by complying with health and safety-related laws andregulations, the health and safety management regulations createdby us, and health and safety regulations created by our business sites.
Strive to improve the level of health and safety by actively
promoting the implementation and operation of our Occupational
Safety and Health Management System, and by continually
ensuring the fundamental safety of our work and equipment,
providing education and training, and raising awareness of healthand safety.
Constantly improve workplace environments and work proceduresby applying improved technologies and new health and safety
information via the companywide, business site and group affiliate
health and safety committees.
Ensure health and safety throughout the Taiheiyo Cement Groupby promoting action to eliminate occupational accidents under theleadership of the companywide, business site, and group affiliate
health and safety committees.

Plans for Next Fiscal YearFY2022 Company-wide Health & Safety
Committee Objectives(1) Zero fatalities across the group (CSR
Objectives for 2025)(2) 30 or less lost-time injuries across the group(3) 80 or less total occupational accidents acrossthe group(4) Absence rate of company employees: 0.4%
level

Achievements and Issues This
Fiscal Year
(1) Fatalities: 1(2) Lost-time injuries: 37(3) Total occupational accidents: 103(4) Absence rate: 0.604%

FY2023 Company-wide Health & Safety Committee
Objectives(1) Zero fatalities across the group (CSR Objectives for 2025)(2) 30 or less lost-time injuries across the group(3) 80 or less total occupational accidents across the group(4) Absence rate of company employees: 0.5% level

Eliminating Accidents Caused by Breaking
Workplace Rules
15% or less of total occupational accidents (ratioof accidents due to rule breaking)Violation of work standards, etc.:23%- Failure to wear specified protective
equipment, omission of work
procedures, etc.

Ratio of accidents due to rule breaking: 15% or less- Improve comprehension through periodic education on rules- Identification and improvement of facilities and behaviors
that violate rules- Guidance aimed at eliminating violation conditions throughregular patrols- Promote "visualization" with signs, work procedures, etc.

Eliminating Heatstroke-related Accidents
Zero heatstroke-related accidents

Heatstroke-related accidents: 6- There were cases of overconfidence
where employees believed "I amfine”. Awareness through educationand further improvement of the work
environment is planned.

Zero heatstroke-related accidents- Improved understanding of accidents through prior education- Reliable response to heat index- Improvement of the work environment (development of rest
areas, cooling systems, etc.)- Guidance on checking the condition of countermeasuresthrough safety patrols

Reduction rate 17% (44 accidents)- Both making equipment safer andfamiliarization with safety principles
will be addressed.

Halving the three most common causes of accidents- Confirmation of effectiveness of countermeasures throughaccident study support- Conduct case study education using the Accident Information
Database- Continual operational checks of accident prevention measures(periodic on-site patrols)- Promote "visualization" with signs, work procedures, etc.

KPI

Preventing the Recurrence of Similar
Accidents
Halving the three most common causes ofaccidents- Being trapped by or dragged into equipment- Falls from height- Flying/falling objects

78

Fundamental Policies

Relevant SDGs

Health & Safety System

Board of Directors

CSR Management Committee
Company-wide Health & Safety Committee
Chairperson: Officer in charge of safety

Specialized committees

Departments at Headquarters
Headquarters
Health & Safety
Committee

Central ResearchLaboratory
Health & Safety
Committee
Contractors

Each plant
Health & Safety
Committee

Each branch
Health & Safety
Committee

Each quarry
SafetyCommittee

The Health and Accident Prevention
Safety Cooperative
Cooperative
Committee
Committee

SafetyCooperative
Committee

Group companies
Health & Safety
Committee Safety
Committee

We have established procedures for the implementationof health and safety training, and are committed to providing
such training so that work can be carried out safely. Training
is provided at all our business sites. It can be categorized intotraining for newly-hired employees, training for newly-hired
employees with professional experience at another company,
specialized courses, training for newly-appointed managers, skills
training, and training for contractors when they start work at a
site.

Occupational Accident Reports and Database

Any occupational accident is reported to the Company-wide
Occupational Health & Safety Committee immediately, regardlessof how insignificant it may seem. We promptly post the detailsof any accident on the group bulletin board as a step towards
avoiding any recurrence.
We have maintained a occupational accident databasesince FY2009. It covers accidents involving employees of thecompany and group companies as well as the employees ofall our contractors, including temporary workers. It categorizes
accidents according to the “4 Ms” (men, machines, methods
and management), analyzes the causes of unsafe behavior andsituations, and systematically stores occupational accident review
reports that include details of the countermeasures taken. The
database is also translated into English and Chinese so that it canbe widely used at our overseas business sites.

Value Chain Management

Health & Safety System

Health and Safety Training

Human Capital* OSHMS (Occupational Safety and Health Management System): Guidelines issued by
the Ministry of Health, Labour and Welfare in 1999. A framework for reducing potential
dangers at workplaces and promoting comfortable work sites by autonomously practicing
continuous, uninterrupted health and safety management.

Since FY2008, we have been using the Safety Operation
Officer System which emphasizes the importance of improving
leadership capabilities to reduce occupational accidents. Thissystem provides the certification as a safety operation officer thatis required for leaders of work groups. To further improve thecapabilities of those leaders, as of FY2016 we require participantsin the certification seminars held at the plants to have completed
the foreman training course stipulated in the Industrial Safety
and Health Act.

Occupational Health and Safety

Under the Taiheiyo Cement Health & Safety Policy we establish
health and safety management regulations that cover thebasic principles of the group’s health and safety management,
and promote health and safety activities. The aim is to create
comfortable working environments while also ensuring thehealth and safety of our employees and those of our contractors
at the group’s business sites and other locations.
We established the Company-wide Health & Safety
Committee, chaired by the officer in charge of safety, as aSpecialized Committee under the CSR Management Committee,
which is itself under the direct oversight of the Board of Directors.
The Company wide Health & Safety Committee supervises healthand safety activities held by our various business locations. It alsocollects safety-related data from not only the company itself but
also our group companies and provides guidance.
All plants, quarries and branches under the jurisdiction of
our divisions at Headquarters, and all group companies, have ahealth and safety committee consisting of representatives fromboth management and labor, as well as a cooperative committee
promoting the health and safety-related activities of eachbusiness site.
Health and safety management at cement plants and quarries
in Japan is carried out by our OSHMS*.

Safety Operation Officer Certification System

Occupational Accidents Registered in the Database

Fatal
Leave of absence required
No leave of absence required(Accidents)

150
120
90

103

87

94

2019

2020

121

103

60
30
0

2018

2021

2022

(FY)

* Taiheiyo Cement and group companies that are business sites required to submit accident
reports under our Safety, Security and Health Management Regulations are the subject ofaggregation.

79

ESG Initiatives That Support Creation of Corporate Value
Occupational Health and Safety

Health and Safety Promotion Activities
GRI403-2, 3, 4, 5, 6, 7, 9, 10

The Company-wide Health & Safety Committee set thefollowing objectives for FY2022: zero fatalities, limit lost-time
injuries to 30 or less and the total number of occupational
accidents to 80 or less, while also setting the absence rate in
the 0.4% range. We therefore engaged in health and safety
promotion activities with a focus on: (1) improving the level ofsafety management at group companies in order to achieve our
CSR Objectives for 2025, (2) eliminating accidents caused bybreaking the rules, (3) eliminating heatstroke-related accidents,(4) preventing the recurrence of similar accidents, (5) complying
with safety-related legislation, and (6) preventing the spreadof COVID-19 infections (preventing employees from becoming
infected or infecting others).
As a result, although the total number of occupational
accidents decreased, there was one fatality and the absence rateincreased due to the spread of COVID-19.
* Fatalities: 1 (0), Lost-time injuries: 37 (42), total occupational accidents 103 (121), absence
rate 0.604% (0.337%) (figures in brackets are FY2021 results).

Regarding the elimination of heatstroke-related accidents,
which we identified as a key issue since FY2021, we aremeasuring WBGT (Wet Bulb Globe Temperature) values at
each work site, have established break frequencies based on
WBGT values, and promoting the improvement of the work
environment, resulting in 6 cases of heatstroke, down from18 cases in the previous year. In addition, regarding accidents
involving the violation of workplace rules, accidents involving
violation of work procedures, etc. remained high, accountingfor 23% of all occupational accidents, so we are progressing
with guidance through periodic patrols, education on rules,
improvement of equipment and behaviors, and "visualization" ofsafety activities.
Analysis of occupational accidents according to yearsof experience found that approximately 40% of accidents
involved workers with less than three years of experience, so
we will enhance initiatives to prevent accidents involving lessexperienced workers. Also, regarding accidents according to type,"falls from height" decreased, but there were still many "trappedby or dragged into equipment", "flying/falling objects" and"falling over" accidents, so we are progressing the prevention of
the recurrence of similar accidents.

80

Absence Rate

FY2018Absence rate

FY2019

0.458

0.647

FY2020Non-consolidated (Unit: %)FY2021

0.580

FY2022

0.337

Occupational Accidents*

0.604(Unit: occurrences)

FY2018 FY2019 FY2020 FY2021 FY2022

98

Japan

By region

81

92

117

98

Overseas

5

6

2

4

5

Male

99

83

89

120

100

Female

4

4

5

1

3

Injury or
sickness

Injury

98

83

79

103

97

Sickness

5

4

15

18

6

Our
employees orcontractors

Our
employees

41

45

40

52

40

Contractors

62

42

54

69

63

By gender

Breakdown of Accidents by Type*FY2021

Collision
3%

Other
14%

Reaction to operation/
forced operation
7%
Contact withhigh or low
temperature
objects 16%
Cuts and scratches 4%

Being trappedby or dragged
into equipment
14%
Fallingfrom height
16%

Fallingover12%

Flying/falling object
14%

FY2022Other
14%

Collision
7%
Reaction to operation/
forced operation 8%
Contact withhigh or low
temperature
objects 8%
Cuts and scratches 7%

Being trappedby or dragged
into equipment
16%
Fallingfrom height
11%

Fallingover
14%

Flying/falling object
15%* Taiheiyo Cement and group companies that are business sites required to submit accident
reports under our Safety, Security and Health Management Regulations are the subject ofaggregation.

Initiatives for ISO 45001

In March 2018, the ISO 45001 standard for OSHMS wasestablished by the International Organization for Standardization.
Since 2007, we have been operating OSHMS based on theguidelines given by the Ministry of Health, Labor and Welfare. As
an international company, we are working to obtain ISO 45001
certification for safety and health, in addition to quality (ISO9001) and environmental (ISO 14001).

In February 2022, a driver from a transportation company was
killed in an accident. The death is presumed to have been a resultof crushing caused by forgetting to remove a fall prevention
device (safety belt).. With the cooperation of the transportationcompany, we attached a ball-shaped object shown in the phototo the fall prevention device and commenced the operation ofcountermeasures to prevent workers from forgetting to remove
the fall prevention device at Tokyo Branch service stations and theSaitama Plant. In the future we will deploy it at all service stations
and plants.

(3) Expanding Safety Activities to Group Companies

The Company-wide Health & Safety Committee provides
support for safety activities at group companies. It started
conducting safety surveys at the group’s business sites in Japanand overseas in FY2019. As a result of measures introduced
to prevent the spread of COVID-19, a survey was conducted atonly one business site in Japan in FY2022, but in FY2023 wewill increase the number of support sites and also promote theutilization of hazard experience facilities at cement plants.

Occupational Health and Safety

Examples of Accident Prevention Initiatives(1) Recurrence prevention measures(in response to a fatality)

Human Capital

Safety activity support (Onoda Chemico Co.)

(4) Ensuring the Safety of Foreign Workers

Ball-shaped object attached to the safety blockThe person will feel discomfort when getting in the vehicle and realize they haveforgotten to remove the fall prevention device

The number of foreign workers is increasing each year and weare becoming more multinational. At our cement plants we are
striving to ensure safety through graphic displays in educational
materials, multilingual displays and using DVDs.

(2) Experiential Safety Training

Vietnamese

Value Chain Management

In order to boost the safety awareness of our employees wehold safety training where they experience risks inherent infamiliar operations. In FY2019 we introduced experiential safety
training equipment such as VR (virtual reality) devices at all ourcement plants for employees to experience simulated dangers
related to safety harnesses, rotating equipment, electricity andheavy objects hanging from a crane. We also set up a system thatcan provide effective training for younger or less experienced
employees.

IndonesianVietnamese and Indonesian translations of ‘Safety First’ (Ofunato Plant)(5) Preventing Heatstroke

As a countermeasure against heatstroke, we began reviewing
our work clothes in FY2021 and introduced work clothes
for extreme heat in FY2023 that are more breathable thanconventional products and stick to the skin less.

Hazard experience education using VR

Images visible through goggles (Experienceof being trapped in a conveyor belt)

Work clothes for extreme heat
(Taiheiyo Cement Corporation)81

ESG Initiatives That Support Creation of Corporate Value

Human Capital
We are engaged in human resource development while respecting the human rights and diversity of all of ouremployees toward realizing equal opportunity within the company.

Employee Recruitment

Human Resource Development

Graduate hires
Mid-career hires
Total

Approach

We regard our employees as "human capital" and are themost important resource for achieving the sustainable growth of
our group. We are implementing systematic and comprehensive
human resource development in accordance with our Basic
Policy Concerning the Development of Human Resources sothat all of our human resources, who possess diverse individual
characteristics and values, can demonstrate the full extent of theirindividual capabilities.

Basic Policy Concerning theDevelopment of Human Resources

Our aim is to develop human resources that are highly regarded both
inside and outside the company. In principle, human resources will be:Developed through on the job training supplemented by off-thejob training
Developed to inherit the roles of their predecessors, playing central
roles in the future in each field and at each level
Developed to take action in constant consideration of groupmanagement
Developed to global standards of competenceDeveloped to protect the environment and to serve society byassuming active roles in CSR initiatives
Encouraged and assisted to develop their motivation and to adopt
broader perspectives through self-development

Education System Chart
Onthe-job Company-wide
CommonTraining
Training

Education LevelSpecific

We have adopted a human resource evaluation system thatprioritizes development over compensation. The system assists
employees in deepening their understanding of their evaluation
results through feedback. It also strongly emphasizes theexchange of opinions between evaluators and employees, whoshare their thoughts on issues such as identifying areas for future
development.

Self-development
supportDepartment-specific education

Sessions for newly
hired employees

Program to train
the next generationof female leaders(introductory/
development courses)

DepartmentSpecificTraining

Techno school

Follow-up
coursesGlobal human resource
development program
Overseas language study

Program to train
the next generationof female leaders(practical course)

Overseas internship

Mental health

GlobalOverseas technicaltrainee system

Career development
courses

Diversity

Individual Ability
Development(reskilling andrelearning support)

Selective external dispatch training
Management Academy (Domestic Production Division)
Financial Leadership Program (Hitotsubashi University)
Global Human Resource Development Program(Keidanren)
Dispatch to Women's Challenge Support Course(Keidanren), etc.
Managerial
training

Legal

105
9
114

Human Resource Evaluation System

Intellectual property
Skills map

General Staff

Diversity

109
11
120

FY2022All employees are requested to submit annual self-appraisals
in which they can detail their future career development
aspirations, worksite preferences and family considerations. This
helps us improve the working environment so they can fully
demonstrate their abilities and we can retain their long-term
services.

Correspondence education
Qualification acquisition support
Foreign language learning for business
E-learning support

Training for newly
appointed managers

Human rights

82

LeaderDevelopment

Training for new
deputy directors

Information security
CSR

108
10
118

FY2021

Self-appraisal System

Off-the-job Training

Management training

Management

Management
overview

FY2020

Implemented Across the Entire Company

External public
seminars

SafetyNon-consolidated

GRI404-2, 3

Relevant SDGs

Work-Life Management
GRI401-3, 403-6

We are striving to provide flexible work arrangements for our
employees by adopting various employment systems.

Various Employment Systems

Committee on
Committee onhuman resources
employment
and the treatment and employmentof employees
formats

Committee on
work hours

Committee
to promote
workplacediversity

Support for Continued Employment During Childcare
and Nursing CareIn addition to systems for childcare leave, nursing care leaveand shorter working hours, we operate a long-term leave (worklife management leave) and reemployment system (career
comeback system) to support employees who are forced tointerrupt their careers due to unavoidable circumstances such asaccompanying a spouse on a job transfer or for childcare.

Human Capital

Status of Response to Side Jobs and Businesses

We allow employees to engage in side jobs and sidebusinesses in order to encourage the development of diverse
experience. However, we do not permit it in cases where it
may be difficult to fulfil work obligations, where there may
be safety implications, including preventing overworking, or
where there may be a conflict of interests in terms of good faith,
confidentiality or competition obligations.

Value Chain Management

 Flextime system (Core time: 11:30 a.m. to 1:30 p.m. (head office,branches, etc.))
Discretionary labor system
Telecommuting system
Side job/business system
Shortened work hours in order to care for children up to sixth grade ofelementary school (10-minute increments up to 3 hours per day)
Shortened work hours in order to provide nursing care to family(10-minute increments up to 3 hours per day)
Exemption from overtime work in order to care for children under 3
years oldRestriction on overtime work, exemption from late-night work, andstaggered work hours in order to care for children up to sixth grade ofelementary schoolE xemption and restriction on overtime work, exemption from late-nightwork and staggered work hours in order to provide nursing care to family
Half-day paid vacation
“Special Reserved” leave (purposes of use: medical care, nursing care,
physical checkups, fertility treatment, self-development, etc.)
Child nursing/nursing care leave (ten days per year)
Volunteer activity leave
 Personnel management systems for each course, including area-specificpositions (There is a system for changing courses)
Maternity leave and childcare leave system (up to two years and one
month)
Nursing care leave system (up to a total of two years per person
requiring nursing care)
Work-life management leave
Career comeback system and more

In order to understand the needs of our employees andincorporate them into the various systems we have established,
together with the Taiheiyo Cement Labor Union which represents
our employees, four specialized committees that meet as needed.
These committees serve as a forum for labor and management toexchange opinions and communicate with each other in order toestablish the various systems.

Occupational Health and Safety

Flexible Work Arrangements

Labor-Management Cooperation to Establish the Systems

Increasing Understanding of the Systems
We have established an exclusive website for our employees
regarding the various systems called Kirakira Palette in order to increaseawareness of the various systems that can be utilized for work-life
management. The site provides information on childcare and nursing
care, health, self-development, and other information to support
employees’ lives, which can be accessed from anywhere at anytime. We
are working to enhance thecontent.

83

ESG Initiatives That Support Creation of Corporate Value
Human Capital

Health and Productivity Management (H&PM)

2 Initiative

We have been implementing H&PM initiatives since FY2019,and in 2022 we revised the “Taiheiyo Cement Group Healthconscious Management Declaration in order to maintain andpromote the health of our employees and their families, as wellas to create a reward workplace.

Preventive Measures Against Lifestyle-related Diseases

Promoting H&PM

Taiheiyo Cement Group Health-Conscious
Management Declaration

We are promoting the prevention of lifestyle-related diseases
through indicators such as rates of employee obesity, smoking
and alcohol consumption. Regarding obesity in particular, wehave set a goal of reducing the percentage of employees with a
BMI of 25 or higher to 30% (currently 33% as of August 1, 2022)
and are implementing measures such as walking events.

E mployee BMI Distribution Graph by Age(FY2022)
Non-consolidated

The physical and mental health of our employees and their families
is a prerequisite for us to realize our mission of contributing tosocial infrastructure development by providing solutions that areenvironmentally efficient, enhancing our competitive position andbring value to our stakeholders. We hereby declare that we regard
our employees as “human capital” and that we will work to maintainand improve their health and that of their families, and aim to createa rewarding workplace where employees can fully demonstrate theirabilities.

10~19
20~29
30~39
40~49

September 2022
TAIHEIYO CEMENT CORPORATION

50~59

Masafumi Fushihara, President and Representative Director

60~69

Fundamental Policies

 nder the Health-Conscious Management Declaration, theU
Taiheiyo Cement Group, led by the Human Rights & Labor Practices
Committee, will work with each business site to promote efforts tomaintain and improve the health of employees and their families
and to create a rewarding workplace.
Employees will enhance their physical and mental wellbeing andimprove their quality of life by actively working to maintain andimprove their health and that of their families.

Please see our website for more information
about our promotion of H&PM.
https://www.taiheiyo-cement.co.jp/english

Sustainability Collaborating with Society Human Capital
Health and Productivity Management

1 Initiative
The results of periodic health examinations of all
employees are analyzed and used as indicators for H&PM
initiatives and measures toward ensuring health andpreventing serious illnesses.

 atio of employees receiving periodic healthRexaminations (%)Non-consolidated

84

FY2021100％

FY202299.9％

100~ 18.430 ~ 34.9

200

300

400

18.5 ~ 24.9
35+

500

600

700

(No. of employees)

25~ 29.93 Initiative
Mental Health Support

In addition to establishing internal and externalcounseling services for mental health, we provide healthliteracy education for all employees to maintain mental
health and conduct periodic stress checks. Highly stressed
employees are offered an interview and business sites withhigh stress are also subject to analysis of the workplace.

Measures to Ensure Employee Health

FY2020100％

0Ratio of Employees Taking Stress Checks

Non-consolidated

FY202095.4％

FY2021
98.1％

FY2022
97.5％

Counseling Services on Mental HealthInternal

Industrial physician

Taiheiyo Cement Health Insurance Consultation Line
External (telephone and online)* Family members of employees are also eligible

Relevant SDGs

Signatory to the UN Global Compact

Respect for Human Rights

We formulated our Basic Policy Concerning Human Rights andLabor Practices in April 2015 with the awareness that respecting
human rights and diversity is a fundamental principle for asustainable society, and taking into consideration the Universal
Declaration of Human Rights and the labor standards of theInternational Labor Organization.
Furthermore, we signed the United Nations Global Compact in
May 2022 and will further enhance our efforts to protect humanrights.

Basic Policy Concerning Human
Rights and Labor Practices

Occupational Health and Safety

Approach

The United Nations Global Compact (UNGC) is the world's
largest sustainability initiative, bringing together the United
Nations and the private sector (businesses and organizations) tobuild a healthy global society.
We signed the Compact in May 2022 and endorse the ten
principles related to the protectionof human rights, the elimination of
unfair labor practices, environmental
responsibility, and the prevention ofcorruption, and we are taking various
steps to ensure we achieve theseprinciples.

Human Rights Due Diligence

We are planning to conduct a survey on human rights issues
in phases starting in FY2023, which will include our supply chain.
We will identify human rights risks based on factors includinginternational standards, external requests and characteristicsof the industry, conduct the survey and then consider
countermeasures to address the findings.
The survey in FY 2023 will cover the six plants directly under
our control, and the scope will be expanded from FY2024 toinclude Group companies and suppliers.

Human CapitalR ecognizing that respecting human rights is a foundational
management concern, we will strive to address human rights issues.
We will respect diversity and will not tolerate discrimination orharassment in any form.
Applying accepted international principles, laws and labor practices
in each country, we will respect the rights of all our workers, provide
them with employment free of discrimination and strive to ensure
equal employment opportunities.
We will strive for better working conditions and a workplaceenvironment that ensures the health and safety of our employees.
We will not tolerate child labor or forced labor under any
circumstances.

Value Chain Management

Human Rights Issues Survey Roadmap
Survey Subjects
6 domestic plants under directcontrol

FY2023
Interview survey
Documentary survey

FY2024FY2025(Follow-up survey)(Follow-up survey)

Major domestic primary suppliers

Documentary survey(Follow-up survey)

Major domestic and overseas groupcompanies

Documentary survey(Follow-up survey)

Other overseas group companies
Major domestic secondary suppliers
Major overseas primary suppliers

Documentary survey

85

ESG Initiatives That Support Creation of Corporate Value
Human Capital

Initiatives Regarding Respect for Human Rights

Diversity

Educational Activities on Human Rights

In FY2022, the topic of the training for each job level was“recent Dowa issues and harassment prevention”, while thetraining program for the top management at group companies
was related to “workplaces where both men and women canwork comfortably”. We also provided training support to Group
companies, distributed human rights educational booklets andprovided information.

Internal Training and Motto Submission (FY2022)
Training

Results

Taiheiyo Cement GroupCSR top management lecture125

Human rights training for each job level at headquarters

307*

Human rights training at branches and plants

493

Number of Human Rights Week mottos submitted(employees and family members)

1,650

Approach

We are promoting diversity and inclusion, and utilizing
diverse values and personalities as a driving force for ourinnovation and growth.

Promoting Diversity

The promotion of diversity is one of the most important issues
for the creation of an innovative workforce, and we are actively
working with the aim of becoming a company where women andother people with diverse values can play an active role. We haveadded diversity education to the curriculum of our job levelbased training and are promoting diversity and inclusion.

* Excluding those who viewed job level-specific videos

Our Human Rights Hotline

Members of the harassment counseling committees andhuman rights committees located at all our business sites
conduct activities to raise awareness of human rights to prevent
harassment, and handle any related complaints to create apositive workplace environment.
In addition, we have contracted with the Japan Institute for
Women’s Empowerment & Diversity Management to provide
external consultation services and are striving to create anenvironment conducive to consultation.
In FY2022 we received 9 reports via the hotline. We
reviewed the details of each report based on requests from thecomplainants, and responded appropriately.

Harassment Hotline
Internal

Human rights awareness promotion committee members
and harassment consultation members have been
assigned at all our business sites (56 in total)

External

Telephone and website consultations have been contracted
to the Japan Institute for Women’s Empowerment &Diversity Management Harassment Hotline

Number of Reports to the Harassment Hotline(FY2022)
Non-consolidated

Internal

External

86

Other
Sexual
Power
forms
of
harassment harassment harassment

1
0

5
3

0
0

Total

6
3

Please refer to our website regarding the “General
Employer Action Plan” based on the Act for Promotion of
Women’s Participation and Advancement in the Workplace.

https://www.taiheiyo-cement.co.jp/english

Sustainability Collaborating with Society Diversity

Promoting Women’s Participation and Advancement in
the Workplace

We established goals and a basic policy regarding women’s
participation and advancement in the workplace in November
2013 and began implementing initiatives. The current
quantitative targets are defined in our CSR Objectives for 2025
that were established in May 2015 and have been publishedboth internally and externally. The ratio of female employees was
9.3% at the end of March 2022 and we are continuing our efforts
to reach our target of 10% or more.

Relevant SDGs

Infrastructure Development

Fundamental Policies

As a preliminary step to promote the expansion of areas for
women to work in, we improved the infrastructure for womenby adding changing rooms, restrooms, shower rooms and otherfacilities at the Central Research Laboratory and at all plants. We
are also progressing the conversion to barrier-free facilities andequipment to make them accessible to people with disabilities.

Occupational Health and Safety

With the aim of further enhancing corporate value by promoting
innovation through the ideas and values of diverse humanresources, we will:
Promote active recruitment and retention of women in order tobuild an appropriate human resources portfolio;
Promote work-life management to improve productivity andbuild an organization that maximizes the capabilities of ourdiverse workforce.

1 Initiative
Training for the Next Generation of Female Leaders

Number of participants in FY2022: 36
CareerDesignSolid image ofcareer advancement

STEP 1 (Introduction)
Learn how to think about their career,solidify a career plan and be aware of
the next step in career advancement

STEP 2 (Development)
Awareness of leadershipas an option in careerplanning

Improving skills in
the image of a leader
STEP 3 (Practical)
Gaining their own
speciﬁc image of aleaderIn order to respect the sense of
spontaneous learning, participation up
to STEP 2 is voluntary.

Participation in the Science, Technology, Engineeringand Mathematics Challenge (Rico-challe)
We participate in the “Rico-challe”, a program led by the
Gender Equality Bureau of the Cabinet Office to support
female junior high and high school students in their choice of
science technology, engineering and mathematics fields, andhave been holding events during the summer vacation since
FY2018. The event was not held in FY2022 due to the COVID-19
pandemic, but in FY2022 an “Online Women's Exchange
Meeting - ‘Rikejo (Women in STEM)’ Job Introduction” was heldin August, where participants (female high school and college
students) and our female engineers had a chance to interact.

Number of participants in FY2022: 4

3 Initiative
Online Discussion Meeting for Female Engineering
Students

As part of our diversity management, we promote midcareer recruitment to secure personnel with diverse experience.
We have hired around ten people in each of the last five fiscal
years, and some have already been promoted to management
positions. We will continue to actively engage in mid-career
recruitment, which has the potential to revitalize organizations
that tend to homogenize and be a source of innovation.

Promoting Employment Opportunities for Persons with
Disabilities

We have been working to improve the working environment
for employees with disabilities, including the establishmentof three special purpose subsidiaries. We have exceeded thestatutory rate of employment for the 15th consecutive year.
We will continue to proactively work to increase the number of
employees with disabilities while collaborating with schools andsupport organizations for persons with disabilities.

Value Chain Management

2 Initiative

Promotion of Mid-Career Recruitment

Human Capital

In Japan, the career development of working women isprone to various uncertainties due to the influence of life
events and the absence of role models. To counter this, we
provide training aimed at developing the next generation of
female leaders.

T rends in the Employment Rate for Persons with
Disabilities (as of June 1 of each year) Non-consolidated

Statutory employment ratio (%)*
Private sector average
Taiheiyo Cement

(%)

3.0
2.5
2.0
1.5
1.0
0.5
0

1.49

2.50

2.55

2.11

2.15

2.20

2020

2021

2022

2.34

2.30

2.05

2019

2.58

0.82
2001

2023 (FY)* Statutory rate: Statutory employment rates were 1.8% until March 31, 2013, 2.0% until
March 31, 2018, and are 2.2% since April 1, 2018.

We held an online discussion with our female engineers in
March 2022 with the aim of helping female students gaina more detailed image of working with us in the future andenhancing their motivation to apply to join our company.

Number of participants in FY2022: 18

87

ESG Initiatives That Support Creation of Corporate Value

Value Chain Management
Aiming to build a relationship of mutual trust with each stakeholder in the value chain and achieve sustainable
development together.

Quality and Safe Products
Approach

In 1998, the year of Taiheiyo Cement’s inception, weestablished a quality policy based on our management policy.
We revised the policy by incorporating a visual descriptionof the code of conduct. Through those efforts we have sincecontinually raised awareness of the policy across the organization.
It represents our aspiration to continue to be a company that
customers trust and rely on by sharing a sense of achievement
through each employee’s actions and by providing high-quality
products and services, leveraging our high technologicalcapabilities and quality assurance system.

that adopt ISO have obtained ISO 9001 certification. To ensure
product quality and improve business operations, we obtained
ISO 9001 (JIS Q9001) certification from the Japan Testing
Center for Construction Materials. The scope of our certificationencompasses the development, design and production of arange of cement, cement clinker and cement-based soil stabilizer
products.
We will continue to enhance our efforts to “supply productsthat meet customer needs” and “improve customer satisfaction”
whilst actively utilizing the ISO 9001 system.

Quality Management System
Customer

Quality requirements

Sales Division

Quality Policy
All of our employees adopt a global perspective, striving to boost
customer satisfaction and contribute to society by providing
environmentally-friendly products and quality that matches ourcustomers’ needs.

In order to achieve the aims of our policy

 We develop specific product quality targets based on our Quality
Policy and disseminate them within the company.
We focus our efforts and work positively to achieve the quality
targets.
We carefully review the levels of customer satisfaction and productquality that have been achieved.
We implement a quality management system and continually
improve our products.

Quality Management
GRI416-1

We focus on stabilizing and improving product quality while
capitalizing on the production and quality control technologies
we have developed over the years. We are further enhancing
product quality control by deploying advanced technologies toensure improved stability such as an online analysis system forraw materials, clinker and cement, the measurement of clinker
minerals by X-ray diffraction and our proprietary Taiheiyo Cement
Quality Predictive System (TQPS). Whilst maintaining we also
make effective use of industrial waste and by-products and indoing so manufacture cement that pays due attention to theconservation of the global environment.
All of our Portland cement plants in Japan, including thoseof group companies, have obtained ISO 9001 certification,
the international standard for quality management systems.
Furthermore, all of our overseas cement plants in countries

88

Sales

Products and technical services

Technical Services

Research & Technology Development Division
Clarify quality requirements
Review quality requirements
Quality design in accordance withquality requirements

Distribution
Shipping inspection

Production Division

 anagement of production
M
conditions
Building quality into the process
In-process inspections

Prototyping and evaluation

Acceptanceinspection

Material procurement

Safe Cement and Cement Products
GRI416-1

Today every product is expected to be safe; as a construction
material that is indispensable for developing social infrastructure
cement is no exception. The cement industry has long madeuse of industrial waste and by-products such as blast furnaceslag, coal ash and by-product gypsum as substitutes for naturalmineral resources. Furthermore, we use technologies wedeveloped to recycle household waste, such as the AK system torecycle municipal waste and our incineration residue recycling
system. We also recycle construction-related soil and wastematerials into raw material and fuel for cement production.
When our cement plants accept waste we prevent its dispersal
and minimize the release of odor by transporting the waste in atightly sealed panel truck and storing it in a fully enclosed facility
to protect the environment of the surrounding area as well as that
inside the plant.
We have already established fixed standards for the
management of heavy metals contained in natural resources, andare constantly enhancing the control of minor components asRelevant SDGs

Ensuring Product Safety Following a Nuclear Accident
GRI416-1, 417-1* The Japanese government set a limit of 100 Bq/kg as the safety standard for radioactive
concentrations in cement, effective from May 2011.

Total
chromium

FY2019FY2020

FY2021

Average

−

448

427

435

409

FY2022

395

Max.

−

543

504

578

512

449

Min.

−

339

355

337

326

311

Average

−

79

77

84

79

75

Max.

−

88

95

95

85

88

Min.

−

69

64

75

73

65

Water- AveragesolubleMax.
hexavalentchromium Min.

17.4

7.4

8.6

7.9

8.0

7.1

32.3

9.3

11.4

9.8

11.1

8.9

5.3

6.0

5.4

6.6

5.5

5.9

Average

556

530

600

554

609

560

Max.

1059

659

772

677

734

742

Zinc

Lead

CopperArsenic

Selenium

Provision of Information Using SDS and Labeling
GRI417-1

To ensure the safety of cement users we prepare Safety Data
Sheets which contain hazard identification details and makethese sheets available on our website. GHS labels are also
attached to bags and flexible containers.

FY2018

Cadmium

Mercury

Min.

137

390

449

493

464

434

Average

221

57

62

63

66

61

Max.

668

84

84

77

88

82

Min.

18

41

38

43

39

43

Average

122

223

274

263

267

253

Max.

233

319

415

359

442

404

Min.

17

162

163

181

168

159

Average

17

12

18

13

15

14

Max.

39

43

47

28

47

39

Min.

2

2

6

7

6

6

Average

−

0.7

0.5>

0.8

0.8

0.7

Max.

−

1.2

0.5>

0.9

0.9

0.8

Min.

−

0.5>

0.5>

0.6

0.5>

0.5>

Average

1.5

1.3

1.3

2.0

1.7

1.5

Max.

2.6

2.0

2.0

3.0

2.0

2.0

Min.

0.6

1.0>

1.0>

1.0>

1.0>

1.0

Average−

0.008

0.005>

0.007

0.010

0.008

Max.

−

0.015

0.005>

0.011

0.020

0.012

Min.

−

0.005>

0.005>

0.005>

0.005>

0.005>

Value Chain Management

Please see our website for more information
about radioactive concentrations in our
products. (in Japanese)
https://www.taiheiyo-cement.co.jp/news/sokutei.html

Fluorine(Unit: mg/kg)

FY1988Human Capital

As a consequence of the nuclear accident at the Fukushima
Daiichi Nuclear Power Station of Tokyo Electric Power Company
Holdings, Inc. in 2011, we discovered that some industrial waste
used for making cement contained specified radioactive material.
We have established a system to ensure that the radioactive
concentration in cement shipped from our plants is below
the safety limit* set by the Japanese government by strictly
controlling the radioactive concentrations in raw materials andfuels for cement. In the interest of full disclosure, we post themeasurement results on our website every month.

Minor Components of Ordinary Portland Cement

Occupational Health and Safety

the volume of waste we receive increases. When we receive new
types of waste or waste from new sources, we strictly apply rules
under which we conduct three kinds of inspection related to thesource of the waste, its chemical composition and the results oftrial use to identify any potentially negative impact on productquality or the surrounding environment. We will then make a
final decision on whether to receive the waste. These measures
help us ensure product safety.

89

ESG Initiatives That Support Creation of Corporate Value
Value Chain Management

Responsible Sourcing and Supply
Approach
GRI-102-16

We believe that we grow along with our business partners. In
order that we may build relationships of mutual trust and work intandem with our business partners, our dealings with them arebased on fair contracts and we strictly adhere to our agreements.
We have established fundamental policies in order to clearly
establish our stance towards fair trade, under the “Dealingoutside the company in good faith” section of our Standards ofConduct and based on the principle that “we will act in an ethicalmanner and abide by the laws and regulations of those countries
in which we operate” defined in our Business Principles, and our
supply chain management is in accordance with these policies.

Fundamental Policies
 e will conduct fair marketing and bidding, and not engage inW
unfair practices such as collusion and cartels.
We will maintain appropriate and transparent relationships withour contractors.
We will select business partners in a fair and equitable manner.
We will not offer entertainment or gifts to customers that go
beyond what is legally and socially acceptable.
 Our advertising, displays and briefing sessions will be honest andsincere.
We will respond appropriately to customer feedback.
We will maintain transparent relationships with governments andlocal authorities.
We will respect the cultures and customs of the places where we
operate.

In addition, we established the Basic Policy Concerning
Procurement in October 2017 to consolidate commitments 2(“We will maintain appropriate and transparent relationships
with our contractors”) and 3 (“We will select business partners ina fair and equitable manner”), and request ethical conduct fromour contractors.

Please see our website for more information about the
Taiheiyo Cement Basic Policy Concerning Procurement.
https://www.taiheiyo-cement.co.jp/english
Sustainability Collaborating with Society
Supply Chain Management

In response to the strengthening of international regulations
against acts of bribery and to strengthen our initiatives against
corruption as stated in commitments 4 (We will not offer

90

entertainment or gifts to customers that go beyond what is legallyand socially acceptable) and 7 (We will maintain transparent
relationships with governments and local authorities), we
established our Anti-Bribery Policy in January 2017, andconcurrently released a statement by our president proclaiming
the group’s stance against bribery.

Please see our website for more information about the
Taiheiyo Cement Basic Policy Concerning Procurement.
https://www.taiheiyo-cement.co.jp/english
Sustainability Corporate GovernanceRisk Management and Compliance

Our Business Partners
GRI102-9

Our main business activities are involved with cement andconcrete. Limestone is the main raw material used and groupcompanies are largely in charge of aspects such as the operationand management of the quarries. Coal, however, which is asource of thermal energy and also part of the raw materials weuse, is sourced from companies outside the group. Moreover, thewaste and by-products that we recycle in our cement production
process come from many different industries and a variety oflocations.
Most of our production divisions are mechanized and there
are almost no labor-intensive processes. Tasks such as production
equipment maintenance are outsourced to partner companies
and contractors as and when necessary.
Our cement products are mainly marketed to building
materials companies. Raw materials and products are transported
by group companies and also by companies outside the group.
In our business activities we strive to communicate closelywith the local governments of the countries and regions where
our business sites are located. We deem it essential that our
supply chain respects human rights, in particular the banning offorced labor and child labor, complies with laws and responds todemands.

Safety of Business Partners Working at Our
Production Sites
GRI-403-1, 3

Operations at our cement production sites and quarries are
increasingly being mechanized. Since some tasks are performedin elevated places or at high temperatures, ensuring worker
safety at our production sites is essential. We do our best toensure that employees of contractors working at our sites avoid
any accidents. They receive various types of training when they
start work at the site, are required to submit a work plan that
includes a safety plan, and are given guidance with regard to thatplan.

Relevant SDGs

Enhancing Our Relationship with Our
Customers

We have founded and manage various cement user societies
and industry associations that support participants in vitalizing
their business operations and developing technologicalcompetitiveness. The National Taiheiyo Cement Ready-mixed
Concrete Society, the largest of these user societies, is made up of
ten Taiheiyo Cement Ready-mixed Concrete Societies, in locations
ranging from Hokkaido to Kyushu. We hold technical sessions
and presentations, as well as conduct activities under specificthemes suited to local conditions. We also focus on providing
support for users in obtaining qualifications such as Authorized
Concrete Engineer, Authorized Chief Concrete Engineer, andAuthorized Concrete Diagnosis and Maintenance Engineer.
In addition to the Ready-mixed Concrete Society, we haveestablished other associations such as the Taiheiyo Cement
Association for the Paving Block Industry and SPLITTON
Association Japan to proactively deliver technical support for themutual development of concrete product companies. We willcontinue to support activities that benefit cement users.

Activities of the National Taiheiyo Cement
Ready-mixed Concrete Society
RegionValue Chain Management

GRI417-1

Human Capital

User Societies and Industry Associations

Since its establishment in 2003, the Taiheiyo Cement
Association for the Paving Block Industry has promoted
the increased use of block paving through the exchange
of information on concrete block pavement design,
manufacturing and construction techniques, and thedevelopment of new products and technologies.
Labor shortages have become a major issue in recent
years, which requires a prompt response via productivity
improvement and reduction of labor demand in orderto maintain and expand the volume of pavement block
construction. In order to promote mechanized construction,
the association is working together with its members
nationwide to build a system from manufacturing plant andtransportation through to construction, and to study more
effective installation conditions.
The association is also actively working to address the
SDGs. As block paving has excellent durability, it can be
expected to materially contribute to reducing environmental
impact by lowering life-cycle costs and reducing waste. For
this reason, we are also focusing on advertising activities togain the understanding of specifiers and end-users.
The association will contribute to society through morevigorous activities to expand the applications and popularityof block paving.

Occupational Health and Safety

We place the highest priority on achieving greater customer
satisfaction. Business units periodically exchange informationand link up to strengthen production focused on quality thatmeets customer expectations.
We gather information about customer requirements
concerning product quality and services from our sales andtechnical staff at branches and sales offices. We then analyze
that information, make improvements, and provide feedback. To
encourage overseas customers to adopt our high-quality products
we have started to incorporate local needs into product quality,
just as we do for domestic customers, and we are fine-tuning our
products to meet the requirements of each overseas market. We
respond sincerely to every quality issue raised by our customers,
and strive to improve product quality and customer satisfaction.
We actively identify potential quality risks, investigate
their causes and implement stringent cross-divisionalcountermeasures with the aim of establishing an even morereliable quality assurance system.
In addition, we are expanding our quality assurance system toinclude the products of our group companies as well as Taiheiyo
Cement Corporation products. We systematically strive to identify
and address material issues via cross-divisional initiatives, andaim to boost the reliability of the Taiheiyo brand as well as
customer satisfaction.

Initiatives of the Taiheiyo Cement Association
for the Paving Block Industry

Details

Hokkaido

Occupational health and safety survey

TohokuSurvey on qualification acquisition and education

Tokyo

Online workshop for young and mid-career
engineers

Kanto

Concrete Forum (Online on-demand format)

Hokuriku

Preparatory courses for concrete engineer, chiefengineer, and diagnostician qualification exams

Chubu

On-line virtual workshop on setting the application
period of the structural strength correction value.

Kansai

Survey of ready-mixed concrete basic data andpreparation of model basic data

Shikoku

Online basic training course on concrete quality
control

Chugoku

Publication of “Examples of Responses toComplaints”

KyushuPublication of “Response Manual for Concrete in Hot
Weather” (2nd Edition)

91

ESG Initiatives That Support Creation of Corporate Value
Value Chain Management

Stakeholder Engagement
Approach

We are promoting timely and appropriate information
disclosure and communication with our stakeholders based on
our belief that in order to remain a sustainable company, it isessential for us to fulfill our social responsibility and continue
to build good relationships in response to the expectations andStakeholders

Shareholders, investors

92

demands of our diverse stakeholders.
We will continue to strive to make better use in ourmanagement of the opinions and requests we receive fromour stakeholders, and to further promote human capitalmanagement so that our employees, who are the greatest assetof a company, can work enthusiastically.

Stakeholders’ Interests
Financial strategy
Timely and appropriate disclosure
Shareholders and investors’ opinions on our business and mission

Local communities

Engagement with local communities
Biodiversity
Reduction of the company’s own waste generation
Appropriate Use of Water Resources
Appropriate Management of Chemical Substances

Customers and business partners

Delivering of carbon neutrality
ComplianceContributing to a recycling-based society
Conservation of the global environment
Quality Control
Improving customer satisfaction

Employees

Creating a safe and secure workplace
Promotion of diversity and inclusion
Respect for human rights
Work arrangement reform
Human resource development

Relevant SDGs

Occupational Health and Safety

Results (FY2022)

Future Issues

Engagements with local communities:
2,135- Global environmental conservation activities: 1,054- Revitalization of local culture and exchange: 816- Regional development:
148- Education and human resources development: 61- Disaster relief:24- Other:
32

R eviewing activities under the COVID-19
pandemicExploring activities based on the needs ofcommunities

Efforts Related to CO2 Emissions Reduction in the Cement Production ProcessB usiness activities based on our Basic Compliance Policy and Anti-Bribery Policy
Resource recycling with industry and local communities
Disclosure of maintenance and management information on our six directlycontrolled domestic plants pursuant to the Waste Disposal and Public
Cleaning Law: monthly
 Acquisition of ISO 14001 certification through our company-wide
environmental management system (including plants, headquarters,
branches and Central Research Laboratory)
 Acquisition of ISO 9001 certification: 100% in Japan, 100% in overseas
cement production sites in countries where ISO is the mainstream standard
National Taiheiyo Cement Ready-mixed Concrete Society: Individual activitiesin 10 regions in Japan
Various user groups: Taiheiyo Cement Association for the Paving Block
Industry, SPLITTON Association Japan, etc.

P romoting initiatives based on the Carbon
Neutral Strategy 2050
Ensuring compliance and anti-bribery
throughout the group
Achieving group environmental targets(reduction of CO2 and main air pollutant
emissions)Increasing customer satisfaction and trust in
the Taiheiyo brandContinuing support activities to meet theneeds of users

S afety promotion activities with KPIs set by the Companywide Health & Safety
Committee
Promotion of initiatives based on the “General Employer Business Action
Plan” in accordance with the Act on Promotion of Women’s Participation andAdvancement in the Workplace.
Promotion of employment of people with disabilities: Exceeded the statutory
employment rate (15 consecutive years)
Signatory to the UN Global Compact: May 2022
Promotion of work-life management
Promotion of H&PM: periodic health examinations (once/employee), stresschecks (once/employee), mental health consultation service (as needed)

Achieving safety-related KPIs
Continuing efforts to achieve the CSR
Objectives for 2025 (Diversity)
Promoting barrier-free accessibility at eachbusiness site
Identifying human rights risks throughout
the supply chain

Value Chain Management

 Reflecting the perspectives of shareholders
and investors
Promoting direct dialogue between
shareholders and investors and management
Timely and appropriate disclosure of
information and obtaining appropriate
evaluation from the market

Human CapitalIR activity results- Financial results briefing (online live broadcast): 2- Individual investor meetings:
174- Online investor conference:2- Online ESG seminar:
1
Publication of Integrated Report:
193

ESG Initiatives That Support Creation of Corporate Value
Value Chain Management

Communities

Practical Mechanical Equipment Maintenance Workshop
for Local High School Students
(Ofunato Plant)

Approach

We believe that by making social contributions in theareas where we operate, both domestically and overseas, we
can create social and environmental value and contribute to asustainable society and sustainable development of our business.
Through active communication with local communities we aim
to understand their respective needs and challenges and, bymaking contributions that leverage the characteristics of ourbusiness, we aim to build trust with local communities and growtogether with them.
Ofunato Plant has held workshops on mechanical equipment
maintenance, a part of the “Kesen Manufacturing Industry
Human Resource Development Network Project” led by Iwate
Prefecture, for local high school students since 2020.
Graduates from the school who currently work at Ofunato
Plant served as the instructors and provided guidance on
machine maintenance while the students had real contact withthe machines and tools.

Tree Planting Festival(Buko Mining Co., Ltd.)

Buko Mining Co., Ltd. holds an annual Tree Planting Festivalwith the aim of protecting the landscape of the area. In FY 2022,
trees were planted along the “Poppo Road”, a promenade built
on the former freight rail line in Hidaka City. At Buko Quarry, weare planting trees on old quarry areas where operations havecompletely ended with the cooperation of the Yokoze Town
Council and other local residents. We will continue our efforts
to preserve the local environment through our quarry greening
activities.

94

Reconstruction Support for Typhoon-Stricken Areas(Taiheiyo Cement Philippines, Inc., Philippines)

A large typhoon that hit the central Philippines region in
December 2021 caused extensive damage to Cebu Island. In
a disaster in which many residents were forced to evacuate,
Taiheiyo Cement Philippines donated relief money to theProvince of Cebu and Municipality of San Fernando, where its
plant is located, donated a total of 20,000 liters of water fordaily use and drinking, mainly to evacuation centers in the town,
and also provided support for the early recovery of the local
community.

Relevant SDGs

Providing a Plant Site For Health Checkups for Local
Residents
(Oita Plant)

Acceptance of Interns and Work Experience Students

In response to a request from the local city of Tsukumi,
the Oita Plant offers its premises free of charge every year for
use by three adult disease screening vehicles during regular
health checkups for residents of the Kegoya district. As there
are no health checkup centers within walking distance in the
Kegoya district, local residents have expressed gratitude for theopportunity to receive checkups in the neighborhood without
having to travel far.

Myojo Cement accepted interns from Itoigawa Hakurei HighSchool and work experience students from Itoigawa Junior HighSchool, both in Itoigawa city. The program involved an employee
explaining the social role of the cement industry and a tour ofthe limestone quarry and cement plant. We hope to expand it toother schools in Itoigawa.

Donation of Ventilators to Thanh Hoa Province

Online Lecture to Junior High School Students

Nghi Son Cement donated three ventilators to Thanh Hoa
Province, where the company's headquarters and plant arelocated, during the construction of a new hospital specializingin treating severely ill COVID-19 patients. Thanh Hoa Province
expressed its gratitude to Nghi Son Cement who aim to growtogether with the local community.

CalPortland provided an online lecture on cement production
to 200 junior high school students in the High Desert regionof California where their operations are based. The importanceof concrete as a construction material and the variety of careersavailable in the industry were also explained. Also, CalPortland
provided kits to allow students to experience mixing concrete
and intend to continue various activities to improve theunderstanding of the cement industry among students and the
local community.

Occupational Health and Safety
Human Capital(CalPortland Company, U.S.)

Value Chain Management(Nghi Son Cement Corporation, Vietnam)(Myojo Cement Co., Ltd.)95

ESG Initiatives That Support Creation of Corporate Value

GOVERNANCE
Management Supporting Value Creation

Our Directors and Corporate Auditors

Back
row

Front
row

96

Independent Corporate Auditor

Yoshio Fujima

Corporate Auditor (Standing)

Katsuhide Fukuhara

Independent Director

Yoshiko Koizumi

Independent Director

Shinhachiro Emori

Director and Senior Executive Officer

Tetsuya Ohashi

Vice President and Representative Director

Yuuichi Kitabayashi

Our Directors
and Corporate Auditors
Roundtable Discussion
by the Independent Directors
Corporate GovernanceRisk Management
and ComplianceDirector and Senior Executive Officer

Hideaki Asakura

President and Representative Director

Masafumi Fushihara

Director and Senior Executive Officer

Yukimasa Nakano

Vice President and Director

Kunihiro Ando

Independent Director

Hideyuki Furikado

Corporate Auditor (Standing)Masahiro Karino

Independent Corporate Auditor

Wakako Mitani

97

ESG Initiatives That Support Creation of Corporate ValueOur Directors and Corporate Auditors

Directors
Masafumi Fushihara

Yuuichi Kitabayashi

Career Summary

Career Summary

President and Representative Director
Apr. 1978 Joined Onoda Cement Co., Ltd.

Apr. 2007 General Manager of Business Promotion Departmentof Environmental Business Company, Taiheiyo Cement
Corporation

May 2009 General Manager of Sales Department of Environmental
Business Company
Oct. 2010 General Manager of Environmental Business
Development Department

Apr. 2012 Executive Officer and General Manager of Environmental
Business Development Department
Apr. 2015 Managing Executive Officer
Jun. 2015 Director and Managing Executive Officer

Apr. 2016 Director and Managing Executive Officer
Senior General Manager of Cement Business Division
Apr. 2017 Director and Senior Executive Officer
Senior General Manager of Cement Business Division
Apr. 2018 President and Representative Director (to present)

Experience and Knowledge

Since 2015, Mr. Masafumi Fushihara has engaged in the management of the company as a director and was
appointed as president and representative director in April 2018 after serving as senior general manager of
Cement Business Division. He possesses a wealth of managerial experience, achievements and management
insights. He continuously strives to increase the corporate value of the group and significantly contributes to its
development, while also identifying key management issues and supervising business execution.

Apr. 1978 Joined Nihon Cement Co., Ltd.

May 2009 General Manager of Kamiiso Plant, Taiheiyo Cement
Corporation
Apr. 2011 Executive Officer and General Manager of Production
Department
Apr. 2013 Managing Executive Officer

Jun. 2013 Director and Managing Executive Officer
Apr. 2016 Senior Executive Officer and Representative Director

Apr. 2017 Vice President and Representative Director (to present)

Apr. 2021 Vice President and Representative Director
Overseeing the Carbon-Neutral Technology Development
Project Team and Philippines Renovation Construction
Project Team (to present)

Experience and Knowledge

Since 2013, Mr. Yuuichi Kitabayashi has engaged in the management of the company as a director and was
appointed as a representative director in 2016. He possesses a wealth of managerial experience, achievements
and management insights. In addition, as the officer in charge of the Carbon-Neutral Technology Development
Project Team and the Philippines Renovation Construction Project Team since 2021, he is effective in the role of adirector in striving to continuously increase the corporate value of the group as he significantly contributes to its
development while also identifying key management issues and supervising business execution.

Kunihiro Ando

Tetsuya Ohashi

Career Summary

Career Summary

Vice President and Director

Director and Senior Executive Officer

Apr. 1980 Joined Onoda Cement Co., Ltd.
Apr. 2011 General Manager of Ofunato Plant, Taiheiyo Cement
Corporation

Apr. 1982 Joined Onoda Cement Co., Ltd.
Oct. 2010 President of Taiheiyo Cement U.S.A. Co., Ltd.

Apr. 2016 Managing Executive Officer

Apr. 2019 Managing Executive Officer

Apr. 2013 Executive Officer and General Manager of Oita Plant
Apr. 2015 Executive Officer and General Manager of Mineral
Resources Business Department

Apr. 2015 Senior General Manager of International Business
Division, Taiheiyo Cement Corporation
Apr. 2016 Executive Officer and Senior General Manager ofInternational Business DivisionJun. 2016 Director and Managing Executive Officer
Apr. 2020 Director and Senior Executive Officer
Jun. 2022 Vice President and Director (to present)

Jun. 2019 Director and Managing Executive Officer
Jun. 2020 Managing Executive Officer
Apr. 2021 Senior Executive Officer

Experience and Knowledge

Since 2016, Mr. Kunihiro Ando has engaged in the management of the company as director. As the officer incharge of mineral resources business and environmental business divisions, he is effective in the role of a director
in striving to continuously increase the corporate value of the group and significantly contribute to its development
while also identifying key management issues and supervising business execution.

Jun. 2021 Director and Senior Executive Officer (to present)

Experience and Knowledge

Since 2019, Mr. Tetsuya Ohashi has engaged in the management of the company as a director and significantly
contributes to the development of the group as the officer in charge of corporate planning and human resources
divisions. He is effective in the role of a director in striving to continuously increase the corporate value of the groupas he significantly contributes to its development while also identifying key management issues and supervisingbusiness execution.

Hideaki Asakura

Yukimasa Nakano

Career Summary

Career Summary

Director and Senior Executive Officer
Apr. 1982 Joined Nihon Cement Co., Ltd.
Apr. 2011 President of Nghi Son Cement Corporation
Apr. 2016 Executive Officer, Taiheiyo Cement Corporation
President of Nghi Son Cement Corporation
Apr. 2018 Executive Officer and General Manager of Sales
Department of Cement Business Division
Apr. 2019 Managing Executive Officer
Jun. 2019 Director and Managing Executive Officer
Jun. 2020 Managing Executive Officer
Apr. 2022 Senior Executive Officer
Jun. 2022 Director and Senior Executive Officer (to present)

Experience and Knowledge

Since 2019, Mr. Hideaki Asakura has engaged in the management of the company as a director and significantly
contributes to the development of the group as the officer in charge of accounting, legal and internal auditing
departments and real estate division. He is effective in the role of a director in striving to continuously increase thecorporate value of the group.

98

Vice President and Representative Director

Director and Senior Executive Officer
Apr. 1982 Joined Onoda Cement Co., Ltd.
Apr. 2012 General Manager of Chubu Hokuriku Branch, Taiheiyo
Cement Corporation
Apr. 2015 General Manager of Sales Department of Cement
Business Division
Apr. 2016 General Manager of Kyushu Branch
Apr. 2017 Executive Officer and General Manager of Kyushu Branch
Apr. 2018 Executive Officer and General Manager of Tokyo Branch
Apr. 2020 Managing Executive Officer and Senior General Manager
of Cement Business Division
Apr. 2022 Senior Executive Officer and Senior General Manager of
Cement Business DivisionJun. 2022 Director and Senior Executive Officer and Senior General
Manager of Cement Business Division(to present)

Experience and Knowledge

Since 2022, Mr. Yukimasa Nakano has engaged in the management of the company as a director and significantly
contributes to the development of the group as the officer in charge of cement business division. He is effective inthe role of a director in striving to continuously increase the corporate value of the group.

Yoshiko Koizumi

Shinhachiro Emori

Career Summary

Career Summary

Independent Director

Experience and Knowledge

After working as counsel and partner at law firms, Ms. Yoshiko Koizumi was appointed as an independent director of
the company in June 2015. She has a wealth of corporate law experience and provides precise recommendations
and advice from an objective standpoint. Independent of the management team that executes business in the
Board of Directors, she also monitors and supervises overall management.

Apr. 1975 Joined Toyo Soda Manufacturing Co., Ltd.
(currently TOSOH CORPORATION)
Jun. 2010 Director of TOSOH CORPORATION
Jun. 2011 Managing Director of TOSOH CORPORATION
Jun. 2012 Representative Director and Managing Executive Officer
of TOSOH CORPORATION
Jun. 2015 President and Representative Director of TAIYO VINYLCORPORATION
Jun. 2020 Independent Director of Taiheiyo Cement Corporation (topresent)

Experience and Knowledge

After serving as representative managing director of Tosoh Corporation and president and representative director of
Taiyo Vinyl Corporation, Mr. Shinhachiro Emori was appointed as an independent director of the company in June
2020. He possesses a wealth of experience, achievements and insight as a corporate manager. He provides precise
recommendations and advice from an objective standpoint. Independent of the management team that executes
business in the Board of Directors, he also monitors and supervises overall management.

Our Directors
and Corporate Auditors

Apr. 1972 Registered as a lawyer (Daini Tokyo Bar Association)
Jan. 1980 Partner, Masuda and Ejiri Law Office (now Nishimura &Asahi)
Jan. 2008 Counsel of Nishimura & Asahi
Apr. 2009 Partner of City-Yuwa Partners (to present)
Jun. 2015 Independent Director of Taiheiyo Cement Corporation(to present)
Independent Director of Dowa Holdings Co., Ltd. (to present)
Jun. 2016 Independent Director of Sumitomo Bakelite Co., Ltd.
Sep. 2017 Independent Corporate Auditor of Nippon Koei Co., Ltd.
(to present)

Independent Director

Hideyuki Furikado
Roundtable Discussion
by the Independent Directors

Independent Director

Career Summary
Apr. 1977 Joined the Ministry of FinanceJul. 2004 Deputy Director-General of Financial Services Agency
Jul. 2010 President, Policy Research Institute, Ministry of Finance,Japan
Dec. 2013 Retired from Ministry of FinanceJun. 2014 Senior Managing Director of Trust Companies Associationof JapanJun. 2021 Independent Director of Taiheiyo Cement Corporation (topresent)

Experience and Knowledge

After serving at the Ministry of Finance and as the managing director of a general incorporated association, Mr.
Furikado was appointed as an independent director of the company in June 2021. He has extensive administrative
experience as a government official, and provides precise recommendations and advice from an objective
standpoint. Independent of the management team that executes business in the Board of Directors, he also
monitors and supervises overall management.

Corporate GovernanceCorporate Auditors
Katsuhide Fukuhara

Masahiro Karino

Career Summary

Career Summary

Corporate Auditor (Standing)Experience and Knowledge

Mr. Katsuhide Fukuhara possesses a wealth of professional experience and expertise as a director and managing
executive officer with extensive responsibilities in construction materials business and group company
administrative divisions whose work includes advancing our group management. He effectively audits theexecution of duties by directors to continuously improve the corporate value of the group.

Wakako Mitani

Apr. 1980 Joined Nihon Cement Co., Ltd.
Apr. 2004 General Manager of Legal Department, Taiheiyo Cement
Corporation
Apr. 2013 Executive Officer and General Manager of Legal Department
Apr. 2016 Managing Executive Officer
Jun. 2016 Director and Managing Executive Officer
Apr. 2019 Director and Senior Executive Officer
Apr. 2022 Director
Jun. 2022 Corporate Auditor (Standing) (to present)

Experience and Knowledge

Mr. Masahiro Karino possesses a wealth of professional experience and expertise as a director and managing
executive officer with extensive responsibilities in human resources, legal and auditing divisions, whose
work includes advancing our group management. He effectively audits the execution of duties by directors tocontinuously improve the corporate value of the group.

Yoshio Fujima

Independent Corporate Auditor

Independent Corporate Auditor

Apr. 2000 Registered as a lawyer (Daiichi Tokyo Bar Association)
Jul. 2001 Joined TANABE & PARTNERS
Apr. 2012 Partner, TANABE & PARTNERS (Current position)
Feb. 2018 Independent Corporate Auditor of Taiheiyo Cement
Corporation (to present)

Nov. 1974 Joined Chuo Audit Corporation (now MISUZU Audit Corporation)
Mar. 1980 Registered as a certified public accountant
Sep. 1990 Employee, Chuo Shinko Audit Corporation (now MISUZU
Audit Corporation)
Aug. 1996 Representative Partner, Chuo Audit Corporation (now
MISUZU Audit Corporation)
Jul. 2007 Retired from MISUZU Audit Corporation
Jun. 2011 Independent Corporate Auditor, JIEC Co., Ltd.
May 2012 Independent Corporate Auditor, Prime Works Co., Ltd. (nowNeos Corporation)
May 2016 Independent Director (Audit and Supervisory Committee
Member), JIEC Co., Ltd.
Jun. 2019 Independent Corporate Auditor of Taiheiyo Cement
Corporation (to present)

Career Summary

Experience and Knowledge

After working as a partner at a law firm Ms. Wakako Mitani was appointed as an independent corporate auditor of
the company in February 2018. As a lawyer she has considerable experience, achievements and insights in the fieldof corporate legal affairs, and effectively audits the execution of duties by directors from an independent, objective
and fair standpoint.

Risk Management
and ComplianceApr. 1981 Joined Onoda Cement Co., Ltd.
Apr. 2013 General Manager of Corporate Planning Department,
Taiheiyo Cement Corporation
Apr. 2015 Executive Officer and General Manager of Corporate
Planning Department
Apr. 2017 Managing Executive Officer
Jun. 2017 Director and Managing Executive Officer
Jun. 2020 Managing Executive Officer
Jun. 2021 Corporate Auditor (Standing) (to present)

Corporate Auditor (Standing)

Career Summary

Experience and Knowledge

After serving as a representative partner of an auditing firm and an independent director and auditor of operatingcompanies, Mr. Yoshio Fujima was appointed as an independent corporate auditor of the company in June 2019.
As a certified public accountant, he has abundant experience, achievements and insights, including many years
of practical experience in corporate accounting. He effectively audits the execution of duties by directors from an
independent, objective and fair standpoint.

99

ESG Initiatives That Support Creation of Corporate Value

Roundtable Discussion by the Independent Directors
We want to see the company further strengthen its group
governance and enhance communication with stakeholders
about its efforts to create corporate and social value.

Independent Director

Shinhachiro Emori

Independent Director

Yoshiko Koizumi

Independent Director

Hideyuki Furikado

We asked our three Independent directors to discuss the status and issues of the group's
corporate governance structure and make recommendations, in particular regarding the ideal
form of group governance. They also identified that we should be more proactive in promoting
our initiatives to solve social issues in order to increase external recognition of our efforts.

100Spreading corporate governance from the parent
company to the group
Koizumi: Since becoming an independent director in 2015,
I have continued to have the impression that this is a solid
company. From a legal perspective, its rules and regulations
are developed and implemented well. The company has been
improving its business activities from a CSR perspective under
the CSR Management Committee chaired by the President,
while also enhancing corporate governance, and I believethat the company has both steadiness, which is backed by its
history, as well as a progressive spirit.
Furikado: Thorough explanations of each agenda item
are provided in advance, which enables the independent
directors to fully demonstrate our individual expertise at
Board of Directors meetings, and regular business reports areprovided weekly. I consider the fact that we can immediately
receive a direct explanation from the department in charge
when we request additional information as an indication ofmanagement's strong intention to improve managementtransparency and corporate governance.

Risk Management
and Compliance

Furikado: I have been involved in the design andintroduction of various systems centered around financial
policy as a civil servant at the national level. Constructive
dialogue with investors based on the Stewardship Code andCorporate Governance Code has become the norm, and I
helped lay the foundations for designing the system to build
such relationships between companies and investors. As I
also have experience in the development of laws and systems
related to the governance of financial institutions, I believe

Corporate Governance of the Taiheiyo Cement
Group

Corporate Governance

Emori: My background is working for a chemical
manufacturer that also manufactures cement, where I
spent most of my career in the sales, human resources andcorporate planning departments, and also served as botha representative of the parent company and of the groupcompanies. As an independent director who knows thepracticalities of corporate management, I believe that my roleis not only to put the brakes on management, but to also stepon the accelerator occasionally. I believe that I can enhancethe effectiveness of the Board of Directors by providing usefuladvice when difficult business decisions must be made.

that my role is to contribute to the enhancement of corporate
value by fully utilizing this knowledge, promoting constructive
dialogue with investors, and making recommendations toenhance group governance.

Roundtable Discussion
by the Independent Directors

Koizumi: My first exposure to the world was working as aninterpreter at the 1964 Tokyo Olympics, which inspired me
to be active in the global society and pursue a career as aninternational lawyer. Since then, I have been involved mainly
in corporate overseas expansion, international transactions
and dispute resolution, and I am now in my 50th year. I am
able to offer analysis and suggestions as an international
lawyer on corporate legal affairs such as barriers and solutions
for further globalization of the group, which has its overseas
production and sales bases mainly in the Pacific Rim, as
well as candid opinions based on my experience as anindependent director and independent corporate auditor atother companies.

Our Directors and Corporate Auditors

Recommendations Based on Their Careers as
Independent Directors

Emori: While I have the same view about the management's
efforts towards steadiness backed by history and corporate
governance, I believe that the group’s sustainable
development depends on how this attitude and effort can be
developed throughout the entire group. The group consistsof more than 270 group companies, each of which not only
sufficiently performs its own function in the cement supply

101

ESG Initiatives That Support Creation of Corporate Value
Roundtable discussion by the Independent Directors

chain, from the extraction of raw materials, such as limestone,
to the manufacture and sale of ready-mixed concrete andconcrete products. I also consider the group to be a wellbalanced corporate entity, with consolidated net sales morethan double the parent company’s net sales. A relationship oftrust between the parent company and each group company
is essential to build and spread group governance, and frommy practical experience as a manager, I believe that theaccumulation of daily communication is extremely importantin fostering this relationship.
Koizumi: Overseas subsidiaries account for about 40% of
the group's cement production capacity and more than halfof consolidated operating income. In addition, since growthinvestments in the U.S. and Southeast Asia are expected tocontinue in the future, it will be important how we can instill
the company’s spirit and ensure effective governance in ouroverseas subsidiaries, which have different histories, featuresand cultures, even more so than the domestic group companies.
Furikado: In order to unite group companies with different
histories, business categories and corporate cultures, theparent company should break free from a top-down structure
and improve interactive communication with the groupcompanies. If the voice of the group companies is regularly
reaching the headquarters, we will be able to identify issues
that will enhance the governance of the group companies
even more than before, which should foster a strong sense ofunity throughout the group.

Toward Improving the Effectiveness of the Board of
Directors
Koizumi: The effectiveness of the Board of Directors isevaluated through a self-assessment questionnaire of all
directors, the results of which are analyzed and evaluated by
the Chairman of the board and the independent directors as
the evaluation entity. The Board of Directors' meetings feature
open and constructive comments and active discussions,with independent directors and corporate auditors making
a particularly significant contribution to the deliberations bymaking proposals and raising issues. One issue is the lack ofprogress reports on the execution of important projects andfeedback on the opinions and suggestions received frominstitutional investors at investor meetings.
Emori: While I also consider it is important to provide
independent directors with information on the status ofexecution of important projects, I believe that if there is amore detailed explanation of the matters discussed within thecompany prior to the proposal being submitted to the Board of
Directors, we will gain a clearer image of the proposal and thequality of the discussion at the Board meeting will be enhanced.
Furikado: Independent directors are expected to reflect theperspective of investors gained through dialogue with themin the discussions at board meetings, as well as to provide
information and explanations to investors and others as
a supervisor of management. While the directors receive
timely reports through investor interviews after financial

102

Our Directors and Corporate Auditors

as officers of the parent company, I expect that innovation will
also be created naturally.

Corporate Governanceresults are published and ESG interviews, as an independent
director I believe that increasing the opportunities for direct
dialogue with investors and other stakeholders would improve
the quality of proposals to the Board of Directors and theeffectiveness of the Board.

Emori: The group has long been involved in environmental
issues and has contributed to the creation of a recyclingbased society by reusing waste and by-products in the
cement production process. As a leading company in Japan’s
cement industry, the early establishment of carbon neutral
technology that can be implemented in society is also seen as
an important growth strategy. I want to accurately disseminate
such information on our corporate activities to meet the
expectations of our stakeholders.

Roundtable Discussion
by the Independent Directors

Furikado: Along with the development and utilization ofhuman resources, the protection of human rights is also an
extremely important management issue. The Group signed
the United Nations Global Compact in May 2022, expressing
its commitment to manage its operations with an even greater
emphasis on human rights. The signing was also used as theopportunity for commencing human rights due diligence inthe supply chain.

Sustainability Initiatives
Risk Management
and Compliance

Koizumi: Sustainability is deeply ingrained in the group's
DNA and it is investing in quarry developments andstrengthening of plant facilities in a planned manner with aview to the next 100 years and towards sustainable growth.
I believe that developing and utilizing the diverse humanresources that will succeed this DNA is also an important issue.
In addition to setting diversity targets in the CSR Objectives
for 2025 and promoting the active participation of women,
the company is also promoting a mid- to long-term training
program for excellent human resources in Japan and overseas
as part of our efforts to utilize diverse human resources. If we
can go one step further in the utilization of human resources,
such as by appointing people from overseas group companies

103

ESG Initiatives That Support Creation of Corporate Value

Corporate Governance
We have established the Basic Policy on Corporate Governance and are working to continually enhance it with theaim of fulfilling our management responsibility towards all our stakeholders, including shareholders, and to achievesustainable growth while maximizing our corporate value.

Corporate Governance System

Corporate Governance

GRI102-18, 19, 22, 23, 24, 28, 29, 30, 33, 35, 36, 37

Toward sustainable growth and maximizing our corporate
value, we are working to enhance corporate governance.

Please refer to our website for the “Taiheiyo Cement
Corporation Basic Policy on Corporate Governance.”https://www.taiheiyo-cement.co.jp/english
About Us Corporate Governance

We are building a system that accurately recognizes andaddresses corporate governance issues, governance effectivenessand governance themes in order to deploy a sustainable businessmodel on a global scale.
Our management structure is based upon the Board of
Directors and Board of Auditors. We have also introduced
an executive officer system and are endeavoring to separate
management decision-making and monitoring/supervisory
functions from business execution. Our Corporate Auditor’s Officeprovides comprehensive support for corporate auditors in theperformance their duties. We have set up an internal control
system in the Internal Auditing Department and, by means ofinternal audits, strive to ensure that operations are properly
executed in the company and group companies.
We have also established a CSR Management Committeewith the aim to promote sustainability. Under that we haveestablished specialized committees on human rights and labor,
environmental management and quality control, and are working
to enhance our corporate governance.

Corporate Governance System
General Meeting of Stockholders
Appointment/removal from office

Audit

Appointment/
removal from office

Board of Auditors
Assistance(Management decision-making andsupervision)

Consultation
Findings

Selection/removal/supervision
Appointment/
removal from office

ReportNomination and Compensation
Advisory Committee

Accounting Auditor

Audit

Report

CSR Management
Committee

Managing Executive Officer
Executive Committee(Review of important matters)
Final decision/instruction/
supervision

Executive Officer
Headquarters, branches, plants,
Research Center (business execution),group companies

104

Appointment/
removal from office

Corporate Auditor’s Office

Board of Directors

Representative Director

Cooperation

Audit

Internal Auditing
Department

For decision-making andbusiness execution tasks
requiring high levels of
expertise, we receive advice
from consulting law firms,
management consultants
and other experts.

Outline of Our Governance System (As of June 29, 2022)
No. of people etc.
Organizational structure

Company with a
Board of Auditors

Chairman of the board

President
9 (1)
3 (1)
3 (1)

Tenure of a director

1 year(number of meetings attended / number of meetings held)

Name

Board of Directors

Masafumi Fushihara

15 / 15 (100%)

Yuuichi Kitabayashi

15 / 15 (100%)

Masahiro Karino

15 / 15 (100%)

Kunihiro Ando

15 / 15 (100%)

Tetsuya Ohashi

11 / 11 (100%)

Shuji Fukuda

15 / 15 (100%)Yes

No. of corporate auditors (No. of female
corporate auditors)
No. of independent directors included in that figure
No. of independent directors included in that figure

4 (1)Yoshiko Koizumi

14 / 15 (93%)

2 (1)
2 (1)

Shinhachiro Emori

15 / 15 (100%)

Hideyuki Furikado

11 / 11 (100%)

Shigeru Matsushima

15 / 15 (100%)

Katsuhide Fukuhara

11 / 11 (100%)

Wakako Mitani

15 / 15 (100%)

Yoshio Fujima

14 / 15 (93%)

Ratio of Women Directors

2 womenRatio of Women
15.4%

Number of Board of Directors meetings held during the term of office: 15, except for Mr.
Tetsuya Ohashi and Mr. Hideyuki Furikado, where 11 meetings were held after they became
directors, and Mr. Katsuhide Hattori, where 11 meetings were held after he became acorporate auditor.

Roundtable Discussion
by the Independent Directors

Executive officer system

Our Directors and Corporate Auditors

No. of directors (No. of female directors)
No. of independent directors included in that figure
No. of independent directors included in that figure

Attendance at Board of Directors meetings in FY2022

Corporate Governance

11 menMajor Meetings Held
Meeting

Board ofAuditors

Executive
Committee

Presence ofindependent
officers

15

98%

In principle, the Board of Directors meets once a month and at other times when necessary, tomake decisions on matters required by law and important matters related to the management of thecompany.
The Board of Directors consists of nine directors, three of whom are independent directors. In
addition, all of the corporate auditors attend the Board of Directors meetings. 15 meetings were held
in FY2022, with 99% attendance by directors and 98% attendance by corporate auditors.

100%

The Board of Auditors, consisting of two internal corporate auditors and two independent
corporate auditors, fulfills its supervisory and auditing function over management by attending theBoard of Directors meetings and other important meetings, questioning the directors and others
about the performance of their duties, and inspecting important approval documents. In addition,in order to enhance the audits, the corporate auditors visit branches, plants and subsidiaries toinvestigate the status of the business operations of the company and group companies. Also,
regular corporate auditor liaison meetings are held for the corporate auditors to exchange opinions
among themselves (and including those in charge of related divisions when necessary) and share
information to build a system that enables fair and appropriate auditing.

−

The Executive Committee consists of all internal directors and managing executive officers except
the Chairman of the Board, and makes decisions on important matters other than those that are to
be decided by the Board of Directors in accordance with the Companies Act. A standing corporate
auditor attends the Executive Committee meetings. Although the independent directors andindependent corporate auditors do not attend these meetings, the Corporate Planning Department
reports regularly to the independent directors (weekly in principle), and a liaison meeting is held forindependent corporate auditors (weekly in principle) where the standing corporate auditors reporton the details of important internal meetings such as the Executive Committee, share information
and assist them in the execution of their duties.

16

14

Overview

Risk Management
and Compliance

Board ofDirectors

No. of
times
held

105

ESG Initiatives That Support Creation of Corporate Value
Corporate Governance

Overview of Our Directors and Corporate Auditors

Name

Position

Masafumi Fushihara

Representative Director
President

Yuuichi Kitabayashi

Representative Director
Vice President

Kunihiro Ando

Director
Vice President

Tetsuya Ohashi

Director
Senior Executive Officer

Hideaki Asakura

Director
Senior Executive Officer

Yukimasa Nakano

Director
Senior Executive Officer

Yoshiko Koizumi

Director

Shinhachiro Emori

Director

Hideyuki Furikado

Director

Katsuhide Fukuhara

Corporate Auditor(Standing)Masahiro Karino

Corporate Auditor(Standing)

Wakako Mitani

Corporate Auditor

Yoshio Fujima

Corporate Auditor

Nomination
andProduction
Independent Compensation
Corporate Technologies
officermanagement
Advisory
Research
Committee

Sales
Marketing

Finance
Legal Risk
Accounting management

Globalbusiness(Chairperson)

Appointment of Board Members

Nomination and Appointment of Prospective Directors

The President proposes prospective directors to the Board of
Directors selected from a diverse pool of talent, both within andindependent of the company, in accordance with the Basic Policy
on Corporate Governance. The Board of Directors deliberates andnominates them as prospective directors, who are then appointed
by resolution of the General Meeting of Shareholders. During
the nomination of prospective directors, the Nomination andCompensation Advisory Committee deliberates and reports theresults of its deliberations to the Board of Directors.

Nomination and Appointment of Prospective Corporate
Auditors

After gaining the approval of the Board of Auditors, thePresident proposes to the Board of Directors prospective
corporate auditors endowed with the ability to fairly audit theoverall duties of the directors, having suitable experience andskills, and possessing adequate expertise in financial affairs,

106

Expertise and experienceaccounting and legal affairs. After deliberation by the Board of
Directors, nominated candidates are appointed by resolution of
the General Meeting of Shareholders.

Nomination and Appointment of Prospective
Independent Officers

Prospective independent officers must satisfy the company’s
Independence Criteria for Independent Officers and be
capable of supervising our directors and management from an
independent, external standpoint, and of providing proper andappropriate advice based on their experience and insights fromcareers in professions such as lawyer, corporate manager, certified
public accountant or government official.

Please see our website for more information about
the Independence Criteria for Independent Officers
https://www.taiheiyo-cement.co.jp/english

About Us Corporate GovernanceTaiheiyo Cement Corporation Basic Policy on Corporate GovernanceEvaluating the Effectiveness of the Board of
Directors

The System to Promote CSR Management

Board of Directors- Organizational
Governance- Fair Business
Practices- HumanRights- Labor
Practices

Audit

Internal Auditing Department

Risk Management
and ComplianceGroup companies

Specialized committees

Stakeholder Communication
Committee

Environmentally-conscious
Management Committee

Date- Human Rights, Environmental
and Consumer Issues- Community Involvement andDevelopment

Quality Assurance &Product Liability Committee

CSR Management Committee Meetings

Company-wide Health &Safety Committee

Human Rights &Labor Practices Committee

Information Security
Committee

All business sites

Chair: President
Secretariat: General Affairs
Department CSR Group

Corporate Governance

CSR Management Committee

Risk Management &Compliance Committee

To promote our CSR management we have created a crossdepartmental CSR Management Committee, chaired by thepresident with all board directors and all managing executive
officers as members, under the direct oversight of the Board of
Directors. The CSR Management Committee’s role is to screen
CSR action plans and other important matters, and review theirprogress. Reporting to this committee are seven specializedcommittees for individual CSR subjects, each chaired by the
director responsible for that area. The department most closely
associated with any given issue acts as the secretariat for the
related committee.

Roundtable Discussion
by the Independent Directors

We established the Nomination and Compensation
Advisory Committee in March 2021 with the aim of further
enhancing corporate governance by improving the fairness,transparency and objectivity of the procedures for nominating
directors and managing executive officers, and determining
their compensation. The Committee consists of four directors
appointed by resolution of the Board of Directors, three of whom
are independent directors. The Committee is chaired by anindependent director appointed by resolution of the Board of
Directors.
The Committee deliberates and reports to the Board of
Directors on policies regarding the nomination of directors, theappointment and removal of directors, policies for determining
the compensation of individual directors, and the details of thecompensation of directors.

Our Directors and Corporate Auditors

We strive to share information among the internal andexternal officers in order for the Board of Directors to supervise
the execution of the business and make appropriate decisions.
Efforts are made to enhance the effectiveness of the directors
by providing timely and appropriate information and providingthem with opportunities to inspect business sites, including
overseas and affiliate companies. In addition, we analyze andevaluate the overall effectiveness of the Board of Directors on
an annual basis. All directors and corporate auditors fill out aquestionnaire, asking them to freely and openly express theiropinions on the structure, operations, agenda, deliberations andother aspects of the Board of Directors. The Chairman of the board
and independent directors perform an analysis and assessment
and report the details to the Board of Directors. Future challenges
and measures are then discussed and confirmed. We have madeimprovements to the structure and operations of the Board of
Directors on the basis of the results, and the evaluation has
deemed that the overall effectiveness of our Board of Directors is
being ensured.

Activities of the Nomination andCompensation Advisory Committee

Main Details

1st:

May 20, 2021 (online)

Preparation of the Integrated Report

2nd:

September 28, 2021

Interim report on the FY2022 activities of the seven specialized committees
Countermeasures against the spread of COVID-19

3rd:

December 21, 2021

Status of response to the ESG investment survey

4th:March 29, 2022

Report on the FY2022 activities of the seven specialized committees
Planning of the FY2023 activities of the seven specialized committees
Progress of the CSR Objectives for 2025

107

ESG Initiatives That Support Creation of Corporate Value
Corporate Governance

Changes in Governance2004

Management
Organization

2009

2010

2011

2012

22 10

13

8

Independent
Directors
2 years

Term

Corporate Auditors

2014

2015

2016

2017

2018

2019

2020

2021

7

9

2022

2023

10

11

13

1

2

14

3

Up to 1 year

4 5

4Basic Policy on Corporate
Governance

Implementation of the Basic Policy

Nomination andCompensation Advisory
Committee

Establishment

Executive Compensation
System(Restricted Stock
Compensation System)

Restricted
Stock
Compensation
SystemSpecific Activities of Independent Directors(Board Meeting Attendance)

FY2022
Name

Board
Meeting
Attendance

Details of Contribution

14/15

Providing appropriate comments
mainly based on her extensive
experience as an attorney and broad
insight into corporate legal affairs.

Shinhachiro
Emori

15/15

Providing appropriate comments
mainly based on his extensive
experience and broad insight as the
manager of a business corporation.

Hideyuki
Furikado

11/11*

Providing appropriate comments
mainly based on his extensive
experience and broad insight as anational public servant.

YoshikoKoizumi* 15 Board of Directors meetings were held during the fiscal year, of which 11 were held
after Mr. Hideyuki Furikado assumed the role.

108

2013

Executive Committee established; executive officer system introduced.

Total
NumberDirectors

・・・Internal Control System
GRI102-30

We follow the Basic Policy for Building an Internal Control
System to ensure suitable and efficient operations at thecompany and group companies. Our basic approach is to improveand strengthen systems that are currently in operation, and toreview and reappraise essential matters.
Audits were carried out at six Taiheiyo Cement business sites
and fourteen domestic group companies in FY2022. Mattersin need of improvement were identified, and advice andrecommendations are being given.

Board Member Remuneration

Determining Board Member Remuneration

Performance-based Share-based
compensationcompensation

Fixed compensation

No. of board
members
remunerated

Amount of
remuneration paid
(million yen)

Corporate Auditors

572

Sub-total

14

584

Category

Directors

9512

The above count of board members and corporate auditors who received remuneration
includes one corporate auditor who resigned at the conclusion of the 23rd Ordinary General
Meeting of Shareholders held on June 29, 2021.

Cross-shareholdings

From the perspective of maintaining and strengthening stable
and long-term business relationships with our business partners,
we acquire and hold shares in such business partners as crossshareholdings when it is determined that it will contribute to theenhancement of our medium- to long-term corporate value.
Further, the Board of Directors confirms the necessity of suchholdings each year by examining the medium- to long-term
economic reasonableness and future prospects of each individualcross-shareholding, based on whether the purpose of holding
the shares is appropriate and whether the benefits and risks
associated with holding the shares are commensurate with thecapital costs.
We do not hold any investment securities where the purpose
is purely investment.

Risk Management
and ComplianceIndependent Directors, Corporate Auditors

Annual Remuneration of Board Members (FY2022)

Corporate Governance

Fixed compensation

Remuneration for directors was decided at the General
Meeting of Shareholders on June 29, 2022. After the meeting,there are nine directors (of whom three are independent
directors), for whose annual remuneration there is a maximumof 1.2 billion yen (of which 100 million yen is for independent
directors). Included in that is a maximum annual sum of 200
million yen (200 thousand shares) as transfer-restricted sharebased remuneration.
Remuneration for corporate auditors was decided at theGeneral Meeting of Shareholders on June 29, 2000. Since themeeting, there are four corporate auditors, for whose monthly
remuneration there is a maximum of 13 million yen.

Roundtable Discussion
by the Independent Directors

Composition of Compensation
Directors (excluding independent directors)

Annual Remuneration of Board Members

Our Directors and Corporate Auditors

In order to ensure the fairness, transparency and objectivityof decisions regarding the nomination of directors andexecutive officers and their compensation, the Nomination
and Compensation Advisory Committee was established on
March 31, 2021 as an advisory body to the Board of Directors,
consisting of a majority of independent directors and chaired byan independent director.
In the process for determining the compensation for directors,
the Committee deliberates and reports its findings to the Boardof Directors, which respects those findings. The decision is thenentrusted to the representative directors, within the scopedecided at the General Meeting of Shareholders and determinedby our company regulations.
The remuneration system for directors (excluding
independent directors) consists of fixed compensation, sharebased compensation and performance-based compensation,
while the remuneration system for the independent directors
consists solely of fixed compensation. The remuneration system
for auditors also consists solely of fixed compensation.
- Fixed compensation is set according to position.
- Performance-based compensation is calculated by multiplying
profit attributable to owners of parent company shares for the
fiscal year under review by 1% (up to 400 million yen) and acoefficient according to position.
- Share-based compensation is calculated according to position
and issued yearly in the form of share options with restrictions
on transfer. In principle, the restrictions on transfer are rescindedon the day the director retires.

109

ESG Initiatives That Support Creation of Corporate Value

Risk Management and Compliance
We manage risks based on our Basic Risk Management Policy with the aim to reduce management uncertainties andachieve management objectives.

Basic Risk Management and Compliance
Policies
GRI102-16

Basic Risk Management Policy and Regulations

In our Business Principles we declare “we will strive toanticipate the changing business environment to assess newopportunities for growth”. We consider risk management tobe fundamental for reducing management uncertainties andachieving management objectives. Based on our basic risk
management policy, we manage risks that make the achievementof management goals uncertain, such as social change, changes
in the global environment, natural disasters, accidents andscandals. In addition, we have established risk management
regulations toincorporate the risk management policy into specific risk
management activities. Our risk management regulations
include responses to emergencies.

Basic Risk Management Policy
 e prevent and reduce risks in order to ensure the quality andWsafety of our products and services, protect the lives and safety of
our employees and their families, and earn greater trust from ourstakeholders.
We create a system to appropriately manage a wide range of risks
associated with our business activities.
We promote risk management through a plan-do-check-act cycle.
 We quickly and appropriately deal with risks as they are identified.
In collaboration with group companies, we build a system for
immediately detecting new risks arising from changes in ourbusiness environment and for quickly and appropriately dealing
with risks at the group level.

Basic Compliance Policy

Under our Business Principles we pledge that we will act
in strict compliance with the law and in accordance with social
mores. Fully aware that compliance is the foundation of CSR
management, in March 2005 we published the Basic Compliance
Policy and simultaneously created compliance rules. We do
not limit our definition of compliance to legal compliance; ourdefinition includes compliance with the social mores from which
our laws originate, the mission and business principles of ourgroup, and internal regulations.

110

Basic Compliance Policy (Summary)C ompliance with our Mission, Business Principles and social norms
Maintaining internal systems and rules and ensuring broad-basedawareness of them
Cooperation with all group companies and promotion of
educational and enlightenment activities
Establishing appropriate responses and policies for when problems
occurTimely and appropriate disclosure and communication of necessary
information
Compliance with international standards and rules, and respect for
local cultures and customs
Rejection of illegal and unwarranted demands from antisocial
forces or organizations

Please see our website for more information
about risk management and compliance.
https://www.taiheiyo-cement.co.jp/english
Sustainability Corporate GovernanceRisk Management and Compliance

Risk Management and Compliance Promotion
SystemGRI102-17, 30, 31

Our president has ultimate responsibility for risk management
and compliance promotion. The officer in charge of both areas(officer in charge of the General Affairs Department) is appointed
by the president to preside over and run the Risk Management& Compliance Committee and systematically promote organizedactivities.
The committee plays a core role in our risk management
and compliance promotion for the entire group. It deploys
the policy, identifies, evaluates and specifies company-widerisks, implements risk management activities based on PDCA
cycles and promotes compliance. Moreover, it studies andproposes the creation and revision of rules for risk management
and compliance, and provides instructions for advancing theawareness and education of employees. Under the guidance of
this committee, each business site and group company have anofficer responsible for risk management and compliance, anda risk management and compliance promoter, who carry out
specific duties. We held four Risk Management & Compliance
Committee meetings in FY2022.

Relevant SDGs

Instruct

President

ReportCorporate Auditors

ReportOfficer in charge of General Affairs Department

Instruct

Results* of the Whistleblower Program (FY2022)
HotlineReports

Internal (CSR Group, General Affairs Department)

6

External (Kajitani Law Offices)1

Roundtable Discussion
by the Independent Directors* Cases that should be regarded as reports according to the Whistleblower Program
Regulations.
* Taiheiyo Cement Corporation and group companies subject to risk management by the
Risk Management & Compliance Committee are subject to aggregation.

Corporate Governance

Identify and evaluate risks

Report(Employees)

Officer in charge of General Affairs Department(Employees)

ReportOfficers responsible forrisk management andcompliance
Risk management andcompliance promoters

Report on status of risk countermeasures

Officers responsible for risk
management and compliance
Risk management andcompliance promoters(Whistleblower Program)Group companies(Whistleblower Program)

Headquarters, business sites(including research centers),
plants, branches

External hotline

Annual action plans for risk management

Internal hotline

Members: Managers at Headquarters and business sites

Secretariat:
General Affairs
Department

Protect

Chair: Officer in charge (of General Affairs Department)

Follow-up survey

Risk Management& Compliance Committee

Whistleblower

Evaluation system(Correction system)

DetectOfficer in charge: Officer in charge ofGeneral Affairs Department

Illegal actions

Ultimate responsibility: President

Whistleblower Program

Our Directors and Corporate Auditors

Risk Management and Compliance Promotion System

Risk management practices and education* Subject to risk management: 101 group companies (as of March 31, 2022)

Whistleblower Program

GRI102-11, 17, 201-2, 205-2

Identifying, Evaluating and Specifying Companywide Risks

In FY2020 we decided to identify the impact of anticipatedchanges in social and environmental conditions over the next ten
years on uncertainties in group management, and then formulate
measures to avoid and reduce those uncertainties. Such risks
were identified and evaluated accordingly.
For more information

Risks and Opportunities

Risk Management
and Compliance

Reports and requests are handled properly in accordance withnormal company procedures. We have also set up whistleblower
hotlines to receive reports directly without the need for the usualcompany procedures. Whistleblowers have the option of either
disclosing their identity, or reporting anonymously to mitigate
any potential psychological constraints. We have whistleblower
hotlines both internally (at the CSR Group of our General Affairs
Department) and externally (at a law firm). Our internal hotline isin a dedicated, locked room equipped with dedicated phone andfax lines, as well as a computer with a dedicated address, in orderto safeguard the privacy of those submitting reports. Our external
hotline is also available to all employees of group companies
in an effort to strengthen group governance, improve program
effectiveness and reduce the burden on individual companies. In
addition, we created the Whistleblower Program Regulations sowhistleblowers using the program are not subject to unfavorable
treatment.

Risk Management and Compliance Promotion
Activities

P.22

Measures to Reduce the Impact of Risks

Based on evaluations of identified company-wide risks, our
Risk Management & Compliance Committee takes the lead in
specifying those to be addressed every year and implementing
activities to reduce risk impact through PDCA cycles. The
challenges addressed in FY2022 were (1) the establishment of asystem to prevent scandals such as accounting irregularities, and(2) the revision of compliance-related rules.

111

ESG Initiatives That Support Creation of Corporate Value
Risk Management and Compliance

Examples of Overseas Risk Countermeasures

We have created and regularly revise the Riot/Terrorism
Response Manual. In addition, for countries deemed high-risk
to which our employees are dispatched, we clearly state theprocedure for deciding on local evacuations, have created atool for evaluating the emergency evacuation level according tochanges in local situations, and provide training using the tool.
We also list and secure supplies (food, clothes, hygiene supplies
and medicines), as well as cash and other resources needed in
the event of evacuation or an emergency at our overseas businesssites.

Emergency Task Force

If an event such as a disaster, accident or misconduct
has occurred, the affected business site informs the generalmanager of the General Affairs Department. The generalmanager considers the severity of the event and determines if an
emergency task force should be established or if the response to
the event can be delegated to the site management. Appropriate
action is then taken by the emergency task force or local
management.
14 such events were reported in FY2022. Important
information, including how the situation is handled, is reviewed
by the CSR Management Committee.
As preparation for responding to disasters and accidents, we
also conducted Shake Out earthquake drills that assumed a largescale earthquake at each business site. We also provided training
for plant staff so they would understand how to appropriately
communication in the event of an accident or incident.

COVID-19 Response

When COVID-19 began to spread in January 2020, weestablished the Emergency Task Force and Response Council
headed by the president, and have taken various measures forbusiness continuity while prioritizing the safety of customers,
business partners, local communities around business sites
and our employees and those of our group companies. As aresult, we were able to maintain a stable supply of cement andresource products essential for the maintenance and constructionof social infrastructure in FY2022 and were able to fulfill our
responsibilities as an essential industry.
In May 2022, at the two-year mark since the start of thepandemic, the Emergency Task Force and Response Council
reviewed the parent company’s initiatives. As a result, remote
working has been strongly promoted through various measuresand a certain level of effectiveness in preventing infection has
been confirmed. At the same time, work style reforms and flexible
work methods have become widespread, and the IT environment
to support such reforms has been improved. On the other hand,
the lack of opportunities for in-depth communication between
employees and on-the-job training among due to limited
opportunities for direct person-to-person contact also stood out.
We will continue to search for solutions to these issues andtake various measures to flexibly respond to government policies
and measures as well as the infection status to ensure thecontinuation of our group’s stable operation. We will continue
our response to COVID-19 in order to remain a corporate groupthat delivers safety and security to society as an essential industry.

Result of the Investigation into the Explosion at Saitama Plant
We apologize profoundly for the trouble and anxiety we caused to local residents, our customers, related companies, theauthorities concerned and many others due to the explosion that occurred on April 26, 2021 at the on-site power generation facility
installed at our Saitama Plant.
We established an accident investigation committee that included external experts in June 2021, which met a total of four times
to investigate the cause of the accident and to compile measures to prevent recurrence. The investigation report* was published on
our website on November 9, 2021.
The accident was found to have been a steam explosion caused by the rupture of an evaporator tube that had deteriorated
over time. The evaporator tube is located in a device called the fluidized-bed external heat exchanger, a component of thecirculating fluidized bed boiler which forms part of the power generation facility. Inspections of the power generation facility had
been conducted properly in accordance with laws and regulations since it started operation in 1996 but, since 2009, only visualinspections had been conducted so it was not possible to detect wear of the evaporator tube.
The lesson learned from this accident is the recognition once again that safety is the most important issue, and we will steadily
implement safety measures that are considered effective, not only at the Saitama Plant, but also for the power generation facilities
and other onsite facilities at our other plants, and we will do our utmost to restore confidence in the company.
* Explosion Investigation Report
For details, please refer to our press release "Fourth Report Regarding the Explosion at Our Saitama Plant" dated November 9, 2021 (in Japanese) and the documents attached to thepress release.
https://www.taiheiyo-cement.co.jp/news/2021.html

112

We provide risk management and compliance training for
managers and compliance officers at the company’s businesssites and group companies . In FY2022, we invited outside
lecturers to give talks to the managers at our group companies.
Training sessions included “Creating a Comfortable Workplacefor Both Men and Women” and “Review of Major ESG Issues(Company-wide Risks)” and were attended by managers from 74
companies. The training program was conducted via streaming
video due to COVID-19 measures.

Sustainability Corporate GovernanceRisk Management and Compliance
Risk Management and Compliance Promotion Activities

Legal Roundtables for Group Companies

Since FY2006 we have been holding roundtable discussions
attended by management and legal affairs representatives fromour group companies. These provide opportunities to share legal
information (mainly responses to revisions of laws) in order tofurther our understanding of major laws relating to corporate
management and to assist in the creation of our group’s
compliance regime.
The roundtables held in FY2022 are as listed in the tablebelow. We plan to hold them in an appropriate form again
in FY2023, based on the COVID-19 situation and otherconsiderations.

Attendance

31st

February/
March 2022
(Online)Theme

Directors' liability under
66 companies the Companies Act and127 participants amendments to theWhistleblower Protection Act

Information Security
System to Promote Information Security

To ensure and maintain the security of information assets,
we have established the Basic Information Security Policy andthe Information Security Management Regulations. Under the
management system in accordance with these regulations we are
actively working to maintain information security.
Our president has ultimate responsibility for information
security. The president appoints the officer in charge of
information security (officer in charge of the Corporate Planning
Department), who presides over and runs the Information
Security Committee in order to advance systematic, organizedactivities to promote information security.

Information Security Structure

CSR Management Committee(ultimate responsibility for information security: president)

Information Security Committee
Officer in charge of information security
Director of information security

Business sites

Group companies

Information management officer

Risk Management
and Compliance

Please see our website for more information
about our Standards of Conduct (Casebook).
(in Japanese)
https://www.taiheiyo-cement.co.jp/

Date

Corporate GovernanceIn order to fulfill our mission and uphold our businessprinciples, we formulated Standards of Conduct to guide all ourofficers and employees in the performance of their daily duties.
The standards consist of 35 items in 6 categories that draw upon
Taiheiyo Cement’s policies, regulations and president’s messages
delivered within and outside the company.
We have created and distributed to all our employees, aswell as all those of our main group companies, the Standards ofConduct (Casebook) which describes specific examples on how to
act in line with the Standards of Conduct. We regularly revise theStandards of Conduct (Casebook) to reflect the latest information.
In addition, for all company employees, including those on
loan to group companies, we conduct monthly quiz tests as partof e-learning programs to provide education on the Standardsof Conduct (Casebook) and other materials so they learn how
to act in individual situations. In FY2022, 87.8% of employees
participated in the program.

No.

Roundtable Discussion
by the Independent Directors

Compliance Training

Legal Roundtables for Group Companies (FY2022)

Our Directors and Corporate Auditors

Risk Management and Compliance Promotion Training(business site manager)

Information handling officer(operations department managers/selected individuals)

Please see our website for more information about our
Basic Information Security Policy and Privacy Policy.
https://www.taiheiyo-cement.co.jp/english
Sustainability Corporate Governance Information Security

113

ESG Initiatives That Support Creation of Corporate Value
Risk Management and Compliance

Activities to Promote Information Security

Tripartite Intellectual Property Action

In FY2022 we used a portal site on our intranet to remindand educate all employees, and increase awareness of
information security. We also hired outside experts to carry out
a vulnerability analysis to assess security risks from working
at home. The analysis report concluded that the risk is low. We
also held a gathering for the information departments of groupcompanies at which we promoted information security measures.
In addition, we conducted disaster recovery drills based on
hypothetical emergencies, and carried out a security level surveyof group companies and information security training designed
to enhance our security system. No serious incidents related to
information security occurred in FY2022.
We will continue our efforts to improve the security levels ofour domestic and overseas group companies.

Strategy for Researchand Development
Central ResearchLaboratory

Intellectual
property strategy
Cooperation

Intellectual
property
promoters

Intellectual
Property
Department

Information
Cooperation

tio

CooperationInfoBusiness divisionsrma

Cooperation
CooperationnBusiness
Strategies

Intellectual
property
promoters

Cooperation

G ro u p

co m p a nies

Protection and Use of Intellectual Property
Fundamental Intellectual Property Policy

Based on our policy of boosting the competitiveness andbrand value of the Taiheiyo Cement Group via business-oriented
intellectual property activities, we have identified three objectivesof building an inventory of intellectual property rights that
support our business, providing useful information throughintellectual property solution activities based on information
analysis, and strengthening the intellectual property capabilitiesof the entire group. We are promoting such activities tocontribute to the sustainable growth of the group.

System to Promote Intellectual Property Action

We have formulated and apply our Rules for HandlingIntellectual Property Rights and the Taiheiyo Cement GroupIntellectual Property Management Guidelines to ensure theappropriate management of intellectual property.
IP Promoters, who are responsible for activities incollaboration with the Intellectual Property Department, areassigned to business units and the Central Research Laboratory
to efficiently and effectively promote intellectual property rights
acquisition and IP landscape activities.
We have also established the Group Intellectual Property
Promotion Committee with our main group companies in orderto promote and invigorate the intellectual property activities ofeach group company by supporting their resolution of issues byanalyzing intellectual property information, in addition to regular
information sharing within the group.

Outline of Our Intellectual Property

As of the end of March 2022, the company owned 1,335
domestic and 261 overseas patents, 269 domestic and 146
overseas trademarks, and 7 domestic design rights.
While maintaining our performance in submitting patentapplications in the cement and concrete sector that contribute tonational resilience and innovative materials and future-oriented
technologies, the ratio concerning carbon neutrality has been
increasing.
As we proceed with the construction of robust patent clusters
by submitting applications and establishing rights to peripheral
and improved technologies, we comprehensively determine theimportance of inventions and the level of difficulty in detecting
infringement by other companies in order to decide whether or
not to conceal the know-how.

 umber of Newly Registered and Current DomesticN
Non-consolidated
Patent Rights

1,500
1,200

1,087

1,142

1,235

1,273

1,335

900
600
300
0

114

Newly registered patents
Patents we own(Patents)

124

140

160

158

136

2018

2019

2020

2021

2022

(FY)

Contributing
to the achievementof carbon neutrality
25%
Innovative materials
and future-oriented
technologies
17%

Contributing tonational resilience39%

Contributing torecycling-based society
19%

We are promoting education at each job level in cooperation
with related departments in order to make employees aware ofintellectual property and boost the group’s intellectual property
capabilities. We promote the development of the group's humanresources through in-house training and taking the national
Intellectual Property Management Skills Test.
Our in-house training program includes sessions for newly
hired employees, basic training for employees who have little
experience dealing with intellectual property, patent description
training for young inventors, and training for newly appointed
managers, each of which are held annually, as well as patent
research skills training which is held regularly. By making remoteparticipation in these in-house training courses possible, we have
had more participants than ever before from regional branches,
plants and group companies.
We are also incorporating training by external organizations
such as the Japan Intellectual Property Association, to ensurethat trainees acquire knowledge appropriate to their level andexpertise.

57

32

89

Patent Description Training

17

25

42

Patent Research Training

13

0

13

External Training

46

26

72

Total

133

83

216

Basic Training

Total

Education System for Intellectual Property
Skill
Level

Advanced Training
for Mid-Level EngineersIntellectual
Property
Management

Training for Newly
Appointed Managers

Practical
Application,
Application
Management

Basic Training for Mid-Level Engineers
Branch and Plant Training
Patent Description
Training
Patent ResearchTraining

Fundamental
Knowledge

In-house Training
External Training(Japan Intellectual
Property Association)

Basic Training
Sessions for newly
hired employees

0

3

5

10
Mid-Level Engineers

15

Years of
Experience

Leaders (approximate)

To boost awareness we have performance rewards forinventors and conduct Intellectual Property Awards for employees
who have created outstanding inventions or made otherachievements related to intellectual property rights. Paymentof performance rewards and the various intellectual property
activities are deliberated and decided by the Intellectual Property
Rights Management Committee (Chairperson: Director in chargeof the Intellectual Property Department).

Risk Management
and Compliance

Action to Boost Awareness of Intellectual Property

Group
companies

Corporate GovernanceTo ascertain recent developments and prevent infringementof other companies’ intellectual property rights, we periodically
circulate patent information, monitor obstructive patents andconduct various patent surveys. We also take appropriate risk
management measures by implementing countermeasuresaccording to the situation.
Regarding risk strategies for overseas intellectual property,
in addition to making sure that any differences in legal systems
from those in Japan and the practices concerning intellectual
property in other countries are well-known through regularintellectual property promotion committee meetings with ourbusiness divisions and group companies, we are also building a
support system that draws upon external country specific experts.
To date, we have never been sued for infringing intellectual
property rights, and therefore have not suffered any ensuingbusiness obstacles.

Taiheiyo
CementCorporation

Training Content

Roundtable Discussion
by the Independent Directors

Risk Management for Intellectual PropertyI n-house Attendance at Intellectual Property Training
Sessions (FY2022) (Unit: People)

Our Directors and Corporate Auditors

Patent Application Ratio by Technical Field (FY2022)

Patent description training held in an online hybrid format

115

Data

ESG Data
E

Environment

Scope
GCCA*1

Cement production (tonnes)
Cement production in Japan
Cement production overseas
GCCA
CO2 emissions (million tonnes/year)
Scope 1 Emissions
Net CO2 emissions
Scope 2 Emissions
Scope 3 Emissions
Category 1 (purchased goods and services)
Category 3 (fuel- and energy-related activities not included in Scope 1 and 2)
1
Reduction rate of specific net CO2 emissions (compared with FY2000) (%)
Reduction rate of specific CO2 emissions across the supply chain (compared with FY2000) (%)
Clinker/cement ratio (%)
GCCA
Total energy consumption for clinker production
Energy consumption (TJ)
Fossil energy
Alternative energy
Biomass Energy
Energy intensity (MJ/t-clinker)
Rate of alternative fuel use (%)
Alternative fuel rate (%)
Biomass fuel rate (%)
GCCA
Use of alternative raw materials
Alternative raw materials rate (%)
GCCA
Amount and intensity of waste and by-products used
Amount of waste and by-products used (tonnes)
Intensity of waste and by-products (kg/t-cement)
GCCA
Specific Emissions of Main Pollutants (g/t-clinker)
NOx
SOx
Dust
GCCA
Water use (1,000m³)
Total water withdrawal
Total water discharge
Total fresh water usedFresh Water Withdrawal per Unit of Production (m3/t-cementitious)
Non-consolidated
Volume of waste to landfill (t)Non-consolidated
Environmental conservation expenditure (million yen)
Environmental conservation investment
Business area costs
Details Pollution prevention
Global environmental conservation
Resource recycling
Upstream and downstream
Administrative
R&D
Social activity
Environmental remediation
Environmental conservation expenses
Business area costs
Details Pollution prevention
Global environmental conservation
Resource recycling

116

FY2020

FY2021

FY202232,351,093
19,333,769
13,017,324

32,041,021
19,095,708
12,945,313

25.0
22.8
0.896
−
−
−
8.3
−
82.8

24.0
21.8
0.855
1.769
0.752
1.017
8.3
9.0
82.4

23.7
21.6
0.983
1.639
0.635
1.004
8.3
9.6
83.0

92,897
79,791
11,433
1,647
3,298
14.1
12.3
1.8

89,402
76,693
10,938
1,770
3,321
14.2
12.2
2.0

88,41474,866
11,741
1,807
3,291
15.3
13.3
2.0

15.5

15.8

15.7

6,386,997
409.5

6,108,031
402.7

6,244,458
405.2

1,227
63
30

1,282
42
20

1,193
39
16

174,979
161,051
13,9330.817
13173,424
159,815
13,7450.832
27173,234
160,308
13,095
0.822
49

7,393
3,624
2,128
1,352
144
3,020
113
539
0
97
17,636
10,834
3,927
6,427
481

6,006
3,964
1,904
1,667
393
1,255
78
537
0
172
16,793
9,456
3,980
4,907
569

7,592
3,249
1,599
1,351
299
2,594
36
1,707
0
6
14,406
8,309
3,645
4,186
478

33,795,197
19,828,804
13,966,393

Upstream and downstream

Scope

Administrative costs

FY20205,741

149

R&D costs

Total R&D expenditure (million yen)

6,189

151

770

Social activity costs

Environmental remediation costs

FY202133

Non-consolidated

109

1,154

FY2022

4,991

12

867

949

87

117

28

43

1,246

1,402

1 CSR Objectives for 2025: Reduction of greenhouse gas emissions

S

SocialOccupational health and safety (incidents)
2
Fatalities
Lost-time injuries
Total number of work-related accidents
Absence rate (%)
Number of employees (consolidated)
Employees
Number of employees (excl. seconded employees, etc.)
Number of female employees
Ratio of female employees (%)
Ratio of women in management positions (%)
Average age (years)
Number of employees (Total)
Number of female employees
3
Ratio of female employees (%)
Ratio of women in management positions (%)
3
Ratio of women in new management positions (%)
Average years of service (overall) (years)
Average years of service - men (years)
Average years of service - women (years)
Number of graduates hired (non-area specific positions)
Number of females
3
Ratio of females (%)
Number of graduates hired (area specific positions)
Number of females
Number of mid-career hires
Number of females
Turnover rate within 3 years of employment (%)
Number of non-Japanese employees
Ratio of employees with disabilities (%)
Total annual hours worked (hours)
Overtime and holiday work (monthly average) (hours)
Ratio of annual paid leave taken (%)
Days of annual paid leave taken (days)
Ratio of male employees taking childcare leave or leave for childcare purposes (%)
Ratio of male employees taking childcare leave (%)
Average number of days of childcare leave taken by male employees (days)
Number of employees taking nursing care leave
Education and training expenditure per employee (yen)Average annual salary (yen)Ratio of women's wages to men's wages (%) All employees*4
Full-time employees (%)
Part-time and fixed-term employees (%)

ScopeGroup*2Group
Non-consolidated

FY2020
0
30
94
0.580
13,119
1,798
192
10.7
0.8
41.2
2,332
209
9.0
0.7
8.0
19.2
20.0
12.3
69
14
20.3
39
4
10
1
FY2018 recruits
16.0
6
2.30
1,909
17.3
79
15.0
91
29
5.5
0
74,796
7,363,166
64.3
64.4
67.7

FY2021
0
42
121
0.337
12,586FY2022
1
37
103
0.604
12,542

1,838
1,874
205
213
11.2
11.4
1.1
1.5
40.7
40.4
2,339
2,337
216
218
9.2
9.3
1.0
1.3
10.7
6.3
18.5
18.1
19.2
18.8
12.3
12.8
67
63
14
11
20.9
17.5
42
42
4
3
11
9
0
0
FY2019 recruits FY2019 recruits
7.6
8.3
7
8
2.50
2.55
1,921
1,911
17.5
17.9
75
73
14.2
13.9
79
91
19
18
7.1
18.4
1
2
33,893
41,974
7,280,071
7,298,681
65.6
67.2
65.9
67.4
60.6
61.9

117

Data
ESG Data

Scope

Support for Health MaintenanceNon-consolidated
Health examinations
Ratio of employees receiving periodic health examinations (%)
Ratio of employees receiving detailed examination after periodic health examinations (%)
Preventive measures against lifestyle-related diseases
Ratio of smokers among employees 40 years and older (%)
Ratio of employees 40 years and older that drink alcohol (occasionally or daily) (%)
Ratio of employees 40 years and older that exercise regularly (30 minutes or more of exercise) (%)
Ratio of employees 40 years and older that eat breakfast (%)
Ratio of employees receiving specific health guidance (%)
Walking event participation rate (%)
Ratio of employees with BMI greater than 25 (%)
Mental health support
Ratio of employees taking stress checks (%)
Ratio of employees with high stress (%)
Ratio of employees taking health literacy training (%)
Efforts to protect human rights
Non-consolidated
Number of reports to the internal harassment hotline
Sexual harassment (cases)
Power harassment (cases)
Other (cases)
Number of reports to the external harassment hotline
Sexual harassment (cases)
Power harassment (cases)
Other (cases)
Number of human rights slogan submissions (number)
IR Activities (cases)
Non-consolidated

FY2020

FY2021

FY2022

100
−

100
84.0

99.9
64.6

31.6
77.6
23.2
81.8
25.4
−
−

29.7
73.9
25.9
82.3
29.9
3.47
33.0

30.1
73.1
26.9
80.8
19.9
4.44
33.0

95.4
6.9
−

98.1
7.1
−

97.5
8.2
83.4

1
8
0

1
2
0

1
5
0

1
4
1
1,507
152

0
1
0
1,637
143

0
3
0
1,650
179

2 CSR Objectives for 2025: Disaster Prevention
3 CSR Objectives for 2025: Diversity

G Governance
Governance structure
Directors
Independent directors
Female directors
Ratio of female directors (%)
Corporate auditors
Independent corporate auditors
Female corporate auditors
Ratio of female corporate auditors (%)
Ratio of female board members (%)
Annual remuneration of board members (million yen)
Directors
Corporate auditors
Internal Carbon Pricing (yen/tonne-CO2)
Ratio of employees taking e-learning (%)
Number of reports to the internal whistleblowing hotline
Intellectual property (Number)
Number of new patent registrations in Japan
Number of patents held in Japan

Scope

Non-consolidated

Non-consolidated
Non-consolidated
Group*3
Non-consolidated

FY2020

FY2021

FY2022

14
2
1
7.1
4
2
1
25.0
11.1

7
2
1
14.3
4
2
1
25.0
18.2

9
3
1
11.1
4
2
1
25.0
15.4

853(18)
72(6)
−
73.3
3

552(15)
72(4)
−
77.4
7

512(9)
72(5)
1,500
87.8
7

160
1,235

158
1,273

136
1,335

*1 Subject of GCCA KPI data acquisition*2 Group companies that are business sites required to submit accident reports under the Taiheiyo Cement Group's Safety, Security and Health Management Regulations.
*3 Group companies subject to risk management by the Risk Management & Compliance Committee*4 Calculated based on the "Calculation Method of the Gender Pay Gap" in the "General Employer Action Plan (July 2022 Revision)" based on the Act for Promotion of Women’s Participation andAdvancement in the Workplace.

118

External Evaluation (as of September 2022)
CDP [Scored B for climate change, B- for water]

An international NGO headquartered in the
United Kingdom. The evaluation is based on
an 8-point scale from A to D- for the company's
initiatives and information disclosure in theenvironmental field, in the three areas ofclimate change, water resources and forest
protection.

DJSI [selected as a component stock in the Asia-Pacific region for theeighth consecutive year]

DJSI is an abbreviation of the Dow Jones Sustainability
Indices, a leading global ESG
investment indices developed by
Dow Jones (USA) and RobecoSAM(Switzerland).

DBJ environmental rating[highest rating for seven consecutive years]“Development Bank of Japan (DBJ) Environmental Rating"financing is the world's first financing system that uses a
screening system (rating system)
developed by the DBJ to score companies
on their level of environmentally-conscious
management and select those that excel.

“Kurumin” [Acquired "Kurumin" certification
for the third time in July 2021]

Certified as a "Child Rearing Support
Company" under the Law for Measures
to Support the Development of the Next
Generation.

JCR [Consecutive A rating since 2020]

The Japan Credit Rating Agency is one of Japan's leading
rating agencies that provides ratings for long-term and short-term
credit.

R&I [Consecutive A- rating since 2018]

Rating & Investment Information, Inc. is
one of the leading rating agencies in Japan,
focusing on major rating business.

Collaboration with Outside Organizations
Global Cement and Concrete Association (GCCA)

The organization was founded in 2018 and took over the activities of the Cement Subcommittee of the WBCSD in
January 2019. It is composed of approximately 40 of the world's major cement companies and covers 40% of the world's
cement production capacity (70% excluding China). Taiheiyo Cement is a founding member and the only Japanesemanufacturer to participate in its activities.

INNOVANDI (Global Cement and Concrete Research Network)

INNOVANDI is a research network launched by GCCA in 2020. It conducts research and development
such as sustainable concrete and cement and CO2 capture and recovery, and we have participated since its
inception.

UNGC (UN Global Compact)

An initiative proposed by the United Nations and signed by more than 17,500 companies and organizations in 160
countries at the time of 2021. It requires the top management to commit to 10 principles related to the protection ofhuman rights, elimination of unfair labor practices, environmental considerations and preventing corruption.

Industrial Federation for Human Rights, Tokyo

Established in November 1979, the federation now consists of 123 companies, most of which are headquartered in Tokyo. Under its
basic philosophy of voluntary management and full participation, the federation endeavors to resolve the “Dowa issue” (discrimination
against a caste-like minority of ethnic Japanese) and other human rights issues from a company perspective.

119

Data

Cement production process (material balance)
This is an overall picture (material balance) of the environmental impact of Taiheiyo Cement’s cement production on a non-consolidated
basis. Inputs are water resource consumption, energy consumption and raw material consumption at our quarries and plants, at thequarries of our subsidiary companies that supply raw materials to us, and affiliated companies that conduct power generation business,while outputs are the total amount of products by each business and their respective total emissions of substances.

INPUT
Water withdrawal
Total water withdrawal

Unit

FY2022

FY2021

190,882

167,314

191,429

Tap water

1,836

1,497

Industrial water

3,316

4,173

5,123

5,306

Ground water

11,125

12,350Rainwater

354

300

Seawater
EnergyCoal145,561

167,803

169,029

2,192,325

2,225,888

2,053,143

275,462

250,883

20,011

24,262

River water

Petroleum coke
Heavy oil
Diesel oil
Recycled fuels
Purchased electricity
Materials
Additives, etc.
Explosives
Refractory materials

1,000m

t
kl

3

1,495
3,335
5,491

11,190343

280,329

29,31819,80320,753

20,544t

690,075

1,096,581

MWh591,471551,542692,211

8,823

7,735

8,086

t

Grinding media/steel casings

3,996

3,818

14,671

9,017

992,170

3,720
8,743
2,539

3,174

2,453

Lubricants/Chemicals

kl

6,259

3,567

Other
Raw materials
Natural resourcest

33,93834,01036,88638,384,315

36,646,775

37,290,212

Limestone

36,550,209

34,940,122

Silica1,707,189

1,616,798

Gypsum119,361

77,888

Other

7,556

11,967

Waste and by-products

120

FY2020t

5,447,453

5,268,724

Iron waste

226,404

195,727

By-product gypsum

461,690

470,110

Fly ash, coal ash

2,090,550

2,125,467

Blast furnace slag

837,738

780,452

Other clay substitutes

1,831,071

1,696,968

5,893

35,693,961
1,487,742
99,0409,469

5,365,916
206,576
471,517

2,257,413
761,716

1,668,694

Scope of data: The data aggregated are for our four business segments (cement, mineral resources, environment and power generation) collected at our (non-consolidated) quarries and plants, atthe quarries shown below of subsidiaries that supply us with materials (nine quarries of eight companies) and at affiliated companies engaged in the power generation business (3 companies).
Ryushin Mining Co., Ltd.
Buko Mining Co., Ltd.
Chichibu Mining Co., Ltd.
Ishizaki Co., Ltd.

Ofunato Quarry(Iwate Prefecture)

Buko Quarry(Saitama Prefecture)
Mido Quarry(Saitama Prefecture)
Fujiwara Quarry(Mie Prefecture)

Products by Business
Power generation
Power generation
Mineral Resources
Aggregates
Limestone products

Oita Taiheiyo Mining
Corporation
Myojo Cement Co., Ltd.
Chichibu Taiheiyo
Cement Corporation

Unit
MWh

t

Other
CementPortland cement
Blended cement
Cement based soil stabilizers
Clinker (for export)
Environment
Flue-gas desulfurization
Fly-ash products

OUTPUT
CO2 Emissions
CO2

From purchased electricity
NOx Emissions

NOx*
SOx Emissions
SOx*
Dust emissions
Dust*
Dioxin Emissions
Dioxins*
Waste Emissions
Waste externally consigned for treatment
Waste sent to landfillstFresh water

Toumi Quarry(Niigata Prefecture)

Miwa Quarry(Saitama Prefecture)
Kanouyama Quarry(Gunma Prefecture)

FY2020Unit

Tosayama Taiheiyo
Mining Corporation
Ofunato Power Inc.
Tosa Power Inc.
Itoigawa Power Inc.

Tosayama Quarry(Kochi Prefecture)

Ofunato Power Plant(Iwate Prefecture)
Tosa Power Plant(Kochi Prefecture)

Itoigawa Power Plant(Niigata Prefecture)

FY2022

FY2021

1,903,870

2,396,837

2,319,721

8,413,475

7,827,271

7,989,127

1,988,852

4,663,324

336,086

359,604

297,941

12,852,306

12,029,436

12,461,884

2,139,201

1,741,877

581,192

529,085

1,890,704

2,288,118

2,061,621

122,718

104,585

130,627

216,204

156,627t

FY20204,802,545

1,736,653
493,464

121,412

FY2022

FY2021

14,325,999

13,052,744

14,269,840

204,611

189,608

231,694t

22,41324,02024,519

t

2,239

1,538

1,343

t

367

283

213

g-TEQ

0.15

0.24

0.24

483

632

634

13

27

5,563

6,701

6,773

158,102

181,846

184,214

145,561

167,934

12,274

13,621

267

292

t

t

Valuables such as scrap metals
Water Discharge
Wastewater
SeawaterShin-Tsukumi Quarry(Oita Prefecture)

1,000m3

Household wastewater49

169,193
12,504
2,517* Cement and power generation business only (excluding purchased electricity)

121

Data

Financial and Non-financial Highlight
Financial Data
Net Sales, Operating Income
and Operating Income on Net Sales

Total Assets, Ordinary Income and Return on Assets (ROA)Net Sales (billion yen)
Operating Income (billion yen)
Operating income on net sales (%)
9,160

8,711
651

8,843

660

Total assets (billion yen)
Ordinary income (billion yen)
Return on assets (ROA) (%)

8,639

610

636

7,082

643

643

11,03010,442

10,32910,344

10,201

657

605

501

467
7.5

2018

7.2

2019

2020

6.6

7.4

6.9

2021

2022

6.3

(FY)

Profit Attributable to Owners of Parent
and Return on Equity (ROE)

385

2019

5.9

2020

4.7

6.3

2021

(FY)

2022

Cash Flow

Proﬁt attributable to owners of parent (billion yen)
Return on equity (ROE) (%)
434

2018

6.3

Cash ﬂow from operating activities (billions of yen)
Cash ﬂow from investment activities (billions of yen)Free cash ﬂow (billions of yen)
110.4
107.6
97.2
90.9

468
391

59.2
39.2

289

71.1

62.5
25.3
-12.7

10.2

2018

10.7

2019

9.2

2020

10.3

2021

5.9
2022

-48.4
(FY)

Interest-bearing Debt and Net Debt/Equity Ratio (DER)

2018

-58.0

-65.5

2019

2020

-47.8
2021

Capital expenditure (billion yen)
Depreciation (billion yen)
776

0.6

2018

122

279.6

0.5

2019

266.1

0.5

2020

(FY)

Capital Expenditure and Depreciation

Interest-bearing debt (billions of yen)
Net debt/equity ratio (DER) (multiples)

288.6

-83.9
2022

248.1

0.4

2021

677

270.5

733
660

580

440

440

2018

2019

488

526

560

2021

2022

0.4

2022

(FY)

2020

(FY)

Non-financial Data
Prevention of Accidents

No. of Fatal Accidents

Lost-time Injury Frequency Rate(per million working hours) GCCA

0.87

2

1.01

1.16

1.27

1.33

2021

2022

1

2018

0

0

0

2019

2020

2021

0
2022

2026

(FY)

CSR Objectives* Taiheiyo Cement and group companies that are business sites required to submit accident
reports under our Safety, Security and Health Management Regulations are the subject ofaggregation.

2018

2019

2020

(FY)

Please see notes 1 and 6 on p128 for the scope of the aggregation.

Reduction of Greenhouse Gas Emissions
Reduction Rate of Specific Net CO2 Emissions (%) GCCA

Ratio of Alternative Raw Materials and Fuels (%) GCCA
Alternative raw materials
Alternative fuels

10.0
8.9
7.8

8.3

8.3

15.5

8.3

16.0

15.5

15.8

15.7
15.3

13.5

2018

2019

2020

2021

2022

2026

(FY)

2018

13.8

2019

14.1

14.2

2020

2021

2022

(FY)

CSR Objectives

Workplace Diversity
Number of Employees by Gender (%)(as of March 31, 2022) Non-consolidated

Ratio of Female to Male Employees (%)(as of March 31, 2022) Non-consolidated

Female: 218
9.3%
10.0
8.6

9.0

9.2

9.3

Total:

2,337

7.8

Male: 2,119
90.7%
2018

2019

2020

2021

2022

2026

(FY)

CSR Objectives

123

Data

Primary Consolidated Financial Data (12-Year)
FY2011FY2012FY2013

FY2014FY2015

Statement of Income (million yen)
Net sales
Operating Income
Ordinary income
Profit attributable to owners of parent

726,475
16,4337,412
4,450

727,849
29,185
18,496
7,845

747,616
40,65932,667
11,329840,288
70,43469,59035,223842,848
65,40667,89044,114

Financial Condition (million yen)
Net assets
Total assets
Interest-bearing debt

166,819998,741
566,171

196,144982,231510,184

219,826
982,473473,959

273,3121,015,564
435,118

347,490
1,040,602
399,138

Per Share Data* (yen)Book-value per share
Earnings per share

1,492.8
47.3

1,380.9
71.6

1,558.5
92.2

1,955.7286.7

2,463.1
359.1

Cash Flow (million yen)
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Cash and cash equivalents at end of fiscal year

36,995
14,177(100,480)
61,26536,624(17,252)(19,227)
59,78561,505(16,441)(51,792)
54,40888,558(27,926)(62,269)
55,60477,000(31,377)(52,713)50,645

2.3
0.7
3.0
14.1

4.0
1.9
5.1
17.3

5.4
3.3
6.3
19.5

8.4
7.0
16.3
23.7

7.8
6.6
16.3
29.1

32,42943,097
4,022

35,785
41,624
3,684

32,52439,422
3,846

39,09440,553
4,052

42,16042,401
4,422

Financial Indicators
Operating income on net sales
Return on assets (ROA) (ordinary income)Return on equity (ROE)
Equity ratio
Other (million yen)
Capital expenditure
Depreciation
R&D expenses* The Company, effective October 1, 2017, conducted a reverse stock split for its common stock at a ratio of one for 10.
Per share information are calculated assuming the share consolidation took place at the year to March 2011.

10 Mid-term Management Plan
Business Restructuring
Business Restructuring in Light of the
Abandonment of Quantitative Targets Listed in
the 10 Medium-Term Management Plan

Faced with a harsh business environment due toa far sharper decline in domestic cement demandthan had been anticipated, we decided to abandon
the quantitative target for the final year of the 10
Medium-Term Management Plan (which ended
in FY2011) and to implement business structuralreforms aimed at creating a “new Taiheiyo Cement.”

Main business restructuring measures, andconsequent improvement in incomeR eview and restructuring of our
16 billion
production system in Japanyen/year
improvement
Review of our organizational andpersonnel systems
Review of our domestic cement sales structure andstreamlining of logistics

124

14 Medium-Term Management Plan
FY2013-FY2015

Business Strategies
Fulfill our social mission

Make maximum contributions to projects related
to recovery from the Great East Japan Earthquake

Pursue our main businesses

Establish sustainability in the domestic cementbusiness and fulfill our responsibilities as part of asocial infrastructure industry

Expand our growth fields

Promote our materials business, and further
advance our overseas business expansion

FY2015 Results

Operating income on net sales: 7.8%
ROA (ordinary income): 6.6%
Net DER: 1.1

FY2016

FY2017FY2018FY2019FY2020

FY2021

FY2022

835,359
60,43360,22536,404

798,588
63,23559,80247,597871,113
65,12964,36638,525916,071
66,01264,30643,452

884,350
61,00860,541
39,151

863,90363,61065,74446,800708,201
46,70150,193
28,971

357,073
1,014,075
394,497

400,034
1,015,415
340,930

432,326
1,020,111
288,606

450,645
1,034,428
279,615473,241
1,032,923
266,115

506,8211,044,227
248,102544,799
1,103,007
270,587

2,591.1
296.3

2,930.2
383.9

3,193.7
311.4

3,388.4
351.7

3,567.6
319.9

3,971.3
387.8

4,362.2
245.8

75,627(71,099)(4,027)50,072

94,433(10,394)(81,855)
51,974

107,683(48,460)(65,818)
44,976

97,283(58,025)(33,753)
50,08490,902(65,534)(29,436)
45,748110,403(47,809)(43,952)
63,81971,191(83,919)(3,742)50,213

7.2
5.9
11.7
31.4

7.9
5.9
14.0
35.6

7.5
6.3
10.2
38.7

7.2
6.3
10.7
40.1

6.9
5.9
9.2
42.3

7.4
6.3
10.3
45.1

6.6
4.7
5.9
46.3

44,076
43,9574,228

54,38444,4594,538

58,08744,003
4,452

67,79644,008
4,311

77,677
48,863
4,431

66,003
52,683
4,606

73,37356,0105,284

17 Medium-Term Management Plan

20 Medium-Term Management Plan

Business Strategies

Business Strategies

FY2016-FY2018

Enhance existing businesses, and formulate
and implement growth strategies
Strengthen management foundations
Provide support for national projects
Enhance research and development

FY2018 Results

Operating income on net sales: 7.5%
ROA (ordinary income): 6.3%
Net DER: 0.6

FY2019-FY2021

Strengthen the earnings capacity of existing
businesses
Formulate and implement growth strategies
Provide support for national projects

23 Medium-Term
Management Plan
FY2022-FY2023

FY2021 Results

Operating income on net sales: 7.4%
ROA (ordinary income): 6.3%
Net DER: 0.4

125

Data

Financial Statements
Consolidated Balance Sheets(Unit: million yen)

Item

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

Notes, accounts receivable and contract assets
Electronically recorded monetary claims - operating
Merchandise and finished goods
Work in process
Raw materials and supplies
Short-term loans receivable
Other
Allowance for doubtful accounts
Total current assets

Non-current assets
Property, plants and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures (net)
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles (net)Land
Leased assets
Accumulated depreciation
Leased assets (net)
Construction in progress
Other
Accumulated depreciation
Other (net)Total property, plants and equipment

126(Unit: million yen)

End of FY2021 End of FY2022

Item(As of March 31, 2021) (As of March 31, 2022)

End of FY2021 End of FY2022(As of March 31, 2021) (As of March 31, 2022)

Liabilities
73,074
142,515

60,271−−
19,23429,421
2,079
43,873
2,557
15,373(795)

143,178
23,35434,4091,277
58,502
1,921
17,942(307)

327,333

340,550

491,247(352,836)
138,410913,284(759,076)
154,207
164,193
51,601(31,201)
20,40037,186
68,239(42,294)
25,944

540,342515,145(361,439)
153,705
968,234(797,800)
170,433
156,031
39,955(20,891)
19,06432,67665,708(39,790)
25,917557,829

Intangible assets
Goodwill
Other

159
28,03380
27,485

Total intangible assets

28,192

27,566

Investments and other assets
Investment securities
Long-term loans receivable
Retirement benefit assets
Deferred tax assets
Other
Allowance for doubtful accounts

91,926
1,538
23,0999,635
28,296(6,137)

118,359
1,391
22,68011,081
25,431(1,883)

Total investments and other assets

148,358

Total non-current assets
Total assets

Current liabilities

Notes and accounts payable - trade73,596

79,685

Short-term borrowings

103,538

102,986

Current portion of bonds

10,000

Provision for bonuses

6,265Electronically recorded obligations - operating

Commercial papers

Income taxes payable
Other provisions

7,744

−

8,751

21,000

−

4,590

4,198

404

213

6,246

Other

98,691

86,685

Total current liabilities

304,831309,768

Bonds payable

50,00060,000

Deferred tax liabilities

8,130

10,020Non-current liabilities
Long-term borrowings

84,563Retirement benefit liabilities

24,703

Provision for special repairs

180

Provision for retirement benefits for directors

503

86,60022,701
512
258

−

3,330

Lease obligations

14,352

13,481

Other

41,80742,352

Total non-current liabilities

232,574

248,440

Total liabilities

537,405558,208

Share capital

86,174

86,174Retained earnings

365,593384,154

Total shareholders' equity

485,946506,291

Valuation difference on available-for-sale securities

12,42911,737

Revaluation reserve for land

4,898

4,897

Provision for product compensation
Other provisions

Asset retirement obligations

511

7,821

478

8,703

Net assets

Shareholders’ equity
Capital surplus

Treasury shares

Accumulated other comprehensive income
Deferred gains or losses on hedges

60,292(26,113)

1

49,729(13,766)

6

Foreign currency translation adjustment(29,917)(11,322)

Total accumulated other comprehensive income(15,025)

4,325

177,061

Non-controlling interests

35,89934,181

716,893

762,457

Total net assets

506,821544,799

1,044,227

1,103,007

1,044,227

1,103,007Remeasurements of defined benefit plans

Total liabilities and net assets(2,438)(992)

Consolidated Statements of Income andConsolidated Statements of Comprehensive Income

Consolidated Statements of Cash Flows(Unit: million yen)Item

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Amortization of goodwill
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rental income from real estate
Share of profit of entities accounted forusing equity method
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on disposal of non-current assets
Gain on sales of investment securities
Other
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Loss on sales of investment securities
Loss on valuation of investment securities
Impairment loss
Loss on temporary suspension of operations
Product compensation expense
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income ofentities accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable tonon-controlling interests

FY2021

FY2022

April 1, 2020
from April 1, 2021
(tofromMarch
31, 2021) (to March 31, 2022)

863,903
672,631
191,272

708,201
532,818
175,38253
127,608
127,661
63,61054
128,626
128,681
46,701

601
1,273
107

551
1,641
90

1,879
1,042
3,524
8,428

1,913

453
3,660
8,311

3,498
2,797
6,295
65,744

2,195
2,623
4,819
50,193

3,247
3,567
411
7,226

6,386
615
1,051
8,054

5,494
61
47
969
547
−
744
7,865
65,105
9,170
6,285
15,45549,6492,848
46,80049,649

7,301
428
20
2,407
277
3,506
1,485
15,42642,820
11,542
227
11,76931,051
2,079
28,971
31,0515,516
1(9,345)
7,463

(544)
5
18,596
1,447

201

2,559

3,837
53,48722,063
53,11551,561

48,324

1,925

4,790

(Unit: million yen)

Item

Cash flows from operating activities
Profit before income taxes
depreciation
Amortization of goodwill
Share of loss (profit) of entities
accounted for using equity method
Loss (gain) on valuation of investment securities
Decrease (increase) in net retirement
benefit asset and liability
Increase (decrease) in provision for
retirement benefits for directors
Increase (decrease) in provision for bonuses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in other provisions
Interest and dividend income
Interest expenses
Loss (gain) on sales of investment securities
Loss (gain) on disposal of non-current assets
Impairment loss
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Cash flows from operating activities
Cash flows from investing activities
Decrease (increase) in time deposits
Purchase of non-current assets
Proceeds from sales of non-current assets
Purchase of other depreciated assets
Proceeds from sales of other depreciated assets
Purchase of investment securities
Proceeds from sales and redemption of
investment securities
Proceeds from sales of shares of subsidiaries
resulting in change in scope of consolidation
Loan advances
Collection of loans receivable
Other
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Increase (decrease) in commercial papers
Proceeds from long-term borrowings
Repayments of long-term borrowings
Proceeds from issuance of bonds
Redemption of bonds
Purchase of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Other
Cash flows from financing activities
Effect of exchange rate change on cash
and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

FY2021

FY2022

April 1, 2020
from April 1, 2021
(tofromMarch
31, 2021) (to March 31, 2022)

65,10552,68353(1,879)47

42,82056,01054(1,913)

20

(905)

(302)

(17)

8

107
(74)
0
(1,874)
3,498(3,505)
2,246
969
8,418
(122)
(6,568)3,866
122,048
2,455(3,521)(10,579)
110,403(19)(4,129)3,185(2,193)
2,195
(187)
914
2,407
(1,904)(15,714)
5,679(4,162)
82,7692,807(2,199)(12,186)
71,191(3,675)(58,656)
4,187
(167)
38
(117)

182
(67,326)
6,458
(440)
2
(24,123)

709
6,318

1,010

10

(2,723)
3,302
2,974(47,809)(2,150)2,458(2)(83,919)(19,596)(12,000)
21,179(36,573)
30,000−(10,064)(7,292)(873)(8,731)(43,952)(5,936)21,00040,743(34,035)
10,000(10,000)(5,036)(7,648)(1,404)(11,423)(3,742)

(569)

2,864

18,07145,74863,819(13,606)
63,81950,213127

Data

GCCA Key Performance Indicators
GRI301-2, 302-1, 3, 303-1, 305-4, 5, 7, 403-2, 9, MM2

The Taiheiyo Cement Group's performance with regard to CO2 and climate protection, emissions monitoring and reporting,health and safety, and water has been subjected to independent limited assurance by KPMG AZSA Sustainability Co., Ltd.

FY2022 Key Performance Indicators (KPI)*1

CO2 and Climate Protection (CO2 emissions, energy consumption)
Number of facilities using the GCCA “The Cement CO2 and Energy Protocol” guidelines for emissions inventory
Ratio of facilities using the GCCA “The Cement CO2 and Energy Protocol” guidelines for emissions inventory (%)
Scope 1 emissions*2
Total CO2 emissions (million tonnes/year)
Gross emissions*3
Net emissions*4
Gross emissions
5
CO2 emissions per tonne of cementitious product* (kg-CO2/t-cementitious)
Specific net emissions
Emissions from electricity purchased (million tonnes/year) (Scope 2 emissions)Indirect emissions other than Scope 1 and 2 (emissions of other companies related to the activities of the calculation entity) (million tonnes/year) (Scope 3 emissions)Category 1 (purchased goods and services)*6
Category 3 (fuel- and energy-related activities not included in Scope 1 and 2)*7
Specific calorific value for clinker production (MJ/t-clinker)
Alternative fuel rate: Ratio of alternative fuels used by kilns (% of thermal energy consumption)
Biomass fuel rate: Ratio of biomass fuel used by kilns (% of thermal energy consumption)
Clinker/cement (equivalent) factor: Ratio of the total clinker consumption and cement produced, calculated according to the GCCA Cement CO2 and Energy Protocol guidelines

FY2020
18
100
25.0
23.7
22.8
701
675
0.896
−
−
−
3,298
12.3
1.8
82.8

FY2021
17
100
24.0
22.7
21.8
701
675
0.855
1.769
0.752
1.017
3,321
12.2
2.0
82.4

FY2022
17
100
23.7
22.5
21.6
703
675
0.983
1.639
0.635*8
1.004*8
3,291
13.3
2.0
83.0

Use of Alternative Raw Materials
Alternative raw materials rate: Consumption of alternative raw materials, as a percentage of total raw materials for cement and clinker production (%, calculated on a dry weight basis)

FY202015.5

FY2021
15.8

FY2022
15.7

Health and Safety*9
Fatalities
Number of fatalities for directly employed personnel
Fatality rate per 10,000 directly employed personnel
Number of fatalities for indirectly employed personnel (contractors and subcontractors)
Number of fatalities involving third parties (not employed)
Lost-time injuries
Number of lost-time injuries for directly employed personnel
Injury frequency rate of directly employed personnel (per million working hours)
Number of lost-time injuries for indirectly employed personnel (contractors and subcontractors)

FY2020

FY2021

FY2022

0
0
1
0

0
0
0
0

0
0
0
0

9
1.16
7

15
1.27
18

15
1.33
19

Emission Monitoring and Reporting
Percentage of clinker produced by kilns covered by a monitoring system, either continuous or discontinuous, for the main and other pollutants
NOx
Percentage of clinker produced by kilns
SOxwhich have adopted continuous measurement for the main pollutants
Dust
NOx
Total emissions (tonnes/year)
SOx
Dust
NOx
Specific emissions (g/t-clinker)
SOx
Dust

FY2020
100
100
84.0
100
34,565
1,778
839
1,227
63
30

FY2021
100
100
83.3
100
34,758
1,139
544
1,282
42
20

FY2022
100
100
82.4
100
32,049
1,047
431
1,193
39
16

Community Impact
Percentage of sites with community engagement plans in place
Percentage of active sites with appropriate quarry rehabilitation plans in place
Number of active sites where biodiversity issues are addressed

FY2020100
100
17

FY2021
100
100
17

FY2022100
100
17

FY202027,607
147,372
13,674
147,377

FY2021
27,192
146,232
13,447
146,368

FY2022
26,341
146,894
13,246
147,062

Water
Withdrawal (thousand m3)
Discharge (thousand m3)

Fresh water
SeawaterFresh water
Seawater*1 The KPI report for FY2022 is in accordance with “GCCA Sustainability Guidelines for the monitoring and reporting of CO2 emissions from cement manufacturing Ver. 0.1”, “GCCA Sustainability
Guidelines for the monitoring and reporting of safety in cement manufacturing Ver. 1.0”, “GCCA Sustainability Guidelines for the monitoring and reporting of emissions from cement manufacturing
Ver. 0.1” and “GCCA Sustainability Guidelines for the monitoring and reporting of water in cement manufacturing Ver. 0.1”. With regard to CO2 and climate protection, emissions monitoring andreporting, and water, we have aggregated data from cement plants and quarries belonging to Taiheiyo Cement and our subsidiaries. With regard to health and safety, we have aggregated data from
Taiheiyo Cement, the cement businesses of our 63 subsidiaries and affiliated companies, and the construction materials, aggregates and ready-mixed concrete businesses of those amongst our
55 subsidiaries and affiliated companies that are considered to be business sites required to submit accident reports under our health and safety management regulations. For Scope 3, we refer tothe “Emissions Unit Values for Accounting of Greenhouse Gas Emissions, etc., by Organizations Throughout the Supply Chain (Ver. 3.2)”, Ministry of the Environment (FY2021 and FY2022) and “For
Calculating Supply Chain Greenhouse Gas Emissions (FY2021: IDEAv2, FY2022: IDEAv3.2)”.
*2 CO2 emissions that are not included in the items for disclosure mandated by the GCCA but are derived from raw materials and fuels in the cement manufacturing process (including from on-site power
generation) and fall under Scope 1.
*3 CO2 emissions derived from raw materials and fuels in the cement manufacturing process (excluding CO2 emissions generated from on-site power generation).
*4 CO2 emissions derived from raw materials and fuels in the cement manufacturing process (excluding CO2 emissions generated from alternative fuels and on-site power generation).
*5 Cementitious product: Sum total of clinker and admixtures*6 Calculated by multiplying the input volume (physical data) of raw materials purchased by the business site subject to the data collection of environmental performance in the GCCA KPI (hereinafterreferred to as “business site”) from outside the business site by the emission intensity of each raw material.
*7 Calculated by multiplying the amount of electricity, fuel, etc. procured by the business site by each specific emissions unit.
*8 The impact on total emissions by the IDEA version change is negligible.
*9 Since the aggregation range of “GCCA Sustainability Guidelines for the monitoring and reporting of safety in cement manufacturing Ver.1.0” has been expanded to include companies that
manufacture cement-related products, as of FY2021 the Taiheiyo Cement Group includes in our aggregation subsidiaries and subsidiaries and affiliated companies that are also considered to bebusiness sites required to submit accident reports under our health and safety management regulations.

128

Independent Assurance Report on GCCA Key Performance Indicators
GRI102-56

Independent Assurance Report
To the President and Representative Director of Taiheiyo Cement Corporation
We were engaged by Taiheiyo Cement Corporation (the “Company”) to undertake a limited assurance engagement of theenvironmental and social performance indicators (the “Indicators”) included under the following headings in the GCCA Key
Performance Indicators section of its Taiheiyo Cement Report 2022 (the “Report”) for the fiscal year ended March 31, 2022.
• CO2 and climate protection (CO2 emissions, energy consumption) 1• Health and safety 2• Emission monitoring and reporting 1• Water 1
12

Periodic accounting is based on the fiscal year 2021 for domestic plants and the calendar year 2021 for overseas plants.
Periodic accounting is based on the calendar year 2021 for domestic and overseas plants.

The Company’s Responsibility

The Company is responsible for the preparation of the Indicators in accordance with its own reporting criteria (the “Company’s
reporting criteria”), as described in the Report.

Our Responsibility

Our responsibility is to express a limited assurance conclusion on the Indicators based on the procedures we have performed. We
conducted our engagement in accordance with the ‘International Standard on Assurance Engagements (ISAE) 3000, Assurance
Engagements other than Audits or Reviews of Historical Financial Information’ and the ‘ISAE 3410, Assurance Engagementson Greenhouse Gas Statements’ issued by the International Auditing and Assurance Standards Board. The limited assurance
engagement consisted of making inquiries, primarily of persons responsible for the preparation of information presented in theReport, and applying analytical and other procedures, and the procedures performed vary in nature from, and are less in extent
than for, a reasonable assurance engagement. The level of assurance provided is thus not as high as that provided by a reasonableassurance engagement. Our assurance procedures included:•	Interviewing the Company’s responsible personnel to obtain an understanding of its policy for preparing the Report andreviewing the Company’s reporting criteria.
• Inquiring about the design of the systems and methods used to collect and process the Indicators.
• Performing analytical procedures on the Indicators.
•	Examining, on a test basis, evidence supporting the generation, aggregation and reporting of the Indicators in conformity with
the Company’s reporting criteria, and recalculating the Indicators.
•	Visiting the following six plants out of a total of 17 plants of the Taiheiyo Cement Group, selected on the basis of a risk analysis.
(Scopes 1 and 2 CO2 emissions covered by these six plants correspond to 30% * of the combined total of the Group’s Scopes 1
and 2 CO2 emissions.)* Based on the amount of absolute gross CO2 for the fiscal year 2021 for domestic plants and the calendar year 2021 for overseas plants.

Overseas plants- CalPortland Company: Rillito Cement Plant, Mojave
Cement Plant and Oro Grande Cement Plant• Evaluating the overall presentation of the Indicators.

Domestic plants- Taiheiyo Cement Corporation: Kumagaya Plant andSaitama Plant- Tsuruga Cement Co., Ltd.

Conclusion

Based on the procedures performed, as described above, nothing has come to our attention that causes us to believe that the
Indicators in the Report are not prepared, in all material respects, in accordance with the Company’s reporting criteria as described in
the Report.

Our Independence and Quality Control

We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for
Accountants, which includes independence and other requirements founded on fundamental principles of integrity, objectivity,
professional competence and due care, confidentiality and professional behavior. In accordance with International Standard on
Quality Control 1, we maintain a comprehensive system of quality control including documented policies and procedures regarding
compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
/s/ Kazuhiko Saito
Kazuhiko Saito, Partner, Representative Director
KPMG AZSA Sustainability Co., Ltd.
Tokyo, Japan
December 16, 2022
This is a copy of the Independent Assurance Report and the original copies are kept separately by the Company and KPMG AZSA Sustainability Co., Ltd.

129

Data

GlossaryACD

AFR Burner

Cap-and-trade emissions trading system

Dark web analysis

Equipment that supplies alternative energy suchas waste plastic from the kiln’s burner. A dedicatedport is usually installed on the main burner.

Aggregate classification plant

Equipment that is used to control the finenessof aggregate within a specified range, which
contributes to the production of concrete ofconsistent quality.

Aggregate yard

A yard for storing aggregates.

Agitator truck

A truck that transports ready-mixed concrete ina rotating cylindrical container which agitates
the concrete during transportation. It is also
sometimes called a cement truck or concrete mixer
truck.

Alkali-silica reaction (ASR)

A phenomenon of concrete deterioration, in
which cracks are observed as a result of volume
expansion caused by the reaction of certain silica
minerals with alkaline elements such as sodium
and potassium in the concrete.

Anti-washout underwater concrete additive
An additive that increases viscosity and adhesionof ready-mixed concrete to reduce the separationof the cement and other ingredients when the
fresh concrete is poured directly into water,
resulting in superior quality concrete.

Autoclaved lightweight concrete (ALC)

Concrete which contains many air bubbles thatis made from silica, cement, quicklime andaluminum, and cured under high temperatureand pressure conditions. Also called ALC, its uses
include the exterior walls of buildings due toits superior fire resistance and heat insulation
properties.

B
Bag filter

Equipment that is used to filter dust that iscontained in an air stream. Cloth is usually used
for the filter material. When applied to a cement
kiln, the amount of dust in the exhaust gas can be
reduced to extremely low levels, contributing to a
reduction in environmental impact.

Bargaining power

The relative negation strengths of two or moreparties.

130

A system that is a policy tool designed toincentivize emissions reductions, such as for CO2,
where an emission limit is set and a quantity ofemissions allowances are issued consistent withthat cap. Business sites must hold allowances
sufficient for their emissions and may buy or sellemission allowances depending on if they either
exceed the cap or reduce their emissions to below
the cap.

CCS (Carbon dioxide capture and storage)

An analysis to determine if personal information
has been leaked to the dark web and prevent
illegal trading of personal information.

E
Emissions inventory

A list that displays to what extent a specificsubstance has been emitted and from whichsource during a specific period of time.

A generic term for technology that separates,
captures and stores CO2, especially underground.

F

CCUS (Carbon dioxide capture, utilizationand storage)

Fly ashA generic term for technology that captures CO2
and either utilizes it or srtores it pemanently.

Cement based soil stabilizer

A cement-based ground improvement material
containing several active ingredients used toprovide long-term, stable strength enhancement
to a wide range of soil types.

Cement calcination

This refers to the calcination of cement raw
materials to produce clinker which is then groundwith a predetermined amount of gypsum.

Clinker

An intermediate, nodular cement productproduced when the raw materials for cement,
namely limestone, clay, silica, and iron waste, arefired in a kiln.

Clinker cooler

Equipment that rapidly cools high-temperatureclinker that has been fired in a cement kiln, using
air supplied from a cooling fan. Heat is captured
from the clinker and the high-temperature air
is used for clinker firing, contributing to energy
conservation.

CO2 sequestration technology

Technology for the effective utilization of CO2
by converting the captured CO2 to a carbonate
in order to prevent it being released into theatmosphere.

CO2-cured cement

Ordinary cement cures when mixed with water,
but CO2-cured cement cures by absorbing CO2.

Concrete sludge

Sludge consisting of wash water from mixer
equipment and agitator trucks at ready-mixed
concrete plants, and from residual concrete fromready-mixed concrete pouring sites, unused readymixed concrete, etc.

Ash derived from coal which is generated froma coal-fired thermal power plant. It is usually
collected from the exhaust gas airstream by anelectrostatic precipitator.

Functional hollow particles

Minute, lightweight ceramic spheres with anaverage particle size of 10 micrometers or less,which provide weight reduction and thermal
insulation/shielding properties for use in coating
materials for home appliances, electronic
components, resin products etc.

G
Global Cement and Concrete Association(GCCA)The members of the GCCA cover 40% of theworld's production capacity, including theEuropean majors.

H
Heavy metal immobilizer

A material for mixing into soil that enables thesafer treatment of construction soil by inhibiting
the leaching of heavy metals that are specified in
the Soil Contamination Countermeasures Act.

Hexavalent selenium

One of the ions of the element selenium.
Hexavalent selenium is soluble in water as
selenate ions and is carried in surface andgroundwater.

Hydrated raw material mixing system

A device that is used to uniformly mix powdered
and granular materials that partially containwater, with a mixing impeller that is designed toeffectively apply shear to the mixture.

I
Innovandi

A worldwide research and development network
developed by the GCCA.

Input system for anti-washout underwater
concrete additive
A device capable of semi-automatic production
and input of anti-washout underwater concrete
additive slurry, with automatic and accurate
metering of the water and plasticizer used forslurrying.

Interlocking pavement blocks

Interlocking blocks for the paving of areasthat vehicles drive over. The shape and otherspecifications have been standardized nationwide,
making it easier to obtain materials when
conducting repairs.

K
Kiln burner

A burner that generates thermal energy for firing
cement raw materials in a kiln. A pulverized coalburner is normally used.

Portland cement

Cement is a gray powder that is one of thematerials used to make concrete. Currently,
cement can be broadly divided into three
categories: Portland cement, blended cement
and specialty cement. Portland cement is the typewhich is seen most often.

Precasting

A process used to manufacture concrete products
and elements, such as columns, beams and slabs,
at a factory and assembled at the construction
site to effectively shorten the construction
period and achieve higher quality. Often used
for the construction of high-rise buildings andcondominiums.

Q
Quarry face

The location where quarrying is conducted, usuallywith the use of explosives.

R
Ready-mixed concrete sludge

Shipping Yard

A yard for shipping and/or loading aggregates.

Slag

A by-product of the iron and steel making process.

Slag substitution

The replacement of blast furnace slag, which
is sometimes used as a concrete admixture
to improve durability, etc., with an alternative
material that exhibits similar characteristics, suchas coal ash or natural pozzolans.

SludgeA mixture of dirt and liquid. In particular, concretesludge is generated during the production andpouring of ready-mixed concrete.

Suspension preheater

One of the main pieces of equipment in cement
production and consisting of four or five cascade
cyclones used in the stage before the raw materials
enter the kiln. The raw materials for cement areheated in the preheater using combustion gas
from the kiln, causing a calcination reaction in thelimestone.

It is the same as concrete sludge.

T

Resource-recycling calcium carbonate
concrete

TapperKiln operation

Completely recycled concrete that is cured andformed by re-crystallizing calcium carbonate froma calcium bicarbonate solution produced from
calcium carbonate. Research and development for
its industrialization is currently in progress.

L

Rutting

Thermal energy consumption of clinker
production

Kiln control

The act of finely adjusting the feed rate of
raw materials, kiln speed, kiln temperature,temperature distribution, etc. in an operating kiln.
The series of operations in which the kiln is
operated and the cement material is fired.

The property that indicates the characteristic oftransferring load at the joints of blocks in concrete
pavements made from multiple blocks.

A continuous indentation that extends along aroad at the point where the wheels of vehicles
travel on it, which especially occurs in asphalt
pavement. It is more likely to occur on roads witha lot of heavy vehicle traffic.

N

S

NETIS

Scope 3 Guidelines

Load transferability

The New Technology Information System operated
by the Ministry of Land, Infrastructure, Transport
and Tourism.

NSP kiln

An NSP (New Suspension Preheater) kiln is acement firing kiln which boasts excellent thermal
efficiency and is equipped with a preheater
consisting of a cyclone cascade and a combustion
furnace called a calciner.

P
Pilot plant

A pre-commercial demonstration facility
employing new technologies or processes, often
at a reduced scale.

A document that explains a method of calculating
CO2 emissions in the supply chain.

Scope Emissions

The classification of CO2 emitted by businesses;
Scope 1 refers to direct emissions from fuelcombustion, Scope 2 refers to indirect emissions
from purchased electricity and heat, and Scope
3 refers to emissions in the supply chain
associated with the procurement of raw materials,
transportation and use of the product.

Percussion diagnosis is a method of concrete
diagnosis using a small hammer. The tapper isa type of hammer powered by an electric motorthat can perform continuous diagnosis, and its
applications include automatic measurement bypercussion diagnosis.

The thermal energy per tonne of clinker required
to fire clinker in a kiln, which is an indicator of acement plant’s thermal efficiency. A smaller value
indicates higher energy conservation performance.

Total basin risk score

An assessment indicator of water risk; the WWF's
Water Risk Filter and the WRI's Aqueduct are
standardly used.

U
Unconscious bias

A biased view of a subject that is held
unconsciously, which is also called unconscious
prejudice.

Shake Out drill

An earthquake practice drill that is designed for
employees to cultivate the ability to spontaneously
protect themselves in the event of an earthquakeat their current location.

131

Data

Corporate Information
Company Outline (as of March 31, 2022)

Website Information

Company
name

TAIHEIYO CEMENT CORPORATIONHome pagehttps://www.taiheiyo-cement.co.jp/english

EstablishedMay 3, 1881

Capital86,174,248,572 yen

About usHeadquarters

BUNKYO GARDEN GATE TOWER, 1-1-1, Koishikawa,
Bunkyo-ku, Tokyo 112-8503, Japan

Products and Services

Number of
employees

Consolidated: 12,542 Non-consolidated: 1,874(not including seconded staff)

Net sales

Consolidated: 708.2 billion yen
Non-consolidated: 287.5 billion yen

Organizational and Business Information

https://www.taiheiyo-cement.co.jp/english/company/index.html
https://www.taiheiyo-cement.co.jp/english/service_product/
index.html

Research and Development

https://www.taiheiyo-cement.co.jp/english/rd/index.html

IR Information
Investor Relations

https://www.taiheiyo-cement.co.jp/english/ir/index.html

Sustainability Information
Sustainability

https://www.taiheiyo-cement.co.jp/english/csr/index.html

List of Internationally Registered Trademarksof Taiheiyo Cement Corporation Appearing inthis Report
CARBOFIX
C2SP kiln
Ceraclean
CellSpheres

132

ChiccaLight
TQPS
DENITE
Nanolitia

Stock Overview
Stock Overview (as of March 31, 2022)
Fiscal year
April 1 - March 31
General Meetingof Stockholders Late June
Authorized 197,730,800
121,985,078
Outstanding (including 4,619,188 of treasury
Common stock
shares)Number of
52,322shareholders
Registrar of
Sumitomo Mitsui Trust Bank, Ltd.
shareholders

Major Shareholders (as of March 31, 2022)
Shareholder

Sharesowned (in Holding
thousands) (%)

The Master Trust Bank of Japan, Ltd. (Trust Account) 18,982

16.1

JP MORGAN CHASE BANK 385632

3.8

Custody Bank of Japan, Ltd. (Trust Account)

6,304

STATE STREET BANK AND TRUST COMPANY 505001

4,174

3.5

JP MORGAN CHASE BANK 380072

2,394

2.0

GOLDMAN SACHS INTERNATIONAL
Mizuho Bank, Ltd.

NORTHERN TRUST CO. (AVFC) RE U.S. TAXEXEMPTED PENSION FUNDSSTATE STREET BANK AND TRUST COMPANY 505103

Meiji Yasuda Life Insurance Company

5.3

4,460

2,852

T he Distribution of Shares (in Thousands) by Owner
Category (as of March 31, 2022)
Treasury shares
4,619
3.7%

Financial institutions
38,28031.3%

Individual
investors
and others
18,094
14.8%
Brokerage firms
4,973
4.0%
Foreign investors
48,961
40.1%

Miscellaneous
corporate bodies
7,055
5.7%

2.4

2,000

1.7

1,902

1.6

1,659

1.4

1,527

1.3

(1) The Company owns 4,619,188 treasury shares.
(2) The shareholding ratio has been calculated after subtracting our treasury shares.

Stock Price Transitions

(Yen)

6,000
5,000
4,000
3,000
2,000
1,000
0

Mar. 2017

Mar. 2018

Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022* The Company, effective October 1, 2017, conducted a reverse stock split for its common stock at a ratio of one for 10.
Prices prior to September 2017 have been calculated taking the reverse stock split into account.

Total Shareholder Return (TSR) Transitions

Mar. 2018

Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022

Total Shareholder Return (%)

105.51102.96

55.11

85.24

63.15

Comparison index: Dividend included TOPIX (%)

115.87110.0399.57

141.53144.34* TSR (Total Shareholder Return): This represents the total amount reaped from an equity investment and is expressed as a percentage calculated by dividing the revenue gained from the stock
investment (principally dividend and capital gain) by the stock price (investment expenditure). In this example the investment was made at the closing price at the end of March 2017 and theclosing price calculated at the end of each fiscal year (March 31).

133

BUNKYO GARDEN GATE TOWER,
1-1-1, Koishikawa, Bunkyo-ku, Tokyo 112-8503, Japan
https://www.taiheiyo-cement.co.jp/english
Contact Information
Investor Relations and Communications Group,
General Affairs Department
Tel: 03-5801-0334 Fax: 03-5801-0344
E-mail: ir-com@taiheiyo-cement.co.jp

Corporate Social Responsibility Group,
General Affairs Department
Tel: 03-5801-0335 Fax: 03-5801-0345
E-mail: webmaster@taiheiyo-cement.co.jp