Integrated Report

TAIHEIY CEMENTREP RT 2 2

GRI102-16

Mission of the Taiheiyo Cement GroupOur mission is to contribute to social infrastructure developmentby providing solutions that are environmentally efficient,enhance our competitive position and bring value to our stakeholders.

GRI102-45, 50, 51, 52, 53, 54

CONTENTS
01
02
10
14
24
28

30
42
60
76
92
94
102
103

Mission of the Taiheiyo Cement Group, Business Principles
About the Taiheiyo Cement Group
Commitment of Top Management
Toward Sustainable Growth
Special Feature 1

Taiheiyo Cement Group Efforts to
Mitigate Climate Change
Special Feature 2L everaging Our Cement Technology to Contributeto a Stable Food Supply and Preservation of theWater Environment
Business Activities

Editorial Policy
We started publishing our integrated report, theTaiheiyo Cement Report, in 2020 as our annual
report. It replaces the CSR and annual reports we
had published over the years.
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 dialogue andfurther evolve management while raising the level of disclosure.

Guidelines Used for Reference
The International Integrated Reporting Framework (IIRC)
Guidance for Integrated Corporate Disclosure and Company-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)
ISO 30414

GovernancePublication Dates
December 2020 (previous report: October 2019, next report: October 2021)

Collaborating with Society

Reporting in Accordance with the GRI Standards
This report is prepared in accordance with the core option of the GRI
Standards. The GRI Content index is available on our website

The Environment

GCCA Key Performance Indicators
Financial Data

Corporate Information and Stock Overview
Third-party Opinion

Clarifying Efforts to Achieve SDGs
We analyzed our business risks and opportunities, clarified their relevance to
the Sustainable Development Goals (SDGs) and displayed icons representing
the relevant SDGs on each page of our activities. We will seek to contribute toachieving the SDGs through the group’s business activities.

Business Principles Governing the Way the Company Conducts Business• We are committed to creating sustainable value for our shareholders by generating synergies among the Taiheiyo Cement Groupof companies.
• We aim to manage the environmental impact of our operations while supporting the development of a recycling-based society.
• We will act in an ethical manner and abide by the laws and regulations of those countries in which we operate.
• We will openly communicate with our stakeholders and proactively report on our business activities in a transparent manner.
• We are committed to the ongoing development and application of innovative technologies in order to provide products andservices that benefit our customers and society.
• We are committed to maintaining an international outlook and conducting our business in accordance 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 are valued 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, the economy,
the environment and society, to realize sustainable development, a shared principle of

the GCCA and WBCSD of which we are a member. In December 2002 we formulated theBusiness Principles of Taiheiyo Cement, which comprise nine principles for realizing the Mission of
the Taiheiyo Cement Group, and are striving to implement them.

Scope and Boundaries of this Report

Contact Information

Reporting Period
April 1, 2019 to March 31, 2020
Where information about events having occurred outside this period
are included in the report, it is clearly stated.
In this report, FY means fiscal years shown are as of end of March in
the year indicated.

TAIHEIYO CEMENT CORPORATION

Boundary of Reporting Organizations
The report covers Taiheiyo Cement Corporation (non-consolidated) andincludes our group companies. “The company” refers to Taiheiyo Cement
Corporation (non-consolidated); when information pertains to one of ourgroup companies, the group company’s name is explicitly stated.

Corporate Social Responsibility Group, General Affairs Department● Boundary of Reporting Organizations by Quantitative Data
Quantitative data are aggregated on a consolidated basis and under thefollowing three categories. An icon representing the relevant aggregation
scope is associated with data for categories 1 and 2.

Disclaimer Regarding Forward-looking Statements

Category 1 Non-consolidated
Taiheiyo Cement Corporation (non-consolidated)
GCCA
Category 2
Data collected for reporting of GCCA* KPI. Organizations covered arelisted on pages 06–07.

IR & PR Group, General Affairs Department
Phone: +81-3-5801-0334 Fax: +81-3-5801-0344
E-mail: ir-com@taiheiyo-cement.co.jp

Phone: +81-3-5801-0335 Fax: +81-3-5801-0345
E-mail: webmaster @ taiheiyo-cement.co.jp

Plans and prospects included in this report are predictions basedon 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 materiallyvary from the projected figures or measures cited in this report.

Category 3 (others)• Material Balance of Business Activities (pages 74-75) and Volume ofWaste to Landfill (page 71): organizations covered are listed on page 75•N umber of Fatalities (page 09) and the Number of Accidents Registered in
the Work-related Accident Database / Number of Work-related Accidents
that Occurred / Breakdown of Accidents by Type (page 87): employees of
the company, group companies (including overseas) and our contractors*Global Cement and Concrete Association

TAIHEIYO CEMENT REPORT 202001

About the Taiheiyo Cement Group

History of Our Products andEquipment

May 2000

Acquired an exclusive license from three
French companies for the inorganic
composite material Ductal.

July 2001

Started operating a municipal waste
incineration ash washing system (AshWashing System) at the Kumagaya plant.

January 2002

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

1881
Onoda Cement
Co., Ltd.

1994
Chichibu
Onoda Cement
Corporation

1923

1947

Asano Cement
Co., Ltd.

Nihon Cement
Co., Ltd.

Started operating an AK system torecycle municipal waste as a raw
material for cement at the Saitama Plant.

December 2002

Started operating a facility torecycle wood as a biomass
resource at the Oita Plant.

1998

Kyoto Protocol
Entered into Force

Chichibu
Cement Co., Ltd.

1883

November 2002

Taiheiyo Cement
Corporation

1999

2000

2001

2002

November 2000

History of Business Activities andCorporate Events

October 1998

May 1999

October 2000

Company was founded.

Obtained ISO 14001 certification at
six directly operated cement plants
in Japan.
Acquired the management rights
to Grand Cement Manufacturing
Corporation in the Philippines (currently
Taiheiyo Cement Philippines, Inc.)

2003

2004

2005

Completed construction of Nghi Son
cement plant.

July 2001

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

June 2002

Formulated the Mission of the Taiheiyo
Cement Group.

April 2003

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

April 2003

Grand Cement Manufacturing Corporation
became a wholly owned subsidiary of thegroup, and changed the company namefrom Grand Cement Co., Ltd. to Taiheiyo
Cement Philippines, Inc. in June.

April 2005

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

January 2006

Formulated the Environmental
Management Policy of the Taiheiyo
Cement Group.

History of the Taiheiyo Cement Group02

Nascent Period of Cement
Production in JapanFoundation of
Taiheiyo Cement

In 1873 the Ministry of Financeconstructed a cement production
works in Fukagawa, Tokyo. Two years
later the works successfully produced
and launched sales of domestic
cement comparable in quality toforeign products. Following this, Asano
Cement Co., Ltd., predecessor of Nihon
Cement Co., Ltd., Onoda Cement Co.,
Ltd. and Chichibu Cement Co., Ltd.,
which merged into Chichibu Onoda
Cement Corporation, were founded andsupported the modernization of Japan.

In 1998 Taiheiyo Cement Corporation was
founded through the merger of Chichibu
Onoda Cement Corporation and Nihon
Cement Co., Ltd. The company supplied
cement for national construction projects
including Kansai International Airport andCentral Japan International Airport. In 2000
we also completed the construction theNghi Son cement plant in Vietnam, andthen in 2003 converted Taiheiyo Cement
Philippines, Inc. into a wholly owned
subsidiary, further expanding the group’s
global network.

TAIHEIYO CEMENT REPORT 2020

Cement plant in Fukagawa, TokyoJapan’s first rotary kiln (DB kiln)

July 2006

Developed Silica Fume Premix
Cement for ultra-high-strength
concrete.

August 2007

Commenced selling DENITE,
a heavy metal immobilizer.

December 2007

March 2011

Suspended operations at the
Ofunato Plant due to damage fromthe Great East Japan Earthquake.
Resumed full operations at the
Ofunato Plant.

June 2012

Ductal was used in the pierslabs of Haneda Airport
Runway D.

August 2014

November 2010

2007

October 2008
April 2009
March 2010
April 2010

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

May 2019

Developed AI technology forpredicting concrete slump.

December 2019

Started operating a municipal waste
incineration bottom ash washingsystem at the Kumagaya Plant.

January 2020

Started commercial operationsof a biomass power station at the
Ofunato Plant.

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

Launched a phosphor material,
ChiccaLight, for LEDs.
Global Financial
Crisis

2006

May 2018

2008

2009

Great East Japan
Earthquake

2010

Marked the 10th anniversary of thecompany.
Registered company-wide ISO 14001
integrated certification at six directly
operated plants.
Announced business restructuring forthe group.
Started operating the second
production line of Nghi Son Cement
Corporation.

2011

COVID-19 Pandemic

2012

2013

2014

July 2013

Their Majesties the Emperorand Empress visited theOfunato Plant.

May 2015

Formulated the CSR Objectives
for 2025.

June 2015

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

2015

2016

2017

May 2018

October 2018

2018

2019

2020

Jointly established the Global Cement andConcrete Association (GCCA) with the world’s
leading cement companies.

Marked the 20th anniversary of the company.

June 2019

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

July 2019

Formulated the outline of the Framework for Our
Long-term Vision of Greenhouse Gas Emissions
Reduction toward 2050 and published specificmeasures in March 2020.

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 to support 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 bydemonstrating the group’s overall capabilities.

Commitment toEnvironmental Issues

Period of Economic Downturn,
Earthquake and Adversity

Making Progress by
Fully Deploying Our Capabilities

In 2006, in response to the Kyoto
Protocol which had come into effectthe previous year, we formulated
the Taiheiyo Cement Environmental
Management Policy, declaring anactive commitment to environmental
issues as key management challenges.
In 2007 we launched The Taiheiyo
brand cement concrete project andstarted activities for improving thevalue of the group’s technologicalstrengths and solutions.

The group marked its 10th anniversary
amid a serious economic downturn inthe wake of the 2008 global financial
crisis. In 2010 we implemented businessrestructuring and in 2011 the Great East
Japan Earthquake struck, hitting the
Ofunato Plant and eight service stationsin the Tohoku region, and forcing
all of them to suspend operations.
Our financial structure was bolsteredthrough an increase in capital and wewere able to navigate the adversity.

The Ofunato Plant fully resumed
operations in 2012 and ensured thestable supply of cement used in disaster
restoration work while also treating
disaster waste. Capitalizing on thoseexperiences, we have engaged in thetreatment of disaster waste generated
by earthquakes and typhoons. To
achieve continued growth we willcontribute to social infrastructuredevelopment by providing solutions aspledged in the Group mission.

TAIHEIYO CEMENT REPORT 202003

About the Taiheiyo Cement Group

Business Operations of
the Taiheiyo Cement GroupGRI102-2, 9

The cement industry has two major social roles. One is to ensure a stable supply of base materials for building social
infrastructure, and the other is to take advantage of cement production technology to encourage the circulation of
resources in society through the safe recycling of wastes and by-products as alternative raw materials and fuels for cement.
The social value Taiheiyo Cement Group seeks to create under its growth strategy calls for performing these two social
functions in the Pacific Rim region, providing a sense of safety and security, and thereby contributing to sustainable
development.

Mineral Resources ▶
P. 34
Business

Cement Business (Japan)

Supply of raw materials for cement production,
limestone products and aggregates for theconstruction, steel and chemical industries
Soil solutions business such as treatment ofcontaminated soil
Functional materials business▶P. 30

Production and sales of a wide variety of products inJapan including Ordinary Portland and other cements,
soil stabilizer, soil improvement materials andready-mixed concrete
Supply service through service stations across Japan

Limestone quarry
Cement plant

Cement supply
Resource recycling

Environmental
Business

Raw material
procurement
Headquarters andCentral Research Laboratory

Reuse▶P. 36

Sophisticated waste treatment services(recycled-waste-to-cement system) using
the characteristic features of the cement
production process
Development and sale ofenvironmental products thatutilize the resources we hold：Taiheiyo Cement Group04

Logistics and supply

Production

Coal procurement

TAIHEIYO CEMENT REPORT 2020

Energy materials center
Ash center

Waste disposal company：Outside the groupOther Business

Cement Business (Overseas) ▶P. 32
Cement, ready-mixed concrete andaggregates business around the Pacific Rim
Solutions for saving energy and reducing
environmental impact that incorporate ourcement production technologies

Construction Materials
Business

Real estate businessInformation processing businessTransportation and warehousing businessEngineering businessElectric power supply business▶P. 38Manufacture and sales of a wide variety of construction
materials
Manufacture and sales of cement-related and concrete products
Civil engineering work such as ground improvement projects
Diagnostic and repair services for existing concrete structures

Concrete products manufacturing plantSome plants operated by the groupService station

Construction site

Ready-mixed concrete plantSome plants operated by the group

Sea transportation
Some vessels operated
by the group

Use

Power plant

Steel mill

Water supply and drainage treatment plant

Waste incineration plant

TAIHEIYO CEMENT REPORT 202005

About the Taiheiyo Cement GroupAt a Glance
GRI102-4, 6, 7, 8, 45● Holding company◆ Cement plant*◆ Clinker grinding plant*▲ Representative office▲ Distribution terminal*Business locations where data for GCCA KPIs are collected (FY2020)

TAIHEIYO CEMENT (CHINA)INVESTMENT
Qinhuangdao
DalianDalian Onoda Cement Co., Ltd.
(China Dalian)

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

Qinhuandao Asano Cement Co., Ltd.
(China Qinhuandao)
Qinhuangdao Asano Cement Co.,
Ltd. was removed from the Groupin September 2020 as a result oftransferring all of its equity interests.

9.9%

16.5%

Nghi Son Cement Corporation(Vietnam Nghi Son)

Taiheiyo Cement Corporation
Saitama Plant

06

TAIHEIYO CEMENT REPORT 2020

87.1

TAIHEIYO CEMENT HEADQUARTERS
NanjingHong Kong

Other countries: Net sales (consolidated, as of March 31, 2020)

Nghi Sonbillion yen

2,171

Taichung
Kaohsiung

Hanoi
Bangkok
Ho Chi Minh

Other countries: Number of employees (consolidated, as of March 31, 2020)
Male

ShanghaiTaipei

1,887
284

FemaleTaiheiyo Cement Philippines, Inc.
（Philippines Cebu）

Nha Trang

Cebu

Singapore

TAIHEIYO SINGAPORE
Jakarta

PNG-Taiheiyo Cement Limited（Papua New Guinea Lae）

Taiheiyo Cement Corporation
Kamiiso Plant

Taiheiyo Cement Corporation
Ofunato Plant

Taiheiyo Cement Corporation
Kumagaya Plant

Taiheiyo Cement Corporation
Fujiwara Plant

Taiheiyo Cement Corporation
Oita Plant

DC Co., Ltd.

Lae

CalPortland Company, Mojave Cement Plant(U.S.A. Mojave)

CalPortland Company, Oro Grande
Cement Plant (U.S.A. Oro Grande)

CalPortland Company, Rillito Cement Plant(U.S.A. Rillito)

143.7

U.S.A.: Net sales (consolidated, FY2020)

16.3%

Anchorage

22.1%

SeattlePortlandMojaveStocktonbillion yen

2,893

U.S.A.: Number of employees (consolidated, as of March 31, 2020)
Male
Female2,615
278

Las Vegas

Los Angeles

Oro Grande
RillitoTAIHEIYO CEMENT U.S.A.
San Diego

Headquarters/Branches❶ Hokkaido Branch❷ Tohoku Branch❸ Headquarters/
Tokyo Branch❹ Kanto Branch❺ Chubu Hokuriku Branch❻ Kansai Shikoku Branch❼ Chugoku Branch❽ Kyushu Branch

Research Center Central ResearchLaboratory

Cement Plants*❾ Kamiiso Plant
 Ofunato Plant
 Kumagaya Plant
 Saitama Plant
 Fujiwara Plant
 Oita Plant

❷

61.4%

⓱

❼

❺
❻ ⓭

653.5

Japan: Net sales (consolidated, FY2020)

73.9%

❾

❿

⓲

❽

❶

Group Production Plants*
 DC Co., Ltd.
 Myojo Cement Co., Ltd.
 Tsuruga Cement Co., Ltd.

❹⓫
⓬❸
⓰ ⓯

billion yen

Japan: Number of employees(consolidated, as of March 31, 2020)

8,055

Male
Female

7,005
1,050

⓮

Taiheiyo Cement Group Profile
Net sales

Tsuruga Cement Co., Ltd.

Myojo Cement Co., Ltd.

Consolidated: 884.3 billion yen
Non-consolidated: 314.4 billion yen
Number of employees Consolidated: 13,119
Non-consolidated: 1,798(excluding employees on loan to group companies)
Subsidiaries
186 (including 118 consolidated subsidiaries and6 equity-method subsidiaries)
Affiliates
102 (including 37 equity-method affiliates)

TAIHEIYO CEMENT REPORT 202007

About the Taiheiyo Cement Group

Financial and Non-financial Highlights
GRI102-7, 103-3, 201-1, 405-1

Financial Data
Operating income on sales and ROA are important financial indices to ensure the sustainable growth of the company andour medium- to long-term increase in corporate value, and we also intend to maintain and increase our earnings rate at alevel that steadily exceeds equity costs in the 20 Medium-Term Management Plan. We remain committed to investment ingrowth areas, the generation of cash flow, enhanced shareholder returns and reduction of interest-bearing debt.

⿎Total Assets, Ordinary Income,and Return on Assets (ROA)⿎Net Sales, Operating Income andOperating Income on Net Sales

1. 売上高・営業利益および売上高営業利益率■ Net sales (millions of yen) ■ Operating income (millions of yen)

7.5

7.2

798,588

60,4332016■ Total assets (millions of yen) ■ Ordinary income (millions of yen)
● Return on assets (ROA) (%)● Operating income on sales (%)

7.9

835,359

2. 総資産・経常利益および総資産経常利益率（ROA）

871,113916,071

65,12963,235

2017

2018

5.9

7.2

884,350
61,0082020(FY)

60,2252016■ Net income attributable to owners of parent (millions of yen)

47,59738,52536,40410.7
43,4522017

4.キャッシュフロー● Return on equity (ROE) (%)

10.2

59,80264,3662018

64,306

2019

60,5412020(FY)

⿎Cash Flow

3. 親会社株主に帰属する当期純利益および自己資本当期純利益率（ROE）

11.7

5.9

1,014,075 1,015,415 1,020,111 1,034,428 1,032,923

⿎Profit Attributable to Owners of Parent andReturn on Equity (ROE)
14.0

6.3

6.9

66,012

2019

6.3

5.9

84,0399.2

4,528

39,15175,627■ Cash ﬂow from operating activities (millions of yen)
■ Cash ﬂow from investing activities (millions of yen)
● Free cash ﬂow (millions of yen)

94,43359,222

107,683

39,25825,367

97,28390,902-58,025-65,534-10,394

2016

2017

2018

2019

2020

(FY)

-48,460
2017

2018

2019

2020

⿎Interest-bearing Debt and Net DER (Debt Equity Ratio)

⿎Capital Expenditure and Depreciation

5. 有利子負債およびネットＤＥレシオ

6. 設備投資及び減価償却

1.1■ Interest-bearing debt (millions of yen) ● Net DER（times）

0.8

0.6

0.5

2017

■ Capital Expenditure (millions of yen) ■ Depreciation (millions of yen)

67,7960.5

340,930

2016

(FY)

77,677394,49708-71,0992016

288,606

279,615

266,115

2018

2019

2020

TAIHEIYO CEMENT REPORT 2020

44,076
43,957(FY)

2016

54,38444,4592017

58,08744,0032018

44,0082019

48,8632020(FY)Non-financial Data
The Future Vision and Direction for the mid-2020s is to be an enterprise group capable of providing a sense of safety
and security to communities in the Pacific Rim by demonstrating the group’s overall capabilities. We are continuing ourefforts to achieve this vision by establishing quantitative targets in the areas of (1) prevention of accidents, (2) reduction ofgreenhouse gas emissions, and (3) workplace diversity as CSR Objectives for 2025.

Prevention of Accidents
7.死亡災害件数

8.休業災害度数率

⿎Number of Fatalities (number of cases)

⿎Lost Time Injury Frequency Rate

GCCA

(per million man-hours)

4

1.18

1.16
0.97

2

1.01
0.87

2

CSR Objectives
for 2025

2016

2017

0
2019

2018

0

0
2026 (FY)

2020

2016

2017

2018

2019

2020

(FY)

Reduction of Greenhouse Gas Emissions
ネットCO₂排出原単位削減率（2000年度比）
9.
⿎
Reduction Rate ofSpecific Net

CSR Objectives
for 2025

CO₂ Emissions per Tonne of
Cementitious Product (%)(compared with FY2001)
GCCA

7

8.9

7.8

代替原燃料の使用率
10.
⿎R
atio of Alternative Raw Materials and Fuels

GCCA● Alternative fuels (%)● Alternative raw materials (%)

10.0

8.3

15.5

15.5

15.5

13.1

13.5

2017

2018

15.1

16.0

15.5

13.8

14.1

2019

2020

5.9

2016

2017

2018

2019

2020

2026 (FY)

2016

(FY)

Workplace Diversity
11.女性従業員比率

⿎Ratio of Female toMale Employees (%)(as of March 31, 2020)

CSR Objectives
for 2025

Non-consolidated*

⿎Number of Employees by Gender(consolidated, as of March 31, 2020)

10.0

Female: 1,612

12.3%*Including employees on loan to group companies

8.6

9.0
Total:

13,119 people

7.8
7.1
6.4
2016

Male: 11,507

2017

2018

2019

2020

2026 (FY)87.7%

TAIHEIYO CEMENT REPORT 202009Commitment of Top Management

Striving for Sustainable

Growth and Strengthening
Our Presence acrossthe Pacific Rim

Masafumi Fushihara

President and Representative Director
Taiheiyo Cement Corporation

10

TAIHEIYO CEMENT REPORT 2020

GRI102-14, 15, 103-1

Business Environment and Results of Our Performance in FY 2020

Increasing Uncertainty in the Global Economy
The Taiheiyo Cement Group has announced its
intention to achieve its vision and direction targetingthe mid-2020s to be an enterprise group capableof providing a sense of safety and security tocommunities in the Pacific Rim by demonstrating
the group’s overall capabilities. In FY2020, thesecond year of the 20 Medium-Term Management
Plan (FY2019−2021), which we formulated as thesecond step for realizing our Future Vision and
Direction, the Japanese economy mildly recovered
amid improvements in employment and income.
Business performance, however, particularly that ofmanufacturers, remained weak and the economic
outlook was uncertain.
In the Pacific Rim region, a main focus for thegroup’s overseas business, the U.S. economy achieved
robust growth with low unemployment and strong
consumer spending. While the pace of China’s
economic growth slowed due to the prolonged trade
conflict with the U.S., the rapidly growing economies
of Vietnam and the Philippines demonstrated
strength. Since the start of 2020, COVID-19 has spread
across the globe. Given that the impact of infections
across the world will be prolonged, the uncertainty
surrounding the global economy is increasing.
Under these circumstances the group’s net sales
and operating income for FY2020 declined from theprevious fiscal year to 884,350 million yen and 61,008
million yen, respectively. The business environment
surrounding the group will continue to support acertain level of demand for domestic cement, our main
business, due to investments for urban redevelopment
and disaster protection and mitigation projects,
and an increase in construction work related to the
Linear (maglev) Chuo Shinkansen. The prospects forthe domestic business, however, will depend on theextent to which economic activities are affected by the
spread of COVID-19. Domestic demand for cementfor FY2020 was 41.0 million tonnes, the same level as
50 years ago. While we were unable to achieve the net
sales we had originally targeted, we are clearly making
steady progress toward our goal of strengthening ourpresence across the Pacific Rim.

For instance, in the West Coast of the U.S., a key
area for our investments, we are steadily preparing
for an increase in demand through measures suchas expanding equipment at the Oro Grande plant,
which we acquired in 2015. We also concluded abasic agreement on capital and business partnershipwith an Indonesian state-owned company, the largest
cement manufacturer in Indonesia, in April 2020. This
represents a significant step toward establishing abase in an area where the group has not previously
maintained any business sites. For example, we areexporting clinker to Australia and Bangladesh fromJapan in a partnership with an Indonesian company,
and this investment is expected to help us boost
efficiency in logistics by leveraging Indonesia as
our new export base. In line with its growth strategy,
the group has restructured its portfolio throughadditional investments in the U.S. and equity injectionin the Philippines, Vietnam and other South Asian
countries. Indonesia, where we have now establisheda foothold, is the sole untapped region in our strategic
business expansion in the Pacific Rim. While declining
cement demand in Japan is unavoidable, this recent
action could be highly significant for the group in
taking a number of proactive measures to ensure its
sustainable growth. We will continue to explore future
investments in each of our business sites to drive thegrowth of the group.

TAIHEIYO CEMENT REPORT 202011

Commitment of Top Management

Boosting Corporate Resilience in Times of Change
We achieved an operating income of over 60 billion
yen despite a greater-than-expected decline indomestic demand for cement. However, we believe
we have established a corporate structure thatwould have delivered the earnings targeted in the
Mid-term Management Plan had the level of cement
demand been as projected.
One strength of the group’s corporate structureis that all of our businesses are well balanced.
For instance, the operating income of 66 billion
yen for FY2019 was distributed evenly across thedomestic cement business at 21.4 billion yen, theoverseas cement business at 20.3 billion yen, andthe total of Natural Resources, Environmental, andConstruction Materials and Building Construction& Civil Engineering businesses at 24.5 billion yen.
Even though domestic demand for cement shrank in
FY2020, we have established a corporate structure that
ensures we would still achieve profits for the group asa whole, regardless of the condition of the domestic
market, through the growth in overseas demand andother businesses.
It is undeniable that in the past the Group had
been highly reliant on the domestic cement businessto earn the major portion of profit. However, we havetaken steps to broaden the experience of employees
though, for example, cross-departmental andinternational assignments and, as a result, our humanresources have significantly strengthened in each of thebusinesses and communication in every division has

12

TAIHEIYO CEMENT REPORT 2020

improved, largely contributing to the group’s growth.
FY2021, which will be significantly impacted by the
spread of COVID-19, is the final year of the 20 MediumTerm Management Plan. The Taiheiyo Cement Grouphas worked on establishing a solid business foundation
while balancing its investments for continued businessgrowth, strengthening its financial structure andenhancing shareholder returns. FY2021 will challenge
the results of the various measures the group has taken.
I am confident that the corporate structures of thecompany and the group have sufficiently evolved tonavigate through this adversity.
Progress of CSR Objectives for 2025

Targeting an 80% Reduction in CO2 Emissions by 2050
The group has established quantitative targets in theareas of (1) Prevention of accidents, (2) Reduction ofgreenhouse gas emissions, and (3) Workplace diversity
as CSR Objectives for 2025. We have incorporated
these into the 20 Medium-Term Management Plan andhave been working to achieve them.
We declared our support for the Task Force on
Climate-related Financial Disclosures (TCFD) in June
2019. We also set a target of reducing the net CO2
emissions from cement production by 80% from the2000 level by 2050 in a framework for our long-term
vision of greenhouse gas emissions reduction toward
2050, which we formulated in July 2019. While itis challenging to completely avoid the generationof CO2 emissions from cement production, thepublic would never allow the cement industry todemonstrate a reluctance to take action. It is feasiblethat an alternative material to concrete could be
developed but it is unlikely to be available in sufficientquantities to replace the world’s most used manmade product. We will therefore continue to pursue
the reduction of CO2 emissions associated withcement and concrete. Moreover, we should regard
the reduction of CO2 emissions as a challenge not forthe survival of the company but for that of the cement
industry as a whole.
While our environmental technologies in cement
production are among the best in the world, outsidethe-box, innovative technologies are essential forachieving our target of reducing CO2 emissions by

80%. For instance, establishing CCS/CCU technology
to separate, capture and utilize CO2 will play a keyrole in those innovative technologies. Following theconstruction of a test facility at the Fujiwara Plant
in Inabe City, Mie Prefecture, we are planning ademonstration plant with the support of NEDO (New
Energy and Industrial Technology Development
Organization). We are also preparing to dispatch
engineers and researchers to research institutions
around the world with the aim of acquiring the latest
knowledge. We must clearly address this toughchallenge by seizing the initiative and take action
toward mitigating climate change as a leading
company in the cement industry.
Initiatives for Creating Safety Culture andPromoting Diversity
We continuously focus on establishing a safety
culture and creating a safe workplace, and theprevention of accidents has been raised as a priority
among our CSR objectives for 2025. Creating asafety culture that secures the happiness of ouremployees and their families comes first in doing
business. A company cannot pursue growth if it isunable to produce safe products in a safe manner.
As a result of focusing on measures for the safe
operation of equipment, we have nearly achieved
zero accidents from equipment malfunctions. Mostof the remaining accidents have been due to a lackof safety awareness. The heads of the business sites
are responsible for ensuring that employees remaincompletely aware of safety. In the area of diversity
we have set a target of women representing at least
30% of new hires, with specific measures in place
for achieving this goal. I fully expect them to haveopportunities to continue advancing their careers
toward reaching management and senior executive
positions. We are also implementing specificinitiatives in anticipation of the roles women will
have in energizing the future of Taiheiyo Cement.
The group has worked on developing global humanresources in expanding its business areas focusing
on the Pacific Rim region, and we must further
promote the effective use of their capabilities.
Our overseas business is not based on a strategy
of injecting capital and receiving dividends; ouremployees are directly engaged in production andsales on-site. Therefore, it is vital for us to recruit anddevelop human resources from a global perspective
regardless of nationality. Looking ahead, we willcontinue striving to develop and deploy humanresources from the viewpoint of motivation andskills.
The Future Envisioned by Taiheiyo Cement

Toward Realizing a Sustainable Society with a
Focus on Cement
The Taiheiyo Cement Group has continued to
grow while focusing on the cement business andpursuing the potential of cement and concrete. It
also contributes to the resolution of social issues
by providing environmentally sound products andcreating a recycling-based society.
Cement plays a central role in the group’sbusiness. Ensuring the availability of limestone,a raw material for cement, is essential for thegroup’s continued contribution to society. With thisphilosophy we have secured reserves of limestone
equivalent to the total production volume of cement
over the next 100 years and established a system
to ensure the stable supply of cement. In addition
to cement, our core product, we will develop
the cementitious materials* business to further
strengthen the company’s presence in overseas
markets. In overseas regions where we produce orsell cement, we will contribute to the developmentof local communities and increase our corporate
value by offering the advanced technologies wehave nurtured in the Environmental and Natural
Resources businesses in Japan.
In order to create a sustainable society we arecommitted to meeting the expectations of our
stakeholders by contributing to achieving the SDGs,
which are goals shared internationally, throughbusiness activities focused on the cement business.
*Cement with mineral components, such as slag and pulverized fuel ash

TAIHEIYO CEMENT REPORT 202013

Toward Sustainable Growth

Enhancing theValue Creation Process

Risks and
Opportunities

GRI102-7, 15

Input▶P.16 Recognition of Business Our Environment (Risks and Opportunities)

Financial Capital

Climate change

Credit rating(as of August 2020)

A (JCR)
A-(R&I)

Manufacturing Capital

Domestic clinker production
capability (FY2020)

Increase of and developments related toenvironmental pollution and its impact

17.7

million tonnes

Overseas clinker production
capability (FY2020)

Large-scale disasters

ion
uct
d
Pro

12.9

million tonnes

Risks

Technological innovation(advancement of ICTs)

Changes in economic conditions

Continuous development related tothe declining birth rate
and aging population in JapanIntellectual Capital

Patents held
(as of the end of FY2020)*

1,235
216

Japan

Cement Business(Japan・Overseas)

Overseas▶P. 30,32

Human Capital

Spread of COVID-19

Contribution to a recycling-based society(wide variety of recycled raw materials and fuels)

Opportunities

Environmentally sound products(with low CO² emissions)
Reconstruction of disaster-stricken areas(acceptance of disaster waste)
Provision of technologies andtechnical guidance to emerging economies

13,119Social and Relationship Capital

Relationship of trust with communities
in which we do businessIndividual meetings with investors

149

t
en
rem
ocu
l pr
eria
Raw matStrengthening urban resilience,
preventing disasters

Number of employees(as of the end of FY2020)

CementsupplyMineral Resources
Business▶P. 34

Events:Natural Resources Capital

Limestone quarries of the group(as of the end of FY2020)

19

Input of waste and by-products(FY2020)*409.5
kg/t-cement

Second StepFirst Step

The 17 Medium-Term
Management Plan

Strategy for Research Businessand Development
Strategies“Establish a Solid▶P.18 Materiality of the Taiheiyo Cement Group

Group s Material

14

TAIHEIYO CEMENT REPORT 2020

Group’s Total Capabilities
Business Model

Pioneering a

Output and Outcome

Sustainable Future
for the Earth

Building Safe andSecure Social Infrastructure

Efforts to mitigate andadapt to climate change
Logi
stic
sa
nd
su
pp
l

Reduction rate of speciﬁc
net CO₂ emissions per tonneof cementitious product(compared with FY2001)(FY2020)

8.3

yConstruction
Materials
Business%

Stable provision of
products and services▶P. 38

Cement productionin Japan (FY2020)

Use

19.8

Recycling
waste andby-products

million tonnes

Cement production
overseas (FY2020)

13.9

million tonnes

Environmental
Business

Creation anddevelopment of arecycling-basedsociety▶P. 36Socioeconomic beneﬁts
from environmental impact
reduction due to the
input of waste andby-products (FY2020)

se
Reu

91.2

Leading a
Recycling-based
Societybillion yen▶P.20 Medium-term Management Plan and CSR Objectives

The 20 Medium-Term
Management Plan
Strengthen Management
Foundations

Business Foundation”

IssuesThird Step

Next Medium-Term
Management PlanCSR Objectives for 2025
Closely related
SDGs*Figures are on a non-consolidated basis.

TAIHEIYO CEMENT REPORT 202015

Toward Sustainable Growth

Recognition of Our Business Environment(Risks and Opportunities)
GRI102-11, 15, 29, 32, 46, 103-1, 2, 201-2

The Taiheiyo Cement Group’s efforts to prevent or lessen the impacts of risks that could significantly affect its
business are key for its sustainable growth. Every three years the Risk Management & Compliance Committee
leads the review of the risks that have been identified across the company while implementing risk managementfrom PDCA cycles in each fiscal year. During the review in FY2020 we categorized them in terms of impact ofanticipated changes in social and environmental conditions over the next ten years, in relation to uncertainty ofgroup corporate management. The three categories are: change risks, company-specific risks and compliancerisks. The review identified 16 risks that could have a material impact on the group.
Materiality Analysis of Risks

Company-wide Material Risk Identification

Big

Increasingly extreme weather events
Climate change regulations

Risk Category

Item

ChangeEnvironmental aspects◦Climate change: increasingly extreme weather
events and dramatic increase in weather disasters◦Climate change: changes in regulations and society◦Increase of and developments related toenvironmental pollution and its impact: regulations◦Geological and biological activities: occurrence of alarge earthquake
Social aspects◦Technological innovation: evolution of digitalization (ICT)◦Changes in economic conditions◦Continuity and development related to thedeclining birth rate and aging population in Japan:
declining labor force

Companyspecific◦Waste treatment◦Aging facilities

Compliance◦M aintenance and improvement of thegovernance system◦Respect for human rights◦Occupational health and safety◦Accident prevention (including in relation to
products and services)◦Misconduct prevention (including in relation
to products and services)◦Response to impacts of external accidents◦Participating in and respecting local
communities

Small

Global impact

Large earthquakes
Resource depletion

Changes ininternational
political dynamics
Outbreak of
epidemics
Food shortages

Impact of environmental
pollution
Changes in economic
conditions
Declining birth Evolution of ICT
rate and aging
population

Promotion of workstyle reform and diversity

Aging facilities
Small

Waste treatment

Monetary impact on the company

Big

Company-specificAging waste treatment facilities
Compliance◦Maintenance and improvement of the governance system ◦Respect for human rights◦Occupational health and safety◦Accident prevention (including in relation to products and services)◦Misconduct prevention (including in relation to products and services)◦Response to external accidents ◦Participating in and respecting local communities● Results of Collection, Evaluation and Identification of Risks

In considering company-wide risks in terms of the social and environmental
challenges to be addressed, we categorized them as follows:◦Change risks: arising from changes in the social environment◦Company-specific risks: arising from the characteristics of ourbusiness and capital, including all types of capital such as mining
rights and human resources◦Compliance risks: related to the foundation of the organization
We then selected the risks deemed material for the entire company andassessed them in accordance with the criteria shown on the right.

(1) Change risks

16

We examined these items based on their impact on the company (that is,
TAIHEIYO CEMENT REPORT 2020

the impact of the monetary evaluation) and the magnitude of the global
impact (“occurrence” multiplied by “impact”). In selecting material risks
we identified seven items using the magnitude of the impact on thecompany as the sole metric for selection.

(2) Company-specific risks

In this category the items are not closely related to any changes in global
conditions but are closely connected to the group’s business history. We
identified two such items that could significantly impact on the group.

(3) Compliance risks

Items in this category serve as the foundation of the organization
and are essential for effectively controlling the organizationand ensuring its continued acceptance by society. We therefore
identified all items as material company-wide.

Contributing to
National Resilience

Future Business
Strategies
Based on Results of aCompany-wide Risk
Review

The increase in the number andseverity of natural disasters arechallenging social structures toformulate disaster prevention
and mitigation actions. We
will contribute to national
resilience by enhancing thestable supply of cement
and other construction
materials for strengthening
infrastructure and supporting
rapid disaster restoration.

Supporting the Creation ofa Recycling-based Society

We have recently been
recycling disaster waste as raw
materials and fuels for cement
production as well as industrial
waste, by-products, municipal
waste and incineration ash. We
will play our role in establishinga recycling-based society
by applying and developing
the necessary expertise andtechnologies.

Advancing the Creation of a
Low-carbon Society

Viewing the challenge of reducing
CO² emissions as a positive
opportunity to advance the creationof a low-carbon society through ouroperations, we will expand our efforts
to efficiently replace fossil fuels withalternative energy derived fromwaste and promote technologicalprogress in such areas as thedevelopment of low-CO² cement
and innovative technologies for CO²
capture, utilization and storage (CCU
and CCS).

Summary of the Collection, Evaluation and Identification of Company-wide Risks
Step 1

Step 2

Step 3

Step 4

Step 5Compile anticipatedchanges in socialand environmental
conditions over the
next ten years.

Evaluate the impact
of collected changes
on the group.

Review the results ofthe evaluation of the
impact.

Identify companywide material risks(Risk Management& Compliance
Committee).

Determine companywide material risks.

List the anticipatedchanges in socialand environmental
conditions over the nextten years as a scenario
and produce a list ofchanges by categorizing
and organizing them by
keywords.

Review andevaluate the listedchanges for theirimpact in relation
to uncertainties ofgroup corporate
management.

Review theuncertainties
identified by eachbusiness unit.

Determine the levelof materiality of
the uncertainties,
summarize theresults of theidentification andreview changes.

Report the resultsof the review to the
CSR Management
Committee.

We collect, evaluate and identify company-wide risks,
including those of group companies, every three years
and conduct an annual review of those risks. FY2020
was the third year of the company-wide risk review
since it was first conducted in FY2017. The purposeof identifying risks is to understand the impact ofanticipated changes in social and environmental
conditions over the next ten years in relation to
uncertainty of group management and then formulate
measures to avoid and reduce that uncertainty. We
review risks with reference to the corporate risk
management guidance based on ISO 31000, COSO
and WBCSD as well as other risk information. We also
consult risk management experts.

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: Systematic Risks Loom Large (2019):
Sustainalytics•SDGs
For more information see
̏ Risk Management and Compliance.̋

▶︎P. 50TAIHEIYO CEMENT REPORT 202017

Toward Sustainable GrowthMateriality of the Taiheiyo Cement GroupGRI102-29, 32, 40, 42, 43, 44, 46, 47, 103-1, 2, 3, 203-1

STEP 01│Identification of Issues
Key Stakeholders’ Expectations and Demands Related to CSR Issues
We strive to fulfill our responsibilities in response to the expectations and demands of stakeholders while
directly and indirectly maintaining sound relationships with them. Listed below are Taiheiyo Cement Group’s key
stakeholders, identified through consideration of our business characteristics and environment.
Shareholders

Stakeholders

Customers

Employees

Society

Shareholders,
Sales agents, ready-mixed
investors and financial concrete companies,
institutions
ordering parties and waste
disposal companies◦Publication of various
reports (financial
statements and CSR
Major
reports, etc.)
Opportunities ◦Website and IR sitefor◦IR activities
Engagement ◦Response to surveys

Local communities
in which we dobusiness◦Sales contact at the head ◦Labor-management consultation
and branch offices
and briefing sessions◦User societies and industry ◦Training programs◦Setting up contact points for
associations
consultation and whistleblowing◦Technical journal andproduct catalogue◦Website and intranet◦In-house newsletter◦Technical workshop◦CSR report◦Website

Suppliers

Local
governments

NGOs and
NPOs

Business
Partnerpartners
companies(procurement) (facilities
operation)◦Briefing sessions, ◦Notifications ◦Meetings and ◦Procurement ◦The Healthdebriefing
to localgatherings
briefing
and Safety
sessions, tours andgovernments ◦Surveys
sessions
Cooperativeenvironmental
Committee◦CSR reports ◦Dialogue
monitoring system ◦Dialogue◦Social
contribution◦Social contribution
activities
activities◦CSR reports◦Dialogue

Stakeholder Expectations and Demands

Economy◦Management stability ◦Stable supply of products ◦Payment of reasonable priceand growth potential ◦High value-added
products◦Stable redistributionof profits◦Improved economic
efficiency of waste disposal◦Information disclosure◦Effective allocation ◦Provision ofof management
environmental products
resources◦Reduced environmental◦Information
impact from waste
Environment
disclosure
treatment

Society◦E ffective
allocation ofmanagement
resources◦Information
disclosure◦Maintaining productquality and safety◦Provision of information
on product use◦Technical support for
product use◦Response to complaints◦Improved resource
circulation in thecommunity◦Sharing social
costs◦Reduced environmental impact on the community◦Countermeasures to mitigate climate change◦Contribution to resource recycling◦Improved energy efficiency◦Appropriate use of water resources◦Conserving biodiversity◦Information disclosure◦Fair evaluation of environmental
considerations◦Support for environmental
measures◦Promotion of environmentallysound management◦Respect for human rights◦Respect for diversity◦Elimination of discrimination; fairevaluation and equal opportunity◦Secured occupational safety andimproved work environment◦Support for skill and careerdevelopment◦Ensuring opportunities forconversation◦Contribution to infrastructure development◦Maintaining the quality of product and service
safety◦Job creation◦Respect for human rights and the community◦Social contribution activities◦Information disclosure◦Equal and fair relationships◦Respect for human rights◦Secured work safety andimproved work environment

The Taiheiyo Cement Group recognizes and evaluates
Group risks and opportunities from the perspective of ESG(environment, society and governance). Furthermore, it
strives to reduce potential, medium- to long-term businessrisks, fully utilize its resources and create social value andexpand business opportunities.

Risks and
Opportunities
for Our Business
Operations
Recognition and
Evaluation▶︎P. 16

Relationships between SDGs and Our Business Operations

18

TAIHEIYO CEMENT REPORT 2020

◦Activity◦Payment of reasonable pricesupport andsponsorships◦P romotion of environmentallysound management

Risks and Opportunities for Our Business Operations

Low

◦Tax
payment

Medium

Key Directions for the Group◦Stable provision of products and services◦Efforts to mitigate and adapt to climate change◦Creation and development of a recycling-oriented society◦Expansion of strategic business domain◦Construction of new business model◦Retention and development of capable human resources◦Enhancement of group governance◦Strengthening of corporate governance

5 goals most closely related to our business operationsHigh

●=Material Aspects

STEP 02│ Prioritization

In the process of steps 1 and 2 we referred to:・GRI Sustainability Reporting Standards(GRI Standards) 2016/2018
・ISO26000
・SDGs, SDG Compass, SDGs Industry Matrix
 A1000SES (AA1000 Stakeholder Engagement Standards)
・A・SASB
・ESG surveys and evaluations
・Internal questionnaire and feedback surveys
・Stakeholder Dialogue
・CSR report questionnaire survey
・Opinions and advice from outside experts and advisors●= Various sustainability issues● Creating anddistributing economicvalue● Mitigating climatechange● Occupational
環healthand safety● Improving energy andresource productivity(promoting resource
recycling)● Diversity and equal
opportunity● Maintaining productquality and safety andensuring stable supply● Participating in andrespecting local
communities

Materiality of the impact for stakeholder
evaluations and decision making

We identified sustainability issues while referring to international guidelines
and stakeholder feedback in the context of our business. Through internal High materiality
meetings we then held discussions on the priority themes for the Taiheiyo
Cement Group, resulting in 11 priority aspects of the material issues.

● Preventing environmental
pollution● Conserving and restoring
biodiversity● Offering environmentallysound products andservices● Respect forhuman rights
・Appropriate use of water resources
・Appropriate management of chemical substances・Compliance with environmental laws and regulations
・Mitigation of environmental impacts of transfer and transport
・Human resource development
・Work-life balance management
・Sound labor-management relations
・Fair trade
・Corruption prevention
・Marketing communication
Materiality
High materiality
・Personal information protection
・Information disclosure
Materiality of the impact of Taiheiyo Cement on economy,
theenvironment
andsociety・Protection and use of intellectual property

Material Issues and Approaches of the Taiheiyo Cement Group
Categories

EconomyEnvironment

Material Aspects

Boundaries of Major Impact
Taiheiyo Cement

Creating and Distributing
Economic Value

Society

Improving Energy andResource Productivity(promoting resource recycling)

Industry andregional wasterelated facilities

Mitigating Climate
ChangeIndustry andregional wasterelated facilities

Preventing Environmental
Pollution

Areas aroundplantsConserving and Restoring
Biodiversity

Areas aroundplantsOffering Environmentally
Sound Products and Services

Society

Occupational Healthand Safety

Management Approaches

Value chain

Policy:•C onducting business activities in accordance with our 20

P. 8, PP. 20-21,
PP. 30-39, PP. 89-91

Policy:• Environmental management policy

PP. 62-67,
PP. 72-73

System:Medium-term Management Plan (FY2019 to FY2021)• WBCSD Membership conditions• GCCA Sustainability Charter• Setting up Environmental Management Committee•A ll plants, head office, branches and the Central Research Laboratory

are operating in compliance with ISO 14001
Evaluation: • Our Long-term Vision of Greenhouse Gas Emissions Reduction
toward 2050
• CSR Objectives for 2025
• Group environmental targets and KPIs based on the WBCSD
Membership conditions and the GCCA Sustainability Charter•M onitoring and review by the Environmental Management
Committee
Policy:System:Contractors

Report Page

Evaluation:• Occupational Health and Safety Policy• Establishment of the Environmental Management Committee• OSHMS has been running in all plants and mines• CSR Objectives for 2025
• Monitoring of data on health and safety including information

PP. 24-27,
PP. 62-65, P. 73
PP. 70-71
PP. 68-69
PP. 36-37, PP. 40-41,
PP. 76-78

PP. 86-88

from contractors

Policy:System:Diversity andEqual Opportunity

Society

Maintaining ProductQuality and Safety andEnsuring Stable Supply

Participating in and
Respecting Local
Communities

Respect for
Human Rights

STEP 03│Validation

─Areas aroundplantsContractors

We confirmed the Principles of Completeness andStakeholder Inclusiveness are applied to finalize
the identification of the report content.
➡ Discussion at the Taiheiyo Cement report task force meeting➡ Reporting and approval at the CSR Management Committee

a fair evaluation system and comfortable working environments
Evaluation: • CSR Objectives for 2025
• Quantitative targets for diversity• Monitoring various kinds of personnel data
Policy:System:Cement users
Society• The Basic Policy Concerning the Development of Human Resources• The Basic Policy Concerning Diversity•D evelopment of a long-term human resource development system,

PP. 79-83• Quality Policy• A unified ISO 9001-based management system forproduct development, design and production• Technical support in the framework of Taiheiyo Brand

Cement/Concrete (TBC) activities
Evaluation: • Analyzing suggestions and inquiries related to quality• Regularly disclosing safety-related data on our website
Policy:• Identifying communication with communities as a material issue in the

System:• Promoting company-wide activities by the Stakeholder

Policy:System:• Basic Policy Concerning Human Rights and Labor Practices• Promoting company-wide activities under the Human Rights

Evaluation:• Contact points for counseling• Managing progress according to the company-wide action plan

PP. 76-78

Mission of the Taiheiyo Cement Group and the Basic Policy of CSR

Communication Committee
Evaluation: • Managing progress and sharing information under thecompany-wide action plan

Committee

PP. 89-91

P. 79

and facilitating the exchange of opinions and negotiations at labormanagement consultations

STEP 04│Review

We implement a review every fiscal year for the report issued.
◦ Internally ➡ Report booklets are distributed to all employees of Taiheiyo
Cement Corporation and a questionnaire survey is conducted.
◦ Externally ➡ Third-party opinion by experts ➡ Questionnaire survey		➡ Review by external advisors

TAIHEIYO CEMENT REPORT 202019

Toward Sustainable Growth

Progress of the Medium-Term Management Plan
and CSR Objectives
GRI102-11, 15, 29, 103-2

Fundamental Policies of the 20 Medium-Term Management Plan (FY2019-2021)

Fundamental Policies
To become an enterprise group that anticipates future changes in the business environment and seeksinnovations on all fronts, thereby advancing along a pathway of growth.
To contribute to the establishment of a sense of safety and security in society through the stableprovision 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 base for businesses, and further improve ourfinancial structure through exhaustive cost reductions as well as by actively executing investments inpromising fields that will contribute to the Group’s sustainable growth.
Strategy for Researchand Development

Business Strategies▶P. 40 Research and Development▶︎PP. 30–39 Business Activities

Strengthen Management
Foundations▶PP. 42–59 Governance▶ PP. 60–75 The Environment▶ PP. 76–91 Collaborating with Society

Establish a solid business foundation.

The 20 Medium-Term Management Plan: Management Targets
FY2019 Result

FY2020 Result

FY2021 Target

Operating incomeon sales

7.2%

6.9%

9% or more

ROA
(ordinary income)

6.3％

5.9％

8% or more

20

The 20 Medium-Term
Management Plan
FY2019-2021(second step)17

The 17 Medium-Term
Management Plan20

FY2016-2018(first step)

TAIHEIYO CEMENT REPORT 2020

Group’s management foundation(human resources, technologies,
R&D capabilities, sales, resources,
knowhow, etc.) as pillars of growthFuture Vision and Direction(toward the mid-2020s)

CSR Targets 2025

To become an enterprise group(Objectives to Be Achieved by FY2026)

Ⅰ

Ⅱ

Zero fatalities
Prevention of
Accidents

Scope of implementation: Employees of the Taiheiyo Cement Group
including overseas business sites and contractors

CO2

Reduce by at least 10% specific net CO2 emissions per tonne incomparison to FY2001 levels

Reduction ofGreenhouse
Gas Emissions

Scope of implementation: Cement production sites of Taiheiyo Cement and groupcompanies, including overseas sites

Ratio of female to male employees among new hires at least:
30% (those under “G Course” categories)
Ratio of female to male employees at least: 10%
Ratio of newly appointed female to male managers at least: 10%

Ⅲ
Workplace
Diversitythat provides a sense of safety
and security to societies

in the Pacific Rim by demonstrating
the group’s overall capabilities

Scope of implementation: Non-consolidated (including employees on loan to groupcompanies and other companies)

Next Medium-Term
Management Plan
(third step)The 20 Medium-Term Management Plan
Financial Indicators (Guidelines)(Billions of yen, unless otherwise stated)

FY2018 Result

FY2019 Result

FY2020 Result

FY2021 (Planned)

Net sales

871.1

916.0

884.3

950.0 or more

Operating income

65.1

66.0

61.0

85.0 or more

EBITDA*

111.6

110.5

109.9

140.0 or more

Net debt/equity ratio (DER) (times)

0.6

0.5

0.5

0.5 or less

Net interest-bearing debt/EBITDA (times)

2.1

2.02

1.95

1.5 or less*Operating income + depreciation (including goodwill amortization)

Financial Strategy and Shareholders’ Returns① Capital expenditure and investment and financing

We plan to invest 230 billion yen, including 120 billion yen in growthinvestment, over the three years. In FY2019 and 2020 we decided
to invest around 60 billion yen domestically and overseas as growthinvestment. This includes the amount invested for a planned capitalalliance with the PT Semen Indonesia (Persero) Tbk group as
announced in April 2020.

② Returns to shareholders

We have stated that we will consider flexibly repurchasing
shares toward achieving a total return ratio of around 30%. In
FY2019 we achieved a total return ratio of around 34% by paying
commemorative dividends for the 20th anniversary of the company’s
founding and repurchasing our shares in addition to ordinary

dividends. In FY2020, although we only paid ordinary dividends,
the inclusion of repurchased shares announced in May 2020 andconcluded in July 2020 in FY2020 financial figures would bring thetotal return ratio to around 32%. Thus, our total return ratio exceeded
30% in those two years.

③ Further strengthening our financial structure

We have set a target of a net DER of 0.5 or less at the end of FY2021
as a guideline. The financial structure has been steadily improving,as seen at the end of FY2020 by the equity ratio of 42.3% (animprovement of 3.6% from the end of FY2018) and the balance ofinterest-bearing debt of 266.1 billion yen (a reduction of 22.4 billion
yen from the end of FY2018). Moreover, we achieved our net DER
target of 0.5 times or less, ahead of schedule at the end of FY2020.

TAIHEIYO CEMENT REPORT 2020

21

Our Commitment to:
CONTENTS

24 Special Feature 1
Taiheiyo Cement Group Efforts to
Mitigate Climate Change

28 Special Feature 2
Leveraging Our Cement Technology toContribute to a Stable Food Supply and
Preservation of the Water Environment

30 Business Activities
42 Governance
60 The Environment
76 Collaborating with Society
92 GCCA Key Performance Indicators
94 Financial Data
102 Corporate Information and Stock Overview
103 Third-party Opinion

22

TAIHEIYO CEMENT REPORT 2020

Nghi Son Cement Corporation（ Vietnam ）TAIHEIYO CEMENT REPORT 202023

Special Feature 1

Taiheiyo Cement Group Efforts to
Mitigate Climate Change
GRI102-11, 103-2, 201-2, 203-1

Significantly reducing CO2 and other greenhouse gas emissions toward mitigating climate change has been
underway following the adoption of the Paris Agreement at the COP21 in 2015 as a common challenge across theworld. The cement industry, which by-produce not a less amount of CO2 in the course of manufacture, must takeaction. The Taiheiyo Cement Group is developing and introducing technologies to reduce their CO2 emissions froma medium- to long-term perspective in order to mitigate global warming and ensure its sustainable development.

2020

CO₂ Emissions Reduction Roadmap for Achieving Long-term Vision

Formulating a long-term vision

Scenario for Contributing to Avoided CO2 Emissions through the Value Chain
Use/reuse of cement

Development of concrete technology to contribute to CO² reduction/evaluation of the amountof CO² absorbed by cement products

Transportation

Continuously encouraging the introduction of energy-efficient equipment and energy-saving
technologies in the raw materials/products transportation divisions
Promoting measures and products for absorbing CO² such as the conservation of
biodiversity and technology to grow algae

Power generation for cement production  Biomass power generation and waste heat power generation
OthersApplications Scenario (Maximum Application of Existing Technologies)
Energy-derived
Raw material-derived

 romoting the introduction of energy-efficient equipment and increased use ofP
alternative energy sources

 Design of low-CO2 cement within the current standards (e.g., improvement ofclinker and use of admixtures)

CO² Emissions from Cement Production Process

Raw material-derived

Energy-derived

Decarbonation（CaCO3→CaO+CO2）

55%

Taiheiyo Cement’s Countermeasures to
Mitigate Climate Change

The cement industry is estimated to generate CO² emissions
equivalent to about 6% of total man-made greenhouse gas
emissions. Of the CO² produced in the course of cement
manufacture, approximately 45% is derived from the thermalenergy used to heat the raw materials and the consumptionof electricity for cement, and 55% from the decarbonation oflimestone used as raw material during the calcination process.
We must therefore focus on those two areas in order to reduce
CO² produced in the course of cement manufacture.
Since the 1990s we have focused on introducing
energy-efficient equipment to reduce our CO² emissions.
We have also promoted the use of recycled resources
without decarbonation as raw materials and are aggressively

24

TAIHEIYO CEMENT REPORT 2020

45%

Consumption of fossil energy and electricity

CO₂

emissions

responding to the demands of the international community.
We added the CSR Objectives for 2025 to the Medium-Term
Management Plan in 2015, the year the Paris Agreement was
adopted. Included in the objectives is the goal of reducing
greenhouse gas emissions. Having declared our support for
the Task Force on Climate-related Financial Disclosures (TCFD)
in June 2019, we are committed to a strategic implementationof countermeasures to reduce CO² emissions. In addition, we
formulated a framework in July 2019 for our long-range visionof greenhouse gas emissions reduction toward 2050 andpositioned it as a group-wide goal.

Formulating Our Long-term Vision toward 2050
In March 2020 the Taiheiyo Cement Group publisheddetails about its measures stated in its Long-range Vision ofOur long-term vision of greenhouse gas emissions reduction toward 2050*1

80%

20%

Reduced specific net CO2 emissions

Contributing to avoided CO2 emissions

in cement production*²*3

reductionby 2050

through the value chain*4*3

Avoidedemissionsequivalent to2025

CSR Objectives for 2025

CO² emissions
by 2050

2050
Target year

Contribution to Avoidance

Reduce CO²
emissions intensity
by at least:

Reducing CO²
emissions intensity
by at least:

15%

Advance

Advance Scenario (Introduction of New Technologies Currently under Development)

Raw material-derived

20%

Application

10%

Energy-derived

Avoided CO²
emissions:U tilization of low-CO2 energy sources (e.g., natural gas); increased use ofalternative energy sources with the introduction of technologies

Reducing CO²
emissions intensity by at least: Design and development of new low-CO2 cements with associatedrevision of the standards

30%

Innovation Scenario (Introduction of Innovative Technologies that Are Expected to Be Developed)
Energy-derived
Raw material-derived

InnovationU tilization of energy sources manufactured from captured CO2

 Design and development of low-CO2 cements utilizing new materials

Innovative technologies  CO2 capture, utilization and storage applicable for cement production*1 Scope: Taiheiyo Cement Group*2 Specific net CO² emissions: CO² emissions intensity per tonne of cementitious product (kg-CO²/t-cementitious) excluding CO² emissions fromalternatives energy sources.
*3 Specific net CO² emissions related to cement production by Taiheiyo Cement Group in FY 2001 is taken as 100%.
*4 Figure represents cement and cement-based products. As determined by the “Protocol for Accounting and Reporting of Avoided GHG Emissions
through the Value Chain of Cement and Cement-based Products” formulated by Taiheiyo Cement in March 2019.

Greenhouse Gas Emissions Reduction toward 2050. In orderto achieve the goal of an 80% reduction in CO² emissions
by 2050, we need to develop innovative technologies aswell as to advance the application and development ofexisting technologies. To this end, the group formulated three
reduction scenarios for lowering CO² emissions in cement
production. Specifically, we will continue to develop andexpand the technologies we currently own to reduce energyderived and raw materials-derived CO² emissions whilst also
developing and introducing new innovative technologies.
Furthermore, we aim to avoid emissions equivalent to
20% of CO² emissions through the value chain of cement
and cement-related products. These reductions will be in
the areas of use/reuse of cement, power generation for
cement production and transportation, and the reductions

Reducing CO²
emissions
intensity by:

80%

evaluated based on the “Calculation and Reporting Protocol
for Accounting and Reporting of Avoided GHG Emissions
through the Value Chain of Cement and Cement-based
Products” which we formulated in 2019.
In order to realize the Long-term Vision, we must address
challenges such as social acceptance of our businesses andthe development and implementation of new technologies toavoid, capture, utilize and store CO². The associated financial
burden of such technologies will need to be shared as will
the technologies themselves. We have positioned the Longterm Vision as a goal we must achieve, and we will continue
our efforts in light of our future sustainable growth as well aschanges in social systems.

TAIHEIYO CEMENT REPORT 202025

Special Feature 1

The Ofunato Plant

Taiheiyo Cement Group Efforts to Mitigate Climate Change

Launching the Biomass Power Generation Business to Brighten the Future of the Community

Contribution to Avoided CO² Emissions

308
Electric
power
generation

he Ofunato plant, in Ofunato City, Iwate
Prefecture, began producing cement in 1937
as one of the company’s major manufacturing
sites and it has reliably supplied high-quality cement
products since then. It installed a waste heat power
generation system in 1986 and has actively taken
action to save energy. Unfortunately, the plant wassignificantly damaged by the tsunami following theGreat East Japan Earthquake in March 2011. Whileit was able to quickly resume cement production,
including restarting of the waste heat power
generation system, its in-house power generation
system was severely damaged and did not resume
operation. To address this the Ofunato Power
Generation Project Team was set up in 2016.
The Ofunato Biomass Station was constructedon the premises of the Ofunato cement plant overa period of three years and started commercial
operations in January 2020. The power station can
supply all of the electricity required by the plant aswell as for the community. It uses palm kernel shell(PKS) and a small amount of coal as fuels with an
output of 75 MW, making it one of Japan’s largest

VOICE

T

Working Together to Realizea Sustainable Society
Kimiaki Toda

Mayor of Ofunato City

When I learned the Taiheiyo Cement
Ofunato plant would be a biomass
power station using palm kernel shells as fuel I was
deeply impressed with the company’s decision tocarry out an environmentally sound project. I have

26

TAIHEIYO CEMENT REPORT 2020

thousand tonnes/year

520

GWh/year

Equivalent to the electricity
consumption ofordinary
approximately
households

119,000

Company

Ofunato Power Inc.

Total project costs

23.5 billion yen

Capital contribution ratio

65% Taiheiyo Cement, 35% erex Co., Ltd.

Output75 MW

biomass power stations. Annual electric power
generation is approximately 520 GWh, equivalent
to the electricity consumption of around 119,000
ordinary households, and the associated CO²
emissions reduction is 308,000 tonnes/year.
The Ofunato Biomass Power Station isenvironmentally sound. The plant concluded an
Agreement on Environmental Conservation with the
Ofunato City government in 2017, under which it
constrains NOx and SOx emissions to below specified
values. Furthermore, the exhaust chimneys are twice
the height of ordinary facilities to minimize the effectsof the emissions on the surrounding environment.
The design of the power station minimizes its
environmental impacts such as by recycling industrial
water for cooling. In terms of fuel, the small amountof coal currently used will be reduced in the future to
make the plant solely dependent on biomass fuel.
The Taiheiyo Cement Group is working to increase
the use of environmentally sound, renewable energy
through the launch of its biomass power generation
business while also contributing to job creation andthe economic revitalization of the local community.

always believed that the problems associated withclimate change were our responsibility, not those ofsomeone else. With the designation of Ofunato City
as a Future City by the national government, we havebeen working to create a sustainable community
through such efforts as introducing renewableenergy with a focus on solar power. Reducing carbon
emissions is an urgent concern for all humankind,and governments and businesses must cooperate
to address it. We hope Taiheiyo Cement’s biomass
power generation business will serve as a foundation
for creating a prosperous future.

The Saitama Plant

WHR (Waste Heat Recovery) Power Generation System that Help Reduce CO2 Emissions

ince introducing a WHR power generation
system at its Kumagaya plant in Kumagaya City,
Saitama Prefecture in 1982, the company has
installed similar facilities in its other plants in Japan.
These systems generate power by recovering thermalenergy from high-temperature exhaust gas generated
in the cement calcination process and contributesignificantly to the reduction of CO² emissions. In
October 2019 the company decided to install a WHR
power generation facility incorporating a cutting-edge
waste heat recovery boiler at its Saitama plant in Hidaka
City, Saitama Prefecture. This facility is scheduled to
begin operations in September 2022, marking thecompletion of the initiative to install waste heat power
generation systems at all six company plants. The
operation of these facilities is expected to help reduce
CO² emissions by approximately 27,000 tonnes per

S

Reduction in CO² Emissions by Introducing a Waste Heat Power
Generation System at the Saitama Plant■ Power generation by CFB ■ Waste heat power generation(MWh/year)
200,000
150,000
100,000■ CO2 emissions

199,547

199,398

27,253t-CO 2103,288

76,03552,76250,0000(t-CO2/year)

Reduced by

Before introduction

After introduction

200,000
150,000
100,000
50,0000year, and the percentage
of energy generated bywaste heat of the total
power consumption at
all six company’s plants is
estimated to be 18.4%.
In our overseas
operations we completed
the installation of waste
heat generation systems inall our joint ventures plants
in China in 2012. Also,in December 2019 we
made a decision-making
to conduct a feasibility
study to install WHR
power generation at Nghi
Son Cement Corporation,
Vietnam, and we consider WHR power generation system (waste heat boiler on
the kiln preheater system at the Kamiiso plant H-8)
this a first step toward
installing WHR power generation systems at all ourcement plants in North America and South East Asia.
The introduction of WHR power generation systems is
one scenario for contributing to reliable and significant
CO² reductions throughout the entire value chain. We
will complete the installation of these systems in ourplants and continue our efforts to realize our vision for
the future of the cement business.

FOCUS

Promoting the Regional Treatment
of Disaster Waste
Cement plants are contributing to regional restoration by
accepting waste such as the debris generated by natural
disasters. We started to accept disaster waste following the
Chuetsu Earthquake in Niigata Prefecture in 2004. Since thenwe have concluded a comprehensive partnership agreementwith several local governments in areas where our plants arelocated to prepare for future disasters.
In June 2019 we concluded a comprehensive partnershipagreement with the Miyagi prefectural government where
the company does not operate any plants. Taking into
consideration the maximum use of prefectural port facilities
along with additional new routes, more of our plants would
be able to accept disaster waste. Three months after theconclusion of the agreement, typhoon No. 19 made landfallin October 2019 and caused severe damage in the Tohoku

Waste rice straw in Miyagi Prefecture

Waste tatami mats at Higashimatsuyama
City in Saitama Prefecture

region. Under the agreement with the Miyagi prefectural
government, our Ofunato plant accepted a large volume ofwaste rice straw that had been generated immediately after
the harvest and treated 23,000 tonnes by the end of March
2020. Our Saitama and Kumagaya plants also treated materials
such as straw mats and quail droppings that were destined
after use in a digester after drying but had become sodden in
the typhoon. We plan to establish a system for treating disaster
waste regionally by leveraging our plants across Japan as wellas our land and marine transport network.

TAIHEIYO CEMENT REPORT 202027

Special Feature 2

Developing Business in Southeast Asia and China

Leveraging Our Cement Technology toContribute to a Stable Food Supply and
Preservation of the Water Environment
While engaged in the stable supply of cement as a basic material for infrastructure, the Taiheiyo Cement Group has broadened its scope ofbusiness by developing products that capitalize on its cement technology. This project, which started with the water treatment business, has
evolved into the development of overseas markets and new products while also improving our domestic aquaculture technology. Moreover, it has
rapidly grown into a business that contributes to a stable food supply and preservation of the water environment in Southeast Asia and China.

Products Derived from Cement Technology
for Diverse Applications
We are cultivating markets in the aquaculture,
agriculture and livestock sectors for our products that
contribute to solving food and environmental problems
by capitalizing on technologies we have verified in thewater treatment sector. These products help preserve
the water environment, recover the purifying capacity ofApplications

Aquaculture

Agriculture

Livestock

Product NameJapan

CeracleanOverseas

Ceraclean

Japan

Inenica*1

Overseas

SILICANITEJapan

Escariu*2

Overseas

Healthy bed

nature, and ultimately contribute to ensuring a stable
food supply while creating a sustainable society. They
have been sold in Japan and overseas through ourGroup companies. In our overseas operations westarted production in Thailand in 2018 and Indonesia
in 2019. We also conducted demonstration tests forthe products and launched them in Southeast Asia
and China.
Raw Material

Characteristics

Porous fine-grained
calcium silicate•Release of silicates and calcium〔Main Raw Materials〕Cement, limestone, silica•Phosphorus absorption capacity•Ammonia adsorption capacity•Oxygenating•Alkaline•High water absorption capacity•Bacteria-supported

VOICE*1 Inenica is a trademark of Clion Co., Ltd., who developed and distribute this product.
*2 Escariu is a trademark of Clion Co., Ltd., who developed and distribute this product.
Onoda Chemical Industry Co., Ltd. and some other companies are also distributor of this product.

Establishing a Business Scheme
to Address Social Problems
I am from Thailand and have always had a strong interest infood supply and environmental issues in Southeast Asian
countries. Therefore, I am very grateful to have been a partof this project in Japan and to expand the introduction of
Ceraclean to Thailand in 2018 and Indonesia in 2019.
A three-year business viability study started in 2016
with support from the Ministry of the Environment, andthe Ministry of Economy, Trade and Industry has proved

28

TAIHEIYO CEMENT REPORT 2020

Environmental Business
Development Department

Nutchaya Kaewrassamee
the feasibility of Ceraclean’s production
system because of the easy procurement of
raw materials and high potential demand for the product,
which has led us to expand the market in Southeast Asia. I
would like to contribute to solving food and environmental
problems in Southeast Asia and China through theprovision of Ceraclean and by building up our business
scheme as soon as possible.

Effects of the Use of Ceraclean (Laboratory Test)
Under the same conditions

without the use of Ceraclean

Aquaculture

Applying
a localpractice

Stabilizing Water Quality with Ceraclean
and Improving the Productivityof Shrimp Aquaculture
Water Quality Stabilizer “Ceraclean” for Aquaculture
The aquaculture industry is drawing worldwide
attention as a stable source of fishery resources since
global consumption of seafood is increasing withthe changes in food habits due to advances in theinternationalization of food distribution and economic
growth. The production of shrimp and similar resources
is rising due to the high feed conversion ratio (FCR) of 1
to 1.5. On the other hand, in China, the world’s largest
shrimp producer and consumer, the construction of new
aquaculture ponds is restricted due tothe impact on the water environment.
And in Southeast Asia, the production
volume of shrimp is falling as a result of
the degradation of water quality causedby excessively high-density aquaculture.
Verifying the impact of Ceraclean
on aquaculture, in a partnership with
Sorting and preparing to ship
shrimp at an aquaculture farm in
Surat Thani province (Thailand) Tokyo University of Marine Science

Using Ceraclean(60 mg/L/3 days)

Ceracleanused zone1

2.2

Production rate of 60 days after the start of breeding

Applying a local practiceUsing Ceraclean

and Technology and Walailak University (Thailand), we
confirmed that it improved the shrimp survival rate. It
is thought that stable water quality and the increase ofphytoplankton that is non-toxic and serves as shrimp
food are attributable to the absorption of phosphorus
and release of silicic acid, which are characteristicfeatures of Ceraclean. It is already being used at shrimp
farms in Taiwan, Thailand and Vietnam.

Marketing Products with a Focus on Water Purification
Environmental Improvement of
Mudflats and Lakes

Improving the Landscape ofa Golf Course Pond

Water Purification
at a Carp Farm

A healthy mudflat is restored by applying Ceraclean tothe bottom sediment, where there are fewer fish andshellfish due to deterioration of the water environment
in relation to that sediment. In FY2018 the effect of thistechnology on improving that mudflat environment
was confirmed by the Environmental Technology
Verification (ETV) Program, sponsored by the Ministryof the Environment.

Spraying Ceraclean Golf in an artificial
pond at a golf course in an enclosed
environment can fix the level ofphosphorus in the water and curb theaccumulation of sludge as well as thegrowth of blue-green algae, which
releases odor. The use of the productmade it easy to manage the pond of agolf course, around which the beautiful
landscape is valued highly.

Koimizu prevents the accumulation ofresidual feed and excrement, keeps
the water clear and suppresses bothodor and a decrease in food intake. It isalready widely used in Japanese carp
(Cyprinus carpio) production areas suchas Niigata, Hiroshima and Okayama
Prefectures. The product is highly valued
because it makes easier the breeding ofcarp and control of water quality.

Product used: Ceraclean

Product used: Ceraclean Golf

閉鎖性海域における水環境改善技術分野

実証番号

Obtained ETV markcertification

090-1701

第三者機関が実証した 実証年度
H29
性能を公開しています

www.env.go.jp/policy/etv

Agriculture

Product used: 恋水 こいみず (Koimizu)

Livestock

Increasing Rice Production Capacity
in Southeast Asia

Keeping Livestock Healthy
by Improving Their Bedding Environment

SILICANITE releases silicic acid in the soil. As rice absorbs silicic acid, it generates silicified cells, which strengthen the plant. These characteristics giveresistance to rice against pests, diseases, heat and strong winds, thereby contributing to a higher yield of high-quality rice. Major demand for the productis expected in Southeast Asia, where rice production is seriously affected byrice blast. We selected Vietnam, Malaysia and Indonesia for the promotion ofa wider use of the product, and we are presenting
it to the relevant ministries and agencies in thosecountries while applying for its registration as afertilizer. Major demand for the product is expectedin Southeast Asia, where rice production is seriously
affected by rice blast. We selected Vietnam, Malaysia and Indonesia for the promotion of a wider
use of the product, and we are presenting it to therelevant ministries and agencies in those countries
while applying for its registration as a fertilizer.

Demand for dairy products has recently been growing inSoutheast Asian countries along with the developmentof their economies. The low productivity of raw milkrequires the region to import it from Australia and othercountries. Improving productivity will require reducing
cow stress and preventing the occurrence of mastitis,which in turn depends on sanitary breeding conditions.
The use of Healthy bed enables dairy farmers to maintaindry, low-alkaline bedding while suppressing the growthof pathogens and ammonia odor.
Given that demand for raw milk
is expected to grow in Southeast
Asia and China, we will conductlocal demonstration tests of the
product toward quickly achieving
The use of Healthy bed in ancommercialization.

Siliceous Fertilizer “SILICANITE ”

Field test of rice

“Healthy bed” Sanitary Material for Dairy Farms

cattle shed

TAIHEIYO CEMENT REPORT 202029

Business Activities

Cement Business (Japan)

GRI102-6, 15

Our cement business engages in the manufacture and sales of cement and ready-mixed concrete.
Both are essential construction materials for infrastructure development such as high-rise buildings,
housing, roads, airports and ports. We also manufacture and sell special cements, blended cements andsoil stabilizers for a diverse range of applications.

Yukimasa Nakano
Managing Executive Officer &Senior General Manager of
Cement Business Division

Net Sales and Operating Income(Billion yen)

Net sales

Net sales

415.1

28.5

Operating income

29.5

25.5

billion yen

down 19.7 billion yen from the previous year

21.4

14.9

392.7

385.0

408.5

434.8

415.1

2016

2017

2018

2019

2020 (FY)Operating income

14.9

billion yen

down 6.4 billion yen from the previous year

Achieving Sustainable Growth with
Our Solid Supply Infrastructure andImproved Customer Satisfaction
In our cement business in Japan we stably
supply our products to users throughour solid foundation in manufacturing,transportation and supply chains, which
includes 9 cement plants, 106 service
stations and 36 cement tankers. In the future,
as measures for national resilience are
implemented, a larger number of projects
will adopt diversified construction methods
and call for soil stabilizers and specialty
cement such as medium-heat cement. We
will therefore further enhance our logistics
network to meet these demands.
To support our customers we organize
our user societies by business sector suchas ready-mixed and concrete productmanufacturers. We provide them withtechnical services based on knowledge
acquired by the group’s technical and R&D
divisions. Along with our stable supply andhigh product quality we believe our enhanced
technical services are one of the main reason
for users to select our products. Thus, we will
strengthen initiatives such as the activities
of user societies to improve customer
satisfaction.

30

TAIHEIYO CEMENT REPORT 2020

Results of Operations andPrincipal Initiatives for FY2020
Both public and private sector demand for cement in Japandeclined in FY2020 following the completion of preparations
for the Tokyo Olympics and Paralympics, and also thereconstruction projects in the areas affected by the Great
East Japan Earthquake. Furthermore, extended construction
periods due to labor shortages at construction sites acrossJapan has had an impact. As a result, the group’s domestic
cement sales by volume, including sales in conjunction
with toll-manufacturing agreements, fell by 5% to 14.47
million tonnes year-on-year. As a result, net sales for FY2020
declined by 19.7 billion yen to 415.1 billion yen year-onyear. Operating income for FY2020 dropped by 6.4 billion
yen to 14.9 billion yen year-on-year due to the decrease insales volume and an increase in fixed expense such as repair
expense.
Under such a business environment, we were able
to reach agreements to revise prices with around 80%
of our customers. We started supplying cement to
Hitachi Cement Co., Ltd. based on a toll-manufacturingagreement with the company in April 2019. In addition,
we duly responded to regulations on sulfur oxide(SOx) contained in fuel for cement tankers, which were
enforced in January 2020. With regard to major capital
investments for plants, we installed a bag filter system
and a high-efficiency cooler to No.5 kiln at Oita Plant.
We also expanded the chloride bypassing capacity for
the No. 6 kiln and installed a facility to accept biomass
ash at the Kamiiso plant.

▶Stable provision of cement products

Major Business Sites (Japan)
Hokkaido Branch

Myojo Cement Co., Ltd.

Kamiiso Plant

Chubu Hokuriku Branch

Kumagaya
Plant

Chugoku Branch
Kyushu Branch▶Efforts to mitigate and adapt to climate change▶Further contribution to recycling-oriented society▶Technological development to reduce

environmental impacts▶Addressing the reinforcement of environmental

Kanto Branch

Kansai Shikoku Branch

regulations

Ofunato Plant
Tohoku Branch

Headquarters/Tokyo BranchCentral Research Laboratory
Fujiwara Plant

Address
Social Issues

Tsuruga Cement Co., Ltd.

Oita Plant

Efforts to

Saitama Plant

Closely
Related SDGs

DC Co., Ltd.

Risks and Opportunities in
Our Business Environment

Risks
Opportunities

Decline in domestic demand due to declining birth rates
and an aging population
New demand created by a commitment to national
resilience and development of advanced infrastructure

Reinforcement of regulations on GHG emissions

Risks
Opportunities

Development of innovative technology for utilizing CO2• Strengthen profitability by quickly realizing fair prices
and thoroughly cutting costs•Contribute to national and other projects bystrengthening and expanding our capacity for reliably
supplying products•Actively pursue measures toward mitigating climatechangeKey Strategies for FY2021

Outlook for FY2021

1. SalesFollowing the state of emergency declared by thegovernment to prevent the spread of COVID-19, many
ministry-controlled infrastructure construction projects under
the Ministry of Land, Infrastructure, Transport and Tourism,
and private investment projects by major contractors andothers, have been suspended or delayed. Under suchdifficult circumstances we will strive to maximize profits while
reducing costs by implementing the key strategies shownon the right. We plan to achieve net sales of 397.0 billion yen(down 18.1 billion yen year-on-year) and operating incomeof 13.0 billion yen (down 1.9 billion yen year-on-year).

MESSAGEBusiness Strategies for
the Cement Business (Japan) Basedon the 20 Medium-Term Management Plan

•Continue price negotiations; respond to increasing costs•Maintain a stable supply of special cement (low-heat, moderate-heatand blended cement)

2. Ready-mixed concrete• E stablish a production system best suited for regional cement demand•Improve recognition of high-strength concrete and concrete
pavements to encourage wider use

3. Concrete products• S upport an improvement in the workability of precast products in enhanced
collaboration with our construction materials business and R&D divisions

4. Acquire more large-project orders•Provide total solutions that integrate other businesses and the productsof other group companies

5. Develop the soil stabilizers business•Improve the supply system; reinforce the transport system

Making Every Effort to Reduce CO² Emissions andAchieve Eradication of Occupational Accidents
We are actively addressing the
key challenges of reducing CO2
emissions and achieving zerowork-related accidents in cement
manufacturing.
To reduce CO2 emissions, we will work on using
less fossil energy by doubling the annual amount ofwaste plastic used from 200,000 tonnes by the middleof the 2020s, based on the CSR Objectives for 2025 thatthe group formulated in 2015. We will both maintainthe stable operation of kilns and save energy by fully
operating an AI-enabled operating support system by
FY2021. Moreover, we decided to install a WHR power

Yoshiyuki Uenoyama

Managing Executive Officer, Overseeing
Production Department and Maintenance &Engineering Department

generation system at the Saitama plant, the only one of
our six directly managed plants not equipped with thesystem. Installation work is scheduled for completion in
2022.
Every employee must fully comply with safety rules
to eradicate occupational accidents. The group achieved
zero fatalities over two consecutive years, FY2019 and2020, although we still had a number of occupational
accidents with no leave of absence. We will strengthen
measures to improve the situation. To create a safe
workplace for our employees we will also take action toprevent heatstroke and COVID-19 infection.

TAIHEIYO CEMENT REPORT 202031

Business Activities

Main Business Sites (Overseas)

Cement Business (Overseas)

TAIHEIYO CEMENT (CHINA)INVESTMENTGRI102-6, 15

Hong Kong

Overseas, we manufacture and sell cement products from nine plants in the Pacific Rim: three inthe U.S. West Coast, three in China (including Qinhuangdao Asano Cement Co., Ltd., which was
excluded from the consolidation after the Group had transferred all equity interests of the company
in September 2020), and one each in Vietnam, the Philippines and Papua New Guinea. In addition toexporting product from Japan we also conduct a variety of trading activities, including trilateral trade.

Yoshifumi TauraManaging Executive Officer
Senior General Manager ofInternational Business
Division

Bangkok

Qinhuangdao
DalianNanjing

Hanoi

Shanghai

Nghi Son

Ho Chi Minh
Singapore

TaipeiTaichung
Kaohsiung

Cebu
Nha Trang

TAIHEIYO SINGAPORE
Jakarta

Net Sales and Operating Income
Net sales

21.3

Net salesbillion yen

up 1.6 billion yen year-on-year

Operating income

9.3

6.1
182.0

173.8

2016

2017

(Billion yen)

20.3

21.5

203.4

211.6

213.2

2018

2019

2020 (FY)15.1

Operating income

21.5

billion yen

up 1.2 billion yen year-on-year

Providing Environmental Solutions
as Our Added Value
Ensuring the stable supply of products andmeeting quality requirements unique tothe region are prerequisites for providing
customers with solutions as a cementcompany.
We will focus on providing
environmental solutions as our added
value. Various initiatives for reducing
CO2 emissions are being implemented in
California in the U.S. We have promoted
the use of natural gas as a fuel for concrete
mixer trucks while increasing the use ofnatural gas as kiln fuel, enabling us to reduce
environmental impact at a minimum cost. In
Dalian, our contribution to the community
through the efficient treatment of sewage
sludge was recognized by the government,
thereby allowing us to continue operations.
We will also provide environmental
solutions for municipal waste and sewage
sludge to countries in Southeast Asia andother regions by properly combining
existing and new technologies. We
believe this is a time when our continued
contributions to solving environmental
issues are highly valued, even if each alone
is relatively small in countries that face thechallenge of improving their environments.

32

Results of Operations andPrincipal Initiatives for FY2020
In the U.S., prices increased despite minimal growthin shipment volume for both cement and ready-mixed
concrete, which was partly due to bad weather on
the West Coast. In China the market held solid due toimproved supply and demand conditions as a resultof the government’s policy to curb cement production
nationwide. In Vietnam our business was affected by theentry of a new manufacturer. In the Philippines the level ofdemand and market conditions stayed the same as in theprevious year mainly due to the temporary suspension ofand delays to public investments during the campaigning
for the unified regional and national elections. As a result,net sales for FY2020 were 213.2 billion yen (up 1.6 billion
yen year-on-year) and operating income for the year was
21.5 billion yen (up 1.2 billion yen year-on-year).
Given this business environment, in the U.S. wecompleted the construction of a finish mill at the Oro
Grande plant. In the Philippines we are constructing abelt conveyor system that links the port and the plant,
and in Vietnam we established a local subsidiaryto handle products related to resources and theenvironment.

Outlook for FY2021
The spread of COVID-19 has affected our business in the
U.S., China, Vietnam and the Philippines to varying extents
by region. Under these circumstances we will strive to

TAIHEIYO CEMENT REPORT 2020

Lae

Anchorage

SeattleStockton
Los Angeles▶Contribution to infrastructure improvement

PortlandMojaveEfforts to

Las Vegas

Address
Social Issues

Oro Grande▶Efforts to mitigate and adapt to climatechange▶Contribution to creating recycling-oriented

society▶Addressing the reinforcement of

TAIHEIYO CEMENT U.S.A.

environmental regulations

San Diego

Rillito● Holding company◆ Cement plant◆ Clinker grinding plant▲ Representative office▲ Distribution terminal

Closely
Related SDGs

Risks and Opportunities in
Our Business Environment

Risks
Opportunities

Reinforcement of environmental regulations in the
countries where we operate
Contributing to the creation of a recycling-oriented society
in the countries where we operate

Risks

Climate change in the countries where we operate

Opportunities

Providing innovative technologies for utilizing CO2

MESSAGEearn profits based on key strategies, shown on the right,
while reducing costs and properly responding to theenvironmental regulations in each region.
We plan to achieve net sales of 213.0 billion yen
for FY2021 (down 0.2 billion yen year-on-year) andoperating income of 20 billion yen for the year (down 1.5
billion yen year-on-year). In April 2020 we concluded abasic agreement on a capital and business alliance withan Indonesian company, PT Semen Indonesia, that willallow us to expand our business area. We will explore thepossibility of collaborating with the company in areas suchas cement exports as well as the resources, environmental
and construction materials businesses. Our representative
office was set up in Jakarta, the capital of Indonesia, tocollect information and support our business.

Business Strategies for
the Cement Business (Overseas) Basedon the 20 Medium-Term Management Plan
• Expand our strategic business domain in the Pacific
Rim regions•Establish a brand image that expresses our quality,
technology and environment-oriented values,
thereby further reinforcing our regional presence

Key Strategies for FY2021

1. Boost earnings capacity of businesses(1) U.S. •  Promote investments to increase production capacity andmaximize the production volume of clinker and cement•Improve the operating rate of cement plants through aneffective equipment maintenance system(2) China • Improve the utilization rate by properly responding toenvironmental regulations
•Promote the environmental business(3) Vietnam • Enhance logistics sites to address a shift toward highend markets
•Improve profit margins by offering a broader
selection of products(4) The Philippines • Boost supply capacity capacity•Accelerate efforts to stabilize production
process and reduce costs

2. Expand and increase the sophistication of the trading business• Develop markets for our high value-added products; enhanceshipping bases•Strengthen trading of cementitious materials

3. Expand the regions where we operate•Expand business in Indonesia

Making Full Use of Our Global Network of Plants
by Mutually Introducing Domestic Environmental
Technologies and New Technologies Overseas
Overseas operations representa group strength that we mustfully capitalize on in applying
environmental technologies
developed in our cement plants.
We are providing environmental technologies that wehave developed in Japan to our overseas plants. On thesame token, some of our overseas plants have taken thelead in introducing advanced technologies to satisfy
stricter environmental regulations. We will introduce thosetechnologies into our domestic plants as appropriate.
For instance, our domestic plants are introducing a NOx

Yoshiyuki Uenoyama

Managing Executive Officer, Overseeing
Production Department and Maintenance &Engineering Department

reduction technology used in China and another for
preventing the discharge of mercury used in the U.S. Other
innovative environmental technologies will be introduced
into our plants in Japan as soon as they are applicable.
In our plants in Japan we are accelerating the use ofalternative raw materials and thermal energy by applying
a technology for recycling waste containing highconcentration chlorine. We will also see a shift toward a
recycling-oriented society in emerging markets, for whichgroup technologies will be significantly beneficial to users,
and we will continue to expand them into our global
operations.

TAIHEIYO CEMENT REPORT 202033

Business Activities

Mineral Resources Business

GRI102-6, 15

We own quarries across Japan and supply abundant, high-quality limestone as a raw material for cement.
We also sell them for a variety of industries such as construction, civil engineering, steelmaking andchemicals. In addition, we also sell high value-added products made from inorganic minerals and operatea business for the treatment of contaminated soil.

Kunihiro Ando

Director & Senior Managing
Executive Officer
Mineral Resources Business
Department

Net Sales and Operating Income(Billion yen)

Net sales

80.1

Net salesbillion yen

down 4.1 billion yen year-on-year

8.1
93.5

Operating income

7.7

8.0

8.2

7.1

80.1

81.4

84.2

80.1

2017

2018

2019

2020 (FY)Operating income

7.1

billion yen

down 1.0 billion yen year-on-year

Achieving Sustainable Growth through theFull Use and Appropriate Development ofGroup Mineral Resources
Limestone is one of the few mineral resources inwhich Japan is self-sufficient; however, ongoing
quarry development is becoming increasingly
difficult. The aggregates and mineral products
businesses, our division’s core businesses, largely
rely on the mineral resources that the group owns
so we are therefore developing quarries with along-term perspective.
The characteristics and quality of every
mineral varies by quarry so we need to establish
an optimum supply system for the most effective
use of resources. To ensure stable supply, we are
strategically implementing capital investments
to establish a smarter and more flexible logistics
system.
The geo-solutions business significantly
contributes to society through the sales of theheavy metal immobilizer focusing on large
infrastructure projects and the treatment ofconstruction soil and surplus soil. In view of this we
will strive to ensure the stable operations of thisbusiness.
Our growth strategy will remain centeredon expanding the overseas mineral resourcesbusiness and achieving the early commercializationof the functional materials business. We will
also continue to maximize earnings and achievesustainable growth through business operations
in collaboration with the production and sales
divisions in cooperation with group companies.

34

TAIHEIYO CEMENT REPORT 2020

2016

Results of Operations andPrincipal Initiatives for FY2020
The sales of limestone aggregates for ready-mixed
concrete declined in FY2020 due to the end in demand
related to preparations for the Tokyo Olympics andParalympics and restoration projects in the areas affectedby the Great East Japan Earthquake. Limestone sales forthe domestic steel industry were also sluggish, due to a
reduction in the domestic production volume of steel. Our
geo-solutions business steadily achieved the target salesof the heavy metal immobilizer for highway construction
projects in the Greater Tokyo Area. As a result, net sales
for the business in FY2020 were 80.1 billion yen (down 4.1
billion year-on-year) and operating income was 7.1 billion
yen (down 1.0 billion yen year-on-year).
Under such a business environment we are
expanding production equipment for crushed limestonesand at the Shin-Tsukumi Quarry of Tsukumi City in Oita
Prefecture. Additionally, we are conducting environmental
assessments for the development quarry site for cement
raw materials at the Yato area of Shin-Tsukumi Quarry. In
the field of functional hollow particles, we began a trial
mass production of CellSpheres, which are expected toincreasingly be used for paints and electronic devices.
This was conducted in the demonstration plant we had
installed at the group company Chichibu Taiheiyo Cement
Corporation. In overseas operations, we establisheda subsidiary in Vietnam and started to handle mineral
resource products.

Efforts toAddress
Social Issues▶Stable provision of mineral products▶Further contributions to a recycling-oriented society▶Provision of environmentally friendly

products

Closely
Related SDGs

Risks and Opportunities in
Our Business Environment

Risks
Opportunities

Quarries subject to large-scale natural disasters associatedwith climate change
Reinforcing our supply chain, leveraging our abundant
mineral resources from quarries

Risks

Triggering the deterioration of concrete by alkaliaggregate reaction

Opportunities

Developing more sophisticated mining technology

Business Strategies for
the Mineral Resources Business basedon the 20 Medium-Term Management Plan
• Establish a robust system for ensuring the stablesupply of resources•Take full advantage of the group’s abundantresources to boost the profitability of our businesses•Focus on developing future-oriented businesses aswell as creating an overseas resource business

Outlook for FY2021
We expect ongoing projects at construction sites acrossJapan to be temporarily suspended in response to the spreadof COVID-19. Due partly to this, the sales volume of ourlimestone aggregates for ready-mixed concrete will decline
in FY2021. In the mineral products business, we expect a
decline in sales volume given the projected reduction in
the production volume of crude steel. Despite this severe
environment, we will strive to maximize earnings based on
the following key strategies while strengthening collaboration
with group companies and driving cost reductions. We planto achieve net sales of 78.0 billion yen for FY2021 (down 2.1
billion yen year-on-year) and operating income of 6.0 billion
yen for the year (down 1.1 billion yen year-on-year).

Development of a Next-generation Quarry Site at the Ofunato Quarry
The Ofunato Quarry is providing limestone to the Ofunato plant and is developing
the Horoshi area for its next-generation operations toward the start of quarrying
in 2021. Its limestone deposits amount to around 250 million tonnes, equivalent
to more than 100 years of limestone consumption as a raw material for cement in
Ofunato. The new site also includes a deposit of crystalline limestone, used in paper
manufacturing, and is expected to become a new shipment base for the product.

Key Strategies for FY2021

1. Maximize profits from core businesses
Aggregates • Reinforce the supply and sales system for limestoneaggregates in the Greater Tokyo Areabusiness• Establish the Taiheiyo-Brand Sand business in the Tokyo
Bay area• Establish the optimal limestone supply system for
Mineralsteelmaking
products• Improve the profitability of the crystalline limestonebusinessbusiness and strategically expand sales, including
exploring the possibility of quarrying crystalline
limestone at the Horoshi area of the Ofunato QuarryGeo-solutions • F urther develop the heavy metal immobilizer andconstruction soil business by promoting their specification
businessand utilization in large scale construction project

2. Formulate and implement a growth strategy• To secure stable income sources for the limestone business in Vietnam, we
will formulate and implement growth investments in Southeast Asia
• Early commercialization of ultra high-purity silicon carbide and functional
hollow particles, including the establishment of low-cost, mass production
technology; development of new customers

Aggregates Yard for the Greater Tokyo Area
Concrete made with limestone aggregates is less susceptible to alkali-aggregate reactionand exhibits low drying and self shrinkage, thereby helping to prevent cracks. Demandis therefore rising for limestone aggregates, particularly in the Greater Tokyo Area where
there are many high-rise buildings. We operate an aggregates yard with a storage
capacity of 230,000 tonnes, the largest in the Greater Tokyo Area in Sodegaura City, Chiba
Prefecture to ensure the stable supply of aggregates.

TAIHEIYO CEMENT REPORT 202035

Business Activities

Environmental Business

GRI102-6, 15

In the Environmental Business we are contributing to the realization of a recycling-oriented society
by recycling waste and by-products generated at thermal power stations, steelmakers and chemicals
manufacturers, as well as municipal waste incineration ash and sewage sludge at the request ofmunicipalities, capitalizing on the diverse environmental technologies we have cultivated in cement
production. We also engage in the aquatics business by supplying water purification materials.

Kunihiro Ando

Director & Senior Managing
Executive Officer
Environmental Business
Development Department

Net Sales and Operating Income(Billion yen)

Net sales

84.4

Net salesbillion yen

down 8.2 billion yen year-on-year

Operating income

7.6

7.6

73.4

77.9

2016

2017

7.4

6.6

90.2

92.6

2018

2019

7.7
84.4

Operating income

7.7

billion yen

up 1.0 billion yen year-on-year

Aiming to Achieve Sustainable Growthand Contribute to Society by Maximizing
the Earnings Capacity of Our Businesses
and Commercializing New Technologies
We have established and operate our recycledwaste-to-cement system to treat a large volume
of industrial waste and by-products as wellas municipal waste, and reusing the recycled
waste for cement production. We have striven
to create and expand a recycling-oriented
society through this system. Efforts to reducegreenhouse gas emissions have recently been
accelerating across the world. Taking action toaddress this is becoming vital for every industry.
The Taiheiyo Cement Group formulated its
long-term vision for reducing greenhouse gas
emissions by 80% by 2050. Our efforts in theEnvironmental Business include increasing theuse of alternative fuels. We are also focusing on
establishing technologies to recycle discarded
lithium-ion batteries and for the recycling andrecovery of materials using low-temperatureembrittlement technology, as well as conducting
R&D for the recovery of precious metals andphosphorus from municipal waste incinerationash.
We plan to continue developing theenvironmental business by making progressin these new fields and building up the new
businesses to the same level as our current
e-materials and recycling businesses.

36

TAIHEIYO CEMENT REPORT 2020

2020 (FY)

Results of Operations andPrincipal Initiatives for FY2020
The volume of waste plastic treated increased following
stricter restrictions by China and Southeast Asia on theimport of waste plastic. In addition, more disaster waste
was treated such as straw mats and rice straw generated
by tropical cyclones such as Typhoon No.19. Sales ofbiomass fuel also rose as the Ofunato Biomass Power
Station started operation. The operation of coal-fired
power stations in Japan has declined due to a global shift
toward a low-carbon society, resulting in a drop in theavailability of coal ash, the mainstay of our environmental
business. Sales of calcium carbonate for scrubbing
systems at power stations declined proportionally, as did
the trade in by-product gypsum. As a result, net sales forthe business in FY2020 was 84.4 billion yen (down 8.2
billion yen year-on-year), although operating income was
7.7 billion yen (up 1.0 billion yen year-on-year).
Given this business environment, we introduced
an ash washing system for cleaning municipal waste
incineration bottom ash to allow its use in cement
production at the Kumagaya plant. We also launched
our container liner service (Tokyo–Hakodate) to transport
waste plastic to the Kamiiso plant.
In addition, we concluded a comprehensive
partnership agreement with the Miyagi prefectural
government and launched the regional treatment ofdisaster waste such as waste rice straw generated by
Typhoon No. 19 and other disasters.

▶Further contributions to a recycling-

Efforts toAddress
Social Issues

oriented society▶Establish a new model for recycling

resources▶Provision of environmentally friendly

products and solutions

Closely
Related SDGs

Risks and Opportunities in
Our Business Environment

Risks
Opportunities

Risks
Opportunities

Changes in environmental regulations in countries to which
we export waste
Growing use of blended cement in Southeast Asia andother regions
Decline in the volume of coal ash generated due to fewer
coal-fired power stations in operation
Development and deployment of technologies to use
alternative by-products

Business Strategies for
the Environmental Business basedon the 20 Medium-Term Management Plan
• Maximize the earnings capacity of our businesses
while constructing a new business model bydeveloping advanced technology•Contribute to creating a new recycling system forunutilized resources

Outlook for FY2021
We expect demand for waste plastic treatment inJapan will remain high. The treatment of disaster waste
generated by the typhoons in 2019 will also accelerate.
Given formal enforcement of the Paris Agreement thisyear the volume of our business related to coal-fired
power stations, such as the treatment of coal ash, our corebusiness, will continue to decline in FY2021. Moreover,steelmakers are being forced to reduce production
volume due to the spread of COVID-19. Thus, the volume
of our business with steelmakers, such as the acceptanceof blast furnace slag, is also likely to drop. Despite thisdifficult business environment we hope to maximize
earnings based on the following key strategies while
reducing costs. We plan for 85.0 billion yen in net sales
for FY2021 (up 0.6 billion yen year-on-year) and operating
income of 6.0 billion yen for the year (down 1.7 billion yen
year-on-year).

A resource complex initiative
All of the waste and by-products treated at our cement plants is recycled to
manufacture cement. We proposed the Materials Recovery Complex initiative, underwhich each of the various industries such as non-ferrous metal, scrap smelting,chemicals and recycling sells to others the waste materials that it does not reuse
and purchases waste materials from other industries that it can recycle. We are now
working with the government and academia to establish a working complex model.

Key Strategies for FY2021

1. Accept a larger volume of waste plastic• Reinforce capital investments and transport routes to ensure theacceptance of a larger volume of waste plastic at our major plants

2. Appropriate treatment of disaster waste
3. E stablish a new model for recycling resources througha resource complex initiative in which the cement
industry plays a central role
4. E
 stablish a new business model through the developmentof advanced technologies such as low-temperatureembrittlement

Lithium-ion Battery Recycling
As large lithium-ion batteries become more widely used for electric vehicles andother purposes, we will soon face the challenge of treating a large quantity of endof-life lithium-ion batteries. We jointly established a technology to recycle largesized lithium-ion batteries with Matsuda Sangyo Co., Ltd., leveraging the cement
production process, and launched the lithium-ion batteries recycling business in
April 2020.

TAIHEIYO CEMENT REPORT 2020

37

Business Activities

Construction Materials Business

GRI102-6, 15

We manufacture and sell a wide range of materials that are essential for construction through our extensive network
encompassing all of Japan. We also manufacture and sell various cement-related products such as high-performance
premix products, concrete admixture, and concrete products such as autoclaved lightweight concrete (ALC) panels
and paving blocks. In addition, we engage in ground improvement and other civil engineering projects. Thesebusinesses enable us to address diverse customer needs expeditiously and effectively.

Katsuhide FukuharaManaging Executive Officer
Construction Materials
Business Department

Net Sales and Operating Income(Billion yen)

Net sales

81.3

Net salesbillion yen

down 0.8 billion yen year-on-year

6.1
80.8

Operating income

6.1

6.0

4.7

4.9

4.5

74.0

77.0

82.1

81.3

2017

2018

2019

2020 (FY)

80.8

6.0

74.

Operating income

4.5

billion yen

down 0.4 billion yen year-on-year

Enhancing Our Earning Bases by
Developing New Business Domains
such as Southeast Asia and Promoting
Labor Savings
As part of our efforts to develop new businessdomains we established a local subsidiary in
Vietnam to engage in ground improvement
projects, and we are focusing on taking orders
for large projects such as subway construction
to achieve the vision of expanding business
operations to new horizons overseas assymbolized by our corporate logo. We also
recruit local employees in Myanmar and Vietnam
where we operate representative offices, andprovide on-the-job training for them in Japan.
In response to the need to save laborat construction sites and concrete products
manufacturing plants, we developed a dry
spraying method for repair materials andintroduced truck-mounted mixers for supplying
materials at road repair sites. To ensure thestable supply of products, we have carefully
identified manufacturing sites and products tofocus on, while also promoting collaboration
with other companies on a toll-manufacturingbasis and by other means.
Governance is a prerequisite andfoundation for our business operations. We
call the representatives of companies that our
department oversees and hold a president’s
meeting to discuss business performance as wellas risk management and compliance.

38

TAIHEIYO CEMENT REPORT 2020

2016

Results of Operations andPrincipal Initiatives for FY2020
Sales of construction materials and buiding exterior
construction materials increased due partly to theprogress of urban redevelopment projects related to The
Tokyo Olympics and Paralympics. Sales of autoclaved
lightweight concrete (ALC), however, declined due to
weak demand. The start of some ground improvement
projects were delayed and, as a result, the department’s
net sales were 81.3 billion (down 0.8 billion yen year-onyear) and operating income was 4.5 billion yen (down 0.4
billion yen year-on-year).
In the Construction Material Business we havefocused on making capital investments and developing
new construction methods to save labor at construction
and manufacturing sites in accordance with priorities ofthe 20 Medium-Term Management Plan. For instance, we
are working on visualizing the state of underground work
using information and communications technology (ICT)in carrying out ground improvement work. We are also
developing material technologies for pre-cast concrete
products to improve productivity at construction sites,
and implementing countermeasures for the deteriorationof production facilities and reducing environmental
impacts to enhance the foundation of our businesses.
To deal with a significant increase in the volume of
construction work for national projects such as the TokyoGaikan Expressway and the Chuo Shinkansen, we are
fully prepared to provide related products, materials andservices such as the deployment of engineers.

(FY)

2016

201

Efforts toAddress
Social Issues▶Provision of environmentally friendly

products and technical services▶Provision of labor-saving products

Closely
Related SDGs

Risks and Opportunities in
Our Business Environment

Risks
Opportunities

Risks
Opportunities

Business Strategies for
the Construction Materials Business basedon the 20 Medium-Term Management Plan

A shrinking domestic construction market due to a
declining population
Expanding into new business domains such as overseas
markets• Establish a sustainable business foundation capableof adapting to changes in the business environmentand strengthen the competitiveness and financial
structure of our businesses

Decline in the competitiveness of our businesses•Cultivate new earnings sources in growth fields andmaximize synergies between our businesses

Providing competitive, high value-added products andtechnologies

Outlook for FY2021
FY2021 is the final year of the 20 Medium-Term
Management Plan. Many construction projects are being
suspended or delayed due to the COVID-19 pandemic
and the Construction Materials Business is expected toremain stagnant during the year.
Under these circumstances we will pursue three pillar
strategies in FY2021: 1. Labor savings in all aspects of ourbusiness activities, 2. Enhancing the earnings bases of ourexisting businesses, and 3. Accelerating development of
new businesses in growth areas.
We plan to achieve net sales of 80.0 billion yen for
FY2021 (down 1.3 billion yen year-on-year) and operating
income of 4.0 billion yen for the year (down 0.5 billion yen
year-on-year).

Ground Improvement Project by Barge (Onoda Chemico Co., Ltd.)In the Tokyo Metropolitan Area ground improvement projects are underway toreinforce river banks and prevent liquefaction in preparation for future inland
earthquakes. We can now obtain the necessary information on site conditions in realtime from excavators equipped with an advanced work progress control unit andconsequently expect improvements in the quality of construction work.

Key Strategies for FY2021

1. Achieve labor savings in all aspects of our business activities•Develop and bring to market products and services that provide
solutions that address construction site needs•Enhance the provision of products to pre-cast concrete manufacturers

2. Enhance the earnings bases of our existing businesses•Promote labour saving by reviewing how well our manufacturing sites
leverage toll-manufacturing and the shared delivery of products inlogistics operations•Improve deteriorating production facilities

3. Accelerate development of new businesses in growthareas•Respond appropriately to the demand for the maintenance and repair of
infrastructure equipment•Enhance business operations in overseas markets with a focus on
Southeast Asia

Diverse Pre-cast Concrete Products
A variety of admixtures are being used to improve the performance of precast concrete products. High early strength expansive additive Taiheiyo N-EX
(manufactured and sold by Taiheiyo Materials Corporation) prevents the concrete fromcracking and makes it strengthen faster. It also reduces the need for steam curing in
concrete products manufacture.

TAIHEIYO CEMENT REPORT 2020

39

Business Activities

Research and Development

Closely Related SDGs

GRI102-15

Our research and development activities provide the technological support
for high product quality and ensures that the company contributes toprotecting the global environment through new technologies for resource
conservation and CO2 emissions reduction.

Takayoshi Okamura

Changes in R&D Expenses

Managing Executive Officer
Intellectual Property
Department and Central
Research Laboratory

研究開発

4.2

R&D expenses

4.4(Billion yen)

4.5

4.4

4.3

4.4

2017

2018

2019

2020 (FY)billion yen

up 120 million yen year-on-year

2016

Creating the Future by Developing
Carbon Recycling Technology

Number of Newly Registered andCurrent Domestic Patents

The number of new domestic patents registered by the
The R&D division supports our businessCompany has recently increased with a total of 160 new
divisions by maintaining and improving
1. 保有特許件数
patents registered in FY2020. As a result, the Company
product quality, and developing
currently owns 1,235 patents. The number of patents fortechnologies for reducing manufacturing
Environmental and Mineral Resources has particularly
costs. It also develops new materials andgrown.
technologies that will lead to the growth of
the Group.
Number of Domestic Patents Non-consolidated
The shift toward a low-carbon society is
Number of newly registered patents Number of patents(Patents)
accelerating. People now expect businesses to
1,500
go “carbon neutral” and even “beyond zero.”
1,235
1,142
1,087
1,200
Given this trend we are fully aware that the
1,022
985
value of our businesses largely derives from900（2017年度）
our achievements in reducing CO2 emissions. 2. 国内保有特許権のセグメント別割合
600
The Taiheiyo Cement Group published
140
160
300
its long-term vision and specific measures for
124
119
103
reducing greenhouse gas emissions toward
0
2016
2017
2018
2019
2020 (FY)2050. To achieve this long-term goal we must
not only apply and develop technologies,
Domestic Patents (by Segment; as of the End of FY2020) Non-consolidated
but create innovative technologies
Othersapplicable in financial, technical and societal
1%terms. We are especially focusing on a
（4）
practical technology to recover and recycle
MineralCement andCO2 emissions applicable to cement kilns as
Resources
Concrete24%
42%
Domestic
a top-priority project that will preserve the
（301）
（528）
Patents
future of the cement industry.

1,235

Environmental

33%

40

（402）

TAIHEIYO CEMENT REPORT 2020

Research and Development Strategies
Based on the 20 Medium-Term Management Plan

Focus on research and developmentthat contributes to Group-wide growthand sustainable development
Cement• Maintain and improve quality (Material design/hydration
characteristics/new quality control technology)• Reduce manufacturing costs (Maximize use of difficult-toprocess waste)• Develop infrastructure technologies for each business while contributing to reducing
environmental impact• Quickly establish technologies in growth fields and contribute to commercializing them
• Research and Development that addresses national projects
Existing businesses
Interactive actions

Growth fields (four pillars)• Overseas: Development and sales

expansion of cement foroverseas markets
Enhance the overseas
technical assistance system.

Concrete• Refine infrastructure technologies (Thermal stress analysis/
thermal crack control)• Grow demand and improve customer satisfaction (Paving/stabilizer/higher performance)

National projects• Environmental: Materials Recovery

Complex initiative(recovery of precious
metals)Waste materials
recycling technology

Development of functional•M ineralResources: materials•C onstruction Enhance cooperation
Support for commercialization Materials:
within the Group
3D mold making technology

Reducing environmental impacts• Development of technologies for reducing CO2• Development of technologies for utilizing recycled resources• Development of technologies for saving energy• Development of technologies for effectively utilizing water resources
and technologies for preserving biodiversity

Recently Developed Technologies
Technologies for Recovering and Recycling CO2 Emissions
We must develop revolutionary
carbon recycling technologies toachieve our long-term vision. Our
technology for CO2 separation andcapture from cement kiln exhaustgas was adopted as a projectsponsored by the New Energy andIndustrial Technology Development
Organization (NEDO) and will bedemonstrated in FY2021 and 2022.
AI Prediction Technology for Concrete Slump
We developed an AI technology
to instantly predict slump fromimages of mixing inside theconcrete mixers during the
production process. Its use in
the production of ready-mixed
concrete and concrete-related
products will further stabilize thequality of concrete and save laborthrough process automation.

•C ontribute to restoration and reconstruction efforts in the disaster-strickenareas•A ddress demand related to the Tokyo Olympics and Paralympics•T echnological development for construction work for the Chuo Shinkansen•O ther large infrastructure projects (including countermeasures fordeteriorating infrastructure)

Development and enhancementof infrastructure technologies•P rediction of hardened concrete properties•A I prediction technology for concrete slump

Environmentally Sound Products
Developed by Group Companies
Heat Barrier Coat Heat-shielding Colored Cement Resin
Mortar for Road Surfaces (Chichibu Concrete Industry Co., Ltd.)Heat Barrier Coat is a heat-shielding colored cement resin mortar
containing specialized pigments for application on road surfaces.
It inhibits the rise of road surface temperature by reflecting
heat sources such as infrared rays from the sun. It is expected
to mitigate the urban heat island effect and improve theenvironment along sidewalks and roadsides. It can be applied
across a wide range of settings, including sidewalks and parksin urban areas, and the rooftops of condominiums and officebuildings. The product can be sprayed on both concrete andasphalt road surfaces. As a highly elastic cement-type material
developed using the company’s proprietary technology, it firmly
adheres to the road surface with high durability. Its muted color
harmonizes with the surroundings and provides a comfortabledaily living environment.

Low-temperature Embrittlement Technology for Difficult-toprocess Waste Plastic
This new technology allows us
to accept a larger volume ofdifficult-to-process waste plastic
and increase our use of alternative
energy, dechlorination and recoverprecious metals. We installed acommercial-scale demonstration of
the equipment (7,840 tonnes/year)
at the Kawasaki Plant of the Group
company DC Co., Ltd. in FY2020.

Heat Barrier Coat application work

TAIHEIYO CEMENT REPORT 202041

GovernanceTaiheiyo Cement Group
Corporate Governance

Messages from Outside Directors and Outside Corporate Auditors

Outside Corporate Auditor

Yoshio Fujima

Outside Corporate Auditor

Wakako Mitani

Outside Director

Yoshiko Koizumi

Shinhachiro Emori

The Taiheiyo Cement Group is striving for highly transparent management
by enhancing its corporate governance. What issues does the group needto clear in order to maintain sound management and continue to growfurther? Two outside directors and two outside corporate auditors talked
about the group’s governance from their points of view.

42

TAIHEIYO CEMENT REPORT 2020

Outside Director

GovernanceYoshiko Koizumi

unrecognized issues
to help promote thediscussions byusing my practicalexperience as acorporate manager.

TAIHEIYO CEMENT REPORT 2020

Main Results of
FY2020 CSR Efforts

I plan to have effective

CSR Management

Shinhachiro Emori

Risk Management andCompliance

Outside Director

Having worked for a chemical manufacturer that also makes cement, I
know the company’s business environment well and can provide advice
leveraging my practical experience as a corporate manager. Having only
recently been appointed to the post I am not yet ready to make detailed
observations but I intuitively sense that management of a large groupwith approximately 120 consolidated subsidiaries will be difficult. Sincegroup companies differ in history, business formats and corporate culture,a great deal of effort will be required to check, every day, on whether or
not governance has permeated throughout the group. This importanttask should be carried out no matter what it takes, in order to provide
prompt, effective guidance in times of emergency. Fostering a relationshipof trust between the headquarters and each group company is key forestablishing and instilling group governance, and this depends on daily
communication. As for creating a governance system in line with the realsituation, I believe that I will be able to provide advice based on my own
experience.
In FY2021 the number of the company’s board members waschanged from 15 to 10. This was intended to increase the ratio of outside
officers and strengthen the monitoring function, and I feel this was a very
reasonable action. Going forward, each director must take responsibility
for attending board meetings and enriching the content of discussions
to enable effective and thorough discussions. As an outside director who
understands corporate management practices, I think my role is not only
to apply brakes on management but also to step on the accelerator oncein a while. I hope to effectively contribute as an outside director who canoffer helpful advice when the company faces difficult decisions.

Board ofDirectors and Auditorsgroup’s governance.

Corporate
Governance

I will shed light on

Messages from Outside Directors
and Outside Corporate Auditors

Outside Director

Since assuming this position in 2015 I have always had the impression that
this company is solid. I regularly receive a large volume of documents thatare prepared for outside directors as well as frequent explanations fromthe drafting and other departments. The company’s expectations of me asan outside director are high and, while that places a lot of pressure on me,
I believe that is why we have maintained a relationship in which I can speak
frankly. The company employs a self-evaluation system in which all directors
fill out a questionnaire to assess the effectiveness of the Board of Directors. A
new process has been added in which the chairman of the board and outside
directors analyze and evaluate effectiveness based on the results of thequestionnaire. I feel that this new process also demonstrates the company’s
willingness to listen to the candid opinions of outsiders.
In fulfilling my role as an outside director, I have valued the importanceof interacting with employees onsite through direct communication. Theseexperiences have made me realize that the spirit of valuing people andcommunities continues to be alive and well in the company, and that thecement industry is built on people and communities. As the company
expands its business across the Pacific Rim it will face the challenge ofinstilling this spirit in regions with different history, climates and cultures,
while practicing effective governance. My role as an outside director would
be analysis and provision of advice on corporate legal affairs, applying
my many years of experience as an international lawyer, and openly
expressing my opinions based on my experience as an outside director
and outside auditor at other companies—even in relation to matters thatthe company has not recognized as issues. Since the company has somany outstanding personnel, if we can understand the essence of anissue, we will naturally find a solution.

43

GovernanceOutside Corporate Auditor

Wakako Mitani
I will strive tostrengthen the group’s
internal controls tomeet its expectations.

Outside Corporate Auditor

Yoshio Fujima

I will conduct higher

quality audits to help
develop the group.

44

TAIHEIYO CEMENT REPORT 2020

Two years have passed since I became an outside corporate auditor. Duringthat time I attended various important meetings in addition to the Board of
Directors and Audit and Supervisory Board meetings, and I deepened myunderstanding of the company’s strategy. I participate in visits to as manybranches, plants and group companies as possible, both in Japan andoverseas. When I speak with local employees I am provided with specific anddirect information. They constantly amaze me with their level of activity andopenness.
I have also had direct discussions with employees on importantmatters and compliance issues. The company is the largest in the Japanese
cement industry and maintains hundreds of group companies of different
sizes. Therefore, while it maintains a high level of compliance as a leading
company, it needs to have an internal control system that matches thebusiness format and scale of each group company, and a level of internal
control that lives up to the name of the Taiheiyo Cement Group. From alawyer’s point of view, striking this balance can be difficult, but I believethat the group will continue to instill a vision of what it should be acrossthe entire organization. One issue I point out in this regard is that I feelthe need to establish a group internal control system that enables groupcompanies to share information and roll out countermeasures so thatwhen a compliance problem arises, they can prevent the same problem
from reoccurring anywhere else in the group.
While the role expected of outside corporate auditors and the levelof expectation differs from company to company, I strongly feel that thiscompany actively seeks and reflects external opinions. I will continue towork hard to meet their expectations.

The company makes outside corporate auditors work in what we consider as “agood way.” It has been only a year since I was appointed as outside corporate
auditor but I have already visited many sites in Japan and abroad. At every
work site I felt they tried to conduct effective audits relevant to the current
business environment rather than “pro-forma” reviews. Furthermore, compared
to my previous auditing experience, no other company has provided so muchinformation, making this a very refreshing experience for me.
Also, when I assumed this post, I was very interested in how the group,
which consists of approximately 300 subsidiaries and affiliated companies, caninstill and maintain the basic spirit of its internal control system group-wide.
When conducting audits as an outside corporate auditor, I paid attention to thispoint while also exchanging opinions based on explanations received about
management and the operations of each department at the headquarters, plants
and subsidiaries. As a result, I realized that group employees share a common
understanding. I feel this is due to the significant contribution of over 130 years ofgroup history and pride which have fostered human resources who understandand practice the spirit of internal control and have nurtured an environment thatmaintains that spirit. However, the group went through a period of limiting newhires in the past so to continue consistently conveying this spirit and fosteringawareness will be among its management challenges.
I also think that it is important for the group’s sustainable growth to enhancethe disclosure of corporate information related to non-financial information,
which has recently been attracting attention, while at the same time creating anenvironment that secures human resources and maintains a sound internal control
system. I would like to increase the impact of auditor’s audits from a professional
perspective as a certified public accountant while also offering appropriate advice
as an outside corporate auditor.

Special Feature

Business Activities

Governance

The Environment

Collaborating with Society

Corporate GovernanceIn keeping with the Group’s mission we established the
Basic Policy on Corporate Governance with the aim of
meeting the expectations of all stakeholders, including
shareholders, and helping to achieve sustainablegrowth while maximizing our corporate value over the
medium to long term. Under the policy we also work
toward further enhancing our corporate governance.

⿎Corporate Governance System

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

Our website https://www.taiheiyo-cement.co.jp/english/
About Us → Corporate GovernancePrinciples

Disclosure by
Website*1

Basic
Policy*2

Report*3●

Cross-shareholdings

Article 22

Principle
1.7

Related party transactions

Article 23

Principle
2.6*4Roles of corporate pension funds
as asset owners
Company objectives (e.g.,
mission), management strategies,
management plans

Corporate Governance System
General Meeting of Shareholders●

Appointment/removal

Basic concepts and policies on
corporate governanceAppointment/removal●
Article 15

Policies and procedures on theappointment of senior management,
and nomination of director andcorporate auditor candidates

Article 5
Article 9
Article 12

Supplementary
Principle 4.1.1

Board of Directors’ decisions andscope of matters delegated to
management

Article 3

Principle
4.9*5

Independence standards andqualification for outside directors

Article 4

Supplementary
Principle 4.11.1

Views on appropriate balance
between knowledge, experienceand skills of the Board of Directors
as well as on diversity andappropriate board size

Article 4

Supplementary
Principle 4.11.2

Status of concurrent positions atother listed companies held bydirectors and corporate auditorsof the Taiheiyo Cement Group

Article 7
Article 14

Supplementary
Principle 4.11.3

Analysis and evaluation of theoverall effectiveness of the Board of
Directors and summary of results

Article 19

Supplementary
Principle 4.14.2

Training policy for directors andcorporate auditors

Article 18

Principle
5.1

Policy for constructive dialogue
with shareholders

Article 24

Board of Directors(management
decision-making
and supervision)●

Appointment/removal

Policies and procedures indetermining the compensation ofsenior management and directors

Selection/removal/
supervision

Representative Director
Managing Executive Ofﬁcer

Cooperation

Board of Auditors

Accounting Auditor

Assistance

Corporate Auditors’ Ofﬁce
Audit
ReportCSRManagement
Committee

ReportExecutive Committee(review important matters)
Final decision/
instruction/supervision

Executive Ofﬁcer●

Appointment/removal

Audit

Headquarters, branches, plants,
Central Research Laboratory(business execution), group companies Audit

Internal
Auditing
Department

Main Results of
FY2020 CSR Efforts

Principle
3.1 Full
disclosure●

CSR Management

Principle
1.4

Risk Management andCompliance

⿎Status of Compliance with Japan’s Corporate
Governance CodeBoard ofDirectors and Auditors

Taiheiyo Cement Corporation Basic Policy on
Corporate GovernanceCorporate Governance Report

Our organizational structure is anchored by our
Board of Directors and Board of Auditors. We havealso introduced an executive officer system in order
to separate management decision-making andmonitoring/supervisory functions from businessexecution. Our Corporate Auditor’s Office consistsof one manager and two subordinates, which
comprehensively supports corporate auditors
in performing their duties. Our Internal Auditing
Department conducts internal audits, identifies
issues that require improvement and reports audit
results to the president to increase the effectivenessof internal audits.
Also, our CSR Management Committee
determines the ideal direction for our businessactivities from the perspective of CSR and promotes
the strengthening of corporate governance.
In FY2020 we held 14 board meetings, with all
directors and auditors in attendance.

Corporate
GovernanceTaiheiyo Cement Group Management Organization

Messages from Outside Directors
and Outside Corporate Auditors

Basic Policy on Corporate GovernanceFordecision-making andbusiness
execution
tasks requiringhigh levels of
expertise, we
receive advice
fromconsulting law
ﬁrms,
management
consultants
and otherexperts.

*1 Our website*2 Our Basic Policy on Corporate Governance*3 Reports related to our corporate governance*4 Principle to be disclosed under the revised Corporate Governance Code (June 1, 2018)*5 In addition to the above three methods of disclosure we disclose information in our
securities reports and materials for our general shareholders’ meeting.

TAIHEIYO CEMENT REPORT 2020

45

Governance

Overview of Corporate Governance System (as of June 30, 2020)
Area

Number of People

Organizational structure

Company with board of auditors

Board chairman

Chairman and director

Number of board directors(female board directors)(one-year term)

7 (1)Number of outside directors(independent directors)

2 (2)Number of executive officers(concurrent directors)

21 (2)

Number of corporate auditors(female corporate auditors)

4 (1)Number of outside directors(independent directors)

2 (2)Major Meetings in FY2020
Meetings

Attendance Rate of
Outside Directors

Meetings Held

Board of Directors

14

100%

Board of Auditors

12

100%

Executive Committee

23–

deliberation and decision by the Board of Directors
candidates are presented to the General Meeting of
Shareholders and appointed based on its resolution.
For nomination of auditors, the president proposes
candidates to the directors with prior approval fromthe Board of Auditors, including outside auditors.

Outside Officers

We appoint outside officers in accordance with the
Independence Criteria for Outside Officers andthe Taiheiyo Cement Corporation Basic Policy on
Corporate Governance. These individuals must
not have any conflicts of interest with generalshareholders but be fully independent, and possess
broad insight and experiences in terms of corporate
legal affairs and corporate management.
Independence Criteria for Outside Officers(Taiheiyo Cement Corporation Basic Policy on
Corporate Governance, Appendix 1)▪Evaluating the Effectiveness of the Board of Directors
In accordance with the Basic Policy on Corporate
Governance, we analyze and evaluate the overall
effectiveness of the Board of Directors on an annual
basis. We also have all directors take part in a selfassessment survey by filling out a questionnaireon the composition of the Board of Directors,
operational status, decision-making process andexternal communication. The results are analyzed
and evaluated by the board chairman and outside
directors and reported to the Board of Directors for
future discussion and confirmation on improvementsfrom the previous fiscal year as well as on issues andmeasures. In FY2020 the Board of Directors wasconsidered to be generally well managed and its
overall effectiveness ensured.
In addition, after reviewing the results andopinions presented by each director, we are working
to raise the level of board effectiveness throughsuch efforts as reducing the number of directors tostrengthen management oversight and accelerate
decision-making.
⿎Appointment of Board Members

The president proposes candidates for board
directors and auditors to the Board of Directors,
including outside directors, in accordance with
the Basic Policy on Corporate Governance. After

46

TAIHEIYO CEMENT REPORT 2020

GRI102-22

⿎Appointment of Outside Directors

Our website https://www.taiheiyo-cement.co.jp/english
About Us → Corporate Governance

⿎Major Areas of Experience of Outside Officers

Outside officers must be capable of supervising ourdirectors and management from an independent,
external standpoint, and provide proper andappropriate advice based on their wealth ofexperience and insight. Our current appointed
outside officers include lawyers with experiencein corporate legal affairs, a corporate manager
from the manufacturing industry and a certified
public accountant, all of whom have the requisite
experience, achievements and insight.
Major Areas of Expertise of Outside Directors and Auditors
Major Areas of Expertise

OutsideDirector
OutsideDirector
OutsideAuditorOutsideAuditorName

Attribute

YoshikoKoizumiShinhachiro
Emori
WakakoMitani

Corporate
manager

YoshioFujimaManagement Finance/HR/
Strategy Accounting Labor〇

Lawyer〇〇〇〇LawyerCertified public
accountant

Legal/
Internal
GlobalControl/
Compliance

〇

〇
〇

〇

Special Feature

Business Activities

GRI102-35, 36, 37

⿎Board Member Remuneration

Amount ofRemuneration Paid
(Million Yen)

Board directors

18

Corporate auditors

6

853
72

Total

24

926

Note:
• The above counts of board members and corporate auditors who received remuneration
include 4 board directors and 2 corporate auditors who retired or resigned at theconclusion of the 21st Ordinary General Meeting of Shareholders held on June 27, 2019.
• Of the above, the total amount of compensation for outside officers was 51 million yen, andthe number of paid outside officers was 5.

The Corporate Planning Department assists outside
directors with the execution of duties by, forexample, explaining in advance Board of Directors
meeting agendas and regularly reporting onimportant matters concerning business execution.
Full-time auditors regularly report to outside
auditors on the matters deliberated in major internal
meetings regarding business execution. In addition,
our Corporate Auditor’s Office provides support tocorporate auditors.
⿎Training for Directors and Corporate Auditors

Internal directors, internal corporate auditors andexecutive officers receive training on corporate law,
corporate governance and other key issues uponassuming their posts. They also receive training fromexternal organizations to acquire the knowledge
they need for their respective roles.
As for outside directors and outside corporate
auditors, their initial training includes business,finance, organization and corporate governance.
They are also given opportunities to visit ourbusiness sites and affiliated companies in Japanand overseas to bolster their understanding of ourcompany.

Internal Control System

GRI102-30

In accordance with our Basic Policy for Building an
Internal Control System, we are creating a systemthat will enable us to enhance various activities fromthe following three perspectives: (1) efficiency ofbusiness operations, (2) risk and compliance, and(3) financial reporting. Under this policy our Internal
Control Report has confirmed that internal control
over financial reporting for FY2020 was effective. An
auditing firm we appoint has expressed its opinion
that the report was appropriate. In the Business
Report for FY2020 we have presented an overview
of system operation to ensure the proper executionof operations in accordance with the basic policy.

TAIHEIYO CEMENT REPORT 2020

Main Results of
FY2020 CSR Efforts

Board Members Who
Received Remuneration

⿎Support System for Outside Officers

CSR Management

Annual Remuneration of Board Members (FY2020)

GRI102-27

Risk Management andCompliance

Fixed compensation is set according to position.
Performance-based compensation for directors
is calculated by multiplying profit attributable toowners of parent for the fiscal year under review
by 1% (up to 400 million yen) and a coefficient by
position, although this can be reduced depending
on business and other conditions. If the annual
dividend for the fiscal year under review is lessthan 30 yen per share, in principle no performancebased compensation will be paid. The ratioof performance-based compensation to totalcompensation in FY2020 was 37%, and the profit
attributable to owners of parent in FY2019, the basis
for calculation, was 43.4 billion yen.

Initiatives to Enhance Governance Functions

Board ofDirectors and Auditors

⿎Determining Board Member Remuneration

Collaborating with Society

Corporate
Governance

Resolutions of the General Meeting of Shareholders
determine the upper limits of remuneration
for board directors and auditors. The board of
directors, including outside directors, has resolvedthat the level of remuneration for individual board
directors is decided by the representative director.
The level of remuneration for individual auditors
is determined by the Audit and Supervisory Board
members. The remuneration system for directors
consists of fixed compensation and performancebased compensation, while the remuneration system
for the outside directors and auditors consists solelyof fixed compensation.

The Environment

Messages from Outside Directors
and Outside Corporate Auditors

Board Member Remuneration

Governance47

Governance

Board of Directors and Auditors❶❷

Shuji Fukuda Chairman and Director

Masafumi Fushihara President and Representative Director

Career Summary

Career Summary

Apr. 1974
Jun. 1999
Apr. 2004

Apr. 2006
Apr. 2008

Joined Onoda Cement Co., Ltd.
General Manager, Accounting &Finance Department of Taiheiyo
Cement Corporation
General Manager, Accounting &Finance Department and General
Manager, Accounting & FinanceBusiness Operation Center
General Manager, Hokuriku Branch
Executive Officer and General
Manager, Human Resources
Department and General Manager,
Personnel Business Operation Center

Oct. 2008
Aug. 2010
Oct. 2010
Apr. 2012
Apr. 2018

Executive Officer and General
Manager, Human Resources
Department
Director, Managing Executive
Officer and General Manager,
Human Resources Department
Director and Managing Executive
OfficerPresident and Representative
Director
Chairman and Director (to present)

Experience and Knowledge

Since 2010 Mr. Shuji Fukuda has engaged in the management of the company as a director andafter serving as president and representative director was appointed as chairman and director in
April 2018. He possesses a wealth of managerial experience, achievements and knowledge. While
striving to enhance the function of the Board of Directors as chairperson, he has also effectively
served as a director, striving to continuously increase the corporate value of the group, such as
identifying key management issues, and supervising business execution.

Apr. 1978
Apr. 2007

May. 2009
Oct. 2010
Apr. 2012

Joined Onoda Cement Co., Ltd.
General Manager, Business
Promotion Department ofEnvironmental Business Companyof Taiheiyo Cement Corporation
General Manager, Sales
Department of Environmental
Business Company
General Manager, Environmental
Business Development Department
Executive Officer and General
Manager, Environmental Business
Development Department

Apr. 2015
Jun. 2015
Apr. 2016

Apr. 2017
Apr. 2018

Managing Executive Officer
Director and Managing Executive
Officer
Director, Managing Executive
Officer and Senior General
Manager, Cement Business
Division
Director, Senior Executive Officer
and Senior General Manager,
Cement Business Division
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 the Cement Business Division. He therefore possesses a wealth of managerial
experience, achievements and knowledge. He continuously strives to increase the corporate
value of the group as he leads its management, identifies key management issues and supervises
business execution.

❸

Yuuichi Kitabayashi Vice President and Representative Director
Career Summary
Apr. 1978
May. 2009

Joined Nihon Cement Co., Ltd.
General Manager, Kamiiso plant

Apr. 2011of Taiheiyo Cement Corporation
Executive Officer and General

Apr. 2013

Manager, Production Department
Managing Executive Officer

Experience and Knowledge

Jun. 2013
Apr. 2016
Apr. 2017TAIHEIYO CEMENT REPORT 2020

❹

❼

❾

❺



Director and Managing Executive
Officer
Representative Director andSenior Executive Officer
Vice President and Representative
Director Overseeing Corporate
Planning Department (to present)

Since 2013 Mr. Yuuichi Kitabayashi has engaged in the management of the company as a director
and was appointed as vice president and representative director in April 2017. 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.

48

❽

❻

❸

❷

❶

➓

Special Feature

Business Activities

Governance

The Environment

Collaborating with Society

GRI102-22❹❺

Masahiro Karino Director and Senior Executive Officer

Kunihiro Ando Director and Senior Executive Officer

Career Summary

Career Summary

Apr. 2013

Joined Nihon Cement Co., Ltd.
General Manager, Legal
Department of Taiheiyo Cement
Corporation
Executive Officer and General
Manager, Legal Department

Apr. 2016
Jun. 2016
Apr. 2019

Managing Executive Officer
Director and Managing Executive
Officer
Director and Senior Executive
Officer (to present)

Apr. 1980
Apr. 2011
Apr. 2013
Apr. 2015

Joined Onoda Cement Co., Ltd.
General Manager, Ofunato plantof Taiheiyo Cement Corporation
Executive Officer and General
Manager, Oita plant
Executive Officer and General
Manager, Mineral Resources
Business Department

Apr. 2016
Jun. 2016
Apr. 2020

Managing Executive Officer
Director and Managing Executive
Officer
Director and Senior Executive
Officer (to present)❻❼

Yoshiko Koizumi Outside Director

Shinhachiro Emori Outside Director

Career Summary

Career Summary

Apr. 1972
Jan. 1980
Jan. 2008
Apr. 2009

Jun. 2015

Jun. 2016
Sep. 2017

Director of Taiheiyo Cement
Corporation (to present)
Outside Director, Dowa Holdings
Co., Ltd. (to present)
Outside Director, Sumitomo
Bakelite Co., Ltd.
Outside Corporate Auditor,
Nippon Koei Co., Ltd. (to present)

Apr. 1975
Jun. 2010
Jun. 2011

Joined Toyo Soda ManufacturingCo., Ltd. (currently Tosoh
Corporation)
Director of Tosoh Corporation
Managing Director of Tosoh
Corporation

Jun. 2012
Jun. 2015
Jun. 2020

Representative Managing
Director of Tosoh Corporation
President and Representative
Director of Taiyo Vinyl
Corporation
Director of Taiheiyo Cement
Corporation (to present)

Experience and Knowledge❽❾

Toshihide Nishimura Corporate Auditor (Standing)Shigeru Matsushima Corporate Auditor (Standing)

Career Summary

Career Summary

After working as counsel and partner at law firms Yoshiko Koizumi was appointed as a 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, and also monitors and supervises overallmanagement.

Apr. 1979
Apr. 2006

Apr. 2012

Apr. 2015
Jun. 2015
Apr. 2017
Jun. 2017Managing Executive Officer
Director and Managing Executive
Officer
Director
Corporate Auditor (standing) (topresent)

Apr. 1979
May. 2009
Apr. 2011
Apr. 2012

Joined Nihon Cement Co., Ltd.
General Manager, Hokkaido
Branch of Taiheiyo Cement
Corporation
Executive Officer and General
Manager, Hokkaido Branch
Executive Officer, Deputy General
Manager and General Manager
of Cement Business Division

Apr. 2013
Jun. 2013
Apr. 2017
Apr. 2019
Jun. 2019

Managing Executive Officer
Director and Managing Executive
Officer
Director and Senior Executive
Officer
Director
Corporate Auditor (standing) (topresent)

Experience and Knowledge

Experience and Knowledge➓⑪●

Wakako Mitani Outside Corporate Auditor

Yoshio Fujima Outside Corporate Auditor

Career Summary

Career Summary

After serving as director and managing executive officer of the company, he was appointed
as corporate auditor in June 2017. In addition to his extensive knowledge and insight in the
Accounting & Finance Department he has a wealth of experience as a director in construction
materials, building construction and civil engineering businesses, as well as the supervision ofbusiness execution. With the intention of continuously increasing the corporate value of thegroup, he properly audits the execution of duties by directors.

Apr. 2000
Jul. 2001
Apr. 2012
Feb. 2018

Registered as a lawyer (Daiichi Tokyo Bar Association)
Joined TANABE & PARTNERS
Partner, TANABE & PARTNERS (to present)
Corporate Auditor (to present)

After serving as director and senior executive officer of the company Mr. Shigeru Matsushima was
appointed corporate auditor in June 2019. As a director of the company, he has taken charge ofa wide range of operations in the general affairs and accounting departments and environmental
business, and has considerable insight as well as the experience of supervising businessexecution as a director. He effectively audits the execution of duties by directors to continuously
improve the corporate value of the group.

Nov. 1974
Mar. 1980
Sep. 1990
Aug. 1996

Experience and Knowledge

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

Main Results of
FY2020 CSR Efforts

May 2009

Joined Onoda Cement Co., Ltd.
General Manager, Construction
Materials Business Department of
Taiheiyo Cement Corporation
General Manager, Accounting &Finance Department
Executive Officer, General
Manager of Related Business
Department

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

CSR Management

Experience and Knowledge

Risk Management andCompliance

Registered as a lawyer (Daini
Tokyo Bar Association)
Partner, Masuda and Ejiri Law
Office (predecessor of Nishimura& Asahi)Counsel, Nishimura & Asahi
Partner, City-Yuwa Partners (topresent)

Since 2016, Mr. Kunihiro Ando has engaged in the management of the company as director andwas appointed as director and senior executive officer in April 2020. He is effective in the role ofa director 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 supervisingbusiness execution.

Board ofDirectors and Auditors

Experience and Knowledge

Mr. Masahiro Karino was appointed director in 2016 and has since been engaged in the
management of the company. He was appointed director and senior executive officer in April
2019. He is effective in the role of a director 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.

Corporate
GovernanceExperience and Knowledge

Messages from Outside Directors
and Outside Corporate Auditors

Apr. 1980
Apr. 2004

Joined Chuo Audit Corporation(currently MISUZU Audit
Corporation)
Registered as a certified public
accountant
Employee, Chuo Shinko Audit
Corporation (currently MISUZU
Audit Corporation)
Representative Partner, Chuo
Audit Corporation (currently
MISUZU Audit Corporation)

Jul. 2007
Jun. 2011
May. 2012
May. 2016
Jun. 2019

Retired from MISUZU Audit
Corporation
Outside Auditor, JIEC Co., Ltd.
Outside Auditor, Prime WorksCo., Ltd. (currently Neos
Corporation)
Outside Director (Audit andSupervisory Committee Member),
JIEC Co., Ltd.
Corporate Auditor (to present)

Experience and Knowledge

After serving as a representative partner of an auditing firm and an outside director and auditorof operating companies, Mr. Yoshio Fujima became 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 theexecution of duties by directors from an independent, objective and fair standpoint.

TAIHEIYO CEMENT REPORT 2020

49

GovernanceRisk Management and Compliance
Closely Related SDGs

Basic Risk Management and Compliance Policies
GRI102-16

⿎Basic Risk Management Policy and Regulations

In our Business Principles we declare “we will strive
to anticipate the changing business environment
to assess new opportunities for growth.” We
consider risk management as a foundation for
reducing management uncertainties and achieving
management objectives. We manage risks thatmake the achievement of management goals
uncertain, such as social change, changes in the
global environment, natural disasters, accidents
and scandals, based on our basic risk management
policy. In addition, we have established risk
management regulations to incorporate the risk
management policy into specific risk management
activities. Risk management regulations include
emergency responses.

Basic Risk Management Policy❶ We prevent and reduce risks in order to ensure thequality and safety of our products and services,protect the lives and safety of our employees
and their families, and earn greater trust from ourstakeholders.

❷ We create a system to appropriately manage a wide
range of risks associated with our business activities.
❸ We promote risk management through a plan-docheck-act cycle.

❹ We quickly and appropriately deal with risks as they
are identified.
❺ In collaboration with group companies we build asystem for immediately detecting new risks arisingfrom changes in our business environment and forquickly and appropriately dealing with risks at thegroup level.

⿎Basic Compliance Policy

Under our Business Principles we pledge that wewill act in strict compliance with the law and inaccordance with social mores. Fully aware thatcompliance is the foundation of CSR management,
we published the Basic Compliance Policy andsimultaneously created compliance rules in March
2005. We do not limit our definition of complianceto legal compliance; our definition includes
compliance with the social mores from which ourlaws originate, the mission and business principles
of our group, and internal regulations.

50

TAIHEIYO CEMENT REPORT 2020

Basic Compliance Policy (Summary)● Compliance with the Mission, Business Principles andsocial norms● Maintaining internal systems and rules and ensuring

broad-based awareness of them

● Cooperation with all group companies andpromotion of educational and enlightenment
activities● Establishing appropriate responses and policies forwhen problems occur● Timely and appropriate disclosure andcommunication of necessary information● Compliance with international standards and rules,
and respect for local cultures and customs● Rejection of illegal and unwarranted demands fromantisocial forces or organizations

Standard of Conduct (Casebook)
Our website http://www.taiheiyo-cement.co.jp/english

CSR → Corporate Social Responsibility at Taiheiyo Cement→ Corporate Framework for CSR

Taiheiyo Cement Group Tax Policy
Our website https://www.taiheiyo-cement.co.jp/english
CSR → Risk Management and Compliance →Compliance Guidelines

Please see below for more information.

Antimonopoly Law Compliance Manual
Anti-Bribery Basic Principle (Policy)▶︎P. 84-85

Risk Management and Compliance Promotion System
GRI102-17, 30, 31

Our president has ultimate responsibility for risk
management and compliance promotion. The
officer in charge of both areas (officer in chargeof the General Affairs Department) is appointed
by the president to preside over and run the Risk
Management & Compliance Committee andsystematically promote organized activities.
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-wide risks,
implements risk management activities based on
PDCA cycles and promotes compliance. Moreover,it studies and proposes the creation and revision

Special Feature

Business Activities

GovernanceInstruction

President

ReportHotlineReports

Internal (CSR Group of General Affairs Department)2

External (Kajitani Law Offices)

1

Risk Management and Compliance Promotion Activities
GRI102-11, 17, 201-2, 205-2▪Identifying, Evaluating and Specifying Company-wide Risks

Main Results of
FY2020 CSR Efforts*These should be regarded as reports according to the Whistleblower Program Regulations.

CSR Management

Results* of the Whistleblower Program (FY2020)

Risk Management andComplianceCorporate Auditor

ReportWe properly handle reports and proposals inaccordance with normal company procedures
while directly receiving reports without the needfor usual company procedures. Whistleblowers
have the option of either disclosing their identity,
including their name and department, or reporting
anonymously to mitigate any potential psychologicalconstraint. We have whistleblower hotlines bothinternally (at the CSR Group of our General Affairs
Department) and externally (at a law firm). Ourinternal hotline is in a dedicated, locked room

Officer in charge ofGeneral Affairs Department

Note: Subject to risk management: 103 group companies (as of April 2020)

Instruction

Risk management practices and education

ReportIdentify and evaluate risks

General Affairs Department

Employees

ReportRisk management andcompliance promotersProtection

External hotline

Risk management
and compliance promoters

Surveyfollow-up

Internal hotline

ReportOfficers responsible
for risk management
and compliance

Report on status of risk countermeasures

Officers responsible
for risk management
and compliance

Whistleblower ProgramGroup companies
Whistleblower Program

Business sites of headquarters(including the Central
Research Laboratory),plants, branches

⿎Whistleblower Program

Whistleblower

Secretariat:
General Affairs
Department

Annual action plans for risk management

Employees

Discovered

Risk Management &Compliance Committee

Evaluation system(Correction system)

Illegal action

Officer in charge: Officer in charge of General Affairs Department

Board ofDirectors and Auditors

Whistleblower Program

Ultimate responsibility: President

Chair: Officer in charge (of General Affairs Department)
Members: Managers of business sites of headquarters

equipped with dedicated phone and fax lines aswell as a computer with a dedicated address inorder to safeguard the privacy of those submitting
reports. Our external hotline is also available toall employees of group companies in an effort tostrengthen group governance, improve program
effectiveness and reduce the burden on individualcompanies. Moreover, we created the Whistleblower
Program Regulations so whistleblowers using the
program are not subject to unfavorable treatment.

Corporate
GovernanceRisk Management and Compliance Promotion System

Collaborating with Society

Messages from Outside Directors
and Outside Corporate Auditorsof 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 has an officer responsible
for risk management and compliance, and a risk
management and compliance promoter, who carryout specific duties. We held four Risk Management &Compliance Committee meetings in FY2020.

The Environment

We identify, evaluate and specify group-wide risks
every three years and conduct annual reviews of
those risks.
FY2020 was the third year of the company-widerisk review since the first was conducted in FY2017.
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 andthen formulate measures to avoid and reduce that
uncertainty. We reviewed risks.
Please see below for more information.

Awareness of Business Environment (Risks and Opportunities)▶︎P. 16TAIHEIYO CEMENT REPORT 202051

GovernanceRisk Management and Compliance

⿎Risk Reduction Countermeasures

With the evaluation results of identified companywide risks, our Risk Management & Compliance
Committee takes the lead in specifying those to beaddressed every year and implementing activities toreduce risk impact through PDCA cycles.
Issues addressed in FY2020 were: (1) Leakageof pollutants and hazardous substances, (2)Enhancement of information security, (3) Product/
service accidents, (4) Aging of facilities andequipment, (5) Prevention of traffic accidents, (6)Strengthening of overseas crisis management
measures, (7) Enhancement of group corporate
governance including risk management and thecompliance system, (8) Work-related accidents, (9)Response to shortage of human resources, and(10) Respect for intellectual property rights andstrengthening risk prevention.
▪Examples of Overseas Risk Countermeasure Activities
We created and regularly revise the Riot/Terrorism
Response Manual. In addition, regarding high-riskcountries to which our employees are dispatched,
we stipulate an outline for deciding on local
evacuation as necessary, create a tool 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, inthe event of evacuation or an emergency at eachoverseas business site.
⿎Emergency Task Force

When any event such as a disaster, accident or
misconduct has occurred, the affected business site
informs the general manager of the General Affairs
Department. The general manager determines theappropriate countermeasure from the following
options while considering the severity of the event:establish the Emergency Task Force or delegate siteleadership to respond to the event. Action is thentaken through the chosen countermeasure.
Although we received 25 reports in FY2020,
none required action by the Emergency Task
Force. Major information, including its handling, isdeliberated by the CSR Management Committee. In
addition, as preparation for responding to disasters

52

TAIHEIYO CEMENT REPORT 2020

and accidents, we conducted Shake Out drills forearthquakes at each business site, and workshops
on a business continuity plan for the headquarters
and branches in case of an earthquake. Moreover,
we provided training for plant staff so they would
understand how to appropriately handle complaints
if an accident occurs.
▪Response to the Spread of the Novel Coronavirus (COVID-19)
In response to the government’s declared stateof emergency on April 7, 2020 due to the spreadof the novel coronavirus COVID-19, we set up
the Emergency Task Force as of the same date
and announced the company’s “Our emergency
measures.“
Specific measures introduced by the emergency
task force included our strong promotion of working
from home, staggered work hours and the use ofvideo conferencing systems depending on the
COVID-19 infection situation. We also prohibited
domestic and overseas business trips, andimplemented other measures to prevent the spreadof the virus and ensure business continuity.
In addition, each overseas office hastaken measures against COVID-19 in line withlocal circumstances as soon as receiving anannouncement from the Emergency Task Force. The
head office has supported delivering masks andmedical supplies to all overseas offices.
▪Risk Management and Compliance Promotion Training
We provide training for managers and promoters forrisk management and compliance of the company’sbusiness sites and group companies to ensure
effective risk management and compliance.
In November 2019, we presented a lecture bya risk management consultant for group company
managers based on two themes: “Unconscious
bias management required for leaders” and“Creating an organizational climate that does notcause compliance problems,” with 100 companies
participating, and including a lecture titled “How to
conduct PDCA for risk management and compliancepromotion” followed by case study discussions forpromoters, with 80 companies participating.

Special Feature

Business Activities

⿎Compliance Training

Governance

The Environment

Collaborating with SocietyGroup Legal Round Tables (FY2020)

Since FY2006 we have been holding roundtablediscussions attended by management and legal
affairs representatives from our group companies.
These provide opportunities to share legal
information (mainly responses to revisions of laws)
in order to further our understanding of major laws
relating to corporate management and to assist in
the creation of our group’s compliance regime. In
FY2020 we discussed the following topics.

·Communication with authorities in
response to corporate scandals (criminal
plea bargains, antimonopoly leniency andcommitment procedures)·Practical responses to civil law revisions(contract clause examples)

Information Security
⿎Information Security Promotion System

To ensure and maintain the security of information
assets, we have established the Basic Information
Security Policy and the 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. Appointed by the president is
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 organized andplanned activities 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

Main Results of
FY2020 CSR Efforts

⿎Legal Roundtables for Group Companies·Legal issues concerning labor

CSR Management

CSR → Corporate Social Responsibility at Taiheiyo Cement→ Corporate Framework for CSR

November 86
30th(84 companies)
2019

TopicsRisk Management andCompliance

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

Attendees19(11 companies)

Board ofDirectors and Auditors

Standards of Conduct (Casebook)

Date

July
29th
2019

Corporate
GovernanceStandards of Conduct (Casebook)No.

Messages from Outside Directors
and Outside Corporate Auditors

To fulfill our mission and uphold our businessprinciples we formulated the Standards of Conduct
to guide all officers and employees of Taiheiyo
Cement in the performance of their daily duties.
The standards consists of 35 items in 6 categories
and gathers together Taiheiyo Cement’s policies,
regulations and president’s messages delivered
within and outside the company.
We created and distributed to all our
employees, as well as all those of our main groupcompanies, the Standards of Conduct (Casebook),which describes specific examples on how to act inline with the Standards of Conduct.
We regularly revised The Standards 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 part of e-learning
programs to provide education on the Standardsof Conduct (Casebook) and other materials so theylearn how to act in individual situations.
In FY2020,
73.3% of employees
participated in the
program.

Director of information security
Evaluation and GuidanceBusiness sites

Group companies

Risk management officer(business site manager)
Information handling officer(operations department managers/selected individuals)

Basic Information Security Policy
Privacy Policy
Our website https://www.taiheiyo-cement.co.jp/english/
CSR → Risk Management and Compliance

⿎Information Security Promotion Activities

In FY2020 we alerted and enlightened all employees
TAIHEIYO CEMENT REPORT 202053

GovernanceRisk Management and Compliancethrough a portal site on our intranet and also
conducted an email drill to respond to targeted
attacks. In addition, we held a gathering for the
information departments of group companies
in which we distributed the Information Security
Measures Guide and explained measures to promote
it. In addition, we conducted disaster recovery drills,
a security level survey of group companies andinformation security training. No serious incidents
related to information security have occurred.
We will continue our efforts to improve the security
levels of our domestic and overseas group companies.

and reduce associated risks. We have also established
a committee consisting of those related to intellectual
property at the main group companies in orderto promote and vitalize our intellectual property
activities corresponding to the scale and industry ofeach group company, by sharing issues, exchanging
information and holding workshops. Our company
headquarters was previously used as the venue, butsince FY2019 we have created new opportunities touse group companies for that purpose. As a result, themanagement of each company has begun to attend thevenues and further enhancements have been made.

Protection and Use of Intellectual Property

⿎Outline of Our Intellectual Property
As of the end of March 2020 the company owned 1,235
domestic patents and 216 overseas, 273 domestic trademarks
and 132 overseas, and 11 domestic design rights. (See the“Research and Development” section for graphs by segment.)
The cement segment accounts for the largest shareof patents owned by the company. However, over the
past several years the share of patent applications in
the environmental and mineral resources segments
has been growing in line with our business and R&D
strategies. In order to increase business revenue frompatents, we must obtain patents for technologies including
peripheral technologies, considering the company’sbusiness conditions. With this understanding we are firmly
establishing a wide collection of strong, advanced patentsfrom the perspective of retaining a competitive advantage
in terms of intellectual property.
As a technology-oriented manufacturer we haverecently focused on raising the percentage of inventors
among all employees. We believe this would further
cultivate a mindset of valuing corporate intellectual
property and develop the originality and portfolio of eachbusiness by protecting effective inventions, leading to thecontinued strengthening of our competitiveness.

⿎Intellectual Property Policy

Our fundamental intellectual property policy is tocontribute to management through intellectual
property activities that support our business,ensuring our competitive advantages by strategicallyconducting intellectual property activities. Under thispolicy we are developing our intellectual property
activities in collaboration with business and R&D
divisions to contribute to increasing the corporate
value of the Taiheiyo Cement Group.
▪In-house Intellectual Property Management System
The company has established the Rules for HandlingIntellectual Property Rights. Under the management
system based on these rules, we are working on
intellectual property activities. The Intellectual
Property Department assigns staff members to
the headquarters mainly to perform planning andadministrative tasks, and to the Central ResearchLaboratory to handle applications for and protect
rights and research efforts. In addition, intellectual
property promoters are assigned as contact points
to the major business divisions and the Central
Research Laboratory to actively promote theeffective and efficient creation, protection and useof our intellectual property in collaboration with theIntellectual Property Department.

▪Intellectual Property Management System for the GroupIn March 2018 we formulated and began applying
the Taiheiyo Cement Group Intellectual Property
Management Guidelines, which apply to the entire
group, to promote the use of our intellectual property

54

TAIHEIYO CEMENT REPORT 2020

Please see below for more information.

Research and Development

⿎Licensing Activities▶︎P. 40

While the company applies for and acquires rights
primarily to ensure competitive advantages in ourbusiness activities, we also proactively license rightsthat we do not use to other companies. In some cases
we also license technologies from other enterprises ifthey are likely to contribute to our business.

Special Feature

Business Activities

⿎Training and Awareness Raising

CSR Management
Main Results of
FY2020 CSR Efforts

To raise awareness of intellectual property andincrease its potential, the company encourages
employees, especially members of the researchdivision and the technology development division,
to take the Intellectual Property Management Skills
Test, a national licensing examination. We havecontinued other employee training and awarenessraising efforts such as external workshops heldby the Japan Intellectual Property Association
and Japan Institute for Promoting Invention andInnovation, in addition to in-house training at
our headquarters, Central Research Laboratory,
branches and plants. In FY2020 we implemented
the training programs described below, with 90
attendees including employees from affiliatedcompanies. We have also partially introduced ane-learning program. Furthermore, through efforts
such as information exchange gatherings andstudy meetings for those related to the intellectual
property of each company stated above, we strive
to duly protect and use intellectual property acrossthe group while respecting other companies’
intellectual property
and preventing
infringement,
focusing primarily
on intellectual
property as a sourceof profit.
Session on patent descriptions

Risk Management andCompliance

We have paid specified compensation to inventors fortheir patent applications and for registered patents
that have significantly contributed to the businessprofits under our regulations. Furthermore, in FY2018
we started to operate an Intellectual Property Award
Program to strengthen employee awareness ofintellectual property. In FY2020, achievements wererecognized through the Excellent Invention Award (1award, 7 individuals), the Largest Number of Patent
Applications Award (1 individual and 1 team) and theIntellectual Property Contribution Award (2 awards, a
total of 8 individuals).

Board ofDirectors and Auditors

⿎Intellectual Property Award Program

Collaborating with Society

Corporate
GovernanceOur acquisition and control of intellectual property is
conducted under the Rules for Handling Intellectual
Property Rights stated above. This intellectual property
rights strategy is intended to ensure that implementation
corresponds with the reality of our individual businesses.
Intellectual property, including pending patentapplications, is handled through a centrally controlled
database by the Intellectual Property Department.
We strive to prevent infringements of competitors’
patents and strictly manage risks by ascertaining recent
developments of issues through the periodic circulationof patent information, a problematic patent watch
system and an intellectual property review service withthe utmost attention paid to setting our own criteria.
Moreover, we are educating employees and increasing
their awareness by holding in-house training, intellectual
property strategy promotion meetings with various
divisions and so forth. To date, we have never been sued
for infringing intellectual property rights and therefore
not suffered any business interference as a consequence.
To manage trade secrets and prevent leaks of
know-how and technology, we formulated and enforce
Information Security Management Regulations andDocument Management Rules that cover the entire
group. In addition, we use the guidelines stipulated in
the Rules for Handling Intellectual Property Rights todetermine whether we will file a patent application for atechnology or keep it secret as internal expertise in orderto prevent technology leaks.
Group companies have formulated or reinforced
various intellectual property rules while completingthe execution of agreements with each inventor. Given
that we are strategically licensing our core technologies
overseas from the perspective of our projected global
management stance, we also address the risks ofoverseas licensing. The legal systems of emerging
Asian countries are different from the system in Japan.
For example, licensors are responsible for quality/
performance assurance in those countries. In addition tointernal information dissemination, we are implementing
risk management in cooperation with specialized lawyers
who are familiar with situations in those countries.

The Environment

Messages from Outside Directors
and Outside Corporate Auditors

⿎Risk Management for Intellectual Property

Governance

Number of Internal Attendees at Intellectual Property Training Sessions Held in FY2020
Training
Content

Taiheiyo Cement
Corporation
Employees

AffiliatedCompany
Employees

Total

Basic

24

31

Description

18

17

55
35

Total

42

48

90

TAIHEIYO CEMENT REPORT 202055

Governance

CSR Management
Closely Related SDGs

Corporate Framework for CSR

Taiheiyo Cement GroupGRI102-15, 16

The Mission of the Taiheiyo Cement Group is thehighest level concept and guiding principle of ourbusiness activities. Our Business Principles present
more specific guidelines for action based on theMission.
The vision and direction targeting the mid2020s has been established as our vision for the
future based on the Mission to present the value anddirection of the group 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 arelong-term, quantitative CSR targets. We strive torealize our vision and direction based on thesetargets.
*The Mission of the Taiheiyo Cement Group: 01; Business Principles: page 01; CSR
Objectives for 2025: page 21

Basic Policy for Promoting CSR Management

GRI102-16

We promote CSR management in accordance with
our CSR guidelines which specify actions that are
essential for realizing the Mission of the Taiheiyo
Cement Group and implementation of our Business
Principles. The guidelines direct the company inconducting activities in and outside of the businessthat fulfill our social responsibility while we pursue
sustainable growth for both the company andsociety as a whole. Moreover, they lay down basic
policies for promoting CSR management.

CSR Management Promotion System

GRI102-18, 19, 20, 21, 28, 29, 30, 32

Medium-Term
Management
Plan
Business strategies

ess P
rinci

ples

CSR
Objectives
for 2025

Strengthening
management foundation

Basic Policy for Promoting CSR Management❶ 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.

❷ Promoting a corporate culture that places great
importance on compliance, we aspire for all
directors and all employees to always make the mostappropriate independent judgments.
❸ We will manage the company with awarenessthat our social mission includes environmental
protection, defense of human rights and contribution
to communities.
❹ We will proactively engage on key CSR issues andundertake the most appropriate prioritization andresource allocation.

❺ We will practice appropriate information disclosureand communication with stakeholders, based on thestatus of our CSR management promotion, and build
relationships of trust.
❻ We will treat CSR management and promotion as agroup-wide activity.

CSR Management Promotion System (CSR Management Committee and Specialized Committees)
Board of Directors
Core subjects ofChair: President
social responsibility CSR Management Committee Secretariat: CSR group of Generalin ISO 26000
Affairs Department• Human rights• Community involvement• The environment and development• Consumer issues

AuditInternal Auditing Department

Specialized committees

Group companies

Stakeholder
Communication Committee

All business sites

Environmental
Management Committee

Quality Assurance &Product Liability Committee• Human rights• Labor practices

Health & Safety
Committee• Organizational governance• Fair operating practices

Human Rights & Labor
Practice Committee

TAIHEIYO CEMENT REPORT 2020

Busin

Information Security
Committee

56

Visionanddirection

Risk Management &Compliance Committee

To promote our CSR management we have createda cross-departmental CSR Management Committee,
chaired by the president with all board directors andall managing executive officers as members, under
the direct oversight of the Board of Directors.
The CSR Management Committee’s role isto screen CSR action plans and other material
items, and review their progress. Reporting to thiscommittee are seven specialized committees forindividual CSR subjects, each chaired by the director
responsible for that area. The department mostclosely associated with any given issue acts as thesecretariat for the related committee.

Missionof the GroupSpecial Feature

Business Activities

Governance

GRI102-27

November
2019

Companies in
Attendance
100

Topic
· Unconscious bias management necessary forleaders· Creating an organizational culture that does
not lead to compliance issues

G102-11, 12, 13

⿎Global Cement and Concrete Association

⿎Participation in the Industrial Federation for
Human Rights, Tokyo

Main Results of
FY2020 CSR Efforts

The Global Cement and Concrete
Association (GCCA) was foundedin 2018 as a CEO led initiative forthe industry. As a founding member
company Taiheiyo Cement is thesole Japanese cement and concrete manufacturer
participating in the initiative. The association
succeeded the activities of the Cement Sustainability
Initiative (CSI), a sector project of the World BusinessCouncil for Sustainable Development (WBCSD),
in January 2019. Under the strategic partnership,
the GCCA collaborates with the WBCSD towardsustainable development.
The GCCA established six working groups
to develop various guidelines on the themes of
responding to climate change, a long-term roadmap
for CO2 reduction, low-carbon concrete, biodiversity,and health and safety. Through the GCCA we areworking on building a sustainable society by setting
and disclosing CO2 emission reduction targets foreach member company.

CSR Management

Collaboration with External Organizations

As a core member ofthe WBCSD Cement
Sustainability Initiative(CSI) since 2000, we
have been engaged in international activities forsustainable development. Even after the activities of
CSI have been succeeded to the GCCA, we continue
to work as a WBCSD member and exchange thelatest information on ESG with member companies
from a broader perspective.
In addition, we dispatch one person every year
to the WBCSD Leadership Program. So far we havedispatched eight people thereby contributing to thedevelopment of global human resources.

Risk Management andCompliance

Date

⿎The World Business Council for Sustainable
Development (WBCSD)

Board ofDirectors and Auditors

Executive-level CSR Training (FY2020)

In addition, theGCCA launched aresearch network called
Innovandi in 2020 andis expanding research worldwide on sustainableconcrete and cement, which are characterized by
low CO2, as well as the separation and recovery ofCO2. We have also participated in Innovandi since its
establishment.
The challenges that the GCCA and Innovandi
are working on are recognized as one of ourmanagement issues and we are making efforts totake action.

Corporate
Governance

We provide CSR education through training
programs for each position, including sessions
for newly hired employees, follow-up courses forsecond-year employees, career development(around ten years after joining the company)
and training for newly appointed managers. For
education on specific issues such as human rights,
each specialized committee provides the relevant
training programs. We also conduct executivelevel CSR training once a year, including for groupcompanies. Moreover, in order to enhance theirunderstanding of the 2019 CSR Report, we created
and distributed a report summary.

Collaborating with Society

Messages from Outside Directors
and Outside Corporate Auditors

CSR Training and Education

The Environment

We participate in the Industrial Federation for
Human Rights, Tokyo. Established in November
1979, the federation now consists of 123 companies(representing about 1.5 million employees as ofJuly 2020), most of which are headquartered inTokyo. Under its basic philosophy of voluntary
management and full participation, the federation
endeavors to resolve the issue known as Dowa, adiscrimination issue in Japan, and other humanrights issues.

TAIHEIYO CEMENT REPORT 202057

Governance

CSR Management Main Results of FY2020 CSR Efforts GRI102-11, 44
Results

Evaluation

See
Also

● Responded to by the Environmental Management Committee, which conducted a review during the meeting○

PP. 50-52

Plan
Organization

Risk Management & Compliance Committee

1. Strengthen promotion activities by executing a plan for company-wide risk countermeasures● ​Leakage of pollutants and dangerous substances● Enhancement of information security● Product/service accidents● Aging of facilities and equipment

Organizational Governance and Fair Operating Practice● Preventing traffic accidents● Strengthening measures for overseas crisis

management● Enhancement of group corporate governanceincluding risk management and the compliancesystem● Work-related accidents● Response to shortage of human resources● Respect for intellectual property rights andstrengthening risk prevention● Completed a smooth transition to Windows 10 at the company level● Conducted information security level surveys across the entire group and strengthened follow-ups andcountermeasures based on the results● Conducted training on response to the risk of theft of confidential information by targeted attacks as well as to suspicious emails● Amended and distributed each quality assurance standard for cement, cement-related products, and mineral resources products● Monitored the data transition of each existing product and continued to follow up in order to prevent abnormal values● Completed the establishment of a voluntary inspection system for group companies and received andapproved a report on inspection results from the department in charge● Dismantled idle equipment● Responded to by the equipment division and relevant division of non-operating business units; thecommittee conducted a review during the meeting● Secured supplies in high-risk dispatched countries● Completed updating evacuation judgment standards and evacuation execution tools in Papua New Guinea and the Philippines● Formulated the Bribery Prevention Regulations (Draft), which we plan to start administering soon while also
continuing to discuss the draft● Conducted a compliance session at a lecture meeting for top executives of the group in November and at aworkshop for risk compliance promotors in November● Conducted education and awareness-raising training for branch managers and those in charge ofenvironmental business at branches in order to continue their waste business● Achieved zero fatalities; however, the number of accidents was the same as previous years due to thefrequent occurrence of heat stroke and rule violations● Exchanged opinions on various measures to secure and retain employees● Conducted basic training on intellectual property rights and posted teaching materials and Q&A on
copyrights for all business site managers and employees

2. Continuous improvement of risk management using PDCA cycle● Continuous improvement of promotion activities

using a PDCA cycle

Organization● Implemented a PDCA cycle at our business sites and group companies● Provided training on practical PDCA implementation for risk compliance promoters● Revised the PDCA implementation entry form to better detect one’s own risk and implement efforts○

PP. 53-54○

PP. 50-52○

PP. 50-52○

PP. 50-52○△○○

PP. 50-52

PP. 50-52○

PP. 50-52○

PP. 54-55○○

PP. 50-52

PP. 50-52

Information Security Committee

1. Enhance Information Security Management System (ISMS) and ensure its ongoing operation and improvement● Maintain and manage the company’s information

security● There were no cases that required the holding of the committee’s extraordinary meeting● Revised the Mobile PC User Guidelines and created the Cloud Service User Guide● Conducted an annual disaster recovery drill○● Result of information security level survey: 2.8 (average) (last year: 2.8)
● Strengthen group information security structure● Explained the Information Security Countermeasure Guide and the Cloud Service User Guide at a meeting ofgroup companies’ information divisions● Made follow-up visits to two group companies: Taiheiyo Rikuso Corporation and Oita Taiheiyo Mining Corporation● Presented improvement measures to each overseas group company based on the FY2019 survey results in△

PP. 53-54

order to improve the information security level of those companies

2. Implement countermeasures for security, accidents and failures based on the plan
● Improve the security level by implementing

information security-related projects● Upgrading the company system to Windows 10 is expected to be completed within FY2020● Vulnerability diagnosis was conducted by external experts, and we implemented training on targeted attack emails

3. Conduct education/training/awareness-raising programs● Raise employee awareness of security across thegroup● Conducted information security training in position-specific courses● Published security news

● Provided security news materials and in-house security education materials to group companies○

PP. 53-54○

PP. 53-54

4. Monitor and assess the status of information security● Promote the appropriate use of information

through periodic monitoring● Conduct an internal audit on information security● Following the change of the anti-virus software, the number of cases of detection and preventing the openingof attachments in viral emails improved● Monitored file transmissions to external parties and monitored suspicious application transmissions by exit

countermeasures; no incidents were found● Neither paper audits nor on-site audits were conducted

5. Continue operation and improvement of the Personal Information Protection Management System● Set up a task force and respond to issues when necessary● Verify and respond to the state of compliance,

education and audits

Organization● Loss of company smartphones: 0 in 1st half, 1 in 2nd half (discovered immediately, so there was no possibility of leakage.)● Enabled SSL for our website and revised the content of the “Handling of personal information" on the site○×

PP. 53-54○

PP. 53-54○

PP. 79-80

○

P. 79

○

PP. 79-80

Human Rights & Labor Practices Committee

1. Raise human rights awareness and continue training programs throughout the group● The Industrial Federation for Human Rights

Human rights training courses by position and other training type (attendees included group company employees):(1) A lecture for CSR executives in November on creating an organizational climate that does not cause complianceissues (lecturer: Shigetaka Matsumoto, Business Consultants, INC.): 138, (2) Training for new employees in April:
108, (3) Communication + on-the-job training (employees with a three-year career: 91, those with a four-year
career: 81 (5) Career development training (leader and sub-leader): 43, (6) Training for newly appointed managers
in August: 42, (7) Training for foremen in February: 20, and (8) Techno-school special lecture in July: 5
Conducted a variety of seminars:(1) Video seminar to clarify the roles of human rights awareness promotion committee members andharassment consultation members(2) “Unconscious bias seminar” to make all business site managers and those in management and nonmanagement positions aware of unconscious bias
(3) Anger management video seminar● Established a new way to use the consultation service on our portal site to increase the transparency andawareness of the process after a harassment consultation● Created a pocket-sized list of don’ts that comprise standards of harassment and distributed it to all employees in July
(1) Supported seminars for employees in each position by lending DVDs (a total of 15)(2) Regularly provided related materials: distributed the public relations magazine by the Industrial Federationfor Human Rights, Tokyo to each business office and group company in June and December● Actively participated in various seminars and group meetings of the Industrial Federation for Human Rights
and the Corporate Federation for Dowa and Human rights issue, Osaka● Hire new persons with disabilities based on the Medium-● Carried out recruitment in cooperation with recruitment sources, public employment agencies, special-needs● Respond to issues related to special purpose● Number of hires by each company: Taiheiyo Service Corporation (1 person), Kamiiso Kogyo Corporation● In-house training and awareness raising

Human Rights and Labor Practices● Consider and implement measures to prevent therecurrence of harassment● Training and raising of human rights awareness forgroup companies

2. Continue to achieve statutory employment ratio for persons with disabilities and promote their working opportunities
term Employment Plan for Persons with Disabilities
subsidiaries

schools for people with disabilities, and employment support agencies(Expected to hire 1 person in April 2020), Nippo Onoda Corporation (1 person, counted as 2 due to severity)

3. Report the state of initiatives to address issues related to human rights and labor practices● Report the latest state of initiatives for theempowerment of women, work style reform, andgroup-wide improvement of operational efficiency
and efforts with regard to human rights and various
labor-related issues in the promotion of group
human resources● Report the state of implementation of education/

training and global human resource development
programs based on the new training system● Report the state of initiatives to promote the healthof employees● Progress of CSR Objectives for 2025

TAIHEIYO CEMENT REPORT 2020

P. 79

○

P. 81

○

PP. 79-82

○

P. 80

△

PP. 82-83○

P. 09
PP. 80-83

○

P. 81

● Conducted an initiative to change summer lifestyles from June to October● Promoted the wider use of the flextime system and Early Leaving Office Day (Wednesday and Friday)

throughout the year, and conducted the Premium Friday initiative● Held the fourth Diversity Forum (October)● Conducted a work-from-home trial (July to December)● Revised the Elder Temporary Employee Regulations (September)

Dispatched employees based on our new global human resource development program:● Overseas technical trainee program: 4 from the Philippines, 4 from Vietnam and 2 from the U.S.
● Overseas language study program: dispatched 2 employees to the U.S.

● Overseas internship program: Malaysia in June (6 people), Malaysia in November (7 people)● Working to operate and develop data for the selected health management system● Working to reduce the risk of lifestyle diseases and prevent mental health diseases● Increase the ratio of female employees under “career track” categories to at least 30%; FY2020 20.3% (14 of

69 new recruits); FY2021 20.9% (14 of 67 new recruits)● Increase the ratio of female employees to at least 10%: 9.0%, as of February 11, 2020 (210 of 2,346 employees)● Increase the ratio of newly appointed female managers to 10%: 3%, (1 of 33 employees) as of March 11,

2019; 8% (2 of 25) as of March 11, 202058○

Special Feature

Business Activities

GovernanceCollaborating with Society

Evaluation

See
Also

△

P. 09
PP. 86-88○

PP. 86-88● Although the standardization of countermeasures was carried out, similar or recurrent accidents occurred; it△

PP. 86-88

Results: conducted stress checks, performed a risk assessment when handling chemical substances, andestablished health information management guidelines○

PP. 82-83● Reviewed and revised each of the regulations on cement and cement-related and mineral resources products○

PP. 76-77

Plan
Organization

The Environment

Results

Health & Safety Committee(1) Fatalities for the group: zero (CSR Objectives for 2025)(2) Lost-time injuries for the group: 30 or less(3) Number of work-related accidents for the group: 80 or less

(4) Absence rate (non-consolidated): 0.6%
2. Promote health and safety activities● Group-wide basic safety activities to achieve CSR

Objectives for 2025
● Promote concrete activities to reduce accidents● Provide and share information quickly after an
accident occurs● Horizontal roll-out of countermeasures taken by
the business site where an accident occurred● Prevent the occurrence of serious or frequentwork-related accidents at specific business sites
and affiliates

3. Review the health and safety system● Standardize countermeasures taken after an

accident occurs

4. Promote compliance● Ensure that the requirements of the central

government and administrative bodies are met

Quality Control Committee● To prevent the recurrence of accidents, discussed and developed measures to be rolled out horizontally

while taking into account the frequency and seriousness of accidents; FY2020: (1) Fatalities: 0, (2) Lost-time
injuries: 29, (3) Number of work-related accidents: 94 (4) Absence ratio: 0.580%● Conducted safety patrols at group companies.

● Results: (1) Domestic: 3 ready-mixed concrete companies, 2 building materials companies and 2 othercompanies, (2) Overseas: 1 ready-mixed concrete company and 3 plants● Distributed messages about National Safety Week, National Occupational Health Week and the no-accident campaign

at year-end and during the New Year holidays, horizontal roll-out of safety and health measures throughout the group● Disseminated information and alerts using the company-wide bulletin board, reported on accidents at thecommittee, and shared information using an accident information database.
● Supported accident prevention measures implemented by the business site where an accident occurred, sent
safety notifications under the chairperson’s name, and conducted patrols onsite to prevent recurrence● Enhanced management by designating business sites that required special attention in the areas of safety and security, and conductedsurveys and provided guidance about safety to business sites and affiliates that were designated as requiring special attention
is therefore necessary to sustain the measures going forward

1. Quality assurance system● Improve the system: establish an assurance system

to reduce risks● Ensure the operation of QMS (ISO 9001) related

to the cement business and continue external
examination and certification

2. Quality Risk Management● Establish quality standards that meet customer needs

problem occurs

3. Quality Compliance Management● Reviewed and formulated the rules of the method to manage business sites positioned as subcontractors in○● Reviewed the quality standards in Quality Assurance Regulations○

line with the streamlining of operations○● Reviewed the creation of the Manual for Emergency Response for all products● Conducted product safety tests and appropriately reviewed test contents to ensure 100% compliance with in-● Be sure to comply with revisions to standards,

notifications, etc.

house standards for minor components and radioactivity concentrations● Shared information on plans and revised notifications with related departments and promptly responded torevised regulations and new standards

4. Countermeasures for quality deficiency and complaints● Initiatives to improve customer satisfaction● Quality deficiencies of cement products, cement-

related products, and mineral resources products
For FY2020 results, *() indicates target values.

5. Response related to group companies● Improve quality assurance system for groupcompanies

Organization● Implemented thorough corrective and preventive measures and promoted measures to prevent solidificationand foreign material contamination in plants, SS and logistics[Mineral resources products][Cement products](1) Serious claims: 0 (0)(1) Serious claims: 0 (0)(2) Claims: 11 (10)(2) Claims: 4 (0)(3) Quality deficiency: 16 (15)(3) Quality deficiency: 6 (0)[Cement-related products](1) Serious claims: 0 (0)(2) Claims: 0 (0)(3) Quality deficiency: 0 (0)PP. 77-78○

PP. 76-78

○

○
△
△

● Established an appropriate quality data management system through voluntary inspections of group

PP. 76-78

PP. 76-77
PP. 84-85

PP. 76-78

companies and held briefing sessions on data fraud prevention

and evaluate EMS

2. Countermeasures to mitigate climate change● Reduce greenhouse gas emissions (CSR Objectives

for 2025): reduce CO2 emission intensity by 10%
or more from FY2001 levels by FY2026

3. Measures for environmental risk (mercury)● Support compliance● Start consideration for legal revision● Formulated compliance plans and assessed compliance● Formulated an internal environmental audit plan and conducted an internal audit● Appointed and educated EMS personnel, conducted EMS internal auditor training and follow-up training● Clarified the FY2019 results by dividing domestic and overseas cement manufacturing bases● Clarified the actual results of energy consumption per unit of cement production and achieved the budget● Introduced energy-saving equipment and supported investment● Supported an alternative waste expansion plan for fossil energy● Considered a menu and announcement method for further reduction measures● Continued to measure and deal with mercury based on the law and continued to control the amount of mercury input from raw materials● Considered and proposed a management method through a long-term evaluation of continuous measurement data

4. Education, awareness raising and information dissemination regarding the environment● Collect and provide information on global

environmental issues

5. Promote initiatives across the group● Establish and enhance the development of anenvironmental management group● Conducted initiatives related to Environmental Month (distributed the president’s message; enhanced theenvironmental portal site; reduced electricity consumption; raised awareness of biodiversity; and reported
these initiatives in an in-house newsletter)● Promoted the reporting of emergency information, rolled out recurrence prevention measures across thegroup, and developed the response to legal changes affecting group companies

Stakeholder Communication Committee

1. Activate communication within the company● Instill the management policy● Held discussion sessions with executive officers at all business sites with 1,168 participants; the session at theheadquarters was held in a talk format with a freelance announcer● Disseminate company activities

2. Develop and publish the CSR report● Publish CSR Report 2019 in Japanese at the end of

September and in English at the end of October

3. Response to the SRI Survey, etc.
● Respond to principal CSR-related external surveys

such as the ESG investment survey● Distributed a summary of the CSR Report 2019 to all employees● Disclosed the report in accordance with the GRI standards and improved our disclosure based on DSJI results;

published the CSR report in Japanese at the end of September and in English at the end of October; received
the award for excellence in the Environmental Reports category of the Environmental Communication Awards● Responded to DJSI, CDP, the Japan Research Institute, Toyo Keizai, the Good Bankers Co., Ltd., etc., and wasselected as an excellent company in the Asia Pacific region in the DJSI survey for the sixth consecutive year;
and acquired the DBJ environmental rating Grade A for the fifth consecutive year

4. Promote communication with society● Promote activities to communicate with local

communities● Participated in volunteer activities for cleaning the Daiba Ward district where the headquarters was located

5. Promote Committee’s activities at group companies● Create means to exchange information on groupcompanies’ activities.

Others● Hold a CSR Workshop for group executives● Periodically report relevant information about groupcompanies to local communities (twice per year)● Hold group legal roundtables● Created a section for introducing group companies in our in-house newsletter and started to exchange

information● Held in November (100 companies participated)● Implemented in April and October● Held the 28th roundtable on legal issues related to labor practices in July (19 participants from 11 companies)● Held the 29th roundtable on communication with authorities in responding to corporate scandals—criminal

plea bargains, antimonopoly leniency and commitment procedures—and provided a practical response to theamendment in November (example of contract clause) (86 participants from 84 companies)○

PP. 60-61○

P.09
PP.24-25
PP.62-63○

PP.24-25
PP.64-65

○
○

P.70
P.70

○

P.61

○

─

○

P. 83

○

P. 01

○

─

○

PP. 89-91

○

─

○

P. 57

○

P. 53

○

○

Main Results of
FY2019 CSR Efforts● Formulate and publish a long-term climate change vision● Formulated an environmental management policy and company-wide environmental goals

CSR Management● Set EMS objectives and targets, and plan, operate

Organization○

Environmental Management Committee

1. Promote company-wide EMS

Organization

PP. 76-77
P. 52
P. 76

Risk Management andCompliance

Quality, the Environment, Consumer Issues, Community Involvement and Development● Ensure product safety

P. 76

Board ofDirectors and Auditors● Appropriate response when a serious quality● Conducted group training to ensure smooth operations of the QMS system in July and September

Corporate
Governance

Organization● Held the company’s Health & Safety Committee every quarter and verified statistical data.

Messages from Outside Directors
and Outside Corporate Auditors

Human Rights and Labor Practices

1. Companywide Health & Safety Committee—Objectives

P. 57

─

*The content in the “Results” column has been prepared using information reported by specialized committees as of the end of March 2020.

TAIHEIYO CEMENT REPORT 2020

59

The Environment

Environmental Management
Closely Related SDGs

Environmental Management Policy

Company-wide Environmental Management System (EMS)

Our environmental management policy declares anactive commitment to environmental issues facing
society, including not only preventing pollution but
also creating a recycling-based society, mitigatingclimate change, reducing environmental impacts,
protecting water resources and conserving
biodiversity as key management challenges. Under
this policy we are focusing on improving ourenvironmental performance.

In June 1997 Taiheiyo Cement initiated ISO 14001
certification of each of its plants and attained 100%
certification by 1999. Recognizing, however, that plantlevel management systems alone are insufficient toensure comprehensive environmental protection
through environmental management projects, we built
a companywide environmental management system(EMS) and extended it beyond plants to cover ourheadquarters, branches and Central Research Laboratory.
In April 2009 our EMS was ISO 14001 certified by
the Japan Testing Center for Construction Materials,
an independent third-party testing, standardizationand certification authority. As part of the continuing
certification the company-wide system underwent a
renewal audit for the third time in March 2018.

Environmental Management Policy
In January 2006 we created an Environmental
Management Policy, reflecting the fact that we consider
an active commitment to the environmental issues
facing society to be key management challenges. In
addition to initiatives emphasizing these six items in all
business operations, we strive to communicate with awide range of stakeholders, from international society
to local communities, and to seek the ideal form for asustainable cement industry as a member of the WBCSD
and GCCA (Global Cement and Concrete Association).
Created in January 2006
Revised in April 2019

❶ Pursuing Environmentally Conscious Business Activities
In pursuit of zero environmental impacts we target the
impacts of our business activities, including those of thevalue chain, which are emitting GHGs, pollutants, noiseand vibration, withdrawing water, degrading forest andothers. We promote the introduction of eco-efficienttechnologies into our business and the development of
eco-conscious products as a member of both the regionaland global society.

❷ 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.

❸ Contributing to a Recycling-based Society

Leveraging the inherent capabilities of the cement
industry, we actively recycle industrial and municipal
wastes as raw materials and fuels for cement production.

❹ 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.

❺ Promoting Global Technology Transfer

Top management (officer in charge of the Production
Department) chairs the Environmental Management
Committee with ultimate decision-making authority
for environmental management. Overseen by theEnvironmental Management Committee, the relevant
headquarters division manages our plants, mines andbranches using an “umbrella” system. Each groupcement company in Japan and overseas is committed
Company-wide EMS Readiness
Environmental Management Committee
Environmental Administration Group, Production Department

Top management officer incharge of the Production
Department
EMS secretariat

Production Department, Mining Department, General Affairs
Department, Administration Department and Sales Department of
Cement Business Division, Sales Department, Mineral Resources Business
Department, and Environmental Business Development Department

PlantsMines

Branches

Taiheiyo Cement Group’s Environmental Targets

Other
departmentsinheadquarters

Central ResearchLaboratory
GCCA

CO 2 Emission Reduction Targets

Cement production-related CO2 emissions from Taiheiyo Cement andgroup companies

Through the worldwide transfer and deployment of ourtechnology, we aid the development of greater energy
conservation, environmental preservation and utilizationof waste materials.

Reduce specific net CO2 emissions per tonne of cementitious product by 10%
or more from FY2001 levels by FY2026 (CSR Objectives for 2025).

We strive to protect the ecosystem, including biodiversity,
by providing products and technologies that contribute toharmonious coexistence with nature.

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

60

⿎EMS Readiness

TAIHEIYO CEMENT REPORT 2020

Reduction Target for Main Air Pollutants

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

Special Feature

Business Activities

Governance

The Environment

Collaborating with Society

or penalties or significant accidents that affected theenvironment including animals or plants. However,
we had two accidents (cement dust) and took
measures to prevent these accidents from recurring.

⿎Internal Environmental Audits

Each plant maintains emergency responseplans in preparation for possible environmental
accidents. They also conduct training, including
periodic fire-fighting training in cooperation withlocal fire departments. Other training includes
how to reduce environmental impact when an
environmental accident occurs and how to report itto a government entity.

Noise

Water quality

25

In FY2020 we had no legal or regulatory violations
related to the environment that were subject to fines

15
10

Odor

29
19

20
GRI307-1

Vibration

10

28

6
4
1
9

8

5
0

Other complaints

Material Balance ofBusiness Activities

Air/dust(Number of complaints)
30

Non-consolidated

Environmental
Accounting

1. 環境苦情件数の推移

Appropriate Use of
Water Resources

⿎Environmental Accidents

Number of Environmental Complaints Received

Reducing
Environmental Impact

Compliance with Environmental Laws

As we increasingly utilize wastes and by-products
and they become more diverse, the number ofenvironmental issues we need to consider also
increase. Therefore, we are ramping up our efforts to
reduce environmental impact through activities suchas introducing indoor storage and sealed containers
for waste and by-products, and improving our fluegas stacks. When we receive an environmental
complaint we quickly travel to the site in question,
whenever possible, to check the situation,
investigate the cause and provide an explanation.
When we find that our activities are the cause, we
implement improvements.
In FY2020 our cement plants received 104
environmental complaints. We responded to 28 ofthese, which were associated with our operations.
The number of complaints received in FY2019
increased from the previous year due to a change
in the counting method. However, the number in
FY2020 remained unchanged from the previous
year.

Conserving Biodiversity

During Environment Month each June we deliver amessage from the president and provide educational
materials on the environment page of our portalsite to increase awareness and encourage learning
about the environment, and about environmental
preservation activities throughout the group. Each
workplace also engages in a number of different
activities, such as conducting training sessions related
to accident response, viewing environment-relatedDVDs, holding
lectures and taking
part in local cleanup
activities. In FY2020
more than 370
activities took place,including groupcompanies’ activities.
Oil spill training (Kumagaya plant)

⿎Environmental Complaints

Recycling Waste andOther Materials

⿎Environmental Education

⿎Response to Environmental Accidents

Mitigating Climate
ChangeIn FY2020 we conducted internal environmental audits
at all our sites.
As priority items from this year’s audit, confirmationof legal compliance reviews, external communications
and corrective actions for unachieved items wereidentified as company-wide concerns. The status of afollow-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
the compliance status of a service stations was identified
as an item that must be dealt with by branches.
The audit identified 21 findings including 6 forwhich improvements were requested. Corrective actions
were taken for all 6 findings for which improvements
were requested.

Environmental
Management

to environmental preservation. Over 90% of thegroup’s total cement output in FY2020 was producedin ISO 14001-certified plants. Facilities in countries
where ISO is not adopted as the mainstream standard
operate their own EMS.

8
2016

2017

2018

2019

2020

(FY)

TAIHEIYO CEMENT REPORT 2020

61

The Environment

Mitigating Climate Change

GRI103-2, 3, 12

Closely Related SDGs

Greenhouse Gas Emissions and Achievement of Our CSR Objectives for 2025

Efforts Related to the Cement Production Process

Among the total greenhouse gas emissions generated
by our domestic group companies (excluding power
generation companies) that are reporting theirgreenhouse gas emissions by business segmentin accordance with the Act on Promotion of Global
Warming Countermeasures, about 95% of greenhousegas emissions were generated from cement production
companies in FY2017.* The amount of greenhousegas emissions associated with our service stations,
headquarters, branches and shipping, as well as
electricity purchased by the group, was around 5% in
FY2020. Under Scope 3 (value chain) calculations for
cement, for which downstream value is not calculated
since cement is considered an intermediate product at
this stage, the emissions were around 5.0% of Scope 1
and Scope 2 (direct air emissions) in FY2019.
The bulk of greenhouse gas emissions associatedwith the operations of our group companies is CO2from cement production. We are therefore working to
reduce emissions from cement production, as indicatedin our CSR Objectives for 2025, in order to achieve ourlong-term quantitative target of reducing specific net
CO2 emissions per tonne of cementitious product by
10% or more from FY2001 levels by FY2026.
Some of our plants are taking part in the target
setting type emissions trading program for Saitama
Prefecture and California’s cap-and-trade program,striving to achieve the reduction targets. To support
voluntary approaches we are also working in line withKeidanren’s voluntary action plan and the measures toreduce greenhouse gas emissions established by the
WBCSD and GCCA.

Not a less amount of carbon dioxide is generated in
the course of cement manufacture. This is because
the production process requires a high temperatureof 1,450°C and limestone, used as raw material, isdecarbonated through a chemical reaction during
the calcination process (CaCO3 → CaO + CO2). About
35% of CO2 emissions generated during cement
production are from the consumption of energy,
about 55% are from the calcination of raw materials
and about 10% are from electricity use. To reduce
CO2 emissions we have been working to conserve
energy by installing energy-efficient equipment
and improving the stability and efficiency of ourkiln operations. We have also been implementing
measures such as using waste- and biomass-derived
energy sources to decrease our rate of use of fossil
fuels. Moreover, we are moving toward using recycledresources with less carbonate content to bring down
CO2 emissions from the calcination of the limestone
used as raw material, and have started using WHR
power generation to tackle CO2 emissions associatedwith conventional electricity generation.
Specific heat consumption was reduced in
FY2020 delivering a reduction in CO2 emissionsof 4-kg-CO2/t cementitious product comparedto FY2019, mainly as a result of a decrease in theclinker-to-cement ratio.

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

*Most of our overseas affiliated companies are cement production companies so the total
CO2 emissions from production overall is higher than that of domestic companies alone.

2.

Reduction rate of speciﬁc net CO2emissions（%）

10

Target

3. セメント製造によるネットCO₂排出原単位および排出量

GCCA

Speciﬁc emissions

Emissions（kg-CO2/t-cementitious）(1,000t)

725
700

692

31,94650,000683

679

21,91422,440671

22,624675
22,82740,00030,000650

20,000625

10,000

0

2016

2017

2018

2019

2020 (FY)0

Guidelines: GCCA「GCCA Sustainability Guidelines for the monitoring and reporting of CO2
emissions from cement manufacturing Ver. 0.1」

8
6

⿎Efforts to Save Energy

4
2

62

Specific Net CO2 Emissions per Tonne of Cementitious Product

675[CSR目標2025] CO₂排出削減目標の達成度

Progress in Meeting CO2 Reduction Targets in our CSR Objectives for 2025

0

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

2001

2006

2011

TAIHEIYO CEMENT REPORT 2020

2016

2021

2026

(FY)

Specific heat consumption of clinker production
by the group’s cement plants in FY2020 decreasedby 30 MJ/t clinker from the previous year’s level to3,298 MJ/t-clinker.

Special Feature

Business Activities

GovernanceRatio
of Alternative
Fuels and Biomass Fuels
・バイオマスエネルギー使用率
6. 代替化石

GCCA

Speciﬁc heat consumption

Fossil Fuels（MJ/t-clinker）

3,500
3,300

3,288

3,306

2,700
0

2,779
2016

2,873
2017

2,858
2018

2,817
2019

10

2,832

5

2020 (FY)Guidelines: GCCA「GCCA Sustainability Guidelines for the monitoring and reporting of CO2
emissions from cement manufacturing Ver. 0.1」

Amount of electricity

（GWh）

600

14.0
476

14.1
480

13.2
480

13.5
483

10.3

(%)
15
10

200
0

5
2016

2017

2018

2019

2020 (FY)0▪ Use of Alternative Energy Resources and Alternative Raw Materials

12.0

12.3

2.2
2016

1.8
2017

1.8
2018

1.8
2019

1.8
2020

Guidelines: GCCA「GCCA Sustainability Guidelines for the monitoring and reporting of CO2
emissions from cement manufacturing Ver. 0.1」

Reduction of Specific CO₂ Emissions by Replacing Limestone
2015 Raw20162017
2019 (FY)GCCA 2018
with
Alternative
Materials
7. 石灰石の代替原料によるCO₂排出原単位の削減
Reduction of speciﬁc CO2 emissions（kg-CO2/t-clinker）

10

7.0

8.0

8.4

8.2

8.2

2017

2018

2019

2020

5
0

2016

(FY)

Guidelines: GCCA「GCCA Sustainability Guidelines for the monitoring and reporting of CO2
emissions from cement manufacturing Ver. 0.1」

Reducing CO₂ Emissions during Transportation
GRI305-3

We contract the delivery of our raw materials andproducts to transportation companies and are
striving to reduce CO2 emissions as a specified
consigner designated under the Japanese Energy
Saving Act. Major efforts include implementing aplan to transport goods on return trips, encouraging
drivers to eco-drive, and promoting energy efficientdevices such as digital tachometers and eco-tires on
vehicles. In shipping we continue to pursue energy
efficiency technologies and operate new ships thatare equipped with many energy-saving features. We
are also supporting energy-saving operations forconventionally powered ships.
In FY2020 our CO2 emissions decreased by about
3% compared to FY2019, mainly due to a 3% decreasein both the distance and tonnage transported.
CO2 Emissions by Mode of Transportation (FY2020)
Non-consolidatedMode oftransportation

Tonnagetransported(1,000t)

Average
Distance
Transported(km)Transported
Tonne ×Kilometer(1,000t × km)

Material Balance ofBusiness Activities

In FY2020 non-fossil energy and biomass energy
accounted for about 14.1% of all energy used forgroup kilns. A decrease of about 8.2 kg-CO2/tclinker was also achieved by using alternative raw
materials. As a result of using both alternative
energy resources and raw materials, reductions in
CO2 emissions are expected to reach 1.47 million
tonnes (emission factor for coal: 0.096 kg-CO2/MJ).

11.6

Environmental
Accounting

Guidelines:：GCCA「GCCA Sustainability Guidelines for the monitoring and reporting of CO2
emissions from cement manufacturing Ver. 0.1」

11.3

Appropriate Use of
Water Resources

400

494

Rate of substitution

13.3

Reducing
Environmental Impact

5.

GCCA

14.1

Conserving Biodiversity

Total electric power generated by WHR power
generation systems at the group’s cement
production companies in FY2020 increased by
3 GWh from FY2019 to 483 GWh. Its ratio to allelectricity consumed in the production of cement
was 13.5%. We were therefore able to reduce CO2
emissions by about 333 thousand tonnes in FY2020
compared to purchased power generated fromcoal-fired power plants (emission factor: 0.69 t-CO2/
MWh).

0

13.8

13.5

13.1

Recycling Waste andOther Materials

⿎Use of WHR Power Generation Systems

Electricity
Generated by Waste Heat
廃熱発電量

15.5

Alternative Fuels
Biomass Fuels

Mitigating Climate
ClimateChange2,900

Ratio of alternative fuel use to all fuel use for our kilns

15

3,100

GCCA

（%）

20

3,298

3,268

3,303

Collaborating with Society

Environmental
Management

SpecificHeat Consumption of Clinker Production
クリンカ製造のための熱量原単位
4.

The Environment

CO2Emissions(1,000t)

Ship

17,732454

8,048,146

118

Truck

15,23353

806,91246

Railway

5,450

27

147,418

3

Total

38,415234

9,002,476

167

TAIHEIYO CEMENT REPORT 2020

63

The Environment

Information Disclosure Based on the Recommendations of the TCFD (Scenario Analysis)
GRI102-11, 12, 103-2, 3, 201-2

In June 2019 we announced that we support the recommendations of the TCFD*.
*Task Force on Climate-related Financial Disclosures: Established in 2015 by the Financial Stability Board (FSB)
to promote the disclosure of climate-related financial information. In 2017, for the appropriate investment
decisions of investors, the TCFD published recommendations to promote disclosure of information on thefinancial impacts of climate-related risks and opportunities.

greenhouse gas emissions reduction toward 2050.
In June 2019 we announced that we support
the recommendations of the TCFD. Following its
recommendations we conducted an evaluation andseparate analyses, including scenario analysis, of theGroup’s climate-related risks and opportunities.

The Taiheiyo Cement Group has identified a
response to climate change as a top priority. The
Group’s efforts are based on three scenarios for
reducing CO2 emissions: application, development
and innovation to achieve the reduction target of
cement-related CO2 emissions that we state in our
CSR Objectives for 2025 and long-term vision of
TCFD Content Index
Recommended disclosures
Governance
The organization’s governance around climate-related risks andopportunities

Strategy
The actual and potential impacts of climate-related risks and opportunities
for the organization’s businesses, strategy and financial planning

Our disclosure● Corporate Governance (pages 45–46)● Risk Management (pages 50–52)● CSR Management Promotion System (page 56)● Company-wide Environmental Management System (pages 60–61)● Top Commitment (pages 11–13)● Recognition of Our Business Environment (Risks and Opportunities) (pages 16–17)● Progress of the Medium-Term Management Plan and CSR Objectives (pages 20–21)● Special Feature 1: Taiheiyo Cement Group Efforts to Mitigate Climate Change (pages 24–27)● Business Activities (pages 30–41)● Initiatives Based on the Recommendations of the TCFD (pages 64–65)

Risk Management
How the organization identifies, assesses, and manages climate-related
risks

Metrics and Targets
Metrics and targets used to assess and manage relevant climate-relatedrisks and opportunities

⿎Setting Scenarios● Risk Management (pages 50–52)● CSR Management Promotion System (page 56)● Company-wide Environmental Management System (pages 60–61)● Initiatives Based on the Recommendations of the TCFD (pages 64–65)● Progress of the Medium-Term Management Plan and CSR Objectives (pages 16–17)● Our Long-range Vision of Greenhouse Gas Emissions Reduction toward 2050 (pages 24–25)● Mitigating Climate Change (pages 62–63)● Environmental Accounting (page 73)● GCCA Key Performance Indicators (page 92)

We focused our scenarios, evaluation and analysis
on the business risks and opportunities that climatechange will pose to the Group by the year 2050. We
sorted out events that will materially impact climaterelated risks and opportunities, based on climaterelated, long-term scenarios founded on science,such as the World Energy Outlook (WEO) and
Energy Technology Perspectives (ETP) publishedby the IEA and The Fifth Assessment Report (AR5)published by the IPCC. Then we created two
climate-related scenarios, 4°C and 2°C, that will have
impact on the business operations of the Group. To
follow up, we analyzed the business impacts in every
scenario by size and time horizon (short, medium
and long).

64

TAIHEIYO CEMENT REPORT 2020

Process of Selecting Material Climate-related Risks andOpportunities and Scenarios

STEP

1

Conduct a benchmark survey on recognizing climaterelated risks and opportunities for the cement sector
and identify relevant drivers.

STEP

2

Determine the causal relationships between climaterelated drivers, interim outcomes and implications. Then
identify key drivers.

STEP

3

Create climate-related scenarios for each key driver,referring to the published climate-related long-term
scenarios that were developed based on scientific grounds.

STEP

4

Evaluate the anticipated business impacts in eachscenario.

STEP

5

Review responses to the business impacts, which are,in our view, positively or negatively significant to ourevaluation.

Special Feature

⿎Scenario Overview

Business Activities

Negative
impacts

Governance

Large

Category

MediumSmall

The Environment

Positive
impacts

Large

Drivers

Collaborating with Society

MediumSmall

4°C

Unknown ━2°C

Negative

Positive

Negative

Positive

━

━

━

━

━

● Carbon pricing (carbon taxes, emissions trading program)● Reinforcement of regulations on CO2 emissions

Environmental
Management

Policies for mitigatingclimate change● Reinforcement of recycling-related regulations● Including the regulations on export/import of waste● Progress in the development of technology for CCUS (carbon capture, utilization

Technologies

and storage)● Increased competition in developing new cement materials and low-carbon● Growing population in emerging markets; urbanization and trend toward compact

Population, economy
and geopolitics━● Declining utilization rate of coal-fired power stations

Recycling Waste andOther Materials

Society andInfrastructure

cities in Japan due to declining birthrate and aging population.

● Such as dissemination of EVs and autonomous driving● Improved awareness of recycling

Long term Rises in average atmospheric temperature and seawater temperature andsea level rise.

● A larger number of animals that transmit infectious diseases in wider areas● More frequent urban heat island effects due to changes in urban conditions● Reduction in national land due to sea level rise

Short term More frequent heavy rains, drought, typhoons and flooding

4℃

4℃

Global cement demand continues
to grow due to growing populations,urbanization and the increased scale
and frequency of natural disasters.
In renewing cement manufacturing
facilities, energy-saving equipment
is introduced and capacity for the
production of blended cement
using less clinker is increased.
Moderately low carbon taxes andmarket emissions prices discouragebusinesses from introducing CCUS
(CO2 capture, utilization and storage).
The process-derived CO2 emissions*
per unit of cement output stay at thesame level as the present.

Greenhouse gas emissions
continue to grow, which makes it
difficult to mitigate climate change.
Flood damage associated withoverflowing rivers and storm surges
increases due to the rise in global
average temperature and sea level.
Flooding occurs more frequently
worldwide due to torrential rains
and massive typhoons. While ourmanufacturing and supply systems
must be reinforced, demand remains
strong for cement and concrete
to strengthen urban and national
resilience.

2℃

2℃

Greenhouse gas emissions arelimited to the level that theirconcentration meets the 2°C target.
Physical impacts due to a 2°C risein average temperature, however,cannot be avoided. Changes inrainfall patterns also continue.
Consequently, the production andsupply system for cement andconcrete must be enhanced. In
parallel with mitigation actions,
adaptive measures are required
for enhancing urban and national
resilience as well as the resilience ofislands and low-lying coastal areas.

*CO2 emissions do not include those derived from energy
sources since they are generated by the calcination oflimestone.

TAIHEIYO CEMENT REPORT 2020

Material Balance ofBusiness Activities

Costs related to carbon emissions
rise due to carbon pricing and thereinforcement of regulations on
CO2 emissions. The cement industry
promotes research on low-CO2
cement production and developmentof new technologies including thosefor saving energy while continuing
investments to meet demand. The
proportion of cement manufacturing
facilities featuring CCS (CO2 captureand storage) increases through thegovernment’s policy for promoting CCS.
Thus process-derived CO2 emissions*
per unit of cement output drop.

Environmental
Accounting

2℃

Efforts to mitigate climate changes
are taken toward realizing adecarbonized society; however,efforts are not sufficient. Greenhousegas emissions slowly increase.
In terms of efforts toward zero
greenhouse gas emissions, theoperation of coal-fired power stations
decline due to system reforms related
to energy supply and demand. A shift
takes place toward renewable energy
and low-carbon energy such as LNG.
Carbon taxes and emissions trading
programs become popular.

4℃

Rise in Average Temperature
and Changes in Rainfall Pattern

Appropriate Use of
Water Resources

Renewable energy is more widelyused in developed countries. For
example, no new coal-fired power
stations have been constructed inthose nations. Coal-fired power
generation, however, continues togrow globally. Priority is placed on
economic activities while restrictions
on greenhouse gas emissions stay lax
and the cost of emitting greenhousegases (carbon price) is set low. Thereis no significant change in cement
manufacturing. The recycling ofmineral resources, such as fly ash,slag and other by-products further
increases at home and abroad.

Technologies, Society and Infrastructure

Reducing
Environmental Impact

Policies for Mitigating Climate Change

Conserving Biodiversity

Rise in averagetemperature andchanges in rainfall
pattern

Mitigating Climate
ClimateChangetechnologies● Systemize design methods that incorporate CO2 recovery by concrete

65

The Environment

Recycling Waste and Other Materials

GRI103-2, 3, 203-1, 413-1

Closely Related SDGs

Resource Recycling with Industries
⿎Electric Power Utilities

We accept coal ash produced at coalfired power
plants and use 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 isused as a flue-gas desulfurization material to scrub
the harmful sulfur oxide from the exhaust producedby the burning of coal. The reaction of the flue-gas
desulfurization material with sulfur oxide forms
gypsum, which we use effectively as a raw material
for cement.
*Ash centers are distribution sites with collection/transportation (transshipment and storage)
and intermediate-processing (powder mixing) functions. They receive coal ash from coalfired power plants and ensure a stable supply to our cement plants, while enabling effective
utilization of coal ash and supplying diverse products that meet user needs.

● Incineration Residues Recycling System

A system for recycling municipal waste incineration ash(bottom ash and fly ash) 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 pre-processed throughbiological breakdown (fermentation) using a waste
recycling kiln.
● Ecocement System

Ecocement is a new type of cement made primarily fromthe municipal waste incineration ash. More than 500 kg ofash and other waste materials are used per tonne of
Ecocement.
Mineral Resource Cycle with Electric Power Utilities and Steelmakers

⿎Steelmakers
In the iron and steelmaking process, impurities are
removed from iron ore to make iron. We supply thelimestone powder and quicklime used as purifying
materials in the refining process. We also use
by-products such as blast furnace slag and steelslag that remain after the refining process as raw
materials for cement and mineral components.
⿎Construction Soil

Conventionally this soil had been dumped
into landfills. By making effective use of it as analternative raw material for cement we contribute to
the material recycling of construction soil as well as
to the extension of the lifetime of landfills. We havealso set up intermediary facilities that organicallylink sites where construction soil is produced to ournationwide plants.

Resource Recycling with Communities
Although most municipal waste is incinerated andthe ash is buried in landfills, finding new landfill
sites has become very difficult. Waste treatment has
particularly become a source of concern for Japan’smajor city governments and the situation is expected
to get worse. We have three systems for recycling
municipal waste and strive to make effective use ofsuch resources and resolve environmental issues.

66

TAIHEIYO CEMENT REPORT 2020

Thermal Power Plant
Ash

Limestone
powderLimestone
powder,quicklime

GypsumSteel Mill
Slag, iron slag,
blast furnace
dust, etc.

Ash Center

Cement Plant

Municipal Waste Recycling Systems for Cement Production
Portland Cement Plants
AK System

Community

Municipal waste

Incineration plant

Incineration
residues frommunicipal waste

Recycling System for Incineration Residues

Municipal waste is recycled
at cement plants as fueland raw material for
ordinary Portland cement.

Municipal waste incineration
ash is recycled at cement
plants as a raw material for
ordinary Portland cement.

Ordinary
PortlandcementTaiheiyo
cementEcocement Plant
Ecocement System
Incineration residues from municipal waste arerecycled as raw materials for Ecocement

Ready-mixed
concrete plants

Concrete products
manufacturing plants

Ecocement
Ecocement

Special Feature

Business Activities

Governance

The Environment

Collaborating with Society

Trends in Use of Waste and By-products per Unit
Non-consolidated
Production
(kg/t-cement)
500
400
300

407.4 404.2 413.4 409.4 409.5

267.3

200
100
2001

2016

2017

2018

2019

2020 (FY)

Various kinds ofmaterials

TrucksFinish millRotary kiln

Freight cars

Ships

Raw Material Preparation Process

Transportation

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.

Raw materials

GypsumFuels

Mineral components

Waste and by-products used

Raw materials

Blast furnace slag, coalash, dirt and sludge,
non-ferrous slag,
steelmaking slag,
construction soil,
molding sand, etc.

Incineration residues from municipal
waste, sewage sludge, etc.
Waste oil, waste plastic, used tires, woodchips, scrap pachinko machines, RDF(municipal waste), recycled oil, BOF

Waste and By-products Used in Cement Plants (FY2020)

Industrial

Household

Water treatment plant sewage sludge and ash
Municipal waste incineration residues
Municipal waste, etc.

Subtotal
Total

Raw material-related
Fuel-related

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

1,988,807
1,145,277
509,220
503,350
383,618
228,442
180,889
155,430
73,721
666,704
5,835,458

127.5
73.4
32.6
32.3
24.6
14.6
11.6
10.0
4.7
42.7
374.1

6,386,997
5,808,924
578,073

409.5
372.4
37.1

380,938
142,134
28,468551,539

24.4
9.1
1.8
35.4

TAIHEIYO CEMENT REPORT 2020

Material Balance ofBusiness Activities

Subtotal

Slag powder, fly ash, etc.

Environmental
Accounting

Waste and By-products
Coal ash (including JIS fly ash)
Blast furnace slag
By-product gypsum
Unburned ash, soot emissions, dust
Dirt and sludge
Construction soil
Waste plastic
Waste oil
Wood chips
Other

FGD gypsum, chemicallyderived gypsum, etc.

Reference: Resources needed
to produce one tonne of
cementLimestone:
1,194 kgClay:
228 kg
Silica:71 kg
Iron, etc.:
28 kg
Gypsum:39 kg
Coal, etc.:
111.2 kgElectric power: 107.0 kWhAppropriate Use of
Water Resources

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

Finishing Process

Reducing
Environmental Impact

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

Burning Process

Conserving Biodiversity

Raw mill

Recycling Waste andOther Materials

0

Waste and By-products Used in the Cement Manufacturing Process
Limestone

Mitigating Climate
ChangeAll of our directly operated cement plants in Japan recycle waste and byproducts into alternative raw materials and fuels for cement. This helps toextend the lifetime of landfills, prevent the depletion of natural mineral
resources, limit greenhouse gas emissions and reduce emissions of pollutants
into the atmosphere.
In FY2020 we recycled 6.387 million tonnes of waste and by-products,
a decrease of approximately 178,000 tonnes compared to the amount in
FY2019 This was due to a decrease in the amounts of blast furnace slag, byproduct gypsum, unburned ash, soot and dust we accepted, which offset theincreased volumes of coal ash, waste plastic, waste oil, water treatment plantsewage sludge and ash. This means we recycled 409.5 kg of waste and byproducts per tonne of cement produced.
In addition, all of the group’s cement plants in Japan accept waste andby-products for recycling.

Environmental
Management

Performance of Recycled-Waste-to-Cement System GRI301-1, 2

67

The Environment

Conserving Biodiversity

GRI103-2, 3

Closely Related SDGs

Environmental Impact of Our Operations

GRI304-1, 2, MM1, MM2

⿎Environmental Impact of Our Operations

Cement production starts with quarrying limestone,
the primary raw material for cement. We also quarry
other raw materials such as aggregates and otherminerals.
Since quarrying requires the removal of
topsoil, quarry development has an impact on thebiodiversity of the development area. However,the limestone, rocks and sand we quarry only
require crushing for particle size adjustment andsorting, 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 our limestone quarrying by using
them as construction materials.
⿎Limestone Quarries of the GroupThe group operates 19 major limestone quarries
around the world, most of which are near our
integrated cement plants. The total site area* of thequarries is 4,327 ha (Japan: 2,409 ha; U.S.A.: 1,281
ha; other regions: 637 ha).
*The area where we conduct quarrying operations as measured by our in-house standard.

Limestone Quarries of the GroupRegionNumber of sites

Site area (ha)Requireconsideration*(number of quarries)

Japan

11

2,409

1

U.S.A.

3

1,281

0

Other
regions

5637

0*Require consideration refers to quarries that fall under category IV or higher in terms of the
IUCN’s Protected Area.

Using the Integrated Biodiversity Assessment
Tool (IBAT) provided by BirdLife International, we
checked whether any of our limestone quarries
are in any of the protected areas defined by theInternational Union for Conservation of Nature(IUCN). We found that none of our quarries arewithin or adjacent to Protected Area Category III or
lower categories. However, In Japan, one quarry is
within a Category IV area and two are adjacent toCategory IV areas.
All these quarries have obtained the necessary
licenses and conduct environmentally friendly

68

TAIHEIYO CEMENT REPORT 2020

quarrying operations. They have no pending
litigations concerning biodiversity or otherenvironmental issues.
Outline of Protected Area Categories of the IUCNIUCN Categories

OutlineI a: Strict Nature Reserve

Areas that have outstanding or representative
ecosystems or have geographical or physiologicalfeatures or species.

I b: Wilderness Area

Large unmodified or slightly modified areas.

Areas set aside to protect the environmental
integrity of the ecosystem.
III: Natural Monument or Areas that have outstanding features of nature or
Featurecultural values.
Areas that require active interventions to maintain
IV:  Habitat/Species
habitats or address the requirements of particularManagement Area
species.
II: National Park

Activities to Reduce Environmental Impact

GRI103-2, 3, 304-1, 2, 3, 4, MM1

Throughout the group we believe that balancing
the conservation of ecosystems in communities
and development of the communities themselves
is important in quarry operations. With this belief,
we hold discussions with local governments,
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.
⿎Environmental Impact Assessment

In developing quarries we conduct ex-ante
assessments of environmental impact of thedevelopment of quarries based on environmental
research of the development area such as on
biodiversity and water resources. We then discuss
the results of the research with local governments,
communities, academics, and other stakeholders
toward finalizing a development plan. Moreover,
we regularly monitor the surrounding environment
during the development and operations of quarries
and report to our stakeholders on the environmental
impact that the quarries have in these areas.
For instance, in the new development of aquarry in the Ofunato
Quarry, Iwate Prefecture,
we conductedenvironmental
assessment for
approximately ten
Raptors survey
years. We focused onSpecial Feature

Business Activities

⿎Greening Quarries

⿎Water Resource Conservation

Botanical garden

Material Balance ofBusiness Activities

We reuse old quarry sites where operations havecompletely ended after consultation with the local
community. When greening a site we strive torestore the original natural environment.

Environmental
Accounting

⿎Use of Old Quarry Sites

Appropriate Use of
Water Resources

In quarrying we also pay close attention toprotecting not only terrestrial plants but also water
resources such as rivers and natural springs in aneffort to protect biodiversity. From the perspectiveof conserving water resources, spring water
discharged from quarrying and rainwater is directed
into retention basins to minimize impact outside of
the quarrying area. In some quarries we drill wells
for domestic water and supply this water to local
communities for everyday use.

Reducing
Environmental Impact

Greening quarry slopes

Conserving Biodiversity

In working quarry areas, rocks and soil are
exposed leaving no flora coverage. However, we
continuously restore greenery to the quarry slopeson terraces formed during the quarrying process as
early as possible, particularly if no quarrying work is
expected for some time. We also plant vegetationin stockyards for excavated topsoil where no
construction work is expected. At some quarries, at
the request of the community, we restore greenery
if operations have been suspended for several
months.
We usually plant vegetation that is native tothe region. Group greening of quarries in Japan in
FY2020 involved a 20,630 m² area where seeds were
sprayed and 1,726 tree seedlings planted.
Other efforts include participating in an annual
tree planting campaign with contractors and local
residents to improveawareness of quarry
development andgreening activities.

Recycling Waste andOther Materials

When environmental impact assessments determinethat protection is required, we protect rare species
through the installation of protective measures,transplanting and restricting development work.
Since 1972, at the Minowa Quarry of Chichibu
Taiheiyo Cement Corporation, we have beenprotecting and nurturing rare species of nativeplants on Mt. Buko, which is on the border ofChichibu City and Yokoze Town in Saitama
Prefecture. We created a botanical garden at thequarry and, together with local experts and otherpeople, we preserve 68 native plant species there
while increasing the plant population. Additionally,
our Central Research Laboratory continues toresearch and develop ways to preserve and growendangered plants, and to verify genetic diversityof native plant species using biotechnology. Since
2016, in the course of developing the Ofunato
Quarry, we have been working with experts topreserve and cultivate various rare plant species
in their native biospheres by creating a botanicalgarden on the side of the office of Ryushin Mining
Co., Ltd.

Collaborating with Society

Mitigating Climate
Change

⿎Biodiversity Protection

The Environment

Environmental
Management

preserving rare wildlife species in cooperation withexternal experts and local residents. Furthermore,
we minimized noise and vibration during thedevelopment work and also limited the traffic hours
for trucks used in construction work. In addition,even after development work begins, we carry out
regular ex-post assessments and environmental
protection measures.

GovernanceRare plant

TAIHEIYO CEMENT REPORT 2020

69

The Environment

Reducing Environmental Impact

GRI103-2, 3

Closely Related SDGs

Preventing Environmental Pollution

⿎Water Contamination
GRI305-7

⿎Air Pollution

78

80

1,000
62
47

500
0

43 42

2011

100.0
75.0

96.0 95.0

59.0

50.0

2017

2016

モニタリング比率
11.
Monitoring
Rate
（％）

39

30

2018

1,187
67

63

27

2019

100

30

50

2020 (FY)0GCCA

99.9 99.9

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
81.6

84.7

84.2

84.0

2017

2018

2019

2020 (FY)

52.6

25.0
0.0

2011

2016

■ 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
Guidelines: “GCCA Sustainability Guidelines for the monitoring and reporting of emissions
from cement manufacturing Ver. 0.1“70

TAIHEIYO CEMENT REPORT 2020

Recycled water
Water recovery
cistern
Ocean water

Cooling water

⿎Soil Contamination

Cement kiln

1,197

On-site power
generation

1,221

150

1,227

Gutters

Watersprinklers

1,342

Equipment cooling, etc.

（g/t-clinker）

1,300

Material andfuel yards,
roads, buildings,
etc., at sites

Water cistern■ NOx (left axis) ■ SOx (right axis) ■ Dust (right axis)

Make-up water

10. 主要汚染物質の排出原単位

1,500

Rainwater

River
water

Specific Emissions per Tonne of Clinker for Selected Pollutants
GCCA（g/t-clinker）

Example of Water Circulation Flow at a Cement Plant

Groundwater

Air pollutants generated from cement production
are primarily NOx, SOx and dust in combustion
gases emitted from cement kilns. To ensure theproper management of these substances we remaincommitted to reducing air pollutant emissions
through measures such as continuously monitoring
emission concentrations, improving NOx reduction
systems and installing bag filter equipment tocapture dust emissions. With such measures wefocus on controlling the emission of air pollutants
with the goal of maintaining FY2011 emission levels.
Emissions of NOx and dust in FY2020 werelower than in FY2011, whereas emissions of SOx
were higher than in FY2011 (base year) because
we accepted waste with high sulfur content.
Nonetheless, the level of SOx emissions was very
low compared to the limit set under the Air Pollution
Control Act.

Most of the water discharged from our plants topublic waterways is cooling water and not polluted
as defined in the Water Pollution Control Act. At
our cement plants all water resources are reusedas circulation water to minimize the impact ofwater discharge into public waterways. Also, we
are working to prevent the leakage of potential
pollutants by installing bunds around our oil tanks
and acid/alkali tanks. Moreover, we are installing
sedimentation tanks, water-oil separation tanks,
oil film detectors, pH meters and suspended solid
sensors on water discharge routes that connect topublic waterways.

Water-oilseparation
tank

Sedimentationtank

Oil film detectors,
turbidimeters,
pH meters

Riverway

Cooling
tower

On-site power
generation

Ocean

In FY2001 Taiheiyo Cement evaluated the risks
associated with cement plants that may be sitedon contaminated ground by appointing an expert
consultant to undertake a soil history survey. We arecontinuing to conduct drilling surveys, starting withthe higher-risk locations, to verify whether or not
the soil is contaminated. Actions have been taken asnecessary based on the findings.
We are also working to eliminate the possibilityof soil contamination by preventing the leakage of
wastewater from scrapyards and fluid from oil tanks,
acid/alkali tanks, pipes and so forth.

Special Feature

Business Activities

Governance

GRI306-2

Collaborating with Society

Appropriate Management of Chemical Substances
GRI306-2

⿎Initiatives at Plants and Quarries

⿎Pollutant Release and Transfer Register (PRTR)

12. 廃棄物最終処分量
Volumeof Waste to Landfill

Reported Levels of Dioxins and Ferric Chloride Emissions
Non-consolidated


100

50

Dioxins (mg-TEQ)

28

2016

5

5

2017

2018

1

2019

Ferric chloride (kg)

13
2020

(FY)

⿎Initiatives at Service Stations

100.0

95.6

Non-consolidated

89.1

75.0

59.6

65.7

77.9

25.0
0.0

2016

2017

2019

2020

(FY)

Our special purpose subsidiary, Taiheiyo Service
Corporation, installed a paper recycling machine
to recycle the company’s used copy paper, and in
FY2020 we recycled approximately 410,000 sheetsof A4 size paper.

0.0

170

170

152

⿎Management of PCB Waste

We properly store and dispose of high and low
concentrations of PCB waste in accordance withthe “Amendment to the Law concerning Special
Measures for Promotion of Proper Treatment of PCB
Wastes“ (revised in 2016).
For high-concentration PCB waste with an early
disposal deadline as stipulated by law, we signed a
processing contract with the Japan Environmental
Safety Corporation (JESCO) in 2006 and haveprioritized processing.
In FY2020 capacitors stored in the Saitama
plant and our Chubu Hokuriku branch, as well as
pollutants such as electrical ballasts stored in the
Oita, Fujiwara, Kumagaya and former Chichibu
plants, were processed.
In FY2021 pollutants such as electrical ballasts
stored in the Fujiwara plant and the former Kawara,
Tosa and Osaka plants as well as the Chichibu quarry
and a packaging site are scheduled for processing.
Status of High-concentration PCB Waste Disposal

Non-consolidated(Number of machines)

Waste

Stored inStored in
PlannedFY2019 (as New Target Processed in FY2020 (asProcessingof March 31, for FY2020 FY2020 of March 31,
for FY2021
2019)
2020)

Capacitors

1

4

5

0

0

Transformers

0

0

0

0

0

Electricalballasts

2,707

1,487

2,444

1,750

1,117

Total

2,708

1,491

2,449

1,750

1,117

TAIHEIYO CEMENT REPORT 2020

Material Balance ofBusiness Activities

⿎Initiatives at Offices

2018

FY2020

0.0

Environmental
Accounting

50.0

FY20190.0

Appropriate Use of
Water Resources

Recycling
Rate of Residual Cement
13. 入れ替え品の再生率

Reported Levels

Reducing
Environmental Impact

Service stations reduce the waste handled by waste
disposal contractors by returning any residual
cement that remains in silos after switching thecement products. Returned cement is recycled andused as raw material.
In FY2020 the recycling rate was 77.9%, up
12.2% from the previous fiscal year.

（%）

FY2018Conserving Biodiversity

0

Emissions

Recycling Waste andOther Materials（t）

The PRTR Law requires that we report on equipment
installed at our Kumagaya plant for the washingof municipal waste incineration ash. This washingprocess uses water, and our total discharge of
dioxins and ferric chloride into public waterways are
as follows.

Mitigating Climate
ChangeOur cement plants and quarries reduce the amountof waste handled by disposal contractors by reusing
waste from operations as material for cement
production. We also endeavor to reduce the volume
of waste to landfill through recycling made possibleusing chromium-free kiln bricks.

Environmental
Management

Reducing Waste

The Environment

71

The Environment

Appropriate Use of Water Resources

GRI103-2, 3

Closely Related SDGs

Water Risk Analysis

According to the results of the water risk analysis
conducted using the Water Risk Filter*, theaverage score for the total basin risk for all ourplants (weighted average taking into account thecementitious production volume) was 2.8 (themaximum score is 5.0, with a higher score indicating
a greater risk). The highest total basin risk score
was 3.5, higher than that of the previous year. The
volume of cement produced at the plant with thehighest score accounted for about 15% of the
production volume of all the plants. However, when
we analyzed conditions at that plant, no imminentissues were identified.
*This is a water risk mapping tool developed by the World Wide Fund for Nature and used
to evaluate impacts on businesses related to water scarcity, flooding, drought, seasonalvariation, physical water quality risks, regulatory risks, etc.

Status of Water Consumption

TAIHEIYO CEMENT REPORT 2020

GCCA

FY2016FY2017FY2018FY2019Surface water

13,717

7,505

8,130

6,521

5,626

Ground water

18,32916,232

16,37016,884

18,656

Industrial water

3,037

2,983

3,095

3,251

3,325

0

0

0

0

0

Total freshwater
withdrawal (I)35,083

26,71927,596

26,656

27,607

Total seawater
withdrawal

148,836

146,097

149,056

149,776

147,372

Other(Unit: 1,000 m3)

FY2020Total withdrawal

183,918

172,816

176,652

176,432

174,979

Total freshwater
discharge (O)13,871

12,964

12,294

12,167

13,674

Total seawater
discharge (O)148,836

146,097

149,056

149,781

147,377

Total discharge

162,707

159,061

161,350

161,948

161,051

Total freshwater used
(I-O)

21,212

13,75515,302

14,48913,933

Guidelines: “GCCA Sustainability Guidelines for the monitoring and reporting of water incement manufacturing Ver. 0.1”

Appropriate Use of Water Resources

GRI203-1, 303-1, 2, 3, 4, 5, 306-1, 413-1

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

Most of the water used at our cement plants is forthe cooling of production equipment, exhaust gas
and in-house power generators. Therefore, thewater discharged from the plants is mostly coolingwater, which is not polluted as defined in the Water
Pollution Control Act. Our plants near the ocean
use seawater to cool in-house power generationequipment. We circulate and reuse all freshwater atthese facilities (except for household wastewater) inorder to reduce water withdrawal and prevent waterpollution by the discharged water.
The total withdrawal of freshwater for FY2020
was about 27.61 million m3 and the total seawater
withdrawal for the same year was about 147 million
m3. The seawater was used to cool in-house power
generation equipment at our plants near the ocean
and then released back into the sea after use. The
amount of freshwater discharged was approximately
13.67 million m3, meaning that about 13.93 million
m3 of freshwater was used at the plants. However,
it is not used as a raw material input but for thecooling of equipment so is consequently released
into the atmosphere through evaporation.
In FY2020 we withdrew 0.817 m3 of freshwater(withdrawal per unit of production) to produce 1
tonne of cement. Moreover, there was little change
in our water consumption efficiency.

72

Status of Water Consumed
GRI303-1

At present there are no foreseeable specificconcerns regarding water resources that may beraised by local communities. We therefore remain
focused on reducing the amount of water withdrawal
from the perspective of improving production
efficiency. Also, we will continue to contribute topromoting the appropriate use of water resources
for local communities by maintaining close
communication with them.
As for Taiheiyo Cement Philippines, it supplies
clean water to local communities in the Philippinesfrom a well drilled by the company.
Fresh Water Withdrawal per Unit of Production
9. 淡水取水原単位

GCCA（m³/t-cementitious）

1.0

0.760

0.833

0.835

0.806

0.817

2017

2018

2019

2020

0.5

0

2016

(FY)

Special Feature

Business Activities

Governance

The Environment

Environmental Accounting

Collaborating with Society

GRI103-2, 3

Closely Related SDGs

Environmental Conservation Costs Non-consolidated

Investment
FY2018 FY2019 FY2020 FY2018

Main Activities

Business area costs
Details

Pollution prevention
Water pollution prevention
Global environmental
Waste pretreatment facilities
conservation
Resource recycling
Waste treatment

Administrative costs
R&D costs
Social activity costs

Environmental remediation costs Emission levies

3,927

3,624

15,783

779

381

1,352

7,314

6,197

38

243

144

537

439

481

1,313

3,933

3,020

4,933

4,955

5,741

31

65

113

173

141

149

256

556

539

774

812

770

0

2

0

19

28

33

169

1,537

0

6,717

2,128

97

7,393

7,932

53

21,735

10,632

87

16,655

10,834

6,427

109

17,636(Unit: million yen)

FY2018FY2019FY2020Total
investment

14,52620,02020,975

Total R&D
expenditure

1,192

1,195

1,154

⿎ External Economic Benefits Derived from the Recycled-Waste-to-Cement System

External Economic Benefits (FY2020) Non-consolidated

Climate change mitigation

Inventory

GRI201-1

Reduction (t)14. 外部経済効果（2016年度）

Inventory Market Price(Yen/t)Economic Benefit(Billions of Yen)

CO2

1,838,421

818

1.5

Depletion of energy resources

Crude oil

112,098

18,400

2.1

Depletion of mining resources

Natural resources

4,805,295

1,000

4.8

Waste

5,517,698

15,00082.8

Shortage of landfills

91.2

Total

(Billions of yen)

120

90

92.4

91.2

80.8

60
0

2018

2019 2020 （FY）

Environmental Accounting for One of Our Projects

Introduction of a Highly Efficient Clinker Cooler
for the No. 5 Kiln at the Oita Plant

GRI201-2
Material Balance ofBusiness Activities

A clinker cooler uses air to cool clinker, an intermediate product of cement that is burned at ahigh temperature of 1,450°C in a rotary kiln. The hot air generated by heat exchange during thecooling process is effectively used as combustion air for the rotary kiln.
The clinker cooler introduced for the No. 5 kiln at the Oita plant in FY2020 is a new type ofcooler that only requires a small amount of air and is significantly more efficient in heat recovery
than conventional units. Requiring less heat energy for clinker burning, the new cooler will further
reduce CO2 emissions and environmental impact.

Investment:
Approximately 740 million yen

Reduction in CO² emissions:
12,313 tonnes/year

Environmental
Accounting• Taiheiyo has developed a unique evaluation method to estimate the contribution to overall environmental benefit to society by utilizing waste materials from other industries.
• 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.
• EEBs are calculated by multiplying the reduced volumes of CO2, crude oil, natural resources and waste (resulting from the utilization of waste and by-products in the
cement production process compared to cement production without using waste and by-products) by market prices for each of the four items. The prices, assumed to be
kept constant at year 2000 levels, are estimated as follows: CO2: 3,000 yen/t (a hypothetical CO2 emission tax rate); crude oil: import price; natural resources: estimatedprice; waste: controlled landfill cost in the Tokyo area.
• A portion of the EEB, such as the waste treatment fee, is accounted for in Taiheiyo’s profit and loss statement.

Appropriate Use of
Water Resources

About Taiheiyo Cement’s External Economic Benefit Evaluation

Reducing
Environmental Impact

Impactoutside the company. As a type of deemed benefit,
an EEB of 91.2 billion yen was identified for FY2020,
representing a 13% increase on the previous year asa result of an increase in the total amount of waste
and by-products used.

Conserving Biodiversity

Taiheiyo Cement uses the external economic benefit(EEB) evaluation method to express, in monetary
terms, its evaluation of socioeconomic benefits
from environmental impact reduction due to theincrease in recycling of wastes accepted from

Recycling Waste andOther Materials

3,259

Total

3,996

2,161

673

Recycling waste and by-products asalternative raw materials and fuels for cement
Implementation of the environmental
management system
Innovations to the cement
production process
Plant tours

FY20201,490

Mitigating Climate
Change

Upstream and downstream costs(Unit: million yen)

Cost
FY2019Environmental
Management

Category

GRI201-2

No. 5 kiln at the Oita plant

TAIHEIYO CEMENT REPORT 2020

73

The Environment

Material Balance of Business Activities
GRI102-6, 7, 45, 301-1, 2, 302-1, 305-1, 2, 7, 306-1, 2

INPUT
EnergyRaw Materials
2,192,325

Natural Resources

Coal (t)36,550,209

Silica (t)1,707,189

Explosives (t)3,996

Tap water (1,000 m³)

1,836

Gypsum (t)119,361

Refractorymaterial (t)14,671

Industrial water (1,000 m³)

3,316Grinding
media/
Steel casing (t)3,174River water (1,000 m³)

5,123

Ground water (1,000 m³)

11,125

Lubricants/
Chemicals (kl)6,259

Other (t)33,938275,462

Heavy oil (kl)

20,011

Diesel oil (kl)

20,753Iron wastes (t)226,404

Kerosene, other (kl)

10,373

By-productgypsum (t)461,690

Recycled fuels (t)679,702

Coal ash (t)2,090,550

Purchased electricity (MWh)591,471

Blast furnace
slag (t)837,738

Wastes/By-products

Petroleum coke (t)■ Total Energy Input(1,000 GJ)

76,16480,00079,139(1,000 t)

74,736 74,777

50,000 44,497

60,00050,00040,00030,00020,00010,000Power
Generation
Business
MineralResources
Business

CementBusiness

2017

2018

2019

2020

Rainwater (1,000 m³)354

Seawater (1,000 m³)

145,561■ 水資源投入量

44,494

49,625(1,000 m³)

43,895250,000

40,000200,000

30,000150,000

20,000100,000

10,00050,0000(FY)42,087

2016

2017

2018

Coal, petroleum coke, water, etc.

2019

2020
(FY)

0

167,760 165,274 169,061 164,393 167,314

2016

2017

2018

Electric power
Power Plants

Electric power

Diesel, explosives, etc.

Aggregates

Quarries

Coal, purchased electricity,
additives, etc.

Limestone
products

Natural mineralssuch as limestone

Flue-gas
desulfurization

Waste and by-products
Ash Centers74

167,314■ Water Withdrawal

Cement Plants

Environmental
Business

Water total (1,000 m³)■ Total Material Input

70,000 61,213

2016

1,831,071

8,823■ 総物質投入量■ 総エネルギー投入量

Water

Limestone (t)Other (t)0Other Materials
Additives,
etc. (t)TAIHEIYO CEMENT REPORT 2020

Fly-ash products

Service Stations

2019

2020

(FY)

Special Feature

Business Activities

Governance

The Environment

Collaborating with Society◦ Scope of reporting organizations
The scope of reporting organizations includes our four business segments (cement, mineral resources, environment and power generation) at our (nonconsolidated) quarries and plants and the following quarries of our subsidiaries that supply material to us (9 quarries of 8 companies) and power plantsof our affiliated companies (2 plants).
Miwa Quarry (Saitama Prefecture)
Chichibu Taiheiyo Cement Corporation
Kanouyama Quarry (Gunma Prefecture) Chichibu Taiheiyo Cement Corporation
Tosayama Quarry (Kochi Prefecture)
Tosayama Taiheiyo Mining Corporation
Tosa Power Plant (Kochi Prefecture)
Tosa Power Inc.
Itoigawa Power Plant (Niigata Prefecture) Itoigawa Power Inc.

Ofunato Quarry (Iwate Prefecture)
Ryushin Mining Co., Ltd.
Buko Quarry (Saitama Prefecture)
Buko Mining Co., Ltd.
Mido Quarry (Saitama Prefecture)
Chichibu Mining Co., Ltd.
Fujiwara Quarry (Mie Prefecture)
Ishizaki Co., Ltd.
Shin-Tsukumi Quarry (Oita Prefecture) Oita Taiheiyo Mining Corporation
Toumi Quarry (Niigata Prefecture)
Myojo Cement Co., Ltd.

■ NOx 排出量
CO ² Emissions

CO²* (1,000 t)

13,053

201922,413（t）

30,000 24,780 23,140 22,833
20,000

(FY)

2016

2,000

2,010 2,267

2,180

2016

2018

2,614

2017

2019

367

■ Dust Emissions

2,239

（t）

500
400 334
300
200
100
2016
0

2020

(FY)

386

367

313

0.15

8,413,475

Limestone products (t)4,988,852

Other (t)336,086

12,852,306

Blended cement (t)2,139,201

Cement based soil stabilizers (t)Clinker (for export) (t)581,192

5
2018

1
2019

13
2020

(FY)

■ 水域への排出量
Total
water discharge (1,000 m³)

158,103

Seawater (1,000 m³)

145,561

Fresh water (1,000 m³)

12,274
267

2018

2019

■ Water Discharge

2020(1,000 m³)

FY2018 FY2019 FY2020
12

12

12

0.005

0.005

0.004

0.17

0.23

0.15

200,000 161,217 157,155 159,645 157,017 158,103
150,000
100,000
50,0002016 2017 2018 2019 2020
0
(FY)

Material Balance ofBusiness Activities

Portland cement (t)

5
2017

事業の
マテリアルバランス

CementProducts by Business

MineralResources

Aggregates (t)2016

Environmental
Accounting

Power
Generation

1,903,870

0Appropriate Use of
Water Resources

Number of kilns
covered by the study
Average exhaust gas
concentration(ng-TEQ/m³N[O²=12%])
Total emissions(g-TEQ/year)

Electric power (sales ofelectricity) (MWh)28

Reducing
Environmental Impact*Cement and power generation businesses only
(excluding purchased electricity)

50

97
2017

Dioxin Emissions
Dioxins* (g-TEQ/year)

100

Household waste water (1,000 m³)(FY)*Cement and power generation businesses only
(excluding purchased electricity)*Cement and power generation businesses only
(excluding purchased electricity)（t）

Water Discharge

Dust* (t)

1,000
0

2020

3,807

■ Amounts to Landfill

Conserving Biodiversity

3,000

2019

Dust Emissions
2,239■ SOx Emissions

2018

(FY)
*Cement and power generation businesses only
(excluding purchased electricity)

SOx Emissions
SOx* (t)（t）

22,413
11,8182017

13

Valuables such as scrap metals (t)■ NOx Emissions

0*Does not include CO² from transportation, which is
calculated separately (see page 63)

3,021

Amounts to landfill (t)10,000■ ばいじん排出量

2020

Waste externally consigned for treatment (t)Recycling Waste andOther Materials

2018

NOx* (t)Mitigating Climate
Change(1,000 t) 14,976 14,629
15,00013,361 13,035 13,053
14,00013,00012,00011,000
■ SOx
排出量

2017

Waste Emissions

205■ CO² Emissions

2016■ 最終処分量

NOx Emissions

From purchased electricity (1,000 t)

0

OUTPUT

Environmental
Management■ CO2 排出量

1,890,704

Environment

Flue-gas desulfurization (t)122,718

Fly-ash products (t)216,204

TAIHEIYO CEMENT REPORT 202075

Collaborating with Society
Partnership with Customers

Quality and Technologies

GRI103-2, 3

Closely Related SDGs

Quality Policy
In 1998, the year of Taiheiyo Cement’s inception,
we established a quality policy based on ourmanagement policy. We revised the policy byincorporating a visual description of the codeof conduct. Through those efforts we have been
continually raising awareness of the policy across theorganization. Moreover, 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 ourhigh technological capabilities and quality assurance
system.

Quality Policy
Improve customer satisfaction by ensuring each
employee is pursuing quality that meets the needs ofusers in the Pacific Rim from a global perspective andproviding quality assurance.

Quality Assurance Initiatives and Quality Management System
GRI416-1

We focus on stabilizing and improving productquality while capitalizing on the production andquality control technologies we have developed
over the years. Recently, we have further enhanced
product quality control by capitalizing on advanced
technologies to ensure improved stability such as
an online analysis system for raw materials, clinker
and cement, the measurement of clinker minerals
by X-ray diffraction and our proprietary Taiheiyo
Cement Quality Predictive System (TQPS).
All of our cement plants in Japan, including
those of group companies, have obtained ISO
9001 certification, the international standard for
quality management systems. Furthermore, all of
our overseas cement plants in countries that adopt
ISO have obtained ISO 9001 certification. To ensure
product quality and improve business operations, we
obtained ISO 9001 certification from the Japan Testing
Center for Construction Materials. The scope of ourcertification encompasses the development, design
and production of a range of cement, cement clinker
and cement-based soil stabilizer products.

76

TAIHEIYO CEMENT REPORT 2020

We will continue to fully apply the ISO
9001 approach in addition to our own quality
management system to more deeply integrate ourquality management system and business processes
in an effort to strengthen our ability to continuallyprovide ISO 9001-compliant products and deliver
greater customer satisfaction.
⿎Strengthening Our Relationship with Customers

We place the highest priority on achieving greater
customer satisfaction. We periodically exchange
information among business units to strengthen
production focused on quality that meets customer
expectations. From our sales and technical staff at
the branches and sales offices we collect information
on customer requirements for product quality
and services, including delivery, and analyze theinformation in order to provide suggestions for
improvements. 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 arefine-tuning our products to meet the requirementsof each overseas market. We respond to eachquality issue raised by customers and strive toimprove product quality and customer satisfaction.
Also, we actively identify potential quality risks,
investigate their causes and implement extensive
countermeasures while enhancing cross-divisional
coordination toward establishing a more secure andsafer quality assurance system.
In addition, we have been expanding ourquality assurance system to include the productsof our group companies beyond Taiheiyo Cement
products. We strive to identify and address material
issues in a well-organized manner through crossdivisional activities toward strengthening thereliability of the Taiheiyo brand as well as customer
satisfaction.

Special Feature

Business Activities

Governance

The Environment

Collaborating
Collaborating with
with Society
SocietyTransition of Minor Components of Ordinary Portland Cementa(Unit: mg/kg)

FY1988 FY2016 FY2017 FY2018 FY2019 FY2020

Customers

Products andtechnical services

Quality requirements

Sales Division
Technical Services

Distribution
Shipping inspections

Production Division

Clarify quality requirements● Production condition management

Prototyping and evaluation

448

427

435

－

485

543

504

578

376

313

339

355

337

74

81

79

77

84

81

91

88

95

95

61

74

69

64

75

17.4

7.4

8.3

7.4

8.6

7.9

32.3

10.6

9.8

9.3

11.4

9.8

5.3

5.7

7.1

6.0

5.4

6.6

Average

556

529

627

530

600

554

Maximum

1,059

659

741

659

772

677

Minimum

137

436

496

390

449

493

Average

221

62

65

57

62

63

Maximum

668

80

89

84

84

77

Minimum

18

45

53

41

38

43
263

MinimumAll
Maximum
chromium
Minimum
Average● Building quality into the process

Watersoluble Maximum
hexavalent
Minimum● In-process inspections

Zinc
Acceptanceinspections

Lead
Material Procurement

GRI416-1

Arsenic－

Average

122

216

259

223

274

Maximum

233

355

355

319

415

359

Minimum

17

133

154

162

163

181

Average

17

10

14

12

18

13

Maximum

39

17

39

43

47

28

Minimum

2

4

4

2

6

7

0.6

0.5>

0.7

0.5>

0.8

Average
Selenium Maximum
Minimum
Average
Fluorine
Maximum
Cadmium
Minimum
Average
Mercury－

Maximum
Minimum

－
－

0.7

0.5>

1.2

0.5>

0.9

0.5>

0.5>

0.5>

0.5>

0.6

1.5

1.8

1.5

1.3

1.3

2.0

2.6

3.0

2.0

2.0

2.0

3.0

0.6

－

1.0>

1.0>

1.0>

1.0>

1.0>

0.005>

0.005>

0.008

0.005>

0.007－

0.005>

0.005>

0.015

0.005>

0.011

0.005>

0.005>

0.005>

0.005>

0.005>－－

Communication with
Communities

Today every product is expected to be safe and cement, asa construction material that is indispensable for developing
social infrastructure, is no exception. The cement industry
has long made use of industrial waste and by-products
such as blast furnace slag, coal ash and by-product gypsum
as substitutes for natural mineral resources. Furthermore,using technologies we developed to recycle household
waste such as the AK system to recycle municipal waste
and the incineration residue recycling system, we also
recycle construction-related soil and waste materials into
raw material and fuel for cement production. When ourcement plants accept waste we prevent its dispersal andminimize 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 inside the plants.
Wastes, as well as natural raw materials, containminute quantities of heavy metals such as chromium
and lead. We continually reinforce the control of minor
components as the volume of waste we receive at ourcement plants increases. When we receive new types ofwaste or waste from new sources we strictly apply rules
under which we conduct three kinds of inspection related
to the source of the waste, its chemical composition
and the results of trial use to identify any potentiallynegative impact on product quality or the surrounding
environment. We will then make a final determination onwhether to receive the waste. These measures help us
ensure product safety.

－

Creating a Healthy and
Safe Workplace

Safe Cement and Cement Products

Copper－

Supply Chain
Management

Quality design in accordancewith quality requirements

382

522

AverageResearch & Technology Development Division

Review quality requirements

421

Fluorine Maximum

Respecting Human Rights
and Diversity and Creating
an Energetic Workplace

Sales

－

Average

Quality andTechnologies

QMS Management System

Minor Components of Ordinary Portland Cementa

Range found in soil*（mg/kg）

1,600
1,500
900
800
700
600
500
400
300
200
100
90
80
70
60
50
40
30
20
10
1
0.9
0.8
0.7
0.6
0.5

Bar graph represents our FY2020 averages

554

435

263
84
63

13
（7.9）

0.1
Fluorine

All
Zinc
Lead
chromium(water-soluble hexavalent chromium)

2.0
0.8
0.007

Copper Arsenic Selenium Cadmium Mercury*H.J.M. Bowen, Environmental Inorganic Chemistry. Translated by Teruo Asami and
Mitsuo Chino. Hakuyusha, 1983.

TAIHEIYO CEMENT REPORT 202077Collaborating with Society

Quality and Technologies

Ensuring Product Safety Following a Nuclear Accident

GRI416-1, 417-1

As a consequence of the nuclear accident at the
Fukushima Daiichi Nuclear Power Station of Tokyo
Electric Power Company in 2011, we discoveredthat some industrial waste used for making cement
contained radioactive material. We have established asystem 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 wepost measurements of radioactive concentrations in our
products on our website every month.
*The Japanese government set the limit of 100 Bq/kg, effective May 2011, as the safety
standard for radioactive concentrations in cement.

For more information about radioactive concentration in our
products, please visit:https://www.taiheiyo-cement.co.jp/news/sokutei.html(Japanese only)

Information Provision Using SDS and Labeling
GRI417-1

To ensure the safety of cement users we prepare Safety
Data Sheets which contain hazard identification details
and make these sheets available on our website.
Labels showing safety information are also attached tobags and flexible containers.

User Societies and Industry Associations

GRI417-1

We founded and manage a variety of societies for
cement users and industry associations to support
them in strengthening their businesses and developing
technological competitiveness. The National Taiheiyo
Cement Ready-mixed Concrete Society, the largestof these organizations, has established 10 Taiheiyo
Cement Ready-mixed Concrete Societies from
Hokkaido to Kyushu. For technical support we holdtechnical sessions and presentations while conducting
activities under a specific theme that meets regionaluser requirements. We also support users in obtaining
qualifications such as Authorized Concrete Engineer,
Authorized Chief Concrete Engineer, and Authorized
Concrete Diagnosis and Maintenance Engineer.
In addition to the Ready-mixed Concrete Society,we established other associations such as the Taiheiyo
Cement Association for the Paving Block Industry and

78

TAIHEIYO CEMENT REPORT 2020

SPLITTON Association Japan to proactively delivertechnical support for the mutual development of
concrete companies. We will continue to support
activities that benefit cement users.
Representative Activities of the Ready-mixed Concrete Society (under Specific Themes)
RegionHokkaido
TohokuTokyo

Description
Survey of technical staff and education/training at ready-mixed
concrete plants
Compiling a booklet on representative near-miss cases at readymixed concrete plants
Workshop on concrete work technologies by general contractor’s engineers

Kanto

Workshop on safety management at ready-mixed concrete plants

Hokuriku

Survey of trial mixing of concrete using fly ash from different sources

Chubu

Training workshop for young engineers at concrete plants in each prefecture

KansaiCase study of annual policy and quality policy at ready-mixed
concrete plants

ShikokuWorkshop on health and safety for operators

Chugoku

Compiling technical materials for hot-weather concrete in response
to work in hot or extremely hot seasonal conditions

KyushuDeveloping an FAQ on ready-mixed concrete technologies

⿎Initiatives through the Taiheiyo Cement
Association for the Paving Block Industry

Concrete paving blocks are being deployed tolower vehicle speeds and reduce traffic accidents
associated with excessive speed. To encourage thedissemination of our roadway blocks developedby the association, we are conducting an anecdotal
evaluation of performance required for roadway
pavement, their durability, and other properties at
the Central Research Laboratory.
Work style reform is currently in high demandat production and construction worksites forpaving blocks. To gather information on the world’s
advanced technologies to address this challenge,
we, accompanied by association members, attended
bauma2019, one of the world’s largest trade showsfor construction machinery held in Germany in April
2019, and visited precast concrete-related companies.
The knowledge we gained there has beenshared with other member companies so that, as ameans of contributing to society, we can promote awider spread use of concrete block paving.

Paving blocks constructed for evaluation

Studying construction machinery

Special Feature

Business Activities

Governance

The Environment

Collaborating
Collaborating with
with Society
Society

Partnership with Society and Employees

Respecting Human Rights and Diversity and Creating an Energetic Workplace
GRI103-2, 3

Closely Related SDGs

GRI102-16

Basic Policy Concerning Human Rights and Labor Practices❷ We will respect diversity and will not tolerate
discrimination or harassment in any form.

❹ We will strive for better working conditions and aworkplace environment that ensures the health andsafety of our employees.

Respect for Human Rights

GRI102-17, 412-2

Under the Basic Policy Concerning Human Rights and Labor
Practices we are committed to respecting the human rightsof our employees and all those involved in our businessactivities. These strong commitments are reflected in ourStandard of Conduct (see page 52-53), which governs
the actions of each employee and is clearly expressed instatements such as “We will respect human rights and will notdiscriminate on the basis of national origin, gender or otherfactors” and “We will maintain a harassment-free workplace.”
⿎Educational Activities on Human Rights

We have been conducting a variety of educational
activities with the belief that education is thefoundation for human rights.
In FY2020 our human rights seminars for
employees were focused on the Dowa discrimination
issue in Japan and preventing harassment, and thesessions for the top management of our affiliates wereabout unconscious bias. Moreover, during Human
Rights Week, we promoted human rights awareness bycollecting slogans from company employees and their

Human rights training at plants and branches

138 participants
390 participants
741 participants

Human Rights Week slogans collected (from employees andtheir families)

1,507 slogans

⿎Operating the Human Rights Hotline

Members of the Harassment Counseling Committeeand Human Rights Committee assigned at all businesssites conduct activities to raise awareness of humanrights to prevent harassment, and handle any related
complaints to create a positive workplace environment.
In FY2020 we received 15 reports via the hotline,
reviewed the details of each report based on requests
from the complainants, and responded appropriately.

Communication with
Communities❺ We will not tolerate child labor or forced labor under
any circumstances.

Results

Creating a Healthy and
Safe Workplace❸ Applying accepted international principles andlaws and labor practices in each country, we will
respect the rights of all our workers, treat them to
employment free of discrimination and strive toensure equal employment opportunities.

In-house Training and Slogans CollectedGroup company top management lecture by CSR executive
officers
Human rights seminar for HQ employees by position(including 67 from our affiliates)

Supply Chain
Management❶ Recognizing that respecting human rights is afoundational management concern, we will strive toaddress human rights issues.

In-house Training Related to Human Rights Issues and Callfor Slogans (FY2020) Non-consolidated

Respecting Human Rights
and Diversity and Creating
an Energetic Workplace

We formulated our Basic Policy Concerning Human Rights
and Labor Practices in April 2015 with the acknowledgementthat respecting human rights and diversity is a fundamental
principle for a sustainable society, and taking into
consideration the Universal Declaration of Human Rights andthe labor standards of the International Labor Organization.

families as well as our partner companies.
We have been conducting a questionnaire on
employee harassment every two years and plan to
conduct the next in FY2021.
We also assisted group companies in conducting
training courses and distributed a booklet to raiseawareness of human rights.

Quality andTechnologies

Basic Policy Concerning Human Rights and Labor Practices

Harassment Hotline
Internal

The Human Rights Committee and harassment counselors
have been allocated at all our business sites (56 in total).

External

Telephone and website consultations have been contracted to
the Japan Institute of Workers’ Evolution Harassment Hotline.

Number of Reports to the Harassment Hotline (FY2020)
Sexual harassment Power harassment

Non-consolidated(Unit: report)

Other

Total

Internal

1

8

0

9

External

1

4

1

6

Human Resource Development and Evaluation

GRI404-2, 3

We see our employees as the most important management
resources for achieving the sustainable growth of
our group. We maintain a long-term human resource
development system in accordance with our Basic Human
Resources Development Policy and a fair evaluation system
to support the performance of all our human resources.
These systems reflect diverse individual characteristics andvalues, regardless of nationality or gender.
TAIHEIYO CEMENT REPORT 202079Collaborating with Society

Respecting Human Rights and Diversity and Creating an Energetic Workplace

Basic Policy Concerning the Development of Human Resources

Education/Training-Related Expenses per Employee
FY2018

Our aim is to develop human resources that are highly
regarded both inside and outside the company.
❶ In principle, human resources will be developed
through on-the-job training supplemented by offthe-job training.

❷ Human resources will be developed to succeed theroles of their superiors, playing central roles in the
future in each area and at each level.

❸ Human resources will be developed to take action inconstant consideration of group management.
❹ Human resources will be developed to becompetent by global standards.

❺ Human resources will be developed to protect theenvironment and to serve society by assuming activeroles in CSR initiatives.
❻ Human resources will be encouraged and assisted
to develop their motivation and to adopt broader
perspectives through self-development.

⿎Human Resource Development

We implement company-wide measures, including grouptraining by position, and the development of global
human resources. We also introduce measures aimed atdeveloping the individual potential of each employee as abasis for energizing the organization. These efforts provide
our employees with opportunities for personalized
learning experiences that foster autonomy andindependence, and ultimately raise their motivation to thenext level. We actively encourage and create environments
in which employees can freely make decisions about theircareers during their work and training.
In addition, we ask all employees to submit
self-appraisals once a year, including future careerdevelopment aspirations, worksite preferences andfamily considerations, to help us improve the work
environment so they can fully demonstrate theirabilities and to ensure stable employment.
Characteristics of Ideal Employees

From the standpoint of human resource development we haveidentified the following desirable characteristics and traits forrevolutionizing the company and creating a dynamic Taiheiyo Cement.

Self-confident individuals who are able to contribute to thesustainable growth of the group with a firm commitment toachieving the group mission:❶ Individuals with innovative ideas, strong leadership andthe ability to take bold actions❷ Individuals who can be competent by global standards❸ Individuals who can contribute to group management

80

TAIHEIYO CEMENT REPORT 2020

Non-consolidated

FY201971(Unit: 1,000 yen)

FY202074

75

Our Training System
Our website

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

CSR → Integrated Report → Appendix

⿎Human Resource Evaluation System

We have adopted a human resource evaluation
system that prioritizes development overcompensation. The system assists employees indeepening their understanding of their evaluation
results through feedback. It also strongly emphasizes
the exchange of opinions between evaluators andemployees, who share their thoughts on issues suchas identifying areas for future development.
We have been implementing a management(HR evaluation) training program since FY2008
to enhance the evaluation, development andmanagement of skills of evaluators. As of the endof FY2020, 770 people had participated in training
under these programs.

Respecting Diversity

GRI404-2, 405-1▪Promoting Diversity and the Empowerment of Women
Acknowledging that promoting diversity andempowering women is the biggest and mostimmediate challenge for creating an innovative labor
force, we have engaged in a wide range of efforts.
In July 2015 we established the Diversity Promotion
Office (name at the time) to review various measures andstrengthened our awareness-raising efforts. In addition toreviewing company systems and establishing new ones,
the office operates the Kirakira Palette portal site*, which
provides employees with information such as details ofcompany programs and available fringe benefits.
In October 2019 we held the fifth Diversity Forumand invited an external lecturer who has long been
engaged in initiatives for enabling diverse humanresources to demonstrate their capabilities and realize
diverse workstyles. The theme of the lecture wasdiversity among role models. We made the video of theforum available online via the Kirakira Palette site for all
employees to watch at their convenience.

Special Feature

Business Activities

Governance▪Promoting Employment Opportunities for Persons with Disabilities

3.0
2.5
2.0
1.5 1.49
1.0 0.82
0.5
0 2000Statutory rate*

Taiheiyo Cement

Private sector average

2.37

2.39

2.34

2.30

1.92

1.97

2.05

2.11

2016

2017

2018

2019

2.50

Communication with
Communities

Employment rate (%)

Creating a Healthy and
Safe Workplace

Trends in the Employment Rate for Persons with Disabilities(as of June 1 of Each Year) Non-consolidated

Supply Chain
Management

We have been working to improve the working
environment for employees with disabilities,
including the establishment of three special purpose
subsidiaries. As a result, our employment rate ofpersons with disabilities has steadily improved.
The rate was 2.30% as of June 2019 and the annual
average employment rate for FY2020 was 2.44%,
exceeding the statutory rate for the 13th consecutive
year. The statutory employment rate was raised
to 2.2% in April 2018. Our employment rate was
2.50% as of June 1, 2020, which also exceeded thestatutory rate.
We intend to continue doing all we can toincrease the number of employees with disabilities,
including visiting schools, inviting school staff to our
workplaces, collaborating with support organizations
for persons with disabilities, and participating in
recruitment events or seminars for persons withdisabilities.

Respecting Human Rights
and Diversity and Creating
an Energetic Workplace*Kirakira Palette portal site for supporting employees to continue working while caring forfamily members

Collaborating
Collaborating with
with Society
Society

Quality andTechnologies

We have been participating since FY2018 in the Science,
Technology, Engineering and Mathematics Challenge (Rikochalle) program led by the Gender Equality Bureau of the
Cabinet Office, to empower women in the workplace. In
August 2019 we organized a plant tour for experiencing work
and interacting with our female engineers at the Fujiwara
Plant and Quarry.
We are steadily working on the general business owneraction plans pursuant to the Act of Promotion of Women’sParticipation and Advancement in the Workplace. In
addition, we have been participating in Keidanren’s Action
Plan on Women’s Active Participation in the Workforce andannounced our voluntary action plans. We will continue oursincere efforts to increase job opportunities for women andcreate an environment that fosters more female managers.
We have been actively recruiting female employees toincrease the ratio of female employees to over 10% by 2020
(the ratio of female employees as of March 31, 2020 was
approximately 9.0%). Women who are “G Course” employees
accounted for approximately 21% of the new employees joining
the company in April 2020. We also hired one female foreign
national and will continue to hire outstanding employees with afocus on individual capabilities, regardless of nationality.
While our target of at least 10%of female employees by 2020 expires
at the end of FY2021, we will continue
to promote the empowerment of
women toward achieving the target in
our CSR Objectives for 2025.

The Environment

2020 (year)*Statutory employment rates were 1.8% until March 31, 2013, 2.0% until March 31, 2018,and 2.2% since April 1, 2018.

▪System to Rehire Employees Who Have Reached Retirement Age

Establishing Kirakira Palette portal site

The Science, Technology, Engineeringand Mathematics Challenge (Rikochalle) program held in August 2019

The general business owner action plans pursuant to the Act ofPromotion of Women’s Participation and Advancement in the Workplace
Our website https://www.taiheiyo-cement.co.jp/english/index.html
CSR → Collaborating with Society → Human Resources

We rehire employees who want to continue working
after they have reached the traditional retirement
age of 60 until they become eligible for theirpension. After they start receiving a pension werehire them in accordance with specific rehiring
standards under a labor-management agreement
until they reach 65. We will continue to make surethere is a workplace for individuals who seek reemployment by expanding opportunities in groupcompanies.
Number of Employees Rehired after Reaching Retirement Age
Non-consolidated(Unit: person)

2019
Rehired by the company

21

Rehired by other companies (including those that are not group companies)

21

TAIHEIYO CEMENT REPORT 202081

Collaborating with Society

Respecting Human Rights and Diversity and Creating an Energetic Workplace

Employee-friendly Workplaces

GRI401-3, 403-6

⿎Flexible Work Arrangements

We are working to provide flexible work arrangementsby adopting various employment systems that will
enable our employees to enhance work-life balance.
Support for Childcare and Caregivers
We established a long-term leave system in 2017 for employees
who are given no choice but to give up their careers due tounavoidable circumstances such as relocating for their spouse’s
job or childcare. We also operate a reemployment system for
employees who leave their jobs due to child or family care. In
addition to our childcare/family-care leave, we have instituted
measures that support employees who do not want to takeleave, such as a telecommuting, flextime, shortened work hours
and starting work early or finishing late.
Responding to the Act for Measures to Support theDevelopment of the Next Generation
Since FY2006 we have been formulating general businessowner action plans based on the Act for Measures to
Support the Development of the Next Generation. After
having obtained the initial “Kurumin” certification in 2017,
we achieved the objectives set in the general businessowner action plan during the plan’s fifth term, from April
2017 to March 2019. We also met multiple certification
criteria such as the rate of childcare leave taken and actual
overtime work. In recognition of
our efforts we obtained the second“Kurumin” certification in January
2020. Also, in FY2020 we started
implementing various efforts inaccordance with our sixth-term
general business owner action plan.
General Business Owner Action Plans

Duration of plan: April 1, 2019 to March 31, 2021 (2 years)

 isseminate information about the systems for balancing
D
work and family based on the Act on Childcare Leave,
Caregiver Leave and Other Measures for the Welfare ofWorkers Caring for Children and Other Family Members
Measures	Run a portal site in support of the continuation of employment which
introduces internal systems systematically
Objective 2 Implement an initiative to realize flexible work arrangements
Measures 	Implement trial telework arrangements
Objective 3 Implement measures to promote the use of annual paid leave
MeasuresImprove the rate of annual paid leave taken by setting up
days when employees are encouraged to take annual paid
leave, systematically providing annual paid leave, etc.
Objective 4	Implement a social contribution program concerning thedevelopment of the next generation
Measures 	Conduct internships, etc., that provide young people with
opportunities to gain workplace experience
Objective 1

82

TAIHEIYO CEMENT REPORT 2020

Major Work Systems that Allow Flexible Work Arrangements◦ Telecommuting system◦ Flextime system◦ Discretionary labor system◦ Half-day paid vacation◦ “Special Reserved” leave (use of accumulated paid leave that has expired)◦ Refresh System◦ Human resource management system per course (regionlimited employment) and others

Status of Leaves Taken and Work Hours
Items

Non-consolidated

2017

2018

2019

Number of employees who took childcare
leave (male employees in parentheses)

21(10)

22(8)24(17)

Childcare leave rate for female
employees

100%

100%

100%

Rate of annual paid leave taken

66.0%

67.6%

78.5%

16.4 hours

16.7 hours

17.4 hours

Overtime work (monthly average)

⿎Support for Volunteer Activities

In June 2012 we formulated a volunteer activity
leave scheme and have been supporting volunteer
activities undertaken by employees. A total of 44
employees have taken this leave up to FY2020.
⿎Efforts to Promote Employees Health

In March 2018 the company formulated the “Taiheiyo
Cement Group Commitment to Health” as its policy
for employee health. Under the commitment we havesince undertaken initiatives based on the “Kenkokeiei*”
concept to maintain and improve the mental andphysical health of every employee.
*Kenkokeiei (Management of Health on Company and Employee) is a trademark of the NPO
Health Management Study Group

Taiheiyo Cement Group Commitment to Health

The Taiheiyo Cement Group regards its employees as key
management resources (“human assets”) and intends to be a
corporate group in which every employee can enthusiasticallywork while maintaining their mental and physical health.

Mental Healthcare
We provide mental health checkups for all our
employees (consultation rate: 95.3% in FY2020).
Mental healthcare is a key focus in our efforts
to promote employee health. We also conduct
workshops focused on preventing mental healthproblems. In addition, we offer free counselingservices on mental health to employees and theirfamilies under a contract with the company’s
healthcare trust for this purpose.

Special Feature

Business Activities

GovernanceConsolidated

Permanent employees
Temporary employees

Permanent employees
Temporary employees

Male

1,606
52

Female11,507

1,612

782

13,119Committee on
employment andemployment formats

Examine the operation of personnel/labor
management systems against the background ofdiversifying employment and employment status

Committee on workhours

Examine problems concerning work hours and workhour management, and the response to laws related
to work hours

Committee on the
promotion of diversity

Examine the measures necessary to promote
diversity in the workplace

Note: The number of temporary employees refers to the annual average number of temporary employees.

Average Length of Employment for Employees (Years)(as of the End of Each Fiscal Year)
FY2018
Male
FemaleNon-consolidated(Unit: year)

FY201920.5
14.5

FY2020
20.4
13.1

20.0
12.3

Note: A declining trend in the average years of employment is primarily due to an increase in
the number of new graduate employees rather than an increase in turnover rate.

Number of Employees in Management Positions(as of the End of Each Fiscal Year)
FY2018
Male
FemaleNumber of New Graduate Employees
FY2018
Male
Female(Unit: person)

FY2020767
3(Unit: person)

FY201970
24

FY2018

⿎Direct Communication between Executive
Officers and Employees
As part of our efforts to enhance communication
across the company we have been holding talksessions with the executive officers, providing
both executive officers and employees witha valuable opportunity to interact directly. In
FY2020 these sessions were held at our 18
business sites and attended by 1,168 people.

FY2020
68
24

91
18

Non-consolidated(Unit: person)

FY201910760
5Non-consolidated

Number of Newly Hired Mid-career Employees

MaleFemaleNon-consolidated

FY2019767
2

Activities

Total

1,042

260

Committee

Committee on personnel
Review the entire personnel system and theand treatment oftreatment of employees
employees

1,798
58

192
6

Activities of Specialized Committees

Communication with
Communities

Non-consolidated(Unit: person)

All employees who have entered into a labor
agreement with the company are members of aunion. We occasionally hold labor-management
consultation and briefing sessions that provide
opportunities for labor and management toexchange opinions and negotiate issues on the basisof mutual trust and understanding. In FY2020, 38
of these sessions were held encompassing labor
contract negotiations as well as explanations ofcorporate performance, revisions to wages andbonuses, and amended systems and rules. Throughthe sessions we intend to improve communication
between labor and management. In addition,
four specialized committees set up as advisory
bodies for labor-management consultation provide
opportunities for active negotiation and exchanging
views between labor and management.

Creating a Healthy and
Safe Workplace

GRI102-7, 8, 401-1

Employee Status (as of the End of FY2020)

GRI102-41, 403-4

Supply Chain
Management

Employee Status

Sound Labor-management Relations

Respecting Human Rights
and Diversity and Creating
an Energetic Workplace

Employee Awareness Survey
Toward increasing employee job satisfaction we haveconducted an employee survey every two years from
FY2014 to FY2018. In FY2021 we plan to conduct thesurvey after reviewing its content.

Collaborating
Collaborating with
with Society
Society

Quality andTechnologies

Initiative for Improving Employees Health
We conduct annual health examinations for all
employees in accordance with the Industrial
Safety and Health Act. As in FY2018 and 2019 theattendance rate in FY2020 was 100%. In the eventthat any doubt is raised over a diagnosis, we help
the employee to undergo an extensive examinationand provide lifestyle improvement training.
Moreover, as part of the initiative we holdnutrition seminars at each business site, provide
information through an in-house newsletter anddistribute a pamphlet for raising health awareness.

The Environment

FY20206
7

9
0

TAIHEIYO CEMENT REPORT 202083Collaborating with Society
Partnership with Suppliers

Supply Chain Management
Closely Related SDGs

Our Business Partners

GRI102-9

We produce and use cement and concrete in our
major business activities. Much of its main raw
ingredient, limestone, is mined and supplied byour group companies, which also manage thequarries. Coal, the primary fossil fuel thermal energy
is supplied by companies outside the group. The
wastes and by-products that we recycle in ourcement production process come from manydifferent industries and a variety of locations.
A significant part of our production process is
automated. The construction and maintenance ofour production equipment is outsourced to partnercompanies and contractors when needed.
Our cement products are mainly supplied tobuilding materials companies. Raw materials andproducts are transported by both group and nongroup companies (for more on their activities, seepages 4-5). Our group operates cement production
sites in Japan, the U.S., China, Vietnam, thePhilippines and Papua New Guinea.
By closely communicating with the governmentsin the regions and countries where we operate weensure that we observe their laws and strive to meettheir needs and requests.

Fundamental Policy

TAIHEIYO CEMENT REPORT 2020

Taiheiyo Cement Basic Policy Concerning Procurement
Our website

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

CSR → Collaborating with Society →Supply Chain Management

To respond to internationally reinforced controls
over acts of bribery and strengthen our prevention
initiatives against corruption (commitments 4 and7), we established the Anti-Bribery Policy in January
2017, concurrent with the release of a statement by
our president declaring our group’s stance against
bribery.

GRI-102-16

Our growth depends on the growth of our business
partners. To build relationships of trust we work inconcert with our business partners, we are sincere
and fair in our dealing with them and strictly adhere
to our agreements. Under the section entitled“Dealing outside the company in good faith” inour Standards of Conduct, we declare a number ofcommitments to ensure that “We will act in an ethicalmanner and abide by the laws and regulations of
those countries in which we operate,” a statementin our Business Principles. We manage our supply
chain in compliance with these commitments:
1. We will conduct fair marketing and bidding, freefrom unfair practices such as collusion and cartels.
2. We will maintain decent and transparent
relationships with our contractors.
3. We will select business partners in a fair andequitable manner.
4. We will not offer entertainment or gifts to84

customers that go beyond what is legally andsocially acceptable.
5. We will produce honest, sincere and faithful
advertisements, displays and presentations.
6. We will respond sincerely to customer feedback.
7. We will maintain transparent relationships withgovernments.
8. We will respect the cultures and customs of theplaces in which we operate.
We also established the Basic Policy Concerning
Procurement in October 2017 to reinforce
commitments 2 and 3 and ask our contractors toshare them.

The Anti-Bribery Policy
Our website

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

CSR → Risk Management and Compliance →Compliance Guidelines

Special Feature

Business Activities

Governance

The Environment

Collaborating
Collaborating with
with Society
Society

Quality andTechnologies

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

GRI102-16, 205-2

⿎Distributing the Standard of Conduct Casebook

Communication with
Communities

Our Standard of Conduct Casebook, designed
to provide exemplary models of conduct for
employees, includes a section about what
constitutes fair trade. It is distributed to all
employees of our major group companies.

To ensure that all employees understand complianceacross our supply chain and act accordingly,
we conduct monthly tests as part of e-learning
programs to provide education on the Standardof Conduct Casebook and the Antimonopoly Law
Compliance Manual for all company employees,
including those on loan to group companies orothers. The monthly tests that began in FY2019
always contain one question concerning antibribery.
Looking ahead, we will continue to provide
e-learning education.

Creating a Healthy and
Safe Workplace

Relationships of trust with business partners andgovernments depend on the conduct of each
employee, so we encourage our employees toadvance fair trade through a variety of means.

⿎E-learning Programs

Supply Chain
Management

Trade Compliance Training

Antimonopoly Law Compliance Manual

Respecting Human Rights
and Diversity and Creating
an Energetic Workplace

Many of our operations at cement production
and mining sites are mechanized. However, some
operations require manual work at height or inhigh temperatures, and ensuring safety of workers
at our production sites is a prerequisite to ourstable business performance. In an effort to prevent
employees of contractors working at our sites frombecoming involved in any accidents, we request thatthey go through safety training, submit a safety planand reflect our instructive feedback in advance.

⿎Distributing the Antimonopoly Law Compliance
ManualOur Antimonopoly Law Compliance Manual is
distributed to all employees toward ensuring
compliance.
The manual first presents an outline of the
Antimonopoly Law focusing on private monopoly,
unfair restraint of competition (cartels) and unfair
business practices, the three pillars of this law. It
further offers examples of illegal conduct in theform of “Don’t” statements to help employees
more thoroughly understand the law. The manual isrevised when laws and regulations are amended.

TAIHEIYO CEMENT REPORT 202085Collaborating with Society
Partnership with Employees

Creating a Healthy and Safe Workplace

GRI103-2, 3

Closely Related SDGs

Taiheiyo Cement Health & Safety Policy
Our Occupational Health and Safety Policy isshown below. Under this policy, our headquarters
and business sites review and implement yearly
management policies on health and safety.

Taiheiyo Cement Health and Safety Policy
We are aware that the health and safety of our employees
is part of the foundation of our company, and we
effectively implement the following policy by devoting
sufficient management resources to prevent work-related
accidents and diseases in accordance with the Industrial
Safety and Health Act and the Mine Safety Act.

Basic Policy❶ Promote health and safety activities throughcooperation between management and labor, withthe aim of eliminating work-related accidents.

❷ Ensure the health and safety of our employees andthose of our affiliates by complying with health andsafety-related laws and regulations, the health andsafety management regulations created by us, andhealth and safety regulations created by our businesssites.

❸ Strive to improve the level of safety and health byactively promoting the implementation and operationof an Occupational Safety and Health Management
System, and by continually ensuring the true safety of
our equipment, providing education and training, andraising awareness❹ Continually improve the working environment andwork methods through the company-wide andbusiness site Health & Safety Committees, by applying
technological progress and utilizing new knowledge
and information about health and safety.
❺ Ensure health and safety throughout the Taiheiyo
Cement Group by advancing programs to eliminate
work-related accidents under the leadership of thecompany-wide, business site, group company andaffiliate Health & Safety Committees.

Occupational Health & Safety System

GRI403-1, 2, 3

Under the Taiheiyo Cement Health & Safety Policy andhealth and safety management regulations, we provide
for the basic aspects of the group’s health and safety
management and promote health and safety activities.
This creates comfortable working environments while
also ensuring the health and safety of our employees
and those of our contractors at the group’s businesssites and other locations.

86

TAIHEIYO CEMENT REPORT 2020

We established the Companywide Occupational
Health & Safety Committee, chaired by the officer incharge of safety, as a Specialized Committee under
the CSR Management Committee and reporting to
the Board of Directors and reporting to the Board of
Directors which oversees the system. The Companywide
Occupational Health & Safety Committee oversees
promotion activities at all business sites and also collects
safety-related data from group companies as well as thecompany itself, and provides guidance.
All plants, quarries and branches have a Health &Safety Committee consisting of representatives fromboth management and labor to promote the activities at
each business sites. We manage health and safety at ourcement plants and quarries at home and abroad using
the OSHMS*.

*Occupational Safety and Health Management System: A framework that allows organizations
to reduce potential dangers at workplaces and promote comfortable worksites by voluntarily
practicing continuous, uninterrupted health and safety management as prescribed in theguidelines of the Ministry of Health, Labor and Welfare in 1999.

Occupational Health & Safety System
Board of Directors
CSR Management Committee

Companywide Health & Safety Committee(chaired by the officer in charge of safety)

Specialized Committees

Headquarters departments
Headquarters/ Central Research
PlantsBranches
Tokyo BranchLaboratory
Occupational Health & Occupational Health & Occupational Health & Occupational Health &Safety Committee
Safety Committee
Safety Committee
Safety Committee
Partnercompanies

Quarries
SafetyCommittee

Group companies and affiliates
Occupational Health &Safety Committee
Safety Committee

Health and Safety
Disaster Prevention Safety Cooperative
Cooperative Committee Cooperative Committee
Committee

⿎Safety Operation Officer Certification System

Since FY2008 we have been using the Safety
Operation Officer System which emphasizes theimportance of improving leadership capabilities
and therefore only certifies those who complete
qualification seminars held at plants as leaders(safety operation officers) of working groups. To
further improve the capabilities of these leaders we
imposed a stricter requirement for the qualification
seminars starting in FY2016, restricting participants
to those who have completed the foreman training
course stipulated in the Industrial Safety and Health
Act.
⿎Health and Safety Training Program

To ensure employee safety at work we conduct
health and safety training in accordance with theSpecial Feature

Business Activities

Governance

60
30
0

2016

2017

2018

2019

2020 (FY)

Status of Our Health and Safety Promotion Activities

GRI403-2, 3, 4, 5, 6, 7, 9, 10

The Companywide Occupational Health & Safety
Committee set the objectives for FY2020 aiming toachieve zero fatalities, limit lost-time injuries to 30 orless and work-related accidents to 80 or less, while also
setting the absence rate at a maximum of 0.69% andtargeting 0.6%. Accordingly, we conducted healthand safety promotion activities with a focus on: (1)basic safety activities for attaining the CSR Objectives
for 2025 by (a) establishing the safety culture ofAbsence Rate

Non-consolidated(Unit: %)FY2016FY2017FY2018FY2019FY2020

0.439

0.448

0.458

0.647

0.580

Absence
Rate

Communication with
Communities■Death ■Leave of absence ■No leave of absence(Number of accidents)
120
103
101
95
94
87
90

Creating a Healthy
Healthy andand
Safe Workplace
Workplace

Number of Accidents Registered in the Work-related Accident Database

Supply Chain
Management

Regardless of severity, any work-related accident isreported to the Companywide Occupational Health& Safety Committee immediately after it occurs. We
promptly post the details of any accident on the groupbulletin board in an effort toward avoiding recurrence.
We have maintained a work-related accident
database since FY2009 to help avoid the recurrenceof accidents. It contains information about accidents
involving employees of the company and groupcompanies as well as all employees of partnercompanies including temporary workers. It is also
used to store information on identified accident
causes and response reports, including measurestaken in response to unsafe actions and equipmentwith respect to the “4 Ms” (men, machines, methods
and management). Information on the database istranslated into English and Chinese so that it can beunderstood by those at overseas business sites.

the Taiheiyo Cement Group and (b) promoting
ongoing safety activities at cement plants and by
the industry; (2) implementing concrete actions to
reduce accidents; (3) the speedy dissemination of
information following an accident; (4) the horizontal
rollout of countermeasures taken by the accident site;(5) prevention of occurrence or recurrence of serious
work-related accidents at specific business sites andaffiliates; and (6) checks on countermeasures taken in
response to an accident.
As a result we attained our objective of zero
fatalities in FY2020 following FY2019. We alsoachieved our objective of 30 or fewer lost-time injuries
for the first time since the company's foundation andlost-time ratio of 0.580%. However, we fell short ofmeeting the work-related accident objective with 94.
While we have sought to prevent serious accidents asa key activity, there was a serious accident in FY2020
involving human contact with heavy machinery. In
response we are promoting thorough no entry andseparation of pedestrians and vehicles to prevent
contact between heavy machinery and people. The
number of accidents at overseas group companies
declined as a result of implementing the same safety
policy and system used in Japan.
Reviewing accidents by type, we found that a large
number of accidents involved being caught by anddragged into equipment, or falling, and we are now
focused on preventing their recurrence. Among workrelated health hazards, the number of incidents ofheatstroke increased more than four-fold compared tothe average for previous years with 15 cases reported,and so prevention of heatstroke has emerged as a key
challenge.

Respecting Human Rights
and Diversity and Creating
an Energetic Workplace

⿎Report and Database of Work-related Accidents

Collaborating
Collaborating with
with Society
Society

Quality andTechnologies

related implementation procedures. Training
courses focus on newly hired employees, including
those with professional experience, specialized
courses, newly appointed managers, strengthening
capabilities and new partner companies.

The Environment

Number of Work-related Accidents(Number of accidents)

FY2016 FY2017 FY2018 FY2019 FY2020
By region
By gender
Work-related
injuries/diseases
Employees/
partner companies

Japan

93

84

98

81

Outside of Japan

8

11

5

6

92
2

Male

97

90

99

83

89

Female

4

5

4

4

5

Injury

98

88

98

83

79

Disease

3

7

5

4

15

Employees

52

42

41

45

40

Partner companies

49

53

62

42

54

TAIHEIYO CEMENT REPORT 202087Collaborating with Society

Creating a Healthy and Safe Workplace

⿎Hands-on Safety Training

Breakdown by Accident TypeFY2019FY2020Flying/falling object

Others27%

Being caught
by or dragged
into equipment
31%

Flying/falling object

Falling

6%

Others16%

Falling to theground16%

Falling to theground10%

Contact with high or
low temperature objects
2%27%

Falling
18%

18%

12%

Being caught
by or dragged
into equipment

Contact with high or
low temperature objects
17%■死亡 ■休業 ■不休
of Accidents▪Improving Equipment to Prevent the Recurrence

By accident type, the most frequent were workers
being caught by or dragged into equipment.
Many of these involved workers being caught bytransportation equipment while loading cement into
trucks. We are therefore striving to prevent more ofthese serious accidents
from occurring and havetaken action including
disseminating related
information across
our plants and service
Measure to prevent being dragged into
equipment at the Yokohama-Minami service
stations.
station
⿎Promoting Safety Activities at Group Companies

The Companywide Occupational Health & Safety
Committee supports safety activities at groupcompanies. We started conducting safety surveys
in FY2019 and in FY2020 we conducted a survey
covering the group’s ten business sites in Japan andfive sites overseas. We seek to raise safety standards
by visiting the sites in order to hear about safety
activities, conduct facility inspections and directly
share information. Moreover, we are working to
improve safety practices by, for example, havinggroup companies conduct safety patrols together.

To develop each employee’s sense of safety wehave promoted hands-on safety training during
which employees experience simulated dangers
that could happen in daily operations. In FY2019 we
introduced hands-on safety training equipment forthem to experience simulated dangers related toheights, rotating equipment, electricity and objects
hanging from a crane. Furthermore, we introduced
virtual reality equipment in each cement plant for
quickly training young or inexperienced employees
and also provide the equipment to partner andgroup companies upon request.

Hands-on safety training equipment (Kumagaya plant)

⿎Safety Training VideoFor employees who have just started working at
a plant we made a DVD titled “The Promise of theSeven Safety Principles” in Japanese, English andChinese. In an easyto-understand manner
it highlights certain
dangerous conduct that
could lead to serious
accidents.

“The Promise of the Seven Safety Principles”
video

⿎Training to Prevent Heatstroke

We train employees of the company and of
business partners onheatstroke prevention
and treatment, including
early detection, and how
to respond quickly while
not aggravating theHeatstroke training and prevention (Tsuruga
Cement Co., Ltd.)
condition.
Safety patrol (Nghi Son Cement Corporation)

88

TAIHEIYO CEMENT REPORT 2020

Special Feature

Business Activities

Governance

The Environment

Collaborating
Collaborating with
with Society
Society

Partnership with Society

Communication with Communities

GRI103-2, 3, 203-1, 413-1

Closely Related SDGs

Major Activities (FY2020)
Activity

178

852

Community briefing on
environmental issues

64

173

● Briefing to members of a neighboring community on environmental issues

Environmental monitoring system

93

83

Community cleanup activities

364

2,495

Community forest
conservation and nature
protection activities

136

198

● Cleaning of roads and rivers surrounding business sites● Participating in a community cleanup activity● Participation in forest conservation activities such as planting seedlings and thinning● Support for preserving local communities’ farmlands● Protecting rare regional plants and animals● Concluding a partnership agreement with the forest union● Donating money for environmental protection● Plant and quarry tours for children, students, residents and government representatives in the community

448

6,508

1,204

10,312282

45,478

31

350

21

415

26

330

Disaster prevention activities

31

262

Others20

401

Scholarships

11

517

Developing engineers

31

1,254

Internships and career
experience opportunities

32

10,897

Others14308

Disaster area support

4－ ● Provision of a tentative storage yard for disaster waste, recycling of disaster waste as raw materials

Opening facilities to the public
Sponsoring, participating in andcooperating in local events
Provision of materials andrental of heavy machinery
Support for community
medical services
Support for the developmentof local industries● Providing schools and local organizations with access to our grounds, gymnasiums and meeting rooms● Sponsorship of a boys baseball tournament● Participating and cooperating in a sports tournament, community festivals and events● Providing and lending materials and heavy machinery to improve public spaces as-well as roads andwaterways in local communities● Provision of free medical checkups and medication● Agreement on use of the company’s premises as a medical heliport● Donating money to medical support● Participation and cooperation in activities to support the development of local industries● Providing industrial water for agricultural use● Conclusion of a regional disaster assistance agreement● Regional joint disaster prevention drills, regional fire-fighting activities● Financial assistance for fire-fighting activities● Support for economically distressed areas● Developing community leaders● Scholarships for students who need financial assistance living near our business sites● Opening free concrete technology schools to train concrete engineers● Implementation of technical guidance programs● Acceptance of domestic and foreign interns● Technical guidance for university students● Career experience, on-site training at quarries● Provision of materials for building schools in local communities● Participation in support groups● Donations of funds to a public library● Provision of company-managed housing and a gymnasium as an evacuation center (agreement with local authorities)● Donating money to affected areas

Protection of the Local Environment▪Participating in a Volunteer Cleanup around Mt. Hiwada in Hidaka
City and Fundraising for the Hidaka City Green Fund (Saitama Plant)

Once a year, employees at the Saitama plant volunteer
to conserve the environment and protect nature around
Mt. Hiwada, a symbol of Hidaka City. The employees,
particularly younger workers, remove weeds, rake up
fallen leaves and cut down dead trees. The activity offers
employees the opportunity to contribute to passing on therich natural wealth of Mt. Hiwada to coming generations
and deepen communication with local residents.
The plant also cooperates in fundraising for the Green
Fund, created to conserve the natural environment by
maintaining green spaces in Hidaka City and promoting
greening. The plant has participated in the activity since
1993 and received a letterof appreciation from the
Hidaka City government.
We will continue toparticipate in ways that
help to maintain an
Employees participating in the volunteer work
attractive Hidaka City.

Communication with
Communities

Supportfor areas
affected bydisaster● Meetings, briefings and social gatherings for environmental monitors

Creating a Healthy and
Safe Workplace

Education anddevelopmentof human
resources

Plant and quarry tours● Briefing on power generation

Supply Chain
Management

Regional
development

Examples● Briefing on quarry development work

Respecting Human Rights
and Diversity and Creating
an Energetic Workplace

Promotion of
local culture andcommunication

Attendees(Persons)● Briefing on waste treatment

Community briefing
Protectionof the local
environment

Sessions(Rounds)

Quality andTechnologies

Theme▪Receiving the 2019 Iwate Governor’s Award for Environmental
Conservation Activity to Mitigate Global Warming (Ofunato Plant)This award recognizes organizations and individuals fortheir outstanding efforts to prevent global warming and forthe technological development and commercialization of
products for reducing greenhouse gas emissions.
The plant raises employee awareness during a meetingon energy saving and energy saving proposal promotion
month. It also focuses on decreasing electricity intensity byintroducing highly efficient equipment, switching to LED
light bulbs on chimneys and suspending the operation of
unnecessary equipment. The plant, along with erex Co.,Ltd.,
jointly established a new company that is engaged inJapan’s largest-scale biomass power generation businesswith a biomass plant thatbegan operating in January
2020. For these reasons,the Iwate Prefectural
government recognized
the plant’s initiatives toward
Iwate Prefecture Environmental Conservation
Activity award ceremony
limiting global warming.
TAIHEIYO CEMENT REPORT 202089Collaborating with Society

Communication with Communities

Promotion of Local Culture and Communication

Regional Development▪Holding a Local Specialties Sales Event (Tohoku Branch)▪Removing Snow from Town Roads with Heavy
Machinery after a Heavy Storm (Buko Mining Co., Ltd.)The company holds what it calls “Marche,” an eventfor selling specialty products from regions in which
it maintains close connections. We held Tohoku
Restoration Support Marche for specialties of Iwate
Prefecture in November 2018 and sales events for
specialties of Fukushima Prefecture in March 2019and Miyagi Prefecture in October 2019.
Prior to the events the company signed acomprehensive partnership agreement with the
Miyagi Prefectural government in June 2019.
Miyagi Prefecture is the first place where we do not
operate a cement plant to sign a comprehensive
partnership agreement with us. Visitors have told usthat they were impressed by the attractiveness of
Miyagi Prefecture, suchas its specialty items
and sightseeing spots.
Through these activities
we will continue todeepen communication
Sales event for specialty items of Miyagi
with the region.
Prefecture (head office)
⿎Opening Our Facilities to the Community at
DuPont Quarry (CalPortland Company, U.S.)

Annual Open House welcoming the community
to our facilities took place at the DuPont Quarry of
CalPortland Company in Washington State. It was
attended by more than 200 people including local
residents, representatives of the state assemblyand city council, as well as our employees. Salmonpurchased from the Nisqually Tribe was served toparticipants followed by a tour of DuPont Quarry,which is expected to be expanded by 177 acres(71.6 ha). The company is implementing an initiative
to increase the flow of water in Sequalitchew Creek,
which runs near the expansion area, in partnershipwith the environmental authorities of the state andregional municipalities. We look forward to seeing
the return of salmon
traveling upstream,something that has not
happened in recent
years.

A joint committee of four companies involved inquarrying at Mt Buko, including Taiheiyo Cement,
removes snow at the request of the Yokoze Town
Office in the Nekoya district and on Town Roads
No. 1 and No. 3 after heavy snowfall. Each member
company uses heavy machinery they own to remove
the snow in their assigned areas.
At a joint committee meeting with the Yokoze
Town Office every year, as the snow season nears,
we confirm snow removal areas, storage spaces forremoved snow and areas where a de-icing agent isapplied. The companies
and government work
together to contributeto traffic safety in the
Nekoya district where
the quarry is located.
Heavy machinery used for snow removal▪Donating a Microbus to the Education Department of theCommunity (Taiheiyo Cement Philippines, Inc., Philippines)
Taiheiyo Cement Philippines, Inc. and Solid EarthDevelopment Corporation donated a microbus
to the Education Department of San Fernando,
the town where the companies’ plant is located.
The microbus is used by teachers to commute to
and from elementary schools in the town and as ameans of transport for students who attend afterschool activities. The donation ceremony was heldon April 25, 2019 and attended by the mayor and a
representative of the local education department.
The mayor expressed his appreciation for thecompany’s contribution to the town’s educational
development.
In addition, we have a scholarship system
for university and high school students. We also
donate cement to 30
elementary schools in
the town. Through these
activities, we contributeto improving its
educational programs.
A donated bus and the teachers who use it

Local residents participating in the tour

90

TAIHEIYO CEMENT REPORT 2020

Special Feature

Business Activities

Governance

The Environment

Collaborating
Collaborating with
with Society
Society

Supporting Areas Affected by Disaster⿎Cooperating in Producing of “Secret of Cement” inthe Let's Learn with Cartoons Series(General Affairs Department)▪Recycling Disaster Waste as Raw Materials (Chugoku Branch)Communication with
Communities

TAIHEIYO CEMENT REPORT 2020

Creating a Healthy and
Safe Workplace

The area surrounding the Matsuzaki companymanaged housing of the Oita plant lies near
the bank of the Aoe River, a location that can be
exposed to seawater forced upstream in the event ofa tsunami. An evacuation is therefore required whena significant earthquake occurs. The evacuation
center, however, is over a kilometer away from thearea, raising concerns that small children and theelderly may be evacuated too late.
We therefore recommended that the Tsukumi
City government use the common areas on andabove the 4th floor of the six-story Matsuzaki
company-managed housing as a temporary
evacuation center. We concluded the agreement on
its use for this purpose in July 2011.
Fortunately, thehousing space has not
yet been needed. We willcontinue to offer it to local
residents as an evacuation
center in the event of an
Matsuzaki company-managed housing of the
Oita plant
emergency.

Supply Chain
Management▪Participating in the “Riko-challe” Program (Fujiwara Plant)

The Science, Technology, Engineering andMathematics Challenge (Riko-challe) program is led
by the Gender Equality Bureau of the Cabinet Office.
Its goal is to help female students who are interested
in science, technology, engineering and mathematics
select their careers. We have been participating in the
program since 2017 while also holding in-house eventsfor female students to experience work.
These took place at the Oita plant in 2017 and theCentral Research Laboratory in 2018. Another was held
this year at the Fujiwara plant. The students were given
a tour of the cement
plant and limestone
quarry, and then met our
female engineers to ask
questions and talk aboutclub activities and career
Students with female engineers
selection.

⿎Maintaining the Agreement for Use of MatsuzakiCompany-managed Housing as an Evacuation
Center for Tsukumi City Residents (Oita Plant)

Respecting Human Rights
and Diversity and Creating
an Energetic Workplace

A cartoon book titled Secret of Cement by Gakken Plus
Co., Ltd. was published in March 2020 as part of a series ofcartoon books under the name “Let’s Learn with Cartoons.”
The goal of the series is to explain about subjects invarious fields using cartoons so children can readily
understand them. The series is distributed to elementary
schools, public libraries and children’s halls, and is usedas supplementary material for classes and for otherproposes. In producing the book the company and its
group companies cooperated extensively, and also invited
the writer to its plants and laboratories where he wasprovided with useful reference materials. This facilitated the
publication of a book that explains
the cement industry in an easyto-understand way. We received
many comments from schools thatreceived it, such as in reference tolearning the difference between
cement and concrete, having
technical content explained in aneasy-to-understand manner using
cartoons and learning new things
Secret of Cement coverabout something we see every day.

The Chugoku branch provided its former premises as atemporary storage yard for disaster waste caused by theWest Japan Flood in July 2018. It transported some ofthe soil, approximately 31,500 tonnes, generated in Kure
City, Hiroshima Prefecture, during the period between
June 2019 and April 2020 to the Ofunato plant, the Oita
plant and the Itoigawa plant of Myojo Cement Co., Ltd.
by sea, where it was recycled as raw materials.
The branch implemented this initiative in close
cooperation with COCCO Co., Ltd., an industrial waste
treatment operator in the affected area, and REMATEC
Holdings Corporation, headquartered in Kishiwada
City, Osaka Prefecture,
who have extensive
experience in treating
disaster waste forreconstruction and otheroperations for the Great
Handling Cargo at the Ofunato Plant
East Japan Earthquake.

Quality andTechnologies

Education and Development of Human Resources

91

GCCA Key Performance Indicators
GRI301-2, 302-1, 3, 303-1, 305-4, 5, 7, 403-2, 9, MM2

In accordance with the GCCA Sustainability Charter,
member companies of the GCCA pledge to publicly
disclose their performance on the priority issues facing
the cement industry using the key performance indicators(KPIs) developed by the GCCA. They also pledge to set andmake efforts to achieve reduction targets for CO2 emissions
and major air pollutants. We set Group targets using the

CO 2 Emission Reduction Targets

KPIs and our progress toward achieving these targets areshown in the following chart.
In addition, Group performance for CO2 and climate
protection, emissions monitoring and reporting, health andsafety, and water has been subjected to an independent limited
assurance review by KPMG AZSA Sustainability Co., Ltd.

Reduction Target for Main Air Pollutants

Cement production-related CO 2 emissions from Taiheiyo Cement andgroup companies

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

Reduce specific net CO 2 emissions per tonne of
cementitious product by 10% or more from FY2001
levels by FY2026. (CSR Objectives for 2025)

Limit NOx, SOx and dust levels per tonne ofclinker (g/t-clinker) to the target levels achieved in
FY2011■ Key Performance Indicators of the GCCA for FY2020*

1

CO2 and Climate Protection (CO2 emissions, energy consumption)

Number of facilities using GCCA “The Cement CO2 and Energy Protocol” guidelines for emissions inventory
Percentage of facilities using GCCA “The Cement CO2 and Energy Protocol” guidelines for emissions inventory (%)
Scope 1*2
Gross*3
Total CO2 emissions (million tonnes/year)
Net*4
Specific gross CO2
emissions
CO2 emissions per tonne of cementitious product*5 (kg-CO2/t-cementitious)
Specific net CO2
emissions
Emissions from electricity purchased (million tonnes/year) (Scope 2)
Specific heat consumption of clinker production (MJ/t-clinker)
Alternative fuel rate (% of thermal energy consumption) of kiln
Biomass fuel rate (% of thermal energy consumption) of kiln
Clinker/cement ratio (%)
Alternative Raw Materials Use

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 basis)
Health and Safety

Fatalities
Number of fatalities for directly employed
Fatality rate per 10,000 for directly employed
Number of fatalities for indirectly employed (contractors and subcontractors)
Number of fatalities involving third parties (not employed)
Lost-time injuries
Number of lost-time injuries for directly employed
Injury frequency rate of directly employed employees (per 1,000,000 working hours)
Number of lost time injuries for indirectly employed (contractors and subcontractors)
Emission Monitoring and Reporting

Percentage of clinker produced by kilns covered by a monitoring system, either continuous or discontinuous for main andother pollutants
NOx
Percentage of clinker produced by kilns which have installed continuous measurements
SOx
for the main pollutants
Dust
NOx
Total emissions (tonnes/year)
SOx
Dust
NOx
Specific emissions (g/t-clinker)
SOx
Dust
Local Impacts

Percentage of sites with community engagement plans in place
Percentage of active sites with quarry rehabilitation plans in place
Number of active sites where biodiversity issues are addressed
Water
Amount of withdrawal (1,000 m )3Amount of discharge (1,000 m3)

FY2018FY2019FY2020

18
100
24.6
23.3
22.4

18
100
24.8
23.5
22.6

18
100
25.0
23.7
22.8

703

696

701

679

671

675

0.985
3,303
11.6
1.8
82.9

0.963
3,268
12.0
1.8
82.8

0.896
3,298
12.3
1.8
82.8

FY2018FY2019FY2020

15.5

16.0

15.5

FY2018FY2019FY2020

1
2.63
0
0

0
0
1
0

0
0
1
0

7
0.87
6

8
1.01
8

9
1.16
7

FY2018FY2019FY2020

100

100

100

100
84.7
100
33,048
2,214
841
1,197
80
30

100
84.2
100
33,183
1,881
768
1,187
67
27

100
84.0
100
34,565
1,778
839
1,227
63
30

FY2018FY2019FY2020FY2018FY2019FY2020100
100
3Fresh water
SeawaterFresh water
Seawater

27,596
149,056
12,294
149,056100
100
3

26,656
149,776
12,167
149,781100
100
327,607
147,372
13,674
147,377*1Accounting and reporting of KPIs for FY2020 is in accordance with “GCCA Sustainability Guidelines for the monitoring and reporting of CO2 emissions from cement manufacturing Ver.
0.1,” “GGCA Sustainability Guidelines for the monitoring and reporting of safety in cement manufacturing Ver. 0.1,” “GCCA Sustainability Guidelines for the monitoring and reporting ofemissions from cement manufacturing Ver. 0.1,” and “ GCCA Sustainability Guidelines for the monitoring and reporting of water in cement manufacturing Ver. 0.1.” In addition, 100% of
data for subsidiaries and partner companies (regardless of percentage of ownership) subject to aggregation is counted.
*2 CO2 emissions that do not include the disclosure items mandated by the GCCA but derive from raw materials and fuels in the cement manufacturing process, including CO2 emissions
generated from in-house power generation, and fall under Scope 1.
*3 CO2 emissions deriving from raw materials and fuels, excluding CO2 emissions generated from in-house power generation, in the cement manufacturing process.
*4 CO2 emissions deriving from raw materials and fuels, excluding CO2 emissions generated from alternative fuels and in-house power generation, in the cement manufacturing process.
*5 Total clinker produced plus mineral components processed at the plants.



92

TAIHEIYO CEMENT REPORT 2020

Independent Assurance Report on GCCA Key Performance Indicators
GRI102-56

TAIHEIYO CEMENT REPORT 202093

Financial Data

Primary Consolidated Financial Data (Ten-Year)

Fiscal year

FY2011FY2012FY2013

FY2014(April 1, 2010 throughMarch 31, 2011)(April 1, 2011 throughMarch 31, 2012)(April 1, 2012 throughMarch 31, 2013)(April 1, 2013 throughMarch 31, 2014)

Net sales

726,475

727,849

747,616

840,288

Operating income

16,43329,18540,65970,434

Ordinary income

7,412

18,496

32,667

69,590

Profit attributable to owners of parent

4,450

7,845

11,32935,223

Net assets

166,819

196,144219,826

273,312

Total assets

998,741

982,231

982,473

1,015,564

Interest-bearing debt

566,171510,184

473,959

435,118

1,492.8

1,380.9

1,558.5

1,955.7

47.3

71.6

92.2

286.7

Statement of Income (millions of yen)

Financial Position (millions of yen)

Per share information* (yen)Equity per share
Earnings per share

Cash Flows (millions of yen)
Cash flows from operating activities

36,99536,62461,50588,558Cash flows from investing activities

14,177(17,252)(16,441)(27,926)

Cash flows from financing activities(100,480)(19,227)(51,792)(62,269)

61,26559,78554,40855,604

Operating Income on Net Sales

2.3

4.0

5.4

8.4

Return on assets (ROA) (ordinary income)

0.7

1.9

3.3

7.0

3.0

5.1

6.3

16.3

14.1

17.3

19.5

23.7

Capital Expenditure

32,42935,78532,52439,094

Depreciation

43,097

41,62439,42240,553R&D expense

4,022

3,684

3,846

4,052

Cash and cash equivalents at year-end

Financial Indicator (%)

Return on Equity（ROE)
Equity ratio

Other (millions of yen)

*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 Medium-Term
Management Plan

Business Restructuring

Business Restructuring in Light of the Withdrawal of
Quantitative Targets Listed in the 10 Medium-Term
Management Plan		
The Company faced a harsh business environment due asharp decline in domestic cement demand which was far
below expectations. Therefore, we decided to withdraw
the quantitative target for the final year of the 10 MediumTerm Management Plan (which ends in FY2011) and to
implement business structural reforms.

Main business reform measures and profit improvement● Review and restructuring of the domestic production
structure● Review of organizational personnel structure● Review of domestic cement sales structure andstreamlining of logistics

94

TAIHEIYO CEMENT REPORT 2020

Profitimprovement:

16billion yen/year

14 Medium-Term
Management Plan
(FY2013-FY2015)

Business Strategies

Accomplishment of social mission(Making maximum contributions to projects related torecovery from the Great East Japan Earthquake)

Pursuit of main businesses(Establishing sustainability in the domestic cementbusiness and fulfilling responsibilities as part of a socialinfrastructure industry)

Expansion of growth field(Promotion of the materials business / Further
advancement of international business development)

Achievement in the final year of the plan
● Operating Income on Net Sales: 7.8%
● ROA (ordinary income): 6.6%

● Net debt/equity ratio (DER) : 1.1 times

FY2015

FY2016FY2017FY2018FY2019FY2020(April 1, 2014 throughMarch 31, 2015)(April 1, 2015 throughMarch 31, 2016)(April 1, 2016 throughMarch 31, 2017)(April 1, 2017 throughMarch 31, 2018)(April 1, 2018 throughMarch 31, 2019)(April 1, 2019 throughMarch 31, 2020)

842,848835,359

798,588871,113916,071884,350

65,40660,433

63,235

65,12966,01261,00867,89060,22559,80264,36664,30660,541

44,11436,40447,59738,52543,45239,151

347,490357,073

400,034

432,326

450,645473,241

1,040,602

1,014,075

1,015,415

1,020,111

1,034,428

1,032,923

399,138

394,497

340,930

288,606

279,615

266,115

2,463.1

2,591.1

2,930.2

3,193.7

3,388.4

3,567.6

359.1

296.3

383.9

311.4

351.7

319.9

77,00075,627

94,433

107,683

97,28390,902(31,377)(71,099)(10,394)(48,460)(58,025)(65,534)(52,713)(4,027)(81,855)(65,818)(33,753)(29,436)

50,64550,072

51,97444,97650,08445,748

7.8

7.2

7.9

7.5

7.2

6.9

6.6

5.9

5.9

6.3

6.3

5.9

16.3

11.7

14.0

10.2

10.7

9.2

29.1

31.4

35.6

38.7

40.1

42.3

42,16044,07654,38458,087

67,796

77,67742,401

43,95744,45944,00344,00848,863

4,422

4,228

4,538

4,452

4,311

4,431

17 Medium-Term
Management Plan
(FY2016-FY2018)

20 Medium-Term
Management Plan
(FY2019-FY2021)

Business Strategies

Business Strategies		

Strengthening of management foundations

Formulate and implement growth strategies

Support for national projects

Support for national projects

Enhancement of existing businesses andformulate/implement growth strategies

Strengthen the earnings capacity of existing
businesses

Enhancement of research & development

Achievement in the final year of the plan

Target for the final year of the plan

● ROA (ordinary income): 6.3%

● ROA (ordinary income): 8% or more

● Operating Income on Net Sales: 7.5%

● Net debt/equity ratio (DER) : 0.6 times● Operating Income on Net Sales: 9% or more

● Net debt/equity ratio (DER) : 0.5 times or less

TAIHEIYO CEMENT REPORT 202095

Financial Data

Consolidated Balance Sheets(Millions of yen)

FY2020FY2019(As of March 31, 2019)(As of March 31, 2020)(Thousands of U.S. dollars)

FY2020(As of March 31, 2020)

AssetsCurrent assets
Cash and deposits

56,56151,641

474,519

Notes and accounts receivable - trade180,535

159,048

1,461,435

Electronically recorded monetary claims - operating

12,99813,507

124,114283,903

Merchandise and finished goods

31,13830,897Work in process

2,268

2,310

21,228Raw materials and supplies

43,31445,075414,184

Short-term loans receivable

3,421

3,289

30,225

Other

11,714

14,035

128,965(646)(1,302)(11,970)

341,307

318,5022,926,606

Allowance for doubtful accounts
Total current assets
Non-current assets			
Property, plant and equipment
Buildings and structures
Accumulated depreciation

483,443

490,824

4,510,011(347,790)(351,877)(3,233,273)

Buildings and structures, net

135,653

138,947

1,276,738

Machinery, equipment and vehicles

886,495

919,5568,449,473

Accumulated depreciation(751,845)(756,611)(6,952,236)

Machinery, equipment and vehicles, net

134,649

162,944

1,497,237

157,638

164,869

1,514,930

Land
Leased assets
Accumulated depreciation

51,64853,175

488,610(29,527)(31,234)(287,000)

Leased assets, net

22,12021,941

201,610

Construction in progress

48,67830,665

281,778

Other
Accumulated depreciation
Other, net
Total property, plant and equipment

53,171

66,706

612,943(30,971)(41,521)(381,528)

22,19925,184

231,414

520,939544,553

5,003,709

Intangible assets			
321

179

1,650

Other

Goodwill

30,553

29,634

272,301

Total intangible assets		

30,87529,814273,952
762,025

Investments and other assets		
Investment securities

83,69282,931Long-term loans receivable

1,754

1,880

17,275Retirement benefit asset

17,807

11,090101,909

Deferred tax assets

17,10921,118

194,053

Other

28,37429,359269,772

Allowance for doubtful accounts(7,432)(6,327)(58,137)

Total investments and other assets

141,306

140,053

1,286,897

Total non-current assets
Total assets

96

TAIHEIYO CEMENT REPORT 2020

693,120

714,420

6,564,558

1,034,428

1,032,923

9,491,164

(Millions of yen)

FY2020FY2019(As of March 31, 2019)(Thousands of U.S. dollars)

FY2020(As of March 31, 2020)(As of March 31, 2020)

Liabilities
Current liabilities			
Notes and accounts payable - trade96,27583,430Electronically recorded obligations - operating

8,716

5,330

48,976135,381

120,783

1,109,832

Commercial papers

4,000

12,000110,263

Current portion of bonds

10,000——

Income taxes payable

8,376

6,024

55,358Provision for bonuses

6,046

6,158

56,584

220

139

1,279

Other

80,37379,906734,228

Total current liabilities

349,390313,771

2,883,134

Short-term borrowings

Other provisions

766,610Non-current liabilities
Bonds payable

30,00030,000275,659

Long-term borrowings

100,233

103,332

949,488

Deferred tax liabilities

7,630

7,491

68,838Retirement benefit liability

24,20624,999229,706

Provision for retirement benefits for directors

535

521

4,791

Provision for special repairs

75

128

1,176

Other provisions

757

828

7,614

Lease obligations

17,61617,996

165,359

Asset retirement obligations

7,619

7,341

67,462

Other

45,71853,270489,487

Total non-current liabilities		

234,392

245,9102,259,584

Total liabilities			

583,783

559,682

5,142,719

Share capital

86,174

86,174

791,824

Capital surplus

60,40860,233

553,466

Retained earnings

294,265

326,0862,996,289

Treasury shares(16,081)(16,098)(147,927)

Total shareholders' equity		

424,767

456,395

4,193,652

8,688

6,723

61,784

(3)

(0)

(3)

Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment

5,019

4,968

45,653(20,128)(21,413)(196,761)

Remeasurements of defined benefit plans(3,632)(9,995)(91,844)

Total accumulated other comprehensive income(10,057)(19,716)(181,171)

35,93536,563335,965

450,645473,241

4,348,445

1,034,428

1,032,923

9,491,164

Non-controlling interests
Total net assets
Total liabilities and net assets		

Note: U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥108.83=US$1, the approximate exchange rate prevailing on the Foreign Exchange Market on March 31, 2020.

TAIHEIYO CEMENT REPORT 202097

Financial Data

Consolidated Statements of Income(Millions of yen)

FY2020FY2019(April 1, 2018 throughMarch 31, 2019)(Thousands of U.S. dollars)

FY2020(April 1, 2019 throughMarch 31, 2020)(April 1, 2019 throughMarch 31, 2020)

Net sales

916,071884,350

8,125,979

Gross profit

203,411

195,029

1,792,052

Cost of sales

712,660

689,3216,333,927

Selling, general and administrative expenses
Amortization of goodwill

490

89

826

Other

136,907

133,930

1,230,642

Total selling, general and administrative expenses

137,398

134,020

1,231,469

66,01261,008560,582

Operating income
Non-operating income
Interest income

632

540

4,966

Dividend income

1,227

1,267

11,648

Rental income from real estate
Share of profit of entities accounted for using equity method

247

141

1,304

2,288

2,427

22,306

Foreign exchange gains

—

1,035

9,516

Other

3,294

2,661

24,457

Total non-operating income		

7,691

8,075

74,200Interest expenses

4,068

3,876

35,617

Loss on disposal of inventories

1,126

126

1,166

Other

4,202

4,538

41,704Non-operating expenses		

Total non-operating expenses

9,397

8,541

78,48864,30660,541

556,294

Gain on disposal of non-current assets

1,149

754

6,936

Gain on sales of investment securities

532

205

1,889

—

2,730

25,091

Ordinary income
Extraordinary income

Compensation income
Other

234

147

1,352

1,917

3,838

35,270Loss on disposal of non-current assets

4,828

5,580

51,277

Loss on sales of investment securities

133

36

330

Loss on valuation of investment securities

326

222

2,041

1,101

5,451

50,093660

1,311

12,054

Total extraordinary losses

7,049

12,602

115,798

Profit before income taxes

59,174

51,777475,766

Income taxes - current

11,760

11,223103,127

Income taxes - deferred

1,796

(300)

(2,759)Total income taxes

13,557

10,923

100,368

Profit45,61640,854375,398

Profit attributable to non-controlling interests

2,164

1,703

15,653

Profit attributable to owners of parent

43,45239,151

359,745

Total extraordinary income
Extraordinary losses		

Impairment loss
Other

Note: U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥108.83=US$1, the approximate exchange rate prevailing on the Foreign Exchange Market on March 31, 2020.

Consolidated Statements of Comprehensive Income(Millions of yen)

FY2020FY2019(April 1, 2018 throughMarch 31, 2019)
Profit(Thousands of U.S. dollars)

FY2020(April 1, 2019 throughMarch 31, 2020)(April 1, 2019 throughMarch 31, 2020)

45,61640,854375,398(1,657)(1,720)(15,812)

(4)

3

29

Foreign currency translation adjustment(4,733)(1,494)(13,736)

Remeasurements of defined benefit plans(3,553)(6,193)(56,911)

(641)

(302)

(2,781)(10,590)(9,708)(89,211)35,02631,145286,186

Comprehensive income attributable to owners of parent

33,74629,542

271,457

Comprehensive income attributable tonon-controlling interests

1,280

1,602

14,728Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to98

Note: U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥108.83=US$1, the approximate exchange rate prevailing on the Foreign Exchange Market on March 31, 2020.

TAIHEIYO CEMENT REPORT 2020

Consolidated Statements of Changes in Net Assets
FY2020 (April 1, 2019 through March 31, 2020)

Shareholders’ equity			Balance at beginning of
periodRestated balance

Accumulated other comprehensive income		SharecapitalCapitalsurplusRetainedearnings

Treasuryshares

86,17460,408294,265(16,081)

Cumulative effects ofchanges in accounting
policies(48)
86,17460,408294,217(Millions of yen)

Valuationdifference
Totalshareholders' on availablefor-sale
equitysecurities

424,767

8,688

Deferred
gains orlosses onhedges(3)

Total
NonForeign
Remeasurements accumulated
Revaluation currency
controllingof defined
otherreserve for translationinterests
benefitcomprehensive
land
plans
adjustment
income5,019(20,128)(3,632)(10,057)(48)(16,081)424,718

8,688

(3)

5,019

(20,128)(3,632)(10,056)

Total net
assets35,935

450,645

(57)

(106)

35,878450,539

Changes in items during
periodChange in ownershipinterest of parent due totransactions with noncontrolling interests

(220)

(220)

(220)

Dividends of surplus(7,350)(7,350)(7,350)

Profit attributable toowners of parent

39,151

39,151

39,151

(60)

(60)

(60)

43

78

78

78

78

Purchase of treasury
shares
Disposal of treasury
shares35

Increase by merger ofconsolidated subsidiaryand non-consolidated
subsidiary

10

68

Adjustment to retained
earnings due to change
in US tax rate—

Net changes in
items other thanshareholders' equity(1,964)

Total changes in items
during period
Balance at end of period

3

(50)

(1,284)(6,362)(9,659)684(8,974)—(174)

31,868(17)

31,676(1,964)3(50)(1,284)(6,362)(9,659)684

22,702

86,17460,233

326,086(16,098)456,395

6,723

(0)

4,968

(21,413)(9,995)(19,716)

36,563473,241(Thousands of U.S. dollars)

FY2020 (April 1, 2019 through March 31, 2020)

Shareholders’ equity			Balance at beginning of
periodSharecapitalCapitalsurplus791,824

555,073 2,703,904 (147,769) 3,903,033

Cumulative effects ofchanges in accounting
policies
Restated balance

Retainedearnings

Treasuryshares

Accumulated other comprehensive income		

Valuationdifference
Totalshareholders' on availablefor-sale
equitysecurities(443)
791,824

79,832

Deferred
gains orlosses onhedges(32)

Total
NonForeign
Remeasurements accumulated
Revaluation currency
controllingof defined
otherreserve for translationinterests
benefitcomprehensive
land
plans
adjustment
income46,120 (184,956)(33,382)(92,417)(443)

555,073 2,703,460 (147,769) 3,902,589

330,202 4,140,818(531)

79,832(32)

46,120(184,956)(33,382)(92,417)

Total net
assets(975)

329,671 4,139,843

Changes in items during
periodChange in ownershipinterest of parent due totransactions with noncontrolling interests(2,022)(2,022)(2,022)

Dividends of surplus(67,545)(67,545)(67,545)

Profit attributable toowners of parent

359,745359,745359,745

(557)

(557)

(557)

399

722

722

720

720

Purchase of treasury
shares
Disposal of treasury
shares323

Increase by merger ofconsolidated subsidiaryand non-consolidated
subsidiary

91

628

Adjustment to retained
earnings due to change
in US tax rate—

Net changes in
items other thanshareholders' equity
Total changes in items
during period
Balance at end of period—
791,824(18,048)

28

(466)

(11,804)(58,462)(88,754)6,293(82,460)

291,062(18,048)

28

(466)

(11,804)(58,462)(88,754)6,293

208,602553,466 2,996,289 (147,927) 4,193,652

61,784(3)(1,607)

292,828(158)

45,653 (196,761)(91,844) (181,171)

335,965 4,348,445

Note: U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥108.83=US$1, the approximate exchange rate prevailing on the Foreign Exchange Market on March 31, 2020.

TAIHEIYO CEMENT REPORT 202099

Financial Data

(Millions of yen)

FY2019 (April 1, 2018 through March 31, 2019)
Shareholders' equity			Balance at beginningof period

Accumulated other comprehensive income		

Valuation
Total
difference
shareholders' on availableequity
for-salesecurities

Deferred
gains orlosses onhedgesTotal
NonForeign
Remeasurements accumulated
Revaluation currency
controllingof defined
otherreserve for translationinterests
benefitcomprehensive
land
plans
adjustment
incomeTotal net
assetsSharecapitalCapitalsurplusRetainedearnings

Treasuryshares

86,17460,339260,016(10,947)

395,582

10,941

1

5,057(16,201)

(111)

(313)

37,058432,326

86,17460,339260,016(10,947)

395,582

10,941

1

5,057(16,201)

(111)

(313)

37,058432,326

Cumulative effects
of changes inaccounting policies
Restated balance
Changes in items
during period
Change inownership interestof parent due totransactions with
non-controllinginterests

69

69

69

Dividends of surplus(9,909)(9,909)(9,909)Profit attributable toowners of parent

43,45243,45243,452(5,134)(5,134)(5,134)000Purchase of treasury
shares
Disposal of treasury
shares0

Increase by mergerof consolidated
subsidiary andnon-consolidated
subsidiary

(53)

(53)

(53)

Adjustment toretained earnings
due to change in US
tax rate

759

759

759

Net changes in
items other thanshareholders' equity
Total changes in items
during period
Balance at end of
period100(2,252)(4)(37)(3,927)(3,521)(9,744)(1,122)(10,866)—

69

34,249(5,134)29,185(2,252)(4)(37)(3,927)(3,521)(9,744)(1,122)

18,31886,17460,408294,265(16,081)424,767

8,688

(3)

5,019

(20,128)(3,632)(10,057)

35,935

450,645TAIHEIYO CEMENT REPORT 2020

Consolidated Statements of Cash Flows(Millions of yen)

FY2019FY2020(April 1, 2018 throughMarch 31, 2019)

Cash flows from operating activities(Thousands of U.S. dollars)

FY2020(April 1, 2019 throughMarch 31, 2020)(April 1, 2019 throughMarch 31, 2020)

Profit before income taxes

59,174

51,777475,766

Depreciation

44,00848,863448,989

Share of loss (profit) of entities accounted forusing equity method

490

89

826

(2,288)(2,427)(22,306)

326

222

2,041

Decrease (increase) in net retirement benefit asset and liability(1,364)(1,172)(10,777)

15

(14)

(131)

Amortization of goodwill

Loss (gain) on valuation of investment securities

Increase (decrease) in provision for retirement
benefits for directors
Increase (decrease) in provision for bonuses

24

109

1,006

(185)

91

838

52

42

394

Interest and dividend income(1,860)(1,808)(16,614)

Interest expenses

4,068

3,876

35,617

Loss (gain) on sales of investment securities

(399)

(169)

(1,558)Loss (gain) on disposal of non-current assets

3,678

4,825

44,341

Impairment loss

1,101

5,451

50,093

Decrease (increase) in trade receivables(2,728)20,800191,126

Decrease (increase) in inventories(4,207)(1,661)(15,269)

Increase (decrease) in trade payables

9,577(16,151)(148,414)

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in other provisions

Other, net(1,218)(6,674)(61,333)

Subtotal

108,266

106,069

974,636

Interest and dividends received

2,844

2,321

21,330Interest paid

(4,019)(3,890)(35,752)

Income taxes paid

(9,808)(13,597)(124,946)

Cash flows from operating activities

97,28390,902835,268

Cash flows from investing activities
Decrease (increase) in time deposits

1,995

515

4,733

(64,520)(66,378)(609,927)

Proceeds from sales of non-current assets

2,208

1,367

12,567Purchase of other depreciated assets

(142)

(240)

(2,210)Purchase of non-current 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

—

0

2

(43)

(539)

(4,960)

1,132

393

3,612

1,308

—

—

Loan advances(2,639)(3,240)(29,779)

Collection of loans receivable

3,078

2,782

25,570

Other, net

(402)

(193)

(1,782)(58,025)(65,534)(602,174)

Cash flows from investing activities

Cash flows from financing activities
Net increase (decrease) in short-term borrowings

1,509

200

1,838

Increase (decrease) in commercial papers

4,000

8,000

73,509Proceeds from long-term borrowings

57,12744,663410,394

Repayments of long-term borrowings(75,721)(56,077)(515,275)

Proceeds from issuance of bonds

20,000——

Redemption of bonds(15,035)(10,000)(91,886)

Proceeds from sales of treasury shares

0

94

871

Purchase of treasury shares(5,026)

(22)

(204)

Dividends paid

(9,909)(7,350)(67,545)

Dividends paid to non-controlling interests(1,565)(681)(6,265)

Other, net(9,133)(8,262)(75,918)

Cash flows from financing activities(33,753)(29,436)(270,481)

(543)

(301)

(2,766)

Net increase (decrease) in cash and cash equivalents

4,960(4,369)(40,154)

Cash and cash equivalents at beginning of period

44,97650,084

460,209

147

33

307

50,08445,748420,363

Effect of exchange rate change on cash and cash
equivalents

Increase in cash and cash equivalents resulting from merger
Cash and cash equivalents at end of period

Note: U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥108.83=US$1, the approximate exchange rate prevailing on the Foreign Exchange Market on March 31, 2020.

TAIHEIYO CEMENT REPORT 2020

101Financial Data

Consolidated Segment Information
⿎Information of Net Sales, Profit or Loss, Assets, Liabilities, and Other Items by Reportable Segment* are as Follows:(Millions of yen)

FY2020 (April 1, 2019 through March 31, 2020)

Reportable Segments

CementBusiness

MineralResources
Business

Environmental
Business

Construction
Materials
Business

Sales to outside customers

617,838

55,96576,281

77,035827,121

57,228Inter-segment sales

10,57824,181

8,140

4,268

47,16825,802

Total

628,416

80,14784,42281,303874,290

83,031Other*1

Total

Adjustment*2

Consolidated
Total*3

884,350—

884,350

72,971(72,971)—957,321(72,971)884,350

Total

Net sales

Segment income

36,526

7,179

7,707

4,537

55,951

5,327

61,279(270)

61,008Segment assets

639,899

103,590

25,714

77,589846,794

221,295

1,068,089(35,165)

1,032,923

The Others
34,333

4,956

666

2,502

42,4595,879

48,339523

48,863

Amortization of goodwill

89

—

—

—

89

—

89

—

89

Equity in earnings ofunconsolidated subsidiaries
and affiliates

662

(8)

(7)

1,354

2,001

421

2,423

4

2,427

Impairment loss

4,894

58

—

—

4,952

498

5,451

—

5,451

Investment inunconsolidated
subsidiaries and affiliates
accounted for by the equity
method18,245—267

16,07934,592

15,61450,207434

50,641

Increase for property, plant,
equipment, and intangible
assets*4

45,70910,972

2,750

3,035

62,467

13,24675,714

1,963

77,677

Depreciation*4(Thousands of U.S. dollars)

FY2020 (April 1, 2019 through March 31, 2020)

Reportable Segments

CementBusiness

MineralResources
Business

Environmental
Business

Construction
Materials
Business

Total

5,677,097

514,250

700,924

707,853

97,201

222,198

74,7995,774,298

736,448775,724

Adjustment*2

Consolidated
Total*3

8,125,979—

8,125,979

237,088670,507(670,507)—

762,942

8,796,487(670,507)

8,125,979

Other*1

Total

7,600,125

525,854

39,219433,418

747,072

8,033,544

Net sales
Sales to outside
customers
Inter-segment sales
Total
Segment income

335,629

65,96570,824

41,694514,114

48,956563,071(2,488)560,582

Segment assets

5,879,810

951,852

236,285

712,941

7,780,889

2,033,401

9,814,291(323,126)

9,491,164

The Others
315,475

45,547

6,128

22,995

390,146

54,028444,175

4,813

448,989

Amortization of goodwill

826

—

—

—

826

—

826

—

826

Equity in earnings ofunconsolidated
subsidiaries and affiliates

6,086

(76)

(68)

12,44818,3893,877

22,26640

22,306

Impairment loss

44,973536——

45,510

4,583

50,093—50,093

Investment inunconsolidated
subsidiaries and affiliates
accounted for by theequity method

167,649—

2,456

147,748

317,854

143,479

461,334

3,988

465,323

Increase for property,
plant, equipment, andintangible assets*4

420,006

100,820

25,27727,889573,994

121,717695,71118,037713,749

Depreciation*4

Note: U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥108.83=US$1, the approximate exchange rate prevailing on the Foreign Exchange Market on March 31, 2020.

102

TAIHEIYO CEMENT REPORT 2020

(Millions of yen)

FY2019 (April 1, 2018 through March 31, 2019)

Reportable Segments

MineralResources
Business

CementBusiness

Environmental
Business

Construction
Materials
Business

85,081

77,940

Other

Total

Adjustment

Consolidated
Total*3

916,071—916,071

Total

Net sales
Sales to outside
customers

636,385

59,401

Inter-segment sales

10,092

24,860

7,611

Total

646,477

84,262

92,693858,808

57,263

4,245

46,80928,76575,575(75,575)—

82,185905,618

86,028991,647(75,575)

916,071

Segment income

41,743

8,242

6,614

4,999

61,5594,658

66,257(244)

66,012

Segment assets

647,846

101,608

21,29280,813

851,561

217,462

1,069,023(34,595)

1,034,428

The Others
31,023

4,279

671

2,405

38,381

5,258

43,639368

44,008

Amortization of goodwill

490

—

—

—

490

—

490

—

490

Equity in earnings ofunconsolidated
subsidiaries and affiliates

508

40

11

1,481

2,042

252

2,295

(6)

2,288

Impairment loss

Depreciation*4

39

353

—

103

496

604

1,101

—

1,101

Investment inunconsolidated
subsidiaries and affiliates
accounted for by the equity
method17,145—281

15,16632,593

15,68348,276437

48,714

Increase for property,
plant, equipment, andintangible assets*438,557

10,246

1,852

3,626

54,282

11,89966,182

1,614

67,796

⿎Geographic Segments(Millions of yen)

FY2020Japan

U.S.A.

Other

Total

Net sales

653,524

143,705

87,120884,350

Non-current assets

388,658

110,862

45,032544,553*1 The “Other” category accounts for business segments that do not constitutereportable segments and include the real estate, engineering, data processing,financial services, transportation and warehouse, chemical products, sports, andelectric power supply businesses.
*2 Adjustment for segment income signifies the eliminated amount of intersegment
transactions. The adjusted amount for segment assets signifies 55,055 million yen
in corporate assets not allocated to each reportable segment and the eliminatedamount of intersegment transactions. Corporate assets consist mainly of Taiheiyo
Cement Corporation’s surplus operating funds (deposits) and assets associatedwith the Administration Department.
*3 Segment income has been adjusted with regard to operating income reported in
the Consolidated Statements of Income.
*4 The increase in depreciation and increase for property, plant, equipment andintangible assets reported under the “Other” category include amounts associatedwith long-term prepaid expenses.

*Outline of Reportable Segments
The Company’s reportable segments are component units of the Company for which discrete financial information is available and for which the Board of Directors regularly conducts areview to determine the allocation of management resources and assess performance. The reportable segments have been divided into “Cement,” “Mineral Resources,” “Environmental”
and “Construction Materials” according to the products and services handled by each business. The following are major products provided by each reportable segment.
CementMaterial Resources

Environmental

Construction Materials

Various cement products,
ready-mixed concrete

Aggregates, limestone
products

Waste recycling,
desulfurization materials

Precast concrete products,
autoclaved lightweight
concrete (ALC)

Method of Calculating Net Sales, Income or Loss, Assets, Liabilities and Other Items for Each Reportable Segment
The accounting method applied to reportable segments is basically the same as the accounting method used to prepare the consolidated financial statements. Income for eachreportable segment is based on operating income.
Amounts reported as intersegment sales and transfers are based on actual market value.

TAIHEIYO CEMENT REPORT 2020103

Corporate Information and Stock Overview GRI102-1, 3, 5, 56

Company Outline (as of March 31, 2020)

Website Information
https://www.taiheiyo-cement.co.jp/english/index.html

Company name TAIHEIYO CEMENT CORPORATION

⿎Organization and Business Information

EstablishedMay 3, 1881

Capital86,174,248,572 yen

About Us

Headquarters*

BUNKYO GARDEN GATE TOWER, 1-1-1, Koishikawa,
Bunkyo-ku, Tokyo 112-8503, Japan

Products and Services

Number of
employees

Consolidated: 13,119
Non-consolidated: 1,798 (not including employees
on loan to group companies)

Net sales

Consolidated: 884.3 billion yen
Non-consolidated: 314.4 billion yen

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

⿎IR Information
Investor Relations*Relocated to the address on May 11, 2020.

https://www.taiheiyo-cement.co.jp/english/ir/index.html

⿎CSR Information

Stock Overview (as of March 31, 2020)

CSR

https://www.taiheiyo-cement.co.jp/english/csr/index.html
Fiscal year

April 1–March 31

Annualstockholders
meeting

June

Common Stock Authorized

197,730,800

Outstanding

127,140,278(including 4,428,528 shares oftreasury stock)

Number ofstockholders

52,477

Registrar ofshareholders

Ceraclean
DENITE
Healthy bed

SILICANITE
TQPS
恋水 こいみず

Sumitomo Mitsui Trust Bank, Ltd.

Independent Assurance Report

Major Shareholders (as of March 31, 2020)
Stockholder

Shares Owned(in thousands)

Holding(%)*

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

10,9498.9Japan Trustee Services Bank, Ltd.
(Trust Account)

8,460

6.8

Japan Trustee Services Bank, Ltd.
(Trust Account 9)

3,880

3.1

State Street Bank And Trust Company 505001

2,672

2.1

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

2,572

2.0

Mizuho Bank, Ltd.

2,234

1.8

JP Morgan Chase Bank 385151

2,105

1.7

Government of Norway

1,910

1.5

BNY GCM Client Account JPRD AC ISG (Fe-Ac)

1,807

1.4

State Street Bank West Client-Treaty 505234

1,755

1.4

*Percentage of the number of shares held to the total number of outstanding shares(excluding treasury stock)104

List of Trademark Registered Products of
Taiheiyo Cement Corporation Appearing inthis Report

TAIHEIYO CEMENT REPORT 2020

A limited assurance on the information regarding “Results of
FY2020 CSR Efforts” on page 58-59 in this report is provided byan independent third party.

Third-party Opinion
GRI102-44

Takeshi Mizuguchi

Professor, Faculty of Economics,
Takasaki City University of
Economics

COVID-19 highlighted the significance of social issues in
ESG. The direct challenges companies must address arefocused on countermeasures for preventing employees
from contracting the disease and protecting theiroperations from the deteriorating economic conditions.
Given the continued focus on creating a healthy and safe
workplace as a CSR activity, while I trust you have taken
sufficient measures to address those challenges, I believe
it would have been good to cover them in the report.
Also, the fact that there are some who could not afford
to take action against the infectious disease shines lighton the problem of economic inequality. Your company
fully understands the concept of an “inclusive economy,”
as is shown in regard to your supply chain as partners.
I encourage further development of this philosophy
and communication of your commitment as a global
enterprise to address economic inequality as a materialsocial issue.
The concept of a “green recovery” has been
advocated across the world to link efforts to recoverfrom COVD-19 by establishing this type of economy.
Specifically, the European Commission has started
to implement aspects of the Green Deal Program it
announced in December 2019, which will accelerate theshift toward a green economy.
Your company has been proactive in this regard, suchas by formulating the Long-term Vision of Greenhouse
Gas Emissions Reduction toward 2050 and announcing
support for the recommendations of the TCFD last year.
Another major step forward was making public the results
Response toThird-party Opinionof the scenario analysis based on the recommendations of
the TCFD. I highly value the ambitious vision of targetingan 80% reduction in CO2 emissions in cement production
by 2050. Responding as a third party, however, I wondered
why the base year is 2000, or 20 years ago. That said, whatcounts is the level of a reduction rather than the base year. I
recommend obtaining an objective evaluation at the global
level through, for instance, Science Based Targets (SBT).
The Special Feature section reported on efforts inbiomass and waste heat power generation. That report
made me realize your strong commitment to addressing
the issue of climate change. The use of palm kernel
shell (PKS) is somewhat controversial. While PKS is aneffective use of waste generated by squeezing palm foroil production, you do not face the conflict of generating
power from burning palm oil, which is also used as food.
Moreover, importing PKS from Indonesia and Malaysia
raises the other issues of whether the renewable fuel canbe used in those countries and of CO2 emissions during
its transport to Japan. I recommend discussing this withan environmental NGO that has broad knowledge in thefield. The use of domestically produced biomass should
also be explored.
The concept of a circular economy will also play acentral role in the green economy as well as zero carbon.
“Recycling waste and by-products into alternative raw
materials and fuels for cement” such as the Ecocement
system, is a commendable initiative that contributes toboth zero carbon and a circular economy. However, duly
pointed out in the scenario analysis based on the TCFD,
the volume of coal ash produced at coal-fired power plants
will decline in the future, and so I expect you will consider
alternative measures. The Materials Recovery Complex
initiative, presented in the Environmental Business section,is attractive for creating a circular economy. I look forward
to its early commercialization.
The explanation of the assessment of biodiversity at
the limestone quarries is very clear and easy to understand.
In order to improve the reliability of this assessment,
I suggest having it evaluated by an international
environmental NGO that specializes in the field.

Hideaki Asakura

Managing Executive Officer, Vice-Chairperson of the CSR Management Committee

I am grateful to Mr. Mizuguchi for his valuable commentson the Taiheiyo Cement Report 2020. We are honored byyour strong recognition of the formulation of our Long-term
Vision of Greenhouse Gas Emissions Reduction toward 2050
and published results of the scenario analysis based on therecommendations of the TCFD as an effort to contribute to theshift toward a green economy. Given the growing importanceof a circular economy, we are encouraged that you highly value
the vital role the cement industry plays in recycling waste andby-products into alternative raw materials and fuels for cement,
and we look forward to the early realization of our originalMaterials Recovery Complex initiative. On the other hand,

you point out that we have our CO2
emissions reduction target evaluatedat a global level and explore the useof domestically produced biomass.
You also suggest that we disclose
our efforts to address social issues aspart of ESG in connection with the
spread of COVID-19, and we will sincerely respond to theserecommendations.
As for this report, we will continue improving the content
so that it can be more easily read and understood by all of our
stakeholders.

TAIHEIYO CEMENT REPORT 2020105

We commissioned Abeam toprint Japanese questionnaires
and insert them into the report.
Abeam (Tokyo) is a support type B
establishment for employment
continuation with the aim of social
self-reliance of persons with mental
illness.

20120001SuT