TAIHEIYO CEMENTREPORT2021
Integrated Report

CONTENTS
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.

Creating Value …………………………………………………

2

 Message from Top Management � 2  History of the Taiheiyo Cement Group � 8
 Taiheiyo Cement Group Business Network � 10
 Value of Cement � 12  Initiatives Aimed at Achieving Carbon Neutrality � 14
 Value Creation Process � 18  Identiﬁcation of Risks and Opportunities… 20
 23 Medium-Term Management Plan � 22

Business Strategies ……………………

Business Principles

 Key Business Strategy Themes � 26
 Cement Business (Japan) � 28
 Cement Business (Overseas) … 30
 Mineral Resources Business … 32
 Environmental Business � 34
 Construction Materials Business � 36
 Research and Development … 38

Governing the Way the Company Conducts BusinessWe are committed to maximizing our corporate value by generating synergies among Taiheiyo Cement
Group companies.
We aim to manage the environmental impact of our operations while supporting the development of arecycling-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 atransparent manner.
We are committed to the ongoing development and application of innovative technologies in order toprovide products and services that benefit our customers and society.
We are committed to maintaining an international outlook and conducting our business in accordancewith 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.

The Foundations of
Our Growth ………………

G

40

The Environment ………

Our Directors and Corporate Auditors � 40
Messages from Outside Directors � 44
CSR Management � 46
Key CSR Issues (Materiality) � 48
Corporate Governance � 50
Risk Management andCompliance � 54

 Respect for Human Rights andDiversity … 60

E66

Environmental Management � 68
Mitigating Climate Change � 70
Recycling Waste andOther Materials � 72
Conserving Biodiversity � 74

Quality Assurance � 84

82

Supply Chain Management � 86
Creating a Healthy and
Safe Workplace � 88
Stakeholder Engagement � 91

Reducing Environmental
Impact � 76

GCCA Key Performance
Indicators � 94

Appropriate Use of Water
Resources � 78

Independent Assurance Report on
GCCA Key Performance
Indicators � 95

Environmental Accounting � 79

 Human Resource Development
and Creating an Energetic
Workplace … 62

S

Collaboratingwith Society ………

26

Material Balance of the
Cement Production
Process � 80

Financial Data ………………………
 Financial and Non-ﬁnancial Highlights … 9696

 Primary Consolidated Financial Data (11-Year) … 98

Corporate Informationand Stock Overview …
 Corporate Information � 102

102

 Stock Overview … 103

 Consolidated Balance Sheets � 100
Under the Mission of the Taiheiyo Cement Group, which was established in June 2002, the company pledges to focus its management on the triple
bottom line of the economy, the environment and society, to realize sustainable development, a shared principle of the GCCA and WBCSD of which
we are a member.
In December 2002 we formulated the Business Principles of Taiheiyo Cement, which comprise nine principles for realizing the Mission of the Taiheiyo
Cement Group, and are striving to implement them.

Editorial Policy

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

Guidelines Used for Reference• The International Integrated Reporting
Framework (IIRC)• Guidance for Integrated Corporate
Disclosure 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)• ISO30414

Publication Dates
November 2021 (Previous report : December
2020, next report : October 2022)
Reporting in Accordance with the GRI
Standards
The index for the GRI Content core option isavailable on our website.

Clarifying Efforts to Achieve SDGs
We have analyzed our business risks andopportunities, clarified their relevance to the
Sustainable Development Goals (SDGs) anddisplayed icons representing the relevant
SDGs on each page of our activities. We willseek to contribute to the achievement of theSDGs through the group’s business activities.

 Consolidated Statements of Income and Consolidated
Statements of Comprehensive Income � 101● Consolidated Statements of Cash Flows � 101

Scope and Boundaries of this Report
Reporting Period
FY2021(April 1, 2020 to March 31, 2021)
It is clearly stated where information about events
that occurred outside this period are included in
the report.

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


Boundary of Reporting Organizations by
Quantitative Data
Quantitative data are aggregated on aconsolidated basis and under the following three
categories. An icon representing the relevant
aggregation scope is displayed with data forcategories 1 and 2.
Category 1 Non-consolidated Taiheiyo Cement
Corporation (non-consolidated)
Category 2 GCCA Data collected for reporting of
GCCA* KPIs. Organizations covered are listed on
pages 10-11
Category 3 (Others)• The Material Balance of Business Activities is listed
on pages 80-81 and the Volume of Waste to Landfill
is listed on pages 77 and 81• Number of Fatalities (page 97) and the Number ofAccidents Registered in the Work-related Accident
Database / Number of Work-related Accidents that
Occurred / Breakdown of Accidents by Type (page89): Employees of the company, group companies(including overseas) and our contractors* GCCA: Global Cement and Concrete Association

Disclaimer Regarding Forwardlooking Statements

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

Creating Value

Message from Top Management

Aiming to continue our growth andbecome an outstanding
leading company
Our mission is not merely to achieve financial
growth, but to also develop business activities that areenvironmentally sound and make a positive contribution
to society. Adhering to that mission, we aim to becomea leading company in the Pacific Rim based around ourcement business in Japan and our mineral resources,
environmental and construction materials businesses.
In addition to expanding our businesses globally, we
have contributed to the preservation of the global
environment and the creation of a recycling-basedsociety via the special characteristics of our cement
plants that make it possible to process and recycle large
amounts of waste and by-products, and by maximizing
the recycling technologies we have cultivated over theyears.
We are currently moving forward with various
strategies in the three steps of the 17 Medium-Term
Management Plan, 20 Medium-Term Management
Plan and 23 Medium-Term Management Plan in orderto achieve our stated future vision and direction of
becoming an enterprise group capable of providing a
sense of safety and security to communities in the Pacific
Rim by the mid-2020s. As a result of the initiatives in thefirst two aforementioned medium-term management
plans to boost corporate value and establish a solid
business foundation, I believe we were able to build an
earnings foundation capable of maintaining operating
income of 60 billion yen despite the unprecedented
business environment created by the COVID-19
pandemic, which even delayed the holding of the Tokyo
Olympics and Paralympics.
The 23 Medium-Term Management Plan is the final

step towards achieving rapid progress, and I also see
this as a period in which not just Taiheiyo Cement but theJapanese cement industry as a whole will be required
to display business boldness and a determination tosurvive and commit to effective initiatives aimed atsustainable growth. In that business environment, theTaiheiyo Cement Group will contribute to the creation ofa sustainable society, and lay solid groundwork for our
next growth stage.

Results of Our Performance in FY 2021
In addition to achieving operating income of morethan 60 billion yen for eight terms in a row, despite
the COVID-19 pandemic, the achievement of our 20
Medium-Term Management Plan goals regarding
growth investment, the further strengthening of our
financial structure, and shareholder returns

In FY2021, factors such as the increase in COVID-19
infections around the world and the declaration of a stateof emergency in Japan had a direct impact on sales of
cement, concrete and building materials due to reduced
demand for construction and project delays. As a result,
FY2021 saw the lowest domestic demand for cementin 54 years. In addition, economic activities in generalslowed down and there was also extensive stagnationin corporate activities, including in industries whichhave close links with our Mineral Resources Businessand Environmental Business, such as the steel, paper
and power industries. Overseas, some of the regions inwhich we operate were subject to lockdowns due to theimpact of the COVID-19 pandemic. In the U.S., however,

Masafumi Fushihara

President and Representative Director

23Creating Value

Message from Top Management

demand for housing increased due to factors such as
lower interest rates on housing loans and the increasein telecommuting. As a result, cement and ready-mixed
concrete performed well in terms of sales volume andprice. Under these business circumstances the group’s
net sales for FY 2021 declined from the previous fiscal
year to 863.9 billion yen. However, operating income for
FY 2021 increased to 63.6 billion yen.
Furthermore, in FY2021 which was the final year of
the 20 Medium-Term Management Plan, we worked
on establishing a solid business foundation while
maintaining a balance with investing for continued
business growth, strengthening our financial structureand enhancing shareholder returns.
Even though there were only limited opportunities
to visit and negotiate, we were able to decide on
appropriately timed investments for growth, including

a capital and business alliance with a state-run groupof cement companies in Indonesia and renovationof production lines at our cement plant in Cebu,
Philippines.
We had set a net debt/equity ratio (DER) of 0.5 times
or less as a guideline for the strengthening of our financial
structure, but were able to surpass it by the end of
FY2020, one year earlier than planned. The net DER at theend of FY2021 had improved to less than 0.4 times.
With regard to shareholder returns, we continued
steady dividend payments of 60 yen per share during
the three years of the plan (in FY2019 an additionalcommemorative dividend meant that the dividend
payment per share was 80 yen.) In addition, wepurchased 15 billion yen of treasury shares to achieve a
total return ratio of around 30% for the period of the 20
Medium-Term Management Plan.
Unfortunately, given the aforementioned businessenvironment, we were unable to achieve theoperating income on net sales and ROA we had set as
management targets. In particular, issues still remain
with regard to reinforcing the earnings foundationof our domestic business. We identify this as a key
management challenge that the Taiheiyo Cement Groupwill continue to tackle under the 23 Medium-Term
Management Plan.

Outline of the Medium-Term
Management Plan
Establish a business foundation with long-term
stability, and aim to become an outstanding leading
companyWith regard to the business circumstances
surrounding the Taiheiyo Cement Group, there arefears the downturn in demand for cement may continue
for a certain period given the considerable impact of
the growing momentum for CO2 reductions, and also
depending on when the COVID-19 pandemic comes toan end. In addition to the issue of the aging workforce4

on construction sites, the labor shortage is intensifying
in the construction and logistics industries since thelengthy impact of the COVID-19 pandemic means thatoverseas workers cannot re-enter the country. If there
are further delays to projects there is the possibility thatthe recovery of demand for cement will also be delayed.
On the other hand, given that climate change isbecoming increasingly obvious in recent years, andit seems that every year major disasters occur, thegovernment has announced a policy of building
national resilience by actively promoting measures toprevent or mitigate damage from natural disasters. In
Japan we anticipate that the current steady demand for
cement will continue for a while due to factors such asredevelopment projects in urban areas, and the fact that
construction work related to the Linear Chuo Shinkansen(maglev) is expected to start in earnest. Given thatbusiness environment we expect demand to fluctuate byaround 40 million tons over the next decade or so.
Bearing in mind that anticipated demand, the Taiheiyo
Cement Group has formulated the 23 Medium-Term
Management Plan covering the three-year period
from FY2022 to FY2024 based on our philosophy ofcontributing to the creation of safe and stable social
infrastructure by continuing to provide essential
products and technical services for the developmentof social infrastructure and for projects to prevent or
mitigate damage from natural disasters, and maximizing
our corporate value. Under the 23 Medium-Term
Management Plan we will aim to construct a businessmodel unique to us, where all businesses in our groupfunction together comprehensively and integrally, withthe aim of becoming an outstanding leading company.
Our business targets for FY2024, the final year of theplan, are an operating income on net sales of 11% or
more, and an ROE of 10% or more. We have adopted
the following indicators as guidelines for achieving thosetargets.
 Net sales
750 billion yen or more
 Operating income85 billion yen or more

 EBITDA
145 billion yen or more
 Net debt/equity ratio (DER)
Around 0.4 times
 Net interest-bearing debt/EBITDA
1.5 or lessWe plan to generate a cash flow of 330 billion yen
over the three-year period of the 23 Medium-Term
Management Plan by means of our cash flow, capitalgains and so on, and, in principle, carry out newinvestment aimed at sustainable growth and implement
shareholder returns while maintaining a net DER ratio ofaround 0.4 times.

Aiming to achieve carbon neutrality via sustainablegrowth investments

We plan to implement 280 billion yen of capital
expenditure and investment and financing over three
years, of which 120 billion yen will be allocated to growthinvestments. In addition, with the aim of strengthening
the business foundation that supports our sustainablegrowth, we plan to prioritize the following themes:maintaining growth investment; implementing initiatives
aimed at achieving carbon neutrality; enhancing
our plants, mines and quarries; and restructuring
our businesses in Japan. Amongst these themes, werecognize that the achievement of carbon neutrality
plays a central role in our growth strategies, since
establishing technologies for net zero CO2 emissions
is one of the most important challenges for the futureof the cement industry, where CO2 emissions from raw
materials are unavoidable.
We published the Framework for Our Long-term
Vision of Greenhouse Gas Emissions Reduction toward2050 in March 2020. The goals stated in it were,in addition to an 80% reduction in CO2 emissions
in cement production, to contribute to reductions
equivalent to 20% of CO2 emissions throughout thecement value chain by 2050. However, in response to
the carbon neutrality policy announced by the Japanese
government in October 2020, we have revised thewording of that goal to “we aim to achieve carbon
neutrality throughout the supply chain by 2050.”

5Creating Value

Message from Top Management

In order to achieve carbon neutrality, in addition
to applying and developing existing technologies, it
is essential that we develop innovative technologies
and raise them to a level where they are practical andviable. We have set up the Carbon-Neutral Technology
Development Project Team as a lateral in-houseorganization responsible for promoting the developmentof such innovative technologies. With the project teamplaying a core role, we will aim to establish at an earlystage technologies that can feasibly be implemented bysociety, and to achieve carbon neutrality by 2050.

Aiming for sustainable growth by strengthening
corporate governance, promoting diversity andcreating a safety oriented culture

In addition to boosting our earnings capacity, weneed to strengthen corporate governance, promote
workplace diversity and create a safety oriented culture
in order that the Taiheiyo Cement Group can achievesustainable growth.
Recognizing that strengthening corporate
governance is essential to boost our corporate value
and fulfill our responsibilities to all our stakeholders, asa trusted company we will work even harder to maintainsound management.
Based on our awareness that respect for human rights
and diversity are formative principles of a sustainable
society, we will engage in various initiatives, such as
promoting women’s participation and advancementin the workplace, and adopting measures designed
to attract diversity in our recruitment and offer a goodwork-life balance. We are striving to create employeefriendly workplaces where each employee can achieve
professional growth. For example, we have set a ratioof at least 30% female recruits for jobs that have nogeographical restrictions as our target in promoting
women’s participation and advancement in theworkplace. Furthermore, in addition to aiming to createa suitable human resource portfolio with at least a 10%
ratio of female employees, we are promoting an initiative

6

aiming to increase the ratio of newly appointed female
managers to at least 10%. Moreover, we engage inbusiness activities based upon respect for human rights,
and this includes our supply chains.
We consider the health and safety of our employees
to be the foundation on which our company exists.
We aim to eliminate work-related accidents and create
comfortable workplace environments, and constantly
engage in systematic health and safety activities. To be
more specific, the Taiheiyo Cement Health and Safety
Policy sets a target of zero work-related accidents, wehave established our Companywide Health & Safety
Committee chaired by the officer in charge of safety, andwe are strengthening action at all our business sites andgroup companies that start with ensuring compliancewith our safety rules. We are improving our OSHMS*,
which was launched in 2002 and has been being rolled
out to our cement plants, mines and quarries in Japan
since 2003. Going forward, we will continue with our aimof creating a safety oriented culture.

total production volume of cement over the next 100
years. Going forward, we will continue with initiatives
to enhance our plant facilities, mines and quarries, andwill establish a system capable of ensuring a long-term
stable supply of cement.
With regard to our overseas cement business, wewill expand our business portfolio via steps such as ourcapital and business partnership with a state-run groupof cement companies in Indonesia and renovationof production lines at our cement plant in Cebu,
Philippines, strengthen our global logistics network, andstrive to boost our market presence. At our business sites
in each region we will deploy the advanced technologies
we have nurtured in our Environmental and Mineral

Resources businesses in Japan, and will aim to contributeto the development of local communities and to further
boost our corporate value.
In addition to contributing to environmental
conservation, resource recycling and measures against
climate change via our business activities, we will strive
to resolve transnational social issues by helping to createa sustainable society. This includes contributing to theprotection of human rights and conservation of water
resources and biodiversity, which are among the globallyshared goals of the SDGs. We appreciate your kindunderstanding of our activities, and your expectations for
our future growth.

* OSHMS:
Occupational Safety and Health Management System: A framework forreducing potential dangers at workplaces and promoting comfortable worksites by autonomously practicing continuous, uninterrupted health andsafety management. Prescribed in the guidelines of the Ministry of Health,Labour and Welfare.

A Message to Our Stakeholders
The future envisioned by Taiheiyo Cement

Our business is based on cement. We have continued
to grow while emphasizing the cement business andpursuing the potential of cement and concrete. We
also contribute to the resolution of various social issues
by providing environmentally sound products andworking to create a recycling-based society. Securing astable long-term source of limestone the raw material of
cement, could be said to be a matter of life or death for
Taiheiyo Cement, as we continue to achieve sustainablegrowth and contribute to society. We have alreadysecured reserves in Japan of limestone equivalent to the7Creating Value

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

Nascent Period of Cement Production in Japan

Launch of Taiheiyo Cement

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

Taiheiyo Cement Corporation was
founded in 1998 via the merger of Chichibu
Onoda Cement Corporation and Nihon
Cement Co., Ltd. The company has supplied
cement for various national construction
projects in Japan. In 2000 we completed
the construction of the Nghi Son Cement
Corporation plant in Vietnam, and then in2003 made Taiheiyo Cement Philippines,
Inc. a wholly owned subsidiary, further
expanding the group’s global network.

Cement production works in Fukagawa, Tokyo

1881

2000

May

2001

July Started operating amunicipal waste incineration
ash washing system (AshWashing System) at the
Kumagaya plant.
January

2002

2002

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

Chichibu
CementCo., Ltd.

History of Our Products
and Equipment

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

Started operating a facility
to recycle wood as abiomass resource at the
Oita Plant.

Nihon
CementCo., Ltd.
1947

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

Taiheiyo Cement’s
Strengths
2007

August Commenced selling DENITE,
a heavy metal immobilizer.

2007

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

2010

November

2014

2000
1998

2001
October

2002

2003

Taiheiyo Cement founded.

2004

2005
2002
2003

History of Business Activities
and Corporate Events
1999
2000

2000
2001

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

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

NovemberCompleted constructionof Nghi Son Cement
Corporation (Vietnam).

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

2006

2011

March Suspended operations at
the Ofunato Plant due todamage from the Great East
Japan Earthquake.

2012

June Resumed full operations at
the Ofunato Plant.

The Global Financial
Crisis of 2008

2007

2008

June Formulated the Mission of
the Taiheiyo Cement Group.

2009
2010

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

2003

April Launched a business to2005

April Launched an electric power

2018

May Water purification material
Ceraclean obtained ETVmark certification from the
Ministry of the Environment.

2019

May Developed AI technology
for predicting concrete
slump.

2006

January Formulated the Environmental

The Great East
Japan Earthquake

2010

2011

2012

April Second production line ofNghi Son Cement Corporation
came into operation.

recycle construction soil asa raw material for cement.
supply wholesale businessat the Tosa Power Station.
Management Policy of the
Taiheiyo Cement Group.

2008

October Marked the 10th anniversary

2009

April Registered company-wide ISO

2010

March Announced business

July Their Majesties the Emperorand Empress of Japan(in those days) visited theOfunato Plant.

of the company.

2019

DecemberStarted operating
a municipal waste
incineration bottom ash
washing system at the
Kumagaya Plant.

2020

January

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

2013

2014
2015

2015

2016

2017

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

May Jointly established the Global

Cement and Concrete Association(GCCA) with the world’s leading
cement companies.

1

Stable supply of
cement and mineral
resource products

Adoption of theParis Agreement

2018
2013

August Harumi Onoda RemiconCo., Ltd. completed
construction of anenvironmentally sound(indoor) plant.

Launched a phosphor
material, ChiccaLight, for LEDs.

July Developed Silica Fume
Premix Cement for ultrahigh-strength cement.

The Kyoto Protocol
comes into force

Since 1998

8

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

Taiheiyo Cement

1999

1883

December

2006

1923

Asano
CementCo., Ltd.

November

Expanded the scale of thecoal ash treatment businessfollowing completion of the
Kanto Ash Center.
2002

1994

In 2006 we formulated the Taiheiyo
Cement Environmental Management Policy,
which identified an active commitment toenvironmental issues as a key management
challenge. Then in 2007 we launched the
Taiheiyo Brand Cement and Concrete
Project and began taking action to boost
the value of the group’s technologicalstrengths and solutions.

Making Progress by Fully
Deploying Our Capabilities

Japan’s first rotary kiln (DB kiln)

Onoda
CementCo., Ltd.

Chichibu
Onoda Cement
Corporation

A Period of Economic
Downturn, Earthquakes andAdversity

Commitment toEnvironmental Issues

COVID-19 spreads
2018

2019

2020

2021

2018

October Marked the 20th anniversary

2019

June Supported the Recommendations

2019

July Formulated and announced

2020

March Announced the Framework

2020

April Concluded the basicof the company.

of the Task Force on Climaterelated Financial Disclosures(TCFD).

the main points of the
Framework for Our Longrange Vision of Greenhouse
Gas Emissions Reduction
toward 2050.

for Our Long-range Vision ofGreenhouse Gas Emissions
Reduction toward 2050.
agreement regarding thecapital alliance with theSemen Indonesia (SI) Group.

2

World-classenvironmental
cement production
technologies

3

Domestic andglobal networks

14001 integrated certification
at six directly operated plants.
restructuring for the group.

2015

May Formulated the CSR

Objectives for 2025.

9Creating Value

Taiheiyo Cement Group Business Network

Taiheiyo Cement Group Profile
Net sales

 GRI102-4, 6, 7, 8, 45

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

1

Holding company
Cement plant*
Clinker grinding plant*
Representative ofﬁce
Distribution terminal

TAIHEIYO CEMENT (CHINA)INVESTMENT

A new site came into operation in the spring of 2021 at
Ofunato Quarry in Iwate Prefecture. Our Oita Plant has madeplans to develop new quarries in Tsukumi City and Usuki
City. The planned sites, covering a total of 206 hectares, areexpected to secure a hundred years’ worth of limestone.
Development work will begin in FY2022, and the plan is thatthey will start to be used in tandem with our existing quarries
in FY2030. This development work is included in our planned
investment of 100 billion yen. In Southeast Asia, we aremoving forward with business expansion and the creation of
the optimum logistics network, and are striving to provide
a stable supply of cement and mineral resource products
by reconstructing our logistics network covering the entire
Pacific Rim area to include our new bases in Indonesia.

NanjingHong Kong

TAIHEIYO CEMENT U.S.A.
San Diego

TaipeiTaichung
Kaohsiung

Hanoi

We possess world-class environmental technologies
in cement production, and are working on CCS/CCU
technology used to separate and capture CO2 in order tomeet our goal of achieving carbon neutrality. Following
the construction of a test facility at the Fujiwara Plant in
Mie Prefecture, we are planning a demonstration plantwith the support of NEDO (New Energy and Industrial
Technology Development Organization). We also take steps
such as dispatching engineers and researchers to research
institutions around the world with the aim of securing thelatest knowledge and, as a leading company in the cement
industry, we are taking the initiative in measures to mitigate
climate change.

Ho Chi Minh

Nha Trang

3

Domestic and global
networks

The Taiheiyo Cement Group continues to support
infrastructure development by supplying high quality
cement and construction materials and applying advanced
technologies at our nine cement plants in Japan and eightin the Pacific Rim region, including in the U.S., China andSoutheast Asia. Going forward, we aim to enhance our
networks by building a new business portfolio in the Asian
region and expanding our trading business in the global
market.

10

Lae

Other
Net sales (FY2021 Consolidated)billion yen

Number of employees (consolidated, as of March 31, 2021)

1,467
Female242
Male

Headquarters/Branches
Hokkaido Branch
Tohoku Branch
Headquarters/Tokyo Branch
Kanto Branch
Chubu Hokuriku Branch
Kansai Shikoku Branch
Chugoku Branch
Kyushu Branch

6,920

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

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

Nghi Son Cement Corporation(Nghi Son, Vietnam)

Taiheiyo Cement Philippines, Inc(Cebu, Philippines)

2,458
Female
265
Male

4,710

thousand tonnes

Japan
Japan

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

Net sales (FY2021 Consolidated)

73.0%

630.8

billion yen

Number of employees (consolidated, as of March 31, 2021)

64.8%

8,154

7,066
Female 1,088
Male

Clinker production capacity

60.3%

thousand tonnes

Dalian Onoda Cement Co., Ltd.
(Dalian, China)

2,723

Research Center
Central Research Laboratory

Clinker production capacity

23.6%

21.6%

Cebu

Other areas

1,709

billion yen

Number of employees (consolidated, as of March 31, 2021)

16.1%

Jakarta

13.6%

150.3

Clinker production capacity

TAIHEIYO SINGAPORE

82.6

RillitoNghi Son

Bangkok

9.6%

17.4%

Las Vegas
Oro Grande

Los Angeles

Shanghai

Net sales (FY2021 Consolidated)

MojaveStockton

Calportland Company,
Rillito Plant(Rillito, USA)

America

PortlandTAIHEIYO CEMENT HEADQUARTERS

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

AmericaSeattle*Business locations where data for
GCCA KPIs are collected (FY2021)

DalianSingapore

2

Anchorage
Calportland Company,
Mojave Plant(Mojave, USA)

Stable supply of cement andmineral resource products

World-class environmental
cement production
technologies

Consolidated:
863.9 billion yen
Non-consolidated: 295.2 billion yen
Number of employees	Consolidated: 12,586 Non-consolidated:
1,838 (excluding employees on loan to groupcompanies)
Subsidiaries	182 (including 114 consolidated subsidiaries and6 equity-method subsidiaries)
Affiliates
102 (including 37 equity-method affiliates)

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

17,667

Taiheiyo Cement Corporation Kamiiso Plant

Taiheiyo Cement Corporation Ofunato Plant

Taiheiyo Cement Corporation Kumagaya Plant

Taiheiyo Cement Corporation Saitama Plant

Taiheiyo Cement Corporation Oita Plant

DC Co., Ltd.

Myojo Cement Co., Ltd.

Tsuruga Cement Co., Ltd.

thousand tonnes

Taiheiyo Cement Corporation Fujiwara Plant

11

Creating Value

Value of Cement
The relationship between Taiheiyo Cement and society

Cement protects
Disasteragainst landslides prevention

Cement contributes todevelopments in sports
and culture

Daily life

Cement makes travel
Daily life and transportation moreconvenient
Cement protects against
Disaster both torrential rain andprevention water shortages
Cement supports
Disaster rebuilding and restoration
prevention
after a disaster

Cement provides safe
and secure spaces

Cement protects
against tsunamis
and high tides

Raw material procurement

Production
Zero waste in cement production
Use of waste and by-products

Daily life

Disasterprevention

Use
Transportation

Japan is 100%
self-sufficientin limestone

Contribution to
infrastructure
improvement
Waste and by-products generated by various industries
and municipalities is used effectively as a raw material
for cement (clinker) and as thermal energy

1213

Creating Value

Initiatives Aimed at Achieving Carbon Neutrality
Ratio of global CO2 emissions

CO2 emissions in Japan by industry

Cement industry: 7%

Achieving Carbon Neutrality in the Cement Supply Chain

1st: Electric power
2nd: Steel3rd: Chemical
4th: Cement

Source: Technology Roadmap Low-Carbon Transition in
the Cement Industry, IEA and WBCSD (2018)

We aim to achieve carbon neutrality
throughout our supply chain by 2050

Reference: “The Cement Industry’s Long-term Vision Toward
Realizing a Decarbonized Society” Japan Cement
Association. 2020 (in Japanese)

CSR Objectives for 2025

Quarrying raw materials

Limestone
quarryReduction of greenhouse gas emissions:
Reduce specific net CO2 emissions byat least 10%(Compared with FY2001)
As of the end of FY2021: 8.3%

Limestone
storage yard

Conveyor belts
Trucks, freight cars etc.

Taiheiyo Cement takes up the challenge of mitigating climate changeWith the Carbon-Neutral Technology Development Project Team playing a core role, we aim to establish
and implement feasible technologies at the earliest possible opportunities and meet the social andfinancial challenges toward achieving carbon neutrality.
Main initiatives in the 23 Medium Term Management
Plan

TargetMain strategies

Energy sources Energy efficiency
 Low-carbon energy Installation of waste heat recovery power
generation systems
 Installation of high-efficiency clinker coolers
 More waste plastic processing

Raw material-derived

 Low-CO2 cement

 Increase of cement admixtures
 Low-CO2 clinker

 CO2 capture and utilization Development of innovative CO2 capture
technologies Utilization of dismantled concrete and ready-mixed
concrete sludge
 Utilization of cement cured with CO2

Innovativetechnologies

Investment sum

20 billion yen

Reduction ratio for CO2 emissions (%)
100

Energy-related

80

CO2 emissions from the cement production process
Raw materials
preparation process

Burning process

Finishing process

Transportation

Raw materials-related

60

Innovative technologies

40

Compared with FY2001
10% reduction

20
0

2001

2021

Supply chain initiatives and challenges
 Switch to EV heavy machinery Plant trees at mines and quarries

Limestone and otherraw materials suchas clay are mixed
together, dried andground.

The mixed andground raw materials
are burned at
1,450℃ to produce
clinker.

A suitable amount of
gypsum, etc. is added
to the clinker which isthen ground.

The cement produced at the plants istransported by vessel or truck to service
stations (logistics sites) throughout
Japan.
It is then delivered to the user by truck.

Limestone mining anddistribution
Raw materials and fuelprocurement
Waste matter andby-product procurement14 Contribute to the creation of
circular economies

FY2051
Achieve carbon neutrality2026 Tankers and trucks made moreenergy-efficient, switch to EVs

Cement manufacturing

Logistics

 Innovative CO2 capture Energy efficiency/low-carbon energy
 Low-CO2 cement

 CO2 utilization

ConcretemanufacturingCore
initiatives

 Utilization of dismantled concrete
and ready-mixed concrete sludge
Reuse

2051
(FY)

 CO2 absorbed by
concrete
Concrete supply anddeconstruction

Aggregate manufacturing
and distribution
 Switch to HV and EV trucks

15

Creating Value

Initiatives Aimed at Achieving Carbon Neutrality

Vice President and Representative Director
Carbon-Neutral Technology
Development Project TeamMarshalling All Our Wisdom
and Aiming to Achieve Carbon
Neutrality

In response to the policy announced by the Japanese
government, the Taiheiyo Cement Group’s long-term
vision for reducing CO2 emissions has been revised to“aim to achieve carbon neutrality throughout our supply
chain by 2050.” In our long-term vision, we plan to utilize
the following three scenarios to achieve reductions in
CO2 emissions: apply existing technologies, advanceexisting technologies, and develop innovativetechnologies. The Carbon-Neutral Technology
Development Project Team was set up in April this yearwith the aim of intensifying and accelerating initiatives.
It is a lateral in-house organization that marshals all thewisdom of our company. Around 30 members, including
people holding additional posts, are currently working
mainly on the development of innovative technologies.
The 23 Medium-Term Management Plan identifies
initiatives aimed at carbon neutrality as the Taiheiyo
Cement Group’s key strategies. We are scheduled
to invest 20 billion yen in them during the period
covered by the plan, which is part of the 100 billion
yen we will invest over a ten-year period. As of thisfiscal year, we have introduced ICP (internal carbon
pricing) to accelerate capital investment in low carbon
technologies by including the economic effects ofreduced CO2 emissions in our investment index. The
ICP value will initially be set as the current market value(1,500 yen/CO2 t) in J-Credit but will be periodically16

Development of Carbon Circulation Technology for the Cement Industry (NEDO Demonstration
Project)

In our Development of Carbon Circulation
Technology for the Cement Industry project,funded by NEDO (the New Energy andIndustrial Development Organization), weare installing a pilot plant with a capacity of
10 tonnes per day at the Kumagaya Plant toseparate and capture CO2 emitted during
the cement production process. With thecooperation of group companies located near
the plant we will demonstrate technologies
to cause the captured CO2 to react withdemolished concrete, concrete sludge andready-mixed concrete, which will then bereused as construction materials such as raw
material for cement or subbase pavement
material. The scheduled NEDO demonstration
period is until FY2022, but we plan to continue
with additional tests for a few years after thatand compile the various kinds of expertise
gained from the project.

Example 2CO2 sequestration inready-mixed concrete

CementReady-mixed concrete
plantsConcrete products
manufacturing plants

CO2

CO2 sequestration in
concrete sludge

CO2
separationand capture

Ready-mixed
concrete
Concrete products

Utilization as
construction
materials

Construction
materials

CO2
efficient utilization

Cement plants

Social infrastructure

Reuse as raw
material for
cementRaw material for
cementCO2 sequestration in
demolished concrete

Demolishedconcrete

Development of Kiln Burner to Increase the Amount of Waste Plastic Processed

We are aiming to increase the amount of combustible waste,such as plastic waste, used as an alternative source of energy
so that we can reduce the CO2 emissions generated during
cement calcination. We used a thermohydrodynamic computer
simulation to design a burner so that combustible waste
can be efficiently combusted. The kiln burner has now been
installed at the Saitama Plant and we are checking combustion,
optimizing operations and running various tests, such as on theconcrete quality obtained. We plan to make maximum use of
combustible waste to reduce CO2 emissions by adopting thiskiln burner and the expertise we have gained at other plants.

Example 3

Manufacturing carbon-cured
precast concrete products
using low-carbon cement

Calcium separated
from demolishedconcreteYuuichi Kitabayashi

reviewed.
Of the CO2 emitted during the cement production
process, roughly 60% comes from the raw materials and
40% from the energy used. We plan to halve the energyderived CO2 via steps such as installing energy-efficientequipment and increasing the volume of waste plastic
processed. We are developing technologies regarding
raw material-derived CO2, such as greater use of
admixtures and the introduction of low-carbon clinker.
However, since carbon neutrality cannot be achieved byapplying and expanding existing technologies alone, it
is imperative to develop innovative technologies suchas carbon recycling, where CO2 is separated from thecement kiln exhaust gas, captured and used efficiently.
With regard to our research and development ofinnovative technologies, after successfully capturing 20
kg per day of high purity CO2 at our Fujiwara Plant using
the amine method, since 2020 we have been working
on Development of Carbon Circulation Technology
for the Cement Industry, a Taiheiyo Cement projectthat has been adopted by NEDO (the New Energy andIndustrial Development Organization). In this project
we are installing equipment at our Kumagaya Plant
to capture 10 tonnes of CO2 per day, 500 times morethan the Fujiwara Plant prototype, and are developing
optimal CO2 separation and capture technologies. It iscurrently still under construction but a demonstration
run is expected to start soon. With regard to carbon
recycling technology, we are developing technologies
to sequester CO2 as carbonate in demolishedconcrete and concrete sludge, which are then used as
construction materials such as raw material for cement
or subbase pavement material. We are also carryingout R&D into CO2 sequestration during the productionof ready-mixed concrete and the curing of concrete
products. These CO2 sequestration technologies are
getting the expected results in lab experiments andwe will move on to demonstration tests using full-scaleequipment in the near future.
An average size cement plant emits a few thousand
tonnes of CO2 per day, but CO2 only makes up around
20% of the exhaust gas. This makes it necessary toprocess five times that amount of exhaust gas in orderto capture all the CO2, and that requires proportionately
large-scale equipment which would be difficult to installat existing plants. Accordingly, we have also started
R&D on the essential task of making that equipment
more compact and less expensive. In addition to
CO2 sequestration technologies we are looking at
technologies capable of creating low-cost synthetic
methane but, since this would be difficult for the cement
industry alone to do, we are also concentrating ontechnological development in collaboration with otherindustries that may lead to the efficient creation ofenergy sources.
The NSP kiln developed in Japan is currently thestandard type around the world. Similarly, we are aiming
to be a world leader in the carbon neutrality field as
well, and to create technologies that become the global
standard.

Example 1

Heated (non-combusted)

Combusted

Flammable waste tracking and analysis of combustion

20℃

2000℃

Analysis of temperature distribution inside the kiln

Thermo-hydrodynamics simulation of the kiln interior

Development of Cement Production Processes that Capture CO2

We are working on the development of innovative cement
production processes that enable efficient capture of raw
material-derived CO2 generated by limestone calcination,
which is recognized to be an unavoidable part of cement
manufacturing. Since most of the raw material-derived CO2 isgenerated in the calciner, making this a CO2 capturing calciner
will enable the efficient capture of high concentrations ofenergy-derived CO2 during the calcination process as wellas the raw material-derived CO2. Being able to capture highconcentrations of CO2 directly makes it possible to use morecompact equipment than that of CO2 capture technologies suchas chemical methods. This production process combines thehigh thermal efficiency of the suspension preheater with evengreater waste treatment capacity, and inherits the advantages ofexisting NSP kilns.

Energy-derived CO2

Raw material
for cement

CO2 derived from raw material and energy(Capture of high concentrations of CO2)

CO2 capturing
calciner
EnergyEnergyGas ﬂow
Fuel ﬂow

17

Creating Value

Value Creation Process

INPUT
Financial Capital Climate change
 Environmental pollution
 Occurrence of massive
earthquakes
 Technological innovation:
Evolution of digitalization(ICT) Changes in economic
conditions
 Continuity anddevelopment related to
declining birth rates andaging populations

17,667 thousand tonnes

Company-speciﬁc

11,630 thousand tonnes

 Waste treatment
 Aging facilities

A （JCR）
A-（R&I）

Boost the Group’s
Total Capabilities

Strengths

Overseas clinker production
capacity (FY2021)

Highly diverse
organizations

Intellectual Capital

Human Capital

World-classenvironmental
cementproduction
technologies

Capacity forstableprovision of
cement andmineralresource products

Globalnetwork

Reduction rate of speciﬁc net
CO₂ emissions(compared with FY2001)(FY2021)

8.3

MineralResources
Business

Environmental
Business%

Customers

Stable provision of
products and services

Construction
Materials
Business

CementBusiness

Management stability
and growth potential

Efforts to mitigate andadapt to climate change

Logi
stic
sa
nd

on
cti
du
o
r

Patents held (as of the end of FY2021)

thousand tonnes

Cement production overseas(FY2021)13,017thousand tonnes

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

Events:142

Natural Resources Capital
Limestone quarries of the group(as of the end of FY2021)

17

Utilization of waste and by-products(FY2021)402.7 kg/t-cement

Stableﬁnancial
footingsea

Re u s erch andD ev elopnmeCreation anddevelopment ofa recycling-basedsocietyt

Fundamental Policies ofthe 23 Medium Term Management Plan

Become a corporate groupthat never stops moving forward.
As part of the social infrastructure industry,
contribute to the establishment of a safe and stable society.
Strengthen our earnings foundation andsteadily carry out growth investment.

Socioeconomic beneﬁts
from environmental impact
reduction due to the input of
waste and by-products(FY2021)89.2
billion yen

Contribute to
the building of safe andsecure social
infrastructure
Contribute to
the achievement ofcarbon neutrality

19,334tRe

Stable supply of products
Supply highvalue-added products

Cement production in Japan(FY2021)en

Number of employees(as of the end of FY2021)

Social and
Relationship Capital
Opportunities

Shareholders

Domestic clinker production
capacity (FY2021)

1,273 in Japan
238 overseas

Contribute tosocial sustainability

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

Manufacturing Capital

12,586

 Contributing to a recyclingbased society Strengthening urban
resilience, preventing
disasters Provision of environmentallysound products Reconstruction in disaster
stricken areas
 Development ofcarbon-neutral
technologies

an outstanding
leading company

Credit rating (as of August 2021)

remocu
Raw material pr Maintenance andimprovement of
the governance system
 Respect for human rights
 Occupational healthand safety
 Accident prevention
 Waste treatment
 Participating in andrespecting local
communities

Aiming to become

ly
pp
su

Compliance

Respond to
Stakeholder
Expectations onMaterial Aspects

Use

ChangeOUTCOME

Business Activities

CapitalP

Material Aspects

OUTPUT

Employees
Promote work-lifebalance management
Employee satisfaction

Contribute to
the creation ofa recycling-basedsocietySociety
Build social capital andimprove infrastructure
Efforts to mitigate andadapt to climate change

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

Corporate Governance and Compliance18

19Creating Value

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

We collect, evaluate and identify company-wide risks, including those of group companies, every three years
and conduct an annual review of those risks. We carried out a company-wide risk review in FY2020. The purposeof identifying risks is to identify the impact of anticipated 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 reducethat uncertainty.

Step 1

Step 2

Step 3

Step 4

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

Evaluate the impactof the identified
changes on thegroup.

Review the results ofthe evaluation of the
impact.

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

Determine companywide material risks(CSR Management
Committee)

Risk category

Item

Business opportunities

Business strategies
based on results of thecompany-wide risk
review

Connection with our strengths
Stable supplyof cement andmineral resource
products• Increasing demand forenvironmentally soundproducts (with low CO2
emissions)• Acceleration of initiatives tostrengthen urban areas andprotect them from natural
disasters• Reconstruction in disaster
stricken areas

Contributing to theachievement of carbon
neutrality

Social aspects• Technological innovation: Evolution of digitalization• Changes in economic conditions• Continuity and development related to declining birth rates and aging
populations: Declining labor forces• Provision of technologies andtechnical guidance to emerging
economies

Contributing to theenhancement of national
resilience●

Company-specific• Waste treatment• Aging facilities• Shift to a recycling-basedsociety(Wide variety of recycled raw
materials and fuels)

Contributing to arrecycling-based society●

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)• Prevention of misconduct (including in relation to products and services)• Response to impacts of external accidents• Participating in and respecting local communities

Environmental aspects

Change• Climate change: Increasingly extreme weather events and dramatic increase in
weather related disasters• Climate change: Stricter regulations• Increase of environmental pollution and developments related to its impact:
Regulations• Geological and biological events: E.g. occurrence of massive earthquakes•C hange risks: Arising from changes in the social environment•C ompany-specific risks: Arising from the characteristics of our business and capital, including all types ofcapital such as mining rights and human resources•C ompliance risks: Related to organizational infrastructure

20

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

Environmental
technologies
in cement
production

Domestic
and global
networks

●

●

●

●

●

Refer to The Foundations of Our Growth (pages 40-65) and Collaborating with Society (pages 82-95)

We referred to the following risk information:• Global Risk Report (2019) World Economic Forum• Regional Risks for Doing Business (2018) World Economic Forum• Enterprise Risk Management (2018) COSO/WBCSD• Top Risk 2019 (2019) Eurasia Group• 10 for 2019: Systemic Risks Loom Large (2019) Sustainalytics• SDGs21

Creating Value

23 Medium-Term Management Plan

To become a corporate group that provides a sense of safety
and security to societies in the Pacific Rim by demonstrating thegroup’s overall capabilities.

23 Medium-Term
Management Plan

Aiming to become an
outstanding leading company
What do we mean by aiming to be “outstanding”?

First step

To construct a business model unique to us, where allbusinesses in our group function together comprehensively
and integrally.

Third step

Shareholder Returns

 Operating income on net sales: 7.5%
 Return on assets (ROA): 6.3%
 Growth investments: 100 billion yen• Acquisition of the Oro Grande plant(U.S.A.) and construction of its newmill•C onstruction of the Ofunato Power
Plant (biomass power plant)•D C Co., Ltd. made a wholly owned
subsidiary Net debt/equity ratio (DER):
0.6 times•N et interest-bearing debt:
234.8 billion yen(End of FY2018) Increased dividends and purchased
treasury shares.
•P ayout ratio: 18% (3-year average)• Total return ratio: 26% (3-year
average)• Treasury shares purchased: 10
billion yen

20 Medium-Term Management Plan (FY2019 to FY2021)

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

Second stepFirst step

Financial structure

Second step

Performance

17
MediumTerm
Management
Plan

20 MediumTerm
ManagementPlan❶ To become a corporate group that preempts future changes in the environment and seeksinnovations in all fronts, thereby progressing on a growth path.
❷ To contribute to the establishment of a sense of safety and security in society through theprovision of materials and technological development, furthering national resilience as amember of the social infrastructure industry.
❸ To vigorously push ahead with further strengthening our earnings base and financial structure
aiming at sustainable development by strengthening businesses through exhaustive cost-cutting.

Profitability

Fundamental
Policies

Fundamental Policies❶ Strive for sustainable growth.
❷ As part of the social infrastructure industry,
contribute to the establishment of a safe andstable society.
❸ Strengthen our earnings basefor businesses and steadily carryout growth investment.

17 Medium-Term Management Plan (FY2016 to FY2018)

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

Fundamental
Policies

Our Future Vision and Direction Targeting the Mid-2020s

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

Performance

We have formulated our 23 Medium-Term Management Plan covering the three years from FY2022 to
FY2024 to take the next, or the third, step toward realizing our future vision and direction targeting themid-2020s.

❶ To become a corporate group that anticipates future changes in the business environment andseeks innovations on all fronts, thereby advancing along a pathway of growth.
❷ 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 tobuild national resilience as a member of the social infrastructure industry.
❸ To push ahead with the strengthening of our earnings foundation for businesses and further
improve our financial structure through cost reductions as well as by actively executing investments
in promising fields that will contribute to the group’s sustainable growth.

Profitability

Financial structure

Shareholder Returns

 Operating income on net sales: 7.4%
 Return on assets (ROA): 6.3%
 Growth investments: 100 billion yen• Investment in PT Solusi Bangun
Indonesia Tbk (SBI)• Renovation of production line in thePhilippines•C onstruction of new waste heat recovery
power generation system (Saitama Plant) Net debt/equity ratio (DER):
0.4 times•N et interest-bearing debt:
175 billion yen(End of FY2021)

 Steady dividend payments andpurchase of treasury shares.
•P ayout ratio: 19% (3-year average)• Total return ratio: 30% (3-year
average)• Treasury shares purchased: 15
billion yen

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

22

Achievements

Review

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

Challenges
 Sustained growth investment
 Initiatives targeting Carbon Neutrality Strengthening our plant facilities, mines andquarries Restructuring our businesses in Japan23

Creating Value

23 Medium-Term Management Plan
Third step

23 Medium-Term Management Plan (FY2022 to FY2024)“Aiming to become an outstanding leading company”

Fundamental
Policies

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

❶ Strive for sustainable growth.
❷ As part of the social infrastructure industry, contribute to the establishment of a safe andstable society.
❸ Strengthen our earnings base for businesses and steadily carry out growth investment.

Targets for FY2024

Plan for FY2024

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

 Net sales*1: 750 billion yen or more
 Operating income: 85 billion yen or more
 EBITDA*2: 145 billion yen or more
 Net debt/equity ratio (DER): Around 0.4
N et interest-bearing debt/EBITDA: 1.5 or less*1 Since we have adopted the Accounting Standard for Revenue Recognition(ASBJ Standard No. 29) etc. from FY2022, the net sales in the FY2024 planshow the amount after adoption of the new standard. (The adoption of the
new standard has a negative impact of -210 billion yen.)*2 EBITDA = Operating income + depreciation (including goodwill
amortization)

Investment Strategy and Shareholder Returns
 Cash flow from operating activities and assignment of assets etc. (3-year cumulative total): 330 billion yen•N ew investment aimed at sustainable growth: Capital expenditure, and investment and financing:
280 billion yen (including growth investment : 120 billion yen)
• Shareholder returns: Total return ratio around 33% (one third of the net profit for the year attributable toparent company shareholders)• Maintain and improve financial soundness: Maintain a net DER of around 0.4

Key Strategies

1
2
3
4

24

Growth investment

Initiatives to achieve carbon neutrality• Initiatives to achieve carbon neutrality by 2050
(Growth strategy)

Carbon neutrality
100 billion yen

Strengthening plant facilities

Enhancing mines and quarries• We will establish a long-term stable supply system
for limestone resources by 2030

The 23 Medium-Term Management Plan is the third
step toward realizing our future vision and direction
targeting the mid-2020s. Even though domestic
demand for cement fell below 50 million tonnes in
FY2010, and since then has hovered in the 40 million
tonnes range, the Taiheiyo Cement Group has achieved
operating income of more than 60 billion yen for eight
consecutive fiscal periods. I believe this is due to thebusiness restructuring we carried out in FY2011, and to
the growth investment continued under our mediumterm management plans since then. Under the 23
Medium-Term Management Plan our fundamental
policy is to construct a business model unique to us,
where all businesses in our group function together
comprehensively and integrally so that we become
an outstanding leading company and achieve further
sustainable growth.

Management Targets

Capital productivity is a management challenge.
Although we have made the return on assets (ROA) a
management target in our medium-term management
plans, our ROA at the end of FY2021 was 6.3%, meaning
we did not achieve our target of 8% or more. In the 23
Medium-Term Management Plan we have adopted
an ROE (return on equity) of 10% or more as a new
management target to clarify our target of maximizing
corporate value. I believe that it is absolutely essential
to achieve operating income of 85 billion yen or more if
we are to attain that target. With no end to the COVID-19
pandemic in sight, with the harsh business environment
expected to continue and with domestic demand for
cement hovering at around 40 million tonnes, we will try
once more for the profit targets set in the 20 Medium
Term Management Plan and attain them by steadily
implementing the strategies of the 23 Medium-Term
Management Plan.

Investment Strategy and Shareholder Returns

Sustained growth investment• In order to establish a production and supply systemwith long-term stability by 2030, we will renew key
machinery, upgrade production and equipment
management and deploy AI.

Aiming to Maximize Our Corporate
Value and Become an Outstanding
Leading Company

20 billion yen
10 billion yen
35 billion yen
23 Medium Term
Management Plan

Strengthening plantfacilities
100 billion yen
Strengthening minesand quarries
100 billion yen
FY2022–FY2031

We expect to generate funds of 330 billion yen (3year cumulative total) with assignment of assets added
to our cash flow from operating activities. Of that, a
total of 280 billion yen is scheduled to be allocated toinvestment aimed at sustainable growth, with 160 billion
yen allocated to strengthening our business foundationand 120 billion to growth investments. Meanwhile, wewill distribute shareholder returns with a total return ratioof around 33% (one third of the net profit for the year
attributable to parent company shareholders) as ourbenchmark. We will also continue to work on improving
our financial soundness and will maintain a net DER ofaround 0.4 times.

Key Strategies in Medium to Long-term Investment

In order to strengthen the business foundationthat supports our sustainable growth, we have set key
strategies concerning medium to long-term investment
with a focus on the business environment during thedecade from FY2022 to FY2031, which also includes
the period of the 23 Medium-Term Management Plan.

Tetsuya Ohashi

Director and Senior Executive Officer
Corporate Planning Department

In addition to continuing with growth investment inoverseas M&As and domestic development of new
products, we plan to invest a total of 300 billion yen (100billion yen each) in the following three areas: 1) Initiatives
to achieve carbon neutrality. 2) Strengthening plantfacilities. 3) Strengthening mines and quarries. Shifts in
the global attitude towards climate change and in social
conditions hold tremendous significance for the cement
industry around the world, and it will inevitably have toengage with initiatives to achieve carbon neutrality. Asa leading company in the Japanese cement industry
we will spearhead the development of technologies
to achieve carbon neutrality. At the same time, we
are investing considerable funds and manpower instrengthening our plant facilities and limestone quarries
with the aim of securing stable long-term production.
Such initiatives, undertaken at a time when society andthe business environment are undergoing rapid anddramatic changes, show a strong determination to strive
for sustainable growth and to become an outstanding
leading company with our cement business playing thecore role.

Human Resource Development

We will also focus on human resource development
since, even if we strengthen our facilities, plants andquarries, how well they function depends on the humanresources engaged. In particular, we plan to provide
the younger generation with opportunities where
they can gain plenty of experience of thinking things
through and making their own decisions. Major projects
such as the development of an integrated plant andthe establishment of logistics facilities will begin in thePhilippines and Indonesia during the period of the 23
Medium Term Management Plan. We will be proactive in
deploying the younger generation there as I believe thatsuch projects are opportunities for the Taiheiyo Cement
Group to transmit our technologies.

25

Business Strategies

Key Business Strategy Themes

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

1

Contributing to
National Resilience

The increase in the number and severityof natural disasters is challenging social
structures to formulate measures toprevent disasters and mitigate damage.
We will contribute to national resilienceby further enhancing the stable supply of
cement and other construction materials
in order to strengthen infrastructure andsupport speedy recovery after a disaster.
➡ P.28● Mineral Resources Business ➡ P.32
● Construction Materials Business ➡ P.36
● Research and Development ➡ P.38
● Cement Business

3

Aiming to Achieve
Carbon Neutrality

The Taiheiyo Cement Group views
the reduction of CO2 emissions as anopportunity to boost our corporate value.
We will expand our efforts to efficiently
replace fossil fuels with alternative
energy derived from waste, promotetechnological progress in such areas as
the development of low-CO2 cement andinnovative technologies for CO2 capture,storage and utilization, and aim to achievecarbon neutrality.

2

Contributing to theCreation of a Recyclingbased Society

In addition to utilizing industrial waste,industrial by-products, municipal waste andincineration ash as raw materials and fuels
for cement production, the Taiheiyo Cement
Group has recently been expanding
initiatives to utilize disaster waste. Goingforward, we will apply and develop theexpertise and technologies we havecultivated so that we can contribute to thecreation of a recycling-based society and theresolution of social issues.
● Cement Business

● Mineral Resources Business
● Environmental Business

● Research and Development

➡ P.28➡ P.32➡ P.34➡ P.38➡ P.28➡ P.34● Research and Development ➡ P.38
● Cement Business

● Environmental Business

26

27

Business Strategies

Cement Business (Japan)
Strengthening the Foundations of Our Stable Supply
System Is a Top Priority Whilst Promoting Further Efficiency
Our Cement Business in Japan has built a solid foundation for
manufacturing, transportation and supply, and has successfully
created a stable supply of cement. Currently, it is difficult toassume that public investments such as in national resilience will
provide any supporting effect to domestic cement demand and,furthermore, COVID-19 has badly impacted the performance ofrailway companies and other major infrastructure investors resulting
in the postponement of these companies' capital expenditure on
infrastructure. Given this business environment we will continue tomake strengthening the foundations of our stable supply system a
top priority, and will strive for further cost reductions and to optimize
our sales system. In addition, the Cement Business Department,
Mineral Resources Business Department and Environmental
Business Department are creating a sales system where we canlink up and share information from the perspectives of boostingcustomer satisfaction, maximizing orders received, and streamlining
sales. We also intend to discuss providing customers with support
by proposing appropriate solutions, and suggesting total solutions
such as new business development.

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

23 Medium-Term Management Plan Strategies Strengthen our earnings foundation• Mobilize comprehensive group strengths (manufacturing,sales and logistics capabilities), and contribute to national
projects etc.
• Formulate sales strategies suitable for the characteristics ofeach region• Seek efficient transportation

 Enhance plant facilities• Maintain a stable supply system by upgrading key equipment• Seek to improve labor productivity by making full use of AI
and the IoT

Net sales*
FY2021 Results

FY2024 Plan

406.2 billion yen 267 billion yen

Operating income
FY2021 Results

FY2024 Plan

16.2 billion yen

23.5 billion yen*Since we have adopted the Accounting Standard for Revenue Recognition(ASBJ Standard No. 29) etc. from FY2022, the net sales in the FY2024 planshow the amount after adoption of the new standard. (The adoption of the
new standard has a downside impact of -185 billion yen.)• Develop and expand technologies to reduce environmentalloads and cut CO2 emissions

FY2021 Achievements

Net Sales and Operating Income
500
400
300

Net sales (Left axis)

408.5

25.5

200

434.8

415.1

406.2

2018

50
40

*

30
21.4

16.6

16.2

100
0

(Billions of yen)

Operating income (Right axis)

2019

2020

2021

253.5
14.7

2022 (FY)(Forecast)

20
10
0

* The adoption of the Accounting Standard for Revenue Recognition etc.
has a downside impact of -171.7 billion yen.

Key Strategies for FY2022
1. Sales• Boost our presence in the domestic distribution
market• Improve our system to supply special products tomeet the customer’s needs

2. Ready-mixed concrete• Promote substantial action to provide customer support• Provide solutions that match the local situation

Relevant SDGs

 Stable provision of cement products

 Efforts to mitigate and adapt to climate change Further contributions to a recycling-basedsociety

Risks

Opportunities

Reduced domestic demand due to declining birthrates and an aging population

New demand created by a commitment to national
resilience and development of advanced infrastructure

Reinforcement of regulations on GHG emissions

Development of innovative technology for
utilizing CO2

Some of Our Initiatives

Aiming to Boost Cement Business Resilience Initiatives aimed at carbon neutrality(Billions of yen)

Efforts to Address Social Issues

Although the impact of events such as the suspension of construction
work due to COVID-19 was only temporary, the continued declarations ofa state of emergency led to labor shortages on construction sites, slowing
down their progress and causing longer construction periods. In addition,with no prospect of demand from inbound tourism, there is less investment
in tourism and transportation. Domestic demand for cement dipped below
40 million tonnes for the first time since FY1967, reaching its lowest point in
54 years at 38.67 million tonnes. Including consignment sales, the Taiheiyo
Cement Group sold 13.78 million tonnes of cement in Japan (a 4.8% decreaseon the preceding fiscal year). Due to that business environment we recorded
net sales of 406.2 billion yen (a 8.9 billion yen decrease on the previous fiscal
year) and operating income of 16.2 billion yen (a 400 million yen decreaseon the previous fiscal year) since, even though energy costs were lower, thedecrease in sales volume had a huge impact.
Under those business circumstances we completed the replacement of
the EP (Electrostatic Precipitator) with bag filters at Oita Plant Kiln No. 4, andour group company Myojo Cement Co., Ltd. has expanded its fuel supply
equipment for the kiln burner to increase waste plastic utilization.

3. Improve technical marketing and quality assurance
work• Respond positively to precasting of concrete products

4. Secure more large-project orders• Promote the marketing of solutions that leverage the
combined capabilities of Taiheiyo Cement and ourgroup companies

5. Develop our soil stabilizers business

Aiming to become an outstanding leading company
With “Aiming to become an outstanding leading company” as our
slogan, we aim to utilize flexible thinking and bold action to reconstruct
our cement business in Japan. In addition to carrying out enhancementsof our plants, mines and quarries with the next hundred years in view,
we will focus our sales strategies on the four pillars of the previous
medium-term management plan: sales, ready-mixed concrete, concrete
products, and the securing of more large-project orders. Also, in
addition to utilizing AI to create an optimal logistics system for land
and marine transport, our Sales and Production departments are jointly
engaged in finding ways to improve labor productivity using AI andthe IoT, and we will also promote the development and expansion oftechnologies for reducing environmental impact and CO2. Furthermore,along with enhancing our plant facilities, we plan to strengthen our
technical sales activities to expand applications and sales of cementbased soil stabilizer which is positioned as a growth field, withexpansion of our lineup of products for specific soils such as peat.

Our coastal cement tanker, Hokuyumaru

Resolutely taking on the challenge of reducing CO2 and making people

and facilities more resilient

The mission of a cement production site is to provide its customers with astable supply of safe and reliable products. Towards this mission we strive tocreate robust systems to manage safety, quality and the environment, and to boost
customer satisfaction. Meanwhile, the market environment of the cement industry
is undergoing huge changes as humanity aims to achieve carbon neutrality, andwe will swiftly implement strategies to reduce CO2 and decrease our environmental
impact. Given the aging of facilities, we continuously focus on enhancing facilities
with not only including replacement of principal equipment, but also employing AI
and IoT for automatic operation and modernization of equipment maintenance. We
will build firm and capable “people” simultaneously with solid plant facilities for oursustainable development.

Koshiro Hidaka

Managing Executive Officer
Overseeing Production Department
and Maintenance & Engineering
Department• Proactively engage with new applications and methods• Develop and promote high-performance products

28

29

Business Strategies

Cement Business (Overseas)
Developing Markets from a Long-term Perspective, with a
Focus on Indonesia and Other Countries in Southeast Asia

Although our overseas cement business is showing steady growthwith the USA at its core, we are focusing next on Southeast Asia, and in thePhilippines and Indonesia in particular, since growth is expected to continue
in this region. I intend to steadily implement the growth investment we have
moved forward with under the 20 Medium-Term Management Plan, expand
our Southeast Asian business as a new earnings source like we did for our
American business, and create a well-balanced system.
In Indonesia, we made a capital and business alliance last year with theSemen Indonesia (SI) Group, the largest cement manufacturer in Indonesia.
By combining the Taiheiyo Cement Group’s extensive know-how with the SI
Group's resources, and deploying not just our Cement Business but also our
Mineral Resources, Environmental and Construction Materials businesses,
we will open up markets where we can expect to see growth from a longterm perspective. We will continue to respond to expanding growth in thePhilippines by steadily moving forward with renovation of the production
line and boosting our production capabilities. In the USA, meanwhile, we
aim to seize investment opportunities based on regional policy and market
characteristics. As initiatives aimed at CO2 reduction, we will also expand theutilization of natural gas to cement and ready-mixed cement carriers andcement kilns, and promote wider use of blended cement.

Yoshifumi TauraManaging Executive Officer
Senior General Manager ofInternational Business Division

23 Medium-Term Management Plan Strategies Sustained growth investment

Net sales*• Create business expansion opportunities in Southeast Asiaand the US, and construct the optimum logistics network

FY2021 Results Strengthen our earnings foundation

FY2024 Plan

214.8 billion yen 218 billion yen• Promote our Mineral Resources, Environmental andConstruction Materials businesses overseas• Implement thorough cost cuts

Operating income
FY2021 Results

FY2024 Plan

25.1 billion yen

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

 Initiatives Aimed at Achieving Carbon Neutrality• Implement initiatives aimed at CO2 reductions

FY2021 Achievements
Net Sales and Operating Income(Billions of yen)

250
200

Net sales (Left axis)

203.4

211.6

150
100

15.1

20.3

(Billions of yen)

Operating income (Right axis)

213.2

19.8

214.8
25.1

221.0

40

*

25.3

50
0

50

30
20
10

2018

2019

2020

2021

2022 (FY)0(Forecast)* The adoption of the Accounting Standard for Revenue Recognition has had no impact.

Key Strategies for FY2022
1. Boost earnings capacity of existing businesses(1) USA(2) China(3) Vietnam(4) The Philippines

30• Meet increased demand by maximizing plant
production and securing import sources by leveraging
our global network•P romote optimal leverage and supply systems thatleverage our 3 plants• Introduce green products to respond to the tightening of
regulations and contribute to waste treatment•P romote our Environmental Business and seek out new
business•E xpand our market share by differentiating ourselves fromother companies by expanding our logistics bases anddiversifying our products•B oost our competitiveness by cutting production
costs through energy-saving investment, and via waste
treatment•S teadily carry out work to renovate production lines•C reate a 3 million tonne sales system ready for when
production capacity has been boosted

In the USA, although the construction industry was impacted by the COVID-19
pandemic, projects that were deemed to be essential were allowed to continue,
and there was also strong demand for housing. As a result, the volume of cement
sales and cement prices were both higher than in the previous fiscal year. In China
sales volume decreased due to the impact of bad weather and the suspensionof construction work due to the COVID-19 pandemic, and also to factors suchas the transfer of Qinhuangdao Asano Cement Co., Ltd. equity interests. In
Vietnam sales volume was up on the previous fiscal year, despite the impact ofcompetition with other companies. In the Philippines sales volume decreased asa result of the suspension of construction work due to the impact of COVID-19
travel restrictions. As a result of all that, we posted net sales of 214.8 billion yen(an increase of 1.5 billion yen on the previous fiscal year) and operating income of
25.1 billion yen (an increase of 5.2 billion yen on the previous fiscal year).
Given those business circumstances, in the Philippines construction of thebelt conveyor between the wharf and our plant is almost complete, and we haveenhanced our capacity to transport imported raw materials etc. In addition, we
decided on a capital and business alliance with the SI Group in Indonesia andwork to renovate production lines in the Philippines as growth investment underthe 20 Medium-Term Management Plan.

2. Expand and increase the sophistication of our
trading business• Boost our bargaining power in the international
market• Expand our bulk materials business

3. Implement initiatives to rebuild our businessportfolio• Further business expansion in Southeast Asian
countries such as Indonesia and the Philippines• Create an optimal logistics network incorporatingIndonesia

Efforts to Address Social Issues

Relevant SDGs

 Contribution to infrastructure improvement Efforts to mitigate and adapt to climate change Contribution to creating a recycling-basedsociety

Risks

Opportunities

Tightened environmental regulations in hostcountries

Contribution to creating a recycling-based society
in our host countries

Climate change in host countries

Provision of innovative technologies for utilizing
CO2

Some of Our Initiatives

Aiming for Business Expansion in Southeast Asia
Business expansion in Indonesia and the Philippines, countries where growth is forecast
The Indonesian economy is booming, and in FY2021 we madea capital and business alliance with the SI Group, which has a lion’sshare of the market, and are establishing our business foundationin Indonesia. We will also construct new logistics bases, and work topromote our Mineral Resources, Environmental and Construction
Materials businesses.
We have also decided to renovate production lines at Taiheiyo
Cement Philippines, Inc. Demand for cement is expected tocontinue to grow, and we intend to meet that demand, and also tomake huge improvements in energy efficiency by utilizing cuttingedge technologies.
We will continue our active commitment to business expansion
in Southeast Asia and the reduction of our environmental impact.

Solusi Bangun Indonesia Tuban Plant(Clinker production capacity 2.48 million t/year)

Aiming to further improve production systems at overseas plants, and toenhance our plant engineer human resources

With overseas plants forming a certain ratio of the Taiheiyo Cement
Group’s production portfolio, it is becoming increasingly important to stabilize
production at our overseas plants and further reduce manufacturing costs andCO2. We are adopting various technologies to achieve those aims. In particular,
going forward we will actively promote global expansion of recycling andprocessing technologies for which there is a need overseas. Moreover, weplan to install state-of-the-art facilities in the Philippine renovation project, as
well as operational and facility management systems that utilize AI and the IoT.
The plant will be positioned as our most modernized model, and we plan touse it as a venue for human resource training for Taiheiyo Cement Group plantengineers, including local employees.

Koshiro Hidaka

Managing Executive Officer
Overseeing Production Department
and Maintenance & Engineering
Department

31

Business Strategies

Mineral Resources Business
Establishing Our Earnings Foundation via Mine andQuarry Development with the Next 100 Years in View

In addition to selling limestone as a raw material for cement andaggregates for ready-mixed concrete, the Mineral Resources Business sells
mineral products to a wide range of industries, including the construction,
civil engineering, steel and chemical industries. The natural resources thatform our business base are mainly extracted from our own mines andquarries, but factors such as environmental regulations make it hardereach year to develop mines and quarries. Given the circumstances, we aredeveloping mines and quarries with a medium- to long-term perspective,
for example by devising a plan to invest 100 billion yen in enhancing minesand quarries during the ten-year period that includes the 23 MediumTerm Management Plan. In addition, we aim to make optimal use of thoseprecious natural resources by supplying them for the optimum purpose,depending on the quality and characteristics of each mine or quarry,and by enhancing our transport system. Meanwhile, our geo-solutions
business will contribute to the creation of a recycling-based society via theappropriate treatment of construction soil and surplus soil, and we aim to
expand sales of heavy metal immobilizer, which makes it possible to treat
contaminated soil on construction sites. Furthermore, our mineral expertise
is made fully manifest in our functional materials business, where we aredeveloping versatile products that accurately respond to customer needs
and which we aim to commercialize before very long.

Kunihiro Ando

Director and Senior Executive Officer
Mineral Resources Business Department

23 Medium-Term Management Plan Strategies Enhance mines and quarries

Net sales*• Enhance mines and quarries to establish infrastructure that will
ensure a long-term stable supply of mineral resources Strengthen our earnings foundation• Strengthen and promote limestone aggregate production anddistribution facilities• Reconstruct our production and sales system targeting steel andpaper manufacturing• Open up new markets for our heavy metal immobilizer (DENITE)• Accelerate commercialization of our functional hollow particles(CellSpheres)Operating income

FY2021 Results

FY2024 Plan

FY2021 Results

FY2024 Plan

75.7 billion yen

82 billion yen

6 billion yen

9.5 billion yen*Since we have adopted the Accounting Standard for Revenue Recognition(ASBJ Standard No. 29) etc. from FY2022, the net sales in the FY2024 planshow the amount after adoption of the new standard. (The adoption of the
new standard has a downside impact of -4 billion yen.) Sustained growth investment• Implement growth investment in the Southeast Asia region

FY2021 Achievements
Net Sales and Operating Income(Billions of yen)

100
80
60

Net sales (Left axis)

81.4
8

84.2
8.2

40

Operating income (Right axis)(Billions of yen)

15
80.1

7.1

75.7
6

12.5

*

77

10
6.4

20
0

7.5
5
2.5

2018

2019

2020

2021

2022 (FY)(Forecast)0* The adoption of the Accounting Standard for Revenue Recognition has had
a downside impact of -3 billion yen.

In our aggregates business, sales of limestone aggregate for ready-mixed
concrete for high-rise buildings declined due to redevelopment projects in urban
areas being delayed by factors such as the COVID-19 pandemic. Limestone forsteel, the mainstay of our mineral products business, saw a decline in sales due
to decreased volumes of crude steel in Japan and overseas. Our geo-solutions
business ran sales promotions for our heavy metal immobilizer for highway
construction projects but, due to factors such as the impact of construction site
cave-ins, sales remained at the same level as last year. As a result of all that, weposted net sales of 75.7 billion yen (a decrease of 4.3 billion yen on the previous
fiscal year) and operating income of 6 billion yen (a decrease of 1.1 billion yen on
the previous fiscal year).
Under those business circumstances, we have finished the development workon Horoshiyama (Sumita Town, Iwate Prefecture), a new mining area for Ofunato
Quarry, and completed the environmental assessments for the Yato area of ShinTsukumi Quarry (Tsukumi City and Usuki City, Oita Prefecture), which will be thenext source of raw materials for the Oita Plant. We also successfully developed
Nanolitia, our lithium-ion battery cathode material.

Key Strategies for FY2022
1. E
 stablish the foundations to ensure a long-term stablesupply of our mineral resources• Review, plan and implement mine and quarry redevelopment• Appropriately utilize our mineral resources

2. E
 xpand the earnings of our existing core businesses
that demonstrate the group’s overall capabilities<Aggregates business>• Establish an aggregate classification plant at Shin-Tsukumi Quarry
and carry out sales promotions• Construct an aggregates yard with the aim of ensuring a stablesupply of aggregates in the Kanto region and creating a system topromote sales there

32<Mineral products business>• Develop optimal production systems that match changes in the
production systems of our limestone for steelmaking customers<Geo-solutions business>• Expand our sales volume by boosting the inclusion of heavy metal
immobilizer in the planning for major projects, and securing fixed
openings

3. Nurture future key businesses that enable sustainablegrowthEfforts to Address Social Issues

Relevant SDGs

 Stable provision of mineral resource products Further contributions to a recycling-basedsociety Provision of environmentally sound products

Risks

Opportunities
Quarries subject to large-scale natural disasters
associated with climate change

Reinforcement of our supply chain, leveraging ourabundant mineral resources from mines and quarries

Triggering the deterioration of concrete by alkaliaggregate reaction

Development of more sophisticated mining technology

Some of Our Initiatives

Initiatives Aimed at Ensuring a Long-term Supply of Limestone Products, and theDevelopment of New Materials
Development of a new mining area at Shin-Tsukumi Quarry and construction of the Minamisode Yard
We plan to develop the Yato area, a new site at Shin-Tsukumi
Quarry, to ensure a long-term supply of limestone products on into
the future. The development will match the characteristics of themining zone, and we will switch to a production system that is basedaround limestone products for cement and aggregate. Production
and shipment of limestone for steelmaking will be transferred toother quarries in the group and we will take steps to optimize our
production structure, for example by installing a new aggregateclassification plant at Shin-Tsukumi Quarry. Of the aggregate producedby that plant, we plan to sell the fine aggregate in coastal areas of
the Greater Tokyo Area, and to create a stable supply system byconstructing a new shipment yard in Sodegaura, Chiba Prefecture.

Panorama of the Gomagara area of Shin-Tsukumi Quarry

Commercialization of our functional hollow particles
Hollow particles have been applied as a material that make things
lighter or more adiabatic, due to their balloon-like structure with aninternal cavity.
We have developed CellSpheres, which have an average
diameter of 5μm or less, which means they are a tenth of the size of
conventional hollow particles. They also have a 70% higher hollowness
ratio, making them the ideal material to meet the lightness andinsulation needs of products such as painting materials, which haveshifted to thin film in recent years, and plastic products, which havebecome increasingly compact. In addition, we will develop productswith better dielectric characteristics and heat-resisting properties,
while maintaining the high hollowness ratio, and will grow materials
that contribute to the development of areas such as 5G and 6G highspeed communication technologies into a future core business.

1μm

Magnified photograph of CellSpheres• Commercialize our functional hollow particles, and create new
businesses• Secure stable income sources for our local subsidiary in Vietnam, andimplement growth investment in the Southeast Asia region

33

Business Strategies

Environmental Business
Aiming to Maximize Our Waste Treatment Business andEstablish a New Model for Recycling Resources

Our core business is recycling waste and by-products
generated at thermal power stations, steelmakers and chemicals
manufacturers, as well as recycling things such as municipal waste,incineration ash and sewage sludge at the request of municipalities.
For this, we leverage the diverse environmental technologies thecompany has cultivated in our cement production. In recent years
we have also been focusing on growth in the aquatics businessvia products such as water purification materials as a way to create
and promote a recycling-based society. Meanwhile, global action
to reduce greenhouse gases is accelerating. The Environmental
Business is working on expanding the use of alternative energies
with the aim of achieving our long-term vision and carbon
neutrality. We also aim to establish a new resource recycling modelwith the cement industry at its core, a model that includes measures
such as the recycling of lithium-ion batteries, the establishmentof low-temperature embrittlement technologies and the recovery
of precious metals from municipal waste incineration ash andseparation of phosphorus.

Kunihiro Ando

Director and Senior Executive Officer
Environmental Business Department

Net sales*• Maximize our waste treatment business and develop new
businesses Strengthen our earnings foundation• Establish a new model for recycling resources with thecement industry at its core
• Implement large-scale initiatives and create new businessmodelsOperating income

FY2021 Results

FY2024 Plan

FY2021 Results

FY2024 Plan

78 billion yen

82 billion yen

6.4 billion yen

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

FY2021 Achievements
Net Sales and Operating Income(Billions of yen)100

Net sales (Left axis)

90.2

92.6

80
60
40

7.4

6.6

(Billions of yen)

Operating income (Right axis)

84.4

7.7

15

78

12.5

*

69.5

6.4

6.7

20
0

10
7.5
5.0
2.5

2018

2019

2020

2021

2022 (FY)0(Forecast)* The adoption of the Accounting Standard for Revenue Recognition has had
a downside impact of -13 billion yen.

Corporate activities in general stagnated due to the impact of COVID-19,
which meant that less waste and by-products were generated. This stagnation
led to a reduced demand for electricity which, combined with the acceleration of
global action to reduce greenhouse gases, led to reduced operation of coal-fired
power plants. This meant that, in addition to a drop in the availability of coal ash,sales of calcium carbonate for scrubbing systems at power stations declined, as
did the trade in FGD gypsum. As a result of all that, we posted net sales of 78
billion yen (a decrease of 6.3 billion yen on the previous fiscal year) and operating
income of 6.4 billion yen (a decrease of 1.2 billion yen on the previous fiscal year).
Under those business circumstances, we installed equipment at groupcompany Tsuruga Cement Co., Ltd. and launched our lithium-ion battery
recycling business. In addition to engaging in the regional treatment of disaster
waste when group company Myojo Cement Co., Ltd. accepted wood waste
generated in the Kuma River drainage basin in Kumamoto prefecture due tothe torrential rains of July 2020, we have concluded comprehensive partnershipagreements with Hokkaido and Saitama prefectures with regard to the creation ofa recycling-based society.

Key Strategies for FY2022
1. Maximize our waste treatment business anddevelop new businesses• Increase and expand waste plastic treatment• Contribute to the creation of a recycling-basedsociety

2. Establish a new model for a recycling-basedsociety with the cement industry at its core

Relevant SDGs

● Further contributions to a recycling-basedsociety● Establishment of a new model for recycling

resources● Provision of environmentally sound products

and solutions

Risks

Opportunities
Changes in environmental regulations incountries to which we export waste

Greater use of blended cement in Southeast Asiaand other regions

Decline in the volume of coal ash generated due
to fewer coal-fired power stations in operation

Development and deployment of technologies touse alternative by-productsSome of Our Initiatives

23 Medium-Term Management Plan Strategies
 Initiatives aimed at achieving carbon neutrality

Efforts to Address Social Issues

3. Implement large-scale initiatives and create new
business models• Expand sales of biomass fuel, and discuss
strengthening alliances with other companies and
M&As

Creation of New Business Models
Treatment of waste lithium-ion batteries by leveraging cement production processes
Due to their wide use in electric vehicles etc., the amount of waste
lithium-ion batteries is expected to increase in the near future. We
therefore jointly established a technology that leverages cement
production processes to recycle large sized lithium-ion batteries with
Matsuda Sangyo Co., Ltd., and installed equipment at group company
Tsuruga Cement Co., Ltd. that began treating the waste batteries in
April 2020. This technology enables us to make lithium-ion batteries
harmless safely and efficiently. Furthermore, total recycling is possible
since, in this treatment, the lithium-ion batteries are dismantled,
pulverized and sorted through, with useful metals such as rare metals
being recycled, and all the residue being reused as raw material for
cement production.

Aluminum

Iron

CopperRare metals

Treatment equipment and recovered metals(Treatment capacity: 10 t/day)

Treatment of waste such as Automobile Shredder Residue using low-temperature embrittlement
Scrapped electrical appliances and the residue after useful metals
have been recovered from scrapped cars (ASR, Automobile Shredder
Residue) are a kind of waste that is difficult to treat since plastics areentangled with metals that were unable to be separated out. However,in 2021 group company DC launches a business treating waste such
as ASR using low-temperature embrittlement technology we havedeveloped.
Low-temperature embrittlement is used to heat the plastics in the
ASR and make them more brittle so that it is easy to separate theplastics from the metals. The separated metals are recycled, and theplastics used as fuel for cement production, thereby contributing to
the recycling of resources.

Panoramic view of the low-temperature embrittlement
equipment• Secure coal ash substitutes by removal and treatmentof harmful elements for cement quality

34

35

Business Strategies

Construction Materials Business
Strive for an early Recovery for Our Earnings Capacity,and Expand Our Business Domain into Southeast Asia

In addition to making the improvement of the earnings capacityof our existing businesses a top priority theme, we will strive todevelop and expand new business domains.
With regard to improving the earnings capacity of our existing
businesses, we are striving to not only boost the performance ofour products, but also to adopt construction methods that respondto the labor shortage afflicting construction sites. We are also
boosting our cost competitiveness and differentiating our products
and technologies from those of other companies by measures
such as utilizing ICT in ground improvement projects to optimize
construction work and make its quality visible.
With regard to developing and expanding new businessdomains, we will expand into the construction sector of ground
improvement projects, and promote the deployment of heavy-dutypaving blocks in roadways and harbor yards. Furthermore, now thata capital and business alliance has been concluded with PT Semen
Indonesia Group, we plan to promote construction materials
business that meets local needs there.

Masaki Takahashi

Managing Executive Officer
Construction Materials Business Department

23 Medium-Term Management Plan Strategies
 Strengthen our earnings foundation

Net sales*• Improve business profits via product differentiation andgreater competitiveness• Accelerate the construction of a group structure aimed atbusiness expansion into the Southeast Asian market Initiatives Aimed at Achieving Carbon Neutrality• Strengthen initiatives to reduce the environmental impact of
the entire Construction Materials Business Restructuring our businesses in Japan

Operating income

FY2021 Results

FY2024 Plan

FY2021 Results

FY2024 Plan

73 billion yen

75 billion yen

3.5 billion yen

6.6 billion yen*Since we have adopted the Accounting Standard for Revenue Recognition(ASBJ Standard No. 29) etc. from FY2022, the net sales in the FY2024 planshow the amount after adoption of the new standard. (The adoption of the
new standard has a downside impact of -10 billion yen.)• Develop new products and businesses leveraging existing
technologies and value chains

FY2021 Achievements
Net Sales and Operating Income(Billions of yen)

Net sales (Left axis)

100
80
60
40

82.1

77
4.7

4.9

(Billions of yen)

Operating income (Right axis)

81.3

10

73

8

*

70
4.5

3.5

6
4

20
0

4
2

2018

2019

2020

2021

2022 (FY)(Forecast)0* The adoption of the Accounting Standard for Revenue Recognition has had
a downside impact of -9.2 billion yen.

The Construction Materials Business has been impacted by construction
work delays and postponements, and sluggish private investment, due to the
COVID-19 pandemic, and sales of autoclaved lightweight concrete (ALC) panelsand other construction materials have declined. Ground improvement projects
have also decreased due to factors such as temporary suspension of construction
work under the direct control of the Ministry of Land, Infrastructure, Transport andTourism. As a result of all that, we posted net sales of 73 billion yen (a decrease of
8.3 billion yen on the previous fiscal year) and operating income of 3.5 billion yen(a decrease of 900 million yen on the previous fiscal year).
Under those business circumstances the group is tackling capital investment
and the development of new construction methods to save labor at construction
and manufacturing sites as a priority issue. For example, Taiheiyo Materials
Corporation has developed Early Cleat, an input system for anti-washout
underwater concrete additive that automates the underwater anti-washout
additive agitator. This input system has been registered in NETIS (NewTechnology Information System).

Key Strategies for FY2022
1. Boost the earnings capacity of existing businesses• Improve product differentiation and competitiveness• Establish new business methods such as digitalization
for the COVID-19 pandemic and the post-COVID world• Implement capital investment to boost production
efficiency

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

3. Expand into new business domains• Open up new business areas that can create synergies• Develop new products leveraging technologies andvalue chains possessed by group companies• Construct a group system with a view to businessexpansion into the burgeoning Southeast AsianmarketEfforts to Address Social Issues

Relevant SDGs Provision of environmentally sound products

and technical services.

 Provision of labor saving products

Risks

Opportunities

A shrinking domestic construction market due to a
declining population

Expand into new business domains such as
overseas markets

Decline in the competitiveness of our existing
businesses

Supply competitive, high value-added products
and technologies

Some of Our Initiatives

Development of New Labor-saving Materials and Methods, and Creation of New
Business Domains
AIR SHOT ONE a dry spraying method that decreases the environmental burden and reduces dust
In April 2021, Taiheiyo Materials Corporation launched AIR SHOT
ONE as a new cross-section repair method. In addition to offering
basic features of dry spraying such as a thicker sprayed layer, longer
feed hoses and no need for mixing equipment, this method utilizes a
special nozzle to spray mortar to which an agent to reduce dust has
been added, thereby greatly reducing the generation of dust during
spraying work that has been a dry spraying issue. All ingredients otherthan water are contained in the dry mortar powder. Furthermore,
the use of polymer powder to enhance the properties of the mortarmeans that we have no longer any need to measure liquid polymer
and no waste container is generated. In addition, this mortar can beapplied using the plastering method, so it is possible to use it even insmall-scale work.

Spraying AIR SHOT ONE

Reducing Life Cycle Costs: the Hyper Road System
TAIHEIYO PRECAST CONCRETE INDUSTRY Co., Ltd. sells the Hyper
Road System, which inhibits pavement deterioration such as ruts andreduces the frequency of repair work. Commonly, 80 mm-thick paving
blocks are used for pavement for vehicles. This system applies 100
mm-thick blocks and special sand that makes it harder for fine particles
to be generated by friction between the joint sand and the paving
sand. This has boosted load transfer performance and at the sametime inhibited the decline in bearing capacity that is a consequence ofsand being washed out by water penetration. This means that a levelsurface can be maintained over a long period of time, even in areas
traveled by special large vehicles. This product has been applied forconstruction in container yards at a number of ports, including the Portof Osaka, and remains in good condition even after five years.

Container yard construction example (approx. 3,000 m2 area)• Develop labor-saving products and methods•S ecure stable transportation and construction capabilities• Seek to optimize our supply system by expanding
collaborations with OEMs etc.

3637Business Strategies

Research and Development
Developing Outstanding R&D Capabilities toContribute to Society and Sustainable Growth

Log
istic
sa
nd

s

Key Strategies for FY2022

ply
up

P

on
cti
u
d
ro

• Develop technologies aimed at achieving carbon neutrality• Refine infrastructure technologies that respond to changes in our
external environment and expand overseas• Develop recycling technologies that contribute to the building of
circular economies• Develop innovative materials, future-oriented technologies
and intellectual asset strategies

MineralResources
Business

Environmental
Business

1

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

2

Refine infrastructure technologies and expand overseas

3

Evolve recycling technologies• Cement: Quality, processes and cost reductions• Stabilizer/Insolubilizing agent: Enhance functionality andexpand applications• Concrete: Enhance functionality and expand applications

Use

en
rem
ocu
Raw material pr

CementBusiness

Construction
Materials
Business• Evolve combustion and dechlorination technologies• Coal ash and slag substitutes, alkali reduction• Resource complex initiatives

t

4

Reuse

Innovative materials• Functional materials• Resource-recycling calcium carbonate concrete

Research andDevelopment

5

Future-oriented technologies• Utilization of AI and the IoT to boost productivity and reduce labor needs• Integrated system to control kilns and estimate quality

Developing Key Technologies for Achieving Carbon Neutrality
Research and Development places an emphasis on
contributing to the resolution of various social issues,and on drafting and implementing R&D strategies tocontribute to the group’s sustainable growth.
In particular, we recognize that society is aiming forcarbon neutrality; accepting that demand and aiming
to establish innovative technologies that will be
implemented in society to achieve that is a top priority
challenge that will impact the future of the cement
industry. We therefore position it as a very important
growth strategy. We will also seek to further refine ourinfrastructure technologies so that we can maintainand develop “Taiheiyo quality” while responding
to the changes in various business environments,
and can supply high-quality products and advanced
solutions. Contributing to the creation of circular
economies is another important role we play, andfurther enhancing our technologies for utilizing
recycled resources is a key challenge. We also position
the following as key future-oriented challenges: theenhancement of innovative technologies that willlead to new generation of profits, the boosting ofproductivity via AI and the IoT, and the developmentof labor-saving technologies.
We aim to promote those five key strategies anddevelop outstanding R&D capabilities to contributeto society and sustainable growth. While doing so wewill also promote the training of global resources whowill play an active role in Japan and overseas, anddevelop organic collaborations and operations for ourorganization, so that our technological capabilities can
support the group’s aim of “becoming an outstanding
leading company.”

Takayoshi Okamura

Managing Executive Officer
Intellectual Property Department and Central Research Laboratory

Main FY2021 Initiatives and Achievements
1

2

Carbon neutrality
Calcium carbonate concrete

We have successfully developed basic
production technologies for calcium carbonate
concrete that is hardened using CO2, waterand used concrete. As a member of the NEDO
Moonshot Research & Development Program(project manager: Professor Takafumi Noguchi,
The University of Tokyo) we are responsible
for the development of materials. Goingforward, we aim to promote the establishmentof industrial production methods and create
innovative carbon-neutral construction
materials.

Refine infrastructure technologies
and expand overseas

Immobilization of Selenium Using
Microorganisms

Rock debris generated during tunnel
excavation sometimes contains hexavalentselenium (Se6+), which is water-soluble andoccasionally harmful. Taiheiyo Cement ismoving forward with the development of a newtechnology to immobilize selenium that will
reduce and remove harmfulness of hexavalentselenium (Se6+) using microorganisms thatexist in rock debris. If detoxification becomes
possible, it is expected to prevent ground watercontamination and make the rock debris a
recyclable resource that can be used as a material
for civil engineering works such as embankments.
Microorganism(illustration)

Rock debris
produced during
excavation

Reduction
Hexavalentselenium(Se6+)
Water-soluble

Metalloid
selenium(Se0)

Insoluble

2

Refine infrastructure technologies
and expand overseas
Wall survey system

This is a labor-saving technology for theinspection of external walls. The suspended
inspection robot traverses the external wall tocarry out a tapping test. This system also helps
to cut costs and contribute to operational safety
since it does not require the use of suspended
work platforms or scaffolding. We willcontribute to the creation of a safe and securesociety by promoting external wall diagnostic
check projects using this system.

5 cm
Sample of the calcium carbonate concrete underdevelopment

38

Selenium immobilization mechanism

Groundwater

Innovative materials
Nanolitia, cathode material for
lithium-ion batteries

Nanolitia is a cathode material for lithiumion batteries that does not use rare cobalt asa raw material. It is expected to offer better
thermostability and reliability than existing
cathode materials, which contain nickel andcobalt. A demonstration plant with annual
capacity of 100 tonnes is under construction
at Central Research Laboratory. It will becompleted and commence operation during
FY2022, and will move forward with action
aimed at commercialization.

1. Tappers strike the external
wall and the percussive
sounds are automaticallycollected
2. Unstable areas are
mappedExternal
wallIntellectual property strategy
The three missions of our intellectual property strategy are to create intellectual
assets that will underpin our businesses, supply valuable information via intellectual
property solution activities based around data analysis, and enhance the intellectual
property capabilities of the entire group.
In recent years we have been focusing in particular on activities involving intellectual
property solutions, and are working on IP Landscape, which performs panoramic analysis
and assessment combining perspectives such as intellectual property data and businessinformation. We collaborate with R&D and business divisions, and supply informationthat contributes to new R&D developments and new business creation via the analysis ofpatent information and market data.

Closer distance means greater similarity in technologies

Low
Prospective
application 1

Air flow

Prospective
application 2

Drive
motor
TapperData volume
High
Data density

Suspension wire

High
Low
Current
application

ThrustPrevents elution
Elution into ground water
Potential health hazard

4

Fan

Prospective
application 3

Air flowWall survey system diagram and in action

Electron micrograph of Nanolitia

Prospective
application 4

IP Landscape example

39

G

The Foundations of Our Growth

Governance

Back row

Front row

40

Yoshio Fujima

Outside Corporate Auditor

Yoshiko Koizumi
Outside Director

Our Directors and Corporate Auditors

Shigeru Matsushima
Corporate Auditor (Standing)Shinhachiro Emori
Outside Director

Masafumi Fushihara

Kunihiro Ando

Director and Senior Executive Officer

President and Representative Director

Masahiro Karino

Director and Senior Executive Officer

Shuji Fukuda

Chairman and Director

Tetsuya Ohashi

Director and Senior Executive Officer

Hideyuki Furikado
Outside Director

Yuuichi Kitabayashi
Vice President andRepresentative Director

Katsuhide Fukuhara
Corporate Auditor (Standing)

Wakako Mitani

Outside Corporate Auditor

41

The Foundations of Our Growth

Our Directors and Corporate Auditors

Directors
Shuji Fukuda

Masafumi Fushihara

Yoshiko Koizumi

Shinhachiro Emori

Apr. 1974
Jun. 1999

Apr. 1978
Apr. 2007

Apr. 1972
Jan. 1980

Apr. 1975

Chairman and Director
Career Summary

Apr. 2004
Apr. 2006
Apr. 2008

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

Experience and Knowledge

Joined Onoda Cement Co., Ltd.
General Manager, Accounting & Finance
Department of Taiheiyo Cement Corporation
General Manager, Accounting & Finance
Department and General Manager, Accounting& Finance Business Operation Center
General Manager, Hokuriku Branch
Executive Officer and General Manager, Human
Resources Department
General Manager, Personnel Business Operation
CenterExecutive Officer and General Manager, Human
Resources Department
Director, Managing Executive Officer
and General Manager, Human Resources
Department
Director and Managing Executive Officer
President and Representative Director
Chairman and Director (to present)

Since 2010 Mr. Shuji Fukuda has engaged in the management of the company as a director and,after 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 served
effectively as a director, striving to continuously increase the corporate value of the group, such as byidentifying key management issues and supervising business execution.

President and Representative Director
Career Summary

May 2009
Oct. 2010
Apr. 2012
Apr. 2015
Jun. 2015
Apr. 2016
Apr. 2017
Apr. 2018

Experience and Knowledge

Joined Onoda Cement Co., Ltd.
General Manager, Business Promotion
Department of Environmental BusinessCompany of Taiheiyo Cement Corporation
General Manager, Sales Department ofEnvironmental Business Company
General Manager, Environmental Business
Development Department
Executive Officer and General Manager,
Environmental Business Development
Department
Managing Executive Officer
Director and Managing Executive Officer
Director and Managing Executive Officer
Senior General Manager, Cement Business Division
Director and Senior Managing Executive Officer
Senior General Manager, Cement Business Division
President and Representative Director (topresent)

Outside Director
Career Summary

Jan. 2008
Apr. 2009
Jun. 2015

Jun. 2016
Sep. 2017

Experience and Knowledge

After working as counsel and partner at law firms, Ms. Yoshiko Koizumi was appointed as a directorof 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. 1978
May 2009

Apr. 1980
Apr. 2004

Vice President and Representative Director
Career Summary

Apr. 2011
Apr. 2013
Jun. 2013
Apr. 2016
Apr. 2017

Experience and Knowledge

Joined Nihon Cement Co., Ltd.
General Manager, Kamiiso Plant of Taiheiyo
Cement Corporation
Executive Officer and General Manager,
Production Department
Managing Executive Officer
Director and Managing Executive Officer
Director and Senior Managing Executive
Officer
Vice President and Representative Director(to present)

Apr. 1977
Jul. 2004

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.

Dec. 2013
Jun. 2014

Director and Senior Executive Officer
Career Summary

Apr. 2013
Apr. 2016
Jun. 2016
Apr. 2019

Joined Nihon Cement Co., Ltd.
General Manager, Legal Department of
Taiheiyo Cement Corporation
Executive Officer and General Manager, Legal
Department
Managing Executive Officer
Director and Managing Executive Officer
Director and Senior Executive Officer (topresent)

Experience and Knowledge

Jun. 2021

Experience and Knowledge

Apr. 1980
Apr. 2011

Apr. 1982
Oct. 2010
Apr. 2015

Apr. 2013
Apr. 2015
Apr. 2016
Jun. 2016
Apr. 2020

42

Joined Onoda Cement Co., Ltd.
General Manager, Ofunato Plant of Taiheiyo
Cement Corporation
Executive Officer and General Manager,
Oita Plant
Executive Officer and General Manager,
Mineral Resources Business Department
Managing Executive Officer
Director and Managing Executive Officer
Director and Senior Executive Officer (topresent)

Director and Senior Executive Officer
Career Summary

Apr. 2016
Apr. 2019
Jun. 2019
Jun. 2020
Apr. 2021
Jun. 2021

Joined Onoda Cement Co., Ltd.
President of Taiheiyo Cement U.S.A. Co., Ltd.
Senior General Manager of International
Business Division, Taiheiyo Cement Corporation
Executive Officer and Senior General Manager
of International Business Division
Managing Executive Officer
Director and Managing Executive Officer
Managing Executive Officer
Senior Managing Executive Officer

Experience and Knowledge

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. As the officer in charge ofthe mineral resources business and environmental business divisions, 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.

Since 2019, Mr. Tetsuya Ohashi has engaged in the management of the company as a director andwas appointed as a director and senior executive officer in June 2021. As the officer in charge ofgeneral affairs and corporate planning divisions, 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.

Joined the Ministry of Finance
Deputy Director-General of Financial Services
AgencyPresident, Policy Research Institute, Ministry of
Finance, Japan
Retired from Ministry of Finance
Senior Managing Director of Trust Companies
Association of Japan
Director at Taiheiyo Cement Corporation (topresent)

Katsuhide Fukuhara

Apr. 1979
May 2009

Apr. 1981
Apr. 2013

Corporate Auditor (Standing)
Career Summary

Experience and Knowledge

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

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 andSenior General Manager of Cement Business Division
Managing Executive Officer
Director and Managing Executive Officer
Director and Senior Managing Executive Officer
Director
Corporate Auditor (Standing) (to present)

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

Corporate Auditor (Standing)
Career Summary

Apr. 2015
Apr. 2017
Jun. 2017
Jun. 2020
Jun. 2021

Joined Onoda Cement Co., Ltd.
General Manager, Corporate Planning
Department of Taiheiyo Cement Corporation
Executive Officer and General Manager,
Corporate Planning Department
Managing Executive Officer
Director and Managing Executive Officer
Managing Executive Officer
Corporate Auditor (Standing) (to present)

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

Wakako Mitani

Yoshio Fujima

Apr. 2000

Nov. 1974

Outside Corporate Auditor
Career Summary

Director and Senior Executive Officer (topresent)

Experience and Knowledge

After serving as representative managing director of Tosoh Corporation and president andrepresentative director of Taiyo Vinyl Corporation, Mr. Shinhachiro Emori was appointed as directorof the company in June 2020. He possesses a wealth of experience, achievements and insight as acorporate manager. He 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 overall management.

Shigeru Matsushima

Apr. 2012

Tetsuya Ohashi

Experience and Knowledge

Corporate Auditors

Apr. 2011

Director and Senior Executive Officer
Career Summary

Jun. 2020

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

Since 2016, Mr. Masahiro Karino has engaged in the management of the company as a director andwas appointed as a director and senior executive officer in April 2019. As the officer in charge ofhuman resources and legal divisions, 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.

Kunihiro Ando

Jun. 2015

Joined Toyo Soda Manufacturing Co., Ltd.
(currently TOSOH CORPORATION)
Director of TOSOH CORPORATIONManaging Director of TOSOH CORPORATION
Representative Director and Managing
Executive Officer of TOSOH CORPORATION
President and Representative Director of
TAIYO VINYL CORPORATION
Director at Taiheiyo Cement Corporation (topresent)

Outside Director
Career Summary

Jul. 2010

Masahiro Karino

Jun. 2010
Jun. 2011
Jun. 2012

Hideyuki Furikado

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 possesses a wealth of managerial experience,achievements and management insights. He continuously strives to increase the corporate value ofthe group and significantly contributes to its development, while also identifying key management
issues and supervising business execution.

Yuuichi Kitabayashi

Registered as a lawyer (Daini Tokyo Bar Association)
Partner, Masuda and Ejiri Law Office (nowNishimura & Asahi)Counsel, Nishimura & Asahi
Partner, City-Yuwa Partners (to present)
Director at Taiheiyo Cement Corporation (topresent)
Outside Director, Dowa Holdings Co., Ltd.
(to present)
Outside Director, Sumitomo Bakelite Co., Ltd.
Outside Corporate Auditor, Nippon Koei Co.,
Ltd. (to present)

Outside Director
Career Summary

Jul. 2001
Apr. 2012
Feb. 2018

Outside Corporate Auditor
Career Summary

Registered as a lawyer (Daiichi Tokyo Bar
Association)
Joined TANABE & PARTNERS
Partner, TANABE & PARTNERS (Current
position)
Corporate Auditor at Taiheiyo Cement
Corporation (to present)

Mar. 1980
Sep. 1990
Aug. 1996
Jul. 2007
Jun. 2011
May 2012
May 2016
Jun. 2019

Joined Chuo Audit Corporation(now MISUZU Audit Corporation)
Registered as a certified public accountant
Employee, Chuo Shinko Audit Corporation (now
MISUZU Audit Corporation)
Representative Partner, Chuo Audit Corporation(now MISUZU Audit Corporation)
Retired from MISUZU Audit Corporation
Outside Auditor, JIEC Co., Ltd.
Outside Auditor, Prime Works Co., Ltd.
(now Neos Corporation)
Outside Director (Audit and Supervisory
Committee Member), JIEC Co., Ltd.
Corporate Auditor at Taiheiyo Cement Corporation (to present)

Experience and Knowledge

Experience and Knowledge

After working as a partner at a law firm Ms. Wakako Mitani was appointed as a corporate auditorof the company 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 bydirectors from an independent, objective and fair standpoint.

After serving as a representative partner of an auditing firm and an outside director and auditor ofoperating companies, Mr. Yoshio Fujima was appointed as a corporate auditor of the company inJune 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.

43

The Foundations of Our Growth

Messages from Outside Directors

Expectations of Further Dissemination ofInformation on Topics Suchas Trailblazing Initiatives on
Social Issues and Transparent
Governance Structures
Outside directors Yoshiko Koizumi, Shinhachiro Emori and Hideyuki Furikado spoke about theirrecommendations and expectations of our governance system and ESG management based on theirrespective experience in corporate legal affairs as a lawyer, in business management, and at the Ministryof Finance and the Financial Service Agency.

Business Will Be Driven Over the Next 100
Years by Sustainability Which Has Become
Part of the Company’s DNA

The Standards of Conduct (Casebook) is distributed to all Taiheiyo
Cement employees, and we are working consistently to fulfill thecommitment made in the 2015 edition to reduce greenhouse gas
emissions by 40-70% by 2050. This fiscal year is the first of the 23 MediumTerm Management Plan, which makes initiatives aimed at carbon neutrality
one of its key strategies. The commitment to a strategy of investing
100 billion yen over the next decade, which includes the three years
covered by the 23 Medium-Term Management Plan, clearly demonstrates
a corporate stance ahead of global trends. The decision to establish
a project team under the direct control of the vice president to drive
this strategy shows how determined the company is to achieve carbon
neutrality. I highly rate Taiheiyo Cement’s corporate activities, which are
based on a sense of responsibility and awareness of being a leading
company in Japan’s cement business, and intend to make such excellent
initiatives more widely known amongst stakeholders and in society atlarge. With regard to diversity, the company is moving forward withmedium and long-term plans to develop excellent human resources at its
overseas bases. In my opinion, slightly more progressive strategies for theutilization of human resources are required for the company to develop
globally, such as the promotion to executive positions of personnel fromoverseas group companies. The group is targeting sustainable growthand is making systematic investments aimed at developing mines andquarries and strengthening plant facilities with the next 100 years in view. I
can sense that sustainability has become so firmly rooted in the company
that it should be considered part of its DNA. I will do my best to contributeto TCC's strategy for sustainable growth by using my experience as aninternational lawyer to offer beneficial recommendations with regard to
overcoming and providing solutions to any obstacles that may arise in thiscorporate culture as the company aims for further globalization.

Yoshiko Koizumi

44Outside Director

Strengthen Governance via Constructive Dialog with Group Companies
The company has maximized the technologies it has cultivated in its cement
production, created a recycling-based business model, and established its
profitability. I applaud how, in addition to that, the company has committed to apolicy of investing a total of 300 billion yen over the next decade, which includes
the three years covered by the 23 Medium-Term Management Plan. This willconsist of 100 billion yen investments in, respectively, the achievement of carbon
neutrality, the strengthening of plant facilities, and the development of minesand quarries. I also applaud how it has made clear to stakeholders its corporate
stance of aiming to become an outstanding leading company, and revealed thespecifics of the group’s sustainable management policies. Governance systems
are at the heart of sustainable management, and I can see that robust and detailed
structures and organizations have been constructed that are based on expertiseamassed over more than a century of corporate activities. However, the Taiheiyo
Cement Group is composed of many subsidiaries in Japan and overseas, and I feelthat there are more opportunities to improve cooperation between the Internal
Auditing Department at Headquarters and each business division overseeing
group companies with regard to the governance system within the group andthe thorough enforcement of compliance. Although I worked for a chemical
manufacturer, where the business structure was different from that of a cement
manufacturer and in an industry which expected different functions of groupcompanies, I do have experience as a representative of both the head company
and its group companies. Based on that experience, I believe that group unity whichleads to further growth can be created not only by regular audits and group roundtable discussions, but also by opportunities for constructive discussions where the
top management at headquarters and group companies can express themselves
freely about the management policies and various business challenges of eachgroup company. I will make the most of the experience I have obtained so far tooffer recommendations aimed at strengthening governance in the management of
the group.

Shinhachiro Emori

Outside Director

Improve Information Disclosure to Various Stakeholders
The Taiheiyo Cement Group is the leading company in the Japanese cement
industry, with a history stretching back more than 100 years. I can see the strong
management determination to boost transparency and governance displayedin such steps as the thorough provision of information in advance of its Board of
Directors meetings so that outside directors can fully leverage their individual
expertise, and can sense how that determination pervades company-wide
activities. It is also a global enterprise which has eight production sites in the
Pacific Rim region and where employees of many different nationalities flourish,
and I can sense the strong interest it arouses in domestic and overseas investors
etc. In recent years, stakeholders such as investors have been paying attention to
not just financial data but also non-financial data such as details about initiatives
such as ESG and SDGs that are linked with a company’s sustainable growth,and about the results of such initiatives. The company is engaged in ambitious
corporate activities in this field, such as initiatives aimed at carbon neutrality, and I
think it should strive to disclose more information based on those activities.
So far, I have designed and enforced various systems mainly in monetary
policy. Recently there has been engagement in constructive dialogue between
business enterprises and shareholders based on the Stewardship Code andCorporate Governance Code. I was deeply involved in the policy making aimed
at creating such connections and dialogue. Going forward, I hope to make such
expertise fully manifest in the business world and make recommendations aimed
at more appropriate information disclosure. I intend also to boost the medium
and long-term corporate value of the company by leveraging my experience inestablishing governance-related legal systems for financial institutions and thelike, and strengthening the company’s group governance.

Hideyuki Furikado

Outside Director

45

The Foundations of Our Growth

CSR Management
Corporate Framework for CSR

To become an enterprisegroup that provides a senseof safety and security tosocieties in the Pacific Rim bydemonstrating the group’s
overall capabilities.

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

Strengthen Management
Foundations

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.
Based on these two sets of qualitative targets, we
aim to achieve our Future Vision and Direction.

Future Vision and
Direction(The mid-2020s)

CSR
Objectives for2025

Business
Principles

Taiheiyo
CementGroup

Business Strategies

Board of Directors
Core subjects of social
responsibility in ISO
26000

Chair: President

CSR Management Committee Secretariat: General Affairs• Organizational Governance• Fair Business Practices• Human Rights• Labor Practices

CSR Training Programs

We provide CSR education through training
programs for each job level, including sessions for
newly hired employees, follow-up courses for newly
hired employees, career development courses,
and training for newly appointed managers. Eachspecialized committee provides the relevant training
programs for education on specific issues, including
compliance and human rights. We also conduct
executive level CSR training once a year, including forgroup companies. FY2021 was the first year since ourswitch from the CSR Report to the Integrated Report,so we explained the main points in our in-housenewsletter that goes out to all our employees in orderto deepen their understanding of the Integrated
Report.
 Executive-level CSR Training (FY2021)

Department CSR Group• Human Rights, Environmental and Consumer Issues• Community Involvement and Development

Internal Auditing Department❶ Based on our Mission and Business Principles, thecompany will clarify the ideal form of CSR management
to be pursued and strive to advance operations basedon CSR.
❷ Promoting a corporate culture that places great
importance on compliance, we aspire for all directors
and all employees to always make the most appropriate
autonomous decisions.
❸ We will manage the company in the awareness that oursocial mission includes protecting the environment,
defending human rights and contributing tocommunities.
❹ We will proactively engage with key CSR issues andundertake the most appropriate prioritization andresource allocation.
❺ We will practice appropriate information disclosure andcommunication with stakeholders, based on the state of
our CSR management, and build relationships of trust.
❻ We will treat the promotion of CSR management as agroup-wide activity.

Audit

Ratio of female recruits: At least 30%
	Ratio of female employees: At least10%	Ratio of newly appointed female
managers: At least 10%

Specialized committees

III Workplace diversity

Stakeholder
Communication Committee

Basic Policy for Promoting CSR Management

Environmental
Management Committee	Reduce specific net CO2 emissions
by at least 10% from fiscal 2021 levels
by fiscal 2025.

Quality Assurance & Product
Liability Committee

II Reduction of greenhouse gas emissions

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 is to screen CSR
action plans and other important matters, and review
their progress. Reporting to this committee are sevenspecialized committees for individual CSR subjects,
each chaired by the director responsible for thatarea. The department most closely associated withany given issue acts as the secretariat for the related
committee.

Company-wide Health &Safety Committee

Zero fatalities

We promote CSR management in accordancewith our CSR guidelines, which specify actions thatare essential for realizing the Mission of the Taiheiyo
Cement Group, and implementing our Business
Principles. The guidelines steer the company as we
conduct activities in and outside of our businesses
that fulfill our social responsibility while pursuingsustainable growth for both the company and society
as a whole. Moreover, they lay down basic policies forpromoting CSR management.

The System to Promote CSR Management

Human Rights & Labor
Practices Committee

I Prevention of accidents

Basic Policy for Promoting CSRManagement

Information Security
Committee

CSR Objectives for 2025

Risk Management &Compliance Committee

23 Medium-Term
Management
Plan

46

Mission of the
Taiheiyo Cement
Group

Date

Companies in
AttendanceNovember
2020

82
Combinedwith remoteattendance

Themes• Anti-power harassment laws, andrecent forms of harassment• Topics related to the prevention ofirregularities and misconduct

All business sites
Group companies

47

The Foundations of Our Growth

Key CSR Issues (Materiality)
Steps in Their Review

Prioritization

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

Step 3

Verification

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

Step 4High materiality

Identification of issues

We identified issues while referring to internationalguidelines and stakeholder feedback in the context ofour business.

Step 2

=Material Aspects

Impact on stakeholder evaluations
and decision making

Step 1

Stakeholder Engagement

Preventing
environmental
pollution
Conserving andrestoring biodiversity
Offering environmentallysound products andservices
Participating in andrespecting local
communities

We review the issues every fiscal year for a publishedreport.

Improving energy andresource productivity(promoting resource
recycling)
Diversity and equal
opportunity
Maintaining productquality and safety andensuring stable supply

Shareholders

Environmental (E)Material aspects

EconomicCreating and distributing
economic value

Materiality of the impact of the Taiheiyo Cement Groupon the economy, the environment and society

Improving energy andresource productivity(promoting resource
recycling)
Mitigating climate change
Environmental

Preventing environmental
pollution
Conserving and restoring
biodiversity
Provision ofenvironmentally soundproducts and services
Occupational health andsafety・Conduct business activities in accordance with our 20 Medium-Term Management Plan (FY2019 toFY2021)SocialMaintaining productquality and safety,
and ensuring stable supply
Participating in andrespecting local
communities

Respect for human rights

48

Shareholders, investors
Financial institutions

Cement sales agents
Ready-mixed concrete
companies
Construction companies
Orderers
Suppliers
Waste disposal companies

The Taiheiyo Cement Group
Contractors

Local communities in which
we do business
Local governments
NGOs and NPOs

M
 easures to mitigate

P rovision of environmentalP romotion ofR eduction ofclimate change, andinformation disclosureE nhancement ofenvironmentally soundmanagement
R eduction of greenhousegas emissions

Social (S)information disclosureR ejection of antisocial
forcesA ppropriate allocation ofcapitalGovernance (G)

value
A
 ppropriate redistributionof profitsT ransparent management

products
C ontributions to waste
treatment

・Environmental Management Policy
・WBCSD Charter
・GCCA Sustainability Charter
System・Establish the Environmental Management Committee・All plants and branches, Headquarters and the Central Research Laboratory operate in compliancewith ISO 14001
Evaluation ・Framework for Our Long-term Vision of Greenhouse Gas Emissions Reduction toward 2050
・CSR Objectives for 2025
・G
 roup environmental targets and KPIs based on the WBCSD Charter and the GCCA Sustainability
Charter・Monitoring and review by the Environmental Management Committee
PolicySystem・Occupational Health and Safety Policy
・Company-wide Health & Safety Committee
・OSHMS in operation at all plants and mines
Evaluation ・CSR Objectives for 2025
・Monitoring of data on health and safety including information from contractors
・Basic Policy Concerning the Development of Human Resources
・The Basic Policy Concerning Diversity
・Development of a long-term human resource development system, a fair evaluation system andcomfortable working environments
Evaluation ・CSR Objectives for 2025
・Quantitative targets for diversity
・Monitoring of various kinds of personnel data
PolicySystem・Quality Policy
・A unified ISO 9001-based management system for product development, design and production
・Taiheiyo Brand Cement/Concrete (TBC) activities
Evaluation ・Analysis of suggestions and inquiries related to quality
・Regular disclosure of safety-related data about our products on our website
Policy・Identification of communication with communities as a material issue in the Mission of the Taiheiyo
Cement Group and the Basic Policy of CSR
System・Promotion of company-wide activities by the Stakeholder Communication Committee
Evaluation ・Management of progress and sharing of information under the company-wide action plan
PolicySystem・Basic Policy Concerning Human Rights and Labor Practices
・Promotion of company-wide activities by the Human Rights & Labor Practices Committee・Contact points for counseling
Evaluation ・M anagement of progress and sharing of information under the company-wide action plan, andfacilitating negotiations and the exchange of opinions at labor management consultations

environmentally soundmanagement
E nvironmental education

environmental impacts

M easures to mitigate

global warming

C onservation of

biodiversity

S table supply of products

R espect for human rights

C ontributions to thequality and safety
G reater customer
satisfaction

and diversity
H ealth and safetyassurance
S kills and careerdevelopment

C omplianceG ood work environmentC ompliancetransactions
R espect for human rights

ordinances, and systems
H uman resource
development and fairevaluations

M aintenance of product I mpartial business

PolicyPolicySystemWorkplace diversity andequal opportunity

Local communities andlocal governments

E nhancement of corporate

Management approach
PolicyEmployees

T imely and appropriate

High materiality

The Taiheiyo Cement Group’s Approaches
Category

Business partners

Keystakeholders

Respect forhuman rights

Materiality

Review

Creating and distributing
economic value
Mitigating climatechangeOccupational healthand safety

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.

A dherence to laws,

building of social
infrastructureJ ob creation
C ontributions to disaster
preparedness, and torestoration work after
disaster damage
T imely and appropriate

information disclosure

Collaboration with External Organizations
Global Cement and Concrete Association (GCCA)

The Global Cement and Concrete Association (GCCA) was established in 2018. As a founding member,
Taiheiyo Cement is the sole Japanese cement and concrete manufacturer participating in its activities. The
GCCA inherited the activities of the Cement Sustainability Initiative (CSI), a sector project of the World
Business Council for Sustainable Development (WBCSD), in January 2019 and collaborates with the WBCSD
in initiatives aimed at sustainable development. The GCCA has established six working groups to develop
various guidelines on such themes as responses to climate change, a long-term roadmap for CO2 reduction, low-carbon
concrete, biodiversity, and health and safety. We are working to build a sustainable society via such GCAA initiatives, forexample by setting and disclosing CO2 emission reduction targets for each member company.
In addition, the GCCA launched a research network called Innovandi in 2020 and is expanding
research worldwide into sustainable concrete and cement, which are characterized by low CO2,
as well as into the separation and recovery of CO2. We have participated in Innovandi since its
establishment. We recognize the challenges that the GCCA and Innovandi are working on as oneof our management issues and strive to engage with them.

The World Business Council for Sustainable Development (WBCSD)

As a core member of the WBCSD Cement Sustainability Initiative (CSI) since 2000 we haveengaged in international activities for sustainable development. Even after the activities of CSI
were taken over by the GCCA, we continue to work as a WBCSD member and exchange the latest
information on ESG with member companies from a broader perspective.
In addition, each year we enroll one employee in the WBCSD Leadership Program. We have sent eight employees so far,and this training program is helping us to develop global human resources.

Participation in the Industrial Federation for Human Rights, Tokyo

Taiheiyo Cement is a participant 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 of July 2020), most of which
are headquartered in Tokyo. Under its basic philosophy of voluntary management and full participation, the federation
endeavors to resolve the “Dowa issue” (discrimination against a caste-like minority of ethnic Japanese) and other humanrights issues from a company perspective.

49

The Foundations of Our Growth

Corporate GovernanceCorporate GovernanceTaiheiyo Cement Group Management
Organization

In keeping with the group’s mission, we establishedthe Basic Policy on Corporate Governance with the aimof meeting the expectations of all our stakeholders,
including shareholders, and helping to achievesustainable growth while maximizing our corporate
value over the medium to long term. Under this policy
we also work toward further enhancing our corporate
governance.

Overview of Our Directors and Corporate Auditors
Expertise and experience GRI102-18, 19, 22, 23, 24, 28, 29, 30, 33, 35, 36, 37

Corporate Governance System

Our management structure is based upon the Boardof Directors and Board of Auditors. However, theNomination and Compensation Advisory Committee
was established on March 31, 2021 as an advisory
body of the Board of Directors on decisions regarding
the nomination and remuneration of executives. We
have also introduced an executive officer system andare endeavoring to separate management decisionmaking and monitoring/supervisory functions frombusiness execution. Our Corporate Auditor’s Officeprovides comprehensive support for corporate
auditors in the performance their duties. We have set
up an internal control system in the Internal Auditing
Department and, by means of internal audits, strive toensure that operations are properly executed in thecompany and group companies.
In addition, the CSR Management Committee wasestablished to strengthen our corporate governance,
for example by improving our business activities fromthe perspective of CSR.

Name

Shuji Fukuda

Director
Chairman

Masafumi Fushihara

Appointment/removal from office

Audit

Appointment/
removal from office

Board of Auditors

Cooperation

Accounting Auditor

Assistance







Representative
Director
President











Yuuichi Kitabayashi

Representative
Director
Vice President







Masahiro Karino

Director
Senior Executive
OfficerKunihiro Ando

Director
Senior Executive
OfficerTetsuya Ohashi

Director
Senior Executive
Officer

Yoshiko Koizumi

Director(Management decision-making andsupervision)

Shinhachiro Emori

Director

Hideyuki Furikado

Director

Consultation
Findings

Appointment/
removal from officeNomination andCompensation Advisory
Committee

Report

CSR Management
Committee

Managing Executive Officer

Shigeru Matsushima

Corporate Auditor(Standing)

Katsuhide Fukuhara

Corporate Auditor(Standing)

Wakako Mitani

Corporate Auditor

Yoshio Fujima

Corporate Auditor

Executive Committee(Review of importantmatters)

Final decision/
instruction/supervision

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

50

Audit

ReportSelection/removal/
supervision

Representative Director















Audit

Internal Auditing Department

For decision-making andbusiness execution tasks
requiring high levels of
expertise, we receive advice
from consulting law firms,
management consultants andother experts.













































Corporate Auditor’s Office

Board of Directors

Legal
GlobalRiskmanagement business

Appointment/
removal from officeFinance
Accounting

Corporate Governance System
General Meeting of Stockholders

Position

Nomination
andProduction
Outside Compensation
Corporate Technologies
Sales
officermanagement
Marketing
Advisory
Research
Committee(Chairperson)









51

The Foundations of Our Growth

Corporate Governance

No. of people etc.
Organizational structure

Company with a Board
of Auditors

Chairman of the board

Chairman
9 (1)
3 (1)
3 (1)

Tenure of a director

1 yearExecutive officer system

Yes

No. of corporate auditors (No. of female
corporate auditors)
No. of outside officers included in thatfigureNo. of independent officers includedin that figure

4 (1)
2 (1)
2 (1)

 Major Meetings Held
No. of times held

Board of Directors

14

100%

Board of Auditors

13

100%

Executive
Committee

23-

Appointment of Board Members
Nomination and Appointment of Prospective
Directors

The president proposes prospective directors andoutside directors to the Board of Directors, including
outside directors, in accordance with the Basic Policy
on Corporate Governance. After deliberations anddecisions by the Board of Directors, candidates are

52

Prospective outside officers must satisfy thecompany’s Independence Criteria for Outside
Officers and be capable of supervising our directors
and management from an independent, external
standpoint, and of providing proper and appropriate
advice based on their experience and insights fromcareers in professions such as lawyer, corporate
manager, certified public accountant and government
official.
Please see our website for more information about
Independence Criteria for Outside Officers

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

About Us  Corporate Governance

Board Member Remuneration
Determining Board Member Remuneration

Presence of outside
officers

Meeting

A Nomination and Compensation Advisory
Committee is established to determine board member
remuneration. The committee is chaired by an outside
director and has a majority of outside directors. The
committee deliberates and reports its findings to theBoard of Directors, which respects those findings.
The decision is then entrusted to the representative
director, within the scope decided at the General
Meeting of Shareholders and determined by ourcompany regulations.
The remuneration system for directors (excluding
outside directors) consists of fixed compensation,
share-based compensation and performance-based
compensation, while the remuneration system
for the outside directors consists solely of fixedcompensation. The remuneration system for auditors
also consists solely of fixed compensation.
• Fixed compensation is set according to position.

domestic group companies in FY2021. Matters inneed of improvement were identified, and advice andrecommendations are being given.

Annual Remuneration of Board Members The 11 Principles in the Corporate Governance
Code Requiring Disclosure (Prior to revisions to the
Corporate Governance Code)Remuneration for directors was decided at theGeneral Meeting of Shareholders on June 29, 2021.
After the said meeting, there are nine directors (ofwhom three are outside directors), for whose annual
remuneration there is a maximum of 1.2 billion yen(of which 100 million yen is for outside directors).
Included in that is a maximum annual sum of 200
million yen (200 thousand shares) as restrictedtransfer share-based remuneration.
Remuneration for corporate auditors was decided
at the General Meeting of Shareholders on June 29,
2020. After the said meeting, there are four corporate
auditors, for whose monthly remuneration there is a
maximum of 13 million yen.

Compliance with Japan’s Corporate
Governance CodeThe table below show where we disclose
information regarding the principles in the Corporate
Governance Code that require disclosure.

Where disclosed
Principle

Principle 1.4

Cross-shareholdings

Article 23

Principle 1.7

Related party transactions

Article 24

Principle 2.6

Roles of corporate pension funds asasset owners
Company objectives (e.g., ourmission), management strategies,
management plans

Principle 3.1
Full disclosure Annual Remuneration of Board Members (FY2021)
Category

No. of board
members
remunerated

Amount of
remuneration paid
(Million yen)

Basic concepts and policies on
corporate governancePolicies and procedures indetermining the remuneration ofsenior management and directors

Article 16

Policies and procedures on theappointment of senior management,
and nomination of prospective
directors and corporate auditors

Article 10

Board of Directors’ decisions andscope of matters delegated to
management

Article 3

Article 6
Article 13

Director

15

552

Supplementary
Principle
4.1.1

Corporate Auditor

472

Principle 4.9 *4

Independence criteria for outside
directors

Article 4

Sub-total

19624

Supplementary
Principle
4.11.1

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

Article 4

Supplementary
Principle
4.11.2

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

Supplementary
Principle
4.11.3

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

Article 20

Supplementary
Principle
4.14.2Training policy for directors andcorporate auditors

Article 19

Principle 5.1

Policy for constructive dialog withshareholders

Article 25

The above count of board members and corporate auditors who received
remuneration includes eight board directors (including one outside director)
who retired or resigned at the conclusion of the 22nd Ordinary General Meeting of Shareholders held on June 26, 2020.

Internal Control System
 GRI102-30

We follow the Basic Policy for Building an Internal
Control System to ensure suitable and efficient
operations at the company and group companies.
Our basic approach is to improve and strengthen
systems that are currently in operation, and to review
and reappraise essential matters. In accordance withthis policy, and with the aim of establishing systems
that ensure suitable operations at group companies,
we are running training and awareness campaigns
about Revisions to Our Internal Audit Regulations
and Internal Audit Detailed Regulations (November2020) and our Audit Manual for Auditors Dispatchedto Affiliated Companies. Audits were carried out
at four Taiheiyo Cement business sites and fifteen

Reports*3

After gaining the approval of the Board of Auditors
the president proposes to the Board of Directors
prospective corporate auditors endowed with suitable
experience and skills, and with adequate expertisein financial affairs, accounting and legal affairs. After
deliberations and decisions by the Board of Directors,
candidates are presented to the General Meeting of
Shareholders, whose vote decides their appointment.

Nomination and Appointment of Prospective
Outside Officers

 Outline of Our Governance System (As of June 29,2021)

No. of directors (No. of female directors)
No. of outside directors included inthat figure
No. of independent directors includedin that figure

Nomination and Appointment of Prospective
Corporate Auditors• Performance-based compensation is calculated bymultiplying profit attributable to owners of parent
company shares for the fiscal year under review
by 1% (up to 400 million yen) and a coefficientaccording to position.
• Share-based compensation is calculated according
to position and issued yearly in the form of shareoptions with restrictions on transfer. In principle, therestrictions on transfer are rescinded on the day the
director retires.

Fundamental
Policies*2

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 employ a self-evaluation system in which all
directors and corporate auditors fill out a questionnaire.
The chairman of the board and outside directors analyze
and assess the results of the questionnaire and report
the details to the Board of Directors. Future challenges
and measures are then discussed and confirmed.
We have made improvements to the structure andoperations of the Board of Directors on the basis of theresults, and the evaluation has deemed that the overall
effectiveness of our Board of Directors is being ensured.

presented to the General Meeting of Shareholders,
whose vote decides their appointment. The
deliberations of the Board of Directors respect theresults of the discussions and findings of the Nomination
and Compensation Advisory Committee.

Website*1

Evaluating the Effectiveness of the Boardof Directors



Article 8
Article 15*1 Our corporate website*2 Our Basic Policy on Corporate Governance*3 Our Corporate Governance Report*4 In addition to the above three methods of disclosure, we disclose information in our
securities reports and materials for our general shareholders’ meeting.

Please see our website for the our Basic Policy
on Corporate Governance and our Corporate
Governance Report.

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

About Us  Corporate Governance

53

The Foundations of Our Growth

Risk Management and Compliance

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 awide range of risks associated with our businessactivities.
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 builda system for immediately detecting new risks
arising from changes in our business environment
and for quickly and appropriately dealing withrisks at the group level.

Basic Compliance Policy

Under our Business Principles we pledge that we will
act in strict compliance with the law and in accordancewith social mores. Fully aware that compliance is thefoundation of CSR management, we published the
Basic Compliance Policy and simultaneously createdcompliance rules in March 2005. We do not limit
our definition of compliance to legal compliance;
our definition includes compliance with the social
mores from which our laws originate, the mission
and business principles of our group, and internal
regulations.

54

Please see our website for more information about
our Standards of Conduct (Casebook).

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

CSR-ESG Initiatives  Risk Management and Compliance Risk Management and Compliance Promotion Activities
Please see our website for more information aboutrisk management and compliance.

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

CSR-ESG Initiatives  Risk Management and Compliance

For more information

The Anti-Bribery Policy

Secretariat:
General Affairs
Department

Group companies

Officers responsible for risk
management and compliance
Risk management andcompliance promoters

Officers responsible forrisk management andcompliance
Risk management andcompliance promoters(Employees)(Employees)

P.86

Our president has ultimate responsibility for risk
management and compliance promotion. The officer
in charge of both areas (officer in charge of the General
Affairs Department) is appointed by the president
to preside over and run the Risk Management &Compliance Committee and systematically promoteorganized activities.
The committee plays a core role in our risk
management and compliance promotion for theentire group. It deploys the policy, identifies, evaluatesand specifies company-wide risks, implements risk
management activities based on PDCA cycles andpromotes compliance. Moreover, it studies andproposes the creation and revision of rules for risk
management and compliance, and provides instructions
for advancing the awareness and education of
employees. Under the guidance of this committee,

President
Corporate auditors

ReportInstruct
ReportReportInstructGeneral Affairs Department

ReportInternal hotline

Whistleblower

HotlineIdentify and evaluate risks* Subject to risk management: 103 group companies (as of March 31, 2021)

Whistleblower Program

Detect Results* of the Whistleblower Program (FY2021)

Annual action plans for risk management
Headquarters, business sites(including research centers),
plants, branches

Officer in charge of General Affairs Department

Chair: Officer in charge (of General Affairs
Department)
Members: Managers at Headquarters andbusiness sites

Evaluation system(Correction system)

External hotline

Risk Management &Compliance Committee

Protect

Officer in charge: Officer in charge of General Affairs Department

 Whistleblower Program
Illegal actions

Ultimate responsibility: President

Risk management practices and education

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

 Risk Management and Compliance Promotion System

Program Regulations so whistleblowers using the
program are not subject to unfavorable treatment.

Follow-up survey

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 to be a foundation for
reducing management uncertainties and achieving
management objectives. Based on our basic risk
management policy, we manage risks that make theachievement of management goals uncertain, suchas social change, changes in the global environment,
natural disasters, accidents and scandals. In addition,
we have established risk management regulations toincorporate the risk management policy into specificrisk management activities. Our risk management
regulations include responses to emergencies.

 Compliance with our Mission, Business Principles
and social norms
 Maintaining internal systems and rules andensuring broad-based awareness of them Cooperation with all group companies andpromotion of educational and enlightenment
activities Establishing appropriate responses and policies
for when problems occur Timely and appropriate disclosure andcommunication of necessary information
 Compliance with international standards andrules, and respect for local cultures and customs
 Rejection of illegal and unwarranted demands
from antisocial forces or organizations

Report on status of risk countermeasures

Basic Risk Management Policy and Regulations

each business site and group company has an officer
responsible for risk management and compliance, and arisk management and compliance promoter, who carryout specific duties. We held four Risk Management &Compliance Committee meetings in FY2021.

(Whistleblower Program)

 GRI102-16

Basic Compliance Policy (Summary)(Whistleblower Program)

Basic Risk Management and Compliance
Policies

Relevant SDGs

Reports and requests are handled properly inaccordance with normal company procedures. We
have also set up whistleblower hotlines to receive
reports directly without the need for the usual company
procedures. Whistleblowers have the option of either
disclosing their identity, or reporting anonymously to
mitigate any potential psychological constraints. We
have whistleblower hotlines both internally (at the CSRGroup of our General Affairs Department) and externally(at a law firm). Our internal hotline is in a dedicated,
locked room equipped with dedicated phone andfax lines, as well as a computer with a dedicatedaddress, in order to safeguard the privacy of thosesubmitting reports. Our external hotline is also available
to all employees of group companies in an effort tostrengthen group governance, improve program
effectiveness and reduce the burden on individualcompanies. In addition, we created the Whistleblower

Reports

Internal (CSR Group, General Affairs
Department)

7

External (Kajitani Law Offices)0* Cases that should be regarded as reports according to the Whistleblower
Program Regulations.

Risk Management and Compliance
Promotion Activities
 GRI102-11, 17, 201-2, 205-2

Identifying, Evaluating and Specifying Companywide Risks

In FY2020 we decided to identify the impact ofanticipated changes in social and environmental
conditions over the next ten years on uncertainties ingroup management, and then formulate measures toavoid and reduce those uncertainties.
We referred to sources such as the World Economic
Forum and WBCSD guidance on the integration ofsustainability and enterprise risk management forrisk data, and identified and evaluated risks. We also
consulted risk management experts.
For more information

Identification of Risks and Opportunities

P.20

Announcement of Support for the
Recommendations of the TCFD, and theResults of Our Scenario Analysis
Please see our website for more information about
the TCFD and mitigating climate change.

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

CSR-ESG Initiatives  Risk Management and Compliance Risk Management and Compliance Promotion Activities

55

The Foundations of Our Growth

Risk Management and Compliance

Measures to Reduce the Impact of Risks

Based on evaluations of identified company-widerisks, our Risk Management & Compliance Committee
takes the lead in specifying those to be addressed
every year and implementing activities to reduce risk
impact through PDCA cycles. The challenges addressedin FY2021 were (1) the establishment of a system toprevent scandals such as accounting irregularities, and(2) the revision of compliance-related rules.

Examples of Overseas Risk Countermeasures

We have created and regularly revise the Riot/Terrorism
Response Manual. In addition, with regard to high-riskcountries to which our employees are dispatched,
we clearly state the procedure for deciding on local
evacuations, have created a tool for evaluating the
emergency evacuation level according to changes in local
situations, and provide training using the tool. We also list
and secure supplies (food, clothes, hygiene supplies, andmedicines), as well as cash and other resources needed, inthe event of evacuation or an emergency at our overseas
business sites.

Emergency Task Force

If an 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 considers theseverity of the event and determines if an emergency
Explosion at the Saitama Plant
On April 26, 2021 at 21:58, there was an explosion at
the on-site power generation facility located on the northside of the Saitama Plant. We apologize profoundly for thetrouble and anxiety we caused to the local residents, ourcustomers, related companies, the authorities concerned,
and many others.
It has been confirmed that debris flew beyond the plant
perimeter, vehicles caught fire, buildings and vehicles weredamaged and dirtied, and flying debris caused damage
to farmland. People who were in a nearby parking lot havereported health issues, but there were no injuries to otherlocal residents or other people.
We are dealing in good faith with the damage etc.
working on implementing countermeasures to preventa reccurance of the accident. There was no damage toplant facilities other than the on-site power generator and,after safety checks, cement production and shipments
continued as normal, as did the treatment of municipal
waste (combustible waste) entrusted to us by Hidaka, thecity where the plant is located.
In addition, an accident investigation committee,
including external experts, was established on June 1. We
are working with the committee to investigate the causes of
the accident based on an objective survey, and to formulate
measures to prevent a recurrence.

56

task force should be established or if the response to
the event can be delegated to the site management.
Appropriate action is then taken by the emergency
task force or local management.
13 such events were reported in FY2021. Important
information, including how the situation is handled, isreviewed by the CSR Management Committee.
As preparation for responding to disasters andaccidents, we also conducted Shake Out earthquake
drills at each business site, and the general manager of
the General Affairs Department attended an externalcourse while exploring the question of providing
executives with training on how to deal with the mass
media. We also provided training for plant staff sothey would understand how to appropriately handle
complaints if an accident occurs.

Response to the Spread of the Novel Coronavirus(COVID-19)

We and our group companies prioritized thesafety of our customers, business partners, the local
community and employees of our business sites as
COVID-19 infections spread. The emergency task
force, headed by the president, implemented various
measures and strove to ensure a stable supply of
cement and mineral resources products that are
essential for social infrastructure.
The Main Measures to Prevent the Spread of Infections• Strongly encourage telecommuting by setting
workplace attendance targets and publishing theactual attendance figures in-house and outside thecompany.
• Limit close contact between employees and prevent
clusters from developing.
• Limit or completely ban get-togethers andoccasions where people eat together.
• Utilize web conferencing and limit or completely ban
business trips and meetings.
• Evacuate expatriate employees if so warranted by
local conditions such as the spread of infections andthe state of the medical care system.
• Provide workplace inoculations for Taiheiyo Cement
and group company employees who work at the
Headquarters or Central Research Laboratory, andfor Taiheiyo Cement employees who work in thevicinity of Tokyo.
Going forward, the pandemic is expected to havea long-term impact on the economy and the businessenvironment. However, Taiheiyo Cement and ourgroup companies will continue to boost production
while further promoting flexible work arrangement
reforms, and to strive for business continuation evenduring states of emergency.

Risk Management and Compliance Promotion
Training

We provide risk management and compliancetraining for managers and promoters working at thecompany’s business sites and group companies toensure effective risk management and compliance.
In FY2021, we invited outside lecturers to give talks
to the managers at our group companies. Held in
November, “Aiming for Harassment-free Workplaces:
The Latest Legislation and Corporate Responses”
and “Preventing Irregularities and Scandals at Group
Companies” were attended by 82 companies,
including those who participated remotely. A training
program for the promoters was postponed due to the
COVID-19 pandemic.

creation of our group’s compliance regime.
These roundtables were postponed due to theimpact of COVID-19 in FY2021, but the table below
shows those held in FY2019 and FY2020. We plan tohold them in an appropriate form in FY2022, basedon the COVID-19 situation and other considerations.
 Previous Legal Roundtables for Group Companies
No.
27th

2018
July

28th

2018
November

29th

2019
July

Compliance Training

In order to fulfill our mission and uphold ourbusiness principles, we formulated the Standards ofConduct to guide all our officers and employees in
the performance of their daily duties. The standards
consist of 35 items in 6 categories that draw upon
Taiheiyo Cement’s policies, regulations and president’s
messages delivered within and outside the company.
We have created and distributed to all our
employees, 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 revise 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 Standards of Conduct (Casebook) andother materials so they learn how to act in individual
situations. In FY2021, 77.4% of employees participatedin the program.
Please see our website for more information about
our Standards of Conduct (Casebook).

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

CSR-ESG Initiatives  Risk Management and Compliance Risk Management and Compliance Promotion Activities

Legal Roundtables for Group Companies

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

Date

30th

Attendance

Theme

8 companies
Legal issues concerning labor
14 participants
Revised points in the Civil Code and their
89 companies impact on business transactions
88 participants
Practical responses to Civil Code revisions
11 companies
Legal issues concerning labor
19 participants

2019
NovemberCommunication with authorities in
response to corporate scandals (criminal
84 companies plea bargains, antimonopoly leniency and86 participants commitment procedures)
Practical responses to Civil Code revisions(contract clause examples)

Information Security
System to Promote Information Security

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. The president appoints theofficer in charge of information security (officer incharge of the Corporate Planning Department),
who presides over and runs the Information Security
Committee in order to advance systematic, organizedactivities to promote information security.
 Information Security Structure
CSR Management Committee (ultimate responsibility for information security: president)
Information Security Committee
Officer in charge of information security
Director of information security

Business sites

Group companies

Information management officer(business site manager)

Information handling officer(operations department managers/selected individuals)

57

The Foundations of Our Growth

Risk Management and Compliance System to Promote Intellectual Property Action
Tripartite Intellectual Property Action

Activities to Promote Information Security

In FY2021 we used a portal site on our intranet toremind and educate all employees about information
security, and also hired outside experts to carry out adark web analysis. A number of risks were identified and,after checking the details, we have taken appropriate
measures. We also held a gathering for the information
departments of group companies at which we
promoted information security measures. In addition, we
conducted disaster recovery drills based on hypotheticalemergencies, and carried out a security level surveyof group companies and information security training
designed to enhance our security system. No serious
incidents related to information security have occurred.
We will continue our efforts to improve the security
levels of our domestic and overseas group companies.

Strategy for Researchand Development

Intellectual
property strategy

Central ResearchLaboratory

Cooperation

Intellectual
property
promoters

Cooperation

Business
Strategies

Cooperation
Cooperation

Intellectual
property
promoters

Cooperation

G ro up co m p a nies

As of the end of March 2021, the company owned
1,273 domestic and 238 overseas patents, 267 domestic
and 152 overseas trademarks, and 8 domestic design
rights.
While maintaining and improving our performancein submitting patent applications in the cement andconcrete sector that contribute to national resilience,
recently there has been a sudden increase in our patentapplications concerning technologies that contribute tocarbon neutrality.

System to Promote Intellectual Property Action Number of Newly Registered and Current
Domestic Patent Rights
Non-consolidated(Patents)

1,500

Newly registered patents
Patents we own

1,200

1,142

1,022

1,087

1,235

1,273

900
600
300
0

119
2017

124
2018

140
2019

160
2020

 Patent Application Ratio by Technical Field (FY2021)
Innovative materials andfuture-oriented technologies
27%

Contributing to
the achievement ofcarbon neutrality
16%

Contributing tonational resilience40%

Contributing torecycling-based society
17%

In the process to create intellectual property weconstruct robust patent clusters by establishing rights
to peripheral and improved technologies. As wellas constructing a wide-ranging, robust intellectual
property portfolio, we support business expansion bypromoting a strategic mix of intellectual property that
also includes assets such as trademarks and design
rights.
We also appropriately manage our intellectual
property rights, carrying out comprehensive evaluationsof their business and technological value, and deciding
whether to maintain or renounce them.

Risk Management for Intellectual Property

Outline of Our Intellectual Property

Based on our policy of boosting the outstanding
competitiveness and brand value of the Taiheiyo
Cement Group via business-oriented intellectual
property activities, in addition to strengthening thegroup’s business competitiveness by securing andutilizing intellectual property, we support the creationof an advantageous business environment by sharing
information gleaned from totally new perspectives,
based on an integrated analysis of information about
patents, markets and the like.
We have formulated and apply our Rules for HandlingIntellectual Property Rights and the Taiheiyo Cement
Group Intellectual Property Management Guidelines
to ensure the appropriate management of intellectual
property.
Based on our intellectual property promotion system,
intellectual property promoters are assigned to ourmajor business divisions and the Central ResearchLaboratory to stimulate intellectual property action. They
promote the effective and efficient creation, protection
and use of our intellectual property in collaboration
with the Intellectual Property Department. We have alsoestablished the Group Intellectual Property Promotion
Committee with our main group companies. We are58

Cooperation

Inf

Business divisions

Protection and Use of Intellectual Property
Fundamental Intellectual Property Policy

Intellectual Property
Department

Informationon

CSR-ESG Initiatives  Risk Management and Compliance Information Security

ati

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

working to promote and stimulate intellectual property
activities at our group companies via workshops andexchanges of information with the Intellectual Property
Department.

orm

Please see our website for more information about our
Basic Information Security Policy and Privacy Policy.

1582021 (FY)With regard to preventing the infringement ofother companies’ rights, we strive to ascertain recent
developments in our competitors’ rights via measures
such as the periodic circulation of patent information,
our problematic patent watch system and ourintellectual property review service, and engage inthorough risk management based on our own criteria.
Moreover, we boost our employees’ awareness ofintellectual property risks via measures such as holding
in-house training and intellectual property strategy
promotion meetings with our various divisions. To date,
we have never been sued for infringing intellectual
property rights, and therefore have not suffered any
ensuing business obstacles.
To prevent technology leaks we comprehensively
assess such factors as the implementation status of
the invention concerned, and the relative difficulty ofconfidentiality for it, make a decision on know-how
concealment, and handle it carefully as a trade secret.
We are also focusing on risk strategies for overseas
intellectual property in view of further expansion of ouroverseas business going forward. The legal systems ofemerging Asian nations are different from the system inJapan. We make sure that any differences from Japanare well-known in our group companies, establish
support systems that draw upon outside experts wellversed in the situation in specific countries, and carryout risk management for our intellectual property.

Action to Boost Awareness of Intellectual Property

Our steps to make employees aware of intellectual
property and boost the group’s intellectual property
capabilities include holding in-house training, informing
employees about external training programs, andencouraging them to take the national Intellectual
Property Management Skills Test.
Our in-house training program includes basic training
for new recruits who have almost no experience of
dealing with intellectual property, periodical courses
providing patent description training for young
inventors, and patent research skills training. Thanks tothe addition of remote training courses, our regional
branches, plants and group companies participatedactively in our FY2021 in-house training program with
the number of participants increasing from 90 in theprevious fiscal year to 164 in FY2021.
Furthermore, utilizing classes held by externalorganizations such as the Japan Intellectual Property
Association has made it possible for participants toselect training that matches their level and needs, andwe are promoting such educational and awarenessprograms for employees at our group companies.

A patent description workshop (also available remotely) In-house Attendance at Intellectual Property(Unit: People)
Training Sessions (FY2021)
Taiheiyo Cement
Corporation

Group companies

Basic

57

57

114

PatentDescriptions

26

24

50

Total

83

81

164

Training Content

Total

As part of our action to boost awareness, we
also have a reward system for inventors and run theIntellectual Property Award Program for employees
who contribute to excellent inventions or intellectual
property activities.

59

The Foundations of Our Growth

Respect for Human Rights and Diversity

Basic Policy Concerning Human Rights
and Labor Practices
 GRI102-16

We formulated our Basic Policy Concerning Human
Rights and Labor Practices in April 2015 with theawareness that respecting human rights and diversity
is a fundamental principle for a sustainable society,and taking into consideration the Universal Declarationof Human Rights and the labor standards of theInternational Labor Organization.
Basic Policy Concerning Human Rights and Labor Practices❶ Recognizing that respecting human rights is afoundational management concern, we will strive toaddress human rights issues.
❷ We will respect diversity and will not tolerate
discrimination or harassment in any form.
❸ Applying accepted international principles andlaws and labor practices in each country, we will
respect the rights of all our workers, provide themwith employment free of discrimination and strive toensure equal employment opportunities.
❹ We will strive for better working conditions and aworkplace environment that ensures the health andsafety of our employees.
❺ We will not tolerate child labor or forced labor
under any circumstances.

Respect for Human Rights

We also assisted group companies in conducting
training courses and distributed a booklet to raiseawareness of human rights.
 In-house Training on Human Rights Issues andNon-consolidated
Submitted Slogans (FY2021)
In-house Training and Slogans Submitted

Results

Taiheiyo Cement Group Top Management CSR training

112 participants

Educational Activities on Human Rights

We have been conducting a variety of educational
activities in the belief that education is the foundation
for human rights.
In the FY2021 training program for the top
management at group companies, we held a lecture
called “Harassment-free Workplaces: The Latest
Legislation and Corporate Responses” that was basedon the revised act to prevent power harassment that wasenacted in June 2019. We also held training for all our
employees to make them aware of unconscious bias.
Moreover, during Human Rights Week, we
promoted human rights awareness by collecting
slogans from company employees and their families
as well as our partner companies.

60

3,152 participants

Unconscious bias training

Group companies
775 participants included

Human rights training at plants and branches

69 participants

Human Rights Week slogans submitted (by employees andtheir families)

1,637 slogans

Our Human Rights Hotline

Members of the harassment counseling committees
and human rights committees located at all our businesssites conduct activities to raise awareness of humanrights to prevent harassment, and handle any related
complaints to create a positive workplace environment.
In FY2021, we received 4 reports via the hotline. We
reviewed the details of each report based on requests
from the complainants, and responded appropriately.
 Harassment Hotline
Internal

 GRI102-17, 412-2

Under the Basic Policy Concerning Human Rights
and Labor Practices we are committed to respecting thehuman rights of our employees and all those involvedin our business activities. These strong commitments arereflected in our Standards of Conduct (see pages 5657), which govern the actions of each employee and areclearly expressed in statements such as “We will respecthuman rights and will not discriminate on the basis ofnational origin, gender or other factors” and “We will
maintain a harassment-free workplace.”

Relevant SDGs

External

Human rights awareness promotion committee members
and harassment consultation members have been assigned
at all our business sites (56 in total)
Telephone and website consultations have been contracted
to the Japan Institute for Women’s Empowerment & Diversity
Management Harassment Hotline

 Number of Reports to the Harassment Hotline
Non-consolidated(FY2021)
SexualPower
harassment harassment

Other
forms ofharassment(Unit: person)

Total

Internal

1

2

0

3

External

0

1

0

1

Respecting Diversity
 GRI404-2, 405-1

Promoting Diversity and the Empowerment of
Women

We position promoting diversity and empowering
women as a priority issue for creating an innovativelabor force, and have set quantitative targets in the
CSR Objectives for 2025 (formulated in May 2015) asannounced in-house and outside the company. As ofthe end of March 2021, the ratio of female employees
is 9.2%, and we are continuing with initiatives aimed
at meeting our target. The ratio of newly appointed

female managers in March 2021 was 10.7%, meaningthat we have achieved our target.
In addition to the plan actioned in April 2021
and based on the Act for Measures to Support theDevelopment of the Next Generation and the Act for
Promotion of Women’s Participation and Advancementin the Workplace, we are proactively recruiting female
employees and taking measures to support theirretention in order to open up more workplaces andcareer options for female employees. To further promote
employee work-life balance management, includingchildcare management, we have set targets relating
to the use of annual paid leave and encourage male
employees to take childcare leave.
In terms of our systems, we improved the existing
system regarding childcare and caregivers in FY2017,and in FY2018 established a system that made leaveavailable at the time of a life event and a reemployment
system. We introduced a telecommuting system in April
2020, and are working on initiatives to improve laborproductivity and make diverse workstyles available.
In October 2017 we launched Kirakira Palette, a portalsite that provides support for continuous employment
and is an integrated source of information about
fringe benefits and support available for childcare andcaregiving. Kirakira Palette was launched in response toemployee feedback stating that they did not know whichkind of systems were available in the company and thatthey would like more details about them.
We are also committed to providing information
concerning male participation in childcare. In October
2020 we invited an outside lecturer to talk about genderequality programs throughout Japan and childcare
support, and held an in-house diversity forum exploring
the idea of male participation in childcare.
We launched a program to train the next generationof leaders (for female employees) in December 2020,
and this new initiative is scheduled to run until the end of
FY2026. It is held for our younger employees, including
new recruits and mid-level employees, and is designed
to gradually boost their awareness of their leadership
potential.
We will continue to promote initiatives to attract andretain female employees, train human resources capableof managing work-life balance, andimprove in-house systems which
support them in that. Via such work-lifebalance management initiatives we
aim to become an organization where
diverse human resources can make fulluse of their abilities.

Please see our website for more information about generalbusiness owner action plans pursuant to the Act of Promotionof Women’s Participation and Advancement in the Workplace.

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

CSR-ESG Initiatives  Collaborating with Society Human Resource Development and Creating an Energetic Workplace

Promoting Employment Opportunities for Persons
with Disabilities

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 of persons withdisabilities has steadily improved. The rate was 2.50% as
of June 2020 and the annual average employment rate
for FY2021 was 2.61%, exceeding the statutory rate forthe 14th consecutive year. The statutory employment rate
was raised to 2.30% in March 2021. Our employment
rate was 2.55% as of June 1, 2021, which also exceeded
the statutory rate.
We intend to continue doing all we can to increase
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 eventsand seminars for persons with disabilities.
 Trends in the Employment Rate for Persons with
Disabilities (as of June 1 of each year) Non-consolidated
Employment ratio (%)

3.0
2.5
2.0
1.5
1.0
0.5
0

1.49

Statutory employment
ratio (%)*

Private sector average

Taiheiyo Cement

2.37

2.39

2.34

2.30

1.92

1.97

2.05

2.11

2017

2018

2019

2020

0.82
2001

2021 (FY)* Statutory rate: Statutory employment rates were 1.8% until March 31, 2013,
2.0% until March 31, 2018, and are 2.2% since April 1, 2018.

Rehiring System for Employees Who Have
Reached Retirement Age

We rehire employees who want to continue working
after they have reached the traditional retirement ageof 60 until they become eligible for their pension.
After they start receiving a pension, we rehire them inaccordance with specific rehiring standards under alabor-management agreement until they are 65. We willcontinue to make sure there is a workplace for individuals
who seek reemployment by expanding opportunities ingroup companies.
 Number of Employees Rehired
Non-consolidated
Employer

Rehired by the company
Kirakira Palette portal site established

2.50

Rehired by other companies (including somethat are not group companies)(Unit: person)

2020

51
21

61

The Foundations of Our Growth

Human Resource Development and Creating an Energetic Workplace

Human Resource Development and
Evaluation
 GRI404-2, 3

We regard our employees as the most importantmanagement resources for achieving sustainablegrowth of our group. We maintain a long-term humanresource development system in accordance with our
Basic Human Resources Development Policy and afair evaluation system to support the performance of
all our human resources. These systems reflect diverse
individual characteristics and values, regardless ofnationality or gender.
Basic Policy Concerning the Development of Human Resources
Our aim is to develop human resources that are highly
regarded both inside and outside the company. In
principle, human resources will be:❶ Developed through on the job training
supplemented by off-the-job training❷ Developed to inherit the roles of their predecessors,
playing central roles in the future in each field and ateach level❸ Developed to take action in constant considerationof group management❹ Developed to global standards of competence❺ Developed to protect the environment and to serve
society by assuming active roles in CSR initiatives❻ Encouraged and assisted to develop theirmotivation and to adopt broader perspectives
through self-development

Human Resource Development

We implement company-wide measures, includinggroup training by position, and the development of
global human resources. We also introduce measures
aimed at developing the individual potential of each
employee as a basis for energizing the organization.
These efforts provide our employees with
opportunities for personalized learning experiencesthat foster autonomy and independence, andultimately raise their motivation to the next level. We
actively encourage and create environments in which
employees can freely make decisions about theircareers during their work and training.
In addition, all employees are requested to submit
annual self-appraisals in which they can detail their
future career development aspirations, worksite
preferences and family considerations. This helps us
improve the working environment so they can fully
demonstrate their abilities and we can retain theirlong-term services.

62

Employee-friendly Workplaces

Characteristics of Ideal Employees
From the standpoint of human resource
development, we have identified the following threedesirable characteristics and traits for revolutionizing
the company and creating a dynamic Taiheiyo
Cement.
Self-confident individuals with a strong sense of
purpose who will contribute to the sustainablegrowth of the group❶ Individuals with innovative ideas, strong
leadership and the ability to take bold actions❷ Individuals who can play an active role in the
global arena❸ Individuals who can contribute to groupmanagement(Unit: Thousand yen)

FY202074

FY2021

75

34*Expenditure was lower in FY2021 since training was postponed or moved
online due to the COVID-19 pandemic.

Please see our website for more information about
our training system.

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

CSR-ESG Initiatives  Integrated Report  Appendix

Human Resource Evaluation System

Flexible Work Arrangements

We are striving to provide flexible work
arrangements by adopting various employment
systems that will enable our employees to enhancework-life balance.

Support for Childcare and Caregivers

 Education/Training-Related Expenditure per Employee
Non-consolidated

FY2019

 GRI401-3, 403-6

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 FY2021, 810 people had participated in training
under this program.

We established a long-term leave system in 2017
for employees who have no choice but to give up
their careers due to unavoidable circumstances suchas 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 haveinstituted measures that support employees who
do not want to take leave, such as telecommuting,flextime, shortened work hours, and starting work
early or finishing late.

Responding to the Act for Measures to Support
the Development of the Next Generation

Since FY2006 we have been formulating generalbusiness owner action plans based on the Act
for Measures to Support the Development of the
Next Generation. After gaining our first “Kurumin”
certification in 2017, we achieved the targets
for promoting the use of annual paid leave andencouraging male employees to take childcare leave
set in the general business owner action plan during
its fifth term, from April 2017 to March 2019, and its
sixth term, from April 2019 to March 2021. We also
met multiple certification criteria such as the rate ofchildcare leave taken and levels of overtime work. In
recognition of our efforts we have gained our third“Kurumin” certification. Also, in FY2022 we started
implementing various efforts in accordance with ourseventh general business owner action plans.

General Business Owner Action Plans
Duration
April 1, 2021 to March 31, 2023 (2 years)
TargetMeasures1

Encourage
employees to takeannual paid leave

Systematically provide annual
paid leave, set days whenemployees are encouraged totake annual paid leave

2

Encourage male
employees to takechildcare leave

Run a portal site in support of thecontinuation of employment which
systematically introduces internal
systems, actively encourage
employees to take the childcare
leave they are entitled toMain 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 with
region-limited employment option

 Leave Taken and Work Hours

Non-consolidated

Items

2018

2019

2020

Number of employees
who took childcare leave(male employees inparentheses)

22 (8)

24 (17)18 (8)

Childcare leave rate forfemale employees

100%

100%

100%

Rate of annual paid leave
taken

67.6%

78.5%

74.5%

Overtime work (monthly
average)

16.7 hours 17.4 hours 17.5 hours

63

The Foundations of Our Growth

Human Resource Development and Creating an Energetic Workplace

Initiatives to Promote Employee Health

In March 2018 the company formulated the“Taiheiyo Cement Group Commitment to Health” as
its policy for employee health. Under the commitment
we have since undertaken initiatives based on the“Kenkokeiei*” concept to maintain and improve themental and physical health of every employee.
* Kenkokeiei (Health Management) is a trademark of the NPO HealthManagement 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 enthusiastically work while maintaining
their mental and physical health.

Mental Healthcare

We provide mental health checkups for all our
employees (consultation rate: 96.7% in FY2021).
Mental healthcare is a key focus in our initiatives
to promote employee health. We also conduct
workshops focused on maintaining mental health.
In addition, we offer free counseling services onmental health to employees and their families undera contract with the company’s healthcare trust for thispurpose.

Our Employees

 Number of Newly Graduated Employees Non-consolidated

 GRI102-7, 8, 401-1

 Employees (as of the end of FY2021)
Male

Female(Unit: person)

Total

Nonconsolidated

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 as of FY2021.

Permanent employees

1,633

205

1,838

Temporary employees

65

8

73

Consolidated

Support for Volunteer Activities

Permanent employees

10,991

1,595

12,586

Temporary employees

803

255

1,058

 Average Length of Employment for Employees
Non-consolidated(as of the end of each fiscal year)
FY2019(Unit: year)

FY2020

FY2021

Male

20.4

20.0

19.2

Female

13.1

12.3

12.3

 Number of Employees in Management Positions
Non-consolidated(as of the end of each fiscal year)
FY2019(Unit: person)

FY2020

FY2021

Male

767

760

759

Female358FY2019(Unit: person)

FY2020

FY2021

Male

68

91

91

Female24

18

18

 Number of Newly Hired Mid-career Employees
Non-consolidated

FY2019(Unit: person)

FY2020

FY2021

Male

6

9

11

Female700Sound Labor-Management Relations
 GRI102-41, 403-4

All employees who have entered into a labor
agreement with the company are union members.
As and when required we hold labor-management
consultation and briefing sessions that provide
opportunities for labor and management to exchange
opinions and negotiate issues on the basis ofmutual trust and understanding. These sessions
encompass not only labor contract negotiations
but also explanations of corporate performance,
revisions to wages and bonuses, and amendments tosystems and rules. We aim to improve communication
between labor and management via these sessions. In
addition, four specialized committees have been set
up for labor-management consultations and provide
opportunities for active negotiation and exchanging
views between labor and management.

 Aims of Specialized Committees
Committee

Aims

Committee
on human
resources andthe treatment of
employees

Review the entire personnel system andthe treatment of employees

Committee on
employment
and employment
formats

Examine the operation of personnel/
labor management systems in thecontext of diversifying employment andemployment formats

Committee on
work hours

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

Committee
to promote
workplacediversity

Examine the measures necessary to
promote diversity in the workplace

Direct Communication between Executive Officers and Employees
In FY2021, the Stakeholder Communication
Committee hosted a roundtable discussion forfemale executives and female employees as part ofits action to stimulate communication.
As one of our initiatives to achieve the workplace
diversity targets in our CSR Objectives for 2025 (aratio of at least 30% female employees hired withno area restrictions on their work, a ratio of female
to male employees of at least 10%, and a 10% ratioof newly appointed female managers), we provided
a forum for Ms. Koizumi (one of our directors), Ms.
Mitani (one of our corporate auditors) and 12 female
employees to engage in frank exchanges of ideas
on topics such as career advice and how to balance
work and life events.

Promoting Hygiene and Good Health

We conduct annual health examinations for all
employees in accordance with the Industrial Safety
and Health Act. As in FY2019 and FY2020, theattendance rate in FY2021 was 100%. When it isdeemed necessary, we encourage the employee toundergo a more thorough examination and provide
guidance on how to make lifestyle improvements.
Moreover, as part of the initiative, we hold nutrition
seminars at each business site, provide information
through our in-house newsletter and distribute
pamphlets that boost health awareness.

Employee Awareness Survey

With the aim of boosting our employees’ jobsatisfaction we conducted an employee survey every
two years from FY2014 to FY2018. We are discussing
details to implement it more effectively in FY2022.

64

65

E

The Environment

Environment

Environmental Management ������� 68
Mitigating Climate Change �������� 70
Recycling Waste and Other Materials ��� 72
Conserving Biodiversity ��������� 74
Reducing Environmental Impact ������ 76
Appropriate Use of Water Resources ���� 78
Environmental Accounting �������� 79
Material Balance of the Cement Production Process 

66

80

67

The Environment

Environmental Management

Our environmental management policy declares
an active commitment to environmental issues facing
society, including not only preventing environmental
pollution but also creating a recycling-based society,mitigating climate change, reducing environmental
impacts, protecting water resources and conserving
biodiversity as key management challenges. Under
this policy we are focusing on improving ourenvironmental performance.
Environmental Management Policy
In January 2006 we formulated 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 a wide rangeof stakeholders, from international society to local
communities, and to seek the ideal form for a sustainablecement industry as a member of the WBCSD and GCCA
(Global Cement and Concrete Association).

Formulated in January 2006
Revised in April 2019

❶ Pursuing Environmentally Conscious Business

Activities
In pursuit of reducing environmental impacts, weproperly assess the impacts of our business activities
and promote the introduction of eco-efficienttechnologies into our business and the developmentof eco-conscious products. Also, we pursue
environmental conservation activities as a member ofthe regional community.
❷ Compliance with Environmental Laws andRegulations
As a minimum, we comply with all environmental
laws and regulations applicable to our businessactivities. Furthermore, beyond compliance, we meetenvironmental commitments undertaken throughvoluntary agreements.
❸ Contributing to a Recycling-based Society
Leveraging the inherent capabilities of the cement
industry, we actively recycle industrial and municipal
waste as raw materials and fuels for cement
production.
❹ Proactively Addressing the Issue of Climate Change
We promote greater energy reduction throughout thewhole of our business activities and strive to develop
technology to help reduce society's total greenhousegas emissions.
❺ Promoting Global Technology Transfer
Through the worldwide transfer and deployment of ourtechnology, we aid the development of greater energy
conservation, environmental preservation and utilizationof waste materials.
❻ Ecosystem Conservation
We strive to protect the ecosystem, including
biodiversity, by providing products and technologies
that contribute to harmonious coexistence with nature.

68

Company-wide Environmental Management
System (EMS)
In June 1997 we initiated ISO 14001 certification ofeach of our plants and attained certification of all sixof our directly operated plants by 1999. Recognizing,
however, that plant level management systems alone
are insufficient to ensure comprehensive environmental
protection through environmental management projects,
we built a company-wide 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 fourth time in March 2021.

EMS Readiness

Top management (the officer in charge of the
Production Department) chairs the Environmental
Management Committee with ultimate decision-making
authority for environmental management. Overseen by
the Environmental Management Committee, the relevant
headquarters division manages our plants, mines,
quarries and branches using an “umbrella” system.

 Company-wide EMS Readiness
Secretariat: Environmental Administration Group, Production Department

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

Depts. withjurisdiction

Environmental Management Policy

Relevant SDGs

PlantsMines andquarries

CNPT*
Other
Headquarters,
business sites

Branches

Central ResearchLaboratory*The Carbon Neutral Technology Development Project TeamAll of our cement plants in Japan, including thoseof group companies, have obtained ISO 14001
certification. Furthermore, all of our overseas cement
plants in countries that adopt ISO have obtained
ISO 14001 certification and are actively committed
to environmental conservation. Cement plants incountries where ISO is not adopted as the mainstream
standard operate their own EMS.

Internal Environmental Audits

We conducted internal environmental audits at all
our sites in FY2021.
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 service stations was identified
as an item that must be dealt with by branches.
The audit identified 34 findings, including 3 for which
improvements were requested. Corrective actions weretaken for all 3 findings for which improvements wererequested.

Environmental Education

During Environment Month each June we deliver amessage from the president and provide educational
materials on the environment page of our portal site toincrease awareness and encourage learning about theenvironment, and about environmental preservation
activities throughout the group. Each workplacealso engages in a number of different activities, suchas conducting training sessions related to accident
response, viewing environment-related videos, holding
lectures and taking part in local cleanup activities. In
FY2021, more than 400 activities took place, includinggroup companies’ activities.

Compliance with Environmental Laws
 GRI307-1

Environmental Accidents

In FY2021, we had no legal or regulatory violations
related to the environment that were subject to fines
or penalties, or any significant accidents that affected
the environment or ecosystems. However, we had
three minor accidents and took measures to prevent
their recurrence.

Response to Environmental Accidents

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

Environmental Complaints

As we increasingly utilize ever more diverse
forms of waste and by-products the number ofenvironmental issues we need to consider also
increases. Therefore, we are ramping up our efforts
to reduce environmental impact through activities
such as introducing indoor storage and sealedcontainers for waste and by-products, and improving
our flue gas stacks. On receiving an environmental
complaint, whenever possible we quickly travel to thesite in question to check the situation, investigate thecause and provide an explanation. If we find that ouractivities are the cause we implement improvements.
In FY2021, our cement plants received 109
environmental complaints, including those fromoutside sources. We responded to 25 of these, whichwere associated with our operations. The numberof complaints has remained roughly the same since
FY2018.
 Number of Environmental Complaints Received
Non-consolidated(Complaints)

 Taiheiyo Cement Group Environmental Targets GCCA

CO2 Emission Reduction Targets

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

35

Air/ﬁne particles Noise Water quality
Vibrations Odor Other

30

29

20

Reduction Target for Main Air Pollutants

5

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

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

25
3

24

25

Reduce specific net CO2 emissions
by 10% or more from FY2001 levels by FY2026.
CSR Objectives for 2025

29

4
2

18

15

3

1

10

Training to respond to environmental accidents (Kumagaya Plant)

0

12
2017

2018

2019

2020

2021

(FY)

69

The Environment

Mitigating Climate Change

Relevant SDGs

Greenhouse Gas Emissions andAchievement of Our CSR Objectives for2025
 GRI102-11, 302-3, 305-1, 2, 4, 5

Among the total greenhouse gas emissions
generated by our domestic group companies(excluding power generation companies) that arereporting their greenhouse gas emissions by businesssegment in accordance with the Act on Promotionof Global Warming Countermeasures, about 95%
of greenhouse gas emissions were generated from
cement production companies in FY2017.* Roughly
5% of our Scope 1 and 2 emissions were associatedwith our service stations, headquarters, branches
and shipping, as well as electricity purchased by thegroup. Our Scope 3 emissions, calculated according
to categories 1, 3, 4, 6 and 7 of the WBCSD/CSI Scope
3 guidelines, were roughly 4% of our Scope 1 and 2
emissions.
The bulk of greenhouse gas emissions associatedwith the operations of our group companies are
directly associated with cement production. We
have therefore set in the CSR Objectives for 2025 a
medium to long-term quantitative target of reducing
specific net CO2 emissions by 10% or more from
FY2001 levels.
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,and striving to achieve the reduction targets. To
support voluntary approaches we are also working
in line with Keidanren’s voluntary action plan andthe measures to reduce greenhouse gas emissions
established by the WBCSD and GCCA.

 GRI302-1, 3, 4, 305-4, 5

A significant amount of CO2 is generated during
cement production. This is because the production
process requires a high temperature of 1,450°C andlimestone, used as a raw material, is decarbonatedthrough a chemical reaction during the calcination
process (CaCO3  CaO + CO2). About 35% of CO2
emissions generated during cement production arefrom the consumption of energy, about 55% are fromthe calcination of raw materials, and about 10% arefrom electricity use. In order to reduce CO2 emissions
we have been working to conserve energy byinstalling energy-efficient equipment and improving
the stability and efficiency of our kiln operations.
We have also been implementing measures such as
expanded use of waste- and biomass-derived energy
sources to decrease our rate of use of fossil fuels. We
are also moving toward using recycled resources withless carbonate content to lower CO2 emissions fromthe calcination of limestone. We are moving forwardwith the adoption of waste heat power generation to
reduce CO2 from electric power.
Our specific net CO2 emissions for FY2021 were 675
kg of CO2 per tonne of cementitious product, the sameas in FY2020.
 Specific Net CO2 Emissions（kg-CO2/t-cementitious）

700

683
675

 Progress in Meeting the CO2 Reduction Targets in
CSR Objectives for 2025

650

8Target

2
2006

2011

2016

2021

Total emissions (thousand t)
30,000679

2018

22,624671

201922,827675

2020

21,832

675

2021

(FY)

2026

(FY)

 Specific Heat Consumption of Clinker Production
GCCA
Speciﬁc heat consumption (MJ/t-clinker)

Fossil fuels

3,600
3,400

3,306

3,303

3,200

3,268

2,600

2,873

2,858

2,817

2,832

2,849

2017

2018

2019

2020

2021

0
(FY)

Waste Heat Power Generation

Waste heat power generation associated with thegroup’s cement production was 430 GWh in FY2021,
a roughly 53GWh decrease on FY2020. Its ratio to allelectricity consumed at our cement plants was about
12.5%. Assuming an emission factor of 0.69 t-CO2/
MWh if we were to purchase electric power from anexternal source, this works out as a reduction in CO2emissions of approximately 297 thousand tonnes.
 Electricity Generated by Waste HeatPower generated

（GWh）

400

476
14.0

480
14.1

200
0

2017

2018

480
13.2

2019

GCCA

Power substitution rate（%）
20
483
430
15
13.5

2020

12.5

2021

(FY)

10
5

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

10,000

Alternative Energy Resources and Alternative
Raw Materials

0

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

In FY2021, non-fossil energy and biomass energy
accounted for about 14.2% of all energy used forgroup kilns. A decrease in CO2 emissions of about
9.5kg-CO2/t-clinker was also achieved by using
alternative raw materials instead of limestone.
Assuming an emission factor of 0.096 kg-CO2/MJ
for coal, our use of alternative energy resources
alternative raw materials works out as a reduction in
CO2 emissions of approximately 1.47 million tonnes.

13.5

13.1

14.1

13.8

11.3

11.6

12.0

12.3

1.8
2017

1.8
2018

1.8
2019

1.8
2020

5

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

600

Non-fossil fuels
Biomass fuels

20

10

3,000
2,800

 Ratio of Alternative Fuels and Biomass Fuels GCCA

（%）

15

3,321

3,298

20,000Specific heat consumption of clinker production by
the group’s cement plants in FY2021 was 3,321 MJ/tclinker, a 23 MJ/t-clinker increase on the previous
year’s level.

4

2001

2017

22,440Efforts to Save Energy

8.3

6

0

21,914

GCCA

Speciﬁc emissions

725* Most of our overseas group companies are cement production companies,
so the ratio of cement production companies in our overall CO2 emissions
fromproduction is higher than it would be for domestic companies alone.

Reduction rate of speciﬁc net CO₂ emissions (%)
1070

Efforts Related to the Cement Production
Process

14.2
12.2
2.0
(FY)
2021

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

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

10
8

8.0

8.4

8.2

8.2

2017

2018

2019

2020

9.5

6
4
2
0

2021

(FY)

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

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 a plan to transport
goods on return trips, encouraging drivers to eco-drive,and promoting energy efficient devices such as digitaltachometers and eco-tires on vehicles. In shipping,
we continue to pursue energy efficiency technologies
and operate new ships that are equipped with various
energy-saving features. We are also supporting energysaving operations for conventionally powered ships.
Our FY2021 CO2 emissions were roughly 8% lower
than in FY2020 thanks to energy efficiency initiatives anda decrease in shipping volume.
CO2 Emissions by Mode of Transportation (FY2021)

Non-consolidated
Tonnagetransported(thousand t)

Average DistanceTransported(km)Transported
tonne-kilometers(thousand tkm)

CO2 emissions(thousand t)

Ship

16,147469

7,576,805

105

Truck

14,15055

781,30546

Railway

5,001

26

127,8903

Total

35,298240

8,486,000

154

Mode oftransportation

71

The Environment

Recycling Waste and Other Materials

Resource Recycling with Industries
Electric Power Utilities

We accept coal ash produced at coal-fired
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 powderwhich is used to scrub the harmful sulfur oxides fromthe exhaust produced by the burning of coal. The
reaction of the limestone powder with sulfur oxides
forms by-product gypsum, which we make effective
use of as a raw material for cement.
*Ash centers are distribution sites that combine collection/transportation(transshipment and storage) and intermediate-processing (powder mixing)
functions. They receive coal ash from coal-fired power plants and ensure astable supply to our cement plants, while also supplying diverse products thatmeet user needs.

Steelmakers

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

Relevant SDGs

Incineration Residues Recycling System
A system for recycling municipal waste incinerationash (bottom ash and fly ash) as a raw material for
ordinary Portland cement.


AK System
A system for recycling household waste andgeneral business waste as alternative raw materials
and fuels for cement manufacture. The waste ispreprocessed through biological breakdown(fermentation) using a waste recycling kiln.


Ecocement System
Ecocement is a new type of cement made primarily
from the municipal waste incineration residues. Morethan 500 kg of ash and other waste materials are used
per tonne of Ecocement.
 Resource Recycling with Industries

Limestone
powder

Thermal Power Plant
Coal ash

Most municipal waste is incinerated and theincinerator residue is buried in landfills, but it has
become very difficult to find new landfill sites. Waste
treatment has become a source of concern for Japan’smajor city governments in particular, and the situation
is expected to get worse. We have three systems forrecycling municipal waste and strive to make effective
use of such resources and resolve environmental
issues.

72

All of our directly operated cement plants in Japan
recycle waste and byproducts into alternative raw materials
and fuels for cement. This helps to prolong the life oflandfills, prevent the depletion of natural mineral resources,
limit greenhouse gas emissions and reduce emissions ofpollutants into the atmosphere.
In FY2021 we accepted a greater volume of wood chips,
waste plastic, water treatment plant sewage sludge andash, and municipal waste incineration ash. However, due toa decrease in the amounts of coal ash, blast furnace slag,
by-product gypsum, unburned ash, dust, dust construction
soil, and waste oil we accepted, the input of recycled waste
and by-products was 6,108 thousand tonnes, a decrease ofabout 279 thousand tonnes on the previous fiscal year. Thismeans we recycled 402.7 kg of waste and by-products per
tonne of cement produced.

 Trends in Use of Waste and By-products per Unit
Production
Non-consolidated

Limestone
powderGypsum500

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

Ash Center

Portland Cement Plants
Municipal waste

AK System

Incineration Residue Recycling System

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

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

Ordinary
PortlandcementEcocement System

Incineration residues
from municipal waste

Ready-mixed concrete plants

Concrete products manufacturing plants

400

413.4

Total Amount
(t)

Rate
(kg/t-cement)

Coal ash

1,905,365

125.6

Blast furnace slag

1,090,049

71.9

By-product gypsum

500,474

33.0

Unburned ash, dust

509,304

33.6

Dirt and sludge

373,487

24.6

Construction soil

164,597

10.9

Waste oil

101,827

6.7

Wood chips

74,343

4.9

Waste plastic

181,953

12.0

Other

659,987

43.5

Water treatment plantsewage sludge and ash

373,217

24.6

Incineration residues frommunicipal waste

144,810

9.5

Waste and By-products

Municipal waste, etc.
409.4

409.5

402.7

267.3

300

 Main Waste and By-products Used in Cement
Non-consolidated
Plants (FY2021)

28,617

1.9

Total

6,108,031

402.7

Raw material-related

5,516,164363.7

Fuel-related

200

Total

100
2001

2017

2018

2019

2020

2021

Ecocement

591,867

39.0

6,108,031

402.7

(FY)

 Waste and By-products Used in Cement Manufacturing Processes
Limestone

Truck

Raw mill

Railway

Finish millRotary kiln

Various kinds ofmaterials

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

404.2

0

Cement Plant

 Resource Recycling with Local Communities

Incineration plant

Resource Recycling with Local
Communities

 GRI301-1, 2

Consumption (kg/t-cement)

Construction Soil

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

Performance of Recycled-Waste-toCement System

Ship

Raw Material Preparation Process

Burning Process

Finishing Process

Transportation

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

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

A small amount of
gypsum is added tothe clinker and groundin the finish mill to
produce cement.

The cement is thentransported by ship,truck or railway freightcar.

Waste and by-products used
Raw materials

Blast furnace slag, coal ash,dirt and sludge, non-ferrous
slag, steelmaking slag,
construction soil, moldingsand

Raw materials

GypsumFuels

Admixtures

Incineration residues frommunicipal waste, sewage sludge
Waste oil, waste plastic,
used tires, wood chips, RDF(municipal waste pellets),
recycled oil

FGD gypsum, chemicallyderived gypsum
Slag powder, fly ash

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

1,201 kg
222 kg
75 kg
27 kg
39 kg
112.6 kg
106.4 kwh73

The Environment

Conserving Biodiversity

Relevant SDGs

Environmental Impact of Our Operations

IUCN Categories

Cement production starts with quarrying limestone,
the primary raw material for cement. We also quarry
many mineral resource products used as aggregatesand industrial raw materials.
Since quarrying involves the removal of topsoil
to expose the required ore, it inevitably impacts
the environment and biodiversity of the area being
developed. However, the limestone, rocks and sandwe quarry only require crushing for particle size
adjustment and sorting, and do not require any refining
processes. Consequently, our operations are unlikely
to cause chemical contamination to surrounding areas.
In addition, we minimize the amount of waste stones
generated during our limestone quarrying by using
them as construction materials.

Ia: Strict Nature
Reserve

Areas that have outstanding or
representative ecosystems or havegeographical or physiological features orcharacteristic species.

Ib: Wilderness
Area

Large unmodified or slightly modified areasthat retain their natural character.

II: National Park

Areas set aside to protect theenvironmental integrity of the ecosystem.

III: Natural
Monument or
FeatureAreas that have outstanding natural features
or natural features of cultural value.

Ⅳ: H abitat/Species
Management
Area

Areas that require active interventions
to maintain habitats or address therequirements of particular species.

Environmental Impact of Our Operations

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

* Site area: The extent of the area where we conduct quarrying operations ,asmeasured by our in-house criteria

 Limestone Quarries of the GroupRegionQuarries

Site area (ha)

Japan

11

2,608

Other

3

380

USA

3

1,281

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

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

74

Greening Quarries

 Outline of IUCN Protected Area Categories

 GRI304-1, 2, MM1, MM2

Outline

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 local communities
and development of the communities themselves
is important in quarry operations. With this belief,
we hold discussions with local governments, local
communities and academics while operating quarries.
This helps to ensure we not only prevent pollution but
also conserve biodiversity and water resources while
minimizing our environmental impact.

Environmental Impact Assessment

In developing quarries we conduct ex-ante
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,
local communities, academics and other stakeholders
before 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 their areas.
For instance, in the new development of a quarry in
the Ofunato Quarry, Iwate Prefecture, we conductedenvironmental assessment for approximately ten
years. We focused on preserving rare wildlife species
in cooperation with external experts and local
residents. Furthermore, we minimized noise andvibration during the development work and also
limited the traffic hours for trucks used in construction
work. In addition, even after development work
begins, we carry out regular assessments andimplement environmental protection measures.

Raptors survey (Ofunato Quarry)

Biodiversity Protection

When environmental impact assessments
determine that protection is required, we protect rare
species and the like via measures such as installing
protective equipment, transplanting and restricting
development work.
Since 1972, at the Minowa Quarry of Chichibu
Taiheiyo Cement Corporation, we have been protecting
and nurturing rare species of native plants on Mt. Buko,
which is located in Chichibu City and Yokoze Town in
Saitama Prefecture. We created a botanical garden at
the quarry 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 to research and develop
ways to protect and propagate plants, and to verify thegenetic diversity of wild specimens using biotechnology.
Since 2016, in the course of developing the Ofunato
Quarry, we have been working with experts to protect
and propagate various rare plant species in their native
biospheres by creating a botanical garden on the side of
the office of Ryushin Mining Co., Ltd.

Rocks and soil are exposed in working quarry
areas, and no vegetation is left. However, if noquarrying work is expected for some time we strive
to green such areas as soon as possible. We also
plant vegetation in excavated topsoil stockyards andin places where the contours of the soil will remainunchanged for a while. At some quarries, at therequest of the local community, we restore greenery if
operations have been suspended for several months.
We basically plant vegetation that is native tothe region. In our greening of quarries in Japanin FY2021, we scattered seeds over a total area of
26,294m² and planted 3,944 saplings.
Other efforts include participating in an annual
tree planting campaign with contractors andlocal residents to improve awareness of quarry
development and greening activities.

Greening quarry slopes (Buko Quarry)

Water Resource Conservation

In quarrying we also pay close attention toprotecting not only terrestrial plants but also water
resources such as rivers and natural springs inan effort to contribute to biodiversity. From theperspective of conserving water resources, springwater discharged from quarrying and rainwater isdirected into retention basins to minimize impact on
the environment outside of the quarrying area. In
some quarries we drill wells for domestic water andsupply this water to local communities for everyday
use.

Use of Old Quarry Sites

Protecting the natural habitat of rare plants (Ofunato Quarry)

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

75

The Environment

Reducing Environmental Impact

Preventing Environmental Pollution

Water Contamination

1,300

1,000
62
47

500

0

2011

SOx (right axis)
Dust (right axis)

1,221

1,197

78

80

39

2017

1,227

1,187

30

2018

（g/t-clinker）

150

1,282

100
67
27
2019

63
30

2020

Seawater

42

2021

100
75

96.0

95.0

(FY)

0

GCCA

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
81.6

84.7

84.2

84.0

83.3

59.0

50
25
0

2011

2017

2018

2019

2020

2021

(FY)

P
 ercentage of clinker volume manufactured in a kiln equipped with
continuous NOx measurement Percentage of clinker volume manufactured in a kiln equipped with
continuous SOx measurement Percentage of clinker volume manufactured in a kiln equipped with
continuous dust measurement
Reference guidelines: “GCCA Sustainability Guidelines for the monitoring andreporting of CO2 emissions from cement manufacturing Ver. 0.1” GCCA

76

Cooling water

Cement kiln

Watersprinklers

Sedimentation
tank

Separation
tank

Soil Contamination

Appropriate Management of Chemical
Substances

 GRI306-2

Initiatives at Plants and Quarries

Our cement plants and quarries reduce theamount of waste handled by disposal contractors byreusing waste from operations as material for cement
production. We also endeavor to reduce waste that
ultimately ends up in a landfill via measures such as
the use of chromium-free kiln bricks.
 Volume of Waste to Landfill
100

The PRTR Law requires that we report on equipment
installed at our Kumagaya plant for the washing ofmunicipal waste incineration ash. This washing processuses water, and our total discharge of dioxins and ferricchloride into public waterways are as shown below.

Emissions60

Streamchannel

5

5

1

2017

2018

2019

13
2020

27

2021

(FY)

Service stations (SS) reduce the waste handled bywaste disposal contractors by returning any residual
cement that remains in silos after switching thecement products. Returned cement is recycled as raw
material. In FY2021, the recycling rate was 80.3%, up
2.4% from the previous fiscal year.
 Recycling ratio
（%）

100
90

89.1

80
70

59.6

60
50

2017

2018

Initiatives at Offices

77.9

80.3

2020

2021

65.7

2019

FY2019

Reported Levels
FY2020

FY2021

Dioxins (mg-TEQ)

0.0

0.0

0.0

Ferric chloride (kg)

170

152

170

Management of PCB Waste

Initiatives at Service Stations

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 via measures to prevent theleakage of wastewater from scrapyards or fluid fromoil tanks, acid/alkali tanks, pipes and so forth.

Pollutant Release and Transfer Register (PRTR)

80

0

Ocean

 GRI306-2

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

（t）

20

Cooling
tower

On-site power
generation

Reducing Waste40

Oil film detectors,
turbidimeters, pH
meters50

20

 Monitoring Rate（%）

Water recovery
cistern

Gutters

On-site power
generation

NOx (left axis)

Material and fuelyards, roads,
buildings, etc., at sites

Equipment cooling, etc.

1,500

Rainwater

Water cisternS pecific Emissions of Clinker for Selected Pollutants
GCCA Example of Water Circulation Flow at a Cement
Plant

Make-up water

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 strive
to reduce air pollutant emissions through measures
such as installing equipment to continuously monitor
emission concentrations, improving NOx reduction
systems and installing bag filter equipment to capture
dust emissions. Our target in this is to maintain our
FY2011 emissions levels.
In FY2021, emissions of NOx, SOx and dust were
all lower than the figures for FY2011, our benchmark
year. Furthermore, the level of SOx emissions was very
low compared to the limit set under the Air Pollution
Control Act.

Ground water

Air Pollution

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

River water

 GRI305-7（g/t-clinker）

Relevant SDGs

(FY)

Our special purpose subsidiary, Taiheiyo Service
Corporation, recycles the company’s used copy paperfor efficient use in-house. Approximately 340,000
sheets of A4 size paper were recycled in FY2021.

We properly store and dispose of high and low
concentrations of PCB waste in accordance with theAmendment to the Law concerning Special Measuresfor Promotion of Proper Treatment of PCB Wastes(revised in 2016), hereinafter referred to as the PCB
Special Measures Law.
For high-concentration PCB waste with an early
disposal deadline as stipulated by the PCB Special
Measures Law, we signed a processing contract with
the Japan Environmental Safety Corporation (JESCO)in 2006 and have prioritized processing.
Pollutants such as electrical ballasts stored at the
Ofunato Plant, Fujiwara Plant and the former Kawara,
Tosa and Osaka plants, as well as at the Chichibu quarry
and branch office service stations, were processed in
FY2021. Transformers and capacitors containing highconcentration PCB in the Kyushu, Chugoku and Shikoku
area were processed before March 31, 2018. However,
we have confirmed that two unprocessed capacitors
still remain in that area. We have submitted a reportto the prefectural governor about the two capacitors,
and they are being stored appropriately until the local
government decides on the disposal method forequipment that has passed its deadline for processing.
Pollutants such as electrical ballasts stored at the
Ofunato Plant, Kumagaya Plant, Saitama Plant andChubu Hokuriku Branch service stations are scheduled
for processing in FY2022.
 Treatment of High-concentration PCB Waste Non-consolidated(No. of machines)

Waste

Stored in
FY2020(asof March 31,
2020)

New Target for
FY2021Treated in
FY2021

Stored in
FY2021(asof March 31,
2021)

Treatment
Scheduled for
FY20220Capacitors

0

2

0

2

Transformers

0

0

0

0

0

Electrical ballasts

1,750

355

1,169

936

627

Total

1,750

357

1,169

938

627

77

The Environment

Water Risk Analysis

Relevant SDGs

 Water Consumption

 GRI303-1

According to the results of the water risk analysis
conducted using the Water Risk Filter*, the averagescore for the total basin risk for all our plants(weighted average taking into account the cement
production volume) was 2.6. The highest total basinrisk score was 3.5, and the average score was 0.2
lower than that of the previous year. The volume of
cement produced at the plant in question accounted
for about 13% of the production volume of all theplants. However, when we analyzed conditions at thatplant, no urgent issues were identified.

FY2017GCCA
FY2018FY2019FY2020

FY2021

Surface water

7,505

8,130

6,521

5,626

5,355

Ground water

16,232

16,37016,884

18,65618,759Industrial water

2,983

3,095

3,251

3,325

3,078

Total fresh water withdrawal (I)26,71927,596

26,656

27,607

27,192

Total seawater withdrawal

146,097

149,056

149,776

147,372

146,232

172,816

176,652

176,432

174,979

173,424

Total fresh water discharge (O)12,964

12,294

12,167

13,674

13,447

Total seawater discharge

Total water withdrawal

0.835

0.806

0.817

Upstream and downstream costs
Administrative costs

149,781

147,377

146,368

161,350

161,948

161,051

159,815

Social activity costs

Total fresh water used (I-O)

13,75515,302

14,48913,933

13,745

Appropriate Use of Water Resources
At present there are no specific concerns
regarding water resources that may be raised by local
communities. However, we are striving to reduce water
withdrawal with a view to conserving water resources.
In addition, we maintain close communication withlocal communities and contribute to the appropriate
use of local water resources.
Taiheiyo Cement Philippines, Inc. supplies cleanwater to local communities in the Philippines fromwells drilled by the company for water to use in its
plants.
CalPortland Company has constructed a system
for the sustainable use of water at its Rocky Canyon
Aggregate Plant in California, USA. This system has
improved the collection and storage of rainwaterand spring water at the site. Developing these water
resources has made it possible to secure a supply of
the water it needs in its work, without having to build
new wells or increase the volume of ground water it
extracts, and also to keep the amount of water thatdrains out of the site to a bare minimum. (There arestrict regulations with regard to water that drains outof a site.)

0.832

0.6

Main Activities

2017

2018

2019

2020

2021

(FY)

FY201910,632Cost
FY202010,834FY2021
9,456

2,128

1,904

381

1,352

1,667

6,197

6,197

4,907

Waste treatment etc.

Recycling waste and by-products asalternative raw materials and fuels
for cement

243

144

393

439

439

569

3,933

3,020

1,255

4,955

4,955

6,189

Innovative cement manufacturing
processes etc.

65

113

78

141

141

151

556

539

537

812

812

867

2

0

0

28

28

43

6,006

16,655

16,655

16,793

Environmental management etc.

Plant tours etc.

Environmental remediation costs Emission levies etc.
Total

1,537

Investment
FY2020 FY2021
3,624
3,964

WHR power generation systems etc.

0

97

6,717

7,393

172

3,996

3,996

87

87

3,980

(Unit: million yen)

FY2019 FY2020 FY2021

Total investment

87

Total R&D expenditure

20,02020,97523,057

1,192

1,195

1,246

External Economic Benefits Derived from the Recycled-Waste-to-Cement System
We use the external economic benefit (EEB)
evaluation method to express, in monetary terms,
our evaluation of socioeconomic benefits fromenvironmental impact reduction due to increased
recycling of waste accepted from outside thecompany. We calculate that we created a social

benefit of 89.2 billion yen in FY2021. The total
amount of waste and by-products used in FY2021
was less than in the previous fiscal year, leading toan approximate 2% decrease in economic benefit on
FY2020.

 External Economic Benefits (FY2021) (Non-consolidated)
ImpactClimate change mitigation

Depletion of energy resources

Depletion of mineral resources
Shortage of landfills

Inventory
CO2

Inventory
Market Price (Yen/t)

Reduction (t)External Economic Benefit(Hundred million yen)

(Unit: hundred million yen)

1,200

1,779,704

3,000

53

105,344

18,400

19

900
600

Crude oil
Natural resources

4,671,056

1,000

47

Waste

5,152,393

15,000

773

Total

892

300

808

2019

912

892

2020

2021

(FY)

Taiheiyo Cement’s External Economic Benefit Evaluation• We have developed a unique evaluation method to estimate the contribution to overall environmental benefit to society by utilizing waste materials from otherindustries.
• We use information, including data collected for the GCCA Cement CO2 Protocol, to calculate the reduction in consumption of fossil energy and natural resources
associated with the use of waste and by-products.
• Economic benefits are calculated by multiplying reductions in consumption (effects of environmental conservation) by set market prices.
The market values of the inventory items are set at FY2001 levels, and are estimated on the basis of the following considerations.
CO2: 3,000 yen/t (a hypothetical CO2 emission tax rate). Crude oil: import price. Natural resources: estimated price. Waste: controlled landfill costs in the Tokyo area.
• A portion of the EEB is accounted for in our profit and loss statement.

Environmental Accounting for One of Our Projects

Installation of a Hydrated Raw Material Mixing System at
the Fujiwara Plant No. 5 Kiln

 GRI201-2

In order to boost the rotary kiln firing efficiency, standard raw materials for cement are dried, pulverized andhomogenized in a raw mill. In recent years the amount of substitutes used for natural resources is increasing, andsome of those recycled resources have a strong odor like hydrated sludge and cannot be processed in a raw mill.
This makes it necessary to feed them directly into a rotary kiln to decompose
any malodorous components.
The hydrated raw material mixing system installed at the Fujiwara Plant
No. 5 Kiln in FY2021 was jointly developed by Taiheiyo Cement and Taiheiyo
Engineering Corporation. It is a new type of mixing system that separates
high-temperature raw materials inside the preheater and premixes them
before they are fed into the rotary kiln, thereby dramatically boosting drying
and firing efficiency. The new mixing system will lead to less thermal energy
being required for clinker burning, and is intended to further reduce CO2
emissions and environmental impact.

340 million yen

0.2

FY20192,161

Water pollution prevention etc.

Investment: Approx.

0.4

0Resource recycling

149,056

 Fresh Water Withdrawal per Unit of Production GCCA
0.833

Global environmental
conservation

159,061（m3/t-cementitious）

0.8

Pollution prevention

146,097

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

1.0

Business area costs

Total water discharge

Water Consumption
Most of the water used at our cement plants is forthe cooling of production equipment, exhaust gas
and in-house power generators. Therefore, the water
discharged from the plants is mostly cooling water,which is not polluted as defined in the Water Pollution
Control Act. Our plants near the ocean use seawater
to cool in-house power generation equipment. All the
fresh water used at the plants is circulated and reused,
except for the household wastewater, as we strive to
reduce our water withdrawal and lessen the impact ofwastewater on bodies of water.
Our total withdrawal of fresh water in FY2021 wasabout 27.19 million m3 and our total withdrawal ofseawater about 150 million m3. The seawater wasused to cool in-house power generation equipmentat our plants near the ocean and then released backinto the sea after use. The amount of fresh water
discharged was approximately 13.45 million m3,
meaning that about 13.75 million m3 of fresh water
was used at the plants. However, most of this water is
not used as a raw material and evaporates after being
used to cool equipment or gas.
In FY2021 our fresh water withdrawal to produce 1
tonne of cement was 0.832 m3 (withdrawal per unit ofproduction). There was no great change in our water
consumption efficiency.

Category

R&D costs

Reference guidelines: “GCCA Sustainability Guidelines for the monitoring andreporting of water in cement manufacturing Ver. 0.1” GCCA

Relevant SDGs

 Environmental Conservation Expenditure (Non-consolidated) (Unit: million yen)

(Unit: thousand m3)* A water risk mapping tool developed by the World Wide Fund for Nature(WWF). It is used to evaluate business impacts related to water scarcity,
flooding, drought, seasonal variation, physical water quality risks, regulatory
risks, etc. The maximum score is 5.0, and the higher the score, the greater
the risk.

 GRI303-1, 2, 3, 4, 306-1

78

Environmental Accounting

Details

Appropriate Use of Water Resources

Reduction in CO2 emissions:

2,388 tonnes/year

Hydrated raw material mixing system

System for the sustainable use of water (California)

79

The Environment

Material Balance of the Cement Production Process
Scope of data: The data aggregated are for our four business segments (cement, mineral resources, environment and power generation) collected at our (non-consolidated) quarries
and plants, at the quarries shown below of subsidiaries that supply us with materials (nine quarries of eight companies) and at affiliated companies engaged in the power
generation business (3 companies).

Raw material procurement

INPUT

Total water withdrawal(thousand m3)
Tap waterIndustrial waterRiver water
Ground water
Rainwater
SeawaterPower
Generation
Business

MineralResources
Business

191,429
1,497
4,173
5,306
12,350300
167,803

EnergyCoal
Petroleum coke
Heavy oil
Diesel oil
Other
Recycled fuels
Purchased
electricity

2,225,888t
250,883t
24,262kl
20,544kl
53,805t
1,042,776t
551,542MWh

Ofunato Quarry(Iwate Prefecture)

Buko Mining Co., Ltd.

Buko Quarry(Saitama Prefecture)

Chichibu Mining Co., Ltd.

Mido Quarry(Saitama Prefecture)

Ishizaki Co., Ltd.

Fujiwara Quarry(Mie Prefecture)

Limestone is the only mineral resourcein which Japan is self-sufficient.
Japanese limestone contains highquality calcium carbonate and has
become the source of a stable cement
supply.

Ratios of Japan’s self-sufficiency inother mineral resources- Liquefied natural gas: 2.4%
- Crude oil: 0.3%
- Iron ore: 0%

Utilization of Waste and Byproducts

In our cement production we makeefficient use of blast furnace slag fromsteel mills and thermal power plants,
coal ash, industrial waste such as
plastic and oil from various industries,
ash from incinerated municipal waste,
and disaster waste generated bynatural disasters as recycled materials
for cement. We utilize 402.7 kg ofwaste and by-products to produce one
tonne of cement.

Oita Taiheiyo Mining
Corporation

Shin-Tsukumi Quarry(Oita Prefecture)

Tosayama Taiheiyo Mining
Corporation

Tosayama Quarry(Kochi Prefecture)

Myojo Cement Co., Ltd.

Toumi Quarry(Niigata Prefecture)

Ofunato Power Inc.

Ofunato Power Plant(Iwate Prefecture)

Miwa Quarry(Saitama Prefecture)

Tosa Power Inc.

Tosa Power Plant(Kochi Prefecture)

Kanouyama Quarry(Gunma Prefecture)

Itoigawa Power Inc.

Itoigawa Power Plant(Niigata Prefecture)

Chichibu Taiheiyo Cement
Corporation

Production

Limestone 100% sourced in Japan

Water withdrawal

Ryushin Mining Co., Ltd.

Transportation
Zero Waste from Cement Production

Basically, secondary waste is not generated
since we use flammable waste as a
substitute for fossil energy, and combustion
waste is utilized as a raw material for
cement.
Since cement is fired at a temperature of
1,450℃, hazardous chemicals generated
during the production process, such
such as dioxins and fluorocarbons aredecomposed and detoxified.

Comprehensive Transportation
Network

We possess 9 cement plants, over 100
service stations, and 36 cement tankers inJapan, and provide a stable supply of our
products via our robust manufacturing,transportation and supply chain
infrastructure.

Utilization
Contributions to infrastructure

As stated in The Value of Cement on pages 10 and 11,
cement is used for various purposes to create safe andstable infrastructure that improves people’s daily lives,
makes economic activities more convenient, and protects
communities from natural disasters.

Products by Business
Power Generation
Electric power (sales ofelectricity)

Electric power

Coal, petroleum coke,water, etc.

Power Plants

Mineral Resources

Electric power

Service Stations

Aggregates
Diesel,explosives,
etc.

Quarries

CementBusiness

Environmental
Business

Limestone etc.

Cement products
Coal, purchased electricity,
additives, etc.

Cement Plants

Iron waste
By-productgypsumFly ash, coal ash
Blast furnace slag
Other clay
substitutes

Waste and by-products

195,727t
470,110t

2,125,467t
780,452t
1,696,968t

7,827,271t
4,663,324t
359,604t

Flue-gas
desulfurization

12,029,436t
1,741,877t
529,085t
2,288,118t

Environmental

Ash Centers

Limestone
34,940,122t
Silica1,616,798t
Gypsum
77,888t
Other
11,967t
Waste and By-products

80

Portland cement
Blended cement
Cement based soil
stabilizers
Clinker (for export)

Limestone products

Flue-gas
desulfurization
Fly-ash products

Raw materials
Natural Resources

Aggregates
Limestone products
Other

CementMaterials
Additives, etc.
7,735tExplosives
3,818tRefractory materials
9,017tGrinding media/Steel 2,453t
casingLubricants/Chemicals 3,567kl
Other
34,010t

2,396,837MWh

Fly-ash products

104,585t
156,627t

OUTPUT
CO2 Emissions

NOx Emissions

SOx Emissions

Dust Emissions

Dioxin Emissions

Waste Emissions

Water Discharge

CO2 14,269,840 t
From purchased
electricity

189,608 t

NOx*

SOx*

Dust *

Dioxins*
0.24 g-TEQ

Waste externally consigned for treatment 632 t
Waste sent to landfills
27 t
Valuables such as scrap metals 6,701 t

Wastewater  181,846 thousand m3
Seawater  167,934 thousand m3
Fresh water  13,621 thousand m3
Household wastewater  292 thousand m3

24,020 t

1,538 t283 t

* Cement and power generation businesses only
(excluding purchased electricity)81

S

Collaborating with Society

SocialQuality Assurance ������������������� 84
Supply Chain Management ��������������� 86
Creating a Healthy and Safe Workplace ��������� 88
Stakeholder Engagement ��������������� 91
GCCA Key Performance Indicators ������������ 94
Independent Assurance Report on GCCA Key Performance
Indicators ����������������������� 95

82

83

Collaborating with Society

Quality Assurance

Relevant SDGs

 GRI103-2, 3

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 sincecontinually raised awareness of the policy acrossthe organization. It represents our aspiration tocontinue to be a company that customers trust andrely on by sharing a sense of achievement througheach employee’s actions and by providing highquality products and services, leveraging our hightechnological capabilities and quality assurance
system.

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 (JIS Q9001) certification fromthe Japan Testing Center for Construction Materials.
The scope of our certification encompasses thedevelopment, design and production of a range
of cement, cement clinker and cement-based soil
stabilizer products.
We will continue to fully apply the ISO 9001
approach in addition to our own quality management
system (QMS) and enhance initiatives to strengthen
our ability to continually provide ISO 9001-compliant
products and deliver greater customer satisfaction.

facility to protect the environment of the surroundingarea as well as that inside the plant.
We have already established fixed standards
for the management of heavy metals contained innatural resources, and are constantly enhancing
the control of minor components as the volume ofwaste we receive increases. When we receive new
types of waste or waste from new sources we strictly
apply rules under which we conduct three kindsof inspection related to the source of the waste, its
chemical composition and the results of trial use to
identify any potentially negative impact on productquality or the surrounding environment. We will thenmake a final decision on whether to receive the waste.
These measures help us ensure product safety.

Quality Policy

 Quality Management System

Ensuring Product Safety Following a Nuclear
Accident

All of our employees adopt a global perspective, striving
to boost customer satisfaction and contribute to society
by providing environmentally-friendly products andquality that matches our customers’ needs.
In order to achieve the aims of our policy❶ We develop specific product quality targets basedon our Quality Policy, and disseminate them within
the company.
❷ We focus our efforts and work positively to achieve
the quality targets.
❸ We carefully review the levels of customer
satisfaction and product quality that have beenachieved.
❹ We implement a quality management system andcontinually improve our products.

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. We are further enhancing product quality
control by capitalizing on advanced technologies toensure improved stability such as an online analysis
system for raw materials, clinker and cement, themeasurement of clinker minerals by X-ray diffraction
and our proprietary Taiheiyo Cement Quality
Predictive System (TQPS). Via measures such as
making effective use of industrial waste, we aim for
cement production that pays due attention to theconservation of the global environment.
All of our Portland cement plants in Japan,
including those of group companies, have obtained
ISO 9001 certification, the international standard for84

 GRI416-1, 417-1

Customer

Quality requirements

Sales Division

Sales

Technical Services

Review quality requirements

Distribution
Shipping inspection

Research & Technology Development Division
Clarify quality requirements

Products and technical services

Production Division

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

Quality design in accordance with quality requirements
Prototyping and evaluation

Acceptanceinspection

As a consequence of the nuclear accident at the
Fukushima Daiichi Nuclear Power Station of Tokyo
Electric Power Company Holdings, Inc. in 2011,
we discovered that some industrial waste used formaking cement contained specified radioactive
material. We have established a system to ensurethat the radioactive concentration in cement shippedfrom our plants is below the safety limit* set by theJapanese government by strictly controlling theradioactive concentrations in raw materials and fuels
for cement. In the interest of full disclosure we post
the measurement results on our website every month.
* The Japanese government set a limit of 100 Bq/kg as the safety standard forradioactive concentrations in cement, effective from May 2011.

 GRI416-1

Today every product is expected to be safe;
as a construction material that is indispensablefor developing social infrastructure cement is no
exception. The cement industry has long made use ofindustrial waste and by-products such as blast furnaceslag, 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 our incineration residue recycling system,
we also recycle construction-related soil and wastematerials into raw material and fuel for cement
production. When our cement plants accept
waste we prevent its dispersal and minimize therelease of odor by transporting the waste in a tightly
sealed panel truck and storing it in a fully enclosed(Unit: mg/kg)

FY1988FY2018FY2019FY2020Please see our website for more information about
radioactive concentrations in our products.

https://www.taiheiyo-cement.co.jp/news/sokutei.html(Japanese only)
Provision of Information Using SDS and Labeling GRI417-1

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

FY2021

Average

-

382

448

427

435

409

Max.

-

485

543

504

578

512
326

Fluorine

Min.

-

313

339

355

337

Average

-

81

79

77

84

79

Max.

-

91

88

95

95

85

Total chromium

Water-soluble
hexavalentchromium

FY2017

Min.

-

74

69

64

75

73

Average

17.4

8.3

7.4

8.6

7.9

8.0

Max.

32.3

9.8

9.3

11.4

9.8

11.1

Min.

5.3

7.1

6.0

5.4

6.6

5.5

Average

556

627

530

600

554

609

Max.

1,059

741

659

772

677

734

Min.

137

496

390

449

493

464

Average

221

65

57

62

63

66

Max.

668

89

84

84

77

88

Min.

18

53

41

38

43

39

Average

122

259

223

274

263

267

Max.

233

355

319

415

359

442

Min.

17

154

162

163

181

168

Average

17

14

12

18

13

15

Max.

39

39

43

47

28

47

Min.

2

4

2

6

7

6

Average

-

0.5>

0.7

0.5>

0.8

0.8

Zinc

Lead

CopperArsenic

Selenium

Max.

-

0.5>

1.2

0.5>

0.9

0.9

Min.

-

0.5>

0.5>

0.5>

0.6

0.5>

Average

1.5

1.5

1.3

1.3

2.0

1.7

Max.

2.6

2.0

2.0

2.0

3.0

2.0

Min.

0.6

1.0>

1.0>

1.0>

1.0>

1.0>

Cadmium

Average-0.005>

0.008

0.005>

0.007

0.010

Max.

-

0.005>

0.015

0.005>

0.011

0.020

Min.

-

0.005>

0.005>

0.005>

0.005>

0.005>

Mercury

 Minor Components of Ordinary Portland Cement* Numerical values are our averages for FY2021（mg/kg）

Material Procurement

Safe Cement and Cement Products

 Minor Components of Ordinary Portland Cement

700
600
500
400
300
200
100
90
80
70
60
50
40
30
20
10
1
0.8
0.6
0.4
0.2
0

609
409

267

79

66

15

8.0

0.8

1.7

0.010
Fluorine

Total Water-soluble Zinc
chromium hexavalentchromium

Lead

Copper Arsenic Selenium Cadmium Mercury

85Collaborating with Society

Supply Chain Management

Fundamental Policy
 GRI-102-16

We believe that we grow along with our business
partners. In order that we may build relationships of
mutual trust and work in tandem with our business
partners, our dealings with them are based on faircontracts and we strictly adhere to our agreements.
We formulated our Business Principles to clearly
establish our stance towards fair trade. They state“We will act in an ethical manner and abide by thelaws and regulations of those countries in which
we operate.” Accordingly, we affirm the following
commitments in the “Dealing outside the company ingood faith” section of our Standards of Conduct.
❶ We will conduct fair marketing and bidding, andnot engage in unfair practices such as collusionand cartels.
❷ We will maintain appropriate and transparent
relationships with our contractors.
❸ We will select business partners in a fair andequitable manner.
❹ We will not offer entertainment or gifts to customers
that go beyond what is legally and socially acceptable.
❺ Our advertising, displays and briefing sessions will
be honest and sincere.
❻ We will respond appropriately to customer feedback.
❼ We will maintain transparent relationships withgovernments and local authorities.
❽ We will respect the cultures and customs of theplaces where we operate.
Our supply chain management is in accordancewith those commitments.
In addition, we established the Basic Policy
Concerning Procurement in October 2017 toconsolidate commitments 2 (“We will maintainappropriate and transparent relationships with ourcontractors”) and 3 (“We will select business partners
in a fair and equitable manner”), and request ethicalconduct from our contractors.
Please see our website for more information about
the Taiheiyo Cement Basic Policy Concerning
Procurement.

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

CSR-ESG Initiatives  Collaborating with Society Supply Chain Management

In response to the strengthening of international
regulations against acts of bribery, and to strengthen
our initiatives against corruption as stated incommitments 4 (We will not offer entertainment or
gifts to customers that go beyond what is legallyand socially acceptable) and 7 (We will maintaintransparent relationships with governments and local
authorities), we established our Anti-Bribery Policy in86

Relevant SDGs

January 2017, and concurrently released a statementby our president proclaiming the group’s stanceagainst bribery.
Please see our website for more information about
the Taiheiyo Cement Basic Policy Concerning
Procurement.

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

CSR-ESG Initiatives  Risk Management and Compliance Compliance Guidelines

Our Business Partners
 GRI102-9

Our main business activities are involved withcement and concrete. Limestone is the main raw
material used and group companies are largely
in charge of such aspects as the operation andmanagement of the quarries. Coal, however, which isa source of thermal energy and also part of the raw
materials we use, is sourced from companies outside
the group. Moreover, the waste and by-productsthat we recycle in our cement production process
come from many different industries and a variety oflocations.
Most of our production divisions are mechanized,
and there are almost no labor-intensive processes.
Tasks such as production equipment maintenance areoutsourced to partner companies and contractors as
and when necessary.
Our cement products are mainly marketed tobuilding materials companies. Raw materials andproducts are transported by group companies andalso companies outside the group.
In our business activities we strive to communicate
closely with the local governments of the countries
and regions where our business sites are located.
We deem it essential that our supply chain respects
human rights, in particular the banning of forcedlabor and child labor, complies with laws andresponds to demands.

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

Operations at our cement production sites andquarries are increasingly being mechanized. Sincesome tasks are performed in elevated places or athigh temperatures, ensuring worker safety at our
production sites is essential for stable operations. We
do our best to ensure that employees of contractors
working at our sites avoid any accidents. They receive
various types of training when they start work at thesite, are required to submit a work plan that includes
a safety plan, and are given guidance with regard tothat plan.

Strengthening Our Relationship with Our
Customers
We place the highest priority on achieving greater
customer satisfaction. Business units periodicallyexchange information and link up to strengthen
production focused on quality that meets customer
expectations.
We gather information about customer demands
concerning product quality and services such asdelivery from our sales and technical staff at branches
and sales offices. We then analyze that information,
make improvements, and provide feedback. To
encourage overseas customers to adopt our highquality products we have started to incorporate local
needs into product quality, just as we do for domestic
customers, and we are fine-tuning our products tomeet the requirements of each overseas market. We
respond sincerely to every quality issue raised by ourcustomers, and strive to improve product quality andcustomer satisfaction. We actively identify potential
quality risks, investigate their causes and implement
stringent cross-divisional countermeasures with the aimof establishing an even more reliable quality assurance
system.
In addition, we are expanding our quality assurance
system to include the products of our groupcompanies as well as Taiheiyo Cement Corporation
products. We systematically strive to identify andaddress material issues via cross-divisional initiatives,and aim to boost the reliability of the Taiheiyo brand as
well as customer satisfaction.

User Societies and Industry Associations
 GRI417-1

We have founded and manage various cement user
societies and industry associations that support themin vitalizing their business operations and developing
technological competitiveness. The National Taiheiyo
Cement Ready-mixed Concrete Society, the largestof these user societies, is made up of ten Taiheiyo
Cement Ready-mixed Concrete Societies, in locations
ranging from Hokkaido to Kyushu, and engages invarious activities. We hold technical sessions andpresentations, as well as conduct activities under
specific themes suited to local conditions. We also
focus on providing support for 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 have established other associations such as
the Taiheiyo Cement Association for the Paving
Block Industry and SPLITTON Association Japan toproactively deliver technical support for the mutual
development of concrete product companies. We willcontinue to support activities that benefit cement users.

Initiatives of the Taiheiyo Cement Association for the Paving Block Industry
Labor shortages are becoming more severe in various
industries over the past few years, and the paving blockindustry also needs to take swift measures to boost
productivity and save labor. Accordingly, this association is
engaged in initiatives focusing on construction, a field where
there seems to be a particularly large number of issues.
In other countries it is the norm for blocks to beconstructed using specialized machinery, but in Japan there
are still companies where such equipment has yet to be
adopted and individual blocks are made manually by skilledworkers. The Taiheiyo Cement Association for the Paving
Block Industry therefore held a virtual tour on the internet
to show the construction process using a German-mademachine, and shared information with association members
nationwide with the aim of encouraging the adoption ofsuch equipment in Japan.
The association is already engaged in initiatives aimed
at enhancing the performance of interlocking roadway
blocks, and is now moving forward with the reappraisal of
performance costs, trial construction and durability tests withthe aim of establishing performance regulations.
The Taiheiyo Cement Association for the Paving Block
Industry will continue to aim for sustainable growth, and willcontribute to environmentally-friendly and pleasing urban
development by promoting the use of paving blocks via its
nationwide membership network.

Activities of the National Taiheiyo Cement Ready-mixed Concrete Society
RegionDetails

Hokkaido

A survey of fixed-term certification maintenance reviews

TohokuPublished “Examples of Responses to Complaints Seeking
Compensation & Preventive Measures, Plus a Compilationof the Forms Used by Each Company”

Tokyo

Technical presentations given online and distributed in
DVD format

Kanto

Technical reviews at plants belonging to association
members in each prefecture, publication of collected
papersHokuriku

Discussion of technical challenges and countermeasuresat plants belonging to association members

Chubu

Lecture in response to the JIS revision to “How to Create
Samples for a Concrete Strength Test”

Kansai

Survey regarding training drills

Shikoku“Ingenuity Contest” for examples of improvements todaily tasks at plants belonging to association members

Chugoku

Published “100 Questions It’s a Bit Late to Ask about
In-house Regulations”

KyushuPublished Q&A compilation “Exploring the Mysteries ofConcrete!” (2nd Edition)87Collaborating with Society

Creating a Healthy and Safe Workplace

Health & Safety Policy
Our Health & Safety Policy is shown below. Under
this policy our headquarters and business sites review
and revise health and safety management regulations
each fiscal year.
Taiheiyo Cement Health & Safety Policy
Taiheiyo Cement Corporation recognizes that ensuring thehealth and safety of our employees is a cornerstone of ourcompany. We invest appropriate management resources
to the prevention of work-related accidents and diseases inaccordance with the Industrial Safety and Health Act and theMine Safety Act, and efficiently implement the fundamental
policies shown below.
Fundamental Policies❶ Promote health and safety activities through cooperation
between management and labor, with the aim ofeliminating work-related accidents.
❷ Ensure the health and safety of our employees andthose of our contractors by complying with health andsafety-related laws and regulations, the health and safety
management regulations created by us, and health andsafety regulations created by our business sites.
❸ Strive to improve the level of health and safety by actively
promoting the implementation and operation of our
Occupational Safety and Health Management System,
and by continually ensuring the fundamental safetyof our work and equipment, providing education andtraining, and raising awareness of health and safety.
❹ Constantly improve workplace environments and work
procedures by applying improved technologies andnew health and safety information via the companywide, business site and group affiliate health and safetycommittees.
❺ Ensure health and safety throughout the Taiheiyo
Cement Group by promoting action to eliminate workrelated accidents under the leadership of the companywide, business site, and group affiliate health and safetycommittees.

Health & Safety System
Under the Taiheiyo Cement Health & Safety Policy
we establish health and safety management regulations
that cover the basic principles of the group’s health andsafety management, and promote health and safety
activities. The aim is to create comfortable working
environments while also ensuring the health and safetyof our employees and those of our contractors at thegroup’s business sites and other locations.
We established the Company-wide Health &Safety Committee, chaired by the officer in chargeof safety, as a Specialized Committee under the
CSR Management Committee, which is itself under
the direct oversight of the Board of Directors. The

88

Relevant SDGs

Company-wide Health & Safety Committee supervises
health and safety activities held by our various
business locations. It also collects safety-related datafrom not only the company itself but also our groupcompanies and provides guidance.
All plants, quarries and branches under thejurisdiction of our divisions at Headquarters, and allgroup companies, have a health and safety committee
consisting of representatives from both management andlabor, as well as a cooperative committee promoting thehealth and safety-related activities of each business site.
Health and safety management at cement plants,
mines and quarries in Japan is carried out by our
OSHMS*.
*OSHMS (Occupational Safety and Health Management System): Guidelines
issued by the Ministry of Health, Labour and Welfare in 1999. A framework
for reducing potential dangers at workplaces and promoting comfortable
work sites by autonomously practicing continuous, uninterrupted health andsafety management.

 Health & Safety System

Any work-related accident is reported to theCompany-wide Occupational Health & Safety Committee
immediately, regardless of how insignificant it may seem.
We promptly post the details of any accident on the groupbulletin board as a step towards avoiding any recurrence.
We have maintained a work-related accident
database since FY2009. It covers accidents involving
employees of the company and group companies aswell as the employees of all our contractors, including
temporary workers. It categorizes accidents according to
the “4 Ms” (men, machines, methods and management),
analyzes the causes of unsafe behavior and situations,and systematically stores work-related accident review
reports that include details of the countermeasurestaken. The database is also translated into English andChinese so that it can be widely used at our overseas
business sites.

that fact, we will add periodic patrols accompanied by
guidance to our measures against accidents caused bybreaking the rules, and will analyze the rule-breaking
behavior and improve areas such as our training,equipment and codes of practice. We will measure
WBGT values (heat indices) at each work site and takemeasures against heatstroke such as establishing a set
frequency for breaks.
When we reviewed accidents according to type, we
found a big decrease in those involving being trappedby or dragged into equipment. However there are still
many cases of falls that lead to serious accidents so weare taking measures to prevent recurrence. We also
reviewed work-related accidents according to yearsof experience, and found that 41% of the accidents
involved workers with three years of experience or
less. In recognition of this issue we are taking steps toimprove safety guidance for less experienced workers.

 Work-related Accidents Registered in the Database Absence Rate(Accidents)

Board of Directors

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

Specialized committees

Headquarters Central Research
Each plant
Health & Safety Laboratory Health & Health & Safety
Safety Committee
Committee
Committee

Each branch
Health & Safety
Committee

Each mine and Group companies Health &quarry Safety
Safety Committee
Committee
Safety Committee

The Health and Safety
Cooperative Committee

Accident Prevention
Cooperative Committee

Safety Cooperative
Committee

Safety Operation Officer Certification System

Since FY2008, we have been using the Safety
Operation Officer System which emphasizes theimportance of improving leadership capabilities toreduce work-related accidents. This system provides thecertification as a safety operation officer that is required
for leaders of work groups. To further improve thecapabilities of those leaders, as of FY2016 we requireparticipants in the certification seminars held at theplants to have completed the foreman training course
stipulated in the Industrial Safety and Health Act.

Health and Safety Training

We have established procedures for the
implementation of health and safety training, and arecommitted to providing such training so that work
can be carried out safely. Training is provided at all
our business sites. It can be categorized into training
for newly-hired employees, training for newly-hired
employees with professional experience at anothercompany, specialized courses, training for newlyappointed managers, skills training, and training forcontractors when they start work at a site.

Fatal

150
120
90

Departments at Headquarters

Contractors

Work-related Accident Reports and Database95

Leave of absence required103

No leave of absence required
121

87(Unit: %)FY2017FY20180.448

Absence rate

0.458

FY2019FY2020

0.647

0.580

Work-related Accidents

30

Japan

By region

2017

2018

2019

2020

2021

(FY)

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

FY2021

0.337

94

60

0

Non-consolidated

The Company-wide Health & Safety Committee set
the following objectives for FY2021: zero fatalities, limit
lost-time injuries to 30 or less and the total number ofwork-related accidents to 80 or less, while also setting
the absence rate in the 0.5% range. We therefore
engaged in health and safety promotion activities with afocus on: (1) improving the level of safety management
at group companies in order to achieve our CSR
Objectives for 2025, (2) eliminating accidents causedby breaking the rules, (3) eliminating heatstroke-related
accidents, (4) preventing the recurrence of similar
accidents, (5) complying with safety-related legislation,and (6) preventing the spread of COVID-19 infections(preventing employees from becoming infected or
infecting others).
As a result, we had zero fatalities for the third year
in a row, and achieved an absence rate of 0.337%,
thus attaining those objectives. However, there were
42 lost-time injuries and the total number of workrelated accidents was 121, so we did not attain thoseobjectives. Although we had identified accidents causedby breaking the rules and heatstroke-related accidents
as key issues for FY2021, they represented 36% of thetotal number of work-related accidents. In response toFY2018FY2019FY2020

11

5

6

2

84

Overseas

By gender

98

81

92

FY2021

117
4

Male

90

99

83

89

120

Injury

88

98

83

79

103

42

41

45

FemaleInjury or sickness(Unit: occurrences)

FY20175

Sickness

Our employees or Our employees
contractors
Contractors

7

53

4

4

5

62

5

4

15

42

54

40

1

18

52

69

 Breakdown of Accidents by TypeFY2020

Other
15%

Contact with high or
low temperature
objects
17%
Cuts and scratches
4%

Falling
over14%

FY2021

Being trapped byor dragged into
equipment
27%
Falling17%
Flying/falling
object6%

Being trapped byor dragged into
equipment
14%

Other
24%

Falling17%

Contact with high or
low temperature
objects
18%

Cuts and scratches 4%

Fallingover10%

Flying/ falling
object13%

 Characteristics of FY2021 Accidents
Cause of accident

By years of experience

Rule breaking
21%

Other
64%

Heatstroke
15%

Others59%

Relatively
inexperienced(3 years
experience or less)41%

89Collaborating with Society

Creating a Healthy and Safe Workplace

Stakeholder Engagement
Relevant SDGs

Main Activities (FY2021)

Improving Equipment to Prevent the Recurrenceof Accidents

When we classify accidents by type, every year ahigh proportion of them are due to falls. Since a highproportion of such accidents in FY2021 were due
to falls from concrete mixer trucks, representatives
from the Companywide Health & Safety
Committee visited
Asano Concrete
Corporation, acompany that is making
progress in initiatives
to tackle this issue.
We are disseminating
information about their
excellent initiatives
Measures to prevent falls
laterally throughout the(Asano Concrete Corporation)group.

equipment such as VR (virtual reality) devices at all ourcement plants for employees to experience simulated
dangers related to safety harnesses, rotating
equipment, electricity and heavy objects hanging
from a crane. We also set up a system that can provide
effective training for younger or less experienced
employees. We also make this equipment available tocontractors and group companies upon request.

In order to boost the safety awareness of ouremployees we hold safety training where theyexperience risks inherent in familiar operations. In
FY2019 we introduced experiential safety training

90

703

1,470

 Explanatory meetings for local residents    Environmental briefings  
 Environmental monitoring system    Cleanups   Activities to protect forests and the local natural environment

Promotion of
local culture andcommunication

760

23,462

 Guided tours of plants, mines and quarries    Opening facilities to the public   Sponsoring, participating in and cooperating in local events

Regional
development

194

3,406

 Provision of materials and lending of heavy machinery   Support for community medical services   Support for the development of local industries    Disaster prevention activities

Education andhuman resource
development

51

321

 Scholarships    Engineer training    Internships and work experience programs

Support for areas
affected by disasters

13

22

 Assistance for disaster-stricken areas Elimination of yellow rocketcress,
an invasive foreign species on Mt.
Fujiwaradake
As one of our business activities based on
environmental assessments for the developmentof quarry sites, we participated in action to protect
the rare plant species of Mt. Fujiwaradake. We
participated in the pulling out of an invasive foreign
species (yellow watercress) as well as using quarryroads to transport the removed plants and helping
to supply equipment required for their removal
such as sacks and protective gloves.

Experiential safety training using VR

Safety Training DVD

We made a DVD in Japanese, English andChinese called The Promise of the Seven Safety
Principles about prohibited actions that could leadto serious accidents. Its visual format makes it easy tounderstand and it is usedin training for people
who have just stared
working at a plant, forexample.

Preventing Heatstroke

Experiential Safety Training

Conservation of the
global environment

Examples of activities(Fujiwara Plant)

The Promise of the Seven Safety
Principles

Safety patrol (Maruse K.K.)

No. ofparticipants

Conservation of the global environment

Expanding Safety Activities to Group Companies

The Company-wide Health & Safety Committee
provides support for safety activities at groupcompanies. It started conducting safety surveys
in FY2019, and carried out surveys of the group’s
ten business sites in Japan and five sites overseas
in FY2020. As a result of measures introduced toprevent the spread of COVID-19, surveys were only
conducted at two business sites in Japan in FY2021.
We are carrying out safety surveys at the businesssites that could not be surveyed in FY2021, and will
move forward with action to improve safety.

No. of times
held

Theme

As a measure to prevent heatstroke we madeprototype workwear that ismore sweat-absorbent
and dries faster, andwe confirmed its
effectiveness. We madefurther improvements
and assessments in
FY2022, and plan tobring it into use inPrototype workwear (Taiheiyo Cement
FY2023.

 Expansion of a project toconvert a former mining site
to farmland
(CalPortland Company, USA)

CalPortland Company is expanding a
project at its Garey Aggregate Plant torefill a former mining site and convert it
into farmland. Mud that has accumulated
at the bottom of a sedimentation basin
is being dredged and used as soil for
farming. So far approximately 120 hahave been converted to farmland.

Corporation)91Collaborating with Society

Stakeholder Engagement

Promotion of local culture andcommunication

Education and human resource
development Donation of cement for maintaining residential
roads in Nghệ An Province (Nghi Son Cement

The commercial and industrial associations of Inabe, Toincho,
Asake, Kuwanasansen, and the Federation of Mie Prefecture
Commercial and Industrial Associations sponsored aninteraction between approximately 320 first year students at
Inabe Sogo Gakuen High School and around 20 commercial
and industrial enterprises with business premises in thearea under their jurisdiction. The enterprises that applied toparticipate sent representatives to go into the classrooms andexplain about their company.

Between 2020 and 2021 Nghi Son Cement Corporation has
donated 5,000 tonnes of cement to the village of Quỳnh Lộc
where its quarry is located.
The local people have expressed their gratitude for the cement
which is being used to build residential roads and drainage
facilities.

In February 2021, an employee in our Mining Department heldan optional outreach class about cement for sixth-graders at
the elementary school attended by their son. The outreach classexplained in simple terms about the role played by cement inour daily lives, and raw materials such as limestone.

 Inspection tour by Roy Cimatu, Secretary ofEnvironment and Natural Resources Food aid for local residents Scholarships for local elementary and middle
school pupils Donations of food and hygiene products tolocal residents (Taiheiyo Cement Philippines, Inc. andOn August 21 2020, Roy Cimatu, Secretary of Environment andNatural Resources, who had been invited to visit the Provinceof Cebu, paid a visit to Taiheiyo Cement Philippines, Inc. andSolid Earth Development Corporation after an inspection tourof mines and quarries in the province. Both companies havecontinued operations despite the COVID-19 pandemic, andhe inspected their management methods, and CSR initiatives
to protect the environment and ensure employee health andsafety. He was full of praise for both companies.

Ever since 2012, the Mojave Plant of CalPortland Company
has made an annual donation to a food bank in Mojave,
California where the plant is located. The donation goes toward
Thanksgiving Dinner baskets for low-income households inthe city. Volunteers deliver the baskets individually, and many
recipients express their gratitude each year.

As an expression of gratitude to local residents who cooperatewith its plant and quarry operations, since 2004 Nghi Son
Cement Corporation has endowed the Nghi Son Cement
Scholarship for children who have lost a parent through an
accident or ill-health.

Taiheiyo Cement Philippines, Inc. and Solid Earth Development
Corporation donated food aid such as rice and canned
products to people suffering from the impact of the COVID-19
pandemic in Cebu Province. They also donated 1,000 masks
and 20 thermographic devices sent by Taiheiyo Cement
Headquarters.

Corporation, Vietnam)(CalPortland Company, USA) An outreach class about our cement businessheld at an elementary schoolSupport for areas affected by disasters Explanatory meeting about the company held
as part of an interaction between high school
students and local companies (Fujiwara Plant)(Taiheiyo Cement Philippines, Inc. and Solid EarthDevelopment Corporation)

92

Regional development(Mining Department, Headquarters)(Nghi Son Cement Corporation, Vietnam)

 Setting up a sandbag station and contributing
to local disaster prevention (Chugoku Branch,
Maruse K.K)

The Maruse K.K. Satou Plant is located in a residential area
and in the vicinity of a preschool. The plant aims to coexist
harmoniously with the local community, and set up a sandbag
station in the plant car park as a measure to protect housesin the event of localized flooding. The station has been in
operation since March 2021 and local residents can make freeuse of the sandbags to protect their homes.

Solid Earth Development Corporation)

93Collaborating with Society

GCCA Key Performance Indicators

Independent Assurance Report on GCCA Key Performance Indicators

 GRI301-2, 302-1, 3, 303-1, 305-4, 5, 7, 403-2, 9, MM2

 GRI102-56

The Taiheiyo Cement Group's performance with regard to CO2 and climate protection, emissions monitoring andreporting, health and safety, and water has been subjected to an independent limited assurance review by KPMG
AZSA Sustainability Co., Ltd.

CO2 Emission Reduction Target

Target for the Reduction of Main Air Pollutants

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

Emissions from the main stacks of kilns at the cement
production sites of Taiheiyo Cement and group companies

Reduce specific net CO2 emissions
by 10% or more from FY2001 levels by FY2026.
CSR Objectives for 2025

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

 FY2021 Key Performance Indicators (KPI)*1

CO2 and Climate Protection (CO2 emissions, energy consumption)
Number of facilities using the GCCA “The Cement CO2 and Energy Protocol” guidelines for emissions inventory
Ratio of facilities using the GCCA “The Cement CO2 and Energy Protocol” guidelines for emissions inventory (%)
Scope 1 emissions*2
Total CO2 emissions (million tonnes/year)
Gross emissions*3
Net emissions*4
Gross emissions
5
CO2 emissions per tonne of cementitious product* (kg-CO2/t-cementitious)
Specific net emissions
Emissions from electricity purchased (million tonnes/year) (Scope 2 emissions)
Specific heat consumption of clinker production (MJ/t-clinker)
Alternative fuel rate: Ratio of alternative fuels used by kilns (% of thermal energy consumption)
Biomass fuel rate: Ratio of biomass fuel used by kilns (% of thermal energy consumption)
Clinker/cement (equivalent) factor: Ratio of the total clinker consumption and cement produced, calculated according to the GCCA Cement CO2 and Energy Protocol guidelines

FY2019
18
100
24.8
23.5
22.6
696
671
0.963
3,268
12.0
1.8
82.8

FY2020
18
100
25.0
23.7
22.8
701
675
0.896
3,298
12.3
1.8
82.8

FY2021
17
100
24.0
22.7
21.8
701
675
0.855
3,321
12.2
2.0
82.4

Use of Alternative Raw Materials
Alternative raw materials rate: Consumption of alternative raw materials, as a percentage of total raw materials for
cement and clinker production (%, calculated on a dry weight basis)

FY2019FY2020

FY2021

Health and Safety*6
Fatalities
Number of fatalities for directly employed personnel
Fatality rate per 10,000 directly employed personnel
Number of fatalities for indirectly employed personnel (contractors and subcontractors)
Number of fatalities involving third parties (not employed)
Lost-time injuries
Number of lost-time injuries for directly employed personnel
Injury frequency rate of directly employed personnel (per million working hours)
Number of lost-time injuries for indirectly employed personnel (contractors and subcontractors)

FY2019Emission Monitoring and Reporting
Percentage of clinker produced by kilns covered by a monitoring system, either continuous or discontinuous, forthe main and other pollutants
NOx
Percentage of clinker produced by kilns which have adopted continuous measurement forSOx
the main pollutants
Dust
NOx
Total emissions (tonnes/year)
SOx
Dust
NOx
Specific emissions (g/t-clinker)
SOx
Dust

FY2019Impact on Local Communities
Percentage of sites with community engagement plans in place
Percentage of active sites with appropriate quarry rehabilitation plans in place
Number of active sites where biodiversity issues are addressed
Water
Withdrawal (thousand m3)
Discharge (thousand m3)

Fresh water
SeawaterFresh water
Seawater

16.0

15.5
FY202015.8
FY2021

0
0
1
0

0
0
1
0

0
0
0
0

8
1.01
8

9
1.16
7

15
1.27
18

FY2020

FY2021

100

100

100

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

100
83.3
100
34,758
1,139
544
1,282
42
20

FY2019100
100
3

FY2020100
100
3

FY2021
100
100
3FY201926,656
149,776
12,167
149,781

FY202027,607
147,372
13,674
147,377

FY2021
27,192
146,232
13,447
146,368*1 The KPI report for FY2021 is in accordance with “GCCA Sustainability Guidelines for the monitoring and reporting of CO2 emissions from cement manufacturing Ver. 0.1,” “GCCA Sustainability
Guidelines for the monitoring and reporting of safety in cement manufacturing Ver. 1.0,” “GCCA Sustainability Guidelines for the monitoring and reporting of emissions from cement manufacturing
Ver. 0.1,” and “ GCCA Sustainability Guidelines for the monitoring and reporting of water in cement manufacturing Ver. 0.1.” With regard to CO2 and climate protection, emissions monitoring andreporting, and water, we have aggregated data from cement plants and quarries belonging to Taiheiyo Cement and our subsidiaries. With regard to health and safety, we have aggregated data from
Taiheiyo Cement, the cement businesses of our 55 subsidiaries and affiliated companies, and the construction materials, aggregates, and ready-mixed concrete businesses of those amongst our 55
subsidiaries and affiliated companies that are considered to be business sites required to submit accident reports under our health and safety management regulations. *2 CO2 emissions that are notincluded in the items for disclosure mandated by the GCCA but are derived from raw materials and fuels in the cement manufacturing process (including from in-house power generation) and fallunder Scope 1. *3 CO2 emissions derived from raw materials and fuels in the cement manufacturing process (excluding CO2 emissions generated from in-house power generation). *4 CO2 emissions
derived from raw materials and fuels in the cement manufacturing process (excluding CO2 emissions generated from alternative fuels and in-house power generation). *5 Cementitious product: Sum
total of clinker and admixtures *6 Since the aggregation range of “GCCA Sustainability Guidelines for the monitoring and reporting of safety in cement manufacturing Ver.1.0” has been expanded toinclude companies that manufacture cement-related products, as of FY2021 the Taiheiyo Cement Group includes in our aggregation subsidiaries and subsidiaries and affiliated companies that arealso considered to be business sites required to submit accident reports under our health and safety management regulations.

9495

Financial Data

Financial and Non-financial Highlights
Financial Data

Non-financial Data

Net Sales, Operating Income, and Operating Income on
Net Sales
Net Sales (billion yen)
Operating Income (billion yen)
Operating income on net sales (%)

916.0

871.1

798.5
63.2

65.1

7.9

2017

7.5

2018

863.9

Lost-time Injury Frequency Rate
(Per million working hours)

7.4

6.9

2020

59.8

2021

64.3

(FY)

2017

64.3

6.3

5.9

2018

1,044.2

1,032.9

1,034.4

1,020.1

1,015.4

63.6

61.0

7.2

2019

Prevention of Accidents

No. of Fatal Accidents

Total assets (billion yen)
Ordinary income (billion yen)
Return on assets (ROA) (%)

884.3

66.0

Total Assets, Ordinary Income, and Return on Assets
(ROA)

6.3

2019

65.7

60.5

2

2

2017

2018

0.97

2020

2021

(FY)

Cash Flow

0

0

0

2019

2020

2021

0

2026

(FY)

47.5
38.5

14.0

10.2

43.4

10.7

46.8
39.1

9.2

Reduction Rate of Specific Net CO2 Emissions (%)

94.4
84.0

107.6
59.2

10.3

2018

2019

2020

2021

90.9

(FY)

2017

110.4

10.0
8.9
7.2

7.8

8.3

15.5

8.3

-58.0
2019

2020

-65.5
2020

2021

(FY)

Reduction of Greenhouse Gas Emissions

15.5

16.0

15.5

25.3
13.1

2018

2019

Alternative raw materials
Alternative fuels

62.5

39.2

2018

Ratio of Alternative
Raw Materials and Fuels

-10.3
-48.4

2017

97.2

2017

Please see notes 1 and 6 on P94 for the scope of the aggregation.

Cash ﬂow from operating activities (billion yen)
Cash ﬂow from investment activities (billion yen)Free cash ﬂow (billion yen)Proﬁt attributable to owners of parent (billion yen)
Return on equity (ROE) (%)

1.01

0.87

1.27

6.3

5.9

CSR Objective

Profit Attributable to Owners of Parent and Return on
Equity (ROE)

1.16

13.5

13.8

15.8

14.1

14.2

2020

2021

-47.8
2021

(FY)

2017

2018

2019

2020

2021

2026

(FY)

2017

2018

2019

(FY)

CSR Objective

Interest-bearing Debt and Net Debt/Equity Ratio (DER)

Capital Expenditure and Depreciation

Interest-bearing debt (billion yen)
Net debt/equity ratio (DER)

Female: 1,595
12.7%

77.6
279.6

266.1

0.8
0.6

0.5

Number of Employees by Gender(Consolidated, as of March 31, 2021)

Capital expenditure (billion yen)
Depreciation (billion yen)

340.9
288.6

Workplace Diversity

Ratio of Female to Male Employees (%)(Non-consolidated, as of March 31, 2021)

0.5

248.1

54.3
44.4

58.0
44.0

67.7

44.0

10.0

66.0

48.8

8.6

52.6
7.1

0.4

9.0

9.0

Total:

12,586

7.8

Male: 10,991
87.3%
2017

2018

2019

2020

2021

(FY)

2017

2018

2019

2020

2021

(FY)

2017

2018

2019

2020

2021

2026

(FY)

CSR Objective

96

97

Financial Data

Primary Consolidated Financial Data (11-Year)
FY2011
Statement of Income (million yen)
Net sales

Operating income
Ordinary income

Profit attributable to owners of parent

Financial Condition (million yen)
Net assets

Total assets

Interest-bearing debt

Per Share Data* (yen)Book-value per share

Earnings per share

Cash Flow (million yen)

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Cash and cash equivalents at end of fiscal year

Financial Indicators (%)

Operating income on net sales

Return on assets (ROA)(ordinary income)Return on equity (ROE)
Equity ratio

Other (million yen)
Capital expenditure
Depreciation

R&D expenses

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

726,475
16,4337,412
4,450

727,849
29,185
18,496
7,845

747,616
40,65932,667
11,329840,288
70,43469,59035,223842,848
65,40667,89044,114

835,359
60,43360,22536,404

798,588
63,23559,80247,597871,113
65,12964,36638,525916,071
66,01264,30643,452

884,350
61,00860,541
39,151

863,90363,61065,74446,800166,819998,741
566,171

196,144982,231510,184

219,826
982,473473,959

273,3121,015,564
435,118

347,490
1,040,602
399,138

357,073
1,014,075
394,497

400,034
1,015,415
340,930

432,326
1,020,111
288,606

450,645
1,034,428
279,615473,241
1,032,923
266,115

506,8211,044,227
248,102

1,492.8
47.3

1,380.9
71.6

1,558.5
92.2

1,955.7286.7

2,463.1
359.1

2,591.1
296.3

2,930.2
383.9

3,193.7
311.4

3,388.4
351.7

3,567.6
319.9

3,971.3
387.8

94,43390,902

51,974

107,683(48,460)(65,818)
44,97636,995
14,177(100,480)
61,26536,62461,50588,55877,00075,627(17,252)(16,441)(27,926)(31,377)

59,78554,40855,60450,645(4,027)50,072(19,227)(51,792)(62,269)(52,713)(71,099)(10,394)(81,855)(58,025)(65,534)

50,08445,748110,403(47,809)(43,952)
63,81997,283(33,753)(29,436)

2.3
0.7
3.0
14.1

4.0
1.9
5.1
17.3

5.4
3.3
6.3
19.5

8.4
7.0
16.3
23.7

7.8
6.6
16.3
29.1

7.2
5.9
11.7
31.4

7.9
5.9
14.0
35.6

7.5
6.3
10.2
38.7

7.2
6.3
10.7
40.1

6.9
5.9
9.2
42.3

7.4
6.3
10.3
45.1

32,42943,097
4,022

35,785
41,624
3,684

32,52439,422
3,846

39,09440,553
4,052

42,16042,401
4,422

44,076
43,9574,228

54,38444,4594,538

58,08744,003
4,452

67,79644,008
4,311

77,677
48,863
4,431

66,003
52,683
4,606* 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

14 Medium-Term Management Plan

17 Medium-Term Management Plan

20 Medium-Term Management Plan

Business Restructuring in Light of the
Abandonment of Quantitative Targets Listed
in the 10 Medium-Term Management Plan

Business Strategies
Fulfill our social mission

Business Strategies

Business Strategies

FY2018 Results

FY2021 Results

Faced with a harsh business environment
due to a far sharper decline in domestic cement
demand than had been anticipated, we decided
to abandon the quantitative target for the final
year of the 10 Medium-Term Management Plan
(which ended in FY2011) and to implementbusiness structural reforms aimed at creating a“new Taiheiyo Cement.”

Main business restructuring measures, andconsequent improvement in income

R eview and restructuring of our production 16 billion
yen/yearsystem in Japan
Improvement
R eview of our organizational and personnel
systemsR eview of our domestic cement sales
structure and streamlining of logistics

98

FY2013-FY2015(Make maximum contributions to projects
related to recovery from the Great East Japan
Earthquake)

Pursue our main businesses(Establish sustainability in the domestic cementbusiness and fulfill our responsibilities as partof a social infrastructure industry)

FY2016-FY2018

Enhance existing businesses, andformulate and implement growthstrategies
Strengthen management foundations
Provide support for national projects
Enhance research and development

FY2019-FY2021

Strengthen the earnings capacity ofexisting businesses
Formulate and implement growthstrategies
Provide support for national projects

Expand our growth fields(Promote our materials business, and further
advance our overseas business expansion)

FY2015 Results Operating income on net sales: 7.8%
 ROA (ordinary income): 6.6%
 Net DER: 1.1

 Operating income on net sales: 7.5%
 ROA (ordinary income): 6.3%
 Net DER: 0.6

 Operating income on net sales: 7.4%
 ROA (ordinary income): 6.3%
 Net DER: 0.4

99

Financial Data

Consolidated Balance Sheets(Unit: million yen)

Item

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims - operating
Merchandise and finished goods
Work in process
Raw materials and supplies
Short-term loans receivable
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plants and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures (net)
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment andvehicles (net)Land
Leased assets
Accumulated depreciation
Leased assets (net)
Construction in progress
Other
Accumulated depreciation
Other (net)Total property, plants andequipment
Intangible assets
Goodwill
Other
Total intangible assets

End of FY2020(As of March 31, 2020)

End of FY2020(As of March 31, 2020)

End of FY2021(As of March 31, 2021)

Liabilities
51,641
159,048
13,50730,8972,310
45,0753,289
14,035(1,302)73,074
142,515
19,23429,421
2,079
43,873
2,557
15,373(795)

318,502327,333

490,824(351,877)
138,947
919,556(756,611)

491,247(352,836)
138,410913,284(759,076)

162,944

154,207

164,869
53,175(31,234)
21,941
30,66566,706(41,521)
25,184

164,193
51,601(31,201)
20,40037,186
68,239(42,294)
25,944

544,553

540,342

179
29,634

159
28,03329,81428,19282,931
1,880
11,09021,11829,359(6,327)91,926
1,538
23,0999,635
28,296(6,137)

Total investments and other assets

140,053

148,358

714,420

716,893

1,032,923

1,044,227

Total assets

Item(As of March 31, 2021)

Investments and other assets
Investment securities
Long-term loans receivable
Retirement benefit assets
Deferred tax assets
Other
Allowance for doubtful accounts
Total non-current assets(Unit: million yen)

End of FY2021

Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term borrowings
Commercial papers
Current portion of bonds
Income taxes payable
Provision for bonuses
Other provisions
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Deferred tax liabilities
Retirement benefit liabilities
Provision for retirement benefits for directors
Provision for special repairs
Other provisions
Lease obligations
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares

83,4305,330
120,783
12,00073,596
7,744
103,538
-

6,024
6,158
139
79,906

10,000
4,590
6,265
404
98,691

313,771304,831-

30,000103,332
7,491
24,999521
128
828
17,996
7,341
53,27050,00084,5638,130
24,703503
180
511
14,352
7,821
41,807245,910232,574

559,682

537,405

86,17460,233
326,086(16,098)

86,17460,292
365,593(26,113)456,395

485,946

6,723(0)12,429
1

4,968

4,898

Foreign currency translation adjustment
Remeasurements of defined benefit plans(21,413)(9,995)(29,917)(2,438)

Total accumulated other comprehensive income(19,716)(15,025)

Non-controlling interests

36,56335,899Total net assets

473,241

506,821

1,032,923

1,044,227

Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land

Total liabilities and net assets

Consolidated Statements of Cash Flows

Consolidated Statements of Income andConsolidated Statements of Comprehensive
Income(Unit: million yen)

Item
Net Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Amortization of goodwill
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rental income from real estate
Share of profit of entities accounted forusing equity method
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on disposal of non-current assets
Gain on sales of investment securities
Compensation income
Other
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Loss on sales of investment securities
Loss on valuation of investment securities
Impairment loss
Loss on temporary suspension of operations
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent
ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income ofentities accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable toowners of parent
Comprehensive income attributable tonon-controlling interests(Unit: million yen)

FY2021

FY2020April 1, 2019
( Fromto March 31, 2020 )April 1, 2020
( Fromto March 31, 2021 )

884,350689,321
195,029

863,903
672,631
191,27289
133,930
134,02061,00853
127,608
127,661
63,610

540
1,267
141

601
1,273
107

2,427

1,879

1,035
2,661
8,075

1,042
3,524
8,428

3,876
4,665
8,541
60,541

3,498
2,797
6,295
65,744

754
205
2,730
147
3,838

3,247
3,567

5,580
36
222
5,451
1,311
12,602
51,777
11,223(300)
10,92340,854
1,703
39,15140,854

5,494
61
47
969
547
744
7,865
65,105
9,170
6,285
15,45549,6492,848
46,80049,649(1,720)5,516

3(1,494)(6,193)(9,345)
7,463

-

(302)

Item

-

411
7,226

1

201

(9,708)31,145

3,837
53,48729,542

51,561

1,602

1,925

Cash flows from operating
activities
Profit before income taxes
Depreciation
Amortization of goodwill
Share of loss (profit) of entities
accounted for using equity method
Loss (gain) on valuation of investment
securities
Decrease (increase) in net retirement
benefit asset and liability
Increase (decrease) in provision for retirement
benefits for directors
Increase (decrease) in provision for bonuses
Increase (decrease) in allowance for
doubtful accounts
Increase (decrease) in other provisions
Interest and dividend income
Interest expenses
Loss (gain) on sales of investment securities
Loss (gain) on disposal of non-current assets
Impairment loss
Decrease (increase) in tradereceivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other, net

FY2021

April 1, 2019
( Fromto March 31, 2020 )April 1, 2020
( Fromto March 31, 2021 )

51,777
48,86389

65,10552,68353(2,427)(1,879)222

47(1,172)

(905)

(14)

109
91

(17)

107

(74)

0

42
(1,808)
3,876
(169)
4,825
5,451

(1,874)
3,498(3,505)2,246

20,8008,418(1,661)(16,151)(6,674)969(122)(6,568)3,866

Subtotal

106,069

122,048

Cash flows from operating activities

90,902

110,403(66,378)
1,367
(240)

515

(3,675)(58,656)
4,187
(167)

(539)

(117)

Interest and dividends received
Interest paid
Income taxes paid

Cash flows from investing activities
Decrease (increase) in time deposits
Purchase of non-current assets
Proceeds from sales of non-current assets
Purchase of other depreciated assets
Proceeds from sales of other depreciated assets
Purchase of investment securities
Proceeds from sales and redemption of investment
securities
Proceeds from sales of shares of subsidiaries resulting in change inscope of consolidation
Loan advances
Collection of loans receivable
Other, net
Cash flows from investment activities

Cash flows from financing activities
Net increase (decrease) in short-termborrowings
Increase (decrease) in commercial papers
Proceeds from long-term borrowings
Repayments of long-term borrowings
Proceeds from issuance of bonds
Redemption of bonds
Proceeds from sales of treasury shares
Purchase of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Other, net

2,321(3,890)(13,597)0393(3,240)
2,782
(193)

2,455
(3,521)(10,579)

38

709

6,318

(2,723)
3,302
2,974

(65,534)(47,809)200(19,596)(10,000)(12,000)
21,179(36,573)
30,000-(22)(7,350)(681)(8,262)(10,064)(7,292)(873)(8,732)8,000
44,663(56,077)94

0(29,436)(43,952)

(301)

(569)

(4,369)18,071

Cash and cash equivalents at beginning of period

50,08445,748Cash and cash equivalents at end of period

45,74863,819Cash flows from financing activities

Effect of exchange rate change on cash andcash equivalents

Net increase (decrease) in cash and cash
equivalents

Increase in cash and cash equivalents resulting from merger

100

FY202033-

101Corporate Information and Stock Overview

Corporate Information
Company Outline (as of March 31, 2021)
Company
name

TAIHEIYO CEMENT CORPORATION

EstablishedMay 3, 1881

Capital86,174,248,572 yen

BUNKYO GARDEN GATE TOWER, 1-1-1,
Headquarters Koishikawa, Bunkyo-ku, Tokyo 112-8503,
Japan
Number of
employees
Net Sales

Consolidated:
12,586
Non-consolidated: 	1,838 (excluding
employees on loan togroup companies)
Consolidated:
863.9 billion yen
Non-consolidated: 295.2 billion yen

Stock Overview
Website Information
 Home pagehttps://www.taiheiyo-cement.co.jp/english/index.html
 Organizational and Business Information
About Us

Stock Overview (as of March 31, 2021)

 The Distribution of Shares (in Thousands) by
Owner Category (as of March 31, 2021)

Fiscal year

Treasury shares

Annualstockholders
meeting

https://www.taiheiyo-cement.co.jp/english/company/index.html
Products and Services

https://www.taiheiyo-cement.co.jp/english/service_product/index.html
Research and Development

Commonstock

Investor Relations

https://www.taiheiyo-cement.co.jp/english/ir/index.html
 CSR Information

List of Internationally Registered
Trademark of Taiheiyo Cement
Corporation Appearing in this Report
Ceraclean

127,140,278

Outstanding(including 8,248,450 treasury
shares)17,832
14.0%

Brokerage
firms

51,6015,754
4.5%

Sumitomo Mitsui Trust Bank, Ltd.

Foreign investors

Sharesowned
Holding(in(%)
thousands)

Shareholder
The Master Trust Bank of Japan, Ltd. (Trust Account)

11,746

9.8

Custody Bank of Japan, Ltd. (Trust Account)

6,031

5.0

STATE STREET BANK AND TRUST COMPANY 505001

3,505

2.9

THE BANK OF NEW YORK MELLON 140044

2,267

1.9

Mizuho Bank, Ltd.

2,000

1.6

NORTHERN TRUST CO. (AVFC) RE U.S. TAX EXEMPTED PENSION FUNDS

1,908

1.6

DENITE

Custody Bank of Japan, Ltd. (Trust Account 5)

1,815

1.5

STATE STREET BANK WEST CLIENT - TREATY 505234

1,741

1.4

Custody Bank of Japan, Ltd. (Trust Account 6)

1,609

1.3

TQPS

Meiji Yasuda Life Insurance Company

1,527

1.2

Nanolitia

39,12930.7%

Individual
investors andothers197,730,800

 Major Shareholders (as of March 31, 2021)

CSR Initiatives

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

Late June

Number ofshareholders
Registrar ofshareholders

Financial
institutions

8,248
6.4%

Authorized

https://www.taiheiyo-cement.co.jp/english/rd/index.html
 IR Information

April 1 to March 31

Miscellaneous
corporate bodies

49,437
38.8%

6,738
5.3%

(1) The Company owns 8,248,450 treasury shares.
(2) The shareholding ratio has been calculated after subtracting our treasury
shares.

 Stock Price Transitions
(Yen)

6,000
5,000
4,000
3,000
2,000
1,000
0

Apr. 2016

Mar. 2017

Mar. 2018

Mar. 2019

Mar. 2020

Mar. 2021*T he Company, effective October 1, 2017, conducted a reverse stock split for its common stock at a ratio of one for 10. Prices prior to September 2017 have been
calculated taking the reverse stock split into account.

 Total Shareholder Return (TSR) Transitions

Mar. 2017

Total Shareholder Return (%)
Comparison index: Dividend
included TOPIX (%)

Mar. 2018

Mar. 2019

Mar. 2020

Mar. 2021

145.95153.86150.1981.47

124.75114.69132.89126.20114.20162.32* TSR (Total Shareholder Return): This represents the total amount reaped from an equity investment and is expressed as a percentage calculated by dividing therevenue gained from the stock investment (principally dividend and capital gain) by the stock price (investment expenditure). In this example the investment wasmade at the closing price at the end of March 2016 and the closing price calculated at the end of each fiscal year (March 31).

102

103

BUNKYO GARDEN GATE TOWER, 1-1-1, Koishikawa, Bunkyo-ku, Tokyo 112-8503, Japan
https://www.taiheiyo-cement.co.jp/english

Contact Information
Investor Relations and Communications Group, General Affairs Department
Tel: 03-5801-0334 Fax: 03-5801-0344
E-mail: ir-com@taiheiyo-cement.co.jp
Corporate Social Responsibility Group, General Affairs Department
Tel: 03-5801-0335 Fax: 03-5801-0345
E-mail: webmaster@taiheiyo-cement.co.jp

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