The Driving Force/Booster of Value Creation — Sustainability

Social and Relationship Capital

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

Safe Cement and Cement ProductsHigh quality and safe products
Basic approach
In 1998, the year of Taiheiyo Cement’s inception, weestablished a quality policy based on our management policy.
We have since revised our Business Principles by adding
content that expresses them in a way that is easy to understand,and we are working to disseminate them throughout theentire organization. It represents our aspiration to continue
to be a company that customers trust and rely on by sharing a
sense of achievement through each employee’s actions and byproviding high-quality products and services, leveraging ourhigh technological capabilities and quality assurance system.

Quality Policy
All of our employees adopt a global perspective, striving
to boost customer satisfaction and contribute to society byproviding environmentally-friendly products and quality thatmatches our customers’ needs.

In order to achieve the aims of our policy

1 We develop specific product quality targets based on our

Quality Policy, and disseminate them within the company.
2 We focus our efforts and work positively to achieve thequality targets.
3 We carefully review the levels of customer satisfaction andproduct quality that have been achieved.
4 We implement a quality management system andcontinually improve our products.

Quality Management
We focus on stabilizing and improving product quality while
capitalizing on the production and quality control technologies
we have developed over the years. We are further enhancing
product quality control by deploying advanced technologies
to ensure improved stability such as an online analysis system
for raw materials, clinker and cement, the measurement ofclinker minerals by X-ray diffraction and our proprietary Taiheiyo
Cement Quality Predictive System (TQPS). Whilst maintaining
quality, we also make effective use of waste and by-products
and in doing so manufacture cement that pays due attention to
the conservation of the global environment.
All of our Portland cement plants in Japan, including thoseof group companies, have obtained ISO 9001 certification,
the international standard for quality management systems.
Furthermore, all of our overseas cement plants in countries
that adopt ISO have obtained ISO 9001 certification. To ensure
product quality and improve business operations, we obtained
ISO 9001 (JIS Q9001) certification from the Japan Testing
Center for Construction Materials. The scope of our certificationencompasses the development, design and production ofa range of cement, cement clinker and cement-based soil
stabilizer products.
We will continue to enhance our efforts to "supply productsthat meet customer needs" and "improve customer satisfaction"whilst actively utilizing the ISO 9001 system.

90

Quality Management System
Customer

Quality requirements

Sales Division

Sales

Technical Services

Products and technical services

Distribution
Shipping inspection

Research & Technology Development Division

Production Division

Clarify quality requirements• Management of production
conditions• Building quality into the process• In-process inspections

Review quality requirements
Quality design in accordance with quality
requirements

Prototyping and evaluation
Material Procurement

Acceptanceinspection

Today every product is expected to be safe; as a construction
material that is indispensable for developing social
infrastructure cement is no exception. The cement industry
has long made use of industrial waste and by-products suchas blast furnace slag, coal ash and by-product gypsum assubstitutes for natural mineral resources. Furthermore, we use
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 waste materials into raw material and fuel for cement
production. When our cement plants accept waste we preventits dispersal and minimize the release of odor by transporting
the waste in a tightly sealed panel truck and storing it in a fully
enclosed 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 in natural resources,
and are constantly enhancing the control of minor components
as the volume of waste we receive increases. When we receive
new types of waste or waste from new sources we strictly apply
rules under which we conduct three kinds of inspection related
to the source of the waste, its chemical composition and theresults of trial use to identify any potentially negative impact on
product quality or the surrounding environment. We will thenmake a final decision on whether to receive the waste. These
measures help us ensure product safety.

Ensuring Product Safety Following a Nuclear Accident

As a consequence of the nuclear accident at the Fukushima
Daiichi Nuclear Power Station of Tokyo Electric Power Company
Holdings, Inc. in 2011, we discovered that some industrial
waste used for making cement contained specified radioactive
material. We have established a system to ensure that theradioactive concentration in cement shipped from our plants
is below the safety limit* set by the Japanese governmentby strictly controlling the radioactive 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 for radioactive
concentrations in cement, effective from May 2011.

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

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

Minor Components of Ordinary Portland Cement(Unit: mg/kg)

FY1988FY2019FY2020

FY2021

FY2022

FY2023

Average

−

427

435

409

395

461

Max.

−

504

578

512

449

557

Min.

−

355

337

326

311

396

Average

−

77

84

79

75

79

Total
Max.
chromium

−

95

95

85

88

92

Min.

−

64

75

73

65

63

Average

17.4

8.6

7.9

8.0

7.1

6.4

Max.

32.3

11.4

9.8

11.1

8.9

7.2

Min.

5.3

5.4

6.6

5.5

5.9

5.6

Average

556

600

554

609

560

551

Max.

1059

772

677

734

742

702

Fluorine

Watersoluble
hexavalentchromium

Zinc

Lead

CopperArsenic

SeleniumCadmiumhttps://www.taiheiyo-cement.co.jp/english/
csr/fair_trade_fr.html#section02
Mercury

Min.

137

449

493

464

434

422

Average

221

62

63

66

61

54

Max.

668

84

77

88

82

72

Min.

18

38

43

39

43

37

Average

122

274

263

267

253

253

Max.

233

415

359

442

404

365

Min.

17

163

181

168

159

138

Average

17

18

13

15

14

15

Max.

39

47

28

47

39

54

Min.

2

6

7

6

6

ND

Average

−

0.5>

0.8

0.8

0.7

0.7

Max.

−

0.5>

0.9

0.9

0.8

0.9

Min.

−

0.5>

0.6

0.5>

0.5>

0.5

Average

1.5

1.3

2.0

1.7

1.5

2.0

Max.

2.6

2.0

3.0

2.0

2.0

3.0

Min.

0.6

1.0>

1.0>

1.0>

1.0

1.0

Average−0.005>

0.007

0.010

0.008

0.010

Max.

−

0.005>

0.011

0.020

0.012

0.020

Min.

−

0.005>

0.005>

0.005>

0.005>

0.005>

91

The Driving Force/Booster of Value Creation — Sustainability

Responsible Sourcing and Supply
Basic approach
We believe that we grow along with our business partners. In orderthat we may build relationships of mutual trust and work in tandemwith our business partners, our dealings with them are based on faircontracts and we strictly adhere to our agreements. We have establishedfundamental policies in order to clearly establish our stance towards fairtrade, under the “Dealing outside the company in good faith” sectionof our Standards of Conduct and based on the principle that “we will
act in an ethical manner and abide by the laws and regulations of thosecountries in which we operate” defined in our Business Principles, andour supply chain management is in accordance with these policies.

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

Fundamental Policies

In response to the strengthening of international regulations
against acts of bribery, and to strengthen our initiatives against
corruption as stated in commitments 4 (We will not offer
entertainment or gifts to customers that go beyond what is legally andsocially acceptable) and 7 (We will maintain transparent relationships
with governments and local authorities), we established our AntiBribery Policy in January 2017, and concurrently released a statementby our president proclaiming the group’s stance against bribery.

1 We will conduct fair marketing and bidding, and not engage inunfair practices such as collusion and cartels.

2 We will maintain appropriate and transparent relationships withour contractors.
3 We will select business partners in a fair and equitable manner.
4 We will not offer entertainment or gifts to customers that go
beyond what is legally and socially acceptable.
5 Our advertising, displays and briefing sessions will be honest and sincere.
6 We will respond appropriately to customer feedback.
7 We will maintain transparent relationships with governments
and local authorities.
8 We will respect the cultures and customs of the places where we operate.

Please see our website for more information about the
Taiheiyo Cement Purchasing Basic Principle

https://www.taiheiyo-cement.co.jp/english/
csr/fair_trade_fr.html#section06

Please see our website for more information about
the Anti-Bribery Basic Principle (Policy).

https://www.taiheiyo-cement.co.jp/english/
csr/fair_trade_fr.html#section06

Our Business Partners
Our main business activities are involved with cement
and concrete. Limestone is the main raw material used andgroup companies are largely in charge of such aspects as theoperation and management of the quarries. Coal, however,which is a source of thermal energy and also part of the raw
materials we use, is sourced from companies outside thegroup. Moreover, the waste and by-products that we recyclein our cement production process come from many different
industries and a variety of locations.
Most of our production divisions are mechanized and there
are almost no labor-intensive processes, and tasks such as
production equipment maintenance are outsourced to partnercompanies and contractors as and when necessary.
Cement is sold mainly to ready-mixed concrete companies
and building materials distributors, and raw materials andproducts are transported by group companies and also
companies outside the group.
In our business activities we strive to communicate closelywith the local governments of the countries and regions where
our business sites are located. We deem it essential that our
supply chain respects human rights, in particular the banning offorced labor and child labor, complies with laws and responds
to requests.

Safety of Business Partners Working at Our Production Sites
Operations at our cement production sites and quarries
are increasingly being mechanized. Since some tasks are
performed in elevated places or at high temperatures, ensuring
worker safety at our production sites is essential. We do ourbest to ensure that employees of contractors working at our92

Value Chain Management

Social and Relationship Capitalsites avoid any accidents. They receive various types of training
when they start work at the site, are required to submit a work
plan that includes a safety plan, and are given guidance withregard to that plan.

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

User Societies and Industry Associations
We have founded and manage various cement user societies
and industry associations that support participants in vitalizing
their business operations and developing technologicalcompetitiveness. The National Taiheiyo Cement Ready-mixed
Concrete Society, the largest of these user societies, is madeup of ten Taiheiyo Cement Ready-mixed Concrete Societies, inlocations ranging from Hokkaido to Kyushu, and engages invarious activities. We hold technical sessions and presentations,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 National Ready-mixed Concrete Society,
we have established other associations such as the Taiheiyo
Cement Association for the Paving Block Industry and SPLITTON
Association Japan to proactively deliver technical support forthe mutual development of concrete product companies. We
will continue to support activities that benefit cement users.

Activities of the National Taiheiyo Cement
Ready-mixed Concrete Society
RegionHokkaido
TohokuTokyo
Kanto
Hokuriku
Chubu
Kansai
Shikoku
Chugoku
KyushuDetails
Ran a contest for case studies of improvements
related to health and safety
Compilation of examples of how to proceed withmanagement review
Held (online) training sessions for personnel incharge of facilities
Held Concrete Forum (Online on-demand format)
Conducted trial mixing of low-carbon concrete
Conducted a workshop corresponding to JIS
A 1132:2020 "Method of making and curingconcrete specimens for a concrete strength test".
Survey of ready-mixed concrete basic data andpreparation of model basic data
Basic training course on concrete quality control(hybrid face-to-face and web-based)
Conducted survey on policy management
Publication of "Guide to Concrete Related Tests"

Initiatives of the Taiheiyo Cement Association for the Paving Block Industry
Since its establishment in 2003, the Taiheiyo Cement Association for the Paving Block Industry has promoted the increased use of block
paving through the exchange of information on concrete block pavement design, manufacturing and construction techniques, and thedevelopment of new products and technologies.
Labor shortages have become a major issue in recent years, which requires a prompt response via productivity improvement andreduction of labor demand in order to maintain and expand the volume of pavement block construction. In order to promote mechanized
construction and improved productivity of block pavement, the association is working together with its members nationwide to conduct
mechanized construction tours and other activities.
The association is also actively working to address the SDGs. Block paving has the ability to handle heavy loads, is highly durable
and also contributes to mitigating the heat island effect. It therefore has reduced life-cycle costs and contributes to the reduction ofenvironmental impact. For this reason, we are also focusing on advertising activities to gain the understanding of specifiers and end-users.
The association will contribute to society through more vigorous activities to expand the applications and popularity of block paving.

93The Driving Force/Booster of Value Creation — Sustainability

Social and Relationship Capital

Stakeholder engagement
Our Group's main business activities are involved with cement and concrete. In our business activities, we closely
communicate with our stakeholders such as shareholders and investors, local communities, customers and suppliers,
as well as our employees, and strive to meet their further requests by making compliance with the law a must.

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

Stakeholders

Shareholders,investors

Local community

Customers andbusiness partners

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

Stakeholders’ Interests

Results (FY2023)

Financial strategy
Timely and appropriate disclosure
Our business and mission
Sustainability

IR activities• Financial results briefing (online live broadcast):
3• Individual investor meetings:
160• Investor conference:
1
Publication of Integrated Report:
1R eflecting the perspectives of shareholders
and investors
Promoting direct dialogue between
shareholders and investors and management
Timely and appropriate disclosure of
information and obtaining appropriate
evaluation from the market

Engagement with local communities
Biodiversity
Reducing environmental impact
Contributing to national resilience
Water resources conservation

Engagements with local communities:
2,538• Global environmental conservation activities: 1,253• Revitalization of local culture and exchange:
988• Regional development:
146• Education and human resources development: 119• Disaster relief:
4• Other:
28

E xploring activities based on the needs ofcommunities

Delivering carbon neutrality
Corporate ethics and compliance
Risk management (crisis management)
Contributing to the realization of a recycling-based society
Popularization of environmentally sound products
Sustainable supply chainE fforts Related to CO2 Emissions Reduction in the Cement Production ProcessB usiness activities based on our Basic Compliance Policy and Anti-Bribery PolicyR esource recycling with industry and local communitiesD isclosure of maintenance and management information on our six directly-controlled
domestic plants pursuant to the Waste Disposal and Public Cleaning Law: monthlyP romoting initiatives based on the Carbon
Neutral Strategy 2050
Ensuring compliance and anti-bribery
throughout the group
Achieving group environmental targets(reduction of CO2 and main air pollutant
emissions)Increasing customer satisfaction and trust in
the Taiheiyo brandContinuing support activities to meet theneeds of usersA cquisition of ISO 14001 certification through our company-wide environmental management
system (including plants, headquarters, branches, and Central Research Laboratory)A cquisition of ISO 9001 certification: 100% in Japan, 100% in overseas cement
production sites in countries where ISO is the mainstream standardV arious user societies• National Taiheiyo Cement Ready-mixed Concrete Society: Individual activitiesin 10 regions in Japan• Taiheiyo Cement Association for the Paving Block Industry• SPLITTON Association Japan

Our employees

94

Future Issues

Creating a safe and healthy workplace
Diversity and Inclusion
Human resource development
Respect for human rights
Group governanceDX promotionS afety promotion activities with KPIs set by the Companywide Health & Safety Committee
Promotion of initiatives based on the "General Employer Business Action
Plan" in accordance with the Act for Promotion of Women’s Participation andAdvancement in the Workplace.
Promotion of employment of people with disabilities: Exceeded the statutory
employment rate (16 consecutive years)
Signatory to the UN Global Compact: May 2022
Promotion of work-life management
Promotion of H&PM: periodic health examinations (once/employee), stresschecks (once/employee), mental health consultation service (as needed)A chieving safety-related KPIs
Continuing efforts to achieve the CSR
Objectives for 2025 (Diversity)
Promoting barrier-free accessibility at eachbusiness site
Identifying human rights risks throughout
the supply chain

95

The Driving Force/Booster of Value Creation — Sustainability

Social and Relationship Capital

Communities
The Group's business is built on being in harmony with the local community. We always remember to be grateful andplace the utmost importance on walking together.

Basic approachcommunities, we aim to understand their needs andchallenges, and by making contributions that leverage thecharacteristics of our business, we aim to build trust with local
communities and grow together with them.

We believe that by making social contributions in theareas where we operate, both domestically and overseas, we
can create social and environmental value and contributeto a sustainable society and sustainable development ofour business. Through active communication with local
No. of times
conducted per
year

Total numberof participantsof the1 Conservation
global environment

1,253

1,778

of local
2 Revitalization
culture and exchange

988

155,759

3 Regional development

146

3,898

and human
4 Education
resources development

11916,027

5 Disaster relief

417

Cooperation in rescue activities

6 Other

28

207,711

Cooperation in blood donation

Activity

Participation in the Miyagi Industrial Resource
Recycling Association Sendai Branch "Cleanup
Operation"
(Tohoku Branch)

In October 2022, our Tohoku Branch participated in the"Cleanup Operation" in Onuma, organized by the Sendai
Branch of the Miyagi Industrial Resource Recycling Association.
We collected empty cans, plastic bottles, plastic bags, scrap tires,and many other waste items, contributing to the beautificationof Sendai, the City of Trees.

96

Acceptance of high school students for internships

Participation in an elementary school Halloween
event
(CalPortland Company, U.S.)

Ryushin Mining offered an internship program for local
high school students. As part of their "Period for Inquiry-Based
Cross-Disciplinary Study," two second-year students from
Iwate Prefectural Takata High School participated in a company
overview and safety education, followed by a tour of thecompany and a ride on a dump truck.

CalPortland Company participated in a Halloween event
held at an elementary school in Nevada. Costumed employees
in front of a decorated mixer truck handed out candy to morethan 700 children. The children asked many questions about
mixer trucks and concrete.

(Ryushin Mining Co., Ltd.)

Examples of activities
Resident briefings, environmental reporting meetings,
environmental monitoring system, cleanup activities, forest andlocal nature conservation activities

Organizing, participating in, and cooperating with plant and mine
tours, facility openings, and events
Provision of materials, lending of heavy equipment, disasterprevention activities
Support for regional medical care and regional industrial
development
Scholarships, training for engineers, internships and work
experience

Cooperation in Mt. Fujiwara Rescue Efforts(Fujiwara Plant)

Our Fujiwara Plant received requests for cooperation fromthe local fire department for emergency incidents such as
fires and rescues on Mt. Fujiwara, and in FY2023, we used themine roads to deliver the department personnel to the topof the mountain three times. We also cooperate with annual
joint mountain accident drills conducted by the police and fire
departments.

Participation in "Career Day" at an elementary
school(CalPortland Company, U.S.)

CalPortland Company participated in a "Career Day" at anelementary school in California. Employees explained the workof the cement industry, including environmental management,
heavy equipment operation, and technological development,
and demonstrated concrete made in a cup.

Donation of medical supplies and equipment(Taiheiyo Cement Philippines, Inc., Philippines)

As one of its contributions to the community, Taiheiyo
Cement Philippines, Inc. interviewed local residents about the
medical supplies they needed and distributed medicines andmedical equipment to them free of charge.

97