Nittobo Group
Integrated Report 2022

Nittobo Group

2-4-1, Kojimachi, Chiyoda-ku, Tokyo,102-8489, Japan
Telephone: +81-3-4582-5111

https://www.nittobo.co.jp/eng/

INTEGRATEDREPORT 2022

Nittobo Group’s Philosophy System

Nittobo Declaration
Nittobo Group’s Vision for 2030

Nittobo Group aims to become the “Best Partner” of yourcommunity. (Nittobo BP Declaration)

Corporate
Philosophy
Nittobo Group will, as a corporate group,
enhance its significance by striving to create healthy and comfortable lifestyles, andthereby continue to contributeto the realization ofprosperous communities.

We will relentlessly strive to identify our customers’
needs and will find great satisfaction in steadfastly earning their confidence and trust. In addition, we will attach
importance to sharing this satisfaction with all of our
stakeholders (communities) through our products andservices, including shareholders, investors, public administrations and regional communities.
We are committed to becoming a corporate group inwhich the potential of our respective, independent
employees is valued and thereby inspires our employees
to freely and willingly share their own ideas, ultimately
achieving greater results through teamwork.
Our corporate group will provide its employees with anopportunity for progress and self-realization based on the
belief that their progress leads to everyone’s success. We
will encourage our employees to be good citizens, think
deeply, observe widely, act courageously and to approach
their jobs with resolve and determination.

MissionBig VISION 2030

Customers
Investors

Shareholders

As a corporate group that continues to create a global No. 1 niche business, we aspire to contribute to
Clients

employees

Creditors“Environment/Energy,”“Digital Society,” and “Health/Security/Safety”

Community

PublicAdministration

Deeply, Widely, Strongly and Hospitably

Proud that
customers trust
Nittobo

Valuesfor realizing a sustainable society
Provide products and services that contribute toenvironment/energy
Provide products and services that contribute todigital society
Provide products and services that contribute tohealth/security/safety

We aspire to be a company that gains the trust of
all stakeholders in the pursuit of client satisfaction.

VisionCONTENTS
Nittobo Group’s Value Creation
History of Value Creation������������������������������02
Main Lineup��������������������������������������������������04
Value Creation Process���������������������������������06
Nittobo Group’s Materiality��������������������������08
Strategies for Value Creation
Message from the CEO..................................10
Progress of the Mid-Term Business Plan
(FY2021–2023)................................................16
Financial and Non-Financial Highlights........18
Feature: Special Glass Technology andMarket Trends................................................21
Initiatives to Achieve Our Vision for 2030
• Glass Fiber Business.................................24• Life Science Business................................26• Research & Development Headquarters....28
Business Strategies• Glass Fiber Business   Glass Fiber Yarn Business.....................30   Glass Fiber Cloth Business....................32  Glass Fiber for Industrial
Materials Business.................................34• Life Science Business................................36• Textile Business.........................................38
Foundation for Value Creation
Nittobo’s Sustainability Management...........40
Environment Initiatives in Support of the TCFD
Recommendations.....................................42
Environmental Initiatives...........................44

SocialHarmonious Coexistence with Communities���47
Safety Initiatives����������������������������������������48
Compliance and Risk Management...........49
Active Roles of Diverse Talent�������������������50
Governance
External Directors’ Roundtable Discussion....54
Corporate Governance...............................58
Directors and Officers�������������������������������66
Data Section
11-Year Financial Data...................................68
Consolidated Financial Statements..............70
Company Profile............................................76
Stock Information..........................................77

Editorial Policy
The Nittobo Group Integrated Report brings
together financial information and sustainabilityrelated information in one volume to provide
stakeholders with a greater understanding of
our medium- to long-term value creation
structure, strategies, and specific initiatives.
This issue aims to further evolve our integrated reporting by chronicling the progressof the Mid-Term Business Plan, which started
in fiscal 2021, as well as the Nittobo Group’s
efforts to address important social issues
through its business activities toward therealization of Big VISION 2030, our long-term
vision for 2030.

Report Period
This report covers business activities in FY2021(from April 1, 2021 through March 31, 2022).
This may be abbreviated to “FY21” when figures
are presented.

“Nittobo” and “the Company” refer to Nitto
Boseki Co., Ltd. individually.

Scope of Report
This report covers the business activities of
Nitto Boseki Co., Ltd. and its consolidated subsidiaries and affiliates in Japan and overseas.

Forward-looking Statements
The forecasts presented in this report are
based on information available to theCompany as of the publication date. Forwardlooking statements included in this report do
not represent promises or guarantees that
the Company will attain its forecasts or realize
the business measures expressed herein.

Company References“Nittobo Group” and “the Group” refer to Nitto
Boseki Co., Ltd. and its consolidated subsidiaries and affiliates in Japan and overseas.

Date of Publication
September 22, 2022

Nittobo Group

Integrated Report 2022

01

History of Value Creation

Other

Glass Fiber¥0.9 billion

FY2021Net Sales

Textile¥2.5 billion

Consolidated
Net SalesLife Science

The Nittobo Group was founded in 1923 in Fukushima Prefecture as a textiles manufacturer. Over the decades, we were the first¥23.3 billion¥84.1¥15.9 billion

Japanese company to industrially produce glass fiber (1938), became the first in Japan to manufacture glass wool (1949), andGlass Fiber Yarn

billionGlass Fiber Cloth

Glass Fiber for
Industrial Materials

made inroads into medical business (1978). In each era, we have embraced change as opportunity and continually developed the¥22.9 billion¥18.4 billion

Company by relishing the challenge to create new technologies and priding ourselves on our pioneer spirit.
Historical Background and Social Issues and Needs
Around 1930

1930s

After 19451960s

Mid-1970s

1980s

Development ofmodern industry

Development of heavy
industry
Japan becomesworld’s largest staple
fiber producer

Postwar rebuilding
demandThe first apartment
boom, wave of
motorization

Rising healthconsciousness

Rising demand for
healthcare
Widening choice of
fashion materials

Increase in usability,
functionality, andminiaturization of
integrated circuits

After 1990

After 2000

Widespread adoptionof Internet, mobile
phones, and PCs

Widespread adoption of smartphones andbroadband

4G to 5G
Shift from treatment to prevention

Business selection and concentration,
withdrawal from construction materials
business (rock wool production)

Expansion of in vitro diagnostics
reagents development

Nittobo’s Business Transitions

Started with the silk
yarn Textile BusinessJapan’s first industrialization of glass
fiber and rock wool,
full-scale productionof staple fiber

Building the foundation for our current
core products andbusinesses

Expanded businessby building moreglass fiber furnaces

Started pharmaceutical sales

Making glass cloth thinner and more functional

Entered the in vitro
diagnostic reagents
field
Withdrawal from staple fiber business

Withdrew from cotton
spinning business at
Tomari Factory
Shifted focus tobeverage business

Withdrawal fromthe raw yarnbusiness

Life Science Business ... Contributing to preventive medicine becomes the Group’s second business pillar
1978 Launched synthetic
substrate for -GTP

Started development ofbiochemical in vitro
diagnostic reagent kitsbased on the idea thatbiochemistry will be thedefining chemistry of thenext generation

1983 Launched specialty
chemicals PAA™
1986 Acquired International
Immunology Corporation, thepredecessor of Nittobo
America Inc. Started immunological in vitro diagnostic
reagent business1987 Established NITTOBOMEDICAL CO., LTD. and its
own brand for in vitro diagnostic reagents
Launched immunological in
vitro diagnostic reagents

1997 Established Nitto
Beverage Co., Ltd.

2012 Launched Osteolinks TRAP-5b, an in vitro diagnostic
reagent kit with genetically modified silkworm technologies
2018 Launched IgG4 measuring reagent kit for use on an
automated analyzer
2019 Acquired Kamiya Biomedical, LLC to gain sales networks and know-how for regulatory clearance in the U.S.
2019 Acquired Capricorn Products, LLC to strengthen
procurement of raw materials for in vitro diagnostic
reagents in the U.S.

Nittobo Group’s Value Creation1952 Opened Chemical
Fiber Laboratory (the rootsof the medical business),which later evolved into the
Biochemical Laboratory

Glass Fiber Business ... Providing high-performance glass that matches the times, strengthening our leading position in the glass fiber industry
1949 Start glass wool
production—first in Japan

Under the motto, "Let’sturn anything into
fibers," Nittobo is converting various materials
into fibers and has pioneered many technological firsts in Japan

1984 Launched T-glass(low thermal expansion)
1985 Launched finecount yarn
1988 Yarn manufacturer
Nittobo Norplex Oak Co.,
Ltd. established
Predecessor of NITTOBOASIA Glass Fiber Co., Ltd.
(Taiwan)1998 Launched NE-glass(low-dielectric)2006

Launched Flat Fiber2019 Cloth manufacturer Baotek Industrial Materials Ltd.
(Taiwan) converted into a consolidated subsidiary

Foundation for Value Creation

1964 Glass fiber adopted
for use in Tokaido
Shinkansen nose cone
1967 Fukushima glass
fiber yarn factory newly
establishedDirect melt furnace No.1
installed to meet growing
glass fiber demand
1969 Fukushima No.2
factory newly established(Plant specializes in production of glass cloth for
printed wiring boards)
Launched glass cloth for
printed wiring boards

Strategies for Value Creation

1938 Succeeded in industrial production of glass
fiber and started manufacturing rock wool—both
firsts in Japan

Textile Business ... Contributing to the creation of comfortable lifestyles
1898 Koriyama Kenshi
Boseki Co., Ltd. establishedin Koriyama
1918 Fukushima Seiren
Seishi Co., Ltd. establishedin Fukushima

1933 Staple fiber operations started at Fukushima
Factory

1960 Launched Nittobo
Dishcloth™
1965 Launched shirt interlining brand “DANKEEP™”
Started production ofdual-structure stretchable
yarn “C·S·Y™”
1969 Launched ladies’
apparel interlining brand“Dan Reine™”

1923 The above two companies merged to form Nitto
Boseki Co., Ltd.

®

1976 Introduced single dotinterlining machines
1988 Introduced double dotinterlining machines

Operating profit ratio: Life science, others: Textile

1930

1940

1950
Conclusion of Second World War

02

Nittobo Group

Integrated Report 2022

1960

1970
Tokyo Olympics and the new Three
Sacred Treasures (a color TV, an air
conditioner, and a car)

1980
Mobile communication services using
first-generation (1G)
technology

1985
Plaza Accord

1990

billion yen

Operating profit* Non-consolidated
net sales for
Nittobo until
FY1989: Construction materials and glass fiber (including construction materials until 2009)

84.1
7.3
8.6

Data Section

Net sales

Net sales and operating profit ratio (consolidated)

1925

2015 Nittobo Dishcloth™ won Good Design Long Life
Design Award
2018 Launched “Innovative Fabric™” applying interlining­processing technology

2004 Launched SDDC
interlining that can accommodate difficult-to-adherematerials

FY2021billion yen

Operating profit ratio
%

1995

2000

Microsoft launches Windows 95

2005

2010
Financial Crisis

2015
Great East Japan Earthquake

Nittobo GroupCOVID-19
pandemic

Integrated Report 2022

2021
(FY)

03

Main Lineup

For details, please see page 30

For details, please see page 36

Life Science Business

Glass Fiber Business
Only 1, No. 1 Technologies

Nittobo as Global Niche No. 1• World-leading precision in glass fiber• Special Glass made from unique compositions

Only 1, No. 1 Technologies•E lectronic Materials: No. 1 in the world for ultra-fine, ultra-thinSpecial Glass by refining our technologies and product capabilities• Integrated system from antisera ­production toreagent sales•C omposite Materials and Industrial Materials: No. 1 in client satisfaction by contributing to value creation through effective proposals,
response capabilities (speed), and quality

Medical business (In vitro diagnostic reagents)

Supply Chain

Choppedstrands

Glass Fiber Yarn
Business

Glass fiber yarn
Electronicmaterials• No. 1 in the world for immunological plasma protein diagnostics
through global, vertically integrated business from antisera to
reagent manufacturing and sales

Medical institutions

RovingPlastic reinforced
materials

Nittobo as Global Niche No. 1

Yarn

Glass Fiber Yarn Business

Molders

Glass fiber cloth
Glass Fiber
C
Cloth Business
Glass Fiber cloth
manufacturers
Glass FiberD
for Industrial
Materials Business

CCL(copper-cladlaminate)manufacturers

Printedwiring board
manufacturers

Semiconductor
manufacturers

Various
manufacturers

Smartphone,PC, and otherfinished productmanufacturers: Nittobo GroupSpecialty chemicals business
Mainapplications

We provide highly unique, functional polymer compounds for a wide range of applications to meetcustomer needs.

Mainapplications

Glass fiber
B
yarns

Main
applications

Automobiles
Cloth materials
used in electronic
and industrial
materials

Beverage business
Clients

Data
centers

Glass fiber
C cloth for electronic materials

Mainapplications

For details, please see page 38

Smartphones
Printedwiring boards(Motherboards, semiconductor packages)Basestations

Textile Business
Only 1, No. 1 Technologies

Nittobo Group

Integrated Report 2022

Glass wool

Glass fiber for
D industrial
materials

Mainapplications

Housing

Nittobo as Global Niche No. 1•N o. 1 in the world for high-performance materials using adhesive technology

Adhesive Interlinings
Dishcloths

Data Section

04

Drug stores

Foundation for Value Creation

We provide glass wool and glass
fiber for industrial and construction materials.

Supermarkets

We provide soft drinks, container molding, beverage
manufacturing, and bottling, mainly through OEM
contracts for private brands.

• The world’s thinnest level of adhesive interlinings

Glass Fiber for Industrial
Materials Business

Auxiliary agent for inkjet printing,water processing agents, papermaking and metal processing
auxiliary agents, etc.

Housing

Glass fiber for
A composite
materials

Glass Fiber Cloth BusinessWe provide glass fiber cloth woven
with glass fiber yarn for electronicmaterials in a wide range of applications, from infrastructure suchas base stations and data centers
to electronic devices such as PCs
and smartphones.

• Diagnostics• Health checkups• Physicalexaminations

Main
applications

ConstructionMainapplications

Automobiles

We provide adhesive interlinings for garment silhouettes
and our long-selling Nittobo Dishcloth™.

Strategies for Value Creation

We provide a wide range of distinctive glass fiber products foruse in reinforced plastics andelectronic materials.

Glass Fiber B
Yarn Business

Plastic compounders

Electronics manufacturers,
automotive manufacturers,
residential building material
manufacturers, etc.

Clients

Nittobo Group’s Value Creation

Industrial materials

Glass Fiber
B
Yarn BusinessA

In vitro diagnostic reagent kits are used in healthcheckups, physical examinations, and hospital visits,
and we provide them to medical and laboratory institutions through integrated production from raw materials
to the finished product.

ApparelNittobo Group

Integrated Report 202205

Value Creation Process

Corporate
Philosophy
Social Issues &ChangeINPUT

Material Issues

Manufacturing capital

Acceleration of laws andregulations

Capital investment

Evolution of AI technology
Entering the IoT era....... 15.8 billion yen
Intellectual capital
R&D expenses........ 2.6 billion yen

Supplying products
and services that
help resolve energyand ­environmental
issuesResearch & Development
Headquarters Employees

×Realization of SDGs andESG m­ anagement withcorporate social
responsibility

Workforce..... 2,729 employees
Financial capital

Glass fiber cloths

Implement growth strategies• Wind power
Chopped strands

Strengthen
management base

Consolidated
subsidiaries......... 22 companies
Of those, overseas:
Taiwan, Macau,
United States

Providing products
and services that­contribute to health,security, and safety• High-speed large-volume data
communications• Network infrastructure connecting
everything
Special Glass cloths• Smaller, thinner electronic devices
Ultrafine glass yarns
Ultra-thin glass cloths

Value
Sources

Total assets

Social capital• Waste water treatment
Specialty chemicals

Only 1, No. 1
Technologies

Delivering products
and services
designed to advancethe d­ igital transformation of society..... 187.3 billion yen• Energy-efficient housing, recycling
Glass wool insulation

Ability to adapt
to social changes
and customer
needs• Infrastructure repair and reinforcement
Non-woven fabricGlass cloths

Powerful
Value Chain

Creating livable,
convenient andsafe advanced
digital societies• Sustainable auxiliary materials
Interlinings
Inner materials• Supporting the shift from treatment
to prevention
In vitro diagnostic reagents

Foster humanresources who canmake a difference

Natural Capital

Supplyingproducts that
reduceenvironmental
burden• Safe and reliable beverages
Tea-based beverages
Sports drinks• Fashion and functionality
Deodorizing and antibacterial interlinings

Realizing
healthy, safe andsecure societies

Innovative Fabric™

.......... 173,000Strengthen efforts to addressenvironmental issues

kiloliters

Increased demand forSpecial Glass(low dielectric, lowthermal expansion)

Input of main raw materials...... 152,000 tons
Water withdrawal

3

Continuously reform
corporate governance• Coexistence with society• Initiatives for safety• Utilization of diverse humanresources

Contributing to
the realization ofa sustainable
society

Improvement ofpreventive ­medicine
and increase inhealth-oriented
mindsets

06

Nittobo Group

Integrated Report 2022

Nittobo Group

Integrated Report 2022

Data Section..... 11.33 million m

Realizing
continuous,
sustainable growth
for the Company

Foundation for Value Creation

Energy input

Strategies for Value Creation

Risks and Opportunities in
the Business Environment

Human capital

Sources of Value Driven
by Four Key Measures

Nittobo Group’s Value Creation

Population issues, etc.

OUTCOMEBig VISION 2030

Low birthrate and aging
population (Japan)

OUTPUT• Lightweight, energy-efficient­automobiles and aircraft
Chopped strands

Adapting to climatechange and a
resource-recycling
society....... 133 employees
Societal Structure
Issues

Mid-Term Business Plan

As a corporate group that continues to create a global No. 1 niche business, we aspire to contribute to“Environment/Energy,” “Digital Society,” and “Health/Security/Safety” for realizing a sustainable society.

Formation of arecycling-oriented society

Higher speed­communication (5G/6G)

corporate group, enhance its significance by
comfortable lifestyles, and thereby continue toprosperous communities.

(FY2021)

Intensification of
Global Warming andEnvironmental Issues

Becoming an­Ultra-Smart Society

The Nittobo Group will, as a
striving to create healthy andcontribute to the realization of07

Nittobo Group’s Materiality

In order for the Nittobo Group to enhance its social value and continue contributing to the realization of prosperous communi-

Materiality Identification Processties, we have identified materiality as important management tasks to address to help solve social issues through the lens of
ESG and the SDGs.
We have defined seven material issues from the perspective of strategic CSR, which leverages the strengths of the Nittobo
Group to contribute through business activities, and from the perspective of basic CSR, which focuses on ESG to build a foundation that enables sustainable growth.

Issue Selection

Analysis and Plan Creation

Management Decision-Making• Discussed the Nittobo Group’s
purpose and value creation• Each business division analyzed its
environment and formulated avision for the future• Discussed in depth by the Boardof Directors with External
Directors’ input and provided
feedback to the businessdivisions• Held multiple intensive discussions
between the President and business divisions

Social Issues
Intensification of Global Warming andEnvironmental Issues• Formation of a recycling-oriented society• Acceleration of laws and regulations

Arrival of a Super Smart Society• Evolution of AI technology, arrival of IoT era

Risks

Provide products and services that
contribute to environment/energy• Increase in environmental costs

Adapting to climate change and a
resource-recycling society•E limination of non-environmental-friendly
products and companies•R estrictions on business due to environmental
regulations• Decline in technological superiority
Provide products and services
that contribute to digital society• Replacement by other materials•S peed of technological development in theelectronic materials industry

Opportunities• Increasing demand for sustainable products• Expanding demand for composite materials
to meet the needs of lightweight automobiles
and aircraft• Increased demand for insulation materials
due to stricter energy conservation regulations• Increasing demand for devices that require
high-speed, high-capacity processing• Utilization of the production system in Japanand in Taiwan, where electronic materials
are concentrated• Opportunities to expand sales and develop
next-generation products through firstmover advantage

Key Measures• Defined 7 materiality items• Developed specific initiatives torealize our vision

Relevant SDGs

•D evelop new environmental-friendly
products• Reduce CO2 emissions• Implement recycling and reusing• Grow profits through Special Glass•S trengthen development capabilities
for new products

Nittobo Group’s Value Creation• Higher speed telecommunication (5G/6G)

Nittobo Group’s Materiality

Setting and Developmentof Materiality•S trengthen solution capability toincrease value for customers• Global shift from treatment to prevention
due to increased awarenessSocietal Structure Issues• Population issues, etc.

Provide products and services
that contribute to health/security/safety• Business continuity risks specific tobiologically-derived materials•R eplacement by other diagnostic agents• Expanding demand for diagnostic reagentsin Asia due to population growth and risingincome levels• Utilize three raw material production basesin the U.S.
• Utilize the value chain from upstream (antigens, antibodies, raw materials) to downstream (product manufacturing and sales) xpansion of sales channels in the•Efield of in vitro diagnostic reagents•S trengthen development capabilities
for new products

Strategies for Value Creation• Aging society with a declining birthrate(in Japan)•S hrinking domestic market due to declining
birthrate•S trengthen solution capability toincrease value for customers

Realizing continuous, sustainablegrowth for the Company• Increased geopolitical risks• Intensifying competition due to industry
reorganization, entry from otherindustries, etc.

Strengthen managementfoundation

Nittobo Group

Integrated Report 2022

• I mpact of geopolitics and human rights issues,
etc. on the supply chain

 apture growth opportunities through•C
innovative technology development•O ptimize business portfolio and review
unprofitable businesses•T ransform technology development andproduction technology through the introduction of IT and digital transformation• Decline in workforce due to low birthrate andaging population• Increasing diversity•C ultivate human resources for innovation• Fluidization of the labor market• Implement diversity and inclusion• Intensifying competition to recruit young andspecialized human resources• Innovation expected through humanresource development• Workstyle reform and business reform• Expanding and refining CSR scope• Permeation of corporate philosophy• Continuously revise corporate governance• Compliance and security in a remoteenvironment• Strengthening the corporate foundation
by gaining trust from society•T horoughly implement corporate ethics
and compliance

Data Section

Foster human resources forinnovation

Continuously revise corporate
governance08•P rice fluctuations of fuels, materials, etc.

• Selection and concentration•M aintain sustainability in procurement
and the supply chain• Increasing sophistication and complexityof social demands• Accelerating the rate of change•D iversification of factors causing changes inthe socioeconomic environment

Foundation for Value Creation• Lean management that is not substantiallyaffected by economic fluctuations• Improve employee engagement

Nittobo Group

Integrated Report 2022

09

Message from the CEO

We will contribute to solving social issues
through our products and services, which
we will provide by engaging in humanresource development and R&D from along-term perspective.
Fiscal 2021, the first of the three-year Mid-Term Business Plan, marked an investment phase
where we continued to aggressively invest in capital for future growth. Nevertheless, earnings
Nittobo Group’s Value Creation

before interest, taxes, depreciation and amortization (EBITDA), which indicates core profitability,
landed at a higher level than the previous fiscal year. This is a good start toward achieving thegoals of the Mid-Term Business Plan.

Strategies for Value Creation

A Year of Achieving What Needs to Be Donetry, but there was a sharp recovery in production in the automo-

the raw yarn business and spinning off the interlinings business.

bile and other manufacturing sectors, especially in the first half

These structural reforms stemmed from a revision of the costof the year. On the other hand, the semiconductor shortage

structure centered on fixed costs. They will directly improve prof-

became evident from the middle to the second half of the year,

itability going forward. We are also developing new products inaffecting the production of high-end equipment. In terms oforder to increase the ratio of high value-added products in ourmarket trends, the year was marked by both positive and nega-

future product portfolio.

tive factors.
In the first year of the Mid-Term Business Plan, we progressed with the structural reform of businesses with significant

Taiwan. The new factory, which has been under construction forchallenges. In the Glass Fiber Division, we focused on theseveral years, started operation at the end of September 2021.

composite materials business, which produces materials forSome time is still required for customer certification before we

reinforced plastics. We downsized facilities at the Fukushimareceive new orders, but the two production systems in Japan andFactory while expanding and consolidating facilities at Fuji Fiber

Taiwan are now in place.

Glass Co. Ltd. In the Textile Business, which had been sufferingfrom losses for many years, we were able to achieve results,

10

Nittobo Group

Integrated Report 2022

As a milestone in our growth strategy, we installed a manufacturing facility for Special Glass at our glass fiber base in

Data Section

Yuichi Tsuji

including a significant reduction in losses, by withdrawing from

Foundation for Value Creation

Director,
Representative andChief Executive Officer

In fiscal 2021, the COVID-19 pandemic continued to affect indus-→ Please see page 16 for information on the progress of Mid-Term Business Plan in
fiscal 2021.

Nittobo Group

Integrated Report 2022

11

Message from the CEO

Progress and Outlook for Key Initiativesof the Mid-Term Business Plan

The Glass Fiber and Medical Business Serveas the Cornerstones of Our Growth Strategy

The Nittobo Group is taking on the challenge of providing No. 1,

responding with speed. In the development of next-generation

I will explain a little more in depth about the implementation of

Only 1 products that are needed by society and that offer new

low-dielectric glass (NER), customer evaluations are already ingrowth strategies. New product development is the key totion base for the era of full-fledged adoption. We are steadily

value, in order to realize Big VISION 2030, our vision for 2030.

progress, and preparations are underway to start mass produc-achieving further growth in the glass fiber business and medical

accelerating R&D so that we can supply next- and subse-

tion by the end of fiscal 2022.

business. It is the very starting point of a manufacturing busi-

quent-generation products in a timely manner to meet theneeds of our customers.

The Mid-Term Business Plan sets four key measures toTargeting this growing market, we are building a solid produc-achieve this vision: implement growth strategies, strengthen the

We are also strengthening our management foundation.

ness. We believe that improving our new product development

management foundation, strengthen efforts to address environ-

Structural reform is proceeding as planned in the composite

capabilities is the key to achieving our goal of being a No. 1 glob-

mental issues, and foster human resources that bring aboutmaterials of the Glass Fiber Business and the Textile Business,

al niche company.

changes. First, we will go over the progress and prospects forwhere concrete results are being achieved. A new initiative is tothe first year of each measure.

strengthen our digital transformation (DX) efforts. In 2021, we

activities, in which we learn deeply what customers want andgrowing demand. At the U.S. site, a new building is scheduled toWith regard to the implementation of growth strategies, asestablished a DX promotion organization within the Research &propose new products as solutions to those needs. In the Glassgo operational in the fall of 2022, promoting more stable supply

mentioned above, we have made steady progress in preparing forDevelopment Headquarters and began training young engineers.

Fiber Business, the Product Planning and Development Divisionof raw materials and strengthening the value chain. More than

the future expansion of the high-speed digital equipment market

At the same time, we have started specific activities to imple-

was established as an organizational structure for customer

ever, to capture growing global demand, we also intend to

by starting operation of a factory in Taiwan for new low-dielectric

ment AI functions in glass melting furnaces. In addition to con-solution activities, and sales staff are actively approaching cus-strengthen our relationships with major players in the global

NE-glass, which is a type of Special Glass (a type of glass withtinuing these activities, in fiscal 2022 we will establish a new DX

tomers’ technical departments with engineers in tow.

diagnostic equipment market.

characteristics such as low dielectric strength, high strength,model factory and assign DX ambassadors to lead the way, start-

and low thermal expansion).

ing with small activities in front of us.

in recent years. We will expand production capacity for immuno-

It is essential to further improve the level of customer solution

applications continue to increase in size and layers to achieve

started to reinforce efforts to address environmental issues. In

tinues to be strong for glass cloth for semiconductor packages

higher speeds, our low thermal expansion glass (T-glass) for

terms of specific initiatives, we have set targets for reducing CO2

such as high-end network equipment, processors and memory

semiconductor packages is also attracting attention. In anticipa-

emissions and recycling waste glass for the year 2030, and are

devices. The Nittobo Group is focusing its efforts on Specialtion of strong demand over the medium to long term, we havealso focusing on the development of new environmentally-friendly

Glass because we expect market expansion over the medium toaccelerated our capital investment plan to increase the produc-

products, mainly with our R&D centers. The Corporate Businesslong term.

tion capacity for T-glass at factories in Fukushima City andPlanning Department serves as the secretariat of the committee

Koriyama City in Japan.

and has established five task forces composed of members fromerations of products, not to mention subsequent generations, areand renewable energy in order to ensure energy savings. By

accelerating due to global competition in development based on

accumulating such energy-saving activities, we hope to achieve

roadmaps put forward for the industry. The Nittobo Group is also

not only CO2 emission reduction but also cost reduction.
We are working to make advances in fostering human→ Please see page 16 for information on the progress of the Mid-Term Business
Plan in fiscal 2021, regular technical meetings with customers, andImplementation of Growth Strategies.

→ Please see page 33 for information about Special Glass.

Glass Fiber Business

Strategies for Value Creation

business divisions to prioritize the use of waste heat recovery

Nittobo Group’s Value Creation

Special Glass as a material for high-frequency/high-speedtransmission from infrastructure to edge devices. Demand con-

In the electronics industry, customers’ needs for the next gen-logical in vitro diagnostic reagents, one of our strengths, to meet

Amid increasing 5G adoption, demand is increasing for

In April 2021, the Sustainability Committee, which I chair,As high-end semiconductors used in data centers and otherIn the medical business, overseas demand has been growing

Medical Business• No. 1 in the world for Special Glass• No. 1 in the world for immune system plasma
protein diagnostic reagents

Target Market• Increased demand for Special Glass due toexpansion of 5G-related markets• Growing demand for in vitro diagnostic reagentsin emerging markets

Strengths• Special Glass development and production
technology• World’s finest and thinnest production technology• Integrated production system from yarn to cloth• Global value chain(from R&D to raw material production andreagent production and sales)

Strategy• Expansion of production capacity for highvalue-added products• Development of new next-generation products• Stable supply to existing markets and global
market development• Expansion of production capacity(from raw materials to reagents)

Foundation for Value Creation

Goal

resources that bring about changes. As the year’s first initiative,
we are working to improve internal communication by enhancing
one-on-one meetings between supervisors and subordinates.
I myself have sent out a video message on the background andaims of the new Mid-Term Business Plan, and also held roundtable discussions with younger employees at business sites andR&D centers. In addition, we will realize workstyle reform by
and promoting smarter office work such as paperless office work.

Data Section

enhancing flexible working hours and telecommuting systems,→ Please see page 50 for more information on our commitment to diverse humanresources.

12

Nittobo Group

Integrated Report 2022

Nittobo Group

Integrated Report 2022

13

Message from the CEO

Research & Development
Headquarters Responsible for Fostering
Human Resources to Champion Future
Fundamental Technology and R&D
To continue providing products and technologies that ensure

our personnel system and treatment of employees. Mr. Kazuhiko

Expecting the UnexpectedEntering the second year of the three-year Mid-Term Businessthat must be faced head-on, given the globalization of corporate

Plan, we are naturally encountering events that were not antici-

activities themselves, and we recognize anew the need to ensurepated at the outset. These include the semiconductor shortage,

management flexibility and resilience, the cornerstones of thefurther increases in energy prices due to the prolonged situation

Mid-Term Business Plan.

involving Russia and Ukraine, and the clear impact on supply

through our business activities, such as the worsening global

chains from the lockdown of major cities in China.

environmental problems, the advent of a super-smart society,customer trust, the Nittobo Group established the Research &Igarashi, Managing Executive Officer, who became President ofIn this rapidly changing business environment amid the trend

Development Headquarters in 2017 and completed construction

the Research & Development Headquarters in April 2022, has aof heightened uncertainty, we anticipate that the unexpected will

and the growing concern for people’s health, have not changedof the new NI-CoLabo building in 2020. The entire Group has been

wide range of experience from the manufacturing floor to R&D

happen. The rising energy prices and supply chain disruptions

at all since the formulation of our Long-term Vision, and in fact

working together to improve its research and development system.

and product development, making him an appropriate choice forthat are occurring around the world are unavoidable challenges

have become clearer.

One of the important roles of the Research & Development

this mission of technical human resource development manage-

Headquarters is to manage the development of technical humanment. At the same time, as a member of the Board of Directors,

resources, or in other words, to train key personnel who will be

I look forward to identifying issues and getting advice from an

responsible for the future development of the Nittobo Group’s

engineer’s perspective.

fundamental technologies and products. We make sure that the

Shareholder Returns

In addition, the Environment Technology Strategy Office wasestablished within the Research & Development Headquarters

Our basic policy for shareholder returns is to aim for stable divi-enhance shareholder returns and further improve capital effi-make the necessary investments by setting a path to develop

to serve as a Company-wide command post for environmental

dend growth over the medium to long term. At the end of eachciency, as major investments under the Mid-Term Business Plan

new graduate entrants in technical fields into key personnel who

issues in order to strengthen efforts to address environmental

fiscal year, dividend decisions will be made in light of the proper

have run their course.

will lead research and development in the next 10 to 15 years

issues, which is one of the key measures of the Mid-Termbalance between shareholder returns and the need to maintainthrough education, training, study outside the Company, andBusiness Plan.

a stable financial base and funds for future growth investment.

rently working on specifics, and we intend to make changes to

We will continue to aim for stable dividend growth and flexible
shareholder returns.

In addition, the Company will also flexibly return profits to share→P lease see page 28 for more details on the Research & Development Headquarters.

holders in response to conditions at the time. The acquisition ofown shares in May 2022 was conducted under this basic policy to→ Please see page 17 for more details on shareholder returns.

In Conclusion
The Nittobo Group will celebrate its 100th anniversary on April 1,

development and R&D from a long-term perspective, rather than

2023. There’s a reason we have been able to continue our busi-

being overly preoccupied with short-term, immediate events.

For DX to permeate actual business operations, it must be

Business Plan. These include efforts to improve the efficiency ofincorporated into autonomous decentralized activities. Each

es in response to changing times, and the world has continued

ideas and thoughts with our shareholders, investors, local commu-

research and development using machine learning and otherdepartment will be assigned a DX ambassador, and a system will

to believe that Nittobo’s technologies and products are necessary.

nities, employees and suppliers, and listen carefully to feedback.

data analysis technologies, to increase productivity in manufac-

be established in which diverse teams and departments will col-In a passage from Samuel Ullmann’s “Youth” poem, he writes,

turing processes, and to improve other operational efficiencies.

laborate to solve issues and share the results of their efforts“Youth is not a time of life; it is a state of mind; it is not a matter

throughout the Company. The establishment of the DX modelof rosy cheeks, red lips and supple knees; it is a matter of thefactory and the appointment of DX ambassadors is the first step

will, a quality of the imagination, a vigor of the emotions; it is theonline training for all young engineers to acquire DX literacy. We

in this long-term effort. Specific to the production process, we

freshness of the deep springs of life.” Although we are abelieve that employees, who are familiar with the actual opera-

installed a variety of specialized sensors in our glass melting

100-year-old company, we want to continue to anticipate changes

tions at manufacturing and R&D sites, will be able to act as

furnaces. We intend to establish a system by the end of fiscal

in society and always take on new challenges—in other words,“business translators” and be the driving force to spread DX

2023 that can detect furnace conditions while collecting big data,

we want to continue to be a youthful company.

within the Company. It will take some time for engineers in theand take various measures to prevent defective products throughfield to use DX knowledge to improve their own work and experi-

advance detection.

Integrated Report 2022

Data Section

In the first year of the plan, we established a DX Strategy
Office in the Research & Development Headquarters and started

Foundation for Value Creation

We will continue to openly discuss and share our activities, ourDX initiatives are one of the most important issues in the Mid-Termness for a century. We have consistently taken on new challeng-

Nittobo Group

Strategies for Value Creation

DX to Improve Employee Technology Literacy
and Increase R&D Efficiency and Productivity

ence success, but they will persevere.

Nittobo Group’s Value Creation

career plans of our engineers are discussed thoroughly andappropriate rotations after they join the Company. We are cur-14

We believe that the social issues that we are addressing

We believe that it is the Nittobo Group’s responsibility to contribute to solving social issues by providing our products andservices, which we will advance through human resource

Nittobo Group

Integrated Report 2022

15

Progress of the Mid-Term Business Plan (FY2021–2023)

We are working to realize the Nittobo Group’s vision for 2030, Big VISION 2030, which we announced in February 2021. Under the

MESSAGEMid-Term Business Plan, which began in fiscal 2021, we are focusing on the following four long-term priority measures: implement growth strategies, strengthen the management foundation, strengthen efforts to address environmental issues, and foster
human resources who can make a difference.

We aim to achieve the goals of
the Mid-Term Business Plan
while maintaining a soundfinancial structure even in an
uncertain environment.

Nittobo Group’s Vision: Big VISION 2030
As a corporate group that continues to create global niche No. 1 ­businesses,
we aspire to contribute to “Environment/Energy,” “Digital Society,” and“Health/Security/Safety” for realizing a sustainable society.
Provide products andservices that contribute toenvironment/energy

Provide products andservices that contribute todigital society

Provide products andservices that contribute tohealth/security/safety

Nittobo strives in the pursuit of all stakeholders’ satisfaction.

Hiroyuki Tada

Managing Executive Officer
General Manager of the Corporate Business Planning Division

Management Foundation Reinforcement

Create further business growththrough high value-added products

Evolve into a lean business entity(secure resiliency)• Grow profits through Special Glass• Expand sales channels in the in vitro diagnostic reagent field• Strengthen development capabilities for new products• Strengthen sales force solutions to increase value for customers

Progress in FY2021

Progress in Infrastructure Development for High
Value-added Products• New NE-glass yarn factory in Taiwan began operation

Enhancing development of next-generation Special Glass• Strengthening development of next-generation low-dielectric glass

Facilitating customer solutions activities

4 Key
Measures

Implemented Systems• Started Sustainability Committee activities> Started reducing CO2 emissions, promoting recycling andreusing, and developing eco-friendly products> Endorsed the TCFD recommendations (May 2022)

16

Nittobo Group

Progress in FY2021

Human Resource Development
Promoting Diversity & Inclusion• Increasing the ratio of females in management positions

Implementation of Workstyle Reforms• Promoting work-life balance• Cultivate human resources for innovation• Implement diversity and inclusion• Workstyle reform and business reform• Improve employee engagement

Make efforts to address environment
issues for a sustainable society

Foster human resources/organization/work
environment that bring about changes

Action for Environment Issues

Human Resources Development

Integrated Report 2022

grated business and increasing sales of immunological in vitro

making necessary growth investments and implementing growth

diagnostic reagents, which is one of our strengths. In the Textile

strategies, we have been strengthening our management baseBusiness, the interlinings business was transferred to a newly

through structural reforms and improving working capital effi-

established subsidiary, Nittobo Advantex Co., Ltd., to improveciency through inventory reduction and cash management.

profitability, and structural reforms are proceeding as planned.

In the first two years of the Mid-Term Business Plan, theAs always, we consider the dividend policy for shareholder

business environment surrounding the Company continues to be

returns to be one of the most important management priorities,

uncertain, with soaring global energy prices, rising commodity

and our basic policy is stable dividend growth. The annual divi-

prices, lockdowns in China, supply chain disruptions, and thedend for fiscal 2021 is set at 45 yen per share, the same as thesemiconductor shortage.

previous year. While we will invest in growth and create businessDespite these circumstances, in the mainstay Glass Fiber

growth in line with the strategies of the Mid-Term BusinessBusiness, we are making steady progress with strategies in line

Plan, we will maintain a sound financial position and consider

with our Mid-Term Business Plan, such as increasing earnings byflexible approaches to shareholder returns in accordance withincreasing sales of high value-added yarns and cloths, as well as

our financial situation, in order to achieve the goals of the Mid-

improving the productivity of composite materials. In the medi-

Term Business Plan.

Financial Targets for FY2023
Net sales

100 billion yen

Operating profit

14 billion yen

EBITDA

25 billion yen

EBITDA margin

25%

ROE

10%

ROIC

6%

Equity ratio

55%

Debt-to-equity ratio

(yen)

100
80

Dividends per share (left axis)
Dividend payout ratio (right axis)
21.7

(%)

30.3

21.6

21.4

19.4

18.6
15.2

60
40
25.00

30.00

30

26.8

35.00

40.00

40.00

45.00

45.00

45.00

Dividend payout
ratio of 30%
based on steadyearnings

20

Data Section• Reduce CO2 emissions• Implement recycling and reusing• Develop new environmentally friendly products• Started specialized literacy training mainly for young engineers• Preparing for DX implementation on electric furnaces

improve profitability by strengthening our global vertically inte-

menting the Mid-Term Business Plan. In fiscal 2021, while

Foundation for Value Creation

Progress in FY2021

Execution of Structural Reforms in the Composite
Materials and Textile Businesses
Enhancing Cost-Reduction Measures
Implementing Digital Transformation (DX)cal business, our second pillar of business, we aim to further

ture that withstands economic fluctuations by steadily imple-

Strategies for Value Creation

Progress in FY2021•L ean management that is not substantially affected by economic
fluctuations•O ptimize business portfolio and review unprofitable businesses•T ransform technology development and production technology
through the introduction of IT and digital transformation

The Nittobo Group is working to build a resilient corporate struc-

Nittobo Group’s Value Creation

Growth Strategy Implementation

1020

0.4 times
0

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

Nittobo Group

FY23

0

Integrated Report 2022

17

Financial and Non-Financial Highlights
For details, please see pages 44 and 50.

Financial Value

Non-Financial ValueNet Sales

Operating profit/Operating profit ratio(billion yen)(billion yen)

100

84.5

82.3

85.7

80

78.7

15

84.1

(%)

12.8

10.0

10

7.6
8.2

8.2
6.0

40

CO2 emissions

12

9.5

10.8

60

Air pollutant emissions

CO2 emissions from ­business operations

8.6
9(1,000t-CO2)

3.69

400

7.3

10.2% reduction per unit of sales (vs FY13)*

312

6

3.60
297

3.74
320

3.95
311

(t-CO2/million yen)

3.68

4

309

300

5

3

3

20

151

143

172

172

167

200
FY17

0

FY18

FY19

FY20

FY21

FY18

FY19

FY20

FY21

Sales of composite materials, Special Glass, in vitro diagnostic
reagents, etc. grew in fiscal 2021 compared to fiscal 2020, whensales declined due to the impact of the spread of COVID-19.

EBITDA/EBITDA margin
17.7
14.9
15.0
15

12.3

15.8
13.5

15.6

17.1

161

0

FY17

154
FY18

148
FY19

139
FY20

142
FY21

18

20

200

FY18

FY19

FY20

0

FY21

■EBITDA (left axis)●EBITDA margin (right axis)

150

10

100

131

131

7.0

FY18

FY19

(yen)

150

100

2

95

104

80

2.6

1.6

1.5

1.7

100

2.1

45

FY20

FY21

■R&D expenses (left axis)●Research & Development Headquarters personnel (right axis)

In response to changing market needs, we are strengthening R&D todevelop next-generation products. The Company is also promoting
digital transformation (DX) initiatives, including the establishment of
a DX implementation organization at the Research & Development
Headquarters.

Nittobo Group

Integrated Report 2022

0

FY17

FY18

FY19

FY20

FY21

(%)

67.1

69.0

67.5

60.1

67.4

13,90460

15,085
11,84180

10,92011,87040

10,000■Category 1: Products and services purchased ■Category 2: Capital goods■Category 4: Transportation and delivery (upstream) ■Category 5: Waste■Category 6: Business trips ■Category 7: Commuting to/from work

5,000*Scope 3: Indirect emissions outside of Scope 1 and Scope 2 (emissions of othercompanies related to business operations)01. Products and services purchased..................120,573

45

FY20

4. Transportation and delivery (upstream)............ 3,525
5. Waste..................................................................... 774

45
10

0

FY19

2. Capital goods.....................................................55,370

50

FY19

67.4% (FY21)

20

FY17

FY18

FY19

FY20

FY21

0

■Disposal of industrial waste (left axis)●Recycling rate (right axis)

FY21■Dividends per share (left axis)●Dividend payout ratio (right axis)

The total dividend per share for fiscal 2021 is 45 yen, consisting of aninterim dividend of 22.50 yen and a year-end dividend of 22.50 yen.
During the period of the Mid-Term Business Plan (FY2021–2023), theCompany’s policy is to flexibly return profits to shareholders basedon stable dividend growth.

6. Business trips........................................................ 355
7. Commuting to/from work...................................... 329

PRTR substance emissions
(t)

(t)

100
80
60

3,003

Scope 3 Reduction Initiatives

2,712

42
32

40

0

78.1% reduction in total amount (vs FY13)*

2,704

2,958

3,302

4,000

3,000

40

2,000

30

Data Section

FY18

FY18

FY2021 Scope 3 Category Details (t-CO2)

20

40

FY17

30

25

FY17

FY21

■Dust

Recycling rate

15,000

(%)

21.6

19.4

40

FY20

PRTR substances emitted and handled
26.8

15.2
50

1
0

0

FY21

30.3

75

FY19

Foundation for Value Creation

Dividends/Dividend payout ratio(persons)

3

FY20

Since fiscal 2018, we have been making aggressive capital expenditure, including capacity expansion of Special Glass, to meet growing
demand. In fiscal 2021, we established a new Special Glass factory
at NITTOBO ASIA Glass Fiber Co., Ltd. in Taiwan.

(billion yen)

121

FY18

20,000R&D expenses/Research & development headquarters personnel

4

18

FY17

FY17

34
31

73

(t)

50

0

EBITDA and EBITDA margins have been increasing year by year aswell as EBITDA growth by increasing earning power through a
growth strategy to expand high value-added products such as
Special Glass and in vitro diagnostic reagents.

133

0

25,000■Capital expenditure (including M&A)

5

0

30

Strategies for Value Creation

FY17

31
43

434

152

15

5

0

21
38

100

181

6
5

1

200

15.8

12

10

14
44

279

Industrial waste disposal and the recycling rate

(1,000t-CO2)

14.4

305

*FY2013 NOx emissions: 852 tons; SOx emissions: 43 tons; dust emissions: 95 tons

Greenhouse gas emissions in the value chain (Scope 3*)

12.3

268

■NOx ■SOx

Capital expenditure (including M&A)

16.2

255

*FY2013 CO2 emissions: 349,000 t-CO2; per unit of consolidated net sales: 4.10 t-CO2/
million yen(billion yen)

16.7

300

■Scope 1 (left axis) ■Scope 2 (left axis)●Per unit of consolidated net sales (right axis)

(%)

16.9

400

Nittobo Group’s Value Creation

20

500

200
100

Operating profit in fiscal 2021 increased by more than 20% year on
year due to increased sales of high value-added products and successful structural reform, despite an increase in upfront investment
and other expenses.

49.6% reduction in total amount (vs FY13)*

(t)

2

0

■Operating profit (left axis)●Operating profit ratio (right axis)■Net Sales(billion yen)

FY17

0

Air pollutant emissions

28
1,000

20

• Improve transportation efficiency through collaboration with suppliers and transporters• Reduce CO2 emissions through glass waste recycling

0

FY17

FY18

FY19

FY20

FY21

0

■PRTR substances emitted (left axis)●PRTR substances handled (right axis)*FY2013 PRTR emissions: 128 tons; PRTR volume handled: 2,881 tons

Nittobo Group

Integrated Report 2022

19

Financial and Non-Financial Highlights

Special Glass Technology and Market Trends

FeatureThis feature was prepared under the supervision of Hideyuki Hatanaka, Senior Technical Supervisor and the Research & Development Headquarters.

Withdrawal water

Water pollutants and drainage

Withdrawal water

1.4% increase per unit of sales (vs FY13)*(10,000 m3/10 billion yen)

(1,000,000 m3)
20.0

Water pollutants

101.0

98.5

103.5

107.0

105.1

120

(t)
200

90

150

10.0

60

100

81.0

88.7

84.2

5.76

5.64

(1,000,000 m3)

6.29

6.0

30

23.8

24.7

24.6

24.0

FY17

FY18

FY19

FY20

4.5

94

77

65

88.3

5.0

0

5.62

Contributing to Digital Infrastructure Evolution with Two Types of Special Glass

50

25.1
0

FY21

0

71

70

19

23

22

28

28

35

33

35

33

34

FY17

FY18

FY19

FY20

FY21

3.0

1.5

0

*FY2013 withdrawal water: 8.83 million m3; withdrawal water by Nitto Beverage Co.,
Ltd.: 2.27 million m3; consolidated sales per unit: 1,037,000 m3 / million yen*1 FY2013 COD: 116t; BOD: 35t; SS: 48t; drainage volume: 5.31 million m3*2 COD (chemical oxygen demand): Amount of oxygen required to chemically oxidizeorganic matter in water with an oxidant*3 BOD (biochemical oxygen demand): Amount of oxygen required for organisms todecompose organic matter in water*4 SS (suspended solids): Amount of insoluble substances in water(persons)

900

804

820

21.6

22.3

830

860

21.6

(%)

25

5

300

0

192

FY17

FY18

FY19

FY20

conductors and printed wiring boards is increasing further. We willdielectric and low dielectric tangent, high elasticity, and low coeffi-(low-dielectric and low dielectric tangent glass), which supports 5G

cient of thermal expansion (low CTE) to further accelerate the evo-high-speed and large-capacity communications and high-speed

lution of digital infrastructure.

All industries (digitization imminent)

4.9

Digital industry
Cloud

Cyber security
Data centers Telecommunications
equipment

169
FY21

4.1

4

4.0

Platforms

4.1

Semiconductors(integrated circuits)

3.5

Semiconductors(integrated circuits)

3(Source: Compiled and processed by the Company from the
Ministry of Economy, Trade and Industry's 3rd Semiconductor
and Digital Industry Strategy Review Conference, May 2021)

5
0

0

FY17

FY18

FY19

FY20

5G

FY21

Semiconductor Market Growth by Major Application●Ratio of females in management positions

Until recently, the semiconductor market was driven by growth inare becoming more widespread, smart cities, and industrial equip-

Average career years of male/female employees (non-consolidated)

Number of annual paid leave days taken (non-consolidated)

PCs and smartphones. Going forward, given the progress of digital

ment markets related to smart factories, with the market expected(years)(days)

transformation, the semiconductor market is expected to grow for

to grow to approximately ¥100 trillion by 2030.

20.8
21.2

19.8
19.8

19.5
19.8

20

19.0
19.1

18.8
18.2

data centers, the automotive field where EVs and automated driving

12.6

13

Global Semiconductor Shipping Trends and Major Applications

12

15

11

10

10

10.8

10.7

10.2

10.2

Industrial
equipment
Automobiles

FY18

FY19

FY20

FY21

0

FY17

FY18

FY19

■Number of annual paid leave days taken

FY20

FY21

Industrial
equipment

PC

Mobile phones

Total market size: approx. ¥20 trillion

Nittobo Group

Integrated Report 2022

Smartappliances

Appliances
Data centers

Mobile phonesPC(smart cities,
smart factories, etc.)

Smart appliances

Automobiles
AppliancesPC

Red outline: market growth areas
Green outline: mature market
maintenance areas

Automobiles

Datacenters/
SSD

Appliances
Data centers/
SSD

Total market size: approx. ¥50 trillion

Mobile phones

Total market size: approx. ¥100 trillion

Data Section

FY17

Industrial
equipment

2020
2001

■Average career years of male employees■Average career years of female employees

2030 (forecast)

Automotive and industrial devices are expected to see significant growth as
new services are rolled out with the spread of connected devices.

50Foundation for Value Creation■Workforce (left axis) ■Female workforce (left axis)●Percentage of female employees (right axis)

25

20

continue to develop high-performance Special Glass with low-gy, we offer two types of Special Glass. The first is NE-glass

Strategies for Value Creation

10

179

high-performance glass cloth to support the advancement of semi-

producing the finest yarns in the world.

20

783

600

180

and diverse. With consistent quality, the Group is responding by

Digital infrastructure

15

166

communications society, including 5G, the demand for cutting-edge,

Ratio of females in management positions (non-consolidated)(%)

As we move toward the realization of a high-speed, large-capacity

advanced and compact, needs are becoming more sophisticatedNittobo Group’s Value Creation

Workforce (non-consolidated)/ratio of female employees

20.6

age substrates.

processing packages. The second is T-glass (high elasticity and low■COD*2 (left axis) ■BOD*3 (left axis) ■SS*4 (left axis)●Drainage volume (right axis)

22.0

thermal expansion glass), which is essential for high-density pack-materials with high strength, high elasticity, and low-dielectric

As special composition glass based on our proprietary technolo-■Withdrawal water (left axis) ■Withdrawal water by Nitto Beverage Co., Ltd. (left axis)●Per unit of consolidated net sales (right axis)

1,200

The Nittobo Group offers a wide range of glass fibers for electronic
properties. As electronic devices continue to become more

15.0

85.3

5.93

33.7% reduction in total amount (vs FY13)*1(Source: Compiled andprocessed by the Company
based on the Ministry of
Economy, Trade andIndustry’s 4th Semiconductor
and Digital Industry Strategy
Review Conference,
November 2021)

Nittobo Group

Integrated Report 2022

21

Feature: Special Glass Technology and Market Trends

Expanding the Applications of Special Glass
servers, as well as digital communication modules required for theThis material is indispensable for logic and memory semiconduc-further development of 5G/6G and advanced SoCs (integrated cir-tors, with significant growth expected for these mainstream areas

cuits) that incorporate AI, which controls advanced driver assis-of the semiconductor market.

tance systems (ADAS) for autonomous vehicles.

In the logic field, we are expanding into the fields of central pro-In the memory field, DRAM is being increasingly adopted, for use

cessing units (CPUs) and graphics processing units (GPUs), whichwith CPUs and GPUs, along with NAND memory, which stores infor-

are becoming increasingly sophisticated in PCs and data centermation even when the power is turned off.

Low loss

0.00604G
E/
Dk

Development of low-dielectric and low-dielectric
tangent GF for high-speed servers and switches
NE, NER, DX I, DX II

0.00400.0030In mass production
In small-quantityNE
0.0020 5G
production
NER
2022 samples
0.0010T
Dfw
Lo

0.0050

Df@10GHz

Applications are expanding for the Nittobo Group’s Special Glass.

High elasticity, low linear
expansion coefficient GF

0.0070

DX I

6G

f

en

m
lop

ow

rL

the

ur
tF

/D
Dk

3.0

4.0

ve
De

5.0

6.0

7.0

Glass ClothDevelopment Challenges

100

AI
Smart cities
EVs

Logic
(for control)

Product example¥21 trillion

GPU
SoC

5G infrastructure
DC/HPC
IoT

Memory(for data storage)

100Gbps

Low latency

10ms

1ms

0.1ms

Multiple connections(units/km2)

100,000

1,000,000

10,000,000(Source: Prepared by the Company)

PC

Other

• Heating up to 220°C when mounting package on substrate• T-glass suppresses package substrate elongation• Solder ball connection defect reduction

E-glass

Motherboard(E-glass fiber: CTE 5.6 ppm)

NAND

¥15 trillion

Powersemiconductors
Image sensors

2025 (forecast)

T-glass

Semiconductor package substrate(T-glass fiber: CTE 2.8 ppm)

(Source: Prepared by the Company, based on Ministryof Internal Affairs and Communications data)

Ultra-Thin Glass Cloth Development Roadmap

2030 (forecast)(Source: Compiled and processed by the Company based on the Ministry of Economy,
Trade and Industry’s 4th Semiconductor and Digital Industry Strategy Review Conference, November 2021.)

Finally, technology is trending towards thinner devices, which

has the features of low CTE and low loss. The source of thisrequire super ultra-thin glass cloth. In all electronic devices, glass

strength is our integrated yarn and cloth production and our coop-

cloth must be super ultra-thin to the utmost limit. The Group is now

erative development system that integrates yarn and clothmass producing 10-μm cloths, as we work to further development

research, development, technology, and production units.

of super ultra-thin glass cloth.

Strategies for Value CreationJapan• When chips are mounted on package substrates,
the temperature is raised to about 250°C• T-glass suppresses package expansion andconnection failures

Chip

Semiconductor chip
(CTE: 3.3 ppm)

Analog LSI

20[Further CTE reduction] + [Lower loss of T-glass]

DRAM

40

2020 (forecast)

10Gbps¥18 trillion

Smartphones

2010

1Gbps

Nittobo Group’s Value Creation

Amount of goods shipped

Market size
2018

Processors

80

2001

High speed,large capacity

8.0

100°C or higher when power is turned on

Automated
robotics(trillion yen)0

6G

Dk@10GHz

Global Semiconductor Market

60

5G

Low Dk/Df

DX II

0

4G

Conventional

To realize ultra-thin glass cloth at the fastest speed in the world

We are leading the semiconductor packaging field by adding

for the field while maintaining low CTE and low loss, we willsuper ultra-thin specifications that accelerate the miniaturization

advance R&D that will lead to market superiority while identifying

and high functionality of electronic devices to Special Glass, which

growth areas from a long-term perspective.

been increasing in size, partly due to chipletization (a technique ining the Internet of Everything (IoE) in the 5G era. The growth of thewhich logic components are individually designed and manufactured

motherboard market for network equipment requires support for

as separate chips and combined like block toys to operate as if they

800GbE (112Gbps), which is twice the current speed. We havewere a single chip). The increasing size consumes more power,

begun production of next-generation low-dielectric glass fiber tocreating growing need for even lower CTE. In order to reduce trans-

meet the 112Gbps speed. As transmission speeds continue tomission loss due to faster processing speeds, low dielectric tangent

increase, we are developing state-of-the-art low-dielectric glass

characteristics are also required to reduce transmission loss. The

fiber with a low dielectric and a low dielectric tangent, and we plan

Group is embarking on research and development for the demand

to begin shipping small-batch samples of the next generation offor low-dielectric loss in CPUs for high-performance servers such

low-dielectric glass fiber in 2022.

as AI servers and other ultra-high-speed processing.

Dominated

Leading the market with high functionality & super ultra-thin bytaking advantage of integrated production from yarn to clothand collaborative development

StrongStrongest

Dominated

StrongStrongest

General-purpose CTE
Applications/requirements

Nittobo lineup

For package /super ultra-thin materials

E-glass

For package /low CTE materials

T-glass

High-speed package andRF modules/
low Dk, Df materials

2019

2020

2021

2022

2023

Low-loss
2024

2025

Data Section

High-speed telecommunications are now fundamental to support-

Strongest

Low CTE, high elasticity, low Df

Ultra-low loss

Super ultra-thinfor semiconductor packages change. Semiconductor packages have

Low CTE

Thick

continued leading the industry as a pioneer in low-dielectric glass.

Super Ultra-Thin Glass Cloth Development Roadmap

Super ultra-thin

Demand for T-glass is growing as the characteristics required

Thick

The Nittobo Group first developed NE-glass in the 1990s and has

Foundation for Value Creation

Special Glass Research and Development Roadmap

E1006; 10μm
Super ultra-thin: 8μm
T1006: 10μm
Super ultra-thin: 8μm
NE1017: 15μm

NE-glass

NE1010: 13μm
NE1006: 10μm

(Source: Prepared by the Company)

22

Nittobo Group

Integrated Report 2022

Nittobo Group

Integrated Report 2022

23

Initiatives to Achieve Our Vision for 2030

Glass Fiber Business

Next-Generation Special
Glass Development Status

Pursuing global niche No. 1
through a corporate culture ofproactive action and challenge

Efforts to Develop Human Resources Who Initiate
Change as Set by the Mid-Term Business Plan

To create new products, we will work with the Research &As I mentioned previously, I truly believe that proactive humanDevelopment Headquarters to accelerate our ongoing productresources are a fundamental ingredient for change. We needdevelopment. In next-generation low-dielectric glass, we arepeople who think for themselves and take action. Rather than aproceeding in line with customer evaluations and the establish-

top-down culture, I believe that such human resources are best

ment of mass-production technology within the Group. The

cultivated through the practice of taking on many new challenges

specifications for the next generation of Special Glass products

in which each individual will gain new insights, and as a result,

are gradually becoming clearer as an issue for the Group to

become someone who can initiate change. Since assuming

address as we receive customer feedback and understand mar-office, President Tsuji has been committed to fostering an open

ket demand. We have decided to further integrate and merge thecorporate culture and, in addition to this, I would also like tofunctions of the business divisions and the research institutework to foster this atmosphere of taking on new challenges.
I would like to allow young employees to try out their propos-

through a change in structure in July 2022. In the future, we will

Hisanobu Hayashi

Managing Executive Officer
General Manager of the Glass Fiber Division

create high value-added products by accelerating integrated

als even if this requires risk taking. Furthermore, we need tooperations with the Research & Development Headquarters.

actively and intentionally develop our personnel rotation systemfor young and mid-career employees. By integrating diverse
human resources in a thought-out manner, we can succeed
systematically, step-by-step, in creating a mechanism and culture that allow individuals to take on challenges beyond their

obtain essential information and provide focused plans to cus-

We recognize that fiscal 2021 was a year in which the market isto actively engage in a variety of activities with our customers

returning to normal, compared to fiscal 2020, when the market

and the market. In order to achieve this, each department within

was very disrupted by the COVID-19 pandemic. I think it is com-

the Company must actively encourage other departments.

mendable that we were able to increase the sales volume of

Nittobo must maintain a proactive attitude as an entire organiza-

Special Glass, which is targeted for expansion in the medium

tion, not just in sales, but also in manufacturing and development

term, and of some value-added products among composite

as a whole. We will establish awareness and mechanisms thatmaterials. I think that profitability was depressed due to factors

enable us to act with sensitivity to demand and customer requests,

such as cost increases, rising logistics costs and energy priceand to set priorities and act quickly in a consistent manner.

the previous year.

us to passively listen to the market and our customers—we need

Demand for products for electronic materials tends to fluctuate widely, and when demand recovers, we often receive large

We initially assumed that demand for Special Glass wouldorders from customers in a short period of time. The Nittobo

pick up a little earlier, and we went about making the necessaryGroup has many niche and unique products, and if we cannot

preparations for production. Ultimately, however, demand failed

offer our products and solutions to our customers throughout

to rebound as quickly as we had hoped.

such fluctuations, achieving our goal of being a Global Niche No.
We have been executing Special Glass growth investments for

Aspirations since Becoming Division Headthe past several years. One such example is the new factory of
NITTOBO ASIA Glass Fiber Co., Ltd. (NAG). Although there weresome difficulties in starting up the factory during the COVID-19

2022. Since the medium-term direction of the Glass Fiberpandemic, we were able to start production with the warm sup-Division has already been clearly defined by the Company, I

port of the Taiwanese authorities and the local community, andbelieve that what I need to do is to decisively move forward inby efficiently incorporating the technology and know-how thatthat direction and speedily implement the various measures.

we cultivated in Japan. We will continue to make the necessary

In the Mid-Term Business Plan, the Group’s goal is to become
a global niche No. 1 company and the world’s No. 1 company

PCB Trends

Glass Cloth
Trends5G

Miniaturization

Ultra-thin type

Cloud computing

High density, multilayer

Low Dk, low Df

Automated driving

High-frequency compatible

High reliability

AI, IoT, VR/AR

High rigidity

High rigidity

Increased smartphone functionality

Low CTE

Low CTE

Data Section

I have been in charge of the Glass Fiber Division since April

Technology
TrendsFoundation for Value Creation

1 company will not be possible.

Glass Fiber Business Growth Opportunities (Electronic Materials Field)

Strategies for Value Creation

hikes that resulted in a slight decrease in the profit compared to

comfort zone.
Nittobo Group’s Value Creation

Looking Back at Fiscal 2021

tomers based on the information gathered. It is not enough for

preparations for the future without being swayed back and forthby short-term waves of demand.

with high sensitivity and value-added products. The Glass Fiber
Division is developing specific initiatives to achieve these goals.
To remain No. 1 in our niche area, we must do the footwork to

24

Nittobo Group

Integrated Report 2022

Nittobo Group

Integrated Report 2022

25

Initiatives to Achieve Our Vision for 2030

Life Science Business

Passionately creating a strong
value chain by fostering humanresources and promoting exchange

speed of research and development, we established FAN Co.,

since fiscal 2021. Not confined to the Nittobo Group, the tightLtd., a joint venture with FUJIKURA KASEI CO., LTD., a company

labor market is broadly impacting the U.S. manufacturing indus-

which has strong research and development of raw materials fortry. In terms of raw material costs and logistics, prices of chemi-

in vitro diagnostics, including latex.

cals and other products are rising, and there are various

In the upstream production of antisera, Nittobo acquired

negative factors to consider, such as the potential fallout from

Capricorn Products, LLC on the East Coast of the United States

the situation between Russia and Ukraine on the entire(Maine), adding it to Nittobo America Inc.’s existing bases on theEuropean region. In fiscal 2022, we will accelerate the achieve-

West Coast (California) and in the Midwest (Iowa), giving it threement of the goals set forth in the Mid-Term Business Plan andbases and an overwhelming share of the global market for

take on the challenge of further building the Nittobo brand togoat-derived antisera. In addition, a factory is under construc-create a business model for independent sales in emerging

tion in California that will expand the production space by 150%

countries while strengthening partnerships with major global

when it is completed in the second half of 2022. Downstream, weplayers.

acquired Kamiya Biomedical Company, LLC, which has global

Tatsuo Sakae

Managing Executive Officer
General Manager of the Medical Business Division
President and Representative Director of NITTOBO MEDICAL CO., LTD.
Chairman and CEO of Nittobo America Inc.

regulatory approval know-how and a sales network in the U.S.
IVD market, the largest in the world.
Antisera manufactured in the U.S. is made into final products

Taking on the Challenge to Further
Enhance Strengths of the Supply Chain
Human resources are the backbone of a strong value chain. We

Prefecture) and delivered to customers in the U.S. and Europe.

have started human resource exchanges to link management inCurrently, plans are underway to establish a new diagnostic

Japan and the U.S. and bring the value chain closer together byagent production facility in the U.S. We believe that establishing

fostering the human resources that will lead the future. With ourquality from lot to lot and ongoing quality control are key becausea system that can supply products of the same quality as invision for 2030, we will rotate human resources through thethe products are biologically derived. The Nittobo Group has built

Japan will serve as an effective BCP measure against COVID-19

development, production, and sales areas based on backcasting,an integrated value chain starting from upstream processes,

lockdowns and the situation in Ukraine. By strengthening ourand build a system to cultivate the next generation.

The Nittobo Group has developed in vitro diagnostic (IVD)

thus gaining the overwhelming trust of its customers. The

value chain and localizing our operations, we seek to become anreagents with one hundred testing parameters to determine

expansion of the Life Science Business in a short period of timeindispensable presence for our customers.

health status from blood and urine. We have established a sig-

is thanks to this successful vertical integration.

Focus on Strengthening theValue Chain and Localizing Operations

nificant presence in immunological in vitro diagnostic reagents,

To further strengthen vertical integration, we have invested in

As part of these efforts, under the theme of proposals for the
future, we have designed an event in which multiple teams of

In fiscal 2021, Nittobo’s Japan and U.S. businesses achieved

young employees make business proposals. I am very interested
in seeing what kind of proposals will emerge, and we are consid-

Rimco Corporation, which conducts research on geneticallycapability to generate native antigens and the ability to do very

ering incorporating the best proposals into the Mid-Term

Immunology Specialists.”

modified silkworms in the area of antigen development and anti-patient, analog work. In contrast, Japan has the technology to do

Business Plan. If we can achieve this, I believe our employees will

gen purification, the most upstream area of this business. We

this digitally through genetic modification. This time, NMD’s

become even more motivated, and I hope that the young employ-tical integration of Nittobo America Inc. which develops, manu-

also acquired Frontier Institute Co. Ltd. for bioassay system

R&D supported the antigen development conducted by Nittobo

ees who participate will grow into global human resources.

factures, and markets antisera, and Japan-based NITTOBO

development and antibody research. These acquisitions

America Inc.

MEDICAL CO., LTD. (NMD) which develops, manufactures, andstrengthened our antigen and antibody R&D capabilities. In

facturing field, we sent people from the factory in Fukuyama,

markets IVD products. In the diagnostics business, uniform

order to further broaden the scope of IVD and accelerate theJapan to Nittobo America Inc. to experience the manufacturing

Review of FY2021 and Forecast for FY2022

Strategies for Value Creation

results by collaborating on antigen purification. The U.S. has theand we are recognized in the industry as “Nittobo the
The most significant feature of the business model is the ver-Nittobo Group’s Value Creation

at NMD’s factory in Fukuyama (Koriyama City, Fukushima

As a first step toward Japan-U.S. collaboration in the manu-

process in the U.S. We are now examining how to integrate andoptimize the manufacturing of IVD in Japan with our understand-

Glass Fiber Division Growth Opportunities (Electronic Materials Field)
Far upstream

Mid-stream

Expansion of antisera
production for raw
material

Expansion of in vitro
diagnostic reagent
production sites

Rimco Corporation

Capricorn Products, LLC*

NITTOBO MEDICAL CO., LTD.

(Uruma City, Okinawa):
Investment made August 2018

(Maine, U.S.A.):
Acquired June 2019

Frontier Institute Co., Ltd.

Nittobo America Inc.

(Koriyama City, Fukushima):
Construction of new factory,completed December 2021

FAN Co., Ltd.

(California, U.S.A.):
Completion of a new factory
due second half 2022

(Chiyoda City, Tokyo):
Jointly established April 2019

*Merged with Nittobo America Inc.
in 2020

Nittobo Group

Integrated Report 2022

Downstream

Access to global pharmaceutical regulatory
clearance expertise andacquisition of sales
networks

We have been building a value chain that leverages the

pandemic has significantly reduced the number of people visit-

strengths of vertical integration, and I believe that we are finallying hospitals. This was particularly noticeable in the first quarterat the stage where we can start experiencing the benefits. Weof fiscal 2020, when the number of visitors dropped by 50 to 70

expect this to result in a very unique business model, even com-percent from the previous year, leading to a severe performancepared to the rest of the world.

result for fiscal 2020.

The value of the Life Science Business has expanded dramat-

In fiscal 2021, sales in both domestic and overseas markets

ically. On its own, NMD was essentially regarded as an assembly

recovered to a level higher than before the COVID-19 pandemic.

company. Then we added Nittobo America Inc., which manufac-

Kamiya Biomedical Company,
LLC

Overseas, in particular, we received orders exceeding actualtures raw materials upstream, and these are refined and anti-(Washington, U.S.A.):
Acquired January 2019

demand as global companies moved to secure a stable supply ofgens are developed further downstream. By providing global

IVD in anticipation of a recovery in the market.

distribution, Nittobo now extends throughout the entire supply

On the other hand, the tight labor market in the U.S. has led
to a decline in the retention rate of factory workers and other

Data Section

Strengthening of R&D
functions in antigens
and antibodies(Ishikari City, Hokkaido):
Acquired March 201926

Upstreamchanges in the state of the economy. However, the COVID-19

ing of antisera manufacturing in the U.S.

Foundation for Value Creation

The IVD business has traditionally been considered resistant tochain. I believe our next challenge is to further solidify Nittobo’s
supply chain strength.

field operators, while rising labor costs have been a concern

Nittobo Group

Integrated Report 2022

27

Initiatives to Achieve Our Vision for 2030

Research & Development Headquarters

Special Glass Market Trends andDevelopment of Glass Fiber

Create technologies that contribute to
the realization of a society of symbiosis
and coexistence by harnessing synergies across the entire Nittobo Group
Kazuhiko Igarashi

Director, Managing Executive Officer,
President of Research & Development Headquarters
Head of Digital Transformation Strategy Office,Environment Technology Strategy Office

Implementing Efforts to Embed DX
in the Field

Special Glass will undoubtedly support the social infrastructure

In 2021, the Digital Transformation Strategy Office was estab-of 5G and 6G high-speed, large-capacity communications in thelished under the umbrella of the Research & Development

information society of the future. When I was head of the Glass

Headquarters to begin the use of digital transformation (DX) ini-

Fiber Division, I predicted that demand would grow a bit faster.

tiatives. In the first year, we undertook various educational activ-

Progress has been slower than expected due to external factors

ities to raise awareness of DX among employees, and training tosuch as the COVID-19 pandemic and trade friction between thedevelop data scientists and business translators as the first step

U.S. and China. Furthermore, at this time, 5G is dominated byin promoting DX. In fiscal 2022, we have designated model facto-

Sub6, a communication method using frequency bands below 6

ries and assigned DX ambassadors to optimize the melting ofGHz, an area where conventional 4G can be improved. NE-glass

glass melting furnaces as a DX-based improvement activity. By(a type of low-dielectric glass Special Glass), a Nittobo Groupquantifying the craftsperson-like instincts and wisdom of those in

specialty, will become indispensable when millimeter waves in

the field, the results of DX can be visualized and its effects realized.

the 28 GHz band are used for 5G in Japan, and we believe thatdemand will grow at an increasing pace.

Realizing Big VISION 2030

Customers have already started requesting samples for 6G.
The Nittobo Group has developed NER, the next generation ofand “Health/Security/Safety” as the themes to which the Nittobo

Little by little, changes are being made, and we will work on how

generation products under the code names DX1 and DX2, and areGroup should contribute. The Nittobo Group’s core competencies

to continue our progress in the future.

in glass fiber, medical, textiles, and other fields will make thiswith even lower dielectric and lower dielectric dissipation factor.

possible. We will continue to promote research and development

I joined the company in 1990 and my first assignment was in a

the first in the world to establish an industrial manufacturing

The direction of future development will be to seek the char-in the belief that the future of the Nittobo Group depends on how

research center. Just a year later, however, as a result of struc-process for polyallylamine (PAA®) and this sort of polymer tech-acteristics of glass plus the limits of thinness. In fact, glass

successfully we can combine our core competencies, which ourtural reform following the burst of the bubble economy, that

nology is now being used in the medical in vitro diagnostic

cloths of less than 10 microns in diameter are starting to becustomers rely on and value, to create further synergies.

research center was temporarily dissolved, and I was assigned

reagents business. In the glass fiber business, it is also applied

used. Glass fiber has superior insulating properties, strength,

We would also like to more fully transform into a company

to the manufacturing division from my second year onward.

to surface treatment agents for coating glass surfaces. In addi-

ease of use, and cost. It is unlikely to be replaced by alternatives

that coexists with the global environment and local communities

tion, through collaboration between the textiles and glass fiberin the short term. As an effort to go above and beyond, we areby providing materials that improve the environment, by develop-

always felt the dilemma that new development and creation

business, we have started to develop the dot adhesive technology

conducting research and development through breakthroughs

ing diagnostics that lead to healthy lives and contribute to earlyshould be handled by research centers. After a while, I assumed

cultivated in interlinings into the Glass Fiber Cloth Business forbased on bio-solubility and an approach that integrates our pio-detection of signs of illness, and by being actively involved in

the position of President of the Research & Development

industrial applications that could not be developed by the textile

neering flat fiber technology with irregular cross section fibers.

social issues and the SDGs.

Headquarters in April 2022, and I feel that I am now at the start-

unit. We will continue to further activate and expand these efforts.

ing line where I can actually realize what I have envisioned R&D

At the time of its establishment, the Research & Development

research and development for the next five to ten years. As one

needs and demands on companies are changing dramaticallyof our most important business, glass fiber is devoting resourcesfrom what they used to be. Another challenge is that it is becom-

to researching the composition of next-generation glass anding increasingly difficult for companies to meet these demands

fundamentally reviewing surface treatment agents, as well as toalone. Collaboration with other companies, academia, and gov-

Materials Informatics (MI)*, which is indispensable in advancing

ernment is becoming increasingly important.

these efforts.
In the medical field, we aim to increase product variation sothat we can expand the number of items tested by in vitro diag-business divisions. In line with this, the Research &nostics for the immune system. In an unconventional approach

Development Headquarters was established in 2017 as one of

to in vitro diagnostics, we are sending Group researchers to

the pillars of the previous Mid-Term Business Plan. Then, in

overseas university laboratories to conduct joint research.

2020, research and development began in the new NI-CoLabo

Currently, we are collaborating with more than 20 laboratories.

building where researchers in three business fields can cometogether. However, I believe that creating synergies across business divisions remains a major issue to address in the future.

Integrated Report 2022

*Materials Informatics: Efforts to improve the efficiency of materials developmentusing informatics (information science) methods that utilize statistical analysis, etc.

2024

2026

2028

6G Specifications

2030

6G (10 x 5G capacity) Production

5G mature stage, industrial application expansion

5G—6G Timeline

5G expansion stage (millimeter wave), local expansion
5G initial stage (Sub 6) mobile expansion

Smartphones

5G-Sub6 1Gbps

Base stations

5G-Sub6 BBU•RRH

Vehicle-mounted radar

High speed, low-latency, multi-connection

5G millimeter wave 10Gbps (28GHz)

6G 100Gps

5G millimeter wave BBU•RRH

Quasi-millimeter wave radar

Millimeter wave radar
1.6TbE 100Gbps×16L

800GbE 50Gbps×16L

Routers
Switches

200Gbps×8L

100Gbps×8L

400GbE 50Gbps×8L

200GbE 25Gbps×8L
100/200GbE 28Gbps×4/8L

Data Sectionronment, we must promote research and development across2022

6G Study

Wired telecoms market

For the Nittobo Group to fully realize its potential in this envi-

2020

Foundation for Value Creation

recognize is that the world is changing at a very rapid pace. The

2018

More advanced functions in 5G devices

than 130. The purpose of the expansion is to strengthen basic

Wireless telecoms market

R&D is now in a very difficult phase. One of the challenges we

Nittobo Group

Implementing the 5G-6G Roadmap

Headquarters had a staff of 70, which has since grown to moreshould be.

Strategies for Value Creation

simultaneously working on composition and development of glass

For example, in the specialty chemicals business, we were

Manufacturing can build and optimize existing products, but I

28

Big VISION 2030 sets forth “Environment/Energy,” “Digital Society,”for certification. In addition, we have developed a series of next-

Nittobo Group’s Value Creation

A Vision for R&D Close to the Heart

NE-glass products, and is in the process of providing samples

High speed, large capacity, low latency
PCIe6.0 63Gbps×16L

Servers

PCIe5.0 32Gbps×16L
PCIe4.0 16Gbps×16L

High speed, large capacity

Products Supplied/Under Development by Nittobo
Low transmission loss (in mass production)NE   Ultra-low transmission loss

NER   Next-generation super-low loss I

DXI   Next-generation super-low loss II

DX II(Source: Compiled by the Company based on Ministry of Internal Affairs and Communications materials)

Nittobo Group

Integrated Report 2022

29

Business Strategies

Glass Fiber BusinessAlthough sales of composite materials for reinforced plastics were firm, profit decreased due to periodic repairof large-scale melting furnace in Japan and soaring raw material and fuel prices.

FY2021Business
Results

Glass Fiber Yarn BusinessNet sales

Operating profit(million yen)(million yen)

Business
Description

30,000

The Glass Fiber Yarn Business manufactures and sells glass fiber yarn, as wellas roving and chopped strands used as base materials of composite materials.

29,172

26,44225,017

6,559
23,124

23,345

6,000

3,937

20,000

The Nittobo Group’s glass fiber contributes to thinner and more compact dimenSocial andsions in electronic devices such as smartphones and to lighter weight in autoEnvironmental
Contributions
mobiles and aircraft.

10,000

0

3,091

3,000

FY17

FY18

FY19

FY20

FY21

0

FY17

FY18

FY19

2,368

FY20

1,733

FY21

• Implementing Growth Strategies

Glass fibers for composite materials

We are focusing on increasing the production capacity and expanding the applications of high value-added products such as E-glass ultrafine yarn,
T-glass, and NE-glass with special compositions by utilizing our technological strengths to meet the increasingly sophisticated needs of the market.

Strength•F lat fibers (FF) are

Special composition

Investment Domains

plastic reinforcement for a wide range of
products, including casings for smartphones, tablets, and notebook PCs, along

T-glass (low thermal expansion)

with helmets, automotive parts, bathtubs,

NE-glass (low dielectric constant, low dielectricand other consumer products.

dissipation factor)
Rovings

Chopped strands

Thick count/
thick material

Fine count/
thin material

Medium and thick cloth
Chopped strand mat(commodity use)

Commodity composition

Glass fiber yarns
FOCUS
ON

• Manufacturing
technology for theworld’s most precise yarns (3.5μm)•D evelopment and30

Nittobo Group

Integrated Report 2022

High Value-added Glass Fiber for Composite Materials: Flat Fiber

Two important properties of glass are insulation and heat-resistance. Glass fiber yarns processed into

Chopped strands used in plastic reinforcing materials are glass fiber cut

cloth have become indispensable as an electrical insulating material for printed wiring boards.

into small pieces, usually circular when viewed cross-sectionally. The

Different Warp Levels of
Composite Panels with Flat Fiber

Nittobo Group’s Flat Fiber (FF) is a high-performance chopped strand with
Value Chain

Glass fiber yarn
• Glass composition
research• Spinning technology:
ultrafine• Melting furnace design
technology• Production know-how

Integrated product development fromglass fiber yarn to cloth

Glass fiber cloth• Weaving process• Fiber opening technology• Interface treatment

an oval-shaped cross-section developed with Nittobo’s proprietary technology. Its cross-sectional shape forms a molding material that helps
exhibit various useful properties as improving flowability, dimensional stability, and tensile strength. In terms of dimensional stability, it is effective inpreventing warping and torsion of molded products, and is used for smartphone housings and automotive components.

Flat Fiber Characteristics

Circular fiber (regular)

Oval fiber (FF)

Circular fiber in use

Oval fiber (FF) in use

Data Section

manufacturing ofspecial composition
low-dielectric andlow thermal expansion Special Glass■: Nittobo Group’s Strengths

Foundation for Value Creation

Strength

Strategies for Value Creation

E-glass
Super ultrafine
to fine countSuperultra-thin cloth

E-glass thick countCut fiber

Nittobo Group’s Value Creation

made with an oval
shape cross-section
to contain the warping and twisting ofmolded products.

Rovings and chopped strands are used in

High flowability

High strength

Impact resistance

Surface smoothness

Dimensional stability

Nittobo Group

Integrated Report 2022

31

Business Strategies

Glass Fiber Business

Both sales and profits increased due to growth in sales of Special Glass cloth for electronic materials.

FY2021Business
Results

Glass Fiber Cloth BusinessNet sales

Operating profit(million yen)

The Glass Fiber Cloth Business produces glass cloth used as

Business
Description

20,000electronic materials.

13,750

The Nittobo Group’s Special Glass cloth is used as a low-dielectric substrate forSocial andelectronic components, helping to realize high-speed, large capacity communiEnvironmental
Contributions
cations through 5G.

20,371

19,843

22,948(million yen)

2,919

3,000

14,043

2,130

2,031

FY17

FY18

3,065
2,626

2,000

10,000
1,000

0

FY17

FY18

FY19

FY20

FY21

0

FY19

FY20

FY21

• Nittobo Special Glass

Glass cloth for printed wiring boards

Progress is being made in the shift to 5G for high-speed telecommunications and in the expansion of data centers to handle ever-increasing data
traffic. Nittobo’s Special Glass contributes to the speed and functionality of electronic devices required for high-speed processing of vast amounts ofdata. With speed increases in consumer devices like smartphones and tablets in line with the improvement of global infrastructure, such as the
expansion of data centers and installation of 5G base stations, we can expect increasing demand for low-dielectric NE-glass and high-strength, lowmaking ultra-thinglass cloth
technology tounravel strands inwoven glass cloth• High-performancebinder technology

insulation, heat resistance, and dimensional stability. Nittobo’s ultra-thin glass cloth provides

Explanation

Fiber-opening processes to spreadyarn filaments and flatten glass cloth

Before fiber-opening
process

superior thinness and fiber distribution consisten-

After fiber-opening
processcy, making it ideal for compact but highly functional electronic devices. Our Special Glass cloths arethermal expansion T-glass.

No. 1

NE-glass/

Reduce Transmission Losses with Low-Dielectric Properties
Used in data centers and base station switches and routers that process
large amounts of information at high speeds, and in antenna in package(AiP) technology for 5G smartphones

developed using unique compositions and feature
low-dielectric constant and low-dielectric dissipation factor required in broadband communica-

E-glass

NE-glass

6.8

4.8

0.00350.0015

Dielectric constant (1 GHz)
Dielectric dissipation factor (1 GHz)

tions, as well as low thermal expansion. These

Only 1

T-glass/
High Strength, Low Thermal Expansion

Used in the semiconductor package substrate of high-performanceservers and smartphones, which require high-speed processing andNittobo Group’s Value Creation• Spread-out

wiring boards because of its superior electricSurface•T echnology for

Glass cloth is widely used as material for printed

Crosssection

Strength

high reliability
E-glass

T-glass

Thermal expansion coefficient (×10-6/ºC)

5.6

2.8

Tensile elasticity (GPa)75

86properties make our cloth a vital component ofdata center equipment, base stations, high fre-Glass fiber models

es for servers and smartphones.
Applications
Telecom/
infrastructure• Image of Glass Fiber Cloth Application

5

Integrated Report 2022

2

Insulation layer(resin-impregnated glass cloth)3

Inner layer circuit

4

Insulation layer(resin-impregnated glass cloth)

5Surface layer circuit

Copper foil
Resin
Cloth
Resin
Copper foil
Resin
Cloth
Resin
Copper foil

Surface layer circuit

Copper foil

2

Insulation layer(resin-impregnated glass cloth)

Resin
Cloth
Resin

3

Inner layer circuit

Copper foil

4

Insulation layer(resin-impregnated glass cloth)

Resin
Cloth
Resin

5

Inner layer circuit

Copper foil

6

Insulation layer(resin-impregnated glass cloth)

Resin
Cloth
Resin

7

Surface layer circuit

Copper foilEdgeequipment

Basic Requirements

Desktop, laptop PCs• Insulation• Reinforced substratestrength• Easy processing• Chemical resistance

High-end Requirements• Low thermal expansion• Low dielectric constant/low
dielectric dissipation factor

Smartphones
Tablets
Mobile PCs

Substrate types

Processors
Controllers

Semiconductor package
substrate

Motherboards

Motherboard substrate

Processors

Semiconductor package
substrate

MemoryMiddle-end
modelsCPU/GPU Low thermal expansion

T

E

MemoryLow thermal expansion

TE

Low dielectric,
low dielectric tangent

NEE

Low dielectric,
low dielectric tangent

NE/NERE

AP/CPU

Low thermal expansion

Ultra-thin T/T

Ultra-thin E

MemoryLow thermal expansion

Ultra-thin TSuperultra-thin E

Low dielectric,
low dielectric tangent

NE

Motherboards

Motherboard substrate

Low dielectric,
low dielectric tangent

Ultra-thin NE

Ultra-thin E

Wireless communications

RF package substrate

Low dielectric,
low dielectric tangent

Ultra-thin NE

Ultra-thin E

CPU
MemorySemiconductor package
substrate

CPU/GPU Low thermal expansion

T

E

MemoryLow dielectric,
low dielectric tangent

NE

E

Motherboards

Automobiles

High-endmodelsMaterial requirements

AR/VR
DronesAdvanced system-on-chip

Semiconductor package
substrate

Low thermal expansion

T

Super
ultra-thin E

Advanced driverassistance systems(ADAS)

Advanced system-on-chip

Semiconductor package
substrate

Low thermal expansion

T

E

Millimeter wave radar

Module board

Low dielectric,
low dielectric tangent

Ultra-thin NE

E

Nittobo Group

Integrated Report 2022

Data Section

Nittobo Group

Surface layer circuit

1

Motherboard

32

1

Equipment & parts

Foundation for Value Creation

Substrate forsemiconductor
package

4

Chip

3

Substrate for semiconductor package(glass cloth used)2

Motherboard
glass cloth used)1

Diagram of Substrate Cross-section

Base stations
Data centers
Switches
Routers
Servers

Strategies for Value Creation• Types of Glass Fiber by Applicationquency components, and semiconductor packag-

33

Business Strategies

Glass Fiber Business
Glass Fiber for Industrial Materials BusinessBusiness
Description
Social andEnvironmental
Contributions

Strength

21,622

21,785

21,39620,0001,000

18,55918,429

831
629
444

500

307

10,000

0

FY17

FY18

FY19

FY20

FY21

0

FY17

FY18

FY19

255

FY20

FY21

Industrial-use glass fiber

remain a pioneer in the field with an extensive portfolio of proprietary technology. Glass wool is usedwidely as insulation material in residences and buildings, contributing to energy efficiency. Moreover,
we make environmentally friendly products that contribute to resource recycling, as the raw materials
include discarded bottles and glass windows.

Strength• High-strength,
weather-resistantmembranes using
superfine glass fiber

Industrial-use glass fiber has a wide range of applications, from membranes for large-scale buildings
to vibration-damping materials for automobiles. Leveraging the lightness and fireproof properties ofglass fiber, we continue to develop new applications in the automobile and aircraft industries to serve
the demand for energy efficiency and lightweight materials.

Nittobo Group’s Value Creation

sion fiber technology
for high insulating
effect and energyefficient housing

Operating profit(million yen)(million yen)

Glass wool’s use as a heat-insulating material contributes to the creation of an energy-efficient society, while its use of recycled glass as a raw material contributes toresource saving. Glass fiber is also helping to meet fuel efficiency and weight reduction needs in automobiles and aircraft.

In 1949, the Nittobo Group became the first Japanese company to manufacture glass wool. Today, we•P roprietary preci-

Net sales

The Glass Fiber for Industrial Materials Business manufactures and sells glass wool asa residential heat-insulating material for industrial applications and glass fiber in theform of glass cloth and braided glass cloth for industrial and construction materials.

Glass wool

Sales of heat-insulating materials for residence were firm, but sales of glass cloth for equipment andconstruction materials declined and were affected by soaring raw material and fuel prices.

FY2021Business
Results• World-class broad-• Formaldehyde-freecut membranes

insulation forhuman-friendly
housing

Glass wool board for interior finish• Recycling in the Manufacturing Process

Industrial-use glass fiber (braided glass cloth)• Main Product Groups and Applications

Glass wool is a CFC-free heat-insulating material that does not use a CFC alternative. It is made with environmentally-friendly recycled glass
using advanced technology and is a designated item under Japanese green purchasing legislation.

Interior furnishings

Exterior furnishings

Strategies for Value Creation

Glass wool insulation

Industrial-use glass fiber (broad-cut membrane)• Application Examples
Membranes

80

Recycle processing
within factory
Sorting andcollection

Commercial
recycling

Back into glass
wool products

Use as heat-insulating
material in buildings, etc.

Nittobo Group

Integrated Report 2022

Recycle processing

Roll-up blinds• Light shades (illumination covers)• Surface cloths • Insect screens• Roll-up blinds

Automobiles and aircraft

Tent films• Tent films• Back-lit signboards

Construction
Transcosmos Stadium Nagasaki

Diagram: Date from Net-Zero
Energy House (ZEH)*
proposed by Agency for
Natural Resources andEnergy, Ministry of
Economy, Trade andIndustry*Z EH promotes housing with botha comfortable interior environment and an annual net energy
consumption of zero or less.

Data Section

34

Recycling withinfactory

Into glass wool products

Contribution to energy
efficient society

Example of use asheat-insulating material

Material offcuts generated
in manufacturing process

Foundation for Value Creation% or more of the raw material
used in glass wool manufacturing is
recycled glass

The translucence of the material allows for
streamlined designs that are difficult toachieve with molded products
Other Major Applications
Vibration-damping materials• Automobiles• Aircraft

Coating film waterproofing•C oncrete corrosion-proofing and reinforcement• External wall reinforcement•C oating film waterproofing

Bankwest Stadium (Australia)
Pacific Fair Shopping Centre (Australia)
Suvarnabhumi Airport (Thailand)

Nittobo Group

Integrated Report 2022

35

Business Strategies

Life Science Business

The Medical business reported higher sales both in Japan and overseas, while the Beverage business posted
improved sales and profits due to steady growth in volume of contracted beverage production.

FY2021Business
Results

Net sales

Operating profit(million yen)
16,000Business
Description
Social andEnvironmental
Contributions

Life Science Business manufactures and supplies in vitro diagnostic reagents and antisera, specialty chemicals products, and beverages.

13,692

15,052

15,89013,500

The Nittobo Group promotes healthy and comfortable lifestyles for people around theworld through the supply of in vitro diagnostic reagents, specialty chemicals products,
and beverages.

0

FY17

FY18

FY19

FY20

FY21

In the specialty chemicals products business, thehave been taken from the body to diagnose illnesses at health checkups and visits to doctors.

Group engages in the development and sale of highly

These reagents are used to measure the levels of certain substances in the samples and are

unique functional polymers such as polyallylamine andnot used directly on the human body. Doctors refer to the results of these tests, performed in

the polyamine series. We research, develop, manufac-

hospitals and commercial laboratories, to help determine courses of treatment.

ture, and sell highly unique products to customers with

FY17

FY18

FY19

FY20

FY21

Nittobo Group’s Value Creationmaterials, and generic drugs.

• Major Product Groups and Applications
Auxiliary agents formetal processing• Electrolytic plating• Acid corrosion inhibitor• Metal processing cutting
oil additive

Reagent
development

Reagent
production

Reagent sales

E. coli

Frontier Institute Co., Ltd.
Nittobo America Inc.
(California/Iowa/Maine)

Other companies

Kamiya*2

NITTOBO MEDICAL CO., LTD.

Stable quality, proven track record in immunology,
high sensitivity

Antisera

Auxiliary agents for textile processing• Wastewater treatment• Metal scavenger• Decoloring• Dye-fixing• Friction fastness improver• Deep-coloring

Beverages

In the beverage business, we specialize in high-variety, small lot production to meet the needs of individual brand owners throughOEM production of private brands. We pursue differentiation from competitors by meticulously following recipes and rapidly switching between product types.

Data Section

Antigen and antibody development,
antisera production know-how

FAN Co., Ltd.*1• Anti-fouling• Anti-corrosion coating•S olid natural wood
protection

Water treatment agentsFoundation for Value Creation

Silkworms

Wholesalers and distributors

Antisera

Expansion of products to hospitals and commercial
laboratories in Japan and overseas

Product development, production, and sales

Surface-protective
agent SSG®

Strategies for Value Creation

Raw materials production

Integrated Report 2022

0such as toiletries, papermaking, metals, electronic• Value Chain of In Vitro Diagnostic Reagents

Nittobo Group

2,560

high entry barriers in a wide range of industry sectors,•T he Nittobo Group has the
top market share in Japanfor a variety of items, suchas inflammation biomarkers
and an osteoporosis biomarker, while distributing
more than 100 types ofdiagnostic reagent kits

*1 Joint venture with Fujikura Kasei Co., Ltd.
*2 Kamiya Biomedical Company, LLC

2,878

1,000

In vitro diagnostic reagents are used for tests done on samples such as blood and urine that

Rimco Corporation

2,644

2,000

Strength

Antibodies

2,858

8,000

Specialty chemicals products

Antigens

3,000

2,147

Medical (In vitro diagnostic reagents)• An integrated production
system from raw materials
to finished products allows
the Nittobo Group to stably
supply a variety of highquality products

36

12,992(million yen)

In vitro
diagnostic
reagents

Nittobo Group

Integrated Report 2022

37

Business Strategies

Textile BusinessBusiness
Description

Earnings improved as a result of higher sales due to increased outings and progress in structural reforms.

FY2021Business
Results

Net sales

In the Textile Business, Nittobo manufactures and sells products closely connected to ourdaily lifestyles, including auxiliary materials for clothing, and more. Our adhesive interlining products command a large share in the high-end ladies’ apparel market, and our
Nittobo Dishcloth™ has been a consumer favorite for more than sixty years.

Operating loss
(million yen)(million yen)
6,000

4,945

4,862
3,616

4,000

In the Textile Business, we have enhanced the range of interlining products that are
Social andfriendly to the global environment. The main items contributing to reduction of enviEnvironmentalronmental burden are formalin- and fluorine-free interlining and sustainably proContributions
duced interlining made with recycled polyester yarn and solution-dyed yarn.

FY17

2,254

Interlinings

FY17

FY18

FY19

FY19

FY20

FY21

FY20

400

FY21

131

221

2,513

2,000

0

FY18

0

800

452

373
718

Nittobo Dishcloth™

Strength

Strength

Interlinings are an auxiliary material for clothing used between the outer and inner materials to retain
and adjust clothing shape

Adhesive Interlinings

Innovative Fabric™
Innovative materials using adhesive technology• Development of
products withdeodorizing, antibacterial and otherfunctions, along withproducts reducing
the ­environmental
burden• Absorbent, smooth,and fuzz-free drying
cloth• No visible lint evenafter wiping clear
glasses

Application

popularity stretches back over 60 years. In 2015, it received the Good Design Long Life Design Award.
The product meets the strictest requirements of Product Class I (for babies) under STANDARD 100 by
OEKO-TEX®, Europe's most authoritative global standard for safety and security to certify the absence ofregulated substances harmful to the human body. This product is recognized by international standards
as safe for use on infant skin.

Nittobo Group’s Value Creation• Processing andadhesive technology
to produce theworld’s thinnest,
lightest interlinings

Created through joint research with Kurashi-no-techo Co., Ltd., this is a long-selling product whose

Application
FabricOutermaterial

Separated
intoInterlining

Special processing adds new
functionality to interlinings
and inner materials

Innermaterial

Strategies for Value Creation■Apparelsections using
interlinings• Interlinings value chainDye• Dying and processing
technology

Production• Advanced adhesive
technology•G lass fiber collaboration• Dot coating technology• Evenly-spaced dot placement• Added functionality

Bunkyo Seiren Co., Ltd.

Sales

Nittobo Advantex Co., Ltd.

FOCUS
ON

• Developing New Applications
Features of Adhesive Technology

Adheres to a wide
variety of materials and firmly
bonds different
materials together

Unique adhesive technology

38

Nittobo Group

Integrated Report 2022+

1g/m2 ofadhesive
resin

Glass fiber & specialty
chemicals collaboration

Functional dots
Small amountsof resin placed toachieve highadhesive strength=

Functional agents

Can be coated with functional agents

Dot coating onfunctional agents.
A variety of functions can be
added at a highlevel.

Market development and enhanced technologies toenter the fields of both living- and industrial- materials

After obtaining RCS certification, we are working with ourdevelopment to production and sales. In 2021, it received theraw material suppliers to obtain Global Recycled Standard

Recycled Claim Standard (RCS) certification from Control Union(GRS) certification, which has even more stringent require-

Certifications, an international certification organization. RCS

ments. GRS sets higher standards for recycled raw material

is an international certification established to promote andcontent, and also includes environmental and social consider-educate the public about environmentally-friendly textile mate-ations such as minimizing environmentally harmful substanc-rials. In addition to meeting the criteria of whether a certain

es, controlling working hours, and maintaining appropriate

percentage of recycled materials are used, the supply chain

working conditions. Through our supply chain, Nittobo will pro-must be proven to be fully traceable and managed from thevide products that our customers can use confidently, with

virgin or recycled materials to finished product.

transparency and proof of safety.

Nittobo Group

Integrated Report 2022

Data Section

Dot coating

Environmental Response Connected by the Supply Chain: Achieved RCS Certification

Nittobo Advantex Co., Ltd. handles interlinings, everything from

By utilizing adhesive technology, we will expand into both products for living- and industrial-materials.

Adhesion between different materials

Foundation for Value Creation

New

R&D

39

Nittobo’s Sustainability Management

The Nittobo Group is aware of its responsibilities as a corporate citizen and addresses ESG issues with the aim of “contributing
to the realization of prosperous communities,” a principle embodied in our corporate philosophy. We will contribute to society

Key Initiatives for Fiscal 2022

and continue our efforts to improve our environmental, social and governance (ESG) performance in order to enhance our cor-

At the fourth meeting of the Sustainability Committee in fiscal 2021, the committee discussed the activity policy and priority initiatives forporate value and achieve sustainable growth.

fiscal 2022 and decided on specific actions to be taken.

Sustainability Management Structure
The Sustainability Committee, established in April 2021, is chaired by the Representative and Chief Executive Officer and consists of theEnergyefficiency

heads of business units, the President of the Research & Development Headquarters, the Executive Officer in charge of the Risk
Management Department, the Executive Officer in charge of the Accounting & Finance Department, and the heads of major businesslocations. The Sustainability Committee meets quarterly, and important matters discussed and decided are reported to the Board of
Directors for active discussion.
Evaluation and approval

Representative and Chief Executive Officer

Sustainability Committee
Chair

Company-wide strategy
discussions and decisions

Sustainability Committee
Corporate Business Planning Department

Research & Development Headquarters

Medical BusinessTextile Business•E xpansion of electric furnaces • Implement electrification of gas furnaces• Technical study of new furnaces with a view to fuel conversion

Installation of solar power systems• PPA to install solar power generation at Fukuyama EnterpriseCenter• Switching to renewable energy

Developing environmentally-friendly products• Further strengthen product planning and development• Strengthen collaboration with customers to verify product strength• Foster understanding andawareness of sustainability
activities• Increased sensitivity to detectbusiness opportunities

System creation• Promote energy saving capital
investment by introducing
internal carbon pricing• Active external communication
to enhance corporate value

Collaboration andcooperation• Promote collaboration withlocal governments and othercompanies

Secretariat
Planning and implementing
action plans

Task Force Teams

Product
development

Electrification of gas furnaces and considerationof next generation furnaces

Mindset reform

Environmental
technologies, DX

Efforts to Address
Environmental Issues
The Nittobo Group is addressing environmental issues
in all its corporate activities and business development
based on its philosophy of passing on the irreplaceable
global environment to the next generation and developing
it sustainably through the provision of environmentallyfriendly products and services and actions.

Beverage BusinessSocial Contribution, Human Resource
Success, and Respect for
Human Rights in the Supply Chain
The Nittobo Group respects the diversity and humanrights of all stakeholders, including those in its supply
chain. Through contribution to society, we will continue
to be the “Best Partner” of all stakeholders and contribute to the realization of a prosperous society.

Strategies for Value Creation

Glass Fiber Business

Progress management andevaluation

Executive Meeting

TF Overall Supervisor:
Kazuhiko Igarashi, Director,
Managing Executive Officer

Introductionof renewableenergy• Improve yield, strengthen technology, consider introduction ofhigh-efficiency combustion equipment, etc.
•C ompany-wide expansion from glass fiber business to an all-employee initiative

Nittobo Group’s Value Creation

Activities are currently being
carried out by the following
5 task force (TF) teams:
 O2 Reduction and Energy
1. C
Saving TF
2. Renewable Energy
Introduction TF
3. Eco-Friendly ProductDevelopment TF
4. New Energy Technology TF
5. Scope 3 Reduction TF

Board of Directors

Electrificationand changing
fuel

Promote thorough energy saving

Sustainability Committee Agenda for Fiscal 2021

• Shared basic information
on decarbonization

2nd Meeting

4th Meeting• Establishment of a basic
roadmap for CO2 emission
reduction• Summarized the year’s
activities and policies forfiscal 2022 activities• Considered endorsementof TCFD recommendations• Shared ideas on proposed
CO2 emission reductions• Determined priority initiatives for each task force

Basic Stance on Human Rights
The Nittobo Group recognizes the importance of international

do business. They must also refrain from any kind of harassment

agreements such as the Universal Declaration of Human Rights,

that violates rights; unfairly discriminates against any person in

the United Nations Global Compact and the United Nations

regard to gender, age, nationality, ethnicity, race, origin, religion,

Guiding Principles on Business and Human Rights, and agrees

creed, social status, physical disability, sexual orientation or any

with their concepts and respects human rights. Furthermore, weother reason; or that gives offense to individual dignity.

•T he Sustainability Committee was newly• We revised our CO2 emission reduction• In May 2022, we endorsed the TCFD

established in April 2021 to share thetargets for fiscal 2030, identified issues

recommendations and examined thevision and issues that the Nittobo Group

at our glass fiber production sites, andrisks and opportunities posed by climate

In light of this, we require our officers and employees to com-

regulations of the countries and regions in which we operate. We

should aim for throughout the Company

developed specific activities to reducechange in all of the Group’s operations.

ply with international norms, local laws and regulations regarding

provide appropriate training to all employees in order to dissem-

and to start specific actions.

CO2 emissions.

respect for human rights in the countries and regions where we

inate the above concepts.

Nittobo Group

Integrated Report 2022

understand that we are required to fulfill our responsibility torespect human rights in all our business activities.

Data Section

40

3rd Meeting• Determined basic policy
for CO2 emissions
reduction

Foundation for Value Creation

1st Meeting• Set 5 task forces

In addition, we do not engage in child labor or forced labor forchildren who are not of working age as defined by the laws andNittobo Group

Integrated Report 2022

41

Environment

Initiatives in Support of the TCFD Recommendations
Risk Management
In May 2022, the Nittobo Group has endorsed the recommendations made by

The Nittobo Group’s Sustainability Committee and Riskchange on the Group’s operations, climate change opportunities

the Task Force on Climate-related Financial Disclosure (TCFD).

Management Committee are responsible for the planning andand risks are identified, analyzed, and addressed appropriately by

progress management of CO2 emission reductions across thethe Sustainability Committee and Board of Directors, as necessary.

In line with the TCFD’s recommendations, the Nittobo Group will discloseGroup. In order to identify and assess the impact of climate

material information on climate change as follows.

GovernanceMetrics and Targets

The Sustainability Committee, chaired by the

The Group has identified “supplying products andRepresentative and Chief Executive Officer, wasestablished in April 2021 as a body to implement

issues” and “adapting to climate change and a

the Nittobo Group’s initiatives to address climate

Sustainability Committee

every quarter to plan and manage the progress ofactivities, such as gathering information on climate

Risk Management Committeechange issues, assuming risks, formulating
countermeasures, and promoting internal educadiscussed and decided by the Sustainability

issues. These are society-wide issues that we will
focus on through our corporate activities, and we areworking to reduce the burden of climate change andprevent global warming by improving productivity,

Glass Fiber
Business

Medical BusinessTextile Business

Beverage
Business

efficiently through recycling, and utilizing solar power.
In order to achieve carbon neutrality by fiscal 2050,

Committee are reported to the Board of Directors

we will advance initiatives towards decarbonization

for deliberation as necessary.

through our supply chain through all possible measures.
Nittobo Group’s Value Creation

Scenario Analysis (Details)

mate change for the year 2030, with reference to scenarios drawn

1.5 degrees Celsius or 4 degrees Celsius above pre-industrial

up by the Intergovernmental Panel on Climate Change (IPCC), thelevels, we have identified items that are likely to have a highInternational Energy Agency (IEA), and other expert organizations.

impact with respect to each opportunity and risk. We will continue

The risks posed by climate change can be divided into those

to review our action plans as appropriate in response to changes

associated with transitioning to a low-carbon society (transition

Risk
Scenario Classification Social Change

in the external environment and reflect them in such plans.

risks) and physical impacts (physical risks). Assuming a scenario

2050• Increased demand for environmental
measures from customers and investors

4°C scenario

Integrated Report 2022

• Promote energy conservation, innovate processes, introduce
new technologies• Develop environmentally friendly products and raw materials• Implement recycling• Strengthen BCP and supply chain

4°C

Chronic• Further rises in temperature• Increased severity of disasters

Nittobo’s Response

Nittobo’s Response
Develop environmentally friendly products

Expanded use of renewableenergyIntroduction of carbon tax

Increased demand for environmentally friendly products
Increased demand for existingproducts such as high thermal
insulation and thermal barrier
products

Increased costs due tocarbon tax

Improve energy efficiency through energy conservation, process
improvements, etc.

Stronger environmental
regulations

Increased demand for environmentally friendly products

Usage restrictions due totighter regulations

Develop environmentally friendly products

Spread of low-carbon anddecarbonization technologies

Reduction of CO2 emissions andimprovement of production
efficiency through the use of
new technologies

Increased costs from
capital investment

Increased energy procurement costs

Improve energy efficiency through energy conservation, process
improvements, etc.
Develop environmentally friendly products
Expand sales of insulation materials, roll screens, SSG, etc.
and develop new products

Replace raw materials with environmentally friendly versions
Develop low-carbon and decarbonization technologies

Expanding use of high-speed,
Increased demand for products
large-capacity communications that reduce CO2 emissions

Create higher value-added low-dielectric glass cloth
Develop new technologies and products

Increased use of EVs andacceleration of fuel-efficiency

Create higher value-added glass fiber for vehicles
Develop new technologies and products

Intensifying competition
due to alternative technolIncreased demand for EV-related ogies and products,
declining market shareand lightweight products
Costs increase due to
low-carbon and decarbonization measures

Develop of bio-soluble glass fiber products

Low-carbon society,decarbonization
Transition to a recyclingoriented society

Increased demand for environmentally friendly products
Increased demand for existingproducts such as high-insulationand thermal shielding products

Increased demand forenvironmental measuresfrom customers and investors

Expand businesses that contribCost increases due to
ute to environmental responsiveenvironmental response
ness and improve reputation
requirements
among investors

Develop environmentally friendly products
Promote environmental measures such as CO2 emission
reduction, recycling, etc.

Intensification of climate
disasters (cyclones, floods,etc.) due to risingtemperatures

Increased demand for products
related to thermal insulation,
heat shielding, and national
land development

Strengthen BCP and supply chain, expand sales of products
related to heat resistance, heat shielding, and national resilience, and develop new products

Costs increase due torecycling implementation

Difficulty in maintaining
operations at manufacturing sites and increased
disaster recovery costs

Expansion of existing diseases
Increased demand for in vitro
and prevalence of new diseases
diagnostic reagents
due to rising temperatures
Intensification of disasters

Increased demand for products
related to thermal insulation,
heat shielding, and national
land development

Expand sales of insulation materials, roll screens, SSG, etc.
and develop new products
Utilize recycled yarn and develop of biodegradable fiber products
Reduce waste through recycling
Reduce raw material costs

Data Section

Reputation• Procurement and operational risks, increased restoration costs
Acute• Transition to a recycling-oriented society
through decarbonization• Cost increases (energy, taxes, raw materials, equipment, etc.)• Restricted sales activities due to tighter regulations• Decreased sales due to alternative technologies and products

PhysicalMarketRisks

Major Risks

Increased demand for products
for renewable energy-related
businesses

Foundation for Value Creation

Technology• Conversion to new energy sources• Promotion and expansion of high-speed
large-capacity communications• Increased use of EVs• Increase in sales of products related to thermal insulation,
heat shielding, and national resilience

Reputation• Promotion and expansion of renewable energy• Implementation of carbon taxes• Stronger environmental regulations

MarketPolicies andregulations•M arket expansion (EV, communications, renewable energy, etc.)• Increased opportunities for existing products (thermal insulation, heat shielding, etc.)• Increased demand for environmentally friendly productsTechnology

1.5°C scenario

1.5°C

Transition

Opportunities

Social Changes

Major Opportunities

Strategies for Value Creationin which the average global temperature increase is less than

Policies and regulations

We analyzed the impact of all Nittobo Group operations on cli-

Nittobo Group30%

Compared to FY2013 levels,
Scope 1 + Scope 2

FY2050CO2 Emission
Reduction Achieve Carbon
Neutrality
Targets

carrying out energy-saving activities, using energy

Strategy42−

resource-recycling society” as important material

Representative and Chief Executive Officerchange. The Sustainability Committee meetstion and awareness programs. Important matters

FY2030services that help resolve energy and environmental

Board of Directors

High-value-added existing products/development of new products
Impact on raw material
procurement, plant
operations, etc.

Strengthen BCP and supply chain

Nittobo Group

Integrated Report 2022

43

Environment

Environmental Initiatives

The Nittobo Group is aware of the importance of global environmental problems, and we have developed a code of conduct specifying voluntary, proactive engagement in energy conservation, effective use of resources, pollution prevention, and other environmental conservation activities for the purpose of creating and maintaining a better environment, a requirement for business
continuity. In accordance with this philosophy, we have established the Nittobo Environmental Charter and Company-Wide

Results for Fiscal 2021
The Nittobo Group conducts an environmental protection survey for its consolidated subsidiaries once a year.
The material balance shown in the figure below has been obtained by collecting data from Nittobo and its consolidated subsidiaries in Japan and abroad on environmental impacts. (Data on certain items are not collected from some overseas business sites.)

Environmental Policy and are striving for continuous improvement of the environment.

INPUT
Energy input*1

Nittobo Environmental Charter
In all our corporate activities and business development efforts, we, the Nittobo Group, will contribute to handing down the irreplaceable
global environment to the next generation and ensuring sustainable development by providing environmentally conscious products andservices and taking the needs of the environment into consideration in our activities.

Input of main raw
materials

152 thousand tons

 onduct periodic environmental audits to verify the appropriateC
ness of management standards and improve environmental andsafety management to raise such standards.
❺ Training and education
Provide all employees with thorough environmental and safety
training and raise their environmental and safety awareness levels mainly by making environmental and safety policies known tothem, and strive to hand down the global environment to posterity
Established on October 1, 1998
Revised on July 1, 2005

Amount of withdrawal water

11.33 million m3

Products

Amount of industrial waste
disposed*5 of

12 thousand tons

Amount of PRTR substances
emitted to the environment*6

Recycling

28 tons

Amount of water discharged

Amount recycled*3

6.29 million m3

25 thousand tons

*1 Energy input: Amount of energy obtained by converting fuel used atfactories and other sites for manufacturing and electricity purchased
into crude oil.
*2 Amount of recycled goods received: Amount of recycled resources
received by Nittobo’s factories and other sites from other companies
as raw materials.
*3 Amount recycled: Portion of industrial waste generated at factories
and other sites, which is effectively used or recycled for reuse.
*4 CO2 emissions from business operations: Amount of carbon dioxide
emitted by consuming energy at factories and other sites for
manufacturing.
*5 Amount of industrial waste disposed of: Portion of industrial waste
generated at factories and other sites, which is not used effectively
and is simply incinerated, sent to landfill sites, or otherwise disposed of.
*6 Amount of PRTR substances emitted to the environment: Amount of
substances emitted to air and water by factories and other sites,
which are subject to the stipulations in the PRTR Act. (Act on
Confirmation, Etc. of Release Amounts of Specific Chemical
Substances in the Environment and Promotion of Improvements to
the Management Thereof)

Initiatives to Reduce CO2 Emissions
When the Nittobo Group formulated Big VISION 2030 and thetarget for fiscal 2030. The decision was based on discussions

Mid-Term Business Plan (FY2021–2023), we set a total CO2

undertaken by the Sustainability Committee. In addition, we haveemission reduction target of 8% (compared to fiscal 2013). Since

set the new target of achieving carbon neutrality by fiscal 2050,

then, we decided to raise the target to 30% in light of the subse-

and are implementing initiatives to contribute to decarbonization

quent COP26 and the Japanese government’s new reduction

throughout our supply chain.

Company-Wide Environmental Policy

Nittobo Group’s Value Creation

 im at improving the environment continuously and coexistingAwith the local community by striving to reduce environmental
impacts in a systematic way.
❷ Environmentally conscious corporate activities
Promote energy-saving, resource-saving, recycling-­oriented,
and environmentally conscious operations in all businessdomains in Japan and abroad.
❸ Compliance with environmental policy and voluntary management
Conform to laws and regulations in addition to other requirements and principles as well as stipulate v­ oluntary environmental policy and management standards and work towardachieving them.

❹ Periodic audits

Group

Recycled
goods amountreceived

44 thousand tons

❶ Environmental protection(thousands of tons)

400

e
wi
ul
t
at h law
ion
s
s

Cont
r
huma ibuti
nk on
en ind a t
vir
o

300

30% reduction in CO2 emissions(compared to FY2013 levels)• Promote thorough energy saving• Increase productivity through yield improvement• Introduce highly efficient combustion equipment• Install steam-saving and waste heat recovery equipment

244

CO₂
Emissions200(Scope 1 + 2)

Electrification and energy conversion• Switch from gas to electric furnaces• Conduct research and technical testing of CO2-free fuelssuch as hydrogen

100

Achieve carbon neutrality
0

We comply with environment
related laws and regulations
and regional agreements torealize zero environmental risk.

FOCUS
ON

Energy efficiency

2013

2030

2050 (Fiscal year)

Renewable energy• Introduce solar power generation systems• Switch to renewable energy

Foundation for Value Creationcan
pli regmCodan

We aim to achieve zero emission through emission control
and positive use of recycled
raw materials.

349

Strategies for Value Creationfn peo
m d sa ple’s
un fe
iti e
s

C
recyc onst
ling ru-o c
rifa
n o ociety
tio ed s
t
en

re of
utu obalfhe e glo t d th nt
n me
n

o
ng a
uri h
Sec ealt om
h lc
a
lo c

Ensure appropriate management of hazardous substancesand strive to reduce their discharge to the environment.

309 thousand tons
NittoboRawmaterials

Amount of recycledgoods received*2

Action Guidelines

We strive to control carbon
dioxide emissions by streamlining energy use.

CO2 emissions from business
operations (Scope 1 and 2)*4

173 thousand kiloliters

Guiding Principle

Scope of Data Collection
Domestic business sites: Data collected from April 2021 to March 2022
Overseas business sites: Data collected from January to December 2021

OUTPUT

Manufacturing
and processing

Introducing Renewable Energy

The Sustainability Committee has formed a task force to study the introduction ofrenewable energy sources in order to become carbon neutral by fiscal 2050. In fiscal

Data Section

2021, we installed a solar power generation system at the Naganuma Factory of ourwholly owned subsidiary, Paramount Glass Manufacturing Co., Ltd. The new system

Environmental Impacts of the Nittobo Group

is capable of generating 621 MWh of electricity per year, and all the energy generated is used at the factory. As a result, an annual reduction of 325 tons of CO2 emis-

The Nittobo Group consumes fuel and electric energy to manu-

environment without being collected, and industrial waste. The

sions is expected. This switchover also helps reduce energy costs. The Group will

facture a wide range of products with natural resources andNittobo Group is striving to reduce environmental impacts by

gradually install solar power systems at other factories to achieve its goal of reduc-chemical substances as raw materials. Major environmental

using resources in a reasonable way while taking the needs ofing CO2 emissions.

impacts include carbon dioxide generated as a result of energy

the environment into consideration.

consumption, chemical substances that are discharged to the44

Nittobo Group

Integrated Report 2022

Nittobo Group

Integrated Report 2022

45

SocialHarmonious Coexistence with Communities

Environmental Initiatives

Each of the Nittobo Group’s business sites seeks harmony with society and engages in various activities with the aim of growing

Development of New Environmentally Friendly Products

and developing together with its host community.

We will contribute to the reduction of environmental impacts through our business by making full use of the Nittobo Group’s technologicalcapabilities and product knowledge.

Community Beautification Activities

Environmentally Friendly Products: High-Performance Insulation
Paramount Glass Manufacturing Co., Ltd., a Nittobo Group com-increasing need for insulation with improved performance andpany, manufactures and sells glass wool insulation used ineven higher thermal insulation ratings have been established.

homes and other buildings. Insulation is a material that contrib-

To address this situation, we are pursuing high-performanceutes to energy saving by preventing outdoor heat and cold frominsulation materials. While maintaining the inherent fireproofing,flowing into rooms and by improving the effectiveness of indoor

high durability, and low CO2 emissions qualities found in the life

heating and cooling.

cycle assessment (LCA) of glass wool insulation, we have developed products with insulation performance superior to that of

To strengthen measures to prevent global warming, the Act

Omori River bank weeding

Support for Regional Vitalization and Sports

Beautification of the Kuroiwa area

Image courtesy of Fukushima United Football Club

other materials that will meet the newly established high thermal

The Nittobo Group’s business sites regularly participate in community

The Nittobo Group serves as an official club partner of Fukushima

Buildings (Building Energy Efficiency Act) was enacted in 2015.

insulation ratings. High-performance insulation materials canbeautification activities such as weeding and flower planting orga-

United Football Club, a J.League football team that is active around

Since then, revisions have been made to expand and add con-be expected to improve insulation performance by approximately

nized by the community.

the country with the aim of supporting the development and regional

tent. As of 2022, all new home construction must conform to the

30% compared to conventional glass wool insulation.

on the Improvement of Energy Consumption Performance ofvitalization of Fukushima through sports.

highest conventional insulation grade by 2025. Thus, there is an

Resource and Energy Saving Activities

Community Contribution

Nittobo Group’s Value Creation

Glass Fiber:
Energy Saving, CO2 Emissions Reduction
Improved strength and reduced weight

Introducing
New Technology

Reduction of CO2 emissions
through high strength andreduced weight• Introduction of recycled glass• Introduction of new materials

Glass Fiber:
Other Environmental Contributions
Contributing to renewable energy
Environmental benefits
from bioplastics

Functional compounds• Polymers• Nanocomposites

Core Technology

46

Nittobo Group

Integrated Report 2022

Rechargeable battery materials
Waste reduction and recycling• Waste-free glass products

Green pavement in front of the main gate

The Fukushima Prefecture 2050 Carbon Neutral Map was formulated

Once a month, the Fukuyama Enterprise Center provides traffic guid-by the prefecture to work together with local residents and businesses

ance to employees and nearby elementary school students on their

to conserve energy and resources. The Nittobo Group participated in

way to school. The area in front of the main gate is a pedestrian

the Fukushima Lights Down Challenge, an event to reduce usage

route for elementary and junior high school students, and green

during the summer season when demand for electricity increases,

pavement has been installed to contribute to the community.

by turning off lights whenever possible at its business sites inFukushima Prefecture. The program is designed to raise awarenessof the need to save energy and reduce greenhouse gas emissions byencouraging employees and households to turn off the lights.

Support for Education

Community Contribution

Insulation• Insulation • High-performancematerials
insulation materials

Illumination of the main gate of
Fukuyama Enterprise Center

Other Environmental Contributions
Specialty chemicals products• Flocculants• Coating agents

Product Lines

Potential variety
Solving environmental issues• Wastewater purification• Anti-fouling properties

Environmental Contributions

Serving diverse
needs with coretechnologies

Future Development and Concepts

On site environmental course(Fukushima Factory)

Children’s science class(Fukuyama Enterprise Center)

Data Section

Interface and weaving technology• Binder and interface technology• Modified cross-section fiber production technology• Ultra-thin manufacturing• Fiber opening technology

Removal of harmful
substances

Directing traffic in front of the main gate forelementary students on their way to school

Foundation for Value Creation

Glass composition• Low thermal expansion,high elasticity glass fiber• Environmental-friendly glass fiber• Low-dielectric glass fiber

Glass fiber product line
• High strength and high heat
resistant products• Bioplastic-compatible composite
materials• Glass wool
• Yarn products• Glass cloth for electronic materials• Components for renewable energy
power generation

Lights turned off at the NI-CoLabo Research & Development Headquarters andNittobo Medical Laboratory

Strategies for Value Creation

Energy saving• Power trains• Automobile interior materials• Automobile structuralcomponents• Aircraft interior materials• Aircraft structural components• Housing interiors• Veil screen, membranes• Communications • Memory• Servers• Various PCBs

In Koriyama City, Fukushima Prefecture, an illumination event is held

The Fukushima Factory holds on site environmental learning every year

during the year-end and New Year’s season to brighten up the city.

to increase interest in science and the environment among the children

Illuminations are not only a beautiful winter tradition, but also help

who will become tomorrow’s leaders. The Fukuyama Enterprise Centerto prevent crime, so the front gate of the Fukuyama Enterprise

has held children’s science classes since fiscal 2012. Other factories

Center is festively decorated with lights, making it a source of enjoy-

have hosted plant tours for students and other visitors as well.

ment for local residents.
Nittobo Group

Integrated Report 202247

SocialSocialSafety Initiatives

Compliance and Risk Management

Nittobo Group will comply with all laws and regulations and will establish safe and pleasant working environments based on the

The Nittobo Group places utmost priority on compliance with domestic and foreign laws, regulations, and social norms, as wellunderstanding that the safety and health of its employees is the foundation of its business operations.

as on appropriate management and prevention of risks surrounding its business.

Course of Action❶ Establishment of a Safe Workplace EnvironmentPerform a risk assessment to remove and decrease hazardous and harmful factors and invest in necessary management resources to maintain and improve our safe and healthy
working environment.

❷ Promote Health Maintenance roactively assist in the maintenance and promotion of thePhealth of our employees both mentally and physically by
establishing a pleasant workplace in which they freely andwillingly exchange opinions, and prevent harassment orexcessive workload at the workplace.

❸ Compliance and Management of Labor Policy

 omply with laws, regulations and other standards regardingCsafety and health and to set our own environmental policies
and management standards.

❹ Implementation of Periodic Inspection

 eek to examine and improve safety and health control
S­systems and to enhance such control standards through theimplementation of periodic safety and health inspections.

❺ Education/Enlightenment

 reate safe and healthy working environments across ourCorganization by thoroughly providing all of our employees withsafety and health education and to understand safety andhealth guidelines.
Established on July 1, 2017

Compliance System
System for Ensuring that the Execution of Duties of the Group’s Officers
and Employees is in Compliance with Laws, Regulations and the Articles
of Incorporation• The Representative and Chief Executive Officer sets an example andensures that the Group’s officers and employees are aware of theGroup’s Corporate Philosophy, Nittobo Declaration which espouses
shared values, and Nittobo Behavior Program and Code of Conduct, bothof which provide a set of action guidelines, and also endeavors to makethem known to all officers and employees in the Group.
• Executive Officers and employees foster a healthy corporate culture that
forms the basis for compliance by spreading and implementing the
Nittobo Declaration.
• Executive Officers and employees comply with laws, regulations, the articles of incorporation and internal rules, etc., based on the Nittobo
Behavior Program and Code of Conduct, and the departments responsible for compliance strive to raise awareness of compliance to increase
their effectiveness.
• Violations of laws and regulations are prevented, quickly discovered andappropriately addressed through a Corporate Ethics Help Line, which is awhistleblowing program with an internal and external contact points.
 he officer in charge of the Risk Management Department periodically•Treviews the state of establishment of the Nittobo Group’s internal control
system to ensure the current conditions are consistent with the Group’s
basic policy. The results of the review are reported to the Representativeand Chief Executive Officer, who reports to the Board of Directors, which
passes resolutions if any revisions to the basic policy are required.
•T he Audit Committee reports the results of operational audits and compliance audits, etc., to the Board of Directors as appropriate.
Other Systems for Ensuring Appropriate Operations by the Nittobo Group he Nittobo Declaration, the Nittobo Behavior Program, the Code of•T
Conduct and the Corporate Ethics Help Line apply to the entire Group,and efforts are made to raise awareness of these.
•A uditing offices are established in major subsidiaries to ensure appropriate operations, and the Company’s Audit Office also conducts internal
audits with a view to the entire Nittobo Group.

Examples of Safety Initiatives
committees at each business site conduct activities to promote

The Nittobo Group manages risks to mitigate the potential impact

legal compliance and to create safe and pleasant working envi-

of disasters, accidents and other events. To ensure the safety

ronments. BCP training attended by Officers and earthquake andand health of employees is the basis of business management,

fire response drills are also conducted on a regular basis.

Basic Policy on Responding to Major Disasters●❶ Prioritize the safety and wellbeing of employees and their families.
 here possible, continue to conduct critical business operations, such as supplying●❷W ppropriately manage the risk of business disruption and minimize the impact on●❸A

The Nittobo Group has established a whistleblowing program,the Corporate Ethics Helpline, to prevent and detect violations oflaws and regulations at an early stage and to take appropriate
corrective actions.
This provides a secure point of contact for reporting and consulting on potential problems such as violations of laws and regulations, violations of Company rules, misconduct at work thatcannot be resolved within the workplace, or matters where it isimpractical to consult with superiors, colleagues, or others in
the workplace.
The reporting and consultation office is available not only
within the Company but also externally through an outside law

firm, which allows for anonymous reporting and consultation.
Whistleblower privacy and confidentiality is securely protected,
and measures are taken to prevent disadvantageous treatment
as a result of making a report.
The Audit Committee also ensures independence from theexecutive side by handling reports and consultations that may
involve directors and officers under the committee’s supervision.
We are committed to making a system in which whistleblowers
can use the system with greater peace of mind by, for example,
responding to reports and consultations in good faith, confirming the facts and taking corrective measures, and reporting theresults of the investigation to the whistleblower.

Strategies for Value Creation

useful products, technologies and services. If business operations are halted, aim torestart as soon as possible.

Internal Whistleblowing Contact
Nittobo Group’s Value Creation

Response to Major Disasters

business management.

 ooperate with local residents and surrounding local governments as a good corpo●❹C

Risk Management

rate citizen.

●❺ Regularly update BCPs and conduct drills to verify effectiveness (annually).
BCP training drill

To create a safer and more secure workplace, the Nittobo Group is implementing initiatives such as safety and health inspections and firerisk assessments at every business site, as well as making information on safety activities and disaster examples available within the Group.
Major Initiatives for FY2021
Description

Workplace Safety and
Health Assessment

Business divisions and headquarters departments conduct objective evaluations of health and safety activities in terms of condition,
behavior, and awareness. By working to improve the indicated items, the business sites are taking steps to standardize and improvesafety management across the Group.

Business Site Fire Risk
Assessment

We are working to prevent fires by assessing fire risks from a third-party perspective and receiving advice on risk reduction fromthe perspective of management systems and facilities through evaluation by outside experts, issue identification, and making
improvements.

Groupwide Information
Dissemination

We share the results of health and safety assessments and fire risk assessments, good examples of health and safety activities,
and reports on disaster countermeasures in a standard Groupwide format, to reflect the experience and knowledge of the Group in
the activities of each business site.

Information Management and Security
The Nittobo Group discloses information on its business activities in a timely and appropriate manner to enhance corporatetransparency and properly manage the information it holds.
Information Management
The Nittobo Group has established rules for the management oftrade secrets, document management, personal information handling, and information system management in order to appropriately
Information Management
Education

manage information held by the Group, and manages such information after specifying management methods and managers.
Information Security
As information networking advances, the danger of information leaking
outside the Company and the threat of cyber-attacks is also increasing.
The Nittobo Group is continuously strengthening preventive measuresagainst potential risks, along with countermeasures against viruses,
etc., with Head of IT and in charge of information security.

Data Section

Initiative

such risks from occurring. Furthermore, the Company is also
striving to strengthen its legal risk management system by putting in place a system that enables it to receive various kinds of
guidance as the occasion demands, such as opinions and advice
from corporate attorneys and specialized lawyers regarding corporate management and daily operations.

Foundation for Value Creation

Safety and Health

The Company has established the Nittobo Group’s basic risk
management policy and system in the Rules for Risk Management
as a corporate group including subsidiaries. Based on the basic
policy and system, the Risk Management Committee chaired by
the Representative and Chief Executive Officer appropriately
manages various risks surrounding our business and prevents❶● Appropriate management of information held by the Company in accordance with the provisions of various regulations(annual self-inspection and monitoring, implementation of workplace education)❷● In addition to training at the time of hiring, special training is provided at the time law and similar provisions come into effect,
and the intranet is used to ensure timely and appropriate internal awareness of the law❸● Provide education on information security❹● Conduct unannounced, targeted e-mail drills for all employees, including officers
48

Nittobo Group

Integrated Report 2022

Nittobo Group

Integrated Report 2022

49

SocialActive Roles of Diverse Talent

To ensure the Nittobo Group remains the “Best Partner” for all stakeholders and continues to contribute to the creation of prosperous communities, we believe it is important to value and harness the capabilities, thinking, and views of every employee in

Human Resource Development

the Group. In line with that thinking, the whole Nittobo Group strives to create an environment and organizational culture that is

To utilize the maximum potential of the Company’s diverse

work to cultivate the next generation of leaders, global human

motivating for all employees based on respect for different people, regardless of gender, age, SOGI*, nationality, disability andhuman resources, we have been carefully implementing humanresources, and professional human resources. We will actively

other individual identities.

resource management tailored to each individual, including

work to expand management measures to promote individual

measures such as continuously improving both the personnel

motivation, self-driven learning, and career development underactively identify and resolve any issues through direct dialogue with frontline sites and employee awareness surveys. Targets for

system to increase individual motivation and the training system

the theme of fostering human resources for innovation, which is

improving employee engagement are one of the outcomes to be measured by the Mid-Term Business Plan.

to foster growth. In our vision for 2030, Big VISION 2030, we will

the foundation for creating business growth and driving reform.

Using the Nittobo Declaration as the basic policy, management and the Human Resources Department work together to*SOGI: Sexual Orientation and Gender Identity

Training by job rank

Newcomer training for new graduates❷ Initiatives to Support Balancing Childcare and Nursing Care
It’s important to create an environment where employees canof daycare waiting lists. We have also introduced a flexible work-overcome the difficulty of balancing work with childcare anding system for childcare, which can be combined with the shorter

nursing care, and continue to demonstrate their abilities. We areworking hours system.

diverse human resources.
Specifically, we have a childbirth leave system, childcare leave

Most recently in July 2021, we introduced a system that allows
employees to take up to two weeks as paid leave of absence
after concluding childcare leave, and a system that allows

system, shorter working hours system, and nursing care leave

employees to take up to two separate leaves of absence. Thesesystems. All applicable female employees take maternity leave

efforts resulted in a 27.7-point increase in the rate of maleand childcare leave, and many male employees can take advan-

employees taking paternity leave in fiscal 2021 compared to thetage of the paternity leave system when their spouse gives birth.

previous year. We will continue to enhance the system and fur-

In addition, for employees working in the Tokyo metropolitan

ther encourage male employees to take advantage of it.

❶ Development of the Next Generation of Leaders
Conventional stratified training for personnel is provided for new

intensive training for business skills and action learning using

graduate entrants, young employees and newly promoted man-practical cases we need to resolve. Through the training, theseagement personnel through to department and division manag-

programs develop understanding about the role of senior man-ers. To complement this standard training, Nittobo launched its

agers and improve managerial qualifications. In today’s unprec-

Successor Development Programs in fiscal 2018. These pro-

edented business environment, developing business persons whograms are designed to match the growth stage of each employee,

can overcome preconditions is an indispensable activity. We believe

focusing on young employees and middle-rank employees, init leads to an essential pillar for business strategies. Nittobo willorder to develop future leaders. These programs consist of

systematically develop the leaders who drive our businesses.

❸ Employment of People with Disabilities

To prepare for further globalization of the Company’s business,to be, such as providing opportunities and systems for employees

it is essential that Nittobo develops human resources and cre-

to engage in online English classes, and also to travel overseas

It is becoming increasingly important for companies to employ

safe working environments at our plants. In 2018, we estab-ates a corporate culture that enables diverse human resources

to study foreign languages, participate in internships, take MBA

people with disabilities. The Company has already met the legallylished a work support office at our Tokyo Headquarters, and weto fulfill their potential. We are enhancing mechanisms that sup-courses, and work at research institutes.

required employment rate of 2.3%. As part of our efforts toare promoting stable employment under the supervision andport the voluntary efforts of individuals to become who they want

employ more people with disabilities, we are striving to create

support of permanent employees.

❸ Development of Professional Talent
Before becoming managers, Nittobo employees pursue develop-

solving problems facing customers and link this training to

A declining working population is a major social issue in Japan,

on enhancing HR programs and benefits, and developing ament as specialized professionals in their areas of specialization

improvement of professional skills that enable these employees

which has a declining birthrate and aging population, and com-working environment to enable employees to continue working

and work to establish their core skills. We introduced the Meisterto further enhance customer satisfaction. We also provide

petition to secure human resources is likely to become increas-

with high levels of motivation after the age of 60. We will also

Program in fiscal 2018 at manufacturing sites and are systemat-

wide-ranging support for individual skills development, offering

ingly intense. Against that backdrop, we will enhance programs

implement initiatives to make Nittobo a company that employees

ically promoting skills transfer. For sales representatives anda program to assist employees in obtaining public qualifications

and mechanisms that encourage employees to pursue careers

will be glad they chose throughout the entirety of their careers.

diagnostics medical representatives (DMRs), who have frequent

necessary for work and a distance learning assistance program

contact with customers, we provide solutions-based training inthat includes e-learning.

at Nittobo for as long as possible. We are focusing particularly

Nittobo Group

Integrated Report 2022

Nittobo Group

Integrated Report 2022

Data Section❹ Work After the Age of 60

Foundation for Value Creation❷ Development of Global Talentarea, we offer the use of a nanny service to counter the problem

50

Joining the Company

Strategies for Value Creation

working on support for balancing childcare and nursing care of

Nittobo Group’s Value Creation

Initial training (1st–3rd years)

Self-development support (correspondence courses)

training and promoting the next generation of executives.

The ratio of female in manager positions in the Company isInterviews at age 30

Manufacturing Meister Program

employees, regardless of gender. We are addressing this matter.

Leader development
external training withother companies

Common practical skills development

We have set a target of 10% for the future, and are systematically

Genba (production
frontline) leader training

Training
female candidates for
management
positions

Specialized skills development

gradually increasing and stood at 4.9% at the end of fiscal 2021.

women play active roles is an important issue for the growth ofYoung
employees

Maintaining and promoting a workplace environment in which

Future Leaders
Development:
Primary

Sales training❶ Initiatives for Women’s Advancement

Management prepromotion training

DX training

sity and inclusion.

Newly promoted manager training

Diversity
awareness
activities(lectures)

Selfdevelopment

Specialized training
Compliancefor such a diverse organization is to respect and promote diver-growth, and each member of our diverse workforce is a valuable

Future Leaders
Development:
Advanced

Diversity

Language training (online English conversation, TOEIC)

are the driving force that supports the Nittobo Group’s sustained

Coaching

Dispatch to overseas research institutions

strate his or her capabilities. One way of laying the foundation

Appraiser/labor management training

GlobalOverseas trainee systemneeds and delivering peace of mind and confidence. Employees

Promotion of management andleadership skills growth

accepting of diversity in which each individual can fully demon-

Development of professional talent

asset. Nittobo considers it important to create an organization

sonalities can lead to success in meeting diverse customer

Middle-rank employees

Discussion by employees with different perspectives and per-Managers

Diversity and Inclusion

Selective training

51

Active Roles of Diverse Talent❹ Expansion of Management Measures to Foster Human Resource Growth
Training courses are important for any human resources devel-

which includes supervisors, management, and the Humanopment policy, but it is also important to encourage individuals

Resources Department. The new committee will discuss future

to be motivated to learn, to carefully consider their career aspi-

training measures and career development for employees. We

rations, and to implement development measures that match

have also instituted interviews with employees at age 30, after

their ideas and expectations. Therefore, we have systematicallythey have experienced a range of work tasks, to reflect on theirimplemented one-on-one meetings between superiors and sub-careers and discuss future career development. In addition, we

ordinates as an important communication tool. In addition, weare also in the process of expanding our management training

are implementing management measures to promote growth,for employees who will be responsible for these activities.

such as the creation of the Career Development Committee,

This committee deliberates on how to

Putting the right people in the right places

match the needs of the organization withthe unique skills and future career
aspirations of each individual by utilizing

Individual

self-assessments and the age 30
interviews. It also considers future
and allocations.

average. To enable employees to experience job satisfaction andWith work practices in general expected to undergo far-reachingdemonstrate their best performance, while simultaneously

changes, we are continuing to embed and improve new work

maintaining an appropriate work-life balance, we will continue

practices that achieve both a high-quality work-life balance andto develop an environment in which people pursue long careers.

significant improvements in productivity, including our recently-

Also, in Japan, which has a declining birthrate and aging popu-

launched project to improve the productivity of internal depart-lation, it is important to prepare a worker-friendly environment

ments (NICO-WORK Project). We are also revising regulations

for employees with childcare or nursing care responsibilities. We

and systems, employing robotization, utilizing workflow

are enhancing programs that allow employees to respond flexibly

systems, and shifting to paperless methods that don’t require

to those kinds of life events, such as an annual paid leave systemhanko seals.

Organization

Then, they reflect on the relationshipbetween their career goals andOvertime hours (monthly average)

Understandingorganizational needs

Self-assessment andinterview at age 30

Technology and human resources map,
definition of necessary skills, business needs

20

Manufacturers average about 15 hours,
but Nittobo’s five-year average is just 7 hours.

15

1-3 years of
training foryoung employees

3rd year
Departmental
OJT/specialized
education

Proficient, proDepartmental
fessional human
OJT/specialized
resources
educationAge 30Age 35   Key position

Development plan A

Careergoal A

Development plan B

Careergoal B

Interim interview (annual)
Performance evaluation interview (annual)

6.8

FY17

FY18

8.2

7.6
5.7

5

0

FY19

FY20

FY21

❷ Health management
Health in mind and body is the cornerstone of employee job

of-charge use of a sports gym, health checkups administered bysatisfaction. In cooperation with the Nittobo Health Insurance

post, and support for family enjoyment of recreation. We have also

Association, we strive to promote employee health by providing

taken out comprehensive medical expense insurance to alleviate

opportunities for physical and mental refreshment, such as free-the expense burden on employees when injury or sickness occurs.

Foundation for Value Creation

One-on-one meeting (monthly)

Subordinate

Interview for setting individual goals (annual)

6.6

Strategies for Value Creation

development plan based on the direction

Self-awareness andcareer-conscious reflection

Join Nittobo

Entry training

are asked to identify their career goals.

Supervisor

the COVID-19 pandemic, a work-from-home system is in place.

10

had a full range of work experience, they

Measures tostrengthencommunication

and a flextime system that eliminates core hours. Also, amid

was 7.6 hours, much lower than the manufacturing industry

Nittobo Group’s Value Creation

At the age of 30, when an employee has

they intend to pursue.

Average monthly overtime per employee at Nittobo in fiscal 2021

(Hours)human resource development plans

Interviewat age 30❶ Promotion of Work-Life Balance

Human Resource Development Committee

Interview

Human
Resource
Development
Committee

Workstyle Reform and Health Management

MESSAGEAt training

From an Employee who Utilized
the Childcare Leave System

Glass Fiber Division, Production Headquarters,
Fukushima Factory, Electronic Materials Manufacturing Dept.,
DX Technology Section and Technology Div., Technology Dept.

Keita Okazaki

I utilized the childcare leave system for six months from June to November 2021. I utilized
the leave system because I believed in the importance of sharing childcare and housework

Data Section

during the day to reduce the burden on my wife and allow her to be present for the growthof our child. Taking the leave allowed me to realize the hardships and difficulties my wife
was having, to witness the various firsts of my child… those days were greatly fulfilling.
I am deeply grateful that I was able to use the extended childcare leave system because
my supervisor and colleagues willingly supported me and followed up with me before, during
and after my leave. I hope that my experience will set a precedent and, if only in a small way,
help encourage my fellow male employees who are hesitating to take childcare leave.
Financial analysis training for third-year employees

52

Nittobo Group

Integrated Report 2022

In-house workshops

Nittobo Group

Integrated Report 2022

53

Governance

External Directors’ Roundtable Discussion

As chair of the Nomination Committee,

Agasa Naito

Sadayoshi Fujishige

Hiroshi Kagechika

Yasuharu Nakajima

Director

Director

Director

Director

you both mentioned are not just a placestrengthen the development technolo-

I am also involved in the Company’s

to explain agenda items, but also play agies related to process. In fiscal 2022, thesuccession planning, and I see that wevery important role as a forum for infor-

second year of the Mid-Term Businessare making steady progress.

mal exchange of opinions, such as bring-Plan, we are working to strengthen the

Kagechika The Board of Directors’

ing awareness to issues or concerns.

process development system at the

pre-briefing is very rich in content, andNakajima I have experience as a CPA

Research & Development Headquarters

the executive side provides very sincere

and now that I have been appointed asby consolidating some of the develop-

and detailed explanations. I believe thischair of the Audit Committee, I’m look-ment functions at the factories into thecreates a very conducive environment

ing forward to managing it well.

R&D center, and we expect to see posi-

for discussion.
Of the external directors, I am the only

the Research & Development

member with a technical background.

and then we will proceed with the audit

Headquarters can now take the lead in

Since I have experience in the R&D

while making various judgments our-addressing pressing issues such as

department, especially in the materials

selves. Specifically, we will focus on

improving yields and increasing cus-

industry, I am able to offer my opinions

whether the organization has good risk

tomer satisfaction with the quality ofas appropriate on the state of R&D for

management, and since on-site audits

next-generation products.

companies, like Nittobo, that makeare also conducted remotely, especiallymaterials. I took office in 2020 when theoverseas with the COVID-19 pandemic,of the Research & Development

current Mid-Term Business Plan was

we will focus our supervision on internal

Headquarters how it has started tobeing considered and had some input.

controls in place.

experiment with original ideas andopment system and organizational strucHeadquarters. In April 2020, a newresearch site, NI-CoLabo, was completed at the Research & Developmentin which 20% of each staff member’s
capacity is being allocated for this purpose. We are especially trying to provide
young people with opportunities for trial

Headquarters, and we proposed that theFujishige In terms of progress on theand error and an environment in which

corporate laboratory function be prop-

Mid-Term Business Plan, we have met

they can demonstrate new technologicalerly positioned within the Research &our targets for the first year and are

ideas without fear of error. I hope that

Development Headquarters, and that adoing well in a market environment that

this 20% rule will be the catalyst for this.

research unit for the Glass Fiberhas fluctuated greatly due to the COVID-

Naito Of the four pillars of the Mid-TermBusiness and a research unit for the

19 pandemic. Now, we are aiming toBusiness Plan, I am focusing on human

medical business be created and staffed

improve on the following two points.

resource development. We have a feeling

The first is that we have a very strongthat in the future, organizations that have

Research & Development Headquarters.

ability to develop advanced technologies,

not made progress in diversity and inclu-

We have been discussing President

but this is an ever-evolving world. New

sion will not be able to recruit talented

Tsuji’s thoughts in an attempt to reflect

technologies are being developed one

people. The ratio of females in manage-

them in the Mid-Term Business Plan.

after another. We need to have a muchment position at the end of fiscal 2021

Naito As Mr. Fujishige mentioned, I thinkstronger sense of touch with the cutting

was 4.9%, less than 5%, still short of the

our Board of Directors has a well-edge, and moreover, we need to be pro-goal of 10% by 2030. Of course, our goalbalanced composition in terms of gover-active in collaborating with otheris not only to increase the ratio of female

nance. Of the seven directors, four are

research institutions.

managers, but also to create an organi-as a division laboratory under the

The second is to become highly

to fulfill the function of supervising

hope to play a role in overseeing theindependent external directors, including

the Company from the shareholders’priorities and direction of the Company’s

experts in management, research andmarket-sensitive. Traditionally, suppliers

can play an active role in their own right,

perspective. The Board also leverages

medium- to long-term management

development, accounting, and law, so

have been the main source of market

which we believe will lead to innovation

the respective areas of expertise eachstrategies, primarily. I have experiencethat there are gatekeepers on both theinformation, but from now on, we must

and attract talented people. By doing so,

external director brings to the table.

managing a general consumer goods

offensive and defensive sides of corporatecollect a wider range of information with

employee engagement will naturallycompany, so I think I have more infor-

management. Even with a diverse com-

greater sensitivity. I am willing to actively

increase. This won’t move forward over-mation from the perspective of under-

position, it still must actually function,

support these two goals.

night, but we intend to follow it carefully.

discussion based on the meeting’s

standing customer needs and thebut I feel that opinions are freely andKagechika In a manufacturing company

Nakajima Since the Mid-Term Businessis composed of three internal directors

agenda is held to enhance the actual

direction in which trends in the world

openly expressed at Board meetings, andsuch as ours, manufacturing technology

Plan was formulated, very significant

and four external directors. This makes

functioning of the Board of Directors.

are heading.

I think that the pre-briefing sessions thatremains fundamental. We must further

changes have taken place. One is the

Nittobo Group

Integrated Report 2022

Prior to Board of Directors meetings,

zation in which diverse human resources

Nittobo Group

Integrated Report 2022

Data Section

Fujishige Nittobo’s Board of Directors

being worked on, under the “20% rule,”

Foundation for Value Creation

an advance briefing with a very lively

thoughts, apart from themes already

Strategies for Value Creation

54

Please discuss your evaluation of our corporate
governance and the topics
and areas in which experience and skills aredemonstrated.

From a management perspective, I

How would you evaluate
the progress in the firstyear of the Mid-TermBusiness Plan?

I recently discussed with the President

Nittobo Group’s Value Creationture of the Research & Development

it fair and impartial, allowing the Board

tive results in the future. For example,

way the Audit Office conducts the audit,

Specifically, it is the research and devel-

The Nittobo Group’s unique innovation lies in
the power of its human resources, who havecreated evolving innovation from continuous
management resources.

First, we will listen carefully to the55External Directors’ Roundtable Discussion

COVID-19 pandemic and the other is the

Fujishige Becoming a global niche No. 1

where this is properly recognized.

trend towards decarbonization. Both the

When new graduates join the Company

company is a very important theme, andprinciples of corporate behavior and theas researchers, in order to develop themit means always having a perspective on

direction of development must change

into full-fledged professionals in a cer-

how to be No. 1 in the world. To this end,

in response to these changes. This is atain technical field at an early stage,

we will send people with a mindset of

costly issue, and further structural

they need to recognize how much theychange and young people to train in thereform may be necessary depending on

have improved as technicians throughworld market. I think it is very importantchanges in the world. We will look at how

discussions with customers, activities at

to screen people who will survive andto respond to changes in the world fromexternal academic conferences, interac-thrive in a tough environment, because

a financial and accounting standpoint.

tions with external researchers, andpeople cannot grow in an easy environ-presentations of their own achievements.

ment. Again, it is important to switch to

We should make sure to create sucha highly market-sensitive structure.

opportunities and develop individual

Kagechika The goals of Big VISION 2030

How should we foster
human resources forinnovation?

communication skills from time to time.
Furthermore, as the mission of theare high, including decarbonization, andintroduction of the Customer Successare not easily met by extending current

time goes on. In other words, the key

uous, but the markets and products canFujishige This is very simple: encourageorganization, the executives must focus

Task Force, a mechanism to sharetechnologies. Basically, the problem

point is how to develop professional

be varied, which is efficient diversifica-

young people to make the most of their

their wisdom, accurately set themes, andcustomer needs and product ideas more

solving is technology-driven, but sincehuman resources and global humantion.

abilities. We will consider financial

draw out the abilities of the researchers

efficiently and to link marketing, productthe technological development capability

resources who can stay abreast of the

Kagechika That’s exactly right.

allowances, treatment, and opportunities

who are working hard there. If eachplanning, and product development tomust also achieve one or two levels of

most advanced niche in the world.

Historically, glass fiber was created by

to do the kind of inspired things thatyoung researcher can develop his or her

strengthen customer solution capabilities.

innovation, it is necessary to review thethey want to do. Or, as Ms. Naito men-career and grow in the process of work-

In this volatile business environment,tioned, it is essential to nurture the seeds

ing on a theme, the output of thethe key to success is how many custom-of new innovation through serendipity,

Research & Development Headquarters

or so-called chance encounters, by
combining diverse human resources.

Sustainability management is anotherapplying basic fiber technology, and has
also grown business significantly by dis-

We have advanced technologies andestablished a Sustainability Committee

covering new materials for medicalers we can attract who love Nittobo

human resources that have been accu-

to focus on environmental issues, but

testing. Core technologies are indeed

will increase and become more active.

products. In order to draw out the fullmulated in Group companies over oursustainability management issues andconnected, but they are evolving in each

Naito I agree with both of you about how

potential of our human resources, it islong history, so now is the time toenvironmental challenges tend toparticular instance and moment. In

Since there is no right answer to innova-

to develop human resources. However,essential that we work together organi-strengthen the system in which the

become an end in themselves if weother words, it depends on our ability totion, I think it is important to have thethe significance of the human resourcescally, flexibly responding to each situation

entire Group works together for devel-

make them a specific goal. The question

continue to grow and find new businesscourage to try anyway and take up thethat you invest in developing will be

as needed with the appropriate team,

opment. This will come up in discussions

is how to incorporate them in conjunc-

and opportunities while nurturing ourgood things in the process. And we must

reduced by half if they do not function

without putting up barriers.

for the next mid-term business plan, buttion with medium- and long-term cor-core technologies.

firmly support those who are predis-

effectively. We believe that it is extremely

Nakajima When someone who has the

I would like to focus on how to consolidate

porate value and how to appeal toposed to change. Such a management

important for the human resources

courage to bring about change joins an

and increase the power of the technicalmultiple stakeholders.

mindset is necessary.

developed in each department to be ableorganization, I believe it is up to thehuman resources dispersed throughout

I believe that we must backcast fromprofits levels that are expected to be

Kagechika I believe that we must be sure

to work effectively in our organization,organization to make the most of that

the Group, including governance.

where we want the Company to be andreached when the current businessto create an environment that nurtures

and we believe that good communication

person. My point is that I wonder if there

Naito The niche is constantly changing

constantly look back to where we arebase has grown much larger. The mar-our human resources. The key there is

between departments is essential.

is a way to incorporate transformationaland becoming more sophisticated astoday, periodically reviewing our goals

ket environment has changed dramati-

good pride, that is, confidence in one's

I understand and am very excitedhuman resources into the organizationand striving to substantially improve ourcally and the hurdles are certainly

skills and sense of mission. There areabout the fact that this point was also

as a team force.

corporate value, while also making

getting higher, so we think it would be

expectations for each position and therecognized in the discussion of the Mid-efforts to showcase this to the world.

best if Big VISION 2030 includes a sce-

Company should provide an environment

Term Business Plan and led to theand communication, once a team or

Nakajima “Global niche No. 1” is anario in which new businesses are cre-organization makes the most of humanphrase that fits the Company perfectly,

ated and grown.

resources with courage, they will be

and we understand that we are truly a

Naito There is a continuum in what thedrawn to it and bring in more human

company that competes in a niche mar-Company is working on and in its tech-resources with courage. When change

ket in the form of No. 1 in quality. I believe

nology, but when it has found new mar-starts, it is positive in many ways, butthat growth is a steady accumulation, so

kets, it has transformed itself. There iswhen it starts to turn the other way, theI agree with the global niche, but the key

no easy answer to how to find new areas

good people quit. The first step is to get

point is to find ways to realize Big VISION

for future major expansion, and I believe

the rotation going in the forward direction.

2030 in our continuous daily activities.

it is partly luck.

Data Section

Integrated Report 2022

Foundation for Value Creation

Nittobo Group

Fujishige In our case, our core man-

My impression is that the goals of Big
VISION 2030 look like the sales andStrategies for Value Creation

As you all said, by improving openness

Nittobo Group’s Value Creation

globally important key term. We have

What kind of efforts
should be made in the
future to realize Big
VISION 2030?
56

theme from the beginning.

We can’t find them if we don't move,agement resources, such as glass fiber

so we expect that by making efforts inand in vitro diagnostic reagents, areboth directions, such as communicating

continuous, but our target market isthat this kind of technology exists or

evolving. In business diversification, theasking customers about it, we cancore management resources are contin-

expand into these unexpected areas.

Nittobo Group

Integrated Report 2022

57

GovernanceCorporate Governance

The Nittobo Group constantly revises corporate governance with the aim of creating a fair and highly transparent management

Nomination, Remuneration and Audit Committeesorganization in order to conduct business activities with emphasis on social trust from our shareholders, investors andAs a company with Nomination Committee, etc., the Company has established a Nomination Committee, a Remuneration Committee, andother stakeholders.

an Audit Committee. The roles of the committees and overviews of the members of the committees as of the date of the publication ofthis report are as follows.

Overview of the Corporate Governance System and Reasons for Employing the System
The Company introduced an executive officer system in June 2003

Nomination Committee, etc. By doing so, the Company further

and has created a system able to maximize the effect of consoli-

clarified the separation of supervision from execution and aims

dated management by invigorating the Board of Directors andto strengthen supervisory functions, ensure highly transparent

speeding up decision making. Since June 2008, management

management, execute business swiftly, and increase the flexibility

has been conducted by further clarifying the functions and rolesof management. Furthermore, by establishing a system thatof management and business execution.

enables it to more precisely meet the expectations of stakeholders,

In addition, with the approval of the Ordinary General Meeting of
Shareholders on June 26, 2014, Nittobo shifted to a company withsuch as customers, shareholders, suppliers, and employees, theCompany will work to further enhance its corporate value.

Corporate Governance System
Board of Directors
Remuneration and Audit Committees; election and dismissal ofwith directors from within the Company with capabilities andExecutive Officers and delegation of business to them; approval

knowledge on each business and management in general, and atof matters related to operations that have an impact on basic

least the same number of External Directors as internal directors,

management policy such as mid-term business plans and annual

who are able to express opinions beneficial for the enhancement

budgets; and approval of matters that could have a significantof governance from the perspectives of diverse stakeholders andimpact on Group management such as investments exceeding asociety, in order to ensure a system enabling appropriate super-certain amount. The term of office of directors is one year, and avision of the Company’s business execution by the Board ofvote of confidence in directors is obtained in the Ordinary

Directors as a whole, and has specified that the Board of Directors

General Meeting of Shareholders held annually. The Company’s

shall have no more than 12 members in its Articles of Incorporation.

Executive Officers are determined by the Board of Directors.

The Nomination Committee determines

The Remuneration Committee deter-

reports. Working with accounting audi-

the content of proposals to elect andmines the content of individual remu-

tors and the Audit Office, audits, etc.,

dismiss directors to be submitted to theneration, etc., of Directors and Executive

are conducted based on audit plans

General Meeting of Shareholders. It is

Officers. It is made up of five Directors

approved in the Audit Committee. It is

made up of five directors (four of whom(four of whom are External Directors),made up of five Directors (four of whom

are External Directors), and is chaired byand is chaired by External Director Hiroshi

are External Directors), and is chaired

External Director Sadayoshi Fujishige.

Kagechika. Meetings of the Remuneration

by External Director Yasuharu Nakajima.

Meetings of the Nomination Committee

Committee are held as needed.

An Audit Committee Secretariat has
been established as an organization forare held as needed. The Nomination
Committee selects the Company’s

Audit Committee

assisting the duties of the Audit

director candidates who are believed to

The Audit Committee’s responsibilities

Committee. In principle, the Audit

be the most suitable based on factors

include auditing the state of execution ofCommittee holds meetings at least oncesuch as their character and insight.

duties of Directors and Executive

every three months.

Execution of Business
As of the date of the publication of this report, the Company has 11 Executive Officers, of which one has been selected as Representativeand Chief Executive Officer. An Executive Meeting has been established as an organ to deliberate matters related to the execution of business delegated by the Board of Directors, and it endeavors to ensure efficient business execution by holding meetings twice a month.
Composition of Board of Directors and Three Committees

Board of Directors

Nomination Committee

Remuneration Committee(Chair: External Director)

Audit Committee(Chair: External Director)(Chair: External Director)

People suitable for the execution of the Company’s business areof Directors was made up of seven members including fourelected from the perspective of enhancement of business execu-

External Directors.

tion and corporate value by adopting the approach of putting the

The Board of Directors is responsible for supervision of business

Officers, and the preparation of audit

right people in the right place.

4 External Directors(1 woman)

3 Internal
Directors

4 External Directors(1 woman)

1 Internal
Director

4 External Directors(1 woman)

1 Internal
Director

4 External Directors(1 woman)Strategies for Value Creation

At the time of publication of this report, the Company’s Board

Remuneration Committee

Nittobo Group’s Value Creation

The Company’s basic policy is to constitute the Board of Directors

Nomination Committee

1 Internal
Director

execution through selection of directors making up the Nomination,
Diagram of Corporate Governance System
General Meeting of Shareholders
Election and dismissal

Nomination Committee
Remuneration Committee
Reporting and coordination

Audit Committee

Risk Management
Committee

Data Section

ReportingExecution Functions

Reporting and coordination

Representative and Chief Executive Officer

Reporting andcoordination

Audit Committee Secretariat

Election,
dismissal andsupervision

Board of Directors

Election,
dismissal andsupervision

Supervision Functions

Auditing corporation
Accounting auditor

Foundation for Value Creation

Election and dismissal

Sustainability
Committee

Internal Auditing Office

Auditing

Executive Officer
Glass Fiber Division
Glass Fiber
Yarn Business

Glass Fiber
Cloth Business

Medical Division
Glass Fiber for Industrial
Materials Business

Beveragebusiness

Life Science Business

Yarn and Textile
Division
Textile BusinessCorporate
Business Planning
Department

Research &Development
Headquarters(NI-CoLabo)First row, from left: Agasa Naito, Sadayoshi Fujishige, Hiroshi Kagechika, Yasuharu Nakajima
Second row, from left: Toyoshi Nishizaka, Yuichi Tsuji, Kazuhiko Igarashi

58

Nittobo Group

Integrated Report 2022

Nittobo Group

Integrated Report 2022

59

Corporate GovernanceSelf-evaluation Concerning the Effectiveness of the Board of Directors
The Board of Directors analyzes and evaluates its composition,

Key Director Expertise and Experience (Skills Matrix)

initiatives were adopted in fiscal 2021.

The knowledge, experience, and abilities of directors that arehuman resources, labor relations, and human resources devel-

operation, supervision, support system, and dialogue withIn the survey covering fiscal 2021, about 80% of the question-

considered important to the Company from the perspective of

opment. We ensure that the Board of Directors is composed ofshareholders, etc., based on a survey conducted by outside

naire responses improved from fiscal 2020, and the results were

corporate management are defined as business management,

people with appropriate knowledge and abundant experience inattorneys and the evaluation of each director.

overall very positive. However, there were comments that thetechnology, research and development, sales, marketing, global

each field.

business, finance, accounting, legal affairs, risk management,

In the self-evaluation concerning the effectiveness of thedirectors did not have sufficient opportunities to visit each busi-

Board of Directors in fiscal 2020, the opinion was expressed thatness site and factory to understand the situation on the groundfurther improvements need to be made to matters such as fur-due to the COVID-19 pandemic, as well as a desire to continue

ther improvement of risk management; creation of a feedback

the constant review of the Group’s governance.

mechanism for past Board of Directors resolutions; promotion

We will continue to make ongoing improvements so that theof sustainability activities; and consideration of a management

Board of Directors can fulfill its supervisory function effectively.

succession plan. In response to these opinions, the following

Business
Management

Name

Technology/
R&D

Sales/
MarketingGlobalBusiness

Finance/
Accounting

Legal/Risk
Management

Human
Resources/Labor
Relations/Human
Resource
Development

Yuichi Tsuji
Toyoshi Nishizaka

Initiatives in Fiscal 2021

Kazuhiko Igarashi• In addition to identifying and assessing business risks associated with changes in the market environment on a regular basis, the Board of

Sadayoshi Fujishige

External Director

Hiroshi Kagechika

External Director

Agasa Naito

External Director

Yasuharu Nakajima

External Director

Directors promoted risk mitigation initiatives by conducting its own risk inspections with reference to examples of disasters and scandals
at other companies, and reported and discussed the status of these initiatives at Board of Directors and other meetings.
• In addition to major capital investment projects and annual budgets, executive officers provided feedback on the progress and issues ofthe Mid-Term Business Plan at Board of Directors meetings and other meetings to deepen discussions on management strategies,• In April 2021, the Sustainability Committee was established, chaired by the Representative and Chief Executive Officer, to discuss specific

Nittobo Group’s Value Creation

including responses to changes in the market environment and competitive environment.

(Note) The above table does not represent all knowledge, experience, etc. possessed by each person.

action policies and achievement targets, including CO2 emissions reduction, recycling and reuse activities, and development of new environmentally friendly products, as well as to report and discuss the status of these efforts at Board of Directors meetings, etc.

Meeting Attendance (FY2021)•T he Nomination Committee discussed and will continue to discuss the management succession plan.

Attendance/Number of meetings

2011
Corporate Governance
System2012

2013

Company with Board of Directors

2014

2015

2016

2017

2018

2019

2020

2021

Company with Nomination Committee, etc. (from June 2014)
Nomination Committee (Chair: External Director)
Remuneration Committee (Chair: External Director)

Committees

Directors

76 Of which,External Directors

1

1

Audit Committee (Chair: External Director)

82

34 (morethan half)

7

6

7

4 (more3 (more4 (morethan half)than half)

Of which, women

Revisions to systems,
regulations

60

Nittobo Group

Integrated Report 2022

3/3

6/6

Audit Committee
Meetings

Name

Position

Yuichi Tsuji

Representative Director andChief Executive Officer

13/13

Toyoshi Nishizaka

Director

13/13

13/13

Yu Nozaki

Director

13/13

13/13

Masamichi Ouchi

External Director

13/13

3/3

6/6

Sadayoshi Fujishige

External Director

13/13

3/3

6/6

Hiroshi Kagechika

External Director

13/13

3/3

6/6

13/13

Agasa Naito

External Director

13/13

3/3

6/6

13/13

2022

12/13

(Note) Mr. Yu Nozaki and Mr. Masamichi Ouchi resigned from their positions as directors at the conclusion of the 161st Ordinary General Meeting of Shareholders held on June 28, 2022.

than half)

1
Briefings before Board of Directors meetings
Board of Directors Evaluation of effectiveness

Data Section

Operation of Boardof Directors

Remuneration
Committee Meetings

Foundation for Value Creation

Audit
Committee(Chair:Internal
director)—

Nomination
Committee Meetings

Strategies for Value Creation

Corporate Governance Highlights

Board of Directors
Meetings

Executive Meeting regulations formulated
Introduction of performance-linked stock remuneration plan

Nittobo Group

Integrated Report 2022

61

Corporate Governance

Process of Determining Remuneration

Executive Remuneration

The Remuneration Committee, chaired by an External Director, checks the exhibition of competencies and the level of achievement of
the Company’s performance targets, along with individual performance targets, and then calculates and determines individual amounts

Executive Remuneration❶ Matters pertaining to policy the determination of the amountbased on the aforementioned remuneration percentages and percentages of reflection in performance-linked remuneration.

(b) O utline of the policy
The Company’s executive remuneration (excluding Externalof executive remuneration, etc., and the method of calcula-

Directors) is structured by basic remuneration determined by thetion thereof

state of competency expected of each position (behavior evalua-(a) Deciding policytion) and the state of performance (performance evaluation), and

The Company determines policy related to the determination of

performance-linked remuneration that varies within a range ofindividual remuneration of Directors and Executive Officers on

0% to 150% according to the level of achievement of individual

the basis of objective data, etc., from external consultants in theperformance targets based on company performance targets

Remuneration Committee made up of a majority of Externalfrom the previous fiscal year and the activities and performance

Directors and chaired by an External Director, based on the pro-of the responsible divisions, and the current fiscal year’s remu-visions of the Companies Act related to a Company withneration is based on a combination of these. Performance-linked

Nomination Committee, etc.

remuneration has not been applied for External Directors due toFurthermore, the policy is based on the approach of providing

the role of supervising management from an independent andstrong motivation for officers to achieve their performance tar-

The remuneration of directors and Executive Officers for fiscal 2021 was also determined by the above method. Furthermore, theobjective perspective.

gets with secure transparency and rationality, fostering aware-Calculation Rules
Basic remuneration
This is determined using a basic remuneration table that is a matrix based on four levels of behavior evaluation and nine levels of performance evaluation.
Performance-linked remuneration• Company performance = amount of basic remuneration for each prior fiscal year x percentage of Company performance for eachposition x level of achievement of company performance for the previous fiscal year
• Individual performance = amount of basic remuneration for each prior fiscal year x percentage of individual performance for eachposition x level of achievement of individual performance for the previous fiscal yearPerformance-linked remuneration is determined by combining the Company performance and the individual performance calculated
as shown above.

Remuneration Committee believes that the content of the remuneration is in line with the above policy, as it confirms the appropriatenessness for medium- to long-term management, and conformingof the level based on the executive compensation data provided by external consultants on a regular basis.

with the interests of stakeholders including shareholders andinvestors, and the performance targets used for calculating

Percentage of Remuneration by Position

Percentage composition of executive remuneration(if the achievement ratio of company and individual targets is 100%)
Performance-linked remuneration*

Position

Company performance

Individual performance

Representative and Chief Executive Officer

67%

16.5%

16.5%

Managing Executive Officer

71%

14.5%

14.5%

Other officers (excluding External Directors)

71%

14.5%

14.5%

External Directors

100%

—
­

­—

*Performance-linked remuneration (company performance + individual performance) is set at 50% of basic remuneration for the Representative and Chief Executive Officer, 40% of
basic remuneration for the Managing Executive Officer, and 40% of basic remuneration for other officers (excluding External Directors)❷ Total amount of remuneration, etc., by category of executive, total amount by category of remuneration, etc., and number of officers
who are recipients thereof

Category

Directors

Performance-linked Remuneration Indicators and Percentage Reflection in Performance-linked Remuneration

25%

25%

② Individual performance

ROE(year on year)

Dividends(year on year)

25%

25%

Operating profit of responsible division(compared to budget)

Status of initiatives to address issues in mid-termbusiness plan for responsible division

40%

60%

19

—

3

78

58

External Directors

76

76

—

—

4

Subtotal

155

135

19

—

7

Subtotal

189

141

47

—

12

Total

344

277

67

—

19

(Notes) 1. The amount paid to Executive Officers does not include the wages paid for employment as an Executive Officer for those who also serve as employees.
2. The Company’s performance-linked remuneration is calculated based on the previous fiscal year’s performance, and the amount combined with fixed remuneration (basic
remuneration) is defined as remuneration for the current fiscal year, and this is paid as a regular equal wage.

Foundation for Value Creation① Company performance

Operating profit(year on year)

Number ofrecipients

Directors (excluding External
Directors)

Executive Officers

Operating profit(compared to budget)

Total amount by category of remuneration, etc. (million yen)
Total amount of
remuneration, etc.
Performance-linked(million yen) Fixed remuneration
remuneration Retirement benefits

Strategies for Value Creation

Basic remuneration

Nittobo Group’s Value Creation

remuneration also reflect this approach.

Reference
Targets and actual values of company performance for fiscal 2020 used in the calculation of performance-linked remuneration in fiscal 2021
Operating profit (compared to budget) Target: 10,000 million yen*/Actual: 5,964 million yen
Operating profit (year on year) Target: 8,160 million yen/Actual: 5,964 million yen
ROE (year on year) Target: 6.2%/Actual: 4.5%
Dividends (year on year) Target: 45 yen per share/Actual: 45 yen per share* Individual performance targets are set using individual quantitative and qualitative targets, and in general, approximately 75% of the targets are achieved.

Introduction of Performance-linked Stock Remuneration Plan
The Company has clarified the relationship between the remuneration of Executive Officers (including those who concurrently serve as
Directors) and the Company’s business performance and market capitalization, so that Executive Officers will not only benefit from anincrease in stock price but also share the risk of a decline in stock price with shareholders. To this end, the Company introduced a new
performance-linked stock remuneration plan, the Board Benefit Trust (hereinafter, “the Plan”), in fiscal 2022 to raise Executive Officer

Indicator Selection② Individual performance

The selected indicators are operating profit to demonstrateThis indicator clarifies the performance responsibilities of eachto more tightly align their interests with shareholders.

earning power and enhanced growth potential, ROE to show

Executive Officer (excluding External Directors) and evaluates

capital efficiency improvement, and dividends to promote further

the status of efforts to address issues in the operating profit and❶ System Outline

provision of value to our shareholders.

Mid-Term Business Plan of their responsible business unit separately from the Company’s performance.

Data Section

awareness of the need to increase corporate value by contributing to medium- and long-term improvement in business performance, and① Company performanceequivalent to the amount obtained by converting the shares toUnder the Plan, Company shares were acquired through a trust

market value (hereinafter, “the Company’s shares, etc.”) are paid

(hereinafter, “the Trust”) with money contributed by the Company

to the Executive Officers through the trust in accordance with theas its source of funds. This is a performance-linked stock remu-

Regulations of Directors’ Stock Benefits established by theneration plan under which the Company’s shares and money

Company. In principle, the Executive Officers shall receive theCompany’s shares and other benefits at the time of their retirement.

62

Nittobo Group

Integrated Report 2022

Nittobo Group

Integrated Report 2022

63

Corporate GovernanceStructure of the Plan

Dialogue with Stakeholders① Establishment of Regulationsof Directors’ Stock Benefits[Entrustor]
Nittobo (the Company)② Money in trust③ Shares

acquisition④ Granting of points⑤ Non-exercise

of voting rights[Trustee]Mizuho Trust & Banking Co., Ltd.
(Re-trustee: Custody Bank of Japan, Ltd.)
Shares of the Company

Instructions on
non-exercise of
voting rights⑥ Benefits in the form of theCompany’s shares, etc.

Executive Officers

Trust Administrator

Receipt ofBeneficiary Rights[Beneficiary]
Retired Executive Officers who meetthe requirements for beneficiary① The Company shall establish the Regulations of Directors’ Stock Benefits by resolution of the Remuneration Committee.
② The Company will hold money in trust to the extent approved by resolution of the Remuneration Committee.
③ The Trust will acquire the Company’s shares using the money entrusted in ② as the source of funds, either through the stock exchange

The Corporate Communication Officer is responsible for general­dialogue with shareholders, and the Corporate Communication
Department is the internal department responsible for providing
assistance thereto. The Company endeavors to have opportunities for dialogue with shareholders that contribute to the sustained growth and enhancement of medium- to long-term
corporate value of the Company centered on Executive Officers.
Furthermore, departments involved in IR activities centered on
the Corporate Communication Department work to coordinate
among departments on a daily basis.

We will continue to endeavor to disclose information in atimely and appropriate manner to enable the Nittobo Group’s
customers, shareholders and investors to accurately recognize
and judge the actual state of the Nittobo Group. In order toachieve this, we comply with laws, regulations and securities
exchange rules on disclosure, and are engaged in the creationand operation of an appropriate disclosure system.

● We publish items specified for disclosure in Japanese and foreign laws, regulations and securities exchange rules in business❶

reports, annual securities reports and communications to shareholders, and announce them in securities exchange communication systems and press releases.
● In principle, we publish information being disclosed on the Nittobo Group’s website, and also endeavor to provide fairer and❷broader disclosure.
● We conduct briefings for analysts and institutional investors promptly after the announcement of quarterly financial results.
❸● We publish an integrated report that incorporates financial and non-financial information, including CSR, in order to provide a❹
better understanding of the Group’s medium- to long-term value creation framework.

market or by disposal of the Company’s treasury stock.

④ The Company grants Executive Officers points determined in accordance with their position in the Company and linked to the degree of⑤ The Trust shall not exercise voting rights with respect to the Company’s shares in the Trust account in accordance with the instructions of
the Trust Administrator, who is independent from the Company.

⑥ The Trust shall pay shares of the Company’s stock in proportion to the number of points granted to such beneficiaries to those who haveretired as Executive Officers and meet the requirements for beneficiaries as stipulated in the Regulations of Directors’ Stock Benefits(hereinafter, “the Beneficiaries”). However, if the Executive Officer satisfies the requirements stipulated in the Regulations of Directors’ Stock
Benefits, they will receive a cash payment equivalent to the market value of the Company’s shares for a certain percentage of the points.

make additional contributions to the Trust for each Subsequent
Relevant Period, based on a reasonable estimate of the numberof the Company (including those who concurrently serve asof shares necessary to provide benefits to Executive Officers

Directors). Directors and external Directors who do not concur-

under the Plan, and the funds deemed necessary for the Trust to

rently serve as Executive Officers are not eligible for the Plan.

acquire such shares in advance.

❸ Amount to be Contributed to the Trust by the Company

Company—excluding the Company shares equivalent to theWhen, however, there are any remaining shares of the
The Company will contribute to the Trust the funds reasonably
expected to be required to acquire up to 174,500 shares, taking
into consideration the market price of the Company’s common
stock in regular trading on the Tokyo Stock Exchange immediately
prior to the establishment of the Trust, as the necessary funds forfive fiscal years (hereinafter, “Initial Relevant Period”) spanningthe fiscal year ending on March 31, 2023 to the fiscal year ending

number of points granted to the Executive Officers for each of
the immediately preceding eligible periods for which the
Executive Officers have not yet received benefits—or money(hereinafter, the “Remaining Shares, etc.”) in the trust assets,
the additional contribution amount shall be calculated after taking into account the Remaining Shares, etc.

❹ Other

beginning after the Initial Relevant Period (“Subsequent RelevantWith the introduction of the Plan, the Company has decided toPeriods.”) Collectively, the Initial Relevant Period and Subsequent

increase the percentage of performance-linked remuneration for

Relevant Periods are referred to as the “Relevant Periods.”

Executive Officers. Specifically, the ratio of basic remuneration,

After the Initial Relevant Period has elapsed and until the ter-variable remuneration, and share remuneration for achieving

mination of the Plan, the Company shall, in principle, continue toperformance goals was set at 60%:25%:15% in the case of theRepresentative and Chief Executive Officer.

64

Nittobo Group

Integrated Report 2022

Policy Regarding Cross-shareholdings
The Company holds shares of listed companies under its policy
on cross-shareholding in cases where it deems such shareholding to be beneficial for building favorable trading relationships
with important trading partners of the Nittobo Group in fields
including sales, raw material procurement and finance, smoothly
advancing business activities of the Nittobo Group, and enhancing
corporate value in the Nittobo Group. However, from the perspective of improving the Group’s corporate value, the Company
will sell shares that are deemed to be of little holding significance,
while paying attention to the effect on the market, and so forth.
Method for Assessing Rationale for Holding Shares
The Company reviews the holding policy for listed shares individually at a meeting of the Board of Directors on a periodic basis,comprehensively considering qualitative factors such as sales andprocurement, the existence of any technological cooperation or
joint capital investment, whether there are any joint ventures
underway, financing, the maintenance and establishment of goodbusiness relationships, and a quantitative evaluation that compares
the total return on investment, calculated by considering dividend
yield and business profit, against the cost of capital, as well as
the comprehensively considered policy on cross-shareholding.
Exercise of Voting Rights Associated with Cross-shareholdings
The Company will appropriately exercise its voting rights associated with cross-share-holdings after consideration of whether
such issuing company has established an effective governancestructure and is making appropriate decisions to improve its
corporate value over the medium to long term, as well as whether
such shareholdings will contribute to enhancing the Group’s
corporate value.

Changes in Cross-Shareholdings
Sold during the period

Unlisted stocks
Listed stocks

FY2017FY2018FY2019FY2020

FY2021

Number of shares

—

—

2

1

1

Amount (million yen)

—

—

32

24

0

Number of shares

2

13

3

4

—

1,305

2,050

783

8,665

—

2

13

5

5

1

Amount (million yen)

1,305

2,050

815

8,689

1

Number of shares

64

53

51

49

47

25,291

20,604

20,694

16,625

15,243

Amount (million yen)
Total
Capitalization at end of period(including unlisted stocks)

Number of shares

Amount (million yen)

Nittobo Group

Integrated Report 2022

Data Section

on March 31, 2027, and also for each of the three-year periods

Cross-shareholdings

Foundation for Value Creation

The eligible persons for the Plan shall be the Executive Officers

Adequate care is given to insider information in individual
inquiries and dialogue with the Nittobo Group, and explanations
are limited to information that has already been published andfacts that are well known.

Strategies for Value Creation❷ Eligibility for the Plan

Opinions and concerns, etc., about the Company that are learned
through dialogue with shareholders and investors are collated by
the Corporate Communication Department, reported to the
Corporate Communication Officer and the Board of Directors ona quarterly basis, and appropriately provided as feedback to­management executives.

Nittobo Group’s Value Creationachievement of the Mid-Term Business Plan in accordance with the Regulations of Directors’ Stock Benefits.

65

GovernanceDirectors and Officers

Directors (as of June 28, 2022)

Director

Director

Director

Director

Sadayoshi Fujishige

Hiroshi Kagechika

Agasa Naito

Yasuharu Nakajima

Reason for Appointment

Reason for Appointment

Mr. Fujishige has a wealth of experience and a high level of insight as a top manager of listedcompanies. The Company expects that he will appropriately fulfill his role as an External
Director by contributing to the decision-making of the Board of Directors and supervisingbusiness ­execution from the standpoint of promoting sustainable growth and improving theCompany’s mid- and long-term corporate value, resulting in his appointment.

Career Summary
Mar. 1969 Joined Lion Fat & Oil Co., Ltd. (currently: Lion Corporation)
Mar. 1996 Director, Executive General Manager of International Division of Lion Corporation
Mar. 2000	Executive Director, Executive General Manager of Home Products Sales
Headquarters of Lion Corporation
Mar. 2002	Representative Director, Senior Executive Director, Responsible for Home Products Business,
Executive General Manager of Home Products Sales Headquarters of Lion Corporation
Mar. 2004 Representative Director, President and CEO of Lion Corporation
Mar. 2006	Representative Director, President and CEO, Chairman of the Board of Directors,
Responsible for Home Products Business of Lion Corporation
Jan. 2012	Representative Director, Chairman and CEO, Chairman of the Board of Directors of Lion
Corporation
Jan. 2014 Representative Director, Chairman, Chairman of the Board of Directors of Lion Corporation
Mar. 2016 Advisor of Lion Corporation
Jun. 2020	External Director of SATO HOLDINGS CORPORATION (current)
External Director of the Company (current)
Mar. 2021 Special Consultant of Lion Corporation (current)
Jun. 2021	Outside Member of the Board (Member of the Audit and Supervisory Committee) of TV Asahi
Holdings Corporation (current)

Mr. Kagechika has specialist insight and a wealth of experience in corporate business and thefield of research and development in the manufacturing sector. The Company expects that hewill appropriately fulfill his role as an External Director by contributing to the decision-makingof the Board of Directors and supervising business execution from the standpoint of promoting
sustainable growth and improving the Company’s mid- and long-term corporate value, resulting in his appointment.

Career Summary
Apr. 1972
Feb. 2002
Apr. 2003
Apr. 2005
Apr. 2009
Apr. 2015
Jun. 2020

Joined NKK Corporation (currently: JFE Holdings, Inc.)
Vice President of NKK Corporation
Vice President of JFE Steel Corporation
Senior Vice President (Director of Steel Research Laboratory) of JFE Steel Corporation
President and Representative Director of JFE Techno-Research Corporation
Advisor of JFE Techno-Research Corporation
External Director of the Company (current)

Reason for Appointment

Reason for Appointment

Ms. Naito has a wealth of experience and a high level of insight as an expert in law and as an
outside officer of other companies. The Company expects that she will appropriately fulfill herrole as an External Director by contributing to the decision-making of the Board of Directors
and supervising business execution from the standpoint of promoting sustainable growth andimproving the Company’s mid- and long-term corporate value, resulting in her appointment.

Career Summary

Mr. Yasuharu Nakajima has engaged in corporate audit work for many years as a certified public
accountant. He brings specialized knowledge and abundant experience in finance and accounting. He has been appointed to the Board of Directors of the Company to play an appropriate rolein its decision making and supervision of business execution from the viewpoint of promoting
the sustainable growth and medium- to long-term increase in corporate value of the Company.

Career Summary

Oct. 2001 Registered as an attorney Joined Nagashima Ohno & Tsunematsu
May 2008 Registered as an attorney at New York State Bar Association
Jun. 2011 Joined TANABE & PARTNERS
Apr. 2013 Partner of TANABE & PARTNERS (current)
Jun. 2015 Outside Audit & Supervisory Board Member of BOOKOFF CORPORATION LIMITED
Oct. 2018 Outside Audit & Supervisory Board Member of BOOKOFF GROUP HOLDINGS LIMITED
Jun. 2020 External Director of the Company (current)
Aug. 2021	Outside Director (Audit & Supervisory Board Member) of BOOKOFF GROUP HOLDINGSLIMITED (current)

Oct. 1983 Joined Tetsuzo Ota & Co. (currently Ernst & Young ShinNihon LLC)
Apr. 1987 Registered as a certified public accountant
May 1998 Partner of Showa Ota & Co. (currently Ernst & Young ShinNihon LLC)
May 2004 Senior Partner of ShinNihon & Co. (currently Ernst & Young ShinNihon LLC)
Sep. 2008 General Manager of 6th Audit Department of Ernst & Young ShinNihon LLC
Sep. 2010	Managing Director, General Manager of 2nd Audit Business Division, and General Manager
of Knowledge Headquarters of Ernst & Young ShinNihon LLC
Jul. 2021 Partner of Ernst & Young ShinNihon LLC
Jun. 2022 External Director of the Company (current)

Nittobo Group’s Value Creation

Director Representative andChief Executive Officer

Director

Director

Yuichi Tsuji

Toyoshi Nishizaka

Kazuhiko Igarashi

Reason for Appointment

Reason for Appointment

Career Summary
Oct. 2013 Joined the Company General Manager of Accounting and Finance Dept.
Apr. 2014 Operating Officer and General Manager of Accounting and Finance Dept.
Jun. 2014	Executive Officer, General Manager of Corporate Business Planning Dept. andResponsible for Corporate Risk Management
Nov. 2014	Executive Officer, General Manager of Corporate Business Planning Dept., Responsible for
Corporate Risk Management, Human Resources Dept., Information System Dept.,
Compliance Management Dept., Purchasing Dept., Osaka Branch and Nagoya Branch
Jun. 2015 Director and Executive Officer (current)
Feb. 2016 Representative Executive Officer
Jun. 2016 Representative and Chief Executive Officer (current)

Mr. Nishizaka served as General Manager of Human Resources Dept. and President ofEnvironmental Division and has experience in starting up overseas subsidiaries. He has ample
business experience befitting a Director of the Company, and has a broad range of knowledge
and deep insight into the Company’s business, resulting in his appointment.

Career Summary
Apr. 1981
Jun. 2003
Feb. 2007
Jun. 2008
Oct. 2008
Apr. 2010
Jan. 2011
May 2012
Apr. 2013
Jun. 2014

Joined the Company
General Manager of Planning & Administration Dept., Glass Fiber Division
General Manager of Human Resources Dept.
Director and General Manager of Human Resources Dept.
Operating Officer and President of Building Materials Division
Managing Operating Officer and President of Environmental Division
Managing Operating Officer and stationed at Main Branch (Fukushima)
President, Representative Director of Nittobo Allied Service Co., Ltd.
Advisor and Head of Fukuyama Enterprise Center
Director (current)

Reason for Appointment
Mr. Igarashi has worked for many years in the production and technical areas of the Glass
Fiber Division, and since 2017 has overseen it as the General Manager of the Division. Since
April 2022, he serves as Managing Executive Officer and the President of the Research andDevelopment Headquarters. He is appointed as a Director of the Company because of his
extensive business experience, breadth and depth of knowledge, and insight into theCompany’s production, technology and research and development fields.

Strategies for Value Creation

Mr. Tsuji assumed his office as Executive Officer in 2014 and was responsible for overall headquarters functions, including the Corporate Business Planning Dept. and Human Resources
Dept. Since 2016, he has presided over the entire Nittobo Group as Representative and Chief
Executive Officer. He has ample business experience befitting a Director of the Company, andhas a broad range of knowledge and deep insight into the Company’s business, resulting in
his appointment.

Career Summary■ External Director■ Directors who meet the Company’s criteria for independence andhave submitted an “Independent Directors/Auditors Notification”
to the Tokyo Stock Exchange■ Director not concurrently serving as an Executive Officer■M ember of Nomination Committee

Foundation for Value Creation

Apr. 1990 Joined the Company
Mar. 2007	General Manager of the Glass Fiber Yarn Production Department
Apr. 2011 General Manager of the Glass Fiber Division Manufacturing Control Department
Apr. 2013 General Manager of the Glass Fiber Division Technology and Production Headquarters
Apr. 2014	General Manager of the Glass Fiber Division Production Headquarters and Deputy
General Manager of Fukushima Factory
Apr. 2015	Executive Officer, General Manager of the Glass Fiber Division Production Headquarters
and Deputy, General Manager of Fukushima Factory
Feb. 2016	Executive Officer, General Manager of the Glass Fiber Division Production Headquarters
and General Manager of Fukushima Factory
Apr. 2020 Managing Executive Officer, President of Glass Fiber Division
Apr. 2021	Managing Executive Officer, President of Glass Fiber Division and General Manager ofTechnology Headquarters
Apr. 2022	Managing Executive Officer, President of Research and Development Headquarters,
Head of DX Strategy Office and Environment Technology Strategy Office (current)
Jun. 2022 Director (current)■M ember of Remuneration Committee■M ember of Audit Committee

Executive Officers (as of July 1, 2022)
Position

Main Responsibilities

Name

Position

Main Responsibilities

Representative andChief Executive Officer

CEOYuji Sugama

Executive Officer

Responsible for Regulatory Affairs and Academics, Vice President of Research & Development Headquarters (Head ofMedical SC Technology), Head of the Medical R&D Center

Hiroyuki Tada

Managing Executive
Officer

Responsible for the Corporate Management Division, General Manager of the Corporate Business Planning Division,
Purchasing Department, and the Textile Division, and President and Representative Director of Nittobo Advantex Co., Ltd.

Akimasa Kajita

Executive Officer

General Manager of the Glass Fiber Division Production Headquarters,
and President and Representative Director of Nitto Glass Fiber Manufacturing Co., Ltd.

Kazuhiko Igarashi*Managing Executive
OfficerPresident of Research & Development Headquarters, Head of Digital Transformation Strategy Office, and Environment
Technology Strategy Office

Hiroki Kajikawa

Executive Officer

Responsible for the Human Resources Dept., Corporate Communication Dept., Accounting and Finance Dept., andInformation Systems Dept., and General Manager of Accounting and Finance Dept.

Tatsuo Sakae

Managing Executive
Officer

General Manager of the Medical Division, President and Representative Director of NITTOBO MEDICAL CO., Ltd., andChairman and CEO of Nittobo America Inc.

Katsuya Hatanaka

Executive Officer

Hisanobu Hayashi

Managing Executive
Officer

General Manager of the Glass Fiber Division and Chairman of Baotek Industrial Materials Ltd.

Responsible for the Corporate Business Planning Dept., General Affairs Dept., 100-year Anniversary Project, Risk
Management Dept., Legal Dept., Osaka Branch, Nagoya Branch and General Manager of the Corporate Business
Planning Dept.

Masaki Ito

Executive Officer

President of NITTOBO ASIA Glass Fiber Co., Ltd.

Takanobu Matsunaga

Senior Executive
Officer

Deputy General Manager of the Glass Fiber Division, Responsible for Sales Division, and General Manager of Product
Planning and Development Division, and President and Representative Director of Paramount Glass Manufacturing Co., Ltd.

Nittobo Group

Integrated Report 2022

Data Section

66

Name
Yuichi Tsuji**Concurrently serving as Director

Nittobo Group

Integrated Report 2022

67

11-Year Financial Data
(Millions of yen)

FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

Net sales

82,638

82,103

85,10490,22386,19983,32484,52682,29285,72278,72784,051

Operating profit

5,929

6,619

6,476

8,885

10,893

11,148

10,837

8,198

8,160

5,964

7,268

Ordinary profit

5,496

6,413

6,511

8,658

10,974

11,396

11,071

8,934

8,202

6,274

8,065

Profit attributable to owners of parent

1,433

2,840

3,858

4,588

5,598

7,479

10,253

7,984

5,771

8,100

6,519

EBITDA*1

11,411

11,974

11,19013,57815,497

15,27815,001

12,27913,54812,296

14,351

Depreciation

5,481

5,354

4,713

4,692

4,603

4,130

4,164

4,080

5,388

6,332

7,082

Capital investment

5,236

5,903

5,104

4,814

4,422

2,043

7,024

11,94916,717

14,70915,820R&D expenses

1,704

1,626

1,495

1,290

1,255

1,429

1,590

1,477

1,698

2,097

2,577

 Cash flows from operating activities/
Net cash provided by (used in) operating activities

4,634

6,223

12,152

14,745

16,677

11,034

7,791

5,317

10,614

7,815

6,965

 Cash flows from investing activities/
Net cash provided by (used in) investing activities(8,245)(7,006)(4,267)(5,318)(12,294)(2,271)

2,524(11,389)(16,917)(1,867)(17,305) Cash flows from financing activities/
Net cash provided by (used in) financing activities(2,604)(1,432)(4,351)(4,388)(2,276)(8,826)(9,467)

3,948

12,6281,862(1,530)(3,610)

(783)

7,884

9,426

4,382

8,762

10,316(6,071)(6,302)

5,948(10,339)

Total assets*2

131,040

132,555

136,294

145,956

142,719

140,064

147,160

151,000

172,824

184,652

187,289

Net assets

55,81160,13563,371

73,22875,45578,28187,54890,74098,704

104,389

110,638

Interest-bearing debt

35,09635,97635,40834,01632,67327,35820,22525,58940,31544,162

46,211

247,677

247,677

247,677

247,677

247,677

199,677

39,93539,93539,93539,93539,935

Earnings per share (EPS) (yen)*4

7.19

14.25

19.36

23.03

28.10

37.71

263.97205.76148.73208.77168.04Book-value per share (BPS) (yen)*4

276.11

297.69313.91363.32374.50396.002,232.43

2,312.06

2,413.82

2,555.06

2,727.58

5.00

5.00

5.00

5.00

6.00

7.00

26.00

40.00

45.00

45.00

45.00

69.5

35.1

25.8

21.7

21.4

18.6

15.2

19.4

30.3

21.6

26.8

Operating profit ratio (%)

7.2

8.1

7.6

9.8

12.6

13.4

12.8

10.0

9.5

7.6

8.6

EBITDA margin (%)

13.8

14.6

13.1

15.0

18.0

18.3

17.7

14.9

15.8

15.6

17.1

Return on equity (ROE) (%)*7

2.6

5.0

6.3

6.8

7.6

9.8

12.5

9.1

6.3

8.4

6.4

Equity ratio (%)*8

42.0

44.8

45.9

49.6

52.3

55.3

58.9

59.4

54.2

53.7

56.5

Debt-to-equity ratio (time)*9

0.64

0.61

0.57

0.47

0.44

0.35

0.23

0.29

0.43

0.45

0.44

Operating results

Cash flows

Nittobo Group’s Value Creation

Free cash flows
Financial position (at end of fiscal year)

Strategies for Value Creation

Stock information*3
Number of shares issued (thousand shares)

Dividends per share (yen)*5

Foundation for Value Creation

Dividend payout ratio (%)*6
Management indicators

68

Nittobo Group

Integrated Report 2022

Data Section*1 EBITDA: Operating profit + depreciation*2 The Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, February 16, 2018) and others have been applied from the beginning of fiscal
2018, and the figures for fiscal years 2014 through 2017 are shown after retroactive application of such accounting standards.
*3 On October 1, 2017, a reverse stock split was implemented at a ratio of 1 share for every 5 shares of common stock.
*4 Earnings per share is calculated based on the average number of issued shares during the period excluding treasury stock, and book value per share is calculated based on thenumber of shares issued at the end of the period excluding treasury stock.

*5 The fiscal 2017 dividend of ¥26 per share is the sum of the interim dividend of ¥3.5 before the reverse stock split and the year-end dividend of ¥22.5 after the reverse stock split.
The dividend per share for fiscal 2017, converted on a post-reverse stock split basis, would be ¥40.
*6 The consolidated dividend payout ratio is calculated based on the average number of issued shares outstanding during the period excluding treasury shares.
*7 Return on equity (ROE): Profit attributable to owners of the parent / (Net assets [average of beginning and ending amounts] - Non-controlling interests [average of beginning andending amounts])*8 Equity ratio: (Net assets - Non-controlling interests) / Total assets*9 Debt-to-equity ratio: Interest-bearing debt / (Net assets - Non-controlling interests)

Nittobo Group

Integrated Report 202269

Consolidated Financial Statements Nitto Boseki Co., Ltd. and Consolidated Subsidiaries

Consolidated Balance Sheet(Millions of yen)

As of March 31, 2021

As of March 31, 2022

As of March 31, 2021

As of March 31, 2022

Notes and accounts payable - trade

6,570

6,523

Short-term borrowings

7,252

14,354Current portion of long-term borrowings

5,518

5,101

378

337

AssetsLiabilities

Current assets

Current liabilities

Cash and deposits

30,32018,537

Notes and accounts receivable - trade23,985—

Notes receivable - trade

—

5,364

Accounts receivable - trade—

20,593

Income taxes payable

2,528

555

Merchandise and finished goods

8,598

10,817

Provision for bonuses

1,080

1,059

Work in process

4,296

4,625

Provision for business restructuring

710

195

Raw materials and supplies

21,451

22,297

Other

9,836

8,737

Other

5,237

3,605

Total current liabilities

33,87536,864(1)(1)

93,887

85,838

Bonds payable

10,00010,000Allowance for doubtful accounts
Total current assets

Lease liabilities

Non-current liabilities

19,322

14,891

Lease liabilities

1,690

1,528

Property, plant and equipment

Provision for repairs

5,652

4,371

Buildings and structures, net

15,886

19,909Retirement benefit liability

7,976

6,919

Machinery, equipment and vehicles, net

21,24632,807

Other

1,746

2,076

Land

14,983

15,334

Total non-current liabilities

46,38739,787

Leased assets, net

1,451

1,241

Total liabilities

80,26276,651

Construction in progress

10,035

6,048

Other, net

1,902

1,928

Share capital

19,69919,699Total property, plant and equipment

65,506

77,270Capital surplus

19,037

19,373

Intangible assets

2,595

3,082

Retained earnings

61,831

66,619Treasury shares(2,559)(2,563)

Total shareholders’ equity

98,008103,129

Valuation difference on available-for-sale securities

2,714

1,754

Foreign currency translation adjustment

(371)

1,995

Remeasurements of defined benefit plans(1,220)(1,056)

Total accumulated other comprehensive income

1,123

2,692

5,257

4,815

Shareholders’ equity

15,771Retirement benefit asset

377

591

Deferred tax assets

3,356

3,048

Other

1,664

1,706

(20)

(20)

Total investments and other assets

22,661

21,097

Non-controlling interests

Total non-current assets

90,764

101,450

Total net assets

104,389

110,638

Total assets

184,652

187,289

Total liabilities and net assets

184,652

187,289

Accumulated other comprehensive income

Nittobo Group

Integrated Report 2022

Data Section

Integrated Report 2022

Foundation for Value Creation

17,282

Nittobo Group

Strategies for Value Creation

Net assets

Investment securities

Allowance for doubtful accounts

Nittobo Group’s Value Creation

Long-term borrowings

Non-current assets

Investments and other assets

70(Millions of yen)71

Consolidated Financial Statements

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income(Millions of yen)

(Millions of yen)

For the fiscal year
ended March 31, 2021

For the fiscal year
ended March 31, 2022

Net sales

78,72784,051

ProfitCost of sales

53,06555,823

Other comprehensive income

Gross profit

25,661

28,228Valuation difference on available-for-sale securities

Selling, general and administrative expenses

19,697

20,959Foreign currency translation adjustment

Operating profit

5,964

7,268

Remeasurements of defined benefit plans, net of tax

992

169

Total other comprehensive income

(718)

2,233

7,559

8,915

7,325

8,089

233

825

Non-operating income
Interest income

152

Dividend income

446

459

Comprehensive income

For the fiscal year
ended March 31, 2022

8,278

6,681

(1,264)

(869)

(446)

2,934

Comprehensive income attributable toRental income

97

91

Comprehensive income attributable to owners of parent

Foreign exchange gains

278

714

Comprehensive income attributable to non-controlling interests

Other

343

327

1,181

1,594

Interest expenses

250

219

Expenses related to inactive real estate for rent

332

293

Inactive facilities expenses

34

162

Other

253

122

Total non-operating expenses

871

798

6,274

8,065

Gain on sale of non-current assets

3,091

14

Gain on sale of investment securities

6,590

37

Total non-operating income

For the fiscal year
ended March 31, 2021

Non-operating expenses

Nittobo Group’s Value Creation

Ordinary profit
Extraordinary income

Reversal of provision for repairs
Insurance claim income

808

—

2,671

437

826

332

Compensation income

—

1,062

Other
Total extraordinary income

19—

14,0081,884

Strategies for Value Creation

Subsidy income

Extraordinary losses
Loss on disposal of non-current assets

290

1,838

286

Business restructuring expenses

3,946

35

Loss on disaster

2,235

336

825

302

Loss on tax purpose reduction entry of non-current assets
Other

56

18

9,069

1,270

Profit before income taxes

11,213

8,679

Income taxes - current

3,023

1,275

Income taxes - deferred

(88)

722

Total income taxes

2,935

1,998

Profit

8,278

6,681

Total extraordinary losses

Profit attributable to non-controlling interests

72

Nittobo Group

Integrated Report 2022

161

8,100

6,519

Data Section

Profit attributable to owners of parent

178

Foundation for Value Creation

165

Impairment losses

Nittobo Group

Integrated Report 202273

Consolidated Financial Statements

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

For the fiscal year ended March 31, 2021

Balance at beginning of period

Accumulated other comprehensive income

SharecapitalCapitalsurplusRetainedearnings

Total
Treasury shareholders’sharesequity19,69919,03755,574(2,554) Cumulative effects ofchanges in accounting policies
Restated balance

91,757

Valuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net
assets3,998

117(2,219)

1,897

5,049

98,704—
19,69919,03755,574(2,554)91,757

—
3,998

117

(2,219)

1,897

5,049

98,704

Changes during period(1,842) Profit attributable to ownersof parent(1,842)

8,100

Purchase of treasury shares(5) Change in ownership interestof parent due to transactions
with non-controlling interests(1,842)

8,100

8,100

(5)

(5)

—

—

 Net changes in items otherthan shareholders’ equity
Balance at end of period(1,284)

(489)

998

(774)

208

(566)

—

—

6,257

(5)

6,251

(1,284)

(489)

998

(774)

208

5,684

19,69919,037

61,831(2,559)98,008

2,714

(371)

(1,220)

1,123

5,257

104,389(Millions of yen)
Shareholders’ equity

Accumulated other comprehensive income

SharecapitalCapitalsurplusRetainedearnings

Total
Treasury shareholders’sharesequity19,69919,037

61,831(2,559)14
19,69919,037

61,84698,008Valuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensive
incomeDividends of surplus Profit attributable to ownersof parent

2,714

(371)

(1,220)1,123

Total net
assets

5,257

104,38914(2,559)98,023

14
2,714

(371)

(1,220)

1,123

5,257

104,404(1,745)(1,745)(1,745)

6,519

6,519

6,519

(3)

(3)

336

336

Purchase of treasury shares(3) Change in ownership interestof parent due to transactions
with non-controlling interests

1,838

286

Increase (decrease) in retirement benefit liability

(492)

(824)

68

(1,280)Interest and dividend income

(462)

(461)

Interest expenses

250

219

Loss (gain) on sale and valuation of investment securities(6,533)(37)

Loss (gain) on sale and retirement of non-current assets(2,923)276

Insurance claim income(2,671)(437)

Subsidy income
Compensation income

(826)

(332)

—

(1,062)Business restructuring expenses

3,946

35

Decrease (increase) in trade receivables

1,173(1,750)Decrease (increase) in inventories(5,258)(2,938)

Increase (decrease) in trade payables

294

(175)

Other, net

(966)

1,876

Subtotal

4,982

9,154

Interest and dividends received

462

461

Interest paid

(246)

(226)

Proceeds from insurance income

2,671

437

Subsidies received

1,631

521

—

1,062

—

(512)

Income taxes paid

(1,686)(3,933)

Net cash provided by (used in) operating activities

7,815

6,965

(13,840)(17,326)

Business restructuring expenses paid

Cash flows from investing activities
Purchase of non-current assets
Proceeds from sale of non-current assets

3,276

10

Proceeds from sale of investment securities

8,806

225

—

(469)

Purchase of shares of subsidiaries
Other, net
Net cash provided by (used in) investing activities

(110)

256

(1,867)(17,305)

(960)

2,366

163

1,569

(441)

1,128

—

336

4,773

(3)

5,106

(960)

2,366

163

1,569

(441)

6,234

19,69919,373

66,619(2,563)103,129

1,754

1,995

(1,056)

2,692

4,815

110,638

Integrated Report 2022

Net increase (decrease) in short-term borrowings

(373)

6,220

Proceeds from long-term borrowings

11,274670

Repayments of long-term borrowings(6,702)(5,518)Dividends paid

(1,842)(1,745)—(732)

Purchase of shares of subsidiaries not resulting in change in scope of consolidation
Other, net

(492)

(424)

Net cash provided by (used in) financing activities

1,862(1,530)Effect of exchange rate change on cash and cash equivalents

(342)

159

Net increase (decrease) in cash and cash equivalents

7,468(11,710)

Cash and cash equivalents at beginning of period

22,69530,163

Cash and cash equivalents at end of period

30,16318,453

Nittobo Group

Integrated Report 2022

Data Section

Nittobo Group

7,082

Impairment losses

Foundation for Value Creation

74

8,679

6,332

Cash flows from financing activities336 Net changes in items otherthan shareholders’ equity
Total changes during period

11,213

Depreciation

Proceeds from compensation

Noncontrollinginterests

Changes during period

Balance at end of period

Profit before income taxes

Cash flows from operating activities

Strategies for Value Creation Cumulative effects of changes
in accounting policies
Restated balance

For the fiscal year
ended March 31, 2022

Nittobo Group’s Value Creation

For the fiscal year ended March 31, 2022

Balance at beginning of period

For the fiscal year
ended March 31, 2021

Increase (decrease) in provision for repairs

Dividends of surplus

Total changes during period(Millions of yen)

(Millions of yen)
Shareholders’ equity

75Company Profile

Stock Information (as of March 31, 2022)

Stock Status

Major Shareholders• Manufacture, processing, and sale of textile products

Authorized number of shares 120,000,000 shares

Name

Aza Higashi 1, Gonome, Fukushima-shi, Fukushima,• Manufacture, processing, and sale of glass fiber products

Number of shares issued

39,935,512 shares (including 1,138,347 treasury shares)

960-8161, Japan• Manufacture, processing, and sale of chemical products

Number of shareholders

8,665

Dates ofFebruary 1898 Koriyama Kenshi Boseki Co., Ltd. (Koriyama)

establishment:

April1918 Fukushima Seiren Seishi Co., Ltd. (Fukushima)

April

1923

Head Office:

NITTO BOSEKI CO., LTD.

Headquarters:

2-4-1, Kojimachi, Chiyoda-ku, Tokyo, 102-8489, Japan

Paid-in capital:

19.6 billion yen

Representative andYuichi Tsuji

Employees:

2,729 (Consolidated), 783 (Parent company)(as of March 31, 2022)

Business operations:and pharmaceutical products• Design, manufacture, and sale of machinery andChief Executive

Individuals
and others
8.88%

Business Locations
Tokyo Headquarters

2-4-1, Kojimachi, Chiyoda-ku, Tokyo, 102-8489, Japan

Administration Division Telephone: +81-3-4582-5111
Glass Fiber Division Telephone: +81-3-4582-5170
Medical Division Telephone: +81-3-4582-5450

Financial
institutions
44.45%

Distribution of
Shareholders

Foreignshareholders
18.60%

(%)

5,750

14.82

Custody Bank of Japan, Ltd. (Trust account)

3,176

8.19

Sumitomo Realty & Development Co., Ltd.

2,383

6.14

Nippon Life Insurance Company

1,614

4.16

The Dai-ichi Life Insurance Company, Limited

1,316

3.39

Sumitomo Life Insurance Company

1,082

2.79

AIR WATER INC.

997

2.57

TAIYO FUND, L.P.

965

2.49

Central Glass Co., Ltd

948

2.45

The Toho Bank, Ltd.

905

2.33

* The percentage of shares held excludes treasury shares.

Textile Division Telephone: +81-3-4582-5160
Beverage Business Department Telephone: +81-3-4582-5480
Osaka Branch4-3-10, Kouraibashi, Chuo-ku, Osaka-shi, Osaka, 541-0043, Japan

Telephone: +81-6-6208-5015(Nissei Fushimicho Building New Building)Nagoya Branch2-14-21, Nishiki, Naka-ku, Nagoya-shi, Aichi, 460-0003, Japan

shares held*(in thousands)
account)

Treasury shares
2.85%

equipment, etc.

Officer:

Percentage of

The Master Trust Bank of Japan, Ltd. (Trust• Manufacture and sale of soft drinks• Planning, supervision, and contracting for construction

Number ofshares held

Securities
companies
0.67%

Other domestic corporation
24.55%

Telephone: +81-52-231-5131(Maruyama Nissei Building)
Fukushima Factory

1, Aza Higashi, Gonome, Fukushima-shi, Fukushima, 960-8581, Japan

Telephone: +81-24-546-3131
Fiber R&D Center Telephone: +81-24-546-3138

Fukushima No. 2 Factory

20, Ipponsugi, Sakurashimo, Fukushima-shi, Fukushima, 960-2154, Japan

Telephone: +81-24-593-1231

Fukuyama Enterprise Center1, Aza Shiojima, Fukuhara, Fukuyama-cho, Koriyama-shi, Fukushima,

Telephone: +81-24-932-6011

963-8061, Japan

Research & Development Headquarters Telephone: +81-24-932-6110
Medical R&D Center Telephone: +81-24-932-6261

500, Hirayanagi, Asahi-machi, Shimoniikawa-gun, Toyama,939-0744, Japan

Telephone: +81-765-82-1133

Itami Enterprise Center

1-6-1, Kuwazu, Itami-shi, Hyogo, 664-8501, Japan

Telephone: +81-72-782-2621

Fiscal Year

April 1 to March 31

Ordinary General Meeting of Shareholders

Late June

Record Date

Voting rights for Ordinary General Meeting of Shareholders

March 31

Year-end Dividend March 31

Nittobo Group’s Value Creation

Tomari Enterprise Center

Stock-related Administration

Interim Dividend September 30
Other record dates are established as necessary with prior public notice.
Method of Public Notice

Public notices are available on the Company’s website below:
https://www.nittobo.co.jp/ (Japanese only)

Consolidated Subsidiaries (as of June 30, 2022)

However, if an electronic public notice cannot be posted due to an accident or other unavoidable reason,
the public notice will be printed in the Nihon Keizai Shimbun.

■ Glass Fiber Yarn
Koriyama-shi, Fukushima

Production and sale of glass fiber products

Stock Listing

Prime Market of the Tokyo Stock Exchange (Securities code: 3110)

Fuji Fiber Glass Co., Ltd.

Moka-shi, Tochigi

Production and sale of glass fiber products

Shareholder Registry Administrator and

Mizuho Trust & Banking Co., Ltd.

NITTOBO ASIA Glass Fiber Co., Ltd.

Chiayi County, Taiwan

Production and sale of glass fiber products

Special Account Administrator

1-3-3 Marunouchi, Chiyoda-ku, Tokyo

Soyo Co., Ltd.

Chiyoda-ku, Tokyo

Sale of glass fiber products, etc.

Shinwa Denzai Co., Ltd.

Chiyoda-ku, Tokyo

Sale of electronic materials, etc.

Baotek Industrial Materials Ltd.

Taoyuan, Taiwan

Production and sale of glass fiber products

Nittobo Taiwan Co., Ltd.

Taoyuan, Taiwan

Sale of glass fiber products

Strategies for Value Creation

Nitto Glass Fiber Manufacturing Co., Ltd.

■ Glass Fiber Cloth

Glass Fiber for Industrial Materials
Nitto Glasstex Co., Ltd.

Oizumi-machi, Oura-gun, Gunma

Production and sale of glass fiber products

Paramount Glass Manufacturing Co., Ltd.

Sukagawa-shi, Fukushima;

Production and sale of glass wool products

IR Information Website
The Nittobo Group’s detailed IR information is available
on our official website.

Ebetsu-shi, Hokkaido; Suzuka-shi, Mie
Koriyama-shi, Fukushima

Production and sale of glass fiber products, etc.

Nittobo Macau Glass Weaving Co., Ltd.

Macau

Production and sale of glass fiber products

NITTOBO MEDICAL CO., LTD.

Chiyoda-ku, Tokyo

Development, production, and sale of in vitro diagnostic reagents andKoriyama-shi, Fukushimaspecialty chemicals

Frontier Institute Co., Ltd.

Ishikari-shi, Hokkaido■Life Science

https://www.nittobo.co.jp/eng/ir/index.htm

Foundation for Value Creation

Nittobo FRP Laboratory Co., Ltd.

• Management policy• Corporate governance• Financial results-related materials(financial statements, etc.)• News releases• IR calendar• Performance and financial
information and more

Development, manufacturing and sale of bioassay kits andconsignment of antibody production

Nittobo America Inc.

California, Iowa and Maine, U.S.A.

Production and sale of antisera used for in vitro diagnostic reagents

Kamiya Biomedical Company, LLC

Washington, U.S.A.

Production and sale of in vitro diagnostic reagents

Nitto Beverage Co., Ltd.

Asahi-machi, Shimoniikawa-gun Toyama

Production and sale of soft drinks

Thank you for reading the Nittobo Group Integrated Report 2022.
This report has been prepared to provide stakeholders with key information on the

Data Section■ Textiles

Message from the Corporate Communication Department

Company and our efforts to realize Big VISION 2030, our vision for 2030. We set out toNittobo Advantex Co., Ltd.

Itami-shi, Hyogo

Production and sale of interling in and adhesive materials

Bunkyo Seiren Co., Ltd.

Fukui-shi, Fukui

Processing of textile products

Nittobo Allied Service Co., Ltd.

Fukushima-shi, Fukushima

Various contracted services and insurance agency

Nittobo Ecology Co., Ltd.

Chiyoda-ku, Tokyo

Various contracted services

Nittobo Techno Co., Ltd.

Koriyama-shi, Fukushima■ OthersDesign, manufacture, and sale of mechanical facilities; design andconvey our growth strategy in an easy-to-understand manner, as well as our commitment
to the constant improvement of governance, with committed focus on the environmentand social aspects in order to enhance our corporate value and achieve sustainablegrowth. We will continue to place importance on dialogue with our stakeholders andactively promote communication activities that will enhance our corporate value.

construction of civil engineering work and buildings

76

Nittobo Group

Integrated Report 2022

Nittobo Group

Integrated Report 2022

77