CONTENTS“Confidence-based Management .”

03

Top

05

Steel You Can Count On technologies that

■ Editorial Policy

thrive in a variety of ﬁelds

This report gives a summary of ﬁnancial

07

Financial Highlights

information such as earnings, as well

09

Segment Dataas ESG (Environmental, Social, and11

10th Medium-Term Business Plan

Governance) initiatives and similar, which

13

Featuresprovide the foundations for sustainable

Sanyo Global Action - Expanding Sanyo

growth, to allow a better understanding

Special Steel Worldwide

of Sanyo Special Steel Co., Ltd. ( Sanyo

15

TopicsSpecial Steel ).

17

CSR-conscious management - the aim of the

19

Message

Sanyo Special Steel Group■ Period covered by the report

Stakeholder Conﬁdence

FY2018 (April 1, 2018 to March 31, 2019)SocialAs well as doing our best to inspire confidence in our customers and in society atlarge, day-by-day we develop various efforts to build confidence among people.
We will continue to fulfill our economic and social mission, without relent.

The corporate philosophy

Confidence-based Management- note that the report contains some21

Conﬁdence of customers

information from timeframes outside this23

Conﬁdence of Suppliers

period.

25

Conﬁdence of employee

Environment■ Scope of application

31

Environmental management

Sanyo Special Steel Co., Ltd., and group

33

Initiatives to prevent climate change

companies

34

Contributing to a resource-recycling society

35 Moves to reduce the load on the environment■ Reference Guidelines

36

Environmental Reporting Guidelines

Environmental risk management

Governance01

The corporate philosophy of the Sanyo Special Steel Group is

37

Corporate Governance

39

Internal control systems

41

Financial Section

76

Company ProﬁleConfidence of society

Confidence of customers

Confidence among people

We aim to acquire theWe aim to earn the conﬁdence

We aim to build theconfidence of society byof customers by rapidly

conﬁdence among people bycontributing to the realization

ascertaining exactly what

deepening communicationof an affluent and culturally

their needs are and providing

with all of our stakeholders

rich society and fulfillingthem with high-quality

and acting autonomously in

our social responsibilities

special steel products.

conformity with social norms.

through our "high-quality
special steel manufacturing."2018 Ministry of the Environment
IS02600002

Top Message
In an environment of significant change in the social

and industrial structure, we will implement the corporate
philosophy that we have maintained to date ofConfidence-based Management to ensure that we not

only achieve sustainable growth but also contribute to therealization of a sustainable society.

highlighted in Sanyo Global Action 2019

(our 10th

Steel in March 2019, while at the same time converting

Medium-Term Business Plan that is currently being

Ovako AB of Sweden, a leading manufacturer of

In addition to the major structural changes facing

implemented), and the Group is aiming to achieve

special steel in Europe, into a wholly-owned subsidiary

the business environment surrounding the Group, thesustainable growth in human resources, technology,

of Sanyo Special Steel; and, in conjunction with this,current global economy is in a difficult situation as itand profitability through key initiatives based on

we have developed a framework that will allow us

experiences an economic slowdown due to increasing

the three basic policies of (i) establishing a robust

to respond to the global expansion of both domestic

uncertainty caused by trade issues, geopolitical

corporate structure by strengthening our businessand overseas customers and the need for high-quality

factors, and other reasons. However, we believe thatfoundations, including Sanyo Factory Renovation ;special steel products by building integrated special

in the medium-to-long term, the global economy will(ii) aiming for further technological advancements bysteel manufacturing bases in Japan, Europe, and India.

gradually expand and there will be a further increase

strengthening R&D and quality competitiveness; andIn addition, we have made employee health andin the demand for high quality, reliable special steel

safety a top priority in our business activities, creatingproducts. Moreover, despite numerous major changes

a workplace that promotes the mental and physicalin the environment in the past, the Group has always

We strengthened our business foundations andwell-being of employees and enables them to work

worked hard to accumulate the latest technology inenhanced our technological advancements throughwith enthusiasm. In recognition of this, in February

any given era, allowing us to build trust in the brandinitiatives conducted in FY2018. Specifically, we

2019 Sanyo Special Steel was granted certification

Sanyo Special Steel - the Conﬁdent Choice.

carried out work to relieve bottlenecks in Main Bar Mill

under the Ministry of Economy, Trade and Industry) has helped develop a

as scheduled in a bid to future-proof the production& Nippon Kenko Kaigi s

prosperous community and realize a society thatstructure in response to changes in the demand

Management Organization Recognition Program as

Conﬁdence-based Management as we aim not only

recycles its resources by producing high-quality special

structure, such as the shift towards demand for smaller

an outstanding management company in the field of

to achieve sustainable growth in our own operations

steel using electric arc furnace steel-making, which is adiameter and smaller lots, etc., and we also developed

employee health (commonly known as thein a rapidly changing business environment but also

method that uses scrap iron as the main raw material.

the Sanyo Ultra Reﬁning Process (which is a process

500 large enterprise category) .

(iii) promoting

Sanyo Special Steel - the Confident

Choice as a global brand.

Since our foundation in 1933, the Sanyo Special
Steel Group (theGroup

Health and Productivity

White

The Group will continue to build up confidence
among all its stakeholders through the practice of

to continue to contribute to the realization of a

We believe that building up confidence among allwith an additional progress in our eﬀorts to produce

our stakeholders is a value that the Group should

ultra-high cleanliness steel) and QCM64-HARMOTEX

The business environment surrounding the Group is

We hope that this report will provide an insight into

protect moving forward; it is something that we aim(a steel that combines the extremely high levels of

facing major social and industrial structural changes,

the activities of the Group, and we look forward toto achieve by promoting sincere, fair, and transparent

hardness and the superior toughness).

including the CASE (Connected, Autonomous, Shared,

your continued support and assistance.

sustainable society.

Overseas, we have created stable businessElectrified) revolution in the automotive sector.

Confidence-based Management,

which aims tofoundations to achieve sustainable growth andFurthermore, there has been a rapid spread in the idea

establish the Conﬁdence of Society,Conﬁdence ofincrease corporate value in the medium-to-long termof focusing on SDGs (Sustainable Development Goals)

by making Mahindra Sanyo Special Steel Pvt. Ltd. inand ESG (Environment, Society, and Governance) set

corporate management through our philosophy ofCustomers, and Conﬁdence Among People.

India (previously an equity affiliate) a consolidatedout by the United Nations as universal goals for the

pursuing

subsidiary of Sanyo Special Steel in June 2018 and bywhole international community, with companies being

sustainable growth by globalizing the Sanyo Brand isalso making Sanyo Special Steel a subsidiary of Nippon

required to contribute to a sustainable society andIn recognition of this, the idea of

03

achieve sustainable growth.

04

Aerospace

Factries,Plants, Power Stations“Steel You Can Count On”
technologies that thrive in a variety of fields

Dies for forging press,
Dies for high-quality plastics,
Casting dies, Rolls, Tolls, etc.
Tool SteelSanyo Special Steel’s “Steel You Can Count On” is incorporated and used in a variety of industrial products,
including automobiles, railroads, construction machines, electronics products, and information communication devices.
Sanyo Special Steel provides materials that offer high functionality and quality to support developmentof industry and society.

Wind power generation equipment

Bearings

Bolts, Gears, etc.

Bearing SteelEngineering SteelElectrical Cables

High alloy cables:High-strength
low thermal expansion alloy
for high voltage transmission lines

Construction
machineries

Gears, Shafts, Cylinders,
Sprockets, Swing gears, etc.

High Alloy Steel Wires

Formed &FabricatedMaterials

Formed &FabricatedMaterials

Engineering Steel

Formed &FabricatedMaterials

Bearing steel

Cutting tools, Dies, Injection
molding machine(ex. screw), etc.
Powder Metallurgy
high-speed steel

Shinkansenbullet train
Formed &FabricatedMaterials

Bearings

Bearings, Linear Motion
Bearings, Ball Screws, etc.

Driving parts, etc.

Bearing SteelBearing SteelEngineering SteelEngineering SteelStainless Steel
Metal powders for 3D printing

Tubes for refuse incineration and power generationand power generation boilers, Tubes for waste heatrecovery, Chemical plant piping

Metal powders

Stainless Steel

Extra-high-anticorrosion pipes,
Chemical plant piping,Pipes for heat exchanges, etc.

Heat-resistant thermal spray
powder for boiler pipes,
Metal powders for 3D printing

High Alloy Steel

Metal powders

Bearing Steel

Formed &FabricatedMaterials

PCs

Motor shafts for OA equipment,
Sleeves, etc.
Stainless Steel
HDDs

Mobile Phone,
Smartphone

Electro-magnetic wave absorber

Powder Metallurgy products

Metal powders

Medical Fields

Buildings

Electrical
Appliances

Parts for dental treatment
devices (hand pieces)

Bolts

Magnetic head for
HDD recorders, etc.

Stainless SteelEngineering Steel

Powder Metallurgy products

Seismic isolation systems
Bearing SteelAutomobiles

Transmission gears, Shafts, Engine parts,
Connecting rods, etc.

Roads

Base course materials,
Asphalt aggregates, etc.
Electric arc furnace slag

Engineering SteelBearings, etc.
Bearing SteelIntake/exhaust valves, etc.

Formed &FabricatedMaterials
Formed &FabricatedMaterials

RobotsHeat resistant steel
EGR cooler, Shot peening
Metal powders

Formed &FabricatedMaterials

Driving parts, etc.
Bearing SteelEngineering Steel

Industrial Machineries

Ships

Spindles, Turrets, etc.

Shafts, Bolts, etc.

Engineering SteelEngineering Steel
Propeller shafts, etc.
Stainless SteelEngine valves
Heat resistant steel
High Alloy SteelThe Group of Sanyo Special Steel's Products

Iron scrap
Bearing SteelEngineering SteelAt Sanyo Special Steel, we use electric arc furnace steel-making (whichuses iron scrap as a main raw material) to manufacture special steel,

Tool SteelTubes

to blast furnace steel-making, which makes steel from iron ore, the electric

Stainless Steel

Forged bars

energy consumption. Approximately 95% of the raw materials used byHeat resistant steel

materials recycled in-house)

High Alloy Steelcontributing to the recycling and eﬀective use of iron resources. Comparedarc furnace method has the advantage of lower CO₂ emissions and lower

Sanyo Special Steel are recycled materials such as scrap iron (including

05

Rolled bars

RecycleMetal powders

Powder Metallurgy products

Formed & Fabricated Materials

Electric arc furnace slag

06

Financial Highlights
FY2018 Overview & Forthcoming Initiatives

Consolidated Results

During the ﬁscal year under review (April 1, 2018 to March 31, 2019), there was a moderate recovery in the Japanese economy
due to a recovery in personal consumption and an increase in capital investment. Nevertheless, the future remains unclear. While
the Japanese economy is expected to continue to enjoy moderate recovery on the back of improving employment and income
conditions despite some weaknesses, there are still uncertainties in the global economy stemming from concerns over policy trends in
the United States and a downturn in emerging countries including China, among other factors. In the special steel industry, the second
half of the year saw the start of an adjustment phase for some industrial machinery such as machine tools, robots, and semiconductor
manufacturing equipment as a slump in capital investment took eﬀect; however, production volumes of special hot-rolled steels held
ﬁrm thanks to on-going, strong demand from the automotive and construction machinery sectors.

Business performance

In these circumstances, Group sales for the ﬁscal year increased by 28,332 million yen to 185,818 million yen. This was driven by
an increase in sales prices due to the application of a scrap iron surcharge system and an increase in base prices due to the rise in
the cost of raw materials and fuel, as well as the consolidation of the Indian equity aﬃliate Mahindra Sanyo Special Steel Pvt. Ltd.
(hereinafter MSSS ) as a subsidiary company of the Group.
In terms of proﬁts, while certain factors such as a rise in sales prices and a reduction in variable costs increased revenue, otherfactors meant that ordinary income fell to 9,437 million yen (down 1,221 million yen year-on-year) and ROS (return on sales - ordinary
income as a percentage of sales) fell to 5.1% (compared with 6.8% the previous year); these other factors included the rising costof raw materials and fuel, the acquisition cost recorded for Ovako shares (Note 1), and the amortization recorded for goodwill
associated with the consolidation of MSSS as a subsidiary of the Group.
Net income attributable to owners of the parent increased to 7,721 million yen (up 687 million yen year-on-year) due to the recordingof marginal gains pertaining to the staged acquisition of MSSS as a consolidated subsidiary.
An extraordinary general shareholders meeting of Sanyo Special Steel held on February 28, 2019, passed a resolution on a sharesubscription agreement for a third-party allotment to Nippon Steel Corporation ( Nippon Steel ; a company that changed its namefrom Nippon Steel and Sumitomo Metal Corporation on April 1, 2019) in connection with the Agreement on Subsidiary Conversions(Note 2) concluded on August 2, 2018, with Nippon Steel. On March 28, 2019, Sanyo Special Steel executed the third-party
allotment and became a subsidiary of Nippon Steel. At the same time, we acquired all Ovako shares from Nippon Steel and Ovako
became a wholly-owned subsidiary of Sanyo Special Steel.
(Note 1) Shares of Triako Holdco AB, the parent company with full control of Ovako AB, a special steel manufacturer with its headoﬃce based in Sweden.
(Note 2) The conversion of Sanyo Special Steel to a subsidiary of Nippon Steel and the simultaneous acquisition by Sanyo Special
Steel of all Ovako shares from Nippon Steel.
While there are expectations that the modest recovery of Japan s economy will continue, uncertainty in the global economy isincreasing due to trade issues and other factors. Moreover, with international competition in the special steel industry escalating
and prices for raw materials rising, uncertain conditions that do not allow for optimism are expected to continue in the businessenvironment surrounding the Group.
In such circumstances, despite a tough business environment with stiﬀ competition and increasing costs for raw materials andenergy, etc., we aim to achieve sustainable growth in human resources, technology, and proﬁtability by strengthening our businessfoundations through the implementation of factory renovations , etc., seeking further technological advances, and promoting the
global brand Sanyo Special Steel - the Conﬁdent Choice under our corporate philosophy of Conﬁdence-based Management asstated in the 10th Medium-Term Business Plan Sanyo Global Action 2019.
Furthermore, in cooperation with Nippon Steel and Ovako, we will maximize the potential of Sanyo Special Steel and our groupcompanies to achieve synergistic eﬀects as soon as possible.

Proﬁt Distribution Policy and Dividends
Our basic policy on profit distribution is to reward our shareholders by increasing the profits available for distribution whilestrengthening our business foundation. Concerning dividend payment, we intend to meet our shareholders expectations, primarily
by distributing profits based on periodic business performance, while giving due consideration to both the payout ratio and theamount of funds required for investment and other activities to enhance our corporate value. Dividends from surplus are based ona consolidated payout ratio of 25-30% and are paid at the end of the 2nd quarter and the end of ﬁscal year according to our proﬁt
distribution standard based on our consolidated business performance.
With net income attributable to owners of the parent at 7,721 million yen (equating to net earnings per share of 237.75 yen), thedividend per share for the full ﬁscal year under review was 69 yen (based on a pay-out ratio of 29.0%), which was paid as an interim
dividend of 45 yen per share and a ﬁnal dividend of 24 yen per share.

07

Operating income

Net Sales（Millions of Yen）

（Millions of Yen）

200,000

15,000185,818
171,495
157,485
149,148
150,000
138,680

12,18812,0009,000

100,000

11,685
10,96910,123

9,169

6,000

50,000

3,000

0

0

2014 2015 2016 2017 2018（FY）

Net income

Ordinary Income（Millions of Yen）

12,000
9,000

9,735

11,540 11,736
10,659（Millions of Yen）

8,000
9,437

6,000

6,000

4,000

3,000

2,000

0

2014 2015 2016 2017 2018（FY）

02014 2015 2016 2017 2018（FY）

7,416
6,547

7,784

7,034

7,721

2014 2015 2016 2017 2018 （FY）

Financial condition
Net assets

Total assets（Millions of Yen）

200,000（Millions of Yen）

200,200

160,000

128,959
113,140
123,143
120,000 113,644

80,000374,246

300,000
179,898
209,146
202,243
183,444
200,000

100,000

40,0000400,0002014 2015 2016 2017 2018（FY）

02014 2015 2016 2017 2018 （FY）

08

◆Metal Powder

Segment Data
Metal Powder
2%

Formed andFabricatedMaterials
10%

Other1%
Specialty
Steel
87%

Consolidated（Millions of Yen）
Net Sales

FY2018Net Sales

Operating income

Specialty Steel

170,234※

8,452

Metal Powder

4,897※

683

Formed andFabricated Materials
Other

19,983※

879

1,641

42

Adjustments▲10,938

65

Total

185,818

10,123* Net sales include internal sales and transfers conducted between segments◆Special SteelIn the Specialty Steel business, we manufacture and sell various special steel products including bearing steel, which boasts a
top share in total domestic production, as well as engineering steel, stainless steel, heat resistant steel, and tool steel. Net sales
for FY2018 were 170,234 million yen (up 28,245 million yen year-on-year) due mainly to the eﬀect of the rise in sales prices andthe consolidation of MSSS as a subsidiary. Operating income fell to 8,452 million yen (down 777 million yen year-on-year) due,among other factors, to the rising cost of raw materials and fuel, and the amortization recorded for goodwill associated with theconsolidation of MSSS as a subsidiary of the Group; this was despite positive profit drivers such as a rise in sales prices and areduction in variable costs.

In Metal Powder, we manufacture and sell high-purity metal powders with low
impurities levels and powder metallurgy products made using our own proprietary powderconsolidation technologies. We not only provide alloy design that meets the needs of ourcustomers, but are also able to support everything from mass production to small lots forresearch and development. We provide high functionality materials required in a variety ofsituations-from the forefront of research and development to manufacturing sites.
Net sales for FY2018 increased by 2 million yen year-on-year to 4,897 million yen, mainly
due to an increase in the volume of sales for the automotive and industrial machinery
sectors, and a rise in sales prices; this was despite a fall in the volume of sales for theelectronic materials sector. Operating income fell by 242 million yen year-on-year to 683
million yen due to a fall in the volume of sales for the electronic materials sector and a risein the cost of raw materials.

4,894

Net Sales 5,000

4,897（Millions of Yen）4,000

3,000（Millions of Yen）

400

1,000

200

0

FY2017（Millions of Yen）

150,000

141,988

170,234（Millions of Yen）

100,000

10,000

9,229

8,000

683

FY2017FY2018◆Formed & Fabricated Materials
Formed & Fabricated Materials use an integrated process to manufacture high-quality formed and fabricated materials from steel
you can count on, which is produced using our advanced clean steel technology. Our formed and fabricated materials include
cut rings produced by cutting special steel tubes with high precision, forged rings/forgedproducts/rolled products made from steel bars, and cold roll formed rings made from ringmaterials.
Net sales for FY2018 increased by 1,553 million yen year-on-year to 19,983 million
yen, mainly due to increases in sales volumes and rises in sales prices. Operating income
increased by 175 million yen year-on-year to 879 million yen, mainly due to an increase insales volumes at our Chinese subsidiary; this was despite start-up costs for the subsidiary in
Mexico.

Net Sales 25,000（Millions of Yen） 20,000

18,43019,983

8,452

Operating 1,000
800
income（Millions of Yen）

600

10,000

400

5,000

200

0

6,000

FY20170

FY2018879
704

FY2017FY20184,000

50,0000Operatingincome0

FY2018

925

600

2,000

15,000Net Sales 200,000

Operating 1,000
800
income2,000
FY2017FY20180

FY2017FY2018◆Others
This segment includes information processing services conducted through subsidiaries. Net sales for FY2018 increased by 111
million yen year-on-year to 1,641 million yen, while operating income was up 15 million yen year-on-year to 42 million yen.

Net Sales 2,000（Millions of Yen）

1,500

1,530

1,641

（Millions of Yen）

1,000

09

50

42

40
30

27

20

500
0

Operatingincome10FY2017FY20180

FY2017FY201810

10th Medium-Term Business Plan

Sanyo Global Action 2019

• Further pursue technological superiority by enhancing R&D and quality competitiveness- Pursue sustainable growth by building a global brand of Sanyo -(1) Enhance quality competitiveness, mainly for bearing steel

Strategy of the 10th Medium-Term Business Plan
Based on our management principle of Conﬁdence-based Management, we will ﬁrmly establish a strong corporate structure that will enable us tosecure stable earnings by executing Sanyo Factory Renovation and strengthening our business foundation. In addition, we aim to further pursue
technological superiority and to promote "Sanyo Special Steel - the Conﬁdent Choice" to a global brand, with the aim of achieving sustainable growth(human resources, technologies, and proﬁtability) even in a challenging environment of intensifying global competition in the special steel industry, andrising raw material and energy prices.

Establish a strong corporate

Further pursue technological

Promotethe business foundation

quality competitivenessto a global brandstructure by strengthening

superiority by enhancing R&D and

Pursue Sustainable
GrowthSanyo Special

Steel - the Conﬁdent Choice

Human resources / Technologies / Proﬁtability■ Maintain Sanyo Special Steel s internal quality superiority basedon its core

Premium Cleanliness Steel Manufacturing Technology■ Develop external appearance quality through process improvements
and a higher level of quality assurance(2) Promote R&D■ R&D spending 1.1-fold increase from 9th medium term (4.6 → 5.0 billion yen)
■ Clarify functions of basic research and product development■ Strengthen medium- and long-term R&D planning functions

Priority Measures• Establish a strong corporate structure by strengthening the business foundation(1) Strengthen competitiveness by executing Sanyo Factory Renovation■ Eliminate bottlenecks at No. 2 Bar Mill, etc.
■ Streamline factory logistics and directly link production processes■ Promote automation and improve eﬃciency through AI and IoT, etc.

Strengthen cost &delivery competitiveness(2) Secure stable earnings• Promote Sanyo Special Steel-the Conﬁdent Choice(1) Promote global branding measures
Enhance the source ofour brand power(QCDD* power)

Achieve stable earnings■ Capture the growing overseas demand for special steel■ Improve the sales mix•Special Materials: No.2 Metal Powder Plant■ Non-Steel Products business sales: 1.5-fold growth vs. FY2016■ Strengthen the roles of our overseas bases■ Establish a 6-center structure worldwide
for the Formed and Fabricated Materials business■ Build a global supply chain■ Strengthen the technical planning function and accelerate technicalexchanges with customers■ Enhance communication of information in Japan and overseas... Actively expand PR and IR activities, etc.

ii) Non-steel Products business•Formed and Fabricated Materials: Local subsidiaries in Thailand(SSSP) and Mexico(SMM)

to a global brandGlobalbranding(2) Promote initiatives aimed at further improvements in recognitionmaterial/energy price hike through cost reductions

and sales price increase■ Establish investment decided in 9th medium-term and capture growth market

Create products with highreliability and new technology
rapidly and continually* Quality (Quality), Cost (cost)・, Delivery (delivery on time) Development (R&D)

i) Steel Products business■ Absorb the

Aim to become No. 1
globally in internal quality
and external appearance quality

Improve stability ofearnings through expansion

Worldwide brandpenetration• Investments
Planning for 50 billion yen in 3 years (x1.4 compared to 9th Medium-Term)■ Strategic investment 25 billion yen/3 years(3) Enhance the management foundationi) Promote agile, transparent management...

Sanyo Factory Renovation , M&A, etc.

■ General investment 25 billion yen/3 years··· Investment in cost reductions such as energy savings, labor savings, quality, updating of aging facilities, etc.

■ Firmly establish the executive oﬃcer system(June 2017 onwards)■ Continuously focus on safety initiatives, disaster prevention, environmental conservation and compliance structureii) Secure and train human resources■ Strengthen the regular recruitment program for internationalization and transfer of expertise(2.7-fold increase from the 9th medium-term period)■ Improve re-hiring scheme and continue to promote diversity management including support for women in the workplace, etc.
■ Implement work style reforms to achieve work-life balanceiii) Enhance shareholder return■ Set 25% as the lower limit for the consolidated dividend payout ratio (currently 20%)
■ Aim for a consolidated dividend payout ratio of 30% in FY201911

12

Features

Sanyo Global Action

Sanyo Special Steel global business sites- Expanding Sanyo Special Steel Worldwide
The global steel market is facing social and industrial structural changes, including a declining population in
Japan, a move towards global protectionism, an increasing trend for customers to procure materials locally as they
expand globally, the CASE (Connected, Autonomous, Shared, Electriﬁed) revolution in the automotive industry, an
increase in the use of renewable energy, and the use of robots in manufacturing and service industries.
Given these circumstances, we expect to see strong growth in the future for special steel products, which areused as materials for key components in industry; and along with this, we believe there will be further increases
in the need for special steel products of high quality. Meanwhile, as domestic and international competition
intensiﬁes in the special steel market, we need to enhance our competitiveness in terms of technology, productdevelopment, and cost.
We have been promoting Sanyo Special Steel - the Conﬁdent Choice as a global brand under our corporate
philosophy of Conﬁdence-based Management as stated in the 10th Medium-Term Business Plan Sanyo Global
Action 2019.
We have been building integrated bases for the manufacture of special steel in Japan, Europe, andIndia with the consolidation of the Indian special steel manufacturer Mahindra Sanyo Special Steel
Pvt. Ltd. (previously an equity aﬃliate) as a subsidiary of Sanyo Special Steel in June 2018. In
addition to this, Sanyo Special Steel became a subsidiary of Nippon Steel in March 2019
and, at the same time, Ovako AB of Sweden, a leading manufacturer of special steelinEurope, became a wholly-owned subsidiary of Sanyo Special Steel. In Formed
and Fabricated Materials, we have also added a six-country network toprovide a framework to enhance our ability to respond to the global
developments and increasingly sophisticated/diverse needsofour customers, both within Japan and overseas.

Expanding our global networkin the growing, Indian market

Seeking synergies through cooperation
between the three companies

As a member of the Nippon Steel Group, Sanyo Special Steel is not only building stable

With the demand for special steel in India set to expand signiﬁcantly from the current estimated 4 million tons per

business foundations for sustainable growth, but we have also secured a ﬁrm foothold

NipponSteelyear to around 10 million tons per year by 2030, we expect to see a further increase in our customers (includingin Europe, one of the world s leading markets, through the acquisition of Ovako as awholly-owned subsidiary.

Japanese companies) need for local procurement and requirement for quality products.
So far, Sanyo Special Steel has been providing technical support to MSSS to improve quality, reduce costs, andincrease productivity, etc. However, moving forward we intend to go beyond technical support and provide a boost
to the company across the board in areas such as production, quality, and sales in order to expand our global

Moving forward, we will seek synergies in a three-company partnership, including the
SanyoSpecial
Steel

Ovako

integration of leading, world-class technology in the manufacture of advanced clean steel
with Ovako and the reciprocal use of sales, distribution, and logistics networks; and in sodoing, we aim to further enhance our competitiveness in the global market and improve

network in the growing Indian market and further promote Sanyo Special Steel - the Conﬁdent Choice as a global

corporate value.

brand.

Seeking eﬃcient
production
for the entire Group

Reductionsin procurement costs

・ Construction of optimal production

・ Reciprocal use of sales/distribution

・ Improve eﬃciencies in the transport of・ Sharing operating know-how

・ Enhanced ability to provide proposals

・ Centralized purchasingsystems for each geographical region

・ Reciprocal use of overseas production
sites logistics networks

13

Enhancing ability
to respondto customers

networks

through joint R&D

raw materials

14

Topics
Development of Sanyo Ultra Reﬁning Process (SURP)
We have developed the Sanyo Ultra Refining Process (SURP), marking

SURP steel

additional progress in Sanyo New Reﬁning Process (SNRP).

Certiﬁed as an outstanding management company in the ﬁeld

Ordinary steel

SNRP is a process that allows the mass production of high-quality ultra-

In February 2019, Sanyo Special Steel was selected

high-cleanliness steel. It not only reduces the volume of inclusions, it also

by the Ministry of Economy, Trade and Industry andcontrols (reduces) the size of large inclusions.

Nippon Kenko Kaigi for certiﬁcation as an outstanding

We found new ways to reduce the frequency of large inclusions bytrace components).
We have developed SURP, helping to reduce the frequency of large nonmetallic inclusions by adding to the inclusioncontrol technology of SNRP.
We expect that applying this technology to bearings and other rotatingparts for high-speed rail train components, wind turbines, and industrial

management company in the field of employee healthfor 2019 (large enterprise category).

Reduced variate

means of controlling their composition (type, quantity, and fraction of their

We were assessed as having made employee healthand safety a top priority in our business activities andpromoting a workplace that ensures the mental and

SURP steel
Ordinary steel

physical well-being of employees and enables them towork in an energetic manner.

equipment, which involve heavy loads that require stable operation inMoving forward, Sanyo Special Steel will continue toextreme, severe lubrication environments enables to respond to needs forhigher reliability and maintenance-free operation.

promote the creation of safe and healthy workplaces,
Fig.Example of extreme value statisticalresult of hardening steel

In March 2019, Sanyo Special Steel was selected as one of theperformance properties.

We discovered the optimum alloy composition to control crystallizationin coarse carbides by using outstanding precipitated carbides control
technology, therefore we realized the high hardness and superior toughness.
Features of QCM64-HARMOTEX

general purpose cold-work tool steel→Contributing to save on the manufacturing costs for cold-work tools*1 HRC …It is a unit that expresses the hardness of steel on the Rockwell
hardness scale. The hardness of annealed material is typicallyaround 20 HRC.
*2 High-speed Steel …It is a grade of steel that was originally made fortools used to cut steel̶ a grade that exhibits a highlevel of hardness and outstanding wear resistance.

Helps to improve productivity
and quality of ﬁnished goods
and reduce die costs

the Mayor of Himeji.

training and job promotions for female employees, improvements in thework environment, and similar initiatives, and we received an award fromIn 2007, we started initiatives to support the active participation of
women, and the company has encouraged the creation of work-friendly
environments by developing programs, implementing training schemes,
and similar initiatives.

P/M high speed steels

Moving forward, Sanyo Special Steel intends to continue to support theactive participation of women and provide a company where both men
and women can work with enthusiasm.

Hardness2）
Outstanding performance under the heat treatment conditions ascorporations in Himeji City actively engaged in promoting women throughstrength, wear resistancequality of ﬁnished products

Even equal high hardness ofhigh-speed steel and superior
toughness

Good

1）
High hardness and superior toughness that are far excellent than the JIS→Contributing to improve the service life of cold-work tools and theand aiming to be a company that inspires yet more

Receipt of the Award for Corporations Actively Promoting Womenfrom Himeji City

Class and superior toughness, to meet the demand for cold-work tool

SKD11

contributing to the realization of a prosperous society
conﬁdence.

We developed QCM64-HARMOTEX ,a steel that combines
the high hardness of 64 HRC
steel with higherof employee health for 2019 (large enterprise category)

8%Cr steel

Toughnessfatigue strength, cracking resistance

We have implemented training for female employees to promote active
participation by women.

Good

Micro-structure
Comparison

Coarse
QCM64-HARMOTEXJIS SKD11* Training to support active participation of women in technical job roles

15

16

CSR-conscious management - the aimof the Sanyo Special Steel Group

CSR-conscious management is the aim of the Sanyo Special Steel Group, and its purpose is to realize sustainablegrowth and contribute to a sustainable society by building relationships of trust with all stakeholders through the practiceof Conﬁdence-based Management, our corporate philosophy. The practice of Conﬁdence-based Management canbe rephrased as being a completely honest company. Companies are members of society and they cannot develop
without conﬁdence from their stakeholders. The Sanyo Special Steel Group contributes to the realization of a sustainable
society by honestly and frankly practicing Conﬁdence-based Management.

Customers

ConﬁdencedeFY2018 CSR Management Initiatives
Stakeholder

uni

tie s

Business partners

mm

de
nﬁ

CustomerscoShareholders &investorsplLocal communities

L

Receipt of the Technical Development Award from the Japan Institute ofsteel

Metals and Materials for the development steel QDX-HARMOTEX.
Development of QCM64-HARMOTEX cold-work tool steel

In the global economy, people, goods, and capital shift on a global scale and one country s economiccrisis is instantly linked to another; similarly, in this age, global issues such as climate change and natural
disasters also have global repercussions and severe impact. Given this situation, the 2030 Agenda for
Sustainable Development was adopted by the UN in September 2015 with universal objectives for theentire international community to work towards̶both developed and developing countries alike. In the2030 Agenda, 17 goals and 169 targets were listed as Sustainable Development Goals (SDGs). The
relationship between our Group s key business activities and the SDGs is as follows.

Implementation of a supplier award

Sustainable procurement activities

Appropriate disclosure of ﬁnancial information

Issue of annual report

Promotion of prompt and transparent management

Plant tours for individual shareholders

Communication with shareholders and investors

Video of ﬁnancial results brieﬁng distributed on Web page

Regional revitalization both in Japan andCultural lectures

Support activities for volunteer/cultural

Plant tours held for elementary school pupils

One day track & ﬁeld sessions

Clean up activities in the area around the head oﬃce plant

promotions

Development of work-friendly environments

Implementation of no overtime days

Eradication of occupational accidents

Enhancements to the safety experience center

Training for international personnel

Improvement of disaster prevention awarenessproducts and technologies

Language training for new employees in the US
Implementation of disaster prevention drills
Switch to LED lighting

Development of environmentally friendly

Environment (the planet)

17steel (SURP - Sanyo Ultra Reﬁning Process)Promotion of technology and research on

overseas

E m plo ye es

The relationship between ourGroup s key business activities
and the SDGs

Development of a process for manufacturing ultra-high-cleanliness

Sustainable eﬀorts to improve quality

Employees

Sanyo Special Steeland SDGs

Results of key CSR activities in FY2018

Presentations at expositions in Japan and overseas

Fair and equitable tradingaleConﬁdence

Workplaces andworking conditions
that encourage
the will to work

Missions to be fulﬁlled
Stable supply of high-quality products

oc

th

)

Co

t(

g
cin n
du rdeRe buteth the men
on viron
en

en

et

nc
e

e

on m

nc

de

nﬁ

Co
to ntrib
ac regi utin
tiv ong
itie als&nﬁSanyo Special
Steel GroupCo

E n viran

Sustainablegrowth of
Sanyo Special
Steel

Co

Ap
div prop
dis iden riate
inf clos ds/
orma ure o
tio f
n

de

Co

The practiceof Conﬁdence-based
Management

ra

Share
hol
de
rs

ir t

Fa

nc

e

in
ve
s

High-quality
products

s
ner
art
sp
es
sin
e
nc
de
Bu
nﬁ

rs
to

Realization ofa sustainable
society

Use of inverters in on-site water supply pumps

Eﬀorts towards environmental preservation

Use of brick waste as heat-resistance raw material
Updating large fans with high-eﬃciency fans

SDGs
Goals
Group
Activities

Development andstable supply ofhighly-functional
special steel
products

Health and safety
activities
Development of
employees skills
Welfare scheme

Support for theactive participationof women

Utilization of scrap
raw material
Recycling of byproducts

Promotion of energy saving
Reductions in CO₂ emissions
Modal shift
Increase the ratio oftransportation made by ship

Prevention of waterpollution
Re-use of waste
water

Reductions in theemission of air pollutants
Development of green
spaces within factory sites
Chemical substance controls

18Our Group contributes to the creation of a sustainable society by ensuring that each and every employee is always awareof coexisting with society and fulfills his/her responsibilities as a member of society.
Moving forward, the Group will also practice its corporate philosophy of Confidence-based Management as we aim to
inspire yet more confidence in all our stakeholders. Here we show some results from our activities in FY2018.

Stakeholder Conﬁdence
2018
Apr.

Initiatives for shareholders, suppliers and customers

Announcement offinancial results for
FY2017 and press
conference
Exhibits presented
at Indian toolsteel exhibition
Die & Mold
India International
Exhibition

2019
May

Jun.

Jul.

Financial results
briefing for business
partners andshareholders

Exhibits presented
at the 5th Highlyfunctional Metal
Exposition

Sep.

Oct.
Announcementof 2Q earnings
results

Announcement of 1Q
earnings results
Exhibits presented
at the Taiwan
International 3D
Printing Show 2018
(Taipei)

Nov.
Financial results briefing and plant
tours for business partners andshareholders

Dec.

Jan.

Exhibits presented at the 3D
printer exhibition Formnext2018(Germany)

Feb.
Extraordinary
Meeting of
Shareholders
Exhibitspresented atthe 3D printerexhibition TCT+Japan2019

Exhibitspresented at the
5th Highlyfunctional Metal
Exposition

GeneralMeeting of
Shareholders

Mar.
Plant tours
for individual
shareholders

Announcement of
3Q earnings results

Ceremony
for thepresentationof supplierawards held

Initiatives for global society and the environment

Provision of practicesteel materials for
Himeji Technical HighSchoolCultural lectureorganized by the
Sanyo Special Steel
Cultural Promotion
Foundation (Lecturer:
Mr. Kawaguchi,
Project Manager
of Hayabusa, anasteroid probe, at
the Japan Aerospace
Exploration Agency(JAXA))

Special lecture by
Managing Director
Yanagimoto at
Waseda University
under theSpecial Lectures
by Corporate
Executives
sponsored by theIron and SteelInstitute of Japan.

Acceptance ofinternships
Blood donation event(the first of the year)
Donation ofwheelchairs by thelabor union to our
Employees Hall andother welfare facilities
for senior citizens

Sponsorship for women ssoccer matches in theNadeshiko League(Second Division)

Invitation toa plant tour
extended to 5th
grade pupils
from Himeji
Municipal Tegara
Elementary
School2019 New Year
Concert organizedby the SanyoSpecial Steel
Cultural Promotion
Foundation

Invitation to a plant tour extended
to 5th grade pupils from Himeji

Municipal Tsuda, Takahama, andShikama Elementary Schools

Blood donation event (the second of
the year)

Blood donation event(the third of the year)
One-day Track & Field
workshop organizedby the Sanyo Special
Steel Cultural
Promotion Foundation

Participation by the Athletics Clubin a marathon contest at Himeji

Municipal Tegara Elementary School

Presentation Ceremony for Donation

Pledges held for the book-gifting
scheme for inner-city elementary

schools run by the Sanyo Special

Labor management
seminarSteel Cultural Promotion Foundation.
Activities to beautify the local area

Disaster prevention drills at plants
Disaster drills for
major earthquakes

Initiatives for employees

19

Aug.

Disaster drills for major
earthquakes

Creation of acorporate ethics
slogan of themonth andcompany-wide
distribution

Quality lectures

Certified as an
outstanding
managementcompany inthe field of
employeehealth 2019

Compliancelectures

Receipt of the Award
for Corporations
Actively Promoting
Women from Himeji
City

Safety lectures

Collaborative industry/
academia lectures

Creation of a quality slogan andcompany-wide distribution
Training in Security Export
Controls
Company-wide competition
to demonstrate skills in
crane handling and slinging
Disaster prevention
drills at plants

Mental healthlectures

Plant tours for thefamilies of new
employees taking up
engineering positions
in FY201820

Conﬁdence with customers
Quality

Understanding and reﬂecting customer needs

Quality assurance is about creating a process that allows us to accurately grasp the needs of customers and provide a reliablesupply of products that meet those needs, and is directly linked to our corporate philosophy of Conﬁdence-based Management.
The Group has established a quality management system based on ISO9001:2015, and we promote quality control activities thatcreate product quality by integrating our sales division, engineering division, production division, and quality assurance division toensure that we satisfy product standards such as JIS and various overseas standards. Furthermore, quality assurance is not just about
controlling product quality; it also about ensuring that the quality management system, which is a key part of our corporate structure,
can respond to environmental changes such as globalization and changing customer needs, and also address the need to make
improvements to realize a more eﬃcient structure. The Group aims to continue to be an enterprise that enjoys sustainable growth byplacing emphasis not only on product quality controls but also on maintaining and improving the quality management system, whichforms the cornerstone of the Group s quality assurance system.。

Quality Assurance System
The Quality Assurance Department plays a central role in thequality management system maintained and managed by SanyoSpecial Steel, which forms the cornerstone of our quality assurance
system. The process for product quality control is developed
through collaboration between various divisions. The Sales Division
gains an understanding of customer needs, the Engineering Division
then reﬂects these requirements in the manufacturing designs, and
the Production Division creates the final product based on these
designs. In addition, Sanyo Special Steel continues to work toprovide products that inspire ever-more conﬁdence, using its Quality
Assurance Department (an independent department responsible
for all aspects of quality assurance) to provide checks and balances
in a bid to optimize and enhance quality assurance functions. The
Quality Assurance Committee meets regularly and is chaired by the
Director in Charge of Quality Assurance. The Committee discusses
basic policy and plans concerning quality assurance for the ﬁscal
year and implements improvement activities such as systematic
improvements in key issues, prevention of quality complaints,enhancement of quality assurance, and improvements incustomer satisfaction levels.

Quality Assurance Initiatives
Under ISO9001:2015, individual organizations need to conduct operational risk
assessments to address new requirements for risk and opportunity initiatives. Basedon issues at Sanyo Special Steel that have been identiﬁed through these assessments,
we have been rolling-out a medium-to-long term PDCA (Plan-Do-Check-Act) plan in abid to upgrade our quality assurance. Speciﬁcally, we are working to improve our quality
management system by continuously updating our quality manuals, implementing quality
patrols, and sharing information between organizations through internal quality audits.
In addition, we hold lectures on quality issues in November, which is National Quality
Month, to promote activities aimed at raising employee awareness of quality.

21

Once a year, we survey our customers to have them assess
us on QCDD (Quality, Cost, Delivery, Development). We
analyze the results and extract any points with low scores for
improvement, leading to even higher customer satisfaction.
Furthermore, in order to understand the needs of customers
in a timely manner, we hold meetings to exchange technicalideas with customers and we also take part in exhibitions,both in Japan and overseas. We not only present detailed
information on the products and new technologies we have developed, but we also collectinformation on customers latest needs, which is then used to develop and improve our products.

Promotion of skill transfer activities
On April 1, 2015, the Skills Transfer Group was established. This Group specializes in the transfer of technology and skills and is
involved in the planned, systematic training of employees who will succeed to the relevant roles.
FY2019 is the ﬁnal year of the three-year activity plan established in FY2017, and we have been making steady progress towardachieving the plan s activity targets through on-going initiatives that include one-on-one training (pairing up employees imparting theskills with those learning them), the creation of training materials, and the enhancement of award programs to improve motivation.
In addition, as of this ﬁscal year, we have not only been investigating (and planning countermeasures for) the causes of suspensionsin production and equipment stoppages from the perspective of skill transfers, but we have also started activities to track the overall
progress of measures to prevent recurrence and follow them to completion; and, in light of this, the role played by skill transfer
activities is becoming increasingly important.

Promotion of TPM (Total Productive Maintenance) activities
The entire production division is working on TPM activities with the aim ofthoroughly eliminating losses and waste due to equipment breakdowns andproblems, increasing production efficiency, and providing a reliable supply of
products.
In terms of activities, we have not only set up the TPM School as a place toprovide training on basic knowledge about equipment and machinery to develop
human resources with a good understanding of the equipment, but we are also
creating common-interest groups for individual work categories on topics suchas quality improvement, productivity improvement, safety, and cost to allow us
to carry out improvements every day. By the end of August this ﬁscal year, 97
people had attended the TPM School, with total attendance at 1,800 since the
School started, to acquire the basic skills and knowledge useful for autonomous
maintenance. In addition to this, the outcomes of improvement activities areannounced at in-house TPM contests held four times a year in a bid to enhance TPM activities.
Moreover, we are conducting IoT application training at the TPM School and promoting the introduction of IoT at manufacturing
sites in order to further improving productivity and stabilize operations.

22

Conﬁdence with supplier
Procurement

Implementation of a supplier awards (to strengthen partnerships)

The Group promotes procurement activities based on its Basic Procurement Policy, ensures compliance with laws and social
norms, conducts fair and equitable transactions widely, with an open-door policy regardless of whether it be in Japan or overseas,and promotes environmentally-friendly procurement activities with our suppliers. These days we are required to contribute to thesustainability of society in various forms as part of our corporate social responsibility. The Group has identiﬁed principles for sustainableprocurement such as accountability, transparency, respect for human rights, and ethical behavior in the procurement of raw materials
and services, and these principles are reﬂected in our procurement decisions. In addition, we strive to maintain and improve mutual
understanding and trust with our suppliers as we aim for mutual development as business partners; and through stronger partnerships,
we endeavor to realize sustainable procurement that will contribute to the sustainability of business operations for all our suppliers.

Sanyo Special Steel believes that building good trading relationships with suppliers is essential for sustainable procurement andvalues its partnerships with suppliers. As part of this, we have set up an award scheme for suppliers. Under the supplier award
scheme, we comprehensively evaluate a number of factors to select suppliers who have attained outstanding achievements andpresent them with an award. The scheme covers raw materials, various other materials, maintenance, and outsourcing services
supplied to each division, and the factors used in evaluations include the quality, cost competitiveness, delivery deadline management,
business status of the supplier, environmental measures taken, and service provided with regard to transactions carried out with
Sanyo Special Steel over a ﬁxed period of time. On June 20, 2019, we held the second Supplier Awards Ceremony and awards
were presented to six companies that had made outstanding achievements.

■ Basic procurement policies
In our procurement activities, Sanyo Special Steel complies with all relevant laws, conducts an open-door policy acrossthe board, regardless of whether in Japan or overseas, and conducts fair and equitable transactions as we strive to build
partnerships with our suppliers. We also promote environmentally-friendly procurement activities.
1 ． Compliance with laws, regulations, and social norms
In addition to complying with all relevant laws and regulations, as well as social norms, and acting in good faith,
we manage any information obtained in the course of a transaction in a proper manner. We will also ensure that any
relationships with anti-social forces posing a threat to the order and security of civil society are not allowed to continue.
2 ． Fair and equitable trading
Regardless of whether in Japan or overseas, Sanyo Special Steel conducts an open-door policy across the board,
providing all suppliers with the opportunity to participate and conducting transactions based on economic rationale.
3 ． Building partnerships
Sanyo Special Steel conducts transactions with all its suppliers on a fair and equal basis as we strive to maintain andimprove mutual understanding and trust and aim for mutual development as business partners.
4 ． Promotion of environmentally-friendly procurement activities
In collaboration with our suppliers, we are building a system that ensures we do not purchase raw materials, othermaterials, or machine parts that contain hazardous chemicals.

Responsible procurement
Initiatives for the construction of a reliable
procurement framework
Sanyo Special Steel factories are usually in production 24 hours
a day. Consequently, with the collaboration of our suppliers, weuse a 24-hour system to take delivery of scrap iron (our main
raw material). We also procure the required amounts of ferroalloys and supplementary material when needed. In anticipationof the risk of disruptions to supplies due to disasters and otherfactors, we try to gain an understanding of production conditions,production locations, delivery routes, and other information forour key procurement items through initiatives such as visiting
our suppliers factories. We also regularly share information on
procurement items with suppliers, and we have establisheda sustainable production system for times of emergency bysecuring prompt replacements in the event of an emergency andby holding an appropriate amount of stock on our premises.

23

Procurement of ferro-alloys considered
to be conﬂict minerals
Conflict minerals indicate four minerals mined in the
Democratic Republic of Congo (DRC) and its neighboring
countries; these are tin, tantalum, tungsten, and gold, and they
are referred to as 3TG (from their initials). There are concernsthat some of the profits from the trade in 3TG are used asa source of funding for militia groups, contributing to humanrights violations and conflict. While we purchase tantalum
and tungsten needed in the manufacture of special steel, we
check through our suppliers that any purchases are DRC
conﬂict-free (i.e. not used to fund militia groups.) In addition,
if customers ask whether our products are DRC conﬂict-free,then we issue a statement declaring them to be so using theConﬂict Mineral Report Template.

DRC countries

3TG

Tin
Tantalum
Ｔungsten

G old

24

Conﬁdence with employees
To ensure sustainable growth of a company, human resource development and the creation of a work-friendly environment thattakes health and safety into account are important. In order to create a work-friendly environment that takes health and safety into
account, we are working to prevent occupational accidents, provide mental health care, and promote a work-life balance, among
other initiatives, to develop an environment where various human resources can play an active part. In addition, and most importantly,
as a manufacturing company, we are committed to creating a safe workplace.
Furthermore, the Group needs human resources who can think autonomously, regulating themselves and thinking and acting
independently. The requirements for this are self-direction and the spirit to take on a challenge. In order to realize this, under ourbasic policy of developing employees and make full use of their potential, we not only oﬀer various training in accordance with jobrole and career, but we have also adopted a personnel system that encourages a strong desire for self-growth and the achievementof goals in our employees and allows them to always challenge high-level problems.

Human resource development
Personnel system:
Establishing work tasks and training themes through dialog

During personnel appraisals at the company, we naturally
discuss ﬁnal outcomes, but in addition, we also place emphasis
on questions such as Did you set high goals and strive toachieve them? or Did you carry out a definitive process
to achieve your goals? in the appraisal in order to foster
self-direction and the spirit to take on a challenge in our
employees. Employees work tasks and topics are establishedthrough dialogue with their line manager, which allows them
to clarify goals and make efforts to improve their skills. Thisapproach also leads to a strengthening of the relationship oftrust between managers and their staﬀ. At Sanyo Special Steel,
we also support the self-realization of each individual through aself-assessment system in which individual employees can state
their own aspirations regarding job and workplace options
through career design talks and interviews for junior employees.

Training for international personnel
In response to the globalization of the business environment,
we are accelerating our training of human resources capableof performing on the international stage. We are carrying out
various initiatives, including the dispatch of young employees
to overseas affiliates, systematic foreign language training
for new employees, and the dispatch of selected candidates
to overseas universities, graduate schools, and research
institutes to study or on temporary assignment. In FY2018,
we started short-term, language study programs in abroad forselected employees. In addition to eﬀorts to improve language
proﬁciency, we will enhance our training programs on themes
for acquiring international sensitivity through experience andpromote the development of international human resources.

Creating a work-friendly environment
Active participation of women
We have set a goal to raise the ratio of female staff to
25% by the end of March 2028, utilizing them as a valuableasset. To achieve this goal, we have increased the areas
where women play an active role by systematically recruiting
female employees and expanding the range of their work,
while introducing a system that allows women to continue
working by alleviating pressure on them during life events byoffering childcare leave, childcare allowances, and shorter
working hours. In addition, we have been conducting inhouse training to promote awareness of female employees
and create an organizational culture that makes it easier forthem to play active roles. In 2017 we conducted Career
Training for Women, a training program to raise awareness ofcareer development for women aimed at female employees
in non-managerial general and technical job roles, as well as asupporting program Management Training for Line Managers
aimed at reforming the attitude of line managers with female
employees.

Ratio of female staﬀ

13.9

%

（As of March 31, 2019）
Woman

Pregnancy / Birth / Childcare System Timeline■ FY2018 training pick-up

pregnancybirth

1 year old

2 year old

3 year old

End of 4 year old
year

male
3rd gradeelementary
schoolMan and woman
End ofyear

6rd gradeelementary
schoolEnd ofyear■ Basic training for managers
Since FY2018, we have been conducting basic training for those in managerial positions of GroupManager/Section Manager and above on the basic ﬁnancial and product knowledge that they shouldhave. By enhancing their understanding of areas in which they have little daily involvement, we aim todevelop managers with diverse values and the right judgment to support them. We believe that thistype of training to expand their scope of knowledge is essential for the growth of the company, and wewill continue to work on it.

■ Follow-up training for new employees
In order to supplement on-the-job training (OJT), we conduct oﬀ-the-job training (Oﬀ-JT) for diﬀerent
grades and age-groups. In 2018, we started to conduct follow-up training for new employees. The

Maternity and postpartum leave (early pregnancy to 8 weeks after childbirth)
Leave for maternity check-ups (special leave)
Protection measures for pregnant employees(working considerations such as reassignment and shorter working times)
Maternity leave (special leave; up to 3 days)
Child-rearing break (up to the end of the fiscal year when the child turns 3)
Child-care time (30 minutes at a time, up to twice a day)purpose of this training is for new employees to reﬂect on the time that they have spent with company,

Shorter working hours to allow for child-care (up to the end of the fiscal year when the child enters third grade at elementary school)

since they joined to the present, and to identify their own strengths and issues through self-diagnosis

Leave to nurse a child (limited to 5 days a year for one child, or 10 days a year for two children; reinstated annual leave or special leave)

testsleading to an improvement in future behavior and promoting growth among new employees andbetter retention rates in the workplace. Moving forward, we will continue to enhance training to raiseskills in the workplace.

25

Breaks for pregnant employees (extended time in addition to normal breaks; up to one hour a day, up to twice a day)

Exemption from/restrictions to overtime hours (up to 24 hours a month, or 150 hours per year)
Exemption from late night shifts

26

Conﬁdence with employees

Achieving a work-life balance

Extend employment program

Employment of Disabled Persons

The Work-Style Reform Related Bill passed by the National
Diet in 2018 has been being rolled out since April 2019.
Work-style reforms such as the prohibition of long working
hours, properly managed working hours, and the obligation for
employees to take a certain number of annual leave days havebecome increasingly important in terms of achieving a worklife balance. Sanyo Special Steel promotes Wednesdays as noovertime days and promotes increased productivity in a bid to
reduce overtime hours, as well as encouraging employees toimprove the rate of paid leave taken. In terms of the amount of
paid leave taken in particular, the ﬁgure at Sanyo Special Steelhas already topped 60% (with a result of 64.5% in FY2018)
compared to the national average of 51.1%; and we areworking to achieve the target of 70% to be taken by 2020 as
set by the Ministry of Health, Labor and Welfare. Furthermore,
as well as encouraging employees to take blocks of paid leaveor incremental leave and establishing a system that exceeds
statutory requirements for maternity leave, childcare leave, andnursing care leave, etc., we are also striving to achieve a worklife balance for each and every employee by creating a work
environment and culture that makes it easier to take this leave.

Sanyo Special Steel has established a extend employment
program for employee who reaches the age of 65. Making
active use of certain older staff members who are healthy,
wanting to work, and capable of performing their jobs not onlymeans that they continue to work as a valued member of thestaff and transfer skills and techniques, but is also consistent
with the concept of diversity. As of April 1, 2019, there were
40 senior citizen partners active across various work sites.

We promote the employment of people with disabilities ina bid to achieve a society where everyone can enjoy an active
working life.
We not only promote recruitment initiatives in conjunction
with Hello Work (the Japanese government s Employment
Service Center) and special support schools, etc., but we arealso constantly making eﬀorts to improve the work environment
in both hard and soft aspects. In addition, any employee
certified as disabled after joining the company is offeredsupport to keep working, with consideration given to his/herwork content and working hours.

Rate of paid leave taken

64.5

%

（FY2018）

Promoting health-conscious management
A t S an y o Sp e cial S t e el , w e v ie w empl o y e e he al t hmanagement from a business point of view and invest in healthinitiatives based on the Industrial Safety and Health Act in orderto help revitalize the organization by improving employees
energy and productivity.Mental and physical disorders among
employees not only cause a fall in productivity but may also
lead to an outflow of human resources as employees takeleaves of absence or leave the company. Employees areprovided with statutory health examinations, metabolic tests,
health advice, and similar resources. Furthermore, we havebeen conducting on-going mandatory stress check-ups since
FY2016. The results of tests on staff members are used to
conduct an aggregated analysis, and we recommend that
employees with high levels of stress see an occupational
physician. In addition, we have a mental health help-desk,
provide treatment to help employees stop smoking, andalso provide dietary counseling among other initiatives. In
recognition of these positive initiatives, in February 2019, SanyoSpecial Steel was selected by the Ministry of Economy, Tradeand Industry and Nippon Kenko Kaigi for certification as an
outstanding management company in the field of employee
health for 2019 (large enterprise category) (commonly known

27

as the White 500 ). Moving forward, we aim to be a company
that inspires ever-more conﬁdence as we continue to prioritize
the health and safety of our employees (a major assumption of
our corporate philosophy of Conﬁdence-based Management )and promote the creation of workplaces that improve themental and physical health of our employees and allow them
to work in an energetic manner.

28

Conﬁdence with employees

Creating a safe workplace
As a manufacturing enterprise, our Group believes that safety should be aﬀorded top priority above all. Evidence of this is theway that employees greet each other with Keep Safe! to impart a sense of safety in one another. In order to put our corporate
philosophy of Corporate-based Management into practice, our goal is to achieve no accidents at all over the year under theGroup s safety activities. We believe that we need to achieve a total absence of accidents throughout the year across the entire
Group in order to build relationships of trust with various stakeholders and to achieve sustainable growth for the Group. All
employees need to work together on safety activities, and if even one person is left out, then the goal cannot be achieved. There
are no short-cuts in safety activities. Our objective is to achieve a whole year that is totally free of accidents by building up safety
activities in the Group day-by-day to create a workplace where all employees are safe and can work with peace of mind.

■ 2019 Comprehensive Health and Safety Management Policy■Basic policy To develop a workplace culture and staﬀ good at making changes to allow workplace standards, working
methods, and the work environment to be revised.

■Slogan Pause before you act, and work safely with good command of your emotions and your physical state (in how you work)■Three safety principles■Goal

Stop, Step Back, Check Hands & Feet̶then double-check that it is really safe

To achieve a total absence of accidents Occupation accidents 0■Initiatives

Accidents on the way to work 0[1] To gain an understanding of the actual working conditions at each worksite and review work methods, work
standards, and work environments( i ) Review work operations that show consistency between written work standards and work methods to discover risks and make things safer.
( i i ) Identify and optimize any work operations that show an inconsistency between written work standards and work methods.
(iii) Identify work operations with no written work standards and unclear work methods and create work standards for such operations(iv) Identify areas where there are problems in the work environment and where work operations cannot be performed safely in accordancewith written work standards and make improvements to the work environment[2] Enhance grade-based safety training in order to create a safety-conscious organization and staﬀ
( i ) Conduct safety training for senior citizen partners( i i ) Conduct safety training for staﬀ in their 5th year of service with the company(iii) Conduct safety training for those acting as team leaders(iv) Provide on-going training for each level[3] Activities unique to each section to strengthen the safety culture in that section

Occupational health and safety
activities - to ensure safety Simulated experience training center for safety
We have established a simulated experience training centerfor safety that allows us to simulate dangers in a bid toeradicate occupational accidents. In 2018, 2,655 employees
were trained at the center, and to date the total is 23,736. In
2018, we installed VR (virtual reality) equipment to give a more
realistic experience. Moving forward, we will add new training
content to allow us to consider the importance of hazard
avoidance with our members of staﬀ.

Grade-based training

Safety knowledge, risk behavior, and sensitivity to hazards,
etc. vary for each age group and grade. Consequently,
we need to conduct specialist training for each respective
grade. In addition to the grade-based training held theyear before, in 2019 we also introduced training for three
more grades of employee: senior citizen partners (workers
aged 65 and over), staﬀ in their 5th year of service with thecompany, and those acting as team leaders.

29

Key initiatives to ensure safety
Measures to prevent intrusion into areas
within equipment s scope of movement
In order to prevent accidental intrusion into equipment
operating areas while machinery is running, we have installedsafety fences, safety plug switches (that stop equipment
automatically when a door is opened), door switches that
confirm all is safe (that only allow the door to be unlocked
once equipment has completely stopped running), andindicator lights to show if the power to equipment is on oroﬀ, and we ensure that doors are locked in order to prevent
disaster being caused by human error. Moving forward, will we
continue to roll out these measures to other operating areas tohelp prevent disasters.

Disaster prevention initiatives
Risk management in emergency situations
Many employees work at our company, where we havevarious types of facilities and equipment. In addition toestablishing a regular ﬁre and disaster prevention management
system, we take various steps to prevent accidents and stop
the spread of (minimize) damage when a disaster does occur.
For example, we have developed manuals in preparation forpossible plant accidents such as ﬁres or explosions and natural
disasters such as earthquakes, and we hold regular disaster
drills, among other measures.
The basic policy for FY2018 was to aim to raise awarenessof fire and disaster prevention measures through drills andtraining and create a workplace culture and staﬀ well able torespond to disaster situations, with the following four points
set as priority items.
Enhance ﬁre and disaster prevention management
Enhance management of facilities at high risk of fire,
explosion, or leakage
Improve capacity to respond to disasters through on-goingtraining and drills for ﬁre and disaster prevention
Enhance disaster prevention measures by using specialist
disaster prevention teams.
Based on these priority management items, we have beenworking hard to enhance and strengthen disaster prevention
management systems to prepare for emergencies while, atthe same time, conducting on-going activities that emphasize
increased awareness of disaster prevention.

Initiatives to heighten disaster prevention and readiness awarenessTo further enhance disaster prevention and readinessawareness among staff, the company holds workshops eachyear for ﬁre prevention oﬃcers and disaster prevention oﬃcers
as well as workshops for supervisors and oﬃcers responsible
for hazardous materials. We are making efforts to improve
the level of control of small and minute amounts of hazardous
materials at licensed facilities by providing direct instruction
to workplace managers and those responsible for handlinghazardous materials and high-pressure gas.
At the workshop for fire and disaster prevention officers
held in September, we provided guidance on how to preventand respond to secondary disasters in the event of a disasterinvolving low concentrations of oxygen, and how to perform
cardiopulmonary resuscitation and AED (Automated ExternalDeﬁbrillator) procedures. We also publicized the location of theon-site AED.
In addition, we worked on 3S activities in licensed facilities
for hazardous materials and high-pressure gas equipment,with June and March designated as the months for improving
controls in the licensed facilities, and October the designatedmonth for improving controls on high-pressure gas equipment.
In the workshop for supervisors and officers responsible forthe security of hazardous materials, which was held in July, we
made sure that 3S activities for facilities licensed for hazardous
materials, etc. were extensively publicized, and we also
reconﬁrmed the roles that supervisors and oﬃcers responsible
for security should play. Moving forward, we will continue topromote further awareness of disaster prevention issues among
employees through these disaster prevention training programs
and control enhancement activities.
In FY2018, we held a ﬁrst-aid course for operating managers,in the first initiative of its kind. The course provided training
on critical care / cardiopulmonary resuscitation (chest
compressions / use of AED), preventing blood loss, and otherfirst-aid related topics. The course received good feed-backfrom participants, and we intend to make it a regular event in
the future.

Conducting disaster drills
The equipment and hazardous materials used at ourcompany differ from workplace to workplace. Furthermore,awareness of disaster prevention, as well as experience indisaster prevention, varies widely among employees, not tomention new employees participating in disaster prevention
training for the first time. In addition, the scale of a disastermay require coordination with aﬃliated companies. In view ofthis, when conducting disaster prevention drills, we identify
appropriate emergency situations to ensure that drills are more
speciﬁc and practical.

Typical disaster prevention drills in FY2018
In FY2018, we conducted a large number of drills, including alarge-scale earthquake disaster drill, a joint factory disaster drill
with the Shikama Fire Department, and initial ﬁreﬁghting drills
at each workplace.

•Disaster drills for major earthquakes

We conducted a major earthquake disaster drill on
September 3 based on the scenario of a huge earthquake andtsunami alert, with the epicenter in the Nankai Trough.
The purpose of the drill was to help ensure safety during amajor earthquake/tsunami and deal with the injured, as well as
to provide training on early measures to help restore business
operations. On the day of the drill, a Disaster Response
Headquarters was set up in the lecture hall at the head oﬃce
to centralize the collection of damage reports from respective
departments and data on overall damage using wirelesscommunications, as well as to collect information from branchoﬃces and branches.

•Disaster drill held at plant in conjunction with
the Shikama Fire Department

In November, we held a disaster drill at the Billet rolling plantin conjunction with the Shikama Fire Department, based on the
scenario of a ﬁre occurring at the plant. A series of drills werepracticed, including initial ﬁreﬁghting work by the occupationalﬁre-ﬁghting unit, ﬁreﬁghting activities and the rescue of injured
persons by the self-defense fire brigade and the public firebrigade, and the sending/receiving of information by theDisaster Response Headquarters. Moving forward, we willcontinue to work towards improving our response skills to help
prevent fires/disasters in the workplace by practicing thesekinds of disaster drills.

Disaster drills carriedout in FY2018

71
30

Environmental management
Sanyo Special Steel formulates an environmental policy that forms the basis of the company s environmental conservation activities.
Based on this policy, we create plans to improve environmental conservation and use environmental management systems in initiatives
to tackle global warming, recycle by-products, and help prevent environmental pollution in a bid to mitigate environmental risks.
In addition, we not only help recycle metal resources by manufacturing products using scrap iron as the main raw material, but wealso promote goods that are manufactured to help reduce the burden on the environment, using components and mold dies thathave a longer life and are smaller in size and lighter in weight.

■ Environmental policy

Plans for improvements in environmental conservation
Plans for improvements in environmental conservation and FY2018 results
TopicsMedium-term projections（2017-2019）

FY 2018 Resultst

Energy-saving andReductions in CO₂ emissions resulting from theAmount of reduction in CO₂ emissions: 2.83% vs BAU

prevention（Goal: 2.6% reduction in FY2020 compared to BAU*）

Switch to LED lighting

global warming

promotion of energy-saving measures

measures(Philosophy)

We recognize that environmental issues such as global warming; air, water, and soil contamination; and waste problems

are serious issues shared by all of humanity. As a company located in a richly endowed environment that faces Himeji
Castle, a UNESCO World Heritage Site and a national treasure of Japan in the north, and the Setonaikai National Park inthe south, we are committed to caring for the preservation of the environment and contributing to building a sustainable
society in every stage of our business activities.

Use of inverters in on-site water supply pumps

Reduction in volume of dust and sludge sent to landﬁll

Outsourcing of dust recycling to sub-contractor

products

Improve percentage of brick waste recycled

Compliance with

Compliance with regulatory standards

regulations(Policy)*Business as usual (if no special measures are taken)

Recycling of by-statutory laws and(Water Pollution Prevention Act, and the Air

Pollution Control Act, etc.)

undertake environmental management based on the following policy.
material.

2) In addition to complying with laws, regulations, and agreements related to the environment, we will make ongoingeﬀorts to enhance our environmental management framework to improve our environmental performance, and we will
responsibly control any business activities that may have an adverse impact on the environment.

Regular education and development activities

Education andfor employees

development

to reducing our impact on the environment.

4) In our environmental conservation activities, we will pay particular attention to the education of each and every
employee in environmental awareness.

5) To achieve this environmental policy, we will set environmental targets and review them at least once a year, and wewill revise these targets as necessary.

6) We will ensure that all employees are thoroughly familiar with this environmental policy through education and training,
and we will appoint the General Manager of Environmental Management as the Environmental System ManagementOﬃcer.

Acquisition of ISO14001 Certiﬁcation
We have acquired ISO14001 Certification. This is theinternational standard for environmental management systems,
and we are making efforts to establish this standard throughour annual internal audit and external audit. During the internal
audit, junior staﬀ members are also in attendance at audit sites,
which helps them understand the environmental management
system. We are also making eﬀorts to improve the system. We
also focus on on-going training to facilitate the smooth change
from one generation to another of internal auditors. In 2017,
an external audit reviewed our transition to ISO14001:2015
and assessed that our Environmental Management System wasbeing properly maintained and eﬀectively utilized, allowing us
to complete migration to the standard.

Promotion of the Environmental Management System
The Environmental Conservation Committee

Each year we hold a meeting of our Environmental
C o n s e r v a t i o n C o mmi t t e e t o e nh a n c e e n v ir o nm e n t al
management and mitigate environmental risk. The Committee
is chaired by the director in charge of the Environment
Division, and its members also include the General Managerof the Production Division and the General Manager of the31

Administration Division, and it discusses the formulation ofbasic guidelines on environmental conservation and matters on
basic initiatives. The contents of the Committee s discussions
are reported to the Corporate Policy Committee

Environmental Liaison MeetingsOnce a month, an Environmental Liaison Meeting is held toshare information on the environment; those attending include
the Chief Oﬃcer for Environmental Systems, executive oﬃcers,
and department heads. The meetings collate information on
the matters listed below and attempt to mitigate environmental
risks.
⒤ Status of responses to points identified in environmental
checksResults of assessments on compliance with statutory laws
and regulations
We share results on air and effluent measurements, etc.
prescribed by law or under agreed protocols.
Status of industrial waste treatment and results ofinspections on industrial waste disposal facilities
We share information on the status of industrial waste
treatment and the results of inspections on industrial waste
disposal facilities run by sub-contractors.
Amendments to the latest environmental laws

Attainment of regulatory standards in all items

local area (approx. 270 participants)

Registration of data into carbon footprint
participants)

employees

Increase in the number of staﬀ holding oﬃcial
environmental qualiﬁcations

Promotion ofRegular publication of environmental reports

disclosure

Cooperation with environmental agencies

information

On-going initiatives to increase the numberof staﬀ with managerial qualiﬁcations in theprevention of pollution

actively promote resource and energy savings, the recycling of byproducts and reduction of waste material, and theclimate change. Moreover, we will strive to prevent environmental pollution by developing products that will contributematerial

calculator for individual households (30activities for3) We will make efforts to reduce our impact on the environment in all stages of our business activities, and we willcontrol of pollutant and greenhouse gas emissions to contribute to conservation of the environment and mitigation of

Use of brick waste as heat-resistance raw

Implementation of activities to beautify the

Bearing in mind that we are a company with plants that manufacture and sell special steel and non-ferrous metals, we1) We will contribute to the recycling of metal resources by manufacturing steel products using iron scrap as the main raw

Updating large fans with high-eﬃciency fanssuch as local government bodies

Release of CSR Report 2018 and publication
on website

Implementation of Environment MontheventsSelf-Assessment
〇〇〇
〇〇
〇〇
〇〇〇
〇〇〇
〇〇〇
〇
〇〇〇
〇〇〇

Self-Assessment: The level to which targets have been achieved are classiﬁed under 3 stages○○○：Plans have been met ○○：Good progress is being made to achieve plans○：Further initiatives will be undertaken to achieve plans

Activities for developing
environmental awareness

Environmental accounting
We collated costs for environmental conservation initiatives
undertaken in FY2018 in accordance with guidelines from the
Ministry of the Environment.
Maintenance and administration costs for environmentallyfriendly equipment such as dust collection units and water
treatment facilities and the cost of recycling/disposing of byproducts amounted to approximately 3.3 billion yen. We also
invest approximately 400 million yen in installing dust collection
units in continuous casting sheds and in energy-saving initiatives
such as switching to high-efficiency fans in dust collection
units and using inverters in pump motors. Moving forward, we
intend to continue to implement initiatives concerned with theconservation of the environment.

We believe that raising every employee s awareness ofthe environment is important in tackling our environmental
conservation activities, and we conduct regular training for
new employees and grade-based environmental workshops.
We have also established a reward program to encourage
employees to obtain qualifications related to environmental
conservation such as those for pollution prevention managers,
and we have also been working to have employees calculate
carbon footprints for their own households.

（Million of yen）
Categories

Expenses

Investment

3,093

383

2 .Upstream/downstream costs

00

3 .Cost of administrative activities

158

0

4 .R&D costs

27

0

5 .Cost of social activities

170

6 .Cost of addressing environmental damage

12

0

3,307

383

1 .Costs within business areas

Total

32

Initiatives to prevent climate change

Contributing to a resource-recycling society

Initiatives to reduce the amount of CO₂ emissions

Reducing CFCs (Chloroﬂuorocarbons)

Special steel products created from recycled materials

Recycling slag from electric arc furnaces

Sanyo Special Steel is involved in efforts to reduce
CO₂emissions (one of the greenhouse gases (GHG)) as partof its initiatives on climate change. Under our medium-termbusiness plan (2017-2019), we aim to cut CO₂ emissions by
2.6% compared to BAU (business as usual - the scenario where
no special measures are taken) by 2020. Results for FY2018
show a reduction of 2.83% has been achieved, and we aremaking renewed efforts to achieve the target for FY2020.
In addition, we have continued to promote energy-saving
initiatives such as the switch in fuel from heavy crude oil totown gas, increased use of regenerative burners for heating
furnaces, and the use of inverters in large motors (revolution
controlled), and through these initiatives, we have reduced unit
emissions of CO₂ by 13% per ton of crude steel in comparison
with FY2005. As a result of these initiatives, we have beenrecognized as an S-class business operator (the top rank forcompanies making outstanding energy-savings) for the fourthconsecutive year under the assessment program run by the
Ministry of the Economy, Trade and Industry, a program that
grades and classiﬁes business operators.

CFCs are used in our commercial air conditioners. As one of
the GHGs, CFCs are deemed to contribute to global warming
when released into the atmosphere. In accordance with Act
on the Control of CFC Emissions, Sanyo Special Steel conducts
inspections for speciﬁed Class 1 products on our commercial
air conditioners and other equipment as we work to ensure
proper control of CFC gases.

We use electric arc furnace steel-making (which uses ironscrap as a main ingredient) to manufacture special steel,contributing to the recycling and eﬀective use of iron resources.
Scrap iron accounts for around 80% of our raw materials, andif materials recycled internally are included, around 95% of ourraw materials are recycled products.

We promote the recycling of electric furnace slag generated
as a by-product of the manufacturing process, and by ensuring
reliable quality in the product and responding to a diverse rangeof needs, we have been able to maintain a 100% recycling
rate of this resource. Our electric furnace slag products areused mainly as roadbed material for roads and as an asphalt
aggregate instead of natural resources such as stone and sand.
Moving forward, we expect it to be used as a raw material ininhibitors to control foam expansion of molten steel and by
local authorities as a recycled aggregate for paved surfaces.
We use pressurized steam-aging facilities to pressurize
our furnace slag products to the highest level in Japan in aprocess that eﬀectively stabilizes any expansion in the products.
In addition, we use a classification machine that can sortelectric furnace products into six stages simultaneously, fromcoarse-grained aggregate to fine grains, and multi-functionalclassiﬁcation equipment made up of a granulator that chamfers
aggregate particles to adjust grain size and improve resistanceto wear. Using these manufacturing processes, we provide
customers with high-quality electric furnace slag products.
Moving forward, we intend to focus on realizing asustainable society as we continue to comply with the Nippon
Slag Association s Guidelines for Management of Iron andSteel Slag Products and not only deploy management systems
across all areas including manufacturing, quality, and sales, butalso submit to reviews by third-party organizations to enhance
management systems and further improve reliability.

CO₂ emissions per unit of crude steel（CO₂-kg/t）
750

700

Reducing the load on the environment
when transporting products
Reducing CO₂ emissions does not just involve manufacturing
processes but also essential initiatives on the logistics front. We
believe that the choice of transportation method when shipping
products is a particularly important point for reducing the loadon the environment on the logistics front. Consequently, we areworking to promote the use of rail transport and freight ships
on the assumption that product quality can be ensured; railtransport allows CO₂ reductions to be reduced by around 90%
compared to transportation by truck, and freight ships provide
a reduction of around 80% compared to the same. Of all the
shipments that Sanyo Special Steel makes itself, transport byfreight ship accounts for a signiﬁcantly higher percentage than
the average for the manufacturing sector.

Initiatives to reduce by-products
In FY2018, the amount of by-products generated by our
production activities was 253,000 tons, and the amountprocessed, including the volume sold, was 256,000 tons. Byproducts include electric furnace slag, scale, dust, brick waste,
and sludge. Based on the 3 R (Reduce, Reuse, Recycle) concept,
we encourage recycling of these by-products and, of theamount processed in FY2018, approximately 91% was either
recycled or reduced down by incineration, with the remaining
amount, approximately 9%, ﬁnally being disposed of in landﬁlls.
Moving forward, we will work to expand the use of by-products
in new applications in order to reduce disposal in landﬁlls.

ReduceReduce usage ofresources such as
electricity and gas

703

650

637

631

636
614

600

608

611

550
2005

2013

2014

2015

2016

2017

Reduce generation ofwaste〈Speciﬁc initiatives〉
・Use of rail transport for the Tohoku area
・Use of freight ships for transport to interim
warehouses set up in the areas of Kanto, Chubu,
Shikoku, Chugoku, and Kyushu
・Switch from trucks to barges for transport to Kobe
Port where export vessels depart.

3R

RecycleUtilize scrap raw

Reusematerial

Reuse water

Recycle by-products

Reuse by-products2018 （FY）■ By-product generation
8%

2%

5%

FY2018253,000

256,000tt

67%
Electric furnace slag
brick waste

33

Electric furnace slag

9%1%

FY201817%■ By-product throughput

scale

dust

sludgeOther

91%
Recycling

Landﬁll disposal

Road using electric furnace slag products34Moves to reduce the load on the environment
Eﬃcient use of water resources
Water is vital for the manufacture of our products. It is used
to cool steel and equipment, and also as a source of power
for equipment. In recognition of the fact that water is a limited
resource, we reuse more than 90% of the water employed in
our production processes. Contaminated water that has beenused in the factory is sent to an on-site treatment facility to be
puriﬁed. After this, the puriﬁed water is reused in the factory,
while the remainder undergoes further treatment before being
released into public waterways. At the point where the waterdrains into the public waterways, there is a system that takes
automatic measurements to constantly monitor pH levels,
turbidity, chemical oxygen demand (COD), nitrogen, andphosphorus, and if levels go beyond our voluntary in-housemanagement standards then an alert is issued to allow theoﬃcer in charge to deal with the issue in a prompt manner.
In addition, the water is regularly analyzed for harmful
substances, etc. by an external organization as part of oureﬀorts to manage water quality and prevent water pollution.

Chemical oxygen demand in wastewater（COD）
concentration（mg/ℓ）
12.0

Prefectural ordinance (addition criteria)

10.0
8.0
6.0
4.0

3.2

2.6

2.5

2.5

2.9

2015

2016

2017

2018 （FY）

2.0
0

2014

Suspended particulate matter in wastewater（SS）

Reduction of emission of air pollutants

Wastewater treatment facility

Appropriate controls on chemical substances
In accordance with the PRTR* Act, we monitor the amountof chemical substances released and transferred. Volumes
are reported to the Ministry of Economy, Trade and Industry,
and we also work on initiatives to curtail the amount released.
Furthermore, PCB waste is properly stored and controlled inaccordance with the PCB Special Measures Act and, in addition,
all applicable equipment is systematically updated/disposed of
to ensure disposal is completed by the deadlines stipulated in
the Act.

5.0
0

3.7
2014

0.6

0.8

0.6

0.6

2015

2016

2017

2018 （FY）

Nitrogen concentration in wastewate
70.0
60.0

Legal standards (No additional standards for prefectural regulations)

50.0
40.0
30.0
20.0
10.0
0

35

7.1

7.0

8.1

7.9

7.5

2014

2015

2016

2017

2018 （FY）

20
10
0

1.3
2005

2014

0.003

0.2

2015

2016

2.1
2017

1.5
2018（FY）

Nitrogen oxide emissions
窒素酸化物の排出量（thousand ㎥N）
300
253
250
200

Agreement value with Himeji City

158.9

150

127.3

122.2

120.0

2014

2015

2016

148.9

150.0

2017

2018（FY）

100
50
0

2005

to help prevent the dust scattering.

Environmental risk management

Amount of transfer
outside the business
place(i) Checks for signiﬁcant environmental aspects

As stated in our environmental policy, compliance withstatutory laws and regulations is a key assumption of ourbusiness activities. If there are any legal amendments related toour business, we revise our in-house environmental standards
and ensure that all stakeholders receive appropriate training,among other initiatives.
June is Environment Month when we hold a Study
Workshop on Environmental Laws and Regulations to which
we invite section managers from across the company andenvironmental managers from group companies to ensurethat they have a better understanding of statutory complianceobligations.

1,189

t

Amount ofemissions into
the atmosphere

190tAmount of emissions
intopublic waterways

16t

Proper disposal of waste

concentration（mg/ℓ）

Agreement value with Himeji City

Once a month, a team made up of the Chief Officer for
Environmental Systems, executive officers, department
managers, pollution prevention managers, and others conducts
patrols, primarily around our manufacturing sites. We aim to
reduce environmental risks by responding to the issues raisedby the patrols at individual manufacturing sites.

20.0
10.0

30
57

amounts of speciﬁed chemical substances emitted into the environment

25.0
15.0

66.5

Responding to amendments in environmental laws

promotes improvements in the monitoring and management of thePrefectural ordinance (addition criteria)

30.0

40

Environmental patrols* PRTR (Pollutant Release and Transfer Register): a statutory system thatconcentration（mg/ℓ）
35.0

At facilities that generate soot and smoke, we haveachieved SOx (sulfur oxide) emissions well below the levels
agreed on with the Himeji City council by switching the fuelfrom heavy crude oil with high sulfur content to LNG (towngas) which contains almost no sulfur. In a bid to reduce NOx(nitrogen oxide) emissions, we are using low NOx burners
and implementing proper combustion controls, among otherinitiatives. We have also introduced units that automaticallymeasure NOx in a system that enables us to constantly monitor
heating furnaces, which produce large volumes of emissions.
Furthermore, revisions to the Air Pollution Control Act inApril 2018 stipulated that operators should voluntarily reduce
emissions of mercury concentrations in exhaust gases fromelectric steel-making furnaces. Sanyo Special Steel regularly
measures and records mercury concentrations in accordancewith the voluntary standards recommended by the Japan Iron
and Steel Federation to conﬁrm that the concentrations meetvoluntary control standards.
In terms of dust collection facilities, we are working on
initiatives to increase and enhance equipment capacity, suchas the installation of dust collection units in continuous castingsheds in FY2018.
We also use traditional methods of dealing with dust that
include patrols by water sprinkler vehicles and street sweepers

Sulfur oxide emissions
硫黄酸化物の排出量（thousand ㎥N）

Sanyo Special Steel subcontracts services to industrial waste
disposal companies that can dispose of waste in a proper
manner, and we conduct checks to ensure that subcontractors
hold the appropriate licenses as well as preliminary inspectionsof their disposal facilities. In addition, we check that our waste
is being disposed of in an appropriate manner through regularinspections of disposal facilities and by confirming industrial
waste disposal conditions in a manifest. We have introduceda manifest in electronic format to ensure that operations are
running properly, and we make every eﬀort to separate waste
at the sites where waste is generated.

Patrols are conducted on processes and equipment withsignificant environmental aspects and inspections are carriedout on equipment, management of measuring devices, andwritten work standards as we work to improve managementlevels and mitigate risk.

(ii) Checks on emergency drills
Emergency drills are carried out to check if there are any
issues with emergency procedures, and in addition, we verify
that there are no defects in equipment and instruments.

(iii) Patrols attended by the President
Once a year, an environmental patrol is conducted with the
President in attendance. In FY2018, this patrol included checks
on the management of significant environmental aspects in
manufacturing plants, energy-saving initiatives, and initiatives toreduce by-products.

(Example of response to a legal amendment)
・ Soil Contamination Countermeasures Act (April 2019
amendment)
Content of amendment :Expansion of opportunities for soil contamination surveys
Our response :Details of the statutory amendment were disseminatedacross the whole company at the Study Workshop on
Environmental Laws and Regulations held in June.

36

Corporate GovernanceOﬃcer
The Sanyo Special Steel Group practices a basic philosophy of Conﬁdence-based Management and, by supplying useful steel
products to society at large, we aim to achieve sustainable growth and increase corporate value over the medium-to-long term as
we support the development of the global economy, while also building a recycling-oriented society and focusing on environmental
conservation.
We recognize that proper corporate governance is essential as a management platform to achieve this and, in light of this, we areworking to ensure the development, operation, and on-going improvement of corporate governance as we promote the establishmentof a corporate governance system suited to our business by improving eﬃciency, soundness, and transparency in our management.

Fundamental thoughts on corporate governanceIn order to ensure further conﬁdence among our stakeholders, including shareholders, consumers, and the local community, SanyoSpecial Steel has developed a corporate governance structure suited to the Group s business, and we will work to enhance corporate
governance in a bid to improve eﬃciency, soundness, and transparency in our management.

Representative Director and President

Higuchi Shinya

Corporate Governance System
Sanyo Special Steel is a company with an Audit and Supervisory Board, which supervises how directors execute their duties, and a
Board of Directors that consists of nine directors, including two independent outside directors. The Board of Directors meets regularly(at monthly meetings) and as required (at ad hoc meetings) to decide important matters concerning the execution of business.
We also set up company-wide committees and meetings to discuss important operational matters. These include the Corporate
Policy Committee (held twice a month in principle), which facilitates eﬃcient decision-making on management, including at Boardof Directors meetings; the Risk Management Committee, which aims to ensure thorough compliance and further enhancements incorporate governance; the Security Trade Control Committee; and the Rewards and Sanctions Committee.

General Shareholders Meeting
Appointment/Dismissal

Decision/
Supervision

Audit

Audit Supervisory Board(including 2 outside directors)

ReportEvaluationof the appropriatenessof the account audit

Director, Member of the Board Managing
Executive Oﬃcer

Director, Member of the Board Managing
Executive Oﬃcer

In charge of the Sales Planning& Administration Department,
Sales Department for Bearings,
Sales Department for Automobiles& Industrial Machinery, Special
Products Sales Department,
Overseas Marketing Department,
Osaka Branch, Nagoya branch,
Hiroshima Branch, Kyushu SalesOﬃce, and Formed & FabricatedProducts Division.

In charge of the Metal Powder
Manufacturing & Sales Division,
Research & Development Center,
Technical Planning & Administration
Department, Quality Assurance
Department, and Indian Business
Administration Oﬃce.

Director, Member of the Board

Director, }Member of the Board

Omae Kozo

Oi Shigehiro

In charge of the Safety & Disaster
Prevention Oﬃce, Environmental
Management Department, Slag
Products Manufacturing & SalesOﬃce, Production Planning &Administration Department,
Industrial Engineering Oﬃce,
Equipment Department,
Stealmaking Department, Bar &Wire Manufacturing Department,
Tube Manufacturing Department.

Yanagimoto Katsu

Audit

Appointment<Business execution>

Report※1

Outside Director, Member of the Board

ReportApprovement

Instruction

ReportVarious Committees / Meetings

ReportExecutive Oﬃcer

Accounting Auditors（Accounting ﬁrm）

Corporate Policy Committee

Instruction

Takahashi Kozo

In charge of the Secretariat Oﬃce,
Corporate Planning Department,
Accounting & Finance Department,
Computer Systems Planning Oﬃce,
Personnel & Labor Relations
Department, General Administration
Department, Internal Control &Audit Department, and Procurement
Department.

Director, Member of the Board Managing＜Audit/Supervision＞

Representative Director and President

Appointment

Executive Oﬃcer

Appointment/Dismissal＜Management/Supervision＞
Board of Directors(including 2 outside directors )Director, Member of the Board Managing

・Risk Management Committee
・Capital Investment Committee
・Health and Safety Management
Committee
・Quality assurance management
Committee etc.

Proposal/ReportInternal Control Department（Internal audit）

Instruction/
Approvement

Audit

Kobayashi Takashi※1

Outside Director, Member of the Board

Onishi Tamae

Masumitsu Noriyuki

Grounds for appointment
Grounds for appointment
Grounds for appointment
・Extensive experience and expertise ・Rich experience and broad insight・Rich experience and broad insightin legal circles
from key positions held in national
in management at NIPPON STEEL
・Able to supervise and makeand regional government agencies
TEXENG.CO.,LTD., or similar
recommendations on the management
or national universities, etc.
of the company from a standpoint ・Able to supervise and make recommendations
on the management of thethat is independent of thecompany from a standpoint thatmanagement team responsible foris independent of the management
executing businessteam responsible for executing
business

Tsuga Hiroshi

Grounds for appointment
・Rich experience and broad
insight cultivated at Nippon SteelCorporation

Executive Oﬃcers
ReportInstruction

Each department, Aﬃliated Companies
Senior Audit & Supervisory Board Member

Autonomous internal control※2※3

Outside Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member

Audit & Supervisory Board Member

Grounds for appointment
Grounds for appointment
・Experience in a wide range of・Rich experience and broad insightﬁelds as a director of Sanyo Special
cultivated at Mizuho Bank, orSteelsimilarGrounds for appointment
・Rich experience and broad insightcultivated at Sumitomo Mitsui
Banking Corporation

Grounds for appointment
・Rich experience and broad insightcultivated at Nippon SteelCorporation

Nagano Kazuhiko

Ohe Katsuaki

Yogi Hiroshi※1 Independent outside director

37

Sonoda Hiroto※2 Independent outside auditor※3 Outside auditor

38

Internal control systems
Compliance System and Risk Management System
Sanyo Special Steel has established the Corporate Standards of Conduct that prescribe the standards of behavior we should follow
as a corporation, and a Code of Conduct as guidance on conduct to be observed in the course of business activities within theframework of the Corporate Standards of Conduct. Moreover, Sanyo Special Steel makes eﬀorts to ensure all oﬃcers and employees
are thoroughly familiar with these standards. In addition, we have developed a system that promotes compliance with, among otherinitiatives, the establishment of a compliance help-desk and regular meetings of the Risk Management Committee in accordance withcompany rules.
Sanyo Special Steel will endeavor in the future to cultivate higher ethical standards by regularly conducting employee education on
the necessity and signiﬁcance of complying with various laws, regulations, and rules in corporate management and will make eﬀorts tomaintain and improve the management health of not only Sanyo Special Steel but also of the Group as a whole. Sanyo Special Steel isalso committed to putting into practice its mission to fulﬁll our social contribution through business by promoting business activities
rooted in high ethical standards.

■Compliance help-desk
Sanyo Special Steel Group employees,

Information provider and suppliers employees,

provide（Name / Anonymous）

provide（Name / Anonymous）

Compliancehelp-desk（Internal contact）
Sanyo Special Steel /Head Oﬃce

Contact

Compliancehelp-desk（Outside contact）
External specialized
agencies, etc.

* No disadvantage will be suﬀered as a result of a consultation orreport. Secrecy is maintained in strictest conﬁdence.

Survey / Response

Survey / Response

as well as their families

W e h a v e s e t up a c o mpl i an c e h el p - d e s k
to prevent the occurrence or recurrence of
circumstances or actions that violate, or appear tohave violated, statutory laws, social norms, company
rules, or similar regulations.
The help-desk can be used by anyone, including
Sanyo Special Steel Group employees, casual
workers, temporary workers, and suppliers
employees, as well as their families, and it provides
a system for consultation to ensure that no-one has
to handle problems alone̶whether these concern
issues that are difficult to solve in the workplaceor troubles that people are unable to discuss withanyone else.
Consultations and reporting may be done
anonymously, and no-one will suffer to his/her
disadvantage as a result of any consultation orreport.
It is company policy to respond promptly andappropriately to any consultation or report.

We have set up an Internal Control Department responsible for planning and auditing internal controls, as well as functional
departments responsible for risk management in individual sectors to form an organizational structure to run the internal control
system in the Group. In addition, we have assigned risk management oﬃcers to each department and group company; these oﬃcers
are responsible for planning and promoting autonomous internal control activities in their respective departments/companies. Basedon this organizational structure, we operate the internal control system as described below.

1

Each year, we formulate a Group-wide internal control plan
based on amendments to statutory laws and regulations
and changes in the business environment This plan contains
basic policies; plans for diﬀerent functions such as safety, theenvironment, disaster prevention, and quality; internal audit
plans; and training plans. Each department and group company
then formulates their respective plans based on the Group-wide
plan.

2

Every year, the Sanyo Special Steel Group holds compliancelectures to raise awareness of compliance issues among
executive oﬃcers and employees.
We conduct training on diﬀerent topics, such as e-learningcompliance training, compliance training for new employees,
and also grade-based training on harassment. Furthermore,
all departments and aﬃliated companies conduct compliancetraining appropriate to the individual department and ensurethat employees are familiar with laws, regulations, and rules
necessary for the execution of business.

Autonomous internal control activities

Sanyo Special Steel s individual departments and groupcompanies implement their own, autonomous internal control
activities in accordance with internal control plans, based on
the nature of their business operations and inherent risks.
Speciﬁcally, they develop operating regulations, manuals, andother materials and conduct training. They also conduct selfinspections and carry out improvements to operations basedon the results. In the event of an accident, disaster, or situationthat risks violating the law, the department or group company
concerned immediately reports the fact to the Internal Control
Department; in addition, corrective measures, such as measures
to prevent any recurrence, are taken in collaboration withassociated departments. Furthermore, the Internal Control
Department gathers these cases together and shares themwithin the Group, allowing individual departments and groupcompanies to carry out inspections to check for similar risks.

3■Implementation of compliance training

Internal control plans

Internal audits, etc.

In internal audits, the Internal Control Department andrespective functional departments not only check the status ofinternal controls using documentation such as internal control
checklists but also monitor each department/group company.
In addition, as a measure to complement internal controls, wehave established and operate a whistle-blowing help-desk thatcan be used by employees of Sanyo Special Steel and its groupcompanies, their families, and suppliers employees.
We also conduct surveys on employee awareness regarding
internal controls and compliance.

4

Assessments and improvements

The Internal Control Department and the respectivefunctional departments report on the operational status of theinternal control system to the Risk Management Committee,
which meets quarterly, and to the Board of Directors; inaddition, these reports are also shared with individual
departments/group companies at the meetings for risk
management oﬃcers held each quarter. The Internal Control
Department assesses the eﬀectiveness of the internal control
system based on information such as the status of internal
control activities implemented and the results of internal audits,and once the results of the assessments are compiled, they arereported to the Risk Management Committee and the Boardof Directors. Based on the assessment results, the Company
formulates improvement initiatives to help make the internal
control system more eﬀective, and these initiatives are reﬂectedin the internal control plan for the next ﬁscal year.

5

Training and raising awarenessWe have set up courses on internal controls through gradebased training and other methods to provide training forexecutives and employees of Sanyo Special Steel and its groupcompanies. Furthermore, we are pro-actively working to raiseawareness of internal control concepts and improvements inworkplace culture, among other topics, through talks between
the Internal Control Department and respective departments/group companies.

6

Links with outside directors, corporate auditors, and accounting auditors

As members of the Risk Management Committee, outside
directors and corporate auditors sit on the Committee andexchange their opinions. In addition, outside directors andcorporate auditors hold regular meetings with the CEO toconduct a proper, uninterrupted exchange of information. In
terms of interaction with the accounting auditor, we submit
regular reports on the operating status of the Risk Management
Committee, as well as assessment results on internal controls
pertaining to ﬁnancial reporting, and exchange opinions.

* Illustration of a compliance lecture

39

40

Financial Section
42

Financial Statements

75

Independent Auditor s Report

41

42

The accompanying notes are integral parts of these statements.

The accompanying notes are integral parts of these statements.

43

44

The accompanying notes are integral parts of these statements.

The accompanying notes are integral parts of these statements.

45

46

The accompanying notes are integral parts of these statements.

The accompanying notes are integral parts of these statements.

47

48

The accompanying notes are integral parts of these statements.

The accompanying notes are integral parts of these statements.

49

50

The accompanying notes are integral parts of these statements.

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

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73

Independent Auditor’s Report
To the Board of Directors of Sanyo Special Steel Co., Ltd.:We have audited the accompanying consolidated financial statements of Sanyo Special Steel Co., Ltd. andits consolidated subsidiaries, which comprise the consolidated balance sheets as at March 31, 2018 and2019, and the consolidated income statements, statements of comprehensive income, statements of changes
in net assets and statements of cash flows for the years then ended, and a summary of significant accounting
policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Thosestandards require that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on our judgment, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due tofraud or error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the financial statement audit is not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of Sanyo Special Steel Co., Ltd. and its consolidated subsidiaries as at March 31, 2018 and 2019,
and their financial performance and cash flows for the years then ended in accordance with accounting
principles generally accepted in Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2019 are presented solely for convenience. Our audit also included the translation of yen
amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis
described in Note 3 to the consolidated financial statements.

July 24, 2019
Osaka, Japan

74

75

Corporate ProﬁleSubsidiaries and Aﬃliates As of March 31, 2019

Company Name：Sanyo Special Steel Co., Ltd.
Head Oﬃce： 3007, Nakashima, Shikama-ku, Himeji, Hyogo
672-8677, Japan
Established：January 11, 1935
President：Higuchi Shinya

3

Number of Employees： 6,835 (consolidated basis)
1,334 (non-consolidated basis)
Capital：53,800 million yen

Head oﬃce/Factory Whole view

Net Sales：Consolidated basis：185,818 million yen (Fiscal 2018)
Fiscal Year End：March 31
Business Segment：Specialty Steel：Manufacturing and marketing of various special steel products, including bearing
steel, engineering steel, stainless steel, heat resistant steel and tool steel.

5

6
7

4

1

2

8

Metal powder：Manufacturing and marketing of metal powders and powder metallurgy products.

11

12

10

9

Formed and Fabricated Materials：Manufacturing and marketing of formed and fabricated materials made from
special steel bars and tubes.
Others：Providing information processing services.

Stock Information
Total Number of Shares Authorized to be Issue：94,878,400
Stock Listings：Tokyo Securities Exchange（1st Section）
Number of Shareholders：10,923

Japan Trustee Services Bank, Ltd.
(trustaccount)

28,863,000

51.43%

2,319,000

4.13%

1,579,000

2.81%

Sumitomo Mitsui Banking CorporationThe
Master Trust Bank of Japan, Ltd. (trust

1,473,000

2.62%

account)
NSK Ltd.

1,467,000

2.03%

Sumitomo Mitsui Banking Corporation

1,139,000

2.03%

Mizuho Bank, Ltd.

728,000

1.29%

NORTHERN TRUST CO.(AVFC)RE‐HCR00

725,000

1.29%

Marubeni-Itochu Steel Inc.

621,000

1.10%

DFA INTL SMALL CAP VALUE PORTFOLIO

610,000

1.08%

As of March 31, 2019
*The number of shares omits fractions of less than 1,000 shares.
*The Company holds 1,212 thousand shares of its own stock in treasury, but is excluded
from the above list of principal shareholders.
*On the 1st day of April 2019, NIPPON STEEL CORPORATION has changed trade namefrom Nippon Steel & Sumitomo Metal Corporation76

Santoku Kogyo Co., Ltd.
（Himeji City, Hyogo）⑦Ningbo Sanyo Special Steel
Products Co., Ltd.
（China）

Processing of special steel and machinery maintenancePrincipal Shareholders

Company's Kyoeikai Association⑥SANYO SPECIAL STEEL TRADING（SHANGHAI）CO., LTD.
（China）

Trading of special steel products,
steelmaking raw materials, and other materials

Total Number of Shares Issued：57,437,307

NIPPON STEEL CORPORATION①Yohkoh Bussan Co., Ltd.
（Osaka City, Osaka）

Foreign investors
9.16%

Individuals
and others
12.83%
Financial
institutions
17.88%

Securities ﬁrms
0.83%
Domestic
corporations
59.30%

Shareholder
Composition

Santoku Tech Co., Ltd.
（Himeji City, Hyogo）

Manufacturing of special steel product(formed & fabricated materials)

Santoku Computer Service Co., Ltd.
（Himeji City, Hyogo）

Construction, operation,and consulting services for information systems

Santoku Security Service Co., Ltd.
（Himeji City, Hyogo）

Services such as security services and facility management

Involved in businessand sales of special steel products in China

Manufacturing and marketing of special steel products(formed & fabricated materials)⑧Siam Sanyo Special Steel
Product Co., Ltd.
（Thailand）

Manufacturing and marketing of special steel products(formed & fabricated materials)

SKJ Metal Industries Co., Ltd.
（Thailand）

Manufacturing and marketing of special steel products⑨P.T. SANYO SPECIAL STEELINDONESIA（Indonesia）

Manufacturing and marketing of special steel products⑩Sanyo Special Steel
Manufacturing de México,②Santoku Seiken Co., Ltd.
（Tokyo Headquarters）
S.A. de C.V. （Mexico）（Taito-ku,Tokyo）
Manufacturing and marketing of special steel products③Ovako AB（Sweden）
As of March 31, 2019

Manufacturing and marketing of special steel products(formed & fabricated materials)④Sanyo Special Steel India Pvt. Ltd.
（India）⑪Advanced Green
Components, LLC（U.S.A）⑤Mahindra Sanyo Special Steel
Pvt. Ltd.
（India）⑫SANYO SPECIALSTEEL U.S.A., INC.
（U.S.A）

Manufacturing and sales of special steel products
Involved in businessand sales of special steel products in India

Manufacturing and sales of special steel products

Manufacturing and marketing of special steel products(formed & fabricated materials)

Trading of special steel products

77