OUR PURPOSE

Meetingsociety’s needs
with nature’s
blessings

2

AIR WATER / Integrated Report 2023

The Air Water Group is united under the Purpose of “meeting society’s needs
with nature’s blessings.” Always looking to the future, we have been working as
one to contribute to enrich our society through solving social issues.
We have developed a wide range of businesses and have continued to provide
a stable supply of products and services that are indispensable for our daily
lives and industry. These fields now range from industrial gases and chemicals
that support manufacturing, to medical care that supports people’s lives, to energy, agriculture, food, logistics, and seawater that are all closely related to ourdaily lives.
The Air Water Group will continue to grow by staying close to people andmeeting the various needs of society.

AIR WATER / Integrated Report 2023

3

OUR VISION

Creating new value throughsolving social issues

Liquefied biomethane (LBM),
carbon-neutral energy
from livestock manure
We established a localized supply chain
where biogas derived from livestock manure is

GLOBALENVIRONMENT
To confront global
environmental issues

converted to liquefied biomethane and locally“ReCO2 STATION,”

consumed. The LBM is used as fuel for ships,

small-sized CO2 recovery

electricity and product materials for factories,

and dry ice production equipment

and as rocket fuel. A demonstration project

Our technologies of gas production cultivatedis underway to both achieve decarbonization

over time and the unique adsorption haveand contribute to the local community.

succeeded in separating and recovering CO2
from low-concentration exhaust gas at a highefficiency. The equipment is also capable of1

producing dry ice from a carbon-recycling
perspective.

Global environmental issues such as global warming and increasing environmental burden havebecome major social issues worldwide.
Air Water leverages its business foundation based on industrial gasses and gained through theDigital & Industry and Energy Solution to address the issue. We have been developing innovative, future-oriented technologies, such as locally produced and locally consumed energy, new

Shikaoi Hydrogen Farm,energy sources, and energy-saving materials.

a livestock manure-derived

To contribute to solving global environmental problems, we are engaged in business aimed athydrogen supply businessrealizing a carbon-neutral society, a resource-recycling society, and a society in which people

The farm produces carbon-neutral hydrogenand nature coexist in harmony.

from biogas produced by methane fermentation
at a livestock manure treatment facility inShikaoi, Hokkaido. The hydrogen is sold for fuelcell vehicles at an adjacent hydrogen station,
thereby creating a regional circulation model ofenergy supply.

4

AIR WATER / Integrated Report 2023

AIR WATER / Integrated Report 2023

5

OUR VISION
Fruit & veg distribution
and processing platform
We established a unique value chain that procuresquality agricultural products mainly in Hokkaido,

Onshore aquaculture platform

optimally processes them, and distributes them

We utilized not only oxygen, energy, and artificial

throughout Japan. Collaborating with fruit & veg

seawater being essential to aquaculture, butintermediate wholesaler and retailer, Vegetech andremote monitoring, freshness preservation, andDelica Foods Holdings, we are working together tofood analysis technologies. Altogether, we havepromote local agriculture and reduce food losses.

developed an “onshore aquaculture platform”

Creating new value throughsolving social issues

business that offers an integrated package fromthe design of aquaculture plants to the operationand maintenance.

2

WELLNESSTo bring wellness
to our lives

With an aging population and the coming “100-year life era,” there is aneed for more efficient medical care and a consistent supply of food to“Remote exercise
monitoring system”
displayed at Air Water Kento.

support health.
Air Water can provide medical technologies and services that protect

Remote rehabilitation system

healthy lifestyles and a stable supply of food. Through these efforts, we

Our group Remohab Inc. is currently developing

will contribute to solving social issues such as “extending healthy life

an online-managed cardiac rehab system to

expectancy” and “improving food self-sufficiency.”

rehabilitate cardiac patients at home throughPulp regeneration therapy

remote monitoring. We are expanding the home

Our group Aeras Bio Inc. became the first in

healthcare business by entering the rehabilitation

the world to commercialize pulp regeneration

area through telecommunications technology.

We are engaged in business aimed at establishing communities where
people can lead healthy and secure lives.

therapy by dental pulp stem cell transplantation.
Also established the “Aeras Bio Dental Pulp Stem
Cell Bank” that allows dental pulp stem cells inyour own unused teeth to be transplanted into
your other teeth to regenerate the nerves.

6

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7

CONTENTS

About the coverSince established, Air Water has been contributing to people’s daily lives and industrial development
through the earth’s blessings of “air” and “water.” The cover design, showing the two waves of air
and water being harmonized in the city, expresses that Air Water is “indispensable” part of society.

01

03

04

06

MANAGEMENTMES SAGE

ST RAT EGY

B U S I NE S SG OVE R N A N C E

38 A IR WATER’s Growth
Strategy

60 Business Overview

87 Corporate Governance

62 Digital & Industry

93 Outside Directors Roundtable

40 Realizing “terrAWell30”

64 Energy Solutions

96 Board Members

42 E volving Integrated
Group Management

66 Health & Safety

44 FOCUS 1
Global & Engineering

70 L
 ogistics / Seawater /Global & Engineering / Electric PowerVALUE CREATIO N

48 FOCUS 2Electronics

20 The Path to a Trillion-Yen Revenue

50 FOCUS 3
Incorporating Carbon
Neutrality into Growth

05

07

S U STA I NA B I LI T Y

D ATA

72 Promoting Sustainability

98

12 CEO Message
16 COO Message

02
22 S ource of Value Creationin the Air Water Group
24 AIR WATER’s Value Creation History

54 FOCUS 4
Incorporating Wellness
into Growth

28 The Driving Force for Value Creation

58 Technology Strategy

30 Regional Strategy
32 Businesses Close
to Manufacturing and Living
34 Value Creation Process

8

AIR WATER / Integrated Report 2023

68 Agriculture & Foods

74 Human Capital Management
78 Environmental Initiatives
83 Human RightsF inancial and NonFinancial Highlights
100 1 0-Year Financial
and Non-Financial Data
102 I nvestor Relations

85 O
 ccupational Health and Safety(Security and Safety Services)
86 P
 romoting Community Partnerships
and Social Contribution Activities

AIR WATER / Integrated Report 2023

9

Key Points of Integrated Report 2023

Management Philosophy

Backed by an entrepreneurial spirit,
we dedicate ourselves and our resources
to the creation and development of businesslinking air, water and the earth.

Air Water has established its vision for the year 2030 as “ter-Environment” and “Wellness.” The AIR WATER Integrated ReportrAWell30.” This describes our policy to maximize corporate value

2023 is intended to provide a better understanding of our busi-

by balancing economic value and social value. Specifically, we will

ness and vision by showcasing our business as we create value to-be aiming to “create new corporate value through the solution ofwards “terrAWell30”. The position of the Integrated Report amongsocial issues,” while leveraging our diverse businesses, human re-

our information disclosure is as follows.

sources, and technologies in line with our two growth axes, “Global

Value creation process

Integrated Report
IR Information

The Air Water Group’s business originates from “air” and “water,” as the company name implies.

Financial

By utilizing these irreplaceable global resources, we create business and contribute to society and our daily lives.
In a fast-changing business environment today, we will continue to leverage our Group’s collective strengths to solve issues faced by our customers and society, and to take on challenges to create new value.

Sustainability / ESG Information

・Annual Securities Report*
・Consolidated Financial Results*
・Business Report* (Shareholders Report)
・Management Strategy(Medium-term Management Plan)
・IR Website

Non-financial
・Corporate Governance Report*
・Sustainability Website

ComprehensivenessEditorial Policy

Code of Conduct*Statutory and Timely Disclosure Documents

Data validity
Environmental data is third-party verified.

脚下照顧 (Kyakka Shoko)

横議横行 (Ougi Oukou)

IssuedInformation we disclose is subject to annual external verifica-

December 2023

tion to ensure its reliability. For more information, please visit
the website.

Companies covered

Reflect on the past, identify your position, and prepare for the future.

Discuss beyond organizational boundaries
and act outside the box.

AIR WATER INC. and the Air Water Group

This report has been prepared in accor-

Reporting period

dance with the International Integrated

It represents the importance of looking at where you

For our Group that has evolved by integrating various

April 1, 2022 - March 31, 2023

Framework published by the International

are standing right now.

companies, it is an indispensable attitude to transform(Some topics after April 2023 included)

Integrated Reporting Council (IIRC).

It also expresses the hope that you can start afreshthe diversity into strength and create new value.

by first looking back at yourself when encountering

Accounting standard

Notes on forward-looking informationdifficulties.

Unless otherwise indicated, the information is presented in ac-

future outlook and plans. It is based on our judgment in light of the information
currently available to us and involves risks, uncertainties, and other factors.

ternational Financial Reporting Standards (IFRS) from FY2019

in various factors, the reader is cautioned not to place undue reliance on such

Website information

AIR WATER / Integrated Report 2023

This integrated report contains forward-looking information derived from ourcordance with Japanese GAAP (JGAAP) until FY2018, and In-

Since actual results may differ significantly from the forecasts due to changes
information.

onward.

10

Guidelines

About Us

Investor Relations

Sustainability

Japanesehttps://www.awi.co.jp/ja/index.html

Japanesehttps://www.awi.co.jp/ja/ir.html

Japanesehttps://www.awi.co.jp/ja/sustainability.html

Englishhttps://www.awi.co.jp/en/index.html

Englishhttps://www.awi.co.jp/en/ir.html

Englishhttps://www.awi.co.jp/en/sustainability.html

AIR WATER / Integrated Report 2023

11

01

MANAGEMENT MESSAGE

Achieved revenue of 1 trillion yen
Air Water, which started in 2000 as a group of three companies
with industrial gas as its business foundation, has been growing
its comprehensive strength as a group through related diversification with industrial gas as its origin. In FY2022, we as a group
have achieved the goal of 1-trillion-yen revenue, an importantmilestone for the company’s growth stage.
Now that we have become a one-trillion-yen company, we
feel more than ever the greater expectations of our stakehold-(1) Our vision
Contributing to solving social issues
through “Global Environment”
and “Wellness.”
Under the “terrAWell30,” our Group has integrated its diverse
business vectors into two growth axes, “Global Environment”
and “Wellness,” reflecting global social issues such as energy
decarbonization, population growth, and the food crisis.

ers and society. At the same time, we are bracing ourselves toenter a stage where we must create value beyond that point.
We will respond to their expectations and steer our management with an even greater emphasis on profitability and capitalefficiency to further grow.
Our Group has advantages in diverse businesses, humanresources, and technologies that it has cultivated on its path
to becoming a trillion-yen company. We will maximize thesestrengths to achieve new growth that cannot be realized byexisting businesses alone. We are turning global social issues
into business opportunities while promoting partnerships andalliances with major companies, universities, and local governments, all of which can only be realized now with our increased
presence.
To achieve sustainable growth in today’s world where society
and the economy are changing at an unprecedented speed, weare committed to manage our business with the utmost impor-

Global Environment
As carbon neutrality becomes a precondition for business activities in many countries and companies, decarbonization isan urgent and long-term challenge that cannot be avoided. The
need for both a stable energy supply and decarbonization isincreasing, as is the need for products to be green. Also, as we
rapidly shift to a smart society with AI and IoT, there is a growing
need to address DX and other digital technologies.
Wellness
As we enter the “100-year life era,” extending healthy life expectancy and advancing preventive medicine have become
important issues. As we face food insecurity issues due to thegrowing world population and heightened geopolitical risks, it isalso essential to expand the agriculture and food industry.

tance on increasing the social value we provide to the world bysolving social issues, while constantly changing the form of ourcompany and business.
We set our 2050 Sustainability Vision as “achieving a recycling-oriented society through coexistence with society andthe earth.” Under the long-term vision “terrAWell30” for 2030,

Creating new corporate value
through solving social issues
is the mission of our Group,
now as a trillion-yen company.

which is a milestone of the 2050, we have started working
to create new corporate value through the solution of social

Chairman and Representative Director
Chief Executive Officer (CEO)Kikuo Toyoda

issues. I can already see a path for our Group to evolve under
this vision. We will contribute to the less burden on the global

These social issues are risks, but at the same time, can also begreat business opportunities for our Group. We should identify
the essence of such problems, provide solutions by leveraging
our diverse businesses, human resources, and technologies,
and pursue the social values. This is the theme of “terrAWell
30.” In today’s rapidly changing and uncertain society, we areconfident that by pursuing the values leading to a sustainable
future, we can inevitably create new economic values.

environment and to the more healthy lives of people by leveraging our management base cultivated through our diverse
businesses. While doing so, we can continue to be chosen by
local communities, customers, employees, and shareholders,
as well as meet their expectations through sustainable growth. I
see the route for becoming such a presence.
In the following, I would like to discuss the path we are on,starting with (1) our Group’s vision, (2) our growth policy, and (3)our challenges and solutions.

12

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13

01

MANAGEMENT MESSAGE

CEO MESSAGE(2) Our growth policy
Realizing “terrAWell30”“Realizing‘terrAWell30’” on p.40-41.)

Our Group has established a position as a comprehensive(3) Our challenges and solutions
Creating a corporate culture thatgenerates synergy and transformationindustrial gas manufacturer in the first founding stage since
2000. And then, built a diversified “All-Weather” portfolio in thesecond founding stage since 2010. In the third founding stage,

the business to such positions to ensure there is no discrepancy

the growth of human resources, the growth of a company is not

between the overall strategy of the unit and the on-site sense

possible.

we achieved 1-trillion-yen revenue in FY2022 as the grand fi-

Our Group has the earnings base and strengths that can sup-of business promotion. In addition, the Unit System serves as a

I believe that the most important part of developing people

nale to our efforts to date. We are now looking to “creating new

port growth for the foreseeable future. What I need to do now

milestone in pursuing truly integrated group management, as it

is to make them realize and to place them in roles with respon-

corporate value through solving social issues,” where we lever-as CEO is to improve the “quality” of the organization so we

opens the way for the group employees to be promoted to man-sibilities as early as possible after having them gain experienceage synergies from our “diverse businesses, human resources,

can use the profits and cash generated to create new markets,agerial personnel and increases their motivation.

in various departments. Taking on a position with more respon-and technologies” gained through the preceding phases as welldevelop them into businesses, and realize our vision of sustain-

This is the main reason why we moved from the Company

sibility will change your view and broaden the scope of whatas “presence as a trillion-yen company.”ability. Specifically, it means to transform our Group into an or-

System to the Unit System. The Unit System allows us to flexibly

you can do. In a place like our Group with diverse business

The “terrAWell30” is our long-term vision to face our own

ganization that (1) flexibly responds to change and continues tochange the relationship between each business and the group

operations, we need to think of the best combination of human

Materiality and promote sustainability management in the third

innovate, and (2) is capable of autonomously creating synergies

companies in response to changes in the environment, andresources to create and change the shape of our business. It

founding period. Assuming that we cannot expect significant

through a combination of technologies, human resources, andalso promotes the fluidity of human resources within the Group,

has unlimited possibilities, just like art.

future growth from our existing businesses alone, especiallybusinesses.

thereby revitalizing the organization. Our group companies

Our Group is currently revamping the personnel system tohave been expanding their performance and largely contribut-

encourage employees to gain various experiences and raise

within Japan, it sets forth three basic growth policies.
First, we will continue to restructure our existing businesses

When I became CEO in 2019, our Group was only partiallyed to the one-trillion-yen revenue, behind which there was thetheir hands, as well as to ensure that their achievements are

in Japan, including the integration and reorganization of group

optimized with fixed businesses and human resources due to

Unit System in place.

fairly rewarded. We believe that encouraging challenges and in-companies, while improving profitability through price man-business expansion based on a Company System. I recognized

Going forward, we will evolve the Unit System to promotecreasing the mobility of human resources within our Group willagement, optimal allocation of human resources, and DX tothat our greatest strengths of diverse businesses, human re-group management that integrates the organization of AIR

create synergies and foster a culture of self-initiated innovation.

increase earning power.

sources, and technologies were not being fully optimized as a

WATER INC. and its 30 group companies that play a core role in

Second, in addition to the engineering expertise we havewhole, which was a key management issue. In order to resolve

each business domain. While maintaining the business charac-

developed to date in the domestic market, including the acqui-

this issue and move from partial to total optimization, we haveteristics of our diverse group companies, the corporate divisionsition of large-scale gas plant technology, we will seek future

been working to build an organizational structure that provides

at the headquarters will be taking the lead in standardizing

growth overseas by taking advantage of the strategic alliancea cross-organizational framework for functions essential to thecommon management functions of each group company, suchwith MITSUI & CO. that was realized in 2022. For overseas

Group’s growth, such as technology development, engineering,as financing, investment, and governance, and further promot-

expansion, we are currently accelerating the expansion of ourand gas products.

ing the mobility of human resources. Simultaneously, we will

industrial gas business with India and North America as key

develop the data infrastructure and reform the personnel sys-

“Beyond” the 1 trillion yen,
we create a new era
Today, we are witnessing megatrends such as a smart society, adecarbonized society, a 100-year life span, and increasing foodself-sufficiency. The future is more uncertain and changing

strategic areas. There we aim to establish a business platform

Introduced a Unit System to elevate group-wide management

for industrial gasses, and in the future, develop businesses thatIn April 2022, we reorganized our diverse business fields into

take advantage of our Group’s diverse businesses and techno-

four groups (Digital & Industry, Energy Solutions, Health &Emphasizing human capital investment, as people and busi-

with an understanding of such megatrends, and not taking the

logical capabilities in areas such as medical care, environment

Safety, and Agriculture & Foods) and introduced the Unit Sys-

ness are inseparable“risk of change” would be a serious risk.

and energy, and food products.

tem. It shifted us to a new group management structure which

Our Group has focused on M&A and capital investments to

For now, our Group is making profits from its existing busi-

Third, in order to respond to the changing times, we will cre-integrates the headquarters organization of Air Water and thedate, but in this era of uncertainty ahead, we consider intangi-

nesses. It is precisely at such times that we must break away

ate and explore new businesses that contribute to solving socialgroup companies. In May 2023, we also established a newble asset investments are critical, such as intellectual property,

Global & Engineering Group to promote and manage our over-from businesses that assume existing values and continued

issues in the region. Instead of relying on existing businesses,

human capital, and brand power.

we will move forward based on innovation through technology

seas business development.

growth, dare to seek change, and create new businesses with

tem to realize these goals.

than ever before. In such times, it is important to keep changing

As expectations for us have risen with our becoming a one-The Unit System aims to develop next-generation manage-

trillion-yen company, we are building a framework for new value

ment personnel by selecting presidents of the group compa-

creation structures, including open innovation that will contrib-

Going for that, the “terrAWell30” sets targets and indicators

nies, each of whom plays the core role of respective businessute to solving social issues.

for economic values (profitability/business expansion/capital

operations, as head of the business units, a key position in the

At the same time, we are promoting integrated group man-efficiency) and social values (non-financial indicators/target so-main organization. Under the system, we identify talented per-agement to achieve “management that leverages human re-ciety) respectively to be achieved by FY2030. (For details, seesonnel in our Group and also appoint those who are familiar withsources.” People and business are inextricably linked. Without

and the social relationship capital we built with local governments, universities, and other entities in each region.

14

We will create corporate value through truly integrated
group management, total optimization of management
resources, and investment in intangible assets.

AIR WATER / Integrated Report 2023

the ability to earn even more revenue.
As a company that achieved a trillion-yen mark, what can
we do to help solve social issues? We are determined to takea higher perspective, make better use of the assets we have
today, and continue to take on the challenge of creating a newera.

AIR WATER / Integrated Report 2023

15

01

MANAGEMENT MESSAGE

and supply, and related backup and maintenance. Together, we

commercialize hydrogen and CCU*, for which new demand iscreated the de facto standard model for the supply of nitrogen

expected against the backdrop of decarbonization.

gas to semiconductor plants. Since then, we have continued to*stands for Carbon dioxide Capture and Utilization.

improve our plants by utilizing data from the field as well as de-

As COO, my key role is
to lead our growth strategy,
including the extension
into new growth areas.
President and Representative Director
Chief Operating Officer (COO)

Ryosuke Matsubayashi

velop technologies to adapt to changing needs, such as higher

In India, we have earned trust through stable and safe op-

efficiency and larger flow rates. Those efforts laid the founda-

erations with superior operation/maintenance technologies

tion for our electronics business (ref. p.48), which is now one ofthrough large-scale M&As of steel on-site bases in the eastern

our growth drivers.

and southern parts of the country, and have gained the third

In the past, industrial gas was produced in large concen-

largest market share in the world’s fastest growing market. In

trated volumes at industrial complexes in the Gulf Coast area

addition, we have received many new inquiries for steel onsite

and then transported to areas of demand for sale. However,projects, and recently received an order from SAIL, India’s

we developed a decentralized supply chain by installing VSUs,

government-owned steel company, to supply onsite gas to its

small and medium sized liquefied gas plants, in the outskirts of

Durgapur steel plant in the eastern India. The Group’s engi-

those areas as demanded. It is expanding as an innovative com-neering capabilities strongly support our strategy to become an

munity-based gas supply model that can contribute to the risk

industrial gas manufacturer with a strong presence in the globalof decreasing on-site plant locations due to Japan’s changing

market, especially in terms of “quality,” and contribute to theindustrial structure and supply chain troubles caused by abnor-

expansion of our growth areas. (ref. p.44)

mal weather conditions.

In the Electronics business, we are currently constructing on-

Such competitiveness as our improving technologies andsite plants for large-scale semiconductor factories for CMOS

a community-based foundation have also helped expand oursensors, DRAM, NAND flash memory, and other products at sev-

Group’s business domains from industrial gases to medical

eral locations in Japan. In response to strong investment in newcare, food products, and other areas. We will leverage theseand additional semiconductor plants in Japan, we are expanding

strengths to further expand our growth areas and create new

related businesses based on on-site gas supply. Concurrently,

businesses moving forward.

we will grow our business by developing products for the growing
markets of semiconductors and the environmental field.

To seek further growth areasand new businesses

As of April 1, 2023, I have been appointed President and Representative Director and COO (Chief Operating Officer) of AIR

16

History and growth strategy of ourindustrial gas business

Creating new businesses
We are also proactively creating new businesses that start with

Expanding growth areas

solutions to social issues. At present, we are building a regional

Currently, we are expanding our overseas business (especiallyrecycling-based clean energy supply chain in Hokkaido thatin North America and India) and electronics business, both ofutilizes biogas generated from livestock manure, and we arewhich we have designated as priority growth areas.

steadily producing results. This is exactly the kind of new business that only our Group, which has been dealing with local

WATER INC. I am very proud to be leading the business execu-

Before discussing our business growth strategy, I need to ex-

In North America, we were a late entrant into a mature mar-tion at a time when the Air Water Group is entering a new stage

plain our steps so far in the industrial gas business, where we

ket where industrial gas majors hold approximately 85% of theof its history, having achieved 1-trillion-yen in group revenue as

started. The domestic industrial gas market peaked aroundmarket share. Therefore, we first established a basic business

Furthermore, as food security and food self-sufficiency be-its goal set since 2010.

2010 and has since stagnated in line with the decline in crudeof cryogenic equipment, which is our area of expertise, withcome social issues, we are strengthening our “fruit and vege-

My role is to work with the CEO to develop and lead a growth

steel production. Under such circumstances, we continue togas majors and dealers as our customers. At the same time,

table distribution and processing platform,” which crosses thestrategy for 2030 and beyond, based on a policies of “expandingachieve sustainable growth by adapting to changes in the busi-

we have differentiated ourselves from the industrial gas majors

value chain from procurement, processing, and sales of fruits

growth areas,” “creating new businesses,” and “strengthening

ness environment and users. The reasons for this sustainable

by staying closer to the local gas dealers and users through aand vegetables with logistics capabilities that link production

profitability of our existing businesses.” I am willing to fulfill mygrowth include the development of technologies such as the

proposal which combines plant engineering and VSU models.

areas and consumption areas. In February 2023, a collabora-

responsibilities to the fullest to meet the expectations of ourhigh-purity nitrogen gas generator “V1” and gas total system,

Since 2022, we have acquired gas dealers in several regions

tive structure was formed with VEGETECH Co.,Ltd., and DELICA

stakeholders.

a business model based on these technologies, and a regionaland have also begun construction of an on-site plant in New

FOODS HOLDINGS Co., Ltd., trading companies specializing

strategy based on the deployment of the small- and medium-

York State, our first in-house manufacturing facility. In addi-

in fruits and vegetables. In October, Marushin Seika, a middle

sized liquefied gas plant “VSU”.

tion, entered the helium supply business, which covers thewholesaler in Fukuoka Prefecture, joined our Group, enhancing

We developed the “V1” in 1980 and devised a total gas sys-

entire North American region. Going forward, we will continue

the stable supply system and developing new production areas

tem that covers plant design and construction, gas production

to broaden our supply chain with the VSU model, as well as

to diversify risks.

AIR WATER / Integrated Report 2023

issues in Hokkaido, can offer.

AIR WATER / Integrated Report 2023

17

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MANAGEMENT MESSAGE

COO MESSAGE

Technology strategy for further growthareas and new businesses
To date, we have evolved in the industrial gas business by grow-enhance profitability, we also aim to improve capital efficiency

new project investments, we will establish a process whereby

by optimizing inventories and shortening the CCC (Cash Con-the Investment Committee reviews the “seed” stage, followed

version Cycle).

by the verification process.

ing existing businesses, diversifying into related industries, andTraditionally, the criteria for business valuation did not

expanding overseas while developing its core/related technol-change from business to business, and business profit and loss

Financial discipline and capital efficiency indicators

ogies and conducting M&As. The acquisition of a wide variety

was used as the main criterion for all the businesses. Howev-

While we plan an aggressive investment strategy, we will main-of development personnel, technologies, and other resources

er, mature businesses and growing businesses should not betain a sound financial discipline. Specifically, we have set thethrough this process has been a major strength of our group.

evaluated on the same scale. Going forward, we will consider

target range for the ratio of equity attributable to owners of the

In May 2023, we reformed our organization for the technol-each business individually and, if necessary, combine multiple

parent (to total asset) at 36-40% and the target range of net D/ogy development structure. We have established a structure

indicators such as ROIC and other capital efficiency, market

E ratio at 0.8-1.0 times. In terms of capital efficiency, we havethat accelerates the process from development to commer-

growth, and social contribution in a composite manner to estab-

set company-wide targets for ROE (return on equity attributablelish evaluation indicators that match the characteristic of eachto owners of the parent) and ROIC (return on invested capital).

business. Given that, we strive to strengthen the profitability

Now we aim to increase them from 9.7% ROE and 5.6% ROIC

and improve the productivity of each individual business. The

as of FY2022 to more than 12% and 8%, respectively.

cialization in all business areas. Also, the new “Gas Technology
Development Center” is now in place. We are focusing on gas
technology development as the base for all our businesses anda source of synergy.
In our overseas business, we launched the “Global & Engineering Group” to strengthen our engineering structure, anessential technical area for the industrial gas supply, and centralized the management function of the overseas business toenhance global governance.
We will continue to upgrade our diverse technologies andprovide solutions to increasingly complex social issues with our
combined technological development resources, thereby creating new social value.

To strengthen profitability

goal of these initiatives is to raise the operating profit margin of
the entire business to at least 10% by FY2030.

Shareholder returnchange in our business strategy as one of our Pillars to SuccessOur basic policy is to increase the return of profits to sharehold-(Materiality). We are committed to carbon neutrality in terms

Disciplined capital investment and M&A

ers as one of the most important management issues, whileof both our “responsibility” to reduce GHG emissions and ourContinuous investment is essential as well to expand our growthstrengthening our management base to constantly improve our“contribution” to a decarbonized society through our products

areas. We are planning to make vigorous capital and M&A in-

corporate value, and to increase dividends by increasing ourand business. As an example of how we are contributing tovestments, mainly in the Overseas and Electronics.

profits. Specifically, we aim for a dividend payout ratio of 30%

GHG reduction through our business, we are using gas control

In order to maintain sufficient financial security in case ofor more as shareholder return and stable dividends that match

technologies, such as refining, separation, and storage, devel-

prolonged stagnation in economic activity and to concentrate

our business performance. For FY2022, the year-end dividend

oped in our industrial gas business, to supply biogas, methane,management resources in growth areas, we will make future

was 28 yen plus a special dividend* of 4 yen per share. As ahydrogen, and other gases, and to develop carbon neutral

M&A investments and capital expenditures even more careful-result, the annual dividend for FY2023 was 60 yen per sharetechnologies that contribute to low carbon and decarbonization

ly. As part of this effort, we will thoroughly examine ROIC andas a total of 28 yen for the interim, 28 yen for the year-end, andsuch as CO2 capture and utilization. To reduce our GHG emis-

enhance our investment verification function.

4 yen for the special dividend, making a dividend payout ratio

sions, we are also prioritizing energy conservation activities

33.9% on the consolidated basis. This represents a dividend

such as low-carbonization of energy used in our production

increase of more than 2.5 times over the past 10 years.

processes and investment in energy-saving equipment. We will

In fact, we started reviewing the functions of the Investment

18

In existing businesses, mainly in Japan, we are pursuing several

Committee this year as well as verifying our previous invest-

initiatives to further increase profitability. Existing business-ment projects. The previous Investment Committee focused on

es will become a solid earnings base if they are made morechecking the profitability of investments, identifying risks, andefficient and improved. Improving the profitability of existingsupporting solutions. However, in the new Investment Commit-

businesses will be a prerequisite for allocating management re-tee, I, as the president, will make a decision on whether or not tosources to new businesses and growth areas. Therefore, we will

*To commemorate 1-trillion-yen revenue, which had been a group-wide

also work to expand the use of renewable energy in stages andeffort since 2010.

build a low-carbon logistics business.

make an investment based on an evaluation of the business po-

To realize a sustainable society

Message to our stakeholders

review our current position in each business area, or what we

tential of the project by the investment planning and the head

The most important premise of our Group’s business activities

The Air Water Group has a diverse range of businesses, humancall a full inspection of our business at first, then take measuresoffice administration divisions. The decision process includes

is “to be sustainable in terms of the global environment.” All of

resources, and technologies. We have an “All-Weather” man-for the higher profitability based on possible synergies to bequalitative and quantitative assessments of consistency with

our Group’s businesses are based on the Sustainability Vision

agement base that is resilient to changes in the business envi-

generated in our Group.

the company’s overall strategy, synergies with existing busi-

for 2050 and Purpose. We do our business with the vision toronment, a foothold for further growth, and enough connec-

Toward the integrated group management (ref. p.42), we

nesses, the probability and execution structure of the business“achieve a recycling-oriented society through coexistence with

tions with local communities, customers, local governments,

will continue to reorganize our group companies. Through theplan, geopolitical risks, exit strategies, and other factors. We

society and the earth” and the Purpose of “meeting society’s

and business partners. I am convinced that if we can maximize

business inspection, also ensure price management for risingthen make the most appropriate choice for the future growth ofneeds with nature’s blessings.” Through our business activities,

the potential of these management resources, we can growcosts. Further more, we will continue to take steps to strength-

our Group.

we aim to realize a recycling-oriented society, zero environmen-

even higher and create more values.

en the profitability of existing businesses from various angles,

What is important in investing in a new business is the pro-tal impact, and the revitalized global environment. We keep

In order to enhance our corporate value from both social andincluding reviewing low-profit projects, optimizing personnel

cess and story of how to sprout the “seed” of the business, nur-

moving forward to become a corporate group that continues toeconomic perspectives, and to grow our Group into an “essen-

allocation, improving the efficiency of logistics and procure-

ture it, and develop it into a successful business. We believe it is

be chosen by local communities and customers, and that real-tial” member of our society, I will fulfill my role by implementing

ment, and the nature of our business bases, to do strengthen

important to formulate a hypothesis of that story in the planningizes the well-being of our employees.

our strategies, sometimes cautiously, sometimes boldly.

the profitability of our existing businesses. Along with these tostage and execute it after logical verification. So, in verifying

AIR WATER / Integrated Report 2023

In particular, we have reflected our response to climate
AIR WATER / Integrated Report 2023

19

02

VALUE CREATIONThe Path to a Trillion-Yen Revenue
Achieved 6.4% CAGR in revenue and 9.9% CAGR in operating profit over 30 years,
while improving ROE

2022 — The 3rd founding stage

Air Water was originally started by three companies with different

Portfolio” that can realize stable growth under any environment.

histories and cultures, Hoxan, Daido Sanso, and Kyodo Oxygen,

To this end, we expanded not only our “industrial businesses”

who came together to contribute to industry and society throughsuch as industrial gas and energy, but also our “lifestyle business-“air and water,” and then established through two mergers ines” such as medical care, agriculture and food, and seawater,

1993 and 2000. Then the company has achieved a trillion yen ofwhile making full use of aggressive M&As.

revenue in FY2022. The cornerstone of this effort was the estab-Over the 30 years since Daido Hoxan was established in 1993,

lishment of Daido Hoxan Inc. in 1993, which was followed by the

our CAGR (compound annual growth rate) has reached 6.4% fordiversification of the company’s business in addition to the expan-

revenue and 9.9% for operating profit. ROE has also made a sta-sion of its overall capabilities as an industrial gas manufacturer,

ble growth as we expanded our business while improving capitalwhich is its mainstay business.

efficiency.

After 2000, when Air Water was in the “first founding stage,” weFrom FY2022 beyond, our “third founding stage,” we are now

established a solid foundation as an industrial gas manufacturer,

aiming to create new corporate value by solving social issues

while developing its business to diversify. After 2010, when it en-

through synergies that combine the diverse businesses, humantered the “second founding stage,” we established an “All-Weather

resources, and technologies of our Group.

Creating new corporate value by solving social issues

1993 —
Emerged as a strong, integrated industrial gas
manufacturer after two mergers

2000

1.0049trillion yen

2010 — The 2nd founding stage
Expanded business areas
to become a 1-trillion-yen company
Established the All-Weather Portfolio

FY2022
Operating profit*2

62.2

billion yen

2000 — The 1st founding stage
Solidified foundation as a comprehensive
industrial gas manufacturer
Also expanded business areas through M&As

FY2022
Revenue*1

471.8 billion yen

33 billion yen

Merged with Kyodo OxygenStarted as AIR WATER
1993

FY2022 ROE

9.7%

220.8 billion yen

Hoxsan and Daido Sanso merged

7.5%

7.0%
13 billion yen

2000

1993

%%
1919

%%
2121

8 %8 %

Medical
Medical%%1818

EnergyEnergy21 %Other
21 %
Other
Other
Other

Other
Other

Other
Other

1993

1010
%%

%%
5353

Medical
MedicalIndustrial
Industrial
Gas
Gas

1616
%%

EnergyEnergy2000

3 %3 %
Agriculture
Agriculture
Food
and
%Food
8and

8%

Medical1414% % Medical
5555%%
Medical
MedicalIndustrial
Industrial
Gas
Gas

18 % 1010
18 %%%EnergyEnergyEnergyEnergy

2010

1717
%%

1818
%%

3838
%%

19 %Other
Other 19 %
Other
%
5
5 %

Other

Seawater
SeawaterIndustrial 10 %Industrial
10 %7 % Medical
Gas
Gas
Medical 7 %%Logistics
53 %53Logistics
Industrial
Industrial
Gas
Gas

17%
17%

ChemicalChemical

16 %1616%%

16 %EnergyAgriculture Energy
Agriculture
and
Food
and
Food

2222
%%

18 %

Other
Industrial
Gas %IndustrialGas3

4 %4 %

55 %Agriculture
and Food

ChemicalChemical

7%7%Industrial

55 % 14 %MedicalIndustrial
Energy Gas
Gas Energy

2222
%%

Medical
Medical

17 %

18 %

Other

Other

3%
Agriculture
and Food38%

Industrial
Gas

2010
14 %

Medical10%

Energy10
17%%EnergyChemical%
38%5

SeawaterIndustrial
Gas7 %
Logistics

17%

16 %

Agriculture

Chemicaland Food

17 %

Other

5%

Seawater

2021 2022

22 %

22 %

Industrial Gas Industrial Gas

7%

Logistics

16 %
22 %
Agriculture*1 Net sales until FY2018 (Japanese
Accounting Standards)

Chemical
2021

4%

*2 O
 rdinary income until FY2018

Chemical7%7%(International Financial Reporting

4%

Energyand Food
MedicalEnergy(Japanese Accounting Standards)
Standards applied from FY2019)22 %Medical*Pie charts show the revenue composition by business segment.

20

AIR WATER / Integrated Report 2023

AIR WATER / Integrated Report 2023

21

02

VALUE CREATION

Source of Value Creationin the Air Water Group

Origin of the company nameOur business originated in the industrial gas business, which produces oxygen and nitrogen fromair. Later, we also started to engage in the seawater business, extracting magnesia and other active ingredients from seawater. The Earth we live on is surrounded by two large natural spaces:

Origin of the logo

the air and the oceans. The great natural environment of air and water has nurtured technology
Air Water’s symbol is an oval with a width-to-height ratio of 10:9. This imitates the “shape of the Earth.”in all fields up to the present day. We have come to believe that the potential for our future busi-

Although the Earth appears circular at first glance, it is actually slightly elliptical with an equatorial diam-ness lies in air and water, at their interface, and where they coexist.

eter of about 43 km larger. Also, the logo color, deep blue, represents water, which covers approximately

The company name “AIR WATER” embodies our philosophy of contributing to society and the

71% of the earth’s surface, so that the logo design represents the Earth itself.

Global Resources
Making full use of nature’s
blessings for our businessAir

environment, rooted in the irreplaceable resources of air and water for humans and nature.

“Indispensable” products
Sustaining the global
environment leads tosustainable growthand services

GLOBALRESOURCES

Developing businesses that benefit
the society in wide areas,from manufacturing to people’s lives

Industry(Manufacturing)

People’s
Lives

Water

SOCIETY
Delivering without everrunning out

Returning to nature

Societyafter serving society
Business Areas
Energy Solutions

Digital & Industry
Industrial Gases
Functional Materials

22

AIR WATER / Integrated Report 2023

Electronics

Health & Safety

Agriculture & Foods

OthersEnergyMedical Products

Consumer Health

Foods

Seawater

Green Innovation

Medical Services

Safety Services

Natural Foods

Logistics

Agriculture

Global & Engineering

AIR WATER / Integrated Report 2023

23

02

VALUE CREATION

1950s

Daido Sanso

AIR WATER’s Value
Creation History

Liquefied oxygen plant into operation

Started energy business

Introduced technology to “liquefy”

Began selling LP gas for residential

oxygen at cryogenic temperaturesuse, in the search for a new businessto meet the demand for mass pro-in Hokkaido, where industrial demand

duction and transportation. Despite

was scarce. In 1963, released Japan’s

the large investment, made a bold

Sakai Plant

first Unit Bath product by Hoxan anddecision to shift the technology and established itself as

further developed its business close to LP gas sales by Hoxan

an industrial gas manufacturer.

consumers.

The Air Water Group is characterized by a diverse business network, a solid business
Hoxanbase across Japan that was cultivated through the industrial gas business of our ori-

Hoxan

1960s
1970s

Started the industry’s first on-site gas supply

gin, and the diversity of our technologies and human resources resulting from growthHoxanand development driven by M&A.

While the heavy chemical industry

In this chapter, you will see how our Group has acquired these strengths one by one.

was making great strides, the com-

Entered frozen food businesspany attracted industry attention by

Started food business, using surplus

providing a sole on-site gas supply toliquid nitrogen generated during oxy-a steel mill in Hokkaido. During thisgen production to flash-freeze freshtime, Kyodo Oxygen was established, followed by Daido Oxygen’s

agricultural and marine products frombecoming the first on-site gas supplier to petrochemical plants.

Hokkaido prefecture and sell them as

1929 —The three former companies were born
A time when “oxygen users” started companies with a mission and developed their businesses.
They had no prominent founders, no inventions, and no profits to be made.
Air Water’s predecessors were established to meet the needs of the times and have a history of overcoming adversity as late starters andgrowing healthily with a variety of people and creativity.

Hokkai Sanso 1929

Daido Sanso 1933

Kyodo Oxygen 1962

(Renamed Hoxan in 1966)

Daido Sanso

1980sfrozen foods.
Daido Sanso

Developed nitrogen gas generator “V1”

Invested in seawater businessAs demand for high-purity nitro-

Made capital investment in Tateho

gen required for semiconductor

Chemical Industries Co., Ltd. boasting

manufacturing rapidly increases,

the technology to extract and sinterestablished a Mini On-Site businessmagnesia from seawater and thatto supply the gas by installing it in-

to control crystals. This was the firstside the customer’s plant. The “V1,” developed in-house, has

M&A in Air Water’s history.

Magnesia crystal

increased sales volume as the optimal gas supply system forsemiconductor factories.

1993

Hoxan and Daido Sanso merged - Launched “Daido Hoxan,” pioneering a reorganization of the industry The merger of the two companies, whose primary business areas are Hokkaido and western Japan, expanded the business area to a nationwide scale. The acquisition of a combined business based on industrial gas from Hoxan was the starting point for the diversification.

24

Established to save lives and serve theFounded by a group of vibrant Osaka

Founded as a subsidiary of Sumitomodevelopment of Hokkaido under thesmall and medium-sized entrepreneurs

Metal Industries to specialize in supply-

2000

devastating conditions of the Spanish

to produce and procure their own ox-

ing oxygen to the company’s steel mills,

Daido Hoxan and Kyodo Oxygen merged - Created “AIR WATER” through two mergers -flu epidemic of the time, which did notygen, which before the war had been

during the period of rapid economic

The acquisition of the on-site gas supply business for steel mills, which is the upstream of industrial gas, has enabled vertical integration

provide an adequate supply of oxygen.

preferentially sent to the munitions in-growth in Japan and rapidly increasing

with the downstream, which was expertise of Daido Hoxan. This has enabled us to establish a business structure as an industrial gas man-

dustry.

demand for steel.

ufacturer that can provide detailed services, from on-site supply as the basis to community-based cylinder supply.

AIR WATER / Integrated Report 2023

AIR WATER / Integrated Report 2023

25

02

VALUE CREATION

2010s —

2000s —

The 1st Founding Stage of AIR WATER

The 2nd Founding Stage of AIR WATER

From manufacturing to services — the era when we solidified its position as an industrial gas

Toward 1 trillion-yen revenue — the era we made successful mergers and acquisitions throughmanufacturer and laid the groundwork for diverse business development.

diversification, leading to a diversified “All-Weather” portfolio.

In response to the needs of the era that has shifted from mass consumption of gas to diversified usage of gas, we have acquired industrial

Amid the stagnation of the domestic manufacturing industry due to the Lehman Shock, the Great East Japan Earthquake, and the strong

gas-related businesses such as carbon dioxide gas, hydrogen, and gas plant production technology through M&As. Along with building ayen, we steadily developed its industrial gas supply network while expanding our lifestyle-related business areas such as medical care, ag-foundation for diversification, we further strengthened our community-based sales structure and oriented our solution services to solve

riculture, and food through M&As. We have built a business portfolio that can achieve stable growth in any economic environment, and at

customer issues.

the same time, laid the groundwork for future overseas expansion.

2000sAcquired carbon dioxide/hydrogen gas business

Expanded our gas supply network

Enhanced our lifestyle-related products and services

Began production of ham and sausage

Decentralizing our manufacturing

Through M&As, we have expanded hygiene materials, homehydrogen supply businesses,

Entered the ham and delicatessensites through VSU deployment also

health care, and dental fields in medical area, as well as bever-respectively, and built our own

business upon taking over Hayaki-

contributed to BCP in the event of aage and sweets in agriculture & foods area.

production and sales network.

ta plant (in Hokkaido) from Snowdisaster. As of 2023, we have estab-This was a move that enhanced

Brand Food. It was the trigger for alished 22 bases throughout Japanleap forward in the frozen food busi-

and have built a solid structure forness during the Hoxan’s time.

our domestic industrial gas supply

Obtained carbon dioxide andour comprehensive proposal

Kawasaki Plant

capabilities as an industrial gas

business.

manufacturer.

Hydrogen Trailer

Attained air separation plant manufacturing technology
Established a joint venture with
Kobe Steel, Ltd., a manufacturerof deep-cooled air separation

Started chemical business

Extended the electronics field

Launched coal chemicals businessWe have shifted our chemicals busi-

that operates inside a steel mill. This

ness to a business structure centeredbusiness was transferred to Nippon

on functional chemicals. In parallel,

Steel Corporation in 2019, and we

we have expanded our product line-

restructured our business around func-

up for semiconductors, including gas

tional chemicals for semiconductors.

purifiers, thermal control equipment,

That built the foundation of our current

plants. A full range of plant de-Chemical products

functional materials business.

sign and construction from small
venture would later lead to an

In 2013, we acquired a local industri-business overseas.

Entered the gas piping installation in

al gas company in India, and in 2014,

hospitals by capital alliance with Kawa-

we started a gas supply business insaki Safety Service Industries Co. The

Vietnam. In 2019, we acquired onsite

collaboration connected by gas was theoperations in eastern and southern

beginning of the later expansion of the

India and began full-scale businesshospital business.

development.

high-efficiency plants in the vi-

Furthermore, in 2015 and 2018,

cinity of demand areas to reduce· Capital participation in Ci Medical
Gas purifiers· Expanded injection needle business

Agriculture & Foods

fledged entry to the agriculture andfoods business· Entered the processing/distribution
Jamshedpur, India

promoted cooperation with regional suppliers.

our group. Established the seawa-

products· Began contract manufacturing of fruitand vegetable-based beverages· Entered fruit and vegetable retail

Carbon dioxide lorry· Started sweets manufacturing business2022

ter business together with Tateho

2022 —

Achieved 1 trillion-yen revenue

Chemical Industries Co., Ltd. which

Toward achieving “terrAWell30”

After the pandemic, the group revenue achieved a trillion yen in FY2022. We are inte-

manufactures magnesia products
from bittern.

AIR WATER / Integrated Report 2023

business of Hokkaido agricultural

technology.

Ako city, Hyogo Prefecture, joined
The first VSU, Niigata Ekisan

Co.,Ltd.

the beginning of our overseas expansion based on engineering

Nihonkaisui, a salt manufacturer inparable to that of large plants.
VSU in Niigata in 2004, we havesanitary materials

in Malaysia and the United States, respectively. These marked

Expanded seawater businessliquefied gas at a low cost comStarting with the installation of a· Grouped Kawamoto Corporation for

we grouped cryogenic equipment manufacturing companies

distribution costs and supply· Entered the dental materials business· Opened a 7-hectare solar-powered

Extended medical business

which looked to install small,facility construction· Expanded home healthcare businessand precision polishing pads.

engineering structure essential for developing industrial gas

Developed our own plant “VSU,”· Advanced into operating room and ICU
The 22nd VSU,
Chiba Ekisan

Built a foothold for overseas

Shinko Air Water Cryoplant

Installed VSU in areas with no gas supply

Health & Safety

glasshouse plant in Chitose, a full-to large was enabled. This joint

26

2010s

Saltworks of Nihonkaisui Co.

The 3rdFounding Stage

grating the directions of our diverse businesses into a new growth axis, “Global Environment” and “Wellness,” to solve social issues through our business activities and achievesustainable growth.
AIR WATER / Integrated Report 2023

27

02

VALUE CREATIONThe Driving Force for Value Creation

M&A of AIR WATER is not just “add up.” It has pursued to create new value by “multiplication” by successfully integrating organizational
culture, human resources, and technology with existing businesses. Our M&As have facilitated the creation of common management andExpansion of Business and Diversity of Human Resources
through M&As

synergies between businesses, enabling us to maintain and create high market share products and services. This is because we have promoted “related-type diversification,” focusing on the relatedness of core technologies, areas, and business models of industrial gases.
Semiconductor Related
Equipment and Components
Business

Chemical

Peripheral business areas

Acquired Coal Chemical Company
from Sumitomo Metal Industries. Ltd.

Functional Materials
Business

Established a plant company jointlywith Kobe Steel, Ltd.

expanded from industrial gas

Electronics
Functional Materials

Transferred the Coal Chemical Business, converted it to abusiness focusing on functional
chemicals

Global & Engineering*

Began sales of residential
propane (LP gas)

Nitrogen

EnergyDeveloping decarbonization
solutionsStarted LNG supply business

Argon

Medical Products

Dental Business

Carbon dioxide gas
Hydrogen

Medical Services

SPD and Sterilization Business

MedicalHeliumAerosol Business

Injection Needle Business

Acquired medical facility construction company
from Kawasaki Heavy Industries, Ltd.

SeawaterAgriculture
and Food

Salt
Magnesium

Safety Services

Operating Room Design
and Construction Business

Foods

Confectionery Business

Agroprocessingand Distribution
Business

Agriculture

Fruits and Vegetable
Retail Business

SeawaterSalt Manufacturing
Business

Magnesia Business

Agriculture& Foods

Natural Foods

Beverage Manufacturing Outsourcing Business
Opened glasshouse farm,
entered the agricultural business

Health& Safety

Consumer Health

Sanitary Materials Business

Acquired Snow Brand Foods’ Hokkaido Plant,began Ham and Deli business

Began frozen foodbusiness usingliquefied nitrogen

Energy Solutions

Green Innovation

WELLNESS

Global Resources

EnergyOxygenDigital& Industry

Industrial Gases

Expanded into India and North America

Industrial gas

GLOBAL ENVIRONMENT

Developed nitrogen gas
generator V1
for semiconductors

OTHERS

Logistics*Transferred into Other Businesses from 2023

Cumulative number of M&A companies since 2000
Cumulative
total of245

245

companies

An organizational culture integrating
various cultures and values is fostered
Number of group
employees

Number ofoverseas employees

Group R&D personnel

Engineering
human resources

20,109387

members330

members(As of the end of March 2023)

2005

Numberof group companies

276

28

2010

2015

2020

2022

joined the group through M&As, we have taken advantage of

Digital& Industry
Nitrogen*¹

low cost and low risk. We promote structural reforms such as bold capital investments and integration/regeneration tofurther refine our competitiveness.

AIR WATER / Integrated Report 2023

Argon*¹

Oxygen*¹

23%

30 %

34 %

Energy Solutions
Dry ice*¹

47%

Magnesia for directional
electromagnetic steel sheets*²30 %LNG tanker truck*³

80 %WELLNESS
Health & Safety

human resources with diverse experience and capabilities.
We have created synergies with existing businesses by capturing non-core areas and other areas of major companies at*1 Source: “Gas Diorama 2023,” Gas Review, Inc.
*2 In-house research (global shares)*3 In-house research*4 Source: “Gas Medicina 2023,” Gas Review, Inc.

GLOBAL ENVIRONMENT

3,126

In addition to the strengths of each business that have2000

Maintain high market share in diverse business areas

Medical oxygen*4

38%

Medical gas
piping construction* 4

45%

Agriculture & Foods

OthersDry-cured ham production*³

Industrial salt*³

30 %

42 %
AIR WATER / Integrated Report 2023

29

02

VALUE CREATION

Regional Strategy

Regional business companies

Creating value in a way only possible
with our community-based business baseConnecting customers and the Air Water Group to build a business
The origin and significance of the strategy
volumes at low cost at large plants located along the Pacific coast,
Regional strategy is our core strategy that has been supporting

where steel mills and chemical plants are clustered, and the gas

domestic industries and local communities. Unlike other manu-

was transported by tanker truck across the country.

facturers, Air Water has been committed to “direct sales” since

However, we have recognized changes in the domestic in-

the days of our predecessors, selling the gas we produce directly

dustrial structure, such as the emergence of the semiconductor

to our customers. Such orientation laid the foundation for the inte-industry located inland and the contraction of the heavy industry.

grated production and sales system that continues to this day.

Since 2000, we have deployed our highly efficient compact “VSU”

Partnerships

Fundamental Strengths

Collaboration with local
government and industry

Leverage our customer contacts

パートナーシップ

基盤となる強み

アライアンス・M&A
Alliances and M&As

Marketing power

Diversified businessMfg./Log./Sales bases

by conglomerate

Business Infrastructure

manufacturing bases. Thus, we have established a locally pro-Social problem
solving business

Cross-industry business

Growing scale and revenue baseuct in terms of quality, the transportation of the product is very

duced and consumed model of gas supply for the entire Japanese

We commercialize solutions to social

We conduct solution-based businessWe strengthen earnings base throughcostly. This enables a business model in which a manufacturingmarket. Each of the newly based regions has deepened its part-and regional issues through our tech-by leveraging our diverse business

reinforcing existing businesses and cus-base is located close to the consumption area to create a com-nerships with local companies and municipalities, making it anological innovation, etc.

domains.

tomer-oriented marketing models.

mercial zone. In the past, the gas was usually produced in large

place to explore new growth drivers.

The industrial gas business is an equipment industry based onplants in 22 locations in Japan, where there were previously nocommon air. In addition to the difficulty of differentiating the prod-

1929

Social capital of the regional companies

Started from localized small lot sales

1954

Our starting point - the two predecessor companies without large

Started sales of liquefied oxygen and LP gas

gas production facilities began downstream small-lot sales, such

In Osaka, we sold liquefied oxygen directly without distributors. In

as cylinder gas.

Hokkaido, we launched the LP gas business for households, and1976
Reinforced “Regional Strategy” structure
Established a company dedicated to downstream distribution,
which is the origin of our regional operating companies now, andstrengthened in-house integrated system from manufacturing to
supply.

1995
Promoted strategic “federated and partnering”
management

1993

102.8billion yen*
We established the “Hometown Support H Program” to support all municipalities in Hokkaido,
as a company nurtured by Hokkaido and orient-

Strengthened sales network through two mergers

Agreement with Kumamoto Prefecture (Governor Kabashima) to locate a business

Expanded sales base network from business areas centered on

We are planning to build a complex business base in the elec-

Hokkaido and western Japan to all over Japan.

support initiatives to solve their local challeng-

tronics field in Kumamoto Pref., where large-scale factories

es. Also, we plan to build an open innovationof semiconductor device manufacturers are being built. While

promotion facility to support the region throughcontinuing to focus on industrial gas, we will build our cryogenic

our business activities.

2004

each region. Simultaneously promoted “federated” managementthat boosts the downstream areas and “partnering” management

Developed new bases in cooperation with leading industrialthat emphasizes collaboration with other companies.

gas suppliers in each region to maintain/increase market share2010

through areal expansion.

Moved branch functions into eight regional operatingcompanies

2020

To make the regional business a core pillar of our growth, we have

Launched the three new regional companies

reorganized regional operating companies specializing in sales

Consolidated the eight regional operating companies into three

into eight companies in eight blocks across Japan, and Air Water’s(Hokkaido, East Japan, and West Japan) in order to achieve a cor-branch functions were integrated into each company.

porate scale that can grow on its own with each region.

AIR WATER / Integrated Report 2023

AW Hokkaido

expanded the service bases.

Enabled locally produced & consumed gas supply
by VSU

Established sales companies (regional operating companies) in

30

Increase presence in the region and play a leading role to grow business in Japan.

ed to new growth there. We will donate a totalof one billion yen to this program by 2030 andlogistics base for agricultural products in Kumamoto, one of
the leading vegetable producing areas in Japan, with a view toimproving transportation efficiency to the Tokyo metropolitan/
Kansai areas. We are creating new businesses based on regional
characteristics.

AW West Japan

77.5 billion yen*

AW East Japan86.5billion yen*

Press Conference with Hokkaido
Prefecture (Governor Suzuki)*Revenue (actual) in FY2022

AIR WATER / Integrated Report 2023

31

02
02

VALUE CREATIONCREATION 価値創造ストーリー

Magnesia

In addition to sales of LP gas, kerosene, and LNG etc., this group develops technologies aggressively for
low-carbon and decarbonization. It also aims to establish a resource-recycling energy supply model thatpractices local production for local consumption.

Green Innovation

LNG

LNG transport equipment

Medical facilities**In Safety Services as it is operated
by AIR WATER SAFETY SERVICE INC.

Gas fire extinguishingequipment

Cosmetics

Injection needles

Sanitary materials

Agriculture & Foods

Having expanded from frozen food to the following areas, we offer a wide lineup fromcommercial to retail.

Aerosol

Natural Foods

Foods

Ham & sausage

Biomethane07

Polishing pads

DATA

Electronic materials

06

Sterilization

Consumer HealthQuinone products

DentalSafety Services

SPD (logistics management of medical products)

GOVERNANCE

Information electronicmaterials05

Gas purifier

BUSINESS

Special chemical materials

Functional Materials

LP gas / Kerosene

Home healthcare04

On-site gas supply

EnergyMedical equipment

Medical Services

Electronics

Energy Solutions

Medical gas

SUSTAINABILITY

Hydrogen

Medical Products03

Gas application

Besides gases indispensable to the medical field, this group offers a wide variety of products andservices such as equipment installation, SPD, and sanitary materials. It also contributes to safety
and security in the safety services field.

STRATEGY

Industrial gases (For on-site / tank trucks / cylinders)

Health & Safety

02

Industrial Gases

Besides a stable supply of industrial gases to support a wide range of manufacturing industries, thisgroup offers a wide variety of products and services that support the entire value chain for thesemiconductor manufacturing industry.

VALUE CREATION

Digital & Industry

WELLNESS

01

GLOBAL ENVIRONMENTMANEGEMENT MESSAGE

ものづくり､暮らしに寄り添った事業
Businesses Close to Manufacturing and Living

Frozen food

Agroprocessing

SweetsFruit and vegetablewholesale

Agricultural machinery

Fruit and vegetable retail

Beverages

Agriculture

Energy-related equipment

OTHERS

LP gas mobile power supply vehicle

Engaged in a wide range of businesses, including Global & Engineering, operating industrial gas
businesses in North America and India; Logistics such as 3PL; Seawater, producing mainly commercial
salt; and Electric power, developing wood biomass power generation.

Industrial gas (North America)

Salt

Vegetable farming

Logistics

SeawaterGlobal & Engineering

Industrial gas (India, SE Asia)

ReCO2 STATION

Environment

Electric power

High-pressure gas transport General cargo transport

Cryogenic logistics center
Wood biomass power generation

Engineering

32
32

High-power UPS

AIRIntegrated
Report
AIR WATER
WATER / /Integrated
Report20232023

Nori (seaweed) &Furikake (rice seasoning)

Artificial seawater

Food logistics

Medical & environmental
logistics

Vehicle modifications

AIR
WATER
Report2023
AIR
WATER // Integrated
Integrated Report
2023

33
33

02

VALUE CREATION

Value Creation Process

In line with the Air Water Group’s Purpose, “Meeting society’s needs with nature’s blessings,” we have integrated the growth vectors ofour diverse business domains into the two axes, “Global Environment” and “Wellness” that can reflect global social issues. We will create
new corporate value through the solution of social problems and realize the Sustainability Vision of “achieving a recycling-oriented society

Our Purpose

through coexistence with society and the earth.” We aim to achieve it by creating synergies among our diverse businesses, human resourc-

Meeting society’s needs with nature’s blessingses, and technologies, which are the greatest strengths of our Group.

2030

Management resources
Megatrends

E
Gr xpa
ow nd
th
in
Ar g
ea
s

Diverse business domains,
High market share products
and services

G

Environm

EnergySolutionsentDigital &Industry“Terra” means the earth in Latin,ing
enth lityng abitre
St roﬁPsocietyallob

Diverse organizations
and human resourcesof the Group

Technology andintellectual property

DiverseHuman
Resources
DiverseBusiness
Areas

Extension ofhealthy life
expectancy,
100-yearlife era

Community-based
business platform

Improvementof the foodself suﬃciency,
Reductionof food lossand “Well” comes from wellness = healthy life.
The name “terrAWell30” represents our aspiration that AW

Restraining
environmental impact
substances

SmartsocietyterrAWell30

Realizing resource
recycling(AIR WATER) will connect the earth and wellness.

Response to
climate change

Economic
Value

Creating
synergies
Coexistence andco-prosperity withlocal communities

DiverseTechnologies

Agriculture& Foods

Solving Social Issues
Wellness(Healthy living)

Health &SafetyWellness
Creating
New Businesses

SocialValue

Ensuring thewell-beingof employees

Reinforcing
Group governance

Sustainability Vision

DecarbonizedMateriality

To achieve a recycling-oriented society
through coexistence with society and the earth▪ Will respond to changes in the global environment and society and provide
economic and social value in a sustainable manner.
▪ Will realize a resource-recycling society, zero environmental impact, andglobal environmental revitalization through our corporate activities.
▪ Will continue to be selected by our local communities/customers andensure the well-being* of our employees.

*Well-being is the state of being physically, mentally, and socially comfortable. In addition to being
happy, it represents a condition in which employees live with a sense of purpose through a range ofdifferent workstyles and platforms to succeed.

34

AIR WATER / Integrated Report 2023

AIR WATER / Integrated Report 2023

35

02

VALUE CREATION

Process to Identify the Pillars to Success (Materiality)

Pillars to Success (Materiality)

We have identified Materiality by considering their importance in building a sustainable society and business in terms of enhancing

We have identified factors below that are highly important from both “perspectives of impacts on business continuity” (horizontal

corporate value. The process includes consideration of the social and business environment, relevant risks and opportunities, andaxis) and “society and stakeholders’ perspectives” (vertical axis). Through innovation that leverage our diverse technologies, we

stakeholder relationships.

will be making our Sustainability Vision a reality.

STEP 1

STEP 2

STEP 3Extract
issuesAssessthe importanceof each issue

Identify
challenges

By recognizing our external en-

By considering our Group’s man-

By using the Future-Fit Businessvironment from a long term per-agement philosophy, Purpose

Benchmark*, we identified thespective and linking the 17 SDGs(“Meeting society’s needs withpillars of success (Materiality)with our business activities.

nature’s blessings”), as well asthat are important to both soci-management strategies.

ety/ stakeholders and our Group.

Materiality Map
Diverse technologies
High
Perspectives of the Society
and Shareholders
Restraining
environmental impact
substances

Wellness(Healthy living)

Realizing
resource
recycling

Ensuring thewell-being of
employees

Coexistence
and co-prosperity
with local
communities
Response to
climate change

Reinforcing
Groupgovernance

Perspectives of Impacts
on Business Continuity*A KPI tool for promoting sustainable management,
developed and publicized by the UK-based FutureFit Foundation.

Materiality

1
2
3
4
5
6
7
36

Response to
climate change

Realizing
resource
recycling
Restraining
environmental
impactCoexistence andco-prosperity withlocal communities

Wellness(Healthy living)

Ensuring
the well-beingof employees

Reinforcing
Group governance

Opportunities

Risks• Using biomass to establish the locally produced and consumed
energy supply system• Switching from petroleum-based energy to low-carbon energy
and offering the related equipment• P roviding decarbonization solutions such as next-generation
fuels (hydrogen, liquefied biomethane)•S tricter regulations on fossil fuel use and CO2 emissions• Shrinking existing energy markets with less demand due
to energy conversion• S everer natural disasters impacting production andlogistics such as storm surges and floods• Providing collection, refining, and purifying systems for industrial
emissions (CO2 capture and fixation, etc.)• Reducing waste by promoting recycling and reuse• Building a waste-recycling supply chain (e.g., treatment systems
for food waste, livestock manure)• Stricter waste treatment restrictions and higher disposal
costs• S preading environmental issues/risks due to resource
depletion, population growth, etc.

• P roviding waste gas refining equipment, water treatment
facilities, and products for waste gas/water and soil remediation• U sing plastic alternatives in drink containers and packaging
materials• Water’s scarcity and worse quality impacting procureme‑
nt/production activities• Higher costs due to tighter regulations on chemical subst‑
ance and plastics• Providing solutions to minimize risks from natural disasters• D elivering products and services that contribute to the bettersocial infrastructure system such as sewage systems• C reating businesses that boost regional employment andrevitalize regional economies• More needs for smart factories and smart agriculture• Declining local economies due to fewer population (fallingbirthrate and aging population) and urban concentration• Operations for severe damage from natural disasters andaging social infrastructure•H igher maintenance costs• D elivering pro duct s and s er v ice s that contribute to theadvancement and remote control of medical care
• Delivering products and services that enable self-medication• S upplying food ingredients that are tasty, safe, reliable, andhealthy• I ncreasing medic al cost s by aging population andextending healthy-life expectancy• Changes in disease patterns, such as chronic and complex lifestyle diseases• Enhancing workstyle and work-life balance through ICT• P romoting employees’ career development and diversit ymanagement• Promoting a workplace environment where employees can workwith peace of mind and in good physical and mental health• D ecreased labor productivity and outflow of excellent
human resources if without appropriate measures•R isk of impaired employees’ health•D iversified values of employees by business globalization• E nhancing internal controls by inte gr ating /re or ganizing
subsidiaries• Ensuring compliance and reinforcing risk management• Higher stakeholders’ trust through greater transparency• B usiness continuity risk and unexpected losses from
dysfunctional internal controls•L osing social credibility due to compliance violations• Inadequate risk management due to M&As and businessexpansion

AIR WATER / Integrated Report 2023

utilization

Relevant Business Domains
EnergySolutions

Health& Safety

Agriculture &Foods

OTHERS

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

Functional materials,
Device process technology

Food nutrition analysis,
Alternative protein processing
technology

Environmentally friendly
production andprocess technology

Super-efficient smart
agriculture in response
to climate change

Data Analysis, AI,
Digital transformation platform

Fixed temperature and thermal
storage technology,
Clean transportation

Sensing,
Robot image processing

High

Digital& Industry•

Bioprocess technology,
Decarbonization and resource
recycling technology

•

•

•

•

•

•

•

•

•

•

Related SDGs

AIR WATER / Integrated Report 2023

37

03

STRATEGY

AIR WATER’s Growth Strategy
Grow new businesses

1 Overseas industrial gases
Will build a business foundation in industrial gases and,in the future, diversify into related fields such as medical,
environmental, and food products, making high growth.
Target markets: India, North America
Strengths: Gas plant technology, VSU model, tie-ups withmajor trading companies

Boost profitabilityof existing businesses
in Japan● Business inspections for enhancement● Price management● BS management led
by the headquarters● Optimal personnel allocation, etc.

38

AIR WATER / Integrated Report 2023

Integrated
managegroup
ment

Optimize theentire groupfor capitalefficiency

2

Decarbonization

Will establish a clean energy supply model of local production
for local consumption, solving climate change issues.
Focus areas: Biogas, methane, hydrogen, CO₂ capture/reuse
Strengths: High-efficient gas purification/separation technology, transport and supply infrastructure,community-based social capital

3

Agriculture

Will grow agribusiness to help increase food self-sufficiency
and reduce food loss.
Focus area: Fruit & vegetable distribution and processing
Strengths: Business base in Hokkaido (procurement capacities, the brand, etc.), capital and business tieups with two industry leaders, freshness keeper
with logistics and gas technology

AIR WATER / Integrated Report 2023

39

03

STRATEGY

Realizing “terrAWell30”

Basic policy of “terrAWell30”

The Air Water Group has set forth the vision toward FY2030 and released it as “terrAWell30.” Under this vision, we are working to “create

We create synergies by optimizing Group management resources to expand growth areas, strengthen profitability, and incubate new busi-

new corporate value through solving social issues” while generating synergies by creatively combining diverse businesses, human resourc-

nesses.

es, and technologies based on the two growth axes of Global Environment and Wellness.

Optimizing group-wide resources
Bases

Key Initiatives

Expandgrowthareas• Drive growth by expanding overseas

Our vision toward 2030 = terrAWell30

Core Business• Evolve it through inter-business fusion

Business strategy• Incubate new regional businesses

Increased
profitability
Expandedbusiness

Operating profit:

Revenue:

1.6

Enhanced capital efficiency
Through integrated group management,
the Group’s management resources will
be totally optimized, increasing capital

160

Technology

billion yen Operating margin: 10%

Creating synergies

Human Resources • Conduct management that leverages human resources

Corporate

trillion yen, of which 20% from overseas revenue
Investment& Financing

ROE:• Develop technologies, harness the group-wide
engineering resources

Functional strategies• Positively reinforce the cycle of growth and investment

Incubatenewbusinesses

Progress in growth strategies

12
8

ROIC:

•Strengthen the group strategy functions
Data management (DX) / logistics / procurement / ESG
initiatives

Strengthen
profitability% or more (9.7% in FY2022)
To realize our vision of “terrAWell30,” we are strengthening profitability, expanding growth areas, and incubating new businesses, based% or more (5.6% in FY2022)

on the idea of maximizing the value we can create by the Group’s management resources.

efficiency.
Strengthen
profitability

Society we aim for

Non-financial KPIs
GHG emissions

cut

GlobalEnvironment

30 %(vs. FY2020)

80 %(65% in FY2021)

Decarbonized

Resource recycling-oriented

growth areas

10 %(vs. FY2021)

Where people and nature coexist

Social Value

FOCUS 1 (p.44)

FOCUS 2 (p.48)

Global & Engineering

Electronics

Here introduces the Global Business, which aims to become

This section describes the Electronics Business, whicha gas company with a strong presence in the global market

continues to grow by capturing investment demand from theand shows rapid growth through aggressive investment insemiconductor industry, which is expanding its investment

industrial gas and engineering. Topics include its base strat-

in digitalization and domestic production of products toegy, strengths, and market strategies for its most important

meet increasingly complex, cutting-edge needs.

regions, North America and India, respectively.

Smart Society

Water consumption intensity

cutenhancing logistics (total optimization of data-based logistics), DX (reduced operations using IT), and procurement (cost cut by
appropriate inventory levels.

Waste recycling rate
Economic Value

We shifted to unit-based and group-integrated management to promote total optimization. In the domestic business, we aregroup-wide procurement), as well as strengthening profitability through optimal personnel allocation, price management, andExpandterrAWell30

Evolving Integrated Group Management (p.42)

Wellness

Incubate
With long healthy lifespannewbusiness

FOCUS 3 (p.50)

FOCUS 4 (p.54)

Incorporating Carbon
Neutrality into Growth

Incorporating Wellness
into GrowthThis section showcases how we approach carbon-neutral

Here presents how we create new businesses and set up thesociety and a resource-recycling business model by lever-structure that can solve social issues such as food shortages

aging our technologies and businesses that contribute todue to the growing world population and the extension of

low-carbon/decarbonization, our customer base, logistics

healthy life expectancy in a super-aged society.

network, and other management resources.

40

AIR WATER / Integrated Report 2023

AIR WATER / Integrated Report 2023

41

03

STRATEGY

Evolving Integrated Group Management

Innovating the head office administration and mobilizing group-wide human resources
Another future challenge for our group management is to highly standardize the management of group companies by the headquarters ad-

In April 2022, the Air Water Group transitioned to unit-based management by integrating organizations of AIR WATER INC. and the group

ministration and to increase the mobility of human resources. The common application of advanced management is essential to optimize thecompanies. Moving on, we intend to elevate this unit management into a group management structure that integrates the Air Water andallocation of management resources and to promote business growth in each company. In addition, mobilizing human resources within thethose group companies playing core roles in each business area, thereby we will optimize group management resources and promote auton-Group and fostering the next-generation management are also an urgent issue, given the concern about the lack of successors to manage-

omous growth of each group company.

ment personnel at group companies.

Each autonomous growth drives the entire growth(operating profit of ¥1B or more)

Since 2000, we have brought in more than 245 companies fromdiverse backgrounds through M&As, and have managed the Group30 %respecting the uniqueness of each company’s business.

17%

1.0049yen, it is no exaggeration to say that the autonomous growth ofCore companies created83%

To encourage autonomous growth of group companies, it is import-

Oct. 2021

Functional chemicals

Air Water Performance Chemical Inc.

ant to have each company increase its presence in the industry

Processed food

Air Water Agri & Foods Co., Ltd.

and to reach a certain size to facilitate strategic capital investment,

Industrial gases, specialty
chemicals
Air Water Electronics Inc.
Semiconductors
Air Water Mechatronics Inc.
equipment

M&As, and alliances with other companies.
profit exceeding 1 billion yen as “core companies”, and have inte-

LP gas (Hokkaido)

Air Water Life Solution Inc.
AIR WATER MEDICAL INC.

Oct. 2023

Aerosol, needles

AIR WATER REALIZE INC.

Raise the level of the headadmin office* through training

within the group

SolutionsElevate and standardize
the group company• Lack of successors in five years

management

Formed the “core companies” through reorganization

Oct. 2020

Medical equip., careproducts

management

ment despite business diversity

Air Water Hokkaido Inc.
Air Water East Japan Inc.
Air Water West Japan Inc.

July 2023

to Unit System• L ack of highly standardized manage-

Regional businesscompanies

Apr. 2023

Group company-basedGroup management issues

billion yen

70%

Major consolidations and reorganizations

From Company System

Mobilize that talent

62.2

trillion yen

each group company drives the growth of the entire Group.

Business areas

OperatingprofitRevenue

Now seeing a diverse range of business and revenue of 1 trillion

Timeline

April 2022

Out of FY2022 results, % of 23 core companies

Therefore, we have defined companies with annual operating

Integrating management

Integrated group management

resources of the headby “core companies”

and core companies

Optimize group resources
as a whole (human resources,
funds, and technology)

Innovating
the headadmin office*Administrative office of AIR WATER INC.

grated and reorganized group companies to form core companies

Integrated group management by the core companies

in each business area.

Of the 142 consolidated subsidiaries as of March 31, 2023, there are currently 23 core companies with operating income of 1 billion yen or

Introduction of the Unit System

more. We plan to increase the number to about 30 companies through further integration and reorganization.

While focusing on the autonomous growth of group companies, we are working to build a management structure that allows us to leverage

While based on the Unit System and keeping the originality of their operations, we will manage both the headquarters and core companies

the collective strengths of the group by creating synergies among various businesses, human resources, and technologies, which are ourin an integrated manner as to the key management resources (human resources, funds, and technology) and the common infrastructure

management resources. As a key strategy for it, we have integrated and reorganized our diverse business domains into four business groups

that supports the growth of core companies (BS management, digital transformation, and logistics). Thereby we will be realizing our growthunder the two growth axes of “Global Environment” and “Wellness” in April 2022, and also introduced the new “Unit System.” For details on

strategies, including the total optimization of group management resources.

the purpose of the Unit System, please refer to CEO Message (p.14).
Global Environment

Units

Digital & Industry
group

Energy solutions
group

Group transversal cross-funcional organization

Wellness
Health& Safety group

Agriculture& Foods group

Global & Engineering group

Group technology center

Electronics

Green innovation

Medical Products

Foods

Engineering center

Gas products center

Functional materials

EnergyConsumer healthNatural foods

Global business unit

Medical products

Agriculture

Digital transformation
promotion room

Industrial gases

Safety services

Logistics renovation
promotion room

Unit mangement consolidated with core companies

Human resource mobilityGroup corecompanies

CompanyA

Funds aggregation

B

Human
resources

BS management
Logistics
Digital transformation(As of October 2023)*1 Out of the 13 unites, leaders of 7 unites are from M&A companies, and these unit leaders are also appointed as presidents of Group companies that are affiliate core companies (partof them have experience as presidents).
*2 Prior to intorduction of the Unit System, organizations that group transvertially promote technology development, engineering, function and digital transfromation promotion ofgas products, and logistics renovation are established.

42

AIR WATER / Integrated Report 2023

Company

Tech management

AW

Main body

DX

Funds

Optimize group-wide resources
for profitability and capital efficiency

Technology

Digitaltransformation

Core companies

Other subsidiaries

BS

Management

Logistics

CompanyC

AIR WATER / Integrated Report 2023

43

03

STRATEGY

FOCUS 1

Overseas revenue (Results / Plan)

Global & Engineering(100 million yen)

Making a presencein the global market
as an industrial gas manufacturer

3,200

Industrial gas(India)

Other
22%

31%

100billion yen

1,400
768

936

High output UPS
16%

50billion yen

2021
2022
(Results) (Results)

2024(Plan)

Industrial gas(North America)

2030 (FY)(Plan)

31%

100billion yen

One of the growth drivers to our long-with strong demand from the steel indus-

we have provided to Japanese steelmakers

term vision “terrAWell30” is the global

try, the largest user of industrial gases, andto date.

business. Our Group has designateda GDP growing at 7% per year. Govern-

India and North America as the most

Bringing engineering capabilities
overseas

customers, which we have cultivated overStarting in 2022, Air Water and Mitsui

many years by supplying on-site gas to& Co., Ltd. have formed a strategic alli-

North America is the world’s largest

We acquired the technology for a large-

steelmakers. In India, we acquired busi-

ance to expand the business in the global

ment-led infrastructure investment is un-

industrial gas market, approximately fivescale cryogenic air separation plantness in 2019 from the local subsidiary of amarket focusing on industrial gases. It

important areas, and is expanding ourderway to promote the automobile industry

times the size of Japan. Multiple industries

through our joint venture with Kobe Steel,major industrial gas company. It solidified

harnesses our technology and know-how

industrial gas business globally by le-and other manufacturing industries, withare increasing their gas use, including

and secured its position as a plant manu-

the foundation of our on-site gas supply toin gas production/supply and Mitsui’s

veraging the engineering capabilities

the goal of expanding annual crude steel

semiconductor-related manufacturing

facturer as we enhanced the engineering.

steel mills, the first and second largest in

information network in the fields of chem-

cultivated in Japan.

production capacity to 300 million tons by

and cryogenic transport technologies in

We also placed manufacturing bases for

India, and our lorry and cylinder business

ical/steel/energy, etc. to accelerate our

FY2030, more than double the current ca-

pharmaceuticals and biotechnology. Also,

plants and cryogenic equipment not onlyaround the eastern and southern partsindustrial gas business in India and North

Expanding in India
and North America

pacity. Since industrial gas is essential for

new usages for decarbonization such asin Japan, but in North America, Asia, andof India. With such plant engineering

America. In the future, we will leverage

the growth of the manufacturing industry,hydrogen and CO2 capture are expanding,

Europe to establish a global engineering

technology and expertise, we will develop

our industrial gas business bases to boldly

We have positioned India and North Amer-

there is high growth potential in India, justand we believe that our experience in thesystem that covers demand in all regions.

the ability to compete with industrial gas

take on the challenge of expanding into

ica as drivers of company-wide growth, as

as it did during Japan’s former period ofNorth American market, the world’s mostMoreover, we have the operation andmajors on an equal footing, and focus onother businesses, such as medical andwe believe their market environments are

rapid economic growth. We consider India

advanced consumer of industrial gases,

maintenance technologies that contrib-

our overseas business in India and Northfood products, in the global market as well

well suited to leverage our accumulated

as our key strategic area where we canwill make us more competitive in the global

ute to stable and safe operations for our

America.

as in Japan.

strengths.

demonstrate our advantages in engineer-market.

India is currently in a high-growth period

ing technology and plant operations that

Launched G&E Group to speed up business growth and development

Main overseas bases of the Air Water Group
EuropeWe have established the Global & Engineering (G&E) Group to centralize our expertise

3 companies

America

11companies

in the industrial gas and boost global expansion. The primary mission is to grow the global
business even faster, using core technologies in deep-cooled separation, adsorption separation, hydrogen production, and cryogenic gas applications. Another is to speed up theprocess from R&D to commercialization by deepening cooperation between the development division and operating companies. We also have the Global Management division to

India

manage overseas operating companies in a timely and centralized manner, by which we will

1company

be enhancing management functions such as finance, consolidated control, and operational auditing.
Southeast Asia

Overseas group compaies
FY2022

Overseas revenue
44

10 companies

29 compaies*

93.6 billion yen

AIR WATER / Integrated Report 2023

Our overseas expansion has brought us a variety of human, technological, and other resources so far. Going forward, we will develop a global database of engineering talent andCorporate Director,
Managing Executive Officer,

utilize it in our human resource strategy. We will also provide solutions to increasingly com-in charge of Global & Engineering Group,

plex social issues by quickly increasing the strength of our global human resources throughand General Manager

recruitment and training, and by combining resources through the cross-fertilization of di*The number of companies includes 4 companies in consolidated
overseas subsidiaries China base

AIR WATER INC.

verse human resources and technologies.

of Engineering Center

Shigeki Otsuka

AIR WATER / Integrated Report 2023

45

03

STRATEGY

インド

India Business

インド

米国

米国

Sales target

India market size forecast

US market size forecast

Sales target(100 million yen)(million USD)

(million USD)

(100 million yen)

1,000

India has the fastest growing industrial gas market in the world.

1,791

2,154

2,707

27,40031,20035,000for steel materials for automobiles and construction materials.

Indiamarketstrategy

1,000North America has the world’s largest market for industrial gases

With rapid economic growth, the amount of oxygen used in the steel
industry is expected to further increase due to the growing demand

North America Businesswith an average annual growth rate of 4.5% expected. Besides

190

176
2022
Results

2030
Target

2022

2025

2028

*Source: “gasworld”

2022

2025

2028

*Source: “gasworld”

major industries such as semiconductors, there are also ad-

2022
Results• Win new on-site gas supply for steel• Develop a U.S. version of “VSU” strategy• Build an infrastructure network• Establish value-added helium and green

with more gas production bases

vanced initiatives to build a hydrogen supply chain, etc.

2030
TargetNorth America
marketstrategyliquefied hydrogen businesses

al gas distributor based in the same area,
which launched an integrated gas supply
business from production to sales. In April
2023, we bought out a distributor based

Ranked the industry’s 3rd
position through M&As

Steel onsite plant

After entering India in 2013, Air Water has

Newly established bases

Faridabad Plant(cylinder filling site)

increased its credibility as a local industrial

Existing bases

Jamshedpur plant

market share in India, starting with a major

Absolute Air(industrial gas
reception rights)

M&A of steel on-site bases in the easternand southern parts of the country in 2019.

Asansol plant(cylinder filling)

Air Water India
Headquarters

The Japanese government is strengthenBellary planting ties with India in many areas, including
politics, society, and security. Against
this backdrop, in September 2023, weCompany for development
and operation of hydrogen stationsFirstElement Fuel, Inc.
(investment, participation)

Palpangra plant(cylinder filling)

Won an on-site gas supply contract
for a state-owned steel company

Hyderabad plant(cylinder filling, ASU)

Bungalor(liquid gas transmission base)

India Limited (SAIL), a state-owned steel
its Durgapur steel plant in the eastern partof the country. It makes a significance for
the Japan-India Economic Partnership,

Received order of onsite gas
provisioin for Durgapur steel
production site of Indian
national steel company SAIL

covers throughout North America. By expanding our handling of high value-added
gas types and enhancing our ability tomake comprehensive proposals, we willcapture demand from semiconductors

Americal Gas Products(helium gas sales)

and other growth industries.

*Obtained in September 2023

Capturing decarbonization
demandUltra low temperaturemachinery plant
Executed ideas since FY 2022
Industrial gas produciton plantIndustrial gas distributor
Existing bases

In the U.S., where decarbonization-related
demand is growing rapidly, we currently
produce and sell liquefied hydrogen tanks
that require a high level of technology andCO2 recovery equipment. Also, we invest-

base through acquisitions of cryogenic

ed in FirstElement Fuel Inc., the largest

to 100 billion yen by 2030 by developing

Entered the world’s largest
market with new demands

equipment manufacturers and plant en-hydrogen distributor for mobility in thediverse businesses, including gas andNorth America is the world’s largest in-gineering companies, as well as working

U.S., and are building a hydrogen supply

with local partners.

chain through supplying liquefied hydro-

as Air Water, a Japanese company, will be

In March 2024, a filling plant will begin op-

related equipment for the semiconductor

dustrial gas market, about five times thatworking on a large-scale project with aneration in northern India, where we haveindustry, which is expected to expand intoof Japan (about 3 trillion yen), and is not

Indian state-owned company. We plan toyet to enter, and in October 2024, a lique-the country, as well as biogas, medical,

only a center for cutting-edge technolo-

invest approximately 13.5 billion yen to

fied gas production plant will start opera-

and food fields.

gen tanks and rechargers*. Our vision is tofurther expand the advanced technology

gies, but also a market where related new

Launched the industrial gas
businessapplications, including those related toThrough such a process, we started ourer regions, including Japan, as well as toand know-how acquired in the U.S. to oth-make a cutting-edge, large-scale deep-tion in Chennai, a major city in the south.

cooled air separation plant, combining the

We intend to continue capital investment

Matsubayashi COO discusses withdecarbonization, are being created ahead

industrial gas in North America in 2022.

work on CO2 capture and the productionengineering capabilities of Japan, India,

in line with demand, expand our businessPresident Modi as part of Japan and Indiaof the rest of the world. Our strength in

Our market development strategy is theand supply of green liquefied hydrogen.

and the U.S. under our global structure,throughout India, and build a network ofparnershipdeveloping the North American market“U.S. version of the VSU model,” in which*Mobile hydrogen station capable of transporting

and to start supplying gas in Octobermanufacturing, transportation, and sales

is our highly efficient gas purification andwe acquire sales functions through M&As

liquefied hydrogen and refueling gaseous2025. This is our first order in India for a

infrastructure based on our on-site gas

separation technology and our engineer-

and alliances with local distributors, whilehydrogen in a single vehicle.

large-scale deep-cooled air separation

supply business for steel makers. At theing capability to design and manufacture

establishing our own gas production fa-

plant and the third on-site gas supply basesame time, we aim to become the second

deep-cooled air separation equipment.

cilities around these facilities. In August

for the steel industry in India, following

largest gas supplier in India by expanding

Since entering the North American mar-

2023, we acquired our first gas produc-

Tata Steel (Jamshedpur Plant) and JSW

our gas portfolio to include hydrogen, heli-

ket in 2016 looking to industrial gas ex-tion site in New York State, supplying on-

Steel (Bellary Plant). We have taken aum, rare gases, and other gases. In the fu-

pansion, we have increased our presencesite gas to a large customer. Prior to this,steady step toward dramatic growth.

ture, we aim to expand our India businessin the market while building our business

in May 2022, we had acquired an industri-©PMO India

46

Phoenix Welding Supply(industrial gas sales)*Obtained in April 2023

Networking for businessdevelopment throughout India

we acquired a helium sales company that
Noble Gas Solutions(industrial gas sales)

Air Water America(business managementcompany, engineering base)*To begin construction in September 2023,
begin operation in October 2024

company in India, for on-site gas supply toarea. Furthermore, in September 2023,*Obtained in May 2022

Chennai plant(cylinder filling site, ASU)

received an order from Steel Authority oflocated, thereby expanding our business*To begin construction in November 2024,
begin operation in Spetember 2025

*To begin operation in March 2024

gas producer and gained the third largest

in Arizona, where the high-tech industry is

Established cryogenic
air separation equipment(onsite gas provision)

AIR WATER / Integrated Report 2023

American Gas Products plant

AIR WATER / Integrated Report 2023

47

03

STRATEGY

With our competitive edge in the semiconductor industry developed over years,
FOCUS 2

we will seize the greater demand for electronics-related products and keep growing.

Electronics

Edge

1

Seizing the growing semiconductor market
with our group-wide strengths
In Japan, major semiconductor manufacturers are building new/additional
plants to promote digitalization and domestic production of semiconductors.

facturers.

and shifted to a structure aimed at more

In addition to gases, our products for theeffectively utilizing group resources and

The Air Water Group has a track record ofsemiconductors have expanded throughsupplying on-site gas for semiconductors

M&As, by which we have more products to

Looking forward, we target 150 billion

with the “V1” nitrogen gas generator,

enhance their production and technology;

yen scale by 2030 with our comprehensive

pioneering in the industry since 1980’s.

including specialty gases and chemicals,

strength in on-site gas supply to semicon-

Especially in recent years, we have contin-

supply equipment, gas purification andductor manufacturers and related fields.

ued to invest heavily in on-site gas supply,

exhaust gas treatment equipment, andparticularly to major semiconductor manu-

thermal control equipment for the manu-

expanding business.

149

Electronics unit revenue(results/target)(indexed with FY2018 as 100)

tronics-related sales doubled from about

150

billion yen

100pioneered the industry’s first “total gas

we have the expertise and track record ofsystem.” It is to build our own plants instable supply through our five Gas Centerscustomers’ factories and provide the total

in Japan, which outperforms the competi-

support including gas production, supply,

tors. We are accelerating investment in gas

monitoring, and maintenance, which be-supply plants to accommodate more semi-came the de facto standard model for the

conductor manufacturing plants, as well as

supply of nitrogen to semiconductor fac-

strengthening our engineering system totories. We have installed more than 200 ofbuild the plants. (ref. p.71)

Gas Centers around Japan
L: Hiroshima, R: Nagasaki, B: Iwate (WIP)

Edge

2

Backup system with VSU network

We ensure a stable supply of industrial gases required forsemiconductor manufacturing at any time. As a backup system for this purpose, we have deployed liquefied gas produc-

44.6

billion yen
Edge3

into two operating companies with clearly
2021
FY

plants such as DRAM and CMOS sensors,

support the supply of gas for electronics.

billion yen

ness across the Group was reorganized

2020
FY

Moreover, for large-scale semiconductor

not use an expansion turbine, and also

Iwate Ekisan Co.

Then in April 2023, the electronics busi109

2019
FY

nitrogen gas generator, the V1, which did

yen in 2022.

125

2018
FY

turers and other electronics-related users.

tion plants called “VSU” at 22 locations nationwide to strongly

94.8

45 billion yen in 2010 to about 95 billion

135

In the 1980s, we developed an innovative

them, mainly for semiconductor manufac-

facturing equipment. Among them, elec-

Transition of nitrogen gas
sales volume

Nitrogen gas generator “V1”

2022
FY

defined roles in “gas” and “equipment,”

FY2010results

FY2022
results

FY2030targetTotal support for semiconductors

Not only gas supply, we also provide comprehensive support
for semiconductor manufacturing, including sales of materials
and equipment for medicine and chemical raw materials, as

Air Water Group’s comprehensive strengths for the Electronics

Specialty chemicals, supply equipment

well as piping work and logistics. We have warehouses close
to semiconductor plants that can handle high-pressure gases

Edge

2

Edge

3

Backup (VSU)

and hazardous materials to provide one-stop management

Diverse production of semiconductor
related productsof manufacturing materials from procurement to supply. We
have also developed a materials management service, in

Edge

1

Onsite gas provision(nitrogen gas, hydrogen)Bulk gas provision(oxygen, nitrogen, argon, CO2, helium)

Gas purificaiton equipment,
detoxification equipment, heated plate device

Heat control device

Electronic materials

O rings

Semiconductor manufacturers

48

AIR WATER / Integrated Report 2023

which qualified personnel are stationed in the plants to under-

Specialty gas, specialty chemical,
provision equipment

take all container exchange and material supply equipment

Purifier, detoxifier

Hazardous material storage

inspections.

Opening our new electronics-related base in Kumamoto

High output UPS

Semiconductor production
equipment manufacturers

We are launching a new business complex base in Kikuchi-gun,meet the growing demand for semiconductor materials. In the future,

Kumamoto Prefecture, which specializes in electronics-related busi-

we are looking to build a gas plant to supply gas on-site to nearby

ness by the summer of 2024. This new site will have warehouses tosemiconductor plants.

store specialty chemicals, specialty gases, and basic chemicals to

AIR WATER / Integrated Report 2023

49

03

STRATEGY

Case 1. Produce & utilize biomethane

FOCUS 3Modeling sustainable and locally-recyclable energy supply

Incorporating Carbon Neutrality
into Growth
The issue of climate change is not only a Mate-ment resources such as ties with local commu-

riality for us, a company that consumes a lot of

nities, a customer base, and a logistics network.

electricity, but also a major business opportunity.

By capitalizing on these resources with regional

Based on industrial gas, our core business, wecharacteristics, our Group will work to build ahave developed over many years technologies

Our Group has been working to build a regional recycling supply

is a business model that solves social issues by providing clean,chain in which unused biogas generated from livestock manuresustainable, domestically produced energy in dairy farming

is processed into liquefied biomethane (LBM), an alternative fuelareas, and also reducing odors and water pollution caused byto liquefied natural gas (LNG), and consumed within the region. It

livestock manure.

Marine fuelPlant power, product materials

Conducted demonstration tests ofSigned an agreement to use LBM at the

LBM as marine fuel for domestic

Obihiro Plant of Panasonic Industry Co.

“resource-recycling energy supply model of local

transportation with six companies

In FY2025, it will be used for electricity

and businesses that contribute to low-carbon andproduction for local consumption” that creates

including Mitsui O.S.K. Lines. It would

and EV relays materials to help decar-

decarbonization, such as CO2 capture, hydrogenclean energy from locally generated waste, andbe an effective way to decarbonize

bonize the plant.

production, and methane, as well as manage-

stays committed to solving social issues.

ship operations.

Our gas-related
technologies

Our LNG sales
infrastructure

We apply our know-how ingas collection/transportation, separation/purification,and other technologies related to the stable gas supply.

Idea as an industrial
gas manufacturer

We supply the produced
LBM as CO 2 -free fuel tousers promoting decarbonization as an alternative to
LNG.

LBM production plant

We focus on dairy farmers
who want to utilize biogas
from livestock manure andbusine s s operator s whowant to introduce decarbonized energy.

Urban gas tanks

Home energy
LBM
transportation

Digestive juice(used as fertilizer)

Biogastransmission

Ship fuelLivestock manure

Waste from local industries

Truck fuel

Air Water’s technology

Rocket fuelPlant fuelFood waste

Gasification(biomass)

Utilize regional
business & logistics
networks

Livestock manure

LBM Supply Chain

Utilizing in agriculture

kaido’s regional business infrastructure and logistics network, and*If the entire production is used to replace LNG, thegreenhouse gas would be reduced by more than 60%.

RecycledHeatindustrial gas technology and energy business know-how with Hok-in Tokachi area
Carbon captureThis is an initiative unique to our Group that combines our coreis scheduled to be commercialized in FY2024. We will handle LBM
as a new energy product and invest some 60 billion yen over the
next 10 years to implement it in society.

Power generation

Thinned wood

Liquid fertilizer

Can also be provided as
non-liquefying biomethane gas

Carbondioxide gas

Dry ice

Recirculating without CO2

HydrogenElectric
power

Liquefied biomethane

Supplying carbon neutral energy

City gas (Energy for living)

Rocket fuelWe conducted a demonstration proj-

Interstellar Technologies Inc. decided to

ect to use LBM as an alternative fueluse LBM as fuel for the satellite launch

to LNG in the pipeline service area ofvehicle “ZERO” and started demonstra-

Obihiro Gas Co., making the first at-tion experiments at the engine combus-

tempt in Japan to supply LBM to citytion test facility in December 2023.

gas users.

50

AIR WATER
WATER  /  Integrated/ Integrated Report  2023
Report 2023

AIR WATER / Integrated Report 2023

51

03

STRATEGY

Case 2. Use CO2 capturing technology to create recycling society

Case 3.

The world has yet to establish a technology for low-cost, low-

our long experience in gas production/engineering technology andUsing hydrogen, which does not emit CO2 during combustion,

manufacturer in the production, storage, transportation, andenergy CO2 capture from low-concentration flue gas emitted

as a manufacturer of carbon dioxide gas and dry ice. The collected

is one of the keys to decarbonization. We are taking the lead inuse of hydrogen gas. At the same time, we are working with local

from small- to mid-scale factories such as boilers and industrial

CO2 can be turned into dry ice on site, and we are building a newbuilding a hydrogen value chain in the U.S., where decarbonization-

governments and industry to contribute to carbon neutrality by

We made this possible with “ReCO2 STATION,” acarbon dioxide gas supply chain of the “local production for local

related measures are rapidly advancing, by utilizing the wealthutilizing our nationwide bases in Japan.

consumption” model.

of knowledge and technology accumulated as an industrial gas

furnaces.

compact CO2 recovery and utilization system. It was developed by

Advance the hydrogen supply businessusing our proprietary adsorption separation technology, based on

Recycling and utilization of emitted CO2
Reused inBoilers,
Turbines,

Unnecessary
CO2

Agriculture

Gas

Exhaust gas
w/10% conc.

Concrete

EnginesLiquefied

Dry ice
Neutralizing
wastewaterheat,
steam,
power

Carboncapture unit

CO2

Invested in U.S. hydrogen station
developer/operator

Building the onsite-based hydrogen supply chain
in Japan

Our Group has invested in FirstElement Fuel, Inc. (FEF), the largest

Our Group boasts nine on-site hydrogen gas supply sites and 11 com-developer and operator of hydrogen stations in California, USA. In

pressed hydrogen production sites in Japan as one of the top hydro-

addition to supporting FEF’s goal of establishing a network of 80

gen gas suppliers.

hydrogen stations in the state by 2024, we will provide the solutions

The “VHR” hydrogen gas production system, an on-site produc-necessary to operate hydrogen stations, including liquefied hydrogention method using natural gas steam reforming, is being deployedtanks and liquefied hydrogen trailers, and promote new initiatives re-throughout Japan to clean up the supply chain for existing industrial

lated to the hydrogen supply chain in terms of production, sales, andapplications and to meet the increasing demand for a future hydrogen

distribution of liquefied hydrogen.

energy society. In the future, we plan to recover CO2 emitted during
production process and produce clean hydrogen.

Recycled
ReCO2 STATION

Methanation
As materials(generating CO etc.)

Installed in factories, plants, etc.

The hydrogen hubs (20 in total)

Production & filling bases
On-site supply bases

Recycling waste into biogas, biomethane, and other decarbonized and low-carbon energy.

Dry ice made by this equipment“ReCO 2 STATION” is designed for use

Our Group is a leading manufacturer ofwith combustion exhaust gas with a CO2

dry ice, which is used to cool and preserve

concentration of about 10% from industrial

food and other products, but in recent years,

furnaces and boilers. It is also a container-

suppliers of CO2, the raw material for dry

sized device that can compress CO2 toice, are decreasing due to the closure of

produce liquefied carbon dioxide gas,

domestic refineries and steel mills. In thewhich can then be solidified to produce

future, we plan to build a locally produced

even dry ice.

and consumed dry ice supply network

FEF’s hydrogen station

Hydrogen gas generator “VHR”

Producing CO2-free hydrogen
1) Clean hydrogen energy from “cattle manure”

2) CO2-free hydrogen from unused natural gas by DMR method

In April 2022, we launched Japan’s only hydrogen production and

As adopted by the New Energy and Industrial Technology Development

supply business using carbon-neutral biogas derived from livestock

Organization (NEDO), we have started a hydrogen production demon-

within the region. We also promote “carbon

manure in the town of Shikaoi, Hokkaido. To encourage the use of

stration in Toyotomi Town, Hokkaido, using the direct methane reforming

recycling,” in which the collected CO2 ishydrogen as well, the town and local companies introduced fuel cell

(DMR)* method to generate hydrogen from methane-based natural gas

vehicles running on hydrogen derived from dairy cow manure.

associated with hot springs, without emitting CO2 directly.

which captures CO2 and produces dry ice

regarded as a “resource” and reused as araw material or fuel.

*DMR is a clean reactionthat uses methane togenerate hydrogen and

We are also developing technology to capture low-concentration

solid carbon, such as

CO2 at lower cost, which was adopted by the New Energy andcarbon nanotubes, with
an iron-based catalyst.

Industrial Technology Development Organization (NEDO) for its

A new production meth-“Green Innovation Fund Project.” We jointly research with TODA

od that can produce so-

KOGYO CORP. and Saitama University on using a material called

called turquoise hydrogen is currently undersodium ferrite (Na-Fe oxide) as a CO2 adsorbent. We aim to reducethe collection cost to 2,000 yen/t-CO2, about half the current.

52

AIR WATER / Integrated Report 2023

development with TODA
Shikaoi Hydrogen Farm Co.

Natural gas extraction plant in Toyotomi

KOGYO CORP.

AIR WATER / Integrated Report 2023

53

03

STRATEGY

FOCUS 4

Incorporate Wellness into Growth

Case 1. Enhance the “fruit and vegetable distribution
and processing platform”

Our agribusiness (agriculture & processing)ing farmers and more frequent abnormal

food manufacturers, and restaurants, andis based in Hokkaido, the largest producer

weather.

thus became our group company. We are

Solving social issues related to people’s wellness

pre-symptomatic diseases, and rehabilitationof agricultural products in Japan. Based on

With this context, in February 2023, we

expanding our fruit & vegetable network(healthy living) is the mission of the Air Water

outside hospitals.

our strong ties with growers through con-have started partnering with VEGETECH

in Kyushu, which can complement thetract cultivation and procurement of raw

Co., a fruit & veg trading company engaged

off-season of Hokkaido, and making a stable

vegetable materials, we have developedin processing and intermediate wholesaling,

supply by decentralizing production areas.

a system to process agricultural products

and DELICA FOODS HOLDINGS CO., which

We will also collaborate with the Kumamoto

into the required form and supply them insells whole/cut vegetables for commercial

Low Temperature Logistics Center, startinga timely manner, thereby opening up newuse. We are working to stably supply Hok-in February 2024.

sales channels. We are particularly reinforc-

kaido vegetables from our Group to the both

Such collaboration with industry giants

ing our “fruit and vegetable distribution andcompanies, build raw material storage bas-

strengthens our procurement network andprocessing platform” by leveraging our logis-

es in preparation for the “2024 problem” inenhances the fruit and vegetable platform

tics capabilities to link production areas withlogistics, and expand new production areasthat has a value chain and logistics network

consumption areas and our technologies toto diversify production area risks.

from processing to sales. We are committed

Group and an important area for growth.

When it comes to “food,” the basis for ourAs the super-aging society faces social issues

healthy and fulfilling life, we see the long-termsuch as the shortage of hospitals, working en-

shortages given the growing population and cli-

vironment of healthcare professionals, and gap

mate change worldwide. In this context, we are

between average life and healthy life expectancy,

committed to improving food self-sufficiency

our Group will contribute to extend healthy life

through our business such as “fruit and vegetable

expectancy not only through acute care but also

distribution and processing platform” and “land-through the healthcare business for prevention,

based aquaculture platform.”

preserve freshness with industrial gases.

In October 2023, we acquired 51% of theto contributing to the development of sus-

Meanwhile, as food security and self-suf-

shares of Marushin Seika Co. which is thetainable domestic agriculture, connecting

ficiency become social issues, stable supply

largest middle wholesaler in the Fukuoka

production areas with dining tables, creatingis getting more important in the domestic

City Central Wholesale Market and has aa rich food culture in response to the times,

fruit and vegetable market due to decreas-

wide sales channel to mass merchandisers,and contributing to people’s wellness.

Farm products & food processing value chain×

Nationwide food distribution and business network

×Enhancing the fruit & veg platform

Keep-fresh tech by industrial gases

produce / procure

develop / process

sell

Regional Cooperation

Advanced medical

Food processing

Home healthcare

Cryogenic transport

Oral careWellness(healthy living)/ Healthy longevity

54

WATER  /  Integrated
AIR WATER/ Integrated Report  2023
Report 2023

increase food self-sufficiency

Onshore aquaculture

Cosmetics

100-year life era

Reduce food loss andFunctional foodOpen Innovation

Global population growthMarushin Seika Co.

Hokkaido Air Water Agri Co.

Agri / Wholesale / Processing

Agri / Wholesale / Processing/ Food self-sufficiency

AIR WATER / Integrated Report 2023

55

03

STRATEGY
TOPICS

Case 2. Industrialize onshore aquaculture

A facility that models the society we aim for, in both Global Environment and Wellness.

With declining natural fish catches and an

platform,” an all-in-one package from plantuses well water, and will develop ancillary

aging and decreasing number of fishermen,

design to operation and maintenance, taking

equipment and consumables to increase ef-

sea-based aquaculture, the mainstay of aqua-advantage of the Group’s unique strengths inficiency. This small-scaled, semi-closed cycle

culture, is facing limitations in increasing pro-technologies such as remote monitoring andplant of smart onshore aquaculture can saveduction, as well as environmental problems

freshness maintenance, in addition to oxygen,

initial investment and be used across Japansuch as the accumulation of uneaten feed onenergy, and artificial seawater, which are es-

the seafloor, which leads to water pollution.

sential for aquaculture.

“Nature’s Blessing Farm Matsumoto”
In October 2022, we started construction of aation, we use bamboo and pruned branches,

we will work on optimizing the growing envi-

facility to develop a resource-recycling model

which tends to become waste in the region,ronment for tomatoes, strawberries, etc., bythat enables local production for local con-as fuel for power generation. It adopts the firstpromoting photosynthesis with carbon dioxide

sumption of energy, named “Nature’s Bless-biomass gasifier in Japan that does not gen-gas and utilizing a system of programming

as a model for local production for local con-ing Farm Matsumoto” in Nagano Prefecture,erate tar. The plant is going to accept all types

the cultivation methods of skilled farmers.

sumption. By industrializing the onshore aqua-

which is planned to complete in 2024. Theof unused wood, including forest residues andIn the future, we look to expand the verified

To address these social issues, our GroupAt the “Nature’s Blessing Farm Matsumo-

culture, we are looking to provide people withfacility consists of a “biomass gasification &thinned wood, as well as general wood waste

resource-recycling model to other regions instarted onshore salmon farming from Mayto” (Matsumoto, Nagano Pref.; scheduled toeasy access to delicious fish and contribute to

power generation plant,” a “methane fermen-

generated in Matsumoto City. In the methane

a form that matches local issues, along with

2023 in Higashikagura Town, Hokkaido, un-open in FY2024), we will begin test cultivation

food self-sufficiency.

tation plant,” a “smart onshore aquaculture

fermentation, we will collect local food waste,

our products such as oxygen, carbon dioxide,

turn it into biogas, and use it for energy andand artificial seawater, which are essential for

der a breeding environment suitable for coldof salmon and whiteleg shrimp in a semi-en-

plant,” and a “smart agricultural house.” They

climates. We offer the “onshore aquaculture

closed smart onshore aquaculture plant thatutilize the unused biomass resources generat-

power generation. The residue is then used as

onshore aquaculture and agriculture. We are

ed in the region to produce gas and electricity,

fertilizer without waste. Aquaculture and agri-

further working to realize and balance a de-

Building an onshore aquaculture platform

Fry sales
Oxygen, artiﬁcial sea water provision● Analysis device
●
●

●
●

Aquaculture
resources

Onshore aquaculture system package
Sixth industrializaiton inclusive
aquaculture consulting

Freshness preserving
technology using gas● Live ﬁsh transportation●

Plant
Renewable energy utilizaiton
High-efﬁciency LPG boiler● Next-generation new energy such ashydrogen gas●●

and use the heat and carbon dioxide gas pro-

cultural wastes are also reused as raw materi-carbonized society, people’s healthy lifestyles,

duced in the process for onshore aquaculture

als for biomass gasification power generationand our business expansion.

and agriculture. This model facility symbolizes

and methane fermentation.

the society we aim for in terms of both Global
Environment and Wellness.

In the onshore aquaculture that uses artificial seawater, we will cultivate salmon andIn the biomass gasification & power gener-

whiteleg shrimp. In the agricultural house,

Ditsribution

Onshore
陸上養殖
aquaculture
プラットフォーム
platform

Energy Related●●

Local resources Nature’ s Blessing Farm Matsumoto

Aquaponics
Utilization of high-concentration
oxygen water for agriculture

Agriculture

Unusedbiomass

Case 3. Extend healthy life span through pulp regeneration
Oral health has received particular attention in

apy, but also for future regenerative therapy tosecond degree of kinship. Since it is possible

recent years because of its close connection

restore organs and tissues that have lost func-

to transplant cells taken from one unwanted

to physical health. One of the keys to a longtion due to disease or injury. (As of November

tooth into many people, further research isand healthy life is to keep “own teeth” as long

2023, there are 17 clinics in Japan that offer

ongoing to cultivate quality cells in large quan-as possible. Aeras Bio Inc. in our Group com-

pulp regeneration therapy and 182 partner

tities. In this way, our Group is establishing amercialized pulp regeneration therapy first in

clinics that perform extractions for pulp stem

new dental practice for oral health and aiming

the world in 2020, which is a new treatment

cell banking.)

to contribute to the wellness (healthy living) offor teeth that have lost their pulp due to severe

In June 2023, a treatment that regenerates

decay and injury. Partnering with RD Dental

even the dentin, which surrounds and protects

Clinic (by Medical Corporation Kenko Mirai),

the pulp, was put to use. Covering the regen-the treatment is now available across Japan.

erated pulp with stronger dentin is expected

Furthermore, Aeras Bio has developed ato strengthen the entire tooth, seal gaps, andbanking system to collect, culture, preserve,

prevent reinfection.

and transport dental pulp stem cells from un-

In addition, clinical research is underway

used teeth in collaboration with dental clinics

with the aim of commercializing around 2027

nationwide. Cultured stem cells are expected

the “other family pulp regenerative therapy”

to be used not only for pulp regeneration ther-using cells from family members within thePowergeneration

Gasification

Local benefit

Electricity

Renewable
power

Crops

Vegetables/ FishAgriculture

Inter-using energy and resources

CO2(power, heat, CO2, fertilizer)

Powergeneration

Methanefermentation

Food waste

Onshoreaquaculture

Green dry ice

Heat

Heat fromexhaustFertilizer

Organic
fertilizer

稚魚の販売
酸素、人工海水供給● 分析機器●●

more people.

養殖資材
●
●

陸上養殖システムパッケージ
6 次化包括養殖コンサルティング

●
●

プラント

ガスによる鮮度保持技術
活魚輸送

流通
Biomass
gasification & power generation facility

陸上養殖
再生可能エネルギー活用● 高効率 LPG ボイラー
● 水素ガスなどの次世代新エネルギー●

プラットフォーム

エネルギー 関連●●

アクアポニックス
高濃度酸素水の農業への活用

農業
Onshore aquaculture plant

56

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57

03

STRATEGY

Technology Strategy

R&D themes
Key Development Areas
Technology portfolio

For Air Water, technological development capabilities are the source of solutions to add value to products and services and to meet customer needs, and are an essential strategic axis for creating new businesses that contribute to solving social issues.

Digital& Industry

Technology development structure
Our Group has more than 38 R&D locations, and a wide variety ofvelopment more directly. We also set the “Healthcare Imaging Div.”R&D activities are carried out there. In terms of the R&D structure,and the “Onshore Aquaculture Div.,” which have entered the com-the Group Technology Center (GTC) functions as the Group’s stra-

mercialization phase, to accelerate the launch of our business.

Semiconductor
related

Functional
materials

Global& Engineering

Gas process engineering
Gas supply equipment

EnergySolutions

Decarbonization
Resource recycling GX

Health& Safety

Medical, Healthcare

Agriculture& Foods

Agriculture, Food bio■ Electronic materials(semiconductor materials, etc.)■ Efficient gas generation process■ CO2 capture and reuse

GlobalEnvironment■ Energy hydrogen, ammonia■ Resource recycling system■ Clean energy■ CO2-free hydrogen■ Home healthcare IoT platform

tegic platform, integrating company-wide technology strategies,

At the same time, the “Gas Technology Development Center”

and is responsible for cross-sectional management of R&D in each

was opened in the GTC. The center promotes the development

business including assessment, IoT, AI, intellectual property man-of gas technology, which is the foundation of all businesses and aagement, and training of engineers. In July 2023, we establishedsource of synergy, especially in various gas applications including■ Smart agriculturea “Development Center” in each business group to speed up andthose in the electronics, food preservation and transportation, and■ Foods with functional claims

improve the efficiency of R&D by linking business needs and de-

medical and bio-related fields.

■ Remote care and rehabilitation

Wellness■ High resolution video equipment■ Onshore aquaculture

Digital related technology**We acquired digital-related elemental technologies such as sensing (light and sound), image processing, and remote communication control, by integrating

Directing the groupdevelopment policy
Incubation Div.

/ engineers management/ IP strategy

Technology
Strategy Div.

GroupTechnology
Center

IP Strategy Div.

Gas Technology
Development
CenterDevelopment Center (D.C.) / Divisionand businesses in industrial gas, medical, agriculture and food, we are working on tech innovation to create new businesses.

Digital& Industry

Electronics & Functional
Materials D.C.

SIC Div.

EnergySolutionsGreen Innovation D.C.

VERPABusiness Div.

●Assessing each development●Promoting cross-group projects

Health& Safety

Healthcare D.C.

Healthcare
Imaging Div.

Agriculture& Foods

Agriculture& Foods D.C.

OnshoreAquaculture Div.

Global& Engineering

Plant& Equipment D.C.

Basic policy of our strategy

1. M ake technology a growth
driver2. D
 evelop gas application for new
business

3. Plan and promote technicaltalent strategy

Will promote rapid commercializa-

Will develop application technologies,

Will centrally manage the skills of thetion of development themes throughled by the Gas Technology D.C., to cre-Group’s engineers and promote hiring,assessment by GTC and use of Stage

ate new gas demand in the electronics,

skill identification, training, and place-

Gates. Elevate the Group’s engineering

food preservation/transportation, med-

ment of the right person in the right job.

through synergies from dispatchingical, and bio-related fields, as a catalyst

technical information, industry-gov-

for new business.

enhanced corporate branding.

58

AIR WATER / Integrated Report 2023

Development & information hubs of the Air Water GroupWe are developing bases for the creation, development, and dissemination of new businesses that will contribute to solving social issues.
These facilities will serve as a stage for improving brand power through information dissemination and enhancing human capital through the●Distributing info from outside agencies

ernment-academia collaboration, andthe R&D department (approx. 70 people) of a major electronics manufacturer in the past few years. By incorporating them with our existing technologies

process of creating new businesses with technology, as well as technology development through the promotion of open innovation.

Openedin Sept.
2019

Openedin Sept.
2023

Birthplace of the pulp regeneration treatment

For experiencing and co-creating a healthy lifestyle

International Advanced Medical Center @Kobe

Air Water Kento

R&D center to create new products and services for healthy “liv-A place to create a wide business related to “wellness” in theing” for people

100-year-life era, contributing to a longer healthy life

Openingin Oct.
2024

Openingin 2024

Gathering of wisdom in Hokkaido

Circulating resources, energy, agriculture, and aquaculture

Air Water Forest

Nature’s Blessing Farm Matsumoto

A hub to create new businesses that contribute to solving regional

A facility that models a carbon-neutral, recycling-oriented society

issues in Hokkaido by bringing new ideas and collaboration with

where energy is locally produced and consumed in four plants:

research institutions, universities, local governments, and local

biomass gasification & power generation, methane fermentation,companies

smart onshore aquaculture, and smart agriculture

AIR WATER / Integrated Report 2023

59

04

BUSINESS
Health & Safety

Business Overview

Medical Products

Consumer Health

Provides solutions to the medical field by utilizing• Medical gas (oxygen, carbon diox-• Sanitary materials

our diverse products and services, including medi-ide, helium, etc.)• Aerosol

Starting from the industrial gas supply, our business has expanded diversely in stable markets that are essential to manufacturing andcal gases, design, construction, maintenance, and• Medical equipment• Needles

people’s daily lives. Our business portfolio is now able to generate sustainable and stable growth, regardless of changes in the businessinspection of hospital equipment, outsourcing of•H ome healthcare

Safety Services

environment.

hospital operations, and sanitary materials. Also

• Dental materials• Design/construction/maintenance of

supports people’s health and safety by developing

Medical Services

medical gas piping, operating rooms,

businesses in home health care, oral care, consum-• SPD (centralized supply, processing

and ICUser health, and safety services.

and distribution of medical supplies• Manufacturing/sale of fire extinction

in hospitals)

equipment and breathing apparatus

GLOBAL ENVIRONMENT
Digital & Industry
Supports various manufacturing industries by providing a stable supply of

Digital & Industry

Energy Solutions

Health & Safety

Agriculture & Foods

Plant (CO 2 and Hydrogen)• Sterilization/disinfection of medical

industrial gases through our nationwide network of bases. By leveraging our

instruments

Large gas plant

OthersFilling station

WELLNESS

strength handling both industrial gases and chemical products, also supMedium and small gas plants (VSU)

ports the electronics industry with a wide range of products and services.
Hydrogen Solutions

Industrial Gases

Agriculture & Foods

Meadow• Industrial gases (oxygen, nitrogen, argon,

Starting with the production and sale of frozen food using liq-

carbon dioxide, hydrogen, helium, etc.)

uefied nitrogen, expanded our business from the wholesale,processing, and retail of fruits and vegetables to the produc-Electronics• Large-scale nitrogen gas supply

Salt processing plant

Factory

ReCO 2 STATION

tion and sale of beverages and sweets. Continues to support

for semiconductors

safe and secure “food” in a variety of areas by leveraging our• Specialty gases and chemicals

strong ties with producers through the procurement of raw• Gas purifiers, equipment for semiconductor
production processes

vegetable ingredients, our product development capabili-

Hospitalties, and the processing technology to realize them.

Biogas collection facility• Chemical products for semiconductor manufacturers

Home

Functional Materials

LP gas• Electronic materials, circuit products, precision polishing pads

Fire station• O-rings• Basic chemicals (e.g., organic acid products)• Chemicals for food (sodium acetate)

FY2022• Magnesia

Revenue

Retails LP gas for residential use mainly in Hokkaido andTohoku areas. Also develops fuel conversion and LNG-related businesses amid growing demand for low-carbon

resources for local production for local consumption and tocreate new businesses such as CO2 capture and reuse.

Green Innovation• LP gas and kerosene sales • Low-carbon/decarbonization busi• LP gas related equipment

ness development (CO2 recovery,• LNG related equipmenthydrogen energy, LNG, etc.)

OTHERS62.2 billion yen
FY2022(Results)

resource-recycling energy supply model that utilizes unused■ Digital & Industry■ Energy Solutions■ Health & Safety■ Agriculture & Foods■ Others

Revenue

Operatingprofit

338
69.2
236
152.8
208.9

26.1
4.3
15.5
5.5
5.1

FY2023(Plan)• Vegetable processing• Frozen food• Farmer’s markets, wholesale• Sweets

fruits/vegetables

Natural foods• Manufacturing/sale of agricul-• OEM of beverages suchtural machinery

1,004.9

62.2

Logistics

Global & Engineering• Transportation (general logistics,• On-site gas supply for steel(billion yen)

Includes (1) “Logistics,” which operates a 3PL busi-

chassis transport)• Lorry and cylinder supply

Revenue

Operatingprofitness utilizing cryogenic controlled transportation• Food logistics• Industrial gas equipment (cryogenic

363
70
245
173
229

33.2
4.6
17
7.2
11.4

technology and medical logistics, (2) “Seawater,”• Medical & environmental logistics

equipment, hydrogen, carbon dioxide

which expands its salt manufacturing technology to• Vehicle modifications

gas, etc.)

artificial seawater and environmental business, andSeawater• Engineering(3) “Global & Engineering,” which develops indus-• Production/sale of commercial salt

• High-power UPS

▲1.4

5.7

Adjustments
Total• Ham delicatessen

based

Operation profit

and decarbonized energy. Furthermore, aims to establish a

Agriculture

as vegetable and fruit-

1.0049 trillion yen

Energy Solutions

EnergyFood plant

Onshore aquaculture

Foods

1,080

72

*Adjustments: Elimination of intersegment transactions and profit/loss of
the Company’s headquarter divisions not allocated to each segment

trial gas business in North America and India andElectric power

globally supplies high-power UPS (uninterruptible• Wood biomass power generation

power supplies) used in data centers and other facilities.

60

AIR WATER / Integrated Report 2023

AIR WATER / Integrated Report 2023

61

04

BUSINESSE x ternal Environment

Competitive Edges
Stable supply system through a network of manufacturing,

Digital & Industry

storage, and distribution, including 22 VSUs optimally located nationwide★
Opportunities

Technologies for gas supply and engineering, such as air★ Expanding demand for semiconductors and EV-related

products driven by digitalization★ Expanding demand for CO2 capture, hydrogen, and de-carbonization-related products

separators, hydrogen production, CO2 recovery, etc.

FY2022 Revenue andoperating profit composition(out of companywide results)(billion yen)
Revenue

28 %(338 billion yen)

33.2
26.1

Industrial Gases

50%

FY2023(Plan) 9.1%

1

22%

Business Development Outline
Existing territory

Growth Areas

Strengthening proﬁtability ofReinforcing
electronics
businessregional business,

including price management

Realizationof Growth
Strategies

CO２ recovery /Hydrogen production
technology

Stable supply bases
including VSUs* deployednationwide (22 locations)consolidation of refineries and blast furnaces

Strengthening Profitability

2

Reinforcing Electronics B.U.

3

Bolstering Carbon Neutralitygh ifti nGt o• Ensuring price management for the• Adding on-site gas supply plants to ac-• Developing a stable supply system forhigher value of products and services

commodate factory expansion by majorhydrogen unaffected by trends in raw• Responding to gas demand by ex-semiconductor device manufacturers

material sources, utilizing the high-effi-

panding and optimally locating facili-• Boosting sales of chemical materials

ciency hydrogen generator “VHR2”

ties, including carbon dioxide sources

and supply equipment along the ex-• Installing a CO2 recovery system toand argon production facilities

panding on-site gas supply

recover the CO2 generated during the• I mproving operational efficiency• Developing semiconductor and elec-

production of hydrogen from city gas tothrough integration and reorganiza-tronic materials by integrating expertiseachieve clean hydrogen production

tion of group companies in the elec-

in the electronics and functional mate-• Producing and selling oxygen, nitrogen,tronics and logistics fields

rials fields

and argon using green power

areas such as the environment andelectronics

TOPICS
CO₂

CO₂

Mobilization ofgroup human resourcesbusiness foundation*High-efficiency compact liquefied oxygen/nitrogen generator

AIR WATER / Integrated Report 2023

■ Reduced carbon dioxide and argon sources through• Reallocating personnel to growth

Responding to
growing demandassociated withthe shift to EVs
Capturing theCO₂demand for
decarbonization

costs

reas

Functional
materials(26.1 billion yen)

Risks

■ Impact on product costs due to changes in electricity

anhydride, sodium acetate)

Operating profit

46 %

■

Mid-to Long-Term Policy / Growth Strategy

S

62

share (Magnesia for electromagnetic steel sheets, phthalic(FY)(Plan)

Operating Profit Margin
FY2022 7.7%

Specialty chemical products with top domestic market

wt

2023

it y
t a b ilo ﬁ ssesrPeg u sin
B

ro

2022

(Results)

tronics-related products

equipment in addition to industrial gases

Electronics

34 %

338

tions in demand for semiconductors and other elec-

turing value chain, such as chemical materials and related

Revenue363★ ■ Impact on manufacturing and sales due to fluctua-

Product lineup that supports the semiconductor manufac-

S tre n gt ho f R e g e ni nionalOperating profit

FY2022 Revenue
composition ratio by unithA

Revenue · Operating profit

Manufacturing base strategy
with our hydrogen gas generator, “VHR”
Our Group has a production and supply

a stable supply system that is less sus-

network with nine on-site hydrogen gas

ceptible to trends in raw material sources,

supply sites and eleven compressed

and at the same time, we are promoting ahydrogen production sites, which are

manufacturing base strategy to capture

among the best in Japan. We also develop

the growing demand for hydrogen against

our own hydrogen gas generator “VHR”,

the backdrop of decarbonization. In addi-

which achieves the world’s highest leveltion, since VHR utilizes steam reformingof generation efficiency and reduces

process of natural gas, we plan to installenvironmental impact. Currently, we area CO2 recovery system in the future to

installing VHR when renewing or building

make hydrogen cleaner and expand our

new production facilities. We are building

carbon dioxide gas production bases.

AIR WATER / Integrated Report 2023

63

04

BUSINESS
Competitive Edges

Energy Solutions

Low-carbon technologies such as LNG lorries and LNG-related equipment

E x ternal Environment★ M ore opportunities for carbon-neutral energy busi-★

ness amid the accelerating shift to a low-carbon andOpportunities

decarbonized society★ M ore opportunities for potential M&A, such as lack of

Revenue · Operating profit

FY2022 Revenue andoperating profit composition(out of companywide results)(billion yen)
Revenue

FY2022 Revenue
composition ratio by unit

5%

7%

70

69.2

hydrogen, cultivated in the industrial gas business

LNG related

Revenue

Operating profit

successors for LP gas dealers

Decarbonization technologies, such as CO2 capture and(69.2 billion yen)Supply infrastructure of LP gas covering 99% of Hokkaido area (filling, distribution, sales offices)■ Decreasing demand for LP gas and kerosene due to■shrinking population and global warming

Risks

4.6

4.3

Mid-to Long-Term Policy / Growth Strategy
2022

2023

(Results)(FY)(Plan)

Operating Profit Margin
FY2022 6.2%

FY2023(Plan) 6.6%

Operating profit

8%

LP gas95%(4.3 billion yen)

1

Strengthening Profitability

3• Improving efficiency of LP gas delivery, filling, and metering op-

Business Development Outline

Switching to a Carbon-Neutral Energy Business• Creating new businesses responding to climate change

erations through IoT

issues, such as CO2 capture/reuse, biogas, and liquefied bio-

• Optimizing prices for delivery fees, filling fees, etc.

methane• Improving operational efficiency through integration and reor-• Establishing a resource-recycling energy supply model of lo-

ganization of delivery and filling bases and group companies

cal production for local consumption based on LP gas supply
network and industrial gas customer contacts

LP Gas related
・LP Gas supply infrastructurein Hokkaido
・LP gas direct sales network

Technology(Industrial gas separation andpuriﬁcation technology)

2

Green Innovation

Responding to Low-Carbon Needs• Boosting sales of vertical solar power system “VERPA”• Promoting fuel conversion and expanding sales of LNG-related equipment against the backdrop of low-carbon and decarbonization trends

拠点数○拠点

150 locations

30% share in Hokkaido

Strengthening
Proﬁtability
LNG related
・LNG-related equipment
technology
・LNG supply infrastructure

Responding to LowCarbon Needs

64

AIR WATER / Integrated Report 2023

BiogasCO₂

Hydrogen generators
CO₂ recovery

Investment
Infrastructure
・Production base for industrialhydrogen and carbon dioxide gas
・Nationwide network of cryogenictransportation
・Customer contacts with a wide
range of industries as an industrial
gas manufacturer

CO₂

CO₂

CO2
Carbondioxidegas

H2Hydrogen

CH4

MethaneLiqueﬁedcarbonic
acid, etc.

EV Car

EV Car fuel,etc.

Rocket,plant fuel,etc.

TOPICS

Pioneered the world’s first vertical solar power system “VERPA,”
installable in parking areas, etc.
- vertical type, space saving, and even fits heavy snow areas We have developed the vertical solar

usual flat or sloped type and has a height

power system “VERPA” in cooperationof more than 2 meters from the groundwith Luxor Solar (Germany). This is thesurface to the bottom of the module.

world’s first innovative system that can

Besides, the double-sided power gener-

be used in conjunction with other ap-

ation makes the output almost the same

plications such as parking lots, since it

as that of the sloped type, and its verticalrequires less installation area than theposition makes it resistant to snow.

AIR WATER / Integrated Report 2023

65

04

BUSINESS
Competitive Edges
Comprehensive strength covering across diverse fields from

Health & Safety

acute care to consumer health★ Growing needs for more advanced medical equipment

Stable supply system of medical oxygen through the VSU
network

Revenue · Operating profit

FY2022 Revenue andoperating profit composition(out of companywide results)(billion yen)
Revenue

FY2022 Revenue
composition ratio by unit
Medical Products

23%

245

236

31%

(236 billion yen)

17

Medical Services

15.5

at medical institutions and more efficient hospital oper-★

ationsOpportunities★ S preading needs for community-based comprehensive

care and home medical care

Solid revenue base with a high market share in medical gas-★ Growing needs for nursing care and preventive medi-es and hospital facility construction

Revenue

Operating profit

E x ternal Environment

30%

cine

Infrastructure and network for home healthcare (home★■ O ngoing digital transformation in medical

oxygen therapy), including its equipment manufacturing,■delivery, and maintenanceRisks★ ■ Curbing of medical costs in Japan

Products with a high market share in the Safety Services,such as breathing apparatus and gas extinguishing systems

2022

2023

(Results)

Operating profit

Safety Services

27%

Operating Profit Margin
FY2022 6.6%

Mid-to Long-Term Policy / Growth Strategy(FY)(Plan)

25%(15.5 billion yen)

FY2023(Plan) 6.9%

14%

Consumer Health1Strengthening Profitability2• Adjusting prices to reflect rising costs of materials and labor,• Integrating development, manufacturing, sales, and mainte-including medical gas and equipment construction

nance of medical equipment and nursing care products, etc.

• Reducing costs through self-manufacturing in consumer health• Developing medical equipment using digital technology(injection needles, sanitary materials)

Business Development Outline

3• Improving productivity through labor-saving investments insafety services and aerosols

Environmental Change

Hospitals
Shortage of medical personnel
Deterioration of hospital management

Home Healthcare

Consumer HealthTransition to a community-based
comprehensive care system

Growing demand for
self-medication due to rising
medical costs

Bolstering the hospital businessby reorganizing group companies• Streamlining business sites for hospitals by integration/reorganization

Expanding home healthcare& consumer health• Creating new services for home rehabilitation• Expanding OEM in injection needles• Expanding OEM/ODM in cosmetics
4

Reinforcing the Safety Services• Responding to strong demand for data centers andshipbuilding in the gas fire extinguishing field
Sterilization outsourcing
Medical gas

Existing Areas

Injection needles

SPDAerosol

Oral care
Medical facilities

Comprehensive
Business for
Hospitals
衛生材料

Sanitary materials

Medical merchandise
wholesales
Medical devices

Sanitary
materials

Cosmetics OEM

Home Oxygen Therapy（HOT）
Home Central Venous Therapy
Continuous Positive Airway
Pressure（CPAP）

Cosmetics ODM

In-house development / Open innovation facilities / Alliances with universities and companies / Regional business platform

New Areas

Sensing (light, sound) and AI
analysis technology

Creation of innovative treatment and testing
methods
Provision of medical technology and services

Rehabilitation and remote
medicine technology

Home medical care andRemote medical care

Aesthetic and Medical
analysis technology

Medical, Beauty, Food

TOPICS

Established an integrated system for development,
manufacturing, sales, and maintenance of medical equipment.
Now advancing more needs-driven development,such as ultra-fine rigid endoscopes.
In July 2023, we have concentrated thehance our manufacture’s capabilities.

medical business resources in our Group,

It allowed us to better capture various

including personnel and technology, into

needs of the medical field. Working with

Air Water Medical Inc. Positioning it as a

the Healthcare Development Centercore company in the medical business,and the Healthcare Imaging Division, we

we have built an integrated structure

continue to create products such as thefrom development to manufacturing,ultra-fine rigid endoscope that was jointly

sales, and maintenance in order to en-

developed with Keio University.

*The photo below shows a comparison with a conventional rigid endoscope (right)

66

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04

BUSINESS
Competitive Edges

Agriculture & Foods

E x ternal Environment

Stable procurement of raw vegetables through contract
farming mainly in Hokkaido★ Changing consumers’ awareness of food (more healthy

Nationwide logistics of fruits & vegetables and cryogenic★
Opportunities

transportation technology

Revenue · Operating profit

FY2022 Revenue andoperating profit composition(out of companywide results)(billion yen)
Revenue

FY2022 Revenue
composition ratio by unit

152.8

Extensive production and processing technologies forsweets15%

173

ing birthrate★ E xpansion of the ready-meal and restaurant market

various food needs, from agricultural products to ham andRevenue

Operating profit

and quick)★ F armer shortage amid the aging population and declin-

Foods(152.8 billion yen)

34%

Natural Foods

7.2

34%

5.5

Value chain from farming to procurement, processing, logistics, and retailing

■
Risks

■ Shortage of raw material vegetables due to weather andfluctuating price■ Cost fluctuations in raw materials and logistics

Effective use of the “Hokkaido brand” where our contract
farms and processing plants are concentrated

2022

(FY)

2023

(Results)(Plan)

Operating profit

10%

Operating Profit Margin
FY2022 3.6%

32%

(5.5 billion yen)

FY2023(Plan) 4.2%

Mid-to Long-Term Policy / Growth Strategy

Agriculture1

Business Development Outline

Value chain centered on vegetables
SupplyProcessing

3

Delivering productsthat address needs
and challenges of “food”• Optimizing production system (bases• Utilizing three contract farmers and procur-• Expanding products for home likeand items) in the Foods field

ing channels. Also sourcing raw veggies by

packaged meals and frozen veg-

• Optimizing production lines in the Bev-

spreading production areas to Kyushu

gies for convenience storeserages field (integrate, build new)• Selling the products of the three companies• Full-scale entry into the frozen• Improving procurement to reduce wast-

to each other and gaining more business part-sweets businessed fruits and vegetables in the Retailners, especially in the restaurant and ready-• R esponding to environmental• Lowering logistics costs by leveraging

meal market

needs of customers by expanding

the Group’s logistics infrastructure• Enhancing the fruit vegetable distribution andcirculating containers and paper• Adjusting prices in response to rising raw

infrastructure business by the three’s logistics

container linesmaterial prices

networks and bases• Jointly developing freshness and food processing technologies

Decentralization of
production areas

Vegitech/ Delica Foods
3-company collaboration

Strengthening
procurement
capabilities in Kyushu
Ability to procure raw
materials in Hokkaido
Number of contracted farmers:
approx. 600
Cultivated area: approx. 2,200 ha

Labor shortage/Consumerawareness change

Processing Base
Processing
Technology

Rawmaterial
supplyRaw material
supplyBeverages

Beverage
Manufacturers

68

Sales

Diversiﬁed
sales channels

Strengthening Profitability

2Stronger platform of the fruit andvegetable distribution/processing
through capital alliances with two
industry giants

Ham and Deli
Confectionaries

AIR WATER / Integrated Report 2023

Growth markets

Domestic frozen
vegetable market size

Fruit and vegetable retail(Kyushu-ya)

From farm to table, three companies collaborate to enhance
Farm-fresh market(Yottette)

175.9 billion yen(FY2023 estimate)*+7.0% growth over FY2022

Super markets andConvenience Stores(Ready-made Food Market
and Food Service Market)

TOPICS

Businesssales
destination

distribution and processing platform for fruits & vegetables
In Februrary 2023, we started a threeprocurement and streamlining logistics.

-company collaboration with VEGETECH

Through the three’s sales channels, we will

Co.,Ltd. and DELICA FOODS HOLDINGS

bring the “food” of Hokkaido to the wholeCO., LTD. Vegetech is a trading company

country. We will make the stronger distri-specialized in fruits and vegetables for thebution and processing platform of fruits &processing and intermediate wholesaling.

vegetables that connects producing areas

Delica Foods Holdings sells whole- andand tables. Thereby we aim to provide acut- vegetables for commercial use. With

one-stop solution for food safety and secu-

strengths of the three companies together,rity, as well as contribute to promoting local

we will be enhancing the raw materials

agriculture and reducing food loss.

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04

BUSINESS
Competitive Edges

Logistics / Seawater / Global & Engineering/ Electric Power

Logistics

FY2022 (out of companywide results)
Revenue and operating income
composition(billion yen)
Revenue• Diverse service lineup including chassis transportation,
3PL, medical/environmental logistics, and vehicle body

Operating profit

Global& Engineering

6%

21%

229

208.9

FY2022 Sales
composition ratio by unit
Others

Revenue

32%
12%

5.1

2022

2023

★ (G&E) Expanding demand by more data centers andG&E

ica, Malaysia) and technology of plant engineering (India,
North America)

■
Risks

semiconductor plants■ (Logistics) Japan’s 2024 problem (work hour regulation,

driver shortage, etc.)■ (Seawater/E-power) Rapid market fluctuations in power• Rotary-type UPS with high market share and global main-

generating fuel and maritime transportation costs

tenance system■ (G&E) Differences in laws, regulations, and businesspractices in the local country

Operating profit

9%

Operating Profit Margin
FY2022 2.5%

ide gas equipment for decarbonization

folio derived from salt manufacturing(FY)(Plan)

ture such as water/wastewater★  (G&E) Growing demand for hydrogen and carbon diox-• Stable earnings base through a diversified business port-21%★  (Seawater) Expanding need to renew social infrastruc-cluding for steel production• High share of industrial salt in Japan

Seawater(Results)

Opportunities

SeawaterElectric Power

mand for e-commerce and recycling★

★  (G&E) Growing demand in India for industrial gases, in-• Production system of cryogenic equipment (North Amer-(208.9 billion yen)

11.4

★  (Logistics) Increasing cargo volume with growing de-• In-house logistics network across Japan

modification

Revenue · Operating profit

E x ternal Environment

FY2023(Plan) 5.0%

Mid-to Long-Term Policy / Growth Strategy

Logistics

29%(5.1 billion yen)

1

Expanding overseas businessIndia• Acquiring new onsite projects for steel. Also establishing a supply
chain including manufacturing and logistics infrastructure throughexpansion of sites

Business Fields (Value Chain)

North America• Building a network of gas production and sales bases by promoting

Logistics

Seawater

Operates a wide range of business by utilizing cryogenic transport

Manufactures and sells industrial and household salt, boasting thetechnology gained through our in-house delivery of industrial

top share in Japan. Also involved in environmental products suchgases; including 3PL food logistics, blood transportation, general

as magnesium hydroxide and adsorbents for water treatment,

cargo, chassis, and even design/building of truck bodies.

Reinforcing the foundation of the logistics business• Establishing a cold chain by networking trunk line transportation• Streamlining operations through IOT, such as dispatching andpackage sorting3

Reinforcing the stable earnings structure of Nihonkaisui• Strengthening profitability of existing businesses, including salt

M&As and JVs of industrial gas distributors in North America

manufacturing, mainly by strict price management• Building a foundation for decarbonization-related businesses such

• Expanding urban infrastructure business, primarily by upgrading

as liquefied hydrogen, carbon dioxide gas, etc.

sewer pipes

water supply and sewage facilities, investment in aquariums, andHigh-Power UPS• Developing high-power UPS with greater environmental perfor-• Reducing the risk of market price volatility by more weighting do-

supply of artificial seawater there.

mance to meet growing data center demand

procurement• E xpanding business areas to ASEAN, Taiwan, Japan, and other

Our nationwide logistics network
Seven group companies

2

Aquarium

Asian demand areas by leveraging our engineering expertise inSalt

Fertilizer

Water

power systems

mestic materials for biomass power generation and enhancing

4

Reinforcing the earnings base of the woodbiomass power business• Reducing procurement costs and maintaining stable operations■ 3,891 employees■ 102 sales offices

Foods Seawater■ 2,304 vehicles■ 44 warehouse sites

Chassis by ferry route

Foods
Social (urban)
infrastructure

Saltbusiness(sea-derived)

Environment

MedicalAdvanced engineering structure in place
Electric Powerfor expanding overseas business and electronics
To strengthen our engineering structure, at elevating our engineering technology toEnvironment
Kita-Kanto logistics center

TOPICS

Tomakomai logistics center

which is indispensable for industrial gas make a full range of deep-cooled air separasupply, we will establish a new general engi- tion plants, from small to large scale, and enneering center at the Sakai Plant. The center able our engineering system to handle larger

Global & Engineering (G&E)

Electric Powerwill integrate the development, design, equipment. That will allow us to accelerate

Develops industrial gas-related businesses in India and North

Undertakes wood biomass power generation business in Iwaki

fabrication, operation, and maintenance of the expansion of our industrial gas businessAmerica, manufactures/sells equipment for industrial gases, as

City, Fukushima Prefecture, using the renewable energy feed-inwell as conducts engineering business. Also provides high-power

tariff (FIT) system. Drives low-carbon and recycling-oriented soci-industrial gas plants. We are also expanding in India and other overseas countries, as well

UPS (uninterruptible power supplies) that is essential for data cen-

ety with less environmental impact.

ters and semiconductor factories. See p.44 for more details.

70

AIR WATER / Integrated Report 2023

our plant fabrication plants to approximately as boost the production of our Group’s major

Sakai Plant perspective drawing

double our production capacity. We aim semiconductor device manufacturers.

AIR WATER / Integrated Report 2023

71

05

SUSTAINABILITY

Promoting Sustainability

Our Group has established Materiality as an essential element for realizing its “Sustainability Vision,” which is the vision it aims to achieve in 2050, under its management philosophy and Purpose. Toward this milestone, “terrAWell30,” we will work to create new corporate value throughthe resolution of social issues and contribute to the reduction of the burden on the global environment, resource recycling, and the healthy lives of people.

Basic approach to sustainability

Theme1 Human Capital Management

Our business activities utilize resources on the earth, such as air

for to realize “terrAWell30,” in terms of both global environmental

and water and create products, services, and solutions “indis-

and wellness perspectives. We aim to maximize corporate value

We develop next-generation management personnel, respect diversity

pensable” for people’s lives and industry, while leveraging diverseby solving social issues through our business and linking those(DE&I), and promote proactive choice of their own careers, for realiz-technologies, unique business models, and know-how. Based on

solutions to the sustainable growth of our Group.

ing “management that makes the most of people.”these characteristics, we have defined the society we should aim

Theme2 Environmental Initiatives
2030

dedicate ourselves and our resources
to the creation and development ofbusiness linking air, water and theSustainability Vision

Seven key challenges

Achieve a recycling-oriented

coexist” under our Environmental Vision 2050, and work to reduce our

1. Response to climate change

society through coexistence

impact on the global environment.

2. Realizing resource recycling

4. Coexistence and co-prosperity
with local communities

Purpose5. Wellness(Healthy living)nature’s blessings.

Global Environment

3. Restraining environmental
impact substances

earth.

Meeting society’s needs with

We commit ourselves to realize a “decarbonized society,” a “re-Materiality

Management Philosophy

Backed by an entrepreneurial sprit, we

2050

with society and the earth

source-recycling society,” and a “society where people and nature

Theme3 Human Rights

Environmental Vision

Wellness• Decarbonized society

We are taking steps to fulfill our responsibility to respect human rights,• Resource-recycling society

6. E nsuring the well-being of
employees

including assessments to identify and evaluate potential human rights• Coexistence of people andrisks in our Group.

7.Reinforcing Group governancenatureOthersFor more detailed sustainability data, please visit our website. (Key ESG data)
https://www.awi.co.jp/en/sustainability/esg_data.html

72

AIR WATER / Integrated Report 2023

AIR WATER / Integrated Report 2023

73

05

SUSTAINABILITY

Message from the Head of HR
Strategy Office

Human Capital Management

Four Core Human Capital Investmentsof Air Water

Our Group aims to “create new corporate value by solving social
issues” through synergies generated by leveraging our diverse

The Air Water Group will advance its human resource strategy,

businesses, human resources, and technologies in a creative

which is inseparable from its business strategy, in order to “createmanner. Among these, “human resources” plays the most im-

new corporate value by solving social issues,” and will move to-portant role. Our human capital investment is always based onward our 2030 target named “terrAWell30.”“management that makes the most of human resources.” We

1. Developing next-generation management
2. Respecting diversity (DE&I)
3. Recurrent education

are emphasizing in particular the four initiatives for the human re-

4. Promoting health management

source strategy; “developing next-generation management,” “respecting diversity (DE&I),” “recurrent education,” and “promoting
health management.” At the same time, our basic personnel poli-tem starting in FY2023 to expand opportunities for employees tocy encourages “independence and self-reliance,” “respect for the

make their own career choices by raising their hands, in additionindividual,” and “fostering a climate in which people can grow.”

to transfers carried out from an organizational perspective. We are

We are working to address diversifying social issues such as

working on to grasp information on human resources in the whole

global climate change and an aging society through activities inGroup, promote personnel exchanges, and boost the mobility ofour two business domains of “Global Environment” and “Well-

our Group’s human resources. Also we, as one group, promote theness”. To face and respond to increasingly complex social issues,

hiring, selection, transfer, and training of management personnel

diverse human resources must continue to improve and refine

who will drive future growth, such as by revamping our personnel

themselves. In other words, we must provide opportunities for

system so that “employees who take on challenges” can groweach employee to think independently about their career andand play active roles with a sense of fulfillment. At the same time,

gain experience to realize the career of their choice. Under thesewell-being of our employees will be enhanced by more benefit

circumstances, we have introduced an internal recruitment sys-

programs such as childcare and nursing care support.
These investments in human capital from various angles encourage the growth of human resources throughout the Group.
We will further accelerate the growth of our human resources as agroup by creating an environment where every employee, regardless of age or gender, is able to take on challenges on their own
initiative and based on mutual respect.
Our HR Strategy Office will accelerate our business strategy

Executive Officer,
Head of the HR Strategy Office

Our vision for FY2030

through the promotion of human resource strategy and realize our

Kikue Inoue
Purpose, “Meeting society’s needs with nature’s blessings.”
人事基本方針変革への挑戦を強力に促すHR戦略で、新たな成長をけん引できる多様な人材を育成
自主自立 / 個の尊重 / 人が育つ風土の醸成

External Challenges▪ Growing interest in “intangible assets”

Promotion of integrated group management

Business Strategy

Independence andSelf-RelianceInternal Challenges▪ Increasing need for future

Human Resources
Strategy

Basic Personnel Policy

management talent▪ Necessity of early developmentof the next-generation management

Respect for the IndividualFostering a Culture

We develop a diverse workforce for capable of driving

egies that encourage thechallenge for change.

AIR WATER  /  Integrated Report  2023

Experience

Evaluation

Developmentof the Group’s HR
infrastructure

・Career Path Design System
・Internal recruiting

Talent management
systemin Which People Can Grow

new growth with the strat-

74

・Talent mobility within Group
Acceleration of
HR DX

・Reforming our personnel system(grading, evaluation, and compensation)
・Using engagement surveys
・Utilizing human assessments
・Revamping personnel education system

Training

・Recurrent education

・Career training programs

Developing next-generation management▪ Acceleration of global expansion

AIR WATER / Integrated Report 2023

75

05

SUSTAINABILITY

To promote DE&I

To empower employees to choose their careerand grow the next generation management“Diversity Seminars” for managers.
based on their motivation and abilities and decide their

Aiming to develop management personnel who will be responsible
for the future of our group, our efforts are centered on the threeaxes of “experience” to encourage growth through work, “evaluation” to foster a culture in which people can grow, and “training”
to expand opportunities to learn on their own. By providing a wide
variety of measures as below and allowing employees to seize
opportunities for growth on their own initiative, we will cultivate

employees on maternity leave and returning to work.” We also held

treatment according to individual career choice and growing
speed. We encourage the growth of each employee by providing more opportunities and rewarding those who proactively take on challenges.

Creating a workplace where women can work vigorously and with

From FY2023, we started promoting DE&I activities that added

a sense of fulfillment is the first step of our Group’s D&I (Diversity“Equity (fairness)” to conventional D&I that respects and realizes& Inclusion). This concept launched Women’s Participation anddiversity of human resources in an organized manner. This is to fulfill

Advancement Promotion Project at Air Water in 2016. Over the next

our mission to provide fair work opportunities to each individual withfive years, we took various initiatives in place, such as improving

diverse backgrounds and to utilize the vitality of human resources

workplace culture, supporting continued employment, and promoting

generated through such opportunities.

Initiative #3:
Internal recruiting system

career support, hiring, and training. They brought higher percentages

In FY2023, the internal recruiting system began in earnest.

are one of our KPIs. (See a chart below)

of women in managerial positions as well as leadership positions, both

It indicates important positions to employees with certain

Based on these results, three more regional operating companies

the “founder’s spirit” that is the foundation of our management

abilities and qualifications, expands opportunities for pro-joined this project in FY2022, and we began full-scale D&I activities.

philosophy.

active challenges, and encourages employees to try on their

There we have identified five priority issues based on an employees

own initiatives. The target for FY2023 is to transfer 50 po-

survey: (1) promoting women’s participation and advancement, (2)sitions. In FY2024, we plan to expand the scope of internal

encouraging men to take childcare leave, (3) support for balancing

recruitment to include our group companies.

Initiative #1:
Mission Grade System for managerial
positionwork and nursing care, (4) reforming awareness and culture fordemonstrating initiative, and (5) promoting employment of persons

This system, launched in June 2023, aims to facilitate theInitiative #4:
Establishment of management personnel
requirements and renewal of training systemselection and development of management talent to drive

We have defined the image of management personnel andgrowth. Regardless of age or company history, the system

their requirements that our group aims to achieve in order

determines their treatment based on job size, importance,

to solve social issues. It is a person who possesses the fol-

impact in the individual’s mission, and so forth, whereby en-

lowing three elements: the “conceptual ability” to create a

to take it. In FY2022, we held a “roundtable discussion of male em-

couraging employees’ independent career development.

vision, the “achievement ability” to reliably achieve goals,

ployees on childcare leave” and a “roundtable discussion of female

with disabilities. These aim to enhance the work-life balance of eachand every employee.
In particular, in order to achieve the goal of 40% or more male
employees taking childcare leave, we facilitated communication between employees who have taken childcare leave and those who wish

and the “human ability” to show sincerity in everything they

Initiative #2:
Challenge Grade System for general workers

do, which is the foundation of all of our business activities. In

From April 2024, the personnel system for general workers

our conventional training system into more consistent pro-will also be renewed. It will encourage more challenges

gram focusing on these three requirements.

15

I am motivated and growing every day
I had been interested in the North American business, our priority region, but it made me feel difficulties such as the time difference andlanguage, and I had my own barriers. After hearing stories of senior employees working abroad, however, I strongly felt there would be chancesof my personal growth. I could be involved in expanding the industrial
gas business in overseas markets with abundant business opportunities.
That made me to apply to AIR WATER AMERICA. Once posted overseas,

Reiko Nakagaki

disappeared. There are many colleagues from diverse backgrounds, andkeeps me motivated and growing.

76

AIR WATER / Integrated Report 2023

HR Strategy Office, replacing the previous project-based approach.
Recognizing that respect for diversity is essential for corporate development, we have established a system that promotes DE&I activities
even more vigorously.
Going forward, the HR Strategy Office, each business unit, andgroup companies will work together to implement DE&I activities frommultiple perspectives.

To be a place where women can continue
their careers

least 10% by FY2024 (5.1% in FY2022), and is actively promoting theappointment of women in five steps: recruitment, continued employ-

19.1
13.9

13.9

14.7

11.0

FY2024
Percentage of Womenin Managerial Positions
Target50ment, development,
promotion, and realization of diversity.
2024 年度
女性管理職比率
We are strengthening
our recruitment efforts with the goal of con目標
tinuously increasing the ratio of women to new graduate hires to 40%
or more. We
operate various systems to support women’s continued
10.0
employment, and are currently focusing on “development” by providing career building support through a mentor system and strengthen-

10

2.0
2018

2.8

2019

3.9

4.0

5.1

10%

ing our female leader development program.

Employee engagement surveys
2020

2021

2022

We began conducting engagement surveys in FY2023 in order

女性管理職比率*Non-consolidated,
as主事層（係長・主任）の女性比率
of the end of the fiscal year

to build a working environment where each employee feels fulfilled,

Male childcare leave take-up rate (%)

measures employees’ willingness to actively contribute to their or-

43.3
34.3

40.4

works energetically, and can maximize their abilities. The survey
ganization as well as their own work with enthusiasm and provides abase indicator for our future business and human resource strategies.
Based on the survey results, we will implement measures to improve

28.6

the organizational climate and work environment as well as the willing-

I have much to learn from them about how they work, in their different
cultures, and how they interact with people and organizations. That also

to do. So we have established a specialized department within thePercentage of women in leadership positions

I was able to work face to face with members of the North Americangroup companies, and the barriers that I had built up on my own soon

has achieved some success, but our Group as a whole still has work

Our Group aims to increase the percentage of female managers to at

20

AIR WATER AMERICA INC.
Dept. of Industrial Gas
Director, Business Development

bers of Air Water and three regional operating companies. The project

Percentage of Women in Managerial Positions

女性の積極登用に関する状況(section chief and supervisors) （％） ※当社単体、年度末時点

in the career I chose myself.

Until FY2022, the “D&I Promotion Project” was promoted by mem-

Proactive Promotion of Female Employees (%)

order to develop future management talents, we revamped

Voice from an employee
who used the internal recruitment

Launching a specialized organization
to promote DE&I

ness of employees to make voluntary contributions to the company,

2018

2019

2020

2021

with the aim of increasing employee engagement.

*FY2022 figures to be finalized at end of March 2024.

AIR WATER / Integrated Report 2023

77

05

SUSTAINABILITY

Response to climate change

Environmental Initiatives

Our Group is actively working on carbon neutrality in terms of both our “responsibility” to reduce our own GHG emissions and our “contribution” to reduce GHG emissions in society through our products and business operations.

To make a “decarbonized” and “resource-recycling” society
where “people and nature coexist”
Responding to climate change and other environmental
challenges is a key theme for our Group, which utilizes

Responsibility

Contribution

Reducing GHG emissions from theGroup (Scope 1+2)

Reducing GHG in society throughbusiness activities

the earth’s resources, and is a major factor in achieving• Providing products and solutions that contrib-

sustainable growth. Our Group is working to enhance its
corporate value over the mid-to-long term through the Air• 30% cut by FY2030 (vs. FY2020*)

ute to carbon neutrality• Realizing carbon neutrality by FY2050• Developing technologies to realize carbon neu-

Water Group Environmental Vision 2050 that aims to realize atrality and driving rapid social implementation“decarbonized society,” a “resource-recycling society,” and a“society where people and nature coexist.”*It targets energy-derived CO2 emissions (Scope 1 and 2) from consolidated subsidiaries in Japan, out of GHG.

Specifically, we aim for zero environmental impact from

Balance of Our GHG Reduction Measures

our in-house activities by 2050. As a milestone, we haveset KPIs for targets to be achieved by 2030, and are furtherBstrengthening our efforts in areas such as decarbonization

GHG Reduction
Methodology

ption)

ergy consum

creased enwth (inusiness gro

GHG Reduction

and climate change. At the same time, we are also promoting

EnergyConservation

efforts to contribute to society through our business activities,
with a focus on the “Global Environment,” which we have set

Greening of Electricity

forth as a growth axis for our diverse business domains in(LNG, biomass)

社会にプラスの環境価値を提供

order to realize “terrAWell30.”(Renewable Energy)

Fuel conversion

Fuel conversion

エア・ウォーターグループ環境ビジョン 2050〈 循環型社会 〉(H2, NH3, synthetic fuels)

Delivering positive environmental value to society

2020
Base year

Air Water Group 2050 Environmental Vision <Recycling-Oriented Society>DecarbonizedSociety▪ Zero GHG emissions▪ 100% renewable energy use▪ Locally produced/consumed energy
supplyResource-Recycling
Society▪ Providing recovery, purification,and purification systems▪ 100% recycling of waste▪ Building a circular supply chain

Society
Where People
and Nature
Coexist▪ Water resources and biodiversity
conservation▪ Chemical control and de-plasticization

GHG Emissions by Scope

As of
2022

4.0% reduction 2030 30% reduction
Interim
Targetfrom base year

GHG emissions by factor

tion measures, fuel conversion to reduce and decarbonize energy

1%
4%

Total emissions
in FY2022

5%

For direct emissions from our own production activities (Scope 1),

ing investment in energy-saving equipment and other decarboniza-

1%

9%

2050

Final Target
Carbon neutral

we reduce emissions through energy conservation activities, includ-

7%
1%

53%

from base year

used in production processes, and the use of biomass fuels.
Total emissions
in FY2022

6,513,000 t-CO2e

3,036,000 t-CO2e(Scope 1,2,3)(Scope 1,2)

For indirect emissions from externally purchased energy (Scope 2),
80%

38%

as with Scope 1, we aim to reduce indirect emissions through energy
conservation activities, including investment in energy-saving equipment and other decarbonization measures, and by expanding the use

Response to Climate Change

Realizing Resource Recycling

Restraining Environmental
Impact Substances

Achieving carbon neutrality

Making waste emissions
practically zero

Conserving water resources

FY2030

FY2030

FY203030% less GHG emissions

80% waste recycling rate

(vs. FY2020)(65% in FY2021)

10% less water
consumption intensity*(vs. FY2021)*Water consumption intensity: freshwater usage per revenue

78

AIR WATER  /  Integrated Report 2023

■ Scope1■ Scope2■ Scope3■ Electric power   ■ Company car■ Gaseous body ■ Other■ Coal
■ 6.5 gas
■ Petroleum-basedof green (renewable) energy sources for electricity. Our vision is toreach carbon neutrality by 2050, including the use of next-generationenergy sources (hydrogen, ammonia, synthetic fuels, etc.).

While energy consumption is expected to increase in tandem with

Going forward, we will visualize these measures in concrete

corporate growth in the future, we seek to achieve both reduction

roadmaps for each of our businesses and accelerate our efforts totargets and growth by focusing on three measures: “energy conserva-

implement them. In addition, we will enhance the disclosure of suchtion,” “greener of electricity,” and “fuel conversion.”

information.

AIR WATER / Integrated Report 2023

79

05

SUSTAINABILITY

Disclosure based on the TCFD framework

Indicators and targets

Our strategy

Greenhouse gas (GHG) emissions

We conducted a scenario analysis to identify risks and opportu-

strategy is sufficiently resilient to the uncertain and long-term

Upon the formulation of our Environmental Vision 2050, we havenities related to the unpredictable and uncertain event of climate

future, as both the “4°C Scenario” and the “1.5°C Scenario” are

In August 2021, we expressed our support for the Task Force on

set a GHG reduction target of 30%* below the FY2020 level forchange and how those risks and opportunities might affect our

expected to have sufficient countermeasures and opportunities to

Climate-related Financial Disclosures (TCFD) and joined the TCFD

FY2030, which is a milestone of the Vision.

business strategy. In FY2022, the analysis was expanded to coverbe acquired and expanded, although the impact of both risks andConsortium. Starting in March 2022, we are gradually expanding

GHG emissions in FY2022 were 266 thousand t-CO2e lower

all units and other major operations, using the “4°C scenario” andopportunities are larger under the “1.5°C Scenario”.

our disclosure information in line with TCFD recommendations

than in FY2021, including an increase in business growth, due tothe “1.5°C scenario.” As a result, we confirmed that our basic(governance, strategy, risk management, and indicators and tar-structural changes in the boundary and energy savings in manu-gets). Information based on the TCFD Framework is available on

facturing processes, fuel conversion, and the introduction of on-Type

our website.

site PPAs (power purchase agreements for solar electricity). CO2

1.5°C Scenario

emissions from domestic energy use, a target source of emissions,

Response to TCFD Recommendations
https://www.awi.co.jp/en/

also decreased by 84 thousand t-CO2e compared to FY2021, re-sustainability/environment/tcfd_

sulting in a reduction rate of 4.0% compared to FY2020, the base

recommendations.html

GovernanceTimehorizonMedium tolong term

year for the KPI.

Policy &*Values for GHG emissions in FY2022 are verified by Japan Quality

regula- Medium tolong termtion

Assurance Organization (JQA).

Our Group recognizes that addressing climate change is one of its

GHG reductions that benefit society

most important management issues. Basic policies and important

The “terrAWell30” initiative is designed to create synergies by

Transition

matters related to climate change are discussed by the Corporate

integrating diverse businesses in four business groups to turn so-

risksManagement Committee, and important matters are reported tocial issues into business opportunities. In this plan, our products

the Board of Directors. Climate change matters are managed byand services that help decarbonization and low-carbon emissions

the SDGs Business Promotion Group, established in the Corpo-

are going to reduce greenhouse gas emissions by approximately

rate Planning Office. The group leads the planning and imple-

203 thousand t-CO2e per year. They include wood biomass power

Tech-generation using the FIT system, the compact LNG satellite facility

nologymentation of various measures to address climate change.

Market“V-Satellite” that lowers carbon emissions by converting fuel fromheavy oil, and industrial equipment with higher production efficienBoard of Directors
Reportcy and lower power consumption than conventional gas-related
facilities.

ReportCorporate Planning Office
SDGs Business Promotion Group

ReportRepresentative Directors
ReportCSR Center
Compliance Group

Environmental AuditsGroup Units, Regional Operating Companies, Group Companies
TCFD Promotion Manager

Response

Small

Increased costs due to switching fossil
fuel-derived products, containers, etc., toalternatives

・Collaborate with the plastics recyclers to reduce costs
and search for new materials and new technologies
・Review product packaging and change to environmentallyfriendly raw materials

Small

Increased costs due to higher renewableenergy levy and revised exemption rates

・Develop high-efficiency plants, introduce energy-saving
equipment, improve productivity through DX, and transfer the cost to the product prices

Decreased sales of gases with greenhouse
Medium to
Medium and potentially environmentally damaging
long term
effects

・Sell detoxification equipment to reduce air emission
concentrations and develop alternative products

Decreased competitiveness and sales ofMedium to
Medium buildings that lack sufficient decarbonizalong termtion performance・Promote design and construction through ZEB technology

Short tomediumterm

Large

Increased energy costs, including manufacturing cost, transportation cost, and on-site
power generation, due to the new carbon tax
system・Introduce renewable energy sources such as solar power
generation and utilize them to recycle carbon dioxide
emissionsShort tomediumterm

Large

Increased investment to shift from fossil
fuels to alternative fuels

・Investigate lower cost production, storage, and transportation equipment for carbon neutral alternative fuels

Medium tolong term

Small

Increased sales to low-carbon-oriented
users due to the shift to low-carbon fuels・Introduce low-carbon vehicles and secure supply transport to hydrogen stations
・Switch fuel for own power generation facilities from coalto LNG to lower carbon emissions

Medium to
Mediumlong term

Entry into the carbon market with CO2
fixing technology

・Promptly develop technology for practical application andwidespread use of a process to fix CO2 in exhaust gases
as calcium carbonate

Medium to
Mediumlong term

Increased demand for ZEH/ZEB*

・Develop products with superior decarbonization performance compatible with ZEH and ZEB, and promote
design and construction using such technologies

Short tomediumterm

Large

Expanded business opportunities incarbon-neutral energy and hydrogenmarkets

Short tomediumterm

Large

Increased sales from products using
carbon recycling technology

Medium tolong term

Small

Increased transport and operating costs due
to higher fuel prices

Supervision

Key products and services for decarbonization and low carbon
Corporate Management
Committee

Financial impact

Name of product/service

DetailReduction
contribution(t-CO2e /year)

Wood biomass power
generation

Selling renewable energy electricity under the FIT system

139,417

V-Satellite

Converting from heavy oil to LNG

54,361

Hydrogen gas generator“VHR”, Nitrogen gas generator “NSP-Pro”

Selling of Industrial gas-related
equipment that realize low-carbon

8,883

Total

Opportunities

202,661

SDGs Business
Development Manager

4°C Scenario
Transition
risks

MarketRisk management
Regarding climate change-related risks, the “Corporate Plan-

Physicalning Office SDGs Business Promotion Group” will evaluate andrisks

analyze them based on the TCFD’s recommended scenario

AcuteMedium tolong term

Revealed risks such as shutdowns by physicalMedium damages to facilities and transportation infrastructure

Wood biomass power generation

analysis methodology, working together with the TCFD promotion managers of the business groups. Significant risks are presented and reported to the Corporate Management Committee

Opportunities

and the Board of Directors, which are systematically integrated

Long term

Large

Increased demand for safety services
and infection control products

into the company-wide risk management process.
V-Satellite
木質バイオマス発電所

Hydrogen gas
generator “VHR”
水素ガス発生装置「VHR」

・Build a solid business foundation by securing sources ofbiomethane and accumulating technological development and related technologies
・Research and develop highly efficient hydrogen production methods and develop technologies for the hydrogenvalue chain

Digital & Industry

Energy Solutions

Health & Safety

・Promote efficiency through vehicle decarbonization,
modal shift, and energy savings
・Lower fuel cost for vehicles
・Lower disaster risk by decentralizing manufacturing
sites and develop a BCP for facilities
・Ensure coverage/compensation by purchasing insurance and reviewing contracts with clients・Use multiple suppliers for materials/raw materials,
utilize product stock points, and procure imported salt
・Shorten work period to avoid secondary disasters
during typhoons and to compensate on-site shutdown
・Jointly develop injection needles with major manufacturers and be ready to increase production in case of
emergency・E xpand the lineup of sanitizer-related products anddevelop & sell products to combat infectious diseases
Others (Seawater, Logistics, Construction)*ZEH and ZEB represent Net Zero Energy House and Net Zero Energy Building. They refer to buildings designed to reduce energy consumption in buildings and homes to zero while
creating a comfortable indoor environment.

80

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81

05

SUSTAINABILITY

Resource-recycling society

Human Rights

Society where people and nature coexist

Basic Human Rights Policy (excerpts)
Industrial waste

Water resources

Our Group recognizes that the process of conducting businessWe aim to realize a supply chain that recycles resources by elim-Not only do we manage water use and treat wastewater andmay directly or indirectly affect human rights, and thus re-• The Air Water Group will comply with international norms on

inating waste generation, promoting reuse, and recycling waste.

sewage in accordance with environmental standards, including

spects the human rights of all people involved in our business.

human rights, as well as the relevant laws and regulations

Our target is to increase the waste recycling rate from 65% in

reducing the use of water resources in our business activities

To this end, we have formulated the “Air Water Group Humanin each country and region in which it conducts business.

FY2021 to 80% in FY2030, and further to 100% by 2050.

and reusing wastewater, but we also aim to produce clean wa-

Rights Policy” based on the Guiding Principles on Businesster by purifying toxic substances in the water. We are working

and Human Rights adopted by the United Nations Human• The Air Water Group will ensure that human rights are notto reduce water consumption intensity* by 10% in FY2030,

Rights Council in 2011, and are promoting initiatives to respect

infringed as a result of its business activities. In the event

compared to the FY2021 level (31.8 m3 / million yen).

human rights.

that human rights are impacted, the Group will take appro-

Waste Recycling

FY2030 KPIFY2022 ActualRate

80% (65% in FY2021)

80%

We have achieved the KPI earlier in FY2022, mainly throughstructural changes in the boundary by transferring business of the
Hofu Biomass and Coal Mixed Combustion Power Plant, the sale*Freshwater usage per revenue

priate measures to correct the issue, fulfill its responsibility

Human rights due diligence

Water consumption

KPI for FY2030

FY2022 Actual

intensity

10% reduction (from FY2021)

8.7% reduction

to respect human rights, and build a responsible supply
chain.

of sludge generated at the beverage plant as fertilizer (conversion

Our Group promotes human rights due diligence initiatives toto a valuable resource), and improved product yield at food plants.

To achieve the FY2030 KPI, we will reduce water consumption

minimize negative human rights impacts. As a first step, we• This policy applies to all officers and employees of the Air

Going forward, we aim to further reduce waste based on four basic

under the following policies: (1) reduce water consumption, (2)conducted a human rights risk assessment to identify andWater Group. The Group expects that all business partners

policies: (1) reduce waste volume by revamping production pro-

recycle water, and (3) review production processes.

evaluate potential human rights risks in our Group regarding

concerned with its products and services understand andhuman rights issues listed in the international norms that areagree with this policy, and will engage in human rights

Water consumption (freshwater)closely related to the Air Water Group’s business. Those issues

promotion activities with them.

Our Group uses water resources (freshwater) mainly as raw ma-

include fair wages, working hours, occupational health andIndustrial waste emissions

terials to produce soft drinks and as cooling water for production

safety, forced labor and child labor, freedom of association and• To minimize negative impacts on human rights, the Air Wa-

In the Air Water Group, when looking at industrial waste by cate-and power generation equipment. We promote recycling of water

the right to collective bargaining, and the rights of indigenous

ter Group establishes a human rights due diligence frame-

gory, we release a large amount of soot and sludge from our bio-

resources in our production processes and analyze water after use

people, minority, women, and migrant workers. Specifically, wework, identifies the potential negative impacts it could havemass power generation business (by Nihonkaisui/Electric Powerto ensure that there are no environmental problems before dis-

worked with external experts to organize the value chain andon human rights, and works to prevent and mitigate them.

segment), and a large amount of animal- and plant-based residue

charging it.

stakeholders, as well as conduct a potential risk assessments

cesses, (2) internalize waste disposal, (3) convert waste into valuable resources, and (4) increase the recycling rate.

from the Agriculture & Foods segment.
By Category
種類別
種類別
22% 22%

7%

7%

事業別
事業別

5%

3%

5%

10%

3%

Water usage by business(freshwater)

10%

6%

26% 26% 14% 14%

industrial
Total Total
industrial
FY2022wastewaste
FY2022

72,842t72,842t

12% 12%

Water usage by Source(freshwater)

By Business

20% 20%industrial
TotalTotal
industrial
39%
FY2022 39%
wastewaste
FY2022

72,842t72,842t

35%

FY2022
FY2022
Total usage Total usage

52%

Dust
and soot
Dust andsootCombustion residue
Combustion residue
SludgeSludgeAnimal- and plant-based residue
Animal- and plant-based residue
Waste acid
Waste acid
0ther
0ther

22% 22%

Nihonkaisui
Co., Ltd.
Nihonkaisui
Co., Ltd.
Digital & Industry
Digital & Industry
Agriculture & Foods
Agriculture & Foods
Electric PowerElectric Power
Other
Other

18.602

million m3

52%

20%

20%

Clean Water Clean Water
Industrial Water
Industrial Water
Underground Water
Underground Water
Other

6%

9%
33%

33%

FY2022
FY2022
12%
Total usage Total usage

12%

35%
18.602 18.602
million m3 million m3

20% 20%13% 13%9%• Regarding its response to any actual or potential negative“occupational health and safety,” “foreign technical interns,”

impacts on human rights, the Air Water Group will engage

and “suppliers.” We will be assessing the nature of the risks

in dialogue and discussions with its stakeholders to improveand their impact on each of our priority issues, and taking mea-

its human rights initiatives.

sures to address them.
Process for Promoting Human Rights Due Diligence18.602

million m3
20%

20%

Agriculture & Foods
Agriculture & Foods(Functional Materials)
Digital& Industry(Functional
Materials)
Digital & Industry
Nihonkaisui
Co., Ltd.
Nihonkaisui Co.,Ltd.
(Industrial
Gases)(Industrial Gases)
Digital& Industry
Digital & Industry
Electric
Power
Electric Power
Other
Other

Other

and workshops. That allowed us to identify three key issues:

廃棄物削減のイメージ
廃棄物削減のイメージ

Identiﬁcation and assessment ofnegative human rights impacts(currently being addressed)

A
Commitment
through
Human Rights
PolicyExternal assessment of our environmental initiatives
発生量の削減“A-” rating in Climate Change and発生量の削減
Water
Security
内製化*CDP:An international non-profit organization based in London. Aiming to promotea Leadership Level “A- (A minus)” rating for our advanced activities in the two

management risks, collects, analyzes, and evaluates climate change information

themes of “Climate Change” and “Water Security.”

corporate efforts toward a low-carbon society, CDP considers climate-related
from major global companies, and discloses the results to institutional investors.

External Disclosureof Information

Provision ofComplaint
Handling
Mechanisms

Human Rights
Due DiligenceC

内製化
有価物への転換
有価物への転換リサイクル率の向上
We participate in the Corporate Sustainability
Surveyconducted by CDP*, an interリサイクル率の向上
その他
その他
national environmental non-governmentalorganization. In FY2022, we received

P

Implementation of measures
to prevent and mitigate
negative impacts on humanrightsD

Ongoing human rights
education and training

Tracking and evaluating
the effectiveness of the
response

水使用量削減のイメージ
水使用量削減のイメージ

82

AIR WATER / Integrated Report 2023

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使用量削減
再利用化

使用量削減
再利用化

83

05

SUSTAINABILITY

Three keyissuesSpecific approaches

Attorney in Japan and New York,Emi Omura

Basic concept

We will identify new labor risks throughsecurity and labor audits. For currently
identified significant risks, we will recog-

Our Group is involved in a number of industries through its diver-

Dialogue with human rights experts

sified business portfolio. According to Ministry of Health, Labour

I had the opportunity to have a dialogue with executives in each

“Ensuring the well-being of employees” is one of the Air Water

and Welfare statistics for FY2022, the frequency rate for the man-business unit about the three key issuess. Our human rights

Group’s Materiality. We believe that ensuring safety is a fundamen-

ufacturing industry (100 or more workers) is 1.31. Under the sameand minimize their impact, including safety

efforts must rely on international standards, and in 2022, occu-

tal priority for any corporate activity, and that a company cannot

condition, our Group’s rate would be 1.32.

goals, enhanced training opportunities,

pational health and safety was added to one of them, the ILO’s

survive and thrive without the safety and security of its employees.

and stress checks.

Core Labour Standards. I am encouraged that your group has

Based on this idea, our Group is striving for occupational safety, traf-

expressed a concrete commitment in this field.

fic safety, occupational health, and safety and disaster prevention in

Occupational

nize risks to health and safety and takesafety and healthappropriate measures to avoid accidents

We will ascertain the actual status of the
management system in terms of conformity with such standards as environment,
education, compensation, and housing,In addition, your Group has identified foreign technical intern

Safety and Health Basic Policy
1. We aim to achieve zero work-related accidents, and advanceinterns

ditions are imposed on foreign workers andhave begun to ascertain not only the application of laws and regu-

whether any discriminatory practices arelations, but the actual status of contracts with supervisory bodies

taking place. For high priority areas andand awareness of issues through questionnaires to relevant groupprojects, we will offer training and guid-companies. The next step would be to promote dialogue, such as

ance to managers and supervisors.

conducting interviews with the technical intern trainees.
Regarding human rights risks of suppliers, I was impressedthat the executives examined and actively provided examples

risks, countries, areas, and products to beof the different countries, products, and stages of commercial

investigated. This is based on the idea that

distribution in which they operate in the Global Environment andattention must be paid to human rights in

Wellness businesses, respectively. Going forward, it is expected

the supply chain, both domestically andto make your initiatives even more effective through developing

globally. Of the human rights impacts iden-

and operating a grievance mechanism.

comprehensive and systematic safety measures.

The business that our Group develops is “related-type diversification” originating from industrial gases. Because industrial gases
management systems such as security and disaster prevention

as create a comfortable work environment and realize theis extremely important to fulfill corporate responsibility throughwell-being of our workers.

business continuity. Furthermore, ensuring worker safety in theworkplace and creating a comfortable work environment are

3. W
 e comply with all related laws and operating procedures,

prerequisites for human capital management. Accordingly, ourand create workplaces with clear lines of responsibility con-Group regards occupational health and safety in all our business-

cerning occupational safety, traffic safety, and occupationales as a critical management issue, and is promoting initiatives tohealth, as well as safety and disaster prevention.

reduce occupational accidents.
In FY2022, we focused on “pinched or caught in machinery,”Our safety and health structure is available on the website.
Ensuring a Safe and Secure Work Environment (Commitment to Employees):“falls,” and “falls from height” and thoroughly enforced the threehttps://www.awi.co.jp/en/sustainability/social/safety.html

safety principles (eliminate, isolate, and shut down hazardous
sources) set to reduce risks associated with machinery andequipment. For “falls” and “pinched or caught in machinery”,

KPI: Lost time injury frequency rate

which had a high probability of occurrence in the previous fiscal
year, we set June and December as periods for reinforcing activ-

Sustainable Procurement Policy (excerpts)

ities to eliminate them. Using a check sheet to check the status
Based on the identified Materiality, we have set the frequency rateof implementation of occupational injury prevention measures,• Consideration for the global environmentof lost time injuries (during operations* ) for the entire Group as a

we identified and reduced risks such as aisles and work stations

Based on the Air Water Group 2050 Environmental Vision, we will en-

KPI. We are working to improve workplace health and safety with

where falls are possible.

At the Air Water Group, we are building good partnerships withgage in environmentally friendly procurement activities that consider

our suppliers toward the Sustainability Vision, “achieving a recy-

decarbonization and biodiversity.

cling-oriented society through coexistence with society and the• Quality, price, delivery time, and low carbon

earth.” Also, we conduct procurement activities in line with theWe will engage in fair and transparent procurement activities, and“Air Water Group Sustainable Procurement Policy,” which clearly

widely procure low-carbon goods and services with excellent quality,

states that we give consideration to the global environment andprice, and delivery time from our suppliers both in Japan and abroad.

• Consideration for human rights, labor standards,

the goal of reducing this figure to 0.9 or less by FY2024.

We will respect basic human rights and engage in procurement activities that consider both labor environments (prohibition of forced andchild labor) and safety.

Also, we held in-house training for key persons in charge ofhealth and safety at each business site to educate them on specific methods to reduce occupational accidents, such as risk as-

Rate of accidents associatedwith days away from work
(while on duty)

Factors and numberof lost time injuries

sessment methods and documentation of work procedures. For9%

use of VR and small hands-on equipment to improve their sensi-

new employees, we provide experiential education through the

2.0

1.60
1.5

5%
1.31
1.17 1.15

6%

1.0

0.90
0.5

0.0 2018 2019 2020 2021 2022

23%

5%

1.32

and safety and health

AIR WATER / Integrated Report 2023)

*An index of the number of deaths and injuries due to work-related accidents per one

2. We ensure the safety and health of our employees, as wellhighest priority risks.

84

×1,000,000

are required to provide a stable supply to society, ensuring safety

tified, we will take measures to address thebasic human rights throughout our supply chain.

total working hours

Initiatives to reduce workplace accidents

such as food manufacturing, machinery and metals. I can appreciate the fact as the first step of human rights due diligence that you

Human rights conscious procurement

number of work-related casualties

million total working hours.

based on the business characteristics of the target occupations,from the perspective of whether strict con-

We will identify the types of human rights

accordance with our Safety and Health Basic Policy.

(

Frequency rate =trainees as an important stakeholder (subject of human rights)

Foreign technicalSuppliers

Occupational Health and Safety(Security and Safety Services)rious accidents, we regularly inspect accident sites and conduct

FY202264 casesrisk assessments to prevent recurrence.
19%

14%
19%

2024（FY）
Targettivity to danger. As for group companies that had experienced se-

Falls
Pinched or caught in machinery
Reaction of movement / unreasonable movement
Falls from heightContact with hot and cold objects
Being struck hard
Trafﬁc accidents
Other

Executive Officer, General Manager of CSR Center

Kosuke Komura

AIR WATER / Integrated Report 2023

85

05

SUSTAINABILITY

Promoting Community Partnerships
and Social Contribution Activities
Our Group is actively promoting initiatives to contribute to solving local issues, mainly through our regional operating companies, whilebuilding cooperative frameworks, such as partnerships with local governments, in each region. As a member of the community, we makedonations to local governments, create new employment opportunities for the disabled, and support job training for financially disadvantaged youth.

Established donation support programs for Hokkaido municipalities“Hometown Support H Program” Air Water Hokkaido in our Group has
established the “Hometown Support (Furusato Ouen) H Program,” inwhich H is pronounced “eichi” and means wisdom in Japanese. This
program will provide donation support to all 179 municipalities in Hokkaido, up to a total of 1 billion yen over an eight-year period from FY2023
to FY2030. We will accept applications every year for a wide range of
projects in municipalities that contribute to solving various social issues,
including from the perspectives of “Global Environment” and “Wellness”

Corporate Governanceof our growth axes. In selecting projects to be supported, we set up a promotion committee of the program consisting of external experts with in-

Air Water believes that conducting fair corporate activities insight into regional administration and economy. The committee will makecompliance with social good sense and earning the trust of all

a comprehensive judgment of sustainability, ripple effects, creativity, cooperativeness, and contribution to

stakeholders are indispensable for sustainable development of

the region, among other factors, before deciding on the recipients of support.

a company and maximization of its corporate value. To this end,
we recognize that the top management priority is to enhance our

Air Water Smile(a Type-A continued employment support office*)
contracted dishware reuse business,
contributing to reducing plastic waste

internal control system, ensure compliance, strengthen risk man-In this business, dedicated reusable dishes are leased to event operators. After2021) are disclosed in the Corporate Governance Report, which isuse, they are collected, cleaned, and reused, thereby reducing plastic waste. We

available on our website. (https://www.awi.co.jp/en/sustainability/

will continue to expand contracted projects that help solve such regional issues as

governance/governance.html)

agement, and make constant efforts to improve governance.
Some of the details of our efforts related to “Japan’s Corporate
Governance Code” by Tokyo Stock Exchange (revised in June

well as provide new employment opportunities and rewarding jobs to people withdisabilities.
*Welfare service that allows people with disabilities or serious illnesses who have difficulty working in general companies to work in a place with acertain level of support under an employment contract.

Social contribution activities in India
Air Water India Private Limited, a group company, is actively engaged in social
contribution activities in India. The company supports vocational training for
economically disadvantaged youth conducted by Pan IIT Alumni India, a program
started by alumni of the Indian Institutes of Technology. In addition, to support
public school education, the company provided free of charge a complete set of
drinking water facilities and renovated toilets to four schools in the Bellary regionof the country.

86

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87

06

GOVERNANCE

Corporate Governance Structure

Election of Directors

Group’s business operations.

Management System

The Board of Directors have organized a skill matrix based(5) technology and R&D, (6) human resources management,

AIR WATER INC. is a company with an Audit & Supervisory

Internal Control Systemon the following seven areas of experience and skills to coverand (7) global. The criteria help make the appointment of theBoard. The Board of Directors makes important management

Regarding internal audits, the CSR Center Auditing Group,

each function and business domain of the Company: (1) corpo-

right person in the right position for accurate and prompt deci-

decisions and supervises the execution of business operations,

our internal auditing division, conducts regular audits of ourrate management, (2) finance affairs and accounting, (3) risksion-making. The skill matrix for directors and auditors is pre-while the Audit & Supervisory Board members audit director

Group’s compliance with laws, regulations, and internal rules,

management and legal, (4) business strategy and marketing,sented below.

performance by attending meetings of the Board of Directors

as well as the appropriateness and adequacy of business pro-and other important meetings. The term of office of directors is

cesses. It also monitors and supervises the establishment andset at one year in order to clarify the management responsibility

operation of internal control systems to ensure the reliable andof the directors for each fiscal year. In August 2022, we also es-

appropriate financial reporting. The roles include evaluating thetablished the Nomination and Compensation Committee with

Skill Matrix for Directors and Audit& Supervisory Board Members

Corporate
management

Financialaffairs andaccounting

Risk
Businessmanagement strategy andand legal
marketing

Chairman and Representative Director
Chief Executive Officer (CEO)●effectiveness of those systems as the lead department, under

Ryosuke Matsubayashi

President and Representative Director
Chief Operating Officer (COO)●a majority of independent outside officers (directors and au-

the responsibility and direction of the Representative Director.

Keita Hara

Senior Managing Executive Officer

ditors). This aims to strengthen the independence, objectivity

Furthermore, CSR Center Compliance Group has been estab-

Hidetoshi Onoe

and accountability of the Board’s functions related to the nomi-

lished, which specializes in management and control of compli-

Managing Executive Officer
Representative of Tokyo

nation and compensation of directors and senior management.

ance, safety/disaster prevention, environmental preservation,

Shigeki Otsuka

Managing Executive Officer

Tsuyoshi Tanaka

Managing Executive Officer

Yukiko Sakamoto

Outside Director

Independent

Takao Matsui

Outside Director

Independent

Yoshihiro Senzai

Outside Director

Independent

Hiromi Yanagisawa

Standing Statutory Auditor

Yuji Ando

Standing Statutory Auditor

KunihikoTsuneyoshi

Outside Corporate Auditor(Standing)Independent

Atsushi Hayashi

Outside Corporate Auditor

Independent●

Nobuo Hayashi

Outside Corporate Auditor

Independent●and quality assurance across the Air Water Group.

Corporate Directors

Kikuo Toyoda

Business Execution System
We hold a Corporate Management Committee every month as aheads of each business division. The committee is set to sup-

The Board of Directors makes decisions and reports on import-

port accurate and prompt decision-making in our Group’s wide

ant matters related to the management and business execution

business fields. The Corporate Management Committee en-of the Group, in addition to matters stipulated by law or thegages in preliminary deliberations on matters to be discussed

Articles of Incorporation, and fulfills functions related to theat Board of Directors from wide and diverse perspectives,

mutual supervision and monitoring of directors. In FY2022, 14

and also examines important matters on the execution of ourmeetings were held.

Audit & Supervisor
Board Members

Board of Directors

general rule, which mainly consists of internal directors and the●Technology
and R&D

Human
resources
management

●

●

●

Global

●

●

●

●

●

●

●
●

●

●

●

●
●

●

●

●

●

●

●

●
●
●

●
●

●

Air Water Inc. Corporate Governance Structure and Features
Internal Director

Independent Outside
Director

Percentage of Outside
Directors

Percentage of Independent
Outside Corporate Auditors

3

33 %

60 %

3/9
persons

3/5
persons6

persons

persons

2 males 1 female

Nomination andcompensation committee

3

persons

Representative Director/CEO 1 person
Outside director 1 person
Outside Corporate 1 person

General Meeting of Shareholders

Management

Nomination andcompensation committee
Response

Appointment and dismissal

Consultation

Auditing

Board of Directors
Submission and reporting

Business
execution

Supervision

Board of Corporate Audit &Supervisory Board Members

Accounting Auditors
Accounts audit

Reporting88

AIR WATER / Integrated Report 2023

regarding the nomination and compensation of directors as welldirectors, as a voluntary advisory body to the Board of Direc-

as senior management.

tors. The committee aims to strengthen the independence,

Composition of the Committee

Key roles of the Committee

1. Shall consist of at least three (3) directors or corporate auditors elect-

The Committee shall deliberate and report to the Boardof Directors on the following matters in response to inqui-

2. The majority shall be outside directors or outside corporate auditors(both are independent officers).

Reporting

Reporting

CSR Centerries from the Board:

submitted to the General Meeting of Shareholders)

Representative Director/CEO

Internal auditing

Audit Groupmittee in August 2022, with a majority of independent outside

1. Matters related to the proposed election/dismissal of directors (to be

Supervisionand direction

Units/Business Divisions/Corporate Division/Technology Management Division/Group Companies

Internal control

objectivity, and accountability of the Board of Directors’ roles

Appointment and dismissal

Submission and reporting

Reporting

Cooperation

We have established the Nomination and Compensation Com-ed by the Board of Directors.

Operations audit

Cooperation

Corporate Management
Committee

Appointment
and dismissal

Appointment and dismissal

Establishment of The Nomination and Compensation Committee

Auditing andreporting guidance

Representative Director

Outside Director: One

CEO: One

Outside Corporate Auditor: One

Reporting(Members as of September 30, 2023)

2. Matters related to the proposed selection/dismissal of representative
directors (to be submitted to the BoD following the GMS)
3. Matters related to the remuneration system and evaluation of directors
4. Matters related to succession planning

Compliance GroupAIR WATER / Integrated Report 2023

89

06

GOVERNANCE

Efforts to Improve the Effectiveness of the Board of Directors

Utilizing knowledge of outside officers

discussions to promote understanding of the contents and enhance corporate value.

We strive to strengthen the management supervisory function

Officers’ Remuneration

Approach to Cross Shareholdings

Composition of the remuneration

Policy on cross shareholdings

The remuneration for directors consists of fixed basic remu-

We hold cross shareholdings for the purpose of maintainingby having at least one-third of the Board of Directors consist ofAssessing the Board efficacy

neration, performance-linked remuneration, and stock-based

relationships with business partners, expanding transactions,outside directors and by receiving useful advice on the Com-

In order to improve the effectiveness of the Board of Directors

remuneration (excluding outside directors), as resolved by theand creating business opportunities. Regarding the new acqui-pany’s management from an objective outside perspective. In

as a whole, we conduct an annual survey for all directors andBoard of Directors.

sition or continued holding of cross shareholdings, decisions

addition, the Chairperson of the Board of Directors asks outside

corporate auditors. The responses are analyzed and evaluatedNon-monetary remuneration (stock-based remuneration) isare based on whether our relationship with the company indirectors for their questions and opinions on each agenda itemby an external third-party organization with respect to the effec-

in the form of restricted stock, and shares of Air Water common

question (i.e. business transactions, tie-ups, collaborations,in an effort to improve the quality of discussions.

tiveness of the Board of Directors as a whole, and a summary ofstock are granted after a certain period of transfer restriction,etc.) can help to raise the corporate value of the Group over thethe results is disclosed.

with the aim of promoting efforts to enhance corporate value

medium to long term.

Free discussions

Supporting outside directors/corporate auditors

After the Board of Directors meeting, we hold a free discus-over the medium to long term and further align values withshareholders. The standard ratio for each type of remuneration

Examination of cross shareholdings

sion-style meeting for directors and corporate auditors to

When outside officers are appointed, we brief them on our busi-

is 7:2:1 for basic remuneration, performance-linked remunera-

The Board of Directors closely examines each individual crossexchange opinions and develop a wide range of discussions

ness, finances, and organization, as well as conduct site visitstion, and non-monetary remuneration, respectively.

shareholding every year to review whether the benefits andtoward the sustainable growth of the Company.

to our plants and other facilities. In addition, we offer training
sessions with topics appropriate to the situation at the time byPre-briefing for the Board

outside experts, as necessary, and help them to acquire andIn advance of the Board of Directors meetings, the Governanceupdate the knowledge required for outside directors and out-

Office, the secretariat of the Board of Directors, distributes

side corporate auditors to properly fulfill their roles and respon-materials on agenda and matters to be reported to outsidesibilities.

directors and corporate auditors, where the persons in charge

There is also a database of materials and minutes of pastof drafting proposals provide explanations and facilitate active

Board of Directors meetings that is made accessible by all directors and corporate auditors including the outside members.

The Assessment Process

STEP2

STEP3

Conduct a survey of all directors

Analyze the results

Disclose future tasks in Corporate

and corporate auditors

and identify issues

Governance Reporting is aligned with our goal of improving corporate value overtors is limited to basic remuneration only.

the medium to long term. Shareholdings that are deemed insignificant or unreasonable are reexamined and sold or reduced

Officers’ Remuneration in FY2022

Classification

Directors(excluding outside)

Auditors

STEP1

risks of the holding worth capital costs and whether such hold-

The remuneration for outside directors and corporate audi-(excluding outside)

Outside Officers

Total
amount(millionyen)

617

as necessary.

Total amount by type(million yen)

Basic

Performance- Nonlinked
monetary

439

128

Numberof officers
covered49

AIR WATER INC. is the parent company of Kawamoto
9

48

48

−

−

2

85

85

−

−

7

FY2022 under the restricted stock remuneration plan.
3.The number of eligible directors above includes two directors who retired at
the close of the the 22nd Annual General Meeting of Shareholders held on
June 28, 2022.

Issues from FY21 survey

Initiatives in FY22

Assessment

Approach to Succession Planning<The Board’s structure>
Be more diversified<The Board’s operation>
Be further enhanced
including pre-briefing

Establishing the Nomination and Compensation
Committee
Electing outside directors
with management experience- T he size and structure of theBoard is appropriate.
- S electing new directors withmanagement experience stimulated the Board discussions.

Enhancing the meeting
materials

The proposal process is appropriate in each of the drafting department, the administrative department for preliminary review, andthe secretariat that manages theBoard of Directors meetings.

ers through Air Water’s nationwide sales network of medical-related companies, mutual cooperation in developing advanced

2. Non-monetary remuneration, etc. represents the expensed amount in

The Board of Directors meeting’s structure, operation, discussion,

trust of business partners, while expanding group synergies forboth companies. The synergies include cultivating new custom-

1. Bonuses are paid to directors as performance-linked remuneration.

and monitoring function/ Support system for the directors and auditors / Own initiatives, etc.

Corporation, a listed company. The listing of the subsidiary canprovide the subsidiary with advantages such as securing the(Notes)Questions

Approach to Parent-Subsidiary Listing

medical hygiene materials products and higher value-added
services, and expanding product lineups through the subsidiary’s supply of hygiene materials, medical supplies, and nursing
care products to the parent. We believe that parent-subsidiarylisting is an effective option when it is possible to maximize thecorporate value of the entire group including subsidiaries, on
the premise that the subsidiary’s unique corporate culture andWe recognize that one of the key roles role of the Board of Di-

management autonomy are maintained and the rights of mi-rectors is to select and train candidates for the next generation

nority shareholders are respected.

of the management team and to develop a succession plan
The assessment was generally
positive, indicating that the effectiveness of the Board of Directors
is sufficiently ensured.

for them. Succession planning is not a short-term initiative,
but a long-term, ongoing process. We believe that thickening
the ranks of not only the CEO but also the next generation ofmanagement personnel will contribute to the enhancement ofcorporate value over the medium to long term. Based on suchview, we hold extensive discussions through the Nomination
and Compensation Committee and other committees.

90

AIR WATER / Integrated Report 2023

AIR WATER / Integrated Report 2023

91

06

GOVERNANCE

Reinforcing Risk Management

Enforcing Compliance

Our Group’s business is diverse. We have established a cross-com-

Compliance structurepany risk management system to accurately and promptly grasp

As an organizational system for compliance management, wethe overall picture of risks, including from a global perspective, andhave established the CSR Center Compliance Group, a dedicatedto mitigate such risks.

department responsible for the integrated management of compliance issues in the Group under the direct control of the representa-

Our Risk Management Structure

Outside Directors Roundtable
We interviewed the outside directors about the strengths
and challenges of the Air Water Group,
which has formulated the vision “terrAWell30” toward 2030.

tive director. A responsible person is appointed there from among
directors, executive officers and board members. Furthermore,

1. The CSR Center Compliance Group, which is under the directeach business group has set a department responsible for compli-

control of the representative director, is in charge of manag-

ance that works closely with the CSR Center Compliance Group to

ing risks related to compliance, safety and safety services,

strengthen our compliance system for Air Water and its group com-environmental preservation, and quality assurance, which

panies.

are considered particularly important risks in the Group’s

Air Water Group Code of Ethical Conductbusiness activities, across the entire Group.
2. For individual risks related to information security, quality

The Air Water Group Code of Ethical Conduct provides all officers

control, intellectual property, business contracts, etc., weand employees of Air Water and its group companies with guide-

establish departments in charge of each risk and have themlines to help them act in strict conformance with the laws and reg-

prepare internal rules, manuals, and training sessions, asulations and behave in an ethical manner. In addition, we createdwell as manage such risks in the Group through preliminary

a Compliance Handbook, which breaks down the code and gives

inspections and approval systems.

examples of violations in an easy-to-understand manner, and dis-

3. Risk Management Examination Meeting is regularly held by
the Compliance Group as its secretariat to monitor the status

tribute it to all employees in the Group to raise their awareness of
the Code.

of risk management and to promote the strengthening of risk

Compliance Committee

management within the Group.
4. For overseas business, we manage our global risks across

We have established the Compliance Committee as a consul-

the company by cooperating with the Global Management

tative body in which relevant divisions get together and discuss

Office, newly established under the Global Business Unit forcompliance issues. The Committee considers specific measuresmonitoring their businesses.

concerning the policies and instructions on compliance given by

Risk Management Structure

Reporting

Supervision

Risk Management
Examination Meeting
Compliance Committee

Response

Reporting
ReportingDirection

Consultation

Reporting

CSR Center
Compliance Group
Reporting

Representative Directors

Direction

Business Units

ReportingDirection

Yukiko Sakamoto

OutsideDirector

Yoshihiro Senzai

pre-briefing sessions on the Board meet-of Directors also needs more diversity.

ways to deal with compliance violations if they occur. In FY2022,

ernance structure? What are someing’s agendas. It can take up to an hour for

Now we have one female board member,the Committee met twice to discuss important compliance mattersof the challenges you see?

a single agenda item, which is very helpful

so I think it would be better to raise thisSAKAMOTO: I believe our internal control

in organizing points for discussion at theratio as part of the governance structure.

system has been well established. The

Board meetings.

In addition, with many group compa-

Internal reporting systeminternal auditing unit is functioning sys-

We have established an internal reporting system to enhance thetematically, and I think the management is

SENZAI: I feel the Board of Directors’ dis-seas subsidiaries, the internal audit de-effectiveness of compliance. Anyone who becomes aware of a vi-

highly aware of the importance.

cussions are very open. I am able to speak

partment is struggling, but there is somenies and an increasing number of over-olation or potential violation of laws, regulations, and internal rules

The outside directors actively speak out

my mind all the time, and the roles of eachvariation in the penetration of governancemay file a report. We provide internal and external contact points

based on their experiences, and the man-outside director, based on their areas ofthroughout the Group, and I recognize

for whistleblowers and stipulate that whistleblowers will not beagement accepts their comments, making

expertise, are well combined to allow forthat further strengthening of internal con-subjected to any unfair treatment. The contact information for theme feel that our governance is functioning

lively discussions from a variety of angles.

trols is necessary.

“hotline” of such whistleblower system is displayed on a Compli-

effectively.
SAKAMOTO: This year, Japan has re-

SENZAI: The challenge is that we still

MATSUI: Our governance structure hasleased a target this year of 30% or more

don’t have enough perspectives on gov-

been enhanced year by year. I see ourfor female directors in Prime listed com-ernance in many areas. We need thediscussions are lively especially at thepanies by 2030. We believe that our Board

stronger governance by embracing theand every employee of the Group is fully aware of the system.
In FY2022, there were 33 whistleblowing cases, none of which
had a material impact on our business.

AIR WATER / Integrated Report 2023

OutsideDirector

Q: What is your impression of our gov-

ance Posters placed at all business locations to ensure that each

Direction

Divisions where risk occured

92

Takao Matsui

the representative director, and other issues, and also discusses

within the Group.

Board of Directors

OutsideDirector

AIR WATER / Integrated Report 2023

93

06

GOVERNANCE

preserving the global environment, andour communication with our external

Q: There are various initiatives ongoingthe improvement of the working environ-stakeholders enough to gain further un-

to develop the next generation ofment, including work-life balance.

derstanding of our company.

management talent. How would you
assess our human capital strategy?

MATSUI: Because outside directors are

Outside Director

Takao MatsuiOct. 1982 	Joined Asahi & Co.
(now KPMG AZSA LLC)
July 2010
Partner, KPMG AZSA LLC
Sept. 2014 Auditor, KPMG AZSA LLC
June 2020 	Corporate Director, AIR WATER INC.
(current)

SAKAMOTO: Our company gives our

responsible to shareholders and otherstrengths and weaknesses as seen

employees the opportunity to gain man-stakeholders, I believe I should not befrom the perspective of an outside

agement experience at group companies

a mere adviser, but must supervise anddirector?

from a relatively young age, which I feel

Yoshihiro Senzai
Apr. 1971 	Joined Hitachi Maxell, Ltd.
(now Maxell Holdings, Ltd.)
June 2016
Chairman, Maxell Holdings, Ltd.
Oct. 2017 	Representative Director and Chairman,
Maxell Holdings, Ltd.; Director andChairman,Maxell, Ltd.
June 2022
Corporate Director, AIR WATER INC.
(current)

monitor the business operations of the

SAKAMOTO: Our strength is a very wide

contributes to the development of man-

executive side thoroughly. Therefore, evenrange of business areas and diverse

agement. I also expect that the mission

if it is something difficult for me to say, I

group companies. However, this can be

grade system introduced in FY2022, along

try to speak up using the knowledge I havea strength and a weakness at the samewith the internal recruitment system, will

human resources, especially management

its subsidiaries, the environment will be

gained from my 35 years at an auditing

time, so we must conduct our business

function effectively and deliver results inpersonnel for manufacturing, is an issue. I

prone to fraud, so special attention shouldfirm. In addition, I make sure to speak up

with caution. Also, each of our employees

the future.

have been focusing very much on humanbe paid to this point. As with the develop-

if I have a feeling of strangeness about thelikes a challenge that is a great strength

On top of that, promoting women’s

resources training in my career. In partic-

ment of overseas human resources, I will

perspective of external stakeholders. I

and why I believe our company will be able

leadership has greatly advanced as wellular, since all technical employees havebe proactive in making recommendations

also try to avoid reading the room.

to achieve further growth.

over the past decade. I think the main rea-different backgrounds, the content of theirto strengthen the internal controls of oursons for this is that the top management

understanding may inevitably change

overseas subsidiaries.

perspectives of various stakeholders

SENZAI: I see four roles to fulfill. The first

MATSUI: Our strength lies in our ability tohas a high level of insight regarding theeven if they are trained on a one-off basis.

outside the company, but my impression

is to offer advice as an outside director bycreate synergies among the businesses,

advancement of women, and the women

Therefore, in human resources training,

SENZAI: I do not yet have the impressionis that our company is still focused on

deeply understanding each of our busi-

given our diverse business operations

themselves have been actively involved

it is necessary to set up case studies andthat our company is aggressively expand-internal viewpoints. In this age, I think it

ness. Air Water started with industrial gas

and a number of group companies. Ourin raising awareness and improving thecreate common values and terminology

ing overseas, but I appreciate the fact thatis important to both enhance the internaland has expanded into other businessweakness is that the synergy effects andenvironment. However, as a company thatamong all employees. To this end, I think

we are pursuing overseas expansion forenrichment and strengthen the incorpora-areas, but I would like to provide advice on

PMI results of acquired companies havefocuses on overseas expansion, I think

we should set a time frame, select the tar-

the sake of growth. Our strength is that wetion of external perspectives.

businesses other than gas after a more in-

not been fully disclosed in numerical

we should not be satisfied with this. It isget group to some extent, and thoroughly

are able to expand overseas based on our

depth study. The second is to give advice

form, which is not well linked to the valua-

important to move forward with the goal

conduct the training program.

industrial gas and other businesses withon cross-sectional functions across thetion of the stock price. That seems to meof setting a global standard by further

business units. The third is to appropri-

the weakness. I believe it is important topromoting the activities of younger gener-

SAKAMOTO: I am working on threeately reflect the perspectives of external

improve these points and disclose more

ation, foreign nationals, and women.

points in particular. The first is to acceler-

stakeholders in the management. And theinformation outside the company in theate the realization of diversity. Society isfourth, I recognize that we must develop

future.

Q: How do you see your role

infrastructure elements. In addition to

Q: We are accelerating our overseas

that, we have a diverse business domain

expansion for further growth.

and can offer a variety of products and

How do you evaluate the strategy?

services. So, I believe that we can surely

MATSUI: I see it is a good trend that initia-

MATSUI: I am sure that overseas ex-

grow if we can successfully arrange andchanging at a tremendous pace, and I be-tives for the utilization and development

pansion is essential for our company’s

bring what is appropriate for each country.

lieve we must further accelerate the cur-of human resources, such as the internal

growth. I am strongly in favor of promoting

And since a brand is essential to get

recruitment system, are being introduced

business development in India and North

trust in each local market in expanding

one after another. Since our business di-America, where market growth is expect-

overseas, I believe we need to promoteversifies and keeps expanding overseas,

ed in the industrial gas field, which is themeasures to strengthen our brand power

I feel that the next generation of manage-

keystone of our diverse business domain.

suited to each country.

ment must acquire essential management

However, even in the industrial gas

From a technical point of view, I also be-skills through experiencing not only thebusiness with a proven track record andlieve that we need to appropriately man-sales but also various departments, such

expertise, there are business risks unique

age the technology we possess in terms ofas planning and human resources.

to overseas, and once a problem occurs,

intellectual property.

in the Company?

rent speed of our company. The second
is to advice on the development of humanresources. This is also important because
human resources are the treasure of acompany and support its growth. The
third is to help our employees work with ahigh sense of satisfaction and contributeto the development of society. Especially, I
am eager to advise on our Company’s goalof the realization of a healthy and longlived society, social contributions such as

94

Q: What do you consider to be our

Outside Director

AIR WATER / Integrated Report 2023

Outside Director

Yukiko Sakamoto
Apr. 1972 	Joined the Ministry of Labour(now the Ministry of Health, Labour,and Welfare)Apr. 1996 	Deputy Governor of Shizuoka
Prefecture
Aug. 2002 	Director, Human Resources
Development Bureau, Ministry of
Health, Labour and Welfare
July 2004
Member of the House of Councilors
June 2014
Corporate Director, AIR WATER INC.
(current)

overseas business can be greatly affected.
SENZAI: I am also a visiting professor at a

In overseas, if the parent company does

university, and I believe that education of

not have good management control over

AIR WATER / Integrated Report 2023

95

06

GOVERNANCE

Board Members(Directors and Audit & Supervisory Board Members) (as of September 30, 2023)
Corporate Directors
Chairman and Representative Director
Chief Executive Officer (CEO)President and Representative Director
Chief Operating Officer (COO)

Outside Director
Independent Officer

Kikuo Toyoda

Ryosuke Matsubayashi

Yoshihiro Senzai

Number of the Company’s shares held
87,872
Board of Directors meeting attendance in FY22
14/14

Number of the Company’s shares held
26,217
Board of Directors meeting attendance in FY22
11/11*

Number of the Company’s shares held
5,307
Board of Directors meeting attendance in FY22
11/11*

Nov. 1973 	Joined Daido Sanso Co., Ltd. (merged to the current AIR WATER INC. in
Apr. 1993)
July 1999 	Executive Officer and General Manager of Human Affairs, Daido Hoxan
Inc. (now AIR WATER INC.)
June 2001 	Executive Officer and General Manager of Welfare and Care at Medical
Business Division, AIR WATER INC. (“Air Water”)
June 2012 Managing Director and President of the Medical Company, Air Water
June 2019 Chairman & Representative Director and CEO, Air Water (current)

Apr. 1988	Joined Daido Sanso Co., Ltd. (merged to the current AIR WATER INC.
in Apr. 1993)
June 2014 	Executive Officer and General Manager of Engineering Business
Division at Industrial Company, AIR WATER INC. (“Air Water”)
Apr. 2017 	Senior Executive Officer and General Manager of Engineering
Supervisory Office, Air Water;	President and Representative Director, AIR WATER PLANT &ENGINEERING INC.
June 2018	Corporate Director and in charge of Engineering Management Office,
AIR WATER; Director and President, AIR WATER AMERICA INC.
June 2022 	Representative Director, Executive Vice President, COO, and in
charge of Global and Engineering, Air Water
Apr. 2023
President & Representative Director and COO, Air Water (current)

Apr. 1971
Joined Hitachi Maxell, Ltd. (now Maxell Holdings, Ltd.)
June 2016 Chairman, Maxell Holdings, Ltd.
Oct. 2017 	Representative Director and Chairman, Maxell Holdings, Ltd.; Director
and Chairman,Maxell, Ltd.
June 2022 Corporate Director, AIR WATER INC. (current)

Corporate Director, Managing Executive Officer
Representative of Tokyo
In charge of Health & Safety Group
General Manager of Consumer Health Business Unit

Standing Statutory Auditor

Standing Statutory Auditor

Hiromi Yanagisawa

Yuji Ando

Hidetoshi Onoe

Number of the Company’s shares held 2,000
Board of Directors meeting attendance in FY22
14/14
Audit & Supervisory Board meeting attendance in FY22
14/14

Number of the Company’s shares held 11,454
Board of Directors meeting attendance in FY22
14/14
Audit & Supervisory Board meeting attendance in FY22
14/14

Corporate Director
Senior Managing Executive Officer
General Manager of Group Technology Center

Keita Hara
Number of the Company’s shares held
10,570Board of Directors meeting attendance in FY22
11/11*

NEW

Number of the Company’s shares held
6,683

Audit & Supervisory Board Members

June 1985 Joined Sharp Corporation
Dec. 2016 Director, Sharp Life Science Corporation
Mar. 2019 President, AIR WATER BIODESIGN INC.
Feb. 2020 	Senior Executive Officer and General Manager of Corporate Technology
Strategy Center, AIR WATER INC. (“Air Water”);
President, AIR WATER BIODESIGN INC.
June 2022 	Corporate Director, Senior Managing Executive Officer, in charge of
Wellness Field, and Director of Group Technology Center, Air Water
June 2023 	Corporate Director, Senior Managing Executive Officer, and General
Manager of Group Technology Center, Air Water (current)

Nov. 1988 Joined KYOWA CO., LTD.
July 2007
Director and Vice President, Air Water Sol Inc.
Jan. 2015 	Executive Officer, AIR WATER; President and Representative Director,
Air Water Sol Inc.
Apr. 2022 	Managing Executive Officer, General Manager of Consumer HealthBusiness Unit in Health & Safety Group, AIR WATER INC. (“Air Water”)
Apr. 2023 	Managing Executive Officer and in charge of Health & Safety Group, Air
Water
June 2023 	Corporate Director, Managing Executive Officer, Representative ofTokyo, in charge of Health & Safety Group, and General Manager ofConsumer Health Business Unit, Air Water (current)

Apr. 1971
Joined Sumitomo Corporation
Oct. 1997 	General Manager of Financial Affairs, Sumitomo Corporation Europe
LimitedApr. 2001 	General Manager of Metal Resources and Accounting Division,
Sumitomo Corporation
June 2003 	Executive Officer and General Manager of the Financial Affairs Division
at Corporate Solutions Center, AIR WATER INC.
June 2016 Standing Statutory Auditor, AIR WATER INC. (current)

Apr. 1971
Joined Hoxan Corporation (now AIR WATER INC.)
June 2001 	Executive Officer and General Manager of the General Affairs Division
at Corporate Solutions Center, AIR WATER INC. (“Air Water”)
July 2008
General Manager of the Internal Auditing Office, Air Water
June 2016 	Executive Officer of the Air Water Group; Representative Director &President,Gold-Pak Co., Ltd.
June 2020 Standing Statutory Auditor, Air Water (current)

Corporate Director
Managing Executive Officer
In charge of Global & Engineering Group
General Manager of Engineering Center

Corporate Director
Managing Executive Officer
In charge of Digital & Industry Group
General Manager of Industrial Gases Business Unit

Outside Corporate Auditor (Standing)Independent Officer

Outside Corporate Auditor
Independent Officer

Kunihiko Tsuneyoshi

Atsushi Hayashi

Tsuyoshi Tanaka

Number of the Company’s shares held 1,590
Attendance at Board of Directors meetings in FY2022
14/14
Audit & Supervisory Board meeting attendance in FY22
14/14

Number of the Company’s shares held 2,507
Attendance at Board of Directors meetings in FY2022
13/14
Audit & Supervisory Board meeting attendance in FY22
13/14
Apr. 1980
Sept. 2004
Sept. 2008
Apr. 2010
June 2016

Shigeki Otsuka

96

Corporate Director

NEW

NEW

Number of the Company’s shares held
4,044

Number of the Company’s shares held
13,280

Apr. 1984
Joined The Kansai Electric Power Co., Inc.
May 2020
Advisor, AIR WATER SAFETY SERVICE INC.
June 2021 President and Representative Director, AIR WATER CRYOPLANT, LTD.
Oct.2022 	Executive Officer, AIR WATER INC. (“Air Water”); President andRepresentative Director, AIR WATER ENGINEERING INC.
Apr. 2023 	Corporate Director, Managing Executive Officer, and in charge of Global
and Engineering, Air Water
June 2023 	Corporate Director, Managing Executive Officer, in charge of Global &Engineering Group, and General Manager of Engineering Center, Air
Water (current)

Apr. 1991 	Joined Daido Sanso Co., Ltd. (merged to the current AIR WATER INC. in
Apr. 1993)
July 2011 	Manager of Air Gas Business under Industrial Gas Business at Industrial
Company, AIR WATER INC. (“Air Water”)
June 2014 	General Manager of Kinki Regional Office, Air Water; President andRepresentative Director, Kinki Air Water Inc.
Apr. 2016 	Executive Officer and General Manager of Industrial Gases Business at
Industrial Company, Air Water
Apr. 2021 	Managing Executive Officer, Air Water; President and Representative
Director, Air Water East Japan Inc.
June 2023 	Corporate Director, Managing Executive Officer, in charge of Digital& Industry Group, and General Manager of Industrial Gases Business
Unit, Air Water (current)

Apr. 1981 	Joined The Sumitomo Trust and Banking Co., Ltd. (now Sumitomo
Mitsui Trust Bank, Limited)
June 2005 	Manager of Kanazawa Branch, The Sumitomo Trust and Banking Co.,Ltd.
June 2010 	Executive Officer and Director of 1st Osaka HQ Sales Office, The
Sumitomo Trust and Banking Co., Ltd.
June 2020 Standing Corporate Auditor, AIR WATER INC. (current)

Outside Director
Independent Officer

Outside Director
Independent Officer

Outside Corporate Auditor
Independent Officer

Yukiko Sakamoto

Takao MatsuiNobuo Hayashi

Number of the Company’s shares held
4,428
Board of Directors meeting attendance in FY22
14/14

Number of the Company’s shares held
233
Board of Directors meeting attendance in FY22
14/14

Number of the Company’s shares held 2,314
Attendance at Board of Directors meetings in FY2022
14/14
Audit & Supervisory Board meeting attendance in FY22
13/14

Apr. 1972 	Joined the Ministry of Labour (now the Ministry of Health, Labour, andWelfare)Apr. 1996
Deputy Governor of Shizuoka Prefecture
Aug. 2002 	Director, Human Resources Development Bureau, Ministry of Health,Labour and Welfare
July 2004
Member of the House of Councilors
June 2014 Corporate Director, AIR WATER INC. (current)

Oct. 1982
July 2010
Sept. 2014
June 2020

AIR WATER / Integrated Report 2023

Joined Asahi & Co. (now KPMG AZSA LLC)
Partner, KPMG AZSA LLC
Auditor, KPMG AZSA LLC
Corporate Director, AIR WATER INC. (current)

Apr. 1988
Professor, School of Law, Senshu University
Apr. 2001 	Professor, Graduate School of Law, Kyoto University; Professor, Facultyof Law, Kyoto University
Oct. 2012
Vice-President for Legal Affairs and Compliance, Kyoto University
June 2020 Audit & Supervisory Board Member, AIR WATER INC. (current)

Judge, Osaka Family Court
Chief Judge, Kobe District Court
Chief Justice, Takamatsu High Court
Professor, Graduate School of Law, Kyoto University
Audit & Supervisory Board Member, AIR WATER INC. (current)*Number of attendance since inauguration

AIR WATER / Integrated Report 2023

97

8,000

07

4,000
0

8,066

8,091

400

DATA

200

2019

2020

0

2021

Financial and Non-Financial Highlights
Financial *Under JGAAP until FY2018, IFRS from FY2019 onward
Profit attributable to owners of parent
Basic EPS

Revenue
Operating profit(billion yen)(billion yen)

2,000

62.2

65.2
1,500

43.6
1,000

801.5

50.6
809.1

51.2
806.6

888.7

10.0

80

60

60

45

40
20

2019

7.9

2020

0

2021

IFRS Standards
5.4

2022
6.6

43.2

40.1

9.3
6.4

11.5

10.0

9.7

7.9
5.9

5.4

6.6

5.8

0
JapaneseStandards

2019

2020

2021

2022

27.4

2019

2020

3,119
1,586

2,000

2021

（FY）

2022

0

IFRS Standards

0.88
334.2

3,441

188

155

169

169

19

21

21

19

2019

2020

2021

2022

175

167

24
2018

221

1,563

190

186

200

3,036

100

71.6

57

43.8
23.9

0.82
337.8

0.80
373.7

(times)

(yen)

1.0

100

0.75
0.8
390.2

80

0.4

40

100

0.2

20

0.0

0

0

2020

2021

IFRS Standards

  Interest -bearing debt (left axis)
Net D/E ratio (right axis)

AIR WATER / Integrated Report 2023

2022

(FY)

2020

2021

2022

（FY）

  Freshwater（FY）  Seawater*Including consolidated subsidiaries with a large environmental impact

Industrial waste emissions

Women in new graduate hires

(t)

(%)

80

80,181 81,457

90,000

18.4

-14.2

−32.1

2019

*Based on the Act on the Rational Use of Energy until FY2019 / the GHG Protocol
from FY2020 onward*Data has been third-party verified by the Japan Quality Assurance Organization

60,00070.6

72,84260
40

49,67230,000

47.8
33.3

34.4

2018

2019

30.8

20

−71.8
2019

2020

2021

2022

(%)

36.4
29.6

29.8

44

33.9

40

60

30

29.3
56

40

44

20

2018

2019

2020

2021

2022

0

（FY）

2020

2021

2022

*Including consolidated subsidiaries with a large environmental impact*AIR WATER INC. only

Women in supervisory positions

Lost time injury frequency rate (at work)

（FY）

20
16

0

2019

JapaneseStandards

  DPS (left axis)
Payout ratio (right axis)

2020

2021

2022

（FY）

(%)

19.1

(%)

11.0

13.9

13.9

2.0

14.7

4

1.60
1.31

1.5

12

1.17

1.15

2020

2021

1.32

1.0

8
10

2018

0

（FY）

IFRS Standards

60

200

2018

0

97,023

Free cash flow
Operating cash flow

0.6

JapaneseStandards

56.7

0120,000

Dividend per share
Payout ratio

263.2

2019

76.6

JapaneseStandards

IFRS Standards(billion yen)

2018

245

3,000

50

2018

Interest -bearing debt
Net D/E ratio

0.79

300

5,000

100

0

(FY)

ROE (on an owners of the parent basis)
ROA (on a pretax basis)

500

6,000

4,000

15

100
80
60
40
20
0
−20
−40
−60
−80
−100

2

2018

(million m3)(1000t -CO2e)150(billion yen)4

98

176.84 200

Free cash flow
Operating cash flow

6

300

(yen)

  Profit attributable to owners of parent (left axis)
Basic EPS (right axis)

14

400

26.5

(Scope1+2)

191.06120.98

30.4

2018

(%)

8

147.43

JapaneseStandards

ROE
ROA

10

135.3430(FY)

  Revenue (left axis)
Operating profit (right axis)

12(billion yen)

Water consumption

GHG emissions

1,000

0

2018

1,004.9
11.5

500

5.9
JapaneseStandards

Non-financial

2.0

2.8

3.9

4.0

2019

2020

2021

5.1

0

2018

2022

0.5

（FY）

0

2018

2019

IFRS Standards

Women in managerial positions
Women in leadership positions

2022

（FY）

*The Air Water Group (in Japan)*AIR WATER INC. only, as of end of the FY.

AIR WATER / Integrated Report 2023

99

07

DATA

10-Year Financial and Non-Financial Data
Under JGAAP(unit: million yen)

Fiscal year

2013

2014

2015

2016

2017

2018

Net sales

641,256

660,541

660,622670,536

753,559

801,493

Operating income

35,07836,12639,524

41,341

42,39843,580Ordinary income

36,281

38,15935,07541,251

44,691

46,977

Net income attributable
to shareholders of parent

19,22520,702

20,13922,33725,173

26,468

Capital investment

32,34832,02842,236

40,58761,30978,526

Depreciation

24,33725,222

26,62025,524

27,11927,620Cash flows from operating activities

48,24851,071

43,51258,87347,76456,690Cash flows from investing activities(52,186)(35,483)(40,647)(44,357)(61,637)(88,804)

Cash flows from financing activities

4,620(7,940)(8,115)(8,553)

4,489

40,905

Free cash flow

(3,938)15,5872,864

14,516(13,872)(32,114)

Total assets

528,092

547,642575,832

629,115

693,101

783,047

Interest-bearing debt

155,479

154,864

157,795

172,403203,183

263,165

Shareholder’s equity

203,500

226,375

234,726

255,984

277,954291,211

Fiscal year end

Under IFRS

(unit: million yen)

Fiscal year

2018

2019

2020

2021

2022

Revenue

742,288

809,083

806,630

888,668

1,004,914

Operating Profit

42,79950,616

51,231

65,17462,181

Profit before tax

42,111

49,83049,651

64,23060,978

Profit30,13933,52630,41046,26342,649Profit attributableto owners of parent

28,81530,43027,36743,214

40,137

Capital investment

82,26962,90051,972

45,461

66,367

Depreciation

30,77634,99439,03343,37844,987

Cash flows from operating activities

61,212

43,78476,601

71,572

56,953

Cash flows from investing activities(91,615)(115,597)(52,699)(53,154)(71,135)

Cash flows from financing activities

39,04580,981(20,889)(6,622)

19,257(30,403)(71,813)23,902

18,418(14,182)

Total assets

785,944899,699

926,821

1,022,031

1,091,645

Interest-bearing debt

276,942334,248

337,826

373,745

390,219

Equity attributable to owners of parent

278,053

331,992

357,797395,131430,232

147.33147.43120.98191.06176.84

40

44

44

56

60

198,705,057

229,755,057

229,755,057

229,755,057

229,755,057

Free cash flow

Fiscal year end

Per-share data(yen)Per-share data

EPS (yen)

98.32

105.75102.73114.53128.95135.34

BPS (yen)

1,040.22

1,155.80

1,196.92

1,312.55

1,422.60

1,487.58

DPS (yen)

26

28

28

34

38

40

Ordinary income margin (%)

5.7

5.8

5.3

6.2

5.9

5.9

Operating profit margin (%)

5.8

6.3

6.4

7.3

6.2

ROA (%)

7.2

7.1

6.2

6.8

6.8

6.4

ROA on a pretax basis (%)

5.7

5.9

5.4

6.6

5.8

ROE (%)

9.9

9.6

8.7

9.1

9.4

9.3

ROE (%)

10.6

10.0

7.9

11.5

9.7

Equity ratio (%)

38.5

41.3

40.8

40.7

40.1

37.2

35.4

36.9

38.6

38.7

39.4

Net D/E ratio (x)

0.66

0.58

0.57

0.55

0.65

0.79

Equity attributable to ownersof parent to total assets (%)

Dividend payout ratio (%)

26.4

26.5

27.3

29.7

29.5

29.6

Net D/E ratio (x)

0.88

0.88

0.82

0.80

0.75

Dividend payout ratio (%)

27.1

29.8

36.4

29.3

33.9

Overseas revenue ratio (%)

5.0

6.9

8.6

8.6

9.3

Number of employees (consolidated)

15,825

18,211

18,843

19,56020,109Number of consolidated subsidiaries*

112

125

124

127

142

Major indicators

Basic EPS (yen)DPS (yen)
Shares outstanding at the year end

Major indicators

Non-financial information
Number of employees (consolidated)

9,557

10,147

11,334

12,58014,26515,757

Number of consolidated subsidiaries

75

81

85

101

111

130

Non-financial information*Only includes subsidiaries where AIR WATER INC. directly applies consolidated accounting and excludes indirect subsidiaries.
The direct subsidiaries include joint operations (joint control business).

100

AIR WATER / Integrated Report 2023

AIR WATER / Integrated Report 2023

101

07

DATA

Investor Relations

Corporate Profile

We explain our ideas in dialogues with analysts, institutional investors, individual investors, and other stakeholders. The valuable com-

Company Namements we receive are proactively fed back to the management to enhance corporate value.
Head Office

Major IR Activities

Track Record

FY2020

FY2021

FY2022

Private meetings with institutional
investors

133

128

128

Earnings calls for analysts/institutional investors

4

Presentations on management policy/plan

0

4

4

1

1

(As of March 31, 2023)

AIR WATER INC.
12-8 Minami-Semba 2-chome, Chuoku, Osaka, Japan
Tel: (+81) 6-6252-5411
Fax: (+81) 6-6252-3965

Major Selected
Indices

Listed Exchanges

Tokyo, Sapporo

Securities Code

4088

Facilities tours

0

0

2

Shareholder Registry
Administrator

Brokerage conferences

3

4

4

Fiscal Year

From April 1 to March 31

Events for individual investors

0

0

1

Annual General Meeting
Held every Juneof Shareholders

A+

Japan Credit Rating Agency,
Ltd. (JCR)

AA-

TOPIX

iSTOXX MUTB Japan
Proactive Leaders 200

Russell /Nomura Prime

JPX-Nikkei 400

MSCI Japan Empowering
Women (Select)

MSCI Japan Empowering
Women (WIN)

Nomura Enterprise Value
Allocation

Nomura RAFIS&P/JPX Carbon Efficient

URL

https://www.awi.co.jp/en/(As of September 30, 2023)

Year-end dividend: Every March 31■ Individuals, etc.

■F inancial

institutions
44.8%

13.2%

■ Foreign corpo-

rations, etc.
27.1%

Authorized Shares

480,000,000

Outstanding Shares

229,755,057

Number of Shareholders

26,898■ Other corporations■F inancial instru-

ments business
operators
2.3%

12.6%

Principal Shareholders(As of September 30, 2023)

Holding Ratio (%)

The Master Trust Bank of Japan, Ltd. (trust account)

29,278,200

12.74

Custody Bank of Japan, Ltd. (trust account)

13,388,100

5.83

Sumitomo Mitsui Trust Bank, Limited

7,936,000

3.45

Nippon Steel Corporation

6,900,000

3.00

Sumitomo Mitsui Banking Corporation

6,259,198

2.72

Air Water Customers’ Stockholding

5,999,248

2.61

https://www.awi.co.jp/en/ir.html

STATE STREET BANK AND TRUST COMPANY 505001

5,688,854

2.48• Management Policies

National Mutual Insurance Federation of Agricultural Cooperatives

4,951,500

2.16

North Pacific Bank, Ltd.

4,574,473

1.99

Air Water Group Stockholding

4,167,964

1.81

For more extensive IR-related information, please
visit our Investor Relations website.

• Financial Data
• Stock Data
• IR Library

AIR WATER / Integrated Report 2023

20,109 (consolidated)

Shares Held

Morningstar Japan ex-REIT Gender Diversity Tilt

102

Number of Employees

Interim dividend: Every September 30

Rating and Investment
Information Inc. (R&I)

IR Website¥55,855 million

Distribution of shares by owner

4-1 Marunouchi 1-chome, Chiyoda-ku,
Tokyo, Japan
Sumitomo Mitsui Trust Bank, Limited(As of September 30, 2023)

Paid-in Capital

Stock Information

Record Dates(As of September 30, 2023)

September 24, 1929

Stock & Shareholder Information

Annual General Meeting: Every March 31

RatingEstablishedName

AIR WATER / Integrated Report 2023

103