Fujikura Group

Integrated Report

2020
Fujikura Ltd.
5-1, Kiba 1-chome, Koto-ku, Tokyo 135-8512, Japan“Tsunagu”
Technology

Fujikura Group Response to COVID-19

CONTENTS

COVID-19 impact on the Fujikura Group01

Fujikura Group Response to COVID-19

The prolongation of the COVID-19 pamdemic has resulted in restriction of various business activities of the Fujikura Group. This
could seriously affect the financial condition and business performance of the Group. We recognize the potential for dysfunction in

About the Fujikura Groupthe Fujikura Group supply chain and restrictions on various business activities to seriously affect Fujikura’s performance.

03

Fujikura Group Corporate Philosophy (MVCV)07

At a Glance

11	The “Tsunagu” Connecting Technologies that
Support Our Lives

09

History of the Fujikura Group

13

Value Creation Model

15

Capital Supporting Value Creation

41

Performance and Forecast

The novel coronavirus (COVID-19) task force in Fujikura is surveying the impact of COVID-19 on business activities andconsidering ways to respond.

Ensuring the safety of Group employees and implementation of various kindsof support

Message from the President

Fujikura is implementing various measures to prevent the spread of COVID-19, such as physical condition checks, temperature

19

Message from the President

taking, and wearing masks. We are working to reduce the risk of infection in all workplaces by implementing telecommuting at thehead office and plants, work shifts that make it possible to provide more distance between employees who work in plant operations
in manufacturing, and other measures. Fujikura is also establishing a work environment that is easy to work in by providing
additional support and childcare leave to raise the next generation, to employees who have children of elementary school age or
younger, and establishing a consultation hotline for employees who find it difficult to work at home.

Growth Strategy
27	Explanation of the 100-Day Plan for
Operational Turnaround

Power & Telecommunication Systems Company

33

CSV in the Fujikura GroupElectronics, Automotive & Connector Business Company

382030 Vision

Real Estate Business Company

39

Contributions to Achieving SDGs

51

Research & Development

53

New Businesses

Foundations for Growth
Governance55

Top Management73 	Specifying Climate Change-Related Risks andOpportunities

57

Messages from Outside Directors

75

Expansion of Environmentally Friendly Products

61

Corporate Governance76

Ascertaining the Financial Impact

66

Risk Management77

Human Resource Development

Fujikura established a telecommuting system in 2017 to improve productivity by implementing efficient workstyles that are not

67

Compliance

78

Health Management

limited by location and has also used this system as a means of preventing the spread of COVID-19. These rules were revised to68

Quality79

Respect for Human Rights in Business Activities

create the Telecommuting Rules and we are working to implement them from January 2021. The limit on the number of days

69

Inherent Safety80

Practicing Human Rights Due Diligencetelecommuting can be used was abolished, payment of a telecommuting allowance was added, and other revisions were made to70

Responsible Mineral Sourcing

81

Special Initiatives of the Fujikura Group

Acrylic panels installed at thereception counter (head office)

Infection prevention measures for the
Taking the temperature of a visitor (Numazu Works)
showroom meeting corner (head office)Revisions to the telecommuting systems to accommodate the new normal

Supporting Fujikura Gakuen

the rules to accommodate the new normal.

Risks and Opportunities of Climate Change

Participation in IP Open Access Declaration Against COVID-19
Fujikura is participating in the IP Open Access Declaration Against COVID-19 to prevent the spread

71	Fujikura Group Policy on Responding to Climate
Change72

Fujikura Kiba Millennium Woods
85

Corporate Profile

Climate Change Governance and Risk Managementof COVID-19. The intent of this declaration is to refrain from exercising intellectual property rights
possessed on development, manufacturing, sale, and other activities for a certain period of time to end
the COVID-19 pandemic. Fujikura endorses the objective of this declaration and will continue to support
preventing the spread of COVID-19.

1

Fujikura Group Integrated Report 2020

Editorial Policy
In editing Fujikura Group Integrated Report 2020, we focused on giving shareholders, investors, and other stakeholders an understanding of initiatives
targeting sustained growth of the Fujikura Group from multiple perspectives. We are aiming to achieve greater stakeholder engagement through disclosure of
the information contained in this report and use of this information by everyone who has read it. We will also use the opportunity presented by supporting theTask Force on Climate-related Financial Disclosures (TCFD) to enhance the information we disclose relating to climate change.

Fujikura Group Integrated Report 2020

2

Fujikura Group Corporate Philosophy (MVCV)
Since the start of our Third Era in 2005, we have striven to create new paths based on the Group Corporate Philosophy, MVCV.
In a society that is undergoing dramatic transformation, the Fujikura Group hereby resolves to create new paths with renewed[Commentary]strength, in order to become a company with the potential to continue long into the future.
•

The only way to create these new paths is to provide a value experience exceeding our customers’ imaginations.

•

To exceed our customers’ imaginations, we must be fully aware of the issues our customers face, and consider everything from

Customer Satisfaction“Are you doing enough to ensure customers

their points of view.
•are perfectly satisfied?”

To be fully aware of the issues our customers face and consider everything from their points of view, we must strive to acquire a

Finally, the key factor in following this path is for each of us to proceed virtuously as a member of society.

Missionfor our customers around the world using “tsunagu”

of capabilities (including skill and knowledge). Through the(the Japanese word meaning “connecting”) technologies.
We dedicate ourselves to providing exceptional
products and solutions, earning our customers’ trustand contributing to society.

customers’ viewpoints, think about how to truly fulfill each

“Are you willing to take up challenges

needs, each of us will challenge current norms and values. By

to drive progress?”doing so, every one of us is accountable for creating changes

work together with others to deliver
the best possible result for our company?”

for the better in people, organizations, products and solutions.
In the Fujikura Group, each one of us acknowledges individual
differences and talents. We encourage and support one
another’s efforts. As a whole, we strive to create products
and solutions that meet the existing and potential needs ofcustomers through cross-organizational cooperation.

connect people, information and power sources.
We proactively seek better ways to solve customer issues
using our products, skills and services. By doing so, we deliver
value that fulfills customer needs and thus contributes to

Vision[Commentary]

Fujikura’s vision is to be the most trusted partner

We want our customers to reach out to us first with their issues

in our markets, to continuously develop innovativeand concerns. We can ensure this by building trust throughconsistently fulfilling our promises and working together withour customers as their partner of choice. With credibility built

Behavior Framework
1

Let’s proactively take an interest in social and market trends and reflect on
our work

2

Let’s always think about how to provide value that exceeds expectations

3

Let’s be open to diverse opinions and create new ideas

4

Let’s be bold in trying something different

5

Let’s start with our aspirations and work back from those to calculate what
the next action should be

6Let’s be professional and accountable for our own actionsShow interest proactively
Exceed expectations
Embrace different opinions
Drive change
Aspire first
Take ownership with integrity

over time, we can create a better tomorrow for our customers.

Code of Conduct

We strive to become the leading player in

We strive to always be the pioneers in our field and to have1

Code of conduct for ensuring employees’ wellbeing and creating a safe, secure and pleasant work environment

our markets by utilizing our “tsunagu” technologies,

a positive impact on society. We realize this through being

2

Code of conduct for ensuring each employee performs operational procedures properly

potential needs of our customers.

3

Code of conduct for maintaining relationships with business connections

Each individual within the company will

Everyone in the Fujikura Group understands our common

4

Code of conduct for communicating with and contributing to the development of communities and society

endeavor to become an essential player,

goal and plays his/her part in achieving it. With such people

5

Code of conduct for increasing shareholder value and for dialogue with investors

thus developing a team that can truly help

working together as one, the Fujikura Group competes on the6

The basic code of conduct for complianceand to positively impact our communities.

and tirelessly developing innovative
and useful products and solutions.

Fujikura make its mark on the world stage.
3

as fellow employees. We consider internal and external

In order to respond to ever-changing social and customer“As a Fujikura associate, are you driven to

application of our technology, we create opportunities tosolving social issues and building a better society.

and relevant products and solutions,customers and consumers, but also internal customers such

Change for the Better

Collaboration[Commentary]
Tsunagu technology refers to the Fujikura Group’s unique set

Customer satisfaction refers not only to satisfying externalneed, and then reflect this in our products and services.

broad range of knowledge and information as highly-active, flexible, and open-minded teams.

The Fujikura Group’s mission is to create exceptional value

Fujikura Group Integrated Report 2020

About the Fujikura Group

Core Value

Forewordaware of changes in the world. In addition, we continuously
develop products and solutions that meet the existing andworld stage.

Fujikura Group Integrated Report 2020

4

Fujikura Group Corporate Philosophy (MVCV)Strengthening Risk Management and Group Governance Based on a Common
Understanding of MVCV

About the Fujikura Group

Initiatives Aimed at Restoring and Enhancing Corporate Value (Brand)
Initiative 1 Provide Explanations for the Mission, Vision, and Core Values (MVCV)
Fujikura designated 2005 as the beginning of the new third stage of the company. We formulated a new corporate philosophy

Future Activity 1 Promote Internal Branding Through Activities to Instill MVCV

entitled Mission, Vision, and Core Values (MVCV), aimed at the challenge of carving out a new path. We have used various activities

We will promote internal branding through activities to instill MVCV in the future. We provided the explanations in FY2019 andto instill MVCV and make sure that every employee understands the importance of this philosophy and can act with judgment

entered the stage of sharing MVCV and putting it into practice in FY2020. At this stage, we are not only promoting a logicalbased on our corporate philosophy in daily activities.

understanding of the new values; we are working to create the conditions in which these values can resonate with everyone in

However, the cases of improprieties in quality control announced on August 31, 2018, large losses posted, and other difficulties
have made restoring and enhancing corporate value (brand) an urgent issue. We have provided explanations of MVCV to overcome
these issues.

terms of the need and importance, and also emotionally, in terms of the meaning and significance. Our goal is to entrench action
based on the new values a matter of course in the future.

Steps for Promoting Internal Branding Through Explanations of MVCV

Purpose of MVCV Explanations

Current
statusExplanations

Sharing

ActionHabit

Define and explain
the new values.

Understand themlogically and resonate
with them emotionally.

Put them into practiceat each location.

Make thema routine habit.

1

To restore and reinforce corporate value– Employee value: Internal branding– Engagement of company views and employee views

2

To formulate a Mid-term Management
Plan rooted in the corporate philosophy– Fostering a mindset of being the future management– Successful implementation of both the mental aspects and management
planning

3

To change the mindset of members of
the working group for formulating
the Mid-term Management Plan

– Building the foundation for business execution and management personnel
in the near future

The Fujikura Group aims to manage the Group efficiently based on what is optimal for the Group as a whole by having all employees

To connect MVCV to business results– Connecting the corporate philosophy to business results– Making it possible to return to the corporate philosophy in a corporate crisis(such as the current quality issue)

issues in risk management. We believe that it is important for all employees to understand our MVCV in order to move forward on

4

Future Activity 2 Strengthen Risk Management and Group Governanceshare common goals and adopting a team approach based on integrated Group management.
While we have always formulated a Group governance policy, the cases of improprieties in quality gave us a fresh recognition ofstrengthening risk management, and we are working to strengthen Group governance by instilling MVCV.

A Common Understanding of MVCV is the Foundation of Group GovernanceInitiative 2 MVCV Explanatory Workshops Held by Employees Who Will Be Future Management

Group Governance

The team for explaining MVCV consists of 60 people and includes members of the working group for formulating the next Mid-term

Fujikura Group business operation (value creation)

Management Plan who will be the next generation of management, MVCV promoters and members of overseas Group companies.
They held nine workshops from April through July 2019. During the workshops, they formulated written explanations that will makeit easier to instill MVCV and considered the new Standards of Conduct. They debated what sorts of standards of conduct employees
should adhere to, not just for the Mid-term Management Plan, but to ensure growth of the Fujikura Group in the future beyond that,and formulated the new Standards of Conduct.

Initiative 3 Publication of MVCV Book as a Tool for Instilling the New Corporate Philosophy

Avoid damage to value (defense)

PDCA

Enhance value creation (offense)

Fujikura’s weak point Risk management
Common understanding of MVCV, our corporate philosophy (including the Code of Conduct)

We also discussed the form of activities to instill MVCV in the future and published MVCV BOOK in
April 2020 as new tool for instilling our corporate philosophy. MVCV BOOK incorporates the view that
it is important to enhance corporate value from the three perspectives of customers, shareholders,and employees, based on the common goal of creating the Fujikura Group brand through the actionsof each individual. The path that we walk must be a principled path. In addition to explanations of
MVCV, the book contains Standards of Conduct to enhance corporate value and a Code of Conduct
to avoid damage to corporate value. It expresses the simple principles and rules for all officers
and employees of the Group, who have diverse values. This will be helpful in responding to theglobalization of the company and preventing cases of fraud and wrongdoing.
MVCV BOOK

We will strive to restore and enhance the corporate value (brand) of the Fujikura Group by using
MVCV BOOK to achieve a common understanding among all Group employees, change conduct, andachieve unity.

5

Fujikura Group Integrated Report 2020

MVCV Explanatory Workshop

Fujikura Group Integrated Report 20206

At a Glanceand contribute to the development of countries and regions around the world since it was first established in 1885.

Group Network

Highlights

Russia1

Europe17Overseas sales ratio

672.3 billion

64%2Group employees

55,936 employees

35

Asia

Middle East

Net sales

North
Americacompany

companies¥

About the Fujikura GroupThe Fujikura Group has used “tsunagu” (connecting) technology to provide new products and services to customers

37

companies

companies

Japan

39

companies

companies
Africa2

Totalcompanies
Australia

2

Business Domains

140

South
Americacompanies

companies

5companies

Core business domains

Power & Telecommunication Systems Company
Net sales

327.8

¥

billionRelationships with Stakeholders

Fujikura will support the energy andinformation infrastructure underpinningsociety and connect people, goods, andall manner of things.

Employees

Electronics, Automotive & Connector Business Company
Electronics business subcompany net sales
¥

175.1

billionAutomotive products subcompany net sales
¥

152.4

Customers

This segment pursues nextgeneration development
through global top classtechnologies in markets thatare changing rapidly.

billion• Respect for human rights
and diversity• Equal opportunity
employment• Human resource
development• Occupational healthand safety

Shareholders• Customer value creation• Reliable quality• Higher customer
satisfaction• Response to RBA(Responsible Business
Alliance) and otheraudits• Higher corporate value• Appropriate return of
earnings and dividends• Enhanced disclosure of
ESG information• Promotion of
constructive dialog

Suppliers

Environment

Real Estate Business Company¥

11.2

billionWe will strive to maintain and improveasset value over the medium and longterm, and strive to coexist and prosper
together with surrounding communities.

• Fair and impartial
transactions• CSR procurement• Responsible mineralsourcing• Supply chain
management

Areas of Innovation

Medical7

Fujikura Group Integrated Report 2020

5G

CASE

Local
Communities• Social contribution
activities• Collaboration with NGOs
• Dialog and collaboration
with local residents• Investment incommunities• Response to climatechange• Preservation of
biodiversity• Zero emissions• Management
and reduction of
hazardous chemicals

Fujikura Group Integrated Report 20208

History of the Fujikura Group

1989

Founder Zenpachi Fujikura

In 1883, Zenpachi Fujikura sparked an interest inelectricity after seeing the arc light demonstration
held on Nihonbashi-dori, and he foresaw the adventof the age of electricity. At that time, Zenpachi hada prospering braiding business using silk threads
to create negake
hair ornaments for
women. After noticing
the similarities to thebraiding technology forelectrical wire insulation,
he embarked on theelectrical wire business.

1967
6.6 kV triplecore CV
submarine
cable supplied
for installation
between Atami
and
Hatsushima.

Critical current record*4 shatteredwith an Yttrium-based oxide
superconducting wire*5.

2030 Vision
Realizing a comfortable
and sustainable “Mirai”(future) society

1993

Fujikura Group
Environmental
Long-term Vision 2050

500 kV CV cable supplied for the cable line
between Shin-Keiyo and Shin-Toyosu substations.

The Four Challenges targeting
minimization of negativeenvironmental impacts

2010

Fukagawa Gatharia (Fukagawa
redevelopment project) is completed.

1981

2018

Japan’s first OPGW (Optical Fiber Composite
Overhead Ground Wire)*1 is developed.

Hair ornament popularized by word of mouthby ninth generation Ichikawa Danjuro

Fujikura Group
Long-term Vision

Launched sales of the world’s
highest density 6,912-fiber
optical fiber cable.

1998

Supplied world’s largest 500 kV OF submarine
DC cable to Kansai Electric Power Co., Inc. and J
Power (Electric Power Development Co., Ltd.)1932

44 kV triple-core SL cablesupplied to the Yamaguchi
Prefecture Electric Power Bureau(a first in Japan).

1985

World’s first corealignment optical fiber
fusion splicer isdeveloped.*2

1935

Patent acquired on Fujikura’s
proprietary high-frequency
coaxial cable.

1885 — The Beginning

Known for its technology, Fujikura contributed to thecreation of an abundant society by establishingelectric power and communications infrastructure

Power
Telecommunication systemsnd Phase of1945 — 2Reinvention
Fujikura pushed forward in globalizationand new businesses, and further enhanced
its “tsunagu” (connecting) technologies

Three Elements of Competitive Superiority Aimed at Sustained Growth1
9

Technological capabilities (R&D)
The Fujikura Group has built a platform of “tsunagu” (connecting) technologies that create additional high value by
successfully developing cutting-edge technologies. Fujikura has set its sights on a future in which digital transformation
has advanced, and will work to create value for customers and contribute to society based on its platform of “tsunagu”(connecting) technologies.

Fujikura Group Integrated Report 2020

2020
*1 OPGW: An abbreviation of Optical fiber composite overhead ground wire.
An overhead cable incorporating optical fibers*2 Optical fiber fusion splicer: A machine used to fuse optical fiber cables together*3 Between Tarama Island and Minna Island*4 New world record for high performance and length*5 Chemical compounds that cause transition to a superconductive state at 90 K or higher

Power
Telecommunication systems
Electronics
Automotive products

2

Began shipping
evaluation samples ofmmWave wirelesscommunications modulefor 5G.

rd Phase of2005 — 3Reinvention
Set forth a long-term vision and pursued
further technological development andmarket accessLong-term relationships of trustwith customers
Long-term relationships of trust with ourcustomers are the foundation for value creation.
The Fujikura Group works with customers as one
team to create new products and services from theperspective of the customer’s end-users.

3

Power
Telecommunication systems
Electronics
Automotive products
Real estate

Ability to respond to social change
The “tsunagu” (connecting) technologies of the
Fujikura Group are contributing to the creationof value by customers around the world. We
work to identify potential needs and create new
businesses appropriately targeted at changes in
global circumstances.

Fujikura Group Integrated Report 2020

10

About the Fujikura GroupThe Fujikura Group connects the DNA of its founders to a “Mirai” future society as a manufacturing company.

Submarine cablelaid to the last of
the remote
inhabited islands*3of Okinawa.

2007

The “Tsunagu” Connecting Technologies that

Support Our Lives

5G and IoT Society

Sensor base unit (primary)Power Generation Plants

Sensor node (replica devices)

Specified lowpower wirelessFujikura is involved in ultra-high voltage transmission systems andmany other high capacity power distribution systems used to provide astable supply of electricity from remote areas and improve the reliabilityof line routes.

Coaxial cables

About the Fujikura GroupWe provide one-stop service for a wide variety of solutions such as battery-less andwireless environmental sensing data collection systems and IoT cloud services thatcreate value from such sensor data.

The Fujikura Group uses the “tsunagu” (connecting) technologies it has developed through electrical wire and cablemanufacturing since its founding in 1885 to provide products for people’s lives and society in a wide variety of areas.
Our goal is to realize a “Mirai” (future) society that is comfortable and sustainable.

Dye-sensitized solar cells(DSC)

Platform consisting of seven“tsunagu” (connecting) technologies

Wide area coverage

60 GHz mmWave
wireless
communications
moduleSensorVery low-power multi-hop
wireless sensor networks

920 MHz band small-diameter
LCX (leaky coaxial cable)

Power cables

Optical fiber composite
overhead ground wires (OPGW)Electrical wireand cable

ThermalHouseholds
Fujikura provides the optimal flexible printed circuits (FPC) tomake the latest smartphone and other devices smaller, lighter, andthinner, and total solutions combining a wide variety of electronic
components and modules.

Improving Quality of Life (QoL)
We achieve advancements in healthcare and healthliteracy by delivering many kinds of solutions foradvanced healthcare, communities, and occupations, andwant to continue to contribute to extending the healthy
lifespan of people and improve their quality of life.

Compact oxygen sensors
Conventional sensor on theleft, newly developed sensor
on the rightInternal wiring
components
for devices

Optical

FPC

Wireless

Superconductor

Earphone cableconnectors

Heat pipe fornotebook PCs

Low-profile WABE
Package® (Wafer And
Board level device
Embedded Package)

Offices and Data Centers
We provide the optimal optical cabling system forthe customer’s needs with our extensive line-up of
the latest in optical fiber technology.

Plants

VehiclesWe provide many types of products for industrial equipment in plants, including fiber lasers
used in cutting metal, welding, and other types of processing.
Optical termination racks andtermination boxes

Optical fiber mass
fusion splicers

SWR®/WTC®

Cabtire (flexible) cables

11

Fujikura Group Integrated Report 2020

kW-grade highvoltage fiber laser

Connectors forindustrial robots

LILIA Live wire sheathfault locator

Partial discharge
measuring device

Hospitals

We are pursuing development of new products and new technologies
that integrate electronics technology and automotive electronics
technology to respond to trends such as CASE (Connectivity,
Autonomous, Sharing and Electrification), in addition to theconventional environment, safety, and comfort needs.

Automotive electronics

Seat belt reminder

Rapid charging connector

We have focused on imaging and miniaturization, which are coretechnologies in the medical sector that derive from fiber optic andelectronic technology, and are working to expand the electronic
medical device business.

Fiberscopes withmage fibers

IVUS* catheters* Intravascular ultrasoundElectronic scopesthat use CMOS

Fujikura Group Integrated Report 2020

12

Value Creation Model
The Fujikura Group is building a business model for creating shared value.
About the Fujikura Group

Fujikura contributes to customer value creation andsociety through our “tsunagu” (connecting) technologies.

We will work with customers as one team to find solutions to issues facing customers and society through ourconnecting technologies. This will enable us to achieve sustainable growth of the Fujikura Group and create an evenbetter society.

Risks and Opportunities

Business Activities Aimed at Customer Value Creation

Business Domains

Fujikura Group Vision

Increasingly
diverse and complex
customer needs

We work with the customer as
one team to provide solutions

We promote creation of sharedvalue (CSV) by finding solutions
to social issues

Realize the Fujikura Group Corporate
Philosophy MVCV and Achieve
the 2030 Vision

t

fo

-u p
Technological
Capabilities

R

/P

os

(R&D)

es

Rapid materialization of next-generation
technologies and products

S al“Tsunagu” (Connecting)Technologies
Platform consisting of seven technologies• Power• Telecommunication
systems• Electronics• Automotive products• Real estateElectrical wire & cable Optical Internal wiring in devices

Customers’
Perspective

Wireless

Sensor• Pursuit of projects
aimed at restoringcustomer trust

Ability to Respondto Social Changes

Possessing excellent
customers and building
strong relationshipsof trust

Organizational culture
capable of responding
to change

ur

al

ct

i

Employees’
Perspective

Three elements ofcompetitive superiority

e

ri

fa

ng

Core Businesses+
Innovation(Areas of integration)sLong-term
Relationships of Trustnu• Maintaining andstrengthening
earning power (ROIC
management)• Promoting metabolismof change and new
business creation

Superconductor

Brand
Ma

Shareholders’
Perspective

ThermalM

at2030 Vision

Core BusinessDomains• Promotion of innerbranding• Pursuit of workstylereform• Medical • 5G
• CASE
New Business Domains(Innovation)

Pursuit of a management strategy aimed at realizing the vision

Three Perspectives Targetedat Boosting the Brand

-s

e
al

w
ll o

&D

• Future uncertainty of global
economy• Impact from COVID-19• Dramatic changes in industrial
structure• Pursuit of a low-carbon society• SDGs (Sustainable
Development Goals)

Realizing a comfortable
and sustainable “Mirai”(future) society
Contributing to the realizationof an advanced informationsociety

Efficient management using
a broad range ofenergy sources

Improving quality of life

Invest management capital in realizing the vision
Financial capital

Human capitalIntellectual capital

Manufacturing capitalSocial relationship capital

Natural capitalStrengthen the foundations of management
Reinforcement of activities to instill MVCVStrengthening the quality control system

Strengthening risk management

Strengthening investment management

Closer monitoring of business execution

Corporate governance reform

13

Fujikura Group Integrated Report 2020

Monitoring KPIContributing toa next-generation
mobility society• EPS, directly connected to shareholder
value• ROIC, in pursuit of efficientmanagement
Fujikura Group Integrated Report 202014

Capital Supporting Value Creation
Financial capital is the capital necessary to provide products and services to customers and society. Fujikura is working to improvefinancial soundness. We conscientiously pursue management of profits and assets by focusing on monitoring improvement in the
KPIs of EPS (earnings per share), which is directly tied to shareholder value, and ROIC (return on invested capital). Fujikura will also
continue capital investment and R&D investment aimed at growth.

Cash Flows(Operating, Investing, and FCF)

Net income (Billions of yen)

5.43

6.43

11.3

12.9

ROE (%)(Billions of yen)
Operating cash flow (Billions of yen)
Investing cash flow (Billions of yen)Free cash flow
(Billions of yen)

48.2

46.4

8.7
18.3

0.67

43.6

13.8

1.4 –38.5

42.0
27.8

10-Year Trend in Net Sales and Operating Income–0.34(Billions of yen)

659.4

573.6

17.9

16.8

661.5

590.9
503.5

521.8

678.5
32.6

740.0
653.7

710.7

34.3

2010

2017

2018

2019 (Fiscal year)

Capital Investment

2011

2012

3.3
2013

2014

2015

2016

2017

2018

(Billions of yen)

2015

2016

2017

16.2

17.4

17.2

2018

2019 (Fiscal year)

–0.23

–48.1
2018

–39.4
2019 (Fiscal year)

Telecommunication Business, Power &Telecommunication Systems Company

Automotive Products, Electronics, Automotive &Connector Business Company

Other(Millions of yen)

55.7
45.6

Electronics Business, Electronics, Automotive &Connector Business Company

Total Assets

2019

Great East Japan Earthquake and flooding in Thailand
Energy Business, Power &Telecommunication Systems Company

2016

15.6

10.6

–34.3
–60.6

16.2

2015

2016

2017

20.3
13.3
6.4

2009

–1.43

–20.9
2015

27.6

34.2

25.0

–37.2

672.3

Research and Development
Expenses

About the Fujikura GroupNet Income and ROE

Financial Capital

5,526

Net Earnings (Loss) Per Share
6,380

(Yen)

6,383

5,886

42.5

64.36

44.61

5,760

5.09

36.98

Operating Income

31.9

30.1

Net Sales by Company
Other

5.5 billion

¥

–136

Real Estate Business Company

2015

11.2 billion

2016

2017

2018

2019 (Fiscal year)

2015

2016

2017

2018

2019 (Fiscal year)

2015

2016

2017

2018

2019 (Fiscal year)¥

Automotive Products Company

152.4 billion¥

Electronics Business Company

175.1 billion¥

FY2019Net sales

Power & Telecommunication Systems Company

327.8 billion¥

672.3 billion

Social Relationship Capital
The Fujikura Group builds strong relationships with customers and works with customers as one team to provide solutions bymeeting the needs and exceeding the expectations of customers with customer value creation as our goal. We find solutions to social¥

issues through business activities and are working to achieve sustainable growth of the Fujikura Group and create a better society.

CDP Climate Change Score
A- (2020)

Nikkei SDGs Management Survey 2020
Overall rating: 3.5 stars

Net Sales by Region and Japan/Overseas
Overseas433.1 billion 64%

¥

Other

123.9 billion

¥

Japan

FY2019Net sales

U.S.

139.0 billion¥

Asia (excluding Japan)

170.2 billion¥

15

Fujikura Group Integrated Report 2020

672.3 billion¥

239.0 billion 34%¥

Operated in partnership with institutional
investors, the non-profit Carbon Disclosure
Project (CDP) has an office in London. This
project encourages the top companies interms of market value in key countries todisclose their environmental strategies andgreenhouse gas emissions volumes.

The Nikkei SDGs Management Survey
consists of questions in the four areas of
SDGs Strategy/ Economic Value, Social Value,
Environmental Value, and Governance.
Nikkei, Inc. produces 17 evaluation ratingsfrom company surveys, publicly available
data, and other sources, and recognizes
companies that contribute to achievementof the SDGs through their businesses andimplement initiatives that enhance corporate
value, defined as SDGs management.

Selected as One of “The 100 Most
Sustainably Managed Companies in
the World” by the WSJ
The Wall Street Journal (WSJ) rated
companies based on sustainability metrics
in such areas as business model andinnovation (technological innovation),external social and product issues, employee
and workplace issues, and the environment.
The ranking methodology takes a broad
view of sustainability, one which assesses
a company’s leadership and governancepractices for their ability to create value forshareholders over the long term.

Fujikura Group Integrated Report 202016

Capital Supporting Value Creation

Manufacturing Capital

Human capital is one important pillar that is a source of competitive superiority for the Fujikura Group. Fujikura works to develop

Fujikura is pursuing innovations in manufacturing through capital investment aimed at providing the high quality products andglobal leaders, mainly by hiring, training, and compensating employees who exhibit a strong sense of personal initiative; providing

services demanded by customers as quickly as possible. We are simultaneously targeting the use of IoT and AI to improve operations

career opportunities regardless of nationality, ethnicity, gender, religion, age, or other attributes; and promoting diversity to enable

to eliminate reliance on human processing speed. Safety is the foundation for everything and we are also pursuing intrinsic safetypeople of diverse backgrounds and views to actively contribute.

activities such as manufacturing plant risk assessments as important corporate bases.

Group Employees(No. of employees)

54,11456,96158,422

Employees by Region
57,22855,936(No. ofemployees)

6,858
12,561

Japan
North & South America

7,762

8,985

15,595

16,219Percentage of Women in Management
Asia (excluding Japan)
Europe & Africa

10,833

Lost Time Accident Rate (Fujikura)(%)(Rate)

15.2

10,55615.2

0.35

OHSAS 18001 Certifications
Obtained (Group)

ISO 45001 Certifications Obtained(No. of companies)(No. of companies)

12

0.34

16,734

0.18

10.5

0.18

6

6

2015

2016

9.4
29,02527,53927,44423,507

13

2

10

13.1
17,005(Group)1

22,630

0

2015

2016

2017

2018

2019 (Fiscal year)

Percentage of People with
Disabilities Employed (Fujikura)

5,670

6,065

5,774

5,883

6,016

2015

2016

2017

2018

2019 (Fiscal year)

Number of Hours of Coursework
and Training Expense Per Employee(%)

Number of hours of coursework per employee (Fujikura) (Hours)
Training expense per employee (Fujikura) (Thousands of yen)

195

2.0

2.05

2.12

2.24

190.4

2015
2015

2016

2017

2018

165.9
41.5

40.1

41.4

2018

2019 (Fiscal year)

2017

2018

2019 (Fiscal year)

0

0

0

2015

2016

2017

2019 (Fiscal year)

2018

Number of Foreign Nationals inManagement Positions (Fujikura)

Natural Capital(No. of people)

The Fujikura Group uses many natural resources in business activities and endeavors to reduce the negative impact on the global

10

environment, including natural capital. More specifically, we formulated Fujikura Group Environmental Long-term Vision 2050 in
2016, which outlines our goals for 2050. Those goals include taking on challenges in four areas, such as the challenge of reducing
total CO2 emissions from plants to zero by 2050.

6
5

173.7

2017

2019 (Fiscal year)

189.4

2.25

2016

5
4

50.2
43.4

CopperPolyethylene/Polyvinyl chloride (PVC)

Energy(Tons)(Tons)(Gigajoules)

Polyethylene
PVC

4,727,403

145,980
15,400

2015

2016

2017

2018

2019 (Fiscal year)

2015

2016

2017

2018

2019 (Fiscal year)

2015

2016

2017

2018

2019 (Fiscal year)

121,961

13,428128,022

Intellectual Capital

13,892

99,600sustainable growth of the Fujikura Group and create a better society by finding solutions to issues experienced by customers andsociety, with the goal of creating value for customers.

Number of Patents Held(in Japan and internationally)(No. of patents)

2,600

2,700

2,800

2,978

2,981

No. of products

536

597

665

412

17

2016

2017

2018

2019 (Fiscal year)

Fujikura Group Integrated Report 20202015

13,251

3,203,376

11,2003,300,213

3,164,101
10,045

2015

2016

2017

2018

37.1

2016

Participation in the MIT.nano
Consortium

2019 (Fiscal year)(Thousand t-CO2)

2015

2016

2017

2018

2015

2019 (Fiscal year)

2016

2017

2018

2019 (Fiscal year)(t CO2/100 million yen)Group emissions in Japan
Group emissions overseas

Intensity based on net sales

Percentage of net sales (%)

474

2015

13,432

14,215

CO2 Emissions Volume

Number of Environmentally Friendly Products
Developed and Percentage of Net Sales

36.5

13,564

3,076,323

100,330

The Fujikura Group is developing state-of-the-art technologies and creating products in a wide variety of areas such as industry,social infrastructure, and daily living based on our platform of “tsunagu” (connecting) technologies. We are working to ensure

13,899

37

2017

37

2018

40

2019 (Fiscal year)

MIT.nano is a facility established by the
Massachusetts Institute of Technology (MIT)in the U.S. for advanced research in theareas of nanoscience and nanoengineering.
In the future, Fujikura will provide advice
at industrial consortium meetings held by
MIT.nano, along with 12 other companies
participating in the consortium. We willcontribute to the pursuit of nanoscaleinnovations at MIT.

167

262

245

237
169

172

159

Energy usage forecast

276

278

Targeting net zero emissions basedon a combination of energy conservation,use of renewable energy,
carbon credits, etc.

140
CO2 emissions volume

59.3

63.3

58.7

61.6

62.0

2015

2016

2017

2018

2019

Zero total CO2 emissions

2020

2030

2040

2050

(Fiscal year)

Fujikura Group Integrated Report 2020

18

About the Fujikura Group

Human CapitalMessage from the President
We will quickly and successfully restructure our businesswith unwavering determination, become a sustainable“Mirai” (future) company through “tsunagu” (connecting) technologies,
and contribute to the solution of societal issues.

Expression of gratitude for everyone fighting COVID-19

Reflection on FY2019 results and formulation of
the 100-Day Plan to turn around operations
Fujikura posted a record 38.5-billion-yen net loss in FY2019. This forced us toabandon the Mid-term Business Plan in FY2020, the final year in which it shouldhave been completed, and switch to the operational turnaround phase. This
also resulted in declaring zero dividends despite our policy of paying consistentdividends and I sincerely apologize for this. Director compensation was also
reduced to clarify management responsibility.
In the Mid-term Business Plan, we focused on markets and strategic customers
where we could utilize our corporate strengths, and expanded business scale
through concentrated investments in line with the initial plan. However, wewere not able to adequately respond to major changes in customer trends andmarkets, such as the decline in smartphone demand for key customers andthe large drop in the price of optical fiber in China. This resulted in substantial
declines in our three core businesses in optical fiber, FPC (flexible printed circuits),
and automotive wire harnesses. As the business scale of the company rapidly
expanded, we focused too heavily on specific markets and catering to the growthstrategies of customers. We were unable to respond agilely to the changes inmarket and customer conditions, resources were scattered, and the establishmentof a governance structure to secure the operational structure for locations could
not keep pace with the rapidity of the changes. I believe that these were the main
factors behind the deterioration in performance.

Progress on cases of impropriety
related to quality control
Fujikura issued an externalannouncement on the status ofprogress made on confirming safety
and measures to prevent recurrence ofcases of impropriety related to quality
control on July 31, 2020. Since theexternal public disclosure at the endof August 2018, we have generally
completed the response to customers
and also gained their understandingthat there are no problems withproduct safety and functionality ofnearly all of the products involved. In
the future, we will use the past lessons
learned to thoroughly implement andcontinue various measures to prevent
recurrence and firmly entrench anorganizational culture in which acts ofimpropriety related to quality control
never occur again.

Formulation of the 100-Day Plan, an operational turnaround plan

President & CEO

Masahiko Ito
19

Fujikura Group Integrated Report 2020

We took the descent into such management conditions seriously andrecognizing the need to first concentrate on an operational turnaround,abandoned the 2020 Mid-term Business Plan and switched to concentrating
on a rapid operational recovery. The key measures were narrowed down to twopoints: “The unreserved selection and concentration of existing businesses” and“strengthening of Group governance.” Members of management engaged in aseries of discussions and formulated the 100-Day Plan.
In this 100-Day Plan, we will rebuild three businesses (Telecommunication
Systems, Electronics, and Automotive Products) through decisive businessrestructuring and more comprehensive risk management. We will also pursue
selection and concentration aimed at how to transform into a sustainable
company amid the rapid changes in the business environment.
We will steadily implement the 100-Day Plan and intend to draw up the next

Fujikura Group Integrated Report 2020

20

Message from the President

I would like to express my deep appreciation to all of our stakeholders who
regularly support the business activities of the Fujikura Group.
The COVID-19 pandemic raged from the beginning of the year in 2020
and the end is not yet in sight. I offer my sincere sympathy to those who havecontracted COVID-19 and wish them a rapid recovery.
My initial response was to place top priority on ensuring the safety of
local employees in the joint venture that manufactures optical fiber preformin Wuhan, China. We subsequently launched the COVID-19 task force, andhave been promoting telecommuting and implementing various measures
to give full attention to health and safety, prohibit overseas travel, and otherpreventive measures.
I express my deepest gratitude to the healthcare providers and caregivers
who are on the front lines contributing to the health and welfare of people inour nation even today, and pray for an end to this situation soon.

Message from the President

What is the 100-Day Plan?
This refers to the plan that was compiled within
100 days of the financial results announcement

Mid-term Business Plan using the lessons we have learned from our failures once
Fujikura has returned to the starting point the company was at around 2016. It is
my responsibility to create the path to that point.

for fiscal year ended March 31, 2020 to address

100-Day Plan implementation status

dramatic changes in the business environment

Measures aimed at a turnaround are incorporated into each project in the
100-Day Plan. The Management Resource Efficiency Subcommittee headed byme personally has been established and will implement those measures. I will
explain each project below.
We will first revise the business portfolio and business strategy in thefour areas of energy business structural reform, telecommunication businessstructural reform, flexible printed circuits (FPC), and wire harnesses (WH).
In energy business structural reform, we will once again review the businessstructure. We will withdraw from overseas production and basically concentrate
the remaining business in Japan in Fujikura Dia Cable Ltd. The parts left over will
be considered with all options in mind.
In telecommunication business structural reform, we will shift businessthat has been overly concentrated in China to Europe and the U.S., and achieve
the appropriate structure, a process which will include consolidation andelimination in conjunction with this shift.
In FPC, the market environment is growing even more severe and wewill first redetermine where WTP (willingness to pay) lies for Fujikura Group
products, and then work to achieve the proper structure.
In wire harnesses, we reorganized management, especially in the European
business, and built a governance structure controlled from Japan. The next
step will be to relocate manufacturing sites from Eastern Europe to North Africa
and consolidate them to stabilize production. We will work to achieve proper
structure along with this.
In addition to these projects, we will implement corporate structural reformand sell assets to reduce fixed costs and generate cash as a result, along with thechanges in business scale resulting from selection and concentration.
Management will also resolutely implement management reorganization
with unwavering determination as the remaining project among the eightprojects. The Board of Directors will be reorganized this fiscal year to strengthen
the supervisory function and separate it from operational execution. The mission
and job descriptions of each operating division responsible for execution will beclearly specified and capable human resources will be assigned to them. We aim
to achieve a complete break from the long-entrenched seniority system.
The actions of each and every employee are important in implementing theand achieve an operational turnaround quickly.
See p. 27 for further details.

Opinion exchange session between the President and employees

21

Fujikura Group Integrated Report 2020

Current achievements aimed at the growth phase

Message from the President

the damage to the business base accompanying

100-Day Plan. I am currently focusing my efforts on opinion exchange sessions
with employees regarding the 100-Day Plan. We are not simply issuing instructions
to implement the 100-Day Plan formulated by management. We are engaging incontinual direct dialog to share the background behind formulation of the planand the views of management, and gain a common understanding. Much of the
discussion thus far has centered on concerns about the future and how to “take ahalf step forward” in actions in an employee’s day-to-day work. If one employee
sharing a common understanding takes one half-step forward, one half-step by
two employees will make one whole step. If each of the roughly 56,000 people in
the Fujikura Group takes even one half-step forward, that will create an enormous
amount of power. I want to set an example as top management so that each
employee can take one half-step forward without fearing change. The FujikuraGroup intends to work as one team to complete the 100-Day Plan.

Opportunities to contribute to society in areas where the Fujikura Group excels
await us in the growth phase that will follow the operational turnaround phase.
We are seeing business in areas where Fujikura can utilize its strengths in further
expansion of the optical cable business using telecommunication systems
technology, provision of solutions using electronic component-related technology
in the medical field, and business in FPCs, connectors, and other peripheralproducts that support sensor systems for automated driving, among others.
Fujikura is pursuing a project to expand the optical cable business as the“concentration” part of the “selection and concentration” process, in particular.
We will strengthen the optical cable business as a driver of further growthby shifting from the previous business centered on optical fiber and preformto the Spider Web Ribbon®(SWR®)/Wrapping Tube Cable® (WTC®) business inultra-high-density optical fiber cable.

Achievements in the telecommunications businessIn the telecommunication business, business opportunities in North Americanand European carriers will continue to proliferate, especially for FTTH in rural
areas of North America where infrastructure is insufficient. The country has
allocated a huge budget for the equal provision of telecommunications
infrastructure to everyone, and the installation of networks in all areas where
infrastructure has not yet been established will provide a big tailwind for the
Fujikura Group. The sales of our subsidiary, America Fujikura Ltd. (AFL) havemore than doubled in the past 10 years. AFL originally developed its businessthrough a telecommunications product line. It has continued to grow over the
past five years by providing value-added solutions to customers with one-stop
solutions that can cover the entire value chain from upstream to downstream. I
think that the ability to provide a complete set of services including construction
and maintenance support, rather than just selling products, enables Fujikura to
grasp the “wants” (hidden value) of customers beyond their needs.
Another major business opportunity is the hyperscale data center
market that is expanding globally. The push to establish data centers is
growing among major IT firms and other companies. Data traffic, whichindicates telecommunication volume, is steadily growing year after year. The
establishment of 5G infrastructure is currently progressing and research has
already begun on 6G and other next-generation telecommunication standards.
Optical cable is at the core of these telecommunication networks. Fujikura
not only provides WTC®, peripheral equipment and components, and splicing
machines, in which it commands No. 1 rank in global market share; we aim togrow our business by proposing solutions in all areas of the value chain.

Ultra-high-density optical fiber cable
Spider Web Ribbon® (SWR®)/
Wrapping Tube Cable® (WTC®)

SWR®/WTC® Net Sales by Region
Japan
U.S.
Core length

Europe
Other

Other
U.S.

Europe
Japan
2018

2019

2020 (Fiscal year)(Forecast)

Fujikura Group Integrated Report 202022

Message from the President

Rare earth oxide superconducting wire (chemicalcompound that causes transition to superconductive
state at 90K or higher)

Enhancing business metabolism

60 GHzmmWavewireless
communications
moduleIVUS (intravascular ultrasound) catheter

23

Fujikura Group Integrated Report 2020

In order to create a business model that is sustainable into the future, it isessential that Fujikura has the ability to metabolize change through new
business creation. While R&D involves short-term, medium-term, and long-term
projects, we will maintain a good balance in resource investment and increase
opportunities for new business creation. Short-term R&D will include thedevelopment of mmWave and single mode fiber lasers into businesses. It is the
medical business that is producing gradual results, and Fujikura’s persistence
in continuing to go to the end users has enabled us to grasp the needs of anarea that Fujikura had no previous ties to. This has made it possible to build an
innovative business model that makes our precision processing technology
useful in the medical area.

Alignment with the 2030 Vision
The Fujikura Group formulated the 2030 Vision in March 2017 and announced
it internally and externally as our corporate image for the future. It delineatesa future vision of solving social issues by providing “tsunagu” (connecting)solutions and creating a comfortable and sustainable “Mirai” (future) society,while also continually working to enhance corporate value. The Vision specifies
the four envisioned market areas of Advanced Communication, Energy &Industry, Life-Assistance, and Vehicle. The direction of the 2030 Vision has
remained constant amid the COVID-19 pandemic, and some businesses thatshould be accelerated even more have emerged. These are connected to theresults in each business that I just talked about and we are aiming to provide thevalue that the Fujikura Group is known for.
In Advanced Communication, we will support IOWN (Innovative Opticaland Wireless Network) , other next-generation communication infrastructure
concepts, optical network solutions, and other technologies.
In Energy & Industry, we will support power distribution for renewableenergy and renovation demand with rare earth high-temperature
superconducting coil and wire, and other technologies.
In Life-Assistance, we will provide solutions in the health management area,
mainly by expanding into hearing aids, endoscopes, pressure sensors, and othertechnologies in the medical area.
Lastly, in Vehicle, we will keep an eye on the four trends in CASE technology(CASE: Connected, Autonomous, Sharing and Electrification) as we acquire new
business opportunities and consider establishment of the business entities andorganization appropriate for those trends.

Oxygen sensor

Four market areas envisioned
in the 2030 Vision

Message from the President

In the energy business, Fujikura Dia Cable Ltd. is pursuing digitalmanufacturing. It is No. 1 in the industrial electric wire segment and it aims
to someday lead the industry as a Japanese domestic wire manufacturer andbecome a company with a future that extends far into the future.

Thin device-embedded WABE Package®
* WABE: Wafer And Board level device Embedded
Package

ESG is management itself
As ESG investment has become a mainstream practice of institutional investors
in recent years, corporate activities that target sustainable growth based on
ESG activities in addition to corporate social responsibility (CSR) are regarded
as important. The Fujikura Group has long pursued ESG, but is working to step
activities up a level this fiscal year.

Fujikura formulated and announced Fujikura Group
2030 Vision in March 2017 as the long-term vision thecompany will strive to achieve. The vision declared
the intent to continually enhance corporate value
by providing solutions to the challenges in a “Mirai”(future) society.

Establishment of a new Sustainability Strategy Committee
Based on the recognition that ESG initiatives constitute management strategy
itself, we reflected on past activities and arrived at the conclusion thatorganizational management which employs ESG goals more effectively isneeded. We therefore reorganized the CSR Committee, which had heretofore
been the driving organization, and established the new Sustainability Strategy
Committee. The Directors debate and determine specific ESG goals, appoint
an officer in charge of each goal, and exercise supervisory oversight over the
execution of those goals. I think the clear delineation of oversight and execution
has made the responsibilities even clearer than before and will ensure highly
effective ESG activities. We should be able to disclose new medium-term
ESG goals determined by the Sustainability Strategy Committee in the next
Integrated Report.

Carbon neutrality and the potential for Fujikura Group technology
to contribute
To address Environment (E) first, we are targeting achievement of fourchallenges, as explained in the Fujikura Group Long-term Environmental Vision
2050. The most ambitious challenge is achieving zero CO2 emissions. The roadmap to attainment has already been completed and will be revised regularly inlight of technological innovations. We have now entered the implementation
Fujikura Group Integrated Report 202024

Message from the President

A cooperative corporate initiative in which influential
companies around the world commit to switchingto 100% renewable energy use in their businesses.
The use of renewable energy will lead to reduction incompany emissions, and enable broad-scope energy
cost management.

Strengthening company and employee engagement
Human resources are key to Society (S). We are working on innovations toincrease job satisfaction to increase and improve company and employee
engagement. In the view of the Fujikura Group, job satisfaction means that each
employee achieves self-realization by having a personal awareness of issues andcontinually taking on the challenge of perpetual self-transformation to solve
those issues in order to provide sustained values to customers, shareholders,and society. I think this leads to the personal growth of employees and enables
them to enhance both their public and private lives.
This is also related to achievement of the U.N. Sustainable Development
Goals (SDGs), but I think it is important to create the foundation for two-way
communication that extends beyond the superior-subordinate relationshipwithin divisions and ask how the work you are personally in charge of willcontribute to the development of society. For example, I strongly feel that thebusiness opportunity in building networks in areas of North America that lack
communication infrastructure is also a business that contributes to society byachieving both growth of our own business and a solution to a social issue. If we
cultivate the seeds of awareness of social contributions instead of just providing
what the customer demands, this will greatly transform the mindset of eachindividual employee and, by doing so, will also generate major positive changes
in business activities.
I think it is time for the Fujikura Group to drastically revise its personnel
policies and human resource training system. When employees are highly
motivated in their work, this also leads to greater work productivity. How
should we achieve our mission of contributing to society through “tsunagu”(connecting) technologies in MVCV, the Group’s corporate philosophy, amid
major changes in the business environment? Each employee should think
about this question and then act as one united Group, which will provide themomentum to achieve a rapid operational turnaround.

Fujikura switched from a Company with an Audit & Supervisory Board
Structure to a Company with an Audit & Supervisory Committee Structurein June 2017, improved decision-making by the Board of Directors (higher
objectivity and speed), delegated operational execution authority to executive
directors, and strengthened the supervisory functions of the Board of Directors.
Fujikura increased number of outside directors from four to five (two ofwhom are female) in June 2019, increased the transparency of discussions
at Board of Directors meetings, and improved the effectiveness of the Boardof Directors. Outside directors who possess diverse experience as corporate
managers, attorneys, CPAs, and other professionals are selected. Outside
directors engage in highly energetic debates at Board of Directors meetings bystating various opinions, and providing risk analyses based on their objective
viewpoints and business judgment.
A Nominating Advisory Committee and Remuneration Advisory Committee
having outside directors as the majority of committee members have been
established as discretionary committees. An outsider director serves as the chairof each committee and the committees are structured to ensure objectivity andtransparency in nominating directors and determining compensation.

Message from the President

We will achieve a sustainable society by analyzing therisks and opportunities presented by climate change,
working to resolve issues, and disclosing information
to stakeholders, based on the TCFD recommendations.
Further information on climate-related risks andopportunities is provided on p. 71.

stage. The Japanese government has also announced the policy goal of net zeroCO2 emissions (carbon neutrality) by 2050. The Fujikura Group wants to achievethat goal, especially since we are a member of RE100, an international initiative
to achieve proliferation of renewable energy.
The Fujikura Group has performed research on high-temperature
superconductivity explained in the 2030 Vision for many years as an R&D themein the sustainable energy area. The capabilities of that superconducting wire hasreceived global world-class acclaim. The first point is whether we can provide astable supply of high-performance wire used in superconducting cables. I thinkthat we will be able to provide value that leads to a substantial reduction inelectrical power loss, which has occurred in the past, by replacing transmission
equipment and mechanical devices with equipment that reduces voltage as far
as possible thanks to the zero electrical resistance of superconductivity. This will
be an extremely valuable weapon for the Fujikura Group and we are nearing thegoal of early completion. We have used our endorsement of the TCFD (Task Forceon Climate-related Financial Disclosures) recommendations as an opportunity toorganize the information on such initiatives internally, and will analyze the impactthat climate-related risks and opportunities will have on the growth and financial
condition of our company and disclose this information appropriately.

To our investors and other stakeholders
I will demonstrate unwavering determination in making sure that we achieve theoperational turnaround in the 100-Day Plan and strive to achieve a rapid returnto profitability by steadily pursuing unreserved selection and concentrationand strengthening Group governance. I think the expectations of thetelecommunication technology possessed by the Fujikura Group will grow evenlarger in the growth phase following the operational turnaround, since long-term
growth can be anticipated in markets related to telecommunications, especially in
5G and data centers. We will increase the sustainability of businesses based on the
management platform of sustainability by contributing to areas that are essential
to the development of a sustainable society, and accelerate the growth of Fujikura
as a company that is essential to the development of society.
We will continue to contribute to the solution of social issues andbecome a company with a sustainable future through “tsunagu” (connecting)technologies. I sincerely ask all of our stakeholders for your continued support of the
Fujikura Group.

Energetic debates with outside directors
For Governance (G), the 100-Day Plan sets the objectives of clarifying
management responsibility and strengthening governance, and we are
implementing various measures to achieve this.
25

Fujikura Group Integrated Report 2020

Fujikura Group Integrated Report 202026

Explanation of the 100-Day Plan for
Operational Turnaround
Fujikura formulated the 100-Day Plan to compile the actions that we should take to respond to the damage to ourbusiness base caused by the dramatic changes in the business environment and achieve an operational turnaround.
Faced with the deterioration in performance in FY2019, we decided that continuing the five-year 2020 Midterm Business Plan (“2020 Plan”) in FY2020, which should have been the final year of the plan, would invite further
deterioration of the profit structure. We therefore abandoned the 2020 Plan and switched to concentrating on a rapid
operational recovery as our basic strategy.
Having set our basic strategy in FY2020 as concentrating on a rapid operational recovery, we narrowed down the

Outline of Operational Turnaround Phase Aimed at Business Innovation
Fujikura has abandoned the current Mid-term Business Plan, established a short operational turnaround phase, and will work to put
our business on an even keel. We intend to publicly disclose and implement a new Mid-term Business Plan (strategic turnaround)that incorporates a post-COVID-19 growth strategy after the operational turnaround has been accomplished.

Current Mid-term
Business Plan

key measures to “the unreserved selection and concentration of existing businesses” and “strengthening of Groupreform, establishment of a Group Governance Promotion Department , and other actions.
Fujikura will demonstrate unwavering determination in accomplishing a rapid business recovery.

Current
StatusIssuesCannot work toward healthy growth.
- Dramatic changes occurred in the optical fiber and FPC business environment.
- Recovery in the automotive products business is delayed.
● Cannot foretell the major impact that COVID-19 will have on business.
● Failure to achieve company-wide numerical management targets in FY2020 is certain.
● Progress on metabolizing changes and new business creation is also unsatisfactory.
●

Self-transformation is insufficient and we need to re-examine our approach.
- This resulted in a focus on net sales and market share.
- Strategies and measures proved unable to respond adequately to the dramatic changes in the external
environment.
● Continuing the current plan would result in further deterioration of the profit structure.

2020 Mid-term
Business Plan
2016
(Year)

2019

100-Day Plan
• Minimize cash outflow.
• Reduce costs.
• Formulate an operational
turnaround plan.

2nd Half
Implement theoperational turnaroundplan.

Put the company on the path of growththrough a new Mid-term Business Plan.

The inability to response to the dramatic changes in the market environment and intensifying competition
led to a decline in profit for the entire company and Fujikura is not creating corporate value capable ofmeeting market expectations.
- The three core businesses (telecommunications, FPC, and automotive products) are confronted with
fundamental issues and we have not resolved these issues.
● Further deterioration of the profit structure is unavoidable while self-transformation is insufficient.
● The need for a radical reform reaching into management and business structure, i.e., an operational
turnaround, does not permit delaying reforms.

●

Basic Policy●●

We have abandoned execution of the current Mid-term Business Plan and are switching to the operational
turnaround phase.
● We will decisively implement strategic structural reform and target creation of a perpetually sustainablebusiness entity while we can still rebuild the financial base.
● We will increase corporate value by working to achieve an operational turnaround and dramatic
improvement in profitability, management soundness, and business structure.
●

Fujikura Group Integrated Report 2020

Growth Strategy

Recognition of Current Situation and Need for an Operational Turnaround27

Radical reform of
the management &business structure

Operational Turnaround Objectives and Basic Policy●

FuturePolicyCreating corporate value
through sustained growth●

Objectives

Recognitionof Current
Situation

Strategic Turnaround

Abandon the 2020 Mid-term
Business Plan mid-course &move to the operational
turnaround phasegovernance.” We will manage risks even more thoroughly through the decisive implementation of business structural

Current Mid-term Business Plan Status and Issues

Operational Turnaround

Implement structural improvements with the corporate value of the Group as a whole in mind.
Rededicate ourselves to the challenge of decisively strengthening earning power.
Thoroughly implement
selection and concentration
aimed at improving/increasing
profitability.

●

Globally optimize thesales, manufacturing, anddevelopment structure.

●

Streamline head office
functions in tandem with theoperational turnaround.

Accelerate management focused on capital efficiency through thorough implementation of selection andconcentration via management based on ROIC.
● Simultaneously strengthen the governance structure to achieve Group-wide discipline and transparency.
●

Top Priority
Make operational turnaround and structural reform of the telecommunications and FPC businesses the top priority
in light of the particularly dramatic changes in the external environment for these businesses.

Fujikura Group Integrated Report 202028

Explanation of the 100-Day Plan for Operational Turnaround

Turnaround Plan Implementation Structure

100-Day Plan Points

The president will take the lead in vigorous implementation of the plan during the operational turnaround period. Daily

Clarification of Management Responsibility and Strengthening Governancemanagement will be fortified and a process of selection and concentration vigorously pursued.

Management
Innovation
Committee

Secretariat:
Corporate Strategy
Planning Division

Management
Resource Efficiency
Subcommittee

Business Area

Project team response as the driverof plan implementation during
the operational turnaround phase• Revise the businessportfolio and business strategy.
• Reduce fixed costs.
• Strengthen governance.

Flexible Printed Circuits (FPC)

Management
Responsibility

Strengthening
GovernanceActionReduce executive director
compensation• President & CEO, Representative Director: 50%; Representative Director,
Executive Vice President & Member of the Board: 40%; Executive Vice
President & Member of the Board: 30%

Reduce executive officer compensation• Managing Executive Officer, Executive Officer : 20%

Strengthen Board of Directors
functions• Pursue greater separation of supervisory and executive functions andstrengthen monitoring.
• After achievement of the turnaround is in sight, reduce the quorum andincrease the percentage of outside directors.

Establish a Management Innovation
Committee• Strengthen corporate cross-organizational functions.
• The Management Resource Efficiency Subcommittee will select andconcentrate operations, and reduce fixed costs.
• The Save and Gain Subcommittees will reduce costs and improve profit
margins.

Strengthen free cash flow
management in addition to ROIC

• Strengthen management of businesses and investments.

Establish a Corporate Governance
Promotion Department• Strengthen governance, including governance of affiliated companies.

Wire Harnesses (WH)

Energy business structural reform
Save Committee
The president will takethe lead in pursuing selection
and concentration.

This structure will enable
the two executive vicepresidents to keep an eye
on daily management.

• Shrink management expenses.
• Achieve capital investment &energy efficiency.
• Shrink labor and inventories.
• Improve quality.
• Use IT to improve operating
efficiency.

Telecommunication businessstructural reform
Corporate structural reform

Reduction of fixed costs & sale of assets

Power & Telecommunication Systems Company Actions
Gain Committee• Sales capabilities• Procurement power• Sales management

Management reform

Business Area

Expansion of optical cable businessTelecommunication
Systems

ActionOptical fiber• Shift from the sale of optical fiber and preform to the sale of opticalcable, and from an excessive focus on the Chinese market to theEuropean and U.S. Markets and the HSDC market.
• The Chinese market is currently operating at 100% capacity and plants
in Japan have reduced operations to 60% of capacity to normalize
production in the optical cable business.

Optical cable• Increase production capacity in Japan, the U.S., and Europe to expand
the Spider Web Ribbon® (SWR®) & Wrapping Tube Cable® (WTC®)
business.
• Increase overhead cable production capacity to eliminate the digital
divide* in rural areas of North America.
* Investment plan to eliminate regional differences in telecommunication
infrastructure under COVID-19.
• Invest in expansion of production capacity: 3.8 billion yen in total.

Develop and expand SWR® network
solutions• Develop SWR® network solutions for FTTx and HSDC.
• Expand high-density WTC®, Air Blown WTC™, and peripheral components.

Fiber laser• Slump due in part to COVID-19 → Rethink business approach, and makea decision during FY2020.
• Downsize → Reduce expenses incurred by 2 billion yen compared to theprevious fiscal year.

Consolidation and elimination oflocations• Consolidate and eliminate multiple locations in Japan and overseas.

Exit overseas EPC business• Complete final exit from construction in Bangladesh.

Close overseas production sites• Complete closure of all overseas production with the closure of Fujikura
Federal Cables Sdn. Bhd. in Malaysia.

Select and concentrate domestic
businesses• Concentrate businesses in Fujikura Dia Cable Ltd. by the end of FY2020.
• Keep joint ventures and sale in mind for the businesses left over after
consolidation.

Capital investment in main businesses: In the telecommunication business, we will concentrate capital investment in SWR®/WTC®,the core of optical cable solutions. In the electronics business, capital investment will be substantially reduced and focused mainly
on investment in renovation without expanding capacity. In the automotive wire harness business, capital investment will be
substantially reduced and spent mainly on the relocation of operations from Eastern Europe to North Africa.
We aim to reward shareholders by allocating cash flow and profit during the operational turnaround phase to rigorously
selected capital investments, financial streamlining, and other measures specifically targeted at business restructuring and selection
and concentration to restore growth businesses and corporate value.

Policy on Capital Investments in Main Businesses this Fiscal Year and Next Fiscal YearBusiness

FY2019Telecommunication Systems

Reduced from mid-year

Electronics

29

FY2020

FY2021

Continued curtailment of investments

Relocation from Eastern Europe to North Africa

Fujikura Group Integrated Report 2020

View on subsequent
investment

Concentration on growth businesses

Minimum necessary

Investment basedon growth strategy
after turnaroundPower

Description

Fujikura Group Integrated Report 2020

30

Growth Strategy

View on Investment and Cash Flow in Each Business During the Operational
Turnaround Period

Automotive Products

Description

Explanation of the 100-Day Plan for Operational Turnaround

Telecommunication Business Initiatives

Electronics, Automotive & Connector Business Company
Business Area

Electronics (FPC)

Automotive
Products(Wire Harnesses)

New Business
Opportunities

ActionDescription

Scale to size according to FPC order
strategy and demand• Increase promotion of order acceptance for high value-added productsthat capitalize on technical strengths.

Consolidate/eliminate locations andreduce personnel• Consolidate/eliminate multiple overseas locations.
• Reduce the number of personnel, mainly at overseas locations (around
500 personnel).

Reduce inventories through stronger
inventory management• Reduce inventories by 10 billion yen compared to the previous fiscal
year.

Restructure European business andachieve the proper scale• Transfer production from Eastern Europe to Morocco, introduce
innovative production methods, and utilize direct personnel efficiently.
• Consolidate/eliminate multiple overseas locations.
• Achieve the appropriate business scale through selective orderacceptance.
• Reduce indirect personnel expenses at Fujikura Automotive Europe,
S.A.U. (60 personnel).

Strengthening Governance• The management shake-up at Fujikura Automotive Europe is complete(an external consultant was retained to strengthen the governancestructure).

Strengthen new areas of electronic
components• Take advantage of new business opportunities in in-vehicle and CASE
segments.
• Expand sensors used in medical devices to respond to COVID-19.
• Expand European business in the medical area.

Overview●

Characteristics●

Fujikura established a joint venture in the U.S. in 1984. In 2005, we acquired it as a wholly owned subsidiaryand continued to expand in Europe, the U.S., and Australia via the Group management company.
● We have gradually expanded out business domains through a combination of M&A and organic growth.
● This business provides total solutions that include products and telecommunications construction, and is
expanding based on the U.S. as a model case.
R&D: Performed in Japan, based on Japanese, U.S., and European knowledge (* including peripheral
components and solutions).
● Manufacturing: Manufacture SWR® and WTC®, mainly in Japan, the U.S., and Europe (using high-quality fiber
made in Japan).
● Market: Develop the solution business in areas of Europe and the U.S. where FTTH and DC demand willgrow over the medium to long term.

Our presence in North America has expanded in recent years
and Fujikura estimates put our market share in the highdensity cable sector at 30%, among the top tier in the data
center industry (generally on par with HSDC).
HSDC: Hyper Scale Data CenterWe are confident of future growth, even amid the COVID-19
pandemic, and regard the optical network solution businessas an area where we should concentrate management
resources, mainly in Europe and the U.S.

Trend in Net Sales at North American Locations
Sales related to North American locations in the cable business are expanding during the COVID-19 pandemic.

Reduce Fixed Costs and Strengthen Financial Soundness
Business Area

Reduction in Fixed
Costs

FY2020* Sales breakdown

Description

Restructure sales companies andoffices• Close multiple locations overseas.

Reduce the capital investment
budget• Reduce by 50% YoY (reduction of 15 billion yen).
• Keep investments within the amount of depreciation and amortizationand secure cash flow.

Select and concentrate R&D themes• Concentrate in telecommunications and medical where Fujikura isstrong.
• Total R&D expenses will be curtailed, but we will secure investment for
key areas through a process of selection and concentration.

Services

Reduce personnel• Around 200 personnel in Japan.

Select and concentrate businesses
and sell assets through theconsolidation/elimination oflocations• 12 billion yen

Services
Products

North American related sales:
Approx. US$500 million

Products

Growth Strategy

Strengthen
Financial
Soundness

ActionFY2010

North American
related sales:

Over $1 billion* Rough estimates from management figures

Steady Expansion in Europe and the U.S.
The markets for FTTx, CATV, 5G, and HSDC are expanding rapidly and we currently have operations in 16 countries (as of FY2020).
Determination of locations for expansion:• Technology & product development:		Japan• Cable manufacturing: Japan, U.S., and Europe• Marketing:Japan, U.S., and Europe* High-performance fiber manufactured in Japan

SWR®/WTC® Net Sales by Region
Japan
U.S.
Core length

Europe
Other

Other
U.S.

EuropeJapan

Optical cable manufacturing

31

Fujikura Group Integrated Report 2020

2018

2019

2020 (Fiscal year)(Forecast)

Fujikura Group Integrated Report 202032

CSV in the Fujikura Group
5G

Pursuit of CSV

Entrance into the 5G mmWave Infrastructure Market
with a Top-Performing Phased Array Antenna Module

The Fujikura Group is pursuing CSV (Creating Shared Value)company’s core business while providing economic value

Fujikura has announced commercialization of a state-of-

expanded for FWA and MWA in the U.S. However, the market is

as a strategy for solving social issues and contributing to the(earning a profit). The Fujikura Group has always engaged inthe-art integrated Phased Array Antenna Module (hereafter,

still in the early stage of development and there are high market

achievement of SDGs (Sustainable Development Goals) whilebusiness activities aimed at solving social issues in the past and“PAAM”) for 5G mmWave telecommunications operated on

expectations for substantial growth in scenarios in which 5G

also achieving profit growth for our group. CSV is defined

we designated 2017 as the first year of CSV in the Fujikura Group,

the following 3rd Generation Partnership Project (3GPP)

mmWave service can be used both indoors and outdoors.

as activities that provide higher value to society through athe year in which we began seriously thinking about CSV.

frequency bands: n257 (28 GHz), n258 (26 GHz), and n261

5G

SWR® Optical Cable Installation Solutions Business*1

Fujikura succeeded in commercializing this PAAM

(27 GHz). Our PAAM product boasts top-level performance andproduct developed to meet these market expectations. We

can be used indoors or outdoors. It can be used as a wirelessaccomplished this by using our antenna design technology,

communications module for 5G mmWave fixed wirelesscircuit board design technology, and our expertise

access (FWA)*2, 5G mobile wireless access (MWA)*3, 5G wirelessaccumulated in our long history of continuously providing

backhaul*4, and other new purposes.

products of value in the telecommunications industry to

The Fujikura Group is developing an SWR® optical cable

to optimize the installation cost and the length of time

installation solutions business as a key measure for achieving

installation takes, which is a problem. In response to this,Development of 5G is now accelerating around theachieve a sophisticated fusion with the mmWave IC technology

a rapid operational turnaround. This business is centered on

the Fujikura Group not only provides products as a simple

world and mmWave is expected to play an important role inand Antenna-in-Package (AiP) technology introduced by IBM in

Spider Web Ribbon® (SWR®), the core wiring in optical cables

supplier; we engage in a detailed dialog with the customer

strengthening 5G network performance. According to thethe U.S. Fujikura will contribute to growth and expansion of 5G

that makes it possible to build far thinner, lighter optical cableand propose connector products made by Fujikura that can

Global mobile Suppliers Association (GSA)*5, 397 providers inmmWave networks and service in the future by providing thisproducts than before. The business uses a broad range ofmake connection work easier. We also modify components to

129 countries and regions have announced investment in 5G

PAAM product to customers who are building 5G infrastructure

product lines and expertise in the telecommunications area toimprove them at the request of the customer. Providing suchas of August 31, 2020. 5G mmWave services are mainly being

in many locations around the world.

solve problems experienced by customers.

service has enabled Fujikura to answer the need of customers

Telecommunications providers and IT service providers,

to improve the efficiency of installation work.
In addition to proposing improvements to installation

implementing 5G and IoT, and establishing hyperscale data

efficiency, America Fujikura Ltd. (a wholly owned subsidiarycenters essential to an information-based society. Improving

in the U.S.) also operates a business providing integrated

the efficiency of installation is a major issue for them. For

support extending from conducting installation site surveying

example, the degree of mastery required of the installer and theat the initial stage of construction to SWR® installation work

tools and other equipment used when performing installation

and after-service.

work on increasing the equipment capacity of hyperscale data

We will concentrate management resources in the SWR®

centers in Europe and the U.S. differ substantially, depending

optical cable installation solutions business amid the rapid

on the components used to connect optical cables inside

growth of the telecommunications area, and thereby achieve aa building and outside. This consequently makes it difficult

turnaround and sustained growth of the Fujikura Group.

Optical connector

Main Characteristics
Fujikura’s PAAM product is a high-performance PAAM withan integrated RF-IC*6. It is equipped with the various functions

an integrated antenna that can simultaneously transmit andessential in 5G base stations.

receive signals in both horizontal and vertical polarization and

SW

Dual
Polarized
AntennaSW

ΣSW

Frequency Converter(FC) ICSW
H-polarization

TX-IF

V-polarization

Beam Former (BF) IC

Splice rackSW

Growth Strategy

which are the main SWR® customers, are pushing ahead on

SW

Σ

RX-IF

Σ

...

BF-IC
x4

BF-IC
Plant fabricatedproducts

LO

Block diagram of Fujikura’s PAAM

*1 3GPP: An abbreviation for 3rd Generation Partnership Project, a standardization project that considers and formulates specifications for 5G andother mobile communications systems.
*2 FWA: An abbreviation for Fixed Wireless Access. Wireless access for fixed location devices (a subscriber’s home, etc.)*3 MWA: An abbreviation for Mobile Wireless Access. Wireless access for mobile devices (smartphones, etc.)
Optical closure

SWR®/WTC®

*4 Backhaul: The intermediate link between a communications provider’s core network and base stations.
*5 GSA: An abbreviation for Global mobile Suppliers Association. An industry association related to mobile communications that represents

The solutions business requires a broad range of product lines and expertise in the telecommunications area

33

Fujikura Group Integrated Report 2020

companies that provide mobile infrastructure, devices and equipment, applications, support services, etc.
*6 RF-IC: High frequency integrated circuit

Fujikura Group Integrated Report 2020

34

IoT

Sales Launch of Solution for Visualizing the Risk of a Seasonal Influenza
Epidemic

Fujikura has expanded its line-up of solutions using sensor

a solution that visualizes the risk of a seasonal influenza

systems equipped with dye-sensitized solar cells (DSSC),

epidemic, and will contribute to preventing the spread ofan environmentally friendly power generation device alsoseasonal influenza by providing and expanding use of thisdeveloped by the company. We have launched sales of

new solution.

Improving
QoL

Successful Commercialization of a 1.2 GHz High-resolution Nuclear
Magnetic Resonance (NMR) Superconductor Magnet—Fujikura’s high-temperature superconductor technology contributes tocommercialization of a top world class NMR —Characteristics• BRUKER Corporation, the world’s top supplier of NMR

Background and Recognition of Issues
It is said that each year more than 10 million people in Japan

where many people gather. Initiatives aimed at enhancing

are infected with seasonal influenza, which occurs mainly inmanagement of the workplace environment are also needed to

the winter. Reducing the risk of infection with influenza is seen

prevent influenza in workplaces such as offices and work sites

as an urgent issue. One effective means to reduce influenza

during company activities.

spectrometers, has succeeded in commercializing 1.2 GHz

including research on COVID-19, Alzheimer’s disease,high-resolution NMR (equivalent to a magnet field strength

Parkinson’s disease, and cancer. This equipment is highlyof 28.2 T). Use of the product has already begun.

beneficial to society.

• The rare-earth High-temperature Superconducting(HTS) tape produced by Fujikura contributed to thecommercialization of this 1.2 GHz NMR spectrometer.

victims is thought to be mitigation of infection risk in locations

Fujikura and BRUKER Corporation (hereafter, “BRUKER”), our

Product Characteristics
everyone via alerts in this manner encourages those involved• This solution uses the correlation between seasonal influenza
and absolute humidity as an indicator for visualizing theto take steps to increase humidity and other steps torisk of an epidemic. It was derived from the research of

appropriately maintain and manage humidity. This can lead

Dr. Makoto Shoji of Shoji Clinic for internal medicine andto a reduction in the risk of influenza infections.
• The sensor nodes used to measure temperature andpediatrics in the city of Sendai, Japan.

humidity and collect data incorporate DSSC, which are• Sensor nodes are used to collect data on temperature and• High-resolution NMRs are used in various kinds of research,humidity measurements required for absolute humidity. This

environmentally friendly power generation devices thatdata is accumulated on the cloud, and then used to put theenable autonomous power generation and operation.

data on risk into visual form. The visualized data can then be

This makes it possible to build a completely wireless andviewed anywhere, at any time by customers on smartphones,

maintenance-free sensor network.
• We are providing this solution as a package with the IoT

the absolute humidity value falls below the threshold value,

solution to prevent heatstroke we began selling this past

the color of the display on the screen of the monitoring device

summer. Customers who are using the IoT solution to preventchanges and an alarm is issued via audible alert and email.

heatstroke can use this solution without the addition of afields. The stronger the magnetic field, the stronger thehave achieved a major milestone through such collaboration.

resolution and sensitivity, so stronger magnets are desirable.

They succeeded in commercializing a 1.2 GHz high-Up until recently, only low-temperature superconducting

resolution NMR spectrometer having a high-field core built

tape made mainly of Niobium-Titanium (NbTi) and Niobium-from rare-earth HTS tape developed and manufactured byTin (Nb3Sn) was available for the commercial construction of

Fujikura. The 28.2 T magnet field strength corresponds to a 1H

such magnets. The intrinsic properties of these tapes limited

resonance frequency of 1.2 GHz, which constitutes the current

magnetic field strength to up to approximately 23.5 T (whichworld record in high-resolution NMR.

corresponds to a 1H resonance frequency of roughly 1.0 GHz).

BRUKER is the world’s leading supplier of NMR

Fujikura’s rare-earth HTS tape broke this barrier and contributed

spectrometers and historically pioneered the field of Ultra-Highto the commercialization of 1.1 GHz and 1.2 GHz NMR

Field (UHF) NMR. NMR is a wide-spread analytical techniquespectrometers. Fujikura will not only contribute to improving

used in a vast number of applications, including structure

the quality of people’s lives in the future; we will also continue

elucidation in chemistry, quality control, material science, andto contribute to society through our many technologies.

structural biology.

new agreement or devices.

• Detecting the risk of a seasonal influenza epidemic in theenvironment where the system is installed and notifying
Primary device

DSSC

Cloud

Falls below the alert
limit for seasonal
influenza epidemic risk

Wireless(920MHz band)
Notification via
email
Indoorterminal

Remote monitoring via PC/tablet

Measures absolute humidity
Simple device that does notneed wiring

Remote control for flashing light
Notification via light/audible alert
External view of HTS tape produced by Fujikura

Visualizes

Issues notification(seasonal influenza
epidemic risk)

Can be checked anywhere via
the Internet

Immediate alarm notification via
flashing light and email

Example image of system configuration and visualization

35

Fujikura Group Integrated Report 2020

External view of 1.2 GHz NMR developed by BRUKER

Fujikura Group Integrated Report 2020

36

Growth Strategy

tablets, or control devices via the Internet. Moreover, when

The samples to be measured are placed in strong magnetic

business partner in the field of superconductor technology,

2030 Vision
Addressing Equipment
Deterioration

Use of Diagnostic Equipment to Contribute to Stable Operation andMore Efficient Maintenance by Customers

2030 Vision Targeted by the Fujikura Group

Fujikura Dia Cable Ltd. has been selling numerous types of diagnostic equipment for many
years, including diagnostic equipment to detect deterioration of high voltage cables and

The Fujikura Group formulated and announced the Fujikura Group 2030 Vision in March 2017 as the long-term vision we target.

partial discharge detectors used for testing of insulation material and high voltage products.

This vision declares the intent to achieve sustainable improvement in corporate value by solving the challenges of a “Mirai” (future)

The aging of equipment has become a societal problem in recent years. High voltage

society. We are working to create new value that encompasses open innovation in the four market areas envisioned, based on thecables are likewise deteriorating, and importance is being placed on monitoring trends

slogan of “2030 Vision.”through live wire diagnostics. The LISSA-100 live wire sheath and shield low-resistance(portable) detection device and the LISSA-1500 (automatic) device measure resistanceof sheath insulation and resistance of the shielding layer in a live wire state. This enables
reliable detection of deterioration of high voltage cables at an early stage and contributes

LISSA-100 live sheath and shield resistancemeasuring device

Four Market Areas Targeted

to safe operations and more efficient maintenance work by customers.
Partial discharge measuring devices have also long been used for reliability testing of

Visionproducts that use high voltages. Fujikura has assembled a broad line-up of such products,
including the A006, which uses the low-frequency method, and the A115, which uses thetuning method. Use of partial discharge detection can detect potential defects before

Advanced Communication
Contributing to an advanced information society

Leaky Coaxial Cable That is Lighter and More Workable

Promoting the Proliferationof Renewable Energy

LCX with high-foam insulation
registered on NETIS

We will contribute to therealization of a comfortablesociety that is full ofvitality and that erases theboundaries between people,
goods, and informationby providing even moreadvanced communicationin various forms, based on the evolution of sensing
networks.

Robust Demand for Cables Used in Solar Power Generation

The Fujikura Group provides various kinds of cables targeted at the demand for renewable energy in Japan. We are supplying a large
volume of these cables to mega solar farms in Japan.
The electric power companies in Japan are expected to continue to expand their renewable energy businesses in the future.
Fujikura will continue to work to obtain more orders and contribute to the proliferation of renewable energy in Japan.

High voltage CV cable for gridconnection

Fujikura Group Integrated Report 2020

Energy & Industry
Utilization of various energy sources andefficient management
We will contribute to therealization of sustainable
planet by building systems
for highly sustainable
power sources, storage, andmanagement that will resultin a stable supply of energy,
and by using processing
technology and digital technology powered by highly
efficient, high density energy to achieve advanced
manufacturing.

Life-Assistance
Improving Quality of Life (QoL)

VehicleContributing to a society with
next-generation mobility

We will improve healthcare,increase health literacy, andcontribute to extending
the healthy lifespan ofpeople and improving
QoL that extends througha person’s entire life byproviding various solutions
aimed at advanced healthcare, local communities, andoccupations based on a QoL platform.

We will contribute to therealization of a society thatenables comfortable andsafe mobility and transport
by providing new means ofmobility that anyone canenjoy, the means to transport
goods on-demand at a low
cost, and the transportation infrastructure and systems
to support those means.

Fujikura Group Integrated Report 2020

Growth Strategy

Fujikura Dia Cable Ltd. has enhanced its line-up of leaky coaxial cables (LCX) with high-foam
insulation and connectors registered on the New Technology Information System (NETIS).
Such LCX are used for emergency communications in roads and tunnels and FM radio delayed
broadcasting. Only the 43D class for long-distance has existed up to now. However, Fujikura has now
registered two additional classes, the 33D for medium distances and the 20D for short distances,making it possible to select a product type of the optimal size for the installation distance.
These products are lighter and more workable than products having the conventional structure(in the case of 43D, the cable is about 21% lighter and the connectors are about 21% lighter,
shortening the time it takes to connect it by about 42%). This satisfied the need for labor-savings andshorter connection time.

37“tsunagu” (connecting) solutions and thereby continuously enhances corporate value.

A115 partial discharge detection device
using the tuning method

shipment and this contributes to increased reliability of customer products.

Improving Efficiency of
Installation WorkThe Fujikura Group solves problems in a comfortable and sustainable “Mirai” (future) society by providing

38

Contributions to Achieving SDGs
Determining Priority Issues
Determining Priority Issues

In-house Education
Commitment to SDGs by Top Management

Steps to Determine Priority Issues(1) Organize the relationships of the 17 goals
specified in the sustainable development
goals (SDGs) to the four focus areas(issues of materiality) outlined in the
Fujikura Group CSR Basic Principles and
CSR Priority Measures 2020.

(2) Analyze the materiality matrix and
explore the two perspectives of what
concerns stakeholders and the degree of
impact on Fujikura’s business for each of
the 17 SDGs.

(3) Analyze the SDGs by mapping themacross the value chain and set targets.

As one part of our efforts to accelerate initiatives aimed at achieving the SDGs
the Fujikura Group is targeting, we are asking ourselves what the Fujikura Groupcan do to achieve the SDGs and are communicating the commitment fromofficers in relay fashion.

Commitment from officers

Training on SDGs, Beginning with New Employees

Six SDG Targets Fujikura is Working Toward

Training sessions are being held on SDG themes by grade level, beginning withnew employees.
We conducted a workshop in which new employees selected an SDG
target for each group and considered how each individual could contribute toachieving that target.
Group photo of new employees

External Relationships

Six SDGs and CSR

Joint Seminar with Resona Holdings, Inc.
In the Fujikura Group, we used the SDG Compass to determine priority issues to tackle in initiatives aimed at achieving the SDGs.

Fujikura held a joint seminar with the employees of Resona Holdings, Inc., which
also has its head office in Kiba, Koto-ku. Together, they learned about SDGs
related to food.

Relationship between CSR Priorities and SDGs
Category

Twelve CSR
Priorities

12

Eleven Items Being
Followed

11

Environment(1) CO2 Emissions Reduction(2) Water Risks(3) Biodiversity Conservation

This provided a good opportunity to think about the SDGs in terms of ethicalSocialGovernance(4) Respecting Human Rights(5) Diversity(6) Global Personnel Growth(7) Work-Life Balance(8) CSR Supply Chain Management(9) Local Community Coordination andContribution(10) Group Management Philosophy MVCV
(11) Collaboration with Society(12) Disclosure and Communication• Group Environmental Management
Action Guidelines• Legal Compliance and Environmental
Audit• Occupational Safety and Health• Thorough and Enriching Environmental • Quality Management from the
Education
Customers' Viewpoint• Complete Zero Emissions• Enhancement of Environmentally
Friendly Products

Relationship to
SDGs Fujikura is
Focusing on• Corporate Governance• Compliance• Risk Management• Introduction and Utilization ofInternational Initiatives and Guidelines

foods and exchanging opinions with others in a different company, in a manner
they have never thought about them before.
Joint seminar with Resona Holdings, Inc.

TOPICS■ Addition of SDG Contributions to Environmental
Plans for Business Sites
SDG icons were added to the existing environmental action plan at Fujikura
Sakura Works.
Fujikura is pursuing initiatives aimed at achieving the SDGs. Each of the
topics in the environmental action plans is highly related to the SDGs and we
think that those initiatives will contribute to achieving the SDGs. We recently
revised the environmental action plans as one part of in-house education.
Each implementing division selected SDG icons related to their activities andwe will work even harder to drive these activities forward by thinking about
the connection between our environmental activities and the SDGs.

39

Fujikura Group Integrated Report 2020

Revised environmental action plan

Fujikura Group Integrated Report 2020

40

Growth Strategy

The specified priority issues were linked to CSR priority measures, and incorporated into the CSR activity plan.

| Performance and Forecast |Power & Telecommunication
Systems Company

FY2019 Performance

Message from the Company President & COO

Building the Infrastructure Neededin the Post-COVID-19 Environment
Fujikura is advancing global efforts to strengthen infrastructure to adapt toworkstyle reforms and lifestyle changes in the post COVID-19 environment and will
provide solutions that meet these needs.

Net Sales (Billions of yen)

Hideyuki Hosoya Senior Vice President
Company Profile

Main Products● Telecommunication cable

Networks continue to evolve in a quest for faster, higher quality, and higher capacity connections.

● Aluminum wire

The Fujikura Group continues to be the front runner with the No. 1 global share in the optical● Insulated wire

fiber development and manufacturing technology that provides the backbone support for that.

● Optical fiber

density in a slim cable. Fujikura is also No. 1 in optical fiber fusion splicers, which connect opticalfibers with low loss, and provides total solutions for building optical networks.
The Fujikura Group has contributed to the stable supply of electric power to support social

349.6

371.7

354.8

Operating Income (Billions of yen)/
Operating Margin (%)
20.3
5.8

261.5

269.5

2017

2018

247.4

236.1
17.7

6.0

5.0

4.5

● Optical cable● Optical installationequipment andcomponents

Total Assets (Billions of yen)

22.4
327.8

● Power cable● Providing Solutions for Building Infrastructure Platforms

We were also the first in the world to develop optical cable (SWR®/WTC®) that achieves high fiber

redevelopment projects and other construction-related
demand, and demand related to infrastructure investment inelectric power in the U.S.
The telecommunication business saw firm demand for
optical components, but suffered a steep decline in the price of
optical fiber caused by intensifying competition in China, which
accounts for a large portion of Group net sales, and its global
repercussions, resulting in a decline in revenue. As a result, net
sales fell 7.2% YoY decline to 139.9 billion yen and operating
income declined substantially.

Net sales for the Power & Telecommunication Systems
Company declined 7.6% YoY to 327.8 billion yen and operating
income fell 74.4% YoY to 4.5 billion yen.
The energy business segment saw a 7.9% YoY decline in
net sales to 187.8 billion yen. This was mainly due to the saleof shares held in a consolidated subsidiary responsible for
manufacturing overhead cable in China in June 2019 and a
decline in the sales price of electrical wire and cable due tothe decline in the price of copper. The Company saw growth
in profits, which resulted from strong demand for electricalwire related to the Tokyo Olympics & Paralympics, urban

1.4
2016

2017

2018

2019 (Fiscal Year)

2016

2017

2018

2019 (Fiscal Year)20162019 (Fiscal Year)● Optical components● Optical fiber fusion splicer

supplying the products that are absolutely essential to electric power infrastructure to the world, from

● Network equipment

power cables and overhead power lines to general purpose low-voltage cables and industrial cables.

● Engineering

Growth Strategy

infrastructure since it was first founded. The group is highly rated as the global front runner inFuture Measures Aimed at Sustained Growth●E xpansion of transmission line business to North American

1

Global business expansion
and growth

power companies● Global provision of optical networking solutions●E xpansion of optical product sales to overseas FTTx/
data centers●E xpand line-up of ultra-high-density optical fiber cable2(6,912-fiber count SWR®/WTC®)

Innovation●C reation of SWR®/WTC® cable products customized for the Air

Blown method and other purposes●E xpand line-up of slim optical fiber (insulated diameter of

200 μm) products

3
41

Fujikura Group Integrated Report 2020

Completion of structuralreform●C ompletion of cost structural reform in the energy businessFujikura Group Integrated Report 202042

| Performance and Forecast | Power & Telecommunication Systems Company

TOPICS

Main Product●B ritish Telecommunications Plc., the First Company in the UK to Adopt Full-scale Use of

Air Blown Wrapping Tube Cable™

Main Product 1

British Telecommunications Plc., the largest telecommunications provider in the UK, has adopted full-scale use of Air Blown

Data Center Wiring Solutions

Wrapping Tube Cable™ (hereafter, “AB-WTC™”)*1, an air blown*2 slim high density fiber ribbon cable which applies Fujikura’s

The need for cloud services is expanding both in Japan and overseas,
Optical connector

and the data center market is growing rapidly.

proprietary Spider Web Ribbon® (hereafter, “SWR®”)*3 technology in which 12 wrapped fibers are intermittently attached to

Splice rack

form a ribbon that resembles a spider web, and an optical fiber mass fusion splicer.

Fujikura provides packaged solutions containing 3,456-fiber

The combination of SWR® & WTC® with air-blown technology has succeeded in creating a practical application of AB-

count and 6,912-fiber count ultra-high-density SWR®/WTC® optical

WTC™ with a maximum of 864 fibers that enables mass fusion of the fibers all at once, a feat that was difficult to achieve withcables, the highest density optical cables in the world, along withrelated wiring components for use in data centers. This reduces the

Plant fabricatedproduct

space needed for optical product packages installed on the inside

optical fiber constructed of loose tubing with single fiber strands. The company expects this to substantially shorten theconstruction period for the FTTP*4 it is building in the UK. Fujikura
will continue to provide solutions for building FTTP.

and outside of data centers. It also contributes to reducing the timerequired to build an optical network by providing plant fabricatedproducts, and reduces the total construction cost.
Optical closure

Main Product 2

SWR®/WTC®

200 μm Spider Web Ribbon(long-distance transmission,
thin and lightweight)*1 Wrapping Tube Cable® (WTC®) is the name for slim high density opticalfiber ribbon cable that uses SWR®.
*2 Air-blown is one optical fiber installation method that is used widely,
mainly in Europe and the U.S.
*3 Spider Web Ribbon® (SWR®) is highly flexible ribbon and is applied tocables to create slim high density cables.
*4 FTTP is an abbreviation for Fiber-to-the-Premises.

Water Blocking Tape(completely dry structure)

SZ Bunching Unit(for easy maneuverability)
Sheath(low friction)
Strength Member(long-distance transmission)

Stripe Ring Mark(to easily distinguish fibers)

AB-WTC™ structure●9 0R, a New Optical Fiber Mass Fusion Splicer

6,912-fiber count Wrapping Tube Cable® (WTC®)—Optical cable with the highest fiber count in the world—

Optical fiber is becoming increasingly important infrastructure for diverse

Fujikura has begun sales of 6,912-fiber count Wrapping Tube Cable® (WTC®), an ultra-high-improving the efficiency of installation work.

density optical fiber cable with the highest fiber count in the world.
Fujikura succeeded in creating world-class ultra-high-density optical cable by using small-

applications. The common problem faced by all involved in construction is
Fujikura provides slim, lightweight optical cable (SWR®/WTC®) as asolution for that problem, and has launched sales of the new 90R mass
fusion splicer to further improve the efficiency of splicing work. In the caseproprietary Fujikura technology in which 12 wrapped fibers are intermittently attached to formof previous splicers, the glass granules vaporized during fusion woulda ribbon that resembles a spider web.

gradually adhere to the V-groove in which the fibers were set. Once thisrecent years, owing to the advancement of video communications, cloud service, and othertechnologies. This product provides a technology that enables high-capacity optical network
infrastructure to be built economically and efficiently and is used by telecommunication

Growth Strategy

diameter optical fiber with an external diameter of 200 μm in Spider Web Ribbon® (SWR®), a

The building of high-capacity data communication networks has progressed rapidly in

Mass fusion unit (90R)

V-groove replaceable on site

increased splicing loss, maintenance at a Fujikura service center wasneeded. With the 90R, the V-groove can be replaced on site, dramatically
improving convenience.

Carrying caseproviders and hyperscale data center providers in various countries worldwide.

●R apid Charging Standards for Electric Vehicles: Next-generation Standardization Activities
Four main standards are used for electric vehicle rapid charging globally. To prepare for the proliferation and higher

Main Product 3

performance of electric vehicles in the future, the CHAdeMO Association*1 of Japan and the China Electricity Council*2

Products Related to Renewable Energy

are taking the lead on advancing a project for pursuing Japan-China joint standardization to create a global integrated
standard for the next-generation. Fujikura is participating in exploring the shape and performance of connectors, and is

We provide one-stop service for the design, procurement, and installation of all kinds

actively cooperating on producing and evaluating prototypes, among other work. Electric vehicles are promising as vehicles

of connections for plants that generate various kinds of renewable energy, such asthat target achievement of carbon-free communities and as an emergency power source to protect human lives andpower transmission equipment, telecommunication systems that use optical fibers,

infrastructure during a disaster. We will continue to contribute to society through such activities in the future.

and intrusion detection systems. We will also focus on wind power generation, which*1 CHAdeMO Association: A general incorporated association establishedin March 2010 for the purposes of expanding the number of locations
equipped with rapid chargers essential for the proliferation of electricvehicles and standardization of charging methods.
*2 China Electricity Council: An organization in China consisting mainlyof electric power companies that engages in the establishment of
infrastructure and other activities.

is expected to proliferate in the future.

Example of construction: One of the largest solar farms in Japan
Began operation in December 201943

Fujikura Group Integrated Report 2020

Next-generation connector

PrototypeFujikura Group Integrated Report 202044

| Performance and Forecast |Electronics, Automotive &Connector Business Company
Message from the Company President & COO

Targeting a Rebound in Performancein the Core FPC and Wire Harness Businesses
I assumed the position of Company COO in April 2020. The first priority is tominimize the impact from the spread of COVID-19 and ensure the recovery of
the core FPC (flexible printed circuit) and wire harness businesses in FY2021. To
achieve this we will use this Company’s strengths in frontline skills and teamwork
in operation and pursue operational excellence, and work as one united Company
team to restore performance.

FY2019 Performance

Net Sales (Billions of yen)Takashi Takizawa Senior Vice President
Company Profile

195.9
156.7

in 19 countries worldwide for the manufacture, development,
and sale of products in Asia, North & South America, andEurope. Our main products include automotive wire harnesses,
in-vehicle LAN, seat sensors, electrical connectors used inelectric vehicles (EV), which are projected to benefit fromincreased demand to protect the environment, and othertotal wiring systems. These products support the evolution ofmobility, which is accelerating globally.
The Fujikura Group is fusing electronics and vehicles
to develop and provide new products and solutions in theautomotive industry, which is undergoing a once-in-a-century
period of innovation.

157.0

185.0
154.1

Operating Income (Billions of yen)/
Operating Margin (%)

Total Assets (Billions of yen)

10.4

150.0

175.1
152.4

133.1

8.3

7.5

110.2
96.1

89.1

2.5
–2.2

1.9

–3.1

147.8

131.6

4.5

5.3

4.8

158.3

–3.2

72.2
–3.7
–1.3

2016

2017

2018

2019

(Fiscal Year)

2016

–2.0

–2.1

2017

2018

Electronics–2.5

2019 (Fiscal Year)

2016

2017

2018

2019 (Fiscal Year)

Automotive products

Growth Strategy

The electronics business manufactures printed circuits,
electrical wire, connectors, and other electronic componentsthat create the delicate “neural network” of compact,
highly integrated electronic products. The Fujikura Groupdemonstrates the quality and technological capabilities
cultivated in its global operations over many years in the totalsolutions it provides. Such solutions include the optimal FPC(flexible printed circuits) and broad variety of other electronic
components and modules for producing advanced devices
such as smartphones and wearable devices that are compact,
lightweight, and thin.
In the automotive products business, we have 58 locations

The automotive products business saw an increasein net sales due to growth in demand in Europe and thecommencement of mass production for new vehicle models inSouth America. However, the global slump in vehicle demand,
mainly in the automotive market in China, caused net sales
to decline by 1.1% YoY, to 152.4 billion yen and resulted in an
operating loss of 3.7 billion yen (vs. an operating loss of 3.2 billion
yen in the previous fiscal year). Despite a reduction in costs
incurred in Asia achieved through structural reform, the delayin the transfer of production from Eastern Europe to Moroccoand delay in production improvements in Morocco suppressed
performance in Europe, resulting in a 3.7-billion-yen operating
loss, the second consecutive year of operating losses.

Net sales of the Electronics, Automotive & Connector BusinessCompany declined 3.4% YoY to 327.6 billion yen, and operating
income declined by 11.1 billion yen from the previous year,
resulting in an operating loss of 6 billion yen.
Net sales in the electronics business fell 5.4% YoY to 175.1
billion yen. This decline resulted from intensifying competition
and a change in product mix in FPCs for smartphones at key
customers. The decline in revenue also resulted in an increasein fixed costs and an operating loss of 2.2 billion yen (vs. an
operating profit of 8.3 billion yen in the previous fiscal year).
The inability to respond flexibly and agilely to the intensifying
competition and change in demand caused by the peaking ofsmartphone demand resulted in the substantial loss posted.

Future Measures Aimed at Sustained Growth1

45

Fujikura Group Integrated Report 2020

Strategy for securing orders
and achieving the rightbusiness scale

2

Improvement in costcompetitiveness3

New business creation●S trategy for securing orders that utilizes quality, technicalcapabilities, and existing manufacturing capacity●W ithdrawal from unprofitable products●E limination and consolidation of locations and structuralreform●S
 trengthening manufacturing●A dvancement of automation and IoT● I nventory reduction● I n-vehicle and CASE segments●M edical field●5
 G communications area

Fujikura Group Integrated Report 202046

| Performance and Forecast | Electronics, Automotive & Connector Business Company

TOPICS

Main Products
Main Product 1●F PC for In-vehicle UseHighly Flexible, Ultra-slim
Coaxial Cable

Lights and radar are becoming even more important in

Ultra-slim coaxial cable possesses goodtransmission properties at high frequencies
and is thin and flexible. It can therefore beautonomous driving. Next-generation electric vehicles
Jacketrequire stringent monitoring and control that extends to

Horizontal
wrapping
shieldInsulation

the powertrain and battery, and require a solution thatcan control wiring space, heat generation, and power loss.
We have expanded our line-up to include new uses suchused as internal wiring in notebook PCs andother compact electronic devices. Ultra-slim
coaxial cable has increasingly been used for

as FPC with superior heat dissipation and FPC modules forCentralconductor

battery monitoring, and are progressively replacing thevarious purposes in recent years. Demandhas increased in applications requiring evengreater flexibility and transmission at even100 μmConventional ultra-slim coaxial cablestructure

wired parts of conventional wire harnesses with FPC.

Example of highly flexible coaxial
cable structure

faster speeds. The photo on the right is an
example of a highly flexible, ultra-slim coaxial
cable. Changing the materials and structure of the central conductor made it possible to increase flexibility by 10 times or more comparedFor battery monitoring

to conventional coaxial cable. This made it possible to design and manufacture cables with the targeted performance in terms of flexibility.
Fujikura is developing an ultra-slim coaxial cable with even lower attenuation than before by improving the insulation and shield structure.

Main Product 2●F ujikura Cold Plate Used in Fugaku Supercomputer
Fujikura’s cold plate was selected and installed in theHigh-resolution Pressure Sensor with Digital Output

cooling unit for the Fugaku supercomputer jointly

Fujikura is developing an amplified temperature-compensated digitaldeveloped by RIKEN and Fujitsu Ltd. (Hereafter, “Fugaku”).
Fugaku is a global top class supercomputer which was

digital products. We will create products that are useful to customers who

ranked No. 1 in the four categories of Top 500, HPCG (Highrequire higher precision measurement and control in the medical and

Performance Conjugate Gradient), HPL-AI, and Graph 500 for

industrial fields and thereby contribute to society.

two consecutive periods in June 2020 and November 2020.

Growth Strategy

pressure sensor that provides superior resolution compared to our current

Fugaku is a large computer primarily designed forcomputational science. It is used to improve weather
and natural disaster forecasting accuracy, and in drug
development and healthcare. The supercomputer is
expected to contribute substantially to cutting-edge

Main Product 3
Wearable FPC Connector

research and development on topics such as creation of
new substances and forms of energy.
The high-performance CPU used in Fugaku generates aThis is a connector used in FPC (flexible printed circuits) developed for wearable watches

large amount of heat. Fujikura's cold plate is therefore usedin recent years. The thin design provided a product that is 0.7 mm or less in height. The

as the technology to achieve efficient cooling in a small

terminal pitch is ultra-narrow at 0.175 mm, with an extremely high packaging density.
It is also equipped with a power source terminal in addition to the signal terminal andthe complex specifications also make it possible to power a device with 2A. While being

amount of space. The cold plate is a high-performancecooling unit having a micro channel fin structure. It

compact leads to problems such as lever breakage when connecting to FPC, we handle

possesses the properties of achieving several times the cooling performance with a packaging height that is one-third orminiaturization by contriving a lever shape that ensures strength. This product is alsoless than the air cooling method. This performance was highly praised and led to its use in the Fugaku supercomputer.

environmentally friendly and achieves energy savings through the selection of materials
that comply with environmental regulations and use of low-resistance materials.

47

Fujikura Group Integrated Report 2020

Fujikura will continue to work on development aimed at even higher performance and provide products that meet theneeds of our customers.

Fujikura Group Integrated Report 202048

| Performance and Forecast |Real Estate Business Company

FY2019 Performance
The free rent period for some tenants ended in FY2019, resulting in growth in both revenue and profit. We were able to maintain fulloccupancy, supported by a robust rental office market.

Message from the Officer in Charge

Net Sales (Billions of yen)

20th Anniversary of Fukagawa Gatharia Grand Opening

10.9

It has been 20 years since Fukagawa Gatharia first opened for business.
We will harness the operating expertise we have accumulated thus far to maintainand improve asset value over the medium and long-term, and to steadily fulfill therole of supporting our main business. We will also contribute to surrounding local
communities as we work to co-exist harmoniously and achieve mutual prosperity.

Tetsu Ito Senior Vice President

10.1

10.8

Operating Income (Billions of yen)/
Operating Margin (%)

11.2

5.5
5.0

5.3

Total Assets (Billions of yen)

42.8

43.3

42.7

42.0

2016

2017

2018

2019 (Fiscal Year)

4.6

45.8

2016

2017

2018

2019 (Fiscal Year)

2016

50.2

2017

46.1

47.7

2018

2019 (Fiscal Year)

Company Profile● Maximizing Use of Assets and Maintaining Stable Revenue

We are effectively utilizing the former plant site next tomany other excellent tenants. It has continued to operate at fullFujikura headquarters to expand our real estate business.

occupancy since FY2014.

Redevelopment began in 1998, and we are operating a real

The basic policy of Fujikura’s real estate business is to utilize
long-held land effectively and increase revenues and profit.

buildings and two commercial buildings. The office buildings

We plan to increase tenant satisfaction through systematic

have a total leasable office space of around 107,000 m2. This

investment and improvement to increase the value of currently

property offers the advantage of being located within 4 km of

owned buildings and facilities, and maintain a high occupancy

the Marunouchi district in central Tokyo, and has banks andratio for rental units over the medium and long term.

We will continue to engage in activities to maintain and enhance asset value.
The key measures are listed below:

1

Energy conservation
initiatives

2

Disaster prevention andmitigation initiatives●D evelopment of communities that use less energy to realize a

low-carbon society

Growth Strategy

estate leasing and management business, mainly for five office

Future Measures Aimed at Sustained Growth●C ommunity development capable of sustaining businessactivities even during a disaster and rapid response inrestoring residents’ lives

TOPICS● Initiative Aimed at Achieving Zero Emission Tokyo
The Tokyo Metropolitan Government is implementing initiatives in the Tokyo
metropolitan area aimed at Zero Emission Tokyo, a sustainable city that that does
not emit CO2.
Fukagawa Gatharia is cooperating on this initiative and donated 10,852 tons
worth of emission credits for reduction in CO2 emissions generated through energysaving activities every year. These cooperative activities were welcomed and we
received a letter of appreciation from the Energy Division, Bureau of Environment,
Tokyo Metropolitan Government in the name of the governor of Tokyo.

49

Fujikura Group Integrated Report 2020

Receiving the letter of appreciation from the Bureau
of Environment, Tokyo Metropolitan Government

Fujikura Group Integrated Report 2020

50

Research & Development
The Fujikura Group is using its “tsunagu” (connecting) technologies platform as the foundation for pursuing initiatives
aimed at solving societal challenges.

Areas of ResearchmmWave Module

Message from the Officer in Charge

Trial operation of 5G high-speed wireless communications

RF module

n
io
gf

un

ct

mmWavesignalin

Digitalsignalfo
ryear history. We have contributed to society by providing products for building

mmWavem

networks and telecommunication networks over the course of its more than 130-service has begun in North America. Many of those trials are

RF-IC

Fujikura has established a solid technology platform in the areas of electrical power

Beampower and telecommunication infrastructure throughout this time.
We have always developed cutting-edge technologies and maintained global

using frequencies bands lower than 6 GHz, called the Sub-6. The
next promising technology after this Sub-6 is millimeter wave
(mmWave), which uses high frequency bands such as 28 GHz and
60 GHz for high-speed communications at several Gbps. Fujikura
is developing such mmWave communications modules.

RF-IC

top-class technology in R&D on optical fiber and peripheral products, which replaced
electrical wire as the mainstream technology in telecommunications in the 1980s.
technologies in electronic devices, automotive products, medical equipment, andindustrial equipment products, thereby building a technology platform that adds

Antenna

Ap W
pr id
ox th
.1 :
0
cm

Fujikura has expanded the use of such electrical wire and optical fiber-related
An AIP (Antenna-In-Package) withintegrated RF-IC and antenna embedded
is used in the mmWave band.

high value in the telecommunication, electronics, and energy fields. We are working
to evolve our “tsunagu” (connecting) technologies based on that platform.
We are now in an era of progressive digital transformation in industry, social
infrastructure, and many other areas of life. Fujikura wants to be a company thatevolves connecting technologies, provides products that contribute to connectedness

In charge of Corporate R&D Unit
Executive Vice President &Member of the Board

through an always-on network and digital transformation solutions in peripheral
areas, and other products and services that solve the societal challenges.

Akira Wada

CRFP Processing with a Single-mode Fiber Lasers
Demand for carbon fiber reinforced plastic (CFRP) will continue togrow in the future as environmental regulations in the automotive,
materials. Because this CFRP is a difficult material to process, it ismainly processed by cutting at present and this presents many

To achieve this, we will engage in global collaboration with external research

problems in terms of processing cost, processing quality, and otherinstitutions, introduce a framework for creating new value through open innovation,

factors. Laser processing is also drawing interest, but processing takes

and accelerate research and development.

a long time and this has been problematic. The single-mode fiber
laser developed by Fujikura has high power density and a small spot
combining it with a scanner device and assist gas also developed byWireless• mmWave modules• Energy-harvesting
sensor network
systems

Optical• Optical devices• Optical fiber
fusion splicers
Optical• Optical
telecommunication components• Optical
systems
connectors• Optical cables• Optical fiber

Assist gas(N2)
CFRP plate

made processing possible at speeds which exceed the level required in the automotive industry (3mmt CFRP x cutting of approx.
8m/min) using a 3 kW laser.

Fiber lasers

Cross-sectional view

Thermal• Micro heat pipes• Cold plates

Wire components
in electronicequipment• Electrical wire
• FPC
• Membrane switches• WABE• Connectors

Superconductors• Pressure,oxygenOptical sensing
applications

3 kW Single-mode
fiber laser

the company to cool and shrink the heat-affected zone (HAZ). This

Markets

Future-oriented R&D

Sensors

Galvanometerscanner

Growth Strategy

diameter, so Fujikura succeeded in high-speed cutting of CFRP by“Tsunagu” (Connecting) Technologies Platform and Markets“Tsunagu” (Connecting) Technologies Platform

Delivery fiber

aircraft, and other industries enhance the demand for lightweight

Telecommunication

Industrial
equipment

Electronics

Medicalequipment

Advanced Research Core (ARC) Established
Advanced Research Core (ARC) has commenced operation as a new research center. This
research center began as joint development with the world’s top academic institutions. The• Coaxial cables

Platform
technologies
51

Electrical wires
and cables• AI technology• Analytical technology

Fujikura Group Integrated Report 2020

• Material technology• Advanced equipment
technology

goal of ARC is to create new processing technology, new devices, and new technologies in• Automotive wire harnesses• Industrial wiring

Automotive

Energyother areas, and a new R&D system.

• Observation & analysis
technology• Precision processing technology

Fujikura Group Integrated Report 202052

New Businesses
The Fujikura Group is working to strengthen the system for developing new businesses and to create new value
through “tsunagu” (connecting) technologies.

Open Innovation

Message from the Officer in Charge

Collaboration with Start-ups

Fujikura is working to create new value through open innovation in the four market areas envisioned in our 2030 Vision: Advanced
The New Business Development Center serves as the incubator for developing

Communication, Energy & Industry, Life-Assistance, and Vehicle. We are collaborating with various start-up companies to create new

the results generated from Fujikura’s R&D into new businesses. The core medical

value in these four areas.

technologies based on imaging and miniaturization, and the high-temperature

Fujikura has been pursuing proof-of-concept (PoC) trials with various partners at internal and external locations, including thesuperconductor technology that is promising for use in MRI and the energy field“BRIDGE” Fujikura Innovation Hub. We are steadily sprouting products and solutions, which would be difficult to create on our own,

were generated from R&D on global top-class “tsunagu” (connecting) technologies.

through collaboration with highly specialized partners to take on the challenges of future societies.

These are steadily being developed to meet the expectations of customers andare expected to grow substantially as businesses. In the future, we will use thesetechnologies as cornerstones to expand the range of connecting technologies that
Fujikura provides, by introducing IoT solution technology, mmWave technology, andother new elements. As we expand these, we will continue to launch new products
and services that anticipate the expectations of customers and society.
Fujikura is also expanding open innovation activities to solve the future issuesof people and communities, based on the keyword “connecting.” These activities aretargeted at the four key market areas of Advanced Communication, Energy & Industry,
Senior Vice President & Member of the Board
In charge of the New Business
Development Center

Masato Inaba

Life-Assistance, and Vehicle, and target achievement of the 2030 Vision formulated
by Fujikura. We will create new businesses needed to solve the challenges of a futuresociety together with our partners around the world, through the “BRIDGE” Fujikura
Innovation Hub opened in Kiba in 2018. Please keep an eye out for these.

PoC trial on producing a space with an original aroma

SmartPlate PoC trial

Overseas Location Established and Product Supply Begun in the Medical Field
Growth Strategy

Fujikura has established a base in Minneapolis, Minnesota in the U.S., one of the global medical equipment development centers, toimprove human health and quality of life. We began supplying ultra-slim camera modules to a major medical device manufacturer
from this fiscal year as a result of our activities in this area.
We will continue to contribute to advancements in healthcare and increased value through Fujikura technologies that support
the backbone of telecommunications and electronics.

Open Innovation

The “BRIDGE” Fujikura Innovation Hub

The “BRIDGE” Fujikura Innovation Hub, which we established last July to strengthen and expand innovation-generating activities,

Core Medical Technologies

is fortunately being used by many people. Numerous people have participated in various events and workshops, and have also

Application to endoscopes and catheters having a

Visualization of areas deep

Supporting many kinds of solutions forengaged in specific activities aimed at establishing proof-of-concept for businesses originated at BRIDGE. The various activities

small diameter contributes to the advancement ofwithin the body using radio

wearable devices, implants, and otherat BRIDGE have educated a wide range of people on the open

minimally invasive medical technology

waves and ultrasoundultra-miniature devices

innovation initiatives at Fujikura, and have enabled us to engage indialog with many people aimed at new value creation.
We intend to increase opportunities for dialog with everyone
and continue to hold various events in the future.
Symposiums and workshops aimed at solving societal challenges
and many other different kinds of programs take place at BRIDGE,
in addition to seminars based on the theme of innovation, events

Electronic scope using
CMOS

Fiberscope using image
fibers

IVUS* catheter* For Intravascular ultrasoundexamination

WABE* Package®, a device-embedded board
built into thin components* WABE: Wafer And Board level device Embedded
Packageto introduce advanced technologies, and venture pitches. Pleaseparticipate in this community, which spurs interaction andcollaboration surpassing organizational boundaries.
People networking at the BRIDGE 1st anniversary event

53

Fujikura Group Integrated Report 2020

Fujikura Group Integrated Report 2020

54

Top Management(as of September 16, 2020)

Directors

President & CEO & Representative Director

Executive Vice President & Member of the Board

Executive Vice President & Member of the Board

Masahiko Ito

Akira Wada

Takeaki Kitajima

Chief of Governance, Quality Management
Department, Internal Audit Department,Internal Control Department, and Security Export
Administrative Division
No. of shares held in Fujikura, Ltd.: 57,587

Responsible for Corporate R&D Unit and Corporate
Production Unit
No. of shares held in Fujikura, Ltd.: 10,052

Responsible for Corporate Sales & Marketing
Unit, Power Systems Business in the Power &Telecommunication Systems Company
No. of shares held in Fujikura, Ltd.: 42,490

Senior Vice President & Member of the Board

Senior Vice President & Member of the Board

Senior Vice President & Member of the Board

Hideyuki Hosoya

Takashi Takizawa

Tetsu Ito

Responsible for Telecommunication Systems
Business in the Power & Telecommunication
Systems Company
No. of shares held in Fujikura, Ltd.: 22,400

Responsible for Electronics, Automotive &Connector Business Company
No. of shares held in Fujikura, Ltd.: 31,606

Responsible for Corporate Staff Unit (Finance &Accounting Division), Real Estate Business Company
No. of shares held in Fujikura, Ltd.: 55,009

Director, Full-time Audit & Supervisory Committee
MemberDirector (Outside Director/Independent Officer),
Audit & Supervisory Committee Member

Director (Outside Director/Independent Officer),
Audit & Supervisory Committee Member

Yasuyuki Oda

Masaaki Shimojima

Kenichiro Abe

Audit & Supervisory Committee Chair
No. of shares held in Fujikura, Ltd.: 87,500 shares

Background: Experienced in corporate management(financial industry)
Remuneration Advisory Committee Chair

Background: Certified Public Accountant

Director (Outside Director/Independent Officer),
Audit & Supervisory Committee Member

Director (Outside Director/Independent Officer),
Audit & Supervisory Committee Member

Director (Outside Director/Independent Officer),
Audit & Supervisory Committee Member

Yoshio Shirai

Tsuneko Murata

Hamako Hanazaki

Background: Experienced in corporate management(manufacturing industry)
Nominating Advisory Committee Chair

Background: Experienced in corporate management(Legal affairs)

Background: Attorney-at-law

Executive Officers

Managing Executive Officer Koji Ueda
Head of FPC Subcompany , Head of PC Business Division

Executive Officer Toshiaki Shinya
In charge of operations for Corporate Procurement
Division and Information Business System Engineering
Division

Senior Managing Executive Officer Ikuo Kobayashi
Deputy head of Electronics, Automotive & Connector
Business Company
Managing Executive Officer Takeshi Sato
Deputy head of Telecommunication BusinessSubcompany, Division Manager of Fiber Laser Division
Managing Executive Officer Yukihiro Nakayama
Responsible for General Affairs Division, Corporate
Communications Division, Health Support Center , incharge of operations at Sakura Works, Numazu Works,
Suzuka Works, Manager of Human Resource Division

Managing Executive Officer Ryoichi Hara
Head of Quality Management Center
Managing Executive Officer Kinya Takimura
Deputy head of Magnet Wire Business Division, Head of
Kansai OfficeSenior Vice President & Member of the Board

Senior Vice President & Member of the Board

Senior Vice President & Member of the Board

Joseph E. Gallagher

Masato Inaba

Shigeo Sekikawa, newly appointed

CEO and President of AFL Telecommunications LLC
No. of shares held in Fujikura, Ltd.: 1,016 shares

Responsible for New Business Development CenterNo. of shares held in Fujikura, Ltd.: 21,774 shares

Corporate Staff Unit (Corporate Strategy Planning
Division, Legal Department, Human Resource
Division)
No. of shares held in Fujikura, Ltd.: 10,552 shares

55

Fujikura Group Integrated Report 2020

Managing Executive Officer Akira Saita
Telecommunication Business Subcompany, in charge ofglobal operations
Managing Executive Officer Junji Fukuhara
Head of sales, Electronics, Automotive & Connector
Business Company, Deputy head of Automotive Products
Subcompany

Managing Executive Officer Toshio Shimma
Deputy head of Energy Subcompany, Head of Industrial
Infrastructure Project Sales & Marketing Department,
Deputy head of Customer Satisfaction Improvement
Division

Executive Officer Tatsuya Banno
Head of Optical Fiber Division
Executive Officer Takaharu Serizawa
President of Fujikura Electronics (Thailand) Ltd.

Managing Executive Officer Naoki Okada
Head of Corporate Strategy Planning Division

Executive Officer Tetsuya Mangyoku
Deputy head of Corporate Production Unit, Head ofFacilities & Equipment Engineering Center

Executive Officer Masataka Mito
Deputy head of Energy Subcompany , Head of Energy
Systems Business Division, Head of Brazil Business Division

Executive Officer Jason Peng
Head of Connector Subcompany, President of Fujikura
America Inc.

Executive Officer Tomoharu Morimoto
Head of New Business Development Center

Global Executive Officer

Executive Officer Daiichiro Tanaka
In charge of operations for Advanced Material Technology& Analysis Center and Intellectual Property Center, Headof Optical Technologies R&D Center

Gordon Tan

Executive Officer Norihiro Yokoyama
In charge of operations for Market Research & Planning
Department, Head of Security Export Administrative
Division

Deputy head of Automotive Products Sub-company

Executive Officer Shuichi Nasu
Deputy head of Automotive Products Subcompany

Foundations for GrowthManaging Executive Officer Kenji Nishide
Deputy head of Corporate R&D Unit, Head of Corporate
R&D Planning Center, Head of Electronic Technologies
R&D Center

Managing Executive Officer Munehisa Fujimaki
Head of Optical Cable Systems Division

Fujikura Asia Ltd. CFOTakaaki Habu
Jenny HuiFujikura Hong Kong Ltd. CFO

Vichan Kumthonkittikul
Vice President of Fujikura Electronics (Thailand) Ltd.

Fujikura Group Integrated Report 2020

56

Messages from Outside Directors
The Fujikura Group utilizes the experience and knowledge of outside directors in diverse areas to strengthen thefunctioning of the Board of Directors. In this year’s report, we asked our outside directors for their frank opinions of theBoard of Directors, governance reform, and other aspects of the Fujikura Group.

Contributing to appropriate decision-making as aprofessional in finance and audits

No. of outside directors

5Percentage of outside
directors

33.3%

Percentage of women
directors

14.3%(two directors)

Kenichiro Abe
Certified Public Accountant

Experienced in corporate management(financial industry)

57

Fujikura Group Integrated Report 2020

Focusing even more comprehensively on risk
management to achieve structural reform of businesses

Urging transformation of the corporate culture with afocus on the post-turnaround vision

I have mainly voiced my opinion on how to handle risk management
in investment projects, based on my experience in screening credit foroverseas projects in the financial institutions where I worked previously.
On the Remuneration Advisory Committee, I am also putting effort into
ensuring transparency in compensation of executive directors and building
a performance-linked compensation system that proves strong incentives toachieve plans.
Fujikura’s performance deteriorated substantially when the company
found itself unable to respond to the rapid changes in market environmentand customer trends in the key businesses of optical fiber and FPC (flexible
printed circuits). The company is currently working on an operational
turnaround. Bold business structural reforms and speed in achieving thesereforms are needed to succeed in turning around operations and meet the
expectations of stakeholders.
I view it as my role to continue to voice my opinion from an objective
standpoint as an outside director on decisive structural reforms andstrengthening risk management even more to achieve a rapid recovery ininvestment from this point forward.
Fujikura possesses technological capabilities developed over its long history
and many outstanding human resources who want to improve the company. I
am certain that Fujikura can succeed in the operational turnaround that will leadthe company into the next generation if all employees unite as one team.

Fujikura produced extremely poor business results in FY2019. Structuralissues that must be overcome emerged in each business and it is my view thatsustained growth cannot be anticipated with the business model Fujikura
has operated under thus far. As the chairperson of the Nominating Advisory
Committee, I have met individually with each director and sorted through andshared the issues faced by management. The Nominating Advisory Committee
met every month in FY2020. We spent much time on selecting the talent thatwill carry Fujikura forward in the future, including a succession plan for CEO, andconsidering organizational structural reforms with the goal of achieving a fresh
start for the company. It is precisely the circumstances demanding operational
execution and necessitating a switch in business models under the COVID-19
pandemic that are providing an excellent opportunity to transform thecorporate culture into one that will foster a sense of unity aimed at achieving
sustainable growth of Fujikura.
While the operational turnaround is currently the top priority, I willcontribute to discussions on the medium and long-term vision and globalorganizational structure for Fujikura to enable the Fujikura to continue as truly
global company.

Yoshio Shirai
Experienced in corporate management(manufacturing industry)

Fujikura Group Integrated Report 2020

58

Foundations for Growth

Masaaki Shimojima

Since I became an outside auditor in 2013, I have toured business locationsin Japan and overseas and provided my opinion on management issues andother matters based on cases at other companies and other knowledge. I am
contributing to enhancing the corporate value of Fujikura by working as a teamwith other outside directors with different areas of expertise, based on myexperience in finance, auditing, and global business.
Fujikura has entered the operational turnaround phase and the businessenvironment is severe. We are therefore engaging in even more in-depth
constructive debates in Board of Directors meetings and I believe that thecompany is successfully implementing strategic governance aimed at future
growth. As a member of the Remuneration Advisory Committee, I am also
verifying the director performance evaluations appropriately and considering
the functioning of the compensation system with an eye toward the future.
As a certified public accountant and outside director, my first priority is
to pursue the facts and exercise supervisory oversight of accurate financial
statements. This supports appropriate decision-making by Fujikura. I will first
support the successful completion of the operational turnaround phase torealize the sustained growth that Fujikura has achieved over the course of its
more than 130-year history.

Messages from Outside Directors

Contributing to enhancement of corporate value
by increasing the soundness and transparency ofmanagement and satisfaction of customers and employees

Tsuneko Murata
Experienced in corporate management(legal affairs and risk management)

Fujikura faced an unprecedented deterioration in performance in 2020.
The company is currently in the middle of business reforms and I think it isnecessary, now more than ever, for the company to rededicate itself to thespirit of innovation that has been passed down in an unbroken chain fromthe founders over the course of Fujikura’s more than 130-year history, steadily,
persistently, and with single-minded dedication.
I believe that the role of an outside director is to firmly communicate
necessary opinions, even when they are hard for management to hear. We musttake this to heart and make sure that a “see no evil, speak no evil, hear no evil”
approach is never taken. I think it is important to state my opinions from thedual strategic and defensive perspectives of compliance and risk management.
For corporate governance to function effectively, I think it is important foroutside directors to understand the actual conditions on the frontlines as well.
I attend the audits and interviews by full-time Audit & Supervisory Committee
members to the extent possible, and I believe that this enables me to confirm
actual business conditions on the frontlines and my insights, and leads toproviding constructive opinions and advice.
I also think that employee satisfaction (ES) is important to achieving
customer satisfaction (CS), and achieving both enhances corporate value. I willcontinue to work to improve management soundness and transparency while
also contributing to the enhancement of corporate value to enable Fujikura
to achieve sustainable growth as a company that employees also find it easy
to work at, and to enable Fujikura to earn the trust of shareholders, customers,
business partners, and all other stakeholders.

Striving to strengthen risk management from a longterm perspective
I have confronted challenges that Fujikura is experiencing by communicatingwith employees who work on the frontlines since I became an outside director
last year.
While the current business conditions are extremely severe, I regard these
conditions as the launching point to restoring earning power and sustainablegrowth in the future.
Fujikura is currently aiming to complete the operational turnaround phaseand is focusing on enlisting the entire company in restoring performancequickly. However, I have an important mission as an outside director to state
my opinion on what the vision of the company should be from a long-term
perspective. One long-term issue is establishing a risk management structure.
As an attorney, I use my legal knowledge and past experience to consider
the balance between the creation of firm rules in company management andmaking sure that the rules do not hinder innovation. I recognize how extremely
important my role is in supporting system design and operation.
The severe business environment will probably persist, but the
telecommunication business has achieved a certain degree of success in
expanding profits even amid the COVID-19 pandemic and I want everyone tolook forward to completion of the turnaround phase and future successes.

Hamako Hanazaki
Attorney-at-law

Director Skills Matrix
Business Experience
Management
Strategy
Masahiko Ito

Executive Vice President

Akira Wada

Executive Vice President

Takeaki Kitajima

Senior Vice President

Hideyuki Hosoya

Senior Vice President

Takashi Takizawa

Senior Vice President

Tetsu Ito

Senior Vice President

Joseph E. Gallagher

Senior Vice President

Masato Inaba

Senior Vice President

Shigeo Sekikawa

Information
Systems

Governance &CSR

Audits, Legal &Risk

Business
Planning

R&D, Quality,
Production &Technology

Sales &
MarketingGlobalFoundations for GrowthPresident & Representative Director

Finance

Human Resource
Management

Director, Full-time Audit & Supervisory Committee Member Yasuyuki Oda
Outside Director, Audit & Supervisory Committee Member Masaaki Shimojima
Outside Director, Audit & Supervisory Committee Member Kenichiro Abe
Outside Director, Audit & Supervisory Committee Member Yoshio Shirai
Outside Director, Audit & Supervisory Committee Member Tsuneko Murata
Outside Director, Audit & Supervisory Committee Member Hamako Hanazaki

59

Fujikura Group Integrated Report 2020

Fujikura Group Integrated Report 2020

60

Corporate GovernanceTo restore the Fujikura Group as a company capable of creating high corporate values, we will work to strengthen(2) Delegation of authority to executive directors

governance to facilitate comprehensive risk management and build a more effective corporate governance structure.

The main businesses of Fujikura are organized into two in-house Companies (the Power & Telecommunication Systems Company,

By doing so, we will implement an operational turnaround with unwavering determination and take decisive action toand the Electronics, Automotive & Connector Business Company). An executive director is assigned to each in-house company

reform the entire corporate structure.

to handle oversight. Fujikura believes that a flexible system is necessary to facilitate quick and decisive decision-making by these
executive directors on items exclusive to the in-house company and on matters posing a relatively minimal degree of risk. The
Company therefore delegates a significant amount of authority to the executive directors in charge of management of the in-house

Basic View on Corporate Governancecompanies. Fujikura is working to strengthen the structure for business execution further in light of the losses incurred in businessFujikura Ltd. believes the corporate governance system discussed herein is optimal for achieving the company’s growth strategies.

thoroughly investigate them, and mount a rapid response when a risk materializes.

Fujikura has adopted a “company with Audit and Supervisory Committee” organizational structure to establish such a corporate
governance system.

operations in past years. One of the steps we are taking is to build a system that enables the Company to predict risks, analyze and(3) Strengthening the supervisory function of the Board of Directors
The Company has established an effective system of internal controls to ensure legal compliance and appropriateness of the(1) Enhancing decision-making by the Board of Directors
The Company thinks it important to build a structure that enables the Board of Directors to make decisions after sufficient, thoroughdeliberation of the annual and mid-term business plans, large M&A deals, and other matters that are central to the policy andgrowth strategy of the Company. We therefore elect multiple outside directors who possess a broad range of expertise and have
objective opinions that are not influenced by internal company circumstances, in addition to electing internal executive directors
who are well-versed in and oversee the business of each in-house company. We think this enables the Board of Directors to engage
in sufficient, thorough deliberation in making decisions on important matters.
At present, there are five outside directors: Three with corporate management experience (in finance, manufacturing, and legal
affairs) and two others (one attorney and one certified public accountant).

performance of duties by each executive director to whom the Board of Directors has delegated broad authority. This provides thenecessary controls for the executive system.
Multiple outside directors who are independent of Company management have also been elected to strengthen the
supervisory function over the performance of duties by each executive director.
It is also necessary for the Board of Directors to ensure objectivity and transparency in the decision-making process whenevaluating executive director performance, and the Company thinks this contributes to stronger supervisory oversight by the Boardof Directors. For that reason, decisions on nomination and remuneration of executive directors are made after deliberation in the
Nominating Advisory Committee and the Remuneration Advisory Committee. Outside directors comprise of majority of members
on both of these committees.

Corporate Governance StructureInternal

OutsideCommittee Activities

General Meeting of Shareholders
Appointment

Appointment

Appointment

Auditing/Supervision

Cooperation

Board of Directors(15 members in total; Audit and Supervisory Committee members: 6 members)

Inquiry
Reporting

Chair

Directors who are not Audit &Supervisory Committee members
Supervision(Full-time : 1 member; Outside Independent: 5 members)

Inquiry

Nominating
Advisory
Committee

An advisory committee to the Board of
Directors established to ensure objectivity andtransparency in the decision-making processconcerning nomination of candidates for director
positions

5 committee members
Chairperson: Yoshio Shirai, Director*
Members: Masaaki Shimojima, Director*;
Tsuneko Murata, Director*; Masahiko Ito,
President & CEO; Takashi Takizawa, SeniorVice President and Member of the Board

4 timesRemuneration
Advisory
Committee

An advisory committee to the Board of
Directors established to ensure objectivity andtransparency in the decision-making processconcerning remuneration of candidates for
director positions

4 committee members
Chair: Masaaki Shimojima, Director*
Members: Kenichiro Abe, Director*, Yoshio
Shirai, Director*, Takashi Takizawa, SeniorVice President and Member of the Board

5 times

Risk
Management
Committee

The body that verifies Fujikura’s operational
performance structure and the status of
performance from perspective of risk (including
compliance), and prevents and evaluates
losses, formulates a response policy, and sharesinformation, among other activities

9 committee members
Chair: Masahiko Ito, President & CEO
Members: Executive Directors

Management
Innovation
Committee

The body that works to improve the efficiency ofmanagement resources (including governance),
improve efficiency through cost reduction, andimprove profitability by strengthening sales andpurchasing power

General chair: Masahiko Ito, President &CEO
Each executive director works on
management items

Management Innovation Committee

Executive Directors

Executive Directors

Control

Control

Auditing

Auditing

Corporate Unit
Individual UnitsGroup Companies

61

Chair

Regulation

Quality Control Unit

No. of Meetings
in FY2019

President & CEO

Audit andSupervisory
Committee
OfficeInternal Audit
Division

Composition

Auditing

Fujikura Group Integrated Report 2020

Supervision/
SupportRisk Management
Committee
Chairperson: President & CEO
Members: Executive Directors

In-house Companies

Whistleblowing System

Individual Units

Internal Reporting
Contact

ReportingGeneral Manager ofGeneral Affairs Division

Group Companies
ReportingExternal Reporting
Contact

26 times
Foundations for Growth

Accounting Auditors

ControlRemuneration Advisory
Committee(4 members in total)

Reporting

Delegation of important business execution(9 Executive Directors)
AssistanceNominating Advisory
Committee(5 members in total)
Chair

Audit and Supervisory Committee

Reporting/
Cooperation

Description

Name

Established in
April 2020

External Law Office

Fujikura Group Integrated Report 202062Corporate GovernanceAnalysis and evaluation of the effectiveness of the Board of Directors

Description of Remuneration Advisory Committee Activities
Date

Details

A survey is conducted on the effectiveness of the Board of Directors and applies to all directors. The survey includes questions on

October 22, 2018

Disposition (compensation) for executive directors

the adequacy of Board meetings overall (time, frequency, management of meeting proceedings, minutes, etc.), adequacy of agenda

November 26, 2018

Regarding consideration of stock-based compensation of officers of the U.S. subsidiary, Regarding listing ofstock-based compensation in the annual securities report, etc.

April 25, 2019

Regarding market trends in officer compensation, Regarding the results of considering use of a stock-based
compensation plan by means of a trust for officers of the U.S. subsidiary, Regarding the KPI applied to executive
directors in FY2019

May 14, 2019

Regarding FY2018 STI results and the FY2019 plan, Regarding payment of stock-based compensation to retired
officers

June 21, 2019

Regarding executive director remuneration for the 171st period, Regarding the report to the Board of Directors

June 27, 2019

Decision on officer remuneration in FY2019 by the Board of Directors

items (timing, importance, volume of information, etc.), aspects of Board members (participation in discussions, etc.), and executive
office function. Fujikura considers the results of the survey and takes remedial measures as necessary. The following steps are taken,
based on the findings from the survey:
1) Provide explanations of various aspects of Fujikura’s business to outside directors to give them a deeper understanding of thecompany and thereby further enhance deliberations by the Board of Directors.
2) Consider the occurrence of losses in managing the business and strengthen the structure to enable prediction, analysis, andinvestigation of risks, and rapid response when a risk materializes in operating divisions.
3) Revise the standards for referral and take other steps to reduce the number of agenda items concerning the routine performance of
duties. This enables the Board to focus more on important discussions such as medium and long-term management strategy.

Officer Remuneration
In addition to handling a large variety of products, Fujikura operates its business globally, and director duties are also highly
complex and varied. Our basic policy is that director remuneration should be at a level appropriate for outstanding humanresources who are capable of accomplishing such duties. We have therefore classified director remuneration into the following three
specific categories based on the survey results from multiple research groups, mainly on listed companies. We have established a
new system of remuneration based on objective indicators and evaluation, while also strengthening the link to performance.
The Board of Directors determines remuneration after receiving the report of the Remuneration Advisory Committee, which isan advisory body to the Board of Directors (and consists of the director in charge of human resources and three outside directors,
and chaired by an outside director). To determine the remuneration, etc. of directors who are not Audit & Supervisory Committee
members, the Remuneration Advisory Committee evaluates the performance of each director, examines whether the level ofcompensation is in line with the market, and confirms that the decision-making process concerning the remuneration structure andspecific remuneration is fair and appropriate. Based on the report form the Remuneration Advisory Committee, we have confirmedthat the remuneration was determined fairly and appropriately.

Details

Basic compensation

Compensation for the monitoring and supervision functions of each director, which is a fixed amount according
to his/her rank.

Short-term
performance-based
compensation

Compensation ranges from 0% to 200% of the basic compensation set by rank, according to corporate
performance and performance of the division the director is in charge of, and performance is based on certain
indicators (operating margin, ROE, etc.). These indicators are used because they easily reflect management
policy, strongly correspond to shareholder return, and are highly compatible with the Fujikura’s growth strategy.
The indicator targets used as the basis of short-term performance-linked compensation for the current fiscal
year are the above noted indicators calculated from the consolidated plan for fiscal year ended March 31,
2019, decided by the Board of Directors at the end of March 2018. The degree of achievement is measured bycomparison with these same indicators calculated from consolidated performance during the same fiscal year todetermine the amount paid as short-term performance-linked compensation in the current fiscal year.
In addition to the monetary compensation in (1) and (2) above, Fujikura also grants common stock of Fujikura
Ltd. as compensation. This scheme is intended to enhance the motivation of directors to contribute to anincrease in the corporate value of Fujikura by placing directors in a position to enjoy the advantage of a rising
share price as well as to bear the risk of a falling share price, so that directors and shareholders share theadvantages and disadvantages of such fluctuations.
Variable compensation linked to performance and stock prices (short-term performance-linked compensationand stock-based compensation) is expected to be roughly 40% of total compensation at maximum.
Remuneration of directors who are not executive directors shall consist only of basic compensation in a fixedamount, according to the role of each director. No short-term performance-linked compensation or stock-based
compensation will be paid.

Fujikura Group Integrated Report 2020

Performancelinked
compensation

Stock-based
compensation

Numberof Officers
Remunerated

346

255

24

66

10

Directors (Audit and Supervisory
Committee members) (excluding
outside directors)

23

23

—

—

1

Outside officers

64

64

—

—

6

Directors (excluding Audit andSupervisory Committee members
and outside directors)

Notes: 1. The amount of remuneration for directors who are not Audit & Supervisory Committee members was set at a maximum of 600 million yen
a year at the 169th General Meeting of Shareholders held on June 29, 2017.
2. Introduction of a stock-based compensation system to grant common stock in Fujikura upon retirement as compensation to directors who
are not Audit & Supervisory Board members was approved at the 169th General Meeting of Shareholders held on June 29, 2017.
		 The amount of such compensation approved for one fiscal year is a maximum of 120 million yen and a maximum of 285,000 shares.
3. The amount of remuneration for directors who are Audit & Supervisory Board members approved at the 169th General Meeting of
Shareholders held on June 29, 2017 is a maximum of 100 million yen a year (including compensation of outside directors of a maximum of
70 million yen a year).

Name

Joseph E. Gallagher

Total Amountof Consolidated
Remuneration,
etc.
191

Officer
Category

Director

Company
Category

Amount of Consolidated Remuneration, etc. by Type (Millions of yen)
Basic
Performance-linked Stock-based
compensationcompensationcompensation

Other

Submitting
company

8

—

—

—

AmericaFujikura Ltd.

43

115

—

23

Note: The total amount of consolidated remuneration is omitted for individuals receiving total consolidated remuneration, etc. of less than
100 million yen.

Cross-shareholding
1. Policy on cross-shareholding
Fujikura does not engage in cross-shareholding in principle. However, Fujikura may hold the shares of a company only if it isnecessary for Fujikura to enter into a strategic business partnership in the course of its business activities and it will contribute to anincrease in corporate value of Fujikura over the medium to long term.
Fujikura sells off shares that it has decided to stop holding, and the Board of Directors receives reports on the sell-off of theseshares. At the same time, the Board of Directors treats the shares it has decided to continue holding as capital invested in each inhouse company and decides whether to continue holding them after examining their utility.
2. Policy on exercise of voting rights
Fujikura properly exercises voting rights each year based on comprehensive decisions derived from the aforementioned strategic
cross-shareholding policy and from the perspective of increasing corporate value over the medium to long term.
Fujikura Group Integrated Report 2020

64

Foundations for GrowthCategories

63

Total Amount by Type of Compensation, etc. (Millions of yen)
Basiccompensation

Officer Category

Total Amount of
Remuneration, etc.
(Millions of yen)

Total Amount of Consolidated Remuneration, etc. for Each Officer

Remuneration Categories

Stock-based
compensation

Total Amount of Remuneration by Officer Category, Total Amount by Type of Compensation, etc., and Number of
Officers Remunerated

Risk Management

Corporate Governance

Measures to Ensure that Corporate Pension Funds Perform Their Role as an
Asset Owner

The Fujikura Group has established a policy to prevent or minimize losses in Group management and to maintainand enhance corporate value by building a foundation for sustainable, sound growth, through various risk
management activities.

Fujikura Group has established a corporate pension fund (the Fujikura Corporate Pension Fund) to which it has entrusted the
management of Fujikura’s pension assets. Fujikura Corporate Pension Fund subcontracts the entire management of the assets toasset management firms and monitors the management of those assets.
Fujikura takes care to provide the Fujikura Corporate Pension Fund with the necessary personnel and organizational structure to

Risk Management Structure
Fujikura classifies risks to be managed into risks related to business opportunities (strategy risks) and risks related to theperformance of its business activities (operational risks). Strategy risks are managed by top executives jointly through the Board

ensure that the fund can monitor the asset management firms (handling practical management) effectively.

of Directors and the Management Committee, while operational risks are managed by the Risk Management Committee basedon the Fujikura Risk Management Rules. For crisis management, we provide information to top management promptly and haveestablished a response organization and a management system in the Fujikura Risk Management Rules. Our risk management

Policy on Constructive Dialogue with Shareholders

structure is the same as our compliance structure.

(1) Fujikura promotes initiatives by which the president and senior management can engage in constructive dialogue withshareholders and investors as a means to achieve sustainable growth and increase corporate value over the medium to long term.

Risk Management Structure(2) Fujikura places a director in charge of investor relations to handle constructive dialogue and ensure the effectiveness of• Initiatives in FY2019

Board of Directors

dialogue and information disclosure. This director oversees the IR Group of the Corporate Strategy Planning Division, which

The Risk Management Committee met 26

cooperates with related departments to conduct timely, fair, and appropriate disclosure of information.

times in FY2019. The committee regularly

Risk Management Committee(3) Other ways in which Fujikura discloses information include its periodic conferences for analysts and institutional investors held
four times a year (May, August, November, February), plant tours, and publications such as business reports and annual reports.
The president and the director in charge of investor relations directly visit institutional investors in Europe, North America,and Asia to provide a rundown of business operations, give briefings on earnings performance, and present an explanation

Audit &
Supervisory
Committee

Chair: President
Deputy Chair: Officer responsible for general administration
Members: Members of the Management Committee

Internal
contact
External
contact

Secretariat: General Manager of General Affairs Department

governance structure, and ESG.
(4) The president and the director in charge of investor relations provide adequate feedback on the results of interviews with theaforementioned shareholders and investors to directors.
(5) Fujikura has established a quiet period to prevent the leakage of financial information and ensure fairness. During this quiet

and BCM*1 promotion from each divisionand company. Extraordinary Risk
Management Committee meetings werealso convened to respond to typhoons andof the Mid-term Business Plan. In addition, extensive dialogue is carried out through pertinent visits with investors, allowing
opportunities to exchange opinions on matters such as the agenda of the General Meeting of Shareholders, the corporate

reports on the status of risk management

Fujikura Group and its domestic and overseas Group companies*1 BCM is an abbreviation of Business Continuity Management. BCM refers to a management processduring normal times in preparation for unforeseen events. It includes training and education for
employees and implementing countermeasures in advance.

other disasters, ascertain the conditions of
COVID-19 spread and consider the response,
and to confirm the status of response on thecases of impropriety announced externallyin FY2018.

period, Fujikura does not comment on its financial information and does not respond to questions about this information.
Fujikura also works to prevent the leakage or spreading of important information, and prevent insider trading, under its rules oninternal information management.

Ensuring Tax Transparency
With operations taking place globally, the Fujikura Group prepares to comply with tax rules by constantly gathering BEPS*2
information and concluding consulting agreements with licensed tax accountants. Following the BEPS project on international

Progress on CSR Priority Measures: Information Disclosure and Communication[Assessment]
ESG
Category: Progress exceeded goals: Progress in line with goals

FY2020 Goals

FY2019 Activity Results

1. Survey & analyze ESG information 1. Continue to be included in thecontent
FTSE4Good and Blossom Japan
2. Provide information to
Indexesshareholders and investors
2. Continue to hold ESG meetings with
3. Enhance Integrated Reportinstitutional investors
contents
3. Continue to submit an Integrated
4. Devise ways to communicate
Report showing a high degree
information internally andof improvement, to be selected
externallyfor this by GPIF (Government
Pension Investment Fund) asset
management institutions
4. Hold CSR briefings for Group
companies

Assessment

taxation and pursuant to Japan’s revised tax system of FY2016, we have submitted our master file since FY2016, the initial fiscal
year of application, along with tax reports for each country where we operate, to the tax authorities. Since FY2017, we have been
preparing local files for each applicable transaction.
*2 BEPS stands for Base Erosion and Profit Shifting. It indicates actions by multinational corporations to shift profits to Group companies located in a country with a lower
tax rate to reduce tax burden.

Cyber Security
The Fujikura Group considers cyber security initiatives a top priority in business activities. Fujikura formulated its Basic Policy on the
Security of Electronic Information and Basic Rules on the Security of Electronic Information in 2005.
In FY2019, we held information security training using an e-learning platform. In addition, we conducted a training exercise
using a pseudo email as a way to combat targeted email attacks and make everyone aware of the correct response. At the sametime, we informed employees of how to respond to prevent damage through the company intranet as well, and made efforts toensure thorough compliance.

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66

Foundations for Growth

Governance

1. Be able to provide information disclosurethat is highly rated by the international
community
2. Be consistently selected as a stockcomponent of global indexes
3. Provide information disclosure thatmeets the expectations of stakeholders
4. Regularly engage in communication withstakeholders

FY2019 Plan

: Some goals not achieved ×: Goals not achieved

Compliance

Quality

The Fujikura Group is committed to fair and transparent transactions that abide by the laws, regulations, and rules

The Fujikura Group recognizes that quality is the value that a manufacturing company provides. We have establishedof the countries and regions where we operate, to maintaining sound and normal relationships with government

and are implementing measures to prevent recurrence of cases of impropriety related to quality control and are taking

agencies and other organizations, and to ensuring management and protection of information.

additional steps to strengthen our compliance system.

Internal Reporting

Quality Policy

The Fujikura Group operates an internal reporting system that stipulates
protection, confidentiality, and prohibition of disadvantageous treatment ofwhistleblowers. The purpose of this system is to detect and respond quickly
to fraud/compliance, harassment, violation of work rules, etc. In Japan, an

Number of Internal Reports and Consultations
FY2017FY2018FY201920

37

47

Fujikura Quality Policy (established April 1, 2019)
1. To provide customers with products and services that are of the highest quality by pursuing a management philosophy
based on quality.
2. To ensure that all employees continuously engage in proper conduct related to quality control by complying with all laws,
regulations, official standards, and contracts with customers, based on a strong awareness of the importance of quality
compliance.

external contact has been set up by an external lawyer in addition to theinternal contact, to receive reports from Fujikura Group employees.
For Fujikura Group’s overseas locations, an external professional firm has

3. To always encourage communication within the workplace to foster an open corporate culture, and promptly report tosuperiors when problems in quality compliance are recognized.

been retained to establish an internal reporting contact, in addition to thereporting contact established by each overseas subsidiary.
During the first half of FY2019, we conducted a total of 33 workplacebriefings for around 7,800 Fujikura Group employees at the head office,Strengthening the Quality Governance Structure

plants, branches, and affiliated companies in Japan to give them a deeper
understanding of the internal reporting system.

Anti-Corruption Initiatives
Understanding the need to prevent bribery and corruption in all countries
and regions where the Group operates its business, the Fujikura Grouprevised its Fujikura Group Anti-Corruption Policy on June 1, 2020 to state thatentertainment and gifts should be handled appropriately even when these
do not constitute a legal violation. This policy also regulates compliance inthe supply chain. We perform regular audits of account ledgers and otherAnti-Corruption e-Learning Course
Total no. of participants

4,639

Total number of coursework hours

6,959* An e-learning course (study/test) for officers andemployees is held once a year, at minimum.

documentation and provide e-learning courses to ensure compliance withthis policy.

Anti-Corruption Initiatives in the Supply Chain
The Fujikura Group includes provisions on anti-corruption and exclusion of anti-social forces in the basic business agreements it
concludes with suppliers for the procurement of materials and components.
The Fujikura Group CSR Procurement Guidelines also include provisions prohibiting corruption and bribery and abuse of anadvantageous position to prevent corruption, including among suppliers.

The Fujikura Group implemented organizational reforms on April 1, 2019 and changed the reporting line to have Quality Assurance
report directly to the president.
To strengthen the quality management system and ensure independence of the quality assurance function, Fujikura alsotransferred the quality assurance organizations under the control of each business unit of each company (departments, divisions,and sections) to the Quality Assurance Unit that oversees the quality assurance function in each Company.
The organizations that oversee the quality assurance function in each company were placed under the Corporate Quality
Assurance Department and designated as organizations that report directly to the president.

Quality Management Education
As part of our personnel training plan, Fujikura implements quality
management education for young technicians. The goal is for quality
management training to be “immediately useful” and for trainees to gain
basic competence in practical quality management. Education in statisticalquality management beginning from initial employment is also regarded as
essential to the work of those in research and development .
Also, Fujikura has promoted acquisition of qualifications such as QC
certification since FY2015, and has produced numerous certified personnel
in its efforts to train human resources in quality management.

Quality management training held at the head office

Progress on the Plan of Correction for Cases of Impropriety in Quality Management

On March 22, 2005, we established the “Fujikura Privacy Policy.” This policy stipulates the management system for personal

We are working on Governance Reforms, Proper Understanding of Manufacturing Process Capabilities and Inspection Capabilities
and Verification of Specifications Requested by Customers, and Improvement of Awareness of Quality Compliance based on themeasures to prevent recurrence announced publicly on April 25, 2019.
For Governance Reforms and Proper Understanding of Manufacturing Process Capabilities and Inspection Capabilities andVerification of Specifications Requested by Customers, we have completed establishment of the organizational structure for quality
governance, and are implementing various measures designed to strengthen practical implementation.
For Improvement of Awareness of Quality Compliance, we have been providing training to make sure that everyone understands
the background behind these cases and the reasons why they occurred, and to instill and increase awareness of quality compliance.
We will continue to conduct training to prevent recurrence of such cases and increase awareness.

information protection and compliance matters. We have appointed an executive director as Chief of Personal Information Protectionand established a compliance and operating system for personal information protection by establishing company-wide personal
information protection managers and department personal information protection managers in each department. We are currently inthe process of revising our rules, including the specific response to the General Data Protection Regulation (GDPR) in the EU.

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Foundations for Growth

Privacy Protection

68Inherent Safety

Responsible Mineral Sourcing

In the Fujikura Group, we regard safety as corporate value itself, and are working to strengthen our risk management

The Fujikura Group identifies challenges that need to be addressed in the course of operating our business , including

system to achieve inherent safety.

respect for human rights encompassing the labor environment and safety. We are promoting such efforts, not just in
Fujikura, but the entire supply chain by building relationships of trust with our suppliers.

Establishment of Safety Pledge Day and Promotion of Inherent Safety Activities
In April 2016, a fatal accident occurred at a domestic affiliated company. The Fujikura Group established April 11, the date on which
this accident occurred, as Safety Pledge Day and issued Our Safety Pledge. All employees take the pledge and implement inherent
safety activities to make sure that such an accident never occurs again on this day to demonstrate their strong commitment tosafety. This is done out of a strong desire to make sure that the precious life lost was not lost in vain.
The EHS Management Center is taking the lead on reducing all risks at locations to a tolerable level by the end of FY2020. We areworking to identify and evaluate all risks at each location to achieve this goal.

Our Safety Pledge

Action Taken to Ensure Responsible Mineral Sourcing, Including Conflict Minerals
The Fujikura Group recognizes regional human rights violations, labor problems, and many other risks and illegal acts as serious
social issues related to mineral procurement in conflict-affected and high-risk areas/countries. We promote responsible mineralsourcing across our entire supply chain. We also participate in the Responsible Minerals Trade Working Group established by theJapan Electronics and Information Technology Industries Association (JEITA) and gather the latest information. An information sharing
meeting is held once a year for those in charge of the conflict minerals survey in each in-house company to share and disseminate thelatest information in the Fujikura Group. In FY2019, we shared information on the heightened demand for surveys on cobalt and micain addition to tin, tantalum, tungsten, and gold (called “3TG”) and the contents of our responses on various survey forms.

Initiatives in Responsible Mineral Sourcing Up to the Present- We will never repeat the same accident again!
- We will put safety first in all of our actions!
- We will realize an accident-free workplace for the sake of our coworkers and families!

Promoting Risk Assessment
In the Occupational Health and Safety Management System (OHSMS), proactive activities centered on risk assessment aredesignated as important activities for reducing occupational accidents. We are implementing risk mitigation activities for the risks
already identified to achieve the goal of achieving a tolerable level for all risks by the end of FY2020, set when we began inherent
safety activities. We are also working to identify potential risks which have not yet been recognized along with the risk mitigation
activities. Fujikura views these activities as perpetual activities aimed at fostering a culture of safety.

OHSMS Initiatives
Since we launched our OHSMS in FY2010, we have continued to confirm
the progress made by each of our plants, review the structure, and conduct

August 2011

Fujikura Group Policy for Non-Use of Conflict Minerals formulated

June 2016

CSR Procurement Guidelines formulated

February 2017

Fujikura Group Statement on the Modern Slavery Act and Human Trafficking establishedMay 2019

CSR Procurement Guidelines updated to Ver. 4 (to conform to RBA)May 2019

Fujikura Group Policy for Responsible Mineral Sourcing formulated

Communication with All Suppliers
The promotion and penetration of CSR procurement requires
direct dialogue with suppliers. The Fujikura Group hosts
the Fujikura Group Partners Meeting in Tokyo, Shanghai,
and Bangkok every year to obtain the understanding andcooperation of suppliers and work toward CSR procurement
across the entire supply chain.
In addition to this, FETL in Thailand has selected suppliers
that have received high acclaim in the supplier assessment
system and commended them at the Partners Meeting in
Bangkok since 2016. We are building stronger partnerships by
sharing best practices with our business partners.

Matters Shared at Partners Meetings• Fujikura Group business plan
• CSR Procurement Guidelines• Important ESG-related themes (importance of human rights
due diligence in the supply chain and providing information
on measures to combat climate change, etc.)• Selection and commendation of excellent suppliers (by FETL)

site safety patrols. This has improved the level of safety. The Inherent Safety
Promotion Department (now the EHS Management Center) has visited theCommendation of excellent suppliersin Thailand

locations of Group companies in Japan since FY2016 and the locations of Group
companies overseas since FY2018. It conducts safety patrols to instill our view

Progress on CSR Priority Measures: CSR Supply Chain Management

Management Center conducted safety patrols at 40 Group company locations in[Assessment]

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Fujikura Group Integrated Report 2020

On a safety patrol: Progress in line with goals: Some goals not achieved ×: Goals not achieved

ESG
Category

FY2020 Goals

FY2019 Plan

FY2019 Activity Results

SocialJapan and 16 Group company locations overseas in FY2019.

: Progress exceeded goals

1. The Partners Meetings in in-housecompanies and main Group companies
are held and managed appropriately
2. A partner survey is conducted andappropriately evaluated
3. The Fujikura Group CSR Procurement
Guidelines are being complied with
4. Risks are recognized and successfully
managed in in-house companies andGroup companies

1. Hold Group Partners Meetings.
2. Promote partner CSR
3. Promote ensuring humanrights in the global supply
chain
4. Consider CSR/SCM audits
5. Consider introducing a
supplier portal

1. Ongoing in Japan, China, and Thailand
2. Ongoing surveys in Japan and China
3. CSR Procurement Guidelines revisedand continue to request compliancewith human rights policy at Partners
Meetings
4. A survey of Group companies in Japanwas conducted but the SCM audit has
not been completed
5. Introduced according to plan

Assessment

Fujikura Group Integrated Report 2020

70

Foundations for Growth

on inherent safety and check on safety activities at each location. The EHS

Explanation of procurement situation to
suppliers in JapanRisks and Opportunities of Climate Change
The Fujikura Group established Fujikura Group Long-term Environmental Vision 2050 in 2016 as our long-term vision
on responding to climate change. We are working on four challenges aimed at minimizing negative environmental
impact by the future target of 2050.

Disclosure of climate change-related information according
to the TCFD statement
The Fujikura Group indicated support of the statement published by the Task Force on Climate-Related Financial Disclosures (TCFD)
in 2017. We contribute to realizing a sustainable society by analyzing the risks and opportunities created by climate change andFujikura Group Policy on Responding to Climate Change

disclosing these to stakeholders.

The response of the Fujikura Group began with the establishment of the Fujikura Group Global Environmental Charter in 1992.
It specifies our policy on environmental activities that are consistent with our management strategy, which we formulated
by referencing the forecasts of external institutions. In 2016, the Fujikura Group performed a scenario analysis using theIntergovernmental Panel on Climate Change (IPCC) RCP 2.6* (a scenario of a 2°C increase in temperature) and established Fujikura

Climate Change Governance and Risk Management(including CSR management)Group Long-term Environmental Vision 2050. We are working on four challenges aimed at minimizing negative environmental

Climate change governance in the Fujikura Group is overseen globally by the Global Environment Committee (chaired by the

impact by the future target of 2050.

officer in charge of the environment), which is an environmental subcommittee in the Sustainability Strategy Council. The Global* RCP 2.6: The Fifth Assessment Report of the IPCC (published in 2014) details four scenarios of how much the average temperature will rise over the
next 100 years. This is the lowest temperature increase among the four scenarios.

Environment Committee is the deliberative and decision-making body for environmental management, including climate change.
the Fujikura Group Sustainability Strategy Council, upon approval of the officer in charge of the environment. The committee

History of Climate Change Initiatives

establishes specialty subcommittees for key themes, formulates measures and rolls out countermeasures cross-organizationally, andprovides various other kinds of support.

Apr. 1992

Established the Fujikura Group Global Environmental Charter

Jul. 2012

Began responding to CDP Climate Change questionnaire

Apr. 2013

Revised the Fujikura Group Global Environmental Charter (to add protection of biodiversity)

Board of Directors (chaired by the president)

Apr. 2016

Enacted Ver. 5 of the Fujikura Group Environmental Activity Guidelines (FY2016 to FY2020)

Jul. 2016

Established Fujikura Group Long-term Environmental Vision 2050

Jul. 2017

Began responding to the CDP questionnaires on water and the supply chain

Apr. 2019

Became a supporting member of the Japan Climate Leaders’ Partnership (JCLP)

Jul. 2019

Became a TCFD supporter (Task Force on Climate-Related Financial Disclosures)

Oct. 2019

Joined the RE100 global corporate leadership initiative

Administrative Office(Corporate Communications Div.)WE SUPPORT

Sustainability Strategy Council (chaired by the president)

1

Global Environment Committee, meets twice a year
(Committee lead: Officer in charge of the environment)

Green Product Management Committee,
meets every other month(Committee lead:
General Manager of Corporate R&D Unit)

Challenge

3

Symbiosis between
plant workers
and nature
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Fujikura Group Integrated Report 2020

2

Minimize use of waterat plants and wastewater
management
Challenge

4

Effective use of resources
and resource cycle• Implements overseas global environment
protection activities, formulates annual andmedium-term goals, including climate change
goals, and monitors progress toward achieving
these goals.
• As the screening organization for Green products
awarded the Green Project logo and Green Mind
products, the committee uses a proprietary checksheet and approves and registers products thatmeet or exceed the standards.

Sharing and Instruction

Corporate units, in-house companies, Group companies
Foundations for Growth

Zero CO2 emissionsat plants by 2050

ReportChallenge• Shares and deliberates on policies and measures
for Fujikura Group ESG activities.

ReportThe Four Challenges in Fujikura Group Long-term Environmental Vision 2050
Challenge• Makes decisions on main action plans, reviews
matters, and provides guidance.
Monitors and supervises climate change response
goals and progress on achieving those goals.

Executive Officers Meeting (chaired by the president)

Signed the United Nations Global Compact

Sep. 2013

It formulates goals for each fiscal year as well as medium-term goals and monitors progress on activities while also reporting to

FY2019 Initiatives• Produce a road map for the introduction of renewable energy.
• Begin purchasing renewable energy at the Kabin Buri plant of FETL,a Group company, in Thailand.
• Convene the Energy New Strategy Working Group (every other month).

Floating solar panel installed in the reservoir inside FETL’s
Kabin Buri plant

Fujikura Group Integrated Report 2020

72

Risks and Opportunities of Climate Change

Opportunities

Specifying Climate Change-Related Risks and Opportunities
The Fujikura Group is working to specify the risks and opportunities that could materialize in the process of transitioning to a low-

IndividualBusinesses

carbon economy. We are analyzing what kind of impact climate change will have on growth of Fujikura Group businesses, basedon the long-term forecasts of international research institutions (OECD, IPCC), social concerns, and requests for response to climatechange from customers. The specified risks are reviewed as appropriate.

Risks
Type

Climate Change Risk
[Policy/Legal Risk]• Stricter CO2 emissions regulations in various countries
through the introduction of a carbon tax, etc.
- Trial calculation of financial impact from a carbon tax• Demands from customers and the countries Fujikura
operates in and obligation to reduce greenhouse gas
emissions and our carbon footprint

2°C Scenario(Migration
Risk)
Short Term/
Medium Term

[Technology Risk]• Disruption of existing technology• Demand to minimize energy consumption during productmanufacturing or use renewable energy

Future Response• Following the road map to 100% renewableenergy, move forward with extensive use ofenergy savings, introduction of renewableenergy, credits, and other tools based on
Fujikura Group Environmental Long-term Vision
2050• Pursuing use of renewable energy in businessactivities (at head office, plants, etc.)• Strengthening response by joining the RE100
and affirming TCFD, and regularly monitoring
and responding to ESG rating indicators[Market Risk]• Changes in demand for products and services• Temporary increase in capital investment cost from climatechange countermeasures requested by customers or thecommunity• Rising raw material prices and diversification of suppliers
from climate change-related factors

Power

Telecommunication
Systems

Electronics[Reputation Risk]• Demands for information disclosure on and response to
climate change by customers, investors, and various ratingorganizations[Chronic Risk]• Health considerations for employees who work in the areaof operation due to a rise in the temperature, or otherchanges• Securing the safety of employees due to an increase in theamount of rainfall• Impact on operations from a future rise in sea level• Disaster preparedness/prevention response for
affected locations- We used the lessons learned from the damage
caused by the 2011 flooding at FETL in
Thailand and implemented measures such as
diversifying locations and building a floodwall
near the business, from the perspective of BCP• Slope face maintenance around office sites andresponse to high tides and tsunami at plants
near the ocean* Domestic locations that would be impacted byflooding and a rise in sea level
Head office, Fujikura Engineering Ltd., FUJIKURAHIGH OPT Co., Ltd. (Kiba, Koto-ku, Tokyo),Suzuki Giken Co., Ltd. (Tajiri, Ichikawa-shi,
Chiba Prefecture), Numazu Copper Refining
and Rolling Co., Ltd., Nishi Nippon Electric Wire
& Cable Co., Ltd. (Kasugaura, Oita-shi, Oita
Prefecture)* Researched the hazard maps of the various local
governments

Automotive
Products

Real Estate

Opportunities• Increase in demand for power, especially electric power
demand, mainly in developing countries due to economic
growth, urbanization, population growth, and other factors• Power supply stabilization, increased efficiency, andprogress on energy savings under the 2°C scenario throughthe use of digital technology• Diversification of both power supply and demand forcompanies, individuals, etc., and increase in renewableenergy use under the 2°C scenario• Increased concern over natural disasters under the 4°C
scenario• Response to the Act on Promoting the Elimination of Utility
Poles (disasters, etc.)[Market]Proliferation and expansion of renewable energy[Products/Services]
Expansion of Green products[Energy Sources]
Products related to highly efficient electrical powersystems• Promotion of digital technology use[Resilience]Strengthening the resilience of social infrastructuresuch as electrical wire and cable• Exponential growth in data distribution, storage, andanalysis volume due to the advancement of digitalization• Rapid expansion in new service businesses that use digitaltechnologies such as big data, IoT, 5G, and AI• Advancement in CASE/MaaS• mmWave (wireless communication)• Concerns over response to natural disasters under a 4°C
scenario[Products/Services]
Roll out of solutions mainly for high density, smalldiameter optical cable (SWR®/WTC®)[Markets]
Expansion of Green products (FY2018: ¥21 billion)• Products for highly efficient IT systems• Promotion of digital technology use• Strengthening the resilience of communicationlines as social infrastructure• Increase in industrial robots• Entrance into medical products• Increase in automotive electronic components• Increase in mmWave-capable components• Pursuit of R&D for CASE
• Promotion of digital technology use• Expansion in Green products (FY2018: ¥16.5 billion)• Increase in demand for industrial andautomotive connectors

CASE advances• Increase in wire harnesses accompanying increase inelectronic components• Advancement of move to electric vehicles under a 2°C
scenario• Increase in demand for lighter wire harnesses• Lighter wire harnesses• Pursuit of R&D to respond to CASE
• Combining knowledge of the automotive
products business with the telecommunication
systems, power, and other businesses to generate
new businesses related to electric vehicles• Strengthen response to automotive components
other than wire harnesses and electric vehicles• Expansion of Green products (FY2018: ¥70.2 billion)

Promotion of digital technology use• Need to consider the positive environmental impact of ZEB
and other measures, etc.

• Securing and maintaining tenants that demandenvironmental friendliness

Risk Management
The Fujikura Group Global Environment Committee chaired by the Sr. Vice President in charge of Environment approves and makes
decisions on response to specified risks and future considerations. In addition to reporting on the results of activity plans specified
in the CSR Priority Measures, the Fujikura Group Global Environment Committee shares information, and considers and approves
response proposals. It reports to the Fujikura Group Sustainability Strategy Council.
The committee also enters, evaluates, and analyzes data on the electricity usage, water usage, and waste generated by eachlocation of the Fujikura Group. The results are confirmed at Fujikura Group Global Environment Committee meetings twice a year
and plans are revised.

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Foundations for Growth

4°C Scenario(Physical Risk)
Short Term/
Medium Term

[Acute Risk]• Impact on operations from flooding, a large typhoon, orother natural disaster- Impact on business results if a production facility isdamaged and this reduces operating capacity or requires
equipment restoration, etc.
- Impact on production plans due to partial severance ofthe supply chain→Fujikura Group companies suffered massive damage fromflooding in Thailand in 2011, and it took five years to recoverSocial Trends

Risks and Opportunities of Climate Change

Expansion of Environmentally Friendly Products

Ascertaining the Financial Impact

The Fujikura Group specified implementing initiatives that contribute to both the environment and society and working to enhance

In FY2018, we did not see any direct impacts on our business from phenomena considered to be caused by climate change. Fujikura

corporate value as one of the basic policies of the 2020 Mid-term Business Plan and specifies strengthening initiatives in ESG,

made the following investments to prepare for the risk of suffering future damage.

including response to climate change.

Fujikura’s Sakura Works experienced slope failure due to torrential rain in the past. In recent years, the number of torrential

We are developing environmentally friendly products (Green products) to contribute to the achievement of a low-carbon
society by reducing resource use, saving energy, and other measures, which contributes to profitability.
The Green Product Management Committee screens
Green products using the product environmental

rain events has increased due to climate change, and we performed slope face maintenance from FY2016 to FY2018 (at a cost of¥380 million). We are anticipating around ¥200 million in maintenance costs in FY2019 on top of this.
The Oita plant of Nishi Nippon Electric
Wire & Cable faces Oita Bay and carries theGreen Products

assessment check sheet submitted by each businessdivision, and registers products that meet or exceed
the standards as Green Mind products. The productenvironmental assessment check sheet was codified
in 2011 and is updated regularly. The Green ProductGreen Products Awarded
the Green Project Logo
Products and services achieving
significantly higher environmental
performance through reductions inresource use and energy, etc.

risk of suffering damage from high tides andtsunami during typhoons. To address thisrisk, we built a new office building capableof serving as an evacuation center for 500
people in FY2017 (at a cost of ¥460 million).

Management Committee is chaired by a member of
the Corporate R&D Unit, and committee members are
selected from each Company.
The goal for registering Green products is set at 60
products or more a year. In FY2019, there were 68 Greenproduct registrations, amounting to 40% of net sales.

Slope face construction at Sakura Works

Green Mind Products
Products and services assessed asachieving higher environmental
performance than conventional productson the environmental impact assessment

Tsunami evacuation tower at Nishi Nippon Electric
Wire & Cable

Goals and Results of CSR Priority Measures
We formulated the CSR Priority Measures having FY2020 as the final fiscal year, which is the same as for the Mid-term Business Plan,
based on the Fujikura Group CSR Basic Principles and the four focus areas in order to link these measures with the management

Product Introduction 1

Compact Oxygen Sensor

Fujikura developed the FCX-UWL compact oxygen sensor. It is compact, lightweight,
and portable, and will be used mainly in oxygen concentration devices in the future. It
is 40% shorter and 20% lighter than conventional products, and is contributing to thestrategy. The following three measures were set for the environment and we are working to achieve the FY2020 goals.

Environmental Goals in the CSR Priority Measures
ESG
Category

CSR Priority
MeasureThin DSC Module Panel for Sensing Systems

encapsulation technology have simplified DSC module panels to a substantial degree.
Such simplification has increased the degree of freedom in placement of the sensing
system and is expected to expand the purposes for which the product is used.

Environment

cell can generate power in the shade or indoors, and improvements in electrolyte

Assessment

Foundations for Growth(2) Water risks

1. Setting goals and implementing
1. Improvement in water 1. (Domestic) 20.1% improvement in
improvements for the amount ofusage per base unit:
water usage per base unit (net sales)water used
(Domestic Group) 1%
compared to previous fiscal year
2. Implementing water risk valuation
or more compared to 2. Confirmed risks by checking
and risk minimization
FY2018government hazard maps, and
3. Reply to “CDP Water,” receive
produced a flooding/high tide risk
evaluation
list for domestic locations
3. CDP water score: B-

through this product.

energy self-sufficiency without battery replacement or power supply wiring. This solar

FY2019 Activity Results(1) CO2
Emissions
Reductionis contributing to the improvement of health and QOL (quality of life) of many people

A DSC (dye-sensitized solar cell) is an energy-harvesting IoT device that provides

FY2019 Plan

1. Reduction in total CO2 emissions
1. Reduction in total CO2 • Fujikura Group Long-term
1) Fujikura and affiliated domestic
emissions
Environmental Vision 2050 road map
companies: Reduction of 3%(Fujikura and affiliatedcompleted, joined RE100, and received
or more (compared to FY2013)
domestic companies)
a CDP climate change score of A(FY2030 Long-term goal:
2.4% or more
(Domestic)
Reduction of 6.5% or more)compared to FY2013
Fujikura: 18.9% reduction (emissions
2) Overseas affiliated companies:(Overseas affiliatedvolume, 80,900 tons of CO2)
Improvement of 1.3% or morecompanies)
Domestic Group: 5.9% reduction
per year in CO2 emissions
Improvement of(emissions volume, 63,400 tons of CO2)
intensity per base unit
3.9% or more per(Overseas Group)(compared to FY2014)
year in CO2 emissions
Intensity per base unit: 9.2%
intensity per base unit
improvement (emissions volume,(compared to FY2014)
257,000 tons of CO2)

increasing reduction in the size of oxygen concentration devices. The Fujikura Group

Product Introduction 2

FY2020 Goal

1. The on-premises green activities
1. Effective use of
1. Began Kiba Millennium Woodsof the Fujikura Kiba Millennium
nature in the business“Create a 1,000-year forest”
Woods, Sakura Millennium Woods,
premises
campaign, raised awareness among
and Suzuka Millennium Woods are 2. Pursuit of initiatives in
employees, and posted the activities
popular among employees
biodiversity
in a series of workplaces each month(3) Biodiversity
2. The preparations to open to
3. Pursue the concept
on the company intranet (12 times)
Conservationneighboring citizens wereof a satoyama natural 2. Completed the Sakura Millennium
completed at Sakura and Suzuka,
area on business
Woods Project, continued
and the plan for communicating
premisesmaintenance activities, andwith those citizens was also
continued to provide recreation
completedactivities with employees

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Human Resource Development

Health Management

The Fujikura Group requires talent that can play an active role globally in order to continually develop innovative and

The Fujikura Group believes that corporate competitive strength is based on good employee health. We recognize

highly useful products and solutions. Human resource development activities targeted at this are an important pillar ofthat the health of our employees is an important management resource and pursue initiatives aimed at improving

management that will pave the way for the Group’s future.

employee health.

Our Approach to Human Resource Development

Development of @Switch! (“At Switch”) App, a Next-Generation Management Solution

Workplace
OJT

Employee(self-development)
Motivation

Careerdevelopment

Training
programs

Personnel
systemHuman resource development involves a continual cycle that connects

Fujikura Social Health Research Institute Ltd. was established in 2019 to advance healthdevelopment and evaluation, focused mainly on on-the-job training (OJT)

management in the Fujikura Group. The institute developed the @Switch! app to linkin each workplace, based on the Fujikura Group HRM Vision. The individual

employees and their families through the keyword of health.

employee and his or her superior identify and share the individual’s

In addition to managing their own health by logging data on daily activities and foodstrengths and weaknesses, and expand on the strengths while improvingon the app, @Switch! is an SNS platform where employees can meet others and see their

the weaknesses. This is a total system of human resource development thatideas. It is a next-generation health management solution that enables people who havelinks efforts to further growth.

diverse lifestyles to gain new insights on their own timing at the location, time, and place

A career challenge system has also been introduced. It was built on

OFF-JT

internal public recruitment that makes it easy for an individual to implement
Fostering a culturethat develops its human capitalhis or her own career plan. This fosters autonomy.

of their choosing, and easily turn their own self-transformation switch on.
By creating this app and enhancing various health promotion programs, the Fujikura
Social Health Research Institute Ltd. is providing society with the power to become
flexible and strong in a stressful society and changing times.

Human Resource Development Programs
Theme

Program Details

1) Career start-up assistance

1. CareerDevelopment
Assistance• Group training (group training for employees in their first or second year withthe company starting out their career)• Individual programs led by mentors (OJT)
A system is in place to work with supervisors to identify the necessary knowledge
and skills for each career stage and role through evaluations, to create individualcareer development plans, and to select from a wide range of training programs
suited to individual needs (outside group training, e-learning, correspondence
education, etc.)

2) Elective training

Examples: Logical thinking, communication skills, problem solving, team andorganizational management, business administration, language, and IT@Switch! information sharing and participation
platform

Initiative 1

Employee Health Improvement Program

Periodic physical examinations are used to determine self-health level anddisease risk and is the basis of voluntary health promotion. Examinations
are carried out by adding our own check list of items to the statutory
check list. Additional items we add to the check list are aimed at the early
detection of lifestyle diseases. Guidance on prevention management

3) Next-generation managementcareer support (selective training)

Leadership training that develops leaders in individual fields and intensive
management training to develop the executives of tomorrow4) Lifelong learning programs

Life planning seminar for employees several years prior to retirement and postretirement job placement services for employees who desire to continue working

and individual health awareness is also provided to employees who have

2. Compliance-related programs

Various kinds of training on an individual’s corporate social responsibilities as amember of the company (fair trade, export control, labor relations, etc.)

3. Operational specialist-related programs

Specialized education conducted by relevant departments in charge, covering
topics such as quality, manufacturing, intellectual property, legal affairs, labor,
and accounting

many factors with high risk of onset. We are implementing initiatives
aimed at improving the health consciousness of our employees.
We participated in the corporate games again in FY2019.

Initiative 2

Measures to Prevent Second-hand Smoke

to completely prohibit indoor smoking areas by the end of FY2023. We

Progress on CSR Priority Measures: Global Human Resource Development[Assessment]
ESG
Category

Social77: Progress exceeded goals

CSR Priority
Measures(6) Global
Personnel
Growth: Progress in line with goals

are taking steps to eliminate smoking areas in stages and restrict the: Some goals not achieved ×: Goals not achieved

FY2020 Goals

FY2019 Plan

FY2019 Activity Results

1. The “Fujikura Group HRM Vision” isjointly created and shared by thegroup to work toward common goals
2. We are becoming a “company with adream” as we respect employees anddevelop appealing personnel globally

1. Overseas language
training program
2. Build a Group humanresources platform

1. None in this fiscal year
2. Introduction of the system tooverseas Group companies
continues

Fujikura Group Integrated Report 2020

Foundations for Growth

To prevent the inhalation of second-hand smoke by employees, we aim

operating hours of smoking areas.

Assessment

Smoking cessation seminars are also being held in each businesslocation to reduce health risks associated with smoking and the company
is subsidizing the cost of smoking cessation therapy.

○
A smoking cessation seminar

Fujikura Group Integrated Report 202078

Respect for Human Rights in Business Activities

Practicing Human Rights Due Diligence

As a signatory to the UN Global Compact, the Fujikura Group works to support the protection of human rights and stand against

Based on the Fujikura Group Policy on Human Rights, the Fujikura Group takes steps internally to address human rights

human rights violations so that the human rights of people impacted by our business activities are respected.

issues when they emerge through the company’s internal reporting system and Partners Meetings with suppliers.
The practice of human rights due diligence is now required to protect human rights and ensure transparency inprocurement, manufacturing, and other business activities. In FY2019, we worked to build a human rights due

Philosophy and Policy on Human Rights

diligence framework based on the procedures outlined in the Guiding Principles on Business and Human Rights.

The Fujikura Group Policy on Human Rights expresses the responsibility to

Fujikura Group Policy on Human Rights Provisions

respect basic human rights stipulated in the Universal Declaration of Human

1

Respect for International Standards

In addition, we strive to promote understanding and the actualization2

Responsibility for Respecting Human Rights

of human rights and reference international norms such as the International

3

Scope of Application

Labor Standards, the International Labour Organization’s Declaration on

4Compliance with Applicable Laws and Regulations

5

Human Rights Due Diligence

6

Promotion

7

Dialogue and Consultation

8

Disclosure of Information

Rights and elsewhere during the course of our business activities globally.

Fundamental Principles and Rights at Work, and the OECD Guidelines forMultinational Enterprises and the Guiding Principles on Business and Human
Rights established by the UN as we establish policies and measures onhuman rights.

Specifying and Regular Examination of Potential Human Rights Risks
The Fujikura Group uses international guidance on human rights, surveys from customers, and questionnaires from ESG rating
institutions to establish human rights risks that could materialize through business activities and carefully examine them on aregular basis.

Potential Human Rights Risks Associated with Fujikura Group Business Activities
Business Activity

Procurement

Human Rights Risks

Child labor, forced labor, abuse of
superior position, discrimination,
non-payment of wages, wrongfuldismissal, safety and health, etc.

Occupational health and safety,
labor-management relations,foreign workers, freedom of
association, harassment, etc.

Human rights violations due
to product safety and quality,
unintended use, etc.

Suppliers
Local communities

Group employees

Customers
Local communities

Labor-Management Relationship Based on Sufficient Consultation
Stakeholders

We recognize that freedom of association and the right tocollective bargaining are fundamental human rights. In labor
agreements concluded between Fujikura and the Fujikura

Impact on Business

Impact on stable procurement andReduction in engagement
risk of customer losses

Risk Assessment

Communication with suppliers
through Partners Meetings andconducting surveys

Labor Union, we acknowledge that the labor union has theright to organize, the right to collective bargaining, and theright to strike. In order to keep labor union members fully

Manufacturing

informed, we also hold briefing sessions and consultation

Sales

Damage to brand value

Use of the internal reporting
system, internal audits by aUnderstanding trends in legislation
specialized department, responses concerning human rights
to RBA audits from customers

meetings on management policies, business plans,management measures, and business measures. In addition,
management and union members engage in frank exchangesof opinions, striving to deepen mutual understanding andInitiative 1

Labor-management workshop

resolve any issues or disputes when they arise.

The Fujikura Group aims to build long-term, sustainable relationships with customers and responds to sustainability surveys, RBA

Opportunities for Communicationquestionnaires, on-site audits, and other requests by customers. We focus our efforts on RBA audits in particular, take any findings• Labor-management workshops (annually): MVCV, labor• Briefing sessions (held twice annually)

union policies, etc.

• Consultation meetings (held monthly and as needed):
Quarterly financial results, monthly profitability, production

correction of human rights risks in business activities.

sharing of opinions with labor-management of affiliatedcompanies

Initiative 2

Social79

CSR Priority
Measures

FY2020 Goals

1. Becoming a company where
personnel from varied nationalities,
races, genders, religions, ages, and(4) Respecting
origins can work and excel
human rights 2. The entire Fujikura Group properly
understands harassment and fosters
a non-permissive/anti-harassment
cultureFujikura Group Integrated Report 2020

respond to social demands. We extract the issues in actions, information disclosure, and other things demanded of the company by: Some goals not achieved ×: Goals not achieved

analyzing the different ratings by each ESG rating organization. This leads to stronger management infrastructure.

FY2019 Plan

FY2019 Activity Results

Assessment

1. Enhance harassment
education
2. Strengthen
management of workhours

1. Made sure that everyone
understands the laws on
harassment and revisede-learning content
2. Introduced a variable
working hours system andworked to respond to laws
related to workstyle reform○

Fujikura Group Integrated Report 2020

80

Foundations for Growth

ESG
Category: Progress in line with goals

Using Surveys from ESG Rating Organizations to Determine Social Demands

The Fujikura Group actively responds to surveys received from ESG rating organizations to determine actual conditions andProgress on CSR Priority Measures: Respect for Human Rights: Progress exceeded goals

received seriously, and respond quickly. This enables us to earn the trust of our customers and leads to the identification and• Collaboration with affiliated companies (held as needed):situation, labor situation, and labor conditions, etc.

[Assessment]

Responding to Questionnaires from Customers and RBA Audits

Special Initiatives of the Fujikura Group

Supporting Fujikura Gakuen
Our support of Fujikura Gakuen forms part of the Fujikura Group’s social contribution activities. The goal is to support
its users, namely children with cognitive disabilities, in developing physically and mentally in a wholesome mannerand gaining essential skills for living independently in the local community while preserving their dignity.

Main Supporting Activities
Support is provided through fundraising donations, volunteer activities, and product sales, which also contribute to fostering theright mindset (thinking, action, and belief ) for each individual employee.

Presenting Donations
from the Works

Group company donations

Fujikura Sakura Works conducts fundraising
activities in support of Fujikura Gakuen every year
in December. In fiscal 2019, the funds raised wereagain presented to the head of Fujikura Gakuen. The
business office will continue its support activities in
the future.

Fujikura Components Ltd. has begun donating
funds to support Fujikura Gakuen. The president
visited Tama Fujikura Gakuen to deliver the donatedfunds. His tour of the facility and interaction withusers led him to resolve to continue supporting
Fujikura Gakuen.

We distribute cookies made at Fuji Café, which isoperated by Fujikura Gakuen in Izu Oshima, to those
who come to the General Meeting of Shareholders
to help our shareholders understand our efforts insupport activities.

Presentation of funds donatedDistribution to General Meetingof Shareholders attendees

Presenting the collected
donations

Distributing Fuji Café products at
the General Meeting of Shareholders

What is Fujikura Gakuen?
Fujikura Gakuen, a social welfare corporation, was founded on June 7, 1919 in the town ofMotomachi on Izu Oshima. Harukichi Nakauchi, the blood brother of the founder Zenpachi
Fujikura, donated a sizable amount of his personal assets (currently worth approximately 2 billion
yen) and 40,000 tsubo of land (approx. 132,000 m2) on Izu Oshima for the land and building toestablish the school and residence for mentally handicapped children and adults. Today, Fujikura

Distributing
Fuji Café products at
the General Meetingof Shareholders

Fujikura Gakuen Circle of Support

workers who provide 24-hour care and education to approximately 130 individuals.
employees have donated their own money, too, in supporting the organization to continue its

Purchase of
Fuji Café products
within the Group

Group company
donations

Gakuen has facilities on Izu Oshima and in Tama (Hachioji City). These facilities have around 100
Since its inception, the Fujikura Group has made donations as a company and its individual

Corporate
donationsSupporters Club
(wage deductions)On-site Fuji Café
product sales

Works donations

operations. The support provided to Fujikura Gakuen is considered the focal point of the Fujikura
Harukichi Nakauchi,
founder of Fujikura Gakuen

Group’s social contribution activities, and this support will be sustained going forward.

Employeedonation drive

Vending machines
donations
Volunteering
by new employees
Seconding officers

Established

1919
81

Fujikura Group Integrated Report 2020

Fuji Café, operated by Fujikura Gakuen

Facilities

2

locations

Izu Oshima, Tama (Hachioji City)

Employee donation drive

Volunteer activities of new employees

On-site sale of Fuji Café products

We held a donation drive for cloth, writing supplies,
and other items for Fujikura Gakuen at Fujikura’shead office. The items donated by employees weresent to both Fujikura Gakuen facilities in Tamaand Izu Oshima. We will continue to support these
Fujikura Gakuen facilities according to their needs.

Each year, newly hired employees participate involunteer activities at Tama Fujikura Gakuen as
part of their new hire training. These activities
enable new employees to foster bonds with
their colleagues, appreciate the mission of theGroup’s founders, and recognize the importance of
supporting Fujikura Gakuen.

Located in Izu Oshima, Fuji Café is a living assistancecenter where students of Fujikura Gakuen undergo
vocational training to gain independence. The Fuji
Café exhibition and sale, which features products
made by Fuji Café (pound cakes, cookies, etc.),
has been hosted at the Fujikura head office withongoing support.

No. of clients

Approx.

130

Some of the items donated

Painting

On-site sale held twice a year

Fujikura Group Integrated Report 202082

Foundations for Growth

Fujikura Gakuen in Izu Oshima

Participationin events(founding festival,
Christmas)

Special Initiatives of the Fujikura Group

Fujikura

Kiba Millennium Woods

Communication with Local Residents

Wildlife and Plants in Fujikura
Kiba Millennium Woods

PlantsFish● 80 species native to the Kantoarea; 500 tall and medium-sizedtrees, 2,000 shrubs
● 65 grass, moss, and aquaticplant species; approx. 15,000
plants● Limited to fish, shrimp, andshellfish in the Arakawa
watershed● Approximately 800 fish of
10 different species werereleased; there are now around
1,300 fish

Birds
● Around 20 species, including

the common kingfisher,brown-eared bulbul, andspotbilled duckInsects● Over 50 species of dragonflies,

At Fujikura Kiba Millennium Woods, we place importance on active
communication with employees and members of the community. The
woods are mainly used for educational activities to raise environmental
awareness among employees and nature education for local
elementary schools, as well as government-sponsored ecological tours.

butterflies, and other insects
spottedBird’s Eye View
Walking path around the water’s edge
(Koto-ku)

Features

Upper
pond

Lower
pond

Built in
Area:

Open path

Fujikura’s Resolve to Protect Biodiversity
The Fujikura Group is keenly aware of the close relationshipbetween its business activities and the global environment, andhas set the goal of being a corporate group that is good for bothpeople and the environment and strives to make every effort toprotect the global environment. All living things live by mutually
supporting one another either directly or indirectly, and our lives
and lifestyles are supported by the many blessings generated
through biodiversity. The Fujikura Group formulated “Roadmap
2030: A Long-Term Vision for Biodiversity” in January 2013 and ispursuing initiatives aimed at increasing every employee’s awarenessof protecting biodiversity.

Fujikura Kiba Millennium Woods Createdas a Symbol of the Local Community

83

Fujikura Group Integrated Report 20202010

2,200 mLimited tonative species

2

Used for government-sponsoredecological tours.

Educating Employees in Environmental
Awareness
Fujikura is conducting a campaign to have employees fromindividual divisions go to the Fujikura Kiba Millennium Woods at
the head office each month and learn about the Fujikura Group’s
initiatives in biodiversity.
We have disclosed the Fujikura Group Long-term Environmental
Vision 2050 and are pursuing solutions to environmental issues.
Increasing the environmental awareness of employees is importantin order to be a sustainable company, and we are using the Fujikura
Kiba Millennium Woods as an opportunity to educate employees inenvironmental awareness.

Employees who visited the Millennium Woods

Certified as Edo-Midori Green Area
Registration (Excellent Green Area)
In 2017, Fujikura Kiba Millennium Woods was registered as a goodgreen area under the Edo-Midori Green Area Registration. Thissystem restores the environment suitable for the creatures of Tokyo,
including wildlife such as insects and birds, by planting vegetation(native species) naturally distributed in Tokyo on the premises ofbuildings, etc. Fujikura was registered because of its participationin the Edo Green Restoration Program,a project to plant native species being
implemented by the Tokyo Metropolitan
Government as a public-private
partnership, where relevant industries
join together to formulate measures for
spreading native species in Tokyo.

Fujikura Group Integrated Report 202084

Foundations for Growth

When we redeveloped the grounds of our head office in November
2010, we opened a biotope and garden called Fujikura Kiba
Millennium Woods next to our head office in response to requests
from local schools and citizens for more greenery and the increasing
interest in biodiversity.
The name, Fujikura Kiba Millennium Woods, incorporates thehope shared with everyone in the Kiba area of Koto-ku that theabundance of nature will persist in the future for 1,000 years.
Fujikura Kiba Millennium Woods covers 2,200 m2 and contains
two ponds and a river that connect them, a floating island, walking
paths, and other features. We gave preference to native species
in designing it to replicate the abundant forests and woods thatexisted in the Musashino plateau several hundred years ago, as aspace dedicated to wildlife. The woods have now grown enough forthe chicks of the spotbilled duck and the common kingfisher to fly
out of their nests.

Use for nature educational activities for
local elementary school children

Corporate Profile
Corporate Profile

Stock Information (as of June 30, 2020)

Company name: Fujikura Ltd.

Capital:Founded:February 1885

Headquarters: 1-5-1, Kiba, Koto-ku, Tokyo 135-8512

Established:

March 1910

53 billion yen (as of March 31, 2020)

Thailand

FUJIKURA HIGH OPT Co., Ltd.

Fujikura Electronics (Thailand) Ltd.

Fujikura Components Ltd.

DDK (Thailand) Ltd.

Fujikura Solutions Ltd.

Fujikura Automotive (Thailand) Ltd.

DDK Ltd.
Tohoku Fujikura Ltd.

East, South, and Southeast Asia

Nishi Nippon Electric Wire & Cable Co., Ltd.

Fujikura Asia Ltd.

Numazu Copper Refining and Rolling Co., Ltd

Fujikura Federal Cables Sdn. Bhd.

Fujikura Shoji Co., Ltd.

PT Fujikura Indonesia

Fujikura Precision Ltd.

Fujikura Asia (Malaysia) Sdn. Bhd.

Fujikura Automotive Asia Ltd.

Fujikura Electronics Vietnam Ltd.

Suzuki Giken Co., Ltd.

Fujikura Fiber Optics Vietnam Ltd.

Fujikura Engineering Ltd.

DDK VIETNAM Ltd.

Precision Fiber Optics Ltd.

Fujikura Automotive Vietnam Ltd.

Shinshiro Cable, Ltd.

Fujikura Automotive India Private Ltd.

Aomori Fujikura Kanaya Ltd.

Fujikura Korea Automotive Ltd.

Fujikura Logistics Co., Ltd.
Fuji Materials Ltd.

EMEA (Europe, Middle East, and Africa)

Fujikura Dia Cable Ltd.

Fujikura Europe Ltd.

Yonezawa Electric Wire Co., Ltd.

Fujikura Automotive Europe S.A.U.

FiberTech Co., Ltd.

Fujikura Automotive Europe GmbH

Optoenergy, IncFujikura Automotive Romania S.R.L.

Equity method affiliates

Fujikura Automotive Morocco Tangier, S.A.S.

FUJIKURA COMPOSITES Inc.

Fujikura Automotive Morocco Kenitra, S.A.S.

Fujikura Kasei Co., Ltd.

Fujikura Automotive Ukraine Lviv LLC
Fujikura Automotive Russia Cheboksary LLC

China

Fujikura Automotive MLD S.R.L.

Fujikura (China) Co., Ltd.
Fujikura Electronics Shanghai Ltd.

1,190,000,000

2. Issued Shares:

295,863,421 (including 19,454,193 treasury shares)

3. Major Shareholders
Number of shares held(Thousands)

Shareholding
Composition (%)

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

28,981

10.48

Japan Trustee Services Bank, Ltd. (Trust Account)

16,715

6.05

TAIJU LIFE INSURANCE COMPANY LIMITED

10,192

3.69

Sumitomo Mitsui Banking Corporation

8,456

3.06

Japan Trustee Services Bank, Ltd. (Sumitomo Mitsui Trust Bank, Limited Retirement Benefit Trust Account)

6,777

2.45

Dowa Metals & Mining Co., Ltd.

6,563

2.37

The Shizuoka Bank, Ltd.

5,788

2.09

Fujikura Employees Shareholding Association

5,220

1.89

Japan Trustee Services Bank, Ltd. (Trust Account 5)

4,911

1.78

JP MORGAN CHASE BANK 385781 (Authorized agent: Mizuho Bank, Ltd.)

4,607

1.67

Name of Shareholder

Main Consolidated Subsidiaries (as of March 31, 2020)
Japan

1. Authorized shares:

Americas

Fujikura Shanghai Optical Components Co., Ltd.

America Fujikura Ltd.

Fujikura Hengtong Aerial Cable System Ltd.

Fujikura America, Inc.

DDK (Shanghai) Co., Ltd.

AFL Telecommunications LLC

Fujikura Fiber-Home Opto-Electronics Material Technology Co., Ltd.

Fujikura Automotive America LLC.

Fujikura Zhuhai Co., Ltd.

Fujikura Automotive Mexico, S. de R.L. de C.V.

Fujikura Automotive Guangzhou Co., Ltd.

Fujikura Automotive Paraguay S.A.

Fujikura Hong Kong Ltd.

Fujikura Cabos Para Energia e Telecomunicacoes Ltda.

(Notes)1. The numbers presented in “Number of shares held” are based on the list of shareholders.
2. The Company owns 19,454,000 treasury shares in addition to those noted above. Treasury shares do not include the 922,000 shares held by the trust account relating
to the stock distribution trust established for the stock-based compensation plan for Directors (excluding Outside Directors) and Executive Officers.
3. Japan Trustee Services Bank, Ltd. changed its name to Custody Bank of Japan, Ltd. on July 27, 2020.

External Evaluation
FTSE4Good Global Index (from June 2016)
This index was developed by FTSERussell, which is part of the London Stock Exchange Group. It evaluates thesustainability of major companies in countries around the world on the three elements of Environment, Social,and Governance (ESG). Companies with a superior overall rating are included in the index.

FTSE Blossom Japan Index (from June 2017)* Selected as a Government Pension Investment Fund (GPIF) ESG Index
Developed by FTSERussell, this index consists of Japanese company stocks deemed outstanding from theperspectives of Environment, Social, and Governance.

S&P/JPX Carbon Efficient Index* Selected as a Government Pension Investment Fund (GPIF) ESG Index
This index was jointly developed by S&P Dow Jones Indices and Japan Exchange Group, Inc. Companies inJapan that disclose sufficient environmental information and companies in Japan that are highly carbon
efficient are selected for this index.

SNAM Sustainability Index
Launched in August 2012, this index is based on results of environmental survey operated by Sompo Japan
Nipponkoa Asset Management Co., Ltd. (SNAM) and social and governance surveys operated by Integrex
Inc. Companies with an ESG score higher than the standard on these ESG (Environment, Social, Governance)
surveys are selected.

Fujikura is a signatory to the UN Global Compact.
WE SUPPORT

85

Fujikura Group Integrated Report 2020

Fujikura Group Integrated Report 202086