Nittobo Group
Integrated Report 2023

Nittobo Group

Integrated Report2023
2-4-1, Kojimachi, Chiyoda-ku, Tokyo, 102-8489, Japan
Telephone: +81-3-4582-5111
https://www.nittobo.co.jp/eng/

The Nittobo Group’s Philosophy System

MISSION

VALUESVISION

Corporate Philosophy

Nittobo Declaration

The Nittobo Group will enhance its
value to society as a corporate groupby helping to create healthy and more
comfortable lifestyles, and in so doing
continue contributing to the realizationof a more prosperous world.

• The Nittobo Group aims to be the “Best Partner” for society.
(Nittobo BP Declaration)• We relentlessly strive to identify our customers’ needs and findgreat satisfaction in steadfastly earning their confidence andtrust. In addition, we attach great importance to sharing thissatisfaction with all of our stakeholders and society as a whole,including shareholders, investors, local governments andregional communities, through the provision of our products
and services.
• We are committed to being a corporate group that values thepotential of all employees as individuals and inspires them tofreely and willingly share and discuss their ideas, and ultimately
achieving greater results through teamwork.
• Our corporate group provides employees with opportunities for
progress and self-realization based on the belief that theirprogress leads to everyone’s success. We encourage our
employees to be good citizens, think deeply, observe widely,act courageously and approach their jobs with resolve anddetermination.

Contents
Section 1: Introduction

Section 3: Strategies by Business

How Nittobo Contributes to Society............ 02
Message from the CEO.................................. 04

Business Overview.......................................... 24
Glass Fiber Business and Strategy............ 28
Life Science Business and Strategy........... 30
Research & Development Headquarters...... 32

Section 2: Value Creation Story
History of Value Creation .............................. 10
Value Creation Process................................... 14
Value Creation Drivers and Capital............... 16
Nittobo Group’s Material Issues.................... 18
Big VISION 2030 and Mid-TermBusiness Plan Progress and Outcomes......... 20
Message from the Director Responsible
for the Corporate Management Division..... 22

Sustainable Procurement / Harmonious
Coexistence with Society............................... 45
Directors and Executive Officers................... 46
Comments from an Outside Director........... 48
Corporate Governance.................................. 50
Compliance and Risk Management.............. 58

Section 4: Foundation for Value
Creation

Section 5: Corporate Data

Nittobo’s Sustainability Management........... 34
Environmental Initiatives................................ 36
Active Roles for Diverse Talent...................... 40
Safety Initiatives.............................................. 44

Financial and Non-Financial Highlights........ 59
11-Year Financial Data.................................... 62
Company Profile............................................. 64
Stock Information........................................... 65

Big VISION 2030 Nittobo Group’s Vision for 2030

Customers
Shareholders

Clients

Investors

employees

Community

Creditors

PublicAdministration

As a corporate group that continues to create global No. 1
niche businesses, we aspire to contribute in the areas ofEnvironment & Energy, Digital Society, and Health, Security &Safety with the goal of building a more sustainable society.
 rovide products and services that contribute to•P
the environment and energy• Provide products and services that contribute to
the digital society• Provide products and services that contribute tohealth, security and safety
We aspire to be a company that gains the trust of all
stakeholders in the pursuit of client satisfaction.
On the Cover

Deeply, Widely, Strongly
and Hospitably

Proud that
customers trust Nittobo

Nittobo was established in Fukushima
Prefecture, Japan. The cover photo shows a
towering poplar tree on the site of the
Fukuyama Enterprise Center in Koriyama City,
Fukushima. This tree has watched over Nittobo
throughout its history, but due to the aging of
its trunk, this year will unfortunately be its last.
However, in 2024, it will find new use andappreciation as a bench where employees
can sit and relax.

Editorial Policy	The Nittobo Group Integrated Report is designed to enhance dialogue with stakeholders by presenting the Nittobo Group’s frameworkfor value creation and medium- to long-term strategies. It covers the core elements of value creation by bringing together financial andnon-financial information in a single publication.
Nittobo Group Integrated Report 2023 celebrates the Group’s 100th anniversary by presenting how the Group has created value	throughout its history. We have gone into greater depth regarding how the Nittobo Group helps resolve pressing social issues throughits business activities. The addition of content discussing sustainability management as fundamental to value creation also marks afurther stage of evolution for the report.
This report covers business activities in FY2022 (April 1, 2022 through March 31, 2023).
Report Period
Note: Charts, graphs and tables may use the abbreviation “FY22.”
Scope of Report	This report covers the business activities of Nitto Boseki Co., Ltd. and its consolidated subsidiaries and affiliates in Japan and overseas.
Date of Publication
September 30, 2023
Company References	“Nittobo Group” and “the Group” refer to Nitto Boseki Co., Ltd. and its consolidated subsidiaries and affiliates in Japan and overseas.
“Nittobo” and “the Company” refer to Nitto Boseki Co., Ltd. on a non-consolidated basis.
Forward-looking Statements	The forecasts presented in this report are based on information available to the Company as of the publication date. Forward-looking
statements do not represent promises or guarantees that the Company will attain its forecasts or realize the business measures
expressed herein.

Nittobo Group | Integrated Report 2023

01

Typical Application for Glass Fiber ClothHow Nittobo Contributes to Society

Substrate forsemiconductor
package

Close Up

Products and services that contributeto the environment and energy

1

Materials that contribute to
reducing environmental impact
through energy conservationand fuel efficiency

Close Up

Products and services that contributeto the digital society2

Helping bring about anadvanced digital society thatoffers more comfortable andconvenient lifestyles

Lightweight and strong, glass fiber is used in automobile and aircraft parts tomake them lighter. Glass wool is used for insulation in homes and otherapplications, and contributes to energy efficiency by keeping indoor
temperatures steady.

Glass fiber

Our Special Glass used in glass fibers for electronic materials includes NEglass, which has a low dielectric constant and low dielectric dissipation factor,
and supports 5G high-speed, high-capacity communications and high-speed
processing packages, and T-glass, which has high elasticity and low thermal
expansion properties, and is essential for making high-density package
substrates. We will continue development to satisfy demand for cutting-edge,
high-performance glass fiber cloth, and contribute to the advancement ofdigital infrastructure.

Glass fiber

Close Up

Products and services that contributeto health, security and safety3

Products that support
healthier lifestyles

Glass wool insulation

Motherboard

Substrate cross section

Basic requirements

Chip
Surface layer circuit
Insulation layer(resin-impregnated glass fiber cloth)
Inner layer circuit
Insulation layer(resin-impregnated glass fiber cloth)Surface layer circuit

Substrate forsemiconductor
package(glass fiber cloth used)• Insulation• Reinforced substratestrength• Easy processing• Chemical resistance
High-end requirements

Surface layer circuit
Insulation layer(resin-impregnated glass fiber cloth)
Inner layer circuit
Insulation layer(resin-impregnated glass fiber cloth)
Inner layer circuit
Insulation layer(resin-impregnated glass fiber cloth)Surface layer circuit

Motherboard(glass fiber cloth used)• Low thermal
expansion• Low dielectric
constant/
low dielectric
dissipation factor

Copper foil
Resin

Glass fiber cloth

Glass fiber cloth

In vitro diagnostic reagents are used by doctors at health checkups andhospital visits to diagnose illnesses and help determine treatment regimens.
We supply more than 100 types of diagnostic reagent kits throughout Japan,
thereby contributing to healthier, more comfortable lifestyles.

1

In vitro diagnostic reagents

2

3
2

2
1
1

Note: F RP: Fiber-reinforced plastic
FRTP: Fiber-reinforced thermoplastic

02

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Section 1

Section 2

Section 3

Section 4

Section 5

Introduction

Value Creation Story

Strategies by Business

Foundation for Value Creation

Corporate Data

Message from the CEO

Looking ahead to the next 100 years as westand at the threshold of our “third founding,”
we will further refine our strengths andpromote reforms so that we can continue tocreate global No. 1 niche businesses.

For the Past 100 Years and the Next 100 Years
The year 2023 marks Nittobo’s centennial anniversary. Nittobo’s 100-year history was only possible
thanks to the tireless efforts of our predecessors and the support of our customers, shareholders andother stakeholders. I would like to take this opportunity to once again express my heartfelt gratitude
to all involved. On the other hand, when thinking about the major changes in the internal andYuichi Tsuji

external environments that affected Nittobo in FY2022, I can imagine hearing our predecessors telling

Director, Representative andChief Executive Officer

new perspective.

us that we should look back to the Company’s beginnings and take aim at the next 100 years from a
To date, Nittobo’s history has been marked by two defining events. The first, of course, was
the Company’s establishment in 1923. Half a century had passed since the Meiji Restoration, andthe textiles industry had become a mainstay of the Japanese economy. Against that backdrop, webranched out from our original business of silk spinning and sought out new challenges under the
motto, “Let’s turn anything into fibers.” This led to us being the first in the world to produce glass
fiber on an industrial scale.
The second was the period of postwar reconstruction. We rebuilt our Koriyama Factory, which had
been severely damaged in the war, and expanded the Glass Fiber Business in step with the period of
rapid economic growth in Japan. Glass fiber was used in a wide range of industrial materials, including
composite materials, electronic materials, and construction materials. Nittobo’s Medical Business was
also established around this time, and it continues to this day.
In April 2023, we marked a century since the Company’s founding. I view 1923 as the first founding,and the postwar recovery as our second founding. Now, with a strong desire to jumpstart innovationin this 100th anniversary year, I would like to position this year as a new start—our “third founding.”
Over the past 100 years, Nittobo has grown considerably, but whether we can continue this growthtrajectory will depend on our ability to reflect on how we got this far, assess where we are now, lookahead and make the next leap into the future.

04

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Section 1

Section 2

Section 3

Section 4

Section 5

Introduction

Value Creation Story

Strategies by Business

Foundation for Value Creation

Corporate Data

Message from the CEO

Nittobo’s Strengths Continue to Create
Global No. 1 Niche Businesses

without being bound by conventional frameworks. It is inspired by the idea that every failure is an
opportunity to learn and find the seeds of the next big business.
With the aim to be the “Best Partner” for society, our corporate philosophy states that we will
help to create healthy and more comfortable lifestyles. To be a company that gains the trust of all

I believe that our three greatest strengths, cultivated over a century in business, are as follows.

stakeholders in the pursuit of client satisfaction, we will remain sensitive to changes in the times and

The first strength is our only-one, number-one technologies. In the Glass Fiber Business, weresolutely pass on our founding DNA, which embraces the notions of challenge and fearlessness, as

produce the world’s finest glass fiber yarn and the world’s thinnest glass fiber cloth. The technology

we continue to innovate.

we use to make our glass fiber for electronic materials, which we call “Special Glass” due to its uniquecomposition, is a global No. 1 niche technology that supports the development of the informationsociety. The second strength is the robust value chain we have built. In the Glass Fiber Business, wehave structured a global value chain from glass fiber yarn to cloth, and for in vitro diagnostics reagents
our business extends from the production of antisera raw materials to the manufacture and sale ofreagents. The third strength is our ability to adapt to social change and customer needs. This ability

Sustainability Management

has enabled us to respond quickly when society has transformed and to provide new technologies
and products over the course of a century. We have cultivated these three strengths with the support

In addition to refining our strengths, when considering the next 100 years it is also vital that weof our stakeholders, and we believe that further refining these strengths will ensure our success overcontinue contributing to the creation of a sustainable society. The continued growth of Nittobo isthe next 100 years.

predicated on the preservation of the global environment and the creation of a sustainable society.

In April 2023, we established the New Business Development Center under my direct jurisdiction

In recent years, climate change has reached a level that increasingly threatens our everyday lives,

as CEO. At the center, people can freely propose new ideas and sow the seeds of future businesses

and its impacts are becoming more severe. The Intergovernmental Panel on Climate Change’s Sixth
Assessment Report states that “it is unequivocal that human influence has warmed the atmosphere,
ocean and land.” As a global problem, and one of the most important issues facing the world,
efforts to address climate change are now under way, led by governments, local bodies, variousorganizations, and companies everywhere.
Under Big VISION 2030, which is presented as an extension of the current Mid-Term Business Plan,
Nittobo aims to bring about a sustainable society through its contributions in the areas of Environment& Energy, Digital Society, and Health, Security & Safety. With the vision of being a corporate groupthat continues to create global No. 1 niche businesses, we work every day to promote sustainability
management. The Nittobo Group’s products can be found in all facets of everyday life, such as inhomes, automobiles, and smartphones. As such, our materials must have a low environmental impact
during their product life cycle; in other words, they must be sustainable. To pass on the irreplaceable
global environment to the next generation and contribute to sustainable development, the Nittobo
Group will continue to pursue environmentally sustainable policies while practicing management thatprovides value to society. I will now briefly explain the activities of our internal task force and plans inthis regard. For additional details, see pages 34–39 of this report.
Our first task is reducing CO2 emissions.
The melting furnaces used in the manufacture of glass fiber yarn need to reach temperatures wellover 1,000°C to melt glass, consuming large amounts of energy and emitting large amounts of CO2

06

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Section 1

Section 2

Section 3

Section 4

Section 5

Introduction

Value Creation Story

Strategies by Business

Foundation for Value Creation

Corporate Data

Message from the CEO

in the process. For this reason, we have been converting from gas furnaces to electric furnaces andintroducing oxy-fuel combustion equipment. In FY2021, we introduced internal carbon pricing (internalcarbon price: JPY 10,000/t-CO2), whereby we factor in the benefits of energy savings when making
capital investments. This measure will accelerate the implementation of energy savings and CO2
emissions reduction at all business sites.
We have promoted switching to renewable energy through the introduction of solar power
generation systems and other means. In FY2022, we decided to install a 3 MW-class solar power
generation system at our main domestic base, the Fukuyama Enterprise Center in Koriyama City,
Fukushima, and it is scheduled to start operation in January 2024. Furthermore, we installed a solar
panel system at NITTOBO ASIA Glass Fiber Co., Ltd., our yarn manufacturing base in Taiwan.
To achieve carbon neutrality by FY2050, we must convert our gas furnaces to use carbon-freefuel. There are multiple carbon-free fuel candidates, so we are conducting research and searchingfor the most suitable one, taking into consideration supply systems, costs and technical issues.
When switching to an alternative fuel, the existence of established supply infrastructure is a major
prerequisite, so we will ascertain progress on this matter and work to create partnerships for technicalverification for the use of alternative fuels. In addition to switching to alternative fuels, we areconsidering how to absorb and utilize CO2 from flue gas emitted by the melting furnace, although thisinitiative is still at an elementary stage.
Another issue is the reuse and recycling of resources.
In addition to using recycled glass in the production of glass wool for thermal insulation, which we

Human Resource Development andDiversity and Inclusion

have already been doing for some time, we are collaborating with recycling companies to reuse our
in-house glass waste as material for glass fiber. We are currently working on obtaining ISCC PLUS

If we are to keep generating innovations over the next 100 years, we must develop human resources

certification* for this manufacturing process.

who have new viewpoints and ideas that are not bound by conventional wisdom and fixed ways ofthinking, and who can put them into action. As mentioned above, it is our human resources who* International Sustainability and Carbon Certification (ISCC) PLUS certification: An international certification system mainly forcompanies and organizations that manufacture products using sustainable raw materials such as biomass and recycled raw materials

uphold and develop the Group’s strengths. One of the four key measures in our current Mid-TermBusiness Plan is to “foster human resources that generate innovation,” and we are implementing avariety of initiatives, including regular employee engagement surveys. We believe that a driving force
behind innovation is employees’ ability to mutually recognize each other’s individual characteristics,
abilities, and ways of thinking, and the creation of opportunities for different values and ideas tocollide and harmonize. Furthermore, at the Research & Development Headquarters we are developing
human resources capable of leading the Group’s future R&D. We have made steady progress on theactivities of the DX Strategy Office, established within the Research & Development Headquarters, aswell as measures to improve digital transformation (DX) literacy, especially among young engineers.
Going forward, we will continue fostering a corporate culture in which a wide variety of people candemonstrate their full potential.
To simply maintain the status quo would essentially be going backward. Instead, to become
capable of growing for the next 100 years, we must continue to innovate with the spirit of our“third founding” in mind.

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Section 1

Section 2

Introduction

Value Creation Story

Section 3

Section 4

Section 5

Strategies by Business

Foundation for Value Creation

Corporate Data

History of Value Creation
2023–

The Nittobo Group was founded in Fukushima City, Fukushima Prefecture, in 1923 through the merger of Koriyama Kenshi
Boseki Co., Ltd. and Fukushima Seiren Seishi Co., Ltd. We celebrated our centenary in 2023—marking a hundred years thatsaw many challenges as times changed, including wartime upheaval and transformations of our business model. We remaincommitted to the advancement of industry and society, and we will continue to stay ahead of the times and constantly seekout challenges in product and technology development so as to offer new products and services.

1923–

First Founding“Let’s turn anything into fibers”
The Company’s original management, fearless of failure,relished the challenge of trying to make fiber out of all kinds ofmaterials. Developing products to meet contemporary needs,
they produced rock fiber, staple fiber, and much more.

Third Founding

Toward the next 100 years

1945–

Second Founding

We reaffirm our commitment to our founding spirit, which embraces the notions ofchallenge and fearlessness that make up the Nittobo Group’s very DNA. We will continue
to work to achieve sustainable growth over the next 100 years, meeting the needs ofsociety, as we aspire to be a company that gains the trust of all stakeholders in the pursuitof client satisfaction.

New businesses to meetcontemporary demand
In the post-war period, the Japanese textile industry enjoyeda short-lived boom but lost global competitiveness overtime, necessitating that companies shift to other lines ofbusiness. We sought not only to strengthen our Glass Fiber
Business, but also launched a Construction Materials
Business and Medical Business to meet contemporary needs.

Net Sales (Consolidated)
Life Science, others
Glass Fiber (including construction materials until 2009)
Textile1925

1930

Note: Non-consolidated
net sales for Nittobo
until FY1989

1940

1950

1960

• End of Second World War

Textile Business1970• The 1964 Tokyo Olympics andthe three new modern
conveniences (the color TV, theair conditioner and the car)• Mobile communication
services using
first-generation (1G)
technology

1985

1990

• Plaza Accord

1995

2000

2005

2010

• Microsoft launches Windows 95• Global
Financial
Crisis2015• Great EastJapan
Earthquake

2022 (Year) 2022

COVID-19 •pandemic

Helping to create more comfortable lifestyles

1898	Koriyama Kenshi Boseki Co.,
Ltd. established in Koriyama
1918	Fukushima Seiren Seishi Co.,
Ltd. established in Fukushima
1923	Merged the two companies toform Nitto Boseki Co., Ltd.

1933	Started staple fiber operations
at the Fukushima Factory

Glass Fiber Business

1960	Launched Nittobo Dishcloth™
1965	Launched shirt interlining brand DANKEEP™; started production ofdual-structure stretchable yarn C·S·Y™
1969	Launched ladies’ apparel interlining brand
Dan Reine™
1976	Introduced single dot interlining machines1938	Produced glass fiber on an industrial scale(first in the world) and started rock wool
production (first in Japan)
1949	Started glass wool production

1964	Glass fiber adopted for use in the nose cone for the Tokaido
Shinkansen
1967	Established Fukushima glass fiber yarn factory; installed Direct Melt
Furnace No. 1 to meet growing glass fiber demand
1969	Established Fukushima No. 2 Factory (specialized in production ofglass fiber cloth for printed wiring boards); launched glass fiber clothfor printed wiring boards

Life Science Business2004	Launched SDDC™ interlining suitable for use with
low-adherence materials
2015	Nittobo Dishcloth™ won Good Design Long Life Design Award
2018	Launched Innovative Fabric™, which applies interlining
processing technology
2021	Established Nittobo Advantex Co., Ltd.

1984	Launched T-glass (low thermal expansion)
1985	Launched fine count yarn
1988	Established yarn manufacturer Nittobo Norplex Oak Co., Ltd.,the predecessor of NITTOBO ASIA Glass Fiber Co., Ltd. (Taiwan)
1998	Launched NE-glass (low dielectric)

2006	Launched Flat Fiber2019	Made cloth manufacturer Baotek Industrial Materials Ltd.
(Taiwan) a consolidated subsidiary
2021	Established Special Glass factory at
NITTOBO ASIA Glass Fiber Co., Ltd. (Taiwan)

In vitro diagnostic reagents become the Group’s second business pillar

Started development of biochemical in vitro diagnostic
reagent kits based on the idea that biochemistry will be
the defining chemistry of the next generation1952	Opened Chemical Fiber Laboratory (origins of the Medical Business),which later became the Biochemical Laboratory1978	Launched synthetic substrate for -GTP

Nittobo Group | Integrated Report 2023

1988	Introduced double dot interlining machines

Providing high-performance glass fiber tailored to the needs of the times, strengthening our leading position in the glass fiber industry

Under the motto, “Let’s turn anything into fibers,”
Nittobo processes a variety of materials into fibers
and has pioneered many technological firsts in Japan

10

1980

1984	Launched specialty chemicals PAA™
1986	Acquired International Immunology Corporation, the predecessor of
Nittobo America Inc.; started immunological in vitro diagnostic
reagent business1987	Established NITTOBO MEDICAL CO., LTD. and its own brand forin vitro diagnostic reagents; launched immunological in vitro
diagnostic reagents2015	Received the Minister of Agriculture, Forestry and Fisheries Prize fordevelopment of an in vitro diagnostic reagent using geneticallymodified silkworms
2018	Launched IgG4 measuring reagent kit for use with automated analyzers
2019	Acquired Kamiya Biomedical Company, LLC, including its sales networkand expertise in regulatory approval procedures in the U.S.
2019	Acquired Capricorn Products, LLC, strengthening global procurementof raw materials for in vitro diagnostic reagents
2022	Expanded California site at Nittobo America Inc.

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Section 1

Section 2

Introduction

Value Creation Story

Section 3

Section 4

Section 5

Strategies by Business

Foundation for Value Creation

Corporate Data

History of Value Creation

First Founding “Let’s turn anything into fibers”
1923–

Glass Fiber BusinessLife Science BusinessTextile Business

1933

1986

Using proprietary technologies,
became the first in Japan to produce
staple fiber on an industrial scale

Started immunological in vitro diagnostic reagent businessWe began development with the conviction that staple
fiber, manufactured from pulp, was the ideal synthetic fiberfor Japan given the country’s scarcity of natural resources.
We overcame numerous failures on the path to full-scale
production; after many mechanical repairs and rebuilds, webecame the first in Japan to mass produce staple fiber in 1933,
using proprietary technologies at our Fukushima Factory.

Immunological in vitro diagnostic reagents were seen as a means for enabling high-precision measurement. As their use
began to become mainstream, we acquired International Immunology Corporation (IIC) of the U.S., an antiserum
manufacturer and the predecessor of Nittobo America Inc. This move secured for us a supply of raw material antibodies,and its location in a hub of biotech companies and research institutes also enabled us to launch full-scale development of
immunological in vitro diagnostic reagents.

Weaving demonstration at an
exhibition for staple fibers

Advertising poster (1936)

1998

1938

Launched Special Glass NE-glass

Succeeded in the production of glass
fiber (first in the world) and rock wool
(first in Japan) on an industrial scale

NE-glass has low-dielectric properties that reduce transmission loss. It has been adopted for use in switches and routers indata centers and base stations that process huge volumes of data at high speed, and in antenna-in-package modules for5G smartphones. We expect high demand for NE-glass as AI and other high-performance servers are made to increasingly
low-loss specifications.

In 1938, through innovative fiber development, we became
the first in the world to mass produce glass fiber and thefirst in Japan to mass produce rock wool. As an effective
insulation material essential for efficient heat management,
there was high demand at the time, with rock wool commonlyused in construction and military applications.

Number-One Technologies

System board for Fugaku(Photograph courtesy of Fujitsu Ltd.)

Reducing transmission loss with
low-dielectric properties
Advertising poster (1940)

businesses to meet
Second Founding New
contemporary demand
1945–

Dielectric
constant (1 GHz)
Dielectric
dissipation factor(1 GHz)E-glass

NE-glass

6.8

4.8

0.00350.00151949

2018

Started glass wool production

Launched IgG4 measuring reagent kit for
use with automated analyzers

The first in Japan, we started glass wool production using
the “spraying method.”

Racks of the supercomputer Fugaku(Photograph courtesy of RIKEN)

Launched a kit for detecting IgG4-related disease (a nationallydesignated intractable disease) using an automated analyzer

Koriyama Factory of Paramount Glass
Manufacturing Co., Ltd. (1952)

1984
Launched Special Glass T-glass
Initial applications for T-glass, characterized by its highstrength and low thermal expansion, focused on composite
materials. For example, it was used in the Shinkai 6500
deep-submergence vehicle. Today, T-glass is used insemiconductor package substrates that enable high-speed
processing and high reliability in servers and smartphones.

12

Nittobo Group | Integrated Report 2023

2021

Only-One Technologies

High strength, low thermal expansion
Semiconductor
package substrate

E-glass

T-glass

Thermal expansion
coefficient (×10-6/°C)

5.6

2.8

Tensile elasticity (GPa)75

86

Newly established Special Glass yarn factory at
NITTOBO ASIA Glass Fiber Co., Ltd. (Taiwan)
Established an integrated production system from Special Glass yarn to cloth on the main island of Taiwan

Nittobo Group | Integrated Report 2023

13

Section 1

Section 2

Introduction

Value Creation Story

Section 3

Section 4

Section 5

Strategies by Business

Foundation for Value Creation

Corporate Data

Value Creation Process
Corporate Philosophy

The Nittobo Group will enhance its value to society as a corporate group by helping to create healthy andmore comfortable lifestyles, and in so doing continue contributing to the realization of a more prosperous world.
Social Issues

Material Issues

Intensification of
global warming andenvironmental issues

Provide products andservices that contributeto the environment
and energy•

Transition to a recyclingoriented society•More rapid legal andregulatory change

Transition to an
ultra-smart society•

Higher speed
telecommunications (5G/6G)•

Evolution of AI technologies

Business Activities

Outputs

Outcomes

Lightweight, energy-efficient
automobiles and aircraft
Chopped strands
Glass fiber cloths

Energy-efficient housing, recycling
Glass wool insulation

Wind power

Adapt to climate change
and a resource-recycling
society

Chopped strands

Supplying productsthat reduce
environmental
burdenWastewater treatment
Specialty chemicals

Only-one,
number-one
technologies

Robustvalue chain

High-speed, large-volumedata communications
Network infrastructure
connecting everything
Special Glass cloths

Provide products andservices that contributeto the digital society

Smaller, thinner electronic devices

Value Sources

Ultrafine glass yarns, ultra-thin glass cloths

Infrastructure repair and reinforcement

Creating a livable,
convenient andsafe advanced
digital society

Non-woven fabric, glass fiber cloths

and start of the IoT era

Sustainable auxiliary materials
Interlinings, inner materials

Societal structure issues•

Aging society with a declining
birthrate (in Japan)•

Population and other issues•

Increased geopolitical risk•

Industry reorganization, entry
from other industries•

More sophisticated andcomplex social demands•

Supporting the shift fromtreatment to prevention

Provide products andservices that contributeto health, security
and safety

In vitro diagnostics reagents

Ability to adapt tosocial change andcustomer needs

Fashion and functionality
Deodorizing and antibacterial interlinings
Innovative Fabric™

Continuously updating
corporate governanceRealize continuous,
sustainable growth for
the Company

Increasing pace of innovation

Harmonious coexistence with society
Safety initiatives
Active roles for diverse talent

Four Key Measuresof the Mid-TermBusiness Plan
Growth strategy
implementation

Managementfoundation
reinforcement

Action forenvironment issues

Human resources
development

Realizing a healthy,safe andsecure society

Nittobo Group’s Vision
for 2030
Big VISION 2030

Global No.1
Niche
Company

Contributing to therealization ofa sustainable society

Glass Fiber BusinessLife Science BusinessTextile BusinessInputsManufactured
capital14

Nittobo Group | Integrated Report 2023

Intellectual
capitalHumancapitalSocial andrelationshipcapitalNaturalcapitalFinancial
capitalNittobo Group | Integrated Report 2023

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Section 1

Section 2

Introduction

Value Creation Story

Section 3

Section 4

Section 5

Strategies by Business

Foundation for Value Creation

Corporate Data

Value Creation Drivers and Capital
The Nittobo Group’s strengths, proven over its 100-year history, are the drivers of value creation that meets contemporaryneeds and stays abreast of environmental changes. As we continue to grow, we will create greater value by leveraging thesestrengths to resolve social issues.

Creating Value in the Supply Chain

Glass Fiber Business

Value Sources

Only-one,
number-one
technologies
Our consistent quality is supported by ourability to develop high-performance products,
and the wealth of manufacturing technology
and expertise we have amassed over many
years.
• World-leading precision in glass fiber• Special Glass made from proprietarycompositions• Adhesive interlinings that are among theworld’s thinnest

Robust value
chain
Through cooperation between development,
manufacturing and sales departments, as wellas an integrated production system incorporating
upstream and downstream processes, we
maintain a stable supply of high-performance,high-quality products.
• Glass fiber: Composition research
Spinning processes Weaving processes
Interface treatment• Life science: Antigens/Antibodies
Antisera In vitro diagnostic reagents• Textile: Dyeing process Coating
technology development Adhesion
processes

Ability to adapt tosocial changes andcustomer needs

Plastic
reinforcement
materials

We are committed to providing products
and services that contribute in the areas ofEnvironment & Energy, Digital Society, andHealth, Security & Safety. Paying close
attention to feedback from the market, we
harness our proprietary technologicalcapabilities to provide products tailored tomarket needs.

RovingGlass Fiber
Yarn Business

Choppedstrands

Glass fiber yarn

Plastic compounders

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

Molders

Glass fiber cloth
Glass Fiber
Cloth Business
Copper-cladlaminate (CCL)
manufacturers

Glass Fiber
Yarn BusinessElectronicmaterials
Yarn

Industrial
materials

Printedwiring board
manufacturers

Semiconductor
manufacturers

Smartphone,
PC and otherfinished productmanufacturers

Glass fiber cloth
manufacturers

Glass Fiber for
Industrial Materials
Business

Glass Fiber
Yarn Business

Various
manufacturers: Nittobo Group

Forms of Capital at the Nittobo Group (FY2022)

A safe and secure production system
for high-value-added productsTechnical capabilities that create
global No. 1 niche businesses

Human resources that innovate tomeet new needs

Through bold capital investment we haveestablished a supply system capable ofmeeting growing demand for Special
Glass in the Glass Fiber Business and forin vitro diagnostic reagents in the Life
Science Business. We held back on major
capital investment projects in FY2022, but
we will continue to keep a close eye on
demand and make focused investments instrategic businesses.

Ever eager for a challenge and inspired byour motto, “Let’s turn anything into
fibers,” our high-level R&D consistently
leads to numerous firsts, both in Japanand in the world. Based on our wealth oftechnologies, we have led the industry inthe development and mass production of
next-generation products.

We are committed to fostering a culture
where the skills and approaches ofindividual employees are valued and thatinspires them to freely share and discuss
their ideas, ultimately achieving greater
results through teamwork. We are working
to enhance employee engagement,
promote digital transformation, develop
global human resources, and create anenvironment conducive to an appropriate
work-life balance.

Capital expenditure

R&D expenses JPY

JPY 5.9 billion

Patents held

3.0 billion
697

Life Science Business

Human Capital

Employees

In Vitro Diagnostic Reagents
Raw materials production
Antigens

Antibodies

Product development, production and sales
Antisera

Other companies

Nittobo America Inc.
(California/Iowa/Maine)

2,631

Natural Capital

Financial Capital

Strong relationships rooted
in the front lines

Reducing environmental impact tohelp create a sustainable society

The Nittobo Group was founded in Fukushima.
We maintain multiple factories there, as wellas the Research & Development
Headquarters, and have production sites
throughout Japan. We cherish our ties witheach local community as we go about
supplying products and services.
Furthermore, we are expanding our
production system to better meet customers’
needs, with a glass fiber facility in Taiwan andan in vitro diagnostic reagents facility in the U.S.

Our production processes require
substantial amounts of fuel and electricity.
In keeping with our responsibility as amanufacturer, we not only strive to reduce
CO2 emissions as a means of reducing
impact, such as by using renewableenergy, but also leverage our products
and technologies to help resolve theworld’s environmental issues.

Finance management underpinning
our growth strategy and healthyfinancial position• Excellent relationships withcustomers and suppliers• Strong sense of stakeholder trust

Energy input

While pursuing growth-oriented strategies
such as making the necessary investments
for growth and next-generation productdevelopment, we are also undertaking
structural reforms to reinforce ourmanagement foundation and downsizing
non-core assets such as idle landholdings
so as to maintain a healthy financial
position, thereby ensuring our growth issustainable.

16

Nittobo Group | Integrated Report 2023

6,200,000 GJ

24.5 billion
Net assets JPY 108.9 billion

Reagent sales

NITTOBO MEDICAL CO., LTD.

FAN Co., Ltd.1

Kamiya2

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

Textile Business
Interlinings
R&D•

Net interestbearing debt JPY

Reagent
production

Antisera

Frontier Institute Co., Ltd.

Social and
Relationship Capital

Reagent
development

Hospitals and commercial laboratories

Intellectual Capital

Wholesalers and distributors

Manufactured
Capital• dvanced adhesive technologies
ACollaboration with Glass Fiber Business

Production
•
•
•
•

Sales

 yeing and processing technologies
DDot coating technologies
 venly spaced dot placement
EAdded functionality

Nittobo Group | Integrated Report 2023

17

Section 1

Section 2

Introduction

Value Creation Story

Section 3

Section 4

Section 5

Strategies by Business

Foundation for Value Creation

Corporate Data

Nittobo Group’s Material Issues
In order for the Nittobo Group to enhance its social value and continue contributing to the realization of a more prosperous
world, we have identified material issues as important management tasks that will contribute to resolving social issues.
We have defined seven material issues by applying the perspectives of strategic CSR, which leverages the strengths of
the Nittobo Group, to contribute through business activities, and of basic CSR, which focuses on ESG matters to build afoundation for sustainable growth.

Material Issues Identification Process
Issue selection

Analysis andplan creation

Management
decision-making•D iscussed the Nittobo
Group’s purpose andvalue creation•E ach business division analyzed
its business environment andformulated a vision for the future• Discussed in depth by the
Board of Directors withexternal directors’ input andprovided feedback to thebusiness divisions•H eld multiple intensive
discussions between the CEO
and business divisions

Social Issues

Intensification of global warming
and environmental issues• Transition to a recycling-oriented society• More rapid legal and regulatory change

Nittobo Group’s Material Issues
Provide products and services that
contribute to the environment and energy• Increase in environmental costs

Adapt to climate change anda resource-recycling society• Exclusion of products and companies thatare not environmentally responsible

Transition to an ultra-smart
society• Higher speed telecommunications (5G/6G)• Evolution of AI technologies andstart of the IoT era

Risks• Restrictions on business due toenvironmental regulations• Decline in technological superiority
Provide products and services that
contribute to the digital society• Replacement by other materials• Speed of technological development in
the electronic materials industry

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

Key Measures

Setting and developmentof material issues•D efined sevenmaterial issues• Developed specificinitiatives to realize
our vision

Relevant SDGs

• Develop new environmentally responsible
products• Reduce CO2 emissions• Implement recycling and reuse• Grow profits through Special Glass• Strengthen development capabilities
for new products• Strengthen solution capabilities to increasevalue for customers• Global shift from treatment to prevention due
to increased awareness• Shrinking domestic market due todeclining birthrate

Societal structure issues• Aging society with a declining birthrate(in Japan)• Population and other issues

Provide products and services that
contribute to health, security and safety• Business continuity risks specific tobiologically derived materials• Replacement by other diagnostic reagents• Expanding demand for diagnostic reagents in
Asia due to population growth and risingincome levels• Utilization of three raw material production
bases in the U.S.
• Utilization of the value chain from upstream(antigens, antibodies, raw materials) to
downstream (product manufacturing
and sales)• Expand sales channels in the field of in vitro
diagnostic reagents• Strengthen development capabilities
for new products• Strengthen solution capabilities to increasevalue for customers

Realize continuous, sustainablegrowth for the Company• Diversification of factors causing changes
in the socioeconomic environment• Increased geopolitical risk
• Industry reorganization, entry fromother industries• More sophisticated and complex
social demands• Increasing pace of innovation

Management foundation
reinforcement• Price fluctuations of fuels, raw materials
and other commodities• Impact of geopolitics and human rights
issues, etc. on the supply chain

Human resources
development• Pursue lean management that is not substantiallyaffected by economic fluctuations• Selection and concentration• Capture growth opportunities throughinnovative technology development• Optimize business portfolio and review
unprofitable businesses• Transform technology development andproduction technology through theintroduction of IT and digital transformation• Maintain sustainability in procurement and the
supply chain• Decline in workforce due to low birthrate
and aging population• Increasing diversity• Foster human resources that generateinnovation• Increasing mobility in the labor market• Implement diversity and inclusion measures• Intensifying competition to recruit young
and specialized human resources• Innovation expected through humanresource development• Conduct workstyle reform andbusiness reform• Improve employee engagement

Continuously updating
corporate governance18

Nittobo Group | Integrated Report 2023

• Expanding and refining CSR scope• Permeation of corporate philosophy• Continuously update corporate governance• Compliance and security ina remote environment• Strengthening the corporate foundation by
gaining trust from society• Thoroughly implement corporate
ethics and compliance

Nittobo Group | Integrated Report 2023

19

Big VISION 2030 and Mid-Term Business Plan
Progress and Outcomes
Nittobo celebrated its 100th anniversary on April 1, 2023. In order for the Nittobo Group to achieve steady growth in a
rapidly changing environment and its aim for sustainable growth over the next 100 years, we need to consider the discrete
three-year period of the Mid-Term Business Plan while also addressing social issues based on changes we foresee in theenvironment, society and economy over the next 10 years. Big VISION 2030 is the Nittobo Group’s roadmap to being the“Best Partner” for society in 2030.
We will help to realize a sustainable society through our contributions in the three areas of Environment & Energy, DigitalSociety, and Health, Security & Safety, where the Nittobo Group can leverage its strengths as a global No. 1 niche company.

Section 1

Section 2

Introduction

Value Creation Story

Section 3

Section 4

Section 5

Strategies by Business

Foundation for Value Creation

Corporate Data

Progress of Mid-Term Business Plan (FY2021–2023)
In order to realize Big VISION 2030, we formulated a three-year Mid-Term Business Plan that began in FY2021. Under theplan, we have been implementing four key measures.

Overview of Key Measures and Progress
Four Key Measures

Growth strategy
implementation

Nittobo Group’s Vision

Big VISION 2030
We aspire to be a company that gains the trust of all stakeholders
in the pursuit of client satisfaction.
As a corporate group that continues to create global No. 1 niche businesses, we
aspire to contribute in the areas of Environment & Energy, Digital Society, andHealth, Security & Safety with the goal of building a more sustainable society.

Provide products
and services that
contribute to theenvironment and energy

Provide products
and services that
contribute to thedigital society

Fulfilling corporate social
responsibility
Implementing SDG and ESG
management

Increased demand for Special
Glass (i.e., low-dielectric glass,
low thermal expansion glass)

Intensification of global warming
and environmental issues

Transition to an
ultra-smart society• Transition to a recycling-oriented
society• More rapid legal and regulatorychange• Higher speed telecommunications(5G/6G)• Evolution of AI technologies andstart of the IoT era

Provide products
and services that
contribute tohealth, security and safety

Improvement of preventive
medicine and increase inhealth-oriented mindsets

Societal structure issues• Aging society with a declining
birthrate (in Japan)• Population and other issues

Nittobo aims to be a global No. 1 niche company

20

World’s number-one company
with high sensitivity

World’s number-one company
with high-value-added products

Listen to, understand and flexibly
serve markets

Refine proprietary technologies to provide
products aligned with market needs

Nittobo Group | Integrated Report 2023

Generate further business growththrough high-value-added
products

Management foundation
reinforcement
Evolve into a lean business (ensure
resilience)

Action for environment
issuesAddress environmental issues tohelp bring about a sustainable
society

Human resources
development
Foster human resources,
organizations and work
environments that generateinnovation

Progress of Initiatives (FY2021–2022)• Aggressive investment in growth areas• Completed Special Glass factory in Taiwan• Completed construction of a new plant for goat-derived antisera in California, U.S.A.
• Completed construction of a new plant for in vitro diagnostic reagents in Koriyama City,
Fukushima Prefecture, Japan• Strengthened development of next-generation low-dielectric glass• Established a new business promotion organization under the direct control of the CEO tonurture next-generation businesses• Promoted customer solution activities and proposed products and services that meetcustomer needs• Reviewed business portfolio (sold beverage business)• Structurally reformed Composite Materials Business and Textile Business• Reduced assets (sold former golf driving range site)• Strengthened cost competitiveness• Established an organization to promote digital transformation (DX), and provide DX education
for all junior engineers• Established the Sustainability Committee (to promote sustainability management; chaired by the CEO)• 30% reduction in CO2 emissions in FY2030 (compared to FY2013)• Set target of carbon neutrality by FY2050• Endorsed recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)• Examined and implemented specific measures to reduce CO2 emissions• 
Introduced internal carbon pricing• Promoted recycling and reuse and developed environmentally responsible products• Fostered human resources that generate innovation (next-generation leaders, global talent andprofessional talent)• Implemented diversity and inclusion measures• Conducted workstyle reform and business reform• Improved employee engagement

Financial Performance and Targets
FY2021(Actual)FY2022(Actual)FY2023(Mid-Term Business Plan Targets)

Net sales

JPY 84.1 billion

JPY 87.5 billion

JPY 100 billion

Operating profit

JPY 7.3 billion

JPY 4.9 billion

JPY 14 billion

EBITDA[EBITDA margin]

JPY 14.4 billion[17.1%]

JPY 13.1 billion[15.0%]

JPY 25 billion
[25%]

ROE

6.4%

2.6%

10%

ROIC

3.3%

2.3%

6%

Equity ratio

56.5%

55.9%

55%

Debt-to-equity ratio

0.4

0.4

0.4

Future Initiatives
In FY2023, the final year of Mid-Term Business Plan (FY2021–2023), we will continue implementing the plan’s four key measuresin order to achieve our targets. At the same time, we will look ahead to Big VISION 2030 and the next 100 years in discussing
the formulation of the next medium-term business plan.

Nittobo Group | Integrated Report 2023

21

Message from the Executive Officer Responsible
for the Corporate Management Division

We will champion a corporate
culture that is fearless in breaking
the mold and taking on new
challenges as we evolve into alean business.

Hiroyuki Tada
Representative Senior Managing Executive Officer
Responsible for the Corporate Management Division,
General Manager of the
Corporate Business Planning Division

Passing On the Nittobo Culture
to a New Generation
Much of my career at Nittobo has been in sales, and in mytime I have also served as Manager of the Textile Division and
Glass Fiber Division, and been responsible for branch offices
and procurement departments. In my current role, I hope to
use my experience to ensure the reality on the ground isreflected in the management of the Company.
To me, the defining trait of today’s Nittobo Group is its
earnest character backed by impressive frontline
capabilities. Inspired by our slogan, “A company thatalways takes on new challenges,” we hone those frontline
capabilities as one of our foremost assets, and pass themon through each subsequent generation of employees.
For Nittobo, 2023 is our centenary year. From the very start,
we have always been pioneers, including being the first inJapan to produce staple fiber (synthetic fiber manufactured
from pulp) on an industrial scale, and the first in the world
to produce glass fiber on an industrial scale. However,amid changing times, we were forced to suspend new
graduate hiring for a period, and stumbled in sufficiently
passing on the pioneering culture of our forebears.
Management must take responsibility for rectifying this,22

Nittobo Group | Integrated Report 2023

and it is incumbent on upper and middle management
to lead by example.
Nittobo employees tend to work diligently, steadily, andwith unwavering focus on the job at hand. I believe thatthese characteristics are the driving force behind our ability
to consistently produce high-quality products, and I urge
our people to keep seeking out challenges in the quest forresults.
Once, we had a motto that embodied our commitment
to that founding spirit: “Let’s turn anything into fibers.”
Now, top management is leading a return to that mindset
and the “third founding” of the Company, with a corporate
culture that is fearless in breaking the mold and taking on
new challenges.

Progress in Evolving into a Lean
Business, and Future Outlook
Since FY2021, we have been working to reinforce ourmanagement foundation, which is one of the four key
measures in the Mid-Term Business Plan targeting
innovation and the creation of new value. In doing so, we
are accelerating our evolution into a lean business (ensuringresilience). Key tasks include optimizing our business

Section 1

Section 2

Introduction

Value Creation Story

Section 3

Section 4

Section 5

Strategies by Business

Foundation for Value Creation

Corporate Dataportfolio and reviewing unprofitable operations. In the
Textile Business, structural reforms such as transferring theinterlinings business to Nittobo Advantex Co., Ltd.
improved profitability in FY2022. Meanwhile, selling off agolf driving range in Shizuoka Prefecture and Nitto
Beverage Co., Ltd., which produces and markets softdrinks, has enabled us to focus our energies on a morestreamlined business portfolio.
Moving forward, a major challenge will be to better tap
into areas of compatibility between our businesses. Indeed,
generating synergies between our core Glass Fiber andMedical Businesses is our most immediate task. Specifically,
we are searching for potential combinations across ourvarious businesses, including glass fiber yarn, glass fiber
cloth, and glass fiber for industrial materials—in the Glass
Fiber Business; medical (in vitro diagnostics reagents) andspecialty chemicals—in the Life Science Business; and theoperations of the Textile Business. Generating such synergies
at an increased pace will require a change in the way the
Nittobo Group approaches existing customers. For instance,
referring the clients of one division to other divisions could
spark new businesses. Our future success depends on getting
closer to customers, identifying their true, undiscoveredneeds, and tuning our production and development systems
accordingly.
Another Mid-Term Business Plan key measure is “foster
human resources that generate innovation.” At the beginningof the fiscal year, I published a message in the in-housenewsletter exhorting our personnel to adopt anentrepreneurial mindset. My hope is that each person willdevelop an eye for things that they, their departments, andthe more impressive will be our frontline capabilities. It isalso vital that we strive to accommodate greater diversity.
At a time when the difficulty of hiring and retaining talent
makes strengthening our team extremely hard, empowering
people to stay true to their unique values will better enable
them to fulfill their potential.

the Group as a whole might nurture into a new corebusiness. I believe that the more of those people we have,55.0 per share.

Financial Targets andShareholder Return Policy
In terms of our finances, our primary aim is to steadily
generate corporate value as we embark on a second
century of business. Our assets have increased following
capital investments in expanded production facilities tosupport future growth, but market growth has yet to catch
up with us. Although this is to our near-term disadvantage,these investments are nonetheless strategically important.
Moreover, due to factors including sudden changes in thebusiness environment, other issues we face include
profitability lagging behind the targets of the Mid-TermBusiness Plan ending FY2023 and a tight cash flow situation.
Adopting ROIC as a management indicator is a task for the
future; nevertheless, in the meantime we are focused onother means of improving capital efficiency, and the next
medium-term business plan will emphasize effectiveness inthat regard.
For shareholder returns, maintaining the dividend policy is
a top management priority, and our basic policy is to ensurestable dividend growth over the medium to long term. At theend of FY2022, we issued a 100th anniversary commemorative
dividend, resulting in a total dividend for the year of JPY

Shareholder Returns(JPY)

Dividends per share

60

Dividend payout ratio (right axis)(%)

Commemorative dividend (left axis)

100th anniversarycommemorative dividend
JPY 10 per share

50

45
40

40

45

100

55

45

45

80

40

35

74.4

65.5

60

30

30

25

25

25

40

20

35.1
25.8

10

30.3
21.7

21.4

18.6

15.2

21.6

19.4

20

26.8

0

0
FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23
(forecast)Nittobo Group | Integrated Report 2023

23

Section 1

Section 3

Section 2

Introduction

Strategies by Business

Value Creation Story

Section 4

Section 5

Foundation for Value Creation

Corporate Data

Business Overview
2.3 1.1

業

0.1 0.1

5.7 0.2

6.0

16.8
Net sales bysegment

Operating profit bysegment

JPY 87.5 billion(FY2022)

JPY 4.9 billion(FY2022)

2.8

1.9

Glass Fiber Yarn Business

Nittobo’s proprietary high-performance Flat Fiber (FF)has an oval cross section, and offers high strength anddimensional stability. Its applications include smartphone
housings and automotive components.

Net sales by region

21.4

JPY 87.5 billion(FY2022)

Modified Cross Section Chopped Strands: Flat Fiber (FF)54.1

Flat Fiber Characteristics

High flowability

High strength

Surface smoothness

Impact resistanceDimensional stability

Warp Level Comparison for Composite Panels
Made with Flat Fiber

Round cross section (regular)

Round cross section fiber in use

Oval cross section (FF)Oval cross section fiber (FF) in use

67.3

Glass Fiber BusinessLife Science BusinessTextile BusinessJapan
EuropeOther

Asia
North America
Other regions

Glass Fiber Cloth Business

Glass Fiber Business See pages 28–29
Net Sales (JPY billion)
21.8

21.4

18.6

18.4

6

20.5

4

40

14.0

19.8

20.4

22.9

22.9

26.4

25.0

23.1

23.3

24.0

2

20

2019

2020

2021

2022

(FY)

Glass Fiber Yarn Business
Glass Fiber Cloth Business
Glass Fiber for Industrial Materials BusinessBusiness

Main products

RovingCharacteristics

Products consistingof strands of
untwisted glass fiber

0.6
2.0
3.9

0

0

2018

Made using proprietary technology, Nittobo’s Special Glass products such as low-dielectric NE-glass and low thermal
expansion T-glass help meet the needs of high-speed telecommunications.

Operating Profit (JPY billion)

60

Steadily Expanding Applications, from Telecoms and Information Infrastructure, to Cutting-edge Devices and Automotive
Applications, Centering on Logic and Memory Semiconductors

0.4
2.9
3.1

0.3
2.6
2.4

0.3
0.1

3.1

Application

–1.7

2019

2020

2021

2022

(FY)

Telecoms andinformation
infrastructure

Choppedstrands

Products made bychopping glass fiber
into fine pieces

Non-volatilememorySmartphones
Tablets
Mobile PCs
Edge
computing

Plastic reinforcement
materials
Smartphone bodies, automotive components

Yarn

Glass
Fiber Cloth

Glass
fiber cloth

Glass
fiber cloth
Glass
Fiber forIndustrial
Materials
Glass wool

Products made oftwisted glass fiber

Products made byturning yarn into
cloth

Products made byturning yarn into
cloth

Products made byturning short glass
fiber wool

AR/VR
DronesGlass fiber cloth

Printed wiring boards

Substrates forelectrical insulation
Printed wiring boards, base stations,data centers, smartphones

Reinforcement
materials for industrial
applications

Nittobo Group | Integrated Report 2023

Automobiles

Electric vehicles,
ADAS

T

E

NAND memory

Low CTETE

Low dielectricNE
dissipation factor
Low dielectric
dissipation factor NE / NER

E

APs/CPUs

Low CTEUltra-thin T, T

Ultra-thin E

NAND memory

Low CTEUltra-thin TSuperultra-thin E

DDR memory

Low CTEUltra-thin T(smartphones)

DDR memory

Low dielectric
dissipation factor NE (PC)Low dielectric
dissipation factor Ultra-thin NE
Low dielectric
dissipation factor Ultra-thin NE

Ultra-thin E

CPUs/GPUs

Low CTEE

DDR memory

Low dielectric
dissipation factor NE (PC)E

Low CTE

T

Super
ultra-thin E

Low CTE

T

E

Motherboards

Motherboard substrates

Wireless
communications
CPUs
MemoryRF package substrates

Motherboards
Advanced systemon-chip ICs
Advanced systemon-chip ICs
Millimeter wave
radar

Semiconductor
packagesubstrates

Mid-range

Semiconductor package
substrates
Semiconductor package
substratesT

Low dielectric
dissipation factor Ultra-thin NE

Module boards

E

Ultra-thin E

E

Glass Fiber for Industrial Materials Business

Main Product Groups and Applications

Interior Furnishings

Exterior Furnishings

Automobiles
and Aircraft

Construction

Architectural Membranes

Roll-up blinds

Tent membranes• Tent membranes• Backlit signboards

Vibration-damping
materials

Coating film
waterproofing

Transcosmos Stadium Nagasaki• Light shades• Surface cloths• Insect screens• Roll-up blinds• Automobiles• Aircraft• Concrete corrosion-proofing• Reinforcement• External wall reinforcement• Coating film waterproofing

Anti-vibration materials, tent film,
road reinforcement materials

Thermal insulationmaterials
Residential buildings, non-residential buildings

24

Desktop/
Laptop PCs

Volatile memory

High-end

Low CTE

Motherboard substrates

Semiconductor
packagesubstrates

Glass fiber type

Material
requirements

CPUs/GPUs

DDR memory

Processors

Plastic reinforcement
materials

Substrates forelectrical insulation
Reinforcement
materials for industrial
applications

Substrate types

Semiconductor
packagesubstrates

Processors
Controllers

Motherboards

Main applications

Bathtubs

Glass
Fiber Yarn ase stationsB• 
Data centerswitches, routersand servers• 
AI servers•

Glass Fiber Yarn Business
Glass Fiber Cloth Business
Glass Fiber for Industrial Materials Business
Product photograph

Equipment/Parts

3.5

1.7

–2

2018

Growing Utility of Special Glass for Semiconductors

The translucence of the material allows for
streamlined designs that are difficult toachieve with molded products.

Nittobo Group | Integrated Report 2023

25

Section 1

Section 3

Section 2

Introduction

Value Creation Story

Strategies by Business

Section 4

Section 5

Foundation for Value Creation

Corporate Data

Business Overview

Life Science Business
Net Sales (JPY billion)

Operating Profit (JPY billion)

20
15

13.7

15.1

Textile BusinessSee pages 30–31

15.9

13.5

3

16.8

2.9

2.6

2.6

0

4

2.1

2019

2020

2021

2022

(FY)

0.5

3.6
2.5

2.3

2

2018

2019

2020

2021

2022

(FY)

0.1

0

2.3

‒0.5

0

0

2018

1.0

4.9

2.8

1

5

Operating Profit (JPY billion)

6

2

10

Net Sales (JPY billion)

–0.4

‒1.0

2018

2019

2020

2021

2022

(FY)

–0.1

–0.2
–0.7

2018

2019

2020

2021

2022

In Vitro Diagnostic ReagentsInterlinings

Our in vitro diagnostic reagents are used in health checkups and at hospitals to test bloodand urine and determine state of health. Establishing an integrated production systemfrom raw materials to completed product has enabled us to offer a stable supply of highquality in vitro diagnostic reagents.

Interlinings are an auxiliary material used between the inner and outer fabrics of, for instance, shirts and blouses tohelp them retain and adjust shape. We have a large share of the Japanese market for interlinings for high-end
ladieswear.
In vitro diagnostic reagents

Main test target

Test item

IgG/IgA/IgM
C3/C4

Diabetic renal disease
Glomerular filtration rate

Urinary albumin
Cystatin C

Renal tubular disorder
Nutritional status

Main test target
Allergies

CRP

Inflammation

Features of Our Adhesive Technologies
Adhesion between different materials

Main Products

2 microglobulin
PreALB/RBP/Tf

RheumatismDot coating

Adhesion (for a wide
variety of materials)
that firmly bonds
different materials
together

Test item
IgE

1 g/m² ofadhesive resin

Functional dots

Proprietary adhesive
technologies

Streptococcal infection

ASO

Iron metabolism

Ferritin

Osteoporosis

TRAP-5bBreast cancer

CSLEX

+

Coating using
functional agents

Collaboration with Glass Fiberand Specialty Chemicals Businesses

Adhesive Interlinings

Functional agents Dot coating of

Small amounts ofresin evenly placedto achieve highadhesive strength

MMP-3
RF

(FY)

=

functional agentsthat enables thesophisticatedincorporationof functions

Market development and technology
refinement to enter the fields of lifestyle
product materials and industrial materials

Innovative Fabric™
Innovative materials using adhesive technology

Specialty Chemicals
Application

In the Specialty Chemicals Business, the Group engages
in the development and sale of proprietary functional
polymers such as Poly-allylamine and the Polyamine
Series. We research, develop, manufacture and sell
proprietary products in categories with high barriers toentry and across a wide range of industry sectors,
including toiletries, papermaking, metals, electronicmaterials and generic drugs.

Application
Fabric

StructureOutermaterial

Interlining

Inner material

Special processing adds new
functionality to interlinings
and inner materials

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

26

Nittobo Group | Integrated Report 2023

Surface-protective
agent SSG™

• Anti-fouling• Anti-corrosion coating• Solid natural wood
protection

Water treatment agents• Wastewater treatment• Metal scavengers• Decoloring

Auxiliary agents for
textile processing• Dye-fixing• Friction fastness improvers• Deep-coloring

Nittobo Dishcloth™
Created through joint research with Kurashi-no-techo Co., Ltd., Nittobo Dishcloth™ isa long-selling product whose popularity stretches back to its launch more than
60 years ago.

Nittobo Group | Integrated Report 2023

27

Section 1

Introduction

Section 3

Section 2

Value Creation Story

Strategies by Business

Section 4

Section 5

Foundation for Value Creation

Corporate Data

Glass Fiber Business and Strategy

We will create innovative solutions
that meet customers’ needs byenhancing our own strengths.

Hisanobu Hayashi
Managing Executive Officer
General Manager of the Glass Fiber Division• Manufacturing technologies for producing the finest and thinnest glass fiber in the world

Strengths• Extensive lineup of glass fiber products suited for a wide range of usages, such as construction materials, fiber-reinforced
plastics, and electrical insulating cloth for printed circuit boards, based on our own glass-composition technologies• Developing new products constantly based on our own technology/product roadmap• Increasing competition in the global market

Risks• Increasing diversification and complexity of customer needs• Possibility of increased production costs due to external factors such as increasing raw material and fuel prices• Expanding demand for our Special Glass, which can support infrastructure for high-speed, high-capacity communications

Opportunities• Increasing demand for our products that can be used in the AI-related market due to market expansion of AIrelated businesses

Competitive Advantages of the Glass
Fiber Business That Contribute toCreating “Global No. 1 Niche Businesses”
In order to create “global No. 1 niche businesses” consistently
under its long-term vision, the Nittobo Group aspires to be thecompany which has “the highest sensitivity to customers’ needs”
and can supply “the highest value-added products in the world.”
The Glass Fiber Business is making a major contribution toachieving this vision. Outlined below are the strengths of each of
our businesses.
Glass Fiber for Electronic Materials
We believe that we have three major strengths in glass fiber forelectronic materials: our competitive advantage in product quality,
our ability to engage in technical discussions with customers
based on our development roadmap, and steadily expanding ourmanufacturing capacity to ensure the stable supply of our
products. In terms of the product quality of both the glass yarn
and glass cloth provided by Nittobo, we are able to differentiate
ourselves from other companies through our advanced
technological capabilities.
In particular, our products for high-speed and high-capacity
communications, which we call Special Glass, are essential

28

Nittobo Group | Integrated Report 2023

materials that have a strong competitive advantage, such as low
dielectric constant (Dk)/dissipation factor (Df) and low coefficientof thermal expansion (CTE) characteristics.
Another strength is that, because we have both yarn and cloth
operations, we can engage in technology discussions with ourcustomers based on our own R&D roadmap and product plan, andwhen they offer us their feedback, we can steadily incorporate it
into our development.
Lastly, in anticipation of increasing product demand due to theongoing evolution of high-speed, high-capacity communications,
we have been steadily expanding our manufacturing capacity. For
instance, we made a Taiwanese cloth manufacturer a consolidated
subsidiary in 2019, and also established our first-ever overseas
production line for Special Glass yarn, in Taiwan in 2021.
Glass Fiber for Industrial and Composite Materials
We also supply glass fiber products in a variety of other forms, notonly for electronic materials but also for fiber-reinforced plastics
and industrial materials.
Our strength in these two applications is our ability to provide
a broad range of products suited to the usage of each customer,
such as in smartphones, automobiles, aircraft, housing materials,
and construction materials.
We have extensive knowledge regarding glass fibers

accumulated over many years, and furthermore we will continue towork closely with our customers to thoroughly understand theirneeds and provide “industrial solutions” to their problems. We
seek to expand our business by proposing a more thorough lineupof glass fiber products than ever before.

Achievements in FY2022 andOutlook for FY2023
Business was relatively robust in the first half of FY2022, especiallyin the glass fiber for electronic materials field, but the situation
changed drastically around summer and demand started tostagnate. Increasing costs of raw materials and fuels also weighedheavily on the bottom line.
In the fourth quarter in particular, business conditions worsened
for both electronic materials and automotive applications. Despite
these difficulties, we have prepared extensively to expand ourbusiness when the market recovers with the cooperation of severalof our customers.
In FY2023, we started out under difficult conditions. Although
we initially hoped that the market would recover in the second halfof the year, the current outlook for such a recovery is dim.
On a more positive note, in early spring there were signs ofrecovery in low-DK glass cloth (NE-glass) for certain models ofdata server. We have hope that this recovery trend will spreadthroughout the glass fiber business as a whole, especially in
relation to our high-value-added products.
Our future strategy for electronic materials is to steadily
develop new products in accordance with our development
roadmap, and also to establish a sufficient supply system formaking high-value-added glass. We intend to retain our position
as world leader in the niche field of glass yarn and cloth forelectronic materials.
We will refine our ability to make proposals and respond,
thereby redoubling our efforts to provide industrial solutions foreach customer through our glass fiber products. On the other
hand, with regard to glass fiber for industrial and composite
materials, we will respond more sensitively to customer needs andmake suitable proposals. We will continue to provide “industrial
solutions” for each customer with glass fiber products.
We also seek to generate more opportunities to reach newcustomers with whom we have not done business before, byparticipating in various exhibitions.
Communicating with new customers will enable us to discoverStrengths of the Glass Fiber Businessfurther possibilities and take on challenges with a view to the
future as we seek to resolve customers’ increasingly sophisticatedand complex issues by using our technology and know-how. In
addition, we have been receiving many inquiries about
environmentally friendly products, and we recognize that their
supply is an important issue to be resolved in the medium- tolong-term. To that end, we will work more closely with the
Research & Development Headquarters.

Strengthening Internal Collaboration
for Medium- to Long-term Growth;
An Organization that Encourages
Individual Challenges
In order to provide our customers with attractive products andsolutions, we believe that it is important for sales, technology, andmanufacturing to work together and continue to offer a variety of
proposals to our customers. In April 2023, we adopted a neworganizational structure to enable close collaboration between
sales, technology, and manufacturing for each business.
By strengthening these collaborations, we hope to further
deepen dialogue with our customers and speed up our businessactivities.
In addition, in order to achieve medium- to long-term growth,
we believe it is important for each and every employee—
particularly the younger generation—to grow significantly as
individuals through various challenges.
We seek to understand as best we can the desires of individual
employees to take on new challenges, and as a company as awhole, we have already started systematically implementing
personnel rotation so that employees can gain various experiences
while they are still young.
We will strive to create mechanisms and foster a culture that
supports challenges, for instance by purposefully bringing
together a diverse range of employees beyond the typicalboundaries of occupational functions.
In addition, in order to foster such a culture, it is important for
those of us at the management level to take the initiative and set
an example as we take on challenges ourselves. I believe that if
more employees are willing to take on challenges and strive toachieve goals, a new culture will be created and we will steadily
move closer to being a global No. 1 niche company.

Special composition

T-glass (low CTE)
NE-glass (low Dk, low Df)

Nittobo’s strengths

Next generation low CTE
NER, NEZ and DXII

Heavy yarn /Thick cloth
Strategic investments in increasing production
capacity for, and expanding applications of,high-value-added products such as E-glass
yarn (super ultrafine to fine count), superultra-thin cloth, T-glass and NE-glass

Fine yarn /Thin cloth
E-glass heavy yarn
Medium and thick cloth(commodity use)

E-glass
Super ultrafine yarn to fine yarn
Super ultra-thin cloth

Commodity composition

Nittobo Group | Integrated Report 2023

29

Section 1

Introduction

Section 3

Section 2

Value Creation Story

Strategies by Business

Section 4

Section 5

Foundation for Value Creation

Corporate Data

Life Science Business and Strategy

We will ramp up the creationof customer value to become
a global No. 1 niche company.
Tatsuo Sakae
Managing Executive Officer
General Manager of the Medical Business Division
President and Representative Director of
NITTOBO MEDICAL CO., LTD.
Chairman and CEO of Nittobo America Inc.

Achievements in FY2022 andMedium- to Long-term Outlook

Japan can opt to spend a year working at our U.S. base.

We have made solid progress toward the establishment ofwill require more than just acquiring and training a globallya global value chain that will enable us to be a global No. 1

capable workforce; it will also be imperative to improve

niche company—one of the goals of Big VISION 2030. Not

communication among the Group’s various business sites. To

only has the new plant in California strengthened ourthat end, we launched Weekly Global Meetings in 2023. In

production system, but the design of its working

addition to dialogue among the top management of Groupenvironment has helped increase employee motivation.

companies in Japan and the U.S., function-specific global

The expansion of our production facilities will propel us tomeetings, including meetings devoted to sales, manufacturing,a new stage. In specific terms we will enhance global

quality control, R&D, and administration, enable members

marketing, such as by leveraging our high share of theto keep up to date with each other and discuss action plans.

Japanese in vitro diagnostic reagents market into stronger

Communication between business locations on either side ofsales overseas through Nittobo America. Moving forward,

the Pacific can be challenging, but we believe that cross-we will continue to hone our strengths and further cement

regional cohesion within each function is the first step toward

our foothold in global markets and grow the business bystronger global management.

strengthening partnerships with major global players, andStrengths
Risks• A global value chain, from raw material production to marketing of reagents• Solid presence in the market for in vitro diagnostic reagents for immunological plasma proteins• Unforeseeable issues may hinder our ability to maintain stable quality• Impact of global economic trends, trade and tax policies, and geopolitical factors

Another measure to foster new talent is “Proposals forby leveraging our presence in the Japanese in vitro diagnostic

the Future,” an event in which younger employees form

reagent market to expand into overseas markets.

teams to come up with ideas that may become futurebusinesses that the Group may explore. In FY2023, we will

Medium- to Long-term Initiatives
Aimed at Creating Customer Value
The global expansion of our business will require talent

formulate our next medium-term business plan. We areconsidering incorporating the best ideas that emerge from
Proposals for the Future as part of the new plan.
As we pursue medium- to long-term growth throughcapable of communicating the strengths and features ofthese and other initiatives, it is vital that we keep the

our products to global markets, convincing customers thatcreation of customer value in mind. In doing so, we need toour products meet their needs, and demonstrating our cost

take both a product-based approach (i.e., focusing oncompetitiveness. There are of course cultural barriers tocreating new forms of value to satisfy future customer needs)

overcome, but gaining a foothold requires the mental

and, just as importantly, a market-oriented approach (i.e.,

customers. Perhaps our greatest strength, however, is ourfortitude to close challenging negotiations. Finding, retaining

focusing on satisfying current customer needs). Frankrobust sales network, which directs feedback from end

and developing the right people is no simple matter; moreover,discussion among management and frontline personnel tousers to the production and development departments.

the necessary skills are often only acquired through steady

identify what value to offer, as well as how to enhance value

The Nittobo Group’s Life Science Business consists of the

Furthermore, we are focusing on the development of aeffort and experience. For the development of a globallyfor customers over the medium to long term, will open the

Medical Business, which handles in vitro diagnostic reagents,

global value chain that can meet growing customer needs.

capable workforce, we launched an overseas trainee

path to further value creation.

and the Specialty Chemicals Business, which develops andSpecifically, we have expanded production facilities at

dispatch program in FY2023, whereby employees based insells proprietary functional polymer compounds.

NITTOBO MEDICAL CO., LTD. in Japan, where we develop,

Opportunities• Increased demand from overseas markets for in vitro diagnostic reagents• Earning suppliers’ trust creates opportunities for solution proposals

A Global Value Chain Ensuring
Stable Supply

In the Medical Business, we have forged a solid presence

manufacture and market in vitro diagnostic reagents, and atand established a reputation as specialists in immunology

Nittobo America Inc., where we develop, manufacture andfor our reliable immunological in vitro diagnostic reagents.

market goat-derived antisera that are the raw materials for

Our broad involvement in the value chain starting withsuch reagents. The launch of Nittobo Medical’s new plant in

upstream processes is a source of Nittobo’s competitive

Koriyama City, Fukushima, in December 2021, and theadvantage. We boast antigen and antibody R&D functions,completion of Nittobo America’s new plant in California inand the raw materials (antisera) we produce in the U.S. are

October 2022 have significantly strengthened our global

used to make reagents in Japan for sale to domestic andintegrated production system.

global markets. Hospitals and other medical service

30

Building a robust global production and sales structure

In the Specialty Chemicals Business, we provide proprietaryproviders require supply stability above all else. Our reliable

functional polymer compounds that are tailored to customers’

supply chain, spanning from raw material production toneeds and cater to a wide range of applications. We aremarketing, and our ability to stably provide high-quality

proactively developing products that can contribute in the

products that overcome the high variance intrinsic toarea of the environment and energy, such as thermal barrier

animal-derived raw materials, are therefore invaluable tocoatings.

Nittobo Group | Integrated Report 2023

Establishing a Global Integrated Production System
Far upstream
Strengthening of R&D
functions for antigens
and antibodies
Frontier Institute Co., Ltd.
Ishikari City, Hokkaido (acquiredin March 2019)
FAN Co., Ltd.
Chiyoda-ku, Tokyo (joint venture
established in April 2019)

Upstream
Expansion of antisera
production as raw materials
Capricorn Products, LLC*
Maine, U.S.A.
(acquired in June 2019)
Nittobo America Inc.
California, U.S.A. (new plantcompleted in October 2022)

Midstream
Expansion of in vitro
diagnostic reagent
production sites
NITTOBO MEDICAL CO., LTD.
Koriyama City, Fukushima(new plant completed in
December 2021)

Downstream
Access to global
pharmaceutical regulatory
clearance expertise andacquisition of sales networks
Kamiya Biomedical
Company, LLC
Washington, U.S.A.
(acquired in January 2019)* Merged with Nittobo America Inc.
in 2020

Nittobo Group | Integrated Report 2023

31

Section 1

Introduction

Section 3

Section 2

Strategies by Business

Value Creation Story

Section 4

Section 5

Foundation for Value Creation

Corporate Data

Research & Development Headquarters

At the core of the Nittobo Group’s
R&D, the Research & Development
Headquarters will lead the quest
for ongoing innovation.
Kazuhiko Igarashi
Director, Managing Executive Officer
President of Research & Development Headquarters
Head of Digital Transformation Strategy Office andEnvironment Technology Strategy Office
Head of Fukuyama Enterprise Center

32

Nittobo Group | Integrated Report 2023

Identifying the Seeds of New Solutions
to Customer Needs
A vital role of the Research & Development Headquarters is
to apply our wealth of technical capabilities in the creation of
new value. We do so by combining core technologies honedby our predecessors to generate synergies that become theseeds of new solutions to emerging customer needs. We aim
to generate more such seeds through our ongoing R&D
efforts. To that end, we are committed to the ongoingdevelopment of our research talent. In addition to providing
researchers with more opportunities for direct dialogue withcustomers, we will also foster creativity, for instance withthe 20% Rule, whereby researchers can allocate 20% of theircapacity to discretionary research topics that interest them,separate from their assigned themes. Additional measures
will include increasing contact with external academic andresearch institutions, talks by guest lecturers, andopportunities for overseas study. Through these measures,
we hope to spark and sustain innovation at the Research &Development Headquarters.

Health, Safety & Security
As well as development to enhance in vitro diagnostic reagentsfor immunological plasma proteins, we are conducting R&D inJapan and overseas to launch new high-value-added products,
including through joint research with external researchorganizations. In Japan, for instance, we are enhancing
Implementing the 5G–6G Roadmap

Sparking New Innovation in
the Run-up to Big VISION 2030

2020

2022

2024
6G

5G–6G
Timeline

2026

2028

6G

Study

2030

6G (10×5G capacity)

Specifications

Production

5G–mature stage, industrial application expansion
5G–expansion stage (millimeter wave), local expansion
5G–initial stage (Sub 6), mobile expansion

Wireless
telecoms market

Under Big VISION 2030, the Nittobo Group aspires tocontribute in the areas of Environment & Energy, DigitalSociety, and Health, Safety & Security with the goal ofbuilding a more sustainable society. We will actively pursue
R&D with a focus on these three themes.
Environment & Energy
Increased demand from society for environmental solutions
has prompted us to make dramatic changes in our approachto manufacturing. In Special Glass, for instance, it is nolonger enough to develop glass with the necessary electricaland mechanical properties; it is now increasingly important
to enhance value for customers by reducing the carbon
footprint and other forms of environmental impact in thedevelopment, production and sales processes. We havetherefore formed a cross-organizational team, consisting ofmembers from R&D, business planning, sales, customer
solutions, and other departments, to discuss manufacturingissues with full consideration for environmental performanceand energy consumption. In the supply chain, post-consumer

2018

Smartphones

5G–Sub6

1 Gbps

5G–millimeter wave

10 Gbps (28 GHz)

Base stations

5G–Sub6

BBU, RRH

5G–millimeter wave

Quasi-millimeter wave radar

Vehicle-mounted radar

800 GbE

Routers
Switches

400 GbE

Development of low-dielectric,
low-loss glass fiber by Nittobo

100 Gbps×16L

200 Gbps×8L

100 Gbps×12L (NEZ)

100 Gbps×8L (NER)

50 Gbps×8L (NE)
200 GbE

100 GbE

100 Gbps

BBU, RRH

Millimeter wave radar
1.6 TbE

Servers
Advancedservers
AI servers

High-speed, low-latency, multi-connection

6G

1.2 TbE
Wired telecoms market

Established in 2017 through the integration of the R&D
departments of various organizations, the Research &Development Headquarters is at the core of the Nittobo
Group’s R&D. We strive to enhance technical and R&D
capabilities in the Glass Fiber, Medical, and Textile
Businesses. We also work to generate new forms of added
value that increase the profitability of existing businesses
and explore themes for development that will result in new
businesses. In 2020, we unveiled our new NI-CoLabo
facility, where researchers working in different businessfields can pursue new possibilities together.
I was involved over many years in process development
for glass fiber in the manufacturing division. Today glass
fiber is a flagship product that embodies the Nittobo
Group’s aim to be a global No. 1 niche company, but thisdid not happen overnight. Our researchers discovered thepotential of glass fiber with excellent electrical properties
more than 20 years ago, but it has taken constant researchover the years and the arrival of high-speed, high-capacity
telecommunications for that potential to be fully realized.
In terms of the overall glass fiber market, our market share
may be modest, nevertheless we continue to leverage ouronly-one, number-one technological capabilities to develop
high-quality products that satisfy customer requirements.
Indeed, working closely with customers has enabled us
to accumulate a truly diverse range of technologicalcapabilities in fields other than glass fiber as well.
NI-CoLabo has only just begun cross-departmental R&D

R&D functions and improving our development system forin vitro diagnostic reagents to ensure a stable supply ofhigh-quality in vitro diagnostic reagents. Outside Japan, in
2022 we completed a new plant for goat-derived antisera
at our California site, which increased our total production
capacity.

*M aterials informatics is the application of the principles of informatics
to materials science to improve the efficiency of materials development.

More advanced functions in 5G devices

Harnessing Our Technical Capabilities
to Seed Future Innovationin search of synergies between our businesses. A primary roleof the Research & Development Headquarters is to combine adiverse range of existing technologies. Moreover, our juniorresearchers will be key to our future success. As such, my roleas President of Research & Development Headquarters is torespect their desire to seek out and overcome challenges andto create an environment where they can apply their various
skills to best effect.

recycling is another important theme. We are looking into
forming a consortium with waste collectors and local
governments to promote recycling, but for the time being,
we have begun manufacturing products using recyclable
materials that we can collect ourselves.
Digital Society
Digitalization is another vital part of our R&D strategy. Our
Special Glass products address the increasing need formaterials that enable high-frequency, high-speedtransmission, and we are committed to researching anddeveloping next-generation glass materials, such as
NE-glass with low dielectric properties and T-glass with low
thermal expansion, that add new functions to complement
those that customers demand. Moreover, the establishmentof a Digital Transformation Strategy Office in the Research& Development Headquarters in April 2021 has added
momentum to our efforts regarding process innovation.
And in R&D, we have started incorporating materials
informatics* into our materials development processes,
thus harnessing the power of digital technology for more
efficient materials development.

25 Gbps×8L (NE)

25 Gbps×4L (NE)High-speed, high-capacity, low-latency

PCIe 7
PCIe 6

128 Gbps×16L

64 Gbps×16L

AI server 56–100 Gbps (NE)
PCIe 5
PCIe 4

16 Gbps×16L

Low-loss NE

Ultra-low-loss NER

32 Gbps×16L
High-speed, high-capacity, low-latency

Next-generation super-low-loss I NEZ

Next-generation super-low-loss II DXII

Note: Arrow color corresponds to Nittobo low-loss glass fiber materials that have been adopted or are expected to be adopted.
Source: Compiled by the Company with reference to Ministry of Internal Affairs and Communications materials

Nittobo Group | Integrated Report 2023

33

Section 1

Introduction

Section 4

Section 2

Section 3

Value Creation Story

Strategies by Business

Foundation for Value Creation

Section 5

Corporate Data

Nittobo’s Sustainability Management
The Nittobo Group is aware of its responsibilities as a corporate citizen, and addresses environmental, social, andgovernance (ESG) issues with the aim of “contributing to the realization of a more prosperous world,” as set forth in its
corporate philosophy. We contribute to society by creating value through our business activities, and we will continue towork on improvements that enhance corporate value and lead to sustainable growth.

Key Initiatives for FY2022 and Beyond
At the fourth meeting of the Sustainability Committee in FY2021, we discussed activity policies and key initiatives on the roadto FY2030 and decided on specific actions, which we are now promoting.

Sustainability Management Structure

Promotion of thorough energy-saving measures

The Sustainability Committee, established in April 2021, is chaired by the Representative and Chief Executive Officer andcomprises the heads of business units, the President of the Research & Development Headquarters, the Executive Officer incharge of the Risk Management Department, the Executive Officer in charge of the Accounting & Finance Department, andthe heads of major business locations. The Sustainability Committee meets quarterly, and important matters discussed anddecided are reported to the Board of Directors for discussion and resolution.

Activities are carried out by
the following five task force(TF) teams:
TF Overall Supervisor: Kazuhiko Igarashi,
Director, Managing Executive Officer

Board of Directors

Evaluation and approval

Representative and Chief Executive Officer

Chair of Sustainability
Committee

Executive Meeting

1. CO2 Reduction and Energy
Saving TF

Companywide strategy
discussions and decisions

Sustainability Committee

2. Renewable Energy
Introduction TF

Corporate Business Planning Department

3. Environmentally Responsible
Product Development TF

Secretariat
Planning and implementing
action plans

Task Force Teams

4. New Energy Technology TF

Research & Development Headquarters

5. Scope 3 Reduction TF

Progress management andevaluation

Environmental
technologies, DX

Energyefficiency• Improve yield and productivity, strengthen technologies, consider
introduction of high-efficiency combustion equipment, etc.
• Expand measures pursued in the Glass Fiber Business to the entire
Company as an all-employee initiative

Electrification of gas furnaces and consideration of next-

Electrification generation furnaces
and switching to • Implement electrification and hybridization of gas furnaces
alternative fuels • Conduct technical studies of new furnaces with a view toswitching to alternative fuels

Installation of solar power systems

Introduction• Sign a PPA to install solar power generation system at Fukuyama
of renewableEnterprise Center (the Nittobo factory with the largest site area)
energy• Expand use of renewable energy

Development of environmentally responsible products• Further strengthen and digitalize product planningand development
Product
development • Strengthen collaboration with customers to verify

Mindset reform• Foster understanding andawareness of sustainability
activities• Increase sensitivity for
identifying business
opportunities
System creation• Promote energy-saving capital
investment by introducing
internal carbon pricing• Engage in active external
communication to enhance
corporate value
Collaboration and cooperation• Promote collaboration withlocal governments and othercompanies

product performance
Glass Fiber Business

Medical BusinessTextile Business

Basic Stance on Human Rights
Sustainability Committee Agenda for FY2022
5th Meeting

6th Meeting•E xplanation of FY2022 TF• Decision on policy for
initiatives and progress reportintroduction of internalcarbon pricing•F inal confirmation anddecision on risks and• Decision on introduction ofopportunities posed bypower purchase agreement
climate change for disclosure(PPA) at Fukuyama Enterpriseat the time of endorsement ofCenterthe recommendations of the
Task Force on Climate-related
Financial Disclosures (TCFD)

7th Meeting

8th Meeting• Progress report on carbonfree (hydrogen) verificationtest• Current state of sustainability
and ESG activities and areas
for improvement throughcollaboration with external
consultancy company• Decision on signing up
to Fukushima Prefecture
Carbon Neutral Declaration(advanced edition)• Decision on conducting
supplier surveys

Items Discussed and Decisions Made at 1st through 4th Meetings of Sustainability Committee• The Sustainability Committee was
newly established in April 2021 toshare the vision and issues that the
Nittobo Group should aim for andto start specific actions.

34

Nittobo Group | Integrated Report 2023

• We revised our CO2 emission
reduction targets for FY2030,
identified issues at our glass fiber
production sites, and developed
specific activities to reduce
CO2 emissions.

• We have endorsed the TCFD
recommendations and examined
the risks and opportunities posedby climate change in all of theGroup’s operations.

The Nittobo Group recognizes the importance ofinternational agreements such as the Universal Declarationof Human Rights, the United Nations Global Compact
and the United Nations Guiding Principles on Businessand Human Rights, endorses their principles, and works
to ensure respect for human rights. We recognize our
responsibility to respect human rights in all our businessactivities.
To this end, we require officers and employees tocomply with international norms, local laws and regulations
regarding respect for human rights in the countries andregions where we do business. They must also refrain

Respect for Human Rightsfrom any kind of harassment that violates rights, unfairly
discriminates against any person in regard to gender, age,nationality, ethnicity, race, origin, religion, creed, social
status, physical disability, sexual orientation or any otherreason; or that gives offense to personal dignity.
In addition, we do not engage in child labor of children
who are not of working age as defined by the laws andregulations of the countries and regions in which we
operate, or forced labor. We provide appropriate training
to all employees in order to ensure understanding of theabove concepts.

Human resource development

Prohibition of discrimination and respect for diversity

Wages and working hours

Prohibition of harassment

Protection of the right to organize

Prohibition of child labor and forced labor onsideration for youth, seniors, and expectant mothers,Cand work-life balance

See below for details.
https://www.nittobo.co.jp/eng/sustainability/pdf/SustainableProcurementPolicy.pdf

Nittobo Group | Integrated Report 2023

35

Section 1

Introduction

Section 4

Section 2

Section 3

Value Creation Story

Strategies by Business

Foundation for Value Creation

Section 5

Corporate Data

Environmental Initiatives
The Nittobo Group has set proactively addressing environmental issues as a provision in the Nittobo Behavior Program,which in conjunction with the Nittobo Environmental Charter and the Companywide Environmental Policy, provide theframework under which the Group strives for ongoing improvement. Furthermore, in accordance with Big VISION 2030,
we are working to realize a sustainable society by developing products that reduce environmental impact and contributein the areas of the environment and energy.

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

Action Guidelines
Environmental protection
Aim at improving the environment continuously andcoexisting with the local community by striving to reduce
environmental impacts in a systematic way.
Environmentally conscious corporate activities
Take action in response to climate change, effectively use
resources, reduce harmful substances, preserve biodiversity,and carry out other environmental conservation initiatives inall business domains in Japan and abroad.
C ompliance with environmental policy and voluntary management
Comply with laws, regulations, other requirements, andprinciples, stipulate voluntary environmental policies,
management standards, and action plans, and work towardachieving them.

Periodic audits
Conduct periodic environmental audits to verify theappropriateness of management standards and improve
environmental and safety management to raise suchstandards.
Training and education
Provide all employees with thorough environmental andsafety training, maintain their environmental and safety
awareness at high levels, and strive to hand down the
global environment to posterity.

We aim to reduce CO2 emissions by rationalizing energy
use and switching to low-carbon fuels.

We aim to achieve zero emissions through emission control
and proactive adoption of recycled raw materials.

Compliance with laws and regulations

We manage hazardous substances appropriately and strive
to reduce their discharge into the environment.

We comply with environment-related laws and regulations and regional
agreements, and work to totally eliminate environmental risk.

Initiatives to Reduce CO2 Emissions
FY2030. The decision was based on discussions by the
Sustainability Committee. In addition, we have set the newtarget of achieving carbon neutrality by FY2050, and are
implementing initiatives to contribute to decarbonization
throughout our supply chain.

Installation of Solar Power System at Taiwan Factory
NITTOBO ASIA Glass Fiber Co., Ltd. (NAG), our production
base in Taiwan, operates a Special Glass yarn factory thattargets the growing demand for low-dielectric glass, which
is used in data centers and other applications. As part of
the Nittobo Group’s introduction of renewable energy
to reduce environmental impact, NAG is the second
36

Nittobo Group | Integrated Report 2023

The Nittobo Group uses fuel and electricity in the
manufacture of a wide range of products made fromnatural resources and chemical substances. As a result,the main environmental burdens include CO2 from energy
consumption, chemical materials that are emitted into

Group company to install asolar power system (following
the Naganuma Factory of
Paramount Glass ManufacturingCo., Ltd., which manufactures
thermal insulation materials).

the environment as unrecoverable, and waste materials.
The Nittobo Group takes responsibility for conserving theenvironment and strives to reduce its environmental impact
through the rational use of resources.

Results for FY2022
The Nittobo Group conducts an environmental conservation survey once a year among its global consolidated subsidiaries.
At our glass fiber manufacturing sites, which account for the majority of the Group’s CO2 emissions, we conduct a monthly
energy survey. The material balances shown in the diagram below are compiled from environmental impact data for the Nittobo
Group’s global consolidated companies.

INPUT


Ensuring people’s health and the safety of local communities

When the Nittobo Group formulated Big VISION 2030
and the Mid-Term Business Plan (FY2021–2023), we set a
total CO2 emission reduction target of 8% (compared with
FY2013). Since then, we decided to raise the target to 30%
in light of the outcomes of COP26 (held in November 2021)
and the Japanese government’s new reduction target for

Reducing the Nittobo Group’s Environmental Impact

Manufacturing
and processing

6.2 million GJ

CO2 emissions from business
operations (Scope 1 and 2)4Main raw materials

Raw
153 thousand tons materials

NittoboGroup

Products

Recycled materials2

48 thousand tons
Water withdrawn


Recycled
materials

Recycling

309 thousand tons

Waste disposal volume5

12 thousand tons

PRTR substances emitted tothe environment6

45 tons

10.67 million m

3

Materials recycled3

Scope of Data Collection

OUTPUT

Energy input1

Toward a recycling-oriented society

10,000 per ton of CO2 emissions. This figure will be
periodically reviewed when formulating medium-termbusiness plans.
Examples of expenses to which ICP is applied are:- Energy-saving measures for existing equipment- Introduction or renewal of equipment to improveenergy efficiency- Introduction of renewable energy equipment- Conversion of equipment to use low-carbon fuels

In August 2022, we introduced our own internal carbon
pricing (ICP) system.
We aim to accelerate measures to reduce CO2 emissions
by factoring in ICP when evaluating the benefits of capital
investments.
Taking into account cost of renewable energy currently
applied by electric power companies and the Company’s
current CO2 emissions, etc., we have set the ICP at JPY

Established on October 1, 1998. Revised on April 1, 2023.

Companywide Environmental Policy
Contribution to the future of humankind and the global environment

Setting and Operation of Internal Carbon
Pricing System

Water discharged

26 thousand tons

5.70 million m

3Japan business sites:
Data collected from April 2022 to March 2023
Overseas business sites:
Data collected from January to December 2022
1. Energy input: Total energy used in the form of fuel andelectricity at factories, offices and other sites.
2. Recycled materials: Amount of recycled resources received
as raw materials by our factories from other companies.
3. Materials recycled: Portion of waste material generated atfactories and other sites that is used effectively or recycled
for reuse.
4. CO2 emissions from business operations: Amount of CO2
emitted through the consumption of energy at factories andother business sites.
5. Waste disposal volume: Portion of waste material generated
at factories and other sites that is not used effectively andis simply incinerated, sent to landfill sites, or otherwise
disposed of.
6. PRTR substances emitted to the environment: Amountof substances that are subject to Japan’s PRTR Act (theAct on Confirmation, Etc. of Release Amounts of SpecificChemical Substances in the Environment and Promotion of
Improvements to the Management Thereof) emitted to theatmosphere or in wastewater at factories and other sites.

Development of New Environmentally Responsible Products
We will contribute to the reduction of environmental impact through our businesses by making full use of the Nittobo Group’s
technological capabilities and product knowledge.

High-Performance Insulation
Paramount Glass Manufacturing Co., Ltd., a Nittobo Group
company, manufactures and sells glass wool insulation usedin homes and other buildings. Insulation is a material that
contributes to energy saving by preventing outdoor heatand cold from flowing into rooms and by improving theeffectiveness of indoor heating and cooling.
Japan’s Act on the Improvement of Energy Consumption
Performance of Buildings (Building Energy EfficiencyAct) was enacted in 2015 to strengthen global warming
countermeasures. It has since been revised with expanded
and additional provisions. As of 2022, all new residential
construction must conform to the highest conventional

insulation grade by 2025. Thus, there is an increasingneed for insulation with improved performance, and evenhigher thermal insulation ratings are being established.
In response, we have been developing high-performanceinsulation. While maintaining the inherent properties ofglass wool insulation, namely fireproofing, high-durability,
and low CO2 emissions throughout the product lifecycle, wedevelop products with insulation performance superior tothat of other materials that will meet the newly establishedhigh thermal insulation ratings. High-performance insulation
can be expected to improve insulation performance byapproximately 30% compared with conventional glass
wool insulation.
Nittobo Group | Integrated Report 2023

37

Section 1

Introduction

Section 4

Section 2

Section 3

Value Creation Story

Strategies by Business

Section 5

Foundation for Value Creation

Corporate Data

Environmental Initiatives

Recycled Products in the Textile BusinessAs demand for recycled products increases in the textile
industry, customers are increasingly calling for transparency
and proof of safety in supply chains.
In August 2021, Nittobo Advantex Co., Ltd. (NAT)
acquired the Recycled Claim Standard (RCS) certificationfrom Control Union Certifications, an international
certification body.

RCS is an international certification established topromote and inform the public about environmentally
responsible textile materials. It is granted based on
objective verification of traceability in the supply chain, fromraw materials to finished products. With the acquisition ofthis certification, NAT has established a system to provide
certified products and at the same time issue commercial
transaction certificates on request from customers.

Direction for Environmentally Responsible Product Development

Strategy (Opportunities and Risks)With regard to the impact of all of the Group operations
on climate change, we conducted an analysis looking at
2030 and 2050 with reference to scenarios drawn up by
specialized organizations such as the Intergovernmental
Panel on Climate Change (IPCC) and the International
Energy Agency (IEA).
The risks posed by climate change can be divided into
those associated with transitioning to a low-carbon society(transition risks) and physical impacts (physical risks). For thetwo scenarios where the average global temperature rises
either 1.5°C or 4°C above preindustrial levels, we identified
items that are likely to have a high impact in terms ofopportunities and risks. We will continue to review actionplans as appropriate in response to changes in the external
environment, and reflect such changes in our plans.

Social Changes

Opportunities

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

Glass fiber product lines• High strength and high heat resistance products• Bioplastic-compatible composite materials• Glass wool
• Yarn products• Glass fiber cloth for electronic materials

Energy saving• Power trains• Automobile interiormaterials• Automobile structuralcomponents• Aircraft interior materials• Aircraft structuralcomponents• Housing interiors

Reduction of CO2
emissions throughhigh strength andreduced weight• VERRESCREEN™,
architectural membranes• Telecommunications• Computer memory• Servers• Various printed circuitboards (PCBs)

2050

Introducing New
Technologies

Contributing to renewable energy

Glass composition

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

Specialty chemical
products• Polymers• Nanocomposites• Flocculants• Coating agents

Core Technologies

Other Environmental Contributions• Wastewater

Serving diverse needs
with core technologies

Solving a variety of latent purification• Anti-foulingenvironmental issues
properties

Product Lines

Environmental Contributions

Reputation• Increased demand for environmental
measures from customers and investors

4°C Scenario• Further rises in temperature• Increased severity of disasters• Increased sales of products related to thermal insulation, heatshielding and national resilience

Risks
1.5°C

• Increased costs (energy, taxes, raw materials, equipment, etc.)• Restricted sales activities due to tighter regulations• Decreased sales due to alternative technologies and products

4°C• Increased procurement and operational risks, andrestoration costs

Nittobo’s Response
1.5°C• Promote energy conservation, innovate processes andintroduce new technologies• Develop environmentally responsible products andraw materials• Implement recycling

4°C• Strengthen BCP and supply chain

See below for details of scenario analysis.
https://www.nittobo.co.jp/eng/sustainability/environment/climate_change.html

The Nittobo Group’s Sustainability Committee and Risk
Management Committee are responsible for the planningand progress management of CO2 emission reduction
across the Group.

In order to identify and assess the impact of climatechange on the Group’s operations, we identify and analyze
climate change opportunities and risks, discuss them in the
Sustainability Committee, and consider countermeasures.

Metrics and Targets

GovernanceNittobo Group | Integrated Report 2023

4°C

Risk Management

In May 2022, the Nittobo Group endorsed the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD). In line with therecommendations, the Nittobo Group will disclose material information on
climate change as follows.

38

Market•T ransition to a decarbonized, recyclingoriented society

Future Development and Concepts

Initiatives in Support of the TCFD Recommendations

The Sustainability Committee, chaired by the Representativeand Chief Executive Officer, was established in April 2021
as a body to implement the Nittobo Group’s initiatives
to address climate change. The Sustainability Committee
meets every quarter to plan and manage the progressof activities, such as gathering information on climatechange issues, identifying possible risks, formulating
countermeasures, and promoting internal training andawareness programs. Important matters discussed anddecided by the Sustainability Committee are reported to
the Board of Directors for deliberation as necessary.

Technology•S witch to new energy sources•P romotion and expansion of high-speed,
high-capacity telecommunications• Increased use of electric vehicles

Rechargeable battery materials• Insulation materials• High-performance insulation materials

Functional compounds•P romotion and expansion ofrenewable energy• Implementation of carbon taxes•S tronger environmental regulations• Components for renewable energy power generation

Waste reduction and recycling
Removal of harmful substances• Waste-free glass products
from the environment
Insulation• Low thermal expansion, high elasticity glass fiber• Environmentally responsible glass fiber• Low-dielectric glass fiber

Policies andregulations

Glass Fiber: Other Environmental Contributions
Environmental benefits
from bioplastics

1.5°C• Market expansion (electric vehicles, telecommunications,renewable energy, etc.)• Increased opportunities for existing products (thermal
insulation, heat shielding, etc.)• Increased demand for environmentally responsible products

1.5°C Scenario• Introduction of recycled glass• Introduction of new materials

Board of Directors
Representative and Chief Executive Officer
Sustainability
Committee
Risk Management
Committee

Glass Fiber
Division

MedicalDivision

The Nittobo Group has identified “providing products andservices that contribute to the environment and energy”
and “adapting to climate change and a resource-recycling
society” as material issues to address in the course ofits business activities. We are working to reduce climatechange-related environmental impact and prevent global
warming by improving productivity, promoting energysaving activities, efficiently using energy through recycling,
and utilizing solar power generation. To achieve carbon
neutrality by FY2050, we are promoting initiatives thatuse various means to advance the decarbonization of our
supply chain and, in turn, broader society.

CO2 Emission Reduction Targets
FY2030FY2050−30%

Achieve
CarbonNeutrality

Compared with
FY2013 levels,
Scope 1 and Scope 2

TextileDivision

Nittobo Group | Integrated Report 2023

39

Section 1

Introduction

Section 4

Section 2

Section 3

Value Creation Story

Strategies by Business

Section 5

Foundation for Value Creation

Corporate Data

Active Roles for Diverse Talent
To ensure the Nittobo Group remains the “Best Partner” for all stakeholders and continues to contribute to the realizationof a more prosperous world, we believe it is important to value and harness the capabilities, thinking, and views of every
employee in the Group. In line with that approach, the whole Nittobo Group strives to motivate all employees based on
respect for different people, regardless of gender, age, SOGI,* nationality, disabilities, or other individual identities. Bringing
about such an environment and organizational culture will create diverse value and transform our business.
Based on the Nittobo Declaration, the Nittobo Behavior Program, and the Nittobo Code of Conduct, management andthe Human Resources Department work together to actively identify and resolve any issues through direct dialogue withfrontline sites and employee awareness surveys. As an indicator of progress in this regard, one of the targets of the MidTerm Business Plan is to raise the employee engagement score.
* SOGI: Sexual orientation and gender identity

Human Resource Development
To utilize the maximum potential of the Company’s diverse talent, we have been carefully implementing talent management
tailored to each individual, including measures such as continuously improving both the personnel system to increaseindividual motivation and the training system to foster growth.
Under Big VISION 2030, we will develop next-generation leaders, global talent and professional talent. We will actively
expand management measures to promote individual motivation, self-driven learning, and career development under thetheme of fostering human resources that generate innovation, which is the foundation for business growth and driving reform.
Moreover, to develop digitally capable personnel, we are conducting online digital transformation (DX) training for a broad
range of participants, not just employees in technical roles.

Education and Training System: Investment in Education and Training Increased 1.5 Times from FY2020

Initiatives to Support Balancing Childcare andNursing Care
It is important to create an environment where employees
can balance work with childcare and nursing care
responsibilities, and continue to fulfill their potential. We
are implementing measures to support this balance among
diverse talent.
Specifically, we have a maternity/paternity leave system,
childcare leave system, shorter working hours system, andnursing care leave systems. All eligible female employees
take maternity leave and childcare leave, and many male
employees take advantage of the paternity leave system
when their partner gives birth. In addition, for employees
working in the Tokyo metropolitan area, we offer the use of
a nanny service to counter the problem of daycare waiting
lists. We have also introduced a flexible working system forchildcare, which can be combined with the shorter working
hours system.
Most recently, in July 2021 we introduced a systemthat allows employees to take up to two weeks as paid

40

Nittobo Group | Integrated Report 2023

Employment of People with Disabilities
It is increasingly important for companies to employ people
with disabilities. The Company already meets the legally
mandated employment rate of 2.3%. (As of June 1, 2023,
the rate was 2.35%.)
As part of our efforts to employ more people withdisabilities, we strive to ensure safe working environments
at our factories. In 2018, we established a work support
office at the Tokyo Headquarters, and we are promoting
stable employment under the supervision and support ofpermanent employees.

Work after the Age of 60
The decline of the working-age population is a majorsocial issue in Japan, where the birthrate is declining andthe population aging, and competition to secure talent islikely to become more intense. Against that backdrop, we
will enhance programs and mechanisms that encourage
employees to continue their careers at Nittobo for as longas possible. We are focusing particularly on enhancing
HR programs and benefits, and developing a working
environment to enable employees to continue working withhigh levels of motivation after the standard retirement ageof 60. We will also implement initiatives so that throughout
their careers employees can be glad they chose Nittobo.

Advisor training
Initial training (1st–3rd years)

Self-development support (correspondence courses)

Career design training

Manufacturing Meister Program

Leader development
external training
with other companies

Common practical skills development

Genba (frontline)
leader training

Training female
candidates for
management
positions

Specialized skills development

Future Leaders
Development:
Primary

Sales training

Management
pre-promotion training

Dispatch to overseas research institutions

Newly promoted
manager training

Diversity
awareness
activities(lectures)

Selfdevelopment

Specialized training

DX training

Future Leaders
Development:
Advanced

Diversity
Compliance

GlobalOverseas trainee system

Promotion of management andleadership skills growthManagers

Coaching

Interviews at age 30
Development ofprofessional talent

Maintaining and promoting a workplace environment inwhich women play active roles is an important issue for thegrowth of all employees, regardless of gender. We actively
promote the hiring of women, as shown by the ratio of
women among new graduates we hire, which has recently
been around 50% for office staff and 33% for technical staff.
In addition, the ratio of female managers has been steadily
increasing, reaching 5.0% in FY2022. We have set a targetof 10% for the future, and we are systematically training andpromoting the next generation of executives.

childcare leave of absence, as well as a system that allows
childcare leave to be split across two periods. These efforts
resulted in 47.1% of male employees taking paternity leave
in FY2022. We will continue to enhance the system andfurther encourage male employees to take advantage of it.

Middle-rank employees

Initiatives for Women’s Advancement

Junior employees

Discussion by employees with different perspectives and personalities can lead to success in meeting diverse customer
needs and providing peace of mind and confidence. Employees are the driving force that supports the Nittobo Group’s
sustained growth, and each member of our diverse workforce is a valuable asset. Nittobo considers it important to create anorganization accepting of diversity—an organization in which all individuals can fully demonstrate their capabilities. One wayof laying the foundation for such a diverse organization is to respect and promote diversity and inclusion.

Appraiser/
Labor management training

Selective training

Language training (online English conversation, TOEIC)

Training by job rank

Diversity and Inclusion

Newcomer training for
new graduates

Join Nittobo

Development of the Next Generation of Leaders
Conventional stratified training for personnel is provided
for new graduate entrants, junior employees, and newly
promoted management personnel, through to department
and division managers. To complement this standard
training, Nittobo launched its Successor Development
Programs in FY2018. These programs are designed to matchthe growth stage of each employee, focusing on junioremployees and middle-rank employees, in order to develop
future leaders. The programs consist of intensive training forbusiness skills and action learning based on practical issues
that we need to resolve. The training in these programs
promotes the development of employees’ understandingof the role of senior managers and skills. In today’s
unprecedented management environment, developing talent
who can transform business paradigms is indispensable toour business strategies. As such, Nittobo will systematicallydevelop the leaders to drive our operations.

Development of Global Talent
To prepare for further globalization of the Company’sbusiness, it is essential that Nittobo fosters talent and createsa corporate culture that enables diverse individuals to fulfill
their potential. We are enhancing mechanisms that support
the self-directed efforts of individuals to become who theywant to be, such as providing opportunities and systems

for employees to engage in online English classes, and totravel overseas to study foreign languages, participate ininternships, work at international research institutes, or takeMBA courses abroad. We are also launching an overseas
trainee system that utilizes our overseas bases and will begin
operation in FY2023.

Development of Professional Talent
On the path to becoming a manager, Nittobo employees
pursue development as specialists (professionals) in areasof their choice and work to establish their core skills. We
introduced the Meister Program in FY2018 at manufacturing
sites and are systematically promoting skills transfer. For
sales representatives and diagnostics medical representatives(DMRs), who have frequent contact with customers, we
provide solutions-based training in solving problems
facing customers and link this training to improvement ofprofessional skills that enable these employees to further
enhance customer satisfaction. We have significantly
expanded our subsidy system for employees seeking toobtain nationally recognized qualifications necessary for work
(including a congratulatory gift of up to JPY 500,000 uponsuccessful acquisition), and provide subsidies for distancelearning, including e-learning. We foster a culture of selfdriven learning and provide a wide range of support for
improving individual skills.
Nittobo Group | Integrated Report 2023

41

Section 1

Introduction

Section 4

Section 2

Section 3

Value Creation Story

Strategies by Business

Section 5

Foundation for Value Creation

Corporate Data

Active Roles for Diverse Talent

Expansion of Management Measures to Develop
Human Resources

Workstyle Reform and Health Management

In addition to providing training courses, an important partof any human resources development policy is to encourage
individuals to be motivated to learn, to carefully consider
their career aspirations, and to implement development
measures that align with their ideas and expectations.
To this end, we have systematically implemented oneon-one meetings between superiors and subordinates
as an important communication tool. In addition, we are
implementing management measures to promote growth,such as by establishing the Human Resource Development

Committee, which includes supervisors, management, andrepresentatives from the Human Resources Department.
The committee discusses future training measures andcareer development for employees. We have also instituted
interviews with employees at age 30, after they haveexperienced a range of assignments, to reflect on theircareers and discuss future career development. In addition,
we are in the process of expanding our management
training (coaching, etc.) for managers who will be responsible
for these activities.

Assigning theright people to theright positions

The Human Resources Development

Human
Resource
Development
Committee

Committee deliberates on how to match

Human Resource
Development Committee

the needs of the organization with theunique skills and future career aspirations

Individualof each individual by utilizing selfassessments and the interview at age 30.

Organization

Confirmation ofself-awareness andcareer aspirations

The committee also considers future
talent development plans and allocations.

Understandingorganizational needs

Promotion of Work-Life Balance
The average monthly overtime per employee at Nittobo in
FY2022 was 6.8 hours, much lower than the manufacturingindustry average. Furthermore, no employees exceeded thestatutory limit on overtime hours. To provide employeeswith job satisfaction and enable them to demonstrate theirbest performance, while maintaining an appropriate worklife balance, we will continue to ensure a good working
environment. Also, in Japan, which has a declining birthrate
and aging population, it is important to provide a workerfriendly environment for employees who have childcare or
nursing care responsibilities. We are enhancing programs
that enable employees to flexibly accommodate these andother life events, such as an annual paid leave system and a
flextime system that eliminates mandatory core hours. With
work practices in general expected to undergo far-reachingchanges, we aim to achieve a high level of both work-lifebalance and productivity improvements by reviewing
regulations and systems, automating processes, formalizing

workflows, shifting to paperless operations and simplifying
document approval processes. These innovations will
promote the efficiency of back-office operations. Throughthese and other efforts, we will establish and improve newwork styles.

Average Monthly Overtime Hours(Hours)20

16

Nittobo’s average is less than half the
manufacturing industry average of 16 hours.

12
8

6.8

8.2

7.6

6.8

FY21

FY22

5.7

4

0

FY18

FY19

FY20

Technology and humanresources map, definition ofnecessary skills, business needs

Self-assessment andinterview at age 30

Health Management
At the age of 30, when an employee hasInterviewat age 30

asked to identify their career goals. Then,they reflect on the relationship between theircareer goals and development plan basedon the direction they intend to pursue.

Entry training

had a full range of work experience, they are

3rd year
Initial training
for first-year
throughthird-year junioremployees
Departmental
OJT/specialized
education

Departmental
OJT/specialized
education
Proficient,professional
human
resources

Age 30Age 35Development plan A

Career goalA

Development plan B

Career goal
B

Performance evaluation interview (annual)One-on-one meeting (monthly)

Financial analysis training for third-year employees

42

Nittobo Group | Integrated Report 2023

In-house workshops

Subordinate

Supervisor

Interim interview (annual)

Health in mind and body is the cornerstone of employee
job satisfaction. In cooperation with the Nittobo Health
Insurance Association, we strive to promote employee
health by providing opportunities for physical and mental
refreshment, such as free-of-charge use of a sports gym,

health checkups administered by post, and support
for family recreation activities. We have also taken out
comprehensive medical expense insurance to alleviate
the expense burden on employees in the event of injury
or sickness.

Focus: Comment from an Employee

Interview for setting individual goals (annual)Measuresto Strengthen
CommunicationKey
positionInterview

Join
Nittobo

I joined Nittobo because I felt it was a company that understood my desire to take on multifaceted challenges beyond mygraduate school research. As a new employee, I remember receiving a welcome message from the Company and being
deeply impressed by the corporate culture of actively taking on the responsibility for
fostering each individual.
My current workplace is a department with a relatively small number of people, where
team members can count on the full support of their manager. It is a homey environment
where we respect each other and it is easy to balance work life and private life. The
atmosphere also makes it is easy to take paid leave, and in the future I would like to use
the childcare support system to spend valuable time with my family.
Regarding diversity, I feel that the environment is increasingly inclusive and steadilychanging toward being accepting of a wider range of diversity. I believe that being
surrounded by people with various fields of expertise increases diversity and expands
the scope of discussions. I myself strive every day to be a positive influence on other
employees.
Recently, I have begun studying for the future, including relevant economic topics, so I
can consider matters from a greater variety of viewpoints. Aside from research tasks, I findYikelamu Alifu
the daily experience of interacting with customers to be stimulating. By studying economics
Scientific & Technicalfundamentals, trends, and market movements, I will be better able to help customers andAffairs Department
NITTOBO MEDICAL CO., LTD.
broaden my knowledge, which I hope will in turn lead to future career and personal growth.

Nittobo Group | Integrated Report 2023

43

Section 1

Introduction

Section 2

Section 3

Value Creation Story

Strategies by Business

Section 5

Corporate Data

Safety Initiatives

Sustainable Procurement

The Nittobo Group established Action Guidelines for safety and health in 2017, and is enhancing measures to ensure a safe
and comfortable working environment that protects the physical and mental health of its employees, who are the driving
force for the Group’s business activities.

The Nittobo Group is contributing to a sustainable society by collaborating with suppliers to implement sustainableprocurement in the supply chain.

Action Guidelines

Formulation and Implementation ofa Sustainable Procurement Policy

Establishment of a Safe Working Environment
Perform risk assessments to minimize or eliminate
hazardous and harmful factors and invest the necessary
management resources to maintain and improve safe andhealthy working environments.
Promotion of Health Maintenance
Proactively assist in the maintenance and promotion of thehealth of employees both mentally and physically by
establishing a pleasant workplace in which they can freely
and willingly share and discuss their opinions, and by
preventing harassment and the assignment of excessive
workloads.

Compliance with and Management of Labor Policies
Comply with laws, regulations and other standards
regarding safety and health, and set and implement
internal safety policies and standards.
Implementation of Regular Assessments
Verify, implement and enhance safety and healthmanagement systems through regular safety andhealth assessments.
Training and Raising Awareness
Create safe and healthy working environments across theorganization by thoroughly providing all employees withsafety and health training and ensuring that safety andhealth guidelines are understood.
Established on July 1, 2017.

Implementing sustainable management requires strong
cooperation with suppliers of raw materials, production
equipment, energy, and other commodities. We haveformulated the Nittobo Group Sustainable Procurement
Policy, which is our policy for sustainable supply chain
management. We will continue to promote mutual
development with our suppliers while raising awareness sothat we can share our ideas and challenges regarding our
mission of contributing to a sustainable society.
We also conduct surveys to identify circumstances thatpose risks to sustainable procurement in the supply chain
and make proposals for resolving issues. Based on survey
results, we provide feedback to survey recipients, includingcomments and improvement requests, and work to further
enhance sustainable business activities.

Management System
We established the Central Safety and Health Committee, whose members comprise representatives of Nittobo and thelabor union, to discuss and formulate action policies based on the Action Guidelines, and to confirm and summarize thestatus of activities at business sites. The committee also submits reports to the Board of Directors and the Risk Management
Committee (chaired by the Representative and Chief Executive Officer).
Board of Directors

Reporting

Representative andDirection Chief Executive Officer
Risk Management Committee
Business divisions

Business sites
Safety and healthcommittees

ReportingDirection

Chairperson: Representative andChief Executive Officer

Business sites
Safety and healthcommittees

Information
sharing
Assessment andimprovement

Activities, planning, implementationand management

We are working to establish an internal standard thatmandates green procurement whenever possible. This
involves selecting and purchasing environmentally
responsible and sustainable products designated by the Eco
Mark label. In addition, we promote green procurement by
ensuring Groupwide awareness of the main environmental
labels attached to goods and services that contribute to
reduced environmental impact, which are a yardstick ofwhether a product is environmentally responsible.
The Purchasing Department is responsible for managing
the Nittobo Group’s procurement risk. Department
personnel visit all Group business sites to communicate andmonitor procurement risks, including those related tosustainable procurement. The department also works toraise awareness of supply chain management amongpurchasing managers at all sites and supports activities forfurther improvement.

For the Nittobo Group Sustainable Procurement Policy:
https://www.nittobo.co.jp/eng/sustainability/pdf/SustainableProcurementPolicy.pdf

Harmonious Coexistence with Society

Chairperson: Officer appointed by the
Representative and Chief Executive Officer
Members: Drawn from Nittobo and tradeunion, appointed by the Representative andChief Executive Officer

The Nittobo Group’s corporate philosophy calls upon us to create healthy and more comfortable lifestyles. This involves
developing together with all of our stakeholders and society as a whole, including shareholders, investors, local governments
and regional communities, and implementing various initiatives to realize a more prosperous world.

Secretariat of theCentral Safety and Health Committee

Community Contribution

Support for Education

The Nittobo Ground was used as a temporary storage site
for decontamination waste in support of post-disasterreconstruction in Fukushima Prefecture. The site underwent
restoration work in 2021 and is once again available forCompany and general use. In addition to use by employees,
the sports ground also hosts a wide variety of local sports
competitions, including youth baseball and soccer events.

Staff members of the Fukuyama Enterprise Center inFukushima Prefecture conduct classes at local elementary
schools, and also conduct science classes for children as
part of community engagement through science. We alsooffer factory tours for students and other visitors.

Nittobo Fukushima Factory Ground (Fukushima City,
Fukushima Prefecture)

Elementary school class(Koriyama City, Fukushima
Prefecture)

Human Resources Department andRisk Management Department

Policy formulation andsafety and health assessments

Initiative

Description

Workplace Safety and Health Assessments

Business divisions and headquarters departments objectively assess safety and health activities in terms of status,
behavior and awareness. Business sites work to improve items highlighted in the assessments, which helps tostandardize and enhance safety management across the Group.

Safety Improvement Month

We have designated July as Safety Improvement Month, during which we implement various initiatives throughout the Group to reaffirm the importance of occupational safety. These activities include communications
regarding safety from senior management, safety awards, and safety activities in which all employees participate.

Enhanced Risk Assessments

We have launched initiatives to reflect examples of intentional rule violations and human error in risk assessments
in order to identify potential hazards associated with employee behavior. We are assessing risks at existing
facilities and implementing measures to reduce risks, starting with the highest priority facilities.

Workplace Fire Risk Assessments

Based on the third-party perspective provided by outside experts, we work to prevent fires by having fire risks
evaluated and receiving advice on risk reduction with regard to management systems and facilities, identify issues
and make improvements.

Groupwide Information Sharing

We share information including the results of safety and health assessments and fire risk assessments, safety andhealth best practices, and reports on disaster countermeasures in a standard Groupwide format. Doing so
enables us to reflect the experience and knowledge of the Group in the activities of each business site.

Nittobo Group | Integrated Report 2023

Examples of Sustainable Procurement Initiatives

Central Safety and Health Committee

Major Initiatives in FY2022

44

Section 4

Foundation for Value Creation

Children’s science class (Koriyama
City, Fukushima Prefecture)

Nittobo Group | Integrated Report 2023

45

Section 1

Introduction

Section 4

Section 2

Section 3

Value Creation Story

Strategies by Business

Foundation for Value Creation

Section 5

Corporate Data

Directors and Executive Officers
Directors (As of June 28, 2023)
Director, Representative and Chief Executive Officer

Director

Yuichi Tsuji

Kazuhiko Igarashi

5

Career Summary

Career Summary

Oct.

Apr.
Mar.
Apr.

Apr.
Jun.
Nov.

Jun.
Feb.
Jun.

2013	Joined the Company
General Manager of Accounting and Finance Department
2014	Operating Officer and General Manager of Accounting and
Finance Department
2014	Executive Officer, General Manager of Corporate Business
Planning Department and Responsible for Corporate Risk
Management
2014	Executive Officer, General Manager of Corporate Business
Planning Department, Responsible for Corporate Risk
Management, Human Resources Department, Information System
Department, Compliance Management Department, Purchasing
Department, Osaka Branch and Nagoya Branch2015	Director and Executive Officer (current)
2016	Representative Executive Officer
2016	Representative and Chief Executive Officer (current)

Apr.
Apr.
Apr.
Feb.
Apr.
Apr.
Apr.

Director

Toyoshi Nishizaka

6

Career Summary

2
4

3

6

5

1

Apr.
Jun.

7

Feb.
Jun.
Oct.
Apr.
Jan.
May
Apr.
Jun.

1981 Joined the Company
2003	General Manager of Planning & Administration Department,
Glass Fiber Division2007 General Manager of Human Resources Department
2008	Director and General Manager of Human Resources Department
2008 Operating Officer and President of Building Materials Division2010	Managing Operating Officer and President of Environmental
Division
2011	Managing Operating Officer and stationed at Main Branch(Fukushima)2012	President, Representative Director of Nittobo Allied Service Co., Ltd.
2013 Advisor and Head of Fukuyama Enterprise Center2014 Director (current)

Sadayoshi Fujishige

1

Agasa Naito

Career Summary

Career Summary

Mar.
Mar.

Oct.

1969 Joined Lion Fat & Oil Co., Ltd. (currently Lion Corporation)
1996	Director, Executive General Manager of International Division of Lion
Corporation
Mar. 2000	Executive Director, Executive General Manager of Home Products Sales
Headquarters of Lion Corporation
Mar. 2002	Representative Director, Senior Executive Director, Responsible forHome Products Business, Executive General Manager of Home
Products Sales Headquarters of Lion Corporation
Mar. 2004 Representative Director, President and CEO of Lion Corporation
Mar. 2006	Representative Director, President and CEO, Chairman of the Board of
Directors, Responsible for Home Products Business of Lion CorporationJan.
2012	Representative Director, Chairman and CEO, Chairman of the Board of
Directors of Lion CorporationJan.
2014	Representative Director, Chairman, Chairman of the Board of Directorsof Lion Corporation
Mar. 2016 Advisor of Lion CorporationJun.
2020	External Director of SATO HOLDINGS CORPORATION (current)
		 External Director of the Company (current)
Mar. 2021 Special Consultant of Lion Corporation (current)Jun.
2021	Outside Member of the Board (Member of the Audit and Supervisory
Committee) of TV Asahi Holdings Corporation (current)

Director

2

Career Summary

Apr.
Apr.
Jun.

External Director
 irectors who meet the Company’s criteria for independence and for whomD
the Company has submitted an “Independent Directors/Auditors
Notification” to the Tokyo Stock Exchange
Director not concurrently serving as an Executive Officer
Member of Nomination Committee
Member of Remuneration Committee
Member of Audit Committee

May
Jun.
Apr.
Jun.
Oct.
Jun.
Aug.
Jun.

3

2001	Registered as an attorney
Joined Nagashima Ohno & Tsunematsu
2008 Registered as an attorney at New York State Bar Association2011 Joined TANABE & PARTNERS
2013 Partner of TANABE & PARTNERS (current)
2015	Outside Audit & Supervisory Board Member of BOOKOFFCORPORATION LIMITED2018	Outside Audit & Supervisory Board Member of BOOKOFF GROUPHOLDINGS LIMITED2020 External Director of the Company (current)
2021	Outside Director (Audit & Supervisory Board Member) of BOOKOFFGROUP HOLDINGS LIMITED (current)
2022 Supervisory Director of GLP J-REIT (current)

Executive Officers (As of July 1, 2023)
Representativeand Chief
Executive Officer

Yuichi Tsuji*CEO

Representative
Senior Managing
Executive Officer

Hiroyuki Tada

Responsible for the Corporate Management Division, General Manager of the Textile
Division and the Corporate Business Planning Division

Kazuhiko Igarashi*

President of Research & Development Headquarters, Head of Digital Transformation
Strategy Office and Environment Technology Strategy Office, and Head of the Fukuyama
Enterprise Center

Tatsuo Sakae

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

Hisanobu Hayashi

General Manager of the Glass Fiber Division

Managing
Executive Officers

Deputy General Manager of the Glass Fiber Division and General Manager of the

Director

Yasuharu Nakajima

4

Senior Executive
Officers

Takanobu Matsunaga Composite Materials Division and the Product Planning and Development Division
Yasushi Okahisa

Responsible for the Corporate Business Planning Department, the General Affairs
Department, the Risk Management Department, the Legal Department, the Osaka
Branch, and the Nagoya Branch

Yuji Sugama

Vice President of Research & Development Headquarters, Responsible for Medical
Research & Development of the Medical Division

Akimasa Kajita

General Manager of the Glass Fiber Division Production Headquarters, and President andRepresentative Director of Nitto Glass Fiber Manufacturing Co., Ltd.

Executive Officers Hiroki Kajikawa

Responsible for the Human Resources Department, the Corporate Communication Department,
the Accounting and Finance Department, and the Information Systems Department

Career Summary

Apr.
Feb.
Apr.
Apr.

1990 Joined the Company
2007	General Manager of the Glass Fiber Yarn Production Department
2011	General Manager of the Glass Fiber Division Manufacturing
Control Department
2013	General Manager of the Glass Fiber Division Technology andProduction Headquarters
2014	General Manager of the Glass Fiber Division Production
Headquarters and Deputy General Manager of Fukushima
Factory
2015	Executive Officer, General Manager of the Glass Fiber Division
Production Headquarters and Deputy, General Manager ofFukushima Factory
2016	Executive Officer, General Manager of the Glass Fiber Division
Production Headquarters and General Manager of Fukushima
Factory
2020 Managing Executive Officer, President of Glass Fiber Division
2021	Managing Executive Officer, President of Glass Fiber Division andGeneral Manager of Technology Headquarters
2022	Managing Executive Officer, President of Research andDevelopment Headquarters, Head of DX Strategy Office andEnvironment Technology Strategy Office (current)
2022 Director (current)
2023 Head of the Fukuyama Enterprise Center (current)

Director

Director

Hiroshi Kagechika

Jun.
Jul.

7

1972 Joined NKK Corporation (currently JFE Holdings, Inc.)
2002 Vice President of NKK Corporation
2003 Vice President of JFE Steel Corporation2005	Senior Vice President (Director of Steel Research Laboratory) of
JFE Steel Corporation2009	President and Representative Director of
JFE Techno-Research Corporation
2015 Advisor of JFE Techno-Research Corporation
2020 External Director of the Company (current)

Oct.
Apr.
May
May
Sep.
Sep.
Jul.
Jun.
Jul.

1983	Joined Tetsuzo Ota & Co. (currently Ernst & Young ShinNihon LLC)
1987 Registered as a certified public accountant
1998	Partner of Showa Ota & Co. (currently Ernst & Young ShinNihon LLC)
2004	Senior Partner of ShinNihon & Co. (currently Ernst & Young
ShinNihon LLC)
2008	General Manager of 6th Audit Department of Ernst & Young
ShinNihon LLC
2010	Managing Director, General Manager of 2nd Audit Business Division,and General Manager of Knowledge Headquarters of Ernst & Young
ShinNihon LLC
2021 Partner of Ernst & Young ShinNihon LLC
2022 External Director of the Company (current)
2022	Outside Director (Audit and Supervisory Committee Member) of
Business Brain Showa-Ota Inc. (current)

Katsuya Hatanaka

General Manager Aide of the Medical Division and Global Consolidated Management

Masaki Ito

Deputy General Manager of the Glass Fiber Division Production Headquarters, General
Manager of the Yarn Division, and President of NITTOBO ASIA Glass Fiber Co., Ltd.

Koichi Nakamura

Vice President of Research & Development Headquarters and Head of Fiber R&D Center* Concurrently serving as Director

46

Nittobo Group | Integrated Report 2023

Nittobo Group | Integrated Report 2023

47

Section 1

Introduction

Section 2

Section 3

Value Creation Story

Strategies by Business

Section 4

Foundation for Value Creation

Section 5

Corporate Data

Comments from an External Director
Q. H
 ow would you evaluate the progress of Nittobo’s efforts to strengthen humanresources in pursuit of creating global No. 1 niche businesses?

To further strengthen human resources, Nittobo must create
systems and foster an organizational culture where employees
can develop their careers and play active roles.

By providing appropriate advice, I will
help Nittobo lay the groundwork forsystems and an organizational culture
where diverse talent can play activeroles, which will foster innovation andraise employee engagement.

In the 100 years since Nittobo was founded as asilk spinning company, it has taken on challenges
under the motto, “Let’s turn anything into fibers,”
and achieved world-first production of glass fiber
on an industrial scale. The Company has grown byinnovating in response to the demands of the times,
from researching chemical fibers to boldly trying
new technologies, which laid the foundation for
the Medical Business. To continue creating global
No. 1 niche businesses in the future, Nittobo must
maintain the spirit of taking on new challenges,
listen to the market on a global level, capture
niche needs, refine its technologies, and provide
products that meet the demands of the times—allof which are part of its DNA. Generating innovation

Agasa Naito
External Director

48

will require globally adept talent, professionals who
can develop new technologies, and leaders whowill be the driving force. As Japan’s working-age
population rapidly declines, Nittobo is working tohire and retain diverse talent and to create systems
and an organizational culture that help employees
develop their careers and play an active role
regardless of gender or nationality. Improving thequality of management is also an important issue.
Nittobo has been working to promote diversity andinclusion, including through women’s advancementin the workplace. To go a step further, I believethat creating an organization where diverse talentcan play an active role will generate innovation andnaturally improve employee engagement.

Q. How would you evaluate Nittobo’s governance system and what is your role in it?

Q. In closing, what message would you like to convey to stakeholders?

The composition of the Board of Directors is balanced andmembers can give their opinions freely and openly. I myself strive
to provide advice from an independent and objective standpoint
based on my knowledge and experience as an attorney.

Amid a difficult business environment, the Nittobo Group aims
to quickly respond to the demands of the times and continuously
create and provide new value, and thereby earn the trust of
all stakeholders.

Nittobo has adopted a governance system thatemphasizes monitoring functions, and as a company
with a nomination committee, etc. it works to
improve the flexibility of business execution,
ensure management transparency, and strengthensupervisory functions. A majority of the directors(four of seven) are independent external directors,
and the Board has a balanced composition that
includes experts in the fields of management, R&D,
finance and accounting, and legal affairs. All four
independent external directors also serve on the
Nomination Committee, Remuneration Committee
and Audit Committee. At Board and committee
meetings, members engage in frank discussions
that leverage their unique career perspectives,
specialized knowledge and experience. In my case,
I express my opinion from an independent andobjective standpoint based on my knowledge andexperience as an attorney. At the same time, I try

As the roadmap to 2030, Big VISION 2030 callson Nittobo to continue creating global No. 1
niche businesses that contribute in the areasof Environment & Energy, Digital Society, andHealth, Security & Safety with the goal of building
a more sustainable society. To make this vision a
reality, the Mid-Term Business Plan lays out a basic
strategy of four key measures: implement growthstrategies, reinforce our management foundation,
take action for environment issues, and develop
human resources that generate innovation. To
date, the Nittobo Group has steadily executed thisbasic strategy, proceeding with structural reformsof composite materials operations in the Glass
Fiber Business and of the Textile Business, transfer
of its beverage business, and the sale of land andother fixed assets. The foundation for growth has
been steadily laid. Having had the opportunity

Nittobo Group | Integrated Report 2023

to reflect diverse values and consider whether theCompany’s approach to business execution canbe rationally justified to shareholders and otherstakeholders. In that respect, this year I have once
again made statements and engaged in discussions
about the Nittobo Group’s governance structure.
Before each Board of Directors meeting,briefings are provided to explain the agenda
in advance and serve as a forum for informal
discussion. For example in such discussions in
FY2022, based on my belief that a lack of progress
on issues of diversity and inclusion will hamper a
company’s efforts to hire talented people, I raised
the point that increasing the ratio of women in
management positions should be seen as morethan just a target, rather that it is an essential part ofcreating an organization in which diverse individuals
can play an active role, which will in turn lead togreater innovation.

to visit offices, factories, and R&D centers, I haveseen the high level of technological capabilities
and the depth of knowledge that Nittobo has
accumulated and passed down, as well as theCompany’s enthusiasm for rising to the challengeof new technologies that will drive sustainablegrowth. Today, we are faced with environmental
disruptions on a global scale, and the Company’s
operating environment continues to be difficult.
The future remains uncertain due to soaring prices
for raw materials, fuels, and other resources, as well
as sluggish demand in the electronic materials field.
In these changing times, Nittobo will continue tocreate and provide new value in response to thedemands of the times as it aspires to be a company
that gains the trust of all stakeholders in the pursuitof client satisfaction. I hope that stakeholders willcontinue to support the Company moving forward.

Nittobo Group | Integrated Report 2023

49

Section 1

Introduction

Section 4

Section 2

Section 3

Value Creation Story

Strategies by Business

Section 5

Foundation for Value Creation

Corporate Data

Corporate Governance
The Nittobo Group constantly updates its corporate governance system with the aim of creating a fair and highly transparent
management organization in order to conduct business activities with emphasis on trust from our shareholders, investors andother stakeholders.

Corporate Governance System
Diagram of Corporate Governance System

Timeline of Corporate Governance Enhancements

Corporate
governancesystem

2011

2012

2013

Company with a boardof directors

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Company with a nomination committee, etc. (from June 2014)

Nomination Committee (Chair: External director)

Committees

Audit
Committee(Chair:Internal
director)

Directors

7

6

Of which,1
external directors

1

Audit Committee (Chair: External director)

8

2

3

4

(half)Of which,
women

6

7

4

3

4

Election anddismissal/
Auditing

Nomination Committee
Reporting andcoordination

Audit Committee Secretariat

Election anddismissal/
Auditing

Remuneration Committee
Audit Committee

Representative and Chief Executive Officer
Risk Management
Committee

Reporting and coordination
Reporting

Sustainability
Committee

Internal Auditing Office
Auditing

Executive Officers
Medical Division

TextileDivisionLife Science BusinessTextileBusiness

Glass Fiber Division
Glass Fiber
Yarn Business

Glass Fiber
Glass Fiber for Industrial
Cloth Business
Materials BusinessCorporate Research &Business Development
Planning Headquarters
Department (NI-CoLabo)(more than half)

1
Briefings before Board of Directors meetings

Operation ofBoard of Directors

Revisionsto systems,
regulations

7(more than(half)
half)

Board of Directors

Auditing corporation
Accounting auditor

Reporting and coordination

Remuneration Committee (Chair: External director)—

Election and dismissal

Election and dismissal

Execution functions(Year)

Supervision functions

General Meeting of Shareholders

Composition of Board of Directors and Three Committees
Board of Directors

Nomination Committee

Remuneration Committee

Audit Committee(Chair: External director)(Chair: External director)(Chair: External director)

4 external directors(1 woman)

4 external directors(1 woman)

4 external directors(1 woman)

Board of Directors evaluation of effectiveness
Formulation of Executive Meeting regulations
Introduction of performance-linked stock remuneration plan

4 external directors(1 woman)

3 internal
directors

1 internal
director

1 internal
director

1 internal
director

Board of Directors

Overview of Corporate Governance System and Reasons for Employing the System
The Company introduced an executive officer system inJune 2003 and other systemic measures to maximize theeffectiveness of consolidated management by invigorating
the Board of Directors and speeding up decision making.
Since June 2008, management has been conducted with anemphasis on the clarification of the functions and roles ofmanagement and business execution.
In addition, with the approval of the Ordinary General
Meeting of Shareholders on June 26, 2014, Nittobo
adopted the structure of a company with a nomination

50

Nittobo Group | Integrated Report 2023

committee, etc. By doing so, the Company further
clarified the separation of supervision from execution andaims to strengthen supervisory functions, ensure highly
transparent management, execute business swiftly, andincrease the flexibility of management. Furthermore, theestablishment of a system that enables it to more precisely
meet the expectations of stakeholders, such as customers,
shareholders, suppliers, and employees, will enable theCompany to further enhance its corporate value.

Regarding the Board of Directors, the Company’s basic
policy is that it shall comprise internal directors, who areappointed from within the Company and have capabilities
and knowledge of each business and management ingeneral, and at least the same number of external directors,
who are able to express opinions that can enhance
governance from the perspectives of diverse stakeholders
and society. This balance enables appropriate supervisionof the Company’s business execution by the Board of
Directors as a whole. Furthermore, the Board of Directors
shall have no more than 12 members, as specified in its
Articles of Incorporation. At the time of publication of thisreport, the Board of Directors comprises seven members,of whom four are external directors.
The Board of Directors is responsible for supervisionof business execution—it selects the directors that makeup the Nomination, Remuneration and Audit Committees;elects and dismisses executive officers and delegatesbusiness to them; approves matters related to operations
that have an impact on basic management policy suchas medium-term business plans and annual budgets; andapproves matters that could have a significant impact onGroup management such as investments exceeding acertain amount. The term of office of directors is one year,
and subject to approval at the Ordinary General Meetingof Shareholders held annually. The Company’s executive
officers are determined by the Board of Directors. People
suitable for the execution of the Company’s business areelected from the perspective of enhancement of businessexecution and corporate value based on the principle ofassigning the right people to the right positions.

Nittobo Group | Integrated Report 2023

51

Section 1

Introduction

Section 4

Section 2

Section 3

Value Creation Story

Strategies by Business

Section 5

Foundation for Value Creation

Corporate Data

Corporate GovernanceNomination, Remuneration and Audit Committees
Under the structure of a company with a nominationcommittee, etc., the Company has established a
Nomination Committee, a Remuneration Committee, andan Audit Committee. The roles of each committee andan overview of committee members as of the date of the
publication of this report are as follows.
Nomination Committee
The Nomination Committee determines the content
of proposals (regarding the election and dismissal of
directors) to be submitted to the General Meeting of
Shareholders. The committee comprises five directors(four of whom are external directors) and is chaired
by External Director Sadayoshi Fujishige. Meetings of
the Nomination Committee are held as needed. The
Nomination Committee selects the Company’s director
candidates who are believed to be the most suitable basedon factors such as their character and insight.
Remuneration Committee
The Remuneration Committee determines the content of
individual remuneration, etc., of directors and executive
officers. It comprises five directors (four of whom areexternal directors) and is chaired by External Director
Hiroshi Kagechika. Meetings of the Remuneration
Committee are held as needed.

Audit Committee
The Audit Committee’s responsibilities include auditing
the state of execution of duties of directors and executive
officers, and the preparation of audit reports. Working
with the accounting auditors and the Audit Office, audits,
etc., are conducted based on audit plans approved by the
Audit Committee. The committee comprises five directors(four of whom are external directors) and is chaired byExternal Director Yasuharu Nakajima. The Audit Committee
Secretariat has been established as an organization forassisting with the duties of the Audit Committee. In
principle, the Audit Committee holds meetings at least
once every month.

Execution of Business
As of the date of the publication of this report, the Company
has 13 executive officers, of whom one has been selected
as the representative and chief executive officer. An
Executive Meeting has been established as an organ todeliberate matters related to the execution of businessdelegated by the Board of Directors, and it endeavors toensure efficient business execution by holding meetings
twice a month in principle.

Self-Evaluation of the Effectiveness of the Board of Directors
The Board of Directors analyzes and evaluates its
composition, operation, supervision, support system,and dialogue with shareholders, etc., based on a survey

conducted by outside attorneys and the self-evaluation ofeach director.

Process for Evaluating Effectiveness
Survey administered withthe assistance of outside
attorneys

Analysis and evaluationby the Board of Directors

The evaluation of the effectiveness of the Board of
Directors in FY2021 included the opinion that the
COVID-19 pandemic prevented directors from having
sufficient opportunities to visit business sites and factories
to understand the situation on the ground, and the opinion
that ongoing review of Group governance is desirable. The
following initiatives were therefore implemented in FY2022.

Discussion based on
evaluation results to
identify issues

Initiatives toaddress issues

In the survey covering FY2022, the average evaluation
score for all items was 4 or higher (maximum of 5), andboth internal and external directors highly evaluated theeffectiveness of the Board of Directors. We will continue tomake ongoing improvements so that the Board of Directors
can fulfill its supervisory functions even more effectively.

Initiatives in FY2022• After implementing effective measures to prevent the spread of COVID-19, we increased opportunities for directors tovisit business sites and factories and exchange opinions with local employees. In addition, several lectures by outside
experts were organized to deepen directors’ understanding of the Group’s businesses.
• Briefings prior to Board of Directors meetings included discussion of Group governance.

Director Skill Matrix and Meeting Attendance (FY2022)
The knowledge, experience, and abilities of directorsthat are considered important to the Company fromthe perspective of corporate management are definedas business management, technology, research anddevelopment, sales, marketing, global business,finance, accounting, legal affairs, risk management,
human resources, labor relations, and human resources
development. We ensure that the Board of Directors is
composed of people with appropriate knowledge andabundant experience in each field.
Attendance/Number of meetings

Name

52

Board of Directors
Meetings

Yuichi Tsuji

13/13

Toyoshi Nishizaka

13/13

Kazuhiko Igarashi

10/10

Nomination Committee
Remuneration
Meetings
Committee Meetings

7/7

Audit Committee
Meetings

The table below does not represent all knowledge, experience, etc. possessed by each person.
1) Attendance data for Sadayoshi Fujishige is for meetings of the Board of Directors, Nomination Committee and Remuneration Committee from April 1, 2022
through March 31, 2023. His attendance data for Audit Committee meetings is from June 28, 2022, the date of his appointment to that committee, throughMarch 31, 2023.
2) Attendance data for Hiroshi Kagechika and Agasa Naito is for meetings of the Board of Directors and the three committees from April 1, 2022 throughMarch 31, 2023.
3) Attendance data for Yasuharu Nakajima is for meetings of the Board of Directors and the three committees from June 28, 2022, the date of his
appointment, through March 31, 2023.

Business
Management

Technology/R&D

Sales/Marketing

Global Business

Finance/
Accounting

Legal/Risk
Management

Human Resources/
Labor Relations/
Human Resource
Development

7/7
14/14

Sadayoshi Fujishige

External Director

13/13

7/7

7/7

10/10

Hiroshi Kagechika

External Director

13/13

7/7

7/7

14/14

Agasa Naito

External Director

13/13

7/7

7/7

14/14

Yasuharu Nakajima

External Director

10/10

5/5

4/4

10/10

Nittobo Group | Integrated Report 2023

(Note 1)
(Note 2)

Nittobo Group | Integrated Report 2023

53

Section 1

Introduction

Section 4

Section 2

Section 3

Value Creation Story

Strategies by Business

Foundation for Value Creation

Section 5

Corporate Data

Corporate Governance

Process for Determining Remuneration• Basic remuneration and variable remuneration
Basic remuneration and variable remuneration for each officer
are determined by resolution of the Remuneration Committee
in accordance with the aforementioned basic policy.
Basic remuneration is determined according to a table

Officer Remuneration
Officer Remuneration
Matters pertaining to the policy for determining the amount of officer remuneration, etc., and the method of
calculation thereof(a) Method for deciding policy
In accordance with the provisions of the Companies Act
relating to a company with a nomination committee, etc.
and with reference to objective data, etc., from external
consultants, the Company’s policy for determining theindividual remuneration of directors and executive officers is
decided by the Remuneration Committee, of which external
directors comprise the majority and which is chaired by an
external director.
Furthermore, the policy is designed to strongly incentivize
officers to achieve performance targets while ensuringtransparency and rationality, to foster awareness of managementfrom a medium- to long-term perspective, and to aligninterests with those of stakeholders including shareholders andinvestors. The performance indicators selected for calculating
remuneration also reflect this approach.

(b) Outline of policy
The Company’s officer remuneration (excluding external
directors) is structured with basic remuneration (fixed
remuneration) determined by position and variable
remuneration (performance-linked remuneration) thatvaries within a range of 0% to 150% according to the levelof achievement of company performance targets for theprevious fiscal year and individual performance targets
based on the operating profit of the division(s) under theofficer’s charge and individual evaluation. In addition,
executive officers receive stock remuneration (performancelinked remuneration), the level of which is linked toachievement of the performance targets of the Company’s
Mid-Term Business Plan.
In view of their role in supervising management from an
independent and objective perspective, external directors
do not receive variable remuneration or stock remuneration.

Remuneration Weighting by Position
Composition of officer remuneration (assuming performance-linked remuneration at 100%)that defines the fixed amount for each position. Variable
remuneration is calculated based on the level of achievementof targets for each fiscal year. If an officer (excluding
directors) retires before the end of a fiscal year, amounts areprorated according to the time in office.

Rules for Calculating Variable Remuneration
Company performance component = Basic remuneration for the preceding fiscal year × Company performance coefficient for each position ×
Level of achievement of company performance for the preceding fiscal year
Individual performance component = Basic remuneration for the preceding fiscal year × Individual performance coefficient for each position ×
Level of achievement of individual performance for the preceding fiscal year and the result of the individual evaluation
Variable remuneration is determined by combining the company performance and individual performance components calculated as shown above.
Note however that although the current officer remuneration system was introduced at the beginning of FY2022, during the transitional period
between systems, variable remuneration shall be determined based on the calculation rules before the system transition.
Those calculation rules and the performance indicator results are as follows.
Calculation rules before the system transition(a)	Variable remuneration = Basic remuneration for the preceding fiscal year × Performance-linked remuneration coefficient for each position ×
Level of achievement of performance targets for the preceding fiscal year(b)	Performance-linked remuneration coefficient for each position	Representative and chief executive officer: 50% of basic remuneration; Senior managing executive officers: 45% of basic remuneration; Other
officers (excluding external directors): 40% of basic remuneration(c) Indicators used in the calculation of variable remuneration for FY2022 and actual results[Operating profit (amount)] Target: JPY 10,000 million / Actual: JPY 7,268 million[Operating profit (year on year)] Target: JPY 5,964 million / Actual: JPY 7,268 million[ROE (year on year)] Target: 4.5% (after adjustment) / Actual: 5.5%
[Dividends (year on year)] Target: JPY 45 per share / Actual: JPY 45 per share
Note: Targets for individual performance indicators are set as quantitative and qualitative targets, and the level of achievement for each varies within a range of 75% to 125%.

Performance-linked remuneration
PositionBasic
remuneration

Variable remuneration
Company
performance

Individual performance
Division
performance

Individual
evaluation

Stockremuneration

Director, representative and chief executive officer
and other representative executive officers

60.0%

25.0%

—

—

15.0%

Senior and other managing executive officers

60.0%

17.5%

5.0%

2.5%

15.0%

Senior and other executive officers

65.0%

12.5%

5.0%

7.5%

10.0%

Directors not concurrently serving as executive
officers (excluding external directors)

71.0%

14.5%

External directors

100%

—

14.5%

—

—

—

—

Performance Indicators and Percentage Reflection in Performance-linked Remuneration
Company
performance

Individual
performance

Operating profit(JPY 10 billion baseline)

Operating profit(year on year)

ROE (year on year)

40.0%

30.0%

30.0%

Operating profit of division(s) under the officer’s charge(compared to target)
Senior and other managing
67.0%
executive officers
Senior and other executive
40.0%
officers

Indicator Selection
Company performance
The selected indicators are operating profit as a measure of
earning power and enhanced growth potential, and ROE asa measure of improvement in capital efficiency.
Individual performance
The selected indicators are the operating profit of thedivision(s) under the officer’s charge and the individual
54

Nittobo Group | Integrated Report 2023

Individual evaluation
Senior and other managing
executive officers
Senior and other executive
officers

33.0%
60.0%

evaluation rating, which helps to clarify the responsibility for
performance of each officer (excluding external directors).
These indicators also provide a basis for evaluation
based on perspectives and factors other than company
performance. Ratings for individual evaluations are basedon the outcomes of activities and their contribution tobusiness performance.

• Stock remuneration(1) E ligibility for the performance-linked stock remuneration
plan (hereinafter “the Plan”)
Persons eligible for the Plan are the executive officers(including those concurrently serving as directors).
(2) Structure of the Plan and granting of points(i) Structure of the Plan
Remuneration under the Plan will consist of the following:· Fixed component
The fixed component is granted according to the position
held during the tenure.
· Performance-linked component
The performance-linked component is granted according to
the level of achievement of the performance targets of the
Mid-Term Business Plan.
The level of achievement of the performance targets isevaluated each fiscal year and reflected in the remuneration
for the tenure.
In the current Mid-Term Business Plan, the Company
has set the amount of consolidated operating profit as aperformance indicator. Operating profit was chosen because
it is a representative measure of medium- to long-term
improvement in business performance. The Company istargeting JPY 10.8 billion for FY2022 and JPY 14.0 billion
for FY2023.

(ii) Point calculation method·P oints corresponding to the fixed component and theperformance-linked component are calculated and granted
for the tenure of executive officers.
·P oints granted for the respective tenure will accumulate
until retirement, and the number of accumulated points will
be used as “1 point = 1 share” to calculate the number of
the Company’s shares to be granted.
(Point formula)

Base points corresponding to the position during
the tenure for which points are granted(Note 1) × (1 +Performance-linked coefficient(Note 2))(Note 1) Base points
Position

PointsRepresentative and chief executive officer

2,360

Senior managing executive officer

1,219Managing executive officer

903

Senior executive officer

452

Executive officer

409(Note 2) Performance-linked coefficient(The indicator for calculating the performance-linked coefficient shall be
operating profit)
Performance-linked coefficient = Actual amount for the relevant period÷ Target amount for the relevant period as specified in the Mid-TermBusiness Plan (rounded down to the second decimal place). The upper
limit of the coefficient is 1.5, and if it is less than 0.5, it is set to 0.

Nittobo Group | Integrated Report 2023

55

Section 1

Introduction

Section 4

Section 2

Section 3

Value Creation Story

Strategies by Business

Foundation for Value Creation

Section 5

Corporate Data

Corporate Governance(iii) Calculation method in case of position change during
the tenure
If there is a change in position during the tenure, points will
be prorated based on the number of months, according to
the respective position.
(iv) Calculation method in case of resignation of an officer
during the tenure
If an officer resigns during the tenure, points will becalculated based on his/her term of office.
(Formula)

Points calculated according to (ii) above × Tenure as an
officer ÷ 12(v) Point granting date
The points for the tenure are granted on the date of thefirst meeting of the Remuneration Committee after theconclusion of the Ordinary General Meeting of Shareholders
for the fiscal year under review.
(3) Number of shares and amount of cash to be granted
or paid(i) In the case of the resignation of an officer due to reasons
other than personal reasons· Shares
The number of shares is calculated as “1 point = 1 share”
using the following formula.
(Formula)

Number of shares = Number of points accumulated untilthe vesting date (including the points granted on the vesting date. Hereinafterreferred to as “Number of Points Held”) × 70% (any fraction less than one unit ofshares shall be rounded down)· CashThe cash amount is calculated using the following formula.

(ii) In the case of the resignation of an officer due topersonal reasons
Shares are granted based on the Number of Points Held,
where “1 point = 1 share.”(iii) In the case of the death of an officer for whom
remuneration is to be paid
In the case of the death of an officer for whom remuneration
is to be paid, the right to receive a monetary payment asa survivor’s benefit will be acquired by the surviving family
members of such officer if they meet the requirements
set forth in the Regulations of Directors’ Stock Benefits
established by the Remuneration Committee. The survivor
benefit amount shall be the monetary amount calculatedusing the following formula.
(Formula)

Survivor benefit amount = Number of Points Held by adeceased officer for whom remuneration is to be paid ×Market value of the shares as of the date of death(Note) The market price of the shares used in the plan shall be the closing price ofthe shares on the principal stock exchange on which the shares are listedon the date when the market price of the shares needs to be calculated.
If the closing price is not published on such date, the market price of theshares shall be calculated retroactively to the most recent date for which a
closing price is available.

(4) Important note
The maximum number of shares corresponding to thepoints awarded for each position as stipulated in Article 34,
paragraph 1, item (iii)-(a)1 of the Corporation Tax Act is: 5,900
points for the representative and chief executive officer, 3,047
points for senior managing executive officers, 2,257 points
for managing executive officers, 1,130 points for senior
executive officers and 1,022 points for executive officers.

Cross-Shareholdings
Policy Regarding Cross-Shareholdings
The Company holds shares of listed companies under its
policy on cross-shareholding in cases where it deems suchshareholding to be beneficial for building favorable trading
relationships with important trading partners of the Nittobo
Group in fields including sales, fuel and raw material
procurement, and finance, smoothly advancing businessactivities of the Nittobo Group, and maintaining andenhancing corporate value in the Nittobo Group. However,from the perspective of improving the Group’s corporate
value, the Company will sell shares that are deemed to beof little holding significance, while paying attention to theeffect on the market, and so forth.
Method for Assessing Rationale for Holding Shares
The Company reviews the holding policy for listed sharesindividually at a meeting of the Board of Directors on aperiodic basis, comprehensively considering qualitative
factors such as sales and procurement, the existence of
Changes in Cross-Shareholdings

any technological cooperation or joint capital investment,
whether there are any joint ventures under way, financing,the maintenance and establishment of good business
relationships, and a quantitative evaluation that compares
the total return on investment, calculated by considering
dividend yield and business profit, against the cost ofcapital, as well as the comprehensively considered policy
on cross-shareholdings.
Exercise of Voting Rights Associated with CrossShareholdings
The Company will appropriately exercise its voting rights
associated with cross-shareholdings after consideration ofwhether such issuing company has established an effective
governance structure and is making appropriate decisions
to improve its corporate value over the medium to longterm, as well as whether such shareholdings will contributeto enhancing the Group’s corporate value.

FY2018FY2019FY2020

FY2021

FY2022Unlisted stocks Number of stocks
Amount (JPY million)
Listed stocks
Number of stocks
Amount (JPY million)
Total
Number of stocks
Amount (JPY million)
Capitalization at end of period
Number of stocks

—
—
13
2,050
13
2,050
53

2
32
3
783
5
815
51

1
24
4
8,665
5
8,689
49

1
0
—
—
1
0
47

—
—
1
2,516
1
2,516
47

Amount (JPY million)

20,604

20,694

16,625

15,243

13,643

Sold during the period(including unlisted stocks)

Dialogue with Stakeholders(Formula)

Cash amount = (Number of Points Held – Number ofshares calculated according to the formula for “Shares”
above) × Market value of the shares as of the vesting dateReason for Appointment of External Directors
Name

Principal activities and overview of the duties carried out in the expected roles as an external director
Mr. Sadayoshi Fujishige has a wealth of experience and a high level of insight as a top manager of a listed company. Based on this, heactively makes statements at meetings of the Board of Directors, the Nomination Committee, the Remuneration Committee, and the Audit

Sadayoshi Fujishige Committee. In this way, he plays a role expected as an external director, including providing accurate advice to management, contributing
to decision making by the Board of Directors, and supervising business execution.

56

Hiroshi Kagechika

Mr. Hiroshi Kagechika has specialist insight and a wealth of experience in corporate business and the field of research and development in
the manufacturing sector. Based on this, he actively makes statements at meetings of the Board of Directors, the Nomination Committee,
the Remuneration Committee, and the Audit Committee. In this way, he plays a role expected as an external director, including providing
accurate advice to management, contributing to decision making by the Board of Directors, and supervising business execution.

Agasa Naito

Ms. Agasa Naito has a wealth of experience and a high level of insight as an expert in law and as an outside officer of another company.
Based on this, she actively makes statements at meetings of the Board of Directors, the Nomination Committee, the Remuneration
Committee, and the Audit Committee. In this way, she plays a role expected as an external director, including providing accurate advice
to management, contributing to decision making by the Board of Directors, and supervising business execution.

Yasuharu Nakajima

Mr. Yasuharu Nakajima has a wealth of experience and a high level of insight as an expert in accounting and as an outside officer ofanother company. Based on this, he actively makes statements at meetings of the Board of Directors, the Nomination Committee, theRemuneration Committee, and the Audit Committee. In this way, he plays a role expected as an external director, including providing
accurate advice to management, contributing to decision making by the Board of Directors, and supervising business execution.

Nittobo Group | Integrated Report 2023

The Corporate Communication Officer is responsible forgeneral dialogue with shareholders, and the Corporate
Communication Department is the internal department
responsible for providing assistance thereto. The Company
endeavors to create opportunities for dialogue withshareholders that contribute to the sustained growth andenhancement of medium- to long-term corporate value of
the Company centered on executive officers. Furthermore,
departments involved in IR activities centered on the
Corporate Communication Department work to coordinate

among departments on a daily basis.
We will continue to endeavor to disclose information
in a timely and appropriate manner to enable the Nittobo
Group’s customers, shareholders and investors to accurately
recognize and judge the actual state of the Nittobo Group.
In order to achieve this, we comply with laws, regulations
and securities exchange rules on disclosure, and areengaged in the creation and operation of an appropriate
disclosure system.

 e publish items specified for disclosure in Japanese and foreign laws, regulations and securities exchange rules in business reports, annualWsecurities reports and communications to shareholders, and announce them in securities exchange communication systems and press releases.
In principle, we publish information being disclosed on the Nittobo Group’s website, and also endeavor to provide fairer and broader disclosure.
We conduct briefings for analysts and institutional investors promptly after the announcement of quarterly financial results.
We publish an integrated report that incorporates financial and non-financial information, including CSR, in order to provide a better
understanding of the Group’s medium- to long-term value creation framework.

Opinions and concerns, etc., about the Company that arelearned through dialogue with shareholders and investors
are collated by the Corporate Communication Department,
reported to the Corporate Communication Officer, theExecutive Meeting, and the Board of Directors on aquarterly basis, and appropriately provided as feedback to

management executives. Adequate care is given regarding
insider information in individual inquiries and dialogue
with the Nittobo Group, and explanations are limited to
information that has already been published and facts thatare well known.
Nittobo Group | Integrated Report 2023

57

Section 1

Introduction

Compliance System

Section 3

Section 4

Strategies by Business

Foundation for Value Creation

Compliance
The Nittobo Group is aware that it is a public instrument that operates for the benefit of society. It naturally complies with laws
and regulations as well as with social norms, and strives to remain a company that is trusted by society. This is the starting point
for the Company’s existence, a position that must be unconditionally observed so long as this Company is a member of society.
All officers and employees understand the necessity of practicing compliance, and the Company will always conduct fairand just business activities with a spirit of complying with the law and a firm sense of ethics.

The Nittobo Behavior Program and the Nittobo
Code of Conduct
The Nittobo Behavior Program and the Nittobo Code of
Conduct have been enacted as standards for all officers
and employees of the Nittobo Group, to ensure that the
Nittobo Group will always be a company that is trusted bysociety.
To ensure that these standards are firmly established as
the basis for the Company’s daily business activities, andthat they are imbued in the core being of all officers andemployees, all officers including senior management will
strive to lead by example as they continuously andproactively promote awareness through education andtraining programs.

Internal Whistleblowing Contact
The Nittobo Group has established a whistleblowing
program, the Corporate Ethics Helpline, to prevent anddetect violations of laws and regulations at an early stage
and to take appropriate corrective actions.
In cases where a violation of laws, regulations or internal
rules, improper conduct, or other such problem occurs atwork but resolution at the business site is unlikely or an
employee is unable to consult with workplace colleagues orsuperiors, any Nittobo Group employee can make reports
to and consult with the helpline with peace of mind.
The reporting and consultation office is available not only
as an in-company hotline but also externally through an
outside law firm, which enables anonymous reporting andconsultation. The privacy and confidentiality of whistleblowers
is protected, and measures are taken to prevent prejudicial
treatment as a result of making a report. The reporting andconsultation office also ensures independence from theexecutive side by handling reports and consultations that may
involve directors and officers under the Audit Committee’s
supervision. The Company is committed to creating a systemthat whistleblowers can use with greater peace of mind by, forexample, responding to reports and consultations in goodfaith, confirming the facts and taking corrective measures, andreporting the results of the investigation to the whistleblower.

For details about compliance initiatives:
https://www.nittobo.co.jp/eng/sustainability/governance/compliance.html

The Nittobo Group’s Risk Management Committee is chairedby the Representative and Chief Executive Officer. It draws on
the basic risk management policy and risk management systemstipulated in the Group’s Rules for Risk Management toappropriately manage the risk exposure of the Group’sbusinesses and prevent problems from materializing.
Furthermore, the Company has also strengthened its legal risk
management system by establishing a system that enables it toreceive various kinds of guidance as the occasion demands, suchas opinions and advice from corporate attorneys and specialist
lawyers regarding corporate management and daily operations.

Information Management
The Nittobo Group discloses information on its businessactivities in a timely and appropriate manner to enhance
corporate transparency. In addition, we have establishedrules for the management of trade secrets, document

Net Sales

Operating Profit / Operating Profit Ratio(JPY billion)(JPY billion)

100

15

80

82.3

85.7

78.7

84.1

management, personal information handling andinformation system management, and manage suchinformation after specifying management methods andmanagers to ensure we appropriately manage theinformation in our possession. We also conduct regularself-inspections, monitoring and workplace training.

10.0

9.5
8.6

8.0

7.6
10

60

8.2

40

5.6

8.2
6.0

5

6.0

7.3

4.0

4.9

20

2.0

0

0

FY18

FY19

FY20

FY21

FY22

0

FY18

FY19

FY20

FY21

FY22

Operating profit ratio (right axis)

Net Sales

Operating profit (left axis)

Net sales increased, with main factors including a first-half increasein sales of products for electronic materials in the Glass Fiber
Business and medical business sales in the Life Science Business. In
addition, the depreciation of the Japanese yen had a positive effect.

Cost reductions and price revisions partially offset the decrease inprofit due to the significant negative impact of rising raw material
and fuel costs.

EBITDA / EBITDA Margin

Capital Expenditure (Including M&A)

(JPY billion)

20
14.9

15.8

15.6

15
12.3

13.5

17.1

14.4
12.3

(%)

(JPY billion)

18.0

20

15.0
13.1

16.9
12.0

6.0

EBITDA (left axis)

FY19

FY20

FY21

15.8

(JPY billion)

FY18

121

4
95

133

104
2.6

1.5

1.7

131
3.0

150

100

50

0

R&D expenses (left axis)

FY20

FY21

FY21

FY22

(JPY)

(%)

200

74.4

150

FY22

Research & Development Headquarters personnel (right axis)

We enhanced the development of high-performance glass fiber for
next-generation communication systems, for which demand is
expected to grow with the implementation of 5G, and new
high-value-added products in the Life Science Business.

0

40

FY18

55

21.6

19.4

40.0

26.8

30.3
50

80.0
60.0

100

2.1

0

FY19

FY20

Dividends / Dividend Payout Ratio

1

FY18

FY19

Nittobo made capital investments to increase production capacity
for glass fiber yarn and glass fiber cloth in the Glass Fiber Business,and to increase production capacity for raw materials for in vitro
diagnostic reagents in the Life Science Business.

(Persons)

5

5.9

Capital expenditure (including M&A)

EBITDA margin (right axis)

R&D Expenses /Research & Development Headquarters Personnel

2

16.2

0

FY22

Despite ongoing business structural reforms and other initiatives toimprove profitability, both EBITDA and the EBITDA margin decreased
year on year due to lower operating profit resulting from factors
including the impact of increases in prices of raw materials and fuel.

With developments in information networking, the dangerof information leaking outside the Company and the threatof cyberattacks are increasing. For this reason, the Nittobo
Group undertakes preventive measures against potential
risks, along with countermeasures for computer viruses, led
by the head of IT, with the aim of securing and achieving
further improvements in information security.

16.7

5

0

FY18

Information Security

15
10

5

3

For an overview of information management education:
https://www.nittobo.co.jp/eng/sustainability/governance/risk_management.html

(%)

10.0

87.5

0

The Nittobo Group endeavors to appropriately manage the risks to which its businesses are exposed in order to improveits corporate value and fulfill its social responsibilities. We have established a system to identify, evaluate and takecountermeasures against risks, which have become more diverse and complex as globalization has progressed, and areworking to prevent them from materializing and to reduce losses in the event of a crisis.

Risk Management System

Financial Value

10

Risk Management

Nittobo Group | Integrated Report 2023

Corporate Data

Financial and Non-Financial Highlights

The Nittobo Group places utmost priority on compliance with domestic and foreign laws, regulations and social norms,
as well as on appropriate management and prevention of risks in areas related to its business.

58

Section 5

Section 2

Value Creation Story

45

45

45

FY19

FY20

FY21

20.0
0

Dividends per share (left axis)

FY22

Dividend payout ratio (right axis)

Dividends per share totaled JPY 55.00, consisting of an interim dividendof JPY 22.50, a year-end dividend of JPY 22.50, and a 100th anniversarycommemorative dividend of JPY 10.00. The Company’s policy is toflexibly return profits to shareholders based on stable dividend growth.

Nittobo Group | Integrated Report 2023

59

Section 1

Introduction

Section 5

Section 2

Section 3

Section 4

Value Creation Story

Strategies by Business

Foundation for Value Creation

Corporate Data

Financial and Non-Financial Highlights

Non-Financial Value
CO2 Emissions from Business Operations
CO2 emissions |11.5% reduction in total amount (vs. FY2013)*

400
3.60

200

Air pollutant emissions |(t-CO2/JPY million)(1,000 t-CO2)300

Air Pollutant Emissions

297
143

3.74
320
172

3.95

3.68

311
172

151

167

5.0 % decrease per unit of sales (vs. FY2013)*

396

98.5

103.5

107.0

98.5

105.1

305

268

2.00

100

1.00
154

148

139

0

0

FY18
Scope 1

100

158

142

FY19

FY20

Scope 2 (left axis)

FY21

0

FY22

FY18
NOx

Per unit of consolidated net sales (right axis)

FY19
SOx

FY20

31
34

42
27

FY21

FY22

5
0

Dust

* F Y2013 CO2 emissions: 349,000 t-CO2;
Per unit of consolidated net sales: 4.10 t-CO2/JPY million* F Y2013 NO x emissions: 852 tons; SO x emissions: 43 tons;
Dust emissions: 95 tons

Greenhouse Gas Emissions in the Value Chain (Scope 3*)

Waste Disposal Volume / Recycling Rate

8.87

8.42

8.62

8.83

2.47

2.46

2.40

2.51

FY18

FY19

FY20

FY21

2.05

30

5.76
35

23

22

FY18

5.64

70

6.29

60

52
5.70
34

28

28

21

FY19

FY20

FY21

Drainage volume (left axis)

COD2

2

0

33

5.62

71

34

4

40
20

0

FY22

Water withdrawal
Water withdrawal by Nitto Beverage Co., Ltd. (left axis)
Per unit of consolidated net sales (right axis)

65

33

60
8.10

77

8
6

73
30

43
31

38
21

(t)

80

279
10

1

10

90

200

46.2% reduction in total amount (vs. FY2013)(Million m3)

120

15

300

Water pollutants |(m3/JPY million)

20

400

3.00

Water withdrawal |Water Drainage Volume / Water Pollutants(Million m3)

500
434

309

309

53.0% reduction in total amount (vs. FY2013)*

(t)

4.00

3.53

Water Withdrawal

0

FY22

BOD3

SS4 (right axis)

1. FY2013 COD: 116 t; BOD: 35 t; SS: 48 t; drainage volume: 5.31 million m3
2. COD (chemical oxygen demand): Amount of oxygen required to chemicallyoxidize organic matter in water with an oxidant
3. BOD (biochemical oxygen demand): Amount of oxygen required for organisms
to decompose organic matter in water
4. SS (suspended solids): Amount of insoluble substances in water* F Y2013 water withdrawal: 8.83 million m3;
Water withdrawal by Nitto Beverage Co., Ltd.: 2.27 million m3;
Per unit of consolidated net sales: 103.7 m3/JPY million(1,000 t-CO2)

250

Recycling rate* |

230
200
181

163

160

150

50
0

FY19

FY20

FY21

FY22

Category 1: Purchased goods and services
Category 2: Capital goods
Category 3: Fuel- and energy-related activities not included in Scope 1 or Scope 2
Category 4: Upstream transportation and distribution
Category 5: Waste generated in operations
Category 6: Business travel
Category 7: Employee commuting* Scope 3: Indirect emissions outside of Scope 1 and Scope 2 (emissions ofother companies related to business operations)

FY2022 Scope 3 Category Details (t-CO2)

(t)

(%)

(Persons)

80

1,500

20,00060.1

15,00015,085

10,00011,841

67.5

4: Upstream transportation and distribution............. 3,232

10,9200

FY19

Nittobo Group | Integrated Report 2023

22.0

21.6

820

830

860

787

783

500

0

FY22

180

179

192

169

FY18

FY19

FY20

FY21

173

(%)

25

5

20

4

15

3

10

2

5

1

0

0

FY22

Total employees
Female employees (left axis)
Ratio of female employees (right axis)

Recycling rate (right axis)

4.1

4.0

4.1

FY18

FY19

FY20

4.9

5.0

FY21

FY22

Ratio of female employees in management positions
For details of third-party assurance:
https://www.nittobo.co.jp/eng/sustainability/pdf/IndependentAssuranceStatement.pdf

PRTR Substances Emitted and Handled
PRTR substance emissions |64.8% reduction (vs. FY2013)*

(t)

100

60

For details of third-party assurance:
https://www.nittobo.co.jp/eng/sustainability/pdf/IndependentAssuranceStatement.pdf

FY21* Recycling rate = Materials recycled ÷ (Waste disposal volume +Materials recycled)

6: Business travel.......................................................... 342• Improve transportation efficiency in cooperation with
suppliers and transporters• Reduce CO2 emissions through glass waste recycling

FY20

Waste disposal volume (left axis)

80

Scope 3 Reduction Initiatives

11,870

40
20

FY18

21.6

22.3

1,000

11,8500

5: Waste generated in operations................................ 662
7: Employee commuting.............................................. 291

68.5

(%)

22.0

5,000

2: Capital goods...................................................... 20,717
3: Fuel- and energy-related activities
not included in Scope 1 or Scope 2.................... 28,612

67.4

Ratio of Female Employees in Management Positions(Non-Consolidated)60

1: Purchased goods and services.......................... 108,682

60

Total Employees (Non-Consolidated) /Ratio of Female Employees

25,000
69.0

100

FY18

68.5% (FY2022)

210

3,302
2,712

40

2,704

20

Number of Annual Paid Leave Days Taken(Non-Consolidated)(t)(Years)(Days)

4,000

25

3,230

2,958

3,000

45

40
32

Average Years of Employment by Gender(Non-Consolidated)

30

28

FY20

FY21

0

FY18

FY19

PRTR substances emitted (left axis)

FY22

PRTR substances handled (right axis)* F Y2013 PRTR substances emitted: 128 tons;
PRTR substances handled: 2,881 tons

19.5
19.8

19.0
19.1

18.8

18.2

18.8
17.8

12.6
12

15

11

10

10

2,000
1,000

0

20

13
19.8
19.8

10.8

11.0

10.7
10.2

5
0

0

FY18

FY19

FY20

FY21

Average years of male employees’ employment
Average years of female employees’ employment

FY22

FY18

FY19

FY20

FY21

FY22

Number of annual paid leave days taken

Nittobo Group | Integrated Report 2023

61

Section 1

Introduction

Section 5

Section 2

Section 3

Section 4

Value Creation Story

Strategies by Business

Foundation for Value Creation

Corporate Data

11-Year Financial Data
(JPY million)

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Net sales

82,103

85,10490,22386,19983,32484,52682,29285,72278,72784,051

87,529Operating profit

6,619

6,476

8,885

10,893

11,148

10,837

8,198

8,160

5,964

7,268

4,880

Ordinary profit

6,413

6,511

8,658

10,974

11,396

11,071

8,934

8,202

6,274

8,065

6,067

Profit attributable to owners of parent

2,840

3,858

4,588

5,598

7,479

10,253

7,984

5,771

8,100

6,519

2,772

EBITDA

11,974

11,19013,57815,497

15,27815,001

12,27913,54812,296

14,351

13,088Depreciation

5,354

4,713

4,692

4,603

4,130

4,164

4,080

5,388

6,332

7,082

8,208

Capital expenditure

5,903

5,104

4,814

4,422

2,043

7,024

11,94916,717

14,70915,820

5,919

R&D expenses

1,626

1,495

1,290

1,255

1,429

1,590

1,477

1,698

2,097

2,577

2,950

Net cash provided by (used in) operating activities

6,223

12,152

14,745

16,677

11,034

7,791

5,317

10,614

7,815

6,965

7,643

Net cash provided by (used in) investing activities–7,006–4,267–5,318–12,294–2,271

2,524–11,389–16,917–1,867–17,305

1,979

Net cash provided by (used in) financing activities–1,432–4,351–4,388–2,276–8,826–9,467

3,948

12,6281,862–1,530–7,249

–783

7,884

9,426

4,382

8,762

10,316–6,071–6,302

5,948–10,339

9,622

Total assets2

132,555

136,294

145,956

142,719

140,064

147,160

151,000

172,824

184,652

187,289

185,585

Net assets

60,13563,371

73,22875,45578,28187,54890,74098,704

104,389

110,638

108,948

Interest-bearing debt

35,97635,40834,01632,67327,35820,22525,58940,31544,162

46,211

46,061

247,677

247,677

247,677

247,677

199,677

39,93539,93539,93539,93539,93537,723

14.25

19.36

23.03

28.10

37.71

263.97205.76148.73208.77168.04

73.94

Operating results

1

Cash flows

Free cash flows

Financial position (At end of fiscal year)

Stock information3
Number of shares issued (Thousand shares)
Earnings per share (EPS) (JPY)4

297.69313.91363.32374.50396.002,232.43

2,312.06

2,413.82

2,555.06

2,727.58

2,850.72

5

5.00

5.00

5.00

6.00

7.00

26.00

40.00

45.00

45.00

45.00

55.00

Dividend payout ratio (%)6

35.1

25.8

21.7

21.4

18.6

15.2

19.4

30.3

21.6

26.8

74.4

Operating profit ratio (%)

8.1

7.6

9.8

12.6

13.4

12.8

10.0

9.5

7.6

8.6

5.6

EBITDA margin (%)

14.6

13.1

15.0

18.0

18.3

17.7

14.9

15.8

15.6

17.1

15.0

Return on equity (ROE) (%)7

5.0

6.3

6.8

7.6

9.8

12.5

9.1

6.3

8.4

6.4

2.6

44.8

45.9

49.6

52.3

55.3

58.9

59.4

54.2

53.7

56.5

55.9

0.61

0.57

0.47

0.44

0.35

0.23

0.29

0.43

0.45

0.44

0.44

Book-value per share (BPS) (JPY)Dividends per share (JPY)4Management indicators

Equity ratio (%)

8

Debt-to-equity ratio (Times)

9

1. EBITDA: Operating profit + Depreciation
2. P artial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, February 16, 2018) and otheraccounting standards have been applied from the beginning of fiscal 2018, and the figures for fiscal years 2014 through 2017
are shown after retroactive application of such accounting standards.
3. On October 1, 2017, a reverse stock split was implemented at a ratio of 1 share for every 5 shares of common stock.
4. E arnings per share is calculated based on the average number of issued shares during the period excluding treasury stock, andbook value per share is calculated based on the number of shares issued at the end of the period excluding treasury stock.

62

Nittobo Group | Integrated Report 2023

5. The fiscal 2017 dividend of JPY 26 per share is the sum of the interim dividend of JPY 3.5 before the reverse stock split and theyear-end dividend of JPY 22.5 after the reverse stock split. The dividend per share for fiscal 2017, converted on a post-reverse
stock split basis, would be JPY 40.
6. The consolidated dividend payout ratio is calculated based on the average number of issued shares outstanding during theperiod excluding treasury stock.
7. Return on equity (ROE): Profit attributable to owners of the parent ÷ (Net assets [average of beginning and ending amounts]− Non-controlling interests [average of beginning and ending amounts])
8. Equity ratio: (Net assets − Non-controlling interests) ÷ Total assets
9. Debt-to-equity ratio: Interest-bearing debt ÷ (Net assets − Non-controlling interests)
Nittobo Group | Integrated Report 2023

63

Section 1

Introduction

Company Profile	April 1918
Fukushima Seiren Seishi Co., Ltd. (Fukushima)

Stock Status

Business operations

Authorized number of shares

120,000,000 shares

Number of shares issued

37,723,012 shares

Number of shareholders

9,939• Manufacture, processing, and sale ofchemical products and pharmaceuticalproducts

Headquarters	2-4-1, Kojimachi, Chiyoda-ku, Tokyo,102-8489, Japan
Yuichi Tsuji anufacture, processing, and sale of•Mtextile products• Manufacture, processing, and sale ofglass fiber products

Head office	1, Aza Higashi, Gonome, Fukushima-shi,
Fukushima, 960-8161, JapanJPY 19.6 billion• Planning, supervision, and contracting forconstruction• Design, manufacture, and sale of machineryand equipment, etc.

Business Locations (As of August 31, 2023)
Tokyo Headquarters

Osaka Branch

Section 4

Foundation for Value Creation

Employees	2,631 (consolidated), 787 (non-consolidated)(As of March 31, 2023)

	April 1923
Nitto Boseki Co., Ltd.

Representative andChief Executive Officer

Section 3

Strategies by BusinessCorporate Data

Stock Information (As of March 31, 2023)

Dates of establishment	February 1898
Koriyama Kenshi Boseki Co., Ltd. (Koriyama)

Paid-in capital

Section 5

Section 2

Value Creation Story

2-4-1, Kojimachi, Chiyoda-ku, Tokyo, 102-8489, Japan

Administration Division

Tel. +81-3-4582-5111

Glass Fiber Division

Tel. +81-3-4582-5170

Medical Division

Tel. +81-3-4582-5450

Textile Division

Tel. +81-3-4582-5160

4-3-10, Kouraibashi, Chuo-ku, Osaka-shi, Osaka, 541-0043, Japan(Nissei Fushimicho Building New Building)

2-14-21, Nishiki, Naka-ku, Nagoya-shi, Aichi, 460-0003, Japan(Maruyama Nissei Building)

Fukushima Factory

1, Aza Higashi, Gonome, Fukushima-shi, Fukushima, 960-8581, Japan

Treasury shares
3.02%

Financial
institutions
40.71%
Foreignshareholders
20.16%

Distribution of
Shareholders

Tel. +81-6-6208-5015

Note: Scheduled to relocate on November 13, 2023
4-2-3, Hiranomachi, Chuo-ku, Osaka-shi, 541-0046, Japan (OBIC Midosuji Building)Nagoya Branch

Individuals
and others
10.73%

Major Shareholders

Tel. +81-52-231-5131

Other domestic
corporation
23.65%

Securities
companies
1.73%

Tel. +81-24-546-3131
Fiber R&D Center

Tel. +81-24-546-3138

Number of Percentage
shares held of shares(Thousand)held (%)

Name
The Master Trust Bank of Japan, Ltd.
(Trust account)

4,194

11.47

Custody Bank of Japan, Ltd. (Trust account)

2,542

6.95

Sumitomo Realty & Development Co., Ltd.

2,383

6.51

Nippon Life Insurance Company

1,614

4.41

The Dai-ichi Life Insurance Company, Limited

1,316

3.60

Sumitomo Life Insurance Company

1,082

2.96

AIR WATER INC.

997

2.73

The Toho Bank, Ltd.

905

2.47

Aioi Nissay Dowa Insurance Co., Ltd.

890

2.43

Mizuho Bank, Ltd.

800

2.19

Notes:
1. Shares held are rounded down to the nearest 1,000 shares.
2. Shareholding ratio is rounded to the nearest third decimal place.
3. The percentage of shares held excludes treasury shares.

Fukushima No. 2 Factory

20, Ipponsugi, Sakurashimo, Fukushima-shi, Fukushima, 960-2154, Japan

Tel. +81-24-593-1231

Stock-related Administration

Fukuyama EnterpriseCenter1, Aza Shiojima, Fukuhara, Fukuyama-cho, Koriyama-shi, Fukushima,963-8061, Japan

Tel. +81-24-932-6011

Fiscal year

April 1 to March 31

Ordinary general meeting of shareholders

Late June

Record dates

Voting rights for Ordinary General Meeting of Shareholders: March 31
Year-end dividend: March 31
Interim dividend: September 30
Other record dates are established as necessary with prior public notice.

Method of public notice

Public notices are available on the Company’s website below:
https://www.nittobo.co.jp/koukoku/index.htm (Japanese only)
However, if an electronic public notice cannot be posted due to an accident or other unavoidable reason,
the public notice will be printed in the Nihon Keizai Shimbun.

Itami Enterprise Center

Research & Development
Headquarters

Tel. +81-24-932-6110

Medical R&D Center

Tel. +81-24-932-6261

1-6-1, Kuwazu, Itami-shi, Hyogo, 664-8501, Japan

Tel. +81-72-782-2621

Consolidated Subsidiaries (As of June 30, 2023)
Glass Fiber Yarn
Koriyama-shi, Fukushima

Production and sale of glass fiber products

Stock listing

Prime Market of the Tokyo Stock Exchange (Securities code: 3110)

Fuji Fiber Glass Co., Ltd.

Moka-shi, Tochigi

Production and sale of glass fiber products

NITTOBO ASIA Glass Fiber Co., Ltd.

Chiayi County, Taiwan

Production and sale of glass fiber products

Shareholder registry administrator and special
account administrator

Mizuho Trust & Banking Co., Ltd. 1-3-3 Marunouchi, Chiyoda-ku, Tokyo, Japan

Soyo Co., Ltd.

Chiyoda-ku, Tokyo

Sale of glass fiber products, etc.

Shinwa Denzai Co., Ltd.

Chiyoda-ku, Tokyo

Sale of electronic materials, etc.

Baotek Industrial Materials Ltd.

Taoyuan, Taiwan

Production and sale of glass fiber products

Nittobo Taiwan Co., Ltd.

Taoyuan, Taiwan

Sale of glass fiber products

Nitto Glasstex Co., Ltd.

Oizumi-machi, Oura-gun, Gunma

Production and sale of glass fiber products

Paramount Glass Manufacturing Co., Ltd.

Sukagawa-shi, Fukushima; Ebetsu-shi,
Production and sale of glass wool products
Hokkaido; Suzuka-shi, Mie

Nittobo FRP Laboratory Co., Ltd.

Koriyama-shi, Fukushima

Production and sale of glass fiber products, etc.

Chiyoda-ku, Tokyo; Koriyama-shi,
Fukushima

Development, production, and sale of in vitro diagnostic reagents andspecialty chemicals

Message from the Corporate Communication Department

Frontier Institute Co., Ltd.

Ishikari-shi, Hokkaido

Development, manufacturing and sale of bioassay kits and consignment ofantibody production

Thank you for reading Nittobo Group Integrated Report 2023.

Nittobo America Inc.

California, Iowa and Maine, U.S.A.

Production and sale of antisera used for in vitro diagnostic reagents

Kamiya Biomedical Company, LLC

Washington, U.S.A.

Production and sale of in vitro diagnostic reagents

Nitto Glass Fiber Manufacturing Co., Ltd.

Glass Fiber Cloth

Glass Fiber for Industrial Materials

IR Information Website
The Nittobo Group’s detailed IR information isavailable on the official website.

https://www.nittobo.co.jp/eng/ir/index.htm• Management policy• Corporate governance•F inancial results-related materials(financial statements, etc.)• News releases• IR calendar
 erformance and financial•P
information and moreLife Science
NITTOBO MEDICAL CO., LTD.

value over our 100-year history and the challenges we will take on during the next 100

TextilesNittobo Advantex Co., Ltd.

Itami-shi, Hyogo

Production and sale of interlining and adhesive materials

years. We hope this report helps readers to better understand the Nittobo Group’s

Bunkyo Seiren Co., Ltd.

Fukui-shi, Fukui

Processing of textile products

initiatives for resolving social issues and achieving a sustainable society.

Nittobo Allied Service Co., Ltd.

Fukushima-shi, Fukushima

Various contracted services and insurance agency

communication that helps us to generate sustainable growth in corporate value.

Nittobo Ecology Co., Ltd.

Chiyoda-ku, Tokyo

Various contracted services

Nittobo Techno Co., Ltd.

Koriyama-shi, Fukushima

Design, manufacture, and sale of mechanical facilities; design andconstruction of civil engineering work and buildings

Through dialogue with stakeholders and timely disclosure, we will continue to emphasize

Other

64

The Nittobo Group is celebrating its 100th anniversary in 2023. We want to express
our gratitude to all stakeholders by providing a clear presentation of how we have created

Nittobo Group | Integrated Report 2023

Nittobo Group | Integrated Report 2023

65