AICA Kogyo Co., Ltd.
AICA Report 2022

Head Office: 26F JP Tower Nagoya, 1-1-1 Meieki, Nakamura-ku, Nagoya, Aichi, 450-6326, Japan

Contact for inquiries about this report
Sustainable Development Department Tel: +81-52-533-3136
https://www.aica.co.jp/
Issued Oct. 2022

AICA Report 2022
AICA Report

AICA SYNERGYCHEMISTRYDESIGNWe create new value through a fusion of Chemistry and Design.

Laminates &building materials

Other

43.0%

AICA

1.1%
Japan

214.5

in Numbers

Overseas Sales Ratio

49.2

billion yen

Chemicalproducts

It includes residential, commercial and public facilities, hospitals, offices, hotels, and other buildings.

57.0%

Asia/Oceania

As of end-Mar. 2022

48.1%

electronic products, cosmetics, clothing, and shoes.

as we enrich the lives of people and societies around the world.

Chemical
Products segment

Construction
Materials segment

For all settings in daily life

In various parts of diverse buildings

Boards, Films etc.

Countertops

Melamine noncombustible
decorative panels

Fittings & home interiormaterials

Construction Resins
Specialty &Performance Materials

Employees[Consolidated]

Oct. 20, 1936

NO.1

4,949

Consolidated
companies

Overseas
customers

50 companies in
14 countries/regions

More than

10,000*HPL: High pressure laminates

Foundations of AICA

Noncombustible
decorative panels

HPL* market sharein Japan

AICA’s VisionHigh pressure laminate(HPL)

Adhesives

Date established

About AICA

We are active in Japan and around the world.
AICA will continue to create new value through the synergy between Chemistry and Design,

50.8%

%

(Consolidated)

Even today, AICA’s field of activity is still expanding.
Our wide-ranging work can also be seen in areas such as automobiles,

Regional net
sales ratios

Net sales ratios

INDEX

About AICA

AICA’s Vision

Foundations of AICA

03 Message from the President

15 AICA’s 10 Years Vision and31

Medium-Term Business Plan

09 AICA’s Value Creation Model

19 Special Feature:

11 AICA’s Strengths Supporting

Value Creation
13 Our Business

SDG-Oriented Products
26 Special Feature:

Initiatives to Utilize Digital
Technology to Promote DX
27 Business Overview:

Chemical Products Segment

Sustainability
33

Business Infrastructure

43

Human Resources

49

Environment

57

Engagement with Stakeholders

Data Compilation
61

11-Year Financial Summary

Laminates & Building Materials

63

Non-Financial Data

Segment

66

Third-Party Assurance

67

AICA Group Network

29 Business Overview:

This report includes a selection of mattersthat are important for us to maintain andimprove our sustainability. For more detailed data and product information, bothfinancial and non-financial, we invite you
to visit our website.

Reported in the AICA Report

Reference Guidelines
ISO26000
Environmental Reporting Guidelines (2018 Edition), Ministry of the Environment
GRI Standards
IIRC International Integrated Reporting Framework
Target Period/boundary
This report is a summary of the activities of the AICA Group in FY2021. It also
includes information about some activities from FY2022. Target boundary information can be found in the content of the report.

Reporting on the website

Overview

Reporting around business strategies

More detailed information included

AICA Report 2022

https://www.aica.co.jp/

AICA Report

Details
Specialization

1

AICA Report 2022

General

AICA Report 2022

2

Data Compilation

07 Transformation of Value Creation

Policy and Framework for

Editorial Policy
This report is a tool to inform stakeholders (customers, employees,
shareholders, suppliers and business partners, local communities andgovernments, etc.) of the AICA Group’s corporate activities regarding
sustainability. We have created it with an emphasis on narrative flow andaccessible communication so that our sustainability can be understoodfrom both financial and non-financial perspectives. The report explains ourbusiness structure, strengths, and strategies based on our 10 years Vision
and Medium-Term Business Plan, as well as the foundations that support
them, while relating them to the important issues (Materialities) that we
recognize as our priorities.

About AICA

Message from the President
I am Kenji Ebihara. I was appointed as Representative Direc-

3

AICA Report 2022

In the Specialty & Performance Materials Business, which
focuses on products for the non-construction sector, sales increased due to solid performance both in Japan and overseas,
and the addition of a UV-cured coating agent manufacturing site
(Dayuan Plant) to EVERMORE CHEMICAL INDSUTRY. We willcontinue to focus on the development of UV Resin Business, forwhich demand is expected to grow, and expand our Specialty &Performance Materials Business.
As for overseas business, both the Chemical Products Segment and the Laminates & Building Materials Segment grewsignificantly. In the Chemical Products Segment, the AICA Asia
Pacific Holding Group in particular achieved significant growththanks to an increase in sales volume and the ability to promptly reflect the steep rise in raw material prices in selling prices.
Increased sales of phenol formaldehyde resins for bamboo in
China and the newly consolidated hot-melt manufacturing andsales company Aica Adtek in Malaysia also contributed to theincrease. Three large capital investments are under way at the
China facility to increase production capacity, and the Vietnam
facility is scheduled to begin production of phenol formaldehyde
resins in addition to the products it has been producing to date.
We will strive for further growth by capturing robust demand forresins for composite board and plywood in the Asian region.
In the Laminates & Building Materials Segment, the recoveryof the Chinese market, which had been depressed due to the
COVID-19 pandemic, and the growth of net sales in key markets
such as India, Thailand, Indonesia, and Vietnam, resulted in a
1.2-fold increase in overseas sales over the previous year and

AICA Report 2022

Data Compilation

Kenji Ebihara
Representative Director and President

Creation and Expansion of GrowthBusinesses
We aim to achieve sustainable growth by focusing on business creation and expansion in markets where growth is expected.
With regard to AS (Aica Solution) products, a group of products that provide solutions to various social issues, the salesof Fiore Stone, an engineered stone, grew substantially as analternative to natural stone, and the sales of Virutect, an antiviralbuilding material, increased due to heightened hygiene awareness in the COVID-19 pandemic. AICA PUR floor coating material and JOLYPATE wall coating material, also sold well, mainly
for use in renovations. As a result, net sales of AS products
increased to 16.9 billion yen, up 9.4% from the previous year.
Basic Policy 1

Foundations of AICA

AICA Group aims to be a sustainablecorporate entity, while promoting innovationand contributing to the evolution toward aprosperous society.

Consolidated business results for FY2021 were as follows:
net sales of 214,514 million yen (up 22.8% year on year), operating profit of 20,348 million yen (up 13.1%), ordinary profit of
21,840 million yen (up 18.5%), and profit attributable to owners of parent (hereunder, net profit) of 13,117 million yen (up21.9%). Net sales surpassed 200 billion yen for the first time,ordinary profit reached a record high, and operating profit andnet profit were also much higher than the previous year.
With regard to sales, the recovery from the impact of the
COVID-19 pandemic led to growth in both the Japanese andoverseas markets for both the Chemical Products Segment
and the Laminates & Building Materials Segment. Overseas net
sales exceeding 100 billion yen for the first time. Though profit
in both segments could not reach the target because of soaring
raw material prices, the sales of high pressure laminate (HPL)
and CERARL had come back strongly supported by the recovery of domestic market in Japan. Besides, the sales growth by
AICA Asia Pacific Holding Group had contributed.
With those reasons, we could get back to the normal growing track after the Covid-19 pandemic which slowed us down
during FY2021.

In April 2021, we launched “Change & Grow 2400,” our Medium-Term Business Plan for FY2021 to FY2023. We plan toimplement various measures to achieve the specified financial
targets; ROE of 10%, ordinary profit of 24 billion yen, and net
sales of 240 billion yen, as well as non-financial targets to help
strengthen our business infrastructure.

AICA’s Vision

FY2021 Overview

Medium-Term Business Plan
Progress with “Change & Grow 2400”

About AICA

tor & President of Aica Kogyo Co., Ltd. in April 2022. I feel honored and privileged to assume this position and I am bracing
myself. I, together with AICA Group members, will do my best
to be able to attain further growth of AICA Group and to live up
with all the stakeholders’ expectations. Taking this opportunity,
I kindly ask you for your ongoing support.
I want “AICA” to be a company which all of our group members can be proud of and all of our customers and shareholders feel precious and irreplaceable. In my inaugural address
as President, I introduced a new slogan of “Building AICA into
more innovative and attractive company.” In order to realize this,I will visit a variety of sites to listen to their voices in person andintegrate their views. My role is to forge the direction towards
our future success.
Our business environment is changing rapidly and getting
more complicated. In living through these times, it is necessary
to address sustainability, in ESG (environment/society/governance) and its peripheral fields, is becoming more essential.
We will keep our dialogue with our stakeholders, accomplish
the current initiatives, and contribute to shape the sustainable
society, which, I believe, leads to enhance our corporate value.

4

About AICA

Message from the President* J apanese word kyosei stands for active engagement with the AICA Group’s stakeholders (customers, employees, shareholders, suppliers, business partners, local communities and local
governments, etc.) and the global environment. Kyosei represents our approach to minimize
the adverse effects of the AICA Group’s business activities and products, and to contributeto society through the value we create and build better relationships with surroundings, withaiming for a sustainable existence together with the stakeholders mentioned above.

a doubling from the year before that, as we steadily increased
our presence in overseas markets. In FY2022, Aica Laminates
Vietnam plans to make a capital investment to double its HPL
production capacity in the future, and we will continue to meetdemand in Japan and other Asian countries.

(million yen)Three-Year Plan (At the time of formulation of the Medium-Term Business Plan)

17,991

1,410

210

23,500670

GroupCompanies
in Japan+880

Overseas
Group
Companies+3,220DX Implementation
In anticipation of a declining workforce, we are focusing on
improving productivity through the use of digital technology.
With core systems renewal and software updates completed,the foundation to improve operational efficiency was put inplace. In FY2021, we focused on the use of digital technology
in sales as well as order placement and receipt operations, andwe have begun to see the benefits of improved operational efficiency. In the future, we will further increase the utilization of data
at production sites, promote automation of equipment suited toeach site, and improve productivity with palpable rapidity.

fined our key imperatives, or materialities, as: 1. Provide econom-

See pages 50-51 for detailed scenario analysis results. A financial im-

ic value; 2. Solve social issues with products; 3. Human resource
and organizational development; 4. DX implement; 5. Responding to climate change; 6. Strengthen governance; and 7. Quality

pact assessment will also be conducted during this fiscal year,
and those results will be incorporated into our long-term business strategy.

17,991

1,715

AICA Kogyo+1,715Chemical Construction Chemical Construction
Products Materials Products Materials

202

Group
Companies
in Japan
(67)

140

569

Overseas Group
Companies+709

20,34821,50023,500Year 3
Year 2
Year 1

FY2021ResultFY2020ResultBasic Policy 3(269)

FY2022
Forecast

FY2023
Forecast

Reinforcement of Our Business Infrastructure

AICA Report 2022

We create group synergy through collaboration in technologies and market network.

3. Leading Products

Challenge and Creation

Throughout the specific domains and regions of our business, we enhance and expand ourmarket-leading products.

4. Global Presence

Corporate Philosophy
The AICA Group creates new value andcontributes to society throughcontinuous innovation in the spirit ofour philosophy of kyosei*.

We strive to achieve sustainable growth in global markets by enhancing the capabilities of ouroverseas operations and participating in the higher growth sectors.

5. Human Resources and Organizations
Viewing human resources as the most vital resource of our company, we nurture motivatedhuman resources and organizations through mutual understanding and development.

6. Compliance Management
We practice fair and transparnt management in accordance with all relevant laws, regulations,and social order.

7. Commitment to Safety and Security

Corporate Policy

Code of
Conduct

Sustainability Policy

1 Compliance with laws and regulations
2 Respect for human rights 3 Harmony with society
4 Fair business practice 5 Customer’s security and trust
6 Proper information disclosure
7 Protection of company information and property 8 Environment and safety

AICA’s 10 years Vision
Medium-Term Business Plan

We ensure trusted quality and engage in environmentally considerate business activities byfocusing on our communication with stakeholders.

Sustainability Policy
1 We address social issues through our business activities to contribute to the creation ofa better society.

2 We have established “Compliance with laws and regulations,” “Respect for human rights,”“Harmony with society,” “Fair business practice,” “Customer’s security and trust,” “Proper
information disclosure,” “Protection of company information and property,” and “Environment and safety” as the basic principles of the Code of Conduct, and we base our actions
on these principles as shared values for all employees.

3 We emphasize dialog with stakeholders, including customers, employees, shareholders,
suppliers, business partners, local communities, and local governments, and respondpromptly to social needs and changes.

4 We identify material issues from the perspectives of both corporate management andCompany Policy (single-year policy)

Regarding the development of products that respond to climate change, progress is being managed by the Conference on
Development Themes Responsive to Climate Change, which wasestablished in April 2021, and which I am promoting with my own
participation. In FY2021, we achieved certain results, including
the use of biomass-derived raw materials for our main productline HPL, adhesives, and Organic beads, and the developmentof a 3D exterior decorative films that will help reduce greenhousegas (GHG) emissions in the automobile manufacturing process.
We will continue to focus on the development of products that
contribute to the reduction of GHG emissions throughout theirlifecycle and promote the development of innovative productswith prompt action.

Strengthening Our Risk Management System
Risk management is taking on ever-greater importance amid
increasing globalization and business complexity, in addition
to an uncertain social circumstance. Since FY2021, we havebeen reviewing our risk assessment methodology, and established a Risk Assessment Council in April 2022, in which I myself participate. Participants in the council include the heads oforganizations in charge of risk management, and deliberate thepertinence of the risks reported by each company and division,
including likelihood of occurrence and magnitude of impact. The

stakeholders, address those issues alongside our business activities, and disclose ourprogress in addressing them.

results of the deliberation are approval by the Board of Directors,
and risks identified as significant then disclosed as “Business
Risks”. For each identified risk, we assign a management organization and meeting body to manage progress, and strive to
reduce these risks and identify new ones as early as possible.

Aiming to Be a Sustainable Corporate Entity
Kyosei is a word that we place at the core of our Corporate
Philosophy, and we work hard to embody this philosophy byhelping to solve various social issues. In addition, to promotesustainability management in line with international frameworks,
we signed the United Nations Global Compact in 2018, and aredeveloping SDG initiatives on a company-wide basis. In April
2021, we formulated a Sustainability Policy to clearly state ourbasic approach on sustainability both internally and externally,
and we revised our Code of Conduct to clarify the status of thispolicy as a common Group value. The Medium-Term Business
Plan for Materiality, which was launched in April 2021, also incorporates non-financial materialities for the first time, strengthening the Group’s united efforts to help solve social issues.
We will continue to engage in management with a focus onsustainability, and to contribute to the formation of a prosperous
society, while striving to become a more sustainable corporate
entity that is resilient to change.

AICA Report 2022

Data Compilation

Today’s society is characterized by rapid changes in industrial
structure and business environments due to increasing calls forthe realization of a sustainable society. This places ever-greater
responsibilities on companies. In response to this, we have de-Year 1 Result5

Our Corporate Policy is to regard human resources as ourmost vital resource of our company, and aim to nurture motivated human resources and organizations through mutual understanding and growth. To create a work environment in which adiverse workforce can play an active role, a Career Support Unit
was established in the Human Resources Department in April
2022. We are currently studying ways to expand opportunities
for senior generations to play an active role in the company, including revisions in our systems. In addition, we are substantially revising our programs for the development of global-minded
human resources as we further revitalize communication withoverseas group companies in order to expand Group synergy.

We create uniquely original products through the power of chemistry and design, to contributeto the achievement of a prosperous society.

2. Group Synergies

Human Resource and Organizational Development

As society undergoes major changes due to the impact ofclimate change, we are focused on responding with a sense ofcrisis, understanding that our corporative value could be damaged if we fail to respond appropriately. Our efforts to address
climate change are led by the Climate Change Response Committee established under the Sustainability Development Committee. In FY2021, three environmental investments related torenewable energy were decided on as a result of the committee's activities, as well as the introduction of our Internal Carbon
Pricing (ICP) program. We plan to use this ICP system to implement concrete reduction measures with a view to achieving
net-zero emissions by 2050.
In addition, our transition to the prime market in April 2022
makes it necessary for us to address the TCFD recommendations. In order to expand disclosure based on the recommendations, we conducted a scenario analysis in the first half of
FY2022, the results of which are disclosed in this AICA Report.

FY2023
Forecast

Corporate Principle

alize results and quantitatively manage progress.

Responding to Climate Change

FY2020Result1. Chemistry and Design

ability Development Committee, which I chair, is working to visu-

Foundations of AICA

AICA
Kogyo
+1,410Construction
Chemical Materials
Chemical Construction Products 1,900
Products Materials
1,320

Corporate Policy

AICA’s Vision

Change in Operating Profit

Overall Image of AICA Policies

About AICA

Profit Base Enhancement
By building a resilient management structure through various cost reductions, DX implementation, optimization of the
distribution network, and improvement of production efficiency,
we plan to increase operating profit from 17.991 billion yen in
FY2020 to 23.5 billion yen in 3 years, a 1.3-fold increase. In
FY2021, sales grew from the previous year to 20.348 billion
yen (up 13.1% year on year), but did not reach the projectedlevel due to the impact of factors including soaring raw materials prices. In the current fiscal year, we will strive to secure
profits not only by increasing sales but also by enhancing profit
improvement measures such as improving production efficiency and revising selling prices to reflect increased raw materials
costs. We will also focus on executing investments with capitalefficiency in mind and optimizing our capital structure to achievesustainable profit growth and keep ROE at the 10% level.
Basic Policy 2

assurance and occupational safety. We have incorporated thesematerialities into our Medium-Term Business Plan. The Sustain-

6

Capturing
Capturing
AsianAsianmarketmarketdemanddemandto be toa be aresilientresilientcompany
companythat wouldthat would
not benot
swayedbe swayedby Japanese
by Japaneseconstruction
construction
marketmarkettrendstrends

About AICA

Transformation of Value Creation
With the resin synthesis technologies that we have cultivated since our foundation at the core, we have re-organized ourportfolio of businesses flexibly in line with the times.
Our spirit of “Challenge and Creation,” including challenges in new businesses and the use of synergies, has been passed
down from the past to the present.
Shift toward
Shiftgeneral
towardbuilding
general building
materialsmaterials
manufacturer
manufacturer

Sales (billionSales
yen) (billion yen)200

Establishment
Establishmentof businessof businessfoundations
foundations
in periodinofperiod of
Building Building
rapid economic
rapid economic
growth growth

200

150

150

14%

Spark plugs
Spark plugs
14%

22%

46%
%
NO DATA NO46
DATA
(Non-consolidated)(Non-consolidated)
23%

100

3.29 billion3.29
yen billion yen

18%

Ceramics Ceramics

consolidated)consolidated)

28%(Non-consolidated)(Non-consolidated)

Chemical Chemical*1
products products
Dec. 1946Dec.
1946*1
18%

32%
32%(1965.10-1966.11)(1965.10-1966.11)
46%
46%

Chemical Chemical
products products

24%

24%

17%

17%

Operating profit
Operating(100 million
profit (100yen) million yen)
Number of new
Numberhousingof new
startshousing(10,000
startsunits)(10,000 units)
Area of non-residential
Area of non-residentialbuildingbuilding
starts (million
startsm2) (million m2)

FY2021 FY2021

43%

57% 57%214.5214.5
billion yen billion yen
43%(Consolidated)(Consolidated)

28%

22%

64.6 billion
64.6
yen billion yen(Consolidated)(Consolidated)
31%

28%

400

300

300

200

200

100

100

Net salesNet
increases
sales increases
with
with
additionadditionof new subsidiaries
of new subsidiaries

31%

28%

Building andBuilding andhousing housingmaterials materials

LaminatedLaminatedsheets sheets

2007
2007
Revision of
Revision
Buildingof BuildingStandardsStandards
Law,
Law,
promptedpromptedbybyearthquake
earthquake
resistanceresistance
data
data
falsification
falsification
scandal scandal

LaminatedLaminatedsheets sheets

Paper
Paper
manufacture
manufacture

23%

1989
1989
Nikkei average
Nikkeireaches
averagerecord
reacheshighrecord high

1973
1973
1st Oil Shock
1st Oil Shock

100

400

1985
1985
Plaza Accord
Plaza Accord

1979
1979
2nd Oil Shock2nd Oil Shock

2008
2008
Global Global
Financial Financial
CrisisCrisisAbout AICA

17.5(Nonbillion
17.5
yen billion yen(Non-

FY1966 FY1966

Jacks/Other
Jacks/Other

Chemical Chemical
products products

FY1976 FY1976
Chemical Chemical 34%
34%
38%
38%
(1975.10-1976.11)(1975.10-1976.11)
products products

LaminatedLaminatedsheets sheets

Electronic/Electronic/
Other
Other

Chemical Chemical
products products

FY1995 FY1995

and housing
and housingmaterials materials

Convert Convert
to new businessto new businessin response
in responseto the times
to the times& Building& Building
Incorporates
Incorporates
non-residential
non-residential
market market LaminatesLaminatesmaterials materials
and achievesgrowth
and achievesgrowth
despite despite
deteriorating
deteriorating
market environment
market environment

1991
1991
Japan’s economic
Japan’s economic
bubble collapse
bubble collapse

AICA’s Vision

50

50
1949
1949
Dodge Line
Dodge
announced
Line announced

1964
1964
Tokyo Olympics
Tokyo Olympics

Number of
Numbernew housingof new housing
starts (rightstartsaxis)(right axis)
High-pressure
High-pressure
laminate (HPL)
laminate
plant (HPL)
completed
plant incompleted1959
in 1959

1945
1945
End of warEnd of war

EstablishedEstablished
1936
1936
FY1940 FY1940

profitOperatingOperating
profit(right axis)(right axis)*2

FY1950 FY1950

FY1960 FY1960

FY1970 FY1970

FY1980 FY1980

*2

*2

*2

FY1990 FY1990

FY2000 FY2000

FY2010 FY2010

FY2022 (Forecast)
FY2022 (Forecast)*1 No data exists*1 No duedatatoexiststhe turmoil
due to after
the turmoil
the Warafter
ended,
the Warso figures
ended,areso only
figures
for arethe only
singleformonth
the singleof December
month of 1946.
December 1946.
*2 Due to a *2changeDue toinathechangemonthsin thecomprisingmonths comprising
the fiscal year,
the FY1989
fiscal year,
is divided
FY1989into
is divided
two components:
into two components:
December 1988
Decemberto March
1988
1989
to Marchand April
1989
1989
andto
April
March
1989
1990.
to March 1990.
Note: Consolidated
Note: Consolidated
accounting accounting
began frombegan
FY1979.
from
AllFY1979.
accounting
All accounting
years prior to
years
thatprior
are non-consolidated.
to that are non-consolidated.

1936～1945
1936～1945

1946～1954
1946～1954

Launched Launched
Japan’s Japan’s
Launched Launchedmelamine melamine
resin-baked
resin-baked
paint
paint
first urea-based
first urea-based
resin
resin (1951)(1951)
adhesive AICHIadhesive AICHIMUTEKI-NORI
MUTEKI-NORI(1939)(1939)

1955～1966
1955～1966

1967～1976
1967～1976

Launched Launched“AICA” high-pressure“AICA” high-pressure
laminate (HPL)
laminate(1960)(HPL) (1960)

Launched Launched“AICA POSTFORM”“AICA POSTFORM”(1968)(1968)
Launched Launchedwall coatingwallmaterial,
coating material,“JOLYPATE”“JOLYPATE”(1975)(1975)

1936 1936

1960s-1970s
1960s-1970s

Late 1980s
Late 1980s

Contribution
to development
to developmentofof Use of rubber
Use of rubber
trees thattrees
hadthatbeen
had been
Development
Developmentof Japan'sof Japan's
first synthetic
first synthetic Contribution
odorless
odorlessplywood
plywood
discardeddiscardedas scrapas scrap
resin adhesive
resin adhesive
We developed
We developed
a urea-based
a urea-based
resin adhesive
resin adhesive
with
with
To increase
To increase
productivity
productivityof plywoodof plywood
in re- in reRubber tree
Rubberwoodtreeleft woodover fromleft overthe sap
fromextraction
the sap extraction
process processstrong adhesivestrong adhesive
propertiesproperties
and waterandresistance.
water resistance.
sponse tosponse
expandingto expanding
demand, demand,
we developed
we developed
was recycled
was into
recycled
laminated
into laminatedlumber andlumberturnedandintoturnedstair into stairThis drove
Thisthedrove
shift thefromshiftnaturalfrom adhesives
natural adhesives
totoa no-clamp
a no-clamp
melaminemelamine
urea formaldehyde
urea formaldehyde
resrescomponents
components
and countertops.
and countertops.
This attracted
This attention
attracted asattentionaas ahigh-performancehigh-performancesynthetic synthetic
resin adhesives.
resin adhesives.
in adhesive.
in adhesive.
We encouraged
We encouraged
increasedincreased
use of use ofpioneeringpioneering
concept inconcept
the effectivein theuse
effectiveof forest
useresources.
of forest resources.
this adhesive,
this adhesive,
which haswhich
low formal-dehyde
has low formal-dehyde
detection,detection,and odorlessand plywoods
odorless plywoods
were born.
were born.

Patent for ureaPatent for ureabased resinbased resin
adhesive adhesive

7

AICA Report 2022

Honor received
Honor received
from the Sultan
fromofthe Sultan of
the Malaysian
thestate
Malaysian stateof Kedah of Kedah

1987～1994
1987～1994

Launched Launchedpremium wooden
premium woodenCaptured top
Capturedshare of
topJapaneseshare of Japanesedoor “EASTERN
door “EASTERNCHERRY CHERRY HPL market
HPL market
DOOR” (1978)
DOOR” (1978)
Launched Launchedmelamine melamine
noncombustible
decorativedecorative
Launched Launchedhigh pressurehigh pressure noncombustible
panel, “CERARL”
panel, “CERARL”(1989)(1989)
laminate (HPL),
laminate“AICA(HPL),
COLOR“AICA COLORSYSTEM 105”
SYSTEM(1984)
105” (1984)

1995～2009
1995～2009

2010～
2010～

“CERARL”“CERARL”
became a becamehuge a huge
success assuccess
kitchenas
panel
kitchen(1996-)
panel (1996-)
Inaugural edition
Inauguralof edition of“Environmental“Environmental
Report” (1999)
Report” (1999)

Acquired shares
Acquiredin subsidiaryshares in subsidiaryof Dynea’sof Dynea’s
Asia-PacificAsia-Pacificdivision (2012)
division (2012)
Acquired shares
Acquiredin EVERMORE
shares in EVERMORECHEMICALCHEMICALINDSUTRYINDSUTRY
CO., LTD. CO.,(2018)
LTD. (2018)
Acquired shares
Acquiredin Wilsonart
shares in subsidiary
Wilsonart subsidiaryinin
Asia-PacificAsia-Pacificregion (2019)
region (2019)1990s–2000s
1990s–2000s

2010 2010

Response
Response
to Sick to
house
Sicksyndrome
house syndrome

SupportSupport
for forest
forresources
forest resources
protection
protectionDevelopment
Development
and and2017-2017-

expansion
expansion
sales ofsales
AS of AS
From theFrom
1990s,
thehypersensitivity
1990s, hypersensitivity
to chemical
to chemical
substances,
substances,
as exem-as exemWe wereWethewere
first theJapanese
first Japanesemanufacturer
manufacturerofofplified by plified
Sick houseby Sick
syndrome,
house syndrome,
became abecame
seriousasocial
seriousproblem.
social problem.
InIn
high-pressurehigh-pressure
laminateslaminates(HPL) to obtain(HPL) toForestobtainSusForest Susproducts
products
responseresponseto the 2002
to theMinistry
2002ofMinistry
Health,ofLabor,
Health,andLabor,
Welfareandguidelines
Welfare guidelines
tainability tainability
Council (FSC/PEFC)
Council (FSC/PEFC)
certification
certification
for cer- for cerWe positioned
We positioned
product ranges
product ranges
and the 2003
and therevised
2003Building
revised Standards
Building Standards
Act, we launched
Act, we launched
AICA ECOAICA ECOtain of ourtainHPLof ourproducts.
HPL products.
Subsequently,
Subsequently,
we were we werethat contributethat contributeto the solution
to the solution
ECO BOND,ECOaBOND,
healthy-housing
a healthy-housing
adhesive adhesivethat containedthat contained
no restricted
no restrictedawarded theawarded
Biomassthe mark
Biomass
for thosemark samefor those
products
same productssocialasissues
AS (Aica
as AS (Aicasubstances
substancessuch as formaldehyde,
such as formaldehyde,
toluene, andtoluene,xylene.
and xylene.
and for someand forof oursome
decorativeof our decorative
board products.
board products. of social ofissues
Solution) Solution)
products products
and con-and concentratedcentrated
our efforts
ourintoefforts
de- into developing veloping
and expanding
and expanding
sales
sales
of those of
product
those ranges.
product The
ranges. The
objectivesobjectivesof those ofproducts
those products
AICA ECO-ECO
AICA ECO-ECO
are manyare
andmany
diverse,and includdiverse, includBOND whenBOND
it waswhen it was
ing alleviating
ing alleviating
labor shortages,
labor shortages,
first releasedfirst released
High pressure
High pressure [Polyester [Polyester[Marless Board][Marless Board]
reducing reducing
waste, andwaste,
building
and building
laminate (HPL)
laminate (HPL)
Decorative Panels]
Decorative Panels]
safe cities.
safe cities.
AICA Report 2022

8

Data Compilation

Social Background
Social Backgroundand Products
and Products
CreatedCreatedby the AICA
by theGroup
AICA Group

1977～1986
1977～1986

Foundations of AICA

19651965Izanagi economic
Izanagi economic
boom
boom

Area of non-residential
Area of non-residentialbuilding starts
building(rightstartsaxis)(right axis)

About AICA

AICA’s Value Creation Model
Source of Value Creation (Business Model)
Achievement of Sustainable Society
External Environment
INPUT

9.8

Politics
Economic trends

Cash and cash equivalents

44.9

Demographics

Incorporation
into businessbillion yen

Social resources
Sales and customer basenetworks spread acrossJapan and overseas

Social issues and needs

Employees [consolidated]

4,949

Lifestylechanges

Contribution
throughbusiness

Brand building
Synergy creation
Brand value

Expansion ofsales channels
M&A

Derivative
products

Plants

7.1 billion yen

SafetySuppliers

Adhesives

Solutions to
issues

Improvement

Practical
feedback

Environmental
wellbeing

Extensiveproduct
range

Employees

Specialty & Performance Materials

Sales
network
Customerbase

Marketdevelopment

Expansion of
applications

Quality
Environmental
wellbeing

Synergydevelopment

Provision of
seeds

Reassurance

Chemical
Products
Laminates &Building
Materials

Shareholders

Synergies

ComfortLocal
communities

Core technologies

45 locations

Capital investment

Customers

Construction resins

50

Global network of manufacturing
facilities and IT systems

HealthOverseas
expansionCompanies [consolidated]

Manufacturing assets

IMPACT

Foundations of AICA

External Environment

Honest and diverse humanresources filled with a spiritof “Challenge and Creation”

OUTCOME

Return ofresources

300

Human assets

OUTPUT

Resource depletion

Resource
input

About
companies
Overseas customers

10,000 companies

EnergyIssues

AICA’s Vision

AICA Distributors’ Organization(in Japan)

About

Climate changebillion yen* Plese refer to page 6 for the meaning of kyosei

About AICA

Financial capitals
Capitals

Social issues and needs

Globalization
Diversification(As of end-Mar. 2022)

The source of AICA’s Value Creation Model lies in our development capabilities that use core technologies based on Chemistry and
Design, our domestic and overseas sales networks and customer bases, our capabilities in helping to solve social issues developed
through dialog with stakeholders, our range of high-quality products and brand value generated from those capabilities, excellent
human assets, and a healthy financial base. We solve social issues through our business activities by creating synergies between
the Chemical Products and Laminates & Building Materials Businesses, and continuing the cycle of improving and expanding thesestrengths. Guided by a philosophy of kyosei *, which places importance on dialog with stakeholders, AICA creates new value andcontributes to society through continuous innovation.

Chemistry

DesignEasierconstruction

Materials for residential

Achievement of
Sustainable Society
Data Compilation

Intellectual resources
Accumulated chemical technologies
and design capabilities
R&D bases

14 locations in 5 countries

R&D expenditure

3.4 billion yen

Long-life

Corporate Principle
Challenge and Creation

Materials for commercial facilities and offices

Corporate Philosophy
Corporate Policy

Sustainability Policy
Universal
designNatural resources
Wood, water, air, and energy*1

Materials for healthcare and welfare/childcare andschool facilities*1 Shion Kindergarten Annex + Shion School Children’s Club Design: Kozue Hotta, Goyoukiki

9

AICA Report 2022

AICA Report 202210About AICA

AICA’s Strengths Supporting Value Creation
AICA’s strengths lie in our extensive product range that leverages the advantages in Chemistry and Design, as well as a solid
customer base which supports that product range, overseas business bases, brand value, excellent human assets, the trust ofsociety backed by high quality and environmental wellbeing, and a healthy financial base. We will improve our corporate sustainability by emphasizing dialog with stakeholders and continuing to enhance these strengths.

Helping Solve Social Issues with the Power of Chemistry and Design
Related Resources and Assets
Human assets

Naturalresources

Social resources

ManufacturingassetsIn both the Chemical Products and Laminates & Building Materials segments, we provide products that service multiple domains,
including housing, construction, civil engineering, household goods, electronic materials, andautomobiles. In doing so, we create synergies incross-selling and technology.

RelatedResourcesand Assets
Intellectual
resources
ManufacturingassetsNaturalresources

Overseas Expansion

RelatedResourcesand Assets

In recent years, we have continued to grow by
expanding our business domains and networks,
with a focus on growth markets in Asia. Throughaggressive M&A, we acquire superbly qualified
human resources, production bases and sales
channels to enhance our competitiveness.

Human assets
Social resources
ManufacturingassetsNaturalresources

Overseas sales ratio*2Intellectual
resources

49.2
50 14

About AICA

AICA’s most distinctive feature is our ability to respond to social issues and needs by delivering unique products through synergies between performance created by our core technologies: synthetic chemistry technologies and resin design technologies, and design in the broader sense, including ease of use and communication
as well as beauty of color and pattern.

Extensive Product Range%

Consolidated companies*2

Please refer to pages 13-14 for details on our business operations.

Reassurance

ComfortEnvironmental
wellbeing

SafetyEasierconstruction

Chemistry

DesignWith its deep understanding of AICA products, the AICA Distributors’ Organization supports the distribution of our HPL, which boasts
the top share of the Japanese market. We havealso established a solid customer base withmore than 10,000 companies overseas.

Long-life

113

35

About

Melamine
formaldehyde
resin modification
technology

Human assets
Socialresources

No.1

companies

Quality/Environmental
wellbeing
Constantly receptive of customer feedback,
we provide high-quality, environmentally-friendly
products. We also proactively address environmental issues such as climate change and contribute to the creation of a sustainable society.

TexturedesignDesignexcellence
No need forwaxingSuperior
durability
Easierconstruction
Heel markresistancecompanies

Developmentof “CERARLCELLENT,” thebest fake marble
and wood, toprotect natural
resource

Superior
durability
Easierconstruction
Certifiednoncombustible

RelatedResourcesand Assets
Human assets
Social resourcesIntellectual
resources

Customer Satisfaction Survey*2

4.5

/5

Healthy Financial Base

RelatedResourcesand Assets

We have established a healthy financial base,with a high equity ratio supported by stable operating cash flow. This leads to a virtuous cyclethat enables active growth investment and return of profits.

Financial
capitals
ManufacturingassetsNaturalresources

Cash and cash equivalents*2

44.9

billion yen

Antibacterial
specs*1 AICA Kogyo Co., Ltd. non-consolidated

AICA Report 2022

Intellectual
resources

Data Compilation

High pressure
laminate(HPL)
Acrylic resin
developed forautomobile
seats

11

The name “AICA” is synonymous withhigh-pressure laminates, as is the name“JOLYPATE” with wall coating materials, and nocosmetic product developer is unfamiliar with
the name “GANZPEARL.” These are some ofour many strong-performing brands that boast
high market shares in their respective industries.

*1, *2

Examples of Development

Development of
a completely new
flooring material,“MELAMINE TILE”

300
10,000RelatedResourcesand Assets

HPL market share in Japan*2

Overseas customers*2

Designers with practical experience or
qualification holders in architecture or design*1, *2

Human assets

Brand Value

Foundations of AICA

Universal design

Holders of master’s or doctoral
degree in chemistrySocialresources

AICA Distributors’ Organization (Japan)*2

About
HealthRelatedResourcesand Assets

countries/regions

AICA’s Vision

Customer Basecompanies in*2 As of end-Mar., 2022

AICA Report 2022

12About AICA

Our Businesses
Net sales

122.3

Adhesives 37%
Construction
resins 4%
Specialty &performancematerials 10%

Construction Resins
Specialty & Performance Materials

Polymer Beads
Additives for resin products
and cosmetics

Polyurethane Products
Sneaker soles,
textiles

AICA Report 2022

We help resolving social issues by providing repair and reinforcement materials for concrete structures such as infrastructure facilities and tile wall surfaces. Our strengths lie indesign and functionality, including the development of our
proprietary transparent resins.

Boards, Films, etc.

High pressure
laminate(HPL)

Product Range

FY2021 Result

Net sales

28.9 billion yen

Widely used for displays and other electronic devices.
We also offer products for the automotive industry, and3D decorative film for exterior applications is expected tocontribute to the reduction of greenhouse gas emissions as
an alternative to painting in the automobile manufacturing
process.
Uses are to be found in a wide range of fields, as additives
for plastics, paints, and other resin products, and cosmetics. In particular, GANZPEARL, which is mainly used in cosmetics, holds a high market share in the industry.

This is the main product of the EMC Group.*3 Our PolyUrethane System (PUS), used in the soles of sports shoes, enjoys the world’s top market share and continues to growdue to the deepening of the market for daily necessities.

Main Products and Applications
High pressure laminate (HPL)
Surface material fortables and furniture

Strengths and Features*4

119% YoY

Decorative Plywood Boards
Surface material for
furniture, interior walls, etc.

11.4 billion yen
102% YoY

Net sales

20.9 billion yen

Architectural Films
Decorative materials forinterior and exterior wall
surfaces, fittings*5

7.9 billion yen
96% YoY

CERARL is our core product which has been a long-selling for
more than 30 years since it became a major hit for use in kitchen
panels in the 1990s. It receives high marks for its resistance toscratches and stains, and is used in both new construction andrenovations at various facilities, as an indoor decorative material
in restroom spaces and facilities with heavy public use.

Decorative Calcium Silicate Boards
Indoor wall covering

These are indoor wall covering materials made with a base material of calcium silicate board, and a surface made of resin,
reinforced sheet, etc. We offer a wide range of products fromgeneral-purpose to high-end design items.

Extruded cement board (MACE)
Exterior wall material

4.7 billion yen
97% YoY

This cement-based exterior wall material features excellent
earthquake, weather, and fire resistance. It is characterized by
the beauty of its smooth surface and versatility of design.
In addition to excellent humidity control, it has deodorizing andfire resistance properties, helping extend the life of homes andimprove earthquake resistance and comfort. This is an environmentally friendly product that contains no toxic substances andis composed entirely of natural materials.

Postform
Countertops, furnitureHigh pressure laminate (HPL) is used as a surface material available in a wide range of colors and patterns. It is resistant toscratches and stains, and is used for countertops in all partsof residential and non-residential buildings, and on doors for
kitchens and closets.

Engineered Stone/Methacrylic Solid Surface
Countertops, furniture

Engineered stone, which is mainly composed of natural quartz,
is more resistant to scratching and staining than natural stone.
It is coming into increasingly widespread use, mainly for kitchen top. Methacrylic Solid Surface has high workability and isused for countertops and wash basins, as well as features andfurnishings.

Toilet Cubicle Systems
Non-residential toilet
cubicle systems

These booths serve as partitioned private stalls in the restrooms ofcommercial facilities, offices, hospitals and other public facilities usedby many people. High pressure laminate (HPL) is used for the surface
material, featuring a wide variety of color patterns and designs, aswell as safety features such as finger pinch and snag prevention.

110% YoY

Net sales*6

Multifunctional Calcium Silicate Panel
Indoor wall coveringand material for ceilings

Net sales18.2 billion yen

Its flexibility allows it to be used to decorate fittings, in addition to walls, expanding the range of coordination possibilities.
Products for outdoor use and processed products such as louvers are also available, and are used mainly in non-residential
facilities.

CERARL (Melamine noncombustible decorative panel)
Indoor wall covering

109% YoY

Net sales

It is available in a wide variety of colors and patterns, has excellent
durability, and boasts the top market share in the industry. It is
used in various parts of residences, commercial facilities, medical and welfare facilities, offices, and lodging facilities. We provide
highly functional products that leverage our chemical technology.

The color pattern is integrated with that of HPL, our main
product line, to enable color pattern coordination. The surface
is made of polyester resin and reinforced paper with excellent
abrasion resistance, and is used in a variety of facilities.

Net sales

Demand is solid for use in wood furniture and automobile
headlamps. Sales in high-growth markets such as those forsanitary and packaging materials are also growing.

*3 EVERMORE CHEMICAL INDSUTRY GroupCountertops,
Postform 8%

We offer a wide variety of highly original products by utilizing thechemical technologies cultivated in the Chemical Products business,
including our HPL, which enjoys the largest market share in Japan.
A wide range of variations are available to liven up all kinds of architectural spaces.

Fittings/Storage
Interior doors, storage
furniture*4 Ginza Itoya Yokohama Motomachi Design: Ikeda Architects Photo: Atsushi Nakamichi/Nacása & Partners Inc.
*6 Senshu University Ikuta New Building No. 2 and No.3, Designed by Nikken Sekkei, Ltd.

Data Compilation

129% YoY43%

CERARL 10%
Noncombustible
decorative panels 4%

Providing distinctive products
leveraging chemical technology

Foundations of AICA

These products help improve the durability of concrete
floors. We leverage our strength in resin technology to provide high value-added products with excellent weather resistance and ease of installation.

Materials for Repair, Reinforcement and Corrosion preventive materials
Resins for repair andreinforcement of concrete
structures, etc.

*1 Operating profit before deduction of unallocated operating expenses *2 AICA Asia Pacific Holdings Group13

High-durability coating materials with sophisticated design
characteristics centered around JOLYPATE, a brand-nameproduct with a 47-year history. CLIMATERIA is a new andexpanding brand that has been well received by designers.

106% YoY

21.7 billion yen

Strengths and Features

These are the main products of the AAPH Group*2, andcontinue to grow by capturing strong demand in Southeast Asia. In recent years, resins for fast-growing bamboo
materials have grown significantly in response to growing
environmental awareness.

Floor Coating Materials
Paints for floor of plants,
warehouses, etc.

Net sales

HPL 13%Fittings & Interior
housing materials 2%

These products are used as raw materials for industrial
products in a wide range of fields, including construction,
automobiles, steel, and electronics. We are expanding thetechnology we have developed in Japanese market to overseas markets.

Wall Coating Materials
Decorative paints for interior
and exterior building walls

UV-curable resins
Resins and films for electronicmaterials and automobiles

57%

CERARL

Adhesives

Industrial Resins
Resins for industrial
product bonding

Hot Melts
Adhesives for automotive andsanitary materials

Chemical
Products

In Japan, our strength lies in the construction market, including collaborative sales of various products in the Laminates &Building Materials segment. In Indonesia, we have the No. 1
share of the rubber adhesive market, and we are broadly expanding our business elsewhere overseas as well.

Composite Board Resins
Resins for bonding woodboards (MDF, particleboard)

9.2 billion yen

billion yen

Boards, Films, etc. 5%

Laminates &Building
Materials

Noncombustible
decorative panels

Main Products and Applications

144% YoY

Net sales

16.3

AICA’s Vision

78.5 billion yen

billion yen

Other chemical
products 6%

Industrial/Architectural adhesives
Adhesives for wood furniture,
construction materials andbuilding construction

Net sales

92.1

Laminates & Building Materials Segment

About AICA

FY2021 Result

7.3

billion yen

Operating profit*1(In the AAPH Group*2 30%)

Since 1936, when we developed Japan’s first Urea-based resin adhesive, we have been developing products that lead the times withour chemical synthesis technology. Since the 2000s, we have been
focusing on expanding our Specialty & Performance Material products offering as a new business domain, diversifying the areas inwhich we are active.
Product Range

billion yen

Net sales

Postform,
Countertops

Fundamental business operations
cultivating core technologies

Operating profit*1

Fittings & HomeInterior Materials

Chemical Products Segment

In addition to general interior doors for residences, we also havea lineup of sliding doors for medical and welfare facilities. Ourstorage furniture series, which allows free design, is growing in
popularity by satisfying diverse needs.
*5 msb (Musubu) Tamachi, Tamachi Station Tower N

AICA Report 2022

14

AICA’s Vision

The current Medium-Term Business Plan is the 2ndphase of AICA’s 10 years Vision

AICA’s 10 years Vision and Medium-TermBusiness Plan
AICA’s 10 years Vision

240

NEXT JUMP
1500
FY2016151.6

FY2020174.6
billion yen

billion yen

214.5

151.6 billion yen

300 billion yen

Consolidated Ordinary Profit

18.3 billion yen

30 billion yen

9.9%

10% or more

30.8%

45% or more

ROE
Overseas Sales Ratio

Aica Group will aim to be Asia’s No.1 resin manufacturer
in the construction sector to support people’s lives and social
infrastruc­ture. We will also grow our business in non-construction sectors, including automotive/household goods/electronicmaterials.

130billion yen

The Laminates & Building Materials Business will continue togrow as a “solution provider for space design” that canoffer comfort & safety in residential & non-residential living spaces.

In order to establish a system which can respond to changes in market environment,
we are strengthening group collaboration and business foundations.

90.4

FY2020

FY2021

FY2022

FY2023

FY2026(Billion yen)

1st Medium-Term Business Plan

2nd Medium-Term Business Plan

3rd Medium-Term Business Plan

Healthy financial base

IT infrastructure investment

We promote diversity management, and will establish a variety of systems to develop
globally competent and professional human resources.
Diversity

Professional human resources

We will emphasize engagement with stakeholders, and promote management which
contributes to local communities and enhances CS and ES.
Corporate governance enhancement

Harmony with local communities

Improvement of CS & ES

In formulating our 2nd Medium-Term Business Plan, we organized the issues we are facing. In the midst of significant changes
in society, we believe that we are able to realize sustainable growth by addressing those changes ourselves.

Internal resources and assets
Intellectual
Resources

Manufacturing
AssetsNext-generation
large-scale coreproducts
Quality/SafetyAccumulation ofknowledge
Insufficient brandvalue of products
other than domestic
HPLImplementing DX*2

 ging plants
ADelay in automation
Insufficient action
on reduction of
GHG*3 emissions
Optimization of
production systems

External resources and assets

Human Assets

Financial
Capitals ction onAdevelopmenttraining andcareer-path designfor managementhuman resources
Building of
succession plan igh dependenceHon profit from
HPL and CERARL
Businessinvestment
impairment risk
Exchange raterisk

Social Resources ontraction of wooden furnitureCmarket in Japan (HPL, decorative
polyester plywood boards)
Decline in number of new housing
starts in Japan (800,000 dwellings)
Shortage of skilled workers, expansionof need for easier construction
Progress of automation at work sites
where AICA’s products are used
Expansion of ZEH and ZEB,
changes in the taxation system
Lifestyle changes due to the
COVID-19 pandemic
Soaring logistics costs

NaturalResources ransition to lowT
carbon society
Penetration of ZEH
and ZEB
Transition to biomass
products andproducts with low
CO2 emissions
Natural disaster risks
Raw materials costs
soaring risks

Data Compilation

Increase corporate value

R&D investment

Technology and material cooperation
QEO Management

Globally competent human resources

FY2019125

Foundations of AICA

We will actively and efficiently utilize our own funds for our future growth,
including capital tie-up or M&A.

Compliance

FY2018billion yen

Recognizing Issues in the 2nd Medium-Term Business Plan

Utilizing capital tie-up
and M&A

Optimize production & logistic systems

FY2017

103.9

135

170

*1 FY2023 Forecast at the time of formulation of the Medium-Term Business Plan

We will continue to enhance the collaboration between the Chemical Products
Segment and the Laminates & Building Materials Segment to develop uniqueproducts that contribute to society.

Responsibility to
stakeholders

82.9

74.8

Business collaboration

Human Resources
Development

Net sales

122.3

billion yen

Chemical Products
Segment

87.5
84.1

109

130

AICA’s Visionbillion yen

Net sales

76.7

FY2016

170

115

92.1

80.8

The Future Vision at FY2026

Laminates & Building
Net sales
Materials Segment

97

Laminates & Building
Materials Segment
About AICA

174.6
82.3

FY2026

Consolidated Net Sales

240*1

191.5

163.7
151.6
FY2016232(Forecast)(Result)

191.3

Financial Targets in 10 Years

Group Collaboration& Operation Base
Enhancement

300 billion yen
90th anniversary

billion yen*1

AICA’s 10 Years Vision

Net sales

FY2026FY2023In April 2017, AICA established AICA’s 10 years Vision with the goal of FY2026, the 90th anniversary of the company. With theaim of transforming into a solid, robust management structure that will not be easily influenced by trends in the Japanese construction market, in the Chemical Products Segment, we will aim to become Asia’s top manufacturer of resins for the construction sector, which supports people’s lives and social infrastructure. We will also grow non-construction sectors such as automotive, household goods, and electronic materials. In the Laminates & Building Segment, we are aiming for further business growth
as a “solution provider for space design” that can provide comfort and safety to residential and non-residential living spaces.

Chemical Products
Segment

AICA’s
10 years Vision

In particular, the following two points are changing rapidly, driven by the national government,
capital markets, and the international community.
Responding to Climate Change

DX*2 Implementation

Given that individual governments, including Japan, have declared targets of net zero GHG*3 emissions by 2050, we recognize that the demand for lower carbon levels in AICA’s products
and business activities will increase.

AICA’s work styles and those of our stakeholders are beingchanged significantly by digital technologies, and we believethat action on DX*2 taken by AICA’s businesses and products
will become increasingly important.

*2 Digital transformation *3 Greenhouse gas

15

AICA Report 2022

AICA Report 2022

16

AICA’s Vision

Medium-Term Business Plan

Basic Policy for the Medium-Term Business Plan

① Creation and Expansion of Growth Businesses

Medium-Term Business Plan “Change & Grow 2400” (FY2021 to FY2023)

Expanding AS Products

As the second step toward realizing AICA’s 10 years Vision, we established financial targets and basic policies to be achieved
over the three years of our Medium-Term Business Plan, “Change & Grow 2400.” The basic policies in the Medium-Term Business Plan are ① creation and expansion of growth businesses, ② profit base enhancement, and ③ reinforcement ofbusiness infrastructure. By robustly implementing these measures, we will make ourselves into a corporate entity that is more
resilient against change as we achieve sustainable growth.

Background

Financial Targets
Efficiency
Manage capital efficiently and generate profit

Growth Potential

FY2021(Result)

8.1%

ROE
Overseas + Specialty &81.2 billion yen

114.7 billion yen

Expand the share of products that solve
social issues in the Japanese market

AS*2 product sales

15.5 billion yen

16.9 billion yen

Profitability

Ordinary profit

Issue Solutions

9% or more

Aiming for10%

125 billion yen 115 billion yen*3

18 billion yen*3

21 billion yen

22 billion yen 24 billion yen
174.6 billion yen 214.5 billion yen 232 billion yen 240 billion yen
18.4 billion yen

Net sales*3 Initial plan for FY2022*4 Revised business results forecast for July 2022

Investment Plan
Business Investment

Human Resources
Investment

23 billion yen
17 billion yen
12 billion yen

7.11 billion yen

Production capacity expansion, production system optimization, automation,
DX-response, climate change-response, BCP-response

4.2 billion yen

Entry into new markets and new business areas, expansion of technological base3.45 billion yen

Development of next-generation core products and strengthening of development capacity──

Development of diverse human resources, skill improvement and management forindividuals

Materialities of the Medium-Term Business Plan
Creation and Expansion of

1 Provide economic value

Solve social issues withproducts

2 

1

Human resources andorganizational development

4 DX implementation

Strengthening Our

Profit Base2

5 Responding to climate change
6 Strengthen governance

Quality assurance andoccupational safety

7 

17

AICA Report 2022

Expanding AS products
Expansion of non-construction
sector businesses
Growth of overseas businessHighly functional
products

Products for repair/
reinforcement domains

Lightweight
products

Easier construction
products

Owner

Generalcontractors

Designers

Distributors
AgentsTradingcompanies

Please refer to pages 19-20, 27-30 for details.

Expansion of Non-Construction Sector Businesses and Growth of Overseas Markets
We consider the non-construction business and overseas business as two important growth businesses, and will expand net
sales in these two businesses by 1.4 times in three years. We were able to build a foothold for the growth of these businesses
during the previous Medium-Term Business Plan period. Over the three years of the current Medium-Term Business Plan, we arestrengthening our initiatives in areas such as synergy creation, equipment reinforcement,
expansion of sales channels, and brand development, with the aim of expanding
Chemical products segment
our markets and business domains.
Specialty & performancematerials business275

Background
Please refer to pages 18-20 for details.

Expansion of applications andbusiness domains
Expansion of cross synergy,
Strengthening of R&D functions

Growth business net sales

Market growth in Asian region
Dependence on domestic construction market
Change in needs regarding high-quality productsShift to biomass products and low-carbon
emission products
Lifestyle changes due to the COVID-19 pandemic

Increase

We have generallyachieved our threeyear goals in thefirst year

AICA’s Strengths
Please refer to pages 21-22 for details

Optimize sales & logistics networks
Strengthen sales foundation, establish brands
Automate, reduce costs, enhance production efficiency, optimize
production foundations

Resin synthesis technology/design strengths
Sales channels and strengths of AAPH*1,
EMC*2, and AALH*3
Technologies and expertise cultivated in Japan
No.1 brand with top share of Japanese market

Business Infrastructure3

Please refer to pages 23-26 for details.

Human resource development, Organizational development
DX implementation
Climate change response
Strengthening of governance
Quality assurance and occupational safety reate synergies/increaseCand strengthen plant/expand
sales channels
Brand development overseas
Develop core large productsof the next generation
Capture growth markets in
non-construction sector

Laminates &building materials
segment
Overseas business305

productss
Chemical products
segment
Overseas business(Excluding thethe specialty
specialty& performance
performancematerials business)business)
570

570

125*4
(FY2022 Initial
Forecast)(Unit: billion yen)244

The Tasks Before Us
Strengthen theto Support the Items Listed Above

1.4 times over 3 years

115*4(FY2023 Forecast*5)

114.7*4
174

246

81.2*

4

194

(FY2020
Result)(FY2021
Result)677
444*1 AICA Asia Pacific Holdings Group*2 EVERMORE CHEMICAL INDSUTRY*3AICA Asia Laminates Holding Co., Ltd.
*4 Accumulated net sales prior to consolidation elimination*5 Forecast at the time of formulation of the Medium-Term Business Plan

Please refer to pages 27-30 for details.

AICA Report 2022

18

Data Compilation

3

Growth Businesses(Unit: billion yen)
* Forecast at the time of formulation of
the Medium-Term Business Plan

Foundations of AICA

R&D Expenditure

Investment Resultsfor FY2021(FY2023
Forecast*)(FY2022
Initial Forecast)(FY2021
Result)(FY2020
Result) roduct development capability
P
combining Chemistry and Design
Broad range of sales domains inconstruction market in Japan

Builders
ArtisansCumulative Investments
over 3 Fiscal Years

16.9

15.5

21

18

AICA’s Strengths and Business Model

21.8 billion yen*4*1 Simple total of net sales before elimination of intercompany transactions *2 Aica Solution

AS Products Sales

AICA’s Vision

Total value provided to society

FY2022(Forecast)

9.4%

performance materials
business net sales*1

Leveraging our strengths to capture market
growthFY2023(Plan at the time offormulation of MediumTerm Business Plan)Inactive Japanese construction market,
which AICA depends on
Shortage of skilled workers, expansion ofneed for easier construction
Progress in automation at sites of consumption
Transition to low-carbon society
Lifestyle changes due to the COVID-19 pandemic

About AICA

FY2020(Result)

Capital Investment

We will focus our efforts on the expansion of sales of AS (AICA Solution) products in Japan, to respond to constantly changing
social issues, including labor shortages, aging infrastructure, soaring logistics costs, and antivirus measures. We plan to increase oursales to 21 billion yen in three years by identifying social issues through active engagement with our stakeholders, developing products with high added value that leverage our strengths in Chemistry and Design, and expanding our sales in the Japanese market.

Special Feature

SDG-Oriented Products

By providing products that help solve social issues,
we contribute to the formation of a sustainable society.

SDG-Oriented Products and AS Products
Products defined as contributing to achievement of the SDGs include avariety of items ranging from those that support stable earnings to those offered from a long-term perspective in anticipation of future growth. Amongthese, we classify products that will drive short- to medium-term growth in
the Japanese market as “AS (AICA Solution) Products,” and we focus ondeveloping and expanding sales of these products in particular.

At AICA, we pursue a cooperate philosophy by which we create new value and contribute to society through continuous innovationin the spirit of our philosophy of kyosei*. To manifest this philosophy in action, we take social issues seriously and focus on developing and providing products that contribute to solving them. In order to make these efforts more tangible, we have organized thecharacteristics of our products in relation to the SDGs as shown below, and defined them as “SDG-Oriented Products.” We willcontinue to expand this category of products by leveraging our strengths in Chemistry and Design.

SDGOriented
Products
AS
Products

SDG-Oriented Products
AS Product Relevance

About AICA

* Plese refer to page 6 for the meaning of kyosei

Characteristics of SDG-Oriented Products
Effective Use of Forest
Resources

Stone Resource
Conservation

Decorative boards, fixtures, countertops,
Resins and adhesives for plywood and fiberboard

Trees absorb atmospheric CO2 and store carbon as they grow. We can maintain the effectiveness of forest CO2 absorption byeffectively utilizing older trees that are absorbing less carbon dioxide, and by activating the forest’s metabolism. AICA contributes tothe effective use of wood resources by providing resins and adhesives used in processing wood into plywood, MDF, particleboard,and other wooden products, as well as utilizing wood materials in many products such as decorative boards and countertops.

High pressure laminate (HPL), decorative boards, adhesives
for plywood, electronic materials

Biomass refers to a biologically-derived organic resource that is increasingly being used as an alternative
to fossil resources. Plant-derived biomass in particular is considered a carbon-neutral resource because, although it emits CO2
when it is discarded and burned, the CO2 that was absorbed during its biological growth process only returns to the atmosphere.
AICA contributes to the creation of a recycling-oriented society through the active use of biomass materials.

High Durability and Low
Maintenance

Overagressive mining of rare stone materials with high design value may lead to the cutting down of trees and the removal of
topsoil. We can enhance sustainability through the efficient use of scarce stone resources, and the development of materials
that provide alternatives to finite natural stone resources by pursuing printing and resin technologies. AICA offers realisticstone surface reproductions for countertops and walls.

Energy Conservation
High pressure Polyester
laminate (HPL) Decorative
PanelsMarless
Board

Antiviral building materials (HPL, melamine noncombustible
decorative panels, countertops, fittings), anti-viral films

Waste Reduction
Virus

Heat storageby outdoor air

Small

Repair and reinforcement materials, wall coating materials(for exterior insulation method)

Countertops, fittings, toilet cubicle systems

Multifunctional calcium silicate panel, HPL (refurbishment
method)*1

Health Conscious

Data Compilation

Building materials with deodorant performance (HPL,
melamine noncombustible decorative panels, multifunctional
calcium silicate panels, fittings, wall coating materials, etc.)

Multifunctional calcium silicate panel, wall coating materials

In recent years, houses have become increasingly airtight and insulated, and energy use efficiency has improved. On
the other hand, health hazards caused by chemicals, dust mites, and mold have become an issue. AICA offers health-conscious products such as building materials with humidity control properties and wall coating materials that adsorb anddecompose toxic substances.

Melamine noncombustible decorative panels, noncombustible
decorative panels, multifunctional calcium silicate panel

To minimize damage from fire, the Building Standards Act requires the use of fireproof materials according to the type andsize of the building. AICA contributes to the creation of a safe and secure society by providing products that have beencertified for fire prevention, thereby enhancing the fire resistance of buildings.

Small

Small

Due to global mass production and consumption, environmental pollution caused by untreated waste is becoming
increasingly severe. There is a need to reduce waste through recycling of used products and other means to form a sustainable, circular economy. AICA promotes the effective use of product scraps and waste materials generated during the
manufacturing process, and offers refurbishment methods that reduce waste materials during construction and installation.

Base material

There is a strong need for deodorant performance in medical and welfare facilities and restrooms used by unspecified numbers ofpeople. Ensuring that users are comfortable and free of unpleasant odors improves quality of life and creates an environment that reflects care for their wellbeing. AICA offers a wide range of products with deodorizing performance to help create comfortable spaces.

Fire Prevention andResistanceHeat abstraction
by indoor air

Heat abstraction
by indoor air

Globalization, a growing elderly population, and an increase in the number of working women require the creationof spaces that are more user-friendly for a greater variety of people. AICA provides doors for medical and welfare facilities,
child-friendly countertops, toilet cubicle systems, and other products that help create comfortable spaces for everyone.

As people’s awareness of hygiene increases due to the spread of infectious diseases, there is a growing needfor antiviral and antibacterial performance in building materials and electronic products in places where people gather in
unspecified numbers, such as medical and welfare facilities, childcare and education facilities, commercial facilities, andtransportation facilities. AICA offers antiviral building materials and antiviral films for touch panels.

Deodorants

Small

External insulation
methodFoundations of AICA

Universal Design

Wall coverings, wall coating materials, floor coating materials, etc.

The construction industry is facing a serious shortage of labor due to the decline in the working-age population
caused by a declining birthrate and aging population, as well as intensifying competition for human resources among industries.
Making construction and installation work easier and less time-consuming will help reduce labor shortages. AICA helps improve
productivity at construction sites by providing labor-saving products and products that help shorten the construction period.

Virus and Bacteria Control

Heat storageby outdoor air

As infrastructure age at an alarming rate, proper maintenance is becoming increasingly important. In addition to reducing energy consumed during construction, extending the service life of buildings including residences, will also lead to more efficient use of resources
through long-term use. AICA contributes to the longevity of buildings by providing repair and reinforcement materials for concrete
structures and tile wall surfaces, as well as exterior insulation methods that enhance the durability of concrete frames.

Durable materials retain their aesthetic appeal and resist damage over the long term, extending the life of furniture, floors, walls,
and other items made of such materials, while contributing to waste reduction. Durable materials are also easy to care for, reducing maintenance frequency and workload. AICA offers HPL and other durable building materials.

Easier Construction

One of the measures to reduce GHG emissions is to seek reductions in energy use. Energy use can be
reduced by improving a building’s thermal insulation and heat shielding performance, and by improving heating and coolingefficiency. AICA provides building materials with thermal insulation and thermal barrier properties to help make buildings
more efficient in their use of energy.

Extending the Service Lifeof Buildings

HPL, melamine nonflammable decorative panels, floor
coating materials, etc.

Wall coating materials (for external insulation method, etc.)

AICA’s Vision

Biomass

Engineered stones, methacrylic solid surface, non-combustible
decorative panels (stone appearance)

Solvent-Free
Burner heating test
(Test specimen: Multifunctional calcium
silicate panel)

Water-based adhesives

While organic solvents are easy to work with, they can be hazardous to health if inhaled in large quantities. Improper
disposal may also have a negative impact on the environment. AICA offers adhesives that do not contain organic solvents,
thereby reducing the impact on the human body and the environment.

*1 SakaeChika Crystal Square shopping mall toilet, designed by CHUBU FUKKEN CONSULTANTS CO.,LTD (Naruse & Goto) + Hit Project Co.,Ltd (Yuzumi Yamaguchi)

19

AICA Report 2022

AICA Report 2022

20

AICA’s Vision

Basic Policy for the Medium-Term Business Plan

② Strengthening Our Profit Base

Effects Smart Sanitary Presentation and Ordering Process Upgrades

Progress with Operating Profit

Number of Manual Drawings Produced, and Sales

Three-Year Plan (at the time of formulation of the Medium-Term Business Plan)

Change in operating profit (Unit: Million yen)

(350)

Chemical
Laminates &Products Building Materials
Group
Group Companies
Companies

Change in
fixed costs(600)

Chemical Group Companies
1,900
Products
Group Companies

1,320

23,500670

210

Change in selling, general andadministrative expenses

17,991(2,800)Group companies
in Japan+880

AICA Kogyo+1,410Overseas Group
companies+3,220

FY2020ResultFY2023
Forecast(Unit: Million yen)
Profit fromincreased sales

Amount attributable to raw materials (2,046)
Import cost increase(319)
Price revision+1,000
Fixed costs

3,405
Profit margin

17,991(1,134)

Chemical
Products

Chemical Products

254

202

140

Selling expenses

Laminates &Building
Materials

569

20,34821,50023,500200

Manual design drafting

150

81% reduction+1,715

Group companies
in Japan

500

0

0

3Q

4Q

FY2018

AICA Report 2022

2Q

3Q

FY2019

4Q

1Q

2Q

3Q

4Q

FY2020

1Q

2Q

3Q

4Q

1Q

Proposal materials

FY2022

FY2021

Part No., price list

Preparation of
proposal materials

Ordering Operation(from quote draft to order)

Reduction of 75,000
hours per year

66% reduction

Investment Projects Planned for the Current Medium-Term Business Plan
Based on the Bond and Internal Reserves
Site

AICA Fujian Co., Ltd.
Aica Guangdong Co., Ltd.

Investment Objectives

Investment Total

Construction of a new plant in an area where phenol
formaldehyde resin for bamboo is in demand
BCP measures and doubling of production
capacity through relocation

Approx.
3 billion yen
Approx.
4 billion yen

Increase production capacity of existingproducts, and enter the novolak phenol
formaldehyde resin business

Aica Nanjing Co., Ltd.

Approx.
5.5 billion yen

Thai Chemical
Approx.
Become a wholly-owned subsidiary of AAPH
1.1 billion yen
Corporation, Ltd.
Wilsonart (Thailand), Wilsonart Become a wholly owned subsidiary of AICA
Approx.
Kogyo and/or AALH
9.3 billion yen(Shanghai), Wilsonart Asia
Sois Mendinni Industrial
Approx.
Become a wholly-owned subsidiary of AALH
600 million yen
Technology (Shanghai) Co., Ltd.
Several billionsof yenApprox.
Maintenance and renewal, DX investment, etc.
12 billion yen
Approx.
Develop new and peripheral markets
14 billion yen

HPL business

Increase production capacity in Asia

Existing sites
New M&A
Group total

Chemical Products Segment

Approx. 50-60 billion yen

Laminates & Building Materails Segment

Mature market

FY2021ResultFY2022
Forecast

FY2023
ForecastJapan ompetitive market
CTechnological prowess cultivated over our long history
since 1936
Pioneering the specialty & performance materials field
as a new business domain

Stable market

 igh market share
HGenerating cash flow to fund growth investments
Supplying high-value-added products based on Chemical
Products technology

Accumulated technology generates high added value

Steps Toward Efficiency

STEP

1

Efficiency of manual drafting improved, increasing per-person
drafting productivity by 1.7 times as we identified problem areas.

STEP

2

Change product planning, sales methods, and catalogs
based on the results of Step 1 analysis

STEP

3

Develop a new system (enabling customers to perform
planning, cost estimation, and CG production online)

4

Upgrade in-house building materials cost estimation anddrafting systems for a one-third reduction in the time required
to place and receive orders

STEP

21

1Q

As shown in the figure below, we have achieved dramatic growth in recent years by investing the cash andtechnological expertise generated by our stable profit
base in Japan into fast-growing overseas markets to create synergies. In further expanding our overseas business,
we will achieve sustainable profit growth over the medium
to long term by making the investments shown in the tableon the right.
In April 2022, we therefore implemented equity financing of 18 billion yen to issue the “Euro-Yen Convertible
Bond due 2027.” Anticipating conversions during a future
share price increase, we set the conversion price for thesebonds above the current market price, and partially repurchased our own shares to reduce dilution of the per-sharevalue and recapitalize the company while taking into consideration the interests of existing shareholders. We will
make effective use of the cash generated by these bonds
to achieve dramatic growth to increase corporate value.

Case Study of Productivity Improvement in Smart Sanitary Presentation and Ordering Operations
Sales of the Smart Sanitary washstand havebeen growing rapidly since customer social
media posts sparked its popularity. During thedesign specification phase, a production of a
proposal planning sheet is required, and during
the order placing phase, a draft drawing pricequote is required. As sales increased, the timeand effort to prepare these materials becamea major issue. We therefore took the four steps
listed on the right to improve productivity.

1,000

Overseas

Data Compilation

FY2020Result1,500

50Overseas Group
companies
+709

(67)

WEB
SystemResults

100(269)
AICA Kogyo

2,000Characteristics and Relationships of Each Business

Laminates &Building Materials

(810)

2,500

Foundations of AICA

Year 1 Result

Change in operating profit(Number of plans drawn: projects)

250

AICA’s Vision

5,160(Sales: Million yen)

Specification list

Convertible Bonds (CB) due 2027

Laminates & Building Materials

Profit from increased sales

Conceptual image

Sales

Number of plans drawn

About AICA

The upper graph shown below shows a breakdown of changes in operating profit when the Medium-Term Business Plan was formulated, illustrating how we plan to achieve operating profit of 23.5 billion yen in FY2023, compared to 17.991 billion yen produced in
FY2020. The bottom graph shows the results for the first year, FY2021. AICA Kogyo suffered a decline in profit margin due to soaring
raw material costs, but was able to achieve a profit above the target of three-year cumulative by implementing measures such asincreased sales gains, fixed cost reductions, and containment of selling expenses. Although Group companies appear to be lagging
behind in their progress against the three-year cumulative plan due to soaring raw material costs and other factors, they were generally
on track against the first year’s planned figures. We believe that we will be able to fulfill the Medium-Term Business Plan as return on
investment progresses.
To control selling expenses and reduce fixed costs, we promoted data visualization and utilization, system upgrades, and othermeasures to improve productivity. Below is an overview of upgrades to our system for drafting washbasin counter price quote drawings. (Examples of DX initiatives are also provided on page 26.)
Moving forward, we will continue to focus on digitization investment and equipment to improve productivity across various contexts
including operating profit, production, development, distribution, and facilities, and to strengthen our profit base.

Change inprofit margin

3D Simulation Site for Building Materials, Facilities and Housing

Cash

High-quality/brandstrength usiness conducive to local production for local
BIncreased demand for HPL and noncombustible
consumption
decorative laminates
Producing high-quality products that meet the needs ofIncreased demand for high value-added products andeach region and customer
quality brands
Providing environmentally friendly
Expanding profit-earning opportunities
products through the power ofthrough economic growth in Asia
chemistryHigh-growth market

Funds raised by CB
AICA Report 2022

22

AICA’s Vision

Basic Policy for the Medium-Term Business Plan

③ Reinforcement of Business Infrastructure
Strengthening the Foundation for Sustainable Growth by Integrating the Financial with the Non-Financial
Amid the growing spotlight on social sustainability and in light of the business environment in which greater emphasis is being
placed on corporate social responsibility, AICA has re-identified our materialities (material issues), incorporating them into theMedium-Term Business Plan, to integrate financial and non-financial factors and address business activities and sustainability asone. We aim to be a sustainable corporate entity that has high tolerance for change, with a business infrastructure that has been
reinforced by enhancing the driving force of our sustainability initiatives and steadily implementing these measures.

A company’s most valuable resource is its people. We establish the solid foundations of personnel management that will increase sustainability of the company. Also, we develop leaders, support career path, build up workplaces where diverse personnel can thrive, and aim forthe company to grow together with employees.
Focus Point

STEP 2

Organize issues

STEP 3

Prioritize materialities

STEP 4

Finalize materialities

STEP 5

Deliberate on report contents, measure indicators

STEP 6

ReportSTEP 7

Review report outcomes and consider responses

Importance to stakeholders(Stakeholder evaluations andtheir influence on decision making)

FY2023High

Related pages

Low

MediumHigh

Importance to the AICA Group(The organization’s impact on the economy, environment, and society)

Basic Policy ②

Target Figures

FY2023

 Net sales: 240 billion yen

Target Boundary

Related SDGs

FY2021 Result

 ROE: 9.4%
 Ordinary profit: 21.8 billion yen

AICA Group Net sales: 214.5 billion yen

 Dividend payout ratio: Approx. 50%

Distribute survey formats to eachcompany and request tabulationC reation and operation of skills lists bydivision and by employment gradeComplete skills lists for each AICA
Kogyo division and each employment
grade. Continue to develop
succession plans for important
positions in Group companies

AICA GroupDraft Groupwide common
questionnaires for the Employee
Satisfaction Survey

P.43-48

Basic Policy ③

Construction of information infrastructure

Automation, labor-saving

Target Year

Target Figures

Target Boundary

FY2023

Capital investment and digitization investmentthat will contribute to automation and laborsaving: 800 million yen (for 3 years in total) Dividend payout ratio: 53.8%

AICA Kogyo
Non-consolidated*This covers projects initiated in FY2021 or later.

Basic Policy ③

Reduction of GHG emissions
Reduction of industrial waste emission volumes
Adaptation to extreme weather events (development of BCP, investment in disasterreadiness equipment)
Target Figures

Target BoundaryGHG emissions revenue intensity
10% decrease from FY2020

Basic Policy ①

We have declared “create new value and contribute to society” in our corporate philosophy. We identified social issues through engagement with our various stakeholders and contribute to the realization of a sustainable society through providing value that will help solve
issues through our business activities.
Development and sales expansion of products that require less construction effort and labor Reduction of GHG through productsExtension of life of buildings and infrastructure
Target Figures

Target BoundaryS ales of AS products: 21 billion yen or more

AICA Kogyo
Non-consolidated

Related SDGs

FY2023

FY2021 Result

Industrial waste emissions revenue intensity
10% decrease from FY2020

16.9 billion yen(FY2020 actual result: 15.6 tonne/100 million yen)

FY2023

Related pages

23

P.18-20

AICA Report 2022

AICA Group erform scenario analysis aimed at net zeroP
GHG emissions (Scope 1 and Scope 2 onabsolute volume basis) by 2050. Establish
calculation methods for Scope 3 emissions
and develop emissions reduction measures ater use revenue intensity in high-riskWareas: 6% decrease from FY2020

Define SDG-oriented products
for AICA Kogyo(FY2020 actual result: 7.18 m3/million yen)
Related pages

Related SDGs

FY2021 Result

12% decrease from FY2020(72.6 t-CO2/100 million yen)

(FY2020 actual result: 82.2 t-CO2/100 million yen)D
 efine SDG-oriented products and set
sales targets

FY2021 Result

Capital investment* 7 million yen
Digitization Investment*
78 million yen

Data Compilation

2 Helping Solve Social Issues with Products(FY2020 actual result: 15.5 billion yen)

Data accumulation and use

We will accurately assess the risks and opportunities of climate change and develop a long-term strategy to achieve carbon neutrality by
2050. We will consider drastic measures to reduce GHG emissions and strengthen BCP measures to prepare for increasingly severe andfrequent extreme weather events.

P.17-22

Target Year

Related SDGs

P.26

Target Year

Focus Point

Work style reform

5 Responding to Climate Change

Focus Point
Related pages

 scertain and improve time and spending forA
education and training at all Group companies

 Return to employees and shareholders

 ROE: Around 10%
 Ordinary profit: 24 billion yen

FY2021 Result

Foundations of AICA

Target Year Expansion of growth business

Related SDGs

We leverage digital technologies to further improve productivity and strive for the transformation of our business activities. We also work
to automate our production sites and improve operational efficiency through data accumulation to boost corporate competitiveness, anticipating that the working population will decline in the near future.

Related pages

 Profit generation

Target Boundary

4 DX Implementation

Focus Point

Basic Policy ①

We work to expand sales revenue and generate profit through providing high-value-added products and productivity improvements. We
also properly distribute the profits thus generated to shareholders and employees, and aim for sustainable development by investing in
growth businesses.
Focus Point

Target Figures

Conduct and make use of employee
satisfaction surveys at all Group
companies

Medium1 Provide Economic Value

Career-path design
Formulation of succession plan
Promotion of use of diverse human resources (nationality, sex, age, disability, etc.)

AICA’s Vision

Extract issues

Management personnel development
Improvement of employee satisfaction

Target Year

Scope of Selection of Materialities

STEP 1

Basic Policy ③

About AICA

Process for Selection of Materialities

3 Human Resources and Organizational Development

AICA Group limate change scenario analysis
C
based on TCFD recommendations beginning in March 2022.
Obtain third-party assurance forsome categories of Scope 3 emissions and establish calculation standards for Japanese group companies
7% decrease from FY2020(14.5 tonne/100 million yen)

17% decrease from FY2020(5.94 m3/million yen)

P.49-56

AICA Report 2022

24

AICA’s Vision

Basic Policy for the Medium-Term Business Plan③

Reinforcement of Business Infrastructure

6 Strengthen Governance

Basic Policy ③

For the further strengthening of group governance, we enhance rules concerning the management and supervision of affiliatedcompanies and transfer of power to raise their effectiveness. We strive to deepen risk management by accurately ascertaining,
evaluating and addressing risk, while devoting efforts to information security measures.
Focus Point

Strengthening of Group company management

Target Year

Reconstruction of risk management systems
Target Boundary trengthening of BCP (extreme weather
S
events, natural disasters)
Conduct BCP drills at least once a year
at all consolidated production bases, andformulate BCPs for new consolidated
production bases

AICA Group

Related SDGs

IT revamp, strengthening of security
FY2021 Result

Digital Marketing and Use of Data in Sales Activities

AICA Kogyo
Non-Consolidated

 igitization investment to help strengthenDsecurity: 300 million yen or more in total
over 3 years

400 million yen

P.37-42

Utilization of AI-OCR*1 and RPA*2 in Order Placement and Receiving Operations

7 Quality Assurance and Occupational Safety

Basic Policy ③

Securing of product safety and quality

Every fiscal
year

Elimination of industrial accidents

Target Figures

Target Boundary uality improvements based on customer
Qsatisfaction surveys
AICA Group

Related SDGs

FY2021 Result e received responses from overW
500 companies and incorporated
measures to address each issue
into the next year’s businessdivision policies.
14(FY2020 actual result: 19)

FY2023
Related pages

25

 stablishment and operation of departmenE
tal training programs
P. 46-47, 57

AICA Report 2022

AICA Kogyo
Non-Consolidated

 uality training conducted on
Qschedule*1 AI OCR: Artificial intelligence (AI) optical character reader (OCR), a text recognition technology that identifies the text portions of image data andconverts them into character data by applying. AI learning functions to character recognition technology.
*2 RPA: robotic process automation. Robotic automation of tasks previously assumed to require handling by humans.

Use of Data at Production Sites to Reduce Nonconforming Products
In anticipation of the coming decline in the working population, we are promoting the use of digital technology to improve productivity at production sites. HPL, one of our core products, is made by laminating paper impregnated with resin and forming it into
individual sheets by applying heat and pressure. During the production process, a certain amount of non-conforming products areproduced due to contamination by foreign matter. We have worked to reduce this by adjusting air conditioning equipment, controlling
humidity, and continuing thorough cleaning activities. In order to achieve further reductions, we have measured the amount of suspended matter in the air and tested data on its causes. Based on the results, we installed localized air purification equipment in areas
where suspended solids were abundant, which dramatically reduced suspended solids and halved the amount of defective products
due to foreign material contamination. The data made it possible to corroborate cause-and-effect relationships, clarify measures tobe taken, and make more efficient improvements. Learning from this case, we plan to further promote data collection, visualization,
accumulation, and analysis at production sites so that we can take more effective measures to improve productivity.

AICA Report 2022

26

Data Compilation

 ost-time accidents: fewer than previous
L
year

Strengthening of frontline personnel

In the area of order placement and receiving, we have been asking customers to introduce direct ordering systems so that we canmove away from handwritten purchase orders. However, each customer has each situation, and many orders were still being handwritten, which required time and effort to transcribe into data. For customers who place many daily orders and can use our standard
format, we therefore introduced a function to convert handwritten text into data using AI-OCR and automated transcription into asystem using RPA. Doing so has reduced work hours and errors. Moving forward, we will continue to promote the use of our standard
formats and further automation. In addition, nearly 40 robots are in operation throughout the company, and we plan to expand thescope of their application.

Foundations of AICATo ensure “product safety and quality” and “employee safety,” which are the missions of a manufacturing company, we
strengthen on-site educations and checking systems, and foster a corporate culture that does not neglect the basic requirementof complying with market demand, laws and regulations, and procedures.

Target YearAs new lifestyles become more prevalent and our customers diversify their work styles, we are focusing on digital marketing toachieve more effective and efficient sales activities. Our website was completely revamped in February 2022. We have enhanced video
contents, and also significantly increased the number of times we disseminate information through video livestreaming sites and othersocial media.
In order to conduct sales activities more efficiently and at the right time for those who express interest in our company by requestingcatalogs and samples, we have automated a list and database of information entered at the time of request. The construction market,
our core market, has lengthy sales channels, along which many people become involved in the decision-making processes for the
products they use. Because of the need to conduct sales activities in a broad-ranging yet efficient manner, we have also improved thesearchability of information and facilitated the categorization of information by region to improve efficiency.
As we continue to accumulate, analyze, and utilize data, we plan to pay careful attention to our handling of personal information
while improving productivity and making upgrades that will lead to timely proposals for our customers.

AICA’s Vision

 tricter methods for checking theS
thoroughness of Code of Conduct
adherence, restructuring of theinternal whistleblowing systemand enhancement of the internal
audit system, checking the status
of internal rules and regulations,and support for the development of
insufficient rules

Enhancement of group governance rules

Focus Point

We are promoting the use of digital technology in pursuit of DX promotion, one of our stated materialities.
Here we describe some of the measures implemented in FY2021 with respect to sales activities, ordering andreceiving operations, and production sites.

 onduct BCP drills at allCconsolidated production sites

FY2023

Related pages

FY2021 Initiatives to Utilize Digital
Technology to Promote DX

About AICA

Target Figures

SpecialFeatureAICA’s Vision

Business
Overview
Business Performance

Chemical Products Segment

Net sales (billion yen)

Continued global growth through productsthat help solve social issues based on our
integrated corporate Group strength

109

Operating profit*1 (billion yen)
122.3

7.4

103.9

7.3

Adhesives

10.5% 64.2%

Specialty &Performance
Materials
17.7%

FY2021

7.5%
2017

2018

2019

2020

FY2022 Target

2021

(FY)

Net sales

Nobuyuki Omura
FY2021 Results

2017

135

2018

2019

2020

2021

Construction
Resins(FY)

Operating profit
billion yen

8

52.6%

In the AAPH*2
Group

About AICA

Director and Managing Executive Officer
Head of the Chemical Products Company

billion yen*1*1 Operating profit before deduction of unallocated operating expenses*2 AICA Asia Pacific Holding

Construction Resins

Responses

Focus on Developing and Expanding Sales of High-Value-Added Products that Help Solve Social Issues
As one of the pillars of our management strategy, we focus on developing and expanding sales of AS products that help solve
social issues. In order to promptly grasp the changes of the times, we uncover needs through communication with our customers andreflect them in our product development.
Ceramic Siding Repair Method Diagram

Improved Efficiency through New Organizational Structure

Price Revisions to Reflect Higher Raw Material Prices

Previously, we had conducted our business activities in thechemical products segment through two separate business
units, which were merged in April 2022 for reorganization into a
more efficient structure. In particular, we have re-combined our
in-house elemental technologies and human assets in Japanfor mutual cross-utilization of commercial distribution and user
information to develop new customers.

In FY2021, the cost of raw materials soared at an unprecedented pace, and was not fully reflected in sales prices. In
FY2022, we will consider further cost reductions and implement
timely and appropriate price revisions.

A Ceramic Siding Repair Method using JOLYPATEThis is a refurbishment method for ceramic siding on exterior walls that require periodic recoating.
Unlike simple repainting, JOLYPATE features appealing patterns and a consistent, seamless finish
that can significantly change the appearance of the exterior. In addition, our proprietary resin design
technology has realized a coating film with both moisture permeability and water barrier properties,
which reduces the burden on the building frame and improves durability.

Existing siding board

Base treatment
Moisture-permeable elastic
preparation substrate

Joint treatment
Moisture-permeable elastic
preparation substrate

Finish+ Specialized aggregate+ Reinforced nonwoven fabric+ Specialized fibers

JOLYPATEα + Hollow filler +Specialized fibers

Surface treatment

Topcoat

JOLYPATEα + Hollow filler

The DYNAMICRESIN Clear Tough Resin Quick Series, for Concrete Chip Fall Prevention
Repair and reinforcement materials for concrete structures such as tunnels and bridges that are
identified as aging infrastructure. In addition to its basic function of preventing concrete from fallingby reinforcing the concrete with a tough resin, this series also features high transparency, allowing
the change in the substrate to be checked over time and enabling brief installation times. In recognition of the novelty of these features, the product was registered with the Ministry of Land, Infrastructure, Transport and Tourism’s New Technology Information System (NETIS) in February 2022.

JOLYPATE Fresh Cool

Example of Clear Tough Resin Quick 1500 Application

Data Compilation

Specialty & Performance Materials
Adhesives

Further Business Expansion in the AAPH* GroupIn FY2021, the AAPH Group achieved a major 153% increasein sales over the previous year, contributing significantly to AICA
Group’s sales growth. In addition to the three major projects
currently under way in China, we plan to install production
facilities for phenol formaldehyde resins for fiberboard at AICA
Dong Nai Co., Ltd. in Vietnam to capture robust demandfor phenol formaldehyde resins. Furthermore, AICA HATYAICO., LTD. in Thailand is planning to establish a research anddevelopment base that will enable the company to respond to
customer needs in a timely manner.
* AAPH: AICA Asia Pacific Holding

AICA Dong Nai Co., Ltd.
New installation of phenol
formaldehyde resin
production facilities forfiberboard
Sites Slated for Upgrades
Existing Sites

27

AICA Report 2022

Development of 3D Decorative Hard Coat Film for Automobile Exteriors Expected to Contribute to
Decarbonization of the Automotive Industry

AAPH Group Production Sites in Asia
Three Major Projects in China
Production expansion at Aica
Nanjing Co., Ltd., Relocationand production expansion at
Aica Guangdong Co., Ltd.,New establishment of AICA
Fujian Co., Ltd. as a manufacturing base for phenol formaldehyde resin for bamboo

AICA HATYAI CO., LTD.
R&D center established to speed
up products development

Amid the rapidly increasing demand to address climate change issues, reducing
GHG emissions has become a major challenge for the automotive industry, which uses
specialty and performance material products. In particular, it is said that 30% of the
GHGs emitted in the manufacturing process originate from the painting process, which
involves repetitive painting and drying. Decorative films are therefore attracting attention as an alternative to painting. In September 2021, we became the first in the industry to develop a paint-substitute 3D decorative hard coat film for automotive exteriors.
The use of this product eliminates the need for evaporation, which can be expected toreduce GHG emissions by curbing energy use. It also eliminates the emission of volatileorganic compounds, which is an issue in spray painting, thereby reducing impact onworkers and the global environment.

Decorative molding on (actual) automotive hood

AICA Report 2022

Foundations of AICA

 uilding a highly profitable structure in Japanese business
BMarket launch, penetration and sales expansion of high-value-added
products such as AS products and high-performance functional productsInvestment of management resources in the development of major new
products and entry into new fields, new markets and growth markets
Expansion of group synergies by strengthening collaboration
among our sites
Strengthening of production and sales structure for adhesives andresins in Asia

AICA’s Vision

Both sales and profits increased due to a steady recovery from the effects of the COVID-19 pandemic. Sales reached a record highdue to growth in Japan adhesives driven by phenol formaldehyde resins for industrial use, significant growth in the AICA Asia Pacific
Holdings Group, and the new consolidation of Aica Adtek Sdn. Bhd. Although profits did not reach the level of two years ago due tosoaring raw material costs, increased sales led to a significant increase in profits.

 hanges in the business environment, such as risingC
raw material costs and supply concerns
Changing market needs and rise in societal demand
to address climate change issues
Cultivation of the next generation of large-scale coreproducts
Expansion of share in the growing Asian regional market
Shortage of future production capacity due to growth inoverseas markets

7.1

122.3 billion yen

We will help resolve social issues by creating synergistic effects with ourGroup companies in Japan and overseas, and by developing productswith special characteristics on a sustainable basis. We will continue
to expand our product range, application markets, and sales areas toachieve further growth.

Challenges

Other

8.1

6.5

90.4

82.9

Sales by Product Range

28

AICA’s Vision

Business Overview

Laminates & Building Materials Segment
We aim for sustained growth in the Japanesemarket and increased presence in the Asianmarket by strengthening Group cooperation

Changes in Business Performance
Net sales (billion yen)
80.8

82.3

87.5

16.1

16.3

15.8

High-pressure
laminate (HPL)

5.2%

Postform
counter

19.8%

31.4%
FY2021

92.1 billion yen
12.4%

2018

2019

2020

FY2022 Target

2021

(FY)

Net sales

2017

97

2018

2019

2020

2021

CERARL(FY)

Operating profit
billion yen

Boards, Films, etc.

22.7%

17.1

About AICA2017

FY2021 Resultsbillion yen*

*Operating profit before deduction of unallocated operating expenses

Overseas Markets

Responses

Japanese Market

Housing Demand Recovered as Antiviral Building Materials
Remained Strong

Additional Acquisition of Shares in Wilsonart Companies, Efficiency
Improvement through Integration of Offices

Aica Laminates
VietnamAdditional shares of each Wilsonart company will be acquired from the joint
venture partners to speed up the Group’s management. In addition to promoting
business associated with local production for local consumption by transferring
Japan technology to Group companies overseas, we will work to strengthen our
production system, utilize the sales channels of the Wilsonart companies, andfurther cultivate the market for Noncombustible decorative panels.
In China, Wilsonart (Shanghai) and Sois Mendinni Industrial Technology(Shanghai) have integrated their operations, and in Thailand, Wilsonart (Thailand)
and the offices of its controlling company, AICA Asia Laminates Holding(AALH), have been merged. We will continue to make efforts to further improve
management efficiency.

Merged with Sois Mendinni Industrial
Technology (Shanghai) Co., Ltd. a
decorative laminate sales company

AICA Taiwan
Became wholly-owned
subsidiary in July 2022

Plan for approximately
1.2 billion yen production
facilities expansion
investment

Production bases
Sales/administrative offices

Decision to Invest in Facilities to Meet Strong Demand Growth in Asia
Example of installation: Roadside Station Ogata(KATA Farmers Market)

Sales Expansion of MELAMINE TILE
Sales of MELAMINE TILE were launched in 2019 to open up a new productsegment in the flooring market. Although sales did not expand in FY2020 due
to the COVID-19 pandemic, sales have been growing since the second half of
FY2021. Sales expansion measures such as the addition of new pattern options
have combined with recovery in the non-residential market to bring about anincrease the use of this flooring in large commercial facilities, offices, restaurants,
and the restrooms of these facilities.

AALH
Office integration with
Wilsonart (Thailand)Company Limited

Wilsonart (Shanghai)

Data Compilation

With housing starts recovering in Japan and the non-housing market also
showing signs of recovery from the second half of the year, the antiviral building
material Virutect performed well in response to the new lifestyles of the COVID-19
pandemic. In FY2021, the series as a whole increased by 21% over the previous
year as a result of further item expansion, including the launch of Virutect Pluswith added deodorant performance, and responsiveness to customer needs.

Laminates & Building Materials: Overseas Sites

In FY2021, sales growth was driven by the Wilsonart companies and Aica
Laminates India. By market, we were able to increase sales in key markets suchas China and India, as well as Thailand, Indonesia, and Vietnam. As a result, thecompany’s overseas presence has steadily increased, growing to 1.2 times theprevious year’s level and more than double the level of the year before that.
Regarding overseas net sales in the Laminates & Building Materials segment,
the company plans to reach 19 billion yen this fiscal year, 22 billion yen thefollowing fiscal year, the final year of our Medium-Term Business Plan, and 30
billion yen in 2026, the final year of the 10 years Vision.

Foundations of AICA

 xpansion of AS products in the Japanese business andE
introduction of products to capture the floor and ceiling market
Expansion of product sales and optimization of procurement
and production by leveraging the commercial distribution
channels of Group companies
Development of SDG-Oriented products to reduce CO2,
waste, etc.
Strengthen BCP, improve productivity, and strengthen governanceReorganization of Group companies in the China area toimprove efficiency and strengthen local production systems

Sales Growth in Asian Countries, Aiming for Further GrowthWith a sales network established in the Asian region, where market
growth is ongoing and demand is expected to increase, including in Japan,
we have decided to make a capital investment at AICA Laminates Vietnam(ALV). The company will invest approximately 1.2 billion yen to expand its
HPL manufacturing facilities, doubling its production capacity in the future. Byleveraging the sales network, production bases, technology, and brand power
we have acquired so far, we will capture demand not only in Vietnam but alsoin Asia, and establish ourselves as a leading company in the HPL market in
the Asian region.

AICA’s Vision

CERARL and postform countertops performed well amid recovery from the effects of the COVID-19 pandemic and growth in Japanese housing demand. In addition, the recovery of the Japanese non-housing market in the second half of the year and significant
growth in Asian countries led to a significant increase in sales of our mainstay product, HPL. Furthermore, as a result of cost reduction
activities and sales price revisions in response to soaring raw material costs, both sales and profits in the Laminates & Building Materials segment increased, which have reached record highs.

AICA Report 2022

15.6

13.7

Satoshi Toudou

29

Fittings & homeinterior materials

92.1

Noncombustible
decorative panels

Director, Senior Managing Executive Officer
Head of the Laminates & Building Materials Company

 high dependence on profit from Japanese market, and of HPL
A
and CERARL
Changes in the business environment, such as rising raw
material costs and supply concerns
Changing market needs and rise in societal demand to address
climate change issues
Declining working-age population, insufficient future production
capacityPMI and building of governance for newly established or
acquired Group companies overseas

84.1

Sales by Product Range

8.6%

To achieve sustainable growth in the Japanese market, we focus ondeveloping and expanding sales of AS products that help solve social
issues such as climate change, developing new applications for floors
and ceilings, and capturing renovation demand, which is expected toincrease in the future. We also aim to further enhance our presence in
East Asia, ASEAN, the Middle East, and South Asia by strengthening
cooperation among Group companies.

IssuesOperating profit* (billion yen)

Panoramic view of ALV’s plant

Expansion of manufacturing
facilities to existing building

Inventory area relocation
to new building
Example of installation: Honda Cars SAGA Nambu Bypass Showroom

AICA Report 2022

30

Foundations of AICA

Supplementary materials on sustainability at AICA are available on our website.
HOME

Policy and Framework for Sustainability
Basic Approach to Sustainability

Sustainability Policy

2 We have established “Compliance with laws and regulations,” “Respect for human rights,” “Harmony with society,” “Fairbusiness practice,” “Customer’s security and trust,” “Proper information disclosure,” “Protection of company information andproperty,” and “Environment and safety” as the basic principles of the Code of Conduct, and we base our actions on theseprinciples as shared values for all employees.

3 We emphasize dialog with stakeholders, including customers, employees, shareholders, suppliers, business partners, local

communities, and local governments, and respond promptly to social needs and changes.

4 We identify material issues from the perspectives of both corporate management and stakeholders, address those issues

alongside our business activities, and disclose our progress in addressing them.

A Sustainability Development Committee has been established as the central body for the development of more in-depth sustainability, and the entire Group is working toward the achievement of our materiality goals that integrate our business activities.
In April 2021, we changed the name of the committee from the CSR Promotion Committee to the Sustainability Development
Committee, with the President appointed as chair. We will assess the role that the company should play from a broader perspective, and the Group will work together to strengthen the corporate structure for sustainable development.

Supervision

Sustainability Development Committee

Various Committees
and Projects

Chair: Kenji Ebihara, Representative Director and President• Corporate Ethics Committee• Internal Control Committee• Information Management

Secretariat: Sustainability Development Division*Person in charge of sustainability at AICA Asia Pacific Holding Pte. Ltd.

Sustainability Officers at Group companies in Japan and overseas

AICA has built our QEO management system, which operates with a trinityof quality (Q: ISO 9001), environment (E: ISO 14001), and occupational healthand safety (O: ISO 45001) management systems. Under this management
system, the production, R&D, sales, and administrative divisions work as aunited team. This structure is the main axis of the Company’s activities tostrengthen its business infrastructure and is one of the measures included in
AICA’s 10 years Vision. Through the implementation of this management system, as well as complying with laws and regulations, we conduct risk hedging
and kaizen activities, promote the enhancement of quality, improvement ofenvironmental indicators (reduction of greenhouse gas emissions and industrial waste, reinforcement of water management, etc.), and the creation ofsafe and comfortable workplaces, and strive to strengthen our business infrastructure from the perspectives of both risk and opportunity.
A QEO Committee, managed by the Sustainable Development Department and Quality Assurance Department, has been established as the central body for the promotion of the QEO management system. The committee
conducts activities to achieve the policies and goals that have been formulated on the basis of the management system. A QEO Group Representatives
Meeting is convened once every six months, attended by AICA’s top management and representatives of Group companies in Japan and overseas.
While confirming QEO achievements and the status of improvements at individual Group companies, the meeting’s attendees also exchange informationby sharing case studies, and discuss and decide on countermeasures.

Relationship between QEO Management System andSustainability Activities
Board ofDirectors

Supervision
ReportSustainability
Development
Committee
Management from
Executive Perspective
E: Environment, S: Society,
G: GovernanceBusiness
Infrastructure
Enhancement

Participation

Management from
On-site Perspective
Q: Quality, E: Environment,
O: Occupational Health and Safety

QEO Group
Representatives
Meeting

Supervision

QEO Committee

Operation

Toward the Strengthening of Initiatives toward Climate Change Issues
We consider “Responding to climate change,” which was included in the revised materialities with the formulation of the current Medium-Term Business Plan, to be an important issue that should be addressed with urgency. We will strengthen our activities, with the
Climate Change Response Committee, which was incorporated into the Sustainability Development Committee in April 2021,
playing the central role. We will also strive to identify the latest trends and be involved in government and social recommendations
Please refer to pages 49-56 for details of specific initiatives. )through participation in international frameworks and initiatives. (Endorsement of TCFD Recommendations

Participation in Climate Change Initiatives

In May 2020, we declared our endorsement of the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD). Going forward,
we will further reflect initiatives to address climate change issues in our business strategies and pursue information disclosure based on the TCFD recommendations.

From January 2019, we have joined the Japan Climate Initiative. We will engage proactively in efforts to realize a low-carbon society.

(As of October 2022)

31

AICA Report 2022

AICA Report 2022

32

Data Compilation

Production Administration
Division

Site Engineering Division

Development Division

AAPH*

Systems Division

Public Relations and IR Division

Overseas Planning Division

Sales Division

Purchasing Division

Quality Assurance Division

Sustainability Development
Division

General Affairs Division

Human Resources DivisionCorporate Planning Division

Climate Change Response Committee

Committee• Information Disclosure
Committee
Business Continuity Plan
Coordination •(BCP) Committee• Overseas Group
Governance Committee• C&C Promotion Committee• QEO Committee• Security and Trade Control
Committee• Work Style Reform
Promotion Project• Diversity
Promotion Projectetc.

QEO Management System

Foundations of AICA

Board of Directors*Plese refer to page 6 for the meaning of kyosei

AICA’s Vision

Sustainability Development Framework“Kyosei *” is a word that we place at the core of our management philosophy, and wework hard to embody this philosophy by helping to solve various social issues. Recognizing that this ideology has much in common with the voluntary action principles of “humanrights,” “labor,” “environment,” and “anticorruption” of the United Nations Global Compact(UNGC), we announced our support of the UNGC in 2018. With this announcement, we
committed to proactively addressing the Sustainable Development Goals (SDGs) adopted
by the UN and embarked on activities aimed at achieving those goals.
In 2018, we began organizing the relevance between our individual materialities andthe SDGs. Both within the company and to the outside world, we clarified the importantbusiness activities that the AICA Group should undertake for the solution of global social issues. For the first time, the materialities (material issues) were included in the Medium-TermBusiness Plan that began in April of 2021. By setting and steadily pursuing KPIs for each ofthem, we will contribute to the realization of a better, sustainable society.

About AICA

1 We address social issues through our business activities to contribute to the creation of a better society.

Heads of departments and divisions

Sustainability Policy and Framework

Toward Integration of Business Activities and Sustainability

We recognize as our mission the fulfillment of the social responsibility demanded of corporations and the promotion of activities that will increase the sustainability, not just of our company, but of the entire global environment. In April 2021, we established a new Sustainability Policy. We will foster common Group values by clearly indicating our basic principles and policies forsustainability-oriented management and placing it on the same level as our Corporate Policy.

ReportSustainability

https://www.aica.co.jp/company/sustainability/basic-thinking/Foundations of AICA

Business InfrastructureInterview: Appointment of the New President
Background and Future Prospect

Yuji Ono

Kenji Ogura

Representative Director and Chairman /Chairman of Board of Directors

External Director / Chairman ofGovernance Committee

by technology. Therefore, I thought Mr. Ebihara was the right person for the job. Another key point was whether he/she would be
able to continue President for a long time, since I believe that amanufacturing company, especially the one based on technology
like ours, requires a certain number of years to produce results. In
that sense, I thought a young person would be best.

What to Expect from the New President,
Mr. Ebihara

In April 2022, the presidency of AICA was handed over to Kenji Ebihara from Yuji Ono and the new regime has
been started. The Board of Directors Chairman and the Governance Committee Chairman has revealed thediscussion during the appointment process and their expectations toward New President.

Reasons for the Appointment of the New
President, Mr. Ebihara, and the Required
Attribute of a President
Since AICA is a company supported by technology,
I thought that the next President should have a wealth of technical knowledge. Having worked for a manufacturer myself, I
understand firsthand the importance of manufacturing backed
by technology. When determining the direction of the company, I
believe it is very important to be able to have confidence backed
Ogura

I had considered replacing the president at the 10-year
mark of my tenure, but we were just then entering the COVID-19
pandemic and our performance was beginning to be affected.
We also had not yet completed the major task of updating ourcore systems, so we think it is not appropriate to carry out such a

Ono

33

AICA Report 2022

I hope that Mr. Ebihara will achieve the establishmentof a third pillar of AICA. Considering his career to date, I havehigh expectations for him to be able to achieve. On the other
hand, I myself regret that I was not able to fully turn around theJapanese business of the chemical products segment, and as
Mr. Ogura pointed out, I believe it is a major responsibility of the
new president. Since the President’s authority is greater than thedecision-making power of other executive officers, I hope that
he will make drastic decisions, including those that could not be

Ono

AICA Report 2022

34

Data Compilation

Mr Ono, when your tenure had reached 10th year in
2019, the next presidency survey was attempted. Though it had
been under the sole discretion of the incumbent president in thepast, you proposed to carry out this survey to all the directors.
On that initial survey, most of the directors had posted the opinions that no candidate might fit the position of the presidency
and as a unanimous view, the Committee requested Mr. Ono tocontinue the position. Simultaneously Mr. Ebihara was selected
as a member of the board as one of the candidate.
Mr. Ebihara increased his exposure amongst board members
and developed his experience. Concurrently, the board members started to notice his intelligence. Finally Mr. Ebihara wasnominated to be a President this year.

Ogura

replacement amid the risks involved, and the Governance Committee decided to extend the President’s tenure upon deliberation. The core systems update completed without any problems
in last May, and with the recovery from the COVID-19 pandemic
in sight by fall, we decided that the time was ripe. Most companies generally change presidents at their general shareholders’meetings, but we decided to do it on April 1, because we believethat the new fiscal year should begin with a new organizationalframework.

Although I am less involved in business execution, I believe that my role as Board of Directors Chairman is to correct a
situation when it seems to be going in the wrong direction, andto give a strong push when it is moving in the right direction.
Also, I have long believed that a manager’s job is to put firstpriority to consider employees’ happiness and company’s value enhancement, so that every member can feel good to havejoined. It is also important to increase the stock price as one of
the indicators of AICA’s value, to ensure the high market capitalization. This will gain the trust of our business partners andattract good employees.
Mr. Ogura has given us a lot of meaningful input, and I would
like to ask for his continued support as a specialist with presidential experience.
As for the direction AICA should take, we need to first complete the Medium-Term Business Plan goals and then consider how to achieve our 10 years Vision beyond it. The ongoing
depreciation of the yen is a good example, but the world are
moving fast, and the senior corporate administrators including
managers must raise their awareness in order to keep up withthis trend. It is important to have good sensitivity to informationand prepare in advance what actions are necessary to addressconcerns for the future. This will ensure for us to be able to properly addressed toward problems when they actually arise.

Ono

Foundations of AICA

Events Leading up to the Change of President

There is no particular change in my position, but with
Mr. Katagiri’s retirement, I am now the only External Directors
who has been involved in the manufacturing industry. I would liketo continue in a supportive position toward manufacturing companies. One of the positive aspects of AICA’s corporate culture is
its willingness to respect and consider opinions, rather than oppose, even if they are from its External Directors. My impressionis that they first take opinions seriously, compare them with theirown ideas, and then come up with even better answers. As an
External Director, I feel very comfortable expressing my opinions.

Ogura

AICA’s Vision

When I look at our existing businesses, I get thesense that the adhesives and construction resins businesses are
becoming weaker in the Japanese chemical products segment.
We have a lot of products that are highly rated, so I hope that
he will do all he can without giving up, to expand and increase
the sales of these products with considering how to add morevalue to them. Taking the No.1 position will of course make theproduct stronger, but even if we don’t, we can still improve profitability through innovation. We can, for instance, improve theprofitability by focusing on highly profitable products, replacing
unprofitable ones with profitable ones. Since many of our products are for mature markets, it is very difficult to innovate, but
if we give up, we will have no choice but to withdraw from themarket. Because the President has a wealth of technical knowledge, I look forward to his reforms for the revitalization of thesesegments. In our efforts to innovate and establish a third pillar ofinnovative technology, I don’t think we can accomplish anythingby merely going along with our current plant and equipment. We
are going to have to carry out reforms that will be accompanied
by some pain. I believe that trying something new will have apositive impact on the existing business as a side effect, andstrengthen its foundation. Mr. Ono declared “exploring fields next
to building materials” and focused on non-construction fields asa market other than the building materials business when he
was a president. In that process, I feel that we have been able toacquire new technologies, which has helped to strengthen our
products in the construction field.

Ogura

What Do You See as Your Role in the New
Organizational Framework

About AICA

The first attribute required of an AICA President is integrity. Besides, as Mr. Ogura mentioned, it is essential for a manufacturer to be well versed in how things are manufactured. In
addition, since overseas sales ratio for nearly 50% of our total
sales, the vitality to be able to launch overseas market more andmore is required. The president can’t just sit around at corporate
headquarters, handing out instructions. I often tell Mr. Ebihara to
go and feel the atmosphere at the actual sites.

Ono

implemented in his previous position, and quickly put the company on a course of restructuring. It might be needed to selectpeople who can implement new ways of thinking, and get theminitiate major improvement to existing ideas and operations. The
overseas operations of the chemical products segment are on
track, and although the Laminates & Building Materials segment
faces some challenges, we can see what needs to be done.
Overall, this is a good time to have certain foundation in place,with plenty thinks to be worked on.

Foundations of AICA

Business Infrastructure

List of Directors (As of June 24, 2022)
Directors (excluding directors who are members of the Audit and Supervisory Committee) (5 males, 1 female)
Kenji Ebihara

Ryoji Mori

Shoji Miyamoto

Representative Director and Chairman

Representative Director and President

Born August 24, 1956

Born April 15, 1967

Director (full-time member of Audit andSupervisory Committee)

External Director (Member of Audit andSupervisory Committee)

Born September 29, 1959

Born February 08, 1956

Apr. 1979 Joined AICA Kogyo
Apr. 2000	General Manager, No. 1 Chemical
Development Dept.
Oct. 2002	General Manager, Sales Dept.,
Chemical Products Company
Jun. 2004 Executive Officer
Oct. 2004 Director, No. 2 R&D Center
Apr. 2008	Head of the Chemical ProductsCompany
Jun. 2008 Director
Jun. 2009 Managing Director
Jun. 2010	Representative Director (present)
Director and President
Jun. 2018 President and Executive Officer
Apr. 2022	Board of Directors Chairman(present)

Apr. 1991 Joined AICA Kogyo
Apr. 2009	General Manager, Chemical
Development Dept., R&D Center
Oct. 2010	Manager, Jimokuji Laboratory, R&D
CenterApr. 2013 General Manager, R&D Center
Apr. 2015	Head of Specialty & Performance
Materials Company
Jun. 2017 Executive Officer
Jun. 2018 Senior Executive Officer
Apr. 2019 Managing Executive Officer
Jun. 2019 Director
Apr. 2020	Head of the Chemical ProductsCompanyDeputy General Manager, Sales
Administration Division
Apr. 2022 Representative Director (present)
President and Executive Officer(present)

Apr. 1982 Joined AICA Kogyo
May 2000	General Manager, Laminates
Production Dept.
Apr. 2006	General Manager, Production
Administration Dept., Construction
Materials Company
Oct. 2009	General Manager, Production
Administration Dept., Chemical
Products Company
Jun. 2011 Executive Officer
Jun. 2013 Senior Executive Officer
Jun. 2015 Director
Jun. 2018 Managing Executive Officer
Apr. 2019	Responsible for Purchasing Dept.,
Safety and Environment Dept.
Apr. 2020 Deputy Head of Construction Materials
Company, Responsible for Technology,
Construction Materials Company, General
Manager, Production Administration
Dept., Construction Materials Company
Apr. 2021	Assistant to President, Responsible
for Special Missions
Jun. 2021 Director (full-time member of Audit
and Supervisory Committee) (present)

Apr. 1978	Joined Konishiroku Photo Industry
Co., Ltd. (now KONICA MINOLTA,
INC.)
Oct. 1985	Joined Ito Accountants Audit Firm
Mar. 1989	Registered as Certified Public
Accountant (CPA)
Jul. 2005 Senior Partner, Chuo Aoyama PwC
Aug. 2007	Managing Partner, Azusa Audit Firm(now KPMG AZSA llc)
Sep. 2010 Director, KPMG AZSA llc
Sep. 2014 Auditor, KPMG AZSA llc
Jul. 2018	Director, Miyamoto Shoji CPA Office(present)
Jun. 2019 External Auditor, AICA Kogyo
Jun. 2020	External Director, AICA Kogyo(member of Audit and Supervisory
Committee) (present)External Director, Meito Sangyo
Co., Ltd. (member of Audit andSupervisory Committee) (present)

Satoshi Toudou

Nobuyuki Omura

Mitsuko Yamamoto

Director, Senior Managing Executive Officer

Director and Managing Executive Officer

Born August 16, 1957

Born April 07, 1964

External Director (Member of Audit andSupervisory Committee)

Apr. 1980

Joined The Tokai Bank, Ltd.
(now the MUFG Bank, Ltd.)
Apr. 2009	Joined AICA, General Manager,
Financial Planning Dept.
Jun. 2009 Executive Officer
Jan. 2010 General Manager, General Planning Dept.
Jun. 2010 Director
Apr. 2013	General Manager, Overseas
Business Dept.
Jun. 2014 Managing Director
Apr. 2017	Responsible for Financial
Administration Dept., Logistics Dept.
Apr. 2018	Responsible for Operations
Administration Dept.
Jun. 2018 Director (present)
Senior Managing Executive Officer (present)
Apr. 2019 Responsible for Information Systems Dept.
Mar. 2020	General Manager, Corporate
Planning Dept.
Apr. 2021	Head of the Construction Materials
Company (present), Sales
Administration Division (present)

Apr. 1988 Joined MITSUI & CO., LTD.
Jan. 2009 Joined AICA Kogyo
Apr. 2009	General Manager, Overseas
Business Dept.
Jun. 2009 Director
Apr. 2011	General Manager, New Business
OfficeApr. 2015	Director and Chairman, AICA Asia
Pacific Holding Pte. Ltd.
Jun. 2017 Managing Director
Apr. 2018	Head of the Chemical ProductsCompany
Jun. 2018 Director (present)
Senior Managing Executive Officer(present)
Apr. 2020	Head of Specialty & Performance
Materials Company
Apr. 2022	Head of the Chemical ProductsCompany
Deputy General Manager, Sales
Administration Division (present)

Kenji Ogura

Ayako Shimizu

External Director

External Director

Born October 01, 1947

Born June 06, 1972

Apr. 1970 Joined Sony Corporation
Oct. 1988	Director and General Manager,
Administration Dept., Sony Nagasaki
Co., Ltd.
Jun. 1995	Director and General Manager,
Administration Dept., Sony Kokubu
Co., Ltd.
Oct. 1997	Director and General Manager,
Administration Dept., ST Liquid
Crystal Display Corporation
Jun. 2005	Representative Director andPresident, ST Liquid Crystal Display
Corporation
Jun. 2012 External Auditor, Cool.revo Inc.
Jun. 2014	External Director, AICA Kogyo(present)
Jun. 2015	External Director, Cool.revo Inc.
(present)

Apr. 1999	Registered as attorney, joined
Ishihara Law Office (present)
Apr. 2015	Deputy Chair, Aichi Bar Association
Director, CHUBU Federation of Bar
Associations
Apr. 2016	Member, Aichi Dispute Coordinating
Committee
Apr. 2017 Member, Nagoya City Information
Disclosure Screening Commission (present)
Jan. 2018 Judicial Commissioner (present)
Apr. 2019 Mediator/Arbitrator, Dispute Resolution Center,
Aichi Prefecture Bar Association (present)
Dec. 2019 External Director, MTG Co., Ltd. (member,
Audit and Supervisory Committee) (present)
Apr. 2020 Member, Ombuds 6 Committee,
Nagoya Broadcasting Network (present)
Jun. 2020 External Director, AICA Kogyo (present)
Mar. 2021	External Director, SYNCLAYER, Inc.
(member of Audit and Supervisory
Committee) (present)
Aug. 2021 Chairperson, Aichi Prefecture
Committee for Adjustment ofConstruction Work Disputes (present)
Sep. 2021 Member of the Subcommittee on Civil
Litigation Law (IT-related), Legislative Council

AICA’s Vision

Born January 01, 1957
Mar. 1983 Joined WOMANSTAFF K.K.
Apr. 1985	Director, Sales Div., WOMANSTAFF
K.K.
Sep. 1998	Senior Managing Director, company
name changed to Tempstaff People
K.K.
Jul. 2016	Director and Senior Managing
Executive Officer, Tempstaff K.K.
(following merger with the latter)
Jul. 2017	Company name changed to Persol
Tempstaff Co., Ltd.
Jul. 2019 Director, Persol Tempstaff Co., Ltd.
Jul. 2020	Senior Advisor (full-time), Persol
Tempstaff Co., Ltd. (present)
Auditor (part-time), Meijo University(present)
Jun. 2021	External Director, Chuo Spring Co.,
Ltd. (Present)
Jun. 2022	External Director, AICA Kogyo(member of Audit and Supervisory
Committee) (present)

Foundations of AICA

AICA Kogyo, Reasons for Appointment of External Directors
DutiesExternal Director

Name

Kenji Ogura(Independent Director)

External Director

Ayako Shimizu(Independent Director)

External Director/
Member of Audit
and Supervisory
Committee

Shoji Miyamoto

External Director/
Member of Audit
and Supervisory
Committee

Mitsuko Yamamoto(Independent Director)(Independent Director)

Reason for Appointment

Reason for Designation as Independent Director

Mr. Kenji Ogura has extensive experience and knowledge
as a corporate executive, which we believe he can leverage to enhance AICA’s management structures.

Because he has no background at any of AICA’s subsidiaries,
major shareholders, or major trading partners, he has no particular stake in AICA, and we believe that no conflict of interest withgeneral shareholders would arise. For these reasons, he has been
designated as an Independent Director.

Ms. Ayako Shimizu will be able to leverage her extensive
expert knowledge and experience as an attorney in the
supervision of AICA’s management. We also believe that,as an External Director, she will be able to offer advice
based on diversity perspectives.

Because she has no background at any of AICA’s subsidiaries,
major shareholders, or major trading partners, she has no particular stake in AICA, and we believe that no conflict of interest withgeneral shareholders would arise. For these reasons, she has been
designated as an Independent Director.

Mr. Shoji Miyamoto has extensive expert knowledge andexperience as a certified public accountant. We believethat he will be able to offer advice and oversight as anExternal Director and member of the Audit and Supervisory Committee.

Because he has no background at any of AICA’s subsidiaries,
major shareholders, or major trading partners, he has no particular stake in AICA, and we believe that no conflict of interest withgeneral shareholders would arise. For these reasons, he has been
designated as an Independent Director.

Ms. Mitsuko Yamamoto has a wealth of experience as a corporate executive, and extensive knowledge particularly in labor management and diversity, which we believe will enable
her to provide advice and oversight as an External Director
and member of the Audit and Supervisory Committee.

Because she has no background at any of AICA’s subsidiaries,
major shareholders, or major trading partners, she has no particular stake in AICA, and we believe that no conflict of interest withgeneral shareholders would arise. For these reasons, she has been
designated as an Independent Director.

AICA Report 2022

36

Data Compilation

AICA Report 2022

Yuji Ono

About AICA

35

Directors Who are Members of the Audit and Supervisory Committee (2 males, 1 female)Foundations of AICA

Supplementary materials on corporate governance are available at our website.
HOME

Sustainability

GovernanceCorporate Governancehttps://www.aica.co.jp/company/sustainability/governance/corporate_governance/

Business Infrastructure

Corporate Governance
Basic Approach to Corporate Governance

Governance Committee

Corporate Governance Structure and Internal Control Systems (as of June 24, 2022)

General Meeting of Shareholders
Appointment/Dismissal

Board of Directors
Audit and Supervision

Audit and Supervisory
Committee Members
3 personsAppointment/Dismissal

Governance Committee

Representative Director
Management Meeting

ReportReportDirections

Coordination

Audit and Supervisory
Committee Unit

Internal Audit Unit

ReportInternal Control Committee

ReportCorporate Ethics Committee

Accounting Audit
Internal Control Audit

AdviceCorporate Lawyer

Effectiveness of the Board of Directors

Strengthening of Overseas Group Companies’ GovernanceItems Identified as Issues in the Previous Year and Measures to Address Them
Items

Details of Improvements

Explanation of terminology in Board of Directors meeting materials, prior explanation of history, past agenda items, and important matters, and time for prior review

Provide notes on terminology, history of past meetings and their agenda items, andadvance explanation of key projects from the January 2021 Board of Directors andManagement Committee meetings

Discussion of the senior management’s appointment and dismissal at Board of Directors meeting

Explan the reasons for the appointment and dismissal of senior management, including those discussed by the Governance Committee, at the Board of Directors
meeting, then deliberate

AICA Report 2022

Given the current situation in which there has been a sharp increase in the number of Group companies overseas acquired
by M&As in recent years, we have been working to strengthen governance of our Group companies overseas by establishingan Overseas Group Governance Committee attended by representatives of the Overseas Planning Department, General Affairs
Department, Legal Department, Internal Audit Unit, Finance Department, Human Resources Department, Quality Assurance
Department, Sustainability Development Department, Corporate Planning Department, Systems Department and overseas business holding companies. The committee has set specific themes and schedules for highly important items such as compliance,
authority, quality, environment and safety, BCP, markets, human resources, finance, IT, and audits, and is applying the PDCA
cycle accordingly.
Through the activities of this committee established in FY2020, we have made progress in strengthening our management
system, including by setting up a three lines defense system by the business, management, and audit departments. We plan toincrease the number of overseas site visits while closely monitoring the status of COVID-19. AICA Kogyo, the overseas businessholding companies, and the Group companies overseas will continue to work together to foster a sense of unity within the AICA
Group and to improve the AICA Group governance system.

AICA Report 2022

38

Data Compilation

In order to verify the effectiveness of the Board of Directors, we have conducted an annual survey of all Directors (including Directors who are members of the Audit and Supervisory Committee) regarding the structure, operation, and agenda of the Boardand the Board’s support structure. The effectiveness of the Board is evaluated on the results of this survey.
In the survey, conducted in January to February 2021, responses of “appropriate” or “reasonably appropriate” were obtained
for all except two of the matters surveyed. Based on this positive feedback, we confirmed that our Board of Directors is generally functioning appropriately and that its effectiveness is being ensured. On the other hand, although no items were raised as
issues (which requires three or more respondents answering “Inadequate” or “Inappropriate”), one respondent each answered“inadequate” for the following two items, which were also raised as issues in the previous year. This can be taken to indicate theneed for continued improvement. We will continue to make improvements to further improve the effectiveness of the Board of
Directors.

37

Remuneration of Company directors (excluding Directors who are Audit and Supervisory Committee Members and External
Directors) consists of a fixed basic remuneration, performance-based remuneration and share-based remuneration, the last twoof which are variable according to business performance. From the viewpoint of their role and independence, remuneration of
Directors who are Audit and Supervisory Committee Members and External Directors consists of basic remuneration only.
Determination of basic remuneration is based on a standard amount for each position and also takes into account publicly announced levels of remuneration at other companies, the Company’s business performance, and other factors. Performance-based remuneration is determined at around 15% to 20% of total remuneration, depending on the director’s role. In
FY2021, performance-based remuneration accounted for 14.7% of total remuneration of Company directors (excluding Directors who are Audit and Supervisory Committee Members and External Directors).
Please refer to the Notice of Convocation of the 122nd Annual General Meeting of Shareholders for details of remunerationof Directors. Adoption of Restricted Stock (RS) Remuneration System was introduced in 2021. The objectives of this system
are to provide an incentive for the sustainable enhancement of corporate value and to promote greater sharing of value withshareholders. Once a year, an amount is granted to eligible Directors based on a standard amount for each position, taking into
consideration the Company’s performance and other factors.
The appropriateness of evaluations and remuneration amounts for individual Directors is examined by the Governance Committee, whose main members are the External Directors, to ensure objectivity and fairness.

Foundations of AICA

Management Promotion Meeting

Audit andSupervisory
Committee

Accounting Auditor

Directors (except for members of
Audit and Supervisory Committee)
6 persons

ReportDirectors’ Remuneration

AICA’s Vision

Appointment/Dismissal

The Governance Committee was established in April 2016 as a voluntary advisory committee to the Board of Directors, consisting mainly of External Directors (two of the four members are Audit and Supervisory Committee members). It deliberates important governance-related matters, including nomination and remuneration of the management team, with the aim of achieving
sustainable corporate growth and further enhancement of the governance function. It has held six times during the 122nd fiscal
year (April 2021 - March 2022). With our transition to being a Company with an Audit and Supervisory Committee system, we
ensure the division of roles between Audit and Supervisory Committee and the Governance Committee, by ensuring there is no
duplication of content between two committees, and also the Governance Committee shares its deliberations with the Audit andSupervisory Committee in order for the Audit and Supervisory Committee to exercise its right to express its opinions.

About AICAThe AICA Group aims to ensure and improve the value of the company and the common interests of its shareholders throughthe enhancement of corporate governance at each of its Group companies in Japan and overseas.
In June 2020, we transitioned from a Company with a Board of Auditors to a Company with an Audit and Supervisory Committee. The Audit and Supervisory Committee, more than half of whose members are External Directors, is responsible for
auditing and supervising the legality and appropriateness of the execution of business for the realization of more compliancemanagement. In this way, we aim to strengthen our corporate governance further and also to build a framework that will more
appropriately meet the expectations of our stakeholders in Japan and overseas.
We have also established a Governance Committee as an advisory committee to the Board of Directors. This committee ischaired by an External Director and four of its seven members are also External Directors. The Governance Committee deliberates on key matters concerning governance, including the appointment and remuneration of management executives, withthe aims of sustainable growth, medium to long-term improvement of corporate value, and further enhancement of governancefunctions.

Foundations of AICA

Supplementary materials on risk management are available at our website.
HOME

Sustainability

GovernanceRisk Management

https://www.aica.co.jp/company/sustainability/governance/risk-management/

Business Infrastructure

Risk Management

Business risks

Basic Approach to Risk Management

Environmental Risk Management(As of October 2022)[10] Risks related to OTIF Management[11] Risks related to creditworthiness of business
partners[12] Risks related to financial and taxation matters[13] Risks related to exchange rate fluctuations[14] Risks related to the occurrence of major disasters
and accidents[15] Risks related to environmental wellbeing[16] Risks related to climate change[17] Risks related to human assets[18] Risks related to information security and IT
infrastructure[19] Risks related to compliance

About AICA

In order to mitigate losses due to unforeseen events, we have conducted a company-wide risk survey once a year, includingGroup companies, and we have compiled and reported the results to the Board of Directors. In FY2022, we established a Risk
Assessment Council, which is attended by the President and organizations in charge of each risk. It is established to improve
the risk assessment process by deliberating the pertinence of risks’ likelihood of occurrence and the magnitude of their impact
reported by each company and division, before developing the information into the form of a report to the Board of Directors.
Significant risks identified through this process are listed as “Business Risks” in our Annual Securities Report and at our website.
In the future, we plan to further strengthen the process for checking the status of response to risks identified at Risk Assessment
Council and for corrective action.

[1] Risks related to global economic fluctuations[2] Risks related to response to changes in the market
and customer needs[3] Risks related to dependence on construction andrenovation demand in specific sectors[4] Risks related to capital tie-ups such as M&A[5] Risks related to price fluctuations and supply
shortages of key raw materials[6] Risks related to product quality and product liability[7] Risks related to facility modification/abandonmentand site restrictions[8] Risks related to outflow of intellectual property andinfringement of other companies’ rights[9] Risks related to insufficient capacity of logistics
network and rising logistics costs*For details on various risks, please refer to our website.

Board of Directors
President and Executive Officer

Audit andSupervisory Committee

Crisis Management Regulations

ReportSupervision/Directions

Risk Assessment Council
Hosting/Participation

Directions

ReportRisk Management Organizations

ReportCorporate Ethics Committee

Management Divisions• General Affairs Dept.

Sustainability Development Committee
Climate Change Response Committee• Finance Administration• Corporate Planning

Internal
Audit Unit
Internal Control
Committee

Coordination

Dept.
• Sustainable

Development Dept.

BCP Committee

Committees

Dept.

Overseas Group Governance Committee
Information Management Committee• Overseas Planning

Dept.
• Business Planning Dept.
• Development Planning

Dept.

Information Disclosure Committee
QEO Committee(Q: Quality, E: Environment, O: Occupational Health and Safety)• Quality Assurance Dept.

Other committees/projects• Systems Dept., etc.

Reporting of serious matters*

Reporting of potential risks

Divisions/Group companies in Japan and overseas*As rules for the reporting of serious matters, we have two regulations—an internal whistleblowing system (to report compliance issues to the Corporate Ethics Committee Window)
and the Company’s own reporting rules (urgent reporting of critical matters to the Chairman and President).

39

AICA Report 2022

Name of Regulation

Description

Earthquake Hazard Prevention
Regulations

Response to earthquake disasters

Wind and Water Hazard
Prevention Regulations

Response to wind and flood damage

Product Safety Management
Regulations

Handling of product complaints where
accidents have occurred

MS Emergency Response
Regulations

Response to plant fires and environmental
problems

Information Management
Regulations

Response to leaks of confidential information

Action Plan for Novel Influenza
Pandemic Preparedness

Response to an outbreak of novel influenza

Business Continuity Plan (BCP)
We has formulated a Business Continuity Plan (BCP) to put emergency measures ensuring important business operations
are not interrupted by major disasters or accidents, and even if business activities are interrupted, the remaining capacity will be
sufficient for us to resume important operations by the target recovery time.
The Great East Japan Earthquake that occurred in March 2011 gave rise to our establishment of the BCP Committee, whichplays a central role in strengthening disaster prevention measures and formulating our BCPs. Formulation of the plans has begun
at our main production bases, both in Japan and overseas, and drills are conducted regularly at those bases that have alreadyformulated their plans.
Based on the lessons learned from the flood damage to our Hiroshima Plant resulting from the torrential rains of July 2018, we
have conducted BCP drills for flooding at four sites (Nagoya, Jimokuji, and Hiroshima plants of AICA Kogyo and Nagoya plantof AICA TECH KENZAI CO., LTD.). We are also expanding the scope of BCP drills with the cooperation of our Group companies
overseas and major production contractors.
We will conduct drills in a more in-depth manner, and determine who will make what moves at what time by designing more
specific assumed disaster scenarios. We will also clarify the competencies required in the event of a disaster and focus on humanresource development to enable faster recovery and alternative production from disasters or accidents.

AICA Report 2022

40

Data Compilation

Audit andrecommendations• Purchasing Department

Promotion of risk mitigation activities• Human Resources Dept.

Regulations Related to Crisis Management

Foundations of AICA

• Legal Dept.

In our Crisis Management Regulations, we have established the measures to be taken when AICA Kogyo
Co., Ltd. or any of our Group companies is faced with abusiness management crisis. We uphold the following
basic policies: (1) Ensure the safety of employees andtheir families, (2) Mitigate social and economic impact,(3) Fulfill our responsibility to supply products to customers, and (4) Support local communities. We specify
the scope of a given crisis, rules for reporting crises
when they occur, and the establishment of crisis response headquarters to ensure prompt and appropriate responses and mitigate damage when crises occur.

AICA’s Vision

Participation

Foundations of AICA

Supplementary materials on compliance are available at our website.
HOME

Business Infrastructure

Risk Management in M&A (Due Diligence)

AICA has established a Corporate Ethics Committee, whose objectives include the development and promotion of necessary policies for compliance. It also pursues the investigation, confirmation, and implementation of corrective action regarding
whistleblowing reports made to the internal whistleblowing hotline and regarding matters that cannot be resolved by Group
companies on their own, as well as the consideration and proposal of disciplinary action to be applied in the event of a compliance-related issue. The Corporate Ethics Committee promptly investigates and addresses all whistleblowing reports and, where
necessary, takes corrective action. The details of all such cases are reported to the senior executives and the members of the
Audit and Supervisory Committee on a regular basis.

*Please refer to our website regarding the Basic Policy on Information Security.

AICA Group Code of Conduct
Basic Principles

Internal Whistleblowing System Concept Diagram

Internal Whistleblowing System
Employees(Japan, domestic)

Employees

Compliance Education

AICA Report 2022

Internal

Response

Corporate Ethics Committee

Whistleblowing

AGWS
Response

President andExecutive Officer

General Manager,
Corporate Planning Dept.
(Executive Officer)

Director in Charge, Human Resources
Department/Legal Department(Executive Officer)

General Manager,
Legal Department

Corporate attorney

General Manager, Human
Resources Department(Secretariat)

External
Law firm
Data Compilation

In 2022, we are issuing the AICA Compliance Casebook. The AICA Compliance Casebook is an easy-to-understand explanation of the AICA Group Code of Conduct, designed to help all employees working for the AICA Group make sure that they
always act correctly.
All AICA Group employees must work to fully understand the contents of the AICA Compliance Casebook, raise awarenessamong their peers, and act responsibly and properly in compliance with laws and regulations, as well as the AICA Group Codeof Conduct and Activity Guidelines at all times and in all situations.
To raise awareness about compliance among employees, we utilizes the AICA Group Code of Conduct and Action Guidelines
to hold annual training in individual workplaces at all of our sites in Japan and overseas, including Group companies. In this training, we thoroughly instill in our employees a consciousness of the positioning of the Code of Conduct and Action Guidelines andthe significance and necessity of compliance. We confirm employees’ understanding throughtraining reports, and we also confirm any requests made by employees. We plan to enhance
this training with the addition of the AICA Compliance Casebook.
In addition, the Corporate Ethics Committee, the Legal Department, and the Internal Audit
Unit play a central role in traveling around to all of the sales offices, plants, group companies
and other sites to provide instruction on the importance of compliance through Group training
on compliance for managers and practitioners, as well as training using e-learning. Any issues
discovered in the course of these visits are incorporated into improvement activities throughout
AICA Compliance
Casebookthe entire company.

(Overseas)

Whistleblowing

Foundations of AICA

[1] Compliance with laws andregulations[2] Respect for human rights[3] Harmony with society[4] Fair business practice[5] Customer’s security and trust[6] Proper information disclosure[7] Protection of company
information and property[8] Environment and safety

AICA’s Vision

ComplianceTo ensure that potential risks of breaches of workplace morals, such as infringements of laws and company regulations, bribery and corruption, and harassment, can be addressed promptly, we have established an internal whistleblowing system inside
the company and at a law firm outside the company. Employees of the AICA Group are able to report to or seek advice from theinternal whistleblowing system about any problems or concerns they may have regarding corporate ethics and compliance. The
telephone number and e-mail address of the internal whistleblowing system are included on the AICA Group Employees Codeof Conduct Card that is distributed to employees, and employees confirm how to use the system at the annual Group-widetraining. This system assures anonymity so that whistleblowers do not suffer any disadvantages, since whistleblowing reports
are accepted anonymously.
As the AICA Group expands our business domain around the world, more and more members have diverse values. Given
these circumstances, we have decided to strengthen the whistleblowing system and mechanism at our overseas offices, andestablished a new global whistleblowing system, the AICA Global Whistleblowing System (AGWS) in April 2022. The contact
point is available 24 hours a day, 7 days a week, and is multilingual.

About AICA

AICA Kogyo Co., Ltd. and our subsidiaries are committed to information security according to our Basic Policy on Information
Security, by which we protect not only customer information but also the information assets of each company from threats suchas accidents, disasters, crimes, and cyber attacks, to live up to the trust of customers and society, and to reduce business continuity risk, legal risk, reputational risk, etc.

41

ComplianceInternal Whistleblowing System

Information Security

The AICA Group is firmly committed to complying with local laws and regulations andconducting its business activities ethically at all of its sites in Japan and overseas. The
AICA Group Code of Conduct forms the foundation of the Group’s compliance program.
It has been established with the objective of realizing our Corporate Philosophy and Business Plan in accordance with our Corporate principle of Challenge & Creation. We havealso established Action Guidelines, which set out specific standards for conduct in accordance with the Code of Conduct.

GovernanceCorporate Ethics Committee

We actively utilizes M&A as an effective means of expanding business and improving profitability. However, depending on thecompany being acquired, there is an inherent risk that the expected benefits and synergies may not be realized, or that there will
be a significant negative impact on business performance. To minimize such risks, the President, the Executive Officer in charge,
and the Corporate Planning, Legal, and Finance Departments assemble necessary members from the Intellectual Property andEnvironmental Departments for each project, and forming project teams to conduct appropriate due diligence on various risks.
These involve synergistic effects and growth strategies between technology and sales channels, as well as human resource, legal, financial, environmental, and compliance aspects (labor conditions, health and safety, corruption, human rights issues, etc.).

Basic Approach to Compliance

Sustainability

https://www.aica.co.jp/company/sustainability/governance/compliance/*Number of cases brought to the Internal Whistleblowing System in FY2021: 4

AICA Report 2022

42

Foundations of AICA

Supplementary materials on human resources are available at our website.
HOME

Human Resources
Basic Approach to Human Resources
Our Corporate Policy is to regard “human resources as the most vital resource of our company, we nurture motivated humanresources and oganizations through mutual understanding and development.” We recognize that while our employees compriseassets, they are also important stakeholders. Based on this understanding, we focus on activities aimed at deepening mutual
understanding as we strive to provide opportunities and an environment in which each and every employee can fully apply his or
her abilities. By building a workplace where diverse human resources can recognize each other and play active roles, we aim toachieve mutual growth for both the company and our employees.

Basic Approach to Human Resource Management and Engagement
We believe that by properly understanding the skills and experience of our employees and enhancing management, as well as
by improving engagement and deepening mutual understanding, we can enrich this source of value creation for the company.
We take a variety of measures to maintain good relations with employees.
Measures Introduced or Planned in Recent Years at AICA Kogyo Co., Ltd.

We operate an in-house FA system to improve the skills, abilities, and motivation of employees, to assign the right
person to the right job, and to revitalize the organization.

Skills List for Important Positions

We visualize the skills required for important positions. In doing so, we plan to assist in the formation of Training
Schemes and career paths for the positions to be pursued.

Talent Management System

We will implement a management system to visualize employee talent in terms of abilities, qualifications, skills, andexperience. We plan to use the data to help assign the right people to the right positions.

Human Resources Development
Basic Approach to Human Resources Development
We cultivates people who have a strong awareness of personal growth and their futures, and who strive forcefully toward thecorporate principle of “Challenge & Creation.” Recognizing that employees are an important presence who will transform thecompany and raise our corporate value, we are directing efforts into human resources development that will allow every individual
employee to apply their strengths to the fullest.

Training Schemes
At AICA Kogyo Co., Ltd. a variety of human resources programs are available. They range from follow-up programs forprospective employees to grade-based training and self-development assistance to encourage employees’ steady career advancement. In FY2021, we began surveying training hours and training costs to ascertain the status of training implementation
at domestic and overseas group companies, including AICA Kogyo Co., Ltd. These results will be analyzed to enhance andimprove the quality of training throughout the Group.
The AICA Kogyo Co., Ltd. Training Schemes
Prior to Joining

Grade-Based
Training

Prior tojoining
correspondence
education

General Grade

On-the-job
training (OJT)AICA Report 2022

New manager training

Global human resources development
Sales skills enhancement training
Production division skills training

Plant manager
training

Next-generation
executive training

Compliance education
Workplace
Training

Labor management education
Quality, safety, and environment education
Online English conversation programs

SelfDevelopment
Assistance
Assistanceto obtain
qualifications

Correspondence education
Hazardous materials engineer/Health and safety manager/Adhesives management engineer/Forklift operator/Construction
project management engineer/TOEIC, etc.

Overview of Major Training Programs

New Employee Training, Years 2, 3This training is designed to develop self-reliant human resources who can think and act on their own. Combined with the OJT and mentoring systems, the department to which the new employee is assigned and the
Human Resources Department work together to develop the new employee.

Global Human Resources
Development ProgramThis educational program promotes basic language learning and cross-cultural understanding in English
and Chinese. We also offer an overseas trainee course, which enables trainees to gain practical experienceat Group companies overseas and nurture human resources who can be immediately effective in theiroverseas postings.

Correspondence education andAssistance to Obtain Qualifications

We have also established support programs for correspondence education and obtaining public qualifications, and we encourage employees’ individual study endeavors by covering costs and offering incentive
bonuses.

AICA Report 2022

Data Compilation

43

Mid-level grade training

Foundations of AICA

Formed in 1947, the AICA Kogyo Labor Union has maintained a good understanding of AICA Kogyo Co., Ltd. and goodlabor-management relations. To deepen mutual understanding, the top three executives of the union and the Human Resources
Department hold meetings once a month to exchange information. The union also meets with the senior executives several times
a year, including at labor-management negotiations, to discuss corporate policy, the progress of the Medium-Term Business
Plan, the general situation in individual businesses, and the various programs and schemes.
Each AICA group company respects the rights of its employees under the laws and regulations of its country or region, andstrives to build favorable relations with employees through close communication.

2nd-year training
Mentor training 3rd-year training

Employee Survey

Labor-Management Relations

Manager GradeManagement skill training
Labor affairs, legal, humanresources, finance andmanagement strategy, etc.

New employee training

OccupationBased Group
Training

As social values have become more diverse, how employees who work at a company think about that company and theirmindset toward their work have changed and diversified. Recognizing that employee surveys are essential for the further development of the company, we commission an outside organization to conduct Employee Surveys on a regular basis. In the latestof these surveys, conducted in July 2019, the research firm reported that among our employees, “general satisfaction” withthe company was slightly higher than the average for companies in general. In FY2022, the AICA Group Employee Sutisfuction
Survey was newly implemented to include domestic and overseas group companies in its boundary. We will reflect the resultsof these surveys in our various policies, including our personnel system, and take measures to improve employee engagementfrom a medium- to long-term perspective.

Mid-Level Grade

AICA’s Vision

FA System

Human Resources

About AICA

Human Resource Management and Engagement

Sustainability

https://www.aica.co.jp/company/sustainability/human/

44Foundations of AICA

Supplementary materials on human resources are available at our website.
HOME

Human Resources

Diversity and Work-life Balance

Certification Status
Certification as a Company Promoting Women’s Participationby the City of Nagoya (Jan. 2016 and Jan. 2019)“Kurumin” certificationfrom the Ministry of Health, Labor and Welfare(Feb. 2016)

This is a program that certifies companies engaged
in initiatives to allow women to shine in their organizations and that presents awards to companies withparticularly outstanding initiatives in this area.

Companies that meet certain criteria, including assisting
employees with raising children, are certified by the Ministerof Health, Labor and Welfare and are able to use the “Kurumin” logo on their advertising, products, and other media.

Target boundary: AICA Kogyo Co., Ltd. non-consolidated Target initiative period: April 1, 2022 to March 31, 2025

Target Categories

Target Figures

Current Status (As of End-Mar. 2022)

32.0% (new-graduate recruits joining in April 2022)

New proposals/revision of work-life balance
assistance scheme: 3 or more

3

Increase Percentage of Female
Managers

5.8% or more

3.3%
(7 female managers out of a total of 213 managers)

Improve Rate of Recruitment ofPeople with Disabilities*

2.3% or more

2.47%

Promotion of Mid-Career Hirees toManagement Positions

Maintain at 20% the ratio of mid-career hirees
promoted to management positions

20.7%

Cultural Reform

Percentage of available paid leave taken:
70% or more

63.6% (FY2021 Result)

FY2020

FY2021

2.35%

2.66%

2.47%

*Calculated according to the method for the statutory employment rate.

Work Style ReformAs the issue of excessively long working hours has become a social problem and the entire nation is pursuing work stylereform, we launched our own Work Style Reform Promotion Project on April 1, 2017. We are working actively to create a culture
and change mindsets to discourage employees from working excessively long hours. Initiatives include “No Overtime” days andthe reduction of overtime. In March 2020, we urgently introduced a work-from-home scheme due to the impact of the spread of
COVID-19. This led to the establishment of the Work Improvement Committee in April 2020 as an organization within the Work
Style Reform Promotion Project in order to promote further diversification of work styles, among other improvements.
Through C&C Activities*, a small group activity in which all employees of Aica Kogyo participate, we are making improvements
to equipment and operations, pursuing a shift to multi-skilled workers, and striving across the entire company to reform operations to maintain appropriate working hours.
*C&C Activities: Small-group activities in which all employees of Aica Kogyo in all divisions participate. These groups discuss and implement specific action plans, using QC methods and other scientific approaches, to consider ways of achieving operational
improvements and implement division policies. These activities have a long history, with their predecessor, the ZD (Zero Defects) Campaign, starting in 1965 with the objective of raising productivity. The initial aim of that campaign was to achieve“zero mistakes” in our work through careful attention and innovative efforts by individual employees. From 1979, the C&C
Campaign was rolled out, taking the initials of our present Corporate Principle, Challenge & Creation. The campaign took
on a broader meaning that includes the promotion of initiatives for the achievement of management goals, which has been
passed down to today’s C&C Activities.

Occupational Health and Safety
Basic Approach to Occupational Health and Safety*According to statutory calculation methods

Re-Employment Scheme

To maintain a sound foundation for the company and achieve sustainable growth, it is important that we strive to maintainthe health of each individual employee and to improve workplace safety. We recognize that our business activities also have an
impact on the health and safety of contractors who work on our sites and residents of the surrounding areas, and we strive tomaintain the environment at our sites and in the surrounding areas.
In keeping with the Occupational Health and Safety Act, we have established Health and Safety Committees at each of oursites. Based on measurements of working environments and the findings of health check-ups, we investigate and deliberate on
important matters that will form the foundation of measures for preventing health problems among workers. Membership of the
Health and Safety Committee is comprised of members of management and labor union members in equal numbers. Regularmeetings are also held with contractors who work on site in an effort to further invigorate communication.

AICA Report 2022

46

Data Compilation

In the hope of active participation in the workplace of older adults amid the rapidly declining birthrate and aging of the population, the Revised Act on Stabilization of Employment of Elderly Persons, which mandates the provision of employment opportunities up to the age of 70, came into force on April 1, 2021. With the aims of responding to these legislative revisions, raising
employee motivation, and guaranteeing their lifestyles, we are
Trends in Newly Engaged Employees under the Re-Employment
planning to make revisions to our Re-Employment Scheme.
Scheme at AICA Kogyo Co., Ltd.
In April 2022, the Career Support Unit was established in the
FY2019FY2020
FY2021
Human Resources Department, and began considering specific measures to expand opportunities for senior personnel.
14 people
15 people
21 people
We will continue with these efforts to develop a safe and secure work environment.

AICA Report 2022

FY2019Foundations of AICA

Percentage of women recruited to new-graduate
career-track positions: 30% or more

Ratio of Employees with Disabilities at AICA Kogyo Co., Ltd.*

AICA’s Vision

Diversity Promotion Activity Goals

With the aim of ongoing employment of people with disabilities, we have identified the types of work that people withdisabilities are able to perform, and are working to firmly establish their presence in the workplace. We will work actively
to further expand the number of these employees.

About AICA

We promote diversity in response to the globalization of business and the diversification of market needs. In the area of women’s participation in particular, we launched a Women’s Participation Promotion Project in June 2013 and have focused efforts
on initiatives and the development of an environment in which the power of women can be put to use in the management of thecompany. The name of this initiative was changed to the Diversity Promotion Project in FY2018 and we are working to promote
the establishment of foundations in which more diverse personnel can participate actively in the workplace. We are also focusing
on expanding systems that support a balance between personal and professional life, enabling more flexible work styles.

45

Human Resources

Employment of People with Disabilities

Basic Approach to Diversity and Work-life Balance

Increase Percentage of Female
Employees

Sustainability

https://www.aica.co.jp/company/sustainability/human/

Foundations of AICA

Supplementary materials on human resources are available at our website.
HOME

Sustainability

Human Resources

https://www.aica.co.jp/company/sustainability/human/

Human Resources

Prevention of Industrial Accidents

Prevention of Traffic Accidents

To ensure that the serious accident that happened at the Jimokuji Plant on January 17, 2006 is not forgotten, we have declared
January 17 as All AICA Safety Day. Every year on All AICA Safety Day, a minute of silence is observed, and morning assembly
has a safety theme at all workplaces. The AICA Group Occupational Health and Safety Convention also takes place on this day.
On the factory floor level, Kiken Yochi Training or “risk prediction training” (KYT) activities, hiyari-hatto (near-miss) activities, andrisk-source improvement activities are conducted in the small-group activities (C&C Activities, p. 46). To enhance these low-key,steady efforts, since FY2018, the KYT activities being undertaken by the individual small groups are being assessed under apoint rating system. Pursuing improvements so that training is not just a formality, but will be something meaningful that leads togreater awareness of safety, we are striving to eliminate industrial accidents.

Vehicle Accidents (caused by negligence of AICA Kogyo Co., Ltd. employees or both parties)(accidents)

FY2017FY2018FY2019FY2020

FY2021

26

22

25

10

11

About AICA

Achievement Trends

We have a fleet of company vehicles that are in use in our
day-to-day operations. The use of company cars is limited to
employees who have been registered after their driving aptitude has been confirmed, and we have established our own
Rules for Use of Company Vehicles in our efforts to prevent
traffic accidents.
Last year, there were many minor accidents caused bypoor driving skills, such as parking lot accidents by less experienced drivers, and self-incurred accidents. We will continue
to focus on eliminating such accidents and improving driving
skills.

Target boundary: All AICA Group production sites in Japan

Number of Industrial Accidents

Major Initiatives in FY2021(accidents)

FY2018FY2019FY2020

FY2021

Fatal Accidents

0

0

0

0

0

Lost-Time Accidents

7

6

7

6

5

Of Which, Those
Involving People
Other than Full-Time
Employees

3

6

4

4

2

10

12

13

6

12

4

7

6

1

4

Non-Lost-Time
Accidents
Of Which, Those
Involving People
Other than Full-Time
Employees

Health Management

Occupational Health and Safety Convention (Jan. 2022)
Plant manager training (Jan. 2022)

Basic Approach to Health Management
In a Japanese society where the birthrate is declining and the population is aging at an accelerating rate, it is becoming increasingly important to address the issue of workforce retention and employee health promotion. We believe that it is essential forthe sustainable development of our company, which in turn helps resolve social issues, to improve the performance and job satisfaction of each and every employee by creating an environment in which everyone can work with confidence and enthusiasm.
With this in mind, we have formulated our Health Declaration for 2022, while also clearly stating our key priorities. To realize our
Corporate Principle and Corporate Philosophy, we will strengthen our efforts by incorporating priority items into our medium- tolong-term business plan, and strive to increase our corporate value and employee retention rate.

Risk Assessment
Risk assessment is a method for discovering potential risks and hazards in the workplace and eliminating or mitigating them.
We conduct risk assessments under internal regulations based on our Occupational Health and Safety Management System atmajor AICA Group production sites in Japan. We conduct risk assessments for chemical substances to maintain the working
environment and appropriate protective equipment.

Mental Health
In an economic environment of intensifying market competition and rapid change, the stress felt by workers is only increasing,
becoming a serious social issue.
We have put a variety of measures in place to maintain not only the physical health of our workers, but also their mental andemotional health. The results of annual stress checks are fed back to the individuals, and the findings from analysis of the results
on a departmental level are fed back to the head of each department, to promote initiatives aimed at improvements in the workplace. We have set up a health advice hotline, run by an external organization, as an avenue for employees to seek advice withthe assurance of confidentiality.

Foundations of AICA

AICA Group Occupational Health and Safety Convention (FY2019)

AICA’s Vision

FY2017

Regular Health Check-ups

47

AICA Report 2022

AICA Report 2022

48

Data Compilation

In addition to the health check-ups mandated by law, we also provide a combination of Lifestyle Disease Check-ups andGynecological Check-ups tailored to employees’ age, gender, and preferences. In this way, we are strengthening our employee
health management functions. Since FY2014, the company has covered part of the cost of influenza vaccinations, including forfamily members, to step up efforts to prevent our workers falling ill. In June 2021, we made it possible for employees to takespecial or official leave to be vaccinated against COVID-19 and if they are unwell from side effects of the vaccine.

Foundations of AICA

Supplementary materials on the environment are available at our website.
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Environment

Environment

Qualitative Evaluation Results through scenario analysis

Basic Approach to the Environment

Scope of Scenario Analysis
Environmental Philosophy

We will strive to protect the environment,
achieve harmony with local communities,
and deliver environmentally friendly
products.

Transition risks and opportunities: domestic construction market

Physical Risks: AICA Group production sites in Japan and overseas

Overview of Possible Scenarios
1.5°C Scenario(Climate change action is progressing and regulations are being tightened)

Environmental Policy

1 Creating products that are kind toboth the environment and humans
2 Responding to climate changeIntroduction of carbon taxes and emissions trading schemes to curb GHG
emissions under international coordination

Continuation of policies at the level currently in force

Overseas
Markets

 ignificant decline in gasoline demand
SWidespread corporate decarbonization pledges
Increased need to reduce GHG emissions throughout the life cycle

 ontinued increase in gasoline demandCIncreased demand for products related to climate change adaptation
due to more frequent extreme weather events and rising temperatures

Society

Lifestyles change amid pervasive decarbonization

 ajor changes in livable areas amid heat waves and water shortages
MFrequent outbreaks of infectious disease

Extreme
Weather

Gradual but frequent temperature increases

 lood frequency in Japan becomes noticeably more frequent,F
quadrupling compared to the end of the 20th century

Policy3 Contribution to the circular economy
4 Harmony with local communities

4°C Scenario(Action is delayed, and temperatures rise as a result.)

5 C ompliance with laws and regulations

About AICAThe AICA Group has developed an environmental management system basedP.32).
on ISO 14001 and operates an original QEO Management System (To realize a sustainable society, we engage actively in addressing environment-related issues.
The Sustainability Development Committee has jurisdiction over environmental themes. The Climate Change Response Committee established under thiscommittee plays the central role in responding to climate change issues. The
details of the Committee’s activities are periodically reported to the Board of
Directors via the Sustainability Development Committee.

Sustainability

https://www.aica.co.jp/company/sustainability/environment/Target boundary: The target boundary of each category is clearly stated. The breakdown of business sites is as follows.
Qualitative Evaluation Results
AICA’s Vision

AICA Group production sites in Japan: All production sites of AICA Kogyo Co., Ltd., AICA Interior Kogyo Co., Ltd., AICA Harima Kogyo Co., Ltd., and AICA TECHKENZAI CO., LTD.
AICA Group production sites overseas: All production sites of PT. AICA Indonesia, PT. Techno Wood Indonesia, Aica Laminates India Pvt. Ltd., Aica Laminates Vietnam
Co., Ltd., AICA Asia Pacific Holding Group, Evermore Chemical Industries Group, and Wilsonart companies

Risks Related to Climate Change
Transition risk

Assessment of Impact under the 1.5°C Scenario, in which Larger Impacts are Expected
Scenario Analysis Results

Responding to Climate Change

Category

Changes in External Circumstance

Basic Approach to Climate Change Response

StricterRegulation

Technology

New carbon tax, emissions credit
system introduced

AICA Report 2022

2050

2030

2050

Increased raw material costs due to pass-through ofcarbon taxes on suppliers, higher energy costs, and increased capital expenditures to reduce GHG emissions

Large

Large

Moderate

Large

Increased costs due to taxation of own-company GHG
emissions

Large

Large

Moderate Moderate

Increased electric power costs due to taxation of electricity generation with carbon emissions and higher electricity
generation costs

Large

Large

Moderate

Decline in demand of our products for construction due toa shrinking construction market, as clients become lessModerate Moderate
willing to build due to higher taxes and stricter regulations
related to climate change

Small

Moderate

Stricter plastic waste regulations

Increased waste disposal costs

Small

Large

Small

Moderate

Progress with low-carbon technologies(hydrogen, CCS, etc.)

Delays in implementing low-carbon technologies ourplants result in unsatisfactory reductions in our GHG
emissions and reduced demand for our products

Large

Large

Small

Moderate

Increasing demand from business
partners to reduce GHG emissions

Failure to meet business partners’ demands results in aModerate Moderatedecrease in sales due to suspension of transactions

Small

Large

Increase in R&D expenditure and capital investment fordevelopment of new products that meet market needs,
and for conversion of manufacturing methods from existing products

Large

Large

Moderate

Large

Cost increase due to conversion of raw materials tobiomass that does not generate CO2 during waste combustion

Large

Large

Small

Moderate

Decrease in demand for non-recyclable products due to
growing demand to reduce GHG emissions generated
when products are disposed of after use

Small

Large

Small

Moderate

Naphtha price hikes due to lower
gasoline demand

Lower demand for gasoline increases the cost ratio of thenaphtha selling price, boosting prices of naphtha and related raw materials

Small

Moderate

Small

Large

Changes in demand for lumber,including substitution of fossil-derived
fuels and raw materials

Intense demand for lumber increases the cost of lumber
purchased by us

Small

Moderate

Small

Moderate

Increased need for low-carbon
products with low GHG emissions overtheir entire life cycle
Markets

AICA Report 2022

Data Compilation

49

Degree of Impact

2030

Small

Toward Expanded Disclosure Based on TCFD Recommendations
In May 2020, we declared our endorsement of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). For the expansion of disclosures under these recommendations, we first conducted interviews with our stakeholders to predict how the environment surrounding our company will change in the future due to the impact of climate change. We
have organized a compilation of the risks and opportunities associated with the effects of climate change, and what we should
do to address it. In the first half of FY2022, we used external scenarios to conduct qualitative impact assessments for eachof the identified risks and opportunities at 2030 and 2050 given 1.5°C and 4°C global scenarios. We will also proceed with aquantitative financial impact assessment of risks and opportunities from climate change impacts during this fiscal year. We plan
to use these assessments to develop a climate transition plan and incorporate longer-term strategies into our business strategy.

Likelihood of Occurrence

Foundations of AICA

In the Global Risks Report, published annually by the World Economic Forum (WEF), an international organization committed
to resolving global-scale issues, “extreme weather” and “climate action failure,” both related to climate change, were perceived
as the highest likelihood risks and highest impact risks. Extreme weather events are also increasing on a global scale. AICA Kogyo has sustained damage several times in recent years from disasters caused by such events, and we feel keenly that climatechange is a major business risk. With this recognition, we incorporated materialities (material issues), including “responding toclimate change,” in the Medium-Term Business Plan that began in April 2021. We have set concrete KPIs for each of the materialities. In responding to climate change, we have declared targets for GHG emissions, industrial waste, and water use. We willthoroughly manage progress toward these targets and pursue them steadfastly.
As an organization to promote more concrete deliberation and implementation of our responses to climate change, welaunched the Climate Change Response Project in April 2020. The Project was relocated into the Sustainability Development
Committee in April 2021, with production, sales, development, and administrative divisions joining forces to propose drastic
GHG reduction measures and promote initiatives aimed at capturing opportunities resulting from climate change.

Impact on Our Company

50

Foundations of AICA

Supplementary materials on the environment are available at our website.
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Environment

Physical risk

Scenario Analysis Results
Changes in External CircumstanceFrequent occurrence of typhoons andtorrential rain

Acute

Increase in average temperatures

Impact on Our Company

Likelihood of Occurrence

Basic Approach of Reduction of GHG emissions

Degree of Impact

2030

2050

2030

2050

Damage to our plants resulting in damage to equipment,
disposal of inventory, and delivery delays, leading to extraordinary losses and a drop in sales due to shutdown

Large

Large

Large

Large

Damage to supplier plants resulting in decreased production volume due to difficulty in obtaining raw materials andother purchased items

Large

Large

Increased forest fires boost wood procurement costs

Small

Moderate

Moderate Moderate
Small

Moves to aim for net zero GHG emissions by 2050 are gaining pace in various countries, and we believe that any company
that is unable to respond to those moves will be gradually eliminated from the market. In our aim to be a chosen company inthe net zero age, we will pursue with certainty the targets incorporated as materiality KPIs in the Medium-Term Business Plan.
Alongside our deliberation of drastic emissions reduction measures, we will conduct our usual energy-saving activities andappropriate capital investment, including the introduction of higher-efficiency production equipment, in our efforts to optimize
our energy use.

Moderate

Medium- and Long-Term Targets

Opportunities Due to Climate Change
Scenario Analysis Results
Increased Impact
Scenario

1.5°C

1.5°C

1.5°C

4°C

Increase inresource
efficiency

Products/
Services

Markets

4°C

4°C

1.5°C

4°C

Impact on Our Company

Likelihood of Occurrence

Degree of Impact

2030

2050

2030

2050

Improved energy use
efficiency

Reduction of energy costs and avoidance of carbon tax payments through self-review of production processes and promotion of efficient production processes in the industry, etc.

Small

Large

Small

Moderate

Increased demand for
products adaptive to climatechangeIncreased demand for the following products that
contribute to climate change adaptation: low-carbon products, products using biomass materials,
recyclable products, products that contribute to
the utilization of wood resources, products that
help reinforce buildings, easier construction products, heat insulation-related products, antiviralproducts, etc.)

Large

Large

Moderate

Large

In the Medium-Term Business Plan launched in April 2021, AICA set targets for the reduction of GHG emissions. For Scope 1
and Scope 2, we set the goal of conducting scenario analysis aimed at achieving net zero GHG emissions by 2050 in responseto the Japanese government’s declaration on net zero GHG emissions by 2050. We recognize that our current numerical target(reducing GHG emissions revenue intensity by 26% from FY2013 levels) for the halfway point of FY2030 is insufficient. As such,
we are engaging in repeated discussion about raising our target alongside conducting this scenario analysis. We are not yet atthe point of setting targets for Scope 3, but we will steadily work toward the establishment of calculation methods on a Groupbasis and on developing emissions reduction measures.

Scope 1 and Scope 2

 educe GHG emissions revenue intensity by 10%, compared to FY2020, by FY2023
R
Conduct simulations aimed at net zero GHG emissions by 2050, and develop measures(From AICA’s own activities)

Scope 3

Widespread customer
understanding of additional
costs

Increased selling prices lead to increased sales
due to a better understanding of the new costs ofclimate change impacts

Moderate

Moderate

Moderate

Large(From other companies’ activities related
to AICA’s own business activities)

Existing customers’
increased expectations
for companies promoting
climate action

Increase in demand for the our products due tostrengthening of relationships with existing customers through promotion of climate change response

Small

Moderate

Small

Large

FY2023 Targets

Insurance coverage forincreased extreme weather
eventsReduction of flood and other damage impacts
through insurance coverage

Large

Large

Large

Large

Establish calculation methods for Scope 3 emissions and develop emissions

reduction measures
Please refer to pages 17-26 for an overview of the Medium-Term Business Plan.

FY2021 Result

AICA GroupGHG emissions revenue intensity
10% decrease from FY2020

The increase in net sales significantly exceeded the increase in energy consumption from increased production,
resulting in lower emissions revenue intensity.

12% decrease from FY2020

Third-party assurance has been obtained for some environmental indicators, e.g. GHG emissions.
Please refer to the Environmental Data at the back of this booklet (pages 63-64) for details.

Result Trends (Scope 1 & 2)

Actions We Should Take

Target boundary: AICA Group production sites in Japan, AICA Group overseas production sites, AICA Group sales locations in Japan (26 sales offices)

Having recognized the need to address these risks and opportunities, we have initiated the following actions. In FY2021, we
focused on efforts to reduce GHG emissions.

Increase/Decrease Factors

Please refer to page 53 for details.

Active Response
We will strive to develop and expand sales of products responsive to climate change, and to contribute to society withthe aim of the sustainable development of AICA and society.

Production sites in Japan
Overseas production sites
Sales locations in Japan(left axis)(left axis)(left axis)①-④ Newly consolidated in each fiscal year
Production sites in Japan + Overseas production sites (right axis)(t-CO2)100,000

88,137① 26,917

80,000– Examples of measures to prepare for risks –Strengthen BCP against natural disasters
Strengthen BCP for raw materials procurement
Deliberation and implementation of drastic measures
to reduce GHG emissions
Optimization of energy use and composition
Waste reduction/recycling
Effective use of resources
Appropriate information disclosure and engagement– Examples of products responsive to climate change –Low-carbon products
Products using biomass materials
Recyclable products roducts that contribute to the utilization ofPwood resources

GHG Emissions Revenue Intensity

60,00090,02989,197② 1,332 ③ 9,366
87,86564,386
63,13260,00456,764
61,220100,443④ 3,095

55,29040,00020,0000121,150
1,331

2017

151,269
1,284

2018

149,201

143,637

1,184

2019

155,733

1,060

2020

Production sites in Japan + Overseas production sites(t-CO2)(t-CO 2/100 million yen)

500,000

100

400,000

80

74.0

300,000

60

200,000

40

100,00020

0

097,34880,66353,608

Production sites in Japan

1,032

2021

(FY)

79.1

77.9

53.4

51.3

47.9

47.8

45.0

2017

2018

2019

2020

2021 (FY)

Data Compilation

Passive Response
We will take measures to minimize the impacts of climatechange and to prepare for risks to business continuity.

GHG Emissions

82.2
72.6

Products that help to reinforce buildings
Easier construction products
Heat insulation-related products
Anti-viral products

51

AICA Report 2022

Foundations of AICA

Resilience

Changes in External Circumstance

AICA’s Vision

1.5°C

4°C

Category

About AICA

Chronic

Environment

Reduction of GHG Emissions (energy saving)

Assessment of Impact under the 4°C Scenario, in which Larger Impacts are Expected

Category

Sustainability

https://www.aica.co.jp/company/sustainability/environment/

AICA Report 2022

52

Foundations of AICA

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Sustainability

Environment

https://www.aica.co.jp/company/sustainability/environment/

Environment

Major Initiatives in FY2021

Green Logistics
Gas is burned, odorless and harmless Deodorizer fficient operation of deodorization equipment andEeffective use of waste heat
Exhaust gas generated in the manufacturing process is discharged into the atmosphere after combustion and removal of
toxic substances by deodorization equipment. The heat generated during combustion is reused in the drying process andother processes, thereby reducing energy use.

Reducing GHG emissions from transport is another challenge that companies must address. In the AICA Group, the logistics
officers at major shipping sites throughout Japan are working together with the sales divisions on ongoing improvement efforts,
including modal shift, improving the efficiency of truck freight, and depot organization.
We will continue to put various measures in place to reduce energy consumption (heavy oil equivalent) per freight tonne-kilometers (t-km), which is a management index for this area.

Exhaust gas
Heat

Product drying
process

Flammable exhaustgases are generated

Heat exchanger

Targets and Result
Target boundary: Domestic transport (Logistics in which AICA Kogyo Co., Ltd. is the shipper)

Heat generated during combustion is reused in the production process

Name of Site

GHGs
Annual Reduction

GHG Reduction
Rate at Each Site

AICA Kogyo Co., Ltd.
Hiroshima Plant

Adoption ofrenewable energy

350t-CO2

29% reduction

AICA Kogyo Co., Ltd.
Fukushima Plant

Installation of solar
power generationequipment

135t-CO2

23% reduction

AICA Harima Kogyo
Co., Ltd.
Kasai Plant

Fuel conversion fromheavy oil to liquefied
natural gas (LNG)

1,200t-CO2

18% reduction

Scope 3 Emissions

1% year-on-year decrease
44.77 kl/million t-km or less

FY2022 Target

1.2% year-on-year decrease
44.70 kl/million t-km

1% year-on-year decrease
44.25 kl/million t-km or less

Result Trends
Target boundary: Domestic transport (Logistics in which AICA Kogyo Co., Ltd. is the shipper)

T-Km Energy Use Intensity in Transport(kl/1 million t-km)

FY2017FY2018FY2019FY2020

FY2021

44.58

44.12

43.44

45.23

44.70

Use of LCA
We have introduced Life Cycle Assessment (LCA) in thedevelopment of our products. LCA of CO2 emissions has become particularly important in recent years and we are concentrating efforts on analysis.
In addition to using LCA in the development of low-carbon
products, we will identify the carbon intensity and environmental impact of each product and strive to develop productsthat are kind to the global environment.

LCA Concept

Mining/Refining

Natural resources

IN
EnergyRaw materials

Manufacture

OUT

Disposal

AICA Products

Foundations of AICA

We have been working to identify and calculate GHG emissions related to product manufacture (LCA) since 2006. In FY2013,
we calculated our Scope 3 emissions for the first time. For Categories 1, 5, and 12, the calculation method has been substantiallyrevised, and third-party assurance has been received for actual values since FY2020. In an ongoing trend, the largest volume of
Scope 3 emissions at AICA Group production sites in Japan were in Category 1 (purchased goods and services), followed byCategory 12 (disposal of sold products). By FY2023, we plan to lay the groundwork for expanding the boundary of calculation
to include Group companies overseas, as well as to study reduction measures.

FY2021 Result

AICA’s Vision

Decision on three environmental investment projects
The Climate Change Response Committee took the leadin planning investment projects that will contribute to the reduction of GHG emissions, and it was decided to execute thethree capital investments listed on the right. In the future, the
ICP system will be used to promote the introduction and operation of further measures that contribute to GHG reduction.

Measures

FY2021 Target

About AICA

Introduction of internal carbon pricing program
To encourage the adoption of equipment that helps reduce GHG emissions, we have introduced an Internal Carbon Pricing (ICP)
program for our internal capital investment. We encourage environmental investment, the effectiveness of which can be difficult
to see, by converting GHG emission reductions from equipment installation and renewal into monetary values, and incorporatingthem into investment decision criteria to visualize future value. The ICP unit price is based on the International Energy Agency (IEA)
carbon price forecast for the 1.5°C target scenario for developed countries, and varies depending on the timing of equipment
installation and the service life of the installed equipment.

Substancesof Concern,e.g. CO2

Shipment/UsePlease refer to pages 63-66 for third-party assurance status.

Breakdown of FY2021 GHG Emissions at AICA Group Production
Sites in Japan

Breakdown of Scope 3 Emissions at AICA Group Production Sites in Japan(t-CO2)

Scope 3(Category 12)

6%

4%

69%
Scope 3(Category 1)
Purchased goods
and services

AICA Report 2022

1

Purchased goods/services

391,915

2

Capital resources*

3,199

3

Fuel, etc. not included in Scope 1 and 2

9,363

4

Transportation and delivery (upstream)*

15,9655

Waste from business

5,725

6

Business travel*

7

Employee commuting*

12

Disposal of sold products

13

Leased assets (downstream)

425
194
83,911

Basic Approach to Reduction of Industrial Waste and Effective Use of Resources
We began concrete initiatives for the reduction of industrial waste in 1998. This is an important environmental indicator forthe entire Group. In addition to activities aimed at reducing the volume of waste generated, such as volume reduction andimprovement of product defect rates, we also actively recycle waste in order to realize a recycling-oriented society. In productdevelopment, we adopt product specifications that consider efficient use of raw materials, and we are working to reduce input
resources by promoting the use of lighter packaging and packing materials.

Data Compilation

Scope 2
15%

53

Emissions

Scope 1

Disposal ofsold products

Scope 3Category

Reduction of Industrial Waste and Effective Use of Resources

Targets and Result
FY2023 Target

AICA Group
Industrial waste emissions revenue intensity
10% decrease from FY2020

FY2021 Result

7% decrease from FY2020

Increase/Decrease Factors

Activities to reduce industrial waste emissions resulted inlower emissions revenue intensity, as the increase in net
sales exceeded the increase in emissions associated with
the increase in production volume.

192*The boundary of calculation is AICA Kogyo Co., Ltd. non-consolidated.
Note: Categories 8, 10, 11, 14, and 15 are excluded from the calculation. See the Environmental Data
page (P63-64) for reasons for exclusion.

AICA Report 2022

54

Foundations of AICA

Supplementary materials on the environment are available at our website.
HOME

Environment

Target boundary: AICA Group production sites in Japan, AICA Group production sites overseas

Industrial Waste Emissions
Production sites in Japan

40.0

2,241

42,651
36,04030,46327,29826,560
6,611
② 572

3,903
① 808

3,998

3,095

2017

2018

③ 1,857
4,657

2020

10.0

7,294

0

2021 (FY)

Major Initiatives in FY2021

15.9

1,000
15.6

2018

2019

Consumption

Aica Laminates India Pvt. Ltd.

Northern India

32,968 m3

PT. AICA Indonesia
PT. Techno Wood Indonesia

Cikampek(Indonesia)

32,588 m3

PT. AICA INDRIA(AAPH*2 Group)

Pasuruan(Indonesia)

36,277 m3

1,363

1,603

1,396

812

Shenyang AICA-HOPE KOGYO Co., Ltd.

Northeastern
China

3,572 m3

2020

2021 (FY)

2017

2018

2019

*1 Sites assessed as at “extremely high” risk in WRI Aqueduct’s Overall Water Risk.
*2 AAPH: AICA Asia Pacific Holding

2021 (FY)2020

Environmental Risk Management
AICA’s Vision

Collaborating and Outsourcing Companies

Recycling Details
Sludge drying accelerator

Improving the material recycling rate of extruded cement board

Fertilizer sales company

Fertilizer for agricultural crops

 il-water separation of liquid waste to produce valuableO
resources

Solid fuel sales company

Solid fuelEffective use of calcium silicate panel scraps

998

1,620
④ 17

1,434
③ 38

0
2017

Companies with patented sludge drying
technology

Conversion of used film into a valuable resource

1,043
① 231

14.5

Initiative to Recycle Unwanted Materials in Japan

Improvement of product defect rate

2,478

2,384

1,381
② 18

19.2

22.3
17.5

④ 37

2,382

2,291

2,000
18.6

20.0

7,331

6,514

6,039

2019

21.6

20.4
23,66520,78420,00028.8

30.0

30,996

Location

About AICA

28,591
24,5930

3,000(tonne/100 million yen)

40,000Name of Site

(1,000 m³)

Production sites in Japan + Overseas production sites

50,000Overseas production sites①-④ Newly consolidated in each fiscal year

Production sites in Japan + Overseas production sites(tonne)Actual Water Consumption in FY2021 in High-Risk Areas*1

Production sites in Japan

Production sites in Japan

Overseas production sites

Target boundary: AICA Group production sites in Japan, AICA Group production sites overseas

Water Usage

Industrial Waste Emissions Revenue Intensity①-④ Newly consolidated in each fiscal year

10,000

Environment

Result Trends

Result Trends

30,000

Sustainability

https://www.aica.co.jp/company/sustainability/environment/

State of Compliance with Environmental Laws
In FY2021, one case was raised by the regulatory authorities against the AICA Group in Japan, and the Company responded
as follows.
Location of Occurrence

AICA Kogyo Co., Ltd.
Hiroshima Plant

Basic Approach to Reduction of Water Use

Overview

Wastewater COD concentration

The results of an on-site inspection of the plant by the regulatory authority indicated that the effluent COD concentration was 1 mg/L higher than the standard.
The supply channel for unloaded water was adjusted, improving water emission
conditions.

Foundations of AICA

Reduction of Water Use

Description

Neighborhood Complaints and Responses
In FY2021, AICA responded as follows to neighborhood complaints received by the AICA Group in Japan.
Location of Occurrence

AICA Kogyo Co., Ltd.
Nagoya Plant
Aikatech Kenzai Co., Ltd.
Nagoya Plant
AICA Kogyo Co., Ltd.
Nagoya Plant

Description

Overview

Careless handling of cigarettebutts in the neighborhood

An employee parked their car on a nearby street after work and behaved carelessly. The relevant person was identified, and reeducation was carried out. A
no-parking sign was also placed near the site.

Late-night noiseContinued maintenance, including repairs to the bearings in the silo, the presumed source of the outbreak.

Noise during installation of
construction scaffolding

Since the work was being performed after the posted allowable time for construction work, the contractor was reminded to complete the work within theestablished time span.

Data Compilation

The AICA Group strives to use water, a finite resource, effectively and makes a point of appropriate water use in all Group
companies. In the Medium-Term Business Plan that began in April 2021, we declared “responding to climate change” as one ofour materialities (material issues) and set targets for “reduction of water use per revenue intensity in high-risk areas,” which is oneof our KPIs. We will strive to optimize water use in those areas after conducting on-site investigations.
Our production sites in Japan use industrial water and underground water, and we are pursuing the cyclic usage of water at
our Nagoya and Jimokuji Plants.
Some of our overseas production sites are located in countries with grave water situations. Each of our business sites is taking the necessary measures and managing its water usage with the recognition that water is a finite resource. With reference to
AQUEDUCT, which is released by the World Resources Institute (WRI), we identify high-risk areas and promote effective use ofwater in those areas as a priority. One example is Aica Laminates India Pvt. Ltd.. Located in the northwest of India, this company
recycles water for use in its manufacturing processes, and treats any waste water for use in gardening.
Targets and Result

Environmental Accidents
FY2023 Target

Water use revenue intensity in high-risk
areas
6% decrease from FY2020

FY2021 Result

24% year-on-year decrease
5.94 m3/million yen

Increase/Decrease Factors

With activities to reduce water usage have significantly reduced usage per revenue intensity, as the increase in net
sales significantly exceeded the increase in usage rate associated with the increase in production volume.

In FY2021, there were no incidents in the domestic AICA Group that had a significant impact outside of the premises, but thefollowing event occurred in April 2022, which was considered an incident. We share information and roll out responses horizontally
across the Group to ensure that no inconvenience is caused to any concerned parties or to the government agencies with jurisdiction.
Location of Occurrence

Nagoya Plant

55

AICA Report 2022

Description

Response

During repair work at the facility, a welding spark
fell into an underground pit beneath it, igniting
combustible materials and causing a small fire.

Clean out the pit, removing combustible materials, and continue
maintenance. Procedures were also modified to ensure thoroughperimeter coverage during welding and increased monitoring of water jets, pits, etc.

AICA Report 2022

56

Foundations of AICA

Additional information about engagement with stakeholders is available on the AICA website.
HOME

Engagement with Stakeholders
Basic Approach to Engagement with Stakeholders

Engagement with Stakeholders

Cultural Activities

As a company that is widely trusted by society, we have instilled in our corporate policy our belief in the importance of fair andhighly transparent compliance management in accordance with the law and social order and in engagement with stakeholders.
Based on this corporate policy, we have a basic policy of disclosing information about the company to all stakeholders in a fair
and timely manner.

Through the supply of high-quality products, we have strived to contribute in some small way to the elevation and development of architectural culture. With the intention of further contributions, we hold the AICA SEMINAR IN CONTEMPORARY
ARCHITECTURE, the AICA DESIGN ACADEMY, and various contests for applications of our products.

Engagement with Suppliers
About AICA

Involvement with Customers

Basic Approach to Engagement with Suppliers

Voluntary Action Guidelines Concerning Product Safety
We believe that the most important challenge in quality management is todeliver safe and reliable products to our customers. To put this into practice,
we have established voluntary action guidelines regarding product safety andstrive to ensure product safety and information disclosure.

Sustainability

https://www.aica.co.jp/company/sustainability/stakeholders/

Product Safety Voluntary Action Guidelines Basic Principles[1] Compliance with laws and regulations[2] Initiatives for ensuring product safety[3] Response to product-related incidents

To fulfill the AICA Group’s corporate social responsibility (CSR), we believe that it is essential that we obtain the understanding
and cooperation of our stakeholders. In our procurement activities, in addition to acting responsibly as the AICA Group, we also
pursue CSR activities with the cooperation of our suppliers.
Based on these ideas, we formulated the “AICA Group CSR Procurement Guidelines” in June 2017, and issued them in April
2022 with partially revised title and content as the “AICA Group Sustainability Procurement Guidelines.” We have obtained theconsent of our suppliers in Japan and overseas to these Guidelines, for the further mutual improvement of our CSR activities.
AICA’s Vision

Communicating with Suppliers
Provision of Product Safety Information
In the midst of ever-increasing concerns about chemicals, including the enforcement of the Revised Building Standards Act,the revision of the standards for school environmental hygiene, and restrictions on chemical substances overseas, our businessoverall is widely involved in these issues.
To fulfill our responsibilities as a member of the supply chain, such as inquiries about new legislation in various countries, andrequests for investigation and provision of information about new chemicals, the relevant departments work together to provide
prompt and more accurate responses.

We have built a strong network to facilitate collaboration with the distributors and builders that handle our products. We haveestablished the AICA Distributors’ Organization as a network of distributors, with which we share product knowledge and sales
and product strategies, and strive for healthy communication between distributors. We have also established separate construction groups for each product sold, through which we share information about improving construction quality and about productimprovement and development.

We have established the AICA Support Center as a direct point of contact with customers who have adopted our products.
We are striving to improve the quality of responses to inquiries, including the introduction of a call center system in FY2018. To
allow us to be of even more assistance, the Center is making efforts to enhance our proposal-making capabilities in collaboration
with the business divisions.

Business Continuity Plan (BCP) in Procurement Activities
To ensure stable supplies even after a disaster or accident, we purchase our main raw materials from multiple suppliers andsites, and ensure that we have alternative options for purchasing. Regarding our own products, we have built production structures at multiple sites and have taken measures to ensure that we maintain a certain level of inventory. We will continue to consider measures to ensure that we can fulfill our supply responsibilities even in the event of a disaster or accident, and implement
various measures as required.

Customer Satisfaction Survey
With the objective of asking our customers to evaluate our products and services, we have conducted a Customer Satisfaction Survey since FY2002. To put the opinions received from our customers to good use in product development and improvement of services, we identify issues from the survey findings, communicate them to the relevant departments after the senior
executives have checked them, and put responses into place.

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AICA Report 2022

58

Data Compilation

AICA Support Center

Foundations of AICA

Collaboration with Distributors and Builders

We held a Purchasing Policy Briefing in June 2019 as a forum for communication
with our suppliers, at which we shared our company policies and purchasing policies.
Further, with the objective of sharing our CSR procurement philosophy and investigating the actual situation, we have conducted self-evaluation questionnaire surveys since FY2018. For the targets of this survey, we selected suppliers that cover
approximately 70% of the total value of AICA Kogyo’s raw materials procurement,with a particular focus on our main suppliers.
Based on the results of this survey, where necessary, AICA Kogyo employees thenconduct an audit (on-site inspection). If any outstanding initiatives are confirmed, we
will learn their methods, and if we encounter matters that require correction, we will At the Purchasing Policy Briefing
provide guidance and instruction to those companies. By continuing with this twoway dialog, we aim for the mutual improvement of our standards.
(Please refer to our website for details on the content and implementation of the survey.)

Foundations of AICA

Additional information about engagement with stakeholders is available on the AICA website.
HOME

Engagement with Stakeholders

Involvement with Shareholders

Engagement with Stakeholders

Engagement with Local Regions and Communities

Ensuring Appropriate Information Disclosure and Transparency

Basic Approach to Engagement with Local Regions and Communities

Communication with Shareholders and Investors

147

Shareholder Returns

In order to improve the educational environment within a limited budget while taking the global environment into consideration,
we have long been proposing the repair of study desktops by overlaying MELATACK, a HPL with pressure-sensitive adhesive, asa repair method. Since the repair can be done by simply overlaying sheets of about 1 mm instead of replacing the top panel itself,
it not only reduces the amount of waste compared to replacing the top panel, but also contributes to fostering an awareness of
the importance of taking care of things. Since this activity is packed with various educational elements, including efforts to address the SDGs, we have begun building an educational program utilizing the refurbishment of school desk tops with MELATACKin collaboration with Sanwa Manufacturing Co., Ltd. which is responsible for the development and distribution of educational
materials and teaching tools for schools, and the All Japan School Materials and Teaching Tools Cooperative Association (JKK).
From December 2021 to March 2022, trials of the program were conducted at seven municipal elementary and junior highschools in Kuki City, Saitama Prefecture. In some schools, the graduation project did more than create memories at the end of
the school year. It also played an educational role as the culmination of learning as the students went about the work with consideration for their younger schoolmates. Kaoru Yanagida, principal of Kuki Kita Elementary School in Kuki City, described her
impressions of the activity: “I am glad that the children were able to create memories this way as events were being canceled
due to COVID-19. It was a very enriching learning experience to see the desks being passed down from one grade to the next,
so that they could be used with care.”Based on the feedback from the educational field that we obtained through this trial, we will create a program that can operatesmoothly while deepening the educational element as we aim to expand the system nationwide.

Data Compilation

External Evaluation
We have been selected for inclusion in the FTSE4Good Index Series and the FTSE
Blossom Japan Index for four consecutive years since we were first selected in 2019 forthese two leading ESG indexes developed by FTSE Russell.

We have been part of the JPX Nikkei Index 400, a stock index developed by the Japan
Exchange Group, Inc., Tokyo Stock Exchange Group and Nikkei Inc., for ten consecutive
years.

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AICA Report 2022

Foundations of AICA

To realize the return of profits to our shareholders and the sustainable growth of the company, we issue dividends with consideration for the consolidated performance of each period, payout ratios, and internal reserves. As a result, through FY2021, we
have increased its dividend for 13 consecutive years and has not reduced it for 24 consecutive years.
Under our Medium-Term Business Plan, “Change & Grow 2400,” our basic policy is to issue shareholder returns in a stable manner, with a target consolidated payout ratio of 50%.
Dividend and Payout Ratio
Internal reserve funds will be used appropriately in considerFY2022
ation of investment efficiency from a long-term perspective.
FY2018FY2019FY2020
FY2021(projected)
This includes prioritizing their use for capital investment for the
expansion of existing core businesses and investments to inPayout Ratio
50.5% 54.4% 64.9% 53.8% 52.5%
crease future corporate value, such as M&As.
Based on this policy, we plan to pay a dividend of 109 yen
Dividend
103 yen 106 yen 107 yen 108 yen 109 yen
per share in FY2022, an increase of 1 yen.

Starting to Build an Educational Program for Learning About SDGs through School
Desk Renovation

AICA’s Vision

Individual Dialogs
with Institutional
Investors During
FY2021

As a company with global operations, the AICA Group values its connections with local regions and communities in both
Japan and overseas. In addition to promoting local employment, we take all complaints made to the company seriously andrespond appropriately when any problems are detected in our business activities.
We continue to conduct activities based on a philosophy of mutual harmony, such as participating in volunteer activities incollaboration with local community action groups, including clean-ups in the areas surrounding our production and sales sites.

About AICA

As a company that is widely trusted by society, we have a basic policy of disclosing information about the company to all
stakeholders at the right time and in the most fair and appropriate manner. We comply with the Companies Act, the Financial
Instruments and Exchange Act, and the rules for timely disclosure prescribed by the stock exchanges on which our shares arelisted, and conduct information disclosure in accordance with our Disclosure Policy.
Even for information that is not covered by the relevant legislation or by timely disclosure rules, if we believe the information to
be important for shareholders and investors to make investment decisions, we will disclose that information, giving consideration
to fairness and timeliness.
Please refer to the Company website (https://www.aica.co.jp/company/ir/) for information disclosure documents.

We take proactive steps, within a reasonable extent, to achieve constructive dialog with our shareholders. Any opinions or other information obtained through such dialog is reported to the Board of
Directors, and we strive to reflect it in future management and IR activities. To obtain their understanding
and appropriate evaluation, in addition to the General Meeting of Shareholders, we hold Financial Results
Briefings for analysts and institutional investors twice a year, at which our Representative Directors provide explanations. Please refer to the Company website for the briefing content and questions. The Public Relations and IR Group responds to requests for individual interviews and telephone press inquiries.
Any information to be disclosed in such cases is approved by a Representative Director and the Officer
responsible for the matter at hand. Briefings for individual investors are also held on an irregular basis.

Sustainability

https://www.aica.co.jp/company/sustainability/stakeholders/

The Virutect series, including MELATACK Virutect, received the Good Design Award in FY2020 for its ability to reduce the number of specific viruses on products
and for its expected long-term effectiveness.

FY2013-FY2022 selection

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60

Data Compilation

11-Year Financial Summary
AICA Kogyo Co., Ltd. and consolidated subsidiaries(Accounting FY)

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Net sales

95,071

101,353

141,096

143,843

150,061

151,633

163,726

191,363

191,501

174,628

214,514[Net sales by segment] *1 Chemical Products

32,56933,59469,31675,081

77,26974,881

82,911109,062

103,945

90,446

122,323

Laminates & Building Materials

56,59062,53967,016

68,762

72,79176,75280,81582,30087,55584,182

92,191

Electronics

5,911

5,219

4,762

—

—

—

—

—

—

—

Operating profit

10,564

12,06914,527

15,181

16,18418,09919,092

20,83420,85017,991

20,348

Ordinary profit

10,771

12,64014,74815,885

16,352

18,374

19,60021,24921,333

18,43821,840

Profit attributable to owners of parent

5,986

7,633

8,221

10,137

9,962

11,064

11,996

13,316

12,732

10,75913,117[Profit by segment] *1 *2 Chemicals

2,154

2,471

4,258

4,673

5,417

6,223

6,537

7,444

8,123

7,109

7,376

9,843

11,32012,16012,602

12,83814,48815,623

16,16915,874

13,751

16,379

581

475

430

—

—

—

—

—

—

—

Capital investment

2,004

2,828

3,829

2,960

2,934

3,876

4,522

7,896

8,487

6,113

7,110

Depreciation

2,514

2,216

2,998

3,100

3,491

3,458

3,569

4,173

4,632

5,683

6,411

R&D expenditure

1,878

2,012

2,146

2,356

2,597

2,672

2,856

3,208

3,454

3,327

3,453

Total assets

102,997

119,301

131,812147,017

153,434

164,634

189,626

191,025

206,439

207,363

240,388

Net assets

76,19185,006

94,389107,226

112,501

119,685

132,616

136,116

146,221150,505

162,734

747

1,342

2,746

3,376

1,898

2,041

5,152

5,298

7,194

7,671

17,059Cash and cash equivalents

30,114

18,981

23,77235,22037,44947,622

48,89645,37940,644

41,18544,997

Cash flow from operating activities

8,402

9,479

11,22813,08014,612

18,331

16,436

13,275

18,24019,713

11,685

Cash flow from investing activities(4,386)(18,312)(4,851)(143)(7,025)(3,269)(7,950)(8,147)(16,798)(9,756)(8,342)

Cash flow from financial activities(2,403)(2,363)(1,950)(1,912)(4,849)(4,587)(7,406)(7,557)(6,210)(9,179)(1,114)

Free cash flow

4,015

(8,833)

6,377

12,936

7,586

15,062

8,485

5,127

1,442

9,957

3,342

Earnings per share (yen)92.78

117.95126.77155.99152.62

169.48183.76203.95195.01164.79200.90Net assets per share (yen)1,166.27

1,263.11

1,405.27

1,581.17

1,654.14

1,759.91

1,880.13

1,936.87

1,994.03

2,064.24

2,223.98

Dividend per share (yen)

34.00

36.00

38.00

43.00

46.00

85.00

92.00

103.00106.00107.00108.00

Payout ratio (%)

37.1

30.8

30.2

27.6

30.1

50.2

50.1

50.5

54.4

64.9

53.8

Overseas sales ratio (%)

6.6

7.2

29.2

33.3

33.2

30.8

33.4

42.0

40.7

42.7

49.2

Operating profit margin (%)

11.1

11.9

10.3

10.6

10.8

11.9

11.7

10.9

10.9

10.3

9.5

Return on equity (ROE) (%)

8.2

9.7

9.5

10.4

9.4

9.9

10.1

10.7

9.9

8.1

9.4

Return on assets (ROA) (%)

6.1

6.9

6.5

7.3

6.6

7.0

6.8

7.0

6.4

5.2

5.9

Net debt-to-equity ratio (times)

0.010

0.016

0.030

0.033

0.018

0.018

0.042

0.042

0.055

0.057

0.124

Equity ratio (%)

73.2

68.6

69.2

70.2

70.4

69.8

64.7

66.2

63.1

65.0

60.4

Japanese naphtha price (yen)54,50055,10065,30069,70046,00032,80040,50051,00042,00033,00050,000Exchange rate (JPY/USD) *3

79.77

79.93

97.11

106.37120.99110.29112.38110.56109.37106.67109.84

Number of new housing starts in Japan (10,000 units)

84.1

89.3

98.7

88.0

92.0

97.4

94.6

95.2

88.3

81.2

86.5

Area of non-residential building starts in Japan (1,000 m2)

47,52252,031

56,43852,612

49,98851,33453,31351,01647,97944,921

48,055

Management Results (million yen)

Electronics

AICA’s VisionInterest-bearing debt

About AICA

Construction Materials

Foundations of AICAPer Share Data

Financial Indicators

Data Compilation

Other Indicators*1: With the sale of the Electronics Business in FY2014, some sections of the Electronics Business were transferred to the Chemical Products Segment from FY2014.
*2: Operating profit before deduction of unallocated operating expenses *3: Annual average

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62

Data Compilation

Non-Financial Data (Environment): Indicators for which third-party assurance was obtained for the values published in this booklet (AICA Report 2022): Indicators for which third-party assurance were obtained in prior years*1: To improve the accuracy of the figures, the figures in the AICA Report 2021 have been retroactively revised.
*2: Please refer to page 53 for details on the Scope 3 breakdown.

Assured by an independent assurance provider
Boundary of Calculation

FY2017FY2018FY2019FY2020

Energy inputs (TJ: Terajoules)

AICA Group

2,429

3,029

1,971

1,939

2,088

   Group in Japan

1,221

1,200

808

758

796

  Group overseas

1,208

1,829

1,163

1,181

1,292

Water withdrawal volume (1,000 m³)

FY2019FY2020

FY2021

AICA Group

3,239

3,334

3,763

3,818

4,098

   Group in Japan

2,241

2,291

2,382

2,384

2,478

998

1,043

1,381

1,434

1,620

AICA Group

2,314

2,385*1

2,468

2,425

2,586

Industrial water (1,000 m )AICA Group

582

143

Municipal water supply (1,000 m3)

AICA Group

343

806

  Group overseas
Ground water (1,000 m3)
3

Atmospheric Emissions

GHG emissions
Scope 2 (t-CO2)

AICA Group

54,68469,35363,933

61,24365,337   Group in Japan

34,71834,57032,16730,60831,731  Group overseas

19,96634,78331,76630,63533,605

AICA Group

66,466

81,91685,26982,39490,396   Group in Japan

29,66828,562

27,83823,00023,558  Group overseas

36,79853,35457,431

59,394

66,838Group in Japan

479,442*1

510,889

Category 1

Group in Japan

358,145*1

391,915

Category 5Group in Japan

5,062*1

5,725

Category 12

Group in Japan

75,069*1

83,911

Total of all other categories*2

Refer to calculation criteria

41,16629,338*1Group in Japan

5.9

5.4

5.3

5.9

6.1

NOx (tonne)

Group in Japan

27.3

25.4

26.9

31.9

27.7

Soot and dust (tonne)

Group in Japan

2.5

3.7

9.4

9.3

1.9

Substances subject to PRTR (VOC
atmospheric emissions) (tonne)

Group in Japan

56.6

56.5

52.1

53.6

55.7

Substance inputs (tonne)

Group in Japan

257,770317,041

305,457

247,158

277,979

Raw materials (tonne)

Group in Japan

241,096

279,580

284,565

231,117

261,650

Use of Substances

Ancillary materials (tonne)
Containers and packaging materials(tonne)Substances subject to PRTR (tonne)

Group in Japan

575

625

629

538

593

Group in Japan

10,392

31,555

15,147

11,576

11,225

Group in Japan(40,115)(30,274)(40,582)(25,458)(15,023)

237,756

255,093

268,552

216,818

Total wastewater discharged (1,000 m³)Group in Japan

─

─

─

1,908

1,981

COD (tonne)

Group in Japan

39.5

22.3

11.8

31.2

3.3

Nitrogen (tonne)

Group in Japan

10.2

15.8

5.6

11.7

1.2

Phosphorous (tonne)

Group in Japan

3.9

3.3

6.9

6.1

0.5

Substances subject to PRTR (tonne)

Group in Japan

0.4

0.5

0.6

0.5

0.5

Boundary and Criteria for Calculation of Environmental Indicators• Target boundary
The target boundary of each category is clearly stated. The breakdown of business sites is as follows.
Group in Japan: All production sites of AICA Kogyo Co., Ltd., AICA Interior Kogyo Co., Ltd., AICA Harima Kogyo Co., Ltd., and AICA TECH KENZAI CO., LTD.
Group overseas: All production sites of PT. AICA Indonesia, PT. Techno Wood Indonesia, Aica Laminates India Pvt. Ltd., Aica Laminates Vietnam Co., Ltd., AICA Asia Pacific
Holdings Group, Evermore Chemical Industry Group, and Wilsonart companies
AICA Group: All production sites of the AICA Group in Japan and overseas• Energy use
Energy input is calculated by multiplying the amount of fuel used by the calorific value of each fuel. (For unit calorific values, we used the Ministry of the Environment’s Calculation
Methods and List of Factors for Calculation, Reporting, and Publication Programs.) Electricity was calculated as 1 kWh = 3.6 MJ, and steam was calculated by converting theamount of energy due to steam quality according to the purchased quantity.
• Greenhouse gas emissions– For Scope 1 and 2 calculations, we calculated the energy-derived CO2 emission/non-energy-derived GHG emission volumes based on the Ministry of the Environment/
Ministry of Economy, Trade and Industry’s Greenhouse Gas Emissions Calculation and Reporting Manual (Ver.4.8). For electric power emissions factors, we used theadjusted emission factors for general transmission and distribution companies from the List of Emissions Factors by Power Supplier (For 2022 Submission) (Ministry of theEnvironment/Ministry of Economy, Trade and Industry) for Japanese sites. For overseas sites, we used finalized values from the International Energy Agency’s (IEA) Emissions
Factors (2021).
– Scope 3 calculations were made in line with the Basic Guidelines for Calculation of Greenhouse Gas Emissions Throughout the Supply Chain (Ver. 2.4) published by the
Ministry of the Environment. The details of calculation methods for each category are as described below. Emissions factors are taken from these Guidelines unless otherwise
stated in the following.
Category 1:

Heat recovered (thermal recycling) (tonne)

Group in Japan

17,572

16,445

17,203

12,224

13,723Category 2:

Target boundary: AICA Kogyo Co., Ltd. non-consolidated
Amount of capital investment in the reporting year multiplied by theemissions factor.

Category 3:

Target boundary: Group in Japan
Power and fuel volumes purchased during the reporting year, multiplied by the emissions factor. (For fuels, emission factors at the timeof the study were used from the LCI database IDEA version 2.3, in
accordance with the guidelines.)

Industrial Waste Emissions
28,59130,46342,651

27,29830,996

Group in Japan

24,593

26,56036,04020,784

23,665

Group overseas

3,998

3,903

6,611

6,514

External recycling (tonne)

Group in Japan

22,04525,836

Landfill disposal (tonne)

Group in Japan

2,195

Substances subject to PRTR (amount ofwaste transferred) (tonne)

Group in Japan

11.7

AICA Group
Industrial waste emission volumes(tonne)7,331

24,70819,376*1

22,395589

11,3091,399*1

1,269

13.1

15.1

12.6

12.9

Target boundary: Group in Japan
Weight or value of raw materials, products, etc. purchased in thereporting year multiplied by the emissions factor. For emissions
intensity, we used either (1) the LCI Database IEDA version 2.3(National Institute of Advanced Industrial Science and Technology[AIST], Safety Science Research Division Research Group for Society
and LCA, and the Sustainable Management Promotion Organization[SuMPO]) or (2) Emissions Intensity Database for Calculation of Organizations’ Greenhouse Gas Emissions, etc. Throughout the Supply
Chain (Ver. 3.2) (Ministry of the Environment), depending on the item
being calculated. For items produced at some of our plants, we calculated raw materials usage based on production volumes. Items
that encompass 90% of total purchased raw materials in weight orvalue base are included in the calculation, although items with minutepurchase volumes are excluded.

241,778In-house Recycling of Waste

306

Category 4:

Target boundary: AICA Kogyo Co., Ltd. non-consolidated
Calculated based on tonne-km of logistics (transportation, cargohandling, and storage) for the reporting year in which AICA Kogyo
Co., Ltd. was the shipper

Category 5:

Target boundary: Group in Japan
Industrial waste emission volumes during the reporting year, multiplied by the emissions factor.

Category 6:

Target boundary: AICA Kogyo Co., Ltd. non-consolidated
Travel expenses during the reporting year, multiplied by the emissions
factor.

Category 7:

Target boundary: AICA Kogyo Co., Ltd. non-consolidated
Commuting subsidy expenses during the reporting year, multipliedby the emissions factor.

Category 8:

Lease assets are minor and have been excluded from calculations.

Category 9:

Due to the prohibitive difficulty of ascertaining the delivery of all goods
for which the company is not the shipper, these could not be calculated. When the company acts as the shipper and delivers the
product to the customer, the consequent emissions are included in
Category 4.
Identified as relevant, but emissions have not been calculated due tothe difficulties of calculating emissions for the individual processes ofour many and diverse products.

Category 10:

Category 11:

No GHGs are emitted in the use of our products.

Category 12:

Target boundary: Group in Japan
Calculated by multiplying weight of products sold during the reporting year by the emissions factor allocated for each product category.
For some products that include volatile substances, product weightexcluding the weight of those volatile substances was substituted for
calculation purposes.

Category 13:

Power use accompanying use of leased buildings during the reporting year, multiplied by emissions factor.

Category 14:

No applicable business operations.

Category 15:

Some company funds are invested, but the percentage of our shareholdings in each investee company is slight and has a negligible impact on business activities, so this category has been excluded from
calculations.

AICA Report 2022

Data Compilation

Group in Japan

1,206

287*1

Released into Waterways

Product Shipment
Product shipment volumes (tonne)

1,106

1,123

Foundations of AICA

SOx (tonne)

172

*1

AICA’s Vision

GHG emissions
Scope 3 (t-CO2)*1

About AICA

GHG emissions
Scope 1 (t-CO2)

AICA Report 2022

FY2018Use of Water Resources

Energy Use

63

FY2017

Boundary of Calculation

FY202164

Data Compilation

Third-Party Assurance

Non-Financial Data (Human Resources and Labor)

Scope of Calculation

FY2017FY2018FY2019FY2020

FY2021

Employment (as of end of fiscal year unless otherwise indicated)
3,850

3,920

4,781

4,796

4,949

Employees [Non-consolidated]*1

AICA Kogyo Co., Ltd.

1,175

1,194

1,239

1,228

1,211

Male

AICA Kogyo Co., Ltd.

993

991

1,026

1,011

1,002

FemaleAICA Kogyo Co., Ltd.

182

203

213

217

209

Number of non-regular employees

AICA Kogyo Co., Ltd.

166

234

248

239

243

Percentage of non-regular employees

AICA Kogyo Co., Ltd.

12.3%

16.3%

16.6%

16.2%

16.7%

Number of new-graduate recruits*2

AICA Kogyo Co., Ltd.

54

61*9

36

21

31

Male

AICA Kogyo Co., Ltd.

38

49*9

28

18

23

FemaleAICA Kogyo Co., Ltd.

16

12

8

3

8

AICA Kogyo Co., Ltd.

18

27

14

15

21

AICA Group

23

24

28

31

28

AICA Kogyo Co., Ltd.

21

22

24

26

25

AICA Group

0.6%

0.6%

0.6%

0.6%

0.6%

AICA Kogyo Co., Ltd.

2.26%

2.26%

2.35%

2.66%

2.47%

AICA Kogyo Co., Ltd.

15.5

15.4

15.5

16.1

16.5

Male

AICA Kogyo Co., Ltd.

16.0

16.0

16.1

16.6

16.8

FemaleAICA Kogyo Co., Ltd.

12.8

12.5

12.8

13.7

14.6

Staff turnover rate*6

AICA Kogyo Co., Ltd.

2.26%*93.39%*92.91%*92.44%*9

2.56%

Staff turnover rate after 3 years*7

AICA Kogyo Co., Ltd.

8.7%*9

16.1%

16.1%

17.5%

8.8%

80.5%

80.4%

80.9%

80.7%

79.9%

Newly engaged employees under there-employment scheme

Number of employees with disabilities
Percentage of employees with disabilities*3

Statutory employment rate of people with disabilities*4

AICA’s Vision

AICA Group

About AICA

Employees [Consolidated]*1

Years of Service (as of end of fiscal year unless otherwise indicated)
Average years of service*5

Foundations of AICA

Union Membership (as of end of fiscal year)
Rate of union membership

AICA Kogyo Co., Ltd.

Paid Leave Utilization*8

AICA Kogyo Co., Ltd.

Average days taken

AICA Kogyo Co., Ltd.

10.3 days

11.3 days

12.1 days

10.3 days

11.8 days

Average rate of leave taken

AICA Kogyo Co., Ltd.

56.0%

61.7%

66.7%

55.9%

63.6%
Data Compilation

State of Industrial Accidents
Fatal accidents

Group companies in Japan

0

0

0

0

0

Lost-time accidents

Group companies in Japan

7

6

7

6

5

 Of which, those involving people other thanfull-time employees

Group companies in Japan

3

6

4

4

2

Non-lost-time accidents

Group companies in Japan

10

12

13

6

12

 Of which, those involving people other thanfull-time employees

Group companies in Japan

4

7

6

1

4

*1 Excludes temporary workers (non-regular employees).
*2 Graduates of high school, university, and graduate school. Number of new recruits joining in
April of following fiscal year.
*3 Obtained by dividing the number of employees with disabilities by the total number of
employees. This differs from the calculation method for the statutory employment rate.
*4 Calculated according to the method for the statutory employment rate.
*5 Figures are for permanent employees.

65

AICA Report 2022

*6 Calculated by dividing the number of employees who resigned for personal reasons eachfiscal year by the number of employees at beginning of that fiscal year.
*7 Calculated for graduates of university and graduate school.
*8 Target periods: FY2017 or before FY2017: September 16 of previous fiscal year to September 15 of current fiscal year; From FY2018: March 16 of previous fiscal year to March 15 ofcurrent fiscal year.
*9: To improve the accuracy of the figures, the figures in the AICA Report 2021 have been
retroactively revised.

AICA Report 2022

66

Data Compilation

AICA Group Network(As of end-Aug. 2022)▶ North ▶
America
North America▶ East Asia
▶ East Asia

ChemicalChemicalproductsproducts
SegmentSegment
Sales
Sales
Aica Guangdong
Aica GuangdongCo., Ltd. ManufacturingCo., Ltd. Manufacturing
Sales
Sales
Aica Nanjing
AicaCo.,NanjingLtd. ManufacturingCo., Ltd. Manufacturing

KUNSHANKUNSHANAICA KOGYOAICACO.,
KOGYO
LTD. CO., LTD.
Manufacturing
Manufacturing
Sales
Sales

ShenyangShenyang
AICA-HOPE
AICA-HOPE
KOGYO Co.,
KOGYO
Ltd. Co., Ltd.

Laminates
Laminates& Building& Building
MaterialsMaterials
SegmentSegment

ChemicalChemical
ProductsProducts
SegmentSegment
Sales Inc. Sales
AICA America,
AICA Inc.
America,

Wilsonart Wilsonart(Shanghai)(Shanghai)Co., Ltd. Co., Ltd.
Manufacturing
Manufacturing
Sales
Sales
J AICA Interior
J AICA
Kogyo
Interior
Co.,
Kogyo
Ltd. ManufacturingCo., Ltd. Manufacturing

Wilsonart Wilsonart
Asia Limited
AsiaSales
Limited Sales
AICA Taiwan
AICA
Co.,
TaiwanLtd. Sales
Co., Ltd. Sales

Manufacturing
Manufacturing
Sales
Sales

Aica Shanghai
Aica Shanghai
Co., Ltd. Sales
Co., Ltd. SalesJ SOKO Service
J SOKO
Co.,
ServiceLtd. Co., Ltd.
Replenishment
Replenishment
and transportand transport

Manufacturing
Manufacturing
Sales Holding
Sales
company
Holding company▶ South ▶
Asia
South Asia

A Fukushima
A Fukushima
Plant Manufacturing
Plant Manufacturing

Manufacturing
Sales
Sales
POU CHIENPOU
CHEMICALCHIEN CHEMICAL
CO., LTD. CO.,LTD. Manufacturing
SalesLTD. Sales
LEADERSHIPLEADERSHIP(SHANGHAI)(SHANGHAI)
CO., LTD. CO.,ChemicalChemicalproductsproducts
SegmentSegment

SalesLTD. Sales
TOPCO (SHANGHAI)
TOPCO (SHANGHAI)
CO., LTD. CO.,

Sales
Sales
DYNEA PAKISTANDYNEA PAKISTAN
Limited Manufacturing
Limited Manufacturing

CHEM-MAT
CHEM-MATTECHNOLOGIESTECHNOLOGIESCO., LTD. CO., LTD.
Manufacturing
Manufacturing
Sales
Sales

Laminates
Laminates& Building& Materials
Building Materials
BusinessBusinessGIANT STAR
SalesLTD. Sales
GIANT
TRADING
STAR TRADING
CO., LTD. CO.,J AICA TECHJ AICA
Manufacturing
KENZAITECHCO.,KENZAI
LTD. CO.,LTD. Manufacturing(Ichikawa (Ichikawa
Plant)
Plant)A

J AICA TECHJ AICA
Manufacturing
KENZAITECHCO.,KENZAI
LTD. CO.,LTD. Manufacturing

Manufacturing
Isesaki APlant
IsesakiPlant Manufacturing

J AICA Harima
J AICA
Kogyo
HarimaCo.,
KogyoLtd. Co., Ltd.

About AICA

EVERMORE
EVERMORE
CHEMICALCHEMICALINDSUTRYINDSUTRY
CO., LTD. CO., LTD.

A Tanba Plant
A Tanba
Manufacturing
Plant Manufacturing(Akeno Plant)(Akeno Plant)

A Ibaraki A
Manufacturing
Plant
IbarakiPlant Manufacturing

Manufacturing
Manufacturing

J AICA Interior
J AICA
Kogyo
Interior
Co.,
Kogyo
Ltd. ManufacturingCo., Ltd. Manufacturing

Aica Laminates
Aica Laminates
India Pvt. India
Ltd. Pvt. Ltd.
Sales
Sales
Manufacturing
Manufacturing
A Hiroshima
A Hiroshima
Plant Manufacturing
Plant Manufacturing

J Nishi Tokyo
J Nishi
Sales
Sales
ChemixTokyoCorporation
Chemix Corporation

J AICA TECHJ AICASales
KENZAITECHCO.,KENZAI
LTD. (HeadCO., LTD.
Office)(Head
Office) Sales

AICA’s Vision

J AICA-TECHJ AICA-TECH
Engineering
Engineering
Co., Ltd. Application
Co., Ltd. Application

AICA Kogyo
AICACo.,Kogyo
Ltd.Co.,
Head
Ltd.
Offi
Head
ce OfficeA

Manufacturing
NagoyaAPlant
NagoyaPlant Manufacturing

A

Manufacturing
JimokujiA Plant
Jimokuji
Plant Manufacturing

Foundations of AICAJ AICA TECHJ AICA
Manufacturing
KENZAITECHCO.,KENZAI
LTD. CO.,LTD. Manufacturing(Nagoya Plant)(Nagoya Plant)▶ Southeast▶ Southeast
Asia
Asia

ChemicalChemicalproductsproducts
SegmentSegmentcompany
Holding company
AICA AsiaAICA
PacifiAsia
c HoldingPacificPte.
HoldingLtd. Holding
Pte. Ltd.

Manufacturing
Sales
Sales
AICA HATYAI
AICA
CO.,
HATYAI
LTD. CO.,LTD. Manufacturing
Sales
Sales
Thai Chemical
Thai Chemical
Corporation
Corporation
Ltd. Manufacturing
Ltd. Manufacturing
Sales
Sales
AICA DongAICA
Nai DongCo., Ltd.
Nai ManufacturingCo., Ltd. Manufacturing
Manufacturing
Sales
Sales
AICA Adtek
AICA
Sdn.
Adtek
Bhd.Sdn.
Bhd. Manufacturing
Manufacturing
Sales
Sales
AICA Malaysia
AICA Sdn.
Malaysia
Bhd.Sdn.
Bhd. Manufacturing

HoldingSales
company
Holding company
AICA AsiaAICA
Laminates
Asia Laminates
Holding Co.,
HoldingLtd. Sales
Co., Ltd.
Sales
Sales
Wilsonart Wilsonart(Thailand) (Thailand)Company Company
Limited Manufacturing
Limited Manufacturing

LegendSales
Sales
Aica Laminates
Aica Laminates
Vietnam Co.,
VietnamLtd. ManufacturingCo., Ltd. Manufacturing
Sales
Sales
AICA HPLAICA
Trading
HPL
Joint
Trading
Stock
Joint
Company
Stock Company
Manufacturing
Manufacturing
Sales
Sales
PT. AICA Indonesia
PT. AICA Indonesia
Manufacturing
Manufacturing
Sales
Sales
PT. TechnoPT.
Wood
TechnoIndonesia
Wood Indonesia▶ Oceania▶ Oceania

ChemicalChemical
ProductsProducts
SegmentSegment

LegendChemicalChemical
ProductsProducts
Segment:
Segment:
Laminates
Laminates& Building& Building
MaterialsMaterials
Segment:
Segment:

Sales
Sales
AICA NZ Limited
AICA NZManufacturing
Limited Manufacturing

Sales
Sales
AICA Singapore
AICA Singapore
Pte. Ltd. Manufacturing
Pte. Ltd. Manufacturing

AICA Asia AICA
PacificAsia Pacific

Sales
Sales
PT. AICA INDRIA
PT. AICAManufacturing
INDRIA Manufacturing

Holdings Group
Holdings Group

Manufacturing
Manufacturing
Sales
Sales
PT AICA MUGIPT AICAINDONESIAMUGI INDONESIA

Evermore ChemicalEvermore Industries
Chemical Group
Industries GroupTop Well Elastic
Top WellTechnology
Elastic Technology
Co., Ltd. Sales
Co., Ltd. Sales
U-BEST VIETU-BESTNAMVIETPOLYMERNAM POLYMER
INDUSTRYINDUSTRY
CO., LTD. CO., LTD.
Manufacturing
Manufacturing
Sales
Sales

NISHI TOKYONISHICHEMIXTOKYOVIETNAMCHEMIX VIETNAMCOMPANYCOMPANY
LIMITED Sales
LIMITED Sales

67

AICA Report 2022

Data Compilation

Sales
Sales
Aica Bangkok
Aica Co.,
BangkokLtd. ManufacturingCo., Ltd. Manufacturing

LaminatesLaminates& Building& Materials
Building Materials
Segment Segment

AA

A AICAAICAA Kogyo
Production
Kogyo Production
sites
sites

AICA Kogyo
AICA
Sales
Kogyo
Locations
Sales LocationsJ

J GroupJ Companies
J Group Companies
in Japan in Japan

AICA Report 2022

68