Contents
President’s Message
09 	E stablish Foundations for

Sustainable Growth

Measures to Reinforce
the Operating Foundations
29	Measures to Reinforce
the Operating Foundations
31	Environment
37	Human Resources

Profile41	Corporate GovernanceCorporate Information

03	Corporate Philosophy andManagement Policies

63	Consolidated Financial and
Non-Financial Highlights

05	Fuji Electric’s Energy andEnvironment Businesses

65	Corporate Data

Growth Strategy

66	History

07 Value Creation at Fuji Electric
13	Progress of Management Reforms
14	FY2023 Medium-Term Management Plan
“Reiwa Prosperity 2023”
15	Fiscal 2019 Review of Operations
17	Review of Segments	Power Electronics Systems

Round-table discussion among Outside Officers

53	Compliance55	Risk Management
60	Supply Chain
62	Social Outreach	Energy/Industry
23	Electronic Devices
25	Food and Beverage Distribution
27	Power Generation

Regarding the Fuji Electric Report
Editorial Policy

Information Disclosure Venues

About the Front CoverDisclaimer Regarding Forward-Looking Statements

Fuji Electric Report is an important communication tool that is prepared

Fuji Electric Report includes highlights of financial information as well

Fuji Electric aims to contribute to achieving the SDGs through its

Statements made in this report regarding estimates or projections are

and published for the purpose of facilitating understanding of theas non-financial information pertaining to social and environmental andenergy and environment businesses. The front cover of this reportforward-looking statements based on the Company’s judgments andCompany’s corporate activities among its shareholders, investors, andgovernance issues. More detailed financial information can be foundreflects Fuji Electric’s attitude towards achieving the SDGs through its

assumptions in light of currently available information. Actual results

various other stakeholders.

in the Company’s financial results summaries and securities reports

four businesses working together as one.

may differ materially from those projected as a result of uncertainties(Japanese only) on its investor relations website. Additional non-inherent in such judgments and assumptions as well as changes

initiatives to create medium- to long-term value and key issues on thefinancial information is available in the form of detailed explanations ofin business operations or other internal or external conditions.

environment, society, and governance.

Fuji Electric’s social and environmental initiatives and governance on

Accordingly, the Company gives no guarantee regarding the reliability

the Company’s corporate website.

of any information contained in these forward-looking statements.

Fuji Electric places great importance on clear communication of its

Covered Organizations
In this report, Fuji Electric collectively refers to Fuji Electric Co., Ltd. andits consolidated subsidiaries in Japan and overseas.

1

Fuji Electric Report 2020

Investor Relations Website:
https://www.fujielectric.com/ir/
 nvironmental, Social, and Governance Website:Ehttps://www.fujielectric.com/company/csr/

Investors are encouraged to also reference documents submitted
by the Company in accordance with the Financial Instruments andExchange Act of Japan and other disclosure materials.

Fuji Electric Report 20202

Profile

Corporate Philosophy and Management Policies
Corporate Philosophy

Fuji Electric’s corporate philosophy hinges on a mission to contribute to prosperity, encourage creativity,and seek harmony with the environment, while the Company’s management policies are centered on
the notion of contributing to society through its energy and environment businesses.

We, Fuji Electric, pledge as responsible corporate citizens in a global society to

By putting this corporate philosophy and management policies into practice based on its Corporate

strengthen our trust with communities, customers and partners.

Code of Conduct, which sets forth guidelines for the conduct of employees, Fuji Electric and its employees,
together with customers and business partners, will aim to resolve social and environmental issues,

Contribute to prosperity

create customer value, achieve the SDGs, and contribute to the creation of a responsible andsustainable society.

SloganSeek harmony withthe environment

Encourage creativity

To be enthusiastic, ambitious and sensitive.

Management Policies
1. Through our innovation in energy and environment technology, we contribute to
the creation of a responsible and sustainable society.
2. Achieve further growth through our global business expansion.

The Creation of a Responsible and Sustainable Society

3. Maximize our strengths as a team, respecting employees’ diverse ambition.

Fuji Electric Code of Conduct

Resolution ofSocial andCreation ofEnvironmental

Customer Value

IssuesIn order to practice our corporate philosophy to fulfill social responsibility and act with high ethicalstandards while understanding and complying with relevant laws, regulations, international rules, andthe spirit of such regulations and rules, both domestically and abroad, Fuji Electric and its employees
have defined this code as a foundation for decision-making and behavior.

Corporate Philosophy

1

Respect and value all people

6

Respect and value interaction with society

2

Respect and value our customers

7

Make global compliance a top priority

3

Respect and value our business partners

4  Respect and value our shareholders

and investors
5

Contribute to prosperity

Encourage creativity

7 -1

Thorough compliance

7 -2

Thorough risk management

8  Top management will thoroughly practice

Respect and value the global environment

this standard

Seek harmony withthe environment

Brand Statement

Management Policies
Fuji Electric’s Energy and Environment Businesses

Brand Promise

Through our pursuit of innovation in electric and thermal energy technology,

Fuji Electric Code of Conduct

we develop products that maximize energy efficiency and lead to a responsible
and sustainable society.

3

Fuji Electric Report 2020

Fuji Electric Report 2020

4

Global warming
and frequent
occurrence of
natural disasters

Social andEnvironmental
Problems

Numerous changes are taking place in the environment that envelops Fuji Electric, including global
warming, the frequent occurrence of natural disasters, problems surrounding resources and energy,

Resources andenergy problems

Aging industrial
and social
infrastructure

Increasingly
informationoriented society(IoT, AI, etc.)

ProfileFuji Electric’s Energy and Environment Businesses
Demographic
changes driven
by an aging
population

and aging industrial and social infrastructure.
We will ceaselessly pursue synergies between our core power semiconductor and power electronics
technologies and combine high-quality equipment employing key devices with our engineering services,

Priority SDGs

optimal control technologies, and IoT know-how honed thus far. In this way, we aim to help solve issues forcustomers in industrial and social infrastructure fields, address social and environmental problems,and contribute to the achievement of a sustainable society.

Value Created

Clean energy

Stable supply of energy

Automation

Four Businesses

Power Generation

Power Electronics Systems
EnergyPower Electronics Systems
Industry

Five Segments

Automation
Energy saving

Energy saving

Electronic
Devices

Food and Beverage
Distribution

Business Fields
Power and new energy

Energymanagement

Power supply andfacility systems

Optimal Control
Technologies

ED&C
components

Socialsolutions

Factory automation

SystemSolutions

Engineering

Services

Semiconductors

Vending
machinesStore
distribution

IoT

Components
Smart meters

Key Devices

Uninterruptible
power systems

Transformers

Magnetic
switches

Molded-casecircuit breakers

Inverters

MotorsWorld-leading power semiconductors
for regulating electricity

Servo systems

Controllers

Measuring instruments

Sensors utilizing various applied technologies that
underpin safe operations
Power semiconductors

Sensors

Internet of Things (IoT): A new framework for fundamentally revolutionizing business and lifestyles by connecting
various objects to networks and enabling them to achieve optimal, autonomous control of one another.

5

Fuji Electric Report 2020

Fuji Electric Report 20206

Profile

Value Creation at Fuji ElectricEver since our establishment in 1923, Fuji Electric has been an innovator of electric and thermal energy

saving. Going forward, we will continue to address the energy and environmental issues of our customers

technologies. By capitalizing on the technology with which we can wield control—i.e., creating, measuring

by leveraging the technological and engineering capabilities we have honed thus far together with our(sensing technologies), controlling (control technologies), converting (power electronics technologies), andextensive track record of deliveries to a broad range of customers.

optimizing electricity—we contribute to clean energy, stable supply of energy, automation, and energy

Clean energy

Stable energy supply

StablesupplyCO2
reductionsHighefficiency

All-inclusive provision of highly
reliable and highly efficientelectric equipment for data
centers, from system design
through to installation andmaintenance services

Muara Laboh Geothermal Power Plant in Indonesia
Power generation capacity equivalent to the power usage of
420,000 households on the Indonesian island of Sumatra(Source: Sumitomo Corporation website)

Fuel cells

Approx.

Approx.

Approx.

thousand t-CO2

thousand t-CO2

5,000

thousand t-CO2

1,000

50

Boasting the leading global share*2 in geothermal power generation, an
extensive domestic delivery track record in hydro power generation andsolar power generation systems, and the first-ever commercialized fuelcells for industrial application, we deliver a whole host of clean energy
sources and contribute to the local production and local consumption ofenergy from distributed power sources. We also have the equipment andsystems capable of achieving optimum operation of renewable energy,
and we contribute to the effective utilization of energy by harnessing thepower supply/demand prediction technology and know-how cultivatedthrough numerous demonstration projects.
Key
delivery trackrecord• Geothermal power generation: 85 units (approx. 3.2 GW)• Hydro power generation: 444 units (approx. 5.2 GW)• Fuel cells: 99 unitsKey
demonstration
projects•M icrogrid system for isolated islands (six islands in
Kagoshima Prefecture; three islands in Okinawa Prefecture)• Industrial parks (India, Indonesia)• Kitakyushu, Fukuoka Prefecture• Soma IHI Green Energy Center (Soma, Fukushima Prefecture)

Never
stops
We delivered an assembly process data collection system to thevariable compression ratio engine (VC-Turbo) production line of
Nissan Motor Co., Ltd. Data from each process
is collected automatically.

This system is capable of achieving a production line that never stops
through cause analysis for problems with their production equipment andgeneration of defects. We help customers make quality and productivity
improvements in automated production lines by providing a single
package for collecting and analyzing various data, such as temperature,pressure, vibration, operation, and quality information.

CO2 reductions (FY2019)*

1

Hydro power
generation

Energy saving

The OnePackEdge assembly process datacollection system contributes to productivity
improvements through cause analysis forproblems with their production equipment
and generation of defects.

Large-capacity UPS.
Highly efficient and compact.

Geothermal
power generation

Automation

StablesupplySubstation equipment

Environmentally friendly C-GIS(Gas-insulated switchgear)

Key
delivery trackrecord• Substation equipment:
Transformers: 2,450 units or more;
Switchgear: 11,000 units or more
• Large-capacity rectifier transformers: Approx. 27.5 GW

We delivered main power
converters equipped witha next-generation power
semiconductor (SiC) for
Central Japan Railway
Company’s latest highspeed rail model, thus
lightening the weight ofCompared with Si, SiC power
the railcars.
semiconductor modules
contribute to a 30% reduction
in CO2 emissions caused bypower loss.

Labor
savingGHG
reductions

We contribute to the stable supply of energy for customers in various
industries mainly with uninterruptible power systems (UPSs) for data
centers, large-capacity rectifier transformers (top global share) for nonferrous metals, and substation equipment for steel, chemicals, electricalmachinery, precision equipment, and railway industries. We also contributeto the prevention of global warming by providing environmentally friendly
cubicle-type gas-insulated switchgear (C-GIS) products that help reducegreenhouse gas (GHG) emissions without the use of SF6 gas.

CO2
reductions

Showcase side

Vending machine side

Convenience stores are currently struggling to secure enoughmanpower. We contribute to labor saving by offering two-way casesthat function as a showcase when the store is open and as a vending
machine after hours, as well as automatic change dispensers for selfcheckout registers.

Powersemiconductors

Approx.

5,000

thousand t-CO2

CO2
reductions
We delivered a set of around
700 inverters to Singapore’s
Outram Community Hospital.
The inverters control thefans and pumps used for air
conditioning and ventilation
to optimize airflow and water
consumption, saving energies.

Two-way case

CO2 reductions (FY2019)*1

The FRENIC-HVAC low-voltage inverter is the first in theindustry to be accredited as environmentally friendly bya third-party organization (UL/EPD).

CO2 reductions (FY2019)*1

Low-voltage
inverters

Approx.

1,800

thousand t-CO2

Power semiconductors efficiently control electricity. They are mounted
inside power electronics systems, such as inverters that control motor
rotation, thereby contributing to energy saving in industrial equipment
and factories. In the power semiconductors industry, Fuji Electricranks third in terms of the global share of IGBT modules for industrial
applications and commands the top share of inverters in Japan.

*1 CO2 reductions (FY2019) are based on 12 months of operation for products delivered between FY2009 and FY2019   *2 Since 2000

7

Fuji Electric Report 2020

Fuji Electric Report 20208

President’s Message

FY2019 Sales and Income Down, but Still Investing in Future Growth
capacity for power semiconductors for electrified vehicles (xEVs).

Plan—Reiwa Prosperity 2023—which calls for net sales of ¥1.0

As was the case previous year, we decided to pay a dividend oftrillion and an operating margin of 8% or more by fiscal 2023, the¥80 to shareholders and the same level of bonuses to employees.

final year of the plan. The plan incorporates our aim to achieve

The decision to keep shareholder returns and employee bonuses

prosperity with society through our energy and environment

unchanged owes to nothing more nor less than stronger

businesses. We have also positioned the power electronics

profitability and steady improvements in our financial position eversystems and power semiconductor businesses as growth drivers

since operating income slipped into the red in the aftermath of thethrough fiscal 2023.

global financial crisis. This has been achieved mainly thanks to

Looking at fiscal 2019 consolidated results, both sales andPresident’s Message

Establish Foundationsfor Sustainable GrowthIn fiscal 2019 we kicked off our Medium-Term Managementbusiness restructuring, including the abolishment of the holding

income declined sharply owing mainly to the lingering impact ofcompany system and integration of business management,

US-China trade friction since last year, as well as the effects ofclarification of business domains, and the realignment oftravel restrictions and temporary factory closures in response

production bases, as well as a strict adherence to local production

to the spread of the COVID-19 pandemic. Net sales decreased

for local consumption, the strengthening of manufacturing¥14.3 billion year on year to ¥900.6 billion, operating income

capabilities, and a change in mindset among employees. Whatfell ¥17.5 billion to ¥42.5 billion, and net income attributable tois disappointing, however, is the occurrence of some productowners of parent shrank ¥11.5 billion to ¥28.8 billion. However,defects. Product quality is the basic premise for earning the trust

despite the tough operating environment, we continued to invest

and confidence of our customers and we will adopt thoroughin future growth; in our focus region of Southeast Asia, we laidmeasures to prevent the recurrence of such issues.

the foundations for business growth by erecting a third building at
Michihiro Kitazawa
President and Chairman of the Board of Directors

our factory in Thailand for manufacturing switchgear and control
gear systems, while in India we acquired a leading power supply
Net Sales

914.9

900.6

1,000.0

FY2023 Medium-Term Management Plan Key Issues

Operating Income

60.0

42.5

80.0

Operating Margin

6.6%

4.7%

8.0%

Net Income Attributableto Owners of Parent

40.3

28.8

55.0

Promote Growth Strategies

Further Improve Profitability• Concentrate resources on
growth fields(power electronics systems
and power semiconductors)• Augment global manufacturing
capabilities

Ongoing Reinforcement of Operating Foundations
Environment

9

FY2023Medium-Term
Management Plan
(Target)(Billions of yen)

• Expand overseas businesses

First of all, I express my heartfelt sympathy to those afflicted by the

FY2019Results

manufacturer. We also invested in the expansion of production

Establish Foundations for Sustainable Growth

Human Resources

Governance

Evolution of Companywide Pro-7 Activities

Fuji Electric’s Reason for Existence in Society

FY2018Results

Financial Indicators
Net Debt-to-Equity Ratio*

0.4 times

0.4 times

0.1 times

Equity Ratio

37%

37%

50%

ROA (Return on Assets)

4%

3%

5%

ROE (Return on Equity)

12%

8%

11%

Dividend Payout Ratio

28%

40%

30%

*1 Net interest-bearing debt / Shareholders’ equity*2 Assumed exchange rates for fiscal 2023: ¥105 to the U.S. dollar; ¥123 to the Euro;¥16 to the RMB

Central to our management policy is the notion of contributing

COVID-19 pandemic. I would also like to specially acknowledge

to the achievement of a sustainable society through our energy

the healthcare professionals and everyone else working so hard toand environment businesses, which reflects Fuji Electric’s

keep us safe.

corporate philosophy of “contribute to prosperity,” “encourage

FY2020: Establishing New Foundations toward Our Medium-Term Management Plan Targets

The business environment that envelops the Company has

creativity,” and “seek harmony with the environment.” This is

Even though we faced difficulties in the first fiscal year of thethe spread of COVID-19 infections, we expect to see greatergrown increasingly complex of late and the world faces a wholecertainly in line with the international community’s aspirations

Medium-Term Management Plan, at this juncture I do not intend

demand up ahead for labor savings through automation, remote

host of uncertainties stemming from not only climate change,

for integrated improvements in economies, societies, and theto revise our fiscal 2023 management targets of ¥1.0 trillion inmonitoring, and non-contact services.

urbanization, and demographic changes driven by aging

environment, and also represents a universal vision even in a

net sales and operating margin of at least 8%. This is because

This fiscal year is positioned as the year to establish new

populations, but also geopolitical risks such as trade disputes, andpost-coronavirus world or in an age in which we will be forced to

I firmly believe that our energy and environment businesses

foundations geared toward achieving the targets in the FY2023

the impacts caused by COVID-19. Above all, the global reach of

coexist with COVID-19. Fuji Electric will promote the SDGs in all ofpossess the technology and products that will be sought after

Medium-Term Management Plan. We will devote managerial

the pandemic has brought the international movement of people

its business activities, work on finding solutions to global warming

globally in the medium to long term. As demand grows forresources to the core growth areas of power electronics systems

and goods to a standstill, disrupted supply chains, and affected

and other social and environmental issues with a special focus onclean energy, stable energy supply, and energy conservation forand power semiconductors, and also continue to work onsocieties and economies on an unprecedented scale.

supply chains, and contribute to the creation of a responsible andthe purpose of realizing a low-carbon society, more businessstrengthening our manufacturing capabilities with the goal ofsustainable society.

opportunities are emerging through which we can harness

further boosting profitability.

Fuji Electric Report 2020

our strengths in power semiconductor technology and power

Our financial policy for the time being is to secure plenty ofelectronics technology. Given the problems surrounding labor

liquidity on hand in preparation for emergency situations. Over

shortages in Japan, and now measures aimed at stopping

the medium term, we will allocate the cash to growth investments

Fuji Electric Report 202010

business in markets outside Japan where there is strong growth

Advancing Fuji Electric Environmental Vision 2050

engage in a style of management that lets employees in their 70s

we will continue to emphasize stable and continuous dividend

potential. Infrastructure development for business expansion has

Being able to contribute to a reduction in CO emissions in society

lead an active working life and guarantees that female employees

payments. As for capital efficiency, in addition to boosting

steadily emerged in India and Southeast Asia, where demand forthrough our mainstay energy and environment businesses is Fuji

in management positions can participate in decision making whilst

profits and reducing working capital, we will continue to takestable power supply and energy savings is expected to increase

Electric’s biggest strength. Business negotiations are also picking

balancing their work and life duties. Furthermore, the adoption ofsteps toward the qualitative improvement of ROE with a view to

as social and industrial infrastructure comes onstream. Having

up thanks to an increase in enquiries from customers actively

teleworking we started as a measure to stop the spread of COVID-

effectively utilizing cross-shareholdings.

2

realigned and expanded our manufacturing, sales, and service

pushing ahead with global warming countermeasures. Guided by

19 has been well underway and we consider this development

Due to the impact of COVID-19, it is currently very difficult tocenters in India, and reinforced our manufacturing and engineering

our Environmental Vision 2050, we aim to lower CO2 emissions

to be an opportunity through which we can promote a work-life

predict future trend in capital investment and production by our

structure for plant systems in Southeast Asia, we will make every

generated by production activities and in society overall with thebalance backed by workstyle reforms geared toward employee

customers, so we have decided to postpone our fiscal 2020

effort to globally expand the systems business in the future.

use of certain products, and advocate the effective utilization

safety, health, and greater productivity. At the same time, we run

earnings forecasts for now. That said, we will make preparations toannounce our full-year forecasts when we disclose interim results.

Aggressively investing in power semiconductors
for xEVsof resources by reducing, reusing, and recycling products andan employee awareness survey every year so that our Executive

Digital transformation of manufacturing;human resource development aimed at greater
autonomy of production bases outside Japan

materials. Across supply chains, we seek to realize a low-carbon

Officers, who also serve as General Managers, stay well informed

and recycling-oriented society. Also, in June this year we expressedof any issues and can implement measures accordingly from aour support of the recommendations of the Task Force on Climate-

Company-wide perspective in an effort to create more friendly
workplace environments.

Since taking office as President, I have continued to stressrelated Financial Disclosures (TCFD) and we intend to further

Leveraging our world-class technological know-how andthe importance of manufacturing capabilities—our origins asenhance our disclosure of information concerning the environment

reliability, we will continue to make aggressive investments

a manufacturer and the source of profits. I have consistently

and bolster our ability to cope with climate change risks.

in the power semiconductors business in light of the growthcommunicated this matter to employees and taken steps to

Improving the effectiveness of governance so as
to achieve sustainable growth

opportunities in the ongoing shift to electrified vehicles andbolster our capabilities. Alongside in-house manufacturing andstandardization that we have pursued thus far, we have managed

Respecting human rights and promoting theactivities of diverse human resources

Management risks have continued to diversify in recent times

the expanding uptake of renewable energy. In particular, as we
expect to see stronger demand for electrified vehicles over theto improve productivity by automating tasks that require a highBased on the thinking that people are the source of a company’sof risk management is growing increasingly important. More so

medium to long term as countries around the world enforce morelevel of skill, hard work, and testing and inspection processes.

competitiveness, “respect and value all people” is stated in ourthan ever before, we must counteract management risks with astringent environmental regulations, and considering that ourFurthermore, with the goal of achieving groundbreaking productivity

Corporate Code of Conduct and we promote respect for humanmultifaceted approach and swift action. This is why we are taking

reverse-conducting IGBT (RC-IGBT) has been favorably received

enhancements, we are addressing the digital transformation ofrights and the active participation of diverse human resources.

steps to further strengthen our business continuity capabilities,

by customers for being smaller and more reliable than competitor

manufacturing using IoT and promoting cooperation between

The issue of human rights in supply chains is also indispensable

including how we respond to large-scale disasters or the spread

products, we will look to ramp up our production capacity all theprocesses and between production sites by visualizing and sharing

to our global business expansion. We endeavor to have ourof an infectious disease. Also, in July last year we established awhile gauging xEV market trends and keeping a close eye on theinformation on designs, purchasing, manufacturing, and testing. We

subsidiaries and business partners in Japan and overseas

Nomination and Remuneration Committee. This Committee—

diversification of investment risks.

will also spare no efforts in improving the quality of development andunderstand our policy on human rights, and we also undertake

comprising a majority of Outside Directors, one of which serves

testing by digitizing our quality records.

human rights due diligence.

as Chairman—enhances transparency and objectivity surrounding

and the pace of this change is accelerating. As such, the practiceBusiness expansion of Power Electronics
Systems outside Japan

long term, we will further drive home our policy of local production

growing increasingly important. We have put in place systems andDirectors and Audit & Supervisory Board Members and strives to

In the power electronics systems business, which boasts a client

for local consumption and help boost the autonomy andsupport structures to facilitate this, so in terms of implementation,

improve the effectiveness of corporate governance overall as webase spanning a broad range of industries, we are working tocompetitiveness of our overseas production bases by transferring

we will do everything we can going forward to ensure that ourseek to achieve sustainable growth.

strengthen the systems business by combining competitive

Japan’s manufacturing capabilities and technologies anddiverse pool of employees find their work meaningful. We intend tocomponents with engineering services, optimal control

continuously nurturing local leaders.

As we expand our overseas operations over the medium to

In addition, empowering senior and female employees is

President’s Message

aimed at business expansion, while for shareholder returns

mainly the appointment, dismissal, and the remuneration oftechnologies, and IoT. The key lies in how we can expand thisPursuing Prosperity by Being Enthusiastic, Ambitious, and Sensitive
Promoting the SDGs as a Company-Wide Activity
Undertaking activities that contribute to the achievement of theSDGs and sustainable growth overall is something we choose to
do on a Company-wide basis. Thus, we seek to enhance long-

SDGs Promotion Structure
Board of Directors

term corporate value from two perspectives: creating business
opportunities and minimizing management risks.

Executive Committee

In April of this year we formed the SDGs Promotion Committee
for the purpose of discussing, deciding, and evaluating the

In 2012, with the objective of improving profitability, we launchedfamilies. This sensitivity is the very DNA of Fuji Electric handed

our Companywide Pro-7 Activities. The program aims to boost

down over successive generations and is manifested in ourwork efficiency and quality by having employees form teams andunshakable values. I have continued to convey to employees inreview the way they work from the ground up with the ultimate

various settings my intention of attaching considerable importancegoal of achieving Prosperity (prosperity as a company, returns toto this DNA. I also believe that our operating foundation will beshareholders, the happiness of employees). These activities havefurther strengthened by the evolution of Pro-7 Activities made bypermeated all corners of frontline operations, including indirect

one team of all employees that share our corporate slogan.

departments, and changed employee mindsets. In fact, our Pro-7
Activities are now well entrenched in our business operations.

that we remain a corporation capable of developing sustainably

At the root of our employees’ behavior and mindset is ourin the future, our team of diverse employees will leverage theirlevel. The Committee will discuss key issues and evaluate

corporate slogan: To be enthusiastic, ambitious and sensitive.

comprehensive capabilities and further refine the Company’s

measures from the perspective of the SDGs. For the near term,

By “enthusiastic,” we mean the desire to contribute to society

technological prowess in the fields of energy and the environment.

by creating new technologies and products; being “ambitious”

In this way, we will continue to contribute to the creation of ameans setting lofty goals and working hard to achieve them, no

responsible and sustainable society.

measures related to the promotion of the SDGs at a management

it will tackle initiatives concerning the environment, human rights,
encouragement of employees’ success, and workstyle reforms
across the entire supply chain.

The SDGs Promotion Committee

Environmental Vision
Promotion Subcommittee

Human Rights Promotionand Human Resources
Empowerment Subcommittee

matter what the challenges; and being “sensitive” means we must
be thankful for and care about our customers, colleagues, and11

Fuji Electric will celebrate its 100th anniversary in 2023. So

Fuji Electric Report 2020

I look forward to the continued understanding and support ofour shareholders, investors, and other stakeholders.

Fuji Electric Report 2020

12

Progress of Management Reforms

FY2023 Medium-Term Management Plan “Reiwa Prosperity 2023”

Following the global financial crisis in 2008, Fuji Electric initiated business restructuring to enable generationof profits even without growth in sales. Since then, we have taken steps to implement management reforms
aimed at achieving targets set in our medium-term management plans, in order to deliver growth and further
improve our profitability.

Under our Medium-Term Management Plan for Fiscal 2023, we aim to establish a foundation for sustainablegrowth with net sales of ¥1 trillion and an operating margin of 8% or more. As for financial indicators, we willemphasize a balance between growth potential, profitability, efficiency, and financial soundness in order tofurther improve capital efficiency.

Main
initiatives• Partial cancellation ofcross-shareholdings

 ocus on our businesses in power electronics
Fsystems and power semiconductors• Established Nomination andRemuneration Committee• Formulated Environmental
Vision 2050

From fiscal 2019 to 2023, we plan to allocate about 90%of plant and equipment investments of ¥220 billion andabout 80% of R&D expenditures of ¥200 billion to expand
our businesses in power electronics systems and power
semiconductors.
[Plant and equipment investment] We will makeinvestments to expand the system business of our powerelectronics systems while reinforcing production facilities for
power semiconductors aimed at increasing sales of those forelectrified vehicles.
[Research and development] In addition to stepping up
incubation development, we will deploy our strength in themobility field where we can utilize synergy between the powerelectronics systems and the power semiconductors, andcompetitive components to develop global products, such as
FA systems, IoT solutions, transformers, and switches. We
will also develop next-generation power semiconductors forelectrified vehicles.

(reduced executive officers
from 53 to18)• Revised our management policies

Promotinggrowthstrategies• Clarified business domains
as energy and environment
businesses• Overseas business expansion•

 romoted M&As and collaborations to secure human resources and sales channels (six companies in Asia and otherP
regions, two in China, two in the United States, and one in Europe)• Strengthened our businesses
in power electronics systems
and power semiconductors andmaximized synergies•• Strengthened our powerelectronics systems business•S tepped up research and development• Strengthened a profitablestructure eorganized production basesR(magnetic disks and vending
machines)• Reduced costs throughglobal procurement andcentralized purchasing
Improvingprofitability

 eorganized social engineeringRsystems, industrial infrastructure, andpower electronics businesses•• Implemented businessrestructuring• Actively invested in power
semiconductor business trengthened mother factories in
S
Japan (Suzuka, Kobe)• Reorganized production model lineup•• Promoted local production for
local consumption•

 stablished production bases
E(Thailand, India, and United States)

Expand overseas businesses• Reduced inventories throughsupply chain reforms

 onsolidated production andCengineering departments andstrengthened humanresource development•

Improved value-added productivity
through in-house production,
automation, and standardization

Further Improve Profitability• Promoted companywide Pro-7 Activities to improve profitability•Improved operational efficiency byreviewing all costs from the ground up

Improved business efficiency
and quality through inventory
reassessments across all businesses•Improved productivity throughincreased introduction of RPA• Promoted workstyle reforms•

Reinforce global manufacturing capabilities

Business Performance Trends(Billions of yen)

691.2

689.1

(4.4%)Net Sales(2.7%)

Operating Income
Net Income Attributableto Owners of Parent
Operating Margin(1.7%)(0.1%)

0.9

6.8

11.9

15.1

19.3

(2.9%)

22.0

26.4

33.1

(4.8%)

39.3(5.5%)

914.9

893.5
(6.3%)

45.0(6.6%)

900.6(5.3%)

56.0
44.7
41.0

60.0
40.3

37.8

30.6

28.0

19.6

11.8

813.6

810.7

759.9

745.8

703.5

837.8

(4.7%)

42.5
28.8

FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019Net Debt-Equity Ratio(Times)

1.9

1.4

1.4

1.1

0.9

0.7

0.8

0.5

0.4

0.4

0.4

Equity Ratio (%)

20

21

25

28

32

27

33

36

37

37

ROA (%)

1

2

2

3

3

3

4

5

4

4

3

ROE (%)

4

9

7

15

9

11

12

16

12

12

8

Dividend Payout Ratio
(%)

16

19

24

14

26

23

23

19

27

28

40

Targeting sustainable growth, we will continue reinforcing
our operating foundations with a focus on the environment,
human resources, and governance. In addition, we will
revitalize our companywide Pro-7 Activities and promote
workstyle reforms aimed at improving work efficiency, work
quality, and productivity.
* For more details, please refer to Environment (page 31), Human Resources (page 37),
and Corporate Governance (page 41).

FY2023Medium-Term
Management Plan
(Target)

FY2018–FY2023
Change

914.9
60.0
6.6%

1,000.0
80.0
8.0%

+85.1
+20.0
+1.4pt

40.3

55.0

+14.7

0.4 times
37%
4%
12%
28%

0.1 times
50%
5%
11%
30%

-0.3
+13pt
+1pt
-1pt
+2pt

Net Sales
Operating Income
Operating Margin
Net Income Attributableto Owners of Parent

Financial Indicators
Net Debt-Equity Ratio
Equity Ratio
ROA
ROE
Dividend Payout Ratio

Note: A ssumed exchange rates for fiscal 2023: ¥105 to the U.S. dollar; ¥123 to the Euro;¥16 to the RMB

Net Sales(Billions of yen)

Others

137.3

71%

75%

546.6
FY2018Results

200.0

Electronic Devices

600.0Power Electronics Systems +53.4+62.7

Elimination and Corporation
FY2023Medium-Term Management Plan (Target)

Overseas Sales(Billions of yen) Ratio of Overseas Sales 25%

15.8
16.5

(FY2018–FY2023 Change)

1,000.0

914.9

Ratios for PowerElectronics Systems andElectronic Devices

35%
27.0
30.0

232.4

350.0

(FY2018–FY2023 Change)
Total +117.6
Americas
+11.2
+13.5
Europe

135.0

China

+56.6

158.0

Asia and others

+36.3

78.4
121.7
FY2018Results

FY2023Medium-Term Management Plan (Target)

Operating Income(Billions of yen)

(FY2018–FY2023 Change)

80.0

Ratios for PowerElectronics Systems andElectronic Devices

Others

60.0
15.6

79%

80%

36.2
FY2018Results

22.0

Electronic Devices

48.0

Power Electronics Systems +11.8+6.4

Elimination and Corporation
FY2023Medium-Term Management Plan (Target)

Note: Ratios for Net Sales and Operating Income are calculated based on amounts
before elimination and adjustment of inter-segment transactions

Plant and Equipment Investment(Billions of yen)

(FY2018–FY2023 Change)

220.0

Ratios for PowerElectronics Systems andElectronic Devices

153.6

Total +66.4
Others120.0Electronic Devices(power semiconductors)

53.7

78.0

Power Electronics Systems +24.3

FY2014–FY2018
Cumulative Results

FY2019–FY2023
Cumulative (Target)

78%

Ongoing Reinforcement of Operating Foundations

FY200919

We will work to strengthen our global manufacturing
capabilities with an emphasis on local production for
local consumption. At the same time, we will step up
development of local leaders at our overseas production
bases and promote their autonomy. We will also deploy IoTtechnologies to advance digital reforms of our manufacturing
and achieve innovative productivity improvements bypromoting collaboration across processes and bases throughvisualization and sharing of information on design, purchasing,
manufacturing, and testing.

FY2018Results(Billions of yen)

Amid growing demand for electricity, energy savings andautomation for industrial and social infrastructure, as well as
the spread of renewable energy, we will raise the overseas
sales ratio from 25% in fiscal 2018 to 35% in fiscal 2023 byincreasing sales mainly in Southeast Asia, India, and China.

• Reinforced manufacturing
capabilities•

FY2023 Management Targets

Growth Strategy

Reinforcing
operatingfoundations• Integrated business operational
management by abolishing
the holding company system• Expedited management
decision-making

Promote Growth Strategies

2019–
Establish foundations forsustainable growth

2016–2018
Further renovation of
Fuji Electric2013–2015
Promote growth strategies
Proactive management

2010–2012
Strengthen a profitable structure
through business restructuring

65.8

90%

+54.2

R&D Expenditures(Billions of yen)

(FY2018–FY2023 Change)

Ratios for PowerElectronics Systems andElectronic Devices

200.0

175.2

Total +24.8

74.0

OthersElectronic Devices(power semiconductors)

+11.6

77.2

85.0

Power Electronics Systems+7.8

FY2014–FY2018
Cumulative Results

FY2019–FY2023
Cumulative (Target)

80%

62.4

80%

* Figures for R&D expenditures are classified by segment according to theme andtherefore differ from figures stated in the consolidated financial report.

13

Fuji Electric Report 2020

Fuji Electric Report 202014

Fiscal 2019 Review of Operations
In fiscal 2019, ended March 31, 2020, Fuji Electric posted year-on-year declines in consolidated net sales
and operating income amid curtailment of economic activities stemming from the spread of COVID-19,
as well as slowdown in markets outside Japan, centered on China, due to the trade friction between the
United States and China. Nevertheless, we continued actively investing in production facilities for our powerelectronics systems and power semiconductors and in R&D aimed at expanding our business.

Fiscal 2019 Performance* Major components: ED&C components (Power Electronics Systems Energy); lowvoltage inverters, rotating machines, FA components, measuring instruments (PowerElectronics Systems Industry); semiconductors (Electronic Devices); and vending
machines (Food and Beverage Distribution).

<Reasons for decrease in sales of major components>
From the first quarter through the third quarter of fiscal 2019,
economic slowdown in China due to the trade friction between
the United States and China led to ongoing investment
restraint. Meanwhile, demand for machine tools and industrial
equipment declined in Japan and overseas, and sales of ED&C
components and low-voltage inverters also decreased. In
addition, worsening the Chinese economy caused closure offactories, and demand for new vending machines decreased
because the vending machines which had been installed inclosed factories are reused. From the fourth quarter, demand
for machine tools and industrial equipment declined in Japanand overseas due to the spread of COVID-19, while ED&C
components, low-voltage inverters, FA components, and thelike were also down. In addition, sales of vending machines for
the Japanese and Chinese markets declined, as did sales ofsemiconductors for the Chinese market.

Sales outside Japan
Sales outside Japan declined by ¥11.5 billion year on year, to¥220.9 billion. This was due to falling demand in China for major
components, such as vending machines, semiconductors,
and low-voltage inverters. By contrast, we enjoyed an increasein sales elsewhere in Asia thanks to large-scale projects forswitchgears and controlgears, as well as higher sales in theindustrial semiconductor sector in Europe. The overseas sales
ratio was 25%, unchanged from the previous year.

15

Fuji Electric Report 2020

(Billions of yen)

FY2018Results

FY2019Results

ChangeNet Sales

914.9

900.6

-14.3

Operating Income

60.0

42.5

-17.5

Operating Margin

6.6%

4.7%

-1.8%

Net Income Attributableto Owners of Parent

40.3

28.8

-11.5

Financial Indicators
0.4 times

0.4 times+0.1 times

Equity Ratio

37%

37%

-0%

ROA

4%

3%

-1%

ROE

12%

8%

-4%

Net Debt-Equity Ratio

Sales by Major Components and Plant Systems(Billions of yen)

914.9

572.2

(Change)

900.6

580.5

342.7

320.1

FY2018Results

FY2019Results

Plant Systems, others +8.4

Major components-22.7

Sales Outside Japan(Billions of yen)
Ratio of
Sales outside Japan(Change)

25 %

232.4
15.8
16.5

25 %

220.9

Total -11.5

Approximately 90% of total plant and equipment investment
was allocated to our businesses in power electronics systems
and electronic devices, such as expanding production capacity
and streamlining production lines. During the year, in thePower Electronics Systems segment, we completed the third
facility at the Thai Factory for the manufacture of switchgear
and controlgear systems. We also started construction ofan engineering facility at the Chiba Factory to strengthenenergy-related products. In addition, we invested to streamline
production lines at the Suzuka Factory and Tokyo Factoryin order to expand in-house production and strengthen thecompetitiveness of our inverters and measuring instruments.
In the Electronic Devices segment, we increased the capacityof the 8-inch chip production line (front-end process) at
our Yamanashi Factory in order to expand our power
semiconductor business for electrified vehicles. In back-end
processes, at our bases in Japan and overseas, we invested
to increase production of large-capacity IGBT modules forautomotive pressure sensors and power converters.

Plant and Equipment Investment(Billions of yen)

(Change)

1.0
1.1

43.3

0.8
1.0

48.2
2.3

-0.2
Others-0.1
Power Generation
Food andBeverage Distribution 0.0

31.3

Electronic Devices

+3.2

4.3

Power Electronics
Systems Industry
Power Electronics
Systems Energy

0.0

2.3

28.1

4.3

Total +4.9

6.5

8.5

FY2018Results

FY2019Results

33.7

34.5

Growth Strategy

For the year, consolidated net sales amounted to ¥900.6 billion,
down by ¥14.3 billion year on year. Factors in the decline
included delays in deliveries and curtailment of plant andequipment investments stemming from restrictions placed on
business activities to combat the spread of COVID-19, as wellas the absence of large-scale orders recorded in the previous
fiscal year and the impact of the trade friction between the
United States and China. However, we benefited from strong
demand in Japan to upgrade or replace aging equipment.
Despite the efforts to reduce costs, earnings wereaffected by lower sales and production volumes for major
components*, as well as foreign exchange factors, upfront
investments, and increased costs related to product defects.
As a result, operating income declined by ¥17.5 billion, to¥42.5 billion. Sales in substation equipment, switchgears andcontrolgears in the power electronics systems for energy, andplant system projects such as power plants increased, but
demand for major components declined.

Plant and Equipment Investment+2.0

Research and Development
Seeking to advance product development and strengthen global
competitiveness, we allocated around 80% of R&D expenditures
to power electronics systems and electronic devices.
In the Power Electronics Systems segment, we developed
some of the world’s most compact substation equipment,
which enables significant cost reductions. Other developments
included an uninterruptible power system for large data
centers, an induction furnace that delivers energy savings in
the casting process, and an exhaust gas cleaning system forlarge ships. We also developed SignAiEdge, on-site diagnostic
equipment that utilizes IoT to visualize problems at production
sites, as well as analytics and AI (MSPC*) technology tocontribute to productivity improvements.
In the Electronic Devices segment, we focused on
developing power semiconductors for electrified vehicles.
Fiscal 2019 developments include RC-IGBTs that reduce
power loss compared with conventional devices to achievesmaller, lighter, and more efficient electrified vehicles.

14.7
19.0

Americas
Europe-1.2+2.5* Abbreviation for “multivariate statistical process control”

78.4

62.6

China

-15.7

Fiscal 2020 Outlook

121.7

124.6

Asia and others+2.9

FY2018Results

FY2019Results

The Company has chosen not to release consolidated
performance forecasts the fiscal year ending March 31, 2021,
as it is currently difficult to project future trends in capital
investment and production by customers amid restrained
economic activity in Japan and other countries stemming

R&D Expenditures(Billions of yen)

(Change)

1.6

3.2
2.6

1.5

3.2
2.8

Total +0.8

0.0
Others-0.1
Power Generation
Food andBeverage Distribution +0.2

12.9

Electronic Devices

-0.3

8.7

Power Electronics
Systems Industry

-0.6

3.8

5.3

Power Electronics
Systems Energy+1.5

FY2018Results

FY2019Results

13.2

9.3

Note: Figures for R&D expenditures are allocated by research theme and therefore differ
from those in the consolidated financial reportfrom the global COVID-19 pandemic. We will disclose ourforecasts promptly when we are able to estimate the impactsof this situation on economic activities with a sufficient degreeof accuracy.

Fuji Electric Report 202016

Review of Segments
Overseas Business Expansion (Fiscal 2019 and 2020)

Power Electronics Systems Energy / Industry
Medium-Term Management Plan Policy

to provide drive control and monitoring control systems,

utilizing our sales channels developed through M&A andas well as energy management systems, to material andengineering capabilities. By establishing a system factory

beverage factories, allowing them to save energy by

and integrating local subsidiaries, we will expand our local

improving productivity and optimizing energy usage. In

design capabilities in addition to local production for local

North America, we will collaborate with Fuji SEMEC Inc.

consumption to build an integrated manufacturing system.

to further strengthen our manufacturing and engineering

In China, we will deploy the sales channels of local partners

systems and expand our rolling stock business.

FMT as Core Base in Asia Coordinates with All Other Bases

In these segments, our aim is to create competitive

also promote standardization and packaging of software

components and reinforce our system business by

and hardware for the social and industrial infrastructure

bringing together our engineering services, optimal

fields and attract increased orders for our comprehensive

control technologies, and IoT. At the same time, weelectrical equipment business. In the transportation field,

Southeast Asia

will utilize local partners and sales channels developed

we will work to accelerate development of products thatIn 2019, we established a new switchgear and controlgear

through M&A to expand our overseas business. We will

differentiate us from other companies.

system factory and engineering center at Fuji Electric

India

VietnamGrowth Strategy

In Southeast Asia and India, we are expanding orders byPhilippines

Manufacturing (Thailand) Co., Ltd. (FMT), which will serve
Value
CreatedStable Supply of Energy

Segment

Power Electronics Systems Energy

Customers

Social Infrastructure Field(Power / Telecommunications)
Substation Equipment / Monitoring andControl Systems

Energy Saving

as our core production site in Asia. By reinforcing our local

Power Electronics Systems Industry

system business that contributes to electric power supply

Automation

Industrial Field(Assembly Processing / Materials)
Energy Management
Systems

Drive Control / Monitoring
Control Systems forMaterial Plants

Transportation Field

stability and energy savings for data centers and theelectricity and materials fields.

Systems for Railcars
Passenger door systems

FMT
Switchgear andcontrolgear system
factories andengineering centerengineering and manufacturing systems, we will build a

Malaysia

Major Components Principal Systems

India
Fuji Electric Consul Neowatt Private Limited (FCN), which

Fuji Electric
India Pvt. Ltd.

Electric India Private Limited will join forces to facilitate
Electricity Storage
Control Systems

Modular data centers

Switchgears andControlgears

Operational Information
Collection Systems for Assemblyand Processing Equipment

Ship Exhaust Gas Cleaning Systems
SOx scrubbers

Indonesia

Strengthening the Business Structure in India(Reorganizing and Expanding Bases)

became a consolidated subsidiary in 2019, and Fuji
Comprehensive Data
Center Systems

Singapore

Drive systems for high-speed railcars

Laser type gas analyzers

Fuji ElectricConsul Neowatt
Private Limited

Merger of 2 companies

reorganization and expansion of our manufacturing,(scheduled for October 2020)

sales, and service bases in India. We will leverage the

New company

sales channels- and product-related strengths of bothcompanies to grow our business and strengthen our

Fuji Electric India Pvt. Ltd.

service system, while also expanding localization of design
and procurement to enhance product competitiveness.
Head Office
Manufacturing base : 2
Sales base
: 27
Service Center: 80

Optimal Control
Technologies

Engineering Services

IoT

China
Control Equipment

In fiscal 2019, Dalian Fuji Bingshan Control Systems Co.,

System Proposal Centered on an EMS in Collaboration
with Local Partners

Ltd. (DFBCS)—a joint venture with the Dalian Bingshan

Priority target industries

Group, a major Chinese refrigeration and air conditioning
Major Components

Controllers

Transmission andDistribution / Power Supplies

equipment manufacturer—introduced energy management

Programmable displays

ED&C Components

Wuxi Factory. Positioning this factory as our “model
factory” in the Chinese market, we will focus on the beerand dairy industries as our top-priority targets. Here, wewill demonstrate to customers the energy-saving benefitsof EMSs and give concrete examples, while proposing

Transformers Uninterruptible powersystems (UPSs)

17

Fuji Electric Report 2020

Dairy industry

systems (EMSs) to the Dalian Bingshan Group and our
Measuring Instruments

Drive Equipment

Beer industry

Magnetic
switches

Molded-casecircuit breakers

Inverters

MotorsServo systems

Ultrasonicflowmeters

Gas analyzers

various solution to facilitate EMS adoption and thus expand
our system business.

Fuji Electric

Dalian Bingshan Group• Electrical and control technologies,
components and equipment• Software packages(Energy Management Systems(EMS) and other package)• Sales network• Cold and thermal technologies
and equipment• Engineering• Sales Network

DFBCS (Offices)

Fuji Electric Report 202018

Power Electronics Systems Energy
We will use our integrated proposal capabilities andabundant engineering experience, cultivated in Japan,
to expand our overseas businesses in transmission anddistribution systems and comprehensive electrical equipment.

Major Initiatives in Fiscal 2019–2020
Strengthening our plant system business

Masashi Kawano
Executive Officer
Corporate General Manager,
Power Electronics Systems Energy Business Group• Energy management
Power distribution, Smart meters,
Industrial substation, Railway substations,
Industrial power supplies

Operating Income(Billions of yen)

235.0
7.5 %

• Power supply and facility systems
Data centers, Uninterruptible powersystems (UPS), Electrical facilities,
Switchgears and control gears

16.8• ED&C components
Power distribution and control equipment

FY2018Results

FY2019Results

Supplied toPower companies,
Material plants (steel, chemical, etc.),
Data centers, Machine manufacturers
Strengths

FY2023Medium-Term
Management Plan
(Target)

FY2018Results

5.7 %FY2019Results

R&D Expenditures(Billions of yen)(Billions of yen)

8.3 %

19.5

FY2023Medium-Term
Management Plan
(Target)

30.3

28.8

40.5

equipment business.
In fiscal 2019, we developed and launched a series ofsubstation equipment. The new center will bring together

large-capacity uninterruptible power systems (UPSs) tothe development, design, and engineering functions, which

address the increasing size of data centers. The new units

were previously dispersed over multiple locations. In fiscal

have capacities ranging from 330 kVA to 1,000 kVA, making

2020, we will consolidate our standardized switchgear andit possible to build large-scale systems with maximum

controlgear design and evaluation functions at the Tokyo

capacity of 8,000 kVA by operating the devices in parallel.

Factory, and start construction of a dedicated systems

In addition to our wide product lineup, we can handlebuilding aimed at improving productivity. In addition

integrated projects covering everything from facility design

to integrating functions to facilitate standardization of

to equipment procurement and construction. This enables

products and systems, we will work to improve our testing

us to swiftly construct data centers and make them energy

capabilities. Utilizing testing equipment that can simulate

efficient. For this reason, we are receiving more and more

local environments enables us to achieve greater productorders each year from foreign-affiliated companies that are

quality perfection at the time of shipment, which reduces

expanding globally.

the need for onsite reworking and shortens testing times.

In fiscal 2020, we will take advantage of our strong

Through these efforts, we will accelerate the development

domestic track record to broaden our comprehensive
electric equipment business across Southeast Asia.

processes, resulting in lower costs and shorter delivery times.

31.0
25.7

8.5
FY2014 - 2018
Cumulative Results

FY2019Results

FY2019 - 2023
Cumulative Target

FY2019FY2014 - 2018
Cumulative Results

5.3 Results

FY2019 - 2023
Cumulative Target

We will introduce globally competitive products, such as

time, we will deploy our integrated proposal capabilities,

substation equipment, power supply equipment,

cultivated in Japan, to expand our overseas businesses inand switchgears and controlgears, to strengthen ourtransmission and distribution systems and comprehensive

manufacturing and engineering systems. At the same

electrical equipment.

Awareness of Market Needs and Business Opportunities
In Southeast Asia, India, and the Middle East, which are enjoying

railway companies in the 1970s and 1980s—aimed atstrong economic growth, demand continues to grow for electric

preventing accidents and improving efficiency.

power and investments in social and industrial infrastructure,

Meanwhile, the need to save energy and reduce CO2such as substations and data centers. Accordingly, demand

emissions has led to increased demand for visualization

has remained firm for substation equipment, switchgears andand optimization of factory-wide energy usage, from thecontrolgears, etc. for power companies, factories, and buildings

perspective of growing environmental awareness and efforts

requiring stable power supply.

to lower energy costs. In addition to introducing products withIn Japan, we look forward to ongoing steadyhigh power conversion efficiency, customers will have moreinvestments—to replace aging facilities, including

opportunities to use energy management systems (EMSs) to

substation equipment delivered to material plants andachieve optimal energy supply and demand control.

Fuji Electric Report 2020

factories, boosting orders in our comprehensive electricalstandardization and streamlining production and testing

Medium-Term Management Plan Policy

19demand from large-scale data centers and semiconductor

production system to improve profitability.

of new competitive products, while further expanding

49.0• Extensive delivery record andengineering experience in stable power
supply and power optimization• Energy-saving expertise developed
at Fuji Electric’s factories in Japanand overseas

Operating Margin12.3

Plant and Equipment Investment• Package proposals from a wide range of
products and systems, to maintenanceservices, contributing to stable power
supply and power optimization

we are working to rebuild our development andIn fiscal 2019, we started building an engineering(Billions of yen)

218.0

The proliferation of 5G and IoT technologies has buoyedcenter within the Chiba Factory, our mother factory for

Net Sales
224.1

and substation equipment for data centers and railways,

Growth Strategy

Business Areas

Amid growing demand for switchgears and controlgears

Expanding our comprehensive electricalequipment business

Close Up!

Contributing to development of global transformers and stable power supply
In Southeast Asia, India, and the Middle East, where
power demand is strong, construction of power
plants and substations continues unabated.
Transformers, switchgears, and other substationequipment play an important role in power plants
and substations and thus need to be highly reliable.
However, substations are often constructed in urban
areas where land acquisition is difficult, leading tocalls to build “smaller and lighter” facilities.

We have developed a global transformer thatis among the most compact in the world and has
achieved significant cost reduction. We will make thesetransformers locally at our production base in Thailand.
Going forward, we will develop and commercialize
competitive global products, such as transformers,
and switchgears and controlgears. In this way, we willcontribute to the stable supply of electricity and thestable operation of equipment in overseas markets,
such as Asia and India.

Global transformer

Fuji Tusco Co., Ltd. (production base in Thailand)

Fuji Electric Report 202020

Power Electronics Systems Industry
We will accelerate overseas business expansion by further
promoting partnership strategies, mainly in Southeast Asia
and India, while strengthening local production, consumption,and design systems.

Major Initiatives in Fiscal 2019–2020

Hiroshi Tetsutani
Executive Officer
Corporate General Manager,
Power Electronics Systems Industry Business Group

Promote partnership strategies to expand
overseas business

Expansion of the systems businessleveraging IoT

In Southeast Asia, we are leveraging the engineering

In the industrial field in Japan, we are increasing efforts

capabilities and sales channels of Fuji CAC Joint Stockto improve operations and productivity. Here, we use

Company in Vietnam to increase sales of monitoring and

IoT to visualize equipment operational status and predict

control systems for production equipment at cement

and analyze equipment failure, with the aims of raisingplants. In fiscal 2020, we will emphasize development ofcompetitiveness and preventing equipment stoppages.

standardized software and hardware packages to improve
Net Sales

Operating Income(Billions of yen)322.5

• Automation systems
Inverters, Motors,
FA components (servo and controller),
Measuring instruments and sensors,
FA systems, Drive control systems,
Measuring and control systems

317.5

365.0

In India, Fuji Electric Consul Neowatt Private Limited(Billions of yen)

6.0 %

5.2 %

Operating Margin

7.8 %

28.5
19.4

• Social solutions
Electrical equipment for railcars,
Radiation monitoring systems

16.5

FY2018Results

FY2019Results• IT Solutions

FY2023Medium-Term
Management Plan
(Target)

FY2018Results

FY2019Results

FY2023Medium-Term
Management Plan
(Target)Supplied to
Air conditioning and water treatment facilities,
Machine manufacturers,
Material plants (steel, chemical, etc.),
Railway companies, Shipbuilding companies,
Public agencies and local government

Plant and Equipment Investment

R&D Expenditures(Billions of yen)(Billions of yen)

Strengths• Extensive product lineup tailored tocustomer applications• Engineering capabilities built up overa substantial delivery track record

29.0

23.4

• Early development of powerelectronics equipped with power
semiconductors

48.4

and launched SignAiEdge, a field-based diagnostic

design, production, and testing of inverters, UPSs, powerdevice that detects and analyzes signs of equipment

conditioning systems (PCSs), and other components.

abnormalities. It is the first in the industry to incorporate

FY2014 - 2018
Cumulative Results

In fiscal 2020, we will introduce these IoT products into

Private Limited, we will work to expand our systems

our own production lines to help improve profitability, andbusiness in the renewable energy and food and beverage

we will use know-how acquired through this process tofields, in addition to the materials field.

facilitate horizontal rollouts to our customers. Meanwhile,service, which is expected to attract demand as a measure

54.0

to prevent the spread of COVID-19.
* Abbreviation for “multivariate statistical process control”

FY2019Results

FY2019 - 2023
Cumulative Target

FY20198.7 Results
FY2014 - 2018
Cumulative Results

FY2019 - 2023
Cumulative Target

Close Up!

Contributing to energy savings at Indian steel plantat expanding our systems business. At the same time, we

IoT with drive equipment, measuring instruments, andwill broaden our business in ships and railways by utilizing

control equipment—to promote partnership strategies aimed

unique products that differentiate us from other companies.

Awareness of Market Needs and Business Opportunities
In Japan, the industrial field is witnessing a wave ofengineering capabilities and sales channels of Fuji Gemcobatch-process MSPC* technology.

combining them with a remote equipment monitoring

We will leverage our automation business—which combines

In Southeast Asia and India, marked by strong economic

production reform initiatives aimed at addressing labor

growth, we expect an increase in demand to stabilize

shortages and increasing competitiveness. To combat

power supplies, improve energy-efficiency of facilities,

COVID-19 and meet the need for workstyle reforms,

and automate production lines. We also look forward to

meanwhile, we expect companies to increasingly

new capital investments and equipment renewal demand

adopt automation, labor saving, and remote control

in various materials fields, including steel and cement.

technologies at their manufacturing sites. In the materials

Meanwhile, companies in China are investing in energy

field, companies in some industries are reorganizing

savings to protect the environment while working totheir production bases. Nevertheless, we anticipate that

address labor shortages and taking steps to stop COVID-

investments in renewal of aging production equipment and19. Against this backdrop, we expect investments inin energy savings will remain steady.

automation and labor-saving to remain solid going forward.

Fuji Electric Report 2020

to build an integrated manufacturing system covering

we will work to increase orders for IoT products by

Medium-Term Management Plan Policy

21

abnormalities and defects. In fiscal 2019, we developed

45.3

24.7
4.3

floor data to support factor analysis of equipment(FCN) and Fuji Electric India Private Ltd. will join forces

By combining the sales channels of FCN with the• Equipment construction

In fiscal 2018, we launched OnePackEdge, a datacollection system that bundles all types of production
Growth Strategy

Business Areas

cost competitiveness and further increase orders.

In India, the third-largest emitter of CO2 in the world,

deploy energy usage across all of the plant’s

there is a campaign to improve energy efficiency of

production equipment.

plants in nine industries that consume a lot of energy,

Utilizing the results of the field tests, we will

including thermal power generation, steel, andpromote rollouts to other Indian steel plants and step

cement, in order to meet that nation’s greenhouseup proposals in other Asian regions to help reducegas reduction targets.

CO2 emissions through energy savings.

Steel plants use large amounts of energy frommultiple sources, such as electricity, gas, and steam,in the production process. In order to save energy, it
is necessary to optimally combine and control eachtype of energy.
Using our own optimization technology, cultivatedthrough our achievements in Japan, as well as past
operational data and production and operational
plans, we provided an energy management system(EMS) to a major Indian steel plant and started
field tests. Our aim is to help predict and optimally

Monitoring and control room (steel plant in India)

Fuji Electric Report 202022

Electronic Devices
We aim to expand our business by expediting efforts toincrease our production capacity for power semiconductors
for electrified vehicles.

Major Initiatives in Fiscal 2019–2020

Toru Housen
Managing Executive Officer
Corporate General Manager,
Electronic Devices Business Group

Expanding sales of power semiconductors
for xEVs

Accelerating increases in production capacity

In fiscal 2019, we started mass production ofsemiconductors for xEVs, we are investing actively to

4th-generation direct liquid cooling modules that feature

boost production of 8-inch wafer production equipment. In

lower losses and higher cooling performance than before.

fiscal 2020, we will continue investing to raise production

We posted a significant year-on-year increase in sales ofwhile strengthening the assembly process capacity of ourautomotive products, which accounted for 35% of total

production bases in Japan and overseas.

To address rapidly increasing demand for power

power semiconductor sales, up from 29% in fiscal 2018.
Net Sales

Operating Income(Billions of yen)(Billions of yen)

• Power semiconductors
Industrial field, Automotive field

137.3

11.4 %

137.4

Supplied to

15.6• Power semiconductors
Industry:
Inverters, Machine tools, Air conditioners,
Solar and wind power, Electric railways

FY2018Results

Automobile:
Motor drives for electrified vehicles(EVs, HEVs, etc.),
Engine control, Brake control• Magnetic disks
HDD (Data center, PCs)

FY2019Results

FY2023Medium-Term
Management Plan
(Target)

FY2018Results

11.0 %

the COVID-19 pandemic. Nevertheless, we expect

In fiscal 2019, we launched sales of 7th-generation

22.0

demand for xEVs to grow in the medium and long terms

IGBT modules (large-capacity series) equipped withas environmental regulations tighten.

7th-generation IGBT chips that reduce losses by aroundgasoline-powered vehicles, will remain on a downtrend

200.0• Magnetic disks

due to shutdowns of overseas factories stemming from

Expanding sales of large-capacity IGBT
modules for the renewable energy andelectric railway markets

In 2020, global production of automobiles, especially

7.1 %Operating Margin

9.7
FY2019Results

Our aim is to expand sales of power semiconductors for
FY2023Medium-Term
Management Plan
(Target)xEVs by consistently providing high-quality products.

R&D Expenditures

Sales by Fields

175.0(Billions of yen)(Billions of yen)

110.9

Strengths
Power semiconductors

65.8• Packaging technologies that achieve
high levels of heat dissipation andreliability• Product development capabilities
of IGBT modules that contributeto increasing the efficiency,
miniaturization, and reliability of powerelectronics

Industry120.0• Proprietary devices that greatly
improve power conversion efficiency

62.4

88.7

74.0

FY2019FY2014 - 2018
Cumulative Results

FY2019 - 2023
Cumulative Target

FY2014 - 2018
Cumulative Results

50%

modules, which boast high levels of heat dissipation andAutomobile

35%
FY2019Results

railway markets.
In these markets, devices are increasing in capacityand decreasing in size while generating lower losses.
Emphasizing the features of our products, we have
expanded sales to manufacturers of wind and solar power

65%
50%

61.1
31.3 Results

30% compared with existing chips. We are selling thesereliability, mainly to the renewable energy and electric(Billions of yen)

Plant and Equipment Investment

Growth Strategy

Business Areas

FY2019 - 2023
Cumulative Target

FY201912.9 Results

generation equipment.
In fiscal 2020, we will continue increasing sales to therobust renewable energy market, while capturing neworders from the electric railway market with the aim offurther increasing our market share in the industrial field.

FY2019 - 2023
Cumulative Target

Close Up!

Medium-Term Management Plan Policy

Helping xEVs reduce the environmental impact and improve driving distance

Against the backdrop of steady global demand forsemiconductors for industrial use. To this end, we will

electrified vehicles (xEVs) and proliferation of renewableinvest aggressively to increase production capacity andenergy, we will focus on automobiles (xEVs) and power

boost sales and profits.

Awareness of Market Needs and Business Opportunities
Power semiconductors help save energy thanks to theircountries around the world, and demand for powerhigh levels of conversion efficiency and power control.

semiconductors is expected to grow, including for

Demand for these devices in various fields and applications

inverters used to drive xEV motors.

is rising due to various factors. These include increases

In the industrial field, there is an ongoing shift toin energy consumption due to economic growth andrenewable energy sources, such as wind and solar, due totechnological progress, growing investments in automation

rising demand for clean energy. We also expect companies

in the manufacturing sector, and environmental regulations

to continue investing in automation to solve labor shortages

aimed at preventing global warming.

and improve productivity, and the demand for machine

In the automotive field, the shift from gasoline-powered

tools and robots will increase as a result.

In the xEV field, the focus is on reducing
environmental impact and improving driving
distance, which requires components that aresmaller, lighter, and more efficient than ever before.
To address these requirements, in fiscal 2019
we started mass production of a 4th-generation
direct liquid cooling module featuring improved
heat dissipation performance compared withconventional products. This module, which is fittedwith RC-IGBTs* for better compactness and lower
losses, is for use in motor drive inverters that are
indispensable for xEVs.

Image of electric vehicle (EV)4th-generation
direct liquid cooling module

Electric vehicle
InverterBattery

Motor*RC-IGBT: A cronym for “reverse conducting insulated gate bipolar transistor.”
An RC-IGBT arranges two types of semiconductors with differingfunctions—IGBTs and freewheeling diodes (FWDs)—alternately
in a straight line on a single chip. This permits much greater
miniaturization compared with arranging the IGBTs and FWDs on
two separate chips.

vehicles to xEVs is gaining momentum in various

23

Fuji Electric Report 2020

Fuji Electric Report 202024

Food and Beverage Distribution
In response to a growing need for better hygiene through nonface-to-face and contactless interaction, as well as labor savings,
we will swiftly offer new products that make full use of
automation and heating and cooling technologies.

Major Initiatives in Fiscal 2019–2020

Yasuhiro Takahashi(Billions of yen)

104.4

120.0

5.1 %

• Store distribution
Store fixtures and equipment,
automatic change dispensers
FY2018Results

Beverage manufacturers,
Vending machine operators,
Convenience stores, Supermarkets,
POS manufacturers
Strengths• Top share of the vending machine
market in Japan, China andSoutheast Asia
• Heating and cooling technologies that
efficiently heat and cool products• Automation technologies built up
through vending machines that
contribute to labor saving

3.7 %FY2019Results

FY2023Medium-Term
Management Plan
(Target)Operating Margin

7.1 %

3.8

FY2018Results

FY2019Results

FY2023Medium-Term
Management Plan
(Target)Japan and Overseas Sales

Overseas Sales by Region(Billions of yen)(Billions of yen)

113.6

10.4

104.4

6.7

120.0

97.7

90.0

FY2018Results

FY2019Results

FY2023Medium-Term
Management Plan
(Target)

Japan

30.0

30.0

103.2

Overseas

6.5
1.8

10.4
8.6
FY2018Results

China

2.6

6.7

23.6

4.1

FY2023Medium-Term
Management Plan
(Target)Southeast Asia and other
FY2019Results

Medium-Term Management Plan Policy
We will reinforce our sensing technology andbusiness that supports customer needs, such as laborcommunications and information coordination

saving. Outside Japan, we will strengthen our vending

technology, centered on vending machines and store

machine business in China and Southeast Asia and build

equipment. Our aim is to transition into a systema optimal global production system.

Awareness of Market Needs and Business Opportunities
In Japan, against the backdrop of labor shortages due toneed for automation of the beverage and commodity

a declining working population and measures to prevent

sales process. Meanwhile, the vending machine market inglobal warming, we are promoting advances in laborSoutheast Asia is expanding rapidly, especially in Thailand,saving and energy efficiency for our customers—beveragetriggered by the entry of major beverage manufacturers.

manufacturers, convenience stores, and supermarkets.
Overseas, we expect demand for vending machines togrow, even in our priority Chinese market, due to increasing

25

Fuji Electric Report 2020

for contactless solutions in the “With Corona” era.

drastically in the “With Corona” era. With this in mind, inOffering new products that meet store needs
for sales growth and labor-saving

fiscal 2020 we will deploy antibacterial materials and makeIn fiscal 2019, we proposed and advanced various new

our products and services more contactless, thereby offering

products, including counter fixtures that contribute to increased

new models that consumers can use with peace of mind andstore sales and systems that help save energy and labor.

In addition, there is a growing need for non-face-to-face,contactless products and services in Japan and overseas
as a countermeasure against COVID-19.

In Japan, there is a growing need among store operators

systems that improve the efficiency of our customers’ vending
machine operations.

8.5

5.8

Supplied tomachines in Japan, but the postponement of the Olympic

Growth Strategy

Operating Income(Billions of yen)

113.6

new models to meet diversifying customer needs and demand

The needs of consumers and customers are changing

Net Sales• Vending machines
Beverage vending machines,
Vending machines for food andother goods

beverage manufacturers in each country while introducing

In fiscal 2019, we made proposals for high-value-added

In fiscal 2020, we will step up collaborations with majorGames and the COVID-19 pandemic led to a decline in demand.

Managing Executive Officer
Corporate General Manager,
Food and Beverage Distribution Business Group

Business Areas

Offering new vending machines that meetsocial needs

to save labor and shorten business hours. In fiscal 2020,
therefore, we will utilize our automation technology toCreating vending machine markets andexpanding sales in China and Southeast Asia

develop new products and contribute to the convenience

Fiscal 2019 saw a decline in demand in the Chinese market

include two-way case, which functions as a showcase indue to economic downturn triggered by U.S.-China trade

the daytime and a vending machine at night, as well as afriction. In Southeast Asia, by contrast, we boosted sales by

positive pressure control system that maintains healthy store

capturing demand for vending machines on the back of rising

environments by controlling the air supply and exhaust andconsumer income and labor costs.

enhances the energy efficiency of air conditioning.

of consumers and the profitability of our customers. These

Close Up!

Using AI to enhance vending machine
operational efficiency
Due to serious labor shortages, beverage manufacturers andvending machine operators in Japan are faced with an urgent needto improve the efficiency of product replenishment operations andother processes. In response, we have developed various systems
that use AI to address the requirements of vending machine
operators, including product demand forecasts, remote settingof vending machines, sales plans, and delivery route settings. We
are currently making proposals to our customers, encouraging
them to apply the new systems to our vending machines, which
account for the majority of the market. By reducing losses ofsales opportunities and shipping costs due to products being
sold out, we will streamline the vending machine operations of ourcustomers and help improve their profitability.

AI-powered proposal of optimal sales and delivery
plans based on vending machine information
Vending machine

Operation/management

DeliveryRemote configuration(Lighting, temperature,
price, etc.)

replenishment
order

Inventory information,
Sales information, etc.
Vending Machine Operation System

Contributing to maintaining healthy in-store environments and energy saving in
air conditioning by preventing outside air influx
We have developed a system for controlling air pressure insidestores. This system uses sensors to control the balance of air
intake and exhaust by ventilation fans and other equipment toprevent influxes of outside air when automatic doors are opened
and closed. Furthermore, the system achieves a 10% reduction
in energy consumption by lowering the burden placed on air
conditioners while also cutting particle matter influx by 30%,
thereby decreasing the amount of cleaning work needing to bedone by employees. It has earned great praise from customers for
its contribution to labor and energy savings in stores.

Positive-pressure control system
Before installation: Influx of dust and particles

Influx ofoutside air

After installation: No influx

Outside air
influx controlled• 10% energy saving*• 30% reduction in particle
matter influx**Figures based on a verification test

Fuji Electric Report 202026

Power Generation
To address changing market conditions, we will focus on
renewable energy and distributed power sources while
expediting the transformation of our business portfolio tostrengthen our after-sales business and enhance profitability.

Major Initiatives in Fiscal 2019–2020

Tadao Horie
Executive Officer
Corporate General Manager,
Power Generation Business Group

Expanding orders for renewable energy

geothermal resources all over the world.

Solar and wind power

Hydro power

For solar and wind power generation, using storage

Recent years have seen growth in demand for hydro power

batteries and further combining them with our power

generation as a low-cost, stable power source in Japan,

conditioning systems and controllers, we are forging ahead

and scrap-and-build*2 projects for aging equipment arewith solution-driven proposals that contribute to powerincreasing as a result.

system stabilization and peak shifts.
In fiscal 2019, in collaboration with an overseas

Net Sales

Operating Income(Billions of yen)(Billions of yen)

• Renewable and new energy
Geothermal power, Hydro power,
Solar power, Wind power, Fuel cells

107.0

80.0

• Thermal Power

4.4 %FY2018Results

5.6

FY2019Results

FY2023Medium-Term
Management Plan
(Target)

FY2018Results

FY2019Results

FY2023Medium-Term
Management Plan
(Target)Sales Ratio by Carbon free /Carbon emitting

Sales Ratio by Service /New Installations

(%)

(%)

• Extensive delivery track record inhydro power

38

26

44

37
72

• Power storage control technologies
and economic efficiency in solar andwind power

62

FY2018Results
Carbon free

69

74

56

63
28

FY2023Medium-Term
Management Plan
(Target)Carbon emitting

FY2018Results

FY2019Results

Service31
FY2023Medium-Term
Management Plan
(Target)New Installations
FY2019Results

Medium-Term Management Plan Policy

and differentiated product lineup, including our hybrid servo
system*3, which won a New Energy Award in 2019.

orders to meet growing demand for renewable energy inJapan and overseas.

Expanding our after-sales business

Geothermal power

In maintenance and replacement services, we will continue

In geothermal power generation, where we have a leading

promoting onshore and onsite projects that bring together

market share* , we are proceeding with construction of a

all functions in each customer’s region, from sales tofacility in Kenya, our first geothermal project in Africa.

procurement, installation, and after-sales service.

In fiscal 2019, we received an order from the Onikobe

In fiscal 2019, we enhanced our maintenance service

Geothermal Power Plant in Japan and an order for a newproposals and achieved a year-on-year sales increase of

project in Kenya, as we did in the previous year.

around 10%.

In fiscal 2020, we will aim to expand businessIn fiscal 2020, we will expand our after-sales business byopportunities by adding a small-capacity-generation

strengthening our local networks, centered on our bases inpackage to our lineup for Japan to support a wide range

the Middle East, the Philippines, Vietnam, and Indonesia.

of geothermal resources. Overseas, we will continue*1 Based on actual figures for the past 20 years (Fuji Electric research)*2 Entails disposal or decommissioning of aging and inefficient equipment and replacing
it with new equipment to achieve better efficiency*3 A turbine operation mechanism in a hydro power generation facility

focusing on Southeast Asian and African regions as priority
targets and accelerate marketing activities in countries with

Close Up!

Expanding orders for solar power generation facilities with storage batteries
In Southeast Asia, a major challenge is to develop

Deploying our abundant know-how and track record,

infrastructure in areas that are not serviced by electricity

we collaborated with overseas subsidiary Fuji ElectricResponding to changes in the market environment as

will capture replacement demand for power generation

due to weak power grids. This has prompted numerous(Thailand) Co., Ltd. to win two EPC* contracts for our

the world moves toward decarbonization, we will focus

equipment while expanding our after-sales business andplans to utilize solar power generation as a distributed

first overseas solar power generation projects. With thison renewable energy and distributed power sources toimproving profitability.

power source. Solar power become increasingly costachievement as a foothold, we will continue aggressively

competitive because it is inexpensive to operate.

expanding sales in Southeast Asia to foster the

However, using solar as the primary power source

proliferation of renewable energy.

requires installation of storage batteries that can supply* Abbreviation for “engineering, procurement, and construction.” EPC contracts
cover everything from design to construction, installation, and test operation.

transform our business portfolio. At the same time, we

Awareness of Market Needs and Business Opportunities
Since the enactment of the Paris Agreement, an international

economic growth in Southeast Asia and Africa, which haveframework for addressing climate change, moves toward

abundant geothermal resources. In Japan, meanwhile,

decarbonization have gathered pace worldwide, and theaging hydro power generation facilities are being replaced

market for renewable energy sources, which do not emit

and upgraded to enhance generation efficiency, reflecting

greenhouse gases, is growing as a result.

expectations that hydro power generation can help reduce

In addition to rising demand for mega solar power in27

project, and we also received two orders in Japan.

1Strengths• One-stop proposal capabilities in
geothermal power, and industry
leading delivery track record

7.0 %

2.3

Supplied to• Engineering capabilities across thewhole plant

2.1 %Operating Margin

4.8• Nuclear power-related equipment

Japanese and overseas power generationcompanies

strive to increase orders by making full use of our distinct

In fiscal 2020, we will continue working to increase

109.9

our frontline response capabilities. At the same time, we willsubsidiary, we received an order for our first overseas solar

environmental impact and risk.

Southeast Asia, demand is growing for solar as a small-In the maintenance and renewal of power generation

scale distributed power source. Demand for geothermal

equipment, the need to enhance capacity utilization ratio

power generation is also increasing on the back ofand operability is growing.

Fuji Electric Report 2020

Growth Strategy

Business Areas

To address this demand, we will continue strengthening

electricity at night when solar cannot generate power. To
ensure stable power supply, there is growing demand touse storage batteries for optimal control.
By combining storage batteries with our power
conditioning systems, we have amassed strengths in
power control optimization. Moreover, we have a solid
track record in the production of power generationequipment. These include equipment for the Suzuran
Kushiro-cho Solar Power Plant, one of Japan’s largest
solar power stations with storage batteries.

Suzuran Kushiro-cho Solar Power Plant (Hokkaido, Japan)

Fuji Electric Report 202028

Measures to Reinforce the Operating Foundations
Initiatives to Address the Main Environmental, Social and Governance Issues

We are reinforcing our operating foundations from the perspectives of the environment, society,and governance to improve our corporate value over the long term.

To enhance our long-term corporate value, we are

Fuji Electric Corporate Activities and SDGs/CSR
Fuji Electric’s corporate philosophy is to “contribute to

Sustainable Development Goals (SDGs)

prosperity,” “encourage creativity,” and “seek harmony with the

Economics

SocialEnvironmental

Fuji Electric
Corporate Philosophy
Management Policies

environment,” and the Company bases its management policies
on contributing to the creation of a sustainable society throughreinforcing our operating foundations and supply chain bySociety: Promote respect for human rights and activities

identifying material issues to be addressed in the practiceof diverse human resources and reform our workstylesof our Corporate Code of Conduct from the perspectives

Governance: Ensure global compliance and furtherof the environment, society, and governance.

strengthen risk management in response to increasing

Material issues

variety of management risks

Environment: Address global warming through all of ourits energy and environment businesses. This is in line with thecorporate activities guided by the Environmental Vision 2050

international community’s efforts to integrate economic, social, andenvironmental improvements to achieve the SDGs. Our corporate

Corporate Social Responsibility (CSR)

social responsibility is to take corporate action to contribute toEnvironmentof Conduct

Society

into practice, there by promoting initiatives for material issues from

Governancethe perspectives of the environment, society, and governance (seethe next page).

Field

Environment

achieving the SDGs and to put our Corporate Code of Conduct

Fuji Electric Code

Code of Conduct romote 3Rs (reduce, reuse, recycle) in relation toPproducts and production activities

Human rights

Implement human rights due diligence

Safe and healthy
workplacesImprove occupational health and safety awarenessamong employees
Health and safety audits to eliminate occupational
accidents
Ensuring employee health and mental health care

Activities of diverse
human resources

 xpand areas in which female employees makeEcontributions
Utilize employees over 60
Broaden scope of duties performed by differently
abled employees

Work-life balance dvance workstyle reformAOffer work-life balance support and foster
conducive workplace environments

Human resources
development

 nhance development of future managementEcandidates
Strengthen global human resources development

Respect and value
our customers

Improvement of customer
satisfactionImprove product and service quality
Enhance customer support and service systems

Website(Refer to the following
website)Respect and value
our business
partners

Value chains for supportinga sustainable society ractice fair and impartial procurement
PFulfill social responsibilities together with business
partners

Supply Chain
P60

Community outreach ontribute to communities through activities forCprotecting the natural environment and promoting
youth development
Engage in community outreach at major sites ofoverseas operations

Social Outreach(Local Communities)
P62

Effective complianceprogram implementation

 stablish, revise, and abolish internal rules andE
conduct oversight, audit, and education based on
the Fuji Electric Compliance Program
Cultivate mindset of strict compliance among
employees

Compliance
P53

Risk management

 einforce business continuity capabilities
R
Strengthen data security

Risk management
P55

Top management willthoroughly practicethis Code of Conduct

Improvement ofmanagement transparency
and oversight function

Reinforce corporate governance framework

Corporate Governance
P41

Respect and value
our shareholders
and investors

Constructive shareholder
and Investor engagement

 onduct timely, fair, and impartial information
C
disclosureEnhance shareholder and investor engagement
activities

Corporate Governance
P48

Respect and valueinteraction withsociety

Board of Directors

Make global
compliance a toppriority

Executive Committee
President

SDGs Promotion Committee

29

Executive Officers
Standing Audit & Supervisory
Board Members

Fuji Electric Compliance
Promotion Committee

Environmental Vision Promotion Subcommittee

Human Rights Promotion and Human Resources Empowerment Subcommittee

Deliberate and evaluate policies and measures and manage the progress torealize the Environmental Vision 2050
• Realize a low-carbon society• Realize a recycling-oriented society• Realize a society in harmony with nature

Deliberate and evaluate the policies and measures and manage the progress

Fuji Electric Report 2020

to incorporate respect for human rights into management measures
Deliberate, supervise, and evaluate policies and measures to promote
diversity and increase job satisfaction

Governance

Deliberation
ReportEnvironment
P31

Measures to Reinforce
the Operating Foundations

Society• Committee Members Executive officers of the business, sales, and corporate divisions• Roles	1. Identify the company’s material issues, business opportunities and risks from an SDG perspective
2. Incorporate the material issues into strategies, implement and evaluate the strategies (PDCA management)• Material Issues	1. Promote the Environmental Vision 2050
2. Promote human rights and human resources development

Relevant Pages

Creation of a recyclingoriented society

Respect and value
all people

SDGs Promotion Committee Roles and Material Issues

Relevant SDGs

Realization of a lowcarbon society

Respect andvalue the global
environment

SDGs to be Addressed throughFuji Electric’s Companywide Activities
Priority SDGs to be Addressed through Energy andEnvironment Businesses

Major Initiatives
 educe society’s CO2 emissions through provision
Rof energy-saving productsR educe greenhouse gas emissions during production

Promoting the SDGs
In June 2019, we announced nine SDG targets that we will focus
on in all of our corporate activities to contribute to achieving the
SDGs. We followed this in April 2020 by establishing the new
SDGs Promotion Committee for deliberating, deciding, andevaluating the promotion of the SDGs at the management level.
We identify from an SDG perspective the key issues along withthe business risks and opportunities for our company, incorporate
them into our strategies, and evaluate our efforts to implement
them. Our environmental efforts are focused on fulfilling ourEnvironmental Vision 2050, which is mainly focused on realizing a
low-carbon society; and our social efforts prioritize the promotionof human rights and human resources development. We have set
up subcommittees dedicated to each topic that will deliberate ourpolicies and strategies, supervise, and evaluate our efforts.
The committee’s discussion content is reported to anddeliberated by the Executive Committee and the Board of Directors.

Key Issues

Human Resources
P37
Website(Refer to the following
website)Environmental, Social, and Governancehttps://www.fujielectric.com/company/csr/index.html
Fuji Electric Report 202030

Environment
Environmental promotion system

and Science-based Target (SBT) Certification Project

We will use the energy and environment technology

The Environmental Vision Promotion Subcommittee submits

each have teams with members from throughout our

we have cultivated to help address environmental issues

the environmental activities it deems as priorities to theorganization to create policies and strategic plans. Fuji

SDGs Promotion Committee, which examines the issues

Electric is continuously taking various approaches toand reports to the Executive Committee, which further

resolve environmental issues.

across the supply chain.

deliberates the issues and reports to the Board of Directors.
The Environmental Manufacturing Working Group,

Michio Abe

Fuji Electric Environmental Promotion Systemcomposed of environmental managers from the

Senior Managing Executive Officer
Corporate General Manager, Production & Procurement Group

operating sites, promotes initiatives aimed at fulfilling theEnvironmental Vision 2050. The members incorporate
the environmental goals and initiatives into their individual

The expanding efforts of the international community

Basic Environmental Protection Policy

to fulfill the SDGs is making it increasingly important
to engage in environmental activities such as
mitigating global warming, efficiently using natural
resources, and preserving biodiversity.
Based on these social movements, in June 2019
to clarify the direction of environmental activities
that we should work for the long term.
We will use our full array of energy andenvironment technology to create a supply chain
fully dedicated to achieving the goals to realize a

Offering products and technologies that contribute to
global environmental protection

2

Reduction of environmental burden throughout product lifecycles

3

Reduction of environmental burden in business activities

4

Compliance with laws, regulations, and standards

5

Establishment of environment management systems andcontinuous improvements of the systems

6

Improvement of employees’ environmental awareness andsocial contribution

7

Promotion of communication

greenhouse gas emissions, promoting the 3Rs(reduce, reuse, and recycle), and reducing theimpact on ecosystems.
For fiscal 2020, we created the Environmental
Vision Promotion Subcommittee under the newly
established the SDGs Promotion Committee and aframework enabling steady advancement toward
the Environmental Vision 2050. In addition, in June
we declared our support for the Task Force on
Climate-related Financial Disclosures (TFCD).
Fuji Electric will continue the global developmentof its energy and environment businesses toEnvironmental Management System
to fulfill environmental goals andreduce environmental risks

Environmental
Vision Promotion
Subcommittee

the full force of our abilities into our initiatives for theenvironmental issues identified as important. The TCFD

Special Purpose• TCFD Study Project• Green Supply Chain
Construction Project• SBT Certification Project

Study Project, Green Supply Chain Construction Project,

Respond to priority environmental issues

Supply Chain Initiatives for Environmental Vision 2050
(Upstream)

Supply Chain(Downstream)

Business Partners

Fuji Electric

Customers

Raw Materials and Products
Mining, manufacturing, disposal,
transport, etc.

During Production
1. CO2 from fuel burning and other greenhouse gases
2. Power plant CO2 emissions due to our electricity usage

Product Usage
Disposal, transport, etc.

Fuji Electric’s Environmental Vision 2050
We aim to achieve a “Low-Carbon Society,”“Recycling-Oriented Society,” and “Society in Harmony with Nature”
by expanding use of Fuji Electric’s innovative clean energy
technology and energy-saving products.

Realize a Low-Carbon Society
Target a reduction of 80% or more in greenhouse gas emissions acrossthe supply chain

Realize a RecyclingOriented Society

Realize a Society inHarmony with Nature

Promote green supply chains and3R* activities to reduce
environmental impact to zeroAim for zero influence on
the ecosystem by corporate
activities contributing to biodiversity

Fiscal 2030 Target

help realize a sustainable society.

Reducing Environmental Burden• Reduce greenhouse gas emissions
during production by 31%(Greenhouse gas emissions’ baseyear: Fiscal 2013)* Reduce, reuse, recycle

Fuji Electric Report 2020

The SDGs Promotion
Committee

Fuji Electric’s Environmental Vision 2050

contribute to addressing environmental issues and31

Environmental Manufacturing
Working GroupWe have also established individual projects to focus

and a society in harmony with nature.
of our primary environmental targets for reducing

Executive Committee

carrying out the initiatives.

low-carbon society, a recycling-oriented society,In fiscal 2019, we successfully achieved each

Permanent

Measures to Reinforce
the Operating Foundations

Fuji Electric created the Environmental Vision 2050

1

divisions and are responsible for managing and fully

Board of Directors

Creating Environmental Value• Reduce 50 million tons of
CO2 emissions throughproducts annually

Target a reduction of 80% or more in greenhouse gas emissions across the supply chain
Fiscal 2030 Target

LowCarbon
Society

Reduce greenhouse gas emissions during production
by 31%

Reduce 50 million tons of CO2 emissions throughproducts annually
Clean energy, energy-saving products

RecyclingOriented
SocietySociety inHarmony
with Nature

Green procurement
Cooperation withbusiness partners

Eco-friendly products (Product 3R)
Waste reduction, water recycling during production
Reduction of environmentally hazardous
chemical substances
Environmental preservation activities

Eco-friendly products

Close Up!

Declaration of support for the TCFD

Selection to the CDP A List

Fuji Electric has declared its support to the Task
Force on Climate-related Financial Disclosures(TCFD), an international framework for analyzing anddisclosing the financial impact of climate change.
As we pursue the Environmental Vision 2050, theCompany will analyze the risks and opportunities thatclimate change brings to its business and value chain
along with the financial impact that accompanies
them. The information will be actively disclosed andincorporated into our management strategies.

In fiscal 2019, the CDP* certified Fuji Electric as an “A
List Company” with excellent climate change initiatives
and information disclosure. Fuji Electric was one of 38
Japanese companies on the A List.
* The CDP is an international NGO engaged in environmental activities, suchas related to climate change. The CDP collects, analyzes, and evaluates
information on environmental activities conducted by major companies anddisclose the results to institutional investors.

Fuji Electric Report 202032

Realize a Low-Carbon Society
Reduction of society’s CO2 emissions
through products

market for clean energy (geothermal power generation,

Environmental Vision 2050. In fiscal 2019, we prioritizedsolar power generation, biomass power generation) andReduction of greenhouse gas emissions
during production

Our total CO2 emissions from our product operations

energy-saving products (general-purpose inverters, power

We manage and seek to reduce the CO2 and otherachieved our targets for the year. We are aiming to

declines when customers use our clean energy andsemiconductors).

investing in energy-saving production equipment andgreenhouse gases (GHG) generated during the production

achieve our fiscal 2020 targets by investing further inenergy-saving products. This is part of the goal in our

The contribution from our leading products, or powerprocess at our factories. We set annual target values

abatement apparatus to reduce GHG emissions from theEnvironmental Vision 2050 to “contribute to reducing

electronics systems and electronic device products is 62%,

designed to lead us to achieve the 2030 targets in the

manufacturing lines of our semiconductor factories.

society’s CO2 emission volume through our products.” We

which is relatively low compared to their sales composition

calculate the contributions to CO2 emissions reductions

ratios. And we are working to increase their contribution tomade over a full year of operation by all products shipped

reducing CO2 emissions. In fiscal 2020, we aim to increasesince fiscal 2009 (products within their average life spans).

the contribution by mainly expanding sales of low-loss
insulated-gate bipolar transistor (IGBT) modules.

In fiscal 2019, we achieved our goals by supplying the
Fiscal 2019 Result for the Year
Environmental Vision 2050

FY2019 Target

This year’s target achieved
36.51 million tons annually(Exceeded the target by 14%)32.10 million tons annually ower Electronics Systems General-purpose invertersP
and top runner motors

The CO2 emissions reduction effect when a product is in use is:• Clean energy: Average CO2 emission volume during thermal power generation minus CO2 emission volume
when the product was introduced• Energy-saving products: CO2 emission volume prior to introducing the product minus after introducing the product

Electronic Devices Power semiconductors
Food and Beverage Distribution
 ower GenerationP
generation* Calculated based on the Ministry of Economy, Trade and Industry Guideline for Quantifying Greenhouse Gas Emissions
Reduction Contribution (stock-based)

Contributions to CO2 Emissions Reductions through Products(Million tons)

10.31

10.34

0.89

3.95

6.01

0.20 3.74
0.44
1.60
2013
Result

4.08

36.51

34.00

12.62

0.96 4.88

10.59
0.94

4.43

16.44

16.74

18.07

17.91

2018
Result2019
Target2019
Result2020
TargetPower Electronics Systems

Electronic Devices

1.78

68%

Contributions to CO2 emissions reductions

36.51 million tons

75%

60.8
109.9

28.25

535.5

62%
13%

1.08

(FY)

Power Generation

Power Electronics Systems
Other
Elimination(47.4)

410

390

360

350

Environmental activities -40,000 tons (year on year)

370

Main Measures• Energy saving measures (7,000 tons)• Increased purchase of renewable electricity (1,000 tons)

10
20[Wuxi and Shenzhen factories]• Increased private power generation of renewable energy (1,000 tons)[Addition of solar power equipment at the Thailand factory]

360• GHG offsetting (20,000 tons)

280[Elimination of solvents at the Tsugaru and Changshu factories]• Power coefficient reduction effect (8,000 tons)
100

100

90

80

90

70

2013
Result2018
Result2019
Target2019
Result2020
Target2030
ResultPower Electronics Systems

Electronic Devices

Food and Beverage Distribution

Effect of reduced production -20,000 tons (year on year)(FY)

Power Generation

35%

104.4
137.4

Food and Beverage Distribution

10480
20 490 10 460
10
10
20
20
20

Figures in parentheses are the volume of the reduction in greenhouse gases

Net Sales

8.75

2030
Target-60,000 tons

520

10
20

Geothermal and hydro power¥900.6 billion

15.96

49%

Close Up!

3%

Total of Power Electronics
Systems andElectronic Devices Segments

Addition of solar power generation equipment at the Thailand factory cuts CO2
emissions by 22%
Fuji Electric Manufacturing (Thailand) Co., Ltd. added a solar power generation facility
with capacity of approximately 900 kW to the switchgear and control-gear system factory

Electronic Devices

Food and Beverage Distribution

Power Generation

established in 2019, raising the factories total power generation capacity to 1,400 kW.
Solar power now comprises approximately 36% of the electricity the company uses, which
reduced its CO2 emissions by 22% from the previous year.

Close Up!

Solar power with storage batteries reduces CO2 emissions by approximately 60,000 tons
Fuji Electric delivered power generation equipment with storage batteries to the

Our efforts to save energy include actively using our own products. The Fukiage Factory, which mainly produces

9.1% and CO2 emissions by 22.4% from fiscal 2013. The ZEBLA system saves energy byoutput fluctuation control and ensures a stable supply of clean energy. The power

predicting the amount of electricity that will be needed during peak consumption and otherplant reduces annual CO2 emissions by 59,864 tons*1 and provides electricity that isperiods. Automating the calculations for predicting power volume needs enables energy

equivalent to the annual consumption of approximately 21,300 households*2.

Fuji Electric Report 2020

Saving energy using our ZEBLA software

its energy consumption in fiscal 2015. In fiscal 2019, the system helped the factory lower its energy consumption by

February 2020. Incorporating storage batteries to a mega solar operation provides

33

Fukiage Factory

Fuji Electric Manufacturing(Thailand) Co., Ltd.

magnetic switches and molded-case circuit breakers, began using the ZEBLA power prediction system to reduce

Suzuran Kushiro-cho Solar Power Plant, which began commercial operation in*1. Calculation of CO2 emissions reduction: Annual power generation x CO2 emission factor
Output 92 MW, CO2 emission factor: 0.619 kg-CO2/kWh (weighted average of thermal power generation)*2. From the website of Tokyu Land Corporation

479,000 tons/year

Reduction of Greenhouse Gas Emissions during Production

Vending machines

Net Sales and Contributions to CO2 Emissions Reductions
through Products (FY2019)

54.74

FY2020 Target

FY2019 Result
This year’s target achieved
456,000 tons/year(down 12% from the previous year)(down 15% from the base year)(Thousand tons)

Main Contributing Products

CO2 Emissions Reduction Contribution = CO2 reduction effect when product is in use x number of units
being used in the market for the fiscal year

31.62 32.10

34.00 million tons annually540

Calculation of CO2 Emissions Reduction Contribution

FY2019 Target
488,000 tons/year

Measures to Reinforce
the Operating Foundations(FY2030 Target)
Contribute to reducing society’s CO2
emission volume by 50 million tons
annually through our products

Environmental Vision 2050
(FY2030 Target)
GHG Emissions During Production
Reduce by 31% (from fiscal 2013)* Power coefficientJapan: 0.463 kg-CO2e/kWh Overseas: IEA emission factors (latest average power coefficient for each country)

FY2020 Target

FY2019 Result

Fiscal 2019 Result for the Year

Suzuran Kushiro-cho Solar Power Plant(Hokkaido, Japan)

saving in real time. The Energy Conservation Center, Japan (ECCJ) awarded the Fukiage
Factory the Chairman Prize of ECCJ at the Fiscal 2019 Energy Conservation Grand Prize for
Excellent Energy Conservation Equipment in recognition of its energy conservation efforts.

The ZEBLA power prediction
systemFuji Electric Report 202034

Realization of a Recycling-Oriented Society

Realizing a Society in Harmony with Nature

We aim to realize the 3Rs across the supply chain fromplastic in Japan and steady progress improving our final

We design and manufacture our products to have no

All our operating bases also conduct environmental

product development to procurement, use, and final

disposal processes overseas.

adverse impact on ecosystems so our customers canpreservation activities catered to specific local biodiversity

use our products with peace of mind. We set indicatorspreservation needs. Preservation activities in fiscal 2019
include planting mangroves (Fuji Electric (Malaysia) Sdn. Bhd.).

product disposal.

Our main issue at present is the lack of progress in

The indicators we use to measure our progress areworking with our business partners and customers to apply

for reducing the use of chemical substances (VOCs:

the reduction of the amount of waste sent to landfills andthe 3Rs. Our first step will be to strengthen the cooperative

Volatile Organic Compounds) that lead to environmental

In fiscal 2020, we will promote the CSR Procurement

water consumption. These indicators we use to evaluate

efforts with our business partners aimed at creating

degradation and incorporate the targets into our annual

Guidelines to raise the awareness of our suppliers about

our performance encourage us reuse the surplus materials

sustainable resource recycling. In fiscal 2020, we createdgoals and evaluate the result.

reducing the environmental impact of business operations.

and water generated in our production processes. And we

the Green Supply Chain Construction Project in which ourevaluate the achievement based on the annual targets.

procurement and environmental departments will work

Fiscal 2019 Result for the Year

We continued minimizing the amount of waste sent

together to promote environmental preservation efforts forEnvironmental Vision 2050

to landfills in fiscal 2019 and lowered the ratio of waste

our business partners. We are also continuing efforts tosent to landfills in Japan and overseas to 1.1%. We vastly

reduce the amount of waste sent to final landfills overseas

exceeded our targets due to progress reusing wastewith the aim of further lowering the final disposal rate.

Volatile organic compounds (VOCs)
Discharge volume
Under 1,694 tons

Fiscal 2019 Result for the Year
Environmental Vision 2050

FY2019 Target
Under 1,704 tons

FY2019 Result

Major Measures

This year’s target achieved
1,803 tons

• Reduction of solvent paint usage(Mie Factory, Food and Beverage Distribution)

Volatile Organic Compounds (VOCs) Discharge Volume

FY2019 Target
Ratio of waste sent tolandfills
Under 2.1%

(FY2030 Target)
Water consumption perunit of sales
1,800 tons / ¥100 million

Per unit of sales
1,800 tons / ¥100 million

Major Measures

This year’s target achieved
Amount of waste sent to landfills
345 tons
Ratio of waste sent to landfills
1.1%• Promote recycling of waste plastic (for producing cement)(Mie Factory, Food and Beverage Distribution)• Promote reuse of semiconductor packaging materials(Fuji Electric Power Semiconductor Co., Ltd.,Electronic Devices)

This year’s target achieved
Consumption
13,398,000 tons
Per unit of sales
1,500 tons / ¥100 million•C ountermeasures for filter membrane blockage inwater recycling equipment(Matsumoto Factory, Electronic Devices)•P romote water conservation(Fuji Electric (Malaysia) Sdn. Bhd., Electronic Devices)

1,738
76

8

1,257

1,090

159
2013

Water Consumption and Water Consumption per Unit of Sales(Tons)

Water consumption(Thousand tons)

3.2%
1.6%

1

907

790

1

198
84
2013
Power Electronics Systems Electronic Devices
Result: Ratio of waste sent to landfills

192
2018

Electronic Devices

111
2019

Food and Beverage Distribution(FY)

Power Generation

1.5

13,34813,47810,505

10,824

10,895

1,664

1,350

2013

2018

1,143
2019

340

928

13,398376

926

Close Up!

433

Advance examination of regulated substance content

543
152

1.5

1.1%

32

Power Electronics Systems

103
2018

915

Water consumption per unit of sales(Thousand tons / ¥100 million)

1.8

839

10
54 1,083
9
48

1,495

Amount and Ratio of Waste Sent to Landfills

Measures to Reinforce
the Operating Foundations(FY2030 Target)
Ratio of waste sent tolandfills
Under 1.0%

(Tons)FY2019 Result

3345

We acquire materials with low environmental impact from our business partners in accordance with Green Procurement

73
113

Guidelines and manage them.

156
2019

Food and Beverage Distribution(FY)

Power Generation

Power Electronics Systems
Result: Per unit of sales

Electronic Devices

Food and Beverage Distribution

With the increase from six to ten of the regulated substances subject to the Restriction of the Use of Certain(FY)

Power Generation

Hazardous Substances in Electrical and Electronic Equipment (RoHS)* in fiscal 2019, the Suzuka Factory, which
manufactures inverters, surveyed 381 of its business partners regarding the inclusion of regulated substances. The
survey confirmed that none of the 381 companies use regulated substances.
* RoHS regulated substances: Specific hazardous substances with restrictions for use in electrical and electronic equipment

Close Up!

Lower final waste disposal volume by 18 tons by reusing semiconductor
packaging materials
The Hokuriku Factory of Fuji Electric Power Semiconductor Co., Ltd., which assembles power semiconductor packages,

35

Contribution to SOx removal from ship exhaust gas
Sulfur oxide (SOx) is an environmental pollutant present in ship fuelthat is considered to be a cause of acid rain.
The SOx scrubber we launched in fiscal 2018 contributes tois reusing materials (sticks) for storing and safekeeping electrical module semiconductors. In fiscal 2019, it collected,

preventing air pollution by over 98% of the sulfur oxides contained

cleaned, and reused approximately 140,000 used sticks that would previously have been disposed of, which isin ship exhaust gas. We had delivered over 40 of the SOx scrubbers

equivalent to roughly 18 tons of plastic disposal. Prior to implementing the recycling program, it conducted a thoroughas of July 2020 and are currently expanding our lineup of products

investigation about the viability of reusing the sticks and verified that there would be no adverse effect on our products.

designed for large vessels.

Fuji Electric Report 2020

SOx scrubber

Fuji Electric Report 202036

Human Resources
Promoting the advancement of women

Major Initiatives

Among our diversity initiatives, we are especially focused on

We are actively investing in our human resources tostrengthening our efforts to promote the active participation ofachieve the targets of the Medium-Term Management Plan

women in the workplace. In a society with a declining birthrate,
aging population, and diversifying values, demonstrating ourand to establish our foundations for sustainable growth.

comprehensive strength as a company is essential to generating
sustainable growth, and further boosting the contributions by

Takeshi Kadoshima

female employees are critical.

Managing Executive Officer
General Manager, Human Resources and General Affairs Office

We are promoting women’s active participation by stepping

 ctive recruitment of female science and engineering studentsAthrough the female employee science and engineering project team
Systematic development of female managers
Implement mentor system for junior and senior female employeesImplement career continuity support system(registration system for requesting reemployment,
overseas transfer/leave system for spouses)

up our hiring of women and actively providing training to increase
the number of female employees in supervisory positions. We

One of Fuji Electric’s management policies statesthat we will “maximize our strengths as a team,respecting employees’ diverse ambition,” andrespecting human rights, ensuring occupational
health and safety, and protecting employee healthare fundamental for everything. We are proactively
active employee participation, cultivating our

The Fuji Electric Code of Conduct declares that we “respect
and value all people,” and we are implementing measuresand constructing employee treatment systems to support
employment and success of diverse human resources.

human resources, and properly deploying

Revising the treatment system for employees
over 60 and highly skilled employees

our personnel for medium- and long-term

In order to promote active employee participation, we revised ourdevelopment of our business.

system for handling employees, of which measures were geared to

We believe it is important that our human

employees aged 60 and over and highly skilled employees.

resource measures encompass a broad range

Japan’s declining birthrate and aging labor force compositionof issues inside and outside the Company andare making it increasingly important to retain older employees withthat they are implemented in a timely manner

advanced skills and experience. We have introduced the Seniorreflecting the responses in our annual employee

Task System in which management-level employees aged 60 andawareness surveys.

over receive treatment matched to the value of their work. The

We responded to the changing composition of

aim is to boost motivation of individuals who continuously show

the labor force and need for stronger manufacturingsignificant performance by paying as high compensation as whencapabilities by revising how we handle employees

they were under age 60. We have also outlined the “Employment

with special skills and who are aged 60 or over,

Guidelines for Employees over 65” to create an environment where

so that employees with strong performance could
be better rewarded. Furthermore, to promote theactive participation of diverse human resources,
particularly female employees, we are continuously
seeking to acquire individuals with science andengineering backgrounds and providing training forcareer advancement.
In addition, we are implementing workstyle reforms
to improve their work efficiency by creating work
systems and environments that will give employees
greater flexibility to make the best use of time andlocation. At the same time, we are proactively
developing future management candidates essential

employees with advanced skills and expertise can continue to play
an active role in the Company up to age 75.
We have also introduced the Manufacturing Meister System tohighly evaluate and treat technicians with specialized expertise andskills who are excellent at improvement and streamlining. While
providing clear examples of consummate technicians, the programprovides bonus payments to the designated Manufacturing
Meisters with the aim of boosting employee motivation andstrengthening the manufacturing capabilities of the entire factory.
We are also creating a training system for ambitious technicians
to acquire the skills needed for high-level improvement andstreamlining capabilities.

human resources in Japan and overseas that
These efforts are aimed at enhancing and

Employees
over 60

activating our human resources as part of our“ongoing reinforcement of operating foundations”
for our sustainable growth.

37

Fuji Electric Report 2020

2018

2019

2020

2023
(Target)Ratio of females hired*1

20%

21%

22%

20%

Ratio of female managers*2

1.9%

2.3%

2.5%

3.0%

No. of female employees insupervisory positions*3

225

249

268

400

(FY)

we created a project team of female employees with scienceand engineering backgrounds to actively recruit female university
students, and ultimately women accounted for 22% of our newhires in April 2020.
Initiatives to increase the number of female employees insupervisory positions include annual supervisor interviews withjunior staff to identify employees with strong career ambitions.
The employees are registered as eligible to participate in the
Company’s priority career development program, under which
detailed career development plans are created for accumulating
on-the-job experience and receiving selective training to further

Data collected from Fuji Electric, Fuji Electric FA Components & Systems, Fuji Office &Life Service, Fuji Electric IT Center, Fuji Electric Finance and Accounting Support,
Fuji Architects and Engineering, and Fuji Electric Frontier
Data for females hired collected from Fuji Electric and Fuji Electric FA Components& Systems*1 Graduates from universities or technical colleges*2 Managerial positions or above*3 Assistant manager or above

their advancement to higher positions in the Company.

Workstyle Reforms
We seek to provide a balanced approach to workstyles throughmanagement of their subordinates. These activities are raising

the Companywide Pro-7 Activities aimed at enhancing work

awareness among all employees and encouraging them to revise

efficiency and quality to improve productivity and by embracing

their work practices while also ensuring compliance with the laws.

a perspective on work-life balance characterized by “focusing on

In addition to recommending they take five consecutive days off as

one’s job while at work and resting properly outside of work.”in the past, our initiatives to encourage employees to use vacation

In fiscal 2019, following the government’s law amendments

time include a system strongly supporting the planned use of paidin April for mandatory annual paid leave and an upper limit on

leave. These efforts have increased the average number of annual

overtime work hours, we intensified efforts to reduce overtime

paid leave days being taken by employees.

work and to encourage employees to use vacation time, both ofwhich had been promoted under companywide policies.

In addition, in fiscal 2017 we introduced the Location Flexible
work systems enabling employees to work in satellite or home

Measures to reduce overtime work include creating visualized

offices with the aim of providing flexibility so employees cantracking of actual work hours and improving productivity

maintain balanced and efficient workstyles. We also have a flextime

at worksites with challenges and issues by practicing self-

system, and at the headquarters are testing a “sliding work hours”

monitoring of their work and reviewing the way they work. We

system allowing employees to set multiple start and finish times inare also strengthening the management support function ofadvance and shift the times they arrive and leave work.

the companywide time management system and setting noThis flexibility proved advantageous during the COVID-19

overtime days. In addition, we are providing training, posters, andpandemic, and we will continue to develop other systems tobroadcasting to help managers become more aware about time

support the new workstyles of our employees.

Paid Vacation Days Acquired Annually andOvertime Work Hours

Use of the Flexible Location Work System(Total Number of Users)Review of Employee Treatment System

for sustainable business growth and the global
strengthen our business worldwide.

Female Employees and Managers

set a target for 20% of our hires to be women. To achieve this,Measures to Reinforce
the Operating Foundations

working on initiatives that include promoting

Promoting Active Participation ofDiverse Human Resources

Skilledemployees

Senior task
systemTreated according to job content
after age 60

Employment
guidelines afterage 65Create environment for hiring skilled
and knowledgeable employees up
to the age of 75

Manufacturing
Meister System

Develop highly skilled employeeswith the capabilities to improve andstreamline work

(FY)

2018

2019

Average overtime work hours

24.04

23.83

Average number of days of paidvacation days acquired annually

14.5

16.5

(FY)

2018

2019

Home office

1,940

2,893

Satellite office

457

314

Data collected from Fuji Electric, Fuji Electric FA Components & Systems, Fuji Electric
Finance and Accounting Support, Fuji Office & Life Service, Fuji Electric IT Center,Fuji Architects and Engineering, Fuji Electric Frontier, and Fuji Electric F-Tech

Fuji Electric Report 202038

Recognizing the Status of Employee Awareness and Responding to Issues
We conduct annual employee awareness surveys to remain in touch

through a training system for line managers to refresh theirwith employee perspectives and perform fixed-point observation

understanding of the line manager’s role and necessary skills andon employee views on company and workplace satisfaction, senior

expertise through group training sessions and e-learning repeatedmanagement, work motivation, and trust for superiors. The survey

once every two years.

Close Up!

Human rights due diligence measuresresults are reported to the Executive Committee, and the analysis

We conduct human rights due diligence in our relationships

by the Japan Electronics and Information Technology

results for each organization are delivered to the senior manager

within all corporate activities to recognize, prevent, andIndustries Association (JEITA). In fiscal 2020, we plan toof each department and representatives of subsidiaries, whodeal with adverse human rights harm based on the United

develop guidelines for all operating sites and subsidiaries in

Nations Guiding Principles on Business and Human Rights.

Japan and overseas and create self-inspection checklists

In fiscal 2019, we formulated the Guidelines for Respect

based on the guidelines. The results of the checks will be

Planimplement improvement measures.

(Pose questions)

The results of the employee awareness survey in fiscal 2018indicated a need to strengthen the line management carried out byof Human Rights of Employees for all domestic andreported back to the operating sites and subsidiaries so

middle managers (manager rank).

overseas consolidated companies with the aim of making

they can take steps to make any necessary improvements.

Using these results, in fiscal 2019, we constructed a mechanism

ActionDo(Perform tasks)(Conduct surveys)

for superiors and subordinates to share their medium-term career
objectives and created a visualization scheme at the workplace

all employees aware of our Policy for Human Rights of theWe have also established the Fuji Electric CSR

Employees, which is based on international standards for

Procurement Guidelines for human rights due diligencehuman rights. The guidelines, which clarify specific actions

initiatives in our supply chain and are conducting self-

for a year-by-year goal management system to monitor progress

Check

to take, were formulated in reference to materials including

assessment CSR surveys at our major business partners.

and apply a PDCA cycle of setting a target, performing the job,

(Analyze survey
results)

the Guidelines for Responsible Business Conduct created* Please refer to page 60 for details about our supply chain initiatives

assessment, and setting a new target for the next fiscal year. We
PDCA Cycle for Understanding Employee Awareness

Activities

Measures to Reinforce
the Operating Foundations

also set up a system to raise the level of middle management•E stablish and roll out the Guidelines for Respecting Employee Human Rights

Development of Human Resources

Employees

The Fuji Electric Code of Conduct declares our commitment

as well as overseas businesses. We also have them participate into strengthening our human resource development to support

training both inside and outside the company in a program designed

the growth of each employee and realize the full potential of

to provide experience and nurture skills that are difficult to acquire

teams, enhance the ability of employees to fulfill their potential,

through on-the-job training, such as learning management skills by

and increase investment in education to cultivate a workforce

experiencing different management styles and by working in teams

of individuals that are highly professional, demonstrate strong

with other training participants to formulate business proposals. A

leadership, and capable of working anywhere in the world.

total of 531 people have been trained since fiscal 2017, and about•C hecks by way of self-check sheets for domestic and overseas offices
and subsidiaries• Implement improvements based on results of checks•E stablish and roll out the Fuji Electric CSR Procurement Guidelines

Supply Chain (for business partners)•C onduct CSR surveys (self-assessment)•F eedback survey results to business partners

30% of the registered employees are currently participating in the

Fostering next-generation management

next stage of management development.

We are also taking active measures to foster future management

Succeeding in the Southeast Asia and India markets with our human resources

candidates who will lead our sustainable growth. Our humanGlobal human resources

Once we have a full understanding of the customer’s

resource development focuses on carefully selected young

We develop global human resources by sending employees out of

equipment and production processes, which is critical

employees, effective on-the-job training, and participation in

their home countries of Japan or elsewhere and develop the ability

in the industrial plant business, we have accelerated

overseas bases by actively dispatching Japanese engineers

selective training. We carefully select talented young employees

to create new value by working with local employees and teams

localization of sales staff who grasp the customers’ issues

to support and educate engineers at overseas sites. Sincefrom the three levels of general manager, manager, and assistantthrough both work and life experience.

and propose systems that meet their budgets and needs,

2016, we have been assigning engineers to full-time

Our development of global human resources is primarily

as well as human resources with the systems engineering

positions at overseas bases, mainly in Southeast Asia andearly in their careers, these registered individuals are systematicallypromoted through three initiatives: systematically assigning

capabilities to set up, design, install, start up, and maintain

India, such as Fuji Gemco Private Limited, Fuji Electric India

trained through a job rotation plan designed for them to accumulatetalented employees from Japan to other countries, assigning

the systems on site.

Private Limited. and Fuji CAC Joint Stock Company.

the required experience in multiple businesses and job categories

talented employees from overseas bases to Japan, andmanager and register them as management candidates. From

Human Resources Capable of Becoming Executive Officers

General Manager Level

strengthening the communication skills of employees in Japan.

2019 by appointing a plant sales chief to oversee the sales

The assignment of talented human resources in Japan is

activities of our sales companies in Southeast Asia. The

performed by registering talented employees with global potential

new post serves as the center point for representatives fromas candidates for overseas assignments and providing themour seven companies in Southeast Asia* and enhanceswith systematic training, which creates a resource pool for global

information sharing among the bases while improving our

personnel. The assignment of talented overseas employees toability to train and strengthen our local sales staff withJapan includes selecting about 20 individuals each year withon-the-job training.

promise to become local leaders and training them at the primaryManager Level

Team Leader Level

We strengthened our plant sales capabilities in November

contribute to engineering at our customers’ plants.
We are also increasing our support system for our* Fuji Electric Asia Pacific Pte. Ltd., Fuji Electric (Thailand) Co., Ltd., Fuji Electric
Vietnam Co., Ltd., PT Fuji Electric Indonesia, Fuji CAC Joint Stock Company,
Fuji Electric Sales Malaysia Sdn. Bhd., Fuji Electric Sales Philippines Inc.

We are also strengthening our engineering capabilities bybusiness site in their country to acquire product knowledge andbringing engineers from Fuji CAC Joint Stock Company oftechnical skills. Our programs to strengthen the communication

Vietnam to the Tokyo Factory to deepen their familiarity withskills of employees in Japan include language training for about 500

our systems, products, and all of our plants by having them

Fuji CAC sales staff and engineers participating in
product study sessions for industrial plants

people annually centered on employees who interact with overseas
bases and focusing on establishing strong communication skills.

39

Fuji Electric Report 2020

Fuji Electric Report 202040

Corporate Governance
As we work towards realizing our corporate philosophy, we are currently strengthening our corporate

List of Officers (As of October 1, 2020)

governance in an effort to enhance management transparency and oversight functions.

Directors

Basic Policies
In strengthening our corporate governance, our basic policies

stakeholders, ensure proper information disclosure andare to protect shareholder rights and ensure their equaltransparency, execute the duties of the Board of Directors, andtreatment, cooperate appropriately with non-shareholder

engage in dialogue with shareholders.
President and Chairman of
the Board of Directors

Michihiro Kitazawa

Corporate Governance Framework
Fuji Electric’s corporate governance framework consists(see page 43) comprising a majority of Outside Officers as anof the Board of Directors, which performs the functions ofadvisory body to the Board of Directors.

Elected Corporate Director

Outside Director

Outside Director

Outside Director

Kenzo Sugai

Toshihito Tamba

Naoomi Tachikawa

Yoshitsugu Hayashi

Director, Tokyo Century Corporation

Professor and Director, Center for
Sustainable Development andGlobal Smart Cities,
Chubu University

Also, in order to clarify the roles of management andmanagement supervision and making important decisions,execution, we have introduced an executive officer system inmanagement audit function. As a company employing thean effort to clearly define the responsibilities of each businesscorporate auditor system, Fuji Electric’s Audit & Supervisoryand streamline business execution. We are endeavoring

Board suitably undertakes audits of the Company’s Directors

to build an effective corporate governance framework withand Executive Officers and guarantees objectivity and neutrality.

the use of the Executive Committee, which discusses and

The Company actively appoints Outside Officers thatreports on important matters related to management as ansatisfy the requirements for Independent Directors / Audit

advisory body to the president and chairman of the Board of& Supervisory Board Members, endeavors to strengthen

Directors, as well as other committees tasked with planning

management supervisory and auditing functions, and has

and promoting key business strategy issues and key external

established the Nomination and Remuneration Committee

issues, such as legal compliance.

Director

Director

Director

Michio Abe

Masatsugu Tomotaka

Junichi Arai

Measures to Reinforce
the Operating Foundations

and the Audit & Supervisory Board, which is in charge of the

Audit & Supervisory Board Members

Corporate Governance Framework*Committees

General Meeting of Shareholders
Fuji Electric

Board of Directors

Audit & Supervisory Board

Comprising 8 Directors(including 3 Outside Directors)

Comprising 5 Audit &Supervisory Board Members(including 3 Outside Audit &Supervisory Board Members)

Consultation
Recommendations

Audit

Oversight
ReportNomination andRemuneration Committee

Appointment/
Dismissal

Appointment/Dismissal

Appointment/Dismissal

Accounting Auditors

Audit• Fuji Electric Compliance Promotion Committee• Health & Safety Committee

Key business strategy issues

Standing Audit &Supervisory Board Members
Internal Auditing Divisions

Committees*

Subsidiaries
Audit & Supervisory
Board Members

Board of Directors

Accounting Auditors

Executive Committee
President

Executive Committee
Members
Internal Auditing Divisions

Major Regulations and Committees Comprising Internal Control Systems
Corporate Philosophy
Fuji Electric Code of Conduct
Fuji Electric Job Authority Rules
Fuji Electric Compliance Promotion Committee

41

Fuji Electric Report 2020

Fuji Electric Compliance Program
Business Ethics Whistle-Blowing System
Fuji Electric Risk Management Rules

Standing Audit &Supervisory Board Member

Outside Audit &Supervisory Board Member

Outside Audit &Supervisory Board Member

Outside Audit &Supervisory Board Member

Junichi Matsumoto

Tetsuo Hiramatsu

Hirohiko Takaoka

Yuko Katsuta

President, Chuo-Nittochi Group
Co., Ltd.
President & Representative Director,
Chuo-Nittochi Group Co., Ltd.
President & Representative Director,
NIPPON TOCHI-TATEMONO Co., Ltd.

Yoshio Okuno

Legal compliance andother key external issues

Executive Officers
Deliberation
Report• SDGs Promotion CommitteeStanding Audit &Supervisory Board Member
Chairman of the Audit &Supervisory Board

Cooperation

Executive Committee
President

Key issues for Fuji Electric froman SDGs perspective

Fuji Electric Rules for Prevention of Insider Trading
Fuji Electric Group Contingency Plan for
Emergency Situations
Auditor Liaison Committee• Skills Development Committee• Production Technology Committee• Technology Development Committee• International Standardization Committee

Partner, Natori Law Office

Executive Officers
Position

Name

Division

President and Chairman of
the Board of Directors

Michihiro Kitazawa

General Management

Executive Vice President andElected Corporate Director

Kenzo Sugai

Assistant to the President, Corporate General Manager, Sales Group

Senior Managing Executive
Officer

Michio Abe

Corporate General Manager, Production & Procurement Group, In charge of Power Generation Business

Senior Managing Executive
Officer

Masatsugu Tomotaka

In charge of Power Electronics Systems Energy Business,
In charge of Power Electronics Systems Industry Business

Senior Managing Executive
Officer

Junichi Arai

Corporate General Manager, Corporate Management Planning Headquarters, General Manager, Export
Administration Office, In charge of compliance management and crisis management

Managing Executive Officer

Toru Housen

Corporate General Manager, Electronic Devices Business GroupManaging Executive Officer

Takeshi Kadoshima

General Manager, Human Resources and General Affairs Office

Managing Executive Officer

Yasuhiro Takahashi

Corporate General Manager, Food & Beverage Distribution Business GroupManaging Executive Officer

Shiro Kondo

Corporate General Manager, Corporate R&D Headquarters

Executive Officer

Kenji Goto

Deputy Corporate General Manager, Power Electronics Systems Energy Business Group

Executive Officer

Masahiro Morimoto

President and Representative Director, Fuji Electric FA Components & Systems Co., Ltd.

Executive Officer

Tadao Horie

Corporate General Manager, Power Generation Business Group

Executive Officer

Masashi Kawano

Corporate General Manager, Power Electronics Systems Energy Business Group

Executive Officer

Hiroshi Tetsutani

Corporate General Manager, Power Electronics Systems Industry Business Group

Executive Officer

Yoshitada Miyoshi

General Manager, President’s Office, In charge of SDGs Promotion, In charge of Public and Investor Relations

Executive Officer

Masato Miyake

General Manager, Legal Office, Corporate Management Planning Headquarters

Executive Officer

Keiichi Asano

Deputy Corporate General Manager, Food & Beverage Distribution Business Group

Fuji Electric Report 202042

Nomination and Remuneration Committee
a succession plan for the President and Chairman of theBoard of Directors(5) Policies and criteria regarding the remuneration of Directors
and Audit & Supervisory Board Members(6) Details of remuneration for Directors and Audit &Supervisory Board Members
In fiscal 2019, the committee had five members, three of whichwere Outside Directors. During the period July 2019 through July
2020, the committee convened on three occasions to deliberatematters and report the results to the Board of Directors.

Nomination and Remuneration Committee
Outside Director

Toshihito Tamba

43

Fuji Electric Report 2020

They are also provided opportunities after taking office toacquire necessary knowledge on an ongoing basis.
Before taking office, Outside Officers are briefed on the stateof the Company and the roles they are expected to perform.
After taking office, they have the chance to deepen theirunderstanding of the Company’s business by attending internal
technology presentations and inspecting production sites.

Outside Director Tachikawa listening to explanations
about products at the internal technology presentations

Activities of Outside Officers in Fiscal 2019
Outside Directors

Committee members
Outside Directors	Naoomi Tachikawa, Yoshitsugu Hayashi

NameStanding Directors	Michihiro Kitazawa, Kenzo Sugai

understanding of Fuji Electric’s management are appointed as
Outside Directors. For instance, managers of listed companies
or experts in academic fields closely related to Fuji Electric’s
business domains.
Persons familiar with the Company’s operations in general
who also possess expert knowledge and experience areappointed as Standing Audit & Supervisory Board Members.
Persons equipped with the expert knowledge andexperience required to undertake audits who also have an
understanding of Fuji Electric’s management are appointed as
Outside Audit & Supervisory Board Members. For instance,
corporate managers, persons with experience as a standing
auditor of a listed company, or legal experts.

Toshihito Tamba

Naoomi Tachikawa

Yoshitsugu Hayashi(3) Major lender, etc.
	A financial institution, other major creditor, or a person
executing the business of these institutions that is
indispensable for the Company’s funding and on which theCompany depends to the extent that it is irreplaceable.
(4) Accounting Auditor	A certified public accountant who belongs to an auditing
firm that serves as the Accounting Auditor of the Company
or employee, etc. of such auditing firm.
(5) Donee	A person executing the business of an organization which
receives a donation exceeding 10 million year per year thatis greater than 2% of its annual income from the Company
for the past three fiscal years.

Status of Attendance atBoard of Directors Meetings(Meetings Attended/Meetings Held)

Main Activities

13/13

Mr. Tamba offered opinions as necessary on all areas of Fuji Electric’s management
at the Board of Directors meetings, including on the following matters, based on his
professional standpoint and considerable insight as a manager of listed companies.
• Formulation of a business plan taking into account changes in the market environment• Methods of evaluating the effectiveness of the Board of Directors

13/13

Mr. Tachikawa offered opinions as necessary on all areas of Fuji Electric’s management
at the Board of Directors meetings, including on the following matters, based on his
professional standpoint and considerable insight as a manager of listed companies.
• Managing progress of management plans• Situation concerning management of fixed costs

13/13

Mr. Hayashi offered opinions as necessary on all areas of Fuji Electric’s management
at the Board of Directors meetings, including on the following matters, based on his
professional standpoint and considerable insight as an environmental engineer.
• Appropriate ways to carry out research and development• Initiatives aimed at reducing Fuji Electric’s environmental footprint

Outside Audit & Supervisory Board Members

Name

Independence Criteria for Outside Officers
The Company judges the applicable candidate to be fully
independent from the Company when he/she does not fallunder any of the conditions listed below in addition to criteria
of independence stipulated by domestic financial exchanges
including the Tokyo Stock Exchange.
(1) Major shareholder	A major shareholder of the Company (who owns 10% ormore of the voting rights) or its executor of business.
(2) Major business partner	A business partner (consultants such as lawyers,certified public accountants, and tax accountants, aswell as consulting firms such as law firms, audit firms,
and tax firms) or a person executing its business whosetransactions with the Company exceed 2% of the annual
consolidated net sales of the Company or the other entity inthe past three fiscal years.

training, which also encompasses legal and taxation matters.

The committee Chairman

Appointment of Directors and Audit & Supervisory Board Members
Fuji Electric’s policy on nominating candidates for Directors
and Audit & Supervisory Board Members is to decide on
candidates by taking into account such factors as the overallbalance of qualifications and experience on the Board of
Directors, and other viewpoints like diversity. Directors areappointed for a single-year term so that their management
responsibilities for each fiscal year can be clearly defined. This
also creates a management structure capable of responding tochanges in the operating environment.
Persons with the qualifications, experience, and otherattributes required to execute the Company’s management
policies are appointed as Standing Directors.
Persons equipped with the insight and experience required
to make multilateral business decisions who also have an

Before taking office, Standing Officers undergo compliance

Measures to Reinforce
the Operating Foundations

Established in fiscal 2019, the Nomination and Remuneration
Committee enhances the Company’s corporate governanceby reinforcing the fairness, transparency, and objectivity ofprocedures concerning the nomination and remunerationof Directors and Audit & Supervisory Board Members. The
committee comprises at least three Directors as members,
the majority of which are elected from among the Company’s
Outside Directors. The chairperson is elected from among theOutside Directors that sit on the committee as members.
The committee deliberates on the following matters andreports its findings to the Board of Directors.
(1) Policy on the composition of the Board of Directors(2) Policies and criteria regarding the appointment or dismissalof Directors, the President and Chairman of the Board of
Directors, and Audit & Supervisory Board Members(3) Appointment or dismissal of Directors, the President
and Chairman of the Board of Directors, and Audit &Supervisory Board Members(4) Matters regarding the formulation and implementation ofTraining Policy for Directors and Audit & Supervisory Board Members

Yoshiki Sato

Akiko Kimura

Tetsuo Hiramatsu

Status of Attendance atBoard of Directors Meetings
Status of Attendance at
Audit & Supervisory Board Meetings(Meetings Attended/Meetings Held)

11/13
9/9

13/13
9/9

12/13
9/9

Main Activities

Mr. Sato confirmed and offered opinions as necessary at meetings of the Board of
Directors concerning agenda items and the status of Fuji Electric’s business activities
based on his extensive experience and considerable insight as a manager at financial
institutions. At meetings of the Audit & Supervisory Board, he confirmed and offered
opinions on the legal compliance of the overall business activities of Fuji Electric.
Ms. Kimura confirmed and offered opinions as necessary at meetings of the Board of
Directors concerning agenda items and the status of Fuji Electric’s business activities
based on her expert knowledge as an attorney. At meetings of the Audit & Supervisory
Board, she confirmed and offered opinions on the legal compliance of the overallbusiness activities of Fuji Electric.
Mr. Hiramatsu confirmed and offered opinions as necessary at meetings of the Boardof Directors concerning agenda items and the status of Fuji Electric’s business activities
based on his extensive experience and considerable insight as a manager at financial
institutions. At meetings of the Audit & Supervisory Board, he confirmed and offered
opinions on the legal compliance of the overall business activities of Fuji Electric.

Fuji Electric Report 2020

44

Executive Remuneration

Evaluation of Effectiveness of the Board of Directors
Based on the results of this effectiveness evaluation,

We have established a remuneration system and remuneration

Company earnings (operating income, net income, dividends,

The evaluation of the effectiveness of the Board of Directors

levels for Fuji Electric’s Directors and Audit & Supervisoryetc.) the previous fiscal year.

was conducted with the use of a third-party survey for thethe Board of Directors will continue to work on enhancing its

Board Members that are deemed appropriate for theirNote that the operating margin in fiscal 2019 was 4.7%,

first time in fiscal 2019 in order to verify whether the Board ofrole by properly examining the issues that have been sharedrespective duties and in accordance with shareholder

short of the 6.7% target called for in our management plan.

Directors is properly fulfilling its expected roles and functions

and addressing each one in turn according to a clearly

and to facilitate further improvements thereof. The results of thedefined schedule.

mandates, giving due consideration to the aims of securingand maintaining competent personnel and providing incentives
for the improvement of business performance.
We routinely verify that the system and levels are

Authority for determining officer remuneration
amounts and calculation methods

survey was reported to the Board of Directors and issues that
require improvement going forward were shared with everyone.

The Nomination and Remuneration Committee receives

appropriate or whether they need reviewing in light of changes

and discusses inquiries from, and reports back to, thein the operating environment or objective external data.

Board of Directors with regard to mainly policies andOfficer remuneration comprises mainly performance-linked

Fiscal 2019 Board of Directors(13 meetings in total)

Subjects

All Directors and Audit & Supervisory Board Members(13 people in total)

Evaluation method

Anonymous survey conducted by a third party

Evaluation period

January to February 2020

Main question categories(1) Board of Directors make-up, administration, discussions, and monitoring functions(2) Support structure and training for Directors and Audit & Supervisory Board Members(3) Dialogue with shareholders(4) Initiatives implemented by Directors and Audit & Supervisory Board Members themselves

Evaluation process(1) Subjects answer a survey conducted by a third party(2) The third party identifies issues based on a results report and advice(3) Board of Directors analyzes, discusses, and assesses the findings

Summary ofevaluation results

The administration of the Board of Directors and its discussions earned mostly positive
assessments, thereby assuring the overall effectiveness of the Board of Directors.

Issues to address

In light of the opinions in the survey calling for more in-depth discussions about longer-term topics,
such as the Medium-Term Management Plan, ESG issues, and workstyle reforms, as well as theneed for reports on dialogue with institutional investors, it was recognized that challenges lie ahead
in order to further improve the Board’s functions and invigorate discussions.

criteria concerning remuneration of Directors and Audit &remuneration and remuneration other than performance-linked

Supervisory Board Members.

remuneration, but there is no policy in place for determining

While the Board of Directors discusses the details of thepayment ratios. As for indicators pertaining to performance-

committee’s report, the actual decision on remuneration

linked remuneration, the amount of performance-linked

amounts is left to the discretion of President and Chairman

remuneration is determined mainly in line with the consolidatedof the Board of Directors, but within the limit resolved at theratio of operating income to net sales—a key target in the

General Meeting of Shareholders and with reference to theMedium-Term Management Plan—and in light of consolidated

details of the committee’s report.

Classification-Based Remuneration System
Classification

Remuneration System

Base Remuneration
Base remuneration is a predetermined amount that is paid to executives according to their position.
A portion of the base remuneration is contributed to the director shareholding association to share theeconomic interests of shareholders and as an incentive to make management aware of share value.
Standing Directors

Standing Audit &Supervisory Board Members
Outside Director andOutside Audit &Supervisory Board Members

Performance-Linked Remuneration
Performance-linked remuneration is paid only in instances in which dividends are paid to allshareholders from retained earnings. The total amount of executive performance remuneration shall bewithin 1.0% of consolidated net income for the fiscal year prior to the date of payment in order to makethe link with consolidated results for each fiscal year more clearly.

Measures to Reinforce
the Operating Foundations

Scope of evaluation

A predetermined amount is paid as base remuneration and stock in the Company may be acquired attheir own discretion.

Remuneration Amounts by Classification (Fiscal 2019)
Remuneration by Type (Millions of Yen)

Total Remuneration(Millions of Yen)

Base Remuneration

Performance-Linked
Remuneration

Number of Recipients

Standing Directors

348

240

108

5

Standing Audit &Supervisory Board Members

58

58

—

2

Outside Directors andOutside Audit &Supervisory Board Members

50

50

—

6

Classification

Amount of Contributions to Officer Shareholding Association and Shares of the Company Acquired (Fiscal 2019)
Amount of Contributions to the Director Shareholding Association(Millions of Yen)

Shares of the Company Acquired(Hundreds of Shares)

Directors

20

61

Audit &
Supervisory Board Members

3

10Classification

45

Fuji Electric Report 2020

Fuji Electric Report 202046

Internal Control System
With the aim of complying with laws and regulations, managing

Risk management system

Strengthening collaboration between audit functions

the risk of loss, and securing the efficiency of the execution of(Please refer to page 55 for details.)

duties, the Fuji Electric Board of Directors determines basic

Based on regulations and other systems pertaining topolicies concerning the establishment of an internal control

managing the risk of loss, Fuji Electric has developed ansystem as stipulated in the Companies Act of Japan, andappropriate risk management system in order to manage

We ensure the effectiveness of Fuji Electric’s audit functions
by reinforcing collaboration between statutory audit
functions (Audit & Supervisory Board Members, Accounting
Auditors) and internal audit functions (Internal Audit Office).

the Company discloses those policies. Fuji Electric discloses

business risks in a coordinated, systematic manner. In regard

information on the implementation of its internal control system,

to specific cross-sectional risks, the Company determines

thereby taking steps to respond promptly and accurately to thedepartments to put in charge of each risk, thereby establishing

demands placed upon the Company by society.

a risk management system.

Main Systems Based on the Internal Control System

Preventing reoccurrence of fictitious transactions

Compliance system

On January 30, 2020, we released the Statement Regarding(Please refer to page 53 for details.)

Allegations of Fictitious Transactions Against Subsidiary. So

Based on systems for ensuring that Directors and employeesthat such an incident never happens again, we amended theperform their duties in a manner that is compliant with laws

Group’s internal regulations to clearly stipulate that employees

and the articles of incorporation, Fuji Electric has establishedmust not undertake transactions that cannot be confirmed as

and promotes a compliance system in order to secure thereal. The subsidiary in question is currently adopting measurestransparency and soundness of business execution.

aimed at preventing a reoccurrence mainly by rebuilding its risk

Main Initiatives for Strengthening Collaboration

Fuji Electric
Key matters shared byAuditor Liaison Committee(once yearly)

Statutory audit functions

Accounting Auditors

Audit & Supervisory Board
Audit & Supervisory
Board Members

Internal audit functions

Internal Audit OfficeInformation shared between
Audit & Supervisory Board Members
and the Internal Audit Office(once monthly)Group Auditor Committee (every quarter)

Information shared byAuditor Liaison Committee (monthly)

Measures to Reinforce
the Operating Foundations

management framework for workflow of ordering and accepting

We will continue to strengthen this cooperation going
forward, with a particular focus on project management
for large-scale projects, compliance audits, and audits atoverseas subsidiaries.

Subsidiary, which is a large company
under the Companies Act

goods, including checking and examining sales channels, its own

Statutory audit functions

role, and the existence of transactions. It is also implementing
exhaustive risk awareness training for sales divisions.

Accounting Auditors

Audits by the Audit & Supervisory Board Members and Internal Audits

Internal audit functions

Audit & Supervisory
Board Members

Internal Audit Office

Audits by the Audit & Supervisory Board Members
Audit & Supervisory Board Members conduct audits in

Audit & Supervisory Board Members communicated to theaccordance with the audit policies and duties assigned andOutside Audit & Supervisory Board Members.

in compliance with the standards for audits established by

Dialogue with Shareholders and Investors

the Audit & Supervisory Board. They report the details andMain tasks

results of their audits to the Audit & Supervisory Board.

Basic policies

Opinions of analysts and institutional investors• Attending and offering opinions at meetings of the Boardof Directors, the Executive Committee, the Compliance
Promotion Committee, and other important committees• Reviewing documents pertaining to important resolutions• Receiving explanations on the status of operational
execution from Directors and internal auditing divisions• Investigating the status of operations and assets at Fuji
Electric, consolidated subsidiaries in Japan and overseas,
and companies undertaking M&As

We disclose information in accordance with various laws

We actively engage in dialogue with analysts and institutionaland regulations so that we might earn the trust of ourinvestors and the information shared at briefings and theshareholders and investors and ensure they have a proper

principal feedback and requests we receive during private

understanding of the Company. We also strive to disclosemeetings are always reported to the executive officers andcorporate information thought to have a significant impact on

Board of Directors. The main requests received from analysts

investment decisions in a timely, fair, and equitable manner,and institutional investors in fiscal 2019 are as follows.

In fiscal 2019, the Audit & Supervisory Board convened
nine times in total. Every meeting was attended by all of theCompany’s Audit & Supervisory Board Members.
During the meetings, the Audit & Supervisory Board mainly
reviewed audit policies and plans, the appropriateness ofauditing methods and results of the Accounting Auditors, andundertook an assessment of the Accounting Auditors. It also
reported on and reviewed important matters that the Standing

even if we are not required to do so by law.
We emphasize dialogue with shareholders and investors
in our investor relations activities, and we are dedicated toenhancing reciprocal communication in these activities.

Internal audits• Disclosure of KPIs that demonstrate productivity improvement• Disclosure of rationale for holding cross-shareholdings

Every second year, the internal auditing divisions perform

A total of 44 bases were audited in fiscal 2019. No risks or• More opportunities to engage in dialogue with top management

the following audits on Fuji Electric’s business divisions andinadequacies with the potential to seriously affect management

subsidiaries in accordance with internal auditing standards andwere discovered.

• Disclosure of information about the progress of themeasures of the Medium-Term Management Plan for the
power electronics systems business

Main Tasks• Disclosure of information about the progress of measures
for the power semiconductor business

annual audit plans.
Type of Audit

47

General management and business

Major initiatives in fiscal 2019

Organizational management

Evaluating the appropriateness of management and administration (development of regulations, approval
procedures, performance management, etc.)• Financial results briefings (quarterly)

ESG

Risk management

Evaluating the effectiveness of risk management systems and risk response• Management plan briefing• Clarification of key issues (materiality)

Compliance

Checking for compliance with laws and regulations based on the Fuji Electric Compliance Program andconfirming legal compliance• FY2023 Medium-Term Management Plan briefing• Expectations for CO2 reductions in the supply chain

Business execution

Evaluating the appropriateness, efficiency, and effectiveness of business execution (booking of sales andpurchases, investments, cash flow, etc.)• ESG Explanatory Forum• Factory tours for shareholders (three plants)• Ongoing disclosure of information from employee
awareness surveys

Accounting

Evaluating the appropriateness of cost accounting and the soundness of assets and liabilities

Fuji Electric Report 2020

Fuji Electric Report 202048

Round-Table Discussion among Outside Officers

Working toward Highly Effective Governance
The evaluation of the effectiveness of the Board of Directors was conducted with a third-party survey for

Tachikawa

Hiramatsu

I applaud the point that sufficient time is allotted toIt’s understandable that we receive the materials for Board

fully discuss matters in detail. Board meetings at othermeetings at the very last minute, but I think the content

Centering on the topic of realizing highly effective governance, this round-table discussion sought

companies sometimes have too many agenda items, andof materials can be more resourceful. An improvement

to elicit the opinions of Fuji Electric’s Outside Officers—all of whom hail from different backgrounds—

on some occasions, there isn’t enough time to get throughmeasure I hope to see implemented up ahead is theregarding issues concerning the administration and discussions of the Board of Directors, as well as their

them all. While agenda item criteria probably plays a part inaccurate relaying of information

this, I believe there is a correlation between fewer agenda

about what was discussed at

items and more in-depth discussions.

internal committee meetings or

the first time in fiscal 2019 in order to verify whether the Board is functioning properly and sufficiently andto further improve its functions.

expectations for the Company going forward.

by the Executive Committee.
This would complement theIt’s really great that the atmosphere of Board meetings

reasons behind discussion items

is conducive to free speech. Audit & Supervisory Boardand reports and facilitate more

Members often point out issues and express their views,

constructive dialogue.

Measures to Reinforce
the Operating Foundations

Hayashiwhich the Company’s Directors always listen intently
to and make an effort to take on board. As for agenda
items, however, non-financial information from an ESG
perspective needs to be discussed more, in addition tofinancial matters.

Toshihito
Tamba

Naoomi
Tachikawa

Yoshitsugu
Hayashi

TetsuoHiramatsu

JunichiArai

Outside Director(appointed June 2016)
Director,
Tokyo Century
Corporation

Outside Director(appointed June 2016)

Outside Director(appointed June 2017)
Professor and Director,
Center for Sustainable
Development andGlobal Smart Cities,
Chubu University

Outside Audit & Supervisory
Board Member(appointed June 2016)
Representative Director andPresident, Chuo-NittochiGroup Co., Ltd.
Representative Director andPresident, Nippon TochiTatemono Co., Ltd.

Director
Senior Managing
Executive Officer
Corporate General
Manager,
Corporate Management
Planning Headquarters

Key points• Board involvement in the formulation of long-term vision and medium-term management plans at an early stage• Enhancement of opportunities to discuss medium- to long-term issues with corporate general managers• Discussions about environmental and social contributions through corporate activities
Arai

Tamba

We will do our best to send out meeting materials as early

I’d certainly like to see us,

Administration and Discussions of the Board of Directors

as possible and also make every effort to enhance their

Outside Officers, play a part incontent, for example, by including explanations of thethe discussions regarding the

Key points

main points discussed up until submission to the Board.

next medium-term management

Also, Directors Tamba and Hayashi expressed their views

plan when it is being formulated,just now about the agenda items, but in the survey too,either from the phase 1 or

the same thing was pointed out that there isn’t enoughphase 2 stage. I’d also like us

discussion about medium- to long-term issues and ESG

to discuss major propositions;• Sufficient time is allotted for an appropriate number of agenda items allowing lively discussions• Agenda items are mostly performance reports and resolution matters; not enough discussion about
medium- to long-term issues and ESG topics

49

Topics that Aim to Further Invigorate the Board of Directors

topics. Exactly what kind of items do you think the Boardfor example, how we view the Company in 10 years fromneeds to discuss more of?

now. Given that we are a manufacturer, we are unlikely

Arai

Tamba

This was the first time we had a third-party organization

The survey identified issues that we had failed to pick up

to see the fruits of our efforts in one or two years. It is

conduct the survey and as a result of their objective

on ourselves, so in that sense, I think it worked really well.

probably best if we adopt a backcasting approach toanalysis and assessment, a number of issues wereCompared to other companies, our Board of Directors

formulating our medium-term management plans byidentified. I’d first like to hear everyone’s opinions on theengages in extremely lively debate. That said, at present we

discussing what kind of company we want to be in theoperation of our Board of Directors meetings and themostly discuss performance results and resolution items

long term with a view to 10 or 20 years into the future.

discussions that take place.

and there seems not enough discussion about medium- toThis is easier said than done, but I hope this point of view

long-term issues.

can at least be given some consideration.

Fuji Electric Report 2020

Fuji Electric Report 2020

50

Tachikawa

example, is just as important as the environmental point

policies, enriching the lives of people worldwide throughissues such as climate change. The key challenges for the

I feel the same way aboutof view. It would be good if the Board of Directors could

our energy and environment businesses is after all the mostCompany up ahead will therefore be further strengthening

discussions concerning

report on, and discuss, these initiatives. So far, I have been

important thing, so I’d like to see an even faster pace of

its risk response capabilities, and also further utilizing IT

medium-term management

fortunate enough to visit each of the Company’s factories

global expansion in these businesses.

and adapting to digitalization in a post-coronavirus world

plans. The meetings of the Boardand during those visits I was really impressed by how

of Directors need reports anddiscussions about the concept ofFuji Electric’s biggest strength lies in its humanor in an age in which we have to coexist with coronavirus.

teams were able to liberally give shape to numerous ideas

resources. I’d like to see the Company harness thisAnd in order to become a truly global company, we need tothat could nearly be considered inventions. I sense that thisadvantage, embrace more challenges, take risks, and set

hire a first-rate international workforce.

the Medium-Term Managementkind of corporate culture is well entrenched, so it would be

its sights on the much larger dream of enriching the lives ofPlan and how the Company canwonderful if it could be aptly harnessed and taken up for

people around the world and achieving a responsible andgo about realizing its corporate philosophy. For initiatives

discussion in all of the Company’s workplaces.

sustainable society. I certainly believe the Company has thepertaining to the SDGs and the environment, we do receive

prowess to make this happen.

reports from a fairly long-term perspective and have theHiramatsu

opportunity to discuss them, but I think it would be nice if

The main duties of an outside officer are probably thewe could discuss the business side of matters a bit more.

monitoring of risk governance and the offering of advice

Hiramatsu
Continue to be a company that places value on
manufacturing
Employees need to keep in mind that Fuji Electric is
engaged in a dream-inspiring businessfrom a medium- to long-term perspective. Last year we

Tachikawa
Delve deeper into energy andenvironment technology

Hayashiheard from each corporate general manager about the

The Company’s very business contributes to energy andhas brought forth numerous products and businesses andAs for how we contribute overall to ESG issues, particularly

policies in the Medium-Term Management Plan after it

the environment and a track record of nearly 100 years inthe spirit of placing utmost importance on manufacturing

the environment and society, we can enhance thewas formulated, but going forward, I hope that we can get

this field is a hallmark of its strength. I believe the future

has been passed down unbroken. The global environment

Company’s corporate value going forward by further

the opportunity to discuss medium- to long-term issues

will open up for Fuji Electric if it is even more devoted

is one of the biggest issues the international community

ramping up our initiatives. For example, in the sameat a more suitable and appropriate time, which will help

to this field going forward. In order to further advancecurrently faces and Fuji Electric can help solve problems

way we report net sales and profits, we should visualize

to deepen our understanding. I myself, as an Audit &globalization, I’d like to see the Company plumb the depths

through its business of pursuing the efficient use ofand share the positive and negative contributions eachSupervisory Board Member, make a habit of monitoringof energy and environment technology and assume aelectricity. I hope all employees keep in mind that they arebusiness group has on the global community in terms ofrisk when participating in Board of Directors meetings, but

leading role in this domain.

engaged in a dream-inspiring business and continue togreenhouse gas emissions generated by our production

I think it has become increasingly important that we bolster

I want Fuji Electric to be a company that has manufacturing

place value on manufacturing.

Arai

on an unprecedented scale, as well as the COVID-19

HayashiStrengthen risk response capabilities
Hire talented global personnel

emissions when our products are

pandemic. Reports and discussions about the Company’s

Fuji Electric’s strength is its ability to roll out various

opinions today. We will take your comments on board inused. I also believe our economic

situation do take place at Board meetings, but up ahead,products in multiple regions around the world.

an effort to further invigorate the Board of Directors. We

contributions to regional

leveraging opinions and knowledge from outside the

Nevertheless, the Company is susceptible to numerous

will also continue to accelerate the pace of our initiatives

communities and the nation

Company would likely prove useful.

global risks of not only a political and economic nature, but

toward achieving sustainable growth.

processes when raw materials

the Company’s business continuity capabilities acrossand energy sources are used,

entire supply chains so that we can respond to disasters

as well as the reduction in CO2

Measures to Reinforce
the Operating Foundationsat its core. Over the course of its long history, the Company

Thank you everyone for your valuable comments andoverall through employment, for
Measures for preventing the spread of COVID-19 were enforced
during this round-table discussion. Director Hayashi, therefore,
participated via a video conference call.

Expectations for Fuji Electric in Pursuing Sustainable GrowthAraicontinues to implement initiatives aimed at realizing

Tamba
The Company’s management approach is clear;further accelerate globalization
Fuji Electric’s biggest strength is its human capitalsustainable growth. So finally, what are your future

The Company has been commended for its extremely

expectations for the Company?

proactive efforts, including employee training, to address

With the aim of achieving growth for the Company as well
as solving social and environmental issues, Fuji Electric

the SDGs, ESG, and especially the environment. I
hope this approach will be taken to the next level. As
for my expectations, while it is clearly spelled out in the
Company’s corporate philosophy and management

51

Fuji Electric Report 2020

Fuji Electric Report 202052

ComplianceFuji Electric employs thorough measures to ensure compliance with laws and corporate ethics and always
acts with the highest ethical standards to achieve sustained corporate growth.

Basic Policies

Fuji Electric Business Ethics Whistle-Blowing
Systemsprohibiting disadvantageous treatment and retaliatory or

To prevent infractions of laws and regulations and ensure

addition, we take all necessary steps to resolve issues raised

discriminatory acts on the grounds of whistle-blowing. In

Fuji Electric has a basic policy that gives top priority to

guideline for compliance. We also promote complianceearly detection, we have introduced and are operating theby whistle-blowers, including fact-finding investigations,

global compliance. Based on this policy, we established thethrough the Fuji Electric Compliance Program and the Fuji

Fuji Electric Business Ethics Whistle-Blowing Systems.

corrective actions, and recurrence prevention measures.

Fuji Electric Compliance Regulations, which is a concreteElectric Business Ethics Whistle-Blowing Systems.

Under these systems, internal and external parties canreport real or suspected violations of laws, regulations,or internal rules including matters related to bribery andCompliance Promotion System

whistle-blowing systems.

corruption to the president of Fuji Electric via contact points

We established the Fuji Electric Compliance Promotion

to deliberate on compliance execution and planning andCommittee to ensure full compliance with laws and social

reports the results of these deliberations, including mattersnorms globally. The Committee is headed by the Chairman

related to preventing corruption, to the Board of Directors.

Business ethics helplineof the Board of Directors and consists of the managers

In the event of a compliance infraction, the Committee

The Business Ethics Helpline handles notifications from

(corporate general managers and general managers)

has a system in place to take any necessary measures

our employees in Japan and overseas (including dispatch

responsible for regulating laws and acts, with Standing

after deliberating on fact-finding investigations, corrective

employees). It is promoted among employees at all

Audit & Supervisory Board Members and outside experts

actions, recurrence prevention measures, internal

compliance training sessions and through postings on the(attorneys) as observers. It meets twice each fiscal year

punishments, and internal and external disclosures.

Company’s intranet and internal bulletin boards. In addition,

Framework of the Business Ethics Whistle-Blowing Systems
Business Ethics Whistle-Blowing Systems
Business Ethics Helpline

Whistle-blower(external)

Whistle-blower(internal)

External lawyer(reports from employees)

President and Chairman of the Board of Directors (Executive Committee)

Partner hotline
The Partner Hotline handles notifications from our suppliers

Business Ethics Whistle-Blowing Systems

about Fuji Electric’s materials procurement operations.

Business Ethics Helpline (reports from employees)
Partner Hotline (reports from materials suppliers)

We spread awareness of the system among businessNote: Hotline contact points are in-house points
and external lawyers

We also work meticulously to protect whistle-blowers

Status of Compliance Promotion

by keeping their personal information confidential andGeneral manager ofthe legal office

Report of whistle-blowing

President
Determine the department to deal withwhistle-blowing case (taking whistle-blower
protection into account)

Report results

Department to deal with the whistle-blowing case
Share results

partners through postings on the Company’s website andat explanatory forums.

Inform details ofwhistle-blowing

Measures to Reinforce
the Operating Foundations

Partner Hotline

magazine in fiscal 2019.

Board of Directors

Fuji Electric
Compliance Promotion Committee(anonymous reporting is also possible).

we made a special feature article on it in the company

Fuji Electric Compliance Regulations

Fuji Electric
Compliance Program

In fiscal 2019, there were 25 reports made to theReport results

General manager of the legal office
Feedback (except for cases ofanonymous whistle-blowing)

External lawyer

Whistle-blower (internal/external)

Feedback(except for cases of anonymous whistle-blowing)

Fuji Electric Compliance ProgramFuji Electric established and implements the Fuji Electric

Compliance education

Compliance Program bringing together five aspects (seeWe promote wide-ranging compliance education andnumbers 1 to 5 below) of domestic and overseas laws

instruction through level-specific and job-specific group

Initiatives related to anti-corruption

Initiatives related to competition laws(including those related to anti-corruption, fair competition,

training and e-learning programs, as well as displaying

The Fuji Electric Code of Conduct and a directive on

Through our Antimonopoly Act Compliance Manual,labor, human rights, product safety, the environment,

posters internally and distributing pamphlets.

the prevention of corruption established a rule that

the Foreign Competition Law Compliance Manual, andno employee is to offer or receive bribes to or fromother regulations, we are enhancing measures to prevent

public- or private-sector officials in any country or region.

the violation of competition laws. We also perform daily

Prevention of corruption is reinforced through thoroughmonitoring by confirming quotations and estimates via

daily monitoring, auditing, and training. For officers andan extensive bidding information management system

employees involved in corruption, our policy is to consider

and extensive record-keeping. In addition, our auditing

disciplinary action based on our work rules and take strict

divisions perform audits in accordance with auditing

measures accordingly. In fiscal 2019, however, there

guidelines, and we conduct extensive level-specific andwere no incidents of officers or employees violating anti-

job-specific training.

taxation, accounting, information security, and export
management) for the Company and other Group companies
in Japan and overseas including new ones, without delay.

Examples of Training Conducted in Fiscal 2019

And the Fuji Electric Compliance Promotion Committee

Participants

continuously reviews the program and makes revisions.
1. E
 stablishment, revision, abolition, and dissemination ofinternal rules
2. C onstant monitoring of status of compliance with laws
and internal rules

Newly appointed
executives
Levelspecifictraining

3. Auditing of status of compliance with respect to 1. and 2.

Newly appointed
managers

Details

Important laws and regulations,such as anti-corruption
Points to consider when
performing duties

corruption rules, and no fines, surcharges, or settlements

New employees

Overview of compliance andimportant laws and regulations

Sales and administrative
department employees

Compliance framework andimportant laws and regulations

4. Compliance education regarding laws and internal rules
5. Acquisition of external certifications** As part of our efforts to verify and review the effectiveness of our complianceprogram, we started initiatives to acquire certifications in fiscal 2019.

53

Fuji Electric Report 2020

Jobspecifictraining

Results of Compliance Promotion

related to corruption were incurred.

Violations of laws and regulations
In fiscal 2019, there were no compliance infractions withlaws that warranted disclosure, including notifications

the potential to seriously impact management or serious

received through the Fuji Electric Business Ethics

problems related to anti-corruption and competition

Whistle-Blowing Systems.
Fuji Electric Report 2020

54

Risk Management
Fuji Electric is strengthening its risk management to maximize corporate value and minimize the potential
impact of risks.

Major Risks
Fuji Electric prepares Risk Management Sheets for each

Basic Policies
Based on the Fuji Electric Risk Management Rules, thein order to prevent risks from materializing (crisis situations),

Company manages risk in a coordinated, systematicthereby minimizing the impact on management in the event

manner. We practice appropriate management and counterthat risks materialize.

business division and affiliated company to help thembusiness performance and financial position are

address risks.

described below.

Risk Item

various risks that could affect the Company’s management

Risk Management System and Process

Management

Risk management system
Fuji Electric’s business divisions and affiliated companies
are responsible for managing risk related to their businessactivities as a part of their business duty, developing
risk countermeasures.
Additionally, significant risks, such as those related tobusiness plans and large-scale investments, are reported
at the Executive Committee as appropriate to facilitate thesharing of information.
The internal auditing divisions conduct regular audits toconfirm whether or not risk management is being properly
performed at each business division and affiliated company.

Audit &
Supervisory
Audit
Cooperation
Board

Accounting
AuditorOversight
ReportBusiness
Strategies
Business
Environment

Executive Committee

Internal Auditing
Divisions

ReportReportEach Group and Each Office(General Manager)*

Audit

ReportCorporate

Business Divisions, Branches,
Factories, Subsidiaries

Governance* Please refer to page 42.

Business
Reorganizations,

Risk management process
When annual budgets are formulated, business divisions

Alliances, andWithdrawals

Annual Risk Management Process

and affiliated companies understand and evaluatePlanrisks related to their business activities. Policies andUnderstand andevaluate risks

countermeasures in response to risks (aversion, mitigation,
relocation, retention, and so forth) are considered based on
their impact on management and frequency of occurrence,and each division and affiliated company appoints a person
in charge of policy and countermeasure execution.
We also conduct mid-year progress checks at the endof the second quarter of each fiscal year to improve andeffectively implement risk countermeasures.

ActionDo

Improvement andimplementation of risk
countermeasures

Address risks
Consider policies andcountermeasures

Orders,Marketing,and Sales
Promotion

Check

Mid-yearprogress check• Results of education drills• Organizational changes,
personnel reassignments• Revision of laws,
regulations, etc.
• Apply experiences ofaddressing risks

Development
and Design
Engineering

Procurement

55

Fuji Electric Report 2020

Risk Details

Initiatives to Address Major Risks•F uji Electric concentrates management resources
on businesses earmarked for growth while making
appropriate plant and equipment and R&D
investments. However, the semiconductor field requires
large amounts of money and is characterized by shortproduct cycles, major fluctuations in product supply
and demand levels, and intense competition. In somecases, therefore, there is a risk that we may be unable
to recover our investment.

• For semiconductor-related plant and equipment investments, we
make decisions based on negotiations with customers regarding
physical quantities and pricing.
• For R&D investments, we emphasize consistency with ourbusiness strategies and contribution to our businesses.
Based on our roadmap, we pursue R&D on fundamental andadvanced technologies that support Fuji Electric’s future.
Here, management engages in regular deliberations about
key development themes and constantly reviews the roadmap
according to market changes.
• Fuji Electric considers protection of the global environment
to be an important management priority and announced its
support for the recommendations of the Task Force on Climaterelated Financial Disclosures (TCFD). In addition, we createdour Environmental Vision 2050. In these and other ways, we
continuously convey our commitment to realizing a sustainable
society through our energy and environment businesses.

•T here is a risk that stricter enforcement of the Paris
Agreement and other environmental regulations, aswell as assessments by ESG evaluation institutions,
may lead to stronger criticism of Fuji Electric’s coal-fired
power generation business and affecting the reputationof Fuji Electric itself.

• An unprecedented event may lead to deficiencies
in our internal control and audit functions, resulting
in the risk of corporate governance breakdown andconsequent business disruption.

• We are working to strengthen corporate governance byimproving management transparency and auditing functions
during normal times.

•W e actively engage in collaborations with third parties
in order to strengthen our competitiveness. Due todifferences in systems and cultures, however, there isa risk that we may be unable to achieve the desired
outcomes of such collaborations.

•W e share our corporate philosophy, management policies, codeof conduct, business plans, business strategies, and so on tofacilitate integration of our business strategies, technologies,
products, and personnel. Through the Executive Committee andother meetings, we strive to maintain close communication withpartners and build good relationships with them.

• In our overseas business, we face the risk ofdeteriorating market conditions in each country—
including private plant and equipment investments
and public expenditures—as well as sudden changes
in supply and demand of products, intensifying
competition, and the resultant significant falls in prices.
• After receipt of orders for large-scale plant projects, any
number of events including unanticipated specification
changes, process delays, and natural disasters could
lead to risk of deterioration in profitability.

• We have sales offices in various world markets to better understandcustomer trends and centrally manage the information we collect
for analysis and consider countermeasures and otherwise strive
not to miss business opportunities. We also work to reduce costs
and expenses in order to minimize the impact of Japanese andoverseas market trends on our business performance.
• In every large-scale plant project, we work to secure appropriate
profits by improving the accuracy of our quotations at the time oforder receipt and strengthening project management afterwards.

•D ue to rapid technological advances, there is a riskthat we may lose our advantage over other companies,
and product development may not proceed asplanned, making it impossible to launch a new productat the right time.

• We have established an R&D system to accelerate researchand development, and we constantly monitor market andcustomer needs and the latest technological trends. At thesame time, we conduct R&D aimed at creating competitive
components and systems, centered on power electronics andpower semiconductor technologies, while also focusing on
R&D to develop solutions that generate customer value throughcombinations of fundamental technologies.

• Depreciation of the yen may lead to rising raw
material and component prices, while sharp
increases in demand in emerging countries may
cause circumstances to change, resulting in a tighter
supply and demand balance for raw materials andcomponents and the risk of significant increases intheir prices.

•W e deploy various means, including product swaps, to reduce
the risk of rising raw material prices.

Fuji Electric Report 2020

Measures to Reinforce
the Operating Foundations

appropriate risk management systems, and implementing

Strategies

Board ofDirectors

Currently, the major risks that may affect Fuji Electric’s

56

Risk Item

Risk Details

Initiatives to Address Major Risks

Production &• An unprecedented event could result in increased/
decreased demand and other changes in physicalquantity flows, leading to the risk of delayed responses
and inventory shortages/surpluses.

• We keep track of the latest physical quantity flows by sharing
information between our sales and business departments at the
Executive Committee. We have also built an optimal production
management system that can respond to changes in physicalquantity flows by improving productivity and promoting local
production for local consumption.
• Through reforms of our supply chain, we work to promote“completely localized” manufacturing via local production for local
consumption while also emphasizing global procurement.

Manufacturing
Shipping &Distribution
Installation &DeliveryServices

Quality
Assurance

Resources

Accounting• There is a risk that we may be unable to attract andtrain the human resources required for Fuji Electric’s
business activities.

• We focus on cultivating professional human resources who will
help strengthen our global competitiveness. We also actively
conduct employee education and training and are expanding
mid-career recruitment and other measures to attract exceptional
human resources.

• There is a risk that an unexpected increase in interest
rates could raise the interest rate burden on ourinterest-bearing debt.

• To minimize fund-raising costs, we constantly examine theoptimal mix of corporate bonds, commercial paper, and shortterm and long-term borrowings, in order to ensure flexible andstable financing arrangements.
• We work to strengthen credit management, including bymonitoring long-overdue receivables and the financial status ofbusiness partners, in order to enhance our collection of tradereceivables.

• There is a risk that restrictions on economic activities
and economic downturn could cause business
partners’ cash flows to deteriorate and prevent us fromrecovering debts.
• Fuji Electric’s social credibility, business performance,
and financial position could be affected if violations oflaws and regulations occur.

Legal Affairs
and Ethics• There is a risk that lawsuits and other legal proceedings
could result in orders to pay unexpectedly large
amounts of damages.

• Due to the speed of technological innovation and theglobal expansion of our business activities, there is arisk of intellectual property disputes arising.
• There is a risk of changes in exchange rates,
especially the yen against the U.S. dollar.

Political andSocioeconomic
Trends57• Any of the following events in foreign countries may
have an impact on our business performance andfinancial position:•U nexpected enactment of laws/regulations andchanges in tax systems with adverse effects•D isadvantageous political situations•S ocial turmoil due to social upheaval, terrorism, war,and the likeFuji Electric Report 2020

and Other
Investors

Natural

Initiatives to Address Major Risks•T here is a risk that the intentions of stockholders andother investors may differ from those of the Company’s
management, which could result in a vote against
the election of officers. There is also a risk that ashareholder proposal against management could
cause disruption of our operations.

• We attach great importance to disclosure of financial information,
active disclosure of non-financial information, and communication
with shareholders and institutional investors. We also strive to foster
understanding of our management through sincere and accurate
disclosure of information according to our Disclosure Policy.

• There is a risk that certain events, such as large-scaledisasters or accidents at our business sites, could
cause damage of production equipment, interruption ofoperations, and delays in product shipments.

•W e are committed to fulfilling our responsibilities to customers
and society by continuously supplying products and services inthe event of disaster or accident. To this end, we established a
dedicated crisis management team to spearhead fire safety anddisaster-preparedness initiatives, formulate a business continuity
plan (BCP), and adopt necessary insurance arrangements inorder to “strengthen our business continuity capabilities.”•T here is a risk that certain events, including system
malfunction and information leakage due to external
attacks (such as cyber-terrorism), could result in loss ofsocial trust.

• To address increasingly diversified and sophisticated cyber-security
threats, we have established a computer security incident response
team and a security operation center (CSIRT/SOC), through which
we monitor and control any attacks. We also take ongoing steps
to respond more effectively to the continuous emergence of new
threats. For example, we are stepping up defense, reinforcing ourdetection systems, and providing cyber training.

• There is a risk that COVID-19 infections may occur inthe workplace (of the Company, customer, or business
partner), which could force us to suspend production,
sales, and various other business activities.

• We have established the “Contingency Plan” to implement intimes of emergency resulting from various risks that may affect ouroperations. Based on this Plan, we set up the “New Coronavirus
Infection Prevention and Business Continuity Promotion
Countermeasures Headquarters,” chaired by the president, toaddress the COVID-19 pandemic. The stated policy of the newentity is to “take prompt and appropriate measures with top priority
on respecting human life, preventing the spread of infections,and minimizing damage.” Under this policy, we are gathering andcollating information related to COVID-19 and taking measures toprevent the spread of infections (for example, enforcing rules, suchas disinfecting hands and fingers; avoiding confined spaces, large
gatherings, and close interactions; and adopting teleworking andstaggered work hours), while also emphasizing business continuity.

Accidents• We have established a quality control system for the products
we manufacture and sell, and we strive to ensure high quality
standards while making appropriate insurance arrangements.

Finance andShareholders

Disasters and• There is a risk that an unprecedented event could
cause quality-related problems to arise.
• In addition, we have received reports of a defect insome of our power semiconductors used in specificfields. We are currently examining the degree ofpotential risk and will make appropriate disclosures
if we identify any significant impact on our businessperformance and financial position.

and Labor

Trends of

Risk Details

External
Attacks• The Fuji Electric Compliance Promotion Committee spearheads
efforts to ensure rigorous compliance with laws and regulations.
We also have a compliance program that clearly identifies roles
and responsibilities covering each aspect of legal regulations—
namely, internal rules, monitoring, auditing, and education—and
our compliance structure that includes whistle-blowing systems.
• In preparation for lawsuits and other legal disputes, we haveformed an appropriate task force aimed at building a system toensure that necessary procedures (fact-finding investigations,corrective actions, recurrence prevention measures, internalpunishments, and disclosures) are conducted promptly.
• We strive to effectively protect intellectual property rights anddevelop products and technologies respecting the rights of othercompanies.
• We engage in currency exchange contracts, based on certain
criteria, to minimize the impact of the risk of foreign exchange
fluctuations on our business performance.
• We always closely monitor the latest information on geopoliticalrisks, and we are diversifying our production and sales bases in
preparation for unexpected risks.

Individual
Event(Impact of
COVID-19)

Measures to Reinforce
the Operating Foundations

Human• An unprecedented event could result in restrictions
on human and commodity movements anddisruptions to our distribution network. This could
prevent our supply chain from functioning and leadto risk of delays in deliveries.

Risk Item* For more details on our risk management system, please refer to our 144th Annual Securities Report.

Close Up!

Responding to COVID-19
To deal with the COVID-19 crisis, we set up a response

our bases in Japan and overseas. To minimize infections

headquarters, headed by President Kitazawa, based on

and fulfill our social responsibilities, we are rigorously

the Fuji Electric Risk Management Rules. The mission of

implementing infection prevention measures targeting all

the new entity is to simultaneously “prevent employee

employees to ensure safety and security of themselves

infections and the spread thereof” and “promote

and their families. We are also increasing work flexibility

business continuity.” It collects and collates internal andby expanding teleworking and other systems. We

external information related to COVID-19, determinesremain committed to achieving business continuity whilemeasures to prevent infections and procedures topreventing the spread of infections.

prevent the spread of the disease if an employee gets

Given the ongoing unpredictability of the pandemic, we

infected, and rigorously implements disease-prevention

will need to continue working together, united as a group.

measures at Group companies in Japan and overseas.
Employee infections have been confirmed at some of

We will disclose information on our efforts related to
COVID-19 on our corporate website as appropriate.

Fuji Electric Report 202058

Supply Chain
Strengthening Our Business Continuity Capabilities

We believe it is important to instill corporate social responsibility (CSR) throughout the supply chain, andIn order to uphold its social responsibilities as a company,

parts and components based on their location, and assign

we are promoting efforts to prevent compliance violations and human rights violations, such as forced labor

Fuji Electric aims to continue core operations even if natural

them one of five risk rankings. We will then gradually adopt

and child labor.

disasters, accidents, and other unexpected events occur

a multi-sourcing policy for procurement of highly importantby providing a stable supply of high-performance, high-items. Due to the COVID-19 pandemic, meanwhile, we had

quality products and services required by its customers.

time to grasp its impact on parts procurement in our supply

In addition to fire safety and disaster-preparedness

chain, which has been expanding worldwide. Based on

In fiscal 2019, we asked 500 major business partners

industrial standard, and the Guidelines for Responsible

initiatives, we have formulated a business continuity planthis, we started strengthening our BCP system in Japan.

in Japan to cooperate in a CSR survey and provided

Business Conduct of the Japan Electronics and Information(BCP*) at the head office, which acts as a command

By inputting information on both primary and secondary

feedback based on the results. We also created the Fuji

Technology Industries Association (JEITA).

center during disasters, and at factories that house abusiness partners into our BCP system, we aim to speed

Electric CSR Procurement Guidelines for specific items

We will follow these guidelines as we work with ourlarge number of key management resources, as well as at

up information gathering in times of emergency.

pertinent to our company, based on the Responsible

business partners to build a responsible supply chain in

Business Alliance (RBA*) Code of Conduct, which isJapan and worldwide.

branches that serve as contact points with customers.
We have also established Companywide BCPs for our

IT risk reduction

regarded as the international CSR guidelines and the

In fiscal 2019, we added cyber attacks as a new risk to

for IT sections, which manage our information systems.

be addressed in our ongoing IT-BCM* initiative, which isFuji Electric CSR Procurement Guidelines

In fiscal 2019, we once again worked to strengthen ourdesigned to help restart and restore information systems

1. Human Rights and Labor

4. Fair Trade and Ethics

7. Business Continuity Plan

disaster response capabilities. For example, we conductednecessary for business and operation continuity within thesimulation training assuming a large-scale earthquake forrequired time in preparation for disasters and accidents.

2. Health and Safety

5. Quality and Safety

8. Establishment of Management Systems

business divisions, managers of each base, and businessTo address increasingly diversified and sophisticated

3. Environment

6. Information Security

9. Social Contribution

continuity promotion staff, and safety confirmation training

cyber security threats, we have established a computer

Further information is available at our website.

for all employees. Going forward, we will continue enhancing

security incident response team and a security operation

https://www.fujielectric.com/company/procurement/csr_procurement.html

our BCP to strengthen our business continuity capabilities.

center (CSIRT/SOC), through which we monitor and* Business continuity plan

control any attacks.

Fuji Electric received Resilience certification under
the program established by the Cabinet Secretariat’s
National Resilience Promotion Office in recognition ofactive efforts to ensure business continuity.

to the continuous emergence of new threats. In addition tominimizing damage to information systems, for example, weare stepping up defenses to ensure early recovery, reinforcing
our detection systems, and providing cyber training.
* Business continuity management

Fire safety and disaster-preparedness initiatives
Based on the Disaster Prevention and Procedural Manual,

Implementation of security measures

all of Fuji Electric’s bases have developed disaster-response

To protect confidential and personal information properly,systems and put in place comprehensive measures to

Fuji Electric has formulated and is implementing a policy andensure that structures and facilities are earthquake resistant.

regulations related to information security with consideration

They also stockpile emergency goods, conduct regular drills,

for the laws of relevant countries. We have also establishedand take other preventive measures.

information management systems in each Group company
and instituted various safety protocols, including operational

Close Up!

Environmental activities with our business partners
We are working with our business partners toat the partners, and where it was deemed necessary

strengthen our activities aimed at realizing a

the factory (1) helped partners acquire ISO certification

sustainable society throughout the supply chain.

and (2) conducted environmental risk surveys.

In fiscal 2019, the Matsumoto Factory, which

In fiscal 2019, on-site audits at two businessproduces semiconductors in the Electronic Device

partners confirmed that the environmental

Segment, supported environmental protection

management at both was in good status. In fiscal

activities of its main business partners. The factory

2020, we plan to conduct on-site audits at businessbegan by reviewing the status of the environmental

partners for which environmental risks are a concern.

management (ISO certification, guideline compliance)

Promoting RBA at Fuji Electric (Malaysia) Sdn. Bhd.

Procurement BCP

site access and information access management systems.

By identifying, assessing, and addressing supply chain

Meanwhile, we endeavor to prevent information leaks

In the Electronic Device Segment, Fuji Electric

system and conducting thorough in-house training

risks that could affect our business continuity, we aim towhile maintaining and strengthening information security(Malaysia) Sdn. Bhd., which produces

to maintain the positive results of its RBA audits.

build a stable production system over the medium andby instituting annual training programs for employees andsemiconductors and magnetic disks, underwent an

We plan to apply the measures taken at Fuji Electric

long terms.

conducting inspections and improvements through effective

on-site audit of RBA at the request of customers(Malaysia) to other factories in Asia.

management and audits of workplaces.

in fiscal 2019. It obtained RBA certification in 2013

In fiscal 2019, we officially introduced our BCP system.
This has enabled us to automatically identify primaryGroup companies that handle customers’ confidential

and has maintained the certification through externalbusiness partners in Japan (more than 4,000 companies)

and personal information and require high-level information

who are located in areas prone to natural disasters,

security management have acquired external certification.

such as earthquakes and typhoons, and quickly grasp

As of April 1, 2020, a total of five departments at three(Malaysia) had not met the criteria for prescribed

the potential impact of a disaster on their safety andGroup companies have acquired information security

work hours and evacuation drills, it mobilized its

production operations.

management system (ISMS) certification. In addition, Fuji

employees to raise awareness through education.

Electric Co., Ltd. and four subsidiaries have acquired

It followed up by creating an annual internal audit

In fiscal 2020, we will conduct natural disaster risk
diagnoses of business partners who produce important
Fuji Electric Report 2020

Measures to Reinforce
the Operating Foundations

procurement sections, which manage our supply chain, andWe also take ongoing steps to respond more effectively

59

Sustainable Procurement Activities

audits every two years.
After the first year’s audit indicated that Fuji ElectricFuji Electric (Malaysia) Sdn. Bhd.

Privacy Mark certification.
Fuji Electric Report 202060

Social Outreach
Fair and Equitable Procurement Practices

We are using our human resources and technologies developed through our business to build stronger

Fuji Electric bases its procurement activities on action

outlines the high ethical standards for our trading activities

relationships and foster ties between our operational sites and local communities, aiming to contribute toguidelines for "fair and equitable transactions" and seeks

not just for legal compliance but also in the areas of

the resolution of global social and environmental issues. We will contribute to developing and revitalizing

business partners in Japan and worldwide, which areanti-corruption and respect for intellectual property.

committed to sustainable procurement activities, as well

The divisions responsible for procurement at the head

local regions through activities including promotion of youth development and environment preservation.

as quality, pricing, deliveries, and services. We strive tooffice and other operating sites in Japan provide staff

build better partnerships, deepen mutual understanding,training to support full legal compliance. The procurement

and maintain and improve cooperative relationships withdepartments of overseas affiliate companies formulate rules

Employees from our operational sites in Japan serve as

donating Fuji Electric laboratory equipment to science

all our business partners through free, fair, and equitable

and standards that comply with the laws and regulations of

instructors of science classes for elementary and junior

and technology universities in Southeast Asia, wherecompetition. The Fuji Electric CSR Procurement Guidelines

their respective country.

high school students to share the wonders of science andeconomic development is rapidly progressing. We also

the importance of manufacturing.

invite instructors from overseas vocational training schools

Promotion of Youth Development

Overseas, we are actively helping to develop
professional engineers through programs including

Employee Training
In fiscal 2019, we held 54 sessions nationwide on themethods and effecting instruction techniques on site.

Major initiatives in fiscal 2019

Subcontract Act, internal control system, and procurement
employees, an increase of 40% from the previous year.

Measures to Reinforce
the Operating Foundations• Science classes for elementary school and junior high school students (learning about
how power is generated and electricity conversion using experiment kits)

CSR, and provided education to more than 1,400• Work experience for junior and senior high school students

We also deepened understanding by introducing our• Technical training for vocational school instructors (Cambodia)

first e-learning course on the Subcontract Act, with over
10,000 employees taking the course. In addition, we

to Japan to learn equipment operation and maintenance

Asia IPO / Internal control system training• Donated Fuji Electric laboratory equipment for science and technology universities(Vietnam)created the Legal Compliance Working Group to foster a

Science class learning how power isgenerated (Suzuka Factory)

corps of experts on compliance through participation inclass lectures and exercises in practical application.

Environmental Preservation

The China and Asia International Procurement Offices*

We participate in various activities to preserve biodiversity,

conducted training sessions on internal control systemthrough operation checking at seven sites in China andsix sites in greater Asia.
* International Procurement Offices (IPOs) locate new first-rate suppliers in their countries
and serve as procurement service bases for the company’s overseas business sites.

The Legal Compliance Working GroupOur environmental conservation activities include

such as planting mangroves and cleaning beaches, withplanting, thinning, and clearing forests, which help absorb

the aim of helping expand habitats of living organisms andcarbon dioxide and thereby prevent global warming.

protecting the natural environment.

Major initiatives in fiscal 2019
• Mangrove planting (Fuji Electric (Malaysia) Sdn. Bhd.)• Beach cleaning (Fuji Electric (China) Co., Ltd., Fuji Electric Taiwan Co., Ltd., and others)• Biodiversity conservation initiatives using the Musashino no Mori green space on factory site
(Tokyo Factory)• Environmental conservation with forest thinning in collaboration with NPOs
(Chubu Area Operation)

Mangrove planting(Fuji Electric (Malaysia) Sdn. Bhd.)

Communication with Local Communities
We communicate with the local neighborhoods of ourOverseas, we communicate with local communities

operational sites and with employees and their families

in various ways, including visiting child welfare facilities

through factory festivals and other events as well as

and supporting education by providing stationery andcommunity activities, such as local cleanup campaigns.

learning supplies.

Supporting Disaster Recovery and Reconstruction Efforts
Fuji Electric provides reconstruction support to areas

We also donated Fuji Electric emergency generators to theimpacted by natural disasters in Japan and overseas. We

local government in Chiba Prefecture, which was severely

provided monetary donations to help accelerate recovery

damaged by the typhoon.

efforts and aid victims from typhoons and torrential rains.

61

Fuji Electric Report 2020

Fuji Electric Report 202062

Consolidated Financial and Non-Financial Highlights

Financial Highlights
Millions of yen

Fiscal Year

2011

2012

2013

2014

2015

2016

2017

2018

2019

2019

703,534
525,096
178,437
19,252
11,801

745,781
567,314
178,466
21,992
26,368759,911582,223
177,688
33,136
19,582810,678605,763
204,915
39,31627,978813,550
597,757
215,793
45,00630,644

837,765
632,723
205,042
44,70940,978893,451
674,744
218,707
55,962
37,763914,915
682,503
232,41259,97240,267

900,604
679,719
220,885
42,51528,793

8,338,926
6,293,695
2,045,231
393,658
266,606

32,24724,98929,75531,16031,771
31,05432,02926,91630,84935,02329,041
33,61535,94927,65029,72334,91027,14929,44535,62026,46530,151

33,66943,33830,90634,457
48,20832,319319,047446,377
299,256

28,314(13,489)
14,825(32,592)

55,342(24,286)
31,055(56,827)

53,651(9,649)44,002(50,569)

51,459(22,750)
28,708(33,828)

48,450(19,410)29,040(31,566)

58,185
9,748
67,934(56,083)

53,146(14,550)
38,596(46,887)

54,949(21,448)
33,501(38,174)

46,087(27,621)
18,466
16,917426,737(255,752)
170,984
156,646

792,848
183,217
163,576
225,227
289,489765,563
215,672
194,572
217,417257,105

810,774
251,225
227,181200,340
233,753904,522319,636
290,339
194,579
226,474

845,378
260,980
230,399
189,374
220,213886,663
323,863291,215
141,578
183,465914,744366,546
330,635
130,177
163,507952,659
392,061
352,921
124,850
153,985

996,827
406,002
365,619
153,617217,364

9,229,885
3,759,282
3,385,368
1,422,387
2,012,630

2.7
7.4
1.5
20.6
1.4
1.8

2.9
14.7
3.4
25.4
1.1
1.3

4.4
9.3
2.5
28.0
0.9
1.0

4.8
10.8
3.3
32.1
0.7
0.8

5.5
11.8
3.5
27.3
0.8
1.0

5.3
15.7
4.7
32.8
0.5
0.6

6.3
12.1
4.2
36.1
0.4
0.5

6.6
11.8
4.3
37.0
0.4
0.4

4.7
8.0
3.0
36.7
0.4
0.6

—
—
—
—
—
—
Yen

U.S. dollars*1

82.58
1,144.54
20.00
24.2

184.501,361.46
25.00
13.6

137.03
1,589.79
35.00
25.5

195.802,031.97
45.00
23.0

214.481,612.59
50.00
23.3

286.82
2,038.40
55.00
19.2

264.342,314.50
70.00
26.5

281.892,470.65
80.00
28.4

201.572,559.60
80.00
39.7

2011

2012

2013

2014

2015

2016

2017

2018

2019

24,973
17,933
7,040

24,956
18,271
6,685

25,52418,022
7,502

25,74017,814
7,926

26,50817,635
8,873

26,503
17,716
8,787

27,00917,7049,305

27,416
17,647
9,769

27,96017,681
10,279

—
—
—

54.0

50.2

53.6

53.8

51.9

46.7

48.4

52.1

45.6

—

233

392

601

1,043

1,598

2,230

2,579

3,162

3,651

—

1.866
23.7000.741—

Corporate Information

Operating Results
Net sales
Japan
Overseas
Operating income
Net income attributable to owners of parent
R&D and Capital Investment
R&D expenditures
Plant and equipment investment*2
Depreciation and amortization*3
Cash Flows
Cash flows from operating activities
Cash flows from investing activities
Free cash flow
Cash flows from financing activities
Financial Position
Total assets*4
Total net assets
Shareholders’ equity
Net interest-bearing debt
Interest-bearing debt
Financial Indicators
Ratio of operating income to net sales (%)
ROE (Return on equity) (%)
ROA (Return on assets) (%)*4
Equity ratio (%)*4
Net debt-equity ratio (times)*5
Debt-equity ratio (times)*6
Per Share Data*7
Net income
Net assets
Cash dividends
Dividend payout ratio (%)

Thousands of
U.S. dollars*1

Non-Financial Highlights
Fiscal Year

Employees (Headcount)Japan
Overseas
Total greenhouse gas emissions fromproduction activities (10,000 t-CO2)
Reductions in CO2 emissions throughproducts (10,000 t-CO2)*8*1 The U.S. dollar amounts represent the arithmetic results of translating yen into dollars at ¥108 = U.S. $1, the approximate exchange rate at March 31, 2020.
*2 Plant and equipment investment is the total of investment in tangible fixed assets, including acquisition amounts for lease contracts.
*3 Depreciation and amortization expense is the total of the depreciation of tangible fixed assets and amortization of intangible assets.
*4 Effective April 1, 2018, the Company has adopted “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, revised on February 16, 2018).
As such, major management indicators in consolidated accounting period as of March 31, 2018 have been adjusted to retroactively apply said accounting standards.
*5 Net debt-equity ratio is the ratio of net interest-bearing debt (interest-bearing debt + lease obligations – cash and cash equivalents) to shareholders’ equity.

Detailed financial information is available on our website.

2019*6 Debt-equity ratio is the ratio of interest-bearing debt to shareholders’ equity.
*7 Effective October 1, 2018, the Company conducted a one-for-five common stock consolidation. Amounts for net income per share and net assets per share have been calculated assumingthat the stock consolidation took place on April 1, 2010. When the interim dividend of ¥8 per share for the fiscal year ended March 31, 2019, is recalculated to take into account the one-forfive reverse stock split, the dividend per share is ¥40. Therefore, the dividend per share for the fiscal year ended March 31, 2019, is equivalent to ¥80, including the interim dividend.
As for annual dividend per share, the amounts of dividends paid before the reverse stock split are presented to reflect the impact of the reverse stock split retrospectively.
*8 The contributions to CO2 emission reductions refers to CO2 emission reductions from products shipped in and after fiscal 2010 that were in operation for a year.
Calculated based on the Ministry of Economy, Trade and Industry’s Guideline for Quantifying Greenhouse Gas Emission Reduction Contribution.

https://www.fujielectric.com/ir/library/financial_results/contents_05_19.html

63

Fuji Electric Report 2020

Fuji Electric Report 2020

64

Corporate Data

History
Fuji Electric continues to evolve in step with the times and with society, with technology as our driving force.

Technology

Company Name

FUJI ELECTRIC CO., LTD.

1923

1924

August 29, 1923

Fuji Electric Manufacturing Co., Ltd., establishedEstablishedEstablished as a capital and technology alliance between
Japan Furukawa Electric Co., Ltd., and German Siemens
AG. The result was a company with characteristics inheritedfrom industry in both countries

Consolidated Subsidiary

73 (Japan 23, Overseas 50)

Equity method Affiliate

4

Head Office

1-1, Tanabeshinden, Kawasaki-ku, Kawasaki-shi, Kanagawa 210-9530, Japan

1925

Head Office Business Address

Gate City Ohsaki, East Tower, 11-2, Osaki 1-chome, Shinagawa-ku, Tokyo 141-0032, Japan

Capital Stock¥47.6 billion

Began operation of
the Kawasaki Factory

Employees (Consolidated)

27,960 (Japan 17,681, Overseas 10,279)

Net Sales (Consolidated)¥900.6 billion (Year ended March 31, 2020)

Stock Code6504

Began transformer production
1927

Began electric fan production
Built first hydraulic turbine,
4,850 HP Francis Turbine

1942

1937

Began operation of the Matsumoto Factory
Began operation of the Fukiage
and Toyoda factories
Began operation of the Mie Factory

Company emblem,“FS” mark1968

36,028Major Shareholders

1950~

1961

Began operation of the Chiba Factory

Issued and Outstanding Shares 149,296,991

Francis Turbine

Began watt-hour meter production

1943

Stock Information (As of March 31, 2020)

Began manufacturing electric motors
1925

1936

1944

Number of Shareholders

1920~

Company

Company Information (As of March 31, 2020)

1954

Ultra-compact
electromagnetic switch

Began ultra-compact magnetic
switch production

Merged with Kawasaki Denki Seizo Co., Ltd.,and commenced operations at the Kobe
and Suzuka factories

1959

1973

Began production of vending machines

Began operation of the Otawara Factory

1971

Began manufacturing silicon diodes

The first
vending machines

1969

Began manufacturing hybrid ICs

Japan Trustee Services Bank, Ltd. (Trust Account)

16,369

11.46

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

15,546

10.88

FUJITSU LIMITED

4,066

2.85

Asahi Mutual Life Insurance Company

3,955

2.77

Japan Trustee Services Bank, Ltd. (Trust Account 7)

2,960

2.07

FANUC CORPORATION

2,684

1.88

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

2,457

1.72

Mizuho Bank, Ltd.

2,250

JP MORGAN CHASE BANK 385151
FURUKAWA CO., LTD.

Shareholders’ names

1976

Began manufacturing
general-purpose inverters
General-purpose inverters

1984

Changed company name to Fuji Electric Co., Ltd.
1991

1985

Released the programmable logic controller “MICREX-F Series”
1987

Began operation of the Yamanashi Factory

Developed IGBT module

2002

1991

Began manufacturing 2.5-inch magnetic disks

1.58

Introduced Company
symbol mark

2,218

1.55

2003

2,205

1.54

Notes: 1
 . Treasury stock of 6,454,259 shares is excluded from the above list of top 10 shareholders.
2. T he ratio of shareholding is calculated by deducting the number of treasury stock from the total number of shares outstanding based on the provisions of the Ordinance for
Enforcement of the Companies Act.

1996

Symbol markWon order for IGBT main conversion
devices used in electric railways(The world’s first large-capacity flat IGBT)

Changed company name to Fuji Electric Holdings Co.,
Ltd., owing to shift to pure holding company system
2008
Fuji Electric FA Components & Systems Co., Ltd., merged
operations with Schneider Electric Japan Ltd. (Power
distribution and control equipment joint venture)

1998

2011

2010

SiC module

Number of shares

Holding (%)

148

70,744,791

47.39

Other corporations in Japan451

14,066,492

9.42

Foreign corporations

609

41,025,745

27.48

Individuals and others

34,82023,459,963

15.71

Total

36,028149,296,991

100.00Changed company name to Fuji Electric Co., Ltd.
2014

Created new corporate brand emblem for products

2010~

Number of shareholders

Financial institutions / securities firms

Note: “Individuals and others” includes treasury stock.

Flat IGBT

Delivered 100 kW phosphoric acid fuel cell

Share Distribution by Shareholder TypeType

Corporate Information

Voting rights
(%)

1980~

Number of shares(1,000s)

Developed next-generation
SiC module power semiconductor
2012

Developed inverter equipped with
next-generation power semiconductor
SiC-SBD, a first in Japan

Inverters equipped withpower semiconductor
SiC-SBD

2014
EmblemLaunched power electronics equippedwith SiC power semiconductors
2015Power conditioning systems forhigh-capacity mega solar use

Launched steam-generation heat pumps
2018

Began manufacturing exhaustgas cleaning systems for ships

65

Fuji Electric Report 2020

Exhaust gas
cleaning systems
for ships

Fuji Electric Report 2020

66

This mark symbolizes
the commitment of Fuji Electric
to environmental protection

External Evaluation
Fuji Electric has been selected as a component of the following
socially responsible investment (SRI) indexes, as a company withoutstanding CSR performance.

We have received the following awards and certification inrecognition of our outstanding initiatives to promote diversity.

We have received the following certifications as a company exhibiting
excellence in health and productivity management.

Based on the universal design (UD) concept,
we have adopted fonts that are easy to read (and difficult to misread)by more and more people.

Gate City Ohsaki, East Tower,
11-2, Osaki 1-chome, Shinagawa-ku, Tokyo 141-0032, Japan
Contacts: Public Relations and IR Dept., President’s Office
TEL: +81-3-5435-7111 https://www.fujielectric.com

00A9-E-0002b Published in Japan 2020.10