CORPORATE REPORT 2015

Information disclosure at Zeon

CONTENTS
2

Message

Basic information on Zeon Corporation and the Zeon Group is available on the3

Business Profile“Company Information” section of our website.

9Interview with the President

The Corporate Report contains a wide range of information about management and12

Messages from Outside Directors

CSR, while the CSR website contains detailed performance and site reports regarding
CSR information. We also disclose more detailed management information on the IR

13

Business and Strategy

website and in the Fact Book.
http://www.zeon.co.jp/index_e.html

13

Elastomer Materials Business

14

Specialty Materials Business

15

Research and Development (R&D)

17

Production Management and Safety

19

Highlight 1
Leading the World: Zeon Film Business21

Highlight 2
Reducing environmental impacts in plants:

Website :Company Information

Initiatives to improve energy efficiency

23

Highlight 3
Creating corporate culture via Taimatsu (torchlight)
activities

25

Strengths Supporting our Businesses

25

Employment and Human Resource Development

26

Environmental Initiatives

27

Social Contribution Initiatives

29

CSR Implementation Plan

31

Corporate Governance

31

Risk Management

33

Data Highlights

35

Major Sales & Production Bases

37

Group Company Data

39

Zeon Group History

Printed brochure :CORPORATE REPORT 2015

Website : CSR Activities

Fact Book

Website : Investor Relations

Report Policy
At Zeon Corporation and the Zeon Group, we used to publish the “CSR Report” so that all of our stakeholders canunderstand our approach to CSR and activities for the environment. However, from FY2013, we have been issuing the

Period Covered
April 2014 to March 2015
(also includes some new information from April 2015 and later)“Corporate Report” in a magazine format, which includes an annual report that provides an overview of general Zeon businessactivities and corporate information functions.
In our FY2015 report, we have renewed the “Business Profile,” which provides a summary of Zeon business activities, andOrganizations Covered

have newly added “Messages from Outside Directors” to enhance the functioning of our governance. Among the highlights of

The report covers Zeon Corporation and Groupthe report are information on our initiatives to reduce our environmental impacts, an update on changing the culture throughcompanies in Japan and overseas. Some data only

“Taimatsu (torchlight) activities,” and commentary on our films business, which is driving our Specialty Materials Business.

covers Zeon Corporation.

We ask for your honest feedback and opinions so that they may be used to improve our activities in the future.

1

ZEON GROUPCORPORATE REPORT 2015

Message

Zeon Makes the Future Today
through the Power of Chemistry
Zeon Corporation has consistently introduced many new products to the world throughour original “do not imitate and cannot be imitated” technology all under the corporate
philosophy of “Zeon is contributing to the preservation of the Earth and the prosperity of
the human race.” These products support our society through their presence all around us.
In order to continue as a company needed by society, we are now advancing businessactivities under our Enterprise Blueprint for 2020, titled “Zeon Makes the Future Today
through the Power of Chemistry.” To achieve our Enterprise Blueprint, it is important that we
provide the world with products that not only offer high quality, but can also lower costs tosociety during both manufacture and use. In recent years, our specialty rubber Zetpol® and
S-SBR for use in fuel-efficient tires, our thermoplastic elastomer Quintac®, and our opticalfilm ZeonorFilm™ have earned acclaim and support in the market. In addition, we plan toroll out new products in many fields including energy materials for lithium-ion batteries,
medical devices, and carbon nanotubes. We will continue to work toward research anddevelopment from a long-term perspective in order to give birth to creative and distinctive
new products.
With the world’s population surpassing 7 billion people and requiring ever moreresources to survive, chemical companies hold the potential for greatly changing the world
including its methods of design, social systems, and ways of living through the powerof materials. Looking ahead, we will continue creating new products through our unique
technologies so that we may contribute to the sustainable development of society and global
environmental conservation.
We deeply appreciate your ongoing support and encouragement for Zeon.

Naozumi Furukawa
Chairman

ZEON GROUPCORPORATE REPORT 20152

Since our founding in 1950, Zeon has created novel products by harnessing
our R&D capabilities which utilize our proprietary strengths, and by tapping
into our collective production technologies to contribute to society throughthe delivery of superior and unique products and services. “Zeon Makes the
Future Today through the Power of Chemistry” - that is the promise of Zeon.

Corporate Philosophy (Established April 1997)

Zeon is contributing to the preservation of the Earthand the prosperity of the human race
In keeping with its name, which derives from the Greek words “geo”(the Earth) and “eon” (eternity), Zeon will contribute to the sustainable
development of people, society and the global environment throughinnovative world-class technologies.

Company profile
Company name: Zeon Corporation
Establishment: April 12, 1950
Capital: 24.211 billion yen (as of March 31, 2015)
Market capitalization: 293.1 billion yen (as of March 31, 2015)
Total number of shares outstanding: 242,075,556 shares
Employees: 3,216 (consolidated), 1,679 (non-consolidated)(as of March 31, 2015)

Consolidated Net Sales■Elastomer Materials(million yen)
350,000
300,000■Specialty Materials

296,427
270,383

262,842

2010

2011

250,000■Others

307,524

250,763

200,000
150,000
100,000
50,000
0

3

ZEON GROUPCORPORATE REPORT 2015

2012

2013

2014 (FY)CSR Policy (Established April 2010)●We will ensure compliance and meet society’s needs for safety and security●We will contribute to sustainably developing society and protecting the global environment
through our corporate activities●We will ensure that each and every Zeon person is aware of CSR and acts accordingly

Operating Income

Net Sales by Region
Others(million yen)
40,00035,000■Elastomer Materials

35,295■Specialty Materials■Others

1.0%
3,144

32,12329,901

30,00028,245

North America

9.4%
28,773

23,69625,000Europe11.6%

20,00035,622

15,00010,000
Asia

5,000
0

29.2%
89,807
2010

2011

2012

2013

2014 (FY)FY2014(million yen)

Japan

48.8%
150,178

Business Profile
Zeon products are highly versatile, functional materials used in all kinds of things you see and use every day.
Those excellent qualities have led to many of Zeon’s products earning the distinction of being No. 1 globally, including being the “first product of its kind in the world”
or having the “world’s leading market share.”Zeon’s main products are made from C4 and C5 fractions, aderivative of distilled naphtha originating from crude oil.
From there, we use substances, such as butadiene andisoprene, which are obtained with proprietary extraction■Business Structuretechnologies, to manufacture various materials andcomponents.
Our business segment is divided into three parts. The

Synthetic rubbers

Elastomer Materials Business includes a product linethat enhances the capabilities of the raw materials, ourSynthetic
latex

Isoprenemonomer

Chemicalproducts

C4 fraction
C5 fraction

High-boil
monomer

Oth e

RIM

2-butyne

Energycomponents

erials BusinessMatprocessed products, and the third is Other Business.

Elastomer Materi
als
Bu
si

products manufactured using advanced technology and otherS
Butadiene

lty
cia
pe

ss
ne

Specialty Materials Business features high value added

IT components

Medicalequipment

Dicyclopentadiene

Specialty
chemicalsr B u sin e ss

Technology
licensing

PaintsOthers① Tires① Automotive parts③ Road marking③ Paper diapers③ Adhesive tape

② Rubber gloves

Elastomer Materials Business
Elastomer materials consist of production in the three fields of synthetic rubbers, synthetic latex and Chemical products. In 1959, Zeon became Japan’s first company
to mass-produce synthetic rubbers. Even today, the Elastomer Materials Business is our core business, providing 60 percent of the total net sales and operating profit.

❶ Synthetic rubbers
We manufacture synthetic rubbers with a variety of strong points, such as SBR (styrene butadiene rubber), which has excellent
wear resistance, BR (butadiene rubber), which has excellent cold resistance and low exothermicity, and IR (isoprene rubber),which has the same performance as natural rubber. We supply these rubbers to major tire manufacturers around the world. We
also manufacture and sell specialty synthetic rubbers with excellent heat and oil resistance, such as NBR (nitrile rubber),
Zetpol® (hydrogenated NBR), ACM (acrylic rubber) and ECO (epichlorohydrin rubber), as rubber parts for automobile engine
compartments.

❷ Synthetic latex
Synthetic latex refers to emulsion-type rubbers and resins. Zeon manufactures and sells NBR latex, a material used in productsthat require oil resistance, such as disposable gloves and powder puffs; and SBR latex, a material used in products such as
paper coating and adhesives; and acrylic emulsion, a material used in textile processing and coatings.

❸ Chemical products
We manufacture petroleum resins, which are used as materials for adhesive tape and glues, and thermoplastic elastomer SIS(styrene isoprene block copolymer). Petroleum resins are also used in paints for road surface marking (traffic paints). SIS isalso used as a material for elastic film in paper diapers.

④ Televisions, smartphones
and tablet computers⑤ Lithium-ion batteries④ Digital cameras⑥ Medical equipment(medical devices)

Specialty Materials BusinessSpecialty materials refer to materials and components with high added value that use macromolecular design and processing technology.
Focusing on future growth areas, we are positioning the IT components (optical, packaging and electronic), energy components and medical equipment(medical devices) businesses as the three key business domains.

❹ IT components
We supply materials and components focusing on optics, packaging and electronics. Cyclo olefin polymers(ZEONEX®/ZEONOR®) excels in optical properties and is used as a raw material in optical components such as small-scale
camera lenses. We also manufacture and sell optical films (ZeonorFilm™) for LCD televisions and smartphones, insulationmaterials for semiconductors, and etching gas for the production of semiconductors.

❺ Energy components
Lithium-ion batteries are used, for example, in mobile phones and, more recently, in automobiles. In connection to energy
components, Zeon mainly manufactures and sells functional binders for lithium-ion batteries and sealing agents for gaskets.
Aqueous binders for anodes can restrict the swelling of electrodes, which contributes to heightening the capacity of thinsmartphone batteries, etc. We have also successfully developed and can therefore supply environmentally friendly aqueous
cathode binders, which are traditionally solvent-based.

❻ Medical equipment (medical devices)
Zeon is developing an integrated structure for development, manufacturing, sales and pharmaceutical affairs, mainly in theareas of circulatory and gastrointestinal systems. In terms of gastrointestinal systems, we are manufacturing and sellingdevices for use in endoscopy, including balloon catheters for gall stone removal for circulatory systems, we are manufacturing
and selling balloon catheters for IABP among other applications.

② Powder puffs⑨ Housing materials⑩ Paints⑦ Perfumes⑧ Printing toner❼ Specialty chemicals
We manufacture and sell synthetic aroma chemicals as well as chemicals for organic synthesis. Synthetic aroma chemicals arehighly-safe substances used in foods, fragrances, and cosmetics. Chemicals for organic synthesis that we produce include solvents forreactions and extraction, solvents for cleaning precision equipment, and solvents for electronic materials development and separation.
We also handle chemical products that are used as pharmaceutical and agricultural chemical intermediates and as raw materials forsynthetic aroma chemicals.

❽ Polymerized toner
Zeon achieved the world's first polymerized toner produced on industrial scale with ZEOGLOBULE™, a feat made possible throughadvanced polymer design technology and fine particle control technology cultivated by Zeon through its experience in synthetic rubberand synthetic latex. ZEOGLOBULE™ exhibits excellent transferability and dot reproducibility owing to its uniform spherical forms,
yielding higher image quality in page printers. Moreover, the encapsulated structure enables low temperature fixing which contributes
to lower energy usage and faster print speeds in page printers.

Other Business
The Other Business segment consists of businesses being carried out mainly by Group companies, such as the trading, paints/coatings, engineering, Reaction Injection
Molding (RIM), packaging materials, construction materials, and the deodorization-related business. It also includes the external licensing of proprietary technologies.

❾ RIM combination liquid and molded items
Zeon manufactures and sells combination liquid used in Reaction Injection Molding (RIM). This resource- and energy-saving molding
method utilizes dicyclopentadiene as a raw material and is able to simultaneously perform both polymerization and molding inside themetallic mold. The durability of plastics molded with this method is on par with engineering plastics, and waste material from theprocess can be used in thermal recycling or as solid fuel. Our combination liquid is utilized in large-size plastic products such as truck
and bus bumpers, windscreens, and the housing for residential septic tanks, as well as in household bathroom sinks and bathtub floor
surface material.

❿ Paints
Tohpe Corporation joined the Zeon Group in 2013. We plan to prepare a lineup of different types of paints for various applications, anddevelop paints to suit the needs of our customers.

Inter view with th e President

Toward the Achievement ofEnterprise Blueprint for 2020
President Kimiaki Tanaka explains the status of the Zeon Groupand the outlook for its future prospects in a Q&A format.

Kimiaki Tanaka
President

Q Please tell us about the recent business environment and the status of Zeon Group.
A A severe environment continues to surround market conditions for products in our Elastomer Materials Business.
Demand for optical films, part of our Specialty Materials Business, is growing despite significant fluctuations in business results.
As the second phase toward achieving Enterprise Blueprint for 2020, we are now engaged in the SZ-20 PhaseⅡMid-Term Management Plan.
The price of butadiene, the raw material for synthetic rubber, is declining
in line with the prices of crude oil and naphtha, and the long slump in theprice of natural rubber continues. As a result, market conditions for synthetic
rubber remain stagnant. In domestic sales, prices are set in line with theprice of raw materials. In overseas sales, however, spot prices prevail andare affected by prices including that of natural rubber, which declined overa short period. With competition from other manufacturers also severe, I
believe that we must create a structure for our Elastomer Materials Businessthat is able to adapt to changes in the market.
At the same time, each sector of the Specialty Materials Business has
its respective characteristics. Optical film, which makes a significant
contribution to our business results, is subject to variation in demandcaused by model changes in televisions and other products; as such, theproduct is characterized by ups and downs, rather than overall upwardtrending performance. Looking at broad trends, demand is rising in the areaof extremely high-resolution products, such as 4K and 8K televisions andsmartphones with screens of 350ppi (pixels per inch) or greater. Demand isincreasing for ZeonorFilm™, which boasts the performance able to meet thatshift to high resolution.
Overall, the impact from elastomer materials-related business, whichmakes up 60% of sales, is quite significant.
Amid this economic environment, the Zeon Group is tackling issues
focused on the achievement of the SZ-20 PhaseⅡMid-Term Management
Plan launched in fiscal 2014 as a second phase toward achieving Enterprise
Blueprint for 2020. In terms of management indicators, ROE (return on equity)
was 9.8% and ROA (return on assets) was 8.1%. As we aim for consolidated
net sales of ¥500 billion in 2020, we are making production efficiency visible
for each manufacturing line, along with necessary improvements, in order toenhance profitability. In addition, we are considering making decisions on
the continuity of each business while we track ordinary profit and investment
efficiency for each manufacturing line.

Q What are the current state and future strategies of the Elastomer Materials Business?
A We will focus on creating differentiation in product performance, especially in special synthetic rubber, and will closely watch the business.
With regard to products for which we have created differentiation, we will consider the raw material procurement environment and theposition of customers as we continue to optimize production sites globally.
In Japan, procuring the raw materials for synthetic rubber is becoming
increasingly difficult due to the global consolidation of ethylene production.
This makes it necessary for us to consider means of procurement from

9

ZEON GROUPCORPORATE REPORT 2015

overseas, yet importing raw materials from overseas increases costs. As an
example, we need to make stricter judgments than ever on whether the priceof synthetic rubber and the price of its primary raw material, butadiene, arein proportion.
Even commodity synthetic rubber, with large net sales, is not an exception.
To produce and manufacture product ourselves using high-priced raw
materials, we must create differentiation in our products’ performance.
While differentiation in commodity synthetic rubber is difficult, I believe
we should emphasize leveraging our technologies such as improved tire grip
and fuel economy. As examples, our specialty rubbers such as ZetpoI®, NBR(nitrile rubber), and acrylic rubber, and in the S-SBR (solution-polymerized
styrene-butadiene rubber) produced at our new Singapore plant.
In acrylic rubber, through our merger with Tohpe Corporation, we areengaged in locally-optimized production at three locations (Kurashiki,
Kawasaki and Kentucky) and are increasing profits and creating synergies.
Leveraging the heat resistance of acrylic rubber, we will specialize in highvalue products with greater differentiation in performance.

Our S-SBR plant in Singapore launched its first line in April 2014 and is
now operating at close to full production. The plant will launch its secondline in January 2016 and begin full production in the following April,
expanding production of differentiated products.
At the same time, ZCEL, our U.K. subsidiary that produces NBR, isconsidering the suspension of production due to changes in the market
environment and long-term uncertainties in procurement of key raw
materials in the region. In the end of March 2015, the company announced
that it has begun consultation procedures with its employees.
While we perform comparisons of cost differences among our domestic
plants, we hope to determine on production sites with overall global
optimization in mind. Our policy is to construct plants near sources of raw
materials or near customers, including those overseas in order to produce
differentiated products as in the case of S-SBR in Singapore.

Q What are the current state and future strategies of the Specialty Materials Business?
A We are currently seeing significant growth in optical films.
Our aim is to expand business by accelerating research and development in our three main business areas.
The expansion of energy components for lithium-ion batteries and expansion of medical devices are particularly promising areas.
The three main business areas within the Specialty Materials Business
are the IT components, energy components, and medical devices. Within IT
components, we have further determined three areas: optics, electronics, andimplementation. Optical film and ZEONEX® makes up the bulk of the optics
area. In response to growing demand for optical film, we have expanded
our manufacturing facilities in Takaoka, Himi, and Tsuruga. We are also
continuing research and development aimed at even higher-value opticalfilms. Together with this, we are pursuing research to further enhance thefunctionality of raw material resins, and are achieving results.
We will require more time in the electronics and implementation areas,
but we hope to continue pursuing research and development here, too, tobring new products to the world.
In energy components, we hold a majority share in anode binders

for lithium-ion batteries, and will expand our product line up to include
products such as aqueous cathode binders. While lithium-ion batteries
have always presented safety issues, data shows that our new products
have greatly enhanced safety through effects such as reducing the swellingof electrodes, while also improving the performance of batteries. Based onsuch data, we are working to expand our business to meet market demands.
With regard to medical devices, our cardiovascular catheters anddigestive system endoscopic instruments are now seeing use. Recently,
we have also brought to market new instruments for destroying gall stones
through endoscopic surgery for removal from the body. In cardiovasculardevices, too, we plan to bring new products to market this year, and are now
at the stage where we can anticipate expansion.

Q Zeon will launch a mass-production plant for single-walled carbon nanotubes (SWCNTs). What is the outlook in this area?
A By mixing SWCNTs into existing materials, we will develop products that display performance not seen before.
This fall, we will complete facilities for mass production of SWCNTs at
our Tokuyama Plant. Through mass production, material that had cost tens
or hundreds of thousands of yen per gram will become usable industrially at
prices quoted per kilogram.
When SWCNTs are mixed with materials, their currently known properties
imbue the materials with three qualities: (1) enhanced strength, (2) enhanced
thermal conductivity, and (3) enhanced electrical conductivity. By leveraging
these qualities and using SWCNTs not only as a strengthening material but

also as the material for devices, we can enable the effective use of heat andother energy that until now has not been effectively used.
The specific form of our materials business using SWCNTs is not yet
apparent. We are now at the stage of mixing SWCNTs with various materials
to investigate possibilities while we test performance. However, we havecome to understand that mixing SWCNTs in a variety of areas enables thedevelopment of brand new materials. Our hope is to create products making
use of this ability and to expand our business.

ZEON GROUPCORPORATE REPORT 201510

Q What are your ideas concerning research and development?
A We are moving ahead with research and development, with management and R&D acting as one and with speed-to-market always in mind.
We hope to continue spending about ¥12 billion per year on research and development.
To achieve our goal of ¥500 billion in consolidated net sales in 2020,
we must expand sales of existing products while successively bringing
new products and original technologies to market in a form matched to ourmanagement strategy. In addition to twice-yearly research and technology
presentations, our top management team, including myself, always
attends the research hearings that we hold every month. In fact, I visit ourlaboratories every month or even every two or three weeks, and try to convey
in easily understood terms what it is that company management is seeking.
It is also important that we create conditions in which researchers can
dedicate themselves to their research. We’re moving ahead to procure andinstall equipment required for research, and to create a structure that reduces
the burden on researchers from research-related tasks such as contracts forjoint research with universities and other companies. At the same time, we
are also working to make research itself more efficient through the effective

use of the knowledge and experience of laboratories as a whole, as well as
by ramping up communication across fields of research and, in particular, bycreating opportunities for communication with other areas and industries.
Through the preparation of this structure, we will engage in researchand development for new product lines that will greatly contribute to theperformance of the company. With regard to themes that are close to market
launch, management and researchers will share information on progress
toward events set within the new product development process, and will
work to ensure launch.
For fiscal 2015, we plan to spend ¥13.8 billion on research anddevelopment expenses. While we continue scrutinizing the content ofresearch and development, we hope to spend about ¥12 billion per year
on the expense.

Q What are your ideas concerning training and welfare for employees?
A We will educate mid-career employees using a new curriculum. I also want to prioritize employees’ health.
I’m of the belief that the capabilities of a company are greatly determined

We will also make efforts on behalf of employees’ health. No matter how

by the degree to which persons around age 40 are making efforts. The
question is one of how much they can change themselves to change thecompany, and how much they can break out of their shells. I believe we haveto increase opportunities for educating these core persons.
We have prepared a new educational curriculum, which includes me
spending a day to talk about various topics with all staff targeted for
promotion. I recall how such lectures by Chairman Furukawa, who was
President at the time, were hugely beneficial.

much we standardize our work, our business cannot operate without people
versed in fields of research and technology. Apart from sales and profits,
I believe it is important that we value the mental and physical health of
employees so they can exert their capabilities.
Our efforts here have only begun, but in the internal status reports wehold every three months, I try to not only report on business performancebut also talk about health and about the “Taimatsu (torchlight) ” that valueautonomous thought and activity by employees.

11

ZEON GROUPCORPORATE REPORT 2015

Messages from Outside Directors
Zeon's Outside Directors, who advise the company on the basis of extensive experience and deep knowledge in their respective fields, have provided the following
messages on Zeon and its corporate governance.

I come from a background in the assembly industry known as electrical machinery, with experience and a culture very different
from that of Zeon, a chemical company which require huge plants. I believe that my role as an Outside Director is to provide
Corporate Officers with opportunities to think about matters from broader perspectives through discussions of ideas drawing
on experiences in differing fields.
The things I place importance on in governance are compliance and open management. There was a period when cartel
issues were widespread among Japanese companies. I will watch closely to ensure that the company continues to strive forcompliance. Zeon must also see to it that the risks in every item for deliberation and other unfavorable items of information areproperly disclosed to Outside Directors so that judgments can be made. I believe that the ability to respond in this way is open
management.
Fiscal 2015 is my fifth year in the position. Over the past four years, Outside Directors have steadily increased in number anddiscussions have become more active. With the number of Outside Directors reaching three this year, I anticipate even higher
quality debates.

Haruo Itoh
FUJI ELECTRIC CO., LTD.
AdvisorStarting in the previous fiscal year, I have served for one year as an Outside Director. During that time, it has been my
impression that Zeon is a sound company that boasts a very high rate of profit within Japan’s chemical industry, actively engages
in investment and research and development for the future, and conducts governance properly with no impropriety.
I sense a seriousness in the company’s will to create good products and contribute to society.
While automobiles and machinery are the mainstay industries driving Japan’s economy, it is the materials industry thatwill support growth from here on out, with chemicals occupying an important position within that materials industry. The
competitiveness of each material supports the automobile industry as a whole. I hope to intensively question and advise Zeon,a top player in the materials industry, on its role in the future of Japan’s economy, and on whether the company is performing
technology development and the R&D from a long-term perspective for future growth, even at the expense of short-term profit.
Moreover, as Zeon’s performance is affected for better and worse by factors such as exchange rates, I intend to closely watch
for any missteps in company’s responses to signs of change in Europe, China, or elsewhere in the global economy.

Although I began serving as an Outside Director for Zeon this year, I have served as an outside corporate auditor for four years,
during which time I formed the impression that Zeon is a company that properly does what it should in terms of governance.
Visiting the company’s plants and laboratories, I felt that there was little distance between top management and employees andthat the atmosphere was conducive to communication. Moreover, in my capacity as the Chief Executive Officer and Chairman of
Yokohama Rubber, I have been able to learn from the operational methods of Zeon’s Board of Directors, such as its methods forreporting on deliberation items in the Executive Committee.
As an Outside Director, I hope to not only play a role in the oversight of management, but also to offer counsel that will makea positive difference in management. As I come from a background in chemistry, I have some knowledge of the field. Moreover,in addition to the relationship that exists between the tire manufacturer Yokohama Rubber and the materials manufacturer Zeon,
my company also has dealings with other materials manufacturers. While I cannot relate specifics, I believe I can offer ideas toaddress needs from the standpoint of customers, such as the sort of issues faced by end-product manufacturers, or the friction
resistance offered by high fuel-efficiency tires.

Takao Kitabata
Sanda Gakuen Junior High School& High School
Chairman of Board

Tadanobu Nagumo
The Yokohama Rubber Co., Ltd.
Chairman and CEO
and Representative Director

ZEON GROUPCORPORATE REPORT 201512

Business and Strategy

Elastomer Materials BusinessTransition in Sales (last five years)(100 million yen)
2,000

In elastomer materials, our core business is the three fields of synthetic
rubbers, synthetic latex and chemical products, the main materials of which
are C4 and C5 fractions derived from naphtha. In 1959, Zeon became

1,734

1,775

1,844

1,888

2013

2014 (FY)

1,640

1,500

Japan’s first company to mass-produce synthetic rubbers. Even today, theElastomer Materials Business is a core Zeon business, providing 60 percent

1,000

of the total net sales and operating profit.
500

0

2010

2011

2012

Business Outlook and Future Strategy
In the latter half of fiscal 2014, stagnation in synthetic rubber and natural rubber markets slowed
demand and oversupply occurred at the same time, resulting in price and profit constraints for our
synthetic rubber business during the fiscal year, despite strong sales of general rubber for tires. At thesame time, specialty rubbers delivered steady performance under robust demand.
Even within general rubbers, demand is high for S-SBR* used as a special rubber in fuel-efficienttires, and we are strengthening production through construction of a second line at our Singapore Plant.
Our specialty rubbers are seeing frequent usage in parts for increasingly high-performance automobile
engines. Timing belts, a major application for our Zetpol®, are used heavily in diesel engines in Europe,
but we anticipate expansion as gasoline engines also shift toward the use of belts around the world.
Our new Zetpol® series is used in gaskets and other components of newer engines that require highHiroyuki Hirakawa
Director & Senior Corporate Officer
Elastomers and Chemicals Business

resistance to heat and pressure. Acrylic rubber is a standard for oil and heat resistant rubber, and enjoys
high demand for use in parts such as hoses and sealing gaskets. We are investigating production
systems able to further meet new demand, with the possibility of building new plants in accordance withgrowth. As specialty rubbers are key to our profits, we will construct a production system that is able topreserve quality and provide stable supplies, and will set our strategy along directions that will strengthen
our position in competitive specialty rubbers.
Synthetic latex, like synthetic rubber, has been affected by slumping market prices. However, newgrades have come to market, and the use of latex is expanding in areas such as surgical gloves. We havealso gained a high share in soft non-woven fabrics and powder puffs.
In the area of chemicals, in addition to our thermoplastic elastomer (Quintac®) used in adhesive
tape and adhesives, we are working to grow our C5 petroleum resin (Quintone®) business to the No. 1
global position in its field. To respond to high demand, we are strengthening production capacity at theMizushima Plant from an annual 42,000 to 60,000 tons by the first half of 2016. In the future, we arelooking at expansion overseas as well.
For the synthetic rubber business, our Enterprise Blueprint for 2020 calls for “taking a front-runnerposition globally in synthetic rubbers.” In order to become the supplier able to offer the most value tocustomers, we are working to boost our presence in China, South Korea, and other Asian markets toachieve the level of presence we have already established in Japan, the U.S., and Europe by working
toward speed of delivery and technical service, and by improving the frequency and quality of contact
with customers. On the point of structural reform, in order to “change” the customs and culture that wehave built throughout the long history of the rubber division, we hope to make use of major personnel
rotations to draw out new vitality, and act from the pride and sense of responsibility that are ourfoundation to fortify the strengths that we currently possess.

*S-SBR: Solution-polymerized styrene butadiene rubber

13

ZEON GROUPCORPORATE REPORT 2015

Specialty Materials BusinessTransition in Sales (last five years)(100 million yen)
1,000

Specialty materials refer to materials and components with high added valuethat use macromolecular design and processing technology.
Focusing on future growth areas, we are positioning IT components (optical,

642

packaging, and electronics), energy components, and medical devices as
three key business domains.

709

750

500

498

481

514

2010

2011

2012

250

0

2013

2014 (FY)Business Outlook and Future Strategy

Masayoshi Oshima
Director & Executive Corporate Officer
Specialty Materials Businesses

In the Specialty Materials Business, we are using unique product concepts based on innovative
original technology to produce various high added-value products without being overly influenced by
the conditions of the materials market.
Our optical film ZeonorFilm™, an optical component, makes up a large part of our total net sales.
While we plan to further grow this field, our aim is to dramatically expand our business in packaging
and electronic components, energy components, and medical devices as a key point for the future.
In optical films, demand is high in the area of large-sized products such as large-screen LCD
televisions, and our new production line that began operation in February 2015 is transitioning to ahigh utilization rate. For medium- and small-size products like smartphones, the increasing size ofsmartphone screens is making up for weakness in tablets, and we believe that growth will continue. Zeon
engages in development of films building on our expertise and strength in cyclo olefin polymers. We
have won acclaim from customers for our films, a strength that we will continue to leverage. Moreover, tostrengthen our competitiveness through higher value-added products, we will engage in development ofmulti-layer films. (See “Highlight 1: Leading the World: Zeon Film Business,” P.19.)
For cyclo olefin polymers, we are developing applications for optical products such as camera lenses
and medical product packaging materials such as vials and pre-filled syringes. Adoption of cyclo olefin
polymers is expanding due to its superior properties including strength, lightness, and low levels of
impurities compared to glass, and its medical applications is an area in which an annual growth rate of
approximately 10% can be expected.
In packaging and electronics components, we are continuing research and development of insulationmaterials and new materials that will enable the further miniaturization of semiconductors, with an eye
toward future product commercialization.
After optical film, energy components are the field for which we foresee the greatest expansion.
Lithium-ion batteries for smartphones and other portable devices are transitioning from cylindrical andrectangular forms to pouch types. In response, Zeon’s battery binders for batteries are highly regarded fortheir contribution to improving performance and safety, and sales are growing considerably. At present,
we boast the world’s highest share in anode binders, and are aiming to expand adoption by expanding ourlines of products including aqueous cathode binders and ceramic separator components. In the future,
we anticipate significant growth in the battery market through the adoption of lithium-ion batteries in
automobiles.
In medical devices, from this fiscal year we expect to achieve results from research and development
as our reputation in the marketplace grows. We will strengthen this business while continuing to monitor
factors unique to the medical market.

ZEON GROUPCORPORATE REPORT 201514

Business and Strategy

Research and Development (R&D)

R&D Expenses(100 million yen)150

The R&D Center, the company's largest operational sector with over 400
researchers, conducts Zeon Group R&D activities. In addition to researchbuildings 1 through 10 located adjacent to the Kawasaki Plant, we conduct
Precision Optics Laboratory and Medical Laboratory next to the Takaoka Plant,
Toner Laboratory in the Tokuyama Plant, and Chemical Products Laboratory
in the Mizushima Plant. Through close collaboration with business units, wedevelop new products and improve existing products to meet the needs ofcustomers, while also advancing the search for new materials (New Materials
Development Laboratory), development and use of new analytical and simulation
techniques (Foundation Technology Laboratory), and new development andimprovement of production processes and equipment (Production Technology
Laboratory).

111
100

119

127

136

95

50

0

2010

2011

2012

2013

2014 (FY)R&D Strategy

Yoshiyuki Mitsuhira
Research & Development
Director & Senior Corporate Officer

Toward the achievement of the SZ-20 PhaseⅡMid-Term Management Plan, we will “roll out measures
to deepen collaboration inside and outside the company, and change our course to enhance output” in thearea of R&D as well. With regard to the single-walled carbon nanotubes (SWCNTs) for which we launchedfull-scale production in FY2015, we, centered within our new CNT Laboratory, plan to strengthen existing
collaboration with the National Institute of Advanced Industrial Science and Technology (AIST) andengage in collaboration with other external organizations. While also carrying out similar collaboration inother areas, we will strengthen cooperation across the boundaries of individual research laboratories, andwill improve the output of the R&D Center overall.
In order to create the new business seeds that will succeed SWCNTs, we are working to spark
individual researchers’ motivation and foster a corporate culture that will generate successive ideas for
new themes. To create such a corporate culture, regular personnel transfers that lead to new perspectives
and ways of thinking is critical. We will regularly perform personnel transfers not only among researchlaboratories but also among the business units where customer interaction takes place and the plants
where we engage in production. Zeon also pursues diversity as a strategy, and is actively engaging
the preparation of environments for including work/family balance and the globalization of researchers
through hiring overseas.
At monthly research hearings, individual researchers present and discuss about their research themes
directly with our top executives and pursue themes’ strategic positioning made clear. Moreover, to invest
in our future, we will ensure steady R&D expenses of about 12 billion yen per year.

■R&D System
New Materials Development Laboratory

Research & Development Center

CNT Laboratory
Precision Optics Laboratory (Takaoka)
Specialty Materials Laboratory
Advanced Performance Material Laboratory
Specialty Plastics Laboratory
Toner Laboratory (Tokuyama)
Chemical Products Laboratory (Mizushima)
Elastomer Laboratory
Production Technology Laboratory
Foundation Technology Laboratory
Medical Laboratory (Takaoka)

R&D Center

15

ZEON GROUPCORPORATE REPORT 2015

Manufactured Product Development Laboratory

First mass-production of single-walled carbon nanotubes (SWCNTs)
Collaboration among industry, government, and the academia
1 Mass production plant starts operation in FY2015
SWCNTs are said to be a “dream come true” due to their advanced mechanicalstrength and electrical conductivity. However, the cost of the material is high due
to difficulties in mass production, and the development of applications has taken
long time . Participating in projects of the New Energy and Industrial Technology
Development Organization (NEDO) from 2006 and engaging in joint researchwith the National Institute of Advanced Industrial Science and Technology (AIST),
Zeon has developed mass production technology for SWCNTs based on the
Super-growth method.*1 Building on this technology, in FY2011 we have begun■Super-growth method
Furnace

Carbon nanotube
Metal catalyst

operation of a plant to carry out a mass production trial run within AIST , and*1 The New Energy and Industrial Technology Development Organization (NEDO) “Carbon Nanotube Capacitor Development Project”

Gas
outletChemical
reaction
Substrate*2

in 2013 have begun supplying mass-produced samples to customers in Japan.
From the second half of FY2015 we will begin plant operation, with plans tomarket SWCNTs and related products.

Argon gas

Gas containing
minute amountof moisture■Plant*2 2009 Ministry of Economy, Trade and Industry supplementary budget project2 Applications development
Since 2010, Zeon has also participated in the Technology Research
Association for Single Wall Carbon Nanotubes, and through NEDO projects has
conducted development of new materials using SWCNTs.*3 When produced using
the super-growth method, SWCNTs possess properties including long length,
high purity, and high surface area compared with other carbon nanotubes, andhave been proven to enable the creation of extremely compelling new materials
when blended with other materials.
Looking at specific examples, SWCNTs compounded with elastomer materials
have resulted in high-durability conductive materials, compound materials
enabling microprocessing, and compound materials exhibiting heat conductivity
on par with iron. In addition, by compounding SWCNTs with metal materials,
an aluminum compound exhibiting heat conductivity of over 800W/m・K anda copper compound offering capacity 100 times that of copper have beendeveloped.
We anticipate that materials with such amazing properties will see application
in a variety of fields including energy, electronics, and functional materials.

■SWCNTs manufactured on Substrate■Characteristics of SWCNTs
2.5mm
1cm

*3 “Development of Innovative Carbon Nanotube Composite Materials for a Low Carbon Emission Society,” “Nano Carbon
Material Implementation Project for Achieving a Low-Carbon Society,” The New Energy and Industrial Technology
Development Organization (NEDO)

Length【Long】Up to mm-scale lengths!

3 nano tech 2014 Grand Award
The above initiatives received acclaim at the International Nanotechnology
Exhibition & Conference 2014 (nano tech 2014), and received the nano tech2014 Grand Award Academic-industrial Alliance Award. Zeon will continue toactively promote collaboration among industry, government, and academia tocreate new businesses around the core material of SWCNTs.

PuritySpecific surface area

【High purity】【Large specific surface area】

Catalytic impurities under 1%!

Black spots:
Catalytic impurities
Fibers:Nanotubes(Specific surface area of 800m2/g or more)
Largest value amongcarbon fiber substances!
SWCNTs synthesized by
the Super-growth method
Nearly no black spots
caused by catalytic
impurities

Conventional CNTs
Many catalytic impurities (black spots)

ZEON GROUPCORPORATE REPORT 201516

Business and Strategy

Production Management and Safety

New production innovations through process stabilization
New Zeon Production Innovation

In order to implement the Enterprise Blueprint for 2020, “Zeon Makes the
Future Today through the Power of Chemistry,” it is essential that we bothdevelop groundbreaking new materials and improve production in termsof greater cost competitiveness and stabilized production quality.

Production
innovation

Processstabilization

Process
innovation

Improved quality

SafetyCost reduction

Accidents occurring at chemical plants not only affect employees working
at the plants, but also they have a strong effect on society, with regard toenvironmental pollution within the local community, as well negatively
influencing customers if the supply of products is interrupted. Therefore,
Zeon places safe and secure production as themes of particular importancefor management.

Improving Stability and Safety along with Cost Competitivenessthrough Production Innovation and Process Innovation
Zeon engages in production management innovation primarily from two approaches (as shown above.)“Production innovation” (Daicel’s method of production innovation) is the activity by which we consider
every task caused by various changes on the production sites to be a load, consider the purpose of theworkload, how it can be more efficient, and standardize the solutions.
At the same time, we are also taking on “process innovation.” By changing some manufacturing
processes to something completely new, we can achieve great results in a short period of time, which
could not have been done with the conventional line of growth.
Production innovation starts from an on-site perspective by finding and eliminating the causesof existing loads. Process innovation rethinks and “changes” current processes in light of the latest
technology. Zeon uses both of these approaches to tackle the challenges of improving quality, safety, andcost competitiveness. This know-how will be extended to the global production system, and will be used
to achieve the Enterprise Blueprint for 2020.

Toru Nishijima
Director & Senior Corporate Officer
Division Manager
Production Center

Discovery of Issues and Acting as a Team through the 3Ss

Number of loads■The effect of the 3Ss on reducing load

Pace of reduction fell behind schedule

Scheduled pace of reductions
Pace of reduction
increased again by the 3Ss

Time

17

ZEON GROUPCORPORATE REPORT 2015

Last year, our pace of reducing loads through production innovation slowed. In response, we havegone back to basics to actively promote the 3Ss: sort, straighten and scrub. These 3Ss are not tasks
at the daily operational level, but are something deeper. As an example, an object placed in front of awindow becomes a problem, in that it hinders the window’s original function of letting in sunlight andthus the object needs to be put in order. We consider as a team where to place the object, or whether it isneeded at all. If it is necessary to place the object somewhere, we select a location where it can be usedconveniently. The result is that both the window and the relocated object can exert their full functionality.
Through the 3Ss, problems are discovered (Check), considered and improved as a team (Action, Plan),and the original work (Do) becomes more efficient, in accordance with the CAPD flow. Through thisactivity, we have made great progress in reducing the loads at work sites.
By applying the same in offices as well, we organize information and the placement of objects. Workand knowledge that were complex or were dependent upon specific staff have come to be shared.
While this step is one of production innovation, it is also a passing down of skills and knowledge.
By bringing together the ideas of every person who is involved in things that must be straightened out,
we enable a concentration of knowledge which is passed down during our consideration of issues.

Setting Our Aim beyond Process Innovation Initiatives■The relationship between production
innovation and process innovation

Process innovation seeks significant effects by changing a process itself. “Reducing environmental
impacts in plants” introduced on P.21 of this report are examples of this process innovation. In these
initiatives, expert staff, other than those on the production site, issue new recommendations, drawing on
ideas outside existing lines of thought. Consideration of safety is also of utmost importance in processchanges. We are committed to thorough change management that considers the potential for accidents
from every angle and then acts to eliminate that potential (see “Topic 1”).
What we are undertaking next is a completely new approach of uncovering and resolving matters thathave not yet been made clear as problems. As an example, while “inventory” itself is not a production
management issue of the same sort as quality or safety, its buildup creates a management load andrationalization of inventory is a constant issue for management. In response, we have identified inventory
as an issue in production management, and believe we can rationalize inventory through process
innovation. The initiative is one of resolving, in terms of production management, the issues that cropup when we change our approach. We have only begun the initiative, and results will not be apparent
immediately. However, the initiative is one that in the long-run is connected to the roots of our businessactivities, and is one that we expect will lead to a corporate culture in which workers always strive to
uncover issues themselves and always continue changing. We believe it is also a part of our Enterprise
Blueprint for 2020.

Cost

T

o p i c s

1

Safety and Change Management
A lack of “change management” has been suggested asa cause of the recent spate of accidents at chemical plants.

T

opi c s

Production innovation
Process innovation
Production innovation

Time■Discovery of new task
(Not problem of a production process)

Task
Challenging the solution
in view of
production management

2

The Importance of Standardization in Deploying Technology
Overseas
Today, in the operation of our plants in Japan, employees of not only Zeon Corporation

When equipment or operational methods are changed to

but also those of multiple Group companies and partner companies divide up a variety of

improve equipment or boost production capacity, it is “changetasks, from transport of materials to production, shipment of products, and maintenance ofmanagement” that envisions and deals with the possible impacts

equipment. Within this arrangement, there exists detailed know-how that is not written intoof those changes.

manuals. Examples include our method for fully removing in-shipped raw materials from their

In order to perform more complete change management, it isdrums, and our method for wrapping products for shipping in protective film with no slack.

important to gather and consider the knowledge of more people.

While a plant itself can be operated through the flip of a switch, we require this know-how,

However, simply circulating documents among a larger number ofborn of long experience and through techniques devised by employees, in order to continue

people only creates a facade. At Zeon, the people involved with an

the stable creation of quality products without waste.

issue meet face to face and employ techniques such as structuring

When establishing new production lines overseas, we work to eventually enablediscussions under a representative system. Moreover, throughoperational management completely through locally-hired human resources. In order to do

the “concentration of knowledge” that we build through this direct

this, we must collect the aforementioned detailed know-how, from in-shipping of raw materials

communication, we intentionally enable people to pass down skills.

to shipment of products, and must identify and standardize all of the tasks that people perform.

ZEON GROUPCORPORATE REPORT 201518

Highlight 1

Leading the World: Zeon Film Business
Key Points in the Films Business1. The display market is progressing toward larger sizes and higher definitions, a strength of ZeonorFilm™, while film applications expand in all directions
2. ZeonorFilm™ boasts a high global share in films for displays
3. The manufacturing method utilizes our original technologies, including the world’s first sheet extrusion manufacturing process for optical films
4. Zeon performs integrated production, from design to manufacture, of the resin that forms the raw material for films
5. B etween 2005 and 2014 Zeon moved its research division closer to the manufacturing department to further strengthen our start-to-finish development
capabilities, as well as our production capabilities

The flow from development to final productResin manufacture
LCD TVs

3D LCD TVs(Mizushima Plant)

Film manufacture

Organic ELs

Resin design

Smartphones

Cooperationin researchand development(Optes Hokuriku Plant)

Precision Optics Laboratory and Optes Hokuriku Plant are adjacent

Growing the Films Business through Expanding Applications
that Leverage Our Film’s Unique Properties
Demand for displays is moving toward large-size and high-definition
growth slows, demand for film remains robust.
Moreover, large-size, high-definition TVs demand higher performance inthe optical properties and dimensional stability of films. Zeon commands a

LCD TV panel demand and the 4K market penetration rate of 50-inch and larger TVs(Source: The 28th DisplaySearch Japan Forum)
100

300
250

80

200

60

150
40

100

high market share in this film sector that requires high performance, and we50

anticipate that this forte sector of ours will continue to expand.

0

20

2013
■50"+

2015

■39-49" ■15-38"

2016

2017

2018

4K penetration rate

to-medium size devices is also expanding, and ZeonorFilm™ is finding

Demand for smartphone and tablet panels, by resolution

adoption in touch panels for its heat resistance and diagonal stretching(Source: The 28th DisplaySearch Japan Forum)

technology.

Panel demand (millions of units)

At the same time, the sector of smartphones, tablets, and other small-2014

In future, display devices are expected to go beyond LCDs and to expand
into new sectors such as organic ELs, automotive monitors, digital signage,and more. In another very recent application, adoption of our film has begun
in light extraction film for light-emitting organic EL screens.

3,000
2,500
300
2,000
250
1,500
200
1,000
150
500
100
50
0

19

ZEON GROUPCORPORATE REPORT 2015

0

2013

2014

2015

2016

■High resolution ■Medium and low resolution

2017

2018

0

50"+ 4K penetration rate (%)(4K, 8K, etc.) products. With screens becoming larger in area even when unit

Tablets

Digital signage

Panel demand (millions of units)(Precision Optics Laboratory)

Characteristics of ZeonorFilm™
(1) Excellent optical properties
High transparency... Allows brighter screens
Low birefringence... Optimal for polarizing plates due to stable light emission(2) Low moisture absorption, low permeability
Does not absorb water and change dimensions; suited to large screens and outdoor use(3) High heat resistanceSuited to touch panels that go through heating processes, or automotive applications
used in high-temperature conditions(4) Low outgassing
Resists release of moisture or organic substances such as gas, lowering impact on
the environment

ZeonorFilm™ manufacturing method and characteristics
Unvarying thickness and uncompromised quality are important in optical films. In continual production, Zeon achieves a high level of surface smoothness.
Moreover, to eliminate optical defects due to causes such as dust, Zeon produces film in a clean room and performs continuous machinery and final inspection
under the eyes of highly-trained inspectors.
Films made using the sheet extrusion process (Low cost, high efficiency)

Films made using the multi-layer extrusion process (Low cost, high efficiency)

Converts melted resin directly into film, without the use of solvents.

Melts multiple types of resin simultaneously, layering those to create film.

For base film used in touch panels, etc.

Used for viewing angle compensation in small to medium size IPS LCDs, etc.

Successive biaxial stretched films (Large size, high resolution)

Diagonally-stretched films (High resolution, low reflectivity, low cost)

Stretched successively in the vertical and horizontal directions. Resolves the problem of

The only product in the world that stretched successively in diagonal direction. Used for

degraded contrast caused by surrounding light leakage in LCD TVs.

viewing angle compensation in smartphones and reflection prevention in organic EL TVs.

Continuing to lead the world in optical film
ZeonorFilm™ is manufactured by Optes Inc., a company in the Zeon Group. The Optes Hokuriku Plant has manufacturing sites in three locations in thecities of Takaoka, Himi, and Tsuruga, each with multiple manufacturing lines. Demand is extremely robust for high-performance ZeonorFilm™. This spring,
our production capacity exceeded 150 million m2 per year, and we continue to undertake constant efficiency improvements and capacity enhancements.
The competitive advantage of ZeonorFilm™ lies in our original manufacturing technology and in our integrated production that begins with
development of resin raw material. Our sheet extrusion process, continuous biaxial stretching process, and diagonal stretching process are technologies
not found in other companies. In resin development, we are able to manufacture made-to-order “specialty resins” with compositions matched to film
manufacturing conditions or to products. By possessing technologies for both raw material resins and manufacturing processes, we maintain ourcompetitive advantage.
It is through high value-added products, not commodity goods, that we are able to take full advantage of these technical capabilities. By providing theadded value that can adapt to higher definitions and larger sizes, we avoid being impacted by the commoditization of appliances.
From 2005, we have gradually moved the Precision Optics Laboratory, our research and development department, to Takaoka. With development
and production located near each other, we quickly engage in test production of newly designed resins using actual equipment, and therefore perform
development with greater speed.
What we value most at the Optes Hokuriku Plant are safety, technology, and people. In order to stably produce high-quality products, we strive foreducation and equipment that assures a high level of safety, improvement of technological capabilities involving production, and the development of
human resources able to embody these efforts. Such on-site work capabilities, along with the growth potential of the market, are what support the future of
our Films Business.

Seiichi Kusumoto
Optes Inc.
Director and Hokuriku Plant
Manager

ZEON GROUPCORPORATE REPORT 201520

Highlight 2

Reducing environmental impacts in plants:
Initiatives to improve energy efficiency

IN

In the use of raw materials, energy, water, and other resources

Plant

Items coming into plants /Items used in plants

in production activities in our plants, Zeon strives to lower
impacts on the environment as much as possible.
As chemical plants in particular consume a large amount of

Items (raw materials,
other materials, fuel)energy, how to make efficient use of energy is a key theme interms of both energy conservation and production costs.

Water (industrial water),air

Conversion to steam and electricity

Energy flowin plants
How to efficiently use
100 units of energy?

Boiler / in-house power
generation equipment

Energy(Fuel, electricity)

100

193,000kL (equivalent in liters of crude oil)90 +10(energy conversion efficiency)

Energyconversion
loss

The majority of the steam and electricity that power the plant
are generated from the boilers and in-house power generationequipment installed in the plant. How efficiently the fuel,the source of energy, is converted to steam and electricity isimportant.

Energy efficiency improvements in plants
From 2012 to 2015, we undertook initiatives to improve energy efficiency as we upgraded equipment in our plants in Japan.
Mizushima Plant (2015)
Boiler upgrade and new
installation of heat storage
combustion equipment

Tokuyama Plant (2014)
Renewal of boiler turbine in-house
power generation equipment

The plant increased thermal efficiency bygeneration equipment to improve heat recovery

renewing boilers and installing heat storage

efficiency and power generation output. By

combustion equipment.

replacing crude oil with city gas for a portion of

The plant renewed all of its in-house powerits fuel, the plant also reduced CO2 emissions.

Kawasaki Plant (2014)
Upgrade of co-generation units

21

ZEON GROUPCORPORATE REPORT 2015

Along with an upgrade to new high-Takaoka Plant (2014)
Upgrade of boilers to compact,
high-efficiency boilers

efficiency equipment to boost thermal

The plant uses steam more efficiently throughefficiency, the plant enhanced its electricaldetailed control. By changing fuel from fuelpower generation output and now supplies

type A to liquid natural gas (LNG), the plantelectricity to a new power utility.

has reduced CO2 emissions.

Purifying waste gas
Waste gas containing volatile organic compounds,
generated from boilers and in-house power generation

OUT

equipment during the production process, is treated andrendered harmlessin boilers or in heat

Items going out from plants /Items discharged

storage combustion
furnaces.

Cleaning waste water

Products

We use microorganisms to clean waste water containing

CO2, waste gas,
waste water, wastes

Consumed in production processes

Production equipment

70

The steam and electricity produced by the boiler and in-house
power generation equipment are consumed in the plant’s
production processes.

Effects of theinitiatives(1-year equivalent)sulfur, nitrogen, organic compounds, or other substances.

Emission of heat

Exhaust / waste water /diffusion

30

Some heat is radiated as waste gas and waste water, while
another portion is lost to diffusion as it circulates through theplant interior as steam. Following consumption, exhaust andwaste water remain and are emitted.
Zeon works maximum efficiency.

Energy consumption

CO2 emissions

13,000kL reduction

42,000t-CO reduction(crude oil equivalent)2

Company-wide initiatives for achieving high levels of energy conservation and production activities
Yasuhiro Yoshinaga
Manager, Group of Energy, Production Administration, Production Center

Boilers and in-house power generation equipment are important items of equipment, supplying the steam and electricity that are sources of power. In
initiatives that accompany upgrades of this equipment, we scrutinize detailed requirements such as the steam and electricity amounts necessary for eachplant, and make plans with an eye toward future demands.
Zeon has established a team of energy experts in the head office, and investigates improvement plans while discussing each plant's specific conditions withplant personnel. In the latest initiatives, completion of new equipment installation was concentrated in 2014 and 2015, but for years prior to the investment
decisions, I visited plants many times to work out measures with plant staff.
I hope to make efficient use of the newly completed equipment, and to undertake further energy conservation by visualizing and eliminating hidden sourcesof wasted energy.

ZEON GROUPCORPORATE REPORT 201522

Highlight 3
Impetus for attaining theEnterprise Blueprint for 2020

Creating corporate culture via
Taimatsu (torchlight) activities
We believe that it will not be easy to achieve the goals in our Enterprise
Blueprint for 2020 by relying on our current operations. It is our belief that each

Taimatsu activities

individual employee must have the initiative to take action to respond to changes

Taimatsu means torchlight, and the Taimatsu activities
are to achieve the mid-term goal by “Awareness,” “Aim”
and “Act” with the expression in the words, “What I
wish to cherish?” “What I wish to do?” and “What I
wish to be.” We named it “Taimatsu (torchlight)” with
our passion, by comparing the scene each member ischanging to the scene each member lights a torch thenthe flames are increasing and expanding.

and continue to engage in challenges to meet high goals, even in a rapidlychanging environment where the outlook is unclear.
As an initiative to nurture and strengthen the treasured Zeon characteristics(mutual trust and fellowship) and the key sense of value (speed, dialog, and social
contribution) shared by all persons in the Group, all departments and Group
companies have engaged in the Taimatsu activities since July 2012.

An overview of Taimatsu activities – Passing on the torch of change in an upward spiral –Taimatsu activities have reached their fourth year (Term Ⅳ), with 325 persons (about 10% of all employees) from all departments
and Group companies active as Taimatsu members.

① Selection: The thoughts of each individualEnterprise Blueprint for 2020

Taimatsu members for the year are
selected from each department. In thisselection, we place importance on thethoughts of departmental heads andeach individual.

⑤ Reflection: Toward the next step
By looking back on the year and “taking
inventory,” current-year members
consider activities for the next year andtheir own involvement in these.

rtme① Selection of Taimatsu members

pa④

ntal ac

ti

vi

⑤

s
tie

TermⅣ: 89 persons

De② Joint workshop with members
from the previous and current year
TermⅢ: 86 persons④ Practical action: Widening the activities

TermⅡ: 81 persons

The current-year members undertake
various activities while engaging in
dialogs within their departments.

TermⅠ: 69 persons③ Workshop conductedby current-year members③ First step: Just get started
The current-year members gather to gain
insights from each other through dialog, andto connect these insights to actions.

23

ZEON GROUPCORPORATE REPORT 2015

② Sharing: Awareness and uncertainties
Members from the previous year share their insights
and ideas with members in the current year.
The latter members also share the anxieties, pointsof confusion, and other uncertainties they hold.

Voices of Taimatsu members
Taimatsu members from Term Ⅲ engaged in activities under the slogan “Just get started!”
Below is a look at the thoughts and realizations of some Term Ⅲ members.
I want to help create a corporate culturethat allows proactive planning and execution

Close the laptop and think deeply
Finishing Term Ⅲ, I realize the importance of closing the laptop and thinking
deeply. Most of my work involves using a computer, but by closing the lid toengage in thought and discussion about my work and my department, I started
thinking more than ever about how those around me think about the company andabout themselves. The ability to quickly transition such questions into action andinvolve others is a good point of the Taimatsu activities, which I hope to expand
outward. (Raw Materials and Distribution Supervisory Department)

As a Term Ⅲ member, I carried out a plan for health promotion and a laboratory
study tour group to promote interaction among workplaces. The plan was
well received by participants. I hope to create mechanisms for the continuous
implementation of such activities, and to help create a corporate culture in which
many people can proactively create and execute plans. I also want to make gooduse of venues like the joint workshop where people light their torches, and connect
these to improving awareness in my department. (Zeon Kasei Co., Ltd.)Greater participation leads to a more positive attitude

Moving to less formal terms of address
in email

Looking back on the Term Ⅲ activities, I realize that in a dialog among
many people, ways of thinking will differ by individual, with no correct answer.
However, the minimum requirement is having a positive attitude toward
all things, and I believe that this attitude becomes stronger the more one
participates. I hope to make use of my experience as a Term Ⅲ member to makefurther positive improvements in myself and create many connections amongpeople. (Optes Inc.)

A never-ending venue forgreat personality
At first, I was hazy on what “Taimatsu” is, but felt relieved
when the Term Ⅲ members were able to systematically
carry out what they had decided via thorough discussion.
As Term Ⅲ members, we met many times and engaged
in a lot of discussion. Not surprisingly, I reaffirmed theimportance of listening to the opinions and ideas of others,of expressing my own, and of human relationships (i.e.,the quality of relationships). I think that Taimatsu, as anopportunity to grow through dialog, human relationships,
personal thoughts, and experiences, is a never-ending
venue for great personality. (Kawasaki Plant)

Just get Started!

When I think seriously, the Taimatsu
starts to burnTaimatsu

Creating mutual trust through dialog
and respect for each otherI took part in activities under the Taimatsu poster slogan of “Just get
started!” Unfortunately, I engaged in evaluation and reflection on the content
of activities more than was necessary, and failed to create a continued flow.
However, through the activities I realized that I place importance on thevalue of talking, respecting each other, and, from these, creating mutual
trust. It's my hope that the Term IV Taimatsu members will also gain insight
into something important through the activities. (R&D Center)

I'm proud of the activities created byfour minds together
My group of four Term Ⅲ members decided to carry on the thoughts of
TermⅠandⅡand to have fun undertaking the Taimatsu exercises*. With allof the members openly expressing ideas for how they wanted to do things,
we came up with a plan that we could all enjoy. The plan that we four Term
Ⅲ members came up with by putting our minds together is one I’m proudof, and I'm glad I gave it a try! We were able to have fun in Taimatsu, andeach of us feels that we have grown. (Mizushima Plant)*We made a point of calling the activities “exercises.”

Our company introduced departments and individuals
to all employees in relay fashion. We acted to create anenvironment more conducive to talking by toning down
the formality of terms of address in email. When I thinkback on why were able to conduct all sort of activities, inthe end it was because we had colleagues who cooperated
with one another. By oneself, shyness and embarrassment
pose limits. Taking action together creates peace of mind,
however, and through dialog, members heighten their“Taimatsu awareness” and can generate results. Somecolleagues are continuing as Term IV members. Precisely
because these are colleagues, under the slogan “Taimatsu”
I want to offer support from the sidelines so that individual
match-like flames become a great fire. (Zeon Medical Inc.)

The most important thing that I discovered is thinking seriously.
What to do in the Taimatsu activities is left open, and we're nottold what to do. What is the vision to achieve? What do we want
to do to get there? Without thinking seriously, nothing changes.
Seen the other way, when we start to think seriously about thesethings, the torch begins to burn. I hope that the “dialog activities”
and other activities that we carried out as members will provide
everyone opportunity for thinking. (Tokuyama Plant)

Out of the fog and into a patch of blue sky
The baton has passed from Term Ⅲ to Term IV Taimatsu members. Those with experience
as Taimatsu members now number 325 persons, about 10% of all employees. New
members are at first unsure of what to do and feel uncertainty. However, while hearing thewords and experiences of those who took part before them, the new members go on tolaunch their own activities. The number of activities are increasing year by year, and arerich in variety. In this way, I believe that the Taimatsu activities, too, have found a patch ofblue sky from out of the fog, and people have come to understand the paths and directions
they should take. I am certain that the Taimatsu activities that weadvance together will provide a driving force in reforming ourcorporate culture toward Enterprise Blueprint for 2020.

Yoshiyuki Mitsuhira
Director & Senior Corporate Officer
Official in charge of Taimatsu activity promotion

ZEON GROUPCORPORATE REPORT 201524

Strengths Supporting our Businesses

Employment and Human Resource Development
Zeon requires respect for human rights and prohibits discrimination in its CSR Code of Conduct. We
strive to be a business that is understanding and accepting of diverse values and where no person is
discriminated against based on gender, age, nationality, or other attributes.
We encourage employees to continually evolve by pursuing high goals based on independent thinking,develop human resources systems that challenge them to achieve their potential, and maintain comfortable
work environments that value dialogue toward establishing Zeon as an enterprise where every employee*
can work with pride.

* Zeon refers to all workers as employees, including bothfull-time and part-time workers.

“A company of which each and every one of its employees can be proud”

Encourage employees tocontinually evolve by
pursuing high goals basedon independent thinking

Human resources systemallows a sense of challenge
and achievement

A comfortable working
environment that values
dialogue■Basic Information on
Zeon Corporation's Employment Conditions(unconsolidated; does not include non-permanent employees)

A wide variety of human resources
Respecting human rights, Prohibition of discrimination(No. of employees)

MaleFemale

Total

1,513

166

1,679

Newly graduated

31

13

44

Mid-career

6

3

9

Employees
No. of new hires

Employment Conditions
As of March 31, 2015, employees of Zeon Corporation alone numbered 1,679, while employees of theconsolidated Zeon Group numbered 3,216. Zeon works to hire persons with disabilities, particularly in officepositions. Zeon Corporation’s employment ratio of workers with disabilities was 2.04%, above the statutory
minimum of 2.0%. We have also adopted a reemployment system for retired employees that is sharedacross the Group. We refer to these workers as (Zeon) master employees as a sign of respect. These master
employees are given the opportunity to stay with the company to pass on skills and train their successors.
All the eleven employees who retired in fiscal 2014 continue to work for the Zeon Group.
We also engage in support for balancing work with child care, and have acquired the Kurumin mark thatindicates a “company that supports childrearing” under the Act on Advancement of Measures to Support
Raising Next-Generation Children.

Percentage of disabled recruits

2.04%

Rehiring of retired employees

11 (100%)

Of which, there is a total of 17 foreign employees (10 male employees
and 7 female employees).
Newly graduated: Employees that joined that company in April 2015
Mid-year: Employees that joined the company in April 2014 to March
2015

Kurumin markHuman Resource Development
Zeon’s concept of “being the employee you want to be” refers to employees who think independently
and continually adapt themselves to achieve high goals. Employees at Zeon are encouraged to visualize
the employees they want to become, while Zeon tailors its education and training practices to help each
employee bridge the gap between their current and visualized selves and to take daily steps towardthat vision. By fairly assessing the results of those actions and changing how we treat each employee
accordingly, we encourage employees to set ever higher goals. All of these concrete, interactive actions toeffect change and improvement are harnessed toward creating a more vital workforce across the company.

For details on our activities,
click the following URL.

25

Relationship with Employees

http://www.zeon.co.jp/csr_e/employee/index.html

ZEON GROUPCORPORATE REPORT 2015

■Resource Development Flow
Change employment
conditions
The employee
I want to be
Evaluation

Education andtraining
Tasks andperformance

The employee
I want to be(higher goals)
Education andtraining

Environmental Initiatives
Environmental Philosophy (Established August 2001)
1. Environmental protection is a mission of a socially responsible organization
2. Our basic belief is that environmental protection can be achieved with innovative technology
3. Environmental protection will be achieved when all employees work together with a sense of
mission to overcome challenges
Zeon established its Responsible Care Policy, which embodies the principles of responsible care, in
1998, and established its Environment Philosophy in 2001. Within our environmental initiatives, we haveset goals for the Group that are broadly based on the two pillars of eradicating environmental irregularities
and reducing environmental impacts, with each workplace planning and executing specific initiatives.

Eradication of environmental irregularities and reduction ofenvironmental impacts
Zeon has set “Zero environment irregularities*”as a goal to be achieved every year. With the exceptionof one negligible infraction of environmental standards that occurred in fiscal 2012, more recently wehave maintained this goal of zero irregularities.
With regard to the reduction of environmental impacts, we have set environmental impact reduction
targets and are engaging in initiatives in three areas: 1) promotion of a voluntary management plan
for air-polluting toxic substances, 2) promotion of a zero-emissions plan for industrial wastes, and3) strengthening of our company-wide project for energy conservation.

*Environmental irregularities: Failure to meet environmentrelated statutes or voluntary standards. This can also referto a situation in which standards were met, but might nothave been met if normal measures had been taken. It canalso refer to a situation in which standards are not set but
a complaint was received, or in which failure to act might
have resulted in a complaint. (Defined in company rules)

1) Promotion of a voluntary management plan for air-polluting toxic substances
Acrylonitrile is the substance subject to PRTR that is the highest volume raw material processed by
Zeon, and is also specified as a substance requiring priority action in measures under the Air Pollution
Control Law. As such, we are undertaking planned reductions of our emissions of the substance. In fiscal
2014, our emissions volume totaled 11.5 tons, a 0.98% reduction from the previous fiscal year’s target
level. By strengthening our implementation of acrylonitrile recovery equipment, we continue working to
reduce emissions.

Acrylonitrile recovery
equipment

2) Promotion of a zero-emissions plan for industrial wastes
Zeon’s workplaces continue to achieve zero emissions of industrial wastes (defined as less than 0.1%of the volume of emissions in fiscal 2007), a goal we first reached in fiscal 2011. For Group companies
in Japan, the rate stands at 0.14% of the volume of emissions in fiscal 2007. We will continue striving tobring the volume down to less than 0.1%.
3) Strengthening of our company-wide project for energy conservation
Zeon has set a long-term goal of reducing our volume of CO2 from fuels, as defined by Japan’s Law

Waste sorting yard

Concerning the Rational Use of Energy (the Energy Conservation Law), to 80% of our fiscal 1990 levelby fiscal 2020. To achieve this, we have set a target of improving unit CO2 emissions by 1% per year.
In fiscal 2014, we achieved our goal with emissions of about 510,000 tons, or about 79% of emissions
in fiscal 1990.
(For details, see P21 “Highlight 2: Reducing environmental impacts in plants: Initiatives to improveenergy efficiency”)

For details on our activities,
click the following URL.

Environment

High-efficiency compact reflux boiler

http://www.zeon.co.jp/csr_e/environment/index.html

ZEON GROUPCORPORATE REPORT 2015

26

Strengths Supporting our Businesses

Social Contribution Initiatives
We believe it is very important to contribute to the development of the local community, build strong relationships of trust to operate stable business activities,
and produce improved products and services.

Zeon’s Basic Policies on Social Contributions
We believe that traditionally, social contributions are essentially carriedout through core businesses. As long as a company is a member of society,the complex set of issues society is facing and corporate activities are
not independent of one another. Zeon is embarking on social contribution
activities outside the realm of its core businesses to have a broader
perspective for engaging with society.
In 2012, we launched CSR Core Projects, which are initiatives weselected from proposals submitted by group companies. The CSR Core
Projects are activities that focus on social contributions outside the scope ofcore business operations and provide employees with an opportunity to turntheir attention toward social issues.
We have planned various activities related to supporting reconstruction
after the Great East Japan Earthquake and projects mutually implemented
by different offices and group companies. There are also social contribution
activities that, to date, have been performed independently by each office andgroup company. We are developing activities in these three categories while
also focusing on synergistic benefits.

CSR Core Projects
Projects

Detailed activities

FY2015 Targets

Great East Japan Earthquake restoration
Launched October 2012
Implemented 40 times as of March 2015 (total of 263 participants)
Ongoing initiative
Restoration volunteer tours
Disaster restoration assistance (Minamisanriku, Rikuzentakata), agricultural aid (Iwaki), Fishing (Frequency goal: 1-2 times per month)aid (Kesennuma), etc.
Support restoration of industries by actively using food products grown in disaster-stricken
Eat and root for restoration!
areas
Ongoing initiative
Campaign
Offering a menu of Tohoku-grown foods at the employee cafeteria and Z Plaza (employee lounge)
The tree-planting was concluded inParticipating in the building of Planted Heisei-no-mori in Otsuchi Town (Sponsored by: Yokohama Rubber/Otsuchi Town, Iwate
FY2015. Our ties with Otsuchi Town
a forest embankment to protect Prefecture)continue through activities including
lives*
Sponsor and participant since FY2013
post-planting maintenance.
Mutual projects

Chemistry classroom

Ecocap recycling(Collecting used plastic caps)
Green purchasing of officesupplies

Development of chemistry classroom
Summer vacation events, classes where local residents do experiments while touring our offices (increase in classroom held at offices)
Head office: Summer holiday children's chemical experiment show (participating from FY2013) Expand the number of experiments
Tokuyama Plant: Experiment class during industrial tourism tour for parents and their children conducted(Newly create an experiment package)
Began count at all group companies from FY2012
Ongoing initiative
FY2014 results: 722,000 caps recycled (437,000 in FY2013)
Purchasing office supplies with minimal environmental impact (notebooks, book-binding tape,folders, etc.) Of the 44 items stipulated under the Green Purchasing Law, we switched to 22
Ongoing initiative
items (50%)

Independent projects
Select topics for eachpromotional committee

Engaging with the local community
Participation in local events: Sponsor and cooperate in various events
Clean-up activities
Educational support: Internships, dispatch lecturers to schools, etc.

Ongoing initiative* Building forest embankments to protect lives
These activities are being carried out to create a forest that will act as an embankment protecting local residents against tsunamis. This consists of piecing together debris from the disaster and soil
to build an elevated area along the coastline, which was damaged during the tsunamis triggered by the Great East Japan Earthquake. Various trees native to the area are being planted on the elevatedground to create a multilayer forest.

For details on our activities,
click the following URL.

Relationship with Society

Response to Great East Japan Earthquake and Tsunami Disaster

http://www.zeon.co.jp/csr_e/community/index.html

http://www.zeon.co.jp/csr_e/introduction/earthquake.html

Site Reports

http://www.zeon.co.jp/csr_e/site/index.html

27

ZEON GROUPCORPORATE REPORT 2015

Great East Japan Earthquake reconstruction volunteering
We continue to send employees
to areas affected by the Great East
Japan Earthquake by looking for
employees to sign up for a regularrestoration volunteer tour. The
company covers the entire costto actively promote employee
participation. We turn “support”
into “encouragement,” and“encouragement” into “exchange.”
Given the risk that the memory ofthe devastation will be forgotten,
we believe that it is now even more
important to continue to undertakethese activities.
(Picture: In November 2014,
volunteers partook in the Organic
Cotton project in Iwaki, Fukushima
Prefecture.)

Chemistry classroom

Cooperating in tree planting in disaster-stricken areas
From 2012, the town of Otsuchi
Town (Iwate Prefecture) andYokohama Rubber Co., Ltd. held atree planting campaign, Heisei-nomori, in Otsuchi Town as a modelcase to create a forest embankment
to protect the lives of the local
community. Zeon has cooperated
with this tree planting campaign
since 2013. In 2015, the fourth
time we cooperated in the event, 47
employees, including the chairman,
partook in this campaign. We, alongwith local residents, planted 15
different types of tree seedlings.
(Picture: Tree planting in May 2015.)

Relationship with Society (Educational support)
Based on our motto of “nurturing
future Nobel Prize winners inchemistry,” we are conducting
chemistry experiment classrooms
in various regions to teach childrenthat chemistry is fun. It is our desirethat children, who are responsible
for the future, gain an interest inscience, not only chemistry.
(Picture: We held an exhibition andworkshop called “Amazing Stick-On
and Peel-Off Stickers: Let's Make
Original Hand Fans” at the “Dream
Chemistry 21” Summer Holiday
Children's Chemical ExperimentShow 2015.)

Relationship with Society (Event)
Zeon places great importance on
connections with local communities.
Zeon offices and group companies
hold various events, includingsummer festivals and actively
participate in numerous local events.
(Picture: The Tokuyama Plant
sponsors the Zeon Waraku Odori
Dance Festival, which is a regularsummer event that was first held in
1974. Every year, more than 2,000
people participate in the festivities.
In FY2015, the festival was canceled
due to the impact of typhoon.)

Relationship with Society (Activities with the Local Community)
We are carrying out activities
with local communities in various
regions. Zeon Advanced Polymix
in Thailand is aiming for harmony
with its community by extending
company health checkups to nearby
residents, and through activities
including donations of stationery to
nearby elementary schools, blood
drives, cleanups around the plant,
tree-planting, and donation drives toaid public facilities.
(Picture: Making donation activity to
Buddhist priests.)

Our offices and group companies
implement exchanges with and offer
assistance to various educational
institutions. Zeon offers internships
for high school, vocational highschool, and university students andactively give tours of our plants toschool children. We also dispatch
part-time lecturers to schools. In
FY2014, we took in 35 interns.
(Picture: Acceptance of FY2014
interns and on-site practical training
at the Optes Hokuriku Plant.)

Relationship with Society (Clean-up activities)
With the goal of implementing
activities that are helpful and which
will make local residents happy, ouroffices and group companies areembarking on clean-up activities inlocal communities, not only in areas
around our offices and plants.
(Picture: Zeon Group employees
participating in a joint cleanup in thearea around Tokyo Station.)

Promotion of Cultural Activities
Tohpe Corporation establishedthe Tohpe Dip Art Association
to develop cultural businesses
incorporating paint and is promoting
American flowers (handcraftedflowers made with paint). The
association was founded in 1973.
There are around 1,000 members
nationwide. Exhibitions are held in
various areas nationwide every year.
(Picture: In June 2015, an exhibition
was held at the Ikebukuro Sunshine
City Cultural Center.)

ZEON GROUPCORPORATE REPORT 2015

28

Strengths Supporting our Businesses

CSR Implementation Plan
The following includes various initiatives in the Enterprise Blueprint for 2020 for each category and other specific initiatives we implemented.
Category

Corporate
governanceSpecific Efforts (FY2014 goals are shown in blue)

Enterprise Blueprint for 2020
●Mid-Term Management Plan goals have been achieved, and dividend distribution is stable andcontinuous●Implement stable distribution of dividends FY2014 forecast of 14.00 yen●A world-class risk management system has been built, is being operated throughout the Zeon
Group, and has gained the trust of society●Implement risk management activities in accordance with ISO 31000●A business continuity management system is being deployed throughout the Group (various types of●Formulate business continuity plans (BCPs) and switch to business continuity management (BCM) systembusiness continuity plans (BCPs) have been formed and are revised regularly through training, etc.)

Compliance●Compliance awareness is widespread and allows Zeon to respond to environmental changes●Revise company rules regularly (in accordance with the revision of laws and regulations)●Hold workshops on legal and regulatory compliance●Simultaneously inspect legal compliance●Consolidate and establish clear and concrete company rules among overseas group companies●Support the establishment of compliance system at overseas group companies●Information is disclosed quickly and appropriately (including negative information regarding
business conditions, CSR, risks, etc.)●Hold financial results briefing●Publish various reports●Disseminate information via the company website●Hold briefings for individual investors and analysts in Japan and overseas and respond to media inquiries●Information on trade secrets is managed appropriately●Appropriately enforce company rules (information management regulations, personal information
protection management rules, etc.)●Provide e-learning courses●Construct and operate information management systems

Information●Eradicate security irregularities
Implement plant safety evaluation (100%)
Implement specialized RC audit (more than once per year for all four plants)
Training to boost accident prevention awareness (implement at four plants and one groupcompany)●All worksites continue to have zero incidents and zero accidents, and are trusted by society

Environment,
safety,and quality●Eradicate security irregularities

Zero security irregularities●Achieve eradication of industrial accidentsZ ero occupational accidents resulting in lost workdays
and serious accidents without lost workdays●Promote logistics safety

Zero logistics accidents●Eradicate environmental irregularities

Zero environmental irregularities●Reduce environmental impact (promote voluntary control plans for air pollution and toxic substances)
Acrylonitrile emissions in FY2013 of 11.7 tons ⇒ reduce to 10 tons
●All worksites have reduced their environmental impact which has gained social appraisal*The numbers to the right are the goals and results for the four domestic plants, unless otherwise specified●Reduce environmental impact (promote zero emission plan for industrial waste)
Target amount lower than FY2013 actual of 6.5 tons
●Reduce environmental impact (promote zero emission plan for industrial waste)
Final disposal of domestic group company industrial waste for landfill under 7.5 tons
(Final landfill disposal rate: FY2007 emissions standard) 0.3%
●Reduce environmental impact (fortify companywide energy-saving project)
Reduce unit energy consumption to 66% from 67.8% versus the level in FY1990
Reduce unit CO2 emissions to under 67.8% versus FY1990 (below actual for FY2013)●Levels of both quality and cost are the best in the world●Implement a quality management system based on ISO 9001
●Management of quality assurance risks (product liability lawsuits, supply obligation risk, product recall
risk, and the risk of credibility loss due to rumor)●Improving processes (reducing losses and improving consistency)●Procurement is being promoted that includes considerations to reduce environmental impact based●Determine and understand the state of CSR procurement guidelines, share with business partners
on CSR procurement policy●Promote work-life balance (harmony between work and life) to enable people to work and raisechildren or care of sick parents●Appropriately operate a system to promote child-rearing●Implement program for reinstatement in workplace for employees taking child-rearing or nursing care leave●Introduce flexible work hours, employ discretionary working system for management-related work
●Appropriately enforce sexual harassment prevention regulations

Human rights●Appropriately operate human resource systems (individual report and evaluation systems, etc.)
and●Hire non-Japanese employees (mid-career applicants and students studying in Japan)
labor practices ●The workplace has been revitalized by the promotion of diversity and the fair and equitable treatment ●Expand rehiring program of retired employeesof personnel

Socialcontribution

29●Support development of employee skills and career●Implement MD Committee* activities by female members (*committee comprised solely of female
employees, promote cost cuts)●Raise employee social contribution awareness (includes CSR training)●An organization has been established to promote volunteer activities for employees including retirees●Upgrade and enhance CSR promotion systemthat allows employees to actively volunteer in various ways
●Introduce volunteer activities and promote and support participation●There is understanding and appraisal for Zeon’s social contributions (Zeon actively participates in●Materialize and implement CSR activities being promoted by the entire Zeon Groupand supports environmental protection and social welfare programs being promoted in each country ●Materialize and implement CSR activities being promoted by all worksites
and region)●Implement CSR activities unique to individual worksites

ZEON GROUPCORPORATE REPORT 2015

In FY2014, in the categories of management and human rights and labor practices, we achieved our goals but in the category of environment and safety there
are still issues that require further attention. In FY2015, we continue to work as a unified group to implement these initiatives.
Evaluation: ★★★Target reached ★★Target almost reached ★Improvement needed
FY2014 Results

Evaluation

FY2015 Goals●Annual dividend 14.00 yen★★★ ●Annual dividend 15.00 yen (forecast)●Improved risk management activities in accordance with ISO 31000 (reviewed FY2014 risk list to reflect confirmation and feedback on progress in risk
response plan)★★★

●Promoted the establishment and creation of business continuity plans (BCP)●Continued to implement training based on the Earthquake Disaster Response Manual★★★ ●Instill and make BCM structure a permanent feature●Fully educated domestic group employees on Japan’s Subcontract Act, Antitrust Law, and trade secret management●Held workshops on legal and regulatory compliance at each office in Japan and abroad●Simultaneously inspected legal compliance: Implementation 100%●Gathered suggestions for a CSR and compliance motto●Published a Chinese language CSR text
●Supported establishment and maintenance of compliance systems at Asia group companies★★★

●Financial results briefing: Held quarterly●Published annual, semiannual, corporate, and other reports●Disseminated appropriate information via the company website●Launched Chinese-language version of website●Participated in company briefing for individual investors●Participated in investment conference for overseas investors●Financial results briefing●Publish various reports★★★ ●Disseminate information via the company website●Hold briefings for individual investors and analysts in Japan andoverseas and respond to media inquiries

Chinese-language version CSR text

●Improve risk management activities in accordance with ISO 31000(Review list of risks in FY2015 which reflects the horizontal
deployment of pronounced risks at other departments)●Revise company rules regularly (in response to revisions to laws,
etc.)●Hold workshops on legal and regulatory compliance●Simultaneous inspection of legal compliance●Information security training (e-learning): Enrollment rate 99.9%●Information security audit (information security voluntary diagnosis): Response rate 99.7%●Revised affiliate regulations in line with completion of information management system●Completed information security structure and system at overseas group companies★★★

●Implemented plant safety evaluation (100%)●Implemented specialized RC audit (more than once per year for all four plants)●Provided training to boost accident prevention awareness (implemented at four plants and one group company)●Implement plant safety evaluation (100%)●Implement specialized RC audit (more than once per year for all
four plants)★★★
●Training to boost accident prevention awareness (implement at four
plants and one group company)

Education on examples ofaccidents (Tokuyama Plant)●Appropriately enforce company rules (information management
regulations, personal information protection management rules,
etc.)●Provide e-learning courses●Two security irregularities★☆☆ ●Zero security irregularities●One occupational accident that results in lost workdays★☆☆

●Zero logistics accidents★★★ ●Zero logistics accidents●Zero environmental irregularities★★★ ●Zero environmental irregularities●Acrylonitrile emissions totaled 11.9 tons★★☆ ●Acrylonitrile emissions under 12 tons

●Final landfill disposal was 6.5 tons★★★ ●Lower than the 6.5 tons which was the actual for FY2014●Final landfill disposal for domestic group companies: 10.6 tons★☆☆

●Final landfill disposal for domestic group companies of less than
7.5 tons(Final landfill disposal rate: FY2007 emissions standard) 0.3%

●Unit energy consumption 63.0% versus level in FY1990●Unit CO2 emissions 65.3% versus level in FY1990★★★

●Unit energy consumption 63.0% versus level in FY1990●Unit CO2 emissions 65.3% or lower versus level in FY1990●Underwent ISO 9001 renewal screening and retained certification●Implemented various initiatives to enhance product safety and quality(Details are on our website: Home > CSR > Quality Assurance (Relationship with Customers))★★★

●Using quality assurance risk management as a foundation, aim tobuild a quality assurance structure that satisfies all stakeholders,
including customers, the public, and employees, through the supplyof products★★☆

●Share information on CSR procurement with business partners(through discussions, etc.)

Kurumin mark

●CSR Procurement Guidelines and the Requests for Suppliers, were disclosed on the website●Zero occupational accidents resulting in lost workdays and serious
accidents without lost workdays●Achieved goals set in action plan for employers regarding countermeasures to support the development of the next generation (established in FY2010)and satisfied certain requirements. Accordingly, received the Kurumin accreditation mark from the Ministry of Health, Labour and Welfare as a company
that supports child-rearing(Details are on our website: Home > CSR > Relationship with Employees > Creating Workplace Environments that Protect Human Rights and Health)★★★ (Handled as a daily management activity)●Ratio of employees with disabilities (parent) 2.04% (FY2013 2.18%)
11 out of 11 retirees●Rehiring of retired employees(Details are on our website: Home > CSR > Relationship with Employees > Employment and Diversity)★★★ (Handled as a daily management activity)●CSR briefings held at each office and domestic group companies●Supported establishment of CSR Promotion Structure for companies that were newly incorporated into the Zeon Group●Number of employees that participated in restoration volunteer tours 13 times and 89 employees★★☆

●Hold CSR briefings●Continue to support restoration volunteer work

●Created a system for sponsoring social contribution●Implemented CSR core projects in each region★★☆

●Operate social contribution sponsor system●Continue to hold CSR core projects

Restoration volunteer tour (a fish
farming-supporting system: making
fishing gears for hanging apparatus)

ZEON GROUPCORPORATE REPORT 2015

30

Strengths Supporting our Businesses

Corporate GovernanceZeon aims to increase profits and achieve ongoing corporate value enhancement while respecting and balancing the various interests of its shareholders andother diverse stakeholders. To this end, we are making ongoing efforts to establish a system that enables efficient and sound corporate management throughcorporate governance.
Putting into place a corporate governance system allows us to clarify the functions and roles of each organizational entity within the company and to carry out
quick decision-making and execution. We are also improving business transparency through appropriate monitoring and disclosure of activities and their effects.
We are determined to further enhance our corporate governance system in order to carry out these functions effectively.
■Corporate Governance System■Board of Directors

General Meeting of Shareholders(Appointment / Dismissal)

Decisions / Supervision(Appointment / Dismissal)

Board of Directors

Auditing

Corporate Auditors

Decisions / Supervision(Selection / Dismissal)

Auditing(Dismissal)
Collaboration(Appointment / Dismissal)

Independent Auditor
Financial
Auditing

Auditing
Personnel

Business Execution andInternal Controls System

Collaboration

Representative Director
Executive
Committee
Internal
Auditing

Collaboration(Assistance)■Executive Committee

Information

CSR Conference
CSR Basic
PolicyCommittee

Information(External)

Risk Management Committee
External
LawyerEnvironmental and Safety Committee

Public Relations Committee
Operating division, indirect departments, research laboratories, plants
Control / monitoring

The Executive Committee, in accordance with Executive
Committee regulations, comprises the President andexecutive officers ranked senior corporate officer or aboveand meets, in principle, twice a month to examine andmake decisions on important business matters after due
deliberation involving consultation with attending full-time
corporate auditors. Important agenda items, as stipulated
in regulations for the Board of Directors, are examined anddecided by the Board of Directors.

■Board of Corporate Auditors
Information (External)

Quality Assurance Committee

Information (Internal)

Internal auditing

Compliance Committee

PL Committee

The Board of Directors meets, in principle, every monthwith corporate auditors in attendance to ensure compliancewith applicable laws and the articles of incorporation in theexecution of business. The role of the Board of Directors
besides statutory duties is to make important decisions
about basic management policy and strategy and otheraspects of business execution. As of October 2015, theBoard of Directors consists of 12 directors, including threeoutside directors.

The Board of Corporate Auditors comprises five members,
including three outside corporate auditors. The board
reports, discusses and resolves important matters. In
accordance with auditing guidelines established by the
Board of Corporate Auditors, each corporate auditor audits
the duties executed by directors through various means,such as attendance at Board of Directors meetings andmonitoring of business operations, including subsidiaries'
operations.

Information(Internal)

Subsidiaries and affiliates

Risk Management
The Risk Management Committee and the Compliance Committee, along with the Compliance
Committee’s subcommittees–the Antitrust Law Regulatory Subcommittee, the Export Security Control
Subcommittee, the Corporate Governance Subcommittee, and the Information Security Subcommittee–
are advancing Zeon’s risk management and compliance efforts.

■Risk Management and Compliance
SystemCSR Conference
Compliance
Committee

Risk Management
Committee

Prevention of law violations

Prevention and control of
Risks;
Dealing with crises

Education and training incompliance with laws

Antitrust Law Regulatory Subcommittee
Export Security Control Subcommittee
Corporate Governance Subcommittee

31

ZEON GROUPCORPORATE REPORT 2015

Information Security SubcommitteeDirectors and Officers (as of October 1, 2015)
Directors

ChairmanNaozumi Furukawa

President

Kimiaki Tanaka

Chairman of Tohpe Corporation

Director & Executive Corporate Officer

Director & Senior Corporate Officer

Specialty Materials Businesses

Division Manager - CSR

Director & Corporate Officer

Masayoshi Oshima

Hiroshi Takegami

Director & Senior Corporate Officer

Director & Senior Corporate Officer

Director & Senior Corporate Officer

Research & Development

Elastomers and Chemicals Business
Division Manager - Synthetic Rubber

Division Manager - Production Center

Director & Corporate Officer

Outside director

Outside director

Outside director

Advisor - FUJI ELECTRIC CO., LTD

Chairman of Board - Sanda Gakuen JuniorHigh School & High School

Chairman and CEO and Representative Directorof The Yokohama Rubber Co., Ltd.

Yoshiyuki Mitsuhira

Takeo Furuya

Division Manager - Corporate Administration
General Manager - Accounting & FinancePresident of Zeon F&B Co., Ltd.

Hiroyuki Hirakawa

Toru Nishijima

Takao Kitabata

Haruo Itoh

Kei Itoh

Administration
Division Manager - Corporate Planning

Tadanobu Nagumo

Corporate Auditors

Corporate Executive Officer

Audit & Supervisory Board Member

Senior Corporate Officer

Corporate Officer

Division Manager - Synthetic Latex

Audit & Supervisory Board Member

Division Manager - Raw Material & Logistics
General Manager - Raw Material Procurement
General Manager - Logistics & Transportation

Tadayuki Minami
Jun Hasegawa

Audit & Supervisory Board Member (External)

Yuzuru Fujita

Supreme advisor of Asahi Mutual Life Insurance Company

Audit & Supervisory Board Member (External)

Akio Kohri

President - ADEKA CORPORATION

Audit & Supervisory Board Member (External)

Nobutake Nishijima

Vice Chairman - Total Insurance Service Limited

Hirofumi Imai

Corporate Officer

Hiroshi Fujisawa
Division Manager - Specialty Chemicals

Corporate Officer

Noboru Yanagida
President - Zeon Medical Inc.

Corporate Officer

Toshiaki SayaToshihiro Inoue
Corporate Officer

Tomoyuki Kose
Plant Manager - Mizushima Plant

Corporate Officer

Sachio Hayashi
Plant Manager - Kawasaki Plant

Corporate Officer

Tetsuya Toyoshima
Division Manager - Specialty Plastics & Components

Plant Manager - Tokuyama Plant

ZEON GROUPCORPORATE REPORT 201532

Data Highlights

Herein, we disclose a portion of our earnings data.
For more details on our financial data, please see Fact Book 2015 in the IR sectionof our website: http://www.zeon.co.jp/ir_e/library/factbook.html
Graphs illustrating our consolidated net sales, operating income, and net sales byregion can be found on pages 3-4.
A graph outlining our R&D expenses is on page 15.

Five-year summarized financial data
(million yen)

2010

2011

2012

2013

2014

Net sales

270,383

262,842

250,763296,427

307,524

Operating income

35,29532,123

23,69629,901

28,245

Ordinary income

33,62331,48725,21232,56131,098Net income

18,303

19,127

14,75019,65019,080Total assets

290,596

311,925

350,508

370,872

399,512

Net assets

118,767

135,480

162,057

181,414215,631

Capital expenditures

10,32922,99523,48927,111

28,516

Depreciation & amortization

21,12519,885

18,122

17,06819,439R&D expenses

9,532

11,106

11,895

12,661

13,627

Environmental and Safety Investment*

470

2,670

2,160

3,470

3,649

Social Contribution Investment*

34

101

70

98

98

Operating margin

13.1%

12.2%

9.4%

10.1%

9.2%

Return on Equity (ROE)

16.7%

15.5%

10.1%

11.7%

9.8%

Equity ratio

39.5%

42.5%

45.2%

47.9%

52.9%

BPS

497.05572.96685.64783.11

931.34

Interest-bearing debt

70,86367,58567,58565,60058,900Cash flows

8,695(1,595)(1,803)(5,222)(4,780)Net cash provided by (used in) operating activities

48,10032,00933,061

36,39634,006

Net cash provided by (used in) investing activities(9,635)(27,644)(24,858)(31,513)(26,767)

Net cash provided by (used in) financing activities(29,770)(5,960)(10,006)(10,105)(12,019)

Dividend per share (yen)

10.0

11.0

12.0

13.0

14.0

Employees (people)

2,836

2,857

3,163

3,186

3,216

Lost-time accident rates

0.00

0.47

0.46

0.46

0.46

Energy usage (crude oil equivalent, 1,000 kL)

263

256

237

243

226

CO2 emissions (1,000 tons)

695

670

601

640

631

*Zeon Corporation only

33

ZEON GROUPCORPORATE REPORT 2015

Stock information
Zeon’s shares are listed on the 1st section of the Tokyo Stock Exchange. The company has a total number of common shares outstanding of 242,075,000. As
of March 31, 2015, there were 9,807 shareholders (decrease of 1,898 registered shareholders at the end of the previous fiscal year). In accordance with our basic
policy to consistently and stably distribute surplus earnings to our shareholders, in FY2014 we paid out a per-share annual dividend of 14 yen, an increase of one
yen higher than the previous fiscal year.
■ Shareholder information (as of March 31, 2015)■ Dividends

Treasury stock

(yen)
15

15,286,000 shares(6.3%)

Financial institutions &securities companies
97,988,000 shares(40.5%)

Individuals & others
24,409,000 shares(10.1%)
Foreign investors
46,621,000 shares(19.3%)

12
11

10

10

14

13

5

Other domestic
institutional investors
57,769,000 shares(23.9%)

0

2010

2011

2012

2014 (FY)2013■ Share price trends (last day of March)■ Market capitalization trends (last day of March)

(yen)
1,500

(100 million yen)
3,000

2,687

1,110

2,358
2,000

1,000

974

767

767

1,857

1,857

2010

2011

2,261

934

500

1,000

0

2010

2011

2012

2014 (FY)

2013

0

2012

2014 (FY)2013

Environmental information
Each year, we set goals and work to alleviate our burden on the environment. We are moving forward with large-scale investment for a clean fuel conversion
program to switch from heavy oils to LNG at our plants to reduce our greenhouse gas emissions and to conserve energy consumption. In FY2009, we achieved thegoals for the energy consumption unit, which is a yardstick for energy conservation, set by the Japan Chemical Industry Association (JCIA) (80% of levels in FY1990
by sometime between FY2008-FY2012). Since then, we have set our own independent goals and have been making an average improvement of 1% annually.
■ Energy usage per net sales■ CO2 emissions(crude oil equivalent, kL / million yen)
1.00

(1,000 tons)
900

0.97

0.97

0.95

0.95

1.00

800
700

0.90

695

0.90

600

0.85

0.82

670

601

640

631

0.85

500

0.80

0.80

400

0.73

0.75

0.95

0.70

300

0.75

200

0.70

100
0

2010

2011

2012

2013

2014 (FY)

0

2010

2011

2012

2013

ZEON GROUPCORPORATE REPORT 20152014 (FY)34

Major Sales & Production Bases

Zeon is continuing with the globalization of its business operations, having first turned its attention to overseas markets in the 1970s.
We are setting up sales networks in major markets around the world and establishing a production system for rubber and resin products. In addition, we have R&D
facilities in the US and Europe. We are also building an R&D and sales base in China, a market which is growing rapidly. We are aiming to become a company that,through its local production systems, builds close ties with local communities and contributes to the global society.

Global bases (as of April 1, 2015)
Europe■Zeon Chemicals Europe Ltd.

■

Zeon Europe GmbH■■

Zeon Europe GmbH - Branch in France■

Zeon Europe GmbH - Branch in Spain■

Zeon Europe GmbH - Branch in Italy
Zeon Chemicals Europe Ltd.
U.K. Plant
Business focus Manufacture and sale of synthetic
rubbers

Telene S.A.S.

Zeon Europe GmbHBusiness focus Sale, export, and import of synthetic
rubbers and resins

Zeon Polymix (Guangzhou) Co., Ltd.
Business focus Manufacture and sale of rubbercompounds (CM)Asia and Oceania

Zeon Kasei (Changshu) Co., Ltd.
Business focus Manufacture and sale of PVC powder
slush compound

Zeon Advanced Polymix Co., Ltd.
Business focus Manufacture and sale of rubbercompounds (CM)35

ZEON GROUPCORPORATE REPORT 2015

Zeon Chemicals (Thailand) Co., Ltd.
Business focus Manufacture and sale of petroleum
resinsZeon Manufacturing Vietnam Co., Ltd.
Business focus Manufacture and sale of packing
containers■

Zeon (Shanghai) Co., Ltd.

■

Zeon Trading (Shanghai) Co., Ltd.

■

Shanghai Zeon Co., Ltd.

■

Zeon Polymix (Guangzhou) Co., Ltd.

■

Takehara Zeon (Shanghai) Co., Ltd.

■

Suzhou Rui Hong Electronic Chemicals Co., Ltd.

■

Zeon Kasei (Changshu) Co., Ltd.

■

Zeon Korea Co., Ltd.

■

Zeon Shinhwa Inc.

■

Zeon CSC Corporation■

Zeon Asia Pte Ltd.

■

Zeon Asia Malaysia Sdn. Bhd.

■

Zeon Chemicals Singapore Pte. Ltd■

Zeon Chemicals (Thailand) Co., Ltd.

■

Zeon Advanced Polymix Co., Ltd.

■

Zeon Manufacturing Vietnam Co., Ltd.

■Production Site

●Sales Office

Japan (as of April 1, 2015)■

Zeon Chemicals L.P.
Kentucky Plant
Business focus Manufacture and sale of synthetic
rubbers

Zeon Corporation■

Head Office■Tokuyama Plant■

R&D Center■

Mizushima Plant■

Takaoka Plant■

Osaka Office■

Kawasaki Plant■

Nagoya Office■Zeon Kasei Co., Ltd.

■Tokyo Zairyo Co., Ltd■

Zeon North Co., Ltd.

■

Zeon Yamaguchi Co., Ltd.

■

Zeon F&B Co., Ltd.

■

Zeon Medical Inc.

■

Zeon Polymix Inc.

■RIMTEC Corporation■

Tohpe Corporation■

Zeon Chemicals Yonezawa Co., Ltd.

■

Ibaraki Zeon Kasei Co., Ltd.

■

Okayama Butadiene Co., Ltd.

■ZIS Information Technology Co., Ltd.

Zeon Chemicals L.P.
R&D Center
Business focus Research and development of synthetic
rubbers■Takaoka Plant■
Tokuyama
Plant■
Mizushima
Plant

●
Osaka
Office●Nagoya Office●Head Office●R&D Center■Kawasaki Plant

Head OfficeZeon Chemicals L.P.
Texas Plant
Business focus Manufacture and sale of synthetic
rubbers

The Americas■■

Mizushima Plant

Takaoka Plant

Tokuyama Plant

Kawasaki Plant/R&D Center

Zeon Chemicals L.P.
■

Zeon Chemicals L.P. West Coast Office■Zeon Chemicals L.P. R&D Center■

Zeon Chemicals L.P. Kentucky Plant■

Zeon Chemicals L.P. Mississippi Plant■

Zeon Chemicals L.P. Texas Plant

Zeon do Brasil Ltda

ZEON GROUPCORPORATE REPORT 201536

Group Company Data

Zeon Corporation
Head Office
Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo 100-8246, Japan
Tel: +81-3-3216-1772 Fax: +81-3-3216-0501
R&D Center
1-2-1 Yako, Kawasaki-ku, Kawasaki, Kanagawa 210-9507, Japan
Tel: +81-44-276-3721 Fax: +81-44-276-3720
Takaoka Plant
630 Ogino, Takaoka-shi, Toyama 933-8516, Japan
Tel: +81-766-21-0252 (Direct) Fax: +81-766-21-8201
Kawasaki Plant
1-2-1 Yako, Kawasaki-ku, Kawasaki, Kanagawa 210-9507, Japan
Tel: +81-44-276-3700 (Direct) Fax: +81-44-276-3701
Tokuyama Plant
2-1 Nachi-cho, Shunan-shi, Yamaguchi 745-0023, Japan
Tel: +81-834-21-8501 (Direct) Fax: +81-834-21-8793
Mizushima Plant
2767-1 Kojima Shionasu Aza Niihama, Kurashiki-shi, Okayama 711-8511, Japan
Tel: +81-86-475-0021 Fax: +81-86-475-1169
Osaka Office
Yotsubashi Park Building 3rd Floor, 1-4-10 Itachibori, Nishi-ku, Osaka 550-0012, Japan
Tel: +81-6-6536-2930 Fax: +81-6-6536-2932
Nagoya Office
TAK Building, 3-134 Hongo, Meito-ku, Nagoya 465-0024, Japan
Tel: +81-52-769-5861 Fax: +81-52-769-5863

Zeon Group (Consolidated subsidiary)Japan
Zeon Kasei Co., Ltd. ●▲■Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan
Business focus Manufacture and sale of packing materials, packing containersand distribution equipment
Tokyo Zairyo Co., Ltd ●▲■Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan
Business focus Trading
Zeon North Co., Ltd. ■351 Ejiri, Takaoka-shi, Toyama 939-0062, Japan
Business focus Contracting, design, construction and management for various facilities;
sale of industrial materials and equipment; purchase and sale of petrochemical products;
validating environmental measurement, measuring working environment; conducting
various analyses
Zeon Yamaguchi Co., Ltd. ■2-1 Nachi-cho, Shunan-shi, Yamaguchi 745-0023, Japan
Business focus Purchase and sale of civil engineering materials, packing materials, andvarious facilities; design and construction, contracting for various plants; environment
analysisZeon F&B Co., Ltd. ■Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan
Business focus Agency business for nonlife insurance; loan and allocating businessto each group company
Zeon Medical Inc. ▲Shuwa Shiba Park Building, 2-4-1 Shiba Kohen, Minato-ku, Tokyo 105-0011, Japan
Business focus Manufacture and sale of medical equipment
Zeon Polymix Inc. ●1-11-1 Ishizue, Ohtsu-shi, Shiga 520-2272, Japan
Business focus Manufacture of rubber compounds (CM)RIMTEC Corporation ■Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan
Business focus Sales of RIM combination liquid and molded items
Tohpe Corporation ●■1-5-11 Chikkoshinmachi, Nishi-ku, Sakai-shi, Osaka 592-8331, Japan
Business focus Sales of paints and specialty materials

37

ZEON GROUPCORPORATE REPORT 2015

●Elastomer Materials Business▲Specialty Materials Business■Other Business

Zeon Group (Non-consolidated subsidiary)

The Americas

Japan

Zeon Chemicals L.P. ●▲4111 Bells Lane, Louisville, Kentucky 40211, U.S.A.
Business focus Manufacture and sale of synthetic rubbers

Zeon Chemicals Yonezawa Co., Ltd. ▲■3-446-13 Hachimanpara, Yonezawa-shi, Yamagata 992-1128, Japan
Business focus Manufacture, processing and sale of aromatic chemicals, the middle objectsof medicine and agricultural chemicals, and RIM combination liquid

Zeon do Brasil Ltda ●Rua Arandu, 57/cj 23, Sao Paulo-SP, Brasil
Business focus Sale of synthetic rubbers and resins

EuropeZeon Chemicals Europe Ltd. ●Sully,Vale of Glamorgan, CF64 5ZE, United Kingdom
Business focus Manufacture and sale of synthetic rubbers
Zeon Europe GmbH ●▲Hansaallee 249, 40549 Düsseldorf, Germany
Business focus Sale, export, and import of synthetic rubbers and resins

Ibaraki Zeon Kasei Co., Ltd. ●▲■1175 Kamiizushima, bando-shi, Ibaraki 306-0654, Japan
Business focus Manufacture of processed plastic products (PVC compounds), powderedrubbers and molding products with resin sheet
Okayama Butadiene Co., Ltd. ■3-1-11 Nihonbashi Honcho, Chuo-ku, Tokyo 103-0023, Japan
Business focus Manufacture and sale of butadiene monomer
ZIS Information Technology Co., Ltd. ■Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan
Business focus Consulting about data processing systems; sales and maintenanceof computer and office automation equipment

Telene S.A.S. ■2, rue Marie Curie - 59910 Bondues, France
Business focus Development and distribution of Telene® DCP-RIM resin

Optes Inc. ▲422-1, Futagamishin, Takaoka-shi, Toyama 933-0073, Japan
Business focus Manufacture of optical film and optical parts; design and manufacture ofmetallic molding

Asia and Oceania

Asia and Oceania

Zeon Trading (Shanghai) Co., Ltd. ●▲■Room 1501, Hongwell International Plaza, No.1600 Zhongshan West Road, Xuhui District,
Shanghai, 200235, China
Business focus Sale, export, and import of synthetic rubbers and chemicals
and related products

Zeon (Shanghai) Co., Ltd. ■Room 1502, Hongwell International Plaza, No.1600 Zhongshan West Road, Xuhui District,
Shanghai, 200235, China
Business focus Provide assistance to and exercise control over the Zeon Corporation Group
companies in China with regard to such functions as accounting, finance, personnel
management, legal, etc.

Shanghai Zeon Co., Ltd. ●No. 380, Shennan Road, Zinzhuang Industry District, Minhang, Shanghai, 201108,
China
Business focus Manufacture and sale of rubber compounds (CM)
Zeon Polymix (Guangzhou) Co., Ltd. ●Jing Quan 1st Road, Yong He Economic Zone, Guangzhou, 511356, China
Business focus Manufacture and sale of rubber compounds (CM)
Zeon Shinhwa Inc. ▲■504 Diplomatic Center B/D, Nambusoonhwanro 2558, Seocho-Gu, Seoul, 06750, Korea
Business focus Sale of electronic materials
Zeon Asia Pte Ltd. ●▲331 North Bridge Road, #20-01/02, Odeon Towers, Singapore 188720
Business focus Sale, export, and import of synthetic rubbers, synthetic latex
and petroleum resins
Zeon Chemicals Singapore Pte. Ltd ●331 N Bridge Rd, Singapore 188720
Business focus Manufacture of synthetic rubbers
Zeon Chemicals (Thailand) Co., Ltd. ●3 Soi G-14, Pakorn-Songkhrorad Road, Tambol Huaypong, Amphur Muangrayong, Rayong
21150, Thailand
Business focus Manufacture and sale of petroleum resins

Takehara Zeon (Shanghai) Co., Ltd. ●No. 380, Shennan Road, Zinzhuang Industry District, Minhang, Shanghai, 201108, China
Business focus Manufacture and sale of silicon rubber compounds (CM)Suzhou Rui Hong Electronic Chemicals Co., Ltd. ▲No. 501, Minfeng Road, Economic Development Zone, Wuzhong District, Suzuhou City,
Jiangsu, 215124, China
Business focus Manufacture and sale of photoresist
Zeon Korea Co., Ltd. ●▲No. 403, 4Fl., 36, Teheran-ro 87-gil, Gangnam-gu, Seoul, 06164, Korea （(City Air Tower,
Samseong-dong)
Business focus Sales and import of optical materials, electronic materials, synthetic resins,
synthetic rubbers
Zeon CSC Corporation ▲3rd Fl. 266, Sec. 1, Wen Hwa 2 Road, Linkou Dist., New Taipei City 24448, Taiwan, R.O.C.
Business focus Sale of optical materials
Zeon Asia Malaysia Sdn. Bhd. ●Unit 208, Block B, Phileo Damansara II, No. 15, Jalan16/11, Off Jalan Damansara, 46350
Petaling Jaya, Selangor, Malaysia
Business focus Sales of synthetic latexes
Zeon Advanced Polymix Co., Ltd. ●591 UBCII BLDG, Office No. 2206, 22thFL, Sukhumvit 33rd, Klongton Nua, Wattana,
Bangkok 10110 Thailand
Business focus Manufacture and sale of rubber compounds (CM)
Zeon Manufacturing Vietnam Co., Ltd.
Land Lot No: IN1-6A and IN1-6B, VSIP Haiphong Township, Industrial and Service Park,
Dinh Vu-Cat Hai Economic Zone, Thuy Nguyen District, Haiphong city, Vietnam
Business focus Manufacture and sale of packing containers

ZEON GROUPCORPORATE REPORT 201538

Zeon Group History

1960

1970

1980

1990

Overview of our main businesses and product development
Processed
Products
Polyvinyl chloride resins

Powder Slush Compounds

MedicalSupplementary artificial heartLatex(paper manufacturing)

C4

VP Latex(footwear)

Specialty synthetic rubber(NBR & ACM for automotive parts)

Hydrogenated nitrile rubber (Zetpol®)Toner

Commodity synthetic rubber(SBR & BR for tires)

Hollow latex(paper manufacturing)

Polymerized toner

C5

Commodity synthetic rubberwith modified terminals

C5 petroleum resin(roadmarking paints)

Chemicals

Isoprene rubber (IR)(tires)Specialty
Chemicals

Thermoplastic elastomer SIS(adhesives)

Synthetic aroma chemicals(leaf chemicals)C5 fluorine(electronic materials)

Electronic
Materials

Specialty
Plastics

Cyclo olefin polymers(lenses, prisms)

Dicyclopentadiene

RIM
GPB process: Proprietary Zeon technology used to extract highly
pure butadiene from C4 fraction.

GPI process: P roprietary Zeon technology used to extract isoprene
and other highly pure effective substances from C5
fraction.

Launched PVC and synthetic rubber production
Zeon Corporation was founded as a PVC manufacturer in 1950, establishedthrough capital from three Furukawa group companies– Furukawa ElectricCo., Ltd., Yokohama Rubber Co., Ltd., and Nippon Light Metal Co., Ltd. The
company acquired its PVC manufacturing technologies from BF Goodrich
Chemicals Co. in the United States, which at the time was the global leader in
the industry. The PVC business was the company’s original business pursuit
until its withdrawal from the business in 2000.
Furthermore, in 1959, Zeon acquired technologies from BF Goodrich
Chemicals to start up a special synthetic rubber (NBR) plant. This was Japan’s
first domestic synthetic rubber plant. Following this, the company embarked
on the production of styrene-butadiene rubber (SBR). Zeon thus established its
synthetic rubber business, which produces synthetic rubber for tires and engine
components, and which it continues to manufacture today.

39

ZEON GROUPCORPORATE REPORT 2015

RIM molded items
and combination liquid(large-scale plastic products)

Developed proprietary GPB process and GPI process
technologies that lead the world
In the petrochemical industry, which also uses crude oil as a raw material,
technological capabilities are a key element impacting the competitive strengthof a company. Zeon, aiming to secure butadiene, which is the raw material
used for producing PVC and synthetic rubber, developed the GPB process in1965 to efficiently extract high-grade butadiene from C4 fraction. Moreover, in
1971, the company developed the GPI process, to efficiently extract isoprene,
the raw material for isoprene rubber (IR), and other useful components, fromC5 fraction.
These are proprietary Zeon technologies. The company is licensing its
GPB process technologies to countries around the world. This contributes
substantially to the company’s competitive edge and promotes the Zeon namearound the world.

2000

2010

Enhanced low temperature PVC Powder Slush Compound(used as an automobile instrument panel material)

Termination of PVC production
and divestment
Balloon catheter (IABP)

Energymaterials

Four core catheter products

Stents (bile duct sheath)

NBR latex(rubber gloves)*LIB:
lithium-ion batteries

Water-based binder
for mobile LIB anode

Solvent-based binder
for mobile LIB cathode

Binder for the mobile
LIB functional layer

Binder for a car LIB anode
Water-based binder for anodeand functional layer
in large-capacity smartphone battery

Water-based binder
for battery cathodeHeat-resistant hydrogenated nitrile rubber (Zetpol®)Polymerized color toner

Low-temperature fixing toner(high-speed printers)

Solution-polymerized SBR(fuel-efficient tires)Light color petroleum resin(disposable diaper adhesives)

Asymmetric SIS(disposable diaper film)

Cyclopentyl methyl ether (CPME)(eco-friendly solvent)ResistInsulation materials

Cyclo olefin polymers(commodity use)

LCD resist for large substrate sizes

Cyclo olefin polymers(blue laser)

Optical films
Films made using
the melt extrusion process

Retardation film made using
the successive stretching process

Developing comprehensive uses for C5 fraction
Isoprene rubber is a useful material which has the same chemical stability
as natural rubber. In the process of extracting feedstock isoprene from C5
fractions, many byproducts are derived, however, the GPI process also hasadvanced functionality for the separation of these byproducts at a high degreeof purity. Zeon has focused on the effective use of these various substances.
The process was developed and applied to the production of petroleum resins
and thermoplastic elastomer SIS in the 1980s, synthetic aroma chemicals
and RIM molded items in the 1990s, and cyclo olefin polymers in and after
2000. As a result, we have grown to be a business that accounts for a large
share of the global market. Moreover, the technologies fostered during thisdevelopment process are being used in areas other than C5 fraction.

Retardation film made using
the diagonal stretching process

Film with high thermostability madeusing the diagonal stretching process(touch panels)

Rolling out higher-grade materials and establishing
top-notch manufacturing technologies
In recent years, there have been calls for sophisticated products which
realize energy efficiency in response to environmental problems, and similar
expectations are growing for chemical materials. In the synthetic chemicalbusiness, Zeon developed a hydrogenated nitrile rubber, Zetpol®. The material
achieves both low cost and high functionality and is being used in automobile
engine components and other applications with strict requirements. In
addition, cyclo olefin polymers, developed from a comprehensive use of C5
fraction, are high-performance materials used in optical films, such as for LCD
panels and lenses, and also as a material for electrical insulating.

ZEON GROUPCORPORATE REPORT 201540

Zeon, Zetpol, Nipol, Quintone, Quintac, ZEONEX andZEONOR are registered trademarks of Zeon Corporation,in the United States and other countries.
ZeonorFilm, ZEOGLOBULE and STEC are trademarks ofZeon Corporation.

Zeon Corporation
CSR Promotion Department
Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo 100-8246, Japan
Tel: +81-3-3216-0603 Fax: +81-3-3216-0604 http://www.zeon.co.jp/index_e.html

Printed on paper made with woodfrom forest thinning. “Morino ChonaiKai”(Forest Neighborhood Association)
Supporting sound forest management.