Vision for 2030
A company that lives up to societal expectations
and the aspirations of employees

Zeon Group

Corporate Report 2021

Message from the President

Contents

We are viewing the changes taking place in society
in a positive light as opportunities for Zeon which
will help to enhance our corporate value

01

Message from the President

03

Business Overview

05

History of Value Creation

07

Value Creation Flow09

Company Profile

10

Financial and Non-financial Highlights

13

The Medium-Term Business Plan/
Interview with the President

19

Zeon’s Business and Strategy
19 Elastomers Business21 Specialty Material Business23 Other Businesses

In 2020, Zeon Corporation celebrated the 70th anniversary of our company’s founding. During
this period in which society has been dramatically affected by the COVID-19 pandemic, many Zeon
employees have participated in discussions regarding where Zeon needs to be heading in the

24

2020–2021 Topics

future. Today, when the momentum for safeguarding the sustainability of society has become

25

Contributing to the Realization of the SDGs
through Our Business Activities

much greater, we are taking Zeon’s Corporate Philosophy, “contributing to the preservation of the

25 Management
27 Products and initiatives that contributetoward the realization of the SDGs
31 TCFD

Earth and the prosperity of the human race” (which is closely connected to our company name
“Zeon” itself), as our mission, and we have reconfirmed our commitment to having every individual
employee proactively contribute toward building a “Sustainable Earth” and “Safe and Comfortable
Life for People.”
FY2021 is the first year of implementation of our new Medium-Term Business Plan*1, which
embodies our determination to fulfil the mission outlined above. Our vision for 2030 is to become

33

Directors and Officers

35

Governance38

Outside Perspective“a company that lives up to societal expectations and the aspirations of employees,” and we areaiming to realize this vision through initiatives that are related to the United Nations Sustainable

Editorial policy

Development Goals (SDGs). For example, in regard to Climate Action, which is Goal 13 of the SDGs,
in August 2020 Zeon expressed its support for the recommendations made by the Task Force on
Climate-related Financial Disclosures (TCFD) *2, and began taking action accordingly. Taking society’s expectations and the major changes taking place in society as an opportunity, the Zeon
Group will be working together to consider what Zeon can do to meet society’s expectations, andas we move forward, we will be aiming to create new value.
*1

For more information about the new Medium-Term Business Plan, please see P. 13 of this report.

*2

For more information about the TCFD, please see P. 31 of this report.

Corporate Philosophy = Mission

Contributing to the preservation of
the Earth and the prosperity of the human race
In keeping with its name, derived from the Greek words “geo” (Earth) and “eon” (eternity),
Zeon will contribute to a “Sustainable Earth” and “Safe and Comfortable Life for People”
by providing original technologies, products, and services.

In compiling the Zeon Corporate Report 2021, we referenced the
Guidance for Collaborative Value Creation issued by Japan’s
Ministry of Economy, Trade and Industry (METI), and also referenced the many suggestions that we had received from customers. We have compiled the report honestly, aiming to ensure close
communication between different departments so as to collate
the approaches adopted within Zeon in a cross-organizational,
group-wide manner, with the aim of presenting our company’svalue creation in a way that is easy for readers to understand.

K i m i a k i Ta n a k aReporting period

President and CEO
Zeon Corporation

April 2020 to March 2021
(includes some information after April 2021)

Reporting scope
Zeon Corporation and Zeon Group companies inside and outside
Japan. Some data covers only Zeon Corporation.

Zeon’s information disclosure
Basic information on Zeon Corporation and Zeon Group is available on the Company Information section of the corporate website. This Corporate Report (booklet) contains a wide range of
information on Zeon corporate management and CSR. A CSR
Report (PDF) with detailed information on initiatives and site
reports is available on the CSR activities section of the corporatewebsite. More information about Zeon’s management and operations is available on the Investor Relations section of the corporatewebsite and in the Fact Book.

https://www.zeon.co.jp/en/

1

Zeon Group

Corporate Repor t 2021

2

Business Overview
Zeon’s main products are created from raw materials such as butadiene and isoprene, which
are extracted from the C4 and C5 fractions of naphtha using proprietary Zeon technologies.
Business segments are divided into the Elastomers Business, Specialty Materials Business,
and Other Businesses.

Contributing toward the SDGs throughall of our businesses

Areas Where Zeon Products Are Making a Contribution

C2 fractions Ethylene
Energy conservation

C3 fractions Propylene

Naphtha

C4 fractions

GPB
process

Butadiene

Synthetic rubbers
Synthetic latexes

Zeon’s proprietary
technology
Extracting highly purebutadiene from C4 fractions

C5 fractions

GPI
process

Reduction of fossil fuel use

Self-driving cars

Main Products
Crude
oil

Key issues that we are focusing on

In every one of our businesses, we are working to reduce
the environmental footprint of products during productmanufacturing and use, and aiming to contribute to societal
development and technological innovation through product use.

Synthetic rubbers
Thermoplastic elastomers

Piperylene

Petroleum resins

Dicyclopentadiene

Specialty plastics

Mobility-related
Medical devices

Power generation and storage
Daily necessities

IoT

Elastomers BusinessIn 1959, Zeon became the first company in Japan to mass-produce synthetic rubbers. Comprising three individual
businesses—Synthetic Rubber, Synthetic Latex and Chemicals—the Elastomers Business is a solid core business that
underpins Zeon’s activities.
Synthetic rubbers

Isoprene

Medical materials

S-SBR is a type of synthetic rubber used as a raw
material for manufacturing fuel-efficient tires.
NBR is used for heat- and oil-resistant rubbercomponents installed near a vehicle’s engine.

Synthetic latexes

Synthetic latexes have a wide range of usage
applications, including rubber gloves used in
the healthcare and food processing sectors,
anti-slip gloves, cosmetic puffs, etc.

Chemicals

Thermoplastic elastomers are the raw material
for the adhesive tape used in diapers and forother adhesive products. Petroleum resins areused as materials in the manufacturing ofpaints for painting road surface markings, etc.

Specialty Material BusinessSpecialty materials are materials and components with high added value thanks to superior macromolecular design
and processing technology.

Zeon’s proprietary
technology

2-butyne

Extracting isoprene and otherhighly-pure, useful components
from C5 fractions

Specialty chemicals
Electronics materials
Energy materials
Medical devices
Polymerized tonerSpecialty plastics and components

Camera lenses, medical containers, and opticalfilms for LCD and OLED panels are made fromresin material and then processed to produce
the required components.

Specialty chemicals

Special chemicals include high-quality synthetic
aroma chemicals used in perfumes and in foodproducts, as well as pharmaceutical/agrochemical raw materials and intermediates, industrial
chemicals, etc.

Energy materials

Binders for lithium-ion
batteries

Striving to become the world’s number one, unique,first-in-the-world enterprise—The spirit of inquiry for technology

Cultivating an inquiring mind epitomizes Zeon’s approach to manufacturing.
We are a company that creates materials rather than the final products. Once
our customers express their need for creating a certain end-product, we
begin exploring solutions. Zeon excels in the technology for extracting varied
materials from the C4 and C5 fractions of crude oil. Our inquiring minds aresecond to none in the quest for materials, and we have fostered a corporate
culture that constantly generates new ideas.
3

Zeon Group

Corporate Repor t 2021

Polymerized tonerPrinter toners

Medical devices

Medical devices include gastrointestinal system
devices (such as catheters and stents), as well as
cardiovascular system devices (such as IABP driving
devices and FFR devices for intravascular treatments).

Electronics materials

Electronics materials include insulation materials, etching gases,
photo resists, etc., mainly for use in
semiconductor manufacturing.

Petroleum resins

Other Businesses

RIM compound

Engineering, packaging materials, building materials, deodorants, RIM compounds, single-walled carbon nanotubes,
paints/coatings, trading, etc.

Carbon nanotubes The main raw materials are
C4 or C5 fractions The main raw materials
are materials other thanC4 or C5 fractions

Carbon Nanotubes (CNT) Business

Zeon is the first company in the world to begin mass production of Super Growth Carbon Nanotubes. We are exploring
new applications for carbon nanotubes through both internaland external collaboration. For example, we are developing
rubber with superior heat resistance, and composite materials with high thermal conductivity.

RIM BusinessWe produce the thermosetting
resin mixture solution that isused to make moldings such as
bathtubs and car bumpers.

4History of Value Creation

The detailed history of the Zeon Group can be viewed on the updated website.
https://www.zeon.co.jp/en/company/special/history/In the 1950s, Zeon Corporation acquired technologies from B.F. Goodrich Chemical Company in the
U.S. and began manufacturing polyvinyl chloride and specialty synthetic rubber (NBR).
Since the 1970s, we worked to develop proprietary technologies and have developed and expandedbusiness in many areas of highly functional chemical materials based on raw materials produced
using the GPB and GPI processes.

Changes in Social Circumstances and Needs

Zeon marked the 70th anniversary of its founding in 2020 and now has a number of businesses that
control high shares of the global market based on its proprietary technologies and is contributing tosolving social and customer issues through its products.

1950–

1970–

2000–

2020–

This was the time of the rise of the petrochemical industry, whenpetrochemical complexes were established and quality and quantity of chemical materials were required for economic growth.

In response to the oil crises and the problem of pollution, chemicalmaterials that provide both efficiency and safety were demanded.

Higher functional chemical products are needed for the advancement of digitization and advanced information technology.

Entering an era of unprecedented demands to reduce environmental impact including zero CO2 emissions and closed loops

Business-Related Events

To the Future

Zeon Group Business Results
Operating income (billion yen)

Net sales (billion yen)

1980s

500

 stablishment of a “third pillar of business”
E
to follow polyvinyl chloride resins andsynthetic rubber soughtMany new products developed from isoprene manufactured using the GPI process
Advance into the processing field progresses

400

Kanbara Plant (Shizuoka Prefecture)

300

1989	Specialty rubber business acquired from
B.F. Goodrich Chemical Company in the
U.S. Zeon becomes the world’s leadingmaker of specialty rubber

1950	Establishment (start of polyvinyl
chloride business)
1959	Launch of synthetic rubber business(first in Japan)
	Central Research Laboratories established (now the R&D Center)

200

1990s

 verseas business development in the U.S.,O
Europe, Asia, and other regions accelerates
Promoted development of energy materials,
including binders for lithium-ion rechargeable batteries

1996 Safety Philosophy established

2000s

2010s

 evelopment of new manufacturing methodsDfor optical films. Focus on higher function
materials and components

2000	
Withdrawal from the polyvinyl chloridebusiness due to deteriorating profitability
2005	Introduction of production innovations
using the Daicel method
2006	Research & Development Center No. 10
Building completed. Substantial improvements made in analysis technologies

1970, 1971 Representative offices establishedin Europe and the U.S.
1977	
Research Center established to search
for new business

1950

1970

Net sales (left scale)Operating income (right scale)* Unconsolidated through 1976, consolidated from 1977

1980

Net sales composition ratios in 1970
(unconsolidated)

1990
Net sales composition ratios in 1990
(unconsolidated)
OthersSynthetic
rubber 66%

Synthetic
resins34%

6%Synthetic
resins32%

Synthetic
rubber 62%

2000
Net sales composition ratios in 2000
(consolidated)
Others

39.0

billion yen

Unconsolidated
net sales:

129.4

billion yen

Others

Information,
environmentand health15%

Consolidated
net sales:

2020
Net sales composition ratios in 2010
(consolidated)

24%
Rubber 42%
Latex

194.2

Energy conservation
Power generation and batteries
Automotive
Medical devices and related materials
Agriculture
IoT
Daily necessities

30

2010

Chemicals 11%
Unconsolidated
net sales:

40

2017	S-SBR business merges with
Sumitomo Chemical, ZS Elastomers
Co., Ltd. established2019	
Became a signatory to the United
Nations Global Compact
2020 Support for TCFD announced

100

0

50

 usiness development in Asia reinforced.
B
Progress in development of new fields such as
medical devices and single-walled carbon
nanotubes (2015)

Areas Where Zeon Contributes
to Society

18%

20

Zeon’s Strengths
10	Development and production capabilities through integrated production
starting with raw materials
	Development of creative products
using proprietary technologies

0

Net sales composition ratios in 2020
(consolidated)
OthersSpecialty
Material
Business 18%

16%

Elastomers
Business 64%

Specialty
Material
Business 31%

billion yen

Consolidated
net sales:

Elastomers
Business 53%

8%billion yen

Consolidated
net sales:

270.4

302.0

billion yen

Examples of technologies and products developed by Zeon
1960s

1980s

I ncreased production of synthetic
rubber and polyvinyl chloride

Balloon catheters

Ventricular assist device

NBR latex (gloves)

VP latex (tire cord)
Hydrogenated nitrile rubber (Zetpol®) nergy materials (binders for mobileElithium-ion batteries)

 eneral-purpose synthetic rubber withG
modified terminals

Solution-SBR (fuel-efficient tires)
Photo resists

Isoprene rubber (for use in tires)

Pulverized toner

Insulation materials

 crylic rubber (for use in automobile
A
components)

C5 petroleum resin

ZEONEX®

Thermoplastic elastomer SIS

ZEONOR®

 ynthetic aroma chemicals (leaf alcohol,
Sjasmine aroma chemicals)

ZEORORA®

1964 GPB process developed
1971 GPI process developed

1970s

RIM molded items and formulation

5

1990s

Powder slush compounds (PSC)

Zeon Group

Corporate Repor t 2021

2000s
 eonorFilm® (melt extrusion process films, retarZ
dation films by successive stretching process,retardation films by diagonal stretching process)Heat-resistant H-NBR (Zetpol®)Heat-resistant acrylic rubber
Stents (bile ducts sheath)
Polymerized color toner
Asymmetric SIS (elastic film for diaper)

2010s
Super Growth Carbon Nanotube
ZEONEX® (for pharmaceutical packaging)
Isoprene rubber emulsion (for gloves)
Water-based binders for lithium-ion batteries
Prohydrojasmon plant growth regulator
Microfluidic chip prototype provision service
Solar card type lamp

Polymerized toner6

Value Creation Flow
Taking the new Medium-Term Business Plan (implementation of which began in FY2021) as thefoundation, the Zeon Group is contributing toward building a “Sustainable Earth” and a “Safe andComfortable Life for People” through the provision of unique, innovative technologies and services.

Being aware of social
issues and social change

Major trends* VUCA: Volatility, Uncertainty, Complexity and Ambiguity

Management Resources—INPUTS
Human capital
Employees:

SDGs

VUCA

Social issues
affecting thewhole world

Difficulty inforecasting the future,both for businessand for society as
a wholeFinancial capital	Maintaining stable cash flow

24.2 billion yen
448.8 billion yen
298.2 billion yen

Capital
Total assets
Net assets

33 overseas group companies

	Risk diversification
	Improving safety
Intellectual capital	R&D expenses:

(including sales companies)

14.3 billion yen

(FY2020)

Strengthen COP andbattery materials	Increase production
capacity	Improve resilience	Launch new products

Ensure the survival ofexisting SBUs

Elastomers
	Strengthen products having acompetitive edge
	Raise the efficiency of eachproduction line
Specialty Materials
	Bolster our competitive edge
by developing products andincreasing production capacity

	CASE and MaaS	Healthcare and life science

1 	A high-level integrated use development model for C4 and C5
fractions, making use of Zeon’s unique technologies, including the GPB and GPI processes

Natural capital	Ensuring a stable supply of naphtha (anZeon Group

Corporate Repor t 2021

	Providing products and services
indispensable to society	Take vigorous action with the steps“Let’s try first,” “Let’s connect,” and“Let’s polish up”

	Energy conservation

FY2020 Results—OUTPUTS

4 	Simulation technology that supports customer’s productdevelopment and evaluation activities (materials for energy
sector use)

SDGs targeted by Zeon	Operating income:

Business Areas
Existing Businesses
Elastomers BusinessSpecialty Material Business	Synthetic rubbers

	Specialty chemicals

	Latex	Toner	Chemicals

	Electronics materials	Optical films
	Medical devices

New Businesses

	Sales ratio of productsthat contribute to the SDGs:
	Existing businesses:
(compared to FY2019)

	Products that can contributetoward solving problems forsociety, including energy-saving
products, etc.

302.0 billion yen
33.4 billion yen

Targets for 2030

	New businesses:

Key Areas	CASE and MaaS	Healthcare and life science	Telecommunications (5G/6G)

50%
ROIC 9.0%+60.0

Net salesbillion yen	Employee engagement:

75%

	Ratio of foreign-nationaland female directors:

30%

Core Values

Let’s try first7	Continuing to contribute toa sustainable society

Live up to the aspirations of employees	Telecommunications

Zeon’s Strengths and Competitiveness3 	A comprehensive, integrated development and manufacturing capability that covers every stage from plastics material
design through to component manufacturing using Zeon’s
unique technology (optical film, life sciences business, etc.)

Social capital	Technology support for customers
	Collaboration with local communities

Focus on 4 key areas

Live up to societal expectations

	Net sales:2 	Thoroughly clean plastics manufacturing technology (plastics
for optical use and medical use)

important raw material)	Reducing the amount of energy used in
production activities

Directions for 2030
(what we want to be)

3. Work together to create “stages” to be active on	Keeping R&D and production activities inclose proximity

Value Creation—OUTCOMES

1. Promote a transformation of monozukuri to realize a carbon neutrality and circular economy
2. “Polish up” existing businesses“Explore” new businesses

Within Japan

Outside Japan

A company that lives up to societal expectations
and the aspirations of employees

The New Medium-Term Business Plan —Group-wide Strategy

Manufacturing capital	Strengthening production capacity

4 plants and 1 research center,and 16 group companies

Vision for 2030

Zeon’s Business Model —VALUE DRIVERS(Group-wide, as of March 31, 2021)

HR development
	A human resources system that encourages
employees to challenge themselves

Contributing to the preservation of the Earthand the prosperity of the human race

*

3,502



Corporate Philosophy = Mission

Let’s connect

Let’s polish up For more information about the new Medium-TermBusiness Plan, please see P. 13 of this report.

8Company Profile

Financial and Non-financial Highlights

Name:

Zeon Corporation

Consolidated net sales

Segment net sales (consolidated)

Established:

April 12, 1950

(million yen)(million yen)

400,000

400,000

Capital:24.211 billion yen (as of March 31, 2021)

Employees:

3,502 (consolidated), 1,642 (non-consolidated) (as of March 31, 2021)

Listed on:

Tokyo Stock Exchange

Business segments:

Elastomers Business, Specialty Materials Business, Other businesses For more details about Zeon’s businesses, please see P.19 “Zeon’s Business and Strategy.”

Head office:Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo 100-8246, Japan

Research laboratory:

Research & Development Center

Offices:

Osaka Office, Nagoya OfficePlants:Takaoka Plant, Kawasaki Plant, Mizushima Plant, Tokuyama Plant, Himi-futagami plant, Tsuruga Plant

Group companies in Japan:
Tokyo Zairyo Co., Ltd., Zeon Kasei Co., Ltd., Zeon North Co., Ltd., Zeon Yamaguchi Co., Ltd., Zeon F&B Co., Ltd.,

300,000

150,000

100,000

100,000

50,00050,000035,00030,000

Zeon Chemicals L.P., Zeon Specialty Materials lnc., Tokyo Zairyo (U.S.A.) Inc.

25,000

Zeon do Brasil Ltda.

20,000

Zeon (Shanghai) Co., Ltd., Zeon Trading (Shanghai) Co., Ltd., Shanghai Zeon Co., Ltd., Zeon Polymix (Guangzhou) Co., Ltd.,

2016

2017

2018

2019

2020

0

(FY)

Consolidated operating income andconsolidated operating margin(million yen)

56,73353,473

46,977

Consolidated operating income

Consolidated operating margin

38,881

30,76733,40833,14711.7
26,104

10.7

11.1

(%)

(million yen)

18.0

45,00016.0

40,00014.0

35,00012.0

30,00025,0008.0

20,00015,0006.0

15,00010,000

4.0

10,000

5,000

2.0

5,000

0.0

0

9.8
8.1

2016

2017

85,142

74,980166,243

2016

194,570

198,087

2017

2018

91,74995,465

178,847

161,626

2019

2020

(FY)

Segment operating income (consolidated)

10.0

0

86,479250,000

150,000

AmericasAsia

53,928300,000

200,000

40,000

Zeon Europe GmbH, Telene S.A.S., Tokyo Zairyo Czech, s.r.o.

287,624

Other Businesses

350,000

301,961

200,000

ZS Elastomers Co., Ltd., Okayama Butadiene Co., Ltd., ZIS Information Technology Co., Ltd., Zeon Opto Bio Lab Co., Ltd.

Europe321,966

250,000

Zeon Chemicals Yonezawa Co., Ltd., RIMTEC Corporation, Zeon Medical Inc., Zeon Polymix Inc., TOHPE CORPORATION,

Zeon Kasei Mexico S.A. de C.V., Tokyo Zairyo México, S.A. de C.V.

337,499

Specialty Material Business

49,03845,000Group companies outside Japan:

332,682

350,000

Elastomers Business

2018

2019

2020

(FY)

Elastomers BusinessSpecialty Material Business

Other Businesses

3,206
2,156

2,786
2,865

16,742
16,115

9,832

2,098
21,96017,311

20,552

22,16917,691
9,642

2016

2017

2018

2019

12,283

2020(FY)

Takehara Zeon (Shanghai) Co., Ltd., Zeon Kasei (Changshu) Co., Ltd., Zeon Medical (Guangzhou) Inc., Tokyo Zairyo (Shanghai) Co., Ltd.,Tokyo Zairyo (Tianjin) Co., Ltd., Tokyo Zairyo (Guangzhou) Co., Ltd.

Capital investment by business (consolidated)

Zeon Korea Co., Ltd., Zeon Shinhwa Inc.
Zeon CSC Corporation, Zeon Taiwan Co., Ltd.

(billion yen)

Zeon Chemicals Singapore Pte. Ltd., Zeon Asia Pte. Ltd., Tokyo Zairyo (Singapore) Pte. Ltd.

35

Zeon Asia Malaysia Sdn. Bhd.

Elastomers BusinessSpecialty Material Business

29.1

30

Zeon India Private Limited, Tokyo Zairyo (India) Pvt, Ltd.
Zeon Chemicals (Thailand) Co., Ltd., Zeon Advanced Polymix Co., Ltd., Zeon Chemicals Asia Co., Ltd., Tokyo Zairyo (Thailand) Co., Ltd.

 eon Specialty Materials lnc.
Z
Established in October 2017

Zeon Manufacturing Vietnam Co., Ltd., Zeon Research Vietnam Co., Ltd., Tokyo Zairyo (Vietnam) LLC.
PT. Tokyo Zairyo Indonesia

25

20

15

3.3
22.1
3.3
7.6

0

14.6

14.6

2.9

2.7

3.6

10

5

Other Businesses

11.2

2016

8.0
2017

18.0

19.6
2.1
10.1

6.2
5.7
2018

7.8

7.4

2019

2020

(FY)

 eon Chemicals Asia Co., Ltd.
Z
Established in September 2018

9

Zeon Group

Corporate Repor t 2021

10

Financial and Non-financial Highlights
Share price (as of March 31)

Shareholder information
Financial institutions& securities companies

Treasury stock

18,338,000 shares
7.7%

84,949,000 shares
35.8%

CO2 emissions (consolidated)(yen)(1,000 tons-CO2)(crude oil equivalent, kL/million yen)

2,000

1,000

1.00

1,769
1,538

774

800

1,500

Individuals& others

18,229,000
shares
7.7%

737

662
1,271

Number ofshares outstanding

Energy use per net sales (consolidated)

1,120

687

814

Foreign investors

Other domestic
institutional
investors

53,299,000 shares
22.5%

62,257,000 shares
26.3%

Dividends

0.94

2019

2020

0.80

665

600

0.60

400

0.40

200

0.20

0

2016

2017

2018

2019

2020

0

(FY)

2016

2017

2018

2019

2020

(FY)

Water resources used (consolidated)

0.00

(yen)

(million yen)

(1,000 m3)(tons)

20,00025,000150.0

2216,48019

15,10317

15,00020,721
15,274

13,23320,504

20,412

19,934

19,914125.0

20,00014,258

100.0

15

2016

2017

2018

(FY)

Emissions of substances subject to the PRTR Act (consolidated)

25

16

0.94
0.86

500

R&D expenses

20

0.91

1,000

237,075,556 shares

21

0.93

112.1

110.2

112.8

2017

2018

2019

97.0

105.0

15,00075.0

10,00010

10,000
50.0
5,000

5

5,000

0

2016

2017

2018

2019

2020

0

(FY)

Number of employees (consolidated)

2016

2017

2018

2019

2020

Number of directors

(No.)

(No.)

5,000

14

All directors

0

(FY)

25.0

2016

2017

2018

2019

(%)

(–)

3.00

12

3,090

3,328

3,405

3,462

11

2.50

10

3,502

2.20

2.21

0.80

2.03

2.00

8

0.60

7
1.50

6
6

2,000

4

0.40

0.50
0.46

1.00

3

3

3

3

3

1,000

0.20

0.50

2

0.00
0

11

2016

Zeon Group

2017

2018

2019

Corporate Repor t 2021

2020

(FY)

0

(FY)

0.94

1.00

2.72

2020

2.16

10

3,000

2016

Lost work time accident rate (non-consolidated)(Legal requirement: 2.3%)

Outside directors

0.0

(FY)

Percentage of employees with disabilities (non-consolidated)

12
4,000

2020

2016

2017

2018

2019

2020

(FY)

0.00

2016

2017

2018

2019

2020

(FY)

0.00

2016

2017

2018

2019

0.00
2020

(FY)

12

The Medium-Term Business Plan/Interview with the President

Contributing to the preservation of the Earthand the prosperity of the human race

Corporate Philosophy = Mission

A New Medium-TermBusiness Plan Aimed
at Realizing Our Vision
for 2030
Kimiaki Tanaka

In keeping with its name, derived from the Greek words “geo” (Earth) and “eon” (eternity),
Zeon will contribute to a “Sustainable Earth” and “Safe and Comfortable Life for People”
by providing original technologies, products, and services.
Vision for 2030

A company that lives up to societal expectations
and the aspirations of employees

SDGs targeted by Zeon

Core Values

Let’s try first   Let’s connect   Let’s polish up

President and CEO
Zeon Corporation

1. Results in FY2020, and a Look Back at SZ-20 Phase III, the Previous Plan

2. Summary of the New Medium-Term Business Plan

In the first half of FY2020, the Synthetic Rubber and Battery

make accurate forecasts covering a four-year period. In a

Regarding the overall outline of the new Medium-Term Busi-

Materials businesses were heavily affected by the economic

world affected by major environmental changes and where

ness Plan, the plan embodies our awareness of Zeon’s corpo-

downturn caused by the COVID-19 pandemic, leading to

unexpected events such as the COVID-19 pandemic seem torate philosophy, “Contributing to the preservation of the Earthattempt various things, there were also reflections on the

depressed sales, but there was an improvement in the second

be occurring once every two or three years, forecasting is very

and the prosperity of the human race,” or in other words ourcompany’s failure to fully build the corporate culture needed

half of the year. One area where performance remained solid

challenging, and so we are planning to structure the nextsocial mission to contribute toward building a “Sustainable

for this. Based on the discussion undertaken in the 2030 Proj-

throughout the year was the Synthetic Latex Business, as latex

Medium-Term Business Plan in two-year phases.

Earth” and “Safe and Comfortable Life for People.” Reflecting

ect, three key values were put into words, discussed by seniorcommitment to “living up to the aspirations of employees.”
At the same time, although there were calls to proactively

is used as a material to make gloves for medical and sanitary

SZ-20 Phase III did specify numerical sales targets, but theour commitment to fulfilling this mission, we defined ourmanagement, and incorporated into the new Medium-Termapplications. In the Specialty Materials Business, the opticalmain focus was on bringing about a reform in the company’s

Vision for 2030 as being “A company that lives up to societal

Business Plan as “Core Values.”

films segment saw steady sales of film for medium- and small-corporate culture aimed at facilitating rapid growth. Regarding

expectations and the aspirations of employees.”

sized smartphone screen applications, and for large-screen

this aspect of the plan, my assessment is as follows.

TVs. Sales of optical resins, chemicals and specialty chemicals
were also solid.
In SZ-20 Phase III, we had set ourselves the target ofachieving consolidated annual sales of at least 500 billion yen
in FY2020, but we did not achieve this. Although in FY2018 we
did post our highest ever consolidated sales, at 337.5 billion
yen, from FY2019 onwards sales growth stalled because of the
impact of the COVID-19 pandemic.
As regards the performance of individual businesses, Specialty Plastics was the only business to meet its originally anticipated sales target; for most businesses, the target
achievement rate was around 80% to 90%. Businesses where
performance fell significantly below the target, with a target
achievement rate in the range of 20% to 60%, included Battery	I feel that, while we set ourselves a high target of
doubling annual sales, we failed to get across within
the company senior management’s intention, which
was to make a real push for dramatic growth, rather
than just to achieve those specific numerical targets;
we did not succeed in raising employee motivation to
the necessary level.
	With regard to business strategy, it seems to me that
there was a lack of inter-departmental collaborationand of a group-wide perspective, and resource allocation was not properly coordinated with the plan targets.

while it does seem that it may have been partly due to a failure
to perform adequate market analysis and forecasting, there isanother aspect to the situation, which is that it is difficult to

13

Zeon Group

Corporate Repor t 2021

Regarding the SDGs, I expressed a hope that SDGs-related
measures would be positioned at the heart of the new

middle of the diagram shown above denotes our intention toMedium-Term Business Plan, and that the SDGs would consti-

realize our Vision for 2030 through initiatives relating to thetute the framework for realization of Zeon’s Vision for 2030.

Sustainable Development Goals (SDGs). We selected nine

After discussion by the 2030 Project teams, nine SDG Goals

Goals, based on factors such as their relevance to our busi-

were selected. When one reads the original English text ofness activities (for more details, see P. 25). We also defined

the SDGs, there are many references to concepts such as“Core Values.” By attaching importance to these three actions,“Well-being” and “Freedom.” I believe that we need to attach

we are aiming to be “A company that lives up to societal expec-

great importance to these values, which are the foundation oftations and the aspirations of employees.”

the SDGs, and they have been incorporated into the measures

In discussing the formulation of the new Medium-Term Busi-

adopted for our group-wide strategy No. 3.

ness Plan, our first step was to implement the 2030 Project, with

Starting from the end of 2020, as the first step toward

three teams (whose members were chosen from among Zeon

“living up to the aspirations of employees,” we have launchedemployees) discussing where Zeon wants to be in 2030, andgroup-wide projects with respect to 16 “Top-down” issues

submitting suggestions to the company. Having received these

forming part of the new Medium-Term Business Plan, andsuggestions, what Zeon attached great importance to was some-arranged for inter-departmental discussion of these issues by

thing that had not really been put into words previously, which

a total of just under 200 project team members who volun-

was an awareness of the need to build a corporate culture andteered in response to an internal call for participants. The

for formulating the next Medium-Term Business Plan.

atmosphere characterized by respect, in which younger employ-content of the suggestions made during these projects has* ZCS: Zeon Chemicals Singapore Pte. Ltd.

ees also feel able to enthusiastically fulfill their potential. This idea

been utilized as a reference when formulating group-wide

has now been clearly enunciated in the Vision for 2030, with thestrategies and a new organizational structure.

	I also feel that the organizational structure andframework for driving the development of new products was inadequate.

Materials, Electronics Materials, Zeon Medical, and ZCS*,
which manufactures S-SBR. Looking back on this performance,

The reference to the “SDGs targeted by Zeon” in the

We have examined these issues and used this as a basis

143. Strategies and Targets for 2030
Next, we have formulated three group-wide strategies based

Living up tosocietal expectations

Vision for 2030

Living up to
the aspirations of employees

Directions for 2030
(what we want to be)

Providing products andservices indispensable
to society

Continuing to contributeto a sustainable society

2

1Take vigorous action
with the steps“Let’s try first,”“Let’s connect,” and“Let’s polish up”

3

Formulate 3 Strategies based on the directions for 2030

Strategies

12

Promote a transformationof monozukuri to realize
a carbon neutrality andcircular economy“Polish up”
existing businesses

Work together to create“stages” to be active on

Strengthen COP andbattery materials

Focus resources on
key areas

Ensure the survival ofexisting SBUs

Provide a greater varietyof life choices

Targets for 2030

To be set based on
published guidelines
including those of
the Japan Chemical
Industry Association

Sales ratio of products that
contribute to the SDGs:

50

ROIC for existing
businesses:

Net sales of new
businesses:

9.0

%

%

+60

billion yen(compared to FY2019)

Employee engagement:

75%

Ratio of foreign-nationaland female directors:

30

entiation and reducing costs, exploring new usage applications, and improving production efficiency. The background tocompany and contributing to the building of a circular economy.

the decision to use ROIC as an indicator is that growing impor-

The reason why the targets for 2030 will be set at a laterawareness of capital cost, as can be seen in the revision ofrecently announced new carbon neutrality objectives, organi-

Japan’s Corporate Governance Code, and ROIC has also

zations such as the Japan Chemical Industry Association are

becoming increasingly important as an indicator for evalua-

expected to announce new guidelines. Furthermore, as Zeon’s

tions conducted by shareholders and other investors. With

operations form part of an industrial complex that comprises

ROA, which has conventionally been used as a profit indicatorchemical plants belonging to multiple different companies, ain the past, there is an issue relating to the lack of a direct link

coordinated approach is needed. We will be taking these con-

between business assets and the scope of total assets, hence

siderations into account when formulating the new plan.

our decision to adopt ROIC, which provides a more precise
In regard to new businesses, we have designated four

native fuels, we will also be working steadily to undertake theareas where strong market growth can be anticipated—CASE

research and development work needed to realize a monozukuri

and MaaS, healthcare and life science, telecommunications

manufacturing transformation over the long term. We have

(5G/6G), and energy conservation—as key areas, and we will

already been proceeding with research aimed at creating

be focusing resources on these areas and aiming to achieve

butadiene (for use as a raw material in tire manufacturing)an additional 60 billion yen a year in extra sales revenue.

from biomass material, and in April 2021 we issued a press(

See figure on P.15)
Going forward, we will be expanding the range of products

Strategy 2 involves applying different strategies and athat contribute toward the realization of the SDGs, both indifferent management approach to existing business and new

existing businesses and in new businesses, and we will bebusinesses. With regard to existing businesses, besides

aiming to increase the share of total sales held by products

continuing to strengthen the Specialty Plastics and Battery

that contribute to the SDGs to at least 50%.

Materials businesses, where growth has been particularly

To facilitate these initiatives, Zeon implemented an organi-high, we will also be working to improve capital efficiency inzational restructuring in April 2021, and established four new

other existing SBUs, with a target of realizing ROIC of at least

units. The Mobility Business Drive office will be examining

9.0%. The Specialty Plastics Business completed its project tostrategies for further strengthening Zeon’s presence in theincrease production capacity at the Mizushima Plant in July

automotive sector. The “ZEON NEXT” Exploration office will

2021, and we are currently considering adding new produc-

explore materials applications and new uses for existing mate-tion locations in the future to strengthen resilience. The Bat-

rials, and examine pathways to commercialization. The Incuba-tery Materials Business will be focusing on new producttion Center will cultivate the “seeds” of new products and new

categories that contribute toward enhancing the performancebusinesses. The Next Generation Devices office has beenof lithium-ion batteries, which represent an important market

established with the aim of launching a new-generation

with significant growth potential.

memory business.

New Businesses—Key Areas and Products%

Telecommunications

Example:Film-type circuit substrate and semiconductor containers made using
newly-developed Cyclo Olefin Polymers with superior thermal resistance

Corporate Repor t 2021

evaluation of capital efficiency in business activities.

sures such as energy conservation and shifting over to alter-

Example:Pad-type thermal interface material
SOLAR CARD

Zeon Grouptance is being attached to management that demonstrates

date is because, with the Japanese government having

Energy conservation

15

efficiency by measures such as strengthening product differ-ahead toward 2050, with the aim of becoming a carbon neutral

release about this research.

Key Policies (2021–22)

Formulate a master plan
for achieving carbon
neutrality looking toward
the year 2050

With regard to Strategy 1, by FY2022 we will have formu-

In existing SBUs other than the Specialty Plastics and Battery Materials businesses, we will be striving to improve capital

lated a master plan for achieving carbon neutrality, looking

Besides the steady implementation of practicable mea-

3
“Explore” new businesseson where we want to be according to the Vision for 2030.

Key Areas

CASE and MaaS

Example:Multi-material adhesive for automotiveuse (using newly-developed materials forjoining substances that normally will not
stick together)

Healthcare and life science

Example:Testing and analysis device components
made using Cyclo Olefin Polymers
Microfluidic chips

16

With the aim of realizing a digital transformation, we are also
promoting the improvement of digital infrastructure as groupwide strategic infrastructure. Initially, we will be focusing on
areas such as human talent cultivation, enhancing the simula-

Build a Digital Infrastructure to Create Value for Customers
Level of reform

tions used in existing businesses, and “smart factory” develop-

Support for medical check-ups
and vaccinations

III. Create customer value

ment. In the future, we will be implementing materials

Business model transformation based on MI and AI

informatics that makes effective use of artificial intelligence (AI),II. Reform corporate management
and business management

and we will be creating value for our customers through services that provide new products and compounds tailored to

Global, real-time grasp of markets
and businesses

customers’ needs at unprecedented speed.

I. Build a digital infrastructure

In order to implement our group-wide strategies, over the

Human resource development (fostering power users)
Advanced simulation of existing businesses
Promotion of smart plants

next 10 years we plan to undertake new investment totalingaround 350 billion yen. This new investment does not include
investment undertaken to maintain existing facilities. We antic-

Create “Stages” on Which All Employees Can Demonstrate Their Individual Strengths

2021

2023

2025

Cafeteria Plan
Working styles unconstrainedby time or location
Open recruitment projects

Well-being

Side job
Deepen D&I

the production capacity of our Specialty Plastics Business andof our new businesses, as well as investment to promote digital transformation, and to reduce greenhouse gas emissions.

Career design
Recurrent education

Support for workplace dialogue
and associations

2030

ipate that it will include investment and financing to increase

Support for childcare andnursing care

Volunteering

FreedomStrengthen
engagement

A circumstance providing a greater variety of life choices

4.	Aiming to be an Enterprise that Provides Well-being and Freedom
for All Employees

5.	Realizing Corporate Governance that Embodies Higher Levels

Strategy 3 aims to make Zeon an enterprise that provides
well-being and freedom for all employees. By providing morelife choices, we are aiming to increase the employee engage-of Transparency and Fairness

Strategy 3

ment rate to at least 75% by 2030. In thinking about thispolicy, I felt that it was important to incorporate the words“well-being” and “freedom,” based on having been impressed bytheir use in the original English version of the SDGs. By helping

One of the other objectives of group-wide strategy No. 3 is toWork together to create “stages”
to be active on

have non-Japanese and female directors account for at least
30% of all directors by 2030. Given that Zeon’s Board of Directors currently has seven directors, this means that at least

employees to maintain their physical and emotional health, andthree directors will need to be foreign nationals or women.

by creating a situation where they have more options, it will be

Currently, there are none. While this may thus seem to be apossible for employees to enjoy better circumstances overall.
Our initiatives to realize this goal include living up to employees’

challenging target, we will be working systematically to achieve

Key Policies (2021–22)

this goal over a period of 10 years.

aspirations by providing them with more choices, for example byfacilitating flexible work-styles that are not constrained by limitations of time or place, making improvements to systemicarrangements (including aspects of employee welfare provision

We are continuing to undertake corporate governance

Provide a greater varietyof life choices

reform. In 2020, the number of members of the Board of
Directors was reduced from ten to seven, while keeping thenumber of outside directors unchanged at three, thereby

such as cafeteria plan), and expanding provision of career plan-

raising the share of outside directors. Zeon’s outside directors,

ning support and recurrent education. In April 2021, we put inwho have backgrounds in other industries, have been proac-place a formal system for teleworking. While factory floor workstyles will not change much, we aim to transform work-styles intively providing the company with constructive ideas.

Targets for 2030

The strategic direction that we are aiming to follow in rela-administrative departments and business units. Currently, weare promoting internal discussion regarding a comprehensive
refurbishment of Zeon’s headquarters building in the Marunouchi district of Tokyo, the aim of which is to realize new workstyles and embody “Core Values.”
Measurement of the employee engagement rate is being
outsourced to a third-party organization. The world’s leading
companies generally have an employee engagement rate oftion to corporate governance reform in the future is to work
Employee engagement

75%

Ratio of foreign-nationaland female directors

30%

even harder than at present to maintain transparency andfairness. To this end, where changes can be made, we will bemaking substantial changes. When outside directors point out
things that need changing (based on their outsider’s perspective), if their ideas have merit, then we will work in that direction, as speedily as possible. I believe that we can already see
the path that we need to be following in the future.

around 75%, and since Zeon is aiming to become a worldclass company in terms of employee engagement, 75% is thetarget that we have set ourselves.
17

Zeon Group

Corporate Repor t 2021

18

Zeon’s Business and Strategy

Elastomers BusinessIn 1959, Zeon became the first company in Japan to mass-produce synthetic rubbers.
Consisting of the three businesses of synthetic rubber, synthetic latex, andchemicals, the Elastomers Business provides high-quality materials that are
essential in all kinds of industrial fields around the world.

Synthetic rubbers

Solution-polymerized styrene-butadiene rubber(S-SBR) is a type of synthetic rubber that is used as araw material for manufacturing fuel-efficient tires.
Specialty synthetic rubbers are used for heat-resistant, oil-resistant rubber components installed near avehicle’s engine.

Synthetic latexes

Synthetic latexes have a wide range of usage applications, including rubber gloves used in the healthcare
and food processing sectors, anti-slip gloves, cosmetic
puffs, etc.

Chemicals

Thermoplastic elastomers are the raw material for theadhesive used in diapers and adhesive tape. Petroleum resins are used as materials in the manufacturing of paints for painting road surface markings, etc.

Business Overview and Future Strategy
Looking back at our performance in FY2020 in terms of eachindividual business sector, the Synthetic Rubber Business was
directly impacted by the COVID-19 pandemic, particularly in thefirst half of the year, and experienced a substantial fall in sales.
Although the second half of the year saw an increase in shipment volumes accompanying the upturn in the automotive
sector, it was not enough to compensate for the decline in thefirst half, and for the whole year the Synthetic Rubber Businessposted a decrease in both sales revenue and profits
year-on-year.
In the Synthetic Latex Business, while there some variation in
performance between product segments, increased demand for
NBR latex for use in disposable gloves (for medical and healthcare applications) and rising product prices resulted in a situation where sales revenue fell but profits rose.
In the Chemicals Business, although the situation in the raw
materials markets led to falling product prices, there was still
strong demand both within and outside Japan, which helped tobuoy up sales. As a result, although sales revenue fell, profits rose.
For the Elastomers Business as a whole, due to the above
factors, year-on-year performance saw a fall in sales revenue
but an increase in profits.
On April 1, 2021, Zeon’s Synthetic Rubber Division and Synthetic Latex Division, both of which had a long tradition of excellence, merged to form the new Elastomers Business Division.
This merger will make it possible to enhance the quality andspeed of technology development, and will facilitate the flexible
utilization of production equipment. By striving to realize a

Hiroyuki Hirakawa
Director & Senior Corporate Officer
Elastomers and Chemicals Businessfurther strengthening of our company’s business fundamentals, we will be even better placed to provide our customers
with high-quality products and outstanding value. Zeon’s new
Medium-Term Business Plan, implementation of which begins
in FY2021, specifies the need to “polish up” existing businesses
as a key pillar of the company-wide strategy. This means that
the Elastomers Business—comprising the Synthetic Rubber,
Synthetic Latex and Chemicals businesses—will be working tofurther enhance the customer relationships, and the strengths
in terms of quality and technology, that it has built up over theyears, and will be considering and implementing a wide rangeof measures to become a sustainable business that can survive
in a business environment affected by rapid, dynamic change,
including issues relating to decarbonization.
FY2021 is the first year of implementation of the new
Medium-Term Business Plan. Having outlined where we wantZeon to be by 2030, we are now focusing on building the solid
foundations needed to realize this vision.
The Synthetic Rubber Business will be aiming to maximize
the efficiency of its logistics through a bold program of change
in its existing global production system that involves moving
production of particular items from one production facility toanother, as well as expanding or reducing production capacity
as needed. At the same time, by offering customers new value
through the adoption and refining of new production technology so as to develop new products and bring them to market, it
will further strengthen Zeon’s position within the global synthetic rubber market.

The Synthetic Latex Business will realize stable production
and supply to meet strong demand in the disposable gloves (formedical and healthcare applications) market, which is forecast
to see continued high growth, and will further strengthen ourcosmetics materials product offerings, an area where Zeon has
consistently been strong, while also speeding up the development of new surgical glove and work glove applications. With
the launch of the new Elastomers Business Division, the synthetic rubber and synthetic latex research functions will be
integrated, which is expected to lead to major synergies fromthe combining of the outstanding technology and know-howthat the previously separate research institutes had accumulated over the years.
Specialization has always been a fundamental aspect ofZeon’s Elastomers Business strategy. While anticipating that thesolid demand in the Chemicals Business will continue in the
future, we will be striving to differentiate ourselves from ourcompetitors through specialization—in terms of quality andperformance—in our Quintac® series Styrene-Isoprene-Styrene(SIS) thermoplastic elastomers and Quintone® series petroleum
resins, and also focusing on further expansion of specialist
products such as Asymmetric SIS. In addition, we will be working to create new value for customers by developing brand-new
products, and we will be responding effectively to steadily
increasing demand by considering concrete strategies forboosting our production capacity.
We look forward to receiving your continued support andencouragement in the future.

Business conditions in the Synthetic Rubber Business (SWOT analysis)
Net sales

Operating income(billion yen)(billion yen)

250

25

200

194.6

198.1

166.2

20.6
178.8

100

10

50

5

19

17.7

15

150

0

22.2

20

161.6

	Global sales network and technical support covering the Japan,
Americas, Europe and Asia regions	An extensive product line-up including heat-resistant, oil-resistantrubbers and general-purpose rubbers
	Product development capability and unique technologies that areable to meet customers’ needs	Products with high quality and reliability that customers cancontinue to use with peace of mind

2016

Zeon Group

2017

2018

Corporate Repor t 2021

2019

2020

(FY)

0

12.2

2017

2018

2019

2020

S W
Strengths

Opportunities

9.6

2016

	Relatively small production capacity(FY)	The growth of the ASEAN region, India and other emerging markets
	Growing awareness of the importance of sustainability and safeguarding the environment (sustainability-related strategies and measures)
Development of S-SBR for tires that provide outstanding fueleconomy and wear resistanceDevelopment of new monomer extraction technology that facilitates dramatic improvement in per-unit energy costs
Research on the production of bio-derived isoprene and butadiene
Commercialization of biohydrin rubber

Weaknesses
Threats

O T

	The accelerating shift away from gasoline-powered vehicles toelectric vehicles
	Entry of new competitors into the market, and changes in the
supply-and-demand equilibrium due to expansion of overall production capacity	The need to install new production equipment, and the rising costof maintaining existing equipment

20

Specialty Material BusinessSpecialty materials are materials and components with high added value thathave an outstanding macromolecular design and are made using advanced
processing technology.

Specialty plastics and components

Optical film, which is used in camera lenses, medical
containers, LCD panel and OLED panel, is made fromresin material and then processed to produce therequired components.

Specialty chemicals

Special chemicals include high-quality synthetic
aroma chemicals used in perfumes and in foodproducts, as well as pharmaceutical/agrochemical raw
materials and intermediates, industrial chemicals, etc.

Energy materials

Electronics materials

Binders for lithium-ion batteries

Electronics materials include insulation materials,
etching gases, photo resists, etc., mainly for use in
semiconductor manufacturing.

Polymerized tonerPrinter toners

Medical devices

Medical devices include gastrointestinal system devices(such as catheters and stents), as well as cardiovascularsystem devices (such as Intra-Aortic Balloon Pumping(IABP) driving devices and Fractional Flow Reserve (FFR)
devices for intravascular treatments).

Business Overview and Future Strategy

Yoshiyuki Sone
Senior Corporate Officer
Specialty Business
Division Manager – Specialty Components
President – Zeon Korea Co., Ltd.
President – Zeon CSC Corporation

Performance in the Specialty Material Business in FY2020 waslargely in line with expectations for sales. Profits were higher thanoriginally forecast, due to a reduction in expenditure (for example, as a result of employees being encouraged to work fromhome) in response to the impact of the COVID-19 pandemic.
Regarding the Film Business, at the beginning of the fiscal
year there were concerns that the COVID-19 pandemic might leadto an economic downturn, but in the event, there continued to behigh demand for large-screen TVs due to people throughout theworld being stuck at home because of lockdown measures.
There is also high demand for educational tablets used inhome schooling as well as PCs for people working from home,
and we must contribute to society by strengthening our supplyof small- and mid-sized films.
Given these circumstances, we are moving forward withincreasing the production capacity of our optical film plants in
Tsuruga City and Takaoka City, operation of which began in
2020. With the aim of realizing sustainable development, atthese new factories which have just begun operation, we havebeen implementing measures to make production more efficient and stable, with the installation of a wide variety of sensors at key points throughout the plants, including production

equipment. We will continue striving to develop these factories
in harmony with the local community. Going forward, in order
to meet high demand, I believe that we may need to consider afurther strengthening of production capacity.
We are seeing more inquiries for Cyclo Olefin Polymers foruse as lens resin with the accelerated shift to multi-lens smartphone cameras. We will continue to develop advanced products that leverage the characteristics. There has also beensteady expansion in medical packaging applications leveraging
the property of low adsorption to proteins. In order to be able
to meet this high demand even more effectively, we undertook
construction work to increase production capacity at theMizushima Plant, which was completed in July 2021.
In the energy materials segment, although sales of electricvehicles fell significantly in the early part of FY2020, demand
picked up again after mid-year in China and Europe, and there
were various positive factors in the second half of the year,
such as the launch of various new electric vehicle models that
attracted a great deal of attention. As a result, over the year asa whole, sales continued to expand. Sales in the consumer
market were solid, benefiting from significant online demandand factors such as the growth of the e-bike market.

In the electronics materials segment, the upturn in thesemiconductor market led to increased demand for gases usedin etching processes. We are developing pad-type thermal interface material with excellent thermal conductivity and durability
as a new product and developing the market, primarily forsemiconductor applications.
The COVID-19 pandemic had very little impact on the specialty chemicals segment, and demand continued to growsteadily. Demand for synthetic aroma chemicals also increased
steadily, and we are proceeding with efforts to increase our
synthetic aroma chemicals production capacity, with new capacity due to come on-line in the autumn of 2022.
With regard to the Medical Business, in the cardiovascularsegment we introduced new circulatory support pump catheter
products, while in the gastrointestinal segment we launched
new high-frequency hemostatic devices for use with endoscopes. Regarding new medical devices, investigator-initiatedclinical trials began for a new cholangiopancreatic system
device which is expected to facilitate less invasive treatments.
Besides working to increase sales of existing products, we arealso introducing new products to meet medical needs, and weare actively considering expanding into new fields.

Business conditions in the Film Business (SWOT analysis)	Integrated production from monomers to optical films
	Originally developed resins, originally developed film
processing technology
	Capabilities enabling rapid deployment of market demands
in resin design

Net sales

Operating income(billion yen)(billion yen)

120

25

100
80

86.5

85.1

91.7

	Greater penetration of Organic Electroluminescent(Organic EL) displays
Larger LCD
Display production shift to China

21.9

95.4
20

16.7

75.0

16.1

17.3

10
40
5

21

2016

Zeon Group

2017

2018

Corporate Repor t 2021

2019

2020

(FY)

0

2016

2017

2018

2019

Threats

S W
Strengths

Opportunities
0

Weaknesses

O T	Track record of impressive market performance ever since theearly years of the lithium-ion battery (LIB) market
	Ability to provide a total solution, including anodes, cathodes,
and functional layer materials
	High-precision polymerization technology and battery
evaluation technology

9.8

20

Strengths
Opportunities

High dependency on display products

Maturation of LCD market and increased competition

Business conditions in the Energy Business (SWOT analysis)

15
60

S W

2020

(FY)

The growth of the electric vehicle market
The trend toward high-functionality LIBs

Lack of cost competitivenessWeaknesses
Threats

O T

Increasingly challenging competitive environment22

2020–2021 Topics

Other Businesses

The following summarizes Zeon’s major business developments from July 2020 through June 2021. See therelated press releases for more detailed information.
* The dates given are the dates of the related press releases.

Carbon Nanotube Business
Focusing on becoming carbon-neutral
and on the circular economy
Developing new technology to create butadiene from biomass

Carbon nanotubes are a material invented in Japan that are
expected to have a wide range of applications, because of their lightweight, high strength, and good electrical and thermal conductivity.
Zeon’s ZEONANO® carbon nanotubes are single-walledcarbon nanotubes (SWCNT) manufactured using the SuperGrowth method, a revolutionary forming method discovered by
Japan’s National Institute of Advanced Industrial Science andTechnology (AIST).
ZEONANO® carbon nanotubes have several outstanding
features, including large specific surface area, long length andhigh purity, and are anticipated to have a wide range of applications in areas such as the energy sector and electronics sector.
Besides manufacturing and selling single-walled carbon
nanotubes, Zeon is also contributing toward the safe diffusionof carbon nanotubes by conducting safety and environmental
degradability assessments and disclosing the results.
In addition, Zeon is conducting R&D to develop materials
with new properties by combining single-walled carbon nano-tubes with various other materials that Zeon manufactures
itself. Zeon is also conducting collaborative research withnumerous companies and research institutes.
Some of the results achieved in the past few years are outlined below.
	High-performance pad-type thermal interface material
made by combining carbon nanotubes with rubber		This material is contributing toward resolving heat-related
problems in power semiconductors.
	Conductive silicon rubber made by combining carbon
nanotubes with silicon rubber		This material contributes toward easing the symptoms of
Parkinson’s disease and essential tremor (ET) disorder.
For more information about Zeon’s carbon nanotubes, please visit thefollowing website.

April 13, 2021

The Bio-monomer Production Laboratory team, which was established jointly
by Zeon Corporation, RIKEN and Yokohama Rubber Co., Ltd., has achieved aworld first by successfully developing new technology for efficiently creating
butadiene from biomass. Making butadiene—which is an important raw
material for the manufacturing of vehicle tires and synthetic rubber—into a
renewable resource will reduce dependency on fossil fuels and contributetoward reducing greenhouse gas emissions.

“Polish up” existing businesses
Zeon joins the Battery Association for Supply Chain (BASC)

June 4, 2021

The Battery Association for Supply Chain (BASC) is a general incorporated
association that was founded in April 2021 to undertake activities relating to
the adoption of international standards in the battery supply chain and thebuilding of a new battery eco-system, with the aim of helping to realize thepost-carbon society. As a company that supplies various materials which
contribute toward enhancing the performing of lithium-ion batteries, Zeon
Corporation has joined BASC.

Zeon seeks to expand application of adhesive
for battery separators

Zeon’s RIM Business supplies DCP resin material—the raw material for which is Dicyclopentadiene (DCP) derived from the C5
fraction—for use in reaction injection molding (RIM). It also
proposes new uses for this material.
DCP resin is an olefin-based thermosetting resin which consists entirely of carbon and hydrogen, and as a result has a lower
environmental footprint over the product lifecycle than other main
resin types. It is ideally suited for forming applications that involve
large items or complicated shapes, and also for precision materials applications requiring low viscosity or a low dielectric constant.
Forming applications involving large items or complicatedshapes can make effective use of DCP resin’s light weight, good
impact resistance and superior thermal resistance. DCP resin
has been adopted for making body panels for trucks, buses,
construction machinery and agricultural machinery. In addition,
because of its outstanding water resistance and chemical resistance, DCP resin has a long, impressive track record of use inenvironmental-related fields, including utilization in the manufacturing of seawater pump casings.
Progress is also being made in the development of precision

23

Zeon Group

Corporate Repor t 2021

materials applications for DCP resin, including electrical andelectronic components, and high-wavelength components. As
DCP resin supports adhesion with filler material, fiber andmetals, it is anticipated that a wide range of further applications
can be developed.
By making effective use of DCP resin’s strengths— (1) Low
lifecycle cost, resulting in lower CO2 emissions, (2) Light weight,
resulting in lower fuel expenditure, (3) Ease of working, resulting in lower energy consumption, (4) Potential for the development of new applications that make effective use of DCP’s
special characteristics, and (5) Recyclability—the RIM Business iscontributing toward the realization of the SDGs. Looking ahead
to 2030, Zeon will be promoting the RIM Business based on thegoals of achieving steady growth through the expansion of
global market share in the body panel segment, and realizing
high revenue through the development of a solutions businessthat effectively utilizes DCP resin’s special features.

February 24, 2021

Zeon Corporation has begun full-scale development of battery separator
adhesive that will help to increase the lifespan and reduce the cost of lithium-ion batteries. Applying this product to battery separators makes it possible
to maintain the correct distance between electrodes, thereby contributing
toward enhanced battery lifespan. The new product also provides numerous
benefits in the battery production process, which will make a substantial
contribution toward improving the productivity of battery manufacturing.

Zeon commercializes new crystalline Cyclo Olefin Polymers

February 17, 2021

Cyclo Olefin Polymer (COP) normally has a non-crystalline structure. By giving
COP a crystalline structure, Zeon Corporation’s new ZEONEX®C2420 productretains the low water absorption, low conductivity, and low dielectric loss
tangent of conventional COP, while also providing unprecedentedly highthermal resistance, chemical resistance and elasticity. By making effective useof these properties, it should be possible to expand the applications of COP to
include brand-new items.

March 25, 2021

Leaf alcohol (cis-3-Hexenol) is a synthetic aroma chemical that has the scent ofyoung green leaves. It is widely used as a fragrance in perfumes, shampoo andsoaps, and as a flavoring in products such as soft drinks and confectionery.
Zeon Corporation holds the highest global market share in the production ofleaf alcohol, and as this is a market that is forecast to maintain steady growthin the future, Zeon has decided to increase its production capacity. Once
construction of the related production facilities is completed in autumn of2022, leaf alcohol production capacity is scheduled to rise by over 30%.

Zeon launches an IABP balloon catheter with optical sensor

November 26, 2020

Zeon Medical Inc. has added an optical sensor to its Intra-Aortic Balloon
Pumping (IABP) balloon catheter product. This makes Zeon Medical Inc. thefirst Japanese company to introduce an optical sensor equipped IABP system.
The use of the optical sensor reduces delay when performing measurements,
and is expected to lead to improvement in treatment outcomes.

Zeon launches a new FFR system

Butadiene rubber made using the new technology

https://www.zeon.co.jp/en/business/enterprise/nanotube/

RIM Business

Zeon to boost production capacity for leaf alcoholAugust 3, 2020

Zeon Medical Inc. has launched a new-generation FFR system for performing
Fractional Flow Reserve (FFR) measurement. The new device embodies asubstantial improvement in connectivity with other diagnostic devices, andprovides more convenience in terms of allowing flexible adjustment to suit theoperating environment. The adoption of a 15-inch high-luminance LCD display
with touch control capability makes for intuitive, stress-free operation.

Zeon launches a new positive-tone photosensitive
insulating dielectric

July 17, 2020

Zeon Corporation has launched a new alkaline-developable positive-tone photosensitive insulating dielectric, with special features that include low-temperature
curing capability, high resolution, and high insulating reliability. With the trend
for semiconductor devices to become miniaturized and more highly integrated,
this product can contribute toward improving yield and reliability.

“Explore” new businesses
Developing conductive silicon rubber that makes useof single-walled carbon nanotubes
January 20, 2021

Zeon Corporation’s newly-developed silicon masterbatch contributes provides
conductivity by mixing single-walled carbon nanotubes with silicon rubber. The
aim is to develop applications for compounds made using this material in
medical devices used to ease the symptoms of conditions such as Parkinson’s
disease and essential tremor (ET) disorder that cause the body to tremble. Zeonis pursuing joint research in this area with U.S. company Novation Solutions LLC.

Zeon launches a solar card design device LNES SL-02

November 26, 2020

Zeon Corporation has been implementing “project LNES” since 2016. LNES®
SL-02 utilizes SOLAR CARD™, which was developed using Zeon’s plastics technology and nanotechnology fusion capability. It provides five types of lighting
function and a spot-type charging function.

Zeon’s RIM Business is handled by RIMTECH Corporation.
http://www.rimtec.co.jp/en/

Using ZEONEX®C2420 in flexible substrate
for millimeter-wave radar antenna

24

Contributing to the Realization of the SDGs throughOur Business Activities
Management
Moving beyond ISO 26000 to promote
SDGs-based sustainability

from FY2021, we are aiming to realize our Vision for 2030

Up until FY2020, the Zeon Group implemented CSR initiatives

Medium-Term Business Plan, and we will be formulating andin accordance with a CSR Implementation Plan that was

implementing a new Sustainability Promotion Plan.

through SDGs-oriented initiatives that are outlined in our new

based on ISO 26000, the international CSR standard. StartingISO 26000 based

Objectives outlined by

SDGs-based

CSR Implementation Plan

the new Medium-Term Business Plan

Sustainability Promotion Plan

Setting the main SDGs-related targets

that our company will focus on. We aim to realize our Vision

Zeon’s new Medium-Term Business Plan has identified ninefor 2030 through SDGs-oriented initiatives.

SDGs that are closely related to our business activities as SDGs

Sustainability Managementa central role in sustainability promotion and management,

In order to transform our business activities in such a way thatand the Legal Affairs and Quality Assurance departments,

they are oriented toward achieving the targets set in the newwhich were formerly under the CSR Headquarters, have been

Medium-Term Business Plan and toward sustainability promo-

moved to a new Legal & Compliance division, thereby enhanc-tion, we undertook a large-scale organizational restructuring

ing the objectivity of each function. We have also set up a newin April and July of 2021.

IR & SR office, with the aim of further expanding dialog and

For example, we established the Carbon Neutral Endeavorcommunication with investors and shareholders.

office, reporting directly to the President, to promote the for-As before, the CSR Conference, which is chaired by themulation and implementation of strategies and concrete plans

President, exercises general oversight over sustainability pro-for realizing our goal of becoming carbon neutral by 2050.

motion, and reports to the Board of Directors as necessary.
Going forward, we will continue to explore ways to make our

We have also established a new Incubation Center
under the Research & Development Center, as a dedicatedorganization and management systems more effective, to liveorganization for new product development and the incubation

up to the expectations of today’s constantly changing society.

of new businesses.
In addition, our existing CSR Headquarters has been repo-

Corporate Profile: Organizational Chart
https://www.zeon.co.jp/en/company/profile/sitioned as the Corporate Sustainability Headquarters, to play

The relationship between the new Medium-Term Business Plan and the SDGs that Zeon is focusing on
SDGs

New
Medium-TermBusiness Plan●

The SDGs that the new Medium-Term Business Plan focuses on
Directions for 2030
(what we want to be)

Vision for 2030

Living up tosocietal expectations

Strategies

Key Policies (2021–22)

Targets for 2030

Continuing to contribute to asustainable society

1 Promote a transformation ofmonozukuri to realize a carbon
neutrality and circular economy

Formulate a master plan for achievingcarbon neutrality looking toward theyear 2050

To be set based on published guidelines
including those of the Japan Chemical
Industry Association

Providing products and services
indispensable to society

2-1 “Polish up” existing businesses

Strengthen COP

Sales ratio of products that
contribute to the SDGs:

50%●

Living up to
the aspirations of
employees

25

Zeon Group

Take vigorous action with the steps“Let’s try first,” “Let’s connect,” and“Let’s polish up”

Corporate Repor t 2021

3 Work together to create “stages”
to be active on●●

Ensure the survival of existing SBUs

ROIC for existing businesses:

9.0%

●

Focus resources on key areas

Net sales of new businesses:+60.0 billion yen(compared to FY2019)●

Build a digital infrastructure to create
value for customers

I. Build a digital infrastructure
II. R
 eform corporate management andbusiness management
III. Create customer value

Provide a greater variety of life choices

Employee engagement:
Ratio of foreign-nationaland female directors:

75%
30%

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

Strengthen battery materials

2-2 “Explore” new businesses

●

●

●

●

●

●

●

●

●

●

●

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●

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●

●

●
●

26

Products and initiatives that contribute toward the realization of the SDGs 1
SDGs Goal 3

Good health and well-being

SDGs Goal 7 Affordable and clean energy
SDGs Goal 13 Climate action

Zeon’s products are used as materials and components, and contribute toward people’s health across a wide
range of settings.

By helping to enhance the performance of our customers’ products, Zeon’s products arecontributing toward the widespread adoption of energy-saving and clean energy initiatives in society, and toward responding effectively to climate change.

Zeon’s products are usedas materials and components

Functional enhancement ofend products and developmentof new usage applications

Contributing to the healthof large numbers of people

Zeon’s products are usedas materials and components
in various products

Functional enhancement ofend products and developmentof new usage applications

Contributing toward energy
conservation and toward
the response to climate change

Synthetic latex for use in gloves, which contributes
toward infection prevention

Providing medical equipment and devices that reducethe burden on medical professionals and patients

Supplying materials and components forelectric vehicles

Substitutes for CFCs

The synthetic latex that Zeon provides for making gloves is

In the past, Zeon developed a sufficiently in-depth knowledge

With the widespread adoption of hybrid vehicles and electricchlorofluorocarbons (CFCs) and solvents, which, in relative

used in medical gloves, and has contributed to infection pre-of the human cardiovascular system to be able to commercial-

vehicles throughout the world, there is a need for large quanti-terms, have a greater global warming effect than carbon diox-

vention during the COVID-19 pandemic. It is widely used as aize an auxiliary artificial heart product. Today, we utilize thisties of batteries with high performance and superior durability.

ide (CO2) emissions. By developing and supplying fluorinatedglove material because gloves made from synthetic latex are

expertise in the manufacturing of stents and balloon cathe-

Zeon’s binder materials and functional layer materials forsolvents and oxide film etching gases that can be used as sub-less likely to cause protein allergies.

ters. The performance and functionality of the FFR system thatlithium-ion batteries, and our battery seal materials, are con-stitutes, Zeon is contributing toward mitigating global warming.

Zeon has developed for use in coronary artery diagnosis andtributing toward realizing more efficient use of electric power

treatment has been highly praised by medical professionals.

by improving battery performance.

Semiconductor manufacturing processes require the use of

Zeon has also developed pad-type thermal interface material, which is made by combining single-walled carbon nanotubes (SWCNT) with rubber, and which is contributing toward
the realization of the high-performance power semiconductors needed for effective electric vehicle control.

Contributing to remote business
Optical film made from Cyclo Olefin Polymers using Zeon’s
unique technologies contributes toward enhancing display

Providing materials for the healthcare sector
Cyclo Olefin Polymers have superb properties—on a par withquality through various properties such as superior trans-

are also lightweight and resistant to wear, which reduces theUsing single-walled carbon nanotubes (SWCNT) for
medical devices

Development of synthetic rubber for
fuel-efficient tires

burden on medical professionals, and as a result they have

In January 2021, Zeon successfully completed the develop-

When developing tires, making tires more fuel-efficient

come into widespread use.

ment of a masterbatch that substantially enhances the electri-

through improved rolling resistance needs to be balanced

cal conductivity of silicon rubber, by integrating SWCNT into

against the need for superior grip in bad weather whensilicon rubber. The aim is for compounds made using thisroads are wet and against the need for wear resistance. The

masterbatch to be utilized as components in medical devices

solution-polymerized styrene-butadiene rubber (S-SBR) thatused to mitigate the symptoms of Parkinson’s disease, etc.

Zeon provides is used mainly for tire grooves, and makes athose of glass—for making medical containers. The containers

parency, and thus helps to support the development ofvarious types of remote business, including teleworking anddistance learning.

significant contribution toward enhancing tire fuel economy.

27

Zeon Group

Corporate Repor t 2021

28

Products and initiatives that contribute toward the realization of the SDGs 2
SDGs Goal 12

Responsible consumption and production

Zeon’s products contribute toward reducing society’s consumption of resources by helping to enhance theperformance of customers’ products.

SDGs Goal 9

Industry, innovation and infrastructure

Zeon’s corporate philosophy embodies the concept of contributing to the world through the development ofworld-class, innovative technologies. Zeon successfully developed ways of utilizing the C4 and C5 fractions ofpetroleum, which in the past had been seen as waste products of petroleum processing, and this has generated a wide range of useful products. Going forward, we will be moving beyond crude oil derived products,
utilizing the technological base that we have accumulated over the years to make further contributions toZeon’s products are usedas materials and components

Functional enhancement ofend products and developmentof new usage applications

Contributing toward the
reduction of resource usage
over the product lifecycle

Highly-durable rubber for vehicle components

the new society that is now emerging.

Provision of technology services in Southeast Asia,
China and India

Support Laboratory, which was established in Singapore in

The manufacturing of tires and other high-performance

ASEAN region and in India.

rubber products involves the utilization of multiple different

The rubber that Zeon produces for use in vehicle components

materials requires a wide range of specialist expertise. As a

Investment in a venture capital fund specializingin the medical sector

manufacturer that supplies high-performance rubber materi-

Zeon Medical Inc. has invested 500 million yen in a fund estab-als, Zeon provides technology services to help local rubber

lished by MedVenture Partners, Inc., a venture capital firmcomponents manufacturers utilize our products effectively so

specializing in investment in the medical device sector. Thisthat they can gain maximum benefit from the superior perfor-

investment will help Zeon to access useful information, andmance of Zeon’s products.

will also enable us to collaborate on the cultivation of newmaterials in combination, and the process of combining thesehas many outstanding properties, including good heat resistance, oil resistance, and mechanical durability, etc., and isused in many different ways.
This high performance improves the lifespan of both thecomponents themselves and the vehicle as a whole, thereby
contributing to a reduction in the quantity of resources consumed over the product lifecycle.

2017, are helping to support industrial development in the

The technology services provided by Zeon’s Asia Technicalmedical startups.

Renewing our organizational cultureWith the aim of fulfilling our Vision for 2030 of becoming “a company that lives up to the aspirations of employees,” in FY2021–2022 we are focusing on putting in laying the foundations needed
to “provide a greater variety of life choices.” Our target for 2030 is to achieve an employee engagement rate of 75%.

Support for medical check-ups
and vaccinations

Support for childcare andnursing care

Cafeteria Plan

Extending the lifespan of lithium-ion batteries
that contain rare metals

Research on the use of biomass material as
raw material

Some of the rare metals used as raw materials for the manu-

Zeon has been undertaking research on how to use renewablefacturing of lithium-ion batteries have aroused concerns

biomass-derived material as raw material for product manu-

regarding extraction methods that have a high environmental

facturing, instead of raw material from fossil fuel sources. In

footprint, safeguarding of workers’ human rights, etc. By

April 2021, Zeon announced the development of a new tech-enhancing the performance of the components that we

nology for creating butadiene from biomass, realized throughsupply, Zeon is contributing toward giving lithium-ion batteriescollaborative research with RIKEN and Yokohama Rubber.

a longer lifespan, which in turn contributes indirectly toward

Similarly, with regard to isoprene, which is also a raw material

reducing the quantity of rare metals used.

for synthetic rubber manufacturing, in 2018 Zeon succeeded
in synthesizing isoprene from biomass. In the future, we will

Working styles unconstrainedby time or location
Open recruitment projects

Well-being

Career design
Recurrent education

Support for workplace dialogue
and associations
Side job
Deepen D&I

Volunteering

FreedomStrengthen
engagement

A circumstance providing a greater variety of life choices

continue with technology development aimed at the successful commercialization of these new technologies.

Health management

In October 2021, Zeon formulated a Health Management Strategy with the aim of promoting employee well-being.

29

Zeon Group

Corporate Repor t 2021

30

TCFD-based Analysis and Reporting
Expressing support for the TCFD recommendations
In August 2020, Zeon Corporation expressed its support for
the recommendations made by the Task Force on Climate-Related Financial Disclosures (TCFD).
Going forward, we will be aiming to strengthen our management fundamentals, as well as to help realize a sustainable
society and enhance Zeon’s corporate value, by undertaking
analysis of the risks and opportunities that climate changepresents for our businesses and reflecting this analysis in ourmanagement strategy.
This initiative is also reflected in our group-wide strategy of“Promoting a shift to monozukuri manufacturing that will
enable Zeon to become carbon-neutral and help to realize thecircular economy,” which forms part of our new Medium-Term

4 Future direction and response strategy

Business Plan, and we will be formulating a master plan forachieving carbon neutrality, looking ahead toward 2050.
2020

Support for TCFD announced
Implementation, on a trial basis, of analysis of the
impact on Zeon’s rubber business of the 2℃ and 4℃
climate change scenarios

2021

Implementation of Risk Severity Evaluation application trials
for businesses other than the rubber business.

* Implementing units: Business divisions (Energy Materials and Specialty
Plastics), indirect departments (Raw Materials and Production Technology),
and plants (Kawasaki Plant)

Reflection of certain elements in the new Medium-TermBusiness Plan

2022

Zeon views climate change as a key issue, and progress management and reporting in regard to related targets is undertaken by the Environmental & Safety Affairs Committee.
In addition, a new unit, the Carbon Neutral Endeavor office, hasbeen established which reports directly to the President. It undertakes concrete plan formulation and implementation in order for
Zeon to realize the goal of becoming carbon neutral by 2050.

Strategy
Overview

Climate change scenario analysis has been implemented on a
trial basis with respect to Zeon’s rubber business, using thefollowing steps.
1. Assess materiality of climate-related risks
2. Identify and define range of scenarios
3. Evaluate business impacts
4. Identify potential responses
It was decided to use the rubber business as the targetof scenario analysis because this is a core business for Zeon,with a wide-ranging supply chain.
1 Assess materiality of climate-related risks(Identification of risks and opportunities)

Making use of the TCFD Recommendations Technical Supplements, SASB standards and other external resources, risks andopportunities that will be important to Zeon’s businesses overthe short to long term have been identified, and evaluated on
the basis of both internal discussion and discussion involving
external parties (see table on the next page). Transition risks
that were identified included CO2 emissions costs (including
carbon tax, etc.), changes in customer mobility due to theadoption of electric vehicles, etc., and rising raw materials
procurement costs and utility costs.
Physical risks included flooding of worksites and the
supply chain resulting from climate change, and damage toworksites and the supply chain caused by the increasing incidence and severity of abnormal weather events.
31

Zeon Group

Corporate Repor t 2021

Risk management

Regarding climate-related risks, we will be establishing a dedicated unit for this, and will be taking steps to identify these risks.

Metrics and targets

We use CO2 emissions as an indicator for the management ofclimate-related risks and opportunities. By 2020, we aim tohave reduced CO2 emissions by 20% compared to 1990, andwe will be implementing measures to reduce energy consumption and realizing a shift in fuel usage away from heavy
fuel oil toward natural gas.

Group-wide reflection in the new Medium-Term Business Plan

Rubber business scenario analysis—Risk Severity Evaluation results
Evaluation item

Type ofrisk

Disclosure of Zeon’s Response to TCFD Requirements
Governance

Going forward, having examined the scenario analysis results,
we will be striving to strengthen our decarbonization strategy,
in relation to carbon tax, and our resource strategy, in relation
to raw materials procurement.
Regarding the decarbonization strategy, we will be undertaking group-wide examination of policies aimed at making
Zeon carbon neutral. With regard to the resource strategy, we
will be promoting the circular economy and proceeding with
development of products that make use of biomass as raw
material. We will also be aiming to expand our businesses by
undertaking product development and product portfolio management based on assumptions regarding changes in customers’ mobility habits.

Transition

PhysicalBusiness impact evaluation results for the rubber business
Under the 4℃ scenario

OperatingincomeCarbontax

Raw
Adjustedmaterials earnings
procurement

Under the 2℃ scenario

OperatingincomeCarbon Widespread Adjusted
tax
adoption earnings
of EVsObservations on the potential impact on business (qualitative information)
Observations: Risks

Observations: Opportunities

Increased opportunities for sale ofproducts that contribute toward
reducing emissions(resulting in increased sales)

Changes in
raw materials
procurement costs

Rising raw material prices(resulting in increased operating costs)

Rising raw material prices(resulting in decreased operating costs)

Changes inutility costs

Rising energy prices(resulting in increased operating costs)

Increased demand for energy(resulting in increased sales)

Reputation

Changes incustomer behavior

Worsening reputation of the company’s
products and of the company itself(resulting in reduced sales)

Increased product sales opportunities
relating to the company’senvironmentally-friendly products(resulting in increased sales)

Acute

Increasing
seriousness ofabnormal weather
conditions

Disruption caused to operations bysevere natural disasters(resulting in reduced sales andincreased operating costs)

Reduced production of natural rubber
due to changes in rainfall patterns(resulting in increased sales)

Industry/
Market3 Evaluate business impacts (impact on financial planning)

The anticipated financial impact on Zeon’s business was analyzed for the 4℃ scenario and the 2℃ scenario. Under the 4℃
scenario, it was anticipated that earnings would fall due to theimpact of physical risks and increased procurement costs.
Under the 2℃ scenario, it was anticipated that earnings would
fall due to the adoption of carbon tax and the widespread
adoption of electric vehicles, which would have a major impact
on the company’s business.

Sub-category

Adoption of carbon taxes(resulting in increased operating costs)

Policy/Legal

2 Identify and define range of scenarios

Based on the transition risks and physical risks identified forthe rubber business, we determined the overall global picture for the 4℃ scenario and the 2℃ scenario.
Anticipated global picture for the 4℃ scenario
		A trend toward adopting a “wait and see” attitude to theneed to achieve a low-carbon or post-carbon societyleads to high physical risk, in terms of flooding, etc.
Anticipated global picture for the 2℃ scenario
		Aggressive promotion of decarbonization, adoption ofcarbon taxes and an accelerated shift toward renewableenergy and the use of electric vehicles lead to an increased
need for the reduction of emissions from businesses andfor the implementation of product portfolio adjustments.

Category

Carbon pricing
and carbon tax

Importance

Major

Major

Major

Major

Index of Disclosure Relating to TCFD Recommendations
GovernanceRisk managementa) B oard’s oversight of climate related risks and opportunities

P.31b) Management’s role in assessing and managing climate-related risks and opportunities

P.1

Strategya) P rocesses for identifying and assessing climate-related risks

P.32b) Processes for managing climate-related risks

P.32

c) H
 ow processes for identifying, assessing, and managing
climate-related risks are integrated into the organization’s
overall risk management

P.32

Metrics and targetsa) C limate-related risks and opportunities the organization has
identified over the short, medium, and long term

P.31

a) M
 etrics used by the organization to assess climate-relatedrisks and opportunities in line with its strategy and risk
management process

P.32b) Impact of climate-related risks and opportunities on theorganization’s businesses, strategy, and financial planning

P.31b) Scope 1, Scope 2, and, if appropriate, Scope 3 greenhousegas (GHG) emissions, and the related risks

P.12

c) R
 esilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C
or lower scenario

P.31

c) T
 argets used by the organization to manage climate-relatedrisks and opportunities and performance against targets

P.32

32

Directors and Officers

More detailed information can be found in the Corporate Governance Report (Japanese version only).
https://www.zeon.co.jp/news/assets/pdf/210630.pdf

A total of six directors, including three outside directors, have been appointed since the general meeting of shareholders at theend of June 2021.

Directors

Audit & Supervisory Board Members (External)

President and CEO

Director & Senior Corporate Officer

Director & Corporate Officer

Kimiaki Tanaka

Hiroyuki Hirakawa

Kazuyoshi Matsuura

ProfileApril 1979 Joined Zeon
June 2005 Zeon Director
June 2007 Zeon Director and Corporate Officer
June 2011 Zeon Director and Senior Corporate Officer
June 2012	Zeon Director and Executive Corporate Officer
June 2013 Zeon President (current)

ProfileApril 1981 Joined Zeon
June 2008 Zeon Corporate Officer
June 2009 Zeon Director and Corporate Officer
June 2015	Zeon Director and Senior Corporate Officer(current)

Elastomers and Chemicals Business

Administration
Division Manager – Human Resources
General Manager – Human Resources
General Manager – China Business Administration
Director – TOHPE CORPORATION

Akio Kohri

Nobutake Nishijima

Adviser – ADEKA CORPORATION

Hiroki Kimura

President – Asahi Mutual Life Insurance Company

Corporate Officers

ProfileApril 1993 Joined Zeon
June 2008 Zeon Corporate Officer
June 2019 Zeon Director and Corporate Officer (current)

Outside Directors

Senior Corporate Officer

Senior Corporate Officer

Corporate Officer

Corporate Officer

Corporate Officer

Tetsuya Toyoshima

Yoshiyuki Sone

Erisa Watanabe

Tomoyuki Kose

Makoto Watanabe

Corporate Officer

Corporate Officer

Corporate Officer

Corporate Officer

Corporate Officer

Takafumi Kawanaka

Tsutomu Eguchi

Satoshi Tominaga

Yoshinobu Oi

Yuichiro Konishi

Corporate Officer

Corporate Officer

Hiroshi Yamamoto

Kazuo Nakajima

Research & Development
Division Manager – Research &Development Center

Takao Kitabata

Outside Director – Kobe Steel, Ltd.

Tadanobu Nagumo

Senior Advisor – The Yokohama Rubber Co., Ltd.

Audit & Supervisory Board Members

Audit & Supervisory Board Member

Takeo Furuya

Sachio Hayashi

Zeon Group

Corporate Repor t 2021

Managing Director – Zeon Kasei
Co., Ltd.

Plant Manager – Mizushima
Plant

Board Member, Co-Founder, Chief Medical Officer,
GP – MedVenture Partners, Inc.

Division Manager – Production
Center33

Corporate Sustainability
Division Manager – Corporate
Sustainability
General Manager – CSR

Fumiaki Ikeno

Production and Engineering
Technology
General Manager – Production
Administration

Audit & Supervisory Board Member

Specialty Business
Division Manager – Specialty
Components
President – Zeon Korea Co., Ltd.
President – Zeon CSC Corporation

Division Manager – Corporate
Administration

Division Manager – Legal &Compliance
General Manager – Legal
Affairs

Division Manager – C5 Chemicals

Senior Corporate Officer– Tokyo Zairyo Co., Ltd.

Division Manager – Specialty
Plastics
President – Zeon Opto Bio Lab
Co., Ltd.

34

Governance

PDF

Corporate Governance Report ( Japanese version only)
https://www.zeon.co.jp/csr/concept/pdf/200325073.pdf

PDF

Corporate Governance

Basic Policy on Corporate Governance ( Japanese version only)
https://www.zeon.co.jp/csr/management/pdf/200281514.pdf

Basic Policy on Corporate Governance

2 Executive Committee

In accordance with the auditing guidelines established by the

The Executive Committee, in accordance with the Executive

Audit & Supervisory Board, each member audits directors’monitoring and disclosure of business activities and their effects.

Committee Rules, comprises the President and executive offi-

execution of their duties through various means, such as

Zeon aims to increase profits and enhance corporate value on

We appointed three outside directors and three external

cers ranked senior corporate officer or above and meets twice

attending Board of Directors meetings and monitoring busi-

an ongoing basis while respecting and balancing the various

Audit & Supervisory Board members who are independent witha month in principle to examine and make decisions on

ness operations, including subsidiaries’ operations.

interests of its shareholders and other diverse stakeholders.

the expectation that they will monitor management from an

important business matters after due deliberation involving

To this end, we are continuing efforts to build a system thatexternal perspective.

consultation with attending full-time Audit & Supervisory

We believe that the current system is optimal for achieving

enables efficient and sound corporate management through4 Director and Officer Nomination and

Board members. Important business matters stipulated in theCompensation Committee

both timely and efficient decision-making and business execu-

Board of Director Rules are examined and decided by the

The Director and Officer Nomination and Compensation Com-

Maintaining a system of corporate governance allows us totion and effective management monitoring and supervision by

Board of Directors.

mittee is positioned as an advisory organ to the Board ofclarify the functions and roles of each body and company organi-

independent outside officers from an external perspective andzation and to carry out rapid decision-making and execution. We

that our corporate governance is functioning effectively.

corporate governance.

are also improving corporate transparency through appropriate

Corporate Governance System

Directors for the purpose of strengthening the objectivity and3 Audit & Supervisory Board

transparency of the Board of Directors functions related to

The Audit & Supervisory Board comprises five members,

nominating directors and officers and deciding their compen-including three external members. The Board reports, dis-sation. The committee is composed of four members, of which

cusses, and adopts resolutions on important business matters.

three are independent outside directors.

Policy on the distribution of profit

nance, with advice given by the Director and Officer Nomination

Our basic policy is to pay out steady dividends of excess earn-

and Compensation Committee, a recommendation by the Rep-

ings to shareholders.

resentative Director, and a decision by the Board of Directors.

General Meeting of Shareholders
Decisions/Supervision(appointments/dismissals)
RequireadviceDirector and1
Officer Nomination
4 and Compensation
Suggestions
Committee

Collaboration

2

Executive
Committee

Auditing

Board ofDirectors(Appointments/dismissals)(Appointments/dismissals)

Collaboration (assistance)

3

Decisions/Supervision(selections/dismissals)

Audit &
Supervisory
Board(Dismissals)

Financial Auditors
Collaboration

Auditing

Auditing Personnel

Financial
AuditsBusiness Execution&
Internal Controls System

Representative
Director

Reporting

Department ofInternal Auditing

CSR Conference
CSR Basic Policy
Committee

Risk Management Committee

Reporting(external)

Compliance Committee

External lawyers

Information Management
Committee

Internal
auditsEnvironmental and
Safety Affairs Committee

Reporting(internal)

Quality Assurance Committee
PL Committee

Reporting(internal)

Reporting(external)

Reporting(external)

1 Board of Directors

duties, the role of the Board of Directors is to make import-

The Board of Directors meets, in principle, every month withant decisions about basic management policy, strategy, andAudit & Supervisory Board members in attendance to ensure

other aspects of business execution. As of July 2021, thecompliance with applicable laws and the Articles of Incorpora-

Board of Directors consists of six directors, including threetion in the execution of business. In addition to its statutory

outside directors.

35

Zeon Group

Corporate Repor t 2021

an act violating company policy either intentionally or throughGeneral Meeting of Shareholders decides the year-end divi-gross negligence, or other reason that is cause for dismissal ofdend amount, and the Board of Directors decides the interim

the director or officer as provided in internal company regula-dividend amount. Retained earnings are leveraged for proac-

tions, the Board of Directors deliberates the case and dis-

tive capital investments, development of innovative technolo-

misses the director or officer concerned based on thegies, and production innovations.

Companies Act and other legislation.

Director and officer compensation

Evaluating the effectiveness of the board of directors

We use a performance-based compensation system as one

Questionnaires are conducted for directors including outside

type of healthy incentive to achieve sustained growth. Individ-

directors and auditors about the operations of the Board ofual compensation is decided by the Representative Director

Directors. Questionnaire responses are analyzed and evalu-

after receiving the advice of the Director and Officer Nomina-

ated by a third-party outside lawyer entrusted to perform thetion and Compensation Committee.

task, who has provided the opinion that our Board of Directors

Appointment and dismissal of directors and officers

operates with a high degree of overall effectiveness.
We currently position increasing the diversity of directors

Nominations of candidates for directors and auditors andas an issue to be addressed. As indicated by the target in theappointments of corporate officers are made based on the

new Medium-Term Business Plan, we are working to increase

requirements provided in the Basic Policy on Corporate Gover-

the ratio of non-Japanese or female directors to 30% by 2030.

Directors and officers

Business divisions, indirect departments, laboratories, and plants

Subsidiaries and affiliates

In the case of committing a serious violation of the law, or

twice annually, through interim and year-end dividends. The

Compensation system

Public Relations Committee

Control/monitoring

In principle, Zeon Corporation distributes excess earnings

Compensation structureInternal Directors

Fixed-amount cash compensation

Performance-based cash compensation

Corporate Officer

Fixed-amount cash compensation

Performance-based cash compensation

Outside Director

Fixed-amount cash compensation

Restricted stock compensation system

Compensation amount
Directors and officers

Total amount of compensation

Internal Directors(7 directors)

350 million yen (breakdown: cash compensation (fixed amount): 57 million yen, cash compensation (performance-based): 147 million yen,transfer-restricted stock-based compensation: 25 million yen, retirement bonus: 121 million yen)Internal Audit & Supervisory
Board Members (2 members)

53 million yen

External Officers(7 officers)

47 million yen (breakdown: cash compensation (fixed amount): 44 million yen, retirement bonus: 3 million yen)36

Corporate officer skills and diversity

corporate managers and persons with administrative experi-

The Board of Director comprises a diverse range of directors

ence, and to ensure the effectiveness of independent andwith different backgrounds of knowledge, experience, exper-

objective management supervision by the Board of Directors,

tise, and so on, and the number of directors is limited to 15 inZeon appoints several independent outside directors who areaccordance with the Articles of Incorporation from the per-not involved in the execution of business.

spective of maintaining an appropriate size to ensure thoroughBelow is a list (a skills matrix) of the skills that members ofdeliberations and prompt and reasonable decision-making as

the Board of Directors should have in light of the Group’s man-an organizational body. In addition, in order to appropriately

agement strategies and the combination of skills (up to threereflect in the company’s management policies, the opinions offor each director) that each director possesses and that thepersons with extensive experience and insight, such as outsidecompany particularly expects that director to demonstrate.

Managerial
experience

DigitalInternational transformation
perspective(DX)

Productionand SCM●

Kimiaki Tanaka, President & CEO
Hiroyuki Hirakawa,Kazuyoshi Matsuura,

Takao Kitabata, Outside Director●●

Tadanobu Nagumo, Outside Director
Fumiaki Ikeno, Outside Director●●

President, Asahi Mutual Life Insurance Company●●●

Hiroki Kimura●●

Director & Corporate Officer

Audit & Supervisory Board Member (External)

Marketing Human resource ComplianceR&D
and business development
and risk
Finance
Sustainability
and innovation development
and D&I
management and accounting
and ESG●●

Director & Senior Corporate Officer

Outside Perspective

●

●

●
●

●

●

Audit & Supervisory Board Member Kimura, who has been a member sinceJune 2020, commented on Zeon’s corporate governance.
One year has passed since I was appointed as an external Audit & Supervisory Board member at
the General Meeting of Shareholders in June 2020.

Constructive dialogue with shareholders

individual meetings, such as participating in company brief-

The IR & SR office manages dialogue with shareholders, whichings for individual investors.

is overseen by the corporate officer in charge of the Adminis-

When a General Meeting of Shareholders is convened, a

trative Headquarters. Accurate, impartial information is pro-

notice of convocation is issued 22 days before a regular meet-

vided in a timely manner. We continue to hold briefings for

ing, and we have established a system to enable shareholders

investors quarterly, expand the materials released on our

to exercise their voting rights online.

website, and increase opportunities for dialogue apart fromI have attended meetings of the Board of Directors and the Audit & Supervisory Board, where I
gained a renewed sense of the high level of the Zeon Group’s technology development capabilities
and originality.
Today, I have attended 13 meetings of the Board of Directors (as of June 2021). In addition toregular deliberations and reports, major management issues, such as the new Medium-Term Business Plan, responses to climate change, and medium- to long-term personnel strategies are
addressed as topics for active discussion. The external officers also actively present their opinions
and provide guidance from different, outside perspectives, and I gained the impression that theBoard of Directors is gaining new energy.

Risk Management

Audit & Supervisory Board members are entrusted by the shareholders to audit the execution

The Risk Management Committee promotes Zeon’s risk man-Internal reporting systemagement. Activities to prevent legal violations and ensure

We have implemented an internal reporting system at Zeon tolegal compliance are conducted under the Compliance Com-gather information about potential risks at an early stage andmittee. The Information Management Committee promotes

make it easier to address them. In addition to our internal report-

the appropriate management of information from when it ising line, we have also set up a reporting line with outside lawyers.

received to when it is destroyed.

The Risk Management Committee investigates the facts ofreports that are made and responds as appropriate, such as
by instructing the internal organization to implement countermeasures based on the results of the investigation.

Internal reporting flowchartan external Audit & Supervisory Board member, I am required to perform my duties from an outside, that is, independent and neutral, perspective. I am involved in the management of a life
insurance company, and I hope to perform my duties from an outside perspective that differs fromthe perspectives of the chemical industry.
My request to Zeon so that I can fully perform the functions of an external Audit & Supervisory
Board member in the future is to continue to provide adequate information concerning the company’s business and other matters. When the COVID-19 pandemic is brought under control, I lookforward to opportunities to observe plants and other work sites and communicate with various
different employees.
The new Medium-Term Business Plan adopts a clear position that each and every employee must

Internal

Superiorof business by the directors from an independent and objective perspective. I understand that as

be involved as an active player in achieving the corporate philosophy of “contributing to the pres-External

Risk Management Committee

External lawyer reporting line

Review of facts and implementationof countermeasures

Receive report, record facts,
notify of result

ervation of the Earth and the prosperity of the human race.” I believe that this corporate philosophy
is closely connected to the Vision for 2030, i.e., “a company that lives up to societal expectations andthe aspirations of employees,” and also to the Core Values of “Let’s try first,” “Let’s connect” and “Let’spolish up.” Group-wide strategies for achieving the Vision for 2030 have been extensively discussed
internally, and I hope that the Zeon Group as a whole will move in the direction that we seek.
In addition, I hope that the company will achieve its vision of living up to societal expectations

Whistle-blower
Discovery of risks
Discovery of compliance violations

37

Zeon Group

Corporate Repor t 2021

Compliance Hotline
Report or notification
Feedbackby providing products and services that society cannot do without through the enhancement ofexisting businesses and the search for new businesses as well as by advancing efforts to becomecarbon neutral, which is a global issue, for the creation of value over the medium- to long-term.
38

Online disclosure by Zeon Corporation
Websitehttps://www.zeon.co.jp/en/

Company Information
https://www.zeon.co.jp/en/company/
Corporate profile, Group information, etc.
Investor Relations
https://www.zeon.co.jp/en/ir/
Financial data, factbooks, etc.
CSR

https://www.zeon.co.jp/en/csr/
Corporate Report, CSR Report, Site Reports, etc.

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

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supporting sound forest management.