CORPORATE REPORT 2014

CONTENTS
Message

2

Profile of ZEON

3

Surprisingly ZEON

5Interview with the President

7

Business and Strategy

11

Elastomer Materials Business

11

Specialty Materials Business

13

Other Business16

Research and Development (R&D)

17

Production Management and Safety

19

Highlight 1
Global expansion starting in Asia

21

Highlight 2Creating corporate culture via Torchlight (taimatsu) activities 23
Strengths Supporting our Businesses

25

Human Resource Development

25

Safety Initiatives

25

Environmental Initiatives

26

Quality Initiatives

26

Social Contribution Initiatives

27

CSR Implementation Plan

29

Corporate Governance

31

Risk Management

31

Data Highlights

33

Major Sales & Production Bases

35

Group Company Data

37

ZEON Group History

39

Corporate
Philosophy(Established
April 1997)

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

●We will ensure compliance and meet society's

needs for safety and security
ZEON
CSR Policy ●We will contribute to sustainably developing(Established
April 2010)society and protecting the global environment
through our corporate activities●We will ensure that each and every ZEON
person is aware of CSR and acts accordingly
Report Policy
At ZEON Corporation and the ZEON Group, we used to publish the “CSR
Report” so that all of our stakeholders can understand our approach to CSR and
activities for the environment. However, from fiscal 2013, we have been issuingthe “Corporate Report” in a magazine format, which includes an annual reportthat provides an overview of general ZEON business activities and corporate
information functions.
The FY2014 report aims to visualize specific business activities through suchnew features as “Profile of ZEON”, which provides a summary of ZEON businessactivities, and “Business and Strategy”, in which managers explain the strategy
for each division, and the strategy for research and development and production
innovation. Highlights in the report include the reports on the developmentof business overseas, particularly in connection to Asia, and the report on thechanging the culture through “Torchlight (taimatsu) activities.”
We ask for your honest feedback and opinions so that they may be used to
improve our activities in the future.
■Period Covered
April 2013 to March 2014
(also includes some new information from April 2014 and later)■Organizations Covered
The report covers ZEON Corporation and Group companies in Japan andoverseas. Some data only covers ZEON Corporation.

Disclosure Through Each of the Various Tools
The Corporate Report contains a wide range of information about management
and CSR, while the CSR website contains detailed performance and site reports
regarding CSR information. We also disclose more detailed management
information on the IR website and in the Fact Book.

CORPORATE REPORT 2014

Home > CSR Activities http://www.zeon.co.jp/csr_e/index.html
Home > Investor Relations http://www.zeon.co.jp/ir_e/index.html

1

ZEON GROUPCORPORATE REPORT 2014

Printed brochure :CORPORATE REPORT 2014

Website : CSR Activities

Website : Investor Relations

Message

Since the establishment of ZEON Corporation in 1950, we have consistently
utilized our original “do not imitate and cannot be imitated” technology andwe have given the world countless new products.
Since fiscal 2011, while we have been working on the Enterprise Blueprintfor 2020 published in the form of the Mid-Term Management Plan SZ-20, theenvironment around ZEON has become more difficult in terms of restrictedenergy usage following the Great East Japan Earthquake, massive fluctuations in
exchange rates, worsening overseas market conditions, and more.
Despite this, in fiscal 2013, the final year of SZ-20, we achieved a record
high of 19.7 billion yen in consolidated net profit for the current term. Also, in
terms of new production sites, in Japan, we completed construction of the plantfor diagonally stretched retardation film in Tsuruga City, and the S-SBR plant in
Singapore and the synthetic rubber container plant in Vietnam have both started
operating as planned.
From fiscal 2014, we are starting SZ-20 Phase Ⅱ of the new Mid-Term
Management Plan as the next step towards the Enterprise Blueprint for 2020.
We will continue to contribute to the realization of a pleasant and sustainable
society through our world-class technologies and products through of “Speed,”“Dialogue,” and “Social Contribution.” We deeply appreciate your ongoing supportand encouragement for ZEON.

Naozumi Furukawa
Chairman

ZEON GROUPCORPORATE REPORT 2014

2

Profile of ZEON
ZEON’s main products are made from C4, C5 fractions–a derivativeof distilled naphtha, which is contained in crude oil. From there, we use
substances, such as butadiene and isoprene, which are obtained with
proprietary extraction technologies, to manufacture various materials
and components.
Our business segment is divided into three parts. The Elastomer
Materials Business includes a product line that enhances the capabilitiesof the raw materials, our Specialty Materials Business features high value
added products manufactured using advanced technology and otherprocessed products, and the third is Other Business.

Business

Synthetic
rubberStyrene-butadiene rubber (SBR)

Bu
sin
e

Mainly used as a material inautomobile tires.

Specialty Synthetic rubber

Synthetic
latex

Widely used as a material
for automobile parts locatedaround the engine.

Parts that are locatedaround automobile
engines and use NBR

Synthetic latex
Mainly used as a material
for powder puffs and rubber
gloves.

Butadiene

omer Materia
Elast
ls

Fuel-efficient tires that use S-SBR

ss

C4

Isoprenemonomer

C5

Chemicals
Surgical gloves made from IR latex

High-boil
monomer

Powder puffs made from NBR
latex

Oth
Petroleum resins &Thermoplastic elastomer(SIS)
Mainly used as a material inadhesive tape and hot melt
adhesives.
Petroleum resins are used as abinder in traffic paints.

RIM
SIS is used in theelastic film ofdisposable diapers
and petroleum resins
are used in adhesives.

Adhesive tape using
petroleum resin and
SIS

Technology
licensingPetroleum resins areused in traffic paints

Company profile
Company name: Zeon Corporation
Establishment: April 12, 1950
Capital: 24.211 billion yen (as of March 31, 2014)
Market capitalization: 226.1 billion yen (as of March 31, 2014)
Total number of shares outstanding: 242,075,556 shares
Employees: 3,186 (consolidated) 1,654 (non-consolidated)(as of March 31, 2014)

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

296,427

300,000
250,000

270,383

262,842

2010

2011

225,878

250,763

200,000
150,000
100,000
50,0000

3

er

ZEON GROUPCORPORATE REPORT 2014

2009

2012

2013 (FY)ZEON creates novel products by harnessing our R&D capabilities, which utilize our proprietary strengths, and by tapping into our collective
production technologies to contribute to society through the delivery of superior and unique products and services.
Many of ZEON’s products have earned the distinction of being No. 1 globally, including being the “first product of its kind in the world”
or having the “world’s leading market share.”
Cyclo-olefin polymers (COP)

Structure

COP have unique properties, including excellent opticaland absorbance qualities. Owing to these properties, COPs
are used in a wide range of products, such as opticalproducts and medical containers.
ZEONEX®

Medical packaging container
made from COP

Optical products
We are deploying opticalproducts, including films madefrom processed COP.

IT components

Optical film for LCD televisions

aterials Business
ty M
ial
ec
Sp

2-butyne

fraction
fraction

Dicyclopentadiene

B u sinLithium-ion battery
materials

Energycomponents

Lithium-ion batteries that use
binders, as well as gaskets
that have been fastened witha sealing agent.

Toner particles

Medical devices
Offers extraction
devices for bile ductstones in the digestive
endoscopy field.

Medicaldevices

ZEON began supplying mass-produced samples in
2012, following the success of the NEDO project. Asa member of the Technology Research Association,
which is comprised of companies from a wide range
of industries, we are embarking on the developmentof applications for single-walled CNTs in newmaterials, devices, and other products.

Fragrances using green
aroma chemicals

Paints

Stent

Balloon catheter

Single wall carbon nanotube (CNT)

Syntheticaroma
chemicals

Specialty
chemicals

ess

Polymerized
toner

Cleaning agents usingjasmine aroma chemicals

Other

Specialty chemicals (solvents & cleaning agents)
New cyclopentyl methyl ether (CPME)
solvent, fluorine solvents that do notdamage the ozone, etc.

Operating Income(million yen)
40,000Net Sales by Region■Elastomer Materials Business ■Specialty Materials Business ■Other Business

35,29535,000Other

1.0%32,12329,901

30,000

North America

8.7%

23,69625,0002,932

25,89820,00015,00010,000Europe

10.5%

9,319

FY2013(million yen)

Japan

51.8%
153,452

31,130

5,000
0

2009

2010

2011

2012

2013 (FY)

Asia

28.0%
83,015ZEON GROUPCORPORATE REPORT 20144

Surprisingly ZEON:
ZEON is All Around Us
ZEON products are highly versatile, functional materials
used in all kinds of things you see and use every day.
Take a look around and you might be surprised to find
ZEON right under your nose—or even your feet!

MedicalfieldsSurgical rubber gloves
Low in impurities and allergens, andwith a high resistance to oil andchemicals, these gloves are put toa wide range of purposes, including
medical gloves, gloves used in the
kitchen and work gloves.

Assistive surgical tools
Specializing in the circulatory andgastrointestinal systems, we produce
balloon catheters and stents.

Paper diapers
ZEON’s elastomer SIS is used for theelasticated tape section.

At homeSink bowls, bathtub pans
RIMTEC, a group company, manufacturesand supplies raw materials used to makeplastic molded products.

Perfumes, shampoos andconditioners
We manufacture aroma chemicals for use
in cosmetic and hygiene products, foodproducts and various everyday goods.
In particular, our green aroma chemicals takethe largest share of the global market.

Powder puffs
Roughly 90 percent (ZEON estimate) of theworld’s powder puffs made from NBR latex
use ZEON synthetic latex.

Televisions
ZeonorFilm™, produced using the world’s
first environmentally friendly sheet extrusion
process, is used in LCD television displays for
its superior optical performance.

Computers
We manufacture chemicals that are requiredin the production of substrates that support
electronic components.

Housing materials
ZEON Kasei, a group company, manufactures
sound insulating materials and other housingmaterials.

5

ZEON GROUPCORPORATE REPORT 2014

Automobiles Tires
We provide synthetic rubber for
fuel-efficient tires with improved
performance in terms of rolling moreeasily (fuel efficiency) and stopping
better (increased safety), which areusually mutually exclusive.

Automotive parts
Zetpol® is an oil- and heat-resistant,long-lasting synthetic rubber thatcommands the largest share of the
global market. Zetpol® is widelyused in automotive parts such asengine timing belts.

Lithium-ion batteries
Lithium-ion batteries are used asa power source in a wide array ofelectronics, from hybrid vehicles
to mobile phones and laptop
computers. ZEON’s binder (anadhesive) helps make batteries safer
and last longer.

Dashboards
Powder slush is used as an internalmaterial in automobiles.

Towards the
futureUnprecedented new materials
Single wall carbon nanotube•Light but strong material for vehicles and construction•Electronics materials with heat transfer and electricalconductivity properties

In the city

Smartphones, tablets anddigital cameras
The highly functional resin ZEONEX®
is used for camera lenses. It ishighly valued for its excellent
optical properties and high levelof transparency.

Foods and beverages
Flavorings with the same chemical
structure as natural products are very
safe, and are used in a variety of foods
and beverages.

Various Sporting goods

On the road Road markings
ZEON petroleum resins are usedin paints for the white lines onpedestrian crossings and roads.

EnergySolar power generation
ZEON is cooperating in the solar
power generation plant (Mega Solar)in Tomakomai City, Hokkaido.

PlantsFoldable containers fortransport use
STEC™ is a container designed
originally by ZEON that is easy toassemble, disassemble and clean.

ZEON GROUPCORPORATE REPORT 20146

Interview with the President

ZEON will change by
drastically reviewing existingworking methods and waysof thinking towards realizing
the Enterprise Blueprintfor 2020
President Kimiaki Tanaka explains the
new SZ-20 Phase Ⅱ Mid-Term Management Plan,
which was initiated in fiscal 2014,
and the future prospects in a Q&A format.

Kimiaki Tanaka
President

Q1 Please tell us about the recent business environment and the status of ZEON Group.
A

1

7

The market value of synthetic rubbers is declining due to theeffects of the slump in the price of natural rubber and butadiene,
so the situation continues to be difficult for us as a synthetic rubber
manufacturer. Drastic changes are occurring in the United States
due to the shale gas boom, such as the increasing predominanceof ethylene production, which uses ethane as a material, whereas
butadiene, which is the main material used in synthetic rubbers,
is dependent on oil. Some good results were brought about by thetransition to a cheaper yen in fiscal 2013, but the inflated priceof domestic naphtha remains high, and the reduced production
output of naphtha crackers in Japan is having an adverse effecton domestic production activities.
From a long-term global perspective, the global economy
is expected to increase due to the growing population and theeconomic development of emerging nations, but it seems thateven more difficult decisions will have to be made in the Elastomer
ZEON GROUPCORPORATE REPORT 2014

Materials Business in terms of low-cost materials procurement
and global business expansion.
With regards to the Specialty Materials Business in thisenvironment, we must create high added-value products thatare resistant to economic fluctuations by specializing in the threemain business areas where market demand is increasing (parts for
information use, parts for energy use, and medical devices). That is
why we are emphasizing product development, placing products inthe market more quickly than before, and efforts towards researchand development in these fields.
We want to realize the Enterprise Blueprint as soon as possible
for both the Elastomer Business and the Specialty Materials
Business.

Q2 What is the main point of the new SZ-20 PhaseⅡ Mid-Term Management Plan?
A

2

There are two main points to the new SZ-20 PhaseⅡ Mid-Term
Management Plan. The first is to make a drastic change in thecompany. By determining what is needed to achieve the Enterprise
Blueprint for 2020 from the ground up, promoting reform andimprovement in terms of business restructuring, changing structuresin terms of existing systems, and, moreover, fostering a climate ofchanging how we think about work as well as changing the work
itself. If something is wrong, we will change it.
The other key point is to gain an understanding of the current
situation while implementing plans, and to review and makecorrections to the plans in line with the changing environment.
Top level management will continually gain an understanding of
the current situation through dialogs with worksites in connection
to the progress of plans in each division so that the strategy canbe dynamically changed and new strategies can be built up byimplementing emergent strategies. We want to establish know-howthat is unique to ZEON in these processes through PhaseⅡ.

“Changing” the company to realize the Enterprise Blueprint for 2020
Corporate Philosophy

ZEON is contributing to the preservation of the Earth and the prosperity of the human race
ZEON CSR Policy

We will ensure compliance and meet society’s needs for safety and security
We will contribute to sustainably developing society and protecting the
global environment through our corporate activities● We will ensure that each and every ZEON person is aware of CSR and acts accordingly●●

Key sense of valueEnterprise Blueprint for 2020

Socialcontribution

Speed Dialogue

Treasured ZEON characteristics— Mutual trust and fellowship —ZEON makes the future
today through thepower of chemistry

During the three-year period, we will “change”
the company through a fundamental revision of pastpractices and approaches to attain our goals
New Mid-Term
Management Plan

PhaseⅡ

Taking on challenges as a second step towardrealizing the Enterprise Blueprint for 2020
Commence operations at overseas plants

Enterprise Blueprint for 2020

Stabilize processes
Expand sales in Specialty
Materials Business

ZEON makes the future
today through thepower of chemistry

Promote reform and improvement
Change management structure

Consolidated net sales:
500 billion yen

Nurture business culture'14

PhaseⅡ'16'20

Q3 What is the status of the Elastomer Materials Business, which is one of the pillars of the business strategy?
A

3

The Elastomer Materials Business is a base business thatcomprises 60% of ZEON’s consolidated sales. Synthetic rubbers aremainly used in automotive applications. Until now, the automotive
industry has been seen as a maturing industry. However, due toautomobile diversification based on new power sources, including
hybrid cars, electric automobiles, and fuel cell vehicles, and due tothe economic development of emerging nations, the industry is
showing dynamic change to high value added industry that is far
from maturing.
Since the 1980’s, special rubbers, for which we have developed
a global strategy, have become a high-added value, high profit ratio
product, especially NBR (nitrile rubber) and Zetpol®, which adds
hydrogen to NBR, and acrylic rubber, for which has increased its

global market share following the purchase of TOHPE. In the future,
we will work toward raising the barriers to entry and expand thebusiness by strengthening these areas of distinction and introducing
technology that is unique to ZEON.
In September 2013, we began operating the Singapore plant as
a production site for S-SBR (polymerized styrene-butadiene rubber),a material used in fuel-efficient tires. In order to further reinforce
the business, we will increase the added value of product quality
in the same manner as special rubbers, and we will maximize thebenefits of optimized materials supply.

ZEON GROUPCORPORATE REPORT 2014

8

Q4 What is the status of the Specialty Materials Business, one of the other pillars?
A

4

The Specialty Materials Business comprises approximately
20% of the consolidated sales amount, so it’s still got some way
to go. Currently, our optical films are receiving extensive praise
for their originality and performance. Specifically, for films used inlarge-size LCD televisions, and small-to-medium smartphones andtablets, business is increasing and we are speeding up research anddevelopment as these industries move very quickly, and there is asevere demand for quality and supply.
With regard to electronics and packaging materials, we are
persistently continuing with research and development, as we want
to bring about some results in the next three years.
Our materials for energy use are highly regarded by ourcustomers due to the increased safety and capacity. We expect
demand to increase greatly if the use of lithium-ion batteries in
automobiles goes ahead.
The medical field has a different culture to these industries, but
we are planning steady business expansion. In this regard, we wantto further reinforce ZEON’s proprietary product development andproduction technology.

New diagonally stretched retardation film plant(Optes Hokuriku Plant [Tsuruga manufacturing plant])

Q5 Please tell us about the research and development strategy, and single wall carbon nanotube.
A

5

In order to continue producing innovative and original “do notimitate and cannot be imitated” technology, we are maintaining a
steady investment into research and development of 12 billion yen
annually. Top management will exchange information with researchlaboratories with more frequency than before in order to work
towards industrialization at a faster pace. We are communicating
directly with researchers in order to promote research anddevelopment that captures seeds of technology based on moreaccurate decisions.
For single wall carbon nanotube (SWCNT), we have been
engaged in research and development with AIST (Advanced
Industrial Science and Technology) as a project for NEDO (New
Energy and Industrial Technology Development Organization) thathas brought about reliable results. SWCNT was once extremely
costly, and it was rarely used for testing. However, we now havean environment where SWCNT can finally be tested in combination
with various other materials, as the price is now only 1/1000thof what it once was thanks to mass production technology. For
example, combining rubber with several ppm of SWCNT increases
heat conductivity and electrical conductivity, and produces anentirely new material. In 2015, we plan to set up the world’s firstindustrial-scale facility at the Tokuyama Plant, which will enable theuse of SWCNT as an industrial material. There is still a lot of hidden
potential for what can rightly be called a materials revolution, so
we, along with those in charge, are excitedly carrying out researchand development.

A rendering of SWCNT new plant(in Tokuyama Plant)

Tokuyama Plant

9

ZEON GROUPCORPORATE REPORT 2014

Q6 What are your thoughts on globalization and training employees to support globalization?
A

6

Currently, the industry that is particularly moving towards
globalization is the Elastomer Materials Business, for which weare forecasting large-scale market expansion overseas. When we
started the new plant in Singapore, we invited newly appointed
employees to the Tokuyama Plant for fixed term training, andthey visited actual worksites in order to learn about cutting-edge
production technology. As leaders, they will draw up a manual for
the Singapore plant and they will accumulate know-how that canbe passed on to the next generation by means of visualization. In
order to promote the smooth transition of technology along with
the increase in globalization, it is very important that training iscarried out in close collaboration with plants in Japan.
“Torchlight (taimatsu) activities” is another activity that we are

expecting will improve the overall nature of employees. This activity
focuses on improving employee motivation by imparting a senseof danger that we will not achieve the Enterprise Blueprint for2020 if we remain as we are. This activity began in fiscal 2012, andemployees have been thinking about what they should do in orderto improve on their own by, for example, utilizing job the awarenessgained from dialogs with other employees in their own jobs. We
have plans to develop this activity in Japan and overseas, so I am
discussing Torchlight (taimatsu) activities as I visit plants and offices
in each region.

Q7 Please tell us about the status of development and the thinking behind social contribution activities.
A

7

We are, of course, contributing to society through our corebusiness, and we must also make contributions to regional
communities through non-core business areas. We are also
contributing to the development of regional communities throughemployment. For example, 90% of the employees at the Singapore
plant are local employees. In Thailand and Vietnam, we aremanaging a scholarship program to support students so that they
can receive a higher education. At each plant in Japan, we areconducting close exchanges with regional communities throughevents and cleaning activities, and we are continuing to provide
reconstruction support following the Great East Japan Earthquake.
In the United States and Great Britain, we are independently
interacting with local communities in various ways. We believethat through such activities we can become part of the regional
community, which is useful in terms of safe and secure operations,and it leads to sustainable business activities.

CSR management and compliance management is about living
up to society’s expectations, which also means that we should be
useful to society by pursuing and increasing added value in ourcore business, and creating products and establishing technologythat is unique to ZEON. As a result, we want to become a company
that society cannot do without, which I believe is connected to theEnterprise Blueprint for 2020.

ZEON GROUPCORPORATE REPORT 201410

Business and Strategy

Elastomer Materials Business
Elastomer materials consists of production in the three fields ofsynthetic rubbers, synthetic latex and chemicals. In 1959, ZEON
became Japan’s first company to mass-produce synthetic rubbers.
Even today, the Elastomer Business is a core ZEON business,
providing 60 percent of the total net sales and 80 percent ofoperating profit.

Yoshimasa Fushimi
Elastomers & Chemicals Businesses
Director & Executive Corporate Officer

Net Sales Distribution Ratio (fiscal 2013)

Business Outlook and Future Strategy

Other Business

17％
50,800 million yen

Specialty Materials Business

21%
64,200 million yen

Elastomer Materials
Business

62％

184,400 million yen

Transition in Sales (last five years)(100 million yen)
2,000

1,734
1,500

1,844

1,775
1,640

1,383

1,000

500

0

11

2009

2010

ZEON GROUPCORPORATE REPORT 2014

2011

2012

2013 (FY)The main materials used in the Elastomer Materials Business are
C4 and C5 fractions, which are naphtha based. However, with thereorganization of the ethylene center in Japan, a key issue in the
mid-to-long term is securing materials with competitive strength,
which is a strategic step towards further development.
The synthetic rubber business largely consists of utilization in
the automobile industry. General rubber is mainly used for tires, andspecial rubbers are mainly used for engine parts.
The new Singapore plant is making S-SBR (solution-polymerized
styrene butadiene rubber) for use in fuel-efficient tires. Even ina world of fierce technological competition, ZEON’s proprietary
technology is being utilized to make unique developments. From
now on, while we look towards futuristic increases in ability, the
S-SBR business will become even stronger by securing a stableglobal position. Automobiles are a growth industry, and the demand
for tires will undoubtedly increase, so, while it may require some
initial investment, I believe we must leave a sufficient margin in thisarea of activity.
There is steady continuing growth of specialty rubbers such as
NBR (nitrile rubber), hydrogenated NBR (Zetpol®) and ACM (acrylic
rubber), which are essential and important product materials in the
pursuit of more efficient engines for automobiles, and are highly
regarded for having a high level of heat-resistance, oil-resistanceand durability. With various environmental changes, such as the
popularity of hybrid vehicles and electric vehicles, the demand willgrow over the next 10 or 20 years. The NBR production system
was built up in the 1980s in Japan, America and Europe, but thecustomer supply chain has become complicated, and the demand
has largely moved to Asia, so we are preparing future developments
while anticipating reorganization. We want to increase ourcompetitive power from a global perspective.
In the synthetic latex business, we are focusing on developmentin growth fields such as isoprene surgical gloves. In order to provide
more distinctive products, we will focus ever more on speeding up
development.
The Chemicals business makes products that are relatively close
to the end product provided to customers, so the customer market
is expanding globally. Despite the presence of competitors, businessis expanding with the use of C5 fraction materials. Looking to the
future, we will develop GPI (ZEON process of isoprene)* plants
overseas and we are also investigating how to extract high purity/
low-cost materials from C5 fractions overseas.

The Elastomer Business is growing alongside the increase inglobal demand, and it will continue to be a key business areafor ZEON. We believe that, in order to proactively work towards
globalization in the large ZEON Group family, employing local
personnel is becoming ever more important.
* See p.39 ZEON Group History

Business Overview●Synthetic rubbers
We manufacture synthetic rubbers with a variety of strong
points, such as SBR (styrene butadiene rubber), which has excellent
wear-resistance, BR (butadiene rubber), which has excellent coldresistance and low exothermicity, and IR (isoprene rubber), which
has the same performance as natural rubber.
We supply these rubbers to major tire manufacturers aroundthe world. We also manufacture and sell special synthetic rubberswith excellent heat- and oil- resistance, such as NBR (nitrile
rubber), Zetpol® (hydrogenated NBR), ACM (acrylic rubber), ECO(epichlorohydrin rubber),as rubber members of automobile for using
around an engine.
●Synthetic latex
Synthetic latex refers to emulsion-type rubbers and resins. ZEON
manufactures and sells NBR latex (acrylonitrile-butadiene rubber
latex), a material used in products that require oil resistance, suchas disposable gloves and powder puffs; and SBR latex, a material
used in products such as paper coating and adhesives; and acrylic
emulsion, a material used in textile processing and coatings.
We also boast a global share of nearly 90% of latex used in
powder puffs.

●Chemical products
We manufacture petroleum resins, which are used as materials
for adhesive tape and glues, and thermoplastic elastomer SIS(styrene isoprene block copolymer). Petroleum resins are also usedas materials for traffic paints (road paints). SIS is also used as amaterial for elastic film in paper diapers.

ZEON GROUPCORPORATE REPORT 201412

Business and Strategy

Specialty Materials Business“Specialty materials” refers to materials and components withhigh added value that use macromolecular design and processing
technology.
Focusing on future growth areas, we are positioning the ITcomponents (optical, packaging and electronic), energy components
and medical devices businesses as the three key business domains.

Masayoshi Oshima
Specialty Materials Businesses
Director & Executive Corporate Officer

Net Sales Distribution Ratio (fiscal 2013)

Business Outlook and Future Strategy

Other Business

17％
50,800 million yen

Specialty
Materials Business21%

Elastomer Materials
Business

62%

64,200
million yen

184,400 million yen

Transition in Sales (last five years)(100 million yen)
700

642

600

500

473

498

481

514

400

300

200

100

0

13

2009

2010

ZEON GROUPCORPORATE REPORT 2014

2011

2012

2013 (FY)In the Specialty Materials Business, we are using a uniqueproduction concept based on innovative original technology to
produce various high added-value products without being overly
influenced by the conditions of the materials market.
Looking at the sales at the end of fiscal 2013, it is largely
comprised of optical films (ZeonorFilm™), which is an opticalcomponent. However, while we have expanded in this field, a
key point from this three year period is that we have aimed at
rapid business expansion for packaging, electronics and energy
components.
Although the growth rate in the large-scale LCD televisionmarket has slowed down, we expect growth to continue.
ZeonorFilm™ is highly rated for its quality in this area of use. In
terms of small-to-medium size smartphones, tablet computers, anddisplay terminals using organic EL, for which growth is expectedin the future, ZEON’s original diagonally-stretching technology isshowing its competitiveness. Although it is an extremely fast-moving
industry, we want to continue to maintain our predominance byutilizing ZEON’s strengths to support Cyclo-olefin polymers (COP)
construction design.
Aside from optical films, COP is put to a variety of uses in opticalproducts, including portable camera lenses.
Also, in comparison to traditional glass, it is low in impurities,
light and strong, and has other excellent characteristics, which
we are utilizing in the development of other uses such as medical
packaging materials for vials and pre-filled syringes. As thesematerials are approved as a set along with the medical products, ittakes a very long time to become a product. However, once it has
been approved, it will be a very stable and long-lasting product.
In terms of packaging and electronics components, we areusing proprietary ZEON technology to develop new materials thatwill enable the further miniaturization semiconductors, including
insulation materials for big data processing.
With regard to energy components, we are expecting the market
to expand greatly providing lithium-ion batteries are utilized in
automobiles. ZEON battery binders are able to improve battery
performance, so they are showing a greater presence in the market
than before. Other than binders, we are expanding the range of
products in order to create more revenue.
Although medical devices are not an area of rapid growth,sales are steadily expanding. The issue for us is increasing ourtechnological strength in connection to materials development

unique to ZEON. We are also strengthening our systems whileobserving the characteristics of the unique medical market.
In the Specialty Materials Business, we will continue to pursue
high added-value, and we are putting more effort into researchand development in order to place highly-competitive products on
the market.

Business Overview●IT components
We supply various components focusing on optics, packaging
and electronics.
With regard to optical materials, COP (ZEONEX®/ZEONOR®),
which has various advanced characteristics in terms of opticalproperties and chemical stability, is used for optical components
such as small-scale camera lenses, and in optical film (ZeonorFilm™)
for LCD televisions and smartphones. In particular, in connection
to optical film production, we have created the world’s first
technology to freely control the arrangement of molecules using the“diagonally stretched retardation film production method.” We also
manufacture and sell components for packaging used for medical
supplies while utilizing the superior qualities of COP.
In terms of packaging components, we manufacture and sellinsulation materials for semiconductors, and, in terms of electronics
components, we manufacture and sell etching gas for the
production of semiconductors.

●Energy components
Lithium-ion batteries are used, for example, in mobile phones
and, more recently, in automobiles. In connection to energy
components, ZEON mainly manufactures and sells functional
binders for lithium-ion batteries and sealing agents for gaskets.
Aqueous binders for cathodes can restrict the swelling ofelectrodes, which contributes to heightening the capacity of thinsmartphone batteries, etc. We have also successfully developed
and can therefore supply environmentally friendly aqueous cathodebinders, which are traditionally solvent based. The sealing
compound, which is used for sealing, also has excellent heat
resistance, which helps to control the escape of electrolytic
solutions when under difficult conditions, such as exposure to hightemperatures.
Cathode binder

Anode binder

ZEON GROUPCORPORATE REPORT 201414

●Medical equipment (medical devices)
ZEON is developing an integrated structure for development,
manufacturing, sales and pharmaceutical affairs, mainly in the areasof circulatory and gastrointestinal systems.
In terms of gastrointestinal systems, we are manufacturing andselling devices for use in endoscopy, including balloon catheters
for gall stone removal, and, in terms of circulatory systems, we are
manufacturing and selling balloon catheters for IABP and more.
We will be expanding overseas in the future.

●Chemicals
We manufacture and sell synthetic aroma chemicals andchemicals for organic synthesis.
Synthetic aroma chemicals are developed with a priority on
safety, as they are used as materials in foods, fragrances andcosmetics. The chemicals that we handle include green aroma
chemicals, which produce a sense of freshness, jasmine aroma
chemicals, which is the classic scent of flowers, and lactone aroma
chemicals, which are essential in dairy products. We have theworld’s top share in the green aroma chemicals business.
In terms of chemicals for organic synthesis, we have numerous
characteristic green chemical products, which are easy to recycle
and are highly rated by the market. They are used as solventsfor reactions and extraction, and as solvents to clean precisionequipment. We also handle solvents for electronic materials
development and separation, and we handle products that are usedas materials for the middle objects of medicine and agriculturalchemicals and for synthesis aroma chemicals. We are expanding
into markets in a wide variety of business areas.

●Polymerized toner
ZEON is the first in the world to successfully achieve industrialscale production of printing toner compatible with digital applications.
This was made possible by leveraging the advanced polymer design
technology and fine particle control technology cultivated by ZEON
through its experience in synthetic rubber and latex.
ZEOGLOBULE™ polymerized toner exhibits excellent
transferability and dot reproducibility owing to its uniform sphericalforms, which yield higher image quality. Moreover, the encapsulated
structure enables low temperature fixing, which in turn contributes
to faster, energy conserving printing.

15

ZEON GROUPCORPORATE REPORT 2014

Business and Strategy

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

●RIM combination liquid and molded items

Net Sales Distribution Ratio (fiscal 2013)

We manufacture and sell combination liquid used in the Reaction
Injection Molding (RIM) method which utilizes dicyclopentadiene asa raw material. This molding method reduces the use of resourcesand energy by simultaneously conducting the polymerization andmolding inside the metallic mold. The main advantage of thismethod is that Cyclo-olefin polymers (COP) is derived due to thelow melt viscosity. The durability of these molded plastics is on a parwith engineering plastics. The waste material from this process canbe used in thermal recycling or as solid fuels. It is utilized in largescale plastic products, such as truck and bus bumpers, windscreens,and the housing for septic tanks for household use, and also forhousehold bathroom sinks and flooring in modular bathrooms.

Other Business

17%

50,800
million yen

Specialty Materials Business

21%
64,200 million yen

Elastomer Materials
Business

62%
184,400 million yen

Transition in Sales (last five years)(100 million yen)
600

508

485

500

417

391

400

375

300

200

●Paints

100

Tohpe Corporation joined the Zeon Group in 2013. We plan toprepare a lineup of different types of paints for various applications,and develop paints to suit the needs of our customers.

0

2009

2010

2011

2012

2013 (FY)ZEON GROUPCORPORATE REPORT 201416

Business and Strategy

Research and Development (R&D)
The ZEON Group primarily conducts R&D at the R&D Center located adjacent to the Kawasaki
Plant, while also carrying out some of its R&D activities in laboratories at other plants. In theBusiness R&D Division, we conduct research and development in line with Group businessstrategies while in the corporate R&D divisions, we handle fundamental research and thesearch for new materials.
The R&D Center is comprised of buildings 1 through 10. We are constantly rejuvenating our
R&D activities by frequently replacing our testing and analysis equipment. We tackle numerous
research topics using the latest analysis equipment, such as nuclear magnetic resonance (NMR)
spectroscopy, which can analyze solid samples, and a scanning electron microscope (SEM).

Yoshiyuki Mitsuhira
Research & Development
Director & Senior Corporate Officer

R&D Budget

R&D Strategies(100 million yen)
150

111
100

90

119

127

95

50

0

2009

2010

2011

2012

R&D System
Elastomer Laboratory
C5 Chemicals Laboratory

Research & Development Center

Specialty Plastics Laboratory
Precision Optics Laboratory
Specialty Materials Laboratory
Advanced Performance Material Laboratory
New Materials Development Laboratory
Foundation Technology Laboratory
Medical Laboratory
Manufactured Product Development Laboratory

17

ZEON GROUPCORPORATE REPORT 20142013 (FY)R&D is also engaging in policy to make major changes going
forward by basing our activities on the two pillars of elastomer andspecialty materials technologies, which is also one of the goals in
our new mid-term management plan. First, we are accelerating the
speed of our R&D activities by further devoting ourselves to open
innovation with institutions such as universities, R&D institutions,and companies. We plan to fortify our patent strategy of “notimitating others and preventing others from imitating us” by quickly
securing patents for the technologies we develop. We also aim to
improve the speed, volume, and quality of our R&D activities byfortifying our cooperation with management to quickly carry out
assessments and decisions on progress and achievements. We are
steadily securing an annual R&D budget of around 12 billion yen.
We plan to secure members for our R&D teams, corresponding
with our vision for 2020, and move our R&D teams closer to our
production bases. Recently, we transferred our R&D team for toners
to the Tokuyama Plant. Positioning R&D teams so that they canobserve production activities while carrying out R&D, will makethem more cognizant of the production process. This should also
reduce the amount of rework in product design that takes placewhen production is launched. One example of this is the optical film
R&D team, which has been located at the Takaoka Plant for sometime now. We also aim to encourage employees to transfer between
departments and teams. We also plan to create collaborations withcustomers. By doing so, we look to develop an environment thatwill provide new stimulus to our R&D team members and conducive
to discovering new ideas.

Results of the ZEON Group’s Creative Research
S-SBR is a synthetic rubber that is primarily used in
manufacturing fuel-efficient automotive tires. Rolling resistance,
which affects fuel efficiency, and wet grip are have conflicting
characteristics. It is crucial to improve the balance of these two
properties. ZEON modified the S-SBR polymer with the goal of
improving the dispersion and reinforcement benefits of silica andcarbon black compounds thereby developing a technology thatoffers high-performance and excellent balance for rolling resistanceand wet grip, which have conflicting characteristics.

Ongoing new product development of S-SBR fuel efficient tires

Wet grip performance●Solution polymerized styrene-butadiene rubber (S-SBR)

Further enhancing the balance
between wet grip performanceand fuel efficiency

Modifiedsilica S-SBR
new grade

Modifiedsilica S-SBR
improved grade

NS600
seriesModified silica BR
new grade

Modified carbon BR

Fuel efficiency●Environmentally-friendly cyclopentyl methyl ether (CPME)
Cyclopentyl methyl ether (CPME) is a completely new type ofhydrophobic ether solvent produced from ZEON’s proprietary raw
materials and synthesis technologies. Unlike conventional ether
solvents, CPME possesses properties such as high hydrophobicity(easily repels from water) and resists peroxide formation. It has
a wide range of uses as a solvent. CPME has been commended
for its efficacy, such as in alleviating environmental impact owing
to its high degree of recyclability and waste reduction, and also
for reducing costs and shortening and simplifying manufacturing
processes. We have received awards for our CPME including the
SSOCJ Award from the Society of Synthetic Organic Chemistry,
Japan, the CPhI Innovation Awards 2010 (Bronze medal) from CPhIWorldwide, and the Profile in Sustainability (product category) from
Informex USA.
●First in Japan to mass produce single-walled carbon
nanotubes (SWCNTs) *Industry-government joint research
SWCNTs are said to be a “dream come true” owing to their advanced
mechanical strength and electrical conductivity. However, for many years
companies did not move forward with the development of applications
for their use given the prohibitive material cost due to obstacles tomass production. ZEON, working jointly with the National Institute ofAdvanced Industrial Science and Technology, developed mass production
technology that achieved SWCNT growth that was 1,000 times fasterthan conventional methods using a super-growth method*1. In 2011, we
built a plant to carry out a mass production trial run*2. In 2013, we began
supplying mass-produced samples. Working toward our goal of launchingfull-fledged mass production in the second half of 2015, we plan toconstruct a manufacturing plant on the site of our Tokuyama Plant.
Moreover, the Technology Research Association for Single Wall Carbon
Nanotubes (TASC) was established to develop applications for SWCNT,
including new materials and devices. The realization of new materials
containing SWCNTs is moving closer, and research is progressing inmaterials such as rubber, copper and aluminum blended with SWCNT.
For example, when SWCNTs are blended with copper, the compoundmaterial offers resistance properties equivalent to that of copper while
offering electrical conductivity 100 times that of copper. Consequently,
we anticipate that this will contribute to improving the performance andreliability of electronic devices.

CPhI Innovation Awards
2010 (Bronze medal)

Profile in Sustainability(product category)Super-growth method visual
Furnace
Gas containing
minute amountof moisture

Argon gas
Chemical
reactionGas
outletSubstrate

Carbon nanotube
Metal catalyst

SWCNT manufactured on Substrate

Height of 2.5mm*1 The New Energy and Industrial Technology Development Organization (NEDO) capacitor development project*2 2009 Ministry of Economy, Trade and Industry supplementary budget project
ZEON GROUPCORPORATE REPORT 201418

Business and Strategy

Production Management and Safety
In order to implement the Enterprise Blueprint for 2020, “ZEON creates the future today
through the power of chemistry”, it is essential that we both develop groundbreaking newmaterials, and improve production in terms of greater cost competitiveness and stabilized
production quality.
Accidents occurring at chemical plants affect not only the safety of the employees working onsite, but also they have a strong effect on society, including environmental pollution in the local
community, and it influences customers in that the supply of products is interrupted. Therefore,
ZEON places safe and secure production as themes of particular importance for management.

Toru Nishijima
Division Manager - Production Center
Senior Corporate Officer

Production Innovation and safety initiatives that focus on process stability
Production Innovation and process stability

Production innovation and safety

Great changes are being made at production sites. Thosechanges are appearing in the workloads of on-site employees.
We are enabling on-site employees to streamline processes byconsidering the purpose of the workload, and how it can be more
efficient. (Daicel’s method of production innovation) As a result, thishas led to excellent production quality with increased safety and ahigh production process capacity index (little variation).

According to Heinrich’s law, for each major accident, there
are 29 minor accidents, behind which are 300 cases of near-missincidents (frightening or startling dangerous situations). Reducing
the number of near misses lowers the risk of a major accident,
which helps to establish safety. Production innovation activities thattake the load off the plant also serve as countermeasures for nearmiss incident level operations. Also, by pursuing the highest level ofsafety, we can achieve process stability, high cost-competitivenessand stable quality.

Process stability and production quality visual
Heinrich’s Law and Accident Reduction visual
Large variation in quality

Range of quality standards

1 major accident
29 minoraccidents

300 near misses

Little variation in quality (a)With (a), products can be shipped without conducting a shipping inspection

19

ZEON GROUPCORPORATE REPORT 2014

Accidents can be
reduced by reducing
near misses

Process Innovation That Brings About Rapid Improvement

COLUMN
Technology Transfer Essentials

In order to stabilize processes at existing facilities, ZEON
production innovation includes steadily improving in each and every
area, which is the foundation of everything we do. We are also
taking on a new initiative called “process innovation.” By changing
some manufacturing processes to something completely new, we
can achieve great results in a short period of time, which could nothave been done with the conventional line of growth. In order toachieve this, we want to set up an internal team and to develop
open innovation in collaboration with external specialists and othercompanies.

Cost

Connection between production innovation and process innovation from a cost perspective

Production innovation
Process innovation
Production innovationTime

Two Approaches to the Goal of Stabilizing Processes

An issue facing many companies is how to pass on thetechniques of veteran employees to younger employees.
In terms of personnel training at ZEON, we have a groupwide unified personnel training system, the Monozukuri Training
Center to train operators at plants, and safety workshops forthe experience of safety rules being implemented.
However, the really important thing is not the training itself,
but that one can think for oneself in trouble-resolving processes.
At ZEON, all of the various duties and their purposes, including
trouble-resolution, regularly handled by operators at plants
have been visualized, and all of the coping methods have beenstandardized. The standardization process is discussed between
veteran and junior employees, and the operator duties are thenincluded in the plant’s operation management systems. Thereare countless of such processes. For example, at the Mizushima
Plant, we analyzed approximately 400,000 operator duties.
At ZEON plants, we don’t simply use automatic operations
with the correct methods. Rather, when an incident occurs,
operators are shown the plant’s operational management
methods under various circumstances, and they must think forthemselves when making a choice. By repeating that process,know-how is passed down and understood, and can therefore
be used for oneself. These processes and results are all part of
ZEON’s technology transfer.

Production innovation strives to stabilize processes from an onsite perspective by finding and eliminating the causes of existingloads and troubles. On the other hand, process innovation seeks
to stabilize processes by means of “change” in that processes
are revised by combining acquired technology with the latest
technology. ZEON uses both of these approaches as it attempts toimprove safety, security and cost-competitiveness. This know-how
will be extended to the global production system, and will be used
to achieve the Enterprise Blueprint for 2020.
Mizushima Plant Integrated Production Center

New production innovations through process stabilization
New ZEON Production Innovation

Production
innovation

Process stabilization

Process
Innovation
Global development

Safety/Improved quality/Cost reduction

ZEON GROUPCORPORATE REPORT 201420

1Highlight 1

Global expansion starting in Asia

A ceremony was held on April 11, 2014 before the anniversary ZEON's founding to mark the completion of the solution
polymerized styrene-butadiene rubber (S-SBR) plant, which was newly constructed on Jurong Island, Singapore bysubsidiary Zeon Chemicals Singapore Pte. Ltd. More than 150 guests attended this event, which conveyed energetic
enthusiasm and high expectations for ZEON’s high value-added technologies and products. ZEON is accelerating its global
expansion starting with Singapore, as Asia becomes its key production hub.

Singapore, the first step in global expansion
unstable due to a reduction in ethylene cracker production.
In contrast, the new plant will have access to a stable source of raw
materials owing to the integrated production at the local petroleum
refinery. Moreover, the advantages for product distribution are that
Singapore has a convenient transport system and there are no
customs tariffs on exports. Singapore also boasts a high educationlevel, fueling the availability of talented human resources.
Today, ZEON’s customers—manufacturing companies—are
expanding globally. In tandem with this, ZEON is also extending
its global reach while also maintaining the high added value of
its products.

Jurong Island is man-made and originally consisted of several
smaller islands that were connected by landfill. The island ishome to chemical companies that manufacture products for the
petrochemical industry using chemical substances generated atvarious stages of the crude oil refining process. ZEON built its new
solution polymerized styrene-butadiene rubber (S-SBR) plant on thisisland. S-SBR is a type of rubber that is mainly used for automotive
tires that improve fuel efficiency. Demand for S-SBR is expanding in
the automotive market, where companies are competing to deliverproducts that offer low fuel costs.
There are several factors that prompted ZEON to establish its
new plant in Singapore. In Japan, the supply of raw materials is
Zeon’s global expansion in recent years
China
Establishment of a management company
Augmenting a PSC (powder slush compound) production base
Operating in November 2013

■ ●
● ●
●
●

India
A sales base for Tokyo
ZairyoThailandAugmenting a petroleum
resin plantOperating in September 2013●

21

ZEON GROUPCORPORATE REPORT 2014

■

●

●
●
■
■
■■ ■
■
■●
●
South Korea■■■
A sales base●●■Singapore
An S-SBR production base
Operating in September 2013USA
ZCLP plant in Texas
Augmenting a Zetpol® plant and an acrylic rubber plantOperating in July 2013■

Vietnam
A processing base
Operating in June
2013

■

●

■Previously existing production bases■Newly constructed production bases●Previously existing sales bases●Newly established sales bases

Exhibiting products at the Rubber Technology
Expo 2014 in Thailand

Showcasing products at Rubber & Tyre
Vietnam 2014

We showcased our products at the Rubber Technology Expo
2014, which was held in Bangkok, Thailand over a four-day period(March 12-15, 2014).
We launched production at our new S-SBR plant in Singapore.
In Southeast Asia, which is exhibiting solid economic growth, theZEON Group has several manufacturing plants, including ZEON
Advanced Polymix Co., Ltd., ZEON Chemicals (Thailand) Co., Ltd.,and ZEON Manufacturing Vietnam Co., Ltd. In Southeast Asianmarkets, which are gaining worldwide attention as a region thatwill drive monozukuri (“manufacturing craftsmanship”), it is thegoal of ZEON, as an elastomer manufacturer, to establish its brandand secure new customers.

ZEON exhibited its products at Rubber & Tyre Vietnam 2014,
which was held over a three-day period (May 14-16, 2014) in
Vietnam’s commercial metropolis of Ho Chi Minh, marking thesecond time that ZEON has participated in this exhibition.
Among ASEAN member nations, Vietnam in particular isexhibiting remarkable growth. At this year’s trade show, around
50 companies displayed their wares. ZEON was the only Japanesecompany to showcase its products.
In Vietnam, which is a producer of natural rubber, also has ahigh interest in high value-added polymers. Going forward, we see
potential for the ZEON brand to grow in this market. This is thesecond time we exhibited at this trade show. Thanks to the supportof ZEON, ZEON Asia Pte Ltd., and ZEON Advanced Polymix Co.,
Ltd., we believe our exhibition booth was more successful this timearound than the first time that we participated in this event.

Cultivation of human resources supporting global expansion
At ZEON Chemicals Singapore Pte. Ltd., 90% of the starting members were hired locally in Singapore. The 30% of these employees who
have main roles in charge of plant operation were trained in operation management at plants in Japan.

During our process training in Tokuyama in 2012, we were taught the meaningof Zeon CSR and Goanzen-ni, which means “safety first”, has become part of our daily
activities.
Through our collective awareness of safety, we have managed to overcome manydifficulties during the ZCS start-up together with our Japanese supporters.
We will continue to enhance our safety awareness in our operation activities and alsosocially, so as to contribute to sustainable growth in ZCS and ZEON globally.

Chris TanZEON Chemicals Singapore Pte. Ltd.
Production Manager

ZEON GROUPCORPORATE REPORT 201422

2Highlight 2Creating corporate culture via Torchlight (taimatsu) activities
We believe that it will not be easy to achieve the goals in ourEnterprise Blueprint for 2020 by relying on our current operations.
It is our belief that each individual employee must have theinitiative to take action to respond to changes and continue toengage in challenges to meet high goals, even in a rapidly changing
environment where the outlook is unclear. In July 2012, we launched
our Torchlight (taimatsu) activities in each department and groupcompanies as a step toward achieving our Enterprise Blueprint for2020. The goal of this initiative is to develop and strengthen the
key sense of value (speed, dialogue, and social contribution) andtreasured ZEON characteristics (mutual trust and fellowship) that areshared by all group employees.
Impetus for attaining the Enterprise Blueprint for 2020

Torchlightactivities

As a step toward achieving our Enterprise Blueprint for 2020,
the Torchlight activities encourage each employee to voice,recognize, and think about what is important to them, what theywant to do, and what they aim to be, and to take action in thisdirection. We are calling these activities the “Torchlight” activities
because we see a change for the better in each employee as thelighting of a single torch, and envision many torches being lit as our
employees pass on this “torch of change.”

Departmental Torchlight activities workshop

Enterprise Blueprint for 2020

Trigger a major change

Independent thought and action

Cooperation and team work through dialogue

Diverse ideas

Self-motivation sparked by individuality

Promote Torchlight activities

23

ZEON GROUPCORPORATE REPORT 2014

We introduced the following cycle: write your thoughts
down⇒share them through dialogue⇒gain new
perspectives⇒rework your thoughts. This provides employees
an opportunity to think about the activities carried out intheir department.

System forpromoting
Torchlightactivities

Departmental
Torchlightmembers
Departmental （Ⅰ）
Torchlightmembers（Ⅱ）

Department A

The departmental Torchlight members play a central role in the
Torchlight activities of each department. They promote activities
while keeping an open line of communication with the head ofthe department and employees in the department. Meanwhile,
the Torchlight core members promote companywide Torchlightactivities. They also actively provide support to departmental
Torchlight members.
This is the third year of the Torchlight activities. There are
233 employees actively participating as departmental Torchlightmembers.

Employees

Departmental
Torchlightmembers（Ⅲ）

Torchlightcore members

Head of department

Department
B

Flow ofmain
activities

Department
C

Department
D

TermⅢ

Selection of departmental
Torchlight members

TermⅡ

De

Joint workshop withmembers from the previous
and current year

TermⅠ

rt

pa

Departmental Torchlight members are active for one year. Somerelinquish their positions to new members, while others remain
involved in department activities even after the changeover.
At the various workshops the departmental Torchlight members
gather together to conduct, participants share their thoughts andrealizations regarding the Torchlight activities through dialogue andapply this to the activities that are carried out in the department.
The various activities of each department are held at “off-site”
meeting places where people can speak freely when they want.
These gatherings are opportunities to share information and to
consult on various topics.
By expanding the scope of this cycle, we can pass on the torchof change to more employees.

Off-sitemeeting

Dialogue by current-year members
to review activities

me

n tal

a ctiv iti e s
Workshop (1) conductedby current-year members

Workshop (2) conductedby current-year members

Enterprise Blueprint for 2020 should be every employee’s goal
It has been four years, three years as Departmental Torchlight, since just a few of us started off with the thought ofrealizing the Enterprise Blueprint for 2020 with placing importance on the qualities of ZEON we admire.
During the years, there have been several prime examples that illustrate the Torchlight activities which utilize the talents
and characteristic of each member.
A single activity may be a minor change but when looking back at the four years, I feel that this activity is gradually
taking root as an initiative in which employees can pursue their personal interests.
Not only will I support the Torchlight activity as a member ofthe Management, but will also feel, think and act as one of the
Yoshiyuki Mitsuhira
participants to further spread the light.
Director & Senior Corporate Officer
Official in charge of Torchlight activity promotion

ZEON GROUPCORPORATE REPORT 201424

Strengths Supporting our Businesses

Human Resource Development
ZEON requires respect for human rights and prohibits discrimination in its CSR Code of
Conduct. We strive to be a business that is understanding and accepting of diverse values
and where no person is discriminated based on gender, age, nationality, or other attributes.
On this basis, our goal is to establish ZEON as an enterprise where every employee* can workwith pride by encouraging employees to continually evolve through the pursuit of high goals
based on completely independent thinking, the development of a human resources system thatchallenges employees to achieve their potential, and the maintenance of comfortable work
environments that value dialogue.
ZEON human resource development encourages employees to visualize what they want
to become, while ZEON tailors its education and training practices to help each employee
bridge the gap between their current and visualized selves and to take daily steps toward thatvision. By fairly assessing the results of those actions, which is reflected in how we treat each
employee, we encourage employees to set ever-higher goals. As each and every employee
pursues specific actions and accumulates changes and improvements, a greater worksite
capacity is built up across the company.
For details on our activities,
click the following URL.

Human Resource Development Flow
Change employment
conditions

The employee
I want to be(higher goals)

The employee
I want to be
Education andtraining

Evaluation

Education andtraining

Tasks andperformance*At ZEON, we use “employee” to describe all workers, including both
permanent and part-time workers

Home > CSR Activities > Relationship with Employees

http://www.zeon.co.jp/csr_e/employee/index.html
Training using simulated plant equipment
at the Monozukuri Training Center

Safety Initiatives
A safe and stable work environment is the foundation of all production activities. ZEON
Corporation formulated its safety philosophy in 1997 to direct its safety efforts.
ZEON Corporation places an emphasis on communication between worksite managers
and workers in its effort to enhance worksite capacities and build safe and stable production
systems. We put considerable effort into 5S safety audits*1, risk assessments*2, and identifying
near-miss incidents*3, as well as the provision of hands-on training.
The lost-time accident rate*4 in fiscal 2013 was lower than the period when there weremany such accidents (2005-2007), but we have not yet reached our targets (zero accidents).
Rather than being satisfied with this decrease, we will expand our safety activities until wereach zero accidents.
Management is also proactively involved in promoting safety, and they visit the plants
for regular reviews by top management, top management consultations, and annual policy
explanatory meetings, etc. Aside from this, they also visit the plants to have serious direct
discussions with plant employees working on the Production Line. In fiscal 2013, there were
50 days of top management plant visits.
(Also reported in “Production Management and Safety” on p.19.)
For details on our activities,
click the following URL.

25

ZEON GROUPCORPORATE REPORT 2014

Home > CSR Activities > Safety

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

Lost-Time Accident Rates(ZEON Corporation)(rate)
1.2

1.0

Manufacturingindustry

0.8

Chemical industry

0.6
0.4

ZEON Corporation

0.2
0.0
03

04

05

06

07

08

09

10

11

12

13
(FY)

*1 5S Safety Audits
Inspections of on-site operations (particularly those that areclosely related to safety) when carrying out the 5S (seiri, seiton,
seisou, seiketsu, and shitsuke or neatness, orderliness, cleanliness,hygiene and discipline in English) in order to visualize work
locations and review dangerous areas.
*2 Risk assessment (Kiken Yochi)
Actions taken by workers to analyze and understand unsafe
conditions to stop behavior that places themselves in danger.
*3 Near-miss incidents
Unplanned events that nearly result in situations that are both
dangerous and frightening or startling.
*4 Lost-Time Accident Rate
An indicator of the frequency of workplace accidents, calculatedusing the following formula: Frequency of lost-time accidents =Number of workers who experienced a lost-time accident / Total
actual working time × 1,000,000 hours

Environmental Initiatives
ZEON formulated its own Responsible Care Policy in 1998, which embodied and was basedon the ideas of responsible care. Established in 2001, our Environmental Philosophy guides
our efforts to deliver products with consistent quality through safe and stable production whileshrinking our environmental footprint.
CO2 emissions in fiscal 2013 were approximately 520,000 tons, or approximately 81% ofemissions in fiscal 1990, which is only a small step away from the company’s fiscal 2020 target
value of being “80% of the 1990 CO2 emissions level.” However, the CO2 emissions level (unitCO2 emissions) per production volume decreased by 2.7%, which shows that CO2 reduction
initiatives are steadily achieving results. We are investigating further CO2 emission reduction
through, for example, switching the fuels used by plant boiler equipment.
In terms of reducing atmospheric emissions of harmful chemicals, we are proactively
promoting the reduction of emissions of butadiene and acrylonitrile, which are substances
requiring priority action. Meanwhile, reduction of the total amount of waste disposed became
zero, in fiscal 2011 at ZEON and in fiscal 2013 at the Group companies.

Amount of Butadiene Atmospheric Emissions(tons)
10

5

0

2009

2010

2011

2012

2013
(FY)

Amount of Acrylonitrile Atmospheric Emissions(tons)
20

10

For details on our activities,
click the following URL.

Home > CSR Activities > Environment0

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

2009

2010

2011

2012

2013
(FY)

The graph on p. 34 shows the amount of energy used against the CO2
emissions amounts and sales amounts

Quality Initiatives
To consistently manufacture products that reflect the needs and wants of customers and toensure product quality, ZEON is advancing integrated quality assurance activities companywide,
across manufacturing, sales and engineering functions, by strengthening cooperation among
plants, business divisions and research units (R&D Center). For example, when a complaint isreceived or a problem occurs within a line, the business divisions, research units, and Quality
Assurance Department get actively involved, joining manufacturing departments (plants) in
identifying the root cause, taking action, and confirming effectiveness, as well as standardizing
processes to prevent a recurrence.
Through these efforts, ZEON is working to improve the consistency of quality and processes
so that we are able to deliver to the customer products they will be satisfied with.

Quality Assurance System
Customers
Requests andrequirements
Plants(Manufacturing)

Site education;
Strengthening
integration ofquality into designand development

R&D Center(R&D)

For details on our activities,
click the following URL.

Products andserviceFact-finding;Knowledge sharing
between plants;
Reform/change planning
Quality
Assurance Dept.

Problem identifying;
Improvements

Divisions(Sales andLogistics)

Home > CSR Activities > Quality Assurance (Relationship with Customers)

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

Contributing to the Preservation of the Earth and to the Prosperity of the Human Race through our Products
Until now, we have built up the foundations for Quality Assurance Risk Management(product liability lawsuits, supply obligation risk, product recall risk, and the risk ofcredibility loss due to rumor etc.). We are now aiming to build on this foundation witha Quality Assurance System where ZEON attains the satisfaction of all stakeholders,
including customers, society and employees, by means of the products we supply. Thismeans that we are developing activities that contribute to the preservation of the Earthand to the prosperity of the human race. Our mission is manufacturing that makes wiseuse of limited resources.

Hiroshi Takegami
Director & Senior Corporate Officer
CSR and Production &Engineering Technologies

ZEON GROUPCORPORATE REPORT 2014

26

Strengths Supporting our Businesses

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

ZEON’s Basic Policies on Social Contributions
We believe that traditionally, social contributions are essentially
carried out through core businesses. As long as a company is amember of society, the complex set of issues society is facing andcorporate activities are not independent of one another. ZEON isembarking on social contribution activities outside the realm of
its core businesses to have a broader perspective for engaging withsociety.
In 2012, we launched CSR Core Projects, which are initiatives
we selected from proposals submitted by group companies. The CSRCore Projects are activities that focus on social contributions outside

the scope of core business operations and provide employees with
an opportunity to turn their attention toward social issues.
We have planned various activities related to supporting
reconstruction after the Great East Japan Earthquake and projects
mutually implemented by different offices and group companies.
There are also social contribution activities that, to date, have been
performed independently by each office and group company. We aredeveloping activities in these three categories while also focusing on
synergistic benefits.

CSR Core Projects
Projects

Detailed activities

FY2014

Great East Japan Earthquake restoration

Restoration volunteer tours

Launched October 2012
Implemented 27 times as of March 2014 (total of 174 participants)
Disaster restoration assistance (Minamisanriku, Rikuzentakata), agricultural aid (Iwaki),Fishing aid (Kesennuma), etc.

Eat and root for restoration!
Campaign

Support restoration of industries by actively using food products grown in disaster-stricken areas
Ongoing initiative
Offering a menu of Tohoku-grown foods at the employee cafeteria and Z Plaza (employee lounge)

Participating in the building of Planted Heisei-no-mori in Otsuchi Town (Sponsored by: Yokohama Rubber/Otsuchi Town, Iwate
a forest embankment to protect Prefecture)
Sponsor and participant since FY2013
lives*

Ongoing initiative(Frequency goal: 1-2 times permonth)

Ongoing initiative

Mutual projects

Chemistry classroom

Summer vacation events, classes where local residents do experiments while touring our offices
Head office: Summer holiday children's chemical experiment show (participating from FY2013)
Tokuyama Plant: Experiment class during industrial tourism tour for parents and their children

Unique plan for chemistryclassroom(Held in disaster-stricken areas)
Expand the number ofexperiments conducted(Newly create an experiment
package)

Ecocap recycling(Collecting used plastic caps)

Began count at all group companies from FY2012
FY2013 results: 427,000 caps recycled ⇒ vaccines given to 497 people

Ongoing initiative

Green purchasing of officesupplies

Purchasing office supplies with minimal environmental impact (notebooks, book-binding tape,folders, etc.) Of the 44 items stipulated under the Green Purchasing Law, we switched to 22 items Ongoing initiative(50%)

Independent projects
Select topics for eachpromotional committee

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

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

For details on our activities,
click the following URL.

Relationship with Society

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

http://www.zeon.co.jp/csr_e/site/index.html
Response to Great East Japan Earthquake and Tsunami Disaster

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

27

ZEON GROUPCORPORATE REPORT 2014

Great East Japan Earthquake reconstruction volunteering
We continue to send employees toareas affected by the Great East Japan
Earthquake by looking for employees
to sign up for a regular restoration
volunteer tour. The company covers theentire cost to actively promote employee
participation. We turn “support” into
“encouragement,” and “encouragement”
into “exchange.” Given the risk thatthe memory of the devastation will beforgotten, we believe that it is now evenmore important to continue to undertakethese activities. (Picture: In June 2014,
volunteers helped build a floating pier on
the Karakuwa Peninsula in Kesennuma,
Miyagi Prefecture.)

Chemistry classroom
Based on our motto of “nurturing
future Nobel Prize winners inchemistry,” we are conducting
chemistry experiment classrooms
in various regions to teach childrenthat chemistry is fun. It is our desirethat children, who are responsible
for the future, gain an interest inscience, not only chemistry. (Picture:
We held an exhibition and workshop
called “Welcome to the Labyrinth ofLight!” at the “Dream Chemistry 21”
Summer Holiday Children's Chemical
Experiment Show 2014.)

Relationship with Society (Event)
ZEON places great importance on
connections with local communities.
ZEON offices and group companies
hold various events, including summer
festivals and actively participate innumerous local events. (Picture: The
Tokuyama Plant sponsors the ZEON
Waraku Odori Dance Festival, which
is a regular summer event that was
first held in 1974. Every year, morethan 2,000 people participate in thefestivities.)

Relationship with Society (Activities with the Local Community)
We are carrying out activities withlocal communities in various regions.
In 2013, ZEON Chemicals L.P. (ZCLP;
US) participated in an exhibition
at S.T.E.A.M. (Science, Technology,
Engineering, Arts, Math), a program
designed for elementary schools.
Together with ZCLP employees, morethan 400 elementary school students
learned about the history of scientifictechnological development in Kentucky,
and also about the value of co-existingwith agriculture and the environment
through chemical experiments andinteracting with turkeys.

Cooperating in tree planting in disaster-stricken areas
From 2012, the town of Otsuchi Town
(Iwate Prefecture) and Yokohama
Rubber Co., Ltd. have been holding atree planting campaign, Heisei-no-Mori,in Otsuchi Town as a model case to
create a forest embankment to protect
the lives of the local community. ZEON
began cooperating in this tree planting
campaign in 2013. In 2014, the thirdtime we cooperated in the event, 24
employees, including the chairman,
partook in this campaign. We, along withlocal residents, planted 15 different typesof tree seedlings. (Picture: Tree planting in
April 2014.)

Relationship with Society (Educational support)
Our offices and group companies
implement exchanges with and offer
assistance to various educational
institutions. ZEON offers internships
for high school, vocational highschool, and university students andactively give tours of our plants toschool children. We also dispatch parttime lecturers to schools. In FY2013,
we took in 37 interns. (Picture: Wegave a tour of our Mizushima Plant to
students from a local technical highschool in May 2014.)

Relationship with Society (Clean-up activities)
With the goal of implementing
activities that are helpful and which
will make local residents happy, ouroffices and group companies areembarking on clean-up activities inlocal communities, not only in areas
around our offices and plants. (Picture:
In June 2014, 170 employees fromthe ZEON Takaoka Group (ZEON,
ZEON North Co., Ltd., ZEON Medical
Inc., and Optes Inc.) to participate
in clean-up activities along the Himi
Coast.)

Promotion of Cultural Activities
Tohpe Corporation established the
Tohpe Dip Art Association to develop
cultural businesses incorporating paintand is promoting American flowers(handcrafted flowers made withpaint). The association was founded
in 1973. There are around 1,000
members nationwide. Exhibitions
are held in various areas nationwide
every year. (Picture: In May 2014, an
exhibition was held at the Ikebukuro
Sunshine City Cultural Center.)

ZEON GROUPCORPORATE REPORT 201428

Strengths Supporting our Businesses

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

Information

ComplianceCorporate
governanceCategory

Enterprise Blueprint for 2020

Specific Efforts (FY2013 goals are shown in blue)●Mid-Term Management Plan goals have been achieved, and dividend distribution is stable andcontinuous●Implement stable distribution of dividends FY2013 forecast of 13.00 yen●A world-class risk management system has been built, is being operated throughout the ZEONGroup, and has gained the trust of society●Implement risk management activities in accordance with ISO 31000●A business continuity management system is being deployed throughout the Group (various types ofbusiness continuity plans (BCPs) have been formed and are revised regularly through training, etc.)●Formulate business continuity plans (BCPs) and switch to business continuity management (BCM)
system●Compliance awareness is widespread and allows ZEON to respond to environmental changes●Revise company rules regularly (in accordance with the revision of laws and regulations)●Hold workshops on legal and regulatory compliance●Simultaneously inspect legal compliance●Consolidate and establish clear and concrete company rules among overseas group companies●Support the establishment of compliance system at overseas group companies●Information is disclosed quickly and appropriately (including negative information regarding
business conditions, CSR, risks, etc.)●Hold financial results briefing●Publish various reports●Disseminate information via the company website●Hold briefings for individual investors and analysts in Japan and overseas and respond to media inquiries●Information on trade secrets is managed appropriately●Appropriately enforce company rules (information management regulations, personal
information protection management rules, etc.)●Provide e-learning courses●Construct and operate information management systems●Eradicate security irregularities
Implement plant safety evaluation (100%)
Implement specialized RC audit (more than once per year for all four plants)
Training to boost accident prevention awareness (implement at four plants andone group company)

Social contribution

Human rights and labor
practices

Environment, safety, and quality●All worksites continue to have zero incidents and zero accidents, and are trusted by society

29●Eradicate security irregularities

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

Zero logistics accidents●Eradicate environment irregularities

Zero environment irregularities●Reduce environmental impact (promote voluntary control plans for air pollution and toxic substances)
Acrylonitrile emissions in FY2012 of 13.6 tons ⇒ reduce to 10 tons
●All worksites have reduced their environmental impact which has gained social appraisal*The numbers to the right are the goals and results for the four domestic plants, unless otherwise specified●Reduce environmental impact (promote zero emission plan for industrial waste)
Target amount lower than FY2012 actual of 9.6 tons
●Reduce environmental impact (promote zero emission plan for industrial waste)
Final disposal of domestic group company industrial waste for landfill under 7.5
tons (Final landfill disposal rate: FY2007 emissions standard) 0.3%
●Reduce environmental impact (fortify companywide energy-saving project)
Reduce unit energy consumption to 66% from 67.8% versus the level in FY1990
Reduce unit CO2 emissions to under 68.7% versus FY1990 (below actual for FY2012)●Levels of both quality and cost are the best in the world●Implement a quality management system based on ISO 9001
●Management of quality assurance risks (product liability lawsuits, supply obligation risk, productrecall risk, and the risk of credibility loss due to rumor)●Improving processes (reducing losses and improving consistency)●Procurement is being promoted that includes considerations to reduce environmental impact
based on CSR procurement policy●Determine and understand the state of CSR procurement guidelines, share with business
partners●Appropriately operate a system to promote child-rearing●Promote work-life balance (harmony between work and life) to enable people to work and raise ●Implement program for reinstatement in workplace for employees taking child-rearing or nursing care leavechildren or care of sick parents●Introduce flexible work hours, employ discretionary working system for management-related work
●Appropriately enforce sexual harassment prevention regulations●The workplace has been revitalized by the promotion of diversity and the fair and equitable
treatment of personnel●Appropriately operate human resource systems (individual report and evaluation systems, etc.)●Hire non-Japanese employees (mid-career applicants and students studying in Japan)●Expand rehiring program of retired employees●Support development of employee skills and career●Implement MD Committee* activities by female members (*committee comprised solely of female employees, promote cost cuts)●An organization has been established to promote volunteer activities for employees including
retirees that allows employees to actively volunteer in various ways

●Raise employee social contribution awareness (includes CSR training)●Upgrade and enhance CSR promotion system●Introduce volunteer activities and promote and support participation●There is understanding and appraisal for ZEON's social contributions (ZEON actively participates ●Materialize and implement CSR activities being promoted by the entire ZEON Groupin and supports environmental protection and social welfare programs being promoted in each ●Materialize and implement CSR activities being promoted by all worksites
country and region)●Implement CSR activities unique to individual worksites

ZEON GROUPCORPORATE REPORT 2014

In FY2013, in the categories of management and human rights and labor practices, we achieved our goals but in the category of environment, safety,
and quality, there are still issues that require further attention. In FY2014, we continue to work as a unified group to implement these initiatives.
★★★Target reached ★★Target almost reached ★Improvement needed
FY2013 Results

Evaluation

FY2014 Goals●Annual dividend 13.00 yen★★★ ●Annual dividend 14.00 yen (forecast)●Improved risk management activities in accordance with ISO 31000 (reviewed FY2013 risk list to reflect confirmation and feedback onprogress in risk response plan)★★★

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

●Improve risk management activities in accordance with ISO
31000 (Review list of risks in FY2014 which reflects thehorizontal deployment of pronounced risks at other departments)●Revise company rules regularly (in response to revisions to laws,
etc.)●Hold workshops on legal and regulatory compliance●Simultaneous inspection of legal compliance●Financial results briefing: Held quarterly●Published annual, semiannual, corporate, and other reports●Disseminated appropriate information via the company website ●Launched Chinese-language version of website●Participated in company briefing for individual investors●Participated in investment conference for overseas investors●Financial results briefing●Publish various reports★★★ ●Disseminate information via the company website●Hold briefings for individual investors and analysts in Japan andoverseas and respond to media inquiries●Information security training (e-learning):Enrollment 99.9%●Information security audit (information security voluntary diagnosis):Response rate 99.7%●Revised affiliate regulations in line with completion of information management system●Completed information security structure and system at overseas group companies★★★

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

Education on examples of accidents(Kawasaki Plant)●Appropriately enforce company rules (information management
regulations, personal information protection management rules,
etc.)●Provide e-learning courses●Two security irregularities★☆☆ ●Zero security irregularities●Two industrial accidents that results in lost workdays★☆☆

●Zero logistics accidents★★★ ●Zero logistics accidents●Zero environment irregularities★★★ ●Zero environment irregularities●Acrylonitrile emissions totaled 11.7 tons★★☆ ●Acrylonitrile emissions under 12 tons

●Final landfill disposal was 1.3 tons★★★ ●Lower than the 1.3 tons which was the actual for FY2013●Final landfill disposal for domestic group companies: 11.2 tons★☆☆

●Final landfill disposal for domestic group companies of less than
7.5 tons (Final landfill disposal rate: FY2007 emissions standard)
0.3%●Unit energy consumption 65.1% versus level in FY1990●Unit CO2 emission 67.8% versus level in FY1990★★★

●Unit energy consumption 65.1% versus level in FY1990●Unit CO2 emission 68.2% or lower versus level in FY1990●Underwent ISO 9001 renewal screening and retained certification●Implemented various initiatives to enhance product safety and quality(Details are on our website: Home > CSR > Quality Assurance (Relationship with Customers)★★★

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

●Share information on CSR procurement with business partners(hold briefings, write letters, etc.)●CSR Procurement Guidelines and the Requests for Suppliers, were disclosed on the website●Implemented survey of suppliers (67 companies, mainly domestic primary suppliers)

Kurumin mark●Achieved goals set in action plan for employers regarding countermeasures to support the developmentof the next generation (established in FY2010) and satisfied certain requirements. Accordingly, received
the Kurumin accreditation mark from the Ministry of Health, Labour and Welfare as a company that
supports child-rearing (Details are on our website: Home > CSR > Relationship with Employees >Creating Workplace Environments that Protect Human Rights and Health)●Ratio of employees with disabilities (parent) 2.18% (FY2012 2.06%)●Rehiring of retired employees Six out of seven retirees (Details are on our website:
Home > CSR > Relationship with Employees > Employment and Diversity)★★★ (Handled as a daily management activity)

CSR briefing (Ibaraki Plant)●CSR briefings held at each office and domestic group companies●Supported establishment of CSR Promotion Structure for companies
that were newly incorporated into the ZEON Group●Number of employees that participated in restoration
volunteer tours 15 times and 126 employees●Created a system for sponsoring social contribution●Implemented CSR core projects in each region●Zero occupational accidents resulting in lost workdays andserious accidents without lost workdays

Searching for lost articles at
Rikuzentakata★★★ (Handled as a daily management activity)★★☆

●Hold CSR briefings●Continue to support restoration volunteer work★★☆

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

ZEON GROUPCORPORATE REPORT 201430

Strengths Supporting our Businesses

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

Board of Directors

Corporate Governance System

Executive Committee

General Meeting of Shareholders(Appointment / Dismissal) Collaboration (Appointment / Dismissal)

Decisions / Supervision(Appointment / Dismissal)
Auditing

Board of Directors

Corporate Auditors

Decisions / Supervision(Selection / Dismissal)

Auditing(Dismissal)
Collaboration

Internal
Auditing

Independent Auditor
Financial
Auditing

Auditing
Personnel

Business Execution andInternal Controls System

Collaboration

Representative Director
Executive
Committee(Assistance)

Information

Information(External)

Risk Management Committee
External
LawyerEnvironmental and Safety Committee

Public Relations Committee

Information (External)

Quality Assurance Committee

Information (Internal)

Internal auditing

Compliance Committee

PL Committee

The Executive Committee, in accordance with
Executive Committee regulations, comprises the
President, and executive officers ranked senior
corporate officer or above and meets, in principle,
twice a month to examine and make decisions onimportant business matters after due deliberation
involving consultation with attending full-time
corporate auditors. Important agenda items,
as stipulated in regulations for the Board of
Directors, are examined and decided by the Boardof Directors.

Board of Corporate Auditors

CSR Conference
CSR Basic
PolicyCommittee

The Board of Directors meets, in principle, every
month with corporate auditors in attendance
to ensure compliance with applicable laws andthe articles of incorporation in the executionof business. The role of the Board of Directors
besides statutory duties is to make important
decisions about basic management policy andstrategy and other aspects of business execution.
The Board of Directors currently consists of 11
directors, including two outside directors.

The Board of Corporate Auditors comprises fivemembers, including three outside corporate
auditors. The board reports, discusses and resolves
important matters. In accordance with auditing
guidelines established by the Board of Corporate
Auditors, each corporate auditor audits the duties
executed by directors through various means, suchas attendance at Board of Directors meetingsand monitoring of business operations, including
subsidiaries' operations. The Board of Corporate
Auditors was convened eight times during fiscal
2013.

Operating division, indirect departments, research laboratories, plants
Control / monitoring

Information(Internal)

Subsidiaries and affiliates

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

ZEON Group’s Risk Management andCompliance System
CSR Conference
Compliance
Committee

Risk Management
Committee

Prevention of law violations

Prevention and controlof Risks;
Dealing with crises

Education and training incompliance with laws
Antitrust Law Regulatory
Subcommittee
Export Security Control
Subcommittee
Corporate Governance
Subcommittee

31

ZEON GROUPCORPORATE REPORT 2014

Information Security
SubcommitteeDirectors and Officers (as of October 1, 2014)
Directors

ChairmanNaozumi Furukawa

President

Kimiaki Tanaka

Chairman of Tohpe Corporation

Director & Executive Corporate Officer

Director & Executive Corporate Officer

Elastomers & Chemicals Businesses

Specialty Materials Businesses

Yoshimasa Fushimi

Masayoshi Oshima

Director & Senior Corporate Officer

Director & Senior Corporate Officer

Director & Senior Corporate Officer

Outside director

Administration
President of Tohpe Corporation

CSR and Production &Engineering Technologies

Research & Development

Adviser - FUJI ELECTRIC CO., LTD.

Outside director

Director & Corporate Officer

Director & Corporate Officer

Tadayuki Minami

Takao Kitabata

Hiroshi Takegami

Hiroyuki Hirakawa

Division Manager - Synthetic Rubber
Deputy Manager - Elastomers& Chemicals Businesses

Yoshiyuki Mitsuhira

Haruo Itoh

Kei Itoh

Division Manager - Corporate Planning

Corporate Auditors

Corporate executive officer

Audit & Supervisory Board Member

Senior Corporate Officer

Corporate Officer

Takeo Furuya

President of Zeon Chemicals Singapore Pte. Ltd.

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

Seiichi Okada

Senior Corporate Officer

Corporate Officer

Audit & Supervisory Board Member (External)

Division Manager - Production Center

Division Manager - Specialty Chemicals

Supreme advisor of Asahi Mutual Life Insurance Company

Corporate Officer

Corporate Officer

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

Plant Manager - Tokuyama Plant

Jun Hasegawa

Audit & Supervisory Board Member

Yuzuru Fujita

Audit & Supervisory Board Member (External)

Tadanobu Nagumo

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

Audit & Supervisory Board Member (External)

Nobuhiro Mori

Hiroshi Asahina

Toru Nishijima

Hirofumi Imai

Corporate Officer

Hiroshi Fujisawa
Plant Manager - Takaoka Plant

Noboru Yanagida

Toshiaki Saya
Corporate Officer

Toshihiro Inoue
Division Manager - Synthetic Latex

Corporate Officer

Tomoyuki Kose
Plant Manager - Mizushima Plant
ZEON GROUPCORPORATE REPORT 201432

Herein, we disclose a portion of our earnings data.
For more details on our financial data, please see Fact Book 2014 in the IR sectionof our website: http://www.zeon.co.jp/ir_e/library/factbook.html
Graphs illustrating our consolidated net sales, consolidated operating income, andnet sales by region can be found on page 3.
A graph outlining our R&D expenses is on page 17.

Five-year summarized financial data
(million yen)

2009

2010

2011

2012

2013

225,878

270,383

262,842

250,763296,427

—

18%

19%

21%

22%

Operating income

9,319

35,29532,123

23,69629,901

Ordinary income

9,448

33,62331,48725,21232,561

Net income

5,020

18,303

19,127

14,75019,650Total assets

281,053

290,596

311,925

350,508

370,872

Net assets

108,072

118,767

135,480

162,057

181,414

Capital expenditures

11,326

10,32922,99523,48927,111

Depreciation & amortization

22,25621,12519,885

18,122

17,068R&D expenses

8,954

9,532

11,106

11,895

12,661

Environmental and Safety Investment*

1,760

470

2,670

2,160

3,470

—

34

101

70

98

Operating margin

4.1%

13.1%

12.2%

9.4%

10.1%

Return on Equity (ROE)

5.0%

16.7%

15.5%

10.1%

11.7%

Equity ratio

37.2%

39.5%

42.5%

45.2%

47.9%

BPS

443.2

497.1

573

685.6

783.1

172,981

171,828

176,444

188,451

189,457

1,726

8,695

(1,595)(1,803)(5,222)

Net cash provided by (used in) operating activities

42,956

48,10032,00933,061

36,396

Net cash provided by (used in) investing activities(12,346)(9,635)(27,644)(24,858)(31,513)

Net cash provided by (used in) financing activities(28,884)(29,770)(5,960)(10,006)(10,105)

Dividend per share (¥)

6.0

10.0

11.0

12.0

13.0

Employees (people)

2,815

2,836

2,857

3,136

3,186

Lost-time accident rates

0.00

0.00

0.47

0.46

0.46

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

234

263

256

237

243

CO2 emissions (1,000 tons)

624

695

670

601

640

Net sales
Ratio of overseas production

Social Contribution Investment*Interest-bearing debt
Cash flows*ZEON Corporation only

33

ZEON GROUPCORPORATE REPORT 2014

Share information
ZEON’s shares are listed on the 1st section of the Tokyo Stock Exchange. The company has a total number of common shares outstanding of
242,075,000. As of March 31, 2014, there were 11,705 shareholders (increase of 917 registered shareholders at the end of the previous fiscal
year). In accordance with our basic policy to consistently and stably distribute surplus earnings to our shareholders, in FY2013 we paid out aper-share annual dividend of 13 yen, an increase of one yen higher than a year earlier. Moreover, in February 2014, we repurchased 4,876,000
shares from the open market.
■ Shareholder information (as of March 31, 2014)■ Dividends

Treasury stock

15,283,000 shares

Financial institutions& securities companies
96,662,000 shares(39.9%)(6.3%)
Individuals & others
28,635,000 shares(11.8%)

(yen)
15

13

12
11

10

10

6
Other domestic
institutional investors
55,864,000 shares(23.1%)

5

Foreign investors
45,628,000 shares(18.9%)■ Share price trends (last day of March)

0

2009

2010

2011

2013 (FY)2012■ Market capitalization trends (last day of March)

(yen)
1,000

934

(100 million yen)
2,500

2,358

2,261

2012

2013 (FY)

974
767

767

2,000

750

546

1,500

1,857

1,857

2010

2011

1,322

500
1,000
250

500

0

2009

2010

2011

2013 (FY)

2012

0

2009

Environmental information
Each year, we set goals and work to alleviate our burden on the environment. We are moving forward with large-scale investment for aclean fuel conversion program to switch from heavy oils to LNG at our plants to reduce our greenhouse gas emissions and to conserve energy
consumption. In FY2009, we achieved the goals for the energy consumption unit, which is a yardstick for energy conservation, set by the Japan
Chemical Industry Association (JCIA) (80% of levels in FY1990 by sometime between FY2008-FY2012). Since then, we have set our own
independent goals and have been making an average improvement of 1% annually.
■ Energy usage per net sales■ CO2 emissions(crude oil equivalent, kL/million yen)
1.10

(1,000 tons)
900

1.10

800

1.05

700

6241.00

1.05

1.04

1.00

0.97

0.97

600

0.95

0.95

500
0.90

400

0.85

0.82

0.80

695

670
601

640

0.95
0.90

300

0.85

200

0.80

100
0

2009

2010

2011

2012

2013 (FY)

0

2009

2010

2011

2012

2013 (FY)ZEON GROUPCORPORATE REPORT 201434

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

Global bases (as of April 1, 2014)
Europe■Zeon Chemicals Europe Ltd.

■

Zeon Europe GmbH■■

Zeon Europe GmbH - Branch in France■

Zeon Europe GmbH - Branch in Spain■

Zeon Europe GmbH - Branch in Italy
Zeon Chemicals Europe Ltd.
U.K. Plant

Telene S.A.S.

Zeon Europe GmbH

Asia and Oceania
Zeon Polymix (Guangzhou) Co., Ltd.

Zeon Kasei (Changshu) Co., Ltd.

Zeon Advanced Polymix Co., Ltd.

35

ZEON GROUPCORPORATE REPORT 2014

Zeon Chemicals (Thailand) Co., Ltd.

Zeon Manufacturing Vietnam Co., Ltd.

■

Zeon (Shanghai) Co., Ltd.

■

Zeon Trading (Shanghai) Co., Ltd.

■

Shanghai Zeon Co., Ltd.

■

Zeon Polymix (Guangzhou) Co., Ltd.

■

Takehara Zeon (Shanghai) Co., Ltd.

■

Suzhou Rui Hong Electronic Chemicals Co., Ltd.

■

Zeon Kasei (Changshu) Co., Ltd.

■

Zeon Korea Co., Ltd.

■

Zeon Shinhwa Inc.

■

Zeon CSC Corporation■

Zeon Asia Pte Ltd.

■

Zeon Asia Malaysia Sdn. Bhd.

■

Zeon Chemicals Singapore Pte. Ltd■

Zeon Chemicals (Thailand) Co., Ltd.

■

Zeon Advanced Polymix Co., Ltd.

■

Zeon Manufacturing Vietnam Co., Ltd.

■Production Site

●Sales Office

Japan (as of April 1, 2014)■

Zeon Chemicals L.P.
Kentucky Plant

Zeon Chemicals L.P.
R&D Center

Zeon Corporation■

Head Office■Tokuyama Plant■

R&D Center■

Mizushima Plant■

Takaoka Plant■

Osaka Office■

Kawasaki Plant■

Nagoya Office■Zeon Kasei Co., Ltd.

■Tokyo Zairyo Co., Ltd■

Zeon North Co., Ltd.

■

Zeon Yamaguchi Co., Ltd.

■

Zeon F&B Co., Ltd.

■

Zeon Medical Inc.

■

Zeon Polymix Inc.

■RIMTEC Corporation■

Tohpe Corporation■

Zeon Chemicals Yonezawa Co., Ltd.

■

Ibaraki Zeon Kasei Co., Ltd.

■

Okayama Butadiene Co., Ltd.

■Zis Information Technology Co., Ltd.

■
Tokuyama
Plant■
Mizushima
Plant

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

Head OfficeZeon Chemicals L.P.
Texas Plant

The Americas■■

Mizushima Plant

Takaoka Plant

Tokuyama Plant

Kawasaki Plant/R&D Center

Zeon Chemicals L.P.
■

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

Zeon Chemicals L.P. Kentucky Plant■

Zeon Chemicals L.P. Mississippi Plant■

Zeon Chemicals L.P. Texas Plant

Zeon do Brasil Ltda

ZEON GROUPCORPORATE REPORT 2014

36

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

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

37

ZEON GROUPCORPORATE REPORT 2014

●Elastomer Materials Business▲Specialty Materials Business■Other Business

ZEON Group (Non consolidated subsidiary)

The Americas

Japan

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

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

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

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

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

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

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

Asia and Oceania

Asia and Oceania

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

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

Shanghai Zeon Co., Ltd. ●No.380, Shennan Road, Zinzhuang Industry District, Minhang, Shanghai, 201108,
China
Business focus Manufacture and sale of rubber compounds (CM)
Zeon Polymix (Guangzhou) Co., Ltd. ●Jing Quan 1st Road, Yong He Economic Zone, Guangzhou, 511356, China
Business focus Manufacture and sale of rubber compounds (CM)
Zeon Shinhwa Inc. ▲■504 Diplomatic Center B/D, 1376-1, Seocho-Dong, Seocho-Gu, Seoul, 137-070, Korea
Business focus Sale of electronic materials
Zeon Asia Pte Ltd. ●▲331 North Bridge Road, #20-01/02, Odeon Towers, Singapore 188720
Business focus Sale, export, and import of synthetic rubbers, synthetic latex
and petroleum resins
Zeon Chemicals Singapore Pte. Ltd ●331 N Bridge Rd, Singapore 188720
Business focus Manufacture of synthetic rubbers
Zeon Chemicals (Thailand) Co., Ltd. ●3 Soi G-14, Pakorn-Songkhrorad Road, Tambol Huaypong, Amphur Muangrayong,
Rayong 21150, Thailand
Business focus Manufacture and sale of petroleum resins

Takehara Zeon (Shanghai) Co., Ltd. ●No.380, Shennan Road, Zinzhuang Industry District, Minhang, Shanghai, 201108, China
Business focus Manufacture and sale of silicon rubber compounds (CM)Suzhou Rui Hong Electronic Chemicals Co., Ltd. ▲No.501, Minfeng Road, Economic Development Zone, Wuzhong District, Suzuhou City,
Jiangsu, 215124, China
Business focus Manufacture and sale of photoresist
Zeon Korea Co., Ltd. ●▲No. 403, 4Fl., City Air Tower 159-9 Samseong-dong Gangnam-gu Seoul, 135-973, Korea
Business focus Sales and import of optical materials, electronic materials, synthetic resins,
synthetic rubbers
Zeon CSC Corporation ▲3rd Fl. 266, Sec. 1, Wen Hwa 2 Road, Linkou Dist., New Taipei City 24448, Taiwan, R.O.C.
Business focus Sale of optical materials
Zeon Asia Malaysia Sdn. Bhd. ●Unit 208, Block B, Phileo Damansara II, No.15, Jalan16/11, Off Jalan Damansara, 46350
Petaling Jaya, Selangor, Malaysia
Business focus Sales of synthetic latexes
Zeon Advanced Polymix Co., Ltd. ●591 UBCII BLDG, Office No.2206, 22thFL, Sukhumvit 33rd, Klongton Nua, Wattana,
Bangkok 10110 Thailand
Business focus Manufacture and sale of rubber compounds (CM)
Zeon Manufacturing Vietnam Co., Ltd.
Land Lot No: IN1-6A and IN1-6B, VSIP Haiphong Township, Industrial and Service Park,
Dinh Vu-Cat Hai Economic Zone, Thuy Nguyen District, Haiphong city, Vietnam
Business focus Manufacture and sale of packing containers

ZEON GROUPCORPORATE REPORT 2014

38

ZEON Group History
1960

1970

1980

1990

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

Powder Slush Compounds

MedicalSupplementary artificial heartLatex(paper manufacturing)Specialty synthetic rubber(NBR & AR for automotive parts)

C4

Hollow latex(paper manufacturing)

VP Latex(footwear)

Hydrogenated nitrile rubber (Zetpol®)Toner

Commodity synthetic rubber(SBR & BR for tires)

Polymerized toner

C5

Commodity synthetic rubberwith modified terminals

ChemicalsC5 petroleum resin(roadmarking paints)

Isoprene rubber (IR)(tires)Specialty
Chemicals

Thermoplastic elastomer SIS(adhesives)

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

Electronic
Materials

Specialty
Plastics

Dicyclopentadiene

Cyclo-olefin polymers (COP)(lenses, prisms)

RIM
GPB: ZEON process of butadiene. This is a proprietary ZEON
technology used to extract highly pure butadiene from C4
fraction.

GPI: ZEON process of isoprene. This is a proprietary ZEON
technology used to extract isoprene and other highly pureeffective substances from C5 fraction.

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

39

ZEON GROUPCORPORATE REPORT 2014

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

Developed proprietary GPB and GPI technologies that lead the world
In the petrochemical industry, which also uses crude oil as a raw
material, technological capabilities are a key element impacting thecompetitive strength of a company. ZEON, aiming to secure butadiene,
which is the raw material used for producing PVC and synthetic rubber,developed the GPB process in 1965 to efficiently extract high-grade
butadiene from C4 fraction. Moreover, in 1971, the company developed
the GPI process, to efficiently extract isoprene, the raw material for
isoprene rubber (IR), and other useful components, from C5 fraction.
These are proprietary ZEON technologies. The company is exporting
its GPB technologies to countries around the world. This contributes
substantially to the company’s competitive edge and promotes the ZEON
name around the world.

2000

2010

Termination of PVC production
and divestment
Balloon catheter (IABP)

Energymaterials

Four core catheter products

Enhanced low temperature PVC Powder-slush compound(used as an automobile instrument panel material)

Stents (bile duct sheath)

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

Water-based binder
for mobile LIB cathode

Solvent-based binder
for mobile LIB anode

Binder for a car LIB cathodeand functional layer

Binder for the mobile
LIB functional layer

Water-based binder for cathodein large-capacity smartphone battery

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

Low-temperature fixing toner(high-speed printers)

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

Asymmetric SIS(disposable diaper film)

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

LCD resist for large substrate sizes

Cyclo-olefin polymers (COP)(commodity use)

Cyclo-olefin polymers (COP)(blue laser)

Optical films
Films made using
the melt extrusion process

Retardation film made using
the successive stretching process

Developing comprehensive uses for C5 fraction
Isoprene rubber, made from raw materials obtained through the GPIprocess, is a useful material which has the same chemical stability as
natural rubber. There are many substances that are derived as a byproductof this process however the GPI process also has advanced functionality
for the separation of these byproducts at a high degree of purity. ZEON
has focused on the effective use of these various substances. The process
was developed and applied to the production of petroleum resins andthermoplastic elastomer SIS in the 1980s, synthetic aroma chemicals and
RIM molded items in the 1990s, and cyclo-olefin polymers in and after
2000. As a result, we have grown to be a business that accounts for alarge share of the global market. Moreover, the technologies fosteredduring this development process are being used in areas other than C5
fraction.

Retardation film made using
the diagonal stretching process

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

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

ZEON GROUPCORPORATE REPORT 201440

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

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

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