Our Value
Tokuyama Value Creation Story

Creation Story
MissionTo create a bright future inharmony with the environment,in collaboration with customers,
based on chemistry

Values• Commitment to customer
satisfaction as a profit source• A broader, loftier perspective• Employees who consistently
surpass their predecessors• Integrity, perseverance,a playful spirit andboldness

FY2021The Path to Realizing Our Vision
Through the steady transformation of our business portfolio, Tokuyama iscontributing to mitigating global warming, and practicing socially responsible
management as stated in Medium-Term Management Plan 2025, and we aremaking progress in realizing our Vision and toward becoming a value-creative
company.
We will strive for sustainable business growth by leveraging human capitaland sharing our Mission and Values.

Medium-Term
Management
Plan 2025
See p. 20for details

FY2025
Transform Business Portfolio

Contribute to Mitigating
Global Warming
Practice Socially Responsible
Management

Tokuyama Value
Value Creation
CreationTokuyama

Value Creation
Creation Strategy
Strategy
Value

Progress
Progress
ofof
Strategy
Growthby
BusinessStrategy
Segment

Management for Sustainable
GrowthCorporate DataDataCorporateVision
Be a value-creativecompany that places
first priority on R&D andmarketing

Be a company thatnever stops challenging
new domains whilerefining and exploiting
its unique strengths

Increase the shareof consolidated netsales from growthbusinesses to60% or
more
Be a company withhealthy employees who
have healthy families
and take pride in theirwork at their company

Percentage ofconsolidated overseas
net sales

50% ormore

GHG emissions(Scope 1 and 2)

Be a company that
fosters bonds with people
in communities andsocieties worldwide

30% reduction*▼Achievement ofcarbon neutrality byFY2050

FY2030
Increase growth businesses’ share of consolidated net sales toMateriality

See p. 40 for details

over 50%

Expedite development/commercialization of next-gen
energy technologies
Reduce GHG emissions (Scope 1 and 2) 30%* by FY2030• Helping to fight global warming• Engaging with local communities• Conserving the environment• Promoting CSR procurement• Preventing accidents andpreparing for disasters• Developing human resources• Developing products and technologies
that address social issues
Step up high-priority CSR initiatives to lay the groundwork forfurther growth and to realize our Vision•P romotion of diversity andcareer fulfillment• Promotion of physical/mental health• Improved chemical management andproduct safety* Base year: FY2019 GHG emissions of approximately 7.26 million tonnes-CO2e

TOKUYAMA REPORT 2024

1

The Path to Value Creation
Historical Background and Social Issues• The Great Depression (1929 to 1941)• World War I (1914 to 1918)• World War II (1939 to 1945)• Environmental pollution problems• Japanese economic miracle (1955 to 1973)

Since our founding in 1918, Tokuyama has worked to accumulate technologies and create new products bydeveloping our inorganic chemicals business, while, from the 1970s, we began addressing social issues by
expanding the scope of businesses, mainly in organic and polymer chemistry. We are continuing to refine thetechnologies that have become the cornerstone of our growth over more than a century, as we strive to create
new value that meets the requirements of the coming age.

Net Sales / Operating Profit
Net sales

Strengthened
environmental
measures

Operating profit

Growth businesses

Traditional businesses

Electronic &Advanced Materials

Chemicals hanged production process
Cof caustic sodaCementLife Science esponded to booming demand forRcement

Eco BusinessEnteredthe petrochemicals businessand contributed to improving lifestyles
and developing infrastructure

Produced soda ash domestically sed byproducts from soda
Uash production as raw
materials for cement

1918

1930

1950

1960

Tokuyama Value Creation

Tokuyama’s PathJapanese industrial development backed by domestically
produced soda ash
Established the foundation for the soda business

1918

1952

Nihon Soda Kogyo Co., Ltd.
(currently Tokuyama Corporation)
was established
Soda ash plant was constructed inTokuyama-cho, Yamaguchi
Prefecture (currently Shunan City)

Began production of high-quality
caustic soda using an electrolyticprocess
Panoramic view of the company
around 1919

1924
First shipment of caustic soda (ammonia-soda process)
1927
First shipment of soda ash

Electrolyzer

Nanyo Plant was constructed
Began cement production using alarge kiln
1964Entered the petrochemicalbusiness
Entered the PVC business
Opened the East Plant to enter theion-exchange membrane business andto expand the petrochemical businessCentral power plantcompleted
Cement plant completed andproduction started

1960

Nanyo No. 1 Kiln (Mammoth Kiln)

1967

1938

19382

Strengthened our facilities and converted our manufacturingmethods in response to the needs of society
Diversified businesses to evolve into a comprehensive
chemical manufacturer

Cement Tokuyama Plant

PVC plant

1972
Started production of isopropyl alcohol using direct hydration process

1940

1975

Began production of calcium chloride

Began production of caustic soda using a diaphragm process

TOKUYAMA REPORT 2024

1970

Tokuyama Value Creation

Progress of Growth
Strategy

Value Creation Strategy

Management for Sustainable
GrowthCorporate Data• COVID-19 pandemic• Declining birthrate and aging population in Japan• Digital revolution (from 1995)• Bankruptcy of Lehman Brothers (2008)• Japanese asset price bubble (1986 to 1991)• Kyoto Protocol (1997)• Adoption of the Sustainable Development Goals or SDGs (2015)• Oil shocks (1973, 1979) ushed ahead withP
zero-emission policies
and resource recycling hifted toward energy
S
conservation

 ctive investment inA
new businesses xpanded businessesE
globally and created
new businesses nhanced competitive powerEby integrating businesses andspinning off companies

FY2023 Net sales¥341.9 billion

 ntered high value-added fields,Esuch as electronic materials andfine chemicals

FY2023 Operatingprofit¥25.6 billion

1980

1990

2000

Expansion of new businesses such as specialty and processing
types, and more overseas operations underpinning our growth
as a global company

1978 Entered the dental materials and equipment business1982 Entered the fine chemicals business1983 Entered the diagnostic systems business1984 Entered the high-purity polycrystalline silicon business1985 Entered the high-purity aluminum nitride business2001 E stablished Tokuyama Dental by spinning off of the dental materialsand equipment business
2004 Spin off the ion-exchange membrane business to integrate with ASTOM
2005
Established Tokuyama Chemicals(Zhejiang) to meet the growing global
demand for fumed silica
Tokuyama Chemicals (Zhejiang)

Established Tokuyama Chiyoda
Gypsum (waste gypsum board
recycling business)

Opened Kashima Factory as amanufacturing base for finechemicals

2020
Kashima Factory

Established the Tsukuba ResearchLaboratory as a base for thedevelopment of specialty businesses

Established Formosa Tokuyama
Advanced Chemicals (FTAC) to respondto needs for high-purity IPAFormosa Tokuyama Advanced
Chemicals (FTAC)

2021 E stablished the Center for Commercialization of Advanced
Technology in Yanai City, Yamaguchi Prefecture
Made A&T (diagnostic systems company) a wholly owned subsidiary

1989
Established Tokuyama America,established Tokuyama Europe

2023

Providing new value in the fields of electronics, healthcare,and the environment
Aiming to transform into a value creation company

2011

1985

1989

2010

Tsukuba Research Laboratory

1996 ‌Established the current Tokuyama Singapore and Taiwan
Tokuyama as manufacturing and sales bases for high-purity
IPA, etc.

2022 E stablished STAC (manufacturing and sales of high-purityIPA) in South Korea
2024 Opened the No. 2 Tsukuba Research Laboratory

TOKUYAMA REPORT 20243

Tokuyama Value Creation
Tokuyama Will Create New Value in Harmony with the Environment by Supplying Products That
Address Social Issues.

Tokuyama at a Glance

Our product lines anddemonstrating prowessin various markets

Semiconductor-grade
polycrystalline siliconHigh-purity IPA1 forelectronics
manufacturing

Fumed silica for CMP2

その他の地域153億円

SiliconOverseas Sales
Companies,etc.

ICchemicals

Recycling

Other

Waste processing

High-purity
aluminum nitride

12%
Electronic &Advanced Materials

22%

CementCement19%

SilicaConsolidated Net Sales

Fine
Chemicals¥341.9 billion(FY2023)

Cement

ThermalManagement
Materials

Microporous
FilmDental
Materials
andEquipment

Life Science

12%

Eco Business2%

MedicalDiagnosis
Systems
Environment

Chemicals

33%

Chlor Alkali
and Vinyl Chloride

Soda
Ash andCalciumChloride

Ion-Exchange
Membranes

Photochromic materials
for eyeglass lenses

Caustic soda

OMNICHROMA®
dental fillingcomposite resin
PVC resin
Soda ash

1. IPA: Isopropyl alcohol
2. CMP: Chemical mechanical polishing

4

TOKUYAMA REPORT 2024

Waste gypsum board
recyclingTokuyama Value Creation

Value Creation Strategy

Progress of Growth
StrategyManagement for Sustainable
GrowthCorporate Data

Electronic & Advanced Materials

Competitive products used insemiconductor manufacturing processes
Semiconductor-grade
polycrystalline siliconHigh-purity IPA forelectronics manufacturing

Fumed silica for CMP

High-purity aluminum
nitride powder

20%

Tier 1

No. 1

No. 1

worldwide share

manufacturer

worldwide shareworldwide share

Typical products

Typical applications

Typical products

Typical applications

High-purity polycrystalline
siliconSemiconductor-grade
silicon wafers

Fumed silica

CMP slurry

High-purity IPA forelectronics manufacturing

Precision cleaning ofsemiconductor wafers
and electronic devices

High-purity aluminum
nitride powder

Components forsemiconductor
manufacturing equipment

Life Science

Eco BusinessPhotochromic materials foreyeglass lenses

Dental materials andequipment

The world’s first waste gypsum board in a non-kiln
resource cycle

20%

94

100%

No. 2 worldwide share

Countries andregions with sales

Fully recycled

Typical products

Typical applications

Typical products

Typical applications

Photochromic materials
for eyeglass lenses

Photochromic lens

Dihydrate gypsum(continuous large
recrystallizationtechnology)

Gypsum board

Dental fillingcomposite resin

Dental treatment

TOKUYAMA REPORT 2024

5

ContentsSection

1

Tokuyama Value Creation

Section2

Value Creation Strategy

Section3

Our Value Creation Story��������������������������������������������������������������������������������������� 1
The Path to Value Creation���������������������������������������������������������������������������������� 2
Tokuyama Value Creation�������������������������������������������������������������������������������������� 4
Contents/Editorial Policy���������������������������������������������������������������������������������������� 6

Message from the President������������������������������������������������������������������������������ 8
Value Creation Process����������������������������������������������������������������������������������������14
Tokuyama’s Strengths Supporting Value Creation��������������������16
Message from the CFO����������������������������������������������������������������������������������������18

Progress of Medium-Term Management Plan 2025���������������20

Progress of Growth Strategy

Growth Drivers��������������������������������������������������������������������������������������������������������������30
Dialog with Employees������������������������������������������������������������������������������������������36

Message from the Executive Officer
in Charge of Sustainability���������������������������������������������������������������������������������38
Vision and Materiality����������������������������������������������������������������������������������������������40

Section4

Progress of Medium-Term Management Plan 2025
by Business Segment��������������������������������������������������������������������������������������������22
Progress of Strategy by Business Segment������������������������������������24

Management for
Sustainable Growth

Disclosures Based on TCFD Recommendations�����������������������44
Compliance����������������������������������������������������������������������������������������������������������������������47
Stakeholder Engagement����������������������������������������������������������������������������������47
Dialog with External Directors������������������������������������������������������������������������48
Management Team���������������������������������������������������������������������������������������������������50
Corporate Governance�����������������������������������������������������������������������������������������52
Risk Management������������������������������������������������������������������������������������������������������56

Section56

TOKUYAMA REPORT 2024

Corporate Data

Financial and Non-Financial Highlights��������������������������������������������������� 58
Corporate Data�������������������������������������������������������������������������������������������������������������� 62

Tokuyama Value Creation

Value Creation Strategy

Progress of Growth
StrategyManagement for Sustainable
GrowthCorporate Data

Editorial Policy
The Tokuyama Report is published to communicate theCompany’s management policy and medium- to long-term
strategy to stakeholders in a way that is easily understood.
When preparing this report, we conducted interviews withinvestors and a survey within the Company about theFY2023 report. The feedback we received is reflected in
our planning. We hope that this report leads to better
communication with our stakeholders as well as a deeper
understanding of the Tokuyama Group.
This report briefly outlines information that is highly
relevant to the value creation story. For more detailed IR and/or CSR information, please visit the Company’s website.

Period Covered
FY2023 (April 1, 2023 to March 31, 2024)
Some activities and information included relates to FY2022 or earlier or isscheduled for FY2024 or later.

Report ScopeTokuyama Corporation and consolidated subsidiaries (50 companies)• If the reported scope is different for some data in this report, the different scope
will be cited.
• In principle, entities listed as Tokuyama in this report generally refer to Tokuyama
Corporation and the Tokuyama Group.

Reference Guidelines• The Ministry of Economy, Trade and Industry, Guidance forIntegrated Corporate Disclosure and Company-Investor Dialogs
for Collaborative Value Creation 2.0• IFRS Foundation
Integrated Reporting Framework• Global Reporting Initiative (GRI)GRI Sustainability Reporting Standards• Task Force on Climate-related Financial Disclosures (TFCD)
Final Report: Recommendations of the Task Force on Climaterelated Financial Disclosures• The Greenhouse Gas Protocol - A Corporate Accounting andReporting Standard REVISED EDITION

Information Framework

Overview of Strategy

Financial

Non-Financial

Tokuyama Report (Integrated Report)
This report includes corporate activities for a wide range of stakeholders,covering both financial and non-financial aspects of Tokuyama at present andfor the future that we aim to achieve.
https://www.tokuyama.co.jp/eng/ir/report/annual_rep.html

CSR Website
Provides more detailed information on
Tokuyama’s CSR activities

Investors Website
Useful information for shareholders andDetails and Latest Data

investors, organized as an IR Library• Financial documents (financial summaries,financial briefing materials, etc.)

Tokuyama TCFD Report• Annual securities reports

Outlines initiatives against climate change
based on the TCFD’s four recommendations:
governance, strategy, risk management, andmetrics and targets• Corporate governance reports• Business reports

In addition, in FY2024, we introduced achart generator as a tool to check,

https://www.tokuyama.co.jp/eng/csr/

https://www.tokuyama.co.jp/eng/csr/pdf/2024_tokuyama_tcfd_e.pdf

compare, and analyze performance,

Sustainability Data Book

financial, and ESG-related information,

Mainly includes data for understanding
today’s Tokuyama based on the perspectiveof responsible care (sustainability)

so please do make use of it.

https://www.tokuyama.co.jp/eng/ir/

Cautionary Note on Forward-Looking Statements
This report contains forward-looking statements on the Company’s plans,strategies, operating performance and other matters. These forward-looking
statements are the Company’s assessments based on information available at thetime of this report’s preparation. Statements in this report are subject to various
risks and uncertainties. Tokuyama's actual activities and performance may differ
significantly from these projections. The Company’s actual activities and/or
operating performance can differ materially from these forward-looking statements
as a result of many factors, including but not limited to changes in economicconditions, the operating environment, demand trends, and exchange rates.

https://www.tokuyama.co.jp/eng/csr/report/index.html

Disclaimer
This report is for information only and is not intended as a solicitation. TheCompany assumes no liability for any losses due to investment decisions madeby relying on forward-looking statements, numerical targets, or other information
contained here.

TOKUYAMA REPORT 20247