The DIC WAY
MissionThrough constant innovation, the DIC Group strives
to create enhanced value and to contribute tosustainable development for its customers and society.

MissionVisionVisionSpiritSpiritColor & Comfort by Chemistry

Drive, Integrity, Dedication, Collaboration, Harmony

Making it Colorful
DIC helps make life colorful

Innovation throughCompounding
DIC brings innovation to society through its corecompounding technologies

Specialty Solutions
DIC draws on its expertise and comprehensive
strengths to offer solutions

1̲ DIC Report 2019

CoQQeFWLQJ Whe DIC Group aQG LWs 6WaNeholGers

DIC Group CoPPuQLFaWLoQs Tools
The DIC Group uses a variety of tools to promote communication withits many stakeholders to encourage greater awareness of the Group’s
activities. More detailed sustainability-related information and data canbe found on the DIC website.

PrLQWeGPD)î)orP PublLFaWLoQs

Reports on activities
DIC 5eporW

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DIC 5eporW)LQaQFLal 6eFWLoQ

Contents
The DIC Group: A Global Powerhouse)LQaQFLal aQG 1oQÀQaQFLal IQIorPaWLoQ
A 0essaJe IroP Whe PresLGeQW
1ew 0eGLuPTerP 0aQaJePeQW PlaQ: DIC

3
5
7
13

The DIC Group·s ApproaFh Wo 9alue CreaWLoQ
0essaJes IroP Top ([eFuWLYes aW 5eJLoQal +eaGTuarWers)LsFal <ear  DIC Group TopLFs
The DIC Group·s %usLQess PorWIolLo
Packaging & Graphic
Color & Display
Functional Products

Summary integrated
report (published annually)(printed publication)

Complete report(published annually)(PDF-form publication)

Report on resultsof operations and¿QDQFLDOFRQGLWLRQ
(published annually)(PDF-form publication)

15
17
19

21
23
25

Special Feature
ProGuFW DeYelopPeQW DesLJQeG Wo CreaWe 1ew 9alue
Water-Based Flexo Ink for Flexible Packaging (Marine Flex)
Water-Based Water- and Oil-Resistant Coating Varnish (HYDRECT)

27
29

Topic

DIC Global :ebsLWe

Real-time informationWEB

http://www.dic-global.com/en/

Umbrella website providing information to
the global public about the DIC Group andreports on its various activities; updated
as necessary

AbouW WhLs 5eporW
In previous years, the DIC Group published a combined corporate
profile and sustainability report with the aim of presenting a clear,easy-to-understand picture of the Group and its sustainability
initiatives. Since 2018, the Group has published the DIC Report as anintegrated report, which combines ¿nancial information, encompassing
consolidated operating results and corporate strategies, andnon¿nancial (sustainability) information. The Group has published asimpli¿ed summary version of the report (printed), which focuses on
key highlights, and a more detailed complete version (PDF), whichcontains extensive quantitative data.
DIC 5eporW CoPpleWe YersLoQ PD)IorP publLFaWLoQ
WEB

http://www.dic-global.com/en/csr/annual/Note: $s used herein, the term ³$sia–Paci¿c region´²a geographic designation that, like ³Europe and the $mericas´ and³Greater China,´ represents a grouping of companies overseen by a regional headquarters²refers to $sia (excluding
Japan and Greater China) and Oceania. The term ³$sia and Oceania´ refers to $sia (excluding Japan) and Oceania.

/LQN wLWh Whe DIC :ebsLWe
The ( WEB ) mark indicates that more detailed information and/or
data can be found on the indicated page of the DIC global website.

Sun Chemical developed SunColorBox, a unique setof tools and services

31

CorporaWe GoYerQaQFe
DLreFWors AuGLW 6uperYLsor\ %oarG 0ePbers aQG ([eFuWLYe 2IÀFers
2YerYLew oI 6usWaLQabLlLW\

35

0aWerLalLW\ AQal\sLs

38

Compliance
BCM and Crisis Management
Information Security

32

37

39
39
40

Environment, Safety and Health (ESH)
Quality
Human Resources Management
Sustainable Procurement

41
46
47
50

Business Models that Respond to Social Imperatives
New Technology Development and Value Creation
Harmony with the Community and Social Contributions
Communication with Stakeholders

51
52
53
54

)LQaQFLal 5eporW Ior )LsFal <ear 55

ThLrGParW\ 9erLÀFaWLoQ

62

DIC Group 0LlesWoQes

63

DIC Jlobal websLWe WEB http://www.dic-global.com/en/

6Fope oI 5eporWLQJIn principle, this report provides information on DIC Corporation and consolidated
DIC Group companies worldwide. For information on the scope of reporting for
ESH-related initiatives, please visit the pertinent page of the DIC website.
WEB http://www.dic-global.com/en/csr/pdf/dic_report_scope_en_2019.pdf

5eporWLQJ PerLoG
Fiscal year 2018 (January 1–December 31, 2018)

DaWe oI PublLFaWLoQ

CoYer DesLJQ
The cover of this year’s DIC Report derives its
inspiration from the DIC Group’s ³Color & Comfort´brand slogan, employing bright colors that evoke
the efforts of the Group, a global powerhouse, toenrich and add vibrancy to society and the lives ofpeople everywhere.

June 2019 (The next report is scheduled for publication in June 2020.)

GuLGelLQes 5eIereQFeG
Guidelines referenced in the preparation of this report were ISO 26000, theInternational Organization for Standardization’s standard for social responsibility,
released in 2010; Japan’s Responsible Care Code; and the Global Reporting
Initiative (GRI)’s GRI Standards.

DIC Report 2019 ̲2The DIC Group: A Global Powerhouse
Net Sales

Corporate Data

(Billions of yen)

1,000

Registered name:

Number of subsidiaries
and affiliates:(

174 Domestic: 32
Overseas: 142

805.5

789.4

400

751.4

600

820.0

Date of foundation:
Date of incorporation:
Paid-in capital:
Number of employees:

800

DIC Building, 7-20,
Nihonbashi 3-chome,
Chuo-ku, Tokyo 103-8233,
Japan
February 15, 1908
March 15, 1937
¥96.6 billion
20,620(Nonconsolidated: 3,290)’14 ’15’16’17 ’18（FY）

830.1

Corporate headquarters:

200
0

)

Operating Income(Billions of yen)60
Corporate headquarters (Tokyo)

50

48.4

56.5

54.2

20

51.1

30

41.1

40

’14

’15 ’16 ’17 ’18 （FY）

10
Note: Corporate data is as of December 31,
2018. Net sales and operating income
are for fiscal year 2018.

Global Network

DIC (China) Co., Ltd. (PRC)0

DIC has 174 companies in 64 countries and territories around the world.

Europe

52

32
Asia

55

Japan

Europe and Africa

Japan

Sun Chemical Groupand others

Net sales
DIC Asia Pacific Pte Ltd (Singapore)¥186.0 billion

Operating income

DIC Corporation, DIC Graphics
Corporation and others5¥11.5 billion

AfricaNet sales

Asia and Oceania(Excluding Japan)

DIC (China) Co., Ltd., DIC Asia
Pacific Pte Ltd and others

Net sales¥164.9 billion

Operating income
Sun Chemical Corporation headquarters(United States)3̲ DIC Report 20192

¥11.9 billion

Oceania¥318.5 billion

Operating income¥26.3 billion

Breakdown of Fiscal Year 2018 Net Sales by Segment

Breakdown of Fiscal Year 2018 Operating Income by Segment

Functional
Products

Functional
Products

33.5%￥805.5billion

51.7%

Color &
Display

Packaging &Graphic

￥48.4

37.3%

Packaging &Graphic

35.7%

billionColor &
Display

14.8%

26.9%

Note: Fiscal year 2018 net sales and operating income as used here include intersegment transactions. For this reason, and because of the existence of transactions classified as “others,”
which are not attributable to reportable segments, these figures differ from reported net sales and operating income.

Breakdown of Fiscal Year 2018 Operating Income by Region

Breakdown of Fiscal Year 2018 Net Sales by Region
Asia and Oceania

Asia and Oceania

20.5%

22.0%

North, Central andSouth America

16.9%￥805.5billionNorth, Central andSouth America

Japan

39.5%

￥48.4

Japan

billion

8.2%

Europe and Africa

Europe and Africa

23.1%

21.2%

48.6%

Note: Operating income as used here includes eliminations (approximately ¥5.8 billion). Accordingly, these percentages do not represent shares of reported operating income.

Principal Global R&D Sites

North
America

14

Polymer
Technical Center —China

Qingdao DIC
Finechemicals (PRC)

Rochdale(United Kingdom)

Cincinnati(United States)

St. Charles(United States)
Midsomer Norton(United Kingdom)North, Central andSouth America
Sun Chemical Group and others

Net sales

Printing Inks
Technical Center–
China

Gallarta (Spain)

Fine Chemical
Technical Center—Korea

Eurolab (Germany)

Central ResearchLaboratories (Japan)¥136.1billion

Operating income¥4.4 billion

14
Central and SouthAmerica

Solid Compound
Technical Center
Asia Pacific (Malaysia)

Polymer Technical Center –Asia Pacific (Thailand)

Pigment TechnicalCenter Asia Pacific(Indonesia)

Printing Inks
Technical Center–
Asia Pacific (Thailand)

DIC/Earthrise Algae
Research Center(United States)

Carlstadt(United States)

DIC Report 2019 ̲4

Financial Information

Net Sales, Operating Income and Operating Margin
Net sales

Operating income

Cash Provided by Operating Activities and Free Cash Flow

Operating margin (%)

Net sales(Billions of yen)

900

Cash provided by operating activities
Free cash flow

(Billions of yen)

830.1

820.0

800
700

6.2%

805.5

789.4

751.4

Operating income(Billions of yen)

80

70

62.5
60

54.2

7.2%

70

6.0%

7.2%

50

51.0

46.4

60

600

40

4.9%
500

50

400

40

300

30

200

20

29.1

30

30.3

20

19.1

19.0
51.1

41.1

54.2

56.5

48.4

100

10

0

0

10

12.6

0
2014

2015

2016

(FY)

2018

2017

-4.7

-5
2014

2015

2016

2017

(FY)

2018

* Owing to an investment of ¥ELOOLRQLQ7DL\R+ROGLQJV&R/WGFDVKXVHGLQLQYHVWLQJ
DFWLYLWLHVLQFUHDVHGLQ¿VFDO\HDUNet Income Attributable to Owners of the Parent and ROE

Capital Expenditure and Investment

Net income attributable to owners of the parent
Return on equity (ROE) (%)(Billions of yen)

70

(Billions of yen)

62.4

50

60

40

38.6

37.4

50

34.8

32.0

30

（%）
30

40

45.1
36.3

25.2

34.0

32.1

30
20

20

14.6
11.3

13.0

12.9

20

10.4

10

10
10

0

2014

2015

2016

2017

2018

(FY)

0

0
2014

2015

2016

2017

2018

(FY)

* Owing to an investment of ¥ELOOLRQLQ7DL\R+ROGLQJV&R/WGFDSLWDOH[SHQGLWXUHDQGLQYHVWPHQWLQFUHDVHGLQ¿VFDO\HDU

Returns to Shareholders* (Dividends per Share and Payout Ratio)

Net Assets, Interest-Bearing Debt and D/C Ratio*
Interest-bearing debt

Net assets

Interim dividend

D/C ratio (%)

Year-end dividend

Payout ratio (%)（%）
40(Billions of yen)

36.9

400

35

（%）
70
300

27.3
274.2

265.7

259.5
200

49.8

60

264.5

241.3

47.2

50

44.0

43.6

44.7

276.7

289.9

307.0

344.0

327.3

20.5
80
60

20

30
2015

2016

2017

2018

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5̲ DIC Report 2019

(FY)

0

0

125

60

65

40

10

60

2014

40

40

2015

2016

20
15

30

10

2014

120
100

100

50

0

25

22.4

150

40
30

100

(Yen)

30

29.4

60

60

5

2017

2018

(FY)

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0

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Global CO2 Emissions and CO2 Emissions per
Unit of Production (DIC Group)
CO 2 emissions

Global Energy Consumption and Energy Consumption per
Unit of Production (DIC Group)
Energy consumption

CO 2 emissions per unit of production(Metric tonnes)(Kg CO2 /metric tonne)

1,000,000

400（GJ/metric tonne）（Thousands of GJ）

14,000900,000

6.000

5.343

700,000

657,000305
659,000

311
659,000

12,000296

289

635,000

618,000

600,000

300

11,127

11,000

5.360

5.144

13,000316

800,000

Energy consumption per unit of production

11,100

5.155

5.104

11,053

10,9025.000

11,37910,000

4.000

9,000
8,000

500,000

200

3.000

7,000
6,000

400,000

5,000

300,000
100

2.000

4,000
3,000

200,000

1.000

2,000

100,000

1,000
0

0
2014

2015

2016

2017

0

(FY)

2018

2014

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2015

2016

2018 (FY)20170* (QHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQLVFDOFXODWHGXVLQJDGMXVWHGSURGXFWLRQYROXPH SDUHQWFRPSDQ\LQ-DSDQRQO\  1RWL¿FDWLRQVXEPLWWHGWR-DSDQ¶V0LQLVWU\RI(FRQRP\7UDGHDQG,QGXVWU\

Environment-Friendly Products as a Percentage of Overall
Product Portfolio (DIC Corporation and DIC Graphics Corporation)（%）

Occupational Accident Frequency Rate (DIC Corporation)(Rate)

100

DIC

1.50

Subsidiaries in Japan

90
80

1.00

70
60

53%

52%

56%

0.50

57%

56%

50
0.00
40

2010

30

2011

2012

2013

2014

2015

2016

2017

2018 (FY)

Note: The frequency rate expresses the frequency of accidents resulting in lost workdays in a fiscal year,
calculated as the number of deaths or injuries per million work hours.

20

Frequency rate ＝

10
0

2014

2015

2016

2017

2018

Number of deaths or injuries due to occupational accidents
Total work hours

× 1,000,000

A frequency rate of 1.00 means one occupational accident resulting in workdays lost in one year
at a site with 500 employees.

(FY)

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LQ¿VFDO\HDUWKHPHWKRGXVHGWRFDOFXODWHHQYLURQPHQWIULHQGO\SURGXFWVKDVFKDQJHG

Average Years of Employment (DIC Corporation)

Female Employees in Management Positions (DIC Corporation)(Number of people)

50

Male employees(Years)

6

41

Average years of employment in fiscal year 2018
Male employees:

（%）

48

Female employees

540

18.4 years Female employees:19.7 years Overall:18.6 years

5.1%
33

25

4.4%
30

20

3.7%

24
20

15

4

28
3

3.1%

20
2.6%

2

2.2%

10
10

1

5
0
1994

2010 2011 2012 2013 2014 2015 2016 2017 2018

(FY)

0

2014

2015

2016

2017

2018

2019

(FY)

0

DIC Report 2019 ̲6

A Message fromthe President

Addressing Social Imperatives
as We Work to Reposition DIC
on a Growth Trajectory
Future vision:“Become a unique global company
that is trusted by society
by providing value (safety andpeace of mind, color and comfort)”
Representative Director,
President and CEO
DIC Corporation

Kaoru Ino7̲ DIC Report 2019

In February 2019, we celebrated DIC’s 111th anniversary. In addition to commanding the top share of the global market for printing
inks, a core business since our establishment, we have succeeded in growing pigments and polymers, both derived from printing inks,
into prosperous components. Today, we provide indispensable products and services to customers in a broad range of industries,
including packaging, housing, automotive, cosmetics, electronics and healthcare.
The DIC Group comprises 174 companies in 64 countries and territories. Approximately 60% of our consolidated net sales are
generated by, and over 70% of our more than 20,000 Group employees are located at, bases outside of Japan. Accordingly, a global
perspective is crucial to any discussion of the Group.
In recent years, the rapid spread of advanced digital technologies, as represented by the increasing importance of artificial
intelligence (AI) and the Internet of Things (IoT), have brought dramatic changes to lifestyles and society, as well as to the businessenvironment. At the same time, social imperatives related to concerns such as climate change, food safety and marine plastics have
EHFRPHLQFUHDVLQJO\XUJHQW$PLGVXFKVLJQL¿FDQWFKDQJHVKRZGRPDWHULDOVPDQXIDFWXUHUVFRQWULEXWHWRVRFLHW\JRLQJIRUZDUG"
Since taking the reins as CEO, I have seen this as my principal mission. Ensuring an accurate grasp of global, dynamic paradigm
shifts is essential to our ability to achieve sustainable growth and also to enhance our intrinsic value. This recognition underpinned the
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VWUHQJWKHQRXUEXVLQHVV¿QDQFLDODQGKXPDQUHVRXUFHVVWUDWHJLHVZKLOHWDNLQJVWHSVWRLPSURYHPDQDJHPHQWHI¿FLHQF\DQGVWUHQJWK| $/RRN%DFNDW',& )LVFDO<HDUV²
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stable earnings bases—e.g., printing inks, pigments and polymers—by responding to environmental concerns, promoting rationalizationand making strategic investments, and create business models that address social imperatives in such areas as electronics, packaging,healthcare and decarbonization. In line with these policies, we focused on strengthening our technology development capabilities and
EXVLQHVVH[SDQVLRQHIIRUWVDVZHOODVRXU¿QDQFLDOEDVH$VDFRQVHTXHQFHERWKEXVLQHVVHVZLWKVWDEOHHDUQLQJVEDVHVDQGJURZWKEXVLQHVVHVUHSRUWHGVWHDG\UHVXOWVRYHUWKHWKUHH\HDUVRIWKHSODQXQGHUSLQQLQJUHFRUGKLJKLQFRPHLQ¿VFDO\HDUVDQG
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WRELOOLRQDQGFRQVROLGDWHGQHWLQFRPHDWWULEXWDEOHWRRZQHUVRIWKHSDUHQWIHOOWRELOOLRQ1RQHWKHOHVVZHGHFODUHGDIXOOWHUPGLYLGHQGRISHUVKDUHDQLQFUHDVHRIIURP¿VFDO\HDUDVDFRQVHTXHQFHRIZKLFKRXUGLYLGHQGSD\RXWUDWLR
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As demonstrated by our performance in fiscal year 2018, our profitability relies heavily on existing core businesses, meaning thatour business structure is vulnerable to macroenvironmental conditions, including rising prices for raw materials. This underscored ourrecognition of the urgency of transforming our business portfolio so that it’s able to withstand demand declines in mature markets andUHSRVLWLRQLQJ',&RQDJURZWKWUDMHFWRU\E\FUHDWLQJQHZEXVLQHVVHVZLWKWKHSRWHQWLDOWREHFRPHPDLQVWD\V,WDOVRFODUL¿HGZKDWZHQHHG
to do as we move toward this new growth trajectory.
,Q¿VFDO\HDUULVNVDULVLQJIURPHFRQRPLFWUHQGVLQWKH3HRSOH¶V5HSXEOLFRI&KLQD 35& DQGZRUOGZLGH²DFRQVHTXHQFHRIWUDGH
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its ability to withstand macroenvironmental changes and drive continuous, robust growth while at the same time applying our inherent
talent for resolving issues to our efforts to implement the strategies of DIC111. Our forecasts for the period include consolidated net sales
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Achievements• Reorganized production system in line with demand trends in mature markets (publication inks and polymers)• Growth in functional pigments business exceeded target• Strengthened foundation of electronics business through capital and business alliance with Taiyo Holdings Co., Ltd.
• Realized continuous growth in net sales and record-high income (fiscal year 2017)• Dividend payout ratio exceeded target, thanks to efforts to maintain/improve financial balance
Challenges• Reform business structure to offset further demand declines in mature markets (publication inks and general processed products)• Establish robust business foundation that is impervious to fluctuations in raw materials prices, taking into
account the decline in profitability in fiscal year 2018, a consequence of rising raw materials prices• Create new mainstay businesses to compensate for shrinking demand for publication inks to reposition DIC on a growth trajectory• Steadily implement strategic investments

DIC Report 2019 ̲8

Promoting business portfolio transformation and an improved management infrastructure with the aim of achieving
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| Realigning Businesses by Illuminating the Relationship Between Social Value and Economic Value$VD¿UVWVWHSLQIRUPXODWLQJ',&ZHUHFRQ¿UPHGRXUYLVLRQIRUWKH',&*URXSLQWKHIXWXUH%HFRPHDXQLTXHJOREDOFRPSDQ\WKDWLVWUXVWHGE\VRFLHW\E\SURYLGLQJYDOXH VDIHW\DQGSHDFHRIPLQGFRORUDQGFRPIRUW

DIC’s future vision

Two strategies for businessportfolio transformation

Social value● A company that possesses a wide range of global
1REXVLQHVVHVWKDWHYRNHRXUGLVWLQFWLYH³&RORU 
Comfort” brand slogan

Target Areas• Sustainability• Contribution tomarkets● A company that realizes corporate value throughthe promotion of diversity, thereby earning respect
and admiration from the global community

Economic value• Growth• Profitability• Capital efficiency● A company that works with employees, customers
and shareholders to create value and build an evenmore attractive DIC brandTo ensure that we realize this vision, we established the Intrinsic Value Working Group, comprising mid-tier and young employees,
WKURXJKZKLFKZHSURPRWHGH[WHQVLYHGHEDWHDQGGLVFXVVLRQDLPHGDWEHWWHUGH¿QLQJWKHYDOXHWKDW',&SURYLGHVWRVRFLHW\LGHQWLI\LQJ
the challenges we must address and determining how best we can contribute to further sustainability through our operations. This process
led us to review existing businesses from the twin perspectives of “social value” and “economic value” and to advance business portfoliotransformation in a manner that addresses key imperatives arising from social changes such as the spread of digitization and environment,
safety and health (ESH)-related issues, including those affecting the global environment and food supplies.
/HYHUDJLQJRXUSRVLWLRQDVDPDQXIDFWXUHURI¿QHFKHPLFDOVZHKDYHVRXJKWFRQVLVWHQWO\WRSURYLGHIXQFWLRQDOLW\DQGDGGHGYDOXHWR
society in a multitude of forms, thereby helping make people’s lives more convenient. We have also always maintained an awareness ofthe negative aspects of our operations, including the impact of our production activities on the environment. Going forward, we will further
advance this approach with the goal of becoming an organization capable of delivering increased functionality and other features that
improve convenience and of providing social value, one facet of which is environmental value. We will bolster efforts to help address ESHrelated issues—including climate change, sustainable resource use and human health—through our operations to provide enhanced valuethat contributes to a richer, more vibrant society. Combining economic value with social value will enable us to realize sustainable growth
IRUWKH',&*URXS$QDWXUDOH[WHQVLRQRIWKLVDSSURDFKLVWKHPLOHVWRQHSHUIRUPDQFHWDUJHWVZHKDYHVHWIRU¿VFDO\HDUQDPHO\FRQVROLGDWHGQHWVDOHVRIWULOOLRQRSHUDWLQJLQFRPHRIELOOLRQDQGQHWDVVHWVRIELOOLRQ5HFRJQL]LQJWKHDFKLHYHPHQWRI
these targets as critical to becoming a unique global company that is trusted by society, over the three years of DIC111 we will emphasize
advancing qualitative reforms in existing businesses and commercializing new businesses, and on accelerating disruptive growth through
VWUDWHJLFPHUJHUVDQGDFTXLVLWLRQV 0 $V 

140.02025 Targets

DIC102

DIC105

DIC108

DIC111

120.0“Shift from a product-specificto a market-focusedmanagement approach”“Business domains”“Growth scenario”“Business portfoliotransformation”

100.0

Recover from the2008 financial crisis

Restructure printing
inks business andexpand businesses
that will drive growth

Improve profitability,
particularly in businesses
that will drive growth

Reposition DIC on a
growth trajectory throughbusiness portfoliotransformation

80.0(Trillions of yen)

Net sales ¥1.0
Operatingincome ¥0.1
Net assets ¥0.5

14.0%
12.0%

¥70 billion level¥53 billion level

60.0

10.0%

¥61 billion level

8.0%¥45 billion level

Business Portfolio
Transformation¥37 billion level

40.0

Operating margin

Operating income (Billions of yen)

Reposition DIC on a growth trajectory through business portfolio transformation

52.0

60.0

70.0

20.0

6.0%

• Qualitative reforms
in businesses• Commercialization of
new businesses• Disruptive growththrough strategic M&As

4.0%
2.0%

Operating margin

0.0%

0.0
2009

9̲ DIC Report 2019

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2025

1

Reorganization of business segments

Effective from fiscal year 2019, we have reorganized our five existing business
VHJPHQWVVKLIWLQJRXUIRFXVWRYDOXHSURYLGHGLQWRWKUHHQHZVHJPHQWV3DFNDJLQJ *UDSKLF&RORU 'LVSOD\DQG)XQFWLRQDO3URGXFWV$VDFRPSDQ\WKDWSURYLGHVFRPSOH[products to customers in a broad range of industries, we often hear from investors that
WKH\¿QGLWGLI¿FXOWWRXQGHUVWDQGRXUFRUSRUDWHGLUHFWLRQ,QWKDWVHQVH,EHOLHYHWKDWLW¶V
important for us to have a business structure and message that are simple and easy forexternal stakeholders to understand and at the same time to ensure that all employees
are on the same wavelength as we work together to confront challenges ahead.

● Packaging & Graphic
Packaging materials that bring safety
and peace of mind
● Color & Display
Color and display materials thatmake life colorful● )XQFWLRQDO3URGXFWVFunctional products that add comfort

Packaging & Graphic
To date, we have pursued independent strategies for printing inks, coextruded multilayer¿OPVDQGDGKHVLYHV*URXSLQJWKHVHEXVLQHVVHVWRJHWKHUXQGHUWKHKHDGLQJ³SDFNDJLQJ´will bring together common issues such as food safety and food loss. Looking ahead,
ZHZLOOFDSLWDOL]HRQRXUDELOLW\WRSURYLGHSULQWLQJLQNV¿OPVDQGDGKHVLYHVWRPDUVKDO
technologies and know-how to offer packaging materials that bring safety and peace ofmind and promote the expansion of our business while at the same time helping resolve
social imperatives.
Presentation introducing DIC111

Color & Display
This segment focuses on pigments, liquid crystals (LCs) and natural colorants as businesses that make life more colorful. In the area of
pigments, we see products for cosmetics as particularly promising. We also expect growth in the market for Linablue®, a natural blue food
FRORULQJGHULYHGIURP6SLUXOLQDRZLQJWRLQFUHDVLQJFRQFHUQVZRUOGZLGHUHJDUGLQJIRRGVDIHW\,QWKHKLJKO\SUR¿WDEOHDUHDRI/&VZHDUH
SURPRWLQJWKHMRLQWGHYHORSPHQWRILQNVIRULQNMHWSULQWHGTXDQWXPGRWFRORU¿OWHUV 4'&)V WKDWXVHLQNMHWWHFKQRORJ\DVQH[WJHQHUDWLRQ
display materials.
)XQFWLRQDO3URGXFWVThis segment centers on polymers and compounds. Guided by the concept of functional products that add comfort, we will leverage our
specialized composite technologies to enhance our competitiveness in a variety of areas, including coatings and molded products, with
WKHJRDORIDGGLQJFRPIRUW7KLVVHJPHQWDOVRLQFOXGHVSURGXFWVVXFKDVKROORZ¿EHUPHPEUDQHPRGXOHVZKLFKDOORZJDVHVEXWQRW
liquids to permeate.
:HKDYHDOVRLGHQWLILHGIRXUSULRULW\DUHDVIRUGHYHORSLQJQHZEXVLQHVVHV²(OHFWURQLFV$XWRPRWLYH1H[W*HQHUDWLRQ3DFNDJLQJDQG+HDOWKFDUH²DQGKDYHHVWDEOLVKHGWKH1HZ%XVLQHVV'HYHORSPHQW+HDGTXDUWHUVWRRYHUVHHUHODWHGHIIRUWV7KH1HZ%XVLQHVV'HYHORSPHQW+HDGTXDUWHUVLQWHJUDWHVWKUHHNH\IXQFWLRQV²RXU5 'WHDPZKLFKHQFRPSDVVHVPHGLXPWRORQJWHUPGHYHORSPHQWWKH
3URGXFW,QQRYDWLRQ&HQWHUZKLFKLVFKDUJHGZLWKEULQJLQJWRJHWKHUFRUHWHFKQRORJLHVDQGRXUPDUNHWLQJWHDPZKLFKLVUHVSRQVLEOHIRU
enhancing popularity and market penetration—to seamlessly oversee all stages of new business development.

2

Value Transformation: Strengthening our corporate structure through qualitative reforms of businesses

Having defined “qualitative reforms” as clarifying competitive advantages and shifting to products capable of withstanding
macroenvironmental changes, we will encourage a shift to businesses with more of a focus on social value and sustainability. In
WKH3DFNDJLQJ *UDSKLFVHJPHQWZHZLOOFRQFHQWUDWHUHVRXUFHVRQSDFNDJLQJVROXWLRQVDQGVSHFLDOW\LQNV,QWKH&RORU 'LVSOD\segment, efforts will center on high-performance products, notably functional pigments, and naturally derived products. In the Functional
Products segment, we will emphasize environment-friendly products and high-value-added products such as epoxy resins. Shifting tobusinesses with more of an emphasis on social value will also entail a
Segment
Value Transformation
review of general-purpose products and a bold revamping of business• Packaging solutions
models, including those for core businesses. In some cases, this may
Packaging Publication
Printing inks, adhesives, films, polystyrene&inksnecessitate moving resolutely to replace certain businesses. Accordingly,• Specialty inks
Graphic
Jet inks, security inks
we established Groupwide criteria for withdrawing from a business,
which calls for a three-pronged evaluation of any business from three• High-performance products
Functional pigments (pigments for color filters, effect pigments, pigments for
Color
Generalperspectives, namely, growth potential, profitability and scale, andpurposecosmetics and pigments for NIP*), LC materials, next-generation display materials&
pigments
Display• Naturally derived products
consideration for market standing when plotting exit strategies. The
Natural colorants* Nonimpact printing
Board of Directors and senior management will have the final say, but•
Environment-friendly
products
General
Waterborne resins, polyurethane resins, UV-curable resins
processed
establishing criteria will enable us to accelerate the decision-making
Functional products• High-value-added products
Products Solvent-based
process, which will in turn strengthen the entire Group.
Epoxy resins, PPS compounds, industrial adhesive tapes,
products
hollow-fiber membrane modules

DIC Report 2019 ̲10

3

New Pillar Creation: Creating new businesses in response to ESH-related issues and social changes

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1H[W*HQHUDWLRQ3DFNDJLQJDQG+HDOWKFDUH,Q(OHFWURQLFVZHZLOOVHHNWRDSSO\RXULQNGLVSHUVLRQWHFKQRORJLHVLQVXFKDUHDVDVÀH[LEOH
SULQWHGFLUFXLWERDUGV 3&%V DQGQH[WJHQHUDWLRQGLVSOD\VWRGHYHORSIXQFWLRQDOPDWHULDOVWKDWFRQWULEXWHWRDGLJLWDOVRFLHW\8QGHUWKH$XWRPRWLYHEDQQHUZHZLOOIRVWHUEXVLQHVVHVWKDWPDNHXVHRIRXUFRPSRVLWHWHFKQRORJLHVLQFOXGLQJWKRVHXVHGWRSURGXFHFDUERQ¿EHU
UHLQIRUFHGSODVWLF &)53 ZKLFKKHOSVUHGXFHYHKLFOHZHLJKWWKHUHE\LPSURYLQJIXHOHI¿FLHQF\,Q1H[W*HQHUDWLRQ3DFNDJLQJZHZLOO
work to develop packaging materials that help address issues such as food safety and food loss. Recognizing the elimination of marine
plastics, a result of inappropriately discarded used plastic products, as a critical challenge, we have also established a project team topromote a switch to viable alternatives and develop biodegradable materials. Our focus in Healthcare will be on developing productsthat leverage biotechnological processes accumulated in the cultivation of algae and contribute to health and longevity. We will also
PDNHVWUDWHJLFLQYHVWPHQWVWRH[SHGLWHRXUHQWU\LQWRQHZPDUNHWV7KLVZLOOLQFOXGHLQYHVWLQJLQVWDUWXSVLQUHODWHG¿HOGVDQGVHHNLQJDGYDQWDJHRXV0 $RSSRUWXQLWLHV
4$ÀQDQFLDOVWUDWHJ\FHQWHUHGRQFDVKÁRZPDQDJHPHQW',&SODFHVWRSSULRULW\RQRSWLPL]LQJFDVKÀRZPDQDJHPHQWE\ZRUNLQJFRQWLQXRXVO\WRVWUHQJWKHQRXU¿QDQFLDOKHDOWKDQGLQYHVWLQJ
LQSRUWIROLRWUDQVIRUPDWLRQ7KHSODQEXGJHWVELOOLRQIRUVWUDWHJLFLQYHVWPHQWVDLPHGDWDFFHOHUDWLQJJURZWK7KURXJKVXFKinvestments, we will endeavor to maintain stable, appropriate dividends while at the same time ensuring sufficient risk management
FDSDELOLWLHV:HDUHFRQ¿GHQWWKDWWKLVZLOOHQDEOHXVWRDWWDLQWKHELOOLRQWDUJHWZHKDYHVHWIRUFRQVROLGDWHGRSHUDWLQJLQFRPHLQ¿VFDO\HDUWKH¿QDO\HDURI',&:HKDYHDGRSWHGUHWXUQRQLQYHVWHGFDSLWDO 52,& DVDQLQGLFDWRURILQYHVWPHQWHI¿FLHQF\DQG
HDUQLQJVEHIRUHLQWHUHVWWD[HVGHSUHFLDWLRQDQGDPRUWL]DWLRQ (%,'7$ XVHGJOREDOO\DVDPHDVXUHRIDFRPSDQ\¶VSUR¿WDELOLW\* Differences in interest rates and methods for calculating taxes and depreciation make it impossible to directly compare the profitability of companies in different
countries and territories using simple income figures. Because it minimizes these differences, EBITDA is widely used around the world to assess the relative
profitability of companies.

Ensuring the DIC Group is loved and respected worldwide by maintaining effective ESG and humanresources management| 6WUHQJWKHQLQJ2XU0DQDJHPHQW)RXQGDWLRQ
Against a backdrop of rapid social change, promoting qualitative reforms in businesses and strengthening our management foundation willbe crucial to our ability to respond appropriately and achieve sustainable growth. To this end, we will promote ambitious initiatives in linewith three key themes.
1

Using digital transformation to reengineer business processes

We are taking active steps to advance digitization, which we acknowledge will dramatically change our business processes. In production,
we are using digital technologies to further automation and enhance the visibility of various data with the goal of improving quality and
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properties databases and AI to materials science.
Guided by DIC111, we launched a project that employs two main approaches to this challenge. The first is using backcasting toformulate future predictions that take into account advances in IT and other external changes. The second involves exploring how toelevate current themes and what sort of future we can create by doing so. Such initiatives will focus on, among others, advancing factory
automation, discovering new chemical materials and creating new business models.
2

Human resources management

The success of our efforts to develop new business models is linked inextricably to ourability to bring together the expertise and energy of diverse human resources. To this end,
ZHLQDXJXUDWHG:,1*DSURJUDPZLWKIRXUFRUHWKHPHVWKDWVHHNVWRUDOO\RXUGLYHUVH
human resources to enhance our responsiveness to social change and drive diversity
management, through which we will transform DIC’s fundamental identity. Of paramountimportance is to reform work styles to capitalize on individual talents, particularly byshifting the focus of evaluation from quantity to quality. At the same time, we will establish
a new global human resources system and a system for selecting our next management
team to help us uncover new core human resources from among the more than 20,000
DIC Group employees in 64 countries and territories, as well as to ensure that we have
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LQ¿VFDO\HDUZHHVWDEOLVKHGWKH+XPDQ5HVRXUFHV6WUDWHJ\'HSDUWPHQW

11̲ DIC Report 2019

Human resources management (WING)Work Style Reform
Reform work styles to capitalize on diversified individuality

HR Infrastructure Reform
Adopt global human resources system and unify Group system

Next Management Selection
Establish system to appoint the next management teamGlobal Talent Development
Develop global human resources

3

3URPRWLQJ(6*PDQDJHPHQWLQFOXGLQJWKHVHWWLQJRI
numerical targets

Recent years have reconfirmed our awareness of the fact that
addressing environmental, social and governance (ESG)-related
issues is crucial to realizing sustainable growth and that this iswhat ultimately determines corporate value over the long term.
,QILVFDO\HDUZHHVWDEOLVKHGWKH(6*8QLWWRIDFLOLWDWHD
more systematic approach to related initiatives. Group companies
continue to work as one to promote a variety of efforts worldwide
DQGKDYHVHWDQXPEHURIVSHFL¿FQXPHULFDOWDUJHWVIn the area of environmental issues, we aim to reduce carbon
dioxide (CO2 HPLVVLRQVDFURVVJOREDO',&*URXSVLWHVE\
IURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU7RWKLVHQG
we encourage sites to introduce or switch entirely to energy fromrenewable sources, including solar power and biomass. In May
2019, we declared our support for the Task Force on Climaterelated Financial Disclosures (TCFD), pledging to disclose
climate-related information in line with TCFD recommendations
going forward. We also remain committed to effective stewardshipof the products we provide and have stepped up efforts to develop products such as inks made with bio-derived materials and highly
recyclable polystyrene. As an outgrowth of this, we introduced a proprietary sustainability index that evaluates businesses based on
environmental impact and contribution to the aforementioned targets, underscoring our commitment to developing products and solutions
WKDWEHQH¿WERWKFXVWRPHUVDQGPDUNHWV:HKDYHDOLJQHGWKLVLQGH[WRWKH8QLWHG1DWLRQV¶6XVWDLQDEOH'HYHORSPHQW*RDOV 6'*V 
1RWH)RUPRUHLQIRUPDWLRQRQWKH6'*VSOHDVHVHHSDJHIntroduced a proprietary sustainability index
Social issues

Primary value of DIC products

Climate change
Resource conservationƔContain renewable
raw materialsƔEnergy saving andthermal insulationƔReduce weightƔCope with marine plastics

SDGs

Goals 7, 13, 14 and 15

Sustainable use of natural resources

SDGsƔRecyclableƔReduce wasteƔLong lifeƔReduce volume

Enhanced measures to cope with waste plastic and marine plastics
Focus on packaging materials
Raw materials

Films for printing

Packagingmaterials
supply chain■ Develop technology which
can use chemical recycle
materials and bio raw materials■ Develop films suitable forrecycling, such as easily
separable multilayer materials
and monomaterials

Consumption

Goals 9, 11 and 12

Food, safety and health

SDGs

Goals 2 and 3

Recovery and sortingƔHealth and comfortƔReduce food wasteƔSafetyƔLow VOCs

Recycling■ Develop easily peelable inks
and adhesives■ Develop technologies toprevent deterioration ofrecyclable plastics

8QGHUWKH³VRFLDO´KHDGLQJZHDOVRUHPDLQFRPPLWWHGWRIXUWKHULQJWKHLQFRUSRUDWLRQRIGLYHUVLW\LQWRPDQDJHPHQWWRFUHDWHDFRUSRUDWH
culture that allows a wide range of individuals to reach their full potential. In May 2018, we formulated the DIC Group Human Rights Policy,
which conforms with global codes governing human rights to guide related initiatives in the years ahead.
Efforts to address governance-related issues include creating a system based on Japan’s Corporate Governance Code and establishingNH\SHUIRUPDQFHLQGLFDWRUV .3,V WRPHDVXUHGLYHUVLW\LQPDQDJHPHQWLQFOXGLQJWKHSHUFHQWDJHRIIRUHLJQQDWLRQDOVDQGZRPHQLQH[HFXWLYHSRVLWLRQVERWKRIZKLFKZHLQWHQGWRERRVWWRE\¿VFDO\HDU
,QFORVLQJDVDPDQXIDFWXUHURI¿QHFKHPLFDOVZHFRQWLQXHWRUHFRJQL]HHQVXULQJRSHUDWLRQDODQGRFFXSDWLRQDOVDIHW\UHGXFLQJRXU
impact on the environment and promoting the stringent management of chemical substances as fundamental to our business activities,
and to see “doing the right thing and doing it right” as the true way forward. We pledge to continue working to ensure that DIC remains acompany that is loved and respected worldwide.

DIC Report 2019 ̲12New Medium-Term Management Plan: DIC111
DIC has formulated a new medium-term management plan, DIC111, to clarify strategies for transforming its business portfolio, that is, for building a
sophisticated portfolio focused on ESH-related issues and social changes by advancing qualitative reforms in existing core businesses and creating
new businesses with the potential to become mainstays.

Two strategies for businessportfolio transformation| DIC’s Future Vision■ Establish a vision based on proactive efforts to address key imperatives

arising from social changes such as the spread of digitization and
ESH-related issues, including those affecting the global environment
and food supplies

Social value

Target Areas• Sustainability• Contribution tomarkets

Become a unique global company that is trusted
by society by providing value (safety and peaceof mind, color and comfort)

Economic value• Growth• Profitability• Capital efficiency| Basic Strategies: Business Portfolio Transformation to Achieve Growth
Value Transformation
Generate sustainable cash inflow by making qualitative reforms to businesses■ Bolster competitiveness by transforming DIC’s business structure

Shift from businesses vulnerable to macroenvironmental changes to those with differentiated high-value-added products■ Make businesses more conscious of social value

Shift to businesses with more of a focus on value provided to customers and markets and on sustainability throughout product life cycles

Segment

Value Transformation

Packaging&
Graphic

Publication
inks

Color
&
Display

Generalpurpose
pigments

Functional
Products

Generalprocessed
products
Solvent-based
products

Percentage of Net Sales(2021)

Percentage of Net Sales(2025)

73%

76%

85%

50%

58%

62%

59%

63%

75%

• Packaging solutions
Printing inks, adhesives, films, polystyrene• Specialty inks
Jet inks, security inks
• High-performance products
Functional pigments (pigments for color filters, effect pigments, pigments forcosmetics and pigments for NIP*), LC materials, next-generation display materials• Naturally derived products
Natural colorants* Nonimpact printing• Environment-friendly products
Waterborne resins, polyurethane resins, UV-curable resins• High-value-added products
Epoxy resins, PPS compounds, industrial adhesive tapes,
hollow-fiber membrane modules

New Pillar Creation

Priority area

Create new pillars by elevating and gaining
competencies in priority areas■ Create new businesses from the perspectiveof ESH-related issues and social changes
Contribute to the resolution of challenges throughbusiness activities by identifying areas at the intersectionof ESH-related issues/social changes and DIC’s corecompetencies■ Make active use of external resources
Help establish new social ecosystems through M&As
and the use of corporate venture capital (CVC)

ESH-related
challenges

DIC’s
competencies

Targets

Electronics

・High-speed
communications
・Shift to AI, IoT and
the Internet ofEverything (IoE)

Optical control• Next-generation display
technology
Design technologies for QD inks, peripheral materials• PCB, semiconductors, sensors
functional materials
Insulating and conductive materials,
Dispersion and ink
sensors
technologies

Automotive

・Connected
・Autonomous
・Shared・Electric

Composite
technologies

・Food issues
・Food safety and
Next- Generation
security
Packaging・Marine plastics
・Distribution
revolution

Healthcare

13̲ DIC Report 2019

Percentage of Net Sales(2018)• Multi-materialization

CFRP, expanded lineup ofengineering plastics• Next-generation battery materials
Inorganic active materials for negativeelectrodes and binder resins• Approach to safety, security andGlobal channels
Packaging solutions

・Health and longevity Algae cultivation
technology
・Food safety andsecurity
Color materials

food loss
Barrier materials• Sustainable packaging
Monomaterials, recyclable andbiodegradable materials• Replacement of artificial colorants

Natural colorants for foods andbeverages• Nutrition

Functional foods, supplements

| Strengthening Management Infrastructure
IT and Human Resources Strategies
Digital transformation for business process reengineering

Human resources management■ Realize targeted business process reengineering by using backcasting to formulate■ Rally diverse human resources as the source of

future predictions that take into account advances in IT, while at the same timeusing existing technologies to improve efficiency over the three years of DIC111

DIC’s competitiveness as a global company (WING)

Sales

Work Style Reform
Future prediction based on
advances in IT■ Activate marketing by utilizing MA*1

■ Streamline sales processes by utilizing and restructuring SFA*

Phase 1
Utilization of existing
technologies

2

Production■ Improve productivity by utilizing IoT and AI■ Enhance visibility of production processes and quality control

Technology and R&D■ Simulate effectively with machine learning■ Accelerate research and development by utilizing MI

Support■ Improve productivity by utilizing RPA*3 tools*1 Marketing Automation

Business process
reengineering at DIC*2 Sales Force Automation

Reform work styles to capitalize on diversified individuality

HR Infrastructure Reform
Adopt global human resources system and unify Group system

Next Management Selection
Establish system to appoint the next management team

*3 Robotic Process Automation

Global Talent Development■ Entry into new markets created through the advancement of technologies■ New business models created by revamping supply chains■ Dramatic productivity improvement and creation of new work styles

Develop global human resources

Promotion of ESG Management
Set targets in each area of ESG and accelerate implementation of initiatives■ Reduce CO 2 emissions attributableto production

Environmental ■ Supply products and solutions that

Target: 30% reduction of CO2 emissions*1 (2030)

contribute to sustainability

SocialGovernance■ Promote diversity and work style reform■ Enforce “safety first” principle■ Diversify management team
■ Reflect cost of capital in decision making

Target: Rate of female employees in management positions in Japan:
4.4% (2018) ⇒ 8% (2021) ⇒ 20% (2025)
Rate of foreign employees in Japan: 1.0% (2018) ⇒ 5% (2021) ⇒ 10% (2025)
Target: Rate of foreign nationals or women in executive positions:
15% (2018) ⇒ 20% (2021) ⇒ 30% (2025)*1 Compared with 2013

| Cash Flow Management
Budget ¥250.0 billion for strategic investments aimed at business portfolio transformation and balance financial health and shareholder returns■ Prioritize efforts to maximize cash flow by promoting business portfolio transformation, guided by DIC111, and budget ¥250.0 billion

for strategic investments aimed at accelerating growth, while working continuously to strengthen financial health■ Shareholder returns (Dividend payout ratio): Around 30%

Pay dividends in line with profit growth maintaining stable dividends■ Financial health (D/C ratio): Around 50%

Dividend
payout ratio

Support growth by maintaining financing and risk management capabilities

D/C ratio

50%

30%

| Quantitative Targets

Set target for consolidated operating income of ¥70.0 billion in the final year of DIC111. Achieve target by shifting to high-value-added products.
2018
ActualNet sales

2019
Target2020
Target2021
Target(Billions of yen/%)Change(2021/2018)¥805.5¥850.0¥900.0¥950.0+18%

Operating income

48.4

52.0

60.0

70.0

+45%

Operating margin

6.0%

6.1%

6.7%

7.4%

−

37.0

45.0

+41%

Net income*1

32.0

35.0

EBITDA*2

81.4

87.0

91.0

102.0

+25%

EBITDA to net sales ratio

10.1%

10.2%

10.1%

10.7%

−

ROE

10.4%

¥/US$

¥110.46

10 ‒12%¥110.00¥110.00−¥110.00*1 Net income attributable to owners of the parent*2 EBITDA = Net income*1 + Total income taxes + (Interest expenses – Interest income) + Depreciation and amortization

DIC Report 2019 ̲14The DIC Group’s Approach to
Value Creation
Delivering

Business Portfolio
Transformation Under DIC111

Environmental
issuesManagement capital(Inputs)

Funds essential tothe provision of products
and services

Integrate technologies
and make use ofopen innovation

Organic molecular
designOptics and
color

Core
technologies

Applicability
assessment(Coating, printing,molding, adhesion)

Polymer
designDispersion

ies

New Pillar Creation
Create new businesses in response to
ESH-related issues and social changes

lut

on

ti o

Evo

i

Natural capital
Environmental resources andraw materials essential tothe provision of products
and services

of

org

a ni

zati

onal

capa bi lit i e sl
D igit atraMarshal individual
strengths to createorganizational dynamism

Social capital
Cooperation with stakeholders
and local communities

Reinforce ESG initiatives
The DIC WAY
15̲ DIC Report 2019

ls
de
mo

Value Transformationlog

Ability to rally diverse humanresources as the source of
DIC’s competitiveness as a
global company (WING)

bu
sin
es
s

Strengthen DIC’s corporate structure throughqualitative reforms of businessesof techno

Human capital

Climate change

Overh
aul
of

ips
rsh
e
rtn
Pa

r a ti o n

Accumulated technologies
and know-how

Cyber threats

Break free of
reliance on
independent efforts

In t
eg

Intellectual capital

Human rights
issuesDiverse social imperatives

Manufacturing capital
Facilities and equipment
essential to the provisionof products and services

Health-related
issuesnFinancial capital

Resource
depletion

n

r
sf o

m

a

With the aim of ensuring a sustainable society, the DIC Group strives to provide products andsolutions that respond to the needs of markets and its customers and add color and comfort to life.

Outcomes

Segment

Outputs

Packaging & Graphic

Next-generation
packaging inks andcoatings, functional
packaging adhesives,
industrial-use jet inks,
othersColor & Display

Pigments for color filters,
pigments for cosmetics,
effect pigments, natural Color and display
colorants, LC materials, materials that makenext-generation display life colorful
materials, others

Functional Products

Sustainable polymers,
environment-friendly
PPS compounds for
Functional products
automotive components, that add comfort
high-performance industrial
adhesive tapes, others

Business area

Electronics

Automotive

Packaging materials
that bring safety andpeace of mind

Outputs

Outcomes

Technologies andfunctional productsthat support the spreadof digitization

Provide functional materials that
contribute to a digital society

Technologies andfunctional materials that
underpin efforts to transformthe automotive industry

Provide composite materials that
contribute to a mobility society

Packaging materials
that help reduce foodloss and support
Next-Generation Packaging sustainability
Algae cultivation
technologies withapplications extending
from food safety to
Healthcare
advanced medical care

SDGs

Provide packaging solutions that
contribute to environmental
sustainability
Provide fine chemicals produced
using biotechnological processes
that contribute to health and longevity

SDGs Goals
2, 3, 6, 7, 9, 11,
12, 13, 14 and 15

DIC Report 2019 ̲16

Messages from Top Executives at Regional Headquarters
Ensuring the Success of DIC111
With over $3.0 billion in revenue and more than 8,000 employees, Sun
Chemical is a proud member of the DIC group. Sun Chemical is a global
leader in inks, pigments and rapidly growing in advanced materials, where
many of these products have been developed internally by DIC. As we embark
on a new Mid Term Plan with DIC111, we look forward to the opportunities
and challenges presented by a changing and dynamic marketplace. We willcontinue to upgrade our products and market portfolio. We will have a global
focus yet service our customers’ needs locally.

Sun Chemical Corporation
President and CEO

Myron Petruch

Anchored by our core ink and pigment businesses, Sun Chemical is establishinga platform of high growth, high margin specialty products. These products, whichhave been added to our portfolio through an active acquisition program andinternal development, provide Sun Chemical the opportunity to enter or enhance

Transformation and Growth through Collaboration
7KH$VLD3DFL¿FUHJLRQLVDYLEUDQWDQGRQHRIWKHIDVWHVWJURZLQJUHJLRQ,WLV
made up of several countries, which is rich in culture, language and ethnicity.
With a dynamic and professional workforce of 3,600 employees, we are
SUHVHQWO\RSHUDWLQJLQFRXQWULHVZLWKIDFLOLWLHVDFURVV$VLD3DFL¿FDIC Asia Paciﬁc Pte Ltd
Managing Director

Paul Koek

The Group’s vision as embedded in the DIC111 is on the principle ofsustainable growth through value transformation. This is against the backdrop
where the global economy has significantly changed and the fact that
globalisation itself has now taken a different meaning. All this coupled withthe dawn of the Fourth Industrial Revolution has taught us that change and
WUDQVIRUPDWLRQLVLQHYLWDEOH7KHRQFHVKHOWHUHG$VLD3DFL¿F5HJLRQLVQRZ
vulnerable but this can bring us many opportunities.
$VSDUWRIWKHVWUDWHJ\WRVXSSRUWWKH',&LQWKH$VLD3DFL¿FUHJLRQWKH
concept of the “3 S” will be implemented. This will entail the Support and thePromoting Our New DIC111 Medium-Term Management Plan
DIC (China) oversees the operations of the DIC Group in Greater China,
encompassing 29 companies—including two in Hong Kong and five in
Taiwan—and approximately 2,300 employees. Having set a target for regional
QHWVDOHVRIELOOLRQSOXVIRU¿VFDO\HDUZHUHFRJQL]HWKDWDFKLHYLQJ
Value Transformation, a core policy of DIC111, is the most critical challenge
we face in the rapidly evolving local economy. Accordingly, we will press ahead
with decisive efforts to make qualitative changes to our core businesses,
maintaining an accurate grasp of the direction of market change.

DIC (China) Co., Ltd.
ChairmanShinsuke Toshima

17̲ DIC Report 2019

:KLOHWKHVL]HDQGSRWHQWLDORIWKHPDUNHWLQ*UHDWHU&KLQDFDQQRWEHGHQLHG
the existence of a wide range of regional business risks is another point thatis often raised. Of particular note in recent years is the swift and seemingly
relentless deployment of environmental regulations in the PRC, which inits position in valuable growth markets such as cosmetics,
security inks, plastic and ID cards and printed electronics.
We have benefitted from the ability to leverage thesignificant resources of the DIC group as we execute
our strategy. The world-class research and development
resources of the DIC group are the strongest among all
our competitors. These resources allow Sun Chemical tocontinually present our customers and brand owners withnew and innovative products and ideas to enable themto succeed in their markets, thereby strengthening ourbusiness relationships.

remain mindful of our obligation to do so in a responsible
manner that considers our impact on the environment.
We are committed to the promotion and development ofsustainable products that are eco-friendly and reduce theenvironmental footprint that we and our customers leave on
the planet.
We are excited about our future at Sun Chemical and weare committed to doing our part to make the DIC group and
DIC111 a success.

As we continue to develop our product portfolio in order tobring new and innovative products to our customers, we

strengthening of the functional and specialist organisations
that we will need to transform into. Capitalising on theprofessional skillsets of our valued employees andtechnology, new business pillars aligned to the sustainable
WKHPHZLOOEHLGHQWL¿HGGHYHORSHGDQGODXQFKHG7KHGULYH
for business alignment through partnership and M&A’s
activities will be one of our main focus.
7KURXJK6SHFLDOL]DWLRQWKH³6KDUHG(FRQRP\´IUDPHZRUN
will be expounded, driven and implemented. Driving business
HI¿FLHQF\WKURXJKWKHXVHRIGLJLWDOWRROVDQGDQDO\WLFVZLOOKHOSWKHUHJLRQWRIRFXVRQ³GRLQJWKLQJVULJKWWKH¿UVWWLPH´while enhancing our valued Customer’s experience andtouchpoints through sustainable quality products.

Asia Pacific group will also drive the Sustainability pillar.
This will improve and embrace our outreach to our valued
Customers – through “Color and Comfort”, businesscollaboration with our partners through our practice of
the “DIC Way” and promoting “Diversity, Mobility andTransparency” in a safe work environment for our valued
employees. We strongly believe that through effective
collaboration with all our stakeholders, the drive to successis assured.

Capitalising on the Group’s strength in technology andaligning with the fast changing laws in the Region, DIC

addition to causing considerable confusion in the market
has given rise to uncertainty regarding business continuity.
The DIC Group must take measures to prepare fornear-future risks in a number of its businesses. However,
if we look at it from another perspective this may also be amajor business opportunity. That is to say, the certainty thatmultiple companies will drop out of the market will likely help
dispel the futile, price only–based competition that currently
dominates every sector as a result of overcapacity for sometime. In such a market, the critical competitive strength will
be brand reliability.

(6*UHODWHG LQLWLDWLYHV OHYHUDJLQJ WKH WUXVW ZH HDUQ WR
expand our operations and contributing to achievement of
the targets of DIC111.
In the current fiscal year, we established a Corporate
Communications Department at DIC (China) with the aim ofbolstering recognition of the DIC name and increasing theGroup’s profile. The new department will work with DIC’s
Corporate Communications Department to promote effective
branding efforts in Greater China and support the efforts ofproduct divisions.

Against this backdrop, as a member of the DIC Group—
DQ RUJDQL]DWLRQ VWURQJO\ FRPPLWWHG WR DGYDQFLQJ
sustainability—we will actively and earnestly promote

DIC Report 2019 ̲18

Fiscal Year 2018 DIC Group Topics
Topic

1

DIC Teams Up with Biotech Startups in the Developmentof Naturally Derived Materials

DIC and U.S. Firm Checkerspot Enter Into JDA for Advanced High-Performance Materials
DIC and Checkerspot, Inc., a high-performance materials innovation company, entered into a joint development agreement (JDA)
to create a new class of novel, high-performance polyols. Checkerspot, which boasts unique capabilities in biotechnology, including
JHQHWLFPRGL¿FDWLRQWHFKQRORJLHVDQGKLJKO\HI¿FLHQWFXOWLYDWLRQV\VWHPVIRUDOJDHFUHDWHVRULJLQDOPDWHULDOVIURPVXJDUVDQGRWKHU
carbohydrate molecules generated from CO2. In addition to aligning with its goal of contributing to the realization of a low-carbon
VRFLHW\SDUWQHULQJZLWK&KHFNHUVSRWLVDFOHDU¿WIRU',&IURPWKHSHUVSHFWLYHRILWV9DOXH7UDQVIRUPDWLRQVWUDWHJ\7KH&RPSDQ\also anticipates synergies with its own extensive and pioneering cultivation technologies for Spirulina.
The agreement will enable the two companies to leverage DIC’s compounding, polymer design technologies and Checkerspot’s
bio-derived materials technologies to develop products that reduce the use of petroleum-based ingredients and provide novel
performance and functions. The partnership will focus on products and formulations with applications in core DIC business areas,
including adhesives, coatings, printing inks and lubricants. DIC will capitalize on the performance features of such materials todevelop distinctive products, underpinning its efforts to deliver new value and create new markets.

Algae observed with a microscope

Ski and ski wear made with materials manufactured by Checkerspot

DIC Invests in Japanese Startup to Develop Bio-Derived Chemicals
On August 31, 2018, DIC completed investment in Tokyo-based Green Earth Institute Co., Ltd. (GEI), a biotech startup carved out
from Research Institute of Innovative Technology for the Earth (RITE) to commercialize sustainably produced “green” chemicals.
GEI is engaged in the development and commercial production of bioethanol from nonfood biomass feedstocks and of amino acids
for use as food and animal feed additives. GEI has leveraged innovative Corynebacterium fermentation technologies to realize a
low-cost production process for bio-derived chemicals. The two companies will also capitalize on DIC’s global market network, aswell as its ability to develop applied products.
DIC is investing in and working with biotech startups with the aim of strengthening its biotechnologies that use algae and othermicroorganisms and expanding related businesses. Through such efforts, the Company will continue working to expand its portfolio
compatible with a sustainable society.

19̲ DIC Report 2019

Topic2

Prior to the Announcement of DIC111, the Company Announced
D1HZ2UJDQL]DWLRQWKDW&ODULILHGWKH9DOXH3URYLGHGE\',&:LWKWKHDLPRIUHÀHFWLQJLWVFRPPLWPHQWWRDGGUHVVLQJVRFLDOLPSHUDWLYHVDQGGHOLYHUYDOXHWRVRFLHW\',&HVWDEOLVKHGEXVLQHVV
units based on the concepts of market and value provided. The Company also expanded the scope of each business unit to facilitate
the swift reallocation of resources.

Segments in 2018

Segments from 2019

Printing Inks

Packaging & Graphic

Offset inks
Gravure inks
Flexo inks
Security inks

Metal decoration inks
News inks
Packaging adhesives
Printing supplies

Fine Chemicals
Organic pigments
Pigments for color filters
Effect pigments
Pigments for cosmetics

Thin-film transistor liquid crystal(TFT LC) materials
Supertwisted nematic liquid crystal(STN LC) materials

Gravure inks
Flexo inks
Metal decoration inks
Security inks
Jet inks
Offset inks
News inks
Printing supplies

Packaging adhesives
Coextruded multilayer films
Polystyrene

Metal carboxylates
Sulfur chemicals

Polymers

Color & Display
Polystyrene

Polyester resins
Plasticizers
Acrylic resins
Amino resins
Epoxy resins
Urethane resins
Alkylphenols

Alkyd resins
Unsaturated polyester resins
Waterborne resins
Methacrylate resins
Phenolic resins
Ultraviolet (UV)-curable resins
Fluorochemicals

Organic pigments
Pigments for color filters
Effect pigments
Pigments for cosmetics
Health foods
Natural colorants

TFT LC materials
STN LC materials

Compounds
Jet inks

Functional Products
Polyphenylene sulfide (PPS) compounds
Colorants
High-performance optical materials, Coatings
Functional compounds

Application Materials
Coextruded multilayer films

Plastic containers
Decorative sheets
Hollow-fiber membrane modules
Industrial adhesive tapes
Magnetic tapes Processed sheet molding compounds (SMCs)
Incombustible decorative boards Coatings for building materials
Health foods
Natural colorants

Waterborne resins
UV-curable resins
Acrylic resins
Epoxy resins
Phenolic resins
Polyurethane resins
Polyester resins
Fluorochemicals
Plasticizers
Unsaturated polyester resins
Alkylphenols
Metal carboxylates
Sulphur chemicals(lubricant additives)

PPS compounds
High-performance compounds
Plastic colorants
Coatings
Industrial adhesive tapes
Magnetic tapes
Hollow-fiber membrane modules
Decorative boards and interior
housing products
Decorative sheets anddecorative films
Coatings for building materials
Processed SMCs
Molded plastic products

DIC Report 2019 ̲20

Packaging & Graphic
Packaging Materials that Bring
Safety and Peace of Mind
President, Packaging & Graphic Business Group

SDGs Goals 12, 13 and 14

Hideo Ishii

This segment includes not only
printing inks but also adhesives,materials and other products andsolutions for packaging applications,the markets for which continue
to see robust growth in emerging
economies in Asia and elsewhere.

21̲ DIC Report 2019

［Printing Materials］［Packaging Materials］

Gravure inks
Flexo inks
Metal decoration inks
Security inks
Jet inks
Offset inks
News inks
Printing supplies

Packaging adhesives
Coextruded multilayer ¿lms
Polystyrene

Segment Operating Results
Net Sales

FY2018FY2019 (Forecast)

Operating Income
and Operating Margin

FY2018FY2019 (Forecast)

460.0(Billions of yen)

19.9

20.2

(Billions of yen)

434.7
71.1

3.2
79.0

4.6
4.6％

4.4％

10.0
255.3

271.7

120.3

121.7

(12.0)
Japan

6.8(12.4)The Americas
and Europe

Asia and
Oceania

9.6

6.0

(0.1)
EliminationsJapan

The Americas
and Europe

Asia and
Oceania

Eliminations

Operating margin

Figures for ¿scal year 2018 have been restated to reÀect revisions to segmentation.

Business Strategies Under DIC111
Packaging Solutions

Specialty Inks

Products: Gravure inks Áe[o inks adhesives ÀlmsÀlms and polystyrene

Products: Jet inks and security inks

In the promising market for packaging materials, the DIC Groupwill endeavor to accelerate the growth of its businesses throughproduct portfolio expansion. To this end, the Group will focus ondeveloping and improving sustainable products in response to thechanging needs of packaging manufacturers, enhancing production
con¿gurations for gravure inks and adhesives in India, Vietnam and
the PRC, and expanding the scale of its operations through joint
ventures and M&As.

With the aim of furthering global management integration andexpanding its selection of high-value-added products, the Group will
aggressively invest resources in the area of security inks and seek
to enhance pro¿ts by capturing demand in Asian markets, as well as
by cultivating applications and expanding production capacity in the
PRC for jet inks.
(Billions of yen)
Business policy

Publication Inks

Quantitative targets(Upper row: Net sales, Lower row: Operating income)
FY2018(Actual)

FY2019(Target)FY2020(Target)FY2021(Target)¥434.7 ¥460.0¥476.7¥494.0

¥19.9

¥23.3

¥26.0

Products: Offset inks and news inks

Anticipating a further decline in demand in the publications market,
the Group will work to rationalize its operations by rightsizing globallyand optimizing its Groupwide production con¿guration for publication
inks and news inks.

TOPIC

Packaging &Graphic

Concentrate resources onhigh-value-added products(packaging solutions andspecialty inks)¥20.2

DIC and Sun Chemical Acquire Luminescence Holdings

In February 2018, DIC and Sun Chemical acquired Luminescence Holdings Ltd., amanufacturer of security inks based in Essex, in the United Kingdom. Inks manufactured by
Luminescence are used in security printing, that is, the printing of banknotes, tax stamps,
passports, ID cards and other items for which the prevention of forgery and tampering is a key
concern. In the year since, Luminescence has seen robust sales, exceeding original estimates,
and its operating margin has increased. Despite rising raw materials prices, attributable to thehigh price of oil, these results underpinned an improvement in pro¿tability in the DIC Group’s
printing inks business in the Americas and Europe in ¿scal year 2018.
Sun Chemical is the leading manufacturer of printing inks in the Americas and Europe andboasts a product portfolio encompassing offset inks, flexo inks, gravure inks and coatings.
While it already had a security inks business, the DIC Group looks forward to capitalizing on thisacquisition²which brings together Luminescence’s technological capabilities and the Group’s
vast global sales network²to boost its share of this market and cement its competitive advantage.

DIC Report 2019 ̲22

Color & Display
Color and Display Materials that
Make Life Colorful
President, Color & Display Business Group

SDGs Goals 3 and 13

Masami Hatao

Products in this segment include a wide
variety of materials indispensable todigital devices, including LC materials
and organic pigments for color filters, aswell as pigments for cosmetics, natural
colorants and other materials that aresafe and gentle for people to use.

［Color Materials］
Organic pigments
Pigments for color ¿lters
Effect pigments
Pigments for cosmetics
Health foods
Natural colorants

23̲ DIC Report 2019

［Display Materials］
Thin-¿lm transistor liquid crystal(TFT LC) materials
Supertwisted nematic liquid crystal(STN LC) materials

Segment Operating Results
FY2018FY2019 (Forecast)

Operating Income
and Operating Margin

124.1

129.6

(Billions of yen)

Net Sales(Billions of yen)

0.1

101.4

106.6

34.5

34.5

（11.7）（11.5）
Japan

Overseas

EliminationsJapan

FY2018FY2019 (Forecast)

15.0

0.0

12.1％

11.9％

7.9

8.3

7.0

7.2

Overseas

15.4

Eliminations

Operating margin

Figures for ¿scal year 2018 have been restated to reÀect revisions to segmentation.

Business Strategies Under DIC111
Color Materials([pand functional pigments (pigments for cosmetics, effect pigments
and pigments for nonimpact printing (NIP))

In addition to seeking to establish a leading position globally throughM&As, the DIC Group will take steps in the area of pigments forcosmetics to increase its production capacity for specialty pigments
and enter the personal care market by expanding its processed
pigments business. In the area of effect pigments, the Groupwill endeavor to catch up to demand by broadening its lineup of

designable metallic and pearlescent pigments, while in pigments for
NIP efforts it will emphasize expanding its product lineup by bringing
new products into the digital printing market.
Natural colorants (Linablue®)
The Group will make a full-scale entry into the promising market
for food and beverage colorings.

Display Materials
Functional pigments (pigments for color Àlters)
The Group will endeavor to maintain its global leading position by broadening
its product lineup.
TFT LC materials
The focus here will be on leveraging patent and pricing strategies to expand
sales and accelerating market development efforts in the PRC.
Quantum dot (QD) inks
The Group will continue to promote the development of QD inks, which
continue to hold promise as next-generation display materials.

TOPIC(Billions of yen)
Business policy

Color &
Display

Ensure balance between
acceleration of growth throughshifting of resources to strategic
products and maintenance ofstability through rationalizationof existing products

Quantitative targets(Upper row: Net sales, Lower row: Operating income)
FY2018(Actual)

FY2019(Target)FY2020(Target)FY2021(Target)¥124.1 ¥129.6¥140.0¥149.4

¥15.0

¥16.0

¥18.2

¥15.4

DIC Acquires HighPurity Iron O[ide Pigments Business

In July 2018, DIC and Sun Chemical acquired the high-purity iron oxide pigments
business of the Cathay Industries Group, the production base of which is located in
Valparaiso, Indiana, in the United States.
High-purity iron oxide pigments produced at the Valparaiso site are used
extensively in lip color, eye shadow, foundation primer and other cosmetics
products. These pigments have obtained certification under the COSMOS(COSmetic Organic Standard) program²the global standard for organic andnatural cosmetics²and are thus expected to help grow pigments for cosmetics
into a core component of the DIC Group’s pigments business, bolstered by market
growth, as well as by rising awareness of product safety and the tightening of
pertinent regulations. As such, this business will also contribute to the Group’s
sustainability. Looking ahead, the DIC Group will actively build on this acquisition to
expand its global market share and reinforce its production infrastructure.

DIC Report 2019 ̲24

Functional Products
Functional Products that Add Comfort
President, Functional Products Business Group

SDGs Goals 6, 12 and 13

Kazuo Hatakenaka

This segment provides coating andcomposite materials with diverse
functions that address environmental
issues and are used widely in state-ofthe-art electronics products.

［Performance Materials］
Waterborne resins
Ultraviolet (UV)-curable resins
Acrylic resins
Epoxy resins
Phenolic resins
Polyurethane resins
Polyester resins
Fluorochemicals
Plasticizers
Unsaturated polyester resins
Alkylphenols
Metal carboxylates
Sulphur chemicals(lubricant additives)

25̲ DIC Report 2019

［Composite Materials］
Polyphenylene sul¿de(PPS) compounds
High-performance compounds
Plastic colorants
Coatings
Industrial adhesive tapes
Magnetic tapes
Hollow-¿ber membrane modules
Decorative boards and interior
housing products
Decorative sheets and decorative ¿lms
Coatings for building materials
Processed sheet molding
compounds (SMCs)
Molded plastic products

Segment Operating Results
Net Sales

FY2018FY2019 (Forecast)

282.1

296.9

(Billions of yen)

Operating Income
and Operating Margin

0.1

20.8

212.0

(26.6)

0.0

24.1
8.1％

7.4％

8.7

6.7

208.3

FY2019 (Forecast)(Billions of yen)

112.3

100.4

FY201815.4

14.0(27.4)
Japan

Overseas

Eliminations

Japan

Overseas

Eliminations

Operating margin

Figures for ¿scal year 2018 have been restated to reÀect revisions to segmentation.

Business Strategies Under DIC111
Global Strategic Products that :ill ([pandSales of Environment-Friendly Products

Highly Profitable Products with Functions that
Provide Comfort

Products: Waterborne resins, UV-curable resins, acrylic resins,
polyurethane resins, polyester resins and PPS compounds

Products: Epo[y resins, plasticizers, Áuorochemicals, phenolic resins,
hollow-Àber membrane modules, industrial adhesive tapes and others

The DIC Group will invest actively in products that are not only environmentfriendly but also have a positive impact on markets and society. The Groupwill also seek to expand its resins production bases in Asia and acquire nextgeneration engineering plastics through M&As. In addition to expanding sales
in key markets (coatings, adhesives and products for automotive applications),
the Group will work to design sustainable polymers to promote the use ofrecyclable and biomass-derived raw materials.

In addition to responding to sophisticated needs and delivering outstanding
functionality in niche markets, the Group will launch highly pro¿table next-generation
resins for optical and electronics applications, expand sales of industrial adhesive
tapes for mobile and automotive applications, make a full-fledged entry into andexpand share of the market for large-scale hollow-¿ber membrane modules, and work
to ensure solid growth in the area of molding compounds for medical applications.
(Billions of yen)

Efforts to Pursue Efficiency and Improve
Profitability

Business policy

Products: Unsaturated polyester resins, plastic colorants, highperformance compounds, printed products, laminated products and others
The Group’s efforts here will focus on maximizing profitability byrationalizing both low-profit businesses and sites and integratingproduction facilities to improve ef¿ciency.

TOPIC

Functional
Products

Achieve social contributions
and growth by strengthening
lineup of environment-friendly
and functional products

Quantitative targets(Upper row: Net sales, Lower row: Operating income)
FY2018(Actual)

FY2019(Target)FY2020(Target)FY2021(Target)¥282.1 ¥296.9¥318.4¥343.2

¥20.8

¥28.4

¥33.6

¥24.1

DIC Receives Incentive Award in the 17th GSC Awards for its Development of Sheet-Form Heat Storage Material

DIC received an Incentive Award in the 17th Green Sustainable Chemistry (GSC) Awards, conferred by the Japan Association for Chemical Innovation (JACI), for its
development of a sheet-form heat storage material. Phase change materials (PCMs), which utilize the thermal properties of phase change²the process of changing
from liquid to solid and vice-versa²liquefy at a certain temperature above melting point. PCMs laminated together with other materials have long been used inconstruction, but dif¿culties in altering size and poor workability have prompted housing builders and general contractors to call for the development of new materials.
Leveraging its proprietary coating and compounding technologies, DIC developed a technology for uniformly dispersing PCMs into resin with no degradation ofproperties to create a thick ¿lm, thereby preventing the materials from oozing and leaking during phase change. In addition to performance comparable to that of PCMs
in laminated packages, the resulting sheet-form heat storage material can be cut, bent and fastened into place with screws on-site. DIC’s sheet-form heat storage
material can also be laminated together with avariety of other materials such as plasterboard
Cut
FastenBend
and flooring, expanding options for use inhouses and other buildings and facilitating
use in walls and ceilings, which is dif¿cult withconventional products.

DIC Report 2019 ̲26

Special Feature

Product Development
Designed to Create New Value

The DIC Group is providing distinctive solutions that respondto evolving needs related to safety, peace of mind and theenvironment arising from social changes.

Packaging & Graphic

SDGs Goals 3, 12 and 13

Water-Based Flexo Ink for High-Resolution Printing on
Flexible Packaging (Marine Flex LM-R)

Realizing Gravure Ink–Level High-Resolution Printing and
Significantly Lower VOCs
Value Creation

Expanded use of environment-friendly water-based flexo inks in the area of food packaging

The market for packaging inks today is dominated by solvent-based
products, which boast outstanding wettability on plastic film substrates
and dry swiftly after printing. Nonetheless, demand for water-based, UVcurable and other environment-friendly alternatives is rising sharply,
underpinned by the need to address key social imperatives, including thelowering of volatile organic compounds (VOCs), which pollute the air andimpact working environments; the curbing of global CO2 emissions; andthe reduction of energy consumed in printing.
While printing on packaging films centers on gravure printing, anintaglio printing process, and flexographic printing, a type of letterpress
printing, the latter is leading the global shift toward water-based inks. The
principal reason for this is that flexographic printing uses less ink thangravure printing, meaning that even when water-based inks—which dry
more slowly than solvent-based inks—are used, drying requires little
energy, facilitating superior productivity. However, the small volume of
ink used makes high-density, high-precision printing difficult, as a result
27_ DIC Report 2019of which flexographic printing has traditionally been seen as inferior to
gravure printing, spurring demand for improvements.
Against this backdrop, in fiscal year 2015 DIC and DIC Graphics
created a project team to develop a water-based flexo ink for use on
flexible packaging for food products, cosmetics and other items, which
is made primarily with plastic film. Leveraging its proprietary mixing anddispersion technologies, DIC succeeded in developing an innovative ink
that achieves a high optical density, lifting print quality to a level similar
to that obtained with gravure printing. The Company also revamped
the resin binder, beginning with its structure, to prevent the ink’s highdensity from weakening adhesion during lamination and to increase theresolubility of ink remaining on the printing plate following transfer to theprint substrate, thereby ensuring the stability of print quality. The new ink,
Marine Flex LM, which was announced at a trade show in October 2016,
upended many preconceived notions of flexo inks.

The realization of a sustainable society depends on our ability to respond to needs related to safety, peace of mind and theenvironment. The DIC Group is capitalizing on technologies honed over 111 years to develop distinctive solutions that directly addresscritical challenges, including the issue of marine plastics and the need to reduce use of substances harmful to the environment.
WEB

http://www.dic-global.com/en/csr/special/

A Distinctively
DIC Response

Securing the adoption of a new water-based Àexo ink on the label for Suntory Tennensui

An innovative, environment-friendly offering, Marine Flex LM facilitated the
DIC Group’s entry into the market for packaging inks. However, sales volume
fell short of expectations. One reason for this is the steep capital investment
necessary for customers to switch from gravure printing to flexographic
printing, as a result of which it is expected to take some time before the levelof adoption in Japan catches up to that in Europe and the Americas. However,certain major beverage manufacturers have stepped up efforts to switch fromoil-based gravure to water-based flexographic printing to reduce VOCs andCO2 emissions and conserve energy use in printing on ¿lm for polyethylene
terephthalate (PET) bottle wrap-around labels and sought to expand the rangeof products for which such labels are used. Convinced by this trend that its
instinct had not been wrong, in July 2017 the project team steered its focus
toward developing a new water-based Àexo ink for wrap-around labels.
The way forward for the team remained challenging. While films for foodpackaging commonly consist of three film layers—a substrate and a top
layer sandwiching an ink layer—that are laminated together, wrap-aroundlabels comprise two laminated ¿lm layers, that is, an ultrathin substrate and areverse-printed top layer. Moreover, PET bottles have ridges, which enhancestrength, recyclability and other properties, so labels must also be able towithstand contact and vibration during transport from factory to warehouse orstore and the integrity of inks and label designs must be maintained even if
bottles become soaked when used outdoors.
Leveraging the DIC Group’s broad network, the project team asked
companies to which potential customers consign the manufacture of wraparound labels to evaluate the physical properties of prototypes, repeatedly
conducting rigorous tests and making continual improvements. After resolving
a number of challenges, in December 2018 the team achieved a water-basedÀexo ink that passed all material properties evaluation tests and boasted VOCs
and CO2 emissions (energy consumption) signi¿cantly lower than solvent-based
gravure inks. The new ink and the Marine Flex ECG digital color management
system, developed by DIC Graphics, together make it possible to use multicolor
process printing instead of spot colors for printing on Àexible packaging andthus to reduce wasted ink and improve operating rates for printing equipment.
The new ink—Marine Flex LM-R—was chosen by Suntory Beverage & Food
Limited for use on the labels of the 2.0-liter bottles of its core Suntory Tennensui
water. Shipments to Suntory began in May 2019.

Comment We look forward to seeing DIC continue to take the lead in raising awareness of environmental issues.
The Suntory Group places a strong emphasis on environmental protection in all areas of its operations. Recognizing thepotential impact of environment-friendly water-based inks on the packaging industry as a whole, we became the ¿rst company
to adopt DIC’s Marine Flex LM-R water-based Àexo ink. By more quickly developing increasingly innovative environmentfriendly packaging, we can help pass on a sustainable global environment to the next generation. Accordingly, our focus ison driving our industry forward, rather than on maintaining the status quo. We look forward to seeing DIC continue to actively
disseminate information on the environmental benefits of water-based flexo inks and encourage their use, as well as toraise awareness of environmental issues. Environment-friendly materials will continue to be an important consideration for
packaging manufacturers, so we also look forward to new ideas and suggestions from DIC in the years ahead.
(From left)

General Manager, Packaging Material Department, Supply Chain Management Division, SUNTORY MONO=UKURI E;PERT LIMITED
Packaging Material Department, Supply Chain Management Division, SUNTORY MONO=UKURI E;PERT LIMITEDKEY PEOPLE from DIC

Hiroyuki Iwai

Fuyuko Wakaumi

We seek to build win–win relationships with new clients.

For this project, we secured the cooperation of companies to which customers consign label
manufacturing and of printing companies—which together form the core of the wrap-around label
supply chain—and thus bene¿ted from their expertise in evaluating the physical properties and inÀexographic printing with water-based inks. In this and other such efforts, we seek to build win–
win relationships with new clients while at the same time deepening collaboration in both humanand technological terms. This project also reinforced our belief that such an approach will be
crucial to realizing the pledge to deliver packaging solutions that contribute to sustainability forthe global environment outlined in DIC111.
(From left)

Akihiro Tsuchiya
Manager, Dispersion Technical Group , Dispersion Technical Division 1, Tokyo Plant, DIC Corporation Rikei Sasaka
Liquid Ink Product Group, Osaka Branch, DIC Graphics Corporation Toshiya Fuji
Manager, Logistics Materials Sales Group, Composite Material Products Division, DIC Corporation Hiroki Mitsuhashi
Unit Leader, Next-Generation Packaging Material Business Unit, New Business Development Headquarters, DIC Corporation Yoshiaki Fukuda
Sales Team , Tokyo Liquid Ink & Coatings Sales Group , Liquid Ink & Coatings Division, DIC Graphics Corporation

DIC Report 2019 ̲28

Packaging & Graphic

SDGs Goals 13 and 14

Water-Based Water- and Oil-Resistant Coating Varnish for the Inner
Surfaces of Paper and Paperboard Food Packaging (HYDRECT)

Increasing the Recyclability of Food Packaging to Reduce
Waste and Contribute to Environmental Conservation
Value Creation

Packaging materials that bring safety and peace of mind

Paper and paperboard food packaging such as hamburger wrappers andtake-out boxes for pizza and donuts are commonly coated with a thin layer ofpolyethylene to prevent grease from oozing out and creating a mess. However,
because polyethylene is left behind when such packaging is chemicallydissolved for recycling, it must be removed beforehand using a process called
precipitation. In Japan, recovered paper and paperboard laminated with
polyethylene is classi¿ed, based on its suitability for recycling, as rank B* andapplications for the resulting recycled paper are limited.
* Classi¿cations are determined by the Japanese Federation of Printing Industries andcontained in its guidelines for recyclable printed matter.

Post-consumer plastic that finds its way into rivers and streams andeventually into the ocean as a consequence of improper disposal, among
others, continues to increase sharply as the global population expands.
Microplastics—tiny fragments of plastic created through degradation by waves,
UV light and other processes that break down larger pieces of debris—havebeen identi¿ed as a particular concern because of the danger to people andecosystems caused by their entry into the marine food chain. Accordingly,
one target set forth in the SDGs, adopted at the UN Sustainable Development
Summit in 2015, is to “prevent and significantly reduce marine pollution of
all kinds, in particular from land-based activities, including marine debris
and nutrient pollution” by 2025. This has since become a critical theme, withparticipants in the 2018 G7 Summit, held in Charlevoix, Quebec, Canada,
agreeing to reinforce related initiatives.

29̲ DIC Report 2019

Having recognized this as an urgent challenge for the chemicals industry,
DIC has begun developing products that will help address the issue of marine
plastics by reducing waste from used food containers by increasing therecyclability of post-consumer food packaging and the materials therein. In
October 2018, the Company announced the ¿rst of these, HYDRECT, a highly
recyclable water-based coating varnish that boasts excellent resistance towater, oil and heat when coated on paper. In February 2019, DIC kicked off
its new medium-term management plan, DIC111, to guide the Company fromfiscal year 2019 through fiscal year 2021, that includes a pledge to deliver
packaging solutions that contribute to sustainability for the global environment.
Plastic Packaging Waste Generation per Capita (2014)

Source: Plastic Packaging in Japan and Overseas (Presentation materials), Ministry of theEnvironment, Japan (Published in Japanese only; English translation of title by DIC)

A Distinctively
DIC Response

Developing HYDRECT, an FDA-compliant water-based coating varnish that is highly
recyclable and boasts excellent resistance to water, oil and heat“With the Tokyo 2020 Olympics and Paralympics imminent, the improper disposal of waste plastic in Japan is an issue gaining considerable attention.
Isn’t there any way we can replace plastic films laminated on paper and paperboard food containers with a coating that is less harmful to theenvironment?” DIC’s efforts to develop a new coating varnish were inspired by a customer query addressed to DIC Graphics in 2017. This entreaty
also underscored growing global calls for sustainable packaging. The development team began looking at ways to address this issue and soon
discovered a promising candidate in a coating developed by DIC Group company Sun Chemical that boasts outstanding water and oil resistance,
is compatible with both Àexo and gravure printing, and can be recycled into paper. However, there was also a downside: Sun Chemical’s coating
contains a substance that violates Japan’s Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc. It was thus
necessary to replace this substance and adjust the coating’s composition. Several candidates were selected and tested, a process of trial and errorthat eventually led to the successful commercialization of the product in autumn 2018.
Paper and paperboard food containers coated with the new varnish demonstrate revolutionary performance features. Resistant not only to liquid
and oil but also heat, these containers can be used in both regular and microwave ovens. Moreover, the degree of oil- and heat-resistance issigni¿cantly higher than that of conventional water-based varnishes. The ingredients used comply with the standards stipulated in both Japan’s Food
Sanitation Act and the U.S. Food and Drug Administration (FDA) and there is no danger of VOCs being released during the coating process. Perhaps
most important, because the varnish dissolves together with paper in a sodium hydroxide solution, post-consumer paper and paperboard containers
coated with the varnish are classi¿ed as rank A, meaning that they can be recycled into paper or paperboard.

Recyclability of
HYDRECT

Packaging coatedwith HYDRECT

Paper coated with HYDRECT dissolves completely in chemicals (left),while that laminated with polyethylene does not (right)

DIC’s new coating varnish, HYDRECT, was one of the products on exhibit in DIC’s booth at the Tokyo International Packaging Exhibition 2018 (Tokyo
Pack 2018). Presentations were given in which donuts and gyoza (pot stickers) in prototype packages were heated in a microwave, prompting manybooth visitors to pick up the packages and pepper booth staff with questions. Multiple inquiries were received from packaging-related companies, aswell as from trading companies that do business with paper manufacturers and convenience stores, a strong indication of both the high level of interestin addressing the issue of plastic pollution and potential demand for HYDRECT. At present, a wide range of paper and paperboard food container
manufacturers and processing companies are exploring the adoption of HYDRECT.

KEY PEOPLE from DIC

We will continue working to expand the areas where HYDRECT can be used instead of polyethylene.

Since the launch of HYDRECT, we have been particularly surprised by the number of inquiries forapplications that we had not even imagined. Although the greatest advantage this varnish offers
is that it is an alternative to polyethylene, it cannot currently be used on some types of containers
because of their shape. We are thus promoting ongoing efforts to modify the product with the aimof expanding compatibility, not only for containers but also for other applications.
In April 2018, the Packaging Solution Center was established at the Tokyo Plant, where wecurrently work, to advance collaboration with customers in the development of packaging.
Looking ahead, we will continue working closely with DIC Graphics, which operates the facility,
as we take on the challenge of developing next-generation packaging materials like HYDRECT,
taking inspiration from feedback received from visiting customers.
(From left)

Takafumi Yamazaki
Manager, Dispersion Technical Group 3, Dispersion Technical Division 1, DIC Corporation Hiroshi Kikuchi
Manager, Team 5, Tokyo Liquid Ink & Coatings Sales Group 1, DIC Graphics Corporation Jun Naitou

Supervisor, Team 2, Printing Inks & Supplies Sales Group 3, Offset Inks Division, DIC Graphics Corporation

DIC Report 2019 ̲30

TopicWEB

Sun Chemical developed SunColorBox, a unique set oftools and services that enable consistent and accurate digital color communication
http://www.dic-global.com/en/csr/
special/topics.html

Sun Chemical Promotes Initiatives Aimed at Addressing Important Social Imperatives
Sun Chemical, which oversees the DIC Group’s operations in Europe and the Americas, is one of the world’s leading manufacturers ofprinting inks. The company develops and supplies a broad range of products that address diverse social imperatives.

Brand owners are under constant pressure to streamline processes, introduce ef¿ciencies, manage costby eliminating waste and reduce time to market. But the bedrock of brand identity is color. If the color isn’tright, the integrity of the entire supply chain is compromised. This means that achieving consistent color
across substrates, print processes and national frontiers is essential to the ef¿ciency of the whole packaging workÀow. There are two
major obstacles to this. The ¿rst is the number of variables that make true color consistency elusive, such as package types, substrates,
inks and more. The second is the number of parties with input to the production and approval of color. The universe of brand owners,
designers and converters is vast and geographically spread out.
While software and hardware tools for color management are available, they are often deployed inconsistently by the individual
links in the supply chain. The result is a chain of disconnected islands of solutions, rather than a cohesive community working to anindustry-standard reference, with every supplier providing its own solution working within its own environment, without the necessary
integration needed for a highly ef¿cient workÀow. In practice, “color management” is often a mix of gut feel, operator experience andthe inconsistent use of measurement tools and samples.
Try to map the color management process in many packaging supply chains and the picture can be chaotic, with communication between the
different parties often going in loops of approval and re-approval. For brand owners, this is a recipe for error, inef¿ciency and unnecessary cost.
It’s no surprise that color that fails to meet brand owner expectations is the primary reason for rejects and reworks.
SocialImperative

Sun Chemical developed SunColorBox, a unique set of tools and services that enable consistent andaccurate digital color communication throughout the entire packaging supply chain. SunColorBox, aset of integrated tools, allows customers to select the most suitable services based on the size of theirbusiness and the investment required.
Since 2014, Sun Chemical has been implementing the SunColorBox solution at a large numberof customer sites around the world using all major commercial printing technologies, including Àexo,gravure and offset, and has achieved the following substantial savings for customers.
Sun Chemical s
Response

25‒30%

in press make-ready time

30‒40%

in substrate waste

10‒40%

in right ¿rst time on press

20‒70%
in ink return usage30‒80%

in color palette reduction

VOICE Build a complete support system to achieve customers’ sustainable goals
Customers who have taken advantage of the tools from SunColorBox have achieved many of their sustainability goals—all byachieving the right brand color the first time. The benefits are far reaching. While our central color management team manages
digital color management projects globally, implementation and support are all provided by the local Sun Chemical technicalpersonnel. We have over 300 highly trained SunColorBox specialists with support from our more than 20 color centers. This
centrally managed but locally supported model provides customers that personal touch in helping them achieve both their colorand sustainability goals and distinguishes Sun Chemical as the market leader in high-efficiency color management.
Business Leader, Color Management, Sun Chemical Corporation

31̲ DIC Report 2019

Patrice AurentyCorporate Governance
Basic Approach to Corporate Governance
The DIC Group identifies the purpose of corporate governance as being to ensure effective decision making pertaining to its
management policy of achieving sustainable corporate growth and expansion through sound and ef¿cient management, while at thesame time guaranteeing the appropriate monitoring and assessment of and motivation for management’s execution of business activities.
With the aim of achieving a higher level of trust on the part of shareholders, customers and other stakeholders and enhancing corporate
value, the DIC Group also promotes ongoing measures to reinforce its management system and ensure effective monitoring thereof.

| Policy on Corporate Governance
DIC has prepared a Policy on Corporate Governance, which it has published on its corporate website.
Policy on Corporate Governance WEB http://www.dic-global.com/en/about/pdf/governance_en.pdf| Corporate Governance Organization
A company with internal auditors, DIC maintains a Board of Directors and an Audit & Supervisory Board. DIC has also instituted an executive of¿cer
system and has established a Nomination Committee, a Remuneration Committee, an Executive Committee and a Sustainability Committee.
General Meeting of Shareholders

Corporate Governance Organization

Appointment

Board of Directors
Nomination Committee
Remuneration Committee

President and CEO

Appointment

Audit
Accounting
audit

Audit & Supervisory Board

Independent auditors

Sustainability Committee

Executive Committee

Internal Control Department

Business groups, New Business Development Headquarters,
Production Management Unit, Technical Management Unit,
R&D Management Unit, headquarters’ administrative units, sites

Group companies

Internal audit

1

Board of Directors

To accelerate decision making and reinforce corporate governance, nine directors have been elected to the Board of Directors. Of thenine, three are outside directors (one of whom is female). In principle, the Board meets once monthly. The Board of Directors is responsible
for making decisions on matters stipulated in the Companies Act of Japan, and in DIC’s own regulations, as requiring Board-level approval,
as well as for monitoring the execution of business activities, as reported by the executive of¿cers.
2

Nomination Committee

The Nomination Committee was established as an internal committee of the Board of Directors with the aim of ensuring objectivity in the nominationof candidates for the position of director, Audit & Supervisory Board member or executive of¿cer, and the dismissal of serving directors, Audit &Supervisory Board members and executive of¿cers. The committee, which submits proposals to the Board of Directors, meets as necessary. At
present, three of the committee’s ¿ve members are outside, while the position of committee chairman is ¿lled by an outside director.
3

Remuneration Committee

The Remuneration Committee was established as an internal committee of the Board of Directors with the aim of enhancing the objectivityof procedures for determining executives’ remuneration. The committee, which has been entrusted with responsibility for determining
the salaries and bonuses of directors and executive of¿cers, meets as necessary. At present, three of the committee’s ¿ve members areoutside, while the position of committee chairman is ¿lled by an outside director.
4

Executive Committee

The Executive Committee deliberates and resolves issues related to the execution of business activities. In principle, the committee meets
twice monthly. Committee members are directors and executive of¿cers designated by the Board of Directors. Meetings are also attended
by one Audit & Supervisory Board member as part of the auditing process. Details of deliberations and resolutions are reported to theBoard of Directors.
DIC Report 2019 ̲32

5Sustainability Committee

The Sustainability Committee, which functions as an advisory body, meets several times annually to formulate sustainability policies andactivity plans, as well as to evaluate and promote initiatives. Committee members are directors and executive of¿cers designated by the
Board of Directors. As part of audit activities, one Audit & Supervisory Board member also attends Sustainability Committee meetings. The
committee reports the matters upon which it deliberates and the results of its deliberations to the Board of Directors.
6

Audit & Supervisory Board

The Audit & Supervisory Board comprises four members, including two outside Audit & Supervisory Board members (one of whom isfemale). In principle, the Audit & Supervisory Board meets once monthly. Board activities include debating and determining auditing
policies and auditing plans. Board members also report on the results of audits conducted.
7Internal Auditing Department

The internal auditing department is charged with internal auditing, which includes monitoring the effectiveness of internal controls at DIC
and domestic DIC Group companies. For DIC Group companies in Asia, Oceania, the PRC, the Americas and Europe, internal auditing is
the responsibility of local internal auditing teams.
8

Accounting Auditors

DIC has engaged Deloitte Touche Tohmatsu LLC as its independent auditors. DIC strives to ensure an environment that facilitates theaccurate disclosure of information and fair auditing.

| Rationale Behind Current Corporate Governance Organization
DIC has instituted an executive of¿cer system, a move aimed at separating decision making and implementation and thereby accelerating
business execution and clarifying responsibilities. As well as appointing three highly independent outside individuals to its Board of
Directors, the Company has taken steps to reinforce its monitoring of business execution. DIC also has a Nomination Committee anda Remuneration Committee, which include the three outside directors, to ensure objectivity in the nomination of, and in determining
remuneration for, directors and executive of¿cers. The four-member Audit & Supervisory Board, which includes one attorney and one
certi¿ed public accountant as outside members, liaises with the accounting auditors and the internal auditing department. This structure
ensures the effective functioning of DIC’s corporate governance system.

| System of Internal Controls
1

Status of the System of Internal Controls

The DIC Group maintains a keen awareness of four key objectives, which are to ensure the effectiveness and ef¿ciency of its businesses,
uphold the reliability of its ¿nancial reporting, comply with laws and regulations relevant to its business activities, and safeguard its assets.
To this end, DIC has prepared and operates a system of internal controls, key components of which are summarized below, based upon
the Companies Act of Japan and the Financial Instruments and Exchange Act of Japan. The Board of Directors hears annual reports on
the status of the system of internal controls, a summary of which is included in the Company’s of¿cial report on its business activities.
2

Basic Policy Toward Eliminating Demands by Antisocial Elements

DIC’s basic policy, as outlined in the DIC Group Code of Business Conduct, is to stand ¿rmly against antisocial elements and in no way toacquiesce to demands presented by such elements.

| Outside Directors and Outside Audit & Supervisory Board Members
1

Number and Role of Outside Directors and Outside Audit & Supervisory Board Members

DIC currently has three outside directors and two outside Audit & Supervisory Board members. In addition to attending meetings of theBoard of Directors, the outside directors serve as members of the Nomination Committee and the Remuneration Committee, enablingthem to provide supervision with an independent point of view, thereby helping to reinforce DIC’s corporate governance. The two outside
Audit & Supervisory Board members—one an attorney specializing in corporate law and the other a certi¿ed public accountant—advise
management of the DIC Group from an expert, multifaceted and independent perspective, thereby helping to reinforce the auditing function.
2Standards Used to Evaluate the Independence of Outside Directors and Outside Audit & Supervisory Board Members

DIC has established standards for evaluating the independence of individuals appointed to the position of outside director or outside Audit &Supervisory Board member. DIC’s outside directors and outside Audit & Supervisory Board members are individuals who, based on thesestandards, are unlikely to have conflicts of interests with ordinary shareholders and who comply with criteria for the independence of
directors/audit & supervisory board members set by the Tokyo Stock Exchange.

33̲ DIC Report 2019

3

Framework for Supporting the Efforts of Outside Directors and Outside Audit & Supervisory Board Members

Prior to meetings of the Board of Directors, relevant materials are distributed to all directors, full-time Audit & Supervisory Board members, outside
directors and outside Audit & Supervisory Board members. In addition, directors bringing matters before the Board provide explanations in advance tooutside directors, while full-time Audit & Supervisory Board members provide explanations as necessary to outside Audit & Supervisory Board members.

| Other Initiatives to Enhance the Corporate Governance Organization
1

Composition of the Board of Directors

To enable the Board of Directors to resolve major operations-related issues, as well as
to facilitate the effective oversight of management, the Board of Directors comprises
outside directors, who maintain independence, and other individuals having a thoroughknowledge of the businesses of the DIC Group, with consideration given to ensuring abalance among necessary knowledge, experience and capabilities. In light of the DIC
Group’s global operations, DIC also strives to ensure diversity in the Board’s composition.
One member of the Board of Directors is female, as is one member of the Audit &Supervisory Board.

Composition of the Board of Directors

38.5%
61.5%

Composition of the Board of Directors and the Audit & Supervisory Board
In-house

Outside

Total

Percentage of outside
members

Directors

6

3

9

33.3%

Audit & Supervisory
Board members

2

2

4

50.0%

Total

8

5

13

38.5%

2

Directors of DIC

Outside directors

Remuneration for Executives

Remuneration for directors is determined by the Remuneration Committee, which takes into account prevailing market rates, and consistsof basic remuneration; bonuses, which are linked to consolidated operating results and the degree of achievement of individual targets; andstock compensation, which is based on medium- to long-term operating results. Directors who serve concurrently as executive of¿cers are
eligible for bonuses and stock compensation. Other directors and outside directors are eligible for basic remuneration only. Remuneration
for Audit & Supervisory Board members consists of basic remuneration only and is determined through discussion involving all Audit &Supervisory Board members, in accordance with internal rules established by the Audit & Supervisory Board, with consideration given to
ensuring a balance with remuneration for directors and to prevailing market rates.
3

Evaluation of the Board of Directors’ Effectiveness

DIC conducts an analysis and evaluation of the effectiveness of the Board of Directors annually via a self-evaluation conducted by the
directors and Audit & Supervisory Board members. In ¿scal year 2018, the Company conducted a survey of all directors and Audit &Supervisory Board members regarding, among others, self-evaluation and Board administration, responses to which were analyzed andevaluated by the Board of Directors. As a result, the effectiveness of the Board of Directors was con¿rmed.
To further improve the Board’s effectiveness, DIC recognizes the further enhancement of discussion regarding corporate strategy, includingcon¿rming the status of the medium-term management plan, as a key challenge and will continue working to promote improvements.

| Leveraging its Position as a Global Manufacturer of Fine Chemicals to Support the UNGC
Seeking to ful¿ll its responsibilities as a member of the international community in a more proactive
manner, in December 2010 the DIC Group pledged its support for the Ten Principles of the United
Nations (UN) and became a signatory to the United Nations Global Compact (UNGC).
Inaugurated in 2000, the UNGC is a voluntary initiative for companies that seek to achieve global
sustainable development. Companies and organizations worldwide have pledged their support for the
UNGC in the belief that global sustainable development is possible if companies align their businesspractices with, and ful¿ll their social responsibilities in, 10 globally accepted principles in the areas ofhuman rights, labor, the environment and the prevention of corruption.

DIC Report 2019 ̲34

Directors, Audit & Supervisory Board Members and Executive Officers(As of May 2019)| Directors

1

Chairman of the Board of Directors

Yoshiyuki Nakanishi

3

Representative Director

Masayuki Saito
Director

5 Director

7

Hideo Ishii

Kazuo Tsukahara Kuniko Shouji

2 Representative Director

4

Kaoru Ino

Yoshihisa Kawamura Toshifumi Tamaki

6

Director

8

Director*

Director*

9

Director*
8

6

5

7

9

* Outside

Yoshiaki Tamura

3

1

2

4

| Audit & Supervisory Board Members
1

Audit & Supervisory Board Member

Yoshiyuki Mase
2

Audit & Supervisory Board Member

Hiroyuki Ninomiya
3

Audit & Supervisory Board Member*

Katsunori Takechi
4

Audit & Supervisory Board Member*Michiko Chiba* Outside3

1

2| 2XWVLGH'LUHFWRU3URÀOHV
Kazuo Tsukahara

Kuniko Shouji| 2XWVLGH$XGLW 6XSHUYLVRU\%RDUG0HPEHU3URÀOHV
Katsunori Takechi

April 2008 Director and Managing Executive Officer, IHI Corporation
April 2012 Representative Director and Executive Vice President, IHI Corporation
June 2014 Advisor, IHI Corporation

June 2004 Executive Officer, Terumo Corporation
June 2010 Director and Senior Executive Officer, Terumo Corporation
June 2017 Advisor, Terumo Corporation

April
2000 Public Prosecutor, Civil Affairs Bureau, Ministry of Justice
October 2003 Joins Anderson Mori & Tomotsune
July
2011 Managing Partner, Takechi & Partners

Yoshiaki Tamura

Michiko Chiba

January 2007 Executive Officer, Asahi Glass Co., Ltd.
March 2013 Representative Director and Executive Vice President, Asahi Glass Co., Ltd.
March 2017 Executive Fellow, Asahi Glass Co., Ltd.

October 1989 Joined Showa Ota & Co. (currently, Ernst & Young ShinNihon LLC)
July
2010 Senior Partner, Ernst & Young ShinNihon LLC
September 2016 Founded Chiba Certified Public Accountant Office35̲ DIC Report 20194

| ([HFXWLYH2IÀFHUV

President and CEO

Executive Vice PresidentManaging Executive Officer

Managing Executive Officer

Managing Executive Officer

Kaoru Ino

Masayuki Saito

Kazunari Sakai

Hideo Ishii

Masami Hatao

Assistant to President and CEO
CFO
Chairman of the Board, Sun Chemical
Corporation
Chairman of the Supervisory Board, Sun
Chemical Group Coöperatief U.A.

General Manager,
Technical Management Unit

President, Packaging & Graphic
Business Group

President, Color & Display BusinessGroup
General Manager, Display Material
Products Div.

Managing Executive Officer

Managing Executive Officer

Toshifumi Tamaki

Naoyoshi Furuta

Managing Executive Officer

Managing Executive Officer

Executive Officer

Masaya Nakafuji

Kazuo Hatakenaka

Rudi Lenz

Head of Corporate Strategy Unit
In Charge of Kawamura Memorial DIC
Museum of Art

General Manager, Production
Management Unit

Head of General Affairs and Legal Unit
In Charge of Diversity

President, Functional Products
Business Group
General Manager, Performance
Material Products Div.

Vice Chairman of the Board,
Sun Chemical Corporation

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Shinsuke Toshima

Taihei Mukose

Kiyotaka Kawashima

Masanobu Mizukoshi

President and CEO,DIC Graphics Corporation

Chairman, DIC (China) Co., Ltd.
Chairman, DIC (Shanghai) Co., Ltd.

Head of Purchasing and Logistics &Information Systems Unit

General Manager,
R&D Management Unit
General Manager,
Central Research Laboratories

General Manager,
Composite Material Products Div.

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Paul Koek

Myron Petruch

Takeshi Asai

Koji Asada

Masahiro Kikuchi

Managing Director,
DIC Asia Pacific Pte Ltd

President and CEO,Sun Chemical Corporation

General Manager,
Corporate Planning Dept.
In Charge of Osaka Branch andNagoya Branch

Head of ESG Unit

Deputy Managing Director (South Asia),
DIC Asia Pacific Pte Ltd

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Masamichi Sota

Yuji Morinaga

Shuji Furuta

Kiyofumi Takano

Yoshinari Akiyama

General Manager,
Printing Material Products Div.
General Manager, Packaging & Graphic
Business Planning Dept.

General Manager,
Packaging Material Products Div.

Head of Finance and Accounting Unit

General Manager,
New Business Development
Headquarters

General Manager,
Color Material Products Div.

Koji Tanigami

DIC Report 2019 ̲36

Overview of Sustainability
In line with its basic sustainability policy, the DIC Group promotes a variety of sustainability initiatives worldwide and works to maintain an accurate
grasp of social imperatives pertaining to ESG-related issues.

Basic Sustainability Policy（Partially revised in March 2019）
The DIC Group is dedicated to conducting its business while retaining a strong commitment to five key concepts: preserving safety
and health, managing risks, ensuring fair business practices and respect for diversity and human rights, maintaining harmony withthe environment and advancing its protection, and creating value for society through innovation and contributing to ongoing economic
growth. DIC Group employees will continue working to deliver the value that its stakeholders—including its customers, suppliers, local
communities, shareholders and investors, and employees—expect, showing ingenuity and a sense of responsibility. The Group itself will
strive to remain an organization that contributes to sustainability for society, as well as to the conservation and improvement of the global
environment, by capitalizing on its businesses to achieve unfaltering growth, thereby enhancing its own sustainability.
Notes: 1. With the aim of ensuring that it remains a trusted corporate citizen with a proud reputation, in December 2010 the DIC Group became a signatory to the UNGC.
The Group also takes the guidelines provided by ISO 26000, the International Organization for Standardization’s standard for social responsibility, into account in conducting its operations.
2. The global community today recognizes the promotion of ESG management, which seeks to balance sustainable economic growth and the resolution of social
imperatives, as critical. This is evidenced by the fact that countries worldwide have ratified the Paris Agreement and the SDGs, both of which were adopted in 2015.

| Sustainability Framework and Themes
ThemesTo foster concrete measure, in fiscal year 2007 the DIC Group identified 12 key themes as a framework for implementing its CSR program.
Subsequently, the Group partially revised these themes in response to changes in the external environment and the progress of its efforts.
Today, the Group’s sustainability framework comprises 11 key themes, which are categorized as basic themes, themes that demonstrate unique
FDSDELOLWLHVDQGWKHPHVWKDWFRPELQHHOHPHQWVRIWKHSUHYLRXVWZRFODVVL¿FDWLRQV7KH*URXSLPSOHPHQWVDEURDGUDQJHRIJOREDOLQLWLDWLYHVWKDW
WDNHLQWRDFFRXQWLWVUHVSRQVLELOLW\WRHQVXUHSURSHUSURGXFWVWHZDUGVKLSDVZHOODVLWVSRVLWLRQDVDOHDGLQJPDQXIDFWXUHURI¿QHFKHPLFDOVThemes that demonstrateunique capabilities (A)Business models that respond to social imperatives
New technology development and value creation
Harmony with the community and social contributions
Communication with stakeholders

Core and category-specific themes
Themes that combine
elements of (A) and (B)Environment, safety and health
Quality
Human resources management
Sustainable procurement

Basic
Basic
(B))
themes(BthemesComplianceBusiness continuity management (BCM) and crisis management
Information security()

Deployment
In line with its basic sustainability policy, the DIC Group has formulated medium-term (fiscal years 2019–2021) policies and creates annual
activity plans for each of these themes. The Group makes use of the plan–do–check–act (PDCA) cycle in promoting initiatives and reports on its
achievements annually in the DIC Report. Individual product divisions, business groups, sites, and overseas and domestic DIC Group companies
are charged with pursuing effective sustainability programs by formulating their own annual activity plans, based on the Group’s plan, as well aswith ensuring that the Group’s policies permeate their organizations and labor forces and linking sustainability initiatives to business targets.

The 2030 Agenda for Sustainable Development
At the UN Sustainable Development Summit in September 2015, a proposal titled “Transforming
our world: the 2030 Agenda for Sustainable Development,” later summarized as the SDGs,
was adopted with the participation of more than 150 UN member states. The agenda, which
succeeded the Millennium Development Goals (MDGs), encompasses 17 goals and 169
targets. All UN member states are expected to mobilize efforts to attain the 17 goals, essential
to sustainable development for the planet, by 2030. The DIC Group pledges to contribute
through its business activities to the success of the SDGs.
For more information on the SDGs, please visit:
WEB http://www.un.org/sustainabledevelopment/sustainable-development-goals/

37̲ DIC Report 2019

Materiality Analysis
The DIC Group recently once again abstracted and analyzed material issues, that is, issues with the potential to negatively affect its
SHUIRUPDQFHDQGKDVLGHQWL¿HGWKRVHRISDUWLFXODUVLJQL¿FDQFH*XLGHGE\LWVQHZPHGLXPWHUPPDQDJHPHQWSODQ',&DQGE\LWV
ORQJWHUPJURZWKVFHQDULRWKH*URXSZLOOFRQWLQXHZRUNLQJWRHQVXUHWKDWWKHVHHIIRUWVDUHEHQH¿FLDOWRWKHPDQDJHPHQWRILWVEXVLQHVVHV

Materiality Analysis Process1

Abstraction of Issues

DIC has abstracted material issues of particular significance to the DIC Group based on, among others, the GRI’s G4 Sustainability
Reporting Guidelines, issues delineated in DIC111, and principal risks and opportunities.
2

Materiality Analysis

Sustainability Committee members, heads of departments that spearhead the implementation of initiatives related to sustainability themes,site general managers, and senior management from Group companies in the United States, Asia and elsewhere assessed abstracted
issues from the perspectives of importance to DIC Group businesses and importance to stakeholders. Based on the results of this process,and of extensive subsequent deliberations by the Sustainability Working Group and the Sustainability Committee, issues of particular
VLJQL¿FDQFHWRWKH*URXSZHUHGHWHUPLQHGAs a result of this process, issues of fundamental importance to DIC Group businesses, including occupational health and safety, respectfor human rights and compliance, are presented separate from the DIC Group’s materiality matrix.
テーマ(a) Importance to DIC Group businesses
Issues were assessed for potential to negatively affect the DIC Group now or in the future, with consideration given to both risks andbusiness opportunities.
(b) Importance to stakeholders

The DIC Group’s Materiality Matrix
DIC has organized the issues abstracted andassessed through the process above into 28
general materiality categories. The materialityof these issues was scored and a materiality
matrix created by plotting the scores using two
scales, i.e., importance to stakeholders andimportance to DIC Group businesses. In May
2019, this matrix, together with the separate
issues of fundamental importance to DIC Groupbusinesses, were approved by the Sustainability&RPPLWWHHDQG¿QDOL]HGThe DIC Group’s Materiality Matrix
Very
high

Strengthening of partnerships
Reduction of environmental impact(emissions into air and water)● Digital transformation● Food safety● Response to a circular economy● Communication with customers
and markets●●

Importance to stakeholders

The DIC Group recognizes four major
external stakeholder groups (customers,
suppliers, local communities and society,and investors). Issues were examined interms of both level of interest on the part of
stakeholders and potential impact. Key criteria
from external assessment organizations (theDow Jones Sustainability Indices (DJSI),FTSE, MSCI, the Sustainability AccountingStandards Board (SASB) of the United Statesand Sustainalytics) were also referenced,
adding an objective perspective.

Management of water resources
Contribution to local communities● Reputation-related risks● Response to tax-related risks● Management of work outsourced
to subcontractors

Promotion of diversity
Realization of colorful andcomfortable lifestyles● Business continuity(Business continuity planning(BCP))●●●●

Efforts to enhance employee
satisfaction/fulfillment● Promotion of open innovation● Intellectual property strategies●

Transformation to a sustainablebusiness structure● Product stewardship● Response to climate change● Efforts to strengthen productdevelopment capabilities andcreate new businesses●

Response to changes in environmental
laws and regulations● Promotion of sustainable procurement● Ability to maximize capital efficiency● Governance at subsidiaries● Information security●

Human resources development
and securing employment● Addition of depth to and expansionof basic technologies
●

High
High
Importance to DIC Group businesses
Issues of fundamental
importance to
DIC Group businesses

Very
high

• Security and disaster prevention, occupational safety and health• Respect for human rights • Compliance • Product/manufacturer’s liability• Quality management • Political and geopolitical change

Information on key concrete initiatives related to issues of particular significance is disclosed in the complete version of
DIC Report.

DIC Report 2019 ̲38

Compliance

SDGs Goal 16
QR codeToward Fair and Transparent Corporate Activities
WEB

http://www.dic-global.com/en/csr/philosophy/management/compliance.html| The DIC Group Code of Business Conduct
The DIC Group completed the DIC Group Code of Business Conduct in July 2014. The code not only mandates compliance with national laws andinternational rules but also presents 10 principles essential to the professional conduct of DIC Group employees. The Group held presentations for all
existing Group employees at the time of release, while new employees receive training at point of hire. The goal of such training is to ensure employees
worldwide share values cherished by the Group and approach their responsibilities with a sense of responsibility and a commitment to doing the right thing.

| Initiatives to Promote Compliance❶ Training focused on legal issues to improve compliance awareness is provided for employees at point of hire, when promoted and before overseas

transfers. In addition, with the aim of promoting awareness of the DIC Group Code of Business Conduct, in ¿scal year 2018 e-learning focusedon international antitrust legislation and insider trading was provided. Training on legal issues was also provided once for DIC executives, once for
executives of Group companies in Japan and at DIC Group companies in four countries overseas (PRC, Singapore, Thailand and Malaysia).
❷ Compliance of¿cers are appointed at all regional headquarters—DIC (Japan), Sun Chemical (Americas and Europe), DIC (China) (PRC) and DIC Asia
Paci¿c (Asia and Oceania)—to spearhead global compliance efforts.
The DIC Group vows that it will not violate the principles of the DIC Group Code of Business Conduct, even if such a violation would appear to pro¿t
the Group. As a corporate citizen, the Group also pledges to respect social norms and act in a sound and socially acceptable manner. In ¿scal year 2018,
there were no serious violations of compliance laws.

| Establishing and Operating a Whistle-Blowing System
The DIC Group has established a compliance whistle-blowing system independent from channels for communication used in the conduct of business.
This system encompasses hotlines that can handle reports of compliance issues and questions in the languages of more than 160 countries. The Group
has also devised strict rules under this system to protect whistle-blowers from retaliation and works to ensure the system functions in a proper manner.

| Taxation Compliance
In November 2017, the DIC Group formulated an official approach to tax. As an organization with global operations, the Group engages in fair andappropriate tax planning that reÀects the nature of its businesses. The Group is also aware of risks associated with transfer price taxation and the use of
tax havens and of its obligation to pay appropriate taxes in the proper jurisdictions as appropriate for its operations.
The DIC Group’s Approach to Tax

WEB

http://www.dic-global.com/en/csr/philosophy/management/tax.html

BCM and Crisis Management

QR codeReducing Business Risks and Preventing the Recurrence of Incidents
WEB

http://www.dic-global.com/en/csr/philosophy/management/bcm.html| Framework for Promotion
Having prepared crisis management rules and manuals for use across the DIC Group in the event of a major disaster, DIC has formulated business
continuity plans (BCPs) for individual product divisions. To prevent BCPs from becoming empty formalities, the Group works to identify issues andimplement ongoing improvements through annual training and emergency response exercises.

| BCM in Fiscal Year 20182017

A number of natural disasters struck Japan in ¿scal year 2018. In each instance, affected sites assessed the extent of impact based on their BCPs andpromptly informed corporate headquarters. Fortunately, these events did not affect the Group’s production or supply activities and none of its major
customers or suppliers suffered major damage. Against this backdrop, DIC stepped up efforts to encourage awareness among and provide training forsite and Group company BCP of¿cers in Japan, as well as to identify new issues and devise remedial measures.

| Promoting Complementary Production Capabilities
Recognizing the need to ensure the DIC Group can ful¿ll its supply responsibilities in the event of a major natural disaster, the Saitama Plant and Qingdao
DIC Finechemicals Co., Ltd. in the PRC collaborated on the formulation of a BCP for the LC materials business that incorporates complementary
production capabilities, ensuring one can take over for the other if required. Group pigment production facilities cooperate on a continuous basis to plan
emergency response measures.

39̲ DIC Report 2019

| Initiatives Aimed at Formulating More Effective BCPs
DIC recognizes the need to ensure that divisions and departments share a common crisis awareness to ensure the prompt restoration of operations in theevent a production site is damaged as the result of a disaster or other event. In ¿scal year 2018, the Company organized BCP lectures for product division
staff, as well as for domestic and overseas Group company executives and group leaders, and conducted BCP-focused joint product division–site exercises
at seven principal domestic sites.

| Efforts to Reinforce Safety Measures Overseas
The DIC Group is reinforcing safety measures to protect DIC Group employees overseas in the event of terrorist acts, uprisings, kidnappings and other incidents.
These include advancing awareness among related individuals and strengthening corporate headquarters’ ability to respond effectively in an emergency situation
by establishing an emergency overseas contact network, providing risk information to overseas sites, preparing crisis management manuals, and organizing
safety training and exercises based on hypothetical situations for employees taking up new overseas posts or embarking on overseas business trips.

Information Security

QR codeInitiatives to Ensure Information SecurityWEB

http://www.dic-global.com/en/csr/philosophy/management/security.html| Globally Maintaining and Enhancing Information Security
Regulations and Guidelines
The DIC Group continues to update its Basic Policy on Information Security, created in 2010, confidential information management regulations andinformation management guidelines regularly and as required to ensure its ability to address new security risks in a timely manner. The Group is also
implementing new regulations as appropriate in response to the increasing prevalence of digital technologies. In addition, the Group has establishedseparate rules for handling personal information and customer information in its information management guidelines, which it is working to disseminate
among employees and put into operation. In ¿scal year 2018, the DIC Group reported no breaches of customer privacy or losses of customer data.
Management Framework
The Information Security Committee meets twice annually to determine policies and procedures for information security in each area of the DIC Group’s
operations. Information security of¿cers and managers are also appointed in each individual business group and functional unit to ensure the appropriate
management and handling of important everyday information. To ensure it is prepared in the unlikely event of an information security–related incident, theGroup has created a task force operational manual and periodically conducts training to ensure effective initial responses to incidents when they occur.
Infrastructure
In addition to ongoing initiatives, including the early installation of a next-generation ¿rewall to protect against targeted cyber attacks by third parties, DIC
has taken decisive steps to fortify its information security infrastructure to accommodate integration with the IoT, the expanded use of cloud computing
and other new technologies, thereby reinforcing its management foundation.
In ¿scal year 2018, DIC completed deployment of an information infrastructure/secure environment creation project initially implemented in the PRC andSoutheast Asia (¿scal years 2015–2017) in the Republic of Korea (ROK) and Taiwan.
Employee Education and Training
Since ¿scal year 2017, the DIC Group has offered an annual e-learning information security program to employees in Japan and elsewhere in Asia. The
percentage of eligible employees participating in this e-learning program is currently 90%. The Group also provides information security training for
employees in the Americas and Europe and works to promote awareness of the DIC Group’s security policy, regulations and information infrastructure,and of effective ways to address new security threats and challenges associated with social media.

Comment As a business partner, this is my take on DIC’s information security initiatives.
Our organization has provided assistance to DIC, particularly in the assessment of information security–related risks, since May 2017. One
specific effort has involved the assessment of current capabilities from multiple perspectives, which involved the definition of critical data(including personal information and confidential business information), a secure configuration and set up for network systems that handle
such critical data, physical and logical access control, audit log management and the establishment of a system for emergencies, andthe maintenance of a policy that clarifies organizational roles and responsibilities. Having worked with DIC to assess and prioritize risks
associated with issues highlighted through this process and clari¿ed areas requiring reinforcement, we also assisted with the implementation ofadministrative, technical, human and organizational countermeasures.
The distinguishing feature of DIC’s initiatives is the Company’s focus on introducing measures and rules that give due consideration topracticality so as not to be a hindrance to existing business while at the same time ensuring its ability to ensure effective security. I look forward
to continuing to assist DIC in its efforts to strengthen its information security in the years ahead.
General Manager, Advanced Information Security Services Division, BroadBand Security, Inc.

Nobukazu Yamada

DIC Report 2019 ̲40

Environment, Safety and Health (ESH)

SDGs Goals 3, 6, 7, 12, 13, 14 and 15
QR codeToward the Achievement of a Sustainable SocietyWEB

http://www.dic-global.com/en/csr/environment/

Management System
The DIC Group promotes a broad range of ESH initiatives through its Responsible Care program.

| Initiatives in Fiscal Year 2018
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DQ(6+PDQDJHUIURPFRUSRUDWHKHDGTXDUWHUVWRVHUYHDVUHJLRQDO(6+GLUHFWRUIRU*UHDWHU&KLQDDQGDVVLJQHGFRRUGLQDWRUVWRRYHUVHHHIIRUWVLQWKHVRXWKHUQDQGHDVWHUQSDUWVRIWKH35&,QWKH$VLD±3DFL¿FUHJLRQWKH&RPSDQ\LQVWDOOHG(6+FRXQWU\KHDGV LQGLYLGXDOVLQFKDUJHRI
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RIFUDIWLQJVWDQGDUGVDPRQJRWKHUVDQGH[SORULQJLPSURYHPHQWVWRDGGUHVVVKDUHGFKDOOHQJHVESH Auditing| Principal Initiatives in Fiscal Year 2018
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Overseas

Japan
DIC

DIC Graphics

9 sites

4 sitesTotal

13 sites

Greater
China

21

ROK

companies

Total

3

companies

Asia–Pacific region

16

companies(out of 21)

40 companies

9LRODWLRQVZLWKDSHQDOW\H[FHHGLQJ

Occupational Safety and Health/Disaster Prevention
Viewing the prioritization of operational safety as a core management tenet, the DIC Group works tirelessly to prevent accidents and disasters and boost the level of ESH initiatives.

| Audits in Fiscal Year 2018
1

Centralizing Management of Monthly Report Data in the Cloud,Q¿VFDO\HDUWKH',&*URXSHVWDEOLVKHGDV\VWHPIRUDJJUHJDWLQJPRQWKO\RFFXSDWLRQDOVDIHW\DQGKHDOWKGDWDIRULQGLYLGXDO*URXSFRPSDQLHVLQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQDVDPRQWKO\UHSRUW7KLVPDGHLWHDVLHUWRPRUHVZLIWO\LGHQWLI\DQGFRPSDUHZRUNLQJKRXUVWKHQXPEHURIDFFLGHQWVOHDGLQJWRZRUNGD\VORVWRFFXSDWLRQDODFFLGHQWIUHTXHQF\UDWHVDQGRWKHUPRQWKO\GDWDIRUWKHVHUHJLRQVWKHUHE\IXUWKHUHQKDQFLQJ*URXSZLGHPDQDJHPHQWDQG
UHJLRQDOSHUIRUPDQFHV,Q¿VFDO\HDUWKH*URXSEHJDQUHFRUGLQJDQGVWRULQJWKLVGDWDLQWKHFORXGWRIDFLOLWDWHFHQWUDOL]HGPDQDJHPHQW
2

Reducing Risks%\XQGHUVWDQGLQJSRWHQWLDOULVNVLQSURGXFWLRQSURFHVVHVIDFLOLWLHVDQGGHYLFHVDQGWKHKD]DUGVRIFKHPLFDOVXEVWDQFHVWKH',&*URXSV\VWHPDWLFDOO\SUHSDUHVLQLWLDWLYHVWRSUHYHQWDFFLGHQWVDQGRFFXSDWLRQDOLQMXULHV,Q-DSDQWKH*URXSKDVIRUPXODWHGJXLGHOLQHVIRUFRQGXFWLQJULVNDVVHVVPHQWV
ZKHQGHSOR\LQJQHZRUPRGL¿HGHTXLSPHQWRUFKDQJLQJSURGXFWLRQSURFHVVHVDQGSURPRWHVRQJRLQJHIIRUWVWRUHGXFHULVNVDVVRFLDWHGZLWKFKHPLFDOVXEVWDQFHV
3

Training Skilled Safety Personnel to Predict Risks

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41̲ DIC Report 2019

Status of Occupational Accidents
7KH',&*URXSSURPRWHVDYDULHW\RILQLWLDWLYHVDLPHGDWHOLPLQDWLQJRFFXSDWLRQDODFFLGHQWV   ,Q ILVFDO \HDU  WKH QXPEHU RI RFFXSDWLRQDODFFLGHQWVUHVXOWLQJLQZRUNGD\VORVWDFURVVWKHJOREDO',&*URXSZDVXSVOLJKWO\IURP¿VFDO\HDU/RRNLQJDKHDGWKH*URXSZLOOFRQWLQXHZRUNLQJWRDQDO\]HWKH
FDXVHVRIRFFXSDWLRQDODFFLGHQWVUHVXOWLQJLQZRUNGD\V
ORVWWKDWKDYHRFFXUUHGWRGDWHDQGWRUHÀHFWLWV¿QGLQJV
LQFRQFUHWHLPSURYHPHQWVZLWKWKHJRDORISUHYHQWLQJWKH
RFFXUUHQFHRIVXFKDFFLGHQWVLQWKHIXWXUH

Workdays Lost Due to Occupational Accidents (FY2016–2018)
DIC
Number of
workdays lost

DIC Group (Global)

DIC Group (Japan)

2016

2017

2018

2016

2017

2018

2016

2017

2018

3

2

6

5

3

8

71

70

91

Frequency
rate

0.541 0.360 1.071 0.548 0.331 0.848 1.893 1.752 2.221

Severity rate

0.012 0.054 0.021 0.026 0.028 0.013

TRIR*

--

--

--

2.35 2.16 2.50 3.07 2.65 2.86 3.84 3.98 4.69

7RWDOUHFRUGDEOHLQMXU\UDWH 75,5 1XPEHURIRFFXSDWLRQDODFFLGHQWVUHVXOWLQJLQORVWZRUNGD\V1XPEHURIRFFXSDWLRQDODFFLGHQWVQRWUHVXOWLQJLQORVWZRUNGD\V0LOOLRQZRUNKRXUV

4

Promoting Hands-On Safety Training

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Environmental Safety
The DIC Group recognizes that it has a responsibility to help address environmental issues and is taking decisive steps to reduce its negative impact, thereby contributing to sustainability.

Climate Change| Framework for Promotion',&DQG',&*URXSFRPSDQLHVLQ-DSDQKDYHHVWDEOLVKHG(QHUJ\6DYLQJ3URPRWLRQFRPPLWWHHVDQG(QHUJ\6DYLQJZRUNLQJJURXSVWKHODWWHUFRPSULVLQJ
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| Setting a New Long-Term Target for the Reduction of CO2 Emissions,Q¿VFDO\HDUWKH6XVWDLQDELOLW\&RPPLWWHHVHWDPHGLXPWHUPWDUJHWIRUUHGXFLQJDEVROXWHHPLVVLRQVRI&2DFURVVJOREDO',&*URXSVLWHVE\
IURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU,Q',&WKH*URXSKDVVHWDORQJWHUPWDUJHWRIDUHGXFWLRQE\¿VFDO\HDU/RRNLQJDKHDG
WKH',&*URXSZLOOZRUNWRDFKLHYHWKHVHWDUJHWVE\SURPRWLQJDWZRSURQJHGVWUDWHJ\FHQWHUHGRQSURPRWLQJHQHUJ\VDYLQJLQLWLDWLYHVDWVLWHVDQGDFWLYHO\DGYDQFLQJWKHXVHRIUHQHZDEOHHQHUJ\| Energy Consumption and CO2 Emissions by the Global DIC Group$OWKRXJKSURGXFWLRQYROXPHE\WKHJOREDO',&*URXSZDVHVVHQWLDOO\OHYHOLQILVFDO\HDUHQHUJ\FRQVXPSWLRQZDVGRZQIURPILVFDO\HDU
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LQWHUPVRINLORJUDPVRI&2SHUPHWULFWRQQHZHUH
GRZQRUIURP¿VFDO\HDU3ULQFLSDOIDFWRUVEHKLQGWKHVHUHVXOWVLQFOXGHWKHVWDUWXSRIDPHJDVRODUSRZHUV\VWHPZLWKDJHQHUDWLQJFDSDFLW\RI0:DWWKH.DVKLPD3ODQWDQGDELRPDVVERLOHUZLWKDQHYDSRUDWLRQUDWHRIPHWULFWRQQHVKRXUDW
WKH+RNXULNX3ODQWDQGWKHSXUFKDVHRIORZFDUERQHOHFWULFSRZHUDWVHYHUDOVLWHVLQ-DSDQGlobal CO2 Emissions in Fiscal Year 2018
Results of energy-saving initiatives implemented by the DIC Group in fiscal year 2018
and change from base year (fiscal year 2013)
Energyconsumption

emissions- 12.7％ perCO unitof production - 11.5 ％

722,955
metric tonnes

Fiscal year 2013

2

617,964
metric tonnes- 14.5％from fiscal year 2013

Fiscal year 2018

DIC Report 2019 ̲42

| Reducing Fossil Fuel Use by Promoting the Use of Renewable Energy
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(DUO\LQILVFDO\HDU',&FRPSOHWHGWKHLQVWDOODWLRQRIVRODUSRZHUV\VWHPVDWILYHVLWHV7KHVH
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0HJDVRODUSRZHUV\VWHPDWWKH7DWHED\DVKL3ODQW

Initiatives by DIC Group Companies Overseas$JDLQVWDJOREDOWUHQGWRZDUGGHFDUERQL]DWLRQLQFOXGLQJE\SRSXODUL]LQJWKHXVHRIUHQHZDEOHHQHUJ\',&*URXSFRPSDQLHVLQWKH$VLD±3DFL¿FUHJLRQ*UHDWHU&KLQDDQGWKH$PHULFDVDQG(XURSHDUHPDNLQJXVHRIJRYHUQPHQWVXEVLGLHVDQGVXSSRUWWRIRUH[DPSOHLQVWDOOELRPDVVERLOHUVDQGVRODUSRZHUV\VWHPV,Q
¿VFDO\HDUUHQHZDEOHHQHUJ\XVHGE\',&*URXSFRPSDQLHVRYHUVHDVDPRXQWHGWR*-XSIURP*-LQWKHSUHYLRXV¿VFDO\HDU| Energy Consumption and CO2 Emissions by the DIC Group in Japan:LWKSURGXFWLRQYROXPHE\WKH',&*URXSLQ-DSDQ²WKHVLWHVRSHUDWHGE\',&DQGGRPHVWLF*URXSFRPSDQLHV²GRZQLQ¿VFDO\HDU
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Independent Electric Power Generation: 24.0% of Total Consumption in Japan,Q-DSDQWKH',&*URXSKDVQDWXUDOJDV±IXHOHGFRJHQHUDWLRQV\VWHPVDWIRXUSODQWV &KLED6DLWDPD*XQPDDQG.DVKLPD (OHFWULFSRZHUFRQVXPSWLRQE\WKH',&*URXSLQ-DSDQLQ¿VFDO\HDUURVHIURPWKHSUHYLRXV¿VFDO\HDUWRN:KDSSUR[LPDWHO\RIZKLFKZDVJHQHUDWHGLQGHSHQGHQWO\ZLWKHOHFWULFSRZHUJHQHUDWHGXVLQJUHQHZDEOHHQHUJ\DFFRXQWLQJIRUDQGHOHFWULFSRZHUJHQHUDWHGXVLQJFRJHQHUDWLRQV\VWHPVUHSUHVHQWLQJ,QGHSHQGHQWO\JHQHUDWHGHOHFWULFSRZHUZDVXSIURPWKHSUHYLRXV¿VFDO\HDURZLQJWRDQLQFUHDVHLQVRODUSRZHUDevelopment of a Weather Forecast Data–Based Renewable Energy Solution
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TPIC

DIC Wins New Energy Foundation Chairman’s Award in the Adoption and Application Category of the 2018 New Energy Awards,Q'HFHPEHU',&ZRQD1HZ(QHUJ\)RXQGDWLRQ&KDLUPDQ¶V$ZDUGLQWKH$GRSWLRQDQG$SSOLFDWLRQ&DWHJRU\RIWKH1HZ(QHUJ\$ZDUGVLQUHFRJQLWLRQRIWKHH[SDQGHGXVHRIUHQHZDEOHHQHUJ\DWWKH.DVKLPD3ODQW7KHDZDUGVSURJUDPZKLFKZDVSUHVHQWHGE\WKH1HZ(QHUJ\)RXQGDWLRQZDVHVWDEOLVKHGZLWKWKH
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43̲ DIC Report 2019

| CO2 Emissions by the DIC Group Overseas:KLOHSURGXFWLRQYROXPHE\WKH',&*URXSRYHUVHDVLQ¿VFDO\HDUHGJHGXSIURP¿VFDO\HDUHQHUJ\FRQVXPSWLRQVOLSSHGDQGHQHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQGHFOLQHG&2HPLVVLRQVE\RYHUVHDV*URXSFRPSDQLHVLQ¿VFDO\HDUGHFUHDVHGDQG&2HPLVVLRQVSHUXQLWRISURGXFWLRQZHUHGRZQRUORZHUWKDQLQ¿VFDO\HDU)DFWRUVFRQWULEXWLQJWRWKHGHFOLQHLQ&2HPLVVLRQVLQFOXGHGHIIRUWVE\LQGLYLGXDOFRPSDQLHVWREUHDNGRZQWKH*URXS¶VHPLVVLRQVUHGXFWLRQWDUJHWVDQGSURPRWHGHFDUERQL]DWLRQLQLWLDWLYHVWKHVWDUWXSRIDELRPDVVERLOHUDW+DLQDQ',&0LFURDOJDH&R/WG
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Reducing Emissions of VOCs
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| Reducing SOx, NOx and COD
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（Metric tonnes）

97
183

97
148
100
204

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89
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116
139

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128
537
125
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1,288
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02

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6,000

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DIC
3,426
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5,581| Principal Initiatives in Fiscal Year 2018

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DIC Group (Japan)

Managing Water Resources| Principal Initiatives in Fiscal Year 2018
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Safety in Logistics
The DIC Group works with logistics partners to minimize risks, including by supplying information needed for the shipping/transport of its products.

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LQVSHFWLRQVZHUHFRQGXFWHGDWQLQHRIWKHVHRI¿FHVEnsuring the Safety of Chemical Substances
The DIC Group continues working to provide appropriate information to stakeholders to ensure the appropriate handling of its products over their entire life cycles.

| Managing Chemical Substances
Ensuring the Swift Provision of Reliable SDSs

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| Principal Initiatives in Fiscal Year 2018
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Quality

QR codeEnhancing Product Quality and Customer Satisfaction
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http://www.dic-global.com/en/csr/quality/

DIC’s Quality Policy&RQWULEXWHWRWKHSURVSHULW\RIFXVWRPHUVDQGVRFLHW\E\FRQVLVWHQWO\SURYLGLQJUHOLDEOHSURGXFWV 8SGDWHGLQ0D\

| Framework for Implementation
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DQGLQVSHFWLRQSURFHGXUHVInitiatives Aimed at Increasing Customer Satisfaction
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1

2

Efforts to Enhance Product Quality–Related Educational Initiatives&RPPLWWHGWRSURYLGLQJVDIHVHFXUHSURGXFWVWKDWVDWLVI\LWVFXVWRPHUV',&UHFRJQL]HVWKHLPSRUWDQFHRIHQVXULQJWKDWHPSOR\HHVPDLQWDLQDKLJKDZDUHQHVVRITXDOLW\DVZHOODVDFRQVWDQWFRPPLWPHQWWRDFKLHYLQJIXUWKHUTXDOLW\LPSURYHPHQWVDQGXSKROGLQJKLJKTXDOLW\VWDQGDUGV7RWKLV
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DIC Report 2019 ̲46

Human Resources Management

SDGs Goals 3, 4, 5, 8 and 10
QR codeWorking to Enhance Job Satisfaction
WEB

http://www.dic-global.com/en/csr/stakeholder/staff.html| Strategies for a Stronger Management Infrastructure
DIC’s new medium-term management plan, DIC111, sets forth a new program, dubbed WING, that is designed to rally the Company’s diverse humanresources as the source of its competitiveness as a global organization. WING centers on four core themes: “Work style reform,” “HR infrastructurereform,” “next management selection” and “global talent development.”

Basic Personnel Statistics (DIC)
Fiscal year 2016
Number of
employees

MaleFemaleTotal

Average age

Male
FemaleTotal

Averageyears ofemployment

Male
FemaleTotal

New
graduates
hired

Male
FemaleTotal

Fiscal year 2017

Fiscal year 2018

2,618
655
3,273
42.2
41.3
42.0
18.2
19.2
18.4
39
11
50

2,628
662
3,290
42.5
41.9
42.4
18.4
19.7
18.6
43
19
62

2,653
660
3,313
41.9
40.6
41.6
17.8
18.5
18.2
38
14
52

Retention rate
(after three
years)

Male
Female
Total

Separations(voluntary)(number ofindividuals)

Male
Female
Total

Separation rate(voluntary)

Male
FemaleTotal

Fiscal year 2016

Fiscal year 2017

Fiscal year 2018

(Fiscal year 2013 hires)(Fiscal year 2014 hires)(Fiscal year 2015 hires)

79.2%
100%
83.5%
35
11
46
1.3%
1.7%
1.4%

87.8%
81.0%
86.3%
55
15
70
2.1%
2.3%
2.1%

91.3%
91.7%
91.4%
32
8
40
0.3%
0.2%
0.3%

| The DIC Group’s Human Rights Policy
The DIC Group actively supports global codes governing human rights*, in line with which in May 2018 it formulated the DIC Group Human Rights
Policy. The DIC Group Code of Business Conduct, which outlines standards that DIC Group employees are expected to observe, also lays down
provisions prohibiting human rights violations and requiring respect for diversity, two philosophies that are the foundation of the Group’s corporate
activities. DIC Group employees are obliged to understand and provide written pledges to abide by the Code.
* The International Bill of Human Rights, comprising the Universal Declaration of Human Rights and the International Covenants on Human Rights (the International Covenant
on Economic, Social and Cultural Rights and the International Covenant on Civil and Political Rights); the International Labour Organization (ILO)’s Declaration of Fundamental
Principles and Rights at Work; the United Nations’ Guiding Principles on Business and Human Rights; and the Ten Principles of the UNGC.

| Initiatives in Fiscal Year 2018
A total of 58 DIC Group companies in Japan and overseas implement voluntary human rights and labor practices inspections. In ¿scal year 2018, DIC
re¿ned the scope of questionnaires distributed to companies for this purpose and began promoting efforts to increase the visibility of related issues atindividual companies, providing direction and/or training at corporate headquarters where necessary. Having completed verification of the results ofinspections at companies in Japan, in ¿scal year 2019 DIC will gradually expand efforts to ascertain status, promote awareness and provide training at
Group companies in key overseas markets.

| Diversity Promotion and Work Style Reform
The DIC Group works to create workplaces that enhance job satisfaction for all employees. The principal human resources management strategy of
DIC’s new medium-term management plan, DIC111, is to reform work styles to capitalize on diversified individuality. To this end, the Company has
identi¿ed introducing alternative working arrangements that leverage digital tools, including telecommuting and Àextime; shifting the focus of evaluations
from quantity to quality; and providing support for employees who have childcare or nursing care responsibilities or suffer illness as key themes. DIC is
also promoting ESG management to strengthen its management infrastructure, with initiatives in Japan emphasizing increasing the percentage of theCompany’s management positions occupied by female employees, the percentage of its overall labor force accounted for by foreign nationals, and thenumber of women and foreign nationals in management positions.

1

Hiring Diverse Human Resources

With the objective of securing talented individuals with advanced specialized capabilities, global perspectives and language capabilities, DIC actively
promotes the hiring of international students completing undergraduate or graduate studies at Japanese universities; Japanese and foreign nationals
completing undergraduate or graduate studies at overseas universities; and experienced mid-career candidates with extensive experience and expertise.
At present, approximately 50 foreign nationals are employed in various capacities at DIC.

47̲ DIC Report 2019

VOICE DIC’s Áexible work environment enables employees to accommodate work plans.
As a new graduate, I wanted to ¿nd a job with a company that would help me grow as a citizen of the world. As an organization with bases around the world, DIC was the ideal
choice. The group I was assigned to is tasked with developing PPS compounds, which are key engineering plastics used widely in automotive components. Because DIC produces
PPS compounds at ¿ve sites worldwide, including in Japan, we interact frequently with colleagues and customers from overseas. Several members of our team have experience
working in other countries, which makes for a lot of unique personalities. DIC has introduced a variety of working arrangements, including Àextime and working at home. This
creates a work environment that enables employees to, for example, adjust work hours to accommodate work plans, or use earphones at their desk when they need to concentrate,
making it much more Àexible than most Japanese companies. It is encouraging to see the idea of not being constrained by preconceived notions—something those of us intechnical positions often hear—is gradually ¿nding its way into efforts to reform work styles at my own workplace.
Polymer Processing Technical Group 2, DIC Corporation

2

Sia-Er Tan

Expanding Career Opportunities for Women

In line with its commitment to promoting diversity, DIC implements a variety of initiatives to expand career opportunities for female employees. Having
established a full-scale program to support employees in balancing the demands of a career and childcare in 2007, since ¿scal year 2016 the Company
has pushed ahead with measures to transform the mindset of employees and its corporate culture, as well as to provide training designed to encourage
the drive and determination of female employees and broaden the range of jobs open to women.

TOPIC 1

Female Employees in Management Positions

Presentation Is Held on Results of Projects Implemented as Part of Program to
Foster Female Leaders
In July 2018, a presentation was held at DIC’s corporate headquarters in Tokyo on the results of projects implemented
as part of the ¿rst session of DIC’s Woman Leader Development Program (W-LDP). During this session, which lasted six
months, a total of 25 female employees selected from various departments participated in project-style training, allowing
them to identify key issues facing future female executives in regard to challenges such as reforming work styles,transforming DIC’s corporate culture and nurturing young employees, and proposing solutions to the General Affairs and
HR Department.

TOPIC 2As of January 1, 20195.1％

As of January 1, 2021 (Target)

8.0％

DIC Earns First Selection as Nadeshiko Brand for Fiscal Year 2018
In recognition of its superb achievements in expanding career opportunities for women, DIC was selected as a Nadeshiko
Brand for ¿scal year 2018, the ¿rst time it has honored under this program, which is sponsored by Japan’s Ministry of the
Economy, Trade and Industry (METI) and the Tokyo Stock Exchange (TSE). DIC has positioned expanding opportunities
for its female employees as the ¿rst step in its drive to promote diversity and in ¿scal year 2018 implemented a variety ofimportant initiatives, including career-building support seminars attended by female employees and their superiors, andmanagement panel discussions on the theme of diversity. Reasons cited for DIC’s selection included these initiatives, aswell as its efforts to create work environments that are conducive to job satisfaction, including the introduction of Àextime andtelecommuting systems and instituting mandatory “no overtime days.”| Work Style Reform Initiatives that Support a Healthy Work–Life Balance
DIC views a healthy work–life balance as essential to both self-realization and sustainable corporate growth. Accordingly, from the standpoint of corporate
health management*, the Company continues to expand systems intended to facilitate such a balance. In line with its belief that positive workplaces leadto higher productivity, the Company is committed to supporting the efforts of employees to enjoy diverse lifestyles and realize both a satisfying work life
and a ful¿lling life outside work.
* Corporate health management is an approach that emphasizes employee health from a corporate management perspective and the implementation of related strategic measures.

1

Programs that Help Employees Balance the Demands of Work and HomeIn 1986, DIC blazed a trail for chemicals manufacturers in Japan by implementing a childcare leave program. The Company established a program tosupport employees balancing the demands of a career and childcare in 2007 and has continued to promote measures that exceed legal requirements inthe years since to encourage its use. In ¿scal year 2008, DIC acquired the Kurumin Mark, which recognizes companies that promote initiatives designed toassist employees in raising children.

Major Expansion of the Flextime System
To facilitate flexible working styles, in fiscal year 2017 DIC resolved to significantly expand its flextime system and in April 2018 made the systemapplicable to all areas of operations other than production Àoors. The system makes it possible for employees to determine the time at which they end
their working day to the extent that it does not hinder business ef¿ciency, as well as to simultaneously make use of telecommuting, with the goal ofpromoting the independent execution of duties and enhancing self-management capabilities.

DIC Report 2019 ̲48

Promoting Telecommuting

DIC Rates 3.5 Stars in the Second Nikkei Smart Work Survey

In January 2018, DIC launched the DIC Telecommuting System, which enables
employees to work at home or another remote location using ICT and which isavailable to all employees at all sites in Japan. As of December 2018, 500 employees
had registered to use the new system.
By creating systems that make it possible for each employee to choose a work stylethat suits the type of work he or she does, as well as his or her personal needs, DIC
will continue working to help employees achieve a healthy work–life balance. The
Company will also continue to promote the independent and autonomous executionof duties to reinforce employees’ self-management capabilities, thereby accelerating
efforts to galvanize employees and encouraging them to give full play to their creativity.

In ¿scal year 2018, DIC earned a 3.5-star rating in the Second Nikkei
Smart Work Survey, conducted in connection with the Nikkei Smart
Work Project, an initiative by Nikkei Inc. DIC’s rating of 3.5 stars, up
from 3 stars the previous ¿scal year, was underpinned by high marks
given its implementation and use of technology, notably its adoption oftools to encourage global information sharing, and its actions to help
realize diverse and flexible work styles, such as the introduction of atelecommuting system.

Use of the Childcare Leave and Leave to Assist with Parenting Programs
Thanks to the introduction of various programs to help employees in balancing the demands of work and home and the creation of an environment thatencourages employees to take advantage of such thereof, the percentage of DIC employees who return to work after making use of the Childcare Leave
Program is currently 100%. In addition, the number of individuals using the Leave to Assist with Parenting Program, which enables male employees totake time off in the weeks after the birth of a child to assist their partner, has risen.
Thanks to efforts to enhance these systems, the average years of employment for female employees has increased and continues to exceed theaverage for male employees.
Fiscal year 2014

Fiscal year 2015

Fiscal year 2016

Fiscal year 2017

Fiscal year 2018

Number of employees using the Childcare Leave Program

28

29

35

35

21

Number of employees using the Leave to Assist with Parenting Program

63

64

62

77

81

2

Reducing Extreme Overwork and Encouraging Employees to Take Annual Paid Leave

DIC has deployed an electronic system to manage on-site hours, working hours and approved overtime hours. As a measure to prevent extreme overtime, if an
employee exceeds the agreed-upon overtime limit (80 hours/month), his or her supervisor and the senior executive in charge are automatically noti¿ed so thatsteps can be taken to ameliorate the situation. In addition, the Company has instituted mandatory Groupwide “no overtime days.” DIC also encourages employees
to take annual paid leave, notably by recommending leave timing at each business site and having employees plan dates for such leave.

| Human Resources Infrastructure Reform
In January 2018, DIC and DIC Graphics uni¿ed quali¿cation standards for its management-level (i.e., manager and above) employees, replacing traditional abilitybased standards with role-based standards. As a consequence, consistent duty- and role-based standards are now used for the majority of such employees in
the Americas, Europe, the Asia–Paci¿c region, the PRC and Japan. In addition, evaluation systems for Group company executives in Japan and overseas havebeen integrated to reinforce Groupwide management. Under DIC111, DIC will advance efforts to consolidate employee quali¿cation systems worldwide, unify
quali¿cation standards and evaluation formats for management-level employees, and construct a global human resources platform.

| Ensuring Fair and Consistent Treatment
DIC has consolidated its numerous employee qualification systems irrespective of job classification and educational credentials. Promotions are
determined through screening tests based on objective criteria, guaranteeing equal opportunities for promotion to all motivated, capable employees.
Remuneration and personnel evaluation systems are designed to ensure that individual employees’ abilities and achievements are assessed appropriately
and reÀected in a timely manner. The Company has also introduced management by objectives (MBO)—a goal-setting management tool that promotes
both corporate growth and employee development—into its personnel evaluation system. The results of individual evaluations, including reasoning behinddeterminations, are fed back in full to employees, in a transparent process that ensures employees are largely satis¿ed with outcomes.

TOPIC 3
DIC Earns ´White 500µ CertiÀcation in the Health & Productivity Outstanding Entities Recognition Program
DIC earned certi¿cation in the large enterprise category (dubbed the “White 500”) of the 2018 and 2019 Health& Productivity Outstanding Entities Recognition Program, which is organized by METI and Nippon Kenko
Kaigi*1. This program assesses performance based on multiple criteria, including grasp of employee healthrelated issues and consideration of actions, establishment of a foundation for the practical implementation ofhealth and productivity management measures, and work engagement*2. DIC received scores significantly
above the industry average for all criteria, ¿nishing in the top 20% with a ¿ve-star rating.
*1 Nippon Kenko Kaigi (“Japan Health Council”) is an organization that liaises with private companies, with the full backup of the national government, to put effective measures in place to prolong thehealthy life expectancy of citizens and to ensure sound medical services in Japan.
*2 A concept used to measure employees’ mental health, work engagement is described as a positive, ful¿lling work-related state of mind that is characterized by vigor, dedication and absorption. “Vigor”
is taking pride and experiencing a sense of satisfaction in one’s work, “dedication” is feeling strongly involved in and focused on one’s work, and “absorption” is being actively engrossed in one’s work.

49̲ DIC Report 2019

Sustainable Procurement

SDGs Goal 12
QR codePromoting Socially Responsible Procurement Across the Supply Chain
WEB

http://www.dic-global.com/en/csr/stakeholder/partner.html

The DIC Group CSR Procurement Guidelines❶ Compliance with laws and social norms❷ Respect for human rights and consideration forwork environments❸ Safety and hygiene❹ Promotion of sound business management❺ Consideration for the environment❻ Information security❼ Appropriate quality and safety and improved technologies❽ Flexible attitude to ensure stable supplies and respondto change❾ Contribution to local communities and society❿ Promoting CSR and deploying it in the supply chain| Encouraging CSR Procurement
Based on the DIC Group Universal Purchasing Policy, and incorporating requirements contained in guidebooks put out by external organizations including the Japan Electronics andInformation Technology Industries Association (JEITA), DIC formulated the DIC Group CSR Procurement Guidelines, a series of requirements pertaining to ESG-related imperatives,
including the management of chemical substances in and reduction of the environmental impact of raw materials, as well as respect for human rights across its entire supply chain.
With the aim of compelling suppliers to observe these guidelines, the DIC Group conducts assessments and on-site inquiries in accordance with the DIC Group Supply-chain CSR
Deployment Guidebook. (Version 2 of the guidebook was published in July 2013.) Such measures have proven effective in strengthening the Group’s relations with suppliers. The
Group also has a mechanism in place for taking the results of CSR procurement assessments into account when selecting new suppliers.

| The DIC Group Green Procurement Guidelines
In line with the DIC Group Universal Purchasing Policy, DIC formulated the DIC Group Green Procurement Guidelines, which prohibit the procurement of materials containing hazardous
substances in seven categories*1. The guidelines mandate the submission of a DIC Raw Materials Survey, an SDS and a chemSHERPA*2, as well as a DIC Group Green Procurement
Guidelines Survey, when purchasing raw materials, thereby creating a system for eliminating substances of concern. Submission of a ConÀict Minerals Survey is also required.
*1 (1) Substances the production of which is prohibited, as outlined in Article 55 of Japan’s Industrial Health and Safety Act; (2) Substances designated as class 1 speci¿ed chemical substances
in Japan’s Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc.; (3) Substances designated for monitoring under Japan’s Act on the Evaluation ofChemical Substances and Regulation of Their Manufacture, etc.; (4) Chemical substances the production of which is already prohibited, as detailed in Japan’s Act on the Protection of
the Ozone Layer Through the Control of Speci¿ed Substances and Other Measures (ozone-depleting substances listed in the Montreal Protocol); (5) Speci¿ed particulates denoted inJapan’s Air Pollution Control Act; (6) Speci¿ed poisonous substances indicated in Japan’s Poisonous and Deleterious Substances Control Act; and (7) Speci¿ed substances detailed in the
Stockholm Convention on Persistent Organic Pollutants.
*2 chemSHERPA is a scheme designed to facilitate the accurate and ef¿cient sharing of information on chemical substances in products across the entire supply chain. DIC began using
chemSHERPA in late ¿scal year 2017.

| Analyzing the Results of Questionnaires
In fiscal year 2018, the DIC Group conducted assessments for 24 new and continuing suppliers using version 2 of the DIC Group Supplychain CSR Deployment Guidebook. This brought the total number of suppliers assessed between November 2013 and December 2018 to 753,
accounting for 90%-plus of its procurement spending. In addition to analyzing and assessing questionnaire
Cumulative Number ofSuppliers Assessed
responses, the Group provided feedback to all 753 suppliers and where necessary requested corrective(November 2013–December 2018)measures for signi¿cant issues through on-site inquiries or written comments. In ¿scal year 2019, the Groupplans to update the DIC Group Supply-chain CSR Deployment Guidebook.
Equivalent to 90%-plus ofprocurement spending| Conducting On-Site Inquiries

753

Feedback sheet

From ¿scal year 2011 through ¿scal year 2018, the DIC Group conducted on-site inquiries for 81 suppliers. The objective of these inquiries is to help suppliers further theirunderstanding of CSR. In an on-site inquiry, the Group and the supplier con¿rm the responses provided by the supplier in the assessment questionnaire. Other efforts
include introducing examples of Group initiatives designed to advance CSR procurement and realize sustainability.

VOICE We are pursuing continuous improvements with the aim of ensuring sustainable procurement.
I have worked in the Purchasing Department of Siam Chemical Industry for roughly 24 years.
Today, companies worldwide face an ever-more diverse array of challenges, including rising awareness of the need to achieve sustainability. The role of Siam
Chemical Industry’s Purchasing Department has been changed so as to move forward activities with an accurate understanding of social requirements based on the DIC
Group’s basic sustainability policy, which emphasizes CSR. Accordingly, the department now has the added responsibility of reducing social and environmental impacts
through cooperation with partners and customers across our supply chain. The department will work diligently in this regard, and will also convey information in a timely
manner as stakeholders today are as interested in environmental and social governance as they are in quality, cost and delivery (QCD).
Siam Chemical Industry was awarded a silver medal for its CSR performance by EcoVadis on February, 2019. We hope to eventually earn a gold medal bystrengthening our supply chain through ongoing improvement activities, rather than being satis¿ed with where we are now. This will not be easy. As the requirements ofcustomers and society change constantly, it is necessary to realize sustainable procurement corresponding to that change.
I will continue to learn more about sustainable procurement and will work to further promote the exchange of information with both suppliers and the DIC Group, thereby
increasing understanding as well as support to ensure we meet our goals. I would also like to see the DIC Group as a whole realize more advanced sustainable procurement.
Purchasing Department, Siam Chemical Industry Co., Ltd.

Wantanee Prodpran

DIC Report 2019 ̲50

Business Models that Respond to Social Imperatives

SDGs Goals 8, 9 and 11
QR codeCultivating Next-Generation BusinessesWEB

http://www.dic-global.com/en/csr/stakeholder/customer.html| New Pillar Creation: Promoting New Businesses that Respond Accurately to the Changing Needs of Society
The DIC Group sees one of its key missions as being to achieve sustainable growth both for itself and society by helping to address social imperatives
related to climate change, the digitization of society, urbanization and longevity by identifying key business domains and providing products that respondto such imperatives.
With the goal of swiftly realizing this mission, DIC has outlined two basic business development strategies in its new medium-term management plan,
DIC111: “Value Transformation” and “New Pillar Creation.” In line with the strategy of Value Transformation, the Group will advance qualitative reforms
in existing core businesses by shifting to businesses with differentiated high-value-added products and with more of a focus on social value. New
Pillar Creation emphasizes creating new businesses by identifying areas where ESH-related issues and social changes intersect with the DIC Group’s
competencies. This strategy continues to guide a number of key initiatives, several of which are described below.

| Examples of New Pillar Creation
1

Leveraging Compounding Technologies to Develop Heat Management Materials: Contributing to Peace of Mind andComfort in the Electronics Field

While demand for ever-smaller and faster digital equipment continues to make lives more convenient, heat
management is increasingly critical to ensure the safety of such devices. DIC is promoting the developmentof thermally conductive fillers that quickly diffuse and dissipate heat by applying a proprietary technology that
simpli¿es the synthesis of inorganic oxide single crystals, to improve the crystallinity of inorganic ¿llers, as well as
to control their shape and size. When used in molded plastic items, the characteristic shape and high crystallinityof particles in these innovative ¿llers is expected to exhibit the high thermal conductivity inherent in crystals, further
enhancing mechanical properties.
Newly developed specialized thermallyconductive ¿llers

2

Applying Composite Technologies to the Development of Environmental Sensors: Using Digital Transformation toCreate Comfortable Environments

Smart buildings, which make use of technologies that optimize office buildings’ use of electric power, thereby contributing to decarbonization, andwell buildings, which leverage technologies that improve the comfort and health of people are crucial to urban sustainability. DIC recently developed asensor for detecting internal temperature, humidity and light intensity in commercial complexes, of¿ce buildings and other facilities and in fall 2018 beganveri¿cation testing in collaboration with several other companies. Using DIC Group composite technologies enabled DIC to realize a groundbreaking
wireless environmental sensor with a casing that is thin (5.0 mm), light (20 g), soft and Àexible, making it easy to install and remove in any location. ThisÀexible casing was made possible by the use of SunTronic TM conductive inks to print circuits on sensor substrates.
The use of DIC’s DAITAC ® removable adhesive tape for mounting the sensor facilitates installation and removal
simply by sticking on and peeling off.
Going forward, the DIC Group aims to supply sensors not only as independent products but also as part ofcomprehensive packages that also include other necessary equipment and services, thereby reinforcing its ability
Flexible printed substrate of DIC’s new
to provide solutions that help respond to social imperatives.
wireless environmental sensor

3

TrinDy Compounds for 3D Printers: Combining Technologies to Bolster EfÀciency and Convenience in the Healthcare Field

With the number of elderly patients needing dental treatment rising, a shortage of dental technicians who construct custom-made dental prosthesis has
become a critical concern. One focus of efforts to address this issue has been to improve the ef¿ciency of processes used in prosthesis construction,
which has led to the increasing popularity of prosthesis created using 3D printing.
Because 3D printers can faithfully transform scanned data into 3D shapes, they are used widely in areas where
high-precision molding is required. Combining its proprietary polymer and compounding technologies, DIC
succeeded in developing TrinDy™, a series of compounds for stereolithography—a form of 3D printing that cureswith UV light—that achieve improved molding precision and strength. DIC is currently expanding its lineup to include
products for implant surgical guides and dental impressions, among others, and is preparing to apply for approval
under ISO 13485, the International Organization for Standardization’s standard for quality management systems in
the area of medical devices, in line with its goal of providing products that respond effectively to structural changes
3D-printed dental prosthesis made with TrinDy™
in society attributable to digitization.

51̲ DIC Report 2019

New Technology Development and Value Creation

SDGs Goals 9 and 12
QR codeProposing Solutions that Leverage Elemental Technologies
WEB

http://www.dic-global.com/en/csr/technology_development.html| Achieving Sustainable GrowthWith the aim of achieving its Color & Comfort by Chemistry management vision, the DIC Group is leveraging its basic technologies, including those in the areas of optics
and color, organic molecular design, polymer design and dispersion, as well as its core technologies in such areas as synthesis, compounding and formulation, and surface
treatment, to develop high-value-added products that contribute to a sustainable society. The Group is also building a portfolio of next-generation products and newtechnologies by integrating technological resources originating across the Group, as well as actively promoting open innovation, to drive sustainable growth.

| SpeciÀc Initiatives and Achievements
The DIC Group is promoting the development and use of clean technologies. The Company is encouraging a shift toward materials with reduced environmental
impact—notably energy-saving, water-based and solvent-free materials, as well as materials for the electronics, automotive, packaging and other industries—that
improve the environmental performance of the products in which they are used, which it has positioned as environment-friendly products.

| Development of New Technologies, Products and Solutions to Support Business Portfolio Transformation
Segment
Value
Transformation

Core Technologies
Polymer synthesis

Organic
molecular
designColoring
Opticsand color

Adhesion
Molding

Resin curing
Polymer
designLiquid/liquid dispersion

Basic
Technologies

Dispersion

Applicability
assessment(Coating/printing/molding)

Film formation

Compounding formulation

Solid/liquid dispersion
Rheology

Composite
technology
×Open innovation
×Thorough use ofIT (AI, MI)

Surface treatment

Packaging &Graphic

Next-generation packaging inks and coatings,
functional packaging adhesives,
industrial-use jet inks, others

Color &
Display

Pigments for color filters, pigments for cosmetics,
effect pigments, natural colorants, LC materials,
next-generation display materials, others

Functional
Products

Sustainable polymers, environment-friendly PPS
compounds for automotive components,
high-performance industrial adhesive tapes, others

Business Area

New Pillar
Creation

Organic synthesis
Crystallization

Creating and Adding Depth to Basic Technologies
Development of sustainable technologies and high-performance materials

TargetTargetElectronics

Technologies and functional materials that support
the spread of digitization

Automotive

Technologies and functional materials that underpin
efforts to transform the automotive industry

Next-Generation
Packaging

Packaging materials that help reduce food loss
and support sustainability

Health Care

Microorganism and cell culture technologies
with applications extending from food safety toadvanced medical care

| Promoting Environment-Friendly Products
The DIC Group is committed to effective stewardship of the products it provides. Conscious always of the importance of ensuring its products are environment-friendly, DIC promotes the developmentof products and new technologies that are useful to society and works to increase the weighting of environment-friendly products in its portfolio, by reducing the volume of hazardous substances
it uses, focusing on products that are less hazardous and products that facilitate recycling, and realizing safer production processes that generate less waste and use less energy. The Group has
established internal rules for designating products “environment-friendly” and works to increase the weighting of products that have earned this designation in their portfolio. In ¿scal year 2018,environment-friendly products accounted for 57.0% of all products put out by DIC and subsidiary DIC Graphics. The Group also strives to maintain a solid grasp of laws and regulations in different
countries and territories, and of trends in environmental measures—thereby ensuring its ability to design products that comply with diverse regulations governing the use of chemical substances indifferent markets—and conducts environmental assessments on a continuous basis.

・Introducing the DIC Sustainability Index
To ensure that stakeholders understand the true worth of DIC Group products and solutions
that help address social imperatives, the Group introduced a proprietary sustainability index.
The Group aims to begin using the DIC Sustainability Index in ¿scal year 2020.

・Products that Contribute to the Realization of Clean Technologies
The DIC Group develops materials that contribute to the realization of clean
technologies designed to help resolve critical global environmental issues.

are promoting the development of waterborne polyurethane resins that will
VOICE We
contribute to the realization of the SDGs.
Amid rising environmental concerns, including climate change, and increasingly urgent social imperatives, companies today face an ever-more diverse arrayof challenges. DIC is working to develop products that take into account the global environment, ecosystems, socioeconomic systems and other factors,
with the aim of contributing to sustainability. Our group focuses on polyurethane resins that impart both texture and durability to solvent-based arti¿cial andsynthetic leathers used in automotive interiors, furniture and clothing, which DIC supplies to customers around the world. We are also contributing to thecircular economy by developing production processes that achieve signi¿cantly improved ef¿ciency and adopting bio-derived raw materials.
Assistant Manager, Polymer Technical Group 6, Polymer Technical Division 2, DIC Corporation

Tomohiro Tetsui

DIC Report 2019 ̲52

Harmony with the Community and Social Contributions

SDGs

Goals 3 and 4
QR codeAdding Color & Comfort to LifestyleWEB

http://www.dic-global.com/en/csr/society/

Visiting Science Lab Program
In line with the Japanese government’s efforts to promote career education initiatives, as well as to help curb a decline
in the popularity of science among children, DIC and DIC Graphics conduct visiting science labs at public elementary
schools. Since launching this initiative in 2010, the companies have provided classes to approximately 3,000 sixth
graders at 38 elementary schools.
In ¿scal year 2018, DIC and DIC Graphics conducted visiting science labs as part of the Tohoku University Graduate
School of Engineering’s Science Campus project, at Tokyo University of the Arts and at DIC Family Day, an event held
for the families of employees. In ¿scal year 2018, this program won silver in the 2018 Education Support Grand Prix,sponsored by Tokyo-based Leave a Nest Co., Ltd. DIC pledges to continue offering this program in the years ahead.

Visiting science lab

As part of the Graduate School of Chemical Engineering, this is what I see as the importance ofComment social contribution initiatives for children by B-to-B companies.

In primary school science education, we believe it is important to create an environment that brings out and broadens children s interests. However, intoday’s information-intensive world people tend to be primarily interested in products and advertisements around them. I am on staff at the Graduate
School of Chemical Engineering, but the students I teach seem to want to ¿nd jobs at companies that manufacture the ¿nal product they see aroundthem—a sentiment shared by their parents. There are many B-to-B companies in areas such as materials and intermediate products manufacturing
where students who have studied materials science can exercise their capabilities, but it can be dif¿cult to understand what such companies do.
I see the Tohoku University Science Campus project as important for children because it helps communicate the importance of B-to-B companies to parents who participate
with their children. This year’s project once again con¿rmed this belief. It is my hope that DIC will continue to implement educational initiatives that encourage children’s interest inscience and contribute to the future of science and technology in Japan by ensuring the well-balanced allocation of human resources.
Director, Center for Creative Engineering; Professor, Graduate School of Engineering, Tohoku University

Hideyuki Aoki

Initiatives Led by the Central Research Laboratories
The Central Research Laboratories offer a variety of programs in such uniquely DIC topics as synthesis and chromatics to the students of local schools. In
January 2018, students from Chiba Prefectural Sakura High School—a Super Science High School*—were given the opportunity to take part in a visiting lab
lesson conducted by staff of the Central Research Laboratories on the theme of the role of intellectual property rights in corporate management. In August
2018, an experiment in pigment synthesis using Spirulina was conducted as part of a visiting lab lesson for primary school children in Chiba Prefecture as partof the Chiba Prefectural Education Agency’s Dream Challenge Hands-On School. In addition to experiments, time was allocated for the young employees who
served as instructors to talk about how they became interested in science and the challenges and rewards of research. At the same time as it helps children
enjoy science, this program thus enables young employees to contribute to career education.
*A designation awarded by Japan’s Ministry of Education, Culture, Sports, Science and Technology (ME;T) to senior high schools that implement curricula focused on the sciences and mathematics that goes beyond theMinistry’s of¿cial guidelines with the aim of fostering the next generation of talented engineers and scientists.

Kawamura Memorial DIC Museum of Art
The Kawamura Memorial DIC Museum of Art, located adjacent to the Central Research Laboratories in Sakura, Chiba Prefecture, was established in 1990
to publicly exhibit works of art collected by DIC Corporation and its af¿liates. In 2019, the museum is celebrating its 30th anniversary. As of December 2018,
cumulative visitors to the museum had surpassed 2.45 million. DIC views operation of the museum, which assumed its current name in 2011, as a social
contribution initiative that the DIC Group is uniquely positioned to undertake as an organization intrinsically involved in color.
The museum’s extensive collection spans numerous genres, encompassing works by Rembrandt; Impressionists such as Monet and Renoir; modern European
artists such as Picasso and Chagall; early modern, modern and postwar Japanese artists; and luminaries of late-20 century American art, including Mark
Rothko, Cy Twombly and Frank Stella. In addition to a standing exhibit from its permanent collection of more than 1,000 major works, the museum stages special
exhibitions several times a year that focus on pertinent literary works and other artifacts that evoke the cultural atmosphere at the time works were created tohelp visitors better understand the collection. Another appealing aspect of the museum is its location on a lushly forested
10-hectare site alive with seasonal Àowers and foliage that has been open to the public since the museum’s establishment.
In a move aimed at promoting relations with the local community and fostering local cultural activities, the Kawamura
Memorial DIC Museum of Art has established an annex gallery on the museum site that serves as an exhibition space for
local amateur artists and is also made available to elementary and junior and senior high schools in the Sakura area for an
exhibition of local students’ works.
Kawamura Memorial DIC Museum of Art

Matching Gift Program
DIC has a matching gift program whereby it matches the total amount collected through an annual year-end fundraising drive spearheaded by its employees’ union.
Funds raised through the 2018 drive and matching gift program were donated to 21 children’s homes and facilities providing support for disabled individuals.

53̲ DIC Report 2019Communication with Stakeholders

SDGs Goal 17
QR codePromoting Disclosure and CommunicationWEB

http://www.dic-global.com/en/csr/stakeholder/

The DIC Group places a priority on communication with its stakeholders worldwide, as outlined in Article 7 of its Policy on
Corporate Governance.

Article 7 (Ensuring Appropriate Information Disclosure and Transparency)
The Company shall ensure transparency and fairness; and in order to gain the correct understanding and trust fromstakeholders, shall timely and appropriately disclose information relating to matters such as the DIC Group’s management
philosophy, management policies, business plans, financial condition and sustainability activities.

Ties withshareholders
and investors

Ties withbusiness
partners

Build trusting relationships. By
incorporating the demands ofcustomers, seek to develop
products that enhancecustomer satisfaction.

Ensure appropriate
disclosure and build
trusting relationships
with shareholders andinvestors, encouraging
both to evaluate DIC as an
attractive investment.

● Websites● Product pamphlets● Digital marketing● Corporate profile DVDs
● DIC Report● Corporate PR film
● News releases● Television advertisements● Websites● Press conferences● Quarterly results

Ties with customers

Basic approach

Communications
tools

announcements●Yuka Shoken Hokokusho(¿nancial disclosure document requiredof listed companies in Japan)● Timely disclosure● Notice of Convocation of
the Annual General Meetingof Shareholders● Shareholder newsletters● Corporate pro¿le DVDs

Ties with society

Ties with employees

Ties with the media

Promote socially responsible
procurement across the
supply chain and build solid
relationships that will facilitatesustainable procurement.

Operate in harmony withthe community and build
positive relationships
with local residents thatwill underpin the longterm sustainability ofoperations.

Provide workplaces thatare conducive to job
satisfaction and enable all
employees to fulfill theirpotential. Over the longterm, achieve true diversity.

Deepen mutual
understanding throughe f f e c t i v e p u b l i c i t y,
advertising and othercommunications efforts.

● DIC Group CSR Procurement● Websites● Site reports● Corporate pro¿le DVDs
● DIC Report● News releases● Television advertisements● DIC Plaza● Press conferences● Interviews with

● Production facility tours● Participation in projects involving● Labor–management councils● Results presentations

Guidelines● DIC Group Green Procurement
Guidelines● Supplier CSR self-evaluationquestionnaires● Feedback sheets● ConÀict Minerals Reporting
Template(in-house newsletter)● Intranet● DIC Pocket Book
(in-house Group data ¿le)
● DIC Report● Corporate PR film
● News releases● Television
advertisements● Global linkage● Branding questionnaire

journalists● DIC Report● News releases● Television

advertisements● DIC Report● News releases● Television advertisements● Sales activities● Participation in

Opportunities forcommunication

exhibitions

Ties with
Customers● General shareholders’meetings● On-site inquiries● Results presentations● IR conferences● IR meetings● DIC IR Day

collaboration among industrial
concerns, government bodies andacademic institutions● Participation in community events● Environmental monitoringfor employees● Presentations on the DIC Group
Code of Business Conduct● Sustainability presentations● DIC Family Day● Plant tours for employee families

Ties withSociety● Newspapers● Economic publications● Industry publications

Ties with theMedia

Press conferences heldin Àscal year 2018

82
Interviews with journalistsin Àscal year 2018

CITE JapanTokyo Pack

Ties with
Shareholders
and Investors

Results presentation (February 2019)

Dream Challenge Hands-On School(Chiba Prefecture)

110th anniversary celebration

92

Ties with
Employees

DIC IR Day

Results presentation for employees(February 2019)

DIC Family Day

DIC Plaza(in-house newsletter)

DIC Report 2019 ̲54

Financial Report for Fiscal Year 2018
| Analysis of Results of Operations
Overview of Operating Results
Economic conditions worldwide recovered gradually in the fiscal year ended December 31, 2018, although signs of
weakness were seen in certain areas. Moderate recovery persisted in North America and Europe. In Asia, economic
conditions picked up slowly in Southeast Asia and India, despite slowing in the PRC. Japan’s economy rallied steadily.
In this environment, consolidated net sales increased 2.0%, to ¥805.5 billion, reflecting multiple factors, including therevision of sales prices and firm shipments. Operating income declined 14.3%, to ¥48.4 billion, hampered by rising raw
materials prices, higher distribution costs and the depreciation of currencies in European emerging economies, among others.
Ordinary income was down 14.5%, to ¥48.7 billion, with causes including lower operating income. Net income attributable toowners of the parent fell 17.0%, to ¥32.0 billion. Reasons behind this result included the decrease in ordinary income.

(Billions of yen)

FY2017FY2018Change(%)

Net sales

789.4

805.5

2.0%

3.3%

Operating income

56.5

48.4

-14.3%-11.4%

Ordinary income

57.0

48.7

-14.5%-Net income attributableto owners of the parent

38.6

32.0

-17.0%-

Average exchange rate (¥/US$1.00)

112.33110.46

Average exchange rate (¥/EUR1.00)

127.03130.46

Local currency basis (%)

Segment Results(Billions of yen)

Net sales

Operating income (loss)

Local currency
basis (%)

FY2017FY2018Change
(%)

1.8%

4.6%

17.4

13.8

-21.0%-10.8%

132.3

-2.3%

-1.8%

17.4

16.4

-5.5%

-5.9%

197.9

205.8

4.0%

3.8%

19.6

17.5

-10.6%-10.7%

Compounds

64.7

65.2

0.8%

0.9%

5.0

3.2

-35.4%-35.7%

Application Materials

56.1

58.5

4.3%

4.1%

2.6

3.2

23.0%

22.4%

Others, Corporate and eliminations(38.4)(36.9)

-

-

(5.5)

(5.7)

-

-

Total

789.4

805.5

2.0%

3.3%

56.5

48.4

-14.3%-11.4%FY2017FY2018Change(%)

Printing Inks

373.7

380.6

Fine Chemicals

135.4

Polymers

Local currency
basis (%)

Segment results in key markets are as follows. Year-on-year percentage changes in squared parentheses represent
increases or decreases on a local currency basis. Interregional transactions within the Printing Inks segment are included.
Accordingly, the aggregates of regional net sales and operating income figures for the Printing Inks segment differ from thefigures presented above.

55̲ DIC Report 2019

Printing Inks
■ JapanNet sales¥74.4 billion

Change-3.6%

Operating income¥1.8 billion

Change-53.4%

Sales in Japan declined, a consequence of diminished demand for publishing inks, among others.
Operating income fell sharply, owing to the aforementioned sales results, as well as to rising raw materials prices, higher distribution costs and other factors.
■ The Americas and Europe

Net sales¥247.2 billion

Change2.5%[6.1%]¥8.8 billion

Change-7.7%[9.3%]

Operating income

Although sales of packaging inks rose, sales in North America edged down, owing to waning demand for publishing inks and news inks. In Europe, sales increased,boosted by brisk shipments of packaging inks. Sales in Central and South America were up in all product categories. As a result, overall sales in the Americas andEurope advanced, underpinned by an increase in sales of packaging inks, among others.
'HVSLWHULVLQJLQORFDOFXUUHQF\WHUPVUHÀHFWLQJWKHDIRUHPHQWLRQHGVDOHVUHVXOWVDQGH[SDQGHGVDOHVRIVHFXULW\LQNVRSHUDWLQJLQFRPHZDVGRZQDIWHUWUDQVODWLRQ
owing to the depreciation of currencies in emerging economies, including the Turkish lira.
■ Asia and Oceania

Net sales¥67.6 billion

Change4.3%[7.1%]

Operating income¥3.2 billion

Change-19.8%[-18.6%]Higher shipments of packaging inks and publishing inks bolstered sales in the PRC and Southeast Asia. Sales in Oceania fell, with causes including fading demandfor publishing inks and news inks. Sales in India increased in all product categories. For these reasons, overall sales in Asia and Oceania advanced.
2SHUDWLQJLQFRPHGHFUHDVHGVLJQL¿FDQWO\UHJDUGOHVVRIWKHDIRUHPHQWLRQHGVDOHVUHVXOWVDFRQVHTXHQFHRIULVLQJUDZPDWHULDOVSULFHVDQGRWKHUIDFWRUVFine Chemicals
Net sales¥132.3 billion

Change-2.3%[ -1.8%]Operating income¥16.4 billion

Change-5.5%[-5.9%]

6DOHVRISLJPHQWVZHUHGRZQGHVSLWHDQLQFUHDVHLQVKLSPHQWVRISLJPHQWVIRUFRORU¿OWHUVDQGHIIHFWSLJPHQWVDPRQJRWKHUV5HDVRQVEHKLQGWKLVUHVXOWLQFOXGHGDOXOOLQVKLSPHQWVRISLJPHQWVIRUFRVPHWLFVDQGÀDJJLQJGHPDQGIRURWKHUSLJPHQWV6DOHVRI7)7/&VIHOOZLWKUHDVRQVLQFOXGLQJIDOOLQJVDOHVSULFHVAs a consequence, segment sales declined.
Owing to the aforementioned sales results, as well as to the impact of environmental regulations in the PRC, segment operating income decreased.

Polymers
Net sales¥205.8 billion

Change4.0%[3.8%]

Operating income¥17.5 billion

Change-10.6%[-10.7%]

Sales of epoxy resins and other products for electronic and electrical equipment advanced both in Japan and overseas. In addition, the revision of sales prices
progressed. For these and other reasons, segment sales rose.
Segment operating income declined, notwithstanding the aforementioned sales results. Factors behind this result included the fact that efforts to revise sales
prices failed to keep up with rising raw materials prices.

Compounds
Net sales¥65.2 billion

Change0.8%[0.9%]

Operating income¥3.2 billion

Change-35.4%[-35.7%]

Shipments of PPS compounds and jet inks expanded steadily. Nonetheless, segment sales were up only slightly, owing to the scaling back of low-margin businesses
and other factors.
Segment operating income fell sharply. This was attributable to a one-time cost increase associated with the scaling back of low-margin businesses, as well as torising raw materials prices, among others.

Application Materials
Net sales¥58.5 billion

Change4.3%[4.1%]

Operating income¥3.2 billion

Change23.0%[22.4%]

6HJPHQWVDOHVLQFUHDVHGUHÀHFWLQJKLJKHUVKLSPHQWVRIKLJKYDOXHDGGHGSURGXFWVVXFKDVFRH[WUXGHGPXOWLOD\HU¿OPVDQGKROORZ¿EHUPHPEUDQHPRGXOHVDPRQJRWKHUV
Segment operating income rose substantially. Reasons behind this result included the aforementioned sales results.

DIC Report 2019 ̲56

|Consolidated Financial Statements
Consolidated Balance Sheet

As of December 31, 2017 and 2018

（Millions of yen）

2017

2018

AssetsCurrent assets
Cash and deposits

17,883

19,782

Notes and accounts receivable—trade226,968

209,763

0HUFKDQGLVHDQG¿QLVKHGJRRGV

90,01094,611Work in process

9,053

9,403

Raw materials and supplies

58,911

61,937

Deferred tax assets

9,574

8,891

Other

23,34023,878

Allowance for doubtful accounts(10,763)(9,722)424,976

418,543

261,221259,417

Accumulated depreciation(168,778)(170,525)

Buildings and structures, net

92,44388,892

Machinery, equipment and vehicles

409,362

403,877(338,808)(332,926)

70,55470,951

7RROVIXUQLWXUHDQG¿[WXUHV63,336

63,291

Accumulated depreciation(52,207)(51,896)

7RROVIXUQLWXUHDQG¿[WXUHVQHW

11,12911,395/DQG

50,30748,985Construction in progress

7,244

7,928

231,677

228,151

Goodwill

199

34

Software

3,837

2,887

Customer-related assets

874

3,359

Other

2,674

7,502

Total intangible assets

7,584

13,782

Investment securities

76,86767,523

Deferred tax assets

31,871

28,612

1HWGH¿QHGEHQH¿WDVVHW

33,40825,089Other

26,85823,947

Allowance for doubtful accounts(1,485)(161)

Total investments and other assets

167,519

145,010

Total non-current assets

406,780

386,943

831,756805,486

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

Accumulated depreciation
Machinery, equipment and vehicles, net

Total property, plant and equipment
Intangible assets

Investments and other assets

Total assets

57̲ DIC Report 2019

Consolidated Balance Sheet（Millions of yen）

2017

2018

Liabilities
Current liabilities
Notes and accounts payable—trade117,199

118,554

Short-term loans payable

61,38529,986

Current portion of long-term loans payable

27,677

49,792/HDVHREOLJDWLRQV

557

667

Income taxes payable

4,793

2,843

Deferred tax liabilities

399

325

Provision for bonuses

7,071

6,283

Other

47,50947,476

Total current liabilities

266,590

255,926

Bonds payable

50,00060,000/RQJWHUPORDQVSD\DEOH

122,017

119,791/HDVHREOLJDWLRQV

4,045

4,229

Deferred tax liabilities

11,653

6,672

1HWGH¿QHGEHQH¿WOLDELOLW\

22,774

20,519Asset retirement obligations

1,329

1,482

Other

9,397

9,533

221,215

222,226

487,805

478,152

Capital stock

96,55796,557

Capital surplus

94,44594,445Retained earnings

186,768

207,421

Treasury shares(1,828)(1,823)

Total shareholders' equity

375,942396,600

7,874

1,407

( 3)

14

Foreign currency translation adjustment(46,462)(67,617)5HPHDVXUHPHQWVRIGH¿QHGEHQH¿WSODQV(22,222)(31,508)

Total accumulated other comprehensive income(60,813)(97,704)

Non-controlling interests

28,82228,438

Total net assets

343,951

327,334

831,756805,486

Non-current liabilities

Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Total liabilities and net assets

DIC Report 2019 ̲58

Consolidated Statement of Income

Years ended December 31, 2017 and 2018
（Millions of yen）

2017
Net sales
Cost of sales*URVVSUR¿W
Selling, general and administrative expenses
Freightage and packing expenses
Employees' salaries and allowances
Provision of allowance for doubtful accounts
Provision for bonuses
5HWLUHPHQWEHQH¿WH[SHQVHVResearch and development costs
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income(TXLW\LQHDUQLQJVRIDI¿OLDWHV
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities*DLQRQVDOHVRIVXEVLGLDULHVDQGDI¿OLDWHVVHFXULWLHVGain on sales of non-current assets
Insurance income
Gain on change in equity
Total extraordinary income
Extraordinary loss
/RVVRQGLVSRVDORIQRQFXUUHQWDVVHWV
Severance costs/RVVRQGLVDVWHU
Early termination fee
Impairment loss
Total extraordinary loss
Income before income taxes and non-controlling interests
Income taxes—current
Income taxes—deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

Consolidated Statement of Comprehensive Income

2018789,427
605,809
183,618

805,498
629,850
175,648

12,59641,857
330
2,760
959
12,42756,206
127,135
56,483

13,23042,660669
2,423
33
12,92355,325
127,263
48,385

1,817
447
4,069
2,019
8,352

3,781
425
3,845
1,631
9,682

3,565
1,456
2,854
7,875
56,960

5,114
828
3,423
9,365
48,702

−
315
1,156
−
641
2,112

3,270
679
431
237
−
4,617

2,682
951
−
376
234
4,243
54,82910,517
3,388
13,90540,9242,321
38,603

2,535
1,539
409
−
−
4,483
48,836
11,015
4,019
15,03433,802
1,774
32,028Years ended December 31, 2017 and 2018
（Millions of yen）

2018

2017
Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
5HPHDVXUHPHQWVRIGH¿QHGEHQH¿WSODQVQHWRIWD[
Share of other comprehensive income of associates accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests

59̲ DIC Report 201940,92433,802

2,590
183
979
4,718
1,563
10,03350,957(6,502)

48,2342,723

17(20,203)(9,413)(1,545)(37,646)(3,844)(4,863)
1,019

Consolidated Statement of Changes in Net Assets Years ended December 31, 2017 and 2018
（Millions of yen）

Shareholders’ equity
Capital stock

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity96,557

94,094

159,541(1,213)348,979

Balance at January 1, 2017
Dividends from surplus(11,376)(11,376)

Net income attributable to owners of the parent

38,60338,603(615)

Purchase of treasury shares
Change in ownership interest due to transactions with
non-controlling interests

(615)

351

351

Net changes of items other than shareholders’ equity
Balance at December 31, 2017

96,557

94,445(1,828)

186,768

375,942Dividends from surplus(11,375)(11,375)

Net income attributable to owners of the parent

32,02832,028Purchase of treasury shares

(10)

(10)

Disposal of treasury shares

15

15(1,823)396,600

Net changes of items other than shareholders’ equity
Balance at December 31, 2018

96,557

94,445

207,421（Millions of yen）

Accumulated other comprehensive income

Balance at January 1, 2017

Valuation difference
on available-for-salesecurities

Deferred gains orlosses on hedges

Foreign currencytranslation
adjustment

Remeasurements
RIGHÀQHG
EHQHÀWSODQV

Total accumulated
other comprehensive
income

5,248

(187)

(48,626)(26,879)(70,444)

Non-controllinginterests

28,482Total
net assets

307,017

Dividends from surplus(11,376)

Net income attributable to owners of the parent

38,603Purchase of treasury shares(615)

Change in treasury shares of parent arising from351

transactions with non-controlling shareholders
Net changes of items other than shareholders’ equity
Balance at December 31, 2017

2,626

184

2,164

4,657

9,631

340

9,971

7,874

(3)

(46,462)(22,222)(60,813)28,822

343,951

Dividends from surplus(11,375)

Net income attributable to owners of the parent

32,028Purchase of treasury shares(10)

Disposal of treasury shares

15

Net changes of items other than shareholders’ equity
Balance at December 31, 2018

(6,467)

17(21,155)(9,286)(36,891)(384)(37,275)

1,407

14

(67,617)(31,508)(97,704)

28,438327,334

DIC Report 2019 ̲60

Consolidated Statement of Cash Flows Years ended December 31, 2017 and 2018
（Millions of yen）

2017
Net cash provided by (used in) operating activities
Income before income taxes and non-controlling interests
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Interest and dividends income(TXLW\LQ HDUQLQJV ORVVHVRIDI¿OLDWHVInterest expenses/RVV JDLQ RQVDOHVDQGUHWLUHPHQWRIQRQFXUUHQWDVVHWV
Impairment loss
/RVV JDLQ RQVDOHVRIVXEVLGLDULHVDQGDI¿OLDWHVVHFXULWLHV/RVV JDLQ RQVDOHVRILQYHVWPHQWVHFXULWLHV
Decrease (increase) in notes and accounts receivable—trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable—trade
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of shares and investments in capital of subsidiaries resulting in change in scope of consolidation
Proceeds from shares and investments in capital of subsidiaries resulting in change in scope of consolidation
3XUFKDVHRIVXEVLGLDULHVDQGDI¿OLDWHVVHFXULWLHV
3URFHHGVIURPVDOHVRIVXEVLGLDULHVDQGDI¿OLDWHVVHFXULWLHV
Purchase of investment securities
Proceeds from sales and redemption of investment securities
Payments for transfer of business
Other, net
Net cash provided by (used in) investing activities
1HWFDVKSURYLGHGE\ XVHGLQ ¿QDQFLQJDFWLYLWLHVNet increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of bonds
Cash dividends paid
Cash dividends paid to non-controlling interests
Net decrease (increase) in treasury shares
Purchase of shares and investments in capital of subsidiaries that does not result in change in scope of consolidation
Other, net
1HWFDVKSURYLGHGE\ XVHGLQ ¿QDQFLQJDFWLYLWLHV
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period

61̲ DIC Report 20192018
54,82931,524345(720)
13(2,264)(4,069)
3,565
1,526
234
(315)

48,83632,825
156
(263)
(782)
(4,206)(3,845)
5,114
2,104
−
(679)
(3,270)−(7,070)(9,742)

6,897(14,516)

9,328(11,246)

3,966(9,524)65,9384,180(3,628)(12,294)

62,813
6,307(5,050)(13,080)

54,19650,990(8,231)
8,560(32,192)(3,832)
2,893(31,343)

2,103(1,392)
(515)

1,336
(741)
(11,524)−(27,209)
−
(851)
465
(338)

679
(157)
671
(509)
4,150
(690)

662
(58,938)679(38,388)

9,272
44,823(48,022)(29,689)

20,000(11,376)(1,439)
(615)
(578)
(690)
11,375(5,653)980
16,671
17,651

60,627(39,204)
10,000(11,375)(1,348)
5
(62)
(735)
(11,781)159
980
17,651
18,631

Third-Party Verification

The DIC Group commissioned SGS Japan Inc. to conduct third-party verification of its data forgreenhouse gas emissions, discharge of industrial waste and number of occupational accidents (including
number of accidents leading to workdays lost).

DIC Report 2019 ̲62

111 Years of Achievement

DIC Group Milestones

1908
Established as

1957

1925

Enters the market for helmets andother molded plastic products

Begins production of organic pigments
Develops production method for organic pigments
and begins production for its own use, the first step inits evolution as a fine chemicals manufacturer.

Kawamura Ink
Manufactory
Established by Kijuro Kawamura
as Kawamura Ink Manufactory;
adopts the dragon as its
product trademark and begins
manufacturing inks.

1940
Dragon product trademark

Commences production ofwater-based gravure inks

Enters the plastic products business with the aim of becoming an
integrated manufacturer with operations encompassing productionof everything from plastic raw materials to finished products.

1962

Changes Company nameto Dainippon Ink and Chemicals

Amid wartime restrictions on use of volatile oils, develops
water-based gravure inks—one of several achievementsthat would later facilitate expansion into synthetic resins.

Embarks on a new chapter in its history by absorbing
Japan Reichhold Chemicals Inc., and changes Company
name to Dainippon Ink and Chemicals Incorporated (DIC).

1952

Makes full-scale entry into thesynthetic resins business
Establishes Japan Reichhold Chemicals Inc., then thesecond-largest joint venture with an overseas firm in thehistory of the Japanesechemicals industry,
and makes a full-scale
entry into the synthetic
resins business.

DIC’s previous
corporate symbol

1968

Commences sales of the
DIC Color Guide ®

DIC’s founder, Kijuro Kawamura

Launches the DIC Color Guide®, which becomes the defacto standard for color selection in numerous industries,
bolstering recognition of the DIC name.

Reichhold Chemicals’
San Francisco plant

1915

Commences production of offset printing inks
Becomes one of the first companies to conduct
research in the area of offset printing inks and succeeds
in producing a viable product in only one year.

1973

Establishes theEnvironment and Safety
Response Department
Creates department under the directsupervision of DIC’s president to oversee
safety and environmental initiatives(today’s Responsible Care Department);
creates Environment and Safety
Management Regulations and Interim
Emergency Countermeasures Department
and begins promoting decisive efforts,
including the implementation of plantsafety inspections.

63̲ DIC Report 2019

Diversiﬁes operations by building onbase in printing inks, organic pigments
and synthetic resins

1990

Opens Kawamura
Memorial Museum of Art
Located in Sakura, Chiba Prefecture,adjacent to the Central ResearchLaboratories; established to exhibit works
of art collected by DIC and DIC Group
companies; now called the Kawamura
Memorial DIC Museum of Art.

Actively introduces technologies
from overseas and promotes
further diversification

1995

Declares intention to uphold theprinciples of Responsible Care

Takes an active role in the Responsible
Care movement since the start as one of
74 founding members of the Japan
Responsible Care Council (JRCC);
reinforces efforts to, among others, reduce
negative environmental impact ofoperations and lower energy consumption.

2006

Becomes signatory to the
Responsible Care Global Charter
Signs the CEO’s Declaration of Support for
the Responsible Care Global Charter,
established by the International Council of
Chemical Associations, as befits its status asa member of the global community of finechemicals manufacturers.

Certiﬁcation of DIC as signatory to
the Responsible Care Global Charter

Sustainability Initiatives

Promotes expansion of
printing inks business

DIC Color Guide ®

1970

1999

Establishes Crown Zellerbach Packaging Materials Japan
Co., Ltd., in a joint venture with Crown Zellerbach
Corporation of the United States and Nippon Kakoh Seishi
Co., Ltd., and enters the multilayered films business.

Establishes presence in India, Central and South America
and elsewhere by acquiring the Coates Group fromTOTALFINA S.A., France’s largest oil company.

Enters the multilayered films business

2008

1973

Enters themarket for LCs
Develops revolutionary
h i g h - p e r f o r m a n c e,
long-lasting nematicLCs, commencing its
evolution into one of
the world’s foremost
manufacturers of LCs.

Acquires Coates, the printing inks
division of France’s TOTALFINA

Changes Company nameto DIC Corporation
Marks centennial anniversary by changing Company name to
DIC Corporation and adopting a new corporate symbol.

Acquires the graphic arts materials division of
Sun Chemical Corporation of the United States
Becomes world’s largest
manufacturer of printing
inks in terms of market
share and a leading namein the graphic arts materials
business.

DIC’s new corporate symbol

In May 2015, completes thereconstruction of its corporate
headquarters—the DIC
Building—in Nihonbashi,Tokyo, the role of which was
expanded to include oversightof the global DIC Group.

DIC Building

2016

Introduces branding program

Brand advertisement for television

2009

2017

In October 2009, establishes a joint venture with Dai Nippon Printing
Co., Ltd., subsidiary The Inctec Inc. and integrates its domestic
printing inks business with the printing inks business of The Inctec.

Concludes capital and business alliance with Taiyo Holdings Co., Ltd.,
one of the world’s leading manufacturers of solder resist for PWBs.

Establishes DIC Graphics Corporation

Sun Chemical’s headquarters

Completes
reconstructionof corporate
headquarters
in Nihonbashi

Introduces new branding
program based on theGroup’s “Color & Comfort”
brand slogan, which sets
f o r t h t h r e e c o r p o ra t evalues, and in Octobera i r s a new television
advertisement.

Nematic LCs

1986

2015

Enters capital and business alliancewith Taiyo Holdings

1999

2010

2019

Amid rising awareness of environmental issues, develops
Japan’s first organic solvent-free sheetfed offset ink.

Develops the G58 series of green pigments for use in color filters forliquid crystal displays (LCDs), which deliver marked increases inbrightness and contrast compared with previous products andcontribute substantially to reduced energy consumption by LCDs.

Clarifies strategies for transforming the DIC Group’s businessportfolio, that is, for building a sophisticated portfolio focused on
ESH-related issues and social changes by advancing qualitativereforms in existing core businesses and creating new businesses
with the potential to become mainstays.

Succeeds in developing 100% soybean
oil–based printing ink

Seeks to advance globalization ofcore businesses and diversify into new areas

Develops groundbreaking series ofgreen pigments for LCD color filters

Launches DIC111 medium-term
management plan

Takes steps to advance environmental
protection and expands global presence

Prepares for a new phaseof growth

2007

2010

2014

Begins promoting CSR initiatives;
identifies fulfilling its responsibilities as amember of society through its businessactivities and contributing to the evolutionof society as the cornerstones of CSR.

In December 2010, becomes a participant in
the United Nations Global Compact (UNGC),
with the aim of maintaining its reputation asa socially responsible corporate entity.

Clarifies its overall policy of achieving sustainability
in a manner that takes into account, among others,
the environment, ecosystems and socioeconomic
issues, and changes the designation used across its
program from “CSR” to “sustainability.”

Joins United Nations
Global Compact

2015

Changes designation to“sustainability”

In-house poster promoting sustainability initiatives

Launches CSR program

Selected for inclusion in the
Dow Jones Sustainability
Indices Asia Pacific Index
Included for the first time in the DJSI
Asia Pacific Index, a global family of
indices for socially responsible investing
and a benchmark of global sustainability.
As of 2018, has been included in theindex for four consecutive years.

DIC Report 2019 ̲64