Table of Contents

Basic Corporate Behavior Policy●2Editorial Policy and Company Profile

3

Message from Top Management

4

Materiality and Key Performance Indicators (KPIs) forSakai Chemical

6

Building a Transparent and Strong Management System

10

Commitment to Promoting Human Rights

12

Making People Happy

18

Response to Climate Change

20

Protecting the Global Environment

26

Solving Social Issues through Manufacturing

29

Financial Information

30

Find the Sakai Chemical Group in Your Daily LifeWe will contribute to a prosperous future for our customers by providing
high-value-added, socially beneficial products and services that meet the needs ofthe times while giving consideration to safety.
● For the benefit of wider society, we will comply with all laws and regulations andadhere to their spirit, have no relationships with antisocial forces, and strive to act
sensibly.
● For shareholders and investors, we will disclose company information in a timely
and fair manner, conduct sound and honest corporate management, and strive tocontinuously grow our business.
● For our business partners, we will build good partnerships and conduct soundand fair transactions in order to achieve mutually prosperous relationships.
● For local communities, we will prioritize environmental preservation and safety in all
aspects of our operations and aim to be a good corporate citizen that earns thetrust of the community by maintaining clean corporate behavior.
● For employees and others who work with us, we will aim to respect each other,promote diversity, and grow together in a safe and comfortable work environment.
● To protect the company’s assets, we will manage the intellectual property andimportant confidential information held by the company appropriately, in accordancewith our internal rules.

Editorial Policy

Scope of Reporting

This report explains to stakeholders how Sakai Chemical Industry
Co., Ltd. carries out its social responsibilities in order to fulfill its
management mission “Chemistry for a Friendly Future.” The reportfocuses on the environmental, social and governance initiatives theCompany implements with the aim of realizing a sustainable society.

This report mainly concerns the activities of Sakai Chemical Industry,
but also includes some activities conducted by the other Sakai
Chemical Group companies. In this report, “Sakai ChemicalIndustry” and the “Sakai Chemical Group” are defined as follows:• Sakai Chemical Industry (or the “Company”) – Sakai Chemical
Industry Co., Ltd.
• Sakai Chemical Group (or Sakai Chemical) – Sakai Chemical
Industry Co., Ltd. and its consolidated subsidiaries
When the report mentions matters related to a particular portion of
the abovementioned scope of reporting, that portion is specified.

Period Covered
Fiscal year of 2022 (from April 1, 2022 to March 31, 2023)
Some events and activities outside the abovementioned period arealso included in this report.

Date of IssuanceAugust 2023

Management Mission:Corporate
Philosophy

Chemistry for a Friendly Future

Creating materials that support the comfort and security of society
through compassion and technological innovation
Organizational Vision:Exciting Company

We will build an exciting company together.

Company Profile (as of March 31, 2023)
Company Name: Sakai Chemical Industry Co., Ltd.
Founded: June 25, 1918
Incorporated: February 25, 1932
Head Office: 5-2 Ebisujima-cho, Sakai-ku, Sakai City, Osaka,590-8502, Japan
Paid-in Capital: 21,838 million yen
Number of Employees: 2,013 (consolidated);
769 (non-consolidated)
Production Bases: Sakai Manufacturing Site; Onahama
Manufacturing Site; Yumoto Factory;
Semboku Factory; Otsurugi Factory;
Matsubara Factory

Fields of Business
The history of Sakai Chemical Industry dates back to 1918, when it
succeeded in developing an improved method of manufacturing zincoxide. Since then, in accordance with changes in people’s lives andvalues, the Company has enhanced its core technologies forinorganic powder processing, organic synthesis, and pharmaceuticalmanufacturing, based on barium and titanium dioxide, thereby
commercializing products that can meet the needs of the times.
Today, the Company supports the most advanced manufacturing ofsmartphones, automobiles, cosmetics, and other products.

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Sakai Chemical Group NetworkIn Japan

Manufacturing

Sales

Sakai Chemical Industry Co., Ltd.; Kaigen PharmaCo., Ltd.; Osaki Industry Co., Ltd.; Resino ColorIndustry Co., Ltd.; Kyodo Chemical Co., Ltd.; SC
Organic Chemical Co., Ltd.; Nippon Color IndustryCo., Ltd.; Katayama Seiyakusyo Co., Ltd.
Sakai Trading Co., Ltd.

Outside Japan

Manufacturing

Sales

Sakai Chemical (Vietnam) Co., Ltd.
Siam Stabilizers and Chemicals Co., Ltd.
PT. S&S Hygiene Solution
Sakai Trading New York Inc.
Sakai Australia Pty Ltd.
Sakai Trading (Shanghai) Co., Ltd.
Sakai Taiwan Co., Ltd.
Sakai Trading (Thailand) Co., Ltd.

Message fromTop Management
I would like to take advantage of the issuance of our Environmental and Social Report for FY2022 as an opportunity to give our stakeholders a message.
Sakai Chemical Industry originated from our predecessors’ efforts to commercialize zinc oxide with the aim of saving women and infants from leadpoisoning due to white powder. Since then, the Company has broadened the ranges of its products and their applications so widely that Sakai Chemicalmaterials currently support all aspects of human life. We believe that we can fulfill our mission “Chemistry for a Friendly Future” by solving social issues
through these various materials. As part of our efforts to achieve this, we have decided to certify materials that help solve social issues as “Smart Materials®.”
Meanwhile, the entire product supply process involves many steps, from procurement of raw materials and fuels, through manufacturing, to shipment anddelivery. Needless to say, these business activities themselves must be conducted in an environmentally friendly manner in people-friendly workplaceenvironments. The scope of such environmental and workplace measures has recently expanded to encompass the entire supply chain. In addition, there has
been growing public demand for companies to operate their businesses with a view to achieving harmonious co-existence and co-prosperity with society
while anticipating changes in their business environment and working to identify risks entailed by those changes and create new business opportunities.
Sakai Chemical has defined four themes for its business operations: “Make People Happy,” “Protect the Global Environment,” “Solve Social Issues through
Manufacturing,” and “Build a Transparent and Strong Management System.” Under these themes, we have identified a total of 11 issues of materiality and key
performance indicators (KPIs) relevant thereto. I will give you an overview of them below.
[Environment]
We are implementing various measures to achieve carbon neutrality
by 2050 in line with the public policy on response to climate change(based on the Task Force on Climate-Related Financial Disclosures[TCFD] Recommendations). As our first step, we have set a
medium-term target of reducing CO2 emissions by 30% (versus theFY2013 level) by FY2030. In addition to CO2 emissions reduction, weare also working on waste reduction through the effective use ofresources. Against a backdrop of growing public awareness of theimpacts of CO2 emissions and waste on a company itself and its
entire supply chain, we will make steady forward steps from a
medium- to long-term perspective.
[Society]In March this year, a fire occurred at a titanium dioxide factory at theOnahama Manufacturing Site. I apologize for the concern andinconvenience this accident caused to those involved and all otherstakeholders. It is deeply regrettable that we allowed such an accident
to occur while we were working to improve our risk management andoccupational health and safety after the explosion at the Yumoto
Factory. Fortunately, the fire did not injure anyone, but it has reminded
us of the latent risk of accidents causing injuries to our employees. We
will adopt thorough measures to create a safe and secure workplace.
We will also provide our employees with greater occupational healthcare and support their health enhancement efforts.
Meanwhile, the ongoing diversification of work styles andwork-related values has increased the importance of a company’scommitment to enabling its employees to adopt flexible work styles,
thereby increasing their motivation for work and maintaining adiverse workforce. Two years have passed since Sakai Chemical
Industry introduced a new personnel system. Diverse employees’
efforts to increase their own skills and raise their levels ofperformance will benefit both themselves and their company.
Therefore, we will devise and implement effective measures to
unlock the potential of individual employees, focusing on fostering a
corporate culture abundant in vitality and diversity.
[Corporate governance]
In the current age of upheaval, we are facing two important
governance challenges: reviewing our business portfolio anddeveloping management human resources. To address thebusiness-portfolio challenge, in FY2022 we divided our various
businesses into three categories: growth businesses, stablebusinesses, and businesses requiring streamlining measures. From
now on, we will have to achieve the desirable outcomes of ouroperation of these three categories of businesses. We also need todevelop management human resources who can review the portfolio
according to the times. We will make a serious commitment tosolving these important challenges while having close dialogue with
our stakeholders.
The ongoing war in Ukraine has reminded us of geopolitical risks,
while rapid situational changes, including more frequent extreme
weather events worldwide and the wider use of AI, have increasedthe uncertainty of the future. Even under such circumstances, we willremain committed to our consistent business activities as a“company with deep chemistry” that continues to provide value tosociety while changing flexibly with the aim of realizing “Chemistry fora Friendly Future.”
We look forward to continued support and guidance from ourstakeholders.

Toshiyuki YAGURA
President and Representative Director

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