DIC REPORT 2020
The DIC Group Integrated Report

English Version

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

MissionVisionVisionColor & Comfort by Chemistry

SpiritSpiritDrive, 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 2020

Connecting the DIC Group and its Stakeholders

DIC Group Communications 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.

Printed/PDF-Form Publications

Reports on activities
DIC Report

DIC Report(summary version)(complete version)

Summary integrated
report (published annually)(printed publication)

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

DIC Report
Financial Section

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

DIC Global Website

Real-time information
https://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

About this Report
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 2017, the Group has published the DIC Report as an
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consolidated operating results and corporate strategies, andQRQ¿QDQFLDO VXVWDLQDELOLW\ LQIRUPDWLRQ7KH*URXSKDVSXEOLVKHGDVLPSOL¿HGVXPPDU\YHUVLRQRIWKHUHSRUW SULQWHG ZKLFKIRFXVHVRQ
NH\KLJKOLJKWVDQGDPRUHGHWDLOHGFRPSOHWHYHUVLRQ 3') ZKLFKcontains extensive quantitative data.
DIC Report (Complete version) (PDF-form publication)

https://www.dic-global.com/en/csr/annual/Note: $VXVHGKHUHLQWKHWHUP³$VLD±3DFL¿FUHJLRQ´²DJHRJUDSKLFGHVLJQDWLRQWKDWOLNH³(XURSHDQGWKH$PHULFDV´DQG
³*UHDWHU&KLQD´UHSUHVHQWVDJURXSLQJRIFRPSDQLHVRYHUVHHQE\DUHJLRQDOKHDGTXDUWHUV²UHIHUVWR$VLD H[FOXGLQJ-DSDQDQG*UHDWHU&KLQD DQG2FHDQLD7KHWHUP³$VLDDQG2FHDQLD´UHIHUVWR$VLD H[FOXGLQJ-DSDQ DQG2FHDQLD

Link with the DIC Website
7KH
PDUNLQGLFDWHVWKDWPRUHGHWDLOHGLQIRUPDWLRQDQGordata can be found on the indicated page of the DIC global website.
DIC global website

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

Scope of Reporting
In 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.
https://www.dic-global.com/pdf/csr/environment/dic_report_scope_en_2020.pdf

Reporting Period)LVFDO\HDU -DQXDU\±'HFHPEHU

Date of Publication-XQH 7KHQH[WUHSRUWLVVFKHGXOHGIRUSXEOLFDWLRQLQ-XQH

Guidelines Referenced
Guidelines referenced in the preparation of this report were ISO 26000, theInternational Organization for Standardization’s standard for social responsibility,
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Contents
The DIC Group: A Global Powerhouse

3)LQDQFLDODQG1RQÀQDQFLDO,QIRUPDWLRQ

5A Message from the President

7

12-Year Summary

12

A Message from the CFO

13

The DIC Group’s Approach to Value Creation

15

Sustainability Index

17

Fiscal Year 2019 DIC Group Topics

19

The DIC Group’s Business Portfolio
3DFNDJLQJ *UDSKLF
Color & Display)XQFWLRQDO3URGXFWV

21
23
25

Product Development Designed to Create New Value
Thermoresponsive Cell Cultureware that Facilitates the Harvest of&HOOV:LWKRXW(Q]\PH7UHDWPHQWRU'DPDJH Cepallet
Fast-Curing Solvent-Free Adhesive DUALAM™
Special Feature

27

29

Activities

Sun Chemicalʼs Activities',&$VLD3DFLILFʼs Activities
DIC China ʼs Activities

34'LUHFWRUV$XGLW 6XSHUYLVRU\%RDUG0HPEHUVDQG([HFXWLYH2IÀFHUV

35

Corporate Governance37

Overview of Sustainability

40

Materiality Analysis

41

Support for the TCFD

43

31
33

Compliance
BCM and Crisis Management
Information Security

45
45
46

(QYLURQPHQW6DIHW\DQG+HDOWK (6+Quality
Human Resources Management6XVWDLQDEOH3URFXUHPHQW

47
50
51
54

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

55
56
57
58

Financial Report for Fiscal Year 2019
7KLUG3DUW\9HULÀFDWLRQ66

DIC Group Milestones

67

59

Cover Design
The cover of this year’s DIC Report derives its
LQVSLUDWLRQIURPWKH',&*URXS¶V³&RORU &RPIRUW´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.

DIC Report 2020 ̲2

The DIC Group: A Global Powerhouse
Net Sales

Corporate Data

1,000

Registered name:

Number of subsidiaries
and affiliates:(

174 Domestic: 32
Overseas: 142

768.6

805.5

400

789.4

600

751.4

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
20,513(Nonconsolidated: 3,321)820.0

Corporate headquarters:(Billions of yen)

’15

’16

’17 ’18 ’19 （FY）

200
0

)

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

50

41.3

48.4

56.5

20

54.2

30

51.1

40

’15

’16 ’17 ’18 ’19 （FY）

10
Note: Corporate data is as of December 31,
2019. Net sales and operating income
are for fiscal year 2019.

Global Network

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

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

Europe

51

32
Asia

57

Japan

Europe and Africa

Japan

Sun Chemical Groupand others

Net sales
DIC Asia Pacific Pte Ltd (Singapore)¥175.0 billion

Operating income

DIC Corporation, DIC Graphics
Corporation and others

Net sales5¥9.1billion

Africa¥305.5 billion

Asia and Oceania(Excluding Japan)

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

Net sales¥153.4 billion

Operating income
Sun Chemical Corporation headquarters(United States)3̲ DIC Report 20202

¥12.9 billion

Oceania

Operating income¥23.0 billion

Breakdown of Fiscal Year 2019 Net Sales by Segment

Breakdown of Fiscal Year 2019 Operating Income by Segment

Functional
Products

Functional
Products

33.5%￥768.6billion

39.1%

Packaging &Graphic

39.0%

billion

52.0%

Color &
Display

Packaging &Graphic￥41.3

Color &
Display

14.5%

21.9%

Note: Fiscal year 2019 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 figuresdiffer from reported net sales and operating income.

Breakdown of Fiscal Year 2019 Operating Income by Region

Breakdown of Fiscal Year 2019 Net Sales by Region
Asia and Oceania

Asia and Oceania

20.0%

26.3%

North, Central andSouth America

17.5%￥768.6billionJapan

North, Central andSouth America

39.7%

billion

8.6%

Europe and Africa

Japan

￥41.3

46.7%

Europe and Africa

22.8%

18.4%

Note: Operating income as used here includes eliminations (approximately ¥7.9 billion). Accordingly, these percentages do not represent shares of reported operating income.

Principal Global R&D Sites

North
America

14

Polymer
Technical Center —China

Printing Inks
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

Gallarta (Spain)

Fine Chemical
Technical Center—Korea

Eurolab (Germany)

Central ResearchLaboratories (Japan)¥134.7 billion

Operating income¥4.2 billion

13
Central & SouthhAmerica

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 2020 ̲4)LQDQFLDO,QIRUPDWLRQNet Sales, Operating Income and Operating Margin
Net sales

Operating income

Cash Provided by Operating Activities and Free Cash Flow
(Billions of yen)
Operating income(Billions of yen)

900

820.0
800

6.2%

805.5

789.4

751.4

700

Cash provided by operating activities
Free cash flow

Operating margin (%)

Net sales(Billions of yen)

7.2%

768.6

5.4%

600

62.5

80

60

70

50

54.2

6.0%

7.2%

70

51.0

50.6

60
40

500

50

400

40

29.1

30

30

300
200

51.1

54.2

56.5

48.4

20

41.3

100

10

0

0

2015

2016

2017

2018

(FY)

2019

30.3
25.8

20

19.1
10

12.6

0

-4.7

-5
2015

2016

2017

2018

(FY)

2019

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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

23.5

45.1
37.5

40

34.0

32.1

30

20

20

14.6%

12.9%

13.0%

20

10.4%
7.7%

10

10

10
0

2015

2016

2017

2018

(FY)

2019

0

0
2015

2016

2017

2018

(FY)

2019

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

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

Net assets

D/C ratio (%)

Interim dividend

Payout ratio (%)

Year-end dividend（%）(Billions of yen)

45

400

36.9%

（%）

40

40.3%

70

35

300

265.7

259.5

264.5

60

252.6

241.3

50
200

47.2%

44.0%

43.6%

44.7%

40

42.4%

289.9

307.0

344.0

327.3

2015

2016

2017

2018

2019

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5̲ DIC Report 2020

120

100

(FY)

0

50

0

40

100
60

65

60

40

40

2015

2016

20

125

100

20
10

0

25

(Yen)

80

343.5

30

29.4%

150

20.5%
30

100

27.3%

15

40

60

60

60

2017

2018

2019

)LJXUHVKDYHEHHQDGMXVWHGWRUHÀHFWWKHLPSDFWRIWKHFRQVROLGDWLRQRIVKDUHV ,Q¿VFDO\HDU',&SXUFKDVHGDQGUHWLUHGWUHDVXU\VKDUHV

10
5

(FY)

0

1RQ¿QDQFLDO,QIRUPDWLRQ
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(Tonnes)(Kg CO2 /tonne)

1,000,000

400

800,000
700,000(GJ/tonne)(Thousands of GJ)

14,000900,000

6

5.343

13,000316
657,000305
659,000

311
659,000

296

292

635,000

618,000

12,000300

270Energy consumption per unit of production

11,00011,127

5.144

5.360

5.155

5.142

5.014

11,100 11,379 11,053 10,902

10,7175

10,000600,000

4

9,000

577,000

500,000

200

400,000

8,000
3

7,000
6,000
5,000

300,000
100

2

4,000

200,000

3,000

100,000

2,000

1

1,000
0
2014

2015

2016

2017

2019 (FY)

2018

0

0
2014

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2015

2016

2017

2018

2019 (FY)0* (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\** 2ZLQJWRWKHUHYLVLRQRISURGXFWLRQYROXPHVRIFHUWDLQRYHUVHDV',&*URXSFRPSDQLHVWKHSHUXQLWRISURGXFWLRQ¿JXUHIRU¿VFDO\HDUKDVEHHQDPHQGHG

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

Occupational Accident Frequency Rate (DIC Corporation)(Rate)

（%）

DIC

1.50

100

Subsidiaries in Japan

90

1.00
80
70
60

0.50

52%

53%

56%

56%

58%

57%

50

0.00
2011

2012

2013

2014

2015

2016

2017

2018

2019 (FY)40

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.

30
20Frequency rate ＝

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

10
0

2014

2015

2016

2017

2018

2019

× 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)

2ZLQJWRWKHLQWURGXFWLRQRIDQHZ6$3HQWHUSULVHUHVRXUFHSODQQLQJ (53 V\VWHP
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)
60

Male employees(Years)7

Female employees

52
48

50

Average years of employment in fiscal year 2019
Male employees:（%）

18.3 years Female employees:19.8 years Overall:18.6 years

41

5.5%

40

25

24
15
20

4.4%

28

30

5

5.1%

33
20

6

4

3.7%

3

3.1%
2.6%
2

10
10

5
0
1994

2011 2012 2013 2014 2015 2016 2017 2018 2019

(FY)

0

1

2015

2016

2017

2018

2019

2020 (FY)0

DIC Report 2020 ̲6

A Message fromthe President

We seek to become a unique andtrusted global company generating
value in safety and serenity,
color and comfort.
Representative Director
President and CEO
DIC Corporation

Kaoru Ino7̲ DIC Report 2020

In February 2020, we celebrated DIC’s 112th anniversary. One of the world’s leading diversified chemicals companies, DIC
is also the core of the DIC Group, a multinational organization comprising 174 companies in 64 countries and territories. In
addition to commanding the top share of the global market for printing inks, a core business since our establishment, the DIC
Group has succeeded in growing pigments and polymers—both derived from printing inks—into prosperous components ofour business portfolio. Amid rising environmental concerns, including climate change and marine plastics, falling birthrates,
longer lifespans, and the evolution of social structures with the rapid spread of digital technologies, the DIC Group continues
to marshal its capabilities to address increasingly urgent social imperatives toward a sustainable society.

1. DIC111 Progress Report and a Review of Fiscal Year 2019
In fiscal year 2019, we kicked off our DIC111 Medium-Term Management Plan—with the two basic strategies of Value
Transformation and New Pillar Creation—toward a business structure less vulnerable to macroeconomic factors. Unfortunately,
shipments of epoxy resins, polyphenylene sulfide (PPS) compounds and other highly profitable products expected to showhigh growth were hampered by reduced demand in the semiconductor, electrical and electronics equipment, and automobile
sectors, due to slower global economic growth amid trade friction between the United States and the People’s Republic ofChina (PRC). Consequently, consolidated net sales slipped 4.6%, to ¥768.6 billion, and operating income declined 14.6%, to¥41.3 billion.
While we acknowledge that our efforts to maximize the benefits of Value Transformation fell short, we made significant
headway in eliminating the gap between costs and sales prices—a temporary difference resulting from delays in revisingsales prices to reflect fluctuations in raw materials prices—which had hampered our performance in fiscal year 2018. We also
benefited from cost reductions achieved through rationalization, one result of which was the Southeast Asia operating income
recovery to fiscal 2018 year levels.

2. Promoting Businesses Focused on Social Imperatives and Business Portfolio Transformation
We have traditionally recognized the impact of macroeconomic conditions, including factors affecting raw materials prices andsupplies, and exchange rates, on DIC Group operating results as a major structural issue. Guided by the two basic DIC111VWUDWHJLHVZHDUHWKXVZRUNLQJWRFUHDWHDPRUHUREXVWRSHUDWLQJIRXQGDWLRQE\WUDQVIRUPLQJRXUEXVLQHVVSRUWIROLR²VSHFL¿FDOO\by building a sophisticated portfolio focused on environment, safety and health (ESH)-related issues and social change byadvancing qualitative reforms in existing core businesses, and creating new businesses with the potential to become mainstays.
We define Value Transformation as clarifying competitive advantages and shifting to products capable of withstanding theimpact of changes wrought by macroeconomic and other external factors. For example, given the changes in demand resulting
from digitalization, for the past several years we have sought to modify our business portfolio, reducing the weighting of
publication inks and increasing that of inks and other materials for packaging. Grouping various businesses together under
Packaging will bring together common issues such as food safety and food loss, positioning us to develop comprehensive
proposals for packaging materials, including by forming partnerships across the value chain and revamping business models.
Simultaneously, we will promote the establishment of standards for withdrawal to review and perhaps replace certain businesses
dealing with commoditized products.
We seek to become a unique and trusted global company generating value in safety and serenity, color and comfort.

DIC’s future vision
Social Value• Environmental
impact reduction• Social contribution

Two Strategies for Business
Portfolio Transformation● Build a wide range of global No. 1 businesses thatevoke our Color & Comfort brand slogan

Target Areas● Deliver corporate value through diversity, earning
respect and admiration from the global community● Work with employees, customers and stakeholders tocreate value and enhance the DIC brandEconomic Value• Growth• Profitability• Capital efficiency

To facilitate New Pillar Creation, we established the New Business Development Headquarters to oversee efforts to create new
growth-driving businesses and develop them into mainstays in four priority areas in which social imperatives and DIC competitive
strengths overlap. We will accelerate this process by making extensive use of corporate venture capital (CVC) and by seeking
advantageous mergers and acquisitions (M&As).

DIC Report 2020 ̲8The four priority areas outlined in DIC111 as the focus of portfolio transformation are areas that offer potential for enhancing
both social value and economic value. To underpin this transformation, we recently established the DIC Sustainability Index, aproprietary index that will allow us to measure the social value of our products. This index will be used in all DIC Group businesses
to assess the environmental impact of products from raw materials procurement through disposal and social contribution, andwhen customers use our products, from shipment until the end of their useful lives. This index will be incorporated into future
product development, procurement, sales and distribution. We will also use the Sustainability Index to communicate these efforts
to stakeholders in an easy-to-understand manner, thereby allowing us to identify activities we should pursue.
For example, our ability to successfully grow our packaging businesses depends on us effectively confronting such challenges
as the need to reduce plastics and eliminate marine plastics. So, how do we go about doing this? The key to how much our
packaging business contributes to society will be our ability to provide packaging solutions that help increase social value by
advancing the reduction, reuse, and recycling of materials. In the past, improving convenience was our principal concern, but
our focus now must be on balancing convenience and environmental impact. Chemical companies have always been expected
to provide convenience, but today our sales and our survival hinge on our ability to deliver both convenience and lower
environmental impact.
8VHRIWKH',&6XVWDLQDELOLW\,QGH[FRPPHQFHGLQ¿VFDO\HDU *RLQJIRUZDUGZHZLOOFRQWLQXHWRFDSLWDOL]HRQWKLV
index to ensure we maintain a healthy awareness of the social value created by addressing social imperatives and in so doing
reinforce our long-term management direction.

3. BASF SE’s Colors & Effects Business Acquisition and Outlook
Even before launching of our Value Transformation strategy, we had begun looking to reinforce our functional pigments
business, a key strategic product area. We have long manufactured highly profitable ultraviolet (UV)-curable functional
pigments, earning recognition in the market for high-value-added specialty pigments, including those for cosmetics, opticalequipment, and color filters—all small in terms of production volume but delivering exceptionally high value. In our search
for ways to expand operations, we became aware of a BASF plan to divest from its Colors & Effects business. After carefully
assessing its regional strengths and product portfolio, we determined that integrating Colors & Effects functional pigments
could yield significant synergies. Although closing is not expected until late 2020, we anticipate the total cost of this acquisition
will be approximately ¥120 billion, well within the ¥250 billion earmarked for strategic investments under DIC111, making
it a highly attractive proposition. To date, stakeholder evaluations of this acquisition are generally positive, thanks to thecomplementary nature of our geographic business sites and product portfolios, as well as the rationality of the acquisition froma monetary perspective.
Given the PRC’s 2019 economic slowdown and the global COVID-19 health crisis, we must assume global economic growth
ZLOOZHDNHQWRDFHUWDLQGHJUHHLQ¿VFDO\HDU$OWKRXJKLWLVGLI¿FXOWWRSUHGLFWWKHIXOOLPSDFWRIWKLVSDQGHPLFHQVXULQJthe health and safety of our worldwide members remains our priority. I call on all DIC Group members to join forces to promotemeasures within and across regions to help us overcome this challenge.
Looking at materials for electrical and electronics equipment, for example, we largely cleared intermediate material inventories
and saw improved shipments of high-performance resins in January and February. However, as COVID-19 has disrupted global
automobile industry supply chains, there is no way to accurately project what will happen. While the negative impact of thecurrent situation is impossible to accurately gauge, we know what we must do. The task immediately ahead of us is to accelerate
the implementation of our Value Transformation and New Pillar Creation strategies.
Looking at the challenges we faced between the Great East Japan Earthquake and the COVID-19 pandemic, it is absolutely
essential for us to ensure the effective management of DIC Group supply chains. Accordingly, we have established a Supply
Chain Management Unit. Until now supply chain management was the responsibility of individual product divisions. Moving
IRUZDUGZHVHHWKLVQHZXQLWIXQFWLRQLQJJURXSZLGHOLQNHGWRWKHQHZJOREDOPDQDJHPHQWFRQ¿JXUDWLRQWREHSXWLQSODFHRQFH
we complete the acquisition of BASF Colors & Effects.
In terms of business continuity planning (BCP), the Great East Japan Earthquake exposed risks associated with highly
fragmented supply chains. A solid grasp of supply chain–related issues and the ability to swiftly enact post-pandemic or majordisaster BCPs are both critical. Recognizing that both also depend on a company’s competence, we will continue working toformulate effective BCPs tailored to our supply chains.

4. Building a Stronger Management Infrastructure and Addressing ESG-Related Issues
Digital Transformation
Conscious of the many implications of digitalization, we recently established the DX Promotion Department, a dedicateddepartment charged with advancing digital transformation (DX). I see the importance of digital transformation as a process formodifying a company’s corporate structure and a business model, rather than simply advancing systems capabilities throughdigitalization—a way to fundamentally transform a business or company. Of course, we also understand the importance ofdigital marketing and materials informatics—the use of material properties databases and artificial intelligence (AI) in theselection and deployment of materials—and we will continue to promote efforts to apply both to various processes.
1

9̲ DIC Report 2020

However, in this era of social change, the most important
thing for us is to determine what corporate reforms
are necessary to ensure we achieve our vision for the
DIC Group. We are combining two approaches to thischallenge. The first uses backcasting—working back fromour vision to determine actions to be taken to achievethat goal—and the second uses forecasting—analyzing
and extrapolating trends to determine appropriate
actions—and leveraging digitalization to facilitate efficient
implementation. In the area of production, for example, wehave identified two key themes: Ensuring operating safety
and increasing productivity. Rather than simply treatingthese themes as an extension of existing efforts, we arelooking at what reforms we need to implement to realize
unattended and smart production facilities and clarifying
what can be done at present. Digital transformation willallow us to translate such ideas into execution.
2 Human Resources Management

Under DIC111, we are promoting a human resources management strategy centered on four core themes called WING. As a global
entity, we will continue to leverage the fact that approximately 60% of our labor force is overseas as a key competitive advantage.
To facilitate more strategic human resources management in fiscal year 2019, we established the Human Resources Strategy
Department. To date, we have taken active steps to empower women in the workplace and reform workstyles by introducing telework,
ÀH[WLPHDQGV\VWHPVWRVXSSRUWPHPEHUVVWULYLQJWREDODQFHFDUHHUZLWKIRUH[DPSOHWUHDWPHQWIRUDQLOOQHVV$WSUHVHQWZHDUH
working to take such initiatives a step beyond structural changes by emphasizing efforts to foster a new corporate culture.
7KHFKDOOHQJHRIVKLIWLQJIURPDZRUNVW\OHSUHGLFDWHGRQOLIHWLPHHPSOR\PHQW¿[HGUHWLUHPHQWDJHDQGVHQLRULW\EDVHGSURPRWLRQWR
new workstyles is not the sole responsibility of human resource departments. Changes to systems are simply a means to an end. It’s
important to secure increasingly talented human resources. When anticipating future social changes, it is also important to consider
what sort of key reforms are necessary. For example, while our telework infrastructure is now in place, we still have many jobs thatcannot be done remotely. There is still ample scope for ingenuity to make operations more conducive to telework by integratingprocedures. If such efforts are successful, telework will truly become something that helps resolve the issue of overwork by eliminating
commuting time.
7KURXJKHIIRUWVWR³UHIRUPZRUNVW\OHVWRFDSLWDOL]HRQGLYHUVL¿HGLQGLYLGXDOLW\´²DFRUH:,1*WKHPH²ZHVKDOOVWULYHWRFUHDWHDQ
environment that accepts varied perspectives and encourages active discussion. In so doing, we will endeavor to marshal the diverse
individuals who make up our labor force, drive organizational dynamism and create new value by bringing together people withdiverse views and ideals.
3 Safety

DIC Group management and members approach their responsibilities recognizing operational safety as the cornerstone of our
EXVLQHVVDFWLYLWLHVDVDPDQXIDFWXUHURI¿QHFKHPLFDOV1RQHWKHOHVVLQ$XJXVWZHH[SHULHQFHGDVHULRXV¿UHDWRXU6DLWDPD
3ODQWWKDWUHJUHWIXOO\FDXVHGFRQVLGHUDEOHLQFRQYHQLHQFHDQGFRQFHUQWRUHVLGHQWVLQWKHYLFLQLW\RIWKHSODQWDQGRWKHUVLWHV5HÀHFWLQJ
on the shortcomings that led to this sad incident, and reminding ourselves that our ability to locate sites and manufacture products
depends on the understanding of local residents, we have renewed our pledge to act as a responsible corporate citizen, take part inthe community, and, in the event an issue arises, immediately take steps to provide reassurance. In addition to independent efforts
DLPHGDWIXO¿OOLQJRXUREOLJDWLRQWRHQVXUHRSHUDWLRQDOVDIHW\DQGLPSURYHWKHHIIHFWLYHQHVVRIVDIHW\DXGLWVLWLVLPSRUWDQWIRUDOO
departments involved in manufacturing to work together to increase awareness, and, through full member participation, to promote
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capabilities as a manufacturer.
4 Climate Change,Q¿VFDO\HDUZHGHFODUHGRXUVXSSRUWIRUWKH7DVN)RUFHRQ&OLPDWHUHODWHG)LQDQFLDO'LVFORVXUHV 7&)' DFNQRZOHGJLQJ
that responding to climate change and disclosing climate-related information is critical to advancing our business strategies. We are
FRPPLWWHGWRIXO¿OOLQJRXUUHVSRQVLELOLW\WRDQDO\]HDQGSURYLGHLQYHVWRUVZLWKUHOLDEOHQRQ¿QDQFLDOUHSRUWLQJDQGWRFODULI\LPSDFWVRQ¿QDQFLDOLQIRUPDWLRQ7KH',&*URXSLVDJOREDOHQWLW\ZLWKRSHUDWLRQVLQFRXQWULHVDQGWHUULWRULHV$VVXFKZHXQGHUVWDQGWKH
importance of all Group companies responding to climate change issues in an integrated manner, aggregating pertinent data and
FRQYHUWLQJLWLQWR¿QDQFLDOGDWDWRDVFHUWDLQWKHLPSDFW ULVNVDQGRSSRUWXQLWLHV RIFOLPDWHFKDQJHRQRXURSHUDWLRQV,Q¿VFDO\HDU
2019, we attempted scenario analysis, which the TCFD encourages. We shall continue to expand this effort to prove the resilience ofGroup strategies for responding to risks and maximizing opportunities related to climate change.

DIC Report 2020 ̲10

5. An Integrated Global Management Team

Meeting with regional headquarters’ top executives

As overseas markets provide 60% of DIC Group consolidated net sales, we are highly conscious of the importance of effective
global communication, and not just as it pertains to the TCFD. Thanks to steady efforts to enhance communication capabilities
in recent years, when I issue statements as president and CEO they are instantly transmitted to core Group companies in
64 countries and territories and posted the next day, together with my image, for Group members in all these countries andterritories to see.
Since our 1986 acquisition of the Sun Chemical Group—mainly based in the United States and Europe—DIC has worked
steadily to build an integrated global management team. Today, Group members across the globe use the term “global one
HQWLW\´ H[WHQVLYHO\ /RRNLQJ DKHDG WKH LQWHJUDWLRQ RI WKH &RORUV  (IIHFWV EXVLQHVV DFTXLUHG IURP %$6) ZLOO DPSOLI\ RXU
expectations of members in terms of their ability to function on a global stage. For example, we need to rethink our official
language of business and advance a more forward-thinking concept of global operations, including businesses and humanresource management. While defining what constitutes global operations may present its own difficulties, I believe it is accurate
to say that operations are global when governed by a unified global strategy. There are many ways to view global management:
Do you treat Group operations management and product-specific management as independent responsibilities or as partsof a greater whole? Is the current format of corporate (Japan) and regional headquarters best or should we create a global
corporate headquarters configuration? We must consider all of these issues over the next two to three years.
The integration of Colors & Effects in late December 2020 should further expand the DIC Group’s global presence. Although
uncertainty persists worldwide due to COVID-19, we will continue seeking ways to apply chemistry to resolve challenges andworking to become a unique and trusted global company generating value in safety and serenity, color and comfort. In theseand all our endeavors, I look forward to ongoing stakeholder support.

11̲ DIC Report 2020

12-Year Summary
Key Financial Data
Period

111

112

113

114

115

116

117

118

119

120

121

122

2014

2015

2016

2017

2018

2019

2008

2009

2010

2011

2012

Net sales (Billions of yen)

932.3

757.8

779.0

734.3

703.8

784.0

830.1

820.0

751.4

789.4

805.5

768.6

Operating income (Billions of yen)

25.4

27.8

37.2

35.0

38.5

44.1

41.1

51.1

54.2

56.5

48.4

41.3

Operating margin (%)

2.7

3.7

4.8

4.8

5.5

5.6

4.9

6.2

7.2

7.2

6.0

5.4

R&D and technology-related
expenses*1 (Billions of yen)

32.2

27.1

26.3

23.7

23.0

19.8

25.3

26.8

26.2

27.4

28.4

27.9

Of which, R&D expenses(Billions of yen)

17.4

12.4

11.0

9.1

8.8

8.8

10.9

12.2

11.2

12.4

12.9

12.5

Fiscal year

2013

*3

IncomeOrdinary income (Billions of yen)

15.2

19.1

31.7

30.8

35.1

40.9

39.9

49.0

55.8

57.0

48.7

41.3

Net income attributable to ownersof the parent (Billions of yen)

2.6

2.5

15.8

18.2

19.1

28.8

25.2

37.4

34.8

38.6

32.0

23.5

EBITDA (Billions of yen)

55.2

48.8

63.7

61.5

65.2

69.1

77.0

94.0

82.6

86.1

81.4

67.4

EBITDA margin (%)

5.9

6.4

8.2

8.4

9.3

9.8

9.3

11.5

11.0

10.9

10.1

8.8

Total assets (Billions of yen)

738.5

749.9

703.8

675.1

693.0

761.7

803.7

778.9

764.8

831.8

801.3

803.1

Net assets (Billions of yen)

108.9

122.8

130.4

124.5

160.7

218.9

276.7

289.9

307.0

344.0

327.3

343.5

Equity ratio (%)

12.9

13.5

15.3

15.1

19.8

25.6

31.1

33.7

36.4

37.9

37.3

38.9

Interest-bearing debt
(Billions of yen)

387.1

377.7

337.6

328.5

315.6

299.1

274.2

259.5

241.3

265.7

264.5

252.6

D/C ratio (%)

78.0

75.5

72.1

72.5

66.3

57.7

49.8

47.2

44.0

43.6

44.7

42.4

Net cash provided by operating
activities (Billions of yen)

37.0

39.5

30.9

31.2

41.4

33.9

46.4

29.1

62.5

54.2

51.0

50.6

Net cash used in investing activities(Billions of yen)(35.7)(12.5)(12.3)(17.6)(23.7)(9.8)(27.4)(10.0)(32.2)(58.9)(38.4)(24.9))UHHFDVKÀRZ %LOOLRQVRI\HQ

1.4

27.0

18.6

13.7

17.7

24.0

19.0

19.1

30.3

(4.7)

12.6

25.8

Net cash provided by (used in)¿QDQFLQJDFWLYLWLHV %LOOLRQVRI\HQ

6.5(16.0)(26.3)(7.1)(26.6)(32.8)(26.1)(24.8)(26.9)

11.4(11.8)(26.8)Cash and cash equivalents(Billions of yen)

20.1

29.5

22.9

29.6

22.5

15.0

16.4

15.1

16.7

17.7

18.6

16.7

Earnings per share (Yen)

33.47

32.11

175.96

197.90207.98292.26267.81

389.40366.72407.56338.40248.29Price earnings ratio (PER)(Times)

43.0

62.9

11.0

8.4

9.5

10.9

10.9

8.5

9.7

10.5

10.0

12.2

Dividends per share (Yen)

60

40

40

40

60

60

60

80

100

120

125

100

179.3

124.6

22.7

20.2

28.8

20.5

22.4

20.5

27.3

29.4

36.9

40.3

Return on equity (ROE) (%)

1.6

2.6

15.1

17.3

16.0

16.1

11.3

14.6

12.9

13.0

10.4

7.7

Capital expenditure(Billions of yen)

44.0

23.6

20.8

27.0

26.6

27.1

33.6

32.1

31.3

33.6

32.1

35.0

Depreciation and amortization(Billions of yen)

40.6

35.4

33.0

29.7

27.4

25.9

33.8

32.9

32.4

31.5

32.8

33.1

Overseas sales ratio (%)

62.6

58.2

57.3

58.2

56.7

66.6

63.4

65.1

62.4

63.4

63.6

63.5

Average exchange rate (¥/US$)

103.68

93.51

87.69

79.77

79.93

97.06

106.32120.85109.96112.33110.46109.11

Average exchange rate (¥/EUR)

153.45130.91116.63110.88103.11129.25141.41134.14122.06127.03130.46122.13

Number of employees

23,613

22,583

21,572

20,455

20,273

20,034

20,411

20,264

20,481

20,628

20,62020,513Financial Position

Cash FlowsPer Share Information*2

Payout ratio (%)

Other Indicators*1 Technology-related expenses are for DIC and DIC Graphics Corporation*2 Per share information is adjusted for stock splits.
*3 (IIHFWLYHIURP¿VFDO\HDU',&DQGLWVGRPHVWLFFRQVROLGDWHGVXEVLGLDULHVFKDQJHGWKHLU¿VFDO\HDUHQGIURP0DUFKWR'HFHPEHU$VDFRQVHTXHQFHUHSRUWHGUHVXOWVUHÀHFWWKHIDFWWKDWIRUWKHVHFRPSDQLHV¿VFDO\HDUZDVDWUDQVLWLRQDOLUUHJXODUQLQHPRQWKSHULRG)RUWKHSXUSRVHRIFRPSDULVRQ¿VFDO\HDU¿JXUHVKHUHKDYHEHHQDGMXVWHGWRUHSUHVHQWWKHPRQWKVIURP-DQXDU\±'HFHPEHU

DIC Report 2020 ̲12

A Message from the CFO
The DIC Group seeks to ensure an appropriate balanceof financial health, strategic investments and returns
to shareholders and is expediting business portfoliotransformation to maximize cash flow.
Head of Finance and Accounting Unit
CFO

Shuji Furuta

Financialhealth2XUDSSURDFKWR¿QDQFLDOPDQDJHPHQWFHQWHUVRQHQVXULQJDEDODQFHDPRQJWKUHH
NH\SULRULWLHVPDLQWDLQLQJVRXQG¿QDQFLDOKHDOWKSURPRWLQJVWUDWHJLFLQYHVWPHQWVWRWUDQVIRUPRXUEXVLQHVVSRUWIROLRDQGHQVXULQJVWDEOHUHWXUQVWRVKDUHKROGHUV$VSHUIRUPDQFHLQGLFDWRUVZHKDYHDGRSWHGGHEWWRFDSLWDO '& UDWLR1WRJDXJH¿QDQFLDOVRXQGQHVVUHWXUQRQHTXLW\ 52( WRDVVHVVFDSLWDOHI¿FLHQF\GLYLGHQG
SD\RXWUDWLRWRPHDVXUHUHWXUQVWRVKDUHKROGHUVDQGUHFHQWO\HDUQLQJVEHIRUH
LQWHUHVWWD[HVGHSUHFLDWLRQDQGDPRUWL]DWLRQ (%,7'$ 2WRMXGJHRXUDELOLW\WR
JHQHUDWHFDVKDQGPD[LPL]HVKDUHKROGHUYDOXH

Strategic
investments

Returns toshareholders

D/C ratio

Strategic investments

Dividend payout ratio

50%¥250 billion

30%| Sound Financial Health
2XUJRDOIRURXU'&UDWLRWKHLQGLFDWRUZHKDYHDGRSWHGIRUILQDQFLDOVRXQGQHVVLVWRPDLQWDLQLWDWRUEHORZURXJKO\$VRI'HFHPEHURXU'&UDWLR²ZKLFKKDGGHWHULRUDWHGWRDVRIWKHHQGRIILVFDO\HDU²ZDV7KLVLPSURYHPHQWUHÀHFWHGJOREDOHIIRUWVWRHQKDQFHFDVKHI¿FLHQF\DVZHOODVUREXVWFDVKSURYLGHGE\RSHUDWLQJDFWLYLWLHVDQGDFFXPXODWHGHDUQLQJV2ZLQJWRWKHDFTXLVLWLRQRI%$6)¶V&RORUV (IIHFWVEXVLQHVVLQ¿VFDO\HDULQWHUHVWEHDULQJGHEWDVRI'HFHPEHULVOLNHO\WREHKLJKHUWKDQD\HDUHDUOLHU+RZHYHUWKDQNVWRWKHSURFXUHPHQWRIELOOLRQWKURXJKDVXERUGLQDWHGWHUPORDQ²DW\SHRIK\EULG¿QDQFLQJWKDWZKLOHRI¿FLDOO\GHEWKDVFKDUDFWHULVWLFVVLPLODUWRHTXLW\²DQGE\GLYHVWLQJDVVHWVDQGUHLQIRUFLQJHIIRUWVWRPDQDJHZRUNLQJFDSLWDOZHH[SHFWWRPDLQWDLQRXU'&UDWLRLQWKHDUHDRILQOLQHZLWKRXUFKRVHQLQGLFDWRU
+DYLQJDOVRFKRVHQ52(DVDQLQGLFDWRUIRUFDSLWDOHIILFLHQF\ZHDUHDGYDQFLQJWKHWUDQVIRUPDWLRQRIRXUEXVLQHVVSRUWIROLRE\
UHRULHQWLQJRXUIRFXVWRKLJKO\SUR¿WDEOHEXVLQHVVHV7RWKLVHQGLQDGGLWLRQWRSURPRWLQJVWUDWHJLFLQYHVWPHQWVWRJHQHUDWHQHZFDVKÀRZVZHKDYHHVWDEOLVKHG*URXSZLGHFULWHULDIRUZLWKGUDZLQJIURPEXVLQHVVHVZLWKORZJURZWKSRWHQWLDODQGSUR¿WDELOLW\8QGHU',&ZHKDYHDGGHG(%,7'$WRRXUH[LVWLQJFRQYHQWLRQDOSUR¿WDELOLW\FHQWHUHGSHUIRUPDQFHLQGLFDWRUVXQGHUVFRULQJRXU
FRPPLWPHQWWRFRQGXFWLQJPDQDJHPHQWZLWKDJUHDWHUDZDUHQHVVRIFDVKÀRZDQGWKHQHHGWRLQFUHDVHVKDUHKROGHUYDOXH

Financial HealthInterest-bearing debt (Billions of yen)
Net assets (Billions of yen)
D/C ratio (%)

Target for FY2018(D/C ratio of 50%)
achieved four years early
344.0

328.5

315.6

299.1
274.2 276.7

72.5
66.3

289.9
259.5

218.9
160.7

49.8

2013

Improve D/C ratio

13̲ DIC Report 2020

264.5

43.6

44.7

252.6

47.2
44.0

2012

265.7
241.3

57.7

124.5

2011

343.5

327.3

307.0

2014

2015

2016

2017

2018

42.4

2019

Maintain D/C ratio at around 50%

Target for adjusted
D/C ratio: Around 50%

2020 (FY)(Forecast)Net income attributable to ownersof the parent (Billions of yen)

ROE

EBITDA(Billions of yen)

ROE (%)
12.9

13.0

86.1

82.6

81.4

10.4
34.8

2016

38.6

72.9

67.4
7.7

7.4

23.5

23.5

32.0

2017

2018

2019

2020 (FY)2016(Forecast)

2017

2018

2020 (FY)(Forecast)2019| Strategic Investments to Accelerate Growth',&RXWOLQHVWZREDVLFVWUDWHJLHVIRUWUDQVIRUPLQJRXUEXVLQHVVSRUWIROLR9DOXH7UDQVIRUPDWLRQZKLFKHPSKDVL]HVZRUNLQJWREROVWHUWKH
FRPSHWLWLYHQHVVRIEXVLQHVVHVDQGJHQHUDWHVXVWDLQDEOHFDVKÀRZDQG1HZ3LOODU&UHDWLRQZKLFKFDOOVIRUFUHDWLQJQHZEXVLQHVVHVWKDWUHVSRQGWR(6+UHODWHGLVVXHVDQGVRFLDOFKDQJHV3UHYLRXVLQYHVWPHQWVWKDWFRQWULEXWHGWR9DOXH7UDQVIRUPDWLRQLQFOXGHWKHFDSLWDODQGEXVLQHVVDOOLDQFHZHFRQFOXGHGZLWK7DL\R+ROGLQJV&R/WGLQZKLFKZDVLPSOHPHQWHGXQGHU',&¶VSUHGHFHVVRU',&DQGSRVLWLRQHGXVZHOOWRGHYHORSDQGRIIHUSURGXFWVIRUWKHHOHFWURQLFVVHFWRU0RUHUHFHQWVXFKLQYHVWPHQWVLQFOXGHRXUDFTXLVLWLRQLQ¿VFDO\HDURIDPDQXIDFWXUHURIVHFXULW\
LQNVZKLFKDUHXVHGLQWKHSULQWLQJRIEDQNQRWHVDQGRIEXVLQHVVHQJDJHGLQWKHSURGXFWLRQRIKLJKSXULW\R[LGHSLJPHQWVZKLFKDUH
XVHGH[WHQVLYHO\LQFRVPHWLFV',&EXGJHWVELOOLRQIRUVWUDWHJLFLQYHVWPHQWVDLPHGDW
Total capital expenditure
Total strategic investments
Investments(Billions of yen)
DFFHOHUDWLQJJURZWK7KLVLVLQDGGLWLRQWRELOOLRQIRURUGLQDU\LQYHVWPHQWV ,Q$XJXVW  ZH DQQRXQFHG WKDW ZH KDG140
130
UHDFKHGDQDJUHHPHQWWRDFTXLUHWKH&RORUV (IIHFWVEXVLQHVV
RI%$6)IRUDQHVWLPDWHG¼PLOOLRQ DSSUR[LPDWHO\
70
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40
35.0
33.6
32.1
31.3
28.8
8QGHUWKH1HZ3LOODU&UHDWLRQEDQQHUZHKDYHHVWDEOLVKHG
3020
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13.0
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2.5
0.8
0
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2016
2017
2018
2019
2020 (FY)(Forecast)
WHFKQRORJLHVWRIDFLOLWDWHRSHQLQQRYDWLRQ

| Stable Returns to Shareholders',&ZLOOFRQWLQXHWRSD\GLYLGHQGVWKDWDUHLQNHHSLQJZLWKSURILWJURZWKLQOLQHZLWKLWVFRPPLWPHQWWRHQVXULQJVWDEOH
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SD\RXW UDWLR RI  ZKLFK ZLOO VHUYH DV D JXLGHOLQH IRUGLYLGHQGVRYHUWKHPHGLXPWHUP:HDUHSURSRVLQJWRSD\D\HDUHQGGLYLGHQGIRUILVFDO\HDURISHUVKDUH
$VDFRQVHTXHQFHGLYLGHQGIRUWKHIXOOWHUPZKLFKLQFOXGHVDSHUVKDUHLQWHULPGLYLGHQGZLOOEHDGHFUHDVH
RI  IURP ILVFDO \HDU  ,Q ILVFDO \HDU  ZH
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Interim (Yen)
Year-end (Yen)
Payout ratio (%)

Returns to Shareholders*

36.9
28.8
20.5

20.2

22.4

27.3

120

125

100
65

40

60

2015

2016

2.4

2.8

60

60

30

30

30

30

30

40

2011

2012

2013

2014

Dividend
yield (%)** 2.1

3.6

1.9

2.1

20
20

100
60

60
30

40

40

44.3

29.4

20.5
80

40.3

110

40

55

60

60

55

2017

2018

2019

2020 (FY)(Forecast)

2.8

3.7

3.3

60

* Figures have been adjusted to reflect the impact of the consolidation of shares.
** Dividend yield: Annual dividend payments / Closing share price at fiscal year-end
In fiscal year 2015, DIC purchased ¥5.0 billion worth of its own stock. If this is factored in, theactual dividend yield and dividend payout ratio would have been 4.0% and 34.1%, respectively.

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'&UDWLR,QWHUHVWEHDULQJGHEW ,QWHUHVWEHDULQJGHEW1HWDVVHWV
(%,7'$ 1HWLQFRPHDWWULEXWDEOHWRRZQHUVRIWKHSDUHQW7RWDOLQFRPHWD[HV ,QWHUHVWH[SHQVHV±,QWHUHVWLQFRPH 'HSUHFLDWLRQDQGDPRUWL]DWLRQ
7KH¿JXUHJLYHQIRUWKHFRVWRIWKLVDFTXLVLWLRQLVGHULYHGE\DGMXVWLQJWKHHQWHUSULVHYDOXHRIWKHWDUJHWEXVLQHVV ¼PLOOLRQ WRUHÀHFWFDVKDQGGHEWDVRI'HFHPEHU

DIC Report 2020̲14

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

Basic
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 2020

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

Healthcare

Packaging materials
that bring safety andpeace of mind

Outputs

Outcomes

Technologies andfunctional materials
that 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
Microorganism and cell culture
technologies withapplications extending
from food safety toadvanced 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 2020 ̲16

Sustainability Index
Promoting Business Portfolio Transformation:
Balancing Social Value and Economic Value
The basic concept of DIC111 is to transform the DIC Group’s businessportfolio by focusing on businesses that deliver both social value andeconomic value, an approach it sees as central to realizing its future vision,
which is to become a unique global company that is trusted by society byproviding value (safety and peace of mind, color and comfort). With social
Social Valueimperatives related to concerns such as climate change and marine plastics • Environmental
becoming increasingly urgent, the Group is reinforcing efforts to develop impact reduction• Social contribution
distinctive solutions that contribute to social value and to the realization of asustainable society.
Through DIC111’s two basic strategies, Value Transformation and New
Pillar Creation, the DIC Group will continue to accelerate efforts to transform
its business portfolio in a manner that ensures its ability to balance social
value and economic value.

Transforming DIC into a Socially
Conscious Business Organization

Target Areas

Economic Value• Growth • Profitability • Capital efficiency

Formulating the DIC Sustainability Index to Express Social ValueTo accelerate its transformation, the DIC Group formulated a proprietary sustainability index with the aim of clarifying the social valuethat the Group provides. To draft the index, DIC established the cross-business Sustainability Strategy Working Group, which held
discussions with departments in charge of the manufacturing and sales of Group products.

Expressing Social Value on Two Axes: Environmental Impact
Reduction and Social Contribution

Sustainability Index

The procurement of essential raw materials and the manufacture of products
inevitably has an effect on the environment. The DIC Sustainability Index’s
vertical axis (environmental impact reduction) expresses evaluation of the
LPSDFWRIDEXVLQHVVRUSURGXFWRQWKHHQYLURQPHQWDQGWKHEHQH¿WVRIHIIRUWV
to devise effective countermeasures. The horizontal axis (social contribution)
expresses evaluation of a business’ or product’s contribution to the resolutionof key challenges, as well as to the realization of a sustainable society. The
Group will continue to use this index to clarify the environmental impact andcontribution to markets of its businesses and products, enhancing its ability todeliver social value.

Assess product/business using graph below
indicates ideal direction

Vertical Axis:
Environmental
impact reduction

Product
B

Product
C

ProductA

Horizontal Axis: Social contribution(Resolving social issues/improving social wealth)Approach through the Value Chain
Vertical Axis

Value
Chain

Social Contribution

Impact from Raw Materials Production
and Finished Goods

Value from Market Processes
and ConsumptionRawmaterials

Suppliers

17̲ DIC Report 2020

Horizontal Axis

Environmental Impact Reduction

Manufacturing

DIC
products

DIC

Logistics

Processing

Finished
goods

Customers

Use

Productlife

Consumers

Disposal/
Recycle/Reuse

The planet

The DIC Sustainability Index’s vertical axis (environmental impact) expresses evaluation of the impact of a product on the environment overits entire life cycle (life cycle assessment1). This means assessing not only energy used in and waste generated during production but also
environmental impacts in the production of raw materials (crude oil production, mining, cultivation). The index also evaluates hazardous
substances and substances designated under Japan’s Pollutant Release and Transfer Register (PRTR), thereby clarifying the DIC Group’s
responsibility in supplying products, as well as its duty to formulate and implement countermeasures. The horizontal axis (social contribution)
expresses evaluation of a product’s contribution to the resolution of key challenges during processing by customers, use by consumers andend-of-life disposal. The index also assesses risks associated with the raw materials procured and products supplied by the DIC Group, as
well as opportunities (contributions to society) that leverage its unique capabilities.
Containers that prevent
damage to food duringtransportation

Food in retortable pouches(for long-term storage)

Food for long-term storage
SDGs Goals 2, 3, 12 and 13

SDGs Goals 2 and 3

Reduce food loss

Prepare for
emergencies

Easy-peel film
SDGs Goals 3 and 13

Promote dietary
diversification andbarrier-free food

The DIC Group:
Contributing toSociety in the
Area of Food

SDGs Goals 3 and 13

Enjoy eating
Packaging colors thatenhance the joy of foodSDGs Goals 9, 12 and 14

Microwavable(heats quickly)

Eliminate single-use plastics

Recyclable plastics
Recyclable containers(filmless paper)

Reusable personal foodstorage containers

VOICE The DIC Sustainability Index will help us identify risks and opportunities across the entire value chain.
From the perspective of realizing a sustainable society, it is essential to look at the entire value chain. The DIC Sustainability Index
ZLOOHQDEOHXVWRFODULI\SURGXFWDQGEXVLQHVVVSHFL¿FULVNVDQGRSSRUWXQLWLHV7KLVZLOOPDNHLWSRVVLEOHWRLQYHVWLJDWHULVNVLQWHUPV
of whether they can be resolved and/or transformed into opportunities. Of course, we will also continue to reassess opportunities
in light of global trends to ensure there is no chance of them turning into risks. Use of this index to identify product- and businessVSHFL¿FULVNVDQGRSSRUWXQLWLHVDQGLPSOHPHQWHIIHFWLYHFRXQWHUPHDVXUHVZLOOEHFUXFLDOWRDFKLHYLQJRXUIXWXUHYLVLRQRIEHFRPLQJD
unique global company that is trusted by society.
Manager, Sustainability Department, DIC Corporation

Nobuo Kobayashi

DIC Report 2020 ̲18

Fiscal Year 2019 DIC Group Topics
DIC Reaches Agreement to Acquire the Shares and Assets of the Colors & Effects
Business of Germany’s BASF and Transform the Business into a Subsidiary,Q¿VFDO\HDU',&UHVROYHGWRDFTXLUHWKHVKDUHVDQGDVVHWVRI%$6)
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0DQDJHPHQWUHSUHVHQWDWLYHVIURP',&6XQ&KHPLFDODQG%$6)&RORUV (IIHFWVBackground

Value Transformation,Q¿VFDO\HDU',&NLFNHGRIILWV',&PHGLXPWHUPPDQDJHPHQWSODQWRJXLGHLWVDVSLUDWLRQVWREHFRPHDXQLTXHJOREDOFRPSDQ\WKDWLVWUXVWHGE\VRFLHW\E\SURYLGLQJYDOXH VDIHW\DQGSHDFHRIPLQGFRORUDQGFRPIRUW WKURXJKWKHSURPRWLRQRILQLWLDWLYHVLQOLQHZLWKWZRNH\VWUDWHJLHV7KH¿UVWRIWKHVH9DOXH7UDQVIRUPDWLRQIRFXVHVRQVWUHQJWKHQLQJWKH&RPSDQ\¶VFRUSRUDWH
VWUXFWXUHWKURXJKTXDOLWDWLYHUHIRUPVLQH[LVWLQJEXVLQHVVHVZKLOHWKHVHFRQG1HZ3LOODU&UHDWLRQHPSKDVL]HVWKHFUHDWLRQRIQHZ
EXVLQHVVHVLQUHVSRQVHWR(6+UHODWHGLVVXHVDQGVRFLDOFKDQJHV',&KDVEXGJHWHGIRUVWUDWHJLFLQYHVWPHQWVLQOLQHZLWKWKHVH
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Define target areas inline with the strategic
direction of each segment
Expand lineup of
high-value-added
products andaccelerate growth

Packaging & Graphic

Expand specialty inks businesses(jet inks and security inks)

Color & Display

Expand functional pigments business

Functional Products

Expand environment-friendly products globally

DIC’s Market Position
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DOHDGLQJPDQXIDFWXUHURIRUJDQLFSLJPHQWVDQGDYDOXHGPDQXIDFWXUHURIHIIHFWSLJPHQWV LQFOXGLQJDOXPLQXPSLJPHQWV 

About BASF’s Colors & Effects Business%$6)¶V&RORUV (IIHFWVEXVLQHVVZKLFKLVEDVHGLQ(XURSHDQGKDVVLWHVDURXQGWKHZRUOGKDVHVWDEOLVKHGLWVHOIDVDSURPLQHQWJOREDOPDQXIDFWXUHURIKLJKSHUIRUPDQFHRUJDQLFSLJPHQWVHIIHFWSLJPHQWV LQFOXGLQJSHDUOHVFHQWSLJPHQWV DQGVSHFLDOW\LQRUJDQLF
SLJPHQWV7KHSURGXFWSRUWIROLRVJHRJUDSKLFSUHVHQFHDQGDSSOLFDWLRQVRIWKH&RORUV (IIHFWVEXVLQHVVDQG',&DUHKLJKO\FRPSOHPHQWDU\ZLWKOLWWOHRYHUODS

19̲ DIC Report 2020

Profile

A manufacturer of high-value-added products inthe areas of niche and specialty pigments
High-performance organic pigments■ Name: BASF Colors & Effects GmbH
■ Date of establishment: 2016
(Carved out of BASF’s pigments business into 18 companies)■ Location: Ludwigshafen am Rhein, Germany■ Representative: Alexander Haunschild■ Net sales: Approx. €1 billion(Year ended December 31, 2018)■ Consolidated EBITDA: Approx. €120 million(Year ended December 31, 2018)■ Number of employees: Approx. 2,600■ Manufacturing facilities: 11■ R&D laboratories: 4■ Description of business: Manufacture and sale of pigments
and related products■ End markets: Cosmetics, plastics, construction, automobiles,
printing, agriculture and others

DIC

Effect pigments (for cosmetics)

Specialty inorganic pigments

A global pigments production configuration focused on
Europe and North America

Europe6

North
America
4
Asia
1

BASF’s Colors & Effects business
Organic pigments
for displays

High-performanceorganic pigments

Metallic pigments

Effect pigments(for cosmetics)

High-purity ironoxide pigments

Specialty
inorganic pigments

Operations centered in
North America and Asia

Applications

Operations centered inEurope and North America

DIC

1

Little product overlap will maximize
the unique qualities of both

2

Highly complementary geographic presence
will ensure regional compatibility

3Highly complementary product portfolios will
yield synergies in target niche and specialty
pigments markets

BASF’s Colors &Effects business

Displays
Automobiles
Cosmetics
Specialty applications
Product portfolios

Printing

Narrow

Broad

Benefits of Acquisition
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7KH&RPSDQ\KDVFRPPLWWHGLWVHOIWRDFKLHYLQJVXVWDLQDEOHJURZWKIRULWVFRORUPDWHULDOVEXVLQHVVE\H[SDQGLQJLWVIXQFWLRQDOSLJPHQWVEXVLQHVVUHFRJQL]LQJWKLVDVFUXFLDOWREROVWHULQJLWVFRUSRUDWHYDOXH
1RWH7KH¿JXUHJLYHQIRUWKHFRVWRIWKLVDFTXLVLWLRQLVGHULYHGE\DGMXVWLQJWKHHQWHUSULVHYDOXHRIWKHWDUJHWEXVLQHVV ¼PLOOLRQ WRUHÀHFWFDVKDQGGHEWDVRI'HFHPEHU7KHDFWXDOFRVWPD\YDU\GHSHQGLQJRQactual netFDVKDQGGHEWDVZHOODVGLIIHUHQFHVLQZRUNLQJFDSLWDODPRQJRWKHUVDWFORVLQJ$GYLVRU\DQGRWKHUIHHVZLOOGHSHQGRQIHHVUHODWHGWRSURFHGXUHVWRGHWHUPLQHFRPSOLDQFHZLWKWKHDQWLWUXVWODZVRIWKH8QLWHG6WDWHVDQG(XURSHDVZHOODVRIRWKHUUHOHYDQWFRXQWULHVDQGWHUULWRULHV$FFRUGLQJO\VXFKH[SHQVHVDUHQRWLQGLFDWHG

DIC Report 2020 ̲20

Packaging & Graphic
3DFNDJLQJ0DWHULDOVWKDW%ULQJ
6DIHW\DQG3HDFHRI0LQG
3UHVLGHQW3DFNDJLQJ *UDSKLF%XVLQHVV*URXSSDGs Goals 12, 13 and 14

Masamichi Sota

Main Products
7KLVVHJPHQWLQFOXGHVQRWRQO\
SULQWLQJLQNVEXWDOVRDGKHVLYHVPDWHULDOVDQGRWKHUSURGXFWVDQG
VROXWLRQVIRUSDFNDJLQJDSSOLFDWLRQVWKHPDUNHWVIRUZKLFKFRQWLQXH
WRVHHUREXVWJURZWKLQHPHUJLQJ
HFRQRPLHVLQ$VLDDQGHOVHZKHUH

［Printing Materials］*UDYXUHLQNVÀH[RLQNVRIIVHWLQNVQHZVLQNVMHWLQNVFDQFRDWLQJVVHFXULW\LQNVSULQWLQJSODWHVSULQWLQJVXSSOLHV［Packaging Materials］
3RO\VW\UHQHFRH[WUXGHGPXOWLOD\HU¿OPVSDFNDJLQJDGKHVLYHVSegment Operating Results
Net Sales

Operating Income
and Operating Margin(Billions of yen)

434.7

71.1

73.3
0.1

68.7

FY2018Japan

19.9

FY2019The Americas
and Europe

Asia and
Oceania

FY2020 (Forecast)Eliminations

19.7

19.2

6.8

6.4

6.1

10.0

8.2

8.9

3.2

4.5

4.6

258.9

244.3

255.3

(Billions of yen)

116.8

114.7

120.3

437.7

416.4

FY2018FY2019Japan

The Americas
and Europe

FY2020 (Forecast)
Asia and
Oceania

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21̲ DIC Report 2020

Product News
Efforts to Develop Printing Inks, Adhesives and Films with a Reduced Environmental Impact,QWKHDUHDRISDFNDJLQJLQNVWKH',&*URXS¶VELRPDVVEDVHGSURGXFWVKDYHHDUQHGRI¿FLDOFHUWL¿FDWLRQ
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YHUVLRQRI',&5HSRUW

6DODGFRQWDLQHUZLWKHDV\SHHOVHDODQWILOPOLG

Business Strategies Under DIC111
7KH',&*URXSZLOOFRQFHQWUDWHUHVRXUFHVRQKLJKYDOXHDGGHGSURGXFWVLQWKHSURPLVLQJDUHDVRISDFNDJLQJVROXWLRQVDQGVSHFLDOW\LQNVZKLOHDFFHOHUDWLQJWKHJURZWKRIEXVLQHVVHVLQWKHÀRXULVKLQJPDUNHWIRUSDFNDJLQJPDWHULDOVWKURXJKSRUWIROLRH[SDQVLRQ,QVSHFLDOW\LQNVWKH*URXSZLOODOVRVHHNWRDFKLHYHKLJKSUR¿WDELOLW\WKURXJKIXUWKHUJOREDOPDQDJHPHQWLQWHJUDWLRQDQGWKHKRUL]RQWDOGHSOR\PHQWRIKLJKYDOXHDGGHGSURGXFWVValue Transformation

Publication inks

• Packaging solutions
Printing inks, adhesives, films, polystyrene• Specialty inks
Jet inks, security inks

Percentage of Net Sales(FY2018)

Percentage of Net Sales(FY2021)(Forecast)

Percentage of Net Sales(FY2025)(Target)

73%

76%

85%

Fiscal Year 2019 Highlights
1. Luminescence Sun Chemical Security Participates in Currency
Conference in Dubai/XPLQHVFHQFH6XQ&KHPLFDO6HFXULW\WKHVHFXULW\LQNVGLYLVLRQRI6XQ&KHPLFDOWRRNDGYDQWDJH
RIWKHRSSRUWXQLW\SURYLGHGE\LWVSDUWLFLSDWLRQLQWKH$SULO'XEDL&XUUHQF\&RQIHUHQFHWRODXQFKASPECTDQHZUDQJHRIPDFKLQHUHDGDEOHVHFXULW\LQNVIRUEDQNQRWHV6XLWDEOHIRUDQ\
FRXQWU\¶VFDVKF\FOHLQIUDVWUXFWXUHASPECTVHFXULW\LQNVKDYHGLVWLQFWLYHLQIUDUHGVLJQDWXUHVWKDWSHUPLWEURDGEDQGYHUL¿FDWLRQDFURVVDZLGHUDQJHRIWKHOLJKWVSHFWUXP\HWFDQDOVREHUHDGDQG
YHUL¿HGXVLQJFXUUHQWDXWKHQWLFDWLRQWHFKQRORJLHVIURPORZFRVWGHYLFHVZLWKOLPLWHGDXWRPDWLRQWRIDVWHUDQGELJJHUPLGPDUNHWGHVNWRSVROXWLRQVDQGKLJKVSHHGVRUWHUVXVHGDWFRPPHUFLDODQG
FHQWUDOEDQNV

6XQ&KHPLFDO6HFXULW\DOVRZRQWKHFRQIHUHQFH¶V([SHULHQFH$ZDUG

2. Sun Chemical Joins Europe’s CEFLEX Consortium,QILVFDO\HDU6XQ&KHPLFDOMRLQHG&()/(;DFROODERUDWLYH(XURSHDQFRQVRUWLXPRIFRPSDQLHVDQGDVVRFLDWLRQVLQWKHSDFNDJLQJLQGXVWU\WKHQDPHRIZKLFKLVDQDFURQ\PIRU&LUFXODU(FRQRP\IRU)OH[LEOH3DFNDJLQJ5HSUHVHQWLQJWKHHQWLUH(XURSHDQSDFNDJLQJYDOXHFKDLQIURPPDWHULDOVSURGXFHUVWRFRQYHUWHUVDQGSULQWHUVEUDQGRZQHUVUHWDLOHUVDQGVSHFLDOL]HGUHF\FOLQJFRPSDQLHVPHPEHUVRI&()/(;FXUUHQWO\QXPEHUPRUHWKDQ6XQ&KHPLFDOLVIXOO\FRPPLWWHG
WRVXSSRUWLQJWKH&()/(;YLVLRQRIHVWDEOLVKLQJDFRPSUHKHQVLYHVXVWDLQDELOLW\DQGFLUFXODUHFRQRP\URDGPDSIRUÀH[LEOHSDFNDJLQJE\7KHURDGPDSZLOOLQFOXGHZLGHO\UHFRJQL]HGGHVLJQJXLGHOLQHVDQGDUREXVWDSSURDFKWRPHDVXULQJGHPRQVWUDWLQJDQGFRPPXQLFDWLQJWKH
VLJQLILFDQWYDOXHIOH[LEOHSDFNDJLQJDGGVWRWKHFLUFXODUHFRQRP\&()/(;DOVRVXSSRUWVWKH
GHYHORSPHQWRIDFROOHFWLRQVRUWLQJDQGUHSURFHVVLQJLQIUDVWUXFWXUHIRUÀH[LEOHSDFNDJLQJDFURVV(XURSHE\

DIC Report 2020 ̲22

Color & Display&RORUDQG'LVSOD\0DWHULDOVWKDW
0DNH/LIH&RORUIXO
3UHVLGHQW&RORU 'LVSOD\%XVLQHVV*URXSSDGs Goals 3 and 13

Masami Hatao

Main Products
3URGXFWVLQWKLVVHJPHQWLQFOXGHDZLGH
YDULHW\RIPDWHULDOVLQGLVSHQVDEOHWRGLJLWDOGHYLFHVLQFOXGLQJ/&PDWHULDOVDQGRUJDQLFSLJPHQWVIRUFRORUILOWHUVDVZHOODVSLJPHQWVIRUFRVPHWLFVQDWXUDOFRORUDQWVDQGRWKHUPDWHULDOVWKDWDUH
VDIHDQGJHQWOHIRUXVHE\SHRSOH

［Color Materials］(IIHFWSLJPHQWVSLJPHQWVIRUFRORU¿OWHUVSLJPHQWVIRUFRVPHWLFVSLJPHQWVIRUSULQWLQJLQNVSLJPHQWVIRUFRDWLQJVDQGSODVWLFVKHDOWKIRRGV［Display Materials］
7KLQ¿OPWUDQVLVWRUOLTXLGFU\VWDO 7)7/& PDWHULDOVVXSHUWZLVWHGQHPDWLF
OLTXLGFU\VWDO 671/& PDWHULDOVSegment Operating Results
Net Sales(Billions of yen)

Operating Income
and Operating Margin

124.1

34.5

121.1

116.4

13.1

7.0

31.7

29.7

(Billions of yen) 15.0

10.8
7.4

4.8
99.2

95.8

101.4

7.9
5.7

6.0

FY2018FY2019Japan

Overseas-9.9

FY2020 (Forecast)Eliminations

FY2018FY2019Japan

FY2020 (Forecast)

Overseas

1RWH*UDSK¿JXUHVLQFOXGHLQWHUUHJLRQDOWUDQVDFWLRQVZLWKLQWKHVHJPHQW$FFRUGLQJO\WKHDJJUHJDWHVRIUHJLRQDOQHWVDOHVDQGRSHUDWLQJLQFRPH¿JXUHVIRUWKHVHJPHQWGLIIHUIURPWKH¿JXUHVSUHVHQWHGDERYH

23̲ DIC Report 2020

Product NewsDIC Group Natural Colorants Earn Certification Under COSMOS
7KH',&*URXS¶V6SLUXOLQDGHULYHGQDWXUDOEOXHFRORUDQWHDUQHGFHUWL¿FDWLRQXQGHUWKH&26026 &26PHWLF2UJDQLF
6WDQGDUG SURJUDPDXQL¿HG(XURSHDQVWDQGDUGIRURUJDQLFDQGQDWXUDOFRVPHWLFV2YHUVHDVWKH*URXSLQWURGXFHGD
QXPEHURILQQRYDWLYHSURGXFWVLQFOXGLQJSLJPHQWVIRUWXUIFRORUDQWVDQGEDOORRQSULQWLQJDQGQDWXUDOZD[GLVSHUVLRQV
IRUFRVPHWLFV,QWKHDUHDRI/&PDWHULDOVWKH*URXSFRQWLQXHGWRVKLSVDPSOHVRISRO\PHUVXVWDLQHGDOLJQPHQW 36$ /&VZKLFKERDVWRXWVWDQGLQJWUDQVSDUHQF\UHVSRQVHWLPHDQGVHQVLWLYLW\IRU.GLVSOD\V
1RWH)RUPRUHLQIRUPDWLRQSOHDVHVHHWKHVHFWLRQWLWOHG³1HZ7HFKQRORJ\'HYHORSPHQWDQG9DOXH&UHDWLRQ´LQWKHFRPSOHWHYHUVLRQRI',&5HSRUW
&RVPHWLFSURGXFWVHPSOR\LQJQDWXUDOEOXHFRORUDQWBusiness Strategies Under DIC111,QDGGLWLRQWRVHHNLQJWRHVWDEOLVKDOHDGLQJJOREDOSRVLWLRQLQWKHDUHDRIIXQFWLRQDOSLJPHQWVWKURXJK0 $VWKH',&*URXSZLOOWDNHVWHSVWRUHLQIRUFHLWVVXSSO\FRQ¿JXUDWLRQDQGHQWHUWKHSHUVRQDOFDUHPDUNHW,Q/&PDWHULDOVWKH*URXSZLOOIRFXVRQOHYHUDJLQJSDWHQWVWUDWHJLHVDQGRQDFFHOHUDWLQJHIIRUWVWRFXOWLYDWHPDUNHWVLQWKH35&E\GHYHORSLQJSURGXFWVIRUKLJKHQGWHOHYLVLRQV7KH*URXSZLOODOVRSURPRWHWKHGHYHORSPHQW
RITXDQWXPGRW 4' LQNVZKLFKKROGSURPLVHDVQH[WJHQHUDWLRQGLVSOD\PDWHULDOV
Value Transformation

Generalpurpose
pigments

Percentage of Net Sales(FY2018)

Percentage of Net Sales(FY2021)(Forecast)

Percentage of Net Sales(FY2025)(Target)

50%

58%

62%

• 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* Nonimpact printing
Natural colorants

Fiscal Year 2019 Highlights
1. DIC Collaborates with Warehouse TERRADA’s PIGMENT TOKYO in the Pigments Business,Q1RYHPEHU',&SDUWQHUHGZLWK3,*0(1772.<2DQDUWPDWHULDOVODERSHUDWHGE\VWRUDJHFRPSDQ\:DUHKRXVH7(55$'$WRSURYLGH',&SLJPHQWVIRUFRVPHWLFVWUDGLWLRQDOO\PDUNHWHGWRFRVPHWLFVPDQXIDFWXUHUVWRLQGLYLGXDOFRQVXPHUVZLWKDYLHZWRH[SDQGLQJWKHIRFXVRIPDUNHWLQJWRLQFOXGHDUWDSSOLFDWLRQV3,*0(1772.<2LVDFRPSUHKHQVLYHIDFLOLW\IRUFUHDWLYLW\IXQFWLRQLQJVLPXOWDQHRXVO\DVDQDUWPDWHULDOVODEIRUH[SORULQJ³H[SUHVVLRQLQFRORU
DQGmatière´ DVZHOODVDQDUWDFDGHP\PXVHXPDQGVWRUH6WDIIHGE\KLJKO\DFFRPSOLVKHGUHVHDUFKHUVLQWKHDUHDVRIDUWPDWHULDOVDQG
SLJPHQWVDUWLVWVDQGSURGXFHUVVNLOOHGDWEULQJLQJWRJHWKHUDUWDQGEXVLQHVV3,*0(17
72.<2IXQFWLRQVDVDQDWHOLHUWKDWH[WHQGVWHFKQLFDOVXSSRUWDQGSURMHFWSODQQLQJFRQVXOWDWLRQWRFRPSDQLHVLQ-DSDQDVZHOODVRYHUVHDV7KHFROODERUDWLRQEHWZHHQ',&DQG3,*0(1772.<2FHQWHUVRQWKHVDIHDQGJHQWOHINTENZAOLQHRIK\EULGSLJPHQWV²ZKLFKFRPELQHV86)RRGDQG'UXJ$GPLQLVWUDWLRQ)'$ 2FHUWLILHGRUJDQLFFRORUDQWVZLWKSHDUOHVFHQWHIIHFWSLJPHQWV²DQGLinablue®,D&26026DSSURYHGQDWXUDOEOXHFRORUDQWGHULYHGIURP',&6SLUXOLQD
7KH)UHQFKZRUGmatièreLVXVHGLQ-DSDQHVHLQWKHFRQWH[WRIDUWWRPHDQWKH³TXDOLWLHVRIPDWHULDOV´
7KH)'$LVDIHGHUDODJHQF\RIWKH86'HSDUWPHQWRI+HDOWK +XPDQ6HUYLFHVZKLFKVHUYHVHVVHQWLDOO\WKHVDPHUROHDV-DSDQ¶V0LQLVWU\RI+HDOWK/DERXUDQG:HOIDUH)'$DSSURYDOLVUHTXLUHGWRVHOOIRRG
SURGXFWVSKDUPDFHXWLFDOVFRVPHWLFVDQGDYDULHW\RIRWKHUSURGXFWVLQWKH8QLWHG6WDWHV

2. DIC Resolves to Acquire BASF’s Colors & Effects Business,Q$XJXVW',&UHVROYHGWRDFTXLUHWKHVKDUHVDQGDVVHWVRIWKH&RORUV (IIHFWVEXVLQHVVRI*HUPDQ\¶V%$6)(XURSH¶VODUJHVWFKHPLFDOVPDQXIDFWXUHU )RUPRUH
LQIRUPDWLRQSOHDVHVHHSDJH

DIC Report 2020 ̲24

Functional Products)XQFWLRQDO3URGXFWVWKDW$GG&RPIRUW
3UHVLGHQW)XQFWLRQDO3URGXFWV%XVLQHVV*URXSSDGs Goals 6, 12 and 13

Kazuo Hatakenaka

Main Products［Performance Materials］

7KLVVHJPHQWSURYLGHVFRDWLQJDQG
FRPSRVLWHPDWHULDOVZLWKGLYHUVH
IXQFWLRQVWKDWDGGUHVVHQYLURQPHQWDO
LVVXHVDQGDUHXVHGZLGHO\LQ
VWDWHRIWKHDUWHOHFWURQLFVSURGXFWV6\QWKHWLFUHVLQVIRULQNVDQGFRDWLQJVHOHFWURQLFVSURGXFWVPROGHGSODVWLFSURGXFWVDQGDGKHVLYHV
SRO\HVWHUUHVLQVHSR[\UHVLQVSRO\XUHWKDQHUHVLQVDFU\OLFUHVLQVSODVWLFL]HUV ÀXRURFKHPLFDOVSDSHUPDNLQJFKHPLFDOVPHWDOFDUER[\ODWHVDON\OSKHQROVVXOSKXUFKHPLFDOV OXEULFDQWDGGLWLYHV［Composite Materials］
3RO\SKHQ\OHQHVXO¿GH 336 FRPSRXQGVSODVWLFFRORUDQWVLQWHULRUKRXVLQJSURGXFWVSODVWLFSDOOHWVFRQWDLQHUVLQGXVWULDODGKHVLYHWDSHVKROORZ¿EHUPHPEUDQHPRGXOHVVKHHWPROGLQJFRPSRXQGV 60&V GHFRUDWLYHERDUGV

Segment Operating Results
Net Sales(Billions of yen)

Operating Income
and Operating Margin

282.1
199.3

208.3

100.4

279.4

268.6

Japan

20.8

21.4

19.2

205.9

91.9

FY2018(Billions of yen)

95.2

FY2019-21.7

Overseas

Eliminations

FY2020 (Forecast)

14.0

11.6

12.9

6.7

7.5

8.5
0.1

FY2018FY2019Japan

Overseas

FY2020 (Forecast)Eliminations

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25̲ DIC Report 2020

Product NewsDIC Develops 100% Biomass-Derived Polyester Plasticizer,Q¿VFDO\HDU',&DQQRXQFHGWKDWLWKDVGHYHORSHGDQHZSRO\HVWHUSODVWLFL]HUGHULYHGHQWLUHO\IURPELRPDVVUHVRXUFHVWKDWKDV
HDUQHGWKH³%LRPDVV´%LRPDVV0DUNFHUWLI\LQJWKDWLWLVPDGHHQWLUHO\ZLWKELRPDVVEHFRPLQJWKH¿UVWSODVWLFL]HUWREHJUDQWHGWKLVFHUWL¿FDWLRQ7KH',&*URXSUHDOL]HGFRPPHUFLDOSURGXFWLRQRILQQRYDWLYHV\QWKHWLFUHVLQVIRUHOHFWULFDODQGHOHFWURQLFVPDWHULDOVZLWKLQRQO\RQH\HDURIGHYHORSLQJWKHVHUHVLQVXVLQJ$,DVZHOODVODXQFKHGHSR[\UHVLQ±FXULQJDJHQWVZLWKVXSHULRUGLHOHFWULF
SURSHUWLHVIRUXVHDVVPDUWSKRQHEDVHVWDWLRQVWKLQDGKHVLYHWDSHVZLWKVXSHULRUDGKHVLYHQHVVDQGERQGDELOLW\IRUVPDUWSKRQHVDQG
YDULRXVW\SHVRIFRORUDQWVIRUHQJLQHHULQJSODVWLFVIRUXVHLQDXWRPRELOHVWKDWOHYHUDJHFDUERQEODFNXOWUDKLJKGLVSHUVLRQWHFKQRORJLHVWRGHOLYHURXWVWDQGLQJVXUIDFHVPRRWKQHVVDQGDKLJKOHYHORIMHWQHVVIRUPROGHGFRPSRQHQWV
1RWH)RUPRUHLQIRUPDWLRQSOHDVHVHHWKHVHFWLRQWLWOHG³1HZ7HFKQRORJ\'HYHORSPHQWDQG9DOXH&UHDWLRQ´LQWKHFRPSOHWHYHUVLRQRI',&5HSRUW3ODVWLFFRQWDLQHUVPDGHZLWK
ELRPDVVGHULYHGSRO\HVWHUSODVWLFL]HUBusiness Strategies Under DIC111
7KH',&*URXSZLOOLQYHVWDFWLYHO\LQSURGXFWVWKDWDUHQRWRQO\HQYLURQPHQWIULHQGO\EXWDOVRKDYHDSRVLWLYHLPSDFWRQPDUNHWVDQGVRFLHW\DQG
H[SDQGUHVLQSURGXFWLRQEDVHVLQ$VLD$VZHOOWKH*URXSZLOOSURYLGHKLJKO\SUR¿WDEOHSURGXFWVWKDWPHHWVRSKLVWLFDWHGQHHGVLQQLFKHPDUNHWV
LQWURGXFHQH[WJHQHUDWLRQUHVLQVIRURSWLFDODQGHOHFWURQLFVDSSOLFDWLRQVH[SDQGVDOHVRILQGXVWULDODGKHVLYHWDSHVIRUPRELOHDQGDXWRPRWLYHDSSOLFDWLRQVDQGPDNHDIXOOÀHGJHGHQWU\LQWRWKHPDUNHWIRUODUJHVFDOHKROORZ¿EHUPHPEUDQHPRGXOHVValue Transformation
Generalprocessed
products
Solvent-based
products

Percentage of Net Sales(FY2018)

Percentage of Net Sales(FY2021)(Forecast)

Percentage of Net Sales(FY2025)(Target)

59%

63%

75%

• 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

Fiscal Year 2019 Highlights
1. DIC Acquires Mid-Tier Coating Resins Manufacturer in India,Q$SULO',&DFTXLUHGPLGWLHU,QGLDQFRDWLQJUHVLQVPDQXIDFWXUHU,GHDO&KHPL3ODVW
3YW/WGZKLFKSURGXFHVDYDULHW\RIV\QWKHWLFUHVLQVIRUXVHLQDPRQJRWKHUVDXWRPRWLYHILQLVKLQJVFRLOVDQGZRRGFRDWLQJV+DYLQJGHWHUPLQHGWKDWIXVLQJLWVDELOLW\WRGHYHORSKLJKHQGUHVLQVZLWK,GHDO&KHPL3ODVW¶VNQRZKRZDQGVXSSO\FKDLQLQ,QGLDZRXOGVZLIWO\HOHYDWHLWVSRVLWLRQLQWKH,QGLDQPDUNHW',&UHVROYHGWRPDNHWKLVDFTXLVLWLRQ',&VHHV,QGLDDVDQLPSRUWDQWDUHDIRUDFFHOHUDWLQJWKHH[SDQVLRQRILWVJOREDORSHUDWLRQVDQGZLOOOHYHUDJH,GHDO&KHPL3ODVW¶VPDUNHWSRVLWLRQWRSURPRWHMRLQWHIIRUWVZLWK*URXSFRPSDQLHVLQQHLJKERULQJFRXQWULHVWRIXUWKHUEURDGHQLWVUHJLRQDOEXVLQHVVVFDOH

2. DIC Boosts Production Capacity for Large Degassing Modules Used for Water Treatment by 1.5 Times,Q¿VFDO\HDU',&UHLQIRUFHGSURGXFWLRQIDFLOLWLHVDW',&*URXSFRPSDQ\',&.DNR,QF¶V,FKLKDUD3ODQWWRH[SDQGLWVSURGXFWLRQFDSDFLW\IRUODUJHGHJDVVLQJPRGXOHV²XVHGIRUZDWHUWUHDWPHQWDPRQJRWKHUV²LQWKHSEPAREL®VHULHVRIKROORZ¿EHUPHPEUDQHPRGXOHVIRUFRQWUROOLQJÀXLGGHJDVL¿FDWLRQ
DQGDHUDWLRQ:LWKWKHVWDUWRIRSHUDWLRQVRQDQHZSURGXFWLRQOLQHDWWKHSODQW',&¶VRYHUDOOSURGXFWLRQFDSDFLW\IRUWKHVHPRGXOHVLQFUHDVHGE\WLPHV',&¶VODUJHGHJDVVLQJPRGXOHVZKLFKDUHXVHGIRUUHPRYLQJGLVVROYHGJDVHVVXFKDVQLWURJHQDQGR[\JHQIURPZDWHUDUHLQFKHV FHQWLPHWHUV 
RUPRUHLQGLDPHWHU3DVVLQJZDWHUWKURXJKDPHPEUDQHRIEXQGOHGKROORZILEHUVUHPRYHVGLVVROYHGLPSXULWLHVWKHUHE\LQFUHDVLQJWKHSXULW\RIWKHZDWHU3ULQFLSDODSSOLFDWLRQVLQFOXGHXOWUDSXUHZDWHUSURGXFWLRQV\VWHPVXVHGLQWKHIDEULFDWLRQRIVHPLFRQGXFWRUV/&'VDQG
HOHFWURQLFVFRPSRQHQWV',&DOVRSURYLGHVKROORZILEHUPHPEUDQHVWRDGGR[\JHQWRWKHEORRGLQH[WUDFRUSRUHDOPHPEUDQHR[\JHQDWLRQ (&02 ZKLFKLVFXUUHQWO\EHLQJXVHGZRUOGZLGHWRWUHDWFULWLFDOO\LOO
SDWLHQWVZLWKDFXWHUHVSLUDWRU\GLVWUHVVV\QGURPH $5'6 DVDUHVXOWRIWKH&29,'SDQGHPLF
',&ZLOOFRQWLQXHGRLQJLWVEHVWWRHQKDQFHSURGXFWLRQRILWVKROORZILEHUPHPEUDQHVWRKHOSHQVXUHDVWHDG\VXSSO\RILQGLVSHQVDEOHPHGLFDOHTXLSPHQWDIC Report 2020 ̲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.

Healthcare
SDGs Goal 3

Thermoresponsive Cell Cultureware that Facilitates the Harvest of
Cells Without Enzyme Treatment or Damage (Cepallet ®)® cell cultureware
細胞培養容器「 Cepallet® 」
Cepallet

Providing Novel Cell Cultureware that Enhances Cell Detachment
Simply by Lowering the Temperature, Thereby SigniÀcantly
Shortening the Harvest Process
Value Creation

Development of revolutionary cell cultureware that minimizes damage to iPS and ES cells during harvest

Reduced survival rates for cultured cells owing to damage from enzyme treatment and scraping
Research in induced pluripotent stem (iPS) and embryonic stem (ES)FHOOVZKLFKKROGSURPLVHLQVXFK¿HOGVDVUHJHQHUDWLYHPHGLFLQHDQGGUXJ
discovery, continues to gain momentum worldwide. Demand for the culture ofhigh-quality cells for use in research is driving the need for sophisticated iPS
and ES cell culture processes.
Conventional cell culturing begins with the attachment of adherent cells to thesurface of cultureware that has been coated with an extracellular matrix.

A culture medium provides nutrients necessary for cell proliferation. To
harvest the cultured cells, it is necessary to use an enzyme treatment
to detach the cells and then to employ a scraper to lift them from thecultureware. However, enzyme treatment results in some cells weakened,
while scraping causes physical stress, reducing survival rates and impeding
HI¿FLHQWKDUYHVW7KHVHLVVXHVKDYHSRVHGVLJQL¿FDQWFKDOOHQJHVWRHQVXULQJthe quality of cultured cells.

Development of the revolutionary Cepallet ® series of thermoresponsive cell cultureware that enhances cell detachment
In fiscal year 2018, DIC succeeded in developing the Cepallet ® series ofrevolutionary cell cultureware that facilitates harvest without the use of
enzymes or a scraper. This greatly simplifies the process, increasing theHI¿FLHQF\RIKDUYHVWThe surface of DIC’s newly developed cell cultureware is coated with aproprietary thermoresponsive polymer. Replacing the 37ºC culture medium
with fresh and cold (below room temperature) medium after culturing

27̲ DIC Report 2020encourages cells to detach gently from the cultreware (thermoresponsive
release), thereby minimizing damage during harvest. Because
thermoresponsive release eliminates the need for scraping, the Cepallet ®
series is suited for automated cell culture systems. Going forward, Cepallet ®
FHOOFXOWXUHZDUHLVWKXVH[SHFWHGWRFRQWULEXWHWRWKHPRUHHI¿FLHQWFXOWXULQJRI
higher-quality cells in the research laboratories of pharmaceutical companies,
universities and public research organizations.

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 112 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

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

Culture temperature (37°C )Thermoresponsive
Release with Cepallet ®

Hydrophobic (Cells adhere)
A Distinctively
DIC Response

Lower post-culture temperature

Replacement withcold medium

Hydrophilic (Cells do not adhere)

Capitalizing on proprietary polymer technologies to develop high-performance equipment for culturing cells in laboratories

Leveraging DIC know-how to address needs for improvement of basic laboratory research
DIC embarked on the development of Cepallet ® in 2013, the year Japan
introduced a new national revitalization plan and a strategic priority of which is toadvance regenerative medicine. Recognizing the existence of both market needs
and research seeds in this area that would allow DIC to capitalize on its expertiseas a chemicals manufacturer, sales and R&D departments worked together togather information, visiting pharmaceutical companies, universities and researchorganizations, among others. Seeing a need for industrial quality control for cell
culturing in laboratories conducting research related to regenerative medicine
and drug discovery, they found potential to leverage DIC’s specialized highperformance polymer design technologies and industrial know-how to develop
high-value-added products for use in this area. This led to the formation of a
project team made up of R&D and technical departments.

A thermoresponsive polymer coating and the debut of the Cepallet ® series

KEY PEOPLE from DIC

and expertise, the team succeeded in commercializing a new thermoresponsive polymer
coating. This achievement led to the development of the Cepallet ® series of cultureware
which feature surface that has been coated with this proprietary polymer using nanolevel
coating technology. This eliminates the need for enzyme treatment and scraping,minimizing damage to cultured cells and dramatically improving the harvest process.
Thermoresponsive Detachment of Activated Macrophages*1 (THP-1 cells)
Harvest Rate for Macrophages

Replacement withcold medium

100
90
80

CulturePipetting

Cell culture conditions
Treated with Phorbol 12-myristate 13-acetate (PMA) (50 ng/ml)
Culture medium: Roswell Park Memorial Institute (RPMI) 1640,
10% fetal bovine serum (FBS), Gentamicin

With thermoresponsive detachment, activated macrophages detach gently from the surface.
Moreover, the harvest rate is significantly higher than when treatment with trypsin*2 is used.

Harvest rate (%)

A detailed analysis of cell culture processes prompted the team to focus their efforts on
the structural design of the polymer used to coat the surface. What functional features
were needed? What did the polymer need to do? Team members sifted through DIC’s
vast accumulation of basic research data to determine a course of action for designinga new polymer. “In a process of trial and error, we narrowed the focus of our research tothermoresponsive polymers,” explains one member of the team. “Damage to cells during
harvest from cultureware is caused by the use of enzymes to detach the cells and ascraper to lift them from the surface,” he continues. “We realized that if we could develop a
polymer the adhesive properties of which would change according to temperature, it would
EULQJXVVLJQL¿FDQWO\FORVHUWRFRPPHUFLDOL]DWLRQ´7HFKQLFDODQG5 'GHSDUWPHQWVWKXV
commenced work toward realizing something that originally seemed impractical.
“Setting the temperatures for culture and detachment at, respectively, the temperature atwhich cells can be cultivated (37°C) and the temperature at which they can be harvested(below room temperature), thereby designing a polymer with adhesive properties that
could be controlled within that range to encourage detachment, was the critical challenge
we faced,” recalls the leader of the project. By capitalizing on accumulated technologies

70
60
50
40
30
20
10
0

Thermoresponsive Trypsin
detachment
treatment(W-type)*1 A macrophage is a type of white blood cell of the immune system.
*2 Trypsin is an enzyme that breaks down proteins.

We are entering a new era of personalized healthcare, in which order-made treatments will be mainstream.

Progress in the area of regenerative medicine has ushered in an era of personalized healthcare, in which treatments are order-made, that is, tailored to the individual’s unique cellular and genetic traits.
$NH\IRFXVIRU',&WRGD\LVSURYLGLQJEUHDNWKURXJKSURGXFWVLQWKHKHDOWKFDUH¿HOGE\LQWHJUDWLQJH[SHUWLVHDFFXPXODWHGLQVXFKDUHDVDVSKDUPDFHXWLFDOVDJULFKHPLFDOVDQGKHDOWKIRRGVZLWKLQGXVWULDO
technologies cultivated in the development and production of polymers. Cepallet ®LVWKH¿UVWVXFKSURGXFWWRUHDFKFRPPHUFLDOL]DWLRQ*RLQJIRUZDUGZHZLOOFDSLWDOL]HRQWKLVJURXQGEUHDNLQJSURGXFWWR
SURPRWHDZLGHUXQGHUVWDQGLQJRI',&¶VGHYHORSPHQWFDSDELOLWLHVDQGWRGHHSHQFROODERUDWLRQZLWKSHRSOHLQYDULRXV¿HOGVZLWKWKHDLPRIDGGLQJDQHZGLPHQVLRQWRWKLVH[FLWLQJPDUNHW(From left)

Taro Ichimoto
Project Manager, H-2 Project, Health Care Business Unit, New Business Development Headquarters, DIC Corporation Yoshinobu Sakurai
Manager, H-2 Project, Health Care Business Unit, New Business Development Headquarters, DIC Corporation Naoto Sakurai
H-2 Project, Health Care Business Unit, New Business Development Headquarters, DIC Corporation Ayako Isshiki
Manager, Health Care Products Business Development Group, Color Material Products Division, DIC Corporation Satoko Mimura
Health Care Products Business Development Group, Color Material Products Division, DIC Corporation Dongkyu Son
Manager, Health Care Products Business Development Group, Color Material Products Division, DIC Corporation Hajime Kaneko
Group Manager, Health Care Products Business Development Group, Color Material Products Division, DIC Corporation Hiroyasu Asakura
Product Manager, Health Care Foods Product Group, Color Material Products Division, DIC Corporation

DIC Report 2020 ̲28

Packaging & Graphic
SDGs Goals 3, 9, 12 and 13

Fast-Curing Solvent-Free Adhesive
DUALAM™

DUALAM™: Inaugurating a New Era in Solvent-Free
Lamination that Will Revolutionize the World of Packaging
Value Creation

Reduced emissions of VOCs and CO2 attributable to lamination

Issues with conventional solvent-free adhesives, which boast a low environmental impact but have limited applications
The fabrication process for multilayer packaging ﬁlms—which involves laminating
two or three layers of film together, printing artwork on the reverse side of the
top layer, coating to impart moisture, light, gas and other barrier properties, andsealing—has come into widespread use worldwide. The common approach tolamination is to coat the surface of one layer with an adhesive substance dissolved
in solvent and then pressure bond it to another layer after thermally evaporating
the adhesive’s solvent component. Nonetheless, the use of solvent-based
adhesives is not without problems, notably negative environmental impacts suchas emissions of pollution-causing volatile organic compounds (VOCs) and CO2,
the latter caused by the burning of fossil fuels.
Solvent-free adhesives are also popular, but present issues such as poor
designability after lamination and incompatibility with continuous lamination—key
to high productivity—due to slow curing speeds, which limits possible packaging
applications. DIC recognized that resolving such issues would both facilitate
the expansion of applications and help reduce the environmental impact of the
packaging industry.

Development of the versatile fast-curing solvent-free adhesive DUALAM™
In 2015, DIC created a project aimed at surmounting the issues associated with solventfree adhesives. Project researchers hit on the idea of coating the main agent and curing
agent on the ﬁlm surface separately, rather than the conventional approach of mixing the twocomponent agents of the adhesive together prior to laminating, and began development of
a new adhesive. Through trial and error with various component combinations and coating
amounts, in 2019 the project succeeded in developing DUALAM™, an innovative solvent-freeadhesive boasting a curing speed several times higher than existing offerings.
Partnering with a leading laminating machine manufacturer, DIC also developed a dedicatedsupply unit for DUALAM™, which was launched as a lamination system that can be retroﬁtted
onto existing laminators.

DUALAM™ enjoys a number of key performance advantages. These include facilitating
the production of previously impossible two-layer laminates and the continuous processingof laminated structures with three or more layers; rapid curing, which shortens aging time; alonger adhesive pot life (the length of time an adhesive remains processable); and signiﬁcantly
improved designability. Lamination using DUALAM™ and existing machines retroﬁtted with
the new lamination system also substantially reduces emissions of VOCs and CO2 comparedwith lamination using solvent-based adhesives and the same equipment.

DUALAM™
Lamination System

Laminator

29̲ DIC Report 2020

Retroﬁttable DUALAM™ supply unit

Benefit of retrofitting 400 solvent-based
adhesive laminating machines withretrofittable DUALAM™ supply units:

Annual CO2 emissions
reduction after five years: Approx.

80,000tonnesEquivalent to annual CO2 emissions from approximately 50,000 private-use passenger vehicles (Source: Ministry of Land, Infrastructure, Transport and Tourism data for 2017)
Calculation
CO2 emissions per unit for solvent-based adhesive laminators (approximately 200 tonnes) × Number of units retrofitted with DUALAM™ supply units (400)(Reference: Approximately 6,000 solvent-based adhesive lamination systems are currently in operation around the world (DIC estimate).)A Distinctively
DIC Response

Providing packaging solutions that contribute to sustainability for the global environment

An innovative solvent-free adhesive that contributes to reduced air pollution and improved work environments
In 2015, a DIC adhesives marketing manager in the PRC noted a slowdown in sales of
VROYHQWIUHHDGKHVLYHVIRU¿OPODPLQDWLRQWKHDGRSWLRQRIZKLFKKDGULVHQVKDUSO\DJDLQVW
a backdrop of tighter environmental regulations. Examining contributing factors, hedetermined that the principal causes were that designability after processing was inferior to¿OPODPLQDWHGZLWKVROYHQWEDVHGDGKHVLYHVDQGFXULQJZDVWRRVORZWRVXSSRUWFRQWLQXRXV
lamination. This, together with rising pressure to reduce environmental impact, convinced
him that if performance could be improved then demand for environment-friendly solventfree adhesives would increase and so he proposed the creation of a dedicated project.

Refusing to be constrained by the conventional notion of premixing theadhesive’s components, the project’s technical team experimented with various
approaches, arriving at the idea of coating the two components of the adhesive
VHSDUDWHO\RQWRHDFK¿OPOD\HUWREHERQGHGDQGLQLWLDWLQJFXULQJRQO\DIWHUWKH
layers come together. However, a number of obstacles to the realization of a viable
product were still ahead.

The quest to control curing speed and Ànd the optimum combination of adhesive components
Features demanded of new adhesives include a softness that makes coating easy,
curability that does not impair designability and a curing speed compatible with continuous
ODPLQDWLRQ0RUHRYHUWKHVHIHDWXUHVPXVWEHGHPRQVWUDWHGLQDWKLQ¿OPZHLJKLQJRQO\a few grams per square meter. The technical team marshaled accumulated expertise,
WHVWLQJDZLGHUDQJHRIQHZPDWHULDOVLQDELGWR¿QGWKHRSWLPDOFRPELQDWLRQRIDGKHVLYH
components. It proved particularly difficult to control curing speed and adjusting thedelicate composition was tricky, but these efforts eventually yielded DUALAM™, a solventfree adhesive that cures several times faster than comparable conventional adhesives.

Value Provided

The challenge did not end there. Developing a supply unit that made it possible touse DUALAM™ with existing laminating machines was crucial. DIC partnered witha leading laminating machine manufacturer to perfect a unit that thinly and evenly
FRDWVWKHQHZDGKHVLYHRQWR¿OPVXUIDFHV:LWKWKLVDFKLHYHPHQWWKH&RPSDQ\
was finally ready to launch DUALAM™, thereby fulfilling its pledge of providing
packaging solutions that contribute to sustainability for the global environment.

Competitiveness

Good

Superior production
efﬁciency

DUALAM TM

Outstanding applicability

Solvent-based adhesives

Adhesive costs

Utility costs

Reduction of VOCs

Number of laminatedstructure layers

Appearance

Applicability Environmentalload reduction

Productiveness

KEY PEOPLE from DIC

Laminate strength

Continuous
processability

Aging time

Short delivery time

Poor

Inventory

Conventional solvent-free adhesives

Exceptional environmental
performance
Cost advantage

Cost advantage

This is worthwhile for DIC precisely because it’s something no other company is doing.

When I was working in the PRC, I recognized that there were issues with solvent-free
DGKHVLYHVIRU¿OPODPLQDWLRQDQGSURSRVHGWKDWZHGHYHORSDQHZDGKHVLYH,QSDUWLFXODUWKHODPLQDWLRQRIVWUXFWXUHVZLWKWKUHHRUPRUHOD\HUVZDVH[WUHPHO\LQHI¿FLHQWEXWWKHUH
ZHUHQRFRPSDQLHVORRNLQJWR¿[WKLVSUREOHP3UHFLVHO\IRUWKLVUHDVRQ,WKRXJKWLWZDV
a worthwhile challenge for DIC to take on. Solvent-free adhesives are essential to reduce
WKHHQYLURQPHQWDOLPSDFWRISDFNDJLQJ¿OPSURGXFWLRQVRZHZHUHFRQ¿GHQWWKDWGHPDQG
would increase if applications could be expanded. Many breakthroughs were needed torealize a viable product, but thanks to the assistance of many people we succeeded inbringing DUALAMLQWREHLQJ,WZDVGH¿QLWHO\DSURXGPRPHQW
(From left)

Chouichi Takada
Manager, Adhesives Technical Group 1, Adhesives Technical Division, DIC Corporation Koji Akita
Project Manager, P-2 Project, Next-Generation Packaging Business Unit, New Business Development Headquarters, DIC Corporation Susumu NishimuraManager, Packaging & Graphic Business Development Group, Packaging & Graphic Business Group, DIC Corporation

DIC Report 2020 ̲30

Sun Chemical’s Activities
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.

As the world shifts to become more environmentally conscientious, consumer
packaged goods companies and their converter partners are constantly working tomeet consumer demands. Studies show that consumers prefer sustainable packaging
over packaging that is not eco-friendly.
Meanwhile, some countries and world organizations are taking it upon themselves to make the world
more sustainable. The United Nations (UN), for instance, introduced its initiative, Transforming our World:the 2030 Agenda for Sustainable Development, a plan that highlights 17 UN goals for decreasing thecarbon footprint.
Recognizing these marketplace and regulatory trends, many brands have explored ways to integrate
more sustainable solutions into their packaging. One option has been the development of biorenewable
inks based on renewable natural resources. These biorenewable inks can be derived from plant materials,
including gums, resins, waxes, solvents, oils and other polymer building blocks, according to the National
Association of Printing Ink Manufacturers (NAPIM).
SocialImperative

Sun Chemical s
Response

Sun Chemical has aligned several of its sustainability goals with those of the UN’s agenda for sustainable
development to drive sustainability in the packaging industry. Furthermore, Sun Chemical is supporting the goalof lowering CO 2 emissions by developing biorenewable inks that will help to reduce the carbon footprint of theprinting industry.
By partnering with HAVI, a global company that innovates, optimizes, sources and manages the packaging
and supply chains of leading foodservice brands, Sun Chemical has introduced SunVisto ® AquaGreen to themarket. The line of water-based inks, formulated with significantly higher levels of biorenewable resin content
compared to other previous market offerings, offers a natural, cleaner, green option for food packaging.
Sun Chemical’s SunVisto® AquaGreen biorenewable inks have been certified and specified by HAVI to be arecommended natural-based ink solution, ensuring that foodservice brands and manufacturers receive truly
renewable packaging ink.
HAVI’s extensive global network and relationships with package developers on all continents means that Sun
Chemical’s natural-based inks could be used by any of HAVI’s global partners anywhere in the world.
SunVisto ® AquaGreen inks can be blended with varnishes and standard water-based pigment dispersions,and do not compromise end-use or on-press performance. They also offer outstanding print fidelity andink resolubility on press, quick setting for in-line converting and high levels of resistance properties to rub,abrasion, water and grease.
The aim of Sun Chemical’s sustainability initiatives relating to raw materials used and its manufacturing
processes is to increase the plant-based biorenewable content (BRC) and/or recycled content in Sun Chemical
products. Sun Chemical is moving on from using fossil-based raw materials, which are limited resources, toutilizing sustainable plant-based raw materials.

31̲ DIC Report 2020

Striving to foster a circular economy, McDonald’s teams up with partners like Sun Chemical and HAVI totransition all of its packaging to be 100% renewable, recycled or certified by 2025. Updates include packaging topopular menu items like hamburger clam shells, and commonly used bagging such as the small McDonald’s bag.
Sun Chemical’s SunVisto ® AquaGreen water-based flexo inks are an example of a biorenewable ink being
used on McDonald’s packaging as displayed on various samples that will be shown at Interpack 2020 in
Düsseldorf, Germany.
In addition to SunVisto ® AquaGreen, both Sun Chemical and DIC will exhibit a full range of sustainableproducts with the goal of showing converters and brand owners the Power of Sustainable Packaging. This
theme will show the market the commitment of Sun Chemical and DIC to sustainable product development
across all packaging markets and applications.

SunVisto® AquaGreen is being used to create more sustainable fast food packaging.

VOICE We are building a comprehensive support system to achieve sustainable goals for customers.
Sun Chemical understands that today’s environment requires more than just change—it demands
transformation. At Sun Chemical, we are passionate about sustainability within the industry and will continue
to develop our products and market approach to drive transformation. We’re teaming up with like-minded,environmentally friendly brands to develop many other solutions designed to reduce global CO 2 emissions
and increase the use of biorenewable and recyclable raw materials throughout the entire supply chain.
Vice President, Global Marketing, Inks & Global Communications, Sun Chemical Corporation

Penny Holland

DIC Report 2020 ̲32

DIC Asia Pacific’s Activities
7KH$VLD±3DFL¿FUHJLRQLVNQRZQIRULWVULFKFXOWXUDOGLYHUVLW\YDU\LQJEXVLQHVVFRPSOH[LW\\RXQJWHFKVDYY\ZRUNIRUFHDQGWKHDEXQGDQFH
of fast-growing business opportunities. This is our business domain. As we have seen in COVID-19, the use of digital tools is eminent as
we see the emergence of a “new normal.” Businesses that adapt fast to the new digitalization movement will be successful as aspiring
companies reposition themselves to leverage these business opportunities. Change is the only constant in this dynamic millennium economy.

The Drive Toward the “3Ss”)RUWXQDWHO\',&$VLD3DFL¿FHPEUDFHGGLJLWDOWUDQVIRUPDWLRQHDUO\RQ8VLQJLQQRYDWLYHGLJLWDOWRROVZKLOHOHYHUDJLQJDFWLYLWLHVDFURVVDOOIURQWV
the region was able to drive a total solutions-based approach supporting our customers (as a group) in the Value Transformation pillar.
,QOLQHZLWK',&WKH$VLD±3DFL¿FUHJLRQZLOODFFHOHUDWHLWVGULYHWRIRFXVRQWKHFRQFHSWRIWKH³3Ss,” i.e., Support, Specializationand Sustainability. This entails the drive toward Support and strengthening of the functional and specialist organization. We will introduce
more structured e-learning initiatives to further build competencies, while enhancing and effectively growing DIC’s human capital base. To
complement organic growth potential, the region will establish a professional and quick response team to support the merger and acquisition
activities in the region.
Through Specialization, and working effectively, DIC Asia Pacific envelopes the “One DIC” concept by creating a functional network
spanning the region to resolve issues and fostering a border–transcendent collaborative mindset. This approach drives Value Transformation
DQG1HZ3LOODU&UHDWLRQLQLWLDWLYHVDVH[SODLQHGLQ',&',&$VLD3DFL¿FLVFRPPLWWHGWRDFWLYHO\VXSSRUWLQJFXVWRPHUV’ value creation.
The product specialist team is accelerating support through the introduction of “Tool Box/Kits.” Conversely, on the marketing front, theregional managers are working with the local sales team to drive coordinated and targeted sales campaigns while capitalizing on data
analytics for a more focused sales approach.
On the Sustainability front, the region is focused on driving these programs targeted at the three major stakeholders, i.e., customers,
EXVLQHVVSDUWQHUVDQGRXUYDOXHGHPSOR\HHV',&$VLD3DFL¿FKDVHVWDEOLVKHGDVXVWDLQDEOHRUJDQL]DWLRQE\SURDFWLYHO\LQWURGXFLQJ
sustainable products coupled with a sustainable procurement system through a
FHQWUDOL]HGUDZPDWHULDOVSXUFKDVLQJUHJLPH0RUHRYHU',&$VLD3DFL¿FLVLQWURGXFLQJ
policies and training programs to improve skills necessary for a sustainable working
environment balancing work and life in a new digital economy.
',&$VLD3DFL¿FIRFXVHVRQFULWLFDODFWLYLWLHVDQGFRQWLQXHVWRUROORXWSODQVWRHQKDQFH
DQGGULYHVXVWDLQDEOHGHYHORSPHQWLQWKH$VLD±3DFL¿FUHJLRQ7KHVHZLOOEHGRQHWKURXJKstrong and active collaboration with Group resources to drive value to all our customers
and society under the “One DIC” banner.
DIC Asia Pacific Pte Ltd office

The Drive Toward the “3Ss”
SupportSpecialization

Sustainability

Strengthen Specialized Expertise

Capitalize on Core Expertise

Focus on Three Major Stakeholders- Learning and development initiatives- Grow human capital and maximize
talent bench strength- Establish talented task force forstrategic projects and supporting
M&A activities- Talent scouting and grooming- Introduce a collaborative regional framework- Instill a, “One DIC” mindset- Create creative and innovative ways
of working to create and enhancevalue- Achieve results by collaboration
to gain synergies- Value creation with customers,
business partners and our
employees via innovative process
and delivery of services- Develop products that are sociallyacceptable and valued- Promote work–life balance- Diversity and transparency- Talent development

Supported by functional accountability and responsibility

33̲ DIC Report 2020

DIC (China)’s Activities
In the PRC, the DIC Group operates some 30 companies employing more than 2,000 employees. These companies are responsibly
GHOLYHULQJH[FHOOHQWSURGXFWVDQGVHUYLFHVZKLOHDOVRFRQWULEXWLQJWRWKHLUFRPPXQLWLHV,Q¿VFDO\HDU',&FRQGXFWHGPDQ\community activities, a few of which are introduced here.

Ties with Society

DIC (Guangzhou) Co., Ltd.
On April 28, 2019, DIC (Guangzhou), which is involved in the sale of DIC products,
sponsored a tree-planting event with the aim of contributing to environmental protection.

Qingdao DIC Liquid Crystal Co., Ltd.
Qingdao DIC Liquid Crystal, which manufactures base components for LC materials,
held an environmental protection event that included cleaning and collecting waste in
the area around its plant on May 5, 2019. On July 14, the company held Family Day,an event for the families of employees, which welcomed 126 people (44 employees, 35
adult family members and 47 children).

DIC Synthetic Resins (Zhongshan) Co., Ltd.
On August 10, 2019, synthetic resins and metal carboxylates manufacturer DIC Synthetic
Resins (Zhongshan) held an environmental education event for children titled “Hand-inHand Green Mountaineering.” The event earned high marks from participants.

DIC Zhangjiagang Chemicals Co., Ltd.
2Q$XJXVW',&=KDQJMLDJDQJZKLFKPDQXIDFWXUHVIXQFWLRQDOFRPSRXQGV¿EHU
and textile colorants, and synthetic resins, held a unique Family Day event designed
to demonstrate its management philosophy and express its appreciation to employees
and their families, the stated theme of which was to leverage the power of the family to
IXO¿OOWKHFRPSDQ\¶VGUHDPV2Q'HFHPEHUWKHFRPSDQ\SDUWLFLSDWHGLQWKH³:DON
for Love, Walk in City” jogging event in an effort to reinforce its reputation as a good
corporate citizen.

DIC Graphics (Guangzhou) Ltd.
From September through October 2019, DIC Graphics (Guangzhou), a
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E\FRQGXFWLQJDWUDI¿FVDIHW\SURJUDPIRUFKLOGUHQXQGHUWKHWKHPHRI³SURWHFWLQJ
children with love and support” in collaboration with a local volunteer organization.

Qingdao DIC Finechemicals Co., Ltd.
Each year, Qingdao DIC Finechemicals provides assistance to areas affected by
GLVDVWHUVRUSRYHUW\,Q¿VFDO\HDUHPSOR\HHVXVHGWKHLUFRPSDQ\WULSWRYLVLW
primary schools for Miao and Yi children in Guoquanyan Township, part of Nayong
County, in the city of Bijie, Guizhou Province, to donate winter clothes to children.
Ties with Stakeholders,Q$SULO',& &KLQD FUHDWHGDQRI¿FLDODFFRXQWRQ:H&KDWWKH35&¶VODUJHVWPXOWLSXUSRVHVRFLDOPHGLDDSSZKLFKboasts 1.1 billion users. The company will use its new WeChat account to enhance communications with stakeholders. The
company invites people to scan the QR code to the right to follow the account and access the latest information on DIC (China).

DIC Report 2020 ̲34

Directors, Audit & Supervisory Board Members and Executive Officers（ 2019 年 0 月現在）
(As of May 2020)| Directors

1

Chairman of the Board of Directors

Yoshiyuki Nakanishi

3

Representative Director

Masayuki Saito
Director

5 Director

7

Toshifumi Tamaki

Yoshiaki Tamura

2 Representative Director

4

Kaoru Ino

Yoshihisa Kawamura Kazuo Tsukahara Kuniko Shoji

6

Director*

Director*

8

7

5

6

8

Director*
3

1

2

4

* Outside| Audit & Supervisory Board Members
1

Audit & Supervisory Board Member

Hiroyuki Ninomiya
2

Audit & Supervisory Board Member

Akihiro Ikushima
3

Audit & Supervisory Board Member*

Katsunori Takechi
4

Audit & Supervisory Board Member*Michiko Chiba* Outside

3

Kuniko Shoji

Katsunori Takechi

June 2004 Executive Officer, Terumo Corporation
April 2008 Director and Managing Executive Officer, IHI Corporation
April 2012 Representative Director and Executive Vice President, IHI Corporation June 2010 Director and Senior Executive Officer, Terumo Corporation
June 2017 Advisor, Terumo Corporation
June 2014 Advisor, IHI Corporation

April
2000 Public Prosecutor, Civil Affairs Bureau, Ministry of Justice
October 2003 Joined 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.

35̲ DIC Report 20202

| Outside Audit & Supervisory Board Member ProÀles| Outside Director ProÀles
Kazuo Tsukahara

1

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 Office4

| Executive OfÀcers

President and CEO

Executive Vice PresidentManaging Executive Officer

Managing Executive Officer

Managing Executive Officer

Kaoru Ino

Masayuki Saito

Masami Hatao

Toshifumi Tamaki

Naoyoshi Furuta

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

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

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

General Manager, Production
Management UnitManaging Executive Officer

Managing Executive Officer

Managing Executive Officer

Executive Officer

Executive Officer

Masaya Nakafuji

Kazuo Hatakenaka

Kiyotaka Kawashima

Rudi Lenz

Shinsuke Toshima

Head of General Affairs and Legal Unit
In Charge of Diversity

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

General Manager,
Technical Management Unit

Vice Chairman of the Board,
Sun Chemical Corporation

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

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Taihei Mukose

Paul Koek

Myron Petruch

Takeshi Asai

Koji Asada

Head of Purchasing and Logistics Unit
Head of ESG Unit
General Manager, Purchasing DeptManaging Director,
DIC Asia Pacific Pte Ltd

President and CEO,Sun Chemical Corporation

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

Head of SCM Unit

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Masahiro Kikuchi

Masamichi Sota

Yuji Morinaga

Shuji Furuta

Kiyofumi Takano

Deputy Managing Director(AP Region NonGraphic Business andSouth Asia), DIC Asia Pacific Pte Ltd

President, Packaging & Graphic
Business Group
General Manager, Printing Material
Products Div.

General Manager,
Packaging Material Products Div.

Head of Finance and Accounting Unit
CFO

General Manager,
New Business
Development Headquarters

Executive Officer

Executive Officer

Executive Officer

Yoshinari Akiyama

Toshiro Ariga

Takashi Ikeda

General Manager,
Color Material Products Div.

General Manager,
R&D Management Unit
General Manager, Central ResearchLaboratories

General Manager,
Composite Material Products Div.

DIC Report 2020 ̲36

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
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same time guaranteeing the appropriate monitoring and assessment of and motivation for management’s execution of business activities.
:LWKWKHDLPRIDFKLHYLQJDKLJKHUOHYHORIWUXVWRQWKHSDUWRIVKDUHKROGHUVFXVWRPHUVDQGRWKHUVWDNHKROGHUVDQGHQKDQFLQJFRUSRUDWH
YDOXHWKH',&*URXSDOVRSURPRWHVRQJRLQJPHDVXUHVWRUHLQIRUFHLWVPDQDJHPHQWV\VWHPDQGHQVXUHHIIHFWLYHPRQLWRULQJWKHUHRI| Policy on Corporate Governance',&KDVSUHSDUHGD3ROLF\RQ&RUSRUDWH*RYHUQDQFHZKLFKLWKDVSXEOLVKHGRQLWVFRUSRUDWHZHEVLWH
Policy on Corporate Governancehttps://www.dic-global.com/pdf/ir/management/governance/governance_en.pdf| Corporate Governance Organization$FRPSDQ\ZLWKLQWHUQDODXGLWRUV',&PDLQWDLQVD%RDUGRI'LUHFWRUVDQGDQ$XGLW 6XSHUYLVRU\%RDUG',&KDVDOVRLQVWLWXWHGDQH[HFXWLYHRI¿FHU
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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

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2Nomination Committee

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3

Remuneration Committee

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RXWVLGHZKLOHWKHSRVLWLRQRIFRPPLWWHHFKDLUPDQLV¿OOHGE\DQRXWVLGHGLUHFWRU
4

Executive Committee

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%RDUGRI'LUHFWRUV
37̲ DIC Report 2020

5

Sustainability Committee

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6

Audit & Supervisory Board

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7

Internal Auditing Department

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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',&KDVLQVWLWXWHGDQH[HFXWLYHRI¿FHUV\VWHPDPRYHDLPHGDWVHSDUDWLQJGHFLVLRQPDNLQJDQGLPSOHPHQWDWLRQDQGWKHUHE\DFFHOHUDWLQJ
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ensures the effective functioning of DIC’s corporate governance system.

| System of Internal Controls
1

Status of the System of Internal Controls

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2

Basic Policy Toward Eliminating Demands by Antisocial Elements',&¶VEDVLFSROLF\DVRXWOLQHGLQWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWLVWRVWDQG¿UPO\DJDLQVWDQWLVRFLDOHOHPHQWVDQGLQQRZD\WRDFTXLHVFHWRGHPDQGVSUHVHQWHGE\VXFKHOHPHQWV| Outside Directors and Outside Audit & Supervisory Board Members
1

Number and Role of Outside Directors and Outside Audit & Supervisory Board Members',&FXUUHQWO\KDVWKUHHRXWVLGHGLUHFWRUVDQGWZRRXWVLGH$XGLW 6XSHUYLVRU\%RDUGPHPEHUV,QDGGLWLRQWRDWWHQGLQJPHHWLQJVRIWKH
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DIC Report 2020 ̲38

3

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

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GLUHFWRUVDQGRXWVLGH$XGLW 6XSHUYLVRU\%RDUGPHPEHUV,QDGGLWLRQGLUHFWRUVEULQJLQJPDWWHUVEHIRUHWKH%RDUGSURYLGHH[SODQDWLRQVLQDGYDQFHWRRXWVLGHGLUHFWRUVZKLOHIXOOWLPH$XGLW 6XSHUYLVRU\%RDUGPHPEHUVSURYLGHH[SODQDWLRQVDVQHFHVVDU\WRRXWVLGH$XGLW 6XSHUYLVRU\%RDUGPHPEHUV| Other Initiatives to Enhance the Corporate Governance Organization
1

Composition of the Board of Directors

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Composition of the Board of Directors

41.7%
58.3%

Composition of the Board of Directors and the Audit & Supervisory Board,QKRXVH

2XWVLGH

Total

Percentage of outside
members

Directors

5

3

8

37.5%

$XGLW 6XSHUYLVRU\%RDUGPHPEHUV

2

2

4

50.0%

Total

7

5

12

41.7%

2

Directors of DIC

Outside directors

Remuneration for Executives

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ensuring a balance with remuneration for directors and to prevailing market rates.
3

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| Leveraging Its Position as a Global Manufacturer of Fine Chemicals to Support the UNGC
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39̲ DIC Report 2020

Overview of Sustainability,QOLQHZLWKLWVEDVLFVXVWDLQDELOLW\SROLF\WKH',&*URXSSURPRWHVDYDULHW\RIVXVWDLQDELOLW\LQLWLDWLYHVZRUOGZLGHDQGZRUNVWRPDLQWDLQDQDFFXUDWHJUDVSRIVRFLDOLPSHUDWLYHVSHUWDLQLQJWRHQYLURQPHQWDOVRFLDODQGJRYHUQDQFH (6* UHODWHGLVVXHVBasic Sustainability Policy（3DUWLDOO\UHYLVHGLQ0DUFK）The DIC Group is dedicated to conducting its business while retaining a strong commitment to five key concepts: preserving safety
DQGKHDOWKPDQDJLQJULVNVHQVXULQJIDLUEXVLQHVVSUDFWLFHVDQGUHVSHFWIRUGLYHUVLW\DQGKXPDQULJKWVPDLQWDLQLQJKDUPRQ\ZLWKWKHHQYLURQPHQWDQGDGYDQFLQJLWVSURWHFWLRQDQGFUHDWLQJYDOXHIRUVRFLHW\WKURXJKLQQRYDWLRQDQGFRQWULEXWLQJWRRQJRLQJHFRQRPLF
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| Sustainability Framework and Themes
Themes7RIRVWHUFRQFUHWHPHDVXUHLQ¿VFDO\HDUWKH',&*URXSLGHQWL¿HGNH\WKHPHVDVDIUDPHZRUNIRULPSOHPHQWLQJLWVFRUSRUDWHVRFLDOUHVSRQVLELOLW\ &65 SURJUDP6XEVHTXHQWO\WKH*URXSSDUWLDOO\UHYLVHGWKHVHWKHPHVLQUHVSRQVHWRFKDQJHVLQWKHH[WHUQDOHQYLURQPHQWDQGWKH
SURJUHVVRILWVHIIRUWV7RGD\WKH*URXS¶VVXVWDLQDELOLW\IUDPHZRUNFRPSULVHVNH\WKHPHVZKLFKDUHFDWHJRUL]HGDVEDVLFWKHPHVWKHPHVWKDWGHPRQVWUDWHXQLTXH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()

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The 2030 Agenda for Sustainable Development$WWKH816XVWDLQDEOH'HYHORSPHQW6XPPLWLQ6HSWHPEHUDSURSRVDOWLWOHG³7UDQVIRUPLQJ
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81PHPEHUVWDWHV7KHDJHQGDZKLFKVXFFHHGHGWKH0LOOHQQLXP'HYHORSPHQW*RDOV 0'*V 
HQFRPSDVVHVJRDOVDQGWDUJHWV$OO81PHPEHUVWDWHVDUHH[SHFWHGWRPRELOL]HHIIRUWVWRDWWDLQWKHJRDOVHVVHQWLDOWRVXVWDLQDEOHGHYHORSPHQWIRUWKHSODQHWE\7KH',&*URXSSOHGJHVWRFRQWULEXWHWKURXJKLWVEXVLQHVVDFWLYLWLHVWRWKHVXFFHVVRIWKH6'*VFor more information on the 6'*VSOHDVHYLVLW
https://www.un.org/sustainabledevelopment/sustainable-development-goals/

DIC Report 2020 ̲40

Materiality Analysis
Identifying Priority Materiality Themes*XLGHGE\LWV',&PHGLXPWHUPPDQDJHPHQWSODQODXQFKHGLQ¿VFDO\HDUWKH',&*URXSRQFHDJDLQDEVWUDFWHGDQGDQDO\]HGPDWHULDOLVVXHVWKDWLVLVVXHVZLWKWKHSRWHQWLDOWRQHJDWLYHO\DIIHFWLWVSHUIRUPDQFHIURPZKLFKLWLGHQWL¿HGIRXUWKHPHVRISULPDU\LPSRUWDQFHWRWKH*URXSZKLFKLWGHVLJQDWHVSULRULW\PDWHULDOLW\WKHPHVThe DIC Group’s Materiality Matrix
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●
Response to pandemics●●

Importance to stakeholders

Very
high

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
●

High
High

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

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 resource development
and securing employment
Addition of depth to and expansionof basic technologies● Response to currency fluctuations●●

Issues of fundamental importance to DIC Group businesses
・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 particularsignificance is disclosed in the complete version of DIC Report.

Very highImportance to DIC Group businesses

Process for Abstracting Material Issues
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Priority Materiality Themes
1

Transformation to a Sustainable Business Structure

Reason for
identification

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41̲ DIC Report 2020

2

Product Stewardship

Reason for
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Targets/KPIs

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3 Response to Climate Change

Reason for
identification

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Targets/KPIs

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Efforts to Strengthen Product Development Capabilities and Create New Businesses

Reason for
identification

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UHVROXWLRQRIDVSULRULWLHV

Targets/KPIs

2SHUDWLQJLQFRPHRIELOOLRQLQ¿VFDO\HDU

Status,Q¿VFDO\HDU',&LQWHJUDWHGLWVRZQSRO\PHUGHVLJQDQGRWKHUEDVLFWHFKQRORJLHVZLWKH[WHUQDOSURFHVVLQJWHFKQRORJLHVWRGHYHORSDQGODXQFKDQ
LQQRYDWLYHVROYHQWIUHHSDFNDJHODPLQDWLRQV\VWHPWKDWLVH[SHFWHGWRFRQWULEXWHWRWKHUHGXFWLRQRI&2HPLVVLRQVDIC Report 2020 ̲42

Support for the TCFD
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as a critical factor affecting its businesses, the Group pledges to disclose related information in line with TCFD recommendations going forward.

| Disclosures in Line with TCFD Recommendations
The TCFD recommends disclosing information on governance, strategy, risk management, and metrics and targets as the core elements of
RUJDQL]DWLRQDOPDQDJHPHQWLQRUGHUIRULQYHVWPHQWLQVWLWXWLRQVWRDFFXUDWHO\JUDVSFOLPDWHUHODWHGULVNVDQGRSSRUWXQLWLHVDQGPDNH¿QDQFLDOGHFLVLRQVTCFD Recommendations for Financial Disclosures
Governance

Strategy

Actual and potential impacts of climateGovernance around climate-related risks related risks and opportunities on
and opportunities
businesses, strategy and financial
planning

Risk management

Metrics and targets

Processes used to identify, assess
and manage climate-related risks

Metrics and targets used to assess
and manage relevant climate-relatedrisks and opportunities

Scenario Analysis
Scenario analysis is positioned as the most important component of the strategy formulation portion of the TCFD and makes it possible to evaluate socialchange and its impact on business using multiple future scenarios, assess risks and opportunities and consider countermeasures that improve resilience.
(Time frame: 2030; carbon price: ¥8,000/tonne)
Scenario information

Scenario used

2ºC Scenario
Based on the International Energy Agency (IEA)’s World Energy Outlook (WEO) Sustainable
Development Scenario and Energy Technology Perspectives (ETP) 2017 2ºC Scenario

Results of Scenario Analysis

Opportunity

Implications for society andthe business environment

2ºC Scenario:
Strengthening of policies
and regulations

2ºC Scenario:
Changes in demand
attributable to circular
economy2ºC Scenario:
Reduction of CO 2
emissions attributableto manufacturing

Introduction of carbon pricing (direct
implications for manufacturing and the
procurement of raw materials)

&6FHQDULR
Increase in risk that
operations at production
facilities will beinterrupted due to anincrease in climaterelated disasters

43̲ DIC Report 2020

Based on the Intergovernmental Panel on Climate Change (IPCC)
Representative Concentration Pathway (RCP) 8.5

Risk

Risk and opportunity assessment

Possible direct impact on manufacturing costs: ¥5.03 billion(Annual CO2HPLVVLRQVLQ¿VFDO\HDUWRQQHV
Reference:
Possible impact on procurement costs: ¥11.8 billion (Annual CO 2
HPLVVLRQV 6FRSH&DWHJRU\ LQ¿VFDO\HDUWRQQHV

Global movement to minimize use of oneway plastics and efforts by brand owners
seeking to reduce packaging

Demand for some plastics (one-way plastics) will decrease, but increased
demand for plastic alternatives will mean only a negligible impact onmaterials suitable for applications other than plastics.

Increase in production and sales ofrecycled plastics

While it is unclear what will happen vis-à-vis demand changes, a failure
to launch commercial distribution will mean the loss of future market
opportunities.
Annual investment in energy-saving and renewable energy equipment isestimated at ¥2.0 billion (direct impact on manufacturing costs). Ongoing
efforts to reduce CO2 emissions attributable to production will also benecessary.

DIC Group countermeasures• Take steps to maintain cost competitiveness, assuming global introduction.
• Promote enhanced functionality in businesses that can absorb cost
increases (e.g., products for automotive, electronics and display
applications and pigments for cosmetics).
• Use the DIC Sustainability Index to promote products that help
reduce CO2 emissions (i.e., are sustainable).
• Capitalize on rising demand for PPS compounds underpinned byexpanded automobile production and the shift to EVs.
• Promote core packaging materials as products that can be used on
both plastic and alternative packaging materials; differentiate withbarrier and other functions.
• Foster businesses that respond to demand for materials that arebiodegradable and/or use bioderived materials.
• Step up exploration of chemicals and materials recycling.
• Advance innovations in materials and formulations technologies thatenhance recyclability.

Note: Investments will constitute a burden over the short term, but therecovery thereof has been incorporated in calculations for eachindividual project.

• Disclose investment in energy-saving and renewable energy
equipment with the aim of achieving target for reducing Scope 1
DQGHPLVVLRQVE\IURPWKH¿VFDO\HDUOHYHOE\¿VFDO
year 2030.
• The reduction of CO2 emissions is expected to reduce costs by an
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HVWLPDWHGDQQXDOHPLVVLRQVUHGXFWLRQWRQQHV 

Efforts to reduce CO 2 emissions enough to keep the increase inglobal average temperature over the current century to 1.5ºC from thepreindustrial level are already underway. There is a risk that this target
will be imposed across entire supply chains (including distribution of
products by customers).

• Consider the setting of a new Science Based Target conducive tokeeping the increase in global average temperature to 1.5ºC.
• Consider introducing and using internal carbon pricing.
• Take steps to secure the trust of customers.

• Stable procurement risks affect certain businesses, i.e., thosedependent on raw materials procured overseas or monopolized bycertain suppliers.
• For most products, coordination among departments will facilitate theuse of alternative raw materials.

• For key raw materials, promote two-company shared procurement in
multiple regions and enhance BCP responses.
• For key products, ensure ample inventories of raw materials
and products.

Depletion of groundwater resources• Production sites are scattered across the globe, so impact on overall
operations is limited. However, certain products the production ofwhich is concentrated at certain facilities may be affected.
• Countermeasures are required in areas where there are concernsthat water-related risks will increase.

• Locate printing inks production facilities around the world to ensurecomplementary capabilities.
• Cooperate with other companies to minimize the impact in the event
port facilities are damaged.
• Strengthen measures for sites located in coastal areas. Reinforce theeffectiveness of BCPs by providing related training.
• Implement measures to address water-related risks.

Increases in non-life insurance fees

Insurance premiums may increase.

• Bolster profitability by reinforcing and expanding portfolio ofsustainable products.

Introduction of energy-saving andrenewable energy equipment

Shift of focus to the achievement of net]HURHPLVVLRQVE\¿VFDO\HDU

&6FHQDULR
Increase in risk that
supply chains will beinterrupted due to anincrease in climaterelated disasters

4ºC Scenario

Suspension of production at suppliers’
facilities due to frequent climate-related
disasters, including typhoons, storm
VXUJHVDQGÀRRGV
Suspension of supplies of plant-derived
raw materials
Suspension of production at own facilities
due to frequent climate-related disasters,
including typhoons, storm surges andÀRRGVResults of Scenario Analysis

&6FHQDULR
Response to changes inlifestyles attributable to risingtemperatures

Opportunity

Risk

Implications for society andthe business environment

Risk and opportunity assessment

DIC Group countermeasures

Changes in lifestyles and consumption
patterns attributable to risingtemperatures and resulting changes
in demand• Demand for certain products may be affected by changing consumption
patterns attributable to rising temperatures, but because demandsources are diverse the risk to overall business is low.
• The potential for increases in new demand as a consequence ofchanges in lifestyles attributable to rising temperatures is high.

• Rising temperatures present an opportunity in the form of increased
demand for thermal barrier–related products.
• Given that dietary preferences are also expected to change, capitalize
on expanding demand from beverage manufacturers and for materials
used in frozen foods.
• Take advantage of higher demand in the health foods and life sciences¿HOGVDWWULEXWDEOHWRLQFUHDVLQJKHDOWKFRQVFLRXVQHVV

Note: Figures are based on 2018 results at the time of scenario analysis. As CO2HPLVVLRQVLQ¿VFDO\HDUDPRXQWHGWRWRQQHVWKHLPSDFWRIFDUERQSULFLQJXQGHUWKLVFRQGLWLRQZRXOGEHDVPXFKDVELOOLRQ

| Scenario Analysis: A Message from the Head of the ESG Unit
Having acknowledged responding to climate change as a key challenge, the DIC Group positioned this as a priority materiality issue in its fiscal\HDUDQDO\VLVRIPDWHULDOLW\)RUWKH¿UVWWLPHWKH*URXSDOVRFRQGXFWHGDVFHQDULRDQDO\VLVLQOLQHZLWKWKHUHFRPPHQGDWLRQVRIWKH7&)'
recognizing the importance of a cautious yet appropriate approach to sustainable growth. In addition to enhancing our understanding of carbon pricing
and physical risks, this process underscored our awareness of the importance of ensuring that many of the Group’s core packaging materials products
are compatible with multiple different media, rather than only with plastic or with paper, is key to the resilience of this business. We will continue tostrengthen our business to respond to changes in lifestyles and take appropriate measures to address risks. We will also work to deepen stakeholders’
understanding by ensuring effective disclosure.
Executive Oﬃcer, Head of ESG Unit, DIC Corporation

Taihei Mukose

Climate Change| Metrics and Targets
The DIC Group is working to lower greenhouse gas emissions and has set a target for reducing CO2 emissions across Group sites 30% from
WKH¿VFDO\HDUOHYHOE\¿VFDO\HDU7RWKLVHQGWKH*URXSLVHQFRXUDJLQJVLWHVWRDFWLYHO\LQWURGXFHUHQHZDEOHHQHUJ\LHHQHUJ\from renewable sources, including by installing biomass boilers and solar power systems, as well as by purchasing low-carbon electric power.

| Energy Consumption and CO2 Emissions by the Global DIC Group in Fiscal Year 2019
Global CO2 Emissions

Global CO2 Emissions per
Unit of Production-20.2%
from fiscal
year 2013(Tonnes)
800,000
700,000(Tonnes)
600.0-17.4%
from fiscal
year 2013

500.0

600,000
400.0

500,000

300.0

400,000
300,000

200.0

200,000
0

0

20
1
20 3
1
20 4
15
20
1
20 6
1
20 7
1
20 8
19

100.0

100,000
20
1
20 3
1
20 4
15
20
1
20 6
1
20 7
1
20 8
19

(QHUJ\FRQVXPSWLRQE\WKHJOREDO',&*URXSLQ¿VFDO\HDUHGJHGGRZQIURP¿VFDO\HDUDQGIURPWKH¿VFDO\HDUEDVH\HDU7KH*URXS¶VJOREDO&22 emissions
DPRXQWHGWRWRQQHVGRZQIURPILVFDO\HDUDQGIURPILVFDO\HDU
2013. Global CO2 emissions per unit of production—expressed in terms of kilograms of CO2 per
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in CO2 emissions included efforts by companies worldwide to break down the Group’s emissions
reduction targets and promote decarbonization initiatives and active efforts to advance the use ofrenewable energy. Efforts by companies in Japan to minimize CO2 emissions from the incinerationof industrial waste and to purchase low-carbon electric power also had a positive impact.

| Reducing Fossil Fuel Use by Promoting the Use of Renewable Energy
The DIC Group continued taking decisive steps to advance the use of renewable energy and reduce energy consumption. In Japan, the Group completed the
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generate power for internal consumption, while in the United States Sun Chemical introduced a solar power system with a generating capacity of approximately
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behind this result was a decrease in wind power generated at the Kashima Plant, owing to system repairs. Another factor was a decline in the proportion of thefuel mix used by a pigments production facility in Indonesia that was accounted for by biomass (palm kernel shells) commensurate with a decrease in overall
fuel use (the proportion accounted for by mainstay fuel coal remained steady). The use of renewable energy accounted for a reduction in global CO2 emissions ofWRQQHVThe DIC Group’s Total Global Solar Power Generating Capacity (For Internal Consumption)

Breakdown of Reduction in Global CO2 Emissions Attributable
to the Use of Renewable Energy in Fiscal Year 2019
Wind power

(kW)
7,000

As of January 31

6,000

1,277

1,765 tonnes

Small hydroelectric power

209 tonnes

Solar power

2,956 tonnes

5,000

2,240

4,000
3,000

1,500

2,000
1,000
0

300

1,128
300

1,428

2016

2017

2018

As of December 31 of previous year

5,168
2,928
2019

2020

Electric power
generated using
biomass

7,848 tonnes

Decrease in CO2 Emissions
Attributable to the Use ofRenewable Energy (Global)

40,611 tonnes
Thermal power generatedusing biomass

27,833 tonnes

Newly installed

DIC Report 2020 ̲44Compliance

SDGs Goal 16
QR codeToward Fair and Transparent Corporate Activities
https://www.dic-global.com/en/csr/philosophy/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 Compliance
The DIC Group promotes compliance through the following initiatives.
❶ Training focused on legal issues to improve compliance awareness is provided for employees at point of hire, when promoted and before transfer overseas. In

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',&$VLD3DFL¿F $VLDDQG2FHDQLD ²WRVSHDUKHDGJOREDOFRPSOLDQFHHIIRUWV7KH',&*URXSYRZVWKDWLWZLOOQRWYLRODWHWKHSULQFLSOHVRIWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWHYHQLIVXFKDYLRODWLRQZRXOGDSSHDUWRSUR¿W
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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. Thissystem 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,Q1RYHPEHUWKH',&*URXSIRUPXODWHGDQRI¿FLDODSSURDFKWRWD[$VDQRUJDQL]DWLRQZLWKJOREDORSHUDWLRQVWKH*URXSHQJDJHVLQIDLUDQGDSSURSULDWH
WD[SODQQLQJWKDWUHÀHFWVWKHQDWXUHRILWVEXVLQHVVHV7KH*URXSLVDOVRDZDUHRIULVNVDVVRFLDWHGZLWKWUDQVIHUSULFHWD[DWLRQDQGWKHXVHRIWD[KDYHQVDQG
of its obligation to pay appropriate taxes in the proper jurisdictions as appropriate for its operations.
https://www.dic-global.com/en/csr/philosophy/tax.html

BCM and Crisis Management

QR codeReducing Business Risks and Preventing the Recurrence of Incidents
https://www.dic-global.com/en/csr/philosophy/bcm.html| Framework for Promoting BCP+DYLQJSUHSDUHGFULVLVPDQDJHPHQWUXOHVDQGULVNVSHFL¿FPDQXDOVIRUXVHDFURVVWKH',&*URXSLQWKHHYHQWRIDPDMRUGLVDVWHU',&KDVIRUPXODWHG
%&3VIRULQGLYLGXDOSURGXFWGLYLVLRQV',&DOVRFRQGXFWV%&3IRFXVHGMRLQWSURGXFWLRQGLYLVLRQ±VLWHH[HUFLVHVDVVXPLQJWKHLPSOHPHQWDWLRQRIWKHVH
2017%&3VWRFRQ¿UPWKHHIIHFWLYHQHVVRIPDQXDOVLGHQWLI\LVVXHVDQGLPSOHPHQWRQJRLQJLPSURYHPHQWV| BCM in Fiscal Year 2019
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casualties resulted from these events and the impact of damage to Group facilities on production and supply activities was negligible.
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| Preventing BCPs from Becoming Empty Formalities
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,Q¿VFDO\HDUVXFKH[HUFLVHVZHUHFRQGXFWHGIRUWKHVWDIIRIWKUHHSURGXFWGLYLVLRQVDQGWKUHHUHODWHGVLWHVLQ-DSDQ7KHVHH[HUFLVHVDUHGHVLJQHGWRFRQILUPWKHHIIHFWLYHQHVVDQGIXQFWLRQDOLW\RISURGXFWGLYLVLRQ%&3VWKURXJKGLVDVWHUSUHYHQWLRQDQGPLWLJDWLRQH[HUFLVHVEDVHGRQK\SRWKHWLFDO
VFHQDULRV7KH\DOVRVHHNWRLPSURYHUHVSRQVLYHQHVVWRQHZO\UHFRJQL]HGLVVXHVZLWKWKHDLPRIHQKDQFLQJLQLWLDOUHVSRQVHVLQWKHHYHQWRIDGLVDVWHUDQG
of improving site restoration, complementary production strategies, supplier management and local responses. DIC will continue to promote joint training,
focusing on production sites.

| Conducting Emergency Response Exercises and Drills
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| Efforts to Reinforce Safety Measures Overseas
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overseas posts or traveling overseas on business. With the rising frequency of terrorist acts and the dangers posed by uprisings, infectious disease outbreaks andother such incidents in various locations, the Group is reinforcing safety measures designed to help employees evade danger. These include taking steps to advance
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Information Security

QR codeInitiatives to Ensure Information Security
https://www.dic-global.com/en/csr/philosophy/security.html| Globally Maintaining and Enhancing Information Security
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Regulations and Guidelines
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regulations as appropriate in response to the increasing prevalence of digital technologies. In addition, the Group has established separate rules for handlingpersonal information and customer information in its information management guidelines, which it is working to disseminate among employees and put into
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force operational manual and periodically conducts training to ensure effective initial responses to incidents when they occur.
Infrastructure
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technologies, based on requirements for IT, including the active use of cloud computing, the functional evolution of smart devices, work style reform, as well as the directionof advances in these areas. During the period, the Group also sought to address increasingly diverse internet threats by introducing new cloud-based security solutions andexpanding the use of the Windows 10 operating system, as well as updating security systems designed to strengthen the endpoint security of other computers.
Employee Education and Training
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DIC Report 2020 ̲46

Environment, Safety and Health (ESH)

SDGs Goals 3, 6, 7, 12, 13, 14 and 15
QR codeToward the Achievement of a Sustainable Society
https://www.dic-global.com/en/csr/environment/

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

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Outline of ESH Audits Implemented in Fiscal Year 2019
Japan

Overseas

DIC

DIC Graphics

Other domestic
Group companies

Greater China

Asia–Pacific region

9 sites

3 sites

11sites

15 sites

20 sitesTotal

23 sites

Total

35 sites

Audits Conducted at Subsidiaries’ Sites
in Fiscal Year 2019
Sun Chemical Group

Seiko PMC Group

37sites

10 sites

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 to boost the level of ESH initiatives.
1

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2

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47̲ DIC Report 2020

3

Training Skilled Safety Personnel

Reinforcing safety training
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4

Promoting Hands-On Safety Training

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Workdays Lost Due to Occupational Accidents (FY2017–2019)

Status of Occupational Accidents
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DIC
Number of
workdays lost
Frequency
rate

DIC Group (Japan)

DIC Group (Global)

2017

2018

2019

2017

2018

2019

2017

2018

2019

2

6

2

3

8

11

70

91

78

0.360 1.071 0.363 0.331 0.848 1.200 1.752 2.211 1.963

Severity rate 0.054
TRIR*

0.021 0.003 0.028 0.013 0.038

--

--

--

2.16 2.50 1.63 2.65 2.86 2.95 3.98 4.83 3.82

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Environmental Conservation
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.

Preventing Environmental Pollution
Reducing Emissions of VOCs
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Reducing SOx, NOx and COD',&*URXSFRPSDQLHVLQ-DSDQUHSRUWHGVXOIXUR[LGH 62[ DQGQLWURJHQR[LGH 12[ HPLVVLRQVRIWRQQHVDQGWRQQHVUHVSHFWLYHO\LQ¿VFDO\HDUERWKGRZQIURPWKH¿VFDO\HDUOHYHO7KHGHFUHDVHLQ62[HPLVVLRQVUHÀHFWHGDVKLIWWRKLJKHUJUDGHIXHOVIRUELRPDVVERLOHUV2YHUVHDV*URXSFRPSDQLHVDUHVZLWFKLQJWRELRPDVVERLOHUVDWVLWHVZLWKDSSURSULDWHLQIUDVWUXFWXUH+RZHYHURZLQJWRFKDQJHVWRSURGXFWSRUWIROLRVFKHPLFDO
R[\JHQGHPDQG &2' URVHWRWRQQHVLQ¿VFDO\HDU7KH*URXSZLOOFRQWLQXHWDNLQJVWHSVWRUHGXFH&2'ORDGUDWHVE\HQKDQFLQJLWVZDWHU
TXDOLW\PDQDJHPHQWDIC Report 2020 ̲48

Preventing Marine Pollution Resulting from Waste Plastic,QUHFHQW\HDUVZDVWHSODVWLFDQGPDULQHSODVWLFVKDYHEHFRPHLVVXHVRIPDMRUFRQFHUQZRUOGZLGH7KH',&*URXSZRUNVWRSUHYHQWSROOXWLRQRIWKH
HQYLURQPHQWSDUWLFXODUO\WKURXJKPHDVXUHVWRSUHFOXGHOHDNVRIUDZPDWHULDOVIURPSURGXFWLRQIDFLOLWLHVDQGWKHUHF\FOLQJRIZDVWHSODVWLFJHQHUDWHGLQSURGXFWLRQSURFHVVHV,Q¿VFDO\HDUDSSUR[LPDWHO\RIZDVWHSODVWLFJHQHUDWHGE\WKH*URXSZDVUHF\FOHG$SSUR[LPDWHO\RIWKLVZDVUHXVHGLQFOXGLQJWKURXJKWKHUHFRYHU\RIHQHUJ\IURPIXHOXWLOL]DWLRQManaging Industrial Waste
7KH',&*URXSZRUNVDFWLYHO\WRUHGXFHLWVGLVSRVDORILQGXVWULDOZDVWHDVODQG¿OOE\UHF\FOLQJFLQGHUVGXVWDQGVOXGJHDPRQJRWKHUVLQWRURDGEHGPDWHULDOVDQGUDZPDWHULDOVIRUFHPHQWXVLQJWKHUPDOUHF\FOLQJWRUHFRYHUZDVWHKHDWDQGPLQLPL]LQJSURGXFWLRQORVVHVE\LQFUHDVLQJWKURXJKSXW\LHOGV
Principal Initiatives in Fiscal Year 2019
Industrial Waste Disposed of as LandÀll

（Tonnes）

DIC Group(Japan)

DIC

89
232
90
207
104
158
48
106
44
86
49
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116
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97
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97
148
100
204
75
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tonnesFiscal year 2019

128
537
125
320

03

3,000

217

tonnesFiscal year 2019

1,288
312
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02

75
1,560
2,296

3,426
4,326

5,581

6,000

4,190

9,000

7,981

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0

00

01

04

05

06

08

10

11

12

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14

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19（FY）（Base year）

DIC

DIC Group (Japan)

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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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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.

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49̲ DIC Report 2020

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Licensing System for Employees Involved in Exporting and Importing
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Quality

QR codeEnhancing Product Quality and Customer Satisfaction
https://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 Promotion,Q¿VFDO\HDU',&LQWURGXFHGDQHZPDWUL[OLNHTXDOLW\PDQDJHPHQWFRQ¿JXUDWLRQHVWDEOLVKLQJWKH4XDOLW\$VVXUDQFH'HSDUWPHQWZLWKLQWKH3URGXFWLRQ$GPLQLVWUDWLRQ'LYLVLRQ WRGD\¶V3URGXFWLRQ0DQDJHPHQW8QLW DQGTXDOLW\DVVXUDQFHJURXSVZLWKLQLQGLYLGXDOSURGXFWGLYLVLRQV%DVHGRQWKH*URXS¶VTXDOLW\PDQDJHPHQWV\VWHP 406 IRUSURGXFWGLYLVLRQVWKHTXDOLW\DVVXUDQFHJURXSVRYHUVHHSURGXFWVSHFLILFTXDOLW\PDQDJHPHQWZKLOHWKH4XDOLW\$VVXUDQFH
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Quality Assurance and Quality Improvement Initiatives
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Initiatives Aimed at Increasing Customer Satisfaction
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&RPSDQ\SURYLGHVHGXFDWLRQUHJDUGLQJSURGXFWTXDOLW\DVSDUWRIWUDLQLQJIRUQHZO\KLUHGDQGQHZO\SURPRWHGHPSOR\HHVDQGDWSURGXFWLRQIDFLOLWLHVDVSDUWRIDQQXDOWUDLQLQJSODQV*RLQJIRUZDUG',&ZLOOFRQWLQXHWRLPSOHPHQWLQLWLDWLYHVWRVWUHQJWKHQWKHDELOLW\QRWRQO\RITXDOLW\DVVXUDQFHRI¿FHUVEXW
DOVRRIDOOSODQWHPSOR\HHVWRVHHWKLQJVIURPWKHFXVWRPHU¶VSHUVSHFWLYH7KH&RPSDQ\ZLOODOVRZRUNWRIRVWHUDPLQGVHWWKDWTXDOLW\LVWKHIRXQGDWLRQRIHIIHFWLYHPDQDJHPHQWE\DPRQJRWKHUVHQFRXUDJLQJWKHUHDGLQJRI',&¶V4XDOLW\3ROLF\GXULQJSODQWPRUQLQJDVVHPEOLHVDQGPHHWLQJVDIC Report 2020 ̲50

Human Resources Management

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

https://www.dic-global.com/en/csr/stakeholder/staff.html| Strategies for a Stronger Management Infrastructure
In line with The DIC WAY, which represents its fundamental management policy, the DIC Group has established a global human resources management
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WING: DIC111 Strategies for Human Resources Management

Work Style Reform

HR Infrastructure Reform

Reform work styles to capitalize on diversified individuality

Adopt a global human resources system and unify Group system■

Reform jobs with digital tools.

■

Consolidate employee qualification systems globally.

■

Reform working conditions by introducing a telework system and flexible working hours.

■

Unify qualification standards and assessment formats for management-level employees.

■

Shift focus of evaluation from quantity to quality.

■

Develop IT system for global human resources platform.

■

Support employees who have childcare or nursing care responsibilities or suffer illness, etc.

Global Talent Development

Next Management Selection

Develop global human resources

Establish system to appoint the next management team■

Clarify requirements for employees in key positions.

■■

Establish selection and monitoring processes for high-potential employees.

■■

Use talent review to optimize combination of positions and employees.

Define level of and set requirements for global human resources.
Systematize global human resources development programs(English-language ability, competency, work experience, etc.)

Progress in Fiscal Year 2019
① Work style reform,QWURGXFHGOHDYHIRUHPSOR\HHVWRDFFRPSDQ\VSRXVHVRYHUVHDVDQGVKRUWWHUPSDLGOHDYHSURJUDPVDQGLPSOHPHQWHGLQLWLDWLYHVWRSURPRWHWHOHZRUNV\VWHPDQGDZDUHQHVVRIÀH[LEOHZRUNLQJRSWLRQV② HR infrastructure reform
・%XLOWKXPDQUHVRXUFHVGDWDEDVHIRUPDQDJHPHQWOHYHODQGKLJKHUHPSOR\HHVLQ-DSDQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQ・&UHDWHGJOREDOXQL¿HGDVVHVVPHQWV\VWHPIRUHPSOR\HHVLQNH\SRVLWLRQV③ Next management selection
5HLQIRUFHGDSSURDFKWRVHOHFWLQJQHZPDQDJHPHQWFDQGLGDWHVE\HQKDQFLQJWUDLQLQJIRUVXFKFDQGLGDWHVDQGH[SDQGHGVFRSHRIKXPDQUHVRXUFHVDVVHVVPHQWV④ Global talent development$XJPHQWHGH[LVWLQJGHYHORSPHQWSURJUDPVIRUJOREDOKXPDQUHVRXUFHVE\FRQVLGHULQJDPHWKRGRIDVVHVVLQJODQJXDJHDELOLW\LQFOXGLQJFRQYHUVDWLRQDOSURZHVVBasic Personnel Statistics (DIC)

Male
Number of
employees

FemaleTotal
Male

Average age

FemaleTotal

Averageyears ofemployment

New
graduates
hired

Male
FemaleTotal
Male
FemaleTotal

51̲ DIC Report 2020

Fiscal year 2017

Fiscal year 2018

Fiscal year 2019

Fiscal year 2017

Fiscal year 2018

Fiscal year 2019

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

2,640
681
3,321
42.6
42.1
42.5
18.3
19.8
18.6
44
22
66

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Retention rate
(after three
years)
Separations(voluntary)(number ofindividuals)

Male
FemaleTotal
Male
FemaleTotal
Male

Separation rate(voluntary)

Female
Total

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%

97.2%
76.9%
91.8%
45
16
61
1.7%
2.3%
1.8%

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DIC Recognized as Nadeshiko Brand for Fiscal Year 2019, Earning Selection for the Second Consecutive Year
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DIC Report 2020 ̲52

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Major Expansion of the Flextime System
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Establishment of a System to Help Employees Balance Medical Treatment and Work
,Q-DQXDU\',&LQWURGXFHGDV\VWHPWRVXSSRUWHPSOR\HHVXQGHUJRLQJPHGLFDOWUHDWPHQWZKRZLVKWRFRQWLQXHZRUNLQJ7RHQVXUHWKLVV\VWHPIXQFWLRQVHIIHFWLYHO\WKH&RPSDQ\IRUPXODWHGJXLGHOLQHVWRHQVXUHHPSOR\HHVPDNLQJXVHRIWKLVV\VWHPUHFHLYHWKHRQJRLQJVXSSRUWQHFHVVDU\WREDODQFHPHGLFDOWUHDWPHQWDQGZRUNWKURXJKMREUHODWHGDFFRPPRGDWLRQVDQGFRQVLGHUDWLRQV| Human Resources Infrastructure Reform,Q-DQXDU\',&DQG',&*UDSKLFVXQL¿HGTXDOL¿FDWLRQVWDQGDUGVIRULWVPDQDJHPHQWOHYHO LHPDQDJHUDQGDERYH HPSOR\HHVUHSODFLQJWUDGLWLRQDODELOLW\EDVHGVWDQGDUGVZLWKUROHEDVHGVWDQGDUGV$VDFRQVHTXHQFHFRQVLVWHQWGXW\DQGUROHEDVHGVWDQGDUGVDUHQRZXVHGIRUWKHPDMRULW\RIVXFKHPSOR\HHVLQWKH$PHULFDV(XURSHWKH$VLD±3DFL¿FUHJLRQWKH35&DQG-DSDQ,QDGGLWLRQHYDOXDWLRQV\VWHPVIRU*URXSFRPSDQ\H[HFXWLYHVLQ-DSDQDQGRYHUVHDVKDYHEHHQLQWHJUDWHGWRUHLQIRUFH*URXSZLGHPDQDJHPHQW8QGHU',&',&ZLOODOVRDGYDQFHHIIRUWVWRFRQVROLGDWHHPSOR\HHTXDOL¿FDWLRQV\VWHPVZRUOGZLGHXQLI\TXDOL¿FDWLRQVWDQGDUGVDQGDVVHVVPHQWIRUPDWVIRUPDQDJHPHQWOHYHOHPSOR\HHVDQGFRQVWUXFWDJOREDOKXPDQUHVRXUFHVSODWIRUP

| Ensuring Fair and Consistent Treatment',&KDVFRQVROLGDWHGLWVQXPHURXVHPSOR\HHTXDOLILFDWLRQV\VWHPVLUUHVSHFWLYHRIMREFODVVLILFDWLRQDQGHGXFDWLRQDOFUHGHQWLDOV3URPRWLRQVDUH
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53̲ DIC Report 2020

Sustainable Procurement

SDGs Goal 12
QR codePromoting Socially Responsible Procurement Across the Supply Chain
https://www.dic-global.com/en/csr/stakeholder/partner.html| Encouraging Sustainable Procurement%DVHGRQWKH',&*URXS8QLYHUVDO3XUFKDVLQJ3ROLF\LQ',&IRUPXODWHGWKH',&*URXS&653URFXUHPHQW*XLGHOLQHV7RDGGUHVVLQFUHDVLQJO\XUJHQWDQGHYROYLQJH[SHFWDWLRQVUHJDUGLQJWKHVXVWDLQDELOLW\RIFRPSDQLHV¶SURFXUHPHQWSUDFWLFHVWKHVHJXLGHOLQHVZHUHUHFHQWO\PRGLILHGDQG
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RIPHGLXPWHUPWDUJHWVIRUUHGXFLQJJUHHQKRXVHJDVHPLVVLRQVDQGWKHIRUPXODWLRQRI%&3VWRJXDUDQWHHVWDEOHVXSSOLHV:LWKWKHDLPRIFRPSHOOLQJVXSSOLHUVWRREVHUYHWKHVHJXLGHOLQHVWKH*URXSKDVSUHSDUHGWKHDIC Group Sustainable Procurement Guidebook SUHYLRXVO\WLWOHGWKHDIC Group
Supply-chain CSR Deployment Guidebook YHUVLRQRIZKLFKZDVSXEOLVKHGLQ)HEUXDU\
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also formulated the DIC Group Green Procurement Guidelines, in line with which it obliges suppliers to ensure the stringent management of chemical
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❽ 3URPRWLRQRIVXVWDLQDELOLW\DQGVXVWDLQDEOHSURFXUHPHQWLQLWLDWLYHV| Supplier Self-Evaluations
In accordance with the DIC Group Sustainable Procurement GuidebookWKH',&*URXSDVNVVXSSOLHUVWRHYDOXDWHWKHPVHOYHVE\FRPSOHWLQJDTXHVWLRQQDLUHZKLFKLWXVHVWRDVFHUWDLQWKHVWDWXVRIVXSSOLHUV¶VXVWDLQDEOHSURFXUHPHQWSUDFWLFHV7KHTXHVWLRQQDLUHIXUWKHUVHJPHQWVWKH*URXS¶VHLJKWSURFXUHPHQWJXLGHOLQHVLQWRLVVXHVDIC Group Sustainable Procurement Guidebook 9HUVLRQSXEOLVKHGLQ)HEUXDU\  (QJOLVK 
https://www.dic-global.com/pdf/about/purchase/dic_sc_csr_en.pdf| Analyzing the Results of Questionnaires,Q¿VFDO\HDUWKH',&*URXSFRQGXFWHGDVVHVVPHQWVIRUQHZDQGFRQWLQXLQJVXSSOLHUVXVLQJYHUVLRQRIWKH
DIC Group Supply-chain CSR Deployment Guidebook DVLWZDVWKHQFDOOHG 7KLVEURXJKWWKHWRWDOQXPEHURIVXSSOLHUV
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WKH*URXSZLOOEHJLQFRQGXFWLQJDVVHVVPHQWVXVLQJYHUVLRQRIWKHJXLGHERRN| Conducting On-Site Inquiries

Equivalent to 90%-plus ofprocurement spending

Cumulative Number ofSuppliers Assessed(November 2013–December 2019)

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VLWHLQTXLU\WKH*URXSDQGWKHVXSSOLHUFRQ¿UPWKHVHOIHYDOXDWLRQSURYLGHGYLDWKHTXHVWLRQQDLUHDQGGLVFXVVFRUUHFWLYHPHDVXUHV2WKHUHIIRUWVLQFOXGH
LQWURGXFLQJH[DPSOHVRI*URXS(6*LQLWLDWLYHVWRDVVLVWWKHHIIRUWVRIVXSSOLHUVWRUHDOL]HVXVWDLQDELOLW\| Global Procurement Initiatives,Q¿VFDO\HDUSURFXUHPHQWRI¿FHUVLQ-DSDQDQG*UHDWHU&KLQDFRRSHUDWHGWRFRQGXFWRQVLWHLQTXLULHVIRUVXSSOLHUVLQNH\EXVLQHVVHVLQWKH35&
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| Ensuring the Sustainable Procurement and Use of Raw Materials
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DIC Report 2020 ̲54

Business Models that Respond to Social Imperatives

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

https://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 andproviding products that respond to 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 Groupwill advance qualitative reforms in existing core businesses by shifting to businesses with differentiated high-value-added products andwith 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.

| Designing a Framework for New Pillar Creation
Having established the New Business Development Headquarters to serve as the deployment team and identified four priority business areas(electronics, automotive, next-generation packaging and healthcare), the DIC Group will leverage its ingenuity to advance the creation of new
products that are useful to society and next-generation businesses with the potential to become mainstays.
The DIC Group will also bring together people from technical and sales backgrounds with detailed understanding of these business areas andpeople with experience in related industries with the aim of enhancing expertise and communications capabilities, as well as make active use of open
innovation—including through participation in initiatives involving collaboration between industrial concerns and academia and by capitalizing on
H[WHUQDOUHVRXUFHV²WRSURPRWHWKHWLPHO\GHYHORSPHQWDQGFRPPHUFLDOL]DWLRQRISURGXFWVWKDWEHQH¿WVRFLHW\| Examples of New Pillar Creation
1 Developing and Providing Sustainable Products and Solutions in the Packaging Field

Enhanced measures to cope with waste plastic and marine plastics

In addition to reducing emissions of CO 2, a key cause of global warming, the DIC
Group has positioned the issue of marine plastics, which impacts the environment andecosystems, as a pressing issue and has established a project aimed at reinforcing
its efforts to address this challenge that involves multiple departments dealing withpackaging materials. The project is promoting the development of materials andtechnologies in line with the “4Rs” (“Recycle, Reduce, Reuse and Redesign”) of
packaging with the goal of deploying new bioderived raw materials and circular
packaging. Looking ahead, the Group will also seek to address this challenge by
broadening its approach to include the entire packaging materials supply chain,advancing the development of products suitable for monomaterials, easily peelable ink
solutions and technologies to prevent the deterioration of recyclable plastics, among
others, thereby contributing to the realization of more sophisticated recycling.

Focus on packaging materials
Raw materials

Films for printing

Packagingmaterials
supply chain■ Develop technology which
can use chemically recyclable
materials and bioderived raw materials■ Develop films suitable forrecycling, such as easily
separable multilayer
and monomaterials

Consumption

Recovery and sorting

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

2 Leveraging BioreÀnery Technologies to Help Realize Decarbonization through the Development of a Biodegradable SAP%LRUH¿QHU\WHFKQRORJLHVZKLFKPDNHLWSRVVLEOHWRXVHELRPDVVDUHQHZDEOHUHVRXUFHUDWKHUWKDQSHWUROHXPGHULYHGUDZPDWHULDOVLQWKH
production of chemicals, are attracting increasing attention around the world. Since summer 2019, the DIC Group and Tokyo-based biotech
startup Green Earth Institute Co., Ltd. (GEI) have promoted joint research aimed at developing a naturally derived aspartic acid–based
biodegradable waterborne superabsorbent polymer (SAP). In this initiative, GEI—which boasts outstanding expertise in the development ofgreen chemicals—is charged with developing naturally derived aspartic acid using an innovative fermentation technology that absorbs CO2.
DIC’s role is to create a process for polymerizing the new aspartic acid and to explore ways toscale up the production system.
Principal applications for conventional SAPs include paper diapers, soil modifiers andcosmetics. However, because such SAPs are petroleum-derived, they are a major cause ofmarine plastics and waste plastic. The SAP under development by the DIC Group and GEI is
made with a recyclable material, making it biodegradable, and is thus expected to contribute toboth the realization of environment-friendly products that help resolve these issues as well as todecarbonization and the reduction of waste plastic.
Aspartic acid–based biodegradable waterborne SAP

55̲ DIC Report 2020

New Technology Development and Value Creation

SDGs Goals 9 and 12
QR codeProposing Solutions that Leverage Core Technologies
https://www.dic-global.com/en/csr/new_technology/| 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 polymer 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 new technologies 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 theenvironmental performance of the products in which they are used, which it has positioned as environment-friendly products. In Japan, the Group devotes approximately 50%
of its technological resources to the development of such products.

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

Core Technologies
Polymer synthesis

Crystallization

Organic
molecular
designColoring
Opticsand color

Adhesion
Molding

Resin curing
Polymer
designLiquid/liquid dispersion

Basic
Technologies

Dispersion

Applicability
assessment(Coating/printing/molding/adhesion)

Film formation

Compounding and formulation

Solid/liquid dispersion
Rheology

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

Surface treatment

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

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

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

Healthcare

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. (For more information, please see page 42.) Conscious always of the importance of ensuring
its products are environment-friendly, DIC promotes the development of products and new technologies that are useful to society and works to increase the weighting ofenvironment-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 “environmentfriendly” and works to increase the weighting of products that have earned this designation in their portfolio.
,Q¿VFDO\HDUHQYLURQPHQWIULHQGO\SURGXFWVDFFRXQWHGIRURIDOOSURGXFWVSXWRXWE\',&DQGVXEVLGLDU\',&*UDSKLFV7KH*URXSDOVRVWULYHVWRPDLQWDLQDVROLG
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 withdiverse regulations governing the use of chemical substances in different markets—and conducts environmental assessments on a continuous basis.
For printing inks, adhesives and other products used in food packaging, which the Group supplies to customers around the world, the DIC Group has established a global
product stewardship team. The team shares information on regulations and relevant topics from different markets, as well as promotes awareness thereof and provides education.
.QRZOHGJHWKXVJDLQHGLVLQFRUSRUDWHGLQWRSURGXFWGHVLJQDQGXVHGWRSURGXFHFRPSOLDQFHFHUWL¿FDWHVDFURVVWKHVXSSO\FKDLQZKLFKDUHHVVHQWLDOIRUFXVWRPHUVZRUOGZLGHVOICE We developed a 100% biomass-derived polyester plasticizer.
2XUJURXSKDVGHYHORSHGDQH[WHQVLYHUDQJHRISRO\PHUPRGL¿HUVWKDWLQFOXGHVSODVWLFL]HUVVWDELOL]HUVDQGKLJKO\IXQFWLRQDOPRGL¿HUV,QUHFHQW\HDUVZH
KDYHZRUNHGWRDGGYDOXHWRWKH',&*URXS¶VPRGL¿HUVZLWKWKHDLPRIFRQWULEXWLQJWRWKHUHDOL]DWLRQRIWKH6'*VDQGWRVXVWDLQDELOLW\,Q¿VFDO\HDU
we succeeded in developing Polycizer W-1810-BIODSRO\HVWHUSODVWLFL]HUWKDWVDWLV¿HVDOOWKHEDVLFSHUIRUPDQFHUHTXLUHPHQWVRISRO\HVWHUSODVWLFL]HUV\HW
LVGHULYHGHQWLUHO\IURPELRPDVVUHVRXUFHV7KLVSURGXFWHDUQHG%LRPDVV%LRPDVV0DUNFHUWL¿FDWLRQIURPWKH-DSDQ2UJDQLFV5HF\FOLQJ$VVRFLDWLRQ(JORA). The reaction to this new product has been extremely positive and it has earned solid marks in a variety of applications.
Assistant Manager, Polymer Technical Group 10, Polymer Technical Division 2, DIC Corporation

Takafumi Noguchi

DIC Report 2020 ̲56

Harmony with the Community and Social Contributions

SDGs

Goals 3 and 4
QR codeAdding Color & Comfort to Lifestylehttps://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. Through this program, the Group seeks to spark children’s interest in science and encourage them to realize the close relationshipbetween science and their everyday lives. Designed with the aim of making science fun for children and helping them understand how the study
RIVFLHQFHEHQH¿WVVRFLHW\WKHODEVHQWDLOH[SHULPHQWVLQV\QWKHVL]LQJSLJPHQWVDQGSODQRJUDSKLFSULQWLQJWKDWLVSULQWLQJIURPDÀDWVXUIDFH
6LQFHODXQFKLQJWKLVLQLWLDWLYHLQWKHWZRFRPSDQLHVKDYHSURYLGHGFODVVHVDWHOHPHQWDU\VFKRROVIRUDSSUR[LPDWHO\VL[WKJUDGHUVIn fiscal year 2019, the DIC Group also conducted a visiting science lab for elementary school students as part of the Tohoku
University Graduate School of Engineering’s Science Campus project. The lab was well received by both participating children and theirparents. The Group pledges to continue offering visiting science labs in the years ahead.
Visiting science lab

Comment This is an initiative that makes one aware of the satisfaction of being a leader in the advancement of society through chemistry.
Engineers and researchers from various companies serve as instructors for hands-on classes conducted as part of the Tohoku University
Graduate School of Engineering’s Science Campus program, an initiative that seeks to provide children with an opportunity to gain an
XQGHUVWDQGLQJRIFUDIWVPDQVKLSZKLFKSOD\VDQLPSRUWDQWUROHLQHYHU\GD\OLIHDVZHOODVWRDFWXDOO\H[SHULHQFHPDQXIDFWXULQJDQGFRQGXFWH[SHULPHQWVFORVHO\OLQNHGWRWKHODWHVWVFLHQWL¿FDQGWHFKQRORJLFDODGYDQFHVIn addition to fueling children’s interest in manufacturing, and in science and technology, this initiative seeks to cultivate a new generation of
HQJLQHHULQJWDOHQWE\HQDEOLQJWKHPWRLQWHUDFWGLUHFWO\ZLWKLQGLYLGXDOVLQUHODWHG¿HOGVJLYLQJWKHPDQLGHDRIWKHFDUHHUSDWKVDYDLODEOHWRWKHPin the future. We believe it is important to provide children with stimulation in various forms, and the DIC visiting science lab was particularlyYDOXDEOHLQWKDWUHJDUG:HDOVRUHFHLYHGSRVLWLYHFRPPHQWVIURPSDUHQWV2QHH[SUHVVHGWKDWWKHODEKDGJLYHQFKLOGUHQDUHQHZHGDSSUHFLDWLRQ
of the role of chemistry in their everyday lives, while another felt that encouraging children to see chemistry as something familiar would make
WKHPOLNHVFLHQFHEHWWHU<HWDQRWKHUFRPPHQWHGWKDWH[SHULHQFLQJWKHSRZHURIFKHPLVWU\WRDGGFRORUDQGHQULFKOLIHZRXOGHQFRXUDJHFKLOGUHQ
to see it as something they would like to do professionally in the future.
Associate Professor, Graduate School of Engineering and Vice-Director, Innovation Plaza, School of Engineering, Tohoku University

Hajime Nakamura

Initiatives Led by the Kashima Plant
In December 2019, DIC’s Kashima Plant, in Ibaraki Prefecture, conducted a visiting science lab at local Super Science High School* Seishin Gakuen’s Super Seminar, asocial contribution initiative that also involved three other companies with operations in Kashima as well as Juntendo University. The lab featured a presentation titled “Learning
About the Colors Around Us,” which covered such topics as the properties of color and light, products that leverage these properties, the names given to colors, primary
FRORUVDQGH[DPSOHVRISLJPHQWV\QWKHVLV7KHODEDOVRLQFOXGHGDQH[SHULPHQWLQH[WUDFWLQJWKHQDWXUDOEOXHSLJPHQWIURP6SLUXOLQD$WRWDORIVWXGHQWVSDUWLFLSDWHGLQWKH
lab. The Kashima Plant will continue to take part in initiatives designed to communicate the joy of chemistry to students at schools in its community.
* “Super Science High School” is a designation awarded by Japan’s Ministry of Education, Culture, Sports, Science and Technology to senior and junior/senior high schools that implement curricula focused on theVFLHQFHVDQGPDWKHPDWLFVWKDWJRHVEH\RQGWKH0LQLVWU\¶VRI¿FLDOJXLGHOLQHVZLWKWKHDLPRIIRVWHULQJWKHQH[WJHQHUDWLRQRIWDOHQWHGHQJLQHHUVDQGVFLHQWLVWVKawamura Memorial DIC Museum of Art
7KH.DZDPXUD0HPRULDO',&0XVHXPRI$UWORFDWHGDGMDFHQWWRWKH&HQWUDO5HVHDUFK/DERUDWRULHVLQ6DNXUD&KLED3UHIHFWXUHZDVHVWDEOLVKHGLQWRSXEOLFO\H[KLELWZRUNVRIDUWFROOHFWHGE\',&&RUSRUDWLRQDQGLWVDI¿OLDWHV,QWKHPXVHXPLVFHOHEUDWLQJLWVWKDQQLYHUVDU\$VRI'HFHPEHUFXPXODWLYHYLVLWRUVWRWKHPXVHXPKDGVXUSDVVHGPLOOLRQ',&YLHZVRSHUDWLRQ
of the museum, which assumed its current name in 2011, as a social contribution initiative that the DIC Group is uniquely positioned to undertake as an organization intrinsically involved in color.
7KHPXVHXP¶VH[WHQVLYHFROOHFWLRQVSDQVQXPHURXVJHQUHVHQFRPSDVVLQJZRUNVE\5HPEUDQGW,PSUHVVLRQLVWVVXFKDV0RQHWDQG5HQRLUPRGHUQ(XURSHDQDUWLVWVVXFKDV3LFDVVRDQG&KDJDOOHDUO\PRGHUQPRGHUQDQGSRVWZDU-DSDQHVHDUWLVWVDQGOXPLQDULHVRIODWHWKFHQWXU\$PHULFDQDUWLQFOXGLQJ0DUN5RWKNR&\7ZRPEO\DQG)UDQN6WHOOD,QDGGLWLRQWRDVWDQGLQJH[KLELWIURPLWVSHUPDQHQWFROOHFWLRQRIPRUHWKDQPDMRUZRUNVWKHPXVHXPVWDJHVVSHFLDOH[KLELWLRQVVHYHUDOWLPHVD\HDUWKDWIRFXVRQSHUWLQHQWOLWHUDU\ZRUNVDQGRWKHUDUWLIDFWVWKDWHYRNHWKHFXOWXUDO
atmosphere at the time works were created to help visitors better understand the collection. Another appealing aspect of the museum is its location on a
OXVKO\IRUHVWHGKHFWDUHVLWHDOLYHZLWKVHDVRQDOÀRZHUVDQGIROLDJHWKDWKDVEHHQRSHQWRWKHSXEOLFVLQFHWKHPXVHXP¶VHVWDEOLVKPHQWIn a move aimed at promoting relations with the local community and fostering local cultural activities, the Kawamura Memorial DIC Museum of$UWKDVHVWDEOLVKHGDQDQQH[JDOOHU\RQWKHPXVHXPVLWHWKDWVHUYHVDVDQH[KLELWLRQVSDFHIRUORFDODPDWHXUDUWLVWVDQGLVDOVRPDGHDYDLODEOHWR
HOHPHQWDU\DQGMXQLRUDQGVHQLRUKLJKVFKRROVLQWKH6DNXUDDUHDIRUDQH[KLELWLRQRIORFDOVWXGHQWV¶ZRUNV,QWKHIXWXUHWKHPXVHXPZLOOFRQWLQXHWRKROGH[KLELWLRQVDVVRFLDWHGZLWKWKHFROOHFWLRQDQGSURPRWHVRFLDOFRQWULEXWLRQDFWLYLWLHVZLWKDQDZDUHQHVVKawamura Memorial DIC Museum of Art
of communication with the local community.

Matching Gift Program',&KDVDPDWFKLQJJLIWSURJUDPZKHUHE\LWPDWFKHVWKHWRWDODPRXQWFROOHFWHGWKURXJKDQDQQXDO\HDUHQGIXQGUDLVLQJGULYHVSHDUKHDGHGE\LWVHPSOR\HHV¶XQLRQ)XQGVUDLVHGWKURXJKWKHGULYHDQGPDWFKLQJJLIWSURJUDPZHUHGRQDWHGWRFKLOGUHQ¶VKRPHVDQGIDFLOLWLHVSURYLGLQJVXSSRUWIRUGLVDEOHGLQGLYLGXDOV

57̲ DIC Report 2020

Communication with Stakeholders

SDGs Goal 17
QR codePromoting Disclosure and Communication
https://www.dic-global.com/en/csr/stakeholder/

7KH ',& *URXS SODFHV D SULRULW\ RQ FRPPXQLFDWLRQ ZLWK LWV VWDNHKROGHUV ZRUOGZLGH DV RXWOLQHG LQ$UWLFOH  RI LWV 3ROLF\ RQ
Corporate Governance.

Article 7 (Ensuring Appropriate Information Disclosure and Transparency)
7KH &RPSDQ\ VKDOO HQVXUH WUDQVSDUHQF\ DQG IDLUQHVV DQG LQ RUGHU WR JDLQ WKH FRUUHFW XQGHUVWDQGLQJ DQG WUXVW IURPstakeholders, 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

Ties with customers

Basic approach

Communications
tools

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.

● Websites● Press conferences● Quarterly results● DIC Group Sustainable Procurement● DIC Plaza●Yuka Shoken Hokokusho● Supplier sustainable procurement● Websites● Site reports● &RUSRUDWHSUR¿OH'9'V● DIC Report● News releases● Television advertisements● Press conferences● Interviews with journalists● DIC Report● News releases● Television advertisements● Production facility tours● Participation in projects involving● Labor–management councils● Results presentations

announcements(¿QDQFLDOGLVFORVXUHGRFXPHQWUHTXLUHG
of listed companies in Japan)● Timely disclosure● Notice of Convocation of
the Annual General Meetingof Shareholders● Shareholder newsletters● &RUSRUDWHSUR¿OH'9'V

Guidelines● DIC Group Green Procurement

Guidelines

questionnaires● )HHGEDFNVKHHWV● &RQÀLFW0LQHUDOV5HSRUWLQJ

Template● DIC Report(in-house newsletter)● Intranet● DIC Pocket Book LQKRXVH*URXSGDWD¿OH ● DIC Report● Corporate PR film
● News releases● Television advertisements● Global linkage● Branding questionnaire● DIC Report● News releases● Television advertisements● Sales activities● Participation in

Opportunities forcommunication

 H[KLELWLRQV● Lectures on the SDGs

for customers● General shareholders’meetings● Results presentations● IR conferences● IR meetings● DIC IR Day● Individual investor
briefings

Ties with
Customers● On-site inquiries

collaboration among industrial
concerns, government bodies andacademic institutions● Participation in community events● Environmental monitoring● Kawamura Memorial DIC
Museum of Art● Plant Bon Odori

for employees● Presentations on the DIC Group● Newspapers● Economic publications● Industry publications

Code of Business Conduct● Sustainability presentations● ',&)DPLO\'D\● Plant tours for employee families● Caravan workshops

Ties withSociety

Ties with theMedia

Press conferences heldin Àscal year 2019

56
Interviews with journalistsin Àscal year 2019

CITE Japan 2019

CHINACOAT 2019

Ties with
Shareholders
and Investors

5HVXOWVSUHVHQWDWLRQ )HEUXDU\

&KLED6FLHQFH6FKRRO)HVWLYDODIC Report

60

Ties with
Employees

Presentation following the announcement
RI',&¶VDFTXLVLWLRQRI%$6)¶V&RORUV 
Effects businessResults presentation for employees)HEUXDU\

Caravan workshop

DIC Plaza(in-house newsletter)

DIC Report 2020 ̲58

Financial Report for Fiscal Year 2019
| Analysis of Results of Operations
Overview of Operating Results(Billions of yen)

FY2018Change(%)

FY2019Change (%)[Local currency basis]

Net sales

805.5

768.6

- 4.6%-1.3%

Operating income

48.4

41.3

-14.6%-8.7%

Ordinary income

48.7

41.3

-15.2%-Net income attributable to ownersof the parent

32.0

23.5

-26.6%-EBITDA*

81.4

67.4

-17.2%-

Average exchange rate (¥/US$)

110.46109.11-1.2%-

Average exchange rate (¥/EUR)

130.46122.13- 6.4%-* EBITDA = Net income attributable to owners of the parent + Total income taxes + (Interest expenses – Interest income) + Depreciation and amortization

In fiscal year 2019, consolidated net sales slipped 4.6%, to ¥768.6 billion. On a local currency basis, however, the decrease
was only 1.3%. Owing to the impact of slowing global economic growth, shipments sank in a wide range of businesses,
centering on materials used in electrical and electronics equipment and in automobiles.
Operating income was down 14.6%, to ¥41.3 billion, or 8.7% on a local currency basis. In addition to falling shipments,
particularly of high-value-added products, these results reflected flagging sales prices for some products. A decline inresults overseas after translation, a consequence of yen appreciation, also pushed operating income down. Thanks to theimpact of raw materials price decreases and of cost reductions achieved through rationalization, the decline narrowed after
bottoming out in the first quarter. Of particular note, operating income in the PRC and Southeast Asia turned positive in thesecond quarter.
Ordinary income was down 15.2%, to ¥41.3 billion. Net income attributable to owners of the parent fell 26.6%, to ¥23.5
billion. This reflected an extraordinary loss arising from efforts to improve business efficiency, as well as one-time disasterand acquisition-related expenses. EBITDA declined 17.2%, to ¥67.4 billion. Factors behind this included the drop in net income
attributable to owners of the parent.

Segment Results(Billions of yen)

Net sales

Operating income (loss)
Change (%)

FY2018FY2019Change(%)[Local currency basis]

Packaging & Graphic

434.7

416.4

-4.2%

Color & Display

124.1

116.4

Functional Products

282.1

Others, Corporate and eliminations
Total

Change(%)

FY2019

0.6%

19.9

19.2

-3.6%

8.0%

-6.2%

-3.8%

15.0

10.8

-28.0%-25.4%

268.6

-4.8%

-3.6%

20.8

19.2

-7.6%

-6.6%

(35.4)(32.8)

-

-

(7.3)

(7.9)

-

-

805.5

768.6

-4.6%

-1.3%

48.4

41.3

-14.6%-8.7%

Note: Effective from January 1, 2019, DIC revised its segmentation to coincide with the launch of its new medium-term management plan, DIC111.
$FFRUGLQJO\¿JXUHVIRU¿VFDO\HDUKDYHEHHQUHVWDWHG
For information on DIC111, please visit: https:/ /www.dic-global.com/en/ir/management/plan.html

59̲ DIC Report 2020

Change (%)

FY2018[Local currency basis]

Packaging & Graphic
FY2018FY2019Change (%)[Local currency basis]

Change (%)

Net sales¥434.7 billion¥416.4 billion

-4.2%

0.6%

Operating income¥19.9 billion¥19.2 billion

-3.6%

8.0%

Segment sales slipped 4.2%, to ¥416.4 billion. Although sales edged up 0.6% on a local currency basis, the depreciation of theeuro and emerging economy currencies led to a decrease after translation into yen. In the area of materials for food packaging,sales of packaging inks rose, particularly in emerging economies in Asia and South America. In contrast, sales of polystyrene
languished, despite an increase in shipments, as raw materials price decreases prompted the reduction of sales prices. Salesof publication inks, which center on publishing inks and news inks, were down, owing to an ebb in overall demand. Sales of jet
inks for digital printing rose.
Segment operating income slipped 3.6%, to ¥19.2 billion. On a local currency basis, operating income rose 8.0%, benefitingfrom the positive impact of an improved product mix and rationalization efforts, as well as from a decrease in raw materials
prices, particularly in the PRC and Southeast Asia. As with segment sales, however, this translated into a decline on a yen basis.

Color & Display
FY2018FY2019Change (%)

Change (%)[Local currency basis]

Net sales¥124.1 billion¥116.4 billion

-6.2%

-3.8%

Operating income¥15.0 billion¥10.8 billion-28.0%-25.4%

Segment sales, at ¥116.4 billion, were down 6.2%. In the area of color materials, shipments of pigments for cosmetics andgeneral-purpose pigments flagged, hampered by trade friction. In display materials, shipments of pigments for color filters
were firm, although sales of TFT LCs sank, hindered by sagging sales prices, a consequence of intensifying competition.
Segment operating income plunged 28.0%, to ¥10.8 billion. Contributing factors included sales price reductions for TFT LCs
and waning shipments of general-purpose pigments. Operating income was also constrained by the tightening of environmental
regulations in the PRC, as well as by increases in prices for pigments raw materials attributable to trade friction.

Functional Products
FY2018FY2019Change (%)[Local currency basis]

Change (%)

Net sales¥282.1 billion¥268.6 billion

-4.8%

-3.6%

Operating income¥20.8 billion¥19.2 billion

-7.6%

-6.6%

Segment sales decreased 4.8%, to ¥268.6 billion. While applications for PPS compounds continue to expand thanks to thetrend toward lighter and increasingly electrified vehicles, shipments remained low, reflecting a downtrend in automobile
production worldwide. Flagging economic conditions pushed down sales of epoxy resins and industrial tapes, the principal
applications for which are smartphones and semiconductors. Sales of synthetic resins remained sluggish overall, despite
bottoming out in the first quarter.
Segment operating income was down 7.6%, to ¥19.2 billion. Despite this decrease, which stemmed from dwindling shipments
overall, the operating margin improved gradually, as shipments of epoxy resins and other high-value-added products picked up
after bottoming out in the first quarter and raw materials prices decreased.

DIC Report 2020 ̲60

|Consolidated Financial Statements
Consolidated Balance Sheet

As of December 31, 2018 and 2019

（Millions of yen）

2018

2019

AssetsCurrent assets
Cash and deposits

19,782

16,786

Notes and accounts receivable–trade209,763

211,232

0HUFKDQGLVHDQG¿QLVKHGJRRGV

94,611

91,555Work in process

9,403

9,566

Raw materials and supplies

61,93758,610Other

23,87821,607

Allowance for doubtful accounts(9,722)(9,437)

Total current assets

409,652

399,919

259,417

262,087

Accumulated depreciation(170,525)(173,547)

Buildings and structures, net

88,89288,540Machinery, equipment and vehicles

403,877

408,064(332,926)(337,197)

70,951

70,867

7RROVIXUQLWXUHDQG¿[WXUHV

63,29164,386

Accumulated depreciation(51,896)(53,195)

7RROVIXUQLWXUHDQG¿[WXUHVQHW

11,395

11,191

Land

48,98551,961

Construction in progress

7,928

9,616

228,151

232,176

Goodwill

34

762

Software

2,887

2,585

Customer-related assets

3,359

2,674

Other

7,502

5,782

Total intangible assets

13,782

11,804

Investment securities

67,52359,313

Deferred tax assets

33,31333,192

1HWGH¿QHGEHQH¿WDVVHW

25,08944,339Other

23,94723,020Allowance for doubtful accounts

(161)

(680)

Total investments and other assets

149,711

159,184

391,644

403,164

801,296803,083

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 non-current assets
Total assets

61̲ DIC Report 2020

Consolidated Balance Sheet

As of December 31, 2018 and 2019

（Millions of yen）

2018

2019

Liabilities
Current liabilities
Notes and accounts payable–trade

118,554

108,562

Short-term loans payable

29,986

20,139Current portion of long-term loans payable

49,792

23,456

Lease obligations

667

1,244

Income taxes payable

2,843

2,556

Provision for bonuses

6,283

5,724

Other

47,47648,445

Total current liabilities

255,601

210,126

Bonds payable

60,00080,000Long-term loans payable

119,791

122,602

Lease obligations

4,229

5,191

Deferred tax liabilities

2,807

8,768

1HWGH¿QHGEHQH¿WOLDELOLW\

20,51921,377

Asset retirement obligations

1,482

1,696

Other

9,533

9,826

218,361

249,459

473,962

459,585

Capital stock

96,55796,557

Capital surplus

94,44594,456

Retained earnings

207,421

218,209

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

Total shareholders’ equity

396,600

407,398

1,407

1,676

14

683

Foreign currency translation adjustment(67,617)(72,671)

5HPHDVXUHPHQWVRIGH¿QHGEHQH¿WSODQV(31,508)(24,346)

Total accumulated other comprehensive income(97,704)(94,658)

Non-controlling interests

28,43830,757

Total net assets

327,334

343,497

801,296803,083

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 2020 ̲62Consolidated Statement of Income

Years ended December 31, 2018 and 2019
（Millions of yen）

2018

2019

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*DLQRQVDOHVRIVXEVLGLDULHVDQGDI¿OLDWHVVHFXULWLHV
Insurance income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary loss
Impairment loss
Loss on disposal of non-current assets
Acquisition-related expenses
Loss on disaster
Severance costs
Provision of allowance for doubtful accounts
Amortization of past service costs/RVVRQVDOHVRIVXEVLGLDULHVDQGDI¿OLDWHVVHFXULWLHV
Total extraordinary loss
Income before income taxes and non-controlling interests
Income taxes–current
Income taxes–deferred
Total income taxes
Net income

805,498
629,850
175,648768,568
603,199
165,369

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

13,104
41,742
995
2,233
1,043
12,50552,414
124,037
41,332

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

2,420
414
2,475
1,692
7,001

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

3,724
811
2,496
7,031
41,302

679
237
431
3,270
4,617

1,624
1,409
1,401
−
4,435

−
2,535
−
409
1,539
−
−
−
4,483
48,836
11,015
4,019
15,03433,802

Net income attributable to non-controlling interests
Net income attributable to owners of the parent

1,774
32,028

3,078
2,399
1,914
1,520
840
551
443
316
11,061
34,676
7,869
1,461
9,330
25,346
1,846
23,500Consolidated Statement of Comprehensive Income

Years ended December 31, 2018 and 2019
（Millions of yen）

2019

2018
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 to:Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests

63̲ DIC Report 2020

33,802

25,346(6,502)
17(20,203)(9,413)(1,545)(37,646)(3,844)327
669(4,394)
7,269
(744)
3,127
28,473(4,863)
1,019

26,546
1,927

Consolidated Statement of Changes in Net Assets Years ended December 31, 2018 and 2019
Fiscal year ended December 31, 2018

（Millions of yen）

Shareholders’ equity
Capital stock

Capital surplus

96,557

94,445

Balance at January 1, 2018

Retainedearnings

Treasury shares

Total
shareholders’ equity(1,828)375,942

186,768

Change in FY2018
Dividends from surplus(11,375)

Net income attributable to owners of the parent

32,028(11,375)
32,028Purchase of treasury shares

(10)

(10)

Disposal of treasury shares

15

15

Net changes of items other than shareholders’ equity
Total change in FY2018
Balance at December 31, 2018−−

20,653

5

20,65896,557

94,445

207,421(1,823)396,600（Millions of yen）

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities

Balance at January 1, 2018

Deferred gains orlosses on hedges

Foreign currencytranslation
adjustment

Remeasurementsof deÀned
beneÀt plans

Total accumulated
other comprehensive
income(3)(46,462)(22,222)(60,813)

7,874

Non-controllinginterests

Total
net assets

28,822

343,951

Change in FY2018
Dividends from surplus(11,375)

Net income attributable to owners of the parent

32,028Purchase of treasury shares(10)

Disposal of treasury shares
Net changes of items other than shareholders’ equity

15
17(6,467)(21,155)(9,286)(36,891)(384)(37,275)

Total change in FY2018(6,467)

17(21,155)(9,286)(36,891)(384)(16,617)

Balance at December 31, 2018

1,407

14

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

28,438327,334

Fiscal year ended December 31, 2019

（Millions of yen）

Shareholders’ equity
Capital stock

Capital surplus

96,557

94,445−−96,557

94,445

Balance at January 1, 2019
Cumulative effects of changes in accounting policies
Restated balance

Retainedearnings

Treasury shares

Total
shareholders' equity

207,421(1,823)396,600

(774)

−

(774)

206,647(1,823)395,826

Change in FY2019
Dividends from surplus(11,849)

Net income attributable to owners of the parent

23,500(11,849)
23,500Purchase of treasury shares(7)

Disposal of treasury shares

6

Change in scope of consolidation
Change in ownership interest of parent due to transactions
with non-controlling interests
Net changes of items other than shareholders’ equity

(7)
6

(90)

(90)

11

Total change in FY2019
Balance at December 31, 2019

11

−

11

11,561(1)

11,57296,557

94,456218,209(1,823)407,398（Millions of yen）

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities

Balance at January 1, 2019
Cumulative effects of changes in accounting policies
Restated balance

Non-controllinginterests

Total
net assets(97,704)

28,438327,334

−

−

(774)

(97,704)

28,438326,560

Deferred gains orlosses on hedges

Foreign currencytranslation
adjustment

Remeasurementsof deÀned
beneÀt plans

Total accumulated
other comprehensive
income1,407

14(67,617)(31,508)

−

−

−

−

1,407

14

(67,617)(31,508)

Change in FY2019
Dividends from surplus(11,849)

Net income attributable to owners of the parent

23,500Purchase of treasury shares(7)

Disposal of treasury shares
Change in scope of consolidation
Change in ownership interest of parent due totransactions with non-controlling interests
Net changes of items other than shareholders’ equity

6
(90)
11
269

670

(5,055)

7,161

3,046

2,320

5,365

Total change in FY2019

269

670

(5,055)

7,161

3,046

2,320

16,937

Balance at December 31, 2019

1,676

683

(72,671)(24,346)(94,658)

30,757343,497

DIC Report 2020 ̲64

Consolidated Statement of Cash Flows Years ended December 31, 2018 and 2019
（Millions of yen）

2018
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
Loss (gain) on sales and retirement of non-current assets
Impairment loss
/RVV JDLQ RQVDOHVRIVXEVLGLDULHVDQGDI¿OLDWHVVHFXULWLHV
Loss (gain) on sales of investment securities
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 purchase of shares and investments in capital of subsidiaries resulting in change in scope of consolidation
Proceeds from sales of 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
Net cash provided by (used in) Ànancing activities
Net 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

65̲ DIC Report 20202019
48,83632,825
156
(263)
(782)
(4,206)(3,845)
5,114
2,104
−
(679)
(3,270)
6,897(14,516)
3,966(9,524)62,813
6,307(5,050)(13,080)
50,99034,67633,12799
559(561)(2,834)(2,475)
3,724
997
3,078
(1,308)−(3,054)4,614(9,802)(3,543)57,298
4,335(3,865)(7,132)
50,637(3,832)
2,893(31,343)
1,336
(741)
(11,524)
−
679
(157)
671
(509)
4,150
(690)
679
(38,388)(3,685)4,740(34,042)
1,613
(919)
(1,558)
235
900
−
9,508
(350)
134
(96)
(1,363)(24,884)(29,689)
60,627(39,204)
10,000(11,375)(1,348)
5
(62)
(735)
(11,781)159
980
17,651
18,631(9,383)40,250(63,513)
20,000(11,849)
(767)
(1)
(186)
(1,351)(26,799)(895)(1,941)
18,631
16,690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 2020 ̲66

112 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.

67̲ DIC Report 2020

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 and 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 (ICCA), as befits its
status as a member of the global communityof fine chemicals 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 printed wiring boards.

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 2019, has been included in theindex for five consecutive years.

DIC Report 2020 ̲68

（Contact）

Corporate Communications Dept.
Sustainability Dept.
DIC Building, 7-20, Nihonbashi 3-chome, Chuo-ku, Tokyo 103-8233, Japan
Tel: +81-3 - 6733 - 3034

Fax: +81-3 - 6733 - 3038

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

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