Making People Happy

Together with Employees
Creating a Comfortable Working Environment
Diversity initiatives

Aiming to Become an “Exciting Company”

Management
missionOrganizational
vision● Promotion of diversity
Sakai Chemical Industry has established a Diversity Working Groupto raise diversity awareness among employees. In FY2022, theCompany had employees respond to a diversity-awarenessquestionnaire twice.
1st questionnaire survey conducted in May 2022: 350 respondents
2nd questionnaire survey conducted in February 2023: 461 respondents
The number of respondents who answered “I understand diversity
well/roughly” has increased approximately 2.5-fold over the past year.

Chemistry for a Friendly Future
Creating materials that support the comfort
and security of society through compassion
and technological innovation

Exciting Company
We will build an exciting company together.

Permeation level of diversity awareness（%）

May 2022

February 2023

80

Exciting Action Plan

«Vision of the ideal employee behavior»

Employees

Sharing the same goal to foster a sense of unity
Promoting innovations that change the world➡ Act in line with the mission and vision

Taking on new challenges to be true to our word

Always think and act from the perspectives of others
Take the initiative in doing or producing a first-ever thing
Continue to tackle challenges without imposing any
limitations on one’s own action
Always value words of gratitude and grievances

Valuing words of gratitude as a source of pride in our work

67
60

49
40

27

32
24

20

Corporate culture, systems,
and mechanisms

Personnel system (including salaries, evaluation, and employee welfare)

We are working to create a comfortable working environment through the measures described below so that our employees can feel proudof, confident in, and satisfied with their own work, which means that they can work with excitement.

Foster Human Resources and Create a Corporate
Culture Where Employees Can Feel Their Growth
Basic Human Resources Development Policy
1. Enhance commercialization awareness through active work-related communication with internal and external parties
2. Develop a flexible environment where diverse personnel can work in good health
3. Systematically implement hiring and training to ensure diversity
4. Encourage self-development and the acquisition of official qualifications
5. Implement measures to support employees’ understanding and action regarding the realization of a sustainable society● Career development support● Development of management human resources

Sakai Chemical Industry has all employees submit a self-assessment
sheet every year. They review their own personal growth over the
past year, set their own action goal to advance to the next step, andhave a career interview with the manager of the organization towhich they belong. Aside from the personnel evaluation results, they
confirm their own achievements to date, based on which they set
their goal for the next term.
Nevertheless, Sakai Chemical Industry’s deviation value in the
FY2022 engagement survey result was 47.5, while that in the entire
chemical industry was 50.5. This figure suggests that the Company
should solve the challenge of adopting measures to allow employees
to readily accept the personnel evaluation results and feel their own
growth, including creating such an environment. We will work on
human resources development so that the growth of our employees
will lead to the growth and development of the Company.

To develop the next generation of management talent, Sakai Chemical
Industry provides education for candidates for next-generation
executives selected from among a range of managerial staff, fromnewly appointed ones to department managers.
The executive officer in charge of each candidate formulates andimplements an annual development plan, which includes external
training for corporate executives, so that the candidate can have thekind of experience that allows him or her to outgrow his/herself
through his/her work. The progress of the development plan for eachcandidate is reported to and deliberated and verified by the Council
for the Development of Management Human Resources, which
comprises the president and other executive officers, and theNomination and Compensation Committee at the interim reportmeeting in November and the final report meeting in March. From
now on, we will increase our pool of human resources by adopting
such measures as improving system operations and broadening thescope of candidates.

12 2023 Environmental & Social Report20“I understand diversity
well/roughly”“I have heard/
read about diversity”“Diversity is none of my business,”“I have never heard of diversity,”or other answers

In FY2022, we also held three events focusing on unconscious biases,
including a seminar and workshop-style lectures (“Majikira-kai”). The
email magazine Diversity Report, published once every three weeks,features interviews with employees about their unconscious biases thatthey are aware of. As a result, unconscious biases have become a hot
topic in daily workplace conversations in such a form as “That’s anunconscious bias, isn’t it?”● Support for the career development of female employees
Sakai Chemical Industry devotes active efforts to promoting the
career development of female employees and aims to achieve thetarget of raising the ratio of female managers to 10% or higher andthat of female core human resources to 20% or higher by 2030.
Currently, women account for 1.4% of all managers and for 7.9% of
all core human resources. Creating diverse value urgently requires us
to increase the proportion of women among core human resources
so that more women can grasp opportunities that match theirabilities. From now on, we will make further efforts for more proactive
recruitment and human resource development.

Work-life balance● Obtaining the right to carry the “Kurumin” certification logo
In September 2022, Sakai Chemical Industry obtained “Kurumin”
certification, which the Japanese Ministry of Health, Labour andWelfare grants to companies that support employees’ childcare. The
Company has now adopted the following measures and systems topromote activities toward a good work-life balance.
(1) Improving the working environment to help parenting workers
achieve a good balance between their work and family lifea) Introducing a general childcare leave system and a paternity
leave system for male employees with newborn babies andencouraging the use of these systemsb) Broadening the scope of application of the system of reduced working
hours and imposing limitations on or giving exemption from overtime work

We have extended the period during which the system of reduced
working hours is available from the period until the child’s enrollment
in elementary school to the period until the end of the child’s firstacademic year at elementary school. We also ensure that
employees who want to avoid overtime work despite not needing to
use the system of reduced working hours can use the system oflimitations on or exemption from overtime work by prior application.
c) Measures to help employees on leave to return to work
The Company utilizes the employee welfare website “Future Concierge
for Parenting Workers.” We provide employees on maternity, paternity
or childcare leave with useful information about childcare andshort-term day care and promote the use of company-led childcare
facilities in order to help employees on leave to return to work.
(2) Creating working conditions that allow diverse work styles,
thereby contributing to work style reformsa) System for enabling employees to select from global andlimited-area careers
During their entire career, workers may sometimes wish toconcentrate on career development, and at other times, they may
wish to focus on looking after their children or other family members.
We have adopted a system whereby employees can select fromwork styles in geographical terms according to their current life stage,
being ready to be transferred between different operational locations
or limiting the location of their work to a particular area.
We are also implementing other measures for work stylereforms, including adopting a telework system, defining No
Overtime Days, and encouraging paid leave uptake.

● Promoting paternity leave uptake
To make it easier for male employees to take childcare leave, in
October 2022 Sakai Chemical Industry established a new paternity
leave system for male employees with newborn babies. This systemallows eligible male employees to take paternity leave for up to fourweeks (28 days).
In FY2022, we held a Paternity Leave Roundtable, where
employees of both genders who had childcare leave exchanged
views with those who had not. The details of the discussions werelater shared with all employees in the email magazine Diversity Report.
These initiatives resulted in a paternity leave uptake rate of 32.1% for
FY2022, an increase of more than 20 percentage points year on year.
We will continue our efforts toappropriately operate this system
so that our employees can leadfulfilling lives both at work and at
home. (We have set a target of
raising the paternity leave uptake
rate to 50% or higher by FY2025.)
Paternity leave uptake rate
Uptake rate

（％）

60
50

FY2025 target

40

32.1

30
20

10.5
10
0

3.7
2020

2021

2022 (Fiscal year)

2023 Environmental & Social Report13Together with Employees
Occupational accident in FY2022
In FY2022, a lost-time accident occurred, with an
employee falling and having to take leave. To prevent
employees from falling, we have included fall prevention
activities in our monthly priority activities. We are
therefore actively committed to preventing therecurrence of similar accidents under the leadership ofthe Health and Safety Committees.

For the Health and Safety of Employees

Fiscal year

Under the strong leadership of top management and supervisors, all of us will work together to achieve the goal of “zeroaccidents and zero illnesses.”[Health and Safety Action Guidelines]
1. We will comply with health and safety laws and regulations and promote health and safety activities.
2. We will strive to create a safe workplace by conducting risk assessments.
3. We will prevent occupational accidents by implementing measures for handling near misses, danger prediction, and pointing
and calling.
4. We will raise safety awareness through training and information sharing for safety and health.
5. We will work to promote mental and physical health by carrying out health maintenance and promotion activities.

Occupational health and safety initiatives
Sakai Chemical Industry has in place the Basic Occupational Health and Safety
Policy and the Health and Safety Action Guidelines. Under the policy andguidelines, the Company holds joint health and safety meetings, where
Company-wide health and safety activities are mainly discussed. At eachbusiness location, a health and safety plan is formulated based on the
deliberations at the Company-wide meetings, and its progress is managed under
the leadership of the Health and Safety Committee of the business location.
In our safety activities, focus is basically placed on steady efforts to addressnear misses, predict danger, and ensure the practice of pointing and calling.
We also work to prevent occupational accidents through risk assessments
conducted at each workplace. To prevent the Yumoto Factory explosion
accident, which we must never forget, from fading into oblivion, we deliver amessage from the president titled “Pledge to Ensure Safety” on May 11, theanniversary of the accident, every year. We also hold a Safety Session at eachbusiness site every July, where the relevant Health and Safety Supervisor gives
a lecture on the accident.
Our occupational health activities include having the industrial health staff
provide health information on food and other topics, offering follow-up support
to employees under a high level of mental stress, and utilizing health-related
services provided by external organizations. We therefore continue to work to
help our employees enhance their mental and physical health.

Organizational structure for health and safety
management (as of the end of March 2023)
Company-wide Healthand Safety Supervisor
Kansai-Area Health and
Safety Supervisor
Tokyo-Area Health and Safety
Supervisory Promoter
Onahama-Area Health and
Safety Supervisor

Joint Health and
Safety Meeting

2020

1

1

2021
1

2022
1

Average in the Japanese chemical industry
Sakai Chemical Industry

1.50

1.07

1.20

0.90
0.90

0.94

0.93

0.73

0.70

1.16

0.10
0.08

0.06
0.69

0.70

0.04

0.30

0.02

2018

0.06

0.03
0.02
0

0

0.06

0.06

0.60

0.00

Average in the Japanese chemical industry
Sakai Chemical Industry(Lost working days
per 1,000 actual
working hours)

0.02

0

0

2020

2021

0

0.00
2019

2020

2021

2022 (Fiscal year)

2018

2019

2022 (Fiscal year)

Safety promotion activities incorporating external perspectives
To have our workplace health and safety activities reviewed from external perspectives, in FY2022 we hired safety consultants to provide safety
diagnoses to our business locations in the Kansai area. On the advice of the consultants, we are implementing improvement measures, including
clearly zoning footpaths to completely separate them from roadways at our factory sites and adopting heatwave countermeasures. We areplanning to receive a safety diagnosis for the Onahama Manufacturing Site in FY2023. We also hold safety education seminars and lectures fromexternal perspectives with the aim of achieving zero accidents.

● Chemical substance risk assessment seminars● Lecture on fires and explosions

We held seminars using the Ministry of Health, Labour and Welfare(MHLW)’s on-site support program for chemical substance risk
assessment. The seminars were aimed at giving attendees an outlineof the revised provisions for the autonomous management of chemical
substances in the Ordinance on Industrial Safety and Health and otherrelated laws and regulations, thereby raising employee awareness of
the importance of chemical substance risk assessment.

To prevent the Yumoto Factory explosion accident on May 11, 2021
from fading into oblivion, on May 11, 2023, the second anniversaryof the accident, we held a lecture on combustion phenomena in fires
and explosions, with Professor Ritsu Dobashi at the University ofTokyo, who had served as a member of the investigation committee
for the accident, invited as a guest speaker. This lecture was also
open to attendees from Sakai Chemical Group companies as aGroup-wide activity aimed atpreventing fires or explosions.

Health managers
Sakai Manufacturing Site Healthand Safety Committee
Semboku Factory Health and
Safety Committee
Tokyo Office Health and
Safety Committee
Onahama Manufacturing Site
Health and Safety Committee
Otsurugi Factory Health and
Safety Committee

Industrial physician

In FY2022, the Onahama Manufacturing Site was designated as a business site that needs special guidance on safety management. In responseto this designation, we formulated a health and safety improvement plan, which includes conducting thorough risk assessments and providing
employees with education focusing on fires and explosions. Based on this plan, we not only continuously engaged in the conventional kinds ofhealth and safety activities but also implemented measures to raise employee awareness of health and safety activities, such as holding risk
assessment training sessions, where occupational safety consultants gave instructions from external perspectives, and providing health and safety
education for managers. The progress of the plan was officially confirmed through monthly reports submitted to the Iwaki Labor Standards
Inspection Office and four on-site inspections conducted by the authorities (in May, September, November, and February). On the authorities’ advice
given during the inspections, we made several on-site improvements, including those to speed limit signs for forklifts, and shared the advice withour business locations in the Kansai area. On March
31, 2023, after one year of our serious improvement
efforts, the Onahama Manufacturing Site’s FY2022
designation as a business site that needs special
guidance on safety management was removed. We
will leverage this experience in our future health andSpeed limit sign (at Plant F of the
Risk assessment training session
Safety education session forsafety activities with the aim of making our
Otsurugi Factory) improved onheld on July 22, 2022
safety managers held on Marchadvice given during the on-site
28, 2023
manufacturing sites and factories even safer.

14 2023 Environmental & Social Report

0

2019

Number of working days lost due to accidents
per 1,000 actual working hours. A higher valuemeans greater severity.

Safety managers

Removal of the Onahama Manufacturing Site’s designation as a business site that needs special
guidance on safety management

inspection on September 9, 2022

Number ofaccidents

2018

Severity rate

Number of occupational fatalities and injuries
involving leave of one day or more, per one
million actual working hours. A higher valuemeans greater frequency.
(Fatalities and injuries
per one million actual
working hours)

Number of lost-time accidents

Basic Occupational Health and Safety Policy

Frequency rate

Seminar held in the Kansai area on
February 17, 2023 using the MHLW’s
on-site support program

Seminar held in the Onahama area on
February 24, 2023 using the MHLW’s
on-site support program

Safety lecture held on May 11, 2023

Encouraging Group companies to promote health and safety activities
Every quarter, Sakai Chemical Industry analyzes occupational accidents at each Sakai Chemical Group company and commuting accidents in whichGroup company employees are involved. Information about those accidents and analysis results are shared throughout the Group. The Company also
holds Sakai Chemical Group Safety Meetings twice a year. At the FY2022 meetings, attendees exchanged opinions on chemical burns, the mostfrequent kind of occupational accident in the Group, and shared with each other information about the revised provisions for the autonomous
management of chemical substances in the Ordinance on Industrial Safety and Health and other related laws and regulations.
Moreover, Sakai Chemical Industry sends staff to each Group company in Japan to conduct safety patrols. In FY2022, the staff confirmed theprogress of measures to prevent the recurrence of occupational accidents of the kind that had occurred in the past, as well as the level of compliancewith the Act on Comprehensively Advancing Labor Measures, Stabilizing the Employment of Workers, and Enriching Workers’ Vocational Lives (theso-called “Power Harassment Prevention Act”) and the status of use of personal protective equipment. In addition, at Group companies handling
substances that might cause dust explosions, the staff sent by the Company confirmed that necessary measures had been adopted, including having
workers wear antistatic shoes. We will continue this initiative in the future in order to improve the Group-wide level of occupational health and safety.

Various disaster drills
Sakai Chemical Industry conducts regular disaster drills at each manufacturing site so that all
those involved will be prepared to take prompt responses in the event of an emergency.
At the Sakai Manufacturing Site, an evacuation drill is conducted on the occasion of theannual Osaka 8.8-million Drill. This evacuation drill includes travel to an evacuation site, thetrial use of a personal safety confirmation system, and checks on whether emergency
internet protocol (IP) radios are in working order.
At the Onahama Manufacturing Site as well, evacuation drills are conducted in a simulationof the issuance of a tsunami warning.
Each workplace also conducts an annual disaster drill according to schedule to enable
employees to learn how to act on-site in the event of an accident or disaster and how topractice first-aid fire fighting using fire extinguishing equipment.
2023 Environmental & Social Report15

Together with Employees
Voice

Health checkups and related initiatives

Mental health care initiatives● Enhancing optional items in health checkups andsharing the checkup results● Mental health education for employees

Since FY2021, the Company has added tumor markers to its regular
health checkup and has also introduced optional checkup items,
such as ultrasonic diagnosis. In addition, since FY2023, we haveenabled female employees to have a health checkup for women,allowing them to select optional items related to diseases specific towomen. We therefore work to provide our employees with theopportunity to have further enhanced health checkups according totheir needs. Furthermore, in accordance with the applicable laws
and regulations, the Company gives a special health checkup to all
employees who handle organic solvents or specified chemical
substances at work to prevent and detect at an early stage healthdamage on the occasion of the health checkup.
We also operate a system for sharing the health checkup results
across the Company and managing them in a unified manner so that
employees can continue to receive consistent health guidance fromthe health staff of each area no matter where they are transferred. By
doing so, we aim to visualize the health condition of the entire
workforce of the Company or each area, identify challenges basedon the visualized data, and make our health guidance more
appropriate, thereby helping our employees enhance their health.

Health activities utilizing external organizations● Utilizing counseling services

Sakai Chemical Industry has established a system for its collaboration
with external organizations in allowing its employees to receive advice
from outside experts. Our use of external organization has enabled
employees to consult not only about their work and workplace but
also about their private lives and has allowed even their family
members to seek consultation services, thereby contributing to theavailability of both mental and physical health support.

● Cooperation with the Osaka Yakugyo Health
Insurance Society
Sakai Chemical Industry has regular contact with the Osaka Yakugyo
Health Insurance Society, to which it belongs, and cooperates withthe society, through a clear allocation of roles, in specific healthguidance and the “Data Health” (data-based healthcare) project inorder to enhance employees’ health. Through this cooperation, we
perform comprehensive employee health management, includingorganizing health seminars taught by external guest instructors(FY2022 seminar topics: self-care training, training in “line care”[mental health care for workers on the same reporting or productionline], and harassment prevention training), monitoring the healthcondition of the entire workforce of each business site based on dataon hospital visits, and enhancing health guidance accordingly.

● Utilizing the results of the Survey on Health andProductivity Management
Sakai Chemical Industry is continuously responding to the Survey on
Health and Productivity Management conducted by the Japanese
Ministry of Economy, Trade and Industry (METI). We share with those
involved the METI’s feedback on the survey results and provide therelevant health information for Health and Safety Committee
members as a reference source. We therefore utilize the survey
results to formulate an employee health enhancement plan.

16 2023 Environmental & Social Report

Sakai Chemical Industry provides a wide variety of mental healtheducation programs for its employees, including self-care education
provided to new employees as part of induction education. In linewith recent trends toward the diversification of society, the Company
is seriously committed to raising itself into an organization where noone suffers mental health problems. The specific measures that theCompany is implementing for that purpose include providing
e-learning programs focusing on harassment prevention, online
seminars taught by health staff, and “line care” training for managers.

Aiming to be a healthy “Exciting Company”

The ability to maintain good physical and mental health underpins the improvement of work performance. Sakai
Chemical Industry has three industrial health staff members, including myself, in charge of providing healthsupport for employees at each business site.
I am in charge of the Kansai area and plan and manage various seminars and health events to increase thehealth literacy of staff members. I help them maintain healthy lifestyles on their own by providing them with theopportunity to gain knowledge about health through seminars and encouraging them to continue healthimprovement activities through events.
I have recently focused particularly on health support for female employees. Last fiscal year, I began to holdseminars for female employees on health issues unique to women, such as menstrual abnormalities,
menopause, breast cancer, and uterine cancer, to spread health knowledge and awareness among them. Last
year, I also organized an event where participants had simulated experience of being a pregnant woman withthe aim of making the Company more friendly to pregnant women.
I will continue to implement various initiatives so that many more employees can work healthily with excitement.

● Support provided by industrial health staff andmental health specialists
Sakai Chemical Industry has full-time industrial health staff in addition to
health managers and has in place a system whereby employees canconsult those staff about their own mental and physical health without
hesitation. The consulted industrial health staff cooperate with industrial
physicians and supervisors in providing prompt support to employees
suffering mental health problems, for example, by introducing to them
medical institutions specializing in mental health as needed. We focus
particularly on constantly interviewing employees at turning points intheir careers, such as transfer to a business location in another area,rise in status, promotion, and employment (in the case of
new-graduate and mid-career hires), with the aim of preventing mental
health problems among them.
We also open a general mental health clinic on a regular basis tohave mental health specialists provide consultation services at therequest of employees. The clinic also provides consultation services
online so that employees can have expert interviews no matter
where they are working. This system also offers the opportunity touse consultation services to employees who have mental healthconcerns but are hesitant to visit the hospital.

● Workplace improvement initiatives based on stresscheck results
The results of annual stress checks are shared with department
general managers and higher ranked management, including
management team members. The results for each organization are
analyzed, and each organization (department) utilizes the analysis
results to devise and implement workplace improvement measures.
Employees judged to be under high stress are interviewed
individually by industrial health staff or mental health specialists withfull consideration paid to their privacy.

In this way, we leverage the stress check results to encourageboth individual employees and their organizations to make bothwork-related and life-related improvements with the aim ofpreventing mental health problems.

Akiko Hase
Public health nurse
Safety & Health Section
Operation Management Department,
Sakai Manufacturing Site

Harmony with Local Communities
Communication with Local Communities
Support for local events● Head Office and Sakai Manufacturing Site

The Sakai Festival, one of the main events in Sakai, was held for the firsttime in three years. In addition to supporting the event, Sakai Chemical
Industry also called for volunteers from among its employees, with a
total of 23 volunteers helping collect waste and serving as guides during
the festival. This initiative
embodies our gratitude to
local people, which wehave few opportunities toexpress in our daily
activities, and our hopes of
helping further revitalize
Sakai, the place of origin of
Sakai Chemical.

● Onahama Manufacturing Site

We supported the Izumi Furusato Festival Gotcha Market in Iwaki
City, where the Onahama Manufacturing Site, our main manufacturing facility, is located. We also set up a booth at the festival. This
event was also held for the first time in two years due to the
COVID-19 pandemic.
In addition to the festival,
Sakai Chemical employees
also participated in the Iwaki
Sunshine Marathon, which
was held for the first time in five
years due to bad weather andthe pandemic, with the aim ofrevitalizing the event andinteracting with local residents.

Engagement with children● Support for career education for elementary school students

We supported the publication of a supplementary reader used in
career education for third and fourth graders at all elementary schools
in Sakai City, where our Head Office is located. The reader introduces
local businesses in a variety of industries. It explains the roles of ourmaterial products in relation to smartphones, games, and cars to
inspire children’s imagination more effectively. The reader emphasizes
that the entire material production process comprises various kinds ofwork, including procurement, manufacturing, analysis, and shipment.

● Exhibition at Sakai Science Education Festa

Sakai Chemical Industry participated in this event with the aim ofallowing visitors to enjoy using image generation technology,
focusing on AI as a recently high-profile topic. Held for the first timein about two and a half years due to the pandemic, the event bustledwith many children and their parents. We were able to interact withlocal children through AI-assisted image generation, for the first timein a long period. We hope to continue to share the joy of science withchildren through this kind of event.

Encouraging Group companies to promotehealth activities
To raise health awareness among employees throughout the Sakai
Chemical Group and enhance their physical and mental health, we
encourage Group companies to promote health activities. For
example, since FY2023, we have upgraded health lectures, whichwere previously provided only to health and safety personnel, tohealth and safety seminars and broadened the scope of theiraudience to encompass all Group company employees.
2023 Environmental & Social Report17