DIC REPORT 2018
The DIC Group Integrated ReportComplete 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.

MissionVisionVisionSpiritSpiritColor & Comfort by Chemistry

Drive, Integrity, Dedication, Collaboration, Harmony

Making it Colorful
DIC helps make life colorfulSpecialty Solutions
DIC draws on its expertise andcomprehensive strengths to offer solutions

Innovation through Compounding
DIC brings innovation to society through its
core compounding technologies

Connecting the DIC Group and its Stakeholders

About this Report

DIC Group Communications Tools

In previous years, the DIC Group has published a combined
FRUSRUDWHSUR¿OHDQGVXVWDLQDELOLW\UHSRUWZLWKWKHDLPRISUHVHQWLQJa clear, easy-to-understand picture of the Group and its sustainability
initiatives. Beginning in 2018, the Group has transformed the
DIC Report into an integrated report, which combines financial
information, encompassing consolidated operating results andcorporate strategies, and nonfinancial (sustainability) information.
7KH*URXSKDVSXEOLVKHGDVLPSOL¿HGVXPPDU\YHUVLRQRIWKHUHSRUW(printed), which focuses on key highlights, and a more detailed
complete version (PDF), which contains extensive quantitative data.

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

Printed/PDF-Form Publications

Reports on activities
DIC Report

DIC Report(summary version)(complete version)

DIC Report
Financial Section

DIC Report (Complete version) (PDF-form publication)WEB

http://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
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Japan and Greater China) and Oceania. The term “Asia and Oceania” refers to Asia (excluding Japan) and Oceania.

Link with the DIC Website
The ( WEB ) mark indicates that more detailed information and/or
data can be found on the indicated page of the DIC global website.
DIC global website WEB http://www.dic-global.com/en/
Summary integrated
report (published annually)(printed publication)

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

Scope of Reporting

Report on results of operations
DQG¿QDQFLDOFRQGLWLRQ
(published annually)(PDF-form publication)

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.
WEB http://www.dic-global.com/en/csr/pdf/dic_report_scope_en_2018.pdf

DIC Global Website

Reporting Period
Fiscal year 2017 (January 1–December 31, 2017)

Real-time information
WEB

Date of Publication

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

June 2018 (The next report is scheduled for publication in June 2019.)

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

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

Contents
3
5
9
11
13

The DIC Group: A Global Powerhouse
A Message from the President)LQDQFLDODQG1RQÀQDQFLDO,QIRUPDWLRQThe DIC Group’s Approach to Value Creation
The DIC Group’s Business Portfolio

43
48
50
58
60
109

21

Printing Inks
Fine Chemicals
Polymers
Compounds
Application Materials

23

Fiscal Year 2017 DIC Group Topics

25

Special Feature

142

Product Development Designed to Create New Value

147

13
15
17
19

26

30

35

112
125
128
130
134
137

Pigments for Color Filters Used in LCDs and OLED Displays(Functional Pigments)
Adhesive Primers for Optical and Packaging Films
TOPIC

Efforts to Reduce Environmental Impact by Using Water-Based
Biomass Ink Made with Plant-Based Packaging Resin
36
41

148
149
151

Compliance
Risk Management
Information Security
Environment, Safety and Health (ESH)
Quality
Human Resources Management
Sustainable Procurement
Business Models that Respond to Social Imperatives
New Technology Development and Value Creation
Harmony with the Community and Social Contributions
Communication with Stakeholders

DIC Report 2018 and the GRI Standards
7KLUG3DUW\9HULÀFDWLRQ
Third-Party Opinion Regarding DIC Report 2018
DIC Group Milestones
Corporate Data

Financial Section
1‒43

Corporate Governance'LUHFWRUV&RUSRUDWH$XGLWRUVDQG([HFXWLYH2IÀFHUV

DIC Report 20182

Overview of Materiality and Sustainability

Cover Design
The cover of this year’s DIC Report derives
its inspiration from the DIC Group’s “Color& Comfort” brand slogan, employing brightcolors that evoke the efforts of the Group, a
global powerhouse, to enrich and add vibrancy
to society and the lives of people everywhere.

The DIC Group: A Global Powerhouse
Net Sales

Corporate Data

(Billions of yen)

10,000Registered name:

820.0

751.4

789.4

830.1

705.6

’13 ’14’15’16 ’172,000
0Operating Income（FY）(Billions of yen)600
Corporate headquarters (Tokyo)

500

Notes: 1. The consolidated results for fiscal year
2013 comprise the accounts for the ninemonths ended December 31, 2013, of DIC
and all but one of its domestic subsidiaries
and the 12 months ended December 31,
2013, of its overseas subsidiaries and one
domestic subsidiary.
2. Corporate data is as of December 31,
2017. Net sales and operating income arefor fiscal year 2017.

400
300
200

56.5

)

54.2

(

171 Domestic: 32
Overseas: 139

4,000

51.1

Number of subsidiaries
and affiliates:

6,000

41.1

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

8,000

DIC Building, 7-20,
Nihonbashi 3-chome,
Chuo-ku, Tokyo 103-8233,
Japan
February 15, 1908
March 15, 1937
¥96.6 billion
20,628(Nonconsolidated: 3,273)

40.2

Corporate headquarters:’13’14 ’15 ’16 ’17

100
0

（FY）

Sun Chemical Corporation
headquarters (United States)

Global Network
DIC has 171 companies in 64 countries andterritories around the world.

49

Europee

China
na
na

Europe and Africa¥175.5 billion

Operating income¥10.6 billion

5South and
d
As
sia
ia
ia
Southeast Asi
Asia
Asia and Oceania(Excluding Japan)

AfricaAfA
f iicafrifrca

Sun Chemical Group and others

Net sales

Japan

23

¥161.2 billion¥13.4 billion¥138.5 billion

Operating income¥6.3 billionJapan
DIC Corporation, DIC Graphics
Corporation and others

Net sales2¥314.2 billion

Operating income¥31.9 billion

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

Net sales
Operating income

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

North, Central andSouth America

31

Sun Chemical Group and others

Net sales

15

32

North
America

OceaniaO
OceOc
ceeaaan
ce
cea
nia
ia

DIC Asia Pacific Pte Ltd (Singapore)

DIC Report 2018

3

Central and Souththth
America

14

Breakdown of Fiscal Year 2017 Net Sales by Segment

Breakdown of Fiscal Year 2017 Operating Income by Segment
Application Materials

Application Materials

6.8%
Compounds

7.8%

Printing Inks

billionPolymers

￥56.5

8.0%

Fine Chemicals

Fine Chemicals

billion

28.1%

Polymers

16.4%

23.9%

28.1%

Compounds

45.1%￥789.4

Printing Inks

4.2%

31.6%

Note: Fiscal year 2017 net sales and operating income as used here include intersegment transactions. For
this reason, and because of the existence of transactions classified as “others,” which are not
attributable to reportable segments, these figures differ from reported net sales and operating income.

Breakdown of Fiscal Year 2017 Net Sales by Region

Breakdown of Fiscal Year 2017 Operating Income by Region

Asia and Oceania

Asia and Oceania

20.4%

21.6%

North, Central andSouth America

17.6%￥789.4billionJapan

North, Central andSouth America

39.8%

10.0%

￥56.5
billionEurope and Africa

Europe and Africa

22.2%

17.1%

Japan

51.3%

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

Principal Global R&D Sites
Printing Inks
Technical Center—
China

Cincinnati (United States)

Polymer Technical Center —China
Qingdao DIC Finechemicals(PRC)

Rochdale(United Kingdom)

St. Charles (United States)
Midsomer Norton(United Kingdom)
Fine Chemical
Technical Center—Korea

Gallarta(Spain)Eurolab(Germany)

Solid Compound
Technical Center
Asia Pacific (Malaysia)

Central ResearchLaboratories (Japan)

Pigment Technical Center
Asia Pacific (Indonesia)
Polymer Technical Center —Asia Pacific (Thailand)

Printing Inks Technical Center–
Asia Pacific (Thailand)

DIC Report 20184

DIC/Earthrise Algae
Research Center (United States)

Carlstadt (United States)

A Message
from the President
Representative Director,
President and CEO
DIC Corporation

Kaoru Ino

Vision:A unique global organizationthat is trusted by society• Contribute to global society guided
by our Color & Comfort brand slogan• Realize corporate value to which people canrelate through the promotion of diversity• Work with DIC Group employees, customers
and shareholders to create value and build an
appealing brand

DIC Report 2018

5

%XLOGLQJRQ2XU<HDU+LVWRU\WR'ULYH
New Growth and Evolution
Ensuring that DIC remains a unique global organizationthat is trusted by society
In the period under review, I assumed the reins as
representative director, president and CEO of DIC. Having
accepted the appointment, I believe that my mandate is to do
my utmost to carry out my duties, the most important of whichis to build on the foundation established by my predecessors
to drive new growth and evolution.
   ,Q ILVFDO \HDU  ZH DUH FHOHEUDWLQJ WKH WK
anniversary of DIC’s establishment. Printing inks, a key
business since the start, continue to account for the bulk of
our sales. While marveling at the fact that we have inheritedD \HDUROG EXVLQHVV IURP RXU IRXQGHUV , UHFRJQL]Hthat today we operate in an environment characterized bychanges that differ in nature from anything we have everIDFHGEHIRUH)RUH[DPSOHWKHWHOHSKRQHWRRNPRUHWKDQ
years to come into widespread use. In contrast, Facebook
took only a year to gain worldwide popularity. Social
structures continue to change drastically, owing primarily
to three key factors, namely the next wave of advanced
digital technologies, falling birth rates and issues related
to financial resources to support the social safety net. The
pace of change is astonishing. In a sense, I see this as the
new normal. Amid such rapid and drastic changes, how domaterials manufacturers contribute to society going forward?
As we work to adapt resilient businesses passed on to us by
our founders to this new normal, we must also look at how tohandle change. I see responding effectively to these issues
as an important mission.
,Q¿VFDO\HDUWKHVHFRQG\HDURIRXUFXUUHQWWKUHH
\HDUPHGLXPWHUPPDQDJHPHQWSODQ',&ZHVXFFHHGHG
in achieving record consolidated income results. Net sales
IRUWKHSHULRGDPRXQWHGWRELOOLRQ2SHUDWLQJLQFRPH
DQG RUGLQDU\ LQFRPH ZHUH  ELOOLRQ DQG  ELOOLRQ
respectively. Net income attributable to owners of theSDUHQWZDVELOOLRQ'XULQJWKHSHULRGEXVLQHVVHVWKDW
we expect to drive growth—notably functional pigments,

polyphenylene sulfide (PPS) compounds and packaging
materials, in which we are concentrating our allocation ofmanagement resources on a global basis—continued to
expand steadily, as we laid the groundwork for future growth,
including through advance investments. Despite some of ourbusinesses feeling the impact of rising raw materials prices andother external factors, we responded effectively by focusing
our attention on launching products that meet market needand expanding sales of environment-friendly high-value-addedofferings. Thanks to these and other efforts, we made solid
progress toward achieving the objective of a key strategic
initiative spearheaded by my predecessor, Yoshiyuki Nakanishi,
namely, the realization of a robust earnings structure thatis impervious to fluctuations in external factors such as raw
materials prices and exchange rates.
,Q¿VFDO\HDUZHZLOOHPEDUNRQDQHZPHGLXPWHUP
management plan. In considering the content of this planand our mission, which defines what we ultimately aspire
to be, we will endeavor to address increasingly varied andcompelling social imperatives and contribute to the realizationof a sustainable society. To this end, we must cultivate
new businesses, in addition to printing inks, pigments andcompounds, in which we have the potential to earn global
market-leading positions.

Formulating a new medium-term
management plan
In preparation for the launch of our new medium-term
PDQDJHPHQWSODQLQILVFDO\HDUZHDUHSURPRWLQJ
extensive debate and discussion to determine criticalchanges needed for us to fulfill our mission, based on
which we will formulate strategies from a medium- tolong-term perspective. Our determination to respond to

Quantitative Targets(Billions of yen/%)

Net sales
Operating income
Net income
ROE (return on equity)
Ordinary investments
Strategic investments (M&As, etc.)
D/C ratio*
Dividend payout ratio

2015
Actual2016
Target2016
Actual2017
Target2017
Actual2018
Forecast¥820.0
¥51.1
¥37.4
15.0%
¥34.0
—
47%
21%

¥870.0
¥54.0
¥25.0
9.0%

¥751.4
¥54.2
¥34.8
12.9%

¥920.0
¥58.0
¥30.0
10.0%
¥120.0¥150.0Around 50%
Around 30%¥789.4
¥56.5
¥38.6
13.0%

¥820.0
¥58.0
¥40.0
12.2%

* Debt-to-capital (D/C) ratio: Interest-bearing debt / (Interest-bearing debt + Net assets)

DIC Report 20186

Emphasizing innovation to drive
further evolution

the dramatic changes taking place in society—to the new
QRUPDO²UHPDLQV¿UP
In pondering our image of the DIC Group in the future,
the key will be our Color & Comfort brand slogan. This
unique slogan really conveys DIC’s DNA. It encapsulates
our desire to leverage the power of chemistry, drawing on
our wealth of core technologies, to bring color and comfort
to people’s lives and, in so doing, to contribute to therealization of a richer, more vibrant society. This slogan
is of course based on our management vision, Color &Comfort by Chemistry.
I have narrowed my focus for achieving these goals to
areas that offer potential synergies with base technologies
in our printing inks, pigments, polymers and other corebusinesses, implementing measures designed to bolster
corporate value and build new businesses. Taking a
distinctively DIC approach, we will focus on environmentfriendly printing inks and polymers, packaging andhealthcare businesses that contribute to food safety, andon liquid crystals (LCs), jet inks and pigments that enable
us to provide a rich array of color materials. Such efforts
would position us to resolutely fulfill our role in helping toaddress social imperatives and deliver value to society
while concurrently adding muscle to our high-value-added
businesses. Examples include packaging inks, which areunquestionably printing inks but unlike other printing inks
are expected to see market growth in the future, as well as
conductive and insulating inks, which from a technology
perspective are completely different from conventional
printing inks. For us, the challenge is as big as cultivating
businesses in brand new domains. We intend to look at
areas peripheral to businesses in which we have basetechnologies. At the same time, we will seek to further
expand our business portfolio, and to improve its efficiency
and soundness.
We will discuss ideas and encourage debate internallyZKLOH DW WKH VDPH WLPH HQYLVLRQLQJ ZKDW ZH DVSLUH WR 
years down the road. From there, we will use backcasting
to formulate our next medium-term management plan,ZKLFK ZLOO NLFN RII LQ ILVFDO \HDU  :H ZLOO SXEOLVKGHWDLOV RI WKH SODQ²WHQWDWLYHO\ FDOOHG ',&²DV VRRQ DV
they are available.

,Q -DQXDU\  ',& DQQRXQFHG D FDSLWDO DQG EXVLQHVV
alliance with Taiyo Holdings Co., Ltd. Partnering with Taiyo
Holdings, which commands a top-class share of the global
market for solder resist, will position DIC well to develop
products for the electronics sector, notably for printed
ZLULQJ ERDUGV 3:%V  8QGHU ',& ZH KDYH LGHQWLILHG
electronics as a key next-generation theme, alongsidecarbon reduction, packaging and life sciences.
In the area of business development, Mr. Nakanishi was
WKH¿UVWWRGHPRQVWUDWHWKHLPSRUWDQFHRIEUHDNLQJIUHHIURPour reliance on independent efforts and actively encouraging
open innovation to capitalize on external resources. We
are also promoting participation in global venture networks.
Through such efforts, we are working to, among others,
identify and promote new next-generation development
themes and swiftly secure cutting-edge technologies toaccelerate the creation of new businesses. We are also
making flexible use of strategic investments, having
EXGJHWHGELOOLRQIRUWKLVSXUSRVHRYHUWKHWKUHH\HDUVRI',&WRRXWOLQHDQHZJURZWKWUDMHFWRU\WRLQWHUQDODQG
H[WHUQDOVWDNHKROGHUV%\WKH¿QDO\HDURIRXUQH[WPHGLXP
term management plan, we aim to achieve a stable return on
HTXLW\ 52( RISOXVXQGHUSLQQHGE\WKHYDOXHFUHDWHG
through such new innovation, as well as consolidated net
VDOHV RI DURXQG  ELOOLRQ DQG FRQVROLGDWHG RSHUDWLQJLQFRPHLQWKHDUHDRIELOOLRQWKHUHE\PHHWLQJWKHORQJWHUPWDUJHWVVHWIRUWKLQ',&

Global value creation:
The essence of the DIC GroupIn considering our image of the DIC Group in the future,
it is impossible to gloss over the importance of a global
perspective. We conduct our operations through a network
RI  FRPSDQLHV LQ  FRXQWULHV DQG WHUULWRULHV :H DUH
the world’s leading manufacturer of printing inks; organic
pigments, the principal raw material used in printing inks;

Growth attributable tostrategic investments(M&As, etc.)
Next-generation
businesses

Growth Scenario and Positioning of DIC108

Ensure the sustainability of businesses withstable earnings bases• Responses to environmental concerns• Rationalization• Strategic investments (M&As, etc.)
2016

2017

2018

Create business models that Achieve sustainablegrowth by revamping
address social imperatives
business portfolio• Electronics• Packaging• Healthcare• Low carbonization
2019

2020

DIC108

DIC111

DIC Report 2018

7

2021

2022

2023

DIC114

Businesses that will
drive growthBusinesses withstable earnings bases2024and PPS compounds—key engineering plastics—with global
PDUNHWVKDUHVRIDURXQGDQGUHVSHFWLYHO\$SSUR[LPDWHO\  RI FRQVROLGDWHG QHW VDOHV DUH RXWVLGH
Japan. In other words, a global perspective is critical formany reasons. One of these is the need to manage exchange
rates that go hand in hand with our business activities,
which is not one on one with the U.S. dollar, but involves
multiple currencies, including the euro, the Turkish lira andthe Indian rupee. It is all extremely complicated, but wehave established a mechanism that enables us to effectively
PDQDJHIDFWRUVWKDWFDXVHH[FKDQJHUDWHÀXFWXDWLRQV
I see our global character as a vital growth driver. We haveestablished printing inks, polymer and PPS technical centersin key locations in Asia, Europe and elsewhere, enabling us
to accurately grasp and swiftly address local needs. We are
currently taking steps to reinforce our global management
structure, including appointing a local executive to head up
a key product division, as well as our regional headquarters,
to ensure we remain abreast of rapid market changes.
These moves have positioned us to maximize our uniquestrengths as a multinational group with R&D facilities and
GLYHUVHKXPDQUHVRXUFHVDURXQGWKHZRUOG6LQFH¿VFDO\HDU ZH KDYH EHHQ SURPRWLQJ DPELWLRXV JOREDO EUDQGLQJ
initiatives to bolster awareness of the value that we provide
to stakeholders and encouraging employees to apply thatawareness to their everyday work, and in doing so to help
instill a greater sense of solidarity across the Group.

in management. A key component of this is to advanceopportunities for female employees, a theme for which wehave set a key performance initiative (KPI). As a group withURXJKO\  HPSOR\HHV LQ  FRXQWULHV DQG WHUULWRULHV
around the world, it is important to remain aware that wehave a vast range of exceptional human resources that wemust manage in a way that maximizes latent capabilities.
To marshal the diversity of individuals, we will also work toensure that employees feel like active participants.
Finally, on the subject of governance, we have establisheda structure based on Japan’s Corporate Governance Code
DQGLQ¿VFDO\HDULQFUHDVHGWKHQXPEHURILQGHSHQGHQW
outside directors on our Board of Directors with the aimof further reinforcing governance functions. We are also
working to fortify our foundation as a global organization
through measures ranging from reinforcing the governancecapabilities of our subsidiaries, thereby strengthening theoverall framework that underpins Group management, tostrengthening our quality management system and ensuring
compliance with new laws and regulations.
In Japan, you sometimes hear the phrase “a company isa public entity of society.” In the future, companies will be
evaluated not only for their success in responding to change
but also for their ability to be agents of change. From thisperspective, as a distinctive global manufacturer of finechemicals, we will continue to be guided by our Color &Comfort brand slogan as we actively take on the challengeof creating value for society.

ESG as a central element of management
The DIC Group launched its corporate social responsibility&65  SURJUDP LQ ILVFDO \HDU  ODWHU FKDQJLQJ WKHdesignation used across this program from “CSR” to“sustainability.” Since then, we have steadily implemented
LQLWLDWLYHV LQ OLQH ZLWK  NH\ WKHPHV UDQJLQJ IURP“Compliance” to “Business models that respond to social
imperatives.” In light of increasing awareness of social
imperatives pertaining to environmental, social and
JRYHUQDQFH (6* UHODWHGLVVXHVHIIHFWLYHIURP¿VFDO\HDUZHHVWDEOLVKHGWKH(6*8QLWAs a leading chemicals manufacturer, we are working tosecure safety, reduce environmental impact and ensure
the stringent management of chemical substances, which
we view as fundamental to our operations and an essential
responsibility. We are also taking steps to combat climatechange—a universal challenge—including setting mediumto long-term targets for reducing our global emissions ofCO worldwide and focusing on the development of productsthat contribute to a low-carbon economy. In addition, we are
deepening awareness of and redoubling efforts to address
other critical issues, including minimizing industrial waste byrecycling and reusing materials and addressing water risks.
In the area of global human resources, we acknowledge
the importance of advancing diversity, including by valuing
different philosophies and values. We have spelled out a goalof marshaling the diversity of the individuals that make up ourlabor force, recognizing the fact that we are in an age today
where individuals can change society. In other words, weunderstand the absolute importance of promoting diversity

DIC Report 20188)LQDQFLDO,QIRUPDWLRQ

Note: 7KHFRQVROLGDWHGUHVXOWVIRU¿VFDO\HDUFRPSULVHWKHDFFRXQWVIRUWKHQLQHPRQWKVHQGHG
'HFHPEHURI',&DQGDOOEXWRQHRILWVGRPHVWLFFRQVROLGDWHGVXEVLGLDULHVDQGWKHPRQWKVHQGHG'HFHPEHURILWVRYHUVHDVVXEVLGLDULHVDQGRQHGRPHVWLFVXEVLGLDU\Net Sales, Operating Income and Operating Margin
Net sales

Operating income

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

900

830.1

789.4

751.4

60

54.2

7.2%

6.2%

62.5

80

705.6

70

7.2%

5.7%

600

70

Operating income(Billions of yen)

820.0

800
700

Cash provided by operating activities
Free cash flow

Operating margin (%)

Net sales(Billions of yen)

50

46.4

60
40

4.9%

33.9

50

500
400

40

300

30

20

20

10

200

40.2

51.1

41.1

54.2

56.5

100

10

0

0

2013

2014

2015

2016

24.0

19.0

19.1

30.3

0

-4.7

-5

(FY)

2017

29.1

30

2013

2014

2015

2016

(FY)

2017

2ZLQJWRDQLQYHVWPHQWRI ¥ELOOLRQLQ7DL\R+ROGLQJV&R/WGFDVKXVHGLQLQYHVWLQJ
DFWLYLWLHVLQFUHDVHGLQ¿VFDO\HDU

Capital Expenditure and Investment

Net Income Attributable to Owners of the Parent and ROE
Net income attributable to owners of the parent
Return on equity (ROE) (%)(Billions of yen)

70
(Billions of yen)

62.4

50

60

40

30

26.8

50

38.6

37.4

34.8
（%）
30

40

30
20

36.3

25.2

34.0

32.1

27.6

20

16.1

14.6

12.9

11.3

20

13.0

10

10
10

0

2013

2014

2015

2016

2017

0

0

(FY)

2013

2014

2015

2016

2017

(FY)

2ZLQJWRDQLQYHVWPHQWRI ¥ELOOLRQLQ7DL\R+ROGLQJV&R/WGFDSLWDOH[SHQGLWXUHDQGLQYHVWPHQWLQFUHDVHGLQ¿VFDO\HDUNet Assets, Interest-Bearing Debt and D/C Ratio*
Interest-bearing debt

Net assets

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

D/C ratio (%)

Payout ratio (%)

Year-end dividend(Billions of yen)

29.4

400

（%）
30

27.3
（%）
70
300

25

22.4

299.1
274.2

241.3

(Yen)

50

49.8

200

60

265.7

259.5

57.7

47.2

44.0

43.6

218.9

276.7

289.9

307.0

344.0

20.5

150

40

80

20
50

60

60

268
30

252
30

40
374

30

30

40

40

2013

2014

2015

2016

10
0

2013

2014

2015

2016

2017

0

0

(FY)

'HEWWRFDSLWDO '& UDWLR,QWHUHVWEHDULQJGHEW ,QWHUHVWEHDULQJGHEW1HWDVVHWV

120

15

60

10

100

100

30
100

20

20.5

60
5

60
2017

)LJXUHVKDYHEHHQDGMXVWHGWRUHÀHFWWKHLPSDFWRIWKHFRQVROLGDWLRQRIVKDUHV ,Q¿VFDO\HDU',&SXUFKDVHGDQGUHWLUHGWUHDVXU\VKDUHVDIC Report 2018

9

0

(FY)

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)

CO 2 emissions per unit of production(Metric tonnes)

Energy consumption

Energy consumption per unit of production

Kg CO2 /metric tonne(GJ/metric tonne)(Thousands of GJ)

400

1,000,000

14,000900,000

327

800,000

305

311

723,000
700,000

5.343

13,000316
657,000

659,000

659,000

296

12,48912,000
300

6.000

5.649

11,126

11,000

5.360

5.144

11,379

11,100

5.155
5.000

11,05410,000635,000

4.000

9,000

600,000

8,000

200

500,000

3.000

7,000
6,000

400,000

5,000

300,000

2.000

4,000

100
200,000

3,000

1.000

2,000

100,000

1,000
0

0

2013

2014

2015

2016

2017

0

0

(FY)

%DVH\HDU)LVFDO\HDU
** &2 HPLVVLRQV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\

2013

2014

2015

2016

(FY)

2017

%DVH\HDU)LVFDO\HDU
** (QHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQLVFDOFXODWHGXVLQJDGMXVWHGSURGXFWLRQYROXPH SDUHQWFRPSDQ\LQ-DSDQRQO\  1RWL¿FDWLRQVXEPLWWHGWR-DSDQ¶V0LQLVWU\RI(FRQRP\7UDGHDQG,QGXVWU\

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

Occupational Accident Frequency Rate (DIC Corporation)(Rate)

（%）

DIC

1.50

100

Subsidiaries in Japan

90
1.00

80
70

0.50

57

60

52

53

56

56

50

0.00
2010

40

2011

2012

2013

2014

2015

2016

2017 (FY)

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

30
20Frequency rate ＝

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

10
0

2013

2014

2015

2016

2017

× 1,000,000

A frequency rate of 1.0 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

Female Employees in Management Positions (DIC Corporation)

Average Years of Employment (DIC Corporation)
Male employees(Years)Female employees(Number of people)

Average years of employment in fiscal year 2017
Male employees:

41

18.2 years Female employees: 19.2 years Overall:18.4 years

33

25
30

10

3

3.1%

20
2.6%

2

2.2%

5

4

3.7%

24
20

4.4%

28

20

15

（%）

5

40

10
1

0
1994

2009 2010 2011 2012 2013 2014 2015 2016 2017 (FY)0

DIC Report 2018

10

2014

2015

2016

2017

2018

0

(FY)

Achieving Sustainable Growth

The DIC Group’s Approach to Value Creation

Climate change

Business
Segments

Printing
Resource depletion

Fine Chemicals

Health-related issues

Coating

Solutions

Investment of capital

Organic
molecular
designInputsIntellectual capital(Technologies)

Printing Inks

Human capital(Diverse humanresources)

Diversesocial imperatives

Processes

Production capital(Facilities)

Financial capital(Capital base)With the aim of ensuring a sustainable society, the DIC Group strives to provide
products and solutions that respond to the needs of markets and its customers
and add color and comfort to life.

Polymer
designOpticsCore
andcolor technologies

Application
Materials

Applicability Dispersion
assessment

Provision of
distinctively
DIC solutions(Coating/printing/molding/adhesion)

Natural capital(Raw materials/
environment)

Adhesion
Compounds

Next-generation
businesses
Cyber threats

Polymers
Social and relationship capital(Customers)

Human rights issues

Open
innovation

Molding
Climate change

DIC Report 201811

Realization ofcolorful,
comfortable andsustainable
lifestyles
PackagingFood safety

Electronics

Value created

Automobiles

Outcomes

Outputs

Expansion of operations in promising markets

Healthcare

Harmony
with theenvironment

Infrastructure

Consumergoods

Joy and contentment
Remaining a distinctive company worthy of society’s trust
DIC Report 201812

Printing Inks

A Stable Business
Since the Start
President, Printing Inks Business Unit Hideo Ishii

This segment focuses on printing
inks, DIC’s mainstay businesssince its establishment. A global
market leader, DIC boasts an
H[WHQVLYHSURGXFWSRUWIROLRUDQJLQJ
from publishing inks to inks andadhesives for packaging, enabling
it to respond to the needs ofcustomers worldwide.

Printing Inks Product Division

Key
Products

2IIVHWLQNVJUDYXUHLQNVÀH[RLQNVFDQFRDWLQJVQHZVLQNVSDFNDJLQJDGKHVLYHVSULQWLQJVXSSOLHV

Outstanding color
reproduction and reduced
energy consumption

Ensuring safety for food andthe environment
FINART series(Gravure inks for food packaging)

DAICURE HR series(High-sensitivity UV-curable offset inks)

FINART gravure inks combine superb image
quality and suitability for high-speed printing.
They also respond to demand for the reductionof solvents in food packaging and for compliancewith safety regulations in different markets, thereby
contributing to safety for food and the environment.

As well as suitability for use with low-power
UV printers, DIC’s innovative DAICURE
HR high-sensitivity UV-curable offset inks
deliver outstanding color reproduction.

| Segment Operating Results
Net Sales(Billions of yen)

For more information, please see Segment Results on pages 2–4 of the attached Financial Section.

FY2016FY2017FY2018 (Forecast)

365.2

373.7

391.4

FY2016FY2017FY2018 (Forecast)

18.4

17.4

17.8

(Billions of yen/ %)

71.9

64.8

61.6

Operating Income
and Operating
Margin

4.8
241.1

232.7

251.0

79.8

77.1

77.7

(8.9)

(9.4)

(9.2)

Japan

The Americas
and Europe

Asia and
Oceania

Eliminations

4.7％

13

4.6％

8.4

9.5

95
9.0

5.1

3.9

4.1

Japan

DIC Report 2018

4.7

4.0
5.0％

The Americas
and Europe

Asia and
Oceania

Operating margin

| Business Strategies Under DIC108
Rationalize operations in mature markets and shift focus
to packaging inks

Expand operations by focusing on promising markets
and products

Recent years have seen a tapering of demand for publishing inks, news inks
and other inks for paper-based print media, particularly in mature markets
such as Japan, North America and Europe, owing to the burgeoning
popularity of digital media. Since its previous medium-term management
SODQZKLFKUDQIURPILVFDO\HDUWKURXJKILVFDO\HDUWKH',&
Group has sought to strengthen the printing inks business by advancing
WKUHHFRUHVWUDWHJLHVZKLFKDUHWRIXUWKHUUDWLRQDOL]HRSHUDWLRQVLQPDWXUH
markets, to augment operations in promising emerging economies andto shift its business focus to packaging inks, for which demand is rising
ZRUOGZLGH8QGHU',&WKH*URXSLVWDNLQJGHFLVLYHVWHSVWRUHLQIRUFHLWV
presence in emerging economies, keeping a close eye on demand trends.
$WWKHVDPHWLPHWKH*URXSLVZRUNLQJWRRSWLPL]HLWVUHJLRQDOSURGXFWLRQ
configurations and elevate sales of segment products, particularly
environment-friendly inks, functional coatings and adhesives.

The DIC Group is reinforcing its production capabilities, placing
an emphasis on the Middle East, South America and key AsianPDUNHWVVXFKDVWKH3KLOLSSLQHVDQG9LHWQDP,QERWKHPHUJLQJ
and developed economies, the Group is focusing its allocation of
resources on environment-friendly products for food packaging
applications, including packaging inks, functional coatings andadhesives. Through these efforts, together with those in related
businesses such as films, the Group will continue striving toprovide total packaging materials solutions that respond to theneeds of both consumers and brand owners.

| Progress of Major Initiatives in Fiscal Year 2017
Group’s presence in this strategically important market, Sun
Chemical Corporation formed a joint venture with the region’s
leading printing inks manufacturer in terms of market share. Sun&KHPLFDOKDVORQJKDGRSHUDWLRQVRQWKH$UDELDQ3HQLQVXOD
7KH*URXSZLOOPRYHVZLIWO\WRPD[LPL]HV\QHUJLHVEHWZHHQWKH
ORFDOSDUWQHU¶VPDUNHWLQJFDSDELOLWLHVZKLFKUHÀHFWLWVIDPLOLDULW\with the market, and Sun Chemicals’ technologies to provide
top-quality products and superior services.

In the area of packaging inks, demand continued to increase inJapan, North America and Europe, underpinned by increasingly
sophisticated consumer lifestyles. Demand in emerging
HFRQRPLHVDOVRFRQWLQXHGWRH[SDQGRZLQJWRSRSXODWLRQJURZWKand rising living standards.
Evocative of the DIC Group’s commitment to promoting
recycling and reuse, in Japan the period brought the launch of
a rice ink, an innovative environment-friendly printing ink madewith recyclable materials derived from biomass, namely, ricebran. In addition to being included in the list of rice inks approved
by Japan’s Rice Ink Consortium, the new ink has gained
Biomass Mark certification from the Japan Organic Recycling
Association (JORA). The Group was also active in emerging
economies, establishing a joint venture in Saudi Arabia.
3DFNDJLQJLQNVDFFRXQWIRUPRUHWKDQRIWKHSULQWLQJLQNVPDUNHWRQWKH$UDELDQ3HQLQVXODZKHUHWKHDQQXDOPDUNHWIRU
VXFKLQNVLVSURMHFWHGWRFRQWLQXHJURZLQJDWEHWZHHQDQG
IRUWKHIRUHVHHDEOHIXWXUH:LWKWKHDLPRIH[SDQGLQJWKH

DIC Launches the PASLIM VM Series of Dry Laminating Adhesives that
(QKDQFHWKH2[\JHQ%DUULHU3URSHUWLHVRI9DSRU'HSRVLWLRQ)LOPVHIGHLIGHT,Q¿VFDO\HDU',&GHYHORSHGWKHPASLIM VMVHULHVRIGU\ODPLQDWLQJDGKHVLYHVZKLFKLPSURYHWKHR[\JHQEDUULHUSURSHUWLHVRIIRRGSDFNDJLQJPDWHULDOVPDGHZLWKYDSRUGHSRVLWLRQ¿OPV7KLVJURXQGEUHDNLQJSURGXFWFRPSHQVDWHVIRUVFUDWFKHVDQGFUDFNVLQWKHYDSRUGHSRVLWHGOD\HUVWRZKLFKLWLVDSSOLHGHQKDQFLQJVXFKOD\HUV¶LQKHUHQWR[\JHQEDUULHUSURSHUWLHVWRDFKLHYHDSHUIRUPDQFHOHYHOFORVHWRWKDWRIDOXPLQXPIRLOWKHUHE\KHOSLQJWRUHGXFHIRRGORVVDQGVLPSOLI\SDFNDJLQJ,QDGGLWLRQDOWKRXJK',&¶VQHZGU\ODPLQDWLQJDGKHVLYHH[KLELWVH[FHOOHQWKDQGOLQJSURSHUWLHVHTXLYDOHQWWRWKRVHRIFRQYHQWLRQDOSURGXFWVWKHKLJKVROLGGHVLJQPHDQVWKDWLWVHPLVVLRQVRIYRODWLOHRUJDQLFFRPSRXQGV 92&V DUHORZHUWKDQWKRVHRIH[LVWLQJ',&adhesives. As well as complying with codes and standards for packaging based on Article 18 of Japan’s Food Sanitation Act (Ministry of Health, Labour and:HOIDUH2UGLQDQFH1R WKHSURGXFWKDVPHWWKH86)RRGDQG'UXJ$GPLQLVWUDWLRQ )'$ ¶VUHJXODWLRQIRUDGKHVLYHVXVHGLQIRRGSDFNDJLQJPASLIM VM reinforces oxygen-barrier propertiesp
Oxygen (gas)Oxygen (gas)No adhesive layer

O
Oxygen
(gas)
( )

O
(gas)
( )
Existing products Oxygen

O
Oxygen(gas)((gaas))Adhesive layer（ Existing adhesive）

PASLIM VM

OOxygen(gas)( )Adhesive layer ( PASLIM VM )Defectect

V
Vapor-deposited
layer

Vapor-deposited layer

Vapor-deposited layer

Film

Film

Film

Vapor deposition films that have no adhesive layer
and are free of defects arising from pinholes, creases
and scrapes, which occur during manufacturing,allow gases to pass through.

Coating with an existing adhesive is comparatively
effective in preventing gas leakage, but defects allow
gases to seep out.

Coating with PASLIM VM essentially eliminates gas
leakage and, because it compensates for defects,
prevents them from allowing gases to seep out.

DIC Report 201814

DefectDeD

Fine Chemicals

Optronics Materials andOther High-Value-Added
3URGXFWV
President, Fine Chemicals Business Unit Kazuo Hatakenaka

3URGXFWV LQ WKLV VHJPHQW
include a wide variety ofmaterials indispensable todigital devices, includingorganic pigments for color
filters and LC materials,
ZKLFKDUHH[SHFWHGWRGULYH
growth for DIC in the years
ahead.

Key
Products

Pigments Product Division

Liquid Crystal Materials Product Division

Organic pigments; special effect pigments;
PHWDOFDUER[\ODWHVVXOSKXUFKHPLFDOV OXEULFDQWDGGLWLYHV

7KLQ¿OPWUDQVLVWRU 7)7/& PDWHULDOV6XSHUWZLVWHG
nematic (STN) LCs

A marked increase inbrightness and reduced LCD
energy consumption

Responding to the evolutionof LCDs
TFT LC materials

G58 series*UHHQSLJPHQWVIRUFRORUÀOWHUVThe production of TFT LCs demands
DGYDQFHGWHFKQRORJLFDOH[SHUWLVH',&LV
one of only a few companies in the world
ZLWK VXFK H[SHUWLVH ',&¶V WHFKQRORJLHV
ensure it is able to provide products that
respond to demands for faster response
times and greater long-term reliability.

In developing the G58 series of green pigments, DIC
GH¿HGFRQYHQWLRQDOZLVGRPE\XVLQJ]LQFUDWKHUWKDQ
copper, as the central metal, which achieves a marked
increase in brightness and reduces energy consumed
by the liquid crystal display (LCD).

| Segment Operating Results
Net Sales(Billions of yen)

For more information, please see Segment Results on pages 2–4 of the attached Financial Section.

FY2016FY2017FY2018 (Forecast)

128.2

135.4

3,793
132.5

Operating Income
and Operating
MarginFY2016(Billions of yen/ %)

107.0

107.7

41.3

43.7

40.0

(15.3)(14.3)
Japan

Overseas

FY2018 (Forecast)

17.4

17.0

14.4
12.8％

11.3％

101.1

FY2017

12.8％

7.1

9.2

8.7

7.5

8.3

8.3

(15.3)
EliminationsJapan

DIC Report 201815

Overseas

Operating margin

| Business Strategies Under DIC108
LCs

The DIC Group is powering growth in this segment by increasing value added.
7RWKLVHQGWKH*URXSLVFDSLWDOL]LQJRQLWVFRQWLQXRXVSURGXFWGHYHORSPHQWDQG
VROLGVXSSO\FRQ¿JXUDWLRQWREROVWHULWVVKDUHRIWKHPDUNHWVIRUWKHVHJPHQW¶V
two key strategic products: functional pigments and TFT LCs.

:LWKDQHPSKDVLVRQQW\SH7)7/&VWKHSULQFLSDOW\SHRI/&VXVHGLQODUJH
scale displays in LCD televisions and other devices, DIC is actively bringing
new products to market by allocating resources to development. The Group is
DOVRPD[LPL]LQJLWVWHFKQLFDODQGSURGXFWLRQEDVHLQ4LQJGDRWRDXJPHQWLWV
RSHUDWLRQVLQWKH3HRSOH’V5HSXEOLFRI&KLQD 35& ZKLFKLVH[SHFWHGWREHD
major center of LCD manufacturing going forward.

Pigments:LWKWKHPDUNHWIRURUJDQLFSLJPHQWVIRUSXEOLVKLQJLQNV²WKHSULQFLSDOVRXUFH
of demand for these products—shrinking, the DIC Group is working to increase
sales of functional pigments for niche and high-growth applications, including
SLJPHQWVIRUFRORU¿OWHUVSLJPHQWVIRUFRVPHWLFVDQGVSHFLDOHIIHFWSLJPHQWV,Q
WKHDUHDRISLJPHQWVIRUFRORU¿OWHUVWKH*URXSZLOOEURDGHQLWVOLQHXSRISURGXFWVthat help improve color and functions. The Group is also striving to augment its
recently acquired special effect pigments business in Europe by bolstering salesof high-value-added products and reinforcing its production capacity for pigments
XVHGLQEXLOGLQJPDWHULDOV7RH[SDQGLWVSLJPHQWVIRUFRVPHWLFVEXVLQHVVWKH
Group has broadened its focus to include pigments for skincare products andis taking steps to increase its production and sales of red pigments, demand forwhich continues to rise, as well as to boost sales in Japan.

TFT LCs used in LCD televisions| Progress of Major Initiatives in Fiscal Year 2017
Pigments

WUDQVPLVVLYLW\WKHQHZ136/&VIDFLOLWDWHWKHGHVLJQRIQHZ/&'VWKDW
respond to advanced performance requirements. The launch of this andRWKHUKLJKSHUIRUPDQFHSURGXFWVLVH[SHFWHGWREROVWHUVDOHVRI/&V

Owing to the strengthening of laws and regulations pertaining to color
materials for cosmetics, demand for the DIC Group’s pigments forcosmetics—which comply with laws enforced by the U.S. FDA andits counterparts in other countries—grew rapidly, particularly in AsianPDUNHWV'HPDQGIRUVSHFLDOHIIHFWSLJPHQWVFRQWLQXHGWRH[SDQG
steadily in Eastern Europe, the Middle East and Asia, underpinned by
the Group’s technologies for controlling density, compression strength
DQGWKHUPRFRQGXFWLYLW\ZKLFKDUHH[SHFWHGWRVXSSRUWVXVWDLQDEOH
growth for this business in the years ahead.

LCs)LVFDO\HDUEURXJKWWKHGHYHORSPHQWRIJURXQGEUHDNLQJQDQRSKDVHVHSDUDWHG 136 /&VWKDWERRVW/&'UHVSRQVHVSHHGZKLFKLVFULWLFDOWR
picture quality for sports and other content involving high-speed action.
Because they allow control of response speed, applied voltage and

6XQ&KHPLFDO3LJPHQWVIRU&RVPHWLFV5HFHLYH$SSURYDO8QGHUEurope’s COSMOS Standard for Natural and Organic Cosmetics

HIGHLIGHT

Sun Chemical’s SunPURO ®2[LGHV(&2&(57 FHUWL¿HGVHULHVRIRUJDQLFSLJPHQWVIRU
FRVPHWLFVUHFHQWO\UHFHLYHGDSSURYDOXQGHU(XURSH¶VXQL¿HG&26026 &260HWLF2UJDQLF
Standard) for natural and organic cosmetics. A premium line of pigments for cosmetics,
SunPURO ®SLJPHQWVERDVWDQH[WUHPHO\ORZKHDY\PHWDO QDWXUDOO\RFFXUULQJLQRUJDQLF
material) content and are used in foundation, base makeup and mascara, among others.
COSMOS approval was earned by the four pigments comprising the SunPURO ®2[LGHV
VHULHV5HGLURQR[LGH\HOORZLURQR[LGHWLWDQLXPGLR[LGH ZKLWH DQGEODFNLURQR[LGH&26026ZDVGHYHORSHGE\DQLQGHSHQGHQWQRQJRYHUQPHQWDORUJDQL]DWLRQHVWDEOLVKHG
LQE\ILYHRUJDQL]DWLRQVLQFOXGLQJ(&2&(57EDVHGLQIRXU(XURSHDQFRXQWULHV)UDQFH*HUPDQ\,WDO\DQGWKH8QLWHG.LQJGRP ZLWKWKHDLPRIFUHDWLQJDXQL¿HGJOREDO
standard. Owing to the lack of a standard for natural cosmetics at the time, COSMOS wasODWHUDGRSWHGDVDXQL¿HGVWDQGDUGIRU(XURSH&26026LVFXUUHQWO\DWWUDFWLQJDWWHQWLRQDV
a promising candidate to become a single global standard.
 (&2&(57 LV DQ LQGHSHQGHQW RUJDQLF FHUWLILFDWLRQ RUJDQL]DWLRQ WKDW SURYLGHV
assessment and cer tif ication for compliance with European standards fordesignating products “organic.”

DIC Report 201816

Attestation of conformity with COSMOSPolymers

DIC’s Second Core
Business
President, Polymers Business Unit Toshio Hasumi&DSLWDOL]LQJRQ',&¶VZRUOG
class technologies andknow-how, this segmentprovides synthetic resins andresin-related products to awide array of industries.

Polymers Product Division

Key
Products:DWHUERUQHUHVLQVXOWUDYLROHW 89 FXUDEOHUHVLQVDFU\OLFUHVLQVPHWKDFU\ODWHUHVLQVHSR[\UHVLQVSKHQROLFUHVLQVÀXRURFKHPLFDOVSRO\XUHWKDQHUHVLQVSRO\HVWHUUHVLQVSODVWLFL]HUVXQVDWXUDWHGSRO\HVWHUUHVLQVSRO\VW\UHQHDON\OSKHQROV

Environment-friendly nextgeneration adhesives that
respond to diverse needs

Technologies that facilitate the controlof light for applications ranging fromGLVSOD\FDVHVWRRSWLFDO¿EHUV

TYFORCE series(Moisture-curing hot melt adhesives)

DEFENSA OP series(Low-refractive index UV-curable resins)

This series of solvent-free adhesives delivers
superb production efficiency and bonding strength.
These resins have been adopted for a wide range ofapplications, including building materials, apparel andelectronic components.

Used for optical fiber cladding and opticalcoatings, the DEFENSA OP series of lowUHIUDFWLYH LQGH[ 89 FXUDEOH UHVLQV KHOSV
improve the performance of optical fibers andthe brightness of display cases.

| Segment Operating Results
FY2016Net Sales

FY2017(Billions of yen)

3,793

204.3

136.4

147.0

147.4

(5.6)

(6.9)

(6.6)

Overseas

FY2016(Billions of yen/ %)FY2018 (Forecast)

FY2017

19.6

20.1

19.6
5.4

6.1

10.9％

63.4

57.9

Japan

Operating Income
and Operating
MarginFY2018 (Forecast)

197.9

180.9
50.1

For more information, please see Segment Results on pages 2–4 of the attached Financial Section.

9.9％

6.7

12.9

Eliminations

14.3

Japan

DIC Report 201817

Overseas

9.8％

14.0

Operating margin

| Business Strategies Under DIC108
Product strategy

:LWKGHPDQGRQWKHGHFOLQHLQ-DSDQWKH*URXSLVLQWHJUDWLQJ
and closing production lines while at the same time pursuingmarkets for polyurethane and UV-curable resins for niche andhigh-performance applications, thereby lifting the weighting of
high-value-added products in its portfolio.

The DIC Group is concentrating management resources on
strategic products, namely, waterborne, UV-curable, acrylic,polyurethane and polyester resins, and accelerating global
development with a focus on promising markets, notably thosefor coatings and adhesives in Asia.

Regional strategy&DSLWDOL]LQJRQWHFKQLFDOFHQWHUVHVWDEOLVKHGLQ7KDLODQGDQG
WKH 35& WKH *URXS LV UHVSRQGLQJ WR LQFUHDVLQJO\ VWULQJHQW
environmental regulations by offering waterborne, solventfree and other environment-friendly products, as well as byadvancing the development and sale of offerings that respondto needs for general-purpose products and boosting overseas
sales as a percentage of overall segment sales.

Demand for environment-friendly products for use in coatings is increasing overseas| Progress of Major Initiatives in Fiscal Year 2017
Environmental initiatives
In Japan, a new series of polyester resins for use on precoatedmetal was developed and launched. In addition to reducing
emissions of VOCs when forming coatings, this new globalstandard series complies with the world’s most stringent
regulations governing chemical substances. Overseas, apolymers subsidiary in Thailand installed and began using solar
panels, thereby reducing its emissions of CO 2, a move designed
to combat global warming.

Regional trends,Q-DSDQVKLSPHQWVRIKLJKYDOXHDGGHGSURGXFWVURVH:LWK
sales of polystyrene robust against a backdrop of rising demand
for use in packaging for ready-made foods, domestic production
FDSDFLW\ ZDV H[SDQGHG E\ DSSUR[LPDWHO\  ,Q RYHUVHDV
markets, overall shipments of waterborne resins and otherenvironment-friendly products increased.

',&,QFUHDVHV3URGXFWLRQ&DSDFLW\IRU3RO\VW\UHQH8VHGLQ
3DFNDJLQJIRU3UHSDUHG)RRGV%\UHLQIRUFLQJIDFLOLWLHVDQGRSWLPL]LQJSURGXFWLRQSURFHVVHVDIC increased the annual production capacity of the<RNNDLFKL3ODQWORFDWHGLQ<RNNDLFKL0LH3UHIHFWXUHIURPPHWULFWRQQHVWRPHWULFWRQQHV,QDGGLWLRQ
to general-purpose DICSTYRENEZKLFKERDVWVH[FHOOHQWtransparency and impact resistance, and HYBRANCH
hyperbranched polystyrene, a high-performance productthat offers both strength and superb moldability, DIC’s
polystyrene lineup includes RYULEX transparent heatresistant styrene-based resins. Valued for its transparency,
foamability and moldability, polystyrene is odorless, making
LWDSRSXODUFKRLFHIRUXVHLQIRRGWUD\VIRUOXQFKER[HVDQG
SUHSDUHGIRRGVVROGDWIRUH[DPSOHFRQYHQLHQFHVWRUHVDQG
supermarkets. DIC will further strengthen its polystyrene
SURGXFWLRQFRQ¿JXUDWLRQWRHQVXUHVWDEOHVXSSOLHVHIGHLIGHT<RNNDLFKL3ODQW

DIC Report 201818

Compounds

New Value Created throughDispersion and Compounding
Technologies
President, Compounds Business Unit Masanobu Mizukoshi

This segment leverages resinand pigment dispersion andcompounding technologies
accumulated since DIC’s
founding to provide productsthat respond to needs in
WKHH[SDQGLQJJOREDOGLJLWDO
printing, automotive andelectronics markets.

Key
Products

Liquid Compounds Product Division

Solid Compounds Product Division-HWLQNV¿EHUDQGWH[WLOHFRORUDQWVDQGDUWL¿FLDOOHDWKHUFRORUDQWVKLJKSHUIRUPDQFHFRDWLQJVDQGDGKHVLYHPDWHULDOVFRDWLQJVIRURSWLFDO¿OPV

336FRPSRXQGVKLJKSHUIRUPDQFHFRPSRXQGVplastic colorants; high-performance optical materials

Helping customers
realize outstanding color
development and gloss

Contributing to therealization of lighter, more
IXHOHI¿FLHQWYHKLFOHVSunJet series

DIC.PPS series (PPS compounds)

Advanced DIC Group pigment dispersion
WH F K Q R O R J L H V HQVX U H H[F H O O H QW F R O R UGHYHORSPHQW DQG D JORVV\ ILQLVK :LWK D
reputation for reliability, the SunJet seriesof jet inks enjoy popularity in markets
around the world.

7KH',&*URXS¶V336FRPSRXQGVERDVWH[FHOOHQWKHDW
and chemical resistance, rigidity, strength and electricalinsulating properties, as a result of which they have foundapplication in components for hybrid, electric and otherenvironment-friendly vehicles as an alternative to metalmaterials, which helps reduce vehicle weight.

| Segment Operating Results
FY2016Net Sales

FY2017(Billions of yen)

33.3

FY2018 (Forecast)

Operating Income
and Operating
Margin69.5(Billions of yen/ %)

64.7

61.1

For more information, please see Segment Results on pages 2–4 of the attached Financial Section.

FY2016FY2017FY2018 (Forecast)

5.0

5.0

5.0

7.7％

7.2％

8.1％

39.5

2.4

2.5

2.0

2.0

3.1

3.0

35.9

39.2

41.7

43.8

(11.5)(12.9)(13.7)

Japan

Overseas

EliminationsJapan

DIC Report 2018

19

Overseas

Operating margin

| Business Strategies Under DIC108
PPS compounds

The DIC Group is leveraging its growth-driving basic andcomposite technologies to continuously bring new products thatsatisfy the needs of users to market in the strategically important
DUHDVRIMHWLQNVDQG336FRPSRXQGV7KURXJKVXFKHIIRUWVWKH
*URXSLVVWULYLQJWRUHDOL]HDKLJKHUJURZWKUDWHWKDQWKHPDUNHW9DOXHG IRU WKHLU H[FHOOHQW KHDW DQG FKHPLFDO UHVLVWDQFH
336FRPSRXQGVDUHXVHGZLGHO\DVDQDOWHUQDWLYHWRPHWDO
materials in components for automotive engines and electronics
equipment. To maintain its leading share of the global market,
WKH',&*URXSLVSURPRWLQJWKHH[SDQVLRQRISURGXFWLRQIDFLOLWLHVZLWKWKHDLPRIVWDELOL]LQJLWVJOREDOVXSSO\FRQILJXUDWLRQ7KH
Group is also increasing the number of employees in sales andtechnical services for key automobile and automotive component
manufacturers to enhance the accuracy and speed with which
DIC Group products obtain approval from manufacturers.

Jet inks
To date, the DIC Group has sought to augment this businessby focusing on high-value-added water-based and UV-curable
jet inks, primarily for industrial and office-related applications.
In addition to boosting sales in these markets, the Group is
H[SDQGLQJHIIRUWVWRPDUNHWSURGXFWVIRUQHZDSSOLFDWLRQVVXFKDVWH[WLOHVDQGFHUDPLFVGHPDQGIRUZKLFKLVH[SHFWHGWRULVH

| Progress of Major Initiatives in Fiscal Year 2017
Jet inks&DSLWDOL]LQJRQLWVFRPSHWLWLYHDGYDQWDJHVWKH',&*URXSWRRNVWHSVto enhance cooperation with printer and printer head manufacturers to
H[SDQGLWVVDOHVFKDQQHOV7KH*URXSDOVRSUHVVHGDKHDGZLWKRQJRLQJ
development efforts with the goal of building new businesses, including
SURGXFWVIRURI¿FHXVHPXOWLIXQFWLRQSULQWHUV 0)3V WH[WLOHVDQGFHUDPLFV

PPS compounds
The reduction of fuel consumption is a principal focus of efforts across theautomobile industry. To this end, manufacturers are stepping up efforts
to use alternatives to metal materials in a bid to lower vehicle weight.
5HÀHFWLQJWKLVWUHQGWKH\HDUVDZVWHDGLO\H[SDQGLQJVKLSPHQWVRI336
FRPSRXQGVIRUXVHLQIXHOHI¿FLHQWYHKLFOHVQRWDEO\K\EULGVLQ-DSDQIn India, the Group responded to voracious demand by adding three newsites to its local sales network. The Group also added people to its sales
IRUFHLQ1RUWK$PHULFDWKHUHE\IRUWLI\LQJLWVORFDOVDOHVFRQ¿JXUDWLRQ
336FRPSRXQGVSURGXFWLRQIDFLOLW\LQWKH35&

6ROLG&RPSRXQG7HFKQLFDO&HQWHU$VLD3DFL¿FLV(VWDEOLVKHG:LWKWKHDLPRIGHYHORSLQJDQGLPSURYLQJSURGXFWVVXLWDEOH
for markets in Southeast and South Asia, and to strengthen
LWV WHFKQLFDO VHUYLFH VWUXFWXUH LQ WKH 336 FRPSRXQGV DQGresin colorants businesses, DIC established the Solid&RPSRXQG7HFKQLFDO&HQWHU$VLD3DFLILFRQWKHSUHPLVHVRIDIC Compounds (Malaysia) Sdn. Bhd. In addition, injection
molding machines and equipment for use in evaluating material
properties that are compatible with engineering plastics were
installed, thereby creating a system that can respond in a timely
PDQQHUWRWKHQHHGVRIUHJLRQDOFXVWRPHUV,QDGGLWLRQWR336
FRPSRXQGVSURGXFWLRQIDFLOLWLHVLQ-DSDQWKH35&$XVWUDOLD
and Malaysia, the DIC Group now has technical centers in-DSDQ WKH 35& DQG (XURSH 7KH QHZ IDFLOLW\ LQ 0DOD\VLD
further strengthens the Group’s integrated global product
GHYHORSPHQWLPSURYHPHQWDQGWHFKQLFDOVHUYLFHFRQ¿JXUDWLRQHIGHLIGHT

6ROLG&RPSRXQG7HFKQLFDO&HQWHU$VLD3DFL¿FDIC Report 201820

Application Materials$9DULHW\RI3URGXFWV0DGH
3RVVLEOHE\WKH,QWHJUDWLRQDQG
Application of DIC Technologies
President, Application Materials Business Unit Shinsuke Toshima

This segment encompasses adiverse range of products, including
industrial adhesive tapes, hollow¿EHUPHPEUDQHVDQGPRGXOHVDQG
FRH[WUXGHGPXOWLOD\HUILOPVZKLFKare made possible through the
integration of proprietary materials
and coating, printing, molding andother technologies.

Application Materials Product Division

Key
Products,QGXVWULDODGKHVLYHWDSHVPDJQHWLFWDSHVDQGFRDWHGVKHHWVKROORZ¿EHUPHPEUDQHVDQGPRGXOHVFRH[WUXGHGPXOWLOD\HU¿OPVKHDOWKIRRGVDQGQDWXUDOFRORUDQWVGHFRUDWLYHERDUGVLQWHULRUKRXVLQJSURGXFWVDQGFRDWLQJVIRUEXLOGLQJPDWHULDOVGHFRUDWLYHVKHHWVDQGGHFRUDWLYH¿OPVprocessed sheet molding compounds (SMCs), bulk molding compounds (BMCs) and other products; molded plastic products

Enhancing waterproof
smartphone construction

A superfood that provides abalanced wealth of nutrients

DAITAC WS#84 series(Double-sided adhesive tapes for waterproof
mobile communications devices)

DIC Spirulina
Spirulina is an edible blue–green algae rich invitamins, minerals and ß-Carotene that boasts an
H[FHOOHQWDPLQRDFLGEDODQFH6SLUXOLQD¶VQXWULWLRQDO
value and popularity as an ingredient not only in healthfoods but also for culinary applications has earned it areputation as a superfood.

One of the first series of waterproof tapes to be
developed and marketed for waterproof smartphone
construction, the DAITAC WS#84 series continues tosupport efforts to enhance the ability of smartphones
to resist water ingress.

| Segment Operating Results
Net Sales(Billions of yen)

For more information, please see Segment Results on pages 2–4 of the attached Financial Section.

FY2016FY2017FY2018 (Forecast)

Operating Income
and Operating
Margin

55.7

56.1

58.4

(Billions of yen/ %)

3.6
0.4

2.6
1.9

0.3

3.4％

2.3

0.3

55.3

53.0

52.7

FY2018 (Forecast)

FY2017

11.3

10.8

9.9

FY2016

4.6％

6.1％

3.2

1.6

(6.9)

(8.2)

(7.7)
Japan

OverseasJapan

Eliminations

DIC Report 2018

21

Overseas

Operating margin

| Business Strategies Under DIC108
Having devised a new growth model, the DIC Group is stepping up the
H[SDQVLRQRILWVHOHFWURQLFVDQGOLIHVFLHQFHVEXVLQHVV$WWKHVDPH
WLPHWKH*URXSLVSURPRWLQJGHFLVLYHUDWLRQDOL]DWLRQRILWVKRXVLQJ
products business.

degassing modules for water treatment applications. The Group’s
aims in the area of health foods are to maintain high sales of
6SLUXOLQDDKLJKO\UDWHGVXSHUIRRGDQGWRH[SDQGVDOHVRI6SLUXOLQD
derived natural blue food coloring Linablue® in North America andEurope, taking advantage of a shift in market preferences fromsynthetic to natural food colorings.

Electronics and life sciences
In industrial adhesive tapes, the DIC Group is accelerating specin initiatives with global brand owners, as well as with nascent
ORFDOEUDQGRZQHUVLQWKH35&ZLWKWKHJRDORIEROVWHULQJDGRSWLRQ
for use in smartphones and tablets. The Group is also promoting
development efforts with a view to entering the market for vehiclemounted displays in the future. In hollow-fiber membranes andmodules, the Group is working to sustain high growth for degassing
modules used in inkjet printers, for which it holds the leading global
market share, and to make a full-scale entry into the market for large

Housing products
In the area of unsaturated polyester resin molded products, the DIC*URXSFRQWLQXHVZRUNLQJWRLPSURYHSUR¿WDELOLW\WKURXJKUHVWUXFWXULQJ
measures and decisive cost reductions. In laminated products, theGroup is revamping its business model for DIC200, a key strategic
building material, and implementing dramatic structural reforms. The
Group is also working to enhance the accuracy and accelerate the
SURFHVVRIJDLQLQJFHUWL¿FDWLRQIRUVHJPHQWSURGXFWV| Progress of Major Initiatives in Fiscal Year 2017
Electronics and life sciences
Shipments of industrial adhesive tapes increased, led by products for
DXWRPRELOHVDQGVPDUWSKRQHV,QWKHDUHDRIKROORZ¿EHUPHPEUDQHV
and modules, the DIC Group augmented its lineup of products forthe degassing of jet inks and the production of ultrapure water for
use in semiconductor fabrication processes, by introducing a new
GHFDUERQL]LQJPRGXOHDQGLQDQWLFLSDWLRQRIKHDOWK\GHPDQGLQWURGXFHG
a new model with a high flow rate. In health foods, the DIC GroupH[SDQGHGLWVSURGXFWLRQFDSDFLW\IRULWVQDWXUDOEOXHIRRGFRORULQJ

Housing products
Newly developed products included a sheet-form passive heat storage
material that effectively harnesses solar heat to maintain comfortable room
WHPSHUDWXUHV&UHDWHGE\GLVSHUVLQJDSKDVHFKDQJHPDWHULDO 3&0 
in resin, this innovative material can be processed at construction sites,
something not possible with conventional materials, for easy use in housing
construction. Because it can also be used as a cold storage material,
the DIC Group is also marketing it for use in the constant-temperaturetransportation of pharmaceuticals, as well as for horticultural applications.

+ROORZ¿EHUPHPEUDQHPRGXOHIRUGHJDVVLQJDQGDHUDWLQJOLTXLGV',&%XLOGV1HZ3URGXFWLRQ)DFLOLW\IRU+ROORZ)LEHU0HPEUDQH
Modules Used for Degasifying Jet InksHIGHLIGHT

DIC built a new plant for manufacturing small hollow-fiber
membrane modules for degassing and aerating liquids in
the SEPAREL® series, which are used in the degassingof inks for industrial inkjet printers, on the site of its Chiba
3ODQW ',& ZKLFK HQWHUHG WKH KROORZILEHU PHPEUDQH
business in 1989, manufactures proprietary membranes
FRPSULVLQJ ± μm-diameter hollow fibers and a
nonporous surface skin layer with a thickness of 1 μm.
+DLOHGIRUVLJQL¿FDQWO\UHGXFLQJWKHQHJDWLYHFRQVHTXHQFHVRIGHJDVL¿FDWLRQWKHVHSURGXFWVFXUUHQWO\FRPPDQGD
share of the global market for membrane modules used
in inkjet printers. Going forward, the Company will work tofurther grow its leading global market share.
New production facility

DIC Report 201822

Fiscal Year 2017 DIC Group Topics
TOPIC

1

1

Strategies for Sustainable Growth: Progress Report',&KDVLQFOXGHGDVSHFL¿FTXDQWLWDWLYHWDUJHWRI¥ELOOLRQIRUVWUDWHJLFLQYHVWPHQWVLQFOXGLQJLQPHUJHUVDQGDFTXLVLWLRQV 0 $V RYHUWKH
WKUHH\HDUVRILWVFXUUHQWPHGLXPWHUPPDQDJHPHQWSODQ',&,Q¿VFDO\HDUWKH&RPSDQ\PDGHDQXPEHURILQYHVWPHQWVZLWKWKHDLP
RIPDNLQJXVHRIH[WHUQDOUHVRXUFHVLQDPDQQHUWKDWDOLJQVZLWKWKHIXQGDPHQWDOJRDOVRI',&ZKLFKDUHWRVWDELOL]HWKHHDUQLQJVRILWVFRUH
EXVLQHVVHVH[SDQGEXVLQHVVHVWKDWZLOOGULYHJURZWKDQGFUHDWHQH[WJHQHUDWLRQEXVLQHVVHVCapital and Business Alliance with Taiyo Holdings and Other Strategic Investments

On January 25, 2017, DIC announced a capital and business alliance with Taiyo Holdings, as a result of which Taiyo Holdings became an equity-method
affiliate of DIC. Total investment by DIC, which amounted to ¥24.9 billion, was subsequently completed. The alliance brings together the DIC Group’smaterials development capabilities, which draw on its core technologies, and Taiyo Holdings’ extensive supply chain, which encompasses solder resist and3:%VWRSURPRWHWKHVZLIWDQGHI¿FLHQWGHYHORSPHQWRIPROGHGLQWHUFRQQHFWGHYLFHV 0,'V DQGRWKHUQH[WJHQHUDWLRQPDWHULDOV,Q6HSWHPEHU',&
signed a global, multiyear cooperative agreement with Fermentalg of France, a leader in the production of algae for nutrition and health applications. ThisSDUWQHUVKLSZLOOEULQJWRJHWKHU)HUPHQWDOJ¶VXQLTXHPLFURDOJDHVWUDLQEDQNDQGLQWHJUDWHGELRWHFKQRORJ\SODWIRUPZLWK',&¶VVLJQL¿FDQWDSSOLHGUHVHDUFKmass production capabilities and global sales network.
Group company Sun Chemical, operations of which are centered in North America and Europe, also continued to promote key strategic investments aimed
DWUHLQIRUFLQJLWVVDOHVFRQ¿JXUDWLRQLQKLJKJURZWKPDUNHWVDQGUHJLRQV,Q-XO\6XQ&KHPLFDODFTXLUHG-RXOHV$QJVWURP893ULQWLQJ,QNV&RUSDVSHFLDOL]HGPDQXIDFWXUHURI89FXUDEOHSULQWLQJLQNVZKLOHLQ1RYHPEHULWIRUPHGDMRLQWYHQWXUHZLWK$OOLDQFH+ROGLQJV&RPSDQ\/WGFRPELQLQJLWV
SULQWLQJLQNVEXVLQHVVRQWKH$UDELDQ3HQLQVXODZLWKWKHRSHUDWLRQVRI$OOLDQFH+ROGLQJV¶VXEVLGLDU\,QN3URGXFWV&RPSDQ\/WGWKHUHJLRQ¶VWRSSULQWLQJLQNV
manufacturer in terms of market share. Sun Chemical’s stake in the new company is 51%.

Switzerland

Canada● Venture capital

investment● Acquisition ofJapan● Joint venture

capital investment

Colmar Inks’
flexo inks business(Printing inks)● Joint purchase of sharesin Taiyo Holdings

France● Microalgae-related

business cooperationagreement with
Fermentalg

2

United States

Saudi Arabia● Acquisition of Joules● Joint venture

Angstrom U.V. Printing Inks

with Alliance
Holdings(Printing inks)(UV-curable printing inks)

Collaboration with U.S. Firm Nanosys to Develop Inks for Inkjet-Printed QDCFs',&LVFXUUHQWO\ZRUNLQJZLWK1DQRV\V,QFRIWKH8QLWHG6WDWHVWRGHYHORSLQNVIRUXVHLQWKHSURGXFWLRQRILQNMHWSULQWHGTXDQWXPGRWFRORU¿OWHUV 4'&)V 
4XDQWXPGRWV 4'V DUHOLJKWHPLWWLQJLQRUJDQLFVHPLFRQGXFWRUQDQRSDUWLFOHV%HFDXVHWKHFRORUHPLWWHGFDQEHFRQWUROOHGIUHHO\E\FKDQJLQJGRWVL]H4'V
are garnering considerable attention as materials for next-generation displays.
5HDOL]LQJPDVVFRPPHUFLDOL]DWLRQIRU4'&)VSUHVHQWVWZRNH\FKDOOHQJHV7KHILUVWLVWKDWIDEULFDWLRQFRVWVIRU4'VDUHKLJKFRQVWLWXWLQJDPDMRUKXUGOHWRJURZWKLQGHPDQGDQGPDNLQJLWLPSHUDWLYHIRU4'&)PDQXIDFWXUHUVWRPLQLPL]HSURGXFWLRQORVVHV7KHXVHRILQNMHWSULQWLQJWRSODFH
4'VLVVHHQDVDQLGHDOVROXWLRQWKDWZLOOPDNHWKHORZFRVWSURGXFWLRQRI4'&)VDUHDOLW\4'&)V
IDFLOLWDWHWKHPDQXIDFWXUHRI/&'VDQGRUJDQLFHOHFWUROXPLQHVFHQFHGLVSOD\VWKDWDUHPRUHSRZHUHI¿FLHQWDQGGHOLYHUDZLGHUFRORUJDPXWDQGYLHZLQJDQJOHWKDQH[LVWLQJXQLWVXQGHUSLQQLQJKRSHV&ROORLGDO4'GLVSHUVLRQVLUUDGLDWHGZLWKD89OLJKW
for their use in next-generation displays going forward.

DIC Report 201823

(PSOR\PHQW3UDFWLFHV%DVHGRQWKH,QFRUSRUDWLRQRI'LYHUVLW\LQWR0DQDJHPHQW

TOPIC

2

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Diversity at Work: The First Foreign National Appointed
General Manager of a Product Division
With the aim of maximizing its outstanding human resources and deepening human interaction within the DIC Group, in 2018',&DSSRLQWHGDIRUHLJQQDWLRQDOWRWKHSRVLWLRQRISURGXFWGLYLVLRQJHQHUDOPDQDJHUIRUWKHÀUVWWLPHLQLWVKLVWRU\7KUHHRI
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increase this number by 20%–30%, thereby creating a management framework that ensures responsiveness to global needs.

Myron Petruch
General Manager, Pigments Product Division
President, Performance Pigments,
Sun Chemical Corporation,DPKRQRUHGWRKDYHEHHQDSSRLQWHGJHQHUDOPDQDJHURIWKH)LQH&KHPLFDOV%XVLQHVV8QLW¶V3LJPHQWV3URGXFW'LYLVLRQ$W
Sun Chemical, I am currently president of Performance Pigments, but effective from January 1, 2018, I am serving concurrently
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division. I recognize the tremendous responsibilities that come with this appointment and pledge to perform my duties to the very
best of my ability.
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I have traveled extensively around the world to many DIC and Sun Chemical locations and to many of our global customers to help
reinforce one of our operating foundations, which is that we are one of the top global names and leaders in organic pigments and
VSHFLDOW\HIIHFWSLJPHQWVXVHGLQDEURDGUDQJHRIDSSOLFDWLRQV0\SHUVRQDOPRWWRLV³7KLQNJOREDOO\EXWDFWORFDOO\´$FFRUGLQJO\I will work to maintain both a broad overview to ensure an accurate grasp of global conditions and a narrow focus to ensure athorough understanding of local needs with the goal of further sharpening the DIC Group’s competitive edge.

Expanding Businesses that Will Drive Growthfor pigments for cosmetics is growing rapidly, particularly in Asian markets. The',&*URXS¶VSLJPHQWVIRUFRVPHWLFVFRPSO\ZLWKODZVHQIRUFHGE\WKH86
FDA and its counterparts in other countries, as well as with the most rigorous
standards for purity, giving us a key competitive advantage. We continue tocapitalize on our position as the leading global manufacturer of pigments forcosmetics to drive technical innovation.

In fiscal year 2017, shipments of pigments for color filters, pigments forcosmetics and special effect pigments and other functional pigments were up.
3LJPHQWVIRU&RORU)LOWHUVThe quality expectations of customers for the pigments that determine theperformance of color filters are extraordinarily high. DIC’s green pigments
for color filters satisfy the rigorous standards of manufacturers of nextgeneration high-definition displays, delivering more lifelike colors. As aconsequence, sales of these pigments continue to expand steadily. We are
the world’s largest manufacturer of these filters with a global market shareof approximately 85%. Our share of the global market for blue pigments
for this application also continues to rise, and we are in the process of
expanding our global production capacity to 1.5 times the current level.

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Thanks to its lightness, as well as its excellent thermal and acoustic insulating
SURSHUWLHV¿UHUHVLVWDQFHDQGZRUNDELOLW\DXWRFODYHGDHUDWHGFRQFUHWH $$& is a building material that is expected to continue seeing demand growth.
The production of high-performance aluminum pigments for AAC demands
advanced technical capabilities. Aluminum pastes and powders manufactured
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stability of product quality for the world’s top AAC products. By leveraging
its industry-leading technologies to facilitate precise control of density,
compression strength and thermoconductivity, the DIC Group has establisheditself as the leading global manufacturer of these pigments.

3LJPHQWVIRU&RVPHWLFVOwing to the strengthening of laws and regulations pertaining to color materials
for cosmetics, we are seeing rising awareness of health and safety issues andan increasing preference for natural products. Against this backdrop, demand

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3LJPHQWVIRUFRVPHWLFV+LJKSHUIRUPDQFHVSHFLDOHIIHFWSLJPHQWVDIC Report 201824

Spe c i a l
Fe a ture

Product Development Designed to Create New Value

The DIC Group is leveraging the power ofchemistry to deliver color andcomfort to people’s lives.
Established 110 years ago as a manufacturer of printing inks, DIC has worked continuously to apply and improve its core organic pigments
and synthetic resins technologies to develop an extensive range of high-value-added products. Many of these products are helping toaddress critical challenges facing the world, including issues related to the environment, as well as to safety and peace of mind for people,
and in so doing help to guide us toward the realization of a sustainable global society that is rich with color and comfort.

Polymers

Adhesive Primers for Optical and Packaging Films

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30

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26

Pigments for Color Filters Used in LCDs and OLED Displays (Functional Pigments)
Fine Chemicals

DIC Report 201825

Special Feature: Product Development Designed to Create New Value

Fine Chemicals
Pigments for Color Filters Used in LCDs
and OLED Displays (Functional Pigments)

SDGs Goals 7 and 13

Securing the top share of the global market for
pigments for color filters by offering productswith unrivaled optical properties

DIC’s Share of the Global Market forGreen and Blue Pigments for Color Filters

85 %Green pigments

Value Creation

50%
Blue pigments

Global market-leading pigments that deliver outstanding brightness and picture quality
balance between brightness and contrast. The optical properties of pigments inthis series have earned high marks from smartphone manufacturers and boosted
DIC’s share of the global market for blue pigments to approximately 50%.
DIC’s pigments for color filters, which satisfy the diverse performancerequirements of displays used in LCD televisions, smartphones, tablets andnotebook computers while at the same time adding value, have been adopted foruse by many display manufacturers for use in color filters. In addition to improving
picture quality, these pigments reduce energy consumption and, by extension,
lower emissions of CO2. Having positioned pigments for color filters as a businessthat it expects to drive growth, DIC continues working to reinforce its development
and product supply capabilities.

Color images on LCDs used in televisions, computers and smartphones areproduced using the three primary colors of light—red (R), green (G) and blue (B).
These colors are created using pigments. LCDs produce images by transmitting
light emitted from a backlight lamp through a color filter to which an RGB pattern
has been applied. As a consequence, the pigments used in the color filter are
crucial to picture quality.
With Japan’s shift to digital terrestrial television driving up demand for flatpanel LCD televisions and the popularity of smartphones increasing, in 2007
DIC launched the G58 series of green pigments, which achieved a remarkableincrease in brightness. The series includes FASTOGEN GREEN A350, a green
pigment characterized by outstanding brightness and contrast that ensures
excellent picture quality even with little light from the backlight. In fiscal year 2014,
DIC developed the G59 series of green pigments for wide color gamut color
filters, which deliver superior brightness and color reproduction, making themsuitable for use in filters for next-generation high-definition displays, including
those for ultra-high-definition (UHD) televisions. DIC currently enjoys an 85%plus share of the global market for green pigments for color filters, making its
products the de facto standard. DIC also manufactures blue pigments for color
filters. In 2012, the Company developed the A series, which boasts a superb

DIC Report 201826

Special Feature: Product Development Designed to Create New Value

Glass

PXL

TFT

Glass

LC

CS

Backlight

Composition of an LCD and the Role of Pigments

Light emitted from the backlight is modulated by an LCVKXWWHUDQGFRORUHGDVLWSDVVHVWKURXJKWKHFRORU¿OWHUStructure of a Color Filter
RGB pattern
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Glass substrate
A Distinctively
DIC
ResponseG

Indium–tin oxide (ITO)
conductive layer
B

Back matrix

Applying technologies amassed through the production of printing inks to the development andexpansion of functional pigments that have become the de facto standard worldwide

DIC first succeeded in developing offset printing inks in-house
LQDQG\HDUVODWHUEHJDQSURGXFWLRQRIRUJDQLFSLJPHQWVfor its own use. Over subsequent years, the Company amassed
development and design capabilities, as well as production
technologies, crucial to the manufacture of fine chemicals and in1973 commercialized revolutionary high-performance, long-lastingnematic LCs, which were adopted by Sharp Corporation for use
in the world’s first pocket calculator incorporating an LCD. DIC’s
passion and development prowess are also evident in its pigments
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Large-screen LCD televisions are expected to deliver superbly
realistic and accurate color reproduction. The small LCDs usedin smartphones and other devices must be clear, easy to readand bright enough to ensure legibility even with less light. This isbecause reduced light requirements results in longer battery life.
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transparent, but this alone will not deliver vivid colors and resolution.
With the question of how best to realize both high brightness andvivid colors an ongoing challenge for display manufacturers, DIC has
responded by developing innovative pigments for this application.
Copper has traditionally been the central material used in green
pigments. In developing its green pigments for color filters, DIC
defied conventional wisdom by exploring the use of a different
central material with the goal of further enhancing performance
characteristics. Through a process of trial and error, the Company
narrowed down the list of suitable materials from a wide range of
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transparency by reducing the size of pigment particles, thereby
achieving a dramatic increase in contrast, which ensures a bright,
clear picture quality even with less light. The outcome of these
efforts was the groundbreaking G58 series.

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molecular design capabilities to achieve outstanding tinting strength and precise
particle size control. To develop the AVHULHVRIEOXHSLJPHQWVIRUFRORU¿OWHUVthe Company also employed specialty particle surface processing to ensurehighly stable dispersion, realizing an excellent balance between brightness
and contrast. Products in the A series currently dominate the market for blue
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earn solid marks from smartphone manufacturers.
DIC’s success in developing a steady stream of pioneering functional
pigments is supported by the seamless integration of basic technologies
amassed in various fields as a manufacturer of color materials, the crossbusiness R&D configuration of its Central Research Laboratories andproduction technologies that facilitate the mass production of products withperformance characteristics realized in the laboratory.

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Chemical structure of green pigments in the G59 series, which are particularly
popular among smartphone manufacturers

Naoto Akiyama

Key Person from DIC:HDUHFDSLWDOL]LQJRQWKHVXEVWDQWLDOJURZWKSRWHQWLDORISLJPHQWVIRUFRORUÀOWHUVE\realizing new optical properties.
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and G59 pigments is extremely complex, but with both series it is possible to dramatically transform optical properties simply by
PDNLQJPLQRUDGMXVWPHQWV7KHJURZWKSRWHQWLDORIWKLVEXVLQHVVLVDOOWKHPRUHVLJQL¿FDQWIRUWKLVUHDVRQDQGRXUDELOLW\WRPDNHFRQWLQXRXVLPSURYHPHQWVDQGPRGL¿FDWLRQVPHDQVWKDWWKHVN\UHDOO\LVWKHOLPLWThe evolution of display backlight technology from light-emitting diodes (LEDs) to organic light-emitting diodes (OLEDs) to
QDs (light-emitting semiconductor nanoparticles) is also a key factor underscoring changes in the performance requirements ofpigment customers. At the Central Research Laboratories, dedicated molecular design, analysis, simulation and other technicalgroups promote cross-collaboration with the goal of accelerating all stages of the development of products with new opticalproperties, from planning through to commercialization.

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of pigments, pigment dispersions, resist inks, color filters and LCDs. In developing pigments for color filters,
we gather information on the latest trends from LCD manufacturers, which we apply to the formulation of nextgeneration product strategies.
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have seen a particularly sharp increase in the PRC, which is on the verge of overtaking the Republic of Korea (ROK)
as No. 1 in terms of volume produced. We are making full use of the DIC Group’s global network by working closely
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Keisuke Sakamoto

DIC Report 2018

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We are making full use of the DIC Group’s global network at all stages, from thepromotion of product strategies through to the expansion of sales channels.

Fine Synthesis Technical Group 5, Fine Synthesis Technical Division 1, Central Research Laboratories

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Manager, Pigments Sales Group 2, Pigments Product Division

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Responding to Global Needs by Expanding Production Capacity for Blue Pigments for Color Filters',&DLPVWRERRVWVDOHVRIEOXHSLJPHQWVIRUFRORU¿OWHUVWRWLPHVWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU
In June 2017, DIC announce that it plans to expand the production
capacity for blue pigments for color filters of its Kashima Plant, in,EDUDNL3UHIHFWXUHWRWLPHVWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU
2021. In light of growing demand—underpinned by growth in emerging
economies—and an increase in the volume of pigments used attributable
to the trend toward larger displays, DIC estimates that the global display
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for color filters has risen sharply since launch, reflecting a steadyincrease in the number of customers adopting these pigments for use.
DIC will capitalize on the expansion of its production capacity to boost
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year 2021, to solidify its top share of the global market for blue pigments
IRUFRORU¿OWHUVDVLWKDVGRQHIRULWVJUHHQSLJPHQWVIRUWKLVDSSOLFDWLRQwhich are currently recognized as the de facto standard worldwide.
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Special Feature: Product Development Designed to Create New Value

Polymers
Adhesive Primers for Opticaland Packaging Films

SDGs Goals 9 and 12

Outstanding
Outstanding adhesion
adhesion improves
improvesthethe reliability
reliability ofof LCDs
LCDs and thesafetyfood products
and theofsafetyof food products
Value Creation

Ultrathin (less than 1/10,000 millimeter) waterborne polyurethane resin adhesive primers

DIC’s ultrathin high-performance films are used extensively for optical applications,
including LCDs for televisions, computers and smartphones, and food product packaging
applications, such as retortable pouches and snack food packets. While such films appear
to be a single layer, they actually comprise multiple layers that are laminated together. The
multilayer structure makes it possible to impart critical performance features, includingtransparency, electroconductivity, antireflectivity and brightness in the case of films for
optical applications and heat resistance as well as oxygen-barrier properties and moistureresistance in the case of films for food packaging applications.
Film layers are generally laminated using adhesives. However, in situations where
the surface attributes of polyethylene terephthalate (PET) film discourage adhesion, anadhesive primer (aqueous polyurethane surface modifier; also called an anchor coat or anadhesion promoter) is applied prior to the laminating adhesive. While less than 0.1 micron(1/10,000 millimeter) thick, DIC’s new primers ensure a powerful bond between the PET
film substrate and coating layer, thereby playing a key role in enhancing the properties ofhigh-performance films.

DIC Report 201830

DIC’s HYDRAN resin adhesive primers for films

Special Feature: Product Development Designed to Create New Value

Primers Help Increase LCD Brightness
Backlight

HYDRAN resin adhesive primers increase the
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Polarizing plate
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Adhesive layer
Adhesion-discouraging substrate

LC
panel

Lamp
Diffusion plate
Diffusion sheet

Cross-section

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DIC’s popular HYDRAN resins: Reliable, easy-to-use and environment-friendly
Polyurethane resins are copolymers that boast excellent adhesion to a variety
of substrates. Polymer design can be leveraged to impart various desired
characteristics, facilitating a broad range of applications, including bonding¿EHUV¿OPVDQGPHWDOV:DWHUERUQHSRO\XUHWKDQHUHVLQVLQSDUWLFXODUGHOLYHU
outstanding adhesion, while cross-linking agents can be used to enhancestrength, adhesion and resistance to water, heat and moisture.
DIC has more than 40 years of experience as a manufacturer of polyurethane
resins. One of its best-known products is the HYDRAN series of waterborne
adhesive polyurethane resins, which are rated highly for increasing theadhesion, transparency, abrasion resistance and durability of substrate andcoating materials, and for enhancing the workability—including superb surface
slip, windability and blocking resistance*1—of HYDRANFRDWHG¿OPV
Because they are solvent-free, HYDRAN resins also eliminate concerns
regarding emissions of VOCs, making it an ideal choice from the perspectivesof reducing the negative environmental impact of food packaging and protecting
the safety and health of production workers. In addition, in the production ofaluminum food trays, the use of aluminum vapor deposition* 2 on HYDRANFRDWHG3(7¿OPXVHVVLJQL¿FDQWO\OHVVHQHUJ\WKDQWKHFRQYHQWLRQDOSURFHVVZKLFKLQYROYHVODPLQDWLQJWRJHWKHUOD\HUVRI3(7¿OPDQGDOXPLQXPIRLOZLWKDQ
adhesive, and reduces tray weight.

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substrate, where it condenses.

The PET Film Value Chain

Waterborne primer

PET film
manufacturers

Opticalapplications

Tradingcompanies
handling
components

Display
manufacturers

Foodpackaging
applications

Printing/
laminating

Food
product
manufacturers

DIC Report 201831

A Distinctively
DIC
Response

Maximizing top-class polymer technologies and an extensive global network to establish a strong
brand image and a proven track record as a supplier

Building on its pigment and resin dispersion and formulating technologies
realized through the production of printing inks, DIC is promoting thedevelopment of high-value-added products that leverage its basic and coretechnologies. The former category includes technologies in the area of
optics and color, organic molecular design, polymer design and dispersion
technologies, while the latter includes those in the area of synthesis,
compounding formulation and surface treatment. DIC’s efforts in this area areunderpinned by its ability to integrate technological resources originating across

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characteristics.
DIC’s success in commercializing waterborne polyurethane resin adhesive
primers for optical and food packaging applications is attributable to its
know-how in peripheral areas such as high-performance films, coatings andadhesives. The Company makes use of its vast store of development andproduction know-how to realize distinctively DIC responses to market needs.

A Wealth of Technologies in Areas Peripheral to Primers

Displays

Packaging(VVHQWLDOWRWRGD\¶VGLJLWDOVRFLHW\$QH[SDQGLQJJOREDOPDUNHW

Exterior surface

Film(Film cross-section)

Extensive lineup of products (preservation,high designability, diversity, convenience)

Surface protection

Print substrates/integrated circuit(IC) encapsulation materials

UV-curable resins

Epoxy resins

Packaging inks
Reduces emissions of VOCs andCO2 and improves productivity

Laminating adhesives

Simple structure that imparts oxygen-barrier
properties, reducing weight and cost

TFT LCs

Pigments for color filters(Green/blue)

Technology-rich,high-value-added products

Film (Same as exterior surface)

TFT LCs

Increased brightness reduces energy use by displays

Green pigments for color filters

No. 3 global market share

Leading global market share

Interior surface

Semiconductor cleaning

Hollow-fiber
membrane modules
Dehydration,
impact resistance

Securing of components

Industrial adhesive
tapes, adhesives

Surface protection

Thinness,heat dissipation

Antiscattering
adhesive film
for glass panels

Waterproof
Ultrathindouble-sided adhesive tapeadhesive tape

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global operations. The remaining four are Printing Inks, Fine Chemicals, Compounds
and Application Materials. These four segments overlap with the Polymers segment
not only on the technology front but also because they frequently manufacture andsell products for common applications and operate in the same geographic markets.
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Because primers are intermediate materials, the handling methods and coating
technologies employed in their use impact the quality of finished products.
Accordingly, DIC recognizes the importance of a sales approach that encompasses
consulting on everything from formulation to process management. Here, too, DIC
thus capitalizes on its extensive experience to provide tailored production support,
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has earned the Company a solid reputation for reliability.

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packaging market

DIC Report 201832

Leading
globalmarketshare

Key Person from DIC

Having inherited DIC’s DNA, we are promoting the development of businesses that
respond to social imperatives.
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succeeded in expanding our shares of both markets by promoting the development of formulations and products that comply with the selection
criteria and required performance characteristics of leading customers in each of the countries and territories in which we operate.
$WDOOVWDJHV,¿QGP\VHOILPSUHVVHGE\RXUZHDOWKRIWHFKQRORJLFDODQGKXPDQUHVRXUFHVDVZHOODVE\RXUPHWLFXORXVO\FUDIWHGJOREDO
network, which is attributable to the fact that we were early to turn our attention to overseas markets. Our ability to effectively combine
such assets results in a dynamic force that I liken to a chemical reaction. These assets, amassed over 100 years in business, are thebuilding blocks of DIC’s DNA. They are also the driving force behind our efforts to develop products and global businesses that respondaccurately to rapidly evolving social imperatives.
Manager, Dispersion Sales Group, Polymers Product Division

Kenji Ikeda

Key Person from DIC

We are leveraging synergies between our development capabilities and informationgathering prowess in the rapidly evolving LCD market.
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substrates cured using UV light to impart hard coat properties. DIC’s primers deliver excellent adhesion to a wide variety of89FXUHGUHVLQVDQGGRQRWLPSHGHHLWKHUWKHOHQJWKRIXVDELOLW\DIWHUPL[LQJRUWKHWUDQVSDUHQF\RIWKH¿OPDIWHUFRDWLQJXVHU
friendly features that have earned high marks from customers. I see our development capabilities in this area as representing
the technological depth of departments responsible for producing polyurethane raw materials and for using these materials in
products. The synergies between these capabilities and our information-gathering prowess enables us to provide a broad range
of intermediate materials that anticipate the needs of LCD manufacturers. In the LCD market, models change with astonishingrapidity. To grow our share of this market, we must treat our distinctive development and information-gathering capabilities likethe wheels on a vehicle, synchronizing movement while at the same time increasing speed.
DIC (Shanghai) Co., Ltd.

Sou Kanegae

Key Person from DIC

As the performance of food packaging continues to rise, we continue working tocommunicate the value of DIC’s adhesive primers to an ever-greater number of customers.
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capabilities. For mid-tier mass producers, knowledge regarding primers and production support are critical. Accordingly, with anapproach that focuses on resolving the issues faced by customers uppermost in our minds, which we have dubbed “DIC Special
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and territories across the region to cultivate a greater variety of customers.
Dispersion Sales Group, Polymers Product Division

Daisuke Nagaoka

Key Person from DIC

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manufacturing is completed with drying, stretching and heat treatment. The second category, mainly mid-tier producers, uses the
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recognize that expanding this business depends on increasing sales to manufacturers in the second category. Off-line coating
is challenging from both technological and cost perspectives, so we will need to provide carefully tailored support services.
Nonetheless, securing customers in as-yet untapped areas is the key to the next phase of growth for this business, so teams
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 KHDWWUHDWPHQWLPSURYHV¿OP¶VUHVLVWDQFHWRDPRQJRWKHUVKHDWLPSDFWDQGFKHPLFDOVPolymer Technical Group 2, Polymer Technical Division 2

Kazuhiko Chiyonobu

DIC Report 201833

T

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Consumption of DIC’s HYDRAN Resin Adhesive Primers

PIC

Efforts to accelerate development and supply capabilities in a key growth market proceed
DIC primarily produces HYDRAN resin adhesive primer at the Hokuriku Plant in Japan.

7HFKQLFDO&HQWHU±$VLD3DFL¿F,Q¿VFDO\HDUVWHSVZLOOEHWDNHQWRIXUWKHUSHUIHFWAgainst a backdrop of rising demand in other Asian markets, the Company has sought

production lines and obtain customer evaluations with a view to commencing full-scale

to accelerate the development of products tailored to regional needs and reinforce its

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VXSSO\FRQ¿JXUDWLRQE\HVWDEOLVKLQJWKH3RO\PHU7HFKQLFDO&HQWHU±$VLD3DFL¿FZLWKLQ

primers, in Japan and in Thailand, DIC will take steps to localize sales capabilities,

WKHVLWHRFFXSLHGE\',&*URXSFRPSDQ\6LDP&KHPLFDO,QGXVWU\&R/WG

thereby positioning it better to supply products in a more timely manner, in line with its

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global strategy of promoting local production and consumption.

to complete trial production of the primers using actual equipment at the Polymer
India

Myanmar(Burma)Bayof Bengal

ThailandEast China
Sea

VietnamPhilippines

Gulf of Thailand
Laccadive Sea

Malaysia

Indonesia

Siam Chemical Industry Co., Ltd.
Polymer Technical Center–Asia Paciﬁc

Banda Sea

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needs and to supply products in a timely manner.

Key Person from DIC

We will continue to leverage DIC’s management resources to drive the expansion of
the DIC Group’s operations in Asia.
6LDP&KHPLFDO,QGXVWU\ZDVHVWDEOLVKHGLQPDNLQJLWRQHRIWKHROGHVW-DSDQHVHDI¿OLDWHGFRPSDQLHVin Thailand, and is primarily engaged in the manufacture and sale of synthetic resins for coatings, molding
and industrial applications. Our integrated management of production, sales and technological functions,which enables us to guarantee the same level of quality as DIC in Japan, is our principal competitive
advantage, underpinning steady growth to date. In a move aimed at reinforcing our operating foundation tofurther support sustainable growth and responding to environmental issues in Thailand, we recently started
up newly installed solar panels. In response to environmental needs across Asia, we also plan to invest
decisively to facilitate production of HYDRAN waterborne polyurethane resins. We will continue to leverage',&¶VPDQDJHPHQWUHVRXUFHVWRHIIHFWLYHO\JUDVSUHJLRQDOQHHGVDQGGULYHWKHH[SDQVLRQRIWKH*URXS¶V
operations in Asia.
President, Siam Chemical Industry Co., Ltd.

Sumiko Mochizuki

Key Person from DIC

We are working to respond swiftly to market needs in Southeast Asia.
7KH3RO\PHU7HFKQLFDO&HQWHU±$VLD3DFL¿FZDVHVWDEOLVKHGLQ¿VFDO\HDUZLWKLQWKHVLWHRFFXSLHGE\Siam Chemical Industry with the goal of responding swiftly to changing needs in fast-growing Southeast$VLDQPDUNHWV,Q¿VFDO\HDUZHODXQFKHGDVLPLODUWHDPLQ,QGRQHVLD2XUHIIRUWVIRFXVRQQRWRQO\polyurethane resins but also acrylic resins, polyester and other resins for a broad range of applications. In
addition to hiring experts in various areas to facilitate advanced R&D and the provision of superior technicalservices, specialists in analysis technologies have been posted to the Polymer Technical Center–Asia
3DFL¿FWRZRUNZLWKORFDOWHFKQLFDOVWDII:HDUHFXUUHQWO\FDSLWDOL]LQJRQWKHQHZO\GHYHORSHGHYDRAN resin
adhesive primers, which draws on DIC’s expertise in the area of materials for printing, to provide distinctively
DIC solutions that address local needs.
*HQHUDO0DQDJHU3RO\PHU7HFKQLFDO&HQWHU²$VLD3DFLÀF

Akifumi Yamamoto

DIC Report 201834

TOPIC
Efforts to Reduce Environmental Impact by Using Water-Based Biomass
Ink Made with Plant-Based Packaging Resin
Sun Chemical Promotes Initiatives Aimed at Addressing an Important Social Imperative
Sun Chemical, which oversees the DIC Group’s operations in Europe and the Americas, is one of the world’s leading manufacturersof printing inks. The company develops and supplies a broad range of products that address diverse social imperatives.

Brands today are under a lot of pressure to be environment-friendly. Studies have shownthat consumers want more sustainable packaging and global retailers have made it clearthat they prefer to work with brands that integrate environment-friendly practices in their packaging.
Recognizing these trends, brands are taking dedicated steps to vet and study the environmental practices
implemented by their suppliers and partners. In fact, some brands in the fast/quick food service industry havegone so far as to push forward initiatives that focus on using all-natural packaging.
This has led to a push for greener inks with a higher level of bio-renewable content. A bio-renewable ink can
be derived from tree, plant, insect and/or animal materials, according to the U.S.-based National Association of
Printing Ink Manufacturers (NAPIM). These can include resins, gums, oils, waxes, solvents, and other polymer
building blocks.
Brand owners want these bio-renewable inks to maintain the same quality and performance requirements ofa non-renewable ink, keep to a cost that is competitive with non-renewable inks and comply with the standards
outlined by the brand and a variety of regulations, including California’s Proposition 65 and the European Union’s
Toy Safety Directive, among others.
Social Imperative

Sun Chemical has responded to the industry challenges by rolling out a line of inks that meet environment-friendly,
bio-renewable
and biodegradable standards that the industry, brand owners, retailers and consumers are looking for.
Sun Chemical’s
Response
Formulated with significantly higher levels of bio-renewable resin content compared to other previous market
offerings from Sun Chemical, the new SunVisto ® AquaGreen water-based inks deliver the required critical
performance attributes needed across a range of paper packaging applications.
The inks can be blendable using varnishes and standard water-based pigment
dispersions, and do not compromise end-use or on-press performance. They also offer
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high levels of resistance properties to rub, abrasion, water and grease.
Sun Chemical’s R&D and compliance teams from Europe, North America and SouthAmerica spent a year and a half replacing chemicals with natural products to ultimately
provide an ink solution that was comparable in cost, delivered the required performance
attributes and met all the standards and regulatory compliance requirements.

VOICE Sun Chemical is fulﬁlling its responsibilities toensure sustainable business practices.
Sun Chemical is a recognized leader in compliance and R&D, with a strong commitment tosustainable practices. Those attributes were why a customer in North America approached us
with a project to see if we could create a series of natural bio-renewable inks that would meetthe sustainability needs and standards of major fast/quick food service brands. It was a major
undertaking with a lot of testing and trial runs. It was inspiring to see our team’s determination
to find the right raw materials needed to accomplish the goals and requirements of ourcustomer and global regulations.

DIC Report 201835

Vice President, Marketing

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

| Policy on Corporate Governance
DIC has prepared a Policy on Corporate Governance, which it has published on its corporate website.
Policy on Corporate Governance WEB http://www.dic-global.com/en/about/pdf/governance_en.pdf| Corporate Governance Organization$FRPSDQ\ZLWKLQWHUQDODXGLWRUV',&PDLQWDLQVD%RDUGRI'LUHFWRUVDQGD%RDUGRI&RUSRUDWH$XGLWRUV',&KDVDOVRLQVWLWXWHGDQH[HFXWLYHRI¿FHU
system and has established a Nomination Committee, a Remuneration Committee, an Executive Committee and a Sustainability Committee.

General Meeting of Shareholders

Corporate Governance Organization

Appointment

Audit

Board of Directors
Nomination Committee
Remuneration Committee

Appointment

Accounting
audit

President and CEO

Board of Corporate Auditors

Independent auditors

Sustainability Committee

Executive Committee

Internal Control Department

Product divisions, Marketing Management Unit,
Production Management Unit, Technical Management Unit,
R&D Management Unit, headquarters’ administrative units, sites

Group companies

Internal audit

1

Board of Directors

To accelerate decision making and reinforce corporate governance, nine directors have been elected to the Board of Directors. Of thenine, three are outside directors. In principle, the Board meets once monthly. The Board of Directors is responsible for making decisions on
matters stipulated in the Companies Act of Japan, and in DIC’s own regulations, as requiring Board-level approval, as well as for monitoring
WKHH[HFXWLRQRIEXVLQHVVDFWLYLWLHVDVUHSRUWHGE\WKHH[HFXWLYHRI¿FHUV
2Nomination Committee

The Nomination Committee was established as an internal committee of the Board of Directors with the aim of ensuring objectivity in the
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3

Remuneration Committee

The Remuneration Committee was established as an internal committee of the Board of Directors with the aim of enhancing the objectivityof procedures for determining executives’ remuneration. The committee, which has been entrusted with responsibility for determining the
VDODULHVDQGERQXVHVRIGLUHFWRUVDQGH[HFXWLYHRI¿FHUVPHHWVDVQHFHVVDU\$WSUHVHQWWKUHHRIWKHFRPPLWWHH¶V¿YHPHPEHUVDUHRXWVLGHZKLOHWKHSRVLWLRQRIFRPPLWWHHFKDLUPDQLV¿OOHGE\DQRXWVLGHGLUHFWRUDIC Report 201836

Corporate Governance

4

Executive Committee

The Executive Committee deliberates and resolves issues related to the execution of business activities. In principle, the committee meets
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one corporate auditor as part of the auditing process. Details of deliberations and resolutions are reported to the Board of Directors.
5

Sustainability Committee

The Sustainability Committee, which functions as an advisory body, meets several times annually to formulate sustainability policies and
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Board of Directors. As part of audit activities, one corporate auditor also attends Sustainability Committee meetings. The committee reports
the matters upon which it deliberates and the results of its deliberations to the Board of Directors.
6

Board of Corporate Auditors

The Board of Corporate Auditors comprises four members, including two outside corporate auditors. In principle, the Board of Corporate
Auditors meets once monthly. Board activities include debating and determining auditing policies and auditing plans. Board members also
report on the results of audits conducted, as well as attend important meetings, including those of the Board of Directors, the Executive
Committee and the Sustainability Committee, meet with representative directors on a periodic basis to exchange information and opinions,and collect business reports from directors, executive officers and employees. In addition, DIC has established an Office of Corporate
Auditors, to which it assigns dedicated personnel to assist the corporate auditors in their duties.
DIC’s three outside directors have extensive experience in and knowledge of corporate management, which they are able to leverage in the
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overseen corporate accounting at DIC for many years. Outside auditor Katsunori Takechi provides tax accounting services pursuant to Article
RIWKH&HUWL¿HG3XEOLF7D[$FFRXQWDQW$FWDQGKDVEURDGH[SHULHQFHLQWKH¿HOGRIFRUSRUDWHODZ2XWVLGHDXGLWRU&LQG\<RVKLNR6KLUDWDLV
DQDFDGHPLFH[SHUWLQWKH¿HOGRIDFFRXQWLQJLQYROYHGLQUHVHDUFKDQGHGXFDWLRQLQ¿QDQFLDODFFRXQWLQJDQGFRUSRUDWHPDQDJHPHQW
7

Internal Auditing Department

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

Accounting Auditors

DIC has engaged Deloitte Touche Tohmatsu LLC as its independent auditors. DIC strives to ensure an environment that facilitates theaccurate disclosure of information and fair auditing. The corporate auditors, accounting auditors and the internal auditing department
conduct audits from their respective independent positions, but also liaise periodically to facilitate close cooperation, thereby ensuring theeffectiveness of auditing activities.

| 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
business execution and clarifying responsibilities. As well as appointing three highly independent outside individuals to its Board of Directors,
the Company has taken steps to reinforce its monitoring of business execution. DIC also has a Nomination Committee and a Remuneration
Committee, which include the three outside directors, to ensure objectivity in the nomination of, and in determining remuneration for, directors
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corporate auditors, liaises with the accounting auditors and the internal auditing department. This structure ensures the effective functioningof DIC’s corporate governance system.

DIC Report 201837

Corporate Governance| System of Internal Controls
1

Status of the System of Internal Controls

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To this end, DIC has prepared and operates a system of internal controls, key components of which are summarized below, to ensure
proper business activities, based upon the Companies Act of Japan and the Financial Instruments and Exchange Act of Japan. The Boardof Directors hears annual reports on measures on the status of the system of internal controls, a summary of which is included in the
Company’s report on its business activities.
❶ The Company shall work to set forth the DIC Group Code of Business Conduct as the standard regarding compliance, which directors
and employees of the DIC Group shall comply with, and to disseminate the same.
❷ The Company shall establish an internal notification system as a channel available for the employees of the DIC Group and set up
multiple notification channels independent from channels for communication used in the conduct of business. DIC shall prepare a
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❸ ,QRUGHUWRHQVXUHDV\VWHPLQZKLFKWKHGXWLHVRIGLUHFWRUVDUHSHUIRUPHGSURSHUO\DQGHI¿FLHQWO\ZLWKLQWKH',&*URXSWKH&RPSDQ\shall establish regulations regarding company organization and authority.
❹ The Company shall formulate medium-term management plans and the annual budget based upon management policies andmanagement strategies, and, through dissemination of the same, the DIC Group shares common goals. Reports shall be made to theBoard of Directors outlining the status of the progress.
❺ Information pertaining to the performance of duties by directors shall be recorded, retained and managed appropriately based upon
the regulations for document management. The Company shall establish regulations for systems of information management and shall
SUHSDUHDV\VWHPIRUSUHYHQWLQJOHDNDJHRIFRQ¿GHQWLDOLQIRUPDWLRQRIWKH',&*URXS❻ The Company shall formulate a risk management policy and shall identify, assess, prioritize and address properly any risks that may
KDYHDVLJQL¿FDQWLPSDFWRQPDQDJHPHQWRIWKH',&*URXS❼ The Company shall determine an administrative department for each subsidiary from the standpoints of the conduct of business andbusiness management, and shall supervise business affairs by dispatching a director to each subsidiary.
❽ The Company shall clarify important matters pertaining to subsidiaries that require approval of or reporting to the Company.
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\
to acquiesce to demands presented by such elements. The General Affairs and HR Department is responsible for coordinating efforts to
respond to extortion or other demand presented by antisocial elements, while individuals have been put in charge of efforts at each site andwithin each Group company. These individuals work in close collaboration with lawyers and the police to ensure the Company’s responses
are resolute. DIC has also prepared and distributed a manual on appropriate responses to such demands, with the aim of raising awarenessamong employees.

| Outside Directors and Outside Corporate Auditors
1

Number and Role of Outside Directors and Outside Corporate Auditors

DIC currently has three outside directors and two outside corporate auditors. In addition to attending meetings of the Board of Directors, theoutside directors serve as members of the Nomination Committee and the Remuneration Committee, enabling them to provide supervision
with an independent point of view, thereby helping to reinforce DIC’s corporate governance. The two outside auditors—one an attorney
VSHFLDOL]LQJLQFRUSRUDWHODZDQGWKHRWKHUDQDFDGHPLFH[SHUWLQWKH¿HOGRIDFFRXQWLQJZKRVHVSHFLDOWLHVDUH¿QDQFLDODFFRXQWLQJDQG
corporate management—advise management of the DIC Group from an expert, multifaceted and independent perspective, thereby helping
to reinforce the auditing function.
2Standards Used to Evaluate the Independence of Outside Directors and Outside Corporate Auditors

DIC has established standards for evaluating the independence of individuals appointed to the position of outside director or outside corporate
DXGLWRU',&¶VRXWVLGHGLUHFWRUVDQGRXWVLGHFRUSRUDWHDXGLWRUVDUHLQGLYLGXDOVZKREDVHGRQWKHVHVWDQGDUGVDUHXQOLNHO\WRKDYHFRQÀLFWVRI
interests with ordinary shareholders and who comply with criteria for the independence of directors/auditors set by the Tokyo Stock Exchange.

DIC Report 201838

Corporate Governance,QGHSHQGHQFH6WDQGDUGVIRU2XWVLGH2IÀFHUV
',&GRHVQRWUHFRJQL]HLQGLYLGXDOVZLWKWKHFRQQHFWLRQVOLVWHGEHORZDVEHLQJLQGHSHQGHQWLQWKHDSSRLQWPHQWRIRXWVLGHRI¿FHUV,QGLYLGXDOVZKRDUHH[HFXWLYHRI¿FHUVRI',&RURIRQHRILWVFRQVROLGDWHGVXEVLGLDULHVDWSUHVHQWRUKDYHEHHQLQWKHSUHFHGLQJ\HDUV
2. Individuals to whom any of the following items have applied in the preceding three years:❶ $SULQFLSDOEXVLQHVVSDUWQHURIWKH',&*URXS DEXVLQHVVSDUWQHUZLWKZKLFKWUDQVDFWLRQVLQDVLQJOH¿VFDO\HDUH[FHHGRI
WKH',&*URXS¶VFRQVROLGDWHGQHWVDOHVLQWKDW\HDU RUDQH[HFXWLYHRI¿FHURIDFRPSDQ\WRZKLFKWKLVGHVFULSWLRQDSSOLHV
❷ An individual for which the DIC Group is a principal business partner (a company with which the DIC Group’s transactions in aVLQJOH¿VFDO\HDUH[FHHGRIWKHFRPSDQ\¶VFRQVROLGDWHGQHWVDOHVLQWKDW\HDU RUDQH[HFXWLYHRI¿FHURIDFRPSDQ\WR
which this description applies❸ $VKDUHKROGHUZKRKROGVRUPRUHRIYRWLQJULJKWVLQ',&RUDQH[HFXWLYHRI¿FHURIDFRPSDQ\WRZKLFKWKLVGHVFULSWLRQDSSOLHV❹ $SULQFLSDOOHQGHUWRWKH',&*URXS DOHQGHUIURPZKLFKORDQVLQDVLQJOH¿VFDO\HDUH[FHHGVRIWKH',&*URXS¶VWRWDOORDQVLQWKDW\HDU RUDQH[HFXWLYHRI¿FHURIDFRPSDQ\WRZKLFKWKLVGHVFULSWLRQDSSOLHV❺ $QLQGLYLGXDOZKRKDVUHFHLYHGFRQWULEXWLRQVLQDVLQJOH¿VFDO\HDUWKDWH[FHHGVPLOOLRQRUEHORQJVWRDJURXSWRZKLFKWKLV
description applies❻ An accounting auditor, an accountant who has served as an accounting auditor for the DIC Group or an individual who isDQHPSOR\HHSDUWQHURUDVVRFLDWHRIDQDXGLW¿UPWRZKLFKWKLVGHVFULSWLRQDSSOLHV❼ An individual to whom ❻ DERYHGRHVQRWDSSO\EXWZKRKDVUHFHLYHGUHPXQHUDWLRQIURPWKH',&*URXSLQH[FHVVRIPLOOLRQ
in a single fiscal year as a provider or professional services, such as consulting, accounting or legal services, or anLQGLYLGXDOZKREHORQJVWRDJURXSWKDWKDVUHFHLYHGUHPXQHUDWLRQLQH[FHVVRIRILWVFRQVROLGDWHGQHWVDOHVLQWKDW\HDU
as compensation for professional services, such as consulting, accounting or legal services❽ A corporate executive of another company in the event that an executive officer of DIC is appointed to an outside officer
position at that company
$VSRXVHRUUHODWLYHZLWKLQWZRGHJUHHVRINLQVKLSRILQGLYLGXDOVOLVWHGLQVHFWLRQRUDERYH
$QLQGLYLGXDOZKRVHWHUPLQRI¿FHDVDQRXWVLGHRI¿FHURI',&KDVH[FHHGHGHLJKW\HDUV
3

Framework for Supporting the Efforts of Outside Directors and Outside Corporate Auditors

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

| Other Initiatives to Enhance the Corporate Governance Organization
1

Composition of the Board of Directors

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

Composition of the Board of Directors

38.5%
61.5%

Composition of the Board of Directors and the Board of Corporate Auditors
In-house

Outside

Total

Percentage of outside
members

Directors

6

3

9

33.3%

Corporate auditors

2

2

4

50.0%

Total

8

5

13

38.5%

DIC Report 201839

Directors of DIC

Outside directors

Corporate Governance2

Remuneration for Executives

Remuneration for directors is determined by the Remuneration Committee, which takes into account prevailing market rates, and consistsof basic remuneration; bonuses, which are linked to consolidated operating results and the degree of achievement of individual targets; andVWRFNFRPSHQVDWLRQZKLFKLVEDVHGRQPHGLXPWRORQJWHUPRSHUDWLQJUHVXOWV'LUHFWRUVZKRVHUYHFRQFXUUHQWO\DVH[HFXWLYHRI¿FHUVDUH
eligible for bonuses and stock compensation. Other directors and outside directors are eligible for basic remuneration only. Remuneration forcorporate auditors consists of basic remuneration only and is determined through discussion involving all corporate auditors, in accordancewith internal rules established by the Board of Corporate Auditors, with consideration given to ensuring a balance with remuneration for
directors and to prevailing market rates.
Remuneration for Directors and Corporate Auditors in Fiscal Year 2017
Total remuneration
0LOOLRQVRI\HQ

Composition of remuneration
0LOOLRQVRI\HQ
Basic salary

Bonus

Stock
Compensation

Number of directors and corporate auditors

Directors(excluding outside directors)

322

209

65

48

６

Corporate auditors(excluding outside corporate auditors)

59

59

―

―

２

2XWVLGHRI¿FHUV

57

57

―

―

5

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3

Evaluation of the Board of Directors’ Effectiveness

DIC conducts an analysis and evaluation of the effectiveness of the Board of Directors annually via a self-evaluation conducted by the
GLUHFWRUVDQGFRUSRUDWHDXGLWRUV,Q¿VFDO\HDUWKH&RPSDQ\FRQGXFWHGDVXUYH\RIDOOGLUHFWRUVDQGFRUSRUDWHDXGLWRUVUHJDUGLQJ
among others, self-evaluation and Board administration, responses to which were analyzed and evaluated by the Board of Directors. As a
UHVXOWWKHHIIHFWLYHQHVVRIWKH%RDUGRI'LUHFWRUVZDVFRQ¿UPHGDIC recognizes enhancing debate regarding the direction of corporate strategies and promoting deeper deliberations in the Nomination
Committee and Remuneration Committee, among others, as key challenges and will continue working to promote improvements.

DIC Report 201840

Directors, Corporate Auditors and Executive Officers(As of May 2018)| Directors

5 Director

7

Yoshiyuki Nakanishi Masayuki Saito

Hideo Ishii

Yukako Uchinaga

2 President and CEO

4

6 Director

8

Kaoru Ino

Yoshihisa Kawamura Toshifumi Tamaki

1

Chairman of the Board of Directors

3

Representative Director

Director

Director*

Director*

9

Director*

Yoshiaki Tamura

8

6

5

7

9

* Outside

Kazuo Tsukahara

3

1

2

4

| Corporate Auditors
1

Corporate Auditor

Jiro Mizutani2

Corporate Auditor

Yoshiyuki Mase
3

Corporate Auditor*

Katsunori Takechi
4Corporate Auditor*

Cindy Yoshiko Shirata* Outside3

1| 2XWVLGH&RUSRUDWH$XGLWRU3URÀOHV

| 2XWVLGH'LUHFWRU3URÀOHV
Yukako Uchinaga

Yoshiaki Tamura

Katsunori Takechi

April
2004 Director and Senior Executive Officer, IBM Japan, Ltd.
October 2009 Director and Executive Vice President, Benesse Holdings, Inc.
April
2013 Honorary Chairman, Berlitz Corporation

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.

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

Kazuo Tsukahara

Cindy Yoshiko Shirata

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

April
2002 Professor, Nihon University College of Economics
February 2010 Visiting Professor, University of Munich
October 2014 Professor, Faculty of Business Administration, Bunkyo University

DIC Report 2018

41

2

4

| ([HFXWLYH2IÀFHUV

President and CEO

Executive Vice PresidentManaging Executive Officer

Managing Executive Officer

Kaoru Ino

Masayuki Saito

Toshio Hasumi

Kazunari Sakai

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

President, Polymers Business Unit
General Manager, Polymers Product Div.

Technical Segment (Technical Management Unit
and R&D Management Unit)
General Manager, Technical Management UnitManaging Executive Officer

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Hideo Ishii

Masami Hatao

Toshifumi Tamaki

Naoyoshi Furuta

President, Printing Inks Business Unit
General Manager, Printing Inks Product Div.
and Printing Inks Production Div.

General Manager, Marketing Management Unit

Head of Corporate Strategy Unit
In charge of Kawamura Memorial DIC Museum of Art
Chairman, DIC (China) Co., Ltd.

General Manager, Production Management UnitManaging Executive Officer

Managing Executive Officer

Executive Officer

Executive Officer

Masaya Nakafuji

Kazuo Hatakenaka

Rudi Lenz

Koji Tanigami

Head of General Affairs and Legal Unitand ESG Unit
Diversity

President, Fine Chemicals Business Unit
General Manager, Liquid Crystal Materials
Product Div.

President and CEO,Sun Chemical Corporation

President and CEO, DIC Graphics Corporation
Deputy General Manager, Printing Inks Product Div.

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Shinsuke Toshima

Taihei Mukose

Kiyotaka Kawashima

Masanobu Mizukoshi

President, Application Materials Business Unit
General Manager, Application Materials Product Div.

Head of Purchasing and Logistics & Information
Systems Unit

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

President, Compounds Business Unit
General Manager, Liquid Compounds Product Div.
and Solid Compounds Product Div.

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Hiroyuki Ninomiya

Paul Koek

Myron Petruch

Takeshi Asai

Head of Finance and Accounting UnitManaging Director, DIC Asia Pacific Pte Ltd

General Manager, Pigments Product Div.
President, Performance Pigments,
Sun Chemical Corporation

General Manager, Corporate Planning Dept.
Osaka Branch and Nagoya Branch

DIC Report 201842

Overview of Materiality and Sustainability
Amid rising environmental concerns, including climate change, and increasingly urgent social imperatives, companies today face an ever-morediverse array of challenges. In line with its basic sustainability policy, the DIC Group promotes a variety of sustainability initiatives worldwide andworks to maintain an accurate grasp of social imperatives pertaining to ESG-related issues.

Sustainability Report
Amid rising environmental concerns, including climate change, and increasingly urgent social imperatives, companies today face an ever-more diverse
array of challenges, including rising awareness of the need to achieve sustainability in a manner that takes into account the environment, ecosystems and
VRFLRHFRQRPLFLVVXHV7KH',&*URXSODXQFKHGLWVFRUSRUDWHVRFLDOUHVSRQVLELOLW\ &65 SURJUDPLQ¿VFDO\HDU+DYLQJIXUWKHUFODUL¿HGWKHRYHUDOOGLUHFWLRQRIUHODWHGLQLWLDWLYHVDV³VXVWDLQDEOHJURZWK´HIIHFWLYHIURP¿VFDO\HDUWKH*URXSFKDQJHGWKHGHVLJQDWLRQXVHGDFURVVLWVSURJUDPIURP³&65´to “sustainability.” In line with its basic sustainability policy, the DIC Group promotes a variety of sustainability initiatives worldwide and works to maintain an
accurate grasp of social imperatives pertaining to ESG-related issues.

Basic Sustainability Policy )RUPXODWHGLQ-DQXDU\
7KH',&*URXSLVGHGLFDWHGWRFRQGXFWLQJLWVEXVLQHVVZKLOHUHWDLQLQJDVWURQJFRPPLWPHQWWR¿YHNH\FRQFHSWVSUHVHUYLQJVDIHW\DQGKHDOWK
ensuring fair business practices and respect for diversity and human rights, maintaining harmony with the environment and advancing its
protection, managing risks, and creating value for society through innovation. DIC Group employees will continue working to deliver the value thatits stakeholders—including its customers, suppliers, local communities, shareholders and investors, and employees—expect, showing ingenuity
DQGDVHQVHRIUHVSRQVLELOLW\7KH*URXSLWVHOIZLOOVWULYHWRUHPDLQDQRUJDQL]DWLRQWKDWFRQWULEXWHVWRVXVWDLQDELOLW\IRUVRFLHW\DQGWKHJOREDOHQYLURQPHQWE\FDSLWDOL]LQJRQLWVEXVLQHVVHVWRDFKLHYHXQIDOWHULQJJURZWKWKHUHE\HQKDQFLQJLWVRZQVXVWDLQDELOLW\| Sustainability Framework and Themes
Themes7RIRVWHUFRQFUHWHPHDVXUHLQ¿VFDO\HDUWKH',&*URXS¶VLGHQWL¿HGNH\WKHPHVDVDIUDPHZRUNIRULPSOHPHQWLQJLWV&65IUDPHZRUN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)Core and category-specific themes
Themes that combine
elements of (A) and (B)

(

)

Basic
themes (B)Business models that respond to social imperatives
New technology development and value creation
Harmony with the community and social contributions
Communication with stakeholders

P128
P130
P134
P137

Environment, safety and health
Quality
Human resources management
Sustainable procurement

P60
P109
P112
P125

Compliance
Risk management
Information security

P48
P50
P58

Deployment,QOLQHZLWKLWVEDVLFVXVWDLQDELOLW\SROLF\WKH',&*URXSKDVIRUPXODWHGPHGLXPWHUP ¿VFDO\HDUV± SROLFLHVDQGFUHDWHVDQQXDODFWLYLW\SODQVIRUHDFKRIWKHVHWKHPHV7KH*URXSPDNHVXVHRIWKHSODQ±GR±FKHFN±DFW 3'&$ F\FOHLQSURPRWLQJLQLWLDWLYHVDQGUHSRUWVRQ
its achievements annually in the DIC Report. The Marketing Management Unit and individual product and other divisions, sites and overseas
and domestic DIC Group companies are charged with pursuing effective sustainability programs by formulating their own activity plans,
HQVXULQJWKDWWKH*URXS¶VSROLFLHVSHUPHDWHWKHLURUJDQL]DWLRQVDQGODERUIRUFHVDQGOLQNLQJVXVWDLQDELOLW\LQLWLDWLYHVWREXVLQHVVWDUJHWVDIC Report 201843

| System for Promoting Sustainability Initiatives

Members of the Sustainability Committee

7KH ',& *URXS¶V V\VWHP IRU SURPRWLQJ VXVWDLQDELOLW\ LQLWLDWLYHV
centers on the Sustainability Committee, which answers directly tothe president and CEO. The committee is tasked with reporting on
the status of sustainability themes, as well as with proposing policies
and programs for advancing sustainability and deliberating on critical
related matters.

([HFXWLYHYLFHSUHVLGHQW([HFXWLYHRI¿FHULQFKDUJHRIWKH)LQDQFHDQG$FFRXQWLQJ
Unit, Executive officer in charge of the Corporate Strategy Division, Executive
RI¿FHULQFKDUJHRIWKH*HQHUDO$IIDLUVDQG/HJDO8QLW*HQHUDOPDQDJHUVRIWKH
business units, General Manager of the Marketing Management Unit, General
0DQDJHURIWKH3URGXFWLRQ0DQDJHPHQW8QLW*HQHUDO0DQDJHURIWKH7HFKQLFDO
0DQDJHPHQW8QLW([HFXWLYHRI¿FHULQFKDUJHRIWKH3XUFKDVLQJDQG/RJLVWLFV ,QIRUPDWLRQ6\VWHPV8QLW&(2VRIUHJLRQDOKHDGTXDUWHUV&RUSRUDWHDXGLWRUVżFormulates Groupwide targets and activity plansżDeliberates medium-term policiesżEvaluates sustainability initiatives

Sustainability Committee
Departments/
divisions in charge

Board of Directors$VRI0D\

President and CEO

Sustainability
Working Group

Marketing Management Unit, product divisions,
Production Management Unit, Technical Management Unit,
R&D Management Unit, headquarters’ administrative units,sites, domestic and overseas Group companies

Sustainability
Department

Sustainability themesżFormulates practical activity plansżPromotes sustainability themesżPromotes sustainability(coordinates and supports initiatives)
ż$GYDQFHVDZDUHQHVVRIVXVWDLQDELOLW\żServes as secretariat to the Sustainability CommitteeżServes as secretariat to the Sustainability Working Group| Ensuring DIC Remains a Globally Trusted Corporate Citizen with a Proud Reputation
Leveraging its Position as a Global Manufacturer of Fine Chemicals to Support the UNGC
6HHNLQJWRIXO¿OOLWVUHVSRQVLELOLWLHVDVDPHPEHURIWKHLQWHUQDWLRQDOFRPPXQLW\LQDPRUHSURDFWLYHPDQQHULQ'HFHPEHU
WKH',&*URXSSOHGJHGLWVVXSSRUWIRUWKHSULQFLSOHVSXWIRUWKE\WKH8QLWHG1DWLRQV 81 DQGEHFDPHDVLJQDWRU\WR
WKH8QLWHG1DWLRQV*OREDO&RPSDFW 81*& ,QDXJXUDWHGLQWKH81*&LVDYROXQWDU\LQLWLDWLYHIRUFRPSDQLHVWKDWVHHNWRDFKLHYHJOREDOVXVWDLQDEOH
GHYHORSPHQW&RPSDQLHVDQGRUJDQL]DWLRQVZRUOGZLGHKDYHSOHGJHGWKHLUVXSSRUWIRUWKH81*&LQWKHEHOLHIWKDWJOREDOVXVWDLQDEOHGHYHORSPHQWLVSRVVLEOHLIFRPSDQLHVDOLJQWKHLUEXVLQHVVSUDFWLFHVZLWKDQGIXO¿OOWKHLUVRFLDOUHVSRQVLELOLWLHVLQ
JOREDOO\DFFHSWHGSULQFLSOHVLQWKHDUHDVRIKXPDQULJKWVODERUWKHHQYLURQPHQWDQGWKHSUHYHQWLRQRIFRUUXSWLRQ

Applying the 10 Principles of the UNGC
The DIC Group Code of Business Conduct conforms with
WKHSULQFLSOHVRIWKH81*&7KH*URXSLVFDSLWDOL]LQJRQ
its participation in this program to advance its operations
around the world, while at the same time giving evergreater consideration to the environment and human rights,
with the aim of ensuring sustainability for global society.

3ULQFLSOHVRIWKH81*& 2IÀFLDO9HUVLRQHuman rights

Labour3ULQFLSOH

Businesses should support and respect the protection ofinternationally proclaimed human rights; and3ULQFLSOH

make sure that they are not complicit in human rights abuses.

3ULQFLSOH

Businesses should uphold the freedom of association and effective
recognition of the right to collective bargaining;

3ULQFLSOH

the elimination of all forms of forced and compulsory labour;

3ULQFLSOH

the effective abolition of child labour; and3ULQFLSOH
3ULQFLSOH

Environment

3ULQFLSOH
3ULQFLSOH

Anti-corruption

3ULQFLSOHthe elimination of discrimination in respect of
employment and occupation.
Businesses should support a precautionary approach toenvironmental challenges;
undertake initiatives to promote greater environmental
responsibility; andencourage the development and diffusion ofenvironmentally-friendly technologies.
Businesses should work against corruption in all its forms,
including extortion and bribery.

Complying with ISO 26000
7KH',&*URXSRSHUDWHVLQDPDQQHUWKDWLVFRQVLVWHQWZLWK,62UHOHDVHGLQ1RYHPEHUZKLFKSURYLGHVEXVLQHVVHVDQG
RUJDQL]DWLRQVJXLGHOLQHVIRURSHUDWLQJLQDVRFLDOO\UHVSRQVLEOHPDQQHUDIC Report 2018

44

The 2030 Agenda for Sustainable Development$WWKH816XVWDLQDEOH'HYHORSPHQW6XPPLWLQ6HSWHPEHUDSURSRVDOWLWOHG³7UDQVIRUPLQJRXUZRUOGWKH$JHQGDIRU
6XVWDLQDEOH'HYHORSPHQW´ODWHUVXPPDUL]HGDVWKH6XVWDLQDEOH'HYHORSPHQW*RDOV 6'*V ZDVDGRSWHGZLWKWKHSDUWLFLSDWLRQRI
PRUHWKDQ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

1RWH7KHVH6'*LFRQVDUHXVHGLQWKLVUHSRUW SDJHV±DQG± WRLGHQWLI\SHUWLQHQW',&LQLWLDWLYHVWEB http://www.un.org/sustainabledevelopment/sustainable-development-goals/
For more information on the 6'*VSOHDVHVHH

DIC Report 201845

Materiality Analysis
7KH',&*URXSKDVDEVWUDFWHGDQGDQDO\]HGPDWHULDOLVVXHV
that is, issues with the potential to affect its performance,
DQGKDVLGHQWL¿HGWKRVHRISDUWLFXODUVLJQL¿FDQFHZKLFKLWLV
WDNLQJVWHSVWRHIIHFWLYHO\DQGHI¿FLHQWO\DGGUHVV*XLGHGE\
LWV',&PHGLXPWHUPPDQDJHPHQWSODQDQGE\LWVORQJ
term growth scenario, the Group will continue working to
HQVXUHWKDWWKHVHHIIRUWVDUHEHQH¿FLDOWRWKHPDQDJHPHQWRI
its businesses.

Key DIC Group Materiality Issues
3URPRWLRQRISURGXFWVDQGVHUYLFHVWKDWFRQWULEXWHWRHQYLURQPHQWDOSURWHFWLRQ&RQWULEXWLRQWRWKHUHDOL]DWLRQRIDORZFDUERQVRFLHW\
Contribution to colorful and comfortable lifestyles

3URYLVLRQRIVROXWLRQV
Innovation through compounding
Efforts to strengthen global technology development capabilities
Creation of next-generation businesses
3URPRWLRQRIRSHQLQQRYDWLRQMateriality Analysis Process1

Abstraction of Issues+DUPRQ\ZLWKDQGFRQWULEXWLRQWRVRFLHW\',&DEVWUDFWHGLVVXHVRISDUWLFXODUVLJQLILFDQFHWRWKH*URXSEDVHGRQWKH*5,¶V*6XVWDLQDELOLW\5HSRUWLQJ*XLGHOLQHV LWVRZQVXVWDLQDELOLW\WKHPHVDQGLVVXHVGHOLQHDWHGLQ',&RU7KH',&
WAY or added by Sustainability Committee members. The Group has
GLYLGHGWKHVHLVVXHVLQWRWKUHHJURXSLQJV(QYLURQPHQWDO ( VRFLDO(S) and governance (including economic issues) (G), which it has
FRPELQHGLQWRJHQHUDOPDWHULDOLW\LVVXHVEnhancement of brand strength/reputation (evaluation)

3UDFWLFDODSSOLFDWLRQRIPHDVXUHVWRUHGXFHHQYLURQPHQWDOLPSDFW&RQWULEXWLRQWRWKHUHDOL]DWLRQRIDORZFDUERQVRFLHW\
3URPRWLRQRIRFFXSDWLRQDOKHDOWKDQGVDIHW\,PSURYHPHQWRITXDOLW\PDQDJHPHQWFDSDELOLWLHV

*OREDOJXLGHOLQHVIRUVXVWDLQDELOLW\UHSRUWLQJSXEOLVKHGE\WKH*5,
DOHDGLQJLQWHUQDWLRQDOVWDQGDUGVRUJDQL]DWLRQ

2Ability to foster and strengthen global human resources
テーマ
3URPRWLRQRIGLYHUVLW\
Efforts to address needs engendered by an aging society and falling birth rates

Materiality Analysis

Sustainability Committee members, heads of departmentsthat spearhead the implementation of initiatives related tosustainability themes, and senior management from DIC Group
companies in the United States, Asia and elsewhere assessed
abstracted issues from the twin perspectives of importance to
DIC Group businesses and importance to stakeholders. Basedon the results of this process, and having comprehensively
UHYLHZHGLVVXHVLGHQWL¿HGE\H[WHUQDODVVHVVPHQWRUJDQL]DWLRQVthe Company determined materiality to the DIC Group.
(a) Material importance to DIC Group businesses
DIC assessed issues with the potential to have an impact on
the DIC Group, giving consideration to both potential risks
and business opportunities.

Respect for human rights
3URPRWLRQRIVXSSO\FKDLQPDQDJHPHQW

5HVSRQVHWRHFRQRPLFJOREDOL]DWLRQHIIRUWVWRUHLQIRUFHJRYHUQDQFHThe DIC Group’s Materiality Matrix
Very
high

● Practical application of measures
to reduce environmental impactof a low-carbon society● Promotion of products and services that ◆ Response to economic globalization/
efforts to reinforce governancecontribute to environmental protection■ Promotion of occupational health ◆ Promotion of supply chain
management
and safety◆ Innovation through compounding ◆ Creation of next-generation
businesses● Contribution to the realization

Importance to stakeholders(b) Material importance to stakeholders(i) 7KH',&*URXSUHFRJQL]HV¿YHNH\VWDNHKROGHUJURXSV
(customers, suppliers, local communities and society,employees and investors). Assessments looked at level ofinterest on the part of stakeholders and potential impact.
(ii) To reinforce the role of objective external criteria,materiality issues identified by the DIC Group were
DQDO\]HG E\ NH\ LQGHSHQGHQW (6* LQYHVWPHQW
assessment programs, namely, the Dow Jones
Sustainability Indices (DJSI), FTSE, MCSI, theSustainability Accounting Standards Board (SASB) of theUnited States and Sustainalytics.

テーマ

Response to the growth of digital businesses■ Respect for human rights■ Promotion of diversity■ Harmony with andcontribution to society■ Enhancement of brand strength/

reputation (evaluation)■ Contribution to colorful andcomfortable lifestyles◆ Provision of solutions◆ Promotion of open innovation■ Ability to foster and strengthen

global human resources◆ Improvement of quality

management capabilities◆ Efforts to reinforce marketing◆ Efforts to strengthen global technology

development capabilities■ Efforts to address needs

engendered by an aging
society and falling birth rates◆ Response to the growth of◆ Efforts to increase productivity

digital businesses

High
High
Importance to DIC Group businesses

DIC Report 2018

46

Very
high

Themes

DIC Sustainability Themes

5HOHYDQW816XVWDLQDEOH'HYHORSPHQW*RDO 6'* ,FRQVBusiness models that respond tosocial imperatives.........................................P128

Themes that
demonstrate unique
FDSDELOLWLHV $SDGs

Goals 8, 9 and 11

SDGs

Goals 9 and 12

SDGs

Goals 3 and 4

SDGs

Goals 3, 6, 7, 12, 13, 14 and 15

SDGs

Goals 3, 4, 5, 8 and 10

SDGs

Goal 12

SDGs

Goal 16

New technology development andvalue creation ................................................P130

Harmony with the community andsocial contributions .....................................P134
Communication with stakeholders ............P137

Environment, safety and health ................... P60

Core andFDWHJRU\VSHFLÀFthemes(Themes that combine
HOHPHQWVRI $ DQG %Quality ........................................................... P109
Human resources management ..................P112

Sustainable procurement ............................P125%DVLFWKHPHV %Compliance..................................................... P48
Risk management .......................................... P50
Information security ...................................... P58

DIC Report 201847

Core and CategorySpecific Themes

Basic Themes

Themes that Demonstrate
Unique Capabilities

Compliance
SDGs Goal 16

Towards Fair and Transparent Corporate Activities
Goals and Achievements of Major Initiatives (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ ([FHOOHQW★★ 6DWLVIDFWRU\★ = Still needs work
Objective of initiatives

Goals for fiscal year 2017

Achievements in fiscal year 2017

Evaluation

Goals for fiscal year 2018

Enhance awareness ofcompliance.

Achieve target for percentage of employees • Participation in e-learning aimed at eliminating
participating in the e-learning program (90%). bribery and corruption reached 91%.
• Steps were taken to respond promptly to
Encourage use of the whistle-blowing
reports received via the whistle-blowing
system to promptly identify and correct
hotline. No reports of significant violations
compliance violations.
were received.

★★

• Achieve target for percentage of employees
participating in the e-learning program(95%).
• Implement compliance- and governancerelated legal training in Japan, the Asia–
Pacific region and Greater China.

Conduct business fairly.

Continue working to eliminate violationsof antitrust and anticorruption laws.

Succeeded in eliminating violationsof antitrust and anticorruption laws.

★★

Eliminate violations of antitrust andanticorruption laws.

Basic Approach to Compliance&RPSOLDQFHLQWKH',&*URXSHQFRPSDVVHVQRWRQO\REH\LQJODZVEXWDOVRDFWLQJLQDPDQQHUWKDWLVLQNHHSLQJZLWKVRFLDOQRUPVDQGWKHH[SHFWDWLRQVRIFXVWRPHUVFRPPXQLWLHVDQG
RWKHUVWDNHKROGHUV:LWKWKHDLPRIHQVXULQJVXVWDLQDEOHJURZWKIRUEXVLQHVVHVWKDWDUHERWKIDLUDQGWUDQVSDUHQW',&IRUPXODWHGWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWDXQL¿HGVHWRI
guidelines the adherence to which it considers to be the foundation of compliance. DIC compels all DIC Group employees to conduct themselves in accordance with the code.

| The DIC Group Code of Business Conduct
7KH',&*URXSFRPSOHWHGWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWLQ-XO\7KHFRGHQRWRQO\PDQGDWHVFRPSOLDQFHZLWKQDWLRQDO
laws and international rules but also presents 10 principles essential to the professional conduct of DIC Group employees. The DIC Group&RGHRI%XVLQHVV&RQGXFWKDVVLQFHEHHQWUDQVODWHGLQWRGLIIHUHQWODQJXDJHVWRHQVXUHWKDW',&*URXSHPSOR\HHVZRUOGZLGHVKDUHWKH
Group’s values and commit themselves to doing what is right, as well as to acting with common sense and an understanding of individual
responsibilities, in all aspects of their work.
DIC Group Code of Business Conduct WEB http://www.dic-global.com/en/csr/pdf/code_of_business_conduct_en.pdf

10 Principles Essential to Professional Conduct❶ <RXU5LJKWVDVDQ(PSOR\HH5HVSHFW'LJQLW\3ULYDF\❻ <RXU5HODWLRQVKLSZLWK&XVWRPHUV6XSSOLHUVDQG([WHUQDO7KLUG3DUWLHV❷ Environment, Safety and Health❼ Money Laundering and Anti-Terrorism❸ <RXU5HVSRQVLELOLW\WR$YRLG3RWHQWLDO&RQÀLFWVRI,QWHUHVWDQGWR3URWHFW*URXS3URSHUW\❽ )RUFHG/DERU&KLOG/DERU&RQÀLFW0LQHUDOV❹ Anti-Corruption and Anti-Bribery Policy❾ Insider Trading❺ <RXU5HODWLRQVKLSZLWK*RYHUQPHQWVDQG*RYHUQPHQW2I¿FLDOV❿ 3URSHU$FFRXQWLQJDQG,QWHUQDO&RQWUROV5HODWLQJWR)LQDQFLDO5HSRUWLQJ| Initiatives to Promote Compliance,QDGGLWLRQWRWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWWKH*URXSSURPRWHVFRPSOLDQFHWKURXJKWKHIROORZLQJLQLWLDWLYHV
❶ Training focused on legal issues to improve compliance awareness is provided for employees at point of hire, when promoted and before overseas

WUDQVIHUV,QDGGLWLRQZLWKWKHDLPRISURPRWLQJDZDUHQHVVRIWKH',&*URXS&RGHRI%XVLQHVV&RQGXFWLQ¿VFDO\HDUHOHDUQLQJRQWKHSUHYHQWLRQRIEULEHU\DQGFRUUXSWLRQZDVSURYLGHGLQ-DSDQWKH$VLD±3DFL¿FUHJLRQDQG*UHDWHU&KLQD3DUWLFLSDWLRQLQDOOWKUHHUHJLRQVDYHUDJHGSOXVRI
eligible employees.
❷ &RPSOLDQFHRI¿FHUVDUHDSSRLQWHGDWDOOUHJLRQDOKHDGTXDUWHUV²',& -DSDQ 6XQ&KHPLFDO WKH$PHULFDVDQG(XURSH ',& &KLQD  WKH35& DQG
',&$VLD3DFL¿F $VLDDQG2FHDQLD ²WRVSHDUKHDGJOREDOFRPSOLDQFHHIIRUWVThe DIC Group vows that it will not violate the principles of the DIC Group Code of Business Conduct, even if such a violation would
DSSHDUWRSUR¿WWKH*URXS$VDFRUSRUDWHFLWL]HQWKH*URXSDOVRSOHGJHVWRUHVSHFWVRFLDOQRUPVDQGDFWLQDVRXQGDQGVRFLDOO\DFFHSWDEOH
PDQQHU,Q¿VFDO\HDUWKHUHZHUHQRVHULRXVYLRODWLRQVRIFRPSOLDQFHODZVDIC Report 201848

Compliance| Establishing and Operating a Whistle-Blowing System
7KH',&*URXSKDVHVWDEOLVKHGDZKLVWOHEORZLQJV\VWHPWKURXJKZKLFKRQHFDQGLUHFWO\UHSRUWDQLVVXHRUTXHVWLRQUHJDUGLQJFRPSOLDQFHWRWKHGLYLVLRQUHVSRQVLEOH
IRUFRPSOLDQFH6LQFH¿VFDO\HDUWKH*URXSKDVPDLQWDLQHGZKLVWOHEORZLQJKRWOLQHVWKDWFDQKDQGOHUHSRUWVLQWKHODQJXDJHVRIPRUHWKDQFRXQWULHV7KH
Group has also devised strict rules under this system to protect whistle-blowers from retaliation, and is working to ensure the system functions in a proper manner.
:KHQDUHSRUWLVUHFHLYHGWKH*URXSUHVSRQGVVZLIWO\DQGDSSURSULDWHO\JLYLQJGXHFRQVLGHUDWLRQIRUSHUWLQHQWODZVZKLOHDOVRLQFRUSRUDWLQJLQWHUQDODQGH[WHUQDORSLQLRQVWRSURPSWO\LGHQWLI\DQGFRUUHFWPLVFRQGXFWDQGRWKHUFRPSOLDQFHYLRODWLRQVDVTXLFNO\DVSRVVLEOH
DIC Group
employees
Japan, other countries/
territories, regionsAsia–Pacific region

Greater China

Sun Chemical
Corporation

Director in charge of compliance, Legal Department
External legal firm

Legal Department
Whistle-Blowing Committee

Whistleblowing
hotlines

Legal Department
Whistle-Blowing Committee

General manager, Legal Department,
CEO, CFO| Antitrust and Anti-Corruption Legislation
The DIC Group has formulated a basic policy to comply with antitrust legislation and made Groupwide efforts to ensure fair business practices. The DIC Group&RGHRI%XVLQHVV&RQGXFWLQFOXGHVUXOHVIRUFRPSO\LQJZLWKDQWLWUXVWOHJLVODWLRQDQGSURKLELWVLQYROYHPHQWLQFRUUXSWLRQ6LQFH¿VFDO\HDUWKH*URXSKDVKHOGPRUHWKDQSUHVHQWDWLRQVUHJDUGLQJDQWLWUXVWDQGDQWLFRUUXSWLRQOHJLVODWLRQIRUUHOHYDQWHPSOR\HHVWRHQVXUHVWULFWFRPSOLDQFHZLWKWKHODZVRIWKH
FRXQWULHVLQZKLFKLWRSHUDWHV,Q¿VFDO\HDUFRPSOLDQFHVWXG\VHVVLRQVZHUHKHOGIRUGLUHFWRUVDQGIRUWKH&(2VRI',&*URXSFRPSDQLHVLQ-DSDQ| Promoting Compliance with Legislation Regarding the Timely Payment of Subcontractors
With the aim of enhancing understanding of the importance of appropriate and fair transactions with subcontractors, the Legal Division held presentations
on legislation regarding the timely payment of subcontractors for the purchasing departments of domestic DIC Group companies that incorporated caseVWXGLHV,Q-DQXDU\',&SUHSDUHGWKH0DQXDOIRU,QWHUQDO$XGLWLQJRIWKH',&*URXS¶V&RPSOLDQFHZLWK-DSDQ¶V$FWDJDLQVW'HOD\LQ3D\PHQWRI
6XEFRQWUDFW3URFHHGV(WFWR6XEFRQWUDFWRUVDQGVWDQGDUGL]HGDXGLWSURFHGXUHVWKHUHE\FUHDWLQJDIUDPHZRUNIRUFRQGXFWLQJDXGLWVLQDPRUHHI¿FLHQW
PDQQHU7KH*URXSDOVRHQFRXUDJHGHPSOR\HHVLQUHODWHGSRVLWLRQVWRSDUWLFLSDWHLQSURJUDPVVSRQVRUHGE\H[WHUQDORUJDQL]DWLRQVLQFOXGLQJDZRUNVKRSon promoting adherence to the Act sponsored by the Japan Fair Trade Commission and the Small and Medium Enterprise Agency.

| Taxation Compliance$PRXQWRI$FFUXHG7D[LQ)LVFDO<HDU

,Q1RYHPEHUWKH',&*URXSIRUPXODWHGDQRI¿FLDODSSURDFKWRWD[$VDQRUJDQL]DWLRQZLWKJOREDORSHUDWLRQVWKH*URXSHQJDJHVLQIDLUDQGDSSURSULDWHWD[SODQQLQJWKDWUHÀHFWVWKHQDWXUHRILWVEXVLQHVVHV
7KH*URXSLVDOVRDZDUHRIULVNVDVVRFLDWHGZLWKWUDQVIHUSULFHWD[DWLRQDQGWKHXVHRIWD[KDYHQVDQGRILWV
REOLJDWLRQWRSD\DSSURSULDWHWD[HVLQWKHSURSHUMXULVGLFWLRQVDVDSSURSULDWHIRULWVRSHUDWLRQV7KHFKDUWWRWKHULJKWVKRZVDJHRJUDSKLFEUHDNGRZQRIWD[HVSDLGE\WKH*URXSLQ¿VFDO\HDU
7KH',&*URXS¶V$SSURDFKWR7D[

WEB

Overseas

5,030

Japan
Total

10,517

5,487（Millions of yen）

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

VOICE We provide legal services that are essential to the DIC Group’s global operations.
I am currently on assignment at DIC (China) as an overseas trainee, overseeing legal matters in collaboration with the staff of DIC(China)’s legal department. To ensure legal compliance when operating in a country or territory with different laws and regulations
LWLVHVVHQWLDOWRFRQVXOWORFDOOHJDOH[SHUWV7KLVFDQEHGLIILFXOWLI\RXGRQ¶WKDYHDEDVLFNQRZOHGJHRIWKHFRXQWU\RUWHUULWRU\¶VODZV$VDWUDLQHH,KDYHFRPHWRUHDOL]HWKDW/HJDO'HSDUWPHQWVWDIIPHPEHUVDUHH[SHFWHGWRFRPPXQLFDWHZLWKOHJDOH[SHUWVDVZHOODVVHUYHDVLQWHUPHGLDULHVEHWZHHQH[SHUWVDQGEXVLQHVVXQLWV/RRNLQJDKHDG,ZLOOFRQWLQXHZRUNLQJWRJDLQDILUPHUJUDVS
of needs associated with global operations with the goal of providing effective legal services.
Legal Department Shunji Tashiro

DIC Report 201849

Basic ThemesCore and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

Risk Management
Reducing Business Risks and Preventing the Recurrence of Incidents
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Ensure business continuity for the
DIC Group.

Goals for fiscal year 2017

Achievements in fiscal year 2017

• Deploy a risk management system that
conforms with the risk management policy
and reinforce global awareness of the system.
• Promote ongoing Risk Management
Subcommittee–led efforts to systematically
implement response measures for criticalrisks, including governance at subsidiaries.
• Promote the ongoing improvement of productdivision BCPs and encourage communication between product divisions and plants.
• Advance efforts to reinforce the corporate
headquarters’ crisis management configuration and promote safety measures overseas.

• A risk management system was deployed
and steps were taken to reinforce
awareness at Group companies in theAsia–Pacific region and the PRC.
• Efforts were made to encourage the sharing
of information and to reinforce cooperation
between corporate headquarters in Japanand the Sun Chemical Group, which
oversees operations in the Americas andEurope.
• Progress was made in the promotion of Risk
Management Subcommittee–led efforts tosystematically implement response measuresfor priority risks, including governance at
subsidiaries.
• DIC promoted the ongoing improvement of
product division BCPs and encouraged
communication between product divisions
and sites through visiting BCP lectures,among others.
• The corporate headquarters’ crisis management
configuration and safety measures overseas
were reinforced.

Evaluation

Goals for fiscal year 2018★★★

• Deploy a risk management system that
conforms with the risk management policy andreinforce global awareness of the system.
• Promote ongoing Risk Management Subcommittee–led
efforts to systematically implement response measuresfor critical risks, including governance a at subsidiaries.
• Encourage the ongoing improvement of productdivision BCPs and fortify communication between
product divisions and sites.
• Advance efforts to reinforce the corporate headquarters’
crisis management configuration and promote safetymeasures overseas.

Basic Approach to Risk Management
7KH',&*URXSXQGHUWDNHVULVNPDQDJHPHQWLQLWLDWLYHVZLWKWKHDLPRIDSSURSULDWHO\DQGÀH[LEO\DGGUHVVLQJFKDQJHVLQLWVRSHUDWLQJHQYLURQPHQWDQGWKHGLYHUVL¿FDWLRQ
of risks, and of swiftly mitigating damage. The Group recognizes risks in three principal categories: externally caused risks that are beyond its control, corporate risks
that can be prevented and business risks that should be handled by the relevant divisions/departments. The Risk Management Subcommittee, which is a subordinate
committee of the Sustainability Committee, oversees management of these risk responses.

| Risk Management Policy
7KH',&*URXS¿UVWLQWURGXFHGULVNPDQDJHPHQWLQLWLDWLYHVLQE\FUHDWLQJWKH&RPSOLDQFH&RPPLWWHHDQGVHWWLQJXSUHSRUWLQJFKDQQHOV)ROORZLQJ
WKHLQDXJXUDWLRQRIWKH5LVN0DQDJHPHQW6XEFRPPLWWHHLQ0D\WKH*URXSXQGHUWRRNLQLWLDWLYHVDLPHGDWUHVSRQGLQJWRVHULRXVQDWXUDOGLVDVWHUVDQGSURPRWLQJEXVLQHVVFRQWLQXLW\PDQDJHPHQW %&0 6LQFH¿VFDO\HDUWKH5LVN0DQDJHPHQW6XEFRPPLWWHHKDVIRFXVHGRQHVWDEOLVKLQJDULVN
management policy and a risk management system, efforts that are designed to further enhance corporate value Groupwide. In a bid to ensure the effective
DQGVXVWDLQDEOHLPSOHPHQWDWLRQRILQLWLDWLYHVLQ-DQXDU\WKH*URXSLQWURGXFHGDQHZO\IRUPXODWHGULVNPDQDJHPHQWSROLF\

Risk Management Policy❶ Risk management objectives

The DIC Group undertakes risk management initiatives with the aim of appropriately and flexibly addressing changes in the operating environment and thediversification of risks, and of swiftly mitigating damage.

❷ 'HÀQLWLRQRIULVNVDQGULVNPDQDJHPHQW
7KH',&*URXS¶VGH¿QLWLRQRIULVNDQGULVNPDQDJHPHQWLVDVIROORZV
1. Risk: All uncertainties that threaten the DIC Group’s sustainability and business goals.
2. Risk management: Initiatives to enhance corporate value by managing all risks to the DIC Group from a Groupwide perspective.

❸ Risk management initiatives

1. The DIC Group comprehensively evaluates all risks based on their potential impact on operations and likelihood of occurring, among others, and prioritizes systematic andeffective responses.
2. The DIC Group constructs and validates risk management systems by repeating the PDCA cycle.
3. The Risk Management Subcommittee shares responsibilities with the risk management teams of individual businesses to properly deploy risk measures within the
DIC Group. The conference regularly reports on its activities to the Sustainability Committee.

DIC Report 2018

50

Risk Management

6LQFH¿VFDO\HDU',&KDVHQFRXUDJHGDZDUHQHVVRILWVULVNPDQDJHPHQWSROLF\DFURVVWKH
global DIC Group by publishing information on the policy, as well as on risk management initiatives,on its in-house electronic notice board and through the Group’s newsletter, DIC Plaza. In Japan,
the Company also seeks to promote and raise awareness through the provision of training to plant
general managers and senior executives of domestic Group companies.

Meeting of the Risk Management Subcommittee

Risk Management Overview
Sustainability Committee● Risk Management Committee●

Subsidiary governance working groups
BCP/Disaster Risk Reduction working groups●

Product division BCP managers●

Reinforce ability to respond in the event of a crisis.
Enhance initial response manual.
● Strengthen practical capabilities by conducting
site-specific scenario-based drills.
● Confirm/improve effectiveness of BCPs by conducting
BCP-focused joint product division–site drills.
● Enhance responsiveness by conducting task
force map- and secretariat map-based drills.
●●

Promote awareness of the Group risk
management policy and system.
● Gather risk management–related information
and amass know-how● Create framework for information sharing anddecision making in the event of a crisis.
● Ensure effective media relations.
● Establish emergency contact network and procedures.
●●Management offramework for
promoting initiatives

Crisismanagement

Risk
communications

Risk
Management Preventativerisk management

Overseassafety measures

Prepare/update safety manuals for use overseas.
Gather risk information overseas and prepare/update response procedures.
● Provide risk information to overseas bases.
● Prepare and distribute safety handbooks to employees taking
up overseas posts or embarking on overseas business trips.
● Provide training and establish emergency contact networks for
employees taking up overseas posts or embarking on overseas business trips.
● Conduct drills based on hypothetical scenarios to reinforce
quick response capabilities.

Abstract priority risks and use the PCDA cycle
for response measures to facilitate ongoingrisk reduction/prevention.
● Prepare/update crisis management rules
and manuals.
● Collect/store emergency supplies/equipment.
● Promote employee awareness of disasterprevention/mitigation.
●

Risk categories

Main risk owners

Risks that should be dealt with by relevant departments

Ɣ Product divisions
Ɣ Production, marketing andtechnical management unitsƔ Purchasing departments

These are risks to be considered in the course of
conducting business, including those that affectproduction, development, investment and procurement.

Risks that should be dealt with by specialized departments
Unlike risks that should be dealt with by relevant departments,
these are risks that affect all Group business activities and can beaddressed at the corporate level. Examples include risks related to
information management and legal and regulatory compliance.

Corporate risk
management
activities

Risks beyond control
These are risks arising from natural events and social
circumstances.

DIC Report 201851s

Business
activities

es

io
at

The DIC Group recognizes risks in threeprincipal categories. The Group manages
WKHVHULVNVE\FODULI\LQJVSHFL¿FULVNRZQHUVwhich are the divisions/depar tments
responsible for implementing responses.

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Ɣ Headquarters’ administrative unitsƔ Corporate planningdepartments

Ɣ Risk Management Subcommittee
Ɣ Headquarters’ administrative unitsƔ SitesRisk Management

High

Risk Map
19 Priority Risks for which the Risk Management Subcommittee
Has Adopted Response Measures

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A risk map is prepared based on
the aggregated results of a risk
VXUYH\RIH[HFXWLYHRI¿FHUVThe Risk Management Subcommittee
abstracts priority risks, determines
risk owners, directs the formulation of
response measures and manages the
progress of initiatives.

䖃䖃Likelihood❶ Currency and interest rate fluctuations⓫)DFLOLW\UHODWHGDFFLGHQWV❷ Intellectual property⓬ Ability to foster human resources❸ Governance at subsidiaries⓭ Product quality complaints❹ Product liability⓮ Management of chemical substances❺ Pandemics⓯ Optimized global production configuration❻ Economic fluctuations⓰ Establishment of global R&D network❼ Decline in debt ratings⓱ BCM❽ Information security⓲ Promotion of supply chain management❾ Operations of overseas business units⓳ Promotion of occupational health and safety and❿ Major natural disasters

consumer health (including mental health)(Including those attributable to climate change)High| Risk Management System
In the process of formulating the risk management policy, the Risk Management Subcommittee established the DIC Group risk management system. This system begins with the distribution to directorsof survey questionnaires regarding risks with the potential to interrupt the Group’s businesses. Based on survey results, the subcommittee determines priority risks. Risk management plans are produced
and risk response measures implemented, improved and reviewed by executives, thereby completing the PDCA cycle, with the aim of facilitating ongoing risk reduction.
',&SRVLWLRQHG¿VFDO\HDUV±DVWKHLQDXJXUDOSKDVHRIULVNPDQDJHPHQWSUHGLFDWHGRQWKHQHZV\VWHPZLWKVXEVHTXHQWVWHSVWREHUHSHDWHGDQQXDOO\OHYHUDJLQJNQRZOHGJH
and experience gained. Based on survey results, the subcommittee determines priority risks. The administrative groups that comprise the subcommittee spearhead the assignment of an
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Looking ahead, DIC will continue to promote awareness and dissemination of the risk management policy and the risk management system. To enhance BCM, corporate headquarters will spearhead the
preparation of Business Continuity Planning (BCP) Guidelines for lateral deployment across the DIC Group, which will be optimized to account for the situation on the ground in various countries and territories.
November (prior year): A risk survey of directors, product division general managers
and site general managers is conducted

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December (prior year): Risk survey questionnaires are completed by executives
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January: 7KH5LVN0DQDJHPHQW6XEFRPPLWWHHGHWHUPLQHVSULRULW\ULVNVDQGULVNRZQHUVĻ5LVNRZQHUVIRUPXODWHUHVSRQVHPHDVXUHVDecember: 7KH5LVN0DQDJHPHQW6XEFRPPLWWHH
DVVHVVHVWKHSURJUHVVDQGHIIHFWLYHQHVV
of response measures

February: A list of response measures is prepared
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1

2
Framework forconstruction andmaintenance ofsystem3
Production of risk
management plan

PLAN

Risk management policy
Risk management system
Risk management organization,
rules and manuals

45Management ofrisks

Assessment ofrisk management
performance

DO

CHECK

February–December: Individual response measures are
implemented by risk owners

6
Adjustment andimprovement ofrisk management
systemExecutive review

ACT
February: $OLVWRIWKHRXWFRPHRIUHVSRQVHPHDVXUHVLVSUHSDUHG
 WKHOLVWLVVXEPLWWHGWRWKH6XVWDLQDELOLW\&RPPLWWHH| Progress of Response Measures as of the End of Fiscal Year 2017
7KH5LVN0DQDJHPHQW6XEFRPPLWWHHKDVFRPSOHWHGWKHLPSOHPHQWDWLRQRIULVNPDQDJHPHQWSODQPHDVXUHVWRDGGUHVVRIWKHSULRULW\ULVNVWKDWLVDOOEXW³JRYHUQDQFHDWVXEVLGLDULHV´ZKLFKLV
SDUWLFXODUO\EURDGLQVFDOHDQGZLOOWKXVEHFDUULHGRYHU )RUGHWDLOVRQWKLVULVNSOHDVHVHHSDJH 7KHHIIHFWLYHQHVVRIPHDVXUHVZDVDVVHVVHGDQGDQH[HFXWLYHUHYLHZFRQGXFWHGEDVHGRQZKLFKWKHGHVLJQDWLRQIRUDOOZDVVKLIWHGIURP³SULRULW\´WR³URXWLQH´7KHVXEFRPPLWWHHZLOOFRQWLQXHWRDSSO\WKH3'&$F\FOHWDNLQJGHFLVLYHVWHSVWRIXUWKHUHQKDQFH',&¶VDELOLW\WRPDQDJHWKHVHULVNV,Q¿VFDO\HDU',&LQFRUSRUDWHGPDWHULDOLW\LQWRWKHULVNLGHQWL¿FDWLRQSURFHVV$VDUHVXOWWKH&RPSDQ\LGHQWL¿HGVHYHQQHZSULRULW\ULVNVWREHDGGUHVVHGGXULQJWKHSHULRGDOORIZKLFKKDYH
WKHSRWHQWLDOWRQHJDWLYHO\LPSDFWEXVLQHVVRSSRUWXQLWLHVDQG',&¶VJURZWK0HDVXUHVZHUHMXGJHGWRKDYHEHHQFRPSOHWHGIRUWKUHHRIWKHVHULVNVZKLFKZHUHUHGHVLJQDWHG³URXWLQH´7KH&RPSDQ\LV
currently taking decisive steps to address the remaining four.
$SDUWLFXODUIRFXVLQ¿VFDO\HDUZDVUHLQIRUFLQJPHDVXUHVWRSURPRWHDZDUHQHVVDVDFRPSRQHQWRIHIIRUWVWRHQVXUH',&¶VDELOLW\WRIXO¿OOLWVVXSSO\UHVSRQVLELOLWLHVLQWKHHYHQWRIDPDMRUQDWXUDO
disaster. To clarify the roles of its corporate headquarters and individual sites and appropriate procedures, as well as to encourage the sharing of information, visiting BCP lectures were held at major
sites in Japan. By encouraging the exchange of views between participating product division general managers and general managers/group leaders from production sites, the Company sought toadvance understanding of BCPs, as well as to elucidate issues and reinforce responses to ensure business continuity in the aftermath of a disaster.
DIC Report 2018

52

Risk Management

Examples of Response Measures for Selected Priority Risks (Fiscal Year 2017)
Risk category
1Creation of next-generation
businesses(Relevant pages: 128–129)

Possible negative impacts

Principle response measures

Dramatic changes in the external environment of existing businesses andinsufficient ability to create new businesses; downsizing/financial difficulties
attributable to insufficient management of business portfolio• Analyze current state of business portfolio; assess growth potential and core competencies• Next-generation businesses: Assess relevance to core competencies, hypotheticalmarkets vs. existing markets and growth expectations, among others• Create framework; establish system for implementation/program, obtain external
assessment and secure human resources

2

Management of chemical
substances(Relevant pages: 101–105)

Production stoppages; suspension of exports; recall of products; payment ofdamages; decline in reputation due to legal/regulatory violations; weakening ofbrand image; damage to employee health and resulting litigation• Improve information system: Automate identification of substances subject to regulation;
add to regulations considered in identification• Increase accuracy of information on chemical substances: Integrate management of
information on toxicity and properties, secure information processing experts and promote
the use of pertinent systems• Increase accuracy of information on raw materials• Grasp risks associated with handling: Conduct chemical substance risk assessments

3

Ability to foster and strengthen
global human resources(Relevant pages: 115–118)

Delay in global expansion of businesses; breakdown of efforts to build
relationships with customers; decrease in quality, volume and efficiency of work;
weakening of cooperation among Group companies; decline in retention rate foryoung employees• Promote the implementation of measures designed to facilitate the smooth global
expansion of businesses outlined in the current medium-term management plan
• Ensure that individuals traveling overseas on business/posted overseas fulfill theirassigned missions• Promote systematic efforts to foster individuals targeted for overseas assignment• Pool global human resources

4

Optimized global production
configuration

Significant decline in sales/profits in global markets due to erosion of pricecompetitiveness• Formulate grand design for the optimization of production at domestic facilities• Design optimal overall production configuration encompassing domestic and overseas
facilities• Reflect measures in the new medium-term management plan

5

Efforts to strengthen global
technology development capabilities(Relevant pages: 130–133)

Loss of opportunities/critical delays in and withdrawal from overseas
businesses; decrease in global competitiveness, capacity for businessexpansion and brand strength• Establish policy for the fostering and deployment of global technical personnel• Expand the exchange of technologies with the Sun Chemical Group; begin building
the technical foundation necessary for the promotion of medium- to long-term businesscollaboration themes and promoting initiatives• Commence global management of intangible technical assets• Promote education on and awareness of the information security policy• Create technology framework that leverages IT capabilities

6

BCM(Relevant pages: 54–56)

Loss of commercial opportunities/withdrawal from businesses/decrease inprofits of businesses due to ineffective post-disaster execution of BCPs;
payment of damages due to failure to fulfill supply obligations; decline in
reputation; casualties and negligence in regard to safety• Promote awareness of the DIC Group’s approach to BCM and its BCM manual• Continue to update product division BCPs annually and provide direction for BCP
formulation• Continue to conduct BCP drills; promote collaboration between product divisions and sites
and confirm the effectiveness of individual product division BCPs

7

Governance at subsidiaries(Relevant page: 53–54)

Arbitrary management and internal entanglements, inability to address issues properly, andexpansion of concerns/losses out of public view attributable to the appointment of incompetent
executives, and to insufficient monitoring by the boards of directors, at subsidiaries; frequent
problems, difficulties in achieving results targets, and the discovery of scandals and legal
violations resulting from insufficient management and operational capabilities• Enhance the visibility of Group governance systems• Ensure appropriate behavior by subsidiaries’ executives• Ensure appropriate behavior by subsidiaries’ boards of directors• Help subsidiaries ensure rational front-line operations¦ Efforts to Reinforce Safety Measures Overseas
Owing to the expansion of its global operations, the DIC Group is establishing new overseas bases and increasing the number of employees being assigned to overseas posts or travelingoverseas on business. With the rising frequency of terrorism, uprisings, kidnappings and other such incidents in various locations, the Group is reinforcing safety measures designed tohelp employees evade danger. These include taking steps to advance awareness among related individuals and reinforce the corporate headquarters’ ability to respond effectively in an
emergency situation by establishing an emergency contact network, providing risk information to overseas bases, distributing safety handbooks, providing safety training to employees
prior to taking up new overseas posts or embarking on overseas business trips, and conducting drills based on hypothetical scenarios set forth in crisis management manuals.

Safety training for employees prior to taking up overseas posts

Safety training handbook for
employees traveling overseas
on business

Safety handbook for Company
representatives residing
overseas

Safety training for individuals prior to embarking on overseas business trips¦ Initiatives to Strengthen Governance at Subsidiaries
The DIC Group comprises 171 companies in 64 countries and territories. Two-thirds of the Group’s employees are located at, and 60% of its consolidated net sales are
generated by, bases outside of Japan. DIC recognizes that ensuring subsidiaries share the same values and vision—despite differences in culture, systems and customs—
and maximizing management resources, while at the same time complying with local laws, regulations and rules, is critical to sustainable growth for the Group.
It goes almost without saying that in the event of a transgression, an incident of noncompliance or an unforeseen contingency at an overseas DIC Group base, there isa risk that the DIC brand image could be negatively affected, causing damage to the Group as a whole. DIC has thus positioned the management of this risk as a crucial
challenge requiring immediate and ongoing initiatives and will continue to promote efforts to strengthen its framework for supporting risk-avoidance worldwide.
DIC Report 2018

53

Risk Management| Framework for Supporting the Management of Subsidiaries$VDQRUJDQL]DWLRQZLWKJOREDORSHUDWLRQV',&KDVZRUNHGFRQWLQXRXVO\WRFUHDWHLQWHUQDOFRQWUROVV\VWHPVDQGHVWDEOLVKJRYHUQDQFHFRQ¿JXUDWLRQVIRULWVVXEVLGLDULHVDURXQGWKH
ZRUOG:LWKWKHDLPRIHQVXULQJWKDWVXEVLGLDULHV¶ULVNPDQDJHPHQWV\VWHPVIXQFWLRQDQGRIUHLQIRUFLQJDQGLQFUHDVLQJWKHHI¿FLHQF\RIWKHLUPDQDJHPHQWLQ¿VFDO\HDU',&
outlined four key themes to guide these efforts. This move was made in line with the Company’s belief in the importance of establishing robust frameworks for the appointment of
directors, the organization of corporate auditors, the operating structures underpinning subsidiaries’ management and the provision of support by the parent company.
❶ Enhance the visibility of Group governance systems: The DIC Group’s matrix-like governance organization positions products on one axis and regions on the other. Steps
are being taken to clarify and set down standards for the segregation of duties and the delegation of authority to assist overseas subsidiaries in determining which of the two
aspects should be given priority in making business decisions.
❷ Ensure appropriate behavior by subsidiaries’ boards of directors: Prerequisites for the appointment of directors to
Themes Guiding Efforts to Strengthen
subsidiaries’ boards of directors, which are responsible for supervising executives’ performance of their duties,
Governance at Subsidiaries
are being established, as are guidelines for board administration.
❸ Ensure appropriate behavior by subsidiaries’ executives: Prerequisites for the appointment of executives,
including leadership skills, managerial competence and awareness of compliance, are being established.
❹ Implement measures that help subsidiaries ensure rational front-line operations: Such measures include
setting KPIs for subsidiaries that align with DIC targets, establishing criteria for the provision of support and
171 Subsidiaries and Affiliates
management assistance by the parent company’s functional departments and determining acceptable operating① Enhance the visibility of Group governance systems
levels.
② Ensure appropriate behavior by subsidiaries’ boards of directors③ Ensure appropriate behavior by subsidiaries’ executives| Responding to New Laws and Regulations
Transfer price taxation is one of the principal challenges facing the DIC Group’s subsidiaries. With transfer
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the country of domicile and the country to which it transfers, i.e., sells, its products. As a consequence of the%DVH(URVLRQDQG3UR¿W6KLIWLQJ %(36 3URMHFW HIIHFWLYHIURP¿VFDO\HDU',&ZLOOEHREOLJHGWRSURYLGH
uniform information to local tax authorities in all of the countries in which it has operations. In response, the&RPSDQ\ZLOOZRUNZLWKWKH*URXS¶VRYHUVHDVUHJLRQDOKHDGTXDUWHUV ',& &KLQD DQG',&$VLD3DFL¿F DQG
6XQ&KHPLFDOWRFRQ¿UPDQGRUJDQL]HWUDQVDFWLRQLQIRUPDWLRQ

④ Implement measures that help subsidiaries ensure rational
front-line operations

The DIC WAY

%(36LVWKHDUWL¿FLDOUHGXFWLRQRIWD[DEOHLQFRPHWKURXJKWKHVKLIWLQJRISUR¿WVWRORZWD[MXULVGLFWLRQVRURWKHUORFDWLRQVZKHUHWKHUHLV
OLWWOHRUQRHFRQRPLFDFWLYLW\7KH%(363URMHFWLVDQLQLWLDWLYHXQGHUWDNHQLQUHVSRQVHWRGHPDQGVE\*PHPEHUFRXQWULHVVHHNLQJto prevent the erosion of their tax bases to plug gaps in tax rules that make BEPS possible.

| BCM
Drawing on lessons from the Great East Japan Earthquake, the DIC Group now accounts for all risks with the potential to interrupt business
continuity through BCM. These risks include natural disasters such as large earthquakes and floods; influenza and other pandemics;
H[SORVLRQV¿UHVOHDNVDQGRWKHUIDFLOLW\DFFLGHQWVDQGPDMRUFRUSRUDWHVFDQGDOV7KH*URXSFRPSUHKHQVLYHO\HVWLPDWHVWKHSUREDELOLW\RI
HDFKULVNDQGLWVLPSDFWRQPDQDJHPHQWSULRULWL]LQJUHVSRQVHPHDVXUHVIRUPRUHVLJQL¿FDQWULVNV
In Japan, which is currently experiencing an active period in terms of volcanic and seismic activity, the Group deploys ongoing natural
disaster response measures. These include maintaining headquarters’ functions and task force framework, support measures for disasterstricken areas, and producing and renewing BCPs for each key product. The Group facilitates and maintains a system to maintain business
continuity through training drills. These encompass drills for safety confirmation, emergency radio warnings, comprehensive disasters,
disaster map exercises and BCP.
+DYLQJODXQFKHGDUHYLHZRI%&3VEDVHGRQVRFLDOUHVSRQVLELOLW\DQGFXVWRPHULPSHUDWLYHVLQ¿VFDO\HDUZHVXEVHTXHQWO\SURFHHGHG
ZLWKWKHIRUPXODWLRQRI%&3VIRUDOOSURGXFWGLYLVLRQVDQGUHODWHGVLWHV$VRI¿VFDO\HDUZHKDGFRPSOHWHGWKLVSURFHVVIRUDOOSURGXFWGLYLVLRQV:HDLPWRFRPSOHWHWKHIRUPXODWLRQRI%&3VIRURIFRUHVLWHVE\¿VFDO\HDU

| BCM in Fiscal Year 2017
,QLWLDWLYHVLQ¿VFDO\HDUIRFXVHGRQHQFRXUDJLQJDZDUHQHVVDPRQJDQGSURYLGLQJWUDLQLQJIRUDOOSURGXFWGLYLVLRQDQG*URXSSURGXFWLRQVLWH%&3RI¿FHUV
LQ-DSDQ7RHQVXUHWKDW%&3RI¿FHUVVKDUHWKHVDPHXQGHUVWDQGLQJRIEXVLQHVVULVNVDQGUHLQIRUFHUHFRJQLWLRQRIWKHQHHGWRDGGUHVVEXVLQHVVFRQWLQXLW\as an inherent aspect of everyday operations by encouraging the formulation of highly effective methods for countering various hypothetical crises—thereby
enabling DIC to leverage limited resources to secure supply chains and restore sites to operability in the aftermath of a major disaster—the Group conducted
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exchanged views on issues and solutions.

DIC Report 2018

54

Risk Management| Complementary Production Capabilities
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facilities in Japan and the PRC collaborate on the implementation of BCPs, using a common emergency response manual and holding regular response simulation
sessions. Group pigment production facilities have developed a framework that involves continuous cooperation to plan emergency response measures.

BCP Initiatives
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Saitama Plant (Japan)

Qingdao DIC Finechemicals (PRC)

Complementary production
capabilities for LCs
T

PICS

Visiting BCP Lectures Conducted at 20 Domestic Group Sites

Supplying Products in a Socially Responsible MannerWith the aim of facilitating collaboration between sites and corporate headquarters to ensure effective responses in the immediate aftermath of a hypothetical natural disaster,
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production facility suffers damage due to a disaster or other event, it is critical that other sites are able to temporarily take over production or provide backup and that supply
chain functions are secured to facilitate procurement of raw materials. Accordingly, the Group recognizes the need to ensure a common crisis awareness among productdivisions, as well as among business units and other divisions and departments, clarify roles and individuals in charge, create an effective emergency contact network, andconduct ongoing drills aimed at improving responsiveness.
Medium-term management plan

Formulating More Effective BCPs
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DJJUHJDWHWRWDORILQGLYLGXDOVLQFOXGLQJSURGXFWGLYLVLRQVWDII*URXS
company executives and group leaders, participated. Lectures included talks
given by consultants and theme-specific working groups, which discussed
key BCP issues at length, extracting those needing to be addressed over the
medium to long term, with the goal of formulating more effective BCPs. DIC
will capitalize on insights gained in the conducting of these lectures to promotehorizontal deployment at overseas DIC Group companies to create a morerobust framework for preventing and mitigating disasters and accidents.

Practical
responses

Progress of situation
Business as normal

Advance measures
Approach toadvancemeasuresOccurrence ofearthquake

Disaster!

Common across the DIC Group

Basic sustainability policy
Risk management policy

Rules for managing
emergency supplies

Rules for crisis management in
the event of a major natural orother disaster

Site and subsidiary rules/
regulations, firefighting plans, etc.
Site-specific

Task force manuals

BCM system manuals

Production division-specificGroup company-specific

Product division
BCP manuals

Group company
BCP manuals

Response framework(from initial response through restoration)(Emergency)

Initial response Responses to facilitate business continuity● Formulation of BCPs and manuals● Other advance measures(Preparations, earthquake-proofing of facilities, etc.)● Education and training

Anticipate how situation
will unfold post-disaster(disaster and damage scenario)

DIC Report 201855

Visiting BCP lecture (Osaka Branch Office)Risk Management

Sites Where Visiting BCP Lectures Were
Conducted in Fiscal Year 2017Black: Principal DIC sites
Blue: Principal DIC Group sites

DIC Kitanihon Polymer
Hokkaido Plant

DIC Kitanihon Polymer Co., Ltd.
Gunma Plant

Tokyo Plant

Tatebayashi Plant

Hokuriku Plant

Utsunomiya Plant

Komaki Plant

Saitama Plant
Kashima Plant

Yokkaichi Plant

DIC Plastics, Inc. (Tatebayashi Plant)

Osaka Branch Office

Corporate headquarters
Sakai Plant

Kansai Plant

Chiba Plant
Nagoya Branch Office

DIC Kyushu
Polymer Co., Ltd.
Kyushu Branch OfficeComment

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DIC’s BCP and risk management efforts different from the more standard undertakings of many other companies is their focus on ascertaining
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initiatives designed to fortify the framework for collaboration between sites and product divisions. Our efforts are designed to avoid turning thisprocess into mere formality, but rather to facilitate the formulation of effective and genuinely practical BCPs. Expect good things from DIC’s BCP
and risk management initiatives in the years ahead.
President, Legal & Risk Management Institute Ken Mori

| Emergency Response

Exercises and Drills
The DIC Group has developed andmaintains a system designed to ensure
its ability to minimize damage in theevent of a disaster, as well as to ensure
the smooth restoration of operations.
This system includes a wide range of
exercises and drills, including safety
confirmation drills, emergency radio
warning drills, comprehensive disaster
drills, map-based simulation exercises
and BCP drills.

Comprehensive disaster drill at thecorporate headquarters

7DVNIRUFHPDS±EDVHGVLPXODWLRQH[HUFLVH

DIC Report 201856

BCP drill and training

Risk Management| First-Ever Emergency Drill Simulating Ballistic Missile Launch$PLGULVLQJSROLWLFDOWHQVLRQVRQWKH.RUHDQ3HQLQVXODLQ6HSWHPEHU',&FRQGXFWHGLWV¿UVWHYHUHPHUJHQF\GULOOVLPXODWLQJWKHODXQFKRIDEDOOLVWLF
missile in the direction of Japan. The drill played out a scenario in which information has been received via Japan’s J-Alert emergency warning system that a
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event of an unforeseen emergency, it is critical to remain calm and resist the urge to panic. The Risk Management Subcommittee assesses the effectiveness
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Government-prepared awareness poster in thecorporate headquarters cafeteria| DIC Corporate Headquarters Emergency Pocket Books$SSUR[LPDWHO\HPSOR\HHVRIWKHSDUHQWFRPSDQ\DQGYDULRXVGRPHVWLF*URXSFRPSDQLHVZRUNDWWKHFRUSRUDWH
headquarters in Tokyo. DIC has prepared Emergency Pocket Books, pocket-sized booklets that provide instructions on
appropriate actions—both autonomous and in cooperation with others—in the event of a disaster for distribution to these
employees and their families. The booklets also detail corporate headquarters’ overall emergency response framework and
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and their families to provide contact information. The compact size of the booklets ensures portability.
Emergency Pocket Books

T

PIC

Training for Taking In Stranded Commuters in the Event of a Major DisasterOne of the most earthquake-prone countries in the world, Japan has been struck multiple times by devastating seismic activity. As a consequence, ensuring
earthquake readiness, that is, the ability to prevent and mitigate the impact of earthquakes, is recognized as a critical challenge for society as a whole.
Tokyo’s Nihonbashi district, home of DIC’s corporate headquarters, is an area noted for its tightly clustered large commercial complexes and office
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as temporary shelters for those stranded and an exhibition of relief tents set up by the Japanese Red Cross Society.
The DIC Building, designed with state-of-the-art earthquake-resistant technologies, has been designated as a temporary shelter for stranded commuters in&KXR:DUGZKHUH1LKRQEDVKLLVORFDWHG$FFRUGLQJO\DQH[HUFLVHZDVFRQGXFWHGWKHVFHQDULRIRUZKLFKLQYROYHGWKHRSHQLQJRIWKH¿UVWÀRRUPDLQHQWUDQFH
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took part in the exercise, which also included instruction in procedures for, among others, receiving and guiding shelter users, distributing rations, blankets,
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DIC will continue to play an active role in community-based efforts to reinforce local disaster preparations. In doing so, the Company aims to help ensure
Tokyo’s readiness to handle a major disaster.

Explanation to drill participants Emergency training in the use ofE \  1 L K R Q E D V K L  ) L U H  6 W D W L R Q AEDs and hemostasis
personnel

7UDLQLQJLQWKHXVHRI¿UHK\GUDQWV Exhibition of temporary shelters Japanese Red Cross Societ yWRH[WLQJXLVK¿UHV
for stranded commuters set up exhibition of relief tents
in the DIC Building

DIC Report 201857

Basic ThemesCore and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

Information Security
Initiatives to Ensure Information Security
Goals and Achievements of Major Initiatives (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ ([FHOOHQW★★ 6DWLVIDFWRU\★ = Still needs work
Objective of initiatives

Establish a global information
security framework.

Goals for fiscal year 2017

Achievements in fiscal year 2017

・Deploy common ICT-related usage andmanagement guidelines in Japan, theAsia–Pacific region and Greater China.
・Commence the implementation of measures
to reinforce information security in theAsia–Pacific region.
・Create a framework for the implementationof measures to strengthen BCPs.

・Common ICT-related usage and management
guidelines were deployed and related training
provided in Japan, the Asia–Pacific region andGreater China.
・An Asia–Pacific region information infrastructure/
secure environment creation project was promoted.
・Steps were taken to reinforce information security
based on a risk assessment conducted by athird-party organization.

Evaluation

Goals for fiscal year 2018★★

• Reinforce network infrastructure based on
information infrastructure/BCPs designed toensure preparedness for natural disasters
and other issues.
• Complete Asia–Pacific region information
infrastructure/secure environment creation
project.
• Reinforce end-point security.

Presentations
for employees

Basic Approach to Information Security
The DIC Group has positioned information security as a key management priority and
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that protecting information assets that belong to or are managed by the Group isessential to its ability to conduct business. In line with this policy, DIC has formulated
DQGLPSOHPHQWHGFRQ¿GHQWLDOLQIRUPDWLRQPDQDJHPHQWUHJXODWLRQVDQGLQIRUPDWLRQmanagement guidelines. (The regulations and guidelines were created in Japan in¿VFDO\HDU'HSOR\PHQWLQ$VLDDQG2FHDQLDFRPPHQFHGLQ¿VFDO\HDU
The DIC Group works to ensure that directors and employees use the Group’s
information assets appropriately in the course of business and appropriately handle
confidential information. The Group also pursues continuous improvements by
FRQGXFWLQJLQWHUQDODXGLWVWRFRQ¿UPFXUUHQWLVVXHVDQGLGHQWLI\ULVNV| Globally Maintaining and Enhancing Information Security

Measures tocombat software
vulnerabilities

Further
improvements

Computervirus measures

Cloud computing
responses

Basic Policy on Information Security
Basic policy
Confidential information management regulations
Preparation of
response measures
Information management guidelines
Implementation proceduresInternal audits

Initiatives in Japan',&KDVFRQWLQXRXVO\WDNHQVWHSVWRIRUWLI\LWVV\VWHPIRUUHVSRQGLQJWRWDUJHWHGF\EHUDWWDFNVDQGRWKHUFULWLFDOULVNVWRLWVLQIRUPDWLRQVHFXULW\,Q¿VFDO
year 2017, the Company also took steps to update its information security policy and rules to accommodate the Internet of Things (IoT), the integration of
information and operational systems and the expansion of cloud computing and other new technologies. DIC also invited a third-party organization to assess
its information security initiatives, which served to illuminate issues requiring attention from an expert, objective and multifaceted perspective, and has begun
taking steps to address these issues in order or priority.
The DIC Group periodically employs an e-learning program to encourage awareness of information security and provide training to all employees in
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,QLWLDWLYHVLQWKH$VLD±3DFL¿F5HJLRQDQGLQ*UHDWHU&KLQD,Q¿VFDO\HDUWKH',&*URXSIRUPXODWHGLQIRUPDWLRQDQGFRPPXQLFDWLRQVWHFKQRORJ\ ,&7 XVDJHDQGPDQDJHPHQWJXLGHOLQHVIRUWKH$VLD±3DFL¿Fregion and for Greater China. By promoting the deployment and firm establishment of these rules, the Group will continue working to reinforce theinformation security measures of DIC Group companies in these regions.
,QLWLDWLYHVLQWKH$PHULFDVDQG(XURSH+DYLQJUHFRJQL]HGLQIRUPDWLRQVHFXULW\DVDFKDOOHQJHRIYLWDOLPSRUWDQFHWKH6XQ&KHPLFDO*URXSZKLFKRYHUVHHVRSHUDWLRQVLQWKH$PHULFDVDQG(XURSHZRUNVWRHQVXUHEXVLQHVVFRQWLQXLW\DQGPLWLJDWHULVNVWRLWVLQIRUPDWLRQV\VWHPVDQGWKHFRQ¿GHQWLDOLW\LQWHJULW\DQGDFFHVVLELOLW\RILWVGDWD7KH6XQ
Chemical Group also promotes continuous, systematic efforts, based on ISO 27001, designed to reinforce its information security countermeasures, thereby
ensuring that it earns and maintains the trust of its stakeholders.

DIC Report 201858

Information Security| Safeguarding Information Security Environments in Asia and Oceania
7KH',&*URXSKDVGHYHORSHGDQRYHUDOOSODQIRUDGRSWLQJDVHFXULW\V\VWHPLQ$VLDDQG2FHDQLDEDVHGRQDXQL¿HGLQIUDVWUXFWXUHDQGLQ¿VFDO\HDUEHJDQEXLOGLQJFRXQWU\VSHFL¿FPDQDJHPHQWV\VWHPVZLWKWKHDLPRIFRPEDWLQJDPRQJRWKHUVFRPSXWHUYLUXVHVDQGVRIWZDUHYXOQHUDELOLWLHV,Q¿VFDO\HDUWKH*URXSZLOOGHYHORSDIUDPHZRUNWKDWZLOOHQDEOHORFDO,7VWDIIWRPDLQWDLQLQIRUPDWLRQVHFXULW\DQGRSHUDWHUHODWHGV\VWHPV,QLWLDWLYHV$LPHGDW5HVROYLQJ6\VWHP)DLOXUHVThe DIC Group backs up its business systems, which are crucial to its ability to ensure global business continuity, by maintaining duplicate systems at asecondary data center. The Group also promotes ongoing, systematic initiatives to ensure preparedness in the event of a natural disaster, pandemic of other
unforeseen event, including ensuring mobile connection system redundancy and reinforcing backup centers.
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With opportunities for using ICT tools expected to continue increasing, the ability of individual employees to use related tools effectively, with
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hardware and software previously used in Japan.

VOICE Sun Chemical’s information security system$W6XQ&KHPLFDOZHVHH¿UVWKDQGWKHLQFUHDVHDQGFRPSOH[LW\RIF\EHUWKUHDWVRQDGDLO\EDVLVDQGXQGHUVWDQG
the potential impacts on business. To ensure business continuity, we are focused on protecting our systems anddata assets through people, process and technology. Our information security program’s foundation is based on
the globally recognized ISO 27001 information security framework, and our strategy entails a multilayer security
approach and continuous improvements based on threat intelligence and incident response. We have invested
LQGLYHUVL¿HGWHFKQRORJLHVVXFKDVGDWDORVVSUHYHQWLRQVROXWLRQVWKHODWHVWDQWLYLUXVVRIWZDUHQHWZRUNVHFXULW\solutions and so on. In addition to technology investments, we are focusing efforts on establishing a global user
security awareness program to build a security-minded culture within Sun Chemical by training users how toprotect themselves and the organization from cyber threats.

Sun Chemical(From left) Manager, Infrastructure Chimdi Ifeakanwa
Specialist, Security Infrastructure Larry Withrow
Global Process Lead

DIC Report 201859

Ryan Vasquez

Basic ThemesCore and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

Environment, Safety and Health (ESH)
SDGs Goals 3, 6, 7, 12, 13, 14 and 15

Toward the Achievement of a Sustainable Society

Promoting Responsible Care
Basic Philosophy$VDFRPSDQ\WKDWPDQXIDFWXUHVDQGVHOOVFKHPLFDOVXEVWDQFHV',&VHWVVWDQGDUGL]HGVDIHW\UHJXODWLRQVIRU(6+LQLWLDWLYHV7KH&RPSDQ\LVZRUNLQJWRH[FHHGUHJXODWRU\VWDQGDUGVDQG
fully disclose results. Annual measures augment its core policy.

| Initiatives to Date+DYLQJHVWDEOLVKHGLWV3ULQFLSOHDQG3ROLF\IRUWKH(QYLURQPHQW6DIHW\DQG+HDOWKLQLQ',&SOHGJHGWRLPSOHPHQWWKHSUHFHSWVRI5HVSRQVLEOH&DUH6LQFHUHDIILUPLQJLWVVXSSRUWIRU5HVSRQVLEOH&DUHPDQDJHPHQWLQ-DQXDU\E\VLJQLQJWKH&(2¶V'HFODUDWLRQRI6XSSRUWIRUWKH5HVSRQVLEOH&DUH*OREDO&KDUWHUWKH&RPSDQ\KDVSURPRWHGFRQVWDQWLPSURYHPHQWV,Q',&DPHQGHGLWV3ULQFLSOHDQG3ROLF\IRUWKH(QYLURQPHQW6DIHW\DQG+HDOWKDQGUHQDPHGLWWKH3ROLF\
IRUWKH(QYLURQPHQW6DIHW\DQG+HDOWK7KHQDPHZDVVXEVHTXHQWO\UHYLVHGWRWKH(QYLURQPHQW6DIHW\DQG+HDOWK3ROLF\

DIC is a signatory to the International Council of
Chemical Associations’ Responsible Care Global Charter

Environment, Safety and Health Policy$VDUHVSRQVLEOHFRUSRUDWHFLWL]HQDQGDVDFRPSDQ\WKDWPDQXIDFWXUHVDQGVHOOVFKHPLFDOVXEVWDQFHV',&UHFRJQL]HVWKDWFDUHIRUWKHHQYLURQPHQWsafety and health is fundamental to the management of the Company. DIC is committed to the concept of sustainable development in all aspects of its
EXVLQHVVHVDQGFRQWULEXWHVWRWKHJOREDOHQYLURQPHQWLQFOXGLQJELRGLYHUVLW\E\FUHDWLQJHQYLURQPHQWDOO\VRXQGSURGXFWVDQGWHFKQRORJLHV❶ :HWDNHUHVSRQVLELOLW\IRUWKHHQYLURQPHQWDOVDIHW\DQGKHDOWKLPSOLFDWLRQVRISURGXFWVWKURXJKRXWWKHLUOLIHF\FOHV❷ :HFRQWLQXRXVO\VHWJRDOVDQGWDUJHWVIRUHQYLURQPHQWDOVDIHW\DQGKHDOWKLPSURYHPHQWV❸ :HFRPSO\VWULFWO\ZLWKODZVUHJXODWLRQVDQGDJUHHPHQWVUHODWLYHWRWKHHQYLURQPHQWVDIHW\DQGKHDOWK)RUFRXQWULHVODFNLQJVXFKODZVZHSULRULWL]HVDIHRSHUDWLRQVDQGSURWHFWLRQRIWKHHQYLURQPHQW❹ :HV\VWHPDWLFDOO\SURYLGHHGXFDWLRQDQGWUDLQLQJRQWKHHQYLURQPHQWVDIHW\DQGKHDOWK❺ :HSUHSDUHV\VWHPVDQGDXGLWLQWHUQDOO\WREHQH¿WWKHHQYLURQPHQWVDIHW\DQGKHDOWK:HGLVFORVHWKHVHSROLFLHVLQWHUQDOO\DQGH[WHUQDOO\DQGDVNWKDWDOO',&*URXSFRPSDQLHVREVHUYHWKHP7KHDERYHPHQWLRQHG³VDIHW\´also encompasses security and disaster prevention.

| Focus on Product Stewardship
The DIC Group views product stewardship as essential to the promotion of Responsible Care. Product stewardship is a philosophy that emphasizes
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(6+LPSDFWRISURGXFWVRYHUWKHLUHQWLUHOLIHF\FOH²LHIURPWKHGHYHORSPHQWRIFKHPLFDOVXEVWDQFHVWKURXJKWRSURFXUHPHQWSURGXFWLRQWUDQVSRUWVDOHuse and disposal or recycling.

Applying the PDCA Cycle to Seven Responsible Care Codes
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-DSDQ5HVSRQVLEOH&DUH&RXQFLO WKH¿UVWVL[FRGHVOLVWHG DQGDPDQDJHPHQWFRGHWKDWZDVGHYLVHGLQWHUQDOO\,QXQGHUWDNLQJWKHVHLQLWLDWLYHV',&DQG
',&*URXSFRPSDQLHVOHYHUDJHWKH*URXS¶V,62FHUWL¿HGHQYLURQPHQWDOPDQDJHPHQWV\VWHP,QDGGLWLRQWRWKHVHV\VWHPVFHUWDLQRYHUVHDV*URXSFRPSDQLHVDUHZRUNLQJWRVHFXUHWKH,62¶V2FFXSDWLRQDO6DIHW\DQG+HDOWK0DQDJHPHQW6\VWHP 26+06 FHUWL¿FDWLRQWKURXJKRQJRLQJHIIRUWVWRHQKDQFH
their Responsible Care capabilities.
DIC Report 2018

60

ESH

Reviews
conducted
bymanagement❶ (QYLURQPHQWDOSURWHFWLRQ FRQWLQXRXVUHGXFWLRQRIFKHPLFDOHPLVVLRQV❷ 3URFHVVVDIHW\DQGGLVDVWHUSUHYHQWLRQ SUHYHQWLRQRI¿UHVH[SORVLRQVDQGWKHGLVFKDUJHRIFKHPLFDOV❸ 2FFXSDWLRQDOVDIHW\DQGKHDOWK SURWHFWLRQRIWKHVDIHW\DQGKHDOWKRIHPSOR\HHV

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CheckResponsible Care
Initiatives
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Do

Plan

Implement/
manageFormulateplans

Annual Activity Plans
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Care initiatives and contribute to an environment-friendly society through its manufacturing activities.

Fiscal Year 2017 Activity Plans,Q¿VFDO\HDUWKH',&*URXSHQJDJHGLQ5HVSRQVLEOH&DUHLQLWLDWLYHVEDVHGRQWKHIROORZLQJDFWLYLW\SODQVThe DIC Group’s Responsible Care Activity Plans for Fiscal Year 2017
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❸ Logistics safety

Promote the provision of information pertinent to the safe transportation of chemical substances.
❹ Product stewardship

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Report on the results of the DIC Group’s Responsible Care activities via the DIC Report.
❻ Management system

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5HVSRQVLEOH&DUHDFWLYLWLHV)RVWHUKXPDQUHVRXUFHVLQDUHDVSHUWLQHQWWR(6+Message from the CEO',&¶VSUHVLGHQWDQG&(2SUHSDUHVDPHVVDJHIRUHPSOR\HHV
IRU(QYLURQPHQW0RQWKDQG1DWLRQDO6DIHW\:HHN

DIC Report 2018

61

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Framework for Promoting Responsible Care

Framework for Promoting Responsible Care
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provides support for these initiatives to advance their progress andconducts regular audits to ensure compliance and improve safety andenvironmental performance.

Production
Management Unit

Technical
Management Unit

Responsible Care Department
Support for ESH audits
Production and R&D facilities
Safety and Environment GroupThe Responsible Care Department provides wide-ranging support
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initiatives Groupwide.

Product division
Individuals in charge of
Responsible Care

Technical

Individuals in charge of
Responsible Care

Production

Product division

Support for Group Company Responsible Care Initiatives

Product division
Individuals in charge of
Responsible Care| Principal Initiatives in Fiscal Year 2017
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as on challenges and future directions.
,QDQHZXQGHUWDNLQJLQ)HEUXDU\DWULODWHUDO-DSDQ±$VLD±3DFL¿F±*UHDWHU&KLQDFRQIHUHQFH
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FRQVHUYDWLRQFRQIHUHQFH $VLD±3DFL¿FUHJLRQ$VLD±3DFL¿F5HJLRQRegional ESH Director for Asia‒Paciﬁc,QWKH$VLD±3DFL¿FUHJLRQWKH',&*URXSKDVHVWDEOLVKHG(6+FRXQWU\KHDGV LQGLYLGXDOVLQFKDUJHRI5HVSRQVLEOH&DUHLQLQGLYLGXDOFRXQWULHV XQGHUWKHVXSHUYLVLRQRIWKHUHJLRQDO
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attended by representatives from regional companies and production facilities and the regional(6+PDQDJHUWRGLVFXVVWKHUHJLRQ¶V(6+SROLFLHVWDUJHWVDQGFKDOOHQJHV,QDGGLWLRQDUHJLRQDOFRXQWU\KHDGFRQIHUHQFHLVKHOGDQQXDOO\LQ6LQJDSRUHZLWKSDUWLFLSDQWVLQFOXGLQJ
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WKHH[HFXWLYHLQFKDUJHRIUHJLRQDORSHUDWLRQVDQG5HVSRQVLEOH&DUHRI¿FHUVZKRPHHWWRGLVFXVV(6+SROLFLHVWDUJHWVDQGFKDOOHQJHVIRUWKHVXEVHTXHQW\HDU$WRWDORISHRSOH
WRRNSDUWLQWKHPHHWLQJZKLFKZDVKHOGLQ1RYHPEHU

Regional ESH Manager for Asia‒Paciﬁc

DIC Asia Paciﬁc Pte Ltd

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country head

ESH
country head

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country head

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country head

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country headSouth Asia
India
Sri Lanka
Pakistan

Oceania
Australia
NewZealandThailand

Malaysia

Indonesia

Philippines
VietnamSingapore)UDPHZRUNIRUSURPRWLQJ(6+LQWKH$VLD±3DFL¿FUHJLRQ【Regional Initiatives】

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KDYHGRQHVRWRGDWH,Q¿VFDO\HDUWKHFRPSDQ\DVVLVWHGWKHHIIRUWVRI',& 9LHWQDP &R/WGDQG',&3KLOLSSLQHV,QFZKLFKZLOOVHHNFHUWL¿FDWLRQ
LQ¿VFDO\HDU$WSUHVHQWRIUHJLRQDOSURGXFWLRQIDFLOLWLHVDUH2+6$6FHUWL¿HG

DIC Report 2018

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VOICE What we learned through occupational safety training at the Kashima and Saitama plants.
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Beta Production Supervisor, Karawang Plant, PT. DIC Graphics

Bachtiar Nugroho Amarullah (left)
R&D Staﬀ Sugianto (right)

Greater China
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prompt resolution of issues.
【Regional Initiatives】

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organizes lectures given by outside instructors to ensure awareness of current laws and regulations. The Company has also produced and distributed a Chinese-language versionof Principles of Safe ConductIRUZRUNSODFHUHDGLQJFLUFOHVDQGSURYLGHVVXSSRUWWRHPSOR\HHVLQDYDULHW\RIZD\VXQWLOWKHVHSULQFLSOHVEHFRPHVHFRQGQDWXUH

TPIC

DIC (China) Holds ESH Management Lecture Series
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advanced international safety management principles and the creation of a safety-oriented
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chemicals companies. Participants commented that the lectures had given them a renewed
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organize opportunities such as this with the aim of building a safety-oriented corporate culture.

Comment

My impressions of DIC (China)’s ESH education,Q-XQH,ZDVKRQRUHGWREHDVNHGWRDVVLVWZLWKWUDLQLQJIRU',& &KLQD HPSOR\HHVRQDGYDQFHGLQWHUQDWLRQDOVDIHW\PDQDJHPHQWSULQFLSOHVDQG
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caring for employees. The event also showed the company’s confidence in and resolve to maintain its solid safety management performance.
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forward to great things from the company in the years ahead.
General Technical Advisor, PSM Project, State Administration of Work Safety Yi Fu Liu

DIC Report 2018

63

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Europe, the Americas and Africa
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environmental presentations for local residents at production facilities.
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activities aimed at helping prevent global warming and preserve biodiversity.

［ DIC株式会社

サイトレ ポ ート

埼玉工場 環境方針 ］

2017

DIC株式会社埼玉工場は、社会の一員として、また化学物質を製造・販売する企業として、安全・環境・健康の確保が経営の基盤であることを認識し、このことを事業活動のすべてに徹底し、「持続可能な開発」の原則のもとに生物多様性を含め地球環境等に調和した技術・製品を提供し、もって社会の発展に貢献する。

埼 玉 工 場2017年度 埼玉工場長 サステナビリティ活動計画
１. 生産・研究活動において安全・衛生・健康を確保する。
２. 会社収益の向上・体質強化に貢献する。
３. 価値ある 新製品を開発、及び品質を提供する。
４. 生産・研究活動を通じ、社会からの要請や循環型社会形成に貢献する。
５. 人格主義に基づいた人材育成と組織力の向上。

DIC株式会社 埼玉工場
工場長 入間川伸一

埼玉工場〒362-8577
埼玉県北足立郡伊奈町大字小室4472-1
TEL 048（722）8211
FAX 048（722）6087
http://www.dic-global.com/(QYLURQPHQWDOSUHVHQWDWLRQIRUWKHORFDOFRPPXQLW\ 6DLWDPD3ODQW

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Chinese teas and confections.

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ESH

ESH Auditing

Basic Approach
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enhance the effectiveness of Responsible Care initiatives.
(+6DXGLWFRQGXFWHGE\',&¶V&KDLUPDQDQG&(2| Audits in Fiscal Year 2017
,Q-DSDQ5HVSRQVLEOH&DUH'HSDUWPHQWVSHFLDOLVWVKDYHDXGLWHGWKH5HVSRQVLEOH&DUHHIIRUWVRIGRPHVWLFFRQVROLGDWHGVXEVLGLDULHVVLQFH¿VFDO\HDUWRYHULI\HIIRUWVDQGVXSSRUWLPSURYHPHQWDFWLYLWLHV,Q¿VFDO\HDUDXGLWVZHUHFRQGXFWHGDW',&¶VQLQHSULQFLSOHVLWHVDQGIRXU',&*UDSKLFV¶VLWHV7KH&RPSDQ\
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Audits Conducted at Subsidiaries’ Sites(Fiscal Year 2017)

Outline of ESH Audits Implemented (Fiscal Year 2017)
Japan
DIC

DIC Graphics

9 sites

4 sites
Total

Overseas
Other DIC Group companies(follow-up assessments)

13 sites

26 sites

Greater
China

21

ROK

companies

Total

3

companies

Asia–Pacific region

16

companies(out of 21)

40 companies
DIC Report 2018

66

Sun Chemical Group

Seiko PMC Group39 sites

7 sitesESH

Occupational Safety and Health and Disaster Prevention
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ ([FHOOHQW★★ 6DWLVIDFWRU\★ = Still needs work
Objective of initiatives

Goals for fiscal year 2017

Ensure occupational safety and health.

Reduce frequency of occupational
accidents resulting in workdays lost.
DIC Group in Japan:
1.8
Asia–Pacific region:
2.2
Greater China:
2.0
Americas/Europe:
8.0(Global DIC Group:
4.57)

Achievements in fiscal year 2017

Reductions achieved:
DIC Group in Japan:
Asia–Pacific region:
Greater China:
Americas/Europe:(Global DIC Group:

2.65
1.98
1.46
6.46
3.98)

Evaluation

★
★★★
★★★
★★★

Goals for fiscal year 2018
Reduce frequency of occupational
accidents resulting in workdays lost.
DIC Group in Japan:
1.8
Asia–Pacific region:
2.2
Greater China:
2.0
Americas/Europe:
8.0(Global DIC Group:
4.56)| Occupational Safety and Health
Basic Approach
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Groupwide and in the mind of every employee.
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materials and rotating devices, including ones that do not involve chemical reactions. Any accident involving such materials or devices has theSRWHQWLDOWRVLJQL¿FDQWO\LPSDFWVRFLHW\LQJHQHUDODQGGDPDJHWKHKHDOWKRIWKH*URXSDQGSDUWQHUFRPSDQ\HPSOR\HHVDQGORFDOUHVLGHQWVWith the aim of preventing such accidents, the DIC Group places a high priority on reducing risks in the workplace by enhancing awareness ofPrinciples of Safe Conduct and training highly perceptive safety personnel. The Group strives to enhance safety through efforts to reinforce its
safety infrastructure and create a safety-oriented corporate culture.

| Framework for Promotion
The DIC Group sets individual regional occupational safety and health targets. The Responsible Care Department and regional headquarters work together to
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1

Making Regional Data Visible through Monthly Reports

The DIC Group conducts its diverse businesses in accordance with a wide range of national and regional legal systems, working environments and practices. The riskof accidents and disasters varies from one industry to another because of differences in the facilities, machinery and raw materials used. For Group companies to work
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DIC promotes the sharing of information on accidents, disasters and reporting procedures for eachregion, as well as gathered and shared statistical information related to occupational safety, including
employee numbers, working hours, number of accidents leading to workdays lost, number of accidents
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before restart of operations, occupational accident frequency rate, occupational accident severity rate,
workdays lost per thousand employees and workdays lost per million work hours. This approach makes
it possible to objectively compare the operational safety of individual Group companies, establish more
precise targets and facilitate improvement programs.
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working hours, the numbers of accidents leading to workdays lost, occupational accident frequency rates
and other monthly data for these regions, thereby further streamlining Groupwide management.

DIC Report 2018

67

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2

Reducing Risks%\XQGHUVWDQGLQJSRWHQWLDOULVNVLQSURGXFWLRQSURFHVVHVIDFLOLWLHVDQGGHYLFHVDQGWKHKD]DUGVRIFKHPLFDOVXEVWDQFHVWKH',&*URXS
systematically prepares initiatives to prevent accidents and occupational injuries. In Japan, the Group has formulated guidelines for conducting risk
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with chemical substances.
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to facilitate the methodical implementation of risk assessments in line with the policy set forth by the Ministry of Health, Labour and Welfare. Of
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3

Promoting E-Learning–Based Training for Employees

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importance of ensuring that all of its employees gain a broad understanding of chemical
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the Group introduced an e-learning program on a trial basis, structuring training around laws
and regulations pertinent to the operation of production facilities, including the Fire Service
Act, the Air Pollution Control Law and the High Pressure Gas Safety Act, and verifying theappropriateness of education materials from the perspective of Responsible Care Department
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environment and active national and regional government endorsement, and intends to
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Group will continue to adopt tailored e-learning programs with the goal of supporting efforts toenhance employee know-how and skills.
4

Portion of e-learning program

Training Skilled Safety Personnel to Predict Risks

To foster skilled safety personnel, the DIC Group provides regular safety education and training on how to handle chemical substances, usingmaterials such as Principles of Safe Conduct, Environment and Safety Guidelines for the R&D Department, safety data sheets (SDSs) and its
Occupational Accident Case Studies database. In recent years, the Group has focused especially on a technique called Kiken Yochi Training (KYT)³KD]DUGSUHGLFWLRQWUDLQLQJ´ DQGRQKDQGVRQVDIHW\WUDLQLQJIRUHPSOR\HHVRI*URXSFRPSDQLHVZRUOGZLGH7KH*URXSDOVRXQGHUWDNHVVLPLODU
initiatives at production sites. Principles of Safe Conduct has been translated into several languages, with local employees in the ROK and Malaysia
translating the document for their own use after corporate headquarters produced Chinese- and English-language versions for use throughout
Greater China and elsewhere in the Asia–Pacific region. KYT is a constructive way to further increase safety awareness. Domestic DIC GroupFRPSDQLHVXVHWKHWHFKQLTXHVH[WHQVLYHO\DQGWKH*URXSLVZRUNLQJWRDFFHOHUDWHGHSOR\PHQWDFURVV*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQ
5

Promoting Hands-On Safety Training

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IURPVLWHWRVLWH6LQFH¿VFDO\HDUWKH*URXSKDVLQVWDOOHGSHUPDQHQWWUDLQLQJHTXLSPHQWLQ-DSDQ VL[VLWHV WKH35& WKUHHVLWHV 7DLZDQMalaysia and Indonesia. Over the past few years, these and other initiatives have helped to almost halve the frequency rate of occupational
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Group seeks to transform the mindset of employees by encouraging them to think and act on their own to protect themselves and each other fromlatent risks.
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68

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Initiatives in Japan,QWKH*URXSRSHQHGWKH6DLWDPD+DQGV2Q6DIHW\7UDLQLQJ&HQWHUDIDFLOLW\ERDVWLQJHTXLSPHQWWKDWDOORZVWKHVLPXODWLRQRIDQDUUD\RIDFFLGHQWVZLWKWKHJRDORIIRVWHULQJVNLOOHGVDIHW\SHUVRQQHOE\LQFRUSRUDWLQJWUDLQLQJLQQHZHPSOR\HHDQGUDQNVSHFL¿FWUDLQLQJSURJUDPV',&¶V&KLED6DNDL+RNXULNX6DLWDPD.DVKLPDDQGRWKHUSODQWVKDYHDOVRHVWDEOLVKHGWKHLURZQKDQGVRQVDIHW\WUDLQLQJHTXLSPHQWDQG
FXUULFXODWRIXUWKHUHPEHGVDIHW\LQWRWKH',&*URXSFXOWXUH:LWKWKHDLPRIUHGXFLQJDFFLGHQWVDPRQJLQH[SHULHQFHGHPSOR\HHV*URXSFRPSDQLHVOHGE\',&DQG',&*UDSKLFVKDYHLQFOXGHGVDIHW\WUDLQLQJDQG.<7LQWKHWUDLQLQJFXUULFXODIRUQHZHPSOR\HHV,Q¿VFDO\HDUWKH*URXSGRZQVL]HGVL[W\SHVRIKDQGVRQHTXLSPHQWIRUWKHPRELOHLQLWLDWLYHDQGUDLVHGWKHVWDQGDUGVRIOHFWXUHUVKYT for new employees

Hands-on safety training: Simulating being caught in a chucking apparatus

Initiatives at Overseas Group Companies
Group companies overseas are also deploying hands-on safety training. In Greater China, hands-on safety training equipment has
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0DOD\VLD DQG,QGRQHVLD¶V37',&$675$&KHPLFDOVERWKRIZKLFKPDQXIDFWXUHFRPSRXQGVDQGLQ¿VFDO\HDUDWV\QWKHWLFUHVLQVmanufacturer Siam Chemical Industry in Thailand and printing inks manufacturer DIC India. These companies provide hands-on safety
WUDLQLQJIRUHPSOR\HHVDFURVVWKHLUUHVSHFWLYHUHJLRQVDVZHOODVHGXFDWLRQIRUVDIHW\LQVWUXFWRUV,Q¿VFDO\HDUWKHFXPXODWLYHQXPEHU
RISDUWLFLSDQWVLQKDQGVRQVDIHW\WUDLQLQJDFURVVWKHJOREDO',&*URXSVXUSDVVHG

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Hands-On Safety Training Facilities Established in Thailand and India,Q$XJXVWKDQGVRQVDIHW\WUDLQLQJHTXLSPHQWIRUVLPXODWLQJHQWDQJOHPHQWLQURWDWLQJGHYLFHVWXPEOHVIDOOVIURPKLJKSODFHVDQGRWKHUFRPPRQZRUNSODFHDFFLGHQWVZHUH
LQVWDOOHGDW6LDP&KHPLFDO,QGXVWU\¶VSODQWLQ6DPXW3UDNDQ3URYLQFHDQG',&,QGLD¶VSODQWLQ1RLGD7KHJOREDOGHSOR\PHQWRIKDQGVRQVDIHW\WUDLQLQJHTXLSPHQWLQFOXGLQJWKH
LQVWDOODWLRQRIHTXLSPHQWKDVSURFHHGHGXQGHUWKHGLUHFWLRQRI',&LQ7RN\R7KHVHIDFLOLWLHVDOVRSURYLGHWUDLQLQJWRTXDOLI\(6+RI¿FHUVDVVLJQHGWR*URXSFRPSDQLHVDFURVV
WKH$VLD±3DFL¿FUHJLRQDVKDQGVRQVDIHW\LQVWUXFWRUVWRRYHUVHHWUDLQLQJWRORFDOHPSOR\HHVZKLFKKDVXQGHUSLQQHGDVWHDG\LQFUHDVHLQDZDUHQHVVRIVDIHW\7KHLQVWDOODWLRQRIHTXLSPHQWDW6LDP&KHPLFDO,QGXVWU\DQG',&,QGLDIDFLOLWLHVPDUNVWKH¿UVWWLPHORFDO*URXSFRPSDQLHVDQGHPSOR\HHVKDYHVSHDUKHDGHGVXFKDPRYH

Employees participating in hands-on safety training at Siam Chemical Industry (left) and DIC India (center) and view of a training room

Number of Hands-On Safety Training Participants (Fiscal Year 2017)
DIC Group (Japan)
FY2017
Cumulative total(FY2012–2017)

452
8,442

DIC Group (overseas) (Greater China: 4companies; Asia–Pacific region: 2 companies)

786
3,138
DIC Report 2018

69

Total

1,238
11,580ESH

Status of Occupational Accidents

Workdays Lost Due to Occupational Accidents (FY2015–2017)

The DIC Group promotes a variety of initiatives aimed at eliminating
occupational accidents. In fiscal year 2017, the number ofoccupational accidents resulting in workdays lost across the DIC
Group was down from the fiscal year 2016 level. Looking ahead, theGroup will continue working to analyze the causes of occupational
accidents resulting in workdays lost that have occurred to date andto reflect its findings in concrete improvements with the goal of
preventing the occurrence of such accidents in the future.

DIC
Number of
workdays lost

TRIR

2015

2016

2017

2015

2016

2017

1

3

2

5

5

3

88

71

70

--

--

--

1.27 2.35 2.16 2.11 3.07 2.65 4.32 3.84 3.98

recordable injury rate (TRIR): Number of occupational accidents resulting in lost workdays + Number of occupational* Totalaccidents not resulting in lost workdays / Million work hours

Severity Rate

0.10

0.50

0.05

’
12
JCIA

’
13

’
14

’
15

’
16

Overall manufacturing industry

0.00

’
17

(FY)

Number of occupational deaths or injuries
Total work hours

’
10

’
11
DIC

’
12

’
13

JCIA

’
14

’
15

’
16

Overall manufacturing industry

’
17

(FY)

Severity rate: This expresses the number of workdays lost due to occupational accidents per
1,000 work hours.

Frequency rate: This expresses the frequency of accidents resulting in lost time in a fiscal year,
calculated as the number of deaths or injuries per million work hours.
Frequency rate ＝

2017

0.005 0.012 0.054 0.018 0.026 0.028

*

1.00

DIC

2016

Severity rate

0.15

’
11

2015

0.181 0.541 0.360 0.556 0.548 0.331 2.375 1.893 1.752

1.50

’
10

DIC Group (Global)

Frequency
rate

Frequency Rate

0.00

DIC Group (Japan)

Severity rate ＝× 1,000,000

Total number of workdays lost
Total work hours

× 1,000

A severity rate of 0.1 means 100 workdays lost in one year at a site with 500 people.

A frequency rate of 1.0 means one occupational accident resulting in workdays lost in one
year at a site with 500 people.

Safe Corporate Climate Cultivation Working Groups
Safe Corporate Climate Cultivation working groups comprise personnel in charge of safety at plants belonging to DIC and subsidiary DIC Graphics. These groups
have been active since fiscal year 2011. Members meet regularly to discuss and exchange proposals regarding safety policies and measures.
• Fiscal year 2012: Working groups presented recommendations on safety policies and produced warning stickers to enhance awareness of workplace hazards.
• Fiscal year 2013: Working groups prepared safety posters featuring the president and CEO and started reading out key passages from Principles of Safe
Conduct in workplaces with the aim of making the practices therein routine.
• Fiscal year 2014: Working groups prepared an illustrated version of Principles of Safe Conduct for reading out in workplaces.
• Fiscal year 2015: Working groups edited Principles of Safe Conduct into a tear-off calendar version for distribution at all workplaces. The calendar version wastranslated into English and Chinese.
• Fiscal year 2016: Working groups in the PRC began reading out key passages from Principles of Safe Conduct to further strengthen the DIC Group’s culture of safety.
• Fiscal year 2017: Working groups updated Principles of Safe Conduct and prepared safety posters featuring the president and CEO to be put up at Group
companies in fiscal year 2018.

Pages from the illustrated version of Principles of Safe Conduct for workplace reading circles (available inJapanese, English and Chinese)

DIC Report 201870

Qingdao DIC Finechemic als’ employees
reading out key passages

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Occupational Health
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these chemicals, the Group regularly conducts health checkups and environmental measurements, and modifies and improves working conditions as needed.
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ORQJWHUPH[SRVXUHPXVWPDLQWDLQDSSURSULDWHZRUNLQJHQYLURQPHQWVDVZHOODVVWRUHZRUNDQGKHDOWKFKHFNUHFRUGVIRU\HDUV&RPSDQLHVPXVWDOVRPDLQWDLQVWRUDJHVSDFHIRUWKHVHUHFRUGVWRPLQLPL]HWKHULVNRISDSHUEDVHGGRFXPHQWVJRLQJDVWUD\RUEHFRPLQJORVW,Q¿VFDO\HDUWKH',&*URXSLQ-DSDQEXLOWDFHQWUDOL]HGGDWDPDQDJHPHQWV\VWHPFRPSULVLQJDQLQIRUPDWLRQQHWZRUNOLQNLQJHDFKZRUNVLWHIDFLOLWDWLQJWKH
electronic recording and storage of data for each employee and the review of information by supervisors and administrators. The system ensures consistent recording
formats at each site and helps eliminate the risk of records going astray while resolving the issue of storage space.

Occupational Health and Safety for Employees of Partner Companies and Subcontractors
In Japan, the DIC Group signs outsourcing agreements with partner companies and subcontractors that have offices on its sites and contracts work out to
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safety and health-related laws and regulations. The Group has established a DIC Safety Council at each principal domestic site, enabling site safety and health
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Safety rally (Kashima Plant)

Process Safety Management
DIC calculates process safety accidents at DIC Group sites in Japan in accordance with International Council of Chemical Associations
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LQ.REH7KHRUJDQL]DWLRQJDYHKLJKPDUNVWRWKHSODQW¶VHIIRUWVWRDFKLHYH]HURRFFXSDWLRQDODFFLGHQWVE\FRQGXFWLQJULVNDVVHVVPHQWVWRLGHQWLI\DQGHOLPLQDWHRUPLQLPL]HULVNDVZHOODVWRIRVWHUKXPDQUHVRXUFHVLQFOXGLQJWKURXJKWKHSURYLVLRQRIWUDLQLQJIRUQHZDQGPLGFDUHHUKLUHV7KHFHUWL¿FDWHZDVDFFHSWHGE\
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RYHUPDQ\\HDUVWRHQKDQFHWKHSODQW¶VRFFXSDWLRQDOVDIHW\DQGKHDOWKLQLWLDWLYHV

Yokkaichi Plant Wins FDMA Commissioner’s Award,Q-XQHWKH<RNNDLFKL3ODQWLQ0LH3UHIHFWXUHUHFHLYHGDILVFDO\HDU)LUHDQG'LVDVWHU
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/RFDWHGLQWKH<RNNDLFKL,QGXVWULDO&RPSOH[WKHSODQWZKLFKFRPPHQFHGRSHUDWLRQVLQPDQXIDFWXUHVpolystyrene for use in food containers and a variety of items for daily life. The facility has for many years
LPSOHPHQWHGLQLWLDWLYHVDLPHGDWHQVXULQJWKHVDIHPDQDJHPHQWRIKD]DUGRXVPDWHULDOVDQGSURSHUVDIHW\training. These include formulating rules based on pertinent laws, conducting facility risk assessments andimplementing drills to guarantee preparedness in the event of a plant accident or major earthquake. Thanks
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Seiko PMC’s Chiba Plant Receives JCIA Safety Award Special Prize',&*URXSFRPSDQ\6HLNR30&¶V&KLED3ODQWZDVSUHVHQWHGZLWKD-&,$6DIHW\$ZDUG6SHFLDO3UL]HIRUDWWKHDQQXDOFRQYHQWLRQRIWKH-DSDQ&KHPLFDO,QGXVWU\$VVRFLDWLRQ -&,$ LQ0D\-&,$
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pointing and calling prior to starting work, the wearing of proper protective equipment, and the assessmentof chemical substance risks.

| Disaster Prevention
Basic Approach and Organization$Q\¿UHH[SORVLRQRUOHDNRIKD]DUGRXVVXEVWDQFHVIURPDFKHPLFDOVSODQWFRXOGKDYHDWUHPHQGRXVLPSDFWRQORFDOUHVLGHQWVDQGWKHUHVWRIWKHFRPPXQLW\and damage the health of employees, including those of partner companies. In addition to establishing a security management system to prevent such
accidents, the DIC Group operates and maintains its facilities in line with pertinent laws and regulations. The Group regularly conducts emergency drills andhas earthquake and other response measures in place.
',&DOVRXQGHUWDNHVULVNDVVHVVPHQWVWRHQVXUHLWVDELOLW\WRFRQVWUXFWVDIHSURGXFWLRQIDFLOLWLHV,QWKH',&*URXSIRUPXODWHGWKH',&3URFHVV
Risk Management (PRM) Guidelines*, which consist of four assessment techniques and implementation timetables for each. The Group uses these tools
WRFRQGXFWUHJXODUULVNDVVHVVPHQWVDWHDFKRILWVVLWHV7RDLGLQHIIHFWLYH%&3DQHVVHQWLDOFRPSRQHQWRIULVNPDQDJHPHQWLQ¿VFDO\HDUWKH*URXS
LGHQWL¿HGSULRULW\ULVNVDQGLPSOHPHQWHGHPHUJHQF\UHVSRQVHGULOOV* The DIC PRM Guidelines outline timetables and implementation frameworks for assessing the handling of chemical substances, production processes, production formulas, machinery and work practices withthe aim of comprehensively identifying and steadily reducing risks associated with production and R&D processes.

DIC Report 2018

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Drones Used for the Inspection of Elevated Facilities,Q¿VFDO\HDU',&FRPPHQFHGWKHXVHRIGURQHVIRUWKHLQVSHFWLRQRIVWUXFWXUHVDQGHOHYDWHGIDFLOLWLHVRQDWULDOEDVLVDWLWV7DWHED\DVKL3ODQWLQ*XQPD3UHIHFWXUHZKLFKmanufactures products such as plastic colorants (masterbatches). Inspections conducted for the purpose of facility maintenance include elevated facilities, roofs and rooftop pipes
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inspections carried out in high places. The use of drones is governed by a wide array of laws and regulations, but there are few impediments to drone use at the Tatebayashi Plant
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rust on the upper section of a facility

Drone photography of a disaster prevention drill| Facility Safety Assessment
Assessment Procedures
DIC Group production facilities have an array of equipment, ranging from units where chemical reactions are conducted to machine presses and other
SURFHVVLQJHTXLSPHQW:KHQPRGLI\LQJSURFHVVHVRUXSJUDGLQJUHSODFLQJHTXLSPHQWWKH*URXSDVVHVVHVVDIHW\DWHYHU\VWDJHIURPSURFHVVGHVLJQDQG
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educational materials to prevent static electricity accidents.
1

Accident and Disaster Analysis and Timely Information',&FROOHFWVDQGFRPSLOHVLQIRUPDWLRQRQLQWHUQDODQGH[WHUQDODFFLGHQWVGLVDVWHUVDQGSUREOHPVLQWRLWV2FFXSDWLRQDO$FFLGHQW&DVH6WXGLHVDQG$FFLGHQW
Case Studies databases. After identifying the causes of accidents or problems and establishing points to be checked, the Company incorporates database
information into safety education for DIC and DIC Group companies in Japan and overseas.
2

Initiatives to Enhance Safety Competency$FRPSDQ\¶VVDIHW\FRPSHWHQF\FDQEHGHILQHGDVLWVDELOLW\WRPDLQWDLQVDIHW\OHYHOVDWLWVYDULRXVVLWHV$VDPHDQVRIREMHFWLYHO\HYDOXDWLQJDQGHQKDQFLQJLWVVDIHW\FRPSHWHQF\LQ¿VFDO\HDU',&
introduced an assessment system that encompasses questions about safety infrastructure (technical
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culture). This system was developed by the Japan Society for Safety Engineering (JSSE) as a common
benchmark for engineers in the chemicals industry and is currently used by companies in Japan that are
members of the Safety Competency Enhancement Center.
,QILVFDO\HDUWKH6DIHW\&RPSHWHQF\(QKDQFHPHQW&HQWHUIRUPXODWHGDV\VWHPIRUHYDOXDWLQJ
SURFHVVLQJVLWHVDQGDSULRULWL]HGYHUVLRQRIWKHV\VWHPWRVWUHDPOLQHHYDOXDWLRQV,Q¿VFDO\HDUWKH
center reviewed and revamped criteria for assessing safety infrastructure and culture of safety, as a result of
ZKLFKDSSOLFDWLRQRIWKHV\VWHPKDVH[SDQGHGWRLQFOXGHQRQFKHPLFDOVLQGXVWU\FRPSDQLHV,Q¿VFDO\HDU6DIHW\&RPSHWHQF\(QKDQFHPHQW&HQWHULQVSHFWLRQVZHUHFRQGXFWHGDWWKH<RNNDLFKLDQG6DLWDPD
plants, the results of which the Company is using to implement further improvements.
3

Saitama Plant

Yokkaichi Plant

DIC Report 2018

73

ESH

Emergency Response Drills
DIC augments daily security patrols and periodic equipment checks with regular emergency response drills, especially at production sites inJapan and overseas.

&RPSUHKHQVLYH¿UHGULOODWWKH6DNDL3ODQW&RPSUHKHQVLYH¿UHGULOODWWKH7RN\R3ODQW

DIC Report 2018

74

First aid drill at the Tokyo Plant

ESH

Preventing Global Warming
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives

Goals for fiscal year 2017

DIC Group
1. Reduce CO 2 emissions 7.0% fromthe fiscal year 2013 level by fiscal
year 2020 (average annual decreaseof 1.0%).

Reduce emissions of CO 2 atsites (Scope 1 and 2).

DIC Group (Japan)
1. Reduce CO 2 emissions 7.0% fromthe fiscal year 2013 level by fiscal
year 2020 (average annual decreaseof 1.0%).
2. Reduce energy consumption per unitof production 7.0% from the fiscal
year 2013 level by fiscal year 2020
(average annual decrease of 1.0%).
(Comply with Japan’s Act on the
Rational Use of Energy)

Achievements in fiscal year 2017

Evaluation

1. CO2 emissions:
634,741 metric tonnes• Down 3.7% from fiscal year 2016 (659,378 metric tonnes)• Down 12.2% from fiscal year 2013 (722,955 metric tonnes)★★★

Reference:
CO2 emissions per unit of production:
296 kg/metric tonne• Down 4.7% from fiscal year 2016 (311 kg/metric tonne)• Down 9.5% from fiscal year 2013 (327 kg/metric tonne)

DIC Group
1. Reduce CO 2 emissions 7.0% from the fiscal
year 2013 level by fiscal year 2020 (averageannual decrease of 1.0%).
★★★

1. CO2 emissions:
244,395 metric tonnes• Up 0.9% from fiscal year 2016 (242,194 metric tonnes)• Essentially level with fiscal year 2013 (244,377 metric tonnes)★

2. Energy consumption per unit of production:
3.914 GJ/metric tonne• Down 2.4% from fiscal year 2016 (4.010 GJ/metric tonne)• Down 6.1% from fiscal year 2013 (4.170 GJ/metric tonne)★★★

Reference:
CO2 emissions per unit of production: 222 kg/metric tonne• Down 1.5% from fiscal year 2016 (225 kg/metric tonne)• Down 4.3% from fiscal year 2013 (232 kg/metric tonne)

Goals for fiscal year 2018★

DIC Group (Japan)
1. Reduce CO 2 emissions 7.0% from the fiscal
year 2013 level by fiscal year 2020 (averageannual decrease of 1.0%).
2. Reduce energy consumption per unit ofproduction 7.0% from the fiscal year 2013
level by fiscal year 2020 (average annual
decrease of 1.0%). (Comply with Japan’s
Act on the Rational Use of Energy)★

Basic Approach
Climate change, a principal cause of which is global warming, is an increasingly pressing issue for the entire world. The Intergovernmental Panel on&OLPDWH&KDQJH ,3&& WKHOHDGLQJVFLHQWL¿FERG\GHGLFDWHGWRWKHDVVHVVPHQWRIFOLPDWHFKDQJHFRQWLQXHVWRSDLQWDGLUHSLFWXUHIRUWKHIXWXUHRI
the planet as a result of climate change. At the 2015 United Nations Climate Change Conference (the 21st annual session of the Conference of theParties (COP 21) to the United Nations Framework Convention on Climate Change (UNFCCC)), participants adopted the Paris Agreement, a move
aimed at accelerating efforts to tackle this urgent challenge.
$VDPDQXIDFWXUHURI¿QHFKHPLFDOV',&UHFRJQL]HVWKDWSURPRWLQJHIIRUWVWRFXUEJOREDOZDUPLQJLVDFUXFLDOPDQDJHPHQWUHVSRQVLELOLW\7KH
Company’s medium-term sustainability policies thus include a pledge to reduce greenhouse gas emissions from its production facilities. To this
HQG',&ZLOOFRQWLQXHWDNLQJVWHSVWRUHGXFHHQHUJ\FRQVXPSWLRQDQGSURPRWHORZFDUERQHQHUJ\VRXUFHVDVZHOODVWRDFWLYHO\GLVFORVHWKHUHVXOWVRILQLWLDWLYHVDQGREWDLQWKLUGSDUW\YHUL¿FDWLRQRILWV&22HPLVVLRQVGDWD $WSUHVHQWRIWKH',&*URXS¶VVLWHV DQGRI¿FHVDQG
UHVHDUFKIDFLOLWLHV LQ-DSDQKDYHEHHQDFFRUGHG'HVLJQDWHG(QHUJ\0DQDJHPHQW)DFWRU\VWDWXV
❶ 8QGHUWDNHHQHUJ\VDYLQJLQLWLDWLYHV*URXSZLGH❷ 'HSOR\HIIHFWLYHVWUDWHJLHVWKURXJKZRUNLQJJURXSDFWLYLWLHV❸ Operate energy-saving cogeneration systems (combined heat and power generating facilities)❹ Employ energy from renewable resources (biomass, wind power and solar power) at suitable sites❺ ([WHQGHQHUJ\VDYLQJLQLWLDWLYHVWR',&*URXSFRPSDQLHVRYHUVHDV| Framework for Promotion',&DQG',&*URXSFRPSDQLHVLQ-DSDQKDYHHVWDEOLVKHG(QHUJ\6DYLQJ3URPRWLRQFRPPLWWHHVDWHDFKSURGXFWLRQDQG5 'VLWH&RPPLWWHHDFWLYLWLHVLQFOXGHFRQ¿UPLQJWKHSURJUHVVRILQLWLDWLYHVHQJDJLQJLQGLVFXVVLRQVDQGFRQGXFWLQJSDWUROV',&KDVDOVRVHWXS(QHUJ\6DYLQJZRUNLQJJURXSVFRPSULVLQJPHPEHUVFKRVHQIURPHDFKSURGXFWLRQIDFLOLW\WKDWIRVWHUVWKHH[FKDQJHRILQIRUPDWLRQUHVHDUFKSHUWDLQLQJWRQHZLWHPVDQGWKH*URXSZLGHLPSOHPHQWDWLRQRIHIIHFWLYH
PHDVXUHV7KLVFRPELQDWLRQRIVLWHDQG*URXSOHYHOLQLWLDWLYHVIRUPVWKHIUDPHZRUNXQGHUZKLFKWKH',&*URXSHQGHDYRUVWRUHGXFHLWV&22 emissions.
',&*URXSFRPSDQLHVRYHUVHDVSURPRWHDZLGHUDQJHRILQGHSHQGHQWHQHUJ\VDYLQJLQLWLDWLYHVWKDWDOLJQZLWKWKH*URXS¶VSROLF\7KH3URGXFWLRQ0DQDJHPHQW'HSDUWPHQWSURYLGHVVXSSRUWRQPXOWLSOHIURQWVLQFOXGLQJWKHGHSOR\PHQWRIPDQDJHPHQWV\VWHPVDQGWKHWUDLQLQJRIHPSOR\HHV&ULWLFDOLQLWLDWLYHVDUHGHEDWHGDQG
the progress thereof is reported on by the Sustainability Committee, which answers directly to the president and CEO.

DIC Report 2018

75

ESH

| Principal Initiatives in Fiscal Year 2017
1

Setting a Medium-Term Target for the Reduction of CO2 Emissions

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businesses, as well as to advance the use of energy from renewable sources by, among others, adopting biomass fuel, introducing solar andwind power, and purchasing low-carbon electric power.
,Q2FWREHUWKH6XVWDLQDELOLW\&RPPLWWHHVHWDPHGLXPWHUPWDUJHWIRUUHGXFLQJWKH',&*URXS¶VDEVROXWHHPLVVLRQVRI&22 by 7.0%
IURPWKH¿VFDO\HDUOHYHOE\¿VFDO\HDU7RWKLVHQGWKH*URXSKDVDGGHGSURPRWLQJWKHXVHRIHOHFWULFSRZHUJHQHUDWHGIURPrenewable energy, including by biomass boilers and solar power systems, as well as the purchase of low-carbon electric power, to core
initiatives implemented in line with this target. In its next medium-term management plan, formulation of which is currently in progress, the*URXSZLOOVHWDWDUJHWIRUEH\RQG¿VFDO\HDU

Global CO2 Emissions: Results, Forecasts and Target for Fiscal Year 2020

Forecast for Global CO2 Emissions in Fiscal Year
2020 and Anticipated Contributing Factors

Net sales(Billions of yen)

(Metric tonnes of CO2)

(Metric tonnes of CO2)

1,000,000

850,000

700,000
Forecast with energy-saving 672,000Actual results/ 635,000
initiatives implemented
target600,000
500,000

750,000-7.0%

700,000

from fiscal year 2013

51,00015,000723,000

10,00024,00016,000672,000

650,000
600,000

1,000

550,000

400,000

500,000
450,000500

13
14(Base year)

15

Consolidated net sales
CO2 emissions(No initiatives implemented)

16

17

18

19

20 (FY)(Target year)

0

CO2 emissions(Additional initiatives implemented)
Actual results/targets

Additional energy-saving
measures0

Horizontal deployment ofenergy-saving techniques

100,000

Plans for construction ofmajor facility (Japan)

400,000

Fiscal year 2013

200,000

Impact of annual
energy-saving measures

300,000

2

65,000800,000

from fiscal year 2013

Fiscal year 2020

723,000+9.0%

Increase due to expansionof operations

800,000

Forecast for CO2 emissions due to business expansion
788,000(no energy-saving initiatives implemented)

Other factors

900,000

Energy Consumption and CO2 Emissions by the Global DIC Group'HVSLWHDLQFUHDVHLQSURGXFWLRQYROXPHLQILVFDO\HDU
Principal factors in Japan
Principal factors overseas
HQHUJ\FRQVXPSWLRQE\',&*URXSFRPSDQLHVZRUOGZLGHGHFUHDVHG
Increased output of biomass boiler at the
Fuel conversion at the Karawang Plant
Kashima Plant (benefit of optimum energy mix) (replacement of 10.0% of coal with PKS)WR*-IURP*-LQ¿VFDO\HDUZKLOH
global CO2HPLVVLRQVGHFOLQHGWRPHWULFWRQQHVIURPHQHUJ\VDYLQJLQLWLDWLYHV
6WDUWXSRIELRPDVVERLOHUDW1DQWRQJ',&&RORU
PHWULFWRQQHV7KH',&*URXS¶VGLYHUVHSURGXFWSRUWIROLR
5HGXFWLRQLQ&22 emissions attributable to the )XHOFRQYHUVLRQDW',&,QGLD
purchase of low-carbon electric power
VZLWFKIURPGLHVHOWR/1*DQG/3*
encompasses printing inks, polymers, pigments, LCs, engineering
5HSODFHPHQWRIFRJHQHUDWLRQV\VWHPDWWKH
Implementationof energy-saving and carbonSODVWLFVDQGFRPSRXQGV5HFHQW\HDUVKDYHVHHQDQXSWUHQGLQWKH
Chiba Plant
UHGXFWLRQLQLWLDWLYHVE\WKH6XQ&KHPLFDO*URXSRXWSXWRIHQHUJ\LQWHQVLYH¿QHFKHPLFDOVDQGDGRZQWUHQGLQWKHRXWSXW
Start-up of solar panels at Siam Chemical
Start-up of solar power generation system atof items the production of which is comparatively energy efficient.
,QGXVWU\ JHQHUDWLQJFDSDFLW\DSSUR[N: 
WKH',&'HFRU,QF N:(August 2017)$JDLQVWWKLVEDFNGURSWKH*URXS¶VVXFFHVVLQDFKLHYLQJDUHGXFWLRQLQ
6WDUWXSRIVRODUSDQHOVDW4LQJGDR',&
the volume of CO2 emitted worldwide that exceeded its target for the
r factors
Finechemicals (generating capacity: approx. 400 kw)
year was due in large part to the decisive implementation of energy(October 2017)Othe
saving and carbon-reduction initiatives.
CO 2HPLVVLRQVSHUXQLWRISURGXFWLRQLQ¿VFDO\HDUH[SUHVVHGLQWHUPVRINLORJUDPVRI&22 per metric tonne of production, fell 4.7%, to 296.0 kg CO2 /metric
WRQQHIURPNJ&22 PHWULFWRQQHLQWKHSUHYLRXVSHULRGDGHFOLQHRIIURP¿VFDO\HDUWKH*URXS¶VFXUUHQWEDVH\HDU*RLQJIRUZDUGWKH*URXSZLOOFRQWLQXHWRWDNHVWHSVWRUHGXFHHQHUJ\FRQVXPSWLRQLQFOXGLQJSURPRWLQJWKHLQVWDOODWLRQRIHQHUJ\HI¿FLHQWHTXLSPHQWLPSURYLQJSURGXFWLRQSURFHVVHVDQG
increasing facility operating rates, as well as to further advance the use of renewable energy by shifting to clean fuels and furthering its use of solar power.
Changes in Fiscal Year 2017
Energy consumption

CO2 emissions

+1.1％

-2.9％

-3.7％

CO 2 emissions perunit of production
-4.7％

-5.9％

-11.5％-12.2％

-9.5％

+2.9％

No change

+0.9%

-1.5%

-1.0％

-1.9％

No change

-4.3%

-0.5％

-4.6％

-6.4%

-6.0%

-9.9％

-16.7％-18.4%-9.5%

Production volume

GlobalJapan
Overseas

Change from fiscal year 2016
Change from base year
 ILVFDO\HDU
Change from fiscal year 2016
Change from base year
ILVFDO\HDU
Change from fiscal year 2016
Change from base year
ILVFDO\HDU

DIC Report 2018

76

ESH

340

2,500,000

320

2,000,000

300
1,500,000

280
260

1,000,000

240
500,000

220

0

200

13

14

15

CO2 emissions per unit of production (Kg of CO2/metric tonne)

Production volume and CO2 emissions (Metric tonnes of CO2)

CO2 Emissions and CO2 Emissions per Unit of Production
Performance infiscal year 2017 (Global)

Change from fiscal year 2016

Change from fiscal year 2013

Self-assessmentof performance% change% change

Self-assessmentof performance

Production volume

1%

̶

- 6%

̶

CO2 emissions

- 4%

○

- 12%

○

CO2 emissions perunit of production

- 5%

○

- 9%

○

6HOIHYDOXDWLRQż3RVLWLYH²1$× Poor

17 (FY)

16

Production volume
Reduction of CO2 emissions (target)
Reduction of CO2 emissions perunit of production (target)

CO2 emissions
CO2 emissions per unit of production

Global CO2 Emissions in Fiscal Year 2017

CO2 Emissions in Fiscal Year 2017 by Region

Results of energy-saving initiatives implemented by the DIC Group in Fiscal Year 2017

Globalproduction
volumeEnergyconsumption+1.1％

Greater China

CO2 emissions

unit of - 2.9 ％ perproduction
4.7％

Japan

10%
Asia–Pacificregion659,37819%

634,741

metric tonnes- 3.7 ％

metric tonnes

Americasand Europe

from fiscal year 2016

Fiscal year 2016

800,000

100

32%

Fiscal year 2017

Global CO2 Emissions and Change from Base Year
(Fiscal Year 2013)(Metric tonnes of CO2)

91

91

91

88

Global CO2 Emissions per Unit of Production
and Change from Base Year (Fiscal Year 2013)（Kg of CO2/
metric tonne）

（％）
120

700,000
600,00080

500,000
400,000

20

0

0

14

15

16

17 (FY)

95

91

120（％）

300

110

250

100
90

50

70

0

60

13

14

15

16

17

(FY)

* CO2 emissions per unit of production is calculated using adjusted production
volume (parent company in Japan only).
(Notification submitted to Japan’s Ministry of Economy, Trade and Industry)

DIC Report 2018

77

-4.7%
from
fiscal year 2015

80

100

Change from base year

200,000
100,000

93

150
CO2 emissions

40

97

200

60

300,000

100

350

100

13

39%

Breakdown of
CO 2 Emissions in
Fiscal Year2017

CO2 emissions
Change from base year

ESH

Factors Contributing to the Change in CO2 Emissions by the Global DIC Group in Fiscal Year 2017
FactorChange in CO2emissions fromÀVFDO\HDU
(metric tonnes)

Change inweighting fromÀVFDO\HDU

7,253
6,850

1.1%
1.0%

5,595

0.8%

1,640
-10,812-8,507

0.2%
-1.6%
-1.3%

Increase in production volume
Increase in incineration of waste oil and waste plastics in Japan
Changes in product mix
Increase in energy consumption in Japan owing to construction of
new technical buildings
Change in CO2 emissions factor of purchased electric power overseas (fromWRPHWULFWRQQHRI&22 WKRXVDQGN:K
Impact of initiatives in Europe and the Americas to reduce energy
consumption and improve productivity,PSDFWRIWKHLQWURGXFWLRQRIUHQHZDEOHHQHUJ\E\*URXSFRPSDQLHVRYHUVHDV

Notes-DSDQ(XURSHDQGWKH$PHULFDV
$VLD±3DFLILFUHJLRQ*UHDWHU&KLQD2WKHUV'RZQ
Volume of waste incinerated was up from fiscal year 2016
(volume of waste generated declined)
Products with high energy consumption per unit of production increased
and products with low energy consumption per unit of production (including
paper strengthening agents) decreased
1REXLOGLQJDWWKH&KLED3ODQWDQG1REXLOGLQJDWWKH&HQWUDO
5HVHDUFK/DERUDWRULHV$GRSWHGSXEOLVKHGWDUJHWLQ³&2 2(PLVVLRQVIURP)XHO&RPEXVWLRQ´
DYHUDJHRIILVFDO\HDUJOREDOUHVXOWVDVHPLVVLRQVIDFWRU
Production volume rose 2.0%, while energy consumption declined 1.0%
(1) Full-scale operation commenced in fiscal year 2017 (impact: - 5,150 metric tonnes)(2) 1DQWRQJ',&&RORULQVWDOOHGZRRGFKLS±ILUHGELRPDVVERLOHU LPSDFWPHWULFWRQQHV 6LDP&KHPLFDOLQVWDOOHGVRODUSDQHOV JHQHUDWLQJFDSDFLW\DSSUR[N: (impact: -226 metric tonnes)
 4LQJGDR',&/LTXLG&U\VWDOLQVWDOOHGVRODUSDQHOV JHQHUDWLQJFDSDFLW\DSSUR[N:  LPSDFWPHWULFWRQQHV
Principal initiatives:
',&*URXSFRPSDQ\LQ,QGLDVKLIWHGWRQDWXUDOJDVDQGLPSOHPHQWHGHQHUJ\saving initiatives
',&*URXSFRPSDQLHVLQ7KDLODQG$XVWUDOLDDQG,QGRQHVLDLPSOHPHQWHGHQHUJ\saving initiatives(1) Fuel conversion in Indonesia (replacement of 10.0% of coal with PKS)
(2) 6WDUWXSRIELRPDVVERLOHUDWVXEVLGLDU\LQWKH35& RXWSXWPHWULFWRQQHVKRXU  -DQXDU\
 ,QVWDOODWLRQRIVRODUSDQHOVDWVXEVLGLDU\LQ7KDLODQG $XJXVW
(4) ,QVWDOODWLRQRIVRODUSDQHOVDWVXEVLGLDU\LQ35& JHQHUDWLQJFDSDFLW\N:  2FWREHU

-6,437-1.0%

Impact of energy-saving and productivity-improvement initiatives in
WKH$VLD±3DFL¿FUHJLRQDQG*UHDWHU&KLQD-5,165-0.8%

Increase in power generated using renewable energy at the
Kashima Plant-4,844-4,165

-0.7%
-0.6%

Increase in operation of biomass boiler and efforts to achieve an optimum energy
mix yielded benefits-2,718-0.4%

Switched to low-carbon electric power for portion of electric power purchased-1,796-1,531-24,637

-0.3%
-0.2%
-3.7%

'LGQRWDSSO\WR',&3DNLVWDQ/WG LPSDFWPHWULFWRQQHV DQGFHUWDLQRWKHUFRPSDQLHV LPSDFWPHWULFWRQQHV

Implementation of energy-saving initiatives in Japan
Purchase of low-carbon electric power in Japan (including fromexisting electric power companies with improved CO2 emissions
factor)Changes in reporting boundaries and other factors
5HSODFHPHQWFRJHQHUDWLRQIDFLOLWLHVDWWKH&KLED3ODQW
Total
3HQHUJ\VDYLQJLQLWLDWLYHVZHUHLPSOHPHQWHG

Commenced operation in January 2017 (resulted in 5.0% increase in efficiency)

Energy Consumption and CO2 Emissions by the DIC Group in Japan,Q¿VFDO\HDUSURGXFWLRQYROXPHE\WKH',&*URXSLQ-DSDQ²WKHVLWHVRSHUDWHGE\',&DQGGRPHVWLF*URXSFRPSDQLHV²URVH$OWKRXJKHQHUJ\FRQVXPSWLRQUHPDLQHGOHYHODW*-HQHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQ²WKHLQGLFDWRUVSHFL¿HGLQ-DSDQ¶V$FWRQWKH5DWLRQDO8VH
RI(QHUJ\²GHFOLQHGWR*-PHWULFWRQQHIURP*-PHWULFWRQQHLQWKHSUHYLRXV¿VFDO\HDU6LPLODUO\ZKLOH&22 emissions rose 0.9%, toPHWULFWRQQHVIURPPHWULFWRQQHVLQ¿VFDO\HDU&22 emissions per unit of production declined 1.5%, to 222.0 kg CO2 /metric tonne,
from 225.0 kg CO2 PHWULFWRQQHLQ¿VFDO\HDU&22HPLVVLRQVZHUHSXVKHGXSE\LQFUHDVHVLQWKHRXWSXWRIHQHUJ\LQWHQVLYH¿QHFKHPLFDOVDQGWKH
volume of waste incinerated. These factors were countered by higher operating rates for renewable energy facilities (biomass boiler and wind and solar
SRZHUIDFLOLWLHV DQGWKHSRVLWLYHLPSDFWRIDQDSSURSULDWHEDODQFHRIUHQHZDEOHHQHUJ\VRXUFHVLQFOXGLQJDN:±FDSDFLW\FRJHQHUDWLRQV\VWHPDWWKH
.DVKLPD3ODQW2WKHUFDXVHVLQFOXGHGWKHUHSODFHPHQWRIWKH&KLED3ODQW¶VFRJHQHUDWLRQV\VWHPZLWKDQHZV\VWHPZLWKDJHQHUDWLQJFDSDFLW\RIN:
DQGPHWULFWRQQHVRIVWHDPKRXUDQGWKHLPSOHPHQWDWLRQRIHQHUJ\VDYLQJLQLWLDWLYHVDWSURGXFWLRQVLWHVZKLFKXQGHUSLQQHGLPSURYHPHQWVLQERWK
energy consumption per unit of production and CO2 emissions per unit of production.
5HJDUGLQJ&22HPLVVLRQVLQWKHVXSSO\FKDLQ',&UHSRUWVGDWDIRUVL[RIWKHFDWHJRULHVRI6FRSH LQFOXGLQJ³FDSLWDOJRRGV´³ZDVWHJHQHUDWHGLQRSHUDWLRQV´DQG³EXVLQHVVWUDYHO´7KLUGSDUW\YHUL¿FDWLRQLVREWDLQHGIRU³ZDVWHJHQHUDWHGLQRSHUDWLRQV´6FRSHHPLVVLRQVDUHLQGLUHFWHPLVVLRQVIURPSURGXFWLRQWUDQVSRUWVKLSPHQWFRPPXWLQJDQGRWKHUDFWLYLWLHVLQWKHVXSSO\FKDLQDIC Group in Japan
CO2 Emissions by the DIC Groupin Japan and Change from Base Year
(Fiscal Year 2013)

Energy Consumption Per Unit of Production by the
DIC Group in Japan and Change from Base Year
(Fiscal Year 2013)+0.9%
from fiscal year
2016

(Metric tonnes of CO2)

(Kiloliters of crude
oil equivalent)

350,000

100

104

103

99

100

from fiscal year2016
120（％）

100

5400,000

-2.4%

99
89

96

94

100

120（％）
480

100

300,000
250,000

80

200,000

60

3

60

2

40

1

20

150,000
40
100,000
20

50,0000

CO2 emissions

14

15

16

17

0

0

0

13

13

(FY)

14

15

Energy consumption per unit of production

Change from base year

DIC Report 2018

78

16
Change from base year

17

(FY)

ESH

Changes in CO2 Emissions in the Supply Chain(Metric tonnes of CO2)
200,000

Capital goods
150,000

Fuel and energy activities not included in Scope 1 and 2
Upstream transportation and distribution
Waste from businesses
Business travel

100,000

Employee commutes

50,000

0

12

13

14

15

16

(FY)

17

Factors Contributing to the Change in CO2 Emissions by the DIC Group in Japan in Fiscal Year 2017
FactorChange in CO2 emissions
IURPILVFDO\HDU
(metric tonnes)

Change in weighting
IURPILVFDO\HDU

Notes

Increase in incineration of waste oil and waste plastics

6,850

2.8%

Volume of waste incinerated was up from fiscal year 2016 (volume of waste
generated declined)

Increase in production volume

4,917

2.0%

-DSDQ ',&',&*URXSFRPSDQLHV

Changes in product mix

1,865

0.8%

Products with high energy consumption per unit of production increased
and products with low energy consumption per unit of production (including
paper strengthening agents) decreased

Increase in energy consumption in Japan owing toconstruction of new technical building

1,640

0.7%

1REXLOGLQJDWWKH&KLED3ODQWDQG1REXLOGLQJDWWKH&HQWUDO5HVHDUFKLaboratories

Increase in power generated using renewable energy at the
Kashima Plant-4,844-2.0%

Operation of biomass boiler increased and an optimum mix with otherenergy sources was achieved

Implementation of energy-saving initiatives in Japan

-4,165-1.7%

HQHUJ\VDYLQJLQLWLDWLYHVZHUHLPSOHPHQWHG

Purchase of low-carbon electric power (including from existing
electric power companies with improved CO2 emissions factor)-2,118-0.9%

Switched to low-carbon electric power for portion of electric powerpurchased

5HSODFHPHQWFRJHQHUDWLRQIDFLOLWLHVDWWKH&KLED3ODQW-1,531-0.6%

Commenced operation in January 2017 (resulted in 5.0% increasein efficiency)

-412

-0.2%

2,201

0.9%

Other factors
Total

4

Energy-Saving Initiatives by the DIC Group in Japan',&*URXSVLWHV SODQWVDQG5 'IDFLOLWLHV LQ-DSDQHQGHDYRUWRFRQVHUYHHQHUJ\E\SURPRWLQJWKHIROORZLQJLQLWLDWLYHVZKLFKWDUJHWWKHUHGXFWLRQRIEDVHORDGHQHUJ\FRQVXPSWLRQDQGE\DSSO\LQJWKH3'&$F\FOHWRLPSURYHWKHHIILFLHQF\RISURGXFWLRQPHWKRGV²WKHUHE\UHGXFLQJHQHUJ\XVHG²DQGVKRUWHQSURFHVVWLPHV,Q¿VFDO\HDUVLWHVDOVREHJDQSURPRWLQJFDUERQUHGXFWLRQLQLWLDWLYHV
• Employed highly eﬃcient lighting and air conditioning measures to eliminate waste• Introduced energy-saving controls on pumps and blowers• Actively promoted the use of energy from renewable sources, including solar
power and power generated by biomass boilers, at suitable sites• Used more eﬃcient compressors and implemented measures to reduce pressure losses • Actively promoted the use of energy from low-carbon sources at suitable sites• Increased power generated using renewable energy at the Kashima Plant• Implemented measures to improve the power factors of electric equipment• Adopted high coeﬃcient of performance (COP) chillers and promoted measures to • Implemented 586 energy-saving initiatives at domestic production sites• Purchased low-carbon power (including from existing electric power
prevent cold and hot water supply wastecompanies with improved CO2 emissions factors)• Reduced use of boiler fuel, among others, through the recovery of waste heat
• Ensured appropriate warming times and temperatures for raw materials• Replaced cogeneration facilities at the Chiba Plant

,Q¿VFDO\HDUWKHVHLQLWLDWLYHVUHGXFHGHQHUJ\FRQVXPSWLRQE\DSSUR[LPDWHO\*-7KLVFRUUHVSRQGVWRDSSUR[LPDWHO\OLWHUGUXPVRIFUXGH
RLORURIWRWDOHQHUJ\FRQVXPHGE\WKH',&*URXSLQ-DSDQGXULQJWKHSHULRG
*RLQJIRUZDUGWKH*URXSZLOOFRQWLQXHZRUNLQJWRUHGXFHLWVFRQVXPSWLRQRIHQHUJ\and also share best practices among sites with the aim of discovering new themes.
,QDGGLWLRQWKH*URXSZLOOUHLQIRUFHRSHUDWLQJPDQXDOVIRUNH\HQHUJ\FRQVXPLQJHTXLSPHQWLQFOXGLQJERLOHUVFKLOOHUVDQGFRPSUHVVRUVWRRSWLPL]HSHUIRUPDQFHDV
well as expand the deployment of initiatives developed in Japan at overseas sites.

DIC Report 201879

HQHUJ\VDYLQJLQLWLDWLYHVDFFRXQWHGIRUDUHGXFWLRQLQ
energy consumption equivalent to approx. 30,000 200-liter
drums of crude oil

LQLWLDWLYHV
5HGXFWLRQLQ
energyconsumption

Equivalent to

30,000approx.

200-liter drums of crude oil

ESH.H\',&*URXS(QHUJ\6DYLQJ,QLWLDWLYHVLQ-DSDQLQ)LVFDO<HDU 7RWDO1XPEHURI,QLWLDWLYHV,PSOHPHQWHGProduction facility

Reduction in annual
energy consumption(GJ)

Energy-saving initiative

Chiba Plant

5HGXFHGDPRXQWRIVWHDPXVHGE\LPSURYLQJEDVHORDGRISRO\PHUSURGXFWLRQOLQH

Chiba Plant

Changed heating method for glycerin (raw material) tanks

Chiba Plant

5HGXFHGHQHUJ\XVHGE\UHSODFLQJVXEVWDQGDUGVWHDPWUDSV DIWHUDQDO\VLVRIWUDSVChiba Plant

5HSODFHGZDWHUDQGKHDWLQJPHGLXPSXPSVQHZSXPSVVWRSZKHQUHDFWLRQFHDVHV

Chiba Plant

6ZLWFKHGWR/('OLJKWLQJ

Chiba Plant

Other energy-saving initiatives at the Chiba Plant

Kashima Plant

Kashima Plant

Implemented initiatives aimed at reducing energy intensity of production processes for pigments
Implemented initiatives aimed at reducing energy intensity of production processes forfunctional products/additives
5HGXFHGKHDWXVHGE\LPSURYLQJGHK\GUDWLRQZDVKLQJDQGKHDWWUHDWPHQWSURFHVVHVIRU
engineering plastics
5HGXFHGSRZHUDQGVWHDPORVVHVLPSURYHGRSHUDWLRQRIPL[HUXVHGLQZDVWHZDWHUWUHDWPHQW
DQGVZLWFKHGWR/('OLJKWLQJ
Other energy-saving initiatives at the Kashima Plant

Sakai Plant

Installed heater box

Sakai Plant

Sakai Plant

Adjusted amount of water used in hot water washing
5HGXFHGHOHFWULFSRZHUFRQVXPSWLRQE\LQVWDOOLQJV\VWHPVIRULPSURYLQJWKHHIILFLHQF\RI
SRZHUXVHRQ%DQG'VXEVWDWLRQV
5HGXFHGIXHOFRQVXPSWLRQE\LPSURYLQJGU\QHVVRIVWHDPLQIOXHERLOHU

Sakai Plant

Upgraded from gas turbine to EHP air conditioning system in technical building

Sakai Plant

Other energy-saving initiatives at the Sakai Plant

Hokuriku Plant

Hokuriku Plant

5HGXFHGEDVHORDGGXULQJSURGXFWLRQRQ6+SURGXFWLRQIORRU
0RGLILHGRSHUDWLRQRIFLUFXODWLRQSXPSVDQGVWHDPWUDSVDQGLPSOHPHQWHGRWKHULQLWLDWLYHVRQ
J production floor
Shortened production processes, improved heating chamber and implemented other initiatives
on E production floor,PSURYHGVWHDPWUDSVDQGVZLWFKHGWR/('OLJKWLQJDPRQJRWKHUVRQ*/0SURGXFWLRQIORRU

Hokuriku Plant

Improved operation of wastewater mixer and well pump, and replaced transformer on utility floor

Kashima Plant
Kashima Plant
Kashima Plant

Sakai Plant

Hokuriku Plant
Hokuriku Plant

Yokkaichi Plant

Switched to E-series FCP centrifugal pump

Yokkaichi Plant

Switched to use of a single brining refrigerator

Yokkaichi Plant

6WDQGDUGL]HGZDVWHKHDWUHFRYHU\PHWKRG

Yokkaichi Plant

Komaki Plant

5HGXFHGVWHDPORVVDPRQJRWKHUVE\LQVWDOOLQJOLQHYDOYHV
5HGXFHGHQHUJ\FRQVXPSWLRQDPRQJRWKHUVE\UHYDPSLQJZRUNVFKHGXOHVIRU',&*UDSKLFV¶
employees
5HYLVHGPDLQWHQDQFHRIKHDWHUWHPSHUDWXUHVIRUH[WUXGHUVDQGGU\LQJFRQGLWLRQVDPRQJ
others, for SC production
5HGXFHGHOHFWULFSRZHUFRQVXPSWLRQE\VZLWFKLQJWR/('OLJKWLQJDPRQJRWKHUV

Komaki Plant

Other energy-saving initiatives at the Komaki Plant

Tatebayashi Plant

5HGXFHGEDVHORDGDPRQJRWKHUVE\UHSODFLQJFRPSUHVVRUVKomaki Plant
Komaki Plant

Tatebayashi Plant

5HGXFHGHOHFWULFSRZHUFRQVXPSWLRQE\VZLWFKLQJWR/('OLJKWLQJDPRQJRWKHUVTatebayashi Plant

Implemented initiatives to reduce energy consumed by SC production processes

Tatebayashi Plant

Other energy-saving initiatives at the Tatebayashi Plant

Tokyo Plant

5HGXFHGHOHFWULFSRZHUFRQVXPSWLRQE\VZLWFKLQJWR/('OLJKWLQJDPRQJRWKHUVTokyo Plant

Other energy-saving initiatives at the Tokyo Plant*XQPD3ODQW'LVFRQQHFWHGXQQHHGHGSRZHUVRXUFHIRUFRQWUROSDQHOV (SODQW*XQPD3ODQW

0RGLILHGSURFHGXUHVIRURSHUDWLRQRIQLWURJHQJHQHUDWRU 'SODQW*XQPD3ODQW

5HSODFHGFRPSUHVVRUV 'SODQW

Utsunomiya Plant

Shortened operating times for air compressors and introduced inverters

Utsunomiya Plant

Utsunomiya Plant

Shortened operating times for cooling water, cold water and hot water pumps
5HSODFHGFKLOOHUVWXUQHGRIDLUIDQVIRURXWGRRUZDUHKRXVHVDQGLPSOHPHQWHGRWKHUPHDVXUHVWRUDWLRQDOL]HSURGXFWLRQ
5DWLRQDOL]HGSURGXFWLRQE\LQWURGXFLQJUROOOHVVIRUPLQJ

Utsunomiya Plant

6ZLWFKHGIURPQRQH[SORVLRQSURRIPHUFXU\OLJKWLQJWR/('OLJKWLQJLQSULQWLQJLQNVSURGXFWLRQDUHDV

Utsunomiya Plant

Kansai Plant

5HGXFHGHOHFWULFSRZHUFRQVXPSWLRQE\VZLWFKLQJWR/('OLJKWLQJDPRQJRWKHUV

Kansai Plant

Promoted energy-saving measures at the Kansai Plant and elsewhere
0RGLILHGSURGXFWLRQSURFHVVHVVZLWFKHGWR/('OLJKWLQJDQGUHSODFHGREVROHWHHTXLSPHQW
with energy-efficient models

Others7RWDOIRULQLWLDWLYHVDIC Report 2018

80

Reduction in
CO2 emissions(metric tonnes)

883
670
798
3,172
1,126
10,744
1,535

53
40
48
155
55
548
78

695

35

6,488

327

772

39

186
699
467

10
37
24

1, 240

65

1,194
4,908
3,833
941

63
257
200
52

1,482

91

511

31

504
991
397
1,159
278
504

32
63
20
59
14
25

580

28

3,161

155

476
705
661
355
870
680
875
385
3,061
308
951
1,025
3,501

23
34
34
18
45
35
45
20
154
16
48
55
193

2,469

141

1,210
1,395
522
489

70
72
27
25

8,912

506

78,768

4,165

ESH

Improving Yields by Expanding Use of System to Enhance the Visibility of Energy Consumption:LWKWKHDLPRIRSWLPL]LQJHQHUJ\XVHRQDQLQGLYLGXDOIDFLOLW\EDVLV',&GHYHORSHGDV\VWHPWKDWPHDVXUHVPRQLWRUVDQGYHUL¿HVZDVWHDQGLUUHJXODULWLHVLQXVHLQUHDOWLPHWKHUHE\HQKDQFLQJWKH
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DWWKH.RPDNL3ODQW,QDGGLWLRQDV\VWHPWRHQKDQFHYLVLELOLW\WKDWDOVRDQDO\]HVHQHUJ\FRQVXPSWLRQGXULQJGLIIHUHQWSURGXFWLRQSURFHVVHVZDVLQVWDOOHGRQWKH9&DQG%SURGXFWLRQÀRRUVRIWKH&KLED.DVKLPDDQG6DNDLSODQWVUHVSHFWLYHO\WRUHSURGXFHRSWLPXP\LHOGVIRUPDWHULDOVLQSXWV,Q¿VFDO\HDU',&LQVWDOOHGDPRUHDGYDQFHGYHUVLRQRIWKHV\VWHPDWWKH<RNNDLFKL3ODQWReducing Energy Consumption and Enhancing Product Quality through Kaizen Skill Improvement Training+DYLQJUHFRJQL]HGWKDWHQKDQFLQJWKHDZDUHQHVVRIHPSOR\HHVLQSURGXFWLRQDQGSURYLGLQJWKHP
with the tools to continuously improve their work are crucial to strengthening front-line capabilities,
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structured around four themes, namely, reducing energy consumption, increasing yields, enhancing
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resolve issues on their own initiative. Participants spend one year participating in initiatives aimed
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and executives.
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leadership and educational skills necessary to serve as instructors for the program. As of the end
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FRPSOHWHG.DL]HQWUDLQLQJZLWKDSSUR[LPDWHO\RURQHLQVHYHQVXEVHTXHQWO\JRLQJRQWRHDUQ
accreditation as program instructors, adding momentum to energy-saving and other initiatives.

T

PIC

Number of Employees Completing Kaizen Training(Cumulative)
Kaizen Initiative Instructor Training (Cumulative) program
Kaizen Skill Improvement Training (Cumulative) program(Employees)

450
400
350
300

55
40
23

14

250

31
301

328

357

384

271

242

200

206

150

160

100
50

66

A cumulative total of 384 employees havecompleted the Kaizen Skill Improvement
Training program,with 66 going on tocomplete the Kaizen Initiative Instructor
program since launch.

114

02009 2010 2011 2012 2013 2014 2015 2016 2017 (FY)a

Horizontal Deployment and Further Strengthening of Energy-Saving Promotion Working Groups,Q-DSDQOHDGHUVRIGRPHVWLFVLWH8WLOLW\&RQWURO*URXSVZKLFKRYHUVHHHQHUJ\DQGZDWHUVXSSOLHVDQGZDVWHZDWHUWUHDWPHQWKROGTXDUWHUO\8WLOLW\&RQWURO/LDLVRQ:RUNLQJ*URXSFRQIHUHQFHV$FHQWUDOIRFXVRIFRQIHUHQFHVLV(QHUJ\6DYLQJ3URPRWLRQZRUNLQJJURXSV+HUH8WLOLW\&RQWURO*URXSPDQDJHUVDUHMRLQHGE\UHSUHVHQWDWLYHVRIWKH3URGXFWLRQ0DQDJHPHQW'HSDUWPHQWZKRDUHFXUUHQWO\DVVLVWLQJZLWKHIIRUWVWRSUHSDUHDPDQXDORXWOLQLQJNH\HQHUJ\VDYLQJPHDVXUHVcompile best practice case studies, discover and test new methods for reducing energy consumption, consider the use of renewable energy as a way to reducecarbon, and conduct energy-saving analyses at sites nationwide.
7KH(QHUJ\6DYLQJ3URPRWLRQ0DQXDOVHWVIRUWKPHDVXUHVIRUDPRQJRWKHUVHQKDQFLQJWKHYLVLELOLW\RIHQHUJ\FRQVXPSWLRQWKHIUDPHZRUNIRUSURPRWLQJ
energy-saving initiatives, procedures for formulating energy-saving plans, creating energy management standards, approaches to benchmarks for gauging energy
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measures and follow up on results. Efforts to formulate proposals are not limited to individuals directly responsible, but also include pertinent department and
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Utility Control Liaison Working Group Initiatives for Fiscal Year 2018
Responses to global
warming

3URPRWHHQHUJ\VDYLQJLQLWLDWLYHVDQGORZFDUERQL]DWLRQ

Energy-Saving Promotion working groups

Maintenance ofpower facilities

5HGXFHSUREOHPVZLWKSRZHUIDFLOLWLHVDQGLQFUHDVHLQYHVWPHQWHIILFLHQF\
5HGXFHSUREOHPVZLWKHOHFWULFHTXLSPHQWDQGIRVWHUDQHZJHQHUDWLRQRIH[SHUWV
Implement measures to increase the stability of wastewater treatment

3RZHU)DFLOLW\:RUNLQJ*URXS(OHFWULF7HFKQRORJ\:RUNLQJ*URXS:DVWHZDWHU7UHDWPHQW:RUNLQJ*URXSResponses toenvironmental risks(QVXUHDFFXUDWHJUDVSRIDLUDQGZDWHUTXDOLW\
Create framework for ensuring the swift start-up of utilities (BCP)(QYLURQPHQWDO5LVN3URMHFW

Cost reductions

Lower utilities costs and the cost of consumables and intermediate materials&RVW5HGXFWLRQProject

DIC Report 2018

81

ESH

Framework for Promoting Energy-Saving and Carbon-Reduction Initiatives (Japan)
Energy management coordinator(Managing Executive Officer/General Manager,
Production Management Unit)
Energy management planning officer(Production Management Department)Groupwide energy-saving initiatives

19 sites belonging to DIC Group companies
Energy manager (environment and safety)

Utility Control Liaison working groups(Members: DIC and DIC Graphics
Utility Control Group managers)(QHUJ\6DYLQJ3URPRWLRQ:RUNLQJ*URXSEnergy-Saving Promotion
working groups (Site-appointed)
Offices/small-scale R&D facilities (21)Energy manager (General affairs)
DIC corporate headquarters【Tenants】
General manager and managers,
General Affairs and HR Department
General manager and managers,
Production Management Department【Owner】
・Nissei Real-Estate Co., Ltd. (manager in charge)【Building management company】
・Nissei Real-Estate Co., Ltd. (manager in charge)

Chairperson, Site Energy-Saving
Promotion Committee

Secretariat and members (site-appointed)

General manager, Chiba Plant

Energy-Saving Promotion Committee

General manager, Kashima Plant

Energy-Saving Promotion Committee

General manager, Sakai Plant

Energy-Saving Promotion Committee

General manager, Hokuriku Plant

Energy-Saving Promotion Committee

General manager, Yokkaichi Plant

Energy-Saving Promotion Committee

General manager, Saitama Plant

Energy-Saving Promotion Committee

General manager, Komaki Plant

Energy-Saving Promotion Committee

General manager, Tatebayashi Plant

Energy-Saving Promotion Committee

General manager, Central Research Laboratories

Energy-Saving Promotion Committee

Four DIC Graphics’ plants(Tokyo, Gunma, Utsunomiya and Kansai)

Site energy-saving
promotion committees(QHUJ\6DYLQJ3URPRWLRQ0DQXDO【Energy-Saving Analysis and Response】【Energy-Saving Analysis】

Thermal Imaging Leak Detection and Elimination of
Heat Loss

Enhancing the Visibility of Strengths/Weaknesses andFormulating Proposals for Remedial Measures%RLOHUVWHDPYDOYHVDQGRWKHUILWWLQJVDUHRIWHQQRWLQVXODWHGDVDFRQVHTXHQFH
RIZKLFKKHDWHVFDSHV',&XVHGLQIUDUHGHQHUJ\ WKHUPDO LPDJLQJWRDFFXUDWHO\locate leaks and made use of removable insulating jackets to prevent the loss ofheat energy.

:RUNLQJ JURXS WHDPV ZHUH GLVSDWFKHG WR VLWHV WR FRQGXFW HQHUJ\VDYLQJ
analyses and findings were plotted on radar charts to enhance visibility and
SURYLGH KLQWV IRU UHPHGLDO PHDVXUHV :RUNLQJ JURXS PHPEHUV IRUPXODWH
proposals tailored to site needs, based on which remedial measures are
implemented, many of which are later selected as best practice case studies
DQGGHSOR\HG*URXSZLGH

Analysis results

Proposal for remedial measures

VOICE Actions that are a matter of course at one facility can be advanced techniques suitable for deployment at another.
In visiting various production facilities to conduct energy-saving analyses, I have found that actions that are a matter of course at onesite may be unheard of at other facilities. The purpose of energy-saving analysis activities is not to find fault, but rather to discover new
LGHDVDQGJDWKHUKLQWV,YLHZWKHPDVWUHDVXUHKXQWV7KHKRUL]RQWDOGHSOR\PHQWRIVXFKDFWLRQVFDQKHOSUHGXFHHQHUJ\FRQVXPSWLRQFRVWVDQGULVNVVRWKHPRWLYDWLRQIRUZRUNLQJJURXSPHPEHUVLVKLJK(DFKRIRXUSURGXFWLRQIDFLOLWLHVKDVD8WLOLW\&RQWURO*URXSZKLFKLVUHVSRQVLEOHIRUHQHUJ\PDQDJHPHQW:KLOHLQIOXHQWLDOWKHVHHQWLWLHVKDYHWUDGLWLRQDOO\EHHQVRPHZKDWXQGHUDSSUHFLDWHG+RZHYHUWKDQNVWRWKHHIIRUWVRIWKH(QHUJ\6DYLQJ3URPRWLRQZRUNLQJJURXSVWKHSUHVHQFHRI8WLOLW\&RQWUROJURXSVKDVLQFUHDVHGDFURVVWKH*URXS,DP
confident that their efforts will also contribute to efforts to curb global warming at overseas production facilities in the years ahead.
Energy Manager, Production Management Department Satoshi Abe

DIC Report 2018

82

ESH

5

Reducing Fossil Fuel Use By Promoting the Introduction of Renewable Energy

0RVWRIWKHHQHUJ\IURPUHQHZDEOHVRXUFHVXVHGE\',&*URXSFRPSDQLHVLQ-DSDQLVQDWXUDOHQHUJ\JHQHUDWHGXVLQJDELRPDVVERLOHUDQG
ZLQGDQGVRODUSRZHUIDFLOLWLHVDWWKH.DVKLPD3ODQW,Q¿VFDO\HDUVXFKHQHUJ\UHSUHVHQWHGRIWRWDOHQHUJ\ VWHDPDQGHOHFWULF
SRZHU FRQVXPSWLRQE\WKHVHFRPSDQLHVDPRXQWLQJWR*- HTXLYDOHQWWRNORIFUXGHRLO DQLQFUHDVHRIIURP¿VFDO
year 2016. The increase in renewable energy from the previous year was attributable to the stable operation of the Kashima Plant’s biomass
boiler and the success of efforts to achieve an optimal mix of power sources (biomass boiler, wind power, solar power, a cogeneration system
DQGSXUFKDVHGHOHFWULFSRZHU *RLQJIRUZDUGWKH*URXSZLOOFRQWLQXHWRDFWLYHO\SURPRWHWKHXVHRIUHQHZDEOHHQHUJ\DVDQHIIHFWLYHZD\WR
reduce its CO2 emissions.

DIC Group in Japan

Biomass boiler
ZRRGFKLS±ILUHG:LQGSRZHU

Solar power

Up to and including fiscal year 2017

Started up in fiscal year 2018

Hokuriku Plant
Kashima Plant
・ 6WHDPJHQHUDWHG0D[LPXP
・ 6WHDPJHQHUDWHGPD[LPXPPHWULFWRQQHVKRXU
metric tonnes/hour
・ Approximately half of steam generated used in
production processes
・ All steam generated used in
production processes
・ 5HPDLQGHURIVWHDPJHQHUDWHGXVHGWRSRZHUWXUELQH
generating electric power for internal use
・ No electric power generating function・ (OHFWULFSRZHUSURGXFHGN:・ &RPPHQFHGRSHUDWLRQLQ-DQXDU\
Kashima Plant
・ *HQHUDWLQJFDSDFLW\N:・ )DFLOLW\7ZRN:±FDSDFLW\ZLQGWXUELQHV
Kashima Plant
・ *HQHUDWLQJFDSDFLW\N:',&'HFRU,QF
・*HQHUDWLQJFDSDFLW\N:

Energy Used by the DIC Group (Japan)(Thousands of GJ)
5,000

4,000

3,000

2,000

̶
1,000

Kashima Plant
・ *HQHUDWLQJFDSDFLW\N:

0・ Number of panels: HDFK:・ Commenced operation in-1,000-DQXDU\

Boosting Renewable Energy to 10.3% of Total Energy Consumption in Japan,Q-DSDQWKH',&*URXSDFWLYHO\SURPRWHVWKHXVHRIHQHUJ\IURPUHQHZDEOHVRXUFHVDWVXLWDEOHVLWHV
7KHELRPDVVERLOHUDWWKH.DVKLPD3ODQW JHQHUDWLQJFDSDFLW\N:DQGPHWULFWRQQHVRI
VWHDPKRXU FRQWULEXWHVVLJQL¿FDQWO\WRWKLVHIIRUW',&IRFXVHVRQLPSURYLQJWKHTXDOLW\RIZRRGFKLSVXVHGDVERLOHUIXHOZKLFKLQÀXHQFHVRSHUDWLQJUDWHVDVZHOODVRQHQKDQFLQJPDLQWHQDQFHSURFHGXUHV
By combining this boiler with two wind power generation facilities (each with a generating capacity ofN: DQGDVRODUSRZHUJHQHUDWLRQV\VWHP N: WKH*URXSDLPVWRDFKLHYHDQRSWLPDOSRZHU
mix of purchased electric power, electric power produced through cogeneration systems and electric
SRZHUJHQHUDWHGXVLQJUHQHZDEOHHQHUJ\7KDQNVWRWKHVHDQGRWKHUHIIRUWVLQ¿VFDO\HDU',&*URXSFRPSDQLHVLQ-DSDQXVHG*-RIHQHUJ\IURPUHQHZDEOHVRXUFHVDFFRXQWLQJIRU
RIWRWDOHQHUJ\FRQVXPSWLRQE\WKHVHFRPSDQLHV$VDFRQVHTXHQFHWKHSRVLWLYHLPSDFWRIWKHXVHRI
UHQHZDEOHHQHUJ\ZDVPHWULFWRQQHV
$WWKH.DVKLPD3ODQW',&FRPPHQFHGRSHUDWLRQRIDQHZO\LQVWDOOHGPHJDVRODUSRZHUV\VWHPZLWKDJHQHUDWLQJFDSDFLW\RIN: FRPSULVLQJZDWWVRODUSDQHOVZLWKDVXUIDFHDUHDRIP2 LQ-DQXDU\7KHVDPHPRQWKFHUWDLQOLTXH¿HGQDWXUDOJDV /1* ERLOHUVDWWKH
Hokuriku Plant, which produces synthetic resins, were replaced with a wood chip biomass boiler. As a
FRQVHTXHQFHWKHSODQW¶V&22HPLVVLRQVLQ¿VFDO\HDUZHUHGRZQDSSUR[LPDWHO\IURPWKH
previous period.
In fiscal year 2017, electric power generated in Japan using cogeneration systems and other
LQGHSHQGHQWPHDQVDPRXQWHGWRN:DQLQFUHDVHRIIURPILVFDO\HDU
UHSUHVHQWLQJRIWRWDOHQHUJ\FRQVXPHGE\WKH',&*URXSLQ-DSDQ7KH*URXSDOVRHPEDUNHG
on a review of the electric power companies from which it purchases electric power and is taking steps
WRSURPRWHWKHSURFXUHPHQWRIJUHHQHQHUJ\E\SULRULWL]LQJFRPSDQLHVWKDWVXSSO\SRZHUZLWKDORZ
CO2 emissions factor.

DIC Report 2018

83

2013

2014

2015

2016

Electric power generatedusing renewable energy

Steam generated using
renewable energy

Fossil fuels

Purchased thermal energy(steam and cold/hot water)

Purchased electric power

Coal

2017

Natural gas

CO2 Emission Reductions at the Kashima Plant(January–December 2017)
Reduction attributable to use ofwood biomass energy

metric-28,398 tonnesof CO 2

Reduction attributable touse of wind power

Reduction attributable touse of solar power-2,316 -77
metrictonnesof CO 2

metrictonnesof CO 2

ResultReduction in CO2 emissions(January– December 2017)-30,791metric tonnesof CO2(FY)ESH

0HJDVRODUDQGZLQGSRZHUV\VWHPVDWWKH.DVKLPD3ODQW

6Biomass boiler

Independent Electric Power Generation through Cogeneration and the Use of Renewable Energy
Increased to 23.0% of Total Energy Consumption in Japan:LWKWKHDLPRILQFUHDVLQJHQHUJ\HIILFLHQF\DQGDVDSUHFDXWLRQDJDLQVWQDWXUDOGLVDVWHUVWKH',&*URXSLQ-DSDQLVDGYDQFLQJWKH
systematic adoption of cogeneration and the use of renewable energy, that is, energy from sources that are naturally replenished.
Cogeneration systems burn fuel to drive turbines, facilitating the production of electric power and the recovery and reuse of waste heat (steam
DQGKRWZDWHU WKHUHE\LPSURYLQJHQHUJ\HI¿FLHQF\:LWKFRJHQHUDWLRQV\VWHPVDOUHDG\LQRSHUDWLRQDWWKUHHGRPHVWLFSODQWV &KLED6DLWDPDDQG*XQPD LQ',&LQVWDOOHGDQDWXUDOJDVWXUELQH±SRZHUHGFRJHQHUDWLRQV\VWHPZLWKDJHQHUDWLQJFDSDFLW\RIN:DWLWV.DVKLPD3ODQW,Q$SULO',&UHSODFHGWKHH[LVWLQJ
FRJHQHUDWLRQV\VWHPDWWKH&KLED3ODQWZKLFKKDGDJHQHUDWLQJFDSDFLW\RIN:ZLWKDQHZKLJKHI¿FLHQF\N:± FDSDFLW\V\VWHP
WKHUHE\UHDOL]LQJDYROXPHRILQGHSHQGHQWO\JHQHUDWHGSRZHULGHDOO\VXLWHGWRFXUUHQWQHHGVDQGUHGXFLQJHQHUJ\FRQVXPSWLRQWKDQNVWRDQ
HVWLPDWHGLQFUHDVHLQHI¿FLHQF\$VDFRQVHTXHQFHWKHPD[LPXPJHQHUDWLQJFDSDFLW\RIWKH*URXS¶VFRJHQHUDWLRQV\VWHPVLQ-DSDQZDVN:(OHFWULFSRZHUJHQHUDWHGXVLQJFRJHQHUDWLRQV\VWHPVLQILVFDO\HDUDPRXQWHGWRN:DQGUHSUHVHQWHG
RIHQHUJ\FRQVXPHGE\WKH*URXSLQ-DSDQGXULQJWKHSHULRGZKLOHWRWDOLQGHSHQGHQWO\JHQHUDWHGHOHFWULFSRZHULQFOXGLQJWKDWIURPUHQHZDEOHVRXUFHVDFFRXQWHGIRU

Conceptual Diagram of Cogeneration System
Electric power
Waste heat (steam, hot water)
System process

Internal
combustion engine
Fuel

Cooling
Use of waste heat chiller
HeatingNatural gas,
heavy oil, other

Heat exchanger

Cogeneration system at the Kashima Plant

Hot water supply
Heat exchanger

Cogeneration system at the Chiba Plant

DIC Report 2018

84

ESH

Electric Power Used by the DIC Group in Japan by Energy Source(Thousand kWh)Electric power generatedusing renewable energy

350,000
300,000

20,938250,000

44,26822,60239,472

19,561
38,83919,70150,43820,58644,269211,790

204,337

218,092

7%
Electric power generated
through cogeneration

200,000
150,000

219,178

227,430

16%

100,000

Purchased electric power

50,000

77%

0

13

14

15

16

Electric power generated using renewable energy
Electric power generated through cogeneration

7

Breakdown ofElectric Power
Used by the
DIC Group in Japanin Fiscal Year 2017
by Energy Source

(FY)

17

Purchased electric power

Energy Consumption and CO2 Emissions by the DIC Group Overseas:KLOHSURGXFWLRQYROXPHE\RYHUVHDV',&*URXSFRPSDQLHVHGJHGGRZQLQ¿VFDO\HDUHQHUJ\FRQVXPSWLRQE\WKHVHFRPSDQLHVGHFOLQHGWR*-IURP*-LQILVFDO\HDUDQGHQHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQVOLSSHGWR*-PHWULFWRQQHIURP*-PHWULFWRQQH&22HPLVVLRQVGHFUHDVHGWRPHWULFWRQQHVIURPPHWULFWRQQHVLQ
the previous period, and CO2HPLVVLRQVSHUXQLWRISURGXFWLRQGHFOLQHGWRNJ&22PHWULFWRQQHIURPNJ&22/metric tonne.
Factors contributing to the decline in CO2HPLVVLRQVLQ¿VFDO\HDULQFOXGHHIIRUWVE\LQGLYLGXDO*URXSFRPSDQLHVWREUHDNGRZQWKH
*URXS¶VHPLVVLRQVUHGXFWLRQWDUJHWVDQGSURPRWHHQHUJ\FRQVHUYDWLRQDQGFDUERQUHGXFWLRQLQLWLDWLYHVWKHLQVWDOODWLRQRIDELRPDVVERLOHUDW
+DLQDQ',&0LFURDOJDH&R/WGDQGDVRODUSRZHUV\VWHPDW4LQJGDR',&)LQHFKHPLFDOV&R/WGLQWKH35&LQWKH$VLD±3DFL¿FUHJLRQWKHUHSODFHPHQWRIDSRUWLRQRIWKHFRDOXVHGWR¿UHERLOHUVZLWKSDOPNHUQHOVKHOOV 3.6 DWWKH.DUDZDQJ3ODQWRI37',&*UDSKLFVDQGLQ(XURSHDQGWKH$PHULFDVWKHLQVWDOODWLRQRIDGGLWLRQDOVRODUSRZHUV\VWHPVDQGIXUWKHULQLWLDWLYHVDLPHGDWLPSURYLQJSURGXFWLRQHI¿FLHQF\

CO2 Emissions by the DIC Group Overseas and Change
from Base Year (Fiscal Year 2013)(Metric tonnes)
600,000

（％）
120

100
84

500,000

85

87

82

100

400,000

80

300,000

60

200,000

40

100,000

CO2 Emissions per Unit of Production by the DIC Group
Overseas and Change from Base Year (Fiscal Year 2013)（％）（Kilograms of CO2/
metric tonne）

-6.4%

14

15

16

96

90

250

Change from base year

200

70

100
50

60

13

CO2 Emissions by Region(Metric tonnes)
300,000

FY2013250,000

FY2014200,000

FY2015FY2016150,000

FY2017100,000
50,0000Greater China

Asia–Pacific region

OthersDIC Report 2018

85

from
fiscal year 2016

CO2 emissions per unit of production
80

150

17 (FY)

-6.0%

90

300
CO2 emissions

0

Americas and Europe

100

350

0

13

97

400

20

0

94

450

from
fiscal year 2016

110

100

14

15

16

17 (FY)

Change from base year

ESH

Promoting Energy Savings Overseas/DZVDQGUHJXODWLRQVDVZHOODVLQIUDVWUXFWXUHGLIIHUEHWZHHQFRXQWULHVDQGUHJLRQV7KH',&*URXSVWULYHVWRSURPRWHHQHUJ\VDYLQJVDQG
HI¿FLHQWRSHUDWLRQVZKHUHYHULWLVDFWLYHDQGLQVRGRLQJVHWVSUHFHGHQWVIRUWKHJOREDOFKHPLFDOVLQGXVWU\',&*URXSFRPSDQLHVRYHUVHDVFRQWLQXHWRLPSOHPHQWDEURDGUDQJHRIHQHUJ\VDYLQJLQLWLDWLYHVLQFOXGLQJLPSURYLQJSURGXFWLRQHI¿FLHQF\UHGXFLQJEDVHORDGHQHUJ\FRQVXPSWLRQFKRRVLQJKLJKHIILFLHQF\PRGHOVZKHQUHSODFLQJHTXLSPHQWDQGVZLWFKLQJWR/('OLJKWLQJ$V
SUHYLRXVO\GHVFULEHGWKH*URXSLVDOVRSURPRWLQJWKHXVHRIHQHUJ\IURPUHQHZDEOHVRXUFHVDQGKDVVHYHUDOQHZSURMHFWVFXUUHQWO\XQGHUFRQVLGHUDWLRQIRULPSOHPHQWDWLRQLQ¿VFDO\HDUDQGEH\RQG(IIRUWVLQ¿VFDO\HDUZLOOFHQWHURQLQVWDOOLQJVRODUSRZHUV\VWHPVLQUHJLRQVZLWKKLJKHI¿FLHQF\HOHFWULFSRZHUJHQHUDWLRQDQGLQFUHDVLQJWKHSRUWLRQRIFRDOLWUHSODFHVZLWK3.6/RRNLQJDKHDG',&DQG',&*URXSFRPSDQLHVRYHUVHDVZLOOVWHSXSFRRSHUDWLRQZLWKWKHDLPRIFRQWULEXWLQJIXUWKHUWRHIIRUWVWRFXUEJOREDOZDUPLQJ

Energy-Saving Initiatives at Overseas Group Companies$VLD±3DFL¿F5HJLRQ
7KH',&*URXSKDVVLWHVLQWKH$VLD±3DFLILFUHJLRQZKLFKDFFRXQWIRUDURXQGRIWKH
*URXS¶VWRWDOJOREDO&22HPLVVLRQV'HVSLWHDLQFUHDVHLQSURGXFWLRQYROXPHE\*URXS
companies in the region, CO2HPLVVLRQVLQWKHUHJLRQGHFOLQHGLQ¿VFDO\HDU3ULQFLSDO
factors behind this decrease included an increase in the fuel conversion rate (replacement of 10.0%
of coal used with biomass) and the implementation of an energy-saving project at a pigments
production facility in Indonesia, the promotion of fuel conversion (transition from diesel to natural gas)and energy-saving initiatives at a printing inks production facility in India, and the implementationof energy-saving initiatives at a solid compounds production facility in Indonesia and a printing inks
SURGXFWLRQIDFLOLW\LQ$XVWUDOLD:KLOHSURGXFWLRQYROXPHLQWKHUHJLRQLQILVFDO\HDUZDVXSIURPWKH¿VFDO\HDUEDVH\HDU&22 emissions were held to a 6.0% increase.
$UHJLRQDO(6+FRXQWU\KHDGPHHWLQJLVKHOGDQQXDOO\DWWKHRI¿FHRI',&$VLD3DFL¿FLQ6LQJDSRUH
with participants including country heads, the executive in charge of regional operations and pertinent
LQGLYLGXDOVIURPWKH5HVSRQVLEOH&DUH'HSDUWPHQWDQGWKH3URGXFWLRQ0DQDJHPHQW'HSDUWPHQWThe principal purpose of the meeting is to explain safety and environmental policies and discuss and
DJUHHRQFRQFUHWHDFWLRQSODQVIRUWKHUHJLRQLQWKHVXEVHTXHQW¿VFDO\HDU,Q¿VFDO\HDUWKLVLQFOXGHGSURYLGLQJDQH[SODQDWLRQRIWKH*URXS¶VSROLFLHVIRUFRPEDWLQJJOREDOZDUPLQJ UHGXFLQJ
HQHUJ\FRQVXPSWLRQDQGFDUERQ LQILVFDO\HDUDQGGHWHUPLQLQJDFWLRQSODQV$VSDUWRILWV
efforts to ensure achievement of the CO2HPLVVLRQVUHGXFWLRQWDUJHWVHWIRUWKHJOREDO',&*URXSFRUSRUDWHKHDGTXDUWHUVDVVLVWVORFDO*URXSFRPSDQLHVE\IRUPXODWLQJDQGLPSOHPHQWLQJHQHUJ\saving plans; promoting ongoing energy-saving analysis activities to support the identification ofenergy-saving themes and the implementation of remedial measures; deploying a practical energy
management manual and best practice case study materials (establishing management practices
DQGSURPRWLQJKRUL]RQWDOGHSOR\PHQWZLOOUHPDLQWDUJHWVIRUWKHIRUHVHHDEOHIXWXUH DQGODXQFKLQJ
and providing support for energy-saving and carbon-reduction projects at suitable sites.

$VLD±3DFLILFUHJLRQ(6+FRXQWU\KHDGPHHWLQJ 6LQJDSRUH(QHUJ\VDYLQJDQDO\VLV ',&&RPSRXQGV 0DOD\VLD

550

300,000500

250,000
200,000450

150,000

400
350

100,000

300

50,000

13

14

15

16

17

CO2 emissions per unit of production (Kg of CO2/metric tonne)

Production volume and CO2 emissions (Metric tonnes)

CO2 Emissions and CO2 Emissions per Unit of Production$VLD²3DFLÀF5HJLRQ(FY)Production volume
Reduction of CO2 emissions (target)
Reduction of CO2 emissions perunit of production (target)

CO2 emissions
CO2 emissions per unit of production

DIC Report 201886

Performance in fiscal year 2017
(Asia–Pacific region)

Change from fiscal year 2016
% change

Self-assessmentof performance

Change from fiscal year 2013
% change

Self-assessmentof performance

Production volume

3%

̶

16%

̶

CO2 emissions

- 6%

○

6%

×

CO2 emissions perunit of production

- 9%

○

- 9%

○

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year 2017 was up 2.0%, CO2HPLVVLRQVDFURVVWKHUHJLRQZHUHGRZQ$PRQJIDFWRUVFRQWULEXWLQJWRWKLVGHFOLQHZHUHWKHLQVWDOODWLRQRIDELRPDVVERLOHUDW+DLQDQ',&
0LFURDOJDHZKLFKSURGXFHV6SLUXOLQDDQGDVRODUSRZHUV\VWHPZLWKDJHQHUDWLQJFDSDFLW\RIN:DW4LQJGDR',&)LQHFKHPLFDOVDQGWKHLPSOHPHQWDWLRQRIHQHUJ\VDYLQJLQLWLDWLYHVDW=KRQJVKDQ',&&RORXU&R/WG&RPSDUHGZLWKWKH¿VFDO\HDUEDVH\HDUSURGXFWLRQYROXPHLQ*UHDWHU&KLQDLQ¿VFDO\HDUZDVXSZKLOH&22 emissions
rose 16.0%. The increase in CO2 emissions primarily reflected expanded production ofenergy-intensive products, including LCs, in recent years; an increase in base load energy
consumption attributable to the expansion of research facilities, increased operating
rates for clean rooms and other factors not related to production, as well as to the start ofoperations at a new production facility for engineering plastics.
2QFHDQQXDOO\UHJLRQDOHQHUJ\RI¿FHUVDQG(6+RI¿FHUVKROGDMRLQW(6+FRQIHUHQFHWKDWis also attended by the executive in charge of regional operations and pertinent individuals
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reducing regional CO2 emissions and determining action plans. Participating companies
also gave presentations introducing case studies and plans for future initiatives. The
objective of the conference is to provide information on successful energy management andRWKHUHQHUJ\VDYLQJHIIRUWVWRKHOSFRPSDQLHVHQKDQFHWKHLUSHUIRUPDQFH*DWKHULQJVKDYH
thus had a positive ripple effect, which includes encouraging the deployment measures
based on the experiences of other companies.
Other regional efforts include promoting energy-saving analysis activities to gauge the
VWDWXVRIHQHUJ\PDQDJHPHQWDQGWKHSHUIRUPDQFHRIHQHUJ\UHODWHGHTXLSPHQW$VSDUW
of these efforts, local employees known as energy-saving masters assess energy-saving
promotion frameworks, actual energy consumption, efforts to formulate policies and manage
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identify strengths and weaknesses and encourage remedial measures.

(QHUJ\VDYLQJDQDO\VLV 4LQJGDR',&)LQHFKHPLFDOVEnergy-Saving Assessment
Radar Chart
5

Electricalequipment
performance

Energy-saving
promotion framework

4
3

Average
TargetGrasp of energy
consumption

2
1

Air pressure
equipment
performance0

Water facilities
performance

Energy-saving policies,
targets, action plans and reviews

Steam and thermal
equipment performance

200,000
180,000

450

160,000
140,000
120,000
100,000
80,00060,00040,000

350

400
300
250
200
150
100
50

20,000
0

13

14

15

16

17

0

CO2 emissions per unit of production (Kg of CO2/metric tonne)

Production volume and CO2 emissions (Metric tonnes)

CO2 Emissions and CO2 Emissions per Unit of Production (Greater China)*UHDWHU&KLQDMRLQW(6+FRQIHUHQFH',&*UDSKLFV&KLD/XQJ(FY)

Production volume
Reduction of CO2 emissions (target)
Reduction of CO2 emissions perunit of production (target)

Performance in fiscal year 2017
(Greater China)

CO2 emissions
CO2 emissions per unit of production

Change from fiscal year 2016

Change from fiscal year 2013

Self-assessmentof performance

Self-assessmentof performance% change% change

Production volume

2%

̶

1%

̶

CO2 emissions

- 3%

○

16%

×

CO2 emissions perunit of production

- 4%

○

14%

×

Presentation of best practice case study (Lidye Chemical&R/WG',&*UDSKLFV&KLD/XQJ

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87

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| ([SDQVLRQRIWKH8VHRI5HQHZDEOH(QHUJ\DW6LWHVLQWKH$VLD²3DFLÀF5HJLRQDQG*UHDWHU&KLQD$FKLHYLQJDGHFDUERQL]DWLRQRIWKHJOREDOHFRQRP\KDVEHFRPHDFHQWUDOIRFXVZRUOGZLGH$JDLQVWWKLVEDFNGURSWKHXVHRIHQHUJ\IURPUHQHZDEOH
VRXUFHVKDVLQFUHDVHGDFURVVWKH$VLD±3DFLILFUHJLRQDQG*UHDWHU&KLQDDVHOVHZKHUH',&*URXSVLWHVLQWKHVHUHJLRQVDUHPDNLQJXVHRI
government subsidies and support to expand their use of renewable energy by, among others, installing biomass boilers and solar power systems.

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Project Launched to Reduce CO 2 Emissions by Switching from Coal to PKS
37',&*UDSKLFV¶.DUDZDQJ3ODQWLVDFUXFLDOIDFLOLW\IRUWKHSURGXFWLRQRISLJPHQWVIRULQNVDQGFRDWLQJVIRUSDFNDJLQJDSSOLFDWLRQVSODVWLFVDQG
RWKHUDSSOLFDWLRQVWKHSURGXFWLRQRIZKLFKXVHVDVLJQL¿FDQWDPRXQWRIHQHUJ\IRUERLOHUVDQGZDWHUIRUZDVKLQJ7RGDWHWKHIDFLOLW\KDVSULPDULO\XVHGFRDOWKHFRPEXVWLRQRIZKLFKLVH[WUHPHO\HFRQRPLFDO DSSUR[LPDWHO\WKHFRVWRIKHDY\RLODQGWKHFRVWRIQDWXUDOJDV DQGHDV\WRREWDLQLQ,QGRQHVLD%HFDXVHWKH.DUDZDQJ3ODQWDFFRXQWVIRUDWHQWKRIWKH',&*URXS¶VJOREDO&22 emissions, and because its production
YROXPHFRQWLQXHVWRH[SDQGUHGXFLQJWKHIDFLOLW\¶VHQHUJ\FRQVXPSWLRQDQG¿QGLQJORZFDUERQHQHUJ\VRXUFHVLVDFULWLFDOFKDOOHQJH7RWKLVHQG
the plant kicked off a CO2HPLVVLRQVUHGXFWLRQSURMHFWIRFXVHGRQH[SORULQJORZFDUERQDOWHUQDWLYHVWRFRDOWKDWLGHQWL¿HG3.6%HFDXVH,QGRQHVLDLVWKHZRUOG¶VVHFRQGODUJHVWSURGXFHURISDOPRLO3.6²ZKLFKDUHOHIWDIWHUWKHH[WUDFWLRQRIRLO²DUHHDV\WRVHFXUHLQODUJHTXDQWLWLHV-DSDQLPSRUWV3.6IRUXVHDVIXHOIRUFRDO¿UHGHOHFWULFSRZHUSURGXFWLRQIDFLOLWLHVDQGELRPDVVERLOHUV+DYLQJGHWHUPLQHGWKDWWKHFDORUL¿FYDOXHRI3.6DSSUR[LPDWHO\N&DONJLVFRPSDUDEOHWRWKDWRIFRDOXVHGDWWKHSODQWLQ'HFHPEHUWKHSURMHFW
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20% of the coal could be replaced with PKS with no impact on boiler operation or combustion or on incinerated ash, which is used as an aggregate in cement.
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LQFUHDVHLQSURGXFWLRQDWWKHSODQWLQ¿VFDO\HDULWV&22HPLVVLRQVGHFOLQHG,QRWKHUZRUGVWKDQNVWRLQWURGXFLQJ3.6RQDWULDOEDVLVWKHSODQWUHDOL]HGDGHFUHDVHRIPHWULFWRQQHVLQLWVDQQXDO&22HPLVVLRQV7KLVUHGXFWLRQZDVHTXLYDOHQWWRRI&22 emissions by the
JOREDO',&*URXSLQ¿VFDO\HDU%HJLQQLQJLQ¿VFDO\HDUWKHSODQWZLOOLQFUHDVHWKHSURSRUWLRQRI3.6LQLWVIXHOPL[WRDURXQG

PKS to be used as fuelKarawang Plant boiler

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Installation of Solar Panels Reduces CO 2 Emissions
Siam Chemical Industry, which manufactures a broad range of polymer products, including synthetic resins, continues to see rising demand foracrylic coating resins, underpinned by increases in automobile production. Thailand is seeking to diversify energy sources to reduce the country’s
dependence on natural gas to generate electric power. Energy from renewable sources is attracting considerable attention thanks to tax breaks
RIIHUHGE\WKH7KDLJRYHUQPHQW$JDLQVWWKLVEDFNGURS6LDP&KHPLFDO,QGXVWU\LQVWDOOHGVRODUSDQHOVZLWKDWRWDOJHQHUDWLQJFDSDFLW\RIN: (annual
RXWSXW0:K RQWKHURRIVRISURGXFWLRQEXLOGLQJVDQGZDUHKRXVHVDWLWVSODQWLQ6DPXW3UDNDQ3URYLQFH7KHVRODUSDQHOVFRPPHQFHGRSHUDWLRQLQ-XO\(OHFWULFSRZHUJHQHUDWHGXVLQJWKHVHIDFLOLWLHVLVXVHGRQSURGXFWLRQOLQHVDQGLQRI¿FHV,Q¿VFDO\HDUVRODUSRZHU
accounted for 16.0% of the electric power used by the plant, lowering the plant’s annual CO 2HPLVVLRQVE\PHWULFWRQQHVSiam Chemical Industry (Thailand)

Solar panels installed on the roof

DIC Report 2018

88

ESH

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Biomass Boiler Replaces Diesel-Fired Unit
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the steam necessary for its production processes, but in October 2016 it switched to a biomass boiler thatuses waste rubber tree wood from the thinning of rubber forests as fuel. The new boiler was in operation
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HPLVVLRQVIRUWKH\HDUHTXLYDOHQWWRRILWVHPLVVLRQVLQWKHSUHYLRXV\HDUThis also accounted for 1.5%of the overall decrease in CO2HPLVVLRQVDFKLHYHGE\WKH',&*URXSLQ*UHDWHU&KLQDLQ¿VFDO\HDU

Biomass boiler+DLQDQ',&0LFURDOJDH V
general manager, Hideyuki Tsuda

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Solar Power System Installation Helps Reduce Energy Consumption and CO 2 Emissions
5HFRJQL]LQJWKHPRQVRRQFOLPDWHDEXQGDQWVXQVKLQHDQGH[FHOOHQWDWPRVSKHULFFRQGLWLRQV
RI4LQJGDRDVVXLWHGWRVRODUSRZHUJHQHUDWLRQVXEVLGLDU\4LQJGDR',&)LQHFKHPLFDOVD
manufacturer of base materials for TFT LCs, which it supplies to local customers, installed a solar
power system that features panels on the roof of the company’s plant building. The new system,ZKLFKKDVDJHQHUDWLQJFDSDFLW\RIN:EHJDQRSHUDWLQJLQ6HSWHPEHU:LWKWKLVLQVWDOODWLRQ4LQJGDR',&)LQHFKHPLFDOV¶DQQXDORXWSXWRIVRODUSRZHULVH[SHFWHGWRUHDFK
0:KUHGXFLQJLWVDQQXDO&22HPLVVLRQVE\DSSUR[LPDWHO\IURPWKH¿VFDO\HDUOHYHON:± FDSDFLW\VRODUSRZHUV\VWHPDW4LQJGDR',&)LQHFKHPLFDOV| Planned and Ongoing Efforts to Update Facilities and Modify Production Processes(IIRUWVWR2SWLPL]H(TXLSPHQW&RQWULEXWHWRD6LJQLÀFDQW5HGXFWLRQRI5HIULJHUDWRU3RZHU&RQVXPSWLRQ ',&6\QWKHWLF5HVLQV =KRQJVKDQ5HIULJHUDWRUVDFFRXQWIRUDWKLUGRIWKHHOHFWULFSRZHUFRQVXPHGE\',&6\QWKHWLF5HVLQV =KRQJVKDQ &R/WG¶VPHWDOFDUER[\ODWHVSODQW
This is primarily because cooling water is supplied by remote motors and water supply pumps, and the pumps operate at full capacity when
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potential improvements. This resulted in the installation of a cooling tower and water pump near refrigerators to recirculate cooling water.
The company also identified a way to link refrigerator compressors with ice water pumps, facilitating the automatic adjustment of watertemperature. Full-scale operations with the new setup commenced in January 2016. This has succeeded in reducing annual refrigerator
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A cooling tower and water supply pump were installed nearrefrigerators and temperature management was automatedCooling tower

Cooling
water tank

Refrigerator
Ice watertank
Cooling water pump
Motor building

Ice water pump

Approx. 300 meters

Extension 1. Cooling tower

Metal carboxylates plant

Extension 2. Ice water pumpUpgraded cooling tower and water supply pump

DIC Report 2018

89

ESH

Efforts Succeed in Harnessing Residual Heat from Incinerating Waste Resin Varnish Factory (Nantong DIC Color)
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&DQG&7KHIDFLOLW\LQVWDOOHGDKHDWH[FKDQJHUWRUHF\FOHWKLVKHDWIRUVKRZHUVDQGKRWZDWHULQSLJPHQWPDQXIDFWXULQJSURFHVVHV7KLVPRYHKDVFXWWKHIDFLOLW\¶VDQQXDOHOHFWULFSRZHUELOOE\DURXQG5PE

New hot water tank (left) and heat exchanger (right) to recycle waste heat

VOICE A key theme is promoting investment in decarbonization with a view to future social change and risk.
The adoption of the Paris Agreement in 2015 further accelerated the efforts of developed economies to curb their CO 2 emissions. Efforts ofparticular note include the creation of preferential tax systems and subsidies with the aim of supporting efforts to make use of energy fromrenewable sources, encouraging companies to diversify energy sources by moving away from fossil fuels (thereby reducing carbon) andavoiding the risk of resource depletion. Indonesia has become the first country in Asia to sell green bonds to raise funds for investments
in global warming countermeasures and environmental projects. Such moves will in no small way influence the plans of companies to
XSGDWHWKHLUIDFLOLWLHV)RUH[DPSOHZKHQORRNLQJWRUHSODFHDNH\SLHFHRIHTXLSPHQWVXFKDVDERLOHUFRPSDQLHVPXVWVFUXWLQL]HQRWRQO\performance and cost but also environmental considerations, investment recovery period and the availability of government subsidies, aswell as anticipate changes that will take place in society over the useful life of the unit, in determining the timing of the change and selecting
the most appropriate model.
:KHQP\FROOHDJXHVDQG,YLVLWSURGXFWLRQVLWHVLQ,QGRQHVLDIRUHQHUJ\VDYLQJDQDO\VLVDFWLYLWLHVRUHQHUJ\VDYLQJSURPRWLRQFRQIHUHQFHV
we discuss such issues with local executives. Today, the risk of not making environmental investments is rapidly becoming greater than the
ULVNRIEHLQJXQDEOHWRUHFRYHUVXFKLQYHVWPHQWV$FFRUGLQJO\WDNLQJVWHSVWREHFRPHDFRPSDQ\WKDWKHOSVWRDGYDQFHGHFDUERQL]DWLRQEHIRUHUHJXODWLRQVDUHWLJKWHQHGLVFUXFLDOLIZHDUHWRFRQWLQXHJURZLQJWRJHWKHUZLWKVRFLHW\*RLQJIRUZDUGZHZLOOVWHSXSHIIRUWVWRVKDUHHQHUJ\FRQVHUYDWLRQDQGPDQDJHPHQWH[SHUWLVHIURP-DSDQDVZHOODVEHVWSUDFWLFHFDVHVWXGLHVZLWKRYHUVHDV*URXSFRPSDQLHVManager in Charge of Eﬃciency, Production Management Department Kazuo Kawaguchi(XURSHDQGWKH$PHULFDV
7KH',&*URXSKDVVLWHVLQ(XURSHDQGWKH$PHULFDV WKLVFDWHJRU\DOVRLQFOXGHVVLWHVLQ$IULFD ZKLFKDFFRXQWIRUDURXQGRIWKH*URXS¶VWRWDO&22 emissions.
'HVSLWHDLQFUHDVHLQSURGXFWLRQYROXPHLQILVFDO\HDU&22 emissions
DFURVVWKHUHJLRQZHUHGRZQ7KLVGHFOLQHUHIOHFWHGPXOWLSOHIDFWRUVQRWDEO\
the further integration of production facilities and execution of measures to raiseSURGXFWLRQHI¿FLHQF\WKHLQVWDOODWLRQRIVRODUSDQHOVDQGWKHLPSOHPHQWDWLRQRIRWKHUHQHUJ\VDYLQJDQGFRVWFXWWLQJLQLWLDWLYHV$OWKRXJKUHJLRQDOSURGXFWLRQYROXPHLQ¿VFDO\HDUZDVHVVHQWLDOO\OHYHOZLWKWKH¿VFDO\HDUEDVH\HDU&22 emissions
were down 24.0%, with key contributing factors including a significant increase in
SURGXFWLRQHI¿FLHQF\UHDOL]HGWKURXJKDODUJHVFDOHEXVLQHVVUHRUJDQL]DWLRQWKHXVH
RIRXWVRXUFLQJLQFOXGLQJWKHFRQWUDFWLQJRIHQHUJ\HI¿FLHQF\FRQVXOWDQWVWRDGYDQFH
the reduction of energy consumption, and active efforts to promote the use of energy fromUHQHZDEOHVRXUFHVLQFOXGLQJVRODUSRZHUVPDOOK\GURHOHFWULFSRZHUDQGODQG¿OOELRJDVDIC Report 2018

90

ESH

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Efforts to Promote the Use of Renewable Energy Stepped Up
6XQ&KHPLFDOVLJQHGDVRODUSRZHUSXUFKDVHDJUHHPHQW 33$ ZLWK2Q\[5HQHZDEOH
Partners and installed a solar power system comprising more than 2,500 panels on the roofof the parking structure at its research facility in Carlstadt, California. Under the 20-year
33$2Q\[ZLOORZQDQGPDLQWDLQWKHV\VWHPZKLFKKDVDJHQHUDWLQJFDSDFLW\RIN:
Sun Chemical will purchase power generated by the system at approximately 50% of themarket rate, thereby helping to reduce energy costs. Installation of the panels began in the
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Solar panels at Sun Chemicals’ research facility inCarlstadt, California

500
450

700,000
600,000

400

500,000

350

400,000

300
250

300,000

200
150

200,000100
50
0

100,000
0

13

14

15

16

17

CO2 emissions per unit of production (Kg of CO2/metric tonne)

Production volume and CO2 emissions (Metric tonnes)

CO2 Emissions and CO2 Emissions per Unit of Production (Europe and the Americas)
Performance in fiscal year 2017
(Europe and the Americas)

Change from fiscal year 2016
% change

Self-assessmentof performance

Change from fiscal year 2013
% change

Self-assessmentof performance

Production volume

2%

̶

1%

̶

CO2 emissions

- 3%

○

- 24%

○

CO2 emissions perunit of production

- 5%

○

- 24%

○

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(FY)

Production volume
Reduction of CO2 emissions (target)
Reduction of CO2 emissions perunit of production (target)

CO2 emissions
CO2 emissions per unit of production

6XQ&KHPLFDO*URXS $XVWULD
Site Wins the Energy Globe Award Lower Austria in the “Water” Category%HQGD/XW]:HUNH*PE+WKH6XQ&KHPLFDO*URXS¶VSURGXFWLRQVLWHLQ1XVVGRUI$XVWULDRSHUDWHVWZRVPDOOK\GURHOHFWULFSRZHUIDFLOLWLHVDORQJWKH7UDLVHQ5LYHU7KHVHWZRXQLWVDUHSDUWRIDFRQVRUWLXPRIVXFKULYHUVLGHVPDOOK\GURHOHFWULFSRZHUIDFLOLWLHVRSHUDWHGZLWKWKH
DLPRIUHGXFLQJWKHORFDOFRPPXQLW\¶VFRQVXPSWLRQRIHQHUJ\,QWKHFRQVRUWLXPUHFHLYHGWKH(QHUJ\*OREH$ZDUG/RZHU$XVWULDLQWKH
³:DWHU´FDWHJRU\LQUHFRJQLWLRQRILWVHIIRUWVWRSURPRWHWKHVXVWDLQDEOHXVHRIK\GURHOHFWULFSRZHU$WWKHDZDUGSUHVHQWDWLRQFHUHPRQ\6XQ
&KHPLFDODQGRWKHUFRQVRUWLXPPHPEHUVJDYHDSUHVHQWDWLRQWLWOHG³7KH(FRORJLFDO&RPSDWLEOH8VDJHRI+\GURG\QDPLF3RZHULQWKH/RZHU
3DUWRIWKH7UDLVHQ´5HFHLYLQJWKH(QHUJ\*OREH$ZDUG/RZHU$XVWULDLQFUHDVHVWKHFRQVRUWLXP¶VFKDQFHVRIEHLQJUHFRPPHQGHGIRUWKHQDWLRQDO(QHUJ\*OREH$ZDUGIRU$XVWULDDQGWKH(QHUJ\*OREH:RUOG$ZDUGLQWKH:DWHUFDWHJRU\:LQQHUVRIWKH(QHUJ\*OREH$ZDUG/RZHU$XVWULDLQWKH³:DWHU´FDWHJRU\%HQGD/XW]:HUNH 6XQ&KHPLFDO*URXSDIC Report 2018

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The DIC Group’s Global Energy Mix(Thousands of GJ)
13,000

Coal
Fossil fuels

11,000Natural gas
Purchased thermal energy(steam and cold/hot water)

9,000

Purchased electric power
7,000

Steam generated using
renewable energy

5,000Electric power generated using
renewable energy

3,000

1,000

-1000

2013

8

2014

2015

2016

2017

(FY)

Initiatives in Areas Other than Production,Q¿VFDO\HDU',&RQFHDJDLQSURPRWHGHIIRUWVLQ-DSDQLQOLQHZLWKWKHFRXQWU\¶V&RRO%L]DQG:DUP%L]FDPSDLJQVRI¿FLDOHIIRUWVWRUHGXFHHOHFWULF
SRZHUFRQVXPSWLRQE\OLPLWLQJWKHXVHRIDLUFRQGLWLRQLQJLQVXPPHUDQGZLQWHUWKURXJKPHDVXUHVVXFKDVWKHLQWURGXFWLRQRIPRUHUHOD[HGRI¿FHGUHVVFRGHVThe Company also continued to promote initiatives aimed at reinforcing employees’ awareness of the importance of lowering energy consumption, including
UHSODFLQJDJLQJOLJKW¿[WXUHVDQGDLUFRQGLWLRQLQJHTXLSPHQWZLWKQHZHUKLJKHI¿FLHQF\PRGHOVWKDWVDWLVI\VWDQGDUGVVHWE\WKH(&&-IRULWV7RS5XQQHUSURJUDPWXUQLQJRIIOLJKWVZKHQQRWQHHGHGDQGLPSOHPHQWLQJPDQGDWRU\&DQG&VXPPHUDLUFRQGLWLRQLQJVHWWLQJV
9Reporting to the CDP

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LQIRUPDWLRQRQLQLWLDWLYHVWRFRPEDWFOLPDWHFKDQJHDQGNH\HQYLURQPHQWDOGDWD7KH&'3DQDO\]HVDQGHYDOXDWHVLQIRUPDWLRQRQVWUDWHJLHVJUHHQKRXVHJDV
emissions, reduction targets and forecasts, and actual initiatives reported by approximately 6,200 leading global companies participating in its climate change
DVVHVVPHQWSURJUDPLQFOXGLQJLQ-DSDQDQGFRPPXQLFDWHVLWV¿QGLQJVWRVDLGLQVWLWXWLRQDOLQYHVWRUV',&KDVEHHQUHSRUWLQJWRWKH&'3VLQFH
,Q',&ZDVUHFRJQL]HGE\WKHRUJDQL]DWLRQIRUUHDFKLQJWKHSURJUDP¶VOHDGHUVKLSOHYHOUHFHLYLQJKLJKPDUNVIRULWVHIIRUWVWRUHGXFHLWVJUHHQKRXVHJDVHPLVVLRQVDQGLWVGLVFORVXUHDQGHDUQLQJDQRYHUDOOVFRUHRI$VHFRQGRQO\WRWKHWRSVFRUHRI$IRUWKHVHFRQGFRQVHFXWLYH\HDU',&UHFHLYHGSDUWLFXODUO\KLJKPDUNVIRULWVHIIRUWVWRUHGXFHJUHHQKRXVHJDVHVDWWULEXWDEOHWRLWVH[SDQGLQJJOREDOSURGXFWLRQDFWLYLWLHVDQGIRULWVGLVFORVXUH&RJQL]DQWRIDQLQFUHDVHGDZDUHQHVVRIULVNVWRJOREDOZDWHUUHVRXUFHVLQ',&DOVREHJDQSDUWLFLSDWLQJLQWKH&'3¶VZDWHUSURJUDPZKLFKHYDOXDWHVFRPSDQLHV¶HIIRUWVWRPDQDJHVXFKUHVRXUFHV$WRWDORI-DSDQHVHFRPSDQLHVUHDFKHGWKHOHDGHUVKLSOHYHOLQWKH&'3¶VFOLPDWHFKDQJHDVVHVVPHQWSURJUDPLQZLWKHDUQLQJDVFRUHRI$DQG
a score of A-. A total of six companies in the materials sector earned a score of A-.

Looking Ahead:LWKWKHJRDORIGHHSHQLQJXQGHUVWDQGLQJRIWKHLPSRUWDQFHRIHQHUJ\HI¿FLHQF\DFURVVWKH*URXS',&KDVLQDXJXUDWHGDQXPEHURILPSRUWDQWQHZLQLWLDWLYHV,Q-DSDQIRUH[DPSOHWKH&RPSDQ\KDVFUHDWHGDIRUXPIRU',&*URXSHQHUJ\RI¿FHUVDWSULQFLSDOSURGXFWLRQIDFLOLWLHVWRPHHWUHJXODUO\,Q¿VFDO\HDUWKHHIIRUWVRIZRUNLQJJURXSVZLOOEHJXLGHGE\IRXUFHQWUDOWKHPHVDGYDQFHDQGHVWDEOLVKHQHUJ\VDYLQJLQLWLDWLYHV
EDVHGRQWKHHQHUJ\FRQVHUYDWLRQPDQXDOSURPRWHGHFDUERQL]DWLRQE\DFWLYHO\HQFRXUDJLQJWKHXVHRIUHQHZDEOHHQHUJ\VHDUFKIRUDQGYHULI\
new methods of reducing energy consumption (e.g., small hydroelectric power, binary power and geothermal energy); and conduct energyVDYLQJDQDO\VHVDWVLWHVWRLGHQWLI\QHZPHDVXUHVRIUHGXFLQJHQHUJ\FRQVXPSWLRQDQGVXSSRUWXVHRIWKH3'&$F\FOH7KHSURJUHVVRIWKHVH
LQLWLDWLYHVZLOOEHFRQ¿UPHGDWTXDUWHUO\ZRUNLQJJURXSPHHWLQJV7KURXJKLQLWLDWLYHVLPSOHPHQWHGLQOLQHZLWKWKHVHWKHPHVWKH*URXSZLOOSUREH
GHHSHULQWRLVVXHVRIFRQFHUQWRVRFLHW\DQGIRVWHUH[SHUWVLQNH\DUHDVWRIXUWKHUUHLQIRUFHUHVSRQVLYHQHVV*URXSZLGHVOICE 7RUHGXFHFDUERQZHZLOOH[SDQGIURPD*URXSVSHFLÀFWRDUHJLRQIRFXVHGDQGJOREDOVFDOHDSSURDFK
2YHUVHDVVLWHVDFFRXQWIRUDSSUR[LPDWHO\RIWKH',&*URXS¶VJOREDO&2 2HPLVVLRQV:LWKSURGXFWLRQLQWKH$VLD±3DFLILFUHJLRQDQG
*UHDWHU &KLQD FRQWLQXLQJ WR H[SDQG ZH IDFH LQFUHDVLQJ FDOOV WR IXUWKHU LPSURYH SURGXFWLRQ HIILFLHQF\ DQG UHDOL]H DQ RSWLPXP HQHUJ\balance. Against this backdrop, our ability to reduce carbon increasingly depends on taking a strategic perspective to investment in
IDFLOLWLHVDQGHQHUJ\VDYLQJLQLWLDWLYHV*RLQJIRUZDUGZHZLOOFRQWLQXHWRSURPRWHWKHKRUL]RQWDOGHSOR\PHQWRIEHVWSUDFWLFHFDVHVWXGLHV:HZLOODOVRH[SDQGWRDUHJLRQIRFXVHGDQGJOREDOVFDOHDSSURDFKE\VWHSSLQJXSFROODERUDWLRQZLWKRWKHUGHSDUWPHQWVDQGPDNLQJIXOOXVHRIDYDLODEOHKXPDQRUJDQL]DWLRQDODQGDGPLQLVWUDWLYHUHVRXUFHVLQFOXGLQJJRYHUQPHQWVXEVLGLHVDQGH[WHUQDOH[SHUWVZLWKWKHDLPRI
ensuring a solid reputation as a leading global manufacturer of fine chemicals.

General Manager, Production Management Department Yuuichi Kougo

DIC Report 2018

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Reducing Discharge of Chemical Substances
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Goals for fiscal year 2017

Achievement in fiscal year 2017

Reduce VOC emissions into the air.

• Reduce VOC emissions into the air.
• Establish reduction targets for individual
domestic sites and promote related
initiatives (cumulative total of targets fordomestic production facilities: 376 metrictonnes (-2.3% from fiscal year 2016)).

DIC Group (Japan): Total emissions of
371 metric tonnes (-3.6% from fiscal
year 2016).

Evaluation

Goals for fiscal year 2018★★★

• Reduce VOC emissions into the air.
• Establish reduction targets for individual
domestic sites and promote related
initiatives (cumulative total of targets fordomestic production facilities: 357 metrictonnes (-3.7% from fiscal year 2017)).

Basic Approach
As chemicals companies handle a considerably greater volume and more diverse range of chemical substances than companies inother industries, they must be extremely vigilant to prevent discharges of such substances into the environment. DIC has worked toreduce emissions into the air, water and soil of substances designated under the Pollutant Release and Transfer Register (PRTR)
DQGRIVXEVWDQFHVWDUJHWHGXQGHUDYROXQWDU\VFKHPHFUHDWHGE\WKH-&,$VLQFH¿VFDO\HDUZKLOHRWKHU',&*URXSFRPSDQLHV
LQ-DSDQKDYHGRQHVRVLQFH¿VFDO\HDU
* The JCIA is a general incorporated association. As one of Japan’s major industry organizations, JCIA is a member of the International Council of Chemical Associations and pursues thehealthy development of the chemical industry with other chemical-industrial organizations around the world.

| Principal Initiatives in Fiscal Year 2017
1

Reducing Emissions of VOCs

+DYLQJVXFFHHGHGLQDFKLHYLQJDYROXQWDU\WDUJHW²VHWLQ¿VFDO\HDU²IRUUHGXFLQJHPLVVLRQVRI92&VLQWRWKHDLURIE\¿VFDO\HDU XVLQJ¿VFDO\HDUDVWKHEDVH\HDU IRUWKH',&*URXSLQ-DSDQGRPHVWLF*URXSFRPSDQLHVFRQWLQXHWRSXUVXHVWHDG\DQQXDO
reductions through facility improvements and emissions management.
,Q¿VFDO\HDUHPLVVLRQVRI92&VLQWRWKHDLUE\',&WRWDOHGPHWULFWRQQHVDGHFUHDVHRIIURP¿VFDO\HDUZKLOHWKRVHE\WKH',&*URXSLQ-DSDQDWPHWULFWRQQHVZHUHGRZQ7KHSULQFLSDOIDFWRUEHKLQGWKHVHUHVXOWVZDVWKHIDFWWKDWUHGXFWLRQLQLWLDWLYHVDWWKH6DLWDPD3ODQWKDYHEHFRPH¿UPO\LQJUDLQHGLQHYHU\GD\RSHUDWLRQV2YHUVHDV*URXSFRPSDQLHVLQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQFRQWLQXHGWRSURPRWHRQJRLQJHPLVVLRQVUHGXFWLRQV,QWKH
35&LQSDUWLFXODUWKH*URXSLVXSGDWLQJIDFLOLWLHVDQGVWHSSLQJXSPDQDJHPHQWSUDFWLFHVLQUHVSRQVHWRWKHWLJKWHQLQJRIORFDOUHJXODWLRQVJRYHUQLQJWKHHPLVVLRQVRI92&V
Emissions of VOCs DIC
into the Air in Fiscal
Year 2017

Emissions of Targeted Chemical Substances into the Air
6XEVWDQFHV,QFOXGLQJWKRVH'HVLJQDWHGE\WKH3575
and One Substance Group)- 6.3％
IURPÀVFDO\HDU

00(Base year)

DIC

11

12

13

14

15

16

17

- 3.6％
IURPÀVFDO\HDU

371

177

385

189

382

208

354

189

261

0

466

555
283

310

561

500

745

(Metric tonnes)
1,000

DIC Group (Japan)(FY)

DIC Group (Japan)

,Q¿VFDO\HDUWKH',&*URXSPRQLWRUHGGLVFKDUJHVRIFODVVFKHPLFDOVXEVWDQFHVGHVLJQDWHGXQGHUWKH3575DQGRI3575
GHVLJQDWHGFKHPLFDOVXEVWDQFHV RWKHUWKDQFODVVVXEVWDQFHV DQGRQHVXEVWDQFHJURXS FKDLQK\GURFDUERQVZLWKXSWR±FDUERQDWRPV 
WDUJHWHGE\WKH-&,$ 'XULQJWKHSHULRG',&DQG',&*URXSFRPSDQLHVLQ-DSDQSURGXFHGRUXVHGDQGRIWKHVHVXEVWDQFHVUHVSHFWLYHO\LQXQLWVH[FHHGLQJPHWULFWRQQH
* ,QWKH-&,$UHYLHZHG3575GHVLJQDWHGFKHPLFDOVXEVWDQFHVDQGUHYLVHGWKHQXPEHURIVXEVWDQFHVRQLWVWDUJHWOLVWIURPWRDIC Report 2018

93

ESH

Number of Targeted Chemical Substances Used and/or
Produced in Amounts Exceeding 1.0 Metric Tonne
in Fiscal Year 2017

Environmental Emissions of Targeted Chemical Substances(551 Substances, Including those Designated by the PRTR,
and One Substance Group) in Fiscal Year 2017
Emissions into the air

DIC

110

DIC Group (Japan)

DIC

123

Emissions into water
Emissions into soil
Emissions into the air

DIC Group (Japan)

Emissions into water
Emissions into soil

tonnes
177 metrictonnes25 metric
tonnes0 metric
tonnes
371 metrictonnes25 metric
tonnes0 metric

Targeted Chemical Substances for Which Emissions Exceeded
10.0 Metric Tonnes in Fiscal Year 2017DIC

DIC Group (Japan)

Emissions
into the environment

Emissions
into the environment

Ethyl acetate

tonnes68 metric

tonnes
125 metric

Methyl ethyl ketone

24 tonnes
metric48 tonnes

Toluenetonnes39 metric

46 metric
tonnesStyrene7 tonnes
metrictonnes39 metric

Acetonetonnes
6 metric

tonnes35 metric

Propyl alcohol

4 tonnes
metrictonnes21 metric

N-methylpyrrolidone

tonnes13 metric

tonnes13 metric

Butyl acetate

0 metric
tonnes11 metric
tonnesSubstance2

metricManaging Water Resources

Usable fresh water on the earth’s surface is said to account for only around 0.01% of the planet’s total fresh water resources. Accordingly, finding effective
ways to conserve and manage water resources is a crucial global challenge. The DIC Group withdraws fresh water (tap water and industrial water) for use
in production processes and air conditioning and for drinking, among others. The Group also discharges wastewater—after purifying it in line with internal
standards that exceed official standards in the countries and territories where it has operations—into rivers and other fresh water bodies. In Japan, the Central
Research Laboratories, in Chiba Prefecture, recovers purified wastewater (graywater) and reuses it on-site in research, as a result of which it currently
discharges no wastewater. The Group also promotes the recycling and reuse of water to reduce its impact on water resources.
In fiscal year 2017, the Group continued to promote efforts to improve production processes, share information and centralize data on fresh water
withdrawn, water used and wastewater discharged. Fresh water withdrawn by the global DIC Group in the period edged down 0.5% from the fiscal year
2016 level, to 41,308,000 m3, comprising withdrawals by the Group in Japan (including
the parent company) of 32,327,000 m3, up 5.9%, and by Group companies overseas of
8,981,000 m3, down 18.5%. Wastewater discharged by the global DIC Group in fiscal year2017 rose 3.3%, to 38,822,000 m3.
Effective from fiscal year 2017, the Group adopted the GRI’s guideline for collecting
data on water withdrawn* and used its water risk assessment tool to analyze initial waterrisk at 38 sites worldwide, which account for 75.0% of its global production. With the aimof enhancing its ability to manage water resources, the Group also commenced a reviewof the status of water recycling efforts. Looking ahead, the Group will continue working toenhance initiatives designed to help protect and ensure the effective use of precious water
resources.
Water risk map* Included in the GRI’s G4 Sustainability Reporting Guidelines.

DIC Report 2018

94

ESH

T

PIC

6LDP&KHPLFDO,QGXVWU\3URPRWHVWKH5HF\FOLQJRI:DVWHZDWHU
6LDP&KHPLFDO,QGXVWU\XVHVDSSUR[LPDWHO\PRIZDWHUUHVRXUFHVSHUGD\ZLWK²
DURXQG  P  ²XVHG LQ PDQXIDFWXULQJ DQG ²DSSUR[LPDWHO\  P  —discharged aswastewater. Using a water recycling facility, the company has endeavored to treat and reuse
WKLV ZDVWHZDWHU ,Q ILVFDO \HDU  WKH FRPSDQ\ LQVWDOOHG D FOHDQLQJ WRZHU FDSDEOH RI
UHF\FOLQJPSHUKRXUDVDUHVXOWRIZKLFKLWFXUUHQWO\UHF\FOHV±P of wastewater
daily. Looking ahead, the company will continue promoting initiatives aimed at advancing therecycling of water resources.

Scope of Reporting for the Withdrawal of Fresh Water and the Discharge of Wastewater%HJLQQLQJLQILVFDO\HDUWKH',&*URXSKDVDGRSWHGDQHZ
format that calls for gathering data on the withdrawal of fresh waterby source and the discharge of wastewater by destination. WithWKLV FKDQJH WKH *URXS DOVR VWDUWHG FDOFXODWLQJ ZDWHU UHF\FOHGbut difficulties with measurement and data collection prevented a
FDOFXODWLRQRIWKHWRWDOYROXPH*RLQJIRUZDUGWKH*URXSZLOOWDNH
steps to ensure the accuracy of this calculation.

)UHVK:DWHU:LWKGUDZQE\WKH*OREDODIC Group in Fiscal Year 2017

:DVWHZDWHU'LVFKDUJHGE\WKH*OREDODIC Group in Fiscal Year 2017

41,308,000 ㎥

38,822,000 ㎥

-0.5%

+3.3%

IURP¿VFDO\HDU

Fresh water withdrawn (1,000 m3)
Global DIC Group

Surface water

17,166

19,695Groundwater

7,327

8,835

0

0

Wastewater generated byother organizations

2,061

2,062

Tap water/industrial water

5,724

10,362

48

354

Total

32,32741,308

Total in fiscal year 2016

30,513

41,528

5.9%

-0.5%

OthersChange from previous year

3

Wastewater discharged (1,000 m3)

Japan

Rainwater

IURP¿VFDO\HDU

Japan

Global DIC GroupRivers

20,372

20,644

Oceans

7,121

7,122

External treatment facilities

3,511

4,394

Below ground0

3

Third parties

0

192

Others0

6,467

31,00538,822

Total in fiscal year 2016

28,16837,593

Change from previous year

10.1%

3.3%

Total

Soil and Groundwater Pollution Studies-DSDQ¶V:DWHU3ROOXWLRQ&RQWURO$FWZDVUHYLVHGLQWRWLJKWHQVWUXFWXUDOVWDQGDUGVJRYHUQLQJHTXLSPHQWLQVWDOOHGWRSUHYHQWJURXQGZDWHU
contamination by chemical substances. In addition to complying strictly with this Act and with the Soil Contamination Countermeasures Act,
WKH',&*URXSLQ-DSDQLPSOHPHQWVVRLODQGJURXQGZDWHUVXUYH\VDQGFRXQWHUPHDVXUHVDVQHFHVVDU\DQGDVVHVVHVUHODWHGHQYLURQPHQWDO
and safety risks.

DIC Report 2018

95

ESH

SOx and NOx Emissions Volumes(Metric tonnes)

300

204
202

200
100

58

44

0

’
90

’
13

185
142

177
137

36 46

35 38

’
14

’
15

SOx emissions

DIC

DIC Group (Japan)

NOx emissions

DIC

DIC Group (Japan)

156
127
33 42

186
147
10 14

’
16

’
17

(FY)

COD
(Metric tonnes)

’
90

’
13

DIC

’
14

’
15

’
16

571

783

831
590

655

530

527

495

500

844

1,000

0

5

186
150

491

Taking fiscal year 1990 as the base year, DIC
Group companies in Japan have worked toreduce sulfur oxide (SOx) and nitrogen oxide(NOx) emissions—key causes of acid rain—fromboilers. The Group is also working to reduce
chemical oxygen demand (COD), an indicator ofwater quality deterioration in wastewater, thereby
enhancing its water quality management.
Overseas, Group companies are also switchingfuel from diesel to natural gas and replacing
diesel-fired and heavy oil–fired boilers with
waste wood–fired biomass boilers at sites withappropriate infrastructure. To reduce COD,
the Group is promoting the reuse of water andinstalling environment-friendly closed-loop
recycling and wastewater treatment systems at its
sites that purify water to a level that exceeds thelegally mandated level.

745

Reducing SOx, NOx and COD

4’
17 (FY)DIC Group (Japan)

Complying with Regulations Governing Emissions of Dioxins

In Japan, the DIC Group monitors emissions of dioxins from waste incinerators that produce these byproducts, a group of compounds withvarying toxicities. At present, the Group has six such facilities. Continuous efforts to reduce emissions levels have enabled the Group toachieve results that greatly surpass standards specified in the Law Concerning Special Measures Against Dioxins.

Dioxin Emissions from DIC Group Incinerators in Japan
Site

Scale of facility(incinerating
capacity)

Waste gasStandard(ng-TEC/Nm3)

Wastewater

Emissions reported in fiscal
year 2016 (ng-TEC/Nm3)

reported in fiscal
Standard (ng-TEC/Nm3) Emissions
year 2016 (ng-TEC/Nm3)

Chiba Plant (DIC)

Approx.

3 metric tonnes/hr

5

0.019

10

0.030

Hokuriku Plant (DIC)

0.28 metric tonnes/hr

50.00016100.00300.1 metric tonnes/hr

10

0.21

NA

–

DIC Interior Co., Ltd.

Approx.

Hokkaido Plant(DIC Kitanihon Polymer Co., Ltd.)

Approx.

0.2 metric tonnes/hr

10

0.05

NA

–

Tohoku Plant(DIC Kitanihon Polymer Co., Ltd.)

Approx.

0.2 metric tonnes/hr

10

0.030

NA

–

Harima Plant(Seiko PMC Corporation)

Approx.

0.2 metric tonnes/hr

10

0.75

NA

–

DIC Report 2018

96

ESH

Reducing Industrial Waste
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives

Reduce industrial waste disposed ofas landfill (“zero emissions”).
Reduce industrial waste generated
by production facilities.

Promote recycling.

Goals for fiscal year 2017

Achievements in fiscal year 2017

Implement measures at each site with thefollowing goal:• Reduce industrial waste disposed of as
landfill (for sites that have achieved“zero emissions,” maintain that status)(cumulative total of targets for domestic
production facilities: 69.9 metric tonnes(-62.0% from fiscal year 2016)).

• Industrial waste disposed of as landfill
DIC Group (Japan): 148 metric tonnes(-19.0% from fiscal year 2016)• Industrial waste generated by production
facilities
DIC Group (Japan): 32,336 metric tonnes(+3.0% from fiscal year 2016)

Promote recycling at DIC Group companies and set a target for resource
recycling rate.

DIC Group (Japan) resource recycling rate:
93.0% (-7.0 percentage points from fiscal
year 2016)

Evaluation

Goals for fiscal year 2018★

Implement measures at each site with thefollowing goal:• Reduce industrial waste disposed of as
landfill (for sites that have achieved “zeroe m i s s i o n s ,” m a i n t a i n t h a t s t a t u s)
(cumulative total of targets for domestic
production facilities: 147 metric tonnes(-1% from fiscal year 2017)).

★★

Promote recycling at DIC Group companies and set a target for resource
recycling rate.

Basic Approach
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DQGRQVLWHFRQ¿UPDWLRQE\GHVLJQDWHGGHSDUWPHQWVDWHDFKRILWVSURGXFWLRQIDFLOLWLHV* =HURHPLVVLRQVLQLWLDWLYHV',&LVSURPRWLQJLQLWLDWLYHVDLPHGDWUHGXFLQJWKHYROXPHRIZDVWHGLVSRVHGRIDVODQG¿OOE\IURPWKH¿VFDO\HDUOHYHO| Principal Initiatives in Fiscal Year 2017
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7KH',&*URXSZRUNVDFWLYHO\WRUHGXFHLWVGLVSRVDORILQGXVWULDOZDVWHDVODQG¿OOE\UHF\FOLQJFLQGHUVGXVWDQGVOXGJHLQWRDPRQJRWKHUVURDGEHGPDWHULDOVDQGUDZPDWHULDOVIRUFHPHQWXVLQJWKHUPDOUHF\FOLQJWRUHFRYHUZDVWHKHDWDQGUHGXFLQJSURGXFWLRQORVVHVE\LQFUHDVLQJ\LHOGVInitiatives by the DIC Group in Japan,Q¿VFDO\HDUWKHWRWDOYROXPHRILQGXVWULDOZDVWHGLVSRVHGRIDVODQG¿OOE\WKH',&*URXSLQ-DSDQDPRXQWHGWRPHWULFWRQQHVGRZQIURP¿VFDO\HDU7KLVUHVXOWZDVDWWULEXWDEOHSULPDULO\WRWKHXSGDWLQJRIHTXLSPHQWDWSURGXFWLRQIDFLOLWLHVZKLFKOHGWRDRQHWLPHGHFOLQHLQ
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companies in Japan will step up the implementation initiatives aimed at achieving zero emissions.
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DGGLWLRQWKHVHFRPSDQLHVSURPRWHGWKHVWULFWPDQDJHPHQWRIXQSURFHVVHGZDVWHLQFOXGLQJWUDQVIRUPHUVFDSDFLWRUVDQGVWDELOL]HUVWKURXJKSURSHU
collection and storage in dedicated warehouses.

DIC Report 2018

97

ESH

,QGXVWULDO:DVWH'LVSRVHGRIDV/DQGÀOO
（Metric tonnes）

DIC

125
320

89
232

90
207

104
158

48
106

44
86

49
80

116
139

97
183

97
148

01

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17 （FY）

DIC Group (Japan)| Deployment of Comprehensive
Industrial Waste Management System,Q ILVFDO \HDU  WKH ',& *URXS LQ -DSDQ
explored the introduction and conducted tests ofa comprehensive industrial waste management
V\VWHPIRUXVHZLWKWKHFRXQWU\¶V(OHFWURQLF0DQLIHVWH0DQLIHVW  V\VWHP 7KH H0DQLIHVW V\VWHPmanages the movement of industrial waste byfacilitating the electronic transmission of manifest
information and tracking of the flow of waste from
JHQHUDWLRQWR¿QDOGLVSRVDO8QOLNHSDSHUPDQLIHVWVWKHH0DQLIHVWV\VWHPRIIHUVHDV\GDWDLQSXWDQG
eliminates the need for administrative reporting andstorage by generators.
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0DQDJHPHQW/DZH[SHFWHGWRLQFUHDVHGHPDQGIRU
JUHDWHUPDQLIHVWGDWDWUDQVSDUHQF\',&UHVROYHGWR
introduce an industrial waste management systemthat would facilitate the efficient collection of data
while also ensuring legal and regulatory compliance.
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Japan and intends to gradually expand deployment
in the years ahead.

02

Fiscal year 2017

128
537

00

metrictonnes312
991

Fiscal year 20170（Base year）

148

metrictonnes

537
1,288

3,000

97
1,560
2,296

3,426
4,326

8％

6,000

DIC Group(Japan)

DIC
4,190

+

9,000

5,581

DIC Group (Japan)

7,981

Industrial Waste Generated in
Fiscal Year 2017

Differences Between the e-Manifest System and Paper Manifests
e-Manifests

Paper manifests
Generator

Sending andreceipt of e-manifest

e-Manifest
registration

Waste

Delivery of
paper manifest

Transporter
Japan
Industrial
Waste Information
Center(JWnet)Report on thecompletion of transport

Report on thecompletion of transport

Waste

Disposer

Report on the completion ofintermediate treatment/
Report on the completion of
final disposal

Report on the completion ofintermediate treatment/
Report on the completion of final disposal

Comprehensive Industrial Waste Management System
Groupwide management ofwaste by typeManagement in accordancewith specific rules

System provider

DIC Group in Japan
Generators（JWnet）
Disposers

Corporate headquarters
Substances of value

Sites

Industrial waste

General waste

Sites

Organization-wide
management of information
Management of paper manifests and e-Manifests

DIC Report 201898

Management of permits and contracts

ESH

VOICE Our goal is to ensure that GENESYS–ECO is easy to use for all employees involved inindustrial waste management, from beginners to veterans.
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Initiatives by the DIC Group Overseas,QDGGLWLRQWRHQVXULQJWKHGLVSRVDORILQGXVWULDOZDVWHLQDPDQQHUWKDWFRPSOLHVZLWKQDWLRQDODQGUHJLRQDOOHJDODQGUHJXODWRU\UHTXLUHPHQWVWKH',&*URXS¶VRYHUVHDVSURGXFWLRQIDFLOLWLHV
work to minimize industrial waste through the voluntary recycling and reuse of materials.
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T

PICS

Newly Installed Thermal Combustion System at DIC Graphics*XDQJ]KRX )DFLOLWDWHVWKH(IÀFLHQW7UHDWPHQWRI92&V,Q$XJXVW',&*UDSKLFV *XDQJ]KRX LQVWDOOHGDQHZV\VWHPIRUWKHUPDOO\GHFRPSRVLQJDQGGHRGRUL]LQJ92&VLQ
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1HZV\VWHPIRUWKHUPDOO\GHFRPSRVLQJDQGGHRGRUL]LQJ92&V

DIC (Malaysia) Reduces Environmental Impact by Renovating its
Wastewater Treatment System:LWKWKHLQVWDELOLW\RIWUHDWPHQWXVLQJLWVH[LVWLQJZDVWHZDWHUWUHDWPHQWV\VWHPDQLVVXHIURPDQHQYLURQPHQWDOFRPSOLDQFHSHUVSHFWLYHSULQWLQJLQNVPDQXIDFWXUHU',& 0DOD\VLD VXVSHQGHGRSHUDWLRQRIWKHV\VWHPRSWLQJLQVWHDGWRGLVSRVH
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Department worked with the company to develop a stable wastewater treatment process and made necessary renovations
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Renovated wastewater treatment system

DIC’s Komaki Plant Separates Plant Wastewater and Rainwater
Discharge Routes in Line with ESH Audit Suggestion
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Separate discharge routes for plant wastewater and rainwater

ESH| Environmental Impact of the DIC Group’s Operating Activities

Production
volumeTotal energy consumption(crude oil equivalent)

4,313,000GJ-0930,000
metric tonnes

OUTPUTDIC Group(Japan)INPUT

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7KHFKDUWEHORZLVDFRPSUHKHQVLYHLOOXVWUDWLRQRIWKHHQYLURQPHQWDOLPSDFWRIWKH',&*URXS¶VGRPHVWLFRSHUDWLQJDFWLYLWLHVLQ¿VFDO\HDU7KHFKDUWVKRZVHQYLURQPHQWDOLPSDFWIRUWZRLQSXWLWHPV WRWDOHQHUJ\FRQVXPSWLRQDQGWRWDOZDWHUFRQVXPSWLRQ DQGVL[RXWSXWLWHPV HPLVVLRQVRIFKHPLFDOVXEVWDQFHV LQFOXGLQJWKRVHGHVLJQDWHGXQGHUWKH3575  DQGRQHVXEVWDQFHJURXS HPLVVLRQVRI&2HPLVVLRQVRI12[HPLVVLRQVRI62[&2'LQZDVWHZDWHUDQGLQGXVWULDOZDVWHGLVSRVHGRIDVODQG¿OO

*1,972,000
metric tonnes（+1.1％）

metric tonnes from fiscal year 2016371 -3.6% 13.9

Wastewater discharged

31,005,000%
from fiscal year 2016

148

-19.1%

from fiscal year 2016

Soil-related emissions oftargeted substances(551 substances andmetricone substance group)
tonnes2.1

0

CO2 emissions

390,000 -6.4%

metric tonnes from fiscal year 2016

Industrial waste
disposed of as landfill

21,726 -12.2
metric tonnes

Wastewater
discharged

7,817,000m3-17.0 %

Emissions into soil%
from fiscal year 2016

metrictonnesEmissions into the air

Total water
consumption

8,981,000 ㎥ -18.5

fiscalyear 2016-66.9 % from

Industrial waste disposedof as landfill

+10.1

%
m3 from fiscal year 2016

Aquatic emissions of targeted substances(551 substances andtimes
metricone substance group)
tonnes from fiscal year 201625

fiscalyear 2016+19.2% fromEmissions into soil

COD inmetric -11.2 %wastewater 783 tonnes from fiscal year 2016

OUTPUT

INPUT

6,740,000 GJ -4.6

metrictonnesEmissions into waterfrom fiscal% year 2016

Total energy consumption(crude oil equivalent)

metrictonnesSOx emissions

metric tonnes from fiscal year 2016

32,327,000㎥+5.9

NOx emissions

Atmospheric emissions of targeted substances(551 substances and one substance group)from fiscal% year 2016

Total water
consumption

Production
volumeCO2 emissions

244,000 +0.9% 186* Renewable energy is not included in the above figure.

（+2.9％）DIC Group(Overseas)

Emissions into the air

the fiscal year 2016%

from fiscal year 2016

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amounts transferred off-site from industrial establishments via waste products.
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DIC Report 2018

100

ESH

Managing Chemical Substances in Products
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives

Respond to requirement s
relating to chemical productinformation.

Comply with regulations in
J a p a n a n d ove r s e a s (e.g.,
Japan’s Act on the Evaluation ofChemical Substances andRegulation of Their Manufacture, etc., and Poisonous andDeleterious Substances Control
Act; the EU’s REACH legislation; and the U.S.’ TSCA.

Goals for fiscal year 2017

Achievements in fiscal year 2017

• Rebuild comprehensive system for
managing chemical substances.
• Reinforce local information-gathering
configurations.

• Comprehensive system for managing c hemic al subst anc es wascompleted and alignment with its
SAP system was reinforced.
• Steps were taken to fortify support
for overseas Group companies
through full-time managers
assigned to regional headquarters.

• Promote compliance with the Act on
the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc.
• Expand deployment of the Wercs atoverseas DIC Group companies.
• Promote the registration of chemical
substances to which REACH applies.
• Complete compliance with reporting
requirements imposed by the TSCA
Inventory Reset.

• Information was gathered on the revised Act on
the Evaluation of Chemical Substances andRegulation of Their Manufacture, etc., andnegotiations were conducted through work withindustry associations.
• A GHS-compliant label creation system linked to
the Wercs was introduced at four Group
companies in Thailand and Malaysia.
• Efforts to promote the registration of chemical
substances to which REACH applies continued.
• Compliance with reporting requirements imposedby the TSCA Inventory Reset were completed.

Evaluation

★★★

★★

★★

★★
★★

Goals for fiscal year 2018

• Enhance functions of the comprehensive system for managing
chemical substances.
• Continue to expand deployment of theWercs at overseas DIC Group companies.

• Prom ote c omplianc e w it h t herevised Act on the Evaluation ofChemical Substances and Regulation of Their Manufacture, etc.
• Prom ote c omplianc e w it h t he
ROK’s revised K-REACH.
• Complete registration of chemical
substances to which REACH applies.

★★

Basic Approach
As a comprehensive global chemicals manufacturer, DIC approaches compliance with laws and regulations and the effective management of risks
as essential to its survival. The Group works to maintain a solid grasp of laws and regulations in different countries and territories, and of trends
relevant thereto, thereby ensuring its ability to design products that comply with regulations governing the use of chemical substances in products.
The Group also strives to respond to requirements relating to the disclosure of information on chemical substances, thereby ensuring the safety ofchemicals and products.
In 2002, participants in the World Summit on Sustainable Development (WSSD) in Johannesburg, South Africa, agreed on a goal for the
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newly included in such agreements, as well as to actively provide information on chemical substances, with the aim of reducing risks to society.
As an expert in the management of chemical substances, DIC plays an active role in considering issues pertaining to chemical safety andregulations and developing responses through its participation in industry associations.

| Managing Chemical Substances
Ensuring the Swift Provision of Reliable SDSs
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display of information on labels for better understanding and the provision of SDSs.
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across its entire supply chain, DIC has sought to respond swiftly to this development, as well as to provide customers with crucial hazard-related information.
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101

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Promoting the Global Deployment of the Wercs Label Creation System
In 2013, DIC began using the Wercs (a global SDS and label creation system developed with know-how from DIC) for products for export.
As a result, DIC now has a structure that enables it to compile GHS-compliant SDSs for all exported products that comply with national andregional laws and regulations and is accessible in relevant local languages. In April 2014, DIC began using the Wercs to issue SDSs and
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Framework for Promoting the Safety of Chemical Substances and Products

CIRIUS / The Wercs
Centralize management of
information on raw materials

Foster experts

Synergies

Centralize management ofchemical substance information

Licensing system

Raise employee expertise

Training
Labels can beprepared in

46 languages

Provide highly reliable SDSs and create GHS-compliant labels

Risk Management Across the Supply Chain,QOLQHZLWKWKH',&*URXS8QLYHUVDO3XUFKDVLQJ3ROLF\',&IRUPXODWHGWKH',&*URXS*UHHQ3URFXUHPHQW*XLGHOLQHVZKLFKSURKLELWWKH
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❶ Substances the production of which is prohibited, as outlined in Article 55 of Japan’s Industrial Health and Safety Act;
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5HJXODWLRQRI7KHLU0DQXIDFWXUHHWF
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7KHLU0DQXIDFWXUHHWF
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7KURXJKWKH&RQWURORI6SHFL¿HG6XEVWDQFHVDQG2WKHU0HDVXUHV R]RQHGHSOHWLQJVXEVWDQFHVOLVWHGLQWKH0RQWUHDO3URWRFRO ❺ 6SHFL¿HGSDUWLFXODWHVGHQRWHGLQ-DSDQ¶V$LU3ROOXWLRQ&RQWURO$FW❻ 6SHFL¿HGSRLVRQRXVVXEVWDQFHVLQGLFDWHGLQ-DSDQ¶V3RLVRQRXVDQG'HOHWHULRXV6XEVWDQFHV&RQWURO$FWDQG
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Position on the Use of Animals in Testing,QOLQHZLWKWKH5VRIDQLPDOXVHLQUHVHDUFK ³5HSODFHPHQW5HGXFWLRQ5H¿QHPHQW´ ZKLFKDUHJXLGHOLQHVGHVLJQHGWRHQVXUHWKHPRUHHWKLFDOXVHRIDQLPDOVLQWHVWLQJWKH',&*URXSDFWLYHO\SURPRWHVVDIHHYDOXDWLRQXVLQJTXDQWLWDWLYHVWUXFWXUH±DFWLYLW\UHODWLRQVKLS 46$5 models, which do not employ animals, and alternatives to animal testing.

DIC Report 2018

102

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| Reducing Risks through the Global Provision of Information
Information on Raw Materials and Chemical Substances in Imported Products in JapanIn April 2013, DIC consolidated the management of information on the composition of chemical
substances in exported products and on chemical substance legislation in various countries andregions, introducing the Wercs, a new system that automatically creates product SDSs in thelanguage—and in compliance with the laws and regulations—of individual export destinations,creating a foundation for its global information system and helping reduce risks for customers.
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information on raw materials and chemical substances. To facilitate the provision of reliable SDSs,',&SURYLGHVLQIRUPDWLRQRQFKHPLFDOVXEVWDQFHVXVLQJ&,5,86LQ-DSDQ&,5,86DXWRPDWLFDOO\FKHFNV)RUHLJQ([FKDQJHDQG)RUHLJQ7UDGH$FW±EDVHGVHFXUHWUDGH
and the Wercs overseas
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0DQXIDFWXUHHWFWKH&KHPLFDO6XEVWDQFHV&RQWURO/DZDQGWKH,QGXVWULDO6DIHW\DQG+HDOWK$FWDQGWKH3RLVRQRXVDQG'HOHWHULRXV6XEVWDQFHV&RQWURO$FW7KH:HUFVZKLFKLQFRUSRUDWHVNQRZKRZDFFXPXODWHGE\',&LQWKHFUHDWLRQDQGXVHRI&,5,86ZDVGHYHORSHGZLWKWKHDLPRIH[SHGLWLQJWKHSURYLVLRQRIVXFKLQIRUPDWLRQfor products for export. The Wercs facilitates the translation of data into 46 different languages—including the languages of the 19 countries and territories to which DIC
currently exports products—and the preparation of SDSs and labels in local languages that comply with laws and regulations in the Americas, Europe, Asia and elsewhere.
Since switching to the Wercs for creating SDSs and issuing labels for exported products, DIC has expanded the number of countries for which it can prepare local-language,OHJDOO\FRPSOLDQW6'6VDQGODEHOVWRLQFOXGHWKH52.(XURSHWKH8QLWHG6WDWHVWKH35&DQG7DLZDQ6LQFH$SULODOO6'6VDQGODEHOVIRUSURGXFWVIRUH[SRUWKDYHEHHQSUHSDUHGXVLQJWKH:HUFV',&LVDOVRSURPRWLQJGHSOR\PHQWRIWKHV\VWHPWR*URXSFRPSDQLHVLQ-DSDQZKLFKDUHXVLQJWKH:HUFVLQWDQGHPZLWK&,5,86WRHQVXUHWKH
effective management of chemical substances across its domestic Group supply chain.

Global Deployment of the Wercs

Expanding Deployment of the Wercs at Overseas Group Companies
In fiscal year 2015, DIC began deploying the Wercs at GroupFRPSDQLHVRYHUVHDV,QILVFDO\HDUWKH:HUFVZDVLQWURGXFHG
DWDQDGGLWLRQDO¿YHRYHUVHDVFRPSDQLHVEULQJLQJWRWKHQXPEHU
of companies using the system. With the aim of promptly updating its
labels to comply with GHS hazard labeling standards in the event of
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LQ¿VFDO\HDUWKH&RPSDQ\VHWXSDQRQGHPDQGODEHOSULQWLQJ
V\VWHPWKDWOLQNVWKH:HUFVZLWKLWV6$3V\VWHP,Q¿VFDO\HDU
the Company began deploying this system at companies that havealready introduced the Wercs. Through these and other efforts, DIC
DLPVWRSUHYHQWKXPDQHUURUDQGLQFUHDVHEXVLQHVVHI¿FLHQF\DVZHOODV
to facilitate globally consistent management based on a common system.

Fiscal year 2013

Japan (four companies): DIC, DIC Graphics, DIC Kitanihon
3RO\PHU&R/WGDQG6HLNR30&&RUSRUDWLRQ

Fiscal year 2014—

Fiscal year 2015

,QGRQHVLD 7KUHHFRPSDQLHV
0DOD\VLD 7ZRFRPSDQLHV
7KDLODQG 7ZRFRPSDQLHV
35& )LYHFRPSDQLHV
Taiwan (Two companies)
6LQJDSRUH 2QHFRPSDQ\Fiscal year 2016

7DLZDQ 2QHFRPSDQ\Fiscal year 2017

6LQJDSRUH 2QHFRPSDQ\
3KLOLSSLQHV 2QHFRPSDQ\
9LHWQDP 2QHFRPSDQ\
6UL/DQND 2QHFRPSDQ\3DNLVWDQ 2QHFRPSDQ\Fiscal year 2018
(Scheduled）,QGLD 2QHFRPSDQ\
35& 2QHFRPSDQ\'HSOR\PHQWLVFRPSOHWH

The DIC Group’s Comprehensive Global Chemical Information Systems

EuropeFiscal year 2018:

Asia

Deployment
in India

North America
Japan

AfricaCentral and SouthAmerica
Oceania

DIC Report 2018103

Japan (DIC Corporation)

CIRIUS

Asia–Pacific region

The Wercs

North and South America, Europe,
Africa and Russia (Sun Chemical),Australia (DIC)

ATRION

ESH| Complying with Laws and Regulations
Ensuring Prompt Responses to Regulatory Changes Worldwide
The principal goal governing the management of chemical substances worldwide is that implied in the agreement, reached at the WSSD in 2002, to ensure,
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legislation aimed at strengthening chemical substances risk management. As well, countries in Southeast Asia have deployed the GHS.
DIC collects the latest information on chemical substances in overseas markets through international consultants and experts, news wire services and
FKHPLFDOVLQGXVWU\DVVRFLDWLRQVWRHQVXUHWKDWLWFDQUHVSRQGVZLIWO\DQGHIIHFWLYHO\WRUHYLVLRQVLQODZV,QWKH&RPSDQ\EHJDQXVLQJ&,5,86WRPDQDJHFKHPLFDOVXEVWDQFHLQIRUPDWLRQIRUSURGXFWVPDQXIDFWXUHGLQ-DSDQ,Q¿VFDO\HDU',&VZLWFKHGWRWKH:HUFVIRUFUHDWLQJ6'6VDQGLVVXLQJlabels for existing exported products, accelerating its ability to provide information to customers.
,Q¿VFDO\HDUVDQGVWHSVZHUHWDNHQDFURVV$VLDWRUHLQIRUFHWKHPDQDJHPHQWRIFKHPLFDOVXEVWDQFHV2ISDUWLFXODUQRWHWKH35&DQQRXQFHGDQHZDVVHVVPHQWDJHQF\DVSDUWRILWVV\VWHPIRUUHJLVWHULQJKD]DUGRXVFKHPLFDOVZKLOHWKH52.GUDPDWLFDOO\UHYLVHGWKH$FWRQWKH5HJLVWUDWLRQDQG
(YDOXDWLRQRI&KHPLFDOV .±5($&+ DQG7KDLODQGDQG9LHWQDPSURFHHGHGZLWKSUHSDUDWLRQWRLQWURGXFHDQHZV\VWHPIRUUHJLVWHULQJFKHPLFDOVXEVWDQFHVGroupwide Efforts to Create a Stronger Compliance Framework
To ensure an accurate grasp of trends, DIC has worked steadily to strengthen communication with local Group companies and in fiscal year 2016
UHLQIRUFHGLWVPDQDJHPHQWIUDPHZRUNE\DVVLJQLQJGHGLFDWHGIXOOWLPHPDQDJHUVWRUHJLRQDOKHDGTXDUWHUVIRU*UHDWHU&KLQDDQGWKH$VLD±3DFLILF
UHJLRQ5HFHQWO\',&KHOGGLVFXVVLRQVZLWKOHJDODQGUHJXODWRU\H[SHUWVIURP6XQ&KHPLFDOWKDWUHVXOWHGLQDQDJUHHPHQWWRFRRSHUDWHFORVHO\LQDmanner that capitalizes on the strengths of both companies.
,QWKH8QLWHG6WDWHVVXEVWDQWLDOUHYLVLRQVZHUHPDGHWRWKH7R[LF6XEVWDQFHV&RQWURO$FW 76&$ 1 in fiscal year 2016, requiring a comprehensive
inventory reset (review of existing chemicals on the TSCA list). DIC and Sun Chemical completed compliance with reporting requirements imposed
E\WKLVUHVHW,QDGYDQFHRIWKH0D\GHDGOLQHIRUUHJLVWHULQJH[LVWLQJFKHPLFDOVXEVWDQFHVXQGHU5($&+ 2, DIC is registering existing exported
low-volume chemical substances, i.e., those produced in volumes up to 100 metric tonnes per year, as well as promoting ongoing efforts to
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substances of very high concern (SVHCs).
7KH76&$LVDODZDGPLQLVWHUHGE\WKH86(QYLURQPHQWDO3URWHFWLRQ$JHQF\ (3$ WKDWUHJXODWHVFKHPLFDOVXEVWDQFHVSURGXFHGLQRULPSRUWHGLQWRWKH8QLWHG6WDWHV
8QGHU5($&+EXVLQHVVHVEHDUIXOOUHVSRQVLELOLW\IRUHYDOXDWLQJWKHVDIHW\RIFKHPLFDOVXEVWDQFHVWKH\SURGXFHDQGRUXVHZLWKQRGLVWLQFWLRQPDGHEHWZHHQ³H[LVWLQJ´DQG
³QHZ´VXEVWDQFHV5($&+DOVRSURKLELWVWKHXVHRIVSHFL¿HGFKHPLFDOVXEVWDQFHVWKDWSRVHXQDFFHSWDEOHULVNVWRKXPDQKHDOWKVOICE DIC and Sun Chemical are collaborating to promote a chemical substance management project.
DIC and Sun Chemical are engaged in a project to identify the criteria needed, and the framework required, for an undertaking to support a global chemical
FRPPXQLFDWLRQPDQDJHPHQWV\VWHP7KLVSURMHFWVHHNVWRGH¿QHVSHFL¿FFKHPLFDOFULWHULDWKDWPXVWEHXWLOL]HGWRDVVXUHFRPSOLDQFHZLWKUHJXODWLRQVDQ\ZKHUHLQWKHZRUOG7KHSURMHFWZLOOLQYROYHGHYHORSLQJDQ6$3LQWHJUDWLRQ,7SODWIRUPWKDWLVVHDPOHVVO\DFFHVVLEOHE\JOREDOEHQH¿FLDULHV7KLVZLOOUHTXLUHDQ,7LQYHVWPHQW
platform designed to uniformly characterize the chemical composition and safety risk of purchased materials and manufactured commercial products; a system,
process, tools and discipline to continuously identify and maintain material characteristic consistencies with both chemical data and system deliverables, suchDV6'6VDQGODEHOVDQGUREXVWVXSSRUWIRUQHZDQGRQHURXVFKHPLFDOFRQWUROUHJXODWLRQV LHWKH86(3$76&$UHVHW.5($&+DQG*OREDO*+6 DQGWRDFFRPPRGDWHLQWHUQDWLRQDOODQJXDJHUHTXLUHPHQWV2XUREMHFWLYHLVWRSURYLGHOHYHUDJHWRKHOSHVWDEOLVKPDWHULDO¿WQHVVJXLGDQFHZLWKJOREDOFXVWRPHUVDQGEUDQG
owners and, ultimately, to create a platform to support technological innovation and assist in the coordination of global procurement activities.
Global Regulatory Director, Sun Chemical Corporation Robert Kendrick| Training in Chemical Substance Management
Specialized Training Under DIC’s Licensing System
As a comprehensive global chemicals manufacturer, DIC recognizes legal and regulatory compliance as central to risk management and endeavors to improve
employees’ awareness and knowledge of chemical substance regulations in Japan and overseas by holding workshops and maintaining a proprietary internal
licensing system. Efforts include providing specialized training for individuals in Japan involved in exporting chemical substances in line with the Foreign Exchange
DQG)RUHLJQ7UDGH$FWDQGIRULQGLYLGXDOVLQYROYHGLQLPSRUWLQJFKHPLFDOVXEVWDQFHVLQOLQHZLWKWKH$FWRQWKH(YDOXDWLRQRI&KHPLFDO6XEVWDQFHVDQG5HJXODWLRQRI
7KHLU0DQXIDFWXUHHWFDVZHOODVLVVXLQJOLFHQVHVYDOLGIRUWZRRUWKUHH\HDUVWRHPSOR\HHVZKRKDYHSDVVHGLQKRXVHH[DPLQDWLRQV$VRI¿VFDO\HDU
HPSOR\HHVKHOGD&ODVV$OLFHQVHZKLFKUHTXLUHVVSHFLDOL]HGNQRZOHGJHDQGKHOGD&ODVV%OLFHQVHZKLFKSHUWDLQVWRDQFLOODU\RSHUDWLRQVZKLOHDIXUWKHULQGLYLGXDOVKDGFRPSOHWHGDQDGYDQFHGFRXUVHGHPDQGLQJVXSHULRUFDSDELOLWLHVWKDWZDVLQWURGXFHGLQ¿VFDO\HDU,QDGGLWLRQLQGLYLGXDOVKHOGLPSRUWOLFHQVHVDIC Report 2018

104

ESH

Export Licenses
Class A licenses

1,473
Class B licenses

Import Licenses
Advanced course
licenses

98

304

194
Seminar on laws and regulations governing chemical substance management
IRU*URXSFRPSDQLHVLQWKH35&KHOGLQ+DQJ]KRX'LVSDWFKLQJ2I¿FHUVWR3URYLGH7UDLQLQJLQ8VHRIWKH:HUFV:LWKWKHIXOOÀHGJHGGHSOR\PHQWRIWKH:HUFVVLQFH¿VFDO\HDU',&KDVGLVSDWFKHG5HVSRQVLEOH&DUH'HSDUWPHQWRI¿FHUVWRKROGVHPLQDUVDWSULQFLSDO*URXSFRPSDQLHVLQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQ,Q¿VFDO\HDUWKH*URXSEHJDQSURYLGLQJWUDLQLQJWDLORUHGWRORFDOODZVDQGUHJXODWLRQVJRYHUQLQJFKHPLFDOVXEVWDQFHV2ZLQJWRDPDMRURYHUKDXORIWKH:HUFVLQ¿VFDO\HDUWZRRI¿FHUVLQFKDUJHRISHUWLQHQWODZVDQGUHJXODWLRQVLQ6LQJDSRUH
DQGWKH35&DOVRSURYLGHGUHWUDLQLQJWRDSSUR[LPDWHO\XVHUVIURPRYHUVHDVFRPSDQLHV*RLQJIRUZDUGFRUSRUDWHKHDGTXDUWHUVDQGUHJLRQDOKHDGTXDUWHUV
will collaborate to promote initiatives aimed at reinforcing the ability of overseas Group companies to respond effectively to these laws and regulations.
Training seminars for the Wercs go beyond explaining the system’s operations and advantages. It is important for participants to understand thebackground and intent of legal revisions and to steadily amass basic data and update information. Constantly inputting such information into the system
maximizes the potential of the Wercs, making it possible to provide valuable and timely information to customers and reduce overall risks to society as
a whole. Taking the opinions and impressions of participants into consideration, DIC will continue to promote efforts to improve operability and datatransmission speed with the aim of making the Wercs easier to use.

VOICE We are working to improve responsiveness to laws and regulations governing chemical substances.
,DPLQFKDUJHRIUHVSRQVHVWRFKHPLFDOVUHODWHGODZVDQGUHJXODWLRQVLQWKH35&2SHUDWLQJLQDQLQFUHDVLQJO\KDUVKHQYLURQPHQWZHZRUNFRQWLQXRXVO\to improve compliance across all chemicals-related operations by promoting efforts aimed at reinforcing the chemical substance management capabilities
of individual Group companies. We have also added content related to the management of hazardous chemicals to ESH audits to assess the chemical
substance management capabilities of individual production facilities. I oversee training in the use of the Wercs and the BarTender labeling software,
ZKLFKZHDUHXVLQJWRHQVXUHFRPSOLDQFHLQWKHDUHDRIPDWHULDOVVDIHW\GDWDVKHHWV 06'6 DQGODEHOSURGXFWLRQ%\DXGLWLQJWKHHIIRUWVRIWUDGLQJFRPSDQLHVLQWKH35&WRKDQGOHKD]DUGRXVFKHPLFDOVDQGE\SURYLGLQJWUDLQLQJRQODZVSHUWLQHQWWRFKHPLFDO
substances, we will continue working to raise employees’ awareness of laws and regulations governing chemical substances.
Corporate ESH Specialist, DIC (China) Co., Ltd.

DIC Report 2018

105

Wenjing Zhang

ESH

Responsible Logistics*RDOVDQG$FKLHYHPHQWVRI0DMRU,QLWLDWLYHV (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ = Excellent; ★★ 6DWLVIDFWRU\★ 6WLOOQHHGVZRUN
Objective of initiatives

Reduce CO 2 emissions attributable tothe transport of products (Scope 3).

Goal for fiscal year 2017

Achievements in fiscal year 2017

Reduce CO2 emissions by 1.0% by
promoting modal shift and improving
transport efficiency.

1. Energy consumed per unit of production
declined 3.0%.
2. CO2 emissions attributable to thetransport of products declined 2.0%.

Evaluation

Goal for fiscal year 2018★★

Reduce CO 2 emissions by 1.0% by
promoting modal shift and improving
transport efficiency.

★★

| %DVLF3ROLF\DQG)UDPHZRUNIRU3URPRWLQJ,QLWLDWLYHV
DIC’s commitment to promoting Responsible Care encompasses initiatives aimed at ensuring safety in logistics, that is, at lowering chemical risks associatedwith the distribution of chemicals, and at reducing CO2HPLVVLRQVDWWULEXWDEOHWRWKHWUDQVSRUWRILWVSURGXFWV7KH',&*URXS¶VORJLVWLFVFRQ¿JXUDWLRQ²
FRPSRQHQWVRIZKLFKLQFOXGHWUDQVSRUWEHWZHHQSURGXFWLRQIDFLOLWLHVWKHWUDQVSRUWRISURGXFWVWRFXVWRPHUVDQGLQWHUQDWLRQDOORJLVWLFV²SUHYLRXVO\FHQWHUHG
RQDGHGLFDWHGVXEVLGLDU\HVWDEOLVKHGLQWKDWRSHUDWHGXQGHUWKHGLUHFWVXSHUYLVLRQRI',&,QDELGWRUDWLRQDOL]HDQGLQFUHDVHWKHHI¿FLHQF\RIORJLVWLFVLQ',&WUDQVIHUUHGRZQHUVKLSRIWKHVXEVLGLDU\WRDSDUWQHU¿UPDQGEHJDQWRRXWVRXUFHLWVORJLVWLFV6LQFHWKHQWKH*URXSKDVZRUNHGFORVHO\ZLWKWKLVDQGRWKHUSDUWQHU¿UPVWRLPSURYHWKHVDIHW\RIDQGUHGXFH&22 emissions attributable to logistics.
With the aim of better responding to social imperatives associated with the transport of chemicals over the medium to long term, in January 2016 DIC
combined the logistics components of its various departments to create an independent Logistics Department. As a consignor, the new department, which
FRPSULVHVWKUHHVHFWLRQV²GRPHVWLFSODQQLQJRYHUVHDVSODQQLQJDQGWKHJOREDOWUDGLQJJURXS²LVFKDUJHGZLWKIRUPXODWLQJORJLVWLFVSROLFLHVDQGSURPRWLQJHIIRUWVWRHQKDQFHHI¿FLHQF\DVZHOODVZLWKFRRUGLQDWLQJZLWKORJLVWLFVSDUWQHUVWKDWLVWKLUGSDUW\ORJLVWLFV 3/ ¿UPVSURYLGLQJFRPSOHWHRXWVRXUFHG
logistics services, to further enhance safety and reduce environmental impact.
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DIC’s Logistics
Department

Overseas
Group companies
SupporteﬀortsRegular safety
and environment
meetings

Conﬁrmation of
execution(Policy/initiatives/
discussions)Ɣ/RDGLQJDQGXQORDGLQJ
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Product divisions

Logistics firms
Principal DIC production facilities(Health and safety committees)| 6DIHW\0DQDJHPHQWLQ/RJLVWLFV
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and other transportation laws, as well as with related UN standards. The Group supplies information needed
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shipping in Japan and overseas.
,Q-DSDQWKH/RJLVWLFV'HSDUWPHQWFRRSHUDWHVZLWKLWVORJLVWLFVSDUWQHU¿UPVPHHWLQJUHJXODUO\WRGLVFXVV
measures for improving the safety of both loading and transport work. Of particular note, logistics quality
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designated as incidents for priority attention. Targets, number of incidents, causes and countermeasures are
confirmed at monthly meetings to ensure steady improvement. In fiscal year 2017, the incident rate wasSSPGRZQDSSUR[LPDWHO\IURPWKHSUHYLRXVSHULRG0HPEHUVRISODQWKHDOWKDQGVDIHW\FRPPLWWHHVDWWHQGHDFKRWKHUV¶PHHWLQJVWRH[FKDQJHLQIRUPDWLRQDQGSURPRWHRQVLWHVDIHW\LPSURYHPHQWLQLWLDWLYHV
7KH/RJLVWLFV'HSDUWPHQWDOVRLQVSHFWVWKHRIILFHVRIORJLVWLFVSDUWQHUVORFDWHGRQVLWHDWLWVPDLQGRPHVWLFSURGXFWLRQIDFLOLWLHV,Q¿VFDO\HDULQVSHFWLRQVZHUHFRQGXFWHGDWQLQHRIWKHVHRI¿FHVGXULQJ
which issues were pointed out and improvements confirmed. In addition, DIC endeavors to maintain and
HQKDQFHVDIHW\E\UHTXLULQJWUDQVSRUWSHUVRQQHOWRFDUU\<HOORZ&DUGV 
Yellow Cards are part of activities recommended by the JCIA. These cards contain information about the correct actions to take if an accident
RFFXUV7KH\SURYLGHFRQWDFWGHWDLOVWRHQVXUHSURSHUUHVSRQVHVE\WUDQVSRUWDWLRQFRPSDQLHV¿UH¿JKWHUVDQGSROLFHRI¿FHUVLIDQDFFLGHQW
occurs during the transport of chemical substances. Transport personnel must carry these cards at all times.
DIC Report 2018106

Regular meeting with logistics partners

Yellow Card carried by transport personnel

ESH

T

PIC

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cans and other cargo containers from vibration during transport. When DIC products are transported in oil cans, the cans are generally secured with cable ties
DQGSDFNHGRQWRSDOOHWVZKLFKDUHWKHQORDGHGRQWRWUDQVSRUWWUXFNV7HVWVYHUL¿HGWKDWHYHQRQH[WUHPHO\URXJKURDGVFDQVVXIIHUHGQRPDMRUGDPDJHZLWKimpact limited to minor scratches. As a result, the department concluded that damage to cans was occurring when pallets were loaded and unloaded fromtrucks using forklifts, as a result of which it inferred that the risk of damage to cans increases the more times they must be unloaded and reloaded at transfer
SRLQWV7KHGHSDUWPHQWVKDUHGWHVWGDWDZLWKORJLVWLFVSDUWQHUVWRVHUYHDVD\DUGVWLFNIRUMRLQWHIIRUWVWRIRUPXODWHUHPHGLDOPHDVXUHV$VDFRPSDQ\WKDWmanufactures and transports chemical substances, DIC will continue working to ensure the safety of its logistics practices.

| 5HGXFLQJ*UHHQKRXVH*DV(PLVVLRQV$WWULEXWDEOHWR/RJLVWLFV:KLOHWKHYROXPHRISURGXFWVVKLSSHGHGJHGGRZQHQHUJ\FRQVXPSWLRQGHFOLQHGDQG&22HPLVVLRQVDWWULEXWDEOHWRORJLVWLFVGHFUHDVHG(QHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQDWWULEXWDEOHWRORJLVWLFVLPSURYHG7KHVHUHVXOWVZHUHDWWULEXWDEOHSULPDULO\WRRQJRLQJHIIRUWVWRFRPELQH
ORWVDQGWRVKLIWIURPWUXFNWUDQVSRUWWRWUDQVSRUWXVLQJSXUFKDVHGFRQWDLQHUVDVDUHVXOWRIZKLFKWKH*URXS¶VPRGDOVKLIWUDWHURVHSHUFHQWDJHSRLQWVWRIURPLQ¿VFDO\HDUZLWKWUDQVSRUWE\VKLSULVLQJDQGWUDQVSRUWE\UDLOXS
,Q-DSDQDFULWLFDOVKRUWDJHRITXDOL¿HGGULYHUVKDVEHFRPHDVHULRXVLVVXHIRUWKHORJLVWLFVLQGXVWU\7RLPSURYHWKHHIIHFWLYHQHVVRIPHDVXUHVWDNHQWRDGGUHVVWKLVLVVXHWKH/RJLVWLFV'HSDUWPHQWZRUNHGZLWKWKH',&*URXS¶VORJLVWLFVSDUWQHU¿UPVWRFRQGXFWDVXUYH\RIGULYHUV%DVHGRQWKH¿QGLQJVRIWKLVVXUYH\VWHSVZLOOEHWDNHQWRUHGXFHGULYHUV¶ZRUNLQJKRXUVLQFOXGLQJYHULI\LQJVWDQGE\WLPHV²LHWLPHZDLWLQJIRUFDUJRWREHORDGHG²DWSURGXFWLRQIDFLOLWLHVDQGLPSURYLQJWKHHI¿FLHQF\RIRUGHUSLFNLQJDQGLQVSHFWLRQSURFHGXUHVIn a new initiative, DIC commenced shared logistics on a trial basis. This involves collaborating with other chemicals manufacturers to ship products on
RQHWUXFNXVLQJDPLONUXQIRUPDWWKHUHE\UHGXFLQJWKHQXPEHURIWUXFNVQHHGHGLQFUHDVLQJORDGHI¿FLHQF\DQGPLQLPL]LQJHPLVVLRQVRI&22. DIC’s Logistics'HSDUWPHQWLVFXUUHQWO\DQDO\]LQJWKHEHQH¿WVDQGULVNVRIWKLVDSSURDFKDQGZLOOLQFRUSRUDWHLWV¿QGLQJVLQWRDFWLRQSODQVIRUVXEVHTXHQW¿VFDO\HDUV,QDQHIIRUWWRDVVLVWRYHUVHDV*URXSFRPSDQLHVLQWKHSHULRGXQGHUUHYLHZDORJLVWLFVPDQDJHUZDVDVVLJQHGWR',&$VLD3DFL¿FZKLFKRYHUVHHV*URXSRSHUDWLRQVLQWKH$VLD±3DFL¿FUHJLRQ',&DOVRVWXGLHGZRUNÀRZVDWLQGLYLGXDORYHUVHDV*URXSFRPSDQLHVZLWKWKHJRDORIUDWLRQDOL]LQJDQGHQKDQFLQJWKH
HI¿FLHQF\RIORJLVWLFV/RRNLQJDKHDG',&ZLOOFRQWLQXHWRVXSSRUWWKHHIIRUWVRI*URXSFRPSDQLHVRYHUVHDVZKLOHDWWKHVDPHWLPHVKLIWLQJLWVIRFXVIURP
optimizing logistics for the DIC Group alone to realizing practices that are optimally suited to regional conditions.

CO2(PLVVLRQVDQG(QHUJ\&RQVXPSWLRQSHU
8QLWRI3URGXFWLRQ$WWULEXWDEOHWR/RJLVWLFV(GJ/10,000 tonne km)(%)(Metric tonnes of CO2)

30,00030

25,00025

20,00020

CO2 emissions(metric tonnes of CO2)

15,00015

Energy consumption(GJ/10,000 tonne km)

10,00010Modal shift rate (%)

5,000

5
0

0
07

08

09

10

11

12

13

14

15

16

17

(FY)

VOICE :HDUHDGGUHVVLQJWKHVKRUWHQLQJRIWUDQVSRUWÁRZOLQHVDVDFRPPRQFKDOOHQJHDQGGHYHORSLQJPXOWLIDFHWHGUHPHGLDOPHDVXUHV$FRPPRQFKDOOHQJHLQORJLVWLFVZKHWKHUZHDUHORRNLQJDWRXURSHUDWLRQVLQ-DSDQRURYHUVHDVLVWRVKRUWHQWUDQVSRUWÀRZOLQHV%\
promoting related initiatives, we will also help reduce energy consumption, CO 2 emissions and transport costs. Accordingly, we will
FRQWLQXHWRSXWRXUKHDGVWRJHWKHUWRGHWHUPLQHHIIHFWLYHDSSURDFKHVDQGGHYHORSDQGWHVWSURPLVLQJQHZPHDVXUHV)RUH[DPSOHLQ
-DSDQ',&FXUUHQWO\OHDVHVDFRQVLGHUDEOHQXPEHURIZDUHKRXVHVZKLFKLWXVHVIRULQYHQWRU\DGMXVWPHQWDQGWRVKLSSURGXFWV:HDUH
FXUUHQWO\LQYHVWLJDWLQJZKHWKHUWKHOHQJWKRIUHODWHGÀRZOLQHVLVDSSURSULDWH7KLVLVMXVWRQHRIDQXPEHURIHIIRUWVWRUHH[DPLQHDVSHFWVof logistics that were previously ignored. The operating environment for logistics services is increasingly harsh. We have opted to view
WKLVDVDQRSSRUWXQLW\IRUDQRYHUKDXOZLWKWKHDLPRIIXUWKHUUDWLRQDOL]LQJDQGLQFUHDVLQJWKHHI¿FLHQF\RIRXUORJLVWLFVSUDFWLFHVGeneral Manager, Logistics Department

DIC Report 2018

107

Kazuhiko Yamada

ESH

Report on Other Initiatives
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives

Goals for fiscal year 2017

Achievements in fiscal year 2017

Evaluation

Goals for fiscal year 2018

Report on Responsible Careinitiatives and prepare site
reports.

• Re inforc e and ex pand ef for t s toenhance the DIC Group’s performance.
• Promote ongoing Responsible Careinitiatives tailored to local markets.

• Steps were taken to create a foundation for unifying performance data
while ensuring legal and regulatorycompliance in different countries andterritories.
• Ongoing Responsible Care initiatives
tailored to local markets were promoted.

★★★

• Re i nf o r c e a n d ex p a n d ef f o r t s t oenhance the DIC Group’s performance.
• Promote ongoing Responsible Careinitiatives tailored to local markets.

Implement measures for PCBs.

• Maintain a system for storing andmanaging PCBs.
• Promote the proper disposal ofequipment containing PCBs.

PCB waste was collected and stored in
an appropriate manner and disposedof in accordance with the practices of
the Japan Environmental Storage &Safety Corporation (JESCO).

★★★

• Maintain a system for storing andmanaging PCBs.
• Promote the proper disposal of equipment containing PCBs.

Protect the ozone layer.

• Reinforce framework for managing equipment
containing chlorofluorocarbons (CFCs).
• Continue promoting efforts to avoid theadoption of new raw materials containing
specified CFCs.
• Continue to ascertain the amount of CFCs
leaked at domestic DIC Group companies
and promote measures to prevent leakage.

• The adoption of new raw materials containing specified CFCs was avoided.
• Measures to ascertain the amount of CFCs
leaked at domestic DIC Group companies
proceeded.

★★★

• Re i nf o r c e f r a m ewo r k f o r m a n a g i n gequipment containing CFCs.
• Continue promoting efforts to avoid theadoption of new raw materials containing
specified CFCs.
• Continue to ascertain the amount of CFCs
leaked at domestic DIC Group companies
and promote measures to prevent leakage.

Asbestos

Ensure awareness of potential risks
associated with the discover y ofasbestos during demolition or whenretrofitting equipment and of appropriate responses.

Materials containing asbestos, including insulation, were discovered during
the removal of equipment and were
removed and disposed of in a legally
appropriate manner.

★★★

Ensure awareness of potential risks
associated with the discovery of asbestos during demolition or when retrofitting
equipment and of appropriate responses.

DIC Report 2018108

Basic ThemesCore and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

QualityEnhancing Product Quality and Customer Satisfaction
Goals and Achievements of Major Initiatives (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ ([FHOOHQW★★ 6DWLVIDFWRU\★ 6WLOOQHHGVZRUN
Objective of initiatives

Secure product quality.

Goals for fiscal year 2017

Achievements in fiscal year 2017

Promote efforts to foster employees whowill shoulder responsibility for productquality and customer satisfaction.

Measures to revitalize the efforts of departments and individuals responsible for quality
assurance on the front lines were launched.
These included holding meetings to facilitate
the exchange of information and opinions.

En c o u r a g e r e l eva nt d i v i s i o ns a n ddepartments to cooperate at all stages,
from product planning through toshipment, with the goal of providing the
products and services that customers andmarkets seek.

A design review system was created
whereby the relevant product divisionquality assurance group participates fromthe initial stage of development.

Evaluation

Goals for fiscal year 2018★★

Reinforce the quality assurance framework by, among others, modifying thecorporate culture and improving employee
ethics, thereby making it possible toprevent quality issues from arising.

★★

Ensure a level of quality that fulfills the DIC
Group’s corporate social responsibility. Collectand organize information on raw materials
pertinent to safety, compliance with laws andregulations, and environmental protection andprovide appropriate product information.

Basic Approach$ORQJZLWKLWV(QYLURQPHQW6DIHW\DQG+HDOWK3ROLF\WKH',&*URXSYLHZVWKHLPSURYHPHQWRISURGXFWTXDOLW\DVDWKHPHWKDWLVHVVHQWLDOWRXSKROGLQJDVRXQGRSHUDWLQJIRXQGDWLRQ$FFRUGLQJO\WKH*URXSVHHNVWRHQVXUHHYHU\HPSOR\HHVKDUHVWKHVHQWLPHQWFRQYH\HGLQLWV4XDOLW\3ROLF\DQGZRUNVFRQWLQXRXVO\WRHQKDQFHTXDOLW\DQGHQVXUHFXVWRPHUVDWLVIDFWLRQ

DIC’s Quality Policy“Contribute to the prosperity of customers and society by consistently providing reliable products” (Updated in May 2015)| Framework for Implementation
To better leverage its agility and comprehensive capabilities, DIC has established a matrix-like quality
management configuration that positions product divisions on the vertical axis and the TechnicalManagement Unit and Production Management Unit on the horizontal axis. DIC has also introduced
a quality management system (QMS) based on ISO 9001—the International Organization forStandardization’s benchmark for such systems—in product divisions and subsequently earned ISOFHUWL¿FDWLRQIRUDOORILWVSURGXFWLRQIDFLOLWLHV7KH&RPSDQ\FDSLWDOL]HVRQWKLV406DVZHOODVRQWZRRWKHUPDQDJHPHQWV\VWHPVWRSURPRWHRQJRLQJHIIRUWVWRHQKDQFHTXDOLW\,QILVFDO\HDU',&UHYDPSHGLWVTXDOLW\DVVXUDQFHFRQILJXUDWLRQZLWKWKHDLPRIEXLOGLQJDVWURQJHUFRQVHQVXVEHWZHHQWRSPDQDJHPHQWDQGSHRSOHRQWKHIURQWOLQHVHVWDEOLVKLQJDIUDPHZRUNWKDWHQDEOHVVZLIWDQGHIIHFWLYHUHVSRQVHVWRTXDOLW\LVVXHV7KH&RPSDQ\LVDOVRWDNLQJVWHSVWR
enhance internal quality audits and product quality–related educational initiatives to create a corporate
culture that emphasizes initiatives aimed at improving the quality of its products. The Company’s
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TXDOLW\PDQDJHPHQWZKLFKLVRYHUVHHQE\SURGXFWGLYLVLRQTXDOLW\DVVXUDQFHJURXSVDQGIDFLOLWDWHVSURPSWDQGDSSURSULDWHTXDOLW\PDQDJHPHQW%\WKXVGLYLGLQJ*URXSZLGHDQGSURGXFWVSHFL¿FTXDOLW\management, DIC has positioned itself to advance close communication among these departments
and to secure product quality.
7KH4XDOLW\$VVXUDQFH'HSDUWPHQWLPSOHPHQWVUHJXODUSURGXFWTXDOLW\DXGLWVRI',&*URXSFRPSDQLHVLQ-DSDQWRHQVXUHWKDWTXDOLW\PDQDJHPHQWLVIXQFWLRQLQJHIIHFWLYHO\DVZHOODVWROLIW
product quality levels, thereby ensuring customer satisfaction. Overseas, DIC Group companies
continue to promote a variety of efforts directed at further reinforcing product quality.

DIC Report 2018109

Enhancequality

Product
divisions
QMS

Increasecustomersatisfaction

Production facilities certified under ISO 9001

Production Management Unit
andTechnical Management Unit

Quality

1

Initiatives Aimed at Increasing Customer Satisfaction

DIC’s system for ensuring
customer satisfaction

Aspects visible
to customers

To ensure its ability to provide high-quality products that customers feel secure using, DIC promotes a variety of quality improvement initiatives
GXULQJSURGXFWSODQQLQJGHVLJQDQGGHYHORSPHQWWKHSURFXUHPHQWRIUDZPDWHULDOVSURGXFWLRQDQGVDOHVJLYLQJFRQVLGHUDWLRQWRWKHQHHG
IRUHIIHFWLYHSURGXFWVWHZDUGVKLS5HOHYDQWSURGXFWGLYLVLRQTXDOLW\DVVXUDQFHJURXSVSDUWLFLSDWHLQGHVLJQUHYLHZVIURPWKHLQLWLDOVWDJHVRIGHYHORSPHQWFRQGXFWLQJULJRURXVHYDOXDWLRQVDWHDFKVWDJHZLWKWKHJRDORISURYLGLQJWKHSURGXFWVDQGVHUYLFHVWKDWFXVWRPHUVDQGPDUNHWV
VHHN$IWHUSURGXFWVDUHVROGFXVWRPHUDQGPDUNHWDVVHVVPHQWVDUHJDWKHUHGDQGIHGEDFNWRGHYHORSPHQWGHSDUWPHQWVWRIDFLOLWDWHIXUWKHUTXDOLW\LPSURYHPHQWV,QFROODERUDWLRQZLWKWHFKQLFDODQGSXUFKDVLQJGHSDUWPHQWVWKH4XDOLW\$VVXUDQFH'HSDUWPHQWFROOHFWVDQGRUJDQL]HVLQIRUPDWLRQRQUDZPDWHULDOVSHUWLQHQWWRVDIHW\FRPSOLDQFHZLWKODZVDQGUHJXODWLRQVDQGHQYLURQPHQWDOSURWHFWLRQHQDEOLQJLWWRSURYLGH
appropriate product information.

2

Requests from customers/markets and society
Information from customer
Requirements

Output from DIC
Products

Sales
strategies
Planning
andproposals

Qualityassurance
Design anddevelopment

Marketing

Production

Contents/composition
Container/mode of packing
Consideration of environment
Workability and conveniencein handling
Disposal after use
Safety level of raw materials
Conformity to laws and regulations
Productivity and capacity
Safety and stability of processes
Costs/stable supply

SDSs
Technical
documents

Labeling
Packaging
Sample for
evaluation test

Design review
Validation
Control of changes

Product evaluation
Trial production
Mass trial production

Contract /delivery
specifications
COA (certificate of analysis)
SDSs
Catalogs
Products

Production/quality
confirmation Products

DIC website
Customer
お客様 相consultation
談 情報
information
Technical service
Quality validation

Requests for improvement
Requests for cost reduction
Dealing with customer
information
Top management diagnosis/
internal audit
Market requirements
Self-regulation of industry

Business activities of DIC aimed at delivering high-quality products that are safe and reliable

New Efforts to Enhance Product Quality–Related Educational Initiatives

Committed to providing safe, secure products that satisfy its customers, DIC
UHFRJQL]HVWKHLPSRUWDQFHRIHQVXULQJWKDWHPSOR\HHVPDLQWDLQDKLJKDZDUHQHVVRITXDOLW\DVZHOODVDFRQVWDQWFRPPLWPHQWWRDFKLHYLQJIXUWKHUTXDOLW\LPSURYHPHQWVand upholding high quality standards. To this end, the Company provides education
regarding product quality to all DIC Group employees at specific times, including
WKURXJKWUDLQLQJIRUQHZO\KLUHGDQGQHZO\SURPRWHGHPSOR\HHV6LQFH¿VFDO\HDU',&KDVDOVRRIIHUHGWUDLQLQJOHGE\H[WHUQDOH[SHUWVLQWKH
¿HOGIRUHPSOR\HHVLQYROYHGLQTXDOLW\PDQDJHPHQW$SSUR[LPDWHO\LQGLYLGXDOVSDUWLFLSDWHLQVXFKWUDLQLQJDQQXDOO\,Q¿VFDO\HDUWKH&RPSDQ\EHJDQKROGLQJ
meetings for employees responsible for quality assurance on the front lines torevitalize the efforts of employees and departments by facilitating the exchange of
LQIRUPDWLRQDQGRSLQLRQV*RLQJIRUZDUG',&ZLOOFRQWLQXHZRUNLQJWRHVWDEOLVKDQG
SURPRWHIXUWKHUDZDUHQHVVRISURGXFWTXDOLW\DVHVVHQWLDOWRXSKROGLQJDVRXQG
operating foundation.

3

Global Product Quality Initiatives$OOGRPHVWLFDQGRYHUVHDV',&*URXSFRPSDQLHVZLWKSURGXFWLRQFDSDELOLWLHV
H[FOXGLQJWKRVHEHORQJLQJWRWKH6XQ&KHPLFDO*URXS KDYHHDUQHGFHUWL¿FDWLRQXQGHU,62EDVHGRQZKLFKWKH\KDYHHVWDEOLVKHGSURGXFWTXDOLW\DVVXUDQFH
IUDPHZRUNV,QWKH\HDUVDKHDG',&ZLOODGYDQFHHIIRUWVWRIXUWKHUUHLQIRUFH
TXDOLW\IUDPHZRUNVWREHWWHUVXLWSURGXFWGLYLVLRQVDQG*URXSFRPSDQLHVPercentage of DIC Group Companies
ZLWK3URGXFWLRQ&DSDELOLWLHV&HUWLÀHG8QGHU,62
DIC

100%

DIC Report 2018110

DIC Groupcompanies in JapanDIC Groupcompanies overseas

76%

91%

Quality

4

Quality News (,VVXH1RSXEOLVKHGLQ6HSWHPEHU)Preventing the Recurrence of Problems

The DIC Group is promoting the creation of a system to ensure that information received
regarding quality problems (complaints and criticisms) is collated, analyzed and shared
HIILFLHQWO\ DFURVV WKH *URXS 2QFH ODXQFKHG WKLV V\VWHP ZLOO EH XVHG WR SUHYHQW WKHrecurrence of such problems.
7RGLVFRYHUWKHFDXVHVRITXDOLW\SUREOHPVWKH*URXSHPSOR\V³ZK\ZK\DQDO\VLV´ ³nazenaze bunseki´  8VLQJ ZK\ZK\ DQDO\VLV LQ DQ HIIRUW WR HOLPLQDWH SURGXFW UHMHFWV DW WKHSURGXFWLRQVWDJHLQILVFDO\HDUWKH+RNXULNX3ODQWDFKLHYHGDQUHGXFWLRQIURPWKHILVFDO\HDUOHYHO',&DOVRDSSOLHVZK\ZK\DQDO\VLVLQGHWHUPLQLQJWKHFDXVHRI
accidents, an approach that continues to yield solid results.
Through meetings held to facilitate the exchange of information and opinions amongindividuals responsible for quality assurance on the front lines, the Group also continues topromote bottom-up quality improvement initiatives that reflect front-line perspectives. DIC
also publishes Quality NewsZKLFKSURYLGHVXVHIXOLQIRUPDWLRQRQTXDOLW\PDQDJHPHQWDQG
ZD\VWRHQKDQFHZRUNTXDOLW\,QDGGLWLRQWREHLQJSXEOLVKHGUHJXODUO\RQ',&¶VSRUWDOVLWHDQG
distributed directly to relevant parties, Quality News is used in employee training.

Change in the Number of Quality Problems
Change in the Number of Product Returns

Change in the Number of Complaints Received(%DVH\HDU)LVFDO\HDU)

（%）

0
ー10
ー20

-32
-57

ー30

-56

ー20

-62

-59

（%）

0
ー10

ー40

ー40

ー50

ー50
13

ー60

-37

-27

ー30

-46

-45

14

15

16

-40

17（FY）

ー70:K\ZK\DQDO\VLV naze-naze bunseki)

13

14

15

16

17 （FY）

VOICE /D\LQJWKHJURXQGZRUNIRU,$7)FHUWLÀFDWLRQIRUWKHDIC.PPS series of PPS compounds
336FRPSRXQGVDUHWKHSULQFLSDOSURGXFWRIWKH6ROLG&RPSRXQGV3URGXFW'LYLVLRQ7KDQNVWRSRO\PHUVZLWKH[FHOOHQWKHDWUHVLVWDQFHDQGUREXVWFRPSRXQGLQJ WHFKQRORJLHV WKDW PDWFK FXVWRPHU QHHGV  RI WKHVH FRPSRXQGV DUH XVHG LQ DXWRPRWLYH FRPSRQHQWV %HFDXVH WKH TXDOLW\ RI
FRPSRQHQWVDQGWKHPDWHULDOVXVHGWKHUHLQVLJQLILFDQWO\DIIHFWWKHVDIHW\RIYHKLFOHV,QWHUQDWLRQDO$XWRPRWLYH7DVN)RUFH ,$7) ZDVFUHDWHGDVD
TXDOLW\PDQDJHPHQWVWDQGDUGVSHFLILFDOO\IRUWKHDXWRPRELOHLQGXVWU\ZLWKWKHDLPRISUHYHQWLQJGHIHFWVDQGPLQLPL]LQJTXDOLW\DQRPDOLHV5HFHQW\HDUVKDYHVHHQDQLQFUHDVHLQWKHQXPEHURIPDMRUDXWRPDNHUVEDVHGLQ(XURSHDQGWKH$PHULFDVWKDWGHPDQG,$7)FHUWLILFDWLRQIRUFRPSRQHQWVDQGPDWHULDOVVXSSOLHUVDVDFRQGLWLRQIRUGRLQJEXVLQHVV$FFRUGLQJO\ZHDUHFXUUHQWO\ZRUNLQJWRFUHDWHV\VWHPVQHFHVVDU\WRREWDLQFHUWLILFDWLRQIRUIRXUNH\JOREDO336FRPSRXQGVSURGXFWLRQIDFLOLWLHV .RPDNL9LHQQD3HQDQJDQG=KDQJMLDJDQJ E\HDUO\ILVFDO\HDU
General Manager, Solid Compounds Quality Assurance Group, Solid Compounds Product Division, Komaki Plant Takumi Hirosawa

DIC Report 2018111

Basic Themes

Human Resources Management

Core and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

SDGs Goals 3, 4, 5, 8 and10

Working to Enhance Job Satisfaction

Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives

Goals for fiscal year 2017

Achievements in fiscal year 2017

• Conduct seminars for Group executives at
DIC’s corporate headquarters based on the
results of voluntary human rights and labor
practices inspections. Formulate a humanrights policy.
• Conduct voluntary human rights inspectionsof Group companies in Japan and overseas.

• An external speaker was engaged to conduct aseminar on work–life balance for Group executives.
• A draft version of the Group’s human rights policy
remained under consideration.
• Individual human rights cases involving Groupc o m p a n i e s i n J a p a n a n d ove r s e a s w e r e
investigated.
• Sun Chemical participated in the Responsible Mica Initiative.

Introduc e a unif ied policy regarding
remuneration for management-level employees at DIC and DIC Graphics.

On January 1, 2018, the Group introduced unified
role-based standards to determine remuneration for 1,300
management-level (i.e., manager and above) employees.
As a consequence, unified standards are now used for the
majority of such employees in Europe and the Americas,
the Asia–Pacific region, the PRC and Japan.

★★★

Consider the creation of a global personnel
system that includes evaluation with the goalof ensuring rational and efficient humanresources management.

Continue to offer training programs for
employees and candidates for executive
positions at DIC Group companies in Japanand overseas and to implement measures
aimed at fostering global human resources.

• A total of five employees of overseas Group
companies were sent to work at Group companies in Japan under the GCD Program.
• Practical training aimed at fostering global humanresources was introduced.

★★★

• Continue offering the GCD Program.
• Continue providing practical training aimed at
fostering global human resources.

Encourage women in the workplace with the aim of securing adiverse labor force and supporting diverse working styles.

Enhance measures for advancing the
careers of female employees and increase
the percentage of new female graduates
recruited to 30%-plus.

• A diversity seminar was held for directors andsupervisors.
• Executive-led lunch seminars were held for female
employees.
• A panel discussion was held with women in management positions at other companies as panelists.
• Telecommuting arrangements were introduced in
January 2018.

★★★

Continue to advance efforts to, among others,change mindsets, create a framework andactively encourage the hiring of female job
candidates.

Promote the hiring of individuals
with disabilities with the aim of
securing a diverse labor force andsupporting diverse working styles.

Increase the number of employees withdisabilities to 2.2% of DIC’s total labor force.

As of December 31, 2017, individuals with disabilities accounted for 1.94% of DIC’s total labor
force.

★

Increase the number of employees withdisabilities to 2.2% of DIC’s total labor force.

Foster and endorse the advancementof local staff overseas with the aim ofadvancing global management.

Evaluation★★

Goals for fiscal year 2018

• Formulate a human rights policy.
• Use human rights training to encourage awareness of the policy.
• Implement voluntary human rights inspections
at Group companies in Japan and overseas.

Basic Approach to Human Resources Management
With the aim of being an organization that empowers all employees to reach their full potential, the DIC Group is committed to respecting human rights
and eliminating all forms of discrimination and to creating a work environment that embraces diversity. The Group also strives to support a healthy
work–life balance for each employee and create a work environment conducive to job satisfaction, as well as to foster local human resources inmarkets around the world, which it recognizes as essential to ensuring sustainable corporate growth under its current medium-term management plan.

| Respect for Human Rights
The DIC Group actively supports global codes governing human rights*1, in line with which it is currently formulating the DIC Group Human Rights Policy, and promotes related
initiatives. The DIC Group Code of Business Conduct, which outlines standards that DIC Group employees are expected to observe, lays down provisions prohibiting humanrights violations and requiring respect for diversity, two philosophies that are the foundation of the Group’s corporate activities. DIC Group employees are obliged to understandand provide written pledges to abide by the Code. Domestic and overseas Group companies implement voluntary human rights and labor practices inspections as part ofRQJRLQJHIIRUWVWRSUHYHQWLVVXHVIURPDULVLQJDVVHVVWKHUHVXOWVRIWKHVHLQVSHFWLRQVDQGFRQ¿UPWKHDEVHQFHRIYLRODWLRQV
,Q¿VFDO\HDU',&EHFDPHDVLJQDWRU\WRWKH8QLWHG1DWLRQV*OREDO&RPSDFW 81*& SOHGJLQJLWVVXSSRUWIRUWKH81*&¶VSULQFLSOHVZKLFKLQFOXGHWHQHWVUHJDUGLQJ
human rights and labor. The Company continues to implement related initiatives in all areas of its corporate activities to reinforce respect for human rights in the humanresources management practices of all Group companies and prevent the occurrence of violations.
In response to the Modern Slavery Act 2015*2, DIC is reinforcing training regarding human rights due diligence*3FRJQL]DQWRIWKHLVVXHRIKXPDQWUDI¿FNLQJDQGWKHULVNVit poses to companies with operations in the United Kingdom. The Company also promotes awareness among DIC Group company executives and enhances corporate
headquarters’ inspection and monitoring structure as part of an ongoing effort to bolster Group management capabilities.
*1 The International Bill of Human Rights, comprising the Universal Declaration of Human Rights and the International Covenants on Human Rights (the International Covenant on Economic, Social and Cultural Rights and the International Covenant on Civil
and Political Rights); the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work; the United Nations’ Guiding Principles on Business and Human Rights; and the Ten Principles of the Global Compact (UNGC).
*2 8QGHUWKH0RGHUQ6ODYHU\$FWDQ$FWRIWKH3DUOLDPHQWRIWKH8QLWHG.LQJGRPFRPSDQLHVZLWKRSHUDWLRQVLQWKH8QLWHG.LQJGRPPXVWUHSRUWRQWKHH[LVWHQFHQRQH[LVWHQFHRIVODYHU\KXPDQWUDI¿FNLQJRURWKHUFULWLFDOYLRODWLRQVRI
KXPDQULJKWVLQWKHLUVXSSO\FKDLQVUHODWHGULVNVDQGVWHSVWKH\DUHWDNLQJWRDGGUHVVVXFKSUDFWLFHV³0RGHUQVODYHU\´HQFRPSDVVHVGHEWERQGDJHIRUFHGODERUDQGVHUYLWXGHKXPDQWUDI¿FNLQJDQGH[SORLWDWLRQ VH[XDOH[SORLWDWLRQIRUFHG
organ donation).
*3 Human rights due diligence is an ongoing risk management process that a company needs to follow in order to identify, prevent, mitigate and account for how it addresses its adverse human rights impacts.

DIC Report 2018112

Human Resources Management| The DIC Group Human Rights Policy
As a member of society that recognizes the importance of respect for human rights and respects the basic human rights of all stakeholders, including
its customers, suppliers and employees, the DIC Group is currently formulating a human rights policy, a draft of which is provided below. Based on
this policy, DIC will work to increase the human rights awareness of its executives and employees and to conduct its business activities in a mannerthat shows respect for human rights.
１．Positioning

This policy, which is in accordance with global human rights codes, articulates DIC’s fundamental stance on respect for human rights.
２．Scope of application

This policy applies to all executives and employees of the DIC Group. The Company shall also encourage its business partners andsuppliers to adhere to this policy and cooperate with them to advance respect for human rights.
３．Responsibility to respect human rights

The Company shall strive to fulfill its responsibility to respect human rights by ensuring that its business activities do not result in
violations of the human rights of stakeholders, as well as by preventing human rights abuses in the course of its business. In the eventthat its business partners or suppliers cause adverse human rights impacts through their businesses, products and services, the&RPSDQ\²ZKLOHQRWGLUHFWO\FRPSOLFLW²VKDOOXVHLWVLQÀXHQFHWRHQFRXUDJHWKHUHVSRQVLEOHSDUWLHVWRFHDVHWKHSUDFWLFHVUHVSRQVLEOH
for such impacts.
４．Human rights due diligence

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shall employ on an ongoing basis to identify and address human rights risks.
５．Corrective/remedial actions

Should the Company cause adverse human rights impacts or should it become evident that it has been complicit in causing suchimpacts, the Company shall take appropriate corrective/remedial actions in response.
６．Compliance with applicable laws

The Company shall comply with applicable laws in the countries and territories in which it operates. The Company shall also respect
international human rights principles and work actively to promote these principles.
７．Disclosure and education/training

The Company shall periodically report publicly on the progress of initiatives implemented in line with this policy. To ensure theeffectiveness of this policy, the Company shall also provide appropriate training to its executives and employees.
８．Dialogue and discussion

The Company shall engage with stakeholders regarding initiatives implemented in line with this policy by creating opportunities for
dialogue and promoting discussion in good faith.
９．Identifying principal human rights challenges

7KH&RPSDQ\KDVVHSDUDWHO\LGHQWL¿HGSULQFLSDOKXPDQULJKWVFKDOOHQJHV,QOLQHZLWKWKLVSROLF\WKH&RPSDQ\VKDOOXVHGXHGLOLJHQFH
as appropriate. Recognizing this as an ongoing process, the Company shall also continue to revise and amend these challenges toUHÀHFWVRFLDOFKDQJHEXVLQHVVWUHQGVDQGRWKHUIDFWRUVDIC Report 2018113

Human Resources Management| Principal Human Rights Challenges Facing the DIC Group%DVHGRQNH\JOREDOVWDQGDUGVUHJDUGLQJKXPDQULJKWVWKH',&*URXSKDVLGHQWL¿HGWKHIROORZLQJDVWKHSULQFLSDOKXPDQULJKWVFKDOOHQJHVLWIDFHVDQG
promotes appropriate due diligence in accordance with its draft human rights policy. The Group will review these challenges on a regular basis, taking into
consideration factors such as social change and business trends.
（1）Eliminate discrimination

The DIC Group prohibits all types of discrimination, harassment and other practices that undermine the dignity of any individual.
（2）Prevent child labor and forced labor
7KH',&*URXSSURKLELWVWKHXVHRIFKLOGODERUIRUFHGODERUVODYHODERUDQGODERUUHVXOWLQJIURPDQ\IRUPRIKXPDQWUDI¿FNLQJ
（3）Respect basic labor rights
The DIC Group respects basic labor rights, including freedom of association and employees’ rights to organize and to engage incollective bargaining.
（4）$GGUHVVWKHLVVXHRIFRQÁLFWPLQHUDOV
7KH',&*URXSSURKLELWVWKHXVHRIFRQÀLFWPLQHUDOV6KRXOGDQ\UDZPDWHULDOVSXUFKDVHGIURPWKLUGSDUW\VXSSOLHUVEHIRXQGWRFRQWDLQFRQÀLFWPLQHUDOVWKH*URXSZLOOUHVSRQGE\DPRQJRWKHUVLPPHGLDWHO\WHUPLQDWLQJWKHSURFXUHPHQWWKHUHRI| The DIC Group’s Human Rights Due Diligence System
The DIC Group has created a human rights due diligence system, which it employs on an ongoing basis.

１）Commit

２）Identify andevaluate impacts３）Implement corrective/remedial
measures, provide training andgauge effectiveness

Demonstrate the Group’s
human rights policy and views.

Identify and evaluate human rights risks in theGroup’s business and across its supply chain.

Implement measures andgauge effectiveness.

・Formulate a human rights policy.
・Introduce section on human rights into the
DIC Group CSR Procurement Guidelines.
・Reinforce awareness of the policy.

・Encourage voluntary human rights inspections ・Implement corrective/remedial measures.
at Group companies.
・Plan and provide human rights training.
・Identify and evaluate the impact
・Gauge the eﬀectiveness of measures.
of human rights risks.

４）Disclose information
Report periodically onhuman rights initiatives.
・Provide information via the DIC global website.
・Include information in the DIC Report.
・Publicize using conventional mass media.

| Due Diligence Initiatives to Address Principal Human Rights Challenges
1. Promotion of supply chain due diligence by the Purchasing Department

To ensure that its extended supply chain functions in a socially responsible manner, the Company established the DIC Group Universal
Purchasing Policy in 2008, based on which it also formulated purchasing management regulations, and the DIC Group CSR Procurement
Guidelines, which clarify issues it expects suppliers to address, in 2009. Using the policy and guidelines, the Company promotes CSR
procurement by ensuring that all suppliers implement improvements and initiatives necessary to ensure sustainable procurement, as well
DVDGYDQFHVUHVSHFWIRUKXPDQULJKWVDQGWDNHVFRPSUHKHQVLYHVWHSVWRDGGUHVVKXPDQULJKWVULVNVVXFKDVFRQÀLFWPLQHUDOVDFURVVLWV
supply chain.
2. Responses to a questionnaire issued by coatings industry organizations
DIC completed a questionnaire designed to confirm its awareness of the issue of child labor in the mining of mica in India and thepresence or absence of mica procured from mines using child labor, as well as to ensure that it has corrective measures in place. The&RPSDQ\¶VUHVSRQVHVFRQ¿UPHGWKDWWKH',&*URXSSURFXUHVQRPLFDIURPPLQHVXVLQJFKLOGODERUDQGFRPPXQLFDWHGLWVDSSURDFKWR
human rights, including its vow to immediately terminate procurement in the event an issue should arise.
3. Establishment of whistle-blowing hotlines and corrective measures by the compliance team
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the Company received 24 human rights–related reports through this system. However, internal investigations revealed no serious
violations. Appropriate corrective measures were implemented in the receipt of reports.
4. Contact procedures and responses to comments and complaints
The Company has established procedures for suppliers, customers, local communities and other stakeholders to report issues bytelephone or through its corporate website and strives to respond swiftly when comments or complaints are received. No complaints
SHUWDLQLQJWRKXPDQULJKWVLVVXHVZHUHUHFHLYHGLQ¿VFDO\HDU

DIC Report 2018114

Human Resources Management

T

PIC

Sun Chemical Participates in the Responsible Mica Initiative
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mining of mica in India. DIC Group company Sun Chemical, which oversees the Group’s printing inks, resins and pigments
for cosmetics operations in Europe and the Americas, is a founding member and one of many materials and cosmetics
manufacturers taking part in this initiative.
0LFDKDVDEURDGUDQJHRILQGXVWULDODSSOLFDWLRQVLQFOXGLQJFRDWLQJVFRVPHWLFVHOHFWURQLFVPDWHULDOVDQGFXWWLQJÀXLGVDQGLVPLQHGDURXQGWKHZRUOG7KHXVHRIFKLOGUHQLQWKHPLFDPLQHVRI,QGLDDOHDGLQJSURGXFHUKDVEHHQLGHQWL¿HGDV
an issue that needs to be addressed. Through participation in the Responsible Mica Initiative, Sun Chemical will work tocontribute through its operations to the realization of a sound, viable mica mining industry in India.

Mica

Responsible Mica Initiative WEB http://www.responsible-mica-initiative.com/index.html| Building Trust with the DIC Employees’ Union
DIC’s management and representatives of its employees’ union meet regularly with the goal of ensuring healthy industrial relations based on
mutual trust. In addition, through labor–management councils and casual management conferences, DIC shares management information
DQGLWVYLVLRQIRUWKHIXWXUHZLWKXQLRQUHSUHVHQWDWLYHVDQGHQFRXUDJHVWKHIUDQNH[FKDQJHRIRSLQLRQV$WRWDORIRISDUHQWFRPSDQ\HPSOR\HHVEHORQJWRWKH',&(PSOR\HHV¶8QLRQ RIQRQPDQDJHULDOHPSOR\HHVDUHXQLRQPHPEHUV| Global Human Resources Management
In line with The DIC WAY, which represents its fundamental management philosophy, and its DIC108 medium-term management plan, the
DIC Group has established a global human resources management framework under which Group companies in Japan, the PRC and the$VLD±3DFL¿FUHJLRQDUHRYHUVHHQE\',&ZKLOHWKRVHLQ1RUWK$PHULFD(XURSH&HQWUDODQG6RXWK$PHULFDDQG$IULFDDUHRYHUVHHQE\6XQ
Chemical of the United States.
With the rapid expansion of its global operations, DIC recognizes that fostering human resources and creating an environment that
HQFRXUDJHVFURVVERUGHUFDUHHUDGYDQFHPHQWDQGPRELOLW\LVHVVHQWLDOWRLQFUHDVLQJFRUSRUDWHYDOXH7RWKHVHHQGVVLQFH¿VFDO\HDU
the Company has sought to develop harmonized promotion, personnel evaluation and remuneration systems, the cornerstone of its global
human resources management framework for DIC Group companies under its jurisdiction.
Having unified personnel evaluation systems for executives in Japan, the PRC and the Asia–Pacific region, as well as created amanagement resources database, DIC is promoting systematic efforts to cultivate executives, including introducing specialized management
training and systematic training programs. Through such efforts, the Company is striving to create a structure that allows it to cultivate
executives that best suit its needs without regard for nationality.
,QILVFDO\HDU',&DQG',&*UDSKLFVXQLILHGWKHTXDOLILFDWLRQVWDQGDUGVIRUPDQDJHPHQWOHYHO LHPDQDJHUDQGDERYH 
HPSOR\HHV7KHVHFKDQJHVFDPHLQWRHIIHFWLQ-DQXDU\$VDFRQVHTXHQFHXQL¿HGGXW\DQGUROHEDVHGVWDQGDUGVDUHQRZXVHGIRU
WKHPDMRULW\RIVXFKHPSOR\HHVLQ(XURSHDQGWKH$PHULFDVWKH$VLD±3DFL¿FUHJLRQWKH35&DQG-DSDQ',&LVVWULYLQJWRUHDOL]HDIUDPHZRUNWKDWFUHDWHVDEURDGHUSOD\LQJ¿HOGDOORZLQJHPSOR\HHVZLWKGLYHUVHYDOXHVDQGVNLOOVWRH[HUFLVHWKHLU
capabilities and using the same yardstick to evaluate their achievements. By so doing, the Company aims to create work environments thatenhance job satisfaction and contribute to the expansion of DIC Group businesses.

Basic Personnel Statistics (DIC)
Fiscal year 2015
Number of
employees

MaleFemaleTotal

Average age

Male
FemaleTotal

Averageyears ofemployment

Male
FemaleTotal

New
graduates
hired

Male
Female
Total

2,898
683
3,581
42.2
40.3
41.8
18.2
17.7
18.1
75
20
95

Fiscal year 2016

)LVFDO\HDU

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

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

Retention rate
(after three
years)

Male
Female
Total

Separations(voluntary)(number ofindividuals)

Male
Female
Total

Separation rate(voluntary)

Male
FemaleTotal

DIC Report 2018115

Fiscal year 2015

Fiscal year 2016

)LVFDO\HDU

(Fiscal year 2012 hires)(Fiscal year 2013 hires)(Fiscal year 2014 hires)

95.7%
100%
96.5%
37
8
45
1.3%
1.2%
1.3%

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

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

Human Resources Management

Integrating DIC Group Executive Evaluation Systems
The DIC Group has integrated its evaluation systems for Group company presidents and other executives in Japan and overseas with thegoal of encouraging these individuals not only to pursue near-term results for their business units but also to choose management approaches
that are optimal for the Group as a whole from both a medium- and long-term perspective. The Group also integrated its global personnel
policies to ensure that remuneration is in keeping with local market levels and individual job responsibilities.

| Securing and Fostering Human Resources
1

Ensuring Fair and Consistent Treatment

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TXDOL¿FDWLRQLVGRQHWKURXJKVFUHHQLQJEDVHGRQREMHFWLYHVWDQGDUGVWKHUHE\JXDUDQWHHLQJHTXDORSSRUWXQLWLHVIRUSURPRWLRQWRDOOPRWLYDWHG
capable employees.
Remuneration and personnel evaluation systems designed to enhance job satisfaction ensure that individual employees’ abilities andachievements are assessed appropriately and reflected in a timely manner. Of note, the Company has introduced MBO, a goal-setting
management tool that promotes both corporate growth and employee development, into its personnel evaluation system. Results of individual
evaluations are fed back in full to employees, including reasoning behind determinations—a transparent process that ensures employees are
ODUJHO\VDWLV¿HGZLWKHYDOXDWLRQUHVXOWVSettingofdivisiontargets

Setting ofindividual
targets

Interview

ExecutionofdutiesProcess
evaluation

Careerdevelopment
sheet

Individual

2

Results
evaluation

Semiannual
evaluation

Superior

Annualevaluation

Feedback

Bonus

SalaryPromotion

Skillsdevelopment
Appropriate
appointment

Fostering Human Resources to Reinforce Front-Line Capabilities and Accelerate Change

Having recognized fortifying its Group
organizational capabilities and enhancing
the skills of its people as important
challenges, DIC has declared the mediumterm focus of its human resources
development program as being to nurture
human resources capable of reinforcing
front-line capabilities and acceleratingchange. This program, which is divided
into six categories, is based on curriculathat emphasize a systematic approachto helping each employee acquire criticalskills. Since fiscal year 2016, training hasemphasized the concepts of “global” and“diversity,” with areas emphasized including
training to improve English-language skills
and Japanese-language training for
non-native speakers.

Medium-Term Focus of DIC’s Human Resources
Development Program
Nurture human resources with the aim of realizing
sustainability and achieving the targets of DIC108

Accelerate change
Reinforce front-line
capabilities

Fundamental
capabilities as a
DIC employee

DIC Report 2018

116

Foster human resources with the skills
necessary to promote the steady growth ofbusinesses, maintaining awareness of theimportance of sustainability• Step up efforts to nurture young employees• Reinforce leadership skills• Strengthen management capabilities• Enhance department- and job-specific skills

Foster human resources with the skills
necessary to drive change in businesses toensure DIC is always ahead of the times• Propose solutions that respond to changing business styles• Develop products that leverage compounding technologies• Give full play to comprehensive skills• Accelerate globalization

Human Resources Management

DIC Training Programs
Managementlevel training

Promote globalization, strengthen/foster the ability of management-level
employees to deal with risks

DIC Management School, media training

Global human resources
development

Systematic efforts to foster managers and employees of overseas Group
companies, enhance the skills of Japanese employees assigned to overseas
posts, improve the Japanese-language abilities of employees who are not native
speakers

Next Global Human Resources Development Program, Global Management(preparatory training for employees assigned to overseas posts), Global
Leader Candidates Development Program, Global Challenge Program,
Target Global Program (training to enhance English-language communication
skills), Effective E-Mailing (training in how to compose e-mails in English),Japanese-language training for employees who are not native speakers/HYHOVSHFLÀFWUDLQLQJ(GXFDWLRQDQGWUDLQLQJWRHTXLSHPSOR\HHVZLWKWKHVNLOOVWRIXO¿OOUHVSRQVLELOLWLHVDWHDFKOHYHO4XDOL¿FDWLRQVSHFL¿FWUDLQLQJ -06VHQLRU WUDLQLQJWDLORUHGWR
different management ranks

Department- and
MREVSHFLÀFWUDLQLQJ

Education and training to enhance capabilities required by different departments
and jobs

Human resources development programs tailored to production departments(Kaizen Skill Improvement Training Program, others), technical departments(training to support the ability to propose R&D themes, others), sales departments(training to cultivate proposal development capabilities, others) and support
departments (“why-why analysis” training, others)On-the-job training

Hands-on training in the workplace to foster employees and cultivate skills

Workplace-specific on-the-job training, domestic technical department trainee
program, Overseas Trainee Program, Global Capability Development (GCD) Program

Self-development

Support for employees seeking to enhance their skills

Correspondence courses, e-learning courses, in-house seminar courses,
Skype-based English conversation courses, preparatory courses for the TOEIC
Institutional Program (IP) Test

Training to Enhance Proposal Development Capabilities
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with its goal of reinforcing front-line capabilities. In the advanced course, which primarily targets senior manager–level employees, groups of¿YHRUVL[LQGLYLGXDOVIURPVDOHVDQGWHFKQLFDOGHSDUWPHQWVIRUPFURVVGHSDUWPHQWSURMHFWWHDPVZKLFKVHOHFWSUDFWLFDOFXVWRPHUFHQWHUHG
themes, and work to formulate solutions to pertinent hypothetical issues and further hone their ability to prepare and present proposals. The
course, which lasts nine months, encompasses approaches to development of innovative proposal themes and angles, problem solving andpersuasive presentations, among others, with professional business consultants offering advice and guidance at each stage.
&RXUVHZRUNLVLQDGGLWLRQWRSDUWLFLSDQWV¶UHJXODUUHVSRQVLELOLWLHVVRSDUWLFLSDQWVKDYHDORWRQWKHLUSODWHVEXWWKH\¿QGWKDWWKH\DUHDEOHWR
apply newly acquired skills almost immediately, greatly improving front-line capabilities. Participants have also used their selected themes to
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3

Fostering Global Human Resources

Offering the Overseas Trainee and GCD Programs
The goal of DIC’s Overseas Trainee Program is to foster global human resources by dispatching selected employees from Japan to work at a DIC GroupFRPSDQ\LQDQRWKHUFRXQWU\IRUDVSHFL¿HGSHULRGWKHUHE\KHOSLQJWKHPGHYHORSDPRUHLQWHUQDWLRQDOPLQGVHWLPSURYHWKHLUVNLOOVDQGEXLOGQHWZRUNVZLWKWKHLUFROOHDJXHVRYHUVHDV$VRIWKH¿VFDO\HDU\HDUHQGLQGLYLGXDOVZHUHSDUWLFLSDWLQJLQWKLVSURJUDP
Under the GCD Program, employees from overseas Group companies are sent to work at DIC Group companies in Japan. Positioned as part of theGroup’s effort to foster global human resources and promote diversity, this program gives future business leaders a chance to learn new skills and Japanesebusiness techniques and to network with Group colleagues, as well as to deepen
Overseas Trainee Program Destination Country of Origin and Number
their understanding of Japan’s culture and commercial practices. This programand Number of Employees Dispatched of Participants in the GCD Program
also brings domestic employees in contact with other cultures and provides anin Fiscal Year 2017
in Fiscal Year 2017
opportunity for them to polish their English-language skills and acquire a global
United StatesIndonesia
4
2
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Malaysia
PRC
3
1
two GCD Program Participants to spend between three months and one year atIndonesia
ROK
3
1
sites in Japan.
Germany
Thailand2
1
Through the Overseas Trainee and GCD programs, DIC seeks to advance
India
2
PRC
the globalization of the overall DIC Group, as well as to encourage smooth2
United Kingdom
2
cooperation between Group companies in Japan and their counterparts overseas.
Vietnam1
Initiating Practical Training for Global Human Resources,Q¿VFDO\HDUWKH&RPSDQ\LQLWLDWHGDWUDLQLQJSURJUDPIRUPLGWLHUHPSOR\HHVGHVLJQHGWRHQKDQFHJOREDOEXVLQHVVVNLOOVVHOHFWLQJLQGLYLGXDOVin their 30s and 40s to take part. Participants attended classes conducted by native English speakers that focused on improving presentation, negotiation,
debate and other skills. The Company also provides individual training designed to improve English-language capabilities, including one-on-one Skype-based
training focused on improving conversational skills and TED talk* listening and dictation classes.
* TED (Technology, Entertainment, Design) talks are conferences conducted by U.S. media NPO TED, LLC, that are posted online for free distribution. The talks address a wide range of topics
DQGDUHJLYHQE\IURQWOLQHOHDGHUVLQYDULRXV¿HOGVLQYLWHGWRVHUYHDVVSHDNHUVDIC Report 2018117

Human Resources Management

T

PIC

Lecture Provided to Promote Understanding of Islamic Culture
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including setting aside a space for daily prayer, and to give consideration to working hours, food choices and other factors after the two individuals arrived. Despite a certain amount ofinitial bewilderment on the part of both plant employees and program participants, earnest efforts to communicate helped enhance understanding of each others’ cultures and customs.
In March 2018, the Indonesian employees completed their approximately one-year assignment and returned home. Information on the Indonesian program participants’ experiences at
the Kashima Plant was shared with Group production facilities across Japan, helping ensure a welcoming environment for participants from Malaysia who arrived earlier this year.

VOICE Taking part in this program expanded my horizons and reinforced my professional drive.
$VDSDUWLFLSDQWLQWKH2YHUVHDV7UDLQHH3URJUDP,VSHQW¿VFDO\HDUDW',& *XDQJ]KRX :KLOH,KDGEHHQWRWKH35&QXPHURXVWLPHVRQEXVLQHVVWDNLQJXSDSRVWthere gave me a better understanding of how Chinese people think, as well as an appreciation of historical and cultural context, which has enabled me to communicate ona deeper level in business situations.
One thing I did while I was in Guangzhou was to plan a variety of cross-department recreational activities involving both local staff and staff from Japan. This activity
helped me build strong professional and personal relationships with my colleagues, as a result of which I really enjoyed working together. On my days off, I also
participated in get-togethers organized to help Japanese expats in Guangzhou get to know each other. There are a lot of us in the area under similar circumstances and I found the opportunity to socialize
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Company I represent.
I really believe in the value of the Overseas Trainee Program as an initiative that expands one’s horizons. I hope that many employees are able to take advantage of this challenging and rewarding
opportunity in the years ahead.
High Performance Chemicals Sales Department 1, Polymers Product Division Keisuke Saji

| Promoting Diversity
The DIC Group actively pursues diversity by employing a broad spectrum of individuals without regard to considerations suchas gender, nationality, physical limitation or age. The Group works to foster a corporate culture that draws on its understanding
and respect for diversity to produce creative ideas and to incorporate the concept of diversity into management, thereby
FUHDWLQJZRUNSODFHVWKDWHQKDQFHMREVDWLVIDFWLRQIRUHPSOR\HHV',&¶VQHZSUHVLGHQWDQG&(2.DRUX,QRZKRWRRNRI¿FHLQ-DQXDU\KDVVDLG³,WLVLPSRUWDQWto recognize that marshaling the diversity of the individuals that make up our labor force will enable us to respond to social imperatives or even to change DIC itself.”
The Group will continue working to draw out the distinctive capabilities of its employees by creating work environments that empower a richly diverse global team oftrue individuals to fully exercise their abilities.
1

Hiring Diverse Human Resources

With the objective of securing talented individuals with advanced specialized capabilities,
global perspectives and language capabilities, DIC actively promotes the hiring of international
students completing undergraduate or graduate studies at Japanese universities; Japaneseand foreign nationals completing undergraduate or graduate studies at overseas universities;
and experienced mid-career candidates with extensive experience and expertise. At present,
approximately 40 foreign nationals are employed in various capacities at DIC.

Nationalities of Foreign Employees

1

Number of Foreign Nationals Currently Employed by DIC
Sales
positionsTechnical
positions

Department/
divisionadministration

4

25

8

Postedoverseas

Production

Total

4

1

42

1

1

2
3
4

2
Breakdown by
Nationality

8

20

PRC
ROK
Thailand
Malaysia
TaiwanUnited StatesIndonesia
Spain
Germany

VOICE Thanks to the support of my supervisors and colleagues, I learned to really love my work.
I met a number of DIC employees at an academic conference when I was in graduate school and was really impressed by their positive attitude
DQGEURDGH[SHUWLVHVRZKHQ,VWDUWHGORRNLQJIRUDMREDIWHUJUDGXDWLRQ',&ZDVP\¿UVWFKRLFH0\¿UVWDVVLJQPHQWZDVLQDGHSDUWPHQW
involved in developing LC products, which is completely different from my area of specialization in university and something I really did not
NQRZPXFKDERXW7KDQNVWRWKHVXSSRUWRIP\VXSHUYLVRUVDQGFROOHDJXHV,ZDVDEOHWRRYHUFRPHDQ\GLI¿FXOWLHV,IDFHGDQGSOD\DNH\UROHLQdeveloping products and learned to really love my work. To me, DIC’s true appeal is its willingness to entrust important tasks to young employees
and the fact that I have so many colleagues I can talk to about anything, whether work-related or personal. In April of this year, I was transferred
to a department involved in gravure inks development, so I am once again working hard to learn new things with the aim of quickly becoming a
useful part of my new team.
Dispersion Technical Group 1, Tokyo Plant Keumhee JangDIC Report 2018118

Human Resources Management

2

Expanding Career Opportunities for Women

In line with its commitment to promoting diversity, DIC implements a variety of initiatives to expand career opportunities for female employees.
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2016 the Company has pushed ahead with measures to transform employee mindsets and its corporate culture, as well as to provide training
designed to encourage the drive and determination of female employees and broaden the range of jobs open to women.
Creating a Framework for Initiatives,Q¿VFDO\HDU',&HVWDEOLVKHGWKHSRVLWLRQRIGLYHUVLW\RI¿FHULQHDFKRILWVEXVLQHVVXQLWVWRFUHDWHDIUDPHZRUNIRULQLWLDWLYHVLQHDFKEXVLQHVVXQLWWKDWUHÀHFWWKHDFWXDOVLWXDWLRQRQWKHJURXQG7KHLQGLYLGXDOLQFKDUJHRIGLYHUVLW\IRUWKH*URXSDQGWKHEXVLQHVVXQLWGLYHUVLW\RI¿FHUVPHHW
periodically to exchange information, among others, with the aim of raising the standard of initiatives implemented Companywide.

Transforming Employee Mindsets and the DIC Corporate Culture
In October 2016, DIC held the Women in DIC Forum, which addressed the issue of career opportunities for female employees and welcomed
female executives from multiple Group companies, at its corporate headquarters in Tokyo. Approximately 800 employees—split evenly
EHWZHHQIHPDOHHPSOR\HHVDQGPDOHPDQDJHPHQWOHYHOHPSOR\HHV²SDUWLFLSDWHGLQWKHFRQIHUHQFHRQVLWHDQGYLDOLYHUHOD\,QWKH¿UVW
session, four female executives from overseas Group companies gave presentations, while in the second session three female employees
in senior positions in Japan joined the four speakers for a panel discussion on pursuing a rewarding
career as a way to enrich one’s life. The discussion was broadcast to 14 DIC Group sites across Japan.
$VSDUWRILWVHIIRUWWRFKDQJHWKHPLQGVHWVRIPDQDJHPHQWOHYHOHPSOR\HHVLQ0D\',&KHOGD
conference for approximately 300 line supervisors on the meaning of diversity. The following month, theCompany held a round-table discussion that included an outside director who is board chair of an NPO
DQGLVZHOOYHUVHGLQGLYHUVLW\PDQDJHPHQW$OOH[HFXWLYHRI¿FHUVSDUWLFLSDWHGLQWKHGLVFXVVLRQZKLFKincluded debate on the direction and substance of future efforts to promote career opportunities forfemale employees.
Women in DIC Forum
Enhancing Management Skills,QDPRYHGHVLJQHGWRKHOSHQKDQFHWKHPDQDJHPHQWVNLOOVRIIHPDOHHPSOR\HHVLQ¿VFDO\HDU',&EHFDPHDPHPEHURIWKH-DSDQ:RPHQ¶V,QQRYDWLYH1HWZRUN -:LQ UHJLVWHULQJWZRHPSOR\HHVDVLQGLYLGXDOPHPEHUV$Q132WKDWDVVLVWVHIIRUWVWRSURPRWHDQG¿UPO\establish diversity management in the workplace, J-Win engages in a broad range of activities, including advising and serving as a consultant
for companies seeking to advance career opportunities for female employees, organizing seminars and lectures, and conducting surveys.
DIC employees participate in a variety of J-Win programs with the goal varying from improving project management capabilities and selfimprovement to conducting research using diversity case studies and expanding networking efforts.
7KDQNVWRWKHVHDQGRWKHUHIIRUWVWRLPSURYHZRUNHQYLURQPHQWVLQ¿VFDO\HDUWKHYROXQWDU\VHSDUDWLRQUDWHIRUIHPDOHHPSOR\HHVRIWKHSDUHQWFRPSDQ\UHPDLQHGLQWKHDUHDRIZKLOHWKH
average years of service for female employees once again exceeded that for male employees.
DIC continues taking decisive steps to expand its recruitment of new female graduates fromtechnical schools and bachelor’s and master’s degree programs, conduct awareness seminars for
HPSOR\HHVTXDOL¿HGIRUH[HFXWLYHDQGPDQDJHULDOSRVLWLRQVDQGH[SDQGLWVWHOHFRPPXWLQJV\VWHP
Through such efforts, the Company aims to boost the percentage of management positions occupied
Regular meeting of J-Win members-XO\7RN\R
E\IHPDOHHPSOR\HHVWRE\-DQXDU\',&KDVDOVRIRUPXODWHGDQDFWLRQSODQEDVHGRQ
Japan’s Act on Promotion of Women’s Participation and Advancement in the Workplace.

VOICE What I learned through participation in a J-Win program designed to advance career opportunities for women.
I participated in a 23-person working group organized on the theme of collaboration among companies with the goal of group members fortifying
knowledge and experience through a variety of activities, including document studies, visits to various companies and the examination of caseVWXGLHV7RPHWKHPRVWH[KDXVWLQJSDUWZDVWKHGLVFXVVLQJRIPDWWHUVXQWLOHYHU\PHPEHUZDVVDWLV¿HG$VLQGLYLGXDOVZLWKQRWKLQJLQFRPPRQRWKHUWKDQWKHIDFWWKDWZHDUHIHPDOHDQGEXVLQHVVSHRSOH,WKLQNZHDOOIRXQGWHDPEXLOGLQJDQGWKHDOLJQPHQWRIJRDOVGLI¿FXOW7KHRSSRUWXQLW\WRVKDUHLQIRUPDWLRQZLWKSHRSOHIURPGLIIHUHQWFRPSDQLHVDQGV\VWHPVZDVVWLPXODWLQJDQGSURYLGHGDQRSSRUWXQLW\WRUHÀHFWRQRQH¶VRZQ
company. Participation in this working group also enabled me to build a network of contacts that I will always value. Going forward, the challenge
ZLOOEHWRWUDQVIRUPWKLVLPSRUWDQWH[SHULHQFHDQGWKHFRQQHFWLRQV,PDGHLQWRVRPHWKLQJWKDWHIIHFWLYHO\EHQH¿WV',&
Publicity Manager, PR Group, Corporate Communications Department Yukie Yano

DIC Report 2018

119

Human Resources Management

Initiatives Aimed at Expanding Career Opportunities for WomenTransform corporate culture
and the mindset ofmanagement-level employees

2007
2015

Encourage the drive anddetermination of female employees
Expand opportunities forfemale employees
Establish systems to supporta healthy work–life balance
for female employees andencourage the use thereof● Message from the President● Seminars to promote awareness● Identical uniforms for male and female employees●Training for employees in administrative positions● Seminars to promote awareness among female employees● Introduction of role models● Assignment of female employees to production and sales positions● Inclusion of female employees in regular system of transfers, reassignments and job rotations● Increase in number of women hired● Establishment of systems to support a healthy work–life balance● Publication of the Libra work–life balance support guide and introduction of e-learning

program for employees taking leave● Introduction of system allowing management-level employees to limit the locations to which

they will accept transfers● Women in DIC Forum2016 and beyond

Further expand support
to measures and promoteawareness● Diversity seminars for executives and supervisors● Lunchtime seminars for female employees conducted by executives● Awareness seminars for female employee● Career support seminars for female employees

Policy for Advancing the Careers of
Female Employees
DIC is committed to creating awork environment in which all
employees can fully exercise theirabilities. To this end, theCompany pledges that female
employees shall enjoy equal
access to career opportunities as
their male counterparts and thatno gender-based restrictions or
barriers shall be applied.

Female Employees inManagement Positions

Stimulate an
appropriate
employee mindset
and corporate
cultureAs of January 1, 2018
Transform
the mindset of
employees qualified
as candidates
for management
positions

Encourage the drive
and determination of,as well as expand
opportunities for,female employees

4.4％

Create a Work Environment that
Helps Employees Balance Careerwith Childcare

As of January 1, 2021 (Target)

8.0％

Percentage of DIC’s Labor Force Accounted
for by Individuals with Disabilities
3

Advancing the Employment of Individuals with Disabilities

DIC is committed to creating inclusive work environments that help
LQGLYLGXDOVZLWKGLVDELOLWLHVHQMR\DFWLYHDQGIXO¿OOLQJFDUHHUV2QHLQLWLDWLYH
which began in fiscal year 2015, is an internship program, organized incollaboration with a facility providing support for individuals with intellectual
GLVDELOLWLHVGHVLJQHGWRWUDQVLWLRQLQWRIXOOWLPHHPSOR\PHQW,Q¿VFDO\HDUWKUHHSURJUDPSDUWLFLSDQWVZHUHRIIHUHGIXOOWLPHFOHULFDOSRVLWLRQV$VRI'HFHPEHULQGLYLGXDOVZLWKGLVDELOLWLHVDFFRXQWHGIRU
of DIC’s total labor force, falling slightly short of Japan’s legally mandated
TXRWDRI*RLQJIRUZDUG',&ZLOOFRQWLQXHVWULYLQJWRHQKDQFHZRUN
environments and increase workplace accessibility with the aim of lifting
WKLV¿JXUHWRE\¿VFDO\HDU

DIC Report 2018

120

2.30%

2.20%

2.22%
Percentage oflabor force accounted forby individuals with disabilities
as of December 31, 2017

2.14%

2.20%

2.06%
2.10%

1.94%

(Legally mandated quota revised)

2.00%

1.94%

2.04%

1.90%
Japan’s legally mandated quota

1.80%

1.70%

12

13

14

15

16

17 (FY)

Percentage oflabor force accounted
for by individuals
with disabilities

Human Resources Management

4

Reemployment after Retirement and Support for Retirement Planning

DIC has deployed a system that facilitates the reemployment untilage 65 of individuals reaching retirement age (60) and wishing toremain with the organization. With available options including fulltime work, short-time work and work sharing, this system enables
reemployed individuals to maximize their experience and make fulluse of their accumulated technological capabilities and specialized
expertise, thereby contributing to sustainable growth for the DIC
Group and the training of subsequent generations.
DIC also offers classes for employees within a year of retirement thathelps them prepare for life after their careers. These classes provide
assistance with retirement planning and education regarding thenational pension system, as well as offer retirement lifestyle simulations.

Number of Reemployed Individuals

Number of retirees (A)Individuals seeking
reemployment
Number of individuals
reemployed (B)Reemployment rate (B) / (A)Fiscal year 2015

Fiscal year 2016

Fiscal year 2017

126
104
97
77.0％

108
92
91
84.3％

69
55
55
79.7％

| Initiatives that Support a Healthy Work–Life Balance
DIC views a healthy work–life balance as essential to both self-realization and sustainable corporate growth. Accordingly, from the standpoint of corporate healthmanagement*, the Company continues to expand systems intended to facilitate such a balance.
In response to falling birth rates and lengthening life spans, the Japanese government has launched a drive to promote work style reforms, in line with its belief
that positive workplaces lead to higher productivity, with the aim of helping individuals balance the demands of a career and childcare or nursing care and improving
SURGXFWLYLW\6LQFHZHOOEHIRUHWKLV',&KDVSURPRWHGLQLWLDWLYHVDLPHGDWHQDEOLQJDOOHPSOR\HHVWRUHDOL]HERWKDVDWLVI\LQJZRUNOLIHDQGDIXO¿OOLQJOLIHRXWVLGHZRUN
* An approach to employee health management that emphasizes a corporate management perspective and the implementation of strategic measures.

1

Enhancing Programs that Help Employees Balance the Demands of Work and Home.XUXPLQ0DUN&HUWLÀFDWLRQ

In 1986, DIC blazed a trail for chemicals manufacturers in Japan by implementing a childcare
leave program. Since establishing a program to support employees in balancing the demands
RIDFDUHHUDQGFKLOGFDUHLQWKH&RPSDQ\KDVFRQWLQXHGSURPRWLQJPHDVXUHVWKDWPDNH
it easier for employees to make use thereof. In fiscal year 2008, DIC acquired the Kurumin
Mark, which recognizes companies that promote initiatives designed to assist employees
in raising children. The Company also deployed a system that gives regular employees theoption to accept or refuse transfers requiring relocation and, since 2012, a system that allows
management-level employees to limit the locations to which they will accept transfers, making
it easier for individuals who are unable to accept transfers that involve relocation because ofchildbirth, childcare, nursing care or other responsibilities.

In 2008, DIC was accordedt he Kur umin M ar k, w hic hrecognizes companies that
actively promote initiatives
designed to assist with childrearing, by Japan’s Ministry of
Health, Labour and Welfare.

Promoting Measures to Retain Employees with Nursing Care Responsibilities,Q-DSDQRQHRIWKHVRFLDOUDPL¿FDWLRQVRIIDOOLQJELUWKUDWHVDQGOHQJWKHQLQJOLIHVSDQVLVDQLQFUHDVHLQWKHQXPEHURISHRSOHUHTXLULQJQXUVLQJFDUHDVDUHVXOWRIZKLFKPRUHSHRSOH¿QGWKHPVHOYHVKDYLQJWROHDYHWKHLUMREVWRWDNHFDUHRIIDPLO\PHPEHUVSteps taken by the government to help address these issues include revising the Child Care and Family Care Law in 2016 to make
LWHDVLHUIRULQGLYLGXDOVWRWDNHOHDYHRUWLPHRIIDQGLQFUHDVLQJEHQH¿WVIRUWHPSRUDU\DEVHQFHVIURPZRUN7RHQFRXUDJHXVHDQG
SURPRWHNQRZOHGJHRILWVUHODWHGOHDYHSURJUDPVLQ-XQH',&EHJDQGLVWULEXWLQJWKHChildcare and Nursing Care Handbook.
DIC has also revised the rules of these programs, including making it possible to break up nursing care leave, as well as to shorten
workdays, thereby making it easier for employees to use them.
Promoting Telecommuting,Q¿VFDO\HDU',&EHJDQH[SORULQJWKHSRWHQWLDORIWHOHFRPPXWLQJZKLFKHQDEOHVHPSOR\HHVWRZRUNDWKRPHRUDQRWKHUUHPRWHORFDWLRQXVLQJ,&7HOLPLQDWLQJWKHWLPHDQG
location constraints of traditional work arrangements. The following year, employees and management conducted extensive talks to iron out details. After analyzing and evaluating
WKHUHVXOWVRIDWULDOLQYROYLQJHPSOR\HHVLQ-DQXDU\WKH&RPSDQ\ODXQFKHGWKH',&7HOHFRPPXWLQJ6\VWHPZKLFKLVDYDLODEOHWRDOOHPSOR\HHVDWDOOVLWHVLQ-DSDQBy creating systems that make it possible for each employee to choose a working style that suits the type of work he or she does, as well as his or her personal needs, DIC
will continue working to help employees achieve a healthy work–life balance. The Company will also continue to promote the independent execution of duties with the aim ofreinforcing employees’ self-management capabilities, thereby accelerating efforts to galvanize employees and encouraging them to give full play to their creativity.

DIC Report 2018121

Human Resources Management

Major Expansion of the Flextime System
7RIDFLOLWDWHÀH[LEOHZRUNLQJVW\OHVLQ¿VFDO\HDU',&UHVROYHGWRVLJQL¿FDQWO\H[SDQGLWVÀH[WLPHV\VWHPDQGLQ$SULOPDGHWKH
system applicable to all areas of operations other than production floors. The system makes it possible for employees to determine the
WLPHDWZKLFKWKH\HQGWKHLUZRUNLQJGD\WRWKHH[WHQWWKDWLWGRHVQRWKLQGHUEXVLQHVVHI¿FLHQF\DVZHOODVWRVLPXOWDQHRXVO\PDNHXVHRI
telecommuting, with the goal of promoting the independent execution of duties and enhancing self-management capabilities.

Work and Childcare Balance Support ProgramsChildcare Leave Program

The maximum length of leave is until the child reaches the age of 2 years and 6 months, which
is one year longer than the legally mandated leave period.

Leave to Assist with Parenting Program

0DOHHPSOR\HHVFDQWDNH¿YHGD\V¶SDLGOHDYHGXULQJWKHHLJKWZHHNVIROORZLQJWKHLUFKLOG¶VELUWKWRDVVLVWZLWKSDUHQWLQJ

Childcare While Working Program

Employees can shorten their workday by up to three hours until the end of a child’s third year of elementary school.
Employees can also stagger their working hours to accommodate childcare schedules.

Economic support system

This system enables employees on unpaid childcare leave to borrow a portion of their bonuses in advance to pay for,among others, fertility treatment or infant care facility fees.

Return to previous (or equivalent) position

Employees returning from childcare leave must be allowed to return to their previous position or to a position equivalent thereto.

Information sharing topromote program participation

DIC’s views on support for work and childcare balance, as well as a guide to its various available systems and how to makeuse of them, are posted on the Company’s website and intranet.

Nursing care leave system

Employees can take such leave for up to one year, exceeding the statutory maximum of 93 days. As of January 2018, employees
may also break up leave without restriction.

Nursing Care While Working Program

Employees not wishing to take leave while providing nursing care can shorten their workday by up to two hours or opt
for a system in which they shorten their days by two hours before or after prescribed working hours. As of January 2018,
employees may also request to be excused from doing overtime without restriction.

Relocation limitation system

Management-level employees may limit the locations to which they will accept transfers that involve relocating because of childbirth,childcare, nursing care or other responsibilities.

Use of the Childcare Leave and Leave to Assist with Parenting Programs
Thanks to the introduction of various programs to help employees in balancing the demands of work and home and the creation of an environment that encourages employees
to take advantage of such thereof, the percentage of DIC employees who return to work after using DIC’V&KLOGFDUH/HDYH3URJUDPLVFXUUHQWO\7KHQXPEHURILQGLYLGXDOVusing the Leave to Assist with Parenting Program, available to the dependents of employees who have given birth, has risen. Underscored by efforts to enhance these systems, theaverage years of employment for female employees has increased, exceeding the average for male employees.

Number of Employees Using the Childcare Leave and Leave to Assist with Parenting Programs
Fiscal year 2014

Fiscal year 2015

Fiscal year 2016

Fiscal year 2017

28
63

29
64

35
62

35
77

Number of employees using
the Childcare Leave Program
Number of employees using
the Leave to Assist with Parenting Program

Average Years of Employment(Including Individuals Seconded to Group Companies)
Average years of employment in fiscal year 2017
Male employees(Years)Female employees Overall

18.2 years 19.2 years 18.4 years

25
20
15
10
5
0

94

09

10

Male employees

11

12

13

14

15

16

17 (FY)

Female employees

DIC Report 2018122

Human Resources Management

2

Reducing Extreme Overwork and Encouraging Employees to Take Annual Paid Leave

DIC has deployed an electronic system to manage on-site hours, working hours and approved overtime hours. As a measure to prevent
extreme overtime, if an employee exceeds the agreed-upon overtime limit (80 hours/month), his or her supervisor and the senior executive in
FKDUJHDUHDXWRPDWLFDOO\QRWL¿HGVRWKDWVWHSVFDQEHWDNHQWRDPHOLRUDWHWKHVLWXDWLRQ7KHVXSHUYLVRULVUHTXLUHGWRVXEPLWDUHSRUWRXWOLQLQJ
WKHHPSOR\HH¶VZRUNDQGWKHUHDVRQVIRUWKHH[FHVVLYHKRXUVZKLOHDOVRSUHVHQWLQJVSHFL¿FPHDVXUHVWRDPHOLRUDWHWKHVLWXDWLRQZKLFKLV
also shared with the DIC Employees’ Union, a process designed to curb extreme overwork.
In addition, the Company has instituted a mandatory Groupwide “no overtime day” every Wednesday and on payday, which in Japanis once a month at month-end, in a bid to encourage efficient work practices and bolster productivity. (Sites can change these days as
appropriate.) DIC also encourages employees to take annual paid leave, notably by recommending leave timing at each site and having
employees plan dates for such leave.

Average Monthly Overtime Hours Worked and Annual Paid Leave Taken

Average monthly overtime hours
worked per employee
Average annual paid leave granted
Average annual paid leave used
Usage rate for annual paid leave

Fiscal year 2014

Fiscal year 2015

Fiscal year 2016

Fiscal year 201712.2 hours
19.1 days
11.0 days
57.6 ％

12.1 hours
18.8 days
11.2 days
59.6 ％

12.3 hours
19.1 days
12 days62.8 ％

12.2 hours
18.8 days
12 days
63.8％| Caring for Mental Health
DIC takes steps to create environments in which employees feel physically and mentally supported and works to ensure that its labor
management practices comply with relevant laws. The Company places a high priority on caring for psychological and emotional well-being
and has established a comprehensive mental health program, highlights of which include engaging an in-house occupational psychologist,
promoting initiatives aimed at warding off mental health problems and extending support to ensure a smooth return to work for employees
taking leave. In particular, access to counseling provided by an occupational psychologist has had a considerably positive impact in terms of
ensuring employees get treatment and are able to return to work as quickly as possible.
',&KDVDOVRRIIHUHGYROXQWDU\VWUHVVFKHFNVVLQFH¿VFDO\HDUDQGSURPRWHVDFWLYHV\VWHPDWLFHIIRUWVZLWKWKHDLPRISUHYHQWLQJ
PHQWDOKHDOWKGLVRUGHUVLQDFFRUGDQFHZLWKUHODWHGOHJLVODWLRQSDVVHGLQ-DSDQLQILVFDO\HDU,QILVFDO\HDU',&FRQGXFWHG
seminars led by an in-house physician at sites that have scored above a certain level in voluntary stress checks and provided counseling
aimed at helping employees improve communications with supervisors, colleagues and family members. The Company will promote theongoing, systematic implementation of these initiatives.

Mental Health Initiatives• Guidance from an in-house occupational psychologist
 HQJDJHGDVDQRFFXSDWLRQDOSK\VLFLDQVLQFH¿VFDO\HDU
• Internal and external help desks• Line-care training* for supervisors• Mental health self-checks as a part of training for new employees• Distribution of Kokoro no Kenko (“Psychological Health”) self-check handbook to all employees• Flexible process to support employees returning to work after taking leave* Line-care training: Training for supervisors to help them recognize promptly when an employee is unwell and respond appropriately by, for example,
recommending guidance or counseling or making workplace improvements.

DIC Report 2018123

Kokoro no Kenko
self-check handbook

Human Resources Management| Initiatives to Support Employee Health
DIC has always analyzed the results of employees’ annual physicals and provided assistance to employees forwhom lifestyle improvements have been recommended by providing introductions to hospitals and clinics. The
Company has also sought to contribute to good health for employees by encouraging the use Spirulina—a notedsuperfood* that is manufactured by a DIC Group company—as an ingredient in cooking.
In fiscal year 2016, DIC’s Healthcare Office and the company responsible for the operation of the corporate
headquarters’ employee cafeteria collaborated to develop a new healthy cafeteria menu. The new menu, dubbed
DIC Irodori Care+ (“DIC Colorful Care+´ ZDVODXQFKHGLQ)HEUXDU\EHJLQQLQJZLWKWKHFDIHWHULDDWWKH
Company’s corporate headquarters in Tokyo, with distinctive signage used to promote recognition and a clear
explanation provided of the benefits of menu selections, including reduced calories and low sodium content, toencourage use.
DIC will continue implementing measures designed to help ensure the physical and mental health of its employees
as part of its commitment to creating a work environment in which all employees can fully exercise their abilities.

A new healthy cafeteria menu selection

7KHWHUP³VXSHUIRRG´LVXVHGWRGHVFULEHVWDQGDUGIRRGVZLWKDQH[FHOOHQWEDODQFHRIQXWULHQWVWKDWSURYLGHKHDOWKEHQH¿WVDQGIRRGVFRQWDLQLQJVSHFL¿FQXWULHQWVDQGRULQJUHGLHQWVJRRGIRU
human health.

T

PIC',&(DUQV´:KLWHµ&HUWLÀFDWLRQLQWKH+HDOWK 3URGXFWLYLW\2XWVWDQGLQJ(QWLWLHV5HFRJQLWLRQ3URJUDP
DIC was certified for the first time in the large enterprise category (dubbed the “White 500”) of the 2018 Health & Productivity Outstanding Entities
Recognition Program, which is organized by Japan’s Ministry of Economy, Trade and Industry and Nippon Kenko Kaigi*1. By shining a spotlight on
outstanding enterprises working to advance health and productivity management, this program seeks to create an environment that ensures such enterprises
JDLQHQKDQFHGSXEOLFUHFRJQLWLRQ²LHIURPHPSOR\HHVMREVHHNHUVUHODWHGFRPSDQLHVDQG¿QDQFLDOLQVWLWXWLRQV²DVRUJDQL]DWLRQVWKDWDSSURDFKHPSOR\HH
health and productivity from a management perspective and promote strategic initiatives.
In addition to looking at whether enterprises have stipulated health management in their corporate mission anddisclose pertinent information, the 2018 Health & Productivity Outstanding Entities Recognition Program assessed
performance based on three criteria, namely, grasp of employee health-related issues and consideration of actions,establishment of a foundation for the practical implementation of health and productivity management measures andwork engagement*2, and promotion of efforts that help ensure the physical and mental health of employees. DIC
UHFHLYHGVFRUHVVLJQL¿FDQWO\DERYHWKHLQGXVWU\DYHUDJHIRUDOOWKUHHRIWKHVHFULWHULD¿QLVKLQJLQWKHWRSZLWKD¿YHVWDUUDWLQJ
Going forward, DIC will continue to implement measures designed to help ensure the physical and mental health of its
employees as part of its commitment to creating a work environment in which all employees can fully exercise their abilities.
*1 Nippon Kenko Kaigi (“Japan Health Council”) is an organization that liaises with private companies, with the full backup of the government, to put effective measures in place toprolong the healthy life expectancy of citizens and to ensure sound medical services in Japan.
*2 $FRQFHSWXVHGWRPHDVXUHHPSOR\HHV¶PHQWDOKHDOWKZRUNHQJDJHPHQWLVGHVFULEHGDVDSRVLWLYHIXO¿OOLQJZRUNUHODWHGVWDWHRIPLQGWKDWLVFKDUDFWHUL]HGE\YLJRUGHGLFDWLRQDQG
absorption. “Vigor” is taking pride and experiencing a sense of satisfaction in one’s work, “dedication” is feeling strongly involved in and focused on one’s work and “absorption” isbeing actively engrossed in one’s work.

DIC Report 2018124

Core and CategorySpecific Themes

Basic Themes

Sustainable Procurement

Themes that Demonstrate
Unique Capabilities

SDGs Goal 12

Promoting Socially Responsible Procurement Across the Supply Chain
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Promote CSR procurement

Goals for fiscal year 2017

Achievements in fiscal year 2017

• For raw materials used in core businesses,
wor k with suppliers to minimize CSR
procurement–related risks.
• Examine CSR procurement assessments ofsuppliers in the PRC more carefully with thegoal of uncovering issues in the supply chain
and implementing corrective measures
together. Share information with the Sun
Chemical Group.
• Based on CSR procurement questionnaire
responses in Japan, discuss correctivem e as u r e s w i t h s u p p l i e r s h av i n g l ow
self-assessment scores.

Fo r r a w m at e r i a l s p r o c u r e d i n
Greater China, to confirm suppliers’
ability to respond to environmental
regulations, measures focused on
implementing on-site inquires at key
suppliers of raw materials used incore businesses and requestingcorrective measures. Information
derived was shared with the Sun
Chemical Group.

For companies overseen by DIC Asia
Pacific and DIC (China), use version 2of the DIC Group Supply-chain CSR
Deployment Guidebook to once
again advance awareness of CSR
procurement, prioritizing key raw
materials in core businesses.

DIC Asia Pacific and DIC (China)
worked with local companies to
conduct on-site inquiries at suppliersin their respective regions (two in the
Asia – Pacif ic region and t wo in
G reater China) wit h t he aim of
fostering awareness.

Evaluation

Goals for fiscal year 2018★★

For raw materials procured in Greater
China, minimize procurement–relatedrisks by closely inspecting the
responses to environmental
regulations and implementing
countermeasures to address issues.

★★

For suppliers of raw materials usedin core businesses that are based in
the Asia–Pacific region, implement
detailed inquiries to gain a solid
grasp of risks, thereby ensuring
procurement stabilit y, from theperspective of business continuity.

Basic Approach to Sustainable Procurement
Having recognized the increasing importance of addressing global issues related to human rights, climate change and water risk, among others, as social imperatives,
the DIC Group promotes socially responsible procurement practices. To ensure its extended supply chain functions in a socially responsible manner, the DIC Groupestablished the DIC Group Universal Purchasing Policy, based on which it also formulated purchasing management regulations, in 2008 and the DIC Group CSR
Procurement Guidelines, which clarify issues it expects suppliers to address, in 2009. Using the policy and guidelines, the Group promotes CSR procurement acrossits supply chain by ensuring that all suppliers implement improvements and initiatives necessary to ensure the sustainability of Group procurement. Group companies
LQ-DSDQWKH$PHULFDVDQG(XURSH*UHDWHU&KLQDDQGWKH$VLD±3DFL¿FUHJLRQFROODERUDWHWRHQVXUHVXVWDLQDEOHSURFXUHPHQWRQDJOREDOEDVLVThe DIC Group Universal Purchasing Policy

The DIC Group CSR Procurement Guidelines

Guided by an action policy established to realize the DIC Group’s basic sustainable procurement
principles, the Purchasing Department adheres to the following guidelines in dealing with suppliers:❶ Compliance with laws and social norms❷ Respect for human rights and consideration❶ Fair and transparent business practices

The DIC Group will implement fair and open purchasing activities with suppliers based on global
perspectives, without the constraints of conventional commercial customs.
❷ An appropriate purchasing process and the building of relationships of mutual trust

The DIC Group, as a good partner for suppliers, will build long-lasting, mutually trusted relationships with
VXSSOLHUVDQGZRUNWRJHWKHUZLWKWKHPIRUPXWXDOKDUPRQ\DQGEHQH¿WZKLOHFRPSO\LQJZLWKUHOHYDQWregulations/social norms, domestic and overseas, and pursuing adequate quality and prices.
❸ Satisfying environmental/safety needs

The DIC Group will take responsibility as an exemplary corporate citizen for environmental affairs,
occupational safety, human health and product quality, always take into account changes in society andimplement environment-friendly purchasing activities❹ Challenge the creation of new value

In order to respond at a high level to a new value sought by society, the DIC Group will proactively
challenge the creation of such value together with suppliers, with whom the same goal can be shared,
and strive to grow together with them in a sustainable manner.

DIC Report 2018125

for work environments❸ Safety and hygiene❹ Promotion of sound business management❺ Consideration for the environment❻ Information security❼ Appropriate quality and safety and improved

technologies❽ Flexible attitude to ensure stable supplies andrespond to change❾ Contribution to local communities and society❿ Promoting CSR and deploying it in the supply chain

Sustainable Procurement| Encouraging CSR Procurement
Based on the DIC Group Universal Purchasing Policy, and incorporating requirements contained in guidebooks put out by external organizations including
the Japan Electronics and Information Technology Industries Association (JEITA), DIC formulated the DIC Group CSR Procurement Guidelines, a series ofrequirements pertaining to ESG-related imperatives, including the management of chemical substances in and reduction of the environmental impact of raw
materials, as well as respect for human rights across its entire supply chain. With the aim of compelling suppliers to observe these guidelines, the DIC Group
conducts assessments and on-site inquiries in accordance with the DIC Group Supply-chain CSR Deployment Guidebook. (Version 2 of the guidebook
was published in July 2013.) In addition to obliging suppliers to ensure the stringent management of chemical substances through the DIC Group Green
Procurement Guidelines, the Group entreats suppliers to develop and release products that have less of an impact on the environment and promote green
procurement themselves, as well as to lower the environmental impact of materials they procure, and of the packaging, transport, production and engineering
thereof, by trimming resources and energy used in, decreasing the weight and expending the useful life span of, and reducing CO2 emissions from suchmaterials. Such measures have proven effective in strengthening the Group’s relations with suppliers.

| The DIC Group Green Procurement Guidelines
In line with the DIC Group Universal Purchasing Policy, DIC formulated the DIC Group Green Procurement Guidelines, which prohibit the procurement ofmaterials containing hazardous substances in seven categories*1. The guidelines mandate the submission of a DIC Raw Materials Survey, an SDS anda chemSHERPA*2, as well as a DIC Group Green Procurement Guidelines Survey, when purchasing raw materials, thereby creating a system for eliminating
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*1  6XEVWDQFHVWKHSURGXFWLRQRIZKLFKLVSURKLELWHGDVRXWOLQHGLQ$UWLFOHRI-DSDQ¶V,QGXVWULDO+HDOWKDQG6DIHW\$FW  6XEVWDQFHVGHVLJQDWHGDVFODVVVSHFL¿HGFKHPLFDOVXEVWDQFHV
in Japan’s Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc.; (3) Substances designated for monitoring under Japan’s Act on the Evaluation of Chemical
Substances and Regulation of Their Manufacture, etc.; (4) Chemical substances the production of which is already prohibited, as detailed in Japan’s Act on the Protection of the Ozone Layer
7KURXJKWKH&RQWURORI6SHFL¿HG6XEVWDQFHVDQG2WKHU0HDVXUHV R]RQHGHSOHWLQJVXEVWDQFHVOLVWHGLQWKH0RQWUHDO3URWRFRO   6SHFL¿HGSDUWLFXODWHVGHQRWHGLQ-DSDQ¶V$LU3ROOXWLRQ&RQWURO$FW  6SHFL¿HGSRLVRQRXVVXEVWDQFHVLQGLFDWHGLQ-DSDQ¶V3RLVRQRXVDQG'HOHWHULRXV6XEVWDQFHV&RQWURO$FWDQG  6SHFL¿HGVXEVWDQFHVGHWDLOHGLQWKH6WRFNKROP&RQYHQWLRQRQ
Persistent Organic Pollutants.
*2 FKHP6+(53$LVDVFKHPHGHVLJQHGWRIDFLOLWDWHWKHDFFXUDWHDQGHI¿FLHQWVKDULQJRILQIRUPDWLRQRQFKHPLFDOVXEVWDQFHVLQSURGXFWVDFURVVWKHHQWLUHVXSSO\FKDLQ',&EHJDQXVLQJFKHP6+(53$LQODWH¿VFDO\HDU

| Supplier Self-Evaluations
In accordance with version 2* of the DIC Group Supply-chain CSR Deployment Guidebook, the DIC Group asks suppliers to complete questionnaires, which it uses
to ascertain the status of suppliers’ CSR procurement practices. The questionnaire further segments the Group’s 10 procurement guidelines into 46 issues, including
green procurement, acquisition of ISO 14001, consideration for human rights and the work environments, and promoting CSR procurement to secondary suppliers.
* Version 1 of the DIC Group Supply-chain CSR Deployment GuidebookZDVSXEOLVKHGLQLQ-DSDQHVH(QJOLVKDQG&KLQHVH9HUVLRQSXEOLVKHGLQ-XO\LQFOXGHVQHZVHFWLRQVRQFRQÀLFWminerals and biodiversity, added in response to changing social imperatives.

Assessment Distribution Chart (729 Suppliers)| Analyzing the Results of Questionnaires)URP 1RYHPEHU  WKURXJK 'HFHPEHU  WKH ',& *URXSFRQGXFWHGDVVHVVPHQWVIRUVXSSOLHUVXVLQJYHUVLRQRIWKHDIC
Group Supply-chain CSR Deployment Guidebook, accounting for
90%-plus of its procurement spending in Japan. The Group analyzed
DQGDVVHVVHGTXHVWLRQQDLUHUHVSRQVHVSURYLGLQJIHHGEDFNWRDOO
suppliers and requesting corrective measures for significant issues
through on-site inquiries or written comments.
Cumulative Number ofSuppliers Assessed(November 2013–December 2017)

395

400

Number of suppliers

350
300
250
200

143

150
100

79

50

Equivalent to 90%-plus ofprocurement spending in Japan

0

1

48
24 39

2.0 2.0〜2.5 2.6〜2.9 3.0〜3.5 3.6〜3.9 4.0〜4.5 4.6〜5.0

Scores729

Feedback sheet

Low
High
Note: Based on DIC’s analysis of questionnaire responses,
91% of suppliers assessed to date scored 3.0 or
higher on the Group’s 5.0-point scale.

| Conducting On-Site Inquiries)URP¿VFDO\HDUWKURXJK¿VFDO\HDUWKH',&*URXSFRQGXFWHGRQVLWHLQTXLULHVIRUVXSSOLHUV7KHREMHFWLYHRIWKHVHLQTXLULHVLVWRKHOSVXSSOLHUVIXUWKHUWKHLUXQGHUVWDQGLQJRI&65,QDQRQVLWHLQTXLU\WKH*URXSDQGWKHVXSSOLHUFRQ¿UPWKHUHVSRQVHVSURYLGHGE\WKHVXSSOLHULQWKHDVVHVVPHQWquestionnaire. Other efforts include introducing examples of Group initiatives designed to advance CSR procurement and realize sustainability.

DIC Report 2018126

Sustainable Procurement| Global Procurement Initiatives,Q¿VFDO\HDU',&DQGUHJLRQDOKHDGTXDUWHUVLQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQFRRSHUDWHGWRFRQGXFWRQVLWHLQTXLULHVIRUVXSSOLHUVLQFRUH
businesses in the PRC based on the suppliers’ CSR procurement assessment responses. DIC also worked with these suppliers to fortify understanding ofissues related to local environmental regulations, and of environmental issues in the supply chain related to local legal and regulatory compliance, as well as
to request corrective actions. Information on these on-site inquiries was shared at a global procurement conference with Sun Chemical.

| &RQÁLFW0LQHUDOVIn compliance with the U.S. Securities and Exchange Commission’VUHTXLUHPHQWIRUOLVWHGFRPSDQLHVWRUHSRUWRQWKHLUXVHRIFRQÀLFWPLQHUDOVWKH',&*URXSSXEOLVKHGLWV%DVLF3ROLF\FRQFHUQLQJ&RQÀLFW0LQHUDOVRQLWVJOREDOZHEVLWH7KLVSROLF\RXWOLQHVWKH*URXS¶VSOHGJHWRUHIUDLQIURPXVLQJJROG
WDQWDOXPWXQJVWHQDQGWLQZKLFKDUHFODVVL¿HGDVFRQÀLFWPLQHUDOVWKDWLVPLQHUDOVPLQHGLQFRQGLWLRQVRIDUPHGFRQÀLFWDQGDEXVHLQWKH'HPRFUDWLF
Republic of the Congo and its neighboring countries. The policy also states that should any raw materials purchased from third-party suppliers be found to
FRQWDLQFRQÀLFWPLQHUDOVWKH',&*URXSZLOOLPPHGLDWHO\WHUPLQDWHWKHSURFXUHPHQWWKHUHRI7KH',&*URXSXVHVWKH&RQÀLFW0LQHUDOV5HSRUWLQJ7HPSODWHSUHSDUHGE\WKH5HVSRQVLEOH%XVLQHVV$OOLDQFH 5%$ DQGWKH&RQÀLFW)UHH6RXUFLQJ,QLWLDWLYH &)6, WRFRQGXFWFRQÀLFWPLQHUDOVDXGLWVDFURVVLWVHQWLUHVXSSO\FKDLQ$VRI'HFHPEHUUHVSRQVHVKDGEHHQUHFHLYHGIRUPRUHWKDQRIWKHLWHPVFXUUHQWO\SURFXUHGE\*URXSSXUFKDVLQJGHSDUWPHQWVDIC Report 2018127

Basic Themes

Business Models that Respond to Social Imperatives

Core and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

SDGs Goals 8, 9 and 11

Cultivating Next-Generation Businesses

Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objective of initiatives

Goals for fiscal year 2017

Achievements in fiscal year 2017

With the aim of creating next-generation
businesses, strengthen cooperation withexternal organizations to acceleratebusiness expansion on a global scale.

P a r t i c i p a t e i n t r a d e s h o w s f o r key
customer industries in Japan and overseas
to strengthen the DIC brand.

Propose solutions- oriented
businesses that respond to social
imperatives.

Evaluation

Goals for fiscal year 2018

By reinforcing collaboration with othercompanies and organizations in thecreation of such next- generation
businesses as near infrared dyes, QD jet
inks and cell culture substrates, the DIC
Group made steady progress toward
entering promising new markets.

★★★

Implement value chain–oriented marketingand emphasize two perspectives, namely,
DIC Group products and customers/
regions, with the goal of expanding theGroup’s operating foundation and helping
to increase consolidated net sales.

The DIC Group participated in major tradeshows in Japan and overseas, including
FINETECH JAPAN, Food Safety Japan, Wood
Ecological Technology Fair 2017, Highway
Techno’ Fair 2017 and the 30th Annual
Meeting of the Japan Society for Endoscopic
Surgery (Japan) and interPack (Germany).
Group companies in the PRC and the ROK
also staged private exhibitions for customers.

★★★

P a r t i c i p a t e i n t r a d e s h o w s f o r key
customer industries in Japan and overseas
to strengthen the DIC brand and promote
digitization to improve efficiency.

| Responding Accurately to the Changing Needs of Society
Given the economic impact of key social imperatives, expectations are growing that highly competent companies—including those able to
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of related problems. The DIC Group’s approach is to ensure an appropriate grasp of changes in the social structure to gain insights into
concerns shared by its customers and to offer appropriate solutions. While the starting point of these efforts is listening to the voices of
its customers—an approach known as “customer-in”—the Group also takes a “market-in” approach, paying heed to the importance ofanticipating social imperatives.

| Promoting Businesses that Anticipate Social Imperatives
One of the central strategies of the DIC Group’s current medium-term management plan, DIC108, is to create next-generation businesses.
The Group is responding to this challenge through the cultivation of business models that address social imperatives.
For example, one of the principal objectives behind efforts to expedite the widespread adoption of renewable energy is to addressincreasingly crucial issues such as global warming and the depletion of fossil fuels. However, this depends on, among others, installing largecapacity storage batteries to resolve issues related to the generation of surplus electric power. The DIC Group conducts tireless research
aimed at addressing such challenges and is developing innovative materials and systems for storage batteries and sensors that will yield
concrete, viable solutions, thereby contributing to sustainability. The Group also continues to promote business activities with roots in theneeds of society with the aim of further evolving its business models.

| Examples of Optimized Business Models that Respond to Social Imperatives
1

Near Infrared–Based Food Contaminant Detection System that Will Improve Food Safety

DIC is currently developing a near infrared–based food contaminant detection
system in collaboration with Mitsui Kinzoku Instrumentations Technology
Corporation. The system combines dyes that emit infrared for plastics and a
device that detects near infrared and is thus expected to be able to identify
plastic contaminants, which has traditionally been considered difficult. Thanks
to near infrared’s safety—it has minimal impact on human health—and the easewith which it penetrates matter, the potential for application in the detection ofcontaminants in food products is seen as being high.

DIC Report 2018128

Near infrared–based food contaminant detection system

Business Models that Respond to Social Imperatives

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DIC is working with quantum dot (QD) manufacturer Nanosys to develop inks for use in the production of the world’s¿UVWFDGPLXPIUHH4'MHWLQNVIRUXVHLQLQNMHWSULQWHGTXDQWXPGRWFRORU¿OWHUV 4'&)V %HFDXVHWKH\IDFLOLWDWHWKH
PDQXIDFWXUHRIGLVSOD\VWKDWDUHPRUHSRZHUHI¿FLHQWDQGGHOLYHUDZLGHUFRORUJDPXWDQGYLHZLQJDQJOHWKDQH[LVWLQJ
units, QDCFs are garnering considerable attention for use in next-generation displays. Going forward, DIC will continue
promoting development with the goal of marketing inks for use in the production of inkjet-printed QDCFs, which will join
WKH&RPSDQ\¶V/&PDWHULDOVDQGRUJDQLFSLJPHQWVIRUFRORU¿OWHUVDVNH\RIIHULQJVLQWKLVDUHDLQ¿VFDO\HDU
3

Colloidal QD dispersions irradiated with a UV light

Cell Culture Containers with Thermosensitive Polymer Coating for Use in Regenerative Medicine

DIC recently developed the Cepallet™ series of cell detachment–enhancing cell culture containers, which
minimize damage to induced pluripotent stem (iPS) and embryonic stem (ES) cells during cell recovery.
The containers represent a practical application of the results of research conducted in collaboration with
Associate Professor Hirofumi Suemori of Kyoto University’s Institute for Frontier Life and Medical Sciences
and Masato Nakagawa, lecturer at Kyoto University’s Center for iPS Research and Application (CiRA). The
containers, which capitalize on DIC’s exclusive synthesis and coating technologies, minimize damage to
FXOWXUHGFHOOVGXULQJUHFRYHU\LPSURYLQJFHOOVXUYLYDOUDWHVDQGWKHHI¿FLHQF\RIUHFRYHU\

Cepallet™ cell culture containers| Anticipating Trends and Promoting Efforts to Identify and Cultivate Promising New Markets:LWKWKHDLPRIUHDOL]LQJVXVWDLQDEOHJURZWKRYHUWKHPHGLXPWRORQJWHUPWKH',&*URXSKDVLGHQWL¿HGSURPLVLQJQHZPDUNHWVDULVLQJIURPVRFLDOLPSHUDWLYHVLQVL[NH\DUHDV²
resources, materials and energy; logistics and industrial equipment; electronic and electrical equipment; pharmaceuticals and medical devices; general consumer products;
and construction infrastructure—and is striving to assess its ability to cultivate demand in each. The Group is also working to identify key technologies, as well as to discern
technological issues that must be addressed, allowing it to accurately gauge growth and technology development potential and determine which of these markets it will enter.

AQUACEPTER ®
Addressing the need to repair aging tunnels, roads, bridges and other infrastructure elements is an urgent priority. DIC
and the Hanshin Expressway Group recently developed an innovative agent for stopping water ingress that employs
AQUACEPTER ® —a new material developed exclusively by DIC—and are currently conducting field trials on Hanshin
Expressway tunnels. In addition to excellent adhesive strength for sealing leaks, the new agent provides flexibility that
accommodates later concrete structural movement, making it an effective choice for preventing leaks not sealable using
conventional methods. This new low-odor, environment-friendly, water-based agent also improves conditions for workers.
DIC and the Hanshin Expressway Group will continue to promote active development efforts with the aim of helping extend
the life of infrastructure.

Sealing leaks

AQUACEPTER ®

| Global Efforts to Expand Business Domains and Cultivate Next-Generation Businesses
The DIC Group currently encompasses 171 companies in 64 countries and territories. The Group classifies its operations into four regional groupings: Japan, where the corporate
KHDGTXDUWHUVLVORFDWHGWKH35&WKH$VLD±3DFL¿FUHJLRQDQGWKH$PHULFDVDQG(XURSH
Once it has resolved provisionally to enter a new market that offers promise from a global value chain perspective, the DIC Group sets about clarifying necessary technologies, systems andservices, as well as key development themes. Technology and sales departments work together to verify theoretical value and ascertain the appropriate opportunity to enter the market and,bearing in mind the Group’s position in the supply chain, aim to create an optimal business model that will enable it to provide innovative solutions to its customers and build a robust business.
)RFXVLQJSDUWLFXODUO\RQFRUHEXVLQHVVHVWKH',&*URXSLVFXUUHQWO\WDNLQJDFWLYHVWHSVWRUHLQIRUFHDQGH[SDQGLWVSUHVHQFHLQNH\$VLDQPDUNHWVZKLFKDUHH[SHFWHGWRVHHVLJQL¿FDQW
growth going forward, while at the same time broadening its reach to include emerging economies in Eastern Europe, South America and the Middle East. The Group is also seeking to driveIXUWKHUJURZWKE\SURPRWLQJDFWLYH5 'LQLWLDWLYHVVSHDUKHDGHGE\5 'XQLWVDWLWVGRPHVWLFVLWHVLQFROODERUDWLRQZLWK5 'EDVHVLQWKH35&WKH$VLD±3DFL¿FUHJLRQDQGWKH$PHULFDVDQG
Europe (the Sun Chemical Group).

| Enhancing Brand Strength
Established as a manufacturer of printing inks, DIC has expanded its focus, capitalizing on its foundation inorganic pigments and synthetic resins to develop a diverse portfolio of products that leverage its wealth of coretechnologies. Today, the Group supplies products that respond to the needs of customers in a variety of industries,
LQFOXGLQJSULQWLQJDXWRPRELOHPDQXIDFWXULQJDQGHOHFWURQLFV,QOLQHZLWKLWVEUDQGLQJSURJUDPODXQFKHGLQ¿VFDO\HDUWKH*URXSVHHNVWRHQKDQFHLWVEUDQGVWUHQJWKWKURXJKDFWLYHSDUWLFLSDWLRQLQWUDGHVKRZVLQ-DSDQDQGRYHUVHDVWKDWFRQYH\WKHYDOXHLWSURYLGHVDQGWKHUROHLWSOD\V²ZKLFKLQ¿VFDO\HDULQFOXGHGLQWHUSDFN
(Germany), FINETECH JAPAN and Food Safety Japan—and through communication with customers.
DIC Report 2018

129

The DIC Group’s booth at FINETECH JAPAN
LQ¿VFDO\HDU

Basic ThemesCore and CategorySpecific Themes

New Technology Development and Value Creation

Themes that Demonstrate
Unique Capabilities

SDGs Goals 9 and 12

Proposing Solutions that Leverage Elemental Technologies
Goals and Achievements of Major Initiatives Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work
Objectives of initiatives

Goals for fiscal year 2017

Achievements in fiscal year 2017

Evaluation

Goals for fiscal year 2018

・The Solid Compound Technical Center–Asia

Enhance ability to develop
products and technologies
that facilitate contribution to asustainable society.

Promote the development ofenvironment-friendly products
and services.

Pacific, in Malaysia, and the Fine Chemical
Technical Center–Korea were established. The
former oversees solid compound–related R&D
in the Asia–Pacific region, while the latter
focuses on LC-related technologies.
・Groupwide technical collaboration bolsteredachievements in printing inks and polymers,
including the development of water-based
products, in the PRC, which continues to see
a tightening of environmental regulations.
・Active use was made of open innovation andartificial intelligence (AI) to enhance thespeed and efficiency of R&D.

・Promote collaboration among DIC

Group technical departments.
・Enhance global R&D configuration.
・Encourage open innovation.
・Use IT to enhance the efficiency of R&D.

・Promote collaboration among DIC
Group technical departments.

★★

bran oil–based gravure ink and a low-VOC
coating resin for use in coated steel.
・Environment-friendly products accounted
for 56.0% of overall product sales.

development.

・Make use of open innovation and AI
to hasten R&D.

・Newly developed products included a rice

Accelerate efforts to develop low-carbon
and other products that reduce negative
impact on the environment.

・Strengthen global technological★★

Accelerate efforts to develop low-carbon
and other products that reduce negative
impact on the environment.

| Achieving Sustainable Growth
In line with its Color & Comfort brand slogan, the DIC Group is leveraging its basic technologies, including those in the areas of optics andcolor, organic molecular design, polymer design and dispersion, as well as its core technologies in such areas as synthesis, compounding
and formulation, and surface treatment, to develop high-value-added products that contribute to a sustainable society. The Group is alsobuilding 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.

The DIC Group’s Basic and Core Technologies and Target Markets
Packaging

Digital printing
Target markets

Core productsElectronics

Coatings

Optronics materials

Packaging materials
Core
Organic synthesis technologies Polymer synthesis

Crystallization Organic molecular

High-performancecomposites

Automotive

Coloring

designPolymer
designResin curing

Basic

Liquid/liquid dispersion

Optics and Technologies
Adhesion
Dispersion Solid/liquid dispersion
color
Applicability
Surface treatment
Compounding formulationassessment

Liquid inks

（ Coating/printing/） Rheology
molding

Film formation

Molding

Adhesive materials

EnergySensory materials

DIC Report 2018130

Surface protection
materials

Living environments

Infrastructure buildingNew Technology Development and Value Creation

Developing Next-Generation Products with Compounding Technologies and through Open Innovation
Expanded technical domains
Inorganic materials

Next-generation products

Biotechnology
Materials for printed electronics

Adhesive/Bonding

Electronics

Basic technologies
Compounding technologies

Optics and color

Inorganic nanotechnologies

Organic molecular design

Packaging

Polymer design
Dispersion

Open innovation

Applicability assessment

Heat-resistant and heat-dissipating materials

Healthcare(Coating/printing/molding)External resources
Partners

Areas (examples)

Universities/Research institutes

Inorganic chemistry

Startup companies

Life sciences

Companies from different industrial
sectors, device and finished products
manufacturers, etc.

Energy-related

Lowcarbonization

Gas-barrier materials
Next-generation packaging materials
Health foods
Materials for medical devices
Algae-derived oils
Products with a lower environmental impact

IoT, Big Data

| 6SHFLÀF,QLWLDWLYHVDQG$FKLHYHPHQWVThe DIC Group is promoting the development and use of clean technologies. The Company is encouraging a shift toward materials with
reduced environmental impact—notably energy-saving, water-based and solvent-free materials, as well as materials for the electronics,
automotive, packaging and other industries—that improve the environmental performance of the products in which they are used, which it
has positioned as environment-friendly products.
Products for Use in Electronics Equipment
The DIC Group is developing materials that contribute to the reduction of energy consumption by facilitating the downsizing of and the shortening of and
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QW\SH/&PDWHULDOWKDWVSRQWDQHRXVO\DGRSWVKRPHRWURSLFDOLJQPHQWHOLPLQDWLQJWKHQHHGIRUDQDOLJQPHQWOD\HU,QWKHDUHDRIQH[WJHQHUDWLRQGLVSOD\PDWHULDOV',&FRQWLQXHGWRSURPRWHGHYHORSPHQWRILQNVIRUXVHLQWKHSURGXFWLRQRILQNMHWSULQWHG4'&)VIRUGLVSOD\VLQFROODERUDWLRQZLWK1DQRV\VRIWKH
8QLWHG6WDWHV )RUGHWDLOVVHH,QNVIRU8VHLQWKH3URGXFWLRQRI,QNMHW3ULQWHG4'&)VIRU3RZHU(I¿FLHQW'LVSOD\VRQSDJH ,QWKHDUHDRISURGXFWVfor use in electronics materials, the Group developed a naphthalene-based epoxy resin for use in semiconductor packages that has been adopted byfabricators, while in products for printed electronics–related applications the Group commercialized a nanosilver dispersion (particles of silver dispersed in asolution) for metallic foil bonding layers and a polymer adhesive layer material.
Products for Packaging Applications
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a new product made with vegetable oil–derived materials.
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development of a deseaming adhesive for shrink sleeves.
Products for Energy-Related Applications
In the area of battery-related products, the DIC Group launched adhesives for solar battery back sheets in the PRC and India and released
DQHZELQGHUIRUOLWKLXPLRQEDWWHU\ /L% VHSDUDWRUV,QEXLOGLQJPDWHULDOVDQHZVKHHWIRUPSDVVLYHKHDWVWRUDJHPDWHULDOWKDWHIIHFWLYHO\harnesses solar heat to minimize changes in indoor temperatures was adopted for use by a housing company. The Group is also working to
expand applications for this product, including as a heat/cold storage material for the low-temperature transport of pharmaceuticals and otherproducts and in greenhouse agriculture.
DIC Report 2018131

New Technology Development and Value Creation| $*OREDO5 '&RQÀJXUDWLRQWKDW8QGHUSLQV3URGXFW'HYHORSPHQW
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United States, the United Kingdom and Germany; Qingdao DIC Finechemicals, which conducts comprehensive R&D tailored to market needs in the PRC; printing
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Global DIC Group
Technical
services
R&D aimed at
improvingexisting products
R&D aimed atdeveloping
new productsTechnical Management Unit

DIC Graphics Corporation

Technical divisions
Fine Synthesis, Polymer, Adhesives,
Dispersion, Polymer Processing,Coating & Applied Materials

Technology Planning
Department

Sun Chemical GroupIntellectual
Property Center

Qingdao DIC Finechemicals Co., Ltd.

Product Safety &Regulatory Group
Printing inks technical centers

Research aimed atcommercializing
newly developed
products

Analysis Center
Product Innovation Center

Polymer technical centers
Solid compound technical centers

Basic research

R&D Management Unit
Core development
projects

Core Value Research Center
Investigative
research

Advanced Characterization
Research Center

Process Engineering
Research Center

Open Innovation
Promotion Group

Fine Chemical Technical Center‒Korea
Algae research center

etc.

Collaborative research, contracted research,
participation in public research programs, others

Universities and research organizations in Japan and overseas, national projects (Japan)| Promoting Environment-Friendly Products
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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 “environment-friendly” andworks to increase the weighting of products that have earned this designation in their
Evaluation Sheet for Environment-Friendly Products
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Department:
Prepared by:
Prepared on:
products put out by DIC and subsidiary DIC Graphics. The Group also strives to maintain
Product to be Evaluated:
Evaluation
Description
Certifying Standards
a solid grasp of laws and regulations in different countries and territories, and of trends
Item
EnergyReductionofenergyinin environmental measures—thereby ensuring its ability to design products that comply
Consumption
production, transportation, etc.
with diverse regulations governing the use of chemical substances in different markets—
Reduction of use of nonMaterials to
renewable materials, nonbe Usedand conducts environmental assessments on a continuous basis.
recyclable materials, etc.
For printing inks, adhesives and other products used in food packaging, which theHazards
Product with lower toxicity, etc.
Group supplies to customers around the world, the DIC Group has established a global
Amount ofReduction of environmentally
Waste
product stewardship team. The team shares information on regulations and relevant
concerned substances, etc.
Generated
Remarks:
topics from different markets, as well as promotes awareness thereof and provides
Evaluator
education. Knowledge thus gained is incorporated into product design and used to
produce compliance certificates across the supply chain, which are essential for',&LQWURGXFHGLWVV\VWHPIRUGHVLJQDWLQJHQYLURQPHQWIULHQGO\SURGXFWVLQDQGXVHVD
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proprietary evaluation sheet to designate products as “environment-friendly.”customers worldwide.
Average off

Coefficient

Subtotal

Accelerating the Development of Natural Food Colorings through Open Innovation
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PLFURDOJDHIRUXVHLQIRRGSURGXFWVZLWKWKHDLPRIGHYHORSLQJDQHZJHQHUDWLRQRIQDWXUDOIRRGFRORULQJV7KHDUUDQJHPHQW²ZKLFKEULQJVWRJHWKHU)HUPHQWDOJ¶VXQLTXHPLFURDOJDHVWUDLQEDQNDQGELRWHFKQRORJ\SODWIRUPDQG',&¶VVLJQLILFDQW5 'SURZHVVLQGXVWULDOSURGXFWLRQFDSDELOLWLHVDQGJOREDOVDOHVQHWZRUN²LV
expected to accelerate the development of groundbreaking new natural food colorings.
DIC Report 2018132

New Technology Development and Value Creation

Products that Contribute to the Realization of Clean Technologies
The DIC Group develops materials that contribute to the realization of clean technologies designed to resolve critical global environmental issues. Product divisions
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WKHDPRXQWRIPDWHULDOVXVHGE\RXUFXVWRPHUVE\UHGXFLQJWKHWKLFNQHVVDQGVWUHQJWKRIRXUSURGXFWVLQWKH¿HOGVRISODVWLFL]HUVDGKHVLYHVDQGDGKHVLYHWDSHV,QWKHDUHDRIUHF\FOLQJZHDUHGHYHORSLQJDQGODXQFKLQJSURGXFWVWKDWXVHUHF\FOHFRQVFLRXVFRPSRQHQWVDQGSURPRWLQJEXVLQHVVHVWKDWOHDGWRUHF\FOLQJ:KLOH
considering social issues such as marine plastic pollution, we are working to preserve the environment through our business activities and explore business areas inwhich we can contribute.

| Innovation through Compounding%XLOGLQJRQLWVIXQGDPHQWDOSLJPHQWDQGUHVLQGLVSHUVLRQDQGIRUPXODWLQJWHFKQRORJLHVUHDOL]HGWKURXJKWKHSURGXFWLRQRISULQWLQJLQNV',&KDVVXFFHHGHGLQ
combining materials with different properties and performance characteristics to develop groundbreaking products and create new value. Recent achievements in thearea of PPS compounds include the development of a new compound that complies with U.S. FDA standards for packaging that comes into direct contact with foodproducts, sample shipments of which have begun in Europe. The Group also commenced sales of a new high-strength, highly thermoresistant compound for use
in plumbing-related applications, for which it is also promoting application in automotive cooling components. The DIC Group will continue to harness its distinctive
compounding capabilities to transform its diverse technologies into competitive advantages with the aim of driving innovation.

Hard coats
Dispersant
Dispersed
composite

Compounding

Functional
pigments

Functional
compounds

Resin

Adhesives withbarrier properties

Jet inks

PPS
compounds| Protecting Intellectual Property
Recognizing intellectual property as crucial to competitiveness, the DIC Group vows to respect the intellectual property of other companies. At the same time, guided by
an open/closed strategy the Group works to secure intellectual property rights for its own technologies and make use of “black boxing.”
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KLJKSUR¿OHRIWKHSDWHQWVLWKROGV',&ZLOOFRQWLQXHWRDFWLYHO\SURWHFWLWVLQWHOOHFWXDOSURSHUW\SRUWIROLRZLWKWKHDLPRIHQVXULQJVXVWDLQDEOHJURZWKLQWKH\HDUVDKHDG
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VOICE We are promoting the development of next-generation products that stabilize human thermal environments,
thereby reducing energy consumption and enhancing comfort.
In the construction field, promoting far-reaching measures to reduce energy consumption is an urgent challenge. The impact of living environments on
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heat, it helps to maintain comfortable indoor temperatures, reducing energy required for heating and cooling.
   &RQYHQWLRQDO KHDW VWRUDJH PDWHULDOV OLTXHI\ DW D FHUWDLQ WHPSHUDWXUH PDNLQJ WKHLU XVH LQ FRQVWUXFWLRQ SUREOHPDWLF :H OHYHUDJHG SURSULHWDU\technologies to create a material in sheet form that offers superb workability. To encourage widespread adoption of this product, we are currently
SURPRWLQJWKHFUHDWLRQRISHUWLQHQW-DSDQ,QGXVWULDO6WDQGDUGV -,6 DPRQJRWKHUV:HKDYHDOVREHJXQVXEPLWWLQJWKHPDWHULDOIRUXVHLQSURMHFWVWR UHGXFH HQHUJ\ FRQVXPSWLRQ WKDW DUH FXUUHQWO\ EHLQJ VXSSRUWHG E\ WKH 0LQLVWU\ RI /DQG ,QIUDVWUXFWXUH 7UDQVSRUW DQG 7RXULVP DQG WKH 0LQLVWU\of Economy, Trade and Industry. In addition, we are cultivating applications in such areas as agriculture, civil engineering, constant-temperaturetransportation and automobiles, efforts that have begun to yield some very interesting data.
Manager, Coating & Applied Materials Technical Group 3, Coating & Applied Materials Technical Division Kenichi Fujisaki

DIC Report 2018133

Basic ThemesCore and CategorySpecific Themes

Harmony with the Community and Social Contributions

Themes that Demonstrate
Unique Capabilities

SDGs Goals 3 and 4

Adding Color & Comfort to Lifestyles

Basic Approach to Social Contribution
Based on its Guidelines for Social Contribution Activities, established in fiscal year 2009, the DIC Group works to ensureharmony with local communities and individuals through activities aimed at building a strong relationship with society.

The DIC Group’s Guidelines for Social Contribution Activities
In line with its Color & Comfort by Chemistry management vision, the DIC Group will promote social contribution initiatives inthree areas: business activities, culture and education, and communities and society.

Business activities
The DIC Group will offer products and services that contribute to the development of a sustainable society and protection of
the global environment from the viewpoint of “CSR through business activities.”

Culture and education
The DIC Group will engage in activities that will contribute to the development and promotion of culture, the arts, science andeducation, including fostering next-generation human resources in areas such as the culture of color and chemistry.

Communities and society
The DIC Group will strive to coexist harmoniously with local communities to develop a relationship of mutual trust. Moreover, the Group will
provide an environment that enables employees to engage in voluntary contribution activities in their respective local communities.

| Examples of Recent Initiatives
Publication of the Guidebook for the Color Universal Design–Recommended Color Set
The DIC Group is actively involved in R&D in the area of color universal design (CUD), as well as in expanding public awareness and understanding of
CUD’s importance. Under the supervision of the University of Tokyo, the Group, in cooperation with the Japan Paint Manufacturers Association, the Industrial
Research Institute of Ishikawa and the Color Universal Design Organization, created the Color Universal Design–Recommended Color Set and, in 2013,
published the Guidebook for the Color Universal Design–Recommended Color Set. In developing the color set, the organizations capitalized on theirSDUWLFXODUH[SHUWLVHDQGYHUL¿FDWLRQE\VWXG\SDUWLFLSDQWVZLWKYDULRXVW\SHVRIFRORUYLVLRQWRDGMXVWSURSRVHGFRORUVDSURFHVVWKDWIDFLOLWDWHGWKHFUHDWLRQRID
set of colors that are relatively easy to distinguish regardless of ability to see colors and can be reproduced using printing inks, coatings and digital imaging.
In 2015, Chiba University, the Central Research Laboratories and DIC Color Design, Inc., gave presentations on issues to consider in printing warnings
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FRQIHUHQFHV7KHUHVXOWVRIMRLQWUHVHDUFKLQWKHXVHRIFRORULQDQDJLQJVRFLHW\ZHUHSUHVHQWHGDWDPHHWLQJRIWKH&RORU6FLHQFH$VVRFLDWLRQRI-DSDQLQ
June 2017. Two color options were developed (a warm orangey yellow and a cool yellowish green) to give architects and others more choice.
In spring 2018, manufacturers began marketing new tactile paving to assist visually impaired pedestrians developed by DIC in collaboration with the
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harmony with the landscape, the new paving was also designed with studs that do not pose a barrier to wheelchairs and strollers.
,Q$SULO',&SDUWLFLSDWHGLQWKHSURMHFWWRUHYLVHWKH-DSDQ,QGXVWULDO6WDQGDUGV -,6 VWDQGDUGIRUVDIHW\FRORUV -,6= :LWKWKHJRDORIFKRRVLQJFRORUVWKDWFDQEHGLVWLQJXLVKHGE\SHRSOHZLWKGLYHUVHFRORUYLVLRQWKHSURMHFWXVHGWKH¿QGLQJVRIDQH[WHQVLYHVXUYH\WRFRQGXFWDFRPSUHKHQVLYHUHYLHZ
of safety colors from the perspective of CUD. The revised standard for safety colors is expected to increase safety and convenience for visitors to Japan andindividuals with diverse color vision in advance of the Tokyo 2020 Olympic and Paralympic Games.
Looking ahead, DIC will continue to promote a variety of research initiatives that contribute to society and add color to lifestyles.
Yellow red

Yellow

Green

Blue

Red purple

7.5R 4/15

2.5YR 6/14

2.5Y 8/14

10G 4/10

2.5PB 3.5/10

2.5RP 4/12

8.75R 5/12

5YR 6.5/14

7.5Y 8/12

5G 5.5/10

2.5PB 4.5/10

10P 4/10

Beforethe revision

Red

After
the revision

Press conference
introducing the newly
developed tactile
paving

DIC Report 2018134

JIS safety colors (before
and after revision ofstandard)

Harmony with the Community and Social Contributions

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 amongchildren, DIC and DIC Graphics conduct visiting science labs at public elementary
schools. Through this program, the Group seeks to spark children’s interest inscience and encourage them to realize the close relationship between science andtheir everyday lives. Since launching this initiative in 2010, the two companies haveconducted visiting science labs at 35 schools for approximately 2,700 sixth-graders.
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3UL[VSRQVRUHGE\7RN\REDVHG/HDYHD1HVW&R/WG7KH(GXFDWLRQ6XSSRUWGrand Prix is the only awards program in Japan that evaluates and recognizes theeducational initiatives of companies committed to helping children thrive from bothDEXVLQHVVDQGDQHGXFDWLRQDOSHUVSHFWLYH,QH[SODLQLQJLWVGHFLVLRQWKHMXU\FLWHG
measures and systems in place to ensure that the DIC Group’s program—the goalof which is purely to contribute to society—continues regardless of fluctuationsin operating results. Jury members also gave high marks to the program’s useof know-how and technologies unique to the DIC Group, as well as to its clear
positioning as an initiative that enables the Group to contribute through its businessactivities to the success of the SDGs. DIC pledges to continue offering this programin the years ahead.

Visiting science lab',&¶V(GXFDWLRQ6XSSRUW*UDQG3UL[award certificate

Comment

This is a program that is closely linked to children’s everyday lives.
DIC and DIC Graphics began conducting science labs at our school in 2017. In addition to the employee who served as instructor, the lab
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resulting in a science lab that was a truly valuable experience for all participants. In addition to helping children realize that studying scienceis useful in everyday life, the lab aligned with regular curriculum units, meaning that the school’s burden for preparation was minimal. From theperspective of career education, the value of these science labs is enhanced by the fact that they are conducted by a well-known company withclose ties to our community.
Principal, Itabashi Municipal Kami-Itabashi No. 2 Elementary School Yukio Ozawa

Initiatives Led by the Central Research Laboratories
The Central Research Laboratories offer a variety of programs in such uniquely DIC
topics as synthesis and chromatics to the students of local schools. In December 2017,
students from Chiba Prefectural Sakura High School—a Super Science High School*—
were invited to take part in a visiting lab lesson conducted by staff of the Central
Research Laboratories on the themes of “colorant extraction using Spirulina” and“measuring rheologic behavior using mayonnaise and honey.” The young researchers
who serve as lab instructors also incorporated a career education component, taking
time to talk to students about how they became interested in science, their choice ofuniversity and the challenges and rewards of being a researcher.
$GHVLJQDWLRQDZDUGHGE\-DSDQ¶V0LQLVWU\RI(GXFDWLRQ&XOWXUH6SRUWV6FLHQFHDQG7HFKQRORJ\ 0(;7 to senior high schools that implement curricula focused on the sciences and mathematics that goes beyond0(;7’s official guidelines with the aim of fostering the next generation of talented engineers and scientists.

DIC Report 2018

135

Visiting lab lesson

Harmony with the Community and Social Contributions

Kawamura Memorial DIC Museum of Art
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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
December 2017, cumulative visitors to the museum had surpassed 2.4 million. DIC views operation of the museum, which assumed its current namein 2011, as a social contribution initiative that the DIC Group is uniquely positioned to undertake as an organization intrinsically involved in color.
The museum’s extensive collection spans numerous genres, encompassing works by Rembrandt; Impressionists such as Monet and Renoir;
PRGHUQ(XURSHDQDUWLVWVVXFKDV3LFDVVRDQG&KDJDOOHDUO\PRGHUQPRGHUQDQGSRVWZDU-DSDQHVHDUWLVWVDQGOXPLQDULHVRIODWHFHQWXU\American art, including Mark Rothko, Cy Twombly and Frank Stella. In addition to a standing exhibit from its permanent collection of more than 1,000
PDMRUZRUNVWKHPXVHXPVWDJHVVSHFLDOH[KLELWLRQVVHYHUDOWLPHVD\HDUWKDWIRFXVRQSHUWLQHQWOLWHUDU\ZRUNVDQGRWKHUDUWLIDFWVWKDWHYRNHWKH
cultural atmosphere at the time works were created to help visitors better understand the collection. The museum also offers free-of-charge guided
tours every afternoon beginning at 2:00 pm.
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open to the public since the museum’s establishment. A total of 250 cherry trees—10 varieties in total—blossom every spring, while in summerZLOGÀRZHUVRIDOOFRORUVFRYHUWKHVLWH2WKHUKLJKOLJKWVLQFOXGHWKHORWXVSRQGDWWKHEDFNRIWKHJDUGHQZKLFKZDVH[SDQGHGLQDQGWKH
wooded nature trail that traverses the site.
In a move aimed at promoting relations with the local community and fostering local cultural activities, the Kawamura Memorial DIC Museum of
Art has established an annex gallery on the museum site that serves as an exhibition space for local amateur artists and is also made available to
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about art. To date, a total of 150 schools and more than 10,000 children have taken part in the museum’s educational programs, which are offered to
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IRU&RUSRUDWH6XSSRUWIRU$UWVXQGHULWV7KLVLV0(&(1$7SURJUDP

Kawamura Memorial DIC Museum of Art

Museum entrance hallOutdoor terrace

Matching Gift Program
DIC has a matching gift program whereby itmatches the total amount collected through anannual year-end fundraising drive spearheaded
by its employees’ union. Funds raised throughthe 2017 drive and matching gift program were
donated to 22 children’s homes and facilities
providing support for disabled individuals. In
October 2017, the efforts of the team responsible
for this program at the Sakai Plant over many
\HDUVUHFHLYHGDFHUWL¿FDWHRIDSSUHFLDWLRQE\WKH
mayor of Osaka.

DIC employees present a donation to Amagasaki Gakuen,a children’s home in Amagasaki, Hyogo Prefecture

A DIC employee presents a donation to Orion House,
in Sakura, Chiba Prefecture, which provides support
for disabled individuals

Support for Disaster-Hit Areas',&FXUUHQWO\GRQDWHVIXQGVWRDVVLVWUHFRQVWUXFWLRQLQDUHDVGHYDVWDWHGE\WKH$SULO.XPDPRWR(DUWKTXDNHWKRXJKSDUWLFLSDWLRQLQWKH
,332,3321,3321SURMHFWDQLQLWLDWLYHRUJDQL]HGIRUWKLVSXUSRVH(DUWKTXDNHE\.HL]DL'R\XNDL -DSDQ$VVRFLDWLRQRI&RUSRUDWH([HFXWLYHV 

DIC Report 2018136

Basic ThemesCore and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

Communication with Stakeholders
Promoting Disclosure and Communication

Promoting Disclosure and Communication
The DIC Group places a priority on disclosing information to its stakeholders worldwide, as outlined in Article 7 of its Policy on
Corporate Governance.

Article 7 (Ensuring Appropriate Information Disclosure and Transparency)
The Company shall ensure transparency and fairness; and in order to gain the correct understanding and trustfrom 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.
Guided by this policy, the DIC Group promotes communication with stakeholders through television advertisements,
participation in exhibitions, websites and events. By communicating effectively with stakeholders, the Group strives to ensure
an adequate understanding of stakeholder expectations and to reflect such expectations in its business activities. The Group isalso expanding its awareness of the concept of stakeholder engagement, a key requirement under ISO 26000.

Basic approach

Ties with customers

Ties with shareholders
and investors

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

Ties with society

Ties with employees

Ties with the media

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

Operate in harmony with thecommunity and build positive
relationships with local
residents that will underpin
the long-term sustainability ofoperations.

Provide workplaces that are
conducive to job satisfactionand enable all employees
to fulfill their potential. Overthe long term, 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● Product pamphlets● Corporate profile DVDs
● DIC Report● Corporate PR film
● News releases● Television advertisements● Websites● Press conferences● Quarterly results● Websites● Site reports● &RUSRUDWHSUR¿OH'9'V● DIC Report● News releases● Television advertisements● DIC Plaza● Press conferences● Interviews with journalists● DIC Report● News releases● Television advertisements● Sales activities● Participation in● General shareholders’● Production facility tours● Participation in projects involving● Labor–management councils● Results presentations

Communications tools

Opportunities forcommunication

exhibitions

announcements●Yuka Shoken Hokokusho(¿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● DIC Report● News releases● Television advertisements

meetings● Results presentations● IR conferences● IR meetings● DIC IR Day

collaboration among industrial
concerns, government bodies andacademic institutions● Participation in community events● Environmental monitoring

DIC Report 2018137

(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

for employees● Presentations on the DIC
Group Code ofBusiness Conduct● Sustainability presentations● Newspapers● Economic publications● Industry publications

Communication with Stakeholders| Ties with Customers
Guided by the basic policy of its medium-term management plan, which emphasizes the focused allocation of management resources in
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valuable opportunities for the Group to communicate with its customers. In Japan, the Group participated in the Tokyo Health Industry ShowKHOGLQ0DUFKZKHUHLWH[KLELWHG6SLUXOLQDZKLFKFRQWLQXHVWRDWWUDFWDWWHQWLRQDVDVXSHUIRRG,Q$SULOWKH*URXSWRRNSDUWLQ
FINETECH JAPAN, where it showed TFT LCs, highly thermoconductive insulating adhesive sheets and other products that leverage stateof-the-art technologies. At the JPCA Show—organized by the Japan Electronics Packaging and Circuits Association—in June, the Groupexhibited nanosilver dispersions, ultrathin adhesive polymer materials and other products that leverage cutting-edge DIC technologies.
2YHUVHDVWKH*URXSWRRNSDUWLQ&+,1$3/$6ZKLFKWDUJHWVWKHUXEEHUSODVWLFVDXWRPRELOHPDQXIDFWXULQJHOHFWURQLFVDQGRWKHULQGXVWULHV,QDGGLWLRQWRJLYLQJDSUHVHQWDWLRQRQWUHQGVLQFRORUVDQGPDWHULDOVIURPDQ$VLDQSHUVSHFWLYHGXULQJ6HRXO'HVLJQ:HHN
the Group participated in trade shows in various locations around the world for a broad range of industries. The Group also held a private
show to introduce initiatives and propose solutions to which it invited customers, trading company representatives and brand owners, among others.
,Q1RYHPEHUWKH*URXSLQYLWHGFXVWRPHUVWRDQH[KLELWLRQRIKLVWRULFDOHGLWLRQVRIWKH$VLD&RORU7UHQG%RRNDQGZRUNVIURPWKH
Kawamura Memorial DIC Museum of Art at DIC corporate headquarters in Tokyo. The goal of this exhibition, which was held in the newly
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global website, enhancing usability across multiple devices and reinforcing information on individual products.

Some of the Trade Shows in which Sun Chemical
Participated in 2017

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3$&.(;32 8QLWHG6WDWHV,Q3ULQW *HUPDQ\
Aquatech Amsterdam (Netherlands)&+,1$3/$6

LQWHU3DFN *HUPDQ\| Ties with Shareholders and Investors
The DIC Group has established a policy for promoting constructive dialogue with shareholders
and strives to ensure fair, appropriate and timely disclosure and to communicate closely withshareholders and investors, as well as to raise awareness of its ESG initiatives. Views and concerns
expressed are shared with management and incorporated into operations as appropriate.
,Q¿VFDO\HDUWKH*URXSVRXJKWWRHQKDQFHFRPPXQLFDWLRQZLWKWKHLQYHVWPHQWFRPPXQLW\in Japan by holding two results presentations for institutional investors and securities analysts, aswell as by participating in investor relations (IR) conferences organized by securities companies
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of the business it expects to drive growth going forward. Overseas, the Group held IR meetings andparticipated in IR conferences organized by securities companies in North America, Europe and Asia
to encourage familiarity with its business strategies. Active efforts to advance communication withRYHUVHDVLQYHVWRUVDOVRLQFOXGHGRQHRQRQHPHHWLQJVFRQGXFWHGLQSHUVRQRUE\WHOHSKRQH
To provide information to individual investors, the Group participated in an IR fair in Japan
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understanding of its business activities and ESG initiatives. The Group also continued to actively
provide information for individual investors via the DIC global website, as well as throughconventional mass media.
One-on-one meetings conducted inperson or by telephone

Individuals attending IR fairand company presentations

178

800

President and CEO Kaoru Ino speaks to analysts at DIC’s
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',&,5'D\ 'HFHPEHU

DIC Report 2018138

Communication with Stakeholders| Ties with Society
In addition to the business community, the DIC Group takes steps to enhance communications with ordinary consumers, including students.
,Q¿VFDO\HDUWKH*URXSGHSOR\HGWKHDIC Color Guide® Event Pack, developed to encourage solo branding initiatives by employees, atsites across Japan.
,Q6HSWHPEHUWKH*URXSFUHDWHGDGLVSOD\LQWURGXFLQJ',&DWWKH,WDEDVKL3XEOLF/LEUDU\LQ7RN\RWKHWKLUGFRQVHFXWLYH\HDULWKDV
done so. The display focused on the Group’s efforts to develop environment-friendly products, one of its core sustainability initiatives, as wellas on its social contribution efforts, including its visiting science lab program and the Kawamura Memorial DIC Museum of Art.
',&¶VFDOHQGDUIRUZDVKRQRUHGZLWKDVLOYHUDZDUGLQWKHFRUSRUDWHFDOHQGDUVFDWHJRU\RIWKHWK$OO-DSDQ&DOHQGDU&RPSHWLWLRQsponsored by the Japan Federation of Printing Industries and Japan Printing News Co., Ltd. This annual event recognizes the best calendarsSURGXFHGE\JHQHUDOIRUSUR¿WRUJDQL]DWLRQVDVZHOODVSXEOLVKHUVDQGSULQWLQJFRPSDQLHVDPRQJRWKHUVLQWHUPVRISULQWLQJWHFKQRORJ\planning, design, functionality and creativity. DIC will continue working to plan, design and produce innovative original calendars that appeal
to stakeholders.
$WWKH.DZDPXUD0HPRULDO',&0XVHXPRI$UWDYLROLQFRQFHUWFHQWHUHGRQZRUNVE\%DFKZDVKHOGFRQFXUUHQWO\ZLWKWKHH[KLELWLRQ³:2/6
)URPWKH6WUHHWWRWKH&RVPRV´3DLQWHUDQGSKRWRJUDSKHU:ROV ²$OIUHG2WWR:ROIJDQJ6FKXO]H²LVVDLGWRKDYHORYHG%DFKDQGSRHWU\,Q¿VFDO\HDU',&GHFODUHGDQHZEUDQGVORJDQ³&RORU &RPIRUW´DQGODXQFKHGDQDPELWLRXVEUDQGLQJSURJUDPWKDWLQFOXGHGD
EUDQGDGYHUWLVHPHQWIRUWHOHYLVLRQ,Q¿VFDO\HDUWKH&RPSDQ\NLFNHGRIIWKHVHFRQGLQVWDOOPHQWRIWKLVDGYHUWLVHPHQWIrodori no Uta³3RHPRI&RORUV´ 7KH',&JOREDOZHEVLWH¶VGHGLFDWHGEUDQGLQJSDJHLQWURGXFHVWKLVDQGRWKHUEUDQGLQJLQLWLDWLYHVDVZHOODVDFRUSRUDWH
35¿OP7KH',&JOREDOZHEVLWHUDQNHGLQ-DSDQ¶V&65&RPPXQLFDWLRQV$VVRFLDWLRQ¶VUDQNLQJRIFRUSRUDWHZHEVLWHVEDVHGRQWKH
TXDOLW\RIWKHLU&65UHODWHGFRQWHQWFRQGXFWHGIURP2FWREHUWKURXJK'HFHPEHUDIWHU¿QLVKLQJRXWVLGHWKHUDQNLQJVLQWKHSUHYLRXV\HDU

DIC’s display at Tokyo’s Itabashi Public LibraryAward certificate fromthe All Japan Calendar&RPSHWLWLRQ

| Communication in the Field of Education,Q-XO\WKH&HQWUDO5HVHDUFK/DERUDWRULHVVSRQVRUHGDERRWKDWWKHWK&KLED6FLHQFH6FKRRO)HVWLYDOKHOGDWWKH7VXGDFDPSXVRIWKH
&KLED,QVWLWXWHRI7HFKQRORJ\7KLVHYHQWZKLFKLVVSRQVRUHGE\WKH&KLED6FLHQFH6FKRRO1HWVHHNVWRVXSSRUWWKHVFLHQWL¿FUHVHDUFKHIIRUWV
of high school students, as well as encourage elementary and junior high school students to take a greater interest in science. The Central
5HVHDUFK/DERUDWRULHV¶ERRWKLQWKHIHVWLYDOWKHWKHPHRIZKLFKZDV³7KH0\VWHULHVRI&RORU´RIIHUHGVWXGHQWVWKHFKDQFHWRFRQGXFW
experiments in the extraction of the natural blue colorant in Spirulina.
,Q$XJXVWIRUWKHVHFRQGFRQVHFXWLYH\HDUWKH',&*URXSKRVWHGWKH&KLED3UHIHFWXUDO'UHDP&KDOOHQJH+DQGV2Q6FKRRODSURJUDP
for elementary school–age children organized by the prefecture’s Board of Education, at the Central Research Laboratories’ convention
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experiments in the extraction of colorants from Spirulina and paper chromatography using aqueous felt-tipped pens under the instruction of,respectively, Mizuki Endo (Advanced Characterization Research Center) and Mari Shibata(Dispersion Technical Group 6). Participating children gave the experience top marks, with
FRPPHQWVUHFHLYHGLQFOXGLQJ³,OHDUQHGWKDW',&LVDPDQXIDFWXUHURIFKHPLFDOVDQGWKDWZHVHHPDQ\RILWVSURGXFWVLQHYHU\GD\OLIH´³,OHDUQHGWKDWSHRSOHVHHDQGLQWHUSUHWFRORUVLQGLIIHUHQWZD\V´DQG³,HQMR\HGWKHH[SHULPHQWZKHUHZHJRWWRVHHFRORUVFKDQJLQJ´
Companies with operations in Chiba collaborate in multiple ways with the Chiba Prefectural
Dream Challenge Hands-On School program, which invites parents and children to visit
corporate and university laboratories and other facilities in the prefecture to participate inexperiments and tour facilities.
7th Chiba Science School Festival

DIC Report 2018139

Communication with Stakeholders| Ties with Employees
7KH',&*URXSSURPRWHVDYDULHW\RILQLWLDWLYHVWRIDFLOLWDWHDFWLYHFRPPXQLFDWLRQZLWKLWVHPSOR\HHVDURXQGWKHZRUOG,Q$SULOWKH
*URXSFRQGXFWHGDQHPSOR\HHDZDUHQHVVVXUYH\LQ-DSDQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQ,Q)HEUXDU\WKH*URXS¶VLQKRXVH
newsletter, DIC PlazaZKLFKLVSXEOLVKHGLQ-DSDQHVHDQG(QJOLVKSURGXFHGDVSHFLDOHGLWLRQWRFHOHEUDWHWKH*URXS¶VWKDQQLYHUVDU\
As well as introducing Group operations and colleagues from around the world, DIC Plaza—which is produced with the goal of enhancing inhouse communication—features comments from a wide range of stakeholders.
,Q0DUFKDIC PlazaZRQDQRYHUDOODZDUGIRUVHDVRQDOSXEOLFDWLRQVLQWKH)LVFDO<HDU.HLGDQUHQ,Q+RXVH1HZVOHWWHU$ZDUGVDIC Plaza received above-average scores for all judging criteria. In particular, high marks were given for planning and content, which aligns
with management policies, the introduction of activities involving a variety of employees in Japan and overseas to highlight themes such as
diversity and sustainability, and the showcasing of Kaizen and other steadfast production initiatives, as well as for attractive page layout.
The Group’s intranet is another way for DIC to share information with employees worldwide and further understanding of its activities. In¿VFDO\HDUDWRWDORILWHPVZHUHSRVWHGRQWKHLQWUDQHW
Senior management also promotes opportunities for direct communication with employees. These include quarterly results presentations
IRUHPSOR\HHVJLYHQE\WKHSUHVLGHQWDQG&(2H[HFXWLYHYLFHSUHVLGHQWDQGH[HFXWLYHRI¿FHUVLQFKDUJHRILQGLYLGXDOEXVLQHVVHVWKHJRDORIZKLFKLVWRHQKDQFHXQGHUVWDQGLQJRIWKH*URXS¶VPDQDJHPHQWVWUDWHJLHVDQGWKH*URXS¶VFXUUHQWRSHUDWLQJDQG¿QDQFLDOVWDWXV,Q0DUFKWKH.DVKLPD3ODQWRUJDQL]HGDIDFLOLW\WRXUIRUHPSOR\HHV¶IDPLOLHVDFRPSRQHQWRIWKHSODQW¶VWKDQQLYHUVDU\FHOHEUDWLRQV3ODQQHGDVSDUWRI',&¶VRQJRLQJEUDQGLQJSURJUDPWKHHYHQWZDVKHOGDVD¿UVWSUDFWLFDOVWHSWRZDUGDFKLHYLQJWKHSODQW¶VJRDOZKLFKLVWR
create a production site worthy of showcasing to the world, by enabling employees to show their families the plant where they work. A total ofIDPLO\PHPEHUVSDUWLFLSDWHGLQWKHWRXUZKLFKLQFOXGHGOXQFKDWWKHHPSOR\HHFDIHWHULDDQGDYLVLWWRWKHSURGXFWLRQÀRRU

Executive Vice President Masayuki Saito gives a results
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DIC Plaza

Facility tour for families of employees (Kashima Plant)| Ties with the MediaDIC is reinforcing efforts to provide information with newspapers, magazines and othermedia as a means of enhancing its ability to communicate with its many stakeholders, who
LQFOXGHLWVFXVWRPHUVDQGVKDUHKROGHUVLQYHVWRUVDQGORFDOFRPPXQLWLHV7KLVUHÀHFWVDconviction that effective, independent publicity and advertising that facilitates objective
media coverage is vital to securing stakeholders’ understanding of the DIC Group and its
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key subjects, including new products, capital investments, operating results, sustainability
initiatives and personnel systems. Increased media coverage brought positive responses
from stakeholders across the board.

DIC Report 2018

140

Press conferences
held inÀVFDO\HDU

Interviews withjournalists
LQÀVFDO\HDU

85

94

Communication with Stakeholders| External Assessments,QILVFDO\HDU',&ZDVVHOHFWHGIRULQFOXVLRQLQWKH'RZ-RQHV6XVWDLQDELOLW\,QGLFHV$VLD3DFLILF,QGH[DOHDGLQJEHQFKPDUNIRUVXVWDLQDELOLW\LQLWLDWLYHVLQWKH$VLD±3DFL¿FUHJLRQDQGSDUWRIWKH'RZ-RQHV6XVWDLQDELOLW\,QGLFHV '-6, DJOREDOIDPLO\RILQGLFHVIRUVRFLDOO\
responsible investment (SRI). This was the third consecutive year DIC has been selected for inclusion.
DIC also reports to the CDP, which works on behalf of institutional investors to motivate companies to disclose information on initiatives
WRFRPEDWFOLPDWHFKDQJHDQGNH\HQYLURQPHQWDOGDWD,Q¿VFDO\HDUWKH&RPSDQ\UHFHLYHGKLJKPDUNVIRULWVHIIRUWVWRUHGXFHLWV
greenhouse gas emissions and its disclosure, earning an overall score of A-, second only to the top score of A, for the second consecutive
year. Also in the period under review, the Company was selected as a constituent of the MSCI Japan ESG Select Leaders Index, an ESG
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based MSCI Inc. Both MSCI indices have been selected as benchmarks for the ESG investment strategy of Japan’s Government Pension
Investment Fund (GPIF), which sought stock indices comprising companies with outstanding ESG performances.
ProNed Inc., which advises companies on ensuring effective corporate governance, ranked DIC’s corporate governance program as Score
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WKH81*&¶V65,(6*6'*V6XSSO\&KDLQ+XPDQ5LJKWV'XH'LOLJHQFHDQG'LVDVWHU5LVN5HGXFWLRQZRUNLQJJURXSVDIC Report 2018141

DIC Report 2018 and the GRI Standards',&5HSRUWZDVSUHSDUHGLQFRPSOLDQFHZLWKWKH*5,6WDQGDUGV¶³&RUH´RSWLRQStandard

DisclosuresPage(s), etc.

Related information / Reasons for omission

G4 standard

ISO 26000

GRI 102:

General disclosures 2016

1

2UJDQL]DWLRQDOSURÀOH

102-1

Name or organization

102-2

11–12 (The DIC Group’s Approach to Value Creation), 13–14 (Printing Inks), 15–
Activities, brands, products, and services 16 (Fine Chemicals), 17–18 (Polymers), 19–20 (Compounds), 21–22 (Application
Materials), 130–133 (New Technology Development and Value Creation)

102-3

Location of headquarters

3 (The DIC Group: A Global Powerhouse)

G4-5

ʋ

102-4

Location of operations

3–4 (The DIC Group: A Global Powerhouse), 158 (Corporate Data)

G4-6

ʋ

102-5

Ownership and legal form

3 (The DIC Group: A Global Powerhouse)

G4-7

ʋ

G4-3

3 (The DIC Group: A Global Powerhouse)ʋʋ

3–4 (The DIC Group: A Global Powerhouse), 11–12 (The DIC Group’s Approach
to Value Creation), 13–14 (Printing Inks), 15–16 (Fine Chemicals), 17–18
G4-8(Polymers), 19–20 (Compounds), 21–22 (Application Materials), 130–133 (NewTechnology Development and Value Creation)
3–4 The DIC Group: A Global Powerhouse, 158 (Corporate Data), 6–9 of the 13 –14 (Printing Inks), 15 –16 (Fine Chemicals), 17–18
G4-9
Yuka Shoken Hokokusho ³$I¿OLDWHG&RPSDQLHV´(Polymers), 19–20 (Compounds), 21–22 (Application Materials)

102-6

Location of operations

102-7

Scale of the organization

102-8

Information on employees and other115 (Global Human Resources Management)
workers

10 of the Yuka Shoken Hokokusho ³(PSOR\HHV´

102-9

Supply chain

125–127 (Sustainable Procurement) Disclosure of supplier
G4-12
SUR¿OHVLVFXUUHQWO\EHLQJFRRUGLQDWHG

102-106LJQLÀFDQWFKDQJHVWRWKHRUJDQL]DWLRQ
No major changes
and its supply chain

G4-13

ʋ

102-11

Precautionary principle or approach

50–57 (Risk Management), 60–65 (Promoting Responsible Care)

G4-14

6.2

102-12External initiatives

44–45 (Ensuring DIC Remains a Globally Trusted Corporate Citizen with a
92 (Reporting to the CDP)
Proud Reputation), 60 (Promoting Responsible Care)

G4-15

6.2

102-13

Membership of associations

UNGC, JCIA, Keidanren, Keizai Doyukai, Japan Printing Inks Makers Association

G4-16

6.2

2

Strategy102-14

Statement from senior decision-maker102-15Key impacts, risks, and opportunities

3

Ethics and integrity

102-16102-17

Values, principles, standards, andnorms of behavior
Mechanisms for advice and concern
about ethics

6.2
6.2

1 (The DIC WAY), 48 (The DIC Group Code of Business Conduct)

G4-56

ʋ

49 (Establishing and Operating a Whistle-Blowing System)

G4-57,
G4-58

ʋ

G4-34

6.2

G4-35

ʋ

G4-36

ʋ

G4-38

6.2

41–42 (Directors, Corporate Auditors and Executive Officers),
G4-39
36–39 of the Yuka Shoken Hokokusho ³&RUSRUDWH*RYHUQDQFH´

6.2

43–47 (Overview of Materiality and Sustainability, 50–57 (Risk Management)

102-18Governance structure

36 (Corporate Governance), 44 (System for Promoting Sustainability Initiatives)102-19Delegating authority

44 (System for Promoting Sustainability Initiatives)

102-23102-24102-25102-26102-29102-30102-31
102-32102-33

± 'LUHFWRUV&RUSRUDWH$XGLWRUVDQG([HFXWLYH2I¿FHUV

Executive-level responsibility for economic,
44 (System for Promoting Sustainability Initiatives)
environmental, and social topics
Composition of the highest governance ± 'LUHFWRUV&RUSRUDWH$XGLWRUVDQG([HFXWLYH2I¿FHUV ± &RUSRUDWH
body and its committees
Governance), 36–41 of the Yuka Shoken Hokokusho ³&RUSRUDWH*RYHUQDQFH´Chair of the highest governing body

7KHFKDLURIWKHKLJKHVWJRYHUQLQJERG\LVWKHFKDLURIWKH%RDUGRI'LUHFWRUVNominating and selecting the highest 36–40 (Corporate Governance), 36–41 of the Yuka Shoken Hokokusho
governance body³&RUSRUDWH*RYHUQDQFH´
3 6 – 40 (Corporate G over nanc e), Yuka Shoken Hokokusho (“ Major&RQÁLFWVRILQWHUHVW
6KDUHKROGHUV´
Role of highest governance body in
44 (System for Promoting Sustainability Initiatives)setting purpose, values, and strategy
Identifying and managing economic,
43–47 (Overview of Materiality and Sustainability), 50–57 (Risk Management)
environmental, and social impacts
Effectiveness of risk management
44 (System for Promoting Sustainability Initiatives, 50–57 Risk Management)
processes
Review of economic, environmental, and 50–57 (Risk Management) (Reviews are conducted three times annually under
44 (System for Promoting Sustainability Initiatives)social topics
WKHIUDPHZRUNVKRZQRQSDJH 
Highest governance body’s role in The Sustainability Committee formally reviews and approves the sustainability
44 (System for Promoting Sustainability Initiatives)
sustainability reportingUHSRUW
Communicating critical concerns

102-35

Remuneration policies

102-36

Process for determining remuneration

102-38Annual total compensation ratio

6.4
6.4.3

G4-1

Governance102-22ʋ

13–14 (Printing Inks), 15–16 (Fine Chemicals), 17–18 (Polymers),
G4-2
19–20 (Compounds), 21–22 (Application Materials)

6–8 (A Message from the President)

4102-20G4-10

ʋ

44 (System for Promoting Sustainability Initiatives), 50–57 Risk Management)
40 (Remuneration for Executives), 36–41 of the Yuka Shoken Hokokusho³&RUSRUDWH*RYHUQDQFH´
40 (Remuneration for Executives), 116 (Securing and Fostering Human
116 (Integrating DIC Group Executive Evaluation Systems)
Resources)
10 of the Yuka Shoken Hokokusho ³(PSOR\HHV´

DIC Report 2018

142

G4-40

6.2

G4-41

6.2

G4-42

ʋ

G4-45

6.2

G4-46

ʋ

G4-47

6.2

G4-48

ʋ

G4-49

6.2

G4-51

6.2

G4-52

ʋ

G4-54

ʋ

5

Stakeholder engagement102-40

List of stakeholder groups

137 (Communication with Stakeholders)

102-41

Collective bargaining agreements-DSDQRIHPSOR\HHVEHORQJWRDODERUXQLRQ

102-42

Identifying and selecting stakeholders

137–141 (Communication with Stakeholders)

102-43

Approach to stakeholder engagement102-44

Key topics and concerns raised

6

Reporting practice102-45G4-24
Overseas: Coverage by collective bargaining agreements in
G4-11
each country/region complies with local laws and regulations

137–141 (Communication with Stakeholders)

137–141 (Communication with Stakeholders)

Entities included in the consolidated
3 (The DIC Group: A Global Powerhouse), 158 (Corporate Data)ÀQDQFLDOVWDWHPHQWVDefining report content and topic
43–47 (Overview of Materiality and Sustainability)
boundaries

6.2
6.3.10
6.4
6.4.3
6.4.4
6.4.5

G4-25

6.2

G4-26,
G4-PR5

6.2
6.7
6.7.4
6.7.5
6.7.6
6.7.8
6.7.9

G4-27,
G4-PR5

6.2

G4-17

6.2

G4-18

ʋ

102-47

List of material topics

46 (Materiality Analysis)

G4-19

ʋ

102-48

Restatements of information

NA

G4-22

ʋ

102-49Changes in reporting

NA

G4-23

ʋ

102-50

Reporting period

2 (About this Report)

G4-28

ʋ

102-51

Date of most recent report

2 (About this Report)

G4-29

ʋ

102-52

Reporting cycle

2 (About this Report)

G4-30

ʋ

G4-31

ʋ

G4-32-aʋ

102-46102-53102-54

Contact point for questions regarding
Back cover
the report
Claims of reporting in accordance with
2 (About this Report)
the GRI standards

102-55

GRI content index(142–146) DIC Report 2018 and the GRI Standards (this table)

G4-32-b

102-56External assurance

 3URPRWLQJ5HVSRQVLEOH&DUH  7KLUG3DUW\9HUL¿FDWLRQ

G4-32-c,
G4-33

103

Management approach

GRI 102:

General disclosures 2016

103-1

Explanation of the material topic and its
46 (Materiality Analysis)boundary

103-2

103-3

7.5.3

G4-DMA-a,
ʋ
G4-20,
G4-21

DIC’s 22 general materiality issues• Promotion of products and services that contribute to environmental
protection, Contribution to the realization of a low-carbon society,Contribution to colorful and comfortable lifestyles
128–129 (Business Models that Respond to Social Imperatives),
130–133 (New Technology Development and Value Creation)• Provision of solutions, Innovation through compounding, Efforts tostrengthen global technology development capabilities, Creation of
next-generation businesses, Promotion of open innovation
130–133 (New Technology Development and Value Creation)• Harmony with and contribution to society, Enhancement of brandstrength/reputation (evaluation)
129 (Enhancing Brand Strength), 134–136 (Harmony with the Community andSocial Contributions), 137–141 (Communication with Stakeholders)
The management approach and its
Practical application of measures to reduce environmental impact,
components
Contribution to the realization of a low-carbon society, Promotion ofoccupational health
60–108 (Environment, Safety and Health (ESH))• Improvement of quality management capabilities
109–111 (Quality)• Ability to foster and strengthen global human resources, Promotion ofdiversity, Efforts to address needs engendered by an aging society andfalling birth rates
112–124 (Human Resources Management)• Respect for human rights, Promotion of supply chain management
112–124 (Human Resources Management), 125 –127 (Sustainable
Procurement)• Response to economic globalization/efforts to reinforce governance,
Response to the growth of digital businesses
48–49 (Compliance), 50–57 (Risk Management), 58–59 (Information Security)
As above, assessment results are indicated on various pages; 44 (System for
Evaluation of the management approach
Promoting Sustainability Initiatives)

G4-DMA-b,
G4-EN34,
ʋ
G4-LA16,
G4-HR12,
G4-SO11

G4-DMA-c

200

Economic topics

GRI 201:

Economic performance 2016

201-1

Direct economic value generated and
3–4 (The DIC Group: A Global Powerhouse)
distributed

G4-EC1

6.8
6.8.3
6.8.7
6.8.9

201-3

Defined benefit plan obligations and
75 of the Yuka Shoken Hokokusho
other retirement plans

G4-EC3ʋ

DIC Report 2018

143

GRI 202:

Market presence 2016

202-1

Ratios of standard entry level wage by
gender compared to local minimum wage

GRI 203:

Indirect economic impacts 201610 of the Yuka Shoken Hokokusho

203-1

Infrastructure investments and services
134 (Harmony with the Community and Social Contributions)
supported

203-2

6LJQLÀFDQWLQGLUHFWHFRQRPLFLPSDFWVGRI 205:

Anti-corruption 2016

205-1

Operations assessed for risks related tocorruption

205-2
205-3

134–136 (Harmony with the Community and Social Contributions)

G4-EC5Global corporate website (Home page > Sustainability >G4-EC7
Harmony with the Community and Social Contributions)Global corporate website (Home page > Sustainability >G4-EC8Harmony with the Community and Social Contributions)

48–49 (Compliance), Risks related to corruption at sites
not assessed, but legal training provided in countries and G4-SO3
territories where such risks are highCommunication and training about anti48–49 (Compliance)
corruption policies and procedures
Confirmed incidents of corruption and
NA , 48 (Goals and Achievements of Major Initiatives)
actions taken

125–127 (Sustainable Procurement)

G4-SO4G4-SO5

GRI 206:

Anti-competitive behavior 2016

206-1

Legal actions for anti-competitive behavior,anti-trust, and monopoly practices

300

Environmental topics

GRI 301:

Materials 2016

301-1

Materials used by weight or volume

GRI 302:

Energy 2016

302-1

Energy consumption within theorganization

75–92 (Preventing Global Warming), 100 (Environmental Impact of the DIC
Group’s Operating Activities) (All electric power generated independently using
UHQHZDEOHHQHUJ\LVFRQVXPHGLQWHUQDOO\

302-2

Energy consumption outside theorganization

—

302-3

Energy intensity

75–92 (Preventing Global Warming), 100 (Environmental Impact of the DIC
Group’s Operating Activities)

302-4

Reduction of energy consumption

75–92 (Preventing Global Warming)

302-5

Reductions in energy requirements ofproducts and services—

GRI 303:

Water 2016

303-1

Water withdrawal by source

303-2:DWHUVRXUFHVVLJQLÀFDQWO\DIIHFWHGE\withdrawal of water

GRI 305:

Emissions 2016

305-1

Direct (Scope 1) GHG emissions

305-2

Energy indirect (Scope 2) GHG
emissionsNA, 48 (Goals and Achievements of Major Initiatives)—'LVFORVXUHLVFXUUHQWO\EHLQJFRRUGLQDWHG

Disclosure by type of energy and by boundary is currently
being coordinated

128–129 (Business Models that Respond to Social Imperatives),
130–133 (New Technology Development and Value Creation)

9 4 – 9 5 (M anaging Water Resourc es), 10 0 (Environment al Impac tof the DI C G roup’s O perating Ac tivities)
94 (Managing Water Resources)

75–92 (Preventing Global Warming)'LVFORVXUHLVFXUUHQWO\EHLQJFRRUGLQDWHG

6.4.4
6.8
6.3.9
6.8
6.8.3
6.8.4
6.8.5
6.8.6
6.8.7
6.8.9
6.3.9
6.6.6
6.6.7
6.7.8
6.8
6.8.5
6.8.6
6.8.7
6.8.9

6.6
6.6.3
6.6
6.6.3
6.6
6.6.3

G4-SO7

6.6
6.6.5
6.6.7

G4-EN1

6.5.4

G4-EN3

6.5.4

G4-EN46.5.4

G4-EN5

6.5.4

G4-EN6
G4-EN7

6.5.4
6.5.5
6.5.4
6.5.5

G4-EN8

6.5.4

G4-EN96.5.4

G4-EN15

6.5.5

G4-EN16

6.5.5

G4-EN17

6.5.5

305-3

Other indirect (Scope 3) GHG emissions

79 (Changes in CO2 Emissions in the Supply Chain), 106–107 (Responsible
Logistics)

305-4

GHG emissions intensity

75–92 (Preventing Global Warming)

G4-EN18

6.5.5

305-5

Reduction of GHG emissions

75–92 (Preventing Global Warming)

G4-EN19

6.5.5

108 (Report on Other Initiatives)

G4-EN20

6.5.3
6.5.5

93–94 (Reducing Discharge of Chemical Substances), 96 (Reducing SOx, NOx
and COD)

G4-EN21

6.5.3

G4-EN22

6.5.3
6.5.4

G4-EN23

6.5.3

305-6
305-7

Emissions of ozone-depleting
substances (ODS)
Nitrogen oxide (NOx), sulfur oxide
62[ DQGRWKHUVLJQLÀFDQWDLUHPLVVLRQVGRI 306:(IÁXHQWVDQGZDVWH

306-1

Water discharge by quality and destination

306-2

Waste by type and disposal method

306-3

6LJQL¿FDQWVSLOOV

NA

G4-EN24

6.5.3

306-4

Transport of hazardous waste

NA

G4-EN25

6.5.3

306-5

Water bodies affected by water discharges—
and/or runoff

G4-EN26

6.5.3
6.5.4
6.5.6

GRI 307:

Environmental compliance 2016

307-1

Non-compliance with environmental
66 (ESH Auditing)laws and regulations

G4-EN29

4.6

93–94 (Reducing Discharge of Chemical Substances), 100 (Environmental
Impact of the DIC Group’s Operating Activities)
97–100 (Reducing Industrial Waste), 100 (Environmental Impact of the DIC
Group’s Operating Activities)

94 (Managing Water Resources)

DIC Report 2018

144

GRI 308:

Supplier environmental assessment 2016308-1

New suppliers that were screened using
environmental criteria

308-2

Negative environmental impacts in the
125–127 (Sustainable Procurement)
supply chain and actions taken

400

Social topics

GRI 401:

Employment 2016

401-1
401-2
401-3

125 –127 (Sustainable Procurement) Disclosure
G4-EN32FXUUHQWO\EHLQJFRRUGLQDWHG

G4-EN33

New employee hires and employee
115 (Basic Personnel Statistics)
118 (Promoting Diversity)
turnover%HQHÀWVSURYLGHGWRIXOOWLPHHPSOR\HHV
that are not provided to temporary or 112 (Human Resources Management)
part-time employees
121 (Enhancing Programs that Help Employees Balance the Demands of Work
Parental leaveand Home)

GRI 402:

Labor/management relations 2016

402-1

Minimum notice periods regarding$PLQLPXPQRWLFHSHULRGLVSURYLGHGDVVSHFL¿HGLQODERUDJUHHPHQWVoperational changes

GRI 403:

Occupational health and safety 2016403-2

Types of injury and rates of injury,
occupational diseases, lost days, and70 (Status of Occupational Accidents)
absenteeism, and number of workrelated fatalities

403-4

Health and safety topics covered in+HDOWKDQGVDIHW\WRSLFVDUHFRYHUHGLQIRUPDODJUHHPHQWVZLWKWUDGHXQLRQV
formal agreements with trade unions

GRI 404:

Training and education 2016

404-2

404-3

Diversity and equal opportunity 2016

405-1

41– 42 (Directors, Corporate Auditors and Executive Officers),
Diversity of governance bodies and
115 (Global Human Resources Management), 120 (Advancing theemployees
Employment of Individuals with Disabilities)

GRI 406:

Non-discrimination 2016406-1

Incidents of discrimination and correctiveNA
actions taken

GRI 407:

Freedom of association and collective bargaining 2016

407-1

Operations and suppliers in which theright to freedom of association and 112 (Human Resources Management)collective bargaining may be at risk

GRI 408:

Child labor 216

408-1

2SHUDWLRQVDQGVXSSOLHUVDWVLJQLÀFDQW
112 (Human Resources Management)risk for incidents of child labor

GRI 409:

Forced or compulsory labor 2016

409-1

2SHUDWLRQVDQGVXSSOLHUVDWVLJQLÀFDQW
r i s k f o r i n c i d e n t s o f f o r c e d o r 112 (Human Resources Management)
compulsory labor

GRI 410:

Security practices 2016

410-1

Security personnel trained in humanrights policies or procedures

GRI 411:

Rights of indigenous peoples

411-1

Incidents of violations involving rights
NAof indigenous peoples

145

G4-LA36.4
6.4.3
6.4.4, 6.4.5

G4-LA66.4
6.4.6

123 (Reducing Extreme Overwork and Encouraging
G4-LA8
Employees to Take Annual Paid Leave)

6.4
6.4.6

G4-LA10

6.4
6.4.7
6.8.5

G4-LA116.4
6.4.7

G4-LA126.3.7, 6.3.10
6.4
6.4.3

G4-HR3

6.3
6.3.6
6.3.7
6.3.10, 6.4.3

44 (Ensuring DIC Remains a Globally Trusted Corporate
Citizen with a Proud Reputation),
G4-HR4125 (Sustainable Procurement)

6.3
6.3.3
6.3.4
6.3.5
6.3.8
6.3.10
6.4.3
6.4.5

G4-HR5

6.3
6.3.3
6.3.4
6.3.5
6.3.7
6.3.10125 (Sustainable Procurement)

G4-HR6

6.3
6.3.3
6.3.4
6.3.5
6.3.7
6.3.10112 (Human Resources Management)

G4-HR7

6.3
6.3.5
6.4.3
6.6.6

G4-HR8

6.3
6.3.6
6.3.7
6.3.8
6.6.7

125 (Sustainable Procurement)

DIC Report 2018

G4-LA2

6.4
6.4.3
6.4
6.4.3
6.4.4
6.4
6.4.3

G4-LA460 –74 (Environment, Safety and Health (ESH)), 81 (Reducing Energy
Programs for upgrading employee skills Consumption and Enhancing Product Quality through Kaizen Skill Improvement
and transition assistance programs
Training), 110 (New Efforts to Enhance Product Quality–Related Educational
Initiatives), 112–124 (Human Resources Management)
Percentage of employees receiving 116 (Ensuring Fair and Consistent Treatment) All DIC employees, regardless of
115 (Global Human Resources Management),r e g u l a r p e r f o r m a n c e a n d c a r e e r gender, job or rank, receive performance and career development reviews twice
116 (Securing and Fostering Human Resources)development reviews
DQQXDOO\GRI 405:

G4-LA1

6.3.5
6.6.6
7.3.1
6.3.5
6.6.6
7.3.1

GRI 412:

Human rights assessment 2016

412-1

Operations that have been subject to human
112 (Human Resources Management)rights reviews or impact assessments

412-2

Employee training on human rights
policies or procedures

GRI 413:

Local communities 2016413-1

Operations with local community
engagement, impact assessments, anddevelopment programs

GRI 414:

Supplier social assessment 2016414-1

New suppliers that were screened usingsocial criteria

125–127 (Sustainable Procurement); Disclosure is currently G4-LA14,
G4-HR10,EHLQJFRRUGLQDWHG
G4-SO9414-2

Negative social impacts in the supply
125–127 (Sustainable Procurement)
chain and actions taken

Disclosure regarding negative social impacts in the supply chain G4-LA15,
G4-HR11,
LVFXUUHQWO\EHLQJFRRUGLQDWHG
G4-SO10

GRI 415:

Public policy 2016

415-1

Political contributions

GRI 416:

Customer health and safety 2016

416-1

Assessment of the health and safety
impacts of product and service categories

60 (Focus on Product Stewardship), 109 (Quality)

G4-PR1416-2

Incidents of non-compliance concerning
the health and safety impacts of 7KHUHZHUHQRLQFLGHQWVUHVXOWLQJLQ¿QHVRUSHQDOWLHV
products and services

111 (Preventing the Recurrence of Problems)

G4-PR2

GRI 417:

Marketing and labeling 2016

G4-HR9112 (Human Resources Management)

137 (Communication with Stakeholders)

G4-HR2

G4-SO1

6.3
6.3.3
6.3.4
6.3.5
6.3
6.3.5
6.3.9
6.6.7
6.8
6.8.5
6.8.7

ʋ

G4-SO6―417-1

Requirements for product and service
101–105 (Managing Chemical Substances in Products)
information and labeling

417-2

Incidents of non-compliance concerning
product and service information and NAlabeling

G4-PR4417-3

Incidents of non-compliance concerningNAmarketing communications

G4-PR7

GRI 418:

Customer privacy 2016

418-1

Substantial complaints concerning
breaches of customer privacy and NA
losses of customer data

GRI 419:

Socioeconomic compliance 2016

419-1

Non-compliance with laws and regulations
NAin the social and economic area

DIC Report 2018146

110 (Initiatives Aimed at Increasing Customer Satisfaction) G4-PR3

6.3.9
6.6.6
6.7
6.7.4
6.7.5
6.3.9
6.6.6
6.7
6.7.4
6.7.5
6.7
6.7.3
6.7.4
6.7.5
6.7.6
6.7.9
6.7
6.7.3
6.7.4
6.7.5
6.7.6
6.7.9
6.7
6.7.3
6.7.6
6.7.9

G4-PR86.7
6.7.7

G4-SO8,G4-PR9

6.6
6.6.3
6.6.7
6.8.7

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 2018147

Third-Party Opinion Regarding DIC Report 2018

Counselor,
The Japan Research Institute, Limited

Eiichiro Adachi
In his current capacity, Eiichiro Adachi
conducts industry research andassesses corporate per formance fromthe perspective of social responsibility.
He also provides financial institutions
with corporate information for socially
responsible investing (SRI). A member ofthe Market Evolution and Corporations in
the 21st Century working group organizedby the Keizai Doyukai (Japan Associationof Corporate Executives), Mr. Adachi
was involved in the preparation of The
15th Corporate White Paper on “Market
Evolution” and CSR Management:
Toward Building Integrity and Creating
Shareholder Value. From March 2005 to
May 2009, he also served as a national
expert for Japan to the ISO 26000 working
group. Mr. Adachi is also known as theauthor of Environmental Management: A
Beginner’s Guide and An Illustrated Guide
to Environmental Issues for Companies(published in Japanese).

This third-party opinion reflects my view ofthe sustainability initiatives and information
disclosure of the DIC Group, as understoodfrom reading this report, from my perspective
as an individual who provides corporate
information to financial institutions to assist
SRI. It is not intended as a comment onwhether or not the information herein has
been measured and calculated accurately toconform to commonly accepted standards
for the preparation of environmental or otherreports or a judgment on whether the reportcovers relevant important matters in full.

Once again this year, I had the honor of reviewing the DIC Report. In thisyear’s report, I was particularly impressed with president and CEO Kaoru Ino’s
comment that the DIC Group would endeavor to address increasingly varied andcompelling social imperatives and contribute to the realization of a sustainable
society. He explained that in order to do so the Group would cultivate new
businesses, in addition to printing inks, pigments and compounds, in which it
has the potential to earn global market-leading positions.
A true blue-chip organization, the DIC Group boasts leading global market
shares in a number of areas, including approximately 30% for printing inks,
20% for organic pigments and 27% for PPS compounds. It is also a chemicals
manufacturer that uses petroleum-derived raw materials in many of its products
and has energy-intensive production processes. With the capacity of our planetand society increasingly strained, we are seeing changes in the nature of efforts
to shift to more environment-friendly energy sources and promote material
recycling under the banner of “sustainability.” Going forward, the Group’s
cogency in aligning its corporate values—which emphasize making life colorful,drawing on its expertise and comprehensive strengths to offer solutions, andbringing innovation to society through its core compounding technologies—
to such changes while continuing to give full play to its capabilities will comeunder scrutiny.
The effectiveness of the DIC Group’s efforts to combat climate change anddisclose related information is underscored by the high marks it has received in
the CDP’s climate change assessment program, with the global NGO awarding
it a leadership-level score of A- for two consecutive years. I look forward toseeing the Group further enhance its sustainability efforts with the need toensure sustainability for the planet and society.
One item that particularly caught my attention in this year’s report was Sun
Chemical’s participation in the Responsible Mica Initiative. In 2018, the DIC
Group formulated a draft human rights policy, but it is important to understandthat effective human rights due diligence does not end with the creation ofa policy. For example, it is crucial to take steps to prevent the use of childlabor across the supply chain and to implement remedial measures if issues
are discovered. The fact that the natural minerals used as raw materials forpigments are a key source of funds for armed groups has long been noted, as
has the fact that the inappropriate disposal of electric and electronic equipment
is a cause of severe health issues in developing countries. It is my hope that
the Group will make use of the OECD Due Diligence Guide for Responsible
Business Conduct, published in May 2018, and other such references to step
up its efforts to identify and mitigate human rights–related risks and evaluate its
performance.
The Message from the President at the beginning of this year’s reportcontains the following statement: “…in fiscal year 2018, we are promoting
extensive debate and discussion to determine critical changes needed to fulfill
our mission, based on which we will formulate strategies from a medium- tolong-term perspective.” In next year’s report, I look forward to reading aboutincorporation of both the processes employed in such debate and discussion
and the results thereof into initiatives implemented in line with the themes of“business models that respond to social imperatives” and “new technology
development and value creation.”

DIC Report 2018148

110 Years of Achievement

DIC Group Milestones

1908
Established as

1925

1957

Begins production of organic pigments

Enters the market for helmets andother molded plastic products

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

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
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
DIC’s founder, Kijuro Kawamura

Commences sales of the
DIC Color Guide ®

Reichhold Chemicals’
San Francisco plant

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

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.

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

1990

1995

Declares intention to uphold theprinciples of Responsible Care

Becomes signatory to the
Responsible Care Global Charter

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

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.

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

Opens Kawamura
Memorial Museum of Art

1973

Establishes theEnvironment and Safety
Response Department

Actively introduces technologies
from overseas and promotes
further diversification

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.

2006

Certiﬁcation of DIC as signatory to
the Responsible Care Global Charter

Sustainability Initiatives

Promotes expansion of
printing inks business

DIC Color Guide ®

DIC Report 2018

149

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.

2015

Completes
reconstruction of
corporate
headquarters in
Nihonbashi
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

Launches DIC108 medium-term
management plan

Nematic LCs

Sets forth a growth scenario aimed at realizing sustainable growthand outlines what DIC must do between now and fiscal year 2018.

1986

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

2016

Introduces branding program

2009

Establishes DIC Graphics Corporation
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.

Sun Chemical’s headquarters

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.

Brand advertisement for television

2010
1999

Succeeds in developing 100% soybean
oil–based printing ink
Amid rising awareness of environmental issues, develops
Japan’s first organic solvent-free sheetfed offset ink.

Seeks to advance globalization ofcore businesses and diversify into new areas

Develops groundbreaking series ofgreen pigments for LCD color filters
Develops the G58 series of green pigments for use in color filters for
LCDs, which deliver marked increases in brightness and contrast
compared with previous products and contribute substantially to
reduced energy consumption by LCDs.

2017

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

Takes steps to advance environmental
protection and expands global presence

Prepares for a new phaseof growth

2010

2014

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.”

Changes designation to“sustainability”

In-house poster promoting sustainability initiatives

Joins United Nations
Global Compact

2007

Launches CSR program
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.

DIC Report 2018

150

2015

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.
Included again in 2016.

Corporate Data
Headquarters/Branches in Japan
Corporate Headquarters
Headquarters
DIC Building, 7-20, Nihonbashi 3-chome, Chuo-ku,
Tokyo 103-8233, Japan
Tel: +81-3-6733-3000

Chiba

Saitama

12, Yawatakaigandori, Ichihara, Chiba 290-8585, Japan
Tel: +81-436-41-4141 Fax: +81-436-43-1059

4472-1, Komuro, Ina-machi, Kita-Adachi-gun, Saitama
362-8577, Japan
Tel: +81-48-722-8211 Fax: +81-48-722-6087

Hokuriku
64-2, Minatomachi-So, Hakusan, Ishikawa 929-0296, Japan
Tel: +81-76-278-2332 Fax: +81-76-278-5354

Branch Ofﬁces

Sakai

Osaka

3, Takasago 1-chome, Takaishi, Osaka 592-0001, Japan
Tel: +81-72-268-3111 Fax: +81-72-268-1705

5-19, Kyutaro-machi 3-chome, Chuo-ku, Osaka 541-8525, Japan
Tel: +81-6-6252-6161 Fax: +81-6-6245-5239

Nagoya7-15, Nishiki 3-chome, Naka-ku, Nagoya 460-0003, Japan
Tel: +81-52-951-9381 Fax: +81-52-962-3591

Tatebayashi
6023, Tobukogyodanchi, Ohshima-cho,Tatebayashi, Gunma 374-0001, Japan
Tel: +81-276-77-2461 Fax: +81-276-77-2468

Laboratories

Kashima18, Higashifukashiba, Kamisu, Ibaraki 314-0193, Japan
Tel: +81-299-93-8111 Fax: +81-299-92-6384

Yokkaichi

Central Research Laboratories
631, Sakado, Sakura, Chiba 285-8668, Japan
Tel: +81-43-498-2121 Fax: +81-43-498-2229

Plants5, Kasumi 1-chome, Yokkaichi, Mie 510-0011, Japan
Tel: +81-59-364-1151 Fax: +81-59-364-1620

Art Museum

Tokyo

KomakiKawamura Memorial DIC Museum of Art

35-58, Sakashita 3-chome, Itabashi-ku, Tokyo 174-8520, Japan
Tel: +81-3-3966-2111 Fax: +81-3-3965-4320

151-1, Nagare, Shimosue, Komaki, Aichi 485-0825, Japan
Tel: +81-568-75-2751 Fax: +81-568-73-4120

631, Sakado, Sakura, Chiba 285-8505, Japan
Tel: +81-43-498-2672 Fax: +81-43-498-2139(Information is as of March 31, 2018.)

Principal Subsidiaries and Affiliates■ Japan
Cast Film Japan Co., Ltd.
DC Katsuya Co., Ltd.
DIC Color Coatings, Inc.
DIC Color Design, Inc.
DIC Covestro Polymer Ltd.
DIC Decor, Inc.
DIC EP Corp.
DIC Estate Co., Ltd.
DIC Graphics Corporation
DIC Interior Co., Ltd.
DIC Investments Japan, LLC.
DIC Kako, Inc.
DIC Kitanihon Polymer Co., Ltd.
DIC Kyushu Polymer Co., Ltd.
DIC Lifetec Co., Ltd.
DIC Machinery & Printer s Supplies, Inc.
DIC Material Inc.
DIC Plastics, Inc.
Hamamatsu DIC Co., Ltd.
Japan Formalin Company, Inc.
KJ Chemicals Corporation
Mizushima Kasozai Co., Ltd.
Nippon Epoxy Resin ManufacturingCo., Ltd.
Oxirane Chemical Corp.
Renaissance, Inc.
Seiko PMC Corporation
SUNDIC Inc.
Taiyo Holdings Co., Ltd.
Techno Science, Inc.
Topic Co., Ltd.
YD Plastics Co., Ltd.

■ Asia and Oceania (Excluding Japan)
Aekyung Chemical Co., Ltd.
Changzhou Huari New Material Co., Ltd.
DIC Alkylphenol Singapore Pte., Ltd.
DIC Asia Paciﬁc Pte Ltd
DIC Australia Pty Ltd.
DIC (China) Co., Ltd.
DIC Colorants Taiwan Co., Ltd.
DIC Compounds (Malaysia) Sdn. Bhd.
DIC Epoxy (Malaysia) Sdn. Bhd.
DIC Fine Chemicals Private Limited
DIC Graphics (Guangzhou) Ltd.
DIC Graphics (Hong Kong) Ltd.
DIC Graphics (Thailand) Co., Ltd.
DIC Graphics Chia Lung Corp.
DIC (Guangzhou) Co., Ltd.
DIC India Ltd.
DIC Korea Corp.
DIC Lanka (Private) Ltd.
DIC (Malaysia) Sdn. Bhd.
DIC New Zealand Ltd.
DIC Pakistan Ltd.
DIC Philippines, Inc.
DIC (Shanghai) Co., Ltd.
DIC Synthetic Resins (Zhongshan) Co., Ltd.
DIC (Taiwan) Ltd.
DIC Trading (HK) Ltd.
DIC (Vietnam) Co., Ltd.
DIC Zhangjiagang Chemicals Co., Ltd.

Guangzhou Lidye Resin Co., Ltd.
Hainan DIC Microalgae Co., Ltd.
Kangnam Chemical Co., Ltd.
Lianyungang DIC Color Co., Ltd.
Lidye Chemical Co., Ltd.
Nantong DIC Color Co., Ltd.
Nantong Shan Kai Ming Ke Trading Co., Ltd
PT DIC ASTRA Chemicals
PT. DIC Graphics
P.T. Pardic Jaya Chemicals
Qingdao DIC Finechemicals Co., Ltd.
Qingdao DIC Liquid Crystal Co., Ltd.
Samling Housing Products Sdn. Bhd.
Seiko PMC (Shanghai) Commerce &Trading Corp.
Seiko PMC (Zhangjiagang) Corporation
Shanghai DIC Ink Co., Ltd.
Shanghai DIC Pressure-Sensitive
Adhesive Materials Co., Ltd.
Shenzhen-DIC Co., Ltd.
Siam Chemical Industry Co., Ltd.
Sun Branding Solutions (India) Pvt. Ltd.
Sun Chemical Holding (Hong Kong) Ltd.
Sun Chemical Ink LLP
Sun Chemical Saudi Arabia Ltd.
Sun Chemical Trading (Shanghai) Co., Ltd.
Suqian Lintong New Materials Co., Ltd.
Suzhou Lintong Chemical Science Corp.
TOA-DIC Zhangjiagang Chemical Co., Ltd.
Total Acrylic Polymer Industry Corp.
Zhongshan DIC Colour Co., Ltd.

■ Europe and Africa
Benda-Lutz Skawina Sp. z.o.o.
Benda-Lutz Volzhsky ooo
Benda-Lutz Werke GmbH
Coates Brothers (East Africa) Ltd.
Coates Brothers (West Africa) Ltd.
Coates Screen Inks GmbH.
C.T. LAY S.R.L.
DIC Europe GmbHDIC Holdings Austria GmbHDIC Holdings B.V.
DIC Performance Resins GmbHECG Holdings Ltd.
Gibbon FineCal Ltd.
Glenside Properties Limited
Gwent Electronic Materials Ltd.
Hartman D.O.O.
Hartmann Druckfarben GmbH
Hartmann-Sun Chemical EOOD
Kingfisher Colours Ltd.
Lorilleux Maroc S.A.
Luminescence Holdings Ltd.
Parker Williams Design Ltd.
Sun Branding Solutions Ltd.
Sun Chemical AB
Sun Chemical AG
Sun Chemical AG (S.A., Ltd.)Sun Chemical A.O
Sun Chemical A/SSun Chemical A/SSun Chemical B.V.
Sun Chemical d.o.o.

DIC Report 2018

151

Sun Chemical for Graphic Arts S.A.E.
Sun Chemical GmbHSun Chemical Group Coöperatief U.A.
Sun Chemical Group S.p.A.
Sun Chemical Holding B.V.
Sun Chemical Ink Ireland
Sun Chemical Inks A/S
Sun Chemical Lasfelde GmbHSun Chemical Ltd.
Sun Chemical N.V./S.A.
Sun Chemical Nyomdafestek Kereskedelmi
es Gyatro KFT
Sun Chemical Osterode Druckfarben GmbHSun Chemical Oy
Sun Chemical Pigments S.L.
Sun Chemical Portugal-Tintas Graﬁcas
Unipessoal Ltda.
Sun Chemical Printing Ink d.o.o.
Sun Chemical Publication A.E.
Sun Chemical S.A.S.
Sun Chemical S.A.U.
Sun Chemical (South Africa) (Pty) Ltd.
Sun Chemical s.r.l.
Sun Chemical, s.r.o.
Sun Chemical, s.r.o.
Sun Chemical Sp. z.o.o.
Sun Chemical Turkey
Sun Chemical Ukraine Ltd.
Sun Inkjet Ceramics, S.L.

■ North, Central and South America
Benda-Lutz Corporation
Camus Water Technologies LLC
Coates Brothers (Caribbean) Ltd.
DIC Imaging Products USA, LLC
Earthrise Holdings Inc.
Earthrise Nutritionals, LLC
Inmobiliaria Sunchem, S.A. de C.V.
Joules Angstrom U.V. Printing Inks Corp.
Mondis Manufacturers Insurance
Company N.V.
New England Manufacturers Insurance
Corp.
Rycoline Products, LLC
SC (Puerto Rico) Ink
SC Funding LLC
Sinclair International Inc.
Sinclair S.A.S.
Sinclair Sun Chemical Ecuador S.A.
Sun Chemical (Chile) S.A.
Sun Chemical Corporation
Sun Chemical de Centro America, S.A. de C.V.
Sun Chemical do Brasil Ltda.
Sun Chemical Inks S.A.
Sun Chemical Ltd.
Sun Chemical Management, L.L.C.
Sun Chemical of Michigan LLC
Sun Chemical Peru S.A.
Sun Chemical S.A. de C.V.
Tintas S.A.S.
Wiseman International Co., Ltd.

(Information is as of March 31, 2018.)

DIC Report 2018
Financial Section

Year ended December 31, 2017

O ne of the world’s leading diversified chemicals companies, DIC Corporation is also the core of the DIC Group, a multinationalorganization with operations in more than 60 countries and territories worldwide. Established in 1908 as a manufacturer of printing
inks, DIC has capitalized on its extensive technologies, know-how and experience in the years since to build a broad business portfolioof materials and finished products, enabling it to provide innovative solutions to customers in diverse industries and transforming it
into a global powerhouse in its key fields of endeavor.
Now in its second century in business, DIC is redoubling its efforts to develop and market innovative, high-performance productsthat respond to the needs of customers in markets around the world, in line with its “Color & Comfort by Chemistry” vision.
A responsible corporate citizen, DIC is also committed to helping realize environmental and social sustainability.

The DIC WAY• Mission
Through constant innovation, the DIC Group strives to create enhanced value and tocontribute to sustainable development for its customers and society.

• Vision
Color & Comfort by Chemistry• Spirit
Drive
The force that propels our employees to think and take action
Integrity
Maintaining a moral attitude, and facing mattershead-on with reason and a sense of responsibility
Dedication
Having a sense of ownership and ambition, and taking
a passionate approach to the tasks at hand
Collaboration
Working to resolve matters by rallying the collective powerof the global DIC Group, while respecting the individuality and diversity of each and every one of our employees
Harmony
Fulfilling our social responsibility as good corporate citizens, and always remaining conscious of compliance issues

Contents

Consolidated Six-Year Summary 1
Management’s Discussion and Analysis 2
Consolidated Balance Sheet 5
Consolidated Statement of Income 7
Consolidated Statement of Comprehensive Income 8
Consolidated Statement of Changes in Net Assets 9
Consolidated Statement of Cash Flows 10
Notes to the Consolidated Financial Statements 11
Management’s Report on Internal Control 40
Independent Auditor’s Report 41
Investor Information and Corporate Data 43

1Consolidated Six-Year Summary
DIC Corporation and Consolidated Subsidiaries
Years ended December 31, 2017 to 2013, and year ended March 31, 2013

Dec. 2017

Dec. 2016

Dec. 2015

Millions of yen,
except for per share information
Dec. 2014
Dec. 2013
Mar. 2013

Net sales
Percent increase (decrease)(Note 4)
Operating income
Net income attributable toowners of the parent¥789,427¥751,438¥819,999¥830,078

Equity (Note 3)
Total assets

5.1%(8.4)%(1.2)%¥705,647—%

Thousands of
U.S. dollars,
except for per
share information(Note 8)Dec. 2017$6,986,080¥703,781—%

5.1%(4.2)%

56,48354,18251,06841,07640,181

38,484

499,850

38,60334,76737,39425,194

26,771

19,064

341,619

315,129
831,756

278,535
764,828

262,467
778,857

249,749
803,703

195,218
761,690

136,921692,991

2,788,752
7,360,673

Equity per share (Notes 1, 5 and 7) ¥3,329.60
Earnings per share (basic)
407.56(Notes 2, 5 and 7)
Cash dividends per share
120.00applicable to the period (Note 6)¥2,938.12¥2,768.41¥ 259.63¥ 213.13¥ 149.48

366.72389.40

26.78

29.23

20.80

3.61

64.00

8.00

6.00

6.00

6.00

1.06

36.4%
12.9%

33.7%
14.6%

31.1%
11.3%

25.6%
16.1%

19.8%
16.0%

37.9%
13.0%

37.9%
13.0%

Equity ratio to total assets
ROE (return on equity)

20,628

Number of employees

20,481

20,264

20,411

20,034$29.47

20,62820,273

Notes: 1. The computation of equity per share has been based on the number of shares issued as of the balance sheet date.
2. The computation of earnings per share has been based on the weighted-average number of shares issued during each fiscal year.
3. Equity comprises “Total shareholders’ equity” and “Total accumulated other comprehensive income.”
4. In order to align the fiscal year-end with that of its consolidated subsidiaries overseas, effective from fiscal year 2013, DIC Corporation changed its fiscal year-end fromMarch 31 to December 31. As a result, the fiscal year ended December 31, 2013, was a transitional irregular nine-month period, comprising the nine months from
April to December for DIC Corporation and its subsidiaries whose fiscal year-end was previously March 31 and the 12 months from January to December for its subsidiaries whose fiscal year-end is December 31. Therefore, the percent increases (decreases) for the fiscal years ended December 31, 2013 and 2014, are not given.
5. The Company implemented a consolidation of shares of common stock by a factor of 10 to 1 with July 1, 2016, as the effective date. Earnings per share (basic) and equity
per share are calculated respectively based on the assumption that the consolidation had been implemented at the beginning of the fiscal year ended December 31, 2015.
6. The Company implemented a consolidation of shares of common stock by a factor of 10 to 1 with July 1, 2016, as the effective date. Cash dividends per share applicable to theperiod for the fiscal year ended December 31, 2016, comprises interim dividends of ¥4.00 (before the consolidation) and year-end dividends of ¥60.00 (after the consolidation).
If the consolidation had been taken into consideration, cash dividends per share applicable to the period for the fiscal year ended December 31, 2016, would be ¥100.00.
7. From the fiscal year ended December 31, 2017, the Company introduced the Board Benefit Trust (BBT). The shares held by the trust are recorded under net assets
as treasury shares. The number of treasury shares excluded from the number of shares issued as of the balance sheet date used for the calculation of equity pershare includes the number of shares held by the trust. The number of treasury shares excluded from the weighted-average number of shares issued during the
fiscal year used for the calculation of earnings per share includes the number of shares held by the trust.
8. Yen amounts have been translated, for readers’ convenience only, at the rate of ¥113 to US$1, the approximate rate of exchange at December 31, 2017.
Net Sales(Billions of yen)
1,000.0

ROE(Billions of yen)

(%)

75.0

830.1 820.0
800.0Operating Income

751.4

705.6

20.0

16.1

789.4
60.0

51.1
40.2

54.2

56.5

41.1

600.0

45.0

400.0

30.0

8.0

200.0

15.0

4.0

0.0

Dec.
2013

Dec.
2014

Dec.
2015

Dec.
2016

Dec.
2017

Net Income Attributable to Owners of the Parent(Billions of yen)
50.0

37.4

26.8

38.6
34.8

Dec.
2013

Dec.
2014

12.0

Dec.
2015

Dec.
2016

(%)
End of 2nd quarter
Year-end

30

Dec.
2014

Dec.
2015

Dec.
2016

Dec.
2017

0

Dec.
2015

Dec.
2016

Dec.
2017

40.0

60

20.5

40
30

30

30

30

Dec.
2013

Dec.
2014

27.3

30.0

60

10.0

13.0

50.0

120

60

Dec.
2013

Dec.
2014

Dividend Payout Ratio

20.0

0.0

Dec.
2013

(Yen)

90

25.2

0.0

Dec.
2017

12.9
11.3

Cash Dividends per Share
150

40.0

30.0

0.0

14.6

16.0

22.4

29.4

20.5

20.0

40

40

Dec.
2015

Dec.
2016

60

Dec.
2017

* These figures have been adjusted to account for the impactof a consolidation of shares of common stock by a factor of
10 to 1 with July 1, 2016, as the effective date.

10.0

0.0

Dec.
2013

Dec.
2014

Dec.
2015

Dec.
2016

Dec.
2017

2

Management’s Discussion and Analysis

This document presents consolidated results for fiscal year 2017, comprising the accounts for the year ended December 31, 2017, of DIC and its domestic and overseas subsidiaries.

OperatingResults

While economic conditions worldwide recovered gradually in fiscal year 2017, ended December 31, 2017,
economic uncertainty, fluctuations in the financial and capital markets and the direction of oil prices, among
others, continued to warrant caution. Moderate recovery persisted in the economies of North America andEurope. A revival was seen in Asia. Japan’s economy also continued to rally steadily.
In this environment, consolidated net sales increased 5.1%, to ¥789.4 billion, reflecting multiple factors,
including firm shipments. Operating income advanced 4.2%, to ¥56.5 billion, as increased sales of high-valueadded products and the progress of cost reductions offset the impact of rising raw materials prices, among
others. Ordinary income rose 2.1%, to ¥57.0 billion, with contributing factors including higher operating income and an improved financial position. Net income attributable to owners of the parent climbed 11.0%, to¥38.6 billion, owing to a decrease in extraordinary loss and other factors.

Net sales
Operating income
Ordinary income
Net income attributable to owners of the parent

Average exchange rate (¥/US$)

Segment
Results

FY2017

Billions of yen
FY2016

Change (%)

Change calculated inlocal currency (%)¥789.4
56.5
57.0
38.6

¥751.4
54.2
55.8
34.8

5.1%
4.2
2.1
11.0

3.5%
3.9
—
—

FY2017

Yen
FY2016¥112.33¥109.96

Segment results in key markets are as follows. Year-on-year percentage changes excluding the impact of foreign currency fluctuations are presented as “change calculated in local currency.” Interregional transactions
within the Printing Inks segment are included. Accordingly, the aggregates of regional net sales and operating
income figures for the Printing Inks segment differ from the figures presented in the Notes to the Consolidated
Financial Statements.

Printing Inks
Japan
Sales of packaging inks benefited from firm shipments. Nonetheless, overall sales in Japan decreased, reflecting factors such as diminished demand for publishing inks and news inks. Operating income fell sharply, owing
to the aforementioned sales results and other factors.
The Americas and Europe
Although demand for publishing inks and news inks waned, sales in North America were flat, with causes including higher shipments of packaging inks. In Europe, sales edged up, as firm shipments of publishing inks andpackaging inks countered falling demand for news inks. Sales in Central and South America rose, buoyed byrobust shipments of packaging inks. As a result, overall sales in the Americas and Europe increased. Operating
income advanced, bolstered by the aforementioned sales results and rationalization measures, among others.

3Management’s Discussion and Analysis

Asia and Oceania
While shipments of packaging inks were solid, sales in the People’s Republic of China (PRC) decreased, hindered by factors such as flagging demand for publishing inks and news inks. In Southeast Asia, sales were
pushed up by higher shipments of publishing inks and packaging inks. Sales in Oceania fell, with causes including fading demand for news inks. Sales in India increased, bolstered by brisk shipments of publishing inks andpackaging inks. For these and other reasons, overall sales in Asia and Oceania rose. Operating income declined,
regardless of the aforementioned sales results, a consequence of rising raw materials prices and other factors.

Japan
The Americas and Europe
Asia and Oceania

Billions of yen
FY2017

Change (%)

Change calculated inlocal currency (%)¥ 77.1
3.9
241.1
9.5
64.8
4.0

(3.3)%(22.5)
3.6
12.9
5.3(17.2)

—%
—
1.4
16.5
2.2
(19.8)Net sales
Operating income
Net sales
Operating income
Net sales
Operating income

Fine Chemicals
Sales of pigments were down, despite a steep increase in shipments of functional pigments, including those forcolor filters, owing to flagging demand for other pigments. Sales of thin-film transistor liquid crystals (TFT LCs)rose substantially, reflecting favorable shipments. These factors supported higher segment sales. Segment operating income was up significantly, underpinned by an improved product mix, among others.
Billions of yen
FY2017

Change (%)

Change calculated inlocal currency (%)¥135.4
17.4

5.7%
20.3

3.5%
18.3

Net sales
Operating income

Polymers
Sales in Japan rose, bolstered by increased shipments of high-value-added products, polystyrene and otherproducts. Sales overseas were up sharply, thanks to generally firm shipments. For these and other reasons, segment sales advanced. Notwithstanding the impact of rising raw materials prices, segment operating income
was flat. Factors behind this result included the aforementioned sales results.
Billions of yen
FY2017

Change (%)

Change calculated inlocal currency (%)¥197.9
19.6

9.4%
(0.2)

8.4%
(0.7)

Net sales
Operating income

Compounds
Healthy shipments pushed up sales of polyphenylene sulfide (PPS) compounds. Steadily expanding shipments
bolstered sales of jet inks. Owing to these and other factors, segment sales rose. Segment operating income
remained level. Reasons behind this result included the aforementioned sales results, which offset increases in
raw materials prices and costs associated with advance investments.

Net sales
Operating income

Billions of yen
FY2017

Change (%)

Change calculated inlocal currency (%)

¥64.7
5.0

5.8%
0.3

4.8%
0.9

4

Management’s Discussion and Analysis

Application Materials
Segment sales increased, with contributing factors including higher shipments of industrial adhesive tapes andhollow-fiber membrane modules. Segment operating income rose substantially, spurred by an improved product mix and efforts to reduce costs, among others.

Net sales
Operating income

Analysis ofCash Flows

Billions of yen
FY2017

Change (%)

Change calculated inlocal currency (%)

¥56.1
2.6

0.7%
39.2

0.4%
38.9

Cash and cash equivalents as of December 31, 2017, totaled ¥17.7 billion, an increase of ¥1.0 billion from theprevious fiscal year-end.
Operating Activities
Net cash provided by operating activities amounted to ¥54.2 billion, down from ¥62.5 billion provided by suchactivities in fiscal year 2016. Income before income taxes and non-controlling interests was ¥54.8 billion, while
the adjustment for depreciation and amortization amounted to ¥31.5 billion. Income taxes paid totaled ¥12.3
billion, while working capital increased ¥7.5 billion.
Investing Activities
Net cash used in investing activities came to ¥58.9 billion, up from ¥32.2 billion used in such activities in theprevious fiscal year. A total of ¥33.6 billion was applied to capital expenditure, comprising the purchase ofproperty, plant and equipment and the purchase of intangible assets, while ¥27.2 billion was used for thepurchase of subsidiaries and affiliates securities. Proceeds from sales of property, plant and equipment totaled¥2.1 billion.
Financing Activities
Net cash provided by financing activities amounted to ¥11.4 billion, compared with ¥26.9 billion used in suchactivities in fiscal year 2016. The net total of funds procured was ¥26.1 billion, while cash dividends paid totaled ¥11.4 billion.

5

Consolidated Balance SheetDIC Corporation and Consolidated Subsidiaries
December 31, 2017

Assets

2017

Millions of yen
2016

Cash and deposits (Notes 4 and 17)¥ 17,883¥ 17,241

Notes and accounts receivable—trade (Notes 9, 17 and 18)

226,968

215,369

Merchandise and finished goods (Note 9)

90,01082,611Work in process (Note 9)

9,053

9,461

Raw materials and supplies (Note 9)58,91153,605

Deferred tax assets (Note 14)

9,574

9,915

Other (Note 17)

23,34021,374

Allowance for doubtful accounts(10,763)(10,839)

424,976

398,737

Buildings and structures

92,44392,092

Machinery, equipment and vehicles

70,554

66,342Tools, furniture and fixtures

11,12910,142

Land

50,30750,169Construction in progress

7,244

7,915

231,677

226,660

Goodwill

199

501

Software

3,837

4,878

Other

3,548

3,563

7,584

8,942

Investment securities (Notes 5, 6 and 17)

76,86741,007

Deferred tax assets (Note 14)

31,871

36,996

Net defined benefit asset (Note 10)

33,40828,074

Other (Notes 5 and 17)

26,85825,899Allowance for doubtful accounts(1,485)(1,487)

Total investments and other assets

167,519

130,489

Total non-current assets

406,780

366,091

Total assets¥831,756¥764,828

Current assets:

Total current assets

Non-current assets:
Property, plant and equipment (Notes 7, 8 and 9):

Total property, plant and equipment

Intangible assets (Note 8):

Total intangible assets

Investments and other assets:

See notes to the consolidated financial statements.

6

Consolidated Balance Sheet

Liabilities andNet Assets

2017

Millions of yen
2016¥117,199¥ 94,392

Short-term loans payable (Notes 9 and 17)

61,38552,744Current portion of long-term loans payable (Notes 9, 17 and 18)

27,67743,647

Current liabilities:
Notes and accounts payable—trade (Notes 17 and 18)

Lease obligations (Notes 9 and 17)
Income taxes payable (Notes 14 and 17)
Deferred tax liabilities (Note 14)
Provision for bonuses

557

584

4,793

4,153

399

322

7,071

7,050

47,50962,447

266,590

265,339

Bonds payable (Notes 9, 17 and 18)

50,00030,000Long-term loans payable (Notes 9, 17 and 18)

Other (Note 17)
Total current liabilities
Non-current liabilities:

122,017

109,918

Lease obligations (Notes 9 and 17)

4,045

4,394

Deferred tax liabilities (Note 14)

11,653

9,598

Net defined benefit liability (Note 10)

22,77428,072

Asset retirement obligations

1,329

1,334

Other

9,397

9,156

Total non-current liabilities

221,215

192,472

Total liabilities

487,805

457,81196,55796,557

Net assets:
Shareholders’ equity (Notes 11 and 21):
Capital stock (Note 12)
Capital surplus

94,44594,094Retained earnings

186,768

159,541

Treasury shares (Note 13)(1,828)(1,213)

Total shareholders’ equity

375,942

348,979

7,874

5,248

(3)

(187)

Foreign currency translation adjustment(46,462)(48,626)

Remeasurements of defined benefit plans (Note 10)

Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges(22,222)(26,879)

Total accumulated other comprehensive income(60,813)(70,444)

Non-controlling interests

28,822

28,482

Total net assets

343,951

307,017

Total liabilities and net assets¥831,756¥764,828

7

Consolidated Statement of Income
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2017

2017

Millions of yen
2016

Net sales
Cost of sales
Gross profit¥789,427
605,809
183,618¥751,438
571,895
179,543

Selling, general and administrative expenses (Note 15)
Operating income

127,135
56,483125,361
54,182Non-operating income:Interest income
Dividends income
Equity in earnings of affiliates
Foreign exchange gains
Other
Total non-operating income

1,817
447
4,069
—
2,019
8,352

575
401
3,266
607
2,182
7,031

Non-operating expenses:
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses

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

3,227
—
2,189
5,416

Ordinary income

56,96055,797Extraordinary income:Gain on sales of non-current assets
Gain on change in equity
Gain on sales of subsidiaries and affiliates securities
State subsidy
Gain on bargain purchaseTotal extraordinary income

1,156
641
315
—
—
2,112

—
—
—
842
78
920

Extraordinary loss:
Loss on disposal of non-current assets
Severance costs
Early termination fee
Impairment loss (Note 8)
Provision of allowance for doubtful accounts
Loss on disaster
Total extraordinary loss

2,682
951
376
234
—
—
4,243

4,412
1,416
—
—
553
440
6,821

54,82949,896

10,517
3,388
13,905

11,565767
12,33240,9242,321¥ 38,603

37,564
2,797¥ 34,767

Income before income taxes and non-controlling interests
Income taxes (Note 14):
Income taxes—current
Income taxes—deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

Yen

Earnings per share (Note 2):
Basic
DilutedWeighted-average number of shares issued during the period,
excluding treasury shares (in thousands)
Cash dividends per share applicable to the period (Note 2)
See notes to the consolidated financial statements.

¥ 407.56—¥ 366.72—

94,717

94,805¥ 120.00

¥

64.00

8

Consolidated Statement of Comprehensive Income
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2017

2017

Millions of yen
2016¥40,924¥ 37,564

2,590

1,609

Deferred gains or losses on hedges

183

(112)

Foreign currency translation adjustment

979(18,179)

Remeasurements of defined benefit plans, net of tax (Note 10)

4,718

6,266

Share of other comprehensive income of associates accounted for using
equity method

1,563

(965)

¥10,033¥(11,381)¥50,957¥ 26,183

Comprehensive income attributable to owners of the parent¥48,234¥ 23,734

Comprehensive income attributable to non-controlling interests

2,723

2,449

Net income
Other comprehensive income:
Valuation difference on available-for-sale securities

Total other comprehensive income (Note 20)
Comprehensive income
Comprehensive income attributable to:

See notes to the consolidated financial statements.

9Consolidated Statement of Changes in Net Assets
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2017

Millions of yen
Shareholders’ equity

Balance at January 1, 2016
Dividends from surplus, ¥8.00
per share (Note 11)
Net income attributable to owners of
the parent
Purchase of treasury shares—
19,473 shares
Retirement of treasury shares(Notes 12 and 13)
Consolidation of shares (Notes 12 and 13)
Change in treasury shares of parent
arising from transactions with
non-controlling shareholders
Net changes of items other thanshareholders’ equity (Notes 6 and 11)
Balance at December 31, 2016

Issuednumber ofcommon stock(thousands)

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equity965,372¥96,557¥94,161¥137,071¥(5,911)¥321,878(13,803)(856,412)(5)(7,585)(7,585)34,76734,767(4,712)

(19)

(19)

4,717

—
—

(62)

95,157

Dividends from surplus, ¥120.00
per share (Note 11)
Net income attributable to owners of
the parent
Purchase of treasury shares—
155,741 shares
Change in treasury shares of parent
arising from transactions with
non-controlling shareholders
Net changes of items other thanshareholders’ equity (Notes 6 and 11)
Balance at December 31, 2017

96,557

94,094(62)

159,541(1,213)(11,376)(11,376)

38,60338,603(615)

351
95,157¥96,557¥94,445

348,979(615)
351¥186,768¥(1,828)¥375,942
Millions of yen

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Deferred gains
or losses onhedges¥3,688¥ (73)

Balance at January 1, 2016
Dividends from surplus, ¥8.00
per share (Note 11)
Net income attributable to owners of
the parent
Purchase of treasury shares—
19,473 shares
Retirement of treasury shares(Notes 12 and 13)
Consolidation of shares (Notes 12 and 13)
Change in treasury shares of parent
arising from transactions with
non-controlling shareholders
Net changes of items other thanshareholders’ equity (Notes 6 and 11)
Balance at December 31, 2016
Dividends from surplus, ¥120.00
per share (Note 11)
Net income attributable to owners of
the parent
Purchase of treasury shares—
155,741 shares
Change in treasury shares of parent
arising from transactions with
non-controlling shareholders
Net changes of items other thanshareholders’ equity (Notes 6 and 11)
Balance at December 31, 2017
See notes to the consolidated financial statements.

Foreigncurrency Remeasurements
translationof definedadjustment
benefit plans¥(29,925)¥(33,101)

Total
accumulated
othercomprehensive
incomeNon-controllinginterests

Total
net assets¥(59,411)¥27,390¥289,857(7,585)34,767
(19)
—
—
(62)

1,560
5,248

(114)
(187)

(18,701)(48,626)

6,222(26,879)(11,033)(70,444)

1,092
28,482(9,941)
307,017(11,376)
38,603
(615)
351

2,626
¥7,874

¥

184
(3)

2,164
¥(46,462)

4,657¥(22,222)

9,631¥(60,813)

340¥28,822

9,971¥343,951

10Consolidated Statement of Cash FlowsDIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2017

Net cash provided by (used in) operating activities:
Income before income taxes and non-controlling interests
Adjustments for:
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Interest and dividends income
Equity in (earnings) losses of affiliates
Interest expenses
Loss (gain) on sales and retirement of non-current assets
Impairment loss
Loss (gain) on sales of subsidiaries and affiliates securities
State subsidy
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 investments in subsidiaries resulting in change in scope of consolidation
Purchase of subsidiaries and affiliates securities
Purchase of investment securities
Proceeds from sales and redemption of investment securities
Payments for transfer of business
Proceeds from subsidy income
Other, net
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities:
Net increase (decrease) in short-term loans payable
Increase (decrease) in commercial papers
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Cash dividends paid
Cash dividends paid to non-controlling interests
Net decrease (increase) in treasury shares
Payments from changes in ownership interests in subsidiaries that do not result in change
in scope of consolidation
Other, net
Net cash provided by (used in) financing activities
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 (Note 4)
Cash and cash equivalents at end of the period (Note 4)
See notes to the consolidated financial statements.

2017

Millions of yen
2016¥ 54,829¥ 49,896

31,524345(720)
13(2,264)(4,069)
3,565
1,526
234
(315)
—
(7,070)(9,742)
9,328(11,246)
65,9384,180(3,628)(12,294)
54,19632,444
373
1,540
149
(976)
(3,266)
3,227
4,412
—
—
(842)
(2,150)(828)(1,810)(2,775)79,3942,130(3,254)(15,766)
62,504(8,231)
8,560(32,192)
2,103(1,392)(515)(27,209)
(851)
465
(338)
—
662
(58,938)(6,505)
6,219(30,310)
455
(969)
(114)
—
(971)
376
(275)
842
(950)
(32,202)

9,272—
44,823(48,022)
20,000—(11,376)(1,439)(615)

30,364(4,000)30,069(75,576)
10,000(8,000)(7,585)(1,047)
(19)

(578)
(690)
11,375(5,653)980
16,671¥ 17,651—(1,058)(26,852)(1,892)
1,558
15,113¥ 16,671

11

Notes to the Consolidated Financial Statements
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2017

Note 1:
Basis ofPresenting
Financial
Statements

The accompanying consolidated financial statements have been prepared in accordance with the provisions
set forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations, andin accordance with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different
in certain respects as to application and disclosure requirements of the International Financial Reporting Standards (“IFRS”).
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been
made to the consolidated financial statements issued domestically in order to present them in a form which ismore familiar to readers outside Japan. The consolidated financial statements are stated in Japanese yen, thecurrency of the country in which DIC Corporation (the “Company”) is incorporated.

Note 2:
Summary of
Significant
Accounting
Policies

Consolidated financial statements
Under the control or influence concept, those companies in which the Company, directly or indirectly, is able toexercise control over operations are fully consolidated and those companies over which the Company has theability to exercise significant influence are accounted for by the equity method.
The consolidated financial statements include the accounts of the Company and its significant subsidiaries:
Sun Chemical Group Coöperatief U.A., DIC (China) Co., Ltd., DIC Asia Pacific Pte Ltd, SEIKO PMC CORPORATION, DIC INVESTMENTS JAPAN, LLC., DIC Graphics Corporation and 138 other companies in the fiscal year
ended December 31, 2017 (144 other companies in the fiscal year ended December 31, 2016). All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized
profit included in assets resulting from transactions within the Company and its consolidated subsidiaries (the“Group”) is eliminated.
Investments in 26 affiliates in the fiscal year ended December 31, 2017 (23 in the fiscal year ended December 31, 2016) are accounted for by the equity method.
Accounting period of consolidated subsidiaries
The closing date of the consolidated subsidiaries is the same as the consolidated closing date.
Cash and cash equivalents
Cash and cash equivalents consist primarily of cash on hand, certificates of deposit and short-term investmentswith original maturities of three months or less that are readily convertible to known amounts of cash andhave insignificant risk of changes in value.
Investment securities
Investment securities are classified and accounted for, depending on management’s intent, into available-forsale securities. Available-for-sale securities are carried at fair value as of the balance sheet date, with unrealized
gain and loss, net of applicable taxes, reported in a separate component of net assets. Available-for-sale securities whose fair values are not readily available are carried at cost. The cost of securities sold is calculated by themoving-average method.
Allowance for doubtful accounts
Allowance for doubtful accounts of the Company and its domestic consolidated subsidiaries is provided basedon historical experience for normal receivables and on an estimate of collectability of receivables from companies in financial difficulty.
Allowance for doubtful accounts of foreign consolidated subsidiaries is provided based on an estimate ofcollectability of receivables.
Inventories
Inventories are principally stated at cost, cost being determined by the FIFO method, which evaluates the amountof the inventories shown in the balance sheet by writing them down based on their decrease in profitability.
Property, plant and equipment (excluding leased assets)
Property, plant and equipment are carried at cost. Significant renewals and additions are capitalized; maintenance and repairs, and minor renewals and improvements, are charged to income as incurred.
Depreciation of buildings (other than facilities attached to buildings) of the Company and its domestic consolidated subsidiaries is calculated principally by the straight-line method. Besides, depreciation of facilities

12

Notes to the Consolidated Financial Statements

attached to buildings and structures acquired on or after April 1, 2016, is also calculated by the straight-line
method. Other property, plant and equipment are calculated by the declining-balance method.
Depreciation of property, plant and equipment of foreign consolidated subsidiaries is calculated principally by
the straight-line method. The range of useful lives is principally from 8 to 50 years for buildings and structuresand from 3 to 11 years for machinery, equipment and vehicles.
Intangible assets (excluding leased assets)
Intangible assets are carried at cost less accumulated amortization, and are amortized by the straight-line
method. Goodwill is amortized by the straight-line method over a reasonable period not exceeding 20 years.
Leased assets
For the Company and its domestic consolidated subsidiaries, leased assets related to finance leases that do nottransfer ownership of the leased property to the lessee are depreciated on a straight-line basis, with the lease
periods used as their useful lives and no residual value.
Foreign consolidated subsidiaries account for lease transactions in accordance with either the accounting
principles generally accepted in the United States (“U.S. GAAP”) or IFRS.
Retirement and pension plans
The Company and its domestic consolidated subsidiaries account for net defined benefit asset/liability for employees’ and executive officers’ retirement benefits. Pension assets are deducted from retirement benefit obligations and the net amount is recognized based on the estimated amount of payment as of the balance sheet
date. In calculating retirement benefit obligations, the Company applies a method of attributing expected
retirement benefits to each period on a benefit formula basis. The Company and its domestic consolidated
subsidiaries amortize actuarial gain and loss in the succeeding years primarily by the straight-line method
over stated years that do not exceed the average remaining service period of the eligible employees (15 to 16
years). Past service costs are amortized in the accounting periods when they accrue.
Foreign consolidated subsidiaries are accounted for in accordance with either U.S. GAAP or IFRS. Actuarial
gains and losses are amortized in the succeeding year primarily by the straight-line method over stated years
that do not exceed the average remaining service period of the eligible employees (9 to 28 years). Past service
costs are amortized over 3 to 25 years.
Unrecognized actuarial gains and losses and unrecognized past service costs are recorded in “Remeasurements of defined benefit plans” in net assets after adjusting income tax effect.
Asset retirement obligations
The asset retirement obligation is recognized as the sum of the discounted cash flows required for the future
asset retirement and is recorded in the period in which the obligation is incurred if a reasonable estimate canbe made. If a reasonable estimate of the asset retirement obligation cannot be made in the period in which
the asset retirement obligation is incurred, the liability should be recognized when a reasonable estimate of theasset retirement obligation can be made. Upon initial recognition of a liability for an asset retirement obligation, an asset retirement cost is capitalized by increasing the carrying amount of the related fixed asset by theamount of the liability. The asset retirement cost is subsequently allocated to expense through depreciation
over the remaining useful life of the asset. Over time, the liability is accreted to its present value each period.
Any subsequent revisions to the timing or the amount of the original estimate of undiscounted cash flows arereflected as an increase or a decrease in the carrying amount of the liability and the capitalized amount of therelated asset retirement cost.
Income taxes
The provision for income taxes is computed based on the pretax income (loss) included in the consolidated
statement of income.
Deferred income taxes are recorded to reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. These deferredtaxes are measured by applying currently enacted tax laws to the temporary differences.
Research and development costs
Research and development costs are charged to income as incurred.

13

Notes to the Consolidated Financial Statements

Basis of translation of financial statements of foreign consolidated subsidiaries
The financial statements of foreign consolidated subsidiaries included in the consolidated financial statements
are translated into Japanese yen based on the following procedures:(1) Assets and liabilities of foreign consolidated subsidiaries are translated into Japanese yen at the exchange
rates as of the balance sheet date.
(2) Income and expenses are translated into Japanese yen at the average rate during the year.
The differences of translation are included in foreign currency translation adjustment and non-controllinginterests, which are presented as separate components of net assets.
Translation of foreign currency accounts
Receivables and payables denominated in foreign currencies are translated into Japanese yen at the exchange
rates as of the balance sheet date and any difference arising from the translation is recognized in the consolidated statement of income if hedge accounting is not applied.
Derivatives and hedging activities
To hedge risks associated with the fluctuations of exchange rates, interest rates and commodity prices, theGroup uses foreign currency forward contracts, currency swaps, interest rate swaps, and commodity swaps.
To hedge a part of the risks associated with the fluctuations of exchange rates for investments in foreign entities, the Company uses loans denominated in foreign currencies. The Group does not enter into derivatives for
trading or speculative purposes.
Derivative financial instruments and foreign currency transactions are classified and accounted for as follows:
1) all derivatives are recognized as either assets or liabilities and measured at fair value, with gains or losses
recognized in the consolidated statement of income and 2) for derivatives used for hedging purposes,
if derivatives qualify for hedge accounting because of high correlation and effectiveness between thehedging instruments and the hedged items, gains or losses on derivatives are deferred until maturity of thehedged transactions.
Receivables and payables denominated in foreign currencies are translated at the contracted rates if theforward contracts qualify for hedge accounting. Gains and losses related to qualifying hedges of firm commitments or anticipated transactions are deferred and recognized in income when the hedged transaction occurs.
If interest rate swaps qualify for hedge accounting and meet certain specific matching criteria, they will not bemeasured at market value, rather the differential paid or received under the swaps will be recognized in interest expenses or interest income.
Per share information
Earnings per share (basic) is computed by dividing net income attributable to owners of the parent available tocommon shareholders by the weighted-average number of shares issued for the period, retroactively adjusted
for stock splits.
The Company implemented the consolidation of shares of common stock by a factor of 10 to 1 with July 1,
2016, as the effective date. Earnings per share (basic) is calculated based on the assumption that the consolidation had been implemented at the beginning of the fiscal year ended December 31, 2016.
Earnings per share (diluted) reflects the potential dilution that could occur if securities were exercised or converted into common stock. Earnings per share (diluted) assumes full conversion of the outstanding convertible
notes and bonds at the beginning of the year (or at the time of issuance) with an applicable adjustment for
related interest expense, net of tax, and full exercise of outstanding warrants.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends
applicable to the respective years, including dividends to be paid after the end of the year.
Cash dividends per share applicable to the period for the fiscal year ended December 31, 2016, comprises
interim dividends of ¥4.00 (before the consolidation) and year-end dividends of ¥60.00 (after the consolidation).
If the consolidation had been taken into consideration, cash dividends per share applicable to the period forthe fiscal year ended December 31, 2016, would be ¥100.00.
From the fiscal year ended December 31, 2017, the Company introduced the Board Benefit Trust (BBT). The
shares held by the trust are recorded under net assets as treasury shares. The number of treasury shares excluded from the number of shares issued as of the balance sheet date used for the calculation of equity per shareincludes the number of shares held by the trust. The number of treasury shares excluded from the weightedaverage number of shares issued during the fiscal year used for the calculation of earnings per share includes
the number of shares held by the trust.

14

Notes to the Consolidated Financial Statements

Note 3:
Additional
Information

Application of Implementation Guidance on Recoverability of Deferred Tax Assets
Effective from the fiscal year ended December 31, 2017, the Company has applied the “Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, March 28, 2016).
Board Benefit Trust (BBT)
With regard to the compensation for executive officers, as well as directors who concurrently serve as executive
officers (the “Target Officers”), the Company introduced a new performance-based stock compensation plancalled Board Benefit Trust (BBT) (the “Plan”) from the fiscal year ended December 31, 2017. The purpose of thePlan is to further clarify the linkage between the compensation of the Target Officers, and corporate performance and the value of the Company’s shares. The intended result is strengthening the Target Officers’ awareness of their contributions to the medium- to long-term improvement of corporate performance and value.
Accounting treatment related to the trust agreement is in accordance with “Practical Solution on Transactions ofDelivering the Company’s Own Stock to Employees etc. through Trusts” (PITF No. 30, March 26, 2015).
(1) Outline of the transactions
The trust established under the Plan acquires the Company’s shares by cash contributed by the Company. The
trust provides shares of the Company and the cash equivalent to the market price of the shares of the Company(the “Company’s Shares and Cash Benefits”) to the Target Officers, in accordance with the Rules of Officer Share
Benefit established by the Company. The Target Officers shall in principle receive the Company’s Shares and Cash
Benefits upon their retirement.
(2) The Company’s shares remaining in the trust
The shares remaining in the trust are recorded under net assets as treasury shares at the book value in the trust(excluding incidental costs). The book value of the treasury shares was ¥599 million, while the number of thetreasury shares was 152 thousand as of December 31, 2017.

Note 4:
Cash and Cash
Equivalents

Cash and cash equivalents as of December 31, 2017, and 2016, include the following:

Cash and deposits
Less: time deposits and short-term investments which mature over three months after
the date of acquisition
Cash and cash equivalents

2017

Millions of yen
2016¥17,883¥17,241

(232)

(570)

¥17,651¥16,671

Note 5:Investments in
Unconsolidated
Subsidiaries andAffiliates

Investments in unconsolidated subsidiaries and affiliates as of December 31, 2017, and 2016, include the following:
2017

Millions of yen
2016

Investments in stock of unconsolidated subsidiaries and affiliates¥53,213¥21,678

Investments in equity of unconsolidated subsidiaries and affiliates
Total

1,053
¥54,266

1,398¥23,076

Note 6:
Investment
Securities

The carrying amounts and aggregate fair values of available-for-sale securities at December 31, 2017, and2016, are as follows:
Millions of yen
2017
Cost

Unrealized
gains

Unrealized
lossesFair value¥8,121¥8,121¥11,437¥11,437

¥(21)
¥(21)

¥19,537¥19,537

Available-for-sale securities:
StocksTotal

15

Notes to the Consolidated Financial Statements

Millions of yen
2016
Cost

Unrealized
gains

Unrealized
lossesFair value

Stocks¥8,190¥7,752¥(54)¥15,888

Total¥8,190¥7,752¥(54)¥15,888

Available-for-sale securities:

Note 7:
Property, Plant
and Equipment

Accumulated depreciation on property, plant and equipment as of December 31, 2017, and 2016, is ¥559,793
million and ¥545,419 million, respectively.

Note 8:
Impairmentof Long-Lived
AssetsImpairment losses on long-lived assets for the fiscal year ended December 31, 2017, for each asset group is
as follows:

Used status

Factory assets in use
Idle assets

Category of assets

Machinery, equipment and vehicles,
buildings and structures, and other
Buildings and structures, machinery,equipment and vehicles, and other

Location

Millions of yen
2017
Allocated impairment loss

India

¥200

Ibaraki, Japan

34

Total

¥234

The carrying amount of the factory assets in use was reduced to its recoverable amount because the recoverable amount is less than the carrying amount. The carrying amount of the idle assets was also reduced to its
recoverable amount because the assets are no longer used.
The book value of factory assets in use has been lowered to the recoverable amount. All the book value of
idle assets has been recognized as impairment loss.

Note 9:
Short-Term
Loans Payable
and Long-Term
Loans Payable

Information with respect to short-term loans payable at December 31, 2017, and 2016, is as follows:
The average interest rate for the fiscal years ended December 31, 2017, and 2016, is 2.19% and 2.43%,
respectively, for short-term loans payable, and -0.01% and 0.00%, respectively, for commercial papers.
Bonds payable, long-term loans payable and lease obligations at December 31, 2017, and 2016, comprisethe following:
2017

Millions of yen
2016

0.53% Japanese yen notes due 2022

¥ 10,000¥ 10,000

1.00% Japanese yen notes due 2025

10,00010,000

0.95% Japanese yen notes due 2036

5,000

5,000

0.36% Japanese yen notes due 2026

5,000

5,000

0.42% Japanese yen notes due 2027

10,000—

0.15% Japanese yen notes due 2022

10,000—Loans due 2018–2027, with an average interest rate of 0.75%

149,694

153,565

Lease obligations

4,602

4,978

Subtotal

204,296

188,543(27,677)(43,647)——

Less: current portion of long-term loans payable
Less: current portion of bonds
Less: lease obligations—current
Total

(557)

(584)

¥176,062¥144,312

16

Notes to the Consolidated Financial Statements

The annual maturities of bonds payable, long-term loans payable and lease obligations for the fiscal years
subsequent to December 31, 2017, are as follows:
Millions of yen

2018¥ 28,234

2019

45,066

2020

23,2702021

35,1502022

30,456

Thereafter

42,120Total¥204,296

The amounts of assets pledged as collateral and secured borrowings and loans at December 31, 2017, comprise the following:
Millions of yen

Assets pledged as collateral:
Notes and accounts receivable—trade¥3,873Inventories

2,002
572

Property, plant and equipment¥6,447

Total
Secured borrowings and loans:
Short-term loans payable

¥ 616

Total

¥ 616

Note 10:Retirement andPension Plans(1) Overview of adopted retirement and pension plans
The Company and a number of domestic consolidated subsidiaries have defined benefit pension plans such asa cash balance–style pension plan and retirement plans, and defined contribution pension plans. Some foreign
consolidated subsidiaries maintain defined benefit pension plans and defined contribution pension plans. The
Company contributes certain available-for-sale securities to the employee retirement benefit trust.
(2) Defined benefit pension plans (including multi-employer plan)
Changes in defined benefit obligations

As of January 1, 2017
Service cost

Domestic plans

Millions of yen
Foreign plans¥95,274¥146,257

2,225

717

Interest cost

752

4,661

Actuarial gains and losses

(70)

4,767

(4,620)(6,342)

Benefits paid
Past service cost—

8

Exchange translation differences

—

3,697

Other
As of December 31, 2017—70

¥93,561¥153,835

17

Notes to the Consolidated Financial Statements

Domestic plans

Millions of yen
Foreign plans

As of January 1, 2016

¥97,958¥152,302

Service cost

2,222

527

Interest cost

774

5,160

Actuarial gains and losses
Benefits paid

(642)

10,467(5,038)(6,549)

Past service cost—

189

Exchange translation differences—(16,191)

Other

—

352

¥95,274¥146,257

Domestic plans

Millions of yen
Foreign plans

As of December 31, 2016

Changes in plan assets¥121,278¥120,255

Expected return on plan assets

3,051

6,295

Actuarial gains and losses

4,641

6,109

Contributions by the employer

1,012

2,794

Benefits paid

(4,518)(6,153)

Exchange translation differences

—

3,214

Other

—

52

¥125,464¥132,566

Domestic plans

Millions of yen
Foreign plans¥120,430¥121,882

3,033

6,129

As of January 1, 2017

As of December 31, 2017

As of January 1, 2016
Expected return on plan assets
Actuarial gains and losses

56

9,544

Contributions by the employer

2,663

1,978

Benefits paid

(4,904)(6,407)

Exchange translation differences—(13,056)

Other

—

185

¥121,278¥120,255

As of December 31, 2016

Reconciliation of defined benefit obligations and plan assets on retirement benefits recognized in
the consolidated balance sheet

Domestic plans

Millions of yen
2017
Foreign plans

Funded defined benefit obligations¥

92,418¥ 152,831

Plan assets(125,464)(132,566)

Subtotal(33,046)

20,265

1,143

1,004

Unfunded defined benefit obligations
Net amount of liabilities and assets recognized in consolidated balance sheet¥ (31,903)¥

21,269Liabilities (net defined benefit liability)¥¥

21,408¥21,269Assets (net defined benefit asset)
Net amount of liabilities and assets recognized in consolidated balance sheet

1,366(33,269)¥ (31,903)

(139)

18

Notes to the Consolidated Financial Statements

Domestic plans

Millions of yen
2016
Foreign plans

Funded defined benefit obligations¥

94,164¥ 145,524

Plan assets(121,278)(120,255)

Subtotal(27,114)25,269Unfunded defined benefit obligations

1,110

733

Net amount of liabilities and assets recognized in consolidated balance sheet¥ (26,004)¥

26,002

Liabilities (net defined benefit liability)¥¥

26,055¥26,002

Assets (net defined benefit asset)
Net amount of liabilities and assets recognized in consolidated balance sheet

2,017(28,021)¥ (26,004)(53)

Retirement benefit expenses and its breakdowns

Domestic plans

Millions of yen
2017
Foreign plans

Service cost

¥ 2,225

Interest cost

752

4,661

(3,051)(6,295)

(264)

1,472

Expected return on plan assets
Recognition of actuarial gains and losses

717—

Amortization of past service cost
Total

¥

¥ (338)8¥563

Note: Other than these retirement benefit expenses, severance costs in the consolidated statement of income include retiree premium benefit.

Domestic plans

Service cost

¥ 2,222

Interest cost

Millions of yen
2016
Foreign plans

¥

527

774

5,160

Expected return on plan assets(3,033)(6,129)

Recognition of actuarial gains and losses

1,119

1,416

—

189

¥ 1,082¥ 1,163

Amortization of past service cost
Total

Note: Other than these retirement benefit expenses, severance costs in the consolidated statement of income include retiree premium benefit.

Past service cost and actuarial gains and losses
The past service cost and actuarial gains and losses recognized in accumulated other comprehensive income asremeasurements of defined benefit plans (amount before income tax effect) for the fiscal years ended December 31, 2017, and 2016, are as follows:

Past service cost

Domestic plans

Millions of yen
2017
Foreign plans

¥

¥

Total

Past service cost
Actuarial gains and losses
Total

—

4

4,448

1,901

¥4,448¥1,905

Domestic plans

Millions of yen
2016
Foreign plans¥¥

Actuarial gains and losses

—

14

1,820

7,270

¥1,820¥7,284

19

Notes to the Consolidated Financial Statements

Unrecognized past service cost and unrecognized actuarial gains and losses
The unrecognized past service cost and unrecognized actuarial gains and losses recognized in accumulated
other comprehensive income as remeasurements of defined benefit plans (amount before income tax effect)
for the fiscal years ended December 31, 2017, and 2016, are as follows:

Domestic plans

Unrecognized past service cost
Unrecognized actuarial gains and losses
Total

Unrecognized past service cost
Unrecognized actuarial gains and losses¥—

Millions of yen
2017
Foreign plans¥

129

10,024(44,549)¥10,024¥(44,420)

Domestic plans

Millions of yen
2016
Foreign plans

¥

—

¥

125

5,576

(46,450)¥5,576¥(46,325)

Domestic plans

2017
Foreign plans

Equity securities

51.8%

29.0%

Debt securities

22.0%

58.0%

Total

Major breakdown of plan assets

Other
Total

26.2%

13.0%

100.0%

100.0%

Note: 27.5% of the assets of the domestic plans is available-for-sale securities contributed to the employee retirement benefit trust.

Domestic plans

2016
Foreign plans

Equity securities

51.7%

27.8%

Debt securities

21.8%

56.1%

Other

26.5%

16.1%

100.0%

100.0%

Total

Note: 28.5% of the assets of the domestic plans is available-for-sale securities contributed to the employee retirement benefit trust.

Actuarial assumptions
Domestic plans

2017
Foreign plans

Discount rate

0.8%

1.2%–3.7%

Expected return rate on plan assets

3.0%

5.0%–6.2%

Expected rate of increase in salary3.3%

2.0%–3.5%

Note: Expected return rate on plan assets is determined by considering the current and anticipated future portfolio of plan assets and current
and anticipated future long-term performance of individual asset classes that comprise the funds’ asset mix.

Domestic plans

2016
Foreign plans

Discount rate

0.8%

1.3%–4.2%

Expected return rate on plan assets

3.0%

5.5%–6.4%

Expected rate of increase in salary3.3%

2.0%–3.5%

Note: Expected return rate on plan assets is determined by considering the current and anticipated future portfolio of plan assets and current
and anticipated future long-term performance of individual asset classes that comprise the funds’ asset mix.

(3) Defined contribution pension plans
The required contributions borne by the Company and a number of consolidated subsidiaries in relation to thedefined contribution pension plans for the fiscal years ended December 31, 2017, and 2016, were ¥2,042 million and ¥1,947 million, respectively.

20

Notes to the Consolidated Financial Statements

Note 11:
Net Assets

Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The significant provisions in the Companies Act that affect financial and accounting matters are summarized below:(1) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to theyear-end dividend upon resolution at the shareholders’ meeting. For companies that meet certain criteria suchas: (a) having the board of directors, (b) having independent auditors, (c) having the board of corporate auditors and (d) the term of service of the directors is prescribed as one year rather than two years of normal termby its articles of incorporation, the board of directors may declare dividends (except for dividends in kind) at
any time during the fiscal year if the company has prescribed so in its articles of incorporation. The Company
meets all the above criteria.
The Companies Act permits companies to distribute dividends in kind (non-cash assets) to shareholders subject to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the board of directors if thearticles of incorporation of the company so stipulate. The Companies Act provides certain limitations on theamounts available for dividends or the purchase of treasury shares. The limitation is defined as the amountavailable for distribution to the shareholders, but the amount of net assets after dividends must be maintained
at no less than ¥3 million.
(2) Increases/decreases and transfer of common stocks, reserve and surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal
reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus)
depending on the equity account charged upon the payment of such dividends until the total of the aggregate
amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Companies Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation.
The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capitalsurplus and retained earnings can be transferred among the accounts under certain conditions upon resolutionof the shareholders.
(3) Treasury shares and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury shares and dispose of such treasury
shares by resolution of the board of directors. The amount of treasury shares purchased cannot exceed theamount available for distribution to the shareholders which is determined by a specific formula.
Under the Companies Act, stock acquisition rights, which were previously presented as a liability, are now
presented as a separate component of equity.
The Companies Act also provides that companies can purchase both treasury stock acquisition rights andtreasury shares. Such treasury stock acquisition rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.

Note 12:
Capital Stock

The Company retired its treasury shares on January 15, 2016. In addition, the Company implemented theconsolidation of shares of common stock by a factor of 10 to 1 with July 1, 2016, as the effective date. As aresult, the number of authorized shares as of December 31, 2017, and 2016, are 150,000,000 shares, and thenumber of shares issued as of December 31, 2017, and 2016, are 95,156,904 shares.

21

Notes to the Consolidated Financial Statements

Note 13:
Treasury Shares

The number of treasury shares as of December 31, 2017, and 2016, are as follows:
Shares2017
Decrease in As of December 31,
FY20172017

As of January 1,
2017

Increase in
FY2017

Common stock

356,552

155,741—

512,293

Total

356,552

155,741—

512,293

Treasury shares:

Notes: 1. The increase of treasury shares of common stock (155,741 shares) was due to the purchase of odd shares (4,041 shares) and theacquisition of the Company’s shares by the Board Benefit Trust (BBT) (151,700 shares).
2. The shares held by the Board Benefit Trust (151,700 shares) are included in the number of treasury shares.

As of January 1,
2016

Increase in
FY2016

Shares2016
Decrease in As of December 31,
FY2016
2016

Treasury shares:
Common stock

17,294,751

19,473

16,957,672

356,552

Total

17,294,751

19,473

16,957,672

356,552

Notes: 1. The increase of treasury shares of common stock (19,473 shares) was due to the purchase of fractional shares in connection with theconsolidation of shares (2,492 shares) and the purchase of odd shares (Total 16,981 shares, 13,440 shares for before the consolidation and 3,541 shares for after the consolidation).
2. The decrease of treasury shares of common stock (16,957,672 shares) was due to the retirement of treasury shares (13,803,000
shares) and the consolidation of shares by a factor of 10 to 1 (3,154,672 shares).

Note 14:
Income Taxes

The differences between the normal effective statutory tax rate in Japan and the actual effective tax rate forthe fiscal years ended December 31, 2017, and 2016, are as follows:
2017

2016

30.9%

33.1%

Valuation allowance change(6.3)%

0.6%

Normal effective statutory tax rate in Japan
Adjustments:
Tax rate differences(5.0)%(4.9)%

Equity in earnings of affiliates(2.2)%(2.1)%

Entertainment and other non-deductible expenses

1.5%

1.8%

Elimination of intercompany dividends income

14.8%

8.0%

Dividends income and other non-taxable income(9.4)%(6.5)%

State, provincial, municipal and local taxes

0.7%

0.5%

Tax credit for research and development and others(2.7)%(2.4)%

Adoption of FIN48(0.3)%(0.9)%Tax credit for the Special Tax Law for the March 11 Earthquake(1.6)%(0.4)%

Other

5.0%

(2.1)%

25.4%

24.7%

Actual effective tax rate

22

Notes to the Consolidated Financial Statements

The tax effects of significant temporary differences and loss carryforwards, which resulted in deferred tax assets and liabilities, as of December 31, 2017, and 2016, are as follows:
2017

Millions of yen
2016

Deferred tax assets:
Inventories

¥

3,339

¥

4,131

Property, plant and equipment

4,371

3,061

Intangible assets

5,815

7,671

Research and development costs

4,711

7,371

Allowance for doubtful accounts

1,857

1,840

Provision for bonuses

2,112

2,109

Net defined benefit liability

5,881

8,712

992

958

Net operating loss carryforwards

20,81627,425

Other

10,4298,287

Subtotal

60,32371,565

Less: valuation allowance(13,576)(19,052)

46,74752,513

Property, plant and equipment(3,359)(3,797)

Net defined benefit asset(3,231)(1,008)Contribution of securities to employee retirement benefit trust(1,510)(1,692)

Deferred income taxes related to gains from property, plant and equipment(2,883)(3,012)

Valuation difference on available-for-sale securities(3,442)(2,309)Unrealized gain

Total
Deferred tax liabilities:(2,929)(3,704)

Total(17,354)(15,522)Net deferred tax assets¥ 29,393¥ 36,991

Other

Influence from changes in U.S. federal income tax rate
The Tax Cuts and Jobs Act, lowering the federal income tax rate from a maximum of 35% to 21% from January 1, 2018, was enacted in the United States on December 22, 2017. As a result, net deferred tax assets
decreased by ¥7,863 million and income taxes–deferred (debit) recognized during the fiscal year ended December 31, 2017, increased by ¥7,863 million.
The Company records provisional amounts for an income tax accounting effect of the Act, adopting Staff
Accounting Bulletin 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act,” which allows
for recording provisional amounts based on a reasonable estimate for an income tax accounting effect of the
Act enacted on December 22, 2017.

Note 15:
Research andDevelopment
Costs

Research and development costs charged to income for the fiscal years ended December 31, 2017, and 2016,are ¥12,427 million and ¥11,206 million, respectively.

Note 16:
LeasesOperating leases
Future minimum rental payments under non-cancellable operating leases at December 31, 2017, and 2016,
are as follows:

Due within one year
Due after one year
Total

2017

Millions of yen
2016¥ 2,652
8,270¥10,922¥2,5096,576¥9,085

23

Notes to the Consolidated Financial Statements

Note 17:
Financial
Instruments

Group policy for financial instruments
The Group manages funds with safe and secure financial assets. Means of financings include direct financing
such as the issuance of bonds and commercial papers and liquidation of receivables, as well as indirect financing
such as short- and long-term bank borrowings, the terms of which are determined based on financial market
conditions and balance of account at the time.
Nature and extent of risks arising from financial instruments
Receivables such as trade notes and accounts receivable are exposed to customer credit risk. In addition, someof such receivables are denominated in foreign currencies and are exposed to the market risk of fluctuation inforeign currency exchange rates. Investment securities, mainly the stocks of customers and suppliers, are exposed to the risk of market price fluctuations.
Payment terms of payables, such as trade notes and accounts payable, are less than one year. In addition,some of such payables are denominated in foreign currencies and are exposed to the market risk of fluctuation
in foreign currency exchange rates.
Funds needed for operations are mainly procured as short-term loans payable, whereas funds needed forcapital expenditure and investment are mainly procured as long-term loans payable, bonds payable and leaseobligations with regard to finance lease transactions. A part of such bank loans, bonds and lease obligations
are exposed to market risks from changes in variable interest rates. Trade accounts payable and loans payableof the Company are also exposed to liquidity risk that the Company cannot meet its contractual obligations infull on maturity dates.
Risk management for financial instruments
The Company manages its credit risk from trade notes and accounts receivable on the basis of internal guidelines, which include the monitoring of payment terms and balances of customers by the sales and businessadministration departments to identify the default risk of customers at an early stage. The consolidated subsidiaries of the Company manage the exposure to credit risk on their own in accordance with their internal guidelines. Investment securities are managed by monitoring market values, the financial position of issuers andconsidering the relationship with customers and suppliers on a regular basis. The Group also tries to mitigate
liquidity risk by arranging lines of credit with financial institutions, along with adequate financial planning.
Fair value of financial instruments
The following tables present the carrying amounts and the fair value of financial instruments at December
31, 2017, and 2016. Financial instruments whose fair value is not reliably measured are excluded from thetables below.

Carrying amount

Fair value

Millions of yen
2017
Difference

Cash and deposits¥ 17,883¥ 17,883¥

Notes and accounts receivable—trade226,968

226,968—

27,95535,436

7,481

Assets:—Investment securities
Stocks of subsidiaries and affiliates
Other

19,537

19,537—

Total¥292,343¥299,824¥7,481¥

Liabilities:¥117,199¥117,199

Short-term loans payable

61,38561,385—Current portion of long-term loans payable

27,677

27,69013

Notes and accounts payable—trade

Lease obligations (current)
Income taxes payable

—

557

557

—

4,793

4,793

—

Bonds payable

50,00050,395395

Long-term loans payable

122,017

122,141

124

Lease obligations (non-current)
Total

4,045

4,414

369

¥387,673¥388,574

¥ 901

24

Notes to the Consolidated Financial Statements

Derivative financial instruments: (Note)
Hedge accounting—not applied

¥

(394)

¥

(398)

(394)

¥

(398)

(4)

Hedge accounting—applied
Total

¥

¥

—

¥

—

(4)

—

Note: Figures are net of debts and credits that arise from derivative financial instruments. Net debt amounts are indicated in parentheses.

Carrying amount

Fair value

Millions of yen
2016
Difference

Cash and deposits¥ 17,241¥ 17,241¥

Notes and accounts receivable—trade215,369

215,369—

Assets:—Investment securities
Stocks of subsidiaries and affiliates

2,364

5,579

3,215

Other

15,88815,888—

Total¥250,862¥254,077¥3,215¥ 94,392¥ 94,392¥

Short-term loans payable

52,74452,744—Current portion of long-term loans payable

43,64743,863216

Liabilities:
Notes and accounts payable—trade

Lease obligations (current)
Income taxes payable

—

584

584

—

4,153

4,153

—

Bonds payable

30,00030,07575

Long-term loans payable

109,918

110,136

218

4,394

4,827

433

¥339,832¥340,774

¥ 942

¥

¥

¥

—

¥

—

Lease obligations (non-current)
Total
Derivative financial instruments: (Note)
Hedge accounting—not applied
Hedge accounting—applied
Total

472
(266)

¥

206

472
(266)

¥

206

—

Note: Figures are net of debts and credits that arise from derivative financial instruments. Net debt amounts are indicated in parentheses.

The valuation techniques used to estimate the fair value of financial instruments and information on themarketable securities and derivative financial instruments are as follows:
AssetsCash and deposits and notes and accounts receivable–trade
The fair value of cash and deposits and notes and accounts receivable–trade approximates their carrying
amounts as these amounts are settled in a short period of time.
Investment securities
The fair value of investment securities is measured at the quoted market price on the stock exchange.
Liabilities
Notes and accounts payable–trade, short-term loans payable and income taxes payable
The fair value of these accounts approximates their carrying amounts as these amounts are settled in a shortperiod of time.
Current portion of long-term loans payable and long-term loans payable
For long-term loans payable bearing a floating interest rate, the fair value of those subject to special treatment
of interest rate swaps are based on present value by totaling the amount of principal and interest, together
with related interest rate swaps, discounted by the interest rate that would apply if equivalent long-term loans
were newly entered into. The fair value of other long-term loans payable for which a floating interest rate is

25

Notes to the Consolidated Financial Statements

applied approximates their carrying amount, due to the fact that the market rate of interest is quickly factored
in while credit status of the Company remains unchanged.
On the other hand, the fair value of long-term loans payable for which a fixed interest rate is applied is determined by discounting the cash flows related to the long-term loans payable. The discount rate applied forthe calculation above is the interest rate that may be currently available to the Group for loans payable withsimilar terms and conditions.
Bonds payable
The fair value is measured at the quoted market prices.
Lease obligations (current) and lease obligations (non-current)
The fair value of these accounts is determined by discounting the cash flows related to the lease obligations.
The discount rate applied for the calculation above is the interest rate that may be currently available to theGroup for lease obligations with similar terms and conditions.
Derivative financial instruments
Please see Note 18 “Derivative Financial Instruments” for more information.
Financial instruments whose fair value is not reliably measured
There are no market prices for non-listed stocks and others (carrying amounts as of December 31, 2017, and2016, are ¥29,375 million and ¥22,755 million, respectively) whose future cash flows cannot be estimated.
The fair value of such non-listed stocks and others is not reliably determinable and thus is excluded from investment securities.
Redemption schedule for financial assets and securities
The redemption schedules for financial assets and securities with contractual maturities as of December 31,
2017, and 2016, are summarized as follows:

Notes and accounts receivable—trade
Total

Due in 1 year
or less

Due after 1 year
through 5 years

Due after 5 years
through 10 years

Millions of yen
2017
Due after
10 years¥226,968

¥—

¥—

¥—

¥226,968

¥—

¥—

¥—

Due after 5 years
through 10 years

Millions of yen
2016
Due after
10 years

Due in 1 year
or less

Notes and accounts receivable—trade
Total

Due after 1 year
through 5 years¥215,369

¥—

¥—

¥—

¥215,369

¥—

¥—

¥—

Repayment schedule for bonds payable, long-term loans payable and other interest-bearing debt
The repayment schedules for bonds payable, long-term loans payable and other interest-bearing debt with
contractual maturities as of December 31, 2017, and 2016, are summarized as follows:

Due in 1 year
or less

Short-term loans payable¥61,385

Current portion of long-term loans payable

27,677

Due after 1 year
through 5 years

Due after 5 years
through 10 years

Millions of yen
2017
Due after
10 years

¥

¥

¥

—
—

—
—

—
—

Lease obligations (current)

557

—

—

—

Bonds payable—

20,00025,0005,000

Long-term loans payable—

112,017

10,000—

Lease obligations (non-current)
Total

—

1,925

2,120

—

¥89,619¥133,942¥37,120¥5,00026

Notes to the Consolidated Financial Statements

Due in 1 year
or less

Due after 1 year
through 5 years

Due after 5 years
through 10 years

Millions of yen
2016
Due after
10 years¥¥¥

Short-term loans payable¥52,744

Current portion of long-term loans payable

43,647———

Lease obligations (current)

584

—

—

—

Bonds payable——

25,0005,000

Long-term loans payable—

99,87810,040—

Lease obligations (non-current)
Total

—

—

—

—

1,963

2,270

161

¥96,975¥101,841¥37,310¥5,161

Note 18:
Derivative
Financial
Instruments

The Group has entered into various foreign currency forward contracts, currency options and swaps, interest
rate swaps and commodity swaps.
Foreign currency forward contracts and currency options and swaps are entered into to hedge the effects of
exchange rate changes on receivables and payables or anticipated transactions denominated in foreign currencies. Interest rate swaps are entered into to hedge the effects of interest rate changes and to reduce financing cost. Commodity swaps are entered into to hedge the effects of commodity price changes of fuel. Loansdenominated in foreign currencies are entered into to hedge a part of risks associated with the fluctuations of
exchange rates for investments in foreign entities.
The Group does not use derivative instruments for trading or speculative purposes. Derivative transactions
performed by the Group have risks due to fluctuations of exchange rates, interest rates and other factors.
Because these transactions are executed with creditworthy financial institutions, the Group does not anticipate the likelihood of any losses resulting from default by the counterparties to these agreements.
Internal regulation for managing derivative transactions has been established for the purpose of risk control
in the Company, and all derivative transactions are performed under this regulation.
The execution of derivative transactions is carried out by the Company’s finance department, and the management of risk is monitored by the Company’s accounting department. Transactions are periodically reported
to the board of directors by the officer in charge of the Finance and Accounting Division.
Consolidated subsidiaries execute transactions in accordance with their regulations for derivative management and periodically report the results of those transactions to the Company.

27

Notes to the Consolidated Financial Statements

Derivative transactions to which hedge accounting is not applied at December 31, 2017, and 2016
(1) Currency related
Millions of yen
2017
Contract/notionalamountContract/notionalamount due after
one year

Fair value

Unrealized
gain/loss

Currency swaps: (Note 1)
826

¥—

437

—

4

4

603

—

(5)

(5)

U.S.$

6,578

—

(118)

(118)

Euro

1,124

—

2

2

Russian ruble

5,812

—

(39)

(39)

Colombian peso

1,724

—

11

11

Canadian $

1,586

—

(108)

(108)

Other

1,486

—

(24)

(24)

2,836

—

(101)

(101)

(Payment in H.K.$ and receipt in U.S.$)
Other

¥

¥

12

¥

12

Currency options: (Note 1)
SellingEuro
BuyingForeign currency forward contracts: (Note 2)
Selling

Buying
U.S.$
Other
Total

291

—

(28)

(28)

¥23,303¥—¥(394)¥(394)

Notes: 1. The fair value of currency swaps and currency options is measured using the quoted price obtained from financial institutions.
Currency options used are called collar options, which effectively limit the risk arising from the changes in exchange rate by the
combination of buying call options and selling put options, or selling call options and buying put options.
2. The fair value of foreign currency forward contracts is measured using the forward quotation.

28

Notes to the Consolidated Financial Statements

Millions of yen
2016
Contract/notionalamountContract/notionalamount due after
one year

Fair value

Unrealized
gain/loss

Currency swaps: (Note 1)(Payment in H.K.$ and receipt in U.S.$)

855

¥855

¥ 88

¥ 16

(Payment in Japanese yen and receipt in
Korean won)

¥

818

—

(18)

(18)

Other

100

—

1

1

277

—

1

(1)

7,835

—

356

337

Russian ruble

4,638

—

(52)

49

Canadian $

1,573

—

6

(5)

Other

2,075

—

1

(1)

U.S.$

3,694

—

97

94

Euro

1,029

—

(3)

(3)

Other

360

—

(5)

(5)

¥23,254

¥855

¥472

¥464

Currency options: (Note 1)
Selling
GB poundBuyingU.S.$
Foreign currency forward contracts: (Note 2)
Selling

Buying

Total

Notes: 1. The fair value of currency swaps and currency options is measured using the quoted price obtained from financial institutions.
Currency options used are called collar options, which effectively limit the risk arising from the changes in exchange rate by the
combination of buying call options and selling put options, or selling call options and buying put options.
2. The fair value of foreign currency forward contracts is measured using the forward quotation.

29

Notes to the Consolidated Financial Statements

Derivative transactions to which hedge accounting is applied at December 31, 2017, and 2016
(1) Currency related
Millions of yen
2017
Contract/notionalamountContract/notionalamount due after
one year

Fair value¥ 1,582

¥—

¥ 9

263

—

(2)

113

—

(1)

14

—

0

3,094

—

356

—

Loans payable
and Accounts
payable—trade

1,379

—

1,351

—

Loans payable

36,643—¥44,795¥—

Hedged item

Foreign currency forward contracts: (Note 1)
Selling
U.S.$
Other

Forecasttransaction

BuyingU.S.$
Other

Accounts
payable—trade

Foreign currency forward contracts:(Notes 1 and 2)
Selling
U.S.$
Other

Accounts
receivable—trade

BuyingU.S.$
Chinese yuan
Currency swaps: (Notes 1 and 2)(Payment in Japanese yen and receipt in
U.S.$)
Total¥ 6

Notes: 1. The fair value of currency swaps and foreign currency forward contracts is measured using the quoted price obtained fromfinancial institutions.
2. Exchange contracts and currency swaps appropriated to specific debts and credits are settled together with either accounts
receivable–trade, loans payable or accounts payable–trade subject to hedged transaction. Accordingly, the fair value of such exchange contracts is reflected in accounts receivable–trade, loans payable or accounts payable–trade.

30

Notes to the Consolidated Financial Statements

Millions of yen
2016
Hedged item

Contract/notionalamountContract/notionalamount due after
one year¥¥

Fair value

Foreign currency forward contracts: (Note 1)
Selling
Euro
U.S.$

—

¥

3,973

—

(292)

76

—

2

Accounts
receivable—trade

2,613

—

324

—

Loans payable

451—

Loans payable

38,913

11,847¥46,528¥11,847

Forecasttransaction

178

(6)

BuyingU.S.$

Accounts
payable—trade

Foreign currency forward contracts:(Notes 1 and 2)
SellingU.S.$
Euro
BuyingChinese yuan
Currency swaps: (Notes 1 and 2)(Payment in Japanese yen and receipt in
U.S.$)
Total¥(296)

Notes: 1. The fair value of currency swaps and foreign currency forward contracts is measured using the quoted price obtained fromfinancial institutions.
2. Exchange contracts and currency swaps appropriated to specific debts and credits are settled together with either accounts
receivable–trade or loans payable subject to hedged transaction. Accordingly, the fair value of such exchange contracts is reflected inaccounts receivable–trade or loans payable.

(2) Interest related
Millions of yen
2017
Hedged item

Interest rate swaps: (Note)(Fixed rate payment, floating rate receipt)
Total

Loans payable

Contract/notionalamountContract/notionalamount due after
one year

Fair value¥47,540¥47,540¥36,270¥36,270¥—

Note: If interest rate swaps qualify for hedge accounting and meet certain specific criteria, they are settled together with loans payable subject
to hedged transaction. Accordingly, the fair value of such interest rate swaps is reflected in loans payable.

Millions of yen
2016
Hedged item

Interest rate swaps: (Note)(Fixed rate payment, floating rate receipt)
Loans payable(Floating rate payment, floating rate receipt)
Total

Contract/notionalamountContract/notionalamount due after
one year

Fair value¥46,8381,000¥47,838¥15,000—¥15,000¥—

Note: If interest rate swaps qualify for hedge accounting and meet certain specific criteria, they are settled together with loans payable subject
to hedged transaction. Accordingly, the fair value of such interest rate swaps is reflected in loans payable.

31

Notes to the Consolidated Financial Statements(3) Commodity related
Millions of yen
2017
Hedged item

Commodity swaps: (Note)
Fuel(Fixed price payment, floating price receipt)
Total

Contract/notionalamountContract/notionalamount due after
one year

Fair value

¥170

¥47

¥(10)

¥170

¥47

¥(10)

Note: The fair value of commodity swaps is measured using the quoted price obtained from the exchange.

Millions of yen
2016
Hedged item

Commodity swaps: (Note)
Fuel(Fixed price payment, floating price receipt)
Total

Contract/notionalamountContract/notionalamount due after
one year

Fair value

¥195

¥51

¥30

¥195

¥51

¥30

2017

Millions of yen
2016

¥ 21

¥ 29

Note: The fair value of commodity swaps is measured using the quoted price obtained from the exchange.

Note 19:
Commitments
and Contingent
Liabilities

Contingent liabilities at December 31, 2017, and 2016, are as follows:

Trade notes discounted with banks
Liabilities for guarantee and other
Total

705

771

¥726

¥800

In the opinion of management, the eventual settlement of pending lawsuits in which any of the companies
in the Group is the defendant will not have a material effect on the consolidated financial position or consolidated results of operations of the Group.

32

Notes to the Consolidated Financial Statements

Note 20:
Other
Comprehensive
IncomeEach component of other comprehensive income and related tax effects (including those on non-controllinginterests) for the fiscal years ended December 31, 2017, and 2016, comprises the following:
2017

Millions of yen
2016

Valuation difference on available-for-sale securities:
Gains (losses) arising during the year
Reclassification adjustments to profit (loss)¥ 3,940

¥

2,303

(214)

(123)

Amount before income tax effect

3,726

2,180

Income tax effect(1,136)

(571)

Total

2,590

1,609

Deferred gains or losses on hedges:
Gains (losses) arising during the year

37

(31)

Reclassification adjustments to profit (loss)

227

(148)

Amount before income tax effect

264

(179)

Income tax effect

(81)

67

Total

183

(112)

1,015

(18,179)

Foreign currency translation adjustment:
Adjustments arising during the year
Reclassification adjustments to profit (loss)

(36)

—

Amount before income tax effect979(18,179)

Total

979

(18,179)

Adjustments arising during the year

5,137

6,380

Reclassification adjustments to profit (loss)

1,216

2,724

Remeasurements of defined benefit plans:

Amount before income tax effect

6,353

9,104

Income tax effect(1,635)(2,838)

Total

4,718

6,266

1,565

(972)

Share of other comprehensive income of associates accounted for using
equity method:
Gains (losses) arising during the year
Reclassification adjustments to profit (loss)
Total
Total other comprehensive income

(2)

7

1,563

(965)

¥10,033¥(11,381)

Note 21:Subsequent
EventsAt the Company’s annual general meeting of shareholders held on March 29, 2018, the shareholders approved
the following appropriations of retained earnings:
Millions of yen

Cash dividends, ¥60.00 per share
Total¥5,688¥5,688

Note: The total amount of dividends to be resolved at the annual general meeting of shareholders held on March 29, 2018, includes dividendsof ¥9 million for the Company’s shares held by the Board Benefit Trust (BBT).

33

Notes to the Consolidated Financial Statements

Note 22:
Segment
Information(1) Segment information
Description of reportable segments
The reportable segments of the Group are components for which discrete financial information is available andwhose operating results are regularly reviewed by the board of directors to evaluate their performance and determine the allocation of management resources.
The Group has seven product divisions, namely “Printing Inks,” “Pigments,” “Liquid Crystal Materials,”“Polymers,” “Liquid Compounds,” “Solid Compounds” and “Application Materials,” and each product division conducts its business.
The product divisions are aggregated into five reportable segments, namely “Printing Inks,” “Fine Chemicals,”“Polymers,” “Compounds” and “Application Materials,” based on the similarity of the products and services.
“Printing Inks” mainly consists of gravure inks, offset inks and news inks. “Fine Chemicals” mainly consistsof organic pigments and liquid crystal materials. “Polymers” mainly consists of synthetic resins, such as acrylic,polyurethane, epoxy and polystyrene resins. “Compounds” mainly consists of polyphenylene sulfide (PPS) compounds, jet inks and plastic colorants. “Application Materials” mainly consists of industrial adhesive tapes andhealth foods.
Methods of measurement for the amounts of sales, profit (loss), assets, liabilities and other items
for each reportable segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2 “Summary of
Significant Accounting Policies.”
Segment profits are based on operating income.
Intersegment sales are mainly based on market price or cost of goods manufactured.
Information about sales, profit (loss), assets, liabilities and other items
Millions of yen
2017
Printing
Inks

Fine
Chemicals

Reportable Segment
Application
Materials
Total
Polymers Compounds

Others

Total

Sales:
Sales to customers
Intersegment sales
Total sales
Segment profit
Segment assets¥373,666 ¥100,878 ¥193,649¥64,605¥56,019 ¥788,817¥

610 ¥789,427—

34,542

4,234

75

58

38,909—38,909373,666

135,420

197,883

64,68056,077

827,726610

828,336

17,447

17,355

19,608

4,989

2,598

61,99758

62,055¥324,999 ¥ 98,203 ¥214,438¥94,350¥53,239 ¥785,229¥39,905 ¥825,134

Others:
10,741

4,906

7,931

4,500

2,006

30,084408

30,492

Amortization of goodwill

54

124

137

—

—

315

30

345

Investments in affiliates

2,754

1,001

20,97324,788

1,583

51,0993,167

54,266

Increase in property,
plant and equipment andintangible assets

8,549

5,193

9,111

5,385

3,034

31,272382

31,654

Depreciation and amortization

34

Notes to the Consolidated Financial Statements

Millions of yen
2016
Printing
Inks

Fine
Chemicals

Reportable Segment
Application
Materials
Total
Polymers Compounds

Others

Total

Sales:
Sales to customers
Intersegment sales¥365,189 ¥ 91,642 ¥177,158¥61,056¥55,614 ¥750,659¥

779 ¥751,438—

36,534

3,777

63

61

40,435—40,435

Total sales

365,189

128,176

180,935

61,11955,675

791,094

779

791,873

Segment profit

18,363

14,43019,642

4,975

1,867

59,27745

59,322¥312,608 ¥ 99,280 ¥195,521¥64,499

Segment assets¥53,732 ¥725,640¥37,558 ¥763,198

Others:Depreciation and amortization

12,485

4,807

7,435

4,277

2,249

31,253402

31,655

Amortization of goodwill

42

133

164

4

—

343

30

373

Investments in affiliates

1,164

1,015

17,115—

1,417

20,711

2,365

23,076

Increase in property,
plant and equipment andintangible assets

10,531

3,859

8,725

4,577

1,984

29,676357

30,033

Reconciliation between reportable segment total and amounts disclosed in consolidated financial
statements

Sales:
Reportable segment total
Sales in “Others”
Elimination of intersegment transactions
Sales in consolidated financial statements

Profit:Reportable segment total
Profit in “Others”
Corporate expenses
Operating income in consolidated financial statements

2017

Millions of yen
2016¥827,726
610(38,909)¥789,427¥791,094
779(40,435)¥751,438

2017

Millions of yen
2016¥61,99758(5,572)¥56,483¥59,27745(5,140)¥54,182

Note: Corporate expenses consist substantially of R&D expenses incurred by the DIC Central Research Laboratories to develop new products,
which is not included in reportable segment.

Assets:Reportable segment total
Assets in “Others”
Elimination between segments
Corporate assets
Assets in consolidated financial statements

2017

Millions of yen
2016¥785,229
39,905(39,793)
46,415¥831,756¥725,640
37,558(38,942)
40,572¥764,828

Note: Corporate assets consist of deferred tax assets and assets of the DIC Central Research Laboratories and Kawamura Memorial DIC Museumof Art, which is not included in reportable segment.

35

Notes to the Consolidated Financial Statements

Other items are as follows:
Millions of yen
2016

2017

Depreciation and amortization

Reportable
Segments

Others Adjustments Consolidated

Reportable
Segments

Others Adjustments Consolidated¥30,084¥ 408¥1,032¥31,253

¥ 402

¥ 789

¥31,524¥32,444

Amortization of goodwill

315

30

—

345

343

30

—

373

Investments in affiliates

51,0993,167—

54,266

20,711

2,365—

23,076

Increase in property,
plant and equipment andintangible assets

31,272382

1,930

33,58429,676357

1,246

31,279Notes: 1. The adjustments for depreciation and amortization are mainly depreciation and amortization related to the DIC Central ResearchLaboratories that cannot be allocated to any reportable segment.
2. The adjustments for increase in property, plant and equipment and intangible assets are mainly capital investments of the DIC
Central Research Laboratories that cannot be allocated to any reportable segment.

(2) Related information
Information about geographical areas

Japan

USA

OthersMillions of yen
2017
Total

Net sales (Note)¥288,608¥101,129¥399,690¥789,427

Property, plant and equipment

125,369

26,81779,491

231,677

Note: Net sales is based on customer location and is classified by country.

Japan

USA

OthersMillions of yen
2016
Total

Net sales (Note)¥282,457¥97,898¥371,083¥751,438

Property, plant and equipment

121,982

28,36076,318226,660

Note: Net sales is based on customer location and is classified by country.

Information about major customers
Not applicable for the fiscal years ended December 31, 2017, and 2016, because there is no single customer
which accounts for more than 10% of net sales shown on the consolidated statement of income.
(3) Impairment loss of assets by reportable segment

Impairment loss

Printing Inks

Fine
Chemicals

Polymers

Compounds

Application
Materials

¥200

¥—

¥34

¥—

¥—

Millions of yen
2017
Corporate andOthers eliminations Consolidated

¥—

¥—

¥234

There was no impairment loss of assets for the fiscal year ended December 31, 2016.
(4) Amortization and unamortized balances of goodwill by reportable segment
Millions of yen
2017
Corporate andOthers eliminations ConsolidatedPrinting Inks

Fine
Chemicals

Polymers

Compounds

Application
Materials

Amortization

¥54

¥124

¥137

¥—

¥—

¥30

¥—

¥345

Unamortized balances

65

1

103

—

—

30

—

199

Millions of yen
2016
Corporate andOthers eliminations ConsolidatedPrinting Inks

Fine
Chemicals

Polymers

Compounds

Application
Materials

Amortization

¥42

¥133

¥164

¥ 4

¥—

¥30

¥—

¥373

Unamortized balances

73

128

240

—

—

60

—

501

36

Notes to the Consolidated Financial Statements(5) Gain on bargain purchase by reportable segment
There was no gain on bargain purchase for the fiscal year ended December 31, 2017.

Printing Inks

Fine
Chemicals

Polymers

Compounds

Application
Materials

¥—

¥—

¥78

¥—

¥—

Gain on bargain purchase

Millions of yen
2016
Corporate andOthers eliminations Consolidated

¥—

¥—

¥78

Note: Gain on bargain purchase comes from the acquisition of a subsidiary.

Note 23:
Related-Party
Transactions(1) Related-party transactions with the Company
Related-party transactions with directors, corporate auditors, major individual shareholders and others of theCompany for the fiscal years ended December 31, 2017, and 2016, are as follows:
Millions of yen
2017

Sort ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties Owned
and others
Direct5.61%
Indirect
7.81%

Rental ofbuildings
and others

Payment of rent
for buildings andothers (Note 4)

2,196

Security
deposit

1,758

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers

Purchaseof metallic
containers
and others

Purchaseof metallic
containers andothers (Note 5)

530

Trade
notes andaccounts
payable,and otheraccounts
payable234

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

55

Trade
notes andaccounts
receivable

24

Purchase of raw
materials andothers (Note 7)

5,388

Trade
notes andaccounts
payable,and otheraccounts
payable1,503

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

4,079

Trade
accounts
receivableand otheraccounts
receivable

1,618

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products

Owned
Direct4.50%

Owned
Direct
3.31%

Purchaseof rawmaterials
and others

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
4. “Rent of buildings and others” is determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” is determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” is determined on an arms-length transaction.
7. “Purchase of raw materials and others” is determined on an arms-length transaction.

37

Notes to the Consolidated Financial Statements

Millions of yen
2016

Sort ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties Owned
and others
Direct5.61%
Indirect
7.81%

Rental ofbuildings
and others

Payment of rent
for buildings andothers (Note 4)

2,083

Security
deposit

1,777

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers

Purchaseof metallic
containers
and others

Purchaseof metallic
containers andothers (Note 5)

481

Trade
notes andaccounts
payable,and otheraccounts
payable187

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

55

Trade
notes andaccounts
receivable

21

Purchase of raw
materials andothers (Note 7)

4,882

Trade
notes andaccounts
payable,and otheraccounts
payable1,142

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

3,741

Trade
accounts
receivableand otheraccounts
receivable

1,373

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products

Owned
Direct4.50%

Owned
Direct
3.31%

Purchaseof rawmaterials
and others

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
4. “Rent of buildings and others” is determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” is determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” is determined on an arms-length transaction.
7. “Purchase of raw materials and others” is determined on an arms-length transaction.

38

Notes to the Consolidated Financial Statements(2) Related-party transactions with the consolidated subsidiaries
Related-party transactions with directors, corporate auditors, major individual shareholders and others of theCompany for the fiscal years ended December 31, 2017, and 2016, are as follows:
Millions of yen
2017

Sort ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties Owned Rental ofand others
Indirect buildings
13.42% and others

Payment of rent
for buildings andothers (Note 4)

16 Security
deposit8

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers

Purchaseof metallic
containers andothers (Note 5)

620 Tradenotes andaccounts
payable,and otheraccounts
payable264

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

57 Tradenotes andaccounts
receivable

25

Purchase of raw
materials andothers (Note 7)

978 Tradenotes andaccounts
payable,and otheraccounts
payable186

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

478 Trade
accounts
receivableand otheraccounts
receivable

147

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products

Owned
Indirect
4.50%

Owned
Indirect
3.31%

Purchaseof metallic
containers
and others

Purchaseof rawmaterials
and others

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
4. “Rent of buildings and others” is determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” is determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” is determined on an arms-length transaction.
7. “Purchase of raw materials and others” is determined based on an arms-length transaction.

39

Notes to the Consolidated Financial Statements

Millions of yen
2016

Sort ofrelated party

Companies
where
directors
and their
close
relatives
owned amajority ofthe voting
rights(Note 3)

Capitalorinvestment

Principal business

Ownershipof votingrightsRelationwith relatedpartiesContents oftransaction

Amountof transaction(Note 1)

Account

Balanceat yearend(Note 2)Name

Location

NisseiReal-EstateCo., Ltd.

Chiyodaku, Tokyo

10

Rental of properties Owned Rental ofand others
Indirect buildings
13.42% and others

Payment of rent
for buildings andothers (Note 4)

16 Security
deposit8

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers

Purchaseof metallic
containers andothers (Note 5)

641 Tradenotes andaccounts
payable,and otheraccounts
payable172

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

56 Tradenotes andaccounts
receivable

24

Purchase of raw
materials andothers (Note 7)

690 Tradenotes andaccounts
payable,and otheraccounts
payable164

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

387 Trade
accounts
receivableand otheraccounts
receivable

132

NissinTradingCo., Ltd.

Chiyodaku, Tokyo

20

Sale, importand export ofpetrochemicalrelated products

Owned
Indirect
4.50%

Owned
Indirect
3.31%

Purchaseof metallic
containers
and others

Purchaseof rawmaterials
and others

Notes: 1. Excluding consumption taxes.
2. Including consumption taxes.
3. Yoshihisa Kawamura, a director of the Company, and his close relatives substantially own a majority of the voting rights.
Dainichi Can Co., Ltd. and Nissin Trading Co., Ltd. are fully owned by Nissei Real-Estate Co., Ltd.
4. “Rent of buildings and others” is determined based on an arms-length transaction in the neighboring area.
5. “Purchase of metallic containers and others” is determined based on an arms-length transaction.
6. “Sales of merchandise and finished goods, and offering of service” is determined on an arms-length transaction.
7. “Purchase of raw materials and others” is determined based on an arms-length transaction.

40

Management’s Report on Internal Control

1. Basic framework for internal control over financial reporting
Kaoru Ino, Representative Director, President and CEO, and Masayuki Saito, Representative Director, Executive Vice President and CFO of DIC Corporation (the “Company”), are responsible for designing and operatinginternal control over the Company’s financial reporting and have designed and operated internal control overfinancial reporting in accordance with the basic framework for internal control set forth in “On the Revision of
the Standards and Practice Standards for Management Assessment and Audit concerning Internal Control Over
Financial Reporting (Council Opinions),” issued by the Business Accounting Council of the Financial Services
Agency of Japan.
Internal control aims to achieve its objectives to a reasonable extent with the organized and integrated function of basic individual elements of internal control as a whole. Accordingly, due to the inherent limitations,
there is a possibility that misstatements may not be completely prevented or detected by internal controls overfinancial reporting.

2. Scope of assessment, the basis date of assessment and assessment procedures
The assessment of internal control over financial reporting for fiscal year 2017 was conducted as of December
31, 2017, which is the end of this fiscal year. The assessment was performed in accordance with relevant assessment standards generally accepted in Japan for internal control over financial reporting.
In conducting this assessment, we began by evaluating internal control which may have a material impact
on overall consolidated financial reporting (“company-level controls”) and, based on the results of this assessment, business processes to be assessed were selected. We then analyzed these selected business processes to
identify key controls therein that may have a material impact on the reliability of the Company’s financial reporting, after which we examined the design and operation of these controls. These procedures thus allowed
us to accurately evaluate the effectiveness of the Company’s internal control.
We determined the required scope of assessment of internal control over financial reporting for the Company and its consolidated subsidiaries and equity-method affiliates from the perspective of materiality or the
degree to which it may affect the reliability of financial reporting. Materiality of the impact which may affectthe reliability of financial reporting is determined based on potential quantitative and qualitative impact onfinancial reporting. In light of the results of assessment of company-level controls, we reasonably determined
the scope of assessment of process-level controls. Consolidated subsidiaries and equity-method affiliates whichwere concluded as immaterial taking into account the degree of quantitative and qualitative impact are notincluded in the scope for assessment of company-level controls.
With regard to the process-level controls, significant locations and business units to be tested were selectedbased on the changes in the scope of consolidation during the year, as well as on net sales for the previous
year, with locations and business units the combined sales volume of which reached approximately twothirds of consolidated net sales being defined as “significant.” The scope of assessment at these locations
and business units encompassed business processes relevant to net sales, accounts receivable-trade, accounts
payable-trade, inventories and manufacturing facilities included in property, plant and equipment as significant
accounts that may have a material impact on the business objectives of the Company. In addition, businessprocesses relating to (i) greater likelihood of material misstatements, and/or (ii) significant accounts involving
estimates and management’s judgment, were also identified as business processes having greater materiality,
taking into account their impact on financial reporting, and were included in the scope.

3. Results of the assessment
Based on the results of the assessment, we concluded that as of the end of the fiscal year ended December
31, 2017, the Company’s internal control over financial reporting was effectively maintained.

Kaoru Ino
Representative Director, President and CEO
DIC Corporation

41

Independent Auditor’s Report42

Independent Auditor’s Report43

Investor Information and Corporate Data
(As of December 31, 2017)

Investor Information
Common Stock

Corporate Data
DIC common stock is listed and traded on the Tokyo
Stock Exchange. There were 36,895 shareholdersof record on December 31, 2016. On the Tokyo Stock
Exchange, the high and low prices for each quarter ofthe years 2017 and 2016 were as follows:

Jan.–Mar.
Apr.–Jun.
Jul.–Sept.
Oct.–Dec.

2017
High
Low

2016
High
Low

¥4,365 ¥3,300
4,195 3,650
4,415 3,710
4,375 3,820¥3,310 ¥2,260
2,630 2,340
3,270 2,037
3,845 2,915*Stock price figures have been adjusted to account for the impact of aconsolidation of shares of common stock by a factor of 10 to 1 with
July 1, 2016, as the effective date.

Total Number of Shares Authorized 150,000,000 shares

Independent Public Accountants
Distribution of Shareholders

Japanese financial institutions

Other
ForeignJapanese
corporations
corporations

37.7%

17.5%

Paid-in Capital

Transfer Agent

Meeting of Shareholders
For Further Information, Contact:

Nissei Real-Estate Co., Ltd.
Japan Trustee Services Bank, Ltd.
(Trust Account)
Dainichi Can Co., Ltd.
The Master Trust Bank of Japan, Ltd.
(Trust Account)
JP MORGAN CHASE BANK 385632
The Dai-ichi Life Insurance Company,
Limited
Nissin Trading Co., Ltd.
Japan Trustee Services Bank, Ltd.
(Trust Account 4)
Aioi Nissay Dowa Insurance Co., Ltd.
Japan Trustee Services Bank, Ltd.
(Trust Account 9)

DIC Building, 7-20,
Nihonbashi 3-chome, Chuo-ku,
Tokyo 103-8233, Japan
Tel.: (03) 6733-3000
http://www.dic-global.com/
Principal Domestic Offices, Plants
and Laboratories (Nonconsolidated)
Number of Branch Offices: 2
Number of Plants:
9
Number of Laboratories:
1

Date of Foundation
Japanese
individual
investors
and others
11.9%

Treasury stock: 0.4%

Number of
Shares Owned Percentage(Thousands)of Total

Major Shareholders

Corporate Headquarters

20,628

27.8%

Financial instruments business operators: 4.7%

35-58, Sakashita 3-chome, Itabashi-ku,
Tokyo 174-8520, Japan

Number of Employees

100 shares¥96,556,692,787 (95,156,904 shares)
Deloitte Touche Tohmatsu LLC

Number of Unit Shares

Registered Address

5,310

5.60%

4,715
4,256

4.97
4.49

3,948
3,527

4.17
3.72

3,500
3,127

3.69
3.30

3,055
2,590

3.22
2.73

2,337 2.47
36,365 38.36%

Mitsubishi UFJ Trust and Banking Corporation
10-11, Higashisuna 7-chome, Koto-ku, Tokyo
137-8081, Japan
Our annual meeting of shareholders is held in March.
Corporate Communications Dept.
DIC Corporation
DIC Building, 7-20, Nihonbashi 3-chome, Chuo-ku,
Tokyo 103-8233, Japan
Tel.: (03) 6733-3033
E-mail: prir@ma.dic.co.jp

February 15, 1908
Date of Incorporation
March 15, 1937

（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

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

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