DIC REPORT 2017
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.

MissionVisionVisionColor & Comfort by Chemistry

SpiritSpiritDrive, 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
corporate proﬁle and sustainability report with the aim of presenting
a clear, easy-to-understand picture of the Group and its sustainability
initiatives. Beginning in 2017, 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.
The Group has published a simpliﬁed summary version of the report(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 : The designation “Asia–Paciﬁc region” as used in this report refers to Asia
(excluding Japan and Greater China) and Oceania.

DIC REPORT 2017

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.
Summary integrated
report (published annually)(printed publication)

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

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

Report on results of operations
and ﬁnancial condition(published annually)(PDF-form publication)

Scope of Reporting

In principle, this report provides information on DIC Corporation and consolidated
DIC Group companies worldwide. For information on the scope of reporting for
ESH-related initiatives, please visit the pertinent page of the DIC website.
WEB http://www.dic-global.com/en/csr/pdf/dic_report_scope_en_2017.pdf

DIC Global Website

Reporting Period

Real-time information
WEB

Fiscal year 2016 (January 1–December 31, 2016)

Date of Publication

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

June 2017 (The next report is scheduled for publication in June 2018.)

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, theInternational Organization for Standardization’s standard for social responsibility,
released in 2010; Japan’s Responsible Care Code; and the Global Reporting
Initiative (GRI)’s G4 Sustainability Reporting Guidelines.

Contents
3
5
8
9
11
12

The DIC Group: A Global Powerhouse
A Message from the President
TOPIC Steady Progress in Strategic Investments
Financial and Nonﬁnancial Information
Overview of Materiality Analysis
The DIC Group’s Business Portfolio

21

Printing Inks
Fine Chemicals
Polymers
Compounds
Application Materials

23

Special Feature

13
15
17
19

24
28
31

36
37
39

44

Sustainability Report

47

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 2017 and ISO 26000: A Comparison
DIC Report 2017 and G4 Sustainability Reporting Guidelines: A Comparison

49
55
57
96
99
108
111
114
119
123
128
129

Product Development for a Sustainable Society

132

Super Engineering Plastics
134
Environment-Friendly Polyurethane Resins for Use in Artiﬁcial
135
and Synthetic Leathers
136
IZANO Folding Emergency Helmets

DIC Group Milestones
Third-Party Veriﬁcation
Third-Party Opinion Regarding DIC Report 2017
Corporate Data

Financial Section

TOPIC

1-44

Helping Improve Food Packaging to Extend Product Shelf Life

Directors, Corporate Auditors and Executive Ofﬁcers
Corporate GovernanceCover Design
DIC REPORT 2017

DIC Report 20172

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)

1,000

Registered name:800

DIC Building, 7-20,
Nihonbashi 3-chome,
Chuo-ku, Tokyo 103-8233,
Japan
February 15, 1908
March 15, 1937
¥96.6 billion
20,481(Nonconsolidated: 3,313)

820.0

751.4
’16

705.6

’15

703.8

830.1

0

Operating Income（FY）(Billions of yen)60
Corporate headquarters (Tokyo)
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,
2016. Net sales and operating income arefor fiscal year 2016.

50
40
30
20

54.2

)

51.1

(

174 Domestic: 31
Overseas: 143’12 ’13 ’14

200

41.1

Number of subsidiaries
and affiliates:

400

40.2

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

600

38.5

Corporate headquarters:

10
0’12 ’13’14 ’15 ’16（FY）

Sun Chemical’s
headquarters (United States)

Global Network
DIC has 174 companies in 63 countries andterritories around the world.

53

Europee

ChinaaEurope and Africa

32

Sun Chemical Group and others

Net sales¥167.8 billion

Operating income¥7.8 billion

5

14

31

South &
Asi
sia
ia
ia
Southeast Asia
Asia and Oceania(Excluding Japan)

AfricaAf
A
fi

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

Net sales¥145.0 billion

Operating income¥14.6 billion

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

North
America
North, Central andSouth America
Sun Chemical Group and others

Net sales

Japan

22

¥133.6 billion

Operating income¥7.3 billionJapan
DIC Corporation, DIC Graphics
Corporation and others

2

Net sales¥305.0 billion

Operating income¥29.6 billion

OceaniaOcO
Oceceeaance
ceananiiaaDIC Asia Pacific Pte Ltd (Singapore)

DIC Report 2017

3

Central & Souththth
America

15

Breakdown of Fiscal Year 2016 Net Sales by Region

Breakdown of Fiscal Year 2016 Operating Income by Region

Asia and Oceania

Asia and Oceania

19.3%

24.6%

North, Central andSouth America

17.8%￥751.4billionJapan

North, Central andSouth America

40.6%

￥54.2

12.4%

Europe and Africa

Europe and Africa

22.3%

13.1%

billion

Japan

49.9%

Note: Operating income as used here includes eliminations (approximately ¥5.1 billion). Accordingly,
these percentages do not represent shares of reported operating income.

Principal Global R&D Sites
St. Mary Cray
Technical Centre(United Kingdom)

Printing Inks
Technical Center—
China

Cincinnati (United States)

Polymer Technical Center—
China

Qingdao DIC
Finechemicals(PRC)

Central ResearchLaboratories(Japan)Eurolab (Germany)

Polymer Technical Center—
Asia Pacific (Thailand)

Printing Inks Technical Center—
Asia Pacific (Thailand)

DIC Report 20174

DIC/Earthrise Algae
Research Center(United States)

Carlstadt (United States)

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

Yoshiyuki Nakanishi

Targeting growth over thelong term by providing
products that accurately
address social imperatives
Building Robust Corporate Health and
Growth Drivers
The DIC Group is a leading multinational chemicals organization
comprising 174 companies in 63 countries and territories.
Printing inks account for approximately 30% of consolidated
sales, while organic pigments, the principal raw material
used in printing inks, account for around 20%. We are theworld’s leading manufacturer of polyphenylene sulfide (PPS)
compounds—key engineering plastics—with a global market
share of approximately 27%. We also supply a wide range of
GLVWLQFWLYH¿QHFKHPLFDOVSURGXFWVLQFOXGLQJSRO\PHUVDQGOLTXLG
crystals (LCs) that contribute to the development of society
and our customers. Having formulated a growth scenariothat includes concrete long-term targets for consolidated net
sales and operating income of ¥1,000 billion and ¥100 billion,
UHVSHFWLYHO\LQ¿VFDO\HDUZHDUHFXUUHQWO\LPSOHPHQWLQJ
a variety of measures aimed at powering further growth.
In printing inks and synthetic resins, both businesses withstable earnings bases, we are shifting to a way of conducting
business that will facilitate sustainable growth. To this end,
we are taking steps to optimize production configurations
and reduce costs in mature markets, notably North America,
Europe and Japan, on the assumption that appropriate demand
will decline. At the same time, we are emphasizing a shift tosustainable products such as waterborne and ultraviolet (UV)curable resins and accelerating the expansion of our operations

DIC Report 20175

Expanding Efforts andPicking Up the Pacein promising markets, particularly in Asia, with the goal ofreinforcing our already substantial global market presence.
We are concentrating our allocation of management resources
on a global basis in businesses that we expect to drive growth,
notably thin-film transistor (TFT) LCs, functional pigments,
PPS compounds and packaging materials. With demand for
packaging materials rising, we built production facilities for
OLTXLGLQNVIRUIRRGDQGEHYHUDJHSDFNDJLQJLQ,QGRQHVLDDQG
Turkey. We also built a PPS compounds production facility
in the People’s Republic of China (PRC), the automobile
industry’s principal production base. All three of these facilities
commenced operations in fiscal year 2016. In the inkjet inks
business, we are promoting the development of new productsthat will facilitate our entry into promising new areas.
In addition, we are expediting efforts to create next-generation
EXVLQHVVHVWKDWUHVSRQGWRHYROYLQJUHTXLUHPHQWVLQDUHDVVXFKas electronics materials, packaging and healthcare. In light ofincreasing social imperatives pertaining to environmental issues,
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others, we are leveraging our proprietary technologies andingenuity to provide high-value-added products to customers
around the world.
Through these and other efforts, we are working to ascertain
the needs of individual businesses to build a balanced,
diversified business portfolio, thereby ensuring a robust
earnings structure. By remaining abreast of social imperatives
and realizing distinctive growth drivers that stimulate demand,
ZHDUHFRQ¿GHQWWKDWWKLVZLOOHQDEOHXVWRDFKLHYHRXUWDUJHWV
IRU¿VFDO\HDU

Fiscal year 2017, the second year of DIC108, is an important
year for us strategically. When we kicked off DIC108, we
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health—evidenced by a debt-to-capital ratio*2 of 47%, exceeding
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that is, to adopt an active stance toward driving growth. To this
HQGZHEXGJHWHGELOOLRQRYHUWKUHH\HDUVWRVWUDWHJLF
LQYHVWPHQWVLQFOXGLQJLQPHUJHUVDQGDFTXLVLWLRQV 0 $V 
In January 2017, we announced that we had entered into a
capital and business alliance with Taiyo Holdings Co., Ltd.,
which is engaged in the manufacture and sale of specialty
inks, investing ¥24.9 billion. Taiyo Holdings is one of the world’s
leading manufacturers of solder resist* 3 for printed wiringboards (PWBs). We supply the company with materials used inthese products, including polymers and pigments. In addition
to expanding sales of existing products, we look forward tocapitalizing on synergies yielded by the alliance to promote theefficient development of next-generation products, including
materials for PWBs. Looking ahead, we will continue to actively
SXUVXH 0 $V WKDW ZLOO IXUWKHU SURSHO JURZWK DQG ZLOO PRYH
appropriately and swiftly on a number of potential deals currently
being explored.
   ,Q WKH DUHD RI 5 ' ZH DUH EUHDNLQJ IUHH RI IRFXV RQ
exclusively independent efforts, making use of venture capitaland other external resources through open innovation toaccelerate the creation of new businesses. In January 2017,
we commenced construction of a new technical building at
the Central Research Laboratories in Japan with the goal of
ensuring the effectiveness of efforts to grow technologies in
VXFKFXWWLQJHGJH¿HOGVDVSULQWHGHOHFWURQLFVRecord-High Operating Income andOrdinary Income in Year One of DIC108
In fiscal year 2016, the first year of our current medium-term
management plan, DIC108, we reported consolidated net sales
RIELOOLRQ2SHUDWLQJLQFRPHDPRXQWHGWRELOOLRQZKLOHRUGLQDU\LQFRPHUHDFKHGELOOLRQERWKUHFRUGKLJKVNet income attributable to owners of the parent was ¥34.8
ELOOLRQ5HWXUQRQHTXLW\ 52( ZDV'LYLGHQGV 1 were¥100.00 per share, an increase of ¥20.00, while the payout ratio
was 27.3%.

The “Color & Comfort”
Brand Slogan
Healthcare is a crucial area in which we are working to createnext-generation businesses under DIC108 by capitalizing on
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viable technologies for mass managed cultivation of the edible
algae Spirulina in 1977, we have launched a variety of Spirulinaderived health food products and supplements. In recent years,
we launched Linablue ®, a natural blue food coloring. In 2013,
Linablue ® became the first natural blue food coloring to beapproved by the U.S. Food and Drug Administration (FDA).
Underscored by a rapid shift in consumer preference from

*1 $GMXVWHGWRUHÀHFWWKHLPSDFWRIDFRQVROLGDWLRQRIVKDUHVLPSOHPHQWHGRQ-XO\
*2 Debt-to-capital ratio (D/C) ratio: Interest-bearing debt / (Interest-bearing debt + Net assets)*3 Solder resist is an insulating materials used to protect circuit patterns on PWBs.

Quantitative Targets

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(Billions of yen/%)

Net sales
Operating income
Net income*1
ROE
Ordinary investments
Strategic investments (M&As, etc.)
D/C ratio
Dividend payout ratio

2015
Actual2016
Target2016
Actual2017
Target¥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%

*1 Net income attributable to owners of the parent*2 “2017 Forecast” figures are official forecasts published in May 2017.

DIC Report 201762017
Forecast*2¥790.0
58.0
37.5
13.1%
¥120.0¥150.0Around 50%
Around 30%

2018
Target¥960.0
65.0
40.0
12.0%

to, among others, help reduce the use of substances that
harm the environment and ensure the effective managementof chemical substances. We will also continue to develop
and launch products with a lower environmental impact that
contribute to the resolution of key social imperatives, including
water-based inks, waterborne resins, LC materials that use lesselectric power and PPS compounds for use as an alternative tometal materials in automobiles.
As a chemicals company, we understand that safety is ourhighest priority. Accordingly, we continue to focus efforts on
the creation of frameworks to mitigate the impact of disasters
and prevent the occurrence of occupational accidents andprovide safety training. To reinforce safety in the workplace, weoffer hands-on safety training, which seeks to foster awarenessof latent risks, as a component of training for new employees,
both in Japan and overseas.
We also understand that creating work environments thatempower diverse employees to exercise their individuality andreach their full potential is essential to growth for employees
and for the DIC Group as a whole. As part of our efforts
to promote diversity across the Group, we employ a broad
spectrum of individuals without regard to considerations such as
gender, nationality, physical limitation or age. We also endeavor
to foster a corporate culture that draws on our understanding
and respect for diversity to produce creative ideas, as well as
to incorporate the concept of diversity into management, thus
creating workplaces that enhance job satisfaction.
DIC108 also positions the provision of returns to shareholders
as an important priority. We will continue working to maintaina balance among financial health, investment in growth andshareholder returns and have set a target for dividend payout
ratio of 30% over the three years of the plan. To this end,
we will shift our emphasis to income performance–linked
dividends based on a fundamental commitment to maintaining
stable returns.
Looking ahead, we will continue to diligently implement
the strategies outlined in DIC108 to expand and rationalize
businesses that we expect to drive growth and promoterationalization, as we work to achieve our best performance yetin terms of operating income, ordinary income and net income
attributable to owners of the parent. In these and all our efforts,
we look forward to the ongoing support and guidance of ourmany stakeholders.

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and Europe, Linablue ® continues to attract attention from theperspectives of food safety and security.
Linablue ® and our printing inks and pigments businesses
underscore our affinity for businesses involving “color.” We
KDYHLQWURGXFHGDQHZEUDQGVORJDQ³&RORU &RPIRUW´ZLWKthe aim of boosting recognition of the DIC name and bolstering
corporate value and, since fiscal year 2016, have implemented
an ambitious branding program. In October 2016, we introduced
a new television advertisement in Japan that communicatesthe message of the DIC brand. We are currently implementing
a variety of important branding initiatives in the 63 countries
and territories in which the DIC Group has operations to bolster
awareness of the value that we provide to stakeholders and indoing so to help instill a greater sense of solidarity across the Group.

Pursuing Sustainable Management andRealizing Record-Breaking Operating Results
Recognizing that incorporating environmental, social andgovernance (ESG)-related considerations is essential to
our ability to provide products and services that support
communities and industries, we have established key
performance indicators (KPIs) for critical initiatives. Looking
ahead, we will continue working to support our businessfoundation and ensure sustainable growth by promoting efforts

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

Growth Scenario and Positioning of DIC108

Ensure the sustainability of businesses
with stable 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 2017

7

2021

2022

2023

DIC114

Businesses that will
drive growthBusinesses withstable earnings bases
2024

TOPIC

Steady Progress in Strategic Investments,Q¿VFDO\HDU',&NLFNHGRIIDQHZPHGLXPWHUPPDQDJHPHQWSODQ',&+DYLQJPDGHDFHUWDLQGHJUHHRISURJUHVVLQUHFHQW\HDUVWRZDUG
LPSURYLQJLWV¿QDQFLDOKHDOWKDNH\PDQDJHPHQWFKDOOHQJHWKH&RPSDQ\RQFHDJDLQDGRSWHGDQDFWLYHVWDQFHWRZDUGGULYLQJJURZWKXQGHUWKH
SODQEXGJHWLQJELOOLRQIRUVWUDWHJLFLQYHVWPHQWVLQFOXGLQJLQ0 $VEHWZHHQ¿VFDO\HDUDQG¿VFDO\HDU$FFRUGLQJO\WKH&RPSDQ\
has been on the lookout for investment opportunities that align with its fundamental DIC108 goals, which are to stabilize the earnings of its corebusinesses, expand businesses that will drive growth and create next-generation businesses.

1

DIC enters capital and business alliance with Taiyo Holdings, transforming thelatter into an equity-method subsidiary

2Q-DQXDU\',&DQQRXQFHGDFDSLWDODQGEXVLQHVVDOOLDQFHZLWKTokyo-based Taiyo Holdings Co., Ltd., as a result of which Taiyo Holdings
EHFDPHDQHTXLW\PHWKRGVXEVLGLDU\7RWDOLQYHVWPHQWE\',&DPRXQWHG
to ¥24.9 billion.
Taiyo Holdings is involved in the manufacture and sale of chemical
products for use in PWBs and other electronics components and insemiconductors. Of note, the company commands a top-class share of the
global market for solder resist, which is critical to the production of PWBs.
DIC sees the electronics market as particularly encouraging, primarily
because it offers potential for stable growth into the future and aconsiderable scope for leveraging DIC’s proprietary technologies. In
addition to providing synthetic resins, pigments and LCs, among others, toelectronics manufacturers, DIC is actively promoting the development of0,' DUWLVW¶VUHQGHULQJ 0,'VGRQRWUHTXLUHVXEVWUDWHVRUKDUQHVVHVDQGFDQ
thus be made smaller, lighter and thinner than conventional PWBs. The market
materials for printed electronics, thermal materials and other high-valuefor these components is expected to expand in the future.
added offerings that capitalize on its core technologies.
In addition to bolstering sales, the agreement brings together DIC’s materials development capabilities, which draw on core technologies
FXOWLYDWHGRYHUPDQ\\HDUVDQG7DL\R+ROGLQJV¶¿UPXQGHUVWDQGLQJRIPDUNHWQHHGV²XQGHUSLQQHGE\LWVH[WHQVLYHVXSSO\FKDLQHQFRPSDVVLQJHYHU\WKLQJIURPVROGHUUHVLVWWR3:%V²DQGPDUNHWLQJSURZHVVWRSURPRWHWKHVZLIWDQGHI¿FLHQWGHYHORSPHQWRISURGXFWVIRUQHZ3:%VLQFOXGLQJPROGHGLQWHUFRQQHFWGHYLFHV 0,'V DQGRWKHUQH[WJHQHUDWLRQPDWHULDOV7KHWZRFRPSDQLHVZLOOFRQWLQXHZRUNLQJWRPD[LPL]HV\QHUJLHVZLWKWKHDLPRIGULYLQJJOREDOEXVLQHVVJURZWKDQGH[SDQGLQJSUR¿WV

2

Sun Chemical and Alliance Holding Company form joint venture that is the largest
printing inks manufacturer on the Arabian Peninsula

2Q0DUFK6XQ&KHPLFDO&RUSRUDWLRQFRQFOXGHGDQDJUHHPHQW
with Alliance Holding Company Ltd to form a joint venture combining Sun
Chemical’s operations on the Arabian Peninsula with the operations ofAlliance subsidiary Ink Products Company, Ltd., a leader in the region’s
printing inks market based in Riyadh, Saudi Arabia. Sun Chemical’s stake
LQWKHQHZFRPSDQ\LV
Recent years have seen a tapering of demand for publishing inks, owing
to the move toward digital media. Accordingly, the focus of the global
printing inks market has shifted to packaging inks, which are expected
to continue seeing growth in advanced economies. Packaging inks
account for more than 70% of printing inks sold on the Arabian Peninsula,where the annual market for such inks is projected to continue growing
6XQ&KHPLFDO¶VKHDGTXDUWHUVLQWKH8QLWHG6WDWHV
DWEHWZHHQDQGIRUWKHIRUHVHHDEOHIXWXUH6XQ&KHPLFDOWKXV
recognizes the region as important from a strategic perspective.
7KHHVWDEOLVKPHQWRIDMRLQWYHQWXUHEULQJVWRJHWKHU,QN3URGXFWV¶PDUNHWLQJFDSDELOLWLHVZKLFKUHÀHFWLWVIDPLOLDULW\ZLWKWKHPDUNHW
and Sun Chemical’s products and technologies. Sun Chemical and Ink Products will move with speed to maximize resulting synergies to
SURYLGHWRSTXDOLW\SURGXFWVDQGVXSHULRUVHUYLFHVZLWKWKHDLPRIGULYLQJIXUWKHUJURZWK6XQ&KHPLFDODQG,QN3URGXFWVERDVWDFRPELQHG
regional market share of roughly 30%. By leveraging the two companies’ strengths, the new joint venture will strive to lift this above 40% by¿VFDO\HDU

DIC Report 20178)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
Cash provided by operating activities
Free cash flow

Operating margin (%)

Net sales(Billions of yen)

900

830.1

Operating income(Billions of yen)

820.0

800

751.4
703.8

705.6

700

7.2%
6.2%

5.5%

600

(Billions of yen)

70

80

5.7%
4.9%

62.5

70

60

60

50

500

50

400

40

46.4
41.4

40

33.9
29.1

30

30.3

30

300
200

40.2

38.5

51.1

41.1

10

10

2012

2013

2014

2016 (FY)

2015

0

0
2012

Net Income Attributable to Owners of the Parent and ROE

19.1

19.0

17.7

100
0

20

20

54.2

24.0

2013

2014

2016 (FY)2015

Capital Expenditure

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

40

36.3

(Billions of yen)

34.0

50

32.1
29.4

30
40

27.6
（%）
30

30

20

20

16.1

16.0

20

14.6

12.9

11.3

10

10

10

0

19.1

26.8

25.2

37.4

34.8

2012

2013

2014

2015

2016 (FY)

0

0

2012

Net assets

2014

2015

2016 (FY)

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

Net Assets, Interest-Bearing Debt and Debt-to-Capital Ratio*
Interest-bearing debt

2013

Interim dividend

Debt-to-capital ratio (%)

Payout ratio (%)

Year-end dividend(Billions of yen)

400

25

22.4

299.1

66.3

274.2

241.3

47.2

44.0

218.9

276.7

289.9

307.0

20.5
15

40

(Yen)

100

100

30

160.7

20

20.5

50

49.8

200

60

259.5

57.7

100

27.3

（%）
70

315.6
300

（%）
30

28.8

20

50

60

60

60

153
30

268
30

252
30

40
374
40

10
0

2012

2013

2014

2015

2016 (FY)

10

80

0

0

30

30

30

2012

2013

2014

2015

60
5

40
2016 (FY))LJXUHVKDYHEHHQDGMXVWHGWRUHÀHFWWKHLPSDFWRIWKHFRQVROLGDWLRQRIVKDUHV ,Q¿VFDO\HDU',&SXUFKDVHGDQGUHWLUHGWUHDVXU\VKDUHV

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

DIC Report 2017

90

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(Liters/metric tonne)

400

200

1,000,000

345

900,000

346

338

338
154

(Kiloliters)

800,000

723,000

700,000

300

659,000

657,000

Energy consumption per unit of production

Kg CO 2 /metric tonne

148

150

288,000

286,000

150
150

500,000

659,000

600,000

400,000
200

500,000

100

322,000
300,000

294,000

400,000
300,000

200,000

50

100
200,000
100,000
100,000
0

2013

2014

2015

2016

(FY)

0

0

2013

%DVH\HDU)LVFDO\HDU

20142016 (FY)20150

%DVH\HDU)LVFDO\HDU

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

Occupational Accident Frequency Rate (DIC Corporation)(Rate)

100

1.50

DIC

Subsidiaries in Japan

2014

2015

90
80

1.00

70

57%

60

57%

50

0.50

56%
52%

53%
0.00

40

2010

30

2011

2012

2013

2016 (FY)

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

20
10Frequency rate ＝

0

2012

2013

2014

2015

2016 (FY)

Number of deaths or injuries due to occupational accidents

× 1,000,000

Total work hours

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

1RWH2ZLQJWRWKHLQWURGXFWLRQRIDQHZ6$3HQWHUSULVHUHVRXUFHSODQQLQJ (53 V\VWHPLQWKHPHWKRGXVHGWRFDOFXODWHHQYLURQPHQWIULHQGO\SURGXFWVKDVFKDQJHG

Female Employees in Management Positions (DIC Corporation)

Average Years of Employment (DIC Corporation)(Number of people)（%）

5

Male employees(Years)Average years of employment in fiscal year 2016
Male employees:

40

Female employees
417.8 years Female employees: 18.5 years Overall:18.2 years

28

25

24

3

20

19
2

15

30

3.1%

20

20

2.6%

16
2.2%
2.0%
1.7%

10

10

1

5
0

0
1994

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

10

2012

2013

2014

2015

2016 (FT)0Overview of Materiality Analysis
The DIC Group has abstracted and analyzed material issues, that is, issues with the potential to affect its performance, and has
LGHQWL¿HGWKRVHRISDUWLFXODUVLJQL¿FDQFHDQGLVWDNLQJVWHSVWRHIIHFWLYHO\DQGHI¿FLHQWO\DGGUHVVWKHVHLVVXHV*XLGHGE\LWV',&
PHGLXPWHUPPDQDJHPHQWSODQDQGE\LWVORQJWHUPJURZWKVFHQDULRWKH*URXSZLOOFRQWLQXHZRUNLQJWRHQVXUHWKDWWKHVHHIIRUWVDUHEHQH¿FLDOWRWKHPDQDJHPHQWRILWVEXVLQHVVHV

1. Materiality Analysis Process1

Abstraction of Issues',&DEVWUDFWHGLVVXHVRISDUWLFXODUVLJQL¿FDQFHWRWKH*URXSEDVHGRQWKH*OREDO5HSRUWLQJ,QLWLDWLYH *5, ¶V*6XVWDLQDELOLW\5HSRUWLQJ*XLGHOLQHVLWVRZQVXVWDLQDELOLW\WKHPHVDQGLVVXHVGHOLQHDWHGLQ',&RU7KH',&:$<RUDGGHGE\6XVWDLQDELOLW\&RPPLWWHHPHPEHUV7KH*URXSKDVGLYLGHGWKHVHLVVXHVLQWRWKUHHJURXSLQJV(QYLURQPHQWDO ( VRFLDO 6 DQGJRYHUQDQFH LQFOXGLQJHFRQRPLFLVVXHV  * ZKLFKLWKDVFRPELQHGLQWRJHQHUDOPDWHULDOLW\LVVXHV
2Materiality Analysis

6XVWDLQDELOLW\&RPPLWWHHPHPEHUVKHDGVRIEXVLQHVVXQLWVWKDWVSHDUKHDGWKHLPSOHPHQWDWLRQRILQLWLDWLYHVUHODWHGWRVXVWDLQDELOLW\WKHPHVDQG
VHQLRUPDQDJHPHQWIURP',&*URXSEXVLQHVVXQLWVLQWKH8QLWHG6WDWHV$VLDDQGHOVHZKHUHDVVHVVHGDEVWUDFWHGLVVXHVIURPWKHWZLQSHUVSHFWLYHV
RILPSRUWDQFHWR',&*URXSEXVLQHVVHVDQGLPSRUWDQFHWRVWDNHKROGHUV%DVHGRQWKHUHVXOWVRIWKLVSURFHVVDQGKDYLQJFRPSUHKHQVLYHO\UHYLHZHG
LVVXHVLGHQWL¿HGE\H[WHUQDODVVHVVPHQWRUJDQL]DWLRQVWKH&RPSDQ\GHWHUPLQHGPDWHULDOLW\WRWKH',&*URXS
(a) Material importance to DIC Group businesses
',&DVVHVVHGLVVXHVZLWKWKHSRWHQWLDOWRKDYHDQLPSDFWRQWKH',&*URXSJLYLQJFRQVLGHUDWLRQWRERWKSRWHQWLDOULVNVDQG
EXVLQHVVRSSRUWXQLWLHV(b) Material importance to stakeholders
L  7KH',&*URXSUHFRJQL]HVILYHNH\VWDNHKROGHUJURXSV FXVWRPHUVVXSSOLHUVORFDOFRPPXQLWLHVDQGVRFLHW\HPSOR\HHVDQGLQYHVWRUV $VVHVVPHQWVORRNHGDWOHYHORILQWHUHVWRQWKHSDUWRIVWDNHKROGHUVDQGSRWHQWLDOLPSDFW
LL 7RUHLQIRUFHWKHUROHRIREMHFWLYHH[WHUQDOFULWHULDPDWHULDOLW\LVVXHVLGHQWL¿HGE\WKH',&*URXSZHUHDQDO\]HGE\NH\LQGHSHQGHQW(6*LQYHVWPHQWDVVHVVPHQWSURJUDPVRUJDQL]DWLRQVQDPHO\WKH'RZ-RQHV6XVWDLQDELOLW\,QGLFHV '-6, )76(0&6,WKH6XVWDLQDELOLW\$FFRXQWLQJ6WDQGDUGV%RDUG 6$6% RIWKH8QLWHG6WDWHVDQG6XVWDLQDO\WLFV

2. The DIC Group’s Materiality Matrix
The DIC Group’s Materiality Matrix
Very highClassification: ●Environmental (E) ■Social (S)◆Governance (including economic issues) (G)● Contribution to the realizationof a low-carbon society (P24, P80)
● Promotion of products and services that
contribute to environmental protection(P28, P114)■ Promotion of occupational healthand safety (P62)◆ Innovation through compounding(P117)

Importance to stakeholders' , &  K D V  R U J D Q L ] H G  W K H  L V V X H VDEVWUDFWHG DQG DVVHVVHG WKURXJK
WKH SURFHVV RXWOLQHG DERYH LQWR LWVRZQ  JHQHUDO PDWHULDOLW\ LVVXHVThe materiality of each of theseissues was scored and a materiality
PDWUL[FUHDWHGE\SORWWLQJWKHVFRUHVX V L Q J  W Z R  V F D O H V  U H S U H V H QW L Q Jimportance to DIC Group businesses
DQG LPSRUWDQFH WR VWDNHKROGHUV,QIRUPDWLRQ RQ WKH SURJUHVV RI WKH*URXS¶VPDWHULDOLW\UHODWHGLQLWLDWLYHV
LQ ILVFDO \HDU  FDQ EH IRXQG
at the end of each section of the
6XVWDLQDELOLW\ 5HSRUW FRPSRQHQW
of both the complete and summary
SULQWHG YHUVLRQRI',&5HSRUW

■ Respect for human rights■ Promotion of diversity■ Harmony with and contribution

to society■ Enhancement of brand strength/

reputation (evaluation)■ Contribution to colorful and comfortable
lifestyles◆ Provision of solutions◆ Promotion of open innovation● Practical application of measures

to reduce environmental impact (P69)◆ Response to economic globalization/

efforts to reinforce governance(P39, P47, P52)
◆ Promotion of supply chain
management (P93, P108)◆ Creation of next-generation
businesses (P111, P114)■ Ability to foster and strengthen

global human resources (P100)◆ Improvement of quality management

capabilities (P96)◆ Efforts to reinforce marketing (P111)◆ Efforts to strengthen global technology

development capabilities (P116)■ Efforts to address needs

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

businesses

High
High

Very highImportance to DIC Group businesses
DIC Report 201711

Ensuring Sustainable Growth

The DIC Group’s Business Portfolio
The DIC Group has capitalized on its capabilities in organic pigments and synthetic resins, the principal material for printing
LQNVWREXLOGDEURDGSRUWIROLRRIPDWHULDOVDQG¿QLVKHGSURGXFWV7RGD\WKH*URXSFODVVL¿HVLWVRSHUDWLRQVLQ¿YHEXVLQHVVVHJPHQWV²3ULQWLQJ,QNV)LQH&KHPLFDOV3RO\PHUV&RPSRXQGVDQG$SSOLFDWLRQ0DWHULDOV²WKURXJKZKLFKLWSURYLGHVSURGXFWVDQGVROXWLRQVWKDWUHVSRQGWRWKHQHHGVRIVRFLHW\DQGLWVFXVWRPHUVDQGDGGFRORUDQGFRPIRUWWROLIH
Printing InksThe DIC Group’s Business Segments
and Target Markets

Net sales …………

Printing Inks

¥365.2 billion¥18.4 billion

Operating income …

Page 13

Target markets

Fine Chemicals
Net sales …………

Electronics

Automobiles
Packaging¥128.2 billion¥14.4 billion

Operating income …

EnergyDigitalprinting
printing

Livingg
Coatings
ings
gen
environments
nvironmen
nts

Page 15

Infrastructureebuilding

Polymers

Application
Materials

Business segments

Printing Inks

Fine Chemicals

Net sales …………

Polymers¥180.9 billion¥19.6 billion

Operating income …

Fine
Chemicals

Polymers

Compounds

Page 17

Compounds

Compounds¥61.1 billion¥5.0 billion

Net sales ………………

Operating income … …

Page 19
Dispersion

Polymer design

Organic
molecular design
n

Bas
Basic
asic technologies
as
tec
te
eecchnolo
hnologhhnnnooolooogggie
gies
es
es

Applicability
assessment(Coating/printing/molding)(Coatin(Co

Application Materials

光学and・色彩color
Optics

Net sales ………………

Application Materials¥55.7 billion¥1.9 billion

Operating income ……

Page 21

Breakdown of Fiscal Year 2016 Net Sales by Segment

Breakdown of Fiscal Year 2016 Operating Income by Segment

Application Materials

Application Materials

7.0%

Printing Inks

46.2%

Compounds

7.7%
Polymers

22.9%¥751.4billionPrinting Inks

3.2%

31.0%

Compounds

¥54.2

8.4%
Fine Chemicals

16.2%

billionPolymers

33.1%
DIC Report 2017

12

Fine Chemicals

24.3%

Note: Fiscal year 2016 net sales and operating
income as used here include intersegment
WUDQVDFWLRQV)RUWKLVUHDVRQDQGEHFDXVHRIWKHH[LVWHQFHRIWUDQVDFWLRQVFODVVL¿HG
as “others,” which are not attributable to
UHSRUWDEOHVHJPHQWVWKHVH¿JXUHVGLIIHU
from reported net sales and operating
LQFRPHPrinting Inks

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

This segment focuses on printing
inks, DIC’s mainstay businesssince its establishment. A global
market leader, DIC boasts anextensive product portfolio ranging
from publishing inks to inks andadhesives for packaging, enabling
it to respond to the needs ofcustomers worldwide.

Key
Products

Printing Inks Product Division
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 food safety 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

FY2015412.6(Billions of yen)
70.5

For more information, please see Segment Results on page 136.

FY2016FY2017 (Forecast)

Operating Income
and Operating
Margin

365.2

379.3

(Billions of yen / %)

68.5

61.6

FY2015FY2016

19.0

18.4

5.3
273.1

232.7

79.8

(11.8)Japan(8.9)
The Americas
and Europe

5.2％

5.0％

95
10.5

80.8

19.6
5.5

4.8
4.6％

241.2

FY2017 (Forecast)

78.4

3.1

8.4

9.5

5.1

4.6

(8.7)
Asia and
Oceania

EliminationsJapan

DIC Report 201713

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
plan, which ran from fiscal year 2013 through fiscal year 2015, the DIC
Group has sought to strengthen the printing inks business by advancing
three core strategies, which are to further rationalize operations in mature
markets, to augment operations in promising emerging economies andto shift its business’ focus to packaging inks, for which demand is risingworldwide. Under DIC108, the Group is taking decisive steps to reinforce its
presence in emerging economies, keeping a close eye on demand trends.
At the same time, the Group is working to optimize its regional production
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 Asianmarkets such as the Philippines and Vietnam. In both emerging
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 2016environmental impact. The period also saw the adoption by
manufacturers in Japan and overseas of a new gas-barrier
adhesive that improves the ability of laminated packaging,
thereby helping extend the shelf life of food products, earninghigh marks from both customers and brand owners.

DIC continued to invest in the integration and rationalizationof its production facilities in mature markets, including Japan,
North America, Europe and Oceania, and to accelerate theshift of its focus toward packaging inks. Efforts to augment
operations in promising emerging economies included thestart up of a new mother plant in Turkey and the completionof a new production facility in Indonesia. Efforts to reinforce
packaging inks operations emphasized product development.
During the period, the Company developed, launched andtook active steps to elevate sales of, among others, a waterbased flexo ink that delivers a print quality comparable
to that of gravure inks and accommodates increasingly
stringent regulations governing volatile organic chemical(VOC) emissions in Asia, notably in the PRC and India, as
well as a new solvent-free low-temperature curing adhesive
and a water-based functional coating, among others. In theareas of solvent-based inks and adhesives, the Group also
promoted sales of new high-solid products with a reduced

Materials printed with water-based printing inks

New Production Facilities Completed in Promising Markets

HIGHLIGHT

In light of a tapering of demand for publishing inks, news inks and other inks for paper-based print media, owing to the rising popularity of digital media, the DIC Group
is stepping up efforts to shift its focus to inks used on packaging for food products, demand for which is expected to expand substantially, particularly in emerging
economies. To this end, the Group is pressing ahead with efforts to establish production facilities in key markets. A new state-of-the-art mother plant in Turkey began
operations in June 2016, while a new facility in Indonesia that bolsters production capacity in that country commenced operations in July 2016.

Left: Mother plant in
Izmir, Turkey
Right: Production facility in
Surabaya, Indonesia

DIC Report 201714

Fine Chemicals

Optronics Materials andOther High-Value-Added
Products
President, Fine Chemicals Segment Hitoshi Wakabayashi

Products in this segment
include a wide variety ofmaterials indispensable todigital devices, includingorganic pigments for color
filters and LC materials,
which are expected to drive
growth for DIC in the years
ahead.

Key
Products

Pigments Product Division

Liquid Crystal Materials Product Division

Organic pigments; special effect pigments;
metal carboxylates; sulphur chemicals (lubricant additives)

TFT LCs; Supertwisted nematic (STN) LCs

A marked increase inbrightness and reduced LCD
energy consumption

Responding to the evolutionof LCDs
TFT LCs

G58 series*UHHQSLJPHQWVIRUFRORUÀOWHUVThe production of TFT LCs demands
advanced technological expertise. DIC is
one of only a few companies in the world
with such expertise. DIC’s technologies
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)

FY2015FY2016135.5

For more information, please see Segment Results on page 136.
Operating Income
and Operating
MarginFY2015(Billions of yen/ %)13.1

FY2017 (Forecast)

134.793
134.7

128.2

FY2017 (Forecast)

FY2016

15.2

14.4

11.3％

11.3％
9.7％

106.5

101.1

105.4

42.7

41.3

44.0

(14.3)(13.7)
Japan

Overseas

5.1

7.1

7.2

8.1

7.5

8.0

(14.6)
EliminationsJapan

DIC Report 201715

Overseas

Operating margin

Business Strategies Under DIC108
LC materials

The DIC Group is powering growth in this segment by increasing value added.
To this end, the Group is capitalizing on its continuous product development and
VROLGVXSSO\FRQ¿JXUDWLRQWREROVWHULWVVKDUHRIWKHPDUNHWVIRUWKHVHJPHQW¶V
two key strategic products: functional pigments and TFT LCs.

With an emphasis on n-type TFT LCs, the principal type of LCs used in largescale displays in LCD televisions and other devices and is actively bringing
new products to market, the DIC Group is actively allocating resources to thedevelopment of new products. The Group is also maximizing its technical andproduction base in Qingdao to augment its operations in the PRC, which is
expected to be a major center of LCD manufacturing going forward.

Pigments
With the market for organic pigments for publishing inks—the principal sourceof 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
used in building materials. To expand its pigments for cosmetics business, theGroup 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 2016
Pigments

the PRC as the Group stepped up R&D and sales initiatives with the
JRDORIVWUHQJWKHQLQJVDOHVLQ¿VFDO\HDU

Shipments of functional pigments rose steadily, underpinned bygenerally firm demand. Of particular note, sales of pigments forcosmetics increased substantially, reflecting firm sales of products
using processing technologies obtained through the acquisition of a
PDQXIDFWXUHULQ¿VFDO\HDUDQGWKHIDFWWKDWUHG²DWUDGLWLRQDO',&
Group strength—was in fashion for cosmetics during the period. In thearea of special effect pigments, the Group pressed ahead with efforts
to expand the capacity of its pigment production facilities in Poland andRussia in response to growing demand.

LC materials
Ongoing development efforts in the area of LCs that reduce the energy
consumption of large LCDs yielded new products that helped enhance
VDOHV,QWKHVHFRQGKDOIRI¿VFDO\HDUDQHZSURGXFWWKDWERRVWVLCD response speed was adopted for use by an LCD manufacturer inSales of pigments for cosmetics continue to rise, led by red pigments

DIC Group Bolsters Production Capacity for Aluminum Powders and Pastes for AAC

HIGHLIGHT

7KHH[FHOOHQW¿UHUHVLVWDQFHWKHUPDODQGDFRXVWLFLQVXODWLQJSURSHUWLHVDQG
workability of autoclaved aerated concrete (AAC) make it suitable for a broad
range of construction applications, including houses, high-rise buildings,
HOHFWULFSRZHUSODQWVUHWDLQLQJZDOOVIRUWUDQVSRUWDWLRQLQIUDVWUXFWXUHURR¿QJ
and floor panels. Global demand for AAC, which is recyclable and emits
no VOCs, continues to increase by between 7% and 8%, a trend that is
expected to persist for the foreseeable future. The DIC Group manufactures
aluminum powders and pastes used as foaming agents. With demand forboth products expanding, the Group is bolstering the capacity of its two
production facilities, which are located in Poland and Russia.
Production facility for aluminum powders and pastes in Poland currently
undergoing expansion

DIC Report 201716

Polymers

DIC’s Second Core
Business
President, Polymers Segment Toshio Hasumi

Capitalizing on DIC’s worldclass technologies andknow-how, this segmentprovides synthetic resins andresin-related products to awide array of industries.

Key
Products

Polymers Product Division:DWHUERUQHUHVLQV89FXUDEOHUHVLQVDFU\OLFUHVLQVPHWKDFU\ODWHUHVLQVHSR[\UHVLQVSKHQROLFUHVLQVÀXRURFKHPLFDOVSRO\XUHWKDQH
resins; polyester resins; plasticizers; unsaturated polyester resins; polystyrene; alkylphenols

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 lowrefractive index UV- curable resins helps
improve the performance of optical fibers andthe brightness of display cases.

Segment Operating Results
Net Sales(Billions of yen)

FY2015FY2016

Operating Income
and Operating
MarginFY2017 (Forecast)

3,793

194.6

56.0

For more information, please see Segment Results on page 136.

198.3

180.9

(Billions of yen/ %)FY2016FY2017 (Forecast)

19.6

21.0

10.9％

10.6％

55

16.0

58.9

50.1

FY2015

6.7

6.5

12.9

14.5

8.2％

7.3
143.3

46

145.5

136.4

8.6
(5.6)

(4.7)
Japan

Overseas(6.0)
EliminationsJapan

DIC Report 201717

Overseas

Operating margin

Business Strategies Under DIC108
Product strategy

With demand on the decline in Japan, the Group is integrating
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
Capitalizing on technical centers established in Thailand andthe PRC, the Group is responding to increasingly stringent
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 2016
Development of high-performance products

environment-friendly products, as well as on implementing
marketing initiatives with a view to an assertive entry into thepromising Indian market.

In the area of products for electronics applications, a key
strength, the DIC Group advanced the development of a varietyof new products. These include fluorosurfactants for use as
resists and other types of leveling agents, a specialty curing
agent for epoxy resins that can be used in servers employed insophisticated telecommunications infrastructures, a nanoimprint
lithography (NIL)-compatible resist resin and a phenolic resinbinder for sand casting 3D printers.

Regional trends
In Japan, the Group pressed forward with the consolidation of
production lines for commoditized products and the introductionof equipment for the production of high-value-added offerings.
Elsewhere in Asia, efforts centered on bolstering sales ofSample of a 3D printer–generated sand-cast mold made with DIC’s
phenolic resin binder

Polymer Technical Centers Support Efforts to Expand Operations in Key Growth Markets
DIC has established polymer technical centers in
the PRC and Thailand with the aim of locking in
demand for polymers in Asia, which is expected
to increase in the future, by hastening thedevelopment of products that meet the needsof local customers. In addition to raising theHI¿FLHQF\RIGHYHORSPHQWWKHVHIDFLOLWLHVSURPRWH
collaboration with local Group companies in theprinting inks and other businesses, as well as
provide training for local technical staff, thereby
supporting the implementation of global polymer
business strategies.

HIGHLIGHT*URXS7HFKQLFDO&RQÀJXUDWLRQLQWKH35&
DIC (China) Co., Ltd.

Polymer Technical Center—
China
DIC Synthetic Resins (Zhongshan) Co., Ltd.

Changzhou Huari New Material Co., Ltd.

DIC Zhangjiagang Chemicals Co., Ltd.

DIC Report 201718

Compounds

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

This segment leverages resinand pigment dispersion andcompounding technologies
accumulated since DIC’s
founding to provide productsthat respond to needs inthe expanding global digitalprinting, automotive andelectronics markets.

Key
Products

Liquid Compounds Product Division

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

PPS compounds; high-performance compounds;
plastic colorants; high-performance optical materials

Helping customers
realize outstanding color
development and gloss

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

DIC.PPS series (PPS compounds)

Advanced DIC Group pigment dispersion
te c h n o l o g i e s e ns u r e exc e l l e nt c o l o rdevelopment and a glossy finish. With areputation for reliability, SunJet inkjet inks
enjoy popularity in markets around theworld.

The DIC Group’s PPS compounds boast excellent heatand 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
Net Sales

FY2015FY2016

For more information, please see Segment Results on page 136.
Operating Income
and Operating
MarginFY2017 (Forecast)(Billions of yen)(Billions of yen/ %)

63.6
33.3

34.9

39.5

39.2

41.6

(10.8)(11.5)(12.8)

Overseas

5.7

5.0

4.5

8.1％

7.1％

34.9

Japan

FY2017 (Forecast)

FY2016

9.0％

63.7

61.1

FY2015

2.7

3.0

EliminationsJapan

DIC Report 2017

19

2.4

2.0

2.5

2.6

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
areas of inkjet inks and PPS compounds. Through such efforts,
the Group is striving to realize a higher growth rate than themarket.

Valued for their excellent heat and chemical resistance,
PPS compounds are used widely as an alternative to metalmaterials in components for automotive engines and electronics
equipment. To maintain its leading share of the global market,
the DIC Group is promoting the expansion of production facilities
with the aim of stabilizing its global supply configuration. The
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.

Inkjet inks
To date, the DIC Group has sought to augment this businessby focusing on high-value-added water-based and UV-curable
LQNMHWLQNVSULPDULO\IRULQGXVWULDODQGRI¿FHUHODWHGDSSOLFDWLRQVIn addition to boosting sales in these markets, the Group is
expanding efforts to market products for new applications suchas textiles and ceramics, demand for which is expected to rise.

Progress of Major Initiatives in Fiscal Year 2016
Inkjet inks
Leveraging its network of production facilities, the DIC Group
responded to the needs of customers worldwide by shifting tooverseas production for certain products previously exported
from Japan. This move helped improve the efficiency of theGroup’s global supply chain.

PPS compounds
The Group completed a new dedicated PPS compound
production facility in the PRC, the world’s largest producer of
automobiles in terms of volume. By making effective use of
its previously established local technical service center, theGroup took steps to encourage adoption of its products by
manufacturers. The Group also completed construction of a
production line at the Kashima Plant for PPS neat polymer—the principal raw material in PPS compounds—as scheduled
LQ'HFHPEHUWKHUHE\FUHDWLQJDVXSSO\FRQ¿JXUDWLRQWKDW
will enable it to respond to expanding demand.

New PPS compound production facility in the PRC

New PPS Compound Suitable for LDS Developed

HIGHLIGHT

DIC recently succeeded in developing an innovative PPS compound suitable for use with laser direct structuring (LDS), a leading
MID process used for forming circuits on 3D molded components. The Company has also commenced sample shipments of the new
SURGXFW%HFDXVHLWIDFLOLWDWHVWKHLQWHJUDWLRQRIPXOWLSOHFRPSRQHQWVWKXVKHOSLQJUHGXFHZHLJKW/'6LVH[SHFWHGWR¿QGLQFUHDVHG
application in automobile manufacturing.

Process used for forming circuits on 3D molded components

Laser

Formation of circuits on a 3D molded component

LDS process

Laser activation

Molded plastic doped with organic metallic compound

Creation of circuit tracks

DIC Report 2017

20

Electroless plating

Application Materials

A Variety of Products Made
Possible by the Integration andApplication of DIC Technologies
President, Application Materials Segment Shinsuke Toshima

This segment encompasses adiverse range of products, including
industrial adhesive tapes, hollow¿EHUPHPEUDQHVDQGPRGXOHVDQG
coextruded multilayer films, which
are made possible through the
integration of proprietary materials
and coating, printing, molding andother technologies.

Key
Products

Application Materials Product Division,QGXVWULDODGKHVLYHWDSHVPDJQHWLFWDSHVDQGFRDWHGVKHHWVKROORZ¿EHUPHPEUDQHVDQGPRGXOHVFRH[WUXGHGPXOWLOD\HU¿OPVKHDOWK
foods and natural colorants; decorative boards, interior housing products and coatings for building materials; decorative sheets and
GHFRUDWLYH¿OPVVKHHWPROGLQJFRPSRXQGV 60&V EXONPROGLQJFRPSRXQGV %0&V DQGSURFHVVHGSURGXFWVPROGHGSODVWLFSURGXFWVEnhancing 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
excellent amino acid balance. Spirulina’s nutritional
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)

FY2015FY2016

57.5

11.4

55.7
9.9

For more information, please see Segment Results on page 136.
Operating Income
and Operating
MarginFY2017 (Forecast)

FY2015

3.1(Billions of yen/ %)

56.7

0.6

2.1

10.8
0.6

1.9

52.7

2.5

Overseas

1.6

(9.9)

(6.9)
Japan

3.4％

55.9
1.5

(7.6)

5.5％

0.3
3.7％

53.7

FY2017 (Forecast)

FY2016

EliminationsJapan

DIC Report 201721

Overseas

Operating margin

Business Strategies Under DIC108
Having devised a new growth model, the DIC Group is stepping up the
expansion of its electronics and life sciences business. At the sametime, the Group is promoting decisive rationalization of its housing
products business.

into the market for large degassing modules for water treatment
applications. The Group’s aims in the area of health foods are to
maintain high sales of Spirulina, a highly rated superfood, andto expand sales of Spirulina-derived natural blue food coloring
Linablue® in North America and Europe, taking advantage of a shift
in market preferences from synthetic 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 nascentlocal brand owners in the PRC, with the goal of bolstering adoption
for use in smartphones and tablet computers. The Group is also
promoting development efforts with a view to entering the market for
YHKLFOHPRXQWHGGLVSOD\VLQWKHIXWXUH,QKROORZ¿EHUPHPEUDQHV
and modules, the Group is working to sustain high growth fordegassing modules used in inkjet printers, for which it holds
the leading global market share, and to make a full-scale entry

Housing products
In the area of unsaturated polyester resin molded products, the*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 2016
Electronics and life sciences
Efforts to encourage the new adoption of DIC Group industrial adhesive
tapes for use in personal computers proceeded apace. In the area ofhollow-fiber membranes and modules, sales of products used for thedegassing of inkjet inks and in the manufacture of ultrapure water for
use in semiconductor fabrication were firm. In health foods, operationscommenced at the Group’s new natural blue colorant extraction plant
DWLWV6SLUXOLQDSURGXFWLRQIDFLOLW\LQWKH8QLWHG6WDWHVEXLOWLQ¿VFDO\HDU
2015, while efforts to elevate sales of Linablue® proceeded. The Group isin the process of further augmenting the plant’s capacity, with completion
VFKHGXOHGIRU¿VFDO\HDU

Housing products
In January 2017, DIC transferred its building and housing materials
business to wholly owned subsidiary DIC Decor, Inc. To date, the Grouphas operated housing products and related businesses as independent
business entities. The Group believes that combining these businesses
LQWRRQHHQWLW\ZLOOSRVLWLRQLWWRFRQGXFWSURGXFWGHYHORSPHQWWKDWUHÀHFWVD
more precise grasp of market needs and to enhance services.

+ROORZ¿EHUPHPEUDQHPRGXOHIRUGHJDVVLQJOLTXLGVProduction Capacity for Linablue® Natural Blue Food Coloring to be Further Expanded

HIGHLIGHT

Demand for natural blue food coloring Linablue ®, derived from edible blue–green algae
Spirulina, is rising dramatically, particularly in North America and Europe, underpinned
by a rapid shift in consumer preference toward natural food colorings. With the aim of
HIIHFWLYHO\ORFNLQJLQWKLVGHPDQGLQ¿VFDO\HDUWKH',&*URXSUHVROYHGWRLQFUHDVH
the capacity of its U.S. plant for extracting the natural blue colorant, which came on-line in¿VFDO\HDUZLWKDQH\HWRZDUGFRPSOHWLRQLQ¿VFDO\HDU

Linablue®
natural blue food coloring

Natural blue colorant extraction plant in the United States slated for expansion

DIC Report 201722

Special Feature
Product Development for a Sustainable Society

Leveraging the Power of Chemistry
to Create Value for Society
Addressing issues related to climate change, energy, food security and disaster prevention is one of the
PRVWVLJQL¿FDQWFKDOOHQJHVIDFLQJWKHZRUOGWRGD\7KH',&*URXSLVOHYHUDJLQJWKHSRZHURIFKHPLVWU\WR
SURYLGHSURGXFWVWKDWFDQKHOSUHVROYHVXFKLVVXHVDQGIXUWKHUGULYHVXVWDLQDELOLW\

Value
Creation

Energyconservation

3Rs (“Reduce,
Reuse, Recycle”)

Aging
society

Safety /Peace of mind

HumanrightsHighly informationoriented society

Comfortable
lifestyles

Reduction ofsubstances that harmthe environment

Reduction of CO 2
emissionsImprovementof convenience

Food loss
reduction

Better productquality

DIC Report 201723

Special Feature: Product Development for a Sustainable Society

Super Engineering Plastics

Helping to Reduce Vehicle Weight, Improve)XHO(IÀFLHQF\DQG/RZHU&22 Emissions

Coatings
Fibers

8%

1%

Films

1%

Compounds

90%

Applications for
PPS Polymer

Value Creation
Reduce vehicle weight by using high-performance PPS compounds as an alternative to metal materials in
automotive components
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SRVLWLYHLPSDFWHIIRUWVWRLQWHJUDWHWHQVRIWKRXVDQGVRIFRPSRQHQWVDVZHOODVWRVZLWFKWRUHVLQDVWKHSULQFLSDOPDWHULDOXVHGWKHUHLQDUH
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KHDW²DVDQDOWHUQDWLYHWRPHWDOPDWHULDOVLQDXWRPRWLYHFRPSRQHQWVDVDZD\WRUHGXFHYHKLFOHZHLJKWKDYHSURJUHVVHG',&KDVIRFXVHGSDUWLFXODUO\RQ336FRPSRXQGVZKLFKZHLJKKDOIDVPXFKDVDOXPLQXPDQGGHOLYHUVXSHUEKHDWFKHPLFDODQGÀDPHUHVLVWDQFH6LQFH',&KDVSURPRWHGSURGXFWVZLWKDWWULEXWHVVXLWHGWRXVHLQDXWRPRWLYHFRPSRQHQWVZKLOHDWWKHVDPHWLPHH[SDQGLQJDSSOLFDWLRQVIURPJDVROLQHDQGGLHVHOSRZHUHGYHKLFOHVWRLQFOXGHK\EULGHOHFWULFDQGIXHOFHOOYHKLFOHVWKHUHE\FRQWULEXWLQJWRLPSURYHGIXHOHI¿FLHQF\8VLQJOLIHF\FOHDVVHVVPHQW /&$ DWHFKQLTXHIRUHYDOXDWLQJDSURGXFW¶VHQYLURQPHQWDOLPSDFW',&KDVDOVRGHPRQVWUDWHGWKDWXVLQJ
336FRPSRXQGVUDWKHUWKDQDOXPLQXPIRUFHUWDLQHOHFWURQLFFRQWUROFRPSRQHQWVORZHUV&22 emissions attributable to such components by
URXJKO\±* /&$LVXVHGWRDVVHVVWKHHQYLURQPHQWDOLPSDFWRIDSURGXFWDFURVVDOOVWDJHVRILWVOLIHIURPUDZPDWHULDOH[WUDFWLRQWKURXJKGHYHORSPHQWPDQXIDFWXUHXVHDQGUHF\FOLQJRUGLVSRVDODIC Report 201724

Special Feature: Product Development for a Sustainable Society

Automotive Components in Which PPS is Used

A Distinctively
DIC
Response$QLQWHJUDWHGFRQ¿JXUDWLRQHQFRPSDVVLQJHYHU\WKLQJIURPpolymer design through to molding compounds, underpinning
DOHDGLQJJOREDOPDUNHWVKDUH$NH\',&VWUHQJWKLVLWVLQWHJUDWHGGHYHORSPHQWDQGSURGXFWLRQFRQ¿JXUDWLRQZKLFKHQFRPSDVVHVHYHU\WKLQJIURPSRO\PHUGHVLJQWKURXJKWRPL[LQJDQGFRPSRXQGLQJHQDEOLQJLWWRSURYLGHSURGXFWVWDLORUHGWRWKHQHHGRIDXWRPDNHUV',&KDVGHYHORSHG336FRPSRXQGVWKDWERDVWGLPHQVLRQDOSUHFLVLRQFRPSDUDEOHWRWKDWRI
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LQ-DSDQ0DOD\VLDWKH35&DQG$XVWULD WRDSSUR[LPDWHO\DSSUR[LPDWHO\PHWULFWRQQHVRIWKHJOREDOPDUNHW 7KHVHPRYHVDUHGHVLJQHGWRKHOS',&IXO¿OOLWVUHVSRQVL',&IXO¿OOLWVUHVSRQVLELOLWLHVDVWKHZRUOG¶VODUJHVWVXSSOLHURIERWK8QGHULWVFXUUHQWPHGLXPWHUPPDQDJHPHQWSODQ',&PDQDJHPHQWSODQ',&WKH&RPSDQ\KDVSRVLWLRQHG336FRPSRXQGVDVDNH\EXVLQHVVWKDWZLOOGULYHJURZWKJRLQJIRGULYHJURZWKJRLQJIRUZDUGDQGKDVVHWDWDUJHWIRUUDLVLQJLWVVKDUHRIWKHJOREDO336FRPSRXQGVPDUNHWWRE\¿VFD
PDUNHWWRE\¿VFDO\HDU

DIC Report 201725

Special Feature: Product Development for a Sustainable Society

The DIC Group’s Global PPS Compound Production Network

Vienna, Austria
6,000 metric tonnes
Technical service centerFrankfurt

Zhangjiagang, PRC
6,000 metric tonnes
Technical service center
Shanghai

Komaki, Japan
23,000 metric tonnes
Technical service anddevelopment center
Chiba

Penang, Malaysia
4,500 metric tonnes

PPS Polymer

Technical service center
Penang

Plant

Type

Kashima (Japan)

Branched, linear

Sodegaura (Japan)

Branched, linear

Annual production
capacity (Metric tonnes)

18,0005,000
23,000Total',&KDVGHYHORSHGWKHZRUOG¶V¿UVW336FRPSRXQGDSSURYHGIRUDQLQQRYDWLYHFLUFXLWIRUPLQJSURFHVV,Q-XO\DQLQQRYDWLYH336FRPSRXQGGHYHORSHGE\',&IRUXVHZLWK/'6²DSURFHVVIRUIRUPLQJFLUFXLWVRQ'PROGHGFRPSRQHQWV²EHFDPH
WKH¿UVWVXFKFRPSRXQGWRJDLQDSSURYDOIRUWKLVDSSOLFDWLRQ/'6LQYROYHVDSSO\LQJDODVHUWRWKHVXUIDFHRIDPROGHGSODVWLFFRPSRQHQWGRSHGZLWKDQ
RUJDQLFPHWDOOLFFRPSRXQG7KHODVHUVHOHFWLYHO\DFWLYDWHVWKHPHWDOOLFFRPSRXQGFUHDWLQJWUDFNVLQZKLFKFLUFXLWVDUHWKHQIRUPHG7KLVHOLPLQDWHVWKH
QHHGIRUUHVLVWHWFKLQJPDNLQJLWSRVVLEOHWRVKULQNFRVWVDQGFUHDWHFLUFXLWWUDFNVRQ'PROGHGFRPSRQHQWVXUIDFHVZKLFKIDFLOLWDWHVWKHLQWHJUDWLRQRIPXOWLSOHFRPSRQHQWVDQGWKHUHGXFWLRQRIFRPSRQHQWVL]H7KHVHEHQH¿WVKDYHHQFRXUDJHGWKHH[SDQGHGXVHRI/'6E\PDQXIDFWXUHUVRIFRPSRQHQWVIRUDXWRPRELOHVDQGPHGLFDOGHYLFHVDPRQJRWKHUVSDUWLFXODUO\LQ(XURSH
/'6LVDSURSULHWDU\WHFKQRORJ\RZQHGE\/3.)/DVHU (OHFWURQLFV$*DPDQXIDFWXUHURISULQWHGFLUFXLWERDUG 3&% SURGXFWLRQHTXLSPHQWEDVHGLQ
*HUPDQ\$FFRUGLQJO\PDWHULDOVSURGXFHGIRU/'6PXVWEHDSSURYHGE\/3.)'UDZLQJRQWKHZHDOWKRIWHFKQRORJLHVLWKDVEXLOWXSDVDPDQXIDFWXUHURI336FRPSRXQGV',&GHYHORSHGLP-150-LDSD336FRPSRXQGWKDWKDVPHW/3.)¶VVWULQJHQWVWDQGDUGVIRUDSSURYDODQGEHHQUHJLVWHUHGRQWKH
FRPSDQ\¶VPDWHULDOVOLVW$VLWSUHVHUYHVWKHUHQRZQHGKHDWDQGFKHPLFDOUHVLVWDQFHRI336SURGXFWVLP-150-LDS can be used for automotive components,
IRUZKLFKRWKHU/'6JUDGHPDWHULDOVDUHQRWVXLWHG([SHFWDWLRQVDUHWKXVKLJKWKDWLWVXVHZLOOIXUWKHUDFFHOHUDWHHIIRUWVWRUHGXFHWKHZHLJKWDVZHOODVQXPEHURIDXWRPRWLYHFRPSRQHQWVLaser

LDS process

Laser activation

Molded plastic doped with organic metallic compound

Creation of circuit tracks

Electroless plating

'FLUFXLWWUDFNV/'6PDNHVLWSRVVLEOHWRFUHDWHFLUFXLWWUDFNVRQ'PROGHGFRPSRQHQWVLQDWKUHHVWHSSURFHVVDIC Report 201726

Special Feature: Product Development for a Sustainable Society

Key Person from DIC

We are creating self-contained local sales and supply configurations with the aim of becoming the undisputed global market leader.
DIC has secured a 40% share of the Japanese market for PPS compounds, but there are many markets overseas that we must still cultivate. We haveestablished production, sales and technical service configurations in four regions, positioning us to ensure an accurate grasp of local market requirements
and offer technical support, including by providing advice on molds and molding technologies and analyzing materials, thereby creating self-contained
local sales and supply configurations that will support market expansion. Looking ahead, we would also like to create similar self-contained local customer
service configurations around the world. PPS compounds are an outstanding, environment-friendly material. Accordingly, we expect that our customer basegoing forward will not be limited to automakers, but will expand to include manufacturers in such industries as housing equipment and aerospace.
PPS Products Manager and Senior Manager, PPS Products Group, Solid Compounds Product Division

Toshiyuki Mori

Key Person from DIC

DIC’s principal strength is its close relations with automotive components manufacturers and swift its responsiveness.
To encourage the further use of PPS compounds in automotive components, it is crucial that we promptly grasp their technical requirements and that we actively
bring our proprietary know-how and new technologies to facilitate collaborative development. We must also fully leverage our integrated configuration, which
encompasses everything from polymer design through to molding compounds, to promote the swift development and commercialization of new products. To theseends, we are creating opportunities to share information and strengthen communication, including organizing technological exchange meetings, so as to expand ourselection of applicable materials. The effectiveness of this approach reflects the competitive advantage we enjoy thanks to our proven track record to date.
Senior Manager, Nagoya EP Sales Department, Solid Compounds Product Division

Kenji Hasegawa

Key Person from DIC

As high-performance plastics, PPS compounds offer unlimited possibilities.
In addition to extremely high strength and durability, automotive components must deliver both electrical insulating and heat dissipating properties, amonga host of other attributes. Manufacturers must also strive to make components thinner and smaller. The ability of PPS compounds to satisfy all of thesechallenging requirements underscores its suitability for a wide variety of components. By expanding applications for our PPS compound production
technologies, we are contributing to efforts to reduce the environmental impact, as well as the cost, of many different manufactured products. Accordingly,
simply changing our perspective makes it possible to cultivate entirely new applications for PPS compounds. The sky really is the limit.

TO
PI

C

Head Researcher, Polymer Processing Technical Group 2, Polymer Processing Technical Division

Hirokiyo Nakase

Other Efforts to Create Value for Society

Cultivating Applications for PPS Compounds inIncreasingly Diverse Fields
DIC is creating new value for society by leveraging the properties of PPS
compounds to encourage its use as a high-performance alternative to metalmaterials in numerous fields other than automobile manufacturing. In the area of
housing equipment, for example, the Company is capitalizing on the material’shydrothermal resistance, pressure resistance and toughness (sturdiness),among others, to promote its use in hot water heaters, combination faucets andother water supply equipment, and joints and valves for pipes. Going forward,
DIC will work to further expand applications for PPS compounds by adding
surface decoration. In the area of components for precision instruments, DIC isusing PPS compounds in low-friction and low-abrasion gears and bearings. DIC
is also expected to expand into the aerospace field.

DIC Report 201727

6SHFLDO)HDWXUH3URGXFW'HYHORSPHQWIRUD6XVWDLQDEOH6RFLHW\(QYLURQPHQW)ULHQGO\3RO\XUHWKDQH5HVLQVIRU8VHLQ$UWLÀFLDODQG6\QWKHWLF/HDWKHUV

3URYLGLQJ0DWHULDOVWKDW)DFLOLWDWH6DIH
DQG6HFXUH3URGXFWLRQDQG8VH

0'0)Emissions%

Environment-Friendly
Polyurethane Resins

Value Creation
3URPRWLQJHQYLURQPHQWIULHQGO\SRO\PHUVZRUOGZLGHWith the rapid tightening of environmental regulations in global markets, including the PRC, a shift in demand from solvent-based to water-based and solvent-free products
poses a considerable challenge for manufacturers of polyurethane resins. In the polymers business, the DIC Group is advancing the swift development of environment-friendly
products that respond to pertinent laws and regulations and promoting sales of environment-friendly polymers worldwide. DIC is actively expanding its polymers business in
the PRC, taking a multifaceted approach that includes growing markets for products exported from Japan and produced in Taiwan and using Group sites in the PRC to further
business development. As a natural extension, the Group is also looking to expand its environment-friendly polymers business beyond the PRC. In addition, DIC is exploring
the idea of collaborating with the Sun Chemical Group—a DIC Group member—to encourage a broader market presence in the Americas and Europe, where environmental
concerns have long been at the forefront. Looking ahead, the DIC Group will take decisive steps to invest strategically and work in collaboration with other companies toreinforce the foundation of the business, positioning it to expand sales of environment-friendly products by ensuring an accurate and timely grasp of changing market needs.

Contributing to the manufacture of products with a lower environmental impact
Polyurethane resins, in which molecular design technologies are leveraged to impart unique performance properties, are used in compounds for a wide range of applications,from clothing and various everyday commodities to building materials and materials for automobiles, electronics and various industrial uses. Of note, annual global production
RISRO\XUHWKDQHUHVLQVIRUXVHDVUDZPDWHULDOVDQGDGKHVLYHVIRUDUWL¿FLDODQGV\QWKHWLFOHDWKHUVDPRXQWVWRPHWULFWRQQHVPDNLQJWKLVWKH*URXS¶VVHFRQGODUJHVW
product group in terms of output after polyurethane foam (used in polyurethane sheets and insulating materials). Bolstered by outstanding performance features and a shift in
SUHIHUHQFHIURPQDWXUDOWRDUWL¿FLDODQGV\QWKHWLFOHDWKHUVGHPDQGIRUSRO\XUHWKDQHUHVLQVFRQWLQXHVWRLQFUHDVH
7KHSURFHVVXVHGWRPDQXIDFWXUHSRO\XUHWKDQHUHVLQVIRUDUWL¿FLDODQGV\QWKHWLFOHDWKHUVXVHVWKHRUJDQLFVROYHQWGLPHWK\OIRUPDPLGH '0) 92&VHPLWWHGGXULQJWKLVSURFHVVDQGWKHKHDOWKFRQVHTXHQFHVRI'0)UHVLGXHLQDUWL¿FLDODQGV\QWKHWLFOHDWKHUVDUHWKXVPDMRUFRQFHUQV)RUWKLVUHDVRQ'0)LVOLNHO\WREHDGGHGWRWKH(XURSHDQ8QLRQ¶V5HJLVWUDWLRQ(YDOXDWLRQ$XWKRULVDWLRQDQG5HVWULFWLRQRI&KHPLFDOV 5($&+ OLVWRIEDQQHGVXEVWDQFHV0DQ\JOREDOVSRUWVZHDUPDQXIDFWXUHUVDURXQGWKHZRUOGKDYHDIC Report 201728

6SHFLDO)HDWXUH3URGXFW'HYHORSPHQWIRUD6XVWDLQDEOH6RFLHW\GHFODUHGWKHLULQWHQWLRQWRGLVFRQWLQXHXVHRI'0)E\0RUHRYHUUHVWULFWLRQVRQ92&HPLVVLRQVUHVXOWLQJIURPWKHXVHRIVROYHQWVKDYHEHHQVWUHQJWKHQHGLQERWKWKH35&
DQG7DLZDQERWKPDMRUVXSSO\EDVHVIRUDWKOHWLFVKRHVThe DIC Group, which develops and manufactures a diverse range of solventborne and waterborne polyurethane resins, took prompt steps to address these and other
FKDOOHQJHVUHODWHGWRWKHXVHRI'0)LQDUWL¿FLDODQGV\QWKHWLFOHDWKHUVDQGKDVVXFFHHGHGLQGHYHORSLQJDQGPDUNHWLQJ'0)IUHHHQYLURQPHQWIULHQGO\SRO\XUHWKDQHUHVLQVwith properties identical to their conventional counterparts. The Group is currently establishing a framework for providing total solutions, including raw materials and production
systems, to manufacturers of athletic shoes.
VOCemissions

Athletic shoes are constructed
IURPPXOWLSOHOD\HUVRIDUWL¿FLDO
or synthetic leathers. Individual
layers are supplied as shoe
components and bonded
together by hand.

Artificial andsynthetic leathers

REACH(Moves to ban useof DMF in the EU)
Sportswear
manufacturers(Declarationof elimination)DMF

6XUIDFHVNLQ
Adhesive layer%DFNLQJ$'LVWLQFWLYHO\',&
5HVSRQVH

7UHQGV6XUURXQGLQJWKH8VHRI'0)

National policies in the
PRC and Taiwan (Stricter
regulations governing
solvent emissions)

Combining core technologies to establish
technologies for the production of environment-friendly
polyurethane resins$UWL¿FLDODQGV\QWKHWLFOHDWKHUVXVHGLQDWKOHWLFVKRHVPXVWGHOLYHUDQDSSURSULDWHWH[WXUH VRIWWRWRXFKDQGVXI¿FLHQWO\VWURQJ ÀH[UHVLVWDQFHDWURRPWHPSHUDWXUHDQGORZ
temperatures, durability and a light weight. Ensuring competitive production costs is also a key concern. With conventional solventborne polyurethane resin, the vaporization
RIVROYHQWIDFLOLWDWHVWKHIRUPDWLRQRIDVWURQJVXUIDFHVNLQUHVXOWLQJLQDSURGXFWWKDWVDWLV¿HVSHUIRUPDQFHUHTXLUHPHQWV,QFRQWUDVWWKHXVHRIZDWHUERUQHUHVLQVKLQGHUVWKH
DFKLHYHPHQWRIDKLJKPROHFXODUZHLJKWDQGHYHQJUDLQPDNLQJLWGLI¿FXOWWRUHDOL]HVXI¿FLHQWVWUHQJWKGXUDELOLW\DQGVFXIIUHVLVWDQFH
By combining multiple key core technologies—including polymer design technologies used in HYDRAN waterborne adhesive polyurethane resins, moisture-curing
technologies used in TYFORCE solvent-free hot-melt adhesives, and foam expansion and reactivity control used in PANDEX thermosetting polyurethane resins—DIC has
VXFFHHGHGLQFUHDWLQJDQHQYLURQPHQWIULHQGO\SRO\XUHWKDQHUHVLQSURGXFWLRQV\VWHPWKDW\LHOGVVROYHQWIUHHLH'0)IUHHSRO\XUHWKDQHUHVLQVFRPSDUDEOHLQTXDOLW\WR
conventional solventborne products, as well as shortens process times, thereby reducing energy consumption and production costs.

',&·V(QYLURQPHQW)ULHQGO\3RO\XUHWKDQH5HVLQ3URGXFWLRQ6\VWHP
Development of
DMF-free resins
Conventional resins
Solventborne
Surfaceadhesives
skin
Adhesive
layer

Solventborne
adhesives

Backing

Solventborne
adhesives

Shift towaterborne
products

Step 1

Step 2

Waterborne

Waterborne
Higherperformance

Waterborne
Waterborne

Solvent-free adhesives

Improved
adhesion andfoaming

Waterborne

Creating a production system that combines three key
elemental technologies from DIC’s polyurethane resins business
Polymer design
technologies usedin HYDRAN
waterborne adhesive
polyurethane resins

VOC-freeFoam expansion
Moisture-curing
technologies used and reactivity control
in TYFORCE
used in PANDEX
solvent-freethermosetting
hot-melt adhesives polyurethane resins

Energysavings

DMF-free

DIC Report 2017

29

Foaming technologies
used in the production of
PVC and rubber (pyrolytic
chemical foaming agents)
pyrolytic foaming technologies

Shorter
processtimes

6SHFLDO)HDWXUH3URGXFW'HYHORSPHQWIRUD6XVWDLQDEOH6RFLHW\

Providing a total production system that extends to processing rather thansimply supplying materials
An environment-friendly polyurethane resin production system requires processing technologies, as well as molecular
design technologies used in the production of resin. Accordingly, DIC collaborated with equipment manufacturers to
GHYHORSSURGXFWLRQSURFHVVHVRSWLPL]HGWRVXLWSURGXFWSURSHUWLHVDQGLQ¿VFDO\HDUFRPSOHWHGDV\VWHPZKLFK
it will provide to customers together with materials. To ensure swift delivery to the PRC production bases of global
athletic shoes manufacturers, the system will be supplied through
DIC’s Environment-Friendly Polyurethane
Taiwan-based Group company Lidye Chemical Co., Ltd. DIC will
Resin Production System (Promoting Local
endeavor to establish this system, which facilitates local procurement
Consumption of Local Products)of both resin and equipment, as an environment-friendly global
standard across a wide range of industries. Of particular note,
Athletic shoes
DIC
Supplier
manufacturers',&¶VQHZWRWDOSURGXFWLRQV\VWHPUHVSRQGVWRWKHHQYLURQPHQWDO
requirements of automakers for materials used in vehicle interiors.
Delivery ofDelivery ofBrand andproductsequipment
Accordingly, DIC will continue working to improve the texture andknow-how
durability (resistance to damage from wear, sebaceous matter,
DIC Group
Equipment
FKHPLFDOVKHDWOLJKWDQGPRLVWXUH RIDUWL¿FLDODQGV\QWKHWLFOHDWKHUV
(Taiwan)manufacturers
SURGXFHGXVLQJWKHV\VWHPDVZHOODVWRSURPRWHWKHV\VWHP¶V
appeal in the market.
Japan

PRC

Ke y P e r s o n o f D I C

5HFRJQL]LQJWLJKWHUUHJXODWLRQVDVDEXVLQHVVRSSRUWXQLW\ZHDUHZRUNLQJWRGHÀQHDQHZJOREDOVWDQGDUG
IRUHQYLURQPHQWIULHQGO\SRO\XUHWKDQHUHVLQV
7KHSDVVLQJRILQFUHDVLQJO\VWULQJHQW92&HPLVVLRQVUHJXODWLRQVZRUOGZLGHLVWHVWLQJWKHWHFKQRORJLFDOFDSDELOLWLHVRIFKHPLFDOVFRPSDQLHV:H
recognize this trend as a golden opportunity to leverage our comprehensive strengths to expand our business.
Success in the polyurethane resins business today demands more than the ability to provide materials. With consideration for the environment our
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7KLVGLVWLQFWLYHEXVLQHVVVWUDWHJ\LVPDGHSRVVLEOHE\WKH',&*URXS¶VWKRURXJKJUDVSRIDOOWKHWHFKQRORJLHVLQYROYHGIURPSRO\PHUGHVLJQWKURXJKto production, as well as its global network of production facilities.
*HQHUDO0DQDJHU2VDND8UHWKDQHV6DOHV'HSW3RO\PHUV3URGXFW'LYLVLRQ

Masahiro Nishi

Ke y P e r s o n o f D I C:HPXVWDOVRGHYRWHFRQVLGHUDEOHHIIRUWWRUHVHDUFKLQWKHDUHDVRIGHVLJQGHYHORSPHQWDQGSURFHVVLQJPHWKRGVDIC is the top manufacturer of solventborne polyurethane resins in Japan. The Company also boasts a wealth of development and production
technologies in a diverse range of other areas, from epoxy, phenolic, acrylic and other resins to pigments. Combining compounding and other coretechnologies makes it possible to create new performance properties. In line with the goal of providing total solutions, that is, solutions that extend as
IDUDVSURFHVVLQJWKHSHRSOHLQP\ODERUDWRU\DUHLQYROYHGQRWRQO\LQÀDVNV\QWKHVLVEXWDOVRLQHTXLSPHQWGHYHORSPHQW)RUWKLVUHDVRQZHVWULYHWR
always keep abreast of the latest information and technological trends.
*URXS0DQDJHU3RO\PHU7HFKQLFDO*URXS3RO\PHU7HFKQLFDO'LYDIC Report 201730

7DPRWVX6DNDPRWR

End users

Global market

Special Feature: Product Development for a Sustainable Society

IZANO Folding Emergency Helmets

Delivering Easy Storability and Portability,
IZANO Helmets Help Prevent and Mitigate
Injuries in Disaster Situations

Cumulative sales since launch (2013)

More than350
thousand(As of March 2017)

Value Creation
Design a helmet that is suitable for use in self-help, mutual aid
and public assistance initiatives during disaster situations
Imagine having to evacuate during an earthquake or typhoon. Think of the spine-chilling
experience of seeing a pane of glass from a window fall onto a road and shatter during a live
WHOHYLVLRQEURDGFDVW,QGDQJHURXVVLWXDWLRQVVXFKDVWKHVHWKH¿UVWSULRULW\LVWRSURWHFWRQH¶V
head. Falling objects are particularly dangerous. In residential areas, these include roof tiles,
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include signboards, neon signs and shards of glass.
:HDULQJDKHOPHWGXULQJDQHYDFXDWLRQNHHSVRQH¶VKDQGVIUHHUHGXFLQJWKHULVNRIVWXPEOLQJ
and allowing one to proceed safely while carrying a flashlight. However, despite awareness
RIWKHEHQH¿WVRIKHOPHWVPDQ\DUHUHVLVWDQWWRWKHLGHDRIKDYLQJWKHPRQKDQGRZLQJWRDlack of storage space and unfamiliarity with their use. Accordingly, there is a clear demand for
HPHUJHQF\KHOPHWVWKDWRIIHUERWKHI¿FLHQWVWRUDELOLW\DQGRXWVWDQGLQJSHUIRUPDQFH
A critical aspect of efforts to protect people and reduce injuries in disaster situations is to ensure
the seamless integration of self-help (protecting oneself), mutual aid (rescue and relief) and public
assistance (recovery and reconstruction) initiatives. High-performance, easy-to-use emergency
helmets that are appropriate not only for evacuation use and inclusion in emergency supplies, but
DOVRIRUSRVWGLVDVWHUUHFRYHU\DQGUHFRQVWUXFWLRQHIIRUWVDUHWKXVUHFRJQL]HGDVLQGLVSHQVDEOHDIC Report 201731

Special Feature: Product Development for a Sustainable Society

A Distinctively
DIC
Response$QDWWUDFWLYHKHOPHWWKDWERDVWVSURIHVVLRQDOOHYHOVSHFL¿FDWLRQVDQGIROGVWRKDOILWVRULJLQDOVL]HIRUVWRUDJH+DYLQJUHFRJQL]HGWKDWDKHOPHWWKDWERDVWVHDV\DQGFRQYHQLHQWVWRUDELOLW\SRUWDELOLW\DQGSURIHVVLRQDOOHYHOVWUHQJWKZRXOGEHLGHDOIRU
a wide range of applications, from disaster situations and post-disaster recovery and reconstruction to construction sites and industrial
facilities, Group company DIC Plastics, Inc., which has 60 years of experience manufacturing helmets, developed the IZANO helmet, which
IHDWXUHVDJURXQGEUHDNLQJGHVLJQDQGVWUXFWXUH7KH¿UVWQRQVHSDUDWLRQIROGDEOHKHOPHWWRFRPSO\ZLWKVWDQGDUGVIRUKHDGJHDUWKDWSURWHFWVDJDLQVWKHDGLQMXULHVFDXVHGE\À\LQJDQGIDOOLQJREMHFWVDQGIDOOVIURPKLJKSODFHVHVWDEOLVKHGE\-DSDQ¶V0LQLVWU\RI+HDOWK/DERXUDQG
:HOIDUH 0+/: WKHIZANOKHOPHWUHFHLYHGDQDZDUGLQWKHHGLWLRQRI-DSDQ¶V*RRG'HVLJQ$ZDUGV

Easy to store and carry, pops open instantly andsuitable for diverse applications● Thanks to a split ring-format folding structure, the volume of IZANO helmets isapproximately 60% lower than conventional helmets, making them easy to carry around.
● IZANO helmets pop open instantly simply by pushing the center portion up.
● Compliance with standards for headgear that protects against head injuries caused byfalls from high places makes IZANO helmets suitable for use at elevations.
● IZANO helmets are suitable for self-help (protecting oneself), mutual aid (rescue andrelief) and public assistance (recovery and reconstruction) initiatives in disaster situations.

Stockpile for emergency/Carry aroundCan be carriedaround in a bag
Can be hung on
the side of a desk andnot be in the way

In the event of
a disaster

Open with one simple motion
Proceed safely tosubsequent tasks
Use in rescue andrelief efforts

Rescue and relief efforts

Evacuation

Suitable for use in
rubble removal

Use at elevations

Recovery efforts

Reconstruction projects

Ideal for those who mustmove between sites

Requires less storage spacethan conventional helmets

Fits in a desk drawer

Makes it easy to discern individuals’ roles

DIC Report 201732

Good for routine tasks

Special Feature: Product Development for a Sustainable Society

9LWDPLQFRORUVPDNHLWHDV\WRGLVWLQJXLVKDIÀOLDWHGRUJDQL]DWLRQVRUGHSDUWPHQWVDQGHQFRXUDJHDSRVLWLYHSV\FKRORJLFDOUHVSRQVH

White

Orange

Green

Blue

White with orange stripe

Orange with white stripe

IZANO helmets have been adopted for use by the police, local governments and private-sector companies,
with sales to date in excess of 350,000 units
5HDOL]LQJDVXSHULRUKHOPHWLQYROYHVGHYHORSLQJRXWVWDQGLQJGHVLJQDQGVWUXFWXUHSURGXFLQJSURWRW\SHVFRQGXFWLQJWHVWVDQDO\]LQJILQGLQJVDQGWKHQUHSHDWLQJWKHVHSURFHVVHVPXOWLSOHWLPHV',&¶VDELOLW\WR
complete all such processes within the DIC Group is a key strength. Overseeing everything from plans fordesign and construction and the selection of resin through to the use of 3D computer-aided design (CAD)
IRUSUHFLVLRQHQJLQHHULQJDQGFRPSXWHUVLPXODWLRQRIVWUXFWXUDODQGUHVLQÀRZDQDO\VLVWKXVHQDEOHG',&WR
RSWLPL]HDOODVSHFWVRIWKHIZANO helmet. To ensure reliability, DIC also used mechanism analysis in-houseusing high-speed cameras to conduct impact tests.
The quality and performance features of the helmets developed through this process have earned solid
praise in many quarters. More than 350,000 units have been sold since the helmet was launched in October
2013, with customers including the Tokyo Metropolitan Police Department, which uses them for off-duty
SHUVRQQHOPRELOL]HGLQWKHHYHQWRIDGLVDVWHUKe y P e r s o n f r o m D I CDevelopment efforts began with experiencing a 7.0 earthquake.
Efforts to develop the IZANOKHOPHWEHJDQZLWKWKHJRDORIUHDOL]LQJDQHPHUJHQF\KHOPHWVXLWHGWRXVHLQDJUHDWHUYDULHW\RIVLWXDWLRQV+DYLQJUHFRJQL]HGWKHLPSRUWDQFHRIDSURGXFWFRQFHSWWKDWUHÀHFWHGWKHSHUVSHFWLYHVRIDFWXDOXVHUVGHYHORSPHQWDQGPDUNHWLQJVWDIIZHQWWRDGLVDVWHUVLPXODWLRQIDFLOLW\ZKHUHWKH\ZHUHDEOHWRH[SHULHQFHDVLPXODWHGHDUWKTXDNHUHJLVWHULQJRQWKH-DSDQHVHVFDOHRIVHLVPLFLQWHQVLW\7KLVLQVSLUHG
DZHDOWKRILGHDVDQGZHORRNHGDWQXPHURXVPRGHOV²DUHSHWLWLYHSURFHVVWKDWWRRNFORVHWRWZR\HDUVWR¿QDOO\FRPSOHWH&RPELQLQJYDULRXVPDWHULDOVDQGFRPSRQHQWVWRPD[LPL]HVDIHW\TXDOLW\DQGSHUIRUPDQFHLVZKHUHP\WHDPH[FHOVEXWWKHDELOLW\WRUHÀHFWGLYHUVHWHFKQRORJLHVLQWR
the design and engineering processes and then manufacture the resulting products ourselves is a key competitive strength of the DIC Group.
Industrial Designer; Manager, Safety Materials Technical Group, Safety Materials Technical Department, DIC Plastics, Inc.

Toshiki Nakamura

Ke y P e r s o n f r o m D I C

A female architect told me this was exactly the helmet she has been looking for.
At one of the trade fairs in which we participated, a female architect spotted our display and said that the IZANO helmet was exactly what she had
been looking for. She went on to tell me that she could not stand the helmets usually handed out to visitors at construction sites and had been
searching for a helmet that delivered both professional-level safety and an attractive design, and that could be carried in her bag. In that our aim had
been to develop a helmet that was not only suited to disaster situations but also boasted outstanding versatility, her comments made me extremely
happy. I look forward to developing other innovative products that respond precisely to the diverse needs of our customers.
Manager in Charge, Safety Materials Sales Group, Safety Materials Sales Department, DIC Plastics, Inc.

DIC Report 201733

Yoshitaka Ikegami

Impact testing and analysis data

TO
PI
C

Special Feature: Product Development for a Sustainable Society

Other Efforts to Create Value for Society

Ryojin Industrial Helmets Reduce the Risk of Heatstroke
Against a backdrop of rising ambient temperatures, a consequence of factors such as the worsening impact of global warming
and the urban heat island effect, preventing heatstroke on construction sites on hot days has become an urgent challenge. In
response, DIC Plastics has developed the aerated, heat-blocking and lightweight Ryojin industrial helmet. Ryojin reduces the risk
RIKHDWVWURNHWKDQNVWRDFRPELQDWLRQRIIURQWYHQWLODWLRQSURYLGHGE\IRUHKHDGYHQWVWKDWHI¿FLHQWO\GUDZLQDLUDQGSXVKRXWKHDWLPSURYHGKHDWEORFNLQJSHUIRUPDQFHWKDQNVWRKHDWEDUULHUPDWHULDOWKDWLVNQHDGHGLQWRUDWKHUWKDQFRDWHGRQWRWKHUHVLQDQGDthinner, innovative frame construction that reduces discomfort.

Heat Barrier
Heat barrier materials data is
for white Ryojin helmets

Comparison of Heat-Blocking Performance (Source: DIC test data)
Temperature inside helmet

60.0

Nothing to block heat

55.0
50.0
45.0
40.0

Temperature
difference:

35.0

Heat barrier material

30.0

−12℃

(white Ryojin helmets)

25.0

Start

5

10

15

20

25

30

35
40
Time passed (Minutes)

Note: Conditions: Ambient temperature of 25°C, 65% humidity; Comparison reflects the temperatureof the interior surface of the respective helmets with reflector lamp irradiated onto the helmet’s top outersurface from a height of 20 cm.

Alleviating Neck and Shoulder Pain with Keijin Industrial Helmets
Demand is high for lighter protective equipment—including helmets—to reduce the burden on construction and electrical line workers, who must
ZHDUH[WHQVLYHSURWHFWLYHHTXLSPHQWDQGFDUU\WRROVIRUORQJSHULRGVRIWLPH7RGDWHOLJKWZHLJKWKHOPHWVKDYHEHHQPDGHZLWK¿EHUUHLQIRUFHG
plastics (FRPs). Such helmets deliver both lightness and strength, but do not comply with standards for withstanding voltage, which protective
equipment must satisfy to be approved for use in electrical line work. In response, DIC Plastics developed Keijin, a lightweight industrial helmet
made with acrylonitrile butadiene styrene (ABS), the polymer used in conventional industrial helmets. Keijin helmets are manufactured using
a proprietary in-molding process that molds the shell and liner together in one piece. DIC Plastics is marketing these helmets as an attractive
solution that helps alleviate neck and shoulder pain for workers, an issue of particular concern given the increasing number of women andseniors taking jobs at worksites.

Shell
Liner
Moldedtogether in
one piece

Cross-section of in-molded helmet

DIC Report 201734

Special Feature: Product Development for a Sustainable Society

Actively Promoting the Reuse and Recycling of Plastics
Designed primarily for emergency use, the IZANO CAP boasts an impact-resistant protector, developed in collaboration with materials
manufacturers, that is made from collected and recycled PET bottle caps. DIC also uses recycled plastics in small containers used to store tools
DQGRWKHULWHPVDVZHOODVLQSODQWHUV$VDPHPEHURIWKH-DSDQ+HOPHW0DQXIDFWXUHUV$VVRFLDWLRQ -+0$ ',&3ODVWLFVLVZRUNLQJZLWKWKH
$VVRFLDWLRQ¶VUHF\FOLQJFHQWHUWRSURPRWHWKHUHF\FOLQJRIDQGUHGXFWLRQRIZDVWHIURPHQGRIOLIHKHOPHWV

JHMA’s Recycling
Recy
Program
Users

Retailers/Sales agents
Collected helmets

JHMA
MA re
recy
recyclingcyy
centerPublication, custody and management of manifesto
Subcontractors

Waste disposaldTransportation

Separation

VolumeVol
control
con

PVC,
PVC
PV
VC,, eetc.
VC
tc.
tc

Was
Wa
Waste
asstee pplastic
las
astic
as
sticc

AppropriateA
ppro
roprriatate
tedisposdisposalosal
al(landffillll))(landfill)

ResourceReesourc
rcce
recov
re
recovery
ove
very
ry
(grrinding(grinding)g)

DIC Report 201735

Storage

Disassembly

Cement works
Thermal recycling(conversion into fuel)Material recycling(conversion into raw materials)

TOPIC
Helping Improve Food Packaging to Extend Product Shelf LifeSun 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.

Shelf life and the lightweighting of packaging are business-critical activities for brandowners in today’s marketplace. Under the increasing scrutiny of regulations worldwide,
packaging must protect products, giving them optimal freshness and shelf life, whether in transit, in-store or athome. This applies as much to products with a long shelf life as to fresh produce, which needs packaging thatwill preserve color, fragrance, texture and appeal, as well as ensure that it remains safe to consume.
Many external factors impact negatively on shelf life and freshness, from oxygen and UV light to moisture andodors. Protective packaging needs to be functional. While traditional packaging materials such as glass andmetal are impermeable, their weight can be a disadvantage, increasing transportation costs and carbon footprint.
This has led to the trend of utilizing plastic packaging formats, including pouches, but to create packaging
that enhances shelf life, these must be carefully structured to deliver optimum shelf life, in some cases
using a considerable number of layers.
Social Imperative

The packaging market’s need for products that deliver enhanced shelf life, as well as sustainable, recyclable, metalSun Chemical’s free and waste-reducing solutions, can be addressed through a revolutionary approach that replaces current barrier
Response
technology with printable oxygen-barrier coatings.
Sun Chemical’s SunBar ® (Aerobloc) oxygen-barrier coatings are technically advanced next-generation products
designed to enable the lightweighting of packaging by removing
Polymer film
ethylene vinyl alcohol (EVOH) polymer layers, as well as offering
Polymer film
Ink
®
Ink
improved laminate flexibility. SunBar (Aerobloc) oxygen-barrier
Adhesive
METAdhesivepolymer film
METAdhesivepolymer film
coatings provide a smooth, homogenous, pinhole-free layer that can
Adhesive
Polymer film
Polymer film
be easily overprinted with inks and laminated to a variety of secondary
films. These coatings are cost-effective, compostable and printable
Polymer filmwith either flexo or gravure inks, allowing for lighter-weight packaging,
Polymer film
Barrier coating
Barrier
Ink coatinga reduced carbon footprint and easy application with few changes toInk
Adhesive
Adhesivefilm
Polymercurrent equipment.
Polymer film
Sun Chemical’s recent partnership with acpo, ltd., allows the latter todeliver SunBar ® (Aerobloc) pre-coated films to converters who cannot
coat their own films. acpo specializes in coating thin films with state-ofthe-art equipment. These customers now have access to economically
priced alternative barrier films with improved barrier protection without
the need for capital investment in a coating unit.

VOICE
from theDIC Group

SunBar ® (Aerobloc) can resolve many of the challenges that brand owners are facing.

Brand owners today face a variety of challenges—from sustainability, regulatory complianceand food safety to lightweighting packaging to cut costs—while at the same time enhancing
product shelf life. Coated plastics offer barrier improvements, but also have downsides thatpose substantial hurdles to overcome. SunBar ® (Aerobloc) oxygen-barrier coatings serve as asolution to offset these deficiencies and can resolve many of the challenges that brand owners
are facing in today's competitive marketplace.
Product Manager, Coatings, Sun Chemical Corporation Robert O'Boyle

DIC Report 201736

'LUHFWRUV&RUSRUDWH$XGLWRUVDQG([HFXWLYH2IÀFHUV
(As of April 2017)

Directors

1

Representative Director

3

Director

5 Director

7

Director*

9

Director*

Yoshiyuki Nakanishi Yoshihisa Kawamura Kaoru Ino Takao Suzuki Kazuo Tsukahara
2

Representative Director

Masayuki Saito

4

Director

6 Director

8

Director*

8

6

5

7

9

* Outside

Hitoshi Wakabayashi Hideo Ishii Yukako Uchinaga
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* Outside

3

2XWVLGH'LUHFWRU3URÀOHV
Takao Suzuki

1

2XWVLGH&RUSRUDWH$XGLWRU3URÀOHV
Kazuo Tsukahara

Katsunori Takechi

January 2006 Vice President and Executive Officer, Hitachi, Ltd.
April 2008 Director and Managing Executive Officer, IHI CorporationJune
2016 Representative Executive Officer, Hitachi Transport System, Ltd. April 2012 Representative Director and Executive Vice President, IHI Corporation
Outside Director, DIC Corporation
June 2014 Adviser, IHI CorporationJune
2016 Chairman Emeritus, Hitachi Transport System, Ltd.

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

Yukako Uchinaga

Cindy Yoshiko Shirata

April2004 Director and Senior Executive Officer, IBM Japan, Ltd.
October 2009 Director and Executive Vice President, Benesse Holdings, Inc.
April
2013 Honorary Chairman, Berlitz 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 2017

37

2

4

([HFXWLYH2IÀFHUV

President and CEO

Executive Vice PresidentManaging Executive Officer

Managing Executive Officer

Yoshiyuki Nakanishi

Masayuki Saito

Yoshiaki Masuda

Toshio Hasumi

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

In Charge of General Affairs and Legal Division

President, Polymers Segment
General Manager, Polymers Product Division

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Hitoshi Wakabayashi

Kazunari Sakai

Hideo Ishii

Masami Hatao

President, Fine Chemicals Segment
General Manager, Pigments Product Division

Managing Director, DIC Asia Pacific Pte Ltd

President, Printing Inks Segment
General Manager, Printing Inks Product Division.
and Printing Inks Production Division

General Manager, Marketing Division

Executive Officer

Managing Executive Officer

Executive Officer

Executive Officer

Kaoru Ino

Toshifumi Tamaki

Naoyoshi Furuta

Rudi Lenz

In Charge of Corporate Strategy Division and
Kawamura Memorial DIC Museum of Art

In Charge of Technical Segment (Technical
Administrative Division and Corporate R&D Division)
General Manager, Technical Administrative Division

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

President and CEO, Sun Chemical Corporation

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Masaya Nakafuji

Koji Tanigami

Shinsuke Toshima

Chairman and General Manager,
DIC (China) Co., Ltd.
Chairman, DIC (Shanghai) Co., Ltd.

General Manager, Corporate Planning Department
In Charge of Osaka Branch Office andNagoya Branch Office

President & CEO, DIC Graphics Corporation

President, Application Materials Segment
General Manager, Application Materials
Product Division

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Sakae Yoshida

Taihei Mukose

Kiyotaka Kawashima

Masanobu Mizukoshi

General Manager, Production Administrative
Division

In Charge of Purchasing and Logistics &Information Systems Division
General Manager, Purchasing Department

General Manager, Corporate R&D Division andCentral Research Laboratories

President, Compounds Segment
General Manager, Liquid Compounds
Product Division

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Hiroyuki Ninomiya

Kazuo Hatakenaka

Paul Koek

Myron Petruch

In Charge of Finance and Accounting Division

General Manager and Senior Manager,
Liquid Crystal Materials, Liquid Crystal
Materials Product Division

Chief Financial Officer, Regional Financial
Director, DIC Asia Pacific Pte Ltd

President, Performance Pigments,
Sun Chemical Corporation

Hideki Inouchi

DIC Report 201738

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.

Corporate Governance Organization

Meeting of Shareholders
Appointment

Appointment

Audit

Board of Directors
Nomination Committee

Accounting
audit

President and CEO

Remuneration Committee
Sustainability Committee

Internal Control Department

Board of Corporate Auditors

Accounting auditors

Executive Committee

Product divisions, Marketing Division, Production Administrative Division,
Technical Administrative Division, Corporate R&D Division,
headquarters’ administrative divisions, offices

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
2 Nomination Committee
The Nomination Committee was established as an internal committee of the Board of Directors with the aim of ensuring objectivity in the
QRPLQDWLRQRIFDQGLGDWHVIRUWKHSRVLWLRQRIGLUHFWRUFRUSRUDWHDXGLWRURUH[HFXWLYHRI¿FHUDQGWKHGLVPLVVDORIVHUYLQJGLUHFWRUVFRUSRUDWHDXGLWRUVDQGH[HFXWLYHRI¿FHUV7KHFRPPLWWHHZKLFKVXEPLWVSURSRVDOVWRWKH%RDUGRI'LUHFWRUVPHHWVDVQHFHVVDU\$WSUHVHQWWKUHHRIWKHFRPPLWWHH¶V¿YHPHPEHUVDUHRXWVLGHZKLOHWKHSRVLWLRQRIFRPPLWWHHFKDLUPDQLVFXUUHQWO\¿OOHGE\DQRXWVLGHGLUHFWRU
3 Remuneration Committee
The Remuneration Committee was established as an internal committee of the Board of Directors with the aim of enhancing the objectivityof procedures for determining executives’ remuneration. The committee, which has been entrusted with responsibility for determining the
VDODULHVDQGERQXVHVRIGLUHFWRUVDQGH[HFXWLYHRI¿FHUVPHHWVDVQHFHVVDU\$WSUHVHQWWKUHHRIWKHFRPPLWWHH¶V¿YHPHPEHUVDUHRXWVLGHZKLOHWKHSRVLWLRQRIFRPPLWWHHFKDLUPDQLVFXUUHQWO\¿OOHGE\DQRXWVLGHGLUHFWRUDIC Report 201739

Corporate Governance

4 Executive Committee
The Executive Committee deliberates and resolves issues related to the execution of business activities. In principle, the committee meets
WZLFHPRQWKO\&RPPLWWHHPHPEHUVDUHGLUHFWRUVDQGH[HFXWLYHRI¿FHUVGHVLJQDWHGE\WKH%RDUGRI'LUHFWRUV0HHWLQJVDUHDOVRDWWHQGHGE\
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
DFWLYLW\SODQVDVZHOODVWRHYDOXDWHDQGSURPRWHLQLWLDWLYHV&RPPLWWHHPHPEHUVDUHGLUHFWRUVDQGH[HFXWLYHRI¿FHUVGHVLJQDWHGE\WKH
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
SHUIRUPDQFHRIWKHLUGXWLHVDVRXWVLGHGLUHFWRUVRI',&&RUSRUDWHDXGLWRU<RVKL\XNL0DVHLVDTXDOL¿HGFHUWL¿HGSXEOLFWD[DFFRXQWDQWDQGKDV
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
the accurate disclosure of information and fair auditing. The corporate auditors, accounting auditors and 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
DQGH[HFXWLYHRI¿FHUV7KHIRXUPHPEHU%RDUGRI&RUSRUDWH$XGLWRUVZKLFKLQFOXGHVRQHDWWRUQH\DQGRQHXQLYHUVLW\SURIHVVRUDVRXWVLGH
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 201740

Corporate Governance

System of Internal Controls
1 Status of the System of Internal Controls
7KH',&*URXSPDLQWDLQVDNHHQDZDUHQHVVRIIRXUNH\REMHFWLYHVZKLFKDUHWRHQVXUHWKHHIIHFWLYHQHVVDQGHI¿FLHQF\RILWVEXVLQHVVHVXSKROGWKHUHOLDELOLW\RILWV¿QDQFLDOUHSRUWLQJFRPSO\ZLWKODZVDQGUHJXODWLRQVUHOHYDQWWRLWVEXVLQHVVDFWLYLWLHVDQGVDIHJXDUGLWVDVVHWV
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
VWUXFWXUHWKDWFDQTXLFNO\UHVSRQGWRGRPHVWLFDQGLQWHUQDWLRQDOQRWL¿FDWLRQV
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.
2 Standards 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 201741

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 $QLQGLYLGXDOZKRKDVUHFHLYHGFRQWULEXWLRQVLQDVLQJOH¿VFDO\HDUWKDWH[FHHGVPLOOLRQRUEHORQJVWRDJURXSWRZKLFKWKLV
description applies❻ An accounting auditor, an accountant who has served as an accounting auditor for the DIC Group or an individual who isDQHPSOR\HHSDUWQHURUDVVRFLDWHRIDQDXGLW¿UPWRZKLFKWKLVGHVFULSWLRQDSSOLHV❼ An individual to whom ❻DERYHGRHVQRWDSSO\EXWZKRKDVUHFHLYHGUHPXQHUDWLRQIURPWKH',&*URXSLQH[FHVVRIPLOOLRQ
in a single fiscal year as a provider or professional services, such as consulting, accounting or legal services, or anLQGLYLGXDOZKREHORQJVWRDJURXSWKDWKDVUHFHLYHGUHPXQHUDWLRQLQH[FHVVRIRILWVFRQVROLGDWHGQHWVDOHVLQWKDW\HDU
as compensation for professional services, such as consulting, accounting or legal services❽A corporate executive of another company in the event that an executive officer of DIC is appointed to an outside officer
position at that company
$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 Auditors
Prior to meetings of the Board of Directors, relevant materials are distributed to all directors, full-time auditors, outside directors and outside auditors.
In addition, directors bringing matters before the Board provide explanations in advance to outside directors, while corporate auditors provide
explanations as necessary to full-time auditors.

Other Initiatives to Enhance the Corporate Governance Organization
1 Composition of the Board of Directors

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
a balance among necessary knowledge, experience and capabilities. In light of DIC
Group’s global operations, DIC also strives to ensure diversity in the Board’s composition.
:LWKWKHDLPRUUHLQIRUFLQJLWVFRUSRUDWHJRYHUQDQFHRUJDQL]DWLRQLQ0DUFK',&
increased the number of outside directors on its Board of Directors from two to three.
One member of the Board of Directors is female, as is one member of the Board of
Corporate Auditors.

38.5%
61.5%
Directors of DIC

DIC Report 201742

Outside directors

Corporate Governance

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%

2 Remuneration for Executives
Remuneration for directors is determined by the Remuneration Committee, which takes into account market rates. In addition to executive
FRPSHQVDWLRQZKLFKLVD¿[HGPRQWKO\VXPUHPXQHUDWLRQIRUGLUHFWRUVLQFOXGHVERQXVHVZKLFKDUHOLQNHGWRFRQVROLGDWHGRSHUDWLQJUHVXOWV
and the degree of achievement of individual targets, and share-based compensation, which is linked to medium- to long-term operating
results. Remuneration for corporate auditors is based on internal rules established by the Board of Corporate Auditors, with consideration
given to ensuring a balance with remuneration for directors and corporate auditors, as well as to market rates for remuneration for auditors,
DQGLVGHWHUPLQHGWKURXJKGHOLEHUDWLRQVE\WKHFRUSRUDWHDXGLWRUV,Q-XQH',&LQWURGXFHGDQHZ%RDUG%HQHILW7UXVW %%7 D
performance-based stock ownership plan for executives, thereby clarifying links between remuneration and degree of achievement of
medium- to long-term operating results targets.
Remuneration for Directors and Corporate Auditors in Fiscal Year 2016
Total remuneration
0LOOLRQVRI\HQ

Composition of remuneration
0LOOLRQVRI\HQ
Retirement
Basic salary
Bonus
bonus

Number of directors and corporate auditors

Directors(excluding outside directors)

230

165

64

―

６

Corporate auditors(excluding outside auditors)

57

57

―

―

２

2XWVLGHRI¿FHUV

48

48

―

―

４

1RWH2QHRIWKHVL[GLUHFWRUVUHWLUHGIURPKLVSRVLWLRQDWWKHFRQFOXVLRQRIWKHWK$QQXDO*HQHUDO0HHWLQJRI6KDUHKROGHUVKHOGRQ0DUFK

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WKH
activities of the Board of Directors and the Board of Corporate Auditors, responses to which were analyzed and evaluated by the Board of'LUHFWRUV$VDUHVXOWWKHHIIHFWLYHQHVVRIWKH%RDUGRI'LUHFWRUVZDVFRQ¿UPHGDIC will continue to review and modify the evaluation standards used in evaluating the Board of Directors’ effectiveness. DIC recognizes
PRGLI\LQJVWDQGDUGVUHODWHGWRWKH%RDUGRI'LUHFWRUVDQGHQKDQFLQJFRPPXQLFDWLRQVEHWZHHQWKH%RDUGDQGH[HFXWLYHRI¿FHUVDPRQJ
others, as key challenges and will continue working to promote improvements.

DIC Report 201743

Sustainability Report
Amid rising environmental concerns, including climate change, and increasingly urgent social imperatives, companies today face an evermore diverse array of challenges, including rising awareness of the need to achieve sustainability in a manner that takes into account the
HQYLURQPHQWHFRV\VWHPVDQGVRFLRHFRQRPLFLVVXHV7KH',&*URXSODXQFKHGLWVFRUSRUDWHVRFLDOUHVSRQVLELOLW\ &65 SURJUDPLQ¿VFDO
year 2007. Having further clarified the overall direction of related initiatives as “sustainable growth,” effective from fiscal year 2014 theGroup changed the designation used across its program from “CSR” 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 toenvironmental, social and governance (ESG)-related issues.

Basic Sustainability Policy (Formulated in January 2014)
7KH',&*URXSLVGHGLFDWHGWRFRQGXFWLQJLWVEXVLQHVVZKLOHUHWDLQLQJDVWURQJFRPPLWPHQWWR¿YHNH\FRQFHSWVSUHVHUYLQJVDIHW\and health, 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 that its stakeholders—including its customers, suppliers, local communities, shareholders and investors,
and employees—expect, showing ingenuity and a sense of responsibility. The Group itself will strive to remain an organization that
contributes to sustainability for society and the global environment by capitalizing on its businesses to achieve unfaltering growth,
thereby enhancing its own sustainability.

Sustainability Framework and Themes
ThemesTo foster concrete measure, in fiscal year 2007 the DIC Group’s identified 12 key themes as a framework for implementing its CSR
framework. Subsequently, the Group partially revised these themes in response to changes in the external environment and the progressof its efforts. Today, the Group’s sustainability framework comprises 11 key themes, which are categorized as basic themes, themes that
demonstrate unique capabilities and themes that combine elements of the previous two classifications. The Group implements a broad
range of global initiatives that take into account its responsibility to ensure proper product stewardship, as well as its position as a leadingPDQXIDFWXUHU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

P111
P114
P119
P123

Environment, safety and health
Quality
Human resources management
Sustainable procurement

P57
P96
P99
P108

Compliance
Risk management
Information security

P47
P49
P55

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 Division, the Technical Administrative Division and individual product divisions,sites and overseas and domestic DIC Group companies are charged with pursuing effective sustainability programs by formulating their own
activity plans, ensuring that the Group’s policies permeate their organizations and labor forces and linking sustainability initiatives to businesstargets.

DIC Report 2017

44

The DIC Group’s Sustainability Program

6\VWHPIRU3URPRWLQJ6XVWDLQDELOLW\,QLWLDWLYHVMembers of the Sustainability Committee

The DIC Group’s system for promoting sustainability initiatives
centers on the Sustainability Committee, which answers directly to
WKHSUHVLGHQWDQG&(27KHFRPPLWWHHLVWDVNHGZLWKUHSRUWLQJRQ
the status of sustainability themes, as well as with proposing policies
and programs for advancing sustainability and deliberating on critical
related matters.

Executive vice president, Executive officer in charge of the Finance andAccounting Division, Executive officer in charge of the Corporate Strategy'LYLVLRQ([HFXWLYHRI¿FHULQFKDUJHRIWKH*HQHUDO$IIDLUVDQG/HJDO'LYLVLRQ
General managers of the product segments, General Manager of the Marketing'LYLVLRQ*HQHUDO0DQDJHURIWKH3URGXFWLRQ$GPLQLVWUDWLYH'LYLVLRQ*HQHUDO
0DQDJHURIWKH7HFKQLFDO$GPLQLVWUDWLYH'LYLVLRQ([HFXWLYHRI¿FHULQFKDUJHRI
WKH3XUFKDVLQJDQG/RJLVWLFV ,QIRUPDWLRQ6\VWHPV'LYLVLRQ&(2VRIUHJLRQDO
headquarters, Corporate auditors.
As of January 2017żFormulates Groupwide targets and activity plans
ĺ Submits to the Board of DirectorsżEvaluates sustainability initiatives

Board of Directors

Sustainability Committee

President and CEO

Corporate Communications
DepartmentżPromotes sustainability(coordinates and supports initiatives)
ż$GYDQFHVDZDUHQHVVRIVXVWDLQDELOLW\żServes as secretariat for the Sustainability Committee

Marketing division, product divisions,
Production Administrative Division, Technical Administrative Division,
Corporate R&D Division, headquarters’ administrative divisions, offices,
domestic and overseas DIC Group companies

Sustainability themes

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
December 2010 the DIC Group pledged its support for the 10 principles put forth by the United Nations (UN)and became a signatory to the United Nations Global Compact (UNGC).
Inaugurated in 2000, the UNGC is a voluntary initiative for companies that seek to achieve sustainable
GHYHORSPHQWZRUOGZLGH0RUHWKDQFRPSDQLHVDQGRUJDQL]DWLRQVKDYHSOHGJHGWKHLUVXSSRUWIRUWKH
UNGC in the belief that global sustainable development is possible if companies align their business practices
ZLWKDQGIXO¿OOWKHLUVRFLDOUHVSRQVLELOLWLHVLQJOREDOO\DFFHSWHGSULQFLSOHVLQWKHDUHDVRIKXPDQULJKWVODERUthe environment and the prevention of corruption.
Applying the 10 Principles of the UNGC
The DIC Group Code of Business Conduct conforms withthe 10 principles of the UNGC. The Group is capitalizing on
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*& RIÀFLDOYHUVLRQHuman 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
organizations guidelines for operating in a socially responsible manner.

DIC Report 201745

The DIC Group’s Sustainability Program

7KH$JHQGDIRU6XVWDLQDEOH'HYHORSPHQW$WWKH816XVWDLQDEOH'HYHORSPHQW6XPPLWLQ6HSWHPEHUDSURSRVDOWLWOHG³7UDQVIRUPLQJRXUZRUOGWKH$JHQGDIRU
Sustainable Development,” later summarized as the Sustainable Development Goals (SDGs), was adopted with the participation of
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DQGWDUJHWV$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± WRLGHQWLI\SHUWLQHQW',&LQLWLDWLYHV
For more information on the 6'*VSOHDVHVHHhttp://www.un.org/sustainabledevelopment/sustainable-development-goals/

DIC Report 201746

Basic ThemesCore and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

Compliance
Towards Fair and Transparent Corporate Activities
SDGs Goal 16

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 2016

Achievements in fiscal year 2016

Evaluation

Enhance awareness ofcompliance.

Create and commence implementation of a
DIC Group Code of Business Conduct e-learning
program. Create and commence implementation of a proposal for responding to Japan’s
Corporate Governance Code.

• A contract was concluded with an e-learning
services subcontractor and the content of the
program was confirmed.
• A new Policy on Corporate Governance
was formulated. Response measures were
implemented in line with this policy.

★★

Conduct business fairly.

Eliminate violations of antitrust, anti-corruption
and other key legislation.

No significant violations of the DIC Group
Code of Business Conduct occurred.

★★★

Goals for fiscal year 2017
Achieve target for percentage of employees
participating in the e-learning program (90%).
Encourage use of the whistle-blowing system
to promptly identify and correct complianceviolations.

Continue working to eliminate violationsof antitrust and anticorruption 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JXLGHOLQHVWKHDGKHUHQFHWRZKLFKLWFRQVLGHUVWREHWKHIRXQGDWLRQRIFRPSOLDQFH',&FRPSHOVDOO',&*URXSHPSOR\HHVWRFRQGXFWWKHPVHOYHVLQDFFRUGDQFHZLWKWKHFRGH

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ODZVDQGLQWHUQDWLRQDOUXOHVEXWDOVRSUHVHQWVSULQFLSOHVHVVHQWLDOWRWKHSURIHVVLRQDOFRQGXFWRI',&*URXSHPSOR\HHV7KH',&*URXS&RGHRI%XVLQHVV&RQGXFWKDVVLQFHEHHQWUDQVODWHGLQWRGLIIHUHQWODQJXDJHVWRHQVXUHWKDW',&*URXSHPSOR\HHVZRUOGZLGHVKDUHWKH
*URXS¶VYDOXHVDQGFRPPLWWKHPVHOYHVWRGRLQJZKDWLVULJKWDVZHOODVWRDFWLQJZLWKFRPPRQVHQVHDQGDQXQGHUVWDQGLQJRILQGLYLGXDO
responsibilities, in all aspects of their work.
',&*URXS&RGHRI%XVLQHVV&RQGXFW WEB http://www.dic-global.com/en/csr/pdf/code_of_business_conduct_en.pdf

10 Principles Essential to Professional Conduct❶ Your Rights as an Employee: Respect, Dignity, Privacy❻ Your Relationship with Customers, Suppliers, and External Third Parties❷ Environment, Safety and Health❼ Money Laundering and Anti-Terrorism❸ <RXU5HVSRQVLELOLW\WR$YRLG3RWHQWLDO&RQÀLFWVRI,QWHUHVWDQGWR3URWHFW*URXS3URSHUW\❽ )RUFHG/DERU&KLOG/DERU&RQÀLFW0LQHUDOV❹ Anti-Corruption and Anti-Bribery Policy❾ ,QVLGHU7UDGLQJ❺ <RXU5HODWLRQVKLSZLWK*RYHUQPHQWVDQG*RYHUQPHQW2I¿FLDOV❿ 3URSHU$FFRXQWLQJDQG,QWHUQDO&RQWUROV5HODWLQJWR)LQDQFLDO5HSRUWLQJ

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❶ Training focused on legal issues to improve compliance awareness is provided for employees at point of hire, when promoted and before
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employees.
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Compliance

Establishing and Operating a Whistle-Blowing System
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retaliation, and is working to ensure the system functions in a proper manner.
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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
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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
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the proper taxes in the proper jurisdictions as appropriate for its business operations.

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Risk Management
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Objective of initiatives

Ensure business continuity for the
DIC Group.

Goals for fiscal year 2016

• Foster risk management for each Group
company, mainly through the Risk
Management Subcommittee.
• Regarding governance at subsidiaries,
prepare a system that incorporates
internal controls.
• Continue to prepare and renew BCPs andimplement training to enhance viability.
Prepare and renew manuals and plan andundertake various training programs toensure that the corporate headquarters’ crisis
management system functions effectively.

Achievements in fiscal year 2016
• Awareness of the Group risk management policy andrisk management initiatives was encouraged among
Group companies in Japan and support provided forcompanies’ efforts.
• The formulation of response measures was completed for
15 priority risks. Regarding governance at subsidiaries,
steps were also taken to reinforce governance forsubsidiaries by reviewing standards for appointing
directors, management guidelines and training, among
others. Efforts to strengthen internal controls through theidentification of priority risks continued.
• Drills and training were implemented for productdivision BCP officers and product division–specific
BCPs were revamped.
• To ensure the smooth functioning of task forces,
manuals, systems and equipment were improved andreplaced and map-based simulation exercises wereconducted for members to raise the awareness oftask force members and increase the effectiveness ofthe crisis management configuration. A crisis
management configuration was formulated,equipment provided and disaster drills conductedbased on a hypothetical scenario involving a majordisaster at the corporate headquarters.

Evaluation★★★

Goals for 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.

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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.

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management policy and a risk management system, efforts that are designed to further enhance corporate value Groupwide. In a bid to ensure the effective
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5LVN0DQDJHPHQW3ROLF\❶ 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.

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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.7KH',&*URXSFRQVWUXFWVDQGYDOLGDWHVULVNPDQDJHPHQWV\VWHPVE\UHSHDWLQJWKHSODQ±GR±FKHFN±DFW 3'&$ F\FOH
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 201749

Risk Management,Q ILVFDO \HDU  ',& EHJDQ HQFRXUDJLQJ DZDUHQHVV RI LWV ULVN PDQDJHPHQWpolicy across the global DIC Group by publishing information on the policy, as
well as on risk management initiatives, on its in-house electronic noticeboard andthrough the Group newsletter, DIC Plaza. In Japan, the Company also sought topromote and raise awareness through the provision of training to plant generalmanagers and senior executives of domestic Group companies.

Meeting of the Risk Management Subcommittee

5LVN'HÀQLWLRQDQG5LVN2ZQHUVThe DIC Group recognizes risks in threeprincipal categories. The Group manages
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responsible for implementing responses.

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activities

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Ɣ Product divisions
Ɣ Production and technicaladministrative divisions
Ɣ Purchasing departments

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

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

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management
activities

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These are risks arising from natural events and social
circumstances.

Ɣ Corporate headquarters’
administrative divisions
Ɣ Corporate planningdepartments
Ɣ Risk Management ConferenceƔ Corporate headquarters’
administrative divisions
Ɣ Sites

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In the process of formulating the risk management policy, the Risk Management Subcommittee established the DIC Group risk management system. Thissystem begins with the distribution to directors of 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 andUHYLHZHGE\H[HFXWLYHVWKHUHE\FRPSOHWLQJWKH3'&$F\FOHZLWKWKHDLPRIIDFLOLWDWLQJRQJRLQJULVNUHGXFWLRQ',&SRVLWLRQHG¿VFDO\HDUV±DVWKHLQDXJXUDOSKDVHRIULVNPDQDJHPHQWSUHGLFDWHGRQWKHQHZV\VWHPZLWKVXEVHTXHQWVWHSVWREHUHSHDWHGDQQXDOO\leveraging knowledge and experience gained. Based on survey results, the subcommittee determines priority risks. The administrative groups that comprise the
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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%&0FRUSRUDWHKHDGTXDUWHUVZLOOVSHDUKHDGWKHSUHSDUDWLRQRI%XVLQHVV&RQWLQXLW\3ODQQLQJ %&3 *XLGHOLQHVIRUODWHUDOGHSOR\PHQWDFURVVWKH',&*URXS
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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of response measures

February: A list of response measures is prepared
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Risk management policy
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rules and manuals

45Management ofrisks

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performance

DO

CHECK

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

DIC Report 2017

50

6
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systemExecutive review

ACT
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,Q¿VFDO\HDUWKH5LVN0DQDJHPHQW6XEFRPPLWWHHFRPSOHWHGWKHLPSOHPHQWDWLRQRIULVNPDQDJHPHQWSODQPHDVXUHVWRDGGUHVVRIWKHSULRULW\risks, that is, all but “governance of subsidiaries,” which is particularly broad in scale and will thus be carried over. The effectiveness of measures was
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'&$F\FOHWDNLQJGHFLVLYHVWHSVWRIXUWKHUHQKDQFH',&¶VDELOLW\WRPDQDJHWKHVHULVNV
',&¶V¿UVWVWHSLQ¿VFDO\HDUZDVWRLQFRUSRUDWHPDWHULDOLW\LQWRWKHULVNLGHQWL¿FDWLRQSURFHVV$VDUHVXOWWKH&RPSDQ\LGHQWL¿HGVL[QHZSULRULW\ULVNV
WREHDGGUHVVHGLQ¿VFDO\HDUDOORIZKLFKKDYHWKHSRWHQWLDOWRQHJDWLYHO\LPSDFWEXVLQHVVRSSRUWXQLWLHVDQGRUJURZWKLIQRWDGGUHVVHGDSSURSULDWHO\The Company is currently taking decisive steps to address these risks.

1HZ3ULRULW\5LVNV❶ ,QVXI¿FLHQWDELOLW\WRFUHDWHQH[WJHQHUDWLRQEXVLQHVVHV ❷ ,QVXI¿FLHQWPDQDJHPHQWRIUHVSRQVHVWRVWULFWHUUHJXODWLRQVIRUFKHPLFDOVXEVWDQFHV❸ Inadequacy of/delays in efforts to foster human resources ❹ ,QDGHTXDF\RIGHOD\VLQHIIRUWVWRHVWDEOLVKDQRSWLPDOJOREDOSURGXFWLRQFRQ¿JXUDWLRQ❺ Inadequacy of global R&D capabilities ❻ Inadequacy of/delays in BCM ❼ *RYHUQDQFHRIVXEVLGLDULHV FDUULHGRYHUIURP¿VFDO\HDU([DPSOHVRI5HVSRQVH0HDVXUHVWR6HOHFWHG3ULRULW\5LVNV )LVFDO<HDUV²Risk

3RVVLEOHQHJDWLYHLPSDFWV

3ULQFLSOHUHVSRQVHPHDVXUHVCurrency and interest rateÀXFWXDWLRQV&XUUHQF\UDWHV VKDUSLQFUHDVHLQWKHYDOXHRIWKH\HQ 'HFUHDVHLQWKH
SUR¿WDELOLW\RIH[SRUWV,QWHUHVWUDWH LQFUHDVH ,QFUHDVHLQLQWHUHVWEXUGHQ● &XUUHQF\UDWHV5HYLHZVWUXFWXUHRIIRUHLJQFXUUHQF\±GHQRPLQDWHGDVVHWVDQG
liabilities; invest in emerging economies; promote the centralized management offoreign exchange risk for corporate transactions● Reduce interest-bearing debt

)DFLOLW\UHODWHGDFFLGHQWV

6HULRXVLQGXVWULDODFFLGHQWH[SORVLRQDQG¿UHRFFXSDWLRQDODFFLGHQW
damage due to earthquake or power failure● Provide training regarding pertinent laws and regulations● Provide safety training; promote risk assessment and process safetyPDQDJHPHQW 360● Prepare restoration plansIntellectual property

Litigation related to intellectual property infringement; suspension of businessor R&D; indemnity payments● Increase acquisition of strategic patents that keep competitors at bay● Improve patent information-collecting capabilities in the PRC, ROK and Taiwan

Earthquakes, tsunami,
volcanic eruptions

Death and injuries arising from major earthquakes, tsunami or volcanic
eruptions; inadequate efforts to assist stranded commuters and delays in
the restoration of operations; loss of management resources; suspension ofoperations; restoration costs● Collect basic information and develop response framework for domestic
production facilities● 3URYLGHVXSSRUWIRUHIIRUWVWRDVVHVVWKHHIIHFWLYHQHVVRISURGXFWVSHFL¿F%&3V

Governance of subsidiaries

Increase in control risks affecting the execution of subsidiaries’ businesses
attributable to a weakening of awareness of the meaning of and/or methodologies
used in risk management on the part of subsidiaries’ presidents● Create and set down prerequisites for the appointment of directors, management
protocols and the suitability of executives at subsidiaries● (QDFWUXOHVDQGVWDQGDUGVRIFRQGXFWIRUPDQDJHPHQWRIDI¿OLDWHGFRPSDQLHVInformation security

6LJQL¿FDQWORVVRIGDWDGXHWRSK\VLFDOGDPDJHYLUXVHVUHVXOWLQJIURP
access to malicious websites; theft or leak of information resulting fromdeliberate or negligent individual actions● Update antivirus system for computers● Rebuild network systems● Promote employee training regarding rules and guidelines

Pandemics

Depletion of personnel due to rapid increase in contraction among
HPSOR\HHVDQGWKHLUIDPLOLHVRI¿FLDOUHVWULFWLRQVRQPRYHPHQWKLQGHULQJthe ability to commute, take domestic or overseas business trips and/or
conduct regular operations● &RQ¿UPFULVLVUHVSRQVHSUHSDUDWLRQVDWLQGLYLGXDOVLWHVSUHSDUHFULVLVPDQDJHPHQW
frameworks and manuals; establish Groupwide crisis management infrastructure● &UHDWHSURGXFWVSHFL¿F%&3VEDVHGRQDK\SRWKHWLFDOSDQGHPLFVFHQDULRDIC Report 201751

Risk Management

TOPICS,QLWLDWLYHVWR6WUHQJWKHQ*RYHUQDQFHDW6XEVLGLDULHV
7KH',&*URXSFRPSULVHVFRPSDQLHVLQFRXQWULHVDQGWHUULWRULHV7ZRWKLUGVRIWKH*URXS¶VHPSOR\HHVDUHORFDWHGDWDQGPRUHWKDQKDOIRILWVFRQVROLGDWHGQHWVDOHVare generated by, bases outside of Japan. DIC recognizes that ensuring subsidiaries share the same values and vision—despite differences in culture, social systems andcustoms—and maximize 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 is a riskthat the DIC brand image could be negatively affected, causing damage to the Group as a whole. DIC has thus positioned governance at subsidiaries as a crucial risk requiring
RQJRLQJLQLWLDWLYHVDQGZLOOFRQWLQXHWRSURPRWHHIIRUWVWRUHLQIRUFHWKHJRYHUQDQFHFRQ¿JXUDWLRQVRIVXEVLGLDULHVZRUOGZLGH

)UDPHZRUNIRU6XSSRUWLQJWKH0DQDJHPHQWRI6XEVLGLDULHV$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(QKDQFHWKHYLVLELOLW\RI*URXSJRYHUQDQFHV\VWHPV7KH',&*URXS¶VPDWUL[OLNHJRYHUQDQFHRUJDQL]DWLRQSRVLWLRQVSURGXFWVRQRQHD[LVDQGUHJLRQVRQWKHRWKHU6WHSV
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.
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*RYHUQDQFHDW6XEVLGLDULHV
subsidiaries’ boards of directors, which are responsible for supervising executives’ performance of their duties,
are being established, as are guidelines for board administration.
❸(QVXUHDSSURSULDWHEHKDYLRUE\VXEVLGLDULHV¶H[HFXWLYHV3UHUHTXLVLWHVIRUWKHDSSRLQWPHQWRIH[HFXWLYHV
including leadership skills, managerial competence and awareness of compliance, are being established.
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174 Subsidiaries and Affiliates
setting KPIs for subsidiaries that align with DIC targets, establishing criteria for the provision of support and① Enhance the visibility of Group governance systems
management assistance by the parent company’s functional departments and determining acceptable operating② Ensure appropriate behavior by subsidiaries’ boards of directors
levels.
Ensure appropriate behavior by subsidiaries’ executives③④ Implement measures that help subsidiaries ensure rational

5HVSRQGLQJWR1HZ/DZVDQG5HJXODWLRQVTransfer price taxation is one of the principal challenges facing the DIC Group’s subsidiaries. With transfer
SULFLQJFRPSDQLHVULVNGRXEOHWD[DWLRQRQWUDQVDFWLRQVZLWKLQWKH*URXSWKDWLVRQEHLQJWD[HGRQSUR¿WVLQ
WKHFRXQWU\RIGRPLFLOHDQGWKHFRXQWU\WRZKLFKLWWUDQVIHUVLHVHOOVLWVSURGXFWV$VDFRQVHTXHQFHRIWKH
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uniform information to local tax authorities in all of the countries in which it has operations. In response, the&RPSDQ\ZLOOZRUNZLWKWKH*URXS¶VRYHUVHDVUHJLRQDOKHDGTXDUWHUV ',& &KLQD &R/WGDQG',&$VLD
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front-line operations

The DIC WAY

VOICEExecutive Oﬃcer (In charge of Finance and Accounting Division)

Hiroyuki Ninomiya

m

th

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I C G ro u pFro%(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.

*RYHUQDQFHOHYHUDJHVFRPPRQ*URXSYDOXHVDQGPHFKDQLVPVWRFUHDWHDQRSHUDWLQJ
IRXQGDWLRQWKDWDOORZVSHRSOHRQWKHIURQWOLQHVWRIRFXVRQWKHLUUHVSRQVLELOLWLHV)RUDQRUJDQL]DWLRQOLNHWKH',&*URXSZKLFKKDVWZRWKLUGVRILWVHPSOR\HHVRYHUVHDVWKHSK\VLFDODQG
SV\FKRORJLFDOGLVWDQFHEHWZHHQFRUSRUDWHKHDGTXDUWHUVLQ7RN\RDQGEDVHVRYHUVHDVPDNHVLWGLI¿FXOWIRUHYHU\RQH
to feel like they are part of single global team. However, I believe that creating such a sense of solidarity is crucial.
%\FDSLWDOL]LQJRQVKDUHGYDOXHVDQGYLVLRQWRSURPRWHVXVWDLQDEOHEXVLQHVVH[SDQVLRQDQGPD[LPL]HSUR¿WDELOLW\*URXSFRPSDQLHVFDQ
both make their presence felt and contribute to continued growth for the DIC Group as an attractive and admired corporate organization. Thisis the true objective of governance. Making certain that all employees—whether at corporate headquarters or a Group company—feel they are
DOORQWKHVDPHWHDPDQGVHWWLQJFRPPRQ*URXSZLGHUXOHVWRSURPRWHFRRSHUDWLRQZLOOHQDEOHXVWRPD[LPL]HDQGEHQH¿WIURPV\QHUJLHVWe will continue working to create an operating foundation that allows leaders on the front lines at each of the Group’s bases to focus on
WKHLUUHVSRQVLELOLWLHVZLWKRXWEHLQJLQXQGDWHGE\HYHU\GD\PDQDJHPHQW±UHODWHGPLQXWLD,DPFRQ¿GHQWWKDWFUHDWLQJDZRUNHQYLURQPHQWWKDW
inspires pride in each and every employee will help further enhance the DIC Group’s appeal and drive growth.

DIC Report 201752

Risk Management%&0
Drawing on lessons from the Great East Japan Earthquake, the DIC Group now accounts for all risks with the potential to interrupt business continuity
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other facility accidents; and major corporate scandals. The Group comprehensively estimates the probability of each risk and its impact on management,
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 disaster-stricken areas, and producing andrenewing BCPs for each key product. The Group facilitates and maintains a system to maintain business continuity through training drills. These encompass
GULOOVIRUVDIHW\FRQ¿UPDWLRQHPHUJHQF\UDGLRZDUQLQJVFRPSUHKHQVLYHGLVDVWHUVGLVDVWHUPDSH[HUFLVHVDQG%&3%&0LQ)LVFDO<HDU,QLWLDWLYHVLQ¿VFDO\HDULQFOXGHGUHQHZLQJ%&3V7KLVLQYROYHGSURYLGLQJWUDLQLQJ FODVVHVDQGWKHRUHWLFDOWUDLQLQJ IRUDOOSURGXFWGLYLVLRQ%&3RI¿FHUVDQGSUHSDULQJXSGDWHGSODQV7KHJRDOVKHUHZHUHWRHQVXUHWKDW%&3RI¿FHUVVKDUHDFRPPRQXQGHUVWDQGLQJRIEXVLQHVVULVNVDQGWRUHLQIRUFHUHFRJQLWLRQ
of the need to address business continuity as an inherent aspect of everyday operations by predicting potential crises and making preparations, thereby
enabling DIC to leverage limited resources to secure supply chains and restore sites to operability in the aftermath of a major disaster.
$FWLQJWKURXJKWKH5HVSRQVLEOH&DUH'HSDUWPHQW',&SURPRWHGRQJRLQJHIIRUWVWRUHLQIRUFHUHVSRQVHVWRULVNVVSHFL¿FWRJOREDOFKHPLFDOVPDQXIDFWXUHUV
including those associated with process safety and disaster prevention, the management of chemicals substances and export controls. The Company
also took steps to prevent patent disputes and strengthen competitiveness, expanding its intellectual property database to avoid the danger of violating theintellectual property rights of other companies and promoting ongoing efforts to secure intellectual property rights and the use of “black boxing” to protect for
its own technologies.

&RPSOHPHQWDU\3URGXFWLRQ&DSDELOLWLHV
7KH',&*URXSUHFRJQL]HVWKHQHHGWRHQVXUHLWFDQIXO¿OOLWVVXSSO\UHVSRQVLELOLWLHVHYHQLQWKHHYHQWRIGDPDJHWRIDFLOLWLHVIURPDPDMRUQDWXUDOGLVDVWHUDQGWKXVLQFRUSRUDWHVWKLVSHUVSHFWLYHLQWRLWV%&3V2QHZD\LWVHHNVWRGRVRLVWKURXJKFRPSOHPHQWDU\SURGXFWLRQFDSDELOLWLHV)RUH[DPSOHWKH*URXS¶VLC production facilities in Japan and the PRC collaborate on the implementation of BCPs, using a common emergency response manual and holding regularresponse simulation sessions. Group pigment production facilities have developed a framework that involves continuous cooperation to plan emergency
response measures.

BCP Initiatives• Emergency response manual• Response simulation sessions

Complementary production
capabilities for LCs

DIC Report 2017

53

Risk Management

(PHUJHQF\5HVSRQVH([HUFLVHVDQG'ULOOVThe DIC Group has developed and maintains a system designed to ensure its ability to minimize damage in the event of a disaster, as well as
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emergency radio warning drills, comprehensive disaster drills, map-based simulation exercises and BCP drills.

Comprehensive disaster drill at the corporate headquarters

Task force map–based simulation exercise

BCP drill and training

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the corporate headquarters in Tokyo. This compact booklet, which is distributed to these employees andtheir families, provides instructions on advance disaster preparations and details corporate headquarters’
RYHUDOOHPHUJHQF\UHVSRQVHIUDPHZRUNDVZHOODVWKHUHVSRQVLELOLWLHVRILQGLYLGXDOÀRRUVDQGGHSDUWPHQWVin an emergency situation. Space is also provided for employees and their families to provide contact
information for use in the event of an emergency, while the compact size ensures portability.

$6WDNHKROGHU·V3HUVSHFWLYH

7KHDVVLVWDQFHRIFRPSDQLHVZLWKVWURQJORFDOURRWVSOD\VDNH\UROHLQFUHDWLQJVDIHVHFXUHFRPPXQLWLHV
DIC is involved in a wide range of social contribution activities. We are delighted to have their cooperation in efforts aimed at ensuring the safety and security
RIRXUFRPPXQLW\$VDPHPEHURIWKHORFDOQHLJKERUKRRGDVVRFLDWLRQWKH\DVVLVWZLWKWKHDQQXDO1LKRQEDVKL&KRPH1LVKLPDFKL1HLJKERUKRRG$VVRFLDWLRQ&RPSUHKHQVLYH'LVDVWHU'ULOO²ZKLFKLVKHOGXQGHUWKHJXLGDQFHRIWKH1LKRQEDVKL)LUH6WDWLRQ²E\SURYLGLQJWKHYHQXHDQGDGPLQLVWUDWLYHVXSSRUWIRUWKHGULOOThey also support local disaster preparation efforts in other ways, including by allowing the installation of a local emergency supplies depot inside the DIC Building.
7KDQNVWRWKHFRRSHUDWLRQRIORFDOFRPSDQLHVVXFKDV',&RXUDVVRFLDWLRQ¶VGLVDVWHUSUHSDUDWLRQHIIRUWVFRQWLQXHWRHDUQKLJKPDUNV,QZHUHFHLYHGD7RN\R
)LUH'HSDUWPHQW6XSHULQWHQGHQW±*HQHUDO¶V$ZDUGIRUH[FHOOHQFH:HDOVRUHFHLYHGWKH0LQLVWHU¶V$ZDUGZKLFKLVWKHWRSKRQRULQWKH0LQLVWU\RI,QWHUQDO$IIDLUVand Communications’ awards recognizing community disaster prevention efforts. I am very proud of our achievement, but of course I recognize that there is always
PRUHWRGR,ORRNIRUZDUGWR',&¶VFRQWLQXHGJURZWKDQGHYROXWLRQDVDFRPSDQ\ZLWKVWURQJORFDOURRWVDQGWRWKHIXWXUHRIWKLVPXWXDOO\EHQH¿FLDOUHODWLRQVKLSComprehensive Disaster Drill

DIC Report 2017

54

Chairperson, Nihonbashi
3-Chome Nishimachi
Neighborhood Association

Kiichiro Nonaga

Basic ThemesCore and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

Information Security
Initiatives to Ensure Information Security

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

Establish a global information
security framework.

Goals for fiscal year 2016

Achievements in fiscal year 2016

・Support ongoing efforts to uphold and ・The introduction of information security
deploy information security managemanagement guidelines was completed
ment configurations for the Asia–Pacificin Greater China, while efforts to deploy
region and Greater China.
such guidelines continued in the・Promote ongoing measures to achieve
Asia–Pacific region.
consistency between the Sun Chemical ・A comparative study of the information
and DIC Group information security
security rules, standards and promotion
guidelines and management configurasystems of the Sun Chemical Grouptions and encourage application.
and DIC was completed.
・Revise and enforce rules that respond ・Common ICT-related usage and management
guidelines were formulated for Japan, theto the growth of cloud computing andAsia–Pacific region and Greater China.
other new ways of sharing information.

Evaluation

Goals for 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.

Presentations
for employees

Basic Approach to Information Security
The DIC Group has positioned information security as a key management
priority and established a Basic Policy on Information Security, which isfounded on its recognition that protecting information assets that belong toor are managed by the Group is essential to its ability to conduct business.
In line with this policy, DIC has formulated and implemented confidential
information management regulations and information management
JXLGHOLQHV 7KHUHJXODWLRQVDQGJXLGHOLQHVZHUHFUHDWHGLQ-DSDQLQ¿VFDO\HDU'HSOR\PHQWLQ$VLDDQG2FHDQLDFRPPHQFHGLQ¿VFDO\HDU
The DIC Group works to ensure that directors and employees use theGroup’s information assets appropriately in the course of business andappropriately handle confidential information. The Group also pursues
continuous improvements by conducting internal audits to confirm current
issues and identify risks.

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

Globally Maintaining and Enhancing Information Security
Initiatives in Japan
Since fiscal year 2014, DIC has promoted revisions aimed at creating a system for responding to targeted cyber attacks and other critical risks to its
LQIRUPDWLRQVHFXULW\,Q¿VFDO\HDUWKH',&*URXSFRQWLQXHGZRUNLQJWRXSGDWHUXOHVIRUDGGUHVVLQJVHFXULW\WKUHDWVDULVLQJIURPFORXGFRPSXWLQJ
smart devices and other emerging IT technologies. The Group will press forward with efforts to revise rules to accommodate changes in working styles andother developments attributable to the progress of digitization.
The DIC Group currently provides information security training to employees at point of hire and when promoted, which is completed by approximately 200
individuals annually. Preparations are also under way to develop an e-learning program and implement information security awareness initiatives targeting
employees Groupwide.
Initiatives in Asia and Oceania,Q¿VFDO\HDUWKH',&*URXSIRUPXODWHGLQIRUPDWLRQDQGFRPPXQLFDWLRQVWHFKQRORJ\ ,&7 XVDJHDQGPDQDJHPHQWJXLGHOLQHVIRU$VLDDQG2FHDQLD%\SURPRWLQJWKHGHSOR\PHQWDQG¿UPHVWDEOLVKPHQWRIWKHVHUXOHVWKH*URXSZLOOFRQWLQXHZRUNLQJWRUHLQIRUFHWKHLQIRUPDWLRQVHFXULW\PHDVXUHVRI',&
Group companies in these regions.

DIC Report 201755

Information Security

Initiatives in the Americas and Europe
Having recognized information security as a challenge of vital importance, the Sun Chemical Group, which oversees operations in the Americas and(XURSHZRUNVFRQWLQXRXVO\WRHQVXUHEXVLQHVVFRQWLQXLW\DQGPLWLJDWHULVNVWRLWVLQIRUPDWLRQV\VWHPVDQGWKHFRQ¿GHQWLDOLW\LQWHJULW\DQGDFFHVVLELOLW\RILWV
GDWD,Q¿VFDO\HDUWKH6XQ&KHPLFDO*URXSWRRNVWHSVWRH[SDQGLWVH[LVWLQJLQIRUPDWLRQVHFXULW\V\VWHPDQGPDGHLQIUDVWUXFWXUHLQYHVWPHQWVDLPHG
DWIDFLOLWDWLQJSURPSWSRVWGLVDVWHUUHFRYHU\7KHJURXSDOVRPRGL¿HGLWVLQIRUPDWLRQVHFXULW\SROLF\DQGFRXQWHUPHDVXUHVWRIDFLOLWDWHHIIHFWLYHUHVSRQVHVWR
ever-more extensive and sophisticated information security risks.

Safeguarding Information Security Environments in Asia and Oceania

Revi Septiana RachmantheD

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IT Manager, PT. DIC Graphics and Head of the IT Help Desk for Southeast Asia and Oceaniam

As part of a larger effort to advance and strengthen its global information security capabilities, the DIC Group has developed an overall plan for introducing
DVHFXULW\V\VWHPIRU$VLDDQG2FHDQLDEDVHGRQDXQL¿HGLQIUDVWUXFWXUH,Q¿VFDO\HDUWKH*URXSZLOOEHJLQEXLOGLQJFRXQWU\VSHFL¿FPDQDJHPHQWsystems with the aim of combating, among others, computer viruses and software vulnerabilities.

We are working to ensure and enhance information security in Southeast Asia and Oceania.
,QDGGLWLRQWREHLQJLQFKDUJHRIWKH,7KHOSGHVNIRU6RXWKHDVW$VLDDQG2FHDQLD,DPLQYROYHGLQHIIRUWVWRGHYLVHDQG¿UPO\HVWDEOLVKYDULRXVLQIRUPDWLRQVHFXULW\measures across the region.
Ensuring internal information security is critical to the successful expansion of a company’s operations. For this reason, we must devote considerable attention to creating aframework for protecting the various types of data we handle. Accordingly, we are promoting regional infrastructure improvements with the aim of guaranteeing a superior level of data security.
:HDUHDOVRZRUNLQJWRGHSOR\DQG¿UPO\HVWDEOLVKUHJLRQDO,&7XVDJHDQGPDQDJHPHQWJXLGHOLQHVWRIXUWKHULPSURYHWKHVHFXULW\RIRXULQIRUPDWLRQDIC Report 201756

Basic ThemesCore and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

Environment, Safety and Health (ESH)
Toward the Achievement of a Sustainable Society
SDGs Goals 3, 6, 7, 12, 13, 14 and 15

Promoting Responsible Care
Basic Philosophy
As a company that manufactures and sells chemical substances, DIC sets standardized safety
regulations for ESH initiatives. The Company is working to exceed regulatory standards andfully disclose results. Annual measures augment its core policy.

Initiatives to Date
Having established its Principle and Policy for the Environment, Safety and Health in 1992, in 1995 DIC pledged to implement
WKHSUHFHSWVRI5HVSRQVLEOH&DUH6LQFHUHDI¿UPLQJLWVVXSSRUWIRU5HVSRQVLEOH&DUHPDQDJHPHQWLQ-DQXDU\E\VLJQLQJ
the CEO’s Declaration of Support for the Responsible Care Global Charter, the Company has promoted constant improvements.
,Q',&DPHQGHGLWV3ULQFLSOHDQG3ROLF\IRUWKH(QYLURQPHQW6DIHW\DQG+HDOWKDQGUHQDPHGLWWKH3ROLF\IRUWKH
Environment, Safety and Health. The name was subsequently revised to the Environment, Safety and Health Policy.

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

Environment, Safety and Health Policy
As a responsible corporate citizen and as a company that manufactures and sells chemical substances, DIC recognizes that care for the environment,
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
businesses and contributes to the global environment, including biodiversity, by creating environmentally sound products and technologies.
❶ We take responsibility for the environmental, safety and health implications of products throughout their life cycles.
❷ We continuously set goals and targets for environmental, safety and health improvements.
❸ We comply strictly with laws, regulations and agreements relative to the environment, safety and health. For countries lacking suchlaws, we prioritize safe operations and protection of the environment.
❹ We systematically provide education and training on the environment, safety and health.
❺ :HSUHSDUHV\VWHPVDQGDXGLWLQWHUQDOO\WREHQH¿WWKHHQYLURQPHQWVDIHW\DQGKHDOWKWe disclose these policies internally and externally and ask that all DIC Group companies observe them. The abovementioned “safety”
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
DVVHVVLQJSURGXFWVSHFL¿F(6+ULVNVDQGVKDULQJ¿QGLQJVWRJHWKHUZLWKLQIRUPDWLRQRQDSSURSULDWHKDQGOLQJZLWKVWDNHKROGHUVZLWKWKHDLPRIUHGXFLQJ
the ESH impact of products over their entire life cycle—i.e., from the development of chemical substances through to procurement, production, transport,sale, use and disposal or recycling.

Applying the PDCA Cycle to Eight Responsible Care Codes
The DIC Group manages its Responsible Care initiatives in a uniform manner using a management system comprising eight codes, six of which are
PDQGDWHGE\WKH-DSDQ5HVSRQVLEOH&DUH&RXQFLO WKH¿UVWVL[FRGHVOLVWHG DQGWZRRIZKLFKZHUHGHYLVHGLQWHUQDOO\ WKHVHYHQWKDQGHLJKWKFRGHV
OLVWHG ,QXQGHUWDNLQJWKHVHLQLWLDWLYHV',&DQG',&*URXSFRPSDQLHVOHYHUDJHWKH*URXS¶V,62FHUWLIHGHQYLURQPHQWDOPDQDJHPHQWV\VWHP,Q
DGGLWLRQWRXVLQJWKHVHWZRV\VWHPVFHUWDLQRYHUVHDV*URXSFRPSDQLHVDUHDOVRZRUNLQJWRVHFXUH,62FHUWL¿FDWLRQIRUWKHLURFFXSDWLRQDOKHDOWKDQGVDIHW\management systems through ongoing efforts to enhance their Responsible Care capabilities.

DIC Report 2017

57

ESH

❶ (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\HHV❹ &KHPLFDODQGSURGXFWVDIHW\ PDQDJHPHQWRIULVNVDVVRFLDWHGZLWKFKHPLFDOV❺ 6DIHW\LQORJLVWLFV UHGXFWLRQRIFKHPLFDOULVNVDVVRFLDWHGZLWKWKHGLVWULEXWLRQRIFKHPLFDOV❻ 'LDORJXHZLWKVRFLHW\ FRPPXQLFDWLRQZLWKORFDOFRPPXQLWLHVUHJDUGLQJWKHHQYLURQPHQWVDIHW\DQGKHDOWK❼ &RPSOLDQFH VWUHQJWKHQLQJH[SRUWVHFXULW\FRQWURODQGGHWHFWLRQIUDPHZRUNDQGIRVWHULQJRIRI¿FHUVUHVSRQVLEOHIRUFKHPLFDOVXEVWDQFHUHJXODWRU\LQIRUPDWLRQ ❽ 0DQDJHPHQWV\VWHP IRUXQLI\LQJWKHDERYHFRGHVDVDV\VWHP

Reviews
conducted
bymanagement

Act

Check

Responsible Care
Initiatives
Improve

Do

Plan

Implement/
manageFormulateplans

Annual Activity Plans
The DIC Group formulates annual Responsible Care activity plans, translating them into English and Chinese. Based on its activity plans for¿VFDO\HDUWKH*URXSVRXJKWWRHQVXUHWKDW*URXSFRPSDQLHVRSHUDWLQJLQHDFKUHJLRQGHYHORSHGWKHLURZQVSHFL¿FSODQVHQFRXUDJLQJ
them to promote Responsible Care initiatives and contribute to an environment-friendly society through its manufacturing activities.

Fiscal Year 2016 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 2016
❶ Occupational safety and health/disaster prevention

In line with the DIC Group’s fundamental objective, which remains the achievement of an accident-free workplace, set regional targets forUHGXFLQJWKHLQFLGHQFHRIRFFXSDWLRQDODFFLGHQWVLQ¿VFDO\HDU
❷ Environmental preservation

In line with the DIC Group’s goal of reducing its impact on the environment, set regional targets for lowering environmental impact andimplement measures to facilitate the achievement thereof.
❸ Logistics safety

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

Promote the provision of information to stakeholders regarding the appropriate handling of products over their entire life cycles.
❺ Communication with society

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

Make use of the PDCA cycle in promoting Responsible Care activities and foster human resources in areas pertinent to ESH.
❼ Compliance

The DIC Group complies with ESH-related laws, regulations, standards and agreements.

Technical Administrative Division
Production Administrative Division

Persons in charge of
Responsible Care

Production and R&D(plants and R&D centers)
Safety and EnvironmentGroup

Responsible Care implementation framework

DIC Report 2017

58

Implementation(DFK\HDUWKH',&*URXSGH¿QHVSULRULW\LVVXHVWRDGGUHVVDQGXVHVthe PDCA cycle in voluntary initiatives at the Group company, plant
and research laboratory levels. The Responsible Care Department
provides support for these initiatives to advance their progress andconducts regular audits to ensure compliance and improve safety andenvironmental performance.

Product divisions

Framework for Promoting Responsible Care

Framework for Promoting Responsible Care

Responsible Care Department
ESH audits

Responsible Care auditing framework

ESH

Support for Group Company Initiatives
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regardless of size, with the goal of enhancing Responsible Care initiatives Groupwide.

Initiatives in Fiscal Year 2016
Support for Overseas Group Companies

Regional ESH Director for Asia Paciﬁc
Regional ESH Manager for Asia Paciﬁc

DIC Asia Paciﬁc Pte Ltd

ESH
country head

ESH
country head

ESH
country head

ESH
country head

ESH
country headSouth Asia
India
Sri Lanka
Pakistan

Oceania
Australia
New ZealandThailand

Malaysia

Indonesia

Wang Dewei

Philippines
VietnamSingapore)UDPHZRUNIRUSURPRWLQJ(6+LQWKH$VLD±3DFL¿FUHJLRQtheDI C G ro u

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DIC (China) Co., Ltd., Regional ESH Oﬃcer

ESH and energy conservation conference for Greater China and
WKH$VLD±3DFL¿FUHJLRQ $VLD±3DFL¿FUHJLRQm

The DIC Group is working to rebuild its framework for supporting the efforts of Group
companies overseas to promote ESH initiatives in a flexible, autonomous manner
appropriate for each country and territory.
,QWKH$VLD±3DFLILFUHJLRQWKH*URXSHVWDEOLVKHGFRXQWU\KHDGV LQGLYLGXDOVLQFKDUJHRI5HVSRQVLEOH&DUHLQLQGLYLGXDOFRXQWULHV XQGHUWKHVXSHUYLVLRQRIWKHUHJLRQDO(6+RI¿FHUDQGLQ2FWREHUKHOGDPHHWLQJRIUHJLRQDOFRXQWU\KHDGV
in Singapore. Participants in this meeting included the region’s three country heads,
ESH officer, the managing director of DIC Asia Pacific and 13 Responsible Care
Department employees, who exchanged views on the region’s ESH policy, activity
SODQVWDUJHWVFKDOOHQJHVDQGHQHUJ\VDYLQJLQYHVWPHQWSODQVIRUILVFDO\HDU
,Q'HFHPEHUDFRXQWU\VSHFLILFPHHWLQJZDVKHOGLQ,QGRQHVLDZKLFKZDV
attended by representatives of local Group companies and sites and the Indonesia
country head, to discuss policies, targets and challenges going forward.
Steps were also taken to strengthen the ESH framework in Greater China. This
included dispatching the parent company’s ESH manager to serve as regional ESH
director and the assignment of ESH coordinators to oversee efforts in the south andthe east of the PRC. Regional Responsible Care managers and ESH coordinators
for the south and the east of the PRC were also invited to the DIC Group’s corporate
headquarters in Tokyo for training that included plant tours, among others. In
1RYHPEHU1DQWRQJ',&&RORU&R/WGKHOGDQ(6+DQGHQHUJ\FRQVHUYDWLRQ
conference for a group of 52 individuals, including Group company top executives,
SODQWJHQHUDOPDQDJHUVUHJLRQDO(6+RI¿FHUVIRU*UHDWHU&KLQDDQGWKH$VLD±3DFL¿Fregion, and pertinent directors and Responsible Care Department specialists from
corporate headquarters.

Our aim is to fortify the framework for promoting ESH in the PRC.
In the PRC, steps have been taken to tighten its environmental laws, regulations and standards, which are now similar in level with most advanced
HFRQRPLHV6RPHVWDQGDUGVDUHHYHQVWULFWHUWKDWWKRVHLQ-DSDQ7KLVWRJHWKHUZLWKWKHVWULQJHQWDSSOLFDWLRQRIVDIHW\VWDQGDUGVVLQFHWKH
Tianjin explosions, have contributed to increasingly harsh operating conditions for manufacturers. We are working to rebuild the DIC Group’s framework for
promoting safety and environmental measures in the PRC by, among others, appointing chemical substance managers to the ESH team and assigning ESH coordinators
to oversee efforts in the south and east of the country.
In addition, we continue to provide training regarding the handling of hazardous chemical substances to ensure awareness of current laws and regulations and to boost
know-how. We also produced a Chinese-language version of Principles of Safe Conduct for workplace reading circles. Principles of Safe Conduct is a crucial componentof our program to eliminate occupational accidents, and we provide support to employees in a variety of way until these principles become second nature.

DIC Report 201759

Gooi Kee Mein and Regional Manufacturing and ESH Manager, DIC (Malaysia) Sdn. Bhd. Chua Sin WeetheD

I C G ro u

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Regional Manufacturing Directorm

ESH:HKDYHFUHDWHGDPDQDJHPHQWV\VWHPIRUWKH$VLD²3DFLÀFUHJLRQ
7KH',&*URXSLQWKH$VLD±3DFL¿FUHJLRQFRPSULVHVFRPSDQLHVLQFRXQWULHV,QDGGLWLRQWRWKHGLYHUVHFXVWRPVDQG
languages across the region, a key challenge for us from an operations perspective is differences in awareness regarding
occupational safety. To address these issues, it was crucial for us to establish common occupational safety standards and ensure theHI¿FLHQWLPSOHPHQWDWLRQWKHUHRIDWDOOUHJLRQDO*URXSFRPSDQLHV:HKDYHDOVRDGRSWHG2+6$6WKHLQWHUQDWLRQDOO\DFFHSWHGVWDQGDUGIRURFFXSDWLRQDOKHDOWKDQGVDIHW\PDQDJHPHQWV\VWHPVDQG
have begun providing encouragement and support for companies in the region seeking to implement the standard, which a total of 12 companies
KDYHGRQHWRGDWH,Q¿VFDO\HDUZHZLOODVVLVWWKHHIIRUWVRI',& 9LHWQDP &R/WGDQG',&3KLOLSSLQHV,QFWRHDUQIXOOFHUWL¿FDWLRQXQGHU
2+6$6

Support for Group Companies in Japan&DOOVDUHLQFUHDVLQJIRUFRPSDQLHVLQ-DSDQWRIXUWKHUUHLQIRUFHWKHLUIUDPHZRUNVIRUPDQDJLQJHPSOR\HHKHDOWKDQGSUHYHQWLQJRFFXSDWLRQDODFFLGHQWV,Q¿VFDO\HDU',&DQG',&*UDSKLFVLQWURGXFHG*/FRQIHUHQFHVJDWKHULQJVRI(6+RI¿FHUVDWSULQFLSDOSURGXFWLRQIDFLOLWLHVDFURVVWKHFRXQWU\GXEEHG³JURXSOHDGHUV´RU*/V*/FRQIHUHQFHVZHUHKHOGILYHWLPHVGXULQJILVFDO\HDUZLWK5HVSRQVLEOH&DUH
Department specialists also in attendance, with the aim of creating standards, among others, and exploring improvements to shared challenges.
Information Disclosure
The DIC Group strives to increase the transparency of its activities through the active disclosure of information and at the same time promotes
dialogue with stakeholders by, among others, providing safety- and environment-related data through Group websites, the DIC Report and othermedia. The Group also undertakes initiatives to engage with society, including holding community meetings.

DIC Report 2017

60

ESH

ESH Audits
Basic Approach
Responsible Care Department specialists with expertise, experience and auditing
FDSDELOLWLHVUHJXODUO\FROODERUDWHZLWKH[HFXWLYHRI¿FHUVWRDXGLW5HVSRQVLEOH&DUH
initiatives at Group companies. DIC’s president and CEO and its executive vicepresident also take part in ESH audits at numerous sites each year to enhance
Responsible Care performance across the DIC Group.
2YHUVHDV5HVSRQVLEOH&DUH'HSDUWPHQWVSHFLDOLVWVDQGUHJLRQDO(6+RI¿FHUV
assess the progress of efforts at production sites and work together to enhance theeffectiveness of Responsible Care initiatives.
ESH audit conducted by DIC’s president and CEO

Audits in Fiscal Year 2016
,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SULQFLSDOVLWHVDQGIRXUVLWHVEHORQJLQJto DIC Graphics. In addition to regular audits, the Group assessed the progress of remedial measures at 13 domestic Group sites in response to issues
LGHQWL¿HGLQ¿VFDO\HDUDXGLWV7KH*URXSSURPRWHVVLPLODUHIIRUWVRYHUVHDVZLWKDXGLWVEHFRPLQJPRUHVWULQJHQWHYHU\\HDU,Q¿VFDO\HDUWKH*URXSFRQGXFWHGLQVSHFWLRQVto determine the status of management systems, as well as Responsible Care audits in three areas (environment, safety and health) at 17 companies in*UHDWHU&KLQD VLWHV WKUHHFRPSDQLHVLQWKH5HSXEOLFRI.RUHD 52.  WKUHHVLWHV DQGFRPSDQLHVLQWKH$VLD±3DFL¿FUHJLRQ VLWHV 7KHVH
DXGLWVXVHGVHOIDVVHVVPHQWFKHFNOLVWVWRFRQ¿UPWKDWHDFKXQLWLVSURJUHVVLQJVWHDGLO\WKURXJKDSSOLFDWLRQRIWKH3&'$F\FOH$XGLWVLQ*UHDWHU&KLQD
were improved to include a revised self-assessment checklist comprising approximately 200 questions.
,Q¿VFDO\HDUWKH*URXSUHSRUWHGWZRYLRODWLRQVRIHQYLURQPHQWDOUHJXODWLRQVRYHUVHDV 3URPSWVWHSVZHUHWDNHQWRPDNHLPSURYHPHQWVWRSUHYHQWUHRFXUUHQFH

More detailed self-assessment checklist (Greater China)

Initiative at DIC Graphics Chia Lung Corp. (Taiwan)

Outline of ESH Audits for Fiscal Year 2016
Japan

Overseas

DIC

DIC Graphics

Other DIC Group companies(follow-up assessments)

9 sites

4 sites

13 sites

26 sites

Total

GreaterChina

17companies

Total

ROK

3

companies

Asia–Pacific region

16

companies(out of 21)

36 companies

DIC Report 2017

61

ESH

Occupational Safety and Health, Security and Disaster Prevention
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 2016

Achievements in fiscal year 2016

Evaluation

Goals for fiscal year 2017

Ensure occupational safety andhealth.

Introduce and promote chemical
substance risk assessments.

Proprietar y guidelines for chemical
substance risk assessments were formulated and presentations on the guidelines
were held.

★★

• Implement chemical substance risk
assessments.

Promote ESH-related training.

• Continue to conduct hands-on safety
training.
• Implement mobile hands- on safet y
training using new equipment.
• Promote rank-specific training.

• Hands-on safety training continued andmobile hands-on safety training using
new equipment was implemented.
• Tailored training programs were implemented
for new employees, newly promoted employees and employees selected for overseas
transfer, among others.

Promote the implementation of
measures for and the sharing of
ESH-related information.

• Continue the activities of the Safe Corporate Climate Cultivation Working Groups.
• Share and make use of information on
industrial accidents within the DIC Group.

• Safe Corporate Climate Cultivation Working Groups
explored the idea of bringing the development ofeducational materials for production supervisors
in-house and shared safety-related information.
• GL conferences (for ESH officers) were established.
• The causes of industrial accidents were analyzed andinformation provided and shared in a timely manner.

Ensure the safe management ofchemical substances during transport.

• Formulate measures for preventing
problems during transport and deploy
across the DIC Group; promote training.
• Promote safety management in thetransport of chemical substances.

• In Japan, information was provided
through the creation of Yellow Cards
to transport personnel.
• No significant problems related to thetransport of chemical substanceswere reported.

Encourage the safety and environmental management initiatives ofGroup companies in Greater China
and the Asia–Pacific region.

• Introduce and promote risk assessments inGreater China and the Asia–Pacific region.
• Continue ESH audits and support betterself-management.

• The safety and environmental management frameworks in Greater China andthe Asia–Pacific region were restructured.
• Risk assessments were introduced andpromoted in Greater China and theAsia–Pacific region and the status of
implementation confirmed through ESH
audits. Training was provided at six Group
companies in the PRC.
• ESH audits were conducted at 36 companies (41 sites).

Manage safety and environmental data.

Continue to collect safety and environmental data from Group companies inGreater China and the Asia– Pacificregion and from the Sun Chemical Group.

Safety data was collected monthly
and environmental data annuallyfrom Group companies in Greater
China and the Asia–Pacific region
and from the Sun Chemical Group.

★★★

★★

• Continue to conduct hands-on safety
training.
• Implement mobile hands- on safet y
training using new equipment.
• Promote rank-specific training.
• Introduce e-learning programs.
• Continue the activities of the GL conferences, Safe Corporate Climate Cultivation
Working Groups and other such groups.
• Share and make use of information on
industrial accidents that have occurred at
DIC Group sites.

★★★

• Formulate measures for preventing
problems during transport and deploy
across the DIC Group; promote training.
• Implement corrective actions by
periodically ascertaining the situationon the logistics front lines.

★★★

• Create working groups/conferences.
• Continue to promote risk assessments inGreater China and the Asia–Pacific region.
• Continue to implement ESH audits and support
efforts to enhance independent management.
• Expand facilities for hands-on safety training.

★★

Expand the collection of safety andenvironment al dat a f rom G roupcompanies in Greater China and theAsia–Pacific region and from the Sun
Chemical Group.

Occupational Safety and HealthPrioritizing Safe Operations
The DIC Group recognizes that operational safety is fundamental to its operations and is also a core component of Responsible Care.
Accordingly, the Company undertakes occupational safety and health, security and disaster prevention measures to foster a “safety
first” philosophy Groupwide and in the mind of every employee.
Because its manufacturing operations span diverse fields, the DIC Group has numerous production processes that use hazardousand toxic materials and rotating devices, including ones that do not involve chemical reactions. Any accident involving such materials
or devices has the potential to significantly impact society in general and damage the health of the Group and partner company
employees and local residents.
With the aim of preventing such accidents, the DIC Group places a high priority on reducing risks in the workplace by enhancing
awareness of Principles of Safe Conduct and training safety personnel. The Group strives to enhance safety through efforts toreinforce its safety infrastructure and create a safety-oriented corporate culture.

DIC Report 2017

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ESH

Basic Approach
As a responsible member of society and a company that manufactures and sells chemical substances, the DIC Group recognizes that proper consideration for
ESH is fundamental to its operations and works to incorporate this awareness into all of its business activities. Guided by this philosophy, the DIC Group analyzes
accidents and communicates information thus derived, based on which it undertakes risk assessment with the aim of ensuring occupational safety and health.

Principal Initiatives in Fiscal Year 2016
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 risk of 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 as one to improve occupational safety and health, it is therefore crucial to establish appropriate benchmarks for each region (Japan,
Greater China, the Asia–Pacific region, and the Americas and Europe).
In fiscal year 2016, DIC defined accidents, disasters and reporting procedures for each region, 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 not leading
to workdays lost, number of accidents involving fires/explosions, workdays lost, workdays lost before restart of operations, occupational accident frequency
rate, occupational accident severity rate, work days lost per thousand employees and workdays lost
per million work hours. This approach made it possible to objectively compare the operational safety of
individual Group companies, establish more precise targets and facilitate improvement programs.
In fiscal year 2015, DIC established a system for aggregating monthly occupational safety and healthdata for each company in Greater China and the Asia–Pacific region as a monthly report. Domestic
Group companies already had such a setup in place. This made it easier to more swiftly identify andcompare 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.
Monthly report
2 Reducing Risks
By understanding potential risks in production processes, facilities and devices, and the hazardsof chemical substances, the DIC Group systematically prepares initiatives to prevent accidents
and occupational injuries. The Group also creates risk assessment guidelines when deploying
new or modified equipment or changing production processes to continue risk reduction activities.
With the aim of reducing risks associated with chemical substances in Japan, since fiscal
year 2015 the DIC Group has created a framework to facilitate the methodical implementationof risk assessments in line with the policy set forth by the Ministry of Health, Labor and Welfare.
Specifically, the Group has formulated proprietary guidelines, including assessment procedures,and is considering measures to assess hazards and toxicity and lower risks associated withchemicals set forth in Japan’s Poisonous and Deleterious Substances Control Act, including
modifying and improving practices for handling such substances. To facilitate the smooth
implementation of the guidelines, in fiscal year 2016 the Group held seven lectures at 12 DIC
Group companies in Japan, which were attended by a total of 149 employees. Participants
have been tasked with promoting a three-year plan for reducing risks associated with chemical
substances by propagating assessment know-how and procedures at their respective workplaces.

Lecture on the assessment of risks associated with chemical substances

3 Promoting E-Learning-Based Training for Employees
To enhance its ESH and disaster prevention capabilities, the DIC Group recognizes the importance of ensuring that all of its employees gain a broad
understanding of chemical substances, production processes, and pertinent law and regulations. In fiscal year 2016, the Group introduced an e-learning
program on a trial basis to verify its value and, having done so, in fiscal year 2017 the Group began deploying the program at successive Group companies inJapan. The Group also began offering an e-learning program in the PRC in fiscal year 2016, capitalizing on a highly developed smartphone-based e-learning
environment and active national and regional government endorsement, and intends to gradually introduce and expand availability once it has verified theprogram’s usefulness.

DIC Report 201763

Regional ESH Oﬃcer Takeshi HosomitheD

I C G ro u

p

Fr o

VOICE

m

ESH

We are using e-learning to enhance the know-how and skills of employees.
In fiscal year 2016, we promoted the creation of opportunities and educational materials to facilitate systematic training in key aspects of ESH, which is critical tothe promotion of Responsible Care, in Japan. Specifically, we structured training around 16 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 verified the appropriateness of educational materials from theperspective of Responsible Care Department specialists, plant ESH officers and production departments. In the PRC, we developed an e-learning program for safety management training
targeting ESH officers. Going forward, we will select educational materials appropriate for different trainees with the aim of enhancing the know-how and skills of employees.

4 Training Skilled Safety Personnel to Predict Risks
The DIC Group regularly trains skilled safety personnel on how to handle chemical substances, using materials such as its Principles of Safe Conduct andEnvironment and Safety Guidelines for the R&D Department, as well as 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) (“hazard prediction training”) and on hands-on safety training
for employees of Group companies worldwide.
The Group also undertakes similar initiatives at production sites in Greater China and the Asia–Pacific region. In the ROK and Malaysia, local employees
have voluntarily translated Principles of Safe Conduct. Headquarters has already translated Principles of Safe Conduct into English and Chinese, using it
throughout Greater China and the Asia–Pacific region.
KYT is a constructive way to further increase safety awareness. Domestic DIC Group companies use the technique extensively, and the Group is working toaccelerate its deployment in Greater China and the Asia–Pacific region.
5 Advancing Hands-On Safety Training
Hands-on safety training is an effective alternative to classroom-based learning that uses actual equipment to simulate potential risks in the workplace,thereby heightening employees’ awareness of the importance of proper safety. In Japan, the DIC Group initiated a full-fledged hands-on safety training
program in 2012 and since then has offered training that bases simulations on previous accidents, including those involving being caught in machinery,electrical discharges or fires from static electricity.
In 2014, the Group opened the Saitama Hands-On Safety Training Center, a facility boasting equipment that allows the simulation of an array of accidents, withthe goal of fostering skilled safety personnel by incorporating training in new employee and rank-specific training programs. DIC’s Chiba, Sakai, Hokuriku, Saitama,
Kashima and other plants have established their own hands-on safety training equipment and curricula to further embed safety into the DIC Group culture.
In light of frequent accidents at domestic production facilities that involved employees with fewer than three years of experience, the DIC Group included
safety training and KYT in the training curricula for new employees in fiscal year 2014. In fiscal year 2015, the Group downsized six types of hands-on
equipment for a mobile initiative and raised the standards of lecturers. In fiscal year 2016, the Group loaned 20 pieces of hands-on training equipment for amobile initiative encompassing five sites.
Overseas Group companies are also deploying hands-on safety training equipment. Installations in Greater China have included those at Nantong DIC
Color, a manufacturer of printing inks and organic pigments; DIC Graphics (Guangzhou) Ltd., which manufactures printing inks; and Changzhou Huari New
Material Co., Ltd., a synthetic resin manufacturer, in the PRC, and at Taiwanese printing inks manufacturer DIC Graphics Chia Lung. In the Asia–Pacificregion, there have been installations at DIC Compounds (Malaysia) Sdn. Bhd.; and PT DIC ASTRA Chemicals in Indonesia, a manufacturer of printing inks.
As well as providing regular hands-on safety training for local employees, these sites offer education for safety instructors. In fiscal year 2016, the cumulative
number of participants in hands-on safety training across the global DIC Group surpassed 10,000.

Downsized equipment that simulates
standing on shaking ground used in
mobile hands-on safety training

KYT for new employees

Experiencing being caught in a chucking apparatus

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64

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Number of Hands-On Safety Training Participants (Fiscal Year 2016)

FY2016
Cumulative total(FY2012–2016)

DIC Group (Japan)

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

Total

252
7,990

504
2,352

756
10,342

Occupational Accidents Resulting in Workdays Lost

Status of Occupational Accidents

DIC

The DIC Group promotes a variety of
initiatives aimed at eliminating occupational
DFFLGHQWV,Q¿VFDO\HDUWKHQXPEHURI
occupational accidents resulting in workdays
lost across the DIC Group were down from
WKH¿VFDO\HDUOHYHO/RRNLQJDKHDGWKH
Group will continue working to analyze thecauses of occupational accidents resulting in
workdays lost that have occurred to date andWRUHÀHFWLWV¿QGLQJVLQFRQFUHWHLPSURYHPHQWVwith the goal of preventing the further
occurrence of such accidents.

Number ofaccidents
resulting in
workdays lost

DIC Group (Japan)

2014

2015

2016

2014

2015

2016

2014

2015

2016

0

1

3

4

5

5

80

88

71

Frequency
rate

0.000 0.181 0.541 0.429 0.556 0.548 2.133 2.375 1.893

Severity
rate

0.000 0.005 0.012 0.006 0.018 0.026

TRIR*

1.29

1.27

2.35

Severity Rate

1.50

0.15

1.00

0.10

0.50

0.05

10

11

12

13

14

15

JCIA

10

Overall manufacturing industry

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 ＝

Number of occupational deaths or injuries
Total work hours

2.11

3.07

--

--

4.37

4.32

3.84

0.00

16
(FY)

DIC

2.25

--

* Total recorded incident rate (TRIR) is calculated as (Occupational accidents + Occupational accidents resulting in
workdays lost) / 1,000,000 hours worked

Frequency Rate

0.00

DIC Group (Global)

11

12

13

14

15

DIC

JCIA

Overall manufacturing industry

16

(FY)

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

× 1,000,000

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

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.

DIC Report 2017

65

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Safe Corporate Climate Cultivation Working Groups

Safe Corporate Climate Cultivation Working Groups comprise personnel in charge of safety at plants belonging to DIC andsubsidiary DIC Graphics. These groups have been active since fiscal year 2011. Members meet regularly to discuss andexchange proposals regarding safety policies and measures.
• Fiscal year 2012: Working groups presented recommendations on safety policies and produced warning stickers to enhanceawareness 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 was translated 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.

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

Qingdao DIC Finechemic als’ employees
reading out key passages

TOPICS
DIC Wins Special Jury Award in the JCIA’s 2016 Responsible Care Awards
In May 2016, DIC was presented with a Special Jury Award from the Japan Chemical Industry Association (JCIA) as
part of the 10th JCIA Responsible Care Award program. The award was in recognition of the role played by DIC’s
Safe Corporate Climate Cultivation Working Groups in reducing the incidence of occupational accidents. The JCIA
acknowledges sites, divisions, groups and individuals for outstanding initiatives and contributions under this annual
program with the aim of promoting and expanding Responsible Care.

Manager in chargeof safety, Saitama Plant
Toshiyuki Tanaka

DIC Employee Earns Green Cross Award from JISHA
Tetsuya Morita, group leader of the Komaki Plant’s Safety and Environment Group, was awarded the Green Cross Award from the Japan Industrial Safety and
Health Association (JISHA). The award was presented at a ceremony in October 2016. The Green Cross Award is presented to individuals who have madenotable contributions over long periods to the improvement of industrial safety or the promotion of occupational safety and health. Mr. Morita has been involvedin occupational safety and health, security and disaster prevention for the past 16 years. In addition to promoting safety initiatives involving full employee
participation, Mr. Morita has played a key role in the creation and implementation of dedicated risk assessment guidelines and promoting hands-on safety
training at the Komaki Plant. Mr. Morita was nominated for this award by the JCIA.

G r o u p l e a d e r, S a f e t y a n dEnvironment Group, Komaki Plant
Tetsuya Morita

DIC Graphics Chia Lung Receives 2016 Taiwan National Occupational Health and Safety Award
Taiwan-based DIC Group company DIC Graphics Chia Lung received a special occupational safety
and health award for traditional industries at the 2016 Taiwan National Occupational Health and
Safety Awards, which were given out on November 8, 2016. This award recognizes companies thathave invested in occupational safety and health through, among others, efforts to prevent fires/
explosions, improve production environments and enhance working environments, as well as tocreate a safety-oriented corporate culture. DIC Graphics Chia Lung was the only private-sector
company to earn this award in fiscal year 2016. The company looks forward to contributing further
to the improvement of occupational safety and health.
DIC Graphics Chia Lung representative accepting award at the2016 Taiwan National Occupational Health and Safety Awards

DIC Report 2017

66

Special occupationalsafety and health award

ESH

Occupational Health

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KDQGOLQJWKHVHFKHPLFDOVWKH*URXSUHJXODUO\FRQGXFWVKHDOWKFKHFNXSVDQGHQYLURQPHQWDOPHDVXUHPHQWVDQGPRGL¿HVDQGLPSURYHVZRUNLQJFRQGLWLRQVDV
needed. Industrial physicians, health supervisors and other experts inspect workplaces to manage employee health.
Electronic Storage of Employee Work and Health Records-DSDQHVHODZVDQGUHJXODWLRQVPDQGDWHWKDWFRPSDQLHVKDQGOLQJVSHFL¿HGFKHPLFDOVXEVWDQFHVZLWKWKHSRWHQWLDOWRFDXVHVHULRXVKHDOWKSUREOHPVDVDUHVXOW
of long-term exposure must maintain appropriate working environments as well as store work and health check records for 30 years. Companies must also
maintain storage space for these records to minimize the risk of paper-based documents going astray or becoming lost.
,Q¿VFDO\HDUWKHGRPHVWLF',&*URXSEXLOWDFHQWUDOL]HGGDWDPDQDJHPHQWV\VWHPFRPSULVLQJDQLQIRUPDWLRQQHWZRUNOLQNLQJHDFKZRUNVLWHIDFLOLWDWLQJthe electronic recording and storage of data for each employee and the review of information by supervisors and administrators. This approach ensuresconsistent recording formats at each site and helps eliminate the risk of records going astray while resolving the issue of storage space.

Security and Disaster Prevention
Basic Approach and Organization$Q\¿UHH[SORVLRQRUOHDNRIKD]DUGRXVVXEVWDQFHVIURPDFKHPLFDOSODQWFRXOGKDYHDWUHPHQGRXVLPSDFWRQORFDOUHVLGHQWVDQGWKHUHVWRI
the community 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 Groupregularly conducts emergency drills and has earthquake and other response measures in place.
DIC also undertakes risk assessments to ensure its ability to construct safe
Conceptual Illustration of DIC’s Safety Infrastructure
production facilities. In 2013, the DIC Group formulated the DIC Process Risk
Management (PRM) Guidelines*, which consist of four assessment techniques
Production facility
and implementation timetables for each. The Group uses these tools to conductsafety information
regular risk assessments at each of its sites. To aid in effective BCP, an essential
FRPSRQHQWRIULVNPDQDJHPHQWLQ¿VFDO\HDUWKH*URXSLGHQWL¿HGSULRULW\Management
Safe designof change
Operationrisks and implemented emergency response drills.
Process risk
management* The DIC PRM Guidelines outline timetables and implementation frameworks for assessing the handling ofchemical substances, production processes, production formulas, machinery and work practices with the aimof comprehensively identifying and steadily reducing risks associated with production and R&D processes.

MaintenanceConstruction

Disaster and accident
predictions and responses

Education

Facility Safety Assessment
1 Assessment Procedures

DIC Group production facilities have an array of equipment, ranging from units where chemical reactions are conducted to machine presses
and other processing equipment. When modifying processes or upgrading/replacing equipment, the Group assesses safety at every stage,
IURPSURFHVVGHVLJQDQGFRQVWUXFWLRQWKURXJKWRRSHUDWLRQPDLQWHQDQFHDQG¿QDOGLVSRVDOLQOLQHZLWKULVNDVVHVVPHQWJXLGHOLQHVIRUUHDFWLRQSURFHVVHVDQGIDFLOLWLHVWRHQVXUHKLJKHUVDIHW\OHYHOVIRUQHZSURFHVVHVDQGIDFLOLWLHV,Q¿VFDO\HDU',&UHYLVHGULVNDVVHVVPHQW
guidelines for machinery and equipment and prepared educational materials to prevent static electricity accidents.
2 Accident and Disaster Analysis and Timely Information

DIC collects and compiles information on internal and external accidents, disasters and problems into its Occupational Accident Case Studies
and Accident Case Studies databases. After identifying the causes of accidents or problems and establishing points to be checked, theCompany incorporates database information into safety education for DIC and DIC Group companies in Japan and overseas.

DIC Report 2017

67

ESH

3 Initiatives to Enhance Safety Competency

A company’s safety competency can be defined as its ability to maintain safety levels at its various sites. As a means of
REMHFWLYHO\HYDOXDWLQJDQGHQKDQFLQJLWVVDIHW\FRPSHWHQF\LQ¿VFDO\HDU',&LQWURGXFHGDQDVVHVVPHQWV\VWHPWKDW
encompasses questions about safety infrastructure (technical considerations) and the Company’s culture of safety (operationand management of organizational culture). This system was developed by the Japan Society for Safety Engineering (JSSE) asa common benchmark for engineers in the petrochemicals industry and is currently used by the 21 major corporations in Japanthat established the Safety Competency Enhancement Center.
To promote the greater use of safety assessment systems, in fiscal year 2015 the Safety Competency Enhancement
Center formulated a system for evaluating processing sites and a prioritized version of the system to streamline evaluations.
Because the DIC Group has processing sites in Japan, DIC participated in the former. Going forward, DIC plans to broaden the
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&RPSDQ\UHVROYHGWRLPSOHPHQW6DIHW\&RPSHWHQF\(QKDQFHPHQW&HQWHULQVSHFWLRQVDWWZRVLWHVLQ¿VFDO\HDU
Emergency Response Drills

DIC augments daily security patrols and periodic equipment checks with regular emergency response drills, especially at
production sites in Japan and overseas, to prepare for emergencies.

&RPSUHKHQVLYH¿UHGULOODW.DVKLPD3ODQW&RPSUHKHQVLYH¿UHGULOODW&KLED3ODQW

DIC Report 2017

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ESH

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
Objectives of initiatives

Goals for fiscal year 2016

Achievements in fiscal year 2016

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: 379
metric tonnes (-1.6% from fiscal year2015)).

DIC Group (Japan): Total emissions of
385 metric tonnes (+1.0% from fiscal
year 2015).

Control emissions of chemical
substances (Reduce emissions of
462 PRTR*1-designated substancesand 89 chemical substances andone substance group targeted by
JCIA*2 for voluntary control).

DIC Group (Japan): Total emissions of
388 metric tonnes (-1.6% from fiscal
year 2015).

DIC Group (Japan): Total emissions of
397 metric tonnes (+1.0% from fiscal
year 2015).

Evaluation

Goals for fiscal year 2017★

• 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)).

★

PRTR-designated substances: Establish
reduction targets for individual domestic
sites and promote related initiatives(cumulative total of targets for domestic
production facilities: 399 metric tonnes(+0.5% from fiscal year 2016)).

 The PRTR is a scheme in Japan for assessing, aggregating and disseminating data on the sources, amounts released into the environment and amounts transferred off-site from industrial
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As chemicals companies handle a considerably greater volume and more diverse range of chemical substances than companies in other industries,
they must be extremely vigilant to prevent discharges of such substances into the environment. DIC has worked to reduce emissions into the air,water and soil of substances designated under the Pollutant Release and Transfer Register (PRTR) and of substances targeted under a voluntary
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Principal Initiatives in Fiscal Year 2016
1 Reducing VOC Emissions+DYLQJVXFFHHGHGLQDFKLHYLQJDYROXQWDU\WDUJHW²VHWLQILVFDO\HDU²IRUUHGXFLQJHPLVVLRQVRI92&VLQWRWKHDLURIE\ILVFDO\HDU XVLQJILVFDO\HDUDVWKHEDVH\HDU IRUWKH',&*URXSLQ-DSDQGRPHVWLF*URXSFRPSDQLHVFRQWLQXHWRSXUVXHVWHDG\DQQXDOUHGXFWLRQVWKURXJKIDFLOLW\improvements and emissions management.
,QILVFDO\HDUHPLVVLRQVRI92&VLQWRWKHDLUJHQHUDWHGE\',&DPRXQWHGWRPHWULFWRQQHVGRZQIURPILVFDO\HDUZKLOHWKRVHE\
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RQHVLWHZKLFKUHVXOWHGLQDGHFUHDVHLQWKHHTXLSPHQW¶VKRXUVRIRSHUDWLRQ2YHUVHDV*URXSFRPSDQLHVLQ*UHDWHU&KLQDDQGWKH$VLD±3DFLILF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UHJXODWLRQVJRYHUQLQJHPLVVLRQVRI92&V

Emissions of Targeted Chemical Substances into the Air(551 Substances, Including those Designated by the PRTR,(Metric tonnes) and One Substance Group)

Emissions of VOCs DIC
into the Air in Fiscal
Year 2016

1,000

DIC Group (Japan)

- 9％

00

(Base year)

DIC

11

12

13

14

15

385

189

382

208

354

189

261

0

466

555
283

310

561

500

745

IURPÀVFDO\HDU

16 (FY)DIC Group (Japan)

DIC Report 2017

69

+1％

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,QWKH-&,$UHYLHZHG3575GHVLJQDWHGFKHPLFDOVXEVWDQFHVDQGUHYLVHGWKHQXPEHURIVXEVWDQFHVRQLWVWDUJHWOLVWIURPWR

Number of Targeted Chemical Substances Used and/or
Produced in Amounts Exceeding 1.0 Metric Tonne
in Fiscal Year 2016

Environmental Emissions of Targeted Chemical Substances(551 Substances, Including those Designated by the PRTR,
and One Substance Group) in Fiscal Year 2016
Emissions into the air

DIC

DIC Group (Japan)

111

124

DIC

Emissions into water
Emissions into soil
Emissions into the air

DIC Group (Japan)

Emissions into water
Emissions into soil

tonnes
189 metrictonnes12 metric
tonnes0 metric
tonnes
385 metrictonnes12 metric
tonnes0 metric

Targeted Chemical Substances for Which Emissions Exceeded
10.0 Metric Tonnes in Fiscal Year 2016
DIC
Substance

DIC Group (Japan)

Emissions
Emissions
into the environment into the environment

Ethyl acetate

63 metric
tonnes

124 metrictonnesToluene48 metric
tonnes57 metric
tonnes

Methyl ethyl ketone

30 metric
tonnes58 metric
tonnesStyrene6 metric
tonnes39 metric
tonnesAcetone7 metric
tonnes20 metric
tonnes

Propyl alcohol

1 metric
tonnes22 metric
tonnes

Butyl acetate

0 metric
tonnes12 metric
tonnes2 Managing Water Resources
8VDEOHIUHVKZDWHURQWKHHDUWK¶VVXUIDFHLVVDLGWRDFFRXQWIRURQO\DURXQGRIWKHSODQHW¶VWRWDOIUHVKZDWHUUHVRXUFHV$FFRUGLQJO\ILQGLQJHIIHFWLYHZD\VWRFRQVHUYHDQGPDQDJHZDWHUUHVRXUFHVLVDFUXFLDOJOREDOFKDOOHQJH7KH',&*URXSZLWKGUDZVIUHVKZDWHU WDSZDWHUDQGLQGXVWULDOZDWHU IRUXVHLQSURGXFWLRQSURFHVVHVDQGDLUFRQGLWLRQLQJDQGIRUGULQNLQJDPRQJRWKHUV7KH*URXSDOVRGLVFKDUJHVZDVWHZDWHU²DIWHUSXULI\LQJLWLQOLQHZLWKLQWHUQDOVWDQGDUGVWKDWH[FHHG
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&KLED3UHIHFWXUHUHFRYHUVSXULILHGZDVWHZDWHU JUD\ZDWHU DQGUHXVHVLWRQVLWHLQUHVHDUFKDVDUHVXOWRIZKLFKLWFXUUHQWO\GLVFKDUJHVQRZDVWHZDWHU7KH*URXSDOVR
promotes the recycling and reuse of water to reduce its impact on water resources.
,QILVFDO\HDUWKH*URXSFRQWLQXHGWRSURPRWHHIIRUWVWRLPSURYHSURGXFWLRQSURFHVVHVVKDUHLQIRUPDWLRQDQGFHQWUDOL]HGDWDRQIUHVKZDWHUZLWKGUDZQZDWHUXVHGDQGZDVWHZDWHUGLVFKDUJHG)UHVKZDWHUZLWKGUDZQE\WKHJOREDO',&*URXSLQILVFDO\HDUURVHIURPWKHILVFDO\HDUOHYHOWRP ,
FRPSULVLQJZLWKGUDZDOVE\WKH',&*URXSLQ-DSDQ LQFOXGLQJWKHSDUHQWFRPSDQ\ RIPXSDQGE\*URXSFRPSDQLHVRYHUVHDVRIP, an
LQFUHDVHRI:DVWHZDWHUGLVFKDUJHGE\WKHJOREDO',&*URXSLQILVFDO\HDUDPRXQWHGWRPKLJKHUWKDQLQWKHSUHYLRXVILVFDO\HDUDIC Report 2017

70

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Scope of Reporting for Fresh Water Withdrawn and Wastewater Discharged(IIHFWLYHIURPILVFDO\HDUWKHVFRSHRIUHSRUWLQJIRUZDVWHZDWHUGLVFKDUJHG KDV EHHQ H[SDQGHG WR LQFOXGH WKH 6XQ &KHPLFDO *URXSZKLFK RYHUVHHV ',& *URXS RSHUDWLRQV LQ WKH$PHULFDV (XURSH WKHMiddle East and Africa. This change was the principal reason behind
WKHVKDUSLQFUHDVHLQZDVWHZDWHUGLVFKDUJHGE\WKHJOREDO',&*URXS
LQ ILVFDO \HDU  'DWD IRU WKH 6XQ &KHPLFDO *URXS ZDV DOUHDG\included in the calculation of fresh water withdrawn.

Fresh Water Withdrawn by the Global
DIC Group in Fiscal Year 2016

Wastewater Discharged by the Global
DIC Group in Fiscal Year 2016

41,528,000 ㎥

37,593,000 ㎥+1.5%+28.0 %

IURP¿VFDO\HDU

IURP¿VFDO\HDU

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

SOx and NOx Emissions Volumes(Metric tonnes)
300

204
202

200

205
164

100

186
150
64

45

58

44

185
142

177
137

36 46

35 38

14

15

156
127
33 42

0

90

12

13

SOx emissions

DIC

DIC Group (Japan)

NOx emissions

DIC

DIC Group (Japan)

16 (FY)

COD(Metric tonnes)

0

90

12

(Base year)
DIC

13

14

831
590

655

530

527

495

491

473

500

844

1,000

469

7DNLQJ ILVFDO \HDU  DV WKH EDVH \HDU ',&
*URXS FRPSDQLHV LQ -DSDQ KDYH ZRUNHG WR
UHGXFH VXOIXU R[LGH 62[  DQG QLWURJHQ R[LGH
12[ HPLVVLRQV²NH\FDXVHVRIDFLGUDLQ²IURPERLOHUV 7KH *URXS LV DOVR ZRUNLQJ WR UHGXFH
FKHPLFDOR[\JHQGHPDQG &2' DQLQGLFDWRURIZDWHUTXDOLW\GHWHULRUDWLRQLQZDVWHZDWHUWKHUHE\HQKDQFLQJLWVZDWHUTXDOLW\PDQDJHPHQW   2YHUVHDV *URXS FRPSDQLHV DUH DOVR
switching fuel from light oil to natural gas andUHSODFLQJ OLJKW RLO±ILUHG DQG KHDY\ RLO±ILUHG
ERLOHUV ZLWK ZDVWH ZRRG±ILUHG ELRPDVV ERLOHUV
at sites with appropriate infrastructure.
   7R UHGXFH &2' WKH *URXS LV SURPRWLQJthe reuse of water and installing closed-loop
recycling and wastewater treatment systems at
its sites that purify water to a level that exceeds
the legally mandated standard.

745

4 Reducing SOx, NOx and COD

15

16 (FY)DIC Group (Japan)

5 Complying with Regulations Governing Emissions of Dioxins,Q-DSDQWKH',&*URXSPRQLWRUVHPLVVLRQVRIGLR[LQVIURPZDVWHLQFLQHUDWRUVWKDWSURGXFHWKHVHE\SURGXFWVDJURXSRIFRPSRXQGVZLWKYDU\LQJWR[LFLWLHV$WSUHVHQWWKH*URXSKDVVL[VXFKIDFLOLWLHV&RQWLQXRXVHIIRUWVWRUHGXFHHPLVVLRQVOHYHOVKDYHHQDEOHGWKH
*URXSWRDFKLHYHUHVXOWVWKDWJUHDWO\VXUSDVVVWDQGDUGVVSHFLILHGLQWKH/DZ&RQFHUQLQJ6SHFLDO0HDVXUHV$JDLQVW'LR[LQV

DIC Report 2017

71

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Dioxin Emissions from Domestic DIC Group Incinerators

Site

Chiba Plant (DIC)
Hokuriku Plant (DIC)

Scale of facility(incinerating capacity)

Waste gasStandard (ng-TEC/Nm3)

Wastewater(PLVVLRQVUHSRUWHGLQÀVFDO
year 2015 (ng-TEC/Nm3)

Standard (ng-TEC/Nm3)(PLVVLRQVUHSRUWHGLQÀVFDO
year 2016 (ng-TEC/Nm3)

3 metric tonnes/hr

5.0

0.2

10

0.037

0.28 metric tonnes/hr

5.0

0.004010

0.00011

Approx.

DIC Interior Co., Ltd.

Approx.

0.1 metric tonnes/hr

10.0

0.019

NA

ー

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

Approx.

0.2 metric tonnes/hr

10.0

0.04

NA

ー

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

Approx.

0.2 metric tonnes/hr

10.0

0.0027NAーHarima Plant(Seiko PMC Corporation)

Approx.

0.2 metric tonnes/hr

10.0

＜0.07

NA

ー

DIC Report 2017

72

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Reducing Industrial Waste
Goals and Achievements of Major Initiatives (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ ([FHOOHQW★★ 6DWLVIDFWRU\★ = 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 2016

Achievements in fiscal year 2016

Evaluation

Goals for fiscal year 2017

Implement measures at each site with the following goals:• Reduce industrial waste disposed of as landfill (forsites that have achieved “zero emissions,” maintainthat status) (cumulative total of targets for domestic
production facilities: 64.2 metric tonnes (-54% fromfiscal year 2015)).
• Reduce industrial waste generated by production
facilities 1.0% (cumulative total of targets fordomestic production facilities: 29,127 metrictonnes (up slightly from fiscal year 2015)).

• Industrial waste disposed of as
landfill
DIC Group (Japan): 183 metrictonnes (+31% from fiscal year 2015)• Industrial waste generated byproduction facilities
DIC Group (Japan): 31,303 metrictonnes (+8% from fiscal year 2015)★

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: 69.9 metric tonnes(-62% from fiscal year 2016)).

Promote recycling at DIC Group companies
and strive to improve resource recycling.

DIC Group (Japan) resource
recycling rate: 86% (-3 percentage points from f iscal year2015).

★

Promote recycling at DIC Group companies
and strive to improve resource recycling.

Basic Approach
7KH',&*URXSDLPVWRPLQLPL]HLQGXVWULDOZDVWHE\UHF\FOLQJDQGUHXVLQJPDWHULDOV6LQFH¿VFDO\HDU',&KDVEHHQLQYROYHGLQD]HURHPLVVLRQVLQLWLDWLYH DLPHGDWUHGXFLQJLQGXVWULDOZDVWHGLVSRVHGRIDVODQG¿OO',&KDVGHSOR\HG]HURHPLVVLRQVLQLWLDWLYHVDW',&*URXSFRPSDQLHV
LQ-DSDQVLQFH¿VFDO\HDU:LWKWKHDLPRIH[SDQGLQJHIIRUWVDFURVVWKHJOREDO',&*URXSLQ¿VFDO\HDU',&EHJDQWRLQWURGXFH0%2
DWRYHUVHDV*URXSFRPSDQLHV',&VXEFRQWUDFWVWKHWUHDWPHQWRILQGXVWULDOZDVWHWREHGLVSRVHGRIDVODQG¿OODQGHQVXUHVWKDWZDVWHLVSURSHUO\WUHDWHGE\SURPRWLQJVWULFWFRPSOLDQFH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 2016
5HGXFLQJ,QGXVWULDO:DVWH'LVSRVHGRIDV/DQG¿OO
7KH',&*URXSZRUNVDFWLYHO\WRUHGXFHLWVGLVSRVDORILQGXVWULDOZDVWHDVODQGILOO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
by increasing yields.
Initiatives by the DIC Group in Japan,QILVFDO\HDUWKHWRWDOYROXPHRILQGXVWULDOZDVWHGLVSRVHGRIDVODQGILOOE\WKH',&*URXSLQ-DSDQLQFUHDVHGIURPILVFDO\HDUWRPHWULFWRQQHV7KLVZDVGXHSULQFLSDOO\WRDWHPSRUDU\LQFUHDVHLQVOXGJHGLVSRVHGRIDVODQGILOOE\WKH7RN\R3ODQWDFFRPSDQ\LQJVWHSVWDNHQWRRSWLPL]HWKHIDFLOLW\¶VZDVWHZDWHUWUHDWPHQWSURFHVVZKLFKDPRXQWHGWRPHWULFWRQQHVDVZHOODVDKLJKHUUHVLGXHUDWHIRULQWHUPHGLDWHLQGXVWULDOZDVWHSURFHVVLQJDWWKH.DVKLPD3ODQW,Q¿VFDO\HDUDOO',&*URXSFRPSDQLHVLQ-DSDQZLOOVWHSXSWKHLPSOHPHQWDWLRQRIPHDVXUHVDLPHGDWUHGXFLQJWKHWRWDOYROXPHRILQGXVWULDOZDVWHJHQHUDWHGE\LWVSURGXFWLRQIDFLOLWLHVIURPWKH¿VFDO\HDUOHYHOZKLOHDWWKHVDPHWLPHSURPRWLQJ]HURHPLVVLRQVLQLWLDWLYHV',&DQG',&*URXSFRPSDQLHVLQ-DSDQDOVRFRQWLQXHGZRUNLQJWRHQVXUHWKHDSSURSULDWHGLVSRVDORISRO\FKORULQDWHGELSKHQ\OV 3&%V ,QDGGLWLRQWKHVHFRPSDQLHVSURPRWHGWKHVWULFWPDQDJHPHQWRIXQSURFHVVHGZDVWHLQFOXGLQJWUDQVIRUPHUVFDSDFLWRUVDQGVWDELOL]HUV
through proper collection and storage in dedicated warehouses.

DIC Report 2017

73

ESH

89
232

90
207

104
158

48
106

44
86

49
80

116
139

97
183

03

05

06

07

08

09

10

11

12

13

14

15

16 （FY）

0

00

01

DIC

04

metrictonnes

125
320

02

3,000

（Base year）

183

metrictonnes

128
537

+8％

97
312
991

DIC Group (Japan)

6,000

537
1,288

IURPÀVFDO\HDU

DIC Group(Japan)

DIC

1,560
2,296

IURPÀVFDO\HDU

+ 8％

3,426
4,326

+ 8％

9,000

4,190

DIC Group companies in Japan

5,581

DIC

,QGXVWULDO:DVWH'LVSRVHGRIDV/DQGÀOOLQ)LVFDO<HDU
（Metric tonnes）

7,981

Industrial Waste Generated in Fiscal Year 2016

DIC Group (Japan)

TOPIC
Comprehensive Industrial Waste
Management System Introduced,Q ILVFDO \HDU  WKH ',& *URXS LQ -DSDQH[SORUHG WKH LQWURGXFWLRQ DQG F RQGXFWHG
WHVWV RI D FRPSUHKHQVLYH LQGXVWULDO ZDVWHPDQDJHPHQWV\VWHPIRUXVHZLWKWKHFRXQWU\¶V(OHFWURQLF 0DQLIHVW H0DQLIHVW  V\VWHP 7KHH0DQLIHVW V\VWHP PDQDJHV WKH PRYHPHQW RI
LQGXVWULDO ZDVWH E\ IDFLOLWDWLQJ WKH HOHFWURQLF
WUDQVPLVVLRQ RI PDQLIHVW LQIRUPDWLRQ DQGWUDFNLQJ RI WKH IORZ RI ZDVWH IURP JHQHUDWLRQWR ILQDO GLVSRVDO 8QOLNH SDSHU PDQLIHVWVH  0 D Q L I H V W V  R I I H U  H D V \  G D W D  L Q S X W  D Q GHOLPLQDWHVWKHQHHGIRUDGPLQLVWUDWLYHUHSRUWLQJ
and storage by generators.
:LWKDQWLFLSDWHGUHYLVLRQVWR-DSDQ¶V:DVWH
0 D Q D J H P H Q W  / D Z  H[ S H F W H G  W R  L Q F U H D V HGHPDQGIRUJUHDWHUPDQLIHVWGDWDWUDQVSDUHQF\',& UHVROYHG WR LQWURGXFH DQ LQGXVWULDO ZDVWHPDQDJHPHQW V\VWHP WKDW ZRXOG IDFLOLWDWH WKHHIILFLHQWFROOHFWLRQRIGDWDZKLOHDOVRHQVXULQJ
legal and regulatory compliance. The GroupKDV FRPSOHWHG HYDOXDWLRQ RI WKH V\VWHP DW
VHYHUDO VLWHV DQG LQWHQGV WR JUDGXDOO\ H[SDQG
GHSOR\PHQWLQILVFDO\HDU

Differences Between E-Manifests 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
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 201774

Management of permits and contracts

ESH

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ZRUNWRPLQLPL]HLQGXVWULDOZDVWHWKURXJKWKHYROXQWDU\UHF\FOLQJDQGUHXVHRIPDWHULDOV,QILVFDO\HDU',&*URXSFRPSDQLHVLQWKH$PHULFDVDQG(XURSH*UHDWHU&KLQDDQGWKH$VLD±3DFLILFUHJLRQGHSOR\HGPHDVXUHVDLPHGDWDFKLHYLQJUHGXFWLRQVLQLQGXVWULDOZDVWHJHQHUDWHGGXULQJYDULRXVSURGXFWLRQSURFHVVHVWKDWH[FHHGHGQDWLRQDOO\DQGUHJLRQDOO\PDQGDWHGOHYHOV1RQHWKHOHVVWKHWRWDOYROXPHRILQGXVWULDOZDVWHJHQHUDWHGE\',&*URXSSURGXFWLRQIDFLOLWLHVRYHUVHDVURVH/RRNLQJDKHDGUHJLRQDOKHDGTXDUWHUVLQWKHVHDUHDVZLOOIRFXVRQIXUWKHUUHLQIRUFLQJFRPSOLDQFHZLWKORFDOODZVDQGUHJXODWLRQVZKLOHDWWKHVDPHWLPHFRRSHUDWLQJZLWK',&¶V5HVSRQVLEOH&DUHDQG3URGXFWLRQ0DQDJHPHQWGHSDUWPHQWVWRDQDO\]HWKHUHDVRQVIRUWKLVLQFUHDVHZLWKWKHDLPRIFXUELQJWKH
JHQHUDWLRQRILQGXVWULDOZDVWHDQGUHGXFLQJWKHYROXPHRILQGXVWULDOZDVWHGLVSRVHGRIDVODQGILOO

Environmental Impact of the DIC Group’s Operating Activities

Total energy consumption(crude oil equivalent)

OUTPUTDIC Group(Japan)INPUT

7KH',&*URXSTXDQWLILHVWKHHQYLURQPHQWDOLQSXWV FRQVXPSWLRQRIHQHUJ\DQGRWKHUUHVRXUFHV DQGRXWSXWV HPLVVLRQVLQWRWKHHQYLURQPHQW RILWVRSHUDWLQJDFWLYLWLHVDQGXVHVLWVILQGLQJVWRIRUPXODWHFRPSUHKHQVLYHDQGHIILFLHQWVWUDWHJLHVIRUUHGXFLQJLWVHQYLURQPHQWDOIRRWSULQW
7KHFKDUWEHORZLVDFRPSUHKHQVLYHLOOXVWUDWLRQRIWKHHQYLURQPHQWDOLPSDFWRIWKH',&*URXS¶VGRPHVWLFRSHUDWLQJDFWLYLWLHVLQILVFDO\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ODQGILOO 

111,306 ㎘※

Production
volume+1.4

904,000

Atmospheric emissions of targeted substances(551 substances and one substance group)

metric tonnes（-3.5％）

42

Wastewater discharged

28,168,000%
from fiscal year 2015

OUTPUT

INPUT

182,271㎘ +3.2

183

±0

0

Emissions into the air
CO2 emissions

Total water
consumption

417,000 +2.2%

metric tonnes from fiscal year 2015

Industrial waste
disposed of as landfill%
from fiscal year 2015

24,739 -24.0
metric tonnes

Wastewater
discharged

9,425,000
2.8 times

Emissions into soil

11,015,000㎥ +1.4

+31.0 %

metric from fiscal year 2015
tonnesSoil-related emissions oftargeted substances(551 substances andmetricone substance group)
tonnesAquatic emissions of targeted substances(551 substances and%metricone substance group)
tonnes from fiscal year 201512fiscalyear 2015+10.0 % from

Industrial waste disposedof as landfill+8.2%
m from fiscal year 2015
3

fiscalyear 2015-12.4 % fromEmissions into soil

COD inmetric -1.5 %wastewater 831 tonnes from fiscal year 2015

from fiscal% year 2015

Total energy consumption(crude oil equivalent)

metrictonnesEmissions into water

30,513,000㎥+1.5

metrictonnesSOx emissions%
385 from+1.0
fiscal year 2015

from fiscal% year 2015

Total water
consumption

Production
volumemetric tonnes from fiscal year 2015

* Renewable energy is not included in the above figures.

（+1.2％）

1,047,000

NOx emissions

242,000 -3.3% 156
metric tonnes

metric tonnes

DIC Group(Overseas)

Emissions into the air
CO2 emissions

the fiscal year 2015 level%from fiscal year 2015

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TOPIC
DIC India Celebrates World Environment Week
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DIC Report 201775

:RUOG(QYLURQPHQW:HHNDW',&,QGLD

m3

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持続可能な調達Managing Chemical Substances in Products
Goals and Achievements of Major Initiatives (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ ([FHOOHQW★★ 6DWLVIDFWRU\★ 6WLOOQHHGVZRUN
Objectives of initiatives

Goals for fiscal year 2016

Achievements in fiscal year 2016

Evaluation

Goals for fiscal year 2017

• Full–time managers were assigned toregional headquarters for Greater China
and the Asia–Pacific region.
• Local information-gathering configurations were reinforced.

★★

Respond to requirements relating tochemical product information.

• Assign full-time managers in charge oflegal and regulator y compliance toregional headquarters.
• Expand local information-gathering
configurations.

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

• Continue to promote use of the Wercs atoverseas Group companies.
• Continue taking steps to comply with
Taiwan’s Toxic Chemical Substances
Control Act and Occupational Safety
and Health Act.
• Promote the registration of chemical
substances to which REACH applies.

• The Wercs-linked label systems were introduced
at three Group companies in Indonesia.
• Steps to comply with Taiwan’s Toxic Chemical Substances Control Act and Occupational Safety and Health Act continued.
• Efforts to promote the registration of chemical substances to which REACH applies
continued.
• Promoted efforts to accommodate the TSCA.

Comply with regulations in Japanand overseas (e.g., Japan’s Act on
the Evaluation of Chemical
Substances and Regulation of Their
Manufacture, etc., and Poisonousand Deleterious Substances Control
Act; the EU’s REACH legislation;and the U.S.’ TSCA.

★★

★★

★★

★★

• Promote compliance with Act on the
Evaluation of Chemical Substances andRegulation 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.

Promoting the Safety of Chemical Substances and Products
Basic Approach and Framework for Promotion,QWKH81(FRQRPLF&RPPLVVLRQIRU(XURSHLVVXHGWKH¿UVWHGLWLRQRIWKH*OREDOO\+DUPRQL]HG6\VWHPRI&ODVVL¿FDWLRQDQG/DEHOOLQJ
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Framework for Promoting the Safety of Chemical Substances and Products

CIRIUS / The Wercs
Centralize management of
information on raw materials
Centralize management ofchemical substance information

Foster experts

Synergies

Licensing system

Raise employee expertise

Training

Provide highly reliable SDSs and create GHS-compliant labels

DIC Report 2017

76

ESH

Reducing Risks by Providing Information Worldwide
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On-Demand Label Printing System Flowchart

Product A

Product A

Information on composition is inputA
GHS separation caution warning

Product B

Product B

The Wercs

Product C

Product names,
lot numbers,
net andother information

B
Label
printing
systemLabelprinter

Product CC

SAP

DIC Report 2017

77

ESH

Complying with Laws and Regulations
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Training in Chemical Substance Management
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78

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PPIC Department Manager, Supply Chain Division, P.T. Pardic Jaya Chemicals Sri Yuniati

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The introduction of the Wercs has contributed to cost reductions.

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Looking ahead to 2020, we are working to respond effectively to increasingly robust laws andregulations in global markets.
2QHRIWKHDJUHHPHQWVUHDFKHGDWWKH:66'LQZDVWRHQVXUHE\WKDWFKHPLFDOVDUHXVHGDQGSURGXFHGLQZD\VWKDWOHDGWRWKHPLQLPL]DWLRQRIVLJQL¿FDQWDGYHUVHHIIHFW7RWKLVHQGHPHUJLQJHFRQRPLHVDVZHOODVGHYHORSHGHFRQRPLHVDUHDFFHOHUDWLQJHIIRUWVWRFUHDWHDQGUHLQIRUFHODZVDQGUHJXODWLRQVJRYHUQLQJFKHPLFDOVXEVWDQFHV7RHQVXUHWKDWWKH',&*URXSKDVDQDFFXUDWHJUDVSRIVXFKWUHQGVZHDUHIRFXVHGRQIRUWLI\LQJRXULQIRUPDWLRQJDWKHULQJFDSDELOLWLHVPD[LPL]LQJNQRZKRZDFFXPXODWHGLQWKHFUHDWLRQDQGXVHRI&,5,86
HQKDQFLQJRXUDELOLW\WRDFFRPPRGDWHPXOWLSOHODQJXDJHVSURYLGLQJVSHFLDOL]HGWUDLQLQJIRURYHUVHDV',&*URXSHPSOR\HHVDQGEROVWHULQJ
H[SHUWLVHLQWKHRSHUDWLRQRIWKHVHV\VWHPV*RLQJIRUZDUGZHZLOOFRQWLQXHWRVWHSXSLQLWLDWLYHVUHODWHGWRWKHVDIHW\RIFKHPLFDOVXEVWDQFHVDQGSURGXFWVDIC Report 2017

79

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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 2016
DIC Group① Reduce CO 2 emissions per unit ofproduction 1.0% from the fiscal year
2015 level.
② Reduce CO 2 emissions 1.0% from thefiscal year 2015 level.

Reduce emissions of CO 2 at sites(Scope 1 and 2).

DIC Group (Japan)① Reduce CO 2 emissions per unit ofproduction 1.0% from the fiscal year
2015 level.
② Reduce CO 2 emissions 1.0% from thefiscal year 2015 level.
③ Reduce energy consumption 1.0% byconserving energy.
DIC Group (Japan)

Reduce emissions of CO 2 whentransporting goods (Scope 3).

① Promote modal shif t and improvetransport efficiency to reduce energy
consumed per unit of production.
② Reduce CO2 emissions from logistics.

Achievements in fiscal year 2016 Evaluation① CO 2 emissions per metrictonne of production
declined 2.3%.
② CO 2 emissions edged up
0.1%.

① CO 2 emissions per metrictonne of production
declined 4.5%.
② CO 2 emissions declined
3.4%.

★

① Energy consumed per unit ofproduction rose 2.0%.
② CO 2 emissions per unit ofproduction declined 1.0%.

DIC Group①Reduce CO 2 emissions 7.0% from the fiscal
ye a r 2 013 l eve l by f i s c a l ye a r 2 0 2 0(average annual decrease of 1.0%).

★

★

★
★

Goals for fiscal year 2017★

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

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

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Basic Approach&OLPDWHFKDQJHDSULQFLSDOFDXVHRIZKLFKLVJOREDOZDUPLQJLVDQLQFUHDVLQJO\SUHVVLQJLVVXHIRUWKHHQWLUHZRUOG7KH,QWHUJRYHUQPHQWDO3DQHO
RQ&OLPDWH&KDQJH ,3&& DOHDGLQJVFLHQWLILFERG\GHGLFDWHGWRWKHDVVHVVPHQWRIFOLPDWHFKDQJHFRQWLQXHVWRXUJHLWVPHPEHUFRXQWULHVWRUHLQIRUFHDQGH[SDQGWKHDSSOLFDWLRQRIFOLPDWHFKDQJHFRXQWHUPHDVXUHV:LWKRILWV*URXSVLWHV DQGRI¿FHVDQGUHVHDUFKIDFLOLWLHV LQ-DSDQDFFRUGHG'HVLJQDWHG(QHUJ\0DQDJHPHQW)DFWRU\VWDWXV',&KDVLQFOXGHGLQLWLDWLYHVDLPHGDWUHGXFLQJJUHHQKRXVHJDVHPLVVLRQVIURPLWV
SURGXFWLRQIDFLOLWLHVLQLWVDQQXDOVXVWDLQDELOLW\SROLF\7KH&RPSDQ\LVFXUUHQWO\LPSOHPHQWLQJLQLWLDWLYHVWRUHGXFHLWVFRQVXPSWLRQRIHQHUJ\DQGWKXV
its emissions of CO2DVZHOODVSURPRWLQJWKHDFWLYHGLVFORVXUHRIUHODWHGGDWD
❶ Undertake energy-saving initiatives Groupwide❷ Deploy effective strategies through working group activities❸ Operate energy-saving cogeneration systems (combined heat and power generating facilities)❹(PSOR\HQHUJ\IURPUHQHZDEOHUHVRXUFHV ELRPDVVZLQGSRZHUDQGVRODUSRZHU DWVXLWDEOHVLWHV❺ Extend energy-saving initiatives to DIC Group companies overseas

Framework for Promoting Energy-Saving Initiatives
DIC and DIC Group companies in Japan have established energy-saving promotion committees at each of their production and R&D sites.
&RPPLWWHHDFWLYLWLHVLQFOXGHFRQ¿UPLQJWKHSURJUHVVRILQLWLDWLYHVHQJDJLQJLQGLVFXVVLRQVDQGFRQGXFWLQJSDWUROV',&KDVDOVRVHWXSDQHQHUJ\VDYLQJZRUNLQJJURXSFRPSULVLQJPHPEHUVFKRVHQIURPHDFKSURGXFWLRQIDFLOLW\WKDWIRVWHUVWKHH[FKDQJHRILQIRUPDWLRQUHVHDUFKSHUWDLQLQJWRQHZ
items and the Groupwide implementation of effective measures. This combination of site- and Group-level initiatives forms the framework under which
the DIC Group works to reduce CO2 emissions.
DIC Group companies overseas promote a wide range of independent energy-saving initiatives. The Production Management Department provides
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80

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Principal Initiatives in Fiscal Year 2016

(Metric tonnes of CO2)

Formulation of Medium-Term Target for Reducing CO2 Emissions by Fiscal Year 2020

850

51
15

723

10

24

700

16

672

Fiscal year 2020

750

Other factors

65

800

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approved a new medium-term target for the reduction of CO2 emissions.
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650
600
550
500
450

2 Energy Consumption and CO2 Emissions by the Global DIC Group

Additional energy-saving
measures

Horizontal deployment ofenergy-saving techniques

Plans for construction ofmajor facility (Japan)

Impact of annual
energy-saving measures

Fiscal year 2013

400

Increase due to expansionof operations

1

Forecast for Global CO2 Emissions in Fiscal Year
2020 and Anticipated Contributing Factors'HVSLWHWRDLQFUHDVHLQSURGXFWLRQYROXPHHQHUJ\FRQVXPSWLRQE\',&*URXSFRPSDQLHVZRUOGZLGHURVHWRWKHHTXLYDOHQWWRNLOROLWHUVRIFUXGHRLOFRPSDUHGZLWKNLOROLWHUVLQ¿VFDO\HDUJOREDO&22HPLVVLRQVUHPDLQHGHVVHQWLDOO\OHYHODW
PHWULFWRQQHVFRPSDUHGZLWKPHWULFWRQQHV
7KH',&*URXSPDQXIDFWXUHVDZLGHYDULHW\RISURGXFWVDWSURGXFWLRQIDFLOLWLHVDURXQGWKHZRUOGLQFOXGLQJSULQWLQJLQNVSRO\PHUVSLJPHQWV/&VHQJLQHHULQJSODVWLFVDQGFRPSRXQGV5HFHQWPRQWKVKDYHVHHQDQLQFUHDVHLQSURGXFWLRQRI¿QHFKHPLFDOVZKLFKLVHQHUJ\LQWHQVLYH
DQGDFRUUHVSRQGLQJGHFOLQHLQSURGXFWLRQRILWHPVWKDWUHTXLUHFRPSDUDWLYHO\OLWWOHHQHUJ\1RQHWKHOHVV&22 emissions were on a par with the
SUHYLRXV¿VFDO\HDU)DFWRUVEHKLQGWKLVLQFOXGHGWKHVWDUWRIIXOOVFDOHRSHUDWLRQRIDQHZFRJHQHUDWLRQV\VWHPDWWKH.DVKLPD3ODQWHIIRUWVWRDFKLHYHDQDSSURSULDWHEDODQFHRIHQHUJ\IURPUHQHZDEOHVRXUFHVVXFKDVELRPDVVERLOHUVZLQGSRZHUDQGVRODUSRZHUDQGWKHLPSOHPHQWDWLRQ
RIHQHUJ\VDYLQJLQLWLDWLYHV,QFRQWUDVW&22 emissions per metric tonne of production (“CO2HPLVVLRQVSHUXQLWRISURGXFWLRQ´H[SUHVVHGLQ
terms of kilograms of CO2SHUPHWULFWRQQHRISURGXFWLRQ GHFOLQHGLQ¿VFDO\HDUWRNJPHWULFWRQQHIURPNJPHWULFWRQQH
LQ¿VFDO\HDUDGHFUHDVHRIIURP¿VFDO\HDUWKH*URXS¶VFXUUHQWEDVH\HDU7KHGHFOLQHLQ&22 emissions per unit of production
XQGHUVFRUHVWKH*URXS¶VVXFFHVVLQFXUELQJHPLVVLRQVGHVSLWHDQLQFUHDVHLQSURGXFWLRQ7KH*URXSZLOOIXUWKHUUROORXWIXHOFRQYHUVLRQDQGKLJKHI¿FLHQF\HTXLSPHQWDVZHOODVUHYDPSSURFHVVHVDQGLPSURYHFDSDFLW\XWLOL]DWLRQDWDOORILWVSURGXFWLRQVLWHV

Global CO2 Emissions in Fiscal Year 2016

CO2 Emissions in Fiscal Year 2016 by Region

Results of energy-saving initiatives implemented by the DIC Group
Globalproduction volume

Energyconsumption

Greater China

CO2 emissions perunit of production-2.3％+2.4％ +2.5％

Japan

10%
Asia–Pacificregion19%

658,811

Americasand Europe

659,378 +0％
metric tonnes

metric tonnes

34%

from fiscal year 2015

Fiscal year 2015

Fiscal year 2016

Global CO2 Emissions and Change from Base Year (Fiscal Year 2013)
Metric tonnes of CO2）
800,000

100

91

91

91

Global Energy Consumption and Change in Energy Consumption
per Unit of Production from Base Year (Fiscal Year 2013)

（％）
120

700,000（Kilograms of CO2/
metric tonne）

100

600,00080

500,000
400,000

60

300,000

40

200,000

0

15

98

100

98
120（％）

300

110

250

100

CO2 emissions

50

70

0

60

13

DIC Report 2017

81

from
fiscal year 2015

80

100

16 (FY)

-2.3%

90

150

Change in CO2 emissions
from base year

0

14

100

350

200

20

100,000

13

37%

Breakdown of
CO 2 Emissions in
Fiscal Year
2016

14

15

16 (FY)

Energy consumption
Change in energy consumption
per unit of production from base year

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Factors Contributing to the Change in CO2 Emissions by the Global DIC Group in Fiscal Year 2016
FactorUnit

Impact on CO2emissions

Change in weighting

Improvement in productivity

Metrictonnes-9,214-1.4%

Impact of 645 energy-saving initiatives

Metrictonnes-6,277-1.0%

7KHLPSDFWRIHIIRUWVWRLPSURYHSURGXFWLRQHIÀFLHQF\LQ
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CO2 emissions from non-energy sources

Metrictonnes-5,654-0.9%,QFLQHUDWRUYROXPHDWWKH&KLED3ODQWGHFUHDVHG

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system and positive impact of balanced energy mix
Change in CO2 emissions factor for electric
power purchased
Expansion of pigment production in the$VLD²3DFLÀFUHJLRQ

Metrictonnes-4,589-0.7%

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Metrictonnes-2,771-0.4%

Metrictonnes

12,000

1.8%

The CO2 emissions factor for purchased electric
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Output at a pigments production facility increased
WLPHV

Increase in production volume

Metrictonnes11,119

1.7%*OREDOSURGXFWLRQYROXPHZDVXS

Other factors

Metrictonnes

4,007

0.6%

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boiler during boiler replacement period

Metrictonnes

1,946

0.3%

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Total

Metrictonnes

567

0.1%

Notes

3 Energy Consumption and CO2 Emissions by the DIC Group in Japan,Q¿VFDO\HDUWKH',&*URXSLQ-DSDQ²HQFRPSDVVLQJWKHVLWHVRI',&&RUSRUDWLRQDQGGRPHVWLF',&*URXSFRPSDQLHV²UHSRUWHG
DLQFUHDVHLQSURGXFWLRQYROXPHIURP¿VFDO\HDU(QHUJ\FRQVXPSWLRQE\WKH',&*URXSLQ-DSDQLQ¿VFDO\HDUURVHWR
WKHHTXLYDOHQWRINLOROLWHUVRIFUXGHRLOIURPNLOROLWHUVLQ¿VFDO\HDUZKLOHHQHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQ²
DQLQGLFDWRUVHWIRUWKLQ-DSDQ¶V$FWRQWKH5DWLRQDO8VHRI(QHUJ\²ZDVOHYHODW*-PHWULFWRQQH,QFRQWUDVW&22 emissions declinedWRPHWULFWRQQHVIURPPHWULFWRQQHVLQ¿VFDO\HDUZKLOH&22HPLVVLRQVSHUXQLWRISURGXFWLRQDWNJ&22
HTXLYDOHQWZHUHGRZQIURPNJ&22 in the previous period. The principal factors behind these decreases included the start of
IXOOVFDOHRSHUDWLRQRIDQHZFRJHQHUDWLRQV\VWHPZLWKDN:FDSDFLW\DWWKH.DVKLPD3ODQWRQHRIWKH*URXS¶VSULQFLSDOSURGXFWLRQIDFLOLWLHVLQ-DSDQHIIRUWVWRDFKLHYHDQDSSURSULDWHEDODQFHRIUHQHZDEOHHQHUJ\VRXUFHV ELRPDVVERLOHUVZLQGSRZHUVRODUSRZHU DQGWKH
LPSOHPHQWDWLRQRIHQHUJ\VDYLQJLQLWLDWLYHV

DIC Group in Japan
CO2 Emissions by the DIC Groupin Japan and Change from Base Year
(Fiscal Year 2013)

Energy Consumption by the DIC Group in Japanand Change in Energy Consumption Per Unit of
Production from Base Year (Fiscal Year 2013)-3.4%

from fiscal year
2015

(Metric tonnes of CO2)
400,000
350,000

100(Kiloliters of crude
oil equivalent)

104

103

120（％）

99

100

102

102

+0.2%
from fiscal year
2015

102

5.000

120（％）
100

100

300,000

4.000

250,000

80

200,000

60

80

3.000

60

2.000

40

1.000

20

150,000
40
100,000
20

50,0000013
CO2 emissions

14

15

16

(FY)

0

0

13

Change from base year

Energy consumption

DIC Report 2017

82

14

15

16 (FY)

Change in energy consumption per unit of production from base year

ESH

Factors Contributing to the Change in CO2 Emissions by the DIC Group in Japan in Fiscal Year 2016
Change inweighting

Unit

Impact on
CO2 emissions

CO2 emissions from non-energy sources

Metrictonnes-5,654-2.3%,QFLQHUDWRUYROXPHDWWKH&KLED3ODQWGHFUHDVHG

6WDUWRIRSHUDWLRQRIWKH.DVKLPD3ODQW·VQHZFRJHQHUDWLRQ
system and positive impact of balanced energy mix

Metrictonnes-4,589-1.8%,PSDFWRIHQHUJ\VDYLQJLQLWLDWLYHVMetrictonnes-4,460-1.8%-2,771-1.1%

Increase in production volume

MetrictonnesMetrictonnes

7KLVIDFWRUUHÁHFWVWKHSODQW·VQHZN:FDSDFLW\FRJHQHUDWLRQV\VWHPDQGDQLPSURYHPHQWLQELRPDVVERLOHUSHUIRUPDQFH
$WRWDORIELOOLRQZDVLQYHVWHGLQHQHUJ\VDYLQJLQLWLDWLYHVZLWKELOOLRQJRLQJWRUDWLRQDOL]DWLRQHIIRUWVThe CO2 emissions factor for purchased electric power
LPSURYHG

3,001

1.2%

3URGXFWLRQYROXPHLQ-DSDQZDVXS

,QFUHDVHLQEDVHORDGFRQVXPSWLRQ FOHDQURRPVHWF

Metrictonnes

2,507

1.0%

5HGXFHGRSHUDWLRQRIWKH&KLED3ODQW·VWKHUPDO
boiler during boiler replacement period

Metrictonnes

1,946

0.8%

Other factors

Metrictonnes

1,493

0.6%

Total

Metrictonnes-8,527-3.4%

FactorChange in CO2 emissions factor forelectric power purchased

Notes

Operating rates for energy-consuming facilities
QRWUHODWHGWRSURGXFWLRQLQFUHDVHG
2SHUDWLRQRIWKHSODQW·VRQFHWKURXJKERLOHU
LQFUHDVHG
Other factors include changes in product mix,
DPRQJRWKHUV

4 Energy-Saving Initiatives by the DIC Group in Japan$OOSODQWVDQG5 'VLWHVHQGHDYRUWRFRQVHUYHHQHUJ\WKURXJKWKHIROORZLQJLQLWLDWLYHVWRUHGXFHEDVHORDGHQHUJ\FRQVXPSWLRQDQGE\DSSO\LQJWKH3'&$F\FOHWRLPSURYH
WKHHI¿FLHQF\RISURGXFWLRQPHWKRGVWKHUHE\UHGXFLQJHQHUJ\XVHGDVZHOODVWRVKRUWHQSURFHVVWLPHV(PSOR\KLJKO\HI¿FLHQWOLJKWLQJDQGDLUFRQGLWLRQLQJDQGPHDVXUHVWRFXWZDVWHHQHUJ\VDYLQJLQLWLDWLYHVDFFRXQWHGIRUDUHGXFWLRQLQHQHUJ\• Introduce energy-saving controls on pumps and blowers
FRQVXPSWLRQHTXLYDOHQWWROLWHUGUXPVRIFUXGHRLO
8VHPRUHHI¿FLHQWFRPSUHVVRUVDQGLPSOHPHQWPHDVXUHVWRUHGXFHSUHVVXUHORVVHVLQLWLDWLYHV
Equivalent to0HDVXUHVWRLPSURYHWKHSRZHUIDFWRUVRIHOHFWULFHTXLSPHQW
Reduction in
$GRSWKLJKFRHI¿FLHQWRISHUIRUPDQFH &23 FKLOOHUVDQGPHDVXUHVWRSUHYHQWFROG
energyand hot water supply waste
consumption
200-liter drums of crude oil• Reduce boiler fuel through the recovery of waste heat
• Ensure appropriate warming times and temperatures for raw materials
,Q¿VFDO\HDUWKHVHLQLWLDWLYHVUHGXFHGHQHUJ\FRQVXPSWLRQE\*- PHWULFWRQQHVFDUERQHTXLYDOHQW 7KLVFRUUHVSRQGVWROLWHUGUXPVRIFUXGHRLORURIWRWDOHQHUJ\FRQVXPSWLRQE\WKH',&*URXSLQ-DSDQLQWKHSUHYLRXVSHULRG*RLQJIRUZDUGWKH*URXSZLOOFRQWLQXHWRSURPRWHHQHUJ\VDYLQJPHDVXUHVDVZHOODVWRVKDUHEHVWSUDFWLFHVDPRQJVLWHV7KH*URXSZLOODOVRUHLQIRUFHRSHUDWLQJPDQXDOVIRUNH\HQHUJ\FRQVXPLQJHTXLSPHQWLQFOXGLQJERLOHUVFKLOOHUVDQGFRPSUHVVRUVWRRSWLPL]HSHUIRUPDQFHDVZHOODVVWHSXSWKHGHSOR\PHQWRILQLWLDWLYHVERWKLQ-DSDQDQGRYHUVHDV

10,700Key Energy-Saving Initiatives Implemented by the DIC Group in Japan in Fiscal Year 2016
No.

Unit

Energy-saving initiative

Reduction in
Reduction in
annual energy CO2 emissions
consumption (GJ) (metric tonnes)

1

Chiba Plant

Reduced steam losses by introducing direct reception from tanker trucks delivering pigments for printing inks

3,624

218

2

Yokkaichi Plant

Shifted to use of one brine freezing unit

2,317

118

3

Utsunomiya Plant

Shortened operating times of cooling water pumps

2,058

106

4

Komaki Plant

Reduced steam used by repairing steam line

2,216

113

5

Tatebayashi Plant

Optimized capacity of cooling water pumps

2,432

125

6

Tatebayashi Plant

Reduced energy consumption by adjusting operation of water cooling–related equipment

1,955

100

7

KJ Chemicals Corporation

Reduced costs associated with dynamic temperature of N,N-Dimethyl acrylamide (DMAA)

2,922

178

8

Hokuriku Plant

Reduced operating times for nitrogen generation devices by 95%

1,262

82

9

Gunma Plant

Changed electric heating temperature settings and shut equipment off when not in use

1,461

75

10

Yokkaichi Plant

Set standards for waste heat recovery

1,390

69

11

Kansai Plant

Switched from kerosene-powered to flue gas recirculation boilers

732

66

12

Kashima Plant

Reduced energy consumption by improving operation of steam traps

1,200

62

13

Sakai Plant

Reduced consumption of town gas by optimizing the temperature of water supplied to deodorization furnace

1,222

62

14

KJ Chemicals Corporation

Reduced costs associated with dynamic temperature of acryloyl morpholine (ACMO)

958

59

15

Sakai Plant

Upgraded to EHP air conditioning systems on the second and third floors of the No. 1 building

1,147

58

16

Hokuriku Plant

Reduced energy consumption by repairing air valves to prevent air leaks

Subtotal (17 initiatives)
Others (556 initiatives)
Total (573 initiatives)

DIC Report 2017

83

889

58

27,785

1,549

54,161

2,912

81,946

4,461

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YLVLELOLW\RIHQHUJ\FRQVXPSWLRQ,QLWLDOO\LQVWDOOHGDWWKH+RNXULNX3ODQWLQWKHV\VWHP²ZKLFKZRQWKH(&&-&KDLUPDQ¶V3UL]HDW-DSDQ¶V(QHUJ\&RQVHUYDWLRQ*UDQG3UL]HDZDUGVVSRQVRUHGE\WKH(QHUJ\&RQVHUYDWLRQ&HQWHU-DSDQ (&&- ²KDVVLQFHEHHQ
UROOHGRXWDW',&VLWHVDFURVV-DSDQ,Q¿VFDO\HDUWKHV\VWHPZDVLQVWDOOHG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One outcome of efforts to enhance the visibility of energy consumption was an increase in the number of categories of
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Changes in CO2 Emissions in the Supply Chain(Metric tonnes of CO2)
Employee commutes
Business travel
Upstream transportation and distribution

160,000

Waste from businesses
Fuel and energy activities not included in Scope 1 and 2

Capital goods
120,000

80,00040,000

0

12

13

14

16 (FY)15

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professionals who can identify and resolve issues on their own initiative. Participants spend one year participating in
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HPSOR\HHVIURP',&VLWHVLQ-DSDQKDGFRPSOHWHGWKLVSURJUDPZLWKDSSUR[LPDWHO\VXEVHTXHQWO\JRLQJRQWRHDUQDFFUHGLWDWLRQDVSURJUDPLQVWUXFWRUVDGGLQJPRPHQWXPWRHQHUJ\VDYLQJDQGRWKHULQLWLDWLYHV

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Kaizen Initiative Instructor Training (cumulative) program
Kaizen Skill Improvement Training (cumulative) program(Employees)

450
400
350
300

14

31
301

328

357

271

242

200

206

150

160

100

0

40
23

250

50

55

A cumulative total of 357 employees havecompleted the Kaizen Skill Improvement
Training program since its launch.

114
56
2008 2009 2010 2011 2012 2013 2014 2015 2016 (FY)DIC Report 201784

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ESH

5 Increasing Independent Electric Power Generation through Cogeneration and the Use of Renewable Energy

Increasing Cogeneration System–Based Independent Electric Power Generation:LWKWKHDLPRILQFUHDVLQJHQHUJ\HIILFLHQF\DQGDVDSUHFDXWLRQDJDLQVWQDWXUDOGLVDVWHUVWKH',&*URXSLQ-DSDQLVDGYDQFLQJWKHV\VWHPDWLFDGRSWLRQRIFRJHQHUDWLRQDQGWKHXVHRIUHQHZDEOHHQHUJ\WKDWLVHQHUJ\IURPVRXUFHVWKDWDUHQDWXUDOO\UHSOHQLVKHG&RJHQHUDWLRQV\VWHPVEXUQIXHOWRGULYHWXUELQHVIDFLOLWDWLQJWKHSURGXFWLRQRIHOHFWULFSRZHUDQGWKHUHFRYHU\DQGUHXVHRIZDVWHKHDW VWHDPDQGKRWZDWHU WKHUHE\LPSURYLQJHQHUJ\HI¿FLHQF\:LWKFRJHQHUDWLRQV\VWHPVDOUHDG\LQRSHUDWLRQDW¿YHGRPHVWLFSODQWV &KLED6KLJD6DLWDPD*XQPDDQG7RN\R LQ'HFHPEHU',&LQVWDOOHGDQDWXUDOJDVWXUELQH±SRZHUHGFRJHQHUDWLRQV\VWHPZLWKDFDSDFLW\RIN:DWLWV.DVKLPD3ODQW7KHVHV\VWHPVRSHUDWHGDWIXOOFDSDFLW\IRUDOORI¿VFDO\HDUFRQWULEXWLQJto the reduction of CO2 emissions. ,Q$SULOWKH&RPSDQ\UHSODFHGWKHH[LVWLQJFRJHQHUDWLRQV\VWHPDWLWV&KLED3ODQWZKLFKKDGDFDSDFLW\RIN: with a new
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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
Hot water supply
Heat exchanger

Natural gas turbine–powered cogeneration system at the Chiba Plant

Using Renewable Energy,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WRQVRIVWHDPSHU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%\FRPELQLQJWKLVERLOHUZLWKWZRZLQGSRZHUJHQHUDWLRQIDFLOLWLHV HDFKZLWKDJHQHUDWLQJFDSDFLW\RIN: 
DQGDVRODUSRZHUJHQHUDWLRQV\VWHP N: WKH*URXSDLPVWRDFKLHYHDQRSWLPDOSRZHUPL[RISXUFKDVHGHOHFWULFSRZHUHOHFWULFSRZHUSURGXFHGWKURXJKFRJHQHUDWLRQ
systems and electric power generated using renewable energy.
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ZDVPHWULFWRQQHV7KHSODQWLVFXUUHQWO\LQWKHSURFHVVRIEXLOGLQJD
N:PHJDVRODUV\VWHP FRPSULVLQJZDWWVRODUSDQHOVZLWKDVXUIDFH
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power mix while at the same time reducing emissions of CO2.
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the DIC Group in Japan.
DIC Report 201785

CO2 Emission Reductions at Kashima Plant(January–December 2016)
Reduction attributable to use ofwood biomass energy-23,527
Reduction attributable touse of wind power

metrictonnesof CO 2

Reduction attributable touse of solar power-2,308 -49
metrictonnesof CO 2

metrictonnesof CO 2

ResultReduction in CO2 emissions(January– December 2016)-25,884 metric tonnesof CO2

ESH

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

350,000
300,000
250,000

19,732
46,97420,93844,26822,60239,472

19,561
38,83919,70150,438

7%219,178

211,790

204,337

18%

Electric power produced
through cogeneration

200,000
150,000

220,195

227,430

Purchased
electric power

100,000
50,000

Breakdown ofElectric Power
Used by the
DIC Group in Japanin Fiscal Year 2016
by Energy Source

75%

0

12

13

14

Electric power generated using renewable energy
Electric power generated through cogeneration

15

16 (FY)

Purchased electric power

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NLOROLWHUVRIFUXGHRLOOHVVWKDQLWVSUHGHFHVVRUWKHDYHUDJHHQHUJ\FRQVXPSWLRQRIZKLFKZDVHTXLYDOHQWWR
kiloliters of crude oil.
.H\(QYLURQPHQWDO(IÀFLHQFLHV• CO2HPLVVLRQVIURPEXLOGLQJRSHUDWLRQVDWWLPHRIEDVLFGHVLJQ PHWULFWRQQHVRI&22 a year) lower thanWKHEDVHOLQHRI7RN\R0HWURSROLWDQ*RYHUQPHQW¶V(QHUJ\(I¿FLHQF\&DUWH•+LJKHI¿FLHQF\WUDQVIRUPHUVDQGVRODUSRZHUJHQHUDWLRQIDFLOLWLHV N: DQGVWRUDJHEDWWHULHV $K•/LJKWLQJ+LJKO\HI¿FLHQW/('JULGOLJKWLQJ(FROXPL/('DQGDXWRPDWLFGLPPLQJFRQWUROV\VWHP•$LUFRQGLWLRQLQJ1DWXUDOYHQWLODWLRQDQGGLVWULEXWHGFRQWUROV\VWHPWKURXJKKLJKHI¿FLHQF\HOHFWULFKHDWVRXUFHDLUFRROHGKHDWSXPSDLUFRQGLWLRQHU• CO2 control ventilation system used for underground car park
•%XLOGLQJHQHUJ\PDQDJHPHQWV\VWHPXVHGWRFRQVHUYHSRZHU
• Rain and groundwater used to irrigate rooftop greenery and supply all toilets in the building•(QYLURQPHQWDOHI¿FLHQF\DVVHVVPHQW&$6%(( (QYLURQPHQWDO(I¿FLHQF\$VVHVVPHQW&ODVV6

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6 Energy Consumption and CO2 Emissions by the DIC Group Overseas

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WRNLOROLWHUVRIFUXGHRLOHTXLYDOHQWIURPNLOROLWHUVLQ¿VFDO\HDUZKLOHHQHUJ\FRQVXPSWLRQSHUXQLWRISURGXFWLRQZDV
HVVHQWLDO\OHYHODW*-PHWULFWRQQHFRPSDUHGZLWK*-PHWULFWRQQHLQWKHSUHULRXVSHULRG
,QFRQWUDVW&22HPLVVLRQVE\',&*URXSFRPSDQLHVRYHUVHDVURVHRQO\WRPHWULFWRQQHVIURPPHWULFWRQQHVLQWKH
SUHYLRXVSHULRGZKLOH&22HPLVVLRQVSHUXQLWRISURGXFWLRQGHFOLQHGWRNJPHWULFWRQQHIURPNJPHWULFWRQQH7KHSULQFLSDO
factor pushing up CO2HPLVVLRQVZDVDQLQFUHDVHLQSURGXFWLRQLQWKH35&DQGWKH$VLD±3DFL¿FUHJLRQSDUWLFXODUO\RI/&VSLJPHQWVDQG
RWKHUSURGXFWVWKDWFRQVXPHKLJKHUHQHUJ\SHUXQLWRISURGXFWLRQ+RZHYHUHIIRUWVWRLPSURYHSURGXFWLRQHI¿FLHQF\LQ1RUWK$PHULFDDQG
(XURSHZKHUHSURGXFWLRQYROXPHHGJHGXSSOD\HGDVLJQL¿FDQWUROHLQPLQLPL]LQJWKHLPSDFWRIWKLVIDFWRUDQGNHHSLQJWKHLQFUHDVHLQCO2HPLVVLRQVE\WKH',&*URXSRYHUVHDVWR

DIC Report 2017

86

ESH

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

（％）
120

100

600,000

85

84

500,000

87
100

400,000

80

300,000

60

200,000

20

0

+2%

(Kiloliter crude
oil equivalent)

fromfiscal year 2015

14

93

90

350

CO2 emissions

250

Change in CO2 emissions
from base year

200

93

±0%

from
fiscal year 2015

100
90
80

CO2 emmissions per Unit of Production
Change in energy consumption
per unit of production from base year

150
100

16 (FY)

15

100

400

0

13

（％）
110

300

40

100,000

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

70

50
0

CO2 Emissions by Region

60

13

14

15

16 (FY)(Metric tonnes)
300,000
250,000
200,000
150,000

FY2013100,000

FY201450,000FY2015FY20160Americas and Europe

Greater China

Asia–Pacific region

Others.H\(QHUJ\6DYLQJ,QLWLDWLYHV,PSOHPHQWHGE\WKH',&*URXS2YHUVHDVLQ)LVFDO<HDU
Impact in fiscal year 2016
Reduction in
annual energy
consumption(kiloliters)

Reduction in
CO2 emissions(metric tonnes)

Used variable frequency drives (VFDs) in cooling water circulation pumps

543

31

Switched to LED lighting

659

38

DIC India Ltd.

Changed fuels used

640

44

DIC Compounds (Malaysia) Sdn. Bhd.

Promoted in-house energy conservation measures

853

49

DIC Graphics (Thailand) Co., Ltd.

Switched to LED lighting

504

29

Siam Chemical Industry Co., Ltd.

Automated control of cooling water pumps

698

40

DIC Europe GmbH (Austria Branch)

Promoted in-house energy conservation measures

1,116

64

DIC Imaging Products USA, LLC

Eliminated superfluous pumps

1,434

83

DIC Imaging Products USA, LLC

Operated compressors

Qingdao DIC Liquid Crystal Co., Ltd.

RegionAsia–PacificregionAmericasand Europe

Greater
China

Plant

Energy-saving initiative

DIC Fine Chemicals Private Limited
DIC Fine Chemicals Private Limited

372

22

Improved insulating materials used, optimized processes and reduced catalyst density

7,326

439

Qingdao DIC Liquid Crystal Co., Ltd.

Brought high-efficiency production equipment on line

1,124

66

Zhongshan DIC Colour Co., Ltd.

Promoted energy conservation measures for water cooling equipment

1,229

71

DIC Synthetic Resins (Zhongshan) Co., Ltd.

Modified water pipes and adopted booster pumps

678

39

Nantong DIC Color Co., Ltd.

Reduced heat loss by improving the insulating performance of pigment-related equipment

709

43

Nantong DIC Color Co., Ltd.

Reduced energy consumption by modifying equipment used in the formation of red pigments

481

28

Lidye Chemical Co., Ltd.

Changed frequency of 20-HP return cooling water fan

535

31

DIC Zhangjiagang Chemicals Co., Ltd.

Recovered waste heat (steam) from incinerators

6,124

367

Energy-Saving Initiatives Overseas/DZVDQGUHJXODWLRQVDVZHOODVLQIUDVWUXFWXUHGLIIHUEHWZHHQFRXQWULHVand regions. The DIC Group strives to promote energy savings and efficient
operations wherever it is active and in so doing sets precedents for the global
chemicals industry.
DIC Group companies overseas continue to implement a broad range of
HQHUJ\VDYLQJLQLWLDWLYHV,Q¿VFDO\HDUWKHWRWDOQXPEHURIVXFKLQLWLDWLYHV
URVHWR7KDQNVWRWKHVHLQLWLDWLYHV&2 2 emissions by overseas GroupFRPSDQLHVDPRXQWHGWRPHWULFWRQQHVGRZQIURPILVFDO\HDU,Q¿VFDO\HDU',&DQG',&*URXSFRPSDQLHVRYHUVHDVZLOOVWHSXS
cooperation with the aim of contributing further to efforts to curb global warming.

Results of Energy-Saving Initiatives Overseas in Fiscal Year 2016
Number of
initiatives

Greater China

29

20,164

1,194$VLD±3DFL¿F
region$PHULFDVDQG
Europe

34

7,099

419

9

3,545

204

Total

72

30,8081,817

DIC Report 201787

Reduction
Reduction in CO2
in energy
emissionsconsumption (kl) (metric tonnes)

RegionESH$VLD²3DFLÀF5HJLRQ,QWKH$VLD±3DFL¿FUHJLRQZKLFKDFFRXQWVIRURIWKH&22HPLVVLRQVRIWKH',&*URXSHQHUJ\RI¿FHUVIURPVLWHVLQFRXQWULHVJDWKHUHYHU\RWKHU\HDUIRUDFRQIHUHQFH
focusing on energy management issues and progress with energy-saving plans. (The conference is an annual event held in collaboration with DIC Group companies in the
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,Q2FWREHUDUHJLRQDO(6+FRXQWU\KHDGPHHWLQJZDVKHOGDWWKHRI¿FHRI',&$VLD3DFL¿F3WH/WGLQ6LQJDSRUH7KHSXUSRVHRIWKHPHHWLQJZDVWRH[SODLQWKH*URXS¶V¿VFDO\HDUSROLFLHVIRUKHOSLQJWRFRPEDWJOREDOZDUPLQJDQGUHGXFHFDUERQDQGWRGHWHUPLQHDFWLRQSODQVIRUWKHSHULRG$VSDUWRILWVHIIRUWVWRHQVXUHDFKLHYHPHQW
of the CO2HPLVVLRQVWDUJHWVHWIRUWKHJOREDO',&*URXS',&DVVLVWHG*URXSFRPSDQLHVLQWKH$VLD±3DFL¿FUHJLRQE\LPSOHPHQWLQJHQHUJ\VDYLQJSODQVSURPRWLQJHQHUJ\saving analysis activities; preparing and distributing practical energy management manuals and best practice case study materials translated into local ODQJXDJHVLQOLQHZLWKLWV
goal for the foreseeable future of encouraging practical use and retention; and the launch of and provision of support for energy-saving and carbon reduction projects at principal sites.

Activities Radar Chart

Initial check (May 25, 2015)
Target line

Energy-saving promotion framework
Environmental management systems andenergy management systems certification$VLD±3DFLILF 6HQLRU (6+ 0DQDJHUV¶ &RQIHUHQFH LQ
Singapore

Identifying consumption volume

Waste management status

Energy-saving policies,
goals, action plans and reviews

Air and water
management progress andchemical substanceleakage risks

Steam and thermal
equipment performances

Energy-saving analysis activities (Malaysia)

Electricalequipment performances

Water facilities performances

Air pressure equipment performances

TOPIC
Project Launched at Kawarang Plant to Explore the Use of Coconut Shells as an
Alternative to Coal that Will Help Reduce CO2 Emissions$VDSDUWRIWKH',&*URXS¶VJOREDOHQYLURQPHQWDOPDQDJHPHQWHIIRUWVVSHFLDOLVWVIURPWKH3URGXFWLRQ0DQDJHPHQW'HSDUWPHQWYLVLWSURGXFWLRQVLWHVLQWKH35&DQGWKH$VLD±3DFLILFUHJLRQHYHU\\HDUWRDVVHVVSURJUHVVLQWKH
promotion of management systems and follow up on improvements.
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One issue that was identified through this process is the considerable amount of CO2 emissions at the Karawang Plant of Indonesian subsidiary PT.
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SURGXFWLRQRIZKLFKXVHVDVLJQL¿FDQWDPRXQWRIHQHUJ\ IRUZDUPDLUKHDWLQJPHGLXPDQGVWHDPERLOHUV DQGZDWHU IRUZDVKLQJ $WSUHVHQWWKHIDFLOLW\SULPDULO\XVHVFRDOWKHFRPEXVWLRQRIZKLFKKDVDKLJK&22HPLVVLRQVIDFWRUEXWZKLFKDOVRRIIHUVLPSRUWDQWDGYDQWDJHVQRWDEO\WKDWLWLVH[WUHPHO\Energy-saving guidance at Karawang Plant
HFRQRPLFDOLQ,QGRQHVLD DSSUR[LPDWHO\WKHFRVWRIKHDY\RLODQGWKHFRVWRIQDWXUDOJDV DQGHDV\WRREWDLQ%HFDXVHWKH.DUDZDQJ3ODQWDOUHDG\DFFRXQWVIRUFORVHWRRI&22HPLVVLRQVE\WKHJOREDO',&*URXSDQGEHFDXVHWKHIDFLOLW\¶VSURGXFWLRQYROXPHFRQWLQXHVWRULVHVKDUSO\UHGXFLQJHQHUJ\FRQVXPSWLRQDQG¿QGLQJORZFDUERQIXHOVRXUFHVLVDFULWLFDO
FKDOOHQJH7RWKLVHQGWKH3URGXFWLRQ0DQDJHPHQW'HSDUWPHQWWKH3LJPHQWV3URGXFW'LYLVLRQDQGWKH.DUDZDQJ3ODQWNLFNHGRIID&22 emissions reduction project that has focused on exploring low-carbon alternatives
WRFRDO2QHSDUWLFXODUO\SURPLVLQJFDQGLGDWHLGHQWL¿HGE\WKHSURMHFWZDVFRFRQXWVKHOOVZKLFKDUHOHIWRYHUDIWHUWKHH[WUDFWLRQRIFRFRQXWRLODQGRWKHUSURGXFWV%HFDXVH,QGRQHVLDLVWKHZRUOG¶VVHFRQGODUJHVWSURGXFHURIFRFRQXWRLOFRFRQXWVKHOOVDUHHDV\WRVHFXUHLQODUJHTXDQWLWLHV-DSDQFXUUHQWO\LPSRUWVFRFRQXWVKHOOVDVSDUWRIDQHIIRUWWRUHSODFHDSRUWLRQRIIXHOXVHGLQFRDO¿UHGHOHFWULFSRZHUJHQHUDWLQJIDFLOLWLHVZLWKELRPDVV7DNLQJLQWRDFFRXQWWKHIDFWWKDWWKHFDORUL¿FYDOXHRIFRFRQXWVKHOOVDSSUR[LPDWHO\N&DONJLVFRPSDUDEOHWRWKDWRIWKHFRDOXVHGE\WKH.DUDZDQJ3ODQWLQ'HFHPEHUWKHWHDPEHJDQFRQGXFWLQJFRPEXVWLRQWHVWVXVLQJDPL[WXUHRIFRDODQGSXOYHUL]HGFRFRQXWVKHOOVLQYDULRXVUDWLRVDVDUHVXOWRIZKLFKLWFRQ¿UPHGWKDWDPL[WXUHRIXSWR±FRXOGEHXVHGZLWKQRLPSDFWRQWKHRSHUDWLRQRUFRPEXVWLRQRURQ
LQFLQHUDWHGDVKZKLFKLVXVHGDVDQDJJUHJDWHLQFHPHQW7KH.DUDZDQJ3ODQWKDVVHWDWDUJHWSHULRGGXULQJZKLFKLWSODQVWRFRQWLQXHWHVWLQJD±PL[WXUH',&HVWLPDWHVWKDWUHSODFLQJRIWKHFRDOXVHGE\WKH
plant with coconut shells would facilitate a reduction in annual global CO2HPLVVLRQVE\WKH',&*URXSRIDSSUR[LPDWHO\DGHFUHDVHRILQWKH$VLD±3DFL¿FUHJLRQDVDZKROHDQGRILQ,QGRQHVLD ,Q¿VFDO\HDUWKHHPSKDVLVRIWKHSURMHFWZLOOVKLIWWRSUDFWLFDOLPSOHPHQWDWLRQZLWKDYLHZWRLQFUHDVLQJWKHFRFRQXWVKHOOFRQWHQWRQFHXVHRIWKHFRPELQHGFRDO±FRFRQXWVKHOOIXHOLVRQWUDFN

0U-XVRISUHVLGHQWRI37',&*UDSKLFV¿IWKIURPULJKW 0U6LJLKDQWRJHQHUDO
manager of the Karawang Plant (fourth
IURPULJKW 0U2RVVHQLRUPDQDJHU
RIIDFLOLWLHV WKLUGIURPULJKW 0U <RJLH
senior manager of utilities (fifth fromOHIW DQG0U<DPDGDDGYLVRU IRXUWKfrom left)
Karawang Plant boiler

DIC Report 201788

Coconut shells to be used as fuel

ESH

Reducing CO2 Emissions by Installing New Solar Panels
 6LDP&KHPLFDO,QGXVWU\&R/WG
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FRDWLQJUHVLQVXQGHUSLQQHGE\LQFUHDVHVLQDXWRPRELOHSURGXFWLRQ7KHXVHRIUHQHZDEOHHQHUJ\LV
DWWUDFWLQJFRQVLGHUDEOHDWWHQWLRQWKDQNVWRDPRQJRWKHUVWD[EUHDNVRIIHUHGE\WKH7KDLJRYHUQPHQW$JDLQVWWKLVEDFNGURSLQ¿VFDO\HDUWKHFRPSDQ\LQVWDOOHGQHZVRODUSDQHOVZLWKDFRPELQHG
FDSDFLW\RIN: DQQXDORXWSXWN:K WRSURGXFHHOHFWULFSRZHUIRULWVRZQXVH7KH
QHZIDFLOLW\LVH[SHFWHGWRFRPPHQFHRSHUDWLRQLQODWH-XO\

DIC Report 201789

Siam Chemical Industry (Thailand)

ESH

PRC

,QWKH35&ZKLFKDFFRXQWVIRURIWKH',&*URXS¶VJOREDO&22HPLVVLRQVHQHUJ\GLUHFWRUVIURPVLWHVDFURVVWKHFRXQWU\JDWKHUHYHU\RWKHU\HDUIRUD
conference focusing on energy management issues and progress with energy-saving plans. (The conference is an annual event held in collaboration with DIC*URXSFRPSDQLHVLQWKH$VLD±3DFL¿FUHJLRQZLWKWKHORFDWLRQDOWHUQDWLQJEHWZHHQWKHWZRUHJLRQV ,Q1RYHPEHUDSSUR[LPDWHO\LQGLYLGXDOVLQFOXGLQJWZR(6+RI¿FHUVIURPWKH$VLD±3DFL¿FUHJLRQSDUWLFLSDWHGLQDMRLQW(6+FRQIHUHQFHZKLFKZDVKHOGDW1DQWRQJ',&&RORU&R/WG7KHFRQIHUHQFHIRFXVHGRQWKH*URXS¶V¿VFDO\HDUSROLFLHVIRUKHOSLQJWRFRPEDWJOREDOZDUPLQJDQGUHGXFHFDUERQ
and set CO2 emissions targets for Greater China. Participants also gave presentations introducing case studies and plans for future initiatives. The objective of theconference is to provide information on successful energy management and energy-saving efforts to help enhance the capabilities of other companies. Gatherings
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Energy conference for Group companies in the PRC
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(Participants included production facility general managers and management-level energy directors)

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is primarily because cooling water is supplied by remote motors and water supply pumps operate at full capacity when refrigerators
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improvements. This resulted in the installation of a cooling tower and water pump near refrigerators to recirculate cooling water. The
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A cooling tower and water supply pump were installed nearrefrigerators and temperature management was automatedCooling tower

Extension 1. Cooling tower

Cooling
water tank

Refrigerator
Ice watertank
Cooling water pump
Motor building

Ice water pump

Approx. 300 meters
Metal carboxylates plant

DIC Report 2017

90

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

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

Manager in charge of eﬃciency, Production Management Department Kazuo Kawaguchi

The key themes guiding us are “promote steady energy-saving initiatives,” “implement measures
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measures to help combat global warming has increased dramatically. One likely outcome of this is the accelerated propagation of regulations governing emissions
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deployment of energy management and carbon-reducing measures that have proven effective in Japan across the global DIC Group.
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measures enabling them to meet certain standards. It is important that we create a system whereby local Group companies keep tabs on what subsidies are available and determine
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DIC Report 201791

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production processes (United States and Europe)

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to reduce electric power consumption by limiting the use of air conditioning in summer and winter through measures such
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conditioning settings.
8 Reporting to the CDPtheD

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General Manager, Production Management Department Michio Uchiyamam

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investors worldwide to motivate companies to disclose information on initiatives to combat climate change and key environmental
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our ability to achieve a balance between corporate growth and sustainability and at motivating them to achieve the targets that have been set.

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
facilities to meet regularly and established four key themes to guide the efforts of working groups: promote energy conservation;
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electrical technologies to eliminate problems arising from electrical issues; and improve the performance of power systems. Through
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areas to further reinforce responsiveness Groupwide.

DIC Report 2017

92

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Responsible Logistics
Basic Policy and Framework for Promoting Initiatives
DIC’s commitment to promoting Responsible Care encompasses initiatives aimed at ensuring safety in logistics, that is, the reduction of chemical risks associated with the distributionof chemicals, and at reducing CO2 emissions attributable to the transport of its products. Accordingly, the Company sets annual targets and promotes a variety of initiatives.
7KH',&*URXS¶VORJLVWLFVFRQ¿JXUDWLRQ²HQFRPSDVVLQJWUDQVSRUWEHWZHHQSURGXFWLRQIDFLOLWLHVWKHWUDQVSRUWRISURGXFWVWRFXVWRPHUVDQGLQWHUQDWLRQDOORJLVWLFVDPRQJRWKHUV²SUHYLRXVO\FHQWHUHGRQDGHGLFDWHGVXEVLGLDU\HVWDEOLVKHGLQZKLFKRSHUDWHGXQGHUWKHGLUHFWVXSHUYLVLRQRI',&,QDELGWRUDWLRQDOL]HDQGLQFUHDVHWKHHI¿FLHQF\
RIORJLVWLFVLQ¿VFDO\HDU',&WUDQVIHUUHGRZQHUVKLSRIWKHVXEVLGLDU\WRDSDUWQHU¿UPDQGEHJDQRXWVRXUFLQJLWVORJLVWLFV6LQFHWKHQWKH*URXSKDVZRUNHGFORVHO\ZLWKthe partner to improve the safety of and reduce CO2 emissions from logistics.
:LWKWKHDLPRIEHWWHUUHVSRQGLQJWRVRFLDOLPSHUDWLYHVDVVRFLDWHGZLWKWKHWUDQVSRUWRIFKHPLFDOVRYHUWKHPHGLXPWRORQJWHUPLQ-DQXDU\',&FRPELQHGWKHORJLVWLFVFRPSRQHQWVRILWVYDULRXVGHSDUWPHQWVWRFUHDWHDQLQGHSHQGHQW/RJLVWLFV'HSDUWPHQW$VFRQVLJQRUWKHQHZGHSDUWPHQWZKLFK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SDUWQHUVWKDWLVWKLUGSDUW\ORJLVWLFV 3/ ¿UPV SURYLGLQJFRPSOHWHRXWVRXUFHGORJLVWLFVVHUYLFHVWRIXUWKHUHQKDQFHVDIHW\DQGUHGXFHHQYLURQPHQWDOLPSDFW3/)LUPVWKDWSURYLGHSDUWLDORUFRPSOHWHRXWVRXUFHGORJLVWLFVVHUYLFHV

DIC’s Logistics Configuration
Regular safety
and environment
meetings

DIC’s Logistics
Department

Overseas
Group companies
SupporteﬀortsConﬁrmation of
execution(Policy/initiatives/
discussions)Ɣ/RDGLQJDQGXQORDGLQJ
Ɣ7UDQVSRUWEHWZHHQSURGXFWLRQIDFLOLWLHVƔ'HOLYHU\RISURGXFWV（Ɣ7UDQVSRUWRISXUFKDVHGPDWHULDOV）
2WKHUVƔ'RPHVWLFSODQQLQJ
Ɣ2YHUVHDVSODQQLQJƔ*OREDOWUDGLQJJURXS ([SRUWVLPSRUWV

Product divisions

Logistics firms
Principal DIC production facilities(Health and safety committees)

Safety Management in Logistics
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Act and other transportation laws, as well as with related United Nations’ standards. The Group supplies
LQIRUPDWLRQQHHGHGWRGLVSOD\ODEHOVFRPSO\LQJZLWK*+6 DVZHOODVSURYLGHVVDIHW\GDWDVKHHWV 6'6V and other documentation to ensure safe shipping in Japan and overseas.
,Q-DSDQWKH/RJLVWLFV'HSDUWPHQWFRRSHUDWHVZLWKORJLVWLFV¿UPVPHHWLQJUHJXODUO\WRGLVFXVV
measures for improving the safety of both loading and transport work. Members of plant health and
VDIHW\FRPPLWWHHVDQGORJLVWLFV¿UPV¶DFFLGHQWUHGXFWLRQFRPPLWWHHVDWWHQGHDFKRWKHUV¶PHHWLQJV
to exchange information and promote on-site safety improvement initiatives.
7KH/RJLVWLFV'HSDUWPHQWDOVRLQVSHFWVRSHUDWLRQVDWWKHRI¿FHVRIORJLVWLFVSDUWQHUVORFDWHGRQ
VLWHDWLWVPDLQGRPHVWLFSURGXFWLRQIDFLOLWLHV,Q¿VFDO\HDULQVSHFWLRQVZHUHLPSOHPHQWHG
DWVHYHQRIWKHVHRI¿FHVDIWHUZKLFKLVVXHVZHUHSRLQWHGRXWDQGLPSURYHPHQWVFRQ¿UPHGDIC endeavors to maintain and enhance safety by requiring transport personnel to carry Yellow&DUGV 2 to ensure proper responses in the event of an emergency and by meeting regularly with
UHSUHVHQWDWLYHVIURPORJLVWLFV¿UPVWRGLVFXVVVDIHW\DQGWUDQVSRUWDWLRQTXDOLW\Regular meeting with logistics partners

 *+6*OREDOO\+DUPRQL]HG6\VWHPRI&ODVVL¿FDWLRQDQG/DEHOOLQJRI&KHPLFDOV Yellow Cards are part of activities recommended by the Japan Chemical Industry Association (JCIA). The cards contain information
about the right actions to take if an accident occurs. It provides contact details to ensure proper responses by transportation
FRPSDQLHV¿UH¿JKWHUVDQGSROLFHRI¿FHUVLIDQDFFLGHQWRFFXUVGXULQJWKHWUDQVSRUWRIFKHPLFDOVXEVWDQFHV7UDQVSRUWSHUVRQQHO
must carry these cards at all times.

Yellow Card carried by transport personnel

DIC Report 2017

93

ESH

Reducing Greenhouse Gas
Emissions Attributable to Logistics

General Manager, Logistics Department

30,000(GJ/10,000 tonne km)(%)
30

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

(Metric tonnes of CO2)

0

0
07

08

Kazuhiko Yamada

09

10

11

12

13

14

15

16 (FY)m

VOICE

CO2 Emissions and Energy Consumption per
Unit of Production Attributable to LogisticstheD

I C G ro u

p

f ro

,QILVFDO\HDU&22 emissions attributable to logistics and
HQHUJ\FRQVXPSWLRQIRUWKHVDPHSXUSRVHGHFUHDVHG,Q
contrast, owing to a decrease in the volume of products shipped by
WUXFNZKLFKFDXVHGWKHHI¿FLHQF\RIWUXFNWUDQVSRUWWRGHWHULRUDWH
energy consumption per unit of production attributable to logistics
URVH,QWKLVHQYLURQPHQWWKHYROXPHRISURGXFWVVKLSSHG
XVLQJPRGHVRIWUDQVSRUWTXDOLI\LQJDV³PRGDOVKLIW´URVHDV
shipments by container ship remained level, while shipments by rail
FOLPEHG3ULQFLSDOIDFWRUVEHKLQGWKHLQFUHDVHLQWKHYROXPH
of products shipped by rail included the combining of lots and thepurchase of containers as part of an effort to encourage use of thismode. As a consequence, the DIC Group’s modal shift rate wasXSIURPLQ¿VFDO\HDU7KH*URXSZLOOFRQWLQXHWR
promote modal shift, as well as to explore remedial measures fortruck transport, including increasing load factor.

We are searching for ways to realize sustainable logistics.
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a serious issue. To ensure the continuity of transport and distribution services, consignors must also make improvements. To this end, we arepromoting dialogue with logistics companies, among others, a process that has helped identify a number of issues, including the need to assign assistants
WRUHGXFHWKHEXUGHQRQFDUJRORDGHUVPLQLPL]HVWDQGE\WLPHDQGXVHFRVKLSSLQJ7KHUHDUHQRHDV\VROXWLRQVEXW,VHHZRUNLQJWRDGGUHVVWKHVHLVVXHVWDNLQJD
medium- to long-term perspective, as one of the Logistics Department’s missions.

DIC Report 2017

94

ESH

Report on Other Initiatives
Goals and Achievements of Major Initiatives (YDOXDWLRQVDUHEDVHGRQVHOIHYDOXDWLRQVRIFXUUHQWSURJUHVV.H\★★★ = Excellent; ★★ 6DWLVIDFWRU\★ 6WLOOQHHGVZRUN
Objectives of initiatives

Goals for fiscal year 2016

Achievements in fiscal year 2016

Evaluation

Goals for fiscal year 2017

Report on Responsible Careinitiatives and prepare businesssite 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.

• M aint ain system for stor ing andmanaging PCBs.
• Promote the proper disposal of equipment 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 system for storing and managing PCBs.
• Promote the proper disposal of equipment containing PCBs.

Protect the ozone layer.

• Reinforc e f ramewor k for managing
equipment 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.

• 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 the potential
risks associated with the discovery ofasbestos during demolition or whenretrofitting equipment and 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 the potential risks
associated with the discovery of asbestos during demolition or when retrofitting equipment and appropriate
responses.

• Provide support and direction for efforts toenhance the capabilities of ESH coordinators
in Greater China and the Asia–Pacific region.
• Continue to provide and increase the sophistication of education, training and direction.
• Promote expert-led training for employees
regarding laws and regulations.

• Training for ESH coordinators in Greater
China and the Asia–Pacific region was
conducted in Japan.
• In-house training regarding pertinent laws
and regulations and business procedures
was provided.

★★★

• Provide support and direction for efforts
to enhance the capabilities of ESH
coordinators in Greater China and theAsia–Pacific region.
• Continue to provide and increase thesophistication of education, training anddirection.

Train raw materials and productsafety experts.

DIC Report 201795

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

Goals for fiscal year 2016

Achievements in fiscal year 2016

Evaluation

Goals for fiscal year 2017

Firmly establish and promote awareness of product quality as essential toupholding a sound operating foundation.

Product quality–related educational
initiatives were implemented Groupwide
in line with the Group’s quality policy.

★★★

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

Promote ef for ts to secure productquality through collaboration between
the Quality Assurance Department andproduct division quality assurance
sections.

The department and sections held regular discussions
with the aim of ensuring an ideal quality assurance armand collaborated to conduct product quality audits at all
DIC Group companies in Japan and reinforce quality
assurance frameworks.

★★★

Encourage relevant divisions and departments to cooperate at all stages, fromproduct planning through to shipment,with the goal of providing the products
and ser vic es that customer s andmarkets seek.

Secure product quality.

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 Technical
Administrative Division and Production Administrative Division on the horizontal axis. DIC has also
introduced a quality management system (QMS) based on ISO 9001—the International Organizationfor Standardization’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
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division quality assurance sections to facilitate prompt and appropriate quality management. By thus
GLYLGLQJ*URXSZLGHDQGSURGXFWVSHFL¿FTXDOLW\PDQDJHPHQW',&KDVSRVLWLRQHGLWVHOIWRDGYDQFH
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SURGXFWTXDOLW\OHYHOVWKHUHE\HQVXULQJFXVWRPHUVDWLVIDFWLRQ2YHUVHDV',&*URXSFRPSDQLHV
continue to promote a variety of efforts directed at further reinforcing product quality.

DIC Report 201796

Enhancequality

Product
divisions
QMS

Increasecustomersatisfaction

Production facilities certified under ISO 9001

Production Administrative Division
andTechnical Administrative Division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
LQLWLDWLYHVGXULQJSURGXFWSODQQLQJGHVLJQDQGGHYHORSPHQWWKHSURFXUHPHQWRIUDZPDWHULDOVDQGVDOHVJLYLQJFRQVLGHUDWLRQWRWKHQHHGIRU
HIIHFWLYHSURGXFWVWHZDUGVKLS0HWLFXORXVULVNHYDOXDWLRQLVFRQGXFWHGDWWKHGHVLJQUHYLHZVWDJHWRJXDUDQWHHVDIHW\$IWHUSURGXFWVDUHVROG
customer and market assessments are gathered and fed back to development departments to facilitate further quality improvements. Looking
DKHDGZLWKWKHUHDOLJQPHQWRILWV6$3V\VWHP',&ZLOOVWUHQJWKHQFRQWUROVLQDUHDVVXFKDVSURGXFWGHYHORSPHQW LQFOXGLQJUHVSRQGLQJWRWKHQHHGIRULQIRUPDWLRQRQUDZPDWHULDOV E\SURPRWLQJFRPPXQLFDWLRQZLWKWHFKQLFDODQGRWKHUGHSDUWPHQWVRequests from customers/market 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
Product

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

2 New Efforts to Enhance Product Quality-Related Educational Initiatives
Committed to providing safe, secure products that satisfy its customers, DIC recognizes
WKHLPSRUWDQFHRIHQVXULQJWKDWHPSOR\HHVPDLQWDLQDKLJKDZDUHQHVVRITXDOLW\DVZHOODVDFRQVWDQWFRPPLWPHQWWRDFKLHYLQJIXUWKHUTXDOLW\LPSURYHPHQWVDQGXSKROGLQJ
high quality standards. To this end, the Company provides education regarding product
TXDOLW\WRDOO',&*URXSHPSOR\HHVDWVSHFL¿FWLPHVLQFOXGLQJWKURXJKWUDLQLQJIRUWKRVHQHZO\SURPRWHG,QILVFDO\HDU',&DOVREHJDQRIIHULQJWUDLQLQJOHGE\H[WHUQDO
H[SHUWVLQWKH¿HOGIRUHPSOR\HHVLQYROYHGLQTXDOLW\PDQDJHPHQW7RGDWHDWRWDORILQGLYLGXDOVKDYHSDUWLFLSDWHGLQVXFKWUDLQLQJ*RLQJIRUZDUG',&ZLOOFRQWLQXHZRUNLQJWRHVWDEOLVKDQGSURPRWHIXUWKHUDZDUHQHVVRISURGXFWTXDOLW\DVHVVHQWLDOWRXSKROGLQJDsound operating foundation.

Training session

3 Global Product Quality Initiatives$OORYHUVHDV',&*URXSFRPSDQLHVZLWKSURGXFWLRQFDSDELOLWLHV H[FOXGLQJWKRVHEHORQJLQJWRWKH6XQ&KHPLFDO*URXS KDYHHDUQHG
FHUWLILFDWLRQXQGHU,62WKH,QWHUQDWLRQDO2UJDQL]DWLRQIRU6WDQGDUGL]DWLRQ¶VEHQFKPDUNIRUTXDOLW\PDQDJHPHQWV\VWHPV',&ZLOO
promote efforts to reinforce its global quality assurance capabilities through the implementation of quality audits.

DIC Report 201797

Quality

4 Preventing the Recurrence of Problems
Information on quality problems (complaints and criticisms) that arise is collated and analyzed
DQGWKHQVKDUHGDFURVVWKH*URXSWRSUHYHQWUHFXUUHQFH7RGLVFRYHUWKHFDXVHVRIVXFKSUREOHPVWKH*URXSHPSOR\V³ZK\ZK\DQDO\VLV´ ³naze-naze bunseki´ 8VLQJZK\ZK\DQDO\VLVLQDQHIIRUWWRHOLPLQDWLHSURGXFWUHMHFWDWWKHSURGXFWLRQVWDJHWKH+RNXULNX3ODQWLQ
-DSDQKDVVRIDUVXFFHHGHGLQDFKLHYLQJDQUHGXFWLRQIURPWKH¿VFDO\HDUOHYHO',&DOVRDSSOLHVZK\ZK\DQDO\VLVLQGHWHUPLQLQJWKHFDXVHRIDFFLGHQWVDQDSSURDFKWKDW
continues to yield solid results.
',&DOVRSXEOLVKHV4XDOLW\1HZV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GLVWULEXWHGGLUHFWO\WRUHOHYDQWSDUWLHV4XDOLW\1HZVLVXVHGLQHPSOR\HHWUDLQLQJ

Quality News (,VVXH1RSXEOLVKHGLQ$SULO)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

（%）

-10
-32

ー20

-57

ー30

0
ー10

-56

-62

（%）

-10
-27

ー20
ー30

ー40

ー40

ー50

ー50
12

ー60

13

-37
-46

-45

14

15

16 （FY）

ー70
14

15

16（FY）

General Manager, Liquid Crystal Quality Assurance Department, Liquid Crystal Materials Product Division, Saitama Plant Kunihiko Kotani

m

VOICE

13

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We are working to add increased value to products.
/LTXLGFU\VWDOPDWHULDOVSOD\DVLJQL¿FDQWUROHLQGHWHUPLQLQJWKHTXDOLW\RIWHOHYLVLRQVWDEOHWFRPSXWHUVDQGRWKHUGHYLFHV0\
WHDPDSSURDFKHVLWVZRUNZLWKWKHDLPRI¿QGLQJZD\VWRHQVXUHVWDEOHTXDOLW\DVZHOODVWRLPSURYHXVDELOLW\RXWSXWDQGRWKHUIDFWRUVWKDWLQÀXHQFHSHUIRUPDQFHEXWFDQQRWQHFHVVDULO\EHH[SODLQHGLQQXPEHUV)URPWKHGHYHORSPHQWVWDJHWRWKHGHVLJQVWDJH
ZHKHOSHQVXUHHIIHFWLYHVXSSO\FKDLQPDQDJHPHQWLPSURYHLQVSHFWLRQDFFXUDF\DQGFRQ¿UPSURGXFWLRQSURFHVVHVZRUNLQJFORVHO\ZLWKRWKHUGHSDUWPHQWVWRZDUGDFRPPRQJRDODIC Report 201798

Basic ThemesCore and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

Human Resources Management
Working to Enhance Job Satisfaction
SDGs Goal 3, 4, 5, 8and10

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

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

Goals for fiscal year 2016
Continue working to assess the state ofhuman rights and labor practices basedon the results of voluntary inspections.
Promote the creation of a unified policy
regarding personnel systems, evaluation
and remuneration for Group company
presidents and product division heads inJapan, the Asia – Pacif ic region andGreater China.

Achievements in fiscal year 2016

Evaluation

Goals for fiscal year 2017

Assessments at f ive companies in
J a p a n a n d ove r s e a s r eve a l e d n oviolations of human rights.

★★

Enhance awareness of human rights by conducting
seminars for management-level employees at DIC’s
corporate headquarters. Formulate a human rights
policy. Conduct voluntary human rights inspectionsof Group companies in Japan and overseas.

The scope was expanded to include Group
company presidents in Japan and overseas
and general managers of regional headand general managers quarters.

★★

Introduce a unified policy regarding
remuneration for management-level
employees at DIC and DIC Graphics.

•Continue to offer training programs for
employees and candidates for executive
positions at DIC Group companies inJapan and overseas.
•Promote the hiring of foreign nationals
and continue to implement measures
aimed at fostering global employees.

①Training programs were offered for newCEOs of Group companies in Japan andfor newly appointed executives at overseas
Group companies.
②A total of 11 foreign nationals were hired. A
total of 190 employees took part in training
programs designed to foster Japaneseemployees capable of functioning in globalb u s i n e s s e nv i r o n m e n t s , w h i l e t h eOverseas Trainee Program attracted 18
participants.

★★

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 andincrease the percentage of new female
graduates recruited to 30%-plus.

A total of 800 employees participated in
the Women in DIC Forum. A lunch
seminar for female employees attracted
85 individuals. A total of 53 new graduates were recruited, of whom 15 (28.3%)
were female.

★★

Enhance measures for advancing thec areer s of female employees andincrease the percentage of new female
graduates recruited to 30%-plus.

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

Increase the number of employeeswith disabilities to 2.2% of DIC’s totallabor force.

As of December 31, 2016, individuals
with disabilities accounted for 2.04% of
DIC’s labor force.

★

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

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

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 supports and adheres to global codes governing human rights, notably the Universal Declaration of Human Rights. The DIC Group Code of BusinessConduct, which outlines standards that DIC Group employees are expected to observe, lays down provisions prohibiting human rights violations and requiring respect fordiversity—philosophies that are the foundation of the DIC Group’s corporate activities. All DIC Group employees are obliged to provide written pledges to abide by the DIC
Group Code of Business Conduct and to conduct themselves as stipulated therein. Domestic and overseas Group companies implemented voluntary human rights andlabor practices inspections as part of ongoing efforts to prevent issues from arising. The results of these inspections were assessed and no violations were found to exist.
,Q¿VFDO\HDU',&EHFDPHDVLJQDWRU\WRWKH8QLWHG1DWLRQV*OREDO&RPSDFW 81*& SOHGJLQJLWVVXSSRUWIRUWKH81*&¶VSULQFLSOHVZKLFKLQFOXGHWHQHWV
regarding 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 thehuman resources management practices of all Group companies and prevent violations from occurring.
,QUHVSRQVHWRWKH0RGHUQ6ODYHU\$FW ',&LVUHLQIRUFLQJWUDLQLQJUHJDUGLQJVXSSO\FKDLQGXHGLOLJHQFH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.
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DIC Report 201799

Human Resources Management

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 informationand its vision for the future with union representatives and encourages the frank exchange of opinions. A total of 67.6% of parent company
HPSOR\HHVEHORQJWRWKH',&(PSOR\HHV¶8QLRQ RIQRQPDQDJHULDOHPSOR\HHVDUHXQLRQPHPEHUVGlobal Human Resources Management,QOLQHZLWK7KH',&:$<ZKLFKUHSUHVHQWVLWVIXQGDPHQWDOPDQDJHPHQWSKLORVRSK\DQGLWV',&PHGLXPWHUPPDQDJHPHQWSODQWKH
',&*URXSKDVHVWDEOLVKHGDJOREDOKXPDQUHVRXUFHVPDQDJHPHQWIUDPHZRUNXQGHUZKLFK*URXSFRPSDQLHVLQ-DSDQWKH35&DQGWKH
$VLD±3DFL¿FUHJLRQDUHRYHUVHHQE\',&ZKLOHWKRVHLQ1RUWK$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
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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.
+DYLQJXQLILHGSHUVRQQHOHYDOXDWLRQV\VWHPVIRUH[HFXWLYHVLQ-DSDQWKH35&DQGWKH$VLD±3DFLILFUHJLRQDVZHOODVFUHDWHGDmanagement 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.
',&LVVWULYLQJWRUHDOL]HDIUDPHZRUNWKDWFUHDWHVDEURDGHUPRUHOHYHOSOD\LQJ¿HOGWKDWDOORZVHPSOR\HHVZLWKGLYHUVHYDOXHVDQGVNLOOVto exercise their capabilities and uses the same yardstick to evaluate their achievements. By so doing, the Company aims to create work
environments that enhance job satisfaction and contribute to the expansion of DIC Group businesses.

Basic Personnel Statistics (DIC)

Number of
employees

MaleFemaleTotal
Male

Average age

FemaleTotal

Averageyears ofemployment
New
graduates
hired

Male
FemaleTotal
Male
FemaleTotal)LVFDO\HDU

)LVFDO\HDU

)LVFDO\HDU

2,876
666
3,542
42.2
39.8
41.7
18.2
17.4
18.1
72
19
91

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

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

Retention
rate (after
three years)

Male

Separations(voluntary)(number ofindividuals)

Male

Separation rate(voluntary)

FemaleTotal
FemaleTotal
Male
FemaleTotal)LVFDO\HDU

)LVFDO\HDU

)LVFDO\HDU

()LVFDO\HDUKLUHV)()LVFDO\HDUKLUHV)()LVFDO\HDUKLUHV)

91.2%
100%
92.6%
23
7
30
0.8%
1.1%
0.9%

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%

Integrating DIC Group Executive Evaluation Systems
The DIC Group has also integrated its evaluation systems for Group company presidents and other executives in Japan and overseas
with the goal 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. In addition, the Group also integrated
its global personnel policies to ensure that remuneration is in keeping with local market levels and individual job responsibilities.

DIC Report 2017100

Human Resources Management

Securing and Fostering Human Resources
1 Ensuring Fair and Consistent Treatment
To ensure that the efforts and achievements of all employees are reflected appropriately in their treatment, DIC has consolidated its
numerous employee qualification systems irrespective of job classification and educational credentials. The selection of employees to
UHFRPPHQGIRUTXDOL¿FDWLRQLVGRQHWKURXJKVFUHHQLQJEDVHGRQREMHFWLYHVWDQGDUGVWKHUHE\JXDUDQWHHLQJHTXDORSSRUWXQLWLHVIRUSURPRWLRQto all motivated, capable employees.
Remuneration and personnel evaluation systems designed to enhance job satisfaction ensure that abilities and achievements are assessed
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personnel evaluation system, a goal-setting management tool that promotes both corporate growth and employee development. Resultsof individual evaluations are fed back in full to employees, including reasoning behind determinations—a transparent process that ensures
HPSOR\HHVDUHODUJHO\VDWLV¿HGZLWKHYDOXDWLRQUHVXOWVSettingofdivisiontargets

Setting ofindividual
targets

ExecutionofdutiesInterview

Results
evaluation

Semiannual
evaluation

Superior

Process
evaluation

Annualevaluation

Feedback

SalaryPromotion

Skillsdevelopment

Careerdevelopment
sheet

Individual

Bonus

Appropriate
appointment

2 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 medium-term focus of its human resources development program as being to nurture human resources capable of reinforcing
front-line capabilities and accelerating change.
DIC’s training system comprises programs in six categories. These programs are based on curricula that emphasize a systematic approachWRKHOSLQJHDFKHPSOR\HHDFTXLUHFULWLFDOVNLOOV,Q¿VFDO\HDUWUDLQLQJHPSKDVL]HGWKHFRQFHSWVRI³JOREDO´DQG³GLYHUVLW\´ZLWKWUDLQLQJto improve English-language skills expanded and Japanese-language training for non-native speakers and entry-level education for midcareer hires added.

Medium-Term Focus of DIC’s Human Resources
Development Program
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Accelerate change
Reinforce front-line
capabilities

Fundamental
capabilities as a
DIC employee

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

DIC Report 2017101

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

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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*OREDO0DQDJHPHQW SUHSDUDWRU\WUDLQLQJIRUHPSOR\HHVDVVLJQHG
WRRYHUVHDVSRVWV *OREDO&KDOOHQJH3URJUDP7DUJHW*OREDO
3URJUDP WUDLQLQJWRHQKDQFH(QJOLVKODQJXDJHFRPPXQLFDWLRQVNLOOV (IIHFWLYH(0DLOLQJ WUDLQLQJLQKRZWRFRPSRVHHPDLOVLQ(QJOLVK -DSDQHVHODQJXDJHWUDLQLQJIRUHPSOR\HHVZKRDUHQRW
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.DL]HQ6NLOO,PSURYHPHQW7UDLQLQJ3URJUDPRWKHUV WHFKQLFDOGHSDUWPHQWVWUDLQLQJWRVXSSRUWWKHDELOLW\WRSURSRVH5 'WKHPHVRWKHUV VDOHVGHSDUWPHQWVWUDLQLQJWRFXOWLYDWHSURSRVDOGHYHORSPHQWFDSDELOLWLHVRWKHUV DQGVXSSRUWGHSDUWPHQWV ³ZK\ZK\DQDO\VLV´WUDLQLQJRWKHUVOn-the-job training

Hands-on training in the workplace to foster employees and cultivate skills:RUNSODFHVSHFL¿FRQWKHMREWUDLQLQJGRPHVWLFWHFKQLFDOGHSDUWPHQWWUDLQHHSURJUDP2YHUVHDV7UDLQHH3URJUDP*OREDO&DSDELOLW\'HYHORSPHQW3URJUDP

Self development

Support for employees seeking to enhance their skills

Correspondence courses, e-learning courses, in-house seminar courses,
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TOPIC
Training to Enhance Proposal Development Capabilities
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departments form cross-department project teams, which select practical customer-centered themes, formulating solutions to pertinent hypothetical issues andfurther honing 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 and persuasive 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DSSO\QHZO\DFTXLUHG
VNLOOVDOPRVWLPPHGLDWHO\JUHDWO\LPSURYLQJIURQWOLQHFDSDELOLWLHV3DUWLFLSDQWVKDYHDOVRXVHGWKHLUVHOHFWHGWKHPHVWRPDNHSURSRVDOVWRDFWXDOFXVWRPHUVPDQ\RIZKLFKKDYHUHDFKHGWKHYHUL¿FDWLRQVWDJH
3 Fostering Global Human Resources
7KHJRDORI',&¶V2YHUVHDV7UDLQHH3URJUDPLVWRIRVWHUJOREDOKXPDQUHVRXUFHVE\GLVSDWFKLQJ
selected employees to work at a DIC Group company in another country for a specified period,
thereby helping them develop a more international mindset, improve their skills and build networks
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Japan welcome employees from overseas Group companies, giving them a chance to deepen theirunderstanding of Japanese culture, commercial practices and business manners. This program also
contributes to the globalization of Japanese Group companies and encourages smooth cooperation
with overseas Group companies.

Oversees Trainee Program
Destinations and Number of
Employees Dispatched in Fiscal Year 2016
United States

3
3
3
2
2
1
1
1
1

India
Malaysia
PRC
Germany
VietnamThailandAustria

Yuto FujisawatheD

I C G ro u

p

Fr o

VOICE

In charge of Global HR Planning, General Aﬀairs and HR Departmentm

United Kingdom

Diversity: What I learned in India$VDSDUWLFLSDQWLQWKH2YHUVHDV7UDLQHH3URJUDP,VSHQWD\HDUZRUNLQJDW',&,QGLD/WG$W¿UVW,ZDVWDNHQDEDFNE\WKHPDQ\GLIIHUHQFHVEHWZHHQ,QGLDDQG-DSDQLQFOXGLQJWKH
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UDWKHUKDYLQJWKHDELOLW\WRDFFHSWGLIIHUHQFHVDQG¿OOLQDQ\JDSV,WLVDOVRWKHDELOLW\WRWDONWRSHRSOHDQGEULQJWKHPDURXQGWR\RXUSRLQWRIYLHZRQLVVXHV\RXVLPSO\FDQQRWFRQFHGH,DOVROHDUQHGDQHZWKDWWKHROGDGDJH³QRPDQLVDQLVODQG´UHDOO\LVWUXH*LYHQWKHWRSGRZQDSSURDFKLQ,QGLDWKHKHOSRI\RXUVXSHULRULVHVVHQWLDOWRJHWWLQJWKLQJVGRQH7RGD\P\FROOHDJXHVDQG,DUHZRUNLQJDVDWHDPZLWKWKH
JRDORILGHQWLI\LQJHI¿FLHQWZD\VWRZRUN
,UHDOO\EHOLHYHLQWKHYDOXHRI',&¶V2YHUVHDV7UDLQHH3URJUDPDVDQLQLWLDWLYHWKDWZLOOH[SDQGWKHKRUL]RQVRI\RXQJHPSOR\HHVDQGFRQWULEXWHWRWKHIXUWKHUJOREDOL]DWLRQRIWKH',&*URXS/RRNLQJDKHDG,hope that many employees are able to take advantage of this challenging opportunity.
DIC Report 2017102

Human Resources Management

Promoting Diversity
The DIC Group actively pursues diversity by employing a broad spectrum of individuals without regard to considerations such as 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 creating workplaces that enhance job
satisfaction.
Number of Foreign Nationals
Employed by DIC
in Fiscal Year 2016

1 Hiring Diverse Human Resources
With the objective of securing talented individuals with advanced specialized capabilities, global
perspectives and language capabilities, DIC actively promotes the hiring of international students
completing undergraduate or graduate studies at Japanese universities; Japanese and foreign
nationals completing undergraduate or graduate studies at overseas universities; and experienced
PLGFDUHHUFDQGLGDWHVZLWKH[WHQVLYHH[SHULHQFHDQGH[SHUWLVH$WSUHVHQWIRUHLJQQDWLRQDOVZRUNLQYDULRXVFDSDFLWLHVDW',&)LVFDO\HDUQHZKLUHVLQFOXGHGIRUHLJQQDWLRQDOVNationalities ofForeign Employees

1

1

1

1
2

4

Breakdown by
Nationality

Number of Foreign Nationals Currently Employed by DIC
Sales
positionsTechnical
positions'HSDUWPHQW
divisionadministration

3RVWHG
overseas

Total

4

24

4

5

37

VOICE

Polymer Processing Technical Group 2, Polymer Processing Technical Division, Chiba Plant Jia YingtheD

I C G ro u

p

Fr o

m

7

20

PRC
ROK
Thailand
Malaysia
TaiwanIndonesia
Spain
Germany

10

When I began hunting for a job as I was getting ready to graduate, DIC held a recruitment event at my university. I was really impressed by the pleasant atmosphereand by the impression they gave of being emphatically open to hiring foreign nationals. So even though I am not Japanese, there was no uncomfortable pressure onPHEHFDXVHRIWKDWZKHQ,HQWHUHGWKHFRPSDQ\0\MRELVLQWKHDUHDRI336SURGXFWGHYHORSPHQWDQGWKHSURYLVLRQRIWHFKQLFDOVHUYLFHVWRFXVWRPHUV0\UHVSRQVLELOLWLHVFXUUHQWO\LQYROYHSHUIRUPLQJFRPSDULVRQVZLWKPDWHULDOVSURGXFHGE\FRPSHWLWRUVDQGLGHQWLI\LQJWKHFDXVHVRITXDOLW\SUREOHPV:KHQ,¿UVWMRLQHGWKHFRPSDQ\,FRXOGUHDGDQGFRPSUHKHQG
the content of various forms and documentation I dealt with, but my spoken Japanese was not so great, so many minute nuances went over my head and I found verbal communication a
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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. Since launching a full-scale
SURJUDPZLWKWKLVREMHFWLYHLQWKH&RPSDQ\KDVSXVKHGDKHDGZLWKPHDVXUHVWRWUDQVIRUPWKHPLQGVHWRIDOOHPSOR\HHVDQGLWVFRUSRUDWHFXOWXUHSURYLGHHGXFDWLRQGHVLJQHGWRHQFRXUDJHWKHGULYHDQGGHWHUPLQDWLRQRIIHPDOHHPSOR\HHVDQGEURDGHQWKHUDQJHRIMREVRSHQWRZRPHQ,Q¿VFDO\HDU',&HVWDEOLVKHGWKH& ³&
&XEHG´ $GYLVRU6\VWHPZKHUHE\IHPDOHHPSOR\HHVZLWKH[SHULHQFHLQKDQGOLQJWKHGHPDQGVRIFDUHHUDQGFKLOGFDUHDUHDSSRLQWHGWRDGYLVHWKHLUMXQLRUVZKRDUH
FXUUHQWO\WDNLQJFKLOGFDUHOHDYHRQZD\VWRPDLQWDLQDQHIIHFWLYHEDODQFHRQFHWKH\UHWXUQWRZRUN,Q¿VFDO\HDUWKH&RPSDQ\KHOGWKH:RPHQLQ',&)RUXPDQ
HYHQWGHYRWHGWRWKHLVVXHGRIFDUHHURSSRUWXQLWLHVIRUIHPDOHHPSOR\HHV$SSUR[LPDWHO\HPSOR\HHVWRRNSDUWLQWKHIRUXPHYHQO\GLYLGHGEHWZHHQZRPHQDQGPHQ
which featured presentations by female executives from a number of Group companies.
7KDQNVWRWKHVHDQGRWKHULQLWLDWLYHVWKHYROXQWDU\VHSDUDWLRQUDWHIRUIHPDOHHPSOR\HHVRIWKHSDUHQWFRPSDQ\GHFOLQHGWRORZHUWKDQLQ¿VFDO\HDUZKLOH
average years of employment for female employees exceeded that for male employees. The Company will continue working to broaden the range of jobs open to women,
LQFOXGLQJFRQGXFWLQJDZDUHQHVVVHPLQDUVIRUHPSOR\HHVTXDOL¿HGIRUH[HFXWLYHDQGPDQDJHULDOSRVLWLRQVDQGVWXG\LQJWKHLQWURGXFWLRQRIDWHOHZRUN V\VWHP7KURXJKVXFKHIIRUWVWKH&RPSDQ\DLPVWRERRVWWKHSHUFHQWDJHRIPDQDJHPHQWSRVLWLRQVRFFXSLHGE\IHPDOHHPSOR\HHVZLWKDWDUJHWRIE\¿VFDO\HDU DVRI'HFHPEHU
 ',&ZLOODOVRFRQWLQXHZRUNLQJWRH[SDQGLWVUHFUXLWPHQWRIQHZIHPDOHJUDGXDWHVIURPWHFKQLFDOVFKRROVDQGEDFKHORU¶VDQGPDVWHU¶VGHJUHHSURJUDPVERWKVRXUFHVRIWDOHQWHGKXPDQUHVRXUFHV',&KDVDOVRIRUPXODWHGDQDFWLRQSODQEDVHGRQ-DSDQ¶V$FWRQ3URPRWLRQRI:RPHQ¶V3DUWLFLSDWLRQDQG$GYDQFHPHQWLQWKH:RUNSODFH
³&´UHSUHVHQWVWKHWKUHH³&V´LQ³FKLOGFDUH´DQG³FDUHHU´
7HOHZRUNLVDZRUNDUUDQJHPHQWWKDWHQDEOHVHPSOR\HHVWRZRUNDWKRPHRUDQRWKHUUHPRWHORFDWLRQXVLQJLQIRUPDWLRQDQGWHOHFRPPXQLFDWLRQVWHFKQRORJLHVHOLPLQDWLQJWKHWLPHDQGORFDWLRQconstraints of traditional work arrangements.

DIC Report 2017103

Human Resources Management

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

2007
2015

● Seminars to promote awareness● Identical uniforms for male and female employees●Training for employees in administrative positions

Encourage the drive anddetermination of female employees● Seminars to promote awareness among female employees

Expand opportunities forfemale employees● Assignment of female employees to production and sales positions

Establish systems to supporta healthy work–life balance
for female employees andencourage the use thereof2016 and beyond● 0HVVDJHIURPWKH3UHVLGHQW

Further expand support
to measures and promoteawareness● Introduction of role models● 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● 3XEOLFDWLRQRIWKH/LEUDZRUN±OLIHEDODQFHVXSSRUWJXLGHDQGLQWURGXFWLRQRIHOHDUQLQJ

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 Forum● Awareness seminars for executives and managers● Introduction of telework system under study

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
culture$VRI'HFHPEHU
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

Create a Work Environment that
Helps Employees Balance Careerwith Childcare

TOPIC
Women in DIC Forum,QOLQHZLWKLWVFRPPLWPHQWWRDGYDQFLQJGLYHUVLW\RQ2FWREHU',&KHOGWKH:RPHQLQ',&)RUXP
which addressed the issue of career opportunities for female employees, at its corporate headquarters
LQ7RN\R:LWKWKHDVVLVWDQFHRIVLPXOWDQHRXVLQWHUSUHWHUVDSSUR[LPDWHO\IHPDOHDQGPDOHHPSOR\HHVZHUHDEOHWRSDUWLFLSDWHLQWKHHYHQWIURP',&*URXSVLWHVDFURVV-DSDQ7KHIRUXPEHJDQZLWKRSHQLQJUHPDUNVIURP',&¶VSUHVLGHQWDQG&(2,QWKHILUVWVHVVLRQIRXUIHPDOHH[HFXWLYHVIURPGroup companies gave presentations on their own working styles and those of women in general, whilein the second session three female employees in senior positions in the parent company joined the four
VSHDNHUVIURPWKH¿UVWVHVVLRQIRUDSDQHOGLVFXVVLRQRQSXUVXLQJDUHZDUGLQJFDUHHUDVDZD\WRHQULFK
OLIH3DUWLFLSDWLQJIHPDOHHPSOR\HHVUHDFWHGSRVLWLYHO\ZLWKPDQ\VD\LQJWKDWWKH\KDGEHHQLQVSLUHGE\WKH
four female executives. DIC will continue to promote initiatives like this with the aim of being a company
that empowers female employees.

DIC Report 2017

104

3.1％

)LVFDO\HDU WDUJHW

8.0％

Human Resources Management

3 Advancing the Employment of Individuals with Disabilities
DIC is committed to creating inclusive work environments that help individuals with disabilities
HQMR\DFWLYHDQGIXOILOOLQJFDUHHUV2QHLQLWLDWLYHZKLFKEHJDQLQILVFDO\HDULVDQ
internship program, organized in collaboration with a facility providing support for individuals
with intellectual disabilities, designed to transition into part-time employment. At the beginning
RI¿VFDO\HDUWKUHHSURJUDPSDUWLFLSDQWVZHUHRIIHUHGFOHULFDOSRVLWLRQV$VRI'HFHPEHULQGLYLGXDOVZLWKGLVDELOLWLHVDFFRXQWHGIRURI',&¶VWRWDOODERUIRUFHLQOLQHZLWK-DSDQ¶VOHJDOO\PDQGDWHGTXRWDRI*RLQJIRUZDUG',&ZLOO
continue striving to enhance work environments and increase workplace accessibility with the
DLPRIOLIWLQJWKLV¿JXUHWRE\¿VFDO\HDU

2.20%

2.30%

2.20%

（DIC）

2.22%

Percentage oflabor force accounted forby individuals with disabilities
as of March 31, 2016

2.14%
2.10%
2.06%

2.10%

2.04%

2.04%

(Legally mandated quota revised)

2.00%
Percentage oflabor force accounted
for by individuals
with disabilities

1.90%Japan’s legally mandated quota

1.80%

1.70%

11

12

13

14

15

16 (FY)

4 Reemployment after Retirement and Support for Retirement Planning
DIC has deployed a system that facilitates the reemployment until age
RILQGLYLGXDOVUHDFKLQJUHWLUHPHQWDJH  DQGZLVKLQJWRUHPDLQZLWKthe organization. With available options including full-time work, shorttime work and work sharing, this system enables reemployed individuals
to maximize their experience and make full use 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 or retirement thathelps them prepare for life after their careers. These classes provide
assistance with retirement planning, provide education regarding thenational pension system and offer retirement lifestyle simulations.

Number of Reemployed Individuals

1XPEHURIUHWLUHHV $Individuals seeking
reemployment
1XPEHURILQGLYLGXDOVreemployed B
Reemployment rate B  A

Fiscal year 2014

Fiscal year 2015

Fiscal year 2016

39
28
27
69.2％

126
104
97
77.0％

108
92
91
84.3％

Initiatives that Support a Healthy Work–Life Balance
DIC views work–life balance as essential to both self-realization and sustainable corporate growth. Accordingly, the Company encourages
HPSOR\HHVWRVHHNERWKDVDWLVI\LQJZRUNOLIHDQGDIXO¿OOLQJOLIHRXWVLGHZRUNFUHDWLQJDSRVLWLYHF\FOHWKDW\LHOGVYDOXHDGGHGUHVXOWV
1 Enhancing Programs that Help Employees Balance the Demands of Work and Home
,Q',&EOD]HGDWUDLOIRUFKHPLFDOVPDQXIDFWXUHUVLQ-DSDQE\LPSOHPHQWLQJDFKLOGFDUHOHDYHSURJUDP+DYLQJHVWDEOLVKHGZRUNDQGFKLOGFDUHEDODQFHVXSSRUWSURJUDPVWKDWH[FHHGOHJDOUHTXLUHPHQWVLQ
WKH&RPSDQ\FRQWLQXHVSURPRWLQJPHDVXUHVWKDWPDNHLWHDVLHUIRUHPSOR\HHVWRPDNHXVHWKHUHRI,Q¿VFDO\HDUWKH&RPSDQ\DFTXLUHGWKH.XUXPLQ0DUNZKLFKUHFRJQL]HVFRPSDQLHVWKDWSURPRWHLQLWLDWLYHV
designed to assist employees in raising children. DIC has also deployed a system that gives regular
HPSOR\HHVWKHRSWLRQWRDFFHSWRUUHIXVHWUDQVIHUVUHTXLULQJUHORFDWLRQ,QWKH&RPSDQ\HVWDEOLVKHG
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 Japan, the social ramifications of falling birth rates and lengthening life spans is an increase in thenumber of people requiring nursing care. Steps taken by the government to help address these issues includeUHYLVLQJWKH&KLOG&DUHDQG)DPLO\&DUH/DZLQWRPDNH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OHDYHSURJUDPVLQ¿VFDO\HDU',&SXEOLVKHGWKH&KLOGFDUHDQG1XUVLQJ&DUHKDQGERRN7KLVZDVIROORZHGXSZLWKDQHPSOR\HHDZDUHQHVVFDPSDLJQWKDWEHJDQLQ-XQH

DIC Report 2017105

Human Resources Management

Work and Childcare Balance Support Programs.XUXPLQ0DUN&HUWLÀFDWLRQ&KLOGFDUH/HDYH3URJUDP

7KHPD[LPXPOHQJWKRIOHDYHLVXQWLOWKHFKLOGUHDFKHVWKHDJHRI\HDUVand 6 months,
which is one year longer than the legally mandated leave period.

/HDYHWR$VVLVWZLWK3DUHQWLQJ3URJUDP

0DOHHPSOR\HHVFDQWDNH¿YHGD\V¶SDLGOHDYHGXULQJWKHHLJKWZHHNVIROORZLQJWKHLUFKLOG¶V
birth to assist with parenting.

Childcare While Working
3URJUDP

Employees can shorten their workday by up to three hours until the end of a child’s thirdyear 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 theirbonuses in advance to pay for, among others, fertility treatment or infant care facility fees.

Return to previous
RUHTXLYDOHQW SRVLWLRQ

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 make use of them, are posted on the Company’s website
and intranet.

1XUVLQJFDUHOHDYHV\VWHP(PSOR\HHVFDQWDNHVXFKOHDYHIRUXSWRRQH\HDUH[FHHGLQJWKHVWDWXWRU\PD[LPXPRIGD\V

1XUVLQJ&DUH:KLOH:RUNLQJ
3URJUDP

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 prescribedworking hours.

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.

,Q  ',& ZDV DFFRUGHG
t he Kur umin M ar k, w hic hrecognizes companies that
actively promote initiatives
that assist with child rearing,by Japan’s Ministry of Health,/DERXUDQG:HOIDUH

Number of Employees Using the Childcare Leave and Leave to Assist with Parenting Programs
Fiscal year 2014

Fiscal year 2015

Fiscal year 2016

1XPEHURIHPSOR\HHVXVLQJ
WKH&KLOGFDUH/HDYH3URJUDP

28

29

35

1XPEHURIHPSOR\HHVXVLQJ
WKH/HDYHWR$VVLVWZLWK3DUHQWLQJ
3URJUDP

63

64

62

Thanks to the introduction of various systems andthe creation of an environment that encourages
employees to make use thereof, the percentage of
DIC employees who return to work after taking leave
LVFXUUHQWO\,QDGGLWLRQDZDUHQHVVRIWKH
&RPSDQ\¶V/HDYHWR$VVLVWZLWK3DUHQWLQJ3URJUDPamong male employees has risen, underscored by
WKHIDFWWKDWPRUHWKDQRIHOLJLEOHHPSOR\HHV
WRRNDGYDQWDJHRIWKLVSURJUDPLQ¿VFDO\HDU

2 Reducing Extreme Overwork and Encouraging Employees to Take Annual Paid Leave

DIC has deployed an electronic system to manage on-site hours, working
Average Years of Employment
hours and approved overtime hours. As a measure to prevent extreme(Including Individuals Seconded to Group Companies)
overtime, if an employee exceeds the overtime limit agreed to with theemployees’ union, his or her supervisor is required to submit a report to
Average years of employment in fiscal year 2016
Male employees Female employees Overallmanagement confirming the work and reasons for the long hours while (Years)
years 18.5 years 18.2 years
17.8
DOVRSUHVHQWLQJVSHFL¿FPHDVXUHVWRDPHOLRUDWHWKHVLWXDWLRQ7KLVUHSRUW 25
is also shared with the DIC Employees’ Union. DIC encourages employees 20
to take annual paid leave, notably by recommending leave timing at each 15
10business site and having employees plan dates for such leave.
5
0

94

09

10

Male employees

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 201612.2 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 ％DIC Report 2017

106

11

12

Female employees

1314Overall15

16 (FY)

Human Resources Management

Caring for Mental Health
DIC takes steps to create environments in which employees can feel secure and works to ensure that its labor management
practices comply with legal requirements. The Company places a particularly high priority on caring for psychological andemotional well-being and has established a comprehensive mental health program, engaging an in-house occupational
psychologist, encouraging awareness as a way of warding off mental health problems and providing support to ensure
a smooth return to work for employees taking leave. Access to counseling from an occupational psychologist has had aparticularly positive impact in terms of ensuring employees get treatment and are able to return to work as soon as possible.
',&KDVDOVRRIIHUHGYROXQWDU\VWUHVVFKHFNVVLQFH¿VFDO\HDU/RRNLQJDKHDGWKH&RPSDQ\ZLOOFRQWLQXHWRSURPRWH
active, systematic efforts with the goal of preventing mental health disorders in accordance with related legislation passed in-DSDQLQ¿VFDO\HDU

Kokoro no Kenko ³3V\FKRORJLFDO+HDOWK´ VHOIFKHFNKDQGERRN

Mental Health Initiatives
*XLGDQFHIURPDQLQKRXVHRFFXSDWLRQDOSV\FKRORJLVW HQJDJHGDVDQRFFXSDWLRQDOSK\VLFLDQVLQFH¿VFDO\HDU
• Internal and external help desks
/LQHFDUHWUDLQLQJ IRUVXSHUYLVRUV• Mental health self-checks as a part of training for new employees• Distribution of Kokoro no Kenko ³3V\FKRORJLFDO+HDOWK´ VHOIFKHFNKDQGERRNWRDOOHPSOR\HHV• Flexible process to support employees returning to work after taking leave/LQHFDUHWUDLQLQJ7UDLQLQJIRUVXSHUYLVRUVWRKHOSWKHPUHFRJQL]HSURPSWO\ZKHQDQHPSOR\HHLVXQZHOODQGUHVSRQGDSSURSULDWHO\E\IRUH[DPSOHUHFRPPHQGLQJJXLGDQFHRUFRXQVHOLQJRU
making workplace improvements.

Caring for 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 noted
VXSHUIRRG WKDWLVPDQXIDFWXUHGE\D',&*URXSFRPSDQ\²DVDQLQJUHGLHQWLQFRRNLQJ
,Q¿VFDO\HDU',&¶V+HDOWKFDUH2I¿FHDQGWKH*URXSFRPSDQ\UHVSRQVLEOHIRUWKHRSHUDWLRQRIWKHHPSOR\HH
cafeterias collaborated to develop a new healthy cafeteria menu. The new menu, dubbed DIC Irodori Care +³',&&RORUIXO&DUH´ ZDVODXQFKHGLQ)HEUXDU\EHJLQQLQJZLWKWKHFDIHWHULDDWWKH&RPSDQ\¶VFRUSRUDWH
headquarters in Tokyo, with distinctive signage used to promote recognition and a clear explanation provided of the
EHQH¿WVRIPHQXVHOHFWLRQVLQFOXGLQJUHGXFHGFDORULHVDQGORZVRGLXPFRQWHQWSURYLGHGWRHQFRXUDJHXVH
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.

DIC Report 2017107Core and CategorySpecific Themes

Basic Themes

Themes that Demonstrate
Unique Capabilities

Sustainable Procurement
Ensuring Extended Supply Chain Functions in a Socially Responsible Manner
SDGs Goal 12

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 2016

Achievements in fiscal year 2016

• Continue to work with suppliers to reducerisks in key businesses associated with
CSR procurement.
• Promote the sharing of CSR procurement
assessment results and challenges for
suppliers used by both DIC and Sun
Chemical.

• As part of an effort to promote awareness of
CSR procurement among executives incharge of purchasing in Greater China, joint
CSR procurement audits were conducted
for six key manufacturers of pigmentintermediates and guidance was provided to
impart know-how regarding the practicalimplementation of such audits.
• DIC began sharing information on the CSR
procurement status of manufacturers of raw
mater ials purchased jointly with Sun
Chemical in the PRC.

• Continue to conduct CSR procurement
assessments for new suppliers andexisting suppliers for whom assessments
have not yet been completed.
• Promote CSR procurement assessments for
DIC Group company suppliers in Greater
China and the Asia–Pacific region.

• CSR procurement surveys were completed
for 116 suppliers, bringing the cumulative
number of suppliers for which such surveys
have been conducted to 682.
• Using efforts elsewhere as a reference,
key raw materials in core businesses in
the Asia–Pacific region were selected,
suppliers identified and CSR procurement
assessments began.

Promote CSR procurement.

Evaluation

★★

★★

★★★

★

Goals for fiscal year 2017
• For raw materials used in core businesses,
wor k with suppliers to minimize CSR
procurement–related risks.
• Based on CSR procurement questionnaire
responses, request corrective measuresfrom suppliers in Japan with low selfassessment scores. Conduct more detailed
CSR procurement assessments of suppliersin the PRC with the goal of uncovering issues
in the supply chain and implementingc or rective measures together. Shareinformation pertaining to common supplierswith the Sun Chemical Group.

• For companies overseen by DIC Asia Pacificand DIC (China), use version 2 of the DIC
Group Supply- chain CSR Deployment
Guidebook to advance awareness of CSR
procurement, prioritizing key raw materials incore businesses.

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 consideration

for work environments❶ 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 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 Challenging to the creation of a 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 2017108

❸ 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

Promoting 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 has formulated the DIC Group CSR Procurement Guidelines, a series of requirements
pertaining to ESG-related imperatives, including the management of chemical substances in and reduction of the environmental impact of raw materials, as well as
respect for human rights across its entire supply chain. With the aim of compelling suppliers to observe these guidelines, the Group conducts assessments and on-siteinquiries in accordance with the DIC Group Supply-chain CSR Deployment Guidebook. (Version 2 of the guidebook was published in July 2013.) These efforts have
proven effective in enabling the Group to reinforce relations with its suppliers.

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
consideration for human rights and the work environment.
* 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 (682 Suppliers)

Analyzing the Results of Questionnaires

400

358

350

Number of companies

From November 2013 through December 2016, the DIC Group conductedassessments for 682 suppliers using version 2 of the DIC Group Supply-chain
CSR Deployment Guidebook, accounting for 90%-plus of its procurement
spending. The Group analyzed and assessed questionnaire responses,
providing feedback to all 682 suppliers and requesting corrective measures
IRUVLJQL¿FDQWLVVXHVWKURXJKRQVLWHLQTXLULHVRUZULWWHQFRPPHQWV

300
250
200

141

150
100

77

50

Cumulative number ofsuppliers assessed(November 2013–December 2016)

0

1

45
23 37

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

Equivalent to 90%-plus ofprocurement spending

ScoresFeedback sheet

682

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 to Advance CSR)URP¿VFDO\HDUWKURXJK¿VFDO\HDUWKH',&*URXSFRQGXFWHGRQVLWHLQTXLULHVIRUVXSSOLHUV7KHREMHFWLYHRIWKHVHLQTXLULHVLVWRKHOS
suppliers further their understanding of CSR. In an on-site inquiry, the Group and the supplier confirm the responses provided by the supplier in theassessment questionnaire. Other efforts include introducing examples of Group initiatives designed to advance CSR procurement and realize sustainability.

Global Procurement Initiatives,Q¿VFDO\HDUSURFXUHPHQWGHSDUWPHQWVLQ-DSDQ*UHDWHU&KLQDDQGWKH$VLD±3DFL¿Fregion collaborated to conduct CSR procurement assessments for and provide feedback tomaterials suppliers in core businesses. DIC also conducted on-site inquiries for six suppliersin Greater China, working with these suppliers to fortify their understanding of issues related
to local environmental regulations, and of environmental issues in the supply chain related to
local legal and regulatory compliance, as well as to implement corrective actions.

On-site inquiry for supplier in Greater China

DIC Report 2017109

Sustainable Procurement

Green Procurement
With the aim of contributing to a sustainable society across its entire supply chain, the DIC Group formulated the DIC Group Green Procurement Guidelines,
which compels suppliers to ensure the stringent management of chemical substances. The Group is also working to develop and release products that haveless of a negative impact on the environment and to promote green procurement by manufacturers, as well as to lower the negative environmental impact ofmaterials it procures, and of the packaging, transport, production and engineering thereof, by trimming resources and energy used in, decreasing the weightand extending the useful life span of, and reducing CO2 emissions from such materials.

&RQÁLFW0LQHUDOVKevin KetheD

I C G ro u

p

Fr o

VOICE

Group Purchasing, DIC (Shanghai) Co., Ltd.

m

In compliance with the U.S. Dodd–Frank Wall Street Reform and Consumer Protection Act, which contains a provision requiring companies to report on their
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
abuse in the Democratic Republic of the Congo and its neighboring countries. The policy also states that should any raw materials purchased from thirdSDUW\VXSSOLHUVEHIRXQGWRFRQWDLQFRQÀLFWPLQHUDOVWKH',&*URXSZLOOLPPHGLDWHO\WHUPLQDWHWKHSURFXUHPHQWWKHUHRI7KH',&*URXSFRQWLQXHVWRXVH
WKH&RQÀLFW0LQHUDO5HSRUWLQJ7HPSODWHFUHDWHGE\WKH(OHFWURQLF,QGXVWU\&LWL]HQVKLS&RDOLWLRQ (,&& DQGWKH*OREDOH6XVWDLQDELOLW\,QLWLDWLYH *H6, WRFRQGXFWFRQÀLFWPLQHUDOVDXGLWVDFURVVLWVHQWLUHVXSSO\FKDLQ$VRI'HFHPEHUUHVSRQVHVKDGEHHQUHFHLYHGIRUPRUHWKDQRIWKHLWHPVFXUUHQWO\procured by Group purchasing departments.

DIC’s efforts to build win–win relationships with suppliers has enabled it to realize sustainable procurement.
0\MRELVLQWKHSXUFKDVLQJRIPDWHULDOVIRU',&*URXSFRPSDQLHVLQ*UHDWHU&KLQD,KDYHJDLQHGH[WHQVLYHNQRZKRZLQWKHDUHDRI
CSR through in-house training, among others, and have been actively involved in promoting CSR among suppliers. One of the biggest
challenges has been finding an easy-to-understand way to explain the need for CSR to suppliers, because it is not easy to fully grasp actual
initiatives based on responses to supplier self-evaluation questionnaires. In fiscal year 2016, we conducted on-sight inquires for six suppliers in Greater
China. While the standards for these inquiries centered on traditional concerns, namely, quality, cost and delivery, we explained to suppliers the needto give consideration to ESG in advance and secured their understanding. We also exchanged opinions with suppliers regarding CSR initiatives. When
we discovered particularly outstanding initiatives being implemented by suppliers, as well as when we felt suppliers’ understanding of CSR fell short, we
introduced DIC initiatives as case studies. This has allowed us to build win–win relationships with suppliers that I am confident will underpin sustainablegrowth for all concerned going forward.

DIC Report 2017110

Basic ThemesCore and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

Business Models that Respond to Social Imperatives
Cultivating Next-Generation Businesses
SDGs Goals 8, 9, and 11

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

Propose solutions- oriented
businesses that respond to social
imperatives.

Goals for fiscal year 2016

Achievements in fiscal year 2016

Evaluation

Goals for fiscal year 2017

With the aim of creating next-generation
businesses, enter new mar kets andpromote the development of products that
integrate multiple technologies to propose
solutions that capitalize on the Group’s
supply chain.

Efforts to enter new markets progressed
steadily. Examples include materials thatlower the weight of automotive components, helping to reduce vehicles’ CO 2
emissions and for high-per formance
packaging materials that help ensure foodsafety.

★★★

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. (Examples:
FINETECH JAPAN and Tokyo Pack)

Participated in major trade shows in Japanand overseas, including Tokyo Pack 2016
(Tokyo), Touch Taiwan 2016 and various
display-related events in the PRC. Group
companies in the PRC also staged private
exhibition for local and overseas automakers.

★★★

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.

Responding Accurately to the Changing Needs of Society
In light of the expansion and increasing severity of environmental issues and other key social imperatives, expectations that companies will help contributeto the resolution of related problems are growing, the DIC Group’s approach is to swiftly gain insights into concerns shared by its stakeholders 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 Groupalso takes a “market-in” approach, paying heed to the importance of anticipating social imperatives.

Promoting Businesses that Respond to Future 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 development of electric vehicles (EVs) is the need to address increasingly
crucial issues such as global warming and the depletion of fossil fuels. However, the practicality of EVs depends on resolving a number of key technologicalchallenges, notably increasing the capacity of storage batteries and developing new power semiconductors, battery charging devices. The DIC Group
conducts tireless research aimed at addressing such technological challenges, and is developing innovative materials and systems for storage batteries,
power semiconductors and sensors, among others, that will yield concrete, viable solutions, thereby contributing to sustainability. The Group will continue topromote business activities with roots in the needs of society with the aim of further evolving its business models.

Examples of Optimized Business Models that Respond to Social Imperatives
1 Linablue® Natural Blue Food Coloring: Contributing to Food Safety
The DIC Group’s health foods business centers on Spirulina, a cyanobacteria rich in vitamins
and minerals that contributes to a balanced diet. Spirulina also absorbs CO 2 as it grows,
thus helping to reduce CO2 in the air. The Group also produces and markets Linablue®, aSpirulina-derived natural blue food coloring that is the only natural food coloring that has
been approved as safe by regulatory authorities in the United States and Europe, as well asJapan. The Group will continue to actively promote the expansion of markets for Linablue ®
as a product that responds to a variety of social imperatives.

DIC Report 2017111

Business Models that Respond to Social Imperatives

2 PASLIM Oxygen-Barrier Adhesive: Keeping Food Fresh Longer
With the aim of realizing more functional packaging
materials that help reduce food loss and of contributing to
the conservation of packaging resources, DIC developed
PASLIM, an adhesive that prevents oxygen permeation.
The Company continues to promote the development of
packaging materials that improve the barrier propertiesof food packaging with the aim of extending product shelflife, thereby reducing food loss in distribution, retailing andconsumption, and conserving packaging resources.

Examples of Structures of Laminated Oxygen-Barrier Films
Structure of packaging film employing PASLIM

Structure of conventional laminated packaging film

Film (nylon, other)

Film (nylon, other)

Adhesive

PASLIM

Oxygen barrier film

Film (polypropylene, other)

Adhesive
Cast polypropylene

Superior
oxygen-barrier
properties
protect
food

Conventionallaminated film

Cross-section of a sliced ham package

3 Plastics Products: Safeguarding Lifestyles
In addition to manufacturing and selling a broad range of plastics products in linewith its ultimate objective of safeguarding lifestyles, DIC Group company DIC
Plastics, Inc., is an active proponent of environment-friendly business practices,
particularly material recycling*. Among the company’s noteworthy achievements
is its development of a system for sorting waste plastics, generated during the
manufacture of original products, by type and color, which has enabled the company
to diversify its lineup of products made with recycled plastics, increasing the volume
of such materials it uses and adding value to the products in which they are used.
0DWHULDOUHF\FOLQJLQYROYHVWKHUHF\FOLQJRIPDWHULDOIURPDQRULJLQDODSSOLFDWLRQEXWLQDGLIIHUHQWIRUP

Helmets made with recycled plastics

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\
areas—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
ZLOOHQWHU6XFKHIIRUWVKDYHGHPRQVWUDWHGFRQVLGHUDEOHGHPDQGIRUEXLOGLQJPDWHULDOVWKDWFRQWULEXWHWRPRUHHQHUJ\HI¿FLHQWFRPIRUWDEOHDQGKHDOWK\KRPHV0DWHULDOVWKDW
absorb and dissipate heat work to maintain a comfortable room temperature, reducing energy used for heating and cooling. One issue with conventional heat storage agentsis oozing and leakage when they change from solid to liquid form, making the incorporation of such agents into building materials a key challenge. DIC has succeeded inleveraging its proprietary technologies to develop a sheet-form heat storage material that can easily be laminated together with a variety of building materials. The new material
H[KLELWHGHIIHFWLYHQHVVLQDGHPRQVWUDWLRQSURMHFWLPSOHPHQWHGE\WKH1HZ(QHUJ\DQG,QGXVWULDO7HFKQRORJ\'HYHORSPHQW2UJDQL]DWLRQ 1('2 LQ¿VFDO\HDU',&LV
FXUUHQWO\LQWKHSURFHVVRIREWDLQLQJ-DSDQ,QGXVWULDO6WDQGDUGV -,6 FHUWL¿FDWLRQDPRQJRWKHUVZLWKDYLHZWRJDLQLQJZLGHPDUNHWDFFHSWDQFH
Sheet-form heat storage material
The secret to a stabletemperature is
microencapsulated
plant-derived heatcollection andstorage materials

Absorbs heat Releases heat CN sheetetStable atapprox.

Absorbs heat Releases heat

27℃

Microencapsulated PCM
SolidAbsorbs heat at 27ºCor higher

LiquidReleases heat at 27ºCor lower

Microcapsule: Minute sphere with a diameter of 1–100 μm

Sheet-form heat storage material

3KRWRFRXUWHV\RI206RODU,QF

DIC Report 2017112

Business Models that Respond to Social Imperatives

Global Efforts to Expand Business Domains and Cultivate Next-Generation Businesses
7KH',&*URXSFXUUHQWO\HQFRPSDVVHVFRPSDQLHVLQFRXQWULHVDQGWHUULWRULHV7KH*URXSFODVVL¿HVLWVRSHUDWLRQVLQWRIRXUUHJLRQDOJURXSLQJV-DSDQZKHUHFRUSRUDWH
KHDGTXDUWHUVLVORFDWHGWKH35&WKH$VLD±3DFL¿FUHJLRQDQGWKH$PHULFDVDQG(XURSH
Once it has resolved provisionally to enter a promising new market, the DIC Group sets about clarifying necessary technologies, systems and services, 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
its 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. The Group is
WDNLQJDFWLYHVWHSVWRUHLQIRUFHDQGH[SDQGLWVSUHVHQFHLQNH\$VLDQPDUNHWVZKLFKDUHH[SHFWHGWRVHHVLJQL¿FDQWJURZWKJRLQJIRUZDUGIRFXVLQJSDUWLFXODUO\RQFRUHEXVLQHVVHVZKLOHDWWKHVDPHWLPHEURDGHQLQJLWVUHDFKWRLQFOXGHHPHUJLQJHFRQRPLHVLQ(DVWHUQ(XURSH6RXWK$PHULFDDQGWKH0LGGOH(DVWZLWKWKHDLPRIGULYLQJIXUWKHUJURZWK,QIRUPDWLRQLVFXUUHQWDVRI'HFHPEHU

Enhancing Brand Strength
Established as a manufacturer of printing inks, DIC has expanded its focus,
capitalizing on its foundation in organic pigments and synthetic resins to develop adiverse portfolio of products that leverage its wealth of core technologies. Today,
the Group supplies products that respond to the needs of customers in a variety
of industries, including printing, automobile manufacturing and electronics. In line
ZLWKLWVQHZEUDQGLQJSURJUDPODXQFKHGLQ¿VFDO\HDUWKH*URXSVHHNVWR
enhance its brand strength through active participation in a trade shows in Japanand overseas that convey the value it provides and the role it plays—which in the
period under review included FINETECH JAPAN and Tokyo Pack—and throughcommunication with customers.
The DIC Group’s booth at FINETECH JAPANTOPIC

DIC Products and Know-How Are Helping Improve the Safety of Thailand’s Roads$FFRUGLQJWR:RUOG+HDOWK2UJDQL]DWLRQ :+2 VWDWLVWLFVSXEOLVKHGLQWKHWUDI¿FGHDWKUDWHLQ7KDLODQGZDVSHRSOHSHUVHFRQGKLJKHVWLQ
WKHZRUOGDQGHLJKWWLPHVWKHUDWHLQ-DSDQ,Q-DSDQRQHVWUDWHJ\HPSOR\HGWRLQFUHDVHWUDI¿FVDIHW\WKDWKDVFRQWULEXWHGWRDUHGXFWLRQRIDFFLGHQWVLVFRORUHG
pavement, which improves visibility for drivers. In Thailand, colored pavement has recently been used around airports and in tourist areas, but there havebeen complaints that not enough has been done to prevent road surfaces from becoming slippery in the rain. DIC Group company Siam Chemical Industry
ZRUNHGZLWKD-DSDQHVHRZQHGIRUPXODWRUWRFRQGXFWYHUL¿FDWLRQWHVWVIRUDKHDWEORFNLQJVOLSUHVLVWDQWURDGVXUIDFLQJPDWHULDOWKDWEDODQFHVWZRSHUIRUPDQFH
features that have proven successful in Japan, namely, slip-resistance and heat blocking, which is effective in countering the heat island effect and increasing
the durability of roads. The company has since begun introducing this material to the Thai authorities. Going forward, Siam Chemical Industry will continue to
FDSLWDOL]HRQWHFKQRORJLHVGHYHORSHGE\WKH',&*URXSLQ-DSDQWRKHOSUHGXFHWKHLQFLGHQFHRIWUDI¿FDFFLGHQWVLQ7KDLODQGDQGHOLPLQDWHXUEDQKHDWLVODQGV

Road coated with heat-blocking slip-resistant surfacing material

Surface of bridge under construction (Siam Chemical Industry )Composition of Road Surfacing Material
Top coat

Heat-Blocking
Mechanism
Binder*Base

BinderSunlight (UV light)

Special-purpose
pigments

Heat-blocking surface material

Asphalt surface* DIOVAR or EPICLON/LUCKAMIDE, manufactured by DIC

DIC Report 2017113

Basic ThemesCore and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

New Technology Development and Value Creation
Proposing Solutions that Leverage Elemental Technologies
SDGs Goals 9 and 12

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

Enhance ability to develop
products and technologies
that facilitate contribution to asustainable society.

Goals for fiscal year 2016

Achievements in fiscal year 2016

Evaluation

・Overseas printing ink and polymer technical・Promote collaboration among DIC

centers were on track. Collaboration among DIC
technical departments bolstered achievementsin the PRC and the Asia-Pacific region.
・A new group was established to promote open
innovation and active steps were taken toadvance cooperation with external organizations.

Group technical departments.
・Expand the DIC Group’s global R&D
configuration.
・Promote the integration of external
technologies.

Goals for fiscal year 2017

・Promote collaboration among DIC
Group technical departments.

★★

・Enhance global R&D configuration
・Encourage open innovation.
・Use IT to enhance the efficiency of R&D.

・Newly developed products included
Promote the development ofenvironment-friendly products
and services.

environment-friendly water-based flexo
inks and LED-UV inks and modified
cellulose nanofiber (CNF) epoxy resin.
・Environment-friendly products accounted for
56% of all DIC Group products.

Accelerate the development of
low-carbon and other environmentfriendly products.

★★

Accelerate efforts to develop low-carbon
and other products and reduce negative
impact on the environment.

Achieving Sustainable GrowthWith the aim of achieving its Color & Comfort by Chemistry management vision, the DIC Group is leveraging its basic technologies, including
those in the areas of optics and color, organic molecular design, polymer design and dispersion, as well as its core technologies in suchareas as synthesis, compounding and formulation, and surface treatment, to develop high-value-added products. The Group is also building
a portfolio of next-generation products and new technologies by integrating technological resources originating across the Group, as well asactively promoting open innovation, to drive sustainable growth.

The DIC Group’s Basic and 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 2017114

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
Organic molecular design

Inorganic nanotechnologies

Packaging

Polymer design
Dispersion

Open innovation

Applicability assessment

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

Heat-resistant and heat-dissipating materials

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 facilitate the reduction of energy consumption, the production of more compact of finishedSURGXFWVDQGWKHVKRUWHQLQJRISURFHVVHVDQGUHGXFWLRQRIZDVWHLQSURGXFWLRQSURFHVVHVIRU¿QLVKHGSURGXFWV,QSURGXFWVIRU/&'VWKH
*URXSH[SDQGHGVDOHVRIQHZJUHHQSLJPHQWVIRUZLGHJDPXWFRORU¿OWHUVDVZHOODVGHYHORSHGDQGEHJDQVDPSOHVKLSPHQWVRIDKLJKO\UHVSRQVLYHPRQRPHUWKDWVKRUWHQVSURGXFWLRQSURFHVVHVIRUSRO\PHUVXVWDLQHGDOLJQPHQW 36$ /&'V7KH*URXSDOVRFRPPHQFHGIXOOVFDOHSURGXFWLRQRI7)7/&VIRUXVHLQ/&'WHOHYLVLRQV1HZO\GHYHORSHGSURGXFWVLQWKHDUHDRISRO\PHUVIRUHOHFWURQLFVPDWHULDOVLQFOXGHGDUHVLQIRUUHVLVWVXVHGLQQDQRLPSULQWOLWKRJUDSK\ 1,/ DWHFKQRORJ\WKDWVKRZVSURPLVHDVDQH[WJHQHUDWLRQVHPLFRQGXFWRUIDEULFDWLRQ
process and a phenolic resin binder for sand casting 3D printers. In industrial adhesive tapes, the Group developed an adhesive dot tape that
virtually eliminates air bubbles when applied, which was adopted for use by smartphone manufacturers.

Products for Automotive Applications
In the area of materials for automotive electronic components, the DIC Group developed a new PPS compound that delivers excellent
strength and resistance to heat and moisture for which it is currently working to cultivate markets. The Group also developed and commenced
VDPSOHVKLSPHQWVRID336FRPSRXQGIRUODVHUGLUHFWVWUXFWXULQJ /'6 XVHGIRUIRUPLQJFLUFXLWVRQ'PROGHGFRPSRQHQWV7KH
RXWVWDQGLQJKHDWPRLVWXUHDQGFKHPLFDOUHVLVWDQFHRI336WRJHWKHUZLWKWKHGHVLJQÀH[LELOLW\RI/'6PDNHLWSRVVLEOHWRLQWHJUDWHPXOWLSOHFRPSRQHQWVDVZHOODVWRUHGXFHFRPSRQHQWVL]HDQGZHLJKW7KHVHEHQH¿WVKDYHHQFRXUDJHGXVHLQWKHPDQXIDFWXUHRIFRPSRQHQWVQRW
only of automobiles but also for medical devices.

DIC Report 2017115

New Technology Development and Value Creation

Products for Packaging Applications,QSULQWLQJLQNVIRUSDFNDJLQJDSSOLFDWLRQVWKH*URXSGHYHORSHGDQGZRUNHGWRH[SDQGVDOHVRIDZDWHUEDVHGÀH[RLQNWKDWUHDOL]HVDSULQW
quality comparable to that achieved with gravure printing, which it has positioned as a strategic product for the Asian markets, notably the
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energy required for drying. The Sun Chemical Group also focused efforts on the development of environment-friendly products, including asheetfed ink for in-mold labeling that does not contain cobalt and mineral oils and a heatset ink with an aromatic hydrocarbon content of lessthan 1.0%.
1HZO\GHYHORSHGDGKHVLYHVIRUÀH[LEOHSDFNDJLQJLQFOXGHGDKLJKO\GXUDEOHVROYHQWIUHHDGKHVLYHIRUXVHLQUH¿OOSDFNDJLQJIRUODXQGU\detergent, fabric softener and other products that resists damage caused by package contents. The Group also promoted efforts tocommercialize a vapor-deposited reinforcing adhesive that improves the barrier properties of aluminum vapor–deposited films. Among
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contents, one of which was for lids used in molded retortable food packaging that withstands thermal sterilization under high pressure
at temperatures up to 130º C, while another was for use in packaging for pharmaceuticals and cosmetics, both of which contain volatile
LQJUHGLHQWVDQGUHTXLUHVHDODQW¿OPVWKDWGHOLYHUERWKDVXSHULRUVHDODQGORZDGVRUSWLRQ$*OREDO5 '&RQÀJXUDWLRQWKDW8QGHUSLQV3URGXFW'HYHORSPHQW
The DIC Group’s global R&D bases work as one to promote R&D of new technologies and products. DIC’s Technical Administrative
Division and Corporate R&D Division cooperate with the R&D components of DIC Group companies around the world. These include DIC*UDSKLFV&RUSRUDWLRQWKH6XQ&KHPLFDO*URXS¶VUHVHDUFKFHQWHUVLQWKH8QLWHG6WDWHVWKH8QLWHG.LQJGRPDQG*HUPDQ\4LQJGDR',&
)LQHFKHPLFDOV&R/WGZKLFKFRQGXFWVFRPSUHKHQVLYH5 'WDLORUHGWRPDUNHWQHHGVLQWKH35&DQGSULQWLQJLQNVWHFKQLFDOFHQWHUV $VLD±
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Spirulina to conduct comprehensive algae-related research in areas ranging from cultivation to practical application.

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Global DIC Group
Technical
services
R&D aimed at
improvingexisting products
R&D aimed atdeveloping
new products

Research aimed atcommercializing
newly developed
products

Basic researchTechnical Administrative Division
Technical divisions
Fine Synthesis, Polymer, Adhesives,
Dispersion, Polymer Processing,Coating & Applied Materials

Sun Chemical GroupIntellectual
Property Center
Product Safety &Regulatory Group
Analysis Center

Product Innovation Center

Qingdao DIC Finechemicals
Printing inks technical centers‒
Asia‒Paciﬁc/China
Polymer Technical Center ‒Asia‒Paciﬁc/China
PPS technical service centers ‒China/Germany

Corporate R&D Division
Core development

Core Value Research Center
Investigative
research

DIC Graphics Corporation
Technology Planning
Department

Algae Research Center
Advanced Characterization
Research Center

Process Engineering
Research Center

Open Innovation
Promotion Groupetc.

Collaborative research, contracted research,
participation in public research programs, others

Universities and research organizations in Japan and overseas, national projects (Japan)

DIC Report 2017116

New Technology Development and Value Creation

Promoting Environment-Friendly Products
The DIC Group is committed to effective stewardship of the products it provides. (For related information, please see page 57.) Conscious always of the importance of ensuring its
products are environment-friendly, DIC promotes the development of products and new technologies that are useful to society and works to increase the weighting of environmentfriendly products in its portfolio, by reducing the volume of hazardous substances it uses, focusing on products that are less hazardous and products that facilitate recycling, and realizing
safer production processes that generate less waste and use less energy. The Group has established internal rules for designating products “environment-friendly” and works to increase
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Evaluation Sheet for Environment-Friendly Products
year 2016, environment-friendly products accounted for 56% of all products put out by
Department:
Prepared by:
Prepared on:
DIC and subsidiary DIC Graphics. The Group also strives to maintain a solid grasp of
Product to be Evaluated:
Evaluation
Description
Certifying Standards
laws and regulations in different countries and territories, and of trends in environmental
Item
EnergyReduction of energy inmeasures—thereby ensuring its ability to design products that comply with diverse
Consumption
production, transportation, etc.
regulations governing the use of chemical substances in different markets—and
Reduction of use of nonMaterials to
renewable materials, nonbe Used
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
DIC iintroducedt dd itits systemtffor ddesignatingiti environment-friendlyit f i dl products
d t ini 2003 andd uses a
proprietary evaluation sheet to designate products as “environment-friendly.”customers worldwide.
Average off

Coefficient

Subtotal

Environment-Friendly Web Offset Ink
Although its Web World SYNERGY web offset inks, which are used widely in the printing
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inks, DIC Graphics continues working to increase the amount of vegetable oil used toenhance the environmental performance of products in this series.
DIC Graphics is also striving to further advance the use of recycled raw materials inthese inks, as well as to expand its product ranges in which petroleum-based solvents
have been replaced with vegetable oil–derived ingredients. In February 2016, the Grouplaunched Web World SYNERGY ECORE, a new series of low temperature–drying web
RIIVHWLQNVWKDWKHOSUHGXFH&22 emissions attributable to use by customers.

Web World SYNERGY ECORE low temperature–drying web offset inks

Innovation through Compounding
Building on its fundamental pigment and resin dispersion and formulating technologies, realized through the production of printing inks, DIC
has succeeded in combining materials with different properties and performance characteristics to develop groundbreaking products andcreate new value.
Recent achievements include the PASLIM
ser ies of adhesives wit h ox ygen - bar r ier
Hardproperties, which represent the “compounding”
Adhesives withcoats
barrier properties
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minimize food deterioration by preventing oxygen
Dispersed
Functional
composite
Compounding
permeation while at the same time facilitating
Inkjetpigmentsinks
the production of films that are thinner andlighter than conventional alternatives. DIC also
Functional
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compounds
PPS
Resin
compounds
hard coatings, realized through the compoundingof organic and inorganic polymer technologies, for
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to harness its distinctive compounding capabilities
to further transform its diverse technologies into
competitive advantages with the aim of driving
innovation.

DIC Report 2017117

New Technology Development and Value Creation

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 makeuse of “black boxing.”
,Q¿VFDO\HDU',&ZDVIRXUWKLQDUDQNLQJRIFRPSDQLHVLQWKHFKHPLFDOVLQGXVWU\LQ-DSDQLQWHUPVRISDWHQWDVVHWVRZQHGLQDUHYLHZFRQGXFWHGE\DQLQGHSHQGHQW¿UP ',&UHJLVWHUVDQDYHUDJHRIQHZSDWHQWVDQQXDOO\:KLOHWKLVLVVPDOOFRPSDUHGWROHDGLQJFKHPLFDOV¿UPVWKH&RPSDQ\VFRUHGKLJKIRULWVRYHUDOOVFDOHRILWVSDWHQWDVVHWVXQGHUVFRULQJWKHTXDOLW\DQGKLJKSUR¿OHRIWKHSDWHQWVLWKROGV',&
will continue to actively protect its intellectual property portfolio with the aim of ensuring sustainable growth in the years ahead.

Takeshi IbetheD

I C G ro u

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Fr o

VOICE

Assistant Manager, Polymer Technical Group 5, Polymer Technical Division 1m

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We are addressing the challenge of developing next-generation technologies from the perspective of chemistry.
With the trend toward every-higher levels of miniaturization, the resulting sharp increase in fabrication processes and costs has become a key issue forsemiconductor manufacturers. DIC’s Corporate R&D Division recently developed a resin that is appropriate for resists used in nanoimprint lithography
1,/ DWHFKQRORJ\WKDWVKRZVSURPLVHDVDQH[WJHQHUDWLRQVHPLFRQGXFWRUIDEULFDWLRQSURFHVV:LWK1,/FRQWURORIWKHXQLTXHRUJDQLF±LQRUJDQLFK\EULGFRPSRXQG
VWUXFWXUHXVHGIDFLOLWDWHVUDSLGFXULQJDQGVXSHUEHWFKLQJUHVLVWDQFHVLJQL¿FDQWU\VWUHDPOLQLQJIDEULFDWLRQ:HZLOOFRQWLQXHWROHYHUDJHWKHZHDOWKRIWHFKQRORJLHVZHKDYHDPDVVHGDVDPDQXIDFWXUHURI¿QHFKHPLFDOVWRDGGUHVVQH[WJHQHUDWLRQFKDOOHQJHVDQGSURPRWHVXVWDLQDEOHGHYHORSPHQWDIC Report 2017118

Basic ThemesCore and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

Harmony with the Community and Social Contributions
Adding Color & Comfort to Lifestyles
SDGs Goals 3 and 4

Basic Approach to Social Contribution
Based on its Guidelines for Social Contribution Activities, established in fiscal year 2009, the DIC Group works to ensure harmony withlocal 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 and Comfort by Chemistry management vision, the DIC Group will promote social contribution initiatives
in three 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 Universal Color 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, theGroup, 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, the published the Guidebook for the Color Universal Design–Recommended Color Set. In developing
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various types of color vision to adjust proposed colors, a process that facilitated the creation of a 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 devices. At AIC 2015 TOKYO, the midterm meeting of the International Colour
Association (ACI) in May 2015, Chiba University, the Central Research Laboratories and DIC Color Design, Inc.,
gave a presentation on issues to consider in printing warnings and other important information on packaging andthe results of joint research on the color appearance of red spot colors.
After AIC 2015 TOKYO, the DIC Group and Chiba University’s team continued to conduct joint research on the
XVHRIFRORULQDQDJLQJVRFLHW\7KHXQLYHUVLW\JDYHDSUHVHQWDWLRQRQLWV¿QGLQJVDWDPHHWLQJRIWKH&RORU6FLHQFHAssociation of Japan in June 2017. As people age, their ability to see colors deteriorates. Accordingly, for elderly
people the visibility and legibility of colors in everyday life is as crucial as their aesthetic beauty. It is thus important
to ensure that, for example, the printing on road signs is visible at night and that the instructions on pharmaceuticaland food packaging is readable if the power goes out because of a disaster, and that signage and brochures areclear in museums, which may use low lighting to prevent damage to works of art. Accordingly, the DIC Group andChiba University conducted a study of the impact of age and illumination level on the legibility printed materials.
Because age reduces the ability to tell the difference between blue and black as a consequence of cataracts andother issues, researchers asked younger and older study participants to evaluate printed samples produced using
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legible to the young and the elderly and identify color schemes that work under various illumination levels.
Looking ahead, the DIC Group will continue to promote research initiatives that contribute to society and add
color to lifestyles.
DIC Report 2017

119

Guidebook for the Color Universal
Design–Recommended Color Set

Booth for evaluatingcolors and printed
samples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 among children, DIC and DIC Graphics conduct visiting science labs at public elementary schools. Through thisprogram, which focuses on, among others, experiments in pigment synthesis and offset printing, the Group seeks to spark children’sinterest in science and encourage them to realize the close relationship between science and their everyday lives.
The DIC Group’s visiting science lab program was nominated and won gold in the 2016 Education Support Grand Prix, sponsoredby Tokyo-based Leave a Nest Co., Ltd. The Education Support Grand Prix is the only awards program in Japan that evaluates andrecognizes the educational initiatives of companies committed to helping children thrive from both a business and an educational
perspective. One of 12 finalists from among 100 companies promoting next-generation initiatives, the DIC Group was selected througha stringent judging process by a jury consisting of leading educators. In explaining their decision, jury members cited measures andsystems in place to ensure that the program, the goal of which is purely to contribute to society, continue regardless of operating
results, as well as the use of know-how and technologies particular to the DIC Group and benefits for schools, which include the factthat students earn credits as factors behind their decision.

Visiting science lab

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Comment

A model for educational support efforts for B–to–B companies
DIC’s visiting science lab program won gold in our 2016 Education Support Grand Prix. DIC’s initiative stood out among nominated programs from morethan 100 other companies because rather than being an effort centered on advertising potential or boosting sales, it is an initiative that genuinely seeks tocontribute to society. This approach earned high marks. Also worthy of praise is the fact that the program instructors who visit schools in the vicinity of DIC
sites are trained researchers who do so as part of their regular work duties. Participation in the program is actually factored into employees’ performance
reviews. DIC’s view of the program as a crucial initiative and active steps to position it as such serves as a model for educational support efforts by B-to-B
companies. I look forward to DIC continuing to promote efforts that both support education for the next generation and foster the skills of its own employees.

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 November 2016, students from nearby Chiba Prefectural
Sakura High School were invited to take part in a fashion design
workshop that focused on the use of color and included a presentation
color universal design. In December 2016, students from Seishin Gakuen
High School in Ibaraki Prefecture—a Super Science High School*—were
invited to the Central Research Laboratories to participate in a lab lessonon the theme of “synthesis and craftsmanship.” Led by researchers fromthe facility, the event was conducted in an actual laboratory and featured
experiments and a hands-on lesson on the use of state-of-the-art
analytical equipment with young researchers serving as lab instructors.
In addition to experiments and lessons on the use of equipment, theevent also incorporated a career education component, taking time totalk to students about how they became interested in science and thechallenges and rewards of being a researcher.
* A designation awarded by Japan’s Ministry of Education, Culture, Sports, Science and Technology (MEXT) to senior high schools that implement curricula focused
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Lab lesson for students of Seishin Gakuen High School

Representative of the jury,
Education Support Grand Prix
General Manager, Leave a Nest
Education Research Institute

Daigo FujitaHarmony with the Community and Social Contributions

Kawamura Memorial DIC Museum of Art
The Kawamura Memorial DIC Museum of Art, located adjacent to the Central Research Laboratories in Sakura, Chiba Prefecture, wasestablished in 1990 to publicly exhibit works of art collected by DIC Corporation and its affiliates. In 2017, the museum celebrates its
28th anniversary. As of December 2016, cumulative visitors to the museum had surpassed 2.3 million.
The museum’s extensive collection spans numerous genres, encompassing works by Rembrandt; Impressionists such as Monet andRenoir; modern European artists such as Picasso and Chagall; early modern, modern and postwar Japanese artists; and luminaries
of late-20th century American art, including Mark Rothko, Cy Twombly and Frank Stella. In addition to its standing exhibit from its
permanent collection of more than 1,000 major works, the museum stages special exhibitions several times a year that focus on
pertinent literary works and other artifacts that evoke the cultural atmosphere at the time works were created to help visitors better
understand the collection. The museum also offers free-of-charge guided tours every day at 2:00 p.m.
Another appealing aspect of the Kawamura Memorial DIC Museum of Art is its location on a lushly forested 10-hectare site alivewith seasonal flowers and foliage that has been open to the public since the museum’s establishment. The site’s 250 cherry trees—10
varieties in total—blossom every spring. In summer, flowers of all colors bloom profusely. Other highlights include the lotus pond at theback of the garden, which was expanded in 2015, and the wooded nature trail that traverses the spacious site.
In a move aimed at promoting relations with the local community and fostering local cultural activities, the museum has establishedan annex gallery on the museum site that serves as an exhibition space for local amateur artists and is also made available toelementary and junior and senior high schools in the Sakura area for an exhibition of local students’ works.
The Kawamura Memorial DIC Museum of Art was also the first museum in Japan to introduce interactive methods originated by theMuseum of Modern Art in New York for teaching children about art. To date, a total of 140 schools and more than 10,000 children havetaken part in the museum’s educational programs, which are offered to entire classes led by teachers.

Kawamura Memorial DIC Museum of Art

Entrance hall

Verdant garden with terrace

Siam Chemical Industry Earns Fifth Consecutive CSR-DIW Award
In 2016, DIC Group company Siam Chemical Industry was once again presented with a CSR-DIW Award by the Thai Ministry ofIndustry, the fifth consecutive year it has been so honored. The CSR-DIW Award program was established in 2008 with the goal ofraising the global competitiveness of Thai companies. Awards are given annually to companies in recognition of CSR initiatives judged
as exceptional from the perspective of seven core subjects defined in ISO 26000, the International Organization for Standardization’s
standard for social responsibility.
Siam Chemical Industry’s CSR initiatives in 2016 included a volunteer clean-up initiative at a support facility for individuals withdisabilities located near the company’s factory. The approximately 300 employees who took part spent a whole day cleaning thefacility, repainting external walls and playground equipment such as swings and seesaws, and improving the facility’s garden bypulling weeds and spreading artificial turf. Siam Chemical Industry pledges to continue contributing to Thai society through effective
sustainability initiatives designed to benefit local communities.

Volunteer clean-up initiative

Employees of Siam Chemical Industry

DIC Report 2017121

Harmony with the Community and Social Contributions

Matching Gift Program
DIC has a matching gift program whereby it matches the total amount collected throughan annual year-end fundraising drive spearheaded by its employees’ union. Funds raised
through the 2016 drive and matching gift program were donated to 20 children’s homes andfacilities providing support for disabled individuals.
DIC employees visit child welfare facility Anzu no Ie in
Hakusan, Ishikawa Prefecture, to present a donation

Support for Disaster-Hit Areas
DIC donated funds via the Japanese Red Cross Society to assist with recovery efforts in thewake of the April 2016 Kumamoto Earthquake.

DIC Report 2017122

Basic ThemesCore and CategorySpecific Themes

Themes that Demonstrate
Unique Capabilities

Communication with Stakeholders
Promoting Disclosure and Communication

Basic Approach to Promoting Disclosure and Communication
The DIC Group places a priority on communication with its stakeholders worldwide, as outlined in Article 7 of its Policy on
Corporate Governance.

Article 7 (Ensuring Appropriate Information Disclosure and Transparency)
The Company shall ensure transparency and fairness; and in order to gain the correct understanding and 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 communicates with its stakeholders through direct dialogue in the form of, among others, television
advertisements, participation in exhibitions, websites and events. By communicating effectively with stakeholders, the Group strives to
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also expanding its awareness of the concept of stakeholder engagement, a key requirement under ISO 26000.

Ties with customers

Basic approach

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

● Websites● Product pamphlets● Corporate profile

Communications tools

Opportunities forcommunication

DVDs● DIC Report● Corporate PR film
● Television advertisements● Sales activities● Participation in

exhibitions

Ties with shareholders
and investors

Ties with society

Ties with employees

Ties with the media

Ensure appropriate disclosureand build trusting relationships
with shareholders andinvestors, encouraging both toevaluate DIC as an attractive
investment.

Operate in harmony with thecommunity and build positive
relationships with local
residents that will underpin
the long-term sustainabilityof operations.

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● Site reports● &RUSRUDWHSUR¿OH'9'V● DIC Report● Television advertisements● DIC Plaza● Press conferences● Interviews with journalists● DIC Report● Television advertisements● Production facility tours● Participation in projects involving● Labor–management councils● Results presentations● Websites● Press conferences● Quarterly results

announcements●Yuka Shoken Hokokusho(¿QDQFLDOGLVFORVXUHGRFXPHQWUHTXLUHG
of listed companies in Japan)● Shareholder newsletters● &RUSRUDWHSUR¿OH'9'V● DIC Report● Corporate PR film
● Television advertisements● General shareholders’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 2017123

(in-house newsletter)● Intranet● DIC Pocket Book LQKRXVH*URXSGDWD¿OH ● DIC Report● Corporate PR film

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
NH\EXVLQHVVGRPDLQVLQ¿VFDO\HDUWKH',&*URXSWRRNSDUWLQQXPHURXVWUDGHVKRZVLQ-DSDQDQGRYHUVHDV6XFKHYHQWVSURYLGHG
valuable opportunities for the Group to communicate with its customers.
In Japan, the DIC Group participated in the Tokyo Health Industry Show 2016, held in March 2016, exhibiting Spirulina, which continues
to attract attention as a superfood. In April, the Group took part in FINETECH JAPAN, where it exhibited TFT LCs, highly thermoconductive
insulating adhesive sheets and other products that leverage state-of-the-art technologies. At Tokyo Pack 2016, the Group communicatedwith customers by exhibiting distinctive product lines that illustrate its three corporate values—“Making it Colorful,” “Innovation throughCompounding” and “Specialty Solutions”—at a booth designed around the concept of providing innovative solutions to evolving needs.
Overseas, the Group participated in trade shows at multiple locations around the world, in such various industries as packaging, rubber,plastics, automobile manufacturing and electronics. These included CHINAPLAS 2016, Paint India 2016, Touch Taiwan 2016, interpack 2016
and the European Coatings Show 2017.
The DIC Group also held private shows introducing Group initiatives and proposing solutions. DIC Graphics held DICG365, a private show
in the Kansai region (Osaka), to which it welcomed customers, trading company representatives and brand owners, among others. ThisIROORZHGDVXFFHVVIXOSULYDWHVKRZDW',&¶VFRUSRUDWHKHDGTXDUWHUVLQ7RN\RLQ¿VFDO\HDU
On another front, the Central Research Laboratories, a key R&D base located in Sakura, Chiba Prefecture, continued to welcome visitors
to its showroom, which features displays illustrating the key role DIC Group products play in everyday life, an approach designed to deepen
public understanding of the DIC Group and its operations. In response to requests from sales departments and customers, the DIC GroupKROGVVWXG\VHVVLRQVRQLWVVXVWDLQDELOLW\LQLWLDWLYHVDVDSSURSULDWH,Q¿VFDO\HDUFXVWRPHUVRI',&VDOHVGHSDUWPHQWVSDLGDYLVLWWR
corporate headquarters, during which time was set aside for a discussion on sustainability issues, enabling DIC to introduce its supply chain,environmental and human rights initiatives, as well as to exchange information with visitors.
On another front, efforts were expanded to provide detailed product information via Group websites. Additionally, the Group responded tocustomer queries regarding its CSR procurement practices in such areas as environmental safety, social issues and human rights.
As part of its current branding program, the DIC Group introduced new business cards designed in accordance with its Color & Comfort
brand slogan. Based on themes drawn from nature and colors chosen from the DIC Color Guide® Traditional Colors of Japan, Traditional
Colors of France and Traditional Colors of China series, the cards seek to enhance communication with stakeholders by using color toencourage conversation.

DIC Graphics’ Kansai-region private show (DICG365)

DIC Report 2017124

Touch Taiwan 2016

Communication with Stakeholders

Ties with Shareholders and Investors
The DIC Group has established a policy for promoting constructive dialogue withshareholders and strives to ensure fair, appropriate and timely disclosure and tocommunicate closely with shareholders and investors, as well as to raise awareness of
its ESG initiatives. Views and concerns expressed are shared with management andincorporated into operations as appropriate.
In fiscal year 2016, the DIC Group sought to enhance communication with theinvestment community in Japan by holding two results presentations for institutional
investors and securities analysts, as well as by participating in investor relations(IR) conferences and IR meetings of various types. The Group also held smallgroup meetings with the aim of deepening understanding of the DIC108 mediumterm management plan. Overseas, the Group held IR meetings and participated in
IR conferences organized by securities companies in North America, Europe andAsia to encourage familiarity with its business strategies. Active efforts to advancecommunication with overseas investors also included 176 one-on-one in-person andtelephone meetings.
7KH*URXSDOVRVRXJKWWRSURYLGHLQIRUPDWLRQWRLQGLYLGXDOLQYHVWRUVLQ¿VFDO\HDU
2016 by taking part in an IR fair, where it gave a presentation to an audience ofapproximately 2,000 guests and set up a booth that enabled employees to promote
understanding of its operations and ESG initiatives by speaking directly with investors.
The Group also provided information tailored to the needs of individual investors via the
DIC global website, as well as through conventional mass media, to enhance familiarity
with its operations.

Results presentation (February 2016)

IR fair (December 2016)

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.
In July 2016, the Group created a display introducing DIC at the Itabashi Public Library, in Tokyo, the second consecutive year it has done
so. The display focused on the Group’s efforts to develop environment-friendly products, one of its core sustainability initiatives, as well as on
its social contribution efforts, including the Kawamura Memorial DIC Museum of Art.
DIC’s calendar for 2017 was honored with a silver award in the corporate calendars category of the 68th All Japan Calendar Competition,sponsored by the Japan Federation of Printing Industries and Japan Printing News Co., Ltd. An annual event, the All Japan Calendar
Competition recognizes the best calendars produced by general companies, publishers and printing companies, among others, in terms ofprinting technology, planning, design, functionality and creativity. DIC will continue working to plan, design and produce innovative original
calendars that appeal to stakeholders.
At the Kawamura Memorial DIC Museum of Art’s, a concert was held with the aim of introducing the unique vision of Cy Twombly, one of themost acclaimed names in 20th-century American art, through music. The concert, which was attended by 90 people, was held in the Twombly
Room, a permanent room for the Twombly works in the museum’s collection.
,Q¿VFDO\HDUWKH*URXSDOVRODXQFKHGDQDPELWLRXVEUDQGLQJSURJUDPWKDWLQFOXGHGDLULQJDQHZEUDQGDGYHUWLVHPHQWIRUWHOHYLVLRQ
Kyo wa Nani Iro? (What Color is Today?). At the same time, the DIC global website was updated to include a dedicated page that introduces
EUDQGLQJLQLWLDWLYHVDQGIHDWXUHVDQHZFRUSRUDWH35¿OP

DIC’s display at the Itabashi Public Library (Takashimadaira, Tokyo)$ZDUGFHUWL¿FDWHIURPWKH$OO-DSDQCalendar Competition(2016)

DIC Report 2017125Communication with Stakeholders

Communications in the Field of Education
In August 2016, the Central Research Laboratories sponsored a boothat the 6th Chiba Science School Festival, held at the Chiba Institute ofTechnology. With the aim of supporting the scientific research efforts ofhigh school students, as well as encouraging elementary and junior highschool students to take a greater interest in science, the Central ResearchLaboratories organized its booth around the theme “Hands-On Learning:
Color Universal Design and the Extraction of Color,” offering students the
chance to conduct experiments in the area of RGB, the primary colors oflight and differences in how people see color, as well as in the extractionof the natural blue colorant in Spirulina.
DIC Graphics’ Nagoya Branch held a color seminar for students at
6th Chiba Science School Festival
Nagoya University of the Arts titled “A Basic Understanding of Color
Expression.” The seminar covered a variety of topics, including the rudiments of color reproduction, methods of expressing color using
conventional printing and digital devices, issues in the area of color communication and the use of traditional colors, as well as introduced
color-related initiatives being undertaken by the DIC Group.

Ties with Employees
The DIC Group promotes a variety of initiatives to facilitate active communication with its employees around the world. From March throughApril 2016, the Group conducted an employee awareness survey in Japan, the PRC and the Asia–Pacific region. The Group’s in-housenewsletter, DIC PlazaZKLFKLVSXEOLVKHGLQ-DSDQHVHDQG(QJOLVKZDVUHYDPSHGLQ¿VFDO\HDUWREHWWHUUHÀHFWWKHYRLFHVRILQGLYLGXDOGroup employees with the goal of enhancing in-house communications. As well as introducing colleagues and Group operations from aroundthe world, the revamped DIC Plaza presents comments from a wide range of stakeholders. In addition, a new feature titled “The Front Line of
Sustainability” was added with the aim of promoting employee awareness of the Group’s sustainability initiatives.
The DIC 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In November 2016, the Komaki Plant organized a facility tour for employees’ families. Planned as part of DIC’s ongoing branding program,
WKHHYHQWZDVKHOGDVD¿UVWSUDFWLFDOVWHSWRZDUGDFKLHYLQJWKHSODQW¶VJRDOZKLFKLVWRFUHDWHDSURGXFWLRQVLWHZRUWK\RIVKRZFDVLQJWR
the world, by enabling employees to show their families the plant where they work. Forty-two family members participated in the tour, which
LQFOXGHGOXQFKDWWKHHPSOR\HHFDIHWHULDDQGDYLVLWWRWKHSURGXFWLRQÀRRU
DIC’s new corporate headquarters building in Tokyo, which was completed in May 2015, boasts an advanced global-standard flexible
communications infrastructure. This has created an open, multipurpose space that accommodates a variety of working styles and reinforces
relationships among employees.

Results presentation for employees (February 2016)

DIC Plaza in-house newsletter

DIC Report 2017

126

Facility tour for the families of employees (Komaki Plant)Communication with Stakeholders

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 include its customers and shareholders, investors and local communities. ThisUHÀHFWVDFRQYLFWLRQWKDWHIIHFWLYHLQGHSHQGHQWSXEOLFLW\DQGDGYHUWLVLQJWKDWIDFLOLWDWHV
objective media coverage is vital to securing stakeholders’ understanding of the DIC*URXSDQGLWVRSHUDWLRQV,Q¿VFDO\HDU',&SURYLGHGWKHPHGLDZLWKLQIRUPDWLRQon a variety of key subjects, including new products, operating results, sustainability
initiatives and personnel systems. Increased media coverage brought positive responses
from stakeholders across the board.

External Assessments
In fiscal year 2016, DIC was selected for inclusion in the Dow Jones Sustainability,QGLFHV$VLD3DFL¿F,QGH[DOHDGLQJEHQFKPDUNIRUVXVWDLQDELOLW\LQLWLDWLYHVLQWKH$VLD±
3DFL¿FUHJLRQDQGSDUWRIWKH'RZ-RQHV6XVWDLQDELOLW\,QGLFHV '-6, DJOREDOIDPLO\of indices for socially responsible investment (SRI). This is the second consecutive year
DIC has been selected for inclusion.
DIC also reports to the CDP (formerly the Carbon Disclosure Project), which works
on behalf of institutional investors to motivate companies to disclose information on
LQLWLDWLYHVWRFRPEDWFOLPDWHFKDQJHDQGNH\HQYLURQPHQWDOGDWD,Q¿VFDO\HDUWKH
Company received high marks for its efforts to reduce its greenhouse gas emissions andits disclosure, earning an overall score of A-, second only to the top score of A.
Also in the period under review, ProNed Inc., which advises companies on ensuring
effective corporate governance, ranked DIC’s corporate governance program as Score 1,
the top mark that it awards.
With the aim of driving sustainable growth, the DIC Group also participates in a numberof the UNGC’s SRI/ESG, Supply Chain, Human Rights Due Diligence and Disaster Risk
Reduction working groups.

DIC Report 2017

127

Press conferences held
LQÀVFDO\HDU

Interviews withjournalists
LQÀVFDO\HDU

68

108

DIC Report 2017 and ISO 26000: A Comparison
Core Subjects

No.

ThemesOrganizational
Governance

6.2

Organizational governance

Human Rights

6.3.3
6.3.4
6.3.5
6.3.6
6.3.7
6.3.8
6.3.9
6.3.101. Due diligence
2. Human rights risk situations
3. Avoidance of complicity
4. Resolving grievances
5. Discrimination and vulnerable groups
6. Civil and political rights
7. Economic, social and cultural rights
8. Fundamental principles and rights at work

LabourPractices

6.4.3
6.4.4
6.4.5
6.4.6
6.4.7

1. Employment and employment relationship2. Conditions of work and social protection
3. Social dialogue
4. Health and safety at work
5. Human development and training in the workplace

6.5.3
6.5.4
6.5.5
6.5.6

1. Prevention of pollution
2. Sustainable resource use
3. Climate change mitigation and adaptation
4. Protection of the environment,
biodiversity and restoration of natural
habitats

The
Environment

Fair Operating
Practices

6.6.3
6.6.4
6.6.5
6.6.6
6.6.7

6.7.3

ConsumerIssuesCommunity
Involvement
andDevelopment

1. Anti-corruption
2. Responsible political involvement
3. Fair competition
4. Promoting social responsibility in thevalue chain
5. Respect for property rights

6.7.7
6.7.8
6.7.9

1. Fair marketing, factual and unbiased
information and fair contractual practices
2. Protecting consumers’ health and safety
3. Sustainable consumption
4. Consumer service, support, andcomplaint and dispute resolution
5. Consumer data protection and privacy
6. Access to essential services
7. Education and awareness

6.8.3
6.8.4
6.8.5
6.8.6
6.8.7
6.8.8
6.8.9

1. Community involvement
2. Education and culture
3. Employment creation and skills
4. Technology development and access
5. Wealth and income creation
6. Health
7. Social investment

6.7.4
6.7.5
6.7.6

Relevant Page
5– 7
11
37–38
39– 43
44– 4647–48
49– 54
37–38
99
103–105
111–113
114–118
123–127
37–38
44–46
47
99
103–105106
108–110
119–120
123–127
37–38
62– 68

Relevant Sections/Initiatives
A Message from the President
Overview of Materiality Analysis'LUHFWRUV&RUSRUDWH$XGLWRUVDQG([HFXWLYH2I¿FHUVCorporate Governance
Sustainability ReportCompliance
Risk Management'LUHFWRUV&RUSRUDWH$XGLWRUVDQG([HFXWLYH2I¿FHUV
Human Resources Management
Promoting Diversity
Business Models that Respond to Social Imperatives
New Technology Development and Value Creation
Communication with Stakeholders'LUHFWRUV&RUSRUDWH$XGLWRUVDQG([HFXWLYH2I¿FHUV
Sustainability Report
The DIC Group Code of Business Conduct
Human Resources Management
Promoting Diversity
Reducing Extreme Overwork and Encouraging Employees to Take Annual Paid Leave
Sustainable Procurement
Harmony with the Community and Social Contributions
Communication with Stakeholders'LUHFWRUV&RUSRUDWH$XGLWRUVDQG([HFXWLYH2I¿FHUV
Occupational Safety and Health, Security and Disaster Prevention

84

Reducing Energy Consumption and Enhancing Product Quality through Kaizen Skill Improvement Training97
99–102
103–106
107–109
24–27
57– 62
69–71
73–75
76–79
80–92
93–94
114–118121
123–127
45
47–48
62
84
93–94
99
106
108–110
119
24–27
55–56
57–60
61
76–78
96–98
114–118
119
125
3–4
45
47
57
62–65
84
96–98
99–100105
107–109
114–118
119–122

Quality
Human Resources Management
Promoting Diversity
Sustainable Procurement+HOSLQJWR5HGXFH9HKLFOH:HLJKW,PSURYH)XHO(I¿FLHQF\DQG/RZHU&2(PLVVLRQV
Promoting Responsible Care/ESH Audits/Occupational Safety and Health
Reducing Discharges of Chemical Substances
Reducing Industrial Waste
Managing Chemical Substances in Products
Preventing Global Warming
Responsible Logistics
New Technology Development and Value Creation
Kawamura Memorial DIC Museum of Art
Communication with Stakeholders
Ensuring DIC Remains a Globally Trusted Corporate Citizen with a Proud Reputation
The DIC Group Code of Business Conduct/ComplianceOccupational Safety and Health, Security and Disaster Prevention
Improving Yields by Expanding Use of System to Enhance the Visibility of Energy Consumption
Responsible Logistics
Human Resources Management/Respect for Human Rights
Avoiding Extreme Overwork and Encouraging Employees to Take Annual Paid Leave
Sustainable Procurement
Harmony with the Community and Social Contributions+HOSLQJWR5HGXFH9HKLFOH:HLJKW,PSURYH)XHO(I¿FLHQF\DQG/RZHU&2 2 Emissions
Information Security
Promoting Responsible Care/Focus on Product Stewardship
ESH Audits
Managing Chemical Substances in Products
Quality
New Technology Development and Value Creation
Harmony with the Community and Social Contributions
Ties with Society
The DIC Group: A Global Powerhouse
Ensuring DIC Remains a Globally Trusted Corporate Citizen with a Proud Reputation
The DIC Group Code of Business Conduct
Focus on Product Stewardship
Occupational Safety and Health, Security and Disaster Prevention
Reducing Energy Consumption and Enhancing Product Quality through Kaizen Skill Improvement Training
Quality
Human Resources Management
Reemployment after Retirement and Support for Retirement Planning
Sustainable Procurement
New Technology Development and Value Creation
Harmony with the Community and Social Contributions

DIC Report 2017128

DIC Report 2017 and G4 Sustainability Reporting Guidelines: A Comparison
7KLVUHSRUWZDVSUHSDUHGXVLQJWKH*5,¶V*6XVWDLQDELOLW\5HSRUWLQJ*XLGHOLQHV¶³,QDFFRUGDQFH²&RUH´RSWLRQ
Sub-Category

DMA/
Indicator

Disclosure

G4 - 1

Statement from the most senior decision-makerG4 - 2

Description of key impacts, risks and opportunities

G4 - 3Name of the organization

Page(s)General Standard Disclosures

Strategy and Analysis

G4 - 5G4 - 6
G4 - 7

Location of the organization’s headquarters
Number of countries where the organization operates
Nature of ownership and legal form

G4 - 8Markets served

G4 - 9

Scale of the organization

G4 - 10

Breakdown of employees

G4 - 11Percentage of employees covered by collective bargaining agreements

G4 - 12G4 - 13
G4 - 14

Organization’s supply chain
Significant changes that occurred during the reporting period

5–7 (A Message from the President)
8 (Steady Progress in Strategic Investments), 11 (Overview of Materiality Analysis),
13–14 (Printing Inks), 15–16 (Fine Chemicals), 17–18 (Polymers), 19–20 (Compounds),
21–22 (Application Materials), 23–26 (Special Feature), 44–46 (Sustainability Report),
50–51 (Risk Management)
3 (The DIC Group: A Global Powerhouse)
12 (The DIC Group’s Business Portfolio), 13–14 (Printing Inks), 15–16 (Fine
Chemicals), 17–18 (Polymers), 19–20 (Compounds), 21–22 (Application Materials),
114–118 (New Technology Development and Value Creation)
3 (The DIC Group: A Global Powerhouse)
3–4 (The DIC Group: A Global Powerhouse), 144 (Corporate Data)
3 (The DIC Group: A Global Powerhouse)
3–4 (The DIC Group: A Global Powerhouse), 12 (The DIC Group’s Business Portfolio),
13–14 (Printing Inks), 15–16 (Fine Chemicals), 17–18 (Polymers), 19–20 (Compounds),
21–22 (Application Materials), 114–118 (New Technology Development and Value
Creation)
3–4 (The DIC Group: A Global Powerhouse), 12 (The DIC Group’s Business Portfolio),
13–14 (Printing Inks), 15–16 (Fine Chemicals), 17–18 (Polymers), 19–20 (Compounds),
21–22 (Application Materials), 144 (Corporate Data), 6–9 of the Yuka Shoken
Hokokusho ³$I¿OLDWHG&RPSDQLHV´
100 (Global Human Resources Management), 10 of the Yuka Shoken Hokokusho ³(PSOR\HHV´
Japan: 100% of employees belong to a labor union
Overseas: Coverage by collective bargaining agreements in each country/
region complies with local laws and regulations
108–110 (Sustainable Procurement)
NA

Whether/how the precautionary approach or principle is addressed by the organization

49–54 (Risk Management), 57–60 (Promoting Responsible Care)

G4 - 15

Initiatives which the organization endorses

45–46 (Ensuring DIC Remains a Globally Trusted Corporate Citizen with a Proud
Reputation), 57 (Promoting Responsible Care), 92 (Reporting to the CDP)

G4 - 16

G4 - 18
G4 - 19
G4 - 20

Memberships of associations and national or international advocacy organizations in which theorganization participates
List of entities included in the organization’s consolidated financial statements orequivalent documents
Process for drafting the report content and the aspect boundaries
Material aspects identified in the process for defining report content
Aspect boundary (within the organization) for each material aspect

G4 - 21

Aspect boundary (outside the organization) for each material aspect

G4 - 22
G4 - 23
G4 - 24
G4 - 25
G4 - 26
G4 - 27
G4 - 28
G4 - 29
G4 - 30
G4 - 31

Reasons for any restatements of information provided in previous reports
6LJQL¿FDQWFKDQJHVLQVFRSHDQGDVSHFWERXQGDULHV
List of stakeholder groups engaged by the organization
Basis for identification and selection of stakeholders with whom to engage

44 (Sustainability Report)
11 (Overview of Materiality Analysis)
The DIC Group has identified 22 priority materiality issues. The boundary for all 22 is³ZLWKLQWKHRUJDQL]DWLRQ´ ',&*URXS PDWHULDOLW\LVVXHVWKHDVSHFWERXQGDU\RIZKLFKLV³RXWVLGHWKHRUJDQL]DWLRQ´DUH
• Reducing impact on the environment• Promoting occupational safety and health• Respect for human rights• Promoting supply chain management (some suppliers are included and initiatives
are reported on)
NANA
123 (Communication with Stakeholders)
123 (Communication with Stakeholders)

Organization’s approach to stakeholder engagement

123–127 (Communication with Stakeholders)

Key topics and concerns that have been raised through stakeholder engagement
Reporting period
Date of most recent report
Reporting cycle
Contact point for questions regarding the report or its contents

G4 - 32³,QDFFRUGDQFH´RSWLRQWKHRUJDQL]DWLRQKDVFKRVHQ

G4 - 33

Organization’s policy and current practice with regard to seeking external assurance for the report

G4 - 34

Governance structure of the organization

123–127 (Communication with Stakeholders)
2 (About this Report)
2 (About this Report)
2 (About this Report)
Back cover
2 (About this Report), 57 (Promoting Responsible Care), 134 (Third-Party
9HUL¿FDWLRQ
2 (About this Report), 57–60 (Promoting Responsible Care), 134 (Third-Party
9HUL¿FDWLRQ
37–38 (Directors, Corporate Auditors and Executive Officers), 39–43(Corporate Governance), 45 (System for Promoting Sustainability Initiatives)

G4 - 35

G4 - 37

Process for delegating authority for the economic, environmental and social topics
from the highest governance body to employees
Whether the organization has appointed an executive-level position or positions withresponsibility for economic, environmental and social topics
The organization’s process for consultation between stakeholders and the highest governancebody on economic, environmental and social topics

G4 - 38

Composition of the highest governance body± 'LUHFWRUV&RUSRUDWH$XGLWRUVDQG([HFXWLYH2I¿FHUV ± &RUSRUDWH
Governance), 34–37 of the Yuka Shoken Hokokusho ³&RUSRUDWH*RYHUQDQFH´

G4 - 39

Whether the Chair of the highest governance body is also an executive officer

37–38 (Directors, Corporate Auditors and Executive Officers), 39–43(Corporate Governance), 34–37 of the Yuka Shoken Hokokusho (“Corporate*RYHUQDQFH´

G4 - 42UJDQL]DWLRQDO3URÀOH

G4 - 17,GHQWLÀHG0DWHULDO
Aspects and Boundaries

Stakeholder Engagement

5HSRUW3URÀOH

G4 - 36
Governance

DIC Report 2017

129

UNGC, JCIA, Keidanren, Keizai Doyukai, Japan Printing Ink Makers Association
3 (The DIC Group: A Global Powerhouse), 144 (Corporate Data)

45 (System for Promoting Sustainability Initiatives)
45 (System for Promoting Sustainability Initiatives)
45 (System for Promoting Sustainability Initiatives)

GovernanceNomination and selection processes for the highest governance bodyG4 - 41

Report processes for the highest governance body to ensure conflicts of interest are avoided and managed

G4 - 42

Report the highest governance body’s and senior executives’ roles in the development, approval, andupdating of the organization’s purpose, value or mission statements, strategies, policies, and goals related
to economic, environmental and social impacts

45 (System for Promoting Sustainability)

G4 - 45

The highest governance body’s role in the identification process

11 (Overview of Materiality Analysis), 44–46 (Sustainability Report), 49–51(Risk Management)

G4 - 46

The highest governance body’s role in reviewing the effectiveness of the organization’s risk management
processes for economic, environmental and social topics
The frequency of the highest governance body’s review of economic, environmental and social impacts,
risks, and opportunities
The highest committee or position that formally reviews and approves the organization’s sustainability report
Report the process for communicating critical concerns to the highest governance party
Remuneration policies for the highest governance body and senior executives/How performance criteria
in remuneration policies relates to the highest governance body’s and senior executives’ economic,
environmental and social objectives

G4 - 47
G4 - 48
G4 - 49
G4 - 51

Ethics and Integrity

39–43 (Corporate Governance), Global corporate website (Corporate
Governance), Yuka Shoken Hokokusho ³0DMRU6KDUHKROGHUV´
39–43 (Corporate Governance), Yuka Shoken Hokokusho (“Major
6KDUHKROGHUV´

G4 - 4045 (System for Promoting Sustainability Initiatives), 49–51 (Risk Management)
49–51 (Risk Management)
45 (System for Promoting Sustainability Initiatives)
45 (System for Promoting Sustainability Initiatives)
43 (Remuneration for Executives), 34–37 of the Yuka Shoken Hokokusho³&RUSRUDWH*RYHUQDQFH´

G4 - 52

Process for determining remuneration

43 (Remuneration for Executives), 100 (Integrating DIC Group Executive
Evaluation Systems), 101 (Ensuring Fair and Consistent Treatment)

G4 - 56

The organization’s values, principles, standards and norms of behavior such as codes of conduct andcodes of ethics

1 (The DIC WAY), 47 (The DIC Group Code of Business Conduct)

G4 - 57

Internal and external mechanisms for seeking advice on ethical and lawful behavior, and matters related toorganizational integrity

48 (Establishing and Operating a Whistle-Blowing System)

G4 - 58

Internal and external mechanisms for reporting concerns about unethical or unlawful behavior, and mattersrelated to organizational integrity

48 (Establishing and Operating a Whistle-Blowing System)

DMA

DMA

11 (Overview of Materiality Analysis)

DMA

DMA

G4 - EC1
G4 - EC3

Direct economic value generated and distributed&RYHUDJHRIWKHRUJDQL]DWLRQ¶VGH¿QHGEHQH¿WSODQREOLJDWLRQV
Ratios of standard entry level wage by gender compared to local minimum wage at
VLJQL¿FDQWORFDWLRQVRIRSHUDWLRQSpecific Standard Disclosures

Economic
Economic PerformanceMarket Presence

G4 - EC5
G4 - EC7

Development and impact of infrastructure investments and services supported

G4 - EC86LJQL¿FDQWLQGLUHFWHFRQRPLFLPSDFWVLQFOXGLQJWKHH[WHQWRILPSDFWV

DMA

DMA

G4 - EN3

Energy consumption within the organization

G4 - EN5
G4 - EN6

Energy intensity
Reduction of energy consumption

G4 - EN8

Total water withdrawal by source

Indirect Economic Impacts

11 (Overview of Materiality Analysis), 7 (Growth Scenario and Positioning of
DIC108), 5–7 (A Message from the President)
3–4 (The DIC Group: A Global Powerhouse)
73 of the Yuka Shoken Hokokusho
10 of the Yuka Shoken Hokokusho
119 (Harmony with the Community and Social Contributions), Global corporate website (Homepage > Sustainability > Harmony with the Community and Social Contributions)
119 (Harmony with the Community and Social Contributions), Global corporate website (Homepage > Sustainability > Harmony with the Community and Social Contributions)

Environment

EnergyWater

11 (Overview of Materiality Analysis), 57–60 (Promoting Responsible Care), 61 (ESH
Audits), 69 (Reducing Discharge of Chemical Substances), 73 (Reducing Industrial Waste),76 (Managing Chemical Substances in Products), 80–81 (Preventing Global Warming)
75 (Environmental Impact of the DIC Group’s Operating Activities), 80–92 (Preventing
Global Warming)
80–92 (Preventing Global Warming)
80–92 (Preventing Global Warming)
70–71 (Managing Water Resources), 75 (Environmental Impact of the DIC Group’s
Operating Activities)
80–92 (Preventing Global Warming)
84 (Improving Yields by Expanding Use of System to Enhance the Visibility of Energy
Consumption), 94 (Reducing Greenhouse Gas Emissions Attributable to Logistics)
80–92 (Preventing Global Warming)
80–92 (Preventing Global Warming)
69–72 (Reducing Discharge of Chemical Substances)
70–71 (Managing Water Resources), 75 (Environmental Impact of the DIC Group’s
Operating Activities)
73–75 (Reducing Industrial Waste)NA

G4 - EN15

Direct greenhouse gas emissions

G4 - EN17

Other direct greenhouse gas emissions

G4 - EN18
G4 - EN19
G4 - EN21

Greenhouse gas emissions intensity
Reduction of greenhouse gas emissions
12[62[DQGRWKHUVLJQL¿FDQWDLUHPLVVLRQV

G4 - EN22

Total water discharge by quality and destination

G4 - EN23
G4 - EN24
G4 - EN25

Total weight of waste by type and disposal method
7RWDOQXPEHUDQGYROXPHRIVLJQL¿FDQWVSLOOV
Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of theBasel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally

Products and Services

G4 - EN27

Extent of impact mitigation of environmental impacts of products and services

24–27 (Helping to Reduce Vehicle Weight, Improve Fuel Efficiency and Lower CO2
Emissions), 114–118 (New Technology Development and Value Creation)

ComplianceG4 - EN29

0RQHWDU\YDOXHRIVLJQL¿FDQW¿QHVDQGWRWDOQXPEHURIQRQPRQHWDU\VDQFWLRQVIRUQRQFRPSOLDQFHZLWK
environmental laws and regulations

61 (ESH Audits)

Transport

G4 - EN30

Significant environmental impacts of transporting products and other goods and materials for theorganization’s operations, and transporting members of the workforce

Overall

G4 - EN31

Total environmental protection expenditures and investments by type

Supplier Environmental
Assessment
Environmental Grievance
Mechanisms

G4 - EN32
G4 - EN33

Percentage of new suppliers that were screened using environmental criteria
6LJQL¿FDQWDFWXDODQGSRWHQWLDOQHJDWLYHHQYLURQPHQWDOLPSDFWVLQWKHVXSSO\FKDLQDQGDFWLRQVWDNHQ
Number of grievances about environmental impacts filed, addressed, and resolved through formal
grievance mechanisms

Emissions(IÁXHQWVDQG:DVWH

G4 - EN34

DIC Report 2017

130

NA

62 (Occupational Safety and Health and Disaster Prevention), 84 (Improving Yields byExpanding Use of System to Enhance the Visibility of Energy Consumption), 93–94(Responsible Logistics)
Global corporate website (Home page> Sustainability > Environment, Safety and
Health (ESH)> Environmental Accounting
108–110 (Sustainable Procurement)
108–110 (Sustainable Procurement)
NALabor Practices and Decent Work
Employment

G4 - LA1
G4 - LA3

Labor/Management Relations

G4 - LA4

Total number and rates of new employee hires and employee turnover by age group, gender and region
Return to work and retention rates after parental leave, by gender
0LQLPXPQRWLFHSHULRGVUHJDUGLQJRSHUDWLRQDOFKDQJHVLQFOXGLQJZKHWKHUWKHVHDUHVSHFL¿HGLQFROOHFWLYH
agreements

DMA

DMA

G4 - LA6
G4 - LA8Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number ofwork-related fatalities, by region and gender
Health and safety topics covered in formal agreements with trade unions

G4 - LA10

Programs for skills management and lifelong learning that support the continued employability of employees
and assist them in managing career endings

G4 - LA11DMA
G4 - LA14
G4 - LA15

Percentage of employees receiving regular performance and career development reviews, by gender and by employee
category
DMA
Composition of governance bodies and breakdown of employees per employee category according to gender, age group,
minority group membership, and other indicators of diversity
DMA
Percentage of new suppliers that were screened using labor practices criteria
6LJQL¿FDQWDFWXDODQGSRWHQWLDOQHJDWLYHLPSDFWVIRUODERUSUDFWLFHVLQWKHVXSSO\FKDLQDQGDFWLRQVWDNHQ

G4 - LA16

Number of grievances about labor practices filed, addressed, and resolved through formal grievance mechanisms

Investment

G4 - HR2

Non-Discrimination
Freedom of Association andCollective Bargaining

G4 - HR3

Occupational Health and Safety

Training and Education

DMA
Diversity and Equal Opportunity
Supplier Assessment for Labor
Practices
Labor Practices Grievance
Mechanisms
Human Rights

G4 - LA12$PLQLPXPQRWLFHSHULRGLVSURYLGHGDVVSHFL¿HGLQODERUDJUHHPHQWV
11 (Overview of Materiality Analysis), 58 (Framework for Promoting Responsible Care), 62(Occupational Safety and Health, Security and Disaster Prevention)

Child Labor

G4 - HR5

Total hours of employee training on human rights policies or procedures concerning aspects of humanrights that are relevant to operations, including the percentage of employees trained.
Total number of incidents of discrimination and corrective actions taken
Operations and suppliers identified in which the right to exercise freedom of association and collective
bargaining may be violated or at significant risk, and measures taken to support these rights
2SHUDWLRQVDQGVXSSOLHUVLGHQWL¿HGDVKDYLQJVLJQL¿FDQWULVNIRULQFLGHQWVRIFKLOGODERUDQG
measures taken to contribute to the effective abolition of child labor

Forced or Compulsory Labor

G4 - HR6

2SHUDWLRQVDQGVXSSOLHULGHQWL¿HGDVKDYLQJVLJQL¿FDQWULVNIRULQFLGHQWVRIIRUFHGRUFRPSXOVRU\labor, and measures to contribute to the elimination of all forms of forced or compulsory labor

Security Practices

G4 - HR7

Indigenous Rights

G4 - HR8

Assessment

G4 - HR9

Supplier Human Rights
Assessment

DMA
G4 - HR10
G4 - HR11

Percentage of security personnel trained in the organization’s human rights policies or procedures that are
relevant to operations
Total number of incidents of violations involving rights of indigenous peoples and actions taken
Total number and percentage of operations that have been subject to human rights reviews or impact
assessments
DMA
Percentage of new suppliers that were screened using human rights criteria
6LJQL¿FDQWDFWXDODQGSRWHQWLDOQHJDWLYHKXPDQULJKWVLPSDFWVLQWKHVXSSO\FKDLQDQGDFWLRQVWDNHQ

G4 - HR4

100 (Basic Personnel Statistics (DIC)), 103 (Hiring Diverse Human Resources)
105 (Enhancing Programs that Help Employees Balance the Demands of Work and Home)

65 (Occupational Safety and Health, Security and Disaster Prevention)
106 (Reducing Extreme Overwork and Encouraging Employees to Take Annual Paid Leave)
62–65 (Occupational Safety and Health, Security and Disaster Prevention), 84(Reducing Energy Consumption and Enhancing Product Quality through Kaizen Skill
Improvement Training), 97 (Quality), 99–100 (Human Resources Management), 105(Reemployment after Retirement and Support for Retirement Planning)
101 (Ensuring Fair and Consistent Treatment)
11 (Overview of Materiality Analysis), 99 (Human Resources Management)
37–38 (Directors, Corporate Auditors and Executive Officers), 100 (Global Human
Resources Management), 103–105 (Promoting Diversity)
11 (Overview of Materiality Analysis), 108 (Sustainable Procurement)
108–110 (Sustainable Procurement)
108–110 (Sustainable Procurement)NA

99 (Human Resources Management)NA
99 (Respect for Human Rights), 108–110 (Sustainable Procurement)
45 (Ensuring DIC Remains a Globally Trusted Corporate Citizen with a Proud Reputation),
47 (The DIC Group Code of Business Conduct), 108–110 (Sustainable Procurement)
45 (Ensuring DIC Remains a Globally Trusted Corporate Citizen with a Proud
Reputation, 47 (The DIC Group Code of Business Conduct), 98 (Respect for Human
Rights), 106 (Reducing Extreme Overwork and Encouraging Employees to Take Annual
Paid Leave), 108–110 (Sustainable Procurement)
99 (Human Resources Management)NA
99 (Human Resources Management)
11 (Overview of Materiality Analysis), 108 (Sustainable Procurement)
108–110 (Sustainable Procurement)
108–110 (Sustainable Procurement)

Society
Local Communities

G4 - SO1

Anti-Corruption

G4 - SO4
G4 - SO5

Anti-Competitive Behavior

G4 - SO7

G4 - SO3

Compliance
Supplier Assessment for Impacts
on Society
Grievance Mechanism for Impacts
on Society
Product Responsibility

G4 - SO8
G4 - SO9
G4 - SO10
G4 - SO11
DMA

Customer Health and Safety

G4 - PR1
G4 - PR2
G4 - PR3

Product and Service LabelingMarketing Communications

G4 - PR4
G4 - PR5DMA
G4 - PR6
G4 - PR7

Customer Privacy

G4 - PR8

ComplianceG4 - PR9

Percentage of operation with implemented local community engagement, impact assessments,
and development programs
Total number and percentage of operations assessed for risks related to corruption and the
VLJQL¿FDQWULVNVLGHQWL¿HG
Communication and training on anti-corruption policies and procedures&RQ¿UPHGLQFLGHQWVRIFRUUXSWLRQDQGDFWLRQVWDNHQ
Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices
and their outcomes
Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with laws and regulations
Percentage of new suppliers that were screened using criteria for impacts on society
6LJQL¿FDQWDFWXDODQGSRWHQWLDOQHJDWLYHLPSDFWVRQVRFLHW\LQWKHVXSSO\FKDLQDQGDFWLRQVtaken
1XPEHURIJULHYDQFHVDERXWLPSDFWVRQVRFLHW\¿OHGDGGUHVVHGDQGUHVROYHGWKRXJKIRUPDO
grievance mechanisms
DMA
3HUFHQWDJHRIVLJQL¿FDQWSURGXFWDQGVHUYLFHFDWHJRULHVIRUZKLFKKHDOWKDQGVDIHW\LPSDFWV
are assessed for improvement
Total number of incidents of non-compliance with regulations and voluntary codes concerning thehealth and safety impacts of products and services during their life cycle, by type of outcomesType of product and service information required by the organization’s procedures for productand service information and labeling, and percentage of significant product and service
categories subject to such information requirements
Total number of incidents of non-compliance with regulations and voluntary codes concerning
product and service information and labeling, by type of outcomes
Results of surveys measuring customer satisfaction
DMA
Sale of banned or disputed products
Total number of incidents of non-compliance with regulations and voluntary codes concerningmarketing communications, including advertising, promotion and sponsorship, by type ofoutcomes
Total number of substantiated complaints regarding breaches of customer privacy andlosses of customer data
0RQHWDU\YDOXHRIVLJQL¿FDQW¿QHVIRUQRQFRPSOLDQFHZLWKODZVDQGUHJXODWLRQVFRQFHUQLQJWKH
provision and use of products and services

DIC Report 2017131

123–127 (Communication with Stakeholders)
47–48 (Compliance)
47–48 (Compliance)NANA &RPSOLDQFH ³(OLPLQDWHYLRODWLRQVRIDQWLWUXVWDQWLFRUUXSWLRQDQGRWKHUNH\OHJLVODWLRQ´
108–110 (Sustainable Procurement)
108–110 (Sustainable Procurement)NA
11 (Overview of Materiality Analysis), 96 (Quality)
57 (Focus on Product Stewardship), 96–98 (Quality)NA
76–79 (Managing Chemical Substances in Products), 97 (Initiatives Aimed at Increasing
Customer Satisfaction)NA
96–98 (Quality)
11 (Overview of Materiality Analysis), 111 (Business Models that Respond to Social Imperatives)
NA
NA
NA
NA

108 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 2017

132

1970

1999

2015

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.

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

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

Enters the multilayered films business

Completes reconstruction of corporate
headquarters in Nihonbashi

1999

1973

Acquires Coates, the printing inks
division of France’s TOTALFINAEnters 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.

Succeeds in developing 100% soybean
oil-based printing ink

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

2008

Nematic LCs

DIC Building

Changes Company nameto DIC Corporation

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.

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

2016

Launches DIC108 medium-term
management plan
Sets forth a growth scenario aimed at realizing sustainable growthand outlines what DIC must do between now and fiscal year 2018.

2016

DIC’s new corporate symbol

Introduces branding program

Sun Chemical’s headquarters

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.

Seeks to advance globalization ofcore businesses and diversify into new areas

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.

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, with theaim of maintaining its reputation as a 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

Brand advertisement for television

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 2017

133

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.

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 2017134

Third-Party Opinion Regarding DIC Report 2017

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, healso served as a national expert for Japanto the ISO 26000 working group.

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. I was particularly
impressed with the Company’s account of its success in surpassing the targets
it had set, other than that for net sales, for fiscal year 2016, the first year of its
medium-term management plan, DIC108, which resulted from the implementationof measures in line with the growth scenario outlined in the plan. The explanationof how DIC is managing its business portfolio by dividing its businesses into three
categories—businesses with stable earnings bases, businesses that will drive
growth and next-generation businesses—with the aim of long-term targets, namely,
consolidated net sales of ¥1,000 billion and operating income of ¥100 billion in fiscal
year 2025, was clear and convincing.
I would like to offer a few suggestions for enhancing the DIC Group’s reporting of
its sustainability initiatives, as well as its disclosure thereof. First, I would like to see
the promotion of sustainability accorded further importance in Group management.
The segments titled “Initiatives to Strengthen Governance at Subsidiaries” and“Responding to New Laws and Regulation” on page 52 were particularly timely. In
DIC108, the Group pledges to work as one, guided by its new slogan, to drive DIC
forward. The Group has budgeted ¥150.0 billion for strategic investments over three
years. It is important to acknowledge the increasing importance of environmental andsocial due diligence in assessing potential M&A targets. Accordingly, I look forward
to the Group enhancing its disclosure regarding the compliance, risk management,
information security and other basic practices of its subsidiaries.
Second, looking at the report as a whole, my impression was that there is room fora more comprehensive explanation of the relationship between individual businesses
and sustainability initiatives. For example, I recognize that the newly developed
environment-friendly polyurethane resin , which has the same performance of
conventional polyurethane resins but does not contain environment-damaging DMF,
which is introduced on page 28, is an appropriate example of product development
designed to contribute to a sustainable society. However, in recent years thepollution of oceans caused by the increased consumption and disposal of plastic
waste has become a major environmental issue. I would like to see the DIC Group’s
awareness of such newly emerging social imperatives reported on somewhere in the
DIC Report.
Third, I would like to see the Group strengthen its efforts to reduce emissions ofgreenhouse gases. In October 2016, the Group set a target for reducing absolutegreenhouse gas emissions by 7.0% from the fiscal year 2013 level by fiscal year
2020, or an average of 1.0% annually. However, compared with recent moves toward
the realization of a carbon constrained, or low-carbon, society, this is actually arather modest goal. With the weighting of fine chemicals in the Group’s productportfolio likely to continue increasing, I recognize that this is a difficult challenge, but
I look forward to seeing the Group promote even more ambitious initiatives.
Last year, I stated that I would like to see an increase in reporting on initiatives
in overseas markets. This year, more overseas examples were featured in the“Voice from the DIC Group” and Topics sections, so I would like to acknowledge
an improvement on this score. The Group reported on its efforts to create positive
work environments. I was both surprised and pleased to see on page 103 that thevoluntary separation rate for female employees of the parent company has declined
to less than 1% and that the average years of service for female employees currently
exceeds that for male employees. In next year’s DIC Report, I hope to see more farreaching information on how the Group is leveraging its strengths while at the sametime integrating the concept of sustainability into each of its businesses.

DIC Report 2017135

Corporate Data
Headquarters/Branches in Japan
Corporate Headquarters

Chiba

Headquarters
DIC Building, 7-20, Nihonbashi 3-chome, Chuo-ku,
Tokyo 103-8233, Japan
Tel: +81-3-6733-3000

Hokuriku

Branch Ofﬁces
Osaka

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

12, Yawatakaigandori, Ichihara, Chiba 290-8585, Japan
Tel: +81-436-41-4141 Fax: +81-436-43-1059
64-2, Minatomachi-So, Hakusan, Ishikawa 929-0296, Japan
Tel: +81-76-278-2332 Fax: +81-76-278-5354

Sakai

3, Takasago 1-chome, Takaishi, Osaka 592-0001, Japan
Tel: +81-72-268-3111 Fax: +81-72-268-1705

Kashima18, Higashifukashiba, Kamisu, Ibaraki 314-0193, Japan
Tel: +81-299-93-8111 Fax: +81-299-92-6384

Yokkaichi

Saitama

4472-1, Komuro, Ina-machi, Kita-Adachi-gun, Saitama
362-8577, Japan
Tel: +81-48-722-8211 Fax: +81-48-722-6087

Tatebayashi

6023, Tobukogyodanchi, Ohshima-cho,Tatebayashi, Gunma 374-0001, Japan
Tel: +81-276-77-2461 Fax: +81-276-77-2468

Laboratories
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, 2017.)

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.
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 (Hai’an) Limited
Sun Chemical Holding (Hong Kong) Ltd.
Sun Chemical Trading (Shanghai) Co., Ltd.
Suqian Lintong New Materials Co., Ltd.
Suzhou Lintong Chemical Science Corp.
TOA-DIC Zhangjiagang Chemical Co., Ltd.
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 GmbHDIC Europe GmbHDIC Holdings Austria GmbHDIC Holdings B.V.
DIC Performance Resins GmbHECG Holdings Ltd.
Gibbon FineCal Ltd.
Glenside Properties Limited
Hartman D.O.O.
Hartmann Druckfarben GmbH
Hartmann-Sun Chemical EOOD
Kingfisher Colours Ltd.
Lorilleux Maroc S.A.
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.
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 Inks A/S
Sun Chemical Inks Ltd.
Sun Chemical Lasfelde GmbHSun Chemical Ltd.
Sun Chemical N.V./S.A.
Sun Chemical Nyomdafestek Kereskedelmi
es Gyarto 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 Publication Romania S.R.L.
Sun Chemical Publications Bulgaria EAD
Sun Chemical S.A.U.
Sun Chemical S.A.S.
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 Chemical ZAOSun 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
DIC International (USA), LLC
Earthrise Holdings Inc.
Earthrise Nutritionals, LLC.
Inmobiliaria Sunchem, S.A. de C.V.
Mondis Manufacturers Insurance
Company N.V.
New England Manufacturers
Insurance Corp.
Rycoline Products, LLC
SC Funding LLC
SC (Puerto Rico) Ink
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 de Panama, S.A.
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, 2017.)

DIC Report 2017136

DIC Report 2017
Financial Section

Year ended December 31, 2016

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 41
Independent Auditor’s Report 42
Investor Information and Corporate Data 44

1Consolidated Six-Year Summary
DIC Corporation and Consolidated Subsidiaries
Years ended December 31, 2016 to 2013, and years ended March 31, 2013 to 2012

Dec. 2016

Dec. 2015

Dec. 2014

Millions of yen,
except for per share information
Dec. 2013
Mar. 2013
Mar. 2012

Net sales
Percent increase (decrease)(Note 4)
Operating income
Net income attributable toowners of the parent¥751,438¥819,999¥830,078¥705,647

Equity (Note 3)
Total assets(8.4)%(1.2)%—%—%¥703,781

Thousands of
U.S. dollars,
except for per
share information(Note 7)
Dec. 2016¥734,276(4.2)%$6,422,547(5.7)%(8.4)%

54,18251,06841,07640,181

38,48434,960463,094

34,76737,39425,194

26,771

19,064

18,158297,154

278,535
764,828

262,467
778,857

249,749
803,703

195,218
761,690

136,921692,991

101,911675,067

2,380,641
6,536,991

Equity per share (Notes 1 and 5) ¥2,938.12
Earnings per share (basic)
366.72(Notes 2 and 5)
Cash dividends per share
64.00
applicable to the period (Note 6)¥2,768.41¥259.63¥213.13¥149.48¥111.08$25.11

389.40

26.78

29.23

20.80

19.79

3.13

8.00

6.00

6.00

6.00

4.00

0.55

33.7%
14.6%

31.1%
11.3%

25.6%
16.1%

19.8%
16.0%

15.1%
17.3%

36.4%
12.9%

Equity ratio to total assets
ROE (return on equity)

36.4%
12.9%

Number of employees

20,481

20,264

20,411

20,034

20,273

20,455

20,481

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 the 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 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 for the fiscal year ended
December 31, 2016, would be ¥100.00.
7. Yen amounts have been translated, for readers’ convenience only, at the rate of ¥117 to US$1, the approximate rate of exchange at December 31, 2016.
Operating Income

Net Sales

ROE(Billions of yen)(Billions of yen)
1,000.0

(%)

60.0

51.1

830.1 820.0
800.0

751.4

703.8 705.6

48.0

38.5

40.2

54.2

20.0

16.0

600.0

36.0

12.0

400.0

24.0

8.0

200.0

12.0

4.0

0.0

Mar.
2013

Dec.
2013

Dec.
2014

Dec.
2015

Dec.
2016

Net Income Attributable to Owners of the Parent(Billions of yen)
50.0

0.0

37.4

34.8

Dec.
2013

Dec.
2014

14.6

Dec.
2015

0.0

Dec.
2016

12.9
11.3

Mar.
2013

Dec.
2013

Cash Dividends

Dividend Payout Ratio

(Yen)

(%)

150.00

40.0

Mar.
2013

16.1

16.0

41.1

End of 2nd quarter
Year-end

Dec.
2014

Dec.
2015

50.00

120.00

40.00

90.00

30.00

28.8
26.8

30.0

25.2

60.00

10.0

30.00

0.0

Mar.
2013

Dec.
2013

Dec.
2014

Dec.
2015

Dec.
2016

0.00

40
30

30

30

30

30

30

Mar.
2013

Dec.
2013

Dec.
2014

27.3
20.5

60

19.1
20.0

Dec.
2016

22.4

20.5

20.00

40

40

10.00

Dec.
2015

Dec.
2016

0.00

* 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.

Mar.
2013

Dec.
2013

Dec.
2014

Dec.
2015

Dec.
2016

2

Management’s Discussion and Analysis

This document presents consolidated results for fiscal year 2016, comprising the accounts for the year ended December 31, 2016, of DIC and its domestic and overseas subsidiaries.

OperatingResults

In fiscal year 2016, ended December 31, 2016, the economies of North America and Europe continued to see
moderate recovery. In Asia, a revival was seen in the People’s Republic of China (PRC) and Southeast Asia. Conditions in India remained on a gentle upswing. Japan’s economy, while still fragile, showed signs of a gradual rally.
In this environment, consolidated net sales declined 8.4%, to ¥751.4 billion, notwithstanding firm shipments,
owing to the appreciation of the yen against other major currencies, among others. Operating income advanced
6.1%, to ¥54.2 billion. Factors behind this result included increased sales of high-value-added products andcost reductions. Ordinary income rose 13.9%, to ¥55.8 billion, bolstered by an improved financial positionand other factors. Both operating income and ordinary income results represented record highs. Net income
attributable to owners of the parent decreased 7.0%, to ¥34.8 billion, with contributing factors including adecline in gain on sales of non-current assets.

Net sales
Operating income
Ordinary income
Net income attributable to owners of the parent

FY2016

Billions of yen
FY2015

Change (%)

Change calculated inlocal currency (%)¥751.4
54.2
55.8
34.8

¥820.0
51.1
49.0
37.4

(8.4)%
6.1
13.9
(7.0)

(0.3)%
14.7——

Average exchange rate (¥/US$)

Segment
Results

FY2016Yen
FY2015¥109.96¥120.85

Segment results in key markets are as follows. Year-on-year percentage changes in squared parentheses represent
increases or decreases excluding the impact of foreign currency fluctuations. 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 healthy shipments. However, overall sales in Japan slipped, reflecting
decreased demand for publishing inks and news inks and the erosion of sales prices across the board. Operating income soared, underpinned by the aforementioned shipments, as well as by the positive impact of cost
reductions and an improved product mix, among others.
The Americas and Europe
Although sales of packaging inks rose, sales in Europe and North America were down, owing to waning demand for publishing inks and news inks. Sales in Central and South America advanced, buoyed by brisk shipments of packaging inks and publishing inks. As a consequence of various factors, including these results, andof the impact of foreign currency fluctuations, overall sales in the Americas and Europe declined. Foreign currency fluctuations also hindered operating income, which decreased despite being level in local currency terms.

3Management’s Discussion and Analysis

Asia and Oceania
While shipments of packaging inks were solid, flagging sales prices in all product categories pushed down sales
in the PRC. A sharp increase in sales of publishing inks and packaging inks underpinned higher sales in Southeast Asia. In Oceania, sales rose, bolstered by robust shipments of publishing inks and packaging inks. Sales inIndia slipped, with contributing factors including falling sales of news inks. For these and other reasons, overallsales in Asia and Oceania decreased, hampered by foreign currency fluctuations. Operating income was up in
local currency terms, bolstered by higher sales of high-value-added products, cost reductions and other factors,
but down after translation, reflecting foreign currency fluctuations.

Japan
The Americas and Europe
Asia and Oceania

Net sales
Operating income
Net sales
Operating income
Net sales
Operating income

Billions of yen
FY2016

Change (%)

Change calculated inlocal currency (%)¥ 79.8
5.1
232.7
8.4
61.6
4.8

(1.2)%
62.5(14.8)(19.7)(12.6)(8.9)——(1.1)%
(0.0)
(0.3)
3.5

Fine Chemicals
In pigments, sales in Japan were lifted by brisk shipments of functional pigments, including those for color filters,
while sales in the Americas and Europe decreased, notwithstanding a substantial increase in sales of pigments
for cosmetics, as a consequence of foreign currency fluctuations. Sales of thin-film transistor (TFT) liquid crystals(LCs) rose substantially, reflecting higher shipments from a new production facility in the PRC and the start offull-scale shipments from Japan, which had been delayed. While these factors boosted results in local currency
terms, segment sales were down after translation, owing to foreign currency fluctuations. Segment operating
income advanced substantially, underpinned by an improved product mix, among others.

Net sales
Operating income

Billions of yen
FY2016

Change (%)

Change calculated inlocal currency (%)¥128.2
14.4(5.4)%
10.0

2.2%
16.8

Polymers
Despite generally firm shipments, sales in Japan declined as a result of falling sales prices. Sales overseas werealso down, hindered by the deterioration of sales prices and by foreign currency fluctuations, although sales
to customers in the electrical and electronics industries were solid. For these and other reasons, segment sales
decreased. Cost reductions and other factors sparked a sharp increase in segment operating income.

Net sales
Operating income

Billions of yen
FY2016

Change (%)

Change calculated inlocal currency (%)¥180.919.6(7.0)%
23.0(3.0)%
29.6

Compounds
Sales of polyphenylene sulfide (PPS) compounds advanced, as shipments were healthy both in Japan and overseas. Thanks to robust shipments overseas, sales of jet inks were up overall, despite the negative impact offoreign currency fluctuations on exports, which hurt domestic sales. Although these factors led to an increasein local currency terms, segment sales decreased after translation, owing to foreign currency fluctuations. Segment operating income declined, reflecting segment sales results, among others.

Net sales
Operating income

Billions of yen
FY2016

Change (%)

Change calculated inlocal currency (%)

¥61.1
5.0

(3.9)%(13.3)

3.5%
(6.1)

4

Management’s Discussion and Analysis

Application Materials
Persistently robust shipments sustained an increase in sales of hollow-fiber membrane modules. Nonetheless,segment sales declined, despite being level in local currency terms. Reasons for this result included dwindlingsales of industrial adhesive tapes, which were hindered by sluggish demand for products used in smartphones.
Segment operating income fell, with contributing factors including the aforementioned sales results.

Net sales
Operating income

Analysis ofCash Flows

Billions of yen
FY2016

Change (%)

Change calculated inlocal currency (%)

¥55.7
1.9

(3.2)%(11.1)(0.5)%(9.4)

Cash and cash equivalents as of December 31, 2016, totaled ¥16.7 billion, an increase of ¥1.6 billion from theprevious fiscal year-end.
Operating Activities
Net cash provided by operating activities amounted to ¥62.5 billion, up from ¥29.1 billion provided by suchactivities in fiscal year 2015. Income before income taxes and non-controlling interests was ¥49.9 billion, while
the adjustment for depreciation and amortization amounted to ¥32.4 billion. Income taxes paid totaled ¥15.8
billion, while working capital increased ¥4.8 billion.
Investing Activities
Net cash used in investing activities came to ¥32.2 billion, up from ¥10.0 billion used in such activities in theprevious fiscal year. A total of ¥31.3 billion was applied to capital expenditure, comprising the purchase ofproperty, plant and equipment and the purchase of intangible assets, while ¥971 million was used for the purchase of investment securities. Proceeds from subsidy income totaled ¥842 million.
Financing Activities
Net cash used in financing activities amounted to ¥26.9 billion, compared with ¥24.8 billion used in such activities in fiscal year 2015. The net total of funds applied to the repayment of interest-bearing debt was ¥17.1
billion, while cash dividends paid totaled ¥7.6 billion.

5

Consolidated Balance SheetDIC Corporation and Consolidated Subsidiaries
December 31, 2016

Assets

2016

Millions of yen
2015

Cash and deposits (Notes 6 and 19)¥ 17,241¥ 15,363

Notes and accounts receivable—trade (Notes 11, 19 and 20)

215,369

221,006

Merchandise and finished goods (Note 11)82,611

87,947Work in process (Note 11)

9,461

9,369

Raw materials and supplies (Note 11)53,60552,245

Deferred tax assets (Note 16)

9,915

11,435

Other (Note 19)

21,37421,947

Allowance for doubtful accounts(10,839)(10,654)398,737

408,658

Buildings and structures

92,092

95,879Machinery, equipment and vehicles

66,34270,226

Tools, furniture and fixtures

10,142

9,605

Land

50,16950,775Construction in progress

7,915

6,660

226,660

233,145

Goodwill

501

906

Software

4,878

6,470

Other

3,563

3,880

8,942

11,256

Investment securities (Notes 7, 8 and 19)

41,00737,075

Deferred tax assets (Note 16)

36,99638,939Net defined benefit asset (Note 12)

28,07424,885

Other (Notes 7 and 19)

25,89925,296

Allowance for doubtful accounts(1,487)(397)

Total investments and other assets

130,489

125,798

Total non-current assets

366,091

370,199

Total assets¥764,828¥778,857

Current assets:

Total current assets

Non-current assets:
Property, plant and equipment (Notes 9, 10 and 11):

Total property, plant and equipment

Intangible assets (Note 10):

Total intangible assets

Investments and other assets:

See notes to the consolidated financial statements.

6

Consolidated Balance Sheet

Liabilities andNet Assets

2016

Millions of yen
2015¥ 94,392¥ 95,569

Short-term loans payable (Notes 11 and 19)

52,744

20,632Current portion of long-term loans payable (Notes 11, 19 and 20)

43,647

61,630Current liabilities:
Notes and accounts payable—trade (Notes 19 and 20)

Commercial papers (Notes 11 and 19)

—

4,000

Current portion of bonds (Notes 11, 19 and 20)

—

8,000

Lease obligations (Notes 11 and 19)

584

572

4,153

8,347

Income taxes payable (Notes 16 and 19)
Deferred tax liabilities (Note 16)

322

295

Provision for bonuses

7,050

6,914

Other (Note 19)

62,44765,321

265,339271,280

Bonds payable (Notes 11, 19 and 20)

30,00020,000Long-term loans payable (Notes 11, 19 and 20)

109,918

139,900

4,394

4,718

Total current liabilities
Non-current liabilities:

Lease obligations (Notes 11 and 19)
Deferred tax liabilities (Note 16)

9,598

8,555

Net defined benefit liability (Note 12)

28,072

32,833

Asset retirement obligations

1,334

1,213

Other

9,156

10,501

Total non-current liabilities

192,472

217,720

Total liabilities

457,811

489,000

Capital stock (Note 14)

96,55796,557

Capital surplus

94,094

94,161Retained earnings

159,541

137,071

Treasury shares (Note 15)(1,213)(5,911)

Total shareholders’ equity

348,979

321,878

5,248

3,688

Net assets:
Shareholders’ equity (Notes 13 and 23):

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

(187)

(73)

Foreign currency translation adjustment(48,626)(29,925)

Remeasurements of defined benefit plans (Note 12)(26,879)(33,101)

Total accumulated other comprehensive income(70,444)(59,411)

Non-controlling interests

28,482

27,390Total net assets

307,017289,857

Total liabilities and net assets¥764,828¥778,857

7

Consolidated Statement of Income
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2016

2016

Millions of yen
2015

Net sales
Cost of sales
Gross profit¥751,438
571,895
179,543¥819,999
635,106
184,893

Selling, general and administrative expenses (Note 17)
Operating income

125,361
54,182

133,825
51,068Non-operating income:Interest income
Dividends income
Equity in earnings of affiliates
Foreign exchange gains
Other
Total non-operating income

575
401
3,266
607
2,182
7,031

1,198
365
2,735
—
2,383
6,681

Non-operating expenses:
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses

3,227
—
2,189
5,416

5,485
567
2,702
8,754

Ordinary income

55,797

48,995

842
78
—
—
—
—
920

255
—
14,229
2,723
704
555
18,466

4,412
1,416
553
440
—
—
—
6,821

3,550
3,787
—
—
716
674
168
8,895

49,89658,566

11,565767
12,332

14,351
4,634
18,98537,564
2,797¥ 34,767

39,581
2,187¥ 37,394

Extraordinary income:State subsidy
Gain on bargain purchase
Gain on sales of non-current assets
Gain on sales of subsidiaries and affiliates securities
Compensation income
Gain on sales of investment securities
Total extraordinary income
Extraordinary loss:
Loss on disposal of non-current assets
Severance costs
Provision of allowance for doubtful accounts
Loss on disaster
Loss on valuation of investments in capital
Impairment loss (Note 10)
Loss on reduction of non-current assets
Total extraordinary loss
Income before income taxes and non-controlling interests
Income taxes (Note 16):
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.

¥ 366.72—¥ 389.40—

94,80596,030

¥

64.00

¥

8.00

8

Consolidated Statement of Comprehensive Income
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2016

2016

Millions of yen
2015¥ 37,564¥ 39,581

Valuation difference on available-for-sale securities

1,609

845

Deferred gains or losses on hedges

(112)

102

(18,179)(14,523)

Remeasurements of defined benefit plans, net of tax (Note 12)

6,266

3,560

Share of other comprehensive income of associates accounted for using
equity method(965)(1,309)¥(11,381)¥(11,325)¥ 26,183¥ 28,256¥ 23,734¥ 26,782

2,449

1,474

Net income
Other comprehensive income:

Foreign currency translation adjustment

Total other comprehensive income (Note 22)
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests
See notes to the consolidated financial statements.

9Consolidated Statement of Changes in Net Assets
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2016

Millions of yen
Shareholders’ equity

Balance at January 1, 2015
Cumulative effects of changes inaccounting policies
Restated balance
Dividends from surplus, ¥7.00
per share (Note 13)
Net income attributable to owners of
the parent
Purchase of treasury shares—
13,849,737 shares
Net changes of items other thanshareholders’ equity (Notes 8 and 13)
Balance at December 31, 2015
Dividends from surplus, ¥8.00
per share (Note 13)
Net income attributable to owners of
the parent
Purchase of treasury shares—
19,473 shares
Retirement of treasury shares(Notes 14 and 15)
Consolidation of shares (Notes 14 and 15)
Change in treasury shares of parent
arising from transactions with
non-controlling shareholders
Net changes of items other thanshareholders’ equity (Notes 8 and 13)
Balance at December 31, 2016

Issuednumber ofcommon stock(thousands)

Capitalstock

CapitalsurplusRetainedearnings

965,372¥96,557¥94,161¥108,726

965,372

96,557

94,161(2,316)
106,410965,372

96,557(13,803)(856,412)

94,161(5)¥TreasurysharesTotalshareholders’equity(896)¥298,548(896)(2,316)296,232(6,733)(6,733)37,39437,394137,071(5,015)(5,015)(5,911)

321,878(7,585)(7,585)34,76734,767(4,712)

(19)

(19)

4,717

—
—

(62)
95,157¥96,557¥94,094(62)¥159,541¥(1,213)¥348,979
Millions of yen

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Deferred gains
or losses onhedges¥2,914¥(178)¥(14,817)

2,914

(178)

(14,817)

Balance at January 1, 2015
Cumulative effects of changes inaccounting policies
Restated balance
Dividends from surplus, ¥7.00
per share (Note 13)
Net income attributable to owners of
the parent
Purchase of treasury shares—
13,849,737 shares
Net changes of items other thanshareholders’ equity (Notes 8 and 13)
Balance at December 31, 2015
Dividends from surplus, ¥8.00
per share (Note 13)
Net income attributable to owners of
the parent
Purchase of treasury shares—
19,473 shares
Retirement of treasury shares(Notes 14 and 15)
Consolidation of shares (Notes 14 and 15)
Change in treasury shares of parent
arising from transactions with
non-controlling shareholders
Net changes of items other thanshareholders’ equity (Notes 8 and 13)
Balance at December 31, 2016
See notes to the consolidated financial statements.

Total
accumulated
othercomprehensive
incomeNon-controllinginterests

Total
net assets¥(36,718)¥(48,799)¥26,974¥276,723(36,718)(48,799)(99)
26,875(2,415)274,308

Foreigncurrency Remeasurements
translationof definedadjustment
benefit plans(6,733)37,394(5,015)
774
3,688

105
(73)

(15,108)(29,925)

3,617(33,101)(10,612)(59,411)515
27,390(10,097)
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

10

Consolidated Statement of Cash FlowsDIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2016

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
Loss (gain) on sales of investment securities
Loss on valuation of investments in capitalState 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
Proceeds from sales of investments in subsidiaries resulting in change in scope of consolidation
Purchase of subsidiaries and affiliates securities
Proceeds from sales 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
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 6)
Cash and cash equivalents at end of the period (Note 6)
See notes to the consolidated financial statements.

2016

Millions of yen
2015¥ 49,896¥ 58,566

32,444
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)
62,50432,886477
583
383(1,563)(2,735)
5,485(10,679)674(2,723)
(555)
716
(255)
(15,878)
1,940(12,383)(12,844)
42,0952,731(5,724)(9,989)29,113(6,505)
6,219(30,310)
455
(969)
(114)
—
—
—
(971)
376
(275)
842
(950)
(32,202)(3,297)
3,387(31,247)
14,670(841)(1,873)
2,100
(49)
6,356
(48)
642
—
209
18
(9,973)30,364(4,000)30,069(75,576)
10,000(8,000)(7,585)(1,047)(19)(1,058)(26,852)(1,892)
1,558
15,113¥ 16,671(8,847)4,000
62,440(79,137)
20,000(10,000)(6,733)(987)(5,015)(522)(24,801)
4,381(1,280)16,393¥ 15,113

11

Notes to the Consolidated Financial Statements
DIC Corporation and Consolidated Subsidiaries
Year ended December 31, 2016

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 144 other companies in the fiscal year
ended December 31, 2016 (146 other companies in the fiscal year ended December 31, 2015). 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 23 affiliates in the fiscal year ended December 31, 2016 (22 in the fiscal year ended December 31, 2015) 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-salesecurities whose fair values are not readily available are carried at cost. The cost of securities sold is determinedbased on the moving-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 collectibility of receivables from companies in financial difficulty.
Allowance for doubtful accounts of foreign consolidated subsidiaries is provided based on an estimate ofcollectibility 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
Leased assets related to finance leases that do not transfer ownership of the leased property to the lessee aredepreciated 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 (10 to 28 years). Past service
costs are amortized over 4 to 26 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 account
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 options and 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, 2015.
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.

Note 3:
Accounting
Changes

Application of Accounting Standard for Business Combinations and other regulations
Effective from the beginning of the fiscal year ended December 31, 2016, the Company has applied “Accounting Standard for Business Combinations” (ASBJ Statement No. 21, September 13, 2013), “Accounting

14

Notes to the Consolidated Financial Statements

Standard for Consolidated Financial Statements” (ASBJ Statement No. 22, September 13, 2013), “AccountingStandard for Business Divestitures” (ASBJ Statement No. 7, September 13, 2013), etc. As a result, the methodof recording the amount of difference caused by changes in the Company’s ownership interests in subsidiaries
in the case of subsidiaries under ongoing control of the Company was changed to one in which it is recorded
as capital surplus, and the method of recording acquisition-related costs was changed to one in which they arerecognized as expenses for the fiscal year in which they are incurred. Furthermore, for business combinations
carried out on or after the beginning of the fiscal year ended December 31, 2016, the accounting method waschanged to one in which the reviewed acquisition cost allocation resulting from the finalization of the provisional
accounting treatment is reflected in the consolidated financial statements for the fiscal year to which the dateof business combination belongs. In addition, the presentation method for “Net income” and other related
items was changed, and the presentation of “Minority interests” was changed to “Non-controlling interests.”
Application of “Accounting Standard for Business Combinations,” etc., is in line with the transitional measures provided for in paragraph 58-2 (4) of “Accounting Standard for Business Combinations,” paragraph 44-5
(4) of “Accounting Standard for Consolidated Financial Statements” and paragraph 57-4 (4) of “AccountingStandard for Business Divestitures.” The Company is applying the standards prospectively from the beginningof the fiscal year ended December 31, 2016.
In addition, in the consolidated statement of cash flows for the fiscal year ended December 31, 2016, theCompany adopted the method of recording cash flows from the purchase or sales from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation as “Net cash provided by(used in) financing activities.” Moreover, the method of recording cash flows relating to costs arising from thepurchase of investments in subsidiaries resulting in change in scope of consolidation and costs arising from thepurchase or sales from changes in ownership interests in subsidiaries that do not result in change in scope of
consolidation as “Net cash provided by (used in) operating activities” was adopted.
As a result, the impact of this change on the consolidated financial statements for the fiscal year ended
December 31, 2016 was immaterial.
Application of Practical Solution on a change in depreciation method due to Tax Reform 2016
Following the revision to the Corporation Tax Act, the Company has applied “Practical Solution on a change
in depreciation method due to Tax Reform 2016” (ASBJ Practical Issues Task Force No. 32, June 17, 2016)
from the second quarter ended June 30, 2016, and changed the depreciation method for facilities attached tobuildings and structures acquired on or after April 1, 2016 from the declining-balance method to the straightline method.
As a result, the impact of this change on the consolidated financial statements for the fiscal year ended
December 31, 2016 was immaterial.

Note 4:
Changes in
Presentation(Consolidated
Balance Sheet)“Long-term loans receivable” of “Investments and other assets,” which had previously been separately presented, is included in “Other” from the fiscal year ended December 31, 2016, because its materiality has decreased, and prior period financial statements have been reclassified in accordance with the new presentation.
The balance which is included in “Other” as of December 31, 2015 is ¥110 million.

Note 5:
New Accounting
Pronouncement

Implementation Guidance on Recoverability of Deferred Tax Assets
On March 28, 2016, ASBJ issued ASBJ Guidance No. 26, “Implementation Guidance on Recoverability ofDeferred Tax Assets.”(1) Overview
When authority for providing practical guidelines on the accounting and auditing treatment of recoverability ofdeferred tax assets (limited to the portion related to accounting treatment) was transferred from JICPA to ASBJ,ASBJ fundamentally followed the framework of classifications mainly prescribed in JICPA Auditing Standards
Board Report No. 66, “Audit Treatment of Judgments with Regard to Recoverability of Deferred Tax Assets.”
This system classifies companies into five categories and the amount of deferred tax assets to be recorded isestimated in accordance with these classifications. The implementation guidance makes necessary reviews apart of the classification criteria and treatment of the amount of deferred tax assets to be recorded. With

15

Notes to the Consolidated Financial Statements

regard to the recoverability of deferred tax assets, the implementation guidance prescribes the guidelines to be
used when applying accounting standards related to tax-effect accounting (Business Accounting Council).
(Review of the criteria as to the classification and the treatment for the recognition of deferred tax assets)(i) accounting treatments for entities which are not included in any categories,(ii) criteria as to the classification of entities in Category 2 and Category 3,(iii) accounting treatments of unscheduled deductible temporary differences for entities in Category 2,(iv) accounting treatments for deductible temporary differences for entities in Category 3, which are scheduled
to be deductible after five years, and(v) accounting treatments for entities in Category 4 in the current fiscal year, which are expected to be included
in Category 2 or Category 3 in the following year.
(2) Date of adoption
The Company and its domestic consolidated subsidiaries will adopt the revised implementation guidance fromthe beginning of the fiscal year ending December 31, 2017.
(3) Impact of the adoption of the implementation guidance
The Company is in the process of measuring the effects of applying the revised implementation guidance infuture applicable periods.

Note 6:
Cash and Cash
Equivalents

Cash and cash equivalents as of December 31, 2016 and 2015 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

2016

Millions of yen
2015¥17,241¥15,363

(570)

(250)

¥16,671¥15,113

Note 7:
Investments in
Unconsolidated
Subsidiaries andAffiliates

Investments in unconsolidated subsidiaries and affiliates as of December 31, 2016 and 2015 include the following:
2016

Millions of yen
2015

Investments in stock of unconsolidated subsidiaries and affiliates¥21,678¥20,590

Investments in equity of unconsolidated subsidiaries and affiliates
Total

1,398
¥23,076

1,465¥22,055

Note 8:Investment
Securities

The carrying amounts and aggregate fair values of available-for-sale securities at December 31, 2016 and 2015
are as follows:
Millions of yen
2016
Cost

Unrealized
gains

Unrealized
lossesFair value¥8,190¥8,190¥7,752¥7,752

¥(54)
¥(54)

¥15,888¥15,888

Available-for-sale securities:
Stocks
Total

Millions of yen
2015
Cost

Unrealized
gains

Unrealized
lossesFair value

Stocks¥8,333¥5,588¥(73)¥13,848

Total¥8,333¥5,588¥(73)¥13,848

Available-for-sale securities:

16

Notes to the Consolidated Financial Statements

Note 9:Property, Plant
and Equipment

Accumulated depreciation on property, plant and equipment as of December 31, 2016 and 2015 is ¥545,419
million and ¥554,121 million, respectively.

Note 10:
Impairmentof Long-Lived
AssetsImpairment losses on long-lived assets for the fiscal year ended December 31, 2015 for each asset group is
as follows:

Used status

Factory assets in use
Goodwill
Total

Category of assets

Location

Machineries, software and other
Goodwill

Australia
Australia

Millions of yen
2015
Allocated impairment loss

¥635
39
¥674

The carrying amount of the factory assets was reduced to its recoverable amount because the recoverable
amount is less than the carrying amount. All of the carrying amount of goodwill was also reduced because it
became unlikely that the revenue originally expected will be earned.
The book value of factory assets in use has been lowered to the recoverable amount. All of the book valueof goodwill has been recognized as impairment loss.

Note 11:
Short-Term
Loans Payable
and Long-Term
Loans Payable

Information with respect to short-term loans payable at December 31, 2016 and 2015 is as follows:
The average interest rate for the fiscal years ended December 31, 2016 and 2015 is 2.43% and 3.07%,
respectively, for short-term loans payable, and 0.00% and 0.16%, respectively, for commercial papers.
Bonds payable, long-term loans payable and lease obligations at December 31, 2016 and 2015 comprisethe following:
2016

0.90% Japanese yen notes due 2016¥—

Millions of yen
2015

¥

3,000

0.81% Japanese yen notes due 2016

—

5,000

0.53% Japanese yen notes due 2022

10,00010,0001.00% Japanese yen notes due 2025

10,00010,000

0.95% Japanese yen notes due 2036

5,000

—

0.36% Japanese yen notes due 2026

5,000

—

153,565

201,530

Loans due 2017–2024, with an average interest rate of 0.88%
Lease obligations

4,978

5,290

Subtotal

188,543234,820(43,647)(61,630)—(8,000)Less: current portion of long-term loans payable
Less: current portion of bonds
Less: lease obligations—current
Total

(584)

(572)

¥144,312¥164,618

The annual maturities of bonds payable, long-term loans payable and lease obligations for the fiscal years
subsequent to December 31, 2016 are as follows:
Millions of yen

2017¥ 44,231

2018

28,421

2019

44,0422020

19,651

2021

9,727

Thereafter

42,471

Total¥188,543

17

Notes to the Consolidated Financial Statements

The amounts of assets pledged as collateral and secured borrowings and loans at December 31, 2016 comprise the following:
Millions of yen

Assets pledged as collateral:
Notes and accounts receivable—trade¥3,488Inventories

1,753

Property, plant and equipment

561

Total

¥5,802

Secured borrowings and loans: None

Note 12: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, 2016

Domestic plans

Millions of yen
Foreign plans¥97,958¥152,302

Service cost

2,222

527

Interest cost

774

5,160

Actuarial gains and losses(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¥95,395¥166,449

3,733—

Restated balance

99,128

166,449

Service cost

2,276

816

Interest cost

782

5,820

Benefits paid

As of December 31, 2016

As of January 1, 2015
Cumulative effects of changes in accounting policies

Actuarial gains and losses

1,236(9,389)Benefits paid

(5,464)(5,786)

Past service cost—

29

Exchange translation differences—(5,669)Other
As of December 31, 2015—32

¥97,958¥152,302

18

Notes to the Consolidated Financial Statements

Changes in plan assets
Domestic plans

Millions of yen
Foreign plans¥120,430¥121,882

As of January 1, 2016
Expected return on plan assets

3,033

6,129

56

9,544

Contributions by the employer

2,663

1,978

Benefits paid

(4,904)(6,407)—(13,056)

Actuarial gains and losses

Exchange translation differences
Other

—

185

¥121,278¥120,255

Domestic plans

Millions of yen
Foreign plans¥119,289¥129,177

As of December 31, 2016

As of January 1, 2015
Cumulative effects of changes in accounting policies

(17)

—

119,272

129,177

2,978

7,405

Actuarial gains and losses(805)(8,070)Contributions by the employer

4,368

3,138

Benefits paid

(5,383)(5,617)—(4,176)

Restated balance
Expected return on plan assets

Exchange translation differences
Other
As of December 31, 2015—

25

¥120,430¥121,882

Reconciliation of defined benefit obligations and plan assets on retirement benefits recognized in
the consolidated balance sheet

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

2,017

Assets (net defined benefit asset)
Net amount of liabilities and assets recognized in consolidated balance sheet(28,021)¥ (26,004)

Domestic plans(53)¥

26,002Millions of yen
2015
Foreign plans

Funded defined benefit obligations¥

96,839¥ 151,839

Plan assets(120,430)(121,882)

Subtotal(23,591)

29,957

Unfunded defined benefit obligations

1,119

463

Net amount of liabilities and assets recognized in consolidated balance sheet¥ (22,472)¥

30,420Liabilities (net defined benefit liability)¥¥

30,530Assets (net defined benefit asset)
Net amount of liabilities and assets recognized in consolidated balance sheet

2,303(24,775)¥ (22,472)

(110)
¥

30,42019

Notes to the Consolidated Financial Statements

Retirement benefit expenses and its breakdowns

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

Domestic plans

Millions of yen
2015
Foreign plans

Amortization of past service cost
Total

Service cost

¥ 2,276

Interest cost

782

5,820

Expected return on plan assets(2,978)(7,405)

Recognition of actuarial gains and losses

1,488

1,759

Amortization of past service cost
Total

¥

816

—

29

¥ 1,568¥ 1,019

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, 2016 and 2015 are as follows:

Past service cost

Domestic plans

Millions of yen
2016
Foreign plans¥¥

Actuarial gains and losses
Total

—

14

1,820

7,270

¥1,820¥7,284

Domestic plans

Millions of yen
2015
Foreign plans

Past service cost¥¥

Actuarial gains and losses

(705)

5,130

¥(705)¥5,145

Total

—

15

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, 2016 and 2015 are as follows:

Domestic plans

Unrecognized past service cost
Unrecognized actuarial gains and losses
Total

¥

—

Millions of yen
2016
Foreign plans

¥

125

5,576

(46,450)¥5,576¥(46,325)

20

Notes to the Consolidated Financial Statements

Domestic plans

Unrecognized past service cost
Unrecognized actuarial gains and losses¥—

Millions of yen
2015
Foreign plans

¥

111

3,756

(53,720)¥3,756¥(53,609)

Domestic plans

2016
Foreign plans

Equity securities

51.7%

27.8%

Debt securities

21.8%

56.1%

Total

Major breakdown of plan assets

Other
Total

26.5%

16.1%

100.0%

100.0%

Note: 28.5% of the assets of the domestic plans is available-for-sale securities contributed to the employee retirement benefit trust.

Domestic plans

2015
Foreign plans

Equity securities

52.5%

26.7%

Debt securities

19.1%

56.2%

Other

28.4%

17.1%

100.0%

100.0%

Total

Note: 28.1% of the assets of the domestic plans are available-for-sale securities contributed to the employee retirement benefit trust.

Actuarial assumptions
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.

Domestic plans

2015
Foreign plans

Discount rate

0.8%

1.5%–4.5%

Expected return rate on plan assets

3.0%

5.5%–6.8%

Expected rate of increase in salary

3.3%

1.9%–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, 2016 and 2015 were ¥1,947 million and ¥2,151 million, respectively.

Note 13: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

21Notes to the Consolidated Financial Statements

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 14:
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
a result, the number of authorized shares as of December 31, 2016 and 2015 are 150,000,000 shares and1,500,000,000 shares, respectively, and the number of shares issued as of December 31, 2016 and 2015 are
95,156,904 shares and 965,372,048 shares, respectively.

Note 15:
Treasury Shares

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 treasury shares as of December 31, 2016 and 2015 are 356,552 shares and 17,294,751
shares, respectively.

22

Notes to the Consolidated Financial Statements

Note 16:
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, 2016 and 2015 are as follows:
Normal effective statutory tax rate in Japan

2016

2015

33.1%

35.6%

0.6%

1.5%

Adjustments:
Valuation allowance change
Tax rate differences(4.9)%(4.8)%

Equity in earnings of affiliates(2.1)%(1.7)%

Entertainment and other non-deductible expenses

1.8%

2.3%

Elimination of intercompany dividends income

8.0%

5.4%

Dividends income and other non-taxable income(6.5)%(6.5)%

State, provincial, municipal and local taxes

0.5%

0.5%

Tax credit for research and development and others(2.4)%(3.8)%

Adoption of FIN48(0.9)%(0.9)%Tax credit for the Special Tax Law for the March 11 Earthquake(0.4)%(0.4)%

Other(2.1)%

5.2%

24.7%

32.4%

Actual effective tax rate

The tax effects of significant temporary differences and loss carryforwards, which resulted in deferred tax assets and liabilities, as of December 31, 2016 and 2015 are as follows:
2016

Millions of yen
2015

Deferred tax assets:
Inventories

¥

4,131

¥

4,472

Property, plant and equipment

3,061

3,540

Allowance for doubtful accounts

1,840

1,821

Net defined benefit liability

8,712

9,783

Restructuring and divestitures

262

441

Unrealized gain

958

985

Net operating loss carryforwards

27,42524,493

Other

25,176

29,115

Subtotal

71,56574,650Less: valuation allowance(19,052)(16,639)

52,51358,011

Deferred income taxes related to gains from property, plant and equipment(3,012)(3,392)

Property, plant and equipment(3,797)(4,653)Contribution of securities to employee retirement benefit trust(1,692)(1,786)

Net defined benefit asset(1,008)—

Total
Deferred tax liabilities:

Other(6,013)(6,656)

Total(15,522)(16,487)

Net deferred tax assets¥ 36,991¥ 41,524

Influence from changes in corporation tax rate
As a result of the “Act for Partial Amendment of the Income Tax Act” (Act No. 15 of 2016) and the “Act for
Partial Amendment of the Local Tax Act” (Act No. 13 of 2016) passed in the Diet on March 29, 2016, thenormal effective statutory tax rate used to calculate deferred tax assets or liabilities changed from 32.3% to30.9% for those temporary differences expected in fiscal years 2017 and 2018, and to 30.6% for those temporary differences expected after fiscal year 2019.

23

Notes to the Consolidated Financial Statements

Consequently, deferred tax assets decreased by ¥173 million and deferred tax liabilities decreased by ¥465
million. Additionally, income taxes–deferred (credit) recognized in the fiscal year ended December 31, 2016
increased by ¥76 million, valuation difference on available-for-sale securities (credit) increased by ¥126 million, deferred gains or losses on hedges (debit) increased by ¥5 million and remeasurements of defined benefit plans (credit) increased by ¥95 million.

Note 17:
Research andDevelopment
Costs

Research and development costs charged to income for the fiscal years ended December 31, 2016 and 2015
are ¥11,206 million and ¥12,163 million, respectively.

Note 18:
LeasesOperating leases
Future minimum rental payments under non-cancellable operating leases at December 31, 2016 and 2015 are
as follows:

Due within one year
Due after one year
Total

2016

Millions of yen
2015¥2,5096,576¥9,085¥2,645
6,821¥9,466Note 19:
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 notes and accounts receivable–trade 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 notes and accounts payable–trade, 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.

24

Notes to the Consolidated Financial Statements

Fair value of financial instruments
The following tables present the carrying amounts and the fair value of financial instruments at December
31, 2016 and 2015. Financial instruments whose fair value is not reliably measured are excluded from thetables below.

Carrying amount

Fair value

Millions of yen
2016
Difference

Cash and deposits¥ 17,241¥ 17,241¥

Notes and accounts receivable—trade215,369

215,369—
3,215

Assets:—Investment securities
Stocks of subsidiaries and affiliates

2,364

5,579

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

43,64743,863

216

584

584

—

4,153

4,153

—

Liabilities:
Notes and accounts payable—trade

Lease obligations (current)
Income taxes payable—

Bonds payable

30,00030,07575

Long-term loans payable

109,918

110,136

218

Lease obligations (non-current)
Total

4,394

4,827

433

¥339,832¥340,774

¥ 942

¥

¥

¥

—

¥

—

Derivative financial instruments: (Note)
Hedge accounting—not applied
Hedge accounting—applied
Total

472
(266)

¥

206

472
(266)

¥

206

—

25

Notes to the Consolidated Financial Statements

Carrying amount

Fair value

Millions of yen
2015
Difference

Cash and deposits¥ 15,363¥ 15,363¥

Notes and accounts receivable—trade

221,006

221,006

—

1,899

4,880

2,981

Assets:—Investment securities
Stocks of subsidiaries and affiliates
Other

13,848

13,848—

Total¥252,116¥255,097¥2,981¥ 95,569¥ 95,569¥

Short-term loans payable

20,632

20,632—Current portion of long-term loans payable

61,63061,896266

Commercial papers

4,000

4,000

—

Current portion of bonds

8,000

8,041

41

Liabilities:
Notes and accounts payable—trade

Lease obligations (current)
Income taxes payable

—

572

572

—

8,347

8,347

—

Bonds payable

20,00020,127

127

Long-term loans payable

139,900

140,412512

Lease obligations (non-current)
Total

4,718

5,058

340

¥363,368¥364,654¥1,286

¥

593

¥

593

¥

—

¥

504

¥

504

¥

—

Derivative financial instruments: (Note)
Hedge accounting—not applied
Hedge accounting—applied
Total

(89)

(89)

—

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 isapplied 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 for

26

Notes to the Consolidated Financial Statements

the calculation above is the interest rate that may be currently available to the Group for loans payable withsimilar terms and conditions.
Bonds payableAs for bonds payable which has observable market prices, the fair value is measured using 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 20 “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, 2016 and2015 are ¥22,755 million and ¥21,328 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 frominvestment securities.
Redemption schedule for financial assets and securities
The redemption schedules for financial assets and securities with contractual maturities as of December 31,
2016 and 2015 are summarized as follows:

1 year or less

Notes and accounts receivable—tradeTotal¥215,369

¥—

¥—

¥—

¥215,369

¥—

¥—

¥—

More than 1 year
More than 5 years
but less than 5 years but less than 10 years

Millions of yen
2015
More than
10 years

1 year or less

Notes and accounts receivable—trade
Total

More than 1 year
More than 5 years
but less than 5 years but less than 10 years

Millions of yen
2016
More than
10 years¥221,006

¥—

¥—

¥—

¥221,006

¥—

¥—

¥—

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, 2016 and 2015 are summarized as follows:

1 year or lessMore than 1 year
More than 5 years
but less than 5 years but less than 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

¥

—

¥

—

Millions of yen
2016
More than
10 years

¥

—

—

1,963

2,270

161

¥96,975¥101,841¥37,310¥5,161

27

Notes to the Consolidated Financial Statements

1 year or less

Short-term loans payable¥20,632

Current portion of long-term loans payable

61,630Commercial papers

4,000

Current portion of bonds
Lease obligations (current)More than 1 year
More than 5 years
but less than 5 years but less than 10 years

—

¥ —

—

—

—

—

—

—

8,000

—

—

—

572

—

—

—

Bonds payable——

20,000—Long-term loans payable—

129,877

10,023—

Lease obligations (non-current)

—

1,983

2,271

464

¥94,834¥131,860¥32,294

¥464

Total

¥

—

¥

Millions of yen
2015
More than
10 years

Note 20:
Derivative
Financial
Instruments

The Group has entered into various foreign currency forward contracts, currency options and 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.

28

Notes to the Consolidated Financial Statements

Derivative transactions to which hedge accounting is not applied at December 31, 2016 and 2015
(1) Currency related
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)

Currency options: (Note 1)
Selling
GB poundBuyingU.S.$
Foreign currency forward contracts: (Note 2)
Selling

Buying

Other
Total

360

—

(5)

(5)

¥23,254

¥855

¥472

¥464

29

Notes to the Consolidated Financial Statements

Millions of yen
2015
Contract/notionalamount due after
one year

Fair value

Unrealized
gain/loss

882

¥882

¥(73)

¥ (36)

827

—

(4)

(4)

526

—

(2)

2

U.S.$

12,476

—

374

376

Euro

2,546

—

44

44

Russian ruble

3,579

—

104

(104)

Canadian $

1,588

—

8

(8)

Other

1,596

—

(78)

78

Contract/notionalamountCurrency swaps: (Note 1)(Payment in H.K.$ and receipt in U.S.$)¥(Payment in Japanese yen and receipt in
Korean won)
Other
Currency options: (Note 1)
SellingEuro
BuyingForeign currency forward contracts: (Note 2)
Selling

Buying
U.S.$

5,389

—

170

171

Euro

1,268

—

50

50

¥30,677

¥882

¥593

¥ 569

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.

Derivative transactions to which hedge accounting is applied at December 31, 2016 and 2015
(1) Currency related
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.$

Forecasttransaction

178

—

¥

(6)

3,973

—

(292)

76

—

2

Accounts
receivable—trade

2,613

—

324

—

Loans payable

451—

Loans payable

38,913

11,847¥46,528¥11,847

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)

30

Notes to the Consolidated Financial Statements

Millions of yen
2015
Contract/notionalamountContract/notionalamount due after
one year

Fair value

¥

¥

—

¥ 10

276

—

(14)

Forecasttransaction

217

—

(1)

58

—

2

Accounts
payable—trade

270

—

(3)

1

—

0

Accounts
receivable—trade

4,397

—

355

—

Loans payable

3,203

—

Loans payable

11,847

11,847¥21,134¥11,847

Hedged item

Currency swaps: (Note 1)(Payment in Australia $ and receipt in
Singapore $)(Payment in New Zealand $ and receipt
in Singapore $)510

Loans receivable

Foreign currency forward contracts: (Note 1)
SellingEuro
U.S.$
BuyingU.S.$
Chinese yuan
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

¥ (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 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
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

Millions of yen
2015
Hedged item

Contract/notionalamountContract/notionalamount due after
one year

Fair value

¥

¥

—

¥ (6)

Interest rate swaps: (Note 1)(Fixed rate payment, floating rate receipt)

Loans payable

Interest rate options: (Note 2)
BuyingLoans payable

6,538

—

(32)

Interest rate swaps: (Note 3)
Bonds payable,(Fixed rate payment, floating rate receipt)
loans payable(Floating rate payment, floating rate receipt)
Total

50,582
6,000¥63,461

35,541
5,000¥40,541

¥(38)

341

Notes: 1. The fair value of interest rate swaps is measured using the quoted price obtained from financial institutions.
2. Interest rate options used are called collar options, which effectively limit the risk arising from the changes in interest rates by the
combination of buying call options and selling put options.
3. If interest rate swaps qualify for hedge accounting and meet certain specific criteria, they are settled together with either bonds
payable or loans payable subject to hedged transaction. Accordingly, the fair value of such interest rate swaps is reflected in bonds
payable and loans payable.

(3) Commodity related
Millions of yen
2016
Hedged item

Contract/notionalamountContract/notionalamount due after
one year

Fair value

¥195

¥51

¥30

¥195

¥51

¥30

Commodity swaps: (Note)
Fuel(Fixed price payment, floating price receipt)
Total

Millions of yen
2015
Hedged item

Contract/notionalamountContract/notionalamount due after
one year

Fair value

¥104

¥—

¥(45)

¥104

¥—

¥(45)

2016

Millions of yen
2015

¥178

¥ 200

Commodity swaps: (Note)
Fuel(Fixed price payment, floating price receipt)
Total

Note: The fair value of commodity swaps is measured using the quoted price obtained from the exchange.

Note 21:
Commitments
and Contingent
Liabilities

Contingent liabilities at December 31, 2016 and 2015 are as follows:

Trade notes endorsed
Trade notes discounted with banks

29—

Liabilities for guarantee and other

771

881

¥978

¥1,081Total

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 22:
Other
Comprehensive
IncomeEach component of other comprehensive income and related tax effects (including those on non-controllinginterests) for the fiscal years ended December 31, 2016 and 2015 comprises the following:
2016

Millions of yen
2015

Valuation difference on available-for-sale securities:
Gains (losses) arising during the year

¥

2,303

¥

1,074

Reclassification adjustments to profit (loss)

(123)

(39)

Amount before income tax effect

2,180

1,035

Income tax effect

(571)

(190)

Total

1,609

845

Gains (losses) arising during the year

(31)

131

Reclassification adjustments to profit (loss)

(148)

137

Amount before income tax effect

(179)

268

Deferred gains or losses on hedges:

Income tax effect
Total

67

(166)

(112)

102

(18,179)(14,440)

Foreign currency translation adjustment:
Adjustments arising during the year
Reclassification adjustments to profit (loss)

—

(83)

Amount before income tax effect(18,179)(14,523)

Total(18,179)(14,523)

Adjustments arising during the year

6,380

1,164

Reclassification adjustments to profit (loss)

2,724

3,276

Amount before income tax effect

9,104

4,440

Income tax effect(2,838)

(880)

Total

6,266

3,560

(972)

(1,194)Remeasurements of defined benefit plans:

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

7

(115)

(965)

(1,309)¥(11,381)¥(11,325)

33

Notes to the Consolidated Financial Statements

Note 23:
Subsequent
Events(1) At the Company’s annual meeting of shareholders held on March 29, 2017, the shareholders approved thefollowing appropriations of retained earnings:
Millions of yen

Cash dividends, ¥60.00 per share
Total¥5,688¥5,688(2) At a meeting of its board of directors on January 25, 2017, the Company resolved to enter into a capital andbusiness alliance with TAIYO HOLDINGS CO., LTD., as a result of which TAIYO HOLDINGS CO., LTD. would
become an equity-method affiliate of the Company. A capital and business alliance agreement between thecompanies was concluded on the same day. The Company acquired shares on February 10, 2017.
Purpose of the capital and business alliance
The Company and TAIYO HOLDINGS CO., LTD. aim to increase the benefits to be gained by bringing together
the former’s materials development capabilities, which draw on core technologies cultivated over many years,
and the latter’s firm understanding of market needs, which reflect an extensive supply chain from solder resist
to printed writing boards.
Name of the entity from which the Company acquired shares
TAIYO HOLDINGS CO., LTD.
Name, principal businesses and stated capital of the entity of which the Company acquired shares(i) Name
TAIYO HOLDINGS CO., LTD.
(ii) Principal businesses Manufacture and sale, as well as purchase and sale, of chemical products for use inelectronics components(iii) Stated capital¥6,265 million (as of December 31, 2016)
Date of share acquisition
February 10, 2017
Number of shares acquired by the Company, cost of acquisition and rate of voting rights acquired(i) Number of shares acquired
5,617,300
New shares:
1,312,600 shares (common stock)
Treasury shares: 4,304,700 shares (common stock)(ii) Cost of acquisition¥24,873 million(iii) Ration of voting rights acquired 19.50%
Funding and method of payment
The Company paid by its own funds and loans.

34

Notes to the Consolidated Financial Statements

Note 24:
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
2016
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¥365,189 ¥ 91,642 ¥177,158¥61,056¥55,614 ¥750,659¥

779 ¥751,438—

36,534

3,777

63

61

40,435—40,435365,189

128,176

180,935

61,11955,675

791,094

779

791,873

18,363

14,43019,642

4,975

1,867

59,27745

59,322¥312,608 ¥ 99,280 ¥195,521¥64,499¥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

35

Notes to the Consolidated Financial Statements

Millions of yen
2015
Printing
Inks

Fine
Chemicals

Reportable Segment
Application
Materials
Total
Polymers Compounds

Others

Total

Sales:
Sales to customers
Intersegment sales¥412,576 ¥ 94,232 ¥191,125¥63,541¥57,438 ¥818,912¥ 1,087 ¥819,999—

41,298

3,495

28

64

44,885—44,885

Total sales

412,576

135,530

194,620

63,56957,502

863,797

1,087

864,884

Segment profit

18,988

13,11915,974

5,739

2,099

55,91977

55,996¥322,779 ¥104,601 ¥196,005¥62,208

Segment assets¥55,490 ¥741,083¥33,923 ¥775,006

Others:Depreciation and amortization

12,553

4,811

7,911

4,315

2,065

31,655518

32,173

Amortization of goodwill

135

148

151

13

—

447

30

477

Investments in affiliates

1,160

1,118

16,509—1,370

20,157

1,898

22,055

Increase in property,
plant and equipment andintangible assets

9,851

4,794

7,838

4,097

4,019

30,599642

31,241

Reconciliation between reportable segment total and amounts disclosed in consolidated financial
statements
Millions of yen

Sales:
Reportable segment total
Sales in “Others”
Elimination of intersegment transactions
Sales in consolidated financial statements

2016

2015

¥791,094
779(40,435)¥751,438¥863,797
1,087(44,885)¥819,999

Millions of yen

Profit:Reportable segment total
Profit in “Others”
Corporate expenses
Operating income in consolidated financial statements

2016

2015

¥59,27745(5,140)¥54,182¥55,91977(4,928)¥51,068

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.

Millions of yen

Assets:Reportable segment total
Assets in “Others”
Elimination between segments
Corporate assets
Assets in consolidated financial statements

2016

2015

¥725,640
37,558(38,942)
40,572¥764,828¥741,083
33,923(34,073)
37,924¥778,857

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.

36

Notes to the Consolidated Financial Statements

Other items are as follows:
Millions of yen
2015

2016

Depreciation and amortization

Reportable
Segments

Others Adjustments Consolidated

Reportable
Segments

Others Adjustments Consolidated¥31,253

¥ 402

¥ 789

¥31,655

¥ 518

¥713

¥32,444¥32,886

Amortization of goodwill

343

30

—

373

447

30

—

477

Investments in affiliates

20,711

2,365—

23,076

20,157

1,898—

22,055

Increase in property,
plant and equipment andintangible assets

29,676357

1,246

31,27930,599642

847

32,088Notes: 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.

New corporate organization introduced
Effective from January 1, 2016, the Company revised its segmentation to coincide with the launch of its mediumterm management plan, DIC108. Accordingly, certain figures for the fiscal year ended December 31, 2015,
have been restated.
(2) Related information
Information about geographical areas
Millions of yen
2016

Japan

USA

OthersTotal

Net sales (Note)¥282,457¥97,898¥371,083¥751,438

Property, plant and equipment

121,982

28,36076,318226,660
Millions of yen
2015

Japan

USA

OthersTotal

Net sales (Note)¥286,283¥112,320¥421,396¥819,999

Property, plant and equipment

119,193

31,611

82,341

233,145

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, 2016 and 2015, 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
There was no impairment loss of assets for the fiscal year ended December 31, 2016.

Impairment loss

Printing Inks

Fine
Chemicals

Polymers

Compounds

Application
Materials

¥674

¥—

¥—

¥—

¥—

Millions of yen
2015
Corporate andOthers eliminations Consolidated

¥—

¥—

¥674

(4) Amortization and unamortized balances of goodwill by reportable segment
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

37

Notes to the Consolidated Financial Statements

Millions of yen
2015
Corporate andOthers eliminations ConsolidatedPrinting Inks

Fine
Chemicals

Polymers

Compounds

Application
Materials

Amortization

¥135

¥148

¥151

¥13

¥—

¥30

¥—

¥477

Unamortized balances

135

273

404

4

—

90

—

906

(5) Gain on bargain purchase by reportable segment
There was no gain on bargain purchase for the fiscal year ended December 31, 2015.

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 25:
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, 2016 and 2015, are as follows:
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

Millions of yen
2015

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)

2,171

Security
deposit

1,778

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers

Purchaseof metallic
containers
and others

Purchaseof metallic
containers andothers (Note 5)

559

Trade
accounts
payableand otheraccounts
payable203

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

108

Trade
notes andaccounts
receivable

23

Purchase of raw
materials andothers (Note 7)

5,673

Trade
notes andaccounts
payable,and otheraccounts
payable1,451

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

3,637

Trade
accounts
receivable

1,363

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.

39

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, 2016 and 2015, are as follows:
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

Notes to the Consolidated Financial Statements

Millions of yen
2015

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)

18 Security
deposit8

Dainichi Can ChiyodaCo., Ltd.
ku, Tokyo

10

Manufacture andsale of metallic
containers

Purchaseof metallic
containers andothers (Note 5)

663 Tradenotes andaccounts
payable,and otheraccounts
payable131

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

67 Tradenotes andaccounts
receivable

22

Purchase of raw
materials andothers (Note 7)

960 Trade
accounts
payableand otheraccounts
payable161

Sales ofmerchandise andfinished goods,
and offering ofservice (Note 6)

373 Trade
accounts
receivable

129

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.

41

Management’s Report on Internal Control

1. Basic framework for internal control over financial reporting
Yoshiyuki Nakanishi, 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 operating internal control over the Company’s financial reporting and have designed and operated internal control over financial 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 2016 was conducted as of December
31, 2016, 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, 2016, the Company’s internal control over financial reporting was effectively maintained.

Yoshiyuki Nakanishi
Representative Director, President and CEO
DIC Corporation

42

Independent Auditor’s Report

43

Independent Auditor’s Report44

Investor Information and Corporate Data
(As of December 31, 2016)

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 2016 and 2015 were as follows:

Jan.–Mar.
Apr.–Jun.
Jul.–Sept.
Oct.–Dec.

2016
High
Low

2015
High
Low

¥3,310 ¥2,260
2,630 2,340
3,270 2,037
3,845 2,915¥3,600 ¥2,640
3,820 3,020
3,140 2,560
3,770 2,700*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

38.8%

17.1%

Paid-in Capital

Japan Trustee Services Bank, Ltd.
(Trust Account)
Nissei Real-Estate Co., Ltd.
The Master Trust Bank of Japan, Ltd.
(Trust Account)
Dainichi Can Co., Ltd.
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)
Nippon Life Insurance Company

Treasury stock: 0.4%

6,434
5,310

6.76%
5.58

4,526
4,256

4.75
4.47

3,500
3,127

3.67
3.28

2,680
2,590

2.81
2.72

2,269 2.38
1,900 1.99
36,596 38.46%

Note: The Company implemented a consolidation of shares of common
stock by a factor of 10 to 1 and changed the minimum unit of
tradable shares from 1,000 shares to 100 shares with July 1, 2016,as the effective date.

Transfer Agent

Meeting of Shareholders
For Further Information, Contact:

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
12.5%

Number of
Shares Owned Percentage(Thousands)of Total

Major Shareholders

Corporate Headquarters

20,481

27.6%

Financial instruments business operators: 3.7%

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

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.
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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