Business Report 2022
Year ended March 31, 2022

https://www.kureha.co.jp/

Becoming an Excellent Company inSpecialty Chemicals

Editorial Policy
Thank you for reading the Kureha Business Report.
The purpose of this report is to share with stakeholders the current status of theKureha Group and the direction in which it is headed.
Until fiscal 2020, the Business Report was prepared mainly as English materials to
help overseas investor understand the Group, focusing on the contents of the Annual
Securities Report. However, from fiscal 2021, we have decided to prepare this reportsimultaneously in Japanese and English in order to provide information to as many
people as possible.
We have also changed the publication format from paper to PDF. Due to the impactof the spread of COVID-19, there are fewer opportunities for face-to-face delivery, andthis change is intended to reach more people.
We hope that this Business Report will deepen your understanding of the Company
and show its appeal.

In pursuit of “a great leap forward,” we at Kureha will continue to pursue our goal of being
a company that creates the products which meet the needs of the times.
Corporate Identity

MissionKureha aims to be an “Excellent Company.”
Contents of the Report■ Reporting Period

In principle, the reporting period is the same as the fiscal year (April 2021 to March
2022). However, some sections of this report may differ from the fiscal year.

● We treasure people and the natural environment■ Reference Guidelines

 We constantly evolve through innovation●

Corporate philosophy

ISO 26000 Guide to Social Responsibility● We contribute to society by developing beneficial products

Ministry of the Environment “Environmental Reporting Guidelines (2012 Edition)”
Ministry of the Environment “Environmental Accounting Guidelines (2005 Edition)”

Employee code of
conduct■ Date of Issue

We always act as global corporate citizens, recognizing our corporate social
responsibilities.
・In relation to our clients
We will act with sincerity and with customer satisfaction as our priority.
・In relation to our work
We will consistently pursue progress and innovation.
We will consistently respond to change and act with a global perspective.
・In relation to our colleagues
We will maintain mutual respect and exhibit teamwork.

February 2023 (updated annually in principle)■ Disclaimer

This report includes not only past and present facts about Kureha Corporation andgroup companies, but also forecasts of the future based on plans and outlooks at thetime of publication and issuance. These forecasts are assumptions or judgments basedon the information available at the time of writing and can be invalidated by unforeseenchanges in conditions. In addition, some of the figures in the tables and graphs havebeen revised from previous years due to changes in the target range and revision of thecalculation method. Thank you for your understanding.

Contents
Kureha Group’s Value Creation

01	Corporate Identity/ Editorial Policy /Contents of the Report / Contents
03 Top Message
09 Kureha’s History
11 Growth Driver
13 Medium-Term Management Plan

01

Kureha Corporation Business Report 2022

Growth Strategy

Foundation for Value Creation

15

Review of Operations

23

E: Environmental Initiatives

19

Research and Development

25

S: Improving Human Capital21	Digital Transformation (DX)27

G: Enhancing Governance System

Data Section
39

Financial and Non-Financial Highlights

41

Operating Results and Financial Analysis

43

Consolidated Statements of Financial
Position

44

Consolidated Statements of Profit or Loss /Consolidated Statements of 		Comprehensive Income

45

Consolidated Statements of Changes in
Equity47

Consolidated Statements of Cash Flows48

Corporate Data and Stock Information

Information Disclosure
The Kureha Group mainly uses the following reporting tools andstrives to disclose information systematically.
Kureha Business Report:
PDF (Japanese/English)
Kureha Report: Booklet/
PDF (Japanese)
This report presents the financial,management and overall businessconditions of Kureha Corporation,with investors and shareholders
as the primary readers.
Kureha website (CSR)
This website includes
information on CSR activities,
detailed performance data, andpast reports.

Kureha Corporation Business Report 202202

Kureha Group’s Value Creation

Top Message

Foster strength worthy of a company driven by
innovation, develop differentiated products in the fieldof specialty chemicals and become a high value-added
enterprise that will continuously contribute to society.

“Making Kureha Better” Was the Only thought That Drove Me Continuously for
10 Years
Ten years have passed since I was appointed President back inand the sales price of our competitors, resulting in many loss

September 2012. Looking back over this period, my only

making businesses. This was the state Kureha Group was inrecollection is how I ran through the years, only with thewhen I became president.

thought of making Kureha better. Kureha Group, which used toThis being the case, I made every effort to return to the originof a company driven by innovation. I aimed for “Sampo-yoshi

stage where corporate management can be conducted stably.

(meaning good for three parties: the Company, the customer

In the new medium- to long-term management plan to be

and society),” a sustainable management where Kureha Groupannounced in May 2023, we plan to create a new Kureha

can make profit and conduct its business soundly, by shiftingGroup on an entirely different management stage, a complete

the axis from product-out to market-in, to provide products thatdeparture from the previous 10 years.

will benefit society and be appreciated by our customers, under

The Group has built up solid capabilities in its history

the slogan of “Make it if it does not exist.”
We are still on route to the set goal, however Kureha Groupon product-out, in other words, “if we make it, it should sell.”has now made it to the start line in the last 10 years. Please

We were concentrating on new product development without

keep an eye on the challenges to be made by Kureha Group as

conducting any basic market-in surveys, such as asking

a company driven by innovation in the coming years.

ourselves who the customers were, what were the cost of sales

Growth Strategy

spanning more than 70 years. However, it was focused more

Kureha Group
Value Creation

be weak in both profitability and finance, has now reached the10

6

Fiscal 2021 Proved to Be a Fruitful Year

Yutaka Kobayashi|

 Steady Growth in Earnings Supported by a
Favorable Turn in Business Environment4

polyvinylidene fluoride (PVDF), an advanced product for2

Lithium-ion battery binders for the EV market, which is
expanding globally. This is a product where our long-fostered
technical prowess has been appreciated by our customers,

the business environment. The largest contributor was

showing our strength that is worthy of best practice for0
Data Section

Earnings grew in fiscal 2021 supported by the favorable turn inKureha’s Challenge Performance Trends (FY2016 Onward)(Billions of yen)

(%)

30

10

25

8

20

Foundation for Value
Creation

8

President &Chief Executive Officer

6

15
4

10

2

5
0

2016

2017

2018

2019

2020

2021

(FY)

0

■ Cash flows from operating activities ■ Operating profit by segment ■ Operating profit ■ Profit attributable to owners of parent
ROE

03

Kureha Corporation Business Report 2022

300

Kureha Corporation Business Report 202204

Kureha Group’s Value Creation

Top Message

sustainability management of being “Sampo-yosh,” meaning

whom we almost split the current market, is also planning on aenvironment, there is an issue that must be solved in thetemperature mining areas is growing steadily, we will focus ongood for the seller, good for the buyer, and good for society.

significant increase in production, as well as improvements ofKureha Group. The issue is that PGA plugs for low temperaturetechnical development required to acquire an even larger

Furthermore, New Kurewrap from the Specialty Plastics

technology being made by other companies, resulting in new

and ultra-low temperature mining areas, which will be themarket share and will make conversions to return to profitability

segment also performed extremely well. With the stay-at-homecompetitors entering the market. Intensive competition may

center of rig development from now, are still under

for the entire business in fiscal 2023 when the new medium- to

demand triggered by the COVID crisis, where the lifestyle ofoccur. In order to prepare for these risks, we will continue todevelopment. Although the market for medium and high-long-term management plan will start.

eating at home was given a second look, it gained attention asproceed with the development of innovative production

an item that would lessen food waste, which would lead totechnology, and reductions in production costs. In addition,

SDGs, and resulted in a steady increase in sales.

geopolitical risks are becoming apparent with US-China trade
friction and the situation in Ukraine. Although we structured ourbusinesses also grew in both sales and profits, resulting in abusiness based on globalization and free trade, we will proceedsignificant progress for the entire group.

with decentralization of raw material suppliers and production|

 Expansion of PVDF Business and Future
Challenges

bases with a view to reconstruct the business structure.

| PGA Business to Turn Profitable in Fiscal 2023

Fiscal 2022 Will Be the Year for the Finishing Touch towards the New Mediumto Long-Term Management Plan
| Preparations for the Future
For fiscal 2022, similar to fiscal 2021, there are no majorchanges in social issues to be addressed by our groupproducts, such as reducing the global environment load and

40% of the market share of Lithium-ion battery binders for(Houston, United States) in October 2016 and started directeach business.

electric vehicles (EV). In fiscal 2021, the Lithium-ion battery

sales of PGA frac plugs to be used for hydraulic fracturingmarket showed significant growth with the growth of EVs (BEV

(fracking) of shale oil and gas. Sales expanded steadily until

Final Stage of Kureha’s Challenge Extension Plan), and the+ PHEV). Market growth is expected to continue over the longfiscal 2019, but in fiscal 2020 crude oil prices fell rapidly with thelargest management issue is to complete the tasks that haveterm due to policies for carbon neutrality made by various

stagnation of the economy and sharp fall in energy demand

not been fulfilled in the previous medium-term plan and thecountries, as well as the sales policies of major automobile

caused by the COVID crisis, and shale oil and gas production in

preparation of an action plan for the future. This year marks

manufacturers. Although steep increases in raw material prices

the United States has halved. The PGA business fell into themy 10th year as the president and is the year to put thecontinued in fiscal 2021, being able to make appropriate

red, recording product retirement of ¥330 million, and an

finishing touches towards the new medium- to long-termtransfers of the price increase, and by increasing the ratio of

impairment loss of ¥1,600 million. In fiscal 2021, although crude

management plan to start from fiscal 2023. We will makespecial polymers, we have managed to increase the shipped

oil prices continued to rise, recovery of shale oil and gas rig

preparations for the future to create a Kureha Group on an

quantity to Europe and China, resulting in a significant increase

drilling in the United States was slow, and failed to reach pre-advanced management stage.

in profits. We have embarked on capacity increases at the Iwaki

COVID levels, resulting in recording an impairment loss ofFactory and the Chanshu Factory in Jiangsu Province, China,¥5,300 million in property, plant and equipment. However, withto enhance binder supply capability to respond to increased

Russia’s invasion of Ukraine in February 2022, prices for raw

demand, however, there are some issues that must bematerials and fuel soared, resulting in an increase in shale oil

addressed in the medium to long-term.

and gas demand, with rig development accelerating once again.

The largest issue is that, similar to us, our competitor, with

With tail winds actualizing recovery of the business

Fiscal 2022 is the final year of Kureha’s Challenge 2022 (the| Achieve All Unmet Challenges and Make All
Businesses Profitablekind in the world. Being a polymer film, KF Piezo is more
flexible than crystal or ferroelectric ceramics and has goodworkability, and is attracting attention as a promising productfor use in sensor and speaker materials. Furthermore, there
are other products in progress using new technologies thatcannot be announced at this moment due to patentapplications being made, etc.
It is important for Kureha Group, driven by innovation, tohave many seeds of new technologies and products like thisup its sleeve. The reason is that not all will be successful.
There is a need to check the possibility of commercialization
with each step of development as it progresses and narrow
down the prospective seeds. What started out with 100
seeds will be narrowed down to 50 at the next gate, thenfurther down to 20 at the following gate. Managing thesegates is a particularly important point in eliminating businesses
that result in losses.
Until now, we had been developing 100 seeds without any
gate management to narrow them down. This is the reason

In the preparations for the future, current progress of priority

why the idea of product-out has taken root.

measures for fiscal 2022 is as follows.
First, regarding “the expansion and enhancement of highly

Operating Profit Trend by Segment(Billions of yen)advanced materials businesses” and “improvement of

9competitiveness and profitability of existing businesses,” we8will proceed to expand business focused on the PVDF and7

PGA businesses as explained previously in the performance

6

report for fiscal 2021, and improving the competitiveness and5

profitability of existing businesses. Furthermore, we will4

continue to push through all unmet issues through reform with

3

turning all businesses into profitability in mind, including2

turning the PGA business, which recorded a loss in fiscal

102021, back into the black.

2016■ Advanced Materials

05

Data Section

SDGs, and response for steady growth in profit can be felt inmacromolecular material developed by Kureha, the first of its

Foundation for Value
Creation

The Company established Kureha Energy Solutions LLC

be introduced here as an example. KF Piezo is a ferroelectric

Growth Strategy

In the PVDF business, we have firmly maintained approximately

search for new businesses and technologies.” KF Piezo will

Kureha Group
Value Creation

With the promotion of reform within the group, other

2017

2018

■ Specialty Chemicals ■ Specialty Plastics

Kureha Corporation Business Report 20222019
■ Construction

2020■ Other Operations

2021 (FY)“New business creation projects” will be used in “theKureha Corporation Business Report 202206

Kureha Group’s Value Creation

Top Message

So, by introducing the feasibility of commercialization, andof Kureha Group driven by innovation, we will also focus on
Offensive CSR, which will develop and commercialize products

system to concentrate our management resources and invest,that will contribute to SDGs in the form of reduction of global

to increase the possibility of business success. Individuals inenvironmental load, similar to PVDF, an advanced materials for

Kureha Group’s R&D divisions maintain an extremely highLithium-ion battery binders for EVs. There are many products

level of inner resources. However, operations and systems toof Kureha Group that can respond to Offensive CSR in diverse

make full use of their resources was missing. Providing aforms and technologies and products that will be developed

method to transition into an environment and organizationfrom now already include those with promising possibilities.

allowing expression of ideas freely, together with opportunities

Kureha Ecology Management Co., Ltd., a group company,

to be in direct contact with advanced technologies, including

conducts business focused on low PCB concentration indus-

overseas, especially for young researchers with flexible ideas,

trial waste processing. They are also engaged in expanding

will be promoted together with the formulation of the new

the environment business.

medium- to long-term management plan.

CSR, we will realize management with sustainability that

Coal Power Plant to Be Converted to
Biomass Co-Combustion Firing, Based on the
Announcement of Support for TCFD
Recommendations

Priority measures for fiscal 2022 lists the enhancement ofcarbon neutrality and zero-emission response. Kureha Group
has already announced its support for TCFD recommenda-

embodies “Sampo-yoshi" by being appreciated by customers,
providing products that are useful to society, and KurehaGroup being able to raise profits and be able to conduct
sound management.

|

How Kureha Should Be Will Be Redefined in
the New Medium to Long-Term Business Plan
Starting from Fiscal 2023|

 Kureha That Responds to the Expectations of
Its Stakeholders

Board of Directors, and has become an engine to evolve into an
executive system to actively adopt and implement proposals
from the directors and auditors.
Regarding shareholder returns, we plan to start a review of

Finally, let me explain about the strengthening of Kureha Group

Kureha’s existence from the start of fiscal 2022 among its

management foundation. In October 2021, a new humanowned coal power plant at Iwaki Factory. CO2 emitted fromdirectors and executive officers aimed towards the

personnel system was introduced with the aim of having eachment plan. For the past 10 years, we have been promoting

this coal power plant account for more than 70% of CO2

formulation of the new medium- to long-term management

and every individual employee play their roles independently

improvements of financial aspects with the strong intent ofemission of the entire Kureha Group. We have completedplan, starting from fiscal 2023. In the discussions, I haveand autonomously, with awareness of challenge, speed andmaking Kureha better. With our capital adequacy ratio now

experiments to measure CO2 reduction effects by co-com-

explained sustainable management that embodies “Sampo-

growth, and for a corporate climate that is able to swiftly

exceeding 70%, we plan to steer our course to increase

bustion of coal and biomass fuel as the countermeasure, andyoshi,” raising social contribution and reduction in

respond to changes in the business environment. It is a system

active shareholder returns, including stock buy-backs.

this is being formulated based on the results. From now on,

environmental load as keywords, and voicing continuance ofto strengthen the performance based system, aimed at utiliza-

we will continue with our search for carbon neutrality by 2050

challenging to be a company driven by innovation as thetion of senior layers whose retirement age has been extended

a company that meets the expectations of our stakeholders,looking at all technological possibilities such as the use of

figure of what Kureha should be. Furthermore, we intended

to 65, to form it to be the driver for employee awareness andnamely the customers, society, employees and shareholders.

corporate climate reform.

After going through the past 10 years with determination, we

The carbon neutral challenge for Kureha Group is theour payout ratio in the new medium- to long-term manage-

We are only halfway there, but we would like to make Kureha

fuels that do not produce CO2, such as hydrogen andto turn all businesses into profit by fiscal 2022 and toammonia, as well as the recovery and effective utilization ofincorporate it into the new medium- to long-term

In addition, we will embark on the strengthening of corporate

have finally reached the starting line. For the past 10 years, weemitted CO2.

management plan to create Kureha Group with a higher

governance. On December 21, 2021, regulations were revised tohave focused our attention on all areas of concern and havestage of management from fiscal 2023.

strengthen independence, by determining that committee chairs

directed and executed measures for each to provide satisfac-

In addition, we will accelerate our efforts towards carbon
neutrality within the framework of manufacturing technology

Kureha’s Challenge 2022 (Final stage of Kureha’s Challenge

for the Nomination Advisory Committee and the Remuneration

tion to our stakeholders with diverse interests. Making products

reform of each product. By facing the review of the production

Extension Plan) has raised “a high value added type enterprise

Advisory Committee will be selected from independent outsidethat satisfy our customers. For society, contribute to solving

process, such as the development of technology to further

that develops differentiated products in Specialty Chemicals, anddirectors. In April 2022, we established the Sustainabilitysocial issues as a company driven by innovation. For

reduce energy consumption in production, and the develop-

continues to contribute to society,” as the ideal figure of Kureha.

Committee to comprehensively supervise and monitor Kureha

employees, become a company they feel glad to have joined.

ment of products that utilize by-products generated during

In the new medium- to long-term management plan, weGroup’s sustainability management. Then, following the general

And for our shareholders, provide sufficient return on their

the production process more than ever, we will reduce ourwish to continue with the discussions to redefine the ideal

meeting of shareholders in June 2022, the number of internal

investments. We will continue to actively engage ourselves toenvironmental load, including CO2.

figure of Kureha and to indicate new keywords and purpose

directors and outside directors were increased by one each, toconduct dialogue with our stakeholders, listen to their voices,to our stakeholders that is worthy of the Kureha Group with aachieve seven directors on the board. These efforts have led to

and work for continuous improvement of our corporate value.

raised management stage.

achieving active and in-depth discussions to be made in the

We look forward to receiving your continued support.

If we are to define these actions to reduce environmentalload by Kureha Group as Defensive CSR, then as a challenge

Kureha Corporation Business Report 2022

Kureha Corporation Business Report 2022

Data Section

Many discussions have taken place to define the purpose ofrisks, opportunities, and responses of Kureha Group.

Foundation for Value
Creationtions on April 20, 2022, and has disclosed climate related

07

With the two-front strategy of Defensive and Offensive

Growth Strategy

|Kureha Group
Value Creation

the market-in gate management, we have reformed the08

Kureha Group’s Value Creation

Kureha’s History

A Proud History of Developing Original,
Innovative Technology
1934

1939

Showa Jinken Co., Merged with KurehaLtd., the predecessor Spinning Co., Ltd.
company, wasestablished.

	

Launched sales of engineering plastic
Fortron KPS .

1960

	

Launched sales of Krewrap, the firsthousehold plastic wrap in Japan

Corporate brand logo

Kureha Chemical Industry Co., Ltd. was established.
Produced monochlorobenzene, caustic soda,
chlorobenzene, chloronaphthalene, etc.

Fortron KPS

2015

1989

	

Original design of Krewrap

The Nishiki Plant Research Center(now the Central Research Center)
was established.

Kureha Chemical Industry Nishiki Plant

1958 

Received the 8th
Deming Prize.

High chlorine utilization

Following World War II, Kureha began exploringhigh-degree applications for chlorine produced withcaustic soda. One of the first products to emerge
from this R&D was polyvinylidene chloride,developed through Kureha’s own efforts without
reliance on foreign technologies. We later made useof our original technologies in such areas as organic
synthesis and polymeric chemistry to develop an
extensive lineup of chemicals and plastics.

Kureha Corporation Business Report 2022

The Food ResearchLaboratory (now thePolymer Processing
Research Laboratories)
was established.

Petrochemical process development

Kureha developed the world’s first crude oil pyrolysis
technique. The technology derived from this project
formed the cornerstone for the creation of carbon
products and Kremezin, a therapeutic agent forchronic renal failure. In 1960 Kureha also developed
Krewrap, the first household plastic wrap in Japan,
and in 1977 KRESTIN (an anticancer agent).

1986

The Ibaraki ResearchLaboratory (now thePolymer Processing
Research
Laboratories) wasestablished.

2012

Started commercial
production of thepolyglycolic acid (PGA)
U.S.A. plant.

New Krewrap

1991

1993

Launched sales of	therapeutic agent forchronic renal failure Launched sales of agricultural fungicide
Metconazole, Ipconazole , negative
Kremezin .
electrode material for lithium-ion
secondary batteries CARBOTRON P
and binder for electrodes KF Polymer.

Data Section

The Tokyo Research Center(now the Central ResearchCenter) was established.

1975

Factory of KUREHA (CHANGSHU)
FLUOROPOLYMERS CO., LTD.

Foundation for Value
Creation

Construction of the new head
office building (in Tokyo’s
Nihonbashi Horidome-cho) wascompleted.

Sausage ligature process using astamping machine

1954

09

Launched sales of anticancer agent Krestin.

1965

1949

Listed on theTokyo Stock
Exchange.

1977

1962

Growth Strategy

Started commercial
production of the PVDF
China plant.

Released New Krewrap in which the package
design was changed to a fresh-fruit patternwith functional improvements.

Kureha Group
Value Creation

1944 Establishment

1987

Specialty orientation

Global development

Kureha focused on developing unique and specialty
products. A wide range of products was created in avariety of. Meanwhile, we withdrew from the commodity business under a program of selection andconcentration. This restructuring aimed at expanding
the scope of our specialty business, with a focus onadvanced materials, pharmaceuticals and agrochemicals, and high-barrier packaging materials.

In 2005, the company name was changed from Kureha
Chemical Industry to Kureha Corporation. This
rebranding was part of an effort to expand our businessand achieve global growth, without being bound by theimage of a chemical company. Kureha continues toprovide beneficial products that help improve the global
environment and lives of people around the world.

Kureha Corporation Business Report 2022

10

Kureha Group’s Value Creation

Growth Driver

Resolving Social Issues with Technologies andValues That Connect Present and Future

Kureha Hold Some 40% of the World Market for In-Vehicle PVDF Binder Materials
The binder, which is an adhesive, connects them to themoving lithium ions (Li +) between positive and negative

current collectors. The adhesiveness of the binder, anelectrodes. The main components are electrodes, aimportant characteristic, determines battery performance. It

Alongside current businesses, Kureha is pushing the limits of core technologies in organic synthesis,

separator that separates and insulates between the positive

must be able to firmly adhere the active substances to eachpolymers, carbon control, evaluation, and process engineering. Looking to the society of the future, weelectrode and the negative electrode, and an electrolytic

other, as well as the active substances to the current

solution. As a binder material, Kureha’s vinylidene fluoride

collector. However, the binder also has an internal resistanceresin (PVDF) is critical to the functioning of LiBs.

that affects conductivity, so it should exhibit as little

have positioned the environment, energy, life science, electronics, and mobility as priority areas for
future R&D. Through fusion with other technologies, we will create growth drivers enabling Kureha toresolve social issues.

The electrodes function as "active substances" thatadhesiveness as possible.

transfer electrons (e-) and stores and releases lithium ions.

Active substance

Kureha Group
Value Creation

LiBs are secondary batteries that charge and discharge byBinderExpanding Demand for In-Vehicle Lithium-Ion Batteries for a Carbon-Free Society
electrification. Most electric vehicles use lithium-ion batteries

full swing, and environmental regulations are being tightened(LiBs) due to their light weight, high energy density, and low

across the world.

capacity deterioration from repeated charging andCurrent collector

discharging.

The European Commission will virtually ban the sale ofvehicles with internal combustion engines in 2035. US

There is now strong demand for resolving remaining LiB

President Joe Biden has signed an executive order thatissues such as improving reliability, increasing capacity toincludes the goal of maximizing the ratio of zero-emission

extend mileage, increasing output to improve driving

vehicles to 50% in 2030. Similarly, China has announced

performance, achieve high-speed charging and discharging,

substances, electrical stability across a wide potential range,technologies, we can continuously raise the performancethat by 2035 all new vehicles sold will be environmentally

reducing battery costs, and improving charging equipment.

and high permeability for lithium ions. It meets all

and quality of our products and respond promptly to theperformance aspects required of a binder.

needs of customers and society.

*1 BEV: An electric vehicle powered by a battery charged using an external
power source.

We can thus expect the electric vehicle proportion of
global automobiles sales to increase rapidly in the future.
In-vehicle batteries are a key technology enabling this shift toin-vehicle LiBs globally. By upgrading and innovating unique

Kureha’s PVDF exhibits high adhesion to active*2 FCV: An electric vehicle that uses an on-board fuel cell for electricity 		
generation and is powered by an electric motor.

Predictions

In particular, the PVDF grade known as special polymer

now constructing new facilities to increase production

and is sold as a binder for ternary LiBs. Demand for using

capacity from the current 11,000 tons (Japan and China) tosuch batteries in electric vehicles is expanding due to their

21,000 tons by December 2024. To reduce environmental

high capacity, high energy density, and high safety.

impact and costs, we will also work to raise production
efficiency.

To manufacture PVDF, Kureha uses a method called echnology⃝T

introduction

Technology value

Organic synthesis
Polymer
Carbon control
Evaluation technology
Process engineering

Past
Kureha Corporation Business Report 2022

manufacture PVDF in this way, as it requires special

development of solid-state battery technology for next-

polymers. Due to the high quality of Kureha’s special

generation vehicles.

(Growth driver)
Environmental

Proprietary technologies
cultivated sincecompany founding

anticipate the needs of the times and support thepolymers and solid track record, our PVDF is widely used in

Required technology and values⃝O utsourcing

11

Connecting present
and future

Furthermore, as a pioneer of LiB binders, we willthrough a special form of polymerization. Few companies

Data Sectionsuspension polymerization, which enables high functionality⃝ Open innovation

To meet growing demand for in-vehicle LiBs, Kureha isexhibits high adhesive performance even in a small amountFoundation for Value
Creation

friendly, with half being either BEVs*1 and FCVs*2.

Growth Strategy

The global momentum toward carbon-neutral societies is in

Value provided
by Kureha’s current
technologies

Present

EnergyLife science

Electronics

Mobility

and more…

Used as a binder material for in-vehicle lithium-ion batteries

Resolution ofsocial issues

FuturePVDF

Kureha holds around a 40% share of the worldwide market
for automotive PVDF binders.
Kureha Corporation Business Report 202212

Growth Strategy

Medium-Term Management Plan

Priority Measures and Quantitative Targets for Fiscal 2022

Progress on“Kureha’s Challenge 2022”

Priority Measures in Fiscal 2022
Key priorities

management plan “Kureha’s Challenge 2022” (the final stage of theKureha’s Challenge Extension Plan), a two-year extension, to complete
unfinished tasks and examine the Kureha Group’s future vision and action
plan from a medium- to long-term perspective toward 2030. We will present
Kureha’s efforts to achieve our vision of what Kureha wants to be.

(Basic Stance)
plan, we will also set specific goals and action plans toachieve sustainable growth into the future.

The top priority during the final stage of the Kureha’s
Challenge extension plan is to enhance a corporate culture of“following through” while communicating our commitmentoriented stance to stakeholders.

②    Establishing the future vision of the Kureha Groupand formulating an action plan from a medium tolong-term perspective

Action(following through)Heading
towards adesirable future

Improvement ofcompetitivenessand profitabilityof existing
businesses

・Appropriate price pass-through in response to rising prices for raw materials and fuels
・Increase productivity and reduce costs of NEW Krewrap, strengthen PVDC film
business expansion in Asia and restructure multilayer film business・Strengthen profitability of agrochemical business and promote development of new
agrochemicals

Expansion andStrengthening ofAdvanced Materials businesses

・Emphasize development themes in line with the identification of market needs andpromote market-oriented development
・Collaborate and co-create with startup companies to explore innovative technologies
and create new businesses

Explorationof new businesses andtechnologies

・Set new GHG reduction goals and specific measures by 2030
・Accelerate technology development to create technologies and businesses that
contribute to the global environment

Strengthening
measures forcarbon neutrality and zero
emissions・Enhance sustainability management and risk management, and examine various
measures to increase corporate value
・Disseminate and retain the new personnel system, and accelerate the autonomous
development of human resources and the use of external human resources
・Introduce new core systems and promote KDX (Kureha’s Digital Transformation)

Fiscal 2022 Quantitative Plan (Revised Annual Forecast on November 9, 2022)
Quantitative targets

FY2021 results

Action plan
to fulfill our
future vision

Food shortages
Globalizationand polluted
waterand diversity
resources Accelerating
Globaltransition to
population
Increasing
zero waste
geopolitical growth & aging Climate
societysocietyconflicts
change(trade wars)
Changing
individual
Carbonlife styles neutrality
Digitalization
Kureha’s
and social
network Improved living
Challenge
standards andMarineadvanced2022
plastic
medical carepollution

13

Kureha Corporation Business Report 2022

Backcasting

Kureha aspires to become a highvalue-added enterprise that develops differentiated products in thefield of specialty chemicals andcontinually contributes to society
Areas we can offer solutions to:・Mobility market: lightweight, high performance and low carbon solutions
・Materials to reduce environmental load
・Carbon neutrality
・Zero emission
・Sustainable food production
・Food loss reduction
・Chemical recycling

Environment
・Commit to achieving four management goals
・Achieve quantitative goals set ona year-by-year basis reflecting theimpact of COVID-19

EnergyFY2022 forcast(Announced Nov. 9)

FY2022 plan
(Announced May 12)

Revenue (Billions of yen)

1,683

1,900

1,800

Operating profit (Billions of yen)
Operating margin (%)

201
12.0

270
14.2

220
12.2

Profit attributable to the owners of parent(Billions of yen)

142

200

160

725.73

1,024.72

819.79ROE (%)

7.4

9.6

7.8

Annual dividend (Yen/share)

210

250

250

Payout ratio (%)

28.9

24.4

30.5

Earnings per share (Yen)

データセクション

Given that the impact of COVID-19 on the domestic and overseas economies remains unclear, the plan outlines quantitative targets
to be achieved on a year-by-year basis. In addition, on November 9, 2022, we raised our annual earnings forecast.

While “following through” the resolution of existing issues
during the final stage of the Kureha’s Challenge extension

Environment & Social Trends

価値創造の基盤① Instilling a “follow through” attitude in our corporate
culture・Establish a system to increase production and accelerate development of newgrades in response to growing demand for PVDF binders
・Reduce the cost of processed polyglycolic acid (PGA) products and complete
improved PGA flack plugs for cold and ultra-cold regions

成長戦略

Summary of the Medium-Term Management Plan: Kureha’s Challenge 2022
(the Final Stage of Kureha’s Challenge Extension Plan)

Expansion andStrengthening ofAdvanced Materials businesses

クレハグループの価値創造

In the fiscal year ended March 31, 2021, we formulated the medium-term

Priority measures

Life

Kureha Corporation Business Report 2022

14

Growth Strategy

Review of Operations
機能製品事業
Advanced Materials

機能製品事業Specialty Chemicals
Fiscal 2021 Results

Fiscal 2021 Results
Revenue in the agrochemicals and pharmaceuticals category rose as

used as a binder material for lithium-ion secondary batteries (LiBs)

sales of agricultural and horticultural fungicides were flat year on year

increased, as did sales of polyphenylene sulfide (PPS), processed

while sales of Kremezin (therapeutic agent for chronic renal failure) in-

polyglycolic acid (PGA) products used in the process of shale oil and gas

creased. Operating profit, however, decreased year on year due tofracking, and other plastic products. Segment revenue and operating

soaring costs for fuel and raw materials. While revenue in the industrial

profit both increased in the fiscal year ended March 31, 2022, despite

chemicals category rose amid higher sales of organic chemicals, operat-

effects from suspending production at a PGA resin manufacturing

ing losses decreased year on year. Consequently, revenue in the Specialty

subsidiary in the U.S. Revenue and operating profit in the carbon

Chemicals segment was ¥26.16 billion (up 11.1% year on year), andproducts category also rose, amid increased sales of heat insulating

operating profit was ¥1.43 billion (down 35.7% year on year).

Kureha Group
Value Creation

In the advanced plastics category, sales of polyvinylidene fluoride (PVDF)

materials for high-temperature furnaces and carbon fiber used in sliding
materials for automotive parts. As a result, revenue in the Advanced

Fiscal 2022 Forecast

Materials segment was ¥66.69 billion (up 50.0% year on year), andoperating profit was ¥9.95 billion (up 186.6% year on year).

(Billions of yen)(Billions of yen)

16

100

(Billions of yen)

Fiscal 2022 Forecast

Kureha expects to see higher sales in agrochemicals on the back of strong

Revenue / Operating Profit

overseas demand, but sales in pharmaceuticals are expected to decline due(Billions of yen)

3.2

32

Kureha expects to experience strong demand for PVDF used as a75

12binder material for LiBs and see increased sales due to the sales price8

50

expansion of production facilities is expected to support meeting this

24

2.4

1.6

16

Challenges and Strategies

the recovery of shale oil and gas production takes place in the U.S. As a8

0.8

cals is underway, with requisite safety evaluations being performed forresult, we forecast revenue of ¥87.5 billion and operating profit of ¥15
0

FY2020(Results)

FY2021(Results)

FY2022(Forecast)■ Advanced plastics ■ Carbon products ■ Other
Operating profit (Right scale)0billion for the Advanced Materials segment.

Challenges and Strategies
The Company is striving to expand and enhance the highly advanced

In agrochemicals, the advancement of new next-generation agrochemi-

0

FY2020(Results)■ Agrochemicals

FY2021(Results)

FY2022(Forecast)0■ Pharmaceuticals■ industrial chemicals ■ Other
Operating profit (Right scale)prospective registration. Due to the significant surge in raw material costs

Foundation for
Value Creation

4

Consequently, we predict revenue of ¥29 billion and operating profit of ¥1.5
billion for the Specialty Chemicals segment.

demand. Sales of processed PGA products are expected to increase as
25

remain unchanged from the previous fiscal year. An increase in raw material
and fuel costs is expected for both agrochemicals and industrial chemicals.

adjustments reflecting the rise in raw material prices. Demand for PPS,
especially for automotive applications, continues to be strong, and theto the revision of drug prices. Sales of industrial chemicals are expected to

Growth Strategy

Revenue / Operating Profit

over the previous fiscal year, we will endeavor to pass on the cost hike tousers. Our premier industrial chemicals, caustic soda and hydrochloric
acid, are produced at the Iwaki Factory utilizing coal-fired power generation through electrolysis. However, due to geopolitical risk-driven coalprice hikes, there has been a sharp increase in raw material and fuelforth effort to enhance the production capacity of PVDF, which is experi-

costs that we will work to address through proper cost pass-through.

encing an upsurge in demand for LiBs. Moreover, we will endeavor topromote the creation of PGA flange plugs for ultra-low temperature oil

Data Section

materials businesses as a driving force behind growth. We are putting

wells, which will contribute to the growth of the market, and escalate
sales of PGA flange plugs for existing medium- and high-temperature oilwells with a full bore (for the entire oil well) to bring the processed PGA
product business into the black. We anticipate a profit of ¥15 billion.

Key products• Agricultural and horticulture fungicide
Metconazole and Ipconazole• Therapeutic agent for chronic 		

Key products• Polyphenylene sulfide (PPS)• Polyvinylidene fluoride (PVDF)• Polyglycolic acid (PGA)• Carbon fibers• Other advanced plastics products
15

Kureha Corporation Business Report 2022

renal failure

Polyvinylidene fluoride (PVDF)

Polyphenylene sulfide (PPS)PVDF is a super engineering plastic
with an excellent balance of chemical
resistance and moldability, used insuch fields as electronic materials andwater treatment membranes.

Kureha’s PPS has excellent mechanicalstrength, heat resistance, chemical resistanceand flame resistance, and is highly regarded
worldwide as a super engineering plastic.

• Caustic soda
• Hydrochloric acid• Sodium hypochlorite• Chlorobenzene

Metconazole•Agriculture and horticulture fungicide

Ipconazole•Agricultural and horticultural seed treatment fungicide

Kureha Corporation Business Report 2022

16

Growth Strategy

Review of Operations

機能製品事業Specialty Plastics

機能製品事業
Construction and Other Operations
Fiscal 2021 Results

Fiscal 2021 Results
In the Construction segment, a reduction in private- and public-sector

category as sales of New Krewrap plastic wrap for household use andconstruction projects drove declines in revenue and operating profit. In

Seaguar fluorocarbon fishing lines increased. In the packaging materials

the environmental engineering category, despite treatment volumes for

category, revenue and operating profit both increased, as robust sales of

low-level PCB and other industrial wastes were level with the previous

polyvinylidene chloride (PVDC) film in Asia markets led to profit growth,year, both revenue and operating profit fell due to the completion ofwhile stronger sales of heat shrink multilayer film in Europe resulted indisaster waste treatment projects, which was the case in the same period

operating losses narrowing. Accordingly, revenue in the Specialty Plasticsof the previous year. In the logistics category, revenue and operating profit

segment was ¥44.77 billion (up 5.7% year on year), and operating profit

both remained at prior-year levels. In the hospital operations category,was ¥9.86 billion (up 27.9% year on year).

revenue and operating losses were level with the previous year. Conse-

Kureha Group
Value Creation

Both revenue and operating profit increased in the consumer goods

quently, the Construction segment and Other Operations posted revenueof ¥30.72 billion (down 10.2% year on year) and operating profit of ¥4.06

Fiscal 2022 Forecast(Billions of yen)

to lower stay-at-home consumption and higher raw material and fuel(Billions of yen)

1248

billion (down 25.5% year on year).

Revenue / Operating Profit

prices. Sales of fishing line Seaguar are expected to remain flat from the(Billions of yen)previous fiscal year. Sales of commercial food packaging materials are

40(Billions of yen)8

expected to increase as a result of sales price adjustments to reflect
36

9higher raw material prices in the European market. As a result, we

30

6

12

3

Specialty Plastics segment.

Challenges and Strategies

in private capital expenditures. In Other Operations, processing unit costs
will decline due to increased competition in the environmental engineering

20

4

10

2

category. Accordingly, we project revenue of ¥28.5 billion and operating profit of ¥3 billion for the Construction segment and Other
Operations combined.

The Japanese household wrap market has grown due to the special
0

FY2020(Results)

FY2021(Results)

FY2022(Forecast)0■ Household products ■ Fishing line
■ Commercial food packaging materials ■ Other
Operating profit (Right scale)demand for stay-at-home consumption. We are committed to ensuring
stable production of NEW Krewrap and providing adequate supply. The
heat-shrinkable multilayer film Krehalon ML relies on a number of raw
plastic sourced from external suppliers, and ensuring appropriate pricing is

0

FY2020(Results)

FY2021(Results)

FY2022(Forecast)■ Construction ■ Environment / Others
Operating profit (Right scale)

0

Challenges and Strategies

Foundation for
Value Creation

6

In the Construction segment, Kureha expects to see intensified competition due to a decline in large-scale public works projects and a decrease

forecast revenue of ¥45 billion and operating profit of ¥7.5 billion for the24

Fiscal 2022 Forecast

Growth Strategy

Kureha expects to experience reduced sales of household products due

Revenue / Operating Profit

Revenue and operating profit in the Construction segment and Other
Operations have declined since peaking in fiscal 2020, which benefited
from a one-time opportunity caused by the typhoon disaster in fiscal 2019.
With the progression of global inflation, there are worries about increasing

focused on developing eco-friendly and recyclable products that reduce

fuel and material prices, and the Group companies are striving to establish

our impact on the environment.

a sustainable revenue base.

Data Sectiona challenge. In preparation for a shift towards a circular economy, we are

Key products•Household wrap film NEW Krewrap•Kitchen utensils Kichinto-San series•Fuorocarbon fishing line Seaguar•Polyvinylidene chloride (PVDC) film

NEW Krewrap•Home-use wrap film

Key busines groups

Krehalon•Heat- shrinkable multilayer film
Krehalon ML

Seaguar•Fishing lines

17

Kureha Corporation Business Report 2022

• Kureha construction group• Kureha environmental group• Kureha transport proup• Kureha service group• Kureha-kai Medical Corporation

Kurehanishiki Construction Co., Ltd.
FY2020 construction results: Wood pellet and PKS
storage facility for AWEP Onahama Biomass Power
Generation Project

Himeyuri Sogyo Co., Ltd.
(Industrial waste final disposal plant)

Kureha Corporation Business Report 202218

Growth Strategy

Special Feature             Researchand Development
Growth Strategy

Accelerating Kureha’s R&D throughEnhanced Collaboration

Specialty Plastics

Kureha’s R&D is aimed at providing solutions beneficial to the global environmentor our daily lives, such as for marine plastics and CO2 reduction, with focus on“Environment, Energy, Life Sciences, Electronics, Mobility, etc.” These have been
set as areas for our priority R&D where their social contribution is large and where
the strength of the Company’s technology can be utilized. In our two researchlaboratories, the Central Research Center and the Polymer Processing ResearchLaboratories, and at the Safety Research Center, we are working to increase thespeed of our R&D by strengthening coordination among related business divisions,related manufacturing and engineering related divisions, as well as the groupproduction companies, to maintain and improve the continuous profitability ofexisting businesses and for the creation of new businesses and products.

technical developments to comply with the sanitation laws of each country. In addition, for

For Kurehalon (vinylidene chloride) films, we have constantly listened to the needs of ourcustomers and have worked for stable production and quality improvements, together with
Kurehalon ML (heat-shrinking multi-layer films), we are deploying differentiation ofand developing new grades. Furthermore, we are actively providing technical support to ourcustomers, both in Japan and abroad, for global deployment.

Kurehalon

Kureha Group
Value Creation

performance and functions, coordinating with related divisions both domestic and overseas,
Central Research Center / Safety
Research Center

New Business Creation Projects
Kureha established its New Business Creation Project back in April 2016. We have stationed a representative to Kureha America
Inc. from April 2019 in the search for start-ups that can achieve a Value Fit with Kureha Group’s resources and businesses. We
have conducted reviews of over 5,000 start-ups, mainly focused on hard technologies, and have interviewed more than 150 ofthem. From 2020, we have closed investment and joint development contracts that have been externally announced with four

Priority R&D Areas (Businesses and Products)

companies. The priority is in the fields of environment, energy, and sensors. An introduction of two companies under this programis provided herein.

Growth Strategy

Polymer Processing ResearchLaboratories

Advanced Materials
For KF Polymers (polyvinylidene fluoride resins [PVDF]) and Fortron KPS (polyphenylene

Wootz, Inc.

stable production, aiming at innovative cost reduction. For KF polymers, we are promoting theClaros Technologies, Inc.

development of high-performance grades focused on binders for large-capacity Lithium-ion
secondary batteries to be installed in hybrid electric vehicles (HEVs) and electric vehicles (EVs)in order to maintain our share through the proposing of solutions to our customers. We havealso started on development of grades to respond to production in our new base in China,

KF Polymers

which is expected to come on-stream in 2024.

Claros Technologies, Inc. holds a technology to generate

researcher at Rice University, the United States, a leader innano particles in various substrates through a technicalwill promote differentiation in performance and functions capturing the market needs, as wellcarbon nanotube research, in 2018. The company holds alicense granted from the University of Minnesota, and is

unique technology of processing high-quality carbon

developing next generation sustainable functional fibers andnanotubes into formed shapes such as films and fibers.

adsorbents to remove harmful substances in water purifica-

Development is being conducted for high value-added

tion applications. Although perfluoroalkyl compounds,

usage such as electronic textiles and sensors. We arepolyfluoroalkyl compounds and their salts (PFAS) are widely

jointly developing high-functional touch sensors andused in various industries, they are highly toxic and do notelectronic devices by combining Kureha’s piezo films withdecompose naturally. It is a chemical that remains easily in

Wootz’s carbon nanotubes. We aim to establish a tech-

our environment. Clarosorb PFAS® adsorbent developed bynical package to act as its base, and then target produc-

Claros efficiently captures PFAS in water to create safer

tion after conducting reviews on methods for mass pro-water. In addition to Claros Technologies, Inc. in possession

duction. By accelerating joint development, we seek toof sophisticated analytical capabilities, it is in the process ofcontribute to the solving of social issues such as digitiza-

developing a technology to convert PFAS into safe by-prod-tion and carbon neutrality, and to enrich people’s lives,ucts, such as fluorine and carbon dioxide, and by combining

while expanding our new business portfolio.

these technologies, aim to establish a PFAS cleansing

as the development of new grades. Especially for the PGA business, in addition to frac plugs
for shale oil and gas drilling using our own PGA materials, we are accelerating thedevelopment of high-performance grades for ultra-low temperature cracking, whose market
is expected to grow.
PGA

Specialty Chemicals
In the field of agrochemicals, we are working to maintain and expand the sales of
Metconazole, an agricultural and horticultural fungicide and Ipconazole, an agricultural andhorticultural seed treatment fungicide. Optimization of the manufacturing systems areunderway aimed at cost reduction of both agents. In the search for next generation
agrochemicals, we are making sturdy progress for raising the stage of development onprospective candidate agents found in our basic research stage.
expand our profitability through the introduction of fast disintegrating Kremezin tablets for

Metconazole

Data Section

Wootz, Inc., is an early-stage start-up founded by a former

For polyglycolic acid (PGA) and Kureha Microsphere (heat-expandable microcapsules), we

In the field of pharmaceuticals, we are promoting supportive research to maintain andFoundation for
Value Creation

sulfide [PPS]), we are promoting R&D and process development for increased productivity andeco-system, including analysis, removal, and destruction.

chronic renal failure. Furthermore, we aim to create unique pharmaceutical materials that will
differentiate ours from existing treatments and products through our basic evaluation research.

19

Kureha Corporation Business Report 2022

Kureha Corporation Business Report 2022

20

Growth Strategy

Special Feature             Digital
Transformation (DX)

—Digital Transformation of Kureha—

Manufacturing, Value Chains, and Mobility

Kureha has established the Digitization Promotion Project in the Planning HQ, and is in the process of promoting

Kureha generates its economic, environmental, and social value through the business of manufacturing advanced materials, specialty

initiatives to increase corporate value by introduction of digital technologies, such as AI and IoT and the utilization ofchemicals and specialty plastics, and its supply chain is separated, by and large, into product development, manufacturing, procurement,

data. The term Digital Transformation (DX) refers to corporate transformation through digital means. In this section
we will introduce KDX, the digital transformation of Kureha.

and sales. In this value chain, digitizing the information, the analysis of data turned assets, creation of new values (technology) as fast as
possible based on the issues of our customers and society using the speed and extensibility afforded by digital technology, and to manufacture, propose and deliver them as products and services to our customers, is the most representative of the “mobility” of Kureha.

Generally speaking, “going digital” can be separated into digitization and digitalization. Kureha aims to improve not only is business
Product
planning

digitization.

Engineering chain
management(product development)

Digital Transformation (DX)
Digitization

From analog to digital&

Seamless data environment

Product
designReflect customer needs (behavioraldata) swiftly to planning and design[Customer management system, etc.]

SCM

SHARE

Achieve product development
matching customer needs

Manufacturing
designSupply chain
management

Production
start-up

Car sharing

RENTALOrder
receipt

VIDEO
DVD

Plan

Procurement

Production
control

Manufacturing

Logistics

MarketingAfter the sales
service

Rental video/DVD

On-demand video
distribution service

Utilize data and digital technology to create added
value to the company’s products and services

Achieve operations through optimum
procurement, manufacturing, and inventory
to match the demand

Operation monitoring and control

In recent years, Japan and the world are facing a time of great change to the environment, society, and the economic system.

[Integrated operation information
management system, etc.]

Manufacturing
operations

Smart factory

Achieve autonomous stable operations.
Optimization of facility utilization and quality,
condition based maintenance (CBM), flexible
manpower line, maximization of energy efficiency, minimization of environmental load, etc.

Foundation for
Value Creation

Seamless data environment, reflect customer needs (behavioral data) swiftly onto the supply chain [New backbone system, etc.]

Digitization

Growth Strategy

Electronic books

By utilizing digital technology,
link it to business streamlining
and cost reduction

Determine
specifications

Prototyping,evaluation

ebook

Paper books

ECM

Digitalization

Car ownership

Kureha Group
Value Creation

efficiency by reforming business through the utilization of digitized data, but also link it to improving added value in its promotion of

Corporate management is facing the aging of its employees and reduction in work force, as an aging society with fewer children continues
stemming from rising geopolitical risks.

What is  ?

The ability to address both the company’s sustainability (strength to earn) and society’s sustainability (solving social issues) simultaneously is now
required for all corporate entities. Kureha aims to address these issues by increasing its mobility by active use of data and digital technology.
This approach has been named “KDX,” the Digital Transformation of Kureha,” and is defined as follows:

Data Section

to progress. We must also actively establish measures against climate change, such as global warming and threats to supply chains

Data Driven Decision Making is the Goal
Ingenuity of each individual and wisdom based on experience, the basic skills to utilize the data, and various IT tools have been positioned
as the 3 important elements in promoting and achieving KDX. Efforts are underway to improve basic skills and the active introduction of IT
tools aimed at nurturing human resources.
Kureha, as a company driven by innovation, will seek the development of differentiated products in the field of specialty chemicals andbecome a high value-added corporate entity that will continue to contribute to society as its management target. Kureha aims to evolve its
sustainability management based on data driven decision making into the future.

Utilize顧客や社会の課題に対するベス
data and digital technology to provide
thebest solutions
as fast as possible to our customers and for social issues,
ト・ソリ
ューショ
ンを最速で提供するために、データとデジタル技術を活用し、
and acquire “Competitive
superiority based on people and technology” worthy of Kureha,
クレハに相応しい『人と技術に根差した競争優位性』を獲得し、当社と社会のサステナビリティ
を同時に実現するand simultaneously
achieve sustainability of boththe company and society.

We have stressed “Competitive superiority based on people and technology” because People and Technology are identities cherishedby Kureha, and that itself is “Kureha.”

21

Kureha Corporation Business Report 2022

[Elements supporting KDX]

Data driven decision makingA) Wisdom based on ingenuity of eachindividual and experience ( ≈ sense)B) Basic skills to utilize data (IT, statisticalanalysis, understanding of business, etc.)⇒ Competitive instinct nurtured through strong
sentiment and business experience towards
the establishment of an ideal image⇒ Operational design to gather and utilize data,capability to obtain suggestions fromacquired information, and analysis resultsC) Various IT tools(ERP, PIMS, database, etc.)⇒ Gather, analyze, and accumulate data thatform the basis of various activities

Kureha Corporation Business Report 2022

22

Foundation for Value Creation

Carbon Neutral ProjectE

In October 2021, the Carbon Neutral Project was established as a group-wide project under the direct control of the President toEnvironmental Initiatives

developing technologies with the aim of raising our reduction targets and achieving carbon neutrality before our goal of 2050. In

oversee and promote the Group’s efforts to achieve carbon neutrality by 2050. Specifically, we are studying new measures andcycle assessment (LCA) for each product and developing strategies and promoting the Group’s climate change initiatives.

Kureha recognizes that the importance of reducing its environmental impact asa crucial aspect of its management and is implementing various initiatives to achieve this end.
This article outlines our efforts to mitigate climate change issue.

Kureha Group
Value Creation

response to requests from society and our customers, we are also responsible for developing a framework for implementing life

Endorsement of TCFD Recommendations andAssociated Disclosure of Information

The Paris Agreement was concluded as a world-wide measure to combat climate change, and Japan, along with many otherdeveloped countries, has declared the goal of carbon neutrality* by 2050 and is actively promoting measures and technologicalinnovations necessary to reduce greenhouse gas (GHG) emissions. Fighting climate change and achieving carbon neutrality is oneof the most important issues for the Kureha Group, toward which we will make continuous efforts to actively reduce greenhouse gas
emissions and rationalize energy use related to our business activities throughout the Group, with the following objectives.

evaluation of climate-related risks, opportunities, and responses for the Group’s major businesses using multiple climate scenarios,
identified key issues, and compiled the results in line with the TCFD recommended disclosure framework (governance, strategy, risk
management, and metrics and targets), which is available on the CSR section of the Company’s website. We will continue toenhance the disclosure of climate change-related information and contribute to the realization of a sustainable society while
promoting measures to achieve carbon neutrality.

should reach net zero.

WEB

https://www.kureha.co.jp/en/csr/environment/climate_change.html* TCFD recommendations: At the request of G20 countries, the Financial Stability Board (FSB) established the Task Force on Climate-related Financial

Foundation for
Value Creation* Carbon neutrality: bringing the balance of greenhouse gas emissions overall to zero. In other words, by subtracting absorption/removal from emission, we

Kureha endorsed the TCFD recommendations* on April 20, 2022. Furthermore, the Company conducted a qualitative analysis and

Growth Strategy

Initiatives for Climate Change Mitigation

Disclosures (TCFD) to examine how climate-related disclosure should be conducted and how financial institutions should respond. Having released its final

Kureha Group’s CO2 Emission Reduction Target

report in June 2017, the TCFD recommends that corporations and other entities disclose information on governance, strategy, risk management, and metrics
and targets related to the risks entailed in and opportunities provided by climate change.

In fiscal 2020, we conducted an informational survey on energy use and CO2 emissions for the entire Group, our energy demand

climate change mitigation. We have formulated the following CO2 emission reduction target for fiscal 2030 based on that survey.

“The Kureha Group’s CO2 emissions from energy
use* should be reduced in phases to a total of 376
thousand tons, a 20% reduction from fiscal 2013,

CO2 Emission Volume（1,000 t-CO2/year）
600

by fiscal 2030.”

400* CO2 emissions from energy use: Carbon dioxide produced

200

when fossil fuels are used as an energy source, including
power generation, transportation, and industrial andresidential heating

Current target: 20% reduction from FY2013 level(Established in FY2020)

Kureha Corporation Business Report 2022

Fukushima Prefecture is implementing the Fukushima Protocol, a program in which the governor and local companies exchangesuch as conserving resources and energy. Our Iwaki Factory signed the agreement and has been working to combat global
warming under the protocol. As a result of these efforts, we received the highest award of the Fukushima Protocol (Advanced

0

Edition) on February 14, 2022. This advanced edition is a more in-depth course than the previous one and aims to further
promote global warming mitigation measures in Fukushima Prefecture by publicizing efforts.
FY2013(Results)

FY2030(Target)New target

the main power source at other Kureha offices and Group companies, and promote high-efficiency when replacing equipment and23

Wins the Highest Award in 2021 Fukushima Protocol Project Awards

agreements on reduction targets such as CO2 emissions, to encourage companies to take measures to combat global warming,

To achieve this target, we will curb the operation of the coal-fired power plant at the Iwaki Factory, switch to renewable energy as

various energy-saving activities in accordance with the plan.

TOPIC

Data Section

forecasts, the circumstances of the countries and regions where each Group company is located, and various countermeasures for

In addition to reducing CO2 emissions compared to the previous fiscal year, we have
implemented a wide range of environmental contribution activities, such as recycling coal ash andother waste, recycling waste paper, and participating in volunteer cleaning, as well as disclosing thisinformation appropriately.

"Ecotan," a character ofFukushima Prefecture’s global
environmental protection

Kureha Corporation Business Report 2022

24

Foundation for Value Creation

S

Human Capital Development and Self-Directed Career Development Support

Kureha aims to enhance its presence as an innovation-driven company andbecome a high-value-added company that continues to create new value and contributes to society.
To achieve this, we focus on improving our human capital as a key management issue.

Even before the term “human capital” became widely used in
employees are an indispensable asset for the Company to conduct its business and sustainably increase its corporate value.
digital human capital, and young employees who can reliably
perform their expected roles and duties, as well as those whoof career, Kureha actively promotes various measures, including(OFF-JT)*2 programs at the workplace, as well as “self-directeddevelopment system” and “self-directed career development support” to promote employee growth.

career development support.” Under the new human capitalsystem, Kureha is working more than ever to strengthen its

Kureha’s Personnel System (Revised October 1, 2021)
Applicable employees (as of March 31, 2022): 1,663 (Kureha), 4,259 (consolidated)each and every employee so that they can continue to rise to
the challenge of achieving their lofty goals and actively participate in the pursuit of a brighter future.
Self-directed career development support is Kureha initiative

Strengthening performance-based human capital management:
Strengthening the system of role- and duty-based compensationand develop themselves into professionals who can take onhigher roles and perform their duties through self-directed andcontinuous learning. Based on employees’ career self-assess-We ensure that compensation is determined based on the roles, duties, and*1 On-the-job training (OJT): Employee training through daily operations*2 Off-the-job training (OFF-JT): Employee training through training conductedaway from daily operations

our human resource management, we will continue paying compensation to employees
based on their roles, duties, and performance after age 60 until age 65.

25

Self-directed career development

GrowthSpeed

Challenge

Continuously learn as
professionals and fulfill rolesand duties

Promptly collect information,
make decisions and act, andrespond to change

Take on new and difficult
challenges without beingcaught up in conventional
ideas and methods

Kureha Corporation Business Report 2022

Each employee

Professional humanresources⃝Self-directed andcontinuous learning⃝Higher role

Dialogue
Understand thecurrent state of
their skills

Alignment oforganization andindividual goal
settingLine manager
Understand the
purpose of the
new system

Self-directed careerdevelopment
supportRequired Mindset and Action● Self-Directed Career Development Concept (Based on a
Performance-Based Approach for All Employees）

Follow-up education by career and job type
Enrollment education

Supervisor improvement training(coaching edition)

Mentor*1 training
Thesis review training

Technology management training

PST (Practical Skills Training)
TOEIC and TECC
Online English conversation training
English e-mail writing training
Practical English Training Program
Online Chinese conversation training
Overseas study

Senior data analyst course
Digital human capital foundation training

e-Learning

Data Section

By ensuring alignment of compensation with roles, duties, and performance as the basis of

the careers they want.

Applicationbased Training

Senior employees playing active roles: Extending retirement age to 65

sions to encourage employees to take the initiative in building

Training for staff converted to planning anddevelopment positions

New product and business developmenttraining

Digitalperformance of each employee regardless of age, gender, andwhether an employee is a new graduate or a mid-career employee.

ments, line managers and employees conduct career discus-

Supervisor improvement training(evaluation edition)

Next-generation leader exchange training

Globalthat helps employees understand the current state of their skills

Newly appointed line manager training

Intermediate planning and developmenttraining

New employee introduction education

human capital development

Major Shift in the Concept of Human Capital Management

Executive employee advancement training

Foundation for
Value Creation＜ Concept ＞

support for the self-directed and continuous development ofRole action training
Senior planning and development training

Technology

on-the-job training (OJT)*1 and systematic off-the-job trainingby having a sense of challenge, speed, and growth. In addition to introducing the concept, we will also introduce a “human capital

Executive employee

Purposebased
training

each employee can independently and autonomously fulfill their roles and respond swiftly to changes in the business environment

General employee

Growth Strategy

will develop themselves in a self-directed manner with a sense
At Kureha, we introduced a new personnel system full scale in October 2021 with the aim to create a corporate culture in which

Hierarchy-based
training

In order to develop future executives, global human capital,

New Personnel System and Human Capital Development● Kureha’s Human Capital Development Systemsociety, Kureha used it internally based on the recognition that its

Kureha Group
Value Creation

Improving Human Capital

Distance education
Management edition
Seminars by in-house and outside instructors

Senior seminar*2
Career interview
Career awareness creation andcultivation training
Development plan

*1 A senior employee is assigned to each new employee. Their role extends
beyond just guiding their work, and they serve as a good sounding board
and provide guidance to the new employee.
*2 Senior seminars are for employees between the ages of 51 to 53 (FY2021).
WEB

https://www.kureha.co.jp/csr/social/staff/training.html

Kureha Corporation Business Report 2022

26

Foundation for Value Creation

General Meeting of Shareholders
Appoints

G
Based on the Corporate Governance Guidelines, Kureha strives to enhance management transparency,
secure relationships of trust with stakeholders, and fulfill its corporate social responsibility and achieve sustainable growth.
We will also work to enhance the effectiveness of corporate governance in the Group.

Consultation

Board of Directors(Maximum of 10 directors, at least 1/3
of whom are outside directors)

LiaiseLiaiseand enhance the Group’s corporate value over the medium toparent management, and to enhance the effectiveness oflong term.

Internal Control and
Auditing Department

Information Management
Committee

Audit

Information Disclosure Committee
Information Security Committee

All divisions ofKureha Corporation

corporate governance based on the Corporate Governance

Audit

Growth Strategy

Executive
Committee

Energy Management Committee

the implementation of compliance, to conduct fair and trans-

Independent
AuditorPresident &Chief Executive Officer

CSR Committee

Guidelines. In this way, we aim to achieve sustainable growth

LiaiseLiaiseCompliance Committee

Kureha aims to enhance its internal control functions, including

Audit & Supervisory Board(Maximum of 4 members,
including 2 or more
external members)

Audit

Sustainability Committee

Trade Control (Export/Import) Committee
Personal Information Protection Committee

Basic Policy on Corporate GovernanceAppoints

Kureha Group
Value Creation

Enhancing Governance System

Nomination Advisory
Committee
Remuneration Advisory
Committee(Non-mandatory)

Appoints

Audit

Risk Management Committee

Internal Control ofFinancial Reporting Committee

Foundation for
Value Creation

Corporate Governance Structure

Kureha Group companies

To strengthen corporate governance and expedite decision-making and business execution in the Group’s management, we will
clarify management oversight and execution responsibilities.

Note: On April 1, 2022, the Labeling and Trade Promotions Committee and Antitrust Committee, which were subcommittees of the Compliance Committee,■ Audit & Supervisory Board

The Board of Directors, which is limited to a maximum of 10

The Audit & Supervisory Board consists of four or fewer Audit

directors, of whom at least one-third are independent outside& Supervisory Board members, including two or more inde-

directors, makes decisions on important management matterspendent outside Audit & Supervisory Board members, andand oversees the conduct of business. The Company places

has appropriate knowledge of finance and accounting. The

the highest value on corporate management experience when

Audit & Supervisory Board members monitor the deliberation

appointing directors. By combining different specialties andprocesses of board’s resolutions and reports and audit thebackgrounds, the Company comprehensively considers theexecution of duties. In addition, Audit & Supervisory Board

balance of knowledge, skills and experience of the Board as amembers exchange opinions with the independent auditor

whole and conducts the appointment of directors.

and the Internal Control and Auditing Department regarding
audit plans and the status of audits to ensure mutual■ Executive Committee

cooperation.

The Executive Committee, which consists of the President &27

CEO and executive officers as key members, deliberates on■ Independent Auditor

the Company’s important management issues. The consoli-

Kureha has appointed Ernst & Young ShinNihon LLC as its

dated Executive Committee also exchanges views on

independent auditor and has been subjected to fair andmanagement policies and business strategies to strengthen

impartial accounting audits by properly providing manage-

consolidated management.

ment information.

Kureha Corporation Business Report 2022

were abolished. On April 1, 2022, the Company established the Sustainability Committee as a subsidiary of the Board of Directors to comprehensively
supervise and monitor sustainability promotion activities.

■ Internal Control and Auditing Department■ Remuneration Advisory Committee (Non-mandatory)

The Internal Control and Auditing Department, which acts

The Remuneration Advisory Committee deliberates on

independently of other departments, assesses and verifies

matters related to the system and policies regarding remu-

the suitability and effectiveness of internal management

neration for directors and executive officers and examines

control systems, makes suggestions and recommendations

the content of proposals to the Board of Directors.

Data Section■ Board of Directors

regarding improvements, and reports the results of audits to
the Board of Directors and others. By doing so, we ensure a■ Assessment of the Effectiveness of the Board of Directors

system that contributes to improving management efficiency

To enhance the functions of the Board of Directors, Kureha

and public trust in Kureha.

analyzes and assesses its effectiveness annually anddiscloses a summary of the results. In fiscal 2021, we■ Nomination Advisory Committee (Non-Mandatory)

conducted a questionnaire survey of all directors and Audit

The Nomination Advisory Committee deliberates on matters& Supervisory Board members on the “Assessment of theconcerning the appointment and dismissal of the chairperson,

Effectiveness of the Board of Directors” and conducted a

President & CEO, representative directors and directors, as

review based on the results of the assessment at thewell as candidates to succeed the President & CEO andregular meetings of the Board of Directors. Specifically, werelevant succession plans, and examines the content ofassessed (1) the composition of the Board of Directors, (2)proposals to the Board of Directors.

the management of the Board of Directors, (3) the agenda

Kureha Corporation Business Report 2022

28

Foundation for Value Creation

Enhancing Governance Systemof the Board of Directors, (4) a system of support for

management plan, the direction of the PGA business,external directors, the roles of Audit & Supervisory Board

sustainability issues, and human resource development.

Total Amount of Remuneration by Executive Officer Classification, Total Amount by Remuneration Type, and Number
of Eligible Executive Officers

members, and the expectations for Audit & Supervisory
Board members, and (5) the relationship with stakeholders.
As a result, we confirmed the proper implementation of all
items and the effectiveness of the Board of Directors as		a whole.
Although there are no specific issues to be improved

The information on Kureha’s corporate governance is alsopresented on the website.
WEB

https://www.kureha.co.jp/en/ir/pdf/20220627_CG%20
Report_en.pdf

deepen discussions on the new medium- to long-term

Total remuneration amount by type (million yen)
Total remuneration
Performance-basedNon-monetary(million yen)
Basic remuneration
remuneration
remuneration

Number of eligible
executive officers

Directors (excluding external
directors)

225

132

73

20

3

Audit & Supervisory Board members(excluding Outside Audit &Supervisory Board members)

18

18

—

—

1

Outside directors

30

30

—

—

2

Outside Audit & Supervisory Board
members

30

30

—

—

2

Kureha Group
Value Creationfrom the fiscal 2021 evaluation, in fiscal 2022 we will further■ Corporate Governance Report

Executive officerclassification

Internal Control System
As for internal control of financial reports to ensure their“Basic Policy on Internal Control Systems.” To ensure that

reliability, we have established basic rules and implement

the Group complies with laws and regulations and conducts

management’s assessment and certified public accountant’s

our business operations in an appropriate manner, we areauditing of the effectiveness of the internal control of finan-

working to establish various committees, develop internalcial reports, as stipulated in the Financial Instruments andrules, and respond to laws and regulations. We also review

Exchange Law. At the same time, under the responsibility ofthe performance of internal control systems every year and

the President & CEO, we publish Internal Control Reports.

publish a summary of the review in our Business Report.

Shareholding Status■ Criteria and Approach for Classification of Investment Shares
Kureha holds shares either for the purpose of pure investment

pure investment are held based on the assumption that theyor for purposes other than pure investment and classifies themwill contribute to current business as well as the sustainableaccording to this difference. The shares classified as shares forand medium to long-term enhancement of corporate value.

pure investment are held for the purpose of receiving profits

Kureha does not hold shares for the purpose of purefrom fluctuations in the value of shares or dividends from theinvestment.

shares. The shares classified as shares for purposes other thanand risks of holding the stock are commensurate with the cost ofshareholder-oriented management, remuneration in theableness of shareholdings, and details of verification ofcapital. We will reduce stocks that are deemed no longer neces-

directors and executive officers based on corporate perfor-

form of stock acquisition rights as stock options is paid

appropriateness of shareholdings for each stocksary in stages, taking into account a comprehensive range ofmance, while considering enhancement of medium to long-

within the total amount approved by the General Meeting

conducted by the Board of Directors

factors, including dialogue with business partners, the impact onterm corporate value, and in accordance with the remunera-of Shareholders.

Kureha holds the shares of its business partners if it is judged thatthe market, and whether capital is being used effectively.

The Company established a voluntary Remuneration

doing so will contribute to current business as well as the sustain-

In fiscal 2021, we decided to reduce 3 stocks based on the

responsibilities required of each executive for securing andAdvisory Committee on June 26, 2018. The voluntaryable and medium and long-term enhancement of corporate value.

results of the examination at the Board of Directors meeting held

maintaining appropriate human resources.

compensation committee is composed of three or more

The Board of Directors verifies the significance of holding shares foron May 18, and as of the end of March 2022 we held 52 stocks.

Cash remuneration reflecting performance indicators is paid

directors, the majority of whom are outside directors, and is

purposes other than pure investment by examining whether the(Sold all shares of one out of three stocks we held)

as a bonus to raise the awareness of directors to improve theirchaired by an outside director. The voluntary Remuneration

purpose of shareholdings is appropriate and whether the benefits

performance in each fiscal year. The performance indicator

Advisory Committee deliberates on matters related to theselected as the basis for calculating the amount of perfor-

policies of the remuneration structure and system for directors

mance-based remuneration is profit attributable to owners ofand executive officers and deliberates on matters to beparent for each fiscal year, and the reason for selecting thissubmitted to the Board of Directors. The Remuneration

performance indicator is that it reflects all operating results andAdvisory Committee met four times in the fiscal year under

represents the bottom line.

review to discuss the content of the compensation for

In order to incentivize directors to sustainably increase

Data Section

Policy on shareholdings, method for verifying the reasonThe Board of Directors determines the remuneration forFoundation for
Value Creation■ Investment Shares held for Purposes other than Pure Investment

Executive Remuneration

tion structure and levels appropriate to the roles and

Growth Strategy

The Board of Directors has adopted a resolution on theindividual directors.

the value of the Company and to raise their awareness of29

Kureha Corporation Business Report 2022

Kureha Corporation Business Report 2022

30

Foundation for Value Creation

Enhancing Governance System

Business and Other Risks

Risk Management
Under the supervision of the Risk Management Committee and in accordance with its basic policies, Kureha analyzes and evaluatesrisks that adversely affect the Company's management, considers and implements measures to address highly significant risks, andhas established a system to apply the Plan Do Check Action (PDCA) cycle to this process to promote risk management.

■ Basic Policy on Risk Management

The following are the principal risks that may have a material impact on our Group’s results of operations.
Forward-looking statements and risks contained herein are based on the Group’s judgment as of the date of filing of our 108th
annual securities report (June 24, 2022).

■ Changes in the Business Environment of the Individual Business Segments

Kureha manages risk based on the following basic policy.

Understand the risks to our management on a company-wide scale and prevent them from occurring,and take necessary preventive measures to reduce the impact of risks that
occur to an acceptable range.

pandemic, shifts in customers’ investment plans towards

Materials, consisting primarily of processed polyglycolic acidcarbon neutrality, and the status of the Company’s own(PGA) products, vinylidene fluoride (PVDF) anddevelopment of new products.

polyphenylene sulfide (PPS); Specialty Chemicals,binder for lithium-ion secondary batteries, but fluctuations inindustrial chemicals; Specialty Plastics, consisting primarily

raw material prices, geopolitical risks at major production sites,of household products and food packaging materials;

and the COVID-19 policies may affect business activities.

Construction, consisting primarily of construction andAccording to the classification of risks associated with busi-

under the direct control of the President, which is chaired byness activities, the CSR Committee, the Information Manage-

the top management.

ment Committee and the Compliance Committee, and related

The Risk Management Committee has established a risk

departments are in charge of each risk classified as the super-

management system to verify the implementation process andvising department, and promote risk management in coopera-

to prevent omissions and leaks of important risk recognition

tion with the departments actually involved with individual risks

from a company-wide (management) perspective.

carbon fibers for use in insulation for high-temperatureand logistics businesses. The Group’s business may be

furnaces. There is a possibility that business operations may beaffected by market and customer trends or increased

impacted by geopolitical risks at main production sites and thecompetition and other factors in the operating environment,

COVID-19 policies.

which may have a negative impact on the Group’s results.

The Advanced Materials business, including these

Each business division strives to identify signs of changes in

products, is mainly geared towards the automotive andthe business environment, discuss the changes in theelectrical/electronics industries, so changes in customer

business environment of each business division and the

production activities in these sectors may affect themeasures to be taken at the Management Committee andGroup’s business.

report to the Board of Directors and other relevant bodies■ Risk Management Implementation Process

on a regular basis.

Specialty Chemicals(1) Identify risks(4) Report and verify monitoring results

The supervising department identifies individual risks (in detail)The supervising department reports their monitoring results toincluding Japan, showed some signs of recovery as thebusinesses and there is a possibility of being affected byaccording to type, analyzes their level of importance, and rates

the Risk Management Committee, which then verifies thesevere impact of the COVID-19 pandemic began to ease.

declining demand due to domestic and global economic

them by priority of response.

results and gives further instructions back to the supervising

Although continued recovery is expected from economic

stagnation and market conditions.

(2) Analyze and rate risks

department accordingly.
The Risk Management Committee then reports theindividual risk analyses and ratings, and gives any necessary

fulfillment status of this process to the Executive Committee

instructions to the supervising department.

and Board of Directors. Information on the response to(3) Monitor the response to risks

major high-priority risks is disclosed in a timely and appro-

The supervising department monitors how the responsible

priate manner.

department responds to individual risks judged to be highpriority and gives further instructions accordingly.

and social activities that take measures to prevent theIndustrial chemicals: The target market has a wide range ofAgrochemicals: Due to the dependence on outsourced

spread of the disease, the outlook remains uncertain due to

production, there is a possibility of being affected by the

lingering effects of the pandemic, rising raw material andoperational risks of the outsourcing party.

fuel prices, semiconductor supply shortages, anddevelopments in Ukraine.
In light of these challenges, the Group will closelySpecialty Plastics

Data Section

The Risk Management Committee reviews the results ofDuring the fiscal year under review, the global economy,

Foundation for
Value Creation

all under the supervision of the Risk Management Committee

Carbon products: The Group manufactures and sells

engineering; and Other Operations, including environmental

Growth Strategy■ Risk Management System

PVDF: Demand for this material is growing for use as aconsisting primarily of pharmaceuticals, agrochemicals andKureha Group
Value Creation

Basic Policy on Risk Management

The Group’s business segments are as follows: Advanced

Commercial food packaging materials business: The main

monitor the impact on its business operations andcustomers are located primarily in Europe. Sales may be

implement appropriate measures such as ensuring aaffected by trends in production and distribution activities

healthy and safe working environment and providing

related to commercial meat processing in the region and by

appropriate product prices.

the impact of economic sanctions against Russia due to thesituation in Ukraine.

Advanced Materials
PGA products: Business activities may be affected byConstruction and Other Operations

changes in the operating performance of major customers

Construction business: The business may be impacted by ain the U.S. shale oil and natural gas drilling industry as adecline in private construction projects due to stagnant domestic

result of changes in crude oil and natural gas prices andeconomic activity.

demand due to the economic recovery from the COVID-19

31

Kureha Corporation Business Report 2022

Kureha Corporation Business Report 2022

32

Foundation for Value Creation

Enhancing Governance System

respond to the disease, a decrease in the number of patients■ Information Security Risk

visiting the hospital, and the difficulty in recruiting doctors andwaste treatment business.

nurses, which may result in increased costs for maintaining

The Group holds crucial information such as sales andGroup’s business results. To mitigate these risks, the Grouptechnology information related to business operations andhas established an Information Security Committee andpersonal information including customers. The Group

implemented a Basic Information Security Policy and Infor-

utilizes its core systems and plant control systems in its

mation Security Management Rules to strengthen its man-business operations, and is working to introduce digitalagement systems. To further reduce risks, the Group pro-

■ Market Conditions, Procurement of Raw Materials, Fuels, Etc.

technologies such as the Internet of Things (IoT) and artifi-

vides information security training to employees, monitors

The raw materials and fuels used by the Group are subject tofrom our suppliers. To mitigate these risks, we arecial intelligence (AI). A breach of this important information,compliance with information security measures, and regu-

market influences and may impact our business performance,

implementing strategies such as adjusting product prices toa large-scale failure of business systems, or an infection by

larly updates its system equipment, utilizing externalsuch as during price fluctuations. In addition, there is a risk thatreflect cost changes and expanding sales of high-value-added

cyber-attacks or computer viruses may potentially affect theresources as needed.

our ability to produce products using rare or foreign-sourced

products, as well as striving to diversify our suppliers.

Hospital business: The COVID-19 pandemic situation may

local healthcare.

have an impact on the hospital business, including the need to

raw materials may be impacted by supply and logistics issues■ Environmental Risk
performance and other factors may be affected. The Group isenvironmental impact of our operations in response tocontinuously working to reduce the environmental impact ofprocesses, and strives for continuous improvement. To

increasing concerns about climate change and a circular

its business activities and, through the CSR Committee,

products, it could impact the Group’s operating results. The

mitigate risk, the Group also has product liability (PL)economy. However, if new environmental regulations arecollects environmental information, monitors regulations andGroup employs a quality management system to identify andinsurance in place.

introduced or if our business activities have a significant

works with business, production and R&D divisions toaddress risks related to its products and manufacturing

negative impact on the environment, the Group’s businessdevelop countermeasures and reduce risks.

■ Overseas Business Development Risks■ Compliance Risk

In the event of a significant quality issue with the Group’s

statements of overseas Group companies and foreign

The Group has established the Kureha Group Ethics Charter,

domestic and international laws and regulations, it may notaffected by unforeseen circumstances such as deterioration

currency transactions, which may affect the Group’s operating

Compliance Code of Conduct, and Compliance Regulations,be possible to completely avoid compliance risks. In thein political, economic, and social conditions, changes in laws

results. The Group makes efforts to gather information on

and strives to thoroughly understand and comply with laws,

event of a conflict with laws and regulations, the Group’s

and regulations, and natural disasters in the countries andoverseas developments and employs measures such as

regulations, and social norms through education and training

business performance may be adversely affected, including a

regions where it operates. In addition, fluctuations in foreignforward exchange contracts to reduce the risks associatedat each Group company. However, due to the diversity of theloss of public credibility and brand image and the potential

exchange rates may affect the conversion of financial

with foreign exchange rate fluctuations.

Group’s businesses and the frequent changes in relevant

payment of fines.

■ Litigation Risk

■ Occurrence of Natural Disasters and Accidents
works to ensure safety by developing a Business Continuity

The Group’s domestic and international operations may

operating results could be adversely affected. To minimize

production facilities are damaged by a major earthquake,

Plan (BCP), conducting fire and disaster drills, andresult in the risk of litigation relating to intellectual property,

this risk, the Group takes preventative measures throughmaintaining and updating production facilities.

product liability, the environment, labor and other matters. In

education and training on legal and intellectual property

the event of significant claims being made, the Group’s

issues and collaborates with legal experts as necessary.

pandemic such as COVID-19 occurs. The Group continuously

Data Section

The Group’s operating results may be adversely affected if its
typhoon or other natural disaster, fire or accident, or if aFoundation for
Value Creation

The Group operates globally, and its operations may be

Growth Strategy

The Group is implementing measures to reduce the■ Product Liability and Product Quality

Kureha Group
Value Creation

Environmental business: The business may be affected bya decrease in the amount of waste generated in the industrial■ Emergence of new Technologies and Development Risks

33

The Group actively engages in research and development

products and technologies become obsolete due to(R&D) across all its business sectors. Specifically, in thetechnological breakthroughs by competitors. To address this,Advanced Materials business, the rapid pace of technologicalthe R&D department collaborates with the business divisions

advancements in the target market and unexpected market

and proactively advances the development of new products

changes could hinder the development and introduction of

by reviewing and revising research themes, adjusting thenew products. Additionally, there is a possibility that theallocation of resources, and participating in industry-

Group’s operating results may be impacted if some of its

academia partnerships.

Kureha Corporation Business Report 2022

Kureha Corporation Business Report 2022

34

Foundation for Value Creation

Enhancing Governance System

Compliance

Message from Our Outside Directors

The management and employees of Kureha and its Group companies comply with all relevant domestic and international laws andregulations in all aspects of their corporate activities and practice activities in accordance with social norms.

The Origin of All Is “What is Kureha?”■ Compliance Systemcompliance. The Internal Control and Auditing Department,

conduct for management and employees of the Kureha

under the direct control of the President, evaluates and verifies

Group. The Compliance Committee, chaired by a director,

the appropriateness and effectiveness of internal control

provides training and other education through the Compliancesystems, including compliance, in internal audits covering 12

Handbook, which contains the Compliance Code of Conduct,

offices and 28 consolidated subsidiaries.

so that each employee is aware of the importance ofKureha Group Ethical Charter

Code of Conduct

Compliance Education● Compliance Code of Conduct● Introductory Education ● Continuing Education● Manual● New Employee Training ● More

● Compliance Rules ● Hotline (whistleblowing system)● Compliance Committee ● Conformation/Verification■ Compliance Education and Awareness Initiatives⃝ Conducting compliance awareness surveys (including Group

companies)
at Kureha and the Group⃝ Security trade management training

information, etc.
⃝ Revision of the Compliance Code of Conduct manual⃝ Revision of the Kureha Group Ethical Charter (Written Human

Rights Policy for Fiscal 2020)

Providing the Precise Choices for Kureha in the Changing Business Environment■ Whistleblowing System
We have a hotline (whistleblowing system) employees can use

with politics, administration and society. Internal rules prohibit

if they discover a compliance problem, have a question, or are

people from being treated detrimentally for reporting or

unsure of how to handle something. The whistleblowing

consulting on the hotline.

related to product and safety, human rights, the environment,
health and safety, fair and free competition, and relationships

Fiscal year

2019

2020

2021

The number of reports*

2

10

6

* Includes domestic group companies■ Tax Compliance
Kureha has established the Kureha Group Tax Policy to ensure

and region where the Group operates, and fulfills its tax obliga-that the Group has a proper understanding of the tax-related

tions appropriately.

laws and regulations, and the spirit thereof, in each country■ Administration of Tax Matters
The Group ensures thoroughness in all activities and controls⃝ Duties related to tax work are carried out by the director inbased on its tax policy. 				charge of the Accounting Department.
⃝ The Audit & Supervisory Board and its members audit the

There are no tax risk issues currently identified.
⃝ We conduct reasonable tax work in compliance with
tax-related laws and regulations by following proper

execution of duties by directors from an independent andobjective standpoint.

accounting practices and seeking advice from external
specialists such as certified public tax accountants.

35

WEB

For more information on compliancehttps://www.kureha.co.jp/en/csr/governance/compliance.html

Kazunari Higuchi

Outside Director, Independent Director
Kureha Corporation Business Report 2022

Data Section

system is also available for consultation on compliance issues

Through the past year, I have provided various advice under the changing business environment. The Company has a wide rangeof products and business divisions, and business portfolio management is conducted with profitability and competitiveness notaffected by fluctuation from a single market. It is necessary to review this business portfolio with the fluctuations of the market, andserious discussions have been made constantly in the Board of Directors as necessary. To make precise judgements in these
discussions, it is essential that sufficient information be disclosed to all participants of the Board of Directors. Furthermore,regarding the selection of management human resources, the future participants to the Board of Directors, discussions fornominations and remuneration were conducted with the outside directors leading the discussions. I feel the response to thesematters has further evolved in the past year.
The management of the Company, with President Kobayashi at the center, has extensive
knowledge of the business field, with a firm grip on the details, and provide well-balanced
management that goes forward without any fluctuation in the direction and vision of theCompany. Two indices, performance-based goals and objective evaluation have been used forreforming the human resource systems, as a part of the approach towards the nurturing ofcore human resources. Steps have been taken for human resource nurturing to allow every
individual employee to clear the path for their own careers. I have also been able to meethuman resources who could become candidates for director positions in the future.
In the discussions for the formulation of the next medium-term management plan, it has
become necessary to review the ways of how to maintain the continuous power of growth ofKureha Group in the face of a possible paradigm shift coming from the arrival of a period ofdrastic change. The Company has grown as a company driven by innovation and has
accumulated technical innovation over the years. The source of this growth or sustainability lies
with the people in Kureha Group. I am confident that no technical innovation can be achieved
without people. Acquiring patents alone will not create innovation. I believe that strengtheningof human resource nurturing is an important theme that forms the growth engine of theCompany in the medium- to long-term range.

Foundation for
Value Creation⃝ Information exchange meeting on training and case handling⃝Review of antitrust compliance, protection of personal

Growth Strategy

Organization/System

I believe that the role to be played by an outside director is to introduce an outside perspective to
make all stakeholders happy. To make this happen, it is important to respond to the change intimes, open up the issues without procrastinating, and to continue to provide wisdom based on
personal experience and the rules and principles, in discussions centered on the Board of
Directors. Kureha is a corporate group with great potential in people, technology, and materials.
To further polish this strength, nurturing of core human resources to bear management
responsibilities and a new human resource system to support self-development has started.
Reforms are being promoted to form a population for diversification through active recruiting of
women and foreign nationals, with the Human Resources Department at its center. When the
population increases, I am sure that opportunities to appoint talented women and foreign
nationals as core human resources will increase. These achievements will be slow. However,I am confident that they will steadily bear fruit.
Osamu Tosaka
In the Sustainability Committee established in the Spring of 2022, I proposed a review of
OutsideDirector,
Independent Director
the values that have been cherished by Kureha since its establishment, the mission of what
the company stands for, and the vision of which direction to take. This was done to avoid theobjectification of sustainability, which is easily attuned to social trends. The secretariat may have felt some anxiety by starting thediscussions from the fundamentals. However, by asking “What is Kureha?” as the origin of all, the activity is now becoming a standard
for value and code of conduct that will permeate to every individual employee. I am proud to say that it is an important role to beplayed by outside directors in provoking these material discussions.
Kureha is an excellent BtoB corporate group with many honest and serious employees. They have been sincerely working to makeinformation disclosures for shareholders and investors. However, there is still some room to broaden their activities by conducting
open dialogue with multi-faceted shareholders and investors to increase their popularity. For example, it may be a good idea to thinkof better ways to convey information to the targets, such as through the hosting of analysts’ briefings at factories and laboratories andturning them into facilities to be seen.

Kureha Group
Value Creation

We established the Kureha Group Ethical Charter as a code ofKureha Corporation Business Report 2022

36

Foundation for Value Creation

Enhancing Governance System

Board of Directors

Audit & Supervisory Board

Date of Birth

Executive Vice
President

Senior Vice President Senior Vice President

Outside Director

Outside Director

Outside Director

Audit & Supervisory
Board member

Audit & Supervisory
Board member

Audit & Supervisory
Board member

Yoshio Noda

Hiroyuki Tanaka

Osamu Tosaka Kazunari Higuchi

Osamu Iida

Masaru Kiriyama

Toru Yoshida

Yukako Oshimi

December 25, 1951

June 21, 1960

January 19, 1959

September 27, 1963

December 11, 1946

January 3, 1957

May 20, 1957

January 16, 1958

May 13, 1958

August 11, 1976

14

7

7

Newly appointed

62

Newly appointed

3

6

3

13 of 13 (100%)

13 of 13 (100%)

13 of 13 (100%)—

13 of 13 (100%)

13 of 13 (100%)—

13 of 13 (100%)

13 of 13 (100%)

13 of 13 (100%)

—

—

—

—

—

—

—

14 of 14 (100%)

14 of 14 (100%)

14 of 14 (100%)

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

Period in office (years)
Attendance at Board of Directors
meetings
Attendance at Audit & Supervisory
Board meetings
Director skills (expertise and experience)
Corporate management /Management strategy
Manufacturing

〇

R&D

〇
〇

〇

〇

〇

〇

Finance / Accounting
Overseas operations /Internationalization
Legal / Governance / Compliance /Risk management
ESG / Sustainability〇〇

Foundation for
Value Creation

Business strategy / Marketing

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

Director Skills (Expertise and Experience)
In order to realize the Group corporate philosophy and management plan and enhance the Group’s corporate value, we have

Senior Vice President

Naomitsu Nishihata

President, Kureha America Inc.; Deputy Managing Director, PGA Business

Senior Vice President

Koji Suyama

General Manager, Home Products & Packaging Materials Division

Vice President

Katsuhito Natake

General Manager, Advanced Products Division

operations and internationalization, (7) legal affairs, governance, compliance and risk management, and (8) ESG and sustainability.

Vice President

Satoshi Yonezawa

General Manager, Chemicals Division

The skills required of the directors are the eight skills specified above.

Vice President

Hiroyuki Sato

General Manager, Research & Development Division

Vice President

Atsushi Kida

General Manager, Manufacturing & Technology Division; General Manager, Iwaki Factory

Data Section

Executive Officers

Growth Strategy

Yutaka Kobayashi Michihiro Sato

Kureha Group
Value Creation

President & Chief
Executive Officer

identified eight skills that we expect from directors to possess: (1) corporate management and management strategy, (2)manufacturing, (3) research and development, (4) business strategy and marketing, (5) finance and accounting, (6) overseas

Notes 1: Based on each individual's expertise and experience, we have circled in the boxes where we have specific expectations for
the Company.
2: The above list is not an exhaustive list of each individual’s skills.

37

Kureha Corporation Business Report 2022

Kureha Corporation Business Report 2022

38

Data Section

Financial and Non-Financial Highlights

Financial Information (Japanese GAAP)Unit

FY2011FY2012FY2013

FY2014FY2015

Financial Information (IFRS)Unit

FY2016FY2017FY2018FY2019FY2020

FY2021Million yen¥ 132,294¥ 147,329¥ 148,265¥ 142,398¥ 144,575¥ 168,341

For the year:

For the year:

Net sales:

Million yen¥128,358¥130,550¥148,124¥150,182¥142,549

Revenue:

Domestic

Million yen

97,461

98,269105,588

103,943

96,025

Domestic

Million yen

97,630107,145

103,862

102,718

100,678

105,609

Overseas

Million yen

30,89732,281

42,536

46,23946,524

Overseas

Million yen

34,66440,184

44,40339,68043,89762,732

Revenue by segment:

Net sales by segment:
31,25327,65032,81536,18736,536

Advanced Materials

Million yen

33,36941,64045,74941,842

44,46566,687

Specialty Chemicals

Million yen

30,182

32,83336,61535,53531,182

Specialty Chemicals

Million yen

25,866

26,17627,30924,331

23,543

26,157

Specialty Plastics

Million yen

37,67240,90045,291

46,51944,210Specialty Plastics

Million yen

42,79145,39745,14843,47342,352

44,773

Construction

Million yen

16,30014,967

17,23816,721

16,201

Construction

Million yen

13,934

17,354

12,415

14,457

13,91912,174

Other Operations

Million yen

12,95014,197

16,163

15,21814,418Other Operations

Million yen

16,332

16,76017,643

18,293

20,294

18,547

Million yen

8,472

8,458

11,902

14,551

12,600Operating profit

Million yen

9,255

12,973

17,172

18,041

17,263

20,142

Net income attributable to owners of parent Million yen

1,460

3,212

7,365

9,195

7,342

Profit attributable to owners of parent

Million yen

7,001

9,697

13,933

13,71913,493

14,164

Capital expenditure

Million yen

14,36019,984

16,46817,557

12,139

Capital expenditure

Million yen

10,304

9,768

13,174

14,92814,322

14,319Depreciation and amortization

Million yen

9,580

8,882

9,096

8,261

9,877

Depreciation and amortization

Million yen

10,191

9,898

10,31012,11011,672

11,550Research and development expenses

Million yen

5,080

4,389

4,586

4,978

4,885

Research and development expenses

Million yen

4,734

4,962

5,270

5,995

5,561

5,649

Cash flows from operating activities

Million yen

12,35020,17823,37715,15026,704

Operating income

Cash flows from operating activities

Million yen

12,144

10,246

14,05812,533

14,045

Cash flows from investing activities

Million yen(14,169)(19,595)(20,444)(18,766)(6,026)

Cash flows from financing activities

Million yen

370

10,264

4,673

5,042

(9,328)

Total assets

Million yen¥186,223¥205,284¥224,459¥249,697¥236,633

Net assets

Million yen

88,55496,211

106,190

120,624

119,274

R&D Expenses (Kureha Group)

Employee Turnover Rate (Kureha)

5,483(3,876)(10,999)(15,478) 7.5(19,353)(12,516)(6,105)¥ 242,281¥ 247,352 6.0 ¥ 246,890¥ 256,923

282,639

150,193

160,551

164,990

183,830

199,219

37,31729,50628,507

Million yen(1,071)(9,698)7,500Cash flows from financing activities

Million yen
5.0(11,727)(10,415)

4.0
Million yen¥ 234,907

Total equity attributable to owners of parent Million yen

124,297(Million yen)

28,581

Ratio of Female Managers (Kureha)(8,363)

Cash flows from investing activities

(%)

(%)

Year-end:

Year-end:

Interest-bearing debt

56,683

Million yen

68,44877,22586,636

79,6856,000Total assets
4,500

3.0

Interest-bearing debt

48,08939,018Net income—basic

¥

Yen

8.51

¥

18.71

¥

42.87

¥

53.53

¥

42.73

Yen

¥ 407.38¥ 507.48¥ 679.55¥ 692.61¥ 691.33¥725.73

Yen 1.0

7,232.89

7,271.67¥10,207.32

110.00*125.007,922.58 1.5 8,453.07
165.00170.009,418.64

Yen

170.00210.003,000

Net assets

Yen

510.37546.69604.00687.80686.061,500Owners’ equity per share

Cash dividends

Yen

10.00

10.00

11.00

12.00

11.00

Cash dividends per share0
Ratios:Ratios:2.0

Basic profit per share

FY2019FY20200

FY2021FY2019FY20203.0

0FY2021FY2019FY2020

FY2021

%

6.6%

6.5%

8.0%

9.7%

8.8%

Operating profit to revenue

%

7.0%

8.8%

11.6%

12.7%

11.9%

12.0%

Net income to net sales

%

1.1

2.5

5.0

6.1

5.2

Profit attributable to owners of parent to revenue

%

5.3

6.6

9.4

9.6

9.3

8.4

Return on equity

%

1.7

3.5

7.5

8.3

6.2

Return on equity

%

5.8

7.1

9.0

8.4

7.7

7.4

Return on assets

%

4.3

3.4

5.7

6.5

4.9

Return on assets

%

3.8

5.3

7.1

7.3

7.0

7.6

Equity ratio

％

47.0

45.7

46.2

47.3

49.8

Owner’s equity ratio

%

52.9

62.0

64.9

66.8

71.6

70.5

* Translation is based on the ratio of the reverse stock split of 10 common shares to 1 common share as of October 1, 2016.

Employee Turnover Rate (Kureha)(Million yen)

Ratio of Female Managers (Kureha)
(%)

(%)

Number of Female Hires(New graduates in Kureha)(Persons)

Ratio of Female Regular Employees(Kureha)(%)

GHG Emissions by Scope (Kureha)(1,000 t-C02)

7,500

5.0

7.5

15

30

1,000

6,000

4.0

6.0

12

24

800

4,500

3.0

4.5

9

18

600

3,000

2.0

3.0

6

12

400

1,500

1.0

1.5

3

6

200

0

FY2019FY2020

FY20210

FY2019FY2020

FY20210

0
FY2019FY2020

FY2021FY2019FY2020

FY20210

FY2019FY2020

FY2021

Data Section

Operating income to net sales

R&D Expenses (Kureha Group)

Foundation for
Value Creation

71,007

Million yen

Amounts per share:

Amounts per share:

4.5

Growth Strategy

Million yen

Kureha Group
Value Creation

Advanced Materials

0

FY2019FY2020

FY2021■ Scope 1 ■ Scope 2 ■ Scope 3
WEB

39

Kureha Corporation Business Report 2022

Details of non-financial information are available on our website.

Note: Scope 3 is calculated from FY2021.

https://www.kureha.co.jp/csr/pdf/data.pdf

Kureha Corporation Business Report 2022

40

Data Section

Operating Results and Financial Analysis■ Business Environment■ Financial Policy

In the fiscal year ended March 31, 2022, the Japanese andcarbon products for the Advanced Materials business.

The Group raises necessary funds by borrowing from financial

expenditures, investments and loans, R&D investments for

global economies showed signs of recovery as the extremely

However, the impact was minimal. Similarly, sharply higher fuelinstitutions, issuing corporate bonds and commercial paper. In

new and existing businesses, and dividends to shareholders.

challenging conditions caused by the COVID-19 pandemic

and raw material costs impacted earnings, particularly in

addition, we have implemented a cash management system

On this basis, while our first priority is to secure long-term

eased. While the trend toward recovery is expected to

Advanced Materials, but the Group was able to compensate

to efficiently utilize funds and reduce financial costs. To ensure

funding, we also consider the balance of short-term andby passing on cost increases to users where appropriate.

liquidity, we secure issuance limits for commercial paper,

long-term borrowings and implement necessary financing.

continue as ongoing measures to combat the spread of thevirus support economic activity, the outlook remains uncertain

Revenue increased year-on-year, particularly in polyvinylidene fluoride (PVDF), which is used as a binder material forfactors such as rising fuel and raw material costs, a semicon-

lithium-ion secondary batteries. Core operating profit (profit

ductor shortage, and the Ukraine crisis.
Under these circumstances, the Kureha Group maintained

expenditure plans, primarily in the Advanced Materials

before adjustments) increased year on year despite losses

segment, will be financed through internal funds, corporate

caused by the suspension of production at a PGA resin

and to allocate funds on a priority basis to capitalbonds and borrowings.

manufacturing subsidiary in the U.S., and operating profit alsoof infection and reduce related risk factors. A renewed

increased despite the recording of impairment losses on fixed

increase in COVID-19 infections led to lockdowns in China,

assets in the Advanced Materials business.

which in turn halted operations at local plants producing

Finance costs (net of finance income) amounted to a loss

million, or 16.4%, to ¥168,341 million. Gross profit increasedof ¥256 million. As a result, profit before tax increased byby ¥8,005 million, or 18.7%, to ¥50,878 million, and the gross¥2,650 million, or 14.9%, to ¥20,398 million.
Income tax expense was ¥6,104 million, and profit for the
fiscal year increased by ¥682 million, or 5.0%, to ¥14,293

by ¥2,083 million, or 8.2%, to ¥27,521 million. Other

million. The Group posted profit attributable to non-controlling

expenses (net of other income) amounted to a loss of ¥5,235

interests of ¥129 million, and profit attributable to owners of

million, due mainly to an impairment loss of ¥5,306 million. As

parent increased by ¥671 million, or 5%, to ¥14,164 million.

a result, operating profit increased by ¥2,879 million, or
16.7%, to ¥20,142 million, and the operating profit margin

equity method investments, and retirement benefit assets.

¥25,716 million compared to March 31, 2021. Current assets

Total liabilities were ¥81,914 million, up ¥10,512 million

totaled ¥112,418 million, up ¥26,181 million compared tocompared to the previous fiscal year. This was mainly due to a

March 31, 2021, amid increases in cash and cash equivalents,¥999 million decline in interest-bearing debt to ¥28,507 million

trade and other receivables, and inventories. Non-current

from paying down loans and other items, which offset increase

assets were ¥170,221 million, down ¥465 million from thein trade and other payables.

previous fiscal year. Factors contributing to the decrease in

Total equity was ¥200,724 million, up ¥15,203 million

non-current assets were a decline of ¥5,735 million incompared to the previous fiscal year. This was due primarily toproperty, plant and equipment to ¥114,435 million owing to

the recording of ¥14,164 million in profit attributable to owners

tax purpose reduction entries accompanying receipt ofof parent and an increase in other components of equity

government subsidies and the booking of impairment losses,

associated with depreciation of the yen, which offset dividend

which offset increases in intangible assets, assets related to

payments of ¥3,318 million from retained earnings.

Foundation for
Value Creation

fiscal year. Selling, general, and administrative expenses rose

Total assets as of March 31, 2022 were ¥282,639 million, up

Growth Strategy■ Balance Sheet Analysis■  Analysis of Business Results

profit margin improved to 30.2% from 29.7% in the previous

The Group’s basic policy is to maximize operating cash flow

With respect to plans for significant capital expendituresand sources of financing for such expenditures, our capitalby securing planned profits and improving asset efficiency,

stable business operations while striving to prevent the spread

Revenue for the fiscal year under review rose by ¥23,766

financial institutions, and maintain cash and cash equivalents.

Kureha Group
Value Creation

due to the lingering effects of the pandemic, exacerbated byutilize commitment lines and overdraft agreements withimproved to 12.0% from 11.9% in the previous fiscal year.

■ Overview of capital expenditure

The balance of cash and cash equivalents at the end of the

Cash flows from investing activities

Total capital expenditure of the Group during the fiscal year

Corporation). The Construction segment invested ¥110 million

fiscal year under review (March 31, 2022) amounted to

Net cash used in investing activities amounted to ¥10,999

ended March 31, 2022 amounted to ¥14,319 million. Thisin facilities. The Other Operations segment invested ¥2,089¥30,639 million, an increase of ¥12,805 million from the end

million, an increase of ¥7,123 million from the previous fiscalof the previous fiscal year. This was due to the accumulation

year. This was mainly attributable to a decline in proceeds

includes investments in both tangible and intangible assets. The

million, primarily in industrial waste processing facilities

of cash and cash equivalents to ensure future liquidity offrom the sale of investment securities.

breakdown of capital expenditures by segment is as follows:(Kureha Ecology Management Co., Ltd.).

funds. An outline of individual cash flows and the main factors

In addition, the Advanced Materials, Specialty Chemicals,

primarily in manufacturing-related facilities for vinylidene

and Specialty Plastics segments jointly invested ¥3,148 million

fluoride resin (PVDF) and polyphenylene sulfide (PPS) (Kureha

in shared factory facilities (Kureha Corporation) and in

Corporation). The Specialty Chemicals segment invested ¥609

investments related to the next generation core systems

million, primarily in manufacturing-related facilities for industrial(Kureha Corporation). The funds required for these investments¥28,581 million, an increase of ¥1,877 million from thechemicals (Kureha Corporation). The Specialty Plastics

was procured from cash-at-hand, corporate bonds, andprevious fiscal year. This mainly reflected an increase in profit

segment invested ¥1,681 million, primarily in manufacturing-borrowings.

before tax.

related facilities for polyvinylidene chloride (PVDC) film (Kureha

affecting each is as follows:

Cash flows from financing activities
Net cash used in financing activities amounted to ¥6,105

41

The Advanced Materials segment invested ¥6,680 million,

Cash flows from operating activities

million, a decrease of ¥6,410 million from the previous

Net cash provided by operating activities amounted tofiscal year.

Kureha Corporation Business Report 2022

Data Section■  Cash Flow Analysis

Kureha Corporation Business Report 2022

42

Data Section

Consolidated Statements of Financial Position

Consolidated Statements of Profit or Loss

Kureha Corporation and Consolidated Subsidiaries
As of March 31, 2021 (FY2020) and 2022 (FY2021)

Kureha Corporation and Consolidated Subsidiaries
For the fiscal years ended March 31, 2021 (FY2020) and 2022 (FY2021)

Millions of yen

FY2020

FY2020

FY2021ASSETS
Current assets:¥168,341

Current liabilities:

101,702

117,463

Gross profit

42,87250,878Selling, general and administrative expenses

25,43827,521

Share of profit of entities accounted for using equity method

1,472

2,020

Other income

872

1,246

Other expenses

2,516

6,481

35,808

Bonds and loans payable3

1636,452

41,698Other current assets

3,735

4,255

Total current assets

86,237

112,418¥ 19,221¥ 29,476

7,841

14,750

Other financial liabilities

1,724

1,522

Accrued income taxes

2,587

2,287

Provisions

6,379

6,893

Operating profit

17,263

7,110

20,142Other current liabilities

7,671

Finance income

703

532

Total current liabilities

44,86562,602Finance costs
Profit before tax

Non-current assets:

114,435

2,202

4,041

Investments accounted forusing the equity method

14,042

16,836

Other financial assets

22,40721,514

Deferred tax assets

1,569

1,604

Intangible assets, net

Non-current liabilities:
Bonds and loans payable

19,014

11,428Other financial liabilities

2,145

2,028

Deferred tax liabilities

1,795

2,269

Provisions

1,388

1,342

Net defined benefit liability

291

316

Other non-current assets

10,292

11,787

Other non-current liabilities

1,900

1,926

Total non-current assets

170,686

170,221

Total non-current liabilities

26,536

19,311¥256,923¥282,639

71,402

81,914

Total assets

Total liabilities

276
20,398

Income tax expense

4,136

6,104

Profit for the year

13,611

14,293

13,493

14,164

Profit attributable to:
Owners of parent

118

129

¥ 13,611¥ 14,293

Basic¥ 691.33¥ 725.73

Diluted690.51

724.67

Non-controlling interests
Total
Profit per share (in Yen):

Shareholders’ equity:

18,169

Capital surplus

14,897

14,724

Less: Treasury stock, at cost

(8,697)(8,701)

154,166

166,005

5,294

9,020

183,830

199,219

1,690

1,505

185,521200,724¥256,923¥282,639

Retained earnings
Other components of equity
Total equity attributable toowners of parent
Non-controlling interests
Total equity
Total liabilities and equity

Consolidated Statements of Comprehensive Income
Kureha Corporation and Consolidated Subsidiaries
For the fiscal years ended March 31, 2021 (FY2020) and 2022 (FY2021)

Millions of yen

FY2020

FY2021¥13,611¥14,293

Financial assets measured at fair value through other comprehensive income (loss)

5,148

(742)

Remeasurements of defined benefit plans

2,066

868

Total

7,214

126

Exchange differences on translating foreign operations

1,693

4,535

Total

1,693

4,535

Total other comprehensive income

8,908

4,661

¥22,520¥18,955¥22,280¥18,849

Profit for the year
Other comprehensive income (loss):

Data Section

18,169Foundation for
Value Creation

Equity:Capital stock, no par value

Growth Strategy

120,171

Property, plant and equipment, net

219
17,748

Kureha Group
Value Creation¥144,575

28,212Inventories

FY2021

Cost of sales

Trade and other payables

Other financial assets

FY2020

Revenue¥ 30,639

Trade and other receivables

FY2021

LIABILITIES AND EQUITY¥ 17,834

Cash and cash equivalents

Millions of yen

Millions of yen

Items that will not be reclassified to profit or loss:

Items that may be reclassified subsequently to profit or loss:

Comprehensive income
Comprehensive income attributable to:
Owners of parent

43

Kureha Corporation Business Report 2022

Non-controlling interests

240

106

Comprehensive income¥22,520¥18,955

Kureha Corporation Business Report 2022

44

Data Section

Consolidated Statements of Changes in Equity
Kureha Corporation and its Consolidated Subsidiaries

連結株主資本等変動計算書
FY2020 (From April 1, 2020 March 31, 2021)

Millions of yen

FY2021 (From April 1, 2021 to March 31, 2022)

Millions of yen

Total equity attributable to owners of parent

Total equity attributable to owners of parent

Other components of equity
Capital,no par value
BALANCE—APRIL 1, 2020

¥18,169

CapitalsurplusTreasurystock, at cost

¥15,044

StockacquisitionrightsRetainedearnings¥(8,693)¥135,918¥ 80¥(4,858)

13,493

Profit for the period——

13,493

—

1,696

(3)

Acquisition of treasury stock¥14,897¥(8,697)¥154,166——

14,164

—

4,535

(3)
31
(3,318)
(172)
992

—

(146)

(3)

4,755

29

—

Total transactions with owners

—

(172)

(3)

(2,325)31—

BALANCE—MARCH 31, 2021

¥18,169¥14,897¥(8,697)¥154,166¥110¥(3,161)

BALANCE—MARCH 31, 2022

¥18,169¥14,724¥(8,701)¥166,005¥141¥ 1,373

Millions of yen

Total equity attributable to owners of parent

Other components of equity

BALANCE—APRIL 1, 2020

Capital,no par value

Non-controllinginterests

Total¥1,633¥166,623—

13,493

118

13,611

Profit for the period

5,068

2,021

8,786

8,786

121

8,908

Other comprehensive income

5,068

2,021

240

22,5208,786

22,280—(3)

Share-based payment transaction

29

29

Dividends—(3,318)Equity transactions with non-controllinginterests
Reclassification from other components ofequity to retained earnings—(6,052)

Total transactions with owners(6,052)BALANCE—MARCH 31, 2021

¥ 8,345

Kureha Corporation Business Report 2022

(2,021)¥(8,073)

(146)

(56)
(126)

—

BALANCE—APRIL 1, 2021

Capital,no par value

Non-controllinginterests

Total

Total equity—¥ 5,294¥183,830¥1,690¥185,521—

14,164129

14,293

(713)

862

4,685

4,685

(23)

4,661

(713)

862

106

18,955¥ 8,345¥

4,685

18,849(3)

Acquisition of treasury stock

—

(3)

29

Share-based payment transaction31

31

Dividends—(3,318)(62)(3,380)

1

(171)

(228)

(399)

(992)

—

(3,374)Comprehensive income(273)

Equity transactions with non-controllinginterests—

Reclassification from other components ofequity to retained earnings

1
(129)

(2,021)(8,044)(3,439)(183)(3,623)

Total transactions with owners

(128)

—

¥ 5,294¥183,830¥1,690¥185,521

BALANCE—MARCH 31, 2022

¥ 7,504

(862)
¥

(3)
31

Data Section¥164,990

Acquisition of treasury stock

Comprehensive income

Total equity¥ 4,551¥

Profit for the period
Other comprehensive income

Other components of equity
Financial assets
measured at fair
Remeasurements
value throughof definedotherbenefit planscomprehensive
income—¥ 9,326

Foundation for
Value Creation

Total equity attributable to owners of parent

Financial assets
measured at fair
Remeasurements
value throughof definedotherbenefit planscomprehensive
incomeGrowth Strategy

Total transactions with owners

Millions of yen

45¥(3,161)
4,535—

Reclassification from other components ofequity to retained earnings

8,073

¥110

Other comprehensive income
Comprehensive income

Dividends(146)

Exchange differenceson translating foreign
operations

14,164Equity transactions with non-controllinginterests

Reclassification from other components ofequity to retained earnings

StockacquisitionrightsRetainedearnings

Share-based payment transaction(3,318)Equity transactions with non-controllinginterests¥18,169

Treasurystock, at cost

Acquisition of treasury stock29

Share-based payment transaction
Dividends

BALANCE—APRIL 1, 2021

Capitalsurplus

Kureha Group
Value Creation

1,696
—

Capital,no par value

Profit for the period

Other comprehensive income
Comprehensive income

Other components of equity

Exchange differenceson translating foreign
operations

—

(862)

(959)

(3,461)(290)(3,752)—¥ 9,020¥199,219¥1,505¥200,724

Kureha Corporation Business Report 2022

46

Data Section

Data Section

Consolidated Statements of Cash Flows

Corporate Data and Stock Information

Kureha Corporation and Consolidated Subsidiaries
For the fiscal years ended March 31, 2021 (FY2020) and 2022 (FY2021)

Millions of yen

FY2020

FY2021

Corporate Data (March 31, 2022)

Cash flows from operating activities:

President & CEO

Yutaka Kobayashi

Establishment

June 21, 1944

Headquarters

3-3-2, Nihonbashi-Hamacho,
Chuo-ku, Tokyo 103-8552, Japan
Tel: 81-3-3249-4666
Fax: 81-3-3249-4744

11,672

11,550

Impairment loss

1,624

5,306

Finance income

(469)

(532)

Finance costs

211

155

(1,472)(2,020)Paid-in Capital¥18,169 million(Profit) loss on disposal and sale of property, plant and equipment, and intangible assets

402

627

Business Outline

Manufacturing and sales of advanced
materials, specialty chemicals and plastics(Increase) decrease in trade and other receivables

428(6,657)

Number of Employees

4,259 (Consolidated) 1,663 (Non-consolidated)(Increase) decrease in inventories

2,286(4,045)

Group Companies

Increase (decrease) in trade and other payables

(753)

8,357

28 consolidated subsidiaries and 2 equitymethod affiliates

Increase (decrease) in provision

(47)

449

Major Overseas Bases

Increase (decrease) in net defined benefit asset and liability

(469)

(184)

United States, Germany, the Netherlands,
France, Belgium, UK, Australia, China andVietnam

Other, net

1,902

(98)

33,06333,305Interest and dividends received

1,475

1,655

Security Code4023

Interest paid

(218)

(149)

Number of Shares ofCommon Stock Issued

20,805,407 shares

Number of Shareholders

9,730

Stock Exchange Listings

Tokyo Stock Exchange

Fiscal Term

April 1– March 31

Ordinary General
Meeting of Shareholders

June

Transfer Agent

Mizuho Trust & Banking Co., Ltd.
3-3, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Independent Auditor

Ernst & Young ShinNihon LLC(7,615)(6,230)Cash flows from operating activities

26,70428,581

Proceeds from sales of property, plant and equipment, and intangible assets

23

192

Payments for purchases of property, plant and equipment, and intangible assets(12,878)(12,586)

9,582

271

Purchase of investment securities

(13)

(379)

Government grant income

—

2,231

(590)

(729)

(3,876)(10,999)(3,318)(3,318)

(56)

(62)

Net increase (decrease) in commercial paper and short-term loans payable(6,889)506

Proceeds from non-current loans payable

1,965

—

Repayments of non-current loans payable(2,603)(1,496)

Payments from changes in ownership interests in subsidiaries that do not result inchange in scope of consolidation

(318)

(399)

(3)

(3)

Other, net(1,291)(1,331)

Cash flows from financing activities(12,516)(6,105)

254

1,328

Net increase (decrease) in cash and cash equivalents

10,566

12,805

Cash and cash equivalents at beginning of year

7,268

17,834¥ 17,834¥ 30,639

Cash flows from investing activities:

Proceeds from sales of investment securities

Other, net
Cash flows from investing activities

Cash flows from financing activities:
Dividends paid
Dividends paid to non-controlling interests

Acquisition of treasury stock

Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at end of year

Kureha Corporation Business Report 2022

The Master Trust Bank of Japan Ltd. (Trust account)

2,983

15.3

Custody Bank of Japan, Ltd. (Trust Account)

1,693

8.7

Meiji Yasuda Life Insurance Company

1,374

7.0

Tokio Marine & Nichido Fire Insurance Co., Ltd.

550

2.8

JP MORGAN CHASE BANK 385632

416

2.1

Mizuho Bank, Ltd.

400

2.0

J.P. MORGAN BANK LUXEMBOURG S.A. 381572

373

1.9

STATE STREET BANK AND TRUST COMPANY
505012323

1.7

Custody Bank of Japan, Ltd. (Trust Account 4)

273

1.4

Mizuho Trust & Banking

266

1.4

Note: Number of shares held is rounded down to the nearest thousand share.
The percentage of shareholding is calculated excluding treasury stock.

Shareholder Composition (Shareholding Ratio)
Treasury Stock

Securities Corporations

6.2%

0.9%

Other Domestic
Corporations

5.4%

Individuals

10.5%

Total
20,805,407
sharesForeignInvestors

Financial
Institutions

45.6%

31.5%

Stock Prices Movement
Trading Volume

Stock Price(Thousands of shares)

Data Section

Income taxes paid

Shareholding
Ratio (%)

Foundation for
Value Creation

Subtotal

Stock Information (March 31, 2022)

Shares held
(thousands)

Growth Strategy

Depreciation and amortization

Name of shareholder

Kureha Group
Value Creation

Kureha Corporation¥ 20,398

Share of (profit) loss of entities accounted for using equity method

47

Corporate Name

¥ 17,748

Profit before tax

Major Shareholders (March 31, 2022)(Yen)
10,000
Trading volume (Left scale)
Kureha’s stock price (Closing)(Right scale）
7,500

3,000

5,000

1,500

2,500

0

April
2020

April
2021

March
2022

0

Kureha Corporation Business Report 2022

48