Integrated Report 2021

Integrated Report

December 17, 2021

2021

Introduction

Inabata will continue to grow by flexibly responding
to changes in the business environment with the “soundand solid strength” it has cultivated for more than 130 years.

Contents

Starting from importing dyes in 1890, we have expanded our businessaround chemicals that form the foundation of all kinds of industries,
responding to the changing needs of our clients and society.

The Evolution and Structural Reorganization of

3

Corporate Philosophy and DNA
Our Company

5

History of Value Creation
the Chemicals BusinessAt a glance
Medium- to Long-term Growth Strategy
The Process of Value Creation
Business Model

7
9
11
13
15

Strategies

21
27

Message from the President
CFO Interview
Annual ReportFeature COVID-19:
The Pandemic’s Impact and Our Response
Financial and Nonfinancial Highlights
Segment Overview
Global Network
Regional Overview

31
35
37
45
47

ESG Information

Corporate GovernanceManagement
Outside Directors’ Roundtable
Interview with an Outside Director
Risk Management
Society
Environment

49
51
55
65
67
73

Financial Information /Consolidated Subsidiaries and Affiliates /Corporate Information / Stock Information

77

Editing Policy
We prepare the Integrated Report as an important tool thatenables Inabata’s stakeholders to understand thecompany’s business activities and distinctive initiatives forvalue creation. The aim of Integrated Report 2021 is topresent the sound and solid strength of our company,
which has evolved with the times, responding to asignificant societal change triggered by the spread of
COVID-19 infection.
Guidelines referenced:
The International Integrated Reporting Framework byInternational Integrated Reporting Council (IIRC), Guidance forIntegrated Corporate Disclosure and Company-Investor
Dialogue for Collaborative Value Creation by Ministry of
Economy, Trade and Industry (METI), etc.
Relevant period:
From April 2020 to March 2021 (Some information may not belimited to this period)
Relevant organizations:Inabata & Co., Ltd. and its domestic and overseas Group companies

1 Inabata Integrated Report 2021

Inabata Integrated Report 2021

2

Corporate Philosophy and DNA

The Founder’s Passion and the Origin of Inabata

Love (ai) and Respect (kei)Katsutaro Inabata washing silk threads in the Rhone
river in the winter during his study abroad(by Sekka Kamisaka)

MissionPeople come first, based on the spirit of“love (ai)” and “respect (kei),”and together we strive towards contributing to thedevelopment of society.

VisionTo continually evolve, serving clients and society,through global operations and meeting theirchanging needs.

Inabata Senryoten at the time of founding

IK Values

Apart from running his company, Katsutaro also devoted himself todomestic production of dyes. In 1916, when Japan Dyestuff
Manufacturing Co., Ltd. was established under national policy,
Katsutaro was also involved in its establishment and was appointed
as auditor. When the dyeing industry was undergoing a crisis under
the recession during World War I, Katsutaro emphasized the need tounderstand that a national business such as dyeing surpassed theconcepts of profit and loss. In 1926, he took over as president andcommitted himself to the development of the industry.

The DNA of “love (ai)” and “respect (kei )”- To cherish integrity and respect for people (ethics)- To continually challenge the limits with high ideals,
big dreams and great passion (aspiration)- To prize dialogue and teamwork, and to treasureprofessional growth of employees (organization)- To become the best partner of our clients, providing
solutions from the clients’ standpoint (role)
Inabata Dye House’s happi coat with IK logo

- To grow with people across borders, sharing andrespecting diverse values with the aim ofco-prosperity (symbiosis)
Katsutaro Inabata, FounderFounder Katsutaro Inabata’s signature

3 Inabata Integrated Report 2021

Our founder, Katsutaro Inabata, was born in Kyoto in 1862 as theeldest son to a family that ran the long-standing Japanese sweetshop, Kameya Masashige, which was a purveyor to the Imperial
Household. At an early age of 15, Katsutaro was selected to visit
France to study, sponsored by the Kyoto Prefectural government
which was aiming for industrial development. He not only studied
dyeing techniques at an engineering school in Lyon, but also learned
practical skills by working at the Marnas dyeing factory. He studied
applied chemistry afterward, focusing on dyeing techniques at the
University of Lyon. Katsutaro returned to Japan in 1885 at the age of
23 and became a government employee with Kyoto Prefecture. At
24, he started teaching at a dyeing institute in Kyoto, where heleveraged the advanced knowledge and skills in synthetic dyes anddyeing techniques he had learned in France. In 1890, at the age of28, he founded Inabata Senryoten along with his wife and started abusiness as a dye distributer for St. Denis, a French company.

In 2010, 120 years after Inabata was founded, the company had
grown to a global corporation with about 3,600 employees on aconsolidated basis. Katsutaro’s great-grandson and our sixthpresident, Katsutaro Inabata, felt the need to have a shared value
among ourselves to demonstrate the company’s strengths.
Selected employees from the company put their heads together
and formulated the new management philosophy, vision, and values
that the company should stand for 10 years later. What is the
purpose of our existence? What matters the most is the spirit oflove and respect that we have inherited. These values have been
loved and been our company’s unchanged motto since its founding,along with the symbol of “IK,” which is taken from the initials of our
founder. Another meaning behind our logo IK is that love inJapanese kanji is pronounced “ai,” and respect “kei.” “Honesty is the
only way to earn trust of society” – This is one of the words left
behind by our founder, which describes the spirit of love andrespect. Our company’s history of over 130 years boasts a lineageof diverse businesses that contribute to social interests relevant to
the times and that spirit has become the unwavering guideline forsustainable growth in the medium- to long-term.

Inabata Integrated Report 2021

4

Since 1890

Our Company History of Value Creation

Since the company’s founding in 1890, we have been creating
and offering value that caters to the times through the soundand solid strength that defines Inabata.

1890-

The First Founding Period
Early Period

Amid the Great Depression,
the company took on the challenge ofdomestic production of dyes witha commitment that went beyond profits

1945-

1984-

The Second Founding Period
Growth Era

The Third Founding Period
Reform Era

After losing its pillar of earnings,
Inabata rebuilt its management baseand aggressively expanded overseas

After the devastation caused
by World War II, the company
steadily expanded its business andbuilt its foundation as a chemical
trading company

He established Muslin Boshoku in 1895. After which hestarted business with Société Alsacienne de Constructions
Mécaniques of France, which was considered the best
spinning and weaving machines manufacturer at the time.
He, then, established Inabata Dye House, gathered the bestmachinery and technology, and became the factory manager
himself. Even during harsh times, he advocated the need tocommit to the understanding that a national business suchas dyeing surpassed the concepts of profit and loss andcontributed to the development of the business.
1890 Inabata Senryoten established in Kyoto

In the midst of the post-war recession, Inabata expanded
its business fields to include synthetic resins andconstruction materials and grew to become a listedcompany by the 1960s. In 1976, the company established
Inabata Singapore as its first post-war overseas base, andsubsequently developed trading companies andmanufacturing and processing plants in Southeast Asian
countries. In addition, it adopted a corporate divisionsystem in order to strengthen its structure in anticipationof business expansion. With the establishment of thedyestuffs, chemicals, plastics, and machinery divisions,the business structure that forms the foundation of
today’s Inabata Industry was established.

*The name is set to change to Sumitomo Pharma Co., Ltd. in
April 2022.

1984 Pharmaceuticals division separated, Sumitomo
Pharmaceuticals Co., Ltd. (now Dainippon Sumitomo
Pharma Co., Ltd.) established as a joint venture with
Sumitomo Chemical Co., Ltd.

1961 Stock listed on Second Section of the Osaka Securities
Exchange

1918 Inabata Shoten (Inabata & Co., Ltd.) established1966 Pharmaceuticals division expands its business by enhancing
its structure

1922 Osaka Chamber of Commerce and Industry appoints
Katsutaro Inabata as its 10th president (until 1934)

1970 Introduced a corporate division system and establisheddyestuffs, chemicals, plastics and machinery divisions

1926 Katsutaro Inabata assumes the presidency of The Japan
Dyestuff Manufacturing Co., Ltd.

1973 Listed on the first section of the Tokyo Stock Exchange andthe Osaka Securities Exchange

1943 “Inabata Sangyo” becomes the Japanese company name1976 Inabata Singapore (Pte.) Ltd. set up to become the firstoverseas office after World War II

1944 The Japan Dyestuff Manufacturing merges into Sumitomo
Chemical Co., Ltd. Inabata & Co., Ltd. becomes the
exclusive distributor of dyestuffs, chemicals, andpharmaceuticals for Sumitomo Chemical Co., Ltd.

As the value of trading companies was
being challenged, Inabata enhanced
multifaceted functions such as
manufacturing and logistics

800.0

600.0

In 2010, Inabata celebrated the 120th anniversary of its
founding. As it was expanding its manufacturing andprocessing bases, the company responded to diverse
needs in the rapidly changing market by developing not
only a trading function but also a manufacturing andprocessing function that directly participates in
production. Today, it is a global company operating in
about 60 locations in 17 countries. In 2017, Inabata
formulated the IK Vision 2030, which describes how it
envisions itself in 10 to 15 years. With the spirit of“love” and “respect” handed down from generation to
generation since its founding, the company continues
to evolve, eyeing the future.

500.0

400.0

2010 Mission, Vision, and IK Values are newly established tocoincide with Inabata’s 120th anniversary
2012 Business reorganized into Information & Electronics,
Chemicals, Life Industry, Plastics, and Housing & Eco
Materials segments

300.0

2019 Business domains reorganized into four areas: Information& Electronics, Chemicals, Life Industry, and Plastics

1988 Food division established1962 Stock listed on Second Section of the Tokyo Stock Exchange

1897 Inabata Dye House established900.0

A plastics compound manufacturing base
IK Plastic Compound Mexico, S.A. de C.V. (Mexico)

Sumitomo Pharmaceuticals Co., Ltd. (now Dainippon
Sumitomo Pharma Co., Ltd.*) was established in October
1984 as a joint venture with Sumitomo Chemical Co., Ltd.
The pharmaceutical business, which had been in
operation for nearly 40 years since 1946, was separated
from Inabata. However, the bulk pharmaceuticals
business was succeeded by the chemicals division, as it
handled a wide range of products to meet the needs ofsociety. Moreover, Inabata focused on aggressive
overseas expansion while rebuilding its managementbase. It particularly focused on the resin compounding
business to build a new earnings pillar.

New Osaka Head Office completed in 1954

After the Sino-Japanese War, when the entire Japaneseindustry was in recession, our founder devoted himself
to producing dyes domestically while managing theInabata Senryoten.

The Fourth Founding Period

700.0

Press conference announcing the launch of
Sumitomo Pharmaceuticals

Inabata Dye House established in 1897

2010-

1000.01990 New Osaka Head Office building completed
1999 Business reorganized into IT & Electronics,
Housing Materials, Chemicals, Plastics, and Food segments

200.0

2000 Inabata certified ISO 14001(environment management system)2005 Inabata certified ISO 9001 (quality management system)

100.01979 Overseas division established

Sales trends(hundred million yen)

1890

1900

5 Inabata Integrated Report 2021

1910

1920

1930

1940

1945

1950

1960

1970

1980

1984

1990

2000

2010

2020
Inabata Integrated Report 2021

2030

6

Our Company
The Evolution and Structural Reorganization of the Chemicals Business
Since starting from importing dyes in 1890, we have expanded our business aroundchemicals that form the foundation of all kinds of industries, responding to the changing
needs of our clients and society.

1945- Growth Period

1890- Early Period
The era of founding and growth
We started with the import and sales of dyes and dying & weaving
machines and expanded our business around the chemicals field.

1984- Reform Period

2010- The Fourth Founding Period

The era ofrestructuring
and revival

The era ofchallenges andhardshipThe era ofprogress andcreation

We advanced into new
domains while strengthening
the pharmaceuticals business,amid post-war chaos in
the country.

We created new value by separating
the pharmaceuticals business andexpanding overseas bases.

We are striving to become ourclients’ best partner as a shosha,
or Japanese trading company,
providing manufacturing, logistics,
and finance solutions backed by ourhighly specialized knowledge.

Mask blanks

Polarizing film materials forliquid crystal displays

Pellicles

Encapsulant for LEDs

Founder and dyes

Information &Electronics

Our founder went to study in France on government sponsorship at the age of 15. There, he studied cutting-edge syntheticdyes and dyeing techniques of the time for eight years and brought back the knowledge to Japan.
1897

February 1920

Spinning machine (Société Alsacienne deConstructions Mécaniques)

Machinery division

April 1959
Machinery and
Metals division

February 1941
Closed down

May 1983

April 1977
Machinery andHousing Materials
division

Machinery andElectronics Materials
division

IT and Electronics
division
Materials for solar power
generation

Restarted business with Société Alsacienne deConstructions Mécaniques in 1959 andestablished the Machinery and Metals division

Limited partnership company Inabata Koryo

Additives for plastics and rubber

Dyes
June 1918

Information &Electronics Div. I

April 1999

Renewable energy materials
Silicone

Chemicals for papermaking

Dyes for printers

Dyeing division

Perfumes
Imported
pharmaceuticals

Information &Electronics Div. III

The perfume division separated in1926 to become an independent
entity and a limited partnership company Inabata Koryoten wasestablished. The name was changed in 1966 to Inabata Koryo.
*There is no capital relationship with our company now.

June 1918
Dye samples of Nippon Senryo Seizo K.K.

Information &Electronics Div. II

Chemicals

January 1958

Trading division
October 1946

Pharmaceuticals
division

Pharmaceuticals
division

Pharmaceuticals

Chemicals Division

Chemicals department

January to
November 1933

Materials for insecticides

Succeeded the pharmaceutical substances businessPharmaceuticals business separated

October 1984

Sumitomo Pharmaceuticals Co., Ltd. (now Sumitomo
Dainippon Pharma Co., Ltd.) was established as a
joint venture with Sumitomo Chemical Industry Co.,
Ltd. (now Sumitomo Chemical Co., Ltd.)Cornstarch

October 1975
Food division

Poleon Tablets
Advertisementin Shukan Asahi(1941)

Particle board

Shrimp for processing

Adhesives for plastics

Started sellingcornstarch, which is apaste for cardboards, tothe food industry as an
auxiliary raw material forbeer brewing

Blueberries

April 2012

Life Sciences-related
products and services of
the Chemicals Division
integrated with
the Food division

April 2019

Chemicals Division and Housing& Eco Materials Division
restructured

Life Industry
Life Industry Division
Materials for regenerative
medicine

October 1963
Housing Materials division

Vinyl chloride

October 1961

Plastics

Entered the housing material business withthe sale of adhesives for plywood

Plastics Division I

Plastics division

Flow of major structural
reorganization and the timing of
the start of dealing in major items

7 Inabata Integrated Report 2021

Plastics division spun off from Chemicals division
Also expanded market to durable consumer goods as the types of plastics
increased and processing methods advanced
Resins(Polypropylene, etc.)

Compounding of resins

Plastics Division II
Sporting goods

Film products

Inabata Integrated Report 2021

8

In 2021

Our Company At a glance

We are advancing further by building a strong foundationin growth fields.

FY2020Consolidated Results

Net Sales

Operating Profit

577.5

14.9

billion JPY

Information & Electronics
Segment Assets

99.5

billion JPY

Number of
manufacturing andprocessing subsidiaries

1

46.6

billion JPY

Number of
manufacturing andprocessing subsidiaries

2

Life Industry
Segment Assets

20.4

billion JPY

Number of
manufacturing andprocessing subsidiaries

2

129.5
billion JPY

Number of
manufacturing andprocessing subsidiaries

17

As of March 31, 2021

17

Unconsolidated:
Others

39
224.5

%

billion JPY

42
6.3

%

%

Displays
Semiconductors

billion JPY

billion JPY

637.3

%

billion JPY

91.3

billion JPY

101.5

The Americas

EuropeNortheast Asia

Japan

billion JPY%

billion JPY

Functional
chemicals

EuropeNortheast Asia

Japan

577.5

27%

47%

billion JPY

Southeast Asia
and India 21%

Food products

Molding materials

Southeast Asia
and India

2%

Northeast Asia

9.0

157.2

billion JPY(66 employees)

billion JPY(461 employees)

The Americas

20.0

Japan

Southeast Asia
and India

122.1

%

22%

Sales by region

EuropeOA,
electrical andelectronic
products

4,203

The Americas

billion JPY

38
5.6

4,203
2%

3%

Home
products%

Consolidated:

bases

6%

Pharmaceuticals

43
248.8

60

59%

Construction
materials
Automobile
component materials

656

11%

Coating materials

%

About

Number of employees by region

Environment
and energy

Digital printing

12
66.6

overseas
locations

Number of Employees

billion JPY

269.0

billion JPY(268 employees)

billion JPY(935 employees)

billion JPY(2,473 employees)

OthersPlastics
Segment Assets

Related Data
Overseas
networkDyes and others

Chemicals
Segment Assets

Composition of Products
and Materials

Materials forautomobiles

Films andsheetsConsolidated
subsidiaries

22

Domestic:of them are manufacturing
and processing subsidiaries

7

Overseas:

37

Sales of manufacturing andprocessing subsidiaries

51.8

billion JPY*Simple aggregate value*Sales for other segments was 0.0% and operating profit was 0.9%

9 Inabata Integrated Report 2021

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10

For 2030

Our Company Medium- to Long-term Growth Strategy

We will create value needed by future generations
through our unchanging sound and solid strength.
Although the society and economy around us has undergone significant changes, such as the impact of the COVID-19
infection, our Group company’s business model based on the functions of a trading company has remained
unchanged. We seek to enhance our corporate value while responding to changes in the environment.

Target for the fiscal year ending March 31, 2024

Our vision for 2030

New medium-term business plan

New Challenge 2023

Consolidated Sales

670.0(NC2023)

billion JPY*1

During the three years of NC2023, the second stage of our long-term vision, we plan to make up for the delay in businesscaused by the outbreak of the COVID-19 pandemic at the end of the previous medium-term business plan (*2) andstrengthen our efforts in markets where future growth is expected, such as those for products with reduced
environmental impact, with the aim to achieve our targets in the final fiscal year.

Stepping up investments to expand trading businessand enhancement of financial standing
Quantitative
targets
KPI

Profitability

KPI

Operating Profit

Ordinary Profit

Net profit*3

16.5 billion JPY

17.0 billion JPY

16.0 billion JPY

ROENet D/E Ratio

Equity ratio%or less

8

0.3

50

Long-term vision

IK Vision 2030

Consolidated Sales of1trillion yen

IK Vision 2030 outlines how the Group envisions itself around 2030. We will continue to upgrade our
trading company functions, which are the foundation of our company, and actively invest in businessfields and domains where we can harness our strengths at each stage of the medium-term businessplan to achieve our long-term vision. We aim to further improve our profitability by optimizing ourbusiness portfolio in response to changes.

Further enhancing multifaceted
capabilities such as manufacturing,logistics, and finance,in addition to trading

Trading% or more*Estimated exchange rate USD1=JPY105

Intensification of investment targeting future growth
Key investment fields and domains

Business
portfolio

Information &Electronics
Renewableenergy field(including batteries)

ChemicalsLife Industry

Plastics

Mobility field

Upstream anddownstream domains infood and agriculture(processing functions inparticular)
Growth areas such as
regenerative medicine

Manufacturing andprocessing in theautomotive field(compounds, etc.)

Further upgrades to global management information infrastructure
Enhancement of human capital utilization efforts
Globalbusiness

Promotion of DX

Building management
information infrastructure
and upgrading security

Developing global staff
Improving diversity
Employee engagement

At least one-third of sales andoperating profit from businesssegments other thanInformation & Electronics and
Plastics segments

Sales and operating profit
generated outside of Japan70%

or more1/3

70%*1 Sales target on a pre-application basis for the new revenue recognition standard: 700 billion yen*2 New Challenge 2020, the four-year medium-term business plan that ended on March 31, 2021
*3 Net profit attributable to owners of parent

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12

Our Company The Process of Value Creation

We will strengthen our trading business with our human assets
and highly specialized knowledge at the core and create
new value by leveraging our multifaceted capabilities as a shosha,
or Japanese trading company.
Implementing

CapitalAs our customers expand their global presence, our strength lies in our ability to provide specialized services bysupplying them a wide range of materials that meet local needs. Our value creation originates from our human assets
of about 4,200 employees spread across about 60 bases in 17 countries around the world and knowledge gatheredfrom our everyday business activities.
Our global-minded staff with highly specialized expertise in chemicals and other fields combine their advanced
knowledge with various functions, such as manufacturing and processing, distribution, finance and productdevelopment, to resolve issues faced by customers and generate new businesses in different regions in the fields ofinformation and electronics, chemicals, life industry, and plastics.

our Mission

Functions x Segments

OutcomeCreated value

Net worth equity ratio
Financial
capital49%*

Functions

Business Segments

Robust financial base

Number of employees on
a consolidated basis

4,203

Manufacturing& Processing

Product
Development

Information &Electronics

Chemicals

P37

P39

Customers*

HumancapitalDomestic staff in Inabata’s trading
company: 787 employees

Suppliers and customers

Stage 1

Stage 2

Trading

NC
2020

NC
2023

Finance

Approximately

Customerbase

People x Expertise

P11
P23

10,000 companies
Established131years ago

Global businessSocial andbases inrelated capital About60

17countries

Logistics

Life Industry

Plastics

P41

P43

Long-term Vision

IK Vision
2030
P12
P26

Employees(organization)

Shareholders

Society

Corporate GovernanceRisk Management(symbiosis)

P49

Supporting our customers
through added value thatmeets their needs

Creating a work environmentthat is motivating andnurturing employees who can
perform globally

Substantial returns throughincreased shareholder value

Contributing to developmentof the local community bycreating economic andenvironmental value
through business

P65*As of March 31,2021

The Inabata Way of
Corporate GovernanceHonesty is the only
way to earn trustof society

Money should be earned by hard work.
We should steadily walk the tough path,
without thinking about earning moneyby luck or speculation. Human beings
must be honest. We must not rely onothers. The only way to earn trust insociety is to have a sincere heart.
*From Inabata’s 100-year History

The Inabata Way of
Social Symbiosis

Katsutaro Inabata
Founder

Participating in thedevelopment of society
using our fieldof specialization

Our founder, an engineer who studied
applied chemistry in his early years,
valued conscience and despised
fabrication. Such conscience is at thefoundation of our company. The spirit
and action that reflect our mission –contributing to the development of society
through our fields of expertise – defines
what we stand for.

Katsuo Inabata
Fourth President*From Inabata’s 100-year History

13 Inabata Integrated Report 2021

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14

Our Company Business Model

We will resolve challenges faced by our customers andsociety by operating diverse businesses originating fromour human assets and highly specialized knowledge,
with the trading function at the core.
Resolving challenges faced by customers
Business model 1

Business model 3

Product development
We focus on developing new commercial products byidentifying the value that society demands. We develop
a variety of products that meet the needs of ourcustomers by combining the know-how cultivated at
our trading as well as manufacturing and processing
bases in Japan and abroad. For example, as one of the
products to reduce environmental impact, we areworking on developing compounded products madefrom biodegradable biomass resin developed by
BiologiQ (headquartered in Idaho, USA).

processing subsidiaries around the world, with sales ofabout 51.8 billion yen*2. We are a shosha and our basic
business is trading. We consider the manufacturing andprocessing function as a tool that complements trading.
One of our major manufacturing and processing functions
is the plastics compound manufacturing business for ourplastics business.
*1 Number of consolidated subsidiaries for
manufacturing and processing at the end of
March 2021
2
* Simple aggregated value for FY2020

Case

P17

Case

Manufacturing& Processing

P19

Product
Development

Trading

A company on which both customers
and suppliers can rely

FinanceCollaborative
creation
We recognize that we have a corporate social responsibility
to view social issues as business opportunities and develop
our business with the aim to achieve sustainable growth. In
the food and agriculture sector, which is one of the priority
areas of our medium-term business plan, we are facing ashortage of supplies and labor due to the declining birthrate
and aging population in Japan. Additionally, there is also
growing consumer awareness of safety and security. We
will continue to create community-based businesses incollaboration with local partners, such as the production ofagricultural products in Yoichi, Hokkaido, and the wholesale
business of marine products in Amagasaki, Hyogo.
Case

P18

Business model 4

Logistics

Logistics
Based on product knowledge andknow-how cultivated over the years in our Group
companies, we propose and provide the optimum
distribution function to our customers with the help of
our trusted partners in warehousing and delivery
businesses. To our customers who operate businesses
around the world, we offer vendor managed
inventory* (VMI) based on our network and know-how.
We also run our own distribution center handling
automobile parts and resin materials in Indonesia toensure timely delivery and one-stop services.
*A system in which our company manages and replenishes
inventory on behalf of the customer. We use IT to analyze thecustomer’s production information and coordinate withmultiple suppliers and distributors to efficiently delivermaterials to the customers.

Case

15 Inabata Integrated Report 2021

Electronics, Chemicals, Life Industry, andPlastics. Finance, which is backed by our strong
financial standing, is also a basic function that
supports trading. We suggest and implement
solutions for our customers with the aim to
reduce financial burdens, avoid exchange raterisks and resolve other issues. We seek tofurther enhance our multifaceted capabilities
based on the trading function to respond tovalues required by society and the constantly
changing needs of our customers.

For society as a whole

People x Expertise

Business model 2

Our value creation originates from about 4,200
employees spread across about 60 bases in 17
countries around the world and knowledge
gathered from our everyday business activities.
Our global-minded staff with highly specialized
expertise in chemicals and other fields combine
their advanced knowledge with various functions,such as manufacturing, processing, distribution,and product development to resolve issues facedby customers and generate new businesses indifferent regions in the fields of Information &P20

Our strength lies in the ability to supply a wide
range of materials and products, including
chemicals, from raw material manufacturers to
end users, and provide specialized services bymaking full use of our multifaceted capabilities.
As our customers have become increasingly
globalized, our business development has also
become more extensive. It is increasingly
essential to manage not only the quality of
products and services, but also the soundnessof procurement flows and transactions throughout the supply chain. As a global company, weface a wide range of issues related to our supply
chain, including human rights, the environment,
business practices, and disaster response. If a
problem comes to the fore once, it can lead tocredibility issues. Based on the trust we havecultivated with our suppliers and customers over
our history of more than 130 years, we will

support the global supply chain as a company
that plays a role in the development of society.
Risk management

P65
Raw material manufacturers

global supply chain

The Inabata Group owns 22*1 manufacturing andLeveraging our multifaceted capabilities based on thebasic function of a trading company

Supporting the entire

Manufacturing andprocessing

Materials manufacturers

Parts manufacturers

Final product manufacturers

End users

Inabata Integrated Report 2021

16

Our Company Business Model

Business model 1

Business model 2

Manufacturing and processing

Collaborative creation

Case

Plastic compounds

Case

services for materials of the same quality.

The plastics business, which is one of Inabata’s key
businesses, expanded overseas using the strength ofthe plastic compound manufacturing business(compounding business) and grew to a segment thatamounts to 43%* of our consolidated net sales. As
Japanese electronics manufacturers transferred theirproduction bases to Southeast Asia in the latter half ofthe 1970s, we followed suit, building our first overseas
manufacturing and processing base in Singapore. And as
our customers in the office automation (OA) andautomotive industries broadened their businesses
globally, we expanded our trading and manufacturing
and processing bases in Southeast Asia, China, andMexico. Many of our major customers have production
bases around the world and need supply and distribution

By starting the compounding business at seven locations
in seven countries, mainly in Asia, we are able to offer
not only trading functions but also the added value that
our customers expect, and this has become the strength
for which we are preferred by our customers.
What are plastic compounds?
Kneading and coloring
pigments, additives,
other resin, etc.
Base resin

Plastic compounds
Coloring, addition of weather
resistance function, etc.

Business model for the plastic compound business

Local factoryof resinmanufacturer

Base resin

North America

Inabata’s local
trading operation
andcompounding
factory

Plastic
compoundproducts

Local factoryof resinmanufacturer

Base resin
Relatedmaterials

in-house processing,
mainly in Hokkaido.
In the fishery field,
we started
wholesaling fresh
Blueberries grown at Aikei Farms
fish and otherin Yoichi, Hokkaido
marine products at
the Amagasaki City
Local Wholesale Market, where there was a shortage ofplayers in the midstream and downstream areas.

In Japan, a labor shortage in agriculture and fisheries isintensifying due to the diminishing birth rate and aging
population, giving rise to societal challenges. This has led
to easing of regulations, creating new opportunities forcorporations to enter the market. We consider societal
issues as business opportunities and are working withlocal partners to create vertically integrated businesses
in the food sector to expand our business throughout
the value chain.
In the agricultural sector, we grow blueberries, our main
upstream agricultural product (raw material), as well as
garlic and other foods. In the midstream processing
business, we are focusing on developing processed
agricultural products and expanding sales of finishedproducts by strengthening outsourced processing and

By working together with our group companies to tackle
everything from production to sales, we aim tostrengthen our functions, differentiate ourselves, andincrease our earnings.

Approach to the value chain in the food sector

Asia
Local factoryof parts
molding
manufacturer

Vertically integrated food businessInabata’s local
trading operation
andcompounding
factory

Automotive,
OA,
home appliances

Raw material
production
Plastic
compoundproducts

Local factoryof parts
molding
manufacturer

Relatedmaterials

Mainlyautomotive

Raw material
procurement

Manufacturing
and processing

Wholesale

RetailAgricultural business(fruits, vegetables, etc.)

Fisheries business

Immediate response to customer transfers to otherlocations possible through information sharing

Information sharing on
customers and markets

Updated information on customers andmarkets through compounding business contributes
to expansion of trading businessJapan
Inabatahead office

Resin manufacturer’shead office

Collaborative value leveraging
specialized knowledge andnetwork of bases

Providing diverse value
through one-stop service
Manufacturer ofmolded parts

Product manufacturer’shead office

Having a manufacturing function enables us to gain more in-depth access to our customers’ production plans, new productdevelopment, and other information, which is a huge strength in the trading company business.
*Of the 577.5 billion yen in consolidated net sales for the fiscal year ending March 31, 2021, sales in the plastics segment amounted to 248.8 billion yen (43.1%).

17 Inabata Integrated Report 2021

Overseas fisheries businessInformation sharing on
customers and markets

Aikei Farms Yoichi Co., Ltd.

Ikkoen Co., Ltd.

Established in 2015, this company
produces blueberries and otheragricultural products in Yoichi,
Hokkaido, and engages incommunity-based businesses.

In October 2019, this company began wholesaling
fresh fish at the Amagasaki City Local Wholesale
Market, which handles marine products. In addition
to the head office and processing plant in Sakai City,
we opened another processing plant in Kanto(Chiba) in November 2016.

Strengthening cooperation
within the Inabata Group to
develop an integrated businesscovering upstream, midstream
and downstream businesses

In the agricultural sector, we will focus on the expansion of Aikei Farms, concentrating on mass production and shipment of our main
agricultural products while expanding our handling of final processed products. In the area of agricultural products, we are considering
establishing a frozen food processing plant in collaboration with partners. Outside Japan, we aim to work with DNI, our groupcompany in the U.S., to expand sales of marine and agricultural products in the North American market in addition to expanding ouroutsourced processing bases for marine products mainly in Southeast Asia.

Inabata Integrated Report 2021

18

Our Company Business Model

Business model 3

Business model 4

Product development

Logistics

Case

Eco-friendly plastic products

The problem of marine pollution due to plastic waste has
been intensifying in recent years. As a trading company that
deals with all types of synthetic resins in the chemicalindustry, we are working on projects to resolve the issue.
One such initiative is our focus on biodegradable biomass
materials to develop commercial products.
In 2018, we began handling NuPlastiQ*, a biodegradable
biomass resin developed by BiologiQ (headquartered in
Idaho, USA). We are currently manufacturing compounded
products blended with commodity resins at ourcompounding plant in Thailand and processing them into
finished garbage bags at our own plants in Japan andoverseas. We are working to expand sales through GroupCase

company Ordiy, which isstrong in downstream
distribution, including
major supermarkets andonline businesses, as wellas through partners who
have local governments ascustomers.

In Indonesia, which has seen remarkable economic growth
in recent years, the logistics infrastructure has not beenable to keep up with the rapid increase in the flow of goods,
and the problem of overdue deliveries has become aserious problem.
NuPlastiQ, a biodegradable biomass
resin developed by BiologiQ

As awareness of environmental issues continues to grow,we will continue to work on developing products that
reduce environmental impact, by utilizing the Group's
manufacturing and processing functions and networks.

Group sales network

Inabata: Head Office

Biomassbase resin

Product

Plastic compound bases(overseas)

Inabata Indonesia has set up large warehouses with astorage capacity of 5,000 tons to solve these problems. It
has developed a new warehouse business in Indonesia bymanaging its own inventory storage and transportation ofsynthetic resin products, which was earlier being
outsourced to local warehouses.
If the logistics route is complicated, such as going throughmultiple locations, it can adversely affect the efficiency ofdesign in the production process. To eliminate these

Manufacturing and supply flow of eco-friendly plastic products
The Group’s manufacturing and processing functions

Own warehouse operationin Indonesia

BeforeCustomers

Group sales company(domestic)Moreover, the company was also able to achieve the samelevel of logistics management as in Japan and meetcustomer expectations by using a warehousing company
with which we have a long relationship of trust in Japan as
our local partner for our own warehouse operations.

Logistics solutions using our own logistics warehouses

Product

Product

concerns, thecompany selecteda good location for
constructing thewarehouse. The
Inabata’s warehouse (Indonesia)
ground at the site
is stable and along the main road connecting the port andthe industrial park. To improve the efficiency of logistics, thecompany carefully selected a site where it would bepossible to consolidate warehouses for inventory storage.

(Various logistics/
retail)Major
supermarkets

Supplier:
Resin Manufacturer

Warehouse

After
Parts molding maker:
Local factory

Supplier:
Resin Manufacturer

Parts molding maker:
Local factory

Inabata’s
local
warehouse

Online shopping

Processed
compounds

Municipalities
Brand owners

Bag manufacturing bases(domestic, overseas)

Product

Building an integrated system in the Group ranging
from procurement and manufacturing to sales
NuPlastiQ is a thermoplastic resin whose main raw material is starch extracted from potato processing plant waste. It can becompounded with other resins to make films, sheets, bottles, and other products. NuPlastiQ is highly compatible with other resinsand can be compounded with a variety of resins ranging from petroleum-derived resins such as PE, PP, and PS* to plant-derived resins
such as PLA*. In addition, it has the property of strengthening the film, and improves the strength of a PE* film when blended with it.
This has led to a 30% reduction in the amount of petroleum-derived resin used in some cases. NuPlastiQ has excellent recyclability,
and it has been confirmed that the performance is retained even after it is recycled multiple times.
*PE (polyethylene), PP (polypropylene), PS (polystyrene), PLA (polylactic acid)

19 Inabata Integrated Report 2021

Consolidating warehouses that had been scattered across locations
to cover all the steps up to product storage in-house
Before establishing our own warehouse operation, we were using five warehouses belonging to local warehousing companies.
However, by consolidating our own warehouses to three locations, we have greatly improved our logistics efficiency. This has not only
solved the problem of delayed deliveries but has also enabled us to respond with even shorter delivery times.
Inabata Indonesia has succeeded in differentiating itself from its competitors as a sales agent capable of storing customers’ products
at its warehouse.

Inabata Integrated Report 2021

20

Strategies Message from the President

We have launched a new medium-term business plan,with the goal of making our long-term Vision a reality.
While maintaining our solid financial standing,we will focus on the growth investment mostsuited for Inabata.

Katsutaro Inabata
President

Reflecting on NC2020

We achieved our goals for ordinary profit and net
profit. We are moving on to the next stage,
based on our stronger financial standing
In FY2020, we continued to be affected by the spread of
COVID-19 throughout the year. Though sales were slightly
higher than the forecast we announced in August 2020,
they were down 3.8% from the previous year. All profits
reached record highs, and we achieved the goals forordinary profit set forth in our medium-term business plan,
New Challenge 2020 (hereafter, NC2020). This was mainly
caused by a decrease in selling, general and administrative
expenses as well as the reversal of allowance for doubtful
accounts. Hence, we cannot take these numbers as they
are, and assume that they are measurements of our true
capabilities. However, I would like to express my gratitude
to all of our employees for their hard work and their
dedication to doing their best in the face of significant
restrictions on our sales and various activities.
With regard to our progress with key initiatives, I will
begin with the “further broadening and deepening ofbusiness outside Japan.” The ratio of overseas sales tototal sales over the past four years has been around 53%,
which has not changed significantly. However, when we
consider the fact that the economies of Southeast Asian
countries suffered severe damage in the final year due tothe impact of lockdowns, especially in the first half of the

21 Inabata Integrated Report 2021

year, we believe that our overseas businesses are actually
growing. In particular, there was steady progress in theflat panel sector in China and in the automotive sector inSoutheast Asia.
Regarding our “focus on markets with growth potential andsectors that have yet to be developed,” in addition to theautomotive field as previously mentioned, we were able toestablish footholds in the environment and energy sectors.
The potential for working on alternative energy initiatives incollaboration with local power companies is great. In the
future, we will continue to aim for steady profitability inthese promising sectors. Our efforts to launch new
initiatives in the food business, including agriculture,building the supply chain—from cultivation to processing
and sales of agricultural products—is finally taking shape,
although it took longer than expected for us to break awayfrom the simple import and sales model. While it mighttake some time before we see tangible results, we hope tomake steady progress in the food business as a long-lasting
enterprise in an Inabata way.

workshops for overseas staff to deepen theirunderstanding of our management philosophy. As a result,
we were not able to make the progress we had expected.
We will continue to work on these issues by devisingvarious measures as we advance.
In the area of “enhancement of information infrastructure
essential for global management,” the core systems ofmajor overseas bases, for which standardization has been
completed, have entered the stable operations stage. Dueto this fact, steps for system integration with the head
office have also moved forward contributing to enhancing
our consolidated management.

Assessment

Key Initiatives
1. Further broadening and deepening of business outside Japan△

2. Focusing on markets◎

The automotive sector

with growth potential
and sectors that have
yet to be developed

The life science and medical sector

×

The environment and energy sector△

The food sector, including agriculture△

3. Further enhancing information infrastructure essential for global management◎

4. Stepping up investments to expand our trading business△5. Conducting continual reviews of assets and enhancing our financial standing◎

6. Establishing global human resources management△

Note: ◎＝good, △＝fair, ×＝bad

NC2020 Achievements (FY2017 to FY2020)
Change in Net Sales

Changes in Operating Profit(Billions of yen)(Billions of yen)

Net Sales

Operating Profit

800

586.6

20

621.1

634.7

600.3

577.5

400

On “investing more proactively to expand the tradingbusiness,” our new projects slowed and did not progress
as expected due to the spread of COVID-19 in the final
year of NC2020. Concerning the “establishment of global
human resource management,” we had to cancel the
Global Staff Meeting—which promotes mutual exchange
among staff in Japan and overseas. We also had to cancel

NC2020 Key Initiatives and Self-Assessment Table of
the Extent to Which They Were Accomplished

12.6

14.9

14.0

13.2

FY2018FY2019FY2020

13.5

14.5

15.5

10

5.9

0

FY2016FY2017NC2016

NC2020

Plans

630.0

FY2018660.0

FY2019700.0

FY2020730.0

0FY2016FY2017NC2016

NC2020

Plans

12.5

Inabata Integrated Report 2021

22

Strategies Message from the President

On “continual review of assets and enhancement offinancial standing,” our net debt-to-equity ratio and equity
ratio have improved significantly over the past four years,
and I believe that we have created a foundation for the
next stage.

2020. However, it is also a business opportunity. We willcontinue to enhance our expansion of environmental
impact-reducing products related to solar power
generation, hydrogen energy, and the like as a shared
theme for the entire company.

NC2023 Plans and Prospects

Naturally, there will be waves of change in businesses
that have traditionally been the cornerstones for revenue.
Our aim with the first key initiative we set up, “further
development of core businesses and horizontal
expansion into growth sectors,” is to make progress withinitiatives even in mature markets. For example, with flat
panels in the information and electronics business, wewill develop new customers in China and work onmaterials for new-generation flat panel displays thatcome after the organic ELs. In plastics, we will findproducts that respond to the shift toward EVs and thedevelopment of self-driving technology in the automobile
industry, which is our main field.

We will turn changes in society andcustomer needs into opportunities
In the new medium-term business plan, the New Challenge
2023 (hereafter, NC2023), we have not made any major
baseline changes compared to NC2020, as this is thesecond step towards implementing our long-term vision,
the IK Vision 2030. However, since the state of society andthe needs of our customers are always changing, naturally,
we must modify how we set our priorities and express ourideas in response to these changes.
If I were to give an example pertaining to the second key
initiative we set up, taking a “multi-faceted approach tomarkets with potential for future growth and steadymonetization efforts,” it would be that interest in theenvironment is growing faster than ever before. From an
ESG perspective, it is the responsibility of companies towork toward achieving “carbon neutrality by 2050,” which
was announced by the Japanese government in OctoberOn the other hand, we will continue striving to enhance
the information infrastructure essential for global
management to further boost our managementfoundation. In addition to advancing global management
using core systems, we will also move forward withdigital transformation (DX), which includes implementing
the latest “Zero Trust network” for information security so*Net profit = profit attributable to owners of parent*Net D/E ratio = (interest-bearing debt - cash and deposits) / equity capital*Sales target prior to applying the new revenue recognition standard: 700.0 billion yen*Assumed exchange rate: USD1=105 yen

NC2023 Key Initiatives and Quantitative Targets

that employees can work with peace of mind anywherein the world.
While we were able to achieve a certain degree of successin strengthening our financial base through the NC2020
period, we will continue our efforts to conduct continual
asset reviews and further improve the efficiency of ourfunds and assets. In this medium-term business plan, we
have clearly stated our goals to reduce the monetary valueof cross-shareholdings by half over the next three years.
We will utilize the proceeds from sales as a source offunding for growth investment, shareholder returns, andfurther improvements to our financial base.
Enhancing Our Nonfinancial Capital

We are creating a workplace based on
employee engagement, where each person
can make the most of their abilities
As a trading company, naturally, our people are our greatest
asset. That is why we held up “enhancement of humancapital utilization efforts” as one of the key initiatives for
NC2023. We will continue to focus on measures to increase
the job satisfaction of our diverse human resources andboost their abilities.

One of the bases for this is employee engagement. As
one of the indicators for monitoring, we began conducting
an employee satisfaction survey in Japan and overseas
this year. By identifying issues based on the results weobtain and implementing measures appropriate for eachcountry and region, we will create a more rewarding
work environment. Notably, active participation by female
employees in the workplace and the appointment of
women to management positions are issues that we needto address in Japan. We will continue to listen to the

Changes in the numbers of local employees and expats from Japan engaging in trading business outside Japan
Local employees

Expats from Japan

1,000

Net Sales

Operating Profit

Ordinary Profit

Net Profit

billion JPY

billion JPY

billion JPY

billion JPY

670.0

16.5

17.0

16.0

8

ROE

Net D/E Ratio

Equity ratio% or more

0.3

50

or less% or more

800

693

663

787

783

764

737

600

Key Initiatives for the Medium-Term Business Plan NC2023❶ Further development of core businesses andhorizontal expansion into growth sectors❹ Further upgrades to global management
information infrastructure❷ Multi-faceted approach to markets with potential
for future growth and steady monetization efforts❺ Continuous review of assets and further improvementof capital and asset efficiency❸ Intensification of investment targeting future growth❻ Enhancement of human capital utilization efforts

23 Inabata Integrated Report 2021

400

200

0

93

95

94

90

93

92

FY2015FY2016FY2017FY2018FY2019FY2020Inabata Integrated Report 2021

24

Strategies Message from the President

voices of our employees and provide institutional support.
In addition, in Japan, companies will be obliged to make aneffort to hire employees up to the age of 70 starting thisyear. We plan to design a system that does not view
rehiring retirees as a cost but as a growth strategy in whichknowledge and expertise are paid back to the company
from a long-term perspective.
From a global viewpoint, we will resume the previously
mentioned Global Staff Meeting, create a program forexecutives at overseas bases to be trained in Japan, andprovide an overseas training opportunity for young
Japanese employees. We aim to increase chanceswhere people can learn about the language and businesspractices of each other.
As a result of the COVID-19 pandemic, the digitization of
information dissemination has progressed faster than
expected, and the amount of information that each of us
comes into contact with is much greater than it was adecade ago. However, one of the most critical issues fora trading company is developing a discerning eye about
how to add value to such information. While taking
advantage of the efficiency of digital technology,
I would like to foster a creative organizational culture inwhich employees with discerning eyes—which can only
be developed face-to-face—work together and engage infriendly competition.

Improving Governance

We are working to reinvigorate the board of
directors as we clarify the direction andperspective on governance reform
Concerning enhancing corporate governance, I believe it
is essential to clarify not only the formality but also thedirection and the perspective of the changes made to the
Corporate Governance Code, which is updated every
three years. For example, as the number of outside
directors increases to more than one-third, themanagement style of the board of directors is expected
to shift from the traditional style of management to amonitoring style, and it will be necessary to focus moreon logical discussions to increase corporate value. The
board of directors of our company has been transformed
into a place for open exchange of views thanks to theexperienced outside directors. However, there is still atendency to focus too much on individual issues, and I
am aware that it is my role to lead discussions on the big
picture, medium- and long-term.
Concerning our succession planning, which is a frequently
asked topic by investors, we use external consultants to
conduct interviews with candidates. Results are fed backto the candidates to raise their awareness. The results arealso reported to the Nominating and Remuneration
Committee. We plan to continue these efforts to selectthe management team for the next period.
Towards Making Our Long-Term Vision a Reality

We will demonstrate the unique capabilitiesof our company where they are needed on-site
In the IK Vision 2030, our long-term Vision, we havestated that we will work on “further enhancing
multifaceted capabilities such as manufacturing,logistics, and finance, in addition to trading.” Amongthese capabilities, we believe there is a great deal ofroom for us to evolve concerning our manufacturing andlogistics capabilities. In particular, there are many issues
regarding the cost management of manufacturingsubsidiaries. We set up a project team last year which is
now making situations in the field visible and establishingrules. Manufacturing capabilities combined with sales

25 Inabata Integrated Report 2021

capabilities are major assets for the Company, such as inour plastic compound business, so it is essential to refine
the manufacturing capabilities themselves.
About logistics capabilities, there is plenty of potential for
us to expand the model of in-house warehousing anddelivery in Indonesia, which has become a precedent toother bases.
Financing is one of the core functions of a trading
company. I do not intend to deny the so-called “financeprojects,” but for projects that start with finance andpossibly end with finance, I will try to question “Why us?”and “What is it that they expect from us?”The business environment in which we operate and theneeds of our customers continue to change at a rapid
pace due to innovations in digital technology and theglobal pandemic. Because we are in such an era, weneed to distinguish what we need to change and what
we need to adhere to. We will continue to strive toimprove our corporate value by striking a balance
between our unshakable values based on our corporate
philosophy of love and respect for people, with thedecisive challenge of responding quickly to changes.
I would like to express my appreciation to ourstakeholders for their continued support.

Long-term Vision: IK Vision 2030
What Inabata envisions itself to be in the years around 2030

Formulated in May 2017

Functions

Scale of operations

Further enhancing multifaceted
capabilities such as manufacturing,logistics, and finance,in addition to trading

Achieving more than 1 trillion JPY
in consolidated sales at an early stage

Sales and operating profit
generated outside of Japan

Portfolio

70% or more

At least one-third of sales andoperating profit from business segments
other than the Information & Electronics
and Plastics segments.

Inabata Integrated Report 2021

26

Strategies CFO Interview

We are moving to the second stage for making our long-term
Vision a reality. We will make use of our strengthened
financial base to accelerate investment in growth,and work to further enhance our corporate value.
Inabata Group which completed the final year of the New Challenge 2020 (NC2020) medium-term business planin FY2020, launched a new medium-term business plan in April 2021. As we reached the milestone of the second
stage for making IK Vision 2030, our long-term vision, a reality, we asked Kenichi Yokota, director and senior
managing executive officer, to give a summary of NC2020 from a financial point of view and discuss futurefinancial and investment strategies.

summarize the company’s performance
Q Pleasefor the fiscal year, and during NC2020.

achieved record profits in the final
A We
fiscal year of NC2020, and though wewere significantly affected by COVID-19,
we worked hard and were able toproduce figures that were close
to our initial plan

In the first year of NC2020, we got off to an unexpected startwith the occurrence of bad debts in Europe, but in thesecond year, we steadily returned to nearly reach theplanned level. However, since we had set the bar high forthe plan, we needed to make a greater leap in the final year,
but that was when the COVID-19 pandemic struck.

Naturally, we thought it would be difficult to achieve ourtargets for the first half of the fiscal year, but in the second
half of the fiscal year, we were able to make a significant
recovery due to factors such as the economic recovery in the
Chinese market, as well as the rapid recovery of demand in
the automobile industry in Southeast Asia.
In this environment, consolidated net sales in FY2020
totaled 577.5 billion yen (down 3.8% from the previousyear). Operating profit was 14.9 billion yen (up 13.2%),
ordinary profit was 16.5 billion yen (up 16.2%), and profit
attributable to owners of parent was 13.7 billion yen(up 20.8%). We achieved record highs in all
profit categories.
By business segment, net sales were 224.5 billion yen (up2.7%, year on year) in the information and electronics
business due to strong production of panels for TVs in the
LCD business, our main field. Segment profit (operating
profit) was 6.3 billion yen (up 41.2% year on year) due to adecrease in selling, general and administrative expenses, aswell as a reversal of allowance for doubtful accounts.
On the other hand, in the plastics business, while demand
recovered sharply in the second half of the fiscal year—
mainly for high-performance resins for automobiles—theimpact of lockdowns around the world in the first half of the
fiscal year and the decline in commodity resin prices had asignificant impact, resulting in net sales of 248.8 billion yen

Consolidated results for FY2020 and target values
in the NC2020 medium-term business plan
FY2020 results

NC2020targets for FY2020

Net sales

577.5 billion JPY

730.0 billion JPY

Operating profit

14.9 billion JPY

15.5 billion JPY

Ordinary profit

16.5 billion JPY

16.0 billion JPY

Profit attributable toowners of parent

13.7 billion JPY

12.0 billion JPY

0.06

0.4 or less

Net D/E ratio(down 7.9% year on year) and segment profit (operating
profit) of 5.6 billion yen (down 9.7% year on year).
In the chemicals business, sales of materials for resins andadditives were generally sluggish due to the impact of the
COVID-19 pandemic, with net sales of 66.6 billion yen (down
10.2% year on year) and segment profit (operating profit) of
1.3 billion yen (up 9.2% year on year). In the life industry
business, net sales increased to 37.3 billion yen (up 1.2%
year on year) and segment profit (operating profit) increased
to 1.5 billion yen (up 34.0% year on year), mainly due to
steady growth in the food-related business. In these twobusiness segments, a decrease in selling, general andadministrative expenses was one of the factors that pushed
up segment profit.

tell us about the company’s
Q Pleaseprogress with key initiatives.

our financial position has improved
A Whilesignificantly, we will continue toproactively make investments for growthand strive to further improve our ROE

Kenichi Yokota
Director and Senior Managing Executive Officer
In Charge of Administrative Affairs

27 Inabata Integrated Report 2021

As for our status with regard to achieving our quantitative
targets during the four years of the NC2020, unfortunately,
we were not able to achieve the net sales targets, but wewere able to achieve the targets for ordinary profit and net
profit attributable to owners of the parent company, due tothe reversal of the allowance for doubtful accounts ofapproximately 750 million yen in the last fiscal year and adecrease in selling, general and administrative expenses.
Despite the COVID-19 pandemic, I feel that we managed
to come close to the targets of our initial plan.
With regard to making more proactive investment to expand
the trading business, which is one of the NC2020 key
initiatives, we have been affected by COVID-19, and to behonest, we have not moved forward as expected. In FY2020
in particular, many negotiations were conducted online,
which made it difficult to make major investment decisions.
However, achieving organic growth, rather than trying toboost consolidated figures through large-scale mergers
and acquisitions, is our basic strategy, and we have set
capital costs and hurdle rates for investments. In thatsense, I believe that it is inevitable that it will take sometime to achieve results, but we can also improve on thefact that we have been a little too rigid. I think we could be
more influenced by “animal spirits.” In other words, itwould be good for us to make ambitious attempts to
expand our businesses for profit. With that in mind, there
is a policy in our new medium-term plan to invest proactively
with the aim of making our long-term vision a reality.
With regard to another key initiative—conducting continual
reviews of assets and enhancing our financial standing—indicators such as our net D/E ratio and equity ratio have
improved much more than expected over the past four
years. On the other hand, I feel that ROE and otherindicators are somewhat lacking. Although we havebolstered our equity capital, from an investor’s
perspective, we need to raise our ROE a little more. I
believe that this is a medium- to long-term issue for us.

describe some of the key points
Q Pleasein the new medium-term business plan.

will focus on developing the next
A We
generation of profitable businesses, whilefurther strengthening our financial base

The new medium-term business plan, the New Challenge
2023 (NC2023) is positioned as the second stage of our

Inabata Integrated Report 2021

28

Strategies CFO Interview

NC2023 Quantitative Targets (FY2023)

BS comparison
FY2016 (start of NC2020)

FY2020 (NC2020 End of FY)(Billions of yen)(Billions of yen)

Current
assets238.4

Current
liabilities
Non-current
liabilities

Non-current
assets101.7

Net assets

Total assets

340.1

Total liabilities
and net assets

150.5(51.8 out of the above figure
are short-term borrowings)

Current
assets41.9

Current
liabilities(33.7 out of the above figure
are short-term borrowings)

147.6

Non-current
assets96.2

Net assets

340.1

Total assets

353.2

Total liabilities
and net assets

Net Profit

49.2%

0.16

0.06

ROE

4.7%

8.5%

7.4%

8.6%

Furthermore, we are working to conduct continual reviews ofassets and make further improvements to the efficiency of
our funds and assets. At present, our equity ratio is
approaching about 50%, so we would like to aim for 50% or
higher in the future. In addition, we plan to reduce themonetary value of strategically-held shares by half over the
next three years. The proceeds from sales will be used while
maintaining a balance between three measures: making

8.90

2.40

8.03

4.34

3.86

3.26

16.93

5.45

45.2%

0.19

One of those areas with potential for growth is the foodbusiness, including agriculture. We have already begun
blueberry farming in Hokkaido, and we are considering
operating a processing plant in order to add value. Throughdeeper involvement in our core businesses and throughthese sorts of investments, we would like to make an ROE
of 8% or more the norm.

0.86

2.01

Total

44.5%

0.28

We set a target for the net D/E ratio of 0.4 or less when
NC2020 began, and due to our work on improving ourfinances, we achieved a ratio of less than 0.2. Therefore, we
set a target of 0.3 or less for NC2023, and will shift our
direction towards making investments for growth in the future.

1.85

2.03

1.59

40.1%

Net D/E ratio

efforts to make our long-term vision, IK Vision 2030, a
reality. Our basic strategy is to continue on from NC2020,
and accelerate our investment in growth by making use of
our strengthened financial base.

2.31

3.86

Fixed investment

Equity ratio

50% or more

353.2

Cumulative total
for NC2020

Growth investment(Billions of yen)

Equity ratio

billion JPY

FY2020FY2018FY202017.0

Ordinary
Profit

FY2019FY2017FY20190.3 or less

175.8

(129.1 out of the above figure
are shareholders’ equity)

Investments and lending

FY2018Net D/E
Ratio

billion JPY(7.4 out of the above figure
are long-term borrowings)

16.0

billion JPY*Net profit = profit attributable to owners of parent*Net D/E ratio = (interest-bearing debt - cash and deposits) / equity capital*Sales target prior to applying the new revenue recognition standard:
700.0 billion yen*Assumed exchange rate: USD1=105 yen

Basic Financial Policies of NC2023 medium-termbusiness plan

investments for growth, shareholder returns, and bolstering
our financial structure.

❶ Cash utilization policy
Allocate cash earned in a well-balanced manner
toward the following three areas:
1) Investment in future growth2) Returns to shareholders
3) Strengthening of financial baseIn terms of capital strategy, we have increased surplus funds
in Japan through the sale of held shares, which we plan to use
to strengthen our overseas business base. During theprevious medium-term business plan, we increased capital by
about 10 billion yen for subsidiaries in overseas countries withhigh interest rates and subsidiaries with a weak financial base,which resulted in a decrease in non-operating expenses.
In addition, with regard to our policies for dealing withpurchases on a large scale—so-called anti-takeovermeasures—we carefully considered what our policies
should be, taking changes in the business environment
surrounding the company, recent trends in anti-takeovermeasures, and above all, the opinions of shareholders andinvestors in Japan and overseas, into consideration. As aresult, we made the judgment that from the viewpoint of
ensuring the common interests of shareholders, the needfor the policies had relatively decreased, and we abolishedthem in May 2021, a year ahead of schedule.

8% or more

ROE

16.5

Operating
Profit26.8(98.2 out of the above figure
are shareholders’ equity)

FY2017billion JPY

150.5

Non-current
liabilities(19.2 out of the above figure
are long-term borrowings)

Equity ratio/net D/E ratio/ROE

29 Inabata Integrated Report 2021

256.9

670.0

Net Sales❷ Basic Policy on Shareholder Return
Fundamentally, we will ensure that dividend per share
does not decline year on year by continually increasing
our dividends (adoption of progressive dividends).
- We will continue to target a total return ratio of
about 30–35%.
- We will swiftly and flexibly conduct treasury stockacquisition.
❸ Policy on reducing strategic shareholdings
Further review strategically held shares and reducethem by 50% in three years.

Dividends per share
(yen)
80

63
60

40

40

40

48

53

70*
Progressive dividends

20

Sales of strategically held shares(Million yen)

FY2017FY2018FY2019FY2020

Sales amount

9,017

5,298

3,026

2,944

0

FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023(planned)outline the company’s
Q Please
dividend policy.

will introduce progressive
A We
dividends, and implement shareholder
returns that are based on continuous
dividend increases

Inabata has long positioned returning profits toshareholders as one of its most important policies, with
an emphasis on stable and continuous dividends. We aim
for a total return ratio of around 30-35%, based on the
total amount of dividends and share buybacks. We
revised annual dividends per share for FY2020 to 63 yen,
10 yen higher than the initial forecast. In addition, we
have introduced “progressive dividends” from FY2021,
taking into account our dividend performance to date, toserve as an expression of our conviction that Inabata willcontinue to be a corporate group that will achieve stable
growth over the medium- to long-term (the next 10 to 20
years) and as an expression of the will of the
management team. During the NC2023, our policy is toconstantly keep the annual dividends higher than thepreceding year and not reduce them.
We will continue pursuing an optimal balance between
strengthening our financial structure, investing in growth,and returning profits to our shareholders, so that ourshareholders, investors, and other stakeholders will beable to say, “We are glad that we held our shares in Inabata
for a long time.”*As of August 2021

Inabata Integrated Report 2021

30

Feature

COVID-19

The Inabata Group, has been expanding overseas, mainly in Asia, and the global COVID-19 pandemic has
affected us in various locations. However, we are continuing our business operations, with the safety andsecurity of our stockholders, customers, business partners, employees and other stakeholders as our foremost
priority. We will continue responding to changes in the business environment, improving our profitability, andenhancing our sustainable corporate value, with our eyes set on the post-pandemic era.

The Pandemic’s Impact and Our Response
2020

The State of Major
Group Businesses

The Group’s
Response

First Quarter

Second Quarter

Third Quarter

The impact of COVID-19 spread across the world, andrestrictive measures such as lockdowns were
implemented overseas.
In the plastics segment, which makes up 40% of net
sales, lockdowns had a major impact at our manufacturing
and processing bases in Southeast Asia and Mexico. In
addition, the segment was affected by falling resin prices
due to the sharp downturn in the economy. In the
Information & Electronics Segment, the decline inbusiness was limited due to the steady operations of ourcustomers, panel manufacturers in China.

Despite the harsh circumstances, the economic situation
gradually trended toward recovery.
In the Information & Electronics Segment, sales of
FPD-related TVs and notebook PCs were strong, due to thedemand caused by remote work. In the Plastics Segment,
resin sales decreased in Japan and overseas, except for someproducts related to PCs and game consoles. In particular,
there was a decrease in sales in the automobile sector, mainlyin Southeast Asia. In the Life Industry Segment, sales offrozen fruits and vegetables were strong, due to demand frompeople staying at home. Sales of processed fish products forthe domestic conveyor-belt sushi industry also increased.

Despite the difficult situation, there were signs of recovery in the USA
and China. In the Plastics Segment, sales continued to be weak, with afew exceptions. Though sales in the automobile sector decreased, fromsummer onwards, the economy trended towards a rapid recovery. In the
Information & Electronics Segment, production of FPD TVs was strong,and sales continued to be steady. Items such as OA-related products, PCand game-related products, and frozen fruits and vegetables continued tosell well, due to demand from people staying at home, as well as toremote work.

In China, the economy headed towards recovery. The downward trend in
emerging Asian countries came to a halt.
In the Plastics and Chemicals segments, the market underwent a rapid
recovery, especially in the automotive sector. We were able to keep the
decline in sales to a minimum over the entire fiscal year. Compared to thefourth quarter in the previous fiscal year, sales increased in all segments.

At our bases in Japan and Thailand, we responded by
implementing remote work and flex time. In China, weestablished core time for employees to come to the office. In
Mexico, our manufacturing and processing bases were shut
down. In the U.S. and Germany, we responded by
implementing remote work. By having employees work fromhome and having flexible shifts, we were able to limit the
impact of COVID-19 on customer service and business
continuity at our trading company bases in Japan and overseas.

In Mexico, our manufacturing and processing bases
restarted operations. In Indonesia and Singapore, curfews
were lifted, and we began shift-based work.

We continued to implement remote work in Japan, the U.S.,
and Germany.
In Southeast Asia, we responded by implementing remote andshift-based work.

Due to COVID-19 infections in China coming under control throughout the
fiscal year, we responded by setting a core time for employees to cometo the office. In Japan, during the state of emergency declaration, we
responded by keeping in-person company attendance to 30% or less.

200

Sales Year on year
(billions of yen)

153.4 -16%

100

Fourth Quarter

128.7

154.1 -10% 138.4

150.9 +1% 153.1

141.7

2021/32020/32021/32020/32020/3

3.6+10% 3.9

2020/32021/3+11% 157.2

02020/3
5.0

Operating profit
Year on year
(billions of yen)

3.5

-36%

2.5

3.3

2.2

2021/3+33% 4.3

2021/3+56% 4.3
2.7

02020/3

Sales by segment(quarter)
Information & Electronics
ChemicalsLife Industry
Plastics(Billions of yen)
80
60
40
20
0

52.9
52.2
15.3
8.0
1Q

Operating profit bysegment (quarter)
Information & Electronics(Billions of yen)
2.5

1.5

ChemicalsLife Industry

0.5
0

60.9
53.4
15.4
8.6
2Q

67.0
58.6
17.5
9.9
3Q

2.1

2.0

1.0

Plastics

2021/3

1.7
1.1
0.4
0.3
0.2
1Q

68.6
59.4
18.3
10.7
4Q

2.0

1.6
0.2
0.1
2Q

0.5
0.4
3Q

Percentage change from the same period of theprevious year (quarter)
Segment
1Q
2Q
3Q
4Q

1.3
0.5
0.4
4Q

-4%

-4%

+8%

+10%

Japan

Chemicals

-16%

-17%

-9%

+1%

Southeast Asia

Life Industry

-15%

-3%

+9%

+13%

Plastics

-26%

-14%

-2%

+15%

Percentage change from the same period of theprevious year (quarter)
Segment
1Q
2Q
3Q
4Q

Chemicals

+0%
-37%

+74%
-40%

+51%
+45%

+38%

Northeast Asia
The Americas

Operating profit by area(quarter)Japan
Southeast Asia
Northeast Asia

Life Industry

-22%

+10%

+75%

+90%

Plastics

-69%

-24%

+11%

+56%

The Americas
Europe2020/32021/3(Billions of yen)
80
60
40
20
0

0.5
0

40.6

37.0

38.9

40.5

29.1
5.01.733.7
5.4 2.2

2Q

3Q
2.0

35.4

23.7
2.2

3.6

(Billions of yen)
2.0

1.0

72.2

63.5

1Q

1.5

71.2

61.9

Europe+105%*FY2020

31 Inabata Integrated Report 2021

Sales by area(quarter)

Information &Electronics

Information &Electronics

1.3

2020/3

1.3

1.4

0.7

0.8

0 0.1
0
1Q

0.7

0.1 0.6
2Q

1.2

Percentage change from the same period of theprevious year (quarter)
Area
1Q
2Q
3Q
4Q
Japan

-13%

-12%

+1%

+4%

Southeast Asia

-32%

-19%

+0%

+18%
+17%

Northeast Asia

-7%

+2%

+3%

The Americas

-30%

-13%

+2%

+6%

4Q

Europe

+11%

+0%

+14%

+47%

1.9

Percentage change from the same period of theprevious year (quarter)
Area
1Q
2Q
3Q
4Q

5.9
2.8

1.5

+25%

Japan

-18%

-4%

+54%

-90%

-33%

+12%

+67%

+17%

+6%

+7%

+398%

—

+46%

+163%

-34%

+14%

—

+173%

—

0.6

0.5

Southeast Asia

3Q 0

0.1
0.1
4Q

Northeast Asia

0.2

2021/3The Americas
Europe*FY2020

Inabata Integrated Report 2021

32

Feature COVID-19: The Pandemic’s Impact and Our Response

Action1

Case: Vietnam

Reconstructing our global supply chain

Delays in shipping by sea and air due to the global container shortage,
as well as rising freight rates
Our base in Vietnam got its start in 1996 as a representative
office in Ho Chi Minh City. Since then, it has developed into
a processing and trading base with suppliers and sales
partners, who are mainly overseas, and we have built a
supply chain centered on maritime transport.
From 2020 onwards, delays of deliveries transported by
sea and air, due to a global container shortage and rising
freight rates caused by the spread of COVID-19. It has

become difficult for us to deal with this issue via ourconventional supply chain, which was primarily based on
maritime transport. As a result, when quality and costconditions are suitable, we have shifted from suppliers in
China, Taiwan, and South Korea to those in Thailand andMalaysia. We changed our transport method frommaritime transport to overland transport, which is lesssusceptible to the effects of the COVID-19 pandemic, andattempted to create new systems to minimize its effects.

Impact on our Vietnam base, and measures taken in response
Supplier countries

China, Taiwan,
South Korea

Thailand,
Malaysia

South Korea
China

Form of transport

Maritime transportby ship

Overland transport
by truck

Time for delivery

Three days, prior
to the COVID-19
pandemic

TaiwanThailand
Vietnam+1 day to timeof delivery

Since January 2020, when the first case of COVID-19 was confirmed in Japan, we
have been taking measures to prevent infections among our domestic employees,
and in February 2020, we established a task force, under the direct control of thepresident, to further enhance and thoroughly implement those measures. The
COVID-19 information on internal website
measures included refraining from overseas business trips and installing alcohol
disinfectant at office entrances. We also distributed masks to all employees whocame to offices. We introduced flex time and remote work for employees as earlyas the end of February 2020. We lent out laptop computers and Wi-Fi routers forremote work to employees who needed them, and at the same time worked to
improve our environment and facilities. We then formulated guidelines to be used in
the event of an outbreak, and shared them across the entire company. In order toRemote training for new employees
prevent office infections, we made further revisions to rules, such as introducing
and promoting a web conference system and closing smoking areas. In April, whena state of emergency was declared nationwide, we reduced the percentage of employees who came to work to 30% or less, andestablished a website for information about COVID-19. We set up an environment for employees to be able to catch up with thelatest information as needed, relieve their psychological anxiety, and take thorough infection prevention measures on their own.
In May, we notified the entire company of our post-state-of-emergency declaration operational policy of “no entertainment” and“refraining from business trips and outside work.” Even after the declaration was lifted, we continued to take thoroughpreventative measures, such as setting up partitions in conference rooms and prohibiting employees from dining with otherpeople, both inside and outside the company. In April 2021, the induction ceremony for new employees was conducted online,
as in the previous year. In June 2021, the 160th Ordinary General Meeting of Shareholders was held at the Tokyo head office withall members of management participating online except for the President and one auditor, while avoiding close proximity andtaking thorough infection prevention measures. As of the end of August 2021, we have set the percentage of employees coming
to work at 30% or less. We will continue to implement thorough infection prevention measures.

Action3

Supplying from countries and manufactures capable of overland transport,
and minimizing impact on the supply chain as much as possible

33 Inabata Integrated Report 2021

2

Preventing infections in the office

Malaysia(currently unpredictable)

Overland transport by truck from Thailand and Malaysia
to Vietnam is less susceptible to weather conditions thanmaritime transport, so there was little concern about
deliveries being delayed. However, since overlandtransport tends to be more costly than maritime
transport, we proposed different delivery and costconditions to our customers, and established a flexible
system in order to meet each customer’s requirements.
In one case of overland transportation from Malaysia, we

Actionnegotiated directly with the Malaysian shipping company
and arranged trucks ourselves to transport the items
ourselves, directly connecting the supplier with the sales
destination to shorten transport time and meet demands
for immediate delivery. We offered more options in
response to these sorts of varied requests from ourcustomers, and worked to rebuild our supply chain
system to better meet their needs.

Promoting and setting up anenvironment for remote work

Our company—which started promoting remote work from a comparatively earlystage—implemented various schemes and measures through an equipment
system and internal communication to avoid decreasing task efficiency. For internal
communication, we have taken measures such as investing in equipment like a chattool that allows for closer dialogue. Furthermore, each team conducts regularmeetings , and by sharing information on the status of sales representatives in atimely manner, we are able to respond quickly to any problems, while building ateam structure that makes it easy for employees working in unfamiliar
environments to consult with others. In addition, where possible we have reduced
paper-based communications, moved to electronic approvals, and changed ourinternal systems so that people can work from home.

The Osaka Head Office after the promotion of
remote work

Inabata Integrated Report 2021

34

Annual Report Financial and Nonfinancial Highlights

Net profit per share

Dividends per share and shareholder return indicators

(yen)
250

(yen)
80

(%)
60

60

45

40

30

20

15

200

Total assets and net assets

Net sales

Total assets(Billions of yen)
800

(Billions of yen)
400

600

300

400

200

200

100

0

3/12

3/13

3/14

3/15

3/16

3/17

3/18

3/19

0

3/20 3/21(Fiscal year)

100

50

0

3/12

3/13

3/14

3/15

3/16

3/17

3/18

3/19

3/20 3/21(Fiscal year)

Net D/E ratio(Billions of yen)
200

15(Times)
2.0

150

100

1.0

5

50

0.5

3/13

3/14

3/15

3/16

3/17

3/18

3/19

0

3/20 3/21(Fiscal year)

3/12

3/13

3/14

3/15

3/16

3/17

3/18

3/19

3/20

(Billions of yen)
20

Net profit

ROE(Billions of yen)
15

(%)
30

10

20

15

10

3/12

3/13

3/14

3/15

3/16

3/17

3/18

3/19

3/20 3/21(Fiscal year)

0

3/15

3/16

3/17

3/18

3/19

3/20 3/21(Fiscal year)

Number of employees:
Consolidated and unconsolidated

3/12

3/13

3/14

3/15

3/16

3/17

3/18

3/19

0
3/20 3/21(Fiscal year)

Consolidated

Local employees engaging in trading businessoutside Japan and expat employees from Japan

Unconsolidated

Local employees(People)5,000(People)
1,000

4,000

800

3,000

600

2,000

400

1,000

200

0

3/12

3/13

3/14

3/15

3/16

3/17

3/18

3/19

3/20 3/21(Fiscal year)

Expat employees from Japan

0

3/12

3/13

3/14

3/15

3/16

3/17

3/18

3/19

3/20 3/21(Fiscal year)

Note: Figures are as of the end of March of each FY.

Note: Figures are as of the end of March of each FY.

CO2 emissions

Power used and paper purchased(t-CO2)800(1,000kWh)
2,000

600

1,500

4,500

400

1,000

3,000

200

500

1,500

Power used

3/12

3/13

3/14

3/15

3/16

3/17

3/18

3/19

3/20

3/21 0(Fiscal year)

0

3/12

3/13

3/14

3/15

3/16

3/17

3/18

3/19

3/20 3/21(Fiscal year)

Scope: Osaka Head Office, Tokyo Head Office, Nagoya Branch
Note: CO2 emissions have been calculated from the amount of power
used based on the CO2 emission factor for usage of power

35 Inabata Integrated Report 2021

0Paper purchased(1,000 sheets)
6,000

10

5
5

0

3/14

Nonfinancial Highlights

3/21 0(Fiscal year)

Net profit and ROE

Ordinary profit

3/13

1.5

10

3/12

3/12

Note: Since FY2014, we have used the total return ratio as an indicator ofshareholder returns

Equity capital(Billions of yen)
20

Total return ratio

150

Net assets

Equity capital and net D/E ratio

Operating profit

0

Payout ratio

Dividends per share

Financial Highlights

0 3/12

3/13

3/14

3/15

3/16

3/17

3/18

3/19

0
3/20 3/21(Fiscal year)

Scope: Osaka Head Office, Tokyo Head Office, Nagoya Branch

Inabata Integrated Report 2021

36

Annual Report Segment Overview

Goals and strategies for NC2023, the new medium-term business plan

Information & Electronics

Moving forward with deeper involvement ineach field, and aiming to obtain new businessWith display components, digital printing materials, materials
for semiconductors and other products as our
income-generating pillars, we are also venturing into new fields
such as agriculture, automobiles, and life sciences. We are also
focusing on IoT and renewable energy-related products, which
are expected to grow in the near future.

Toyohiro Akao

Masahiro Sugiyama

Director,
Senior Managing
Executive Officer

Director,
Managing Executive Officer

Segment performance overview
Target values for the final fiscal year of NC2020

Sales

Operating profit

Sales 261.0 billion JPY(Billions of yen)(Billions of yen)

300.0

8.0

Operating profit 4.4 billion JPY

214.9 217.9 218.6 224.5

4.81

6.32
4.48

4.0

200.0

• With some exceptions, the impact of the spread of
COVID-19 was positive, such as increased demand for0
100.0
consumer electronics against the backdrop of growth-2.04
in remote work, as well as the reversal of allowance for-4.0
0 FY2017 FY2018 FY2019 FY2020
FY2017 FY2018 FY2019 FY2020
doubtful accounts, and we achieved our target values
for operating profit.
• By product category, sales of LCD-related products, including our well-regarded panels for TVs, were strong, and sales ofsemiconductor-related products for 5G and other communication networks, as well as rechargeable battery-related products in theenergy field, increased. On the other hand, in the digital printing field, demand for office and industrial products cooled sharply, but
we made a recovery through consumer products.

Business environment and strategies
Displays

Digital printing

Semiconductors and 5G

Business environment (Continued growth of theChinese market
Expansion of display partsfor automobiles
Addressing intensifying
competition and changes in trends

Expansion of the industrial
inkjet market
Advancement of paperlessenvironments

Opportunities

Increase in global interest in
renewable energy
Addressing variations in related
laws and regulations in different
countries and regions

Specialized skills in mask blanks,
which is one of our key products

A wide array of renewableenergy materials

A global network to maintain closeness with customers and the capability of providing processing and distribution services

Activities and strategies
Fully utilize business resources
focused on the growing Chinese
marketExpand product line-up centeredon components related to displays

37 Inabata Integrated Report 2021

Set up at the earliest a supply
system for new materials withrising demand
Start new transactions withmaterial makers and expand
product line-up

Profit drivers• Materials related to flat panel displays• Digital printing-related products

Growth drivers• Materials related to lithium-ion batteries• Renewable energy

NC2023 Quantitative Targets
With regard to the field of semiconductors and 5G, wewill aim to establish new businesses in the field ofelectronics aimed at IoT and Maas-related markets, while
focusing on sales of advanced electronics products, ourmain product line, which includes mask blanks.
In the environment and energy field, which we expect tobe a growth driver in the future, we will develop a wide
range of businesses in renewable energy, where further
market growth is expected.

Sales

Operating Profit andProfit Ratio(Billions of yen)(Billions of yen)

300.0

9.0

Operating Profit

246.0
226.0 236.0

200.0

6.0

(%)
6

5.05

5.35

2.2
100.0

0 FY2021 FY2022 FY2023

Profit Ratio

5.65

2.3

2.3
2

3.0

0

4

FY2021 FY2022 FY2023

0

Risks )

Expansion of IoT- and
MaaS-related markets
Intensifying global competition

Top-level information network ineach industry as a trading company

Another profit driver is the digital printing field, which iscontinuing to expand, mainly in inkjet and toner
materials. In this field, in response to recent changes indemand, we will shift to sales of materials forhigh-capacity inkjet printers for consumers, as well as
digital printing materials for industrial use, which are
increasingly being used in various fields.

Environment and energy

Strengths
Collaboration with major Japanesematerials manufacturers

The profit driver for this segment is the display field. At
present, LCD manufacturers have shifted theirproduction lines to China, and we have concentrated ourbusiness resources on the Chinese market as well.
During the NC2023 period, we are maximizing thosebusiness resources, and pursuing the business potentialof next-generation display materials, in parallel withworking to expand our conventional business throughthe acquisition of new commercial rights.

In addition to the solar cell materials and photovoltaic
power generation systems that we have worked on in
the past, we will start handling biomass power
generation systems, hydrogen production equipment,
and fuel cells for hydrogen mobility. Amidst the rapid
growth of the EV market, we will also continue toexpand our sales of lithium-ion battery materials.

Expand product line-up forautomobiles and strengthen supply
system
Propose total solutions forindustrial materials

Start multidimensional new
businesses catering to different
regions and needs
Develop employees withspecialized knowledge

Examples of initiatives
Anticipating an increase in demand, andfocusing on automobile displays
We are also focusing on sales to automotive display
manufacturers of polarizing films and other optical films,
as well as other mounting materials, in addition to panel
materials such as alignment materials for LCDs andvarious materials for OLEDs. The automotive display
market has seen technological advancements for both
LCDs and OLEDs, and these displays have become
available in various shapes, including super-long,irregular, and curved screens. Going forward, displays
will be utilized in parts where they have previously not

been used, and we will enhance our system inanticipation of a dramatic increase in the surface area on
which displays are installed in each automobile.

Inabata Integrated Report 2021

38

Annual Report Segment Overview

Goals and strategies for NC2023, the new medium-term business plan

Chemicals

Masahiro Sugiyama
Director,
Managing Executive Officer

Segment performance overview
Target values for the final fiscal year of NC2020

Sales

Operating profit

Sales 95.7 billion JPY(Billions of yen)(Billions of yen)

90.0

Operating profit 2.2 billion JPY

76.7

77.5

74.1

3.0

66.6

60.0

2.0

1.42

• Sales decreased because of sluggish sales in the1.20 1.32
former housing & eco materials business, as well as
30.0
1.0
0.41
the impact of the spread of COVID-19. Although themarket as a whole is on a recovery track, profits were0
0
FY2017 FY2018 FY2019 FY2020
FY2017 FY2018 FY2019 FY2020
also sluggish, and we did not achieve our targets.
• By product category, sales of materials for resins,
additives and paints, inks, materials for adhesives, and construction-related materials were generally weak. On the other hand, salesof materials for the automotive parts industry made a rapid recovery in the second half of the fiscal year, mainly in Southeast Asia.

Business environment and strategies
Functional chemicals

Automobile component
materials

Coating materials
Business environment (Increase in need for materials andnew formulations in light ofenvironmental regulations
Unstable supply of materials andprice fluctuations

Increase in demand centered on
developing countries
Response to global industrial
restructuring
Advancement of paperlessenvironments

Sales demand from foreign makers

Opportunities

Construction materials

Risks )

Expansion in demand for new
materials along with the structural
revolution of automobiles
Supply instability and price hikes
due to logistical dysfunction
Industry-specific quality control
standards and responsibility of supply

Need for construction anddistribution innovations in light oflabor shortage
Sluggishness of the domestic
marketA growing need for chemical recycling

A wide range of products and materials spreading from upstream to downstream
Local handling through overseas manufacturing and processing bases of the Group

Activities and strategies
Expand EV-related products andmulti-display-related products
and materials
Build a recycling-oriented
business model

Various opportunities are emerging in the mobility sector
amidst growing global environmental awareness andautomated driving technology advancements. For battery
thermal interface materials, which have been the mainstay ofour business, we must respond to the fragmentation ofneeds, and make proposals from a “thermal management”
perspective that integrates peripheral materials andcomponents, such as fireproof and waterproof materials. We
also need to develop our automobile display business, which
includes cover glass parts that take functionality and design
into account. The range of airbag-related products on the
manufacturer’s side is expanding, and we intend to promote
the global development of new products with “safety” as our
keyword. As for the circular economy, which is required forthe whole automobile industry, we will build a
recycling-oriented business model with the manufacturers towhom we supply products.
In the coating materials field, regarding materials forautomobile urethane coatings—a growth area—we will build
a global cooperation structure, mainly through our own
processing plants in China, and increase the number ofcontract processing companies in other countries toaccelerate growth. Domestically, we will expand sales of
products with high added value, such as adhesive materials
and pigments, and support overseas expansion by entering
into exclusive agency agreements with major manufacturers.
In the functional chemicals field, we will use our overseas
networks and chemical product knowledge and aim to expand
through improved functions as a contractor for major chemical
manufacturers. Specifically, we will bolster sales of urethane

Profit drivers• Business related to automobile component materials• Business related to coating (paints and inks)

Growth drivers• Business related to thermal interface materials(Sekisui Polymatech Co., Ltd.)• Eco-friendly materials for resin, etc. and newcommercial products
NC2023 Quantitative Targets
Sales

Operating Profit andProfit Ratio(Billions of yen)(Billions of yen)

90.0

3.0

Operating Profit

68.0

72.0

77.0

60.0

2.0

30.0

1.0

0

FY2021 FY2022 FY2023

0

Profit Ratio
(%)
6

1.50
1.35
1.20
1.9
1.9
1.8

4

2

FY2021 FY2022 FY2023

0

Collaborate with major housemakers for overseas expansion
Propose a supply chain leveraging
our strengths

Enhancing and expanding sales of our products
for the automobile market, and promoting
development of environmental products
utilizing our expertise
In the automobile market, which is continuing to grow, weare promoting enhancement and global development of ourthermal management-related products, which are
indispensable for EVs. With regard to cover lenses, which
protect display devices and sensors in automobiles, we are
expanding sales by offering a wide range of materials andcomponents to meet all needs. Given the global trend

towards reducing the burden on the environment, we arealso maximizing our abundant knowledge and experience—
only possessed by experts in the chemicals field—to engage
in product development with an
Circular economy
awareness of chemical anddiagramProdu
material recycling, as well as
ct
isldevelopment of
a
i
r
e
t
Ma
environmentally conscious
materials through collaboration
with businesses with anUsabundance of creativity.
on

39 Inabata Integrated Report 2021

Collaborate with Japanesecompanies expanding overseas
Expand business by leveraging
consigned production andprocessing companies

In the construction materials field, we will expand directtransactions with major housing manufacturers and builders,and pursue synergy with the integrated chemicals businessto make our presence felt in a difficult market environment.
Recently, major companies have been finding their way into
overseas markets, and we plan to leverage our global
business know-how to support the establishment of export
sales systems and shift to new, high value-added businesses,with a focus on BCP-related building materials.

in g
RecyclDevelop and offer new materials
and new formulation solutions
Accelerate overseas expansion
using the Group’s strengths
Strengthen BCP structure

In the Chemicals Segment, our most important strategy is toexpand sales of chemical materials for the automotive industry.

Examples of initiatives

Strengths
Knowledge of chemicals and a customer base nurtured over 130 years
Ability to build a supply chain suited to customer needs

and other heat-insulating materials, additives, and intermediatesthat consider global environmental protection and BCP.

e

With firm roots in our founding business of dyes, we deal in chemicals that serve as aplatform for all kinds of industries. We have a track record of separating businesses thatshow growth and pursuing new potential. We paved our way into global markets when
the domestic market matured. In April 2019, we integrated the Housing & Eco Materials
Division, which was dealing with materials that are close to final products, to provide
optimum products and services to the entire value chain.

Developing multifaceted products in a variety offields, with a focus on expanding our business inthe mobility sector

Inabata Integrated Report 2021

40

Annual Report Segment Overview

Goals and strategies for NC2023, the new medium-term business plan

Life Industry

Establishing areas such as regenerative medicine
as growth drivers, and expanding from upstream
to downstream operations in food and agriculture

After handing over the pharmaceuticals business to Sumitomo Pharmaceuticals Co.,
Ltd. (now Sumitomo Dainippon Pharma Co., Ltd.) in 1984, we began selling
pharmaceutical substances as our main business in this field. The origin of the foodbusiness goes back to the sale of cornstarch to the food industry. In 2012, we launchedthe Life Industry Segment because we believe that medical products as well as foodproducts contribute to creating a healthier and more comfortable life for consumers.

Toyohiro Akao
Director,
Senior Managing
Executive Officer

Segment performance overview
Target values for the final fiscal year of NC2020

Sales

Operating profit

Sales 65.0 billion JPY(Billions of yen)(Billions of yen)

60.0

3.0

Operating profit 2.8 billion JPY

42.3

39.0

40.0

36.9

37.3

2.0

1.92

1.56

1.31 1.16• Due to being significantly affected by the spread of
COVID-19, both sales and operating profit were
20.0
1.0
sluggish, and we failed to meet our targets.
• In the food products field, although sales of imported
00FY2017 FY2018 FY2019 FY2020
FY2017 FY2018 FY2019 FY2020
processed marine products decreased, sales ofprocessed products intended for conveyor-belt sushi
and frozen agricultural products grew, and overall, sales increased slightly. On the other hand, in the fields of pharmaceuticals
and home products, while sales of products related to insecticides and insect repellents were strong, sales of mainstay products
such as materials for pharmaceuticals were generally weak.

Business environment and strategies
Pharmaceuticals

Home products
Business environment (Expansion of advanced medicine andregenerative medicine markets
Intensifying price competition due to theemergence of generic medicines
Unstable supply of materials

Food products
Opportunities

Risks )

Expansion in demand for Japanese products indrugstores in the Asia region
Speed of change in market trends

Increase in interest in safety of food products
Boom of Japanese food overseas
Easing of agriculture and fishery regulationsin JapanSluggish domestic demand
Quality risks specific to food products

In the life sciences field, which contains our products such as
pharmaceuticals and home products, we have positioned theadvanced medicine field, which includes regenerative
medicine, as a growth driver in Japan. Going forward, we will
fully leverage the information networks and expertise wehave cultivated to develop various peripheral materials andsolutions by providing information to universities and private
research institutions, among other activities, in addition tocontinuing to make investments in venture companies. On
the other hand, with regard to materials for pharmaceuticals,
which is a profit cornerstone for us. We purchase most of
our materials from China, which has been affected by theunstable supply of materials over the past few years.
However, sales are expected to recover once this situation
has returned to normal. Furthermore, in the area of home
products, we will market antibacterial and antiviral products
more widely in response to the growing demand for suchproducts, as people grow more conscious of disease
prevention and hygiene.
In the food business, in addition to reorganizing our sales
structure, which includes our domestic subsidiaries, we
completed the consolidation of development teams into
Inabata & Co., Ltd. Due to the spread of COVID-19,
activities to create new frameworks, including those forexports, have been heavily restricted. However, we areaccelerating new initiatives, regardless of existing businessareas, in order for the business to become an engine for
growth in the NC2023, both in name and in reality. For
example, we are planning to sell Japanese and Southeast
Asian products to large-scale supermarkets in the U.S.,
starting with DNI, an American company that became awholly owned subsidiary in April 2020.

We are expanding the value we create for “upstream anddownstream domains associated with food products andagriculture” in line with the NC2023 key initiatives. In the
upstream area, in addition to the production of blueberries
and garlic in the town of Yoichi in Hokkaido, we are making
steady progress with wakame seaweed cultivation andwhitebait processing, mainly on Awaji Island, with the aim ofincreasing added value by having the Inabata Group handle
everything from production to sales.
In the midstream-to-downstream area, in addition to Ikkoen
Co., Ltd., a subsidiary with two domestic processing plants
for marine products, we are also considering a plan toestablish a frozen food processing plant in the Kanto regionin collaboration with frozen food manufacturers and farmers.

Profit drivers• Ingredients for medicines (new medicines)• Materials for home products

Growth drivers• Advanced medicine, such as regenerative medicine• Agricultural products, mainly blueberries• Construction of new business models(agriculture, processed food businesses)
NC2023 Quantitative Targets
Sales

Operating Profit andProfit Ratio(Billions of yen)(Billions of yen)

60.0

3.0

Operating Profit

40.0

38.8

42.8

46.0

20.0

0

2.0

Profit Ratio
9

2.20
1.90 2.00
4.9
4.8 6
4.7

3

1.0

FY2021 FY2022 FY2023

0(%)

FY2021 FY2022 FY2023

0

Examples of initiatives
Strengths
Collaboration with superior suppliers and information network on latest research and development
Strength of processing and distribution services using Group bases

Years of knowhow on a broad business range
from production to distribution

Teams and individuals with specialized knowledge in each field

Activities and strategies
Expand peripheral solutions in advanced andregenerative medicine
Catch up with and provide information on
PMD Act and cellular medicine

41 Inabata Integrated Report 2021

Support expansion and development ofJapanese products for Asian markets
Maintain hygiene management-related products
business, which is a stable profit base
Catch up with latest development trends

Accelerate expansion to overseas markets
Strengthen upstream businesses, such as
blueberry production
Start new food processing business as
downstream businessContributing to regional revitalization throughthe marine products business
Our Group company Inabata Fine Tech Co., Ltd. is engaging
in business for regional revitalization, from the production
and processing of wakame seaweed and whitebait on
Awaji Island to the sales of these products, based on thethemes of “manufacturing that aims to be safe and secure,”“sales through new logistics,” and “regional contribution.”
Inabata Fine Tech collaborates with local fishingcooperatives and processing contractors to thoroughly
implement integrated management, from germinatingwakame seaweed seeds to cultivation, processing, andsales, and from purchasing of whitebait to processing andsales. Inabata Fine Tech will continue to aim to provide safe
and secure products and build new sales channels.

Inabata Integrated Report 2021

42

Annual Report Segment Overview

Goals and strategies for NC2023, the new medium-term business plan

Plastics
We started dealing in imported vinyl chloride resin in 1949, and in 1959 we became thefirst in Japan to import and sell polypropylene. Currently, we sell commodity resins tohigh-performance resins for various fields such as automobiles, home appliances, OA
equipment, soft packaging for food, and sporting materials. We operate sevencompound plants abroad, as well as five film manufacturing plants in Japan andoverseas. As the plastic waste problem intensifies, we are also striving to develop
products focused on biomass materials such as biodegradable plastics as well ascomposites of CNF and plastic.

Leveraging our global network of bases
and focusing even more on expanding into
overseas markets

Noriomi Yasue
Director,
Managing Executive
Officer

Segment performance overview
Target values for the final fiscal year of NC2020

Sales

Operating profit

Sales 308.0 billion JPY(Billions of yen)(Billions of yen)

400.0

9.0

Operating profit 5.9 billion JPY

286.9 300.0 270.3

248.8

6.0

5.54

6.34

6.23

5.63

• During four years of the plan, operating profit was
200.0
robust. However, due to the significant impact of
3.0
lockdowns caused by the spread of COVID-19 in thefirst half of the fiscal year, we fell short of the targets
0
0 FY2017 FY2018 FY2019 FY2020
FY2017 FY2018 FY2019 FY2020
for both sales and profit.
• Sales of commodity resins were weak overall, partly due tothe impact of the decline in resin prices in the first half of the fiscal year. Sales of high-performance resins declined for the entire year, despite
our attempts to make up for it with the rapid recovery in demand from the automobile industry and sales of products for notebook PCs.
• While sales of film-related products for commercial use decreased, domestic and overseas manufacturing subsidiaries performed well,
due to increased demand for products for home use. Sales of sheet-related products intended for use with beverages at convenience
stores and fast-food outlets declined, and sales of sports materials also fell significantly, due to the cancellation of sporting events.

Business environment and strategies
Materials forautomobiles

Molding materials

OA, electrical andelectronic products

Business environment (Need for environmental
consideration with weight
reduction
Expansion in demand formaterials due to compositionalchanges in automobile industry
Industry-specific quality
standards and responsibility
to supply

Scope for expansion ofoverseas business
Withdrawal of a major general
trading company that was a rival
Fluctuations in domestic
demandOpportunities

Stable demand among
Japanese OA device
manufacturers
Reduction in supply volume due
to decreased component size

Films and sheets

Sporting materials

Risks )
Broad scope for opening newmarkets for sheet products
Intensifying competition for film
products in domestic market

Expansion of global market
Shrinking domestic market
due to diminishing population

On the other hand, with regard to resin products for OA
equipment and home appliances, which have long been a
profit driver for us, we are growing existing sectors where
demand has been steady, with a focus on computers andprinters. We will also take on new challenges in response tosocietal and market changes, including the development of
products that reduce the burden on the environment, suchas recycled resins and biomass-derived products.
The market for domestic film and sheet-related products, amature market, is entering a period of industry restructuring.
Using our knowhow from managing five plants in Japan andoverseas for the manufacture and processing of films andsheets, we will demonstrate leadership and work to expand
the scale of our business, which includes mergers andacquisitions. We have also started a new recycling businessFor sports materials, where our mainstay product is grip tapefor tennis rackets, we will expand sales channels and uses
for our products by taking advantage of our high global
market share, together with seeking business opportunities
in new related products such as sportswear.

Profit drivers• Resins for automobiles, OA equipment,
and home appliances• Film-related business, including manufacturing
and processing

Growth drivers• Sales to global users• Greater expansion into foreign business(areas and sectors)

NC2023 Quantitative Targets
Sales

Operating Profit andProfit Ratio(Billions of yen)(Billions of yen)

400.0

9.0

Operating Profit

267.0

284.0

300.8

Profit Ratio
(%)
6

6.25

6.70

7.05
4

6.0

2.3

200.0

2.4

2.3
2

3.0

0 FY2021 FY2022 FY2023

0

FY2021 FY2022 FY2023

0

Examples of initiatives

Global environmental issues including pollution of oceans due to micro plastics

Strengths
A customer base built over the company’s long history
Detailed local response capability using network of bases around the world
Ability to provide added value including plastic compounding in own factories and VMIs

Ability to propose monomaterials and eco materials
from outside of Japan

High share in niche markets

Ability to develop and propose new products using own
manufacturing bases in Japan and abroad

Activities and strategies
Strengthen and expand overseas business structure
Strengthen and expand plastic compounding and distribution function

43 Inabata Integrated Report 2021

Our resin compound plants, which were established for the
purpose of processing and supplying resin products fromlocations in close proximity to our customers, are having a
positive impact on the entirety of our synthetic resin
business. In order to meet more diverse and advancedneeds, we will strengthen and standardize the management
systems for quality and safety at all of our global bases in thisbusiness. Notably, we will continue to focus on supplying
resins to Japanese and non-Japanese manufacturers incooperation with our domestic and overseas bases, with theautomotive industry as a key topic for us. At the same time,
we will continue to dig deeper by proposing and sellingcommodities other than resins and EV-related products. In
addition, we will expand our business with non-Japanesemanufacturers by utilizing our global network of bases,
including our resin compound plant in Mexico.

for waste resin, in addition to the full-scale development of
biodegradable biomass resin products, as environmentally
themed initiatives.

Enter biodegradable
biomass plastic business
Demonstrate leadership with theaim of restructuring the industry

Offer products for overseas
markets as well as othersporting fields

Expanding our resin compound businessat each overseas basetrading subsidiaries, this segment has more than 60
employees stationed abroad in 11 countries.

For the Plastics Segment, we are expanding our businessin each country, with “getting close to customers andboosting customer satisfaction” as our key phrase. We
now operate seven plants in seven countries in thecompound business, starting with the Singapore plantestablished in 1978. In the area of film manufacturing, we
operate one plant in Thailand, one plant in Vietnam, andtwo plants in Japan. In Indonesia, we operate our own
warehouses and established our own delivery system.
Including employees who are stationed at overseas

Apple Film Da Nang Co., Ltd. in Vietnam

Inabata Integrated Report 2021

44

Annual Report Global Network

Utilizing our networks around the world
to offer new solutions
Trading company

Manufacturing and processing base

EuropeThe Americas
Northeast Asia

Japan

Southeast Asia

EuropeSoutheast Asia and India

Germany

Dusseldorf

Singapore

FranceWissous(suburb of Paris)
Normandy

Malaysia

Kuala Lumpur
Penang, Johor

Indonesia

U.K.

Telford(suburb of Birmingham)

Jakarta, Surabaya
Bekasi (suburb of Jakarta)

Philippines

Binan (suburb of Manila)

VietnamHanoi, Ho Chi Minh City
Haiphong, Da Nang

TurkeyIstanbul

45 Inabata Integrated Report 2021

Northeast Asia
Thailand

BangkokSamut Prakan(suburb of Bangkok)
Ayutthaya
Sriracha(suburb of Laem Chabang)

Myanmar

YangonIndia

Gurugram (suburb of Delhi)
Chennai, Pune

China

Hong Kong, Shanghai,
Wuxi, Ningbo,
Chengdu, Nanjing, Hefei,
Chongqing, Beijing,
Dalian, Tianjin,
Guangzhou, Wuhan,
ShenzhenTaiwanHsinchu, Tainan,
Taichung, Taipei

South Korea

Seoul

Japan

The Americas

Tokyo, Osaka, Nagoya
Shiojiri, Hamamatsu, Kirishima

United States

New York
Los Angeles
Detroit
Novato(California)

MexicoQueretaro, Tijuana
Silao

Brazil

Sao Paulo

Inabata Integrated Report 2021

46

Annual Report Regional Overview

Southeast Asia and India

3.7 billion yen
Consolidated number of employees 2,473

Sales

122.1 billion yen

OperatingprofitWe have 10 manufacturing and processing bases in the region and are focusedon expanding business in each segment.
Southeast Asia is an important region where our processing bases for plastic compound, our key business, areconcentrated. We produce plastic compound products, mainly for three major fields of electric and electronic products,
office automation (OA), and automobiles and motorcycles, at 28 bases across nine countries. In the future, we seek toexpand our business in the automotive field, which is rapidly growing in Southeast Asia, while also focusing on
developing new products and materials for the fields of energy, agriculture, and food products. Within the energy field,
we particularly aim to work on products and materials to reduce environmental impact and generate solar power.

Shinya Kawai

Major businesses

Executive Officer
General Manager,
Southeast Asia

• Plastics for automobiles, home appliances,
OA equipment• Materials for printers• Rubber materials and additives for the
automotive industry• Materials and products for packaging

Focus
Supply of biomass materials

Trading company
Manufacturing and processing baseCompany
Gurugram

India

Myanmar

Pune

Chennai

PenangKuala Lumpur

Malaysia
Johor

Singapore
Indonesia

JakartaBekasi

2.6 billion yen
Consolidated number of employees 461

Sales

157.2 billion yen

SurabayaOperatingprofitWe are expanding Inabata’s core businesses by harnessing our network spreadover 19 cities in China, Taiwan, and South Korea.

Kazuhiro Hanaki
Executive Officer
General Manager,
Northeast Asia

0.4 billion yen
Consolidated number of employees 268
OperatingprofitWe are involved in businesses in the automotive, energy, food products and medical fields, which are our key areas. We mainly deal inelectronics materials, digital printing materials and functional chemicals. In addition to selling plastics for the automotive industry in Mexico, we
are also expanding our plastics business to Central and South America through expansion in the home appliance and aviation industries, among
others. In Brazil, we are focused on selling plastics for automobiles and motorcycles, and functional chemicals.
Major businesses• Electronics materials (including semiconductors)• Digital printing material (inkjet, toner)• Functional chemicals • Plastics for the automotive industry• Processed products in agriculture and marine industries• Components related to the energy industry• Pharmaceutical ingredients

Trading company
Manufacturing and processing baseCompany

Detroit
NovatoLos Angeles United States
Tijuana

Vietnam

YangonAyutthaya Da Nang
Bangkok
Binan
Samutprakan
Sriracha
Ho Chi Minh City Philippines

20.0 billion yen

In addition to our businesses in the United States and Mexico, we are working toward
expansion in South America with a focus on Brazil.

Haiphong

ThailandAs part of expanding our lineup of products that reduce environmental load, inline with the key initiatives of NC2023 new medium-term business plan, we
began dealing in biomass ingredients used as power generation fuel for powercompanies in Japan. We also connected the plastic compound function in
Thailand and the manufacturing and processing function in our domestic andoverseas Group companies to develop trash bags containing biomass
ingredients. As a trading company dealing in resin products, we will continue
to offer products and materials that give due consideration to the environment.

Northeast Asia

Hanoi

The Americas

Sales

New York

Mexico

Focus
Processed food business in the US

Silao

Queretaro

In April 2020, we integrated our food business in North America withGroup company DNI Group Inc. We seek to focus on processed
agricultural products and developing new products, while expanding
our existing business in processed marine products for the growing
U.S. market.

Brazil
Sao Paulo

9.0 billion yen

Sales

EuropeOperatingprofitConsolidated number of employees

1.0 billion yen

66

We operate businesses centered on chemicals, energy, automobiles, life sciences andother fields, taking advantage of our unique mobility.

In this core region that accounts for 27% of our consolidated sales, we offer businesses leveraging our network
spread over 19 cities in China, Taiwan, and South Korea. Starting mainly with flat panel display components, we arefocused on plastics for automotive, OA, and electric and electronic products. We expect a further increase in profits in
our China business, where we seek to proactively invest our management resources in growth sectors, such as
semiconductors, 5G, sensors and robots.

In Europe, we deal in a wide range of products in various segments, such as inkjet materials, energy-related products, automobile components
and functional chemicals. Our Group companies manufacture and sell medical products, materials for cosmetics and other products in France.
In the future, we also seek to focus on businesses in the environmental sector, such as selling thermal interface materials for the EV battery
field and developing plant-based materials for the cosmetics field.

Major businesses• Inkjet products and materials• Various materials for secondary cells• Pharmaceutical ingredients materials for cosmetics• Functional chemicals• Plastics for automobiles, and OA equipment• Components for flat panel displays• Functional chemicals compliant withenvironmental regulations

Focus
Set up distribution infrastructure in emerging countries
With the rapid spread of IoT technology, DX is accelerating in each field
and there is a spotlight on ZETA*, a next-generation low-power wide-area(LPWA) technology. Inabata Hong Kong joined Techsor Inc. and ZiFi Sense
Info Tech Co., Ltd. in March 2021 to provide ZETA products, technology,
and solutions globally.
* ZETA is a standard for the latest IoT compliant low-power wide-area (LPWA)
network developed by ZiFi Sense Info Tech Co., Ltd.

Trading company
Manufacturing and processing baseCompany

Beijing

Tianjin

Seoul

Hefei
Wuhan

ShenzhenHong Kong

South Korea

Nanjing
Wuxi
ShanghaiNingboTaipei

Guangzhou

Trading company
Manufacturing and processing baseCompany

DalianChina

ChengduChongqing

Major businesses

TainanHsinchuTaichung

Focus
Developing products for the medical and cosmetics fields
Our Group company Pharmasynthese S.A.S manufactures
pharmaceutical ingredients and materials for cosmetics and is developing
allergy drugs in the medical field. In the cosmetics field, we plan tolaunch plant-based materials effective in moisturizing, anti-oxidizing, andalleviating atopy.

U.K.

TelfordNormandy

Germany

Dusseldorf
WissousFranceIstanbul

TurkeyTaiwanNote: Figures for sales and operating profit are based on FY2020, and the consolidated number of employees is as of March 31, 2021.

47 Inabata Integrated Report 2021

Inabata Integrated Report 2021

48

ESG Information

Corporate GovernanceManagement (As of July 1, 2021)
Audit & Supervisory Board Members

Directors
Katsutaro Inabata

Toyohiro Akao

Takashi Mochizuki

Director, President

Director, Senior Managing Executive Officer
Information & Electronics, Life Industry,
the Americas, Europe

Audit & Supervisory Board Member

Audit & Supervisory Board Member

Apr. 1978 Joined Inabata & Co., Ltd.
Jun. 2008 Executive Officer
Jun. 2018 Audit & Supervisory Board Member(present)

Jul. 2001 Joined Inabata & Co., Ltd.
Jun. 2017 Executive Officer
Jun. 2020 Audit & Supervisory Board Member(present)

Katsuya Yanagihara

Jan. 1989 Joined Inabata & Co., Ltd.
Dec. 2005 Director, President (present)

Apr. 1982 Joined Inabata & Co., Ltd.
Jun. 2015 Director, Senior Managing Executive
Officer (present)

Nobukazu Kuboi

Kenichi Yokota

Masahiro Sugiyama

Yoshitaka Takahashi

Director, Senior Managing Executive Officer
Administrative Affairs

Director, Managing Executive Officer
Chemicals,
Information & Electronics (assisting),
Northeast Asia

Audit & Supervisory Board Member

Audit & Supervisory Board Member

Apr. 1977 Joined Honda Motor Co., Ltd.
Jun. 2009 Full-time Corporate Auditor, Yachiyo
Industry Co., Ltd.
Jun. 2014 Outside Audit & Supervisory Board
Member, Inabata & Co., Ltd. (present)

Apr. 1995 Appointed as public prosecutor
Apr. 2006 Bar admission
Dec. 2007 Partner, Daiichi Legal Professional Corp.
(present)
Aug. 2015 Outside Director, Gunosy Inc.
Jun. 2018 Outside Audit & Supervisory Board
Member, Inabata & Co., Ltd. (present)

Jul. 1996 Joined Inabata & Co., Ltd.
Jun. 2017 Director, Senior Managing Executive
Officer (present)

Jul. 2002 Joined Inabata & Co., Ltd.
Jun. 2018 Director, Managing Executive Officer(present)

Noriomi Yasue

Kenji Ohno

Director, Managing Executive Officer
Plastics, Southeast Asia

Director

Audit & Supervisory Board Member

Apr. 1987 Joined Sumitomo Chemical Co., Ltd.
Apr. 2006 General Manager, Legal Dept., Sumitomo
Chemical Co., Ltd.
Apr. 2016 Executive Officer, General Manager ofLegal Dept., Sumitomo Chemical Co., Ltd.
Apr. 2020 Managing Executive Officer, Sumitomo
Chemical Co., Ltd. (present)
Jun. 2021 Director, Inabata & Co., Ltd. (present)

Apr. 1984 Joined Sumitomo Corp.
Oct. 1991 Joined Century Auditing Corp.
(now Ernst & Young ShinNihon LLC)
Mar. 1995 Registered as certified public accountant
Jul. 2017 Representative of Satoshi Tamai Certified
Public Accountant Office (present)
Oct. 2017 Senior Advisor, accrea Inc. (present)
Mar. 2018 Outside Auditor, Toho Lamac Co., Ltd.
(present)
Jun. 2020 Outside Audit & Supervisory Board
Member, Inabata & Co., Ltd. (present)
Outside Auditor, PC Depot Corp. (present)

Apr. 1980 Joined Inabata & Co., Ltd.
Jun. 2018 Director, Managing Executive Officer(present)

Kiyoshi Sato

Kenji Hamashima

Director

Director

Apr. 1979 Joined Tokyo Electron Ltd.
Jun. 2003 President and CEO, Tokyo Electron Ltd.
Jun. 2011 Chairman of the Board,
Tokyo Electron Europe Ltd.
Nov. 2013 President, TEL Solar AG
Jun. 2017 Outside Director, Toshiba Machine Co., Ltd.
(now Shibaura Machine Co., Ltd.) (present)
Jun. 2019 Outside Director, Inabata & Co., Ltd. (present)
Outside Director, Mazda Motor Corp. (present)

Apr. 1982 Joined Ushio Inc.
Apr. 1999 President and Chief Executive Officer,
Ushio America, Inc.
Nov. 2000 Chairman and Chief Executive Officer,
Christie Digital Systems USA, Inc.
Oct. 2014 President and Chief Executive Officer,
Ushio Inc.
Jun. 2020 Outside Director, Inabata & Co., Ltd.
(present)

Takako Hagiwara
Director
Apr. 1984 Joined Sony Corp. (now Sony Group Corp.)
Apr. 2008 General Manager, Diversity Development Div.,
Corporate Human Resources, Sony Corp.
Apr. 2014 Representative Director, Sony Hikari Corp. and Sony
Kibou Corp. (now Sony Kibou/Hikari Corp.)
Jul. 2020 Representative Director, DDD Corp. (present)
May 2021 Outside Director, Twinbird Corp. (present)
Jun. 2021 Outside Director, Inabata & Co., Ltd. (present)
Outside Director, NEC Capital Solutions Ltd. (present)

49 Inabata Integrated Report 2021

Satoshi Tamai

Executive Officers
Kazuhiro Hanaki

Shinya Kawai

Yutaka Takahashi

General Manager,
Northeast Asia

General Manager,
Southeast Asia

General Manager,
Chemicals Division

Koji Nakano

Katsutoshi Tanaka

Tsuyoshi Maruta

Plastics (assisting),
General Manager,
Plastics Division I

General Manager,
Information & Electronics Division III

General Manager,
Information & Electronics Division I

Notes:
Directors Kiyoshi Sato, Kenji Hamashima, and Takako Hagiwara are outside directors.
Audit & Supervisory Board Members Yoshitaka Takahashi, Katsuya Yanagihara, and Satoshi Tamai are outside audit & supervisory board members.

Inabata Integrated Report 2021

50

ESG Information

Corporate GovernanceOutside Directors’ Roundtable Held online in May 2021
The quality of boards of directors has lately come under question,so we asked our outside directors, who significantly impact management decisions,the state and challenges of Inabata’s board.

but the company could be more spirited about making
bold investments. That said, with the extra available
investment capital this fiscal year and a new medium-termbusiness plan, there is movement towards making bold
growth investments. I think this is a wonderful trend.
Hamashima
You must have both organic growth and growthinvestment, and the results will show five or 10 years
later, like body blows in boxing. The three of us talked
about growth investing from a third party’s perspective,
and if Inabata is moving forward in this respect, it makes
our jobs more rewarding.

Toshiyuki Kanisawa

Kiyoshi Sato

Kenji Hamashima

My job

My job

My job

I was involved in management in the city
gas industry, a private sector with strong
public interest. These days corporations
are called to adopt sustainability, anddrawing from my own experience, I tried
to share advice on management andbusiness methods that respond to social
trends and the expectations andinterests of diverse stakeholders.

The last company I worked fordeveloped and sold semiconductor
production equipment used to
manufacture products such as flat panel
displays. Inabata deals in materials andproducts for semiconductors anddisplays, so I like to think I come from asimilar field. I also feel it is my duty tosupport further globalization using myexperience in corporate management
and overseas business.

I spent 24 years abroad and haveextensive experience in negotiating, andI believe my skills carry over in the
shosha, or a trading company business.
I also have experience in M&A, so I hopeto offer support in the area of growthinvesting. That said, manufacturing andshosha have different perspectives, so I
hope to use this as a strength indiscussions and help boost the creationof new business and growth strategies.

Director
Term of office: Jun. 2017 – Jun. 2021

Director
Term of office: Jun. 2019 – present

Director
Term of office: Jun. 2020 – present

You mention there are more active discussions
on growth investing. What are your thoughtson the effectiveness of the board of directors?
Kanisawa
Like Mr. Hamashima said, judging by how the opinionsof outside directors are reflected in policies, it seems

our roles are acknowledged sufficiently. In that sense,
I believe the effectiveness of the board is guaranteed.
Although the ratio of outside and internal directors isgood, Inabata could do better on gender diversity.
Sato
The Governance Code requires gender equality.
Naturally, a global corporation should have women and
non-Japanese board members, but you cannot hire justanyone. They must have the expertise and experience
appropriate for the corporation’s growth strategy. For
this reason, diversity in directors is that much more
important for Inabata and its wide-ranging businesses.
Hamashima
Inabata is currently creating a skill matrix that visuallyshows the skills and expertise of directors, and thecompany is moving forward plans to hire a female outside
director. It is clear Inabata knows its own challenges andmakes efforts for improvements every year.

I would like to see Inabata reinstate its
former culture of investing toward growth.
— Kiyoshi Sato

Part 2. Our Aim in the Post-COVID-19 WorldPart 1. Board Meeting Agendas
The quality of boards of directors with outside
directors has lately come under question. Do thediscussions in Inabata’s meetings have a solid
grasp on challenges and an eye on the future?
Hamashima
I think we have extremely open discussions regarding
business investments and withdrawals, which are essential
for the shosha business. The problem is, there are fewer
growth investment projects than I had expected. Inabata isfounded on organic growth, but the company should also
look for growth investment opportunities like M&As.

51 Inabata Integrated Report 2021

Sato
Historically, Inabata has proactively invested in a variety
of fields, be that through capital investment or buying atechnology company and turning it into a processing
location. Recent internal discussions, however, seem tobe focused on relatively small-scale projects with lower
risk. I would like to see Inabata reinstate its former
culture of investing toward growth.
Kanisawa
It is true that Inabata has established a solid growth planthat thoroughly eliminates risks before they materialize,

For the last year, the COVID-19 pandemic
required major management decisions. How do
you assess the board’s response?
Sato
I would give Inabata an almost perfect score for its
general response. It began preparations for remote workat an early stage, procuring computers and otherwise
preparing for employees to work from home. And thiswas just in March of 2020. Inabata moved fast. The board
meetings were also made 100% online.

Hamashima
I agree. Inabata’s COVID-19 countermeasures are solid,
and although sales fell slightly, the company achieved its
highest level of profit yet.
SatoWith more people working from home, computer sales went
up. This helped the flat panel display materials business.
Hamashima
Inabata also managed expenses like transportation andentertainment expenses well.

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ESG Information

Corporate GovernanceIt goes without saying that Inabata’s
most valuable assets are its people.
— Kenji Hamashima

Kanisawa
Inabata did well discussing the management strategy
going forward (medium-term business plan) with a focus
on COVID-19 measures for the time being but also
predicting what the post-COVID-19 world will look like.
There is now a climate of discussing medium- tolong-term growth and investment strategies to respondto the post-COVID-19 world and its economic changes
and expansions.
Hamashima
With the distribution of the vaccine, I expect to first see
more active business negotiations with business
partners in and outside of Japan, which is fundamental
for a shosha.
Sato
A shosha conducts business based on commercial rights
and regions, so it relies on human interaction, that is,mutual trust between people and people, confidence
between companies and companies. I would like to see
Inabata really go for it and utilize the funds they havebeen holding back to sow new business seeds.

You say you discussed medium- to long-term
growth and investment strategies.
What were the angles of these discussions?
Hamashima
As Mr. Kanisawa mentioned, we are discussing the directionneeded to expand majority investments, and in thismatter, sustainability is an important angle. As a shosha,
Inabata has a diverse supply chain. They should leverage
this characteristic to offer business solutions in the fields
of human rights, fairness, environment and more.
Sato
A shosha handles products manufactured by othercompanies. It is crucial to thoroughly research how the
product is made, or whether there are human rights violations
or environmental problems in the manufacturing process.
Kanisawa
We must consider issues like climate change at an earlystage and link them to our growth strategies. Of course,
Inabata has many policies related to environmental
problems and human rights. In order to link these efforts
with increased corporate value, however, I think it is time
to put the efforts together into an Inabata Sustainability
Vision (tentative) and publish it externally.

I think it was well we discussed the management
strategy going forward predicting
what the post-COVID-19 world will look like.

long-term vision aims to increase the overseas sales ratio
from 50% to 70%. To achieve this, it is not enough forJapanese employees to supervise overseas local staff.
Inabata must train capable local staff into
management members.
Sato
I agree. With globalization, trying to manage anoverseas subsidiary with only Japanese members is notrealistic, both in capability and headcount. With
increasingly complex business environments, Inabata
must train local staff who have a solid understanding of
local business customs and human resourcesmanagement rules. They should be given opportunities
and actively promoted. I think a president from the local
community of the subsidiary should be in charge ofdrafting the subsidiary’s strategies.
Hamashima
Moreover, inviting management members from overseas
subsidiaries to join the Japanese management group willlead to the theme of diversity. I would like to mention one
more thing—many of Inabata’s management members
like executive officers and directors were hired fromoutside the company. This means Inabata hires theappropriate person according to long-term strategies,
including breaking into new fields, but it also shows
Inabata’s spirit of respecting different opinions andperspectives. It also symbolizes an open and flexible
corporate culture that welcomes all human resources fairly
and equally. This culture will be a great tool for attracting
accomplished human resources from around the globe,
and it should be part of the company’s message to society.

Lastly, what are your aspirations foryour positions?
Kanisawa
Traditionally, Inabata’s strength has been in its stance of
expanding business by nurturing trust between people
with the spirit of love and respect. Inabata will be
accelerating overseas expansion, but this stance iseffective in the global arena as well. I will retire from thisposition, but I hope to see Inabata continue growing
sustainably with solidarity between all workers, in andoutside of Japan.
Sato
What does Inabata want to be? Does it want to expand as
a general shosha, take one portion of the general shosha
market, or become a specialized shosha that could also
become a manufacturer? I hope to contribute todecision-making regarding growth investing andstrategies through discussions on the company’s goals sothat there are no investments made simply “because they
had the money.”
Hamashima
I will contribute to achieving the optimum balance inshareholder return, growth investing and retained
earnings, based on future cash flow and financial
structure. Especially regarding growth investing, as adirector representing shareholders, I will support Inabata
in making investments that exceed capital costs andcreate synergy with existing businesses from a mediumto long-term view.

— Toshiyuki Kanisawa

Part 3. The Next Generation and Aspirations
To achieve sustainable growth, human assets
are key because they are the ones who carryout the medium- to long-term vision andstrategies. What policies do you think areimportant going forward?

53 Inabata Integrated Report 2021

Hamashima
It goes without saying that, as a shosha, Inabata’s mostvaluable assets are its people. The current theme would
be globalization of the management team, including
directors and audit & supervisory board members. The

The roundtable was held online to prevent the spread of COVID-19.

Inabata Integrated Report 2021

54

ESG Information

Q Based on your background, what do you

Corporate Governancefocus on during discussions?

A I want to contribute to developing humanresources and organizations that continuallytake on the challenges of changing times.

Interview with an Outside Director

Takako Hagiwara
Outside Director

Q When you took this position,

what was your impression of Inabata?

A I was very curious to see how a company

more than 100 years old creates innovation.

When I was first contacted, I read through the company’s
materials and talked with the president, other directors,
and audit & supervisory board members. The first thingthat intrigued my interest was the company’s history ofover 100 years. It is a company that has continuallycreated new value while dealing with constant changes
in society and time. I believe a company with a long
history has a strong core, so I looked forward to reading
about its history and talking with everyone. In every age,
workers in all sorts of positions faced changes, took on
the challenge of new businesses, and achieved
self-transformation with a solid foundation on Inabata’s
Mission, the “spirit of love and respect.” This is what led
to Inabata today. The “spirit of love and respect”
embodies the wisdom that carried the company
throughout the ages.
On the other hand, I must confess I was concerned that acompany with a long history may fall into a conservative
style of business or decision-making. I was curious to see
how a company overcomes this tendency to continue
taking on challenges.

55 Inabata Integrated Report 2021

Inabata puts effort into strengthening
corporate governance that supports corporate
value in the medium- to long-term. Takako
Hagiwara, Inabata’s outside director since June
2021, shares her honest opinions on thecompany’s corporate governance style andchallenges going forward. Ms. Hagiwara has along and wide-ranging professional backgroundthat includes human resources development in
the manufacturing and service industries andlaunching new businesses in the global market.

Q What are your candid opinions about the
preparations for and discussions
at board meetings?

A The discussions are straight-forward,

and I think the management team has agreat relationship.

I have only been to a few, but the straight-forward
discussions shattered my preconceived notions about
conservative tendencies. Opinions are shared honestly
by the president, directors, and audit & supervisoryboard members, and I think the team has a great
relationship. A new member like myself will havequestions about many things, and they made it easy to
ask anything. It was very reassuring.
They have also shared information with me very well.
Someone from the concerned department would explain
the background of each topic on the agenda, and they held
separate explanations for each business area for me.
There was an exchange of opinions with other outside
directors and outside audit & supervisory board members
at an early stage, which helped in gaining a better
understanding of the company. Because of COVID-19, I
only met them virtually, but I was able to see thepersonalities of the members and understand thebackground to each project and discussion, which is not
obvious just from reading documents. They have made my
job as an outside director easy, and I am grateful for that.

I worked in the manufacturing industry for over 30
years, which became my professional foundation. Whena Japanese manufacturer takes on global competitionon the international market, changes in the businessenvironment are a daily occurrence. I took on new
challenges all the time through trial and error. Because I
have long been involved in human resources
development and planning and promoting organizational
strategies, I want to contribute to “developing humanresources and organizations that continually take on thechallenges of changing times.” Through my work as
director at a general hospitality company dealing in foodand health, I engaged in “employee healthmanagement” and learned to value the wellbeing(happiness, health) of people working in theorganization. Although I do not have experience in the
shosha industry, I have experienced the dynamism of
how “people” move an organization in the
manufacturing and service industries. I believe it is key
in business management.
At Inabata, as a shosha, people are the most valuableasset. The people are the ones who must achieve theparadigm shift outlined in the medium-term businessplan, including creating new businesses and global
expansion. People have a tendency to see the future as
an extension of today, and I like to show understanding
and compassion for this tendency while helping thembroaden their opportunities and overcome hurdles. Using
my expertise, I hope to create an environment that helps
human resources continually take on new challenges.

different values from different backgrounds, regardlessof gender, age, nationality, sexual orientation or identity,
disability or career, gave me important insights andtaught me important lessons in my own career. I know it
has also impacted the decisions I have made.
Understanding your current situation through diverse
views and values, and considering the direction of yournext move based on that, will broaden youropportunities and choices. I think this is fundamentallyan exciting way to live. Some people talk of “unlearning”
what you have learned in the past in order to learnsomething new. Sometimes it can be good to step awayfrom your 100-year-long history and look at the situation
with new eyes, from a different angle. This can makechallenges more fun and failures more constructive.
I would like everyone to see the benefit of diversity
awareness on understanding and decision-making.
At Inabata, many of the employees engage in diverseand global businesses, and in my conversations withthem I sense a strong understanding and interest indiversity. Inabata understands the importance ofpromoting women participation and global humanresources exchange and has established policies andvarious diversity promotion plans. Inabata mustemphasize how these efforts are essential forsustainable growth, announcing loudly in and outside
the company, which will lead to greater awareness andconfidence among management and employees, asense of security for business partners, and higher
expectations from shareholders and investors.
As an outside director of a historical company, I hope tohelp create new value by finding the perfect balance
between protecting what should be protected yet
breaking through preconceived notions. I want tocontribute to the best courageous decisions that also
respect valuable traditions.

Q What are the management challenges andsolutions you see currently?

A I will strongly promote policies for diversity,
which is necessary for sustainable growth.

One thing that helps make people, organizations andcultures better is diversity. When people get older, add
experience, and take on more responsibilities, they can
inadvertently get into a defensive mind. They may also
accumulate unconscious biases against women or
foreigners. In my experience, meeting people with

The interview was held online to prevent the spread of COVID-19.

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56

ESG Information

Corporate Governance
Board of Directors

Corporate governance system

Basic views(As of July 1, 2021)

Inabata’s mission statement is, “People come first, basedon the spirit of ‘love (ai )’ and ‘respect (kei ),’ and together
we strive towards contributing to the development ofsociety.” With a foundation on this Mission, the company
aims to respond to the directive of all stakeholders who
support the company’s activities including shareholders,business partners and employees, and sustainably
improve corporate value. For this, the company believes it
is essential to have a strong corporate governance systemfor ensuring transparency and fairness in business andspeed and resolution in decisions.

Organizational design

Company with an audit &supervisory board

Directors

9 (including 3 independent outside
directors)

Chairperson of the board of directors President

Executive officer system

Yes

Advisory committees tothe board of directors

Nominating and Remuneration
Committee

Audit & supervisoryboard members

5 (including 3 independent outside
auditors)

Accounting auditor

KPMG Azsa LLC
https://www.inabata.
co.jp/english/investor/
library/governance/

Corporate governance system (As of July 1, 2021)
The board of directors makes important management
decisions and supervises the execution of business. The
audit & supervisory board and its members, independentof the board of directors, audit the board of directors’
execution of duties and decision-making.

We voluntarily set up the Nominating and Remuneration
Committee in 2015. It deliberates on the selection anddismissal of executives, nomination of candidates for
positions of director, audit & supervisory board member,and executive officer, as well as the remuneration of
directors. A majority of the committee members, including
the chairman, are independent outside directors. The
board of directors strives to ensure objectivity, fairness,and transparency by fully respecting the deliberation
results of the Nominating and Remuneration Committee.
Members of the Nominating andRemuneration Committee:
3 outside directors
1 internal director
Chairman: Independent outside director
Number of times held: FY2020 7 times

General Meeting of Shareholders
Election and dismissal
Nominating andRemuneration Committee(4 directors,
including 3 outside)

Election and dismissal

Election and dismissal

Changes in Initiatives to Strengthen Governance
AdviceBoard of Directors(9 directors,
including 3 outside)

President

Compliance Committee

Audit & Supervisory Board(5 members,
including 3 outside)

Collaboration

Business Execution System

Internal Control Committee

Audit

Audit

Accounting
Auditors

Accounting audit

Internal Audit Office

Management Council

Time period

June 2003

Executive officer system introduced

June 2006

Term of appointment of directors reduced fromtwo years to one year

June 2013

Appointment of two outside directors

June 2015

Appointment of three outside directors

November
2015

Nominating and Remuneration Committee(voluntary) established
Evaluation of the board of directors introduced
P61

June 2018

Performance-linked share-based remuneration
system introduced

Internal audit

Human Rights Affairs Committee
Export Control Committee

ReportExecutive Officers

We set up the Management Council as an institution forbusiness execution. This council deliberates on basic
policies and important matters related to management anddecides their direction. We have also established theShinsa Kaigi as an institution to review important mattersrelated to business execution and investment projects. Its
participants from across the world hold direct discussions
with the management.

Number of times convened: FY2020
Management Council 12 times,
Shinsa Kaigi 17 times

Nominating andRemuneration Committee

Term of office of directors under 1 year
the Articles of Incorporation

Corporate Governance Report

The board of directors makes decisions on importantmatters set out in laws and regulations, Articles ofIncorporation, and Regulations of the Board of Directors.
These matters include formulation of business plans andannual budgeting as well as making basic management
policies and appointing executive officers. Inabata has also
adopted the executive officer system to separate
management-level decision-making and businessexecution functions to ensure effective management andprompt decision-making.

Management Council andShinsa Kaigi

Audit system• Audits by audit & supervisory board members
The audit & supervisory board comprises five members,
including three external members, who are highly
specialized and independent. They ensure that ourchecking function is working from an external perspective.
Each auditor exchanges views regularly with accounting
auditors and the Internal Audit Office and conducts audits
on the execution of duties by directors and the board’s
decision making.
• Accounting audits
Accounting audits, audits of financial statements, quarterly
reviews, and internal control audits for Inabata are
conducted by KPMG Azsa LLC. Evaluation criteria,
including autonomy, specialized knowledge, andassessment, have been formulated for the appointment
and suspension of accounting auditors, and decisions are
made based on the evaluation results.
• Internal audits
Inabata confirms the efficacy of internal control related tofinancial reporting based on the Financial Instruments andExchange Act. We also implement business rule audits
related to inventory transactions at domestic and overseas
Group companies based on an annual plan.

Sales Divisions, Administrative Offices, Group Companies Worldwide

57 Inabata Integrated Report 2021

Inabata Integrated Report 2021

58

ESG Information

Corporate GovernanceOutside audit & supervisory board members
Three out of five auditors are outside members. They
possess specialized knowledge in finance, accounting,law, and other fields and are highly independent.

Outside audit & supervisoryboard members

Ratio of outside audit& supervisory board
members

3

60%

Internal audit & supervisoryboard members

2

Attendance status for FY2020

Outside directors and outside audit & supervisory board members
Autonomous

Years
in officeYoshitaka
Takahashi

Yes

7 years

Katsuya
Yanagihara

Yes

Satoshi
Tamai

Yes

Name

Outside directors
In electing outside directors, Inabata aims to appoint
candidates who have abundant experience and knowledgeof corporate management, the ability to oversee thedecision-making and business execution of the board of
directors of the company, which conducts business on a
global basis, and provides appropriate advice from an
objective perspective. The proportion of outside directors
stands at 33% (three out of nine directors).

Outside directors

Ratio of outside
directors

3

Name

KiyoshiSatoAutonomousYes

2 years

Board
meeting

100%

100%

18/18 times

7/7 times(Chairman)(Head outside
director)

Kenji
Hamashima

TakakoHagiwara

Yes

Yes

1 yearNewly
appointed

Nominating andRemuneration
Committee

100%

100%

14/14 times

6/6 timesーーInternal directors

6

100%

100%

18/18 times

13/13 times

3 years

1 yearAttorney

Certifiedpublicaccountant

100%

100%

18/18 times

13/13 times

100%

100%

14/14 times

10 /10 times

Reason for appointment

Kiyoshi Sato has served as president and CEO, and vice chairmanof the board of Tokyo Electron Ltd. He currently serves as an
outside director of Shibaura Machine Co., Ltd. and Mazda Motor
Corp. As he possesses global and abundant experience andwide-ranging expertise as a member of the management of aleading company which makes equipment to manufacture
semiconductors and flat panel displays, Inabata appointed him in
anticipation of gaining supervision and advice on businessexecution with an objective perspective.

Takako Hagiwara has served as representative director of Sony Hikari
Corp. and Sony Kibou Corp., and director of Green House Co., Ltd.
She currently serves as representative director of DDD Corp. andoutside director of Twinbird Corp. and NEC Capital Solutions Ltd. For
many years she oversaw human resources in a major global
electronics manufacturer with multiple businesses including
audiovisual equipment, movies and music, and has experience inmanagement. Inabata appointed her in anticipation of gaining advice
on human resources strategies and diversity promotion.

To promote an understanding of Inabata’s business, the company provides opportunities to meet with heads of departments and visit/tour
overseas locations. In April 2021, the company held an online tour of a plastics compound production base in Vietnam. There was a tour ofthe manufacturing processes and a dialogue with local managers and staff members.
Participants: 3 outside directors, 3 outside audit & supervisory board members, president, board member in charge of the business segment
Location: SIK Vietnam Co., Ltd.

Reason for appointment

Yoshitaka Takahashi has served as an audit &supervisory board member of a listed company, andInabata appointed him as outside audit & supervisoryboard member for the purpose of conducting an
objective, proactive and fair audit by utilizing his
abundant experience and broad views.
Katsuya Yanagihara is an attorney, and Inabata appointed
him as outside audit & supervisory board member for the
purpose of conducting an objective, proactive and fair
audit from the perspective of a professional.
Satoshi Tamai is a certified public accountant andpossess the experience of working in a major trading
company, and Inabata appointed him as outside audit &supervisory board member for the purpose of
conducting an objective, proactive and fair audit fromthe perspective of a professional.

Meetings between outside directors and audit &supervisory board members
Number of times held: FY2020 1 time

Field of experience and expected roles of directors and audit & supervisory board members

Kenji Hamashima has served as director and senior executive vicepresident, and president and chief executive officer of Ushio Inc.
He currently serves as a special adviser of the same company. As
he possesses global and abundant experience and wide-ranging
expertise as a member of the management of a manufacturer
which produces applied optics products, such as industrial lightsources, and industrial machinery, Inabata appointed him in
anticipation of gaining supervision and advice on businessexecution with an objective perspective.

Training for outside directors and outside audit & supervisory board members

59 Inabata Integrated Report 2021

Auditorat listedcompany

Audit &
supervisoryboard meeting

33%

Attendance status for FY2020
Years
in officeCareerBoard
meeting

Sales (global)

Name

Directors

Information&
Management Electronics

Plastics●

Chemicals
Legal &
andFinance &riskLife Industry accounting management

Katsutaro Inabata●

Toyohiro Akao●

Kenichi Yokota●

Masahiro Sugiyama●

Noriomi Yasue●

Kenji Ohno●

Kiyoshi Sato*

●

ー

ー

ー

Kenji Hamashima*

●

ー

ー

ー

Takako Hagiwara*

●

ー

ー

ー

●
●

Satoshi Tamai*IT &digitalESG

Know-howfrom othercompanies

●

●

●

●

●

●

●

●

●

●

●

●

●
●

●

●
ー
ー

●
●

●

ー

●

●

●

Takashi Mochizuki
Nobukazu Kuboi
Audit &
Supervisory
Yoshitaka Takahashi*
Board
Members Katsuya Yanagihara*

●

HR &
labor

●
ー

ー

ー

ー

ー

ー

ー

ー

ー

●
●
●

ー
ー
ー

(Note) * Independent outside director or audit & supervisory board member

Inabata Integrated Report 2021

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ESG Information

Corporate Governancerevision to the Corporate Governance Code.It will
most likely be necessary to expect the role of theboard of directors to change in the future, including
increasing the ratio of outside directors to over halfin the medium- to long-term.
Future courseof action

The effectiveness evaluation of the board of directors• Inabata has been conducting the effectiveness evaluation of the board of directors since FY2015.
• Each cycle lasts for three years in which self-evaluation is carried out for the first two years and third-party evaluation iscarried out in the third year.
• The overview of the evaluation and issues to be considered are published on the Company’s website.
• Self-evaluation was carried out in FY2020.

FY2020 Third-Party Evaluation Process (questionnaire and interview)

Discussion onquestionnaire(in-house staff andexternal experts)

Distribution ofquestionnaire(all directors
and audit &supervisoryboard members)

Aggregation(external experts)

Interviews(all directors
and audit &supervisoryboard members)

Simplified
analysis,
evaluation, reportto the board of
directors(external experts)

Verification by
the board of
directors

Disclosure on
websiteNext:
Self-evaluation• Efforts will be made to strengthen company-wide,cross-organizational functions. This includes
discussions on human resources appointments inorder to put into place specific plans and measuresfor cross-organizational functions.

• The board of directors will deepen discussions on
the direction of business in the medium- tolong-term, including the medium-term businessplan. These discussions will include developing
new businesses and a third pillar business, humanassets, internal control and group governance, andother important challenges for Inabata’s
management.
• The following will be considered for promoting
discussions:
Preliminary talks by executive members to solidify
direction
Free discussion and brainstorming outside of board
meetings• The composition of the board of directors willcontinue to be reviewed in anticipation of the
Corporate Governance Code revision andenvironmental changes, including the newly
instated Tokyo Stock Exchange prime market.
Along with the composition, meeting agendas andcontent will also be reviewed for changes.

1. Operational status of the board of directors

6. Support system for outside directors

2. Function and role of the board of directors

7. Role of the audit & supervisory board members
and expectations for them

5. Operational status of the Nominating andRemuneration Committee

All directors (9) and audit & supervisory board members (5) in office as of the end of March 2021

Summary ofanalysis andevaluation

The analysis and evaluation by external experts found
the following points regarding the awareness andopinions of all target directors and audit &supervisory board members on Inabata’s current
state of affairs.
[Management and business]• There is stable growth in the two core businesses,
Plastics Segment and Information & Electronics
Segment. On the other hand, developing new
businesses and establishing a third pillar business
are recognized as an important management
challenge.
• Owing to personal relations with existingcustomers, Inabata’s strengths are its ability tocreate new businesses and flexibly adapt tochanging demands. Human resources
development including training for management
members is recognized as a very importantmanagement challenge.
• Potential risks in international business, credit risks
with business partners, and risks related tobusiness investments are recognized as serious
risks. Inabata is building a system for internal
control, and with this system the company is

61 Inabata Integrated Report 2021

expected to be able to appropriately identify andcontrol risks in its business activities.
• Inabata is expected to further strengthen its
company-wide, cross-organizational functions.
[Status of board of directors]• The operation and composition of the board of
directors are generally rated highly.
• In the self-evaluation of last fiscal year, the need formore discussions on medium- to long-term
management and strategies (medium-termbusiness plan, etc.) was recognized as a challenge.
Although there are difficulties in discussing
medium- to long-term themes due to the nature of
the shosha business, it is recognized this should befurther improved upon.
• The management perspectives, opinions and advice
from outside directors based on knowledge in theindustries were rated highly. Audit & supervisoryboard members participate in discussions withbroad perspectives based on their expertise.
• The ratio of internal and outside directors was rated
highly. There is awareness to increase the ratio ofoutside directors to over 33%, according to the• A summary of discussions by the Nominating andRemuneration Committee (committee schedule,
discussion topics, arguments, etc.) will be
sufficiently shared in board meetings.

Questions

4. Composition and role of the Nominating andRemuneration Committee

Target of evaluation• Appropriate discussions are being made by the
Nominating and Remuneration Committee, but thediscussion topics are not sufficiently shared withthe board of directors.

The below actions will be taken in response to thechallenges recognized in the above analysis andevaluation, aiming to further improve theeffectiveness of the board of directors.

3. Composition of the board of directors

Evaluation results for FY2020[Status of Nominating and Remuneration Committee]

8. Relationship with investors and shareholders
9. General effectiveness of governance system andboard of directors
10. Self-evaluation

Challenges identified in past board of directors’ evaluations and the improvements made (FY2015–)
Main challenges

Improvements

Sufficient discussions on medium- tolong-term challenges

Renewed criteria for meeting topics to allocate sufficient time tostrategic discussions

Feedback to the board of directors regarding dialogue
with capital markets

Information from investors regularly reported back to the board of
directors

Further review of content and number of topics
discussed at board meetings

Continued discussions on reviewing the functions and roles of theboard of directors

Succession plans and diversity promotion

Deeper discussions in the board of directors and Nominating andRemuneration Committee

Appropriate cooperation and communication system
between outside directors and audit & supervisoryboard members

Establishment of opportunities for exchange

Continued review of risk management system

Stronger risk management system including overseas subsidiaries

Creation of a long-term human resources development
system with a view to train top management

Plan created with help from experts, and the start of long-term
training for candidates

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62

ESG Information

Corporate GovernanceRatio of performance-linked remuneration and
fixed remuneration in FY2020
Performance-linked remuneration

43.2%

Fixed remuneration

56.8%

Reference: Past remuneration of directors*

FY2017223 million yen

FY2018248 million yen

FY2019300 million yen

FY2020318 million yen* Before FY2019, excludes non-executive directors. For FY2020, excludes
outside directors.

Remuneration of directors and audit & supervisory board members
The remuneration of directors comprises (a) fixed
remuneration, (b) performance-linked remuneration, and(c) Board Benefit Trust (BBT). Non-executive directors
receive only fixed remuneration. Of the above threefigures, the board of directors decides (a) and (b), staying
within the maximum amount of remuneration approvedby the shareholders general meeting. The maximum
remuneration amount for directors as determined by theshareholders general meeting is 430 million yen a year.
Remuneration for each director is not determined by any
qualitative factor, but automatically calculated byequations and coefficients according to regulations.
Remuneration for directors is discussed by the
Nominating and Remuneration Committee, of which the
majority are independent outside directors. The board of
directors fully respects the deliberation results of thecommittee. These procedures ensure objectivity,
fairness and transparency in the determination of
remuneration for each director. No single director will beassigned the task of deciding remuneration of directors.

(a) Fixed remuneration
This a minimum guaranteed amount established asremuneration for each position held by directors.
(b) Performance-linked remuneration
This is based on the fixed remuneration of each position and is
calculated by multiplying a coefficient with profit before
income taxes as an indicator (excluding gains on somestrategically held shares).
(c) Board Benefit Trust (BBT)
Inabata has introduced a Board Benefit Trust (BBT) as aperformance-linked share-based remuneration system in orderto further clarify the linkage of the remuneration for directors(excluding non-executive directors), the company’s businessperformance, and the stock value, and enhance their motivation
to contribute to the improvement of the company’s businessperformance in the medium and long term and to boost
corporate value by sharing not only the benefit of the rise instock prices but also the risks of a decline in stock prices withthe company’s shareholders. BBT is a system in which directors
earn points during their term which are exchanged for sharesand cash upon resignation.
(The calculation method for points to be granted to directors)
Yearly granted points =continuous service points*1 + performance points*2*1 Half of the basic points established by role
*2 Continuous service points x performance coefficient
Performance coefficient: This is determined by the consolidated sales
target achievement rate and the consolidated operating profit target
achievement rate. Target achievement rate is the performancecompared to the medium-term business plan published externally.

Actual remuneration of directors in FY2020
Total amount of remuneration and other benefits by type(million yen)
Performancecoefficient

Number of
eligible persons

Fixed
remuneration

Performance-linked
remuneration

Board Benefit
Trust (BBT)

Total amount(million yen)

0.82

7

181

91

45

318

2

43

—

—

43

8

46

—

—

46

Director*1·2(excluding outside directors)

Audit & supervisoryboard member(excluding outside audit &supervisory board members)

Outside director*1
and outside audit& supervisoryboard member

Strategically held shares(1) Basic views
Close business and cooperative relations with various
companies are valuable assets to Inabata, and thecompany believes the establishment, maintenance anddevelopment of these relations improve the company’s
corporate value in the medium and long term and lead tothe benefit of shareholders and investors. Also, asInabata believes the strategic holding of shares of suchcompanies continues to be an effective way to establish,
maintain and develop good cooperative relations, thecompany owns strategically held shares.

considered significant, while considering timing and theeffect on the market and the business.

(2) Policy related to holding and reducing
strategically held shares
Inabata forms a judgment concerning the pros and consof strategically held shares based on whether holding
them contributes to the establishment of cooperative
relations, enhances the company’s corporate value in themedium and long term, and leads to the benefit ofshareholders and investors. The board annuallydeliberates whether or not to continue to hold astrategical share if the total yield from an investment tothe company is short of the capital cost. The board
verifies the holding’s adequacy based on whether it isworth the capital cost, the scale of the total return, futurebusiness outlook with the company, and other qualitative
elements. The total yield from an investee is calculated
based on the total return, which is the sum of profit thatcan be expected to be obtained through business activity
and payment of dividends. The company follows a policyof reducing the shares that the holding of which is not

Sales of strategically held shares

Inabata has already reduced shares that no longer served
the company in line with the Corporate GovernanceCode. “Continuous review of assets and further
improvement of capital and asset efficiency” is one of the
key initiatives in the three-year medium-term businessplan NC2023, which lasts until FY2023. In line with theinitiative, Inabata decided to reduce strategically held
shares by 50% during the three years of NC2023.

FY20164,549 million yen

FY2017

9,017 million yen

FY20185,298 million yen

FY20193,026 million yen

FY20202,944 million yen(3) Criteria for exercise of voting rights
In principle, Inabata exercises voting rights for all agendas
in order to exercise its rights as a shareholder. The
company reviews the merits and demerits of eachagenda and exercises voting rights based on the
judgment criteria of whether sustainable growth of theheld company and improvement of its corporate value inthe medium and long term can be expected.

*1 Includes one outside audit & supervisory board member who retired as of the closing of the 159th Ordinary General Meeting of Shareholders held on June23, 2020, and one director who resigned on January 31, 2021.
*2 Board Benefit Trust (BBT) is the carryover amount of the board benefit provision booked in the fiscal year ended March 2021.

63 Inabata Integrated Report 2021

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64

ESG Informationinfluence on our business. For the first half of FY2020,
our business in key Southeast Asian nations wasseverely affected by lockdowns due to the global spreadof COVID-19. We have formulated and are implementing
business continuity plans (BCP) at our major overseas
bases to serve as countermeasures for emergencies
such as infectious disease outbreaks.

Risk Management

Major risks faced by the Inabata Group
Impact on businessperformance• Potential risks of overseas
activities• Credit risk of business
partners• Risk related to business
investment

Huge

MediumSmall• Risk related to businessrestructuring• Risk of natural and otherdisasters• Risk of fluctuations inretirement benefit obligation• Risk of fluctuations in
product markets• Risk of fluctuations inforeign exchange rate
• Risk of decline in valueof securities held

• Environment-related risks• Risk related to laws andregulations
Low

MediumWe manage risks by establishing and implementing
various regulations related to credit management, export
management, products management and others, with
our Risk Management Office at the core. Additionally, we
prepare ourselves for risks arising from everyday work byorganizing and implementing the work rules for tradingbases and manufacturing bases in multiple languages,
along with executing appropriate risk checking functions
from head offices using regulations for managing GroupHigh

Possibility of occurrencecompanies in Japan and abroad. We have identified the
11 risks shown in the above matrix as the main risks
faced by our Group. Mapping has been done on thematrix based on the probable impact of each risk on our
performance and the possibility of its occurrence using
the responses on risk awareness of managers in theeffectiveness evaluation of the board of directors
conducted in FY2020 and other factors.
Here, we will explain three risks that we consider our
top priority.

Measures to address three top risks

65 Inabata Integrated Report 2021

• Risks related to business investments
When developing business at the Inabata Group, in manycases, we actually make investments and acquire equity ina joint enterprise or joint venture. Notably, with respect toour investments in consolidated affiliates, there is a risk ofadverse impact on our Group’s performance and financial
status due to trends in the financial status and operating
results of such Group companies. In principle, our Groupinvests in minority interests with the main objective of
expanding shosha trading business, and limits the risks
and amounts for investments in majority interests.
COVID-19-related risks

P31

Addressing other risks

Operating globally with 60 bases across 17 countries,
mainly in Asia, our Group faces various kinds of risks.

• Inherent risks in our overseas activities
Our Group’s production and sales activities overseas
cover multiple regions, including Southeast Asia andNortheast Asia, North America, and Europe. There are
inherent risks in operating in these foreign markets,
which include unexpected changes in laws or
regulations, adverse political or economic factors,• Credit risk of business partners
Our Group companies grant credit to many business
partners in Japan and abroad. Although we carry out
credit management on a global scale, including ouroverseas business partners as well, we cannot guarantee
full collections. Therefore, there is a risk of adverse
impact on our Group’s performance and financial status
due to the aggregation of bad-debt losses and allowancefor doubtful accounts through bankruptcy and civil
rehabilitation procedures and so on from contingencies
concerning business partners.

Credit screening is conducted by the Shinsa Kaigi, whichis composed of members of management. With regard
to inventories, we monitor and manage the balance ofeach consolidated Group company on a monthly basis.

• Business continuity plan (BCP)
We have been formulating and introducing BCPs at majorbases, including domestic and overseas Group
companies since 2018 so that we can promptly restartand continue business activities after a crisis takes place.
We plan to establish the BCPs at 38 bases in 13 countries
including Japan.
• Supply chain management
We have formulated the Supply Chain CSR Action
Guidelines in response to the social expectation forcompanies to fulfill CSR in their supply chain management.
• Tax compliance
All officers and employees of the Group strive to comply
with laws and regulations as well as internal regulations,regardless of the country, to manage Inabata with afocus on compliance. With regard to taxes, we recognizethat one of our social responsibilities is to pay taxes
according to related laws and regulations in each country
or region and maintain transparency. We think thatproper tax payment contributes to economic
development of the country or region and in returnresults in sustainable growth of our Group andimprovement of our medium- to long-term corporate
value. Therefore, we strive to minimize tax risk andmaintain as well as improve tax compliance.
• Compliance hotline (internal reporting system)
We have established a compliance hotline to enablepeople to notify us about compliance violations. We have
set up external points of contact using legal counsel fromoutside Inabata and external experts (available in foreign
languages), as well as internal points of contact, including
audit & supervisory board member, to enhance ourcompliance management. We have designed the hotline
to accept anonymous reports from whistleblowers. In
addition, we have stipulated in our whistleblowing
regulations that the privacy of whistleblowers is to be fully
respected, and that retaliation or other disadvantageous
actions are prohibited.

difficulty in recruiting and retaining personnel,
underdeveloped technological infrastructure, potentiallyadverse tax consequences, and social disruptions due toother factors.
For sales in the consolidated fiscal year by region, Asia
accounted for 48% of the total, having the largest

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66

ESG Information

Society

Developing global staff
With a consolidated workforce of more than 4,000 employees and more than 50% of our sales being from overseas, wewill continue to develop “global staff” who can implement our management philosophy and work on a global scale, both inJapan and overseas.

Employee structure at Inabata & Co., Ltd.

View on employee development
People are most important for a shosha trading company, and developing them is one of the tasks for the management.
Inabata’s aim for employee development is to develop people who share our IK Values and can implement our vision
based on the spirit of love and respect. We aim to coexist with society globally as autonomous and independent
individuals who share the IK Values.

IK Values

P3

We have categorized duties bymanagement, professional, general staff,
and assistant jobs and clearly defined theroles, responsibilities, and missions ofeach. We have also established eightlevels of ranks called bands* and haveconducted intensive training for people
belonging to key bands.
* Bands 1 to 8 are assigned to management,
professional, and general staff levels.

Inabata’s view on employee
development is based on
IK Values.

Solving the problems of society,customers and other people

Autonomous andindependent individuals

See P69 for the training structure at
Inabata & Co., Ltd.

Looking at things calmly
and objectively

IK Values
Learning from successes
and failures

Ability to act based on one’s own
thoughts and views
without compromise or conceit

Global staff

Bands 1–3

People who will lead the organization andits businesses by implementing the IK management
philosophy and business strategy in Japan and abroad

Employees contributing toBands 4–5
the organization through diverse experience
People who contribute to the organizationand its businesses by resolving complicated issues
using mature judgement while gaining diverse experience

Employees who grow with
Bands 6–8
a view to embodying the characteristics of conduct
People who work hard with the aim to embody the characteristics
of conduct sought by Inabata while carrying out their tasks
and refining specialized skills in specific fields

Initiatives to improve diversity
With the mindset that a variety of values are necessary for business continuity and expansion, we put effort into ensuring
fair practice with regard to the hiring, assignment, assessment, handling, and promotion of employees, regardless of theirage, gender, or other characteristics. Under the NC2023 medium-term business plan, we will continue to bolster our
initiatives for employee engagement and work-style reform along with attempts to further enhance our systems to
improve diversity. We also will actively promote the development of a work environment where female employees can be
more active participants, as well as action plans to support both men and women in balancing work and their day-to-day
lives, which includes childcare and nursing care.

Training local employees from around the world in Japan

Respect for human rights
Inabata formulated the Declaration of Compliancewith the view that respecting the human rights of all
our stakeholders is essential for us to contribute tosocial development as a company operating on a global
scale. Advancing our business activities while
respecting all human rights is also aligned with our
spirit of love and respect.

67 Inabata Integrated Report 2021

Supply chain CSR action guidelines
Inabata has formulated a unique code of conduct in
response to the social expectation for companies to fulfill
corporate social responsibility (CSR) in their supply chain
management. We are raising its awareness among all
suppliers, strengthening communication and actively
working on improvements with regard to business
partners that are lagging behind.

Inabata’s strength lies in its human capital andinformation, and in order to achieve long-term growth,
it is absolutely vital for us to boost the level of our local
staff all over the world. We plan to resume the Global
Staff Meeting, which was canceled in FY2020, once
the COVID-19 pandemic has settled down. Local staff
selected from each part of the world are invited to themeeting held at the head office. Our goal is to foster a
climate of shared values and collaboration based on IK
Values, one which transcends race, faith, and culture.
In Singapore, Vietnam, Malaysia, and Indonesia, we

also provided support for the establishment ofeducation and training systems tailored to the specificissues and circumstances of each country. By
conducting workshops for fundamental technical skills
such as business process rules in multiple languages
using e-learning, as well as training aimed at shoringup our national staff as a whole, including manager
development, the Inabata Group strives to develop the
global human resources it needs as a trading company
with multiple operations.

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68

ESG Information

In Focus

Society

Employee engagement

Basic training as Shosha persons
To develop global staff quickly and with certainty, our head office staff receives focused trainings for key bands. After joining
Inabata, employees acquire the necessary knowledge as global staff, depending on their level in the hierarchy. We also holdlectures to educate employees about the minimum basic knowledge of chemicals necessary for working at a trading
company dealing in chemicals. We invite external lecturers and hold a total of 10 sessions, mainly for young employees.

Training structure at Inabata & Co., Ltd.
Number of training hours provided by the Human Resources Office (from April 2020 to March 2021)

473 hours and 906 participants in total (sessions conducted in Japan, and participants include expats from Japan)

Technical skills

Human skills
Training for
new managers

Managerial
positions
Leadership training(by recommendation)
Mid-level
positionsNew
employees

Credit management training II(corporate analysis,
corporate evaluation)

Critical thinking

Credit management training I(bookkeeping, finance)

Basic training
on chemicals

Technical skills training(legal, credit, trade)

Logical thinking(basic)Mid-level
employees’ training

engagement survey covering a total of approximately
1,400 employees at our head office and 16 major
overseas trading bases. Findings on employee
motivation and satisfaction with the organization wereturned into figures and given to their supervisors as ahint for a possible behavioral change to revitalize theorganization.
In this survey, overall, there was a high level of
employee satisfaction with the support they received
from their supervisors and colleagues in carrying out
their work, indicating that a positive organizational
culture has been fostered at each location. On theother hand, we have identified some issues regarding
employee skill development and training, and we
intend to strengthen these in the future. Goingforward, we will continue to increase employee
engagement and further enhance our corporate value
by implementing measures optimized for each country
and region, and promoting the creation of a work
environment that maximizes each individual’s ability.

Survey overview

Comprehensive workshops
MarketingYoung
employees

Global Staff Meeting(by recommendation)

A source of our value creation as a trading company is
the people — a total of 4,200 employees at about 60
locations in 17 countries and Japan, where the head
office is located. In our new NC2023 medium-termbusiness plan from FY2021, included “enhancement of
human capital utilization efforts” as a key initiative, andwe are devoting even greater effort to measures
which will boost diverse employees’ motivation towork, as well as their individual abilities. One of thosemeasures is employee engagement. If there is a highlevel of engagement (in other words, connection,
cooperation, and trust) between management andemployees, between supervisors and theirsubordinates, between employees, and between
departments and Group companies, employees will
be able to work with greater vigor. We believe thegrowth of the entire group can be achieved if eachindividual participates in the organization and devotes
themself to their work with a high level of trust as abase. In April 2021, we conducted an employee

Number of employees
surveyed

Total

Head Office

Other than Head Office

1,400

587

813

Note: Respondents belong to the head office and major trading bases.

Example of questions and evaluation results
Communication(business manners)

Note: The selected items are those with a high percentage of 4 and 5 evaluations on a 5-point scale
Evaluation 5. Strongly agree 4. Agree 3. Neither agree nor disagree 2. Disagree 1. Strongly disagree• Engagement

I am satisfied with the work I am doing at Inabata now

70%• Relationship with superiors

Training at overseas bases

75%

I have the necessary collaboration with my supervisor at work
• Organizational culture

As our overseas business expands
rapidly, we recognize the importance of
education and training at overseas
bases. We will strive to improve theGroup’s level by continuously
implementing education and training on
basic matters, such as procurement andinventory management, credit
management, and business process
management, using e-learning andother methods.

69 Inabata Integrated Report 2021

Training about credit management andlegal knowledge at overseas bases
We continued to provide credit management training at overseas bases in
FY2020. Although our company’s risk management staff had previously
traveled to overseas bases to conduct workshops, amidst the restrictions
on movement posed by the COVID-19 pandemic, we made use of online
meetings to conduct training at six bases in Southeast Asia and threebases in the Americas, and worked to establish credit knowledge among
overseas staff. In addition, in early FY2021, we provided legal training in
addition to credit management training to our location in Dalian to reaffirm
the importance of legal knowledge.

When a problem occurs in the course of my duties, my supervisor and the people around me provide appropriate support

83%• Corporate philosophy
I can relate to Inabata’s philosophy, vision, and management policies, and I want to participate in achieving them70%

• Human resources system and benefits
Inabata’s salary standards are satisfactory, compared to other companies in the same industry

59%• Human resources system and training
Inabata supports employee training to improve their skills

41%• WLB (work-life balance)
Overtime is kept to a level that is acceptable for me

64%

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70

ESG Information

Societyfounder studied in France and later established afoundation for the Franco-Japanese cultural exchange with
French Ambassador to Japan Paul Claudel to promote
friendship between Japan and France. The founder also
built the Institut Franco-Japonaise du Kansai, in Kyoto as
the hub for those activities. I would like to express mythanks for the contributions to France made by all
members of the Inabata family from generation to
generation.” Past presidents have also been awarded the
Légion d’honneur, as shown on the right.

International exchange
Our founder, Katsutaro Inabata, worked toward paving a path to cultural exchange and friendly relations with other countries
after returning from his study trip to France. We continue to deepen those relations by continuing to work on his initiatives.

Japan–France exchange
Our founder, Katsutaro Inabata, studied abroad in France inthe latter half of the 19th century, and learned about the
cutting-edge technology of the day, such as syntheticdyes. Since then, we have devoted our efforts toencouraging Japan-France exchange. He and Paul Claudel,
the French ambassador at the time, established theFranco-Japanese Cultural Association in 1926 as anorganization to promote cultural exchange between Japanand France. In the following year, 1927, he built the Kansai
Franco-Japanese Institute (now the Institut Franço-Japon
du Kansai, Kyoto), establishing a base for bilateral cultural
exchange activities. Afterward, Taro Inabata (our second
president), who became the sponsor behind the foundingof the Société Franco-Japonaise d’Osaka, worked toencourage cultural exchange in the Kansai area. The
Institut Franco-Japon à l’Espace (now Villa Kujoyama), built
in the era of Katsuo Inabata (our fourth president), is used
as a base for artists from France to stay in Japan. The spiritof promoting exchange between Japan and France, which
has been built up by successive presidents, continues tobe held by the current president, Katsutaro Inabata (oursixth president), and even today, we are contributing tofriendship and goodwill between the two countries by

Legion d’honneur
On March 9, 2021, President Katsutaro Inabata wasawarded the Legion d’honneur (rank of Chevalier) by
French Ambassador Philippe Setton at his official
residence in Tokyo. As the reason for conferring thishonor, Ambassador Setton said that “President Inabata
served as head of the Société Franco-Japonaise d’Osakafrom 2013 until 2020 and worked to promote mutual
understanding and friendship between Japan and France.”
Furthermore, Ambassador Setton expressed gratitude forthe contributions of all the Inabata presidents to thefriendship between Japan and France. He said, “Inabata’s

71 Inabata Integrated Report 2021

offering French language courses and supporting bilateral
cultural exchange events.

• Katsutaro Inabata (founder)
1914 Received rank of Chevalier (5th degree)
1921 Received rank of Officier (4th degree)
1927 Received rank of Commandeur (3rd degree)1935 Received rank of Grand Officier (2nd degree)• Taro Inabata (second president)
1936 Received rank of Officier (4th degree)1960 Received rank of Commandeur (3rd degree)• Katsuo Inabata (fourth president)
1991 Received rank of Officier (4th degree)
1997 Received rank of Commandeur (3rd degree)• Katsutaro Inabata (sixth president)
2021 Received rank of Chevalier (5th degree)

Japan–Portugal exchange
Inabata’s relationship with Portugal began in 1920 when
our founder was appointed vice-consul for Portugal in
Kyoto. From 1932, our second president, Taro Inabata,
became the honorary vice-consul for Portugal in Osaka.
Our fourth president, Katsuo Inabata, was appointed thehonorary consul for Portugal in Osaka in 1973. He alsoestablished the Sociedade Luso-Nipónica de Osaka in 1994
to commemorate friendly exchange between the twocountries, which reached 450 years in 1993, and served as
its president. At present, Katsutaro Inabata, our sixthpresident, has continued in the role as the president of theSociedade Luso-Nipónica de Osaka, and is working topromote cultural exchange between Japan and Portugal.

• 1920Katsutaro Inabata (founder) appointed vice-consul for
Portugal in Kyoto• 1932

Taro Inabata (second president) appointed honorary
vice-consul for Portugal in Osaka• 1966

Katsuo Inabata (fourth president) appointed honorary
vice-consul for Portugal in Osaka• 1973

Katsuo Inabata appointed honorary consul for Portugal
in Osaka• 1984

Katsuo Inabata awarded the Ordem do Infante Dom
Henrique (Comendador) by the country of Portugal• 1994Sociedade Luso-Nipónica de Osaka founded, Katsuo
Inabata appointed president• 2001

Katsuo Inabata awarded the Ordem do Infante Dom
Henrique (Grande-Oficial) by the country of Portugal• 2011

Katsutaro Inabata (current president) appointed
president of the Sociedade Luso-Nipónica de Osaka• 2012

Katsutaro Inabata (current president) appointed
honorary consul for Portugal in Osaka

Institut Franço-Japon du Kansai, Kyoto, refurbished 2003

• 1927

Completion of the Kansai Franco-Japanese Institute(now the Institut Franço-Japon du Kansai, Kyoto)• 1952

Founding of the Société Franco-Japonaise d’Osaka,sponsored by Taro Inabata (our second president)• 1992Completion of the Institut Franco-Japon à l’Espace(now Villa Kujoyama)• 2013

Katsutaro Inabata (our current president) appointed ashead of the Société Franco-Japonaise d’Osaka (until
2020)

Contributing to the local community
Inabata award

As a member of CLOMA

Sponsorship of Paralym Art

Inabata has been sponsoring anannual award since 1974 for the bestartists in the vocal music or piano
categories in a French musiccompetition, hosted by anorganization promoting Japan–France
cultural exchange through music.

Inabata is a member of Japan Clean
Ocean Material Alliance (CLOMA)
and strives to resolve the marine
plastic issues through its business.

As an official partner of Paralym Art,
Inabata supports persons withdisabilities to become independent
through Shougaisha Jiritsu Suishin
Kikou Association.

2018 award ceremony

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ESG Information

Environment

Reducing environmental impact from business activities
As one aspect of our climate change response, we are promoting initiatives to reduce environmental impact and waste,
not just in our business activities, but in our corporate activities, as well.

Basic approach to environment
In accordance with its Inabata Declaration of Compliance,
Inabata is committed to contributing to society andeconomy through its business activity, as well as to makeefforts for the conservation of the environment.
Environmental risk is a critical factor that affects ourbusiness environment. We must address this issue
through our business activities to ensure the sustainable
development of our Group companies. In the year 2000,
Inabata obtained ISO 14001 certification, an international
standard related to the environmental management
system. Since then, we have been striving to increase thenumber of bases that hold this certification and the current
number of such bases, including our Group companies, isgiven on the right.

Number of group firms that have obtained ISO 14001
Japan

4

Overseas

15

CO2 emissions(Metric tons-CO2)
Power consumption(1000kWh)
Purchase of paper(thousands of sheets)

FY2018FY2019FY2020

432

400

387

937

900

888

4,974

5,304

3,563

* Scope: Osaka Head Office, Tokyo Head Office, Nagoya Branch* CO2 emissions are calculated from volume of power consumption using
the CO2 emission coefficient in terms of power usage.

Amount of CO2 emissions at overseas resin
compound manufacturing business bases
Amount of CO2
emissions (t-CO2)
Amount of power used(1000kWh)Southeast
Asia/India

Singapore, Malaysia, Indonesia, Vietnam,
Thailand, Philippines

Northeast Asia

China

Americas

Mexico(As of August 2021)

FY2019FY202038,38435,077

27,77657,32052,774

43,243* The amount of CO2 emissions is calculated from electricity
consumption, using the CO2 emission factor for electricity use* China (Inabata Industry & Trade (Dalian F.T.Z.) Co., Ltd., Dongguan SanyoIK Engineering Plastics Co. Ltd.)
Indonesia (PT. S-IK Indonesia)
Vietnam (SIK Vietnam Co., Ltd.)
Malaysia (SIK Color (M) Sdn. Bhd.)
Mexico (IK Plastic Compound Mexico, S.A. de C.V.)
Thailand (SIK (Thailand) Ltd.)
Philippines (IK Plastic Compound Phils. Inc.)

73 Inabata Integrated Report 2021

To reduce the load on the environment, we started using
biomass-derived garbage bags at our Tokyo Head Office.
The bags contain 10% of starch-derived biomass material
called NuPlastiQ, manufactured by BiologiQ, a company
working with Inabata’s Plastics Segment. It is a uniqueproduct produced utilizing the resin compounding
functions of our group company in Thailand and the film
and bag making functions of an affiliate in Japan, Taiyo
Plastics Co., Ltd.

“PaperLab,” a papermaking machine

Garbage bags containing
biomass-derived materials

Active expansion of our environmental business
Ratio of waste to recycling
FY2018FY2019FY2020Waste (Metric tons)

82

89

67

Waste recycled(Metric tons)

72

69

48

Recycle rate (%)

88

78

72

* Scope: Osaka Head Office, Tokyo Head Office, Nagoya Branch* Waste includes waste generated by tenants at Osaka Head Office

Value of environmental impact reduction products
handled (sales)

FY2018Garbage bags derived from biomass

In 2019, we introduced a papermaking machine, Paper
Lab, and started creating recycled paper in our office,taking used photocopy paper generated at our offices as
raw material. We will continue to work toward reducing
the purchase of paper by increasing the recycle rate in
our company.

Countries in which ISO 14001 has been obtained

Environmental performance data
CO2 emissions / power consumption / purchase of paper

PaperLab(billions of yen)10

The environment and energy field is an area of focus under
the current NC2023 medium-term business plan. We areworking on components related to solar-powered batteries
and materials for EVs to reduce society’s environmentalload and create business opportunities for Inabata. We arealso focusing on handling storage batteries for solar power
generation, solar modules, biomass, wind power, andother renewable energy sources. In addition, we will also
contribute to solving the problem of marine plastics, which
has become a serious social issue in recent years, throughthe development of environmentally friendly plastic
products and recycling of waste plastics.

Furthermore, our Group will continue to propose, develop
applications for, and sell new eco-friendly products which
contribute to a reduced environmental load, whilebuilding cooperative relationships with government
agencies and partner companies.
Development of environmentally conscious
plastic products
P19
The front line of the environmental business

P75

8.9
8

6.6

6.9

6

4

2

0

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ESG Information

Environment

The front line of the environmental businessSolar power generation businesses using
the Joint Crediting Mechanism
Currently, climate change is an environmental issue
that is recognized as a global environmental challenge.
Japan and European countries are working to reduce
their greenhouse gas (GHG) emissions to zero by 2050
and achieve carbon neutrality. On the other hand, manyof the advanced low-carbon technologies have highinitial and running costs, making it difficult to predict thereturn on investment in developing countries.
In response to this situation, Japan’s Ministry of theEnvironment provides developing countries withsuperior low-carbon technologies, systems, andinfrastructure to reduce GHG emissions, which also
helps Japan achieve its GHG emission reduction targets
through the Joint Crediting Mechanism (JCM).

Creating new added value with our recycled resinmaterials business

Against this backdrop, Inabata is participating as arepresentative in the “2.5MW Solar Power Projectwith Blockchain Technology in Chiang Mai University
Town Community in Thailand” which was chosen as a
JCM project for FY2020.
The project introduces a 2.5 MW solar power systemon the roofs of multiple campus buildings at Chiang
Mai University. Through the use of blockchain
technology, the project makes the expansion andmaximum utilization of renewable energy in thecommunity a reality and helps to significantly reduce
GHG emissions.

A solar power system in the town of Chiang Mai University,
Thailand, which employs blockchain technology

Building A

Sunlight

Inverter

Building B

Smart
meter

Sunlight

Inverter

Sunlight

Inverter

Smart
meter

Energy management through the blockchain* Picture is for illustrative purposes

75 Inabata Integrated Report 2021

Recycling flow of waste plastics
Inabata collects
waste plastics
Waste plastics collected
via truck

Plastics are consigned toa recycling contractor andreprocessed (re-pelleting)Re-pelleted resinmaterials

Expansion of sales

Biomass power business of Nishiawakura
in Okayama Prefecture

Building C

Smart
meter

The impact that plastics have on the environment hascome to be viewed as a problem in recent years. In
response to this situation, we thought of what we could
do as a company with a long history of dealing withresins, and devised the idea of a “recycled resinmaterials business” from the perspective of reusing
waste plastics. Though the quality and supply of
conventional recycled resin has been inconsistent, wehave made improvements through our own efforts,such as managing collection sites of waste plastics andtesting the physical properties of waste plastics in there-pelletizing process. We are taking on the challenge ofcreating a new concept that “recycled resins = added
value.” In addition, the recycled resin materials producedby Group companies are used as packaging materials,
contributing to the reuse of plastics and the promotionof a recycling-oriented society.

A meeting in Nishiawakura Village in Okayama Prefecture was
the inspiration that led to our company handling biomass*
power generation systems. A biomass power generation
project, using forest residues and thinned wood, contributes toforest conservation and enables people to generate their own
power, even in the event of power outages caused by a natural
disaster. We proposed the selection of a biomass power
generator and the construction of a system, including
installation, to Nishiawakura Village, which showed highinterest in such advantages. Though it was the first time for ourcompany to work on this initiative, we made steady progresson the project and completed installation in January 2021. At
present, with our track record in Nishiawakura Village as thestarting point, we are also moving forward with initiatives inAtsuma Town in Hokkaido Prefecture and other municipalities.

Gasification device

Gasification engine* This is a general term for organic biological resources
produced by plants and animals.

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Financial Information

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Financial Information

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Financial Information

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Financial Information

Sales by business segment
Information & Electronics

Chemicals(Billions of yen)
800.0 Bursting of theLife Industry

Plastics(Housing & Eco Materials)(Food)The Chemicals Segment has a

Lehman Brothers’ collapse

dot-com bubble

long history and is performing
steadily based on its strong

600.0

foundation of business partners.
400.0

The Plastics Segment has
expanded its business since the

200.0

rapid economic growth in the
1950s, ranging from home02000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
(Fiscal year)

ChemicalsLife Industry

Plastics

The Information & Electronics
Segment grew significantly along

Operating profit by business segment
Information & Electronics

appliances, OA to automobiles.

with the rapid growth of the LCD(Housing & Eco Materials)(Food)

market from 2000 onward.

(Billions of yen)
15.0

The Life Industry Segment has

12.0

agriculture and advanced medicine

9.0

in recent years and can bestarted activities in the fields of

expected to grow in the future.

6.0
3.0
0

Impact of including allowance of doubtful accounts at a European subsidiary-3.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
(Fiscal year)*1 In FY2012, the life science business of the former chemicals business and the former food business were integrated to form the life industry business.
*2 In FY2019, housing & eco materials business was integrated with the chemicals business.

Sales by domestic or overseas market
Japan

Abroad(Billions of yen)
500.0 Bursting of the

Inabata established its first

Lehman Brothers’ collapse

dot-com bubble

400.0

Overseas sales

53%alignment with production transfer
Overseassales

by Japanese companies to25%

locations outside Japan. Over the

100.0
0

1976 and has been rapidly
intensifying its global business in

300.0
200.0

post-war overseas subsidiary in

40 years since, its overseas
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
(Fiscal year)

business has expanded, and thepercentage of overseas sales hasgrown from 25% in FY2000 to
53% in FY2020

Operating profit by domestic or overseas market
Japan

Abroad(Billions of yen)
8.0

Overseas operating profit

54%

7.0
6.0
5.0
4.0
3.0
2.0

Overseas
operatingprofit

26%

1.0
0
-1.0

83 Inabata Integrated Report 2021

Impact of including allowance of doubtful accounts at a European subsidiary2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
(Fiscal year)

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Consolidated Subsidiaries and Affiliates

Consolidated subsidiaries
Corporate Name

Trading company

Countries and Regions

Manufacturing and processing baseBusiness

Japan

Corporate NameCountries and Regions

Business

Inabata Korea & Co., Ltd.

Korea

Seoul

Import & export and sale of electronic materials

Taiwan Inabata Sangyo Co., Ltd.

TaiwanHsinchu

Import & export and sale of electronicmaterials, semiconductor-related equipment
and chemicals

I & P Co., Ltd.

Japan

Osaki, Miyagi

Molding and processing of synthetic resins

Ikkoen Co., Ltd.

Japan

Sakai, Osaka

Processing and sale of marine products

Inabata Fine Tech Co., Ltd.

Japan

Osaka

Sale of chemicals

N · I · C Co., Ltd.

Japan

Tokyo

Processing and sale of plastic film products

IK Plastic Compound Mexico, S.A. de C.V.

MexicoSilao

Compounding of resins

Ordiy Co., Ltd.

Japan

Osaka

Processing of plastic film products andpackaging materials, design and marketingof supplementary equipment and systems

Inabata Mexico, S.A. de C.V.

MexicoQueretaro

Sale of synthetic resins, food and chemicals

NH Inabata, S. de R.L. de C.V.

MexicoQueretaro

Installation, distribution and maintenance ofoverhead traveling cranes

DNI Group, LLC

U.S.

Novato(California)

Import & export and sale of foodInabata America Corp.

U.S.

New York

Import & export and sale of chemicals,
electronic materials, food, and synthetic resins

The Americas

Kansai Kobunshi Co., Ltd.

Japan

Yamato-Koriyama, Nara

Manufacturing of plastic films

Taiyo Plastics Co., Ltd.

Japan

Hasuda, Saitama

Manufacturing of plastic films

Inabata India Private Ltd.

India

Gurugram(suburb of Delhi)

Import & export and sale of synthetic resins,
electronic materials and chemicals

PT. IK Precision Indonesia

Indonesia

Bekasi(suburb of Jakarta)

Molding and processing of synthetic resins

Inabata France S.A.S.

FranceWissous(suburb of Paris)

Import & export and sale of chemicals

PT. Inabata Creation Indonesia

Indonesia

Bekasi(suburb of Jakarta)

Processing of grip tapes for tennis rackets

Pharmasynthese S.A.S.

FranceNormandy

Manufacturing of pharmaceuticals, materials
for cosmetics, and fine chemicals

PT. Inabata Indonesia

Indonesia

Jakarta

Import & export and sale of synthetic resinsand chemicals

Inabata Europe GmbHGermany

Dusseldorf

Import & export and sale of electronicmaterials, chemicals, and synthetic resins

PT. S-IK Indonesia

Indonesia

Bekasi(suburb of Jakarta)

Compounding of resins

Inabata UK Ltd.

U.K.

Telford(suburb of Birmingham)

Property management, warehousing

Inabata Malaysia Sdn. Bhd.

Malaysia

Kuala Lumpur

Import & export and sale of synthetic resins

SIK Color (M) Sdn. Bhd.

Malaysia

Johor

Compounding of resins

IK Plastic Compound Phils. Inc.

Philippines

Binan (suburb of Manila)

Compounding of resins

Inabata Philippines, Inc.

Philippines

Binan (suburb of Manila)

Sale of synthetic resins

Inabata Singapore (Pte.) Ltd.

Singapore

Singapore

Import & export and sale of synthetic resins,chemicals and electronic materials

Apple Film Co., Ltd.

ThailandSamut Prakan(suburb of Bangkok)

Manufacturing of plastic films

Hi-Tech Rubber Products Co., Ltd.

ThailandAyutthaya

Molding and processing of rubber products

Inabata Thai Co., Ltd.

Thailand

Bangkok

Import & export and sale of synthetic resins,chemicals, food, and machinery

SIK (Thailand) Ltd.

ThailandSamut Prakan(suburb of Bangkok)

Compounding of resins

Apple Film Da Nang Co., Ltd.

Vietnam

Da Nang

Manufacturing of plastic films

Inabata Vietnam Co., Ltd.

Vietnam

Hanoi

Import & export and sale of synthetic resins,
electronic materials and chemicals

Corporate NameSIK Vietnam Co., Ltd.

Vietnam

Haiphong

Compounding of resins

Japan

Southeast Asia / India

Northeast Asia
Guangzhou Inabata Trading Co., Ltd.

China

Guangzhou

Import & export and sale of synthetic resins,
machinery, electronic materials and chemicals

Inabata Industry & Trade (Dalian F.T.Z.)
Co., Ltd.

China

DalianCompounding of resins; Import & export andsale of synthetic resins and chemicals

Inabata Sangyo (H.K.) Ltd.

China

Hong Kong

Import & export and sale of synthetic resins,
machinery, electronic materials and chemicals

Shanghai Inabata Fine Chemical Co.,
Ltd.

China

ShanghaiProcessing of coating materials

Shanghai Inabata Trading Co., Ltd.

China

Shanghai

Import & export and sale of synthetic resinsand chemicals

85 Inabata Integrated Report 2021

EuropeEquity-method affiliates
Corporate NameCountries and Regions

Business

Ulvac Coating Corp.

Japan

Chichibu, Saitama

Manufacturing of electronics and opticalindustrial materials

NI Packs Co., Ltd.

Japan

Inashiki, Ibaraki

Printing and molding of plastic packages

Clean Assist Co., Ltd.

Japan

Tokyo

Sale of plastic films and plastic sundries

Maruishi Chemical Trading Co., Ltd.

Japan

Osaka

Sale of chemicals

Other affiliates
Countries and Regions

Business

Aikei Farms Shakotan Co., Ltd.

Japan

Shakotan, Hokkaido

Production and sale of agricultural products

Aikei Farms Yoichi Co., Ltd.

Japan

Yoichi, Hokkaido

Production and sale of agricultural products

Inabata Optech Co., Ltd.

Japan

Kawasaki, Kanagawa

Research and development, manufacturing
and sale of encapsulants for opticalsemiconductor devices

China

Tianjin

Import & export and sale of synthetic resinsand chemicals

Brazil

Sao Paulo

Sale of chemicals and synthetic resins

Northeast Asia
Tianjin Inabata Trading Co., Ltd.
The Americas
Inabata Brazil Import & Export Ltd.

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Corporate Information
Company nameInabata & Co., Ltd.

Founded

October 1,1890

Incorporated

June 10,1918

Paid-in capital*¥9,364 million

Location ofhead offices

Osaka Head Office
1-15-14 Minami-semba, Chuo-ku, Osaka
542-8558

Stock Information (As of March 31, 2021)
Organization(As of July 1, 2021)

Information &Electronics Div. II

Overseas offices*

Number of
employees*

KPMG Azsa LLC

Securities code

8098
First section of the Tokyo Stock Exchange

Plastics Div. I

GeneralMeeting of
Shareholders

Board of Directors

Plastics Compound
Business Office

Audit &
Supervisory Board

Plastics Div. II
General Affairs
Office*As of March 31, 2021

Information
Technology Office

WebsiteFinancial
Management Officewww.inabata.co.jp/english/

Business Process
Management OfficeCompliance Committee

Human Resources
OfficeInternal Control
Committee

Risk Management
OfficeHuman Rights
Affairs Committee

Business Planning
OfficeExport Control Committee

Internal Audit Office

IR Activities
We are proactive in holding dialogue with shareholders andinvestors, as we believe it contributes to our sustainable growthand improves corporate value in the medium and long term.
(1) IR system• The president serves as the responsible person, and the
director in charge of IR has also been appointed. In principle,
the president and the director in charge of IR lead dialogue
with shareholders and investors.
• In cooperation with related sections within the company, theIR Department collects and analyzes various management
information. The information is communicated internally andexternally, timely and appropriately.
(2) IR activities• Inabata handles meetings with investors positively andreasonably.
• Inabata holds a briefing on financial results twice a year to
explain the progress of the medium-term business plan andprovide an overview of financial results.
• Inabata sets occasions for dialogue with individual shareholders
and investors through participation in IR events, etc.
• Inabata actively works to provide information through its
website, company brochure, shareholder news, and noticesof general meeting of shareholders.

87 Inabata Integrated Report 2021

Total number of authorized shares

200,000,000

Number of shares issued and outstanding

63,499,227

Number of shareholders

15,674

Treasury stock
4.8% (1)Securities
companies
0.6% (27)

Individuals/others
12.0% (15,193)

63,499(Thousand shares)

Domestic
corporations
30.8% (197)

Financial institutions
24.7% (28)Foreign investors
27.1% (228)Life Industry Div.

About 60 locations in 17 countries including
Singapore, Bangkok, Jakarta, Shanghai,
Hong Kong, Taipei, Los Angeles, New York,
Dusseldorf

Independent auditor

Status of Stock Allocation by Owners

Chemicals Div.

Osaka Head Office, Tokyo Head Office,Nagoya Office, Shiojiri Office,Hamamatsu Office, Kyushu (Kirishima) OfficeUnconsolidated: 656 (including employees
seconded to group companies)
Consolidated: 4,203

Stock Information

Information &Electronics Div. IIITokyo Head Office
2-8-2 Nihonbashi-honcho, Chuo-ku, Tokyo
103-8448
Domestic offices*

Information &Electronics Div. I

Principal Shareholders (Top 10)
Name of shareholder
Sumitomo Chemical Co., Ltd.
The Master Trust Bank of Japan, Ltd. (Trust account)
Custody Bank of Japan, Ltd. (Trust account)
Custody Bank of Japan, Ltd.
(Mizuho Bank, Ltd. Retirement Benefit Trust Account re-entrusted by Mizuho Trust and Banking Co., Ltd.)SSBTC CLIENT OMNIBUS ACCOUNTSTATE STREET LONDON CARE OF STATE STREET BANK AND TRUST,BOSTON SSBTC A/C UK LONDON BRANCH CLIENTS - UNITED KINGDOM
Katsuo Inabata
DFA INTL SMALL CAP VALUE PORTFOLIO
Maruishi Chemical Trading Co., Ltd.
ASKA Pharmaceutical Co., Ltd.

Number of shares
held (in thousands)
13,836
3,971
2,693

Percentage ofshares held (%)
22.9
6.6
4.5

1,736
1,272

2.9
2.1

1,244
1,161
1,088
961
785

2.1
1.9
1.8
1.6
1.3

Note: Inabata owns 3,010,331 shares of treasury stock. This shareholding has not been included in the calculation of the shareholding ratio.
However, 100,000 shares of Inabata held by Custody Bank of Japan, Ltd. (Trust account E) as a trust property under the Board Benefit Trust (BBT)
system is excluded from the number of the treasury shares, and hence, is included in the calculation of the ratio.

Stock Price
Stock price
(yen)
2,000
1,800
1,600

(3) Feedback• The director in charge of IR presents a report to the board of
directors regarding shareholder opinions and concerns
obtained through dialogue with shareholders.

1,400
1,200
1,000
800

IR activities in FY2020

600

Activity
Implemented
Financial results briefings
2 times
Individual meetings with institutional investors,
37 times
analysts, etc. (including overseas)
Briefings for individual investors
1 time400

External evaluation
Inabata received the Bronze Award in the Gomez IR Site
Comprehensive Ranking 2020 announced by Morningstar
Japan K.K. and the AA
Prize in the All Japanese
Listed Companies’
Website Ranking 2020
announced by Nikko
Investor Relations Co.,
Ltd. (Nikko IR).

200
0FY2011FY2012FY2013

FY2014FY2015Credit Rating
Rating agency
Rating and Investment Information, Inc. (R&I)

FY2016FY2017FY2018FY2019FY2020A cautionary note regarding future estimates

Issuer rating
A- (stable)

The data and future predictions contained in this report are basedon information available and judgments applicable at the time of
the report’s release. Consequently, the data and future forecasts
contained herein may include elements that are subject to change,
and the reader should be aware that this document and its
contents are no guarantee of future performance.

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