Financial Results Presentation
for the 2nd Quarter of the FY2021
November 17, 2020

Code number：4099

Contents

I.

Corporate Profile (Business Structure)

P3

II. Financial Results for the 2nd Quarter of the FY2021 P6
III. Forecast of Financial Results for the FY2021

P16

IV. Long-term Vision Challenge 1000

“STAGE 1” Progress Status
V. References

P20
P32

2

Ⅰ．Corporate Profile(Business Structure)Ⅰ －１．Corporate Profile（As of September 30, 2020）◼ Company nameSHIKOKU CHEMICALS CORPORATION◼ Code number

4099◼ Stock exchange
listing

Tokyo◼ Incorporated

October 10, 1947

◼ Head Office

Marugame, Kagawa Prefecture◼ President and C.E.O.

Naoto Tanaka◼ Capital

6,867 million yen◼ Number of employees

1,217（Consolidated）◼ Net sales

51,564 million yen

Industry：Chemicals（Consolidated ・As of March 31, 2020）4

Ⅰ －２．Business Structure◼ Two main business pillars, which arechemical products and housing materials.
There are five segments.

Chem icals
operations

Inorganic
Chemicals

Organic
Chemicals
Fine
Chemicals

SHIKOKU
CHEMICALSCORPORATION
Housing
M aterials
operations

Interior, exterior
finishes andpaving materials
Exterior
products
5

Ⅱ．Financial Results

for the 2nd Quarter of
the FY2021

Ⅱ －１. Overview

1

Due to the influence of the novel coronavirus, sales decreasedby 8.9% compared to the previous term, and net profit
decreased by 24.1% compared to the previous term.

Net sales for the chemicals operations segment were down
9.2% year-on-year, and segment profit was down 27.9% yearon-year.
2 Net sales for the housing materials operations segment were
down 9.2% year-on-year, and segment profit was down 12.4%
year-on-year.

As an outlook for this term, we revised the profit upward from thepreviously announced value to 49 billion yen, which is +2.1% of thesales, and also revised the net profit for each stage upward to 6.8
3 billion yen, which is +7.9% of the operating profit, in anticipation ofsales recovery in Insoluble sulfur due to normalization of the
production activity at tire manufacturers and the strong sales
performance with Chlorinated Isocyanurates in the U.S. market.

7

Ⅱ －２．Consolidated Financial Results■ Highlights of Financial Results for the 2Q of FY2021(Millions of yen)
Consolidated cumulative 2Q
FY2020

AmountIncrease ofamountFY2021

Percentage

AmountChanges

Percentage

Net sales

25,693100.0%

23,408100.0%▲ 2,285▲8.9%

Operating Income

3,567

13.9%

2,609

11.1%

▲ 958

▲26.9%

Ordinary income

3,626

14.1%

2,822

12.1%

▲ 803

▲22.2%Net income attributableto owners of the parent

2,534

9.9%

1,924

8.2%

▲ 609

▲24.1%

Exchange rate (USD)

109

107

Exchange rate (EUR)

123

120

8

Ⅱ －３. Sales and Profit by Business segments（Millions of yen）

Consolidated cumulative 2Q

Net Sales

FY2020percentage

FY2021percentage

Changes

Inorganic Chemicals

6,227

24.2%

4,669

19.9%

▲ 25.0%Organic Chemicals

5,519

21.5%

5,744

24.5%

4.1%

Fine Chemicals

3,993

15.5%

3,882

16.6%

▲ 2.8%

Subtotal

15,74061.3%

14,29761.1%▲ 9.2%

Interior, exterior finishes
and paving m aterials

836

3.3%

710

3.0%

▲ 15.1%

Exterior Products

8,756

34.1%

8,001

34.2%

▲ 8.6%

Subtotal

9,593

37.3%

8,711

37.2%

▲ 9.2%

Other

360

1.4%

399

1.7%

11.0%

Total

25,693100.0%

23,408100.0%▲ 8.9%

Chemicals
operations

Housing
Materials
operations

Consolidated cumulative 2Q

Segment Profit

FY2020

FY2021

Changes

Total of Chemicals operations

2,955

2,131

▲ 27.9%Total of Housing Materials operations

1,527

1,337

▲ 12.4%9

Ⅱ －４. Overview of Sales by Segment (Chemical Products)(Millions of yen)

Inorganic chemicals◆◆◆

Organic chemicals

Fine chemicals

Sales of Insoluble sulfur , remained sluggish, affected by the global production adjustments for automobiles
amid the spread of COVID 19. However, sales are on a recovery track as production activities bottomed out inthe first quarter and are returning to normal gradually. Sales of carbon disulfide and sodium sulfate remainedsluggish.
Regarding Chlorinated Isocyanurates, sales of agents for swimming pools were stagnant in the domestic
market, affected by the cancellation of swimming lessons at schools due to the spread of COVID -19,while sales
remained strong in the U.S. market with increased demand for agents for home swimming pools.
Regarding Fine chemicals for the automotive industry fell below the previous year’s result, affected by the
production adjustments for automobiles.

10Ⅱ －５. Overview of Sales by Segment(Housing Material Products)(Millions of yen)Interior, Exterior Finishes
and Paving Materials

Exterior Products◆Sales of Insoluble sulfur , remained sluggish, affected by the global production adjustments
for automobiles amid the spread of COVID 19. However, sales are on a recovery track as
production activities bottomed out in the first quarter and are returning to normal gradually.
Sales of carbon disulfide and sodium sulfate remained sluggish.

11

Inorganic Chemicals

Organic Chemicals
Operating profit incurrent term

Other

Decrease in costof logistics

Increase in costof salesDecrease in sales
volumeIncrease in sales
price

Other

Increase in costof logistics

Decrease in costof salesIncrease in sales
volumeDecline in sales
price

Other

Increase in costof logistics

Increase in costof salesDecrease in sales
volumeDecline in sales
price

Operating profit inprevious term

Ⅱ －６. Analysis of Increase/Decrease in Chemical Segment Profit（Millions of yen）

Fine Chemicals

12Interior, Exterior Finishes
and Paving Materials
Exterior Products

Operating profit incurrent term

Other

Increase in costof logistics

Decrease in costof salesDecrease in sales
volumeincrease in sales
price

Other

Increase in costof logistics

Increase in costof salesDecrease in sales
volumeincrease in sales
price

Operating profit inprevious term

Ⅱ －７. Analysis of Increase/Decreasein Housing Material Segment Profit（Millions of yen）

13

Ⅱ －８. Consolidated Balance Sheets*The value in () indicates the ratio compared to March 2020
(Millions of yen)

Current assets

Liabilities
25,379（ ▲3,869）• Increase in notes andaccounts payable(▲1,548)

57,429（▲5,674）• Decrease in cash andsavings （▲3,780）• Decrease in cash anddeposits （▲1,997）

Net assets

Total assets

72,489（+842）

97,868（▲3,028）

Non-current assets
40,439（+2,647）• Increase in investment
securities （+2,512）

ROE

5.4%

Capital-to-asset ratio (％)

73.3%• Increase due tocancellation of treasury
shares （＋1,810）• Valuation difference on
available-for-salesecurities（+1,225）• Retained earnings（▲2,100）

14

Ⅱ －９. Consolidated Statements of Cash Flows◼ Cash flows fromoperating activities◼ Cash flows frominvesting activities◼ Cash flows fromfinancing activities(Millions of yen)

Revenue decreased due tothe decrease in net profit forthe current term before
adjustment for taxes (▲818
million yen) and the decreasein trade receivables (▲707
million yen).

Although expenditure
increased due to theacquisition of
investment securities(▲2,243 million yen), it
also decreased due to therevenue from redemptionof securities (+3,500
million yen).

Expenditure increased
due to acquisition oftreasury shares(▲1,605 million yen).

15

Ⅲ．Forecast of Financial
Results for the FY2021

※ The full-year financial results forecast

been changed from the most recent
Ⅲ －１. The full-year financial results forecast hasplan (announced on July 28, 2020).

（Billions of yen）

FY 2021

FY 2020
Net sales

OperatingincomeOrdinary
incomeNet income
attributable toowners of theparent(Actual values
for the first half)

Increase ofamountChanges

1st half

25.6

23.4

▲ 2.2

▲ 8.9%

2nd half

25.8

25.5

▲ 0.2

▲ 1.1%

full year

51.5

49.0

▲ 2.5

▲ 5.0%

1st half

3.5

2.6

▲ 0.9

▲ 26.9%

2nd half

4.2

4.1

0.0

▲ 2.1%

full year

7.8

6.8

▲ 1.0

▲ 13.4%

1st half

3.6

2.8

▲ 0.8

▲ 22.2%

2nd half

4.3

4.1

▲ 0.2

▲ 5.0%

full year

8.0

7.0

▲ 1.0

▲ 12.7%

1st half

2.5

1.9

▲ 0.6

▲ 24.1%

2nd half

3.0

2.8

▲ 0.2

▲ 6.5%

full year

5.6

4.8

▲ 0.8

▲ 14.4%*Exchange rate assumed: 105 yen/US dollar, 120 yen/Euro17

Ⅲ －2. Business Forecast by Segment(Consolidated)※ The full-year financial results forecast

has been changed from the most recent
plan (announced on July 28, 2020).

(Billions of yen)

FY 2020

FY 2021(Actual values
for the first half)

Increase ofamountChanges

Net sales
Chemical

1st half

15.7

14.2

▲ 1.5

▲ 9.2%

operations

2nd half

14.4

14.1

▲ 0.3

▲ 1.8%

full year

30.1

28.3

▲ 1.8

▲ 6.0%

Housing

1st half

9.5

8.7

▲ 0.8

▲ 9.2%

Materials

2nd half

11.0

11.0

0.0

0.0%

operations

full year

20.6

19.7

▲ 0.9

▲ 4.4%

Chemical

1st half

2.9

2.1

▲ 0.8

▲ 27.9%operations

2nd half

2.7

2.5

▲ 0.2

▲ 7.4%

full year

5.6

4.6

▲ 1.0

▲ 17.9%Housing

1st half

1.5

1.3

▲ 0.2

▲ 12.4%

Materials

2nd half

2.4

2.5

0.1

4.2%

operations

full year

3.9

3.8

▲ 0.1

▲ 2.6%

Segment Profit*Exchange rate assumed: 105 yen/US dollar, 120 yen/Euro18

Ⅲ －3. Capital investment, Depreciation, R&D expense（Consolidated）(Millions of yen)

Capital investment

Depreciation
R&D expenses(Millions of yen)

FY2016FY2017FY2018FY2019FY2020

FY2021
Forecast

Capitalinvestment

2,952

3,815

1,628

2,073

1,961

6,221

Depreciation

1,747

1,645

2,318

2,281

2,189

1,959

R&D
expenses

1,358

1,235

1,310

1,295

1,338

1,362

19

Ⅳ．Long-term Vision
Challenge 1000

“STAGE 1”
Progress Status

Ⅳ －１. Milestones of Challenge 1000
FY

2021

2026

2023

2030

Long-term Vision Challenge 1000
STAGE 1

Desiredstate in
2030

STAGE 2STAGE 3To become a company making a proposal
one step ahead with Doku-souryoku(creativity)
To resolve the social challenges with creative ideas andto lead in global progress21

Ⅳ －２. Outline of Challenge 1000
Financialgoals

Pillars for
Strategy

Net Sales
100 billions of yen

Business reform
policyCompanywide
reform policy
Operating Income
15 billions of yen
Proactive
investment

ROE
10％

Contribution to
SDGs

22

Ⅳ －３. Yonpou Yoshi (Contributions to Stakeholders)Customer
Value One-step-ahead
Providing new values
with unique, state-of-theart products and services

Employee

Society

Challenge and growth
Supporting with creation of
spare capacity, company
climate, and humanresources throughcompany-wide reform
policies

Better tomorrow
Contributing to theresolution of social issues
and realizing a rich living
environment

Shareholder
Shareholders return policy
Dividend payout ratio:
30%
Total tendency for return:50%

23

Ⅳ －４. Milestones of Challenge 1000
(Billions of yen)
1,200
120

1
0.95
Net Sales

100.0
1,000
1,000
100

5.0
800
80.0

80
800

60
600

95.0

51.6
516

60.0
600

49.0
490

0.85

New
business
0.75
sales
0.8

0.7

Existing
0.65

2.5
52.8
528

（Consolidated）
0.9

business
sales

0.6

77.5

0.55
0.5

Operatingprofit ratio

0.45

15.2％

15.2％

15.0％

13.9％

15.0％

13.0％

400
40

0.4

0.35
0.3
0.25

0.2

200
20

0

0.15

8.0

7.8

6.8

2018年度FY2020 2020年度
FY2019 2019年度
FY2021（Forecast）
99期
100期
101期

102期

STAGE 1

Operating
0.1
Income15.0
0.05（Consolidated）

7.5

12.0

2022年度FY2023

2025年度FY20262029年度FY2030

103期

106期

110期

STAGE 20

STAGE 324

Ⅳ －５. Pillar for Strategy （Policy for business reform）

sanitary
deviceschemicalfor ballast
water
treatment
GliCAP

Housing
Materials◆Internet sales of final consumer productsInternet sales of “NEO-CHLOR Stick,” a sanitizer
product.
We will continue to focus on developing productsthat protect the sanitary environment.
◆Improvement in supply system
To increase the sales of “NEO-CHLOR MARINE,” thechemical for ballast water treatment, a new plant iscurrently under construction within the premises ofTokushima Plant.
It is scheduled to be completed in July 2022.
◆Activities for approval ongoing
Evaluation is currently being conducted at the
production facilities of a customer to achieve
adoption of “GliCAP” for application in 5G
communication boards.

◆Substantiating the high strength product lineup
We have prepared a rich lineup of high-strength
exterior products that are resistant to large-scaledisasters such as typhoons.

25

Ⅳ －６. Pillar for Strategy （Companywide reform policy）

Creation ofvalues◆ Establishment of Shikoku Chemicals quality policy
It was stipulated to “increase the levels of not only products
but also all activities.”◆ Efforts to explore new businesses
Ideas were solicited from employees of all group companies.

Creation ofreserveenergy◆ Implementation of telework as a reform in way of work
Construction of an environment where employees areencouraged to work and create new values with theintroduction of telework and sales efficiency improvement
tools.

Creation ofhuman
resources◆ Setting up the desired image of human resources, anddevoting efforts to recruit and develop human resources
Defining the desired image of human resources as “humanresources with a sense of mission who think by themselves
and take on challenges,” and focusing on securing anddeveloping excellent human resources.

26

Ⅳ －７. Pillar for Strategy（Proactive investment）
有機化成品
New
establishment of a fine chemical multiplant at Kitajima Office, Tokushima Plant▶ Demands for semiconductors have been growing since the arrival of
the IoT era.
▶ Needs for high-quality, high-function materials are growing among
manufacturers who manufacture and develop semiconductor processmaterials.
▶ Construction of a plant equipped for high quality such as low metal
control has been decided in order to produce state -of- the -a r t
semicond uc to r process materials .
▶ Its construction began in February 2020 with approximately 2.5 billion
yen in investment, and it is scheduled to be completed in July 2021.

有機化成品
Constructionof a new plant for chlorinated Chlorinated Isocyanurates at Kitajima Office, Tokushima Plant▶ Globally, the impact of transboundary movements of aquaticorganisms in ballast water in concurrence with the traffic of ships
on the ecosystems has turned serious. There are also many
areas where it is difficult to secure clean water, and solution of the social
issues such as improvement in the water sanitation environment is urgently
demanded.
▶ It was decided to build a new plant to respond to the increasing
demands for Chlorinated Isocyanurates for purposes such as
improving water environment.
▶ Its construction began in September 2020 with approximately 5 billion yen in
investment, and it is scheduled to be completed in July 2022.

27

Ⅳ －８. Pillar for Strategy (Contribution to SDGs)

Chemicaloperations◆NEO-CHLOR MARINE
Chlorine treatment chemical to prevent
damages to the environment in
concurrence with the ejection of organisms
contained in ballast water.
Contributes to the protection of theecosystems.
◆Glicoat-SMD
Rust preventive agent for printed wiringboards which boasts the world’s top share.
Since this product is water-soluble, it can
provide a work environment friendly to bothpeople and the earth.

28

Ⅳ －９. Pillar for Strategy(Contribution to SDGs)

Housing Materials
operations◆Diatomaceous earth walls series
Wall material mainly consisting of
diatomaceous earth.
A people-friendly interior material thatabsorbs the harmful formaldehyde andbreaks it down into non-hazardous
substances.
◆Art Wall
External fence combining aluminum frameand decorative materials.
The light-weight main body structure isdesigned to minimize damage even in caseof collapse.

29

Ⅳ －１０. Shareholders return–Transitions in Dividend Payouts–（ Millions of yen ）
3,500
3,000

(%)
自己株式取得額
Share Repurchases

配当総額
Total
Dividends

連結総還元性向（％）
Total Payout Ratio(%)

ROE（％）
ROE(%)

60.0

56.6

50.0

2,500
1,786

2,000

40.0
1,605

30.0
23.8

1,500

18.6

19.5

20.0

1,000

10.1

10.3

500
0

Dividends per
share (annual)

7.9

8.0

10.0

1,080

1,285

1,285

1,389

1,334

2017/3
FY2017FY2018
2018/3

FY20192019/3

FY20202020/3

FY20212021/3（forecast）
（予想）

18.5

22.0

22.0

24.0

24.0

0.0

30

Thank you for listening.

V．ReferencesⅤ －１. History
Oct 1947

Established in Marugame, Kagaw a Prefecture w ith a capital of 2 million yen as a producer of carbon disulfide (=>inorganic chemical products)

Oct 1957

No. 1 Tokushima Plant (now Tokushima Plant’s Yoshinari location) w as constructed and began operations in the
production of sodium sulfate (=> inorganic chemical products)

May 1961

CMC production began at No. 1 Tokushima Plant. We applied CMC to w all material later

Jun 1962

No. 2 Tokushima Plant (now Tokushima Plant's Kitajima location) w as constructed

Oct 1962

The Company’s shares w ere listed on the Second Section of the Tokyo Stock Exchange

May 1964

Japan’s first operations to produce chlorinated isocyanurates (=> organic chemical products) w ere launched at No. 2
Tokushima Plant

Dec 1969

The Company began production of OSP (Organic Solderability Preservative) (w hich w as later called Glicoat-SMD (=> Fine
Chemicals) for PWBs (Printed Wired Board) and other electronic components

Sep 1970

The Company began production in the field of housing materials, launching production of interior finishes (JULUX) at No.
2 Tokushima Plant

Jun 1972

The Company began production and sales of accordion gates (=> Exterior Products)

Mar 1975

The Company moves its share listings from the Second to First Sections of the Tokyo Stock Exchange and Osaka
Securities Exchange

Jul 1975

Tadotsu Plant w as constructed in Tadotsu, Kagaw a Prefecture

Nov 1975

Full-scale production of imidazole (=> Fine Chemicals) began at No. 2 Tokushima Plant (test production began in 1968)

Jun 1981

The Company opened a representative office in Los Angeles (w hich later became an overseas subsidiary as SIC in 1985)

Jul 1984

Production of insoluble sulfurs (=> Inorganic Chemicals) began at Marugame Plant

Sep 1992

The Research Center (now R&D Center) w as constructed in Utazu, Kagaw a Prefecture

Oct 1995

Ranzan Plant w as constructed in Ranzan, Saitama Prefecture

Jul 2006

Shikoku (Shanghai) Co., Ltd. w as established in Shanghai

2008

The Company began sales of a roughening agent for PWBs (=> Fine Chemicals), and constructed a new plant for GlicoatSMD at Marugame Plant

Aug 2013

Tokushima Advanced Chemicals Plant-3 (TAP-3) facility w as constructed at Tokushima Plant

Sep 2014

Converted Nippon Ryutan Kogyo Co., Ltd., the only carbon disulfide production company in Japan, into a consolidated
subsidiaryApr 2015

Offices w ere established in Taiw an and Singapore

Oct 2016

Physical Testing Laboratory w as constructed at R&D CenterMar 2017

Insoluble sulfur production facilities w ere enhanced

Apr 2017

Converted Nippon Koki Co., Ltd. into a subsidiary33

Ⅴ －２. History and Sales Trends
Net Sales

1975

Moved to Tokyo Stock
Exchange Section 1
1962
Listed on Tokyo Stock
Exchange Section 2

2008
2004
1991

1947
Establishment

1984
1972
1970

1968
1964

1957
1947

Microetching solution
for PWBs

Advanced Materials

Glicoat-SMD
Insoluble Sulfur
Exterior Products
Wall materials
Imidazoles

Chlorinated Isocyanurates
Sodium Sulfate
Carbon Disulfide

34

Chemicals operations

Chemicals operations①Inorganic Chemicals

Ⅴ －３. Inorganic Chemicals(Millions of yen)

Inorganic
Chemicals[Major products]□ Carbon Disulfide …Essential materials for chemical
fiber rayon□ Insoluble Sulfur…Rubber vulcanization agent□ Sodium Sulfate…Warm bath effect accelerator forbath additives
Synthetic detergent cleaning aid

4,669(19.9％)

FY2021
Consolidated
cumulative 2Q
Net sales
23,40837

Ⅴ －４. Insoluble Sulfur-Product Introduction□

□
□

□

□

□
□

Application: Vulcanizing agent for rubber
Main customers: Domestic and overseas tire manufacturers
The raw material rubber is hard, and it acquires the characteristic to extend and contractby adding sulfur and heating (vulcanizing).
W hen normal sulfur is used in the production process of radial tires, sulfur blooming(deposition) occurs on the surface of rubber and cause poor adhesion of rubber.
Since insoluble sulfur is dispersed in the material rubber, it can be used to suppress blooming.
For production of insoluble sulfur, polished handling technique for the company foundation
product “carbon disulfide” is required.
High quality is demanded in insoluble sulfur by tire manufacturers.
In March 2017, production facility expansion was completed, and our production capacity wasincreased to 1.3 times.
■ Insoluble Sulfur■ Manufacturing processes for insoluble sulfur (schematic diagram)Heating
450°C

Gaseous sulfur
Slow coolingRapid cooling(using carbon disulfide)
n=400-1,200nNormal sulfur

Insoluble Sulfur

38

Chemical operations②Organic Chemicals

Ⅴ －５. Organic Chemicals(Millions of yen)

[Major products]
Chlorianted Isocyanurates（NEO-CHLOR）… for swimming pool and septic tankdisinfectants□ HIPOLKA… Wastewater/sludge treatment
agent□

FY2021
Consolidated
cumulative 2Q
Net sales
23,408Organic
Chemicals
5,744(24.5%)40

Ⅴ －６. Chlorinated Isocyanurates-Product IntroductionApplications: Sanitizing agent for swimming pools and septic tanks, chlorine-based sanitizing agent forspas and home baths□ Main customers: Swimming pool operators, schools, general consumers (U.S.)□ Main component: Chlorinated Isocyanurates□ Compared to other disinfectant agents for swimming pools, “NEO-CHLOR” is characterized by longer
duration in outdoor pools and little quality deterioration even after a long period of storage, as it undergoes
little degradation caused by ultraviolet rays.
□ It delivers strengths in “NAPIX,” an automatic chlorine feeder for swimming pools and business baths.
□ Utilizing the strong oxidation, bleaching, and cleaning power of chlorine, we are developing various fields
of application such as industrial and home sanitary field, ballast water (seawater used as weight on thebottom of the ship) treatment, drinking water application, and sanitation management applications invarious facilities.
□◼ NEO-CHLOR Product group◼ Image of ballast water sanitization

Filter

Sanitization

Neutralization

Mixing
Cl

O

N

Cl N

O
N Cl

Sea water
injection
BackwashBallast tank

Sea water
discharge

O

ChlorinatedIsocyanurates「NEO-CHLOR MARINE」

41

Chemical operations③Fine Chemicals

Ⅴ －７. Fine Chemicals(Millions of yen)

FY2021
Consolidated
cumulative 2Q
Net sales
23,408[Major products]
Fine Chemicals
3,882(16.6％)

Water-soluble rust preventive agent for
printed wiring boards (OSP)□ Advanced & Specialty Chemicals…
Imidazoles (curing agent of epoxy resin)□Glicoat-SMD…

□

THEIC

□

Solder resist

Resin modifier, raw material for drug
… Raw material for heat-resistant wirevarnish43

Ⅴ －８. OSP: Organic Solderability Preservative-Product Introduction□

□
□

□

□

□

Application: Water-soluble rust preventive agent for printed wiring boards
OSP: Organic Solderability Preservative]
Main customers: Printed wiring board manufacturers all over the world
By forming an organic coating on the copper circuit of the printed wiring board to preventoxidation of the exposed copper circuit, it ensures good soldering performance in theimplementation process, and contributes to reliable electronic component manufacture.
The main component of OSP is imidazole, which has a property to selectively undergo chemical
reaction with copper. Our strength is that we are also an imidazole manufacturer and cansynthesize the main ingredient to suit the required properties of OSP.
While rust preventive agents for printed circuit boards include metal plating in addition to OSP,
the percentage of OSP is still increasing.
Glicoat-SMD has acquired a lot of material designations from major electrical manufacturers, andhas become an industry standard.
By increasing the environmental performance ahead of other companies, we are increasing the
adoption results for automotive electrical components and semiconductor package boards.
◼ Printed wiring boards going throughGlicoat-SMD treatment tank

◼ Treatment with Glicoat-SMD (schematic diagram)
Substrate

Solder resist

Glicoat-SMD coating

O2

O2

Coppercircuit

Treatment with Glicoat-SMD (left picture)44

Ⅴ －９. Advanced & Specialty Chemicals-Imidazoles
□
□
□

□

□

□

Application: Curing agent and curing accelerator for epoxy resin*, raw material for drugs
Main customers: Resin material manufacturers and drug manufacturers
Imidazole is used in a wide range of applications, including curing agent for epoxy resin and urethane
resin, raw material of drugs and agricultural chemicals, and raw material of various industrial
chemicals such as rust preventive agents.
The majority of our company sales come from application as an epoxy resin curing agent.
Epoxy resin which used imidazole as a component has optimal properties for electrical and electronic
component applications.
We have a lineup of various imidazoles to support the diverse curing speeds and properties
demanded by the users.
In the fields where competitive products (non-imidazole products) were strong, there isa movement for customers to newly adopt imidazole to improve the product performance.

*Epoxy resin: A collective term for resin-like compounds with epoxy groups that readily react at theends of a molecule, and thermosetting synthetic resins that are formed by polymerizing
the compounds with curing agents. Used in printed circuit boards, paints, etc. in addition to adhesives.
◼ Electronic part using epoxy resin (example)◼Applications of imidazoles from our company

Polyurethane
ポリウレタンDrugs and agricultural chemicals
医農薬
Automobiles
自動車

other
その他

･ Rubber applications･ Adhesive forstructures

Industrial
paint
工業用塗料

N

Electrical and electronic
insulating materials

NH

Imidazole45Ⅴ －１０. Advanced & Specialty Chemicals-Imidazoles
Engine CPU

Car navigation system[Laminated plate, sealing agent,solder resist ink]

[Liquid crystal sealing material]

Engine hood
[CFRP (reinforcedcarbon fiber)]Frame structure[Adhesive forstructures]Electric motor

Tires [Tire grip improving agent][Insulating powder
paint]Air hose[Acrylic rubber agent]46

Ⅴ －１１. Focused Products (Printed Wiring Boards Agents)◼

GliCAP®

Adhesion improving agent between copper circuit and resin on printed wiring boards.
Conventionally, unevenness was formed on surface by roughening (etching) the copper so thatthe adhesion to resin was improved by “mechanical bonding” (anchor effect).

As the performance of semiconductors is improved, it is becoming more difficult toroughen the copper on package boards implementing high performancesemiconductors, with the copper circuit width decreasing to ultrafine level.
Copper circuits with smooth surface are required for high-frequency server boards for whichfurther acceleration is being demanded to achieve practical application of the 5th generation mobile
communication system (5G), since transmission loss is caused by the unevenness of the copper
surface in the high-frequency range.

GliCAP® has both properties to “strongly bind to resin” and “strongly bind to copper,”and can improve the adhesion “chemically” without roughening the copper surface.

We are including applications other than those in printed circuit boards for GliCAP ® in the
future.
Resin

Conventional
method(roughening)
従来方法（粗化）

GliCAP®
(smooth)

Resin

Resin

CopperCopperStrong bonding with resin

Strong bonding with copper
Copper47

Ⅴ－１２. Focused Products (Advanced & Specialty Chemicals)◼

Advanced materialsAdvanced materials at our company refer to the products (compounds) that can improvevarious functions by blending them as materials for electronic parts such as semiconductorsthat are used in electronic devices, etc.
Demands for improvement in the properties of resin materials to be used (heat resistance, electricalproperties, etc.) are increasing as electronic devices evolve, and there are increasing
opportunities to consider the functional materials of our company.

The range of examination for the functional materials of our company is quite wide, andexaminations are being made even with carbon fiber reinforced plastics (CFRPs) that areused as structural materials for automobiles and aircrafts with a purpose to improve heat
resistance and strength.
Using the organic synthesis technology cultivated with imidazole and isocyanuric
acid, our company is committed to research and development of new functional material
products.
Construction of a plant equipped for high quality such as
low metal control has been decided in order to produce
state-of-the-art semiconductor process materials.
Its construction began in February 2020, and is scheduled
to be completed in July 2021.

48

Ⅴ－１３. Focused Products (Advanced & Specialty Chemicals)◼

A new isocyanuric acid derivativesW e developed this material by utilizing isocyanuric acid synthesis technology we haveaccumulated.
It has excellent heat resistance, light resistance, and transparency, and is used as a modifier for
sealing agent, etc.

◼




◼

New adhesion improver
A resin modifier that improves adhesion to inorganic materials such as metals through addition to
the resin. Since it delivers adhesion equivalent to the conventional modifiers while having no sulfur
content, it can improve the metal corrosivity, which was a problem with the conventional
product.
We are developing its application in a wide range of resin materials including epoxy systemcommonly used in electronic parts, acrylic system, urethane system and polyimide system.

BenzoxazineA resin with excellent heat resistance, flame
resistance and electrical properties.
Examination is being made as a semiconductors
sealing agent and carbon fiber reinforced plastics(CFRPs) .

■ Benzoxazine49Ⅴ－１４. Focused Products (Advanced & Specialty Chemicals)◼

Glycoluril derivatives

A multi-functional resin modifier with transparency and high heat resistance.
It has 4 functional groups and is expected to form hardened materials with a high crosslinking
density.
■ Glycoluril derivatives

Thiol group

Glycoluril derivativesProducts having a thiol groups (-SH) as a functional group will rapidly cure with epoxy resin at a lowtemperature. Compared to the conventional modifiers, cured resin has excellent heat resistance, moistureresistance, acid resistance, alkali resistance, and hardness, and it can significantly improve theresistance to heat and moisture, which had been a problem.
It has been adopted in the field of electronic materials that continue to advance inperformance and miniaturization.

50

Housing Materials
operations

Housing Materials operations④Interior, Exterior

Finishes and Paving
Materials

Ⅴ－１５. Interior, Exterior Finishes and Paving Materials[Major products]□

Interior materials (silicate walls, natural
material walls)
Plastered wall materials withmoisture control function and harmful
chemical substance and daily odor
adsorption/decomposition function

Exterior materials
Wet exterior material for housing□ Paving materials
Natural stone paving materials, recycled
glass paving materials
Rubber chip paving materials(Millions of yen)

2020/3
連結売上高51,564百万円□

Interior, Exterior Finishes
and Paving Materials
710(3.0%)53

Ⅴ－１６. Interior, Exterior Finishes and Paving Materials
Interior materials
 The business started with “JULUX,” the first industrial product for plastered wall material
in Japan, which was developed for in-house chemical glue CMC application.


W hile Juraku wall, which is a traditional Japanese wall, was constructed asplasterers compounded the materials and build the wall at each site, the wall materialof our company can deliver uniform quality by simply adding the specified amount ofwater to the pregranulated/compounded material.
In recent years, vinyl cloths, etc. which are quick to install, have become the mainstream interiormaterial in housing. However, plastered walls are attracting attention again because they arefriendly to human health and have high capability of absorbing chemical substances such asformaldehyde, which causes sick house syndrome, as well as odor.

■ Interior materials■ Interior materials54Ⅴ－１７. Interior, Exterior Finishes and Paving MaterialsExterior and paving materials

W e also expand our business to “exterior” to cover the outside of buildings andexterior parts, and “paving” to cover the surfaces of roads and approaches.
Our exterior materials come in wide variations including colors and can create subtle expressions
as they are finished manually to the texture of the surface. As paving materials, we offer
materials such as natural stone, natural sand, and rubber chips.
For exterior materials and paving materials, we create synergistic effects by making use of
our sales channels for exterior products.

■ Paving materials■ Paving materials

55

Housing Materials operations⑤Exterior Products

Ⅴ－１８. Exterior Products(Millions of yen)

[Major products]
Home Exterior Products□
Gates, fences, car ports, and decks
First product□Accordion gatesin industry(expansion type gates)
which was□ Art Walldeveloped by(aluminum system fence)
our company

2020/3
連結売上高51,564百万円
Exterior
Products

FY20218,001(34.2％) Consolidated
cumulative 2Q
Net sales
23,408

Decorative Exterior Products□
Large gates, fences, pathway shelters,
bicycle parking spaces□
Garbage accumulation storage (first productin industry which was developed by ourcompany)□ Green roof, etc.

57

Ⅴ－１９. Home Exterior Products









In 1971, when the motorization was rapidly progressing, we devised an “accordion
gate,” which can be easily opened and closed with an expansion mechanism, and which
can respond to the residential situation with limited space in Japan, and it became thestandard for gates in front of the car shed.
Since then, we have continued to add to the product lineup for general gates, carsheds (car ports), fences, deck materials, terraces, etc.
W e also devote our efforts in design, in addition to our focus on functions, and won
the first “G mark” (current Good Design Award) in the exterior industry in 1984.
‘Fun roof,’ our terrace roof with a sample design which harmonizes to the houseusing flat, wood-like ceiling materials received the 2019 Good Design Award.

■ Terrace■ Car port

■ Accordion gate58Ⅴ－２０. Decorative Exterior Products■ Pathway shelter■ Bicycle parking space■ High strength car stops■ Garbage accumulation storage）59

Ⅴ－２１. Efforts in Housing Materials Business

We are adding to the lineup of high-strength exterior products that are resistant to wind andsnow and promoting sales expansion, based on the fact that large-scale disasters such as
typhoons have been recently happening one after another over the country.
We are developing the strength standards and qualities cultivated through landscapeproducts to housing exteriors, and working on development of high-strength products.
As parts of the lineup of high-strength products, we have commercialized fences for detachedhouses, and independent terraces in addition to the large fences, archways, bicycle parking
spaces, and car ports.

■ Fences■ Car port

■ Shelter■ Fences■ Terrace60

Contact Information
Corporate planning department,
Shikoku Chemicals Corporation

TEL：+81-(0)877-21-4119
FAX：+81-(0)877-22-4119
www.shikoku.co.jp[Note regarding this document]
Forward-looking statements or projections mentioned in this document, including earnings are based on
currently available information and actual results may differ from the projection due to various factors.
Further, the purpose of this material is to provide information to the investors, and not to serve as arecommendation to buy or to sell. Please note that Shikoku Chemical Corporation will not be responsible forthe consequences of investments etc.