SANGOGroup Report 2018

Company Creed
Three intertwined elements of prosperity
Prosperity for our country,

for our company and for ourselves

Basic Principles
Through actions of integrity andfairness, and through the fostering ofstrong teamwork and mutual trust, weshall develop our human resources,
our manufacturing capabilities andenvironmentally friendly policies. By
creating harmony among these elements,
we will contribute to the development of
all countries and regions, as we strive toachieve prosperity for a society rich inthe pleasures of life.

Through further innovation of
our production technology,
applied to an integrated
production process from raw
material to finished product,
and through the developmentof creative new products,
we are developing ourmanufacturing skills to be thebest in the world.

Through education and training programs
that pass on our traditions and foster aspirit of challenge, we are developing
human resources capable of working
anywhere in the world.

Development of
Human Resources

Honoring tradition
without fear of change

Harmony
Development of
Manufacturing
Capabilities

Development ofan earth-friendly
environment

Working together with thelocal community, we arebuilding an earth-friendly
environment, from the levelof individuals up to theentire world.

Editorial Policy
To mark the 90th anniversary of our foundation, we decided to
publish an integrated report, “SANGO Group Report,” startingfrom this fiscal year. The report encompasses both financial andnon-financial information about us, in addition to presenting ourapproaches toward the environment, society, and corporate
governance.
Our basic policy in compiling this report focused on our
approach toward technologies for the future. This approach01

includes our new Mid-Term Management Plan 2022, which wehave formulated with the aim of getting us through the major,
once-in-a-century changes being seen in the structure of theindustry.
We hope this report conveys to our many stakeholders ourcurrent situation, our approach to challenges, and our futuregoals.

Hierarchy of Our Policies and Principles

Company
Creed

SANGO WAY
Action Principles

Our philosophy, unchanged
since our foundation

Basic Principles
CSR PolicyLong-Term Vision 2050
Mid-Term Management Plan 2022
Annual Hoshin (Company Plan)

Way of thinking shared among
all our employees
Our stakeholder-oriented policy
for sustainable development

Where we want to bein the future

Our strategies forachieving our goals

The company policies
we applied in the year

CONTENTS
01 Company Creed, Basic Principles,and Editorial Policy

02 CSR Policy
03 Message from the President
07 Special Feature 1. Our Journey
09 Special Feature 2.

11 CSR Activity Report: Environment

17 CSR Activity Report: Governance

12 CSR Activity Report: With Our Local Communities

18 CSR Activity Report: Compliance

13 CSR Activity Report: With Our Customers

19 Financial/Non-Financial Highlights

14

21 Company Profile

CSR Activity Report: With Our Suppliers

15 CSR Activity Report: With Our Employees

22 Product Overview

Environmental Contribution throughFuel-Efficient Products
SANGO Group Report 201802

Message from the President

We will further hone our development of humanresources, manufacturing capabilities, and anearth-friendly environment, and work towardsustainable growth.

President Kozo Tsunekawa

03Formulation of the Mid-Term
Management Plan 2022,
for Our Long Term Visions
The Sango Group has formulated a Mid-term Management

The Sango Group’s core business is manufacturing

Plan for 2022. Today, the automotive industry is

automotive exhaust system components. With theexperiencing a major once-in-a-century transformation.

world moving toward phasing out combustion engines

Waves of change are rocking the industry’s conventions andaltogether, there is ample reason to predict that demandframeworks to the core. At the forefront of this revolution

for our products is going to decrease significantly. Against

are the concepts of C.A.S.E.—“Connected,” “Autonomous,”

this background, we chose “Building the foundation for“Shared,” and “Electric.” There can be no mistake thattransforming the business structure to achieve sustainable

automotive manufacturers—our customers—are steering a

growth” as the main theme for our newly formulated mid-course to ride those waves, and we must also follow.

term management plan. Under this overarching theme,
we are going to establish the foundation for transforming
our business structure, so we can survive the severe
competition the changing business environment will bring.
It is both a policy and target to steer the Sango Group tosustainable growth going into the future. Now more thanever is the time for all of the Group’s employees to share asense of crisis, find opportunities in the changes of the age,and boldly take on the challenges they represent. We must
all strive together to develop human resources who arecapable of these things, and to create a corporate climatethat encourages them to achieve them.

Mid-Term Management Plan 2022
Aim

Business

Building the foundation for transforming the business structure
to achieve sustainable growthA

B

Improving the profitability of theexisting areas of business andexpanding business for the future

Functions that
support businessC

Constructing a lean
and robust businessstructure

Sowing the seeds for launching newareas of business and developing
structures for themD

Developing humanresources who canthink like a manager

E

Developing manufacturing
capabilities that will keep
us sustainably competitive

SANGO Group Report 201804

CSR Policy and Environmental
Challenge 2050
We now have a new CSR Policy and Environmental

Environmental problems and global warming, in particular,

Challenge 2050. Our goal with this CSR Policy is to “Become

are grave global issues, and they need to be addressed

a company that contributes to society, is trusted, and grows

more effectively. As a manufacturer, we think it is possible

sustainably.” Although this is nothing new and extraordinary,to make more significant environmental contributions notrecently, we have seen a number of companies lose

only through efforts in production processes, but also by

the trust they have built over many years in an instant,innovation through our company’s products. We are proud

because they failed to observe this basic rule. We in theto have increased our corporate value and kept growing as

Sango Group will also go back to basics, get ourselves

we have thus far by meeting the needs of society throughin order as a company, and promote social contribution

our development capabilities and technological strengths.

through business. In so doing, our goal will be continued,

We will keep on creating value by making use of our uniquesustainable growth.

strengths and finding solutions to social problems.

ESG (Environment, Society, and Governance) has become akeyword we frequently hear in connection with increasing
the sustainability of companies. Our CSR Policy also

CompanyCreedrevolves around the three pillars of environmental, social,

Basic Principles

and governance criteria, and advocates six approaches
that form the foundation of these pillars.

CSR PolicyLong-Term Vision 2050
Mid-Term Management Plan 2022

CSR Policy

Three pillars
supporting
the policy

Fundamental
approaches

Annual Hoshin (Company Plan)

Become a company that
contributes to society,is trusted, and grows
sustainably

Environment

Environmental
Challenge

Human-friendly
workplaceSociety

Higher customer
satisfaction

Participation in
local communities

GovernanceCorporate
governance●A range of work-styles to accommodate
people’ s diversity and lifestyles●Developing a safe work environment where
everyone can work with peace of mind

Employees
Become a company that
contributes to society, istrusted, and grows
sustainably●Delivering joy that goes beyond thecustomers’ expectations through safe,
high-quality products.

Customers

05●Working to develop products that arefriendly to people and the environment

Suppliers

Local
community

Compliance●Striving to develop each otherthrough strong partnerships built on
trust and fairness●Actively participating in social contribution
activities as a good corporate citizen andcommunicating with the local community
through dialog●Promoting manufacturing that isfriendly to the local environment

Environmental Challenge 2050
Expansion and creation ofmarkets for products that
contribute to the environment
Creating a good environment
through our products

Contributing to the sustainabilityof society and customers
Reduction of the environmental
burden of business activities

Preservation of the naturalenvironment

Creating a good production
site environment

Tree planting

See p.11 for details

Tree planting ceremony at Yawatayama Plant (2009), with Dr. Akira Miyawaki (left).

Sango’s Tree-Planting Efforts
Our Environmental Challenge 2050 has three pillars:

Since launching the project, we have planted trees in theCreating a good environment through our products, creating

vicinity of our plants and offices in and outside Japan, undera good production site environment, and tree planting. The

the guidance of Dr. Akira Miyawaki, professor emeritus

Sango Group has been planting trees since 2006, throughof Yokohama National University. Some 240,000 have

the Sango Tree Planting project.

been planted to date. It is not only our employees who

This project was launched when controlled substances

participate in our tree planting activities: their families

were found in the soil at our old Nagoya Plant—the

join in too, and sometimes even residents from the local

place our company started—and we had to clean up thecommunities take part. We all get to know each othercontaminated soil. Instead of rebuilding a manufacturing

better while working together.

plant on the site, we decided to build a facility for
researching future technologies, a conference hall, and a
Muffler Museum to pass on our manufacturing traditions.
As well as these, we also created forests, rice fields, andbiotopes, all of which incorporated our awareness ofenvironmental preservation.

To Our Stakeholders
In order to survive through this time of great changes, we

In the immediate term, we will launch and develop

need to be flexible as well as innovative, so that we can

new enterprises on the basis of our existing areas ofmake full use of the knowledge and expertise that webusiness, and earnestly address IoT, AI, and the other new

have built up thus far. We expect demand for mufflers totechnologies that the march of progress is going to bring,

continue to grow in emerging countries, and our exhaustso that we can make the best possible use of them.

systems not only filter the exhaust gases to meet the

For the current Sango Group, having human assets who canrequirements of vehicle emission control, but also reduce

flexibly adapt to the changes of the times and think like anoise . We believe this capability in noise attenuation

manager is more crucial than anything else to achieving ourtechnology can, for example, be a new opening for us togoals. However, developing human assets takes time. This isoffer new value through our products.

another reason why we have published this “SANGO Group
Report” so that our stakeholders as well as our employees
can get a better understanding of the Sango Group.
We hope this report will become a tool for promoting
meaningful dialog with all of you.

SANGO Group Report 201806

Special Feature 1

Our Journey
The Sango Group’s journey began when it was founded, 90 years ago. It has been supporting the developmentof the automotive industry through the manufacture of exhaust system parts ever since. We will continue
to explore new fields, technologies, and possibilities for the coming age, addressing the challenges ofglobalization and contribution to the environment through our products to meet the needs of the times.

Total sales of the Sango Group [Unit: Billion yen]

1990
Began production of door
beams as a result of safety
standard revision

2,500

Door impact beam

Began production of
fabricated exhaust
manifolds.

Pipe exhaust manifold

2,000

1987
Began production of heat- andcorrosion-resistant stainless steel
mufflers

1973
Equipped exhaust systems withcatalytic converters to meetemissions regulations

1,500

1954

Exhaust systems
compliantwith emissions
regulations

Began manufacturingexhaust system products

1,000

Stainless steel
muffler

1977
Established a tube mill(production line integration)

500
Muffler outer shellroll-forming process01950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983

Startup Period 1950

1959

Start of exhaust system parts manufacturing
Sango Co., Ltd. was incorporated in 1950. Our company
creed—Sango’s source of inspiration—was set down in
writing the following year. With the reconstruction ofJapan after the war, the country’s automotive industry
saw the arrival of the early days of economy cars.
Our company started manufacturing exhaust systemparts in 1954, and since then, we have striven to
improve our expertise and offer an ever wider rangeof products, centered around the two core pillars of
our manufacturing business, parts manufacturing andprecision steel parts manufacturing—crafts we have been
pursuing ever since the time of Sango’s predecessor,
Tsunekawa Ironworks.

1953

Introduced wiper benders
Pipes used to be bent manually.
After much trial and error,
we mechanized the process
and made it possible to massproduce bent pipes.

07

Seminal Period 1960

1975

Growth Period 1976

Becoming one of Toyota’s approved
drawing manufacturers

Introduction of the Toyota
production system

In the high-growth period, when everyone wanted to own acar, our company changed course to become a manufacturer
that specialized in exhaust systems. We worked hard andovercame many challenges to meet the advanced requirementsof our customers, for example setting up a laboratory equippedwith the latest technology for measuring exhaust sound. In thecourse of doing so, we refined and bettered our expertise andskills in exhaust system manufacturing, and successfully became
an approved drawing manufacturer for Toyota Motor. Sincearound this time, we have been making our products compliant
with emissions regulations. We undertake a variety of R&D
projects to meet the needs of the times.
In addition, we invested effort in expanding existing plants andbuilding new ones.

In 1976, we introduced the
Toyota production system,in order to thoroughly
streamline our production
and improve productivity.
The system helped us
improve our production
processes and establish
better quality, and theculture of thoroughly
eliminating waste took rootin our company. In 1985,
we received an Award for1961

Established a Muffler and Exhaust
System Technical Center
Our basic research into mufflers
started in earnest. As part ofthis, we also undertook joint
research with Nagoya Institute ofTechnology.

2011
Began production of drive shafts using cold forging* Won Toyota Technical Development Award

2010
Began productionof urea SCR
exhaustaftertreatment
systems for trucks

2002
Began production of hollow,
lightweight steering shafts

4,000

Drive shaft

Urea SCR system

Steering shaft

2001
3,500

Began production of high impactabsorbing propeller shaft tubes

Propeller shaft tube with collapsible structure

3,000

1999
Began production of environmentfriendly exhaust heat recovery devices

Heat collector

Began production of eccentric/
oblique spun products

Spun sub-muffler

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20171986

Excellence in the Toyota
Quality Control Award
program.
It was a time of high andstable growth in Japan, anddemand for automobiles
became more and moremature and diversified.
Keeping in step with thistrend, we worked steadily
toward better quality andreliability.

1977

Added Tubing Department
to Fukuda Plant
We achieved integrated
production from raw
material to product.

Advancement Period 1987

2007

Endeavor Period 2008

2017

Aiming to become the global standard

Venturing into the new age

During this period, a strong yen caused trade friction,and reduced the competitiveness of Japanese auto
manufacturers in exports. This drove them to seek ways tosurvive by moving their production sites overseas. In line withthis move, we started up a joint venture with Arvin Inc. in
the U.S. in 1987, and from there, went on to establish otherfacilities around the world, including technical partnerships.
In addition, amid calls to hold companies to account for
global resource depletion and environmental pollution, werolled out initiatives to reduce the environmental burdenin accordance with environmental management standards,
acquiring ISO 140000 certification in 2000. Besides this,our techniques and technologies have been patented, so
we are creating an outstanding track record of technicalachievements for posterity.

The business environment surrounding the automotive
industry is undergoing major changes on a global level, andauto-related companies are seeking new possibilities inevery kind of area in pursuit of sustainable development. In
the midst of this, our company is launching into new areasof business that make use of technology we have right now.
Meanwhile, we continue to work on our independent
approach to achieve harmony with the naturalenvironment—for example, the Sango Tree Planting
project. We will uphold our sense of mission aboutsocial contribution and sincere attitude toward the art ofmanufacturing unchanged from the time of our foundation,and continue to adapt to changes while honoring tradition,
so that we can be a company that society needs.

1988

Opening ceremony at Arvin
Sango, Inc.
ASI was our first overseas
affiliate. After that, we expanded
to Asia, China, and Europe.

2015

No.2 Technical Center at
Toyota Plant completed
Toyota Plant became ourtechnology development base.

SANGO Group Report 201808

Special Feature 2

Environmental Contribution throughFuel-Efficient Products
The Sango Group has abundant experience in developing and manufacturing exhaust systems. Building
on our expertise and knowledge, we have leveraged our technological strengths and development

capabilities to develop heat collectors that recover exhaust heat and help increase energy efficiency.
By providing products such as these, we will contribute to reducing the environmental burden.

Heat collector

92%

Generation 2

100%
ght

wei
Size/

y
ciencncy)
ﬃ
e
l
e
eﬃci
Fue
uel

ual f

(Act

09

2010

Generation 1

2008

5%

8%

Waste Exhaust Heat Recycling Technology(Introduction of Exhaust Heat Recovery Device)Engine performance 30％(heat eﬃciency 30%)

Fuel 100％Engine heat emission 10％

EngineEngineCooling loss 30％

Heater core

Exhaust loss 30％

Engine cooling water

Heat collector
Heat
recoveryA heat collector recovers waste exhaust heat and uses it to heatthe engine cooling water quickly and reduce warm-up time. This
contributes to improved energy eﬃciency.

Catalytic
converter

Exhaust gas

41%

82%

Generation 4

Generation 3

2018

2015

9.4%
Technical Roadmap

Heat management

10%
OVER

Increased heatrecovery eﬃciency
and reduced cost,leading to adoption
in a wider range ofmodelsElectric vehicles are going to become the mainstream in the future.
We will enhance our product line-ups to meet their functions and needs.
Electric vehicle

Engine-powered car

HV/PHEV（Including range extender）

EV

FCEV

●

●

●

●

New cleansing system●

Composite materials

●

●

●

Motor/battery parts

●

●

●

Light body parts

●

●

●

●

Secondary steel processingraw materials

●

●

●

●

Exhaust system●●

Testing and analysis technologies

●

●

●

●

SANGO Group Report 201810

Environment

CSR Activity Report

Long-Term Environmental Vision: Sango
Environmental Challenge 2050
The Sango Group will work on the creation of three forms of value. To accomplish this, we will add anenvironmental perspective to our conventional business operations. By doing so, we aim to achieveboth economic growth and preservation of the global environment, and to help make a sustainable
society a reality, all with a view toward the global environment of 2050.

CO2

Expansion and creation of markets
for products that contribute to theenvironment
Environmentally-friendly products

CO2

Reduction of theenvironmental burdenof business activities

Contributing to
the sustainability ofsociety and customers

Environmentally responsible
production sites

Challenge

55- Planting trees- Eliminating invasive species

4

350k

Challenge

4

CH

CT

Waste

PurposeOverburden

A

11

Sango
Environmental
Challenge
2050

3

1

Development of highvalue-added products that
contribute to our customers.
→ Improving fuel eﬃciency tocontribute to CO2 reduction.
- Using exhaust heat
- Weight reduction

Minimization of
new vehicle CO2
emissions

Unevenness

ISO14001
Consolidated control
by the Sango Group(From July 2019)

Challenge

Exhaust heatrecoverydevice2

Challenge2

Development of
products/technologies thatare environment-friendly at allstages, from material
procurement tomanufacturing, use, disposal,
and recycling.

Minimization oflife cycle CO2
emissions

Minimization of
production activity
emissions (CO2・waste)

D

K
EC

AN

Establishmentof anenvironmental
management
systemO

PL

Creation of an environmental
management system, control ofenvironmental risk and theprevention of problems along with
continuous improvement (enhanced
operations and management)

Tree planting

1

Creation of a future
where man andnature co-exist
in harmony

Number oftrees planted

at present

Preservation of thenatural environment

Five Challenges

Preservation of biodiversity andpromotion of activities to protect thenatural environment, to make asociety in which people live inharmony with nature a reality.

240k

CO2

Reduction of emissions(CO2, waste, chemical
substances, water, etc.)
in all business activities

Challenge

3

Reduction of emissions fromproduction activity throughinnovations in manufacturingmethods

Total CO2 emissions
Down byt-CO2

128,56840%

Total waste emissions
Down byt

6,155

79,487

2016

2030

35%

3,624

2016

2030

CSR Activity Report

With Our Local Communities

A “Forest Seawall” That Protects Life
In order to help with the reconstruction of the Tohoku region in theaftermath of the Great East Japan Earthquake, our manufacturing plants
gather acorns in their local areas, grow them into seedlings, and send
them to the disaster-stricken areas.
The seedlings we grow are planted on Millennium Hope Hills in Iwanuma
City, Miyagi Prefecture. When they are fully grown, the trees will serve
as a “forest seawall.” If a tsunami happens, the green wall will reduce
its impact, and stop people and property from being carried out to sea
when the tide recedes.
The project started in 2013, and we have sent seedlings every year sincethen. Including the approximately three thousand saplings contributed in
FY 2017, we have shipped over 17 thousand seedlings in total.
Employees at Yawatayama Plant after finishing some shipping work
(The signboard is at Toyota Plant)
In the circle: Some of our employees at the tree planting ceremonyat Millennium Hope Hills

Global Tree Planting
The Sango Tree Planting project started with the ECO35 tree planting
program in 2006, under the guidance of Dr. Akira Miyawaki, professor
emeritus of Yokohama National University.
In addition to Sango’s plants, its affiliates in Japan and overseas havealso been actively planting trees, and over the last 12 years, we haveplanted about 240 thousand in total.
Our tree planting efforts are spreading beyond our own
facilities. For example, we are planting mangroves in river
estuaries in Thailand, and supporting local communities’
tree planting events. We will continue promoting theAbove: A tree planting event at
Sango Hokkaido
Right: A tree planting opening
ceremony at STA, Thailand

initiative, with the aim of planting 350 thousand trees in
the Sango Group as a whole.

Connecting with Local Communities(Rice Planting/Harvesting and Environmental Education
for Elementary School Pupils)
Every year, we invite pupils from elementary schools in Nagoya City
to the rice fields in ECO35, and give them hands-on experience of rice
planting and harvesting as part of their environmental education.
After taking part, some of the pupils say they think growing rice must
be a hard way to make a living. It is a good opportunity for them toexperience the hard work involved in making things.
We also give them an opportunity to come into contact with a varietyof living things in the adjoining wooded area and biotopes, so they canlearn about natural ecosystems.

Local elementary school pupils planting rice

SANGO Group Report 2018

12

CSR Activity Report

With Our Customers

Quality Learning Center
In November 2017, we established a Quality Learning Center in the
Toyota Plant TPS Promotion Center. The purpose of the new center ispass on lessons learned from critical quality problems that occurred in
the past to all employees, so that these lessons will not be forgotten.
The exhibition booths have been created on the basis of three key
words:❶ “Legacy”: Tell future generations about example cases that occurredin the past.
❷ “The next process is the customer”: Never forget critical quality
problems, so they will not cause problems for our customers again.
❸ “Perceived quality”: Identify good and bad quality by seeing, touching,
and feeling the products.

Above: Skills trainees looking
at the exhibits
Right: Hands-on exhibits,
such as quizzes

With video screenings, quality awareness improvement quizzes, and more, the Center offers opportunities to re-acknowledge
the importance of high-quality manufacturing through hands-on learning.
The TPS Promotion Center, where the Quality Learning Center is located, is also a training facility for education in various skills.
It is used by large numbers of employees as a place to develop quality assurance-related human resources.

Quality Case-Study Exhibition
In order to create robust manufacturing sites, we hold quality
case-study exhibitions as a special event during the annual Quality
Month in November. The exhibitions involve panel displays of over
50 cases of quality improvement, including ones by our suppliers.
Over 900 members participated in the event in FY 2017,with people joining in from design, production engineering,
and administrative departments as well as the manufacturing
department. The number of participants is growing every year.
Event participants take ideas from the successful improvement
examples on display back to their workplaces, and introduce
Above: Staff from various
departments looking at the exhibits
Right: Introducing improvements byshowing a video

them there. The exhibition is an important part of our approach toquality improvement through participation by all.

Awards from Customers(CE Special Award)

Our exhaust sound control system and mass production method
for 1180 MPa difficult-to-form components were adopted for the

CE Special
Award Letter ofAppreciation

Lexus LC500/LC500h. Toyota Motor Corporation recognized thesecontributions to the development of new vehicles by giving us two CE
Special Awards for the achievements.
The awards were given in recognition of the development of an exhaustsound that achieved both quietness and an impression of power throughthe development and use of valves, and of the development of a method
for stably mass producing difficult-to-form components made of hightensile steel. We will continue to work on developing products thatmake our customers happy.

13

Lexus LC500h

CSR Activity Report

With Our Suppliers

Promotion of Green Purchasing
In cooperation with our suppliers, we have been striving tobetter preserve the environment through purchasing of partsand materials that are more environment-friendly.
In 2018, we published the “Sango Group Green Purchasing
Guidelines” in order to promote joint approaches with our
suppliers toward greater harmony with the environment.

What we ask of our suppliers
1. Build an environmental management system
2. Reduce greenhouse gases (GHGs)

Briefing session for our suppliers

3. Reduce water environmental impacts
4. Promote resource recycling

Greenhousegases (GHGs)

5. Control chemical substances

CO2

CH2

N2O HFC

PFC

SF6

6. Build a society in harmony with nature(“5. Control chemical substances” is mandatory, and is the most important item.)Transportation

Our company Manufacturing

Transportation

Use of fossil fueland electricity

Assembly

Use(Suppliers)

Implementing approaches to preservation
throughout the supply chain

Sharing Information and Building Partnership
through Supplier Meetings
We hold a supplier meeting every month at which we deepen partnerships with our suppliers by sharing information on
topics such as quality, safety, and production trends. We also organize study tours and seminars on a regular basis so we canlearn with our suppliers. The things we learn together are introduced into suppliers’ companies as well, and they use theseopportunities to gain knowledge to help solve their respective problems.

Hamaoka Nuclear Power Station study tour
(Measures against earthquakes and tsunamis)

A seminar by one of our engineers, under the title“Tips from a Development Engineer”

SANGO Group Report 201814

CSR Activity Report

With Our Employees

Promoting Diversity

Approaches for Persons with Disabilities and
Re-Employed Retirees
Our group has a number of employees with disabilities. First, they comeand work with us for a trial period to see if the job details suit them.
Once they officially join our company, on-site counselors are always
available to listen to their concerns, so they can feel at ease working in aplace where they can make full use of their own abilities.
The retirement age in our company is 60. 90% of our retired employees
use the re-employment system after retiring to continue working with
us and using the techniques and skills they have acquired over many
years. Besides returning to the same workplace they worked at
before retirement, we also have a scheme to introduce them to other

Everyone works together in our inclusive workplaces.

workplaces where they can work without too much exertion. We are working to create workplaces where our employees
can feel an even greater sense of reward.
We have programs for childcare support such as a childcare leave program and shorter working hours for parents, and along-term nursing care leave program for employees who provide long-term care for family members. These programs areequally available to both men and women, and through them, we are creating a system through which our employees canwork at Sango for as long as they want to, in a way that suits their home circumstances.

Women’s QC Circle
Many female employees are also playing an active role in our company.
In order to be able to work at ease and feel comfortable in theworkplace, some of our female employees formed a Women’s QC Circle
to share opinions. The circle members also conducted a questionnaire
survey of our employees about the work environment. After narrowing
down the points that needed to be improved, they gave a presentationon them to the president and board members. Their efforts led tosuccessful improvements of the work environment.

A Women’s QC Circle meeting

The women’s restroom at the Head Office was renovated,and became cleaner and easier to use.

Smile Lines (Expectant Mother-Friendly Production Lines)
Our Smile Lines are the fruit of a positive action project our female
employees conducted with the aim of developing workplaces that areeasy to work in.
Before the project, our production sites’ female employees would
often leave their jobs or switch to office work after becoming

BeforeA task consisting of
covering productswith a metal meshpregnant. However, some still want to keep working in the same
workplace, performing work that is not too strenuous.
We thought that a workplace where an expectant mother could
work without too much exertion would also be easier for a male
employee to work in, and creating one would improve the entire work
environment. To this end and after much trial and error, we completed
our first Smile Line in 2013, with the aim of developing a production
line that would be accessible for a diverse range of staff.
Today, we are still working to create production lines that will befriendly to all.
15

After
The process was
improved so that it canbe performed while
seated so there is lessstrain on the body

Human Resource Development

Trainee Program
We have introduced an overseas trainee program toand encourage cross-cultural understanding. The

After the Trainee Program at TSC(Tianjin, China) For the first six months, I studied Chinese

program provides language training and practicalat a local university. Then, I spent the next

help employees improve their language skills quickly

six months working at a local affiliate. I

training overseas over the course of about a year. It

had a hard time communicating with local

is available to employees who have been with us for

suppliers in their own language, but I wasless than 10 years.

able to overcome the problems thanks to theNine young employees had been dispatched by FY

language education support. Now I’m back in

2017, and many of the people who have taken theJapan after completing the program, I’m able

training are playing active roles as bridges between
our bases in Japan and our overseas affiliates.

Purchasing Division 2,
Purchasing Department

to communicate with the local affiliates with

Yasuharu Kato

work.

ease, and have been given a wider range ofSangorin Olympiad
In Sango, we hold technical olympiads. Each of our manufacturing
plants and departments selects delegate technicians to use their skills
and techniques to compete for medals in 10 competitions. Examples of
the competition categories include welding and pipe bending.
Ninety-three employees from throughout the company took part inthe

7th Sangorin Olympiad, and 11 of them won gold medals. The

increasing number of participants from overseas affiliates in recent
years is a testament to the growing interest in the competition.

Scenes from the pipe bending (left),welding (right), and cutting (in thecircle) competitions

The Olympiad encourages technical improvement company-widethrough mutual improvement among employees, in order to achievestrong on-site capabilities and pass on skills to subsequent generations.

Pre-Management Juku
Pre-Management Juku started with the goal of developing prospective
leaders for subsequent generations who will be able to adapt tochanges. It is now in its fourth term. The program aims to develop
human resources who can think for themselves and take action on
their own initiative, through practical exercises in thinking outside
the box for existing forms of business and coming up with newtechnologies and ideas. These capabilities are essential to adapting to
the changing business environment for the automotive industry.

Active wheelchair“NODUR,” designed by
Pre-Management Juku
students

Health Promotion Efforts
Human resources who are healthy in mind and body are an important element
for a company to grow soundly. We hold company-wide fitness walking study
sessions in order to address people’s lack of exercise in everyday life.
In the walking study sessions, our employees learn walking exercises that they can
do in their daily life, then take part in a walk. Our goal with the program is to get
as many employees as possible into the habit of taking exercise, and to become
more conscious about health.
Employees at a walking study meeting
SANGO Group Report 201816

CSR Activity Report

GovernanceCorporate Governance System
Our company has the corporate governance system shown below. The system enables us to make transparent and fairdecisions in a quick and decisive manner, taking into consideration all our stakeholders, which include our employees,
shareholders, customers, suppliers, and local communities.

Shareholders Meeting
Appoint

Appoint

Management function
Board of Directors

CSR Committee(Highest decision-making dy)

Instruct

ReportManagement Meeting(Preliminary discussion)

Instruct

ReportExecution of business
Executive Oﬃcers
Instruct

Auditing function

AdviseFinancially
audit

Subordinate meetings/
committees

Financial
Auditors- Internal Control Committee- Group Environment Committee

Cooperate- Group Safety and Health Committee- Global Human Resources Meeting- Global Human Resource
Development Meeting- Social Contribution Meeting- Quality Meeting

Audit

Auditors(Including external
auditors)- Supplier Meeting

ReportHead oﬃces and functional
departments Aﬃliates
in Japan and overseas

ReportCooperate

Internal audits

Global Audit Oﬃce

The Board of Directors—the highest decision-making body in our group—monitors our directors and decides on criticalissues concerned with management and statutory matters. Meanwhile, our auditors—who include external auditors toensure fairness and independence—supervise management and audit how the directors are executing their duties.

Internal Control Committee
Our company has a basic policy on establishing an internal control system to ensure the properness of operations in its
organizations. In accordance with this policy, our Internal Control Committee promotes three approaches: 1) corporate
governance; 2) compliance; and 3) risk management.

Internal Control Committee❶ Corporate governance

Establishment of an internal
control system to help thecompany’s executives execute
their duties eﬃciently

17❷ Compliance

Establishment of a system to help
the company’s employees carryout their work fairly and justly incompliance with societal norms❸ Risk management

Establishment of a system to help
minimize the risks that arise inmanagement activities

CSR Activity ReportCompliance

Enlightenment through the Company Magazine:
Sango ★ Compliance Newsletters
We distribute our in-house magazine, Sunshine, toall of our employees, and every issue has a Sango ★
Compliance Newsletter.
The newsletters introduce examples of complianceissues that are relevant to and could easily occur in any
department, whether manufacturing, administrative,
or technical. For instance, there are articles aboutproblems with using SNS, and about problems related
to drinking. The examples are explained in an easyto-understand way using four-panel cartoons andillustrations.
The aim of the magazine is to enlighten our employees
so that each of them will be able to comply with laws
and societal norms and be a good role model in society.
An example of a Sango ★ Compliance Newsletter

Education on Important Laws and Regulations
Business operations involve compliance with a variety of laws
and regulations. We must not allow ourselves to violate them
just because we did not know about them.
In order to prevent law violations by employees lacking suchknowledge, we provide new executives with education on fivethemes: the Antimonopoly Act, bribery, the Subcontract Act,
the Worker Dispatch Act, and drug control. The educational
lectures explain the details of these laws and rules in an easyto-understand way, using specific examples that are relevant
to our company’s situation.

Training session on important laws and regulations
given by an in-house lecturer

Whistleblowing System:
Sango ☆ Helpline
We have a whistleblowing system, Sango ☆ Helpline, to help our employees report and get
advice on inappropriate conduct they have found in the company. The system protects andensures the safety of whistleblowers, and helps us discover violations of laws, regulations,and the company’s internal rules, ascertain the potential risks they involve, and take action
early on.
The helpline provides an internal point of contact and an external point of contact which isoperated by our general legal counsel, and both accept reports through telephone hotlinesand dedicated email addresses. It is an important system for resolving problems quickly.

An information poster
displayed in the company

SANGO Group Report 201818

Non-Financial/Financial Highlights

SocialNumber of employees

Proportion of female employees

7,066

6.5%

*1

*2

Average age

Average number of years at the company

40.0

17.1

*2

*2

Number of educational courses

Number of workers who have acquired a National
Trade Skill Test & Certification qualification

73

291

Rate of returning to work
after child care leave

Ratio of employees with disabilities

100%

2.3%

*2

*2

*1: The number of employees in Sango Co., Ltd. and consolidated subsidiaries as of the end of March 2018 (excluding temporary employees).
*2: Results for Sango Co., Ltd. and Sango Corporation Ltd. for FY 2017.

Financial
Changes in Sales(Consolidated)(Billion yen)

4,000

3,941

4,038

2013

2014

4,253

3,802

3,880

2016

2017

3,000
2,000
1,000
0

19

2015

(Term that ended in March)

GovernanceDirectors

Auditors

7

5*3

Number of Board of Directors
meetings held

12/year

Attendance rate at Board of Directors
meetings

95.7%

*3

Number of whistleblowing cases
reported

5/year*3*3

Number of employees who took
security training

735/year*3*4

Environment
Total number of trees planted

247,036

*4

*4

CO2

CO2

2,304t*5

China

Secondary steel
processing

10%

Total amount of CO2 absorption/fixation
as a result of planting trees

12%
Sales
composition
by businessﬁeld *4

Asia andAustralia

Automotive
parts

90%

11%

Sales
composition
by region *4

Europeand the U.S.

Japan

54%

23%

*3: Results for Sango Co., Ltd. for FY 2017.
*4: Results for Sango Co., Ltd. and consolidated subsidiaries for FY 2017.
*5: The figure given is equivalent to the amount of CO2 adsorbed by trees we planted, obtained using our own calculation method.
SANGO Group Report 201820

Company Overview

Company Name

Sango Co., Ltd.

Representative

President Kozo Tsunekawa

Head Office/Fukuta Plant

1-1 Miyashita, Fukuta-cho, Miyoshi-shi, Aichi-ken

Founded

1-Jun-28

Incorporated

1-Jun-50

Capitalization

608 million yen

Main Products

Mufflers, exhaust systems, exhaust manifolds,
vehicle body products, impact door beams,
other automotive parts, cold forged products,
cold finished steel bars, drawn pipes, carbon
steel pipes for mechanical structures, machined/
ground steel bar products

Customers

Toyota Motor Corporation, Hino Motors, Ltd.,
Daihatsu Motor Co., Ltd., Nissan Moter Co., Ltd.,
Mitsubishi Motors Corporation, Isuzu Motors, Ltd.,
Subaru Corporation, Mazda Motor Corporation,
Toyota Industries Corporation, JTEKT Corporation,
KYB Co., Ltd., Toyota Tsusho Corporation,
Sumitomo Corporation, Asai Sangyo Co., Ltd.,
Metal One Corporation, Canox Corporation(random order)

Main BanksMUFG Bank, Ltd., Sumitomo Mitsui Banking
Corporation

Global Network

Head Office/Fukuta Plant

ECO35

Miyoshi Plant

Nisshin City

Head Oﬃce/Fukuta Plant

No.3 Miyoshi
Plant

Togo Town

Yawatayama
Plant

MiyoshiCity

Toyota City

KariyaCity

Sango Hokkaido
Co., Ltd.

ASCI

STI

TSC
XSC
SIAP

GSC

YSP

ASI
Sango Kanto
Co., Ltd.

SanpukuCo., Ltd.

STA

SID

21

Toyota Plant

Toyohashi Plant
Sango Mie
Co., Ltd.

ECO35

Product Overview

Exhaust Systems
Exhaus t Sys tem s

E x h a u s t e mi s s i o n c o n t ro l d e v i c e sSingle wall tubular manifolds

Air gap manifolds

Pipe components for engines

Heat r ecov er y d e v i c e s

EGR pipes

Exhaust gas heat collectors

Spun catalytic converters

SCR aftertreatment systems

M u f f l e rs

Spun sub-mufflers

Dual mode mufflers (internal valve)

Muffler s

Laser welded mufflers

Titanium mufflers

Vehicle Body ProductsSports mufflers

Secondary Steel Products

A-pillars

Roof side rails

Cold finished bars

Carbon steel pipes for mechanicalstructure purposes

Floor cross members

Radiator supports

Cold finished bars (drawn)

Steel wires (drawn) for cold headingand extruding

Cross members

Door impact beams

Steering shafts

Cold forged products

SANGO Group Report 201822

Contact
Corporate Strategy Oﬃce Governance G, Sango Co., Ltd.
1-1 Miyashita, Fukuta-cho, Miyoshi-shi, Aichi-ken, 470-0294
TEL: 0561-34-0035 FAX：0561-34-1240
URL: http://www.sango.jp/