EnvironmentalReport2019

Top Message

As a step toward OSG’s corporate principle of “Global Presence”, we will actively engage in environmental
activities raising each employee’s environmental awareness and make efforts to realize a sustainable andprosperous future in changing times.

OSG Corporation
President and CEO1
Norio Ishikawa
President and COO

In fiscal year 2018, OSG celebrated the 80th anniversary of its founding
and achieved a record high performance.
Fiscal year 2019 is the final year of our three-year management
plan “The Next Stage 17.” We expect the growing demand for cutting
tools even though we should pay attention to the global economic
trends such as U.S.-China trade friction and an economic slowdown insome emerging countries. Today, we are facing a major paradigm shift
in technology on automotive, medical, and clean energy, etc. In thissituation, in order to respond to diverse customer needs and issues, wehave launched a new project called “OSG 4.0”. This project aims to
improve productivity by creating smart production line which enables
both small-lot production of trial and special products and massproduction, develop products to meet the changing times, promotelabor-saving and unattended operation, and also, on the basis of ourOne Factory vision, connect Japanese mother factory to every factoryin the world. Also, by developing OSG Product Data Management(named OPDM) which enables to centrally manage input and output
of all the information needed for manufacturing by digitizing productdata, sales data, and technical data, etc., we work on reforming ourdomestic production system with the goal to be a Smart Factory.
Through these efforts, with strong environmental consciousness, wewill further promote the development of environmentally friendly
products with energy saving and high efficiency.
With the challenging spirit, we will continue our efforts tocontribute to the sustainable development of manufacturingindustries in the world. We sincerely ask for your continued
understanding and support.

OSG introduced its new brand statement and tagline “shaping your dreams”
toward the 100th anniversary.
The power of OSG lies in our assured innovative technological know-how for
producing high-quality and high-performance products; our exceptional
services to respond to situations diligently; and our out-of-the-box thinking toprovide total solutions that anticipate our customers’ needs.
As a comprehensive cutting tool provider with operations spanning acrossthe globe, we are committed to contribute to the advancement of the
manufacturing industries by shaping our customers’ dreams into reality.
http://www.osg-global.jp/brand/Fundamental Business Policy	Always aware that our corporation is an institution that serves society, we provide products that areappreciated by our customers.
We assign our employees appropriate jobs and strive to improve their daily lives.
We strive to provide stable dividends to our stockholders.	We implement sound business practices that earn enhanced social trust and develop the corporation intoa worldwide business.

Basic Environmental Ideas	All will work to maintain the global environment in harmony with OSG’s basic business policies.	OSG publicizes information on its three declarations made in October 1996
(i.e., Global Expansion, Health-consciousness, and Eco-friendliness).	OSG conducts activities with consideration of the environment while offering products and services
that contribute to society.
Following societal norms, OSG promotes communication with the local community.

Environmental Policy
OSG strives to protect the global environment and act in harmony with nature under OSG’s slogans of“an Eco-friendly Company” and “a Culture That Cares for the Environment.”

2
Seventh Mid-Term Environmental Plan (From FY2018 through FY2020)
Slogan: Achieve further environmental improvement as a leading eco company[We aim to reduce costs by actively promoting eco-factory activities and developing eco-products]
Priority activities[Eco-factory]
Reduction in consumption of energy and indirect materials such as cutting oils and grinding wheels[Eco-product]
Development of cutting tools with long life and that help customers to reduce their environmental impact[Energy conservation]
Productivity enhancement by reducing setup time and improving cycle time

FY2018 Targets and Results, FY2019 Targets

1

EnergyConservation

FY2018TargetResult

FY2019TargetTotal Energy Use Reduction(Energy sources: Electric power, Fuel oil and LPG)
Total use of energy BM: 96,676 GJ/month

1.0% reduction
957 GJ/month
reduction

1.9% reduction
1,776 GJ/month
reduction

1.0% reduction
957 GJ/monthreduction

Basic unit of production
BM: 20 GJ/million yen

1.0% reduction
0.20 GJ/million
yen reduction

1.4% reduction
0.27 GJ/million
yen reduction

1.0% reduction
0.20 GJ/million
yen reduction

Environmental Objectives

2

Eco-Products

Eco-Friendly Product Development

29 points

35 points

31 points*

3

Eco-Factory

Eco-Friendly Production

31 points

38 points

34 points**Improvement of environmental activities Evaluation by scoring (60 points maximum)

Environmental Activities

An important task for OSG is to address environmental issues, which will impact future generations. We aim toreduce environmental impacts and build a recycling-oriented society, while making efficient use of resources,
promoting eco-friendly production and providing eco-friendly products and services to our customers.

Material Balance
In order to contribute to the realization of a low-carbon society and the creation of a resource recycling society, OSG
understands and manages the various environmental impacts of our business activities. We remain committed to initiatives
such as reducing energy use and using waste from our manufacturing processes as recycled materials.

EnergyPurchased electric power

Resources
95,070,000 kWh

Crude oil power generation

INPUT

Air conditioning
Gas (LPG)(Natural resources, Energy)

Suppliers

612 kL(Substances subject to PRTR)

275 tons

916 kL

Oils (Cutting fluid, Grinding fluid)

Water supply

124,697 m3

Water for industrial use

23,803 m3

Well water

3,630 m3

Resource extraction
Material manufacture
Energy resource
extraction
Material (Smelting)

2,011 tons

432 tons

Paper: Copy paper (A4 size)

3Raw Materials (Metal)

Others

490 kL
Sub-materials

3,750,000 sheets

OSG
Design developmentProcurement

Manufacture

Packaging

Entrance
control

Eco-friendly
production

Eco-package
promotion

Reduction ofenvironmental impacts

Reduction ofenvironmental impacts

Sales and Services

Development of
Eco-friendly products

Storage (Processing)Energy saving,
resource saving(High efficiency andlong tool life)
Reduction ofenvironmental impacts(Dry cutting tools)

Products

Green procurement

RecycleDisposal

Manufactured Products
Production

OUTPUT(Waste materials,Customers

Packaging supplies

Water Emissions

55,925 million yen
185 million yen

Emissions Waste Material

Emissions to water andAmount for re-use

1,075.6 tonsatmosphere)

Recycled amount

1,089.7 tons

Reclaimed amount
Total output

Drainage water

152,130 m3* Most drainage water is domestic drainage water.
* We have balanced our water use so that the amount ofdrainage water equals our water usage. 50–60% of actual
drainage water is estimated to be from the use ofwater-soluble coolants and the evaporation from air
conditioning, etc.

Atmospheric Emissions

4.1 tons

CO2 emissions

2,169 tons

Production

53,001 tons-CO2

Waste Recycling

Promotion of Resources Recycling

Metal scrap

OSG has promoted zero emission activities to reduce waste. We
developed a system to recycle reusable and recyclable resources,and established a structure to ensure the proper disposal ofwaste from our operations. Therefore, our recycling rate has beenover 99% since 2005.
Recycling
Rate

99%

799.8 tons

Cardboard boxes (sold for re-use)

76.8 tons

Waste oil (sold for re-use, recycled)

416.3 tons

Oil sludge (sold for re-use, recycled)

175.0 tons

Diatomaceous soil (sold for re-use, recycled)

462.9 tons

Waste grinding wheels (recycled)

41.9 tons

Waste plastic (recycled)

53.0 tons

Wood chips (recycled)

83.4 tons

Others (recycled)

56.1 tons

Total

2,165.3 tons

Reductions in Environmental Impacts
CO2 Emissions

OSG has strived to reduce energy consumption, CO2emissions and waste output. Focusing on efficient energy
use and switching to energy-saving equipment, we haveworked to promote continuous improvement inenvironmental impact throughout the entire company.

Through the installation of energy-efficient equipment that
could reduce CO2 emissions, our CO2 emissions per unit ofproduction improved by 2% over the previous year despite
the increase in production.

Waste Emissions and Valuable Materials Ratio

Reductions in Energy Use

We are continuing our efforts to reduce waste and recovervaluable materials from waste. In FY2018, we reduced theamount of waste by 6% from the previous year while ourproduction increased. On the other hand, the recovery rateof valuable materials dropped by 4% year-on-year due tothe decrease in the amount of valuable materials recoveredfrom waste.

By promoting the replacement with energy-efficient air
conditioners and the switch to LED lighting across theentire company, our energy consumption per unit ofproduction was 18.4 GJ/million yen, a 2% improvementfrom the previous year.

Energy Use

Carbon-Dioxide Emissions

Waste Output and Ratio of
Recovered Valuables(GJ)(GJ/Million yen)(t)(t/Million yen)

(t)

(%)

1,200,000

40

60,000

3.0

2,500

100

50,0002.5

900,000

30

2,000

80

40,0002.0

30,0001.5

600,000

19.4

17.6

18.6

18.7

1,500

18.4 20

20,00010

300,000

’14

’15

’16

’17

’180

Electricity
Fuel oil (Generating electricity)
Basic unit of production
Liquefied petroleum gas

00.970.95

0.82

10,000
00.96

0.95

’14

’15

’17Emission
Comparing production output

’1852

52

54

50

60

1,000

40500

20

1.00.5

’16

50

00’14

’15

’16

Total weight of emissions
Ratio of recovered valuables

’17

’18

04

Environmental Activities

Eco-Friendly Products and Services
OSG is striving to produce eco-friendly products and provide them to our customers. We are actively working to reduce
environmental impacts by enhancing regrinding services and developing energy-saving products and high-efficiency productsthat enable high speed and long-life.

Carbide Material Recycling
Raw materials of carbide tools include rare metals such as
tungsten and cobalt.
OSG group promotes recycling of carbide tools. For
customers’ CSR activities and zero-emission promotion, weutilize these resources by collecting end-of-life tools fromour customers and recycling rare metals.
Customers(Carbide tool users)

5

Rare metals
such as tungsten

Refineries andmanufacturers

Nihon
Hard MetalCo., Ltd.
(Cemented
Carbide material
manufacturer)

OSG
MaterialsCollection(Carbide toolmanufacturer)

Products

Regrinding Services
Cutting tools such as taps, end mills and drills become
worn and dull after repeated use.
These tools can be returned to their original as-new
condition by regrinding. OSG group provides regrinding
services and meets customer’s various needs.

BeforeAfterADO-TRS-3D/5D 'Triple Revolution' 3-Flute Carbide Drill with Oil HoleThe New Standard of 3-flute Drills• Unique R gash geometry	The ADO-TRS’ R shape geometry improves chip separation and chip forming stability in the processing of steel materials that aredifficult with conventional 3-flute drills. In addition, this geometry can reduce cutting resistance by over 30% versus conventional
3-flute drills in high-feed processing, which enables low cutting resistance comparable to 2-flute drills.
End cut shape

Chip shape comparison in mild steels that are difficult to break chips

Conventional 3-flute

Conventional 2-flute

ADO-TRS

Cutting resistance comparison with conventional 2-flute and 3-flute drills
12,000Over 30% reduction in thrust force against a competitor 3-flute
drill with even lower thrust force versus a competitor 2-flute drill

Competitor (3FL)
Competitor (2FL)
ADO-TRS

9,600
Thrust (N)7,200

By low cutting resistance, in comparison to conventional 3-flute drills,
the ADO-TRS can work in a wide range of cutting conditions with few
constraints such as machining environment.

4,800
2,400
00

1.2

2.4

2.4

4.8

Time (s)Hole accuracy comparison in thin plate processing withhigh cutting resistanceTool

ADO-TRS-3D

Competitor (3FL)

Size

Hole accuracy equivalent to low-feed 2-flute drills
60mm

Competitor (2FL)
40mm

φ1420mmWork Material

S53C (30HRC)

Cutting Speed

100mm/min (2,275min )Feed-1956mm/min(0.42mm/rev)

1,274mm/min (0.56mm/rev)

Depth of HoleABCD

10mm

10mm (Through)Coolant

Water-Soluble

MachineVertical Machining Center
Unit:mmHole Position Accuracy
B
C

Hole Diameter
BCToolFeedDA

ADO-TRS-3D

1,274mm/min

0.031

0.033

0.038

0.042

13.99613.99814.00914.022Competitor (3FL)

1,274mm/min

0.055

0.075

0.131

0.272

14.00414.00714.02014.062Competitor (2FL)

956mm/min

0.023

0.029

0.045

0.046

14.01314.02114.02614.026AD•	Long tool life and stable performance in the processing of steel materials that conventional 3-flute drills areunable to achieve	With the above features, the ADO-TRS achieves long and stable tool life in the processing of a wide range of materials including highstrength steels, which ensures the reduction of both machine operation time and power consumption with high efficiency machining,
and also contributes to the reduction of waste with increased tool life.

61-15 Honnogahara, Toyokawa, Aichi, 442-8544 Japan
Tel. +81-533-84-8929 Fax. +81-533-84-8952
E-mail : infoeco@osg.co.jp