EnvironmentalReport

2017Top Message

OSG is striving to reduce the environmental impact of its business activities in order to foster a culture that cares
for the environment and provide products which contribute to the reduction of environmental impacts at the newstage as an eco-friendly company. We will develop mutual understanding with our stakeholders throughcommunication and contribute to the sustainable development of society.

01

OSG Corporation
President and CEO

Norio Ishikawa
President and COO

To support the manufacturing industry on a global scale, OSG is constantly
on the move, researching and developing new cutting tool solutions. Our
corporate tagline “shaping your dreams” summarizes our passion for new
challenges and commitment to transforming each and every one of ourcustomers’ ideas into reality. To make further progress in a new era, we willcontinue to provide the best tools and machining solutions for ourcustomers with our global network spanning 33 countries.
OSG is committed to conducting transparent and fair corporate
activities in accordance with environmental laws and social standards,
pursuing “Global expansion”, “Health-consciousness”, and “Eco-friendliness”
through manufacturing and human resources development.
To continuously develop the company and increase the corporate value,
we will strive to provide environmentally friendly products and protect theenvironment through the energy and resource conservation and waste
reduction at every stage from development and design of products which
contribute to the global industry to their disposal.
In energy saving, we are actively improving the production efficiency
with minimal energy consumption, by switching the energy source fromheavy fuel oil to electricity and also by reducing the electricity consumption.
In addition, we are promoting to develop environmentally friendly
products which enable high-efficient, and high-precision machining, andlong tool life in order to help our customers to reduce their environmental
impact. We aim to establish a structure that can flexibly respond to both
mass-produced and customized products.
In our manufacturing, we are keeping over 99% recycling rate by
actively promoting the recycling of waste in our production activities aswell as the conservation of energy and resources. We will further promote
the environmental activities in cooperation with our group company
which manufactures carbide tool materials . We look forward to yourcontinued support.

OSG introduced its new brand statement and tagline “shaping your dreams” toward the100th 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 to provide totalsolutions that anticipate our customers’ needs.
As a comprehensive cutting tool provider with operations spanning across theglobe, we are committed to contribute to the advancement of the manufacturingindustries 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
into a 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.

02

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

Sixth Mid-Term Plan—Sixth Stage Slogan (From FY2015 through FY2017)	To the Next Stage of Energy-Saving Activities[Priority] Improvement of Energy Conservation

FY2016 Targets and Results, FY2017 Targets
FY2016
Target

FY2016
Result

FY2017
TargetTotal Energy Use Reduction(Energy sources: Electric power,Fuel oil and LPG)
Total use of energy BM: 85,018 GJ/month

1.0% reduction
850 GJ/month
reduction

1.0% reduction
854 GJ/month
reduction

1.0% reduction
850 GJ/month
reduction

Basic unit of production
BM: 20 GJ/million yen

1.0% reduction
0.20 GJ/million
yen reduction

2.5% reduction
0.51 GJ/million
yen reduction

1.0% reduction
0.20 GJ/million
yen reduction

Eco-Products

Eco-Friendly Product Development

16 cases

16 cases

39 cases

Eco-Factory

Eco-Friendly Production

19 cases

22 cases

24 cases

Environmental Objectives

EnergyConservation

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
93,000,000 kWh

Crude oil power generation

INPUT

Air conditioning

794 klGas (LPG)(Natural resources, Energy)

483 klOils (Cutting fluid, Grinding fluid)

Sub-materials

Others

446 tons

Water supply

110,763 m3

Water for industrial use

32,061 m3

Well water

6,074 m3

Paper: Copy paper (A4 size)

03

Resource extraction
Material manufacture
Energy resource
extraction
Material (Smelting)

1,299 kl

1,826 tons

Raw Materials (Metal)

3,720,000 sheets

OSG
Design development

Procurement

Manufacture

Sales and Services

Packaging

Development of
Eco-friendly products

Suppliers

Energy saving,
resource saving

Storage (Processing)(High efficiency andlong tool life)

Products
Entrancecontrol
Green procurementReduction ofenvironmental impacts

Eco-friendly
production

Eco-package
promotion

Reduction ofenvironmental impacts

Reduction ofenvironmental impacts

Customers
RecycleDisposal(Dry cutting tools)

Manufactured Products
Production

OUTPUT(Waste materials,Emissions to water andatmosphere)

51,229 million yen

Packaging supplies

174 million yen

Subjected Material of PRTR

Water Emissions
Drainage water

148,898 m3*	Most drainage water is domestic drainage
water.
*	We have balanced our water use so thatthe amount of drainage water equals ourwater usage. 50–60% of actual drainage
water is estimated to be from the use ofwater-soluble coolants and theevaporation from air conditioning, etc.

Chromium (metal content)

81.5 tons

Cobalt (metal content)

53.5 tons

Manganese (metal content)

5.6 tons

Molybdenum (metal content)

68.1 tons

CO2 emissions

Vanadium (metal content)

31.2 tons

Production

Atmospheric Emissions

53,321 tons-CO2Emissions Waste Material
Amount for re-use

1,125.5 tons

Recycled amount

1,053.4 tons

Reclaimed amount

2.2 tons

Total output

2,181.1 tons

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 of wastefrom our operations. Therefore, our recycling rate has been over
99% since 2005.
Recycling
Rate

99%

892.7 tons

Cardboard boxes (sold for re-use)

46 tons

Waste oil (sold for re-use, recycled)

439.5 tons

Oil sludge (sold for re-use, recycled)

112.6 tons

Diatomaceous soil (sold for re-use, recycled)

467.4 tons

Waste grinding wheels (recycled)

42.5 tons

Waste plastic (recycled)

46.8 tons

Wood chips (recycled)

64.6 tons

Others (recycled)

48.1 tons

Total

2,178.9 tons

Reductions in Environmental ImpactsR eductions in CO2 Emissions

OSG has strived to reduce energy consumption, CO2
emissions 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.

OSG’s CO2 emissions per unit of production increased 27%
compared with FY2015. This is because the rate ofproduction decreased 4% and the CO2 emissions increased
23%. This year’s summer was hotter than the previous years
and as a result, the CO2 emissions associated with energy use
for cooling increased during the summer season.

R eductions in Energy Use
In FY2016, although OSG continuously encouraged theswitch to LED lighting across the entire company, our energy
consumption increased due to temperature control insummer. In addition, along with a 4% decrease in production,
our energy consumption per unit of production increased
14% compared with FY2015.

Energy Use

Carbon-Dioxide Emissions(GJ/Million yen)

(GJ)

1,200,000

40900,000

30600,000

20.2

21.4

19.4

17.6

20.1

20

(t/Million yen)

(t)

3.0

50,0002.5

40,0002.0

30,0001.5

20,000

1.0

1.14

1.21
0.95

10,000

’
12’
13’
14’
15’
16

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

0Waste Output and Ratio of
Recovered Valuables

60,00010300,0000 ate of Valuable Resources Recovered from Waste
ROSG continued to promote the recycling of valuable
resources in industrial waste.
Although, with the increase in waste such as diatom
earth or oil mud, our waste emissions increased 9%, throughefforts to increase valuable resources in waste, the rate ofvaluable resources recovered from industrial waste was a 3%
increase from last fiscal year.

0’
12’
13’
14

Emission
Comparing production output

0.82

’
15

1.04

0.5’
160(t)

(%)

2,500

100

2,00080

60

1,500

1,000

52%

53%

50%

52%

55%

20500

040’
12’
13’
14

Total weight of emissions
Ratio of recovered valuables

’15’
16004

Environmental Activities

Eco-Friendly Products and ServicesOSG 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 from ourcustomers and recycling rare metals.
Customers(Carbide tool users)

05
Rare metals
such astungsten

Nihon
Hard MetalCo., Ltd.

Refineries andmanufacturers(CementedCarbide materialmanufacturer)

OSG

Materials

Collection(Carbidetool manufacturer)

Products

Regrinding Services
Cutting tools such as taps, end mills and drills become wornand 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The New Standard for Milling. Anti-Vibration Carbide End Mill AE-VES SeriesFeatures
DUARISE Coating	“DUARISE coating” having multi-layer construction provides excellent lubricity,superior friction-resistance, and high oxidation temperature.
Applicable for both dry and wet milling, a wide range of coolant.
Smooth coating treatment ensures an excellent surface finish.

Multi-Layer Construction

Adhesion Reinforcing Layer

06
Low Cutting Force
Sharp cutting edge reduces cutting force and enables stable milling.

Suppression of Vibration	Unequal spacing of teeth and variable-lead geometry enable the suppression of vibration andhigh efficiency milling. A shorter milling time leads to a reduction in power consumption.
Variable Leads

Unequal Spacing Teeth

Multi Functional Milling
Applicable for a multitude of applications.
ApplicationSlotting

Side Milling

Helical Milling

Contour Milling

Ramping

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