OUR VALUE CREATION
Tokuyama will create new value in harmony with the environment by supplying products that addresssocial problems.
T o k uya m a a t a G la nc e

MissionTo create a bright future in harmony
with the environment,in collaboration with customers,

Our product lines anddemonstrating prowess
in diverse markets

based on chemistry

Overseas sales
companies, etc.

OtherRecycling

Vision13%

Waste processing

Be a value-creative company thatplaces first priority on R&D and marketing
Cement

Be a company that never stops challenging
new domains while refining
and exploiting its unique strengths

Cement16%

Consolidated
net sales(FY2022)

Be a company with healthy employees
who have healthy families and take pridein their work at their company
Be a company that fosters bonds with people incommunities and societies worldwide

CementChemicals

32%

Chlor-Alkali andVinyl Chloride

ValuesCommitment to customer satisfaction asa profit source

Caustic soda

A broader, loftier perspective
Employees who consistently surpass
their predecessors

PVC resin

Integrity, perseverance,a playful spirit and boldness
1. CMP: chemical mechanical polishing
2. IPA: isopropyl alcohol

Soda ashTokuyama Value
Creation Strategy

Tokuyama Value Creation

Management for
Sustainable Growth

Progress of Strategy
by Business Segment

Corporate Data

Key Data (FY2022 Results)
Semiconductor-grade
polycrystalline silicon

Inter-segment eliminations
and corporate-wide expenses

Other¥

2.0 billion(¥5.3 billion)

CementElectronic &Advanced Materials*(¥3.7billion)

Silica for CMP1

7.0 billion¥Chemicals¥

High-purity
aluminum nitride

その他の地域

153億円

6.8 billion

Operating Profit(FY2022)¥14.3 billion

Eco BusinessLife Science¥¥

7.3 billion

0 billion

Silicon

Other regions
SilicaHigh-purity IPA2 forelectronics manufacturing

Electronic &AdvancedMaterials*

ThermalManagement
Materials

Asia¥

IC
Chemicals25%

22.5 billion¥79.2 billion
Net Sales by Region(FY2022)351.7¥billion¥Fine
ChemicalsLife Science

10%

Eco Business

4%

Soda Ashand Calcium
Chloride

DentalMaterials andEquipment
MedicalDiagnosis
Systems

351.7billion

Microporous filmJapan

250.0 billion¥Environment

Ion-exchange
membranes
Plastic window sashes

Photochromic materials foreyeglass lenses

Electronic &Advanced Materials*

1,127

Company-wide(Common)

1,237Life Science

Number ofEmployees
by Segment1,039(As of March 31, 2023)
Other

OMNICHROMA dental
filling composite resin

1,043

5,909

Eco Business

496

CementChemicals

627

340

Waste gypsum
board recycling*On April 1, 2023, the name was changed to Electronic &Advanced Materials

TOKUYAMA REPORT 2023

1

Contents

Section 1

Tokuyama Value Creation
OUR VALUE CREATION ���������������������������������� 1
Contents/Editorial Policy ��������������������������������� 2
The Path to Value Creation ��������������������������� 4

Section 2

Tokuyama Value Creation Strategy
Message from the President ������������������������ 6
Value Creation Process ���������������������������������12
Tokuyama’s Strengths Supporting
Value Creation �������������������������������������������������������14
Improving Value Creation ����������������������������16
Progress of Medium-Term
Management Plan 2025 ��������������������������������20
Message from the CFO ���������������������������������22

Section 3

Progress of Strategy by Business Segment
Electronic & Advanced Materials ����������24
Life Science �������������������������������������������������������������26
Eco Business ���������������������������������������������������������28
Chemicals �����������������������������������������������������������������30
Cement ������������������������������������������������������������������������32

Section 4

Management for Sustainable Growth

Message from the Executive Officerin Charge of Sustainability ������������������������� 34
Vision and Materiality ������������������������������������� 36
Materiality KPIs and Results �������������������� 36
Disclosures Based on TCFD
Recommendations ������������������������������������������� 40

Section 5

Compliance ������������������������������������������������������������� 43
Stakeholder Engagement ��������������������������� 43
Dialogue with External Directors ���������� 44
Corporate Governance ��������������������������������� 46
Risk Management ��������������������������������������������� 50

Corporate Data
Financial andNon-Financial Highlights ������������������������������52
Management Team �������������������������������������������56
Corporate Data �����������������������������������������������������58

2TOKUYAMA REPORT 2023

Tokuyama Value Creation

Tokuyama Value
Creation Strategy

Progress of Strategyby Business Segment

Management for
Sustainable Growth

Corporate Data

Editorial Policy
The Tokuyama Report is published to communicate thePeriod Covered

Company’s management policy and medium- to long-term

FY2022 (April 1, 2022 to March 31, 2023)

strategy to stakeholders in a way that is easily understood.

Some activities and information included relates to FY2021 or earlier or isscheduled for FY2023 or later.

When preparing this report, we conducted interviews withReport Scope

investors and a survey within the Company about theTokuyama Corporation and consolidated subsidiaries (56 companies)

our planning. We hope that this report will enable better• If the reported scope is different for some data in this report, the different scope
will be cited.
• In principle, entities listed as Tokuyama in this report generally refer to Tokuyama
Corporation and the Tokuyama Group.

communication with our stakeholders as well as a deeper

Reference Guidelines

understanding of the Tokuyama Group. This report briefly
outlines information that is highly relevant to the value• The Ministry of Economy, Trade and Industry, Guidance for Integrated
Corporate Disclosure and Company-Investor Dialogues for Collaborative
Value Creation 2.0

creation story. For more detailed IR and/or CSR• IFRS Foundation, Integrated Reporting Framework

FY2022 report. The feedback we received is reflected ininformation, please visit the Company’s website.

• Global Reporting Initiative, GRI Sustainability Reporting Standards• Task Force on Climate-related Financial Disclosures (TFCD), Final
Report: Recommendations of the Task Force on Climate-related
Financial Disclosures

Information Framework

Overview of StrategyFinancial

Non-Financial

Tokuyama Report (Integrated Report)
This report includes corporate activities for a wide range of stakeholders,covering both financial and non-financial aspects of Tokuyama at present andfor the future that we aim to achieve.
https://www.tokuyama.co.jp/eng/ir/report/annual_rep.html

CSR Website
Provides more detailed information on
Tokuyama’s CSR activities

https://www.tokuyama.co.jp/eng/csr/

Details and Latest Data

Investors Website
Useful information for shareholders andTokuyama TCFD Report

investors, organized as an IR Library

Outlines initiatives against climate change
based on the TCFD’s four recommendations:
governance, strategy, risk management,
and metrics and targets· Financial summaries· Presentation materials· Annual securities reports· Corporate governance reports, etc.

https://www.tokuyama.co.jp/eng/csr/tcfd_information.html

Sustainability Data Book
Mainly includes data for understanding
today’s Tokuyama based on the perspectivesof responsible care (sustainability)
https://www.tokuyama.co.jp/eng/ir/

https://www.tokuyama.co.jp/eng/csr/report/index.html

Cautionary Note on Forward-Looking Statements

Disclaimer

This report contains forward-looking statements on the Company’s plans,This report is for information only and is not intended as a solicitation. The

strategies,operating performance and other matters. These forward-looking

Company assumes no liability for any losses due to investment decisions madestatements are the Company’s assessments based on information available atby relying on forward-looking statements, numerical targets, or other information

the time of this report’s preparation. Statements in this report are subject tocontained here.

various risks and uncertainties. The Company’s actual activities and/or operating
performance can differ materially from these forward-looking statements as aresult of many factors, including but not limited to changes in economicconditions, the operating environment, demand trends, and exchange rates.

TOKUYAMA REPORT 2023

3

The Path to Value Creation

HistoricalBackground• World War I (1914 to 1918)

Social Problems• Japanese economic miracle• World War II (1939 to 1945)

1918–(1955 to 1973)

1960–

1945–

Chemicals: 1918 Nihon Soda Kogyo Co., Ltd. established for the domestic production of soda ash. Subsequently began production oCement: 1938 Began production of cement from byproducts of soda ash. SubsequentlySince our founding in 1918, Tokuyama has worked to accumulate technologies and create new products bydeveloping our inorganic chemicals business, while, from the 1970s, we began addressing social problems
by expanding the scope of businesses, mainly in organic and polymer chemistry. We are continuing to refine
the technologies that have become the cornerstone of our growth over more than a century, as we strive tocreate new value that meets the requirements of the coming age.

Net Sales / Operating Profit

Strengthened environmental measures

Net Sales
Changed production process of caustic soda

Operating Profit

Responded to booming demand for cement

Entered the petrochemicals businessand contributed to improving lifestyles
and developing infrastructure

Produced soda ash domestically
Used byproducts from soda ash
production as raw materials for cement

1918

1930

1940

1950

1960

Tokuyama Value Creation

Japanese industrial development
backed by domestically
produced soda ash
Tokuyama was originally established in 1918 as
Nihon Soda Kogyo Co., Ltd. by the founder Katsujiro Iwai,
succeeding two decades later with the domestic productionof soda ash (sodium bicarbonate) used as an ingredient inglassmaking. Tokuyama utilized the byproducts to makethe foray into the cement industry. In 1952, the production
method for caustic soda was converted into an electrolytic
process in response to market changes. The pioneering spiritof the founders, who were instrumental in Japan’s industrial
development, is the cornerstone of what makes Tokuyama what
it is today.

4TOKUYAMA REPORT 2023

Diversifying businesses toevolve into a comprehensive
chemical manufacturer
Armed with a solid management base, Tokuyama
made the move to take the advanced technologies we
had developed into new industry sectors. In 1964, Tokuyama
began production of polypropylene oxide, taking the first steps
into the field of petrochemicals. This was followed by entry into awide range of sectors, including film and construction materials
in the 1970s, and electronic materials like polycrystalline silicon
to meet the needs of the burgeoning semiconductor industry
as well as dental materials and eyeglass lens materials for thehealthcare sector in the 1980s.These moves gave Tokuyama astrong foundation upon which to grow into a comprehensivechemicals manufacturer.

Tokuyama Value
Creation Strategy

Tokuyama Value Creation

1970–(1986 to 1991)

1980–

Corporate Data• Declining birthrate and aging population in Japan (from 1997)• COVID-19 pandemic• Digital revolution (from 1995) • Bankruptcy of Lehman Brothers (2008) (from 2020)• Adoption of the Sustainable• Kyoto Protocol (1997)• Oil shocks (1973, 1979)• Environmental• Japanese asset price bubble
pollution problems

Management for
Sustainable Growth

Progress of Strategyby Business Segment

Development Goals or SDGs (2015)

1990–2000–

2020–

2010–

of calcium chloride, caustic soda, PVC resin, and other materials

y changed production process and launched the recycling business in 1999 using cement kilns
Eco Business: 1967 Began production of ion-exchange membranes for use in salt production from concentrated seawater 2013 Established waste gypsum board recycling business, 2021 Converted this operation into a department
Life Science: 1978 Established dental materials and equipment business, 1982/1983 Established businesses for eyeglass lens material, pharmaceutical ingredients, and diagnosis equipment
Electronic & Advanced Materials: 1984/1985 Began production of semiconductor-grade polycrystalline silicon, high-purity IPA for electronics manufacturing, and aluminum nitride
Expanded businesses
globally and created
new businesses

Enhanced competitive powerby integrating businesses andspinning off companies

Pushed ahead withzero-emission policies
and resource recycling

Shifted toward energy conservation

FY2022 Net sales¥351.7 billion

Entered high value-added fields, such as
electronic materials and fine chemicals

FY2022 Operating profit¥14.3 billion

1970

1980

1990

More overseas operations
underpinning our growth as aglobal company
The company name was changed to Tokuyama in1994, marking our expansion overseas with a key focus
on Korea, Singapore, China and other countries throughout Asia.
In Japan, new Group companies were established, consolidated,and reorganized to further boost the company’s operationalframework. With initiatives for moving toward a moresustainable society, Tokuyama expanded into the recycling
business in 1999 by utilizing cement plants.

2000

2010

2022

Toward a value-creative andsolution-providing company

While the economic system reeled from unprecedentedchanges in 2021—the digital revolution, advancements
in DX, inflation on a global scale, the COVID-19 pandemic—Tokuyama took the first steps toward achieving a brand-new
vision: transforming from energy-intensive businesses into
becoming a value-creative and solution-providing company.
With both exceptional technical strengths and proven solutions
tailored to customers’ requirements, Tokuyama is aiming tobecome a company that delivers unique value while helping toresolve social issues.

TOKUYAMA REPORT 2023

5