TOKUYAMA REPORT 2022
F is c al ye ar en de d M ar ch 31, 2022

Contents

Tokuyama
Value Creation
Message from the President

3

Tokuyama at a Glance

8

Target Business Model

12

Tokuyama’s Aims

14

Electronics

14

Healthcare and the Environment

15

Contributing to Decarbonization

16

Vision and Materiality

18

Editorial Policy
The Tokuyama Report is published as an integrated report for the
purpose of communicating the Company’s management policy
and medium- to long-term strategy to stakeholders in an easily
understandable manner. When preparing this report, we conductedinterviews with investors and a survey within the Company about lastyear’s report, the feedback from which we reflected in our planning.
We hope that this report will facilitate communication with our
stakeholders as well as deepen understanding of the Company.
The report briefly outlines information that is highly relevant tothe value creation story. For more detailed IR and/or CSR information,please visit the Company’s website.

Period Covered
FY2021 (April 1, 2021 to March 31, 2022)
Some activities and information included pertains to FY2020 or
earlier, or is scheduled for FY2022 or later.
Reference Guidelines

TOKUYAMAREPORT

2022

H2・ Ministry of Economy, Trade and Industry,“Guidance for Integrated Corporate Disclosure and CompanyInvestor Dialogues for Collaborative Value Creation”
・ International Integrated Reporting Council (IIRC),“Integrated Reporting (IR)”・ Global Reporting Initiative,“GRI Sustainability Reporting Standards”
・ Ministry of the Environment,“Environmental Reporting Guidelines 2018”
・ Task Force on Climate-related Financial Disclosures (TFCD),“Final Report: Recommendations of the Task Force on Climaterelated Financial Disclosures”

Socially Responsible Management
and Governance

Growth Strategy
Financial and Non-Financial Highlights

20

Message from an External Director

42

Progress of Medium-Term Management Plan 2025

24

Risk Management

43

Progress of Strategy by Business

28

Disclosures Based on TCFD Recommendations

44

Electronic Materials

28

Corporate Governance46

Life Science

30

Management Team50

Eco Business

32

Corporate Data

52

Chemicals

34

Cement36

Materiality KPIs and Results

38

Information Framework
Financial

Non-Financial

TOKUYAMA REPORT 2O22

Overview of Strategy

Tokuyama Report (Integrated Report)

The report includes corporate activities for a wide range of stakeholders,covering both financial and non-financial aspects of Tokuyama at present
TOKUYAMA REPORT 2022
Front Place Akihabara

and the future it aims to achieve.

F is c al ye ar en de d M ar ch 31, 2022

7-5, Sotokanda 1-chome, Chiyoda-ku, Tokyo 101-8618, Japan
Corporate Social Responsibility Divisionhttps://www.tokuyama.co.jp/eng/

TOKUYAMA REPORT 2022_ 表 1-4

2022.07.20（18:00:06）

Investors Website

CSR Website

investors, organized as an IR Library

Tokuyama’s CSR activities

Useful information for shareholders andDetails and Latest Data・Financial summaries
https://www.tokuyama.co.jp/eng/ir/
https://www.
tokuyama.co.jp/eng/ir/

・Presentation materials
・Annual Securities Reports

Provides more detailed information on

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

・Corporate Governance Reports, etc.

Sustainability Data Book

Mainly includes data for understanding
today’s Tokuyama based on theperspectives of responsible care activities

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

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

and ESG

Cautionary Note on Forward-Looking Statements

Disclaimer

This report contains forward-looking statements on the Company’s plans, strategies,
operating performance and other matters. These forward-looking statements are
the Company’s judgments based on information available at the time of this report’s
preparation. They are subject to various risks and uncertainties. The Company’s actual
activities and/or operating performance may differ materially from these forwardlooking statements as a result of various factors, including but not limited to changes in
economic conditions, the operating environment, demand trends or exchange rates.

This report is intended to be informational. It is not intended as a solicitation.
The Company assumes no liability for any losses due to investment decisions
made entirely in reliance on forward-looking statements, numerical targets orother information contained herein.

1Tokuyama Value Creation
Tokuyama redefined its Mission and Vision in 2021 in light of its rapidly-changing operating environment.
In accord with its New Vision, which encompasses its deeper Values in addition to its Mission and Vision,
Tokuyama will create new value in harmony with the environment by supplying products that address societal
problems while minimizing the environmental burden imposed by its business activities.

MissionTo create a bright future in harmony
with the environment,in collaboration with its customers,
based on chemistry

Vision・Be a value-creative company that places first priority on R&D and marketing・Be a company that never stops challenging new domains while refining
and exploiting its unique strengths
・Be a company with healthy employees who have healthy families
and take pride in their work at their company
・Be a company that fosters bonds with people in communities and societies worldwide

・Commitment to customer satisfaction as a profit source
Values・A broader, loftier perspective・Employees who consistently surpass their predecessors
・Integrity, perseverance, a playful spirit and boldness2Message from the President

Tokuyama Value Creation
Growth Strategy
Socially Responsible Management
and Governance■
Message from the President

Transforming Tokuyama into a new company byembarking on a growth path in our three Focus Areasand leading the way toward decarbonization
In 2021, we initiated Medium-Term Management Plan 2025, formulated in conjunction with our new Mission.
What is the key to radically revamping a profit structure long dependent on energy-intensive businesses,
while transforming it into a value-creative organization? How can we accelerate our transition to a portfolioof energy-efficient, high-value-added businesses that are in sync with the decarbonization movement andattuned to the challenges customer face?
We spoke to President Hiroshi Yokota about Tokuyama’s strategies and initiatives addressing these questions.
Representative Director, President and Executive Officer

3

Pivoting Toward Growth Businesses
We have designated electronics, healthcare and the environment as growth businesses. The keys to increasing
their share of consolidated net sales to over 50% are the resolve and decision-making of management on the
one hand, and the ability of employees to take action informed by a reshaped mindset on the other.
Evolving into a Value-Creative Company inHarmony with the Environment

challenge new domains and brave risks. We want more
employees to eagerly embrace challenges.
We will reallocate management resources to the threedomains we have designated as growth businesses:
electronics, healthcare and the environment. Our progressin executing this growth strategy, which leverages
Tokuyama’s unique strengths, is being watched especiallyclosely by our stakeholders. The keys to realizing our
Vision while increasing these growth businesses’ share of
consolidated net sales to over 50% are the resolve anddecision-making of management on the one hand, and theability of employees to take action informed by a reshaped
mindset on the other.

Progress toward carbon neutrality has been
accelerating globally in recent years. In April 2022, theIntergover nmental Panel on Climate Change (IPCC)
published the third installment of its Sixth Assessment
Report, in which it discussed the prospects and ways oflimiting global warming to no more than a 1.5°C increase in
the global average temperature relative to the pre-industrial
era. Given such developments, chemical companies
like Tokuyama cannot hope to survive, much less grow,over the long term without being in harmony with theenvironment. Based on this awareness, last year we
updated our Mission and Vision, and formulated MediumTerm Management Plan 2025 to foster our transformation
into a value-creative company. Our Mission and Visionencompass our goal of creating new value our customers
seek by placing priority on R&D and marketing; on pursuitof coexistence with communities and societies worldwide
through CO 2 emission reductions and environmentallyfriendly products; and on employees who take prideand find fulfillment in their work. We are proud that thisconception articulates the identity that Tokuyama has
cultivated as well as its future direction in order to offer aclearer picture to our employees.
However, reflecting our Mission and Vision in our dayto-day operations has proved challenging. Although ourworkforce as a whole is generally supportive of our plan
to overhaul our business portfolio by shifting our profit
structure away from dependence on energy-intensive
businesses, there are still not enough employees willing toElectronic Materials Business: Expansion
Plans and Global Strategy
Of our three Focus Areas, the biggest growth driver in
Medium-Term Management Plan 2025 is the Electronic
Materials Business. Its strengths include purification
and analytical technologies that facilitate semiconductor
miniaturization, and technologies for sintering thermal
management materials to maintain performance bydischarging heat from electronic parts and materials.
Proprietary technologies like these that we have beeninternally amassing for over two decades are driving theongoing expansion of the Electronic Materials Business. To
broaden our thermal management materials product line,
we opened the Center for Commercialization of Advanced
Technology in Yanai, Yamaguchi Prefecture, in July 2021.
We are also preparing to launch mass production of silicon
nitride, a project that is progressing roughly as planned.

Net Sales of Growth Businesses(Billions of yen)
180
160
140
120

Environment

100
80

Healthcare

60
40Electronics

200
2016/32017/3

2018/3

2019/32020/32021/3Medium-Term Management Plan: Cornerstone of the Group’s Revitalization

4

2022/32023/32024/32025/3Medium-Term Management Plan 2025

2026/3

*2 New Energy and Industrial Technology Development Organization

Launch of New Business Center Set to
Accelerate Value Creation■

We spent the past year exploring potential new businesses
to transform Tokuyama into a value-creative company,
and ultimately identified three clear-cut areas where ourtechnological prowess is aligned with societal needs: alkaline
water electrolyzers (AWEs): thermal materials and biomass
fuels. To expedite monetization of our efforts in these threeareas, we established the New Business Center, a neworganization independent from both business divisions andthe Research & Development Division, in April 2022.
Capitalizing on our vast operational know-how andexpertise in electrolysis technologies, we aim to develop theworld’s most energy-efficient hydrogen-producing AWEs
that produce hydrogen. We are seeing strong interestin such AWEs from around the world, and so will swiftly
commercialize them with our sights set on an overseas rollout.
Thermal materials under development include ceramicmetal composite substrates with high thermal conductivity,and fillers for exothermic resins. We aim to commercialize
such high-value-added thermal management materials forapplications with promising growth prospects, including nextgeneration mobility. Next, I will discuss biomass fuels.

Message from the President*1 Good manufacturing practices: pharmaceutical production management and quality
management standards

Socially Responsible Management
and Governance

We are gaining share in the plastic lens-related materials
and dental material markets, mainly in Europe and the U.S.
New product development and investment are proceedingas planned. In May 2022, we completed an expansion of
raw material processing capacity at our Kashima Factory,
where we produce dental materials/equipment. Despite
the adverse impact of the Russo-Ukrainian conflict, we will
increase production capacity through additional capex.
The Life Science Business’ priority goal is to lay thegroundwork for healthcare operations over the next five toten years, during Medium-Term Management Plan 2025’s
term. This plan comprises several components. First, inthe medical diagnostics space, our focus is on generatingsynergies with A&T Corporation, a wholly-owned subsidiaryacquired in 2021. We have already begun to reciprocallyshare researchers with A&T, and are working on combining
our respective strengths to develop biochemical testing
reagents and improve testing hardware. In addition toshoring up the foundation of the medical diagnostics
business, we must broaden our reagent product line, andare exploring options to do so, including M&A.
Next, we will enhance the competitiveness of ourpharmaceutical ingredients and intermediates by leveraging
our strengths, namely process development and thorough
GMP* 1 compliance. Meanwhile, we will keep capex
down by entirely outsourcing manufacturing to overseas
producers. Additionally, we will utilize a consultative sales
approach to inform pharmaceutical companies involved indiscovery and development of new drugs how to achieve
stable yields by using new process technologies we havedeveloped.
Lastly, we are starting to supply spherical porous silica,
a highly oil-absorbent material that feels pleasant on theskin, to the cosmetics industry. We will focus on expanding
silica’s applications as well as cultivating new sources ofdemand by strengthening our marketing.

For the Eco Business, we have designated Medium-Term
Management Plan 2025’s term as a foundation-building
phase to develop the business into a new pillar that willplay a major role in Tokuyama’s future.
Environmental regulatory tightening is driving growthin demand for wastewater purification and recovery ofvaluable substances using our ion exchange membranes,
which are garnering strong interest from China in particular.
Thus, we are planning to expand production capacity. We
plan to forge ahead with further technological development
and laterally expand into new businesses such as
extracting resources from seawater.
Tightening of residential energy efficiency standards isa tailwind for our plastic window sashes. In this area, we
aim to capture demand in the high-performance multifamily
housing market in addition to the high-performancedetached housing market.
As for gypsum board, we have decided to build a third
waste gypsum board recycling facility, in Hokkaido. Waste
gypsum board is classified as intractable waste. Given thechallenges its disposal poses, we selected the new facility’ssite out of a desire to benefit the region by deploying our
proprietary technology there. With desulfurized gypsum
emissions from coal-fired power plants expected todecrease going forward, demand for recycled gypsum
powder is growing. Against such a backdrop, the gypsum
board market is increasingly counting on Tokuyama’s
technologies. Additionally, we are focusing on the impending
problem presented by large quantities of photovoltaics
panel waste. To this end, we are researching separation andrecycling technology in collaboration with NEDO*2.

Growth Strategy

Life Science Business: Production Capacity
Expansion and Switch to Consultative Sales
Model

Building Foundations for the Eco BusinessTokuyama Value Creation

Additionally, we are planning to expand into downstream
market segments by partnering with companies thatpossess technologies we lack.
The Electronic Materials Business’ customers, mostof which are concentrated in Asia, want us to be able
to provide quick-turnaround production and technicalsupport by locating production facilities in their proximity.
Consequently, as a first step, a joint venture we formed
with a Taiwanese company is commissioning a high-purity
isopropyl alcohol (IPA) plant that will commence production
in 2022. We have also decided to expand our production
capacity in Korea, and are starting to research expansion
opportunities in other countries/regions as well. Throughthese efforts, we intend to raise our profile as the top
electronic materials supplier in Asia.

5

Tokuyama Factory

Roadmap to Carbon Neutrality
How can we build a carbon-free business model while maintaining market competitiveness?
Management’s leadership will be tested during the transition to a value-creative company.

Captive Power Plants to Be Converted to
Biomass Co-fired Generation

Decarbonization Council Activities

One of Medium-Term Management Plan 2025’s priorities

a low-cost hydrogen carrier because it is easier to bothis to contribute to the mitigation of global warming. Bytransport and store than hydrogen. The Shunan Industrial

FY2030, we plan to reduce our total CO2 emissions by 30%

Complex Decarbonization Promotion Council, a regionaland our CO2 emissions from energy consumption by 50%,

alliance, is currently discussing ammonia fuel. The Council

both relative to FY2019. Our basic policy to achieve thiscomprises companies with operations at the Shunan

plan is to convert the Tokuyama Factory’s captive power

Complex, the city of Shunan, and the Society of Chemicalplants to biomass co-fired generation. As biomass fuels,

Engineers, Japan. Entities participating in the Council as

we will mainly use palm kernel shells (PKS) among otherobservers include the Ministry of Economy, Trade andwaste biomass. In February 2022, we obtained RSB*3 andIndustry, the Ministry of Land, Infrastructure, Transport

Ammonia has been attracting attention in recent years as

GGL* certifications in the belief that PKS sourced fromand Tourism, the Ministry of the Environment, Yamaguchi

overseas must be traceable, environmentally friendly andPrefecture, and Yamaguchi University. Our involvement

legally compliant. We have decided to secure adequate

in the Council as one of its member companies includes

supplies of PKS during FY2022 and convert one of thedeveloping decarbonizing technologies, deploying themTokuyama Factory’s four power plants to biomass mono-in society and making policy proposals. By utilizing thefired generation from FY2023. We plan to subsequently

Council or Shunan Complex’s framework to promote open

decide as appropriate how to upgrade the other three power

innovation without being wedded to just our own ideas, weplants in light of the state of development of ammonia-firing

believe we can boost the competitiveness of the Complex

technologies, and other relevant considerations.

as a whole and contribute to harmony between society and4

We also established a Biomass Commercialization

the environment.

Group within the New Business Center to work on

To spearhead societal change in pursuit of carbon

development of biomass fuels. Specifically, we want toneutrality from within the chemical industry, we must

develop black pellet production technology that canaccelerate our own transition into a value-creative company.

torrefy biomass into a form that can be handled in theHow, then, can we build carbon-free or low-carbon businesssame manner as coal. Ultimately, we expect to be able tomodels while maintaining market competitiveness? This

improve boiler efficiency and reduce transport and storage

question is truly our top management priority.

costs by fuel-switching to black pellets.
*3 Roundtable on Sustainable Biomaterials: Established in 2007, mainly by the Swiss Federal Institute of Technology in Lausanne, to widely promote environmental criteria for certificationof sustainable biofuel production. The RSB certification is one of the third-party certifications recognized by the Japanese Agency for Natural Resources and Energy’s business planningguidelines.
*4 Green Gold Label: The biomass certification with the longest history, dating back to 2002. It encompasses every step from sustainable bioenergy production to processing, transport and enduse, ensures traceability and requires record-keeping. Like the RSB certification, GGL is a third-party certification recognized by the Japanese Agency for Natural Resources and Energy’s
business planning guidelines.

6

Tokuyama Value Creation
Growth Strategy

Socially Responsible Management and Future Sustainable Growth
We aim to transform Tokuyama into a new company brimming with vitality that can repeatedly
create new businesses that provide value to customers and local communities.

Main Agenda Items for the Board of Directors
day work, and formulate and implement strategies aligned

We believe the most important step toward transformingwith our Vision, CSR will consistently play a core role.

into a value-creative company is reshaping the mindset

Hence our commitment to promoting socially responsibleof employees. We must drastically change how we work,

management as one of Medium-Term Management Plan

recognizing that there is no future in rote perpetuation of2025’s priorities. We recognize that Tokuyama must

the status quo.

labor, environmental and anti-corruption principles in orderand safety are foundational business activities for Tokuyama,

to survive and achieve sustainable growth. We are also

and will no doubt remain so, an accident occurred at the

stepping up monitoring of our business portfolio overhaul

Tokuyama Factory in FY2021. In response, we establishedprocess to mitigate the most impactful risks to Tokuyama’sa Safety Enhancement and Improvement Department

survival. Even the Board of Directors devotes much of its

in January 2022, and are sparing no effort to implement

attention to matters pertaining to reforming the businesssafety precautions. That said, past practices alone may no

portfolio as well as the issue of decarbonization.

longer be sufficient to ensure safety if our facilities become

T h e B o a rd a l s o re g u l a r l y d i s c u s s e s t e c h n o l o g y

outdated, our workforce ages or we cannot train enoughdeployment on a granular level. The Research &qualified employees. Carrying out digital transformation (DX),

Development Division briefs the Board on the progress

which is also a key component of our portfolio makeover,of the development and deployment of technologies,

represents one effective means of moving beyond the statusalong with current challenges and potential risks. Thesequo. By utilizing technologies such as IoT, AI and robotics,

challenges and risks are shared among and thoroughly

we plan to reduce hazardous work involving humans,

discussed by senior management, whereupon the Board

effectively monitor the operating status of facilities, perform

votes to make decisions from a medium-/long-term

preventive maintenance, “smartify” our plants and otherwise

perspective. Additionally, directors who are Audit andensure safety.

Supervisory Committee members relay feedback gathered

Reforms that utilize digital technologies and a wealth oflargely through conversations with front-line staff. Thisdata like this begin with critical thinking about work. Going

feedback spans diverse perspectives on matters ranging

forward, we must cultivate and promote, irrespective of age,from diversity and inclusion to recruitment of personnel

personnel who excel at detecting problems from societal

capable of executing the business portfolio makeover.

trends or conversations with customers. Through such an

Utilizing such feedback, we then endeavor to identify andapproach, we want to build an organization that can transform

execute the most effective course of action.

Tokuyama into a new company and successively create new

Message from the President

Even though accident prevention and occupational health■comply with the UN Global Compact’s ten human rights,

Socially Responsible Management
and Governance

As we put Tokuyama’s Mission into practice in our day-to-

Better Accident Prevention, Mindset Reform,
DX and HR Development

businesses that rejuvenate the organization, brim with vitality,and provide value to customers and local communities.

7

Tokuyama at a Glance

SiliconOverseas sales
companies, etc.
1

SilicaRecycling

2

15

Other

12%

Thermal Management
Materials

3Electronic Materials
Cement25%

14

Cement16%

Life Science

11%

12

Chlor-Alkali andVinyl Chloride

Medical Diagnosis
Systems

10

9 Environment
Ion Exchange Membranes

Plastic Window Sashes

Soda Ash andCalcium Chloride(¥4.4 billion)

Companywide
Adjustment Costs

Other regions¥15.3 billion

CementOther

Companywide(Common)Electronic
Materials¥7.2 billion
Total

¥24.5
¥14.2 billion

1,085

Asia

¥71.9billion

Total

Other

Life Science¥6.0 billionJapan¥206.5 billion

1,056

Cement(¥0.4 billion)

1,021Life Science

1,014

Eco
Business

504

Chemicals 363

Eco Business

Net Sales by Region*Net sales are based on customer locationand categorized by country or region.

8

Electronic
Materials

5,665

622

Operating Profit

Microporous Film
Dental Materials
and Equipment

8

11

13

Chemicals

Fine Chemicals

7

3%

33%

billion5
6

Eco Business

Chemicals¥3.8 billion

IC Chemicals

FY2021 consolidated
net sales¥293.8 billion(¥1.9 billion)

4

Number of Employees
by Segment

1

Silicon Semiconductor-grade polycrystalline silicon

2

Silica Fumed silica

3

Thermal Management Materials High-purity aluminum nitride

4

IC Chemicals High-purity IPA, photoresist developer TMAH

Tokuyama Value Creation

Electronic
Materials

Product Share in Semiconductor Manufacturing Process
1

4

Semiconductor-grade
polycrystalline silicon

Polycrystalline
siliconPhotoresist developer
TMAH

Silica for CMP

Lithography

Etching

Wafer Manufacturing Processes

CMP

Post-process

Pre-process

Eco Business

5

Fine Chemicals

6

Microporous Film

7

Dental Materials and Equipment

8

Medical Diagnosis Systems

9

Photochromic dye materials for eyeglass lenses,
APIs and intermediates

Composite resin

100% waste
gypsum board recycling

10

Ion Exchange Membranes

11

Plastic Window Sashes

Non-kiln resource recycling
Ion exchange membranes andelectrodialyzers for desalination andconcentration
Plastic window sashes andrelated productsFirst in the world

CementSoda Ash and Calcium Chloride

13

Chlor-Alkali and Vinyl Chloride

Soda ash, calcium chloride, sodium bicarbonate

14

Cement Cement, cement-type stabilizer

15

Recycling

Caustic soda, PVC resin, vinyl chloride monomer,
propylene oxide (PO), sodium hypochlorite

13

Soda ash

Environment

Tokuyama at a Glance

Laboratory information system,
diagnostic reagents

12

Sole manufacturer
in Japan9

Microporous film

Chemicals

12

Semiconductor

Packaging■

Ranked #2 worldwide

Chips

Ranked #1 worldwide

Socially Responsible Management
and GovernancePhotochromic dye materials
for eyeglass lenses

High-purity aluminum nitride
for thermal management

Ranked #1 in Asia

Cleaning

Life Science5

3High-purity IPA

Ranked #1 worldwide

Ranked #1 in Asia

Siliconwafers4

Growth Strategy

25% of global share

2

Waste processing (Waste plastic recycled as alternative fuel,trash incinerator ash recycled as alternative raw material for cement)

14

Caustic soda

Ranked #3 in Japan

15

CementRanked #4 in Japan

Waste processing

1.73 million tons

9Unique Technologies in Growth Businesses
Since its establishment in 1918, Tokuyama has worked to accumulate technologies and create new products bycultivating our inorganic chemicals business and, since the 1970s, by promoting the development of fine chemicals
and specialty businesses, mainly in organic and polymer chemistry. Over the course of more than a century, we haveestablished technologies that have become the cornerstone of our growth. We will continue to evolve our technologies
as we strive to create value that meets the needs of today.

1

Separation technology using ion exchange
membranes

In the 1960s, we became the first company in Japan to commercialize ion exchange
membranes. Today, we offer separation technologies for a variety of applications,through the use of selectively permeable membranes that only allow the passage oftarget materials and membranes that havechemical resistance. These technologies areused in a wide range of industries, including
the production of salt from seawater, therecovery of specific valuable substances, theproduction and refining of food products suchas wine and soy sauce, and the production ofacids and alkalis from neutral salt effluent.
Ion exchange membranes

3

High-purity and high-sensitivity analysis
technology

Our semiconductor-grade polycrystalline silicon, which is used as a raw material
for silicon wafers, is of the highest level of purity in the world. In addition, theCompany’s isopropyl alcohol, a chemical used to clean electronic components,
is characterized by its low level of impurities
due to a unique process for the direct
hydration of propylene. Our high-purity
and high-sensitivity analysis technology,
which detects even the smallest amount of
impurities, facilitates the development andmanufacture of these products.

2

Molecular design and organic synthesis
technology

The Company has advanced technological capabilities in molecular design, which
involves designing and controlling the chemical structure of photochromic dyematerials according to their intended purpose, such as color tone and color development and fading. In addition, we haveadvanced organic synthesis technology to
manufacture products according to design,
and we have a track record of delivering
numerous products in the field of plastic
lens-related materials. In the future, we willcontinue to expand these two technologies
to a wider range of areas.
Plastic lens-related materials

4

Direct nitridation and reduction-nitridation
technology and powder control technology

Tokuyama holds the largest share of the global market for high-purity
aluminum nitride powder and related products. Our aluminum nitride, which
has excellent sintering properties due to our proprietary reduction-nitridation
method, is used in semiconductor heatspreading substrates and the manufacturing of equipment materials due to its
thermal conductivity, thermal expansion
properties, and other characteristics
that are far superior to those of ourcompetitors.
High-purity aluminum nitride

High-purity IPA

5Waste processing technology

Tokuyama has been effectively utilizing and recycling waste through thecement manufacturing process since the company’s inception. We are now
accepting a substantial amount of waste, including waste plastic, fromoutside the company. Because our kilns
burn at an extremely high temperatureof 1,000 to 1,800°C, the combustible
components are completely burned away
and the non-combustible components
are used as raw materials in cement.
This processing technology produces noresidue.
Resource recycling

Ion exchange membranes: Commenced production of ion exchange
membranes, for use in salt production, from concentrated seawater(first ever commercialization of ion exchange membranes in Japan)

1967

PVC resin: Established subsidiary to manufacture PVC resin
using chlorine produced by electrolysis

1966

1952
1940
1938
1918

1918

Caustic soda: Changed manufacturing process of
caustic soda to electrolytic process

Calcium chloride: Began to produce calcium chloride using distillery effluent
from soda ash production

Cement: Began to produce cement using wet process, from byproducts of soda ash business

Soda ash: Nihon Soda Kogyo Co., Ltd. (now Tokuyama Corporation) established to produce soda ash domestically

1930

1940

1950

3.8 bn1.3 bn1960

Supplied basic materials and chemical derivatives, supporting postwar reconstruction and rapid economic growth

10

1

1970

Tokuyama Value Creation

Business History
The Company was founded as a soda ash business and utilized the byproducts to expand into the cement business.
It proceeded to diversify into the petrochemical business, such as PVC resin, in the 1960s, and developed into adiversified chemicals manufacturer. Following the second oil shock that occurred around 1980, the Company expanded
its business to include high-performance products such as electronic materials and fine chemicals. It made a full-scale
entry into the recycling business in 2000.

Net sales (right)

2013

Liquid hydrogen: Commenced production of liquid hydrogen at Yamaguchi
Liquid Hydrogen Corporation, a joint venture with Iwatani Corporation

2013

2000

5

300

Resource recycling: Newly-established Recycling andEnvironment Business Div. at Tokuyama Factory

1985

Pharmaceutical ingredients & intermediates: Entered pharmaceutical ingredients & intermediates
business utilizing organic synthetic technology (partnership with Koei Kasei Kogyo)

4

1985

High-purity aluminum nitride: Commenced production of high-purity aluminum nitride
powder using our proprietary reduction-nitridation method

3

1984

Semiconductor-grade polycrystalline silicon: Commenced production of high-purity
polycrystalline silicon

1983

Medical diagnostic systems: Commenced sales of enzyme kits for polyamine tests,
resulting in Company’s entry into diagnostic reagents and systems business

3

1983

High-purity IPA: Commenced production of IPA-SE,
a high-purity form of isopropyl alcohol

2

1982

Plastic lens-related materials: Commenced raw material monomer production
using proprietary technology and entered plastic lens field

Growth Strategy

Waste gypsum board recycling: Established Tokuyama Chiyoda Gypsum Co., Ltd.
as joint venture to recycle waste gypsum board(Billions of yen)
350

Operating profit

Socially Responsible Management
and Governance

250

200

1976

Plastic window sashes: Commenced production of plastic window sashes
made from vinyl chloride

1972

Isopropyl alcohol (IPA): Commenced production of isopropyl alcohol using
our proprietary direct hydration method

30.9 bn

150

Tokuyama at a Glance

Dental materials and equipment: Entered field of dental materials and equipment byapplying polymer technology and powder control technology

■

1978

100

19.3 bn
15.6 bn

11.0 bn50

5.7 bn
0

1980

1990
Branched into healthcare area and electronic materials
that support information society

2000

2010

2020

(FY)

Launched recycling business in response to growing environmental consciousness* Reference values calculated by adding September and March figures until period ended March 1975 due to six-month financial periods being used11

Target Business Model
Today, Tokuyama has reached a major milestone in our transition away from energy-intensive businesses. With thisawareness, we have selected electronics, healthcare, and the environment as three new growth areas in which we canleverage our strengths. With the combination of our proprietary technologies and marketing, we will develop a solutionoriented business that provides unparalleled value to these three areas.

Six Forms of Capital (as of March 31,2022)

Intellectual Capital
R&D expenses: ¥12.6 billion

Number of patents held*: 2,352* Total of non-consolidated & some group companies

Investment Areas* Cumulative total for FY1988-2021

・ Super Smart Society(Society 5.0)・ Changes in industrial
structure igitalization/networking
・D
Main unique technologies

Electronics

Number of countries and regions with sales:
Amount subsidized by Tokuyama Science
Foundation*: Approx. ¥1.2 billion

Main social issues

Proprietary andmanufacturing
technologies
cultivated over a
history of morethan a century

Social Capital
43 countries and regions

Focus Areas・ Direct nitridation andreduction-nitridation
technology

Customer network
across various
industries

 owder control technology
・P

Financial Capital

Main social issues
・ Population shrinkage,societal aging

Total assets: ¥433.2 billion

Consolidated operating profit: ¥24.5 billion

Human Capital・ High-purity and highsensitivity analysis
technology

Revenue
generatedby chemicals
and cementbusinesses

・ Healthspan extension
・ Healthcare spending
cuts

Healthcare

Number of employees (consolidated): 5,665

Main unique technologies
・ Molecular design andorganic synthesis
technology

Overtime hours worked (monthly average,
non-consolidated): 11.1 hours

Manufacturing Capital

Human resources
with shared values

Main social issues
・ Global warming/climatechangeCapital expenditures: ¥33.3 billion

・ Decarbonization

Accident frequency rate (non-consolidated): 0

・ Closed-loop society
・ Changing values

Natural Capital
Investment in environmental conservation(non-consolidated): ¥900 million
Total environmental conservation costs(non-consolidated): ¥6.6 billion

12・ Environmental regulatory
tightening

Manufacturingbase rooted inlocal community

Environment

Main unique technologies
・ Separation technology
using ion exchange
membranes・ Waste processing
technology

Tokuyama Value Creation

Through this new business model, we aim to achieve the goals of our material topics that contribute to the realizationof SDGs, while reducing our own CO2 emissions. Moreover, we will continue to be a company that never stops
challenging new domains while refining and exploiting its unique strengths, as we have set out in our Vision.

Aspirations
Main solutions
・ Performance maintenance instate-of-the-art electronic devices
and energy efficiency
・ Miniaturization of semiconductors

To create a bright future in harmony
with the environment, in collaboration
with its customers, based on chemistry

Growth Strategy

・ Improvement of semiconductor
performance

MissionVisionMain solutions
・ Enhancement of quality of life
through improvement of eyeglass
lenses・ Pursuit of cuttingedge information andtechnology

・ Improvements in dental care・ Support for clinical laboratories toenable rapid, accurate diagnosis
and treatment

・ Contribution to mass waste
processing・ Protection of water environment
by desalination of effluent, etc.

・ E xpansion of external
networks・ Contribution to evolutionof the times・ Accelerated
international
expansion・ Contribution todevelopment oflocal economies
and communities

Be a company
that never stops
challenging new
domains whilerefining andexploiting its
unique strengths

Target Business Model・ Establishment of closed-loop
society through waste recycling

Be a company
that fosters
bonds withpeople incommunities
and societies
worldwide■

Main solutions

Socially Responsible Management
and GovernanceBe a value-creative
company that places
first priority on R&D
and marketing・ Differentiation oftechnology・ Innovation in
manufacturing
processes

Be a company with・ E xpansion ofhealthy employees
customer network
who have healthyfamilies and take pridein their work at theircompany・ Promotion of physical &mental health・ Respect for individuality
・ Open corporate culture

13Tokuyama’s Aims

Electronics

Hiroshi Nomura
Representative Director,
Senior Managing Executive Officer
In charge of Electronic Materials,
Tokuyama Factory, Environment & Safety and
Manufacturing Technology of Kashima Factory

We are focused on marketing informed by IP strategy while meeting customer
needs for exceptional quality. We aim to create value with our technology andcontrols, and to upgrade our international competitiveness.
Building a Quality Management Regime across
All High-Purity Chemical Processes throughProduct Delivery

Generating Synergies with Three Nitride ThermalManagement Materials

The market for chemicals and high-performance materials

high-purity aluminum nitride, which is used as a thermal

for electronics manufacturing has tremendous potential. It

management material, most notably in semiconductors, but

is also marked by fierce global competition among many

we recognize that the functionality sought from electronic

chemical companies. We aim to refine the quality of essential

materials will keep changing in tandem with society. In thisingredients to add more value while staying above the fray ofregard, we are focusing on the electro-mobility domain

price competition.

in particular. We are commercializing silicon nitride, an

We have captured the top share of the global market for

We are currently endeavoring to improve stable production

exceptionally strong and durable material, as an insulator andtechnologies, quality control technologies, and microanalysisa thermal management material for power semiconductor

technologies in response to customers needs for exceptional

modules used in EVs and other applications. We have alreadyquality. We are building systems that can fulfill theestablished a proprietary energy-efficient production process

responsibility of maintaining high purity across all processes

for this material. We also aim to also generate synergies withthrough product delivery to the customer.

a lineup of three nitride materials, the third being boron nitride.

Additionally, we are locating new production sites in

Moreover, we intend to commercialize and roll out not only

proximity to customers, as well as working on upgrading our

upstream materials in powder or ceramic-plate form but also

quality control processes, technical support capabilities, andhigh-value-added products used in downstream applications.

technologies for analyzing highly-purified products. In 2022,

It is crucial to incorporate IP strategy into our marketing

we will commence end-to-end production in Taiwan of high-if we are to remain an internationally competitive chemical

purity IPA used in semiconductor cleaning processes, among

company. To launch new products that leverage Tokuyama’s

other applications. We will also begin construction on a newstrengths in a timely manner, we will put in place mechanisms

plant in Korea. Meanwhile, we plan to open new production

to identify on a long-term basis what global markets aresites in China. We will continue to globally accelerate

seeking. We see electronics as a core growth driver for

localization of production with the aim of increasing our

Tokuyama, and recognize that it has a major role to play in thecompetitiveness.

makeover of our business portfolio. Accordingly, we will focus
on developing human resources able to re-conceptualize
businesses from a forward-looking, global perspective.

14

Healthcare and the Environment
Tokuyama Value Creation

Fumiaki Iwasaki
Director and Managing Executive Officer
In charge of Life Science, Eco Business,
Research and Development

Growth Strategy

In terms of technology, the twin oil shocks of the 1970s wereDeveloped countries are currently facing various societal

a major turning point in Tokuyama’s history. They prompted us

challenges associated with progressively aging populations. To

to embark on new R&D programs to migrate away from ourhelp address these challenges, we are focusing on prevention

traditional energy-intensive business structure. These efforts

and early diagnosis. Our 2021 acquisition of wholly-owned

yielded three unique technologies that are now driving our

subsidiary A&T Corporation was intended to bolster our

growth. The first is powder control technology, applications

reagent and medical lab chemical commercialization program

for which include not only electronic materials but also fillingto more effectively drive growth in the diagnostics space whilematerials that support the quality of materials for dental

contributing to early prediction and prevention of diseases.

practice. The second is organic synthesis technology, which

The Tokuyama Group plans to provide solutions able to driveis used to manufacture products such as pharmaceuticalbroader adoption of home healthcare, personalized medicine

ingredients/intermediates and plastic lens-related materials.

and point-of-care testing.

Finally, we have ion exchange membrane technology, first

In the environmental domain, meanwhile, we aim toused to produce salt from concentrated seawater overestablish foundations for our Eco Business and develop global

50 years ago. Today, we also use it internally in related

markets. One primary focus is hydrogen production systems.

businesses.

In this area, we are developing high-efficiency alkaline water

To further promote these technologies and add more

electrolyzers based on electrolysis technologies that we havevalue to society, we set up a marketing organization in direct

been working on for decades. We are also continuing tocontact with customers in 2017 to enable us to identify new

research and develop ion exchange membranes to addressneeds and demand trends downstream of our customers.

increasingly severe water resource problems overseas.

In 2018, we opened a research laboratory in Taiwan. Its

At the same time, we are developing CO₂ utilization

staff is jointly conducting development with local customers

technologies to compensate for a lack of chemical-based

and researchers. Most recently, we have been intensively

decarbonization solutions, which we see as one of thegathering information on healthcare and environmental

challenges faced in the environmental domain.

Tokuyama’s Aims

Cultivating Green Hydrogen and Medical
Diagnostics Markets■

Deploying Unique Technologies to Create Valuefor Society

Socially Responsible Management
and GovernanceLooking ahead to 2030 and beyond, we will identify the needs of our customers’
end-users and bring to market sustainable products that address social issues.

markets with promising demand growth prospects, mainly inEurope and North America.

15

Contributing to Decarbonization

Hideo Sugimura
Representative Director,
Senior Managing Executive Officer
In charge of Corporate Planning,
Corporate Social Responsibility,
General Affairs and Human Resources,
Procurement and Logistics,
Secretarial Department

Conscious of society at large beyond our customers, we promote realizationof decarbonization strategies through prioritized allocation of management
resources.
Expediting Carbon-Neutral Strategies and Risk
Mitigation

Sustainability Committee to discuss ways to mitigate them.

With the transition to a decarbonized society now proceeding

the Board of Directors and meetings are convened as needed

apace internationally, we must boldly convert our captive

to discuss them.

coal-fired power plants, which have long been a source ofour competitiveness, to greener fuels. In other words, weGroup Optimization in Pursuit of Sustained Growthconsider decarbonization to be a key management issue

In preparation for the business portfolio makeover, a Medium-

related to our survival.

Term Management Plan 2025 priority, we are discussing

While shifting our business portfolio toward businesses

various matters, including reduction of CO₂ emissions andthat consume less power, we aim to expedite utilization ofprojects in growth businesses, while optimizing allocation of

next-generation energy technologies. We believe CO₂-emitting

human resources, capital and other management resources

chemical manufacturers have an obligation to innovate using

on a Group-wide basis. Resource allocation decisions are

CCUS (carbon capture, utilization and storage) technologies.

made based on our Mission and Vision. Specifically, we plan

In April 2022, we established a new organizational unit in theto prioritize allocations of management resources based on

aim of launching new businesses that utilize our electrolysis

multiple perspectives within the context of awareness of society

technology and know-how to produce hydrogen, which isat large beyond our customers. These perspectives include

seen as a promising next-generation energy source.

whether a prospective resource allocation can (1) create value

Additionally, as a company that deals in chemicals, wein harmony with the environment, (2) leverage our proprietary

have long endeavored to ensure environmental, health andtechnology, and (3) build a business that engenders a sense

safety compliance, but nowadays more and more issues,of accomplishment and pride among employees. From theincluding global warming and human rights abuses, need tostandpoint of preventing global warming, we will convert ourbe addressed on the level of the supply chain as a whole. In

captive power plants to biomass fuel as a first step toward

FY2022, we have identified such risks common to the entire

achieving carbon neutrality by FY2050. In FY2022, we will

Group inclusive of supply chains, and are strengthening

source biomass fuel and invest in a biomass co-firing system.

safeguards to mitigate them. Recognizing that issues suchas climate change and human rights abuses represent new
risks outside of the purview of our existing expert committees
that assess codified hard-law risks, we established a new

16

Progress on sustainability issues is reported periodically toCarbon-Neutrality Action Plan

Effectively utilize CO₂ (develop CCU technologies)
Develop green products

Develop green products

Develop green products

Decarbonize Shunan Industrial Complex
Use local energy (bamboo and other fast-growing trees)
Use biomass/hydrogen (ammonia) as mono-fuel or in combination with other fuels
Use renewable energy
Improve Tokuyama
Factory’s energy
efficiency and processes

Pursue attainment of carbon neutrality by 2050 through a multi-pronged
approach including energy efficiency upgrades and deployment ofTransform businessportfolio
FY2021

Growth Strategy

Reduction of CO₂ emissions from energy/
raw materials

Tokuyama Value Creation

Technologicaldevelopment

Adopt green hydrogenaccumulated energy-saving technologies, in addition to fuel-switchingfrom coal to, e.g., biomass, ammonia, hydrogen and renewables.

FY2030FY2050• Increase use of combustible waste, such as waste plastics, to reduce coal consumption• Continue promoting energy conservation, improving manufacturing processes, and considering upgrades
to latest equipment with high environmental efficiency• Establish low-temperature calcination technologies for clinker (cement component); increase cement’s
SCM content to reduce clinker usage; and develop calcium recycling technologies such as use of waste
concrete materials

Use biomass/hydrogen(ammonia) as mono-fuel or in
combination with other fuels• Work on developing biomass fuel business to stably source palm kernel shells (PKS) and build sustainablesupply chain• Consider facility modification to expand biomass combustion• Confirm technology trends in hydrogen and ammonia fuels

Use local energy (bamboo
and other fast-growing trees)• Promote development of technology and construction of supply chain to convert bamboo and fastgrowing trees, which are unused resources in Tokuyama Factory area, into biomass fuel as alternative tocoal

Decarbonize Shunan
Industrial Complex• Work on improving complex’s overall energy efficiency by strengthening cooperation and energy sharing
among occupant companies• Work on Shunan Industrial Complex Decarbonization Promotion Council’s plan to achieve carbon neutrality
by 2050Develop green products• Promote development of green products in living environment• Create new green products through introduction of technologies that enable greening of manufacturing
processes and products• Research catalytic technologies that achieve production with low-temperature exhaust heat

Effectively utilize CO₂(develop CCU technologies)• Develop CCU for capture and effective use of CO₂ and survey technological trends• Promote open innovation in next-generation carbon recycling technology• Develop concrete that reduces CO₂ emissions and maximizes carbon fixation

Adopt green hydrogen• Study water electrolysis technology development and commercialization

Tokuyama’s Aims

Improve Tokuyama
Factory’s energy
efficiency andprocesses■• Reform organizational culture based on optimal management resource allocation and new philosophy; indoing so, transform from business structure dependent on energy-intensive businesses to value-creative
company driven by growth businesses of electronics, healthcare, and the environment

Socially Responsible Management
and GovernanceTransform businessportfolio

17

Vision and Materiality
Tokuyama’s Vision

Materiality

Be a value-creative
company that places firstpriority on R&D andmarketing

Helping to fight global warming

Be a company thatnever stops challenging
new domains whilerefining and exploiting its
unique strengths
Be a company
with healthy employees
who have healthy families
and take pride in theirwork at their company
Be a company that
fosters bonds withpeople in communities
and societies worldwide

Conserving the environment
Preventing accidents and preparing for disasters
Developing products and technologies that
address social issues
Improved chemical management and product safety

Environment

Safety and Accident Prevention
Occupational Health and Safety

Technical Quality

Engaging with local communities
Promoting CSR procurement
Developing human resources

Society

Promotion of diversity and career fulfillment
Promotion of physical & mental healthRealizing Our Vision by Implementing Socially Responsible Management
Socially responsible management plays an important role18

our long-term survival and growth.

in realizing Tokuyama’s Mission, “to create a bright future

We have set targets and KPIs associated with the businessin harmony with the environment, in collaboration with its

objectives of the relevant divisions and departments as material

customers, based on chemistry,” redefined in 2021. For

topics for the steady realization of our Vision, with measures

example, in order to create products and services thatbeing implemented in the relevant departments. Each year, thecontribute to a “bright future,” it is essential to not only

Corporate Social Responsibility Division compiles a report on

correctly understand the expectations and needs of society,the status of implementation, which is then reviewed by the

but also for each person in the Group to have a “Vision” while

CSR Promotion Council chaired by the President and sharedengaging in everyday operations with a long-term perspectivewith all executive officers. We will endeavor to continually

and an awareness of potential social issues. Furthermore,

raise the level of socially responsible management through athis attitude and behavior is also important for departing fromcompany-wide PDCA cycle based on tracking the progress

the business model that has been continually refined over the

toward these goals and analyzing current conditions.

course of a century and transforming ourselves into a value-

The “promotion of physical & mental health,” newly added

creative company. That is, socially responsible managementin FY2021, has involved the establishment of a system foras defined by Tokuyama entails the creation of new value

promoting health and productivity management as well as

for a sustainable society, and is implemented by not only

the creation and raising awareness of systems for preventing

management but all employees.

harassment. Initiatives have also been steadily implemented in

Our Vision has been formulated to enable all employees

other material topics. Furthermore, a Sustainability Committeeof the Group to envisage the intended future image necessary

was established in April 2022 to identify and discuss new

for realizing our Mission. “Material topics” refer to “CSR

risks and issues related to sustainability based on the rapidly-

priorities” identified for conducting socially responsible

changing environment. This will also take action to address

management and also constitute an action plan for the

major risks not covered by the existing expert committees,

realization of our Vision, providing a guideline essential forsuch as global warming and human rights risks.

Growth Strategy
Tokuyama is committed to transforming into a value-creative company by providing products and services
that help solve societal problems in accord with Medium-Term Management Plan 2025. We aim to set theCompany on a new growth track that diverges from the past, and are forging ahead with our growth strategy.
We are also striving to build a stronger foundation for growth through various materiality initiatives.

19

Financial and Non-Financial Highlights
Financial Analysis of FY2021
In FY2021, sales of semiconductor-related products andhealthcare-related products remained solid, but increases
in costs such as raw material and fuel prices and logistics
expenses resulted in operating profit decreasing year on year.
Meanwhile, profit attributable to owners of parent increased
due to a decrease in tax expenses resulting from additional
recording of deferred tax assets, and ROE was maintained at
the same level as the previous fiscal year.
Revenue is forecast to increase year on year in FY2022,
backed by strong demand for products such as semiconductor-

related products and petrochemical products. However, it
is anticipated that instability will continue in the environment
surrounding the business, such as raw material and fuel prices
and exchange rates, with operating profit expected to remain
at the same level as the previous fiscal year. We will endeavor
to secure earnings by continuing to revise prices and proceedwith cost reductions. Furthermore, to achieve the goals of
Medium-Term Management Plan 2025, we will proceed withinvestment in the areas of electronics, healthcare, and theenvironment, which we have positioned as growth businesses.

Net Sales / Operating Profit / Operating Margin■ Net sales (left) ■Operating profit (left)(Billions of yen)
400
350
300
250

258.6

307.1

302.0

287.3

360.0

324.6

308.0

299.1

316.0

10.9

200
150

6.3

6.2

1.5

17.9

18.7

3.9

0
2012

2013

2014

15.0

293.8

12.0

10.2

10.8

9.0

8.4
6.8

6.0

7.1

100
50

302.4

13.4

12.9

(%)
18.0

Operating margin (right)

21.9
2015

41.2

38.5

35.2

34.2

30.9

3.0

24.5

24.5

0
2016

2017

2021

2022 (Forecast)(FY)■ Profit attributable to owners of parent (left)

ROE (right)

(%)

2018

2019

2020

* “Accounting Standard for Revenue Recognition” and other standards have been applied from FY2021

Profit Attributable to Owners of Parent / ROE(Billions of yen)

52.1

60

60

58.5

40
20

10.2

(37.9)

0
(20)

4.6

(65.3)(100.5)

24.6

19.9

12.4

15.6

24.5

13.4

40

28.0

20

17.5

13.2

0
(20)

(16.2)

(40)

34.2

19.6

(33.3)

(40)
(60)

(60)

(80)

(80)
(94.0)

(100)
2012

2013

2014

2015

(100)
2016

2017

2018

2019

2020

2021

2022 (Forecast)(FY)

Capital Expenditures / Depreciation and Amortization / R&D Expenses(Billions of yen)
100
97.5

■Capital expenditures ■ Depreciation and amortization ■R&D expenses
61.0

60
50

46.2

40
33.3

30
20
10

25.3

23.2
16.7
10.0

8.7

18.8
10.1

20.0
13.9

8.5

17.3
14.2

15.9
7.5

13.9
7.9

18.5

26.4

23.7
15.0
8.0

16.1
9.1

17.0
10.8

19.7
12.6

22.7
14.3

0
2012

20

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022 (Forecast) (FY)Cash Flows

60
40
20

36.4

34.1

17.0

45.9

61.8
40.5

30.7

0
(40)
(80)

(60.6)(64.4)

2012

2013

43.3
25.9

20.0

5.1

(10.0)(11.9)(25.5)

52.3

38.5

30.0
13.4

(20)
(60)

Tokuyama Value Creation■ Cash flows from operating activities ■Cash flows from investing activities ■ Cash flows from financing activities(Billions of yen)80

(12.6)(16.1) (21.1)(37.6)(100)(20.5) (18.3)(19.2) (22.5)(33.7)(101.2)

(120)

2014

2015

2016

2017

2018

2019

2020

2021

2022 (Forecast) (FY)

Growth Strategy

Interest-Bearing Debt and Debt/Equity Ratio■Interest-bearing debt (left)(Billions of yen)
300
250

4.74

240.7

200

4.0

213.9

187.7

3.0

150

139.9
1.05

0.86

128.9

116.3

1.68

1.74

1.11

0.84

1.0

0.69

0.50

0.49

0
2012

2013

2014

2015

2016

2017

2018

2.0

109.2

98.4

Socially Responsible Management
and Governance

10050(Multiple)
5.0

Debt/equity ratio (right)

244.1

283.1

2019

2020

2021

0
(FY)

Total Assets / Shareholders’ Equity Ratio■Total assets (left)(Billions of yen)
600
500

576.3

554.5

518.2

401.3

42.0

386.7

44.0

50
40

40.2
34.7

200

29.3

30

29.9
20

100
12.8

0
2012

2013

2014

10

2015

2016

Cash Dividends Per Share / Payout Ratio
(Yen)
80

■Cash dividends per share (left)
70.00

70

11.5

2021

TOPIX

141.5
144.3

120

18.0

115.9
10

10.1

(FY)

Total Shareholder Return (TSR)

(%)
150

90

112.0

110.0

100.1

99.6
83.3

10
0

0
2017

2020

28.8

20
19.9

30.00

20

2019

127.0

50.00

50

30

70.00

2018

Total Shareholder Return (TSR)

Payout ratio (right) (%)
30
70.00

70.00

2017

24.4

60

40

Financial and Non-Financial Highlights

300

379.6

361.9

39.9

383.4

433.2

■

400

51.8

51.3
424.4

(%)
60

Shareholders’ equity ratio (right)

2018

2019

2020

2021 2022 (Forecast) (FY)* Company consolidated its common shares at ratio of one share for each five shares effective asof October 1, 2017; cash dividend per share for FY2017 given on assumption that said shareconsolidation was conducted at beginning of fiscal year
* Year-end dividend per share for FY2017 included commemorative dividend of ¥10 to celebrate
Company's 100th anniversary

74.6

60
2017

2018

2019

2020

2021

(FY)

21

GHG Emissions / Total CO2 Emissions(Thousand tons/year)
8,000

190

7,000
6,000

GHG emissions (consolidated)■Emissions from fuels ■Emissions from raw materials ■Emissions from waste■Group Companies ■Total CO2 emissions (consolidated)

250

190

6,450

5,000 1,720

250

6,770

1,820

190

180

280

6,700

1,800

6,760

260

1,850

one of the most critical issues today and are working

200

180

250

We recognize that the mitigation of global warming is

6,490

1,810

270

hard to reduce greenhouse gas (GHG) emissions.

6,530

GHG emissions are the total emissions of gases
such as CO2, CH4 and N2O; of these, CO2 emissions

1,800

4,000

account for approximately 99.8% of the volume ofemissions. GHGs are generated mainly by the

3,000
2,000 4,300

4,520

4,450

4,480

combustion of fossil fuels in captive power plants, as

4,250

4,270

1,000
0

well as by the decarbonation of limestone (rawmaterial) in the cement manufacturing process. GHG

2016

2017

2018

2019

Supply Chain Emissions* (Scope 3)
3%

2020

Upstream

In-house
6.32 million tons of
direct emissions

Scope 3Category 1

Purchased goods and services

GHG Emissions
1.78 million tons

42%

■ Category 1■ Category 2■ Category 3■ Category 4■ Other

Capital goods
Category 3

Activities related to fuel and energy
not included in Scope 1 and 2

20 thousand tons

Category 4

Upstream transportation and distribution
Category 5* Due to rounding, sum of figures in breakdown does notequal total amount

Scope 2

Scope 3Category 6

Waste generated in operations

Business travel

Upstream leased assets:
Not calculated (negligible level)

2%

Scope 1

Energy-related indirect emissions
Indirect emissions from use ofpurchased electricity and heat

Category 8

24%

Downstream

Fuel use at Tokuyama
Direct emissions from manufacturing
processes

Category 2

30%emissions in FY2021 were 6,540 thousand tons.

(FY)

2021

Category 7

Employee commuting

Category 4

Scope 3

Upstream transportation and distribution
Category 9

Downstream transportation and distribution
Category 10-12

Processing of sold products: Not calculated
Use of sold products: Not calculated
End-of-life treatment of sold products:
Not calculated
Category 13-15

Downstream leased assets: Not applicableFranchises: Not applicable
Investiments: Not applicable* GHG Protocol: organization co-sponsored by World Resources Institute (WRI) and World Business Council for Sustainable
Development (WBCSD); Scope 3 standard: standard issued by said protocol in November 2011 for calculating CO2 emissions
across an entire supply chain.

Energy Usage■Non-consolidated ■ Group Companies(Thousand GJ/year)
60,00050,000

2,700

2,500

2,700

2,600

2,500

2,600

40,00030,00047,30020,00049,60049,10049,20046,80046,90010,000
0

2016

2017

2018

2019

2020

2021

(FY)

We are promoting energy conservation as a measure
to mitigate global warming.
In FY2021, our plants worked to reduce electricity
and steam usage, and we managed to cut energy usage
by 253,000 GJ. While this accounts for 0.5% of our totalenergy usage, we are making steady efforts each year to
reduce energy consumption. In FY2020, there werefears that the energy consumption rate would worsen
significantly due to a decline in facility operation caused
by COVID-19. However, we were able to maintain thesame level as the previous year by steadily implementing
energy-saving measures and promoting the use ofalternative energy sources to coal. As a result, weachieved our target of a 3% improvement in the energy
consumption rate based on FY2005 standards.

Effective Utilization Rate for Waste / Zero Waste Emission Rate
Effective utilization rate for waste

(%)
100
99.9

99.9

99.9

99.8

Zero waste emission rate
99.7

99.9

The effective utilization rate for waste and the zero
emission rate remained high in FY2021 due toefforts to reduce the volume of waste and comprehensive recycling efforts. As a result of actively

95
94.2

93.8

93.1

93.9

94.7

94.3

promoting the recycling of waste generated bothinternally and externally, with a focus on the reuse ofwaste as feedstock and fuel for cement at the90

Tokuyama Factory, the effective utilization rate forwaste was 94.3% and the zero waste emission rate
was 99.9%.

85
2016

22

2017

2018

2019

2020

2021 (FY)Environmental Accounting (Percentage of Net Sales)
Expenses

3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2016

2017

2018

2019

2020

2021 (FY)

Environmental accounting has been conducted since
FY2000 for the purpose of ascertaining and analyzing theinvestments and expenses required for conserving theenvironment, and for the purpose of facilitating effective
investment. The amount of investment for conserving theenvironment is 0.3% of net sales, and the total expenses
incurred for this purpose were 3.4%. The amount ofinvestment as a percentage of net sales has ranged
between 0.3 and 0.8% over the past several years, while
the total amount of expenses has been at a level between
3.2 and 3.7%. In FY2021, the Company made investments
in installation of an electric precipitator to address soot,smoke and dust, the installation of waste processing
equipment, and PCB waste processing expenses.

Tokuyama Value Creation

Investments

(%)
4.0

Growth Strategy

Number of Employees / Percentage of Women among All Employees / Percentage of Women among All Managers(left)(right)Percentage of women among all employees (non-consolidated)(People) ■ Number of employees (consolidated)
Percentage of women among all managers (non-consolidated)■ Number of employees (non-consolidated)
6,000
5,679
5,665
5,476
5,471
5,406
5,000
4,889
12.6
12.1

4,000

10.4
9.0

3,000

1,869

1,000

6.0

2,315

2.0

1.8

1.5

1.5

1.3

2,256

2,063

1,924

1,920

2.0

0
2016

2017

2018

10.0

2019

2020

Tokuyama aims for a “diversity of knowledge,” and to
this end promotes diversity by utilizing the various
values and perspectives of each employee in its
corporate activities. In the second Action Plan for the
Act on Promotion of Women’s Participation andAdvancement in the Workplace updated in FY2020,
the Company achieved all targets, such as the

4.0

percentage of women among all managers in FY2021.

2.0

The Company’s first female external director was

0elected in June 2021, and women are steadily
(FY)

2021

Socially Responsible Management
and Governance

2,000

12.0

8.0

9.0

8.9

(%)
14.0

increasing in each workplace.

Accident Frequency Rates*(%)
2.0

Tokuyama

1.8
1.6

1.83

1.80

Chemical industry in Japan
2.09

1.95

0.81

0.4

0.94

1.07

0.93

0.0

0.29

0.00

2016

2017

0.28
2018

2019

ees in FY2021. We will continue our efforts tomaintain zero lost time injuries.

0.85
0.49

0.2

behavior. There were no lost time injuries to employ-

Financial and Non-Financial Highlights

0.88

0.6

working to identify and eliminate risk factors, as wellcharacteristics of each individual to eliminate unsafe

0.90

0.8

zero accidents and lost time injuries, and we areas to understand and recognize the behavioral

1.2
1.0

One of our safety management goals is to achieve

■

1.63

1.4

1.66

All industries in Japan

0.00
2020

2021 (FY)* Accident frequency rates indicate frequency of occupational
injuries, and are expressed as number of employees absent
from work due to occupational injuries per 1 million total
working hours

Number of Patents Held
(Patents)
2,500

Tokuyama aims to “be a value-creative company■ Electronic Materials, Life Science, and Eco Business■ Chemicals, Cement and all companies

that places first priority on R&D and marketing” andrecognizes that investment in intellectual property is

2,000

essential for achieving this. As we proceed withefforts to expand business globally in the areas of

1,500
Overseas

51%

1,000

In Japan49%

electronics, healthcare and the environment in order
to transform our business portfolio, technologies inthese three areas account for much of the patent

500

rights held by the Company. We also focus on the

0
2018

2019

2020

2021

(FY)

FY2021acquisition of patent rights in Japan and overseas.

23

Progress of Medium-Term Management Plan 2025
Transform Business Portfolio

Increase growth businesses’ share of
consolidated net sales to over 50%
FY2021-25 Plans

Priorities and Initiatives●Redefine/reorganize growth businesses aroundthe three themes of electronics, healthcare,and the environment, and proceed to moveahead with expanding them
●Chemicals and cement businesses topromote increased efficiency while generating
sustainable cash flows

Technology
Efficiency
Gains
International
Expansion

Pursue added value and promote technologicaldifferentiation by collaborating more with external partners
Pursue company-wide operational efficiency,
mainly through DX
Expand operations in growing overseas markets

Target Business Portfolio
Breakdown of Consolidated Net Sales
by Business34%

FY2020Growth Businesses

30%

3%

30%

18%

25%

18%
9%

3%

24%
27%

11%

5%

13%

10%
17%

33%

25%

16%

16%

12%

19%

12%

11%

9%

FY2020(Results)

FY2021(Results)

FY2025(Target)FY2030(Target)➡P14 “Tokuyama’s Aims”

FY2030

Breakdown of Consolidated
Overseas Net Sales

Targetingat least

60

%

20%

≥ 50%

■Electronic Materials■Life Science■Eco Business■Chemicals■Cement

FY2020(Results)

FY2030(Target)■Other➡P28 “Progress of Strategy by Business”

Contribute to Mitigation of Global Warming

Expedite development/commercialization of next-gen energy technologies
Other
Reducetotal CO2 emissions 30% (2 million tons) by FY2030*
Growth* Reduction target: Base year
FY2019 total CO2 emissions of approximately 6.76 million tons
businesses

Traditional
businesses➡P16 “Contributing to Decarbonization”
FY2021-25➡P44 “Disclosures Based on TCFD Recommendations”¥200 billion(planned)

Practice Socially Responsible Management
R&D

Step up high-priority
CSR initiatives to lay the groundworkenergy saving,
CO measures
for further growth and realize our Vision

Growth infrastructure

Rationalization,
2➡P3 “Message from the President”

24➡P38 “Materiality KPIs and Results”➡P42 “Message from an External Director”➡P43 “Risk Management”

KPI

FY2020results

FY2021
results

FY2025targets

Keys to achieving
target¥259.2billion*1¥293.8billion¥320.0billionOperatingprofit¥30.9
billion¥24.5
billion¥40.0
billionStrengthen
and expand
highly profitablebusinesses

Growthbusiness
net sales
growth rate

―

19.9%

CAGR
≥ 10%

Strengthen
R&D, accelerateinternational
expansion≥ 10%

Balanceshareholders’equity efficiency
and financial base

13.4%

ROE

13.2%

* Assumptions: JPY/USD rate of ¥105, domestic naphtha price of ¥32,500/kl*1 FY2020 net sales are approximate amounts based on application of “Accounting Standard for
Revenue Recognition,” etc., and are listed as reference values

Progress in FY2021
To transform our business portfolio, we are
injecting resources into the growth businessesof electronics, healthcare and the environment,in addition to proceeding with international
Breakdownof Consolidated
Net Sales
expansion.
In FY2021, net
sales increased
by comparedBusiness to FY2020* 2 due to solid sales ofsemiconductor-related
products in the area 34%
FY2020GrowthBusinessesofelectronics,
and an increase in overseas
shipmentsofdentalmaterials and equipment
in
30%
%
18%
the area of healthcare.
25% In addition, the growth18%%business net sales11growthrate 13(i.e.,
CAGR)
%
10%
9%
5%
3%
3%
exceeded the target of 10%. Meanwhile,
operatingprofit decreased due to increased 17%
24%
25%
33%
costs such as raw material and fuel prices and27%
logistics
expenses, 16
while
ROE remained
16% roughly 12%%
unchanged
from
FY2020.
19%
9%
11%

FY20

Targetinat least

60

30

Growth Strategy

Net sales

Maintain
growth whiletransforming
portfolio

Tokuyama Value Creation

FY2025 Targets■Electro■Life Sc

■Eco Bu■Chemi■Cemen■Other12%*2 C omparison with FY2020 net sales (approximate amounts) when
FY2020
FY2021
FY2025
FY2030"Accounting Standard for Revenue Recognition" and other new(Results)(Results)(Target)(Target)standards are appliedSocially Responsible Management
and Governance

Financial Management Policy and Capital Expenditures Plan
Under Medium-Term Management Plan 2025, in order to support
the transformation of our business portfolio from a financial

Breakdown of Capital Expenditures Plan
(Cumulative over 5 Years)
Otherperspective as well, we will work to generate cash flow throughprofit growth, and improve capital efficiency, while ensuring that

Growthbusinesses

group governance functions effectively. Building on our strong
financial base, we plan for capital expenditures totaling ¥200

measures, and R&D. Through these proactive investments, we will

●Earnings growth●Cash flow fromnew products(planned)

R&D

increase our top line and provide stable shareholder returns, while
reducing CO2 emissions.

FY2021-25¥200 billion

Growth infrastructure

Operating Cash Flow

Cumulative¥250 billion
over 5 years

Progress of Medium-Term Management Plan 2025

be allocated to growth businesses, energy conservation and CO2

Traditional
businesses■

billion over five years. About two-thirds of our total investment will

Rationalization,energy saving,
CO 2 measures

FY2021 Investment Results●Screen prospective
investments

・Construction of high-purity IPA JV factory in Taiwan●Reduce inventory

・Silicon nitride production equipment
・Improvement of quality of polycrystalline silicon・Introduction of high-purity chemical equipment at
Tokuyama Chemicals (Zhejiang) Co., Ltd.

Main Future Investments

Capex¥200 billion

Strategic
Investment(M&A, new businessdevelopment)

Up to¥30 billion

・Construction of high-purity IPA JV factory in South Korea

Shareholder
Returns
20-30% payout ratio
Consider acquisitionof own shares・Expansion of research infrastructure
・Investment related to polycrystalline silicon, silica
and silane
・Investment related to electrolysis technology
・Alternative energy to fossil fuels・DX

25

Promoting Digital Transformation (DX)
Promoting DX in the Tokuyama Group, under the heading“Tokuyama DX Project,” is one of the most importantmeasures for the entire Group to pursue in order totransform its business portfolio. DX is being carried out inorder to establish highly efficient business operations on acompany-wide level, and is also necessary for innovation in
R&D and supply chain management (SCM). Furthermore,digital technology can speed up decision-making andenable the succession of knowledge among various
divisions in the Company.
Management resources such as cash and surplus
personnel generated by DX promotion will be injected into
the three growth business areas to enhance corporate
value. During Medium-Term Management Plan 2025,
individual DX measures are planned to be implemented
through investing a maximum of ¥10 billion by FY2025.
In April 2021, the DX Promotion Department wasestablished in the Corporate Planning Division. Key
DX personnel, selected as individuals responsible fordriving DX activities in each division, have been deployed
across the company. The purpose of this is to strengthen
information sharing across divisions to optimize various
company-wide activities. Following that, several task teams
have been launched under the Tokuyama DX Project,which consists of eight categories, such as manufacturing,R&D and supply chain, and so forth.
For example, one goal of “Manufacturing DX” ischanging from conventional factories to “smart factories.”
Realizing this transition requires stable operations andefficient planning without the know-how of experienced
employees. Analysis of accumulated operational datafrom the plants is a first step towards this scenario.
Furthermore, the Company is also working to introduce
image recognition technology and AI for early detection ofabnormal conditions in plant operations.
One task, to strengthen data linkage throughout theentire supply chain, has already been started to improve
quality traceability from raw materials to finished products.
This measure is important from a quality assurance
perspective to meet customers’ requirements, and canalso be a trigger to make strategic proposals to customers.
“Workstyle DX” aims to create an efficient and flexible
environment for employees through shifting to paperlesswork from conventional formats. The key purpose of thisshift is not only introducing digital tools, but also realizing
ideal working conditions through all possible means. In
addition, a DX education program is being planned to help
train all employees to actively participate in these activities.
In “R&D DX,” development of new materials has
been started using materials informatics (MI), which has
generated some remarkable achievements in fields suchas semiconductors. In addition, digitization of experimental
data is contributing to research efficiency, because it canincrease collaboration among researchers which may thenlead to innovations in R&D areas.
Tokuyama also obtained certification as a “DX
certified business operator” by the Ministry of
Economy, Trade and Industry in January 2022.

Tokuyama DX Project : Structures and Measures
Project owner: President

Steering committee:
Executive Committee members

Corporate PMO：DX Promotion Department
Relevant departments

PM: General Manager,
Corporate Planning Division

Tokuyama DX ProjectWorkstyle DX Project

Corporate DX Project

R&D DX Project

Enhancement of working environment andimprovement of work operations for employees

Improvement of management efficiency, risk management,
and governance of Tokuyama Group

Acceleration ofvalue creation

Manufacturing DX Project

SCM DX Project

Shifting to smart factories utilizing data and digital tools

Optimization of supply chain operations related to purchasing,
manufacturing, shipping, and sales

Business Innovation Project

Building business models
with DX approach

26

Coordination of IT requirements of each project

Other DX activities in Tokuyama Group

Digital Platform Project

Promoting digital education,
AI utilization,and other activities in Group

Supporting promotion of each projectfrom IT perspectiveEnhancement of working environment andimprovement of work operations for employees

Improvement of management efficiency, risk management,
and governance of Tokuyama Group

Acceleration ofvalue creation

Manufacturing DX Project

SCM DX Project

Shifting to smart factories utilizing data and digital tools

Optimization of supply chain operations related to purchasing,
manufacturing, shipping, and sales

Business Innovation Project

Other DX activities in Tokuyama Group

Digital Platform Project

Promoting digital education,
AI utilization,and other activities in Group

Building business models

Supporting
promotion of each projectwith DX approach
Strengtheningof New Business
Promotion
Systemfrom IT perspective

The New Business Division has been established for the
purpose of speedily launching new businesses in growthbusiness areas. Based on Medium-Term Management Plan
2025, three themes to strategically address were selected,
and groups handling the creation of businesses for eachtheme were then established in the Division in April 2022.
Each business creation department is currently focused
Corporate Planning
DivisionTokuyama Value Creation

Coordination of IT requirements of each projecton efforts aimed at the establishment of business models
and commercial distribution. Furthermore, the Marketing
Department of the Research & Development Division iscontinuing to set and narrow down new development
themes combining Tokuyama’s unique technologies withmarket needs.

New Business Div.
Develops and creates business for the world’s highest level of low power consumption alkaline
water electrolyzer units based on the know-how cultivated in the salt water electrolysis business.

Biomass Business Dept.

Aims to create business with a view to internal use and external sales through stable procurementof biomass fuel. At the same time, it secures black pellets and develops manufacturing technology.

Thermal Material Business
Dept.

Aims to create business for intermediate and downstream products meeting the needs of users
from raw materials for nitride ceramics, mainly substrate materials with high thermal conductivity
for power semiconductor modules.

Growth Strategy

Electrolysis Business Dept.

Socially Responsible Management
and Governance

Establishment of a Human Resource Development Platform
plans and a human resource development system matching
the medium- to long-term business strategy centeredon the Personnel Policy. When establishing these, ideal
images of the desired personnel and the necessary skills
were organized by job type and department, and publishedwithin the Company. This includes not only individual skill
improvements, but moreover can be utilized as a guideline
for skill development required for future career advancement.
Going forward, in addition to tier-based training in linewith the human resource development system, we plan toimplement global human resource development training for
all employees as well as video-based training.

■
Progress of Medium-Term Management Plan 2025

In order to steadily execute the transformation of thebusiness portfolio and provide solution-based products
a n d s e r v i c e s i n t h e g l o b a l m a r k e t , To k u y a m a h a s
formulated a human resource development policy enabling
the embodiment of the “four values” set forth in the new
Vision.
To begin with, what is expected of employees andthe direction of growth were established as our Personnel
Policy in 2019. This policy is positioned and utilized as thesource of the basic principles for the revision and operationof the personnel system.
In FY2021, we focused on the establishment of career➡P2 “Tokuyama Value Creation”

Human Resource Development Platform
Formulated in 2019
(1)
Personnel
PolicyPersonnel Policy

A total of ten provisions specifying a vision of what the Company
requires and expects of employees handling the survival, growth anddevelopment of the Tokuyama GroupFY2021 Initiatives(2) Career plans(3) Human resource
development system(4) Individual education and training regimen

Creation of career plans

・Definition of the desired human resource image and the necessary
skills and qualifications (for each job group)a. Recommendation guidelines for promotion of senior-level employees and managers
b. Human resource development guidelines

Human resource development in line with career plans

・Acquire multiple advanced skills required for the execution of duties
through on-the-job training
・Encourage human resource growth by using off-the-job training to
supplement skills difficult to acquire through on-the-job training
・Acquire public certification and language skills through personal development

27

Progress of Strategy by BusinessElectronic Materials
Push forward with globalization, and capture top share in
the high-purity and thermal management materials fields
supporting the miniaturization and stacking of semiconductors

Business
Goal

Priority Measures

Quantitative Targets● Pursue aggressive expansion in overseas markets● Develop new applications, expand product portfolio● Produce high-quality products, pursue analysis
technology■Net sales(Billions of yen)

■Operating profit

102.0
74.9

61.7

FY2020 results*

20.0

7.2

7.1

FY2021 results

FY2025 targets*F Y2020 net sales are approximate amounts based on application of “AccountingStandard for Revenue Recognition,” etc., and are listed as reference values

SWOT Analysis

・Superior quality in semiconductor-related products
・U nique technologies for increasing purity such as proprietary nitride
reduction process (thermal management materials) and direct
hydration method (IPA)
Strengths ・High market share in thermal management materials

S

Weaknesses

W・Promotion of 5G and IoT, increased demand for data centers
・Growth in semiconductors due to increased functionality of electronic
devices, larger memory capacity and electrification of vehicles
・Increased level of quality requirements from users associated with
Opportunities advancement of miniaturization and stacking

OT

Threats

・L ack of marketing capabilities
in global expansion

・N ew entry of overseas
manufacturers
・Technological innovation insemiconductor market

Progress by Product Area
Product Area

FY2021 Results

Silicon・Invested in increasing quality ofsemiconductor-grade polycrystalline ・Enhance capacity for high-purity chlorosilanes and expand in Asia
siliconSilica・Increased provision of surfacetreated products・Invest in enhancement of surface-treated silica
・Expand CASE* and personal care applications
・Enter organic silicone field

ThermalManagement
Materials

・Completed construction of silicon
nitride production facilities

・Launch silicon nitride products
・Expand sales of silicon nitride and boron nitride
・Develop new applications and enter downstream fields

IC Chemicals

・Concluded JV agreement in South
Korea

・Expand Taiwan and South Korea JV facilities, and other global facilities* Coatings, adhesives, sealants, and elastomers

28

Future Plans and Investments

Advancements Aimed at Commercialization of Silicon Nitride

Making hybrid proposals and invigorating new developmentwith a lineup of three types of high heat dissipation andhigh insulation material
As a new lineup in the thermal management materials
field, we are engaged in the commercialization of silicon
nitride, expected to be used in insulated substrates for
power semiconductors in EVs and so forth. Tokuyama’s
silicon nitride helps disperse heat from power
semiconductors and insulates several kilovolts of highvoltage, contributing to the extension of driving range
and the enhancement of durability. Furthermore, as EVs
call for components that contribute to the reduction ofenvironmental impact, we believe our products will bechosen by the global market due to our unique, energyefficient manufacturing processes that do not use anyorganic solvents.
In July 2021, we completed the construction of
manufacturing facilities for silicon nitride within theCenter for Commercialization of Advanced Technology.
We aim to provide a stable supply of products byproviding integrated production, from high-purity powder

Tokuyama Value Creation

FOCUS
SatoruWakamatsu

General Manager,
SIN Department,
Electronic Materials
Business Division

Growth Strategy

used as raw material to ceramic substrates. At present,
we are scaling up from small-scale batch development
units to mass production units in an effort to establish
advanced environmentally-friendly manufacturing
process technology.
Tokuyama has already commercialized aluminum
nitride and boron nitride. With a lineup consisting ofthese plus silicon nitride, we believe we can form asystem able to produce hybrid proposals for a variety
of issues faced by customers. By continuing to meetcustomer expectations that “Tokuyama has everything
we need” and “This company will find the answer if we
ask them,” we should be able to determine the needs
and wants that provide hints for new products. Goingforward, we will continue to focus on the development oftechnology based on changes in the world and market
needs, while embracing the challenges presented by
cutting-edge businesses.

Socially Responsible Management
and GovernanceMarkets for Power Semiconductor Materials and Thermal Management Materials by Application
Already Adopted

Ongoing Customer Evaluation of Developed Products

Silicon Nitride(thin ceramic substrates)
ConsumerElectronics

Mobile devices(thick ceramic substrates)

High-brightness LEDs
(headlamps)

Electric power grid equipment/
electric railways

Wind power generation
Solar power generation

Heat dissipation
substrates for LiDAR(radar devices)
Aluminum nitride(thin ceramic substrates)

Semiconductor manufacturing
equipment, for memory and logic chips

High heat dissipation
ceramic substrate

Ceramics

Thermal management
materials for
EV/PHV/HEV batteries
Data centers

Mobile basestations

EV
PHV
HEV

Progress of Strategy by Business

Charging facilities anddistributed power supplies

EV/PHV/HEV
inverters

Industrial motors■

Aluminum Nitride

Professional-use
SocialInfrastructure

Boron Nitride(shift from alumina)

Aluminum nitride(shift from alumina)

Heat dissipation filler

Heat dissipation filler

Low speed and low frequency

High speed and high frequency

High voltage and high current

Low voltage and low current

Strengths Supporting the Silicon Nitride Business
Strengths Cultivated in the Polycrystalline Silicon Business・Silicon materials (high-purity silicon, metallurgical grade silicon)
・Various silane materials
・Semiconductor market information
・Silica manufacturing and surface treatment technology
・Large-scale plant technology

Strengths Cultivated in the Aluminum Nitride Business・High-temperature sintering technology
・Powder analysis technology
・Thermal management material market information
・Powder manufacturing and control technology
・Sintered substrate manufacturing technology

29Life Science
BusinessGoal

Use unique technology to capture top niche share in areas
where differentiation is possible (vision, dental, diagnostics)

Priority Measures

Quantitative Targets● Expand product portfolio for health/pharmaceuticalapplications● Develop new applications for unique biaxially-oriented
microporous film, expand Shanghai site● Accelerate overseas expansion of cosmetics materials,
supplements and other healthcare products, develop new
product areas● Accelerate development of diagnostic reagents throughchemical integration, establish new alliances, and expand
testing areas

SWOT Analysis

S(Billions of yen)

■Net sales■Operating profit

46.0
33.5

28.5

3.4
FY2020 results*

7.5

6.0
FY2021 results

FY2025 targets*F Y2020 net sales are approximate amounts based on application of “AccountingStandard for Revenue Recognition,” etc., and are listed as reference values

W・Unique product and technology development
・Lack of marketing capabilities and weak sales
capabilities based on chemical technology
system in overseas markets
・Able to swiftly respond to specific user requirements
through close coordination of sales, manufacturing
Strengths and development
WeaknessesO・G rowth of healthcare due to advent of superaging society and heightened health awareness・E xpansion of emerging markets in Middle East,
Asia and South America

Opportunities

T・Rise of emerging manufacturers centered in South
Korea and China
・Destabilization of supply chain such as procurementof raw materials, production outsourced overseas,
Threats
and product exports due to instability of global affairs

Progress by Product Area
Product Area30

FY2021 Results

Future Plans and Investments

Fine Chemicals

・Strengthened facilities for plastic lens-relatedmaterials
・Strengthened quality management forpharmaceutical ingredients

・Aim for 25% global share of plastic lens-related materials
・Accelerate overseas expansion for cosmetics materials,
supplements, veterinary products, etc.

Dental Materials
and Equipment

・Advanced global provision of composite
resins led by OMNICHROMA (5% share in US,
overseas accounting for 65% of sales)
・Boosted production facilities

・Further penetration of brands, accelerate overseas salesof OMNICHROMA series

Diagnosis

・Established local subsidiaries in China andSouth Korea for expansion of sales

・Through alliances, aim to become No. 1 OEM supplier for
open, automated bioanalytic testing systems
・Expand diagnostic items through reagent development

International Expansion in the Dental Area

Mikio Kimura

Capture growing demand in the global market whileproviding value not offered by competing products

General Manager,
Marketing Department,
Tokuyama Dental
Corporation

the production capacity of the Kashima Factory
tenfold over the next five years.
Going forward, we intend to capture growing
demand by actively expanding to countries expected
to see population growth, such as India and Brazil,
while seeking to increase the company’s brandpenetration in the global market.

Percentage of Overseas Sales
(%)
70

65

60
50

46

54

50

50

60

57

58

Socially Responsible Management
and Governance

50

40

40
30

2012

2013

2014

2015

Future of Preventative Medicine and Diagnostic Systems

Promoting research in areas combining biochemistry andchemistry to create unprecedented new products

2016

2017

2018

2019

2020

2021 (FY)

Tatsuhisa
Watanabe

Chief Executive
Officer,
A&T Corporationand evaluation of test data to contribute to regional
medical networks and preventative medicine.
We a re a l s o a c t i v e l y e x p a n d i n g a u t o m a t e dbioanalytic testing systems overseas in response
to growing global needs for clinical testing. A&T
p ro d u c t s , h a v i n g m e t n e e d s f o r a c c u r a c y a n dincreased speed of tests with high performance, arealready recognized as a top brand in South Korea.
A local subsidiary was also established in China in
2021. Strengthening alliances with local companies invarious countries and regions will enable us to provide
sound customer support more swiftly.
When we became a wholly-owned subsidiaryof Tokuyama in February 2021, we strengthened
coordination between Tokuyama’s Tsukuba ResearchLaboratory and our Development Division. Goingforward, we will promote research in areas combining
biochemistry and chemistry with the aim of creating
unprecedented new products.

■
Progress of Strategy by Business

A&T conducts business related to clinical testing
carried out in hospitals. Since the company was
founded, we have consistently worked on development,
manufacturing and after-sales support for products
essential to processes including the acceptance andautomated transportation of specimens, analysis anddata processing. The know-how for centrally managing
and utilizing information generated in each process,such as the state of specimens and analysis data, andcomprehensive consulting capabilities are strengths that
other companies simply do not have.
In Japan, there has been a prominent expansionof medical expenses associated with the aging ofsociety. Furthermore, no time can be lost in handling
qualitative changes in home medical care and nursing.
One method leading to the resolution of such issues
is the analysis and utilization of clinical test data.
We believe we will be presented with new business
opportunities by using our know-how on analysis

Growth Strategy

Efforts have been made to shorten treatment timeand reduce costs in dental care in recent years due tothe spread of COVID-19 infections. For this reason, I
feel there has been heightened demand for products
enabling the simplification of clinical tasks andoperations.
Tokuyama Dental has positioned OMNICHROMA,a filling material for teeth after treatment of cavities, as
one of the pillars for driving growth. Its ability to blend
with any color of tooth simply by filling and hardening
eliminates the time required by dentists to selectfilling material, and also provides value not offered bycompeting products, such as the effect of reducing
inventory costs. Overseas markets such as Europe
and the United States account for 65% of Tokuyama
Dental’s net sales (FY2021), and we plan to raise thislevel to 75% by 2026. Furthermore, we are currently
making large-scale capital expenditures to increase

Tokuyama Value Creation

FOCUS

31

Eco BusinessBusiness
Goal

Serve as a new business pillar for the future

Priority Measures

Quantitative Targets● Respond to increasing demand for water treatment
membranes due to strengthened environmental
regulations■Operating profit

18.0
10.3

8.8

● Expand resource recycling business in waste gypsum
board, photovoltaic modules and others● Commercialize developed next-generation energy
technologies■Net sales(Billions of yen)

(0.3)
FY2020 results*

1.5

(0.4)
FY2021 results

FY2025 targets*F Y2020 net sales are approximate amounts based on application of “AccountingStandard for Revenue Recognition,” etc., and are listed as reference values

SWOT Analysis

S・U nique technologies such as continuous large
recrystallization technology for gypsum and ion
exchange membrane water treatment technology

O・Increase of wastewater treatment demand due toenvironmental regulations in China and emerging
countries
・Growing global environmental consciousness

Strengths

W・Weak synergies among businesses

Weaknesses

Opportunities

T

Threats

・R ise of emerging manufacturers centered in
China・Appearance and practical implementation ofalternative technologies

Progress by Product Area
Product Area

32

FY2021 Results

Future Plans and Investments

Environment

・Waste gypsum board recycling: Decided to establish
third facility in Muroran City, Hokkaido
・Photovoltaic module recycling: Continued joint
research with NEDO

・Waste gypsum board recycling: Expand business sites
・Photovoltaic module recycling: Establish andcommercialize recycling technology

Ion Exchange
Membranes

・Conducted market research aimed at increase of sales ・Boost production capacity to meet increase inin overseas areas
demandOutlook for the Waste Gypsum Board Recycling BusinessContribute to the formation of a closed-loop society
through waste gypsum board recycling technology andpromoting its use

Representative
Director and President,
Tokuyama Chiyoda
Gypsum Co,. Ltd.

of technology. Going forward, it is expected that it
will become difficult to obtain low-cost byproductg y p s u m a s t h e re d u c t i o n o f c o a l - f i re d p o w e r
generation accelerates. That means the environmentis becoming more receptive for the commercializationof recycled gypsum. We intend to continue to pursue
technologies and business formats that contribute to
the formation of a closed-loop society in the future.
Gypsum board
Recrystallized
recycled
gypsumpowderPromotion of testing and research for commercialization
based on unique technology enabling recycling into
sheet glass

Waste gypsum
board

Socially Responsible Management
and Governance

Development of Photovoltaics Module Recycling

Masaru Sasai

Manager, Eco-Business
Development Department,
Eco Business Divisionconsist of both inorganic and organic matter, froma chemical perspective. At present, a testing facility
has been established in the Nanporo Industrial Parkin Hokkaido, and testing and research with the aim ofcommercialization is being conducted through joint
research with NEDO*2.

■
Progress of Strategy by Business

The solar power generation systems initially introducedwith the commencement of the FIT scheme* 1 are
anticipated to generate large volumes of waste fromused modules in the 2030s.
Photovoltaics modules are made up of 60% glass
by weight. Technologies already exist for reusing thisglass portion as glass wool and pavement material,
and these have also been commercialized. However,these applications lack the capacity to accept
recycled glass, meaning there is a need for technology
enabling recycling into sheet glass.
Recycling business operators handling recycling
into products such as glass wool primarily use
equipment for mechanically crushing glass. However,this method is unable to recycle materials into sheet
glass, which does not allow contamination by evensmall amounts of cells or organic matter. To address
this, Tokuyama has developed an innovative separation
method for photovoltaics module materials, which

Tomohiro Inoue

Growth Strategy

Gypsum board, a construction material that islightweight and offers excellent heat insulation, had
the shortcoming of the technical difficulty it presented
after the dismantling of buildings, and the percentageof recycling had remained low. Tokuyama Chiyoda
Gypsum responded by developing technology for“continuous large recrystallization” enabling use of
100% of waste gypsum powder as board material
again, and has been operating a recycling businesssince 2013.
Demand is steadily growing, and following thefactories in Mie and Chiba, a third factory will becompleted in Muroran City, Hokkaido in FY2023. From
2024, we plan to build small factories in the vicinity ofregional cities, to serve as “urban mines for gypsum.”
In recent years, we have received inquiries
from overseas board manufacturers, and we areproceeding with discussions including the provision

Tokuyama Value Creation

FOCUS

*1 A
 feed-in tariff scheme for electricity generated from renewable energy sources*2 New Energy and Industrial Technology Development Organization

Module Structure

Module Composition by
Weight Electrode material
Aluminumframe
Cover glass
Encapsulant
(EVA)
Cell
Encapsulant(EVA)
Backsheet(copper, solder)

Plastic(EVA, etc.)

0.8%

17.7%

Junction box
Frame (aluminum)

Source: NEDO PV Challenges 2020

15.7%

Cell
(crystalline silicon)

3.4%

Front cover(glass)62.5%

33

Chemicals
Business
Goal

Ensure stable earnings in the existing businessPriority Measures

Quantitative Targets● Engage in innovative, sustainable and environmentallyfriendly manufacturing processes(Billions of yen)

■Net sales

101.4■Operating profit

85.0

79.6

● Improve electrolyzer unit energy efficiency to world-classlevels, reduce CO2 emissions through energy saving● Improve manufacturing processes and supply chainsthrough promoting DX

13.5
FY2020 results*

13.5

14.2
FY2021 results

FY2025 targets*F Y2020 net sales are approximate amounts based on application of “AccountingStandard for Revenue Recognition,” etc., and are listed as reference values

SWOT Analysis

S・Only domestic manufacturer of soda ash
・E lectrolyzer unit, electrolysis and manufacturing
technology with extensive operating record

O・S pread of fuel cell vehicles and promotion ofhydrogen society
・Increase in demand for caustic soda and PVC resin
due to economic growth in Southeast Asia and India

Strengths

W・Weak sales network overseas
・Sales volume of calcium chloride for antifreeze
fluctuates depending on weather conditions

Weaknesses

Opportunities

T・D ecrease in domestic demand due torecession of Japanese economy and users
shifting overseas
・D ecrease in demand due to slowdown ofThreats
Chinese economy

Progress by Product Area
Product Area

34

FY2021 Results

Soda Ash
and Calcium
Chloride・Maintained competitiveness through establishment of
stable supply system

Chlor-Alkali
and Vinyl
Chloride・Strengthened group coordination

Future Plans and Investments

・Maintain and update facilities needed for stablebusiness continuity
・Advance energy saving and rationalization to addressenvironmental issues

Energy Saving Initiatives in the Electrolysis Business

Further refining ion exchange membrane electrolysis
technology using proprietary “zero-gap technology”

Chemicals Business
Division
Chemicals Manufacturing
Department 1
Manager, Technical Section

technology at each important juncture, such aschanges in manufacturing methods, since operations
began in 1952. Since 1985, we have been utilizing
ion exchange membrane electrolyzer units using
Tokuyama’s proprietary “zero-gap technology.” This
technology uses the force of flexible cushion material
being compressed and reacting to bring the anode,
ion exchange membrane and cathode comprising
an electrolyzer unit as close together as possible.
By limiting the electrical resistance between thesecomponents, it is possible to significantly reduce
power consumption. Furthermore, Tokuyama also
licenses the electrolysis process using this ion
exchange membrane method, contributing to raising
the level of energy saving worldwide.
Going forward, we will continue to engage in thedevelopment of the world’s highest level of energysaving technology with the aim of further reducing
energy use while maintaining stable product supply.

Socially Responsible Management
and Governance

Development and Applicationof Unique Technologies

Hajime Okido

Growth Strategy

The brine electrolysis business Tokuyama has been
operating since 1952 is a business that createscaustic soda, chlorine and hydrogen through theelectrolysis of brine. In addition, the Company also
produces the primary chlorides of hydrochloric acidand sodium hypochlorite, as well as substancessuch as ethylene dichloride, a raw material of PVC
resin. A common trend in the chemical industry is abusiness structure concentrated on a specific chlorine
derivative. However, Tokuyama has establisheda structure that minimizes the impact of trends indemand for specific products by manufacturing awell-balanced set of products created through theprocess of electrolysis. We take pride in playing animportant role in the improvement of people’s lives
and the development of industry using these basic
materials essential for society.
In the electrolysis business, we have vigorously
proceeded with development of energy-saving

Tokuyama Value Creation

FOCUS

Development of an Alkaline Water Electrolyzer Unit
Furthermore, using the knowledge gained in thebrine electrolysis business, we are focusing on thecreation of a solution business including operational
support for hydrogen production plants planned byclient companies, rather than simply selling equipment.

■
Progress of Strategy by BusinessH y d ro g e n i s g a i n i n g a t t e n t i o n a s a m e a n s f o rachieving decarbonization. Tokuyama is currently
working on development and commercialization ofan alkaline water electrolyzer unit for manufacturinghydrogen and oxygen using an alkaline solution andelectric power. This device utilizes the structure of thebrine electrolyzer units applying Tokuyama’s “zero-gap
technology.”
A variety of hydrogen projects are currently under
way worldwide. The Company is proceeding to develop
the device with the aim of contributing to the area ofhydrogen production by achieving the highest possiblelevel of energy saving performance. It is forecast thatthe rate of use of renewable energy as a power source
will increase in the future, but one of the challenges withrenewable energy such as solar power is that the volumeof power generated tends to fluctuate. To address thisissue, we are also proceeding to develop technology
enabling stable operation using renewable energy.

Characteristics and Effects of Tokuyama’s
Alkaline Water Electrolyzer unit
Characteristics

Effects

Zero-gap
technology

・Reduction of power consumption

Large currentcarrying area

・Increase of volume of hydrogenproduction per unit of site area
・Reduction of equipment cost

Operational knowhow gained inbrine electrolysis

・Reduction of equipment cost・Longer life of cells
・Operational and maintenance technicalsupportExtensive
operating range

・Improvement of adaptivity to fluctuatingenergy35

Cement
Business
Goal

Become the domestic industry leader in energy efficiency

Priority Measures

Quantitative Targets● Introduce energy-saving equipment to reduce CO2
emissions■Net sales(Billions of yen)

50.8

■Operating profit

56.0

50.3

● Reduce use of coal by increasing combustion
amount of waste plastic
4.3
FY2020 results*

3.5

(1.9)
FY2021 results

FY2025 targets*F Y2020 net sales are approximate amounts based on application of “AccountingStandard for Revenue Recognition,” etc., and are listed as reference values

SWOT Analysis

S・Contribution to environmental preservation by
accepting waste from inside and outside Company
to use as cement feedstock and as thermal energy
alternativeO・D omestic demand due to national resilience andLinear Chuo Shinkansen plans・D emand for establishing infrastructure associatedwith economic development of emerging countries

Strengths

Opportunities

W・I ncrease of repair costs due to aging offacilities

Weaknesses

T・D ecrease in domestic cement demand due todecline in population
・R ising material and logistics costs
・C riticism of cement industry due to problems
Threats
with CO 2 emissions

Progress by Product Area
Product Area36

FY2021 Results

Cement・Conducted carbon capture field tests

Recycling・Expanded acceptance of waste such as shredder dust fromautomobiles and discarded home appliances

Future Plans and Investments

・Maintain and update facilities needed for stablebusiness continuity
・Advance energy saving and rationalization toaddress environmental issues
・Expand waste treatment that contributes to aclosed-loop society

Expansion of Acceptance of Industrial Waste

We have a vision for unprecedented commercialization ofrecycling technology while serving as a vein for domestic
industry

General Manager,
Recycling & Environment
Promotion Department,
Cement Business
Division

intake of combustible waste serving as a source ofalternative thermal energy, such as shredder dust fromautomobiles and discarded home appliances, organic
sludge and waste fluids. In addition, we also aim to be
an industry leader in terms of cost competitiveness byintroducing the latest technology pursuing high energy
efficiency. Looking ahead, we will utilize our uniquenessas a company operating both cement and chemicalbusinesses to commercialize recycling technologies
that are not used by the cement industry or dedicatedenvironmental companies, and turn these into newpillars of revenue.
Types of Waste AcceptedSocially Responsible Management
and GovernanceWaste plastics, sludge, glass waste, concrete waste, ceramic
waste, soot and dust, waste fluids, cinders, slag, rubble,
animal and plant residues, incinerator ash, contaminated soil,
disaster waste, shredder dust from automobiles

The Optimal Solution for the Problem of Aging Infrastructure

Strengthening the joint development system with
Tokuyama to create products that contribute to the repair
and reinforcement of social infrastructure

Takashi Asada

Representative
Director and President,
Tokuyama MTech
Corporationmaterial, is more adhesive than organic paint or sheets
and also suffers little deterioration from ultraviolet rays,
providing excellent durability. In addition, we provide awide range of repair and reinforcement solutions, with alineup including floor concrete containing organic fiber
offering advantages such as reduced construction timeand not requiring steel reinforcement.
Much of the knowledge accumulated by Tokuyama
through years of research and development on
cement, concrete and chemistry can be applied tothe development of new products in businesses ourcompany is focusing upon. We have already begun
to produce results in the areas of concrete surface
protection and grouting. Going forward, we aim
to produce products with high added value whilestrengthening the joint development system of our two
companies.

■
Progress of Strategy by Business

Implementing measures to maintain and prolong the lifeof social infrastructure fasing significant deterioration
due to age, such as bridges, underground conduits andconcrete structures, is one of the most important issues
faced by Japan. Moreover, repair and reinforcement worksites require skilled workers, environmental measuresagainst dust, and so on, in addition to shortening work
periods and increasing work quality. To address theseissues, Tokuyama MTech provides special vehicles (plantvehicles) with equipment such as powder silos, forced
mixing type mixers, and mortar pumps. Mixing powder
to provide high-quality slurry* 1 on-site enables rapid
repair and reinforcement, contributing to maintaining andprolonging the life of social infrastructure.
Our company is focusing on concrete surface
protective agent as a product that will increase thelong-term durability of concrete structures. Our
concrete surface protective agent, which uses sodium
silicate cullet* 2 manufactured by Tokuyama as a

Atsuhide Sato

Growth Strategy

Tokuyama’s Cement Business Division has a history of
being the earliest in Japan to engage in industrial waste
recycling. In the past, the byproducts generated within
the company were used as cement feedstock, but wenow accept a large volume of waste from outside thecompany as well, and utilize it as recycling material.
In 1999, we established a plant able to process
large volumes of waste plastic recycled as alternative
fuel, and began full-scale operation of the business.
Since then, we have sought to diversify the waste
handled through group management. Examples
include our business converting ash from incinerationof municipal waste into cement feedstock by removing
dioxins and chlorine, and our waste gypsum board
recycling business. As a vein for domestic industry, wetake pride in playing a part in a closed-loop society
while resolving customers’ waste processing issues.
At present, we are focusing on expanding the

Tokuyama Value Creation

FOCUS*1 Fluid containing powder suspended in liquid*2	High-concentration aqueous solution made by dissolving glassy solids using an
autoclave, etc.; used in civil engineering applications such as ground reinforcement
and leak prevention, and in various areas as material for industrial chemicals

37

Materiality KPIs and Results
Vision:1 B e a value-creative company that places first priority on R&D

and marketing

Materiality
Relationship to Our VisionHelping to fightglobal warming

1

2

Conserving theenvironment

4

Preventing accidents
and preparing fordisasters

3

4Developing products
and technologies that
address social issues

1

2

Improved chemical
management andproduct safety

4

Engaging with local
communities

4

Promoting CSR
procurement

4

Developing humanresources

2

38

3

Our FY2025 Vision

2 B e a company that never stops challenging new domains whilerefining and exploiting its unique strengths

KPI• Achievement of carbon neutrality by
FY2050• Reduction of total CO2 emissions of Tokuyama Group: 30%
reduction in FY2030 (compared with FY2019)• Increased disclosure information, including Scope 3• Promotion of recycling andmaintenance of zero landfill waste• Maintenance of low emissions ofenvironmental impact substances• Compliance with legal requirements
and other regulations, achievementof zero environmental accidents• Contribution to biodiversity
conservation• Reduction of environmental impact:· Effective utilization rate for waste ≥94%
· Zero waste emission rate ≥99.9%· Maintenance of low emissions of environmental impact
substances• Compliance with legal requirements and other regulations,achievement of zero environmental accidents• Contribution to biodiversity conservation• Accident prevention and disaster
preparation• Improvements in process safety
management level• Fostering and improvement of safety
culture• Zero accidents and zero lost time injuries; number of incidents:zero• Deepened risk assessment• Promotion of smart security• Expansion of development of
products and technologies that help
to resolve social issues, focusing on
SDGs

Promotion of development of products and technologies that help
to resolve social issues, focusing on SDGs
[Electronics] Expansion of product line and creation of new
business in peripheral materials[Healthcare] Creation of new technologies for product line
expansion and globalization[Environment] Creation of new technologies to reduce CO2 emissions• Maintenance of appropriate chemical
management and promotion of
product safety in the TokuyamaGroup• Compliance with chemical laws and regulations in each country:
Zero infractions of chemical-related regulations• Risk management of chemical products, including Group: Zeroaccidents due to product safety• Contribution to a decentralizedsociety through business• Providing a place where people cangrow and flourish• Harmoniously co-existing and cooperating with communities:· Dialogue with community· Active participation and cooperation in various community(residents, government, and organization) events• Solutions to community issues and contributions to sustainable
development of community:· Employment from community· Social contribution activities· Contributions to community through business• Management of supply chains basedon CSR procurement guidelines• Promotion of survey and management of supply chains basedon CSR procurement guidelines:· More detailed investigation of suppliers by refining
assessment sheets stablishment of system to conduct on-site audits of suppliers·E· Reduction of environmental impact in logistics• Development and strengtheningof human resources as source ofcorporate competitiveness• Strengthening of human resources
for next generation• Activation of human resources through career planning androtation of appropriate personnel: Improvements in education
system, etc.
· Development of next generation of managers· Training of highly skilled engineers to support businessexecution· Enhanced initial training system by defining required humanresources and job skills• Establishment of culture of nurturing through work by linking goal
setting and feedback: Surveys based on employee attitudes

For detailed information on our activities, please refer to the CSR page of Tokuyama’s website.
https://www.tokuyama.co.jp/eng/csr/

3 B e a company with healthy employees who have healthy families andtake pride in their work at their company

4 B e a company that fosters bonds with people in communities andsocieties worldwide• Promoted coordination with regions, local governments and within Shunan Industrial Complex aimed atcarbon neutrality• Considered introduction of alternative fuels such as biomass• Acquired third-party certification of GHG emissions (Scope 1, 2 and 3)• Responded to CDP Climate Change Questionnaire (Score: A-)

Responsible Department

Carbon Neutral Strategy Division
Responsible Care Management
Department
Factory Planning and
Administration Department• Number of accidents: 4• Occupational accidents Employees: 0 Contractors: 3• Created security skill maps, carried out VR hazard simulation training and disaster prevention training• Implemented process risk assessment and began evaluation of equipment risks using new evaluation
techniques• Promotion of smart security: Matched latest ICT skills with workplace, utilized drones and considered
conveyor predictive detection system• Maintained Control Class I work environment, continued all I-A at Tokuyama Factory

Responsible Care Management
Department[Electronics] Accelerated initiatives aimed at commercialization through marketing originating from customers[Healthcare] Decided to commercialize products based on multiple themes[Environment] Promoted Medium-Term Management Plan 2025 strategies, prepared for creation of businesses
based on multiple themes

Research & Development Division• 68 product reviews (second and third rounds), 396 labeling reviews• Understood and responded to domestic and overseas regulatory trends (Japan and overseas)• Conducted interviews with departments and Group companies regarding training and management status• Created management system for chemicals contained in products

Responsible Care Management
Department

Materiality KPIs and Results• Resumed new business leader training• Defined required image and skills for 13 job groups; published company-wide from April 2022
• Conducted total of 10 training sessions for evaluators (approximately 280 employees); developed deeper
understanding of appropriate goal setting■• Ongoing assessment of business partners using assessment sheets• Created assessment and audit plans from FY2022 to FY2024• Refined assessment sheets because FY2022 is a year for implementing assessments of business partners• Identified materials purchased in specific regions believed to have problems related to labor, human rights
and the environment
Audits of documents to be conducted apart from assessment sheets from FY2022 based on these results

Socially Responsible Management
and Governance

Responsible Care Management
Department
Growth Strategy• Effective utilization rate for waste: 94.3%• Zero waste emission rate: 99.9%• Maintained low emissions of environmental impact substances; efforts underway in each department• Compliance with legal requirements and other regulations, achievement of zero environmental accidents• Forest volunteers, cleanup activities, etc.

[Dialogue with community]• Continued to take steps in dialogue with community using formats to address COVID-19 (dialogue via writing, etc.)• Sponsored Tokuyama Summer Festival and Shunan Winter Tree Festival[Social contribution activities]• Mikage Bunko book program, Tokuyama Chemical Club, and full lighting at Shunan Industrial Complex• Educational support for neighboring schools (work experience for junior high school students, etc.)[Business contributions to community]• Supplied electricity to Shunan City Hall and Tokuyama Station Building (ongoing)

Tokuyama Value Creation

FY2021 Results

General Affairs Department
Environment & Safety
Department
Factory Planning and
Administration Department

Procurement Department
Logistics Department

Human Resources Department

39

Vision:1 B e a value-creative company that places first priority on R&D

and marketing

Materiality
Relationship to Our Vision

Promotion of diversity
and career fulfillment23

Promotion of physical &mental health3

2 B e a company that never stops challenging new domains whilerefining and exploiting its unique strengths

Our FY2025 Vision

KPI• Acceptance and utilization of diverse
human resources• Promotion of diversity and inclusion:· Active promotion of women: 20% of new graduates, ≥2% ofmanagement positions· Employment of persons with disabilities: ≥2.3%· Respect for diversity of experience and skills of each individual· Respect for diverse values• Promotion of work-life balance:· Management of actual working hours per year: annual paid
leave acquisition rate ≥80%
• Improved childcare and nursing care support systems:· At least one male employee on childcare leave or parental
leave ≥75% (women ≥75%)

Cultivation of physical & mental healthof employees and their families,
and creation of worker-friendly
environment*• Promotion of cultivating physical &mental health• Promotion of measures to address
lifestyle diseases• Enhancement of individual health awareness: Smoking rate < 15%• Maintaining and lowering percentage of findings:· Regular health consultation rate: 100%
· Re-examination rate: ≥ 90%· Specific health guidance rate: ≥ 80%• Lowering of leave rate: < 0.5%

* Vision modified according to Company’s health management plan

Materiality Identification Process
In 2019, the Company identified nine material topics basedis to continuously conduct activities building a sustainable

on important social issues, dialogue with stakeholders andfuture with society, contribute to the resolution of social

third-party opinions from external experts. In 2021, we revised

issues, increase trust from diverse stakeholders and aim

these in line with the new Medium-Term Management Planfor the enhancement of corporate value. Tokuyama aims to2025 to make a total of ten material topics, and formulated

solidify our trust relationship with society by strengthening ourtargets and KPIs for FY2025.

efforts in material topics, while at the same time pursuing ourOur basic philosophy of socially responsible management

STEP

STEP

2

STEP

3

STEP

4

40

Extract and organize social issues fromthe social requirements and Tokuyama’s
business activities

Order of priority
Decide order of priority based on importanceto stakeholders and Tokuyama

Review by experts
Review order of priority and quantification
based on feedback from outside experts

Very
Important
Importance to Society and Stakeholders

1

Extract and organize issues

own unique approach to socially responsible management.

Conserving the environment

Helping to fight global warming

Preventing accidents andpreparing for disasters

Developing products and technologies
that address social issues

Engaging withlocal communities

Developing human resources

Promoting CSR procurement

Promotion of diversity
and career fulfillment

Promotion of physical &mental health

Improved chemical management
and product safety

Commitment from management
CSR Promotion Council discusses suitabilityof material issues and approves them

Important

Importance to Tokuyama

Very
Important3 B e a company with healthy employees who have healthy families andtake pride in their work at their company

4 B e a company that fosters bonds with people in communities andsocieties worldwide[Promotion of diversity and inclusion]• Continued career hiring incorporating diverse skills and values (54 people in FY2021)• Number of female managers increased by two, reaching target percentage of 2.0%
• Although measures to increase the percentage of people with disabilities progressed, target was not reachedat 1.95%[Promotion of work-life balance]• Continued raising awareness of paid childcare leave (sent e-mails encouraging eligible people and managers
to take leave)• Number of male employees on childcare leave: 2 (average of 83 days)[Respect for human rights]• Established contact system for mandatory steps to prevent harassment, raised awareness in Group
companies and implemented collective training

Human Resources Department[Promotion of measures against smoking]• Prevention of passive smoking, establishment of non-smoking days during working hours (once a month),non-smoking campaign[Health guidance and measures after health diagnosis]• Health guidance and responses to people who fail to undergo follow-ups[Mental healthcare]• Implementation of stress checks, responses and e-learning

Health Care Center

Growth Strategy

Responsible Department

Tokuyama Value Creation

FY2021 Results

Socially Responsible Management
and GovernanceCollaboration with Communities

Tokuyama established You You Terrace (Yu Yu
Terasu in Japanese) within a building adjacent to theTokuyama Factory as a facility for the employment ofpeople with disabilities in October 2021. In addition to
supporting career fulfillment and independence by fully
utilizing the aptitude of each person with disabilities,
its objective is to actively create employment.
The name of the facility in Japanese is derived
from yu (結う, connection), yu (優う, care) and terasu(照らす, to shine) based on the idea of placing
importance on connections, kindly watching overeveryone, and shining a light on the surroundings.

Tokuyama has concluded a J-PPP ESG/SDGs Project
Promotion Partnership Agreement with Renofa
Yamaguchi, a professional soccer team in the J2 League,
for the achievement of ESG/SDGs and the realization ofa sustainable local community through sport.
We will utilize the resources of both Tokuyama
and Renofa for engaging in solutions to issues in thelocal community and promotion of ESG and SDGs, bycoexisting and co-creating with the community andlocal governments through such efforts as the formation
and utilization of a local economy ecosystem and sounddevelopment of the local community through sport.

Tape-cutting ceremony

Materiality KPIs and Results

Conclusion of J-PPP ESG/SDGs Project
Promotion Partnership Agreement■

Opening of “You You Terrace” Facility for
People with Disabilities

Highlighting Tokuyama’s efforts in sporting events41

Message from an External Director

Expediting transformationby helping Tokuyama
make and executekey decisions
Nobuko Mizumoto

External Director, Audit and Supervisory Committee Member

An External Directors' Role

big expectations to meet. Nearly all of Tokuyama’s initiatives

I was appointed to both Tokuyama’s Board of Directors

are related to decarbonization, including not only its energy

and Audit and Supervisory Committee in June 2021. I wastransition plan but also compliance with Japan’s revised

previously an executive at a heavy machinery manufacturer,

Corporate Governance Code, and the listing of its stock

where my roles included head of IT strategy and CSR. I also

on the Tokyo Stock Exchange’s Prime Market. Accordingly,

have expertise in the resource and energy sectors. Drawing

decarbonization is discussed at every Board meeting as an

on my background, I help Tokuyama make and execute

essential topic. I feel Tokuyama must make further progress

key decisions from both DX and GX (green transformation)

in intensively allocating its limited financial, technological andperspectives.

human resources to selected businesses and projects that

Over the year-plus since the inception of Medium-Term

Corporate governance will be important to avoid narrowly

has changed even more rapidly than anticipated. I believe

focusing on internal viewpoints in the process of surmounting thecompanies have to constantly refine and update theirchallenges of transitioning away from legacy business models.

strategies with the mindset that they are essentially facing

Of particular importance is a Group governance perspective

an existential crisis. To successfully navigate today’s adverse

encompassing the entire Group. In this regard, I intend to help

operating environment, it is essential for Tokuyama to carry

lay the groundwork to efficiently implement Group strategy

out the overhaul of its business portfolio makeover that is awhile maintaining the effectiveness of Group governance.

priority under Medium-Term Management Plan 2025. As a

I believe the key to promoting socially responsible

director with an engineering background, I often vet and offer

management, one of Tokuyama’s priorities, is to bothadvice on technological matters while other Board members

contribute to the global environment and stably supply

likewise provide input from their respective standpoints. I

products and services conducive to a sustainable society,feel that the Board thus ensures a diversity of perspectives.

without any contradiction between the two. Such a view

I am fulfilling a dual role by encouraging risk-taking essential

is consistent with Tokuyama’s Mission and essential to theto the portfolio makeover while simultaneously restraining

realization of its Vision.

management from an external perspective.

Sustainable Business Combined with
Contributions to the Global Environment

42

can drive reduction of CO₂ emissions.

Management Plan 2025, Tokuyama’s operating environment

To simultaneously realize a sustainable society andsustainable operations, Tokuyama must also further promote
diversity and inclusion. I expect Tokuyama to develop humanresources that can adapt to an incessantly changing businessWith the decarbonization movement now gaining momentum,

environment, are open to ideas and perspectives different

I believe chemical manufacturers have a large role to play andfrom their own, and are able to take broad-sighted action.

Risk Management

Tokuyama manages risk through the Risk Management andincreasingly advanced, the Company has establishedCompliance Committee, which operates under the CSR

a Cybersecurity and IT Infrastructure Department. The

Promotion Council, as well as through expert committees

Company has also established a business continuity plan

set up separately from this. The Risk Management and(BCP) and other measures in order to ensure an appropriate

Compliance Committee considers events and factors that

response by type and severity in the event of natural

have newly emerged or that have undergone a change indisasters, accidents and other significant crises.

impact, by monitoring social conditions and coordinating witheach committee. It then assesses whether these constituterisks, and determines expert committees to respond to them.
These expert committees deliberate important matters andTokuyama Value Creation

Strengthening Our Risk Management System

Process of Identifying Enterprise Risks
CSR Promotion Council

the perspective of risk management and compliance. In

Risk Management and Compliance Committee

FY2022, a new Sustainability Committee was established to

Identification of risks: Consideration of events and factors

respond to risks that fall outside the scope of existing expert

Growth Strategy

ensure management in critical and specialized areas fromClassification of risks: Determination of expert committees in chargecommittees. The Company has designated a department
responsible for regulations pertaining to management of theAnalysis of risks: Analysis of importancerisk of loss for each committee, which undertakes activities
based on the management regulations.

Expert Committees

It also works to mitigate compliance risk by establishingand regulations that are relevant to business execution, andSocially Responsible Management
and Governance

Response to risks: Implementation of measuresmanagement systems for understanding important laws

Evaluation of risk responses: Review of measuresfor keeping track of trends in amendments to those laws
Direction of risk responses: Management review of significant risks

and regulations. To prepare for changes in the businessenvironment as well as cyberattacks, which have become

Expert Committees and Meeting Bodies in Charge of Risks
Board of Directors

President

Risk Management andCompliance Committee

Financial Reporting Committee

Financial and accounting risks

Fair Trade and Competition
Committee

Risk of violation of antitrust legislation and risk of violation of unfair competition prevention
legislation

Security Trade Committee

Trade control risks (deficiencies in security trade control)

Information Security Committee

Information security risks (cyberattacks, information leaks, system failures, etc.)

Environment Committee

Environmental risks (outflow of hazardous pollutants, noise and odor, illegal disposal or
illegal treatment of waste, etc.)

Safety Committee

Risk of accidents (fires, explosions, leaks, etc.) and risk of workplace accidents

Product Safety and Quality
Assurance Committee

Quality risks (management of chemical substances contained in products, improper or
false labeling, logistics accidents, etc.)

Sustainability Committee

Climate change risks, human rights risks, etc.

Business Continuity Management (BCM)
To ensure the continuation of important operations in
unforeseen circumstances, the Company has formulated,and continues to update, a BCP; it also secures funding andresources to ensure business continuity, and engages inbusiness continuity management in normal times, including
the taking of preventive measures, thereby improving its ability
to continue business operations.
To address the COVID-19 pandemic, the Company set
up a crisis response headquarters with the President as
general manager in February 2020. The headquarters held

Message from an External Director / Risk Management

CSR Promotion Council

Principal Risks Overseen■

Executive
Committee
Strategy
Committee

Expert Committees

meetings 30 times in FY2021. Actions included notification of
instructions issued by the government and industry bodies,
infection prevention measures, and establishment of astructure for contacts and public relations should an infection
event occur. Crisis response measures included acquiring
an understanding of infection responses and status ofproduction at business sites in and outside Japan, as well asrecommending work-from-home and staggered commuting
policies, increasing equipment for teleworking, and imposing
restrictions on entrance to manufacturing sites.

43

Disclosures Based on TCFD Recommendations
Management Involvement in Sustainability

Governance

Risk
Management

Tokuyama positions the issue of climate change as one of

to discuss risks such as climate change, human rights and CSR

the greatest management risks. In February 2021, Tokuyama

procurement, creating a framework for identifying and evaluating

announced its support for the TCFD recommendations,those risks and opportunities across organizations. Particularly

and in April 2021 it established a Carbon Neutral Strategy

important matters are discussed in the CSR Promotion Council

Division, reporting directly to the President. Climate-relatedchaired by the President, and reported to the Board of Directors.

risks and opportunities that have an impact on the Group’s

The Board of Directors confirms the progress of action plans in line

business have been analyzed and reflected in Medium-Termwith quantitative targets established to “contribute to mitigation

Management Plan 2025.

of global warming,” which is a priority issue in both Medium-Term

In FY2022, a new Sustainability Committee was establishedManagement Plan 2025 and future investment plans.

Framework for Promoting Carbon Neutrality
Sustainability Committee

Board ofDirectors

ReportCSR Promotion
CouncilPresident andAll Executive
Officers• Consideration of cross-organization issues concerning sustainability including
climate change• Corporate Planning Division, Corporate Social Responsibility Division, General
Affairs and Human Resources Division, other divisions designated by thecommittee chair

Instruct
Support
RequestEnvironment Committee• Tracking GHG emissions and implementing energy-saving measures• Corporate Social Responsibility Division, Tokuyama Factory, Kashima Factory,
Business Divisions

Climate Change Scenario Analysis (Risks and Opportunities)

Strategy

Medium-Term Management Plan 2025 incorporates risks

a 4°C scenario on a timeline from the present until 2050 bysuch as increased costs caused by carbon pricing, thereferring to the International Energy Agency (IEA) transition

impact of changes in customers’ procurement policies,

risk scenario and the Intergovernmental Panel on Climate

and the impact of changes in the policies of financial andChange (IPCC) physical risk scenario. The Company aims

investment companies on funding, as well as new businessto mitigate climate-related risks by transforming its portfolio

opportunities in the area of the environment. Furthermore,from that of an energy-intensive company to one of a value-

the Company implemented analysis of a 1.5°C scenario andcreative company.

Climate Change Scenario Analysis
Scenario

1.5℃

Event

Impact on the Company

PolicyRegulation

Strengthening ofcarbon tax

Increased operating costs associated with carbon
pricing system(Reference: Base year FY2019 total CO 2 emissions ofapproximately 6.76 million tons)

MarketMarketRecycling
Efficiency
4℃

Risks

Type

Reputation

44

Divisionsand Group
Companies

PhysicalRisk(acute)Request forlarge CO 2
emitters to make
improvements
Penetrationof green
procurement bycustomers
Increasing
demand fromenvironmental
industries
Requests for
CCU-related
products
Increased severityof abnormal
weather,rising sea level

Increase of funding costs associated with requests
and divestment by investors

Opportunities

Countermeasures

Transformation of portfolio into energy-efficientbusiness model
Consideration of introduction of renewable energy

ImpactLarge

MediumIncrease of capital investment associated with requests
for changes in energy-saving manufacturing processes

Execution of planned improvements and capital
investment
Establishment of energy-saving manufacturing
processes

MediumExpansion of waste treatment and resource utilizationindustries, expansion of industries against global
warming

Commercialization of renewable resources andenergy (biomass, hydrogen, ammonia, etc.)

Large

Entry into new business areas through establishmentof carbon recycling systems

Acceleration of research and development, fieldtrials and implementation in actual business

Large

Damage to production equipment due to flooding orwindstorms, delayed production plans and increased
costs due to disruption of supply chains

Expansion of BCP response such as strengtheningof disaster prevention measures and use of
Mediummultiple procurement sources

Business Opportunities in the 1.5°C Scenario
Tokuyama Value Creation

FutureEventsSpread of greenhydrogen

Expansion ofelectrification ofmobility

Rapid
digitalization

Spread of energysaving housing

Rapid increasein demand forwater electrolysis
equipment

Expansion ofdemand for lithium
batteries

Expansion ofsemiconductor
demandIncrease in demand
for functional
materials, e.g.
insulation material

Ion exchange
membranes

Photoresist developer

Business
Opportunities
Products andTechnology

Increase in demand
for recycling ofwaste material andindustrial waste

Polycrystalline silicon
Silica for CMP

Thermalmanagement
materials

High-purity IPA
Thermal management
materials, etc.

Super-insulated,highly-airtight plastic
window sashes
Plaster sheets

Waste gypsum
board recycling
technology
Conversion of
sewage sludge into
biomass

Response to large
quantities of wastefrom photovoltaics
panelsRecycling technology
for photovoltaics
modules

Growth Strategy

Water electrolyzers

Formation of a closed-loop society* Business opportunities in 4°C scenario include cement-type stabilizers required for disaster prevention and disaster mitigation, and diagnostic agents for addressing infectious diseases

Incorporation into Medium-Term Management Plan 2025
Emissionsfrom Energy
Consumption(GHG) emissions, the GHG discharge rate, and the energy
consumption rate. Now, however, it has designated total CO2
emissions as company-wide measurement and performanceindicators in Medium-Term Management Plan 2025, andEmissions fromRaw Materials(limestone)

specified as targets a 30% reduction in FY2030 with FY2019
as a baseline, and the achievement of carbon neutrality in
FY2050. Furthermore, emissions are calculated for categories

Captivepower
plantsZero CO 2 emissions(target of 50% reduction in FY2030)

CementSeek to reduce limestone
consumption

Chemicals

Explore possibility of offsetting
emissions with CCU technologies,
green products, etc. (alreadyunderway)

1 through 7 and 9 for Scope 3, and certification has beenSocially Responsible Management
and Governance

Until now, the Company has managed greenhouse gas

KPIs and Targets

obtained from an external organization.

■➡P17 “Carbon-Neutrality Action Plan”

Disclosures Based on TCFD Recommendations

FY2050 CO2 Emission Reduction Target
Reduction of CO2 from energy[Power Plants] Use biomass/hydrogen (ammonia) as mono-fuel or in combination withother fuels, use local energy[Cement] Increase combustible waste usage[Manufacturing] Increase energy efficiency, improve processes, upgrade equipment❶(70) %

CO 2 emissions:

Reduce CO2 from raw materials[Cement] Increase SCMs, develop calcium recycling technologies[Chemicals] Improve processes

Approx. 6.76
million tons

Green products,
technological innovations

Common for ❶ through ❸❷(10) %

Transform business portfolio
Collaborate with other companies in Shunan petrochemicalcomplex, productively use waste heat
FY2019 (Baseline)[R&D] Develop CCU technologies andgreen products❸(20) %

Goals for FY2050

45

Corporate Governance
Basic Stanceand transparency, maintain the independence of the Boardof Directors and enhance the Board’s oversight function,
accelerate decision-making, clarify responsibility, and strive
for constructive dialogue with shareholders.

Amid the major transformations taking place throughout
society, the Company, in line with the business environment
it faces today, has redefined its Mission as “To createa bright future in harmony with the environment, in
collaboration with its customers, based on chemistry.” This
redefinition incorporates the Company’s desire to contributeto a sustainable society through pursuing business inharmony with the environment and working to create thefuture together with its customers. This is only possible withthe trust and support of shareholders, customers, suppliers,
employees, local communities, and all other stakeholders,which the Company believes will fuel sustainable growthand greater corporate value over the medium- to longterm. Corporate governance comprises a priority issue
for management in order for the Company to realize its
Mission, and the Company therefore recognizes the need toconstantly strive to make improvements.
In light of the Corporate Gover nance Code, theCompany’s Basic Policy is to respect the rights andequality of shareholders, appropriately cooperate with all
stakeholders, achieve a balance between proper disclosure

Steps to Strengthen Our Governance Structure(most recent five fiscal years)

FY2018

Evaluation of effectiveness of Board of Directors conducted byexternal organization (conducted annually thereafter)
Introduction of performance-linked share-based remuneration plan

FY2019

Revision of criteria for determining independence of external
directors

FY2020

Announcement of Tokuyama’s New Vision
Decision to abolish anti-takeover measures

FY2021One external director added (to strengthen diversity of Board of
Directors)

FY2022

Revision to “Basic Policy on Establishing the Internal Control
System” (revision to a policy focused on Group management)

Corporate Governance Structure
who attend Board of Directors meetings and other important
meetings to monitor the business operations of executive
directors.
Tokuyama introduced an executive officer system toseparate the supervisory and execution functions.

As a Company with an Audit and Supervisory Committee,
Tokuyama seeks to enhance corporate governance at all
times by making the best of its rapid decision-making, as
well as through effective supervising and auditing functions.
The Audit and Supervisory Committee itself is comprised offive directors, including four outside committee members,

Corporate Governance Structure
Shareholders’ Meeting
Appoint/dismiss

Appoint/dismiss

Appoint/dismiss

ReportHuman Resources
Committee

Board of Directors
Audit, etc.
Audit

Decide/supervise

Accounting
Auditors

Audit and Supervisory
Committee
AssistCooperate

Audit and Supervisory
Committee OfficeBusiness Operations

Audit

Whistle-Blowing
SystemHelpline

ReportHelpline Committee

Executive Committee
Strategy Committee

President

CSR Promotion Council
Risk Management andCompliance Committee
Auditing Dept.
Internal audit

Business Divisions, etc.
Group Companies

46

Management Divisions
Guide
Support
RequestCorporate Social Responsibility DivisionCorporate Planning Division, etc.

Meeting Bodies on GovernanceDirectors who are Audit and Supervisory Committee members attend meetings of the Board of Directors and other important internal
meetings in order to gather information on the status of the operation of businesses. They also conduct audits on how well the executive
officers are performing their duties.
• Number of meetings held in FY2021: 24

Human Resources
Committee

This committee holds discussions on such matters as the selection of director and executive officer candidates (excluding those on the
Audit and Supervisory Committee) and their remuneration, before Board of Directors meetings take place.

Executive Committee

Members of the Executive Committee are selected by the president and executive officer (hereinafter referred to as the president) from among theCompany’s other executive officers. The Executive Committee serves as the Company’s decision-making body with respect to the execution ofbusiness operations. In principle, the committee meets two times each month. Based on the approval-related rules and regulations determinedby the Board of Directors, the Executive Committee deliberates and makes decisions on strategies and other important matters.

Strategy Committee

Members of the Strategy Committee are selected by the president from among the Company’s executive officers. The committee meets oncea month and serves as an advisory body to the president. In addition to deliberating on the direction of business execution, the Committee
works to confirm the allocation of management resources with the aim of evaluating conditions relating to business execution in respect toimportant matters requiring approval. It also sets the direction of policies related to business execution with regard to specific projects.

CSR Promotion Council

Chaired by the president, the CSR Promotion Council is comprised of all executive officers. The Committee sets CSR policies and goals,
while also facilitating activities to achieve those goals. The Committee focuses on maintaining appropriate corporate governance andinternal controls, which together form the foundation of the Company’s CSR. It also discusses important matters regarding internal controls.

Risk Management andCompliance Committee

Tokuyama’s Risk Management and Compliance Committee, chaired by the director supervising the Corporate Social Responsibility
Division, operates under the CSR Promotion Council. The Committee takes the initiative in promoting risk management and compliance,
which are central to effective internal control.

Expert Committees

Tokuyama operates various committees focused on risk management and compliance in critical and specialized areas, separately fromthe Risk Management and Compliance Committee. These committees - namely, the Financial Reporting Committee, Fair Trade andCompetition Committee, Security Trade Committee, Information Security Committee, Environment Committee, Safety Committee, andProduct Safety and Quality Assurance Committee - operate under the CSR Promotion Council.
From FY2022, a new Sustainability Committee has been established to discuss areas that fall outside existing frameworks, such as
climate change and human rights.

Helpline Committee

The Helpline Committee is responsible for the administration of Tokuyama’s helpline (whistle-blowing) system, which has been established
for the purpose of enabling the internal reporting of legally questionable actions and behavior by Group executives and employees.

Internal Audit
Department

Tokuyama established this department to be responsible for internal auditing. This department performs internal audits of individual
divisions and departments of the Company as well as of Group companies.

Socially Responsible Management
and Governance

Audit and Supervisory
Committee

Growth Strategy

In addition to deliberating and making resolutions on important matters relating to the activities of the Company, the Board of Directors
supervises business operations.
• Number of meetings held in FY2021: 17

Tokuyama Value Creation

Board of Directors

Analysis and Evaluation of Overall Effectiveness of the Board of Directors

In regard to the Board’s evaluation for the period ended March 2022, theCompany conducted a questionnaire survey and interview of all directors,
after which the Board members held discussions based on the results of
the interviews.
Along with verifying those matters considered to be of material
importance to the Board’s ability to effectively fulfill its roles andresponsibilities (composition and operation of the Board of Directors,
discussions involving strategies, etc.), during the year under review the
Company also confirmed the ways in which the Board should contributeto advancing Medium-Term Management Plan 2025, as well as related
perspectives and measures. In order to objectively ascertain theopinions of each director, the evaluation utilized an external organization
to conduct the questionnaire survey and interviews. In addition, theCompany requested the external organization facilitate the discussions
in order to objectively organize the issues and obtain opinions that would
enhance the Board’s effectiveness.

The evaluation results confirmed that the Company's Board of Directors
consists of a diverse range of members and is characterized by a respect
for free and open discussion against the backdrop of a corporate culture
with a positive atmosphere. The results also confirmed that the Board
functions effectively, owing to the concrete accumulation of initiatives
intended to improve the effectiveness of corporate governance.
One future issue for the Board of Directors, of which the Board
members share a common awareness, is the need in particular to holddeeper discussions regarding the twin management challenges of carbon
neutrality initiatives and business portfolio transformation, as raised in
Medium-Term Management Plan 2025. The Company has confirmedthat backing self-critical and self-reforming management, as well as
deepening discussions from a strategic and overarching perspective, isan important responsibility of the Board with regard to how the Company
addresses these management challenges.
In order to engage these issues, the Company's Board of Directors
will advance initiatives to enhance its effectiveness, including, (1)deepening insight regarding changes in the business environment inwhich the Company is situated, and creating opportunities to debate
measures for handling the important management challenges of carbon
neutrality initiatives and business portfolio transformation; (2) effectively
monitoring the progress of priority measures, including human capital
strategies and technology development strategies, in order to support
achievening the goals set by Medium-Term Management Plan 2025; and(3) rationalizing the Board's operation method, including Board meeting
agendas, materials, presentations, and so forth, in order to fulfill these
responsibilities.

Corporate GovernanceEvaluation Process

Overview of Evaluation Results■

Amid the major transformations taking place throughout
society, the trust and support of stakeholders is essential for
the Company to contribute to building a sustainable society
by conducting business in harmony with the environment
and working to create the future together with its customers
against a backdrop of today’s challenging businessenvironment. In order to earn and retain this trust andsupport, the Company has positioned corporate governanceas a material issue for management, and consequently
determined to evaluate the effectiveness of the Board of
Directors every year.

47

Adoption of Diverse Perspectives
To enable the direction of business execution as earn andretain well as appropriate decision-making with regard to
the Company’s business operations, which are centered on
chemicals, executive officers are appointed in each businesssegment and area based on their knowledge and experience.
When nominating director candidates, the Company
selects those who have demonstrated a high level of insight,
diverse experience, and expertise, in consideration of thebalance and diversity of the Board of Directors, in order toensure the Board properly supervises and provides advice
on important decisions and business operations.
When selecting and dismissing executive officers andnominating director candidates (excluding directors who are
Audit and Supervisory Committee members), discussions
are held at a Human Resources Committee (an entity thatcomprises representative directors and external directors)
meeting in advance of the subject appearing on the agenda

at a Board of Directors meeting. The Board of Directors thenmakes its decisions in response to the Human Resources
Committee’s report.
In regard to the selection and dismissal of the President
and Executive Officer, the President Nomination Committee
deliberates on these matters, and the details of thesedeliberations are then presented to the Board of Directors
following a report by the Human Resources Committee, atwhich point the Board of Directors makes a decision.
In the case of the nomination of directors who are Audit
and Supervisory Committee member candidates, the Boardof Directors makes its decisions after receiving the assent of
the Audit and Supervisory Committee.
*S ee Company’s corporate website for criteria for determining independence of external
directors
https://www.tokuyama.co.jp/eng/company/governance/index.html

Skill Matrix of the Board of Directors
In light of the Company’s Vision and Medium-Term Management Plan 2025, important skills are identified as follows in areas where
directors are expected to contribute for the Board of Directors to conduct effective discussion and appropriately exhibit the required
decision-making and management-supervision functions:Management
Planning andStrategy

Sales andMarketing

Hiroshi Yokota●●

Hideo Sugimura●

Hiroshi Nomura●

Fumiaki Iwasaki●

Youji Miyamoto

●

●

●

Shin Kato●●●

Yuzo Kawamori

●

●

●

Naoki Matsumoto

●

●

●

Nobuko Mizumoto●(Representative Director, President and Executive Officer)(Representative Director, Senior Managing Executive Officer)

Internal(Representative Director, Senior Managing Executive Officer)(Director, Managing Executive Officer)(Director, Audit and Supervisory Committee Chair)(External Director, Audit and Supervisory Committee Member)

External(External Director, Audit and Supervisory Committee Member)(External Director, Audit and Supervisory Committee Member)(External Director, Audit and Supervisory Committee Member)

Finance andAccounting

R&D, Production
Technology andEngineering

Utilizationof Digital
Technology

●
●

●

●

CSR (Legal,
ESG, Safety)

●
●

●

●

●

●

●

Overseas
Business
Operations

●
●

●
●

●

●

●

Response to Chief Executive Officer Succession Plan
In August 2021, the Company established the new
President Nomination Committee, which serves to formulate,
implement, and deliberate on the Chief Executive Officer(President and Executive Officer) Succession Plan, andwhich reports to report to the Human Resources Committee.
The operations of the President Nomination Committee
are regularly reported to the Board of Directors by the48

Human Resources Committee, and are appropriately
audited by the Board, in order to ensure that sufficient timeand resources are invested in the systematic training of
succession candidates based on the Mission, Vision andmanagement strategies of the Company.

Policy on Determining Director Remuneration
on an Individual Basis

The Company has established a policy for determining thecontent of remuneration for directors on an individual basis(excluding those who serve on the Audit and Supervisory
Committee). The following provides an overview of such, whereindividual remuneration is determined by the Board of Directors
following deliberations by the Human Resources Committee*1.

*1 The Human Resources Committee is composed of a majority of external directors anddeliberates matters related to human resources and remuneration regarding officers; it also
serves as a voluntary advisory committee for the Company that makes appropriate reports
and recommendations to the Board of Directors.
*2 All directors, except those who serve on the Audit and Supervisory Committee, Nonexecutive Directors, External Directors, and those not residing in Japan, are eligible for the
performance-linked share-based remuneration plan.

Amount of Remuneration Paid to Directors and Audit
and Supervisory Committee Members (FY2021)
Subject of Remuneration

Number Remunerationof People
AmountDirectors (excluding external directors)

5¥223 million

Directors who are Audit and Supervisory Committee
members (excluding external directors)

1¥27 million

External Directors

4¥52 million*1 Above figures include one director who left office during fiscal year under review*2 A
 bove figures include total of (1) amount obtained by deducting provision for delivery ofshares disclosed in previous fiscal years from amount calculated according to level ofachievement of performance targets for FY2018 to FY2020, and (2) amount of expenses
recorded in fiscal year under review*3 A bove figures do not include employee salary portion for directors also serving in
employee positions■
Corporate Governance

Policy on Determining the Ratio of Remuneration for Directors by TypeThe ratio of remuneration for Company directors by type is determinedin consideration of the ideal balance between the basic standard for the

Method for Determining Director Remuneration on an Individual Basis
1) The final annual amount of basic remuneration for each individual iscalculated and determined by the Representative Director, President
and Executive Officer, having received authorization to do so from theBoard of Directors, based on a standard amount predetermined for eachposition. The Human Resources Committee deliberates on whether the
calculated basic remuneration is appropriate or not.
2) Bonuses are determined by the Representative Director, President andExecutive Officer, having received authorization to do so from the Boardof Directors, based on performance for the target fiscal year after first
determining the payment ratio in accordance with the standard bonus
amounts for each position, the performance targets for the target fiscal
year, and the achievement level for those targets. The Human Resources
Committee deliberates on whether the performance targets, calculation
methods, and calculation results are appropriate or not.
3) Performance-linked shared-based remuneration is calculated by the
Board of Directors using points granted to directors on an individual
basis based on the established executive remuneration share delivery
regulations, following deliberations by the Human Resources Committee.

Socially Responsible Management
and Governance

Policy on Determining Director Remuneration on an Individual Basis
1) T he content (annual amount) of basic remuneration is determinedfrom a comprehensive perspective that takes into account the roles
and responsibilities of each director. Further, the determined basic
remuneration is divided into 12 equal parts and paid on a monthly basis.
2) T he content of bonuses is determined in accordance with theachievement level of the predetermined performance targets for eachfiscal year in respect to the standard amount for bonuses determined
separately for each position. The performance targets are establishedbased on the main financial targets for Tokuyama’s overall performance.
Further, the determined bonuses are paid at a specific time each year.
3) Performance-linked share-based remuneration is based on the fiscal
years covered by the respective medium-term management plan as
the target period, and is provided in the form of Company sharesin accordance with the achievement level for the predetermined
performance targets. The performance targets are established based on
the main financial targets in said medium-term management plan.
Further, as a general rule, this form of remuneration is provided at thecompletion of the target period.
4) The level of remuneration takes into consideration remuneration survey
data provided by external expert organizations.

required roles/responsibilities on the one hand, and incentives to stimulate
the desire to achieve performance targets on the other.

Growth Strategy

Basic Policy
1) The remuneration plan for the Company’s directors is based on thefollowing perspectives:
・Ensures that directors contribute to charting sustainable growth for corporate
performance and corporate value based on the Tokuyama Vision
・P rovides a level of remuneration that secures and retains humanresources that can support the Company’s management
・Considers the performance of the Company
・Employs a highly transparent, objective remuneration decision process2) R emuneration for the Company’s directors consists of basic
remuneration and bonuses in the form of monetary remuneration andperformance-linked share-based remuneration in the form of nonmonetary remuneration*2.

Tokuyama Value Creation

Executive Remuneration

Policy on the Holding of Listed Shares for Purposes Other than Pure Investment
The Company holds shares of publicly listed companies
on a strategic basis in accordance with the necessities of
its business activities as part of its overall management
strategy. This includes the need to maintain and bolstertransactions, raise funds and stably procure raw materials.
As far as the strategic holding of shares in publicly listedcompanies is concerned, the Company will limit its holdings
to the minimum level possible, taking into consideration
the need to ensure efficient corporate management. It
sold all shares of one listed issue in FY2021, resulting in a

total of 21 listed issues of shareholdings as of March 31,
2022. In addition, the Board of Directors takes steps toverify the economic rationality of holding shares in publicly
listed companies by comparing capital costs that factor inassociated risks with accrued benefits, while confirming
the propriety of its holdings based on a future outlook eachyear. The Company exercises its voting rights based on thecontribution to corporate value for both the Company andthe investee.

ComplianceTokuyama understands “compliance” to have a broad
meaning, including not only complying with laws andinternal rules but also behaving sensibly in a manner that
conforms with corporate ethics to meet social expectations.
To communicate and spread awareness of compliancethroughout the Group, the Company has put together ahandbook that includes the Tokuyama Group Code of
Conduct. It is distributed to all Group officers and employees.
In addition, we also conduct rank-based training andmeetings with those in charge of compliance at our Group
companies.

49

Management Team (as of June 24, 2022)*From left to right: Hiroshi Nomura, Fumiaki Iwasaki, Naoki Matsumoto, Shin Kato, Hiroshi Yokota, Nobuko Mizumoto, Yuzo Kawamori, Youji Miyamoto, Hideo Sugimura

Hiroshi Yokota

Representative Director, President and Executive Officer
In charge of Chemicals, Cement, Auditing Department

Utilizing abundant operational experience in personnel and labor issues, traditional businesses,
and advanced materials, he is actively working on the promotion of Medium-Term Management
Plan 2025 priorities such as portfolio transformation, carbon neutrality, etc.

• Date of birth: October 12, 1961
• Number of Company shares owned: 27,400 shares• Tenure as director: 7 years• Attendance at meetings of the Board of Directors
during the fiscal year ended March 31, 2022:
17/17 (100%)

Hideo Sugimura

Representative Director, Senior Managing Executive Officer
In charge of Corporate Planning, Corporate Social Responsibility, General Affairs and Human Resources,
Procurement and Logistics, Secretarial Department• Date of birth: October, 22, 1959
• Number of Company shares owned: 5,403 shares• Tenure as director: 5 years• Attendance at meetings of the Board of Directors
during the fiscal year ended March 31, 2022:
17/17 (100%)

Hiroshi Nomura

Representative Director, Senior Managing Executive Officer
In charge of Electronic Materials, Tokuyama Factory, Environment & Safety and Manufacturing Technology ofKashima Factory• Date of birth: September 30, 1957
• Number of Company shares owned: 3,500 shares• Tenure as director: 3 years• Attendance at meetings of the Board of Directors
during the fiscal year ended March 31, 2022:
17/17 (100%)

50

With extensive operational experience including the introduction of an information system,
management of an overseas subsidiary, and reconstruction of a domestic subsidiary, he is engaged
in promoting growth by making plans and strategies as a general manager, with responsibility forcorporate planning and corporate business management.

Drawing on abundant experience in the manufacturing field, business planning, and managementof overseas subsidiaries, he is actively engaged in business promotion, notably in the electronicmaterials field and overseas business deployment.
Significant concurrent positions: Chairman, Tokuyama Chemicals (Zhejiang) Co., Ltd.

Director, Managing Executive Officer
In charge of Life Science, Eco Business, Research and Development• Date of birth: June 21, 1960
• Number of Company shares owned: 2,342 shares• Tenure as director: 2 years• Attendance at meetings of the Board of Directors
during the fiscal year ended March 31, 2022:
17/17 (100%)

Youji Miyamoto

Making use of extensive experience he has gained in the field of research and development andmanufacturing technology, he is actively pursuing the promotion of new research and development.

Director, Audit and Supervisory Committee Member

With a high degree of expertise in finance and accounting gained through his years of accounting
operation at the Company, he has been supervising management as an Audit and Supervisory
Board member of the Company since 2013, and as a director who is an Audit and Supervisory
Committee member since 2017.

Growth Strategy• Date of birth: January 22, 1958
• Number of Company shares owned: 1,900 shares• Tenure as director: 5 years• Attendance at meetings of the Board of Directors during
the fiscal year ended March 31, 2022: 17/17 (100%)• Attendance at meetings of the Audit and Supervisory Committee
during the fiscal year ended March 31, 2022: 24/24 (100%)

Shin Kato

Tokuyama Value Creation

Fumiaki Iwasaki

Significant concurrent positions: Auditor, ASTOM Corporation; Auditor, Tokuyama Dental Corporation; Audit andSupervisory Board Member, A&T Corporation

External Director, Audit and Supervisory Committee Member

Yuzo Kawamori

He has a professional perspective and abundant experience as an attorney at law, and has beensupervising management as an external director who is an Audit and Supervisory Committee
member since 2017.

Socially Responsible Management
and Governance• Date of birth: June 27, 1961
• Number of Company shares owned: 1,700 shares• Tenure as director: 5 years• Attendance at meetings of the Board of Directors during
the fiscal year ended March 31, 2022:17/17 (100%)• Attendance at meetings of the Audit and Supervisory Committee
during the fiscal year ended March 31, 2022: 24/24 (100%)

Significant concurrent positions: Representative Lawyer, Kato Law Office

External Director, Audit and Supervisory Committee Member• Date of birth: April 1, 1953
• Number of Company shares owned: 700 shares• Tenure as director: 3 years• Attendance at meetings of the Board of Directors during
the fiscal year ended March 31, 2022:17/17 (100%)• Attendance at meetings of the Audit and Supervisory Committee
during the fiscal year ended March 31, 2022: 24/24 (100%)

Nobuko Mizumoto• Date of birth: March 31, 1957
• Number of Company shares owned: 200 shares• Tenure as director: 1 year
• Attendance at meetings of the Board of Directors during
the fiscal year ended March 31, 2022:13/13 (100%)• Attendance at meetings of the Audit and Supervisory Committee
during the fiscal year ended March 31, 2022: 18/18 (100%)

Management Team

Naoki Matsumoto

Possessing extensive experience and broad insight in the manufacturing industry as a corporate
manager, he has been supervising management as an external director who is an Audit andSupervisory Committee member since 2019.

■• Date of birth: July 25, 1947
• Number of Company shares owned: 800 shares• Tenure as director: 3 years• Attendance at meetings of the Board of Directors during
the fiscal year ended March 31, 2022:17/17 (100%)• Attendance at meetings of the Audit and Supervisory Committee
during the fiscal year ended March 31, 2022: 24/24 (100%)External Director, Audit and Supervisory Committee Member

Drawing on abundant experience and broad insight as a corporate manager in financial institutions,
he has been supervising management as an external director who is an Audit and Supervisory
Committee member since 2019.

External Director, Audit and Supervisory Committee Member

After experience as a researcher in the manufacturing industry, she gained wide and extensive
experience as a manager through her career in major posts in head office divisions. She has beensupervising management as an external director who is an Audit and Supervisory Committee
member since 2021.

51

Corporate Data (as of March 31, 2022)
Corporate name

Tokuyama Corporation

EstablishedFebruary 16, 1918

Location【Tokyo Head Office】
Front Place Akihabara
7-5 Sotokanda 1-chome, Chiyoda-ku,
Tokyo 101-8618, Japan
TEL. +81-3-5207-2500 FAX. +81-3-5207-2580【Tokuyama Factory (Registered Address)】
1-1 Mikage-cho, Shunan-shi, Yamaguchi
745-8648, Japan
TEL. +81-834-34-2000 FAX. +81-834-33-3790【Other Facilities in Japan】
Kashima Factory, Tsukuba Research Laboratory,
Osaka Office, Hiroshima Branch, Takamatsu
Branch, Fukuoka Branch, Nagoya Sales
Branch, Shunan Sales Branch, Center forCommercialization of Advanced Technology

Capital¥10,000 million

Number of
employees

5,665 (consolidated basis; 636 working overseas)
2,315 (non-consolidated)

Business Sites in Japan

Tokuyama
Factory

NagoyaSales Branch

ShunanSales Branch

Hiroshima
BranchTsukuba
Research
Laboratory

Fukuoka
BranchTokyo
Head Office

Number of group 87
companies
Takamatsu
Branch* Sendai Branch was closed on March 31, 2022

Kashima
Factory

Osaka Office

Center forCommercialization ofAdvanced Technology

Stock Information
Total number of sharesauthorized to be issued

Common shares: 200,000,000 shares

Number of shares issued

72,074,052 common shares(excluding 14,275 treasury shares)

Number of shareholders

Common shares: 26,619 shareholders

Fiscal year

From April 1 to March 31

Global Network

Germany

Tokuyama Europe GmbH

Dividend Policy

Korea

Dividends will be paid to the shareholders stated in the final versionof the register of shareholders on March 31 and September 30. As
far as the distribution of profits is concerned, Tokuyama's basic
policy is to ensure the continuous and stable payment of dividends
to its shareholders. In carrying out this policy, the Company takes
into consideration performance trends, dividend payout ratio and theroadmap established under its medium- to long-term business plan.

Tokuyama Korea Co., Ltd.
Tokuyama America Inc.

U.S.A.

Shareholders by Type
4.3%
12.3%

24.4%

Shareholders
by Type
20.6%

Singapore
Tokuyama Singapore Pte. Ltd.

China

38.4%

■Securities Companies (3,089 thousand shares)■Other Domestic Corporations (8,830 thousand shares)■Financial Institutions (27,710 thousand shares)■Non-Japanese Corporations/Foreign Residents (14,832 thousand shares)■Individual/Other（17,625 thousand shares）

52

Tokuyama (Shanghai) Co., Ltd.
Tokuyama Trading (Shanghai) Co., Ltd.

*T
 okuyama Asia Pacific Pte. Ltd. and Tokuyama Electronic Chemicals Pte. Ltd. merged toform Tokuyama Singapore Pte. Ltd. on April 1, 2022

(as of July 1, 2022)

Tokuyama Value Creation

Principal Group Companies

Electronic Materials

Chemicals

Tokuyama Chemicals (Zhejiang) Co., Ltd.*1
Production and sale of fumed silica, high-purity
chlorosilane, high-purity chemicals for electronics
manufacturing

Tokuyama-Dowa Power Materials Co., Ltd.

Production and sale of aluminum nitride substrates

Taiwan Tokuyama Corporation

Other

Tokuyama Soda Trading Co., Ltd.

Tomitec Co., Ltd.

Shin Dai-ichi Vinyl Corporation*

Shunan System Sangyo Co., Ltd.

Stocking and sale of soda ash and calcium chloride
1

Production and sale of PVC resin

Sun Arrow Kasei Co., Ltd.

Production and sale of PVC resin compounds

Production and sale of high-purity IPA

Production and sale of high-purity IPA

Hantok Chemicals Co., Ltd. *2

Production and sale of photoresist developer

Hiroshima Tokuyama Ready Mixed
Concrete Co., Ltd.
Production and sale of ready-mixed concrete

Tokuyama Nouvelle Calédonie S.A.
Tokyo Tokuyama Concrete Co., Ltd.

Production and sale of ready-mixed concrete andconcrete products

A&T Corporation

Seibu Tokuyama Ready Mixed
Concrete Co., Ltd.

Production and sale of diagnostic reagents,
analyzers and systems

A&T Shanghai Co., Ltd.

Sale of diagnostic reagents, analyzers and systems

Tokuyama Dental Corporation

Production and sale of dental materials andequipment

Tokuyama Dental America Inc.
Sale of dental materials and equipment

Collection of waste gypsum board, production
and sale of gypsum dihydrate, operation of waste
gypsum board recycling business

ASTOM Corporation

Production, sale and maintenance of ion
exchange membranes and related equipment

Excel Shanon Corporation

Production and sale of ready-mixed concrete

Kyushu Tokuyama Ready Mixed
Concrete Co., Ltd.

Production and sale of ready-mixed concrete

R&D and marketing in growth businesses

CoorsTek Tokuyama Corporation*2
Production and sale of ceramics andelectrochemical products

Sun·Tox Co., Ltd. *2

Production and sale of polyolefin films

Tokuyama Polypropylene Co., Ltd. *2
Production and sale of polypropylene

Nishinihon Resicoat Co., Ltd.*2

Production of metal parts and anti-rust surface
coating materials

Shirokawa Co., Ltd.

Production and sale of ready-mixed concrete

Tokuyama MTech Corporation

Processing and sale of building materials andchemical products

Tokuyama Tsusho Trading Co., Ltd.

Stocking and sale of cement and ready-mixed
concrete

Kansai Tokuyama Trading Co., Ltd.

Tohoku Shanon Co., Ltd.

Tokushou Co., Ltd.

Production and sale of gas sensor devices andrelated products

Tokuyama Taiwan Marketing &Research Center Co., Ltd.

Production and sale of ready-mixed concrete

Stocking and sale of cement and ready-mixed
concrete

Figaro Engineering Inc. *2

Warehouse operations for bulk cargoes of coal, etc.

Chugoku Ready Mixed Concrete Co., Ltd.

Production and sale of plastic window sashes

Production and sale of plastic window sashes

Shunan Bulk Terminal Co., Ltd.

Corporate Data

Tokuyama Chiyoda Gypsum Co., Ltd.

Kawasaki Tokuyama Ready Mixed
Concrete Co., Ltd.

Information processing services■

Eco Business

Production and sale of ready-mixed concrete

Tokuyama Information Service
Corporation

Socially Responsible Management
and Governance

Shanghai Tokuyama Plastics Co., Ltd. *1
Production and sale of microporous film

Tokuyama Kairiku Unso K.K.

Shipping, transportation and warehousing

CementProduction and sale of cement

Life Science

Civil engineering and construction work andplanning, onsite contracted factory work, andstocking and sale of construction materials

Growth Strategy

Formosa Tokuyama Advanced
Chemicals Co., Ltd.*1

Production and sale of plastic molded products

Stocking and sale of cement and ready-mixed
concrete

Tokushin Co., Ltd.

Stocking and sale of cement and ready-mixed
concrete

Sanyo Tokuyama Ready Mixed
Concrete Co., Ltd. *2

Production and sale of ready-mixed concrete

Yamaguchi Eco-tech Corporation*2
Recycling business of incinerated ash waste*1 Specified subsidiary*2 Equity method affiliates

53

Front Place Akihabara
7-5 Sotokanda 1-chome, Chiyoda-ku, Tokyo 101-8618, Japan
Corporate Social Responsibility Divisionhttps://www.tokuyama.co.jp/eng/